THE FUND PROVIDES SPANISH TRANSLATIONS IN CONNECTION WITH THE PUBLIC OFFERING
AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR AND ACCURATE ENGLISH
TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS FOR THE FUND.
/s/ Vincent P. Corti
Vincent P. Corti
Secretary
<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
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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.
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