EUROPACIFIC GROWTH FUND
1997 Annual Report
For the Year Ended March 31
Taking the Long View:
A Look at EuroPacific and its Universe
[cover: graphic: abstract globe]
[The American Funds Group(r)]
EUROPACIFIC GROWTH FUND(r)
Seeks long-term capital appreciation by investing in the securities of
companies based outside the United States. More than half of the world's
investment opportunities can be found beyond the borders of our country. As a
shareholder in the fund, you have access to what we believe are the best of
those opportunities.
A LOOK AT THE FUND'S RESULTS
(total return through 3/31/97, with all distributions reinvested)
Latest year +15.9%
Five years +90.2
Ten years +236.3
Lifetime (since 4/16/84) +607.3
Average annual compound
return over the fund's lifetime +16.3
EUROPACIFIC GROWTH FUND RANKED NUMBER ONE
Over its lifetime, EuroPacific has done better than all other mutual funds with
similar objectives. It ranked first among the 13 international funds in
existence from mid-April 1984, when operations began, to March 31, 1997,
according to Lipper Analytical Services. For the one-, five- and ten-year
periods ended March 31, EuroPacific also finished high in the Lipper rankings.
Over ten years, it ranked 4th out of 28 comparable funds; over five years, 15th
out of 81. For the 12 months ended March 31, EuroPacific was in the top fifth,
ranking 60th out of 351 comparable funds. Lipper rankings are based on total
return and do not reflect the effects of sales charges. The year-by-year record
of an investment made in the fund at the 5.75% sales charge is documented on
page 5.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Sales charges are lower for accounts of $50,000 or more.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
Unless otherwise indicated, returns in this report assume reinvestment of all
distributions.
INTERNATIONAL INVESTING
The 25-Year Record
[watermark: abstract globe]
[graphic: American Flag]
U.S. Stock Market
[graphic: abstract globe]
All Major Stock Markets Outside North America
The percentages on the top lines represent the U.S. stock market; the lower
lines are for all major stock markets outside North America.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1972 1973 1974 1975 1976
+17% -16% -28% +36% +23%
+38% -14% -22% +37% +4%
[globe] [globe] [globe] [globe] [flag]
1977 1978 1979 1980 1981
- -8% +6% +14% +30% -4%
+19% +34% +6% +24% -1%
[globe] [globe] [flag] [flag] [globe]
1982 1983 1984 1985 1986
+22% +22% +6% +33% +18%
- -1% +25% +8% +57% +70%
[flag] [globe] [globe] [globe] [globe]
1987 1988 1989 1990 1991
+4% +16% +31% -2% +31%
+25% +29% +11% -23% +12%
[globe] [globe] [flag] [flag] [flag]
1992 1993 1994 1995 1996
+7% +10% +2% +38% +24%
- -12% +33% +8% +12% +6%
[flag] [globe] [globe] [flag] [flag]
</TABLE>
Note: These figures, based on U.S. dollars, are for calendar years and include
reinvestment of dividends.
This chart, which has appeared in most reports for EuroPacific Growth Fund,
shows that stock markets outside North America have done better, as a group,
than the U.S. market in 15 of the past 25 calendar years. In each of those 15
years, the Morgan Stanley Capital International EAFE(r) (Europe, Australasia,
Far East) Index, which reflects all major stock markets outside North America,
has gone up more or declined less than its U.S. index. (Both indexes are
unmanaged.)
Over the entire 25-year period, the EAFE index gained 2,149% (or an average of
13.3% a year), while the U.S. index rose 1,603% (or an average of 12.0% a
year), both including reinvestment of dividends.
Of course, investing outside the United States is subject to additional risks,
such as currency fluctuations, which are detailed in the fund's prospectus.
FELLOW SHAREHOLDERS
[watermark: abstract globe]
Fiscal 1997 marked another profitable year for EuroPacific Growth Fund. For the
12 months ended March 31, the value of your investment rose 15.9% if, like most
shareholders, you reinvested income dividends totaling 44 cents a share and
capital gain distributions totaling 88 cents a share that were paid during the
period.
Meanwhile, the unmanaged Morgan Stanley Capital International EAFE(r) (Europe,
Australasia, Far East) Index, which measures all major stock markets outside
North America, posted a 12-month increase of 1.8%. The average return for the
351 international funds tracked by Lipper Analytical Services for that period
was 8.6%.
These latest results bring the fund's total return since operations began in
April 1984 to 607.3%, or an average compound return of 16.3% a year. By
comparison, the EAFE index had a return of 472.2% during that period, while the
average international fund provided 421.1%. EuroPacific's return placed it
first among all 13 U.S.-based international funds in existence throughout its
13-year lifetime, according to Lipper.
In the recent fiscal year, the EAFE index was hobbled by the heavy influence of
Japan, where sharp declines in stock prices were intensified by the weakness of
the yen. While EuroPacific's exposure to Japan was fairly sizable - 10% of net
assets as of March 31 - it was much lower than the 29% representation in the
index. The fund was also helped by its investments in the Americas - Canada and
Central and South America - which are not included in the index. (See table at
right.)
STRENGTH THROUGHOUT EUROPE, WEAKNESS IN ASIA
Fiscal 1997 saw broad strength in European stock markets and widespread
weakness in Asia.
In Europe, a number of factors contributed to strong corporate earnings: mild
inflation and falling interest rates; a new focus on restructuring and other
streamlining measures to enhance shareholder value; and the falling value of
many European currencies relative to the U.S. dollar, which made the products
of export-oriented companies more competitive in world markets. Stock prices
advanced strongly; although lower currency exchange rates trimmed returns
slightly for U.S. investors, nearly every major European market posted
double-digit gains for the 12 months, both in dollar terms and local currency.
With nearly half of net assets invested in companies in Europe, your fund was
well positioned to take advantage of those gains.
At the other end of the spectrum, a steadily declining yen translated into a
dramatic 26% loss in the Japanese stock market for U.S. investors. Although the
currency weakness helped boost earnings for exporters, the domestic economy was
hampered somewhat by Japan's banking crisis and faltering consumer confidence.
The weak yen restrained several other Asian markets, while lower prices on
electronic goods battered stock markets in South Korea and Singapore. Hong Kong
was a notable exception: Buoyed by a strong real estate market and little
concern about the reversion to China on July 1, the stock market rose 9% in
U.S. dollar terms.
Elsewhere in the fund's investment universe, the Canadian stock market returned
20% in U.S. dollars for the year as expansionary monetary policy continued to
stimulate economic growth. Farther south, productivity gains and an
increasingly stable economic environment benefited many Latin American markets,
with Brazil gaining 56% in U.S. dollars and Mexico, 19%. EuroPacific's holdings
in the Americas represent about 11% of net assets.
A COMPANY-BY-COMPANY APPROACH
As we have stressed repeatedly, EuroPacific invests in companies, not
countries. Over the years, this approach has enabled us to find attractive
investments even in troubled markets such as Japan's. While not all of our
Japanese holdings were able to buck the decline, the fund's three largest
Japanese stocks - Toyota (+14.8%), integrated circuit manufacturer Rohm
(+30.1%) and video game maker Nintendo (+12.4%) - gained considerable ground
for the fiscal year.
Our emphasis on individual companies is supported by in-depth research into
every security we consider for the fund. That research often leads to large
positions in companies we believe have exceptional prospects for long-term
growth. Most of our ten largest investments posted substantial gains for fiscal
1997, including Orkla (+74.3%), a Norwegian marketer of consumer goods; the
Bank of Nova Scotia (+63.0%); and German luxury car maker BMW (+54.2%).
Although none declined, not all of our larger investments showed such
impressive gains. The fund's biggest holding, Novartis, created by the December
merger of Swiss drug producers Ciba-Geigy and Sandoz, took a breather from last
year's spectacular run. So did Astra (+2.3%), a Swedish pharmaceutical concern
and our second-largest position.
Reflecting our company-by-company approach, EuroPacific Growth Fund remains
extremely well-diversified. On March 31, the fund held securities of more than
250 companies based in over 30 countries. This wide spectrum of holdings is
also a result of the fund's unique management structure - the multiple
portfolio counselor system - which we discuss in more detail in the article
beginning on page 6.
DIVERSE INDUSTRIES
The fund's largest industry concentration is telecommunications, at 10% of net
assets. A number of these companies operate in markets that are relatively
underserviced and have experienced remarkable growth as they rapidly build
networks to accommodate increasing consumer demand. A case in point is
Telecomunicacoes Brasileiras (Telebras), which the fund has owned since 1991;
it was the largest gainer for the fiscal year, rising 105.8%. We have been
adding to another telecommunications investment, Telefonica de Espana; it is
now the fund's seventh-largest holding. The stock price of the company, which
has been aggressively expanding its mobile communications businesses in Spain
and Latin America, rose 55.4%.
The fund also continues to be well-represented in financial services companies,
many of which are focusing on improving profitability by cutting costs and
enhancing customer services. We have been making substantial investments in
this area: of 79 companies added to the portfolio during the year, 16 were
banks. It is the fund's second-largest industry concentration.
All told, EuroPacific's investments spanned 33 industries. The portfolio
beginning on page 12 shows a complete list of the fund's holdings by industry.
GROWING OPPORTUNITIES
Your fund has grown dramatically. Net assets on March 31 stood at $16.7
billion, up about 36% from a year ago. While some of that growth comes from the
appreciation of the securities in the portfolio, we have also added many new
shareholder accounts. Fortunately, one of the strengths of the fund's multiple
portfolio counselor system is that it accommodates growth easily.
Looking forward, we continue to find attractive securities in which to invest.
Many publicly traded companies are taking steps to become globally competitive
and improve their return on capital. Furthermore, as an increasing number of
markets reduce restrictions on foreign investors, the fund's geographic
universe - and thus the sheer number of investment opportunities - expands.
Your fund has ample buying reserves, with more than 12% of net assets in cash
and equivalents.
Of course, while years like the one just past are always gratifying, the rapid
rise of world markets suggests caution as we move ahead. This is particularly
true after the recent rise in U.S. interest rates, which is likely to affect
markets in other countries as well. However, as we have mentioned many times
before, we have always maintained a long-term perspective on our holdings and
would urge shareholders to do the same.
On the following pages, we invite you to examine the world of EuroPacific
Growth Fund. While this will be especially helpful to the newest members of our
family, those of you who have been with us for some time should also find it
informative.
We look forward to reporting to you again in six months.
Cordially,
[/s/Walter P. Stern]
Walter P. Stern
Chairman of the Board
[/s/Thierry Vandeventer]
Thierry Vandeventer
President
May 12, 1997
[Pull Quote]
EuroPacific's company-by-company approach has enabled us to find attractive
investments even in troubled markets such as Japan's.
[End Pull Quote]
WHERE THE FUND'S ASSETS ARE INVESTED
(percent invested by country)
<TABLE>
<CAPTION>
EAFE
EuroPacific Growth Fund Index*
(3/31/97) (3/31/96) (3/31/97)
<S> <C> <C> <C>
Asia/Pacific Rim
Japan 10.2% 11.8% 29.1%
Australia 5.8 7.0 3.0
Hong Kong 3.4 4.1 3.6
New Zealand 1.5 1.8 -
South Korea 1.1 1.3 -
Philippines .9 1.0 -
India .8 - -
Indonesia .6 .6 -
Other Asia/Pacific Rim .9 .8 4.4
25.2 28.4 40.1
Europe
United Kingdom 11.8 8.3 19.5
Sweden 6.3 9.1 2.7
France 6.0 5.6 7.4
Germany 5.7 5.7 9.3
Netherlands 5.4 5.9 5.1
Switzerland 3.9 4.5 6.2
Italy 2.8 2.8 3.2
Spain 2.8 2.5 2.2
Norway 1.6 1.0 .6
Finland 1.3 1.2 .7
Ireland .8 .6 -
Denmark .5 .6 1.0
Other Europe .2 1.3 2.0
49.1 49.1 59.9
The Americas
Canada 4.7 3.4 -
Mexico 2.8 2.4 -
Brazil 1.7 1.3 -
Argentina 1.1 .7 -
Chile .5 - -
Other Americas .4 .1 -
11.2 7.9 -
Other Countries 2.1 1.8 -
Cash and Equivalents 12.4 12.8 -
Total 100.0% 100.0% 100.0%
</TABLE>
*Weighted by market capitalization
[Pull Quote]
Your fund has grown dramatically. Net assets on March 31 stood at $16.7
billion, up about 36% from a year ago.
[End Pull Quote]
HOW A $10,000 INVESTMENT HAS GROWN
Here's how a $10,000 investment in the fund grew between April 16, 1984 - when
the fund began - and March 31, 1997. The chart shows the high, low and closing
values for each year. As you can see, that $10,000 investment in EuroPacific
Growth Fund would have increased in value to $66,672 with all distributions
reinvested. Furthermore, that long-term growth has occurred despite events that
may have negatively affected world markets over the short term.
The fund's year-by-year results appear in the table under the chart. Those
results have been positive in each of 12 full fiscal years since operations
began. The boxed figure at the far right shows that over EuroPacific's lifetime
an investment in the fund, made at the maximum sales charge, grew at an average
compound rate of 15.8% a year.
The black line tracks the Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) Index. The Japanese market is the largest single
component in the index. For this reason the index outpaced the fund in the last
half of the 1980s, a period when Japanese stock prices were soaring.
[chart]
<TABLE>
<CAPTION>
EuroPacific
Growth Fund
with
dividends Consumer
Year ended reinvested MSCI EAFE Price Index
March 31 /1/,/2/ Index /3/ (inflation) /4/
<S> <C> <C> <C> <C>
4/16/84 $9,425 $10,000 $10,000
1985 9,948 10,348 10,320 IRAN/IRAQ WAR ESCALATES
1986 15,368 19,228 10,553 GORBACHEV CALLS FOR SWEEPING CHANGES
1987 19,827 31,010 10,873 BOMBING OF LIBYA
1988 21,437 36,220 11,300 GLOBAL STOCK MARKET COLLAPSE
1989 24,586 40,522 11,862 EASTER EUROPE UPRISING
1990 28,762 35,925 12,483 TIANANMEN SQUARE MASSACRE
1991 31,381 36,954 13,094 PERSIAN GULF WAR
1992 35,057 34,104 13,511 USSR DISINTEGRATES
1993 37,754 38,200 13,928 EUROPEAN CURRENCY CRISIS
1994 47,670 46,923 14,277 RWANDAN VIOLENCE ESCALATES
1995 48,007 49,913 14,685 MEXICAN PESO DEVALUED
1996 57,533 56,238 15,102 ISRAELI PRIME MINISTER ASSASSINATED
1997 66,672 57,224 15,519 JAPANESE BANKING CRISIS
</TABLE>
- ---
<TABLE>
<CAPTION>
Year Ended March 31 1985# 1986 1987 1988 1989 1990 1991
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL VALUE
Dividends Reinvested $69 35 118 491 316 527 656
Value at Year-End /1/ $9,948 15,368 19,827 21,437 24,586 28,762 31,381
Total Return (0.5)% 54.5 29.0 8.1 14.7 17.0 9.1
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
TOTAL VALUE
Dividends Reinvested 611 538 515 716 1,132 1,063
Value at Year-End /1/ 35,057 37,754 47,670 48,007 57,533 66,672
Total Return 11.7 7.7 26.3 0.7 19.8 15.9
</TABLE>
Average annual compound return for fund's lifetime: 15.8% /1/
# For the period April 16, 1984 (commencement of operations) through March 31,
1985.
/1/ These figures, unlike those shown earlier in this report, reflect payment
of the maximum sales charge of 5.75% on the original investment. Thus, the net
amount invested was $9,425. As outlined in the prospectus, the sales charge is
reduced for larger investments. There is no sales charge on dividends or
capital gain distributions that are reinvested in additional shares. The
maximum initial sales charge was 8.5% prior to July 1, 1988. Results shown do
not take into account income or capital gain taxes.
/2/ Includes reinvested dividends of $6,787 and reinvested capital gain
distributions of $11,188.
/3/ With dividends reinvested.
/4/ Begins April 30, 1984. Computed from data supplied by the U.S. Department
of Labor, Bureau of Labor Statistics.
The indexes are unmanaged and do not reflect sales charges, commissions or
expenses.
Past results are not predictive of future results.
[end chart]
Average Annual Compound Returns
(for periods ended March 31, 1997)
Ten Years +12.23%
Five Years +12.38%
One Year +9.23%
Assumes reinvestment of all distributions and payment of the 5.75% maximum
sales charge at the beginning of the stated periods.
TAKING THE LONG VIEW: A LOOK AT EUROPACIFIC GROWTH FUND AND ITS UNIVERSE
WHO INVESTS IN EUROPACIFIC?
[watermark: question mark]
[watermark: abstract globe]
EUROPACIFIC'S DIVERSE FAMILY OF SHAREHOLDERS RANGES FROM INDIVIDUALS OF ALL
AGES AND BACKGROUNDS TO SOME OF AMERICA'S LARGEST CORPORATIONS.
EuroPacific Growth Fund was created in 1984, making it one of the pioneers
among the approximately 500 international mutual funds available today.
Although the fund itself has been around for some time, many of our
shareholders are newcomers. EuroPacific's recent "baby boom" has been dramatic.
The number of shareholder accounts has more than quadrupled in the past five
years and almost doubled in the last three.
You and your fellow shareholders form a diverse group of individuals of all
ages, each with unique circumstances, needs and objectives. Some invest in the
fund as part of an overall asset allocation strategy. Others look to the fund
to help finance a child's college education or meet other long-term goals. And
a great many of you are making regular contributions to EuroPacific through
401(k)s and other tax-deferred retirement programs at work (see Family Tree
opposite).
No matter what their goals, however, what shareholders have in common is a
belief that a carefully selected portfolio of international stocks can help
them meet their long-term financial goals. An investment in EuroPacific
represents part-ownership in hundreds of companies diversified among many
countries and a multitude of industries. That ownership stake allows you to
participate in some of the most interesting - and rewarding - growth
opportunities available.
Some funds that invest outside the United States also invest here at home; they
are typically called "global" funds. EuroPacific is classified as an
"international" fund and invests only in companies based outside the U.S. That
is useful for investors who want to determine their own exposure to non-U.S.
equity markets by blending EuroPacific with funds that invest exclusively
inside the United States. EuroPacific is also more broadly diversified than
international funds that are restricted to particular markets or regions. We
believe that flexibility has made a meaningful difference over time.
Perhaps most important of all, EuroPacific gives you access to the professional
management of Capital Research and Management Company (CRMC), the fund's
investment adviser. With more than 40 years of international investment
experience, CRMC is guided by a time-tested philosophy - characterized by a
long-term view and in-depth research - that has helped make EuroPacific truly
unique.
On the next few pages, we invite you to meet the investment professionals who
manage your holdings in the fund. They share some insights on why international
investing makes so much sense over the long term and on what makes your fund so
special.
INVESTING AWAY FROM HOME
More Americans than ever are adopting a global investment strategy. Since
EuroPacific began operations, the flow of funds into stock markets outside the
United States has increased more than 20-fold. A large portion of that flow is
through mutual funds.
[bar chart]
[graphic: flags of various countries]
1984 $ 31
1985 49
1986 79
1987 87
1988 104
1989 144
1990 138
1991 195
1992 226
1993 416
1994 486
1995 608
1996 843
Source: U.S. Federal Reserve Flow of Funds (as of 12/31 of each year).
Figures show U.S. investments in non-U.S. equities in billions of dollars. They
include investments in global mutual funds, which invest in U.S. securities as
well.
[end bar chart]
[Pull Quote]
"Shareholders have been attracted to EuroPacific because it has had low
volatility, a proven track record and attractive long-term returns."
Steve Bepler
EuroPacific portfolio counselor
[End Pull Quote]
EUROPACIFIC'S FAMILY TREE
[graphic: tree with roots]
TOTAL SHAREHOLDER ACCOUNTS
933,790
(Assets: $16.7 billion)
INDIVIDUALS
639,418
($7.7 billion)
Men
Women
Joint
IRAs
Guardians
INSTITUTIONS
99,812
($4.7 billion)
Pensions
Businesses
Foundations
401(k)s
BROKERAGE*
194,560
($4.3 billion)
*These are shareholder accounts held by brokerage firms.
TAKING THE LONG VIEW$
WHY INVEST INTERNATIONALLY?
[watermark: question mark]
[watermark: abstract globe]
EXPANDING YOUR INVESTMENT UNIVERSE BROADENS YOUR OPPORTUNITIES FOR ATTRACTIVE
LONG-TERM GROWTH. WHAT'S MORE, A PORTFOLIO DIVERSIFIED ACROSS NATIONAL BORDERS
CAN HELP SMOOTH OUT THE PEAKS AND VALLEYS OF MARKET VOLATILITY.
The world is becoming increasingly interconnected. Air travel has made the most
remote locations easily accessible; electronic transmission allows cheap,
split-second communication across continents; television and other media have
reached cultures that were virtually isolated a decade ago. This change in the
way we live is reflected in the way most companies are managed, by the
diversity of the world's stock markets and through the investment opportunities
that diversity affords.
These opportunities are everywhere (see opposite). "International markets make
sense for many investors because there are so many attractive companies outside
the U.S.," notes Thierry Vandeventer, the Geneva-based president of EuroPacific
and one of its six portfolio counselors.
Of course, not every stock makes a sensible investment. Our analysts look for
companies with sound fundamentals and good prospects for growth. Many are
multinational corporations that do a majority of their business beyond the
countries in which they are headquartered. "These companies have understood
that in order to grow, they have to be global," says Janet McKinley, one of two
portfolio counselors based in New York. "They just happen to be headquartered
in Holland or Switzerland."
Developing markets, many of which have only recently opened to foreign
investors, are also beginning to play a prominent role. The rapid expansion of
many of these economies has stimulated demand for everything from basic
infrastructure to consumer goods. Those needs, which are supplied by both local
firms and giant global corporations, provide important avenues for growth.
Although the fund's primary focus is on the major international markets,
EuroPacific has the flexibility to invest in attractive companies wherever the
fund's analysts find them, be it Latin America, Southeast Asia or Eastern
Europe.
As the table on page 1 showed, non-U.S. stocks have outpaced U.S. stocks in 15
of the past 25 years. "Over the long term, it has been advantageous to invest
outside the United States," says Rob Lovelace, who was a research analyst
focusing on developing markets for seven years before becoming a portfolio
counselor two years ago. Although U.S. stock prices have been particularly
strong in recent years, no one can predict when the tide will turn. "That's why
it's so important to diversify," stresses Rob.
Janet couldn't agree more. She is convinced that, over time, international
diversification not only helps smooth the "leaps and lags" of different
markets, but that "when the U.S. market is very expensive, lagging non-U.S.
markets may offer better values."
Of course, investing internation-ally isn't easy: Non-U.S. markets are subject
to complex regulations and involve special risks and consid-erations beyond the
scope of most individual investors. It is a process that can be time-consuming
and quite costly, which is why so many investors turn to professionals to
manage their assets overseas.
AN ABOVE-AVERAGE RECORD
Markets in different countries don't always move in sync. International
diversification, combined with careful stock selection, can help investors
enhance returns and reduce volatility. While funds invested only in certain
regions or countries may do well over shorter periods, over its lifetime
EuroPacific's focus on individual companies has helped the fund outpace not
only the average international fund, but the average U.S. growth fund as well.
[chart]
[graphic: mountains]
<TABLE>
<CAPTION>
Average
Year Ended Average U.S. International
March 31 EuroPacific Growth Fund Fund
<S> <C> <C> <C>
4/16/84 $9,425 $10,000 $10,000
1985 9,948 11,637 9,883
1986 15,368 15,761 16,613
1987 19,827 19,021 22,965
1988 21,437 17,402 23,511
1989 24,586 19,920 26,276
1990 28,762 23,093 29,474
1991 31,381 26,435 29,657
1992 35,057 30,413 30,428
1993 37,754 34,279 32,512
1994 47,670 35,917 40,536
1995 48,007 39,092 39,908
1996 57,533 50,206 46,349
1997 66,672 56,106 50,386
</TABLE>
Based on fiscal year figures with all distributions reinvested. Source for fund
averages: Lipper Analytical Services. Chart shows growth of $10,000 invested in
EuroPacific at inception vs. average U.S.-based growth fund and average
international fund. EuroPacific's results reflect payment of the maximum sales
charge.
[end chart]
[Pull Quote]
"Investing in only one country is a bit like running a race on only one leg.
That's because the best companies are not necessarily in the U.S."
Mark Denning
EuroPacific portfolio counselor
[End Pull Quote]
Of the nine rolling 10-year periods since 1979, non-U.S. stocks have outpaced
U.S. stocks in all but two.
Source: MSCI EAFE and USA indexes, based on calendar years
A WORLD OF CHOICE
More than 20,000 stocks are listed on exchanges outside the United States.
These companies range from small local firms in developing countries to
multinational giants doing business around the globe. Your fund's investment
professionals carefully sift through this vast pool seeking securities with
attractive prospects for growth - at reasonable prices.
[graphic: countries with flags]
Canada 1,878
USA 9,072
Central America 193
So. America 1,564
Europe 9,227
Other 1,729
Asia/Pacific 7,931
Source: Federation Internationale des Bourses de Valeurs, 12/96
Approximately 10% of stocks are listed on more than one exchange.
TAKING THE LONG VIEW...
WHAT MAKES EUROPACIFIC UNIQUE?
[watermark: question mark]
[watermark: abstract globe]
USING A TIME-TESTED MANAGEMENT PROCESS, YOUR FUND TAKES A RESEARCH-INTENSIVE,
BOTTOM-UP APPROACH TO FINDING THE BEST COMPANIES AVAILABLE IN FINANCIAL MARKETS
OUTSIDE THE UNITED STATES.
EuroPacific's analysts take a value-oriented investment approach, emphasizing
capably managed companies with unrecognized potential. "What we're looking
for," says Thierry, "are well-run businesses, selling at reasonable prices,
which are likely to generate wealth for shareholders over the long term."
It is an approach that relies on the research capabilities and time-tested
investment philosophy of Capital Research and Management Company, the fund's
adviser. CRMC, which traces its roots to 1931, set up its first non-U.S.
research base in the early 1960s. What started as a single office in Geneva has
grown into one of the industry's most elaborate global intelligence networks.
Each year, CRMC's research analysts - who hail from diverse cultural, business
and national backgrounds - make thousands of research calls to gain insights
into the global marketplace. Today, The Capital Group Companies, of which CRMC
is a part, are the largest U.S.-based investors in international equities.
While other firms have offices in different parts of the world, few are as
coordinated as CRMC. "It's not just the communication that's so impressive,"
says Martial Chaillet, a portfolio counselor who has been with the organization
since 1972. "It's also the process linked to the communication that makes CRMC
so special." Analysts and portfolio counselors share information at weekly
conference calls and make joint visits to companies so that people with
different responsibilities can contribute their own perspectives to investment
decisions.
That diversity of opinions is the hallmark of CRMC's management process: the
multiple portfolio counselor system (see opposite). This approach, which has
been employed since 1958, encourages fresh ideas and independent thinking.
Furthermore, by giving shareholders the benefit of a range of viewpoints and
investment styles, we believe this system has contributed importantly to the
fund's impressive and consistent track record.
Because so much careful research goes into each investment, the fund tends to
hold securities longer than many funds. "Our analysts ask very different sorts
of questions," notes Steve Bepler, one of the fund's original portfolio
counselors. "Instead of wondering $Where will this stock be in three to six
months?' they ask $Where will this company be in five or ten years?'"
Low turnover rates help keep EuroPacific's costs extremely low. The fund has
held its stocks an average of six years, keeping trading costs to a minimum. In
addition, the fund's operating expenses are about half of the industry average.
Mark Twain once wrote that the best strategy was to "put all your eggs in one
basket and - WATCH THAT BASKET." Your investment in EuroPacific Growth Fund, a
broadly diversified basket of international stocks, is carefully watched by one
of the most experienced investment firms in the country.
[Pull Quote]
"Some portfolio counselors like buying quality growth companies at reasonable
prices, while others prefer to seek growth by buying companies at cyclical
lows. We have a management structure that encompasses both styles."
Janet McKinley
EuroPacific portfolio counselor
[End Pull Quote]
A DIVERSITY OF RESOURCES
CRMC's far-flung research network has few equals in the industry. It employs
more than 100 investment professionals who comb the globe, studying countries,
governments and individual securities. Last year, they made more than 7,500
visits to companies in 54 countries.
[graphic: three various suitcases]
NUMBER OF RESEARCH VISITS
5,159 North America
26 Eastern Europe
48 Africa
211 Central & South America
1,501 Europe
1,013 Asia/Pacific Rim
100+ INVESTMENT PROFESSIONALS
31 Nationalities
37 Languages
NINE RESEARCH OFFICES
New York
Los Angeles
San Francisco
Washington, D.C.
London
Geneva
Hong Kong
Tokyo
Singapore
A UNIQUE APPROACH TO MANAGING ASSETS
By blending individual effort with teamwork, the multiple portfolio counselor
system combines the best attributes of single-manager and committee management
structures. - Each of EuroPacific's portfolio counselors manages his or her
portion of the fund's assets independently. Research analysts also manage a
segment, bringing their extensive knowledge directly to bear on the fund. All
investments are monitored for consistency with the fund's objectives and
overall guidelines. - It is also the best process we know of to accommodate
growth. This flexibility has been particularly important as EuroPacific's
assets have increased. When the fund began operations in 1984, it had three
portfolio counselors and seven research analysts. Today, it is managed by six
portfolio counselors, with an average of 20 years of experience with the
Capital organization, and 29 research analysts.
[graphic: file folders around a compass]
THIERRY VANDEVENTER
34 years
Geneva
STEVE BEPLER
25 years
New York
RESEARCH PORTFOLIO
29 analysts
MARK DENNING
15 years
London
ROB LOVELACE
12 years
Los Angeles
JANET MCKINLEY
15 years
New York
MARTIAL CHAILLET
25 years
Geneva
<TABLE>
EuroPacific Growth Fund
Investment Portfolio March 31, 1997
<S> <C> <C> <C>
Percent
Industry Diversification Largest Individual of Net
9.95% Telecommunications Holdings Assets
9.03% Banking Novartis 2.22%
6.72% Automobiles Astra 1.83%
6.66% Health & Personal Care ING 1.68
5.34% Broadcasting & Publishing Mannesmann 1.68
48.92% Other Industries Bayerische Motoren Werke 1.46
13.38% Bonds, Cash and Equivalents Volvo 1.39
Telefonica de Espana 1.27
Orkla 1.17
Australia and New Zealand
Banking Group 1.16
Bank of Nova Scotia 1.16
EQUITY-TYPE SECURITIES Shares or Market Percent
(common and preferred stocks and convertible debentures) Principal Value of Net
Amount (Millions) Assets
Telecommunications- 8.68%
Telefonica de Espana, SA (Spain) 8,155,000 $ 201.997
Telefonica de Espana, SA (American Depositary Receipts) 153,000 10.978 1.27%
Telecom Italia Mobile SpA (Italy) 51,390,000 150.635
Telecom Italia Mobile SpA, savings shares 23,105,000 39.389 1.14
Telefonos de Mexico, SA de CV, Class L (American
Depositary Receipts) (Mexico) 4,372,000 168.322
Telefonos de Mexico, SA de CV, Class L 9,612,500 18.479 1.12
Hong Kong Telecommunications Ltd. (Hong Kong) 77,653,848 132.794 .79
British Telecommunications PLC (United Kingdom) 15,950,000 116.797 .70
Telecom Corp. of New Zealand Ltd. (New Zealand) 16,780,173 76.388
Telecom Corp. of New Zealand Ltd. /1/ 6,519,900 29.680
Telecom Corp. of New Zealand Ltd. (American Depositary
Receipts) 31,800 2.258 .65
Telecom Italia SpA (Italy) 24,605,000 62.949
Telecom Italia SpA, savings shares 18,000,000 38.940 .61
Koninklijke PTT Nederland NV (Netherlands) 2,601,900 96.387 .58
Tele Danmark AS, Class B (Denmark) 1,000,000 52.532
Tele Danmark AS, Class B (American Depositary Receipts) 1,050,400 27.442 .48
Telefonica del Peru SA (American Depositary Receipts) (Peru) 2,987,900 66.481 .40
Telecomunicacoes Brasileiras SA, preferred nominative
(American Depositary Receipts) (Brazil) 577,436 59.115 .35
Philippine Long Distance Telephone Co. (American Depositary
Receipts) (Philippines) 426,250 25.522
Philippine Long Distance Telephone Co., convertible preferred
shares, Series III (Global Depositary Receipts) 400,000 22.000
Philippine Long Distance Telephone Co., convertible preferred
shares, Series II (Global Depositary Receipts) /1/ 220,000 7.480 .33
Perusahaan Perseroan (Persero) PT Indonesian Satellite Corp.
(American Depositary Receipts) (Indonesia) 1,078,600 28.853
Perusahaan Perseroan (Persero) PT Indonesian Satellite Corp. 8,550,000 22.800 .31
Mahanagar Telephone Nigam Ltd. (India) 7,600,000 51.162 .31
SK Telecom Co. Ltd. (South Korea) 39,880 37.138 .22
STET-Societa Finanziaria Telefonica p.a., nonconvertible
savings shares (Italy) 6,100,000 22.118
STET-Societa Finanziaria Telefonica p.a. 3,335,000 14.933 .22
Deutsche Telekom AG (Germany) 1,213,500 27.856 .17
Videsh Sanchar Nigam Ltd. (Global Depositary Receipts)
(India) /1/ /2/ 1,511,309 26.523 .16
DDI Corp. (Japan) 2,400 15.160 .09
Vodafone Group PLC (American Depositary Receipts)
(United Kingdom) 105,000 4.633 .03
Kokusai Denshin Denwa Co., Ltd. (Japan) 70,300 4.100 .02
Banking- 9.03%
Australia and New Zealand Banking Group Ltd. (Australia) 30,631,058 194.064 1.16
Bank of Nova Scotia (Canada) 5,266,300 193.723 1.16
Royal Bank of Canada (Canada) 3,847,700 149.325 .89
ABN AMRO Holding NV (Netherlands) 1,905,402 131.015 .78
Banco de Santander, SA (Spain) 1,531,800 107.259
Banco de Santander, SA (American Depositary Receipts) 308,200 20.958 .77
Westpac Banking Corp. (Australia) 21,935,130 127.275 .76
HSBC Holdings PLC (Hong Kong) 4,776,800 110.971
HSBC Holdings PLC (United Kingdom) 172,223 4.229 .69
Lloyds TSB Group plc (United Kingdom) 11,670,000 95.814 .57
Sakura Bank, Ltd. (Japan) 7,311,000 40.978
Sakura Finance (Bermuda) Trust, convertible preference share
units 269 12.336 .32
Bank of Scotland (United Kingdom) 8,045,000 42.315 .25
Bank of Tokyo-Mitsubishi, Ltd. (Japan) 1,151,000 17.967
MBL International Finance, 3.00% convertible debentures 2002
(Bermuda) $15,000,000 15.394 .20
Grupo Financiero Banamex Accival, SA de CV, Class B (Mexico) /2/ 9,530,000 21.667
Grupo Financiero Banamex Accival, SA de CV, Class L /2/ 2,207,777 4.456 .16
National Australia Bank Ltd. (Australia) 2,060,606 26.094 .16
Allied Irish Banks, PLC (Ireland) 3,750,000 25.580 .15
Kookmin Bank (Global Depositary Receipts) (South Korea) /1/ 1,390,000 24.985 .15
Hanil Bank (South Korea) 4,241,600 23.749 .14
Fuji Bank, Ltd. (Japan) 1,340,000 15.498
Fuji International Finance (Bermuda) Trust, convertible
preference share units 260 5.930 .13
Toyo Trust and Banking Co., Ltd. (Japan) 2,700,000 18.627 .11
Barclays PLC (United Kingdom) 1,000,000 16.782 .10
Yasuda Trust and Banking Co., Ltd. (Japan) 5,100,000 14.231 .08
Credit Commercial de France (France) 250,501 12.015 .07
Bangkok Bank Public Co. Ltd., 3.25% convertible debentures
2004 (Thailand) Y10,000,000 9.300 .06
Mitsui Trust and Banking Co. Ltd. (Japan) 1,475,000 8.470 .05
Korea First Bank (South Korea) 2,010,000 8.216 .05
Shinhan Bank (South Korea) 454,473 6.480 .04
Asahi Bank, Ltd. (Japan) 850,000 5.349 .03
Sumitomo Bank, Ltd., 0.75% convertible debentures 2001
(Japan) DM100,000,000 .849 .00
Automobiles- 6.72%
Bayerische Motoren Werke AG (Germany) 271,909 220.004
Bayerische Motoren Werke AG, preferred shares 43,636 24.453 1.46
Volvo AB, Class B (Sweden) 8,545,000 232.758 1.39
Daimler-Benz AG (Germany) /2/ 1,221,150 97.633
Daimler-Benz AG, 4.125% convertible debentures 2003 /1/ $101,914,000 86.735 1.10
Honda Motor Co., Ltd. (Japan) 4,784,000 142.777 .85
Toyota Motor Corp. (Japan) 4,890,000 123.792 .74
Suzuki Motor Corp. (Japan) 7,859,000 76.276 .46
Regie Nationale des Usines Renault, SA (France) 1,924,454 48.702 .29
Peugeot SA (France) 300,000 34.223 .20
Volkswagen AG (Germany) 44,400 24.535 .15
Hyundai Motor Co. (Global Depositary Receipts) (South Korea) /1/ 940,000 7.661
Hyundai Motor Co. (Global Depositary Receipts) 800,000 6.520 .08
Health & Personal Care- 6.66%
Novartis AG (Switzerland) 300,088 372.399 2.22
AB Astra, Class A (Sweden) 5,340,000 254.815
AB Astra, Class B 1,130,000 52.124 1.83
Zeneca Group PLC (United Kingdom) 3,750,000 108.638 .65
Elan Corp., PLC (American Depositary Receipts) (Ireland) /2/ 2,294,600 78.303 .47
Glaxo Wellcome PLC (United Kingdom) 2,185,000 40.099
Glaxo Wellcome PLC (American Depositary Receipts) 1,000,000 35.375 .45
Hoya Corp. (Japan) 1,544,000 69.183 .41
Teva Pharmaceutical Industries Ltd. (American Depositary
Receipts) (Israel) 800,000 44.400 .27
SmithKline Beecham PLC (American Depositary Receipts)
(United Kingdom) 500,000 35.000 .21
Synthelabo (France) 128,000 13.121 .08
Sankyo Co., Ltd. (Japan) 442,000 12.190 .07
Multi-Industry- 5.40%
Orkla AS, Class A (Norway) 1,974,000 158.938
Orkla AS, Class B 500,000 37.680 1.17
Hutchison Whampoa Ltd. (Hong Kong) 19,430,000 146.072 .87
Siebe PLC (United Kingdom) 5,450,000 91.911 .55
Swire Pacific Ltd., Class A (Hong Kong) 10,305,000 81.129 .48
Lend Lease Corp. Ltd. (Australia) 4,341,120 74.409 .44
Jardine Strategic Holdings Ltd. (Singapore - Incorporated in
Bermuda) 14,375,000 49.737
Jardine Strategic Holdings Ltd., 7.50% convertible Eurobonds
2049 $11,631,000 12.707
Jardine Strategic Holdings Ltd. (American Depositary
Receipts) 300,000 2.064
Jardine Strategic Holdings Ltd., warrants, expire 1998 /2/ 1,375,000 .447 .39
Brierley Investments Ltd. (New Zealand) 42,638,320 39.709
Brierley Investments Ltd., convertible preferred shares 2,105,750 1.829 .25
B A T Industries PLC (United Kingdom) 4,720,000 40.149 .24
Industriforvaltnings AB Kinnevik, Class B (Sweden) 1,059,111 29.130
Industriforvaltnings AB Kinnevik, Class A 302,260 8.133 .22
Imasco Ltd. (Canada) 1,350,000 34.001 .20
Ayala Corp., Class B (Philippines) 28,716,500 29.436 .18
Preussag AG (Germany) 78,500 21.160
Preussag AG, warrants, expire 2001 /2/ 30,200 1.774 .14
Incentive AB, Class B (Sweden) 250,000 16.966
Incentive AB, Class A 59,850 4.046 .13
First Pacific Co. Ltd. (Hong Kong) 15,928,210 20.249 .12
Groupe Bruxelles Lambert SA, warrants, expire 1998 (Belgium) /2/ 126,900 2.602 .02
Broadcasting & Publishing- 5.34%
News Corp. Ltd. (American Depositary Receipts) (Australia) 3,958,200 71.248
News Corp. Ltd., preferred shares 11,017,777 43.195
News Corp. Ltd. 7,982,052 37.239
News Corp. Ltd., preferred shares (American Depositary
Receipts) 1,181,600 17.576 1.01
Mediaset SPA (Italy) /1/ /2/ 16,174,544 65.047 .39
Mediaset SPA /1/ 8,093,000 32.547 .19
CANAL+ (France) 373,495 73.516 .44
Soft Bank Corp. (Japan) 895,440 56.852 .34
Carlton Communications PLC (United Kingdom) 5,441,250 46.687 .28
Television Broadcasts Ltd. (Hong Kong) 11,467,000 46.619 .28
Publishing & Broadcasting Ltd. (PBL) (Australia) 8,558,626 46.170 .28
Grupo Televisa, SA (American Depositary Receipts) (Mexico) /2/ 1,791,800 44.571 .27
Thompson Corp. (Canada) 2,150,000 42.497 .25
Pathe (France) 140,300 35.955 .21
Independent Newspapers, PLC (Ireland) 6,506,544 35.075 .21
NV Verenigd Bezit VNU (Netherlands) 1,670,000 34.360 .21
Reed International PLC (United Kingdom) 1,155,634 21.284
Elsevier NV (Netherlands) 725,000 11.786 .20
Wolters Kluwer NV (Netherlands) 257,659 31.025 .19
Pearson PLC (United Kingdom) 2,210,000 26.481 .16
Daily Mail and General Trust PLC, Class A (United Kingdom) 790,000 21.426 .13
Nippon Television Network Corp. (Japan) 75,000 20.564 .12
Television Francaise 1 SA (France) 165,000 16.532 .10
United News & Media PLC, 6.125% convertible debentures 2003
(United Kingdom) GBP7,400,000 12.772 .08
Energy Sources- 3.80%
TOTAL, Class B (France) 1,177,461 102.030
TOTAL, Class B (American Depositary Receipts) 1,033,547 43.797 .87
Royal Dutch Petroleum Co. (Netherlands) 400,000 72.619
Royal Dutch Petroleum Co. (New York Registered Shares) 115,000 20.125
'Shell' Transport and Trading Co., PLC (New York Registered
Shares) (United Kingdom) 225,000 23.513 .69
Repsol SA (American Depositary Receipts) (Spain) 1,150,000 46.862
Repsol SA 950,000 40.599 .52
Societe Nationale Elf Aquitaine (France) 850,000 87.284 .52
Sasol Ltd. (South Africa) 4,169,940 44.587 .27
Suncor Inc. (Canada) 1,000,000 44.085 .26
Woodside Petroleum Ltd. (Australia) 4,200,000 30.937 .18
ENI SpA (American Depositary Receipts) (Italy) 550,000 27.844 .17
YPF SA, Class D (American Depositary Receipts)(Argentina) 967,000 25.625 .15
Broken Hill Proprietary Co. Ltd. (Australia) 1,115,955 14.875 .09
Petrofina SA (Belgium) 40,000 13.943 .08
Insurance- 3.33%
Internationale Nederlanden Groep NV (Netherlands) 6,228,206 245.330
Internationale Nederlanden Groep NV, warrants, expire 2001 /2/ 4,100,000 36.605 1.68
Royal Sun Alliance (United Kingdom) 7,651,295 56.217 .34
PartnerRe Holdings Ltd. (Incorporated in Bermuda) 1,587,400 56.154 .34
Union de Assurances Federales (France) 386,667 49.959 .30
Corporacion Mapfre, CIR, SA (Spain) 839,382 43.543 .26
GIO Australia Holdings Ltd. (Australia) 10,106,056 29.636 .18
CKAG Colonia Konzern AG (Germany) 284,880 26.806
CKAG Colonia Konzern AG, preferred shares 15,530 1.261 .17
Yasuda Fire and Marine Insurance Co., Ltd. (Japan) 1,190,000 5.871 .03
Munchener Ruckversicherungs-Gesellschaft (Germany) 3,000 5.484 .03
Food & Household Products- 3.32%
Nestle SA (Switzerland) 137,225 160.662 .96
Unilever PLC (United Kingdom) 4,030,000 106.979 .64
Groupe Danone (France) 628,224 99.729 .60
Reckitt & Colman PLC (United Kingdom) 6,816,250 91.648 .55
Cadbury Schweppes PLC (United Kingdom) 8,109,282 71.978 .43
PT Indofood Sukses Makmur (Indonesia) 9,416,500 20.795 .12
Universal Robina Corp. (Philippines) 7,600,000 3.462 .02
Beverages & Tobacco- 3.10%
Coca-Cola Amatil Ltd. (Australia) 10,381,075 98.728 .59
Seagram Co. Ltd. (Canada) 1,700,000 65.025 .39
South African Breweries Ltd. (South Africa) 1,942,533 61.542 .37
LVMH Moet Hennessy Louis Vuitton (France) 232,000 56.400 .34
Panamerican Beverages, Inc., Class A (Mexico) 1,034,100 55.454 .33
San Miguel Corp., Class B (Philippines) 12,728,800 44.217 .26
Lion Nathan Ltd. (New Zealand) 15,940,000 37.888 .23
Cia. Cervejaria Brahma, preferred shares (Brazil) 45,665,000 29.775 .18
Swedish Match AB (Sweden) 8,413,000 29.551 .18
PT Hanjaya Mandala Sampoerna (Indonesia) 4,530,000 21.234 .13
ITC Ltd. (India) 1,700,000 17.012 .10
Utilities: Electric & Gas- 2.91%
Centrais Eletricas Brasileiras SA Electrobras, preferred
nominative (American Depositary Receipts) (Brazil) 3,200,500 68.011
Centrais Eletricas Brasileiras SA Electrobras, ordinary
nominative (American Depositary Receipts) 1,287,000 26.223 .56
Cia. Energetica de Minas Gerais - CEMIG (American
Depositary Receipts) (Brazil) 1,428,550 58.571
Cia. Energetica de Minas Gerais - CEMIG, preferred
nominative 421,000,000 17.333
Cia. Energetica de Minas Gerais - CEMIG, ordinary
nominative 105,000,000 4.462 .49
Cia. Energetica de Minas Gerais - CEMIG (American
Depositary Receipts) /1/ 23,100 .947
Korea Electric Power Corp. (South Korea) 1,589,580 46.281
Korea Electric Power Corp. (American Depositary Receipts) 740,000 12.950
Korea Electric Power Corp., 5.00% convertible debentures 2001 $5,000,000 4.900 .38
National Power PLC (United Kingdom) 7,135,400 57.059 .34
Hongkong Electric Holdings Ltd. (Hong Kong) 14,481,500 51.118 .31
Scottish Power PLC (United Kingdom) 7,504,300 43.604 .26
CESP - Cia. Energetica de Sao Paulo, ordinary nominative
(Brazil) /2/ 264,120,000 14.341
CESP - Cia. Energetica de Sao Paulo, preferred
nominative (American Depositary Receipts) /2/ 723,420 10.490
CESP - Cia. Energetica de Sao Paulo, preferred
nominative (American Depositary Receipts) /1/ /2/ 83,664 1.213 .16
Enersis SA (American Depositary Receipts) (Chile) 741,800 23.552 .14
Huaneng Power International, Inc., Class N (American
Depositary Receipts) (People's Republic of China) /2/ 925,000 20.697 .12
Manila Electric Co., Class B (Philippines) 1,753,424 13.979 .08
PowerGen PLC (United Kingdom) 1,175,000 11.453 .07
Machinery & Engineering- 2.71%
Mannesmann AG (Germany) 736,012 281.436 1.68
Valmet Oy (Finland) 3,400,000 60.922 .36
Kvaerner AS, Class A (Norway) 910,000 49.398 .29
Kawasaki Heavy Industries, Ltd. (Japan) 6,800,000 26.454 .16
Komori Corp. (Japan) 1,237,000 24.712 .15
Mitsubishi Heavy Industries, Ltd. (Japan) 1,753,000 11.413 .07
Business & Public Services- 2.52%
Rentokil Group PLC (United Kingdom) 13,710,000 94.648 .57
Brambles Industries Ltd. (Australia) 3,350,000 55.083 .33
Hyder PLC (United Kingdom) 3,850,000 49.993 .30
United Utilities PLC (United Kingdom) 3,921,427 40.479 .24
Thames Water PLC (United Kingdom) 3,039,925 33.153 .20
Quebecor Printing Inc. (Canada) 1,492,000 27.604 .16
Havas SA (France) 330,000 24.549 .15
NTT Data Communications Systems Corp. (Japan) 895 23.816 .14
Severn Trent PLC (United Kingdom) 1,890,000 21.529 .13
Reuters Holdings PLC (United Kingdom) 1,916,700 19.501 .12
Securitas AB, Class B (Sweden) 467,000 13.061 .08
Secom Co., Ltd. (Japan) 220,000 12.367 .07
Thorn PLC (United Kingdom) 1,918,940 5.283 .03
Eurotunnel SA, units, comprised of one share of Eurotunnel SA
ordinary and one share of Eurotunnel PLC ordinary (France) /2/ 605,900 .712 .00
Metals: Nonferrous- 2.23%
Pechiney, Class A (France) 2,630,000 106.951 .64
Cominco Ltd. (Canada) 2,600,000 70.525 .42
WMC Ltd. (Australia) 8,767,748 55.411 .33
Inco Ltd. (Canada) 1,490,000 48.611 .29
Outokumpu Oy, Class A (Finland) 1,200,000 22.589 .13
Alcan Aluminium Ltd. (Canada) 600,000 20.325 .12
The RTZ Corp. (United Kingdom) 1,280,000 20.271 .12
Teck Corp., Class B (Canada) 900,000 19.678 .12
Noranda Inc. (Canada) 450,000 9.968 .06
Electronic Components- 2.21%
Rohm Co., Ltd. (Japan) 1,572,000 115.955 .69
Kyocera Corp. (Japan) 1,383,000 78.524 .47
Murata Manufacturing Co., Ltd. (Japan) 2,060,000 73.976 .44
ASM Lithography Holding NV (Netherlands) /2/ 940,000 73.052 .44
Hirose Electric Co., Ltd. (Japan) 405,000 22.242 .13
Delta Electronics Industrial Co., 0.50% convertible
debentures 2004 (Taiwan) $7,250,000 7.558 .04
Electrical & Electronic- 2.14%
ABB AG, Class A (Switzerland) 44,074 52.979
ABB AB, Class B (Sweden) 369,300 41.315
ABB AB, Class B (American Depositary Receipts) 210,000 22.732
ABB AB, Class A 180,000 20.209 .82
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 2,621,880 91.574
Telefonaktiebolaget LM Ericsson, Class B (American Depositary
Receipts) 660,000 22.316 .68
Nokia Corp., Class K (Finland) 1,113,000 66.776
Nokia Corp., Class A 192,000 11.635 .47
Northern Telecom Ltd. (Canada) 230,000 15.036 .09
Johnson Electric Holdings Ltd. (Hong Kong - Incorporated in
Bermuda) 3,901,300 9.919 .06
Tokyo Electron Ltd. (Japan) 86,900 2.882 .02
Recreation & Other Consumer Products- 1.58%
Nintendo Co., Ltd. (Japan) 1,589,500 114.160 .68
Fuji Photo Film Co., Ltd. (Japan) 1,400,000 46.085 .28
Bajaj Auto Ltd. (India) 1,365,000 34.411
Bajaj Auto Ltd. (Global Depositary Receipts) 50,000 1.862 .22
Sony Music Entertainment (Japan) Inc. (Japan) 697,000 25.368 .15
Square Co., Ltd. (Japan) 539,600 21.647 .13
PolyGram NV (New York Registered Shares) (Netherlands) 250,000 12.312 .07
EMI Group PLC (United Kingdom) 417,764 7.656 .05
Merchandising- 1.55%
Tesco PLC (United Kingdom) 9,601,830 55.160 .33
Cifra, SA de CV, Class B (Mexico) /2/ 16,576,400 23.031
Cifra, SA de CV, Class A /2/ 13,558,176 18.735
Cifra, SA de CV, Class C /2/ 8,067,200 11.209 .32
H & M Hennes & Mauritz AB, Class B (Sweden) 214,250 28.683 .17
Amway Japan Ltd. (American Depositary Receipts) (Japan) 715,000 10.099
Amway Japan Ltd. 335,000 9.212
AJL PEPS Trust 465,000 7.324 .15
Woolworths Ltd. (Australia) 8,547,244 22.853 .14
Coles Myer Ltd. (Australia) 4,830,347 22.725 .14
George Weston Ltd. (Canada) 300,000 14.851 .09
Ito-Yokado Co., Ltd. (Japan) 280,000 12.456 .07
Carrefour SA (France) 20,000 12.426 .07
WHSmith Group PLC (United Kingdom) 1,500,000 11.120 .07
Industrial Components- 1.25%
Cie. Generale des Etablissements Michelin, Class B
(France) 1,334,000 79.413
Cie. Generale des Etablissements Michelin, convertible
preferred shares 52,266 3.077 .49
Bridgestone Corp. (Japan) 2,221,000 41.675 .25
Morgan Crucible Co. PLC (United Kingdom) 3,408,240 26.610 .16
Sumitomo Electric Industries, Ltd. (Japan) 1,742,000 23.670 .14
Calsonic Corp. (Japan) 3,745,000 19.173 .11
MINEBEA Co., Ltd. (Japan) 2,078,000 17.311 .10
Chemicals- 1.22%
AGA AB, Class B (Sweden) 3,430,000 50.693 .30
Hoechst AG (Germany) 1,150,000 46.558 .28
BASF AG, warrants, expire 2001 (Germany) /2/ 250,000 45.999 .27
L'Air Liquide (France) 229,946 36.380 .22
Ciba Specialty Chemicals Holdings (Switzerland) 165,667 13.698 .08
DSM NV (Netherlands) 123,306 12.448 .07
Appliances & Household Durables- 1.15%
Philips Electronics NV (Netherlands) 1,605,000 74.856 .45
Sony Corp. (Japan) 937,000 65.554 .39
AB Electrolux, Class B (Sweden) 823,000 51.272 .31
SANYO Electric Co., Ltd. (Japan) 85,000 .321 .00
Forest Products & Paper- 0.86%
UPM-Kymmene Corp. (Finland) 2,300,000 50.705
UPM-Kymmene Corp., 8.25% convertible debentures 2043 FIM40,000,000 9.664 .36
Stora Kopparbergs Bergslags AB, Class B (Sweden) 2,150,000 29.781 .18
AssiDoman AB (Sweden) 828,000 21.950 .13
Carter Holt Harvey Ltd. (New Zealand) 8,224,336 17.434 .10
MAYR-MELNHOF Karton AG (Austria) /2/ 160,000 8.478 .05
Kimberly-Clark de Mexico, SA de CV, Class A (Mexico) 1,615,000 6.507 .04
Building Materials & Components- 0.73%
CEMEX, SA de CV, ordinary participation certificates (Mexico) 16,746,650 61.343
CEMEX, SA de CV, Class B 2,210,625 8.907
CEMEX, SA de CV, Class A 1,793,075 6.557 .46
Holderbank Financiere Glaris Ltd. (Switzerland) 58,938 45.211 .27
Real Estate- 0.63%
Sun Hung Kai Properties Ltd. (Hong Kong) 6,250,000 66.144 .40
Mitsui Fudosan Co., Ltd. (Japan) 1,480,000 15.322 .09
C & P Homes, Inc. (Philippines) 27,730,500 13.160 .08
Mitsubishi Estate Co., Ltd. (Japan) 900,000 9.609 .06
Miscellaneous Materials & Commodities- 0.52%
Cie. de Saint-Gobain (France) 325,071 49.290 .29
SGL Carbon AG (Germany) 281,600 38.649 .23
Transportation: Shipping- 0.39%
Stolt-Nielsen SA, Class B (American Depositary Receipts)
(Incorporated in Luxembourg) 845,000 14.920
Stolt-Nielsen SA 837,000 14.438 .18
Nippon Yusen KK (Japan) 5,110,000 18.102 .11
Bergesen D.Y. AS, Class B (Norway) 785,000 17.259 .10
Metals: Steel- 0.37%
Kawasaki Steel Corp. (Japan) 17,111,000 49.822 .30
Thyssen AG (Germany) 50,000 11.283 .07
Pohang Iron & Steel Co., Ltd. (South Korea) 7,870 .494 .00
Aerospace & Military Technology- 0.30%
Bombardier Inc., Class B (Canada) 1,307,000 23.661 .14
British Aerospace PLC (United Kingdom) 970,000 21.755 .13
Rolls-Royce PLC (United Kingdom) 1,250,000 4.685 .03
Leisure & Tourism- 0.30%
Granada Group PLC (United Kingdom) 1,621,709 24.457 .15
Euro Disney SCA (France) /2/ 7,320,000 13.027
Euro Disney SCA, warrants, expire 2004 /2/ 1,100,000 .237 .08
Mandarin Oriental International Ltd. (Singapore -
Incorporated in Bermuda) 9,670,312 11.894 .07
Wholesale & International Trade- 0.20%
Mitsui & Co., Ltd. (Japan) 2,700,000 19.829 .12
Mitsubishi Corp. (Japan) 1,447,000 12.874 .08
Transportation: Rail & Road- 0.15%
Guangshen Railway Co. Ltd., Class H (American Depositary
Receipts) (People's Republic of China) /2/ 1,148,000 25.112 .15
Gold Mines- 0.14%
Ashanti Goldfields Co. Ltd. (Global Depositary Receipts)
(Ghana) 1,501,900 20.651
Ashanti Goldfields Co. Ltd., 5.50% convertible debentures
2003 $3,000,000 2.550 .14
Financial Services - 0.12%
ORIX Corp. (Japan) 250,500 11.042 .07
ACOM Co., Ltd. (Japan) 210,000 8.747 .05
Data Processing & Reproduction- 0.08%
Olivetti SpA (Italy) /2/ 32,900,000 11.851 .07
Riso Kagaku Corp. (Japan) 45,000 2.522 .01
Miscellaneous- 3.71%
Other equity-type securities in initial period of acquisition 621.493 3.71
----------- --------
TOTAL EQUITY-TYPE SECURITIES (cost: $11,293.056 million) 14,498.245 86.62
----------- --------
BONDS
Principal
Amount
(Millions)
Argentina Government- 0.62%
Argentina 6.75% March 2005 /3/ $83.420 74.557 .45
Argentina 11.375% January 2017 14.500 14.881 .09
Argentina 11.75% February 2007 ARP14.000 14.072 .08
New Zealand Government- 0.31%
New Zealand 8.00% November 2006 NZ$75.000 52.187 .31
Broadcasting & Publishing- 0.00%
Grupo Televisa, SA 0%/13.25% May 2008 /4/ $20.000 $12.850 .08%
----------- --------
TOTAL BONDS (cost: $132.999 million) 168.547 1.01
----------- --------
SHORT-TERM SECURITIES
Corporate Short-Term Notes- 8.62%
General Electric Capital Corp. 5.31%-5.48% due 4/2-5/14/97 $110.600 110.297 .66
Canada Bills 5.21%-5.34% due 4/21-6/9/97 106.900 106.168 .63
Commonwealth Bank of Australia 5.34%-5.35% due 6/5-6/12/97 90.000 89.029 .53
National Australia Funding (Delaware) Inc. 5.29%-5.33%
due 4/17-6/2/97 88.500 87.971 .53
Svenska Handelsbanken Group 5.35%-5.70% due 4/2-4/30/97 84.800 84.623 .50
Toyota Motor Credit Corp. 5.28%-5.29% due 4/9-5/12/97 82.300 82.015 .49
ABN-AMRO North America Finance Inc. 5.28%-5.32%
due 4/30-5/27/97 81.800 81.284 .49
Ford Credit Europe PLC 5.33%-5.51% due 4/8-4/25/97 79.700 79.527 .47
Halifax Building Society 5.29%-5.56% due 4/1-6/13/97 78.100 77.497 .46
International Lease Finance Corp. 5.26%-5.62% due 4/8-5/16/97 77.500 77.143 .46
Deutsche Bank Financial Inc. 5.31%-5.35% due 4/14-6/10/97 74.700 74.429 .44
International Business Machines Corp. 5.27%-5.50%
due 4/3-5/8/97 74.000 73.815 .44
Barclays U.S. Funding Corp. 5.29%-5.365% due 4/4-6/17/97 73.800 73.540 .44
Abbey National North America 5.27%-5.35% due 4/23-6/10/97 60.000 59.530 .36
American Express Credit Corp. 5.31%-5.32% due 4/2-5/8/97 58.000 57.857 .35
Bank of Montreal 5.27%-5.30% due 4/29/97 56.500 56.257 .34
Siemens Capital Corp. 5.27%-5.34% due 4/11-5/16/97 53.600 53.325 .32
Canadian Wheat Board 5.26%-5.47% due 4/28-5/20/97 45.000 44.729 .27
Daimler-Benz North America Corp. 5.26%-5.33% due 4/24-6/5/97 32.000 31.839 .19
Ford Motor Credit Co. 5.32%-5.48% due 5/2-5/19/97 24.900 24.763 .15
Canadian Imperial Holdings Inc. 5.32% due 4/15/97 16.400 16.364 .10
Certificates of Deposit- 2.17%
Societe Generale 5.37%-5.43% due 4/1-5/5/97 80.800 80.800 .48
Canadian Imperial Bank of Commerce 5.30%-5.34%
due 4/18-4/29/97 75.000 75.000 .45
Rabobank Nederland N.V. 5.40%-5.43% due 4/9-6/10/97 55.000 54.988 .33
Swiss Bank Corp. 5.41% due 4/7/97 40.000 40.000 .24
Abbey National PLC 5.41% due 5/6/97 40.000 39.999 .24
National Westminster Bank PLC 5.375% due 4/1/97 30.000 30.000 .18
Deutsche Bank AG 5.36% due 5/12/97 29.000 28.998 .17
ABN-AMRO Bank 5.40% due 4/8/97 13.500 13.500 .08
Federal Agency Discount Notes- 0.85%
Federal Home Loan Mortgage Corp. 5.26%-5.55% due 5/1-6/23/97 81.800 81.168 .48
Federal National Mortgage Assn. 5.22%-5.30% due 5/7-6/6/97 62.500 62.044 .37
Non-U.S. Government Short-Term Notes- 0.05%
International Bank for Reconstruction and Development
12.50% July 1997 NZ$11.000 7.774 .05
Non-U.S. Currency- 0.06%
New Taiwanese Dollar NT$275.100 9.996 .06
----------- --------
TOTAL SHORT-TERM SECURITIES (cost: $1,965.841 million) 1,966.269 11.75
----------- --------
TOTAL INVESTMENT SECURITIES (cost: $13,391.896 million) 16,633.061 99.38
Excess of cash and receivables over payables 103.982 .62
----------- --------
NET ASSETS $16,737.043 100.00%
=========== ========
/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/ Coupon rate may change periodically.
/4/ Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date.
The descriptions of the companies shown in the portfolio,
which were obtained from published reports and other sources
believed to be reliable, are supplemental and are not
covered by the Report of Independent Accountants.
See Notes to Financial Statements
</TABLE>
EQUITY-TYPE SECURITIES APPEARING IN THE PORTFOLIO SINCE SEPTEMBER 30, 1996
Alcan Aluminium
B A T Industries
Bank of Scotland
Cia. Cervejaria Brahma
British Aerospace
British Telecommunications
Carrefour
Coles Myer
Daily Mail and General Trust
Delta Electronics
Deutsche Telekom
Elf Aquitaine
Enersis
Fuji Bank
Hoechst
Honda Motor
Imasco
ITC
Lloyds TSB Group
Mitsubishi Estate
RTZ
Siebe
Swire Pacific
United News & Media
Videsh Sanchar Nigam
Volkswagen
George Weston
Woodside Petroleum
Zeneca
EQUITY-TYPE SECURITIES ELIMINATED FROM THE PORTFOLIO SINCE SEPTEMBER 30, 1996
Akzo Nobel
Atlas Copco
Autopistas, Concesionaria Espanola
Banco Popular Espanol
Banyu Pharmaceutical
BCE Mobile Communications
BICC
British Airways
Canadian National Railway
Consolidated Electric Power Asia
Continental
CS Holding
Deutsche Bank
Edison
Engen
Hitachi
Hong Kong and China Gas
Irish Life
Istituto Nazionale delle Assicurazioni
ITOCHU
Merita
Nippon Konpo Unyu Soko
Nippon Telegraph and Telephone
NV Verenigde Bedrijven Nutricia
Orbital Engine
Petron
Rank Organisation
Rogers Cantel Mobile Communications
Siemens
Sumitomo Chemical
Svenska Handelsbanken
TeleWest Communications
TNT
Uni-Charm
VA Technologie
Waste Management
<TABLE>
EuroPacific Growth Fund
Financial Statements
- ---------------------------------------------- ---------- ----------
Statement of Assets and Liabilities
at March 31, 1997 (dollars in millions)
- ---------------------------------------------- ---------- ----------
<S> <C> <C>
ASSETS:
Investment securities at market
(cost: $13,391.896) $16,633.061
Cash 5.109
Receivables for-
Sales of investments $141.441
Sales of fund's shares 40.506
Forward currency contracts 7.982
Dividends and accrued interest 51.532 241.461
---------- ----------
16,879.631
LIABILITIES:
Payables for-
Purchases of investments 98.164
Repurchases of fund's shares 30.984
Management services 6.792
Accrued expenses 6.648 142.588
---------- ----------
NET ASSETS AT MARCH 31, 1997-
Equivalent to $26.70 per share on
626,897,929 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $16,737.043
===========
Statement of Operations
for the year ended March 31, 1997 (dollars in millions)
- ---------------------------------------------- ---------- ----------
INVESTMENT INCOME:
Income:
Dividends $281.489
Interest 108.052 $389.541
----------
Expenses:
Management services fee 70.142
Distribution expenses 34.026
Transfer agent fee 13.929
Reports to shareholders 1.197
Registration statement and prospectus 1.259
Postage, stationery and supplies 1.948
Trustees' fees .162
Auditing and legal fees .092
Custodian fee 8.284
Taxes other than federal income tax .231
Other expenses .170 131.440
---------- ----------
Net investment income 258.101
----------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
Net realized gain 799.451
Net increase in unrealized appreciation
on investments 1,092.178
Net increase in unrealized appreciation
on forward currency contracts 6.061 1,098.239
---------- ----------
Net realized gain and unrealized appreciation
on investments 1,897.690
----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $2,155.791
===========
- ---------------------------------------------- ----------------------------------
Statement of Changes in Net Assets Year ended Year ended
(dollars in millions) 3/31/97 3/31/96
- ---------------------------------------------- ---------- ----------
OPERATIONS:
Net investment income $ 258.101 $ 216.732
Net realized gain on investments 799.451 328.434
Net increase in unrealized appreciation
on investments 1,098.239 1,281.505
---------- ----------
Net increase in net assets
resulting from operations 2,155.791 1,826.671
---------- ----------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income (236.013) (221.348)
Distributions from net realized gain on
investments (503.619) (93.827)
---------- ----------
Total dividends and distributions (739.632) (315.175)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold: 195,364,825
and 186,653,832 shares, respectively 4,950.543 4,301.025
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments: 28,349,252 and 13,154,617 shares,
respectively 704.707 296.950
Cost of shares repurchased: 104,945,629
and 102,718,162 shares, respectively (2,669.767) (2,361.627)
---------- ----------
Net increase in net assets resulting from
capital share transactions 2,985.483 2,236.348
---------- ----------
TOTAL INCREASE IN NET ASSETS 4,401.642 3,747.844
NET ASSETS:
Beginning of year 12,335.401 8,587.557
---------- ----------
End of year (including undistributed
net investment income: $50.769
and $37.536, respectively) $16,737.043 $12,335.401
=========== ===========
See Notes to Financial Statements
</TABLE>
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 by the Board of
Trustees or a committee thereof.
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 and premiums on
securities purchased are amortized over the life of the respective securities.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities, cash balances, 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 effects of changes in foreign currency
exchange rates on investment securities are included with the net realized and
unrealized gain or loss on investment securities.
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 $8,284,000 includes $121,000 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 10%. 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, 1997, net unrealized appreciation on investments, excluding
forward currency contracts, for book and federal income tax purposes aggregated
$3,241,165,000, net of accumulated deferred taxes totaling $2,098,000 on
unrealized appreciation of Indian securities, of which $3,676,697,000 related
to appreciated securities and $435,532,000 related to depreciated securities.
During the year ended March 31, 1997, the fund realized, on a tax basis, a net
capital gain of $793,915,000 on securities transactions. Net gains related to
non-U.S. currency transactions of $5,536,000 were treated as ordinary income
for federal income tax purposes. The capital gain distributions paid in June
and December, 1996 included $16,382,000 of realized non-U.S. currency gains.
The cost of portfolio securities, excluding forward currency contracts, for
book and federal income tax purposes was $13,391,896,000 at March 31, 1997.
3. The fee of $70,142,000 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 in effect through March 31, 1997, 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.
The Board of Trustees has approved a new agreement containing a reduced fee
schedule. Effective April 1, 1997, fees are 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; 0.46% of such assets in excess of
$6.5 billion but not exceeding $10.5 billion; 0.45% of such assets in excess of
$10.5 billion but not exceeding $17 billion; and 0.445% of such assets in
excess of $17 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, 1997,
distribution expenses under the Plan were $34,026,000. As of March 31, 1997,
accrued and unpaid distribution expenses were $2,712,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $13,929,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $10,806,000 (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 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, 1997,
aggregate amounts deferred and earnings thereon were $259,000.
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, 1997, accumulated undistributed net realized gain on
investments was $558,387,000 and paid-in capital was $12,256,131,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $5,351,778,000 and $3,324,306,000, respectively,
during the year ended March 31,1997.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
year ended March 31, 1997, such non-U.S. taxes were $38,900,000. Net realized
currency losses on dividends, interest, withholding taxes reclaimable, and
sales of non-U.S. bonds and notes were $1,399,000 for the year ended March 31,
1997.
The fund reclassified $8,855,000 from undistributed net investment income to
undistributed net realized gains; $6,763,000 from undistributed net realized
gains to undistributed net realized currency gains; and $423,000 from
paid-in-capital to undistributed net realized gains for the year ended March
31, 1997.
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, 1997, the fund had outstanding
forward currency contracts to sell non-U.S. currencies as follows:
Non-U.S. Currency Sale Contracts
<TABLE>
<CAPTION>
Non-U.S. Currency
Sale Contracts
Contract Amounts U.S. Valuation at 3/31/97
Non-U.S. U.S. Amount Unrealized
Appreciation
<S> <C> <C> <C> <C>
Japanese Yen expiring Y6,035,175,000 $58,035,713 $50,053,549 $7,982,164
5/2/97 to 11/14/97
</TABLE>
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
"Fund") at March 31, 1997, the results of its operations, the changes in its
net assets and the per-share data and ratios for the years indicated in
conformity with generally accepted accounting principles. These financial
statements and per-share data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at March 31, 1997 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, 1997
Tax Information (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
fund were earned from the following sources:
<TABLE>
<CAPTION>
Dividends and Distributions per Share
From Net From Net From Net
To Shareholders Investment Realized Short- Realized Long-
of Record Payment Date Income term Gains term Gains
<S> <C> <C> <C> <C>
May 31, 1996 June 3, 1996 $.08 $.042 $.448
December 13, 1996 December 16, 1996 .36 - .39
</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, 1997 is $0.06148 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 1997 UNDER SEPARATE COVER TO DETERMINE
THE CALENDAR YEAR AMOUNTS TO BE INCLUDED ON THEIR 1996 TAX RETURNS.
SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISERS.
<TABLE>
Per-Share Data and Ratios /1/
Year
ended
March
31
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Year $24.28 $20.89 $21.95 $17.64 $16.64
---------------------------------------------
Income From Investment
Operations:
Net investment income .46 .46 .35 .24 .22
Net realized and unrealized
gain (loss) on investments 3.28 3.63 (.19) 4.37 1.04
------------------------------------- -------
Total income from investment
operations 3.74 4.09 .16 4.61 1.26
------------------------------------- -------
Less Distributions:
Dividends from net investment
income (.41) (.49) (.317) (.187) (.222)
Dividends from net realized
non-U.S. currency gains /2/ (.03) - (.003) (.043) (.038)
Distributions from net
realized gains (.88) (.21) (.90) (.07) -
------------------------------------- -------
Total distributions (1.32) (.70) (1.22) (.30) (.26)
------------------------------------- -------
Net Asset Value, End of Year $ 26. $ 24.28 $ 20.89 $ 21. $ 17.64
===================================== =======
Total Return /3/ 15.88% 19.84% .71% 26.27% 7.69%
Ratios/Supplemental Data:
Net assets, end of year
(in millions) $16,737 $12,335 $8,588 $6,429 $2,992
Ratio of expenses to average
net assets .90% .95% .97% .99% 1.10%
Ratio of net income to average
net assets 1.77% 2.09% 1.80% 1.13% 1.40%
Average commissions paid per
share /4/ 1.36 c 1.10 c .21 c .08 c .25 c
Portfolio turnover rate 25.82% 21.77% 16.02% 21.37% 10.35%
/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/ Calculated without deducting
a sales charge. The maximum
sales charge is 5.75% of the
fund's offering price.
/4/ Brokerage commissions paid on
portfolio transactions increase
the cost of securities purchased or
reduce the proceeds of securities
sold and are not separately reflected
in the fund's statement of operations.
Shares traded on a principal basis
(without commissions), such as most
over-the-counter and fixed-income
transactions, are excluded. Generally,
non-U.S. commissions are lower than
U.S. commissions when expressed as
cents per share but higher when
expressed as a percentage of
transactions because of the lower
per-share prices of many non-U.S.
securities.
</TABLE>
BOARD OF TRUSTEES
ELISABETH ALLISON
Cambridge, Massachusetts
Administrative Director, ANZI, Ltd.
(financial publishing and consulting);
publishing consultant,
Harvard Medical School
MICHAEL R. BONSIGNORE
Minneapolis, Minnesota
Chairman and Chief Executive Officer,
Honeywell Inc.
DAVID I. FISHER
Los Angeles, California
Chairman of the Board,
The Capital Group Companies, Inc.
ROBERT A. FOX
Livingston, California
President and Chief Executive Officer,
Foster Farms Inc.
ALAN GREENWAY
La Jolla, California
Private investor; President,
Greenway Associates, Inc.
(management consulting services)
WILLIAM R. GRIMSLEY
San Francisco, California
Senior Vice President and Director,
Capital Research and Management Company
KOICHI ITOH
Tokyo, Japan
President and Chief Executive Officer,
IMPAC (management consulting services);
former Managing Partner,
VENCA Management (venture capital)
WILLIAM H. KLING
St. Paul, Minnesota
President, Minnesota Public Radio;
President, Greenspring Co.;
former President, American Public Radio
(now Public Radio International)
JOHN G. McDONALD
Stanford, California
The IBJ Professor of Finance,
Graduate School of Business,
Stanford University
WILLIAM I. MILLER
Columbus, Indiana
Chairman of the Board,
Irwin Financial Corporation
KIRK P. PENDLETON
Southampton, Pennsylvania
Chairman of the Board and
Chief Executive Officer, Cairnwood, Inc.
(venture capital investment)
DONALD E. PETERSEN
Birmingham, Michigan
Retired; former Chairman of the Board
and Chief Executive Officer,
Ford Motor Company
WALTER P. STERN
New York, New York
Chairman of the Board of the fund
Chairman of the Board,
Capital Group International, Inc.
THIERRY VANDEVENTER
Geneva, Switzerland
President of the fund
Chairman of the Board,
Capital Research Company
OTHER OFFICERS
STEPHEN E. BEPLER
New York, New York
Executive Vice President of the fund
Senior Vice President,
Capital Research Company
MARK E. DENNING
London, England
Executive Vice President of the fund
Senior Vice President and Director,
Capital Research Company
ROBERT W. LOVELACE
Los Angeles, California
Vice President of the fund
Executive Vice President and Director,
Capital Research Company
JANET A. McKINLEY
New York, New York
Vice President of the fund
Senior Vice President,
Capital Research Company
VINCENT P. CORTI
Los Angeles, California
Secretary of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
STEVEN N. KEARSLEY
Brea, California
Treasurer of the fund
Vice President and Treasurer,
Capital Research and Management Company
R. MARCIA GOULD
Brea, California
Assistant Treasurer of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
MARY C. HALL
Brea, California
Assistant Treasurer of the fund
Senior Vice President -
Fund Business Management Group,
Capital Research and Management Company
OFFICES OF THE FUND AND OF THE
INVESTMENT ADVISER, CAPITAL RESEARCH
AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
(Please write to the address nearest you.)
American Funds Service Company
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
400 South Hope Street
Los Angeles, California 90071-2889
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
We are pleased to announce that Michael R. Bonsignore was elected to the Board
of Trustees on March 5, 1997
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR FINANCIAL ADVISER. YOU MAY ALSO CALL AMERICAN FUNDS SERVICE
COMPANY, TOLL-FREE, AT 800/421-0180 OR VISIT WWW.AMERICANFUNDS.COM ON THE WORLD
WIDE WEB.
This report is for the information of shareholders of EuroPacific Growth Fund,
but it may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details about charges, expenses, investment
objectives and operating policies of the fund. If used as sales material after
June 30, 1997, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Litho in USA BDA/AL/3206
Lit. No. EUPAC-011-0597
Printed on recycled paper
[The American Funds Group(r)]
