EUROPACIFIC GROWTH FUND
1996 ANNUAL REPORT
For The Year Ended March 31, 1996
The American Funds Group(r)
EUROPACIFIC GROWTH FUND(R)...
Seeks long-term capital appreciation by investing in the securities of
companies based outside the United States. More than half of the world's
investment opportunities can be found beyond the borders of our country. As a
shareholder of the fund, you have access to what we believe are the best of
those opportunities.
A LOOK AT THE FUND'S RESULTS (through 3/31/96, with all distributions
reinvested)
Latest year +19.8%
Lifetime (since 4/16/84) +510.3
Average annual compound
return over the fund's lifetime + 16.3
EUROPACIFIC GROWTH FUND RANKED NUMBER ONE
Over its lifetime, EuroPacific has done better than all other mutual funds with
similar objectives. With a total return of 510.3%, it ranked first among the 13
international funds in existence from mid-April 1984, when operations began, to
March 31, 1996, according to Lipper Analytical Services. For the one-, five-
and ten-year periods ended March 31, EuroPacific also finished high in the
Lipper rankings. For the ten years, it ranked 3rd out of 23 comparable funds;
for the five years, 9th out of 62. For the 12 months ended March 31,
EuroPacific was in the top quartile, ranking 62nd out of 279 comparable funds.
Lipper rankings do not reflect the effect of sales charges. The year-by-year
record of an investment made in the fund at the 5.75% sales charge is
documented on page 5.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Sales charges are lower for accounts of $50,000 or more.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
INTERNATIONAL INVESTING: THE 25-YEAR RECORD
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1971 1972 1973 1974 1975
+13% +17% -16% -28% +36%
+31% +38% -14% -22% +37%
(2) (2) (2) (2) (2)
1976 1977 1978 1979 1980
+23% -8% +6% +14% +30%
+4% +19% +34% +6% +24%
(1) (2) (2) (1) (1)
1981 1982 1983 1984 1985
- -4% +22% +22% +6% +33%
- -1% -1% +25% +8% +57%
(2) (1) (2) (2) (2)
1986 1987 1988 1989 1990
+18% +4% +16% +31% -2%
+70% +25% +29% +11% -23%
(2) (2) (2) (1) (1)
1991 1992 1993 1994 1995
+31% +7% +10% +2% +38%
+12% -12% +33% +8% +12%
(1) (1) (2) (2) (1)
</TABLE>
(1) U.S. Stock Market
(2) All Major Stock Markets Outside North America
Note: These figures, expressed in percentages based on U.S. dollars, are for
calendar years and include reinvestment of dividends.
Those of you who have been with the fund for a while may recognize the above
design. It appears here, as it has in previous annual reports, to illustrate
some interesting points about investing internationally. It shows that stock
markets outside North America have done better, as a group, than the U.S.
market in 16 of the past 25 calendar years. In each of those 16 years, the
Morgan Stanley Capital International EAFE(r) (Europe, Australasia, Far East)
Index, which reflects all major stock markets outside North America, has gone
up more or declined less than its U.S. Index. (Both indexes are unmanaged.)
The percentages on the top lines are for the U.S.; the lower lines
represent EAFE. The figures show how the two averages fared in a particular
year. Over the entire 25-year period, the EAFE Index gained 2,675% (or an
average of 14.2% a year), while the U.S. Index rose 1,458% (or an average of
11.6% a year), both including reinvestment.
FELLOW SHAREHOLDERS:
Fiscal 1996 was a very profitable year for investors in EuroPacific Growth
Fund. In the 12 months ended March 31, the value of your holdings rose 19.8%
if, like most shareholders, you reinvested income dividends totaling 49 cents a
share and capital gain distributions totaling 21 cents a share that were paid
during the period.
During this period, EuroPacific outpaced the unmanaged Morgan Stanley
Capital International EAFE(r) (Europe, Australasia, Far East) Index, which
measures all major stock markets outside North America. That index posted a
12-month increase of 12.7% with dividends reinvested.
EuroPacific's latest results brought its total return since operations
began in April 1984 to 510.3% with all distributions taken in shares, or an
average annual return of 16.3%. During that time, the EAFE Index went up
462.4%. EuroPacific's lifetime gain placed it first among all 13 U.S.-based
international funds in existence throughout this 12-year span, according to
Lipper Analytical Services.
In fiscal 1996, your fund did considerably better than the EAFE Index for
essentially two reasons. First, several of our substantial holdings posted
unusually large gains; the average increase in share price for the ten largest
investments held throughout the year was 43%. Additionally, relative to the
index, EuroPacific is overrepresented in two categories that fared poorly a
year ago (when the fund trailed EAFE) but rallied strongly in fiscal 1996:
interest-rate-sensitive securities, such as those in banking and financial
services, and the stocks of companies based in developing countries, especially
in Latin America where equities bounced back from levels that were severely
depressed. Four of the fund's ten biggest gainers in fiscal 1996 are based in
Latin America: Kimberly-Clark de Mexico (+132.5%), Telecomunicacoes Brasileiras
(Telebras) (+84.3%), Grupo Financiero Banamex Accival (+81.6%) and Cemex
(+74.6%).
Of the four, the largest holding is Telebras, which operates Brazil's
phone monopoly; it has been in the fund's portfolio for five years. During this
time it has proven to be a profitable investment, while fluctuating widely in
price. In fiscal 1995, for example, Telebras fell 39% and was one of our
weakest stocks; a year earlier it rose 91%. On March 31, the share price was
54% higher than at the time EuroPacific began buying shares in 1991. Our
holding in Telebras affords a good illustration of our willingness to invest
for the long term and remain patient during periods of uncertainty and price
decline. The diversity of our portfolio allows us to adopt a long-range
investment approach.
INCREASING OUR INVESTMENTS IN JAPAN
Toward fiscal year-end, there was growing evidence that Japan's recession is
ending. There are still major problems in the banking and insurance industries
and in real estate. But the long economic slide appears to have bottomed out,
and many Japanese companies are starting to report higher profits. This has
been reflected in rising stock prices. In the 12 months ended March 31, the
Japanese market recorded a gain of 27.8% in local currency, including
reinvestment. The yen's weakness against the U.S. dollar, however, reduced the
gain to 3.4% in dollar terms.
We have identified a number of attractive values in Japan and added to our
holdings there. On March 31, Japanese stocks accounted for 11.8% of
EuroPacific's net assets, up from 6.9% at the start of the fiscal year. Japan
is now the fund's largest area of concentration, although we remain
substantially underrepresented there relative to the EAFE Index.
STRONG REPRESENTATION IN EUROPE
In Europe, interest rates have declined, albeit more slowly than expected, and
fiscal 1996 was marked by continued economic sluggishness. Anticipating better
business conditions in the near future, stock prices have moved higher; nearly
every major European market posted a double-digit gain for the 12 months in
local currency and in dollars with dividends reinvested.
WHERE THE FUND'S ASSETS ARE INVESTED (percent invested by country)
<TABLE>
<CAPTION>
EAFE
EuroPacific Growth Fund Index*
(3/31/96) (3/31/95) (3/31/96 )
<S> <C> <C> <C>
ASIA/PACIFIC
Japan 11.8% 6.9% 40.0%
Australia 7.0 6.6 2.6
Hong Kong 4.1 3.7 3.4
New Zealand 1.8 2.3 .4
South Korea 1.3 .4 -
Philippines 1.0 1.2 -
Indonesia .6 .5 -
India .4 - -
Thailand .2 1.0 -
Singapore .1 .7 1.2
Malaysia - - 2.4
Other .1 .1 -
28.4 23.4 50.0
EUROPE
Sweden 9.1 6.5 2.2
United Kingdom 8.3 9.5 16.3
Netherlands 5.9 6.4 4.1
Germany 5.7 6.1 7.0
France 5.6 5.7 6.6
Switzerland 4.5 4.5 6.2
Italy 2.8 1.7 2.2
Spain 2.5 1.3 1.8
Finland 1.2 1.8 .5
Norway 1.0 .3 .5
Denmark .6 .8 .8
Ireland .6 .7 .3
Belgium .6 .8 1.1
Austria .5 .3 .4
Other .2 .3 -
49.1 46.7 50.0
THE AMERICAS
Canada 3.4 3.3 -
Mexico 2.4 1.8 -
Brazil 1.3 1.2 -
Argentina .7 1.2 -
Other .1 - -
7.9 7.5 -
Other 1.8 1.7 -
Cash and Equivalents 12.8 20.7 -
TOTAL 100.0% 100.0% 100.0%
</TABLE>
*Weighted by market capitalization
In Sweden, EuroPacific's second-largest area of concentration, stocks recorded
the largest increase in dollar terms of any market in which the fund has
investments: +46%.
Our biggest European positions include a number of multinational companies
whose fortunes are not closely tied to the economies of the countries where
they are based. A good example is the fund's largest holding, Astra, a Swedish
pharmaceutical manufacturer that generates more than 80% of its sales revenue
outside Sweden. It has had considerable success penetrating new markets and,
reflecting that success, its profits and share price have been rising. For the
12 months, Astra's stock was up 75% in dollar terms. European multinationals
among our larger holdings include two other globally oriented drug producers,
Ciba-Geigy and Sandoz (which are in the process of merging); those two stocks
rose 88% and 82%, respectively, during the fiscal year.
A LONG-TERM PERSPECTIVE
On March 31, the fund held securities representing more than 250 companies
based in over 30 countries. Nearly half of its net assets was invested in
European stocks. Asia and the Pacific region accounted for more than one-fourth
of net assets; investments in the Americas (including Canada) accounted for 8%.
About 13% was held in the form of cash and equivalents, compared with
approximately 21% a year ago.
This reduction in the cash position took place while assets were growing
by an average of about $300 million a month. As these figures suggest, we
maintained a fairly aggressive investment posture throughout the 12-month
period. We took advantage of what, in our view, were numerous attractive
opportunities and expanded our holdings, not only in Japan but in several other
markets as well.
At the same time, we recognize that in some markets valuations are high by
historical standards; thus, a correction at some point would not be surprising.
Accordingly, we believe it is prudent and important to maintain a long-term
perspective - and we would encourage our shareholders to do the same.
Finally, we are pleased to note that in fiscal 1996 the number of
investors in EuroPacific reached the one million mark. The growth of our
shareholder family in recent years has been highly gratifying to all of us
associated with the fund. In the months and years ahead, we will continue
making every effort to provide you with a rewarding investment experience.
On the following pages, we review the investment approach and philosophy
underlying EuroPacific Growth Fund. We hope you will find the article
interesting and informative.
Cordially,
Walter P. Stern Thierry Vandeventer
Chairman of the Board President
May 10, 1996
HOW A $10,000 INVESTMENT HAS GROWN
Here's how a $10,000 investment in the fund grew between April 16, 1984 - when
the fund began - and March 31, 1996. As you can see, that $10,000 investment in
EuroPacific would have increased in value to $57,533 with all distributions
reinvested.
The fund's year-by-year results appear in the table under the chart. As
you can see, those results have been positive in each of 11 full fiscal years
since operations began. The boxed figure at the far right shows that over
EuroPacific's lifetime an investment in the fund, made at the maximum sales
charge, grew at an average compound rate of 15.8% a year.
The gold line tracks the Morgan Stanley Capital International EAFE
(Europe, Australasia, Far East) Index. The Japanese market is the largest
single component in the index but represents a comparatively small portion of
the fund's portfolio. For this reason the index outpaced the fund in the last
half of the decade of the '80s, a period when Japanese stock prices were
soaring.
<TABLE>
<CAPTION>
Year Ended March 31 1985# 1986 1987 1988
<S> <C> <C> <C> <C>
Total Value
Dividends Reinvested $69 35 118 491
Value at Year-End/1/ $9,948 15,368 19,827 21,437
Total Return (0.5)% 54.5 29.0 8.1
Year Ended March 31 1989 1990 1991 1992
Total Value
Dividends Reinvested $316 527 656 611
Value at Year-End/1/ 24,586 28,762 31,381 35,057
Total Return 14.7 17.0 9.1 11.7
Year Ended March 31 1993 1994 1995 1996
Total Value
Dividends Reinvested $538 515 716 1,132
Value at Year-End/1/ 37,754 47,670 48,007 57,533
Total Return 7.7 26.3 0.7 19.8
</TABLE>
$57,533/1/ /2/
EuroPacific Growth Fund
with dividends reinvested
$56,238/3/
MSCI EAFE
(Europe, Australasia,
Far East) Index
$15,102/4/
Consumer Price Index (inflation)
$10,000/1/
original investment
Average annual compound return for
fund's lifetime:
15.8%/1/
#For the period April 16, 1984 (commencement of operations) through March 31,
1985.
/1/These figures, unlike those shown earlier in this report, reflect payment of
the maximum sales charge of 5.75% on the original investment. Thus, the net
amount invested was $9,425. As outlined in the prospectus, the sales charge is
reduced for larger investments. There is no sales charge on dividends or
capital gain distributions that are reinvested in additional shares. The
maximum initial sales charge was 8.5% prior to July 1, 1988. Results shown do
not take into account income or capital gain taxes.
/2/Includes reinvested dividends of $5,724 and reinvested capital gain
distributions of $9,081.
/3/With dividends reinvested.
/4/Begins April 30, 1984. Computed from data supplied by the U.S. Department of
Labor, Bureau of Labor Statistics. The indexes are unmanaged and do not
reflect sales charges, commissions or expenses. Past results are not
predictive of future results.
Average Annual Compound Returns
(for periods ended March 31, 1996)
Ten Years +13.44%
Five Years +11.56%
One Year +12.98%
Assumes reinvestment of all distributions and payment of the 5.75% maximum
sales charge at the beginning of the stated periods.
EUROPACIFIC
GROWTH FUND
A LOOK AT HOW THE FUND IS MANAGED
[Pull Quote]
EuroPacific Growth Fund's success over the years can be traced to an investment
philosophy stressing value and research, to the diversity of the fund's
portfolio of stocks, and to a unique method of portfolio management that blends
individual effort with team effort. In this article, we take a closer look at
each of these factors.
[End Pull Quote]
EuroPacific Growth Fund has been in operation since 1984, but the philosophy
that underlies it has been developed over several decades by the fund's
adviser, Capital Research and Management Company (CRMC). That philosophy
emphasizes an intensive search for value.
At CRMC, we go to great lengths to determine the difference between the
fundamental evaluation of a company's securities and the current market price.
In searching for good value, we subject each potential investment to rigorous
analysis, asking ourselves a number of questions, such as: "What will the
earning power of this company be a few years from now?" "How much will it be
worth under various scenarios, including higher and lower interest rates and a
stronger or weaker dollar, and how does this relate to its price today?"
We look for companies whose futures appear to be better than the market
says they are. We try to detect changes before they become apparent to others.
We take a long, hard look at each portfolio candidate from many different
angles - its management, its financial strength, its resources, the products or
services it provides, and the environment in which it operates.
We are not willing to pay more for a single share of a company's stock
than we would pay for each share if we were buying the entire company. Each
commitment of capital must offer a return on investment that appears superior
to the alternatives. We have learned that this discipline is applicable to
finding good opportunities among small, less well-known companies as well as
among large multinational firms with products that are household names all over
the world.
[Pull Quote]
OUR INVESTMENT PHILOSOPHY EMPHASIZES AN INTENSIVE SEARCH FOR VALUE.
[End Pull Quote]
THE IMPORTANCE OF "BEING THERE"
To locate and identify undervalued securities, we rely heavily on internally
generated research. CRMC and its affiliates have been doing research abroad for
more than 40 years, and today they maintain one of the industry's most
elaborate global intelligence networks. CRMC employs approximately 100
investment professionals who travel millions of miles each year visiting
companies, because "being there" provides insights that are unobtainable any
other way. The map on page 9 shows the countries where these investment
professionals made research visits in calendar 1995.
We look at industries on a global basis rather than by region or by
country. In our view, to invest successfully outside the United States, it is
important to know what's going on in industries and companies within the U.S.
Our analysts and portfolio counselors talk with corporate executives, observe
production methods, and often confer with a company's competitors, suppliers
and customers. They meet regularly with economists, government officials,
consultants and industry specialists. They sift through company reports,
financial statements and trade publications, often in several languages. They
use all of the latest techniques and tools - including sophisticated
communications and computer systems - to gather, relay and evaluate information
concerning investment opportunities. More than $50 million is spent annually on
this far-ranging research effort - a commitment few other mutual fund
organizations are willing or able to make.
At CRMC, we also draw on many of the traditional sources of information
available in financial centers around the world. However, we are not dependent
on them. Because of the size of our research organization and the depth of our
resources, we generate the vast majority of the data on which our buy and sell
decisions are based, and that information is solely for our own use.
A "BOTTOM UP" APPROACH
In managing EuroPacific, we focus on the merits of individual companies rather
than stressing geographic regions or industries. This "bottom up" approach has
contributed to broad diversification in the portfolio.
Our current holdings - more than 250 companies based in over 30 countries
- - represent numerous kinds of businesses, including government-run enterprises,
small firms that serve a single market and large multinational corporations
that operate around the globe.
In calendar 1995, Capital Research and Management Company's approximately 100
investmetnt professionals traveled to more than 50 countries, making thousands
of research visits to companies, government officials and other experts.
COUNTRIES VISITED
3,156 Research Calls in North America
209 Research Calls in Latin America
49 Research Calls in Eastern Europe
1,127 Research Calls in Europe
854 Research Calls in the Pacific Basin
55 Research Calls in Africa
[Pull Quote]
TO LOCATE AND IDENTIFY UNDERVALUED SECURITIES, WE RELY HEAVILY ON INTERNALLY
GENERATED RESEARCH.
[End Pull Quote]
WE FOCUS ON THE MERITS OF INDIVIDUAL COMPANIES RATHER THAN STRESSING GEOGRAPHIC
REGIONS OR INDUSTRIES. [End Pull Quote]
The portfolio also covers a wide variety of industries. Currently, it
contains quite a few telecommunications and financial stocks - our two heaviest
areas of concentration. In addition, it includes investments in airlines,
automobile manufacturing, beverage distribution, broadcasting, cement-making,
chemicals, construction, data processing, electronics, energy, gold mining,
health care, industrial equipment, glassware, insurance, pharmaceuticals,
publishing, recreation, retailing, shipping, tourism, and water and electric
utilities.
In any given year, some of EuroPacific's investments will rise in price,
while others fall. Those that are successful, of course, have a positive impact
on the fund's results, while those that fare poorly have a negative effect.
Naturally, the larger the holding, the greater the impact, both on the upside
and the downside. In fiscal 1996 our larger holdings did exceptionally well,
and that helped the fund outdistance, by a comfortable margin, the benchmark
against which its results are usually gauged: the Morgan Stanley Capital
International EAFE (Europe, Australasia, Far East) Index.
A DISTINCTIVE METHOD OF PORTFOLIO MANAGEMENT
In managing EuroPacific's investments, we employ a unique method, developed and
refined over three decades by CRMC and its affiliates. We call it the multiple
portfolio counselor system. It is used with all of the American Funds.
Under this system, EuroPacific's assets are divided among several
portfolio counselors. Another segment is assigned to research analysts.
Portfolio counselors are generalists who select from a wide range of
investments; research analysts are specialists who invest within the industries
they follow.
Unlike a committee, where decisions are made by consensus, each portfolio
counselor operates autonomously and invests his or her portion of the assets as
if it were an entire fund. The independence these counselors enjoy means they
are able to concentrate on their highest conviction investment ideas. This
system has the effect of further enhancing the diversity of the fund's
portfolio. An investment committee coordinates and oversees all purchases and
sales to make sure they are in keeping with EuroPacific's objectives; however,
it rarely intervenes in an individual counselor's selections.
Naturally, no system is perfect, and none can be any better than those who
implement it. But we believe the multiple portfolio counselor system offers
some important advantages. Over long periods, it has provided consistency as
well as continuity; when a counselor leaves or retires, only a small portion of
the fund's overall portfolio responsibility changes hands. The system also
allows counselors to be highly creative in searching for hidden value and
brings the full scope of our organization's research capabilities to bear on
investment decisions.
All of these elements - our value-oriented approach, the research network,
and our unique portfolio management system - have contributed to EuroPacific's
success through the years. In the final analysis, however, our ability to
achieve the fund's objectives is determined to a large extent by the quality
and experience of our people. It is worth noting that more than three-fourths
of the key decision-makers who have joined CRMC and its affiliates over the
past two decades are still active in the organization. It is interesting to
note, too, that many of the key investment professionals currently involved
with EuroPacific have been with the fund since the day operations began in
1984.
[Pull Quote]
WE BELIEVE THE MULTIPLE PORTFOLIO COUNSELOR SYSTEM OFFERS SOME IMPORTANT
ADVANTAGES.
[End Pull Quote]
The American Funds Group(r)
EuroPacific Growth Fund
Investment Portfolio March 31, 1996
Industry Diversification
8.95% Telecommunications
7.26% Banking
6.30% Broadcasting & Publishing
4.61% Automobiles
4.47% Health & Personal Care
55.01% Other Industries
13.40% Bonds, Cash and Equivalents
Percent
Largest Individual of Net
Holdings Assets
Astra 2.37%
Mannesmann 2.13
Internationale Nederlanden
Groep NV (ING) 1.84
News Corp. 1.47
ASEA/BBC Brown Boveri 1.44
Australia and New Zealand
Banking Group 1.43
Volvo 1.30
Ciba-Geigy 1.25
Nestle 1.17
Hutchison Whampoa 1.04
<TABLE>
<CAPTION>
EQUITY-TYPE SECURITIES
(common and preferred stocks and convertible
debentures)
Shares or Market Percent
Principal Value of Net
Amount (Millions) Assets
<S> <C> <C> <C>
Telecommunications- 8.95%
Telecom Corp. of New Zealand Ltd. (New Zealand) 19,091,200 $ 85.795
Telecom Corp. of New Zealand Ltd./1/ 6,740,000 30.289
Telecom Corp. of New Zealand Ltd. (American
Depositary Receipts) 31,800 2.278 .96%
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts) (Mexico) 2,950,000 96.981
Telefonos de Mexico, SA de CV, Class L 9,612,500 15.970 .91
Telecomunicacoes Brasileiras SA, preferred
nominative (American Depositary Receipts) (Brazil) 2,123,114 105.625 .86
Telecom Italia Mobile SpA (Italy) 55,430,000 100.595
Telecom Italia Mobile SpA, savings shares 4,320,000 4.712 .85
Koninklijke PTT Nederland NV (Netherlands) 2,471,900 97.272 .79
Nippon Telegraph and Telephone Corp. (Japan) 11,334 82.810 .67
Hong Kong Telecommunications Ltd. (Hong Kong) 40,952,833 81.810 .66
Tele Danmark AS, Class B (Denmark) 1,000,000 52.110
Tele Danmark AS, Class B (American
Depositary Receipts) 1,050,400 27.179 .64
Telefonica de Espana, SA (Spain) 3,068,800 48.715
Telefonica de Espana, SA (American
Depositary Receipts) 153,000 7.267 .45
Philippine Long Distance Telephone Co.
(American Depositary Receipts) (Philippines) 426,250 22.698
Philippine Long Distance Telephone Co.,
convertible preferred shares, Series III (Global
Depositary Receipts) 400,000 20.700
Philippine Long Distance Telephone Co., convertible
preferred shares, Series II (Global Depositary
Receipts)/1/ 220,000 6.710 .41
Telecom Italia SpA (Italy) 23,957,300 37.925
Telecom Italia SpA, savings shares 3,600,000 5.053 .35
Mahanagar Telephone Nigam Ltd. (India) 7,600,000 40.354 .33
Vodafone Group PLC (American Depositary Receipts)
(United Kingdom) 470,000 17.625
Vodafone Group PLC 2,548,700 9.432 .22
Perusahaan Perseroan (Persero) PT Indonesian
Satellite Corp. (American Depositary Receipts)
(Indonesia) 715,500 24.416
Perusahaan Perseroan (Persero) PT
Indonesian Satellite Corp. 400,000 1.373 .21
Korea Mobile Telecommunications Corp. (South Korea) 15,865 19.471 .16
DDI Corp. (Japan) 2,400 18.275 .15
STET-Societa Finanziaria Telefonica p.a.,
nonconvertible savings shares (Italy) 2,750,000 5.514
STET-Societa Finanziaria Telefonica p.a. 1,835,000 5.100 .09
Telecom Argentina STET-France Telecom SA, Class B
(American Depositary Receipts) (Argentina) 188,900 7.839
Telecom Argentina STET-France Telecom SA, Class B 590,000 2.467 .08
BCE Mobile Communications Inc. (Canada)/2/ 305,000 9.986 .08
Kokusai Denshin Denwa Co., Ltd. (Japan) 70,300 6.496 .05
Pakistan Telecommunication Corp. (Global Depositary
Receipts)(Pakistan)/1/ /2/ 25,000 2.400 .02
Rogers Cantel Mobile Communications Inc., Class B 50,000 1.200 .01
(Canada)/2/
Banking- 7.26%
Australia and New Zealand Banking Group Ltd.
(Australia) 36,798,675 175.955 1.43
Svenska Handelsbanken Group, Class A (Sweden) 5,457,300 105.979 .86
Westpac Banking Corp. (Australia) 20,955,130 98.561 .80
ABN AMRO Holding NV (Netherlands) 1,905,402 94.820 .77
Banco de Santander, SA (Spain) 1,666,800 79.378
Banco de Santander, SA (American Depositary 308,200 14.562 .76
Receipts)
Royal Bank of Canada (Canada) 2,900,000 67.819 .55
HSBC Holdings PLC (United Kingdom) 3,610,000 54.145 .44
Banco Popular Espanol, SA (Spain) 245,000 42.327 .34
National Australia Bank Ltd. (Australia) 4,152,195 36.983 .30
MBL International Finance, 3.00% convertible
debentures 2002(Bermuda) $25,200,000 27.720 .23
Grupo Financiero Banamex Accival, SA de CV,
Class B (Mexico)/2/ 9,530,000 20.425
Grupo Financiero Banamex Accival, SA de CV,
Class L /2/ 1,865,900 3.577 .19
Bank of Montreal (Canada) 865,000 20.150 .16
Bangkok Bank Public Co. Ltd., 3.25% convertible
debentures 2004(Thailand) $10,000,000 11.550
Bangkok Bank Public Co. Ltd. 600,000 8.081 .16
Korea First Bank (South Korea)/2/ 2,010,000 17.756 .14
Safra Republic Holdings SA (Luxembourg) 68,000 7.378 .06
Shinhan Bank (South Korea) 204,473 4.862 .04
Merita Ltd., Class A (Finland)/2/ 1,711,233 4.030 .03
Broadcasting & Publishing- 6.30%
News Corp. Ltd. (American Depositary Receipts)
(Australia) 3,958,200 91.039
News Corp. Ltd. 7,944,474 46.490
News Corp. Ltd., preferred shares (American
Depositary Receipts) 1,181,600 23.927
News Corp. Ltd., preferred shares 4,006,153 20.345 1.47
Mediaset (Italy)/1/ /3/ 2,021,818 71.009 .58
CANAL+ (France) 292,175 68.399 .56
Elsevier NV (Netherlands) 1,725,000 26.421
Reed International PLC (United Kingdom) 1,155,634 19.531 .37
Soft Bank Corp. (Japan) 244,720 49.845 .40
Grupo Televisa, SA (American Depositary
Receipts) (Mexico)/2/ 1,791,800 44.571 .36
Television Broadcasts Ltd. (Hong Kong) 11,467,000 42.182 .34
Wolters Kluwer NV (Netherlands) 360,579 39.686 .32
Carlton Communications PLC (United Kingdom) 5,441,250 37.614 .30
Rogers Communications Inc., Class B (Canada)/2/ 3,614,800 32.820 .27
Pearson PLC (United Kingdom) 3,210,000 32.771 .27
Publishing & Broadcasting Ltd. (PBL) (Australia) 6,508,626 28.477 .23
NV Verenigd Bezit VNU (Netherlands) 1,670,000 27.803 .23
News International PLC, special
dividend shares (United Kingdom) 5,041,200 24.848 .20
Independent Newspapers, PLC (Ireland) 2,638,272 21.048 .17
Television Francaise /1/ (France) 165,000 16.887 .14
British Sky Broadcasting Group PLC (American
Depositary Receipts)(United Kingdom) 212,900 8.543 .07
TeleWest Communications PLC (American
Depositary Receipts)(United Kingdom)/2/ 131,000 2.816 .02
Multi-Industry- 4.96%
Hutchison Whampoa Ltd. (Hong Kong) 20,345,000 128.373 1.04
Orkla AS, Class A (Norway) 1,974,000 90.864
Orkla AS, Class B 500,000 21.962 .91
Lend Lease Corp. Ltd. (Australia) 4,253,898 61.553 .50
Jardine Strategic Holdings Ltd. (Singapore -
Incorporated in Bermuda) 12,375,000 39.105
Jardine Strategic Holdings Ltd., 7.50%
convertible Eurobonds 2049 $11,631,000 12.159
Jardine Strategic Holdings Ltd. (American
Depositary Receipts) 300,000 1.838
Jardine Strategic Holdings Ltd., warrants,
expire 1998 /2/ 1,375,000 .516 .43
Brierley Investments Ltd. (New Zealand) 51,086,070 48.698
Brierley Investments Ltd., convertible
preferred shares 2,105,750 1.821 .41
Industriforvaltnings AB Kinnevik, Class B, 10.50%
convertible debentures 1997 (Sweden) SKR66,000,000 20.091
Industriforvaltnings AB Kinnevik, Class B 443,440 15.294
Industriforvaltnings AB Kinnevik, Class A 302,260 10.334 .37
Incentive AB, Class B (Sweden) 350,000 17.740
Incentive AB, Class A 289,900 14.694 .26
Hanson PLC (United Kingdom) 5,063,694 14.836
Hanson PLC (American Depositary Receipts) 700,000 10.500 .20
Swire Pacific Ltd., Class A (Hong Kong) 2,690,000 23.651 .19
Preussag AG (Germany) 78,500 21.832 .18
Ayala Corp., Class B (Philippines) 14,681,000 21.342 .17
Groupe Bruxelles Lambert SA (Belgium) 147,800 19.054
Groupe Bruxelles Lambert SA, warrants, expire 1998/2/ 126,900 1.314 .17
Investor AB, Class B, 8.00% convertible debentures SKR28,000,000 7.075 .06
2001 (Sweden)
Chargeurs (France) 22,000 5.636 .05
B A T Industries PLC (United Kingdom) 253,414 1.870 .02
Automobiles- 4.61%
Volvo AB, Class B (Sweden) 6,865,600 160.096 1.30
Toyota Motor Corp. (Japan) 4,890,000 107.824 .87
Bayerische Motoren Werke AG (Germany) 169,481 88.587
Bayerische Motoren Werke AG, preferred shares 43,636 16.201 .85
Suzuki Motor Corp. (Japan) 5,645,000 69.620 .56
Daimler-Benz AG (Germany) 112,115 60.995 .50
Regie Nationale des Usines Renault SA (France) 1,208,700 35.069 .28
Peugeot SA (France) 200,000 30.525 .25
Health & Personal Care- 4.47%
AB Astra, Class A (Sweden) 5,140,000 238.559
AB Astra, Class B 1,150,000 53.029 2.37
Sandoz Ltd. (Switzerland) 104,000 121.916 .99
Glaxo Wellcome PLC (United Kingdom) 2,185,000 27.375
Glaxo Wellcome PLC (American Depositary Receipts) 450,000 11.306 .31
Teva Pharmaceutical Industries Ltd. (American
Depositary Receipts) (Israel) 800,000 30.800 .25
SmithKline Beecham PLC (American Depositary
Receipts) (United Kingdom) 500,000 25.750 .21
Wella AG, preferred shares (Germany) 46,587 22.407 .18
Banyu Pharmaceutical Co., Ltd. (Japan) 806,000 10.467 .09
Sankyo Co., Ltd. (Japan) 397,000 9.088 .07
Insurance- 4.41%
Internationale Nederlanden Groep NV (Netherlands) 2,410,492 175.117
Internationale Nederlanden Groep NV, warrants,
expire 2001 /2/ 11,600,000 51.897 1.84
Munchener Ruckversicherungs-Gesellschaft,
registered shares(Germany) 19,433 40.485
Munchener Ruckversicherungs-Gesellschaft 3,000 5.285
Munchener Ruckversicherungs-Gesellschaft,
registered shares, warrants, expire 1998 /2/ 5,053 .705 .38
Corporacion Mapfre, CIR, SA (Spain) 757,223 38.807
Corporacion Mapfre, CIR, SA, 8.50% convertible
debentures 1999 /3/ ESP427,770,00 3.447 .34
0
Yasuda Fire and Marine Insurance Co., Ltd. (Japan) 5,223,000 38.893 .32
Irish Life PLC (Ireland) 7,412,864 30.105 .24
PartnerRE Holdings Ltd. (Incorporated in Bermuda) 1,001,900 29.807 .24
Union de Assurances Federales (France) 210,000 26.459 .22
Istituto Nazionale delle Assicurazioni SpA (Italy) 19,320,500 26.378 .21
GIO Australia Holdings Ltd. (Australia) 10,106,056 22.503 .18
CKAG Colonia Konzern AG (Germany) 28,488 21.424
CKAG Colonia Konzern AG, preferred shares 1,553 .942 .18
Baloise Holding (Switzerland) 8,600 18.645 .15
Sampo Insurance Co. Ltd., Class A (Finland) 146,500 8.229 .07
Chiyoda Fire & Marine Insurance Co., Ltd. (Japan) 750,000 4.555 .04
Electrical & Electronic- 3.56%
ASEA AB, Class B (Sweden) 504,300 52.029
ASEA AB, Class A 400,000 41.569
ASEA AB, Class B (American Depositary Receipts) 240,000 24.780
BBC Brown Boveri Ltd, Class A (Switzerland) 48,874 59.429 1.44
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 3,293,180 72.595
Telefonaktiebolaget LM Ericsson, Class B (American
Depositary Receipts) 660,000 14.107 .70
Nokia Corp., Class K (Finland) 1,100,000 38.237
Nokia Corp., Class A 192,000 6.715 .37
Siemens AG (Germany) 60,000 33.028 .27
Makita Corp. (Japan) 2,016,000 30.326 .25
Northern Telecom Ltd. (Canada) 500,000 23.875 .19
Johnson Electric Holdings Ltd. (Hong Kong -
Incorporated in Bermuda) 6,916,800 14.041 .11
Tokyo Electron Ltd. (Japan) 377,000 12.857 .10
LG Electronics Inc. (South Korea) 300,000 8.169 .07
Hitachi, Ltd. (Japan) 810,000 7.871 .06
Machinery & Engineering- 3.51%
Mannesmann AG (Germany) 720,512 262.626 2.13
VA Technologie AG (Austria) 437,500 53.969 .44
Kawasaki Heavy Industries, Ltd. (Japan) 9,945,000 50.733 .41
Atlas Copco AB, Class A (Sweden) 2,640,000 47.507 .39
Mitsubishi Heavy Industries Ltd. (Japan) 1,753,000 15.134 .12
Sidel SA (France) 9,020 2.305 .02
Utilities: Electric & Gas- 3.37%
Korea Electric Power Corp. (South Korea) 1,348,300 56.254
Korea Electric Power Corp. (American Depositary
Receipts) 740,000 17.020 .59
Hongkong Electric Holdings Ltd. (Hong Kong) 14,481,500 47.092 .38
PowerGen PLC (United Kingdom) 5,400,000 43.962 .36
Consolidated Electric Power Asia Ltd. (Hong
Kong - Incorporated in Bermuda) 24,059,312 39.819
Consolidated Electric Power Asia Ltd. (American
Depositary Receipts)/1/ 231,000 3.823 .35
National Power PLC (United Kingdom) 5,350,000 38.126 .31
Edison SpA (Italy) 7,150,000 35.896 .29
Centrais Eletricas Brasileiras SA, preferred
nominative (American Depositary Receipts) (Brazil)/2/ 1,194,000 15.522
Centrais Eletricas Brasileiras SA, ordinary
nominative (American Depositary Receipts)/2/ 982,000 12.766 .23
Hong Kong and China Gas Co. Ltd. (Hong Kong) 11,719,080 23.108 .19
China Light & Power Co., Ltd. (Hong Kong) 5,000,000 22.563 .18
Huaneng Power International, Inc., Class N
(American Depositary Receipts) (People's
Republic of China)/2/ 925,000 15.841 .13
Scottish Power PLC (United Kingdom) 3,000,000 15.817 .13
CESP - Companhia Energetica de Sao Paulo, preferred
nominative (American Depositary Receipts)
(Brazil)/2/ 723,420 7.234
CESP - Companhia Energetica de Sao Paulo,
ordinary nominative /2/ 202,192,000 5.466
CESP - Companhia Energetica de Sao Paulo,
preferred nominative (American Depositary
Receipts)/1/ /2/ 83,664 .837 .11
Ceske Energeticke Zavody, AS (Czech Republic)/2/ 245,000 9.248 .08
Manila Electric Co., Class B (Philippines) 598,788 5.291 .04
Food & Household Products- 2.99%
Nestle SA (Switzerland) 128,225 144.603 1.17
Groupe Danone (France) 518,000 79.471 .65
Reckitt & Colman PLC (United Kingdom) 7,675,000 77.944 .63
NV Verenigde Bedrijven Nutricia (Netherlands) 380,000 38.074 .31
PT Indofood Sukses Makmur (Indonesia) 5,566,000 26.020 .21
Universal Robina Corp. (Philippines) 6,000,000 2.926 .02
Energy Sources- 2.83%
Royal Dutch Petroleum Co. (Netherlands) 550,000 77.915
Royal Dutch Petroleum Co. (New York
Registered Shares) 115,000 16.244
'Shell' Transport and Trading Co., PLC (New
York Registered Shares) (United Kingdom) 135,000 10.834 .85
TOTAL, Class B (France) 972,347 65.699
TOTAL, Class B (American Depositary Receipts) 910,827 30.968 .78
Repsol SA (Spain) 950,000 35.826
Repsol SA (American Depositary Receipts) 500,000 18.687 .44
Petrofina SA (Belgium) 154,900 43.513 .35
YPF SA, Class D (American Depositary
Receipts)(Argentina) 967,000 19.461 .16
Broken Hill Proprietary Co. Ltd. (Australia) 1,083,047 15.417 .13
Engen Ltd. (South Africa) 770,000 5.450 .05
Sasol Ltd. (South Africa) 413,917 4.038 .03
Petron Corp. (Philippines) 8,475,000 3.647 .03
Fletcher Challenge Energy Division (New Zealand) 814,725 1.742 .01
Beverages & Tobacco- 2.70%
Coca-Cola Amatil Ltd. (Australia) 10,174,157 102.384 .83
Seagram Co. Ltd. (Canada) 1,700,000 55.038 .45
LVMH Moet Hennessy Louis Vuitton (France) 170,000 43.176 .35
Panamerican Beverages, Inc., Class A (Mexico) 834,100 33.677 .27
San Miguel Corp., Class B (Philippines) 9,122,000 30.709 .25
PT Hanjaya Mandala Sampoerna (Indonesia) 2,265,000 23.672 .19
Lion Nathan Ltd. (New Zealand) 8,300,400 20.459 .17
South African Breweries Ltd. (South Africa) 450,000 14.255 .11
Heineken Holding NV, Class A (Netherlands) 49,093 9.659 .08
Business & Public Services- 2.57%
Mai PLC (United Kingdom) 6,000,000 35.937 .29
Quebecor Printing Inc. (Canada) 1,792,000 32.211 .26
United Utilities PLC (United Kingdom) 3,371,427 31.769 .26
Reuters Holdings PLC (United Kingdom) 2,866,700 31.103 .25
NTT Data Communication Systems Corp. (Japan) 895 27.261 .22
Hyder PLC (United Kingdom) 2,350,000 27.021 .22
Thames Water PLC (United Kingdom) 3,039,925 26.651 .22
Havas SA (France) 300,000 25.451 .21
Autopistas, Concesionaria Espanola, SA (Spain) 1,800,000 18.276 .15
Waste Management International PLC (American
Depositary Receipts)(United Kingdom)/2/ 1,635,000 16.146 .13
Secom Co., Ltd. (Japan) 220,000 14.368 .12
Eurotunnel SA, units, comprised of one share of
Eurotunnel SA ordinary and one share of
Eurotunnel PLC ordinary (France)/2/ 13,741,006 13.544 .11
BAA PLC (United Kingdom) 1,520,000 12.410 .10
SAP AG, preferred shares (Germany) 30,000 4.321 .03
Chemicals- 2.27%
Ciba-Geigy Ltd. (Switzerland) 123,500 154.531 1.25
AGA AB, Class B (Sweden) 3,430,000 50.921
AGA AB, Class A 108,700 1.638 .43
L'Air Liquide (France) 174,371 31.776 .26
Akzo Nobel NV (Netherlands) 150,000 16.682 .14
Sumitomo Chemical Co., Ltd. (Japan) 2,358,000 12.117 .10
DSM NV (Netherlands) 123,306 11.705 .09
Merchandising- 1.94%
H & M Hennes & Mauritz AB, Class B (Sweden) 967,150 68.890 .56
Tesco PLC (United Kingdom) 9,500,000 38.634 .31
Amway Japan Ltd. (American Depositary
Receipts) (Japan) 715,000 17.786
Amway Japan Ltd. 335,000 16.902 .28
Ito-Yokado Co., Ltd. (Japan) 534,000 31.682 .26
Cifra, SA de CV, Class A (Mexico) 9,395,000 12.682
Cifra, SA de CV, Class C 8,067,200 10.610
Cifra, SA de CV, Class B 1,076,400 1.430 .20
Woolworths Ltd. (Australia) 9,393,675 22.458 .18
WHSmith Group PLC (United Kingdom) 1,500,000 10.186 .08
Delhaize 'Le Lion' SA (Belgium) 150,000 6.360 .05
Chain Store Okuwa Co., Ltd. (Japan) 148,000 1.936 .02
Industrial Components- 1.90%
Compagnie Generale des Etablissements Michelin,
Class B (France) 1,394,000 66.487
Compagnie Generale des Etablissements
Michelin, convertible preferred shares 56,266 3.198 .56
Calsonic Corp. (Japan) 3,985,000 31.275 .25
Morgan Crucible Co. PLC (United Kingdom) 3,346,966 20.864 .17
MINEBEA Co., Ltd. (Japan) 2,078,000 17.765 .14
Bridgestone Corp. (Japan) 1,000,000 16.724 .14
Valeo (France) 309,061 16.430 .13
Nikon Corp. (Japan) 1,260,000 15.422 .13
Continental AG (Germany) 875,000 15.407 .12
Sumitomo Electric Industries, Ltd. (Japan) 710,000 9.552 .08
BICC PLC (United Kingdom) 1,500,000 7.668 .06
Magna International Inc., Class A (Canada) 150,600 6.946 .06
Autoliv AB (American Depositary Receipts) (Sweden)/1/ 70,000 3.580 .03
Orbital Engine Corp. Ltd. (Australia)/2/ 5,039,242 3.150
Orbital Engine Corp. Ltd. (American Depositary
Receipts)/2/ 43,573 .251 .03
Metals: Nonferrous- 1.87%
Pechiney, Class A (France) 1,474,785 61.694 .50
Cominco Ltd. (Canada) 2,325,000 55.219 .45
WMC Ltd. (Australia) 8,178,192 54.056 .44
Outokumpu Oy, Class A (Finland) 2,120,000 35.861 .29
Teck Corp., Class B (Canada) 740,000 16.152 .13
Inco Ltd. (Canada) 260,000 8.223 .06
Recreation & Other Consumer Products- 1.75%
Nintendo Co., Ltd. (Japan) 1,783,300 113.966 .92
THORN EMI PLC (United Kingdom) 3,157,535 81.118 .66
PolyGram NV (New York Registered Shares)
(Netherlands) 350,000 21.087 .17
Forest Products & Paper- 1.33%
Kymmene Corp. (Finland) 1,150,000 32.173
Kymmene Corp., 8.25% convertible debentures 2043 FIM40,000,000 9.506 .34
Stora Kopparbergs Bergslags AB, Class B (Sweden) 2,300,000 29.489 .24
Kimberly-Clark de Mexico, SA de CV, Class A (Mexico) 1,400,000 26.837 .22
AssiDoman AB (Sweden) 828,000 18.563 .15
Carter Holt Harvey Ltd. (New Zealand) 8,224,336 18.144 .15
Repola Ltd. (Finland) 690,000 13.789 .11
MAYR-MELNHOF Karton AG (Austria)/2/ 160,000 7.012 .06
Sappi BVI Finance Ltd., 7.50% convertible debentures
2002 (South Africa)/1/ $6,000,000 5.670 .04
Fletcher Challenge Paper Division (New Zealand)/2/ 1,629,450 3.040 .02
Appliances & Household Durables- 1.22%
AB Electrolux, Class B (Sweden) 1,110,000 54.347 .44
Sony Corp. (Japan) 843,000 50.330 .41
SANYO Electric Co., Ltd. (Japan) 3,625,000 21.676 .18
Philips Electronics NV (Netherlands) 560,000 20.376 .16
Leifheit AG (Germany) 76,650 3.178 .03
Samsung Electronics Co., Ltd. (Global Depositary
Receipts) (South Korea)/1/ 1,239 .073 .00
Electronic Components- 1.08%
Kyocera Corp. (Japan) 1,233,000 83.636 .68
Murata Manufacturing Co., Ltd. (Japan) 1,245,000 42.807 .34
Nichicon Corp. (Japan) 550,000 7.194 .06
Real Estate- 0.86%
Sun Hung Kai Properties Ltd. (Hong Kong) 6,250,000 55.962 .45
Hysan Development Co. Ltd. (Hong Kong) 7,550,000 24.357 .20
Mitsui Fudosan Co., Ltd. (Japan) 1,480,000 19.221 .15
C&P Homes, Inc. (Philippines) 9,137,000 6.903 .06
Miscellaneous Materials & Commodities- 0.70%
Compagnie de Saint-Gobain (France) 317,409 41.253 .33
English China Clays PLC (United Kingdom) 6,144,300 27.800 .23
SGL Carbon AG (Germany) 183,000 17.482 .14
Aerospace & Military Technology- 0.69%
Bombardier Inc., Class B (Canada) 4,285,500 63.276 .51
Rolls-Royce PLC (United Kingdom) 6,694,781 22.016 .18
Building Materials & Components- 0.58%
Holderbank Financiere Glaris Ltd. (Switzerland) 58,938 44.476 .36
CEMEX, SA de CV, ordinary participation
certificates (Mexico) 2,686,000 9.600
CEMEX, SA de CV, Class B 2,210,625 8.505
CEMEX, SA de CV, Class A 1,793,075 6.421 .20
Fletcher Challenge Building Division (New Zealand)/2/ 814,725 2.003 .02
Wholesale & International Trade- 0.49%
ITOCHU Corp. (Japan) 4,067,000 28.499 .23
Mitsubishi Corp. (Japan) 1,947,000 25.467 .21
Finning Ltd. (Canada) 400,000 6.530 .05
Leisure & Tourism- 0.47%
Euro Disney SCA (France)/2/ 7,320,000 20.511
Euro Disney SCA, warrants, expire 2004 /2/ 1,100,000 .400 .17
Granada Group PLC (United Kingdom) 1,602,281 18.338 .15
Mandarin Oriental International Ltd. (Singapore -
Incorporated in Bermuda) 10,420,065 13.129 .11
Rank Organisation PLC (United Kingdom) 700,000 5.176 .04
Transportation: Airlines- 0.44%
British Airways PLC (American Depositary Receipts)
(United Kingdom) 354,400 29.061
British Airways PLC 1,056,000 8.637 .31
Singapore Airlines Ltd. (Singapore) 1,124,000 11.655 .09
Swissair Schweizerische Luftverkehr AG 4,700 4.937 .04
(Switzerland)/2/
Gold Mines- 0.41%
Ashanti Goldfields Co. Ltd. (Global Depositary
Receipts) (Ghana) 1,116,900 27.923
Ashanti Goldfields Co. Ltd., 5.50% convertible
debentures 2003 $16,834,000 17.339
Ashanti Goldfields Co. Ltd. (Global Depositary
Receipts)/1/ 210,000 5.250 .41
Transportation: Shipping- 0.38%
Nippon Yusen KK (Japan) 4,270,000 24.296 .20
Stolt-Nielsen SA, Class B (American Depositary
Receipts)(Incorporated in Luxembourg) 632,000 11.297 .09
Bergesen D.Y. AS, Class B (Norway) 650,000 10.954 .09
Transportation: Rail & Road- 0.31%
TNT Ltd. (Australia)/2/ 19,550,000 24.134 .20
Canadian National Railway System (Canada) 400,000 6.900 .06
Nippon Konpo Unyu Soko Co., Ltd. (Japan) 775,000 6.582 .05
Metals: Steel- 0.21%
Pohang Iron & Steel Co., Ltd. (American Depositary
Receipts)(South Korea) 526,800 12.775
Pohang Iron & Steel Co., Ltd. 7,870 .661 .11
Thyssen AG (Germany) 50,000 9.068 .07
Acerinox, SA (Spain) 31,460 3.549 .03
Financial Services - 0.14%
ORIX Corp. (Japan) 250,500 9.479 .08
Acom Co., Ltd. (Japan) 210,000 8.103 .06
Data Processing & Reproduction- 0.10%
Riso Kagaku Corp. (Japan) 70,000 5.984 .05
Olivetti SpA (Italy)/2/ 11,250,000 5.747 .05
Construction & Housing- 0.06%
Kinden Corp. (Japan) 369,600 5.732 .05
Sumitomo Forestry Co., Ltd. (Japan) 90,000 1.379 .01
Electronic Instruments- 0.03%
Barco NV (Belgium) 30,000 4.144 .03
Miscellaneous- 4.88%
Other equity-type securities in initial period of
acquisition 602.005 4.88
----------- -------
-
TOTAL EQUITY-TYPE SECURITIES
(cost: $8,555.464 million) 10,682.362 86.60
----------- -------
-
BONDS
Principal
Amount
(Millions)
Argentinean Government- 0.50%
Argentina 6.8125% March 2005 /4/ $86.000 $62.028 .50%
New Zealand Government- 0.01%
New Zealand 8.00% July 1998 NZ$1.500 1.012 .01
Supranational- 0.06%
International Bank for Reconstruction and
Development 12.50% July 1997 NZ$11.000 7.846 .06
----------- -------
-
TOTAL BONDS (cost: $49.787 million) 70.886 .57
----------- -------
-
SHORT-TERM SECURITIES
Corporate Short-Term Notes- 7.28%
Toronto-Dominion Holdings USA Inc. 5.14%-5.36%
due 4/1-7/1/96 $101.250 100.766 .82
General Electric Capital Corp. 5.19%-5.35%
due 4/29-5/16/96 83.600 83.084 .67
National Australia Funding (Delaware) Inc.
5.205%-5.37% due 4/16-5/14/96 82.100 81.845 .66
Canada Bills 5.10%-5.25% due 4/16-6/21/96 67.700 67.147 .54
Ford Motor Credit Co. 5.14%-5.29% due 4/9-5/28/96 65.300 65.169 .53
Ford Credit Europe PLC 5.16%-5.21% due 4/2-4/15/96 65.000 64.925 .53
American Express Credit Corp. 5.15%-5.30%
due 4/3-5/24/96 62.500 62.343 .51
Sandoz Corp. 5.12%-5.33% due 4/12-5/15/96 53.400 53.134 .43
Daimler-Benz North America Corp. 5.12%-5.26%
due 4/11-6/21/96 53.400 52.835 .43
Canadian Imperial Holdings Inc. 5.105% due 5/2/96 50.000 49.773 .40
Bayerische Vereinsbank AG 5.13%-5.27%
due 4/10-5/28/96 43.500 43.273 .35
Coca-Cola Co. 5.11% due 4/19/96 35.000 34.905 .28
SmithKline Beecham Corp. 5.16% due 4/8/96 32.300 32.263 .26
Halifax Building Society 5.10%-5.25% due 4/4-5/7/96 31.200 31.130 .25
ABN AMRO North America Finance Inc. 5.06% due 5/6/96 29.500 29.348 .24
Canadian Wheat Board 5.03%-5.30% due 4/15-5/17/96 28.700 28.573 .23
AT&T Corp. 5.35% due 4/1/96 17.925 17.922 .15
Certificates of Deposit- 2.84%
Societe Generale 5.22%-5.45% due 4/3-5/9/96 89.500 89.500 .73
National Westminster Bank PLC 5.18%-5.33%
due 4/22-5/21/96 86.000 85.999 .70
Commerzbank AG 5.15%-5.36% due 5/20-5/31/96 70.000 69.988 .57
Credit Suisse 5.19% due 4/9/96 40.000 40.000 .32
Morgan Guaranty Trust Co. of New York 5.25%
due 4/11/96 40.000 40.000 .32
Bayerische Landesbank Girozentrale 5.43% due 4/4/96 25.000 25.000 .20
Federal Agency Discount Notes- 2.44%
Federal National Mortgage Assn. 5.00%-5.09%
due 4/4-5/29/96 113.700 113.249 .92
Federal Home Loan Bank 5.00%-5.21% due 5/3-6/10/96 106.275 105.520 .86
Federal Home Loan Mortgage Corp. 5.00%-5.29%
due 4/22-5/28/96 82.190 81.717 .66
----------- -------
-
TOTAL SHORT-TERM SECURITIES
(cost: $1,549.491 million) 1,549.408 12.56
----------- -------
-
TOTAL INVESTMENT SECURITIES
(cost: $10,154.742 million) 12,302.656 99.73
Excess of cash and receivables over payables 32.745 .27
----------- -------
-
NET ASSETS $12,335.401 100.00%
=========== =======
=
</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.
/3/ Valued under procedures established by the Board of Trustees.
/4/ Coupon rate may change periodically.
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, 1995
Acom
AGA
BAA
Banyu Pharmaceutical
BARCO
British Sky Broadcasting Group
Canadian National Railway System
Chargeurs
Engen
Groupe Danone
Grupo Televisa
PT Hanjaya Mandala Sampoerna
HSBC Holdings
Kawasaki Heavy Industries
Kokusai Denshin Denwa
Korea Mobile Telecommunications
LG Electronics
LVMH Moet Hennessy Louis Vuitton
Mahanagar Telephone Nigam
MAI
MBL International Finance
Mediaset
Northern Telecom
NTT Data Communication Systems
NV Verenigde Bedrijven Nutricia
ORIX
PartnerRE Holdings
Pohang Iron & Steel
Publishing & Broadcasting
Royal Bank of Canada
Sasol
Sidel
SmithKline Beecham
Soft Bank
South African Breweries
Stolt-Nielsen
Swissair Schweizerische Luftverkehr
Tokyo Electron
Union des Assurances Federales
EQUITY-TYPE SECURITIES ELIMINATED FROM THE PORTFOLIO SINCE SEPTEMBER 30, 1995
Alusuisse-Lonza Holding
ARBED
PT Bank Internasional Indonesia
British Gas
Cable and Wireless
Cartiere Burgo
Cathay Pacific Airways
Companhia Cervejaria Brahma
CS Holding Group
Deutsche Bank
Eastern Group
ECI Telecom
Elf Gabon
Forte
GEA
Higashi Nihon House
Holdingmaatschappij De Telegraaf
PT Indah Kiat Pulp & Paper
Nihon Dempa Kogyo
NOVA
Philippine National Bank
Pilkington
Poliet
Samsung Co.
Sandvik
Scitex
Sembawang Shipyard
Shun Tak Holdings
Sika Finanz
Telefonica de Argentina
Thai Telephone & Telecommunication
Tolmex
EuroPacific Growth Fund
Financial Statements
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
at March 31, 1996 (dollars in millions)
- ---------------------------------------------- ----------- -----------
<S> <C> <C>
ASSETS:
Investment securities at market
(cost: $10,154.742) $12,302.656
Cash .909
Receivables for-
Sales of investments $40.314
Sales of fund's shares 35.548
Open forward currency contracts 1.921
Dividends and accrued interest 35.635 113.418
----------- -----------
12,416.983
LIABILITIES:
Payables for-
Purchases of investments 56.521
Repurchases of fund's shares 15.401
Management services 5.004
Accrued expenses 4.656 81.582
----------- -----------
NET ASSETS AT MARCH 31, 1996-
Equivalent to $24.28 per share on
508,129,481 shares of beneficial
interest issued and outstanding;
unlimited shares authorized 12,335.401
===========
Statement of Operations
for the year ended March 31, 1996 (dollars in millions)
- ---------------------------------------------- ----------- -----------
INVESTMENT INCOME:
Income:
Dividends $197.288
Interest 117.858 315.146
-----------
Expenses:
Management services fee 51.034
Distribution expenses 24.656
Transfer agent fee 11.473
Reports to shareholders 1.121
Registration statement and prospectus 1.491
Postage, stationery and supplies 1.564
Trustees' fees .147
Auditing and legal fees .087
Custodian fee 6.624
Taxes other than federal income tax .182
Other expenses .035 98.414
----------- -----------
Net investment income 216.732
-----------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
Net realized gain 328.434
Net increase in unrealized appreciation on
investments 1,274.147
Net unrealized appreciation on open
forward currency contracts 7.358 1,281.505
----------- -----------
Net realized gain and change in unrealized
appreciation on investments 1,609.939
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 1,826.671
===========
- ---------------------------------------------- ----------- -----------
Statement of Changes in Net Assets Year ended March 31
(dollars in millions) 1996 1995
- ---------------------------------------------- ----------- -----------
OPERATIONS:
Net investment income $216.732 $139.493
Net realized gain on investments 328.434 118.330
Net change in unrealized appreciation
on investments 1,281.505 (240.920)
----------- -----------
Net increase in net assets
resulting from operations 1,826.671 16.903
----------- -----------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income (221.348) (117.777)
Distributions from net realized gain on
investments (93.827) (296.792)
----------- -----------
Total dividends and distributions (315.175) (414.569)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold: 186,653,832
and 182,082,807 shares, respectively 4,301.025 3,929.930
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 13,154,617 and 18,345,378 shares,
respectively 296.950 389.766
Cost of shares repurchased: 102,718,162
and 82,279,286 shares, respectively (2,361.627) (1,763.865)
----------- -----------
Net increase in net assets resulting from
capital share transactions 2,236.348 2,555.831
----------- -----------
TOTAL INCREASE IN NET ASSETS 3,747.844 2,158.165
NET ASSETS:
Beginning of year 8,587.557 6,429.392
---------- -----------
End of year (including undistributed
net investment income: $37.536
and $40.615, respectively) $12,335.401 $8,587.557
=========== ===========
</TABLE>
See Notes to Financial Statements
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 fund seeks long-term capital appreciation by investing in the securities of
companies based outside the U.S. The following paragraphs summarize the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
Equity-type securities traded on a national securities exchange (or
reported on the NASDAQ national market) and securities traded in the
over-the-counter market are stated at the last reported sales price on the day
of valuation; other securities, and securities for which no sale was reported
on that date, are stated at the last quoted bid price. Long-term and short-term
securities with original or remaining maturities in excess of 60 days,
including forward currency contracts, are valued at the mean of their quoted
bid and asked prices. Short-term securities with 60 days or less to maturity
are valued at amortized cost, which approximates market value. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by the Valuation Committee of the Board of Trustees.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed delivery or "when-issued" basis, it
will segregate with its custodian liquid assets in an amount sufficient to meet
its payment obligations in these transactions. 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 $6,624,000 includes $149,000 that was paid by these
credits rather than in cash.
Net realized gains and net unrealized gains of the fund derived in India
are subject to certain non-U.S. taxes at a rate of 30%. The fund provides for
such non-U.S. taxes on investment income, net realized gains and net unrealized
gains.
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, 1996, net unrealized appreciation on investments,
excluding forward currency contracts, for book and federal income tax purposes
aggregated $2,147,914,000, net of accumulated deferred taxes totaling
$1,429,000 on unrealized appreciation of Indian securities, of which
$2,467,419,000 related to appreciated securities and $319,505,000 related to
depreciated securities. During the year ended March 31, 1996, the fund
realized, on a tax basis, a net capital gain of $319,302,000 on securities
transactions. Net gains related to non-U.S. currency and other transactions of
$9,132,000 were treated as ordinary income for federal income tax purposes. The
cost of portfolio securities, excluding forward currency contracts, for book
and federal income tax purposes was $10,154,742,000 at March 31, 1996.
3. The fee of $51,034,000 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;
0.465% of such assets in excess of $6.5 billion but not exceeding $10.5
billion; and 0.462% of such assets in excess of $10.5 billion.
Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of 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, 1996,
distribution expenses under the Plan were $24,656,000. As of March 31, 1996,
accrued and unpaid distribution expenses were $1,743,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $11,473,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $11,178,000 (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, 1996, aggregate amounts deferred and earnings thereon were
$154,000.
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, 1996, accumulated undistributed net realized gain on
investments was $242,259,000 and paid-in capital was $9,389,840,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $4,223,394,000 and $1,888,117,000, respectively,
during the year ended March 31, 1996.
Dividend and interest income is recorded net of non-U.S. taxes paid. For
the year ended March 31, 1996, such non-U.S. taxes were $22,479,000. Net
realized currency gains on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $4,469,000 for the year ended March
31, 1996.
The fund reclassified $1,537,000 to undistributed net investment income
from undistributed net realized gains and $3,126,000 to undistributed net
realized currency gains from undistributed net realized gains for the year
ended March 31, 1996.
The fund may enter into forward currency contracts, which represent an
agreement to exchange currencies of different countries at a specified future
date at a specified rate. The fund enters into these contracts to reduce its
exposure to fluctuations in foreign exchange rates arising from investments
denominated in non-U.S. currencies. The fund's use of forward currency
contracts involves market risk in excess of the amount recognized in the
statement of assets and liabilities. The contracts are recorded in the
statement of assets and liabilities at their net unrealized value. The face or
contract amount in U.S. dollars reflects the total exposure the fund has in
that particular contract. Losses may arise upon entering these contracts from
the potential inability of counterparties to meet the terms of their contracts
and from possible movements in non-U.S. exchange rates and securities values
underlying these instruments. At March 31, 1996, the fund had outstanding
forward currency contracts to sell non-U.S. currencies as follows:
NON-U.S. CURRENCY SALE CONTRACTS
<TABLE>
<CAPTION>
Contract Amount U.S. Valuation at 3/31/96
Non-U.S. U.S. Amount Unrealized
Appreciation
<S> <C> <C> <C> <C>
Japanese Yen expiring
7/11/96 to 1/17/97 Y8,446,775,000 $83,050,734 $81,129,363 $1,921,371
</TABLE>
- -------
Per-Share Data and Ratios /1/
<TABLE>
<CAPTION>
Year ended March 31
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Year $20.89 $21.95 $17.64 $16.64 $15.18
------- ------ ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .46 .35 .24 .22 .28
Net realized and unrealized
gain (loss) on investments 3.63 (.19) 4.37 1.04 1.48
------- ------ ------- ------- -------
Total income from investment
operations 4.09 .16 4.61 1.26 1.76
------- ------ ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.49) (.317) (.187) (.222) (.30)
Dividends from net realized
non-U.S. currency gains /2/ - (.003) (.043) (.038) -
Distributions from net
realized gains (.21) (.90) (.07) - -
------- ------ ------- ------- -------
Total distributions (.70) (1.22) (.30) (.26) (.30)
------- ------ ------- ------- -------
Net Asset Value, End of Year $24.28 $20.89 $21.95 $17.64 $16.64
======= ====== ======= ======= =======
Total Return /3/ 19.84% .71% 26.27% 7.69% 11.71%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in millions) $12,335 $8,588 $6,429 $2,992 $1,933
Ratio of expenses to average
net assets .95% .97% .99% 1.10% 1.24%
Ratio of net income to average
net assets 2.09% 1.80% 1.13% 1.40% 1.85%
Portfolio turnover rate 21.77% 16.02% 21.37% 10.35% 9.65%
</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, 1996, the results of its operations, the changes in its
net assets and the per-share data and ratios for the years indicated in
conformity with generally accepted accounting principles. These financial
statements and per-share data and ratios (hereafter referred to as "financial
statements") are the responsibility of the 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, 1996 by correspondence with the custodian and brokers
and the application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Los Angeles, California
April 30, 1996
Tax Information (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
fund were earned from the following sources:
Dividends and Distributions per Share
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
To Shareholders of Payment Date From Net From Net From Net
Record Investment Realized Short- Realized Long-
Income Term Gains Term Gains
June 2, 1995 June 5, 1995 $0.07 - $0.06
December 15, 1995 December 18, 1995 0.42 - 0.15
</TABLE>
The fund makes an election under the Internal Revenue Code Section 853 to pass
through non-U.S. taxes paid by the fund to its shareholders. The amount of
non-U.S. taxes for the fiscal year ended March 31, 1996 is $0.04351 on a per
share basis. Shareholders are entitled to a foreign tax credit or an itemized
deduction, at their option. Generally, it is more advantageous to claim a
credit rather than to take a deduction.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, none of the
dividends paid by the fund from net investment income represents qualifying
dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many plan retirement trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099 DIV OR OTHER TAX
INFORMATION WHICH WAS MAILED IN JANUARY 1996 UNDER SEPARATE COVER TO DETERMINE
THE CALENDAR YEAR AMOUNTS TO BE INCLUDED ON THEIR RESPECTIVE 1995 TAX RETURNS.
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISERS.
A PORTFOLIO FOR EVERY INVESTOR
EuroPacific Growth Fund is a member of The American Funds Group - 28 funds with
a wide range of investment objectives and assets totaling more than $125
billion. These funds serve more than eight million shareholders throughout the
world, including hundreds of leading corporations and institutions.
GROWTH FUNDS
AMCAP FUND
Seeks long-term growth of capital by investing in growing, profitable
companies.
EUROPACIFIC GROWTH FUND
Seeks long-term capital appreciation by investing in companies based outside
the U.S.
THE GROWTH FUND OF AMERICA
Invests in a wide range of companies that appear to offer superior
opportunities for growth of capital.
THE NEW ECONOMY FUND
Seeks long-term growth of capital through investments in companies operating in
services and information industries in the U.S. and around the world. (Can
invest up to 40% of its assets outside the U.S.)
NEW PERSPECTIVE FUND
Seeks long-term growth of capital through investments all over the world,
including the United States.
SMALLCAP WORLD FUND
Seeks long-term growth of capital by investing in the stocks of smaller
companies in the U.S. and around the world.
GROWTH AND INCOME FUNDS
AMERICAN MUTUAL FUND
Strives for the balanced accomplishment of three objectives - current income,
capital growth and conservation of principal - through investments in companies
that participate in the growth of the American economy.
CAPITAL WORLD GROWTH AND INCOME FUND
Seeks growth and income over the long term through a global portfolio
emphasizing "blue chip" stocks.
FUNDAMENTAL INVESTORS
Seeks long-term growth of capital and income primarily through investments in
common stocks.
THE INVESTMENT COMPANY OF AMERICA
Seeks long-term growth of capital and income, placing greater emphasis on
future dividends than on current income. Now in its 63rd year, ICA is one of
the nation's oldest and largest mutual funds.
WASHINGTON MUTUAL INVESTORS FUND
Seeks current income and an opportunity for capital growth through high-quality
common stocks considered eligible for the investment of trust funds in the
District of Columbia.
EQUITY-INCOME FUNDS
CAPITAL INCOME BUILDER
Seeks to provide a growing dividend - with higher income distributions every
quarter as far as possible - together with a current yield which exceeds that
paid by U.S. stocks generally. Concentrates on U.S. equity securities, but may
also invest in stocks and bonds all over the world.
THE INCOME FUND OF AMERICA
Seeks current income while secondarily striving for capital growth through
investments in stocks and fixed-income securities.
BALANCED FUND
AMERICAN BALANCED FUND
Seeks conservation of capital, current income, and long-term growth of both
capital and income by investing in stocks and fixed-income securities. The fund
is managed as if it constituted the complete investment program of a prudent
investor.
INCOME FUNDS
AMERICAN HIGH-INCOME TRUST
Seeks a high level of current income and, secondarily, capital appreciation
through a diversified, carefully supervised portfolio consisting primarily of
lower rated, higher risk corporate bonds.
THE BOND FUND OF AMERICA
Seeks as high a level of current income as is consistent with preservation of
capital through a diversified portfolio of bonds and other fixed-income
obligations.
CAPITAL WORLD BOND FUND
Seeks long-term total return, consistent with prudent management, by investing
in quality fixed-income securities issued by major governments and corporations
all over the world, including the U.S.
INTERMEDIATE BOND FUND OF AMERICA
Seeks current income, consistent with preservation of capital, through a
diversified portfolio of government and high-quality corporate debt obligations
with effective maturities between three and 10 years.
U.S. GOVERNMENT SECURITIES FUND
Seeks high current income, consistent with prudent risk and preservation of
capital, by investing primarily in securities for which the timely payment of
principal and interest
is guaranteed by the U.S. government.
TAX-EXEMPT INCOME FUNDS
AMERICAN HIGH-INCOME MUNICIPAL BOND FUND
Seeks a high level of current income exempt from regular federal income taxes
through a diversified, carefully researched portfolio of municipal bonds,
including higher yielding, lower rated, higher risk issues. It may invest up to
100% of its assets in bonds subject to the alternative minimum tax.
LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
Seeks current income exempt from federal income taxes, while preserving
capital, through a quality-oriented municipal bond portfolio with an average
effective maturity between three and 10 years.
THE TAX-EXEMPT BOND FUND OF AMERICA
Seeks a high level of federally tax-free current income, consistent with
preservation of capital, through a diversified portfolio consisting primarily
of municipal bonds.
THE TAX-EXEMPT FUND OF CALIFORNIA
Seeks a high level of current income free from federal and California income
taxes primarily through investments in California municipal bonds.
Additionally, the fund seeks to preserve capital.
THE TAX-EXEMPT FUND OF MARYLAND
Seeks a high level of current income free from federal, Maryland state and
local income taxes primarily through investments in Maryland municipal bonds.
Additionally, the fund seeks to preserve capital.
THE TAX-EXEMPT FUND OF VIRGINIA
Seeks a high level of current income free from federal and Virginia income
taxes primarily through investments in Virginia municipal bonds. Additionally,
the fund seeks to preserve capital.
MONEY MARKET FUNDS
THE CASH MANAGEMENT TRUST OF AMERICA
Seeks to provide income on cash reserves, while preserving capital and
maintaining liquidity, through investments in high-quality money market
instruments.
THE TAX-EXEMPT MONEY FUND OF AMERICA
Seeks to provide income free from federal taxes, while preserving capital and
maintaining liquidity, through investments in high-quality municipal securities
maturing in one year or less.
THE U.S. TREASURY MONEY FUND OF AMERICA
Seeks to provide income on cash reserves, while preserving capital and
maintaining liquidity, through investments in U.S. Treasury securities maturing
in one year or less.
Investments in the funds are neither insured nor guaranteed by the U.S.
government or any other entity. There can be no assurance that the money market
funds will maintain a constant net asset value of $1.00 per share.
Remember, as a shareholder of EuroPacific Growth Fund, whenever your objectives
change you can transfer some or all of your holdings to another fund in The
American Funds Group free of charge. Exchange privileges are subject to change
or termination.
THE AMERICAN FUNDS GROUP(R)
FUND SERVICES
These handy services can add convenience and flexibility to your American Funds
investments.
ADDING TO YOUR INVESTMENT
There are three ways you can group your American Funds purchases to qualify for
a quantity discount:
Right of accumulation: You can combine the value of your existing shares with
those you are purchasing to qualify for a discount.
Statement of Intention: You can, without obligation, use a Statement of
Intention that allows you to combine the value of your existing shares and the
purchases you intend to make over a 13-month period so you can take immediate
advantage of the maximum quantity discount available.
Concurrent purchases: By purchasing shares in more than one American Fund
simultaneously, you may qualify for a quantity discount.
(Shares of money market funds purchased directly do not apply to quantity
discounts. Additionally, certain accounts may not be eligible to be grouped.
See the fund's prospectus or your investment professional for more details.)
Subsequent investments by mail: Once your account has been established and
you've selected a broker/dealer, simply send a check for $50 or more, along
with the bottom portion of your account statement, to American Funds Service
Company.
PUTTING YOUR INVESTMENTS ON AUTOPILOT
Automatic investment plan: You can make automatic investments regularly by
authorizing American Funds Service Company to deduct a specified sum from your
bank account.
Automatic exchange plan: You can automatically exchange $50 or more between
funds on a regular basis.
Automatic withdrawal plan: You can arrange to have regular checks for specified
amounts sent to you or to anyone you designate in any month(s) you choose.
CHOOSING THE PAYOUT SYSTEM
THAT'S RIGHT FOR YOU
Automatic reinvestment: All dividends and capital gain distributions can be
automatically reinvested in additional fund shares without a sales charge.
Cross-reinvestment: You can reinvest dividends and/or capital gains from one
fund to another fund at no charge if you have a balance of at least $5,000 in
the originating fund or meet the minimum initial investment for the receiving
fund.
Dividends in cash: You can elect to take dividends in cash.
REPORTS YOU'LL RECEIVE FROM US
Confirmations of transactions: You will receive account statements reflecting
the transactions in your account.
Consolidated quarterly statements: If you have more than one account with the
American Funds, you can request a quarterly statement combining certain
accounts registered to the same individual.
Year-end tax reports: At the end of each year, you will receive an individual
report which shows the tax status of the distributions paid to you during the
year. In many instances, these reports can help you calculate taxes due on
shares sold by reporting average cost.
SPECIAL SERVICES
Exchange privileges: You can transfer some or all of your holdings into other
American Funds by mail or by phone. Certain restrictions apply (a sales charge
may apply if one has not already been paid), and it's important to remember
that an exchange constitutes a sale and purchase for tax purposes.
Telephone information service: American FundsLine(r) is a toll-free service
which gives you account information as well as current prices for all American
Funds. Just call 800/325-3590.
Safekeeping of certificates: Your shares are credited to your account and
certificates are not issued unless specifically requested. (Certificates are
not available for money market funds.)
Free check-writing withdrawal service: If you have a money market fund account,
this service enables you to write checks for $250 or more against the account.
The account continues to earn daily interest until checks clear the
fund's bank.
Retirement plans: A wide variety of plans is available.
FOR MORE COMPLETE INFORMATION ABOUT THESE SERVICES OR ABOUT ANY OF THE AMERICAN
FUNDS, INCLUDING CHARGES AND EXPENSES, PLEASE OBTAIN A PROSPECTUS FROM YOUR
SECURITIES DEALER OR FINANCIAL PLANNER, OR PHONE THE FUND'S TRANSFER AGENT,
AMERICAN FUNDS SERVICE COMPANY, AT 800/421-0180. PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE YOU INVEST OR SEND MONEY. THESE SERVICES ARE SUBJECT TO CHANGE
OR TERMINATION.
EUROPACIFIC GROWTH FUND
BOARD OF TRUSTEES
ELISABETH ALLISON
Cambridge, Massachusetts
Administrative Director, ANZI, Ltd.
(financial publishing and consulting);
publishing consultant,
Harvard Medical School
DAVID I. FISHER
Los Angeles, California
Chairman of the Board,
The Capital Group Companies, Inc.
ROBERT A. FOX
Livingston, California
President and Chief Executive Officer,
Foster Farms Inc.
ALAN GREENWAY
La Jolla, California
Private investor; President,
Greenway Associates, Inc.
(management consulting services)
WILLIAM R. GRIMSLEY
San Francisco, California
Senior Vice President and Director,
Capital Research and Management Company
KOICHI ITOH
Tokyo, Japan
Managing Partner,
VENCA Management (venture capital)
WILLIAM H. KLING
St. Paul, Minnesota
President, Minnesota Public Radio;
President, Greenspring Co.;
former President, American Public Radio
(now Public Radio International)
JOHN G. MCDONALD
Stanford, California
The IBJ Professor of Finance,
Graduate School of Business,
Stanford University
WILLIAM I. MILLER
Columbus, Indiana
Chairman of the Board,
Irwin Financial Corporation
DONALD E. PETERSEN
Birmingham, Michigan
Retired; former Chairman of the Board
and Chief Executive Officer,
Ford Motor Company
WALTER P. STERN
New York, New York
Chairman of the Board of the fund
Chairman of the Board,
Capital Group International, Inc.
THIERRY VANDEVENTER
Geneva, Switzerland
President of the fund
Chairman of the Board,
Capital Research Company
OTHER OFFICERS
STEPHEN E. BEPLER
New York, New York
Executive Vice President of the fund
Senior Vice President and Director,
Capital Research Company
MARK E. DENNING
London, England
Vice President of the fund
Senior Vice President,
Capital Research Company
JANET A. MCKINLEY
New York, New York
Vice President of the fund
Senior Vice President,
Capital Research Company
VINCENT P. CORTI
Los Angeles, California
Secretary of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
STEVEN N. KEARSLEY
Brea, California
Treasurer of the fund
Vice President and Treasurer,
Capital Research and Management Company
R. MARCIA GOULD
Brea, California
Assistant Treasurer of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
MARY C. HALL
Brea, California
Assistant Treasurer of the fund
Senior Vice President -
Fund Business Management Group,
Capital Research and Management Company
OFFICES OF THE FUND AND OF THE INVESTMENT ADVISER,
CAPITAL RESEARCH AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2889
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
400 South Hope Street
Los Angeles, California 90071-2889
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
This report is for the information of shareholders of EuroPacific Growth Fund,
but it may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details about charges, expenses, investment
objectives and operating policies of the fund. If used as sales material after
June 30, 1996, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Litho in USA BDA/AL/2954
Lit. No. EUPAC-011-0596
Printed on recycled paper
The American Funds Group(r)
