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)]
- --------------------------------------------------------------------------------
American
High-Income Trust(SM)
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>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERICAN HIGH-INCOME TRUST
333 South Hope Street
Los Angeles, California 90071
TICKER SYMBOL: AHITX NEWSPAPER ABBREV.: HI Tr FUND NO.: 21
- --------------------------------------------------------------------------------
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 10
............................................................................
Shareholder Information 12
............................................................................
Purchase and Exchange of Shares 13
............................................................................
Distribution Arrangements 16
............................................................................
Financial Highlights 17
............................................................................
Appendix 18
</TABLE>
- ----------------------------------------------------------------------------
21-010-1298/RRD
AMERICAN HIGH-INCOME TRUST / PROSPECTUS 1
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY
The fund seeks to provide you with a high level of current income and,
secondarily, capital appreciation. The fund seeks to achieve these objectives
by investing primarily in a broad range of lower quality, higher yielding debt
securities that also provide an opportunity to increase in value. Typically,
when an issuer's financial health improves, its bond rating is often upgraded
and as a result its value tends to rise.
The fund is designed for investors seeking a high level of current income and
who are able to tolerate greater credit risk and price fluctuations than funds
investing in higher quality bonds. 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 may be affected by changing interest rates and credit
ratings. Lower quality and longer maturity bonds will be subject to greater
credit risk and price fluctuations than higher quality and shorter maturity
bonds. The prices of equity securities held by the fund may be affected by
events involving the issuers of these securities. Investing outside the U.S.
can also involve additional risks, such as currency fluctuations or political,
social and economic instability.
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
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
2 AMERICAN HIGH-INCOME TRUST / PROSPECTUS
<PAGE>
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- --------------------------------------------------------------------------------
INVESTMENT RESULTS
The following information illustrates how the fund's results may vary:
[CHART SHOWING FUND'S RESULTS APPEARS HERE]
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.)
<TABLE>
<CAPTION>
Measurement Period FUND
(Fiscal Year Covered) RESULTS
- ------------------- ----------
<S> <C>
Measurement Pt- 1989 5.63
FYE 1990 0.07
FYE 1991 32.36
FYE 1992 14.29
FYE 1993 17.22
FYE 1994 - 5.11
FYE 1995 20.68
FYE 1996 13.75
FYE 1997 12.2
</TABLE>
The fund's year-to-date return for the nine months ended September 30, 1998
was -3.82.
The fund's highest/lowest quarterly results during this time period were:
[X] HIGHEST 13.95% (quarter ended March 31, 1991)
[X] LOWEST -6.81% (quarter ended September 30, 1990)
AMERICAN HIGH-INCOME TRUST / PROSPECTUS 3
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For periods ended December 31, 1997:
<TABLE>
<CAPTION>
AVERAGE THE FUND WITH CS FIRST
ANNUAL MAXIMUM BOSTON HIGH
TOTAL SALES CHARGE YIELD
RETURN DEDUCTED/1/ INDEX/2/
- ------------------------------------------------------------------------------
<S> <C> <C>
One Year 6.87% 12.63%
..............................................................................
Five Years 10.28% 11.84%
..............................................................................
Lifetime/3/ 11.11% 11.61%
</TABLE>
Yield/1/: 7.65%
(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 Credit Suisse First Boston High Yield Index is an unmanaged, trader-
priced portfolio constructed to mirror the high yield debt market (revisions
to the index are effected weekly). This index does not reflect sales
charges, commissions or expenses.
/3/ The fund began investment operations on February 19, 1988.
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 AMERICAN HIGH-INCOME TRUST / 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 the fund assets)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Management Fees 0.46%
...............................................................................
Service (12b-1) Fees 0.25%*
...............................................................................
Other Expenses 0.10%
...............................................................................
Total Annual Fund Operating Expenses 0.81%
</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 $ 554
................................................................................
Three years $ 721
................................................................................
Five years $ 903
................................................................................
Ten years $1,429
</TABLE>
AMERICAN HIGH-INCOME TRUST / PROSPECTUS 5
<PAGE>
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- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
The fund's primary investment objective is to provide you with a high level of
current income. Its secondary investment objective is capital appreciation.
Normally, the fund invests primarily in lower quality debt securities (rated Ba
or BB or below), including those of non-U.S. issuers. The fund may also invest
in equity securities that provide an opportunity for capital appreciation.
The values of debt securities held by the fund may be affected by factors such
as changing credit ratings, interest rates, and effective maturities. For exam-
ple, the values of lower quality and longer maturity bonds will be subject to
greater credit risk and price fluctuations than higher quality and shorter ma-
turity bonds. In addition, values of bonds in the fund's portfolio generally
will decline when interest rates rise and vice versa. The prices of non-U.S.
securities can decline in response to various factors, including currency fluc-
tuations, political, social and economic instability, differing securities reg-
ulations, and administrative difficulties, such as delays in clearing and set-
tling portfolio transactions. In addition, the prices of securities held by the
fund may decline in response to certain events including those directly involv-
ing issuers of these securities, adverse conditions affecting the general econ-
omy, or overall market declines. The fund may also hold cash and cash equiva-
lents, for example, in response to abnormal market conditions. The extent of
the fund's cash position will depend on market conditions, fund purchases and
redemptions, and other factors. This may detract from the achievement of the
fund's objective over the short term, or it may protect the fund during a mar-
ket 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 invest-
ment opportunities.
6 AMERICAN HIGH-INTEREST TRUST / PROSPECTUS
<PAGE>
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- --------------------------------------------------------------------------------
ADDITIONAL INVESTMENT RESULTS
The following additional investment results are for periods ended December 31,
1997:
<TABLE>
<CAPTION>
AVERAGE SALOMON SMITH
ANNUAL THE FUND BARNEY BROAD
TOTAL WITH NO LIPPER INVESTMENT GRADE
RETURN SALES CHARGE/1/ INDEX/2/ INDEX/3/ CPI/4/
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
One Year 12.20% 13.17% 9.64% 1.70%
...............................................................................
Five Years 11.37% 11.62% 7.53% 2.60%
...............................................................................
Lifetime/5/ 11.66% 10.43% 8.84% 3.40%
</TABLE>
/1/ These fund results were calculated according to a formula that is required
for all stock and bond funds.
/2/ The Lipper High Current Yield Bond Funds Index represents an equally
weighted performance index adjusted for capital gain distributions and
income dividends of the largest qualifying funds in this objective. This
index is unmanaged and does not reflect sales charges, commissions or
expenses.
/3/ The Salomon Smith Barney Broad Investment-Grade Bond Index represents a
market capitalization-weighted index that includes U.S. Treasury, Government
-sponsored, mortgage, and investment-grade fixed-rate corporates (BBB-/Baa3)
with a maturity of one to ten years. This index is unmanaged and does not
reflect sales charges, commissions or expenses.
/4/ 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.
/5/ The fund began investment operations on February 19, 1988.
AMERICAN HIGH-INCOME TRUST / PROSPECTUS 7
<PAGE>
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- --------------------------------------------------------------------------------
The following chart illustrates the portfolio composition
of the fund as of the end of its fiscal year, September 30,
1998.
<TABLE>
<S> <C> <C>
[PIE CHART APPEARS HERE]
U.S. CORPORATE BONDS 70.6%
.............................................
NON-U.S. CORPORATE BONDS 16.9
.............................................
CASH & EQUIVALENTS 6.2
.............................................
U.S. TREASURIES 1.8
.............................................
NON-U.S. GOVERNMENT BONDS 1.9
.............................................
STOCKS 1.8
.............................................
MORTGAGE- & ASSET-BACKED BONDS 0.8
.............................................
BOND HOLDINGS BY QUALITY CATEGORY
- ---------------------------------
See the Appendix for a description of quality ratings
[PIE CHART APPEARS HERE]
Aaa/AAA 1.8%
.............................................
A/A 0.2
.............................................
Baa/BBB 1.8
.............................................
Ba/BB 19.0
.............................................
B/B 56.8
.............................................
Caa/CCC 12.3
.............................................
CC 0.1
.............................................
</TABLE>
<TABLE>
<CAPTION>
PERCENT OF
TEN LARGEST HOLDINGS BY ISSUER NET ASSETS
------------------------------------------------------------------------------
<S> <C>
NEXTEL 4.0%
..............................................................................
INTEGRATED HEALTH SERVICES 2.5
..............................................................................
FOX/LIBERTY NETWORKS 2.0
..............................................................................
OMNIPOINT 2.0
..............................................................................
CBS 1.7
..............................................................................
FALCON HOLDING 1.7
..............................................................................
CLEARNET COMMUNICATIONS 1.5
..............................................................................
CHANCELLOR MEDIA 1.5
..............................................................................
CONTAINER CORP. OF AMERICA 1.4
..............................................................................
COLT TELECOM 1.4
</TABLE>
Because the fund is actively managed, its holdings will
change from time to time.
8 AMERICAN HIGH-INCOME TRUST / 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
shareholders. However, the fund understands that its key service providers --
including the investment adviser and its affiliates -- are taking steps to
address 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.
AMERICAN HIGH-INCOME TRUST / PROSPECTUS 9
<PAGE>
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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
Institute's Advisory Group on Personal Investing. This policy has also been
incorporated 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.
Counselors 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 Management Company's investment committee). In addition, Capital Research
and Management Company's research professionals may make investment decisions
with respect to a portion of a fund's portfolio. The primary individual
portfolio counselors for American High-Income Trust are listed on the following
page.
10 AMERICAN HIGH-INCOME TRUST / PROSPECTUS
<PAGE>
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
APPROXIMATE
YEARS OF EXPERIENCE AS
AN
INVESTMENT PROFESSIONAL
(INCLUDING
THE LAST FIVE
YEARS)
..........................
YEARS OF EXPERIENCE
PORTFOLIO AS WITH CAPITAL
COUNSELORS PORTFOLIO COUNSELOR RESEARCH AND
FOR AMERICAN FOR AMERICAN HIGH- MANAGEMENT
HIGH- INCOME TRUST COMPANY OR
INCOME TRUST PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES TOTAL YEARS
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ABNER D. President and 1 year 31 years 47 years
GOLDSTINE Director
of the fund.
Senior Vice
President and
Director, Capital
Research and
Management Company
-------------------------------------------------------------------------------
DAVID C. Executive Vice 9 years 11 years 17 years
BARCLAY President
of the fund. Vice
President, Capital
Research and
Management Company
-------------------------------------------------------------------------------
SUSAN M. Vice President of 5 years 9 years 10 years
TOLSON the fund. Senior
Vice President and
Director, Capital
Research
Company*
- --------------------------------------------------------------------------------
* Company affiliated with Capital Research and Management Company.
</TABLE>
AMERICAN HIGH-INCOME TRUST / 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 SERVICE COMPANY SERVICE AREAS
CALL TOLL-FREE FROM ANYWHERE IN THE U.S.
(8 A.M. TO 8 P.M. ET):
800/421-0180
[map of the United States]
<TABLE>
<S> <C> <C> <C>
WESTERN SERVICE WESTERN CENTRAL EAST 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, Indianapolis, Norfolk, Virginia
92822-2205 Texas Indiana 23501-2280
Fax: 714/671-7080 78265-9522 46206-6007 Fax: 757/670-4773
Fax: 210/474-4050 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 AMERICAN HIGH-INCOME TRUST / PROSPECTUS
<PAGE>
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- --------------------------------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
PURCHASE
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may purchase additional shares using
various 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 calculates 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.
AMERICAN HIGH-INCOME TRUST / 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 AMERICAN HIGH-INCOME TRUST / 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 corpo-
rate, 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.
AMERICAN HIGH-INCOME TRUST / 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 declares dividends from its net investment income daily and distri-
butes the accrued dividends to you each month. Capital gains, if any, are usu-
ally distributed in December.
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.
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
16 AMERICAN HIGH-INCOME TRUST / PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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-U.S. partnership and non-U.S.
corporation shareholder accounts.
Please see the statement of additional information, "Welcome to the Family,"
and your tax adviser for further information.
- --------------------------------------------------------------------------------
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 $15.69 $14.86 $14.30 $13.97 $15.18
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 1.30 1.26 1.29 1.33 1.25
................................................................................
Net gains or losses on securities
(both realized and unrealized) (1.60) .83 .59 .39 (.99)
................................................................................
Total from investment operations (.30) 2.09 1.88 1.72 .26
- --------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends (from net
investment income) (1.30) (1.24) (1.32) (1.32) (1.21)
................................................................................
Distributions (from capital gains) (.34) (.02) -- (.07) (.26)
................................................................................
Total distributions (1.64) (1.26) (1.32) (1.39) (1.47)
- --------------------------------------------------------------------------------
Net Asset Value,
End of Period $13.75 $15.69 $14.86 $14.30 $13.97
................................................................................
Total Return/1/ (2.40)% 14.66% 13.68% 13.34% 1.60%
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $2,360 $2,108 $1,547 $1,111 $835
................................................................................
Ratio of expenses to
average net assets .81% .82% .87% .89% .86%
................................................................................
Ratio of net income
to average net assets 8.76% 8.35% 8.90% 9.72% 8.63%
................................................................................
Portfolio turnover rate 54.63% 53.55% 39.74% 29.56% 42.03%
</TABLE>
/1/ Excludes maximum sales charge of 4.75%.
AMERICAN HIGH-INCOME TRUST / PROSPECTUS 17
<PAGE>
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APPENDIX
Moody's Investors Service, Inc. rates the long-term debt securities issued by
various entities in categories ranging from "Aaa" to "C," according to quality
as described below.
"Aaa -- Best quality. These securities carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are pro-
tected by a large, or by an exceptionally stable margin and principal is se-
cure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong posi-
tion of such shares."
"Aa -- High quality by all standards. They are rated lower than the best bond
because margins of protection may not be as large as in Aaa securities, fluctu-
ation of protective elements may be of greater amplitude, or there may be other
elements present which make the long-term risks appear somewhat greater."
"A -- Upper medium grade obligations. These bonds possess many favorable in-
vestment attributes. Factors giving security to principal and interest are con-
sidered adequate, but elements may be present which suggest a susceptibility to
impairment sometime in the future."
"Baa -- Medium grade obligations. Interest payments and principal security ap-
pear adequate for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and, in fact, have speculative
characteristics as well."
"Ba -- Have speculative elements; future cannot be considered as well assured.
The protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Bonds in this class are characterized by uncertainty of position."
"B -- Generally lack characteristics of the desirable investment; assurance of
interest and principal payments or of maintenance of other terms of the con-
tract over any long period of time may be small."
"Caa -- Of poor standing. Issues may be in default or there may be present ele-
ments of danger with respect to principal or interest."
"Ca -- Speculative in a high degree; often in default of having other marked
shortcomings."
18 AMERICAN HIGH-INCOME TRUST / PROSPECTUS
<PAGE>
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"C -- Lowest rated class of bonds; can be regarded as having extremely poor
prospects of ever attaining any real investment standing."
Standard & Poor's rates the long-term debt securities issued by various enti-
ties in categories ranging from "AAA" to "D," according to quality as described
below.
"AAA -- Highest rating. Capacity to pay interest and repay principal is ex-
tremely strong."
"AA -- High grade. Very strong capacity to pay interest and repay principal.
Generally, these bonds differ from AAA issues only in a small degree."
"A -- Have a strong capacity to pay interest and repay principal, although they
are somewhat more susceptible to the adverse effects of change in circumstances
and economic conditions, than debt in higher rated categories."
"BBB -- Regarded as having adequate capacity to pay interest and repay princi-
pal. These bonds normally exhibit adequate protection parameters, but adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal than for debt in higher
rated categories."
"BB, B, CCC, CC, C -- Regarded, on balance, as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with the
terms of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such debt will likely have some qual-
ity and protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions."
"C1 -- Reserved for income bonds on which interest is being paid."
"D -- In default and payment of interest and/or repayment of principal is in
arrears."
AMERICAN HIGH-INCOME TRUST / PROSPECTUS 19
<PAGE>
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NOTES
20 AMERICAN HIGH-INCOME TRUST / PROSPECTUS
<PAGE>
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NOTES
AMERICAN HIGH-INCOME TRUST / 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. 811-5364 Printed on recycled paper
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