EUROPACIFIC GROWTH FUND
Part B
Statement of Additional Information
JUNE 1, 1995
(as amended June 22, 1995)
This document is not a prospectus but should be read in conjunction with the
current Prospectus of EuroPacific Growth Fund (the "fund" or "EUPAC") dated
June 1, 1995. The Prospectus may be obtained from your investment dealer or
financial planner or by writing to the fund at the following address:
EuroPacific Growth Fund
Attention: Secretary
333 South Hope Street
Los Angeles, CA 90071
(213) 486-9200
The fund has two forms of prospectuses. Each reference to the prospectus in
this Statement of Additional Information includes both of the fund's
prospectuses. Shareholders who purchase shares at net asset value through
eligible retirement plans should note that not all of the services or features
described below may be available to them, and they should contact their
employer for details.
TABLE OF CONTENTS
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Item Page No.
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Investment Policies 2
Certain Risk Factors Relating to Below Investment Grade Bonds 3
Investment Restrictions 3
Fund Trustees and Officers 6
Management . 11
Dividends, Distributions and Federal Taxes. 13
Purchase of Shares 16
Shareholder Account Services and Privileges 18
Redemption of Shares 19
Execution of Portfolio Transactions 19
General Information 19
Investment Results 21
Description of Bond Ratings 25
Financial Statements Attached
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INVESTMENT POLICIES
The fund's investment objective is to achieve long-term growth of capital by
investing in securities of issuers domiciled outside the U.S. In determining
the domicile of an issuer, Capital Research and Management Company (the
"Investment Adviser") takes into account such factors as where the company is
legally organized and/or maintains principal corporate offices and/or conducts
its principal operations.
CASH EQUIVALENTS - These securities include (1) commercial paper (short-term
notes up to 9 months in maturity issued by corporations or governmental
bodies), (2) commercial bank obligations (certificates of deposit, bankers'
acceptances (time drafts on a commercial bank where the bank accepts an
irrevocable obligation to pay at maturity) and documented discount notes
(corporate promissory discount notes accompanied by a commercial bank guarantee
to pay at maturity)), (3) savings association and state chartered savings bank
obligations (e.g., certificates of deposit issued by savings banks or savings
and loan associations), (4) securities of the U.S. Government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (5)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.
REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements, under
which the fund buys a security and obtains a simultaneous commitment from the
seller to repurchase the security at a specified time and price. Repurchase
agreements permit the fund to maintain liquidity and earn income over periods
of time as short as overnight. The seller must maintain with the fund's
custodian collateral equal to at least 100% of the repurchase price including
accrued interest, as monitored daily by Capital Research and Management
Company. See "Management" below. The fund only will enter into repurchase
agreements involving securities in which it could otherwise invest and with
selected banks and securities dealers whose financial condition is monitored by
the Investment Adviser. If the seller under the repurchase agreement defaults,
the fund may incur a loss if the value of the collateral securing the
repurchase agreement has declined and may incur disposition costs in connection
with liquidating the collateral. If bankruptcy proceedings are commenced with
respect to the seller, realization upon the collateral by the fund may be
delayed or limited.
CURRENCY TRANSACTIONS - The fund has the ability to hold a portion of its
assets in U.S. dollars and other currencies and to enter into certain currency
contracts (on either a spot or forward basis) in connection with investing in
non-U.S. dollar denominated securities including foreign currency exchange and
forward currency contracts. A foreign exchange contract is used to facilitate
settlement of trades. For example, the fund might purchase a currency or enter
into a foreign exchange contract to preserve the U.S. dollar price of
securities it has contracted to purchase. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, the fund
might enter into a forward currency contract to protect against an anticipated
decline in value of a foreign currency against the U.S. dollar when it holds
securities denominated in that foreign currency. To avoid having an amount
greater than its net assets subject to market risk in connection with currency
contract transactions, the fund will segregate cash, cash equivalents, or high
quality debt instruments to the extent required by the Securities and Exchange
Commission.
144A SECURITIES - Normally, securities acquired in U.S. private placements are
subject to contractual restrictions on resale and may not be resold except
pursuant to a registration statement under the Securities Act of 1933 or in
reliance upon an exemption from the registration requirements under the Act,
for example, private placements sold pursuant to Rule 144A. Accordingly, any
such obligation will be deemed illiquid (unless procedures for determining
liquidity are adopted by the fund's board of trustees), and the fund may incur
certain additional costs in disposing of such securities.
The fund will not invest more than 5% of the value of its total assets in
securities which are subject to contractual restrictions on resale. Non-U.S.
securities that can be freely traded in a foreign securities market and for
which the facts and circumstances support a finding of liquidity are not
included for the purposes of this limitation.
CERTAIN RISK FACTORS RELATING TO BELOW INVESTMENT GRADE BONDS
Certain risk factors relating to investing in below investment grade
securities ("high-yield, high-risk bonds") are discussed below.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES - High-yield, high-risk bonds
are very sensitive to adverse economic changes and corporate developments.
During an economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress that would adversely
affect their ability to service their principal and interest payment
obligations, to meet projected business goals, and to obtain additional
financing. If the issuer of a bond defaulted on its obligations to pay
interest or principal or entered into bankruptcy proceedings, the fund may
incur losses or expenses in seeking recovery of amounts owed to it. In
addition, periods of economic uncertainty and changes can be expected to result
in increased volatility of market prices of high-yield, high-risk bonds.
PAYMENT EXPECTATIONS - High-yield, high-risk bonds, like other bonds, may
contain redemption or call provisions. If an issuer exercised these provisions
in a declining interest rate market, the fund would have to replace the
security with a lower yielding security, resulting in a decreased return for
investors. Conversely, a high-yield, high-risk bond's value will decrease in a
rising interest rate market, as it will with all bonds.
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 high-yield, high-risk bonds, especially in a thin
market.
If, as a result of a downgrade or otherwise, the fund holds more than 5% of
its net assets in high-yield, high-risk bonds, the fund will dispose of the
excess as expeditiously as possible.
INVESTMENT RESTRICTIONS
The fund has adopted certain investment restrictions which may not be changed
without a majority vote of its outstanding shares. Such majority is defined by
the Investment Company Act of 1940 (the "1940 Act") as the vote of the lesser
of (i) 67% or more of the outstanding voting securities present at a meeting,
if the holders of more than 50% of the outstanding voting securities are
present in person or by proxy, or (ii) more than 50% of the outstanding voting
securities. All percentage limitations expressed in the following investment
restrictions are measured immediately after and giving effect to the relevant
transaction. The fund may not:
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 would be invested
in the securities of such other issuer (except with respect to 25% of the value
of the total assets, the fund may exceed the 5% limitation with regards to
investments in the securities of any one foreign government);
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. Invest more than 5% of its total assets in the securities of other
investment companies; such investments shall be limited to 3% of the voting
stock of any investment provided, however, that investment in the open market
of a closed-end investment company where no more than customary brokers'
commissions are involved and investment in connection with a merger,
consolidation, acquisition or reorganization shall not be prohibited by this
restriction;
5. Buy or sell real estate in the ordinary course of its business; however,
the fund may invest in securities secured by real estate or interests therein
or issued by companies, including real estate investment trusts and funds,
which invest in real estate or interests therein;
6. Buy or sell commodities or commodity contracts in the ordinary course of
its business provided, however, that the entering into of a foreign currency
contract shall not be prohibited by this restriction;
7. Invest more than 10% of the value of its total assets in securities which
are not readily marketable or more than 5% of the value of its total assets in
securities which are subject to legal or contractual restrictions on resale
(except repurchase agreements) or 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. The fund may buy and sell
securities outside the U.S. which are not registered with the Securities and
Exchange Commission or marketable in the U.S. without regard to this
restriction. The fund may not enter into any repurchase agreement if, as a
result, more than 10% of total assets would be subject to repurchase
agreements maturing in more than seven days. (See "Repurchase Agreements"
above);
8. Lend any of its assets; provided, however that entering into repurchase
agreements, investment in government obligations, publicly traded bonds,
debentures, other debt securities or in cash equivalents such as short term
commercial paper, certificates of deposit, or bankers acceptances, shall not be
prohibited by this restriction;
9. 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;
10. Purchase securities on margin;
11. Borrow amounts in excess of 5% of the value of its total assets or issue
senior securities. In any event, the fund may borrow only as a temporary
measure for extraordinary or emergency purposes and not for investment in
securities;
12. Mortgage, pledge or hypothecate its total assets to any extent;
13. Purchase or retain the securities of any issuer, if those individual
officers and trustees 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;
14. 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;
15. Invest in puts, calls, straddles or spreads, or combinations thereof; nor
16. Purchase partnership interests in oil, gas, or mineral exploration,
drilling or mining ventures.
As to 75% of the fund's total assets, investments in any one issuer will be
limited to no more than 10% of the voting securities of such issuer. This is a
non-fundamental policy which may be modified by the Board of Trustees without
shareholder approval.
FUND TRUSTEES AND OFFICERS
TRUSTEES AND TRUSTEE COMPENSATION
(with their principal occupations during the past five years)#
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NAME, ADDRESS AND AGE POSITION WITH PRINCIPAL OCCUPATION(S) DURING PAST AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
TOTAL NUMBER
REGISTRANT 5 YEARS (POSITIONS WITHIN THE (INCLUDING VOLUNTARILY ALL FUNDS MANAGED BY OF FUND
BOARDS
ORGANIZATIONS LISTED MAY HAVE DEFERRED COMPENSATION/1/) CAPITAL RESEARCH AND ON
WHICH
CHANGED DURING THIS PERIOD) FROM THE COMPANY MANAGEMENT COMPANY/2/ DIRECTOR SERVES
DURING FISCAL YEAR ENDED
3/31/95
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Elisabeth Allison Trustee Former Senior Vice President, $17,750 $35,250 2
62 West 62nd Street Planning and Development,
New York, NY 10023 McGraw Hill, Inc.
Age: 48
+ David I. Fisher Trustee Chairman of the Board, None None 2
333 South Hope Street The Capital Group Companies, Inc.
Los Angeles, CA 90072
Age: 55
Robert A. Fox Trustee President and Chief Executive Officer, $16,650 $74,250 5
P.O Box 457 Foster Farms, Inc.; Former President,
Livingston, CA 95334 Revlon International; former
Age: 58 Chairman and Chief Executive
Officer, Clarke Hooper America
(advertising)
Alan Greenway Trustee President, Greenway Associates, Inc. $17,900 $60,533 4
7413 Fairway Road (management consulting services)
La Jolla, CA 92037
Age: 67
+ William R. Grimsley Trustee Senior Vice President and Director, None None 3
P.O. Box 7650 Capital Research and Management
San Francisco, CA 94111 Company
Age: 57
Koichi Itoh Trustee Managing Partner, $15,800 $21,800 2
7-14-11-104 Minami Aoyama VENCA Management
Minato-ku, Tokyo, Japan (venture capital)
Age: 54
William H. Kling Trustee President, Minnesota Public Radio; $16,700 $63,533 4
45 East Seventh Street President, Greenspring Co.; former
St. Paul, MN 55101 President, American Public Radio
Age: 53 (now Public Radio International)
John G. McDonald Trustee The IBJ Professor of Finance, $15,817 $128,717 7
Graduate School of Business Graduate School of Business,
Stanford University Stanford University
Stanford, CA 94305
Age: 58
William I. Miller Trustee Chairman of the Board, $16,450 $33,550 2
500 Washington Street Irwin Financial Corporation
Box 929
Columbus, IN 47202
Age: 39
Donald E. Petersen Trustee Former Chairman of the Board and N/A 30550 4
222 East Brown, Suite 460 Chief Executive Officer, Ford Motor
Birmingham, MI 48009 Company
Age: 68
+ Walter P. Stern Chairman of Chairman, Capital Group International, None None 8
630 Fifth Avenue the Board Inc.; Vice Chairman, Capital Research
New York, NY 10111 International; Director, The Capital
Age: 66 Group Companies, Inc.; Chairman,
Capital International, Inc.; Director,
Temple-Inland Inc. (forest products)
+ Thierry Vandeventer President Chairman of the Board, Capital None None 2
3 Place des Bergues Research Company
1201 Geneva, Switzerland
Age: 59
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# Positions within the organizations may have changed during this period.
+ Trustees who are considered "interested persons as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), on the basis of their
affiliation with the fund's Investment Adviser, Capital Research and Management
Company.
/1/ Amounts may be deferred by eligible trustees under a non-qualified
deferred compensation plan adopted by the fund in 1993. Deferred amounts
accumulate at an earnings rate determined by the total return of one or more of
the funds in the American Funds Group as designated by the trustee.
/2/ Capital Research and Management Company manages The American Funds Group
consisting of 28 funds: AMCAP Fund, American Balanced Fund, Inc., American
High-Income Municipal Bond Fund, Inc., American High-Income Trust, American
Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management Trust of
America, Capital Income Builder, Inc., Capital World Growth and Income Fund,
Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America.
Inc., Intermediate Bond Fund of America, The Investment Company of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of
America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of
Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of
America, The U.S. Treasury Money Fund of America, U.S. Government Securities
Fund and Washington Mutual Investors Fund, Inc. Capital Research and
Management Company also manages American Variable Insurance Series and Anchor
Pathway Fund which serve as the underlying investment vehicles for certain
variable insurance contracts.
OFFICERS
(with their principal occupations during the past five years)#
WALTER P. STERN, Chairman of the Board (see above).
THIERRY VANDEVENTER, President (see above).
STEPHEN E. BEPLER, Executive Vice President. 630 Fifth Avenue, New York, NY,
10111.
Senior Vice President and Director, Capital Research Company.
JANET A. MCKINLEY, Vice President. 630 Fifth Avenue, New York, NY, 10111.
Senior Vice President, Capital Research Company.
WILLIAM R. GRIMSLEY, Vice President (see above).
** STEVEN N. KEARSLEY, Treasurer.
Vice President and Treasurer, Capital Research and Management Company.
* VINCENT P. CORTI, Secretary.
Vice President - Fund Business Management Group, Capital Research and
Management Company.
** MARY C. CREMIN, Assistant Treasurer.
Senior Vice President - Fund Business Management Group, Capital Research and
Management Company.
** R. MARCIA GOULD, Assistant Treasurer.
Vice President - Fund Business Management Group, Capital Research and
Management Company
_________________________
# Positions within the organizations listed may have changed during this
period.
* Address is 333 South Hope Street, Los Angeles, CA 90071.
** Address is 135 South State College Boulevard, Brea, CA 92621.
All of the Trustees and officers are also officers and/or directors and/or
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 Trustee who is a director, officer or employee of
the Investment Adviser or affiliated companies. The compensation paid by the
fund to unaffiliated Trustees is $9,000 per annum, plus $750 for each Board of
Trustees meeting attended, plus $400 for each meeting attended as a member of a
committee of the Board of Trustees. The Trustees 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 fund also reimburses certain expenses of the
Trustees who are not affiliated with the Investment Adviser. The total
compensation paid by the fund to unaffiliated Trustees during the fiscal year
ended March 31, 1995 was $ 137,125. As of May 1, 1995 the officers and
Trustees of the fund and their families as a group owned beneficially or of
record less than 1% of the outstanding shares of the fund.
MANAGEMENT
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains
research facilities in the U.S. and abroad, with a staff of professionals, many
of whom have a number of years of investment experience. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world.
The Investment Adviser believes that it is able to attract and retain quality
personnel.
An affiliate of the Investment Adviser compiles indices for major stock
markets around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The Investment Adviser is responsible for approximately $100 billion of
stocks, bonds and money market instruments and serves over five million
investors 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, unless
sooner terminated, will continue until March 31, 1995 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 Trustees, or by the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities, and
(ii) the vote of a majority of Trustees 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).
Under the Agreement, the Investment Adviser receives from the fund a monthly
fee calculated at the annual rate of 0.69% on the first $500 million of
average net assets, plus 0.59% on such assets in excess of $500 million but
less than $1 billion, plus 0.53% on such assets in excess of $1 billion but
less than $1.5 billion, plus 0.50% on such assets in excess of $1.5 billion but
less than $2.5 billion, plus 0.48% on such assets in excess of $2.5 billion but
less than $4 billion, plus 0.47% on such assets in excess of $4 billion but
less than $6.5 billion, plus 0.465% on such assets in excess of $6.5 billion.
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of
qualified persons to perform executive, administrative, clerical and
bookkeeping functions of the fund; provides suitable office space and
utilities; and provides necessary small office equipment and general purpose
accounting forms, supplies, and postage used at the offices of the fund
relating to the services furnished by the Investment Adviser.
The fund pays all expenses not specifically assumed by the Investment Adviser,
including, but not limited to, custodian, stock transfer and dividend
disbursing fees and expenses; expenses pursuant to the fund's Plan of
Distribution (described below); costs of designing, printing and mailing
reports, prospectuses, proxy statements and notices to shareholders; taxes;
expenses of the issuance, sale, redemption, or repurchase of shares of the fund
(including stock certificates, registration and qualification fees and
expenses); legal and auditing fees and expenses; compensation, fees, and
expenses paid to Trustees not affiliated with the Investment Adviser;
association dues; and costs of stationery and forms prepared exclusively for
the fund.
The Investment Adviser will reimburse the fund to the extent that the fund's
annual operating expenses, exclusive of taxes, interest, brokerage costs,
distribution expenses and extraordinary expenses such as litigation and
acquisitions, exceed the expense limitations applicable to the fund imposed by
state securities laws or any regulations thereunder. Only one state
(California) continues to impose expense limitations on funds registered for
sale therein. The California provision currently limits annual expenses to the
sum of 2-1/2% of the first $30 million of average net assets, 2% of the next
$70 million and 1-1/2% of the remaining average net assets. Rule 12b-1
distribution plan expenses would be excluded from this limit. Expenditures,
including costs incurred in connection with the purchase or sale of portfolio
securities, which are capitalized in accordance with generally accepted
accounting principles applicable to investment companies, are accounted for as
capital items and not as expenses. The fund might be eligible to exclude
certain additional expenses, such as expenses of maintaining foreign custody of
certain portfolio securities by obtaining a waiver of such limit from
California.
During the fiscal years ended March 31, 1995, 1994, and 1993 , the Investment
Adviser's total fees amounted to $38,787,000, $24,646,000, and $14,183,000 ,
respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal
Underwriter") is the principal underwriter of the fund's shares. The fund has
adopted a Plan of Distribution (the "Plan"), pursuant to rule 12b-1 under the
1940 Act (see "Principal Underwriter" in the Prospectus). The Principal
Underwriter receives amounts payable pursuant to the Plan (see below) and
commissions consisting of that portion of the sales charge remaining after the
discounts which it allows to investment dealers. Commissions retained by the
Principal Underwriter on sales of fund shares during the fiscal year ended
March 31, 1995 amounted to $10,521,000 after allowance of $55,988,000 to
dealers. During the fiscal years ended March 31, 1994 and 1993 the Principal
Underwriter retained $11,218,000 and $4,911,000 and , respectively.
As required by rule 12b-1, the Plan (together with the Principal Underwriting
Agreement) has been approved by the full Board of Trustees and separately by a
majority of the Trustees who are not "interested persons" of the fund and who
have no direct or indirect financial interest in the operation of the Plan or
the Principal Underwriting Agreement, and the Plan has been approved by the
vote of a majority of the outstanding voting securities of the fund. The
officers and Trustees who are "interested persons" of the fund may be
considered to have a direct or indirect financial interest in the operation of
the Plan due to present or past affiliations with the Investment Adviser and
related companies. Potential benefits of the Plan to the fund include improved
shareholder services, savings to the fund in transfer agency costs, savings to
the fund in advisory fees and other expenses, benefits to the investment
process from growth or stability of assets and maintenance of a financially
healthy management organization. The selection and nomination of Trustees who
are not "interested persons" of the fund are committed to the discretion of the
Trustees who are not "interested persons" during the existence of the Plan.
The Plan is reviewed quarterly and must be renewed annually by the Board of
Trustees.
Under the Plan the fund may expend up to 0.25% of its average net assets
annually to finance any activity which is primarily intended to result in the
sale of fund shares, provided the fund's Board of Trustees has approved the
category of expenses for which payment is being made. These include service
fees for qualified dealers and dealer commissions and wholesaler compensation
on sales of shares exceeding $1 million. During the fiscal year ended March
31, 1995, the fund paid or accrued $17,580,000 under the Plan.
The Glass-Stegall Act and other applicable laws, among other things, generally
prohibit commercial banks from engaging in the business of underwriting,
selling or distributing securities, but permit banks to make shares of mutual
funds available to their customers and to perform administrative and
shareholder servicing functions. However, judicial or administrative decisions
or interpretations of such laws, as well as changes in either federal or state
statutes or regulations relating to the permissible activities of banks or
their subsidiaries of affiliates, could prevent a bank from continuing to
perform all or a part of its servicing activities. If a bank were prohibited
from so acting, shareholder clients of such bank would be permitted to remain
shareholders of the fund and alternate means for continuing the servicing of
such shareholders would be sought. In such event, changes in the operation of
the fund might occur and shareholders serviced by such bank might no longer be
able to avail themselves of any automatic investment or other services then
being provided by such bank. It is not expected that shareholders would suffer
with adverse financial consequences as a result of any of these occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and certain banks and financial
institutions may be required to be registered as dealers pursuant to state law.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
The fund intends to meet all the requirements and has elected the tax status
of a "regulated investment company" under the provisions of Subchapter M of the
Internal Revenue Code of 1986 (the Code). Under Subchapter M, if the fund
distributes within specified times at least 90% of the sum of its investment
company taxable income it will be taxed only on that portion, if any, of the
investment company taxable income that it retains.
To qualify, the fund must (a) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and
gains from the sale or other disposition of stock, securities, currencies or
other income derived with respect to its business of investing in such stock,
securities or currencies; (b) derive less than 30% of its gross income from the
sale or other disposition of stock or securities held for less than three
months; and (c) diversify its holdings so that at the end of each fiscal
quarter, (i) at least 50% of the market value of the fund's assets is
represented by cash, U.S. Government securities and other securities which must
be limited, in respect of any one issuer, to an amount not greater than 5% of
the fund's assets and 10% of the outstanding voting securities of such issuer,
and (ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies), or in two or more issuers
which the fund controls and which are engaged in the same or similar trades or
businesses or related trades or businesses.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gain net income (both long-term and
short-term) for the one-year period ending on October 31 (as though the
one-year period ending on October 31 were the regulated investment company's
taxable year), and (iii) the sum of any untaxed, undistributed net investment
income and net capital gains of the regulated investment company for prior
periods. The term "distributed amount" generally means the sum of (i) amounts
actually distributed by the fund from its current year's ordinary income and
capital gain net income and (ii) any amount on which the fund pays income tax
for the year. The fund intends, to the extent practicable, to meet these
distribution requirements to minimize or avoid the excise tax liability.
The fund also intends to distribute to shareholders all of the excess of net
long-term capital gain over net short-term capital loss on sales of securities.
If the net asset value of shares of the fund should, by reason of a
distribution of realized capital gains, be reduced below a shareholder's cost,
such distribution would to that extent be a return of capital to that
shareholder even though taxable to the shareholder, and a sale of shares by a
shareholder at net asset value at that time would establish a capital loss for
federal tax purposes.
Sales of forward currency contracts which are intended to hedge against a
change in the value of securities or currencies held by the fund may affect the
holding period of such securities or currencies and, consequently, the nature
of the gain or loss on such securities or currencies upon disposition.
It is anticipated that any net gain realized from the closing out of forward
currency contracts will be considered gain from the sale of securities or
currencies and therefore be qualifying income for purposes of the 90% of gross
income from qualified sources requirement, as discussed above. In order to
avoid realizing excessive gains on securities or currencies held less than
three months, the fund may be required to defer the closing out of a forward
currency contract beyond the time when it would otherwise be advantageous to do
so. It is anticipated that unrealized gains on forward currency contracts,
which have been open for less than three months as of the end of the fund's
fiscal year and which are recognized for tax purposes, will not be considered
gains on securities or currencies held less than three months for purposes of
the 30% test, as discussed above.
The amount of any realized gain or loss on closing out a forward currency
contracts such as a forward commitment for the purchase or sale of foreign
currency will generally result in ordinary income or loss for tax purposes.
Under Code Section 1256, forward currency contracts held by the fund at the end
of each fiscal year will be required to be "marked to market" for federal
income tax purposes, that is, deemed to have been sold at market value. Code
Section 988 may also apply to forward currency contracts. Under Section 988,
each foreign currency gain or loss is generally computed separately and treated
as ordinary income or loss. In the case of overlap between Sections 1256 and
988, special provisions determine the character and timing of any income, gain
or loss. The fund will attempt to monitor Section 988 transactions to avoid an
adverse tax impact.
The fund will distribute to shareholders annually any net long-term capital
gains which have been recognized for federal income tax purposes (including
unrealized gains at the end of the fund's fiscal year on forward currency
contract transactions). Such distributions will be combined with distributions
of capital gains realized on the fund's other investments.
If a shareholder exchanges or otherwise disposes of shares of the fund within
90 days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund, the sales charge previously
incurred acquiring the fund's shares shall not be taken into account (to the
extent such previous sales charges do not exceed the reduction in sales
charges) for the purpose of determining the amount of gain or loss on the
exchange, but will be treated as having been incurred in the acquisition of
such other shares. Also, any loss realized on a redemption or exchange of
shares of a fund will be disallowed to the extent shares are reacquired within
the 61-day period beginning 30 days before and ending 30 days after the shares
are disposed of.
Under the Code, the fund's taxable income for each year will be computed
without regard to any net foreign currency loss and net capital loss
attributable to transactions after October 31, and any such net foreign
currency loss and net capital loss will be treated as arising on the first day
of the following taxable year.
Dividends generally are taxable to shareholders at the time they are paid.
However, dividends declared in October, November and December and made payable
to shareholders of record in such a month are treated as paid and are thereby
taxable as of December 31, provided that the fund pays the dividend no later
than the end of January of the following year.
The fund may be required to pay withholding and other taxes imposed by foreign
countries generally at rates from 10% to 40% which would reduce the fund's
investment income. If more than 50% in value of the fund's total assets at the
close of its taxable year consists of securities of foreign issuers, the fund
will be eligible to file elections with the Internal Revenue Service pursuant
to which shareholders of the fund will be required to include their respective
pro rata portions of such withholding taxes in their federal income tax returns
as gross income, treat such amounts as foreign taxes paid by them, and deduct
such amounts in computing their taxable incomes or, alternatively, use them as
foreign tax credits against their federal income taxes. In any year the fund
makes such an election, shareholders will be notified as to the amount of
foreign withholding and other taxes paid by the fund.
As of the date of this statement of additional information, the maximum
federal individual stated tax rate applicable to ordinary income is 39.6%
(effective tax rates may be higher for some individuals due to phase out of
exemptions and elimination of deductions); the maximum individual tax rate
applicable to net capital gain is 28%; and the maximum corporate tax applicable
to ordinary income and net capital gain is 35%. Naturally, the amount of tax
payable by an individual will be affected by a combination of tax law rules
covering, E.G., deductions, credits, deferrals, exemptions, sources of income
and other matters. Under the Code, an individual is entitled to establish an
IRA each year (prior to the tax return filing deadline for that year) whereby
earnings on investments are tax-deferred. In addition, in some cases, the IRA
contribution itself may be deductible.
The foregoing is limited to a summary discussion of federal taxation and
should not be viewed as a comprehensive discussion of all provisions of the
Code relevant to investors. Dividends and capital gain distributions may also
be subject to state or local taxes. Shareholders should consult their own tax
advisers for additional details as to their particular tax status.
PURCHASE OF SHARES
PRICE OF SHARES - Purchases of shares are made at the offering price next
determined after the purchase order is received. This offering price is
effective for orders received by the fund or American Funds Service Company;
this offering price is effective for orders received prior to the time of
determination of the net asset value and, in the case of orders placed with
dealers, accepted by the Principal Underwriter prior to its close of business.
The dealer is responsible for promptly transmitting purchase orders to the
Principal Underwriter. Orders received by the investment dealer, the Transfer
Agent, or the fund after the time of the determination of the net asset value
will be entered at the next calculated offering price. Prices which appear in
the newspaper are not always indicative of prices at which you will be
purchasing and redeeming shares of the fund, since prices generally reflect the
previous day's closing price whereas purchases and redemptions are made at the
next calculated price.
The price you pay for shares, the offering price, is based on the net asset
value per share which is calculated once daily at the close of trading
(currently 4:00 p.m., New York Time) each day the New York Stock Exchange is
open. The New York Stock Exchange is currently closed on weekends and on the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The net
asset value per share is determined as follows:
1. Portfolio securities, including ADR's and EDR's, which are traded on stock
exchanges, are valued at the last sale price on the exchange 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 determined by the officers of the fund to
be the primary market. Equity securities traded in the over-the-counter market
are valued at the last reported sale price prior to the time of valuation or,
lacking any sales, at the last reported bid price. Securities and assets for
which market quotations are not readily available (including restricted
securities which are subject to limitations as to their sale) are valued at
fair value as determined in good faith by or under the direction of the Board
of Trustees. U.S. Treasury bills, and other short-term obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, with
original or remaining maturities in excess of 60 days are valued at the mean of
representative quoted bid and asked prices for such securities or, if such
prices are not available, are valued at the mean of representative quoted bid
and asked prices for securities of comparable maturity, quality and type.
Short-term securities with 60 days or less to maturity are amortized to
maturity based on their cost if acquired within 60 days of maturity or, if
already held on the 60th day, based on the value determined on the 61st day.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed well before the close of
business day in New York. In addition, European or Far Eastern securities
trading may not take place on all business days in New York. Furthermore,
trading takes place in Japanese markets on certain Saturdays and in various
foreign markets on days which are not business days in New York and on which
the fund's net asset value is not calculated. The calculation of net asset
value may not take place contemporaneously with the determination of the prices
of portfolio securities used in such calculation. Events affecting the values
of portfolio securities that occur between the time their prices are determined
and the close of the New York Stock Exchange will not be reflected in the
fund's calculation of net asset value unless the Board of Trustees deems that
the particular event would materially affect net asset value, in which case an
adjustment will be made. Assets or liabilities initially expressed in terms of
foreign 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. The fair value of all other assets is added to the value of securities
to arrive at the total assets;
2. There are deducted from the total assets, thus determined, the liabilities,
including accruals of taxes and other expense items; and
3. The net assets so obtained are then divided by the total number of shares
outstanding (excluding treasury shares), 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 fund will not knowingly sell shares (other than for the reinvestment
of dividends or capital gain distributions) directly or indirectly or through a
unit investment trust to any other investment company, person or entity, where,
after the sale, such investment company, person, or entity would own
beneficially, directly, indirectly, or through a unit investment trust more
than 4.5% of the outstanding shares of the fund without the consent of a
majority of the Board of Trustees.
STATEMENT OF INTENTION - The reduced sales charges and offering prices set
forth in the Prospectus apply to purchases of $50,000 or more made within a
13-month period pursuant to the terms of a written statement of intention (the
"Statement") in the form provided by the Principal Underwriter and signed by
the purchaser. The Statement is not a binding obligation to purchase the
indicated amount. When a shareholder signs 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 these escrowed shares 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 within 20 days after written request by
the Principal Underwriter or the securities dealer, 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 and there will be no retroactive
reduction of the sales charges paid on prior purchases.
In the case of purchase orders by the trustees of certain retirement plans by
payroll deduction, the sales charge for the investments made during the
13-month period will be handled as follows: The investment made the first
month of the 13-month period will be multiplied by 13 and then multiplied by
1.5. 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 previously made during the 13-month period.
DEALER COMMISSIONS - The following commissions will be paid to dealers who
initiate and are responsible for purchases of $1 million or more and for
purchases made at net asset value by certain retirement plans of organizations
with collective retirement plan assets of $100 million or more: 1.00% on
amounts of $1 million to $2 million, 0.80% on amounts over $2 million to $3
million, 0.50% on amounts over $3 million to $50 million, 0.25% on amounts over
$50 million to $100 million, and 0.15% on amounts over $100 million. The level
of dealer commission will be determined based on sales made over a 12-month
period commencing from the date of the first sale at net asset value. See "The
American Funds Shareholder Guide" in the fund's Prospectus for more
information.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - The automatic investment plan enables shareholders
to make regular monthly or quarterly investments in shares through automatic
charges to their bank accounts. With shareholder authorization and bank
approval, the Transfer Agent will automatically charge the bank account for the
amount specified ($50 minimum), which will be automatically invested in shares
at the offering price on or about the 10th day of the month (or on or about the
15th day of the month in the case of accounts for retirement plans where
Capital Guardian Trust Company serves as custodian or trustee). Bank accounts
will be charged on the day or a few days before investments are credited,
depending on the bank's capabilities, and shareholders will receive a
confirmation statement showing the current transaction. Participation in the
plan will begin within 30 days after receipt of the account application. If
the shareholder's bank account cannot be charged due to insufficient funds, a
stop-payment order or the closing of your account, the plan may be terminated
and the related investment reversed. The shareholder may change the amount of
the investment or discontinue the plan at any time by writing to the Transfer
Agent.
AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - A shareholder in one fund
may elect to cross-reinvest dividends or dividends and capital gain
distributions paid by that fund (the paying fund) into any other fund in The
American Funds Group (the "receiving fund") subject to the following
conditions: (i) the aggregate value of the shareholder's account(s) in the
paying fund(s) must equal or exceed $5,000 (this condition is waived if the
value of the account in the receiving fund equals or exceeds that fund's
minimum initial investment requirement), (ii) as long as the value of the
account in the receiving fund is below that fund's minimum initial investment
requirement, dividends and capital gain distributions paid by the receiving
fund must be automatically reinvested in the receiving fund, and (iii) if this
privilege is discontinued with respect to a particular receiving fund, the
value of the account in that fund must equal or exceed the fund's minimum
initial investment requirement or the fund shall have the right, if the
shareholder fails to increase the value of the account to such minimum within
90 days after being notified of the deficiency, automatically to redeem the
account and send the proceeds to the shareholder. These cross-reinvestments of
dividends and capital gain distributions will be at net asset value (without
sales charge).
REDEMPTION OF SHARES
The fund's Declaration of Trust 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 Investment Company Act of 1940, and subject to such further
terms and conditions as the Board of Trustees of the fund may from time to time
adopt.
EXECUTION OF PORTFOLIO TRANSACTIONS
There are occasions on which portfolio transactions for the fund may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the fund, they are effected only when the
Investment Adviser believes that to do so is in the interest of the fund. When
such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner. The fund will not pay a mark-up for
research in principal transactions.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, for the fiscal years ended March 31, 1995, 1994,
and 1993, amounted to $7,563,000, $8,642,000, and $3,438,000 , respectively.
GENERAL INFORMATION
CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by The Chase Manhattan Bank, N.A., One Chase Manhattan Plaza, New
York, NY 10081, as Custodian. Non-U.S. securities may be held by the
Custodian pursuant to sub-custodial arrangements in non-U.S. banks or foreign
branches of U.S. banks.
INDEPENDENT ACCOUNTANTS - Price Waterhouse LLP, 400 South Hope Street, Los
Angeles, CA 90071, has served as the fund's independent accountants since its
inception, providing audit services, preparation of tax returns and review of
certain documents to be filed with the Securities and Exchange Commission. The
financial statements, included in this Statement of Additional Information from
the Annual Report, have been so included in reliance on the report of Price
Waterhouse LLP given on the authority of said firm as experts in accounting and
auditing.
REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on March 31.
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,
Price Waterhouse, whose selection is determined annually by the Trustees.
PERSONAL INVESTING POLICY - Capital Research and Management Company and its
affiliated companies have adopted a personal investing policy consistent with
Investment Company Institute guidelines. This policy includes: a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; pre-clearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the fund; blackout periods on personal investing for certain investment
personnel; ban on short-term trading profits for investment personnel;
limitations on service as a director of publicly traded companies; and
disclosure of personal securities transactions.
The financial statements including the investment portfolio and the report of
Independent Accountants contained in the Annual Report are included in this
statement of additional information. The following information is not included
in the Annual Report:
DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND
MAXIMUM OFFERING PRICE PER SHARE -- MARCH 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Net asset value and redemption price per share
(Net assets divided by shares outstanding) $20.89
Maximum offering price per share (100/94.25 of
net asset value per share, which takes into
account the fund's current maximum sales load) $22.16
</TABLE>
SHAREHOLDER AND TRUSTEE RESPONSIBILITY - Under the laws of certain states,
including Massachusetts where the fund was organized and California where the
fund's principal office is located, shareholders of a Massachusetts business
trust may, under certain circumstances, be held personally liable as partners
for the obligations of the fund. However, the risk of a shareholder's
incurring any financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its obligations.
The Declaration of Trust contains an express disclaimer of shareholder
liability for acts, ommissions, obligations or affairs of the fund and provides
that notice of the disclaimer may be given in each agreement, obligation, or
instrument which is entered into or executed by the fund or Trustees. The
Declaration of Trust provides for indemnification out of fund property of any
shareholder held personally liable for the obligations of the fund and also
provides for the fund to reimburse such shareholder for all legal and other
expenses reasonably incurred in connection with any such claim or liability.
Under the Declaration of Trust, the Trustees, officers, employees or agents of
the fund are not liable for actions or failure to act; however, they are not
protected from liability by reason of their willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct
of their office.
SHAREHOLDER VOTING RIGHTS - All shares of the fund have equal voting rights and
may be voted in the elections of Trustees and on other matters submitted to the
vote of shareholders. As permitted by Massachusetts law, there will normally
be no meetings of shareholders for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees holding office have
been elected by shareholders. At that time, the Trustees then in office will
call a shareholders meeting for the election of Trustees. The Trustees must
call a meeting of shareholders for the purpose of voting upon the question of
removal of any trustee when requested to do so by the record holders of at
least 10% of the outstanding shares. At such meeting, a trustee may be removed
after the holders of record of not less than two-thirds of the outstanding
shares have declared that the trustee be removed either by declaration in
writing or by votes cast in person or by proxy. Except as set forth above, the
Trustees shall continue to hold office and may appoint successor Trustees. The
shares do not have cumulative voting rights, which means that the holders of a
majority of the shares voting for the election of Trustees can elect all the
Trustees. No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the fund except
that amendments may be made upon the sole approval of the Trustees to conform
the Declaration of Trust to the requirements of applicable Federal laws or
regulations or the requirements of the regulated investment company provisions
of the Code, however, the Trustees shall not be held liable for failing to do
so. If not terminated by the vote or written consent of a majority of the
outstanding shares, the fund will continue indefinitely.
INVESTMENT RESULTS
The fund's yield is 2.24% based on a 30-day (or one month) period ended March
31, 1995, computed by dividing the net investment income per share earned
during the period by the maximum offering price per share on the last day of
the period, according to the following formula:
YIELD = 2[( a-b/cd + 1)/6/ -1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
The fund's average annual total return for the one year, five year and
lifetime periods as of March 31, 1995 were -5.09% +9.48% and +16.35% ,
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.
The following assumptions will be reflected in computations made in accordance
with the formula stated above: (1) deduction of the maximum sales load of
5.75% from the $1,000 initial investment; (2) reinvestment of dividends and
distributions at net asset value on the reinvestment date determined by the
Board; and (3) a complete redemption at the end of any period illustrated. In
addition, the fund will provide lifetime average total return figures.
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 refer to results compiled by organizations such as CDA Investment
Technologies, Ibbotson Associates, Lipper Analytical Services, Morningstar,
Inc., Wiesenberger Investment Companies Services and the U.S. Department of
Commerce. Additionally, the fund may, from time to time, refer to results
published in various 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.
The fund may from time to time illustrate the benefits of tax-deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans.
The fund may also, from time to time, refer to statistics compiled by the
U.S. Department of Commerce.
The investment results set forth below were calculated as described in the
fund's Prospectus. The fund's results will vary from time to time depending
upon market conditions, the composition of the fund's portfolio and operating
expenses of the fund, so that any investment results reported by the fund
should not be considered representative of what an investment in the fund may
earn in any future period. These factors and possible differences in
calculation methods should be considered when comparing the fund's investment
results with those published for other mutual funds, other investment vehicles
and unmanaged indices. The fund's results also should be considered relative
to the risks associated with the fund's investment objective and policies.
EXPERIENCE OF THE INVESTMENT ADVISER - Capital Research and Management Company
manages nine common stock funds that are at least 10 years old. In all of the
10-year periods during which these funds were managed by Capital Research and
Management Company since 1965 ( 115 in all), those funds have had better total
returns than the Standard and Poor's 500 Composite Stock Index in 94 of the
115 periods.
Note that past results are not an indication of future investment results.
Also, the fund has different investment policies than the funds mentioned
above. These results are included solely for the purpose of informing
investors about the experience and history of Capital Research and Management
Company.
The investment results set forth below were calculated as described in the
fund's Prospectus.
EUPAC vs. Various Unmanaged Indices
<TABLE>
<CAPTION>
Period EUPAC S&P 500/1/ MSCI
4/1 - 3/31 EAFE/2/
<S> <C> <C> <C>
1985 - 1995
354.8% 283.9% 382.3%
1984* - 1995
380.1 358.8 399.1
</TABLE>
/1/ The Standard and Poor's 500 Stock Index is comprised of industrial,
transportation, public utilities and financial stocks and represents a large
portion of the value of issues traded on the New York Stock Exchange. Selected
issues traded on the American Stock Exchange are also included.
/2/ The Morgan Stanley Capital International Europe, Australasia and Far East
Index (MSCI EAFE) is an arithmetical average, weighted by market value, of the
more than 1,000 securities listed on the stock exchanges of Europe, Australia,
New Zealand and the Far East.
* From inception on April 16, 1984.
___________________________________
The Benefits of Systematic Investing . . .
Here's how much you would have if you had invested $2,000 a year in the fund:
<TABLE>
<CAPTION>
1 Year 4 Years 7 Years Lifetime
(4/1/94 - 3/31/95) (4/1/91 - 3/31/95) (4/1/88 - 3/31/95) (4/16/84 - 3/31/95)
<S> <C> <C> <C>
$1,898 $9,761 $20,809 $49,959
</TABLE>
___________________________________
See the difference time can make in an investment program...
<TABLE>
<CAPTION>
If you had invested Periods ...and taken all distributions
$10,000 in EUPAC 4/1 - 3/31 in shares, your investment
this many years ago... would have been worth this
Number of Years much at March 31, 1995
Value
<S> <C> <C>
1 1994 - 1995 $ 9,491
2 1993 - 1995 $ 11,986
3 1992 - 1995 12,907
4 1991 - 1995 14,419
5 1990 - 1995 15,729
6 1989 - 1995 18,405
7 1988 - 1995 21,109
8 1987 - 1995 22,823
9 1986 - 1995 29,443
10 1985 - 1995 45,476
Life 1984* - 1995 48,007
</TABLE>
(* from inception on April 16, 1984)
___________________________________
Illustration of a $10,000 investment in EUPAC with dividends reinvested
(For the lifetime of the fund April 16, 1984 through March 31, 1995)
<TABLE>
<CAPTION>
COST OF SHARES VALUE OF SHARES
Fiscal Annual Dividends Total From From Total
Year End Dividends (cumulative) Investment Initial Dividends Value
March 31 Cost Investment Reinvested
<S> <C> <C> <C> <C> <C> <C>
1985* $ 69 $ 69 $10,069 $ 9,876 $72 $9,948
1986 35 104 10,104 15,206 162 15,368
1987 118 222 10,222 18,489 332 19,827
1988 491 713 10,713 17,370 854 21,437
1989 316 1,029 11,029 18,379 1,238 24,586
1990 527 1,556 11,556 19,760 1,874 28,762
1991 656 2,212 12,212 20,845 2,653 31,381
1992 611 2,823 12,823 22,857 3,555 35,057
1993 538 3,361 13,361 24,238 4,349 37,754
1994 515 3,876 13,876 30,151 5,962 47,670
1995 716 4,592 14,592 28,695 6,384 48,007
</TABLE>
The dollar amount of capital gain distributions during the period was $8,596
(* from inception on April 16, 1984)
DESCRIPTION OF BOND RATINGS
Corporate Debt Securities
MOODY'S INVESTORS SERVICE, INC. rates the long-term debt securities issued by
various entities in categories ranging from "Aaa" to "C" according to quality.
"AAA -- Best quality. These securities carry the smallest degree of investment
risk and are generally referred to as 'gilt edge.' Interest payments are
protected by a large or by an exceptionally stable margin, and principal is
secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues."
"AA -- High quality by all standards. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude, or there may be
other elements present which make the long-term risks appear somewhat greater."
"A -- Upper medium grade obligations. These bonds possess many favorable
investment attributes. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future."
"BAA -- Medium grade obligations. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and , in fact, have
speculative characteristics as well."
"BA -- Have speculative elements; future cannot be considered as well assured.
The protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Bonds in this class are characterized by uncertainty of position."
"B -- Generally lack characteristics of the desirable investment; assurance of
interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small."
"CAA -- Of poor standing. Issues may be in default or there may be present
elements of danger with respect to principal or interest."
"CA -- Speculative in a high degree; often in default or have other marked
shortcomings."
"C -- Lowest rated class of bonds; can be regarded as having extremely poor
prospects of ever attaining any real investment standing."
STANDARD & POOR'S CORPORATION rates the long-term securities debt of various
entities in categories ranging from "AAA" to "D" according to quality.
"AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong."
"AA -- High grade. Very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree."
"A - Have a strong capacity to pay interest and repay principal, although they
are somewhat more susceptible to the adverse effects of change in circumstances
and economic conditions, than debt in higher rated categories."
"BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal than for debt in
higher rated categories."
"BB, B, CCC, CC, C -- Regarded, on balance, as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with the
terms of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions."
"C-1 -- Reserved for income bonds on which no interest is being paid."
"D -- In default and payment of interest and/or repayment of principal is in
arrears."
EUROPACIFIC GROWTH FUND
March 31, 1995
<TABLE>
<CAPTION>
PERCENT OF
<S> <C>
INDUSTRY DIVERSIFICATION NET ASSETS
Telecommunications 8.36%
Banking 7.61
Insurance 5.15
Broadcasting & Publishing 4.78
Automobiles 4.23
Other Industries 47.75
Bonds, Cash & Equivalents 22.12
LARGEST INDIVIDUAL HOLDINGS
ASEA/BBC Brown Boveri 1.72
Astra 1.61
Internationale Nederlanden Groep 1.43
News Corp. 1.40
Australia and New Zealand Banking Group 1.37
Nestle 1.18
Bayerische Motoren Werke 1.17
Telecom Corp. of New Zealand 1.16
Mannesmann 1.01
Telefonos de Mexico 1.00
</TABLE>
___________________
EuroPacific Growth Fund
Investment Portfolio March 31, 1995
<TABLE>
<CAPTION>
Shares or Market Percent
Principal Value of Net
Amount (Millions) Assets
<S> <C> <C> <C>
Equity-Type Securities (common and preferred stocks and
convertible debentures)
Telecommunications- 8.36%
Telecom Corp. of New Zealand Ltd. (New Zealand) 19,091,200 $72.167
Telecom Corp. of New Zealand Ltd./1/ 6,740,000 25.478
Telecom Corp. of New Zealand Ltd. (American Depositary
Receipts) 31,800 1.900 1.16
Telefonos de Mexico, SA de CV, Class L (Mexico) 9,612,500 13.611
Telefonos de Mexico, SA de CV, Class L (American Depositary
Receipts) 2,550,000 72.675 1.00
Telecom Italia SpA (Italy) 27,940,000 65.286
Telecom Italia SpA, savings shares 4,320,000 7.995 .85
Tele Danmark AS, Class B (Denmark) 1,000,000 52.762
Tele Danmark AS, Class B (American Depositary Receipts) 550,000 14.575 .78
Telecomunicacoes Brasileiras SA, preferred nominative (Brazil)/2/ 2,119,036,288 57.105 .66
Philippine Long Distance Telephone Co. (American Depositary
Receipts)(Philippines) 426,250 25.788
Philippine Long Distance Telephone Co., convertible preferred
shares, Series II (Global Depositary Receipts)/1/ 220,000 7.370
Philippine Long Distance Telephone Co., convertible preferred
shares, Series III (Global Depositary Receipts) 400,000 22.550 .65
Koninklijke PTT Nederland NV (Netherlands) 1,571,900 55.579 .65
Nippon Telegraph and Telephone Corp. (Japan) 4,750 40.910 .48
Vodafone Group PLC (United Kingdom) 1,148,700 3.699
Vodafone Group PLC (American Depositary Receipts) 1,005,000 33.291 .43
Cable and Wireless PLC (United Kingdom) 5,735,740 36.123 .42
BCE Inc. (Canada) 675,000 20.885 .24
Rogers Cantel Mobile Communications Inc., Class B (Canada)/2/ 565,000 14.266 .17
BCE Mobile Communications, Inc. (Canada)/2/ 399,500 13.219 .15
Pakistan Telecommunication Corp. (Global Depositary
Receipts)(Pakistan)/1/,/2/ 119,300 10.737 .13
STET-Societa Finanziaria Telefonica p.a. (Italy) 1,835,000 4.709
STET-Societa Finanziaria Telefonica p.a., nonconvertible savings
shares 2,750,000 5.560 .12
Telecom Argentina STET-France Telecom SA, Class B (Argentina) 890,000 3.872
Telecom Argentina STET-France Telecom SA, Class B (American
Depositary Receipts) 140,000 6.055 .12
Perusahaan Perseroan(Persero)PT Indonesian Satellite Corp.
(American Depositary Receipts)(Indonesia) 277,500 9.782 .11
Telefonica de Argentina SA, Class B (Argentina) 1,120,000 2.744
Telefonica de Argentina SA, Class B (American Depositary
Receipts) 153,200 3.696 .07
Telefonica de Espana, SA (American Depositary Receipts) (Spain) 153,000 5.738 .07
Thai Telephone & Telecommunication Co., Ltd. (Global Depositary
Receipts) (Thailand)/1/,/2/ 254,000 5.493 .06
Hong Kong Telecommunications Ltd. (Hong Kong) 1,600,000 3.115 .04
Banking- 7.61%
Australia and New Zealand Banking Group Ltd. (Australia) 33,279,915 117.416 1.37
Svenska Handelsbanken Group, Class A (Sweden) 6,238,000 73.296 .85
ABN AMRO Holding NV (Netherlands) 1,905,402 69.839 .81
Bangkok Bank Ltd. (Thailand) 5,850,900 51.818
Bangkok Bank Ltd., 3.25% convertible debentures 2004 $14,600,000 12.155 .74
Westpac Banking Corp. (Australia) 17,409,130 62.443 .73
National Australia Bank Ltd. (Australia) 5,465,549 46.183 .54
Banco Popular Espanol, SA (Spain) 269,000 34.764 .40
Bank of Montreal (Canada) 1,790,000 34.256 .40
Canadian Imperial Bank of Commerce (Canada) 1,150,000 27.767 .32
Credit Local de France (France) 246,000 20.564 .24
Thai Farmers Bank Public Co. Ltd. (Thailand) 1,816,800 15.352 .18
CS Holding Group (Switzerland) 25,000 10.212
CS Holding Group, registered shares 60,000 4.910 .18
Swiss Bank Corp. (Switzerland) 34,251 11.271 .13
Kansallis-Osake-Pankki (Finland)/2/ 11,350,000 10.752 .13
Banco de Santander, SA (American Depositary Receipts) (Spain) 300,000 10.650 .12
Bayerische Vereinsbank AG (Germany) 35,000 9.924 .12
Deutsche Bank AG (Germany) 14,484 6.822 .08
Philippine National Bank (Philippines) 736,626 6.181 .07
Safra Republic Holdings SA (Luxembourg) 68,000 5.406 .06
P.T. Bank Internasional Indonesia (Indonesia) 2,430,000 5.377 .06
Grupo Financiero Banamex Accival, SA de CV, Class B (Mexico) 2,100,000 2.478 .03
Banco Frances del Rio de la Plata SA (American Depositary
Receipts) (Argentina) 127,400 2.309 .03
Shinhan Bank (South Korea) 73,250 1.470 .02
Multi-Industry- 5.96%
Nokia Corp. (Finland) 508,600 74.621
Nokia Corp., preferred shares 20,000 2.911 .90
Jardine Strategic Holdings Ltd. (Incorporated in Bermuda)/2/ 11,000,000 41.800
Jardine Strategic Holdings Ltd. (American Depositary Receipts) 300,000 2.213
Jardine Strategic Holdings Ltd., 7.50% convertible
debentures 2049 $11,631,000 13.696 .67
Hutchison Whampoa Ltd. (Hong Kong) 11,500,000 50.723 .59
Lend Lease Corp. Ltd. (Australia) 4,060,426 49.500 .58
Brierley Investments Ltd. (New Zealand) 59,785,697 43.401
Brierley Investments Ltd., convertible preferred shares 3,866,500 2.503 .53
Industriforvaltning AB Kinnevik, Class A (Sweden) 302,260 9.103
Industriforvaltning AB Kinnevik, Class B 303,440 9.221
Industriforvaltning AB Kinnevik, Series 3, 10.50% convertible
debentures 1997 /2/ SKR66,000,000 17.560 .42
Hanson PLC (United Kingdom) 5,063,694 19.102
Hanson PLC (American Depositary Receipts) 700,000 13.213 .38
Groupe Bruxelles Lambert SA (Belgium) 218,000 26.701
Groupe Bruxelles Lambert SA, warrants, expire 1998 /2/ 126,900 1.048 .32
Pearson PLC (United Kingdom) 2,894,000 26.209 .31
Swire Pacific Ltd., Class A (Hong Kong) 3,690,000 25.177 .29
Preussag AG (Germany) 78,500 22.059 .26
Incentive AB, Class A (Sweden) 169,900 6.195
Incentive AB, Class B 350,000 12.668 .22
Orkla AS, Class A (Norway) 394,000 14.480 .17
Ayala Corp., Class B (Philippines) 9,360,000 11.655 .14
B A T Industries PLC (United Kingdom) 1,444,984 10.410 .12
Investor AB, Class B, 8.00% convertible debentures 2001
(Sweden) SKR28,000,000 4.840 .06
Insurance- 5.15%
Internationale Nederlanden Groep NV (Netherlands) 2,040,003 100.534
Internationale Nederlanden Groep NV, warrants, expire 2001 /2/ 11,600,000 22.536 1.43
Munchener Ruckversicherungs-Gesellschaft (Germany) 3,000 4.873
Munchener Ruckversicherungs-Gesellschaft, registered shares 36,856 66.683
Munchener Ruckversicherungs-Gesellschaft, registered shares,
warrants, expire 1998 /2/ 5,053 .520 .84
Istituto Nazionale delle Assicurazioni SpA (Italy) 32,741,000 38.724 .45
GIO Australia Holdings Ltd. (Australia) 14,828,589 27.736 .32
Yasuda Fire & Marine Insurance Co., Ltd. (Japan) 3,930,000 25.340 .30
Corporacion Mapfre, CIR, SA (Spain) 603,223 24.041
Mapfre Vida, SA de Seguros y Reaseguros (Spain) 33,490 1.420 .30
Irish Life PLC (Ireland) 7,044,910 21.729 .25
Colonia Konzern AG (Germany) 28,488 19.787
Colonia Konzern AG, preferred shares 1,553 .726 .24
United Friendly Group PLC, Class B (United Kingdom) 2,140,000 20.095 .23
Refuge Group PLC (United Kingdom) 3,200,000 16.475 .19
Baloise Holding (Switzerland) 7,200 14.324
Baloise Holding, warrants, expire 8/30/95 /2/ 7,200 .030 .17
Chiyoda Fire & Marine Insurance Co., Ltd. (Japan) 1,350,000 8.161 .10
Union Des Assurances de Paris (France) 305,800 7.662 .09
Nippon Fire and Marine Insurance Co., Ltd. (Japan) 1,000,000 7.127 .08
Sampo Insurance Co. Ltd., Class A (Finland) 173,500 6.975 .08
Nichido Fire and Marine Insurance Co., Ltd. (Japan) 400,000 3.229 .04
Dowa Fire and Marine Insurance Co., Ltd. (Japan) 600,000 3.178 .04
Broadcasting & Publishing- 4.78%
News Corp. Ltd. (Australia) 7,906,456 37.870
News Corp. Ltd., preferred shares 3,953,228 17.166
News Corp. Ltd. (American Depositary Receipts) 2,363,200 45.196
News Corp. Ltd., preferred shares (American Depositary Receipts) 1,181,600 20.383 1.40
Rogers Communications Inc., Class B (Canada)/2/ 4,855,000 63.388 .74
CANAL+ (France) 322,980 39.259 .46
Carlton Communications PLC (United Kingdom) 2,601,500 38.622 .45
Elsevier NV (Netherlands) 3,600,000 37.767 .44
Reed International PLC (United Kingdom) 505,634 6.334 .07
Television Broadcasts Ltd. (Hong Kong) 7,317,000 24.986 .29
News International PLC special dividend shares (United Kingdom) 4,491,200 20.868 .24
Wolters Kluwer NV (Netherlands) 253,846 19.513 .23
Verenigd Bezit VNU NV (Netherlands) 167,000 17.920 .21
Independent Newspapers, PLC (Ireland) 2,529,450 10.251 .12
Telegraaf Holdings NV (Netherlands) 65,000 7.450 .09
TF1 SA (France) 42,000 3.764 .04
Automobiles- 4.23%
Bayerische Motoren Werke AG (Germany) 169,481 84.556
Bayerische Motoren Werke AG, preferred shares 43,636 15.980 1.17
Daimler-Benz AG (Germany) 125,381 56.599 .66
Toyota Motor Corp. (Japan) 2,600,000 52.988 .62
Suzuki Motor Corp. (Japan) 4,350,000 46.530 .54
Volvo AB, Class B (Sweden) 2,350,000 40.466 .47
Renault V.I. SA (France) 950,900 33.117 .39
Peugeot SA (France)/2/ 200,000 28.044 .33
Volkswagen AG, preferred shares (Germany) 19,800 3.927 .05
Health & Personal Care- 4.15%
AB Astra, Class A (Sweden) 4,240,000 112.237
AB Astra, Class B 1,000,000 25.863 1.61
Sandoz Ltd. (Switzerland) 104,000 66.978 .78
Wella AG, preferred shares (Germany) 78,237 53.898 .63
Glaxo Holdings PLC (United Kingdom) 2,185,000 24.975
Glaxo Holdings PLC (American Depositary Receipts) 450,000 10.294 .41
Elan Corp., PLC (American Depositary Receipts) (Ireland)/2/ 765,000 28.496 .33
Teva Pharmaceutical Industries Ltd. (American Depositary
Receipts) (Israel) 800,000 24.100 .28
Sankyo Co., Ltd. (Japan) 397,100 9.145 .11
Business & Public Services- 3.07%
Eurotunnel SA, units, comprised of one share of
Eurotunnel SA ordinary and one share of
Eurotunnel PLC ordinary (France)/2/ 21,281,206 84.533
Eurotunnel SA, unit warrants, expire 10/31/95 /2/ 1,448,757 .072
Eurotunnel PLC, founder warrants, expire 6/30/95
(United Kingdom)/2/ 12,600 .194 .99
Welsh Water PLC (United Kingdom) 3,220,000 31.696 .37
Havas SA (France) 412,775 31.037 .36
Thames Water PLC (United Kingdom) 3,773,225 29.200 .34
Reuters Holdings PLC (United Kingdom) 2,866,700 22.022 .26
North West Water Group PLC (United Kingdom) 2,270,000 20.323 .24
Autopistas, Concesionaria Espanola, SA (Spain) 1,800,000 14.468 .17
Secom Co., Ltd. (Japan) 220,000 13.552 .15
Waste Management International PLC (American Depositary
Receipts) (United Kingdom)/2/ 1,505,000 12.416 .14
Quebecor Printing Co.(Canada) 366,200 4.421 .05
Electrical & Electronic- 2.79%
ASEA AB, Class A (Sweden) 400,000 31.279
ASEA AB, Class B 504,300 39.299
ASEA AB (American Depositary Receipts) 240,000 18.570 1.04
BBC Brown Boveri Ltd., Class A (Switzerland) 61,339 58.227
BBC Brown Boveri Ltd., Class B 3,115 .574 .68
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 748,450 46.347
Telefonaktiebolaget LM Ericsson, Class B (American
Depositary Receipts) 150,000 9.263 .65
Johnson Electric Holdings Ltd. (Hong Kong- Incorporated in
Bermuda) 6,916,800 16.283 .19
Makita Corp. (Japan) 757,000 11.157 .13
Hitachi, Ltd. (Japan) 810,000 8.394 .10
Utilities: Electric & Gas- 2.64%
Hongkong Electric Holdings Ltd. (Hong Kong) 8,869,500 28.394
Consolidated Electric Power Asia Ltd. (Hong Kong- Incorporated .33
in Bermuda) 10,290,112 21.296
Consolidated Electric Power Asia Ltd. (American Depositary
Receipts)/1/ 231,000 4.781 .30
China Light & Power Co. Ltd. (Hong Kong) 5,000,000 24.252 .28
Korea Electric Power Corp. (South Korea) 669,370 24.082 .28
Hong Kong and China Gas Co. Ltd. (Hong Kong) 10,598,400 18.918
Hong Kong and China Gas Co. Ltd., warrants, expire 12/31/95 /2/ 110,000 .017 .22
National Power PLC (United Kingdom) 2,630,000 18.182 .21
Scottish Power PLC (United Kingdom) 3,000,000 15.536 .18
Eastern Group PLC (United Kingdom) 1,629,000 14.901 .17
Ceske Energeticke Zavody (Czech Republic)/2/ 245,000 10.039 .12
Centrais Eletricas Brasileiras SA, ordinary nominative
(Brazil) 49,100,000 9.678 .11
Edison SpA (Italy) 2,378,800 9.155 .11
CESP - Companhia Energetica de Sao Paulo, preferred nominative
(American Depositary Receipts)(Brazil)/1/,/2/ 99,084 1.115
CESP - Companhia Energetica de Sao Paulo, preferred nominative
(American Depositary Receipts)/2/ 708,000 7.965 .11
British Gas PLC (United Kingdom) 1,600,000 7.418 .09
Huaneng Power International Inc.(American Depositary
Receipts)(People's Republic of China) /2/ 371,000 5.890 .07
Manila Electric Co., Class B (Philippines) 399,192 4.053 .05
Tenaga Nasional Bhd. (Malaysia) 170,000 .699 .01
Machinery & Engineering- 2.57%
Mannesmann AG (Germany) 338,512 87.021 1.01
Bombardier Inc., Class B (Canada) 2,010,000 38.825 .45
GEA AG (Germany) 15,700 6.034
GEA AG, preferred shares 45,187 14.746 .24
VA Technologie AG (Austria) 191,600 19.344 .23
Atlas Copco AB, Class A (Sweden) 1,540,000 18.511 .22
Sandvik AB, Class B (Sweden) 900,000 14.221 .17
Sembawang Shipyard Ltd. (Singapore) 1,700,000 11.803 .14
Mitsubishi Heavy Industries, Ltd. (Japan) 1,340,000 9.612 .11
Food & Household Products- 2.02%
Nestle SA (Switzerland) 104,150 101.531 1.18
Reckitt & Colman PLC (United Kingdom) 5,229,100 52.235 .61
Indofood Sukses (Indonesia) 5,016,000 17.266 .20
Universal Robina (Philippines)/2/ 5,000,000 2.826 .03
Energy Sources- 1.97%
Royal Dutch Petroleum Co. (Netherlands) 400,000 47.869
Royal Dutch Petroleum Co. (New York Registered Shares) 70,000 8.400 .65
'Shell' Transport and Trading Co., PLC (New York Registered
Shares)(United Kingdom) 55,000 3.898 .05
TOTAL, Class B (France) 263,870 15.698
TOTAL (American Depositary Receipts) 766,999 23.010 .45
YPF SA, Class D (American Depositary Receipts)(Argentina) 1,210,000 22.990 .27
NOVA Corp. of Alberta (Canada) 1,510,000 13.368 .16
Broken Hill Proprietary Co. Ltd. (Australia) 731,956 9.589 .11
Repsol SA (Spain) 250,000 7.072 .08
Societe Nationale Elf Aquitaine (American Depositary Receipts)
(France) 135,000 5.231 .06
Petron Corp.(Global Depositary Receipts)(Philippines)/1/ 123,600 4.079 .05
Showa Shell Sekiyu K.K. (Japan) 360,000 4.021 .05
Elf Gabon SA (Gabon) 18,825 3.749 .04
Industrial Components- 1.94%
Compagnie Generale des Etablissements Michelin, Class B
(France)/2/ 1,394,000 59.825
Compagnie Generale des Etablissements Michelin, convertible
preferred shares 56,266 3.017 .73
Morgan Crucible Co. PLC (United Kingdom) 3,276,400 16.868 .20
Valeo (France) 306,758 16.512 .19
Minebea Co., Ltd. (Japan) 2,548,000 16.136 .19
Continental AG (Germany) 87,500 12.627 .15
Bridgestone Corp. (Japan) 800,000 11.883 .14
Sumitomo Electric Industries, Ltd. (Japan) 710,000 9.156 .11
BICC PLC (United Kingdom) 1,500,000 8.160 .10
Magna International Inc., Class A (Canada) 150,600 5.742 .07
Orbital Engine Corp. Ltd. (Australia)/2/ 5,039,242 4.916
Orbital Engine Corp. Ltd. (American Depositary Receipts)/2/ 43,573 .343 .06
Recreation & Other Consumer Products- 1.85%
PolyGram NV (New York Registered Shares) (Netherlands) 1,274,700 69.949 .81
THORN EMI PLC (United Kingdom) 3,455,000 61.153 .71
Nintendo Co., Ltd. (Japan) 412,000 24.431 .28
Shimano Inc. (Japan) 228,000 4.358 .05
Merchandising- 1.67%
WHSmith Group PLC, Class A (United Kingdom) 4,800,000 31.920 .37
Ito-Yokado Co., Ltd. (Japan) 634,000 31.390 .37
Tesco PLC (United Kingdom) 6,740,000 29.026 .34
Cifra, SA de CV, Class A (Mexico) 9,395,000 11.778
Cifra, SA de CV, Class B 1,076,400 1.346
Cifra, SA de CV, Class C 3,945,000 4.795 .21
Amway Japan Ltd. (Japan) 120,000 3.800
Amway Japan Ltd. (American Depositary Receipts) 615,000 9.071 .15
H & M Hennes & Mauritz AB, Class B (Sweden) 175,000 10.541 .12
DELHAIZE 'LE LION' SA (Belgium) 150,000 6.046 .07
Senshukai Co., Ltd. (Japan) 187,000 3.703 .04
Chemicals- 1.66%
Ciba-Geigy Ltd. (Switzerland) 88,500 58.792 .68
Akzo NV (Netherlands) 250,000 27.279 .32
Sumitomo Chemical Co., Ltd. (Japan) 2,358,000 12.489 .15
L'Air Liquide (France) 73,822 12.097 .14
Bayer AG (Germany) 40,000 9.798 .11
DSM NV (Netherlands) 123,306 9.462 .11
BASF AG (Germany) 35,000 7.051 .08
Hoechst AG (Germany) 30,000 6.200 .07
Forest Products & Paper- 1.60%
Kymmene Corp. (Finland) 1,150,000 29.760 .35
Fletcher Challenge Ltd. (New Zealand) 5,900,000 13.968
Fletcher Challenge Forests Division (American Depositary
Receipts) 123,500 1.683 .18
Carter Holt Harvey Ltd. (New Zealand) 6,024,336 13.396 .16
P.T. Indah Kiat Pulp & Paper Corp. (Indonesia) 9,345,000 12.637 .15
Kimberly-Clark de Mexico, SA de CV, Class A (Mexico) 1,400,000 11.543 .13
Repola Ltd. (Finland) 690,000 11.463 .13
AssiDoman AB (Sweden) 520,000 11.131 .13
Stora Kopparbergs Bergslags AB, Class B (Sweden) 170,000 10.102 .12
Mayr-Melnhof Karton AG (Austria) 160,000 9.742 .11
Aracruz Celulose SA (American Depositary Receipts) (Brazil) 592,500 7.110 .08
Cartiere Burgo SpA (Italy)/2/ 730,000 5.008 .06
Beverages & Tobacco- 1.39%
Coca-Cola Amatil Ltd. (Australia) 8,008,347 48.755 .57
Heineken NV (Netherlands) 26,250 4.445
Heineken Holding NV, Class A 217,500 33.804 .45
Companhia Cervejaria Brahma, preferred nominative (Brazil) 55,317,000 13.245 .15
San Miguel Corp., Class B (Philippines) 2,440,000 10.938 .13
Lion Nathan Ltd. (New Zealand) 3,400,000 6.760 .08
Panamerican Beverages, Inc. (Mexico) 22,000 .575 .01
Appliances & Household Durables- 1.21%
Electrolux AB, Class B (Sweden) 850,000 38.400 .45
Sony Corp. (Japan) 474,000 23.741 .28
SANYO Electric Co., Ltd. (Japan) 2,590,000 14.911 .17
Philips Electronics NV (Netherlands) 350,000 11.877 .14
Sharp Corp. (Japan) 500,000 8.117 .09
Leifheit AG (Germany) 14,000 6.447 .08
Samsung Electronics Co., Ltd. (South Korea)/2/ 7 .001 .00
Samsung Electronics Co., Ltd. (Global Depositary Receipts)/1/ 187 .013
Samsung Electronics Co., Ltd., preferred shares
(Global Depositary Receipts)/1/ 600 .026
Transportation: Airlines- 1.20%
Singapore Airlines Ltd. (Singapore) 4,809,000 48.039 .56
British Airways PLC (United Kingdom) 1,056,000 6.969
British Airways PLC (American Depositary Receipts) 354,400 23.302 .35
Cathay Pacific Airways Ltd. (Hong Kong) 16,142,000 24.950 .29
Metals: Nonferrous- 1.16%
Alusuisse-Lonza Holding Ltd, Zurich (Switzerland) 45,650 24.728 .29
Pechiney, certificats d'investissement privilegies (France) 339,000 22.642 .26
Outokumpu Oy, Class A (Finland) 1,520,000 22.582 .26
Western Mining Corp. Holdings Ltd. (Australia) 2,323,892 11.693 .14
Teck Corp., Class B (Canada) 414,000 6.997 .08
Falconbridge Ltd. (Canada) 381,000 6.405 .07
Inco Ltd.(Canada) 200,000 5.575 .06
Leisure & Tourism- 1.07%
Forte PLC (United Kingdom) 14,674,388 54.049 .63
Euro Disney SA (France)2 6,270,000 16.777 .20
Euro Disney SA, warrants, expire 2004 /2/ 1,100,000 .342
Mandarin Oriental International Ltd. (Hong Kong - Incorporated
in Bermuda) 10,420,065 13.882 .17
Rank Organisation PLC (United Kingdom) 700,000 4.556 .05
Granada Group PLC (United Kingdom) 192,523 1.745 .02
Real Estate- 0.76%
Sun Hung Kai Properties Ltd. (Hong Kong) 5,250,000 35.821 .42
Hysan Development Co. Ltd. (Hong Kong) 7,550,000 16.797 .21
Mitsui Fudosan Co., Ltd. (Japan) 975,000 10.755 .13
Miscellaneous Materials & Commodities- 0.72%
Compagnie de Saint-Gobain (France) 309,944 38.446 .45
English China Clays PLC (United Kingdom) 2,259,300 13.141 .15
Pilkington PLC (United Kingdom) 4,000,000 10.491 .12
Building Materials & Components- 0.68%
Holderbank Financiere Glaris Ltd. (Switzerland) 41,615 30.399 .35
Poliet (France) 118,400 10.413 .12
Sika Finanz AG, Series B (Switzerland) 24,374 7.096 .08
CEMEX, SA, Class A (Mexico) 1,039,375 2.146
CEMEX, SA, Class B 2,210,625 4.858 .08
Tolmex, SA de CV, Class B2 (Mexico) 2,045,000 4.645 .05
Metals: Steel- 0.65%
Thyssen AG (Germany)/2/ 150,000 27.302 .32
Acerinox, SA (Spain) 133,100 12.796 .15
British Steel PLC (United Kingdom) 2,912,000 7.584 .09
Siderurgia Nacional SA, ordinary nominative (Brazil)/2/ 194,000,000 4.535 .05
Tubos de Acero de Mexico, SA (American Depositary Receipts)
(Mexico)/2/ 1,063,000 3.721 .04
Wholesale & International Trade- 0.58%
ITOCHU Corp. (Japan) 4,067,000 24.819 .29
Mitsubishi Corp. (Japan) 1,070,000 12.936 .15
Finning Ltd. (Canada) 781,500 10.902 .13
Samsung Co., Ltd., preferred shares (Global Depositary
Receipts)(South Korea)/1/ 71,750 .628 .01
Transportation: Rail & Road- 0.38%
TNT Ltd. (Australia)/2/ 19,550,000 25.668 .30
Nippon Konpo Unyu Soko (Japan) 775,000 7.237 .08
Electronic Components- 0.38%
Murata Manufacturing Co., Ltd. (Japan) 434,000 16.840 .20
Kyocera Corp. (Japan) 97,000 7.215 .08
Nichicon Corp. (Japan) 390,000 5.972 .07
Nihon Dempa Kogyo Co., Ltd. (Japan) 100,000 2.798 .03
Construction & Housing- 0.27%
Sumitomo Forestry Co., Ltd. (Japan) 494,000 8.532 .10
Higashi Nihon House Co., Ltd. (Japan) 454,000 7.893 .09
Kinden Corp. (Japan) 336,600 6.899 .08
Transportation: Shipping- 0.21%
Bergesen D.Y. AS, Class B (Norway) 546,600 12.080 .14
Shun Tak Holdings Ltd. (Hong Kong) 9,832,529 5.818 .07
Electronic Instruments- 0.20%
Scitex Corp. Ltd. (Israel) 964,500 17.240 .20
Aerospace & Military Technology- 0.17%
Rolls-Royce PLC (United Kingdom) 5,562,500 14.589 .17
Textiles & Apparel- 0.10%
Wacoal Corp. (Japan) 778,000 8.958 .10
Data Processing & Reproduction- 0.05%
Riso Kagaku Corp. (Japan) 70,000 4.997 .05
Miscellaneous- 2.69%
Other equity-type securities in initial period of acquisition 231.659 2.69
----------- --------
---
TOTAL EQUITY-TYPE SECURITIES (cost: $5,823.184 million) 6,687.958 77.88
----------- --------
---
Principal
Amount
(Millions)
Bonds
Argentinian Government- 0.76%
Argentina 6.50% March 2005 $86.000 46.333 .54
Argentina 4.25% March 2023 46.250 18.905 .22
New Zealand Government- 0.21%
New Zealand 8.00% July 1998 NZ$28.500 18.509 .21
Australian Government- 0.18%
Australia 12.50% January 1998 A$10.000 7.918 .09
Australia 12.00% July 1999 10.000 7.983 .09
Supranational- 0.11%
International Bank for Reconstruction &
Development 12.50% July 1997 NZ$11.000 7.777 .09
European Investment Bank 10.50% April 1998 LIT3,000.000 1.728 .02
Netherlands Government- 0.07%
Netherlands 6.50% April 1996 NLG9.000 5.892 .07
Italian Government- 0.06%
Italy 10.00% August 1998 LIT9,000.000 4.940 .06
French Government- 0.02%
France O.A.T. 9.50% June 1998 FF6.000 1.317 .02
----------- --------
---
TOTAL BONDS (cost: $114.590 million) 121.302 1.41
----------- --------
---
SHORT-TERM SECURITIES
Corporate Short-Term Notes- 14.46%
Smithkline Beecham Corp. 5.975%-5.98% due 4/28-5/12/95 $82.100 81.641 .95
Halifax Building Society 5.97%-6.02% due 4/18-5/10/95 77.700 77.318 .90
Daimler-Benz North America Corp. 5.96%-6.05% due 4/3-4/21/95 65.900 65.743 .77
Miles Inc. 5.97%-6.00% due 5/4-5/23/95 65.000 64.522 .75
Deutsche Bank Financial Inc. 5.95%-5.98% due 4/10-4/24/95 61.400 61.218 .71
National Australia Funding (Delaware) Inc. 5.98%-6.00% due
4/7-5/30/95 60.600 60.435 .71
Canada Bills 6.00%-6.03% due 4/26-5/16/95 56.300 55.954 .65
Exxon Imperial U.S. Inc. 6.00% due 4/11-4/18/95 50.165 50.044 .58
PepsiCo, Inc. 5.97% due 4/21/95 50.000 49.826 .58
ABN-AMRO North America Finance Inc. 5.98% due 5/1/95 50.000 49.743 .58
Siemens Corp. 5.95%-6.10% due 4/13-5/11/95 49.890 49.693 .58
American Express Credit Corp. 6.05% due 5/9/95 50.000 49.671 .58
Ford Motor Credit Co. 6.04% due 5/15/95 45.000 44.659 .52
Barclays Bank of Canada 6.03% due 4/6/95 42.500 42.457 .50
RTZ America Inc. 6.07% due 5/11-5/16/95 42.000 41.696 .49
Bayerische Vereinsbank AG 5.96% due 4/24/95 40.000 39.841 .46
General Electric Capital Corp. 6.00% due 5/1/95 38.600 38.399 .45
Banque Nationale de Paris (Canada) 6.05% due 5/1/95 33.000 32.828 .39
UBS Finance (Delaware) Inc. 6.00% due 4/4/95 30.000 29.980 .35
Bayerische Landesbank Girozentrale 5.95% due 4/12/95 30.000 29.941 .35
Toyota Motor Credit Corp. 5.94%-6.02% due 4/3-5/30/95 30.000 29.876 .35
Ford Credit Europe PLC 6.02%-6.05% due 5/2-5/19/95 26.000 25.832 .30
Canadian Imperial Holdings Inc. 5.97% due 4/20/95 25.000 24.918 .29
Caisse Nationale des Telecommunications 5.99%-6.00% due
5/2-5/26/95 21.485 21.350 .25
Electricite de France 5.97% due 4/28/95 20.000 19.907 .23
Toronto-Dominion Holdings USA Inc. 6.02% due 6/1/95 20.000 19.790 .23
MCA Funding Corp. 6.00% due 4/27/95 18.300 18.218 .21
Nestle Capital Corp. 5.94%-5.95% due 4/4-5/1/95 17.200 17.144 .20
British Gas Capital Inc. 5.98% due 4/10/95 15.000 14.975 .17
Canadian Wheat Board 5.97%-6.02% due 4/4-6/6/95 13.100 13.059 .15
Commonwealth Bank of Australia 6.01% due 4/6/95 10.000 9.990 .12
Arco Coal Australia Inc. 5.99% due 5/3/95 9.894 9.839 .11
Certificates of Deposit- 3.74%
Societe Generale 6.05%-6.10% due 4/5-5/18/95 75.000 75.000 .87
Commerzbank AG 6.12%-6.14% due 4/3-5/15/95 60.000 60.001 .70
National Westminster Bank PLC 6.11%-6.22% due 5/5-5/17/95 55.000 55.001 .64
Banque Nationale de Paris 6.08%-6.17% due 5/2-5/8/95 40.000 40.001 .47
Bayerische Hypotheken-und Wechsel-Bank AG 6.08%-6.11% due
4/7-5/9/95 26.000 26.000 .30
Abbey National PLC 6.18% due 5/15/95 25.000 25.003 .29
Bank of Montreal 6.065% due 4/17/95 21.000 21.000 .24
Canadian Imperial Bank of Commerce 6.05% due 5/3/95 20.000 19.999 .23
Federal Agency Discount Notes- 2.27%
Federal Home Loan Mortgage Corp. 5.93%-6.00% due 4/4-5/2/95 130.345 129.956 1.51
Federal Home Loan Bank 5.94%-5.97% due 4/10-5/8/95 55.700 55.489 .65
Federal National Mortgage Assn. 5.98% due 5/8/95 9.700 9.639 .11
Bankers' Acceptances- 0.11%
Societe Generale 6.04% due 4/12/95 9.500 9.480 .11
----------- --------
---
TOTAL SHORT-TERM SECURITIES (cost: $1,767.084 million) 1,767.076 20.58
----------- --------
---
TOTAL INVESTMENT SECURITIES (cost: $7,704.858 million) 8,576.336 99.87
Excess of cash and receivables over payables 11.221 .13
----------- --------
---
NET ASSETS $8,587.557 $100.00
=========== ========
===
</TABLE>
/1/ Purchased in a private placement transaction; resale to the
public may require registration or may extend only to qualified
institutional buyers.
/2/ Non-income-producing securities
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
EQUITY-TYPE SECURITIES APPEARING IN THE PORTFOLIO SINCE SEPTEMBER 30, 1994
- --------------------------------------------------------------------------
Banco Popular Espanol
BCE
Bergesen
Granada Group
Hennes & Mauritz
Huaneng Power International
Inco
Indosat
Mapfre Vida
Nintendo
Nippon Telephone & Telegraph
Orkla
Panamerican Beverage
Pechiney
Rank Organisation
Scottish Power
Shell Transport & Trading
Shinhan Bank
Tenega Nasional
Thai Farmers Bank
Volvo
EQUITY-TYPE SECURITIES ELIMINATED FROM THE PORTFOLIO SINCE SEPTEMBER 30, 1994
- -----------------------------------------------------------------------------
Alcatel Alsthom
Aoyama Trading
Banco Bradesco
Camas
Chudenko
Commonwealth Bank of Austrailia
Compagnie Generale des Eaux
Global Mark International
Grupo Embotellador de Mexico
Grupo Financiero Bancomer
Izumi
Japan Airport Terminal
Kia Motors
Kingfisher
Komatsu
Lex Service
Marui
Matsushita Electric Works
Matsushita-Kotobuki Electronics Industries
Nissan Motors
Quebecor Printing
Sekisui House
Siebe
Siemens
Takuma
Toray Industries
TOSTEM
Union Bank of Switzerland
Willis Corroon Group
Woodside Petroleum
Yizheng Chemical Fibre
Yokogawa Electric
EuroPacific Growth Fund
Financial Statements
<TABLE>
<CAPTION>
- ---------------------------------------------- --------------- --------------
Statement of Assets and Liabilities (dollars in
at March 31, 1995 millions)
- ---------------------------------------------- ---------------- -------------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $7,704.858) $8,576.336
Cash 4.377
Receivables for-
Sales of investments $64.226
Sales of fund's shares 31.361
Dividends and accrued interest 24.510 120.097
------------------- -----------------
8,700.810
Liabilities:
Payables for-
Purchases of investments 83.875
Repurchases of fund's shares 18.222
Open forward currency contracts 5.437
Management services 3.557
Accrued expenses 2.162 113.253
------------------- -----------------
Net Assets at March 31, 1995-
Equivalent to $20.89 per share on
411,039,194 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $8,587.557
=================
Statement of Operations (dollars in
for the year ended March 31, 1995 millions)
- ---------------------------------------------- --------------- -------------
Investment Income:
Income:
Dividends $123.527
Interest 91.159 $214.686
-------------------
Expenses:
Management services fee 38.787
Distribution expenses 17.580
Transfer agent fee 8.186
Reports to shareholders 1.094
Registration statement and prospectus 1.353
Postage, stationery and supplies 2.110
Trustees' fees .134
Auditing and legal fees .072
Custodian fee 5.650
Taxes other than federal income tax .151
Other expenses .076 75.193
-------------------- ---------------
Net investment income 139.493
---------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 118.330
Net change in unrealized appreciation on
investments (235.483)
Net unrealized depreciation on open
forward currency contracts (5.437) (240.920)
--------------------- ---------------
Net realized gain and change in unrealized
appreciation on investments (122.590)
---------------
Net Increase in Net Assets Resulting from
Operations 16.903
===============
- ---------------------------------------------- ------------------- -----------------
Statement of Changes in Net Assets Year ended Year ended
(dollars in millions) 3/31/95 3/31/94
- ---------------------------------------------- ------------------- ----------------
Operations:
Net investment income $139.493 $53.441
Net realized gain on investments 118.330 240.257
Net change in unrealized appreciation
on investments (240.920) 693.993
------------------- -----------------
Net increase in net assets
resulting from operations 16.903 987.691
------------------- -----------------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (117.777) (47.825)
Distributions from net realized gain on
investments (296.792) (25.566)
------------------- -----------------
Total dividends and distributions (414.569) (73.391)
------------------- ----------------
Capital Share Transactions:
Proceeds from shares sold: 182,082,807
and 259,108,117 shares, respectively 3,929.930 3,658.224
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 18,345,378 and 3,171,650 shares,
respectively 389.766 66.105
Cost of shares repurchased: 82,279,286
and 54,180,032 shares, respectively (1,763.865) (1,201.225)
------------------- -----------------
Net increase in net assets resulting from
capital share transactions 2,555.831 2,523.104
------------------- -----------------
Total Increase in Net Assets 2,158.165 3,437.404
Net Assets:
Beginning of year 6,429.392 2,991.988
----------------- ----------------
End of year (including undistributed
net investment income: $27.816
and $10.771, respectively) $8,587.557 $6,429.392
==================== ================
</TABLE>
See Notes to Financial Statements
1. EuroPacific Growth Fund (the "fund") is registered under the Investment
Company Act of 1940 as an open-end, diversified management investment company.
The following paragraphs summarize the significant accounting policies
consistently followed by the fund in the preparation of its financial
statements:
Equity-type securities are stated at market value based upon closing sales
prices reported on recognized securities exchanges on the last business day of
the year or, for listed securities having no sales reported and for unlisted
securities, upon last-reported bid prices on that date. Long-term
and short-term securities with original or remaining maturities in excess of 60
days, including forward currency contracts, are valued at the mean of their
quoted bid and asked prices. Short-term securities with 60 days or less to
maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Trustees.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities and other assets and liabilities, including forward
currency contracts, denominated in non-U.S. currencies are recorded in the
financial statements after translation into U.S. dollars utilizing rates of
exchange on the last business day of the year. Purchases and sales of
investment securities, income, and expenses are calculated using the prevailing
exchange rate as accrued. The fund does not identify the portion of each
amount shown in the fund's Statement of Operations under the caption "Realized
Gain and Unrealized Appreciation on Investments" that arises from changes in
non-U.S. currency exchange rates.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $5,650,000 includes $188,000 that was paid by these
credits rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of March 31, 1995, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $871,478,000, of which
$1,272,447,000 related to appreciated securities and $400,969,000 related to
depreciated securities. During the year ended March 31, 1995, the fund
realized, on a tax basis, a net capital gain of $116,621,000 on securities
transactions. Net gains related to non-U.S. currency transactions of
$1,709,000 were treated as ordinary income for federal income tax purposes.
The capital gain distribution paid in May 1994 includes $943,000 of realized
non-U.S. currency gains. The cost of portfolio securities, excluding forward
currency contracts, for book and federal income tax purposes was $7,704,858,000
at March 31, 1995.
3. The fee of $38,787,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Trustees of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.69% of the first $500 million of average net assets;
0.59% of such assets in excess of $500 million but not exceeding $1.0 billion;
0.53% of such assets in excess of $1.0 billion but not exceeding $1.5 billion;
0.50% of such assets in excess of $1.5 billion but not exceeding $2.5 billion;
0.48% of such assets in excess of $2.5 billion but not exceeding $4.0 billion;
0.47% of such assets in excess of $4.0 billion but not exceeding $6.5 billion;
and 0.465% of such assets in excess of $6.5 billion.
Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Trustees. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the year ended March 31, 1995,
distribution expenses under the Plan were $17,580,000. As of March 31, 1995,
accrued and unpaid distribution expenses were $1,272,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $8,186,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $10,521,000 (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.
Trustees of the fund who are unaffiliated with CRMC may elect to defer part or
all of the fees earned for services as members of the board. Amounts deferred
are not funded and are general unsecured liabilities of the fund. As of March
31, 1995, aggregate amounts deferred were $65,000.
CRMC is owned by the Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Trustees and officers of the fund
are or may be considered to be affiliated with CRMC, AFS, and AFD. No such
persons received any remuneration directly from the fund.
4. As of March 31, 1995, accumulated undistributed net realized gain on
investments was $26,234,000 and paid-in capital was $7,667,058,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $2,678,406,000 and $988,953,000, respectively, during
the year ended March 31, 1995.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
year ended March 31, 1995, such non-U.S. taxes were $15,799,000. Net realized
currency gains on dividends, interest, withholding taxes reclaimable, and sales
of non-U.S. bonds and notes were $2,156,000 for the year ended March 31, 1995.
In accordance with SOP 93-2, the fund reclassified $447,000 from undistributed
net investment income to undistributed net realized gains and $5,437,000 from
undistributed net investment income to paid-in capital for the year ended March
31, 1995.
The fund purchases forward currency contracts in anticipation of, or to
protect itself against, fluctuations in exchange rates. The fund's use of
forward currency contracts involves, to varying degrees, elements of market
risk in excess of the amount recognized in the statement of assets and
liabilities. The contracts are recorded at market value and reflect the extent
of the fund's involvement in these financial instruments. Risks may arise upon
entering these contracts from the potential inability of counterparties to meet
the terms of their contracts and from
the possible movements in non-U.S. exchange rates and securities values
underlying these instruments. At March 31, 1995, the fund had outstanding
forward currency contracts to sell non-U.S. currencies as follows:
NON-U.S. CURRENCY SALE CONTRACTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Contract Amount U.S. Valuation at
3/31/95
Non-U.S. U.S. Amount Unrealized
Depreciation
Japanese Yen expiring Yen 5,048,575,000 $53,253,845 $58,691,262 $5,437,417
4/20 to 9/11/95
</TABLE>
- -------------
Per-Share Data and Ratios /1/
<TABLE>
<CAPTION>
Year
ended
March
31
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Year 21.95 17.64 16.64 $15.18 $14.39
-------- ----------- ------- ------- -------
Income From Investment
Operations:
Net investment income .35 .24 .22 .28 .28
Net realized and unrealized
gain (loss) on investments (.19) 4.37 1.04 1.48 1.02
-------- ---------- ------- ------- -------
Total income from investment
operations .16 4.61 1.26 1.76 1.30
-------- ---------- ------- ------- -------
Less Distributions:
Dividends from net investment
income (.317) (.19) (.22) (.30) (.33)
Dividends from net realized
non-U.S. currency gains /2/ (.003) (.04) (.04) - -
Distributions from net
realized gains (.90) (.07) - - (.18)
-------- ---------- ------- ------- -------
Total distributions (1.22) (.30) (.26) (.30) (.51)
-------- ---------- ------- ------- -------
Net Asset Value, End of Year $20.89 $21.95 $17.64 $16.64 $15.18
======== ========== ======= ======= =======
Total Return /3/ .71% 26.27% 7.69% 11.71% 9.11%
Ratios/Supplemental Data:
Net assets, end of year
(in millions) $8,588 $6,429 $2,992 $1,933 $1,138
Ratio of expenses to average
net assets .97% .99% 1.10% 1.24% 1.28%
Ratio of net income to average
net assets 1.80% 1.13% 1.40% 1.85% 2.23%
Portfolio turnover rate 16.02% 21.37% 10.35% 9.65% 8.58%
</TABLE>
/1/ Adjusted to reflect the 100%
share dividend effective June
10, 1993.
/2/ Realized non-U.S. currency
gains are treated as ordinary
income for federal income tax
purposes.
/3/ This was calculated without
deducting a sales charge. The
maximum sales charge is 5.75%
of the fund's offering price.
To the Board of Trustees and Shareholders
of EuroPacific Growth 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 EuroPacific Growth Fund (the
"Trust") at March 31, 1995, 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 Trust'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 March 31, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
/s/Price Waterhouse
Los Angeles, California
April 28, 1995
Tax Information (unaudited)
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 passed through to shareholders for the fiscal year ended March
31, 1995 is $0.03927 per share. Since this amount is reported for the fiscal
year and not a calendar year, shareholders should refer to their Form 1099 DIV
mailed in January 1996 to determine the amounts to be included on their
respective tax returns for 1995. Shareholders are entitled to a foreign tax
credit, or an itemized deduction, at their option. Generally, it is more
advantageous to claim a credit than to take a deduction.
Corporate shareholders may deduct up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, none of the
dividends paid by the fund from net investment income represents qualifying
dividends.
Certain states may exempt from income taxation a portion of the dividends paid
from net investment income if derived from direct U.S. Treasury obligations.
For purposes of computing this exclusion, non of the dividends paid by the fund
from net investment income was derived from interest on direct U.S. Treasury
obligations.
In January 1996, we will provide you information on distributions paid during
the CALENDAR year to help you in completing your 1995 income tax returns.
Shareholders are advised to consult with their own tax advisers with respect to
the tax consequences of their investment in the fund.
