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THE NEW ECONOMY FUND
Meeting of Shareholders
IMPORTANT NOTICE
A meeting of shareholders of The New Economy Fund will take place on September
12, 2000.
You don't need to attend the meeting to participate. But it's important that
you take a few minutes to read the enclosed material and vote your shares. You
can vote by the Internet, by telephone or by mailing your completed and signed
proxy card(s) in the enclosed postage-paid envelope. Unless you intend to
attend the meeting in person, you must respond in one of these ways in order
for your vote to be registered.
No matter how many shares you own, your vote is important. Your prompt
response will help reduce proxy costs - which are paid for by the fund and its
shareholders - and will also mean that you can avoid receiving follow-up
telephone calls or mailings. Voting by the Internet or telephone lowers proxy
costs even further.
We encourage you to read the attached Proxy Statement in full. Mutual funds
are required to obtain shareholders' votes for certain issues. As a
shareholder, you have a right to vote on these issues.
IMPORTANT VOTING INFORMATION INSIDE
THE NEW ECONOMY FUND
NOTICE OF MEETING OF SHAREHOLDERS
SEPTEMBER 12, 2000
TO THE SHAREHOLDERS OF
THE NEW ECONOMY FUND:
A Meeting of Shareholders of The New Economy Fund (the "Fund") will be held at
the office of the Fund, 333 South Hope Street, 55th Floor, Los Angeles,
California, on Tuesday, September 12, 2000 at 10:00 a.m., local time, to
consider and vote on the following matters described under the corresponding
numbers in the accompanying Proxy Statement:
(1) The election of a Board of 11 Trustees.
(2) A proposal to eliminate or revise certain of the Fund's investment
restrictions.
(3) Ratification of the selection of Deloitte & Touche LLP as independent
public accountant for the Fund for the fiscal year ending November 30, 2000.
The Board of Trustees has fixed the close of business on July 7, 2000 as the
record date for the determination of shareholders entitled to notice of and to
vote at the meeting.
THE PROPOSED BUSINESS CANNOT BE CONDUCTED AT THE MEETING UNLESS THE HOLDERS OF
A MAJORITY OF THE SHARES OF THE FUND OUTSTANDING ON THE RECORD DATE ARE PRESENT
IN PERSON OR BY PROXY. THEREFORE, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD, WHICH IS SOLICITED BY THE BOARD OF TRUSTEES. YOU MAY
REVOKE IT AT ANY TIME BEFORE ITS USE. YOUR SIGNING IT WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
By order of the Board of Trustees,
CHAD L. NORTON
SECRETARY
July 18, 2000
IMPORTANT
YOU CAN HELP THE FUND AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY CARD.
PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD SO THAT THE
NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE ENCLOSED ENVELOPE
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY ALSO VOTE BY
TELEPHONE OR THE INTERNET BY FOLLOWING INSTRUCTIONS THAT APPEAR ON THE ENCLOSED
INSERT.
THE NEW ECONOMY FUND
333 SOUTH HOPE STREET, LOS ANGELES, CALIFORNIA 90071
PROXY STATEMENT
MEETING OF SHAREHOLDERS
SEPTEMBER 12, 2000
The enclosed proxy is solicited by the Board of Trustees of the Fund in
connection with the meeting of shareholders to be held at the offices of the
Fund, 333 South Hope Street, 55th Floor, Los Angeles, California, on Tuesday,
September 12, 2000 at 10:00 a.m., local time.
If you complete and sign the enclosed proxy card, your shares will be voted
exactly as you instruct. If you simply sign the proxy card without otherwise
completing it, your shares will be voted for the proposals. You can revoke a
proxy card before its exercise, either by filing with the Fund a written
notification of revocation, or by delivering a duly executed proxy card bearing
a later date, or by attending the meeting and voting in person. Shareholders
who return proxy cards marked as abstaining from voting on one or more
proposals are treated as being present at the meeting for purposes of obtaining
the quorum necessary to hold the meeting, but are not counted as part of the
vote necessary to approve the proposal(s). If brokers holding shares for their
customers in so-called "Street Name" have not received instructions and are not
authorized to vote without instruction, those shares also will be treated as
abstentions. This Proxy Statement and proxy card was first mailed to
shareholders on or about July 18, 2000.
The Fund is a fully managed, diversified, open-end investment company that
issues two classes of shares of beneficial interest -- Class A and Class B. At
the close of business on July 7, 2000, the record date fixed by the Board of
Trustees for the determination of shareholders entitled to notice of and to
vote at the meeting, the following were the outstanding share balances for the
two classes of shares:
Class A shares; and Class B shares. Each
share is entitled to one vote. Class A and Class B shareholders will vote
together on all proposals. There is no provision for cumulative voting. No
person owned of record or was known by the Fund to own beneficially 5% or more
of the outstanding shares of the Fund.
With respect to the election of trustees (Proposal 1), the 11 nominees
receiving the highest number of votes will be elected. The vote required to
approve Proposal 2 is the affirmative vote of the lesser of (a) 67% or more of
all shares present in person or by proxy, if the holders of more than 50% of
all outstanding voting shares are present or represented by proxy, or (b) more
than 50% of all outstanding voting shares on the record date. The vote
required to approve Proposal 3 is the affirmative vote of a majority of all
shares present in person or represented by proxy.
If sufficient votes are not received by the meeting date, a person named as
proxy may propose one or more adjournments of the meeting for up to 120 days in
the aggregate to permit further solicitation of proxies. The persons named as
proxies may vote all proxies in favor of such adjournment.
PROPOSAL 1: ELECTION OF TRUSTEES
Eleven trustees are to be elected at the meeting, each to hold office until
the next meeting and until a successor is elected and qualified. Because
meetings of shareholders will not be held each year, the trustees' terms will
be indefinite in length. All of the nominees for trustee except Timothy D.
Armour, Joseph C. Berenato and Gordon Crawford were elected by shareholders at
their last meeting on April 5, 1995. Mr. Armour was elected by the Board of
Trustees in 1998, Mr. Berenato was elected by the Board of Trustees in 2000,
and Mr. Crawford was elected by the Board of Trustees in 1999.
Each of the nominees has agreed to serve as trustee if elected. If any
unforeseen event prevents one or more of the nominees from serving as trustee,
your votes will be cast (unless you have elected to withhold authority as to
the election of any nominee) for the election of such person or persons as the
Board of Trustees shall recommend. The table below sets forth certain
information regarding the nominees.
<TABLE>
<CAPTION>
MEMBERSHIPS SHARES
ON
CURRENT YEAR BOARDS BENEFICIALLY
PRINCIPAL OF OTHER
NAME OF NOMINEE OCCUPATION FIRST REGISTERED OWNED,
AND INVESTMENT DIRECTLY
(POSITION WITH FUND) PRINCIPAL ELECTED COMPANIES OR
EMPLOYMENT A AND INDIRECTLY,
PUBLICLY AT
AND AGE DURING TRUSTEE HELD JUNE 30,
PAST FIVE COMPANIES 2000+
YEARS
<S> <C> <C> <C> <C>
Mr. Timothy D. Armour* Chairman of the 1998
Board and Chief
Executive
(President and Trustee) Officer, Capital
Research Company
39
Mr. Joseph C. Berenato Chairman, 2000 The American
President and funds Group
Chief Executive
(Trustee) Officer, Ducommun (Director -
Incorporated 1 other fund)
Amb. Richard G. Capen, Jr. Corporate Director 1993 The American
and author; Funds Group
former U.S.
(Trustee) Ambassador to (Director/
Spain; former Trustee -
Vice 13 other
funds)
65 Chairman of the
Board, Knight
Ridder, Inc.;
former Chairman
and Publisher,
The
Miami Herald
Mr. H. Frederick Christie Private Investor; 1983 The American
former President Funds Group
and Chief
(Trustee) Executive (Director/
Officer, the Trustee -
Mission Group 17 other
(non- funds)
67 utility holding
company,
subsidiary of
Southern
California Edison
Company)
Mr. Gordon Crawford* Senior Vice 1999 The American
President and Funds Group
Director,
Capital
(Chairman of the Board Research and (Director -
Management 1 other fund)
Company
and Trustee)
53
Mr. Alan Greenway President, 1983 The American
Greenway Funds Group
Associates, Inc.
(Trustee) (management (Director/
consulting Trustee - 4
services) other
funds)
72
Mr. Graham Holloway* Retired; former 1995 The American
Chairman of the Funds Group
Board,
(Trustee) American Funds (Director -
Distributors, 1 other fund)
Inc.
70
Ms. Leonade D. Jones Chief Financial 1995 The American
Officer and Funds Group
Secretary,
(Trustee) VentureThink LLC; (Director -
former 5 other funds)
Treasurer,
52 The Washington
Post Company
Mr. William H. Kling President, 1987 The American
Minnesota Public Funds Group
Radio;
(Trustee) President, (Director/
Greenspring Trustee - 4
Company; former other
funds)
58 President, Cummins Engine
American Public Company, Inc.
Radio (now
Public Radio Irwin
International) Financial
Corporation
St. Paul
Companies
Dr. Norman R. Weldon Managing 1983 The American
Director, Funds Group
Partisan
Management
(Trustee) Group, Inc.; (Director -
former Chairman 1 other fund)
of
the Board,
65 Novoste Enable
Corporation Medical
Dr. Particia K. Woolf Private Investor; 1984 The American
lecturer, Funds Group
Department of
(Trustee) of Molecular (Director - 5
Biology, Princeton other funds)
65 University; General
Corporate Public
Director Utilities
Corporation
Crompton &
Knowles
Corporation
</TABLE>
_________________
* Is considered an "interested person" of the Fund within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), on the basis of
affiliation with Capital Research and Management Company (the "Investment
Adviser"). The Investment Adviser is a wholly owned subsidiary of The Capital
Group Companies, Inc.
+ Includes shares beneficially held under a master retirement plan.
Capital Research and Management Company, located at 333 South Hope Street, Los
Angeles, CA 90071 and at 135 South State College Boulevard, Brea, CA 92821,
serves as the investment adviser to The American Funds Group consisting of 29
funds: AMCAP Fund, American Balanced Fund, Inc., American High-Income Municipal
Bond Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The
Bond Fund of America, Inc., The Cash Management Trust of America, Capital
Income Builder, Inc., Capital World Growth and Income Fund, Inc., Capital World
Bond Fund, Inc., EuroPacific Growth Fund, Fundamental Investors, Inc., The
Growth Fund of America, Inc., The Income Fund of America, Inc., Intermediate
Bond Fund of America, The Investment Company of America, Limited Term
Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund,
Inc., New World Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund
of America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of
Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of
America, The U.S. Treasury Money Fund of America, U.S. Government Securities
Fund and Washington Mutual Investors Fund, Inc. Capital Research and
Management Company also manages American Variable Insurance Series and Anchor
Pathway Fund which serve as the underlying investment vehicle for certain
variable insurance contracts; and Endowments, whose shareholders are limited to
(i) any entity exempt from taxation under Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended ("501(c)(3) organization"); (ii) any trust,
the present or future beneficiary of which is a 501(c)(3) organization; and
(iii) any other entity formed for the primary purpose of benefitting a
501(c)(3) organization. An affiliate of Capital Research and Management
Company, Capital International, Inc., manages Emerging Markets Growth Fund,
Inc.
The Fund has an Audit Committee composed of Richard G. Capen, Jr., H.
Frederick Christie, Alan Greenway and Leonade D. Jones. The function of the
Committee includes such specific matters as recommending the independent
accountant to the Board of Trustees, reviewing the audit plan and results of
the audits and considering other matters deemed appropriate for consideration
by the Board of Trustees and/or the Committee.
The Fund has a Committee on Governance composed of all trustees who are not
considered to be "interested persons" of the Fund within the meaning of the
1940 Act. The Committee's functions include selecting and recommending to the
Board of Trustees nominees for election as trustees of the Fund. While the
Committee normally is able to identify from its own resources an ample number
of qualified candidates, it will consider shareholder suggestions of persons to
be considered as nominees to fill future vacancies on the Board. Such
suggestions must be sent in writing to the Committee on Governance of the Fund,
c/o the Fund's Secretary, and must be accompanied by complete biographical and
occupational data on the prospective nominee, along with a written consent of
the prospective nominee to consideration of his or her name by the Committee.
See also "Shareholder Proposals."
The Fund has a Contracts Committee composed of all trustees who are not
considered to be "interested persons" of the Fund within the meaning of the
1940 Act. The Contracts Committee's function is to request, review and
consider the information deemed necessary to evaluate the terms of the
investment advisory and service agreement, principal underwriting agreement and
the Plans of Distribution under rule 12b-1 that the Fund proposes to enter
into, renew or continue, and to make its recommendations to the full Board of
Trustees on these matters.
There were four Board of Trustees, four Audit Committee, two Committee on
Governance and one Contracts Committee meetings during the year ended November
30, 1999. All incumbent trustees attended 100% of all Board meetings and
meetings of the committees of which they were members.
The Fund pays no salaries or other compensation to its trustees other than
trustees' fees, which are paid to those trustees who are unaffiliated with the
Investment Adviser as described below.
TRUSTEE COMPENSATION
<TABLE>
<CAPTION>
TOTAL COMPENSATION
(INCLUDING VOLUNTARILY
DEFERRED COMPENSATION/1/
AGGREGATE FROM ALL TOTAL NUMBER
COMPENSATION FUNDS MANAGED
(INCLUDING BY CAPITAL OF
VOLUNTARILY RESEARCH AND FUND
DEFERRED MANAGEMENT BOARDS ON
COMPENSATION/1/) COMPANY
FROM THE FUND OR ITS WHICH TRUSTEE
DURING AFFILIATES/2/ FOR
TRUSTEE FISCAL YEAR THE 12 MONTHS SERVES/2/
ENDED 11/30/99 ENDED 11/30/99
<S> <C> <C> <C>
Mr. Timothy D. Armour $none/3/ $none/3/ 1
Mr. Joseph C. Berenato -0-/4/ -0-/4/ 2
Mr. Richard G. Capen 16,500 47,000 14
Mr. H. Frederick 16,000 204,000 18
Christie (deferred)/5/ (deferred)/5/
Mr. Gordon Crawford none/3/ none/3/ 2
Mr. Alan Greenway 16,500 102,500 5
Mr. Graham Holloway none/3/ none/3/ 2
Ms. Leonade D. Jones 16,500 136,500 6
(deferred)/5/ (deferred)/5/
Mr. William H. Kling 14,500 (deferred)/5/ 102,300(deferred)/5/ 6
Dr. Norman R. Weldon 14,500 42,300 3
Dr. Patricia K. Woolf 14,500 140,000 6
</TABLE>
/1/ Amounts may be deferred by eligible trustees under a non-qualified deferred
compensation plan adopted by the Fund in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more funds in The
American Funds Group as designated by the trustee.
/2/ Includes funds managed by Capital Research and Management Company and
affiliates.
/3/ Timothy D. Armour, Gordon Crawford and Graham Holloway are affiliated with
the Fund's Investment Adviser and, therefore, receive no remuneration from the
Fund.
/4/ Joseph C. Berenato was elected a Trustee effective June 22, 2000 and,
accordingly, received no remuneration from the fund as of the fiscal year ended
November 30, 1999.
/5/ Since the deferred compensation plan's adoption in 1993, the total amount
of deferred compensation accrued by the Fund (plus earnings thereon) as of the
fiscal year ended November 30, 1999 for participating trustees is as follows:
H. Frederick Christie ($64,737), Leonade D. Jones ($82,967) and William H.
Kling ($92,199). Amounts deferred and accumulated earnings thereon are not
funded and are general unsecured liabilities of the Fund until paid to the
trustee.
OTHER OFFICERS
<TABLE>
<CAPTION>
NAME OFFICER
(POSITION WITH FUND) CONTINUOUSLY
AND AGE PRINCIPAL OCCUPATION /1/ SINCE /2/
<S> <C> <C>
Ms. Claudia P. Huntington Senior Vice President, 1996
(Senior Vice President) Capital Research Company
48
Mr. Vincent P. Corti Vice President - Fund Business 1984
Management Group,
(Vice President) Capital Research and Management
Company
44
Alwyn Heong Vice President, Capital Research 2000
Company
(Vice President)
40
Mr. Ulrich A. Volk Vice President, Capital Research 1998
Company
(Vice President)
38
Mr. Chad L. Norton Vice President - Fund Business 1991
Management Group,
(Secretary) Capital Research and Management
Company
39
Mr. David A. Pritchett Vice President - Fund Business 1999
Management Group,
(Treasurer) Capital Research and Management
Company
33
Ms. Sheryl F. Johnson Vice President - Fund Business 1998
Management Group,
(Assistant Treasurer) Capital Research and Management
Company
31
</TABLE>
_____________
/1/ The occupations shown reflect the principal employment of each individual
during the past five years. Corporate positions, in some instances, may have
changed during this period.
/2/ Officers hold office until their respective successors are elected, or
until they resign or are removed.
No officer, director or employee of the Investment Adviser receives any
remuneration from the Fund. All trustees and officers as a group owned
beneficially fewer than 1% of the Fund's shares outstanding on June 30, 2000.
PROPOSAL 2: APPROVAL OF THE ELIMINATION OR REVISION OF CERTAIN OF THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES
INTRODUCTION AND SUMMARY
The Fund is subject to investment restrictions which establish percentage and
other limits that govern its investment activities. Under the Investment
Company Act of 1940 (the "1940 Act"), investment restrictions relating to
certain activities are required to be "fundamental," which means that any
changes require shareholder approval. Investment companies are permitted to
designate additional restrictions as fundamental. They may also adopt
"non-fundamental" investment restrictions, which may be changed by the Fund's
Board of Trustees without shareholder approval.
Some of the Fund's existing fundamental investment restrictions reflect
regulatory, business or industry conditions, practices or requirements that
have changed or no longer exist. With the passage of time, the development of
new practices, and changes in regulatory standards, the Investment Adviser
believes certain fundamental restrictions should be revised, eliminated or
reclassified as non-fundamental.
The Board of Trustees, together with the Fund's senior officers, have analyzed
the current fundamental investment restrictions for the Fund, and have
concluded that certain other restrictions should be eliminated. The specific
proposals are discussed below.
The proposed investment restrictions have been drafted to maintain important
investor protections while providing flexibility to respond to future legal,
regulatory and market changes. By reducing the number of policies that can be
changed only by shareholder vote, the Board of Trustees will have greater
flexibility to modify Fund policies, as appropriate, in response to changing
markets and in light of new investment opportunities and instruments. The Fund
will then be able to avoid the costs and delays associated with a shareholder
meeting when making changes to the non-fundamental investment policies that the
Board may consider desirable.
IMPORTANTLY, THE PROPOSED AMENDMENTS DO NOT AFFECT THE INVESTMENT OBJECTIVE OF
THE FUND, WHICH REMAINS UNCHANGED. MOREOVER, THE BOARD DOES NOT ANTICIPATE
THAT THE CHANGES, INDIVIDUALLY OR IN THE AGGREGATE, WILL CHANGE TO A MATERIAL
DEGREE THE LEVEL OF INVESTMENT RISK ASSOCIATED WITH AN INVESTMENT IN THE FUND.
The texts of the proposed changes to the Fund's fundamental restrictions are
set forth below. Shareholders owning either Class A shares or Class B shares
of the Fund may vote for or against any or all of the changes that are the
subject of Proposal 2. If the proposed changes are approved by the Fund's
shareholders, the Fund's prospectus and statement of additional information
will be revised accordingly.
RESTRICTION PROPOSED TO BE REVISED BUT REMAIN FUNDAMENTAL
2A. LENDING ACTIVITIES
Under the 1940 Act, the Fund is required to have a fundamental restriction
addressing its lending activities. These activities are also subject to
certain restrictions. Under the 1940 Act, loans of securities and other assets
are generally permitted up to 33-1/3% of a fund's total assets. The Fund's
current fundamental policy states that the Fund may not lend any of its assets,
except that it may invest in certain debt securities and enter into repurchase
agreements.
Under the revised fundamental policy, the Fund would be permitted to lend
securities or make loans up to 15% of total assets. However, a non-fundamental
policy would be adopted stating that the Fund had no current intention to lend
portfolio securities. As such, the Fund would have the flexibility to invest,
consistent with its investment objective, in loans, loan participations, and
other forms of direct debt instruments. Direct debt instruments are interests
in amounts owed to lenders or lending syndicates or other parties. As the
beneficial owner of a direct debt instrument, the Fund would be entitled to
receive payments of principal, interest and any fees to which it is entitled.
If the Fund acquires an indirect interest in a loan (E.G., a loan
participation), the Fund would be entitled to receive these payments only from
the lender selling the participation. The Fund generally would have no right
to enforce compliance by the borrower with the terms of the loan agreement
relating to the loan. The Fund would be subject to the credit risk of both the
borrower and the lender selling the participation.
CURRENT TEXT (FUNDAMENTAL)
[The Fund may not$] lend any of its assets; provided, however that investment
in governmental obligations, short-term commercial paper, certificates of
deposit and banker's acceptances and publicly traded bonds, debentures, or
other debt securities or entering into repurchase agreements, shall not be
prohibited by this restriction.
PROPOSED TEXT (FUNDAMENTAL)
[The Fund may not$] lend any security or make any other loan if, as a result,
more than 15% of its total assets would be lent to third parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
PROPOSED TEXT (NON-FUNDAMENTAL)
The Fund does not currently intend to lend portfolio securities.
RESTRICTIONS PROPOSED TO BE REVISED AND RECLASSIFIED AS NON-FUNDAMENTAL
2B. PURCHASING SECURITIES OF OTHER INVESTMENT COMPANIES
This restriction deals with certain anti-pyramiding concerns addressed by the
1940 Act. The proposed revisions would allow the Fund to invest to a limited
degree in entities falling within the technical definition of an investment
company. On occasion, certain issuers in various lines of business, primarily
financial, fall within this definition but otherwise represent attractive
investment opportunities, consistent with the Fund's investment objective.
Current industry practice is to rely on the 1940 Act for investor protection.
CURRENT TEXT (FUNDAMENTAL)
[The Fund may not$] purchase securities of other investment companies, except
in connection with a merger, consolidation, acquisition or reorganization, or
by purchase in the open market of securities of closed-end investment companies
where no underwriter or dealer's commission or profit, other than customary
broker's commissions, is involved, and only if immediately thereafter no more
than 10% of the value of the Fund's total assets would be invested in such
securities.
PROPOSED TEXT (NON-FUNDAMENTAL)
[The Fund may not$] invest in securities of other investment companies, except
as permitted by the Investment Company Act of 1940, as amended.
2C. ILLIQUID/RESTRICTED SECURITIES
The Fund has a fundamental policy prohibiting the acquisition of illiquid
securities (including repurchase agreements maturing in more than seven days)
in excess of 10% of total assets. These policies are not required to be
fundamental under the 1940 Act.
Historically, there has been a concern that "restricted securities" (I.E.,
securities with legal or contractual limitations on transfer, which typically
cannot be resold to the public), may be difficult for a mutual fund to sell at
approximately the value at which the Fund is carrying the investment.
Restricted securities may or may not be illiquid, however. Some restricted
securities are actively traded among institutional investors and thus highly
liquid in the marketplace.
Under the proposal, investors would continue to be protected by a
non-fundamental investment restriction covering illiquid securities. The
proposed increase in the limit on these investments, from 10% of total assets
to 15% of net assets, is consistent with current regulatory standards
applicable to all non-money market mutual funds.
CURRENT TEXT (FUNDAMENTAL)
[The Fund may not$] invest more than 10% of the value of its total assets in
securities which are not readily marketable or engage in the business of
underwriting securities of other issuers, except to the extent that the
disposal of an investment position may technically constitute the Fund an
underwriter as that term is defined under the Securities Act of 1933.
PROPOSED TEXT (NON-FUNDAMENTAL)
[The Fund may not$] invest more than 15% of the value of its net assets in
illiquid securities.
RESTRICTIONS PROPOSED TO BE ELIMINATED
The following investment restrictions are not required under the 1940 Act.
They were originally adopted in response to state law restrictions or
interpretations that no longer apply to the Fund. Therefore, in order to
increase the ability of management to manage the Fund's assets effectively and
efficiently in response to market and regulatory changes, it is proposed that
these investment restrictions, which are currently listed as fundamental, be
eliminated.
2D. PLEDGING ASSETS
In certain circumstances these restrictions could interfere with the Fund's
ability to borrow temporarily for extraordinary or emergency purposes. The
Fund's current borrowing limits would remain unchanged.
CURRENT TEXT (FUNDAMENTAL)
[The Fund may not$] mortgage, pledge, or hypothecate its assets to any extent.
2E. AFFILIATED OWNERSHIP
The purposes intended to be served by this restriction are covered by the
Fund's Code of Ethics and separate provisions of the 1940 Act.
CURRENT TEXT (FUNDAMENTAL)
[The Fund may not$] purchase or retain the securities of any issuer, if those
individual officers and trustees of the fund, its investment adviser or
distributor, each owning beneficially more than 1/2 of 1% of the securities of
such issuer, together own more than 5% of the securities of such issuer.
2F. UNSEASONED ISSUERS
This restriction was adopted in response to state regulation that no longer
applies. Because newly formed companies have no proven track record in
business, their prospects may be uncertain. Their securities may fluctuate in
price more widely than securities of established companies. Elimination of
this restriction will provide the Fund with greater investment flexibility,
subject to its investment objective and policies. Retaining such a restriction
could, among other things, preclude the Fund from making otherwise attractive
investments.
CURRENT TEXT (FUNDAMENTAL)
[The Fund may not$] invest more than 5% of the value of its total assets in
securities of companies having, together with their predecessors, a record of
less than three years of continuous operation.
2G. OIL, GAS OR MINERAL EXPLORATION
At one time, certain state regulators felt it appropriate to limit investments
in oil and gas partnerships as a means to protect investors from speculative
investments and to reduce overall portfolio risk. Industry practice has been
to manage these risks through prudent investment practices and explicit
diversification and concentration policies.
CURRENT TEXT (FUNDAMENTAL)
[The Fund may not$] purchase partnership interests in oil, gas or mineral
exploration, drilling or mining ventures.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THESE PROPOSED
CHANGES TO THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTIONS.
PROPOSAL 3. RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS
INDEPENDENT PUBLIC ACCOUNTANT FOR THE FISCAL YEAR ENDING NOVEMBER 30, 2000
Shareholders are requested to ratify the selection by the Board of Trustees
(including a majority of trustees who are not "interested persons" of the Fund
as that term is defined in the 1940 Act) of Deloitte & Touche LLP to act as
independent public accountant for the Fund for the fiscal year ending November
30, 2000. Deloitte & Touche LLP has served as the Fund's independent public
accountant since the Fund's inception. No representative of the firm of
Deloitte & Touche LLP is expected to attend the meeting of shareholders.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF
ITS SELECTION OF DELOITTE & TOUCHE LLP.
OTHER MATTERS
Neither the persons named in the enclosed proxy nor the Board of Trustees are
aware of any matters that will be presented for action at the meeting other
than matters described above. If any other matters properly requiring a vote
of shareholders arise, the proxies will confer upon the person or persons
entitled to vote the shares in respect of any such matters in accordance with
their best judgment in the interests of the Fund and its shareholders.
SHAREHOLDER PROPOSALS
Any shareholder proposals for inclusion in proxy solicitation material for a
shareholders meeting should be submitted to the Secretary of the Fund, at the
Fund's principal executive offices, 333 South Hope Street, Los Angeles, CA
90071. Any such proposals must comply with the requirements of rule 14a-8
under the Securities Exchange Act of 1934.
Under the laws of Massachusetts, where the Fund is organized, and the Fund's
Declaration of Trust and By-Laws, the Fund is not required to hold regular
meetings of shareholders. Under the 1940 Act, a vote of shareholders is
required from time to time for particular matters but not necessarily on an
annual basis. As a result, the Fund does not expect to hold shareholders
meetings on a regular basis, and any shareholder proposal received may not be
considered until such a meeting is held.
GENERAL INFORMATION
Capital Research and Management Company is the investment adviser to the Fund
and is located at 333 South Hope Street, Los Angeles, CA 90071 and 135 South
State College Boulevard, Brea, CA 92821. American Funds Distributors, Inc. is
the principal underwriter of the Fund's shares and is located at the Los
Angeles and Brea addresses above and also at 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240,
and 5300 Robin Hood Road, Norfolk, VA 23513.
The enclosed proxy is solicited by and on behalf of the Board of Trustees of
the Fund. The Fund will pay the cost of soliciting proxies, consisting of
printing, handling and mailing of the proxies and related materials. In
addition to solicitation by mail, certain officers and trustees of the Fund,
who will receive no extra compensation for their services, may solicit by
telephone, telegram or personally. WE URGE ALL SHAREHOLDERS TO MARK, SIGN,
DATE, AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY ALSO VOTE YOUR PROXY BY
TELEPHONE OR THE INTERNET BY FOLLOWING INSTRUCTIONS THAT APPEAR ON THE ENCLOSED
PROXY INSERT.
You may obtain a copy of the Fund's most recent annual report, without charge,
by writing to the Secretary of the Fund at 333 South Hope Street, 55th Floor,
Los Angeles, CA 90071, or by telephoning 800/421-0180. These requests will be
honored within three business days of receipt.
By Order of the Board of Trustees,
CHAD L. NORTON
Secretary
July 18, 2000
PROXY CARD THE NEW ECONOMY FUND PROXY CARD
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
FOR THE MEETING OF SHAREHOLDERS TO BE HELD SEPTEMBER 12, 2000
The undersigned hereby appoints Vincent P. Corti, Gordon Crawford and Chad L.
Norton, and each of them, his/her true and lawful agents and proxies with full
power of substitution to represent the undersigned at the Meeting of
Shareholders to be held at the Office of Capital Research and Management
Company, 333 South Hope Street, 55th Floor, Los Angeles, California, on
Tuesday, September 12, 2000 at 10:00 a.m., on all matters coming before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER YOU DIRECTED. IF
NO DIRECTION IS GIVEN, WITH RESPECT TO ANY PARTICULAR ITEM, THIS PROXY WILL BE
VOTED FOR THE NOMINEES IN ITEM 1 AND FOR ITEMS 2 AND 3.
VOTE VIA THE INTERNET: HTTP://VOTE.PROXY-DIRECT.COM CONTROL NUMBER: 999 9999
9999 999
VOTE VIA TELEPHONE: 1-800-597-7836
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. JOINT OWNERS
SHOULD EACH SIGN INDIVIDUALLY. CORPORATE PROXIES SHOULD BE SIGNED IN FULL
CORPORATE NAME BY AN AUTHORIZED OFFICER. FIDUCIARIES SHOULD GIVE FULL TITLES.
Signature
Signature of joint owner, if any
Date
IMPORTANT
SHAREHOLDERS CAN HELP THE FUND AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS BY PROMPTLY SIGNING AND RETURNING THIS PROXY.
THE NEW ECONOMY FUND
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: []
1. ELECTION OF TRUSTEES:
<TABLE>
<CAPTION>
FOR WITHHOLD FOR
ALL ALL ALL
EXCEPT
<S> <C> <C> <C> <C> <C> <C>
01 Timothy D. Armour 07 E. Graham Holloway [] [] []
02 Joseph C. Berenato 08 Leonade D. Jones
03 Richard G. Capen 09 William H. Kling
04 H. Frederick Christie 10 Norman R. Weldon
05 Gordon Crawford 11 Patricia K. Woolf
06 Alan Greenway
</TABLE>
To withhold your vote for any individual nominee, mark the "For All Except"
box and write the nominee's number on the line provided below.
_____________________________________________________________________
2. APPROVAL OF THE PROPOSED CHANGES TO THE FUND'S INVESTMENT RESTRICTIONS:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
2A. Revision of restriction regarding lending activities [] [] []
2B. Revision of restriction regarding purchasing [] [] []
securities of
other investment companies
2C. Revision of restriction regarding illiquid securities [] [] []
2D. Elimination of restriction regarding pledging assets [] [] []
2E. Elimination of restriction regarding affiliated [] [] []
ownership
2F. Elimination of restriction regarding unseasoned issuers [] [] []
2G. Elimination of restriction regarding oil, gas or [] [] []
mineral exploration
</TABLE>
3. RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
ACCOUNTANT:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
In their discretion, upon other matters as may properly [] [] []
come before the meeting.
</TABLE>
