THE FUND PROVIDES SPANISH TRANSLATIONS IN CONNECTION WITH THE PUBLIC OFFERING
AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR AND ACCURATE ENGLISH
TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS FOR THE FUND.
/s/ Julie F. Williams
Julie F. Williams
Secretary
<PAGE>
[LOGO OF THE AMERICAN FUNDS GROUP(R)]
- --------------------------------------------------------------------------------
Capital World
Bond Fund(R)
Prospectus
DECEMBER 1, 1998
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CAPITAL WORLD BOND FUND, INC.
333 South Hope Street
Los Angeles, California 90071
TICKER SYMBOL: CWBFX NEWSPAPER ABBREV.: Cap W FUND NO.: 31
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk/Return Summary 2
.............................................................................
Fees and Expenses of the Fund 5
.............................................................................
Investment Objective, Strategies and Risks 6
.............................................................................
Important Recent Developments 9
.............................................................................
Management and Organization 9
.............................................................................
Shareholder Information 12
.............................................................................
Purchase and Exchange of Shares 13
.............................................................................
Distribution Arrangements 16
.............................................................................
Financial Highlights 18
</TABLE>
- --------------------------------------------------------------------------------
31-010-1298/RRD CAPITAL WORLD BOND FUND / PROSPECTUS 1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY
The fund seeks to provide you, over the long term, a high level of total return
as is consistent with prudent management, by investing primarily in investment
grade bonds denominated in U.S. dollars or other currencies. Bonds held in the
fund's portfolio may provide total return through interest income, changes in
the market value of the fund's investment and changes in the value of other
currencies against the U.S. dollar.
The fund is designed for investors seeking returns through a portfolio of bonds
of issuers based around the world. An investment in the fund is subject to
risks, including the possibility that the fund may decline in value in response
to certain events, such as changes in the market or general economy. The values
of debt securities held by the fund may be affected by changing interest rates
and credit ratings. Investing outside the U.S. can involve additional risks,
such as currency fluctuations or political, social and economic instability. In
addition, the fund is non-diversified, which allows it to invest a greater per-
centage of its assets in any one issuer. However, the fund intends to limit its
investments in the securities of any single issuer.
You may lose money by investing in the fund. The likelihood of loss is greater
if you invest for a shorter period of time.
Your investment in the fund is not a bank deposit and is not insured or guaran-
teed by the Federal Deposit Insurance Corporation or any other government agen-
cy, entity or person.
2 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
The following information illustrates how the fund's results may vary:
Here are the fund's results calculated without a sales charge on a calendar
year basis. (If a sales charge were included, results would be lower.)
[begin bar chart]
<TABLE>
<CAPTION>
<S> <C>
1988 2.72
1989 4.57
1990 11.65
1991 15.28
1992 0.82
1993 16.73
1994 - 1.43
1995 21.41
1996 6.34
1997 - 0.36
</TABLE>
[end bar chart]
The fund's year-to-date return for the nine months ended September 30, 1998
was 7.57%.
The fund's highest/lowest quarterly results during this time period were:
[X] HIGHEST 7.43% (quarter ended March 31, 1995)
[X] LOWEST -3.55% (quarter ended June 30, 1988)
CAPITAL WORLD BOND FUND / PROSPECTUS 3
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For periods ended December 31, 1997:
<TABLE>
<CAPTION>
AVERAGE THE FUND WITH
ANNUAL MAXIMUM SALOMON
TOTAL SALES CHARGE SMITH BARNEY
RETURN DEDUCTED /1/ INDEX/2/
- -----------------------------------------------------------------------------
<S> <C> <C>
One Year -5.12% 0.23%
.............................................................................
Five Years 7.11% 7.46%
.............................................................................
Ten Years 6.99% 7.88%
.............................................................................
Lifetime/3/ 8.05% 8.89%
</TABLE>
Yield/1/: 4.83%
(For current yield information, please call American FundsLine(R) at 1-800-325-
3590)
/1/ These fund results were calculated according to a formula which requires
that the maximum sales charge of 4.75% be deducted. Results would be higher
if they were calculated at net asset value.
/2/ The Salomon Smith Barney World Government Bond Index includes the 18
government bond markets of Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Portugal,
Spain, Sweden, Switzerland, the United Kingdom and the United States and
includes eligible markets which must total at least US $20 billion, DM 30
billion and 2.5 trillion yen for 3 consecutive months. This index is
unmanaged and does not reflect sales charges, commissions or expenses.
/3/ The fund began investment operations on August 4, 1987.
These results illustrate the potential fluctuations in the fund's results over
shorter periods of time. Past results are not an indication of future results.
4 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
The following describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
SHAREHOLDERS FEES
(fees paid directly from your investment)
<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
Maximum sales charge imposed on purchases
(as a percentage of offering price) 4.75%/1/
...............................................................................
Maximum sales charge imposed on reinvested dividends 0%
...............................................................................
Maximum deferred sales charge 0%/2/
...............................................................................
Redemption or exchange fees 0%
</TABLE>
/1/ Sales charges are reduced or eliminated for larger purchases.
/2/ A contingent deferred sales charge of 1% applies on certain redemptions made
within 12 months following any purchases you made without a sales charge.
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
Management Fees 0.67%
...............................................................................
Service (12b-1) Fees 0.24%*
...............................................................................
Other Expenses 0.15%
...............................................................................
Total Annual Fund Operating Expenses 1.06%
</TABLE>
*12b-1 expenses may not exceed 0.30% of the fund's average net assets annually.
EXAMPLE
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
One year $ 578
...............................................................................
Three years $ 796
...............................................................................
Five years $1,032
...............................................................................
Ten years $1,708
</TABLE>
CAPITAL WORLD BOND FUND / PROSPECTUS 5
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to provide you, over the long term, with a
high level of total return consistent with prudent investment management. The
fund invests primarily in debt securities denominated in various currencies,
including U.S. dollars. Normally, the fund's debt obligations will consist of
investment grade bonds (rated Baa or BBB or better by Moody's Investors Serv-
ice, Inc. or Standard & Poor's Corporation).
In seeking to achieve its investment objective, the fund may engage in active
and frequent trading of portfolio securities. High portfolio turnover typically
involves greater transaction costs and may result in net capital gains which
are taxable when distributed to shareholders.
The values of debt securities held by the fund may be affected by changing in-
terest rates, effective maturities and credit ratings. For example, the values
of bonds in the fund's portfolio generally will decline when interest rates
rise and vice versa. These fluctuations will be greater for longer maturity se-
curities. In addition, the values of non-U.S. securities can decline in re-
sponse to various factors, including currency fluctuations, political, social
and economic instability, differing securities regulations, and administrative
difficulties such as delays in clearing and settling portfolio transactions.
The fund may also hold a substantial portion of its portfolio in cash or cash
equivalents, for example, in response to abnormal market conditions. The extent
of the fund's cash position will be dependent on market conditions, fund pur-
chases, and redemptions, and other factors. This may detract from the achieve-
ment of the fund's objective over the short term, or may protect the fund dur-
ing a market downturn.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic investment philosophy of Capital Research and Management
Company is to seek undervalued securities that represent good long-term
investment opportunities.
6 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ADDITIONAL INVESTMENT RESULTS
The following additional investment results are for periods ended December 31,
1997:
<TABLE>
<CAPTION>
AVERAGE THE FUND
TOTAL WITH NO
RETURN SALES CHARGE/1/ CPI/2/
- -------------------------------------------------------------------------------
<S> <C> <C>
One Year - 0.36% 1.70%
...............................................................................
Five Years 8.16% 2.60%
...............................................................................
Ten Years 7.51% 3.41%
...............................................................................
Lifetime/3/ 8.56% 3.41%
</TABLE>
/1/ These fund results were calculated according to a standard formula that is
required for all stock and bond funds.
/2/ The Consumer Price Index is a measure of inflation and is computed from data
supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
/3/ The fund began investment operations on August 4, 1987.
CAPITAL WORLD BOND FUND / PROSPECTUS 7
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE FOLLOWING CHART ILLUSTRATES THE PORTFOLIO COMPOSITION
OF THE FUND AS OF THE END OF ITS FISCAL YEAR,
SEPTEMBER 30, 1998.
<TABLE>
<S> <C>
[PIE CHART APPEARS HERE]
.................................................................
NON-U.S. BONDS 58.8%
.................................................................
U.S. BONDS 36.3%
.................................................................
CASH 4.9%
.................................................................
[MAP OF THE WORLD APPEARS HERE]
UNITED STATES 36.3%
.................................................................
EUROPE 43.8%
.................................................................
ASIA/PACIFIC RIM 11.0%
.................................................................
OTHER 4.0%
Figures shown represent percentages of fund asets.
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
BOND HOLDINGS BY QUALITY PERCENT OF
CATEGORY NET ASSETS
- -------------------------------------------------------------------------------
<S> <C>
U.S. Treasury and Agency 20.9%
...............................................................................
AAA 36.4%
...............................................................................
AA 9.1%
...............................................................................
A 15.6%
...............................................................................
BBB 11.3%
...............................................................................
BB 1.6%*
...............................................................................
B 0.2%*
...............................................................................
</TABLE>
* Represents bonds whose quality ratings were downgraded. The fund may hold a
limited portion of its assets in downgraded bonds.
Because the fund is actively managed, its holdings will change from time to
time.
8 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IMPORTANT RECENT DEVELOPMENTS
YEAR 2000
The date-related computer issue known as the "Year 2000 problem" could have an
adverse impact on the quality of services provided to the fund and its share-
holders. However, the fund understands that its key service providers -- in-
cluding the investment adviser and its affiliates -- are taking steps to ad-
dress the issue. In addition, the Year 2000 problem may adversely affect the
issuers in which the fund invests. For example, issuers may incur substantial
costs to address the problem. They may also suffer losses caused by corporate
and governmental data processing errors. The fund and its investment adviser
will continue to monitor developments relating to this issue.
EURO INTRODUCTION
On January 1, 1999, the European Union will introduce a single European
currency, the Euro. The first group of countries that will begin to convert
their currencies to the Euro include Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The
expected introduction of the Euro presents unique uncertainties, including:
whether the payment and operational systems of banks and other financial
institutions will be ready by the scheduled launch date; the legal treatment of
certain outstanding financial contracts after January 1, 1999 that refer to
existing currencies rather than the Euro; and the creation of suitable clearing
and settlement payment systems for the new currency. These or other factors,
including political and economic risks, could cause market disruptions before
or after the introduction of the Euro. The fund understands that the investment
adviser and other key service providers are taking steps to address Euro-
related issues.
CAPITAL WORLD BOND FUND / PROSPECTUS 9
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MANAGEMENT AND ORGANIZATION
INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and
other funds, including those in The American Funds Group. Capital Research and
Management Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
Research and Management Company manages the investment portfolio and business
affairs of the fund. The total management fee paid by the fund, as a percentage
of average net assets, for the previous fiscal year is indicated earlier under
"Fees and Expenses of the Fund."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company Insti-
tute's Advisory Group on Personal Investing. This policy has also been incorpo-
rated into the fund's code of ethics.
MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this system the portfolio of a
fund is divided into segments which are managed by individual counselors. Coun-
selors decide how their respective segments will be invested (within the limits
provided by a fund's objective(s) and policies and by Capital Research and Man-
agement Company's investment committee). In addition, Capital Research and Man-
agement Company's research professionals may make investment decisions with re-
spect to a portion of a fund's portfolio. The primary individual portfolio
counselors for Capital World Bond Fund are listed on the following page.
10 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
APPROXIMATE
YEARS OF EXPERIENCE AS AN
INVESTMENT PROFESSIONAL
(INCLUDING
THE LAST FIVE
YEARS)
..........................
YEARS OF
EXPERIENCE AS
PORTFOLIO PORTFOLIO WITH CAPITAL
COUNSELORS COUNSELOR FOR RESEARCH AND
FOR CAPITAL WORLD BOND MANAGEMENT
CAPITAL WORLD FUND COMPANY OR
BOND FUND PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES TOTAL YEARS
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MARK H. Vice President of 7 years 10 years 20 years
DALZELL the fund. Vice
President --
Investment
Management Group,
Capital Research
and Management
Company
-------------------------------------------------------------------------------
MARK A. BRETT Vice President -- Less than 1 year 4 years 12 years
Capital (plus 2 years as
International research
Limited* professional for
the fund prior to
becoming a
portfolio
counselor for the
fund)
-------------------------------------------------------------------------------
LAURENTIUS Vice President, 4 years 4 years 9 years
HARRER Capital Research
International*
-------------------------------------------------------------------------------
THOMAS H. Vice President, 2 years (plus 8 years 11 years
HOGH Capital Research 2 years as
International* research
professional for
the fund prior to
becoming a
portfolio
counselor for
the fund)
-------------------------------------------------------------------------------
JAMES R. Vice President, 11 years (since 18 years 22 years
MULALLY Capital Research the fund began
Company* operations)
-------------------------------------------------------------------------------
</TABLE>
The fund began operations on August 4, 1987.
* Company affiliated with Capital Research and Management Company.
CAPITAL WORLD BOND FUND / PROSPECTUS 11
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHAREHOLDER INFORMATION
SHAREHOLDER SERVICES
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your
needs and circumstances change. These services are available only in states
where they may be legally offered and may be terminated or modified at any time
upon 60 days written notice. For your convenience, American Funds Service
Company has four service centers across the country.
AMERICAN FUNDS COMPANY SERVICE AREAS
[MAP OF AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS]
<TABLE>
<S> <C> <C> <C>
WESTERN SERVICE WESTERN CENTRAL EASTERN CENTRAL EASTERN SERVICE
CENTER SERVICE CENTER SERVICE CENTER CENTER
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Norfolk, Virginia
92822-2205 78265-9522 Indiana 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 46206-6007 Fax: 757/670-4773
Fax: 317/735-6620
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS DESCRIBED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION. In addition, an easy-to-read guide to
owning a fund in The American Funds Group titled "Welcome to the Family" is
sent to new shareholders and is available by writing or calling American Funds
Service Company.
You may invest in the fund through various retirement plans. However, some re-
tirement plans or accounts held by investment dealers may not offer certain
services. If you have any questions, please contact your plan
administrator/trustee or dealer.
12 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer autho-
rized to sell the fund's shares. You may purchase additional shares using vari-
ous options described in the statement of additional information and "Welcome
to the Family."
EXCHANGE
You may exchange your shares into other funds in The American Funds Group gen-
erally without a sales charge. Exchanges of shares from the money market funds
initially purchased without a sales charge generally will be subject to the ap-
propriate sales charge. Exchanges have the same tax consequences as ordinary
sales and purchases. See "Transactions by Telephone..." for information regard-
ing electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER, RE-
SERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE IS
CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A PERIOD
OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT
ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY INVESTOR
WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES ACTUAL OR PO-
TENTIAL HARM TO THE FUND.
INVESTMENT MINIMUMS
<TABLE>
- ----------------------------------------------------------------
<S> <C>
To establish an account $1,000
For a retirement plan account $ 250
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account through payroll deduction $ 25
</TABLE>
SHARE PRICE
The fund determines its share price, also called net asset value, as of 4:00
p.m. New York time, which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value, mar-
ket prices are used when available. If a market price for a particular security
is not available, the fund will determine the appropriate price for the securi-
ty.
Your shares will be purchased at the offering price, or sold at the net asset
value, next determined after American Funds Service Company receives and ac-
cepts your request. The offering price is the net asset value plus a sales
charge, if applicable.
CAPITAL WORLD BOND FUND / PROSPECTUS 13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SALES CHARGE
A sales charge may apply to your purchase. Your sales charge may be reduced for
larger purchases as indicated below.
<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE OF
...............................
NET DEALER CONCESSION
OFFERING AMOUNT AS % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $25,000 4.75% 4.99% 4.00%
..................................................................................
$25,000 but less than $50,000 4.50% 4.71% 3.75%
..................................................................................
$50,000 but less than $100,000 4.00% 4.17% 3.25%
..................................................................................
$100,000 but less than $250,000 3.50% 3.63% 2.75%
..................................................................................
$250,000 but less than $500,000 2.50% 2.56% 2.00%
..................................................................................
$500,000 but less than $1 million 2.00% 2.04% 1.60%
..................................................................................
$1 million or more and certain
other investments described below see below see below see below
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGE
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 100 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE
IMPOSED ON CERTAIN REDEMPTIONS BY ACCOUNTS THAT INVEST WITH NO INITIAL SALES
CHARGE (OTHER THAN EMPLOYER-SPONSORED PLANS), IF REDEMPTIONS ARE MADE WITHIN
ONE YEAR OF PURCHASE. A dealer concession of up to 1% may be paid by the fund
under its Plan of Distribution and/or by American Funds Distributors on
investments made with no initial sales charge.
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your sales
charge. You must let your investment dealer or American Funds Service Company
know if you qualify for a reduction in your sales charge using one or any com-
bination of the methods described in the statement of additional information or
"Welcome to the Family."
PLAN OF DISTRIBUTION
The fund has a Plan of Distribution or "12b-1 Plan" under which it may finance
activities primarily intended to sell shares, provided the categories of ex-
penses are approved in advance by the fund's board of trustees. Up to 0.25% of
average net assets is paid annually to qualified dealers for providing certain
services
14 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
pursuant to the fund's Plan of Distribution. The 12b-1 fee paid by the fund, as
a percentage of average net assets, for the previous fiscal year is indicated
earlier under "Fees and Expenses of the Fund." Since these fees are paid out of
the fund's assets on an ongoing basis, over time they will increase the cost of
an investment and may cost you more than paying higher initial sales charges.
OTHER COMPENSATION TO DEALERS
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.
HOW TO SELL SHARES
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)
. Shares held for you in your dealer's name must be sold through the dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
. Requests must be signed by the registered shareholder(s).
. A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address
of record which has been changed within the last 10 days.
. Additional documentation may be required for sales of shares held in cor-
porate, partnership or fiduciary accounts.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE(R) OR AMERICAN FUNDSLINE ONLINE(R):
. Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day.
. Checks must be made payable to the registered shareholder(s).
. Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
CAPITAL WORLD BOND FUND / PROSPECTUS 15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE, OR AMERICAN FUNDSLINE
ONLINE
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all
of these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your ac-
count(s), you agree to hold the fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, and each of their
respective directors, trustees, officers, employees and agents harmless from
any losses, expenses, costs or liabilities (including attorney fees) which may
be incurred in connection with the exercise of these privileges, provided Amer-
ican Funds Service Company employs reasonable procedures to confirm that the
instructions received from any person with appropriate account information are
genuine. If reasonable procedures are not employed, the fund may be liable for
losses due to unauthorized or fraudulent instructions.
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
DIVIDENDS AND DISTRIBUTIONS
The fund usually pays dividends, which may fluctuate, in March, June, October
and December. The first three dividends of each year are normally the same; the
December dividend may be greater or less than the first three reflecting the
impact of foreign currency transactions. Capital gains, if any, are also usu-
ally distributed in December. When a dividend or capital gain is distributed,
the net asset value per share is reduced by the amount of the payment.
You may elect to reinvest dividends and/or capital gain distributions to pur-
chase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash.
TAX CONSEQUENCES
Dividends derived from taxable interest income, distributions of capital gains
and dividends on gains from the disposition of certain market discount bonds
will not be exempt from federal, state or local income tax.
Dividends and capital gains are generally taxable whether they are reinvested
or received in cash -- unless you are exempt from taxation or entitled to tax
deferral. Capital gains may be taxed at different rates depending on the length
of time the fund holds its assets.
16 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
You must provide the fund with a certified correct taxpayer identification num-
ber (generally your Social Security Number) and certify that you are not sub-
ject to backup withholding. If you fail to do so, the IRS can require the fund
to withhold 31% of your taxable distributions and redemptions. Federal law also
requires the fund to withhold 30% of the applicable tax treaty rate from divi-
dends paid to certain non-resident alien, non-US partnership and non-U.S. cor-
poration shareholder accounts.
Please see the statement of additional information, "Welcome to the Family,"
and your tax adviser for further information.
CAPITAL WORLD BOND FUND / PROSPECTUS 17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial results for the past five years. Certain information reflects finan-
cial results for a single fund share. The total returns in the table represent
the rate that an investor would have earned or lost on an investment in the
fund (assuming reinvestment of all dividends and distributions). This informa-
tion has been audited by Deloitte & Touche LLP, whose report, along with the
fund's financial statements, are included in the statement of additional infor-
mation, which is available upon request.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
.......................
1998 1997 1996 1995 1994
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $16.40 $16.86 $16.81 $15.33 $16.48
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .43 .88 1.09 1.09 1.05
................................................................................
Net gains or losses on securities
(both realized and unrealized) .57 (.16) .16 1.57 (1.14)
................................................................................
Total from investment
operations 1.00 .72 1.25 2.66 (.09)
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LESS DISTRIBUTIONS:
Dividends (from net
investment income) (.80) (.95) (1.08) (1.18) (.90)
................................................................................
Dividends from net realized
non-U.S. currency gains/1/ -- (.23) (.12) -- (.04)
................................................................................
Distributions (from capital
gains) (.28) -- -- -- (.12)
................................................................................
Total distributions (1.08) (1.18) (1.20) (1.18) (1.06)
- --------------------------------------------------------------------------------
Net asset value,
end of period $16.32 $16.40 $16.86 $16.81 $15.33
- --------------------------------------------------------------------------------
Total return/2/ 6.42% 4.38% 7.67% 18.10% (.62)%
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RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions) $645 $758 $811 $653 $576
................................................................................
Ratio of expenses to
average net assets 1.06% 1.07% 1.09% 1.12% 1.11%
................................................................................
Ratio of net income
to average net assets 5.15% 5.21% 6.07% 6.83% 6.88%
................................................................................
Portfolio turnover rate 100.92% 79.00% 91.27% 104.96% 77.04%
</TABLE>
/1/ Realized non-U.S. currency gains are treated as ordinary income for
federal income tax purposes.
/2/ Excludes maximum sales charge of 4.75%.
18 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
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NOTES
CAPITAL WORLD BOND FUND / PROSPECTUS 19
<PAGE>
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NOTES
20 CAPITAL WORLD BOND FUND / PROSPECTUS
<PAGE>
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NOTES
CAPITAL WORLD BOND FUND / PROSPECTUS 21
<PAGE>
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<TABLE>
<CAPTION>
FOR SHAREHOLDER FOR RETIREMENT PLAN FOR DEALER
SERVICES SERVICES SERVICES
<S> <C> <C>
American Funds Call your employer or American Funds
Service Company plan administrator Distributors
800/421-0180 800/421-9900 ext. 11
</TABLE>
FOR 24-HOUR INFORMATION
<TABLE>
<S> <C>
American American Funds
FundsLine(R) Internet Web site
800/325-3590 http://www.americanfunds.com
</TABLE>
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
------------------------------------------------------------
MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. If
there are any inconsistencies or ambiguities, the English
text will prevail.
------------------------------------------------------------
OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Contains additional information about the fund including
financial statements, investment results, portfolio
holdings, a statement from portfolio management discussing
market conditions and the fund's investment strategies, and
the independent accountants' report (in the annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more detailed information on all aspects of the
fund, including the fund's financial statements.
A current SAI has been filed with the Securities and
Exchange Commission ("SEC") and is incorporated by
reference into this prospectus. The SAI and other related
materials about the fund are available for review or to be
copied at the SEC's Public Reference Room (1-800-SEC-0330)
or on the SEC's Internet Web site at http://www.sec.gov.
CODE OF ETHICS
Includes a description of the fund's personal investing
policy.
To request a free copy of any of the documents above:
Call American Funds or Write to the Secretary of
Service Company the fund
800/421-0180 ext. 1 333 South Hope Street
Los Angeles, California
90071
[RECYCLE LOGO]
Investment Company File No. 811-5104 Printed on recycled paper
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