<PAGE>
EUROPACIFIC GROWTH FUND
333 South Hope Street
Los Angeles, California 90071
The fund's investment objective
is to achieve long-term growth of
capital by investing in
securities of issuers domiciled
outside the U.S. Normally, the
fund seeks to achieve this
investment objective by investing
primarily in equity securities of
issuers domiciled in Europe or
the Pacific Basin.
This prospectus presents
information you should know
before investing in the fund. It
should be retained for future
reference.
You may obtain the statement of
additional information, dated
June 1, 1996, which contains the
fund's financial statements,
without charge, by writing to the
Secretary of the fund at the
above address or telephoning
800/421-0180. These requests will
be honored within three business
days of receipt.
SHARES OF THE FUND 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.
THE PURCHASE OF FUND SHARES
INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COM-
MISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADE-
QUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
16-010-0696
June 1, 1996
<PAGE>
TABLE OF CONTENTS
Summary of Expenses............3
Financial Highlights...........4
Investment Objective and
Policies.......................4
Investing Around the World ....6
Investment Results.............8
Dividends, Distributions and
Taxes..........................8
Fund Organization and
Management.....................9
The American FundsShareholder
Guide.....................12-20
Purchasing Shares............12
Reducing Your Sales Charge...15
Shareholder Services.........16
Redeeming Shares.............18
Retirement Plans.............20
IMPORTANT PHONE NUMBERS
Shareholder
Services:...800/421-0180 ext. 1
Dealer
Services:..800/421-9900 ext. 11
American
FundsLine(R).......800/325-3590
(24-hour information)
<PAGE>
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SUMMARY OF This table is designed to help you understand costs of
EXPENSES investing in the fund. These are historical expenses;
your actual expenses may vary.
Average annual
expenses paid over SHAREHOLDER TRANSACTION EXPENSES
a 10-year period Maximum sales charge on purchases
would be (as a percentage of offering price)........... 5.75%/1/
approximately $17
per year, assuming The fund has no sales charge on reinvested dividends,
a $1,000 deferred sales charge,/2/ redemption fees or exchange
investment and a fees.
5% annual return
with a maximum
sales charge. ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fees................................ 0.49%
12b-1 expenses................................. 0.24%/3/
Other expenses (including audit, legal,
shareholder services, transfer agent and
custodian expenses)........................... 0.22%
Total fund operating expenses.................. 0.95%
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the
following cumulative
expenses on a $1,000
investment, assuming a
5% annual return./4/ $67 $86 $107 $167
</TABLE>
/1/ Sales charges are reduced for certain large
purchases. (See "The American Funds Shareholder
Guide: Purchasing Shares--Sales Charges.")
/2/ Any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of
the Internal Revenue Code including a "401(k)" plan
with 200 or more eligible employees or any other
purchaser investing at least $1 million in shares of
the fund (or in combination with shares of other
funds in The American Funds Group other than the
money market funds) may purchase shares at net asset
value; however, a contingent deferred sales charge
of 1% applies on certain redemptions made within 12
months following such purchases. (See "The American
Funds Shareholder Guide: Redeeming Shares--
Contingent Deferred Sales Charge.")
/3/ These expenses may not exceed 0.25% of the fund's
average net assets annually. (See "Fund Organization
and Management--Plan of Distribution.") Due to these
distribution expenses, long-term shareholders may
pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National
Association of Securities Dealers.
/4/ Use of this assumed 5% return is required by the
Securities and Exchange Commission; it is not an
illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL
EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
3
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FINANCIAL The following information has been audited by Price
HIGHLIGHTS Waterhouse LLP, independent accountants, whose
(For a share unqualified report covering each of the most recent
outstanding five years is included in the statement of additional
throughout the information. This information should be read in
fiscal year) conjunction with the financial statements and
accompanying notes which appear in the statement of
additional information.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31 /1/
----------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------- ------ ------- ------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year............................ $ 20.89 $21.95 $17.64 $16.64 $15.18 $14.39 $13.38 $12.64 $13.46 $11.07
------- ------ ------- ------- ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........... .46 .35 .24 .22 .28 .28 .25 .23 .23 .15
Net realized and unrealized gain
(loss) on investments.......... 3.63 (.19) 4.37 1.04 1.48 1.02 1.95 1.54 .63 2.95
------- ------ ------- ------- ------ ------ ------ ------ ------ ------
Total income from investment
operations..................... 4.09 .16 4.61 1.26 1.76 1.30 2.20 1.77 .86 3.10
------- ------ ------- ------- ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment
income......................... (.49) (.317) (.187) (.222) (.30) (.33) (.28) (.18) (.33) (.09)
Dividends from net realized non-
U.S. currency gains/2/......... -- (.003) (.043) (.038) -- -- -- -- -- --
Distributions from net realized
gains.......................... (.21) (.90) (.07) -- -- (.18) (.91) (.85) (1.35) (.62)
------- ------ ------- ------- ------ ------ ------ ------ ------ ------
Total distributions............. (.70) (1.22) (.30) (.26) (.30) (.51) (1.19) (1.03) (1.68) (.71)
------- ------ ------- ------- ------ ------ ------ ------ ------ ------
Net Asset Value, End of Year..... $ 24.28 $20.89 $21.95 $17.64 $16.64 $15.18 $14.39 $13.38 $12.64 $13.46
======= ====== ======= ======= ====== ====== ====== ====== ====== ======
Total Return/3/................. 19.84% .71% 26.27% 7.69% 11.71% 9.11% 16.99% 14.69% 8.12% 29.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in mil-
lions)......................... $12,335 $8,588 $ 6,429 $ 2,992 $1,933 $1,138 $ 584 $ 228 $ 188 $ 218
Ratio of expenses to average net
assets......................... .95% .97% .99% 1.10% 1.24% 1.28% 1.24% 1.30% 1.21% 1.27%
Ratio of net income to average
net assets..................... 2.09% 1.80% 1.13% 1.40% 1.85% 2.23% 2.29% 1.87% 1.56% 1.63%
Portfolio turnover rate......... 21.77% 16.02% 21.37% 10.35% 9.65% 8.58% 25.82% 35.47% 28.90% 22.13%
</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.
INVESTMENT The fund's investment objective is to achieve long-term
OBJECTIVE AND growth of capital by investing in securities of issuers
POLICIES domiciled outside the U.S. Under normal market
conditions, the fund seeks to achieve this investment
The fund's goal is objective by investing primarily (at least 65% of its
to provide you assets) in equity securities of issuers domiciled in
with long-term Europe or the Pacific Basin. The Pacific Basin is
growth of capital generally defined as those countries bordering the
by investing in Pacific Ocean and includes, but is not limited to,
securities of Australia, Canada, Japan, Malaysia, and Singapore. (In
issuers domiciled determining the domicile of an issuer, the fund's
outside the U.S. investment adviser, Capital Research and Management
Company, has the discretion to give prevailing weight
to one or more factors which may include where the
issuer is legally organized, where it maintains its
principal corporate offices and where it conducts its
principal operations.) The assets of the fund will be
invested with geographic
4
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flexibility; accordingly, investments may be made from
time to time in issuers domiciled in, or governments
of, developing countries. The fund's investment adviser
currently does not intend to invest more than 20% of
the fund's total assets (taken at cost) in securities
of issuers domiciled in, or governments of, developing
countries. See "Investing Around the World--
Opportunities, Risks and Costs" and the statement of
additional information.
The fund may also invest in securities through
depositary receipts which may be denominated in various
currencies. For example, the fund may purchase American
Depositary Receipts which are U.S. dollar denominated
securities designed for use in the U.S. securities
markets and which represent and may be converted to the
underlying security.
The fund may also invest in securities convertible into
common stocks, straight debt securities (generally
rated in the top three quality categories by Moody's
Investors Service, Inc. or Standard & Poor's
Corporation, or determined to be of equivalent quality
by Capital Research and Management Company), government
securities, or nonconvertible preferred stocks. In
addition, up to 5% of the fund's assets may be invested
in lower rated straight debt securities (including
securities commonly referred to as "junk" or "high-
yield, high-risk" bonds) or in unrated securities that
are determined to be of equivalent quality. High-yield,
high-risk bonds carry a higher degree of investment
risk and are considered speculative. For example, bonds
rated Ca or CC are described as "speculative in a high
degree; often in default or hav[ing] other marked
shortcomings." These securities will also be issued by
non-U.S. entities. The fund may hold a portion of its
assets in U.S. dollars and other currencies and in cash
equivalents of either U.S. or non-U.S. issuers. (See
the statement of additional information for a
description of cash equivalents.)
The fund's investment restrictions (which are described
in the statement of additional information) and
objective cannot be changed without shareholder
approval. All other investment practices may be changed
by the board of trustees.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES AND THE SPECIAL RISKS ASSOCIATED WITH
INVESTING OUTSIDE THE U.S. DESCRIBED HEREIN.
5
<PAGE>
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INVESTING AROUND OPPORTUNITIES, RISKS AND COSTS The fund's assets are
THE WORLD invested in securities of issuers domiciled outside the
United States which, in the opinion of Capital Research
Investing outside and Management Company, enhances the fund's ability to
the U.S. involves meet its objective of long-term growth of capital.
expanded
opportunities, Of course, investing outside the U.S. involves special
special risks and risks, particularly in certain developing countries,
increased costs. caused by, among other things: fluctuating currency
values; different accounting, auditing, and financial
reporting regulations and practices in some countries;
changing local and regional economic, political, and
social conditions; greater market volatility; differing
securities market structures; and various adminis-
trative difficulties such as delays in clearing and
settling portfolio transactions or in receiving payment
of dividends. However, in the opinion of Capital
Research and Management Company, investing outside the
U.S. also can reduce certain portfolio risks due to
greater diversification opportunities.
Additional costs could be incurred in connection with
the fund's investment activities outside the U.S.
Brokerage commissions may be higher outside the U.S.,
and the fund will bear certain expenses in connection
with its currency transactions. Furthermore, increased
custodian costs may be associated with the maintenance
of assets in certain jurisdictions.
CURRENCY TRANSACTIONS The fund has the ability to
purchase and sell currencies to facilitate securities
transactions and to enter into forward currency
contracts to hedge against changes in currency exchange
rates. While entering into forward transactions could
minimize the risk of loss due to a decline in the value
of the hedged currency, it could also limit any
potential gain which might result from an increase in
the value of the currency. (See "Investment Policies--
Currency Transactions," in the statement of additional
information.)
RULE 144A SECURITIES Normally, securities acquired in
U.S. private placements are subject to contractual re-
strictions on resale and may not be resold except pur-
suant to a registration statement under the Securities
Act of 1933 or in reliance upon an exemption from the
registration requirements under that Act, such as pri-
vate placements under Rule 144A, accordingly, any such
security will be deemed illiquid (unless determined to
be liquid in accordance with procedures which may be
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 restricted securities;
however, non-U.S. securities that can be freely traded
in a securities market outside the U.S. are excluded
from this limitation.
6
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MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic
investment philosophy of Capital Research and
Management Company is to seek fundamental values at
reasonable prices, using a system of multiple portfolio
counselors in managing mutual fund assets. Under this
system the portfolio of the fund is divided into
segments which are managed by individual counselors.
Counselors decide how their respective segments will be
invested (within the limits provided by the fund's
objectives and policies and by Capital Research and
Management Company's investment committee). In
addition, Capital Research and Management Company's
research professionals make investment decisions with
respect to a portion of the fund's portfolio. The
primary individual portfolio counselors for the fund
are listed below.
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE
AS
INVESTMENT PROFESSIONAL
(APPROXIMATE)
YEARS OF EXPERIENCE AS
PORTFOLIO COUNSELOR WITH CAPITAL
(AND RESEARCH RESEARCH AND
PORTFOLIO PROFESSIONAL, IF MANAGEMENT
COUNSELORS FOR APPLICABLE) FOR COMPANY OR
EUROPACIFIC GROWTH EUROPACIFIC GROWTH ITS TOTAL
FUND PRIMARY TITLE(S) FUND (APPROXIMATE) AFFILIATES YEARS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thierry Vandeventer Trustee and President Since the fund began 33 years 33 years
of the fund. Chairman operations in 1984
of the Board, Capital
Research Company*
- -------------------------------------------------------------------------------------------------------
Stephen E. Bepler Executive Vice Since the fund began 24 years 30 years
President of the operations
fund. Senior Vice in 1984
President and
Director, Capital
Research Company*
- -------------------------------------------------------------------------------------------------------
Mark E. Denning Executive Vice 5 years (in addition 14 years 14 years
President of the to 3 years as a
fund. Senior Vice research professional
President, Capital prior to becoming a
Research Company* portfolio counselor
for the fund)
- -------------------------------------------------------------------------------------------------------
Robert W. Lovelace Vice President of the 2 years (in addition 11 years 11 years
fund. Executive Vice to 7 years as a
President, Capital research professional
Research Company* prior to becoming a
portfolio counselor
for the fund)
- -------------------------------------------------------------------------------------------------------
Janet A. McKinley Vice President of the 6 years (in addition 14 years 20 years
fund. Senior Vice to 5 years as a
President, Capital research professional
Research Company* prior to becoming a
portfolio counselor
for the fund)
- -------------------------------------------------------------------------------------------------------
Martial Chaillet Senior Vice 2 years (in addition 24 years 24 years
President, Capital to 5 years as a
Research Company* research professional
prior to becoming a
portfolio counselor
for the fund)
- -------------------------------------------------------------------------------------------------------
* COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
- -------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
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INVESTMENT RESULTS The fund may from time to time compare its investment
results to various unmanaged indices or other mutual
The fund has funds in reports to shareholders, sales literature and
averaged a total advertisements. The results may be calculated on a
return of 15.76% a total return, yield and/or distribution rate basis for
year (assuming the various periods, with or without sales charges. Results
maximum sales calculated without a sales charge will be higher. Total
charge was paid) returns assume the reinvestment of all dividends and
over its lifetime capital gain distributions.
(April 16, 1984
through March 31, The fund's distribution rate is calculated by dividing
1996). the dividends paid by the fund over the last 12 months
by the sum of the month-end price and the capital gains
paid over the last 12 months. The SEC yield reflects
income the fund expects to earn based on its current
portfolio of securities, while the distribution rate is
based solely on the fund's past dividends. Accordingly,
the fund's SEC yield and distribution rate may differ.
The fund's total return over the past 12 months and
average annual total returns over the past five-year
and ten-year periods as of March 31, 1996, were 12.98%,
11.56% and 13.44%, respectively. These results were
calculated in accordance with Securities and Exchange
Commission rules which require that the maximum sales
charge be deducted. Of course, past results are not an
indication of future results. Further information
regarding the fund's investment results is contained in
the fund's annual report which may be obtained without
charge by writing to the Secretary of the fund at the
address indicated on the cover of this prospectus.
DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS AND in June and December. All capital gains, if any, are
TAXES distributed annually, usually in December. When a
dividend or capital gain is distributed, the net asset
Income value per share is reduced by the amount of the
distributions are payment.
usually made in
June and December. FEDERAL TAXES The fund intends to operate as a
"regulated investment company" under the Internal
Revenue Code. In any fiscal year in which the fund so
qualifies and distributes to shareholders all of its
net investment income and net capital gains, the fund
itself is relieved of federal income tax.
All dividends and capital gains are taxable whether
they are reinvested or received in cash--unless you are
exempt from taxation or entitled to tax deferral. Early
each year, you will be notified as to the amount and
federal tax status of all dividends and capital gains
paid during the prior year. Such dividends and capital
gains may also be subject to state or local taxes.
IF YOU HAVE NOT FURNISHED A CERTIFIED CORRECT TAXPAYER
IDENTIFICATION NUMBER (GENERALLY YOUR SOCIAL SECURITY
NUMBER) AND HAVE NOT CERTIFIED THAT WITHHOLDING DOES
NOT APPLY, OR IF THE INTERNAL REVENUE SERVICE HAS
NOTIFIED THE FUND THAT THE TAXPAYER IDENTIFICATION
NUMBER LISTED ON YOUR ACCOUNT IS INCORRECT ACCORDING TO
THEIR RECORDS OR THAT YOU ARE SUBJECT TO BACKUP
WITHHOLDING, FEDERAL LAW GENERALLY REQUIRES THE FUND TO
WITHHOLD 31% FROM ANY DIVIDENDS AND/OR REDEMPTIONS
(INCLUDING EXCHANGE REDEMPTIONS). Amounts withheld
8
<PAGE>
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are applied to your federal tax liability; a refund may
be obtained from the Service if withholding results in
overpayment of taxes. Federal law also requires the
fund to withhold 30% or the applicable tax treaty rate
from dividends paid to certain nonresident alien, non-
U.S. partnership and non-U.S. corporation shareholder
accounts.
The fund may be required to pay withholding and other
taxes imposed by various countries in connection with
its investments outside the U.S., generally at rates
from 10% to 40%, which would reduce the fund's
investment income.
This is a brief summary of some of the tax laws that
affect your investment in the fund. Please see the
statement of additional information and your tax
adviser for further information.
FUND ORGANIZATION FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
AND MANAGEMENT end diversified management investment company, was
organized as a Massachusetts business trust in 1983.
The fund is a The fund's board supervises fund operations and
member of The performs duties required by applicable state and
American Funds federal law. Members of the board who are not employed
Group, which is by Capital Research and Management Company or its
managed by one of affiliates are paid certain fees for services rendered
the largest and to the fund as described in the statement of additional
most experienced information. They may elect to defer all or a portion
investment of these fees through a deferred compensation plan in
advisers. effect for the fund. All shareholders have one vote per
share owned, and at the request of holders of at least
10% of the shares, the fund will hold a meeting at
which any member of the board could be removed and a
successor elected. There will not usually be a
shareholder meeting in any year except, for example,
when the election of the board is required to be acted
upon by shareholders under the Investment Company Act
of 1940.
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los
Angeles, CA 90071 and at 135 South State College
Boulevard, Brea, CA 92621. (See "The American Funds
Shareholder Guide: Purchasing Shares--Investment
Minimums and Fund Numbers" for a listing of funds in
The American Funds Group.) Capital Research and
Management Company manages the investment portfolio and
business affairs of the fund and receives a fee at the
annual rate of 0.69% on the first $500 million of the
fund's average net assets, plus 0.59% on such assets in
excess of $500 million to $1 billion, plus 0.53% on
such assets in excess of $1 billion to $1.5 billion,
plus 0.50% on such assets in excess of $1.5 billion to
$2.5 billion, plus 0.48% on such assets in excess of
$2.5 billion to $4 billion, plus 0.47% on such assets
in excess of $4 billion to
9
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$6.5 billion, plus 0.465% on such assets in excess of
$6.5 billion to $10.5 billion, plus 0.462% on such
assets in excess of $10.5 billion.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
Capital Research and Management Company and its
affiliated companies have adopted a personal investing
policy that is consistent with the recommendations
contained in the report dated May 9, 1994 issued by the
Investment Company Institute's Advisory Group on
Personal Investing. (See the statement of additional
information.) This policy has also been incorporated
into the fund's "code of ethics" which is available
from the fund's Secretary upon request.
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter
market, purchases and sales are transacted directly
with principal market-makers except in those
circumstances where it appears better prices and
executions are available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers who have
sold shares of the fund or have provided investment
research, statistical, and other related services for
the benefit of the fund and/or of other funds served by
Capital Research and Management Company.
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors is located
at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92621, 8000 IH-
10 West, San Antonio, TX 78230, 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 46240 and 5300 Robin Hood
Road, Norfolk, VA 23513. Telephone conversations with
American Funds Distributors may be recorded or
monitored for verification, recordkeeping and quality
assurance purposes.
PLAN OF DISTRIBUTION The fund has a plan of
distribution or "12b-1 Plan" under which it may finance
activities primarily intended to sell shares, provided
the categories of expenses are approved in advance by
the board and the expenses paid under the plan were
incurred within
10
<PAGE>
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the last 12 months and accrued while the plan is in
effect. Expenditures by the fund under the plan may not
exceed 0.25% of its average net assets annually (all of
which may be for service fees). See "The American Funds
Shareholder Guide: Purchasing Shares--Sales Charges"
below.
TRANSFER AGENT American Funds Service Company, a wholly
owned subsidiary of Capital Research and Management
Company, is the fund's transfer agent and performs
shareholder service functions. It was paid a fee of
$11,473,000 for the fiscal year ended March 31, 1996.
Telephone conversations with American Funds Service
Company may be recorded or monitored for verification,
recordkeeping and quality assurance purposes.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
ADDRESS AREAS SERVED
--------------------------------------------------------
WEST P.O. Box 2205 Brea, AK, AZ, CA, HI, ID,
CA 92622-2205 MT, NV, OR, UT, WA and
Fax: 714/671-7080 outside the U.S.
--------------------------------------------------------
CENTRAL- P.O. Box 659522 AR, CO, IA, KS, LA,
WEST San Antonio, MN, MO, ND, NE, NM,
TX 78265-9522 OK, SD, TX, and WY
Fax: 210/530-4050
--------------------------------------------------------
CENTRAL- P.O. Box 6007 AL, IL, IN, KY, MI,
EAST Indianapolis, MS, OH, TN and WI
IN 46206-6007
Fax: 317/735-6620
--------------------------------------------------------
EAST P.O. Box 2280 CT, DE, FL, GA, MA,
Norfolk, MD, ME, NC, NH, NJ,
VA 23501-2280 NY, PA, RI, SC, VA,
Fax: 804/670-4773 VT, WV and Washington,
D.C.
--------------------------------------------------------
ALL SHAREHOLDERS MAY CALL AMERICAN FUNDS SERVICE
COMPANY AT 800/421-0180 FOR SERVICE.
--------------------------------------------------------
[MAP]
--------------------------------------------------------
West (light grey); Central-West (white); Central-East
(dark grey); East (red)
11
<PAGE>
THE AMERICAN FUNDS SHAREHOLDER GUIDE
PURCHASING SHARES METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
---------------------------------------------------------
Your investment See "Investment $50 minimum (except
dealer can help Minimums and Fund where a lower
you establish your Numbers" for minimum is noted
account--and help initial under "Investment
you add to it investment Minimums and Fund
whenever you like. minimums. Numbers").
--------------------------------------------------------
By con- Visit any Mail directly to
tacting investment dealer your investment
your in- who is registered dealer's address
vestment in the state printed on your
dealer where the pur- account statement.
chase is made and
who has a sales
agreement with
American Funds
Distributors.
---------------------------------------------------------
By mail Make your check Fill out the account
payable to the additions form at the
fund and mail to bottom of a recent
the address account statement,
indicated on the make your check pay-
account able to the fund,
application. write your account
Please indicate number on your check,
an investment and mail the check
dealer on the and form in the enve-
account lope provided with
application. your account statement.
---------------------------------------------------------
By Please contact Complete the "Invest-
telephone your investment ments by Phone"
dealer to open section on the ac-
account, then count application or
follow the American FundsLink
procedures for Authorization Form.
additional Once you establish
investments. the privilege, you,
your financial advi-
sor or any person
with your account in-
formation can call
American FundsLine(R)
and make investments
by telephone (subject
to conditions noted
in "Telephone Pur-
chases, Redemptions
and Exchanges" below)
---------------------------------------------------------
By wire Call 800/421-0180 Your bank should wire
to obtain your your additional
account investments in the
number(s), if same manner as
necessary. Please described under
indicate an "Initial Investment."
investment dealer
on the account.
Instruct your
bank to wire
funds to:
Wells Fargo Bank
155 Fifth Street,
Sixth Floor
San Francisco,
CA 94106
(ABA #121000248)
For credit to the
account of:
American Funds
Service Company
a/c #4600-076178
(fund name)
(your fund acct.
no.)
---------------------------------------------------------
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE
THE RIGHT TO REJECT ANY PURCHASE ORDER.
SHARE PRICE Shares are purchased at the offering price
next determined after the order is received by the fund
or American Funds Service Company. This price is the net
asset value plus a sales charge, if applicable. In the
case of orders sent directly to the fund or American
Funds Service Company, an investment dealer MUST be in-
dicated. Dealers are responsible for promptly transmit-
ting orders. (See the statement of additional informa-
tion under "Purchase of Shares--Price of Shares.")
The net asset value per share is determined as of the
close of trading (currently 4:00 p.m., New York time) on
each day the New York Stock Exchange is open. The
current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share. The net asset value
per share of the money market funds normally will remain
constant at $1.00 based on the funds' current practice
of valuing their shares using the penny-rounding method
in accordance with rules of the Securities and Exchange
Commission.
12
<PAGE>
- -------------------------------------------------------------------------------
SHARE CERTIFICATES Shares are credited to your account
and certificates are not issued unless specifically
requested. This eliminates the costly problem of lost
or destroyed certificates.
If you would like certificates issued, please request
them by writing to American Funds Service Company.
There is usually no charge for issuing certificates in
reasonable denominations. CERTIFICATES ARE NOT AVAIL-
ABLE FOR THE MONEY MARKET FUNDS.
INVESTMENT MINIMUMS AND FUND NUMBERS Here are the
minimum initial investments required by the funds in
The American Funds Group along with fund numbers for
use with our automated phone line, American
FundsLine(R) (see description below):
<TABLE>
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
- ---- ---------- ------
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund(R)........................................... $1,000 02
American Balanced Fund(R)............................... 500 11
American Mutual Fund(R)................................. 250 03
Capital Income Builder(R)............................... 1,000 12
Capital World Growth and Income Fund(SM)................ 1,000 33
EuroPacific Growth Fund(R).............................. 250 16
Fundamental Investors(SM)............................... 250 10
The Growth Fund of America(R)........................... 1,000 05
The Income Fund of America(R)........................... 1,000 06
The Investment Company of America(R).................... 250 04
The New Economy Fund(R)................................. 1,000 14
New Perspective Fund(R)................................. 250 07
SMALLCAP World Fund(SM)................................. 1,000 35
Washington Mutual Investors Fund(SM).................... 250 01
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
- ---- ---------- ------
<S> <C> <C>
BOND FUNDS
American High-Income Municipal Bond Fund(SM)............ $1,000 40
American High-Income Trust(R)........................... 1,000 21
The Bond Fund of America(SM)............................ 1,000 08
Capital World Bond Fund(R).............................. 1,000 31
Intermediate Bond Fund of America(R).................... 1,000 23
Limited Term Tax-Exempt Bond Fund of America(SM)........ 1,000 43
The Tax-Exempt Bond Fund of America(SM)................. 1,000 19
The Tax-Exempt Fund of California(R)*................... 1,000 20
The Tax-Exempt Fund of Maryland(R)*..................... 1,000 24
The Tax-Exempt Fund of Virginia(R)*..................... 1,000 25
U.S. Government Securities Fund(SM)..................... 1,000 22
MONEY MARKET FUNDS
The Cash Management Trust of America(R)................. 2,500 09
The Tax-Exempt Money Fund of America(SM)................ 2,500 39
The U.S. Treasury Money Fund of America(SM)............. 2,500 49
</TABLE>
--------
*Available only in certain states.
For retirement plan investments, the minimum is $250,
except that the money market funds have a minimum of
$1,000 for individual retirement accounts (IRAs). Mini-
mums are reduced to $50 for purchases through "Auto-
matic Investment Plans" (except for the money market
funds) or to $25 for purchases by retirement plans
through payroll deductions and may be reduced or waived
for shareholders of other funds in The American Funds
Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS RETIREMENT
PLAN INVESTMENTS. The minimum is $50 for additional in-
vestments (except as noted above).
SALES CHARGES The sales charges you pay when purchasing
the stock, stock/bond, and bond funds of The American
Funds Group are set forth below. The money market funds
of The American Funds Group are offered at net asset
value. (See "Investment Minimums and Fund Numbers" for
a listing of the funds.)
13
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEALER
SALES CHARGE AS CONCESSION
PERCENTAGE OF THE: AS PERCENTAGE
------------------ OF THE
AMOUNT OF PURCHASE NET AMOUNT OFFERING OFFERING
AT THE OFFERING PRICE INVESTED PRICE PRICE
- --------------------- ---------- -------- -------------
<S> <C> <C> <C>
STOCK AND STOCK/BOND FUNDS
Less than $50,000................. 6.10% 5.75% 5.00%
$50,000 but less than $100,000.... 4.71 4.50 3.75
BOND FUNDS
Less than $25,000................. 4.99 4.75 4.00
$25,000 but less than $50,000..... 4.71 4.50 3.75
$50,000 but less than $100,000.... 4.17 4.00 3.25
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000... 3.63 3.50 2.75
$250,000 but less than $500,000... 2.56 2.50 2.00
$500,000 but less than $1,000,000. 2.04 2.00 1.60
$1,000,000 or more................ none none (see below)
</TABLE>
Commissions of up to 1% will be paid to dealers who
initiate and are responsible for purchases of $1
million or more, for purchases by any employer-
sponsored 403(b) plan or defined contribution plan
qualified under Section 401(a) of the Internal Revenue
Code, including a "401(k)" plan with 200 or more
eligible employees (paid pursuant to the fund's plan of
distribution), and for purchases made at net asset
value by certain retirement plans of organizations with
collective retirement plan assets of $100 million or
more as set forth in the statement of additional
information (paid by American Funds Distributors).
American Funds Distributors, at its expense (from a
designated percentage of its income), will, during
calendar year 1996, provide additional compensation to
dealers. Currently these payments are limited to the
top 100 dealers who have sold shares of the fund or
other funds in The American Funds Group. These payments
will be based on a pro rata share of a qualifying
dealer's sales. American Funds Distributors will, on an
annual basis, determine the advisability of continuing
these payments.
Any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees or any other purchaser
investing at least $1 million in shares of the fund (or
in combination with shares of other funds in The
American Funds Group other than the money market funds)
may purchase shares at net asset value; however, a
contingent deferred sales charge of 1% is imposed on
certain redemptions made within 12 months of the
purchase. (See "Redeeming Shares--Contingent Deferred
Sales Charge.")
Qualified dealers currently are paid a continuing
service fee not to exceed 0.25% of average net assets
(0.15% in the case of the money market funds) annually
in order to promote selling efforts and to
14
<PAGE>
- -------------------------------------------------------------------------------
compensate them for providing certain services. (See
"Fund Organization and Management--Plan of
Distribution.") These services include processing
purchase and redemption transactions, establishing
shareholder accounts and providing certain information
and assistance with respect to the fund.
NET ASSET VALUE PURCHASES The stock, stock/bond and
bond funds may sell shares at net asset value to: (1)
current or retired directors, trustees, officers and
advisory board members of the funds managed by Capital
Research and Management Company, employees of
Washington Management Corporation, employees and
partners of The Capital Group Companies, Inc. and its
affiliated companies, certain family members of the
above persons, and trusts or plans primarily for such
persons; (2) current registered representatives,
retired registered representatives with respect to
accounts established while active, or full-time
employees (and their spouses, parents, and children) of
dealers who have sales agreements with American Funds
Distributors (or who clear transactions through such
dealers) and plans for such persons or the dealers; (3)
companies exchanging securities with the fund through a
merger, acquisition or exchange offer; (4) trustees or
other fiduciaries purchasing shares for certain
retirement plans of organizations with retirement plan
assets of $100 million or more; (5) insurance company
separate accounts; (6) accounts managed by subsidiaries
of The Capital Group Companies, Inc.; and (7) The
Capital Group Companies, Inc., its affiliated companies
and Washington Management Corporation. Shares are
offered at net asset value to these persons and
organizations due to anticipated economies in sales
effort and expense.
REDUCING AGGREGATION Sales charge discounts are available for
YOUR SALES certain aggregated investments. Qualifying investments
CHARGE include those by you, your spouse and your children
under the age of 21, if all parties are purchasing
You and your shares for their own account(s), which may include
immediate family purchases through employee benefit plan(s) such as an
may combine IRA, individual-type 403(b) plan or single-participant
investments to Keogh-type plan or by a business solely controlled by
reduce your costs. these individuals (for example, the individuals own the
entire business) or by a trust (or other fiduciary
arrangement) solely for the benefit of these
individuals. Individual purchases by a trustee(s) or
other fiduciary(ies) may also be aggregated if the
investments are (1) for a single trust estate or
fiduciary account, including an employee benefit plan
other than those described above or (2) made for two or
more employee benefit plans of a single employer or of
affiliated employers as defined in the Investment
Company Act of 1940, again excluding employee benefit
plans described above, or (3) for a diversified common
trust fund or other diversified pooled account not
specifically formed for the purpose of accumulating
fund shares. Purchases made for nominee or street name
accounts (securities held in the name of an investment
dealer or another nominee such as a bank trust
department instead of the customer) may not be
aggregated with those made for
15
<PAGE>
- -------------------------------------------------------------------------------
other accounts and may not be aggregated with other
nominee or street name accounts unless otherwise
qualified as described above.
CONCURRENT PURCHASES To qualify for a reduced sales
charge, you may combine concurrent purchases of two or
more funds in The American Funds Group, except direct
purchases of the money market funds. (Shares of the
money market funds purchased through an exchange,
reinvestment or cross-reinvestment from a fund having a
sales charge do qualify.) For example, if you
concurrently invest $25,000 in one fund and $25,000 in
another, the sales charge would be reduced to reflect a
$50,000 purchase.
RIGHT OF ACCUMULATION The sales charge for your invest-
ment may also be reduced by taking into account the
current value of your existing holdings in The American
Funds Group. Direct purchases of the money market funds
are excluded. (See account application.)
STATEMENT OF INTENTION You may reduce sales charges on
all investments by meeting the terms of a statement of
intention, a non-binding commitment to invest a certain
amount in fund shares subject to a commission within a
13-month period. Five percent of the statement amount
will be held in escrow to cover additional sales
charges which may be due if your total investments over
the statement period are insufficient to qualify for a
sales charge reduction. (See account application and
the statement of additional information under "Purchase
of Shares--Statement of Intention.")
YOU MUST LET YOUR INVESTMENT DEALER OR AMERICAN FUNDS
SERVICE COMPANY KNOW IF YOU QUALIFY FOR A REDUCTION IN
YOUR SALES CHARGE USING ONE OR ANY COMBINATION OF THE
METHODS DESCRIBED ABOVE.
SHAREHOLDER AUTOMATIC INVESTMENT PLAN You may make regular invest-
SERVICES ments through automatic charges to your bank account.
Once a plan is established, your account will be
The fund offers charged on or about the dates you select.
you a valuable
array of services AUTOMATIC REINVESTMENT Dividends and capital gain dis-
designed to tributions are reinvested in additional shares at no
increase the sales charge unless you indicate otherwise on the
convenience and account application. You also may elect to have divi-
flexibility of dends and/or capital gain distributions paid in cash by
your investment-- informing the fund, American Funds Service Company or
services you can your investment dealer.
use to alter your
investment program CROSS-REINVESTMENT You may cross-reinvest dividends or
as your needs and dividends and capital gain distributions paid by one
circumstances fund into another fund in The American Funds Group,
change. subject to conditions outlined in the statement of ad-
ditional information. Generally, to use this service
the value of your account in the paying fund must equal
at least $5,000.
EXCHANGE PRIVILEGE You may exchange shares into other
funds in The American Funds Group. Exchange purchases
are subject to the minimum investment requirements of
the fund purchased and no sales
16
<PAGE>
- -------------------------------------------------------------------------------
charge generally applies. However, exchanges of shares
from the money market funds are subject to applicable
sales charges on the fund being purchased, unless the
money market fund shares were acquired by an exchange
from a fund having a sales charge, or by reinvestment
or cross-reinvestment of dividends or capital gain
distributions.
You may exchange shares by writing to American Funds
Service Company (see "Redeeming Shares"), by contacting
your investment dealer, by using American FundsLine(R)
(see "Shareholder Services--American FundsLine(R)" be-
low), or by telephoning 800/421-0180 toll-free, faxing
(see "Transfer Agent" above for the appropriate fax
numbers) or telegraphing American Funds Service Compa-
ny. (See "Telephone Purchases, Redemptions and Ex-
changes" below.) Shares held in corporate-type retire-
ment plans for which Capital Guardian Trust Company
serves as trustee may not be exchanged by telephone,
fax or telegraph. Exchange redemptions and purchases
are processed simultaneously at the share prices next
determined after the exchange order is received. (See
"Purchasing Shares--Share Price.") THESE TRANSACTIONS
HAVE THE SAME TAX CONSEQUENCES AS ORDINARY SALES AND
PURCHASES.
AUTOMATIC EXCHANGES You may automatically exchange
shares (in amounts of $50 or more) among any of the
funds in The American Funds Group on any day (or pre-
ceding business day if the day falls on a non-business
day) of each month you designate. You must either meet
the minimum initial investment requirement for the re-
ceiving fund OR the originating fund's balance must be
at least $5,000 and the receiving fund's minimum must
be met within one year.
AUTOMATIC WITHDRAWALS You may make automatic
withdrawals (through electronic credits to your bank
account or by check) of $50 or more as follows: five or
more times per year if you have an account of $10,000
or more, or four or fewer times per year if you have an
account of $5,000 or more. Withdrawals are made on or
about the dates you select. Electronic credits will
generally be deposited to your bank account within
three business days, and checks will be sent within
seven days. (See "Other Important Things to Remember.")
Additional investments in a withdrawal account must not
be less than one year's scheduled withdrawals or
$1,200, whichever is greater. However, additional
investments in a withdrawal account may be inadvisable
due to sales charges and tax liabilities.
THESE SERVICES ARE AVAILABLE ONLY IN STATES WHERE THE
FUND TO BE PURCHASED MAY BE LEGALLY OFFERED AND MAY BE
TERMINATED OR MODIFIED AT ANY TIME UPON 60 DAYS'
WRITTEN NOTICE.
ACCOUNT STATEMENTS Your account is opened in accordance
with your registration instructions. Transactions in
the account, such as additional investments and
dividend reinvestments, will be reflected on regular
confirmation statements from American Funds Service
Company. Purchases through automatic investment plans
will be confirmed at least quarterly.
AMERICAN FUNDSLINE(R) You may check your share balance,
the price of your shares, or your most recent account
transaction, purchase
17
<PAGE>
- -------------------------------------------------------------------------------
shares (up to $50,000 per transaction, additional
documentation required) redeem shares (up to $10,000
per fund, per account each day), or exchange shares
around the clock with American FundsLine(R). To use
this service, call 800/325-3590 from a TouchTone(TM)
telephone. Redemptions and exchanges through American
FundsLine(R) are subject to the conditions noted above
and in "Redeeming Shares--Telephone Purchases,
Redemptions and Exchanges" below. You will need your
fund number (see the list of funds in The American
Funds Group under "Purchasing Shares--Investment
Minimums and Fund Numbers"), personal identification
number (the last four digits of your Social Security
number or other tax identification number associated
with your account) and account number.
--------------------------------------------------------
REDEEMING By writing to Send a letter of instruction
SHARES American specifying the name of the fund, the
Funds Service number of shares or dollar amount to
You may take money Company (at be sold, your name and account
out of your the appro- number. You should also enclose any
account whenever priate address share certificates you wish to
you please. indicated redeem. For redemptions over $50,000
under "Fund and for certain redemptions of
Organization $50,000 or less (see below), your
and Manage- signature must be guaranteed by a
ment--Transfer bank, savings association, credit
Agent") union, or member firm of a domestic
stock exchange or the National
Association of Securities Dealers,
Inc., that is an eligible guarantor
institution. You should verify with
the institution that it is an
eligible guarantor prior to signing.
Additional documentation may be
required for redemption of shares
held in corporate, partnership or
fiduciary accounts. Notarization by a
Notary Public is not an acceptable
signature guarantee.
--------------------------------------------------------
By contacting If you redeem shares through your
your investment dealer, you may be charged
investment for this service. SHARES HELD FOR YOU
dealer IN YOUR INVESTMENT DEALER'S STREET
NAME MUST BE REDEEMED THROUGH THE
DEALER.
--------------------------------------------------------
You may have You may use this option, provided the
a redemption account is registered in the name of
check sent to an individual(s), a UGMA/UTMA
you by using custodian, or a non-retirement plan
American trust. These redemptions may not
FundsLine(R) exceed $10,000 per day, per fund
or by account and the check must be made
telephoning, payable to the shareholder(s) of
faxing, or record and be sent to the address of
telegraphing record provided the address has been
American used with the account for at least 10
Funds Service days. See "Transfer Agent" and
Company "Exchange Privilege" above for the
(subject to appropriate telephone or fax number.
the
conditions
noted in this
section and
in "Telephone
Purchases,
Redemptions
and
Exchanges"
below)
--------------------------------------------------------
In the case Upon request (use the account
of the money application for the money market
market funds, funds) you may establish telephone
you may have redemption privileges (which will
redemptions enable you to have a redemption sent
wired to your to your bank account) and/or check
bank by writing privileges. If you request
telephoning check writing privileges, you will be
American provided with checks that you may use
Funds Service to draw against your account. These
Company checks may be made payable to anyone
($1,000 or you designate and must be signed by
more) or by the authorized number of registered
writing a shareholders exactly as indicated on
check ($250 your checking account signature card.
or more)
--------------------------------------------------------
A SIGNATURE GUARANTEE IS NOT CURRENTLY REQUIRED FOR ANY
REDEMPTION OF $50,000 OR LESS PROVIDED THE REDEMPTION
CHECK IS MADE PAYABLE TO THE REGISTERED SHAREHOLDER(S)
AND IS MAILED TO THE ADDRESS OF RECORD, AND PROVIDED
THE ADDRESS HAS BEEN USED WITH THE ACCOUNT FOR AT LEAST
10 DAYS.
18
<PAGE>
- -------------------------------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND
ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
TELEPHONE PURCHASES, REDEMPTIONS AND EXCHANGES By using
the telephone (including American FundsLine(R)), fax or
telegraph, purchase, redemption and/or exchange
options, you agree to hold the fund, American Funds
Service Company, any of its affiliates or mutual funds
managed by such affiliates, and each of their
respective directors, trustees, officers, employees and
agents harmless from any losses, expenses, costs or
liability (including attorney fees) which may be
incurred in connection with the exercise of these
privileges. Generally, all shareholders are
automatically eligible to use these options. However,
you may elect to opt out of these options by writing
American Funds Service Company (you may reinstate them
at any time also by writing American Funds Service
Company). If American Funds Service Company does not
employ reasonable procedures to confirm that the
instructions received from any person with appropriate
account information are genuine, the fund may be liable
for losses due to unauthorized or fraudulent
instructions. In the event that shareholders are unable
to reach the fund by telephone because of technical
difficulties, market conditions, or a natural disaster,
redemption and exchange requests may be made in writing
only.
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions made
within twelve months of purchase on investments of $1
million or more and on any investment made with no
initial sales charge by any employer-sponsored 403(b)
plan or defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees. The
charge is 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares.
Shares held for the longest period are assumed to be
redeemed first for purposes of calculating this charge.
The charge is waived for exchanges (except if shares
acquired by exchange were then redeemed within 12
months of the initial purchase); for distributions from
qualified retirement plans and other employee benefit
plans; for redemptions resulting from participant-
directed switches among investment options within a
participant-directed employer-sponsored retirement
plan; for distributions from 403(b) plans or IRAs due
to death, disability or attainment of age 59 1/2; for
tax-free returns of excess contributions to IRAs; for
redemptions through certain automatic withdrawals not
exceeding 10% of the amount that would otherwise be
subject to the charge; and for redemptions in
connection with loans made by qualified retirement
plans.
REINSTATEMENT PRIVILEGE You may reinvest proceeds from
a redemption or a dividend or capital gain distribution
without a sales charge (any contingent deferred sales
charge paid will be credited to your
19
<PAGE>
- -------------------------------------------------------------------------------
account) in any fund in The American Funds Group. Send
a written request and a check to American Funds Service
Company within 90 days after the date of the redemption
or distribution. Reinvestment will be at the next
calculated net asset value after receipt. The tax
status of a gain realized on a redemption will not be
affected by exercise of the reinstatement privilege,
but a loss may be nullified if you reinvest in the same
fund within 30 days. If you redeem your shares within
90 days after purchase and the sales charge on the
purchase of other shares is waived under the
reinstatement privilege, the sales charge you
previously paid for the shares may not be taken into
account when you calculate your gain or loss on that
redemption.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because each stock,
stock/bond and bond fund's net asset value fluctuates,
reflecting the market value of the fund's portfolio,
the amount a shareholder receives for shares redeemed
may be more or less than the amount paid for them.
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
A fund may, with 60 days' written notice, close your
account if, due to a redemption, the account has a
value of less than the minimum required initial
investment. (For example, a fund may close an account
if a redemption is made shortly after a minimum initial
investment is made.)
RETIREMENT You may invest in the funds through various retirement
PLANS plans including the following plans for which Capital
Guardian Trust Company acts as trustee or custodian:
IRAs, Simplified Employee Pension plans, 403(b) plans
and Keogh- and corporate-type business retirement
plans. For further information about any of the plans,
agreements, applications and annual fees, contact your
investment dealer or American Funds Distributors. To
determine which retirement plan is appropriate for you,
please consult your tax adviser. TAX-EXEMPT FUNDS
SHOULD NOT SERVE AS INVESTMENTS FOR RETIREMENT PLANS.
FOR MORE INFORMATION, PLEASE REFER TO THE ACCOUNT
APPLICATION OR THE STATEMENT OF ADDITIONAL INFORMATION.
IF YOU HAVE ANY QUESTIONS ABOUT ANY OF THE SHAREHOLDER
SERVICES DESCRIBED HEREIN OR YOUR ACCOUNT, PLEASE
CONTACT YOUR INVESTMENT DEALER OR AMERICAN FUNDS
SERVICE COMPANY.
[RECYCLE LOGO] This prospectus has been printed on
recycled paper that meets the
guidelines of the United States
Environmental Protection Agency
20
<PAGE>
EUROPACIFIC GROWTH FUND
333 South Hope Street
Los Angeles, California 90071
The fund's investment objective
is to achieve long-term growth of
capital by investing in
securities of issuers domiciled
outside the U.S. Normally, the
fund seeks to achieve this
investment objective by investing
primarily in equity securities of
issuers domiciled in Europe or
the Pacific Basin.
This prospectus relates only to
shares of the fund offered
without a sales charge to
eligible retirement plans. For a
prospectus regarding shares of
the fund to be acquired
otherwise, contact the Secretary
of the fund at the address
indicated above.
This prospectus presents
information you should know
before investing in the fund. It
should be retained for future
reference.
You may obtain the statement of
additional information, dated
June 1, 1996, which contains the
fund's financial statements,
without charge, by writing to the
Secretary of the fund at the
above address or telephoning
800/421-0180. These requests will
be honored within three business
days of receipt.
SHARES OF THE FUND 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.
THE PURCHASE OF FUND SHARES
INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL
OFFENSE.
RP 16-010-0696
June 1, 1996
<PAGE>
- -------------------------------------------------------------------------------
SUMMARY OF This table is designed to help you understand costs of
EXPENSES investing in the fund. These are historical expenses;
your actual expenses may vary.
Average annual
expenses paid over SHAREHOLDER TRANSACTION EXPENSES
a 10-year period Certain retirement plans may purchase shares of the
would be funds with no sales charge./1/ The fund also has no
approximately $12 sales charge on reinvested dividends, deferred sales
per year, assuming charge, redemption fees or exchange fees.
a $1,000
investment and a ANNUAL FUND OPERATING EXPENSES
5% annual return (as a percentage of average net assets)
with no sales Management fees................................. 0.49%
charge. 12b-1 expenses.................................. 0.24%/2/
Other expenses (including audit, legal,
shareholder services, transfer agent and
custodian expenses)............................ 0.22%
Total fund operating expenses................... 0.95%
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the
following cumulative
expenses on a $1,000
investment, assuming
a 5% annual return./3/ $10 $30 $53 $117
</TABLE>
/1/ Retirement plans of organizations with $100 million
or more in collective retirement plan assets may
purchase shares of the fund with no sales charge. In
addition, any employer-sponsored 403(b) plan or
defined contribution plan qualified under Section
401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or
any other purchaser investing at least $1 million in
shares of the fund (or in combination with shares of
other funds in The American Funds Group other than
the money market funds) may purchase shares at net
asset value; however, a contingent deferred sales
charge of 1% applies on certain redemptions made
within 12 months following such purchases. (See
"Redeeming Shares--Contingent Deferred Sales
Charge.")
/2/ These expenses may not exceed 0.25% of the fund's
average net assets annually. (See "Fund Organization
and Management--Plan of Distribution.") Due to these
distribution expenses, long-term shareholders may pay
more than the economic equivalent of the maximum
front-end sales charge permitted by the National
Association of Securities Dealers.
/3/ Use of this assumed 5% return is required by the
Securities and Exchange Commission; it is not an
illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL
EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
TABLE OF CONTENTS
Summary of Expenses.................... 2
Financial Highlights................... 3
Investment Objective and Policies...... 3
Investing Around the World............. 4
Investment Results..................... 6
Dividends, Distributions and Taxes..... 7
Fund Organization and Management....... 7
Purchasing Shares...................... 9
Shareholder Services................... 11
Redeeming Shares....................... 11
2
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL The following information has been audited by Price
HIGHLIGHTS Waterhouse LLP, independent accountants, whose
(For a share unqualified report covering each of the most recent
outstanding five years is included in the statement of additional
throughout the information. This information should be read in
fiscal year) conjunction with the financial statements and
accompanying notes which appear in the statement of
additional information.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31/1/
----------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------- ------- ------- ------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Year............................ $20.89 $21.95 $17.64 $16.64 $15.18 $14.39 $13.38 $12.64 $13.46 $11.07
------- ------- ------- ------- ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........... .46 .35 .24 .22 .28 .28 .25 .23 .23 .15
Net realized and unrealized gain
(loss) on investments.......... 3.63 (.19) 4.37 1.04 1.48 1.02 1.95 1.54 .63 2.95
------- ------- ------- ------- ------ ------ ------ ------ ------ ------
Total income from investment
operations..................... 4.09 .16 4.61 1.26 1.76 1.30 2.20 1.77 .86 3.10
------- ------- ------- ------- ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment
income......................... (.49) (.317) (.187) (.222) (.30) (.33) (.28) (.18) (.33) (.09)
Dividends from net realized non-
U.S. currency gains/2/......... -- (.003) (.043) (.038) -- -- -- -- -- --
Distributions from net realized
gains.......................... (.21) (.90) (.07) -- -- (.18) (.91) (.85) (1.35) (.62)
------- ------- ------- ------- ------ ------ ------ ------ ------ ------
Total distributions............. (.70) (1.22) (.30) (.26) (.30) (.51) (1.19) (1.03) (1.68) (.71)
------- ------- ------- ------- ------ ------ ------ ------ ------ ------
Net Asset Value, End of Year..... $ 24.28 $ 20.89 $ 21.95 $ 17.64 $16.64 $15.18 $14.39 $13.38 $12.64 $13.46
======= ======= ======= ======= ====== ====== ====== ====== ====== ======
Total Return/3/................. 19.84% .71% 26.27% 7.69% 11.71% 9.11% 16.99% 14.69% 8.12% 29.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in mil-
lions)......................... $12,335 $ 8,588 $ 6,429 $ 2,992 $1,933 $1,138 $ 584 $ 228 $ 188 $ 218
Ratio of expenses to average net
assets......................... .95% .97% .99% 1.10% 1.24% 1.28% 1.24% 1.30% 1.21% 1.27%
Ratio of net income to average
net assets..................... 2.09% 1.80% 1.13% 1.40% 1.85% 2.23% 2.29% 1.87% 1.56% 1.63%
Portfolio turnover rate......... 21.77% 16.02% 21.37% 10.35% 9.65% 8.58% 25.82% 35.47% 28.90% 22.13%
</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.
INVESTMENT The fund's investment objective is to achieve long-term
OBJECTIVE AND growth of capital by investing in securities of issuers
POLICIES domiciled outside the U.S. Under normal market
conditions, the fund seeks to achieve this investment
The fund's goal is objective by investing primarily (at least 65% of its
to provide you assets) in equity securities of issuers domiciled in
with long-term Europe or the Pacific Basin. The Pacific Basin is
growth of capital generally defined as those countries bordering the
by investing in Pacific Ocean and includes, but is not limited to,
securities of Australia, Canada, Japan, Malaysia, and Singapore. (In
issuers domiciled determining the domicile of an issuer, the fund's
outside the U.S. investment adviser, Capital Research and Management
Company, has the discretion to give prevailing weight
to one or more factors which may include where the
issuer is legally organized, where it maintains
principal corporate offices and where it conducts its
principal operations.) The assets of the fund will be
invested with geographic flexibility; accordingly,
investments may be made from time to time in issuers
domiciled in, or governments of, developing countries.
The fund's investment adviser currently does not intend
to invest more than 20% of the fund's total assets
(taken at cost) in securities of issuers domiciled in,
3
<PAGE>
- -------------------------------------------------------------------------------
or governments of, developing countries. See "Investing
Around the World--Opportunities, Risks and Costs" and
the statement of additional information.
The fund may also invest in securities through
depositary receipts which may be denominated in various
currencies. For example, the fund may purchase American
Depositary Receipts which are U.S. dollar denominated
securities designed for use in the U.S. securities
markets and which represent and may be converted to the
underlying security.
The fund may also invest in securities convertible into
common stocks, straight debt securities (generally
rated in the top three quality categories by Moody's
Investors Service, Inc. or Standard & Poor's
Corporation, or determined to be of equivalent quality
by Capital Research and Management Company), government
securities, or nonconvertible preferred stocks. In
addition, up to 5% of the fund's assets may be invested
in lower rated straight debt securities (including
securities commonly referred to as "junk" or "high-
yield, high-risk" bonds) or in unrated securities that
are determined to be of equivalent quality. High-yield,
high-risk bonds carry a higher degree of investment
risk and are considered speculative. For example, bonds
rated Ca or CC are described as "speculative in a high
degree; often in default or hav[ing] other marked
shortcomings." These securities will also be issued by
non-U.S. entities. The fund may hold a portion of its
assets in U.S. dollars and other currencies and in cash
equivalents of either U.S. or non-U.S. issuers. (See
the statement of additional information for a
description of cash equivalents.)
The fund's investment restrictions (which are described
in the statement of additional information) and
objective cannot be changed without shareholder
approval. All other investment practices may be changed
by the board of trustees.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES AND THE SPECIAL RISKS ASSOCIATED WITH
INVESTING OUTSIDE THE U.S. DESCRIBED HEREIN.
INVESTING AROUND OPPORTUNITIES, RISKS AND COSTS The fund's assets are
THE WORLD invested in securities of issuers domiciled outside the
United States which, in the opinion of Capital Research
Investing outside and Management Company, enhances the fund's ability to
the U.S. involves meet its objective of long-term growth of capital.
expanded
opportunities, Of course, investing outside the U.S. involves special
special risks and risks particularly in certain developing countries,
increased costs. caused by, among other things: fluctuating currency
values; different accounting, auditing, and financial
reporting regulations and practices in some countries;
changing local and regional economic, political, and
social conditions; greater market
4
<PAGE>
- -------------------------------------------------------------------------------
volatility; differing securities market structures; and
various administrative difficulties such as delays in
clearing and settling portfolio transactions or in re-
ceiving payment of dividends. However, in the opinion
of Capital Research and Management Company, investing
outside the U.S. also can reduce certain portfolio
risks due to greater diversification opportunities.
Additional costs could be incurred in connection with
the fund's investment activities outside the U.S.
Brokerage commissions may be higher outside the U.S.,
and the fund will bear certain expenses in connection
with its currency transactions. Furthermore, increased
custodian costs may be associated with the maintenance
of assets in certain jurisdictions.
CURRENCY TRANSACTIONS The fund has the ability to
purchase and sell currencies to facilitate securities
transactions and to enter into forward currency
contracts to hedge against changes in currency exchange
rates. While entering into forward transactions could
minimize the risk of loss due to a decline in the value
of the hedged currency, it could also limit any
potential gain which might result from an increase in
the value of the currency. (See "Investment Policies--
Currency Transactions," in the statement of additional
information.)
RULE 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 that Act, such
as private placements under Rule 144A, accordingly, any
such security will be deemed illiquid (unless
determined to be liquid in accordance with procedures
which may be 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
restricted securities; however, non-U.S. securities
that can be freely traded in a securities market
outside the U.S. are excluded from this limitation.
(See the statement of additional information.)
MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic
investment philosophy of Capital Research and
Management Company is to seek fundamental values at
reasonable prices, using a system of multiple portfolio
counselors in managing mutual fund assets. Under this
system the portfolio of the fund is divided into
segments which are managed by individual counselors.
Counselors decide how their respective segments will be
invested (within the limits provided by the fund's
objectives and policies and by Capital Research and
Management Company's
5
<PAGE>
- -------------------------------------------------------------------------------
investment committee). In addition, Capital Research
and Management Company's research professionals make
investment decisions with respect to a portion of the
fund's portfolio. The primary individual portfolio
counselors for the fund are listed below.
<TABLE>
<CAPTION>
YEARS OF EXPERIENCE
AS
INVESTMENT PROFESSIONAL
(APPROXIMATE)
YEARS OF EXPERIENCE AS
PORTFOLIO COUNSELOR WITH CAPITAL
(AND RESEARCH RESEARCH AND
PORTFOLIO PROFESSIONAL, MANAGEMENT
COUNSELORS FOR IF APPLICABLE) FOR COMPANY OR
EUROPACIFIC GROWTH EUROPACIFIC GROWTH ITS TOTAL
FUND PRIMARY TITLE(S) FUND (APPROXIMATE) AFFILIATES YEARS
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thierry Vandeventer Trustee and President Since the fund began 33 years 33 years
of the fund. Chairman operations in 1984
of the Board, Capital
Research Company*
- -------------------------------------------------------------------------------------------
Stephen E. Bepler Executive Vice Since the fund began 24 years 30 years
President of the operations
fund. Senior Vice in 1984
President and
Director, Capital
Research Company*
- -------------------------------------------------------------------------------------------
Mark E. Denning Executive Vice 5 years (in addition 14 years 14 years
President of the to 3 years as a
fund. Senior Vice research professional
President, Capital prior to becoming a
Research Company* portfolio counselor
for the fund)
- -------------------------------------------------------------------------------------------
Robert W. Lovelace Vice President of the 2 years (in addition 11 years 11 years
fund, Executive Vice to 7 years as a
President, research professional
Capital Research prior to becoming a
Company* portfolio counselor
for the fund)
- -------------------------------------------------------------------------------------------
Janet A. McKinley Vice President of the 6 years (in addition 14 years 20 years
fund. Senior Vice to 5 years as a
President, Capital research professional
Research Company* prior to becoming a
portfolio counselor
for the fund)
- -------------------------------------------------------------------------------------------
Martial Chaillet Senior Vice 2 years (in addition 24 years 24 years
President, Capital to 5 years as a
Research Company* research professional
prior to becoming a
portfolio counselor
for the fund)
- ------------------------------------------------------------------------------------------
* COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
- ------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT The fund may from time to time compare its investment
RESULTS results to various unmanaged indices or other mutual
funds in reports to shareholders, sales literature and
The fund has advertisements. The results may be calculated on a
averaged a total total return, yield and/or distribution rate basis for
return of 16.33% a various periods, with or without sales charges. Results
year (at no sales calculated without a sales charge will be higher. Total
charge) over its returns assume the reinvestment of all dividends and
lifetime capital gain distributions.
(April 16, 1984 The fund's distribution rate is calculated by dividing
through March 31, the dividends paid by the fund over the last 12 months
1996). by the sum of the month-end price and the capital gains
paid over the last 12 months. The SEC yield reflects
income the fund expects to earn based on its current
portfolio of securities, while the distribution rate is
based solely on the fund's past dividends. Accordingly,
the fund's SEC yield and distribution rate may differ.
6
<PAGE>
- -------------------------------------------------------------------------------
The fund's total return over the past 12 months and
average annual total returns over the past five-year
and ten-year periods as of March 31, 1996, were 19.84%,
12.89% and 14.11%, respectively. These results were
calculated in accordance with Securities and Exchange
Commission requirements with no sales charge. Of
course, past results are not an indication of future
results. Further information regarding the fund's
investment results is contained in the fund's annual
report which may be obtained without charge by writing
to the Secretary of the fund at the address indicated
on the cover of this prospectus.
DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS AND in June and December. All capital gains, if any, are
TAXES distributed annually, usually in December. When a
dividend or capital gain is distributed, the net asset
Income value per share is reduced by the amount of the
distributions are payment.
usually made in
June and December. FEDERAL TAXES The fund intends to operate as a
"regulated investment company" under the Internal
Revenue Code. In any fiscal year in which the fund so
qualifies and distributes to shareholders all of its
net investment income and net capital gains, the fund
itself is relieved of federal income tax. The tax
treatment of redemptions from a retirement plan may
differ from redemptions from an ordinary shareholder
account.
The fund may be required to pay withholding and other
taxes imposed by various countries in connection with
its investments outside the U.S., generally at rates
from 10% to 40%, which would reduce the fund's
investment income.
This is a brief summary of some of the tax laws that
affect your investment in the fund. Please see the
statement of additional information and your tax
adviser for further information.
FUND ORGANIZATION FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
AND MANAGEMENT end diversified management investment company, was
organized as a Massachusetts business trust in 1983.
The fund is a The fund's board supervises fund operations and
member of The performs duties required by applicable state and
American Funds federal law. Members of the board who are not employed
Group, which is by Capital Research and Management Company or its
managed by one of affiliates are paid certain fees for services rendered
the largest and to the fund as described in the statement of additional
most experienced information. They may elect to defer all or a portion
investment of these fees through a deferred compensation plan in
advisers. effect for the fund. All shareholders have one vote per
share owned, and at the request of holders of at least
10% of the shares, the fund will hold a meeting at
which any member of the board could be removed and a
successor elected. There will not usually be a
shareholder meeting in any year except, for example,
when the election of the board is required to be acted
upon by shareholders under the Investment Company Act
of 1940.
7
<PAGE>
- -------------------------------------------------------------------------------
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los
Angeles, CA 90071 and at 135 South State College
Boulevard, Brea, CA 92621. Capital Research and
Management Company manages the investment portfolio and
business affairs of the fund and receives a fee at the
annual rate of 0.69% on the first $500 million of the
fund's average net assets, plus 0.59% on such assets in
excess of $500 million to $1 billion, plus 0.53% on
such assets in excess of $1 billion to $1.5 billion,
plus 0.50% on such assets in excess of $1.5 billion to
$2.5 billion, plus 0.48% on such assets in excess of
$2.5 billion to $4 billion, plus 0.47% on such assets
in excess of $4 billion to $6.5 billion, plus 0.465% on
such assets in excess of $6.5 billion to $10.6 billion,
plus 0.462% on such assets in excess of $10.5 billion.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
Capital Research and Management Company and its
affiliated companies have adopted a personal investing
policy that is consistent with the recommendations
contained in the report dated May 9, 1994 issued by the
Investment Company Institute's Advisory Group on
Personal Investing. (See the statement of additional
information.) This policy has also been incorporated
into the fund's "code of ethics" which is available
from the fund's Secretary upon request.
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter
market, purchases and sales are transacted directly
with principal market-makers except in those
circumstances where it appears better prices and
executions are available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers who have
sold shares of the fund or have provided investment
research, statistical, and other related services for
the benefit of the fund and/or of other funds served by
Capital Research and Management Company.
8
<PAGE>
- -------------------------------------------------------------------------------
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors is located
at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92621, 8000 IH-
10 West, San Antonio, TX 78230, 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 46240 and 5300 Robin Hood
Road, Norfolk, VA 23513. Telephone conversations with
American Funds Distributors may be recorded or
monitored for verification, recordkeeping and quality
assurance purposes.
PLAN OF DISTRIBUTION The fund has a plan of
distribution or "12b-1 Plan" under which it may finance
activities primarily intended to sell shares, provided
the categories of expenses are approved in advance by
the board and the expenses paid under the plan were
incurred within the last 12 months and accrued while
the plan is in effect. Expenditures by the fund under
the plan may not exceed 0.25% of its average net assets
annually (all of which may be for service fees).
TRANSFER AGENT American Funds Service Company, 800/421-
0180, a wholly owned subsidiary of Capital Research and
Management Company, is the fund's transfer agent and
performs shareholder service functions. American Funds
Service Company is located at 333 South Hope Street,
Los Angeles, CA 90071, 135 South State College
Boulevard, Brea, CA 92621, 8000 1H-10 West, San
Antonio, TX 78230, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, and 5300 Robin Hood Road,
Norfolk, VA 23513. It was paid a fee of $11,473,000 for
the fiscal year ended March 31, 1996. Telephone
conversations with American Funds Service Company may
be recorded or monitored for verification, record-
keeping and quality assurance purposes.
PURCHASING SHARES ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR
RETIREMENT PLAN. FOR MORE INFORMATION ABOUT HOW TO PUR-
CHASE SHARES OF THE COMPANY THROUGH YOUR EMPLOYER'S
PLAN OR LIMITATIONS ON THE AMOUNT THAT MAY BE PUR-
CHASED, PLEASE CONSULT WITH YOUR EMPLOYER. Shares are
sold to eligible retirement plans at the net asset
value per share next determined after receipt of an or-
der by the fund or American Funds Service Company. Or-
ders must be received before the close of regular trad-
ing on the New York Stock Exchange in order to receive
that day's net asset value. Plans of organizations with
collective retirement plan assets of $100 million or
more may purchase shares at net asset value. In addi-
tion, any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees or any other plan that
invests at least $1 million in shares of the fund (or
in combination with shares of other funds in The Ameri-
can Funds Group
9
<PAGE>
- -------------------------------------------------------------------------------
other than the money market funds) may purchase shares
at net asset value; however, a contingent deferred
sales charge of 1% is imposed on certain redemptions
within 12 months of the purchase. (See "Redeeming
Shares-- Contingent Deferred Sales Charge.") Plans may
also qualify to purchase $1 million in fund shares sub-
ject to a commission over a maximum of 13 consecutive
months. Certain redemptions of such shares may also be
subject to a contingent deferred sales charge as de-
scribed above. (See the statement of additional infor-
mation.)
The minimum initial investment is $250, except that the
money market funds have a minimum of $1,000 for indi-
vidual retirement accounts (IRAs). Minimums are reduced
to $50 for purchases through "Automatic Investment
Plans" (except for the money market funds) or to $25
for purchases by retirement plans through payroll de-
ductions and may be reduced or waived for shareholders
of other funds in The American Funds Group.
American Funds Distributors, at its expense (from a
designated percentage of its income), will, during cal-
endar year 1996, provide additional compensation to
dealers. Currently these payments are limited to the
top one hundred dealers who have sold shares of the
fund or other funds in The American Funds Group. These
payments will be based on a pro rata share of a quali-
fying dealer's sales. American Funds Distributors will,
on an annual basis, determine the advisability of con-
tinuing these payments.
Qualified dealers currently are paid a continuing serv-
ice fee not to exceed 0.25% of average net assets
(0.15% in the case of the money market funds) annually
in order to promote selling efforts and to compensate
them for providing certain services. (See "Fund Organi-
zation and Management--Plan of Distribution.") These
services include processing purchase and redemption
transactions, establishing shareholder accounts and
providing certain information and assistance with re-
spect to the fund.
Shares of the fund are offered to other shareholders
pursuant to another prospectus at public offering
prices that may include an initial sales charge.
SHARE PRICE Shares are offered to eligible retirement
plans at the net asset value after the order is
received by the fund or American Funds Service Company.
In the case of orders sent directly to the company or
American Funds Service Company, an investment dealer
MUST be indicated. Dealers are responsible for promptly
transmitting orders. (See the statement of additional
information under "Purchase of Shares--Price of
Shares.")
The fund's net asset value per share is determined as
of the close of trading (currently 4:00 p.m., New York
time) on each day the New York Stock Exchange is open.
The current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share.
10
<PAGE>
- -------------------------------------------------------------------------------
SHAREHOLDER Subject to any restrictions contained in your plan, you
SERVICES can exchange your shares for shares of other funds in
The American Funds Group which are offered through the
plan at net asset value. In addition, again depending
on any restrictions in your plan, you may be able to
exchange shares automatically or cross-reinvest
dividends in shares of other funds. Contact your plan
administrator/trustee regarding how to use these
services. Also, see the fund's statement of additional
information for a description of these and other
services that may be available through your plan. These
services are available only in states where the fund to
be purchased may be legally offered and may be
terminated or modified at any time upon 60 days'
written notice.
REDEEMING Subject to any restrictions imposed by your employer's
SHARES plan, you can sell your shares through the plan to the
fund any day the New York Stock Exchange is open. For
more information about how to sell shares of the fund
through your retirement plan, including any charges
that may be imposed by the plan, please consult with
your employer.
--------------------------------------------------------
By contacting Your plan administrator/trustee must
your plan send a letter of instruction
administrator/ specifying the name of the fund, the
trustee number of shares or dollar amount to
be sold, and, if applicable, your
name and account number. For your
protection, if you redeem more than
$50,000, the signatures of the
registered owners (i.e., trustees or
their legal representatives) must be
guaranteed by a bank, savings
association, credit union, or member
firm of a domestic stock exchange or
the National Association of
Securities Dealers, Inc., that is an
eligible guarantor institution. Your
plan administrator/trustee should
verify with the institution that it
is an eligible guarantor prior to
signing. Additional documentation may
be required to redeem shares from
certain accounts. Notarization by a
Notary Public is not an acceptable
signature guarantee.
--------------------------------------------------------
By contacting Shares may also be redeemed through
your an investment dealer; however you or
investment your plan may be charged for this
dealer service. SHARES HELD FOR YOU IN AN
INVESTMENT DEALER'S STREET NAME MUST
BE REDEEMED THROUGH THE DEALER.
--------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND
ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions made
within 12 months of purchase on investments of $1
million or more and on any investment made with no
initial sales charge by any employer-sponsored 403(b)
plan or defined contribution plan qualified under
Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees. The
charge is 1% of the lesser of the value of the shares
redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares.
Shares held for the longest period are assumed to be
redeemed first for purposes of calculating this
11
<PAGE>
- -------------------------------------------------------------------------------
charge. The charge is waived for exchanges (except if
shares acquired by exchange were then redeemed within
12 months of the initial purchase); for distributions
from qualified retirement plans and other employee
benefit plans; for redemptions resulting from
participant-directed switches among investment options
within a participant-directed employer-sponsored
retirement plan; and for redemptions in connection with
loans made by qualified retirement plans.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because the fund's
net asset value fluctuates, reflecting the market value
of the fund's portfolio, the amount you receive for
shares redeemed may be more or less than the amount
paid for them.
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
[RECYCLE LOGO] This prospectus has been printed on
recycled paper that meets the
guidelines of the United States
Environmental Protection Agency.
This prospectus relates only to shares of the fund
offered without a sales charge to eligible
retirement plans. For a prospectus regarding shares
of the fund to be acquired otherwise, contact the
Secretary of the fund at the address indicated on
the front.
12
PROFILE PROSPECTUS
EUROPACIFIC GROWTH FUND (R)
May 15, 1996
[The American Funds Group(R)]
<PAGE>
EUROPACIFIC GROWTH FUND (R)
333 South Hope Street May 15, 1996
Los Angeles, CA 90071
1. GOAL
The fund seeks to make your money grow over time through investments in stocks
of companies outside the U.S.
2. INVESTMENT STRATEGIES
The fund will normally invest primarily in stocks of companies located in
Europe and the Pacific Basin. The assets of the fund will be invested with
geographic flexibility; accordingly, investments may be made from time to time
in issuers domiciled in developing countries. The fund may purchase and sell
various currencies and, to hedge certain currency exposure, enter into forward
currency contracts in connection with the fund's investments. The fund may
also hold other types of securities, such as bonds, when appropriate.
3. RISKS AND REWARDS
RISKS
- -----
Stock prices rise and fall due to changing circumstances of the issuer,
changing market conditions, and other factors. Investing outside the U.S.
involves special risks, particularly in developing countries, caused by, among
other things, currency fluctuations, different accounting and financial
reporting practices, changing local and regional economic, political and social
conditions, differing market structures, and various administrative
difficulties.
YOU CAN LOSE MONEY BY INVESTING IN THE FUND; YOUR INVESTMENT IS NOT GUARANTEED.
THE LIKELIHOOD OF LOSS IS GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.
REWARDS
- -------
Investing outside the U.S. can enhance the fund's ability to provide investors
with growth of capital and may reduce certain risks because of greater
diversification opportunities.
4. APPROPRIATENESS
If you are not a long-term investor seeking capital growth through
international diversification, this fund may not be appropriate for you.
Please consult your investment dealer.
5. FEES AND EXPENSES
Shareholder transaction expenses are charges you pay when you buy or sell
shares of a fund. Annual fund operating expenses are paid out of the fund's
assets. The fund's expenses are factored into its share price or dividends and
are not charged directly to shareholder accounts.
SHAREHOLDER TRANSACTION EXPENSES
- --------------------------------
Maximum sales charge on purchases
(as a percentage of offering price).................................5.75%*
Sales charges are reduced for purchases of $50,000 or more and eliminated for
certain purchases as described in the fund's prospectus.
ANNUAL FUND OPERATING EXPENSES
- ------------------------------
(based on a percentage of average net assets as of March 31, 1996)
Management fees........................0.49%
12b-1 expenses.........................0.24%
Other expenses.........................0.22%
-----
Total fund operating expenses..........0.95%
EXAMPLE
- --------
You would pay the following cumulative expenses on a $1,000 investment,
assuming a 5% annual return. This example should not be considered a
representation of past or future expenses.
ONE YEAR $67
THREE YEARS 86
FIVE YEARS 107
TEN YEARS 167
* The fund has no sales charge on reinvested dividends and no deferred sales
charge or redemption or exchange fees. A contingent deferred sales charge of
1% applies to certain redemptions within 12 months following purchases without
a sales charge.
6. PAST RESULTS
Here are the fund's annual total returns for each of the past 10 calendar
years:
[CHART]
1986 39.9
1987 7.5
1988 21.0
1989 24.2
1990 -0.1
1991 18.6
1992 2.3
1993 35.6
1994 1.1
1995 12.9
Sales charges have not been deducted from fund results shown above.
[END CHART]
PAST RESULTS ARE NOT A GUARANTEE OF FUTURE RESULTS.
<TABLE>
<CAPTION>
<S> <C> <C>
AVERAGE ANNUAL
COMPOUND RETURNS
FUND* EAFE INDEX**
One year +12.98% +12.67%
Five years +11.56% + 8.76%
Ten years +13.44% +11.33%
</TABLE>
*These results were calculated for periods ended March 31, 1996 in accordance
with Securities and Exchange Commission rules, which require that the maximum
sales charge be deducted.
**Morgan Stanley Capital International EAFE Index (an index that tracks certain
world stock prices) as of March 31, 1996.
7. INVESTMENT ADVISER
Capital Research and Management Company, one of the world's largest and most
experienced investment advisers, manages the fund, which is a member of The
American Funds Group. Capital Research and Management Company manages this
diversified mutual fund using the multiple portfolio counselor system. Under
this system, the fund's assets are divided into several portions. Each portion
is independently managed by a portfolio counselor or a group of research
professionals, subject to oversight by the investment adviser's investment
committee.
8. PURCHASES
The fund's shares are sold through investment dealers. Your investment dealer
can help you with your account, or you may call American Funds Service Company
at 800/421-0180 with questions about your account. Generally, the minimum
initial investment is $250.
9. REDEMPTIONS
You may redeem shares at anytime no cost by calling American FundsLine(R) at
800/325-3590. (You will need the fund's number - 16 - if you use this
service.) Transactions will be processed as of the next close of the New York
Stock Exchange.
10. DISTRIBUTIONS
Dividends and capital gain distributions are automatically reinvested unless
you notify American Funds Service Company that you would like to invest them in
another of the American Funds or receive payment in cash. Income distributions
are usually made in June and December.
All dividends and capital gains are taxable whether they are reinvested or
received in cash - unless you are exempt from taxation or entitled to tax
deferral. Early each year, you will be notified as to the amount and federal
tax status of all dividends and capital gains paid during the prior year. Such
dividends and capital gains may also be subject to state or local taxes.
11. OTHER SERVICES
You may exchange your shares for any of the other American Funds or obtain
information about your investment any time by calling American FundsLine(R).
THIS PROFILE CONTAINS KEY INFORMATION ABOUT THE FUND. IF YOU WOULD LIKE MORE
INFORMATION BEFORE YOU INVEST, PLEASE CONSULT THE FUND'S PROSPECTUS. FOR
DETAILS ABOUT THE FUND'S HOLDINGS OR RECENT INVESTMENT STRATEGIES, PLEASE
REVIEW THE FUND'S MOST RECENT ANNUAL OR SEMI-ANNUAL REPORT. THE PROSPECTUS AND
REPORTS MAY BE OBTAINED AT NO COST BY CALLING 800/421-0180.
[Recycled logo]
This profile prospectus has been printed using soy ink on recycled paper.
EUROPACIFIC GROWTH FUND
Part B
Statement of Additional Information
JUNE 1, 1996
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, 1996. 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
<TABLE>
<CAPTION>
Item Page No.
<S> <C>
Investment Policies 2
Certain Risk Factors Relating to Below Investment Grade Bonds 3
Investment Restrictions 4
Fund Trustees and Officers 6
Management . 11
Dividends, Distributions and Federal Taxes. 13
Purchase of Shares 15
Shareholder Account Services and Privileges 18
Redemption of Shares 18
Execution of Portfolio Transactions 19
General Information 19
Investment Results 21
Description of Bond Ratings 25
Financial Statements Attached
</TABLE>
INVESTMENT POLICIES
INVESTING OUTSIDE THE U.S. - The fund's investment objective is to achieve
long-term growth of capital by investing in securities of issuers domiciled
outside the U.S. The fund's assets are invested in securities of issuers
domiciled outside the United States. (In determining the domicile of an
issuer, Capital Research and Management Company has the discretion to give
prevailing weight to one or more factors which may include where the issuer is
legally organized, where it maintains its principal corporate offices and where
it conducts its principal operations.)
There are risks inherent in investing outside the U.S. (As described in the
fund's Prospectus), many of which are more pronounced for investments in
developing countries, such as many of the countries of Southeast Asia, Latin
America, Eastern Europe and the Middle East. Although there is no universally
accepted definition, a developing country may, for example, be in the initial
stages of its industrialization cycle and/or have a lower per capita gross
national product and/or have a low or middle income economy. In addition, the
possibility of political upheaval and the dependence on foreign economic
assistance may be greater in these developing countries than in developed
countries. Furthermore, markets of developing countries may be more volatile
and have lower trading volume (potentially affecting the liquidity of
securities) and may be subject to legal and/or securities more difficult and
costly) or less restrictive (making it difficult to detect and prevent fraud)
than those of developed countries.
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
(interest-bearing time deposits), 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 savings bank obligations (certificates of deposit issued by
savings banks or savings associations), (4) securities of the U.S. Government,
its agencies or instrumentalities that mature, or may be redeemed, in one year
or less, and (5) corporate bonds and notes (corporate obligations that mature,
or 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 the Investment Adviser. See
"Management" below. The fund will only 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, bonds rated Ba and BB or below or unrated but determined to be of
equivalent quality (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 company 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 entering into foreign currency contracts
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; or
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.
Pursuant to Ohio Administrative Code the fund will not invest in
securities of registered investment companies that are subject to the
Investment Ccompany Act of 1940.
FUND TRUSTEES AND OFFICERS
TRUSTEES AND TRUSTEE COMPENSATION
(with their principal occupations during the past five years)
<TABLE>
<CAPTION>
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 FUND DURING MANAGEMENT COMPANY/2/ TRUSTEE SERVES
FISCALYEAR ENDED 3/31/96
<S> <C> <C> <C> <C> <C>
Elisabeth Allison Trustee Publishing Consultant, $19,100 $39,100 2.00
1770 Massachusetts Avenue HarvardMedical School;
Cambridge, MA 02140 Administrative Director, ANZI, Ltd.
Age: 49 (financial publishing and consulting);
former Senior Vice President,
Planning and Development, McGraw
Hill, Inc.
+David I. Fisher Trustee Chairman of the Board, None/4/ None/4/ 2.00
333 South Hope Street The Capital Group Companies, Inc.
Los Angeles, CA 90072
Age: 56
Robert A. Fox Trustee President and Chief Executive Officer, $18,300/3/ $79,550 5.00
P.O Box 457 Foster Farms, Inc.; former President,
Livingston, CA 95334 Revlon International; former
Age: 59 Chairman and Chief Executive
Officer, Clarke Hooper America
(advertising)
Alan Greenway Trustee President, Greenway Associates, Inc. $19,100 $64,100 4.00
7413 Fairway Road (management consulting services)
La Jolla, CA 92037
Age: 68
+William R. Grimsley Trustee Senior Vice President and Director, None/4/ None/4/ 3.00
P.O. Box 7650 Capital Research and Management
San Francisco, CA 94111 Company
Age: 58
Koichi Itoh Trustee Managing Partner, $18,700 $39,500 2.00
7-14-11-104 MinamiAoyama VENCA Management
Minato-ku, Tokyo, Japan (venture capital)
Age: 55
++William H. Kling Trustee President, Minnesota Public Radio; $18,300/3/ $67,800 4.00
45 East Seventh Street President, Greenspring Co.; former
St. Paul, MN 55101 President, American Public Radio
Age: 54 (now Public Radio International)
John G. McDonald Trustee The IBJ Professor of Finance, $17,900/3/ $134,350 7.00
Graduate School of Business Graduate School of Business,
Stanford University Stanford University
Stanford, CA 94305
Age: 59
++William I. Miller Trustee Chairman of the Board, $18,700 $39,500 2.00
500 Washington Street Irwin Financial Corporation
Box 929
Columbus, IN 47202
Age: 40
Donald E. Petersen Trustee Former Chairman of the Board and $16,900/3/ $62,300 4.00
222 East Brown, Suite 460 Chief Executive Officer, Ford Motor
Birmingham, MI 48009 Company
Age: 69
+Walter P. Stern Chairman of Chairman, Capital GroupInternational, None/4/ None/4/ 8.00
630 Fifth Avenue the Board Inc.; Vice Chairman, Capital Research
New York, NY 10111 International; Director, The Capital
Age: 67 Group Companies, Inc.; Chairman,
Capital International, Inc.; Director,
Temple-Inland Inc. (forest products)
+Thierry Vandeventer President Chairman of the Board, Capital None/4/ None/4/ 2.00
3 Place des Bergues Research Company
1201 Geneva, Switzerland
Age: 60
</TABLE>
+ Trustees who are considered "interested persons" as defined in the Investment
Company Act of 1940, as amended, on the basis of their affiliationwith the
fund's Investment Adviser, Capital Research and Management Company.
++ May be deemed an "interested person" of the fund due to membership on
the board of directors of the parent company of a registered broker-dealer.
/1/ Amounts may be deferred by eligible trustees under a non-qualified deferred
compensation plan adopted by the fund in 1993. Deferred amountsaccumulate 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 BalancedFund, Inc., American
High-Income Municipal Bond Fund, Inc., American High-Income Trust, American
Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management Trust of
America, Capital Income Builder, Inc., Capital World Growth and Income Fund,
Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America.
Inc., Intermediate Bond Fund of America, The Investment Company of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of
America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of
Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of
America, The U.S. Treasury Money Fund of America, U.S. Government Securities
Fund and Washington Mutual Investors Fund, Inc. Capital Research and
Management Company also manages American Variable Insurance Series and Anchor
Pathway Fund which serve as the underlying investment vehicles for certain
variable insurance contracts; and Bond Portfolio for Endowments, Inc. and
Endowments, Inc. whose shares may be owned only by tax-exempt organizations.
These amounts reflect the aggregate compensation paid during the most recent
fiscal year of the funds involved.
/3/ Since the plan's adoption, the total amount of deferred compensation
accrued by the fund (plus earnings thereon) for participating Trustees is
asfollows: Robert A. Fox ($61,793), William H. Kling ($42,083), John G.
McDonald ($36,304), Donald E. Petersen ($14,181). Amounts deferred and
accumulated earnings thereon are not funded and are general unsecured
liabilities of the fund until paid to the Trustee.
/4/ David I. Fisher, William R. Grimsley, Walter P. Stern and Thierry
Vandeventer are affiliated with the Investment Adviser and, accordingly,receive
no compensation from the fund.
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.
MARK E. DENNING, Executive Vice President. 25 Bedford Street, London,
England. Senior Vice President, Capital Research Company.
* ROBERT W. LOVELACE, Vice President. Executive Vice President and Research
Director, Capital Research Company.
JANET A. MCKINLEY, Vice President. 630 Fifth Avenue, New York, NY, 10111.
Senior Vice President, Capital Research Company.
** STEVEN N. KEARSLEY, Treasurer. Vice President and Treasurer, Capital
Research and Management Company.
*** VINCENT P. CORTI, Secretary. Vice President - Fund Business Management
Group, Capital Research and Management Company.
** R. MARCIA GOULD, Assistant Treasurer. Vice President - Fund Business
Management Group, Capital Research and Management Company.
** MARY C. HALL, Assistant Treasurer. Senior Vice President - Fund Business
Management Group, Capital Research and Management Company.
_________________________
# Positions within the organizations listed may have changed during this
period.
* Address is 11100 Santa Monica Boulevard, Los Angeles, CA 90025.
** Address is 135 South State College Boulevard, Brea, CA 92621.
*** Address is 333 South Hope Street, Los Angeles, CA 90071.
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 Trusteesis $15,000 per annum, plus $1,000 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 forthe fund. The fund also reimburses certain expenses of the
Trustees who are not affiliated with theInvestment Adviser. As of May 1, 1996
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 worldand compiles and edits the Morgan Stanley Capital
International Perspective, providing financial andmarket information about more
than 2,400 companies around the world.
The Investment Adviser is responsible for more than $100 billion of
stocks, bonds and moneymarket instruments and serves over five million
investors of all types throughout the world. Theseinvestors 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, 1997 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).
The Investment Adviser, in addition to providing investment advisory
services, furnishes theservices and pays the compensation and travel expenses
of qualified persons who 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 notlimited 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 operatingexpenses, 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, 1996, 1995 and 1994, the
Investment Adviser's total feesamounted to $51,034,000, $38,787,000 and
$24,646,000, respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal
Underwriter") is the principalunderwriter 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, 1996 amounted to $11,178,000 after allowance of $59,403,000 to
dealers. During the fiscal years ended March 31, 1995 and 1994 the Principal
Underwriter retained $10,521,000 and $11,218,000, respectively.
As required by rule 12b-1, the Plan (together with the Principal
Underwriting Agreement) has beenapproved 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.
Expenditures under the Plan are reviewed quarterly, and the Plan 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 anyactivity which is primarily intended to result in the
sale of fund shares, provided the fund's Board ofTrustees has approved the
category of expenses for which payment is being made. These include
servicefees for qualified dealers and dealer commissions and wholesaler
compensation on sales of shares exceeding $1 million (including purchases by
any employer-sponsored 403(b) plan or purchases by any defined contribution
plan qualified under Section 401(a) of the Code including a "401(k)" plan with
200 or more eligible employees). Only expenses incurred during the preceeding
12 months and accrued while the Plan is in effect may be paid by the fund.
During the fiscal year ended March 31, 1996, the fund paid$24,656,000 under
the Plan. As of March 31, 1996, accrued and unpaid distribution expenses were
$1,743,000.
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 shareholderservicing functions. However, judicial or
administrative decisions or interpretations of such laws, as well as changes in
either federal or state statutes or regulations relating to the permissible
activities of banks or their subsidiaries of affiliates, could prevent a bank
from continuing to perform all or a part of its servicing activities. If a
bank were prohibited from so acting, shareholder clients of such bank would be
permitted to remain shareholders of the fund and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the fund might occur and shareholders serviced by such bank
might no longer be able to avail themselves of any automatic investment or
other services then being provided by such bank. It is not expected that
shareholders would suffer adverse financial consequences as a result of any of
these occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal lawexpressed herein, and certain banks and financial
institutions may be required to be registered as dealerspursuant to state law.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
The fund intends to meet all the requirements and has elected the tax
status of a "regulatedinvestment 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 (net investment income and the excess of net
short-term capital gains over net long-term capital losses), it will be taxed
only on that portion of its investment company taxable income that it retains.
To qualify as a regulated investment company, the fund must (a) derive at
least 90% of its grossincome 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 regulatedinvestment 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"
generally means the sum of (i) 98% of taxable net investment income) for the
calendar year, (ii) 98% of capital gains (both long-term and short-term) for
the one-year period ending on October 31 (as though the one-year period ending
on October 31 were the regulated investment company's taxable year), and (iii)
the sum of any untaxed, undistributed taxable 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 distributed by the
fund during the calendar year and (ii) any amount on which the fund pays income
tax during the periods described above. The fund intends to distribute net
investment income and net capital gains so as to minimize or avoid the excise
tax liability. Distributions of investment company taxable income, including
short-term capital gains, generally are taxable to the shareholder as ordinary
income, regardless of whether such distributions are paid in cash or reinvested
in additional shares of the fund.
The fund intends to continue distributing to shareholders all of the
excess of net long-term capitalgain over net short-term capital loss on sales
of securities ("capital gain distributions"). Such distributions, whether paid
in cash or re-invested in shares, will be taxable to shareholders as long-term
capital gains, regardless of how long a shareholder has held fund shares or
whether such gain was realized by the fund before the shareholder acquired such
shares and was reflected in the price paid for the shares. In particular,
investors should consider the tax implications of purchasing shares just prior
to a dividend or capital gain distribution record date.
Dividends and capital gain distributions generally are taxable to
shareholders at the time they arepaid. However, such dividends and
distributions 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 ofDecember 31, provided that the fund pays the dividend and/or
capital gain distributions no later than theend of January of the following
year.
If a shareholder exchanges or otherwise disposes of shares of the fund
within 90 days of havingacquired 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 substantially identical
shares are reacquired within the 61-day period beginning 30 days before and
ending 30 days after the shares are disposed of.
Sales of forward currency contracts which are intended to hedge against a
change in the value ofsecurities 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 purposesof 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 havebeen 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 forpurposes of
the 30% test, as discussed above.
The amount of any realized gain or loss on closing out a forward currency
contracts such as aforward commitment for the purchase or sale of foreign
currency will generally result in ordinary incomeor 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, specialprovisions 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 as discussed above). Such distributions will be
combined with distributions of capital gains realized on the fund's other
investments.
Under the Code, the fund's taxable income for each year will be computed
without regard to anynet 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.
The fund may be required to pay withholding and other taxes imposed by
foreign countriesgenerally 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 dueto 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%. However, to eliminate the
benefit of lower marginal corporate income tax rates, corporationswhich have
income in excess of $100,000 for a taxable year will be required to pay an
additional income tax liability of up to $11,750 and corporations which have
taxable income in excess of $15,000,000 for a taxable year will be required to
pay an additional amount of tax of up to $100,000. Naturally, the amount of
tax payable by 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 generally entitled to
establish and contribute to an IRA each year without regard to extension (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 gaindistributions 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 purchaseorder is received by the fund or American Funds
Service Company; this offering price is effective for orders received prior to
the time of determination of the net asset value and, in the case of orders
placed with dealers, accepted by the Principal Underwriter prior to its close
of business. The dealer is responsiblefor 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 pricesgenerally
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 NewYork 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, arevalued at the last sale price on the exchange on which such
securities are traded, as of the closeof 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 nextdetermination 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 nearest
cent, is the net asset value per share.
Any purchase order may be rejected by the Principal Underwriter or by the
fund. The fund willnot 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 subject to a statement of intention (the"Statement"). The
Statement is not a binding obligation to purchase the indicated amount. When
ashareholder elects to utilize the Statement in order to qualify for a reduced
sales charge, shares equal to5% of the dollar amount specified in the Statement
will be held in escrow in the shareholder's account out of the initial purchase
(or subsequent purchases, if necessary) by the Transfer Agent. All dividends
and any capital gain distributions on shares held in escrow will be credited to
the shareholder's account in shares (or paid in cash, if requested). If the
intended investment is not completed within the specified 13-month period, the
purchaser will remit to the Principal Underwriter the difference between the
sales charge actually paid and the sales charge which would have been paid if
the total of such purchases had been made at a single time. If the difference
is not paid within 45 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. Existing holdings eligible for rights
of accumulation (see the Prospectus and account application) may be credited
toward satisfying the Statement. During the Statement period, reinvested
dividends and capital gain distributions, investments in money market funds,
and investments made under a right of reinstatement will not be credited toward
satisfying the Statement.
In the case of purchase orders by the trustees of certain retirement plans
by payroll deduction, thesales charge for the investments made during the
13-month period will be handled as follows: The regular monthly payroll
deduction investment will be multiplied by 13 and then multiplied by 1.5.
The current value of existing American Funds investments (other than money
market fund investments) and anyrollovers or transfers reasonably anticipated
to be invested in non-money market American Funds during the 13-month period
are added to the figure determined above. The sum is the Statement amount and
applicable sales charge breakpoint level. On the first investment and all
other investments made pursuant to the Statement, a sales charge will be
assessed according to the sales charge breakpoint thus determined. There will
be no retroactive adjustments in sales charges on investments previously made
during the 13-month period.
Shareholders purchasing shares at a reduced sales charge under a Statement
indicate theiracceptance of these terms by their first purchase.
DEALER COMMISSIONS - The following commissions will be paid to dealers who
initiate and are responsible for purchases of $1 million or more, for purchases
by any employer-sponsored 403(b) plan or purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees, and for purchases made at
net asset value by certainretirement plans of organizations with collective
retirement plan assets of $100 million or more: 1.00% on amounts up 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 FundsShareholder
Guide" in the Prospectus for more information.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN - The automatic investment plan enables shareholders
to make regularmonthly 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 dates you select. Bank accounts will be
charged on the day or a few days before investments are credited, depending on
the bank's capabilities, and shareholders will receive a confirmation statement
at least quarterly. Participation in the plan will begin within 30 days after
receipt of the account application. If the shareholder's bank account cannot
be charged due to insufficient funds, a stop-payment order or the closing of
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 automaticwithdrawals. 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 tocross-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 equalor exceed the fund's minimum
initial investment requirement or the fund shall have the right, if
theshareholder 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 salescharge).
REDEMPTION OF SHARES
The fund's Declaration of Trust permits the fund to direct the Transfer
Agent to redeem the sharesof any shareholder for their then current net asset
value per share if at such time the shareholder owns of record, shares having
an aggregate net asset value of less than the minimum initial investment amount
required of new shareholders as set forth in the fund's current registration
statement under the 1940 Act, and subject to such further terms and conditions
as the Board of Trustees of the fund may from time to time adopt.
EXECUTION OF PORTFOLIO TRANSACTIONS
Orders for the fund's portfolio securities transactions are placed by
the Investment Adviser. The Investment Adviser strives to obtain the best
available prices in its portfolio transactions taking intoaccount the costs and
promptness of executions. When circumstances relating to a proposed
transactionindicate that a particular broker is in a position to obtain the
best price and execution, the order is placed with that broker. This may or
may not be a broker who has provided investment research, statistical, or other
related services to the Investment Adviser or has sold shares of the fund or
other funds served by the Investment Adviser. The fund does not consider that
it has an obligation to obtain the lowest available commission rate to the
exclusion of price, service and qualitative considerations.
There are occasions on which portfolio transactions for the fund may be
executed as part ofconcurrent authorizations to purchase or sell the same
security for other funds served by the InvestmentAdviser, 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 onunderwritings, for the fiscal years ended March 31, 1996, 1995
and 1994, amounted to $17,493,000,$7,563,000 and $8,642,000, 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., 3Metrotech Center, Brooklyn , NY
11245, as Custodian. Non-U.S. securities may be held by theCustodian 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, hasserved 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. The selection of the fund's independent accountant is made annually
by the Board of Trustees.
REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on March 31.
Shareholders are provided at leastsemiannually 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 WaterhouseLLP, whose selection is determined annually by the Trustees.
REMOVAL OF TRUSTEES BY SHAREHOLDERS - At any meeting of shareholders, duly
called and at which aquorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votesentitled to be cast
thereon, remove any Trustee or Trustees from office and may elect a successor
orsuccessors to fill any resulting vacancies for the unexpired terms of removed
Trustees. The fund has made an undertaking, at the request of the staff of the
Securities and Exchange Commission, to apply the provisions of section 16(c) of
the 1940 Act with respect to the removal of Trustees, as though the fundwere a
common-law trust. Accordingly, the Trustees of the fund shall promptly call a
meeting of shareholders for the purpose of voting upon the question of removal
of any Trustee when requested in writing to do so by the record holders of not
less than 10% of the outstanding shares.
PERSONAL INVESTING POLICY - Capital Research and Management Company and its
affiliated companies haveadopted 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 IndependentAccountants 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, 1996
<TABLE>
<CAPTION>
<S> <C>
Net asset value and redemption price per share
(Net assets divided by shares outstanding) $24.28
Maximum offering price per share
(100/94.25 of net asset value per share, which takes
into account the fund's current maximum sales charge $25.76
</TABLE>
SHAREHOLDER AND TRUSTEE RESPONSIBILITY - Under the laws of certain states,
including Massachusetts wherethe 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
forthe obligations of the fund. However, the risk of a shareholder incurring
any financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet itsobligations.
The Declaration of Trust contains an express disclaimer of shareholder
liability for acts,omissions, 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 notliable 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 theelections of Trustees and on other matters submitted to the
vote of shareholders. As permitted byMassachusetts 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 questionof
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 1.71% based on a 30-day (or one month) period ended
March 31, 1996,computed by dividing the net investment income per share earned
during the period by the maximumoffering 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
wereentitled 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 ten
year periods as of March 31, 1996 were +12.98%, +11.56% and +13.44%,
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 theSecurities and Exchange Commission: P(1+T)/n/ = ERV.
The following assumptions will be reflected in computations made in
accordance with the formulastated 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 thanthe 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
assumingreinvestment 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 investmentresults 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 taxableinvestments to investments made through tax-deferred
retirement plans. The fund may, from time to time, compare its investment
results with the Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (E.G. food,
clothing and fuels,transportation, and other goods and services that people buy
for day-to-day living).
The investment results set forth below were calculated as described in the
fund's Prospectus. Thefund'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 9 growthand growth & income common stock funds that are at least 10
years old. In the rolling 10-year periods during which these funds were
managed by Capital Research and Management Company since January 1, 1966 ( 121
in all), those funds have had better total returns than the Standard and Poor's
500 Composite Stock Index in 94 of the 121 periods.
Note that past results are not an indication of future investment results.
Also, the fund has differentinvestment 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.
EUPAC vs. Various Unmanaged Indices
Period MSCI
4/1 - 3/31 EUPAC S&P 500/1/ EAFE/2/
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1986 - 1996 252.9% 268.5% 192.5%
1984* - 1996 475.3% 506.0% 462.4%
</TABLE>
/1/ The Standard and Poor's 500 Stock Index is comprised of industrial,
transportation, public utilities andfinancial 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 anarithmetical average, weighted by market value, of the
more than 1,000 securities listed on the stockexchanges of Europe, Australia,
New Zealand and the Far East.
* From inception on April 16, 1984.
___________________________________
If you are considering EUPAC for an Individual Retirement Account . . .
Here's how much you would have if you had invested $2,000 a year in the fund:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 Year 5 Years 10 Years Lifetime
(4/1/95 - 3/31/96) (4/1/91 - 3/31/96) (4/1/86 - 3/31/96) (4/16/84 - 3/31/96)
$2,260 $13,957 $39,725 $61,314
</TABLE>
___________________________________
See the difference time can make in an investment program...
<TABLE>
<CAPTION>
If you had invested ...and taken all distributions
$10,000 in EUPAC in shares, your investment
this many years ago... would have been worth this
much at March 31, 1996
Periods
Number of Years 4/1 - 3/31 Value
<S> <C> <C> <C> <C>
1 1995 - 1996 $ 11,298
2 1994 - 1996 11,375
3 1993 - 1996 14,364
4 1992 - 1996 15,468
5 1991 - 1996 17,280
6 1990 - 1996 18,850
7 1989 - 1996 22,057
8 1988 - 1996 25,298
9 1987 - 1996 27,352
10 1986 - 1996 35,286
11 1985 - 1996 45,476
Lifetime* 1984 - 1996 57,533
</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, 1996)
<TABLE>
<CAPTION>
COST OF SHARES VALUE OF SHARES
Fiscal Total From From From
Year End Annual Dividends Investment Initial Capital Gains Dividends Total
March 31 Dividends (cumulative) Cost Investment Reinvested Reinvested Value
<S> <C> <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 1,006 332 19,827
1988 491 713 10,713 17,370 3,213 854 21,437
1989 316 1,029 11,029 18,379 4,969 1,238 24,586
1990 527 1,556 11,556 19,760 7,128 1,874 28,762
1991 656 2,212 12,212 20,845 7,883 2,653 31,381
1992 611 2,823 12,823 22,857 8,645 3,555 35,057
1993 538 3,361 13,361 24,238 9,167 4,349 37,754
1994 515 3,876 13,876 30,151 11,557 5,962 47,670
1995 716 4,592 14,592 28,695 12,927 6,385 48,007
1996 1,132 5,724 15,724 33,352 15,547 8,634 57,533
</TABLE>
The dollar amount of capital gain distributions during the period was $9,081
(* 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
variousentities in categories ranging from "Aaa" to "C" according to quality.
"AAA -- Best quality. These securities carry the smallest degree of investment
risk and are generallyreferred 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,
suchchanges as can be visualized are most unlikely to impair the fundamentally
strong position of suchissues."
"AA -- High quality by all standards. They are rated lower than the best bonds
because margins ofprotection 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 presentwhich suggest a susceptibility
to impairment sometime in the future."
"BAA -- Medium grade obligations. Interest payments and principal security
appear adequate for thepresent 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,
havespeculative characteristics as well."
"BA -- Have speculative elements; future cannot be considered as well assured.
The protection ofinterest and principal payments may be very moderate and
thereby not well safeguarded during bothgood 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 principalpayments 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 withrespect 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 everattaining any real investment standing."
STANDARD & POOR'S CORPORATION rates the long-term securities debt of various
entities incategories 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 thehigher rated issues only in small degree."
"A - Have a strong capacity to pay interest and repay principal, although they
are somewhat moresusceptible 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 bondsnormally exhibit adequate protection parameters, but
adverse economic conditions or changingcircumstances 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 capacityto 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 riskexposures 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
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.
