[The American Funds Group(r)]
EuroPacific Growth Fund
2000 Annual Report
for the year ended March 31
Seeing the World From Home
[globe]
[photo of field with city signs]
EuroPacific Growth Fund(r)
EuroPacific Growth Fund 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.
EuroPacific is one of the 29 mutual funds in The American Funds Group,(r) the
nation's third-largest mutual fund family. For nearly seven decades, Capital
Research and Management Company, the American Funds adviser, has invested with
a long-term focus based on thorough research and attention to risk.
[world map in background]
A Look at the Fund's Results
(through March 31, 2000, with all distributions reinvested)
<TABLE>
<CAPTION>
<S> <C> <C>
Cumulative Average annual
return compound return
One year +54.3% -
Five years +180.5 +22.9%
Ten years +368.2 +16.7
Lifetime (since April 16, 1984) +1,328.4 +18.1
</TABLE>
EuroPacific Ranked First Over its Lifetime
Throughout its lifetime, EuroPacific's results have compared very favorably
with other funds in its universe. Here is how the fund ranked among
international funds over several periods:
<TABLE>
<CAPTION>
<S> <C>
One year 144th of 643 funds (top 23%)
Five years 24th of 254 funds (top 10%)
Ten years 1st of 44 funds (top 3%)
Lifetime 1st of 14 funds (top 8%)
</TABLE>
Source: Lipper Inc. Rankings are based on total returns as of March 31, 2000,
and do not reflect the effects of sales charges.
Fund results in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. There are two ways
to invest in this fund. Class A shares are subject to a 5.75% maximum up-front
sales charge that declines for accounts of $25,000 or more. Class B shares,
which are not available for certain employer-sponsored retirement plans, have
no up-front sales charge. They are, however, subject to additional expenses of
approximately 0.75% a year over the first eight years of ownership. If redeemed
within six years, they may also be subject to a contingent deferred sales
charge (5% maximum) that declines over time.
FIGURES SHOWN ARE PAST RESULTS AND ARE NOT PREDICTIVE OF FUTURE RESULTS. SHARE
PRICE AND RETURN WILL VARY, SO YOU MAY LOSE MONEY. INVESTING FOR SHORT PERIODS
MAKES LOSSES MORE LIKELY. INVESTMENTS ARE NOT FDIC-INSURED, NOR ARE THEY
DEPOSITS OF OR GUARANTEED BY A BANK OR ANY OTHER ENTITY. INVESTING OUTSIDE THE
UNITED STATES IS SUBJECT TO ADDITIONAL RISKS, SUCH AS CURRENCY FLUCTUATIONS,
POLITICAL INSTABILITY, DIFFERING SECURITIES REGULATIONS AND PERIODS OF
ILLIQUIDITY, WHICH ARE DETAILED IN THE FUND'S PROSPECTUS.
[Begin Caption]
About our cover: Mexico, Missouri, is home to Ron Ray and Mark Auwarter, two of
the shareholders featured in the article that begins on page 6. Nearby Auxvasse
(pronounced "aw-vahs") was named by early French explorers.
[End Caption]
International Investing
The 25-Year Record
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1975 1976 1977 1978 1979
+36% +23% -8% +6% +14%
+37% +4% +19% +34% +6%
1980 1981 1982 1983 1984
+30% -4% +22% +22% +6%
+24% -1% -1% +25% +8%
1985 1986 1987 1988 1989
+33% +18% +4% +16% +31%
+57% +70% +25% +29% +11%
1990 1991 1992 1993 1994
-2% +31% +7% +10% +2%
-23% +12% -12% +33% +8%
1995 1996 1997 1998 1999
+38% +24% +34% +31% +22%
+12% +6% +2% +20% +27%
</TABLE>
These figures, based on U.S. dollars, are for calendar years and include
reinvestment of dividends.
Source: Morgan Stanley Capital International.
[Begin Caption]
U.S. Stock Market
[US flag]
All Major Stock Markets Outside North America
[globe]
The percentages on the top lines represent the U.S. stock market; the lower
lines are for all major stock markets outside North America.
[End Caption]
This chart, which has appeared in most annual reports for EuroPacific Growth
Fund, shows that stock markets outside North America have done better than the
U.S. market in 13 of the past 25 calendar years.
Over the entire period, the Morgan Stanley Capital International (MSCI) EAFE(r)
(Europe, Australasia, Far East) Index, which measures all major stock markets
outside North America, gained 3,724% (an average of 15.7% a year), while the
MSCI U.S. Index rose 5,074% (an average of 17.1% a year). Both indexes are
unmanaged; figures include reinvestment of dividends.
While the U.S. stock market has been exceptionally strong in recent years, we
are convinced that investing outside the United States makes sense over the
long term. We also know that negotiating the unfamiliar terrain of
international markets can be especially challenging. That is why so many people
choose to invest overseas through actively managed mutual funds such as
EuroPacific Growth Fund. Over the years, EuroPacific's investment professionals
have helped shareholders participate in opportunities for growth, avoid
potential pitfalls and achieve consistently attractive long-term returns.
[globe]
EuroPacific Growth Fund
Fellow Shareholders:
International equity markets roared ahead during fiscal 2000, fueled by Asia's
rapid turnaround and a worldwide boom in technology stocks. EuroPacific Growth
Fund participated fully in the rally, recording its second-highest fiscal-year
return since beginning operations nearly 16 years ago.
Over the 12 months ended March 31, the value of your investment rose a
remarkable 54.3%, assuming you reinvested capital gain distributions totaling
$1.39 a share and income dividends totaling 29 cents a share that were paid
during the year.
The fund's gain was well ahead of relevant benchmarks. The unmanaged Morgan
Stanley Capital International (MSCI) EAFE(r) (Europe, Australasia, Far East)
Index was up 25.4% on a reinvested basis; the index measures 20 markets outside
the United States. EuroPacific also appreciably outpaced the 39.8% average
return of the 643 international funds tracked by Lipper Inc.
These latest results bring EuroPacific's total return since beginning
operations in April 1984 to 1,328.4% - an average compound return of 18.1% a
year. By comparison, the EAFE Index had an average annual compound return of
14.8% over the same time frame, while the average international fund increased
14.3%. EuroPacific's strong showing once again placed it first among all 14
U.S.-based international funds in existence throughout its lifetime; it has
held this number one position for the past 10 consecutive fiscal years.
A Twin-Engine Rally
Renewed vigor in many of the world's economies helped jumpstart the rebound in
global stock markets during the year, with Asia taking center stage. Although
the region's recovery is still far from secure, investors were encouraged by
corporate restructuring efforts and government commitments to enforce
accountability, particularly within their banking systems. In Japan, a
strengthening in the currency helped boost returns for U.S. investors; stock
prices rose 26% in yen, but 45% when translated into dollars.(1) Elsewhere in
Asia, stock prices bounced back smartly-in Taiwan (+58%), South Korea (+74%)
and Hong Kong (+50%), with the greatest gains coming from technology-related
issues.
(1) Country returns are based on MSCI indexes for the year ended March 31,
2000, expressed in dollar terms and assume reinvestment of dividends.
The enthusiasm for technology stocks was not confined to Asia. By autumn,
investors worldwide had begun to narrow their focus onto so-called "new
economy" sectors, touching off a global boom in technology, media and
telecommunications stocks. In Europe, for example, concerns earlier in the year
about the pace of economic growth and the weakening of the euro gave way to a
flurry of merger activity and zeal for all things Internet-related.
Beneficiaries included such innovators in wireless technology as Ericsson
(+284%) and Nokia (+169%), based in Sweden and Finland, respectively; French
media conglomerate CANAL+ (+201%); and Vodafone AirTouch (+48%) of the U.K. The
latter won a well-publicized bid for Germany's Mannesmann, the fund's largest
holding at the time; Mannesmann rose strongly as well. In the U.S., meanwhile,
a frenzy for "dot-coms" sent technology stocks soaring, but not without
considerable volatility.
Research Got Us There Early
As we have frequently mentioned in these reports, EuroPacific's investment
focus has always been set squarely on the long-term prospects of individual
companies, not regions or industries. While the benefits of this emphasis may
be more apparent when markets are flat or retreating, good stock selection
helped the fund achieve superior results even in this robust market
environment.
Our approach in Asia is a telling illustration of the advantage of research,
the cornerstone of the investment philosophy of Capital Research and Management
Company, adviser for EuroPacific and all of the American Funds. Based on the
recommendations of the fund's research analysts, we began increasing our
exposure to Asian technology companies early on, when stock prices were still
quite low. We invested selectively, concentrating on nimble, mid-sized
companies that supply component parts to larger manufacturers. That strategy
paid off handsomely during the period. Holdings such as Murata (+356%), Samsung
Electronics (+291%), Rohm (+190%) and Taiwan Semiconductor Manufacturing
(+164%) had a strong impact on overall returns. As of March 31, these were
among the fund's largest holdings.
Telecommunications-related issues, which account for nearly one fifth of net
assets, were also an area of strength - and another demonstration of our
long-term, research-driven approach. We have been enthusiastic about the sector
for some time; in most cases, we began building positions well before other
investors recognized the potential. Over the years, telecom holdings have been
an important factor in EuroPacific's success, and this latest fiscal period was
no exception: In addition to Vodafone AirTouch, notable gainers during the year
were such long-time holdings as SK Telecom (+230%) of South Korea, KPN (+188%)
of the Netherlands and Telefonos de Mexico (+105%).
Weakness Among Pharmaceuticals
Given the broad strength of the portfolio, there were few missteps. Still,
rising interest rates hurt a number of banks and utility holdings. European
pharmaceutical companies also fared poorly, a result of concerns about proposed
health care reforms in the U.S. AstraZeneca, the recently merged entity based
in the U.K. and a large holding, declined 14% in price, as did Glaxo Wellcome;
Novartis fell 16%. That said, pharmaceuticals have proven to be excellent
long-term holdings; going forward, innovative companies should continue to
provide good returns. In the case of AstraZeneca, we used the decline to add to
our position.
[Begin Sidebar]
Where the Fund's Assets Were Invested
(percent invested by country)
EuroPacific invests primarily in the stocks of
companies based in Europe and the Pacific Basin.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EuroPacific EAFE Index*
Growth Fund
(3/31/2000) (3/31/1999) (3/31/2000)
Europe
United Kingdom 17.6% 15.4% 19.9%
France 5.1 5.6 10.6
Germany 4.6 7.0 9.5
Netherlands 3.5 4.8 5.0
Sweden 3.4 5.5 3.2
Italy 3.1 4.4 4.1
Finland 2.2 2.6 3.3
Ireland 1.5 .9 .4
Switzerland 1.3 3.2 5.3
Norway .8 1.1 .4
Spain .7 .8 2.8
Denmark .5 .9 .8
Other Europe 1.1 .6 1.4
45.4 52.8 66.7
Pacific Basin
Asia
Japan 23.2 13.9 27.8
South Korea 4.5 1.4 -
Australia 4.1 6.1 2.3
Taiwan 4.0 1.4 -
Hong Kong .7 1.4 2.3
Philippines .3 1.0 -
Other Asia .7 .8 .9
The Americas
Canada 3.3 4.0 -
Mexico 3.1 3.1 -
Other Americas .2 .5 -
44.1 33.6 33.3
Other
Brazil .6 1.1 -
South Africa .5 .9 -
India .5 .5 -
Other Countries 1.1 1.7 -
2.7 4.2 -
Cash & Equivalents 7.8 9.4 -
Total 100.0% 100.0% 100.0%
</TABLE>
*Weighted by market capitalization.
[End Sidebar]
Broad Diversification
As the list of holdings beginning on page 16 makes clear, a focus on
individual companies leads to broad diversification. On March 31, EuroPacific
held stocks of 289 companies based in 37 countries. In keeping with its name,
45% of net assets were invested in European companies, with roughly the same
percentage in the Pacific Basin. The fund's Japanese exposure, 23% of net
assets, has almost doubled since last year - thanks to the combination of
rising stock prices, currency appreciation and new investments. A portion of
the portfolio is invested in developing markets such as Mexico, South Korea and
India. Cash and equivalents account for nearly 8% of net assets.
Exceptional Growth
As of March 31, EuroPacific's net assets stood at over $38 billion, an increase
of more than 75% from a year earlier. Capital appreciation accounts for a large
portion of that growth, but we are also pleased to welcome the many new
shareholders who have joined us. Shareholder accounts number roughly one
million and consist of a diverse group of individuals, foundations and
corporate retirement plans.
An important benefit of growth is that economies of scale make owning your fund
an exceptional value. As the table on page 39 shows, EuroPacific's A-share
annual expense ratio has generally trended downward, to 0.84% in fiscal 2000,
or just $84 for every $10,000 invested. That is less than half of the 1.69%
average expense ratio for international equity funds, as measured by Lipper
Inc. The fund's low turnover rate (the rate at which securities are bought and
sold) of 29% is also helping keep transaction costs down.
Looking Ahead
While a 12-month return of 54% is most welcome, it almost goes without saying
that we would not expect another gain of this magnitude any time soon. Indeed,
the level of speculative froth we are seeing in many sectors of the market
suggests caution as we move forward. Stock prices have become more volatile and
less tolerant of profit disappointments. Rising interest rates in the U.S. and
Europe may also contribute to the uncertainty. Already, U.S. stock markets have
pulled back sharply, and international markets have followed suit.
Longer term, we remain enthusiastic about the prospects for solid, well-managed
companies around the world. Economies are growing and inflation seems
well-controlled. Technology has begun to fulfill its promise on a global scale,
linking businesses and clients more profitably and efficiently than ever
before. International investment opportunities abound, and they will likely
emerge from unexpected quarters. As we comb the globe to find the best of them,
we look forward to tapping their potential on your behalf.
Finally, please note that in March, the Board of Trustees approved a proposal
to eliminate the June dividend distribution. Dividends and capital gains will
now be distributed once a year, in December, a move that should have
record-keeping and cost-saving benefits for shareholders. We look forward to
reporting to you again six months from now.
Cordially,
[signature] [signature]
Gina Despres Mark Denning
Chairman of the Board President
May 12, 2000
<PAGE>
The Value of a Long-Term Perspective
[globe]
How a $10,000 Investment has Grown
There have always been reasons not to invest. If you look beyond the negative
headlines, however, you will find that, despite occasional stumbles, financial
markets have tended to reward investors over the long term. Active management -
bolstered by experience and careful research - can add even more value: As the
chart below shows, over its lifetime, EuroPacific Growth Fund has done
demonstrably better than its relevant benchmarks.
Dividends, particularly when reinvested, have accounted for a large portion of
the fund's overall results. The table beneath the chart breaks down the fund's
year-by-year total returns into their income and capital components.
1985 Iran/Iraq tensions escalate
1986 Sweeping changes in the Soviet Union
1987 Bombing of Libya
1988 Global stock market collapse
1989 Eastern European uprising
1990 Tiananmen Square massacre
1991 Persian Gulf War
1992 USSR disintegrates
1993 European currency crisis
1994 Mexican peso devalued
1995 Barings Bank scandal
1996 Israeli Prime Minister assassinated
1997 Japanese banking crisis
1998 Asian "flu"
1999 Balkan conflict
2000 "dot-com" frenzy
$134,652 (1)(2)EuroPacific
Growth Fund
with dividends
reinvested
$90,773(3)
MSCI EAFE Index,
with dividends
reinvested
$16,596(4)
Consumer Price
Index (inflation)
$10,000(1)
original
investment
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended March 31 1985* 1986 1987 1988 1989 1990 1991 1992
Total Value Dividends $69 35 118 491 316 527 656 611
Reinvested
Value at Year-End(1) $9,948 15,368 19,827 21,437 24,586 28,762 31,381 35,057
EuroPacific's Total Return -0.5% 54.5 29.0 8.1 14.7 17.0 9.1 11.7
Year Ended March 31 1993 1994 1995 1996 1997 1998 1999 2000
Total Value Dividends 538 515 716 1,132 1,063 1,156 992 842
Reinvested
Value at Year-End(1) 37,754 47,670 48,007 57,533 66,672 80,656 87,258 134,652
EuroPacific's Total Return 7.7 26.3 0.7 19.8 15.9 21.0 8.2 54.3
</TABLE>
Average annual
compound rate of
return for fund's
lifetime:
17.7%(1) (2)
Average Annual Compound Returns
(based on a $1,000 investment for periods ended March 31, 2000, with all
distributions reinvested)
<TABLE>
<CAPTION>
<S> <C>
Class A Shares(1)
Ten Years +16.00%
Five Years +21.47%
One Year +45.46%
</TABLE>
Results for Class B shares are not shown because of the brief time between
their introduction on March 15 and the end of the fund's fiscal period.
* For the period April 16, 1984 (when the fund began operations) through March
31, 1985.
(1) Results reflect payment of the maximum sales charge of 5.75% on the $10,000
investment. Thus, the net amount invested was $9,425. As outlined in the
prospectus, the sales charge is reduced for investments larger than $25,000.
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.
No adjustment has been made for income or capital gains taxes.
(2) Includes reinvested dividends of $9,777 and reinvested capital gain
distributions of $23,632.
(3) The index is unmanaged and does not reflect sales charges, commissions or
expenses.
(4) Begins April 30, 1984. Computed from data supplied by the U.S. Department
of Labor, Bureau of Labor Statistics.
Past results are not predictive of future results.
<PAGE>
EuroPacific Growth Fund
Seeing the World From Home
[globe]
[photo of couple in Italy, Texas]
[photo of family in Mexico, Missouri]
[photo of family in China, Michigan]
EuroPacific's International Perspective
As a member of EuroPacific Growth Fund's large shareholder family, you are part
owner of nearly 300 companies based outside the United States, encompassing
more than 35 countries and dozens of industries. That ownership stake opens the
door to some of the most promising growth opportunities the world has to offer.
For most shareholders, proof that investing overseas makes sense can be found
right in their own backyards. Some of the world's most successful companies are
headquartered outside the U.S., but do a meaningful portion of their business
in this country - household names such as Sony, Ericsson, Nestle, Volvo and
News Corp., as well as others that may be less familiar, such as AstraZeneca,
Rohm, Acer and ABN AMRO, to name just a few.
[Begin Caption]
Albert & Eva Garcia
Italy, Texas
Ron Ray & Mark Auwarter
Mexico, Missouri
James & Christine Shepherd
China, Michigan
[End Caption]
Today, even such "apple-pie" businesses as Westinghouse, Chrysler, and
TransAmerica are foreign-owned-by Siemens, DaimlerChrysler and AEGON,
respectively-the result of a growing trend in cross-border acquisitions. As
consumers, EuroPacific shareholders may contribute to the revenues of these and
other companies in which they share profits.
These are only details in a much more elaborate picture. There are more than
20,000 companies listed on exchanges outside the United States, representing
some 52% of the world's equity market capitalization. They range from local
firms to global giants doing business around the world. EuroPacific has the
flexibility to invest in any of them.
Of course, not every stock makes a sensible investment. The fund's investment
professionals build the portfolio one security at a time, carefully sifting
through this vast pool to find companies with solid fundamentals and attractive
prospects for growth - at reasonable prices. The fund's investment adviser,
Capital Research and Management Company, operates research bases out of nine
cities, including two in Europe and three in Asia. This far-flung network
comprises more than 100 analysts and portfolio counselors who conduct thousands
of visits a year to identify companies' potential value as long-term
investments. It is a prodigious effort, but one that has had measurable rewards
for EuroPacific shareholders.
On the following pages, we invite you to meet a few of your fellow investors.
These men and women have unusual "international" characteristics: Albert and
Eva Garcia hail from Italy; Ron Ray and Mark Auwarter run a business in Mexico;
and Jim and Christine Shepherd are raising their three daughters in China. As
it happens, Italy, Mexico and China are located in Texas, Missouri and
Michigan, respectively, but even in these small American towns, the benefits of
international investing-and EuroPacific's long-term, research-driven investment
approach-are readily apparent.
[three city signs indicating population]
<PAGE>
At Home in Italy, Texas
[globe]
[photo of family in field in Italy, Texas]
[Begin Caption]
Three generations of the Garcia family. Clockwise from the top are Diego,
Davee, Albert, Eva and baby Eli.
[End Caption]
[Begin Sidebar]
[photo of man in field]
Investing in Italy (the country)
With the advent of a common European currency and the push toward economic
convergence, Italy and other countries in the European Union face new
challenges - and compelling opportunities. Businesses are being forced to
restructure, consolidate and cut costs to thrive in a marketplace that may one
day rival the U.S. in size. "Interestingly, as European companies transform
themselves, they are validating the essence of our research approach," observes
Mark Denning, EuroPacific's president and a portfolio counselor. "Companies are
finally positioning themselves the way we've always seen them - in a global
context, rather than Italian, French or British." The fund's largest Italian
holding, Telecom Italia, has gained a strong foothold in Europe by being
technologically innovative. Its mobile phone subsidiary, for example, was one
of the first to offer prepaid phone cards for wireless handsets.
[End Sidebar]
Albert and Eva Garcia
Friday night is football night in Italy, as it is throughout Texas in the fall.
Virtually everyone turns out to watch the local team, the Gladiators, play.
Legend has it that this tiny city of 400 or so families - pronounced "It'lee"
by residents - was named back in the 1870s by a well-traveled postmaster.
Albert and Eva Garcia moved to Italy more than 20 years ago, when their
children were small. They are unflagging boosters of the place. "There's a real
sense of belonging here," says Eva. "Everyone knows who you are, and we really
look out for each other." She commutes 30 miles daily to her job at a large
hotel in Dallas. Albert, who had a long career as a ranch manager, now works as
a loan officer at a bank; he also tends to his and Eva's 400-acre spread. Their
eldest son, Albert, Jr., lives in Italy as well, with his wife, Davee, and
their baby, Eli. Diego, their younger son, is a sophomore at Texas A&M
University, studying agribusiness; he plans to return to Italy after graduation
to help run the family ranch.
[city sign of Italy showing population]
Having seen their parents struggle financially through their later years,
Albert and Eva were determined to build a secure retirement for themselves.
Their financial adviser suggested they make EuroPacific an important piece of
that plan. He explained that because markets in different countries don't
always move in sync, international diversification could help enhance overall
returns and reduce volatility. EuroPacific represents about 15% of the Garcia's
mutual fund portfolio.
Albert has always believed in not putting all his eggs in one basket. He had
already been diversifying his assets in real estate for many years. He began
buying property in the early 1980's, when a recession depressed housing prices.
Convinced that an economic turnaround would attract people back to the area, he
took out loans to buy and refurbish vacant homes. "It was difficult at times,"
he acknowledged. "I didn't expect to get paid back for many years, but I felt
sure that eventually those properties would pay for themselves many times
over." Albert's patience has paid off: Italy is experiencing the greatest boom
in its history, and there are no vacant homes in town.
Patience and an emphasis on value are fundamental characteristics of
EuroPacific's investment approach as well. Instead of chasing after market
fads, the fund's investment professionals invest in securities with attractive
prospects for growth - and then hold on to them for the long term. That
approach has served shareholders such as the Garcias very well over the years.
<PAGE>
At Home in Mexico, Missouri
[globe]
[photo of two men on chairs in park]
[smaller photo of two men in shopping center]
[Begin Caption]
Ron Ray (left) and Mark Auwarter
test some of their merchandise.
[End Caption]
[Begin Sidebar]
Investing in Mexico (the country)
[photo of two men and two children in shopping center]
Mexico's fortunes have long been linked to the vagaries of the economy in the
U.S., its biggest trading partner. Today, Mexico is also relying on its own
strengths: Its economy is recovering from a long recession, unemployment is
dropping, consumer demand is up and the peso has stabilized. That should bode
well for Mexican businesses, notes Rob Lovelace, a portfolio counselor who
began covering the country in 1985 as an analyst. "The most successful
companies," he says, "will build on the strength of their domestic business and
expand well beyond Mexico." He cites as an example Telefonos de Mexico, the
country's dominant phone service provider, which is forging a Pan-American
network with partners in Guatemala, Brazil and the U.S. Telmex, as it is known,
is the fund's largest Mexican holding; it has been in the portfolio almost
continuously since 1989, when the government began privatizing the company.
[End Sidebar]
Ron Ray and Mark Auwarter
Like many American cities, Mexico, Missouri, is enjoying an economic
resurgence. Once known primarily for its firebrick production and world-class
saddle-horse breeding, Mexico is home today to industries as diverse - and
international - as pharmaceuticals, manufacturing and fiber optics. Mark
Auwarter and Ron Ray, partners in a large furniture and appliance store in
Mexico, are benefiting from the renaissance. The two men began working together
in 1994, and have become good friends, with children close in age. (Logan and
Hayley are pictured above).
Of course, economic booms can't last forever. Mark and Ron know that
cultivating client loyalty is a top priority for keeping their business on
track. "This is a small community, and word gets around pretty fast," Mark
says. "If a shoddy sofa pops a spring six months or even a year after I sell
it, I haven't done my job well." More than anything, he realizes, their success
will depend on building strong long-term relationships and choosing product
lines they know well and trust.
[city sign of Mexico indicating population]
It's a strategy that meshes nicely with EuroPacific's own investment style.
"Because we do our homework so carefully, we tend to hold securities in the
portfolio longer than many funds," says Rob Lovelace, a portfolio counselor
based in Los Angeles. "Research not only gives us the ammunition to buy a stock
other investors are uncertain about, it also supports the conviction to stick
with it when others might be fleeing." The stocks in EuroPacific's portfolio
are held 3.4 years on average, compared with 1.3 years for the average
international fund.*
*Source: Lipper Inc., for the year ended March 31, 2000.
Neither Mark nor Ron plans to retire for several decades - both are in their
30s - but they are getting an early start on building for the future by
investing in EuroPacific and several other American Funds. (Mark invests
through the store's SIMPLE IRA plan.) The partners devote the bulk of their
resources to developing their business; they have deferred taking cash bonuses
for the time being, choosing to reap potentially greater benefits down the line
by being patient and investing for growth.
They also need no convincing about the merits of investing in markets outside
the U.S. "International companies touch our lives every day," explains Ron.
"Frigidaire, for example, is a U.S. company, but some of its built-in products
are made in Canada. And quite a few of the American furniture lines we carry
produce their goods in Thailand, Singapore, Indonesia - and, yes, in Mexico."
<PAGE>
At Home in China, Michigan
[globe]
[Begin Caption]
Jim and Chris Shepherd, with daughters Libby (left) and Kathryn.
[End Caption]
[photo of man on horse with lady and three children in field with house in
background]
[Begin Sidebar]
Investing in China (the country)
[photo of family by tree with tire swing]
Although EuroPacific's Chinese holdings are minimal, the fund benefits from
China's enormous potential by investing in global companies that have made
significant inroads in its consumer market. "From an investment standpoint,
Chinese markets are still too risky," explains Alwyn Heong, a portfolio
counselor who follows China. "Trading is poorly regulated, and foreign
investors often face severe liquidity problems. More fundamentally, we haven't
found Chinese companies we consider appropriate for the fund." (The Hong Kong
market still trades separately.) However, Ericsson, a large fund holding,
derives 15% of its revenues from China, where it is the largest supplier of
mobile phones. Similarly, News Corp., through its majority stake in Star TV,
supplies programming to more than 50 million Chinese homes. Other holdings with
a major Chinese presence include: Minebea, a ball bearing manufacturer; Hon
Hai, which makes mobile phone connectors; and consumer companies Fuji Photo and
Foster's.
[End Sidebar]
James and Christine Shepherd
The bucolic landscape of China, Michigan is punctuated by picturesque silos,
well-tended fields and the occasional cow grazing by the roadside. Named by a
settler nostalgic for his boyhood home - in China, Maine - the town lies
between the bottom tip of Lake Huron and Detroit, America's automobile capital.
Jim Shepherd runs a Lincoln-Mercury dealership, in fact, in nearby Richmond.
The business was founded some 50 years ago by his father and uncle, when
Studebakers and Packards filled the lot. Today, Jim and his family live on a
sprawling farm in China, equipped with a pond for swimming and skating, hay and
bean fields and a stable for their three horses. His wife, Chris, until
recently a school teacher, now has her hands full chasing after the couple's
three lively daughters, Kathryn, Libby and Madeline - ages five, three and one,
respectively.
[town sign for China indicating population]
Six years ago, Jim set up a Simplified Employee Pension (SEP) plan for the
dealership's 16 employees with the help of his financial adviser; participants
may contribute up to 12% of their annual compensation, with the dealership
matching the first 3%. EuroPacific, one of several American Funds in the plan,
gives employees a way to broaden their investment horizons. "It seems foolish
to ignore what international markets have to offer," Jim says.
He has observed firsthand, for example, how rapidly the automobile industry is
globalizing. Ford is acquiring the British Jaguar and Land Rover brands;
Chrysler, once one of the "Big Three" U.S. car companies, is owned by a German
firm. Indeed, that merger gave rise to a new investment opportunity:
DaimlerChrysler, as the new entity is called, is a holding in the fund.
To date, Jim is one of eight people at the dealership who are invested in
EuroPacific. Because he views his holdings as part of a long-term financial
strategy, temporary market dips are less a cause for anxiety than an
opportunity to buy shares at lower prices. So far, he's been very happy with
the results: After only six years, EuroPacific's 18.9%* average annual compound
return has helped him make considerable progress toward his goals.
*Return is for the six years ended March 31, 2000.
<PAGE>
What Makes the American Funds Different?
[globe]
As a shareholder in EuroPacific Growth Fund, you are also a member of The
American Funds Group,(r) the nation's third-largest mutual fund family. You
won't find us advertised, yet thousands of financial advisers recommend the
American Funds for their clients' serious money - money set aside for
education, a home, retirement and other important dreams.
What the 29 funds in our group have in common is a commitment to your best
interests and the proven approach of our investment adviser, Capital Research
and Management Company. In business since 1931, Capital's calling cards
include:
A Long-Term, Value-Oriented Approach: Rather than follow short-term fads, we
rely on our own intensive research to find well-managed companies with
reasonably priced securities and solid, long-term potential. Despite our size,
we offer relatively few funds compared with many large fund families, allowing
us to maintain a careful focus on our objectives and enabling you to benefit
from economies of scale.
An Unparalleled Global Research Effort: We opened our first overseas office in
1962, well before most mutual funds began investing internationally. Today, the
American Funds draw on one of the industry's most globally integrated research
networks. We spend substantial resources getting to know companies and
industries around the world.
A Multiple Portfolio Counselor System: More than 40 years ago, we developed a
unique strategy for managing investments that blends teamwork with individual
accountability. Every American Fund is divided among a number of portfolio
counselors, each of whom manages his or her portion independently, within each
fund's objectives; in most cases, research analysts manage a portion as well.
Over time, this method has contributed to consistency of results and continuity
of management.
Experienced Investment Professionals: Nearly 90% of the portfolio counselors
who serve the American Funds were in the investment business before the sharp
stock market decline in October 1987. Long tenure and experience through a
variety of market conditions mean we aren't "practicing" with your money.
A Commitment To Low Operating Expenses: You can't control market returns, but
you can control what you invest in and how much you pay to own it. American
Funds provide exceptional value for shareholders, with operating expenses that
are among the lowest in the mutual fund industry. Our portfolio turnover rates
are low as well, keeping transaction costs and tax consequences contained.
A Portfolio For Every Investor
Most financial advisers suggest that investors balance their portfolios by
investing across several types of investments. Which mix is right for you? That
depends on a number of things - including your risk tolerance, investment time
horizon and financial goals. The American Funds Group offers 29 funds with an
array of investment objectives to help you and your financial adviser build a
portfolio specifically tailored to your needs.
Growth Funds
Emphasis on long-term growth through stocks
AMCAP Fund(r)
EuroPacific Growth Fund(r)
The Growth Fund of America(r)
The New Economy Fund(r)
New Perspective Fund(r)
New World Fund(sm)
SMALLCAP World Fund(r)
Growth-and-Income Funds
Emphasis on long-term growth and dividends through stocks
American Mutual Fund(r)
Capital World Growth and Income Fund(sm)
Fundamental Investors(sm)
The Investment Company of America(r)
Washington Mutual Investors Fund(sm)
Equity-Income Funds
Emphasis on above-average income and growth through stocks and/or bonds
Capital Income Builder(r)
The Income Fund of America(r)
Balanced Fund
Emphasis on long-term growth and current income through stocks and bonds
American Balanced Fund(r)
Income Funds
Emphasis on current income through bonds
American High-Income Trust(sm)
The Bond Fund of America(sm)
Capital World Bond Fund(r)
Intermediate Bond Fund of America(r)
U.S. Government Securities Fund(sm)
Tax-Exempt Income Funds
Emphasis on tax-free current income through municipal bonds
American High-Income Municipal Bond Fund(r)
Limited Term Tax-Exempt Bond Fund of America(sm)
The Tax-Exempt Bond Fund of America(r)
State-specific tax-exempt funds
The Tax-Exempt Fund of California(r)
The Tax-Exempt Fund of Maryland(r)
The Tax-Exempt Fund of Virginia(r)
Money Market Funds
The Cash Management Trust of America(r)
The Tax-Exempt Money Fund of America(sm)
The U.S. Treasury Money Fund of America(sm)
We also offer a full line of retirement plans and variable annuities.
For more complete information about any of the funds, including charges and
expenses, please obtain a prospectus from your financial adviser, download one
from our Web site at www.americanfunds.com, or phone the fund's transfer agent,
American Funds Service Company, at 800/421-0180. Please read the prospectus
carefully before you invest or send money. For more information, ask your
financial adviser for a copy of A Portfolio for Every Investor.
<TABLE>
Europacific Growth Fund
Investment Portfolio, March 31, 2000
Largest Percent
Industry Diversification Individual of Net
Percent of Net Assets Holdings Assets
11.66% Electronic Components Vodafone AirTouch 5.68
11.51% Diversified Telecommunication Samsung Electronics 2.62
Services Rohm 2.16
7.84% Electrical & Electronics Ericsson 2.10
7.70% Wireless Telecommunication AstraZeneca 2.04
Services Telefonos de Mexico 1.94
7.59% Broadcasting & Publishing Murata Manufacturing 1.80
45.52% Other Industries Taiwan Semiconductor Manufacturing 1.70
0.42% Bonds & Notes Nokia 1.70
7.76% Cash and Equivalents News Corp. 1.50
<S> <C> <C> <C>
Shares or Market Percent
Principal Value of Net
EQUITY SECURITIES
(common and preferred stocks
and convertible debentures) Amount (Millions) Assets
---------------------------------- -------- -------- --------
ELECTRONIC COMPONENTS - 11.66%
Samsung Electronics Co., Ltd.
(South Korea) 3,364,811 1,020.101 2.62
Rohm Co., Ltd. (Japan) 2,420,000 839.103 2.16
Murata Manufacturing Co., Ltd. (Japan) 2,884,000 698.871 1.80
Taiwan Semiconductor Manufacturing
Co. Ltd. (Taiwan)(1) 98,122,000 662.114 1.70
Hon Hai Precision Industry
Co. Ltd. (Taiwan)(1) 45,914,000 533.497 1.37
Samsung Electro-Mechanics Co.
(South Korea) 3,330,000 232.648 .60
EPCOS AG (Germany)(1) 1,207,000 159.503 .41
Hoya Corp. (Japan) 1,624,000 152.999 .39
Hirose Electric Co., Ltd. (Japan) 840,000 118.217 .31
Newbridge Networks Corp. (Canada)(1) 3,600,000 116.775 .30
DIVERSIFIED TELECOMMUNICATION SERVICES
- 11.51%
Telefonos de Mexico,
SA de CV, Class L (ADR) (Mexico) 10,294,000 689.698
Telefonos de Mexico, SA de CV, Class L 19,225,000 65.356 1.94
Telecom Italia SpA,
nonconvertible savings shares (Italy) 46,514,800 317.188
Telecom Italia SpA, ordinary shares 14,661,800 219.377 1.38
Deutsche Telekom AG (Germany) 5,186,300 418.171 1.08
Koninklijke PTT Nederland NV
(Netherlands) 3,235,784 370.746 .95
Nippon Telegraph and Telephone Corp.
(Japan) 20,076 317.831 .82
Telefonica, SA (Spain)(1) 11,438,885 289.182 .74
British Telecommunications PLC
(United Kingdom) 14,292,100 266.484 .69
COLT Telecom Group PLC
(United Kingdom)(1) 5,128,371 242.209
COLT Telecom Group PLC 2.00%
convertible debentures 2006 EUR16,000,000 16.221 .66
Tele Danmark AS (Denmark) 1,794,400 161.629
Tele Danmark AS, Class B (ADR) 43,400 2.015 .42
Korea Telecom Corp. (ADR)
(South Korea) 2,709,200 118.528
Korea Telecom Corp. 107,100 9.498 .32
Videsh Sanchar Nigam Ltd.
(GDR) (India)(2) 3,104,209 82.106
Videsh Sanchar Nigam Ltd. (GDR) 780,150 20.635
Videsh Sanchar Nigam Ltd. 450,000 19.013 .31
France Telecom, SA (France) 700,000 120.658 .31
Portugal Telecom, SA (Portugal)(1) 6,650,000 85.332 .22
Magyar Tavkozlesi Rt. (ADR) (Hungary) 1,905,500 85.033 .22
Teleglobe Inc. (Canada) 2,842,500 77.354 .20
Telefonica de Argentina SA,
Class B (ADR) (Argentina) 1,939,400 76.121 .20
BCE Inc. (Canada) 580,000 72.325 .19
Hellenic Telecommunications
Organization SA (Greece)(1) 2,466,000 70.245 .18
Telecom Corp. of New Zealand Ltd
. (New Zealand) 6,940,000 31.359
Telecom Corp. of New Zealand Ltd. (2) 3,553,000 16.054
Telecom Corp. of New Zealand
Ltd. (ADR) 25,000 .917 .12
Compania de Telecomunicaciones
de Chile SA (ADR) (Chile) 2,034,673 46.289 .12
Telefonica del Peru SA,
Class B (ADR) (Peru) 2,408,900 40.951 .11
Philippine Long Distance Telephone
Co. (ADR) (Philippines) 1,826,094 40.060 .10
Tiscali SpA (Italy)(1) 43,000 30.016 .08
Mahanagar Telephone Nigam Ltd.
(India) 3,425,000 18.482
Mahanagar Telephone Nigam Ltd.
(GDR) (2) 570,600 7.988 .07
Telecom Argentina STET-France Telecom
SA, Class B (ADR) (Argentina) 439,300 15.266 .04
Telstra Corp. Ltd. (Australia) 3,338,500 15.136 .04
ELECTRICAL & ELECTRONICS - 7.84%
Telefonaktiebolaget LM Ericsson,
Class B (Sweden) 6,250,000 550.453
Telefonaktiebolaget LM Ericsson,
Class B (ADR) 2,820,000 264.551 2.10
Nokia Corp., Class A (ADR) (Finland) 1,600,000 347.600
Nokia Corp., Class A 1,480,000 313.212 1.70
NEC Corp. (Japan) 14,950,000 439.962 1.13
Siemens AG (Germany) 1,725,000 248.605 .64
Matsushita Communication Industrial
Co., Ltd. (Japan) 1,079,000 198.068 .51
Toshiba Corp. (Japan) 17,100,000 173.724 .45
ECI Telecom Ltd. (Israel) 4,115,000 129.108 .33
Hitachi, Ltd. (Japan) 10,670,000 126.328 .33
Logica PLC (United Kingdom) 2,800,000 93.831 .24
Nortel Networks Corp. (Canada) 500,000 63.000 .16
Premier Farnell PLC (United Kingdom) 8,550,000 53.841 .14
Elektrim SA 3.75% convertible
debentures 2004 (Poland) EUR39,100,000 41.186 .11
WIRELESS TELECOMMUNICATION SERVICES
- 7.7%
Vodafone AirTouch PLC (United Kingdom) 392,101,014 2,179.523
Vodafone AirTouch PLC (ADR) 525,000 29.170 5.68
Telecom Italia Mobile SpA (Italy) 14,805,000 181.058
Telecom Italia Mobile SpA,
savings shares 20,705,000 97.807 .72
DDI Corp. (Japan) 29,344 239.118 .62
NTT Mobile Communications Network,
Inc. (Japan) 6285 216.102 .56
SK Telecom Co., Ltd. (ADR)
(South Korea) 684,235 26.685 .07
Telesp Celular Participacoes SA,
preferred nominative (Brazil) 940,818,476 21.432
Telesp Celular Participacoes SA,
ordinary nominative 222,115,950 3.663 .05
BROADCASTING & PUBLISHING - 7.59%
News Corp. Ltd. (ADR) (Australia) 3,958,200 222.649
News Corp. Ltd., preferred 15,495,555 183.353
News Corp. Ltd. 8,747,208 122.186
News Corp. Ltd., preferred (ADR) 1,181,600 56.421 1.50
CANAL + (France) 2,256,060 496.893 1.28
Mediaset SpA (Italy)(2) 9,174,544 178.874
Mediaset SpA 6,593,000 128.542 .79
Grupo Televisa, SA, ordinary
participation certificates (ADR)
(Mexico)(1) 3,994,400 271.619 .70
Nippon Television Network Corp.
(Japan) 331,980 235.056 .60
Fuji Television Network Inc. (Japan) 10,035 173.488 .47
KirchMedia GmbH & Co. KGaA
(Germany)(1),(2),(3) 3,430,000 144.009 .37
Pearson PLC (United Kingdom) 2,565,000 89.228 .23
Television Broadcasts Ltd.
(Hong Kong) 9,518,000 84.649 .22
AUDIOFINA (Luxembourg) 670,000 82.444 .21
Modern Times Group MTG AB,
Class B (ADR) (Sweden)(1) 211,822 57.615
Modern Times Group MTG AB,
Class A (1) 302,260 14.275 .18
Publishing & Broadcasting Ltd.
(Australia) 8,425,111 71.522 .18
SOFTBANK CORP. (Japan) 80,000 71.096 .18
United News & Media PLC
(United Kingdom) 3,400,000 44.755
United News & Media PLC 6.125%
convertible debentures 2003 GBP7,400,000 14.355 .15
Thomson Corp. (Canada) 1,660,000 52.093 .13
Arnoldo Mondadori Editore SpA
(Italy) 1,950,000 49.596 .13
Independent Newspapers, PLC
(Ireland) 4,652,737 45.668 .12
Daily Mail and General Trust PLC,
Class A (United Kingdom) 1,580,000 30.921 .08
Shaw Communications Inc.,
Class B (Canada) 1,000,000 26.869 .07
BANKING - 7.41%
Sakura Bank, Ltd. (Japan) 48,906,000 370.975
Sakura Finance (Bermuda) Trust,
convertible preference share units
(Japan - Incorporated in Bermuda) 1,614,000,000 23.044 1.01
ABN AMRO Holding NV (Netherlands) 15,477,594 345.189 .89
Bank of Nova Scotia (Canada) 12,098,200 242.131 .62
Lloyds TSB Group PLC (United Kingdom) 22,200,000 234.407 .60
Bank of Scotland (United Kingdom) 19,433,419 220.074 .57
Fuji Bank, Ltd. (Japan) 19,426,000 182.072 .47
Westpac Banking Corp. (Australia) 25,452,151 159.278 .41
DBS Group Holdings Ltd. (Singapore) 9,535,550 125.915 .32
Asahi Bank, Ltd. (Japan) 21,433,000 119.697 .31
Australia and New Zealand Banking
Group Ltd. (Australia) 14,893,887 93.991 .24
STB Cayman Capital, Ltd. 0.50%
convertible debentures 2007 (Japan-
Incorporated in Cayman Islands) Y5,925,000,000 92.938 .24
Bangkok Bank PCL (Thailand)(1) 49,400,000 84.992 .22
Royal Bank of Canada (Canada) 1,752,700 82.111 .21
Tokai Bank, Ltd. (Japan) 12,500,000 75.272 .19
Unibanco-Uniao de Bancos Brasileiros
SA, units (GDR) (Brazil) 1,800,000 57.150 .15
Hang Seng Bank Ltd. (Hong Kong) 6,095,500 53.232 .14
Shinhan Bank (South Korea) 4,450,000 47.722 .12
Banque Nationale de Paris (France) 580,000 45.821
Banque Nationale de Paris,
guaranteed value certificates,
expire 2002 (1) 117,000 .822 .12
ForeningsSparbanken AB,
Class A (Sweden) 2,860,000 38.994 .10
Toronto-Dominion Bank (Canada) 1,223,700 32.373 .08
Svenska Handelsbanken Group,
Class A (Sweden) 2,000,000 24.716 .06
Dai-Ichi Kangyo Bank, Ltd. (Japan) 2,500,000 23.213 .06
Commonwealth Bank of Australia
(Australia) 1,632,788 22.332 .06
HSBC Holdings PLC (United Kingdom) 1,600,000 18.699 .05
Sumitomo Bank, Ltd. (Japan) 1,200,000 17.832 .05
Barclays PLC (United Kingdom) 522,400 13.848 .04
Toyo Trust and Banking Co., Ltd.
(Japan) 2,800,000 10.606 .03
MBL International Finance (Bermuda)
Trust 3.00% convertible
debentures 2002 (Bermuda) $9,000,000 10.170 .03
Unidanmark A/S, Class A (Denmark) 122,500 7.866 .02
National Australia Bank Ltd.
(Australia) 18,829 .242 .00
HEALTH & PERSONAL CARE - 4.75%
AstraZeneca PLC (United Kingdom) 19,563,492 792.264 2.04
Elan Corp., PLC (ADR) (Ireland)(1) 10,874,800 516.553 1.31
Shionogi & Co., Ltd. (Japan) 7,954,000 140.756 .36
Fujisawa Pharmaceutical Co. Ltd.
(Japan) 3,621,000 126.608 .33
Novartis AG (Switzerland) 84,866 116.193 .30
Glaxo Wellcome PLC (United Kingdom) 2,000,000 57.261 .15
Nycomed Amersham PLC (United Kingdom) 4,700,000 37.492 .10
Aventis SA (France) 620,000 33.960 .09
Sanofi-Synthelabo SA (France)(1) 665,600 25.400 .07
BUSINESS SERVICES - 2.94%
Vivendi SA (France) 1,723,238 198.846 .51
Reuters Group PLC (United Kingdom) 7,142,460 144.339 .37
TNT Post Groep (Netherlands) 5,190,107 116.647 .32
Rentokil Initial PLC (United Kingdom) 40,022,900 103.262 .27
Brambles Industries Ltd. (Australia) 4,005,000 101.827 .26
Hikari Tsushin, Inc. (Japan) 107,000 81.892 .21
Securitas AB, Class B (Sweden) 3,108,000 75.375 .19
InterQ Inc. (Japan)(1) 184,000 72.378 .19
Adecco SA (Switzerland)(1) 92,000 63.700 .16
United Utilities PLC (United Kingdom) 4,978,414 52.011 .13
Intershop Communications AG
(Germany)(1) 80,000 40.372 .10
Thames Water PLC (United Kingdom) 1,869,931 21.121 .05
e.Biscom (Italy)(1) 80,700 21.006 .05
Hyder PLC (United Kingdom) 4,023,381 14.375 .04
Lernout & Hauspie Speech
Products NV (Belgium)(1) 130,000 14.365 .04
Ratin A/S (Denmark) 110,000 9.667 .02
Liberty Surf Group SA (France)(1) 83,300 4.666 .01
Lycos Europe NV (Netherlands)(1) 144,800 2.884 .01
World Online International NV
(Netherlands)(1) 100,000 2.236 .01
AUTOMOBILES - 2.51%
Volvo AB, Class B (Sweden) 10,894,200 294.544 .76
Suzuki Motor Corp. (Japan) 18,015,000 273.829 .70
Honda Motor Co., Ltd. (Japan) 6,010,000 247.498 .64
DaimlerChrysler AG
(New York registered) (Germany) 1,000,000 65.438 .17
Mitsubishi Motors Corp. (Japan)(1) 12,856,000 48.697 .13
Bayerische Motoren Werke AG (Germany) 1,455,600 45.928 .11
Nissan Motor Co., Ltd. (Japan)(1) 150,000 .612 .00
ENERGY SOURCES - 2.51%
TOTAL FINA SA, Class B (France) 2,133,378 266.114
TOTAL FINA SA, Class B (ADR) 828,807 61.021 .84
Broken Hill Proprietary Co. Ltd.
(Australia) 20,032,290 216.880 .56
Norsk Hydro AS (Norway) 2,370,000 89.630
Norsk Hydro AS (ADR) 500,000 19.031 .28
Royal Dutch Petroleum Co. (Netherlands) 1,000,000 58.423
Royal Dutch Petroleum Co.
(New York Registered Shares) 280,000 16.118
Shell Transport and Trading Co., PLC
(New York Registered Shares)
(United Kingdom) 675,000 33.117 .28
Sasol Ltd. (South Africa) 13,213,700 82.624 .21
Enterprise Oil PLC (United Kingdom) 10,800,000 77.768 .20
Suncor Energy Inc. (Canada) 750,000 32.475 .08
Petro-Canada (Canada) 1,400,000 23.293 .06
MERCHANDISING - 2.34%
Dixons Group PLC (United Kingdom) (1) 61,909,181 286.608 .74
EM.TV & Merchandising AG (Germany) (1) 1,658,000 136.225
EM.TV & Merchandising AG 4.00%
convertible debentures 2005 EUR31,151,000 31.247 .43
Ito-Yokado Co., Ltd. (Japan) 2,150,000 153.273 .39
Kingfisher PLC (United Kingdom) 10,379,940 84.362 .22
Safeway PLC (United Kingdom) 19,615,000 59.584 .15
Tesco PLC (United Kingdom) 17,744,600 59.082 .15
Wal-Mart de Mexico, SA de CV,
Class V (formerly Cifra, SA de CV)
(Mexico)(1) 16,787,918 40.674
Wal-Mart de Mexico, SA de CV,
Class C (1) 6,037,600 14.074 .14
Loblaw Companies Ltd. (Canada) 1,560,100 38.479 .10
Coles Myer Ltd. (Australia) 1,380,100 5.443 .02
MULTI-INDUSTRY - 2.16%
Thyssen Krupp AG (Germany)(1) 8,405,000 207.252 .53
Orkla AS, Class A (Norway) 11,023,999 168.331 .43
Invensys PLC (United Kingdom) 20,600,000 91.507 .24
Lend Lease Corp. Ltd. (Australia) 6,839,640 88.364 .23
Lagardere Groupe SCA (France) 920,000 74.752 .19
Hutchison Whampoa Ltd. (Hong Kong) 3,235,000 58.373 .15
Preussag AG (Germany) 1,000,096 46.065 .12
Anglo American PLC (United Kingdom) 700,000 32.420 .08
PT Astra International (Indonesia)(1) 54,000,000 25.910 .07
Ayala Corp. (Philippines) 74,866,500 16.596 .04
PT Multimedia (Portugal)(1) 180,000 16.030 .04
TI Group PLC (United Kingdom) 3,197,300 15.758 .04
FOOD & HOUSEHOLD PRODUCTS - 1.59%
Nestle SA (Switzerland) 141,457 253.803 .65
Groupe Danone (France) 769,400 170.196 .44
Reckitt Benckiser PLC
(formerly Reckitt & Colman PLC)
(United Kingdom) 8,538,919 81.207 .21
Seven-Eleven Japan Co., Ltd. (Japan) 700,000 80.225 .21
Uni-Charm Corp. (Japan) 460,000 30.157 .08
APPLIANCES & HOUSEHOLD DURABLES - 1.51%
Sony Corp. (Japan) (1) 3,633,100 513.462 1.32
Koninklijke Philips Electronics
NV (Netherlands) 440,000 73.988 .19
DATA PROCESSING & REPRODUCTION - 1.44%
Fujitsu Ltd. (Japan) 10,346,000 316.530 .81
Acer Inc. (Taiwan)(1) 54,193,750 152.520
Acer Inc. SIZeS 0% convertible
debentures 2005 (2) $6,425,000 6.666 .41
Compal Electronics Inc. (Taiwan) 13,613,600 56.686 .15
Getronics NV (Netherlands) 350,000 26.779 .07
BEVERAGES & TOBACCO - 1.17%
Foster's Brewing Group Ltd. (Australia) 61,703,800 153.137 .38
Ito En, Ltd. (Japan) 812,700 97.878 .25
South African Breweries PLC
(United Kingdom) 7,947,287 60.899 .16
Heineken NV (Netherlands) 630,000 33.694 .09
LVMH Moet Hennessy Louis
Vuitton (France) 70,000 29.306 .08
Panamerican Beverages, Inc.,
Class A (Mexico - Incorporated in Panama) 1,269,100 22.368 .06
Coca-Cola Beverages PLC
(United Kingdom) (1) 9,567,371 17.778 .05
Lion Nathan Ltd. (New Zealand) 8,000,000 13.690 .04
Coca-Cola West Japan Co. Ltd. (Japan) 500,000 13.112 .03
Coca-Cola Amatil Ltd. (Australia) 5,201,157 12.939 .03
I.T.C. Ltd. (India) 372 .006 .00
INSURANCE - 1.14%
ING Groep NV (Netherlands) 3,667,737 198.792 .50
PartnerRe Holdings Ltd.
(Singapore - Incorporated in Bermuda) 2,031,900 74.799 .19
Union des Assurances Federales (France) 493,960 59.600 .15
Royal & Sun Alliance Insurance Group
PLC (United Kingdom) 7,048,439 44.295 .11
Swiss Life-Mannesmann 1.50% convertible
debentures 2003 (Switzerland)(2) $8,000,000 24.250
Swiss Life-Glaxo Wellcome 2.00%
convertible debentures 2003(2) $15,000,000 14.568 .10
Allied Zurich PLC (United Kingdom) 1,950,000 21.126 .05
AEGON NV (Netherlands) 195,000 15.592 .04
RECREATION & OTHER CONSUMER
PRODUCTS - 1.12%
Nintendo Co., Ltd. (Japan) 1,195,700 209.619 .54
EMI Group PLC (United Kingdom) 12,351,900 131.465 .34
Fuji Photo Film Co., Ltd. (Japan) 1,320,000 57.949 .15
Square Co., Ltd. (Japan) 318,450 32.785 .09
MACHINERY & ENGINEERING - 0.85%
GKN PLC (United Kingdom) 12,400,000 154.565 .40
Mitsubishi Heavy Industries, Ltd. (Japan) 21,000,000 65.880 .17
Metso Oyj (Finland) 3,400,000 45.907 .12
Smiths Industries PLC (United Kingdom) 3,200,000 39.020 .11
Kvaerner ASA, Class A (Norway)(1) 1,294,720 19.310 .05
IT CONSULTING & SERVICES - 0.77%
CMG PLC (United Kingdom) 1,121,109 96.371 .25
Sema Group PLC (United Kingdom) 4,050,000 80.876 .21
ALTRAN TECHNOLOGIES (France) 300,000 73.256 .19
Dimension Data Holdings Ltd.
(South Africa)(1) 5,325,237 47.580 .12
AEROSPACE & MILITARY TECHNOLOGY - 0.65%
Bombardier Inc., Class B (Canada) 8,400,000 210.940 .54
SAGEM SA (France)(1) 33,000 43.293 .11
LEISURE & TOURISM - 0.64%
Granada Group PLC (United Kingdom) 13,697,532 146.925 .38
Seagram Co. Ltd. (Canada) 1,200,000 71.400 .18
Thomson Travel Group PLC (United Kingdom) 19,300,000 29.860 .08
BUILDING MATERIALS & COMPONENTS - 0.61%
TOSTEM CORP. (Japan) 6,990,000 112.698 .29
Cemex, SA de CV, ordinary participation
certificates, Units (ADR) (Mexico) 4,199,314 95.009
Cemex, SA de CV, warrants (ADR),
expire 2002(1) 262,457 .919 .25
Holderbank Financiere Glaris
Ltd. (Switzerland) 23,966 28.571 .07
FOREST PRODUCTS & PAPER - 0.59%
UPM-Kymmene Corp. (Finland) 3,680,800 103.980 .27
Abitibi-Consolidated Inc. (Canada) 9,500,000 91.302 .22
Stora Enso Oyj (Finland) 2,394,843 25.685 .07
AssiDoman AB (Sweden) 600,000 9.956 .03
OTHER INDUSTRIES - 4.50%
Pechiney, Class A (France) 3,078,675 151.092 .39
Deutsche Lufthansa AG (Germany) 5,400,000 123.329 .32
ORIX Corp. (Japan) 772,400 101.492
ORIX Corp. 0.375% convertible
debentures 2005 Y600,000,000 8.195 .28
BOC Group PLC (United Kingdom) 5,005,000 97.951 .25
Buhrmann NV (Netherlands) 3,844,000 97.547 .25
ADVANTEST CORP. (Japan) 375,200 79.406 .20
NGK Spark Plug Co., Ltd. (Japan) 6,412,000 72.864 .19
Sun Hung Kai Properties Ltd. (Hong Kong) 8,150,000 70.651 .18
Minebea Co., Ltd. (Japan) 4,904,000 65.015 .17
De Beers Consolidated Mines Ltd.
(South Africa) 2,638,800 61.875 .16
Nichiei Co., Ltd. (Japan) 3,000,000 56.672 .15
British Airways PLC (United Kingdom) 10,000,000 52.555 .13
L'Air Liquide (France) 361,095 50.174 .13
Hongkong Land Holdings Ltd.
(Hong Kong - Incorporated in Bermuda) 34,363,300 47.765 .12
Mitsui & Co., Ltd. (Japan) 5,600,000 45.144 .11
Manila Electric Co., Class A (GDR)
(Philippines) (2),(3) 3,110,000 27.558
Manila Electric Co., Class B 9,540,381 16.733 .11
Cia. Energetica de Minas Gerais
- CEMIG, preferred nominative
(ADR) (Brazil) 2,393,418 41.286
Cia. Energetica de Minas Gerais
- CEMIG, ordinary nominative 163,059,152 2.050
Cia. Energetica de Minas Gerais
- CEMIG, preferred nominative (ADR) (2) 26,066 .450 .11
PowerGen PLC (United Kingdom) 7,261,943 42.625 .11
Tokyo Electron Ltd. (Japan) 275,000 41.400 .11
Stolt-Nielsen SA, Class B (ADR)
(Incorporated in Luxembourg) 1,997,900 36.961 .10
National Power PLC (United Kingdom) 7,135,400 35.765 .09
Corus Group PLC (United Kingdom) 19,940,200 32.441 .08
Nikon Corp. (Japan) 832,000 31.838 .08
Bergesen d.y. AS, Class B (Norway) 1,130,000 19.662
Bergesen d.y. AS, Class A 542,800 9.830 .08
Bayer AG (Germany) 600,000 26.947 .07
Cheung Kong (Holdings) Ltd. (Hong Kong) 1,800,000 26.931 .07
Bouygues SA (France) 30,000 23.787 .06
Security Capital Global Realty
(Luxembourg)(1),(2),(3) 1,125,000 21.611 .06
Peninsular and Oriental Steam
Navigation Co. (United Kingdom) 1,985,628 20.634 .05
Scottish Power PLC (United Kingdom) 2,350,000 19.032 .05
Ayala Land, Inc. (Philippines) 105,880,000 17.540 .05
Bridgestone Corp. (Japan) 775,000 17.049 .04
Imperial Chemical Industries PLC
(ADR) (United Kingdom) 430,000 13.867 .04
Valeo (France) 240,000 11.824 .03
Cie. Generale des Etablissements
Michelin, Class B (France) 324,303 10.416 .03
Morgan Crucible Co. PLC (United Kingdom) 2,550,836 10.090 .03
Shohkoh Fund & Co., Ltd. (Japan) 60,000 8.683 .02
MISCELLANEOUS - 4.32%
Other equity securities in
initial period of acquisition 1,679.656 4.32
-------- --------
TOTAL EQUITY SECURITIES (cost: $20,485.071) 35,687.695 91.82
-------- --------
Shares/Principal Market Percent
Amount Value of Net
BONDS & NOTES (Millions) (Millions) Assets
------------------------------------ -------- -------- --------
BROADCASTING & PUBLISHING - 0.05%
Grupo Televisa, SA 0%/13.25% 2008(4) $20.000 19.750 .05
NON U.S. GOVERNMENT OBLIGATIONS
- 0.37%
Brazil (Federal Republic of),
Bearer 8.00% 2014 $161.951 121.868 .32
Argentina (Republic of) 11.75% 2007 ARP14.00 13.202
Argentina (Republic of) 11.375% 2017 $7.500 7.313 .05
-------- --------
TOTAL BONDS & NOTES (cost: $136.338) 162.133 .42
-------- --------
Principal Market Percent
Amount Value of Net
SHORT-TERM SECURITIES (Millions) (Millions) Assets
------------------------------------- -------- -------- --------
Corporate Short-Term Notes - 5.44%
BMW US Capital Corp. 5.99%-6.01%
due 4/20-5/26/2000 107.800 107.037 .28
Deutsche Bank Financial Inc.
5.94%-6.08% due 4/17-6/20/2000 106.300 105.489 .27
General Motors Acceptance Corp.
5.84%-5.92% due 4/19-5/19/2000 101.500 100.868 .26
Ciesco LP 5.85%-5.87% due 4/17-4/24/2000 100.000 99.667 .26
E.I. du Pont de Nemours and Co.
5.80%-6.00% due 4/6-5/23/2000 100.300 99.556 .26
Societe Generale North America Inc.
6.00%-6.02% due 5/19-5/24/2000 96.800 95.969 .25
Procter & Gamble Co.
5.83%-5.98% due 4/20-4/27/2000 94.763 94.395 .24
General Electric Capital Corp.
5.91%-6.04% due 4/28-5/9/2000 93.400 92.926 .24
International Lease Finance
Corp. 5.85%-6.01% due 5/3-5/26/2000 91.000 90.362 .23
American Honda Finance Corp.
5.87%-6.04% due 5/5-5/23/2000 86.400 85.751 .22
Archer Daniels Midland Co.
5.86%-6.03% due 5/2-5/22/2000 86.000 85.425 .22
DaimlerChrysler NA Holdings
5.86%-6.03% due 5/10-5/16/2000 85.300 84.707 .22
Coca-Cola Co. (The)
5.86%-5.96% due 4/25-5/18/2000 83.300 82.732 .21
Toronto-Dominion Holdings USA Inc.
5.79%-5.82% due 4/3-4/4/2000 69.500 69.459 .18
Dresdner U.S. Finance Inc.
6.01%-6.08% due 5/19-6/20/2000 66.000 65.372 .17
Ford Motor Credit Co.
5.82%-5.86% due 4/7-5/4/2000 65.500 65.271 .17
Equilon Enterprises LLC
5.82%-5.86% due 4/11-5/4/2000 65.000 64.786 .17
H.J Heinz Co.
5.82%-5.97% due 4/18-4/28/2000 58.700 58.474 .15
Svenska Handelsbanken
6.01% due 4/19/2000 50.000 49.841 .13
KfW International Finance Inc.
5.89%-5.90% due 5/17-5/31/2000 50.300 49.809 .13
Bell Atlantic Financial Services
Inc. 5.85% due 4/27/2000 50.000 49.781 .13
FCE Bank 5.87%-6.06% due 4/25-6/8/2000 49.800 49.457 .13
Spintab AB 5.98% due 6/9/2000 48.000 47.432 .12
CBA (Delaware) Finance Inc.
5.89%-5.90% due 5/10-5/15/2000 45.000 44.682 .11
Motiva Enterprises LLC
5.82%-5.85% due 4/13-4/26/2000 43.200 43.060 .11
Chevron U.K. Investment PLC
5.83%-5.93% due 4/7-5/5/2000 40.000 39.862 .10
Halifax PLC 5.90% due 5/24/2000 40.000 39.639 .10
Eksportfinans ASA 5.82% due 4/6/2000 35.000 34.966 .09
Den Danske Corp. Inc. 5.83% due 4/5/2000 25.000 24.980 .06
Abbey National North America
5.82% due 4/10/2000 25.000 24.960 .06
Canadian Imperial Holdings Inc.
5.83% due 4/11/2000 25.000 24.955 .06
Bayerische Hypotheken-und
Wechsel-Bank AG 5.82% due 4/12/2000 25.000 24.951 .06
Westpac Trust Securities NZ LTD.
5.81% due 4/14/2000 20.000 19.955 .05
Federal Agency Discount Notes - 1.42%
Freddie Mac
5.70%-6.04% due 4/6-6/29/2000 327.100 324.184 .83
Fannie Mae
5.71%-6.05% due 4/6-6/29/2000 115.382 114.345 .30
Federal Home Loan Banks
5.63%-6.00% due 5/17-5/26/2000 113.863 112.860 .29
Certificates of Deposit - 0.21%
Canadian Imperial Bank of Commerce
5.88%-5.91% due 4/5-4/10/2000 55.000 55.000 .14
Morgan Guaranty Trust Co. of
New York 6.07% due 4/19/2000 25.000 25.000 .07
Non-U.S. Currency - 0.02%
New Taiwanese Dollar NT$202.528 6.666 .02
-------- --------
TOTAL SHORT-TERM SECURITIES
(cost: $2,755.419 million) 2,754.631 7.09
-------- --------
TOTAL INVESTMENT SECURITIES
(cost: $23,376.828 million) 38,604.459 99.33
Excess of cash and receivables
over payables 262.739 .67
-------- --------
NET ASSETS $38,867.198 100.00
-------- --------
(1) Non-income producing securities.
(2) Purchased in a private placement
transaction; resale to the public
may require registration or sale only
to qualified institutional buyers.
(3) Valued under procedures established
by the Board of Trustees.
(4) Step bond; coupon rate will
increase at a later date.
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
</TABLE>
<TABLE>
Companies Added to the Portfolio
Since September 30, 1999
<S> <C>
AUDIOFINA LVMH Moet Hennessy Louis Vuitton
Aventis Lycos Europe
BCE Newbridge Networks
Bouygues Nikon
British Airways Peninsular and Oriental Steam Navigation
CMG PowerGen
Compal Electronics PT Multimedia
Dai-Ichi Kangyo Bank SAGEM
DaimlerChrysler Samsung Electro-Mechanics
DBS Group Holdings Sema Group
e.Biscom Seven-Eleven Japan
Enterprise Oil Shaw Communications
EPCOS Shinhan Bank
Getronics Shionogi
Heineken Shohkoh Fund
InterQ Smiths Industries
Intershop Communications Suncor Energy
KirchMedia Svenska Handelsbanken
Korea Telecom Taiwan Semiconductor
Lernout & Hauspie Thomson Travel
Liberty Surf Tiscali
Lloyds TSB World Online
Logica
Companies Eliminated from
the Portfolio Since
September 30, 1999
Amway Japan Mitsubishi Estate
Asahi Breweries Orange
Bajaj Auto Pathe
Cadbury Schweppes Perusahan Perseroan (Persero)
Carrefour !PT Indonesian Satellite
Cia. Paranaese de Energia - COPEL Peugeot
Elf Aquitaine Porsche
George Weston Qantas Airways
H & M Hennes & Mauritz Raisio
Keyence Shiseido
Koninklijke Ahold SmithKline Beecham
LIGHT-Servicos de Electricidade Societe Europeenne des Satellites
Sony Music Entertainment
Swedish Match
Swisscom
</TABLE>
<TABLE>
EuroPacific Growth Fund
Financial Statements
<S> <C> <C>
Statement of Assets and Liabilities (dollars in millions)
at March 31, 2000
ASSETS:
Investment securities at market
(cost: $23,376.828) $38,604.459
Receivables for--
Sales of investments $319.724
Sales of fund's shares 129.724
Dividends and accrued interest 88.045 537.493
---------- ----------
39,141.952
LIABILITIES:
Payables for--
Purchases of investments 197.103
Repurchases of fund's shares 42.338
Forward currency contracts - net 4.385
Management services 14.201
Accrued expenses and other 16.727 274.754
---------- ----------
NET ASSETS AT MARCH 31, 2000-- $38,867.198
==========
Class A shares, unlimited shares authorized:
Net assets $38,837.311
Shares of beneficial interest outstanding 870,681,797
Net asset value per share $44.61
Class B shares, unlimited shares authorized:
Net assets $29.887
Shares of beneficial interest outstanding 670,255
Net asset value per share $44.59
Statement of Operations
for the year ended March 31, 2000 (dollars in millions)
INVESTMENT INCOME:
Income:
Dividends $346.378
Interest 159.523
---------- $505.901
Expenses:
Management services fee 131.596
Distribution expenses - Class A 71.410
Distribution expenses - Class B .008
Transfer agent fee - Class A 20.323
Transfer agent fee- Class B .001
Reports to shareholders .677
Registration statement and prospectus 1.268
Postage, stationery and supplies 3.081
Directors' fees .319
Auditing and legal fees .102
Custodian fee 10.942
Taxes other than federal income tax .452
Other expenses .437 240.616
---------- ----------
Net investment income 265.285
----------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
Net realized gain 3,084.054
Net change in unrealized appreciation on:
Investments 9,243.158
Open forward currency contracts (4.385)
----------
Net unrealized appreciation 9,238.773
----------
Net realized gain and
unrealized appreciation
on investments 12,322.827
----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 12,588.112
==========
Statement of Changes in Net Assets Year ended March 31,
(dollars in millions) 2000 1999
---------- ----------
OPERATIONS:
Net investment income $ 265.285 $ 299.948
Net realized gain on investments 3,084.054 769.649
Net increase in urealized appreciation
on investments 9,238.773 523.918
---------- ----------
Net increase in net assets
resulting from operations 12,588.112 1,593.515
---------- ----------
DIVIDENDS AND DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income, Class A (221.364) (258.117)
Distributions from net realized gains on
investments, Class A (1,078.276) (901.166)
---------- ----------
Total Dividends and Distributions (1,299.640) (1,159.283)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 10,707.128 4,252.412
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments 1,245.354 1,110.693
Cost of shares repurchased (6,456.731) (5,030.545)
---------- ----------
Net increase in net assets resulting from
capital share transactions 5,495.751 332.560
---------- ----------
TOTAL INCREASE IN NET ASSETS 16,784.223 766.792
NET ASSETS:
Beginning of year 22,082.975 21,316.183
---------- ----------
End of year (including
undistributed net investment
income: $61.015 and $65.361
respectively) $38,867.198 $22,082.975
========== ==========
See Notes to Financial Statements
</TABLE>
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - 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 United States. The fund offers Class
A and Class B shares. Class A shares are sold with an initial sales charge of
up to 5.75%. Class B shares are sold with a contingent deferred sales charge,
which declines from 5% to zero depending on the length of time the shares are
held, and include a higher distribution fee than Class A shares. Class B shares
are automatically converted to Class A shares eight years after the date of
purchase. Holders of both classes of shares have equal pro rata rights to
assets and identical voting, dividend, liquidation and other rights, except
that each class bears different distribution and transfer agent expenses, and
each class shall have exclusive rights to vote on matters affecting only their
class.
SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with generally accepted accounting principles which require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of the significant accounting
policies consistently followed by the fund in the preparation of its financial
statements:
SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at the last reported sale price on the exchange or market on which such
securities are traded, as of the close of business on the day the securities
are being valued or, lacking any sales, at the last available bid price. In
cases where equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market. Fixed-income securities
are valued at prices obtained from a pricing service, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued at the mean quoted bid and
asked prices or at prices for securities of comparable maturity, quality and
type. The ability of the issuers of the debt securities held by the fund to
meet their obligations may be affected by economic developments in a specific
industry, state or region. Short-term securities maturing within 60 days are
valued at amortized cost, which approximates market value. Forward currency
contracts are valued at the mean of their representative quoted bid and asked
prices. Securities and assets for which representative market quotations are
not readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Trustees.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities initially expressed in
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing
market rates at the end of the reporting period. Purchases and sales of
securities and income and expenses are translated into U.S. dollars at the
prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities and other
assets and liabilities are included with the net realized and unrealized gain
or loss on investment securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are
accounted for as of the trade date. Realized gains and losses from securities
transactions are determined based on specific identified cost. In the event
securities are purchased on a delayed delivery or "when-issued" basis, the fund
will instruct the custodian to segregate liquid assets sufficient to meet its
payment obligations in these transactions. Dividend income is recognized on
the ex-dividend date, and interest income is recognized on an accrual basis.
Market discounts, premiums, and original issue discounts on securities
purchased are amortized daily over the expected life of the security.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions paid
to shareholders are recorded on the ex-dividend date.
FORWARD CURRENCY CONTRACTS - The fund may enter into forward currency
contracts, which represent agreements to exchange currencies of different
countries at specified future dates at specified rates. The fund enters into
these contracts to manage 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 fund records realized gains or losses at the time the forward
contract is closed or offset by a matching contract. The face or contract
amount in U.S. dollars reflects the total exposure the fund has in that
particular contract. Risks 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. Purchases and sales of forward currency exchange
contracts having the same settlement date and broker are offset and presented
net in the statement of assets and liabilities.
COMMON EXPENSES - Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses are prorated between the classes based
on the relative net assets of each class. Distribution and transfer agent fees,
and any other class-specific expenses, if any, are calculated daily at the
class level based on the relative daily net assets of each class and the
specific expense rate applicable to each class.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - Investments in securities of non-U.S. issuers in certain
countries involve special investment risks. These risks may include, but are
not limited to, investment and repatriation restrictions, revaluation of
currencies, adverse political, social, and economic developments, government
involvement in the private sector, limited and less reliable investor
information, lack of liquidity, certain local tax law considerations, and
limited regulation of the securities markets.
TAXATION - Dividend and interest income is recorded net of non-U.S. taxes paid.
For the year ended March 31, 2000, such non-U.S. taxes were $55,193,000.
Net realized gain and net unrealized gain of the fund derived in certain
countries are subject to certain non-U.S. taxes. The fund provides for such
non-U.S. taxes on investment income, net realized gain and net unrealized gain.
CURRENCY GAINS AND LOSSES - Net realized currency losses on dividends,
interest, sales of non-U.S. bonds and notes, forward contracts, and other
receivables and payables, on a book basis, were $2,493,000 for the year ended
March 31, 2000.
3. FEDERAL INCOME TAXATION
The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income and net capital gains for the fiscal year. As a regulated
investment company, the fund is not subject to income taxes if such
distributions are made. Required distributions are determined on a tax basis
and may differ from net investment income and net realized gains for financial
reporting purposes. In addition, the fiscal year in which amounts are
distributed may differ from the year in which the net investment income and net
realized gains are recorded by the fund.
As of March 31, 2000, net unrealized appreciation on investments, excluding
forward currency contracts, for federal income tax purposes aggregated
$15,174,965,000; $16,066,110,000 related to appreciated securities and
$891,145,000 related to depreciated securities. During the year ended March
31, 2000, the fund realized, on a tax basis, a net capital gain of
$3,085,544,000 on securities transactions. Net losses related to non-U.S.
currency and other transactions of $1,490,000 were treated as an adjustment to
ordinary income for federal income tax purposes. The cost of portfolio
securities, excluding forward currency contracts, for federal income tax
purposes was $23,429,494,000 at March 31, 2000.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $131,596,000 for management services was
incurred 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 December 31,
1999, provided 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 billion; 0.53% of such assets in
excess of $1 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 billion; 0.47% of such assets in
excess of $4 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. The Board of Trustees approved an amended
agreement effective January 1, 2000, reducing the fees to 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 billion; 0.53% of such assets in
excess of $1 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 billion; 0.47% of such assets in
excess of $4 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; 0.44% of such assets in
excess of $17 billion but not exceeding $21 billion; 0.43% of such assets in
excess of $21 billion but not exceeding $27 billion; 0.425% of such assets in
excess of $27 billion but not exceeding $34 billion; 0.42% of such assets in
excess of $34 billion but not exceeding $44 billion; and 0.415% of such assets
in excess of $44 billion.
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution for Class A shares,
the fund may expend up to 0.25% of Class A average daily 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. Pursuant to a Plan of Distribution
for Class B shares, the fund may expend up to 1.00% of Class B average daily
net assets annually to compensate dealers for their selling and servicing
efforts. During the year ended March 31, 2000, distribution expenses under
the Plan of Distribution for Class A shares were limited to $71,410,000. Had
no limitation been in effect, the fund would have paid $85,656,000 for Class A
shares. During the year ended March 31, 2000, distribution expenses under the
Plan of Distribution for Class B shares were $8,000. As of March 31, 2000,
accrued and unpaid distribution expenses for Class A and Class B shares were
$7,502,000 and $8,000, respectively.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $11,090,000 (after allowances to dealers) as its
portion of the sales charges paid by purchasers of the fund's Class A shares.
Such sales charges are not an expense of the fund and, hence, are not reflected
in the accompanying statement of operations.
TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer agent
for the fund, was paid a fee of $20,324,000.
TRUSTEES' FEES - 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, 2000, aggregate deferred amounts and earnings thereon since the
deferred compensation plan's adoption (1993), net of any payments to Trustees,
were $1,165,000.
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.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $10,915,769,000 and $7,573,962,000 respectively,
during the year ended March 31, 2000.
As of March 31, 2000, net assets consist of the following:
<TABLE>
<CAPTION>
<S> <C>
Capital paid in on shares of $21,577,119,000
beneficial interest
Undistributed net investment income 61,015,000
Accumulated net realized gain 2,007,195,000
Net unrealized appreciation 15,221,869,000
Net Assets $38,867,198,000
</TABLE>
Capital share transactions in the fund were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Year ended Year ended
March 31, 2000 March 31, 1999
Amount Shares Amount Shares
Class A Shares:
Sold $ 10,677.481 279,693,484 $ 4,252.412 149,373,115
Reinvestment of
dividends and distributions 1,245.354 33,084,650 1,110.693 39,600,216
Repurchased (6,456.700) (173,087,213) (5,030.545) (179,052,856)
Net increase in Class A 5,466.135 139,690,921 332.560 9,920,475
Class B Shares: (1) - -
Sold 29.647 670,954 - -
Reinvestment of
dividends and distributions - -
Repurchased (0.031) (699) - -
Net increase in Class B 29.616 670,255 - -
Total net increase in fund $ 5,495.751 140,361,176 $ 332.560 9,920,475
(1) Class B shares offered
for sale commencing
March 15, 2000.
</TABLE>
The fund reclassified $1,488,000 from undistributed net investment income to
undistributed net realized gains; and reclassified $46,779,000 and $137,243,000
from undistributed net investment income and undistributed net realized gains,
respectively, to paid-in capital for the year ended March 31, 2000.
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 $10,942,000 includes $131,000 that was paid by these
credits rather than in cash.
At March 31, 2000, the fund had outstanding forward currency contracts to sell
non-U.S. currencies as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Non-U.S. Currency Contract Amounts U.S. Valuation at 3/31/00
Sale Contracts
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Non-U.S. U.S. Amount Unrealized Depreciation
Japanese Yen Y30,185,100,000 $300,000,000 $304,385,000 $(4,385,000)
expiring 10/18/00
</TABLE>
<TABLE>
PER-SHARE DATA AND RATIOS
<S> <C> <C> <C> <C> <C>
Net
gains on
Net securities
asset (both Total
value, Net realized from
Year beginning investment and investment
ended of year income unrealized) operations
Class A:
2000 $30.21 0.34 (3) 15.74 (3) 16.08
1999 29.56 .42 1.85 2.27
1998 26.70 .45 4.79 5.24
1997 24.28 .46 3.28 3.74
1996 20.89 .46 3.63 4.09
Class B(4):
2000 43.09 0.03 (3) 1.47 (3) 1.50
Dividends
(from net
realized Distri- Net
Dividends non- butions asset
(from net U.S. (from Total value,
investment currency capital Distri- end of
income) gains)(1) gains) butions year
Class A:
(.29) - (1.39) (1.68) $44.61
(.36) - (1.26) (1.62) 30.21
(.43) (.017) (1.93) (2.38) 29.56
(.41) (.03) (.88) (1.32) 26.70
(.49) - (.21) (0.70) 24.28
Class B(4):
- - - - 44.59
Ratio Ratio
Net of of
assets, expenses income
end of to to
Total year average average Portfolio
return (in net net turnover
(2) millions) assets assets rate
Class A:
54.31% $38,837 .84% 0.93 28.94%
8.18 22,083 .84 1.45 31.73
20.97 21,316 .86 1.64 30.51
15.88 16,737 .90 1.77 25.82
0.20 12,335 .01 0.02 0.2177
Class B(4):
3.48 (5) 30 .07(5) .06(5) 28.94(6)
(1) Realized non-U.S.
currency gains are
treated as ordinary
income for federal
income tax purposes.
(2) Excludes maximum
sales charge of 5.75%.
(3) Based on average
shares outstanding.
(4) Class B shares offered
for sale commencing
March 15, 2000.
(5) Based on operations
for the period shown
and, accordingly, not
representative of a
full year.
(6) Represents portfolio
turnover for the year
ended March 31, 2000.
</TABLE>
Report of Independent Accountants
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, 2000, 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 accounting principles generally accepted in the United States.
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 auditing standards generally accepted in the United States, which require
that we plan and perform the audits 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 owned at March 31, 2000 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Los Angeles, California
April 28, 2000
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 certain distributions received by
shareholders during such fiscal year.
During the fiscal year ended March 31, 2000, the fund paid a long-term capital
gains distribution of $1,078,276,000 to Class A shareholders. The fund also
designates as a capital gain distribution a portion of earnings and profits
paid to shareholders in redemption of their shares.
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, 2000 was $55,193,000.
Foreign source income earned by the fund for the fiscal year ended March 31,
2000 was $387,906,000. Shareholders are entitled to a foreign tax credit or an
itemized deduction, at their discretion. Generally, it is more advantageous to
claim a credit rather than to take a deduction.
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 retirement plan 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 WILL BE MAILED IN JANUARY 2001 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 2000 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.
Board of Trustees
Elisabeth Allison, Cambridge, Massachusetts
Administrative Director, ANZI, Ltd.
(financial publishing and consulting);
publishing consultant, Harvard Medical School
Mark E. Denning, London, England
President of the fund
Director, Capital Research and
Management Company;
Senior Vice President and Director,
Capital Research Company
Gina H. Despres, Washington, D.C.
Chairman of the Board of the fund
Senior Vice President,
Capital Research and Management Company
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)
Koichi Itoh, Tokyo, Japan
Group Vice President-Asia/Pacific, Autosplice, Inc.;
former 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 Company;
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, Huntingdon, 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
Thierry Vandeventer, Geneva, Switzerland
Vice Chairman of the Board of the fund
Director, Capital Research and
Management Company
Other Officers
Stephen E. Bepler, New York, New York
Executive Vice President of the fund
Senior Vice President, Capital Research Company
Robert W. Lovelace, Los Angeles, California
Senior Vice President of the fund
Executive Vice President and Director, Capital
Research Company; Vice President, Capital Research
and Management Company
Janet A. McKinley, New York, New York
Senior Vice President of the fund
Director, Capital Research and
Management Company; Senior Vice President,
Capital Research Company
Alwyn Heong, New York, New York
Vice President of the fund
Vice President, Capital Research Company
Hiromi Ishikawa, Tokyo, Japan
Vice President of the fund
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
R. Marcia Gould, Brea, California
Treasurer of the fund
Vice President - Fund Business
Management Group, Capital Research
and Management Company
Dayna Yamabe, Brea, California
Assistant Treasurer of the fund
Assistant Vice President - Fund Business
Management Group, Capital Research and
Management Company
Corporate Information
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 92821-5823
Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)
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
PricewaterhouseCoopers 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
[The American Funds Group(r)]
For information about your account or any of the fund's services, or for a
prospectus for any of the American Funds, 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. Please read
the prospectus carefully before you invest or send money.
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, 2000, this report must be accompanied by an American Funds Group
Statistical Update for the most recently completed calendar quarter.
Printed on recycled paper
Litho in USA BG/L/4581
Lit. No. EUPAC-011-0500
