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AMERICAN HIGH-INCOME TRUST
SEMI-ANNUAL REPORT
for the six months ended March 31, 1996
[The American Funds Group(R)]
AMERICAN HIGH-INCOME TRUST(R) seeks a high level of current income and,
secondarily, capital appreciation through a diversified, carefully supervised
portfolio consisting primarily of lower rated, higher risk corporate bonds.
ABOUT OUR COVER:
American High-Income Trust invests in a broad spectrum of companies in
industries ranging from paper and cardboard to communications to geothermal
energy.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are returns, with all distributions reinvested,
through March 31, 1996, assuming payment of the 4.75% maximum sales charge at
the beginning of the stated periods:
Total Average Annual
Return Compound Return
Lifetime (since 2/19/88) +128.91% +10.75%
Five years +75.28 +11.88
One year +13.21 -
Sales charges are lower for accounts of $25,000 or more.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
FELLOW SHAREHOLDERS:
We are pleased to report that a combination of relatively low interest
rates, strong corporate profits and a healthy stock market helped American
High-Income Trust earn solid returns in the six months ended March 31.
The value of your holdings in the fund rose 7.1% if you reinvested your
dividends, as most shareholders do. Over the same period, your fund outpaced
the majority of its peers in both the high-yield and investment-grade bond
markets. The Salomon Brothers Long-Term High-Yield Index and the Lipper
High-Yield Bond Funds Index both rose 5.1%. The Salomon Brothers Broad
Investment-Grade Bond Index, which measures higher grade bonds, increased 2.5%.
The Salomon indexes are unmanaged.
If you took dividends in cash, the value of your holdings rose 2.0% and
you earned an income return of 5.0% for the six months, or 10.0% on an
annualized basis. The fund paid dividends totaling 71 cents a share - a monthly
dividend of 10.5 cents a share and a special dividend of eight cents a share
paid in December.
BUILDING THE OPTIMAL PORTFOLIO
Effective with the April payment, American High-Income Trust reduced the
monthly dividend to 10 cents a share from 10.5 cents. This follows three
consecutive increases. Lower interest rates certainly played a role in this
decision, but equally important was a desire to build the optimal portfolio for
our shareholders. Our aim is not simply to produce the highest possible current
yield. Instead, our goal has always been to invest prudently for the long term
and build a solid, high-income bond portfolio for our investors. At times that
may mean sacrificing some of today's yield for tomorrow's potential gain. This
was especially true as interest rates fell and the fund's assets grew.
Unlike higher grade bond funds, whose fortunes are tied closely to
interest rates and inflationary expectations, your fund's holdings also respond
to the strength or weakness of corporate profits and the stock market. When
profits are strong, credit ratings of companies whose bonds we own often
improve and the bonds rise in value. Finding bonds which offer the opportunity
for reward, relative to the risk involved, requires extensive research. Some of
the companies in which we invest are growing rapidly and have sold bonds to
finance their expansion. Others may be larger companies whose fortunes, we
believe, are improving, or cyclical companies that rely on the bond market for
financing.
COMPARABLE TO AN EQUITY FUND
The strong stock market and reasonably stable bond market made this a
particularly satisfying period for American High-Income Trust, but you should
bear in mind that markets can go down as well as up and interest rates can
climb as well as fall. Interest rates have already started to move higher after
government reports that the U.S. economy is more robust than many analysts had
predicted. As we have mentioned in previous reports, the inevitable price
fluctuations in the high-yield bond market make this fund most appropriate for
investors who are comfortable with the degree of risk usually associated with
an equity investment.
We believe that our extensive research and long-term orientation have been
key factors in your fund's success. Since American High-Income Trust began
operations in February 1988, the value of the fund's shares has risen at an
annual compound rate of 11.4%, for a total increase of 140.3% assuming
reinvestment.
We are gratified to note that the assets of your fund have grown more than
20% and the number of shareholder accounts has increased by over 8,000 since
the fiscal year began on October 1. We welcome our new investors and look
forward to reporting to all our shareholders again in six months.
Cordially,
Paul G. Haaga, Jr.
Chairman of the Board
Richard T. Schotte
President
May 15, 1996
RESULTS AT A GLANCE
TOTAL RETURNS/1/
(FOR PERIODS ENDED 3/31/96)
SIX MONTHS ONE YEAR LIFETIME/2/
American High-Income Trust +7.05% +18.84% +140.33%
Salomon Brothers Broad
Investment-Grade Bond Index +2.51 +10.85 +99.50
Salomon Brothers Long-Term
High-Yield Index +5.12 +18.94 +145.24
Lipper High-Yield Bond
Funds Index +5.11 +14.20 +111.48
30-DAY RATES (as of 4/30/96)
Yield based on Securities and
Exchange Commission formula 8.22%
Distribution rate based on offering price 7.86%
Distribution rate based on net asset value 8.25%
/1/Change in value of investment with dividends and capital gain distributions
reinvested
/2/Since 2/19/88
The SEC yield reflects income the fund expects to earn based on its current
portfolio of securities, while the distribution rate is based solely on the
fund's past dividends. Accordingly, the fund's SEC yield and distribution rate
may differ.
American High-Income Trust
Investment Portfolio
March 31, 1996 (Unaudited)
U.S. Corporate Bonds 67%
Non-U.S. Corporate Bonds 14%
Cash Equivalents 8%
U.S. Treasuries 6%
Stocks 3%
Non-U.S. Government Bonds 2%
<TABLE>
<CAPTION>
Principal Market Percent
Amount Value of Net
(000) (000) Assets
<S> <C> <C> <C>
Bonds & Notes - 89.02%
Beverages - 1.56%
Canandaigua Wine Co., Inc. 8.75% 2003 $12,000 $11,580 .87%
Dr Pepper Bottling Co. of Texas 10.25% 2000 9,000 9,270 .69
------- ------
20,850 1.56
------- ------
Broadcasting & Publishing - 5.30%
American Media Operations, Inc. 11.625% 2004 16,400 16,646 1.24
American Radio Systems 9.00% 2006 8,000 7,840 .59
Chancellor Broadcasting Co. 9.375% 2004 10,000 9,562 .71
Infinity Broadcasting Corp. 10.375% 2002 8,450 9,084 .68
Marvel Holdings Inc. 0% 1998 24,000 18,300 1.37
Univision Television Group, Inc.:
11.75% 2001 4,350 4,633
7.00% 2002 2,567 1,797 .48
Young Broadcasting Inc. 10.125% 2005 3,000 3,030 .23
------- ------
70,892 5.30
------- ------
Cable & Telephone in the United
Kingdom - 6.33%
Bell Cablemedia PLC 0%/11.95% 2004/1/ 30,000 21,300 1.59
Comcast UK Cable Partners Ltd. 0%/11.20% 2007/1/ 24,000 13,860 1.04
International CableTel Inc.:
0%/10.875% 2003/1/ 21,175 15,458
0%/12.75% 2005/1/ 1,000 645 1.20
TeleWest plc:
9.625% 2006 7,000 6,983
0%/11.00% 2007/1/ 2,000 1,190 .61
Videotron Holdings PLC:
0%/11.125% 2004/1/ 31,000 22,087
0%/11.00% 2005/1/ 5,000 3,175 1.89
------- ------
84,698 6.33
------- ------
Cellular, Paging & Wireless
Communications - 16.60%
CAI Wireless Systems, Inc. 12.25% 2002 5,200 5,512 .41
CellNet Data Systems, Inc. 0%/13.00%/1/ /2/ /3/ 32,000 19,680 1.47
Cellular, Inc. 0%/11.75% 2003/1/ 8,500 6,970 .52
Cellular Communications International, Inc.
Units, 0% 2000 17,250 10,522 .79
CenCall Communications Corp. 0%/10.125% 2004/1/ /4/ 9,750 5,801 .43
Centennial Cellular Corp.:
8.875% 2001 17,000 16,405
10.125% 2005 2,500 2,525 1.42
Comcast Cellular Corp.:
Series A, 0% 2000 1,500 1,080
Series B, 0% 2000 1,250 900 .15
Comunicaci<UNDEF>n Celular S.A. Units,
0%/13.125% 2003/1/ /2/ 15,000 8,756 .65
Dial Call Communications, Inc. 0%/12.25% 2004/1/ /4/ 16,250 10,238 .77
Geotek Communications, Inc. 0%/15.00% 2005/1/ 2,000 1,220 .09
Heartland Wireless Communications, Inc.
13.00% 2003 3,800 4,199 .31
Horizon Cellular Telephone Co., LP
0%/11.375% 2000/1/ 17,065 15,017 1.12
MobileMedia Communications, Inc.
0%/10.50% 2003/1/ 19,150 14,745 1.10
NEXTEL Communications, Inc./4/:
0%/11.50% 2003/1/ 9,500 6,318
0%/9.75% 2004/1/ 3,000 1,710 .60
Omnipoint Corp. Units, 6.00%/12.00% 2000/1/ /3/ 12,500 18,125 1.35
Paging Network, Inc. 11.75% 2002 14,250 15,532 1.16
PanAmSat, LP:
9.75% 2000 6,500 6,760
0%/11.375% 2003/1/ 7,000 5,880 .95
People's Choice TV Corp. Units, 0%/13.125% 2004/1/ 5,775 3,624 .27
PriCellular Wireless Corp.:
0%/14.00% 2001/1/ 4,000 3,600
0%/12.25% 2003/1/ 14,210 11,155 1.10
Rogers Cantel Mobile Communications Inc.:
10.75% 2001 22,330 23,335
11.125% 2002 2,500 2,663 1.94
------- ------
222,272 16.60
------- ------
Construction & Housing - 2.29%
Building Materials Corp.
0%/11.75% 2004/1/ 14,000 10,360 .77
Del Webb Corp.:
9.75% 2003 3,000 3,037
9.00% 2006 1,750 1,680 .35
M.D.C. Holdings, Inc. 11.125% 2003 1,000 965 .07
Toll Corp. 9.50% 2003 4,000 4,160 .31
Triangle Pacific Corp. 10.50% 2003 10,000 10,500 .79
------- ------
30,702 2.29
------- ------
Diversified Media, Cable Television &
Telecommunications - 7.82%
Brooks Fiber Properties, Inc. 0%/10.875% 2006/1/ /2/ 3,000 1,762 .13
Cablevision Systems Corp. 9.875% 2013 4,000 4,160 .31
Century Communications Corp. 9.50% 2000 4,100 4,203 .31
Comcast Corp. 10.25% 2001 3,200 3,392 .25
Continental Cablevision, Inc.:
10.625% 2002 4,500 4,905
8.625% 2003 9,000 9,540
8.875% 2005 2,000 2,160 1.81
8.30% 2006/2/ 5,750 5,937
11.00% 2007 1,500 1,710
Insight Communications Co., LP 11.25% 2000/5/ 3,000 3,075 .23
IntelCom Group Inc. 0%/13.50% 2005/1/ 14,000 9,030 .68
Jones Intercable, Inc. 9.625% 2002 4,500 4,714 .35
MFS Communications Co., Inc.:
0%/9.375% 2004/1/ 46,350 35,226
0%/8.875% 2006/1/ 2,000 1,240 2.73
Storer Communications, Inc. 10.00% 2003 3,034 3,064 .23
Telecom Argentina STET - France Telecom SA
12.00% 2002 3,000 3,143 .24
Viacom International Inc.:
9.125% 1999 3,859 3,994
10.25% 2001 3,000 3,405 .55
------- ------
104,660 7.82
------- ------
Electric & Gas Utilities - 0.74%
Columbia Gas System, Inc.:
Series A, 6.39% 2000 3,000 2,969
Series C, 6.80% 2005 3,000 2,944 .44
El Paso Electric Co.:
Series B, 7.75% 2001 2,500 2,475
Series D, 8.90% 2006 1,500 1,515 .30
------- ------
9,903 .74
------- ------
Energy & Related Companies - 5.76%
Chesapeake Energy Corp. 10.50% 2002 3,200 3,376 .25
Dual Drilling Co. 9.875% 2004 9,450 10,159 .76
Falcon Drilling Co., Inc.:
9.75% 2001 2,500 2,588
8.875% 2003/2/ 5,000 4,987 .57
Flores & Rucks, Inc. 13.50% 2004 10,150 11,673 .87
Global Marine, Inc. 12.75% 1999 5,900 6,490 .48
Mesa Capital Corp. 12.75% 1998 5,000 4,887 .37
TransTexas Gas Corp. 11.50% 2002 18,250 17,976 1.34
Triton Energy Corp. 0%/9.75% 2000/1/ 8,000 7,680 .57
Tuboscope Vetco International Inc. 10.75% 2003 7,000 7,315 .55
------- ------
77,131 5.76
------- ------
Food Retailing - 2.62%
Carr-Gottstein Foods Co. 12.00% 2005 4,000 4,100 .31
Rykoff-Sexton, Inc. 8.875% 2003 6,000 5,940 .44
Safeway Inc. 10.00% 2002 1,700 1,917 .14
Star Markets Co., Inc. 13.00% 2004 11,000 11,330 .85
Stater Brothers Holdings Inc. 11.00% 2001 11,500 11,845 .88
------- ------
35,132 2.62
------- ------
Forest Products & Paper - 6.24%
Container Corp. of America:
10.75% 2002 6,000 6,135
9.75% 2003 20,250 20,047 2.34
11.25% 2004 5,000 5,162
Fort Howard Paper Co.:
9.25% 2001 15,250 15,364
8.25% 2002 2,000 1,930 1.64
9.00% 2006 4,750 4,608
MAXXAM Group Inc. 11.25% 2003 3,000 2,850 .21
Pacific Lumber Co. 10.50% 2003 7,000 6,790 .51
P.T. Indah Kiat Pulp & Paper Corp.:
8.875% 2000/2/ 12,000 11,250
11.875% 2002 2,000 2,025 .99
P.T. Pabrik Kertas Tjiwi Kimia 13.25% 2001 5,500 6,050 .45
Repap Wisconsin, Inc. Second Priority 9.875% 2006 1,500 1,373 .10
------- ------
83,584 6.24
------- ------
Health & Personal Care - 2.37%
Dynacare Inc. 10.75% 2006 3,000 3,023 .23
Merit Behavioral Care Corp. 11.50% 2005/2/ 4,750 5,083 .38
Regency Health Services, Inc. 9.875% 2002 14,300 14,514 1.08
Universal Health Services, Inc. 8.75% 2005 9,000 9,067 .68
------- ------
31,687 2.37
------- ------
Independent Power Producers - 3.45%
California Energy Co., Inc.
0%/10.25% 2004/1/ 34,750 33,013 2.47
CE Casecnan Water and Energy Co., Inc.,
Series A, 11.45% 2005/2/ 2,000 1,988 .15
Midland Cogeneration Venture LP:
Series C-91, 10.33% 2002 1,678 1,768
Series C-94, 10.33% 2002 4,839 5,099 .51
Subic Power Corp. 9.50% 2008/2/ 4,483 4,337 .32
------- ------
46,205 3.45
------- ------
Leisure, Tourism & Restaurants - 4.06%
AMF Group Inc.:
10.875% 2006/2/ 5,500 5,479
0%/12.25% 2006/1/ /2/ 6,500 3,575 .68
Foodmaker, Inc.:
9.25% 1999 11,500 11,212
9.75% 2002 3,000 2,865 1.05
Four Seasons Hotels Inc. 9.125% 2000/2/ 7,000 7,070 .53
Kloster Cruise Ltd. 13.00% 2003/3/ 14,350 11,050 .83
Plitt Theatres, Inc. 10.875% 2004 2,150 2,193 .16
Rio Hotel & Casino, Inc. 10.625% 2005 5,400 5,697 .43
Station Casinos, Inc. 9.625% 2003 5,250 5,145 .38
------- ------
54,286 4.06
------- ------
Manufacturing & Materials - 5.96%
Acme Metals Inc.:
12.50% 2002 7,000 7,227
0%/13.50% 2004/1/ 5,750 5,132 .92
AGCO Corp. 8.50% 2006/2/ 6,000 6,045 .45
AK Steel Corp. 10.75% 2004 4,000 4,400 .33
Coltec Industries Inc.:
9.75% 1999 2,500 2,600
9.75% 2000 16,000 16,640 1.44
Exide Corp. 10.00% 2005 2,250 2,289 .17
Kaiser Aluminum and Chemical Corp.:
9.875% 2002 3,000 2,993
12.75% 2003 8,000 8,480 .86
Knoll Group, Inc. 10.875% 2006/2/ 2,000 2,040 .15
MagneTek, Inc. 10.75% 1998 5,700 5,586 .42
Owens-Illinois, Inc. 11.00% 2003 4,750 5,207 .39
UCAR Global Enterprises Inc. 12.00% 2005 4,430 5,095 .38
Westinghouse Air Brake Co. 9.375% 2005 5,750 5,980 .45
------- ------
79,714 5.96
------- ------
Merchandising - 3.40%
Ann Taylor 8.75% 2000 3,500 3,150 .24
Barnes & Noble, Inc. 11.875% 2003 11,450 12,566 .94
Thrifty PayLess, Inc.:
11.75% 2003 10,000 11,500
12.25% 2004 14,250 15,818 2.22
Units, 12.25% 2004 2,000 2,420
------- ------
45,454 3.40
------- ------
Miscellaneous Services - 1.03%
A.P.S., Inc. 11.875% 2006/2/ 1,700 1,734 .13
Neodata Services, Inc. 0%/12.00% 2003/1/ 12,000 12,000 .90
------- ------
13,734 1.03
------- ------
Protection Services - 0.76%
ADT Operations 9.25% 2003 2,000 2,075 .15
Protection One Alarm Monitoring, Inc.
0%/13.625% 2005/1/ 9,500 8,122 .61
------- ------
10,197 .76
------- ------
Real Estate - 0.30%
B.F. Saul Real Estate Investment Trust
11.625% 2002 4,000 4,060 .30
------- ------
Textiles & Apparel - 0.19%
Tultex Corp. 10.625% 2005 1,000 1,038 .08
WestPoint Stevens Inc. 8.75% 2001 1,500 1,496 .11
------- ------
2,534 .19
------- ------
Transportation - 3.96%
Airplanes Pass Through Trust, pass-through
certificates, Class D, 10.875% 2019/6/ 13,125 13,486 1.01
Delta Air Lines, Inc.:
10.375% 2011 2,000 2,400
Pass-through certificates, Series 1993-A2,
10.50% 2016/6/ 1,000 1,209 .43
10.375% 2022 1,750 2,136
Jet Equipment Trust, Series 1995-B, 10.91% 2014/2/ 1,000 1,056 .08
Northwest Airlines, Inc. 12.092% 2000 1,577 1,625 .12
NWA Trust, Class D, 13.875% 2008 3,750 4,448 .33
Teekay Shipping Corp. 8.32% 2008 11,500 11,155 .83
TNT Transport (Europe) PLC/TNT (USA)
Inc. 11.50% 2004 5,500 5,748 .43
USAir, Inc.:
9.625% 2001 3,000 2,730
10.00% 2003 3,000 2,775 .73
Pass-through trust, Series 1993-A3,
10.375% 2013/6/ 4,150 4,192
------- ------
52,960 3.96
------- ------
Collateralized Mortgage/Asset-Backed
Obligations 6 - 0.45%
Fifth Avenue Capital Trust, Class C, 12.36% 2002/2/ 5,000 5,203 .39
Resolution Trust Corp.:
Series 1993-C1, Class E, 9.50% 2024 341 336
Series 1993-C2, Class E, 8.50% 2025 544 536 .06
------- ------
6,075 .45
------- ------
Non-U.S. Governments and Governmental
Authorities - 2.32%
Argentina (Republic of):
8.375% 2003 1,500 1,264
6.312% 2005/5/ 4,000 2,885 .31
Brazil (Federal Republic of):
Eligible Interest Bond 6.812% 2006/5/ 750 548
Debt Conversion Bond 6.875% 2012/5/ 2,000 1,245 .13
Ecuador (Republic of) Past Due Interest Bond
6.062% 2015/5/ 8,330 3,228 .24
Panama (Republic of) Interest Reduction Bond
3.50% 2049/5/ 11,500 5,448 .41
Poland (Republic of):
Discount Bond 6.875% 2024/5/ 1,500 1,335
Past Due Interest Bond:
Bearer 3.75% 2014/5/ 8,375 6,344 .60
Registered 3.75% 2014/5/ 375 284
South Africa (Republic of) 13.00% 2010 5,750 1,256 .09
United Mexican States:
Collateralized Eurobond:
Series A, 6.25% 2019 1,400 889
Series B, 6.25% 2019 8,500 5,397 .54
Government 9.75% 2001 1,000 975
------- ------
31,098 2.32
------- ------
U.S. Treasury Obligations - 5.51%
7.25% 1998 5,000 5,127
6.875% 1999 29,000 29,757
7.50% 2001 10,000 10,612
5.75% 2003 17,000 16,418 5.51
7.875% 2004 1,000 1,097
11.625% 2004 8,000 10,740
------- ------
73,751 5.51
------- ------
Total Bonds & Notes (cost: $1,160,125,000) 1,191,579 89.02
------- ------
Number of
Shares
Stocks (Common & Preferred) - 2.58%
AnnTaylor, Inc./7/ 40,000 720 .05
California Energy Co., Inc./7/ 25,000 666 .05
Carnival Cruise Lines, Inc., Class A 20,000 550 .04
CellNet Data Systems, Inc.,
warrants, expire 6/15/05/3/ /7/ 128,000 2,560 .19
Cellular Communications, Inc./7/ 10,000 511 .04
Columbia Gas System, Inc. 14,700 674 .05
Comcast Corp., Class A 10,000 174
Comcast Corp., Class A, special stock 20,000 354 .04
Dial Page, Inc., warrants, expire 4/15/99/3/ /4/ /7/ 21,250 - .00
El Paso Electric Co., Series A, preferred
11.40% 2008/8/ 6,000 627 .05
Falcon Drilling Company, Inc./7/ 35,000 779 .06
Foodmaker, Inc./7/ 30,000 210 .01
Heartland Wireless Communications, Inc.,
warrants, expire 4/26/00/2/ /7/ 22,800 103 .01
Host Marriott Corp./7/ 13,896 188 .01
Host Marriott Services Corp./7/ 2,779 19 .00
IntelCom Group Inc., warrants, expire 8/8/05/2/ /7/ 42,900 386 .03
Marriott International Inc. 13,896 660 .05
Nacional Financiera S.N.C. PRIDES 11.25% 1998 20,000 677 .05
Nortel Inversora SA, Class A, preferred
(American Depositary Receipts)/2/ /3/ 2,016,500 24,460 1.83
Protection One Alarm Monitoring, Inc.,
warrants, expire 6/30/05/2/ /7/ 30,400 213 .02
------- ------
Total Stocks (cost: $24,335,000) 34,531 2.58
------- ------
Principal
Amount
(000)
Convertible Debentures - 0.11%
Euro Disney S.C.A. 6.75% 2001 $7,700 1,473 .11
------- ------
Total Convertible Debentures (cost:
$1,018,000) 1,473 .11
------- ------
Short-Term Securities
Corporate Short-Term Notes - 7.02%
AT&T Corp. 5.30% due 4/2-4/3/96 25,000 24,991 1.86
General Electric Capital Corp. 5.39%-5.43%
due 4/1-4/17/96 35,490 35,461 2.65
Xerox Corp. 5.12%-5.27% due 4/1-4/12/96 33,600 33,570 2.51
------- ------
Total Short-Term Securities (cost:
$94,022,000) 94,022 7.02
------- ------
Total Investment Securities (cost:
$1,279,500,000) 1,321,605 98.73
Excess of cash and receivables over
payables 16,958 1.27
------- ------
Net Assets $1,338,563 100.00%
======= ======
</TABLE>
/1/ Represents a step bond; coupon rate will increase at a later date.
/2/ Purchased in a private placement transaction; resale to the public may
require registration.
/3/ Valued under procedures established by the Board of Trustees.
/4/ CenCall Communications merged with NEXTEL on July 28, 1995, and Dial Call
Communications merged with NEXTEL on January 31, 1996. The securities of
CenCall and Dial Call have become obligations of NEXTEL.
/5/ Coupon rate may change periodically.
/6/ Pass-through security backed by a pool of mortgages or other loans on which
principal payments are periodically made. Therefore, the effective maturity of
these securities is shorter than the stated maturity.
/7/ Non-income-producing security.
/8/ Payment in kind. The issuer has the option of paying additional securities
in lieu of cash.
See Notes to Financial Statements
American High-Income Trust
Financial Statements (Unaudited)
Statement of Assets and Liabilities
at March 31, 1996 (dollars in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investment securities
(cost: $1,279,500) $1,321,605
Receivables for--
Sales of fund's shares $ 6,394
Forward currency contracts 36
Accrued dividends and interest 21,826 28,256
-------- ---------
1,349,861
Liabilities:
Payables for--
Purchases of investments 5,419
Repurchases of fund's shares 1,070
Dividends on fund's shares 4,027
Management services 536
Accrued expenses 246 11,298
-------- ---------
Net Assets at March 31, 1996 --
Equivalent to $14.58 per share on
91,809,473 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $1,338,563
=========
Statement of Operations (Unaudited)
for the six months ended March 31, 1996
(dollars in thousands)
Investment Income:
Income:
Dividends $36
Interest 59,018 $59,054
--------
Expenses:
Management services fee 3,053
Distribution expenses 1,370
Transfer agent fee 458
Reports to shareholders 62
Registration statement and prospectus 175
Postage, stationery and supplies 124
Trustees' fees 12
Auditing and legal fees 39
Custodian fee 32
Taxes other than federal income tax 20
Other expenses 192 5,537
-------- ---------
Net investment income 53,517
---------
Realized Loss and Unrealized
Appreciation on Investments:
Net realized loss (7,961)
Net unrealized appreciation
on investments:
Beginning of period 5,775
End of period 42,141
--------
Net unrealized appreciation
on investments 36,366
---------
Net realized loss and unrealized
appreciation on investments 28,405
---------
Net Increase in Net Assets
Resulting from Operations $81,922
=========
See Notes to Financial Statements
Statement of Changes in Net Assets
(dollars in thousands)
Six months
ended Year ended
3/31/96* 9/30/95
Operations: -------- ---------
Net investment income $53,517 $89,824
Net realized loss on investments (7,961) (7,154)
Net unrealized appreciation
on investments 36,366 36,963
-------- ---------
Net increase in net assets
resulting from operations 81,922 119,633
-------- ---------
Dividends and Distributions
Paid to Shareholders:
Dividends from net investment income (59,586) (87,231)
Distributions from net realized
gain on investments - (4,494)
-------- ---------
Total dividends and distributions (59,586) (91,725)
-------- ---------
Capital Share Transactions:
Proceeds from shares sold:
21,666,943 and 30,002,672
shares, respectively 315,190 414,416
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on
investments: 2,538,156 and
4,145,269 shares, respectively 36,803 56,782
Cost of shares repurchased:
10,089,897 and 16,228,009
shares, respectively (146,752) (223,033)
-------- ---------
Net increase in net assets
resulting from capital share
transactions 205,241 248,165
-------- ---------
Total Increase in Net Assets 227,577 276,073
Net Assets:
Beginning of period 1,110,986 834,913
-------- ---------
End of period (including undistributed
net investment income: $1,770
and $7,839, respectively) $1,338,563 $1,110,986
======== =========
</TABLE>
* Unaudited
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS (unaudited)
1. American High-Income Trust (the "fund") is registered under the Investment
Company Act of 1940 as an open-end, diversified management investment company.
The fund seeks a high level of current income and, secondarily, capital
appreciation through a diversified, carefully supervised portfolio consisting
primarily of lower rated, higher risk corporate bonds. The following
paragraphs summarize the significant accounting policies consistently followed
by the fund in the preparation of its financial statements:
Stocks and convertible debentures are stated at market value based upon
closing sales prices reported on recognized securities exchanges on the last
business day of the period or, for listed securities having no sales reported,
upon last-reported bid prices on that date. Securities traded in the
over-the-counter market are valued at the last available sale price prior to
the time of valuation or, lacking any sales, at the last-reported bid price.
Bonds and notes are valued at prices obtained from a bond-pricing service
provided by a major dealer in bonds, 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 of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality and type. Securities denominated in non-U.S.
currencies are generally valued on the basis of bid quotations.
Short-term securities with original or remaining maturities in excess of
60 days, including forward currency contracts, are valued at the mean of their
quoted bid and asked prices. Short-term securities with 60 days or less to
maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Trustees.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed-delivery or "when-issued" basis, it
will segregate with its custodian liquid assets in an ammount sufficient to
meet its payment obligations in these transactions. Realized gains and losses
from securities transactions are reported on an identified cost basis.
Dividend and interest income is reported on the accrual basis. Premiums and
discounts on securities purchased are amortized over the life of the respective
securities. Dividends to shareholders are declared daily after determination
of the fund's net investment income and paid to shareholders monthly.
Distributions paid to shareholders are recorded on the ex-dividend date.
Investment securities and other assets and liabilities, including forward
currency contracts, denominated in non-U.S. currencies are recorded in the
financial statements after translation into U.S. dollars utilizing rates of
exchange on the last business day of the period. Interest income from such
investments is calculated using the approximate exchange rate as accrued or
when received. Purchases and sales of investment securities, income, and
expenses are calculated at the rates of exchange prevailing on the respective
dates of such transactions. The fund does not identify the portion of each
amount shown in the fund's statement of operations under the caption "Realized
Loss and Unrealized Appreciation on Investments" that arises from changes in
non-U.S. currency exchange rates.
Pursuant to the custodian agreement, the fund receives credit against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $32,000 includes $30,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of March 31, 1996, net unrealized appreciation on investments,
excluding forward currency contracts, for book and federal income tax purposes
aggregated $42,105,000, of which $58,332,000 related to appreciated securities
and $16,227,000 related to depreciated securities. During the period ended
March 31, 1996, the fund realized, on a tax basis, a net capital loss of
$7,961,000 on securities transactions. The fund has available at March 31,
1996 a net capital loss carryforward totaling $7,107,000 which may be used to
offset capital gains realized during subsequent years through 2002 and thereby
relieve the fund and its shareholders of any federal income tax liability with
respect to the capital gains that are so offset. It is the intention of the
fund not to make distributions from capital gains while there is a capital loss
carryforward. The cost of portfolio securities, excluding forward currency
contracts, for book and federal income tax purposes was $1,279,500,000 at March
31, 1996.
3. The fee of $3,053,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Trustees of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.30% of the first $60 million of average net assets;
0.21% of such assets in excess of $60 million but not exceeding $1 billion; and
0.18% of such assets in excess of $1 billion; plus 3.00% on the first $100
million of the fund's annual gross investment income; and 2.50% of such income
in excess of $100 million.
Pursuant to a Plan of Distribution, the fund may expend up to 0.30% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Trustees. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended March 31,
1996, distribution expenses under the Plan were $1,370,000. As of March 31,
1996, accrued and unpaid distribution expenses were $189,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $458,000. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $1,073,000 (after allowances to
dealers) as its portion of the sales charges paid by purchasers of the fund's
shares. Such sales charges are not an expense of the fund and, hence, are not
reflected in the accompanying statement of operations.
Trustees of the fund 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, 1996, aggregate amounts deferred and earnings thereon were
$26,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Trustees and officers of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
4. As of March 31, 1996, accumulated net realized loss on investments was
$15,068,000 and paid-in capital was $1,309,720,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $330,279,000 and $179,874,000, respectively, during
the six months ended March 31, 1996.
The fund purchases and sells forward currency contracts in anticipation
of, or to protect itself against, fluctuations in exchange rates. The
contracts are recorded in the statement of assets and liabilities at their net
unrealized value; the fund's maximum potential liability in these contracts is
equal to the full contract amounts. Risks may arise upon entering these
contracts from the potential inability of counterparties to meet the terms of
their contracts and from the possible movements in foreign exchange rates and
securities values underlying these instruments.
<TABLE>
<CAPTION>
- --------------- Contract Amount U.S. Valuation at 3/31/96
Non-U.S. Currency Sales Contract Non-U.S. U.S. Amount Unrealized
Appreciation
- ---------------------------- -------- ------ -------- ------------
<S> <C> <C> <C> <C>
French Francs expiring 5/24/96 FF5,100,000 $1,051,000 $1,015,000 $36,000
</TABLE>
- ------------
Per-Share
Data and Ratios
<TABLE>
<CAPTION>
Six
months
ended Year ended September 30
3/31/96/1/ 1995 1994 1993 1992 1991
------ ----- ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $14.30 $13.97 $15.18 $14.58 $13.56 $11.81
------ ----- ----- ------ ------ -----
Income from Investment
Operations:
Net investment income .63 1.33 1.25 1.28 1.35 1.46
Net realized and
unrealized gain
(loss) on investments .36 .39 (.99) .74 .99 1.78
------ ----- ----- ------ ------ -----
Total income from
investment operations .99 1.72 .26 2.02 2.34 3.24
------ ----- ----- ------ ------ -----
Less Distributions:
Dividends from net
investment income (.71) (1.32) (1.21) (1.29) (1.32) (1.49)
Distributions from net
realized gains - (.07) (.26) (.13) - -
------ ----- ----- ------ ------ -----
Total distributions (.71) (1.39) (1.47) (1.42) (1.32) (1.49)
------ ----- ----- ------ -------- -----
Net Asset Value, End of Period $14.58 $14.30 $13.97 $15.18 $14.58 $13.56
====== ===== ===== ====== ====== =====
Total Return/2/ 7.05%/3/ 13.34% 1.60% 14.59% 18.08% 29.13%
Ratios/Supplemental Data:
Net assets, end of period
(in millions) $1,339 $1,111 $835 $707 $438 $255
Ratio of expenses to average
net assets .45%/3/ .89% .86% .87% .94% 1.00%
Ratio of net income to
average net assets 4.36%/3/ 9.72% 8.63% 8.60% 9.58% 11.41%
Portfolio turnover rate 15.86%/3/ 29.56% 42.03% 44.37% 58.04% 44.38%
</TABLE>
/1/Unaudited
/2/Calculated without deducting a sales charge. The maximum sales charge is
4.75% of the fund's offering price.
/3/Based on the period shown and, accordingly, not representative of a full
year's operations.
FUND SERVICES
These handy services can add convenience and flexibility to your American Funds
investments.
ADDING TO YOUR INVESTMENT
There are three ways you can group your American Funds purchases to qualify for
a quantity discount:
- - RIGHT OF ACCUMULATION: You can combine the value of your existing shares with
those you are purchasing to qualify for a discount.
- - STATEMENT OF INTENTION: You can, without obligation, use a Statement of
Intention that allows you to combine the value of your existing shares and the
purchases you intend to make over a 13-month period so you can take immediate
advantage of the maximum quantity discount available.
- - CONCURRENT PURCHASES: By purchasing shares in more than one American Fund
simultaneously, you may qualify for a quantity discount.
(Shares of money market funds purchased directly do not apply to quantity
discounts. Additionally, certain accounts may not be eligible to be grouped.
See the fund's prospectus or your investment professional for more details.)
SUBSEQUENT INVESTMENTS BY MAIL: Once your account has been established and
you've selected a broker/dealer, simply send a check for $50 or more, along
with the bottom portion of your account statement, to American Funds Service
Company.
PUTTING YOUR INVESTMENTS ON AUTOPILOT
AUTOMATIC INVESTMENT PLAN: You can make automatic investments regularly by
authorizing American Funds Service Company to deduct a specified sum from your
bank account.
AUTOMATIC EXCHANGE PLAN: You can automatically exchange $50 or more between
funds on a regular basis.
AUTOMATIC WITHDRAWAL PLAN: You can arrange to have regular checks for specified
amounts sent to you or to anyone you designate in any month(s) you choose.
CHOOSING THE PAYOUT SYSTEM THAT'S RIGHT FOR YOU
AUTOMATIC REINVESTMENT: All dividends and capital gain distributions can be
automatically reinvested in additional fund shares without a sales charge.
CROSS-REINVESTMENT: You can reinvest dividends and/or capital gains from one
fund to another fund at no charge if you have a balance of at least $5,000 in
the originating fund or meet the minimum initial investment for the receiving
fund.
DIVIDENDS IN CASH: You can elect to take dividends in cash.
REPORTS YOU'LL RECEIVE FROM US
CONFIRMATIONS OF TRANSACTIONS: You will receive account statements reflecting
the transactions in your account.
CONSOLIDATED QUARTERLY STATEMENTS: If you have more than one account with the
American Funds, you can request a quarterly statement combining certain
accounts registered to the same individual.
YEAR-END TAX REPORTS: At the end of each year, you will receive an individual
report which shows the tax status of the distributions paid to you during the
year. In many instances, these reports can help you calculate taxes due on
shares sold by reporting average cost.
SPECIAL SERVICES
EXCHANGE PRIVILEGES: You can transfer some or all of your holdings into other
American Funds by mail or by phone. Certain restrictions apply (a sales charge
may apply if one has not already been paid), and it's important to remember
that an exchange constitutes a sale and purchase for tax purposes.
TELEPHONE INFORMATION SERVICE: American FundsLineR is a toll-free service which
gives you account information as well as current prices for all American Funds.
Just call 800/325-3590.
SAFEKEEPING OF CERTIFICATES: Your shares are credited to your account and
certificates are not issued unless specifically requested. (Certificates are
not available for money market funds.)
RETIREMENT PLANS: A wide variety of plans is available.
FOR MORE COMPLETE INFORMATION ABOUT THESE SERVICES OR ABOUT ANY OF THE AMERICAN
FUNDS, INCLUDING CHARGES AND EXPENSES, PLEASE OBTAIN A PROSPECTUS FROM YOUR
SECURITIES DEALER OR FINANCIAL PLANNER, 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. THESE SERVICES ARE SUBJECT TO CHANGE
OR TERMINATION.
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 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
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, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster LLP
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
THIS REPORT IS FOR THE INFORMATION OF SHAREHOLDERS OF AMERICAN HIGH-INCOME
TRUST, 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, 1996, THIS REPORT MUST BE ACCOMPANIED BY AN AMERICAN
FUNDS GROUP STATISTICAL UPDATE FOR THE MOST RECENTLY COMPLETED CALENDAR
QUARTER.
Litho in USA MNC/GRS/2961
Lit. No. AHIT-013-0596
[The American Funds Group(R)]
Printed on recycled paper
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