The American Funds Group(r)
American High-Income Trust
The Benefits of Consistency
Annual Report for the year ended September 30, 2000
[photograph of U.S. coins]
AMERICAN HIGH-INCOME TRUST(sm) is one of the 29 American Funds, the nation's
third-largest mutual fund family. For nearly seven decades, Capital Research
and Management Company, the American Funds adviser, has invested with a
long-term focus based on thorough research and attention to risk.
AMERICAN HIGH-INCOME TRUST 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.
RESULTS AT A GLANCE
Total returns for periods ended September 30, 2000, with all distributions
reinvested.
<TABLE>
<CAPTION>
One Five years Ten years
year annualized annualized
RETURNS
<S> <C> <C> <C>
American High-Income Trust +5.29% +7.69% +11.29%
Credit Suisse First Boston High Yield +1.92 +6.20 +11.77
Index
Salomon Smith Barney Broad Investment- +6.92 +6.48 +8.09
Grade Bond Index
Lipper High Yield Bond Fund Index <UNDEF>0.06 +6.01 +10.94
</TABLE>
30-DAY RATES (as of October 31, 2000)
<TABLE>
<CAPTION>
<S> <C>
Yield based on Securities and Exchange Commission formula 10.30%
Distribution rate based on maximum offering price 9.54
Distribution rate based on net asset value 9.92
</TABLE>
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.
For the 10 years ended September 30, 2000, American High-Income Trust ranked
11th in total return among the 53 high current yield funds in existence
throughout the period, according to Lipper Inc. For the five years ended
September 30, it ranked 14th of 126, and for the 12 months ended September 30,
the fund ranked 36th of 350. Lipper rankings do not reflect the effects of
sales charges.
Fund results in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Please see page 2
for Class A and B share results with relevant sales charges deducted.
FIGURES SHOWN ARE PAST RESULTS AND ARE NOT PREDICTIVE OF FUTURE RESULTS. SHARE
PRICE AND RETURN WILL VARY, SO YOU MAY LOSE MONEY. INVESTING FOR SHORT PERIODS
MAKES LOSSES MORE LIKELY. INVESTMENTS ARE NOT FDIC-INSURED, NOR ARE THEY
DEPOSITS OF OR GUARANTEED BY A BANK OR ANY OTHER ENTITY. High-yield bonds are
subject to greater fluctuations in value and risk of loss of income and
principal. Investing outside the United States involves additional risks, such
as currency fluctuations, political instability, differing securities
regulations and periods of illiquidity, which are detailed in the fund's
prospectus.
PLEASE SEE THE BACK COVER FOR IMPORTANT INFORMATION ABOUT CLASS A AND B SHARES.
FELLOW SHAREHOLDERS:
AMERICAN HIGH-INCOME TRUST'S fiscal year ended September 30, 2000, was a
difficult period in the high-yield bond market. Global competition increased
pressure on corporate profits, interest rates rose and stock market prices
generally slumped.
In that environment, the fund's shareholders received a steady stream of
dividends. Those who reinvested their dividends totaling $1.29 a share had an
income return of 10.0% for the 12 months, partially offset by a decline in the
fund's share price that resulted in a total return of 5.3%. Shareholders who
took dividends in cash had an income return of 9.5% and the price of their
shares declined 4.4%.
American High-Income Trust outpaced the majority of its peers, as represented
by the Lipper High Yield Bond Fund Index, which was down 0.1%. The fund also
surpassed the unmanaged Credit Suisse First Boston High Yield Index, which rose
1.9%. The unmanaged Salomon Smith Barney Broad Investment-Grade Bond Index,
which measures higher grade bonds, rose 6.9%.
While we are pleased that the fund had a positive total return, this year
serves as another reminder that there are always risks in investing. Indeed,
the past two years have been very difficult for many issuers in the high-yield
bond market. These bonds are affected both by the strength of the individual
corporate issuer and by broad economic trends. In the past year, those trends
have included higher interest rates as economic expansion brought fears of
inflation. Beyond that, concerns over the high valuations of many equity
securities and evidence that growth in corporate profits may not meet
expectations led to a general decline in stock prices and a major correction in
some sectors.
Intensified global competition affected the profit outlook of a number of
industries in the fund's portfolio including retail, auto parts and,
particularly, diversified telecommunications. Many cable and fixed-line
telephone companies have cut prices to attract and keep customers. In Europe,
for example, telephone companies that once enjoyed monopolies must now compete
for customers; some have slashed long-distance rates by as much as 70%. Despite
recent setbacks, we maintain a large holding in the telecommunications sector
because demand for services remains strong and we believe there are many good
long-term opportunities for well-managed companies.
The pressure on companies in many industries was exacerbated by the U.S. stock
market's poor showing during the first nine months of this calendar year. With
the stock market in a slump, companies that raise money in both the equity and
high-yield markets find it difficult to sell shares and more expensive to sell
bonds.
In this uncertain environment, we believe the best way to achieve long-term
success is to look for well-managed companies that are building strong,
competitive businesses. While we naturally study factors such as the outlook
for interest rates, commodity prices and global competition, our main emphasis
is on fundamental research to identify companies we believe can withstand these
pressures, build their businesses and achieve the kind of financial success
that leads to their credit standing being upgraded. Over the long term, that
offers the fund's shareholders the opportunity for price appreciation along
with a substantial flow of income.
We will continue to build American High-Income Trust's portfolio the way we
always have - one company at a time. We believe this remains a sound approach
for long-term investment success.
Cordially,
/s/ Paul G. Haaga, Jr.
Paul G. Haaga, Jr.
Chairman of the Board
/s/ David C. Barclay
David C. Barclay
President
November 17, 2000
[begin mountain chart]
THE VALUE OF A LONG-TERM PERSPECTIVE
Here's how a $10,000 investment in American High-Income Trust grew between
February 19, 1988, when the fund began operations, and September 30, 2000, the
end of its latest fiscal year. As you can see, that $10,000 grew to $31,298
with all distributions reinvested.
<TABLE>
<CAPTION>
Year American High- Credit Suisse Lipper High Salomon Smith Consumer Original
Ended Income Trust with First Boston Yield Bond Barney Broad Price Index Investment
dividends High Yield Fund Index Investment-Grade (inflation)
reinvested Index Index
<S> <C> <C> <C> <C> <C> <C>
1988(4) $10,182 $10,446 $10,475 $10,222 $10,328 $10,000
1989 $11,193 $11,026 $10,935 $11,367 $10,776 $10,000
1990 $10,742 $10,046 $9,570 $12,237 $11,440 $10,000
1991 $13,871 $13,757 $12,290 $14,198 $11,828 $10,000
1992 $16,379 $16,572 $15,132 $15,999 $12,181 $10,000
1993 $18,768 $19,171 $17,473 $17,627 $12,509 $10,000
1994 $19,070 $19,831 $17,899 $17,063 $12,879 $10,000
1995 $21,613 $22,617 $20,178 $19,461 $13,207 $10,000
1996 $24,570 $25,053 $22,644 $20,423 $13,603 $10,000
1997 $28,172 $28,992 $26,120 $22,406 $13,897 $10,000
1998 $27,496 $28,841 $25,688 $24,975 $14,103 $10,000
1999 $29,726 $29,979 $27,037 $24,908 $14,474 $10,000
2000 $31,298 $30,555 $27,021 $26,632 $14,974 $10,000
</TABLE>
Year ended September 30
$31,298(1,2)
American High-Income Trust
with dividends reinvested
$30,555(1)
Credit Suisse First Boston
High Yield Index
$27,021(1)
Lipper High Yield Bond Fund Index
$26,632(1)
Salomon Smith Barney
Broad Investment-
Grade Index
$14,974(3)
Consumer Price Index
(inflation)
$10,000
original investment
(1) All results calculated with dividends reinvested or interest compounded.
The Credit Suisse First Boston and Salomon Smith Barney indexes are
unmanaged and do not reflect sales charges, commissions or expenses. The
Lipper index is at net asset value.
(2) This figure, unlike those shown earlier in this report, reflects payment of
the maximum sales charge of 3.75% on the $10,000 investment. Thus, the net
amount invested was $9,625. The maximum sales charge was 4.75% prior to
January 10, 2000. As outlined in the prospectus, the sales charge is
reduced for larger investments. No adjustment has been made for income or
capital gain taxes.
(3) Computed from data supplied by the U.S. Department of Labor, Bureau of
Labor Statistics.
(4) For the period February 19 through September 30, 1988.
Past results are not predictive of future results.
[end mountain chart]
Fund results in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Here are returns on
a $1,000 investment with all distributions reinvested for periods ended
September 30, 2000:
<TABLE>
<CAPTION>
10 years 5 years 1 year
<S> <C> <C> <C>
CLASS A SHARES
reflecting 3.75% maximum sales charge
Total return +180.42% +39.35% +1.32%
Average annual compound return +10.86 +6.86 -
CLASS B SHARES from March 15, 2000, when B shares first became available
Total returns
reflecting 5% maximum contingent deferred - - -4.87*
sales charge (CDSC) (payable only if shares
are sold)
not reflecting CDSC - - -0.10*
</TABLE>
*Reflects total return for the period March 15, 2000, through September 30,
2000.
THE BENEFITS OF CONSISTENCY
SINCE ITS INCEPTION more than a decade ago, American High-Income Trust has
consistently delivered high current income to shareholders through a variety of
economic environments. Investments in the fund have also gained in value, with
no more volatility than its peers over its lifetime.
At first glance, it may seem the best way to accomplish such consistency is
simply to buy the bonds that offer the highest rates. But the highest paying
bonds are frequently the riskiest. A portfolio that focuses strictly on them
may deliver high income for a time, but maintaining that high yield will be
difficult. Instead, American High-Income Trust has achieved its results by
balancing attention to yield with a view to long-term values. In the next few
pages we'll look at how the fund's research process and the resulting portfolio
blend of old-line industries and cutting-edge companies have helped the fund
achieve its objectives.
PUTTING THE FUTURE FIRST
Many factors affect the prices of high-yield bonds. They react to changes in
interest rates, fluctuations in the stock market and industry cycles. But the
most important influence on the long-term value of a bond is the health of the
company that issued it. That's why American High-Income Trust's investment
professionals research each company thoroughly before buying its bonds. The
research process is often long and complex, but it always starts with a simple
question: Where will this company be in five years?
[begin sidebar]
[photograph of Susan Tolson]
Susan Tolson
Portfolio Counselor
"We look at companies and industries over a full business cycle, usually four
or five years, to see how they will perform under different circumstances."
[end sidebar]
[begin bar chart]
<TABLE>
CUMULATIVE CAPITAL INVEST IN
WIRELESS COMMUNICATIONS INDUSTRY ($BIL)
Analysts must first understand the industry.
<S> <C>
Date Cumulative Capital
Invested ($000s)
Dec-87 2,234,635
Jun-88 2,589,589
Dec-88 3,274,105
Jun-89 3,675,473
Dec-89 4,480,142
Jun-90 5,211,765
Dec-90 6,281,596
Jun-91 7,429,739
Dec-91 8,671,544
Jun-92 9,276,139
Dec-92 11,262,070
Jun-93 12,775,967
Dec-93 13,956,366
Jun-94 16,107,921
Dec-94 18,938,678
Jun-95 21,721,711
Dec-95 24,080,467
Jun-96 26,707,046
Dec-96 32,573,522
Jun-97 37,454,294
Dec-97 46,057,911
Jun-98 50,178,812
Dec-98 60,542,774
Jun-99 66,782,827
Dec-99 71,264,865
</TABLE>
Source: Cellular Telecommunications Industry Association
[end bar chart]
WIRELESS COMMUNICATIONS
[begin sidebar]
[photograph of Jennifer Hinman]
Jennifer Hinman
Analyst
"I want to avoid fad businesses that are popular for a few years, but then
disappear."
[end sidebar]
"We look at companies and industries over a full business cycle, usually four
or five years or more, to see how they will perform under different
circumstances," says portfolio counselor Susan Tolson. This long-term view
shows in the fund's holdings; it is not unusual to see companies that have been
in the portfolio for many years. "We've held Container Corporation of America
since 1988," Tolson says. "Chancellor Media is another long-term example. We've
held that since 1994."
THE INDUSTRY IS JOB ONE
American High-Income Trust analyst Jennifer Hinman starts her research into a
company by studying its industry. "I ask myself, $Will anyone care if this
industry goes away?' Utilities are a good example. Demand may be cyclical, but
people are always going to need electricity. I want to avoid fad businesses
that are popular for a few years, but then disappear."
Hinman's research helps her anticipate how industry changes can affect the
companies within it. Deregulation of the electric power industry is a prime
example. Many power companies are adjusting to free market competition. "I try
to understand what the industry will look like after the changes and which
companies are going to do well in the new environment," Hinman says. "If you
know the companies and understand their managements, you have a better chance
of making good decisions."
[begin bar chart]
INFLATION
Consumer Price Index
Annual Percent Change*
*not seasonally adjusted
<TABLE>
<S> <C> <C>
Year Month CPI Value
1988 3 116.5
1988 6 118.0
1988 9 119.8
1988 12 120.5
1989 3 122.3
1989 6 124.1
1989 9 125.0
1989 12 126.1
1990 3 128.7
1990 6 129.9
1990 9 132.7
1990 12 133.8
1991 3 135.0
1991 6 136.0
1991 9 137.2
1991 12 137.9
1992 3 139.3
1992 6 140.2
1992 9 141.3
1992 12 141.9
1993 3 143.6
1993 6 144.4
1993 9 145.1
1993 12 145.8
1994 3 147.2
1994 6 148.0
1994 9 149.4
1994 12 149.7
1995 3 151.4
1995 6 152.5
1995 9 153.2
1995 12 153.5
1996 3 155.7
1996 6 156.7
1996 9 157.8
1996 12 158.6
1997 3 160.0
1997 6 160.3
1997 9 161.2
1997 12 161.3
1998 3 162.2
1998 6 163.0
1998 9 163.6
1998 12 163.9
1999 3 165.0
1999 6 166.2
1999 9 167.9
1999 12 168.3
2000 3 171.1
2000 6 172.3
</TABLE>
Source: U.S. Department of Labor, Bureau of Labor Statistics
Economic trends, such as inflation, influence bond prices.
[end bar chart]
To learn about a company, the fund's analysts meet its managers, suppliers and
competitors. But, most importantly, they visit the company. "I like to see
managers on their home turf. That follow-up research really makes a
difference," Hinman says. "If they have told you they have great inventory
control and you've just walked through the factory and seen stuff piling up in
the aisles, it makes you wonder." Often, Hinman will buy a small holding of a
company at first, then add more as she further studies the company and its
management.
The goal of Hinman's research is to find bonds that will produce high overall
returns over the long run. "As a bond investor, I'm concerned first about the
downside of any purchase. While I hope the bonds will appreciate in price, I
look at the upside potential second. If we can avoid the downside, we believe
we can deliver solid returns for our shareholders over time."
RIDING THE CYCLES
Most companies and industries go through cycles. For the investment
professionals of American High-Income Trust, knowing how a company fares over a
full cycle can be critical to knowing when to buy, sell or hold onto its bonds.
Many investors understand the impact an interest rate cycle has on bonds: As
rates rise, bond prices fall, and vice versa. The high-yield bond market as a
whole is no different. But within the market, individual bonds will react in
different ways.
[begin sidebar]
[photograph of David Barclay]
David Barclay
Portfolio Counselor
"We always look at a company's access to capital and the cost of capital, both
of which can have a big impact on a company's prospects."
[end sidebar]
[begin line chart]
OIL PRICES
Per-Barrel Price* of West Texas Intermediate Crude
*monthly, not seasonally adjusted rates
<TABLE>
<S> <C> <C>
Year Month Value
1988 3 16.2
1988 6 16.5
1988 9 14.5
1988 12 16.3
1989 3 19.4
1989 6 20
1989 9 19.6
1989 12 21.1
1990 3 20.4
1990 6 16.9
1990 9 33.7
1990 12 27.3
1991 3 19.9
1991 6 20.2
1991 9 21.9
1991 12 19.5
1992 3 18.9
1992 6 22.4
1992 9 21.9
1992 12 19.4
1993 3 20.3
1993 6 19.1
1993 9 17.5
1993 12 14.5
1994 3 14.7
1994 6 19.1
1994 9 17.5
1994 12 17.2
1995 3 18.6
1995 6 18.4
1995 9 18.2
1995 12 19
1996 3 21.4
1996 6 20.4
1996 9 24
1996 12 25.4
1997 3 21
1997 6 19.2
1997 9 19.8
1997 12 18.3
1998 3 15
1998 6 13.7
1998 9 14.9
1998 12 11.3
1999 3 14.7
1999 6 17.9
1999 9 23.9
1999 12 26.1
2000 3 29.9
2000 6 31.9
</TABLE>
Cyclical commodity prices can bring opportunity.
Source: Federal Reserve Bank of Dallas
[end line chart]
[begin sidebar]
[photograph of Richard Lewis]
Richard Lewis
Analyst
"In terms of finding what's attractive, it has to be company by company."
[end sidebar]
"We always look at a company's access to capital and the cost of capital, both
of which can have a big impact on a company's prospects," says David Barclay, a
portfolio counselor and president of American High-Income Trust. Rising
interest rates can undermine the long-term prospects of a rapidly growing
company that must continually raise capital to finance expansion. At the same
time, a well-managed company that is appropriately financed may weather the
cycle and possibly add market share. Research provides insight into which
companies have the potential to survive and prosper over the long term.
"Particularly when an industry is going through a down cycle, you have to focus
on the individual companies. In terms of finding what's attractive, it has to
be company by company," says Richard Lewis, an oil industry analyst for
American High-Income Trust.
The oil industry can be very volatile. Recently, when the industry was
struggling and near its low point, Lewis was buying bonds in companies that his
research showed had a proven ability to weather a prolonged down cycle.
"I studied one company back to the 1980s. It was important for me to get a
sense of the legacy of the company and how it was shaped. You want to look back
at how the company did during the worst of a previous cycle to help you get an
idea of how it will do in the future."
[begin line chart]
GROSS DOMESTIC PRODUCT
GDP Percent Change from Preceding Period, by Quarter*
*seasonally adjusted rates
<TABLE>
<S> <C> <C>
CurrenChaine
1989
I......... 9.5 5.0
II......... 6.3 2.2
III......... 4.9 1.9
IV......... 4.5 1.4
1990
I......... 9.8 5.1
II......... 5.7 0.9
III......... 3.1 -0.7
IV......... 0.2 -3.2
1991
I......... 2.7 -2.0
II......... 5.2 2.3
III......... 3.7 1.0
IV......... 4.4 2.2
1992
I......... 6.9 3.8
II......... 6.2 3.8
III......... 4.5 3.1
IV......... 8.0 5.4
1993
I......... 3.2 -0.1
II......... 4.7 2.5
III......... 3.6 1.8
IV......... 8.7 6.2
1994
I......... 5.5 3.4
II......... 7.6 5.7
III......... 4.7 2.2
IV......... 7.0 5.0
1995
I......... 4.5 1.5
II......... 2.5 0.8
III......... 5.0 3.1
IV......... 5.3 3.2
1996
I......... 5.4 2.9
II......... 8.3 6.8
III......... 4.0 2.0
IV......... 6.4 4.6
1997
I......... 7.3 4.4
II......... 7.9 5.9
III......... 5.5 4.2
IV......... 4.2 2.8
1998
I......... 7.6 6.5
II......... 4.1 2.9
III......... 5.0 3.4
IV......... 6.8 5.6
1999
I......... 5.9 3.5
II......... 3.9 2.5
III......... 6.7 5.7
IV......... 9.7 8.3
2000
I......... 8.3 4.8
II......... 7.8 5.2
</TABLE>
The health of the economy influences bond prices.
Source: Bureau of Economic Analysis, U.S. Department of Commerce
[end line chart]
OPPORTUNITIES IN NEW INDUSTRIES
It's not always possible or necessary to trace a company back a decade or two.
Often new industries can offer investors good opportunities. Indeed, the
largest industry in the fund's portfolio, wireless telecommunications, is still
relatively young. As new industries grow and mature, bonds of the successful
companies typically rise in value as their long-term outlook becomes less
risky.
With new industries and high-tech products such as cellular phones, it's easy
to get caught up in the excitement surrounding new products and ideas, says
Marc Linden, one of the fund's telecommunications analysts. "A lot of investors
get blinded by the new technology and they focus on that instead of what a
customer is willing to pay for it. We look at the basic economics of the
business. That's hard and requires a lot of patience. But that far-sighted
focus can often be the key to a solid long-term total return."
Over its 12-year lifetime, American High-Income Trust has produced an average
annual compound return of 9.8% for investors who reinvested their
distributions. While maintaining a high current income is the fund's primary
goal, the investment professionals also seek bonds that will hold their value
and perhaps even appreciate over time. Accomplishing this requires two
important commitments: to rely on research and take a long-term view.
[begin sidebar]
[photograph of Marc Linden]
Marc Linden
Analyst
"Far-sighted focus can often be the key to producing a solid long-term total
return."
[end sidebar]
WHAT MAKES THE AMERICAN FUNDS DIFFERENT?
As a shareholder in American High-Income Trust, you are also a member of the
American Funds, the nation's third-largest mutual fund family. You won't find
us advertised, yet thousands of financial advisers recommend the American Funds
for their clients' serious money - money set aside for
education, a home, retirement and other important dreams.
What the 29 funds in our group have in common is a commitment to your best
interests and the proven approach of our investment adviser, Capital Research
and Management Company. In business since 1931, Capital's calling cards
include:
- A LONG-TERM, VALUE-ORIENTED APPROACH: Rather than follow short-term fads, we
rely on our own intensive research to find well-managed companies with
reasonably priced securities and solid, long-term potential. Despite our size,
we offer relatively few funds compared with many large fund families, allowing
us to maintain a careful focus on our objectives and enabling you to benefit
from economies of scale.
- A GLOBAL PERSPECTIVE: We opened our first overseas office in 1962, well
before most mutual funds began investing internationally. Today, the American
Funds draw on one of the industry's most globally integrated research networks.
Capital Research spends substantial resources getting to know companies and
industries around the world.
- A MULTIPLE PORTFOLIO COUNSELOR SYSTEM: More than 40 years ago, we developed a
unique strategy for managing investments that blends teamwork with individual
accountability. Every American Fund is divided among a number of portfolio
counselors, each of whom manages his or her portion independently, within each
fund's objectives; in most cases, research analysts manage a portion as well.
Over time, this method has contributed to consistency of results and continuity
of management.
- EXPERIENCED INVESTMENT PROFESSIONALS: More than 75% of the portfolio
counselors who serve the American Funds were in the investment business before
the sharp stock market decline of October 1987. Long tenure and experience
through a variety of market conditions mean we aren't "practicing" with your
money.
- A COMMITMENT TO LOW OPERATING EXPENSES: You can't control market returns, but
you can control what you invest in and how much you pay to own it. American
Funds provide exceptional value for shareholders, with operating expenses that
are among the lowest in the mutual fund industry. Our portfolio turnover rates
are low as well, keeping transaction costs and tax consequences contained.
A PORTFOLIO FOR EVERY INVESTOR
Most financial advisers suggest that investors balance their portfolios by
investing across several types of investments. Which mix is right for you? That
depends on a number of things - including your risk tolerance, investment time
horizon and financial goals. American Funds offers 29 funds with an array of
investment objectives to help you and your financial adviser build a portfolio
specifically tailored to your needs.
GROWTH FUNDS
Emphasis on long-term growth through stocks
- AMCAP Fund(r)
- EuroPacific Growth Fund(r)
- The Growth Fund of America(r)
- The New Economy Fund(r)
- New Perspective Fund(r)
- New World Fund(sm)
- SMALLCAP World Fund(r)
GROWTH-AND-INCOME FUNDS
Emphasis on long-term growth and dividends through stocks
- American Mutual Fund(r)
- Capital World Growth and Income Fund(sm)
- Fundamental Investors(sm)
- The Investment Company of America(r)
- Washington Mutual Investors Fund(sm)
EQUITY-INCOME FUNDS
Emphasis on above-average income and growth through stocks and/or bonds
- Capital Income Builder(r)
- The Income Fund of America(r)
BALANCED FUND
Emphasis on long-term growth and current income through stocks and bonds
- American Balanced Fund(r)
INCOME FUNDS
Emphasis on current income through bonds
- American High-Income Trust(sm)
- The Bond Fund of America(sm)
- Capital World Bond Fund(r)
- Intermediate Bond Fund of America(r)
- U.S. Government Securities Fund(sm)
TAX-EXEMPT INCOME FUNDS
Emphasis on tax-free current income through municipal bonds
- American High-Income Municipal Bond Fund(r)
- Limited Term Tax-Exempt Bond Fund of America(sm)
- The Tax-Exempt Bond Fund of America(r)
STATE-SPECIFIC TAX-EXEMPT FUNDS:
- The Tax-Exempt Fund of California(r)
- The Tax-Exempt Fund of Maryland(r)
- The Tax-Exempt Fund of Virginia(r)
MONEY MARKET FUNDS
Seeking stable monthly income through money market instruments
- The Cash Management Trust of America(r)
- The Tax-Exempt Money Fund of America (sm)
- The U.S. Treasury Money Fund of America (sm)
[begin sidebar]
FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE AMERICAN FUNDS, INCLUDING
CHARGES AND EXPENSES, PLEASE OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISER,
DOWNLOAD ONE FROM OUR WEB SITE AT WWW.AMERICANFUNDS.COM, OR PHONE THE FUNDS'
TRANSFER AGENT, AMERICAN FUNDS SERVICE COMPANY, AT 800/421-0180.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. FOR MORE
INFORMATION, ASK YOUR FINANCIAL ADVISER FOR A COPY OF OUR BROCHURE A PORTFOLIO
FOR EVERY INVESTOR.
WE ALSO OFFER A FULL LINE OF RETIREMENT PLANS AND VARIABLE ANNUITIES.
[end sidebar]
<TABLE>
<S> <C>
American High-Income Trust
Pie Chart
September 30, 2000
U.S. Corporate Bonds 71%
Non-U.S. Corporate Bonds 18%
Non-U.S. Government Bonds 2%
Stocks 2%
U.S. Treasuries 1%
Cash & Equivalents 6%
</TABLE>
<TABLE>
<S> <C>
Percent of
Ten Largest Holdings by Issuer Net Assets
Nextel Communications 5.69
VoiceStream Wireless 4.91
Clearnet Communications 2.52
Crown Castle International 2.49
NTL 2.10
Charter Communications Holdings 2.02
Fox/Liberty Networks 1.63
Container Corp. of America 1.61
Premcor 1.52
Allied Waste North America 1.44
<table/>
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
American High-Income Trust
Investment Portfolio,
September 30, 2000
Shares or
Principal Market Percent
Amount Value of Net
Bonds, Notes & Equity Securities (000) (000) Assets
Wireless Telecommunication
Services - 21.80%
Nextel Communications, Inc.:
0%/9.75% 2007(1) $ 10,000 $7,800
0%/10.65% 2007(1) 18,750 15,375
0%/9.95% 2008(1) 24,675 18,753
12.00% 2008 3,500 3,745
Series D, 13.00% exchangeable 18,498 shares 19,830
preferred, redeemable 2009(2),(3)
Series E, 11.25% exchangeable 27,719 27,165
preferred, redeemable 2010(2),(3)
Nextel Partners, Inc.:
0%/14.00% 2009(1) $ 27,882 19,517
11.00% 2010(4) 10,750 10,831
Nextel International, Inc.:
0%/12.125% 2008(1) 29,250 18,939
12.75% 2010(4) 2,000 1,965
McCaw International, 21,125 16,266 5.69%
Ltd. 0%/13.00% 2007(1)
VoiceStream Wireless Corp.:
10.375% 2009 62,350 67,026
0%/11.875% 2009(1) 58,775 42,318
Omnipoint Corp.:
11.50% 2009(4) 13,050 14,485
7.00% convertible preferred 85,000 shares 14,280 4.91
Clearnet Communications Inc.:(1)
0%/11.75% 2007 C$ 70,125 41,009
0%/10.40% 2008 50,325 28,552
0%/10.125% 2009 $ 1,600 1,272 2.52
Crown Castle International Corp.:
0%/10.625% 2007(1) 21,250 16,575
12.75% senior exchangeable 21,407 shares 21,836
preferred 2010(2),(3)
0%/10.375% 2011(1) $ 21,500 13,867
10.75% 2011 8,750 8,925
0%/11.25% 2011(1) 13,500 8,910 2.49
PageMart Wireless, Inc.:
15.00% 2005 15,250 14,373
0%/11.25% 2008(1) 61,010 24,404 1.38
Dobson Communications Corp. 12.25% 31,428 shares 28,128 1.00
exchangeable preferred,
redeemable 2008(2),(3)
Leap Wireless International, Inc.:
12.50% 2010 $ 9,500 7,172
0%/14.50% 2010(1) 66,750 20,526 .98
Centennial Cellular Corp. 10.75% 2008 26,250 25,594 .91
TeleCorp PCS Inc.:
0%/11.625% 2009(1) 4,500 3,037
10.625% 2010(4) 13,000 13,130 .57
PTC International Finance BV 19,100 13,418 .48
0%/10.75% 2007(1)
Comunicacion Celular SA 16,000 12,520 .44
0%/14.125% 2005(1)
Dobson/Sygnet Communications Co. 5,500 5,527 .20
12.25% 2008
Cellco Finance NV:
12.75% 2005 3,250 3,226
15.00% 2005 1,590 1,642 .17
Teletrac, Inc.:(2),(4),(5)
9.00% 2004 1,626 1,301
12.00% 2004 98 78 .05
Nuevo Grupo Iusacell, SA de CV 380 404 .01
14.25% 2006
613,721 21.80
Media - 13.71%
Charter Communications Holdings, LLC:
8.25% 2007 6,000 5,430
10.00% 2009 6,000 5,880
0%/11.75% 2010(1) 7,500 4,350
0%/9.92% 2011(1) 61,000 35,380
Avalon Cable Holdings LLC 8,625 5,800 2.02
0%/11.875% 2008(1)
Fox/Liberty Networks, LLC,
FLN Finance, Inc.:
8.875% 2007 17,000 17,255
0%/9.75% 2007(1) 34,000 28,560 1.63
American Media Operations, Inc. 25,680 25,423 .90
10.25% 2009
Adelphia Communications Corp.:
9.25% 2002 6,000 5,955
10.50% 2004 8,500 8,489
Series B, 13.00% 2009(3) 20,000 shares 1,980
Century Communications Corp. 0% 2003 $ 4,565 3,481 .71
Radio One, Inc.:
12.00% 2004 4,750 4,999
6.50% TIDES convertible 24,350 shares 14,549 .69
preferred 2005(3),(4)
Chancellor Media Corp. of Los Angeles:
Series B, 8.75% 2007 $ 6,450 6,643
8.00% 2008 8,500 8,638
Capstar Broadcasting Partners, Inc. 2,514 2,891 .65
12.00% 2009(2)
Cumulus Media Inc.:
10.375% 2008 8,250 7,012
13.75% preferred 2009(2) 12,159 shares 9,241 .58
Telemundo Holdings, Inc., Series B, $ 22,950 16,065 .57
0%/11.50% 2008(1)
TransWestern Publishing Co. LLC 16,050 15,970 .57
9.625% 2007
Young Broadcasting Inc.:
10.125% 2005 9,115 9,206
9.00% 2006 4,250 4,101
Series B, 8.75% 2007 2,000 1,897 .54
Sun Media Corp. 9.50% 2007 15,025 15,006 .53
ACME Intermediate Holdings, LLC, 12,689 8,755
Series B, 0%/12.00% 2005(1)
ACME Television, LLC, Series B, 5,750 5,470 .50
0%/10.875% 2004(1)
Gray Communications Systems, Inc. 13,870 13,905 .49
10.625% 2006
Lenfest Communications, Inc.:
8.375% 2005 5,000 5,238
7.625% 2008 6,750 6,706 .42
Antenna TV SA 9.00% 2007 12,450 11,392 .40
Citadel Broadcasting Co.:
10.25% 2007 3,000 3,120
Series B, 13.25% exchangeable 53,061 shares 5,837 .32
preferred, redeemable 2009(2)
Globo Comunicacoes E Participacoes SA:
10.50% 2006 $ 6,230 5,576
10.625% 2008 3,830 3,342 .32
Big City Radio, Inc. 0%/11.25% 2005(1) 14,750 8,112 .29
Fox Family Worldwide, Inc.:
9.25% 2007 4,000 3,830
0%/10.25% 2007(1) 4,000 2,910 .24
Polestar Corp. PLC 10.50% 2008 pound 5,750 6,365 .23
Cablevision Industries Corp. $ 6,000 6,150 .22
9.875% 2013
STC Broadcasting, Inc. 11.00% 2007 4,000 3,940 .14
RBS Participacoes SA 11.00% 2007 4,500 3,814 .14
TeleWest PLC 9.625% 2006 4,000 3,720 .13
Muzak Holdings LLC 0%/13.00% 2010(1) 6,500 3,672 .13
Multicanal Participacoes SA, 2,900 2,994 .11
Series B, 12.625% 2004
Carmike Cinemas, Inc., Series B, 8,450 2,366 .08
9.375% 2009(6)
TVN Entertainment Corp., Series B, 11,750 2,350 .08
14.00% 2008
V2 Music Holdings PLC 6.50% 2012(5) 7,873 2,126 .08
385,891 13.71
Hotels, Restaurants & Leisure - 8.88%
Boyd Gaming Corp.:
9.25% 2003 25,000 24,719
9.50% 2007 10,860 10,249 1.24
Premier Parks Inc.:
9.25% 2006 5,375 5,005
9.75% 2007 17,625 16,792
0%/10.00% 2008(1) 10,500 7,114
Six Flags Entertainment Corp. 2,250 2,182 1.10
8.875% 2006
Horseshoe Gaming Holding Corp.,
Series B:
9.375% 2007 1,690 1,677
8.625% 2009 26,000 25,480 .97
William Hill Finance PLC 10.625% 2008 pound 15,950 24,006 .85
Jupiters Ltd. 8.50% 2006 $ 19,180 18,461 .66
MGM Mirage, Inc. 8.50% 2010 9,000 8,993
Mirage Resorts, Inc.:
6.625% 2005 1,950 1,849
6.75% 2007 5,000 4,560
6.75% 2008 2,250 2,040 .62
International Game Technology:
7.875% 2004 11,750 11,427
8.375% 2009 6,000 5,880 .62
KSL Recreation Group, Inc. 10.25% 2007 17,005 16,665 .59
Harrah's Operating Co., Inc. 13,725 13,176 .47
7.875% 2005
Florida Panthers Holdings, Inc. 11,000 10,615 .38
9.875% 2009
Station Casinos, Inc. 9.875% 2010(4) 9,500 9,571 .34
Hard Rock Hotel, Inc., Series B, 7,219 6,741 .24
9.25% 2005
Sun International Hotels Ltd., Sun
International North America, Inc.:
8.625% 2007 2,750 2,544
9.00% 2007 4,250 4,016 .23
Hollywood Casino Corp. 11.25% 2007 4,940 5,150 .18
AMF Bowling Worldwide, Inc.:
10.875% 2006(6) 4,250 967
0%/12.25% 2006(1),(6) 12,043 2,288
0% convertible debentures 2018(4),(6) 10,508 105 .12
CKE Restaurants, Inc. 9.125% 2009 4,620 2,841 .10
Eldorado Resorts LLC 10.50% 2006 2,500 2,494 .09
Royal Caribbean Cruises Ltd.:
7.00% 2007 1,400 1,233
6.75% 2008 1,300 1,121 .08
249,961 8.88
Diversified Telecommunication
Services - 8.54%
Comcast UK Cable Partners Ltd. 28,000 26,460
0%/11.20% 2007(1)
NTL Inc.:
12.75% 2005 1,000 1,022
0%/9.75% 2008(1) 10,000 6,200
0%/10.75% 2008(1) pound 14,750 13,075
NTL Communications Corp. $ 8,000 7,830
11.875% 2010(4)
Diamond Holdings PLC 9.125% 2008 5,000 4,550 2.10
COLT Telecom Group PLC:
0%/12.00% 2006(1) 26,250 23,887
8.875% 2007 DM 19,000 8,235
7.625% 2008 9,250 3,758 1.28
Allegiance Telecom, Inc.:
0%/11.75% 2008(1) $ 28,000 18,760
12.875% 2008 6,925 6,856 .91
VersaTel Telecom International NV:
4.00% convertible 2005 euro 14,825 10,571
11.875% 2009 5,000 3,863
11.25% 2010(7) 6,750 5,126 .70
NEXTLINK Communications, Inc.:
9.625% 2007 $ 4,000 3,560
0%/12.125% 2009(1) 11,975 6,407
0%/12.25% 2009(1) 11,750 6,639
14.00% preferred 2009(2),(3) 29,748 shares 1,354 .64
CFW Communications Co., units, $ 19,000 17,195 .61
13.00% 2010(4)
Viatel, Inc.:
11.15% 2008 DM 2,500 553
11.25% 2008 $ 8,075 4,118
0%/12.40% 2008(1) DM 21,500 2,669
0%/12.50% 2008(1) $ 31,875 7,969
11.50% 2009 875 437 .56
KMC Telecom Holdings, Inc. 22,500 7,875 .28
0%/12.50% 2008(1)
Maxcom Telecomunicaciones, SA de CV 12,100 6,897 .24
13.75% 2007
IXC Communications, Inc., 12.50% 5,820 shares 5,936 .21
exchangeable preferred,
redeemable 2009(3)
Mpower Holding Corp. 13.00% 2010 $ 9,000 5,580 .20
Level 3 Communications, Inc. euro 6,250 5,077 .18
11.25% 2010
Dobson Communications Corp. $ 5,000 4,850 .17
10.875% 2010
Hyperion Telecommunications, Inc., 5,000 4,062 .14
Series B, 0%/13.00% 2003(1)
Global TeleSystems Group, Inc. 6,000 3,000 .11
9.875% 2005
Piltel International Holding Corp. 5,875 2,056 .07
1.75% convertible 2006
Teligent, Inc. 11.50% 2007 4,000 1,800 .06
IMPSAT Corp. 12.375% 2008 2,000 1,565 .06
Netia Holdings BV 0%/11.25% 2007(1) 1,000 660 .02
240,452 8.54
Containers & Packaging - 4.35%
Container Corp. of America:
10.75% 2002 7,250 7,350
9.75% 2003 32,250 32,331
Series A, 11.25% 2004 5,500 5,562 1.61
Graham Packaging Co.:
8.75% 2008 21,000 17,850
0%/10.75% 2009(1) 18,500 9,712 .98
Printpack, Inc.:
Series B, 9.875% 2004 5,750 5,707
10.625% 2006 18,930 18,267 .85
Tekni-Plex, Inc. 12.75% 2010(4) 13,625 13,284 .47
Anchor Glass Container Corp. 10,000 7,500 .27
11.25% 2005
Packaging Corp. of America, Series B, 4,750 4,797 .17
9.625% 2009
122,360 4.35
Oil & Gas - 3.85%
Premcor USA Inc. (formerly Clark
USA, Inc.):
10.875% 2005 14,500 9,425
11.50% senior exchangeable 21,210 shares 4,878
preferred 2009(2),(3),(5)
Premcor Refining Group Inc. (formerly
Clark Refining & Marketing, Inc.):
8.375% 2007 $ 6,250 5,250
8.875% 2007 4,500 3,195
8.625% 2008 6,920 5,813
Premcor Refining Group, Inc. 9.50% 15,625 14,160 1.52
2004 (formerly Clark Oil & Refining
Corp.)
Cross Timbers Oil Co.:
Series B, 9.25% 2007 10,775 10,990
8.75% 2009 15,620 15,308 .94
Pogo Producing Co.:
8.75% 2007 16,500 16,087
10.375% 2009 6,500 6,809 .81
Petrozuata Finance, Inc., Series B, 11,600 9,599 .34
8.22% 2017
HS Resources, Inc. 9.25% 2006 5,100 5,138 .18
Newfield Exploration Co., Series B, 1,750 1,623 .06
7.45% 2007
108,275 3.85
Commercial Services & Supplies - 3.58%
Allied Waste North America, Inc.:
7.625% 2006 500 449
Series B, 10.00% 2009 46,200 40,078 1.44
USA Waste Services, Inc.:
4.00% 2002 12,000 11,280
6.50% 2002 2,000 1,933
WMX Technologies, Inc.:
6.375% 2003 7,500 7,104
7.10% 2026 3,500 3,386
Waste Management, Inc.:
7.70% 2002 5,700 5,644
6.875% 2009 1,500 1,361 1.09
KinderCare Learning Centers, Inc., 12,500 11,594 .41
Series B, 9.50% 2009
Iron Mountain Inc.:
10.125% 2006 3,000 3,052
8.75% 2009 5,370 5,209 .30
Stericycle, Inc., Series B, 5,250 5,565 .20
12.375% 2009
Protection One Alarm Monitoring, Inc. 5,166 4,029 .14
13.625% 2005(7)
Safety-Kleen Services, Inc. 7,000 70 .00
9.25% 2008(5),(6)
100,754 3.58
Banks - 2.70%
Fuji JGB Investment LLC, Series A, 25,500 24,977 .89
9.87% noncumulative preferred
(undated)(7)
Sakura Capital Funding 14,000 13,720 .49
7.63% (undated)(7)
Komercni Finance BV 9,950 9,627 .34
9.00%/10.75% 2008(2),(7)
HSBC Capital Funding LP, Series 1, 6,000 6,354 .23
9.547% noncumulative preferred
(undated)(7)
Superior Financial Corp. 8.65% 2003(4) 6,000 5,460 .19
TB Finance (Cayman) Ltd. 2.75% yen 650,000,000 shares 4,801 .17
convertible preferred 2004(3)
BNP U.S. Funding LLC, Series A, 7.738% $ 4,750 4,480 .16
noncumulative preferred (undated)(7)
BankUnited Capital Trust, BankUnited 4,500 3,352 .12
Financial Corp., 10.25% 2026
IBJ Preferred Capital Co. LLC, 3,500 3,219 .11
Series A, 8.79% noncumulative
preferred(7)
75,990 2.70
Semiconductor Equipment &
Products - 2.48%
Micron Technology, Inc. 6.50% 2005(4) 34,000 28,900 1.03
Fairchild Semiconductor Corp.:
10.125% 2007 5,250 5,250
10.375% 2007 8,737 8,824 .50
Advanced Micro Devices, Inc. 6.00% 8,000 10,602 .38
convertible subordinated notes 2005
Adaptec, Inc. 4.75% convertible 10,000 8,366 .30
subordinated notes 2004
SCG Holding Corp. 12.00% 2009 5,486 5,801 .20
Hyundai Semiconductor America, 2,500 2,131 .07
Inc. 8.625% 2007
69,874 2.48
Diversified Financials - 2.47%
Golden State Holdings, Inc. 7.00% 2003 4,500 4,285
GS Escrow Corp. 7.125% 2005 17,000 15,696 .71
Advanta Corp.:
Series B, 7.00% 2001 5,635 5,377
Series D, 6.814% 2002 10,000 8,924
Series D, 6.98% 2002 2,000 1,792 .57
First Pacific Co. Ltd. 2.00% 12,000 13,754 .49
convertible 2002
Providian Financial Corp. 15,000 11,166 .40
9.525% 2027(4)
Swire Pacific Offshore Financing Ltd. 351,648 shares 8,000 .28
9.33% cumulative guaranteed perpetual
capital securities
CEI Citicorp Holdings SA 11.25% 2007 ARP 500 482 .02
69,476 2.47
Multiline Retail - 2.40%
J.C. Penney Co., Inc.:
7.375% 2004 $ 10,700 9,486
7.05% 2005 5,000 4,224
7.60% 2007 2,000 1,617
7.375% 2008 8,390 6,462
6.875% 2015 3,250 2,093
9.75% 2021 2,000 1,662
7.125% 2023 650 394
7.625% 2097 7,875 4,681 1.09
Kmart Financing Trust 7.75% 2016 136,025 shares 4,234
DR Securitized Lease Trust, $ 9,855 7,221
pass-through certificates, Series 1994
K-2, 9.35% 2019(8)
Kmart Corp. 9.78% 2020 10,500 8,569 .71
J. Crew Operating Corp. 10.375% 2007 8,000 7,190 .25
Levi Strauss & Co.:
6.80% 2003 4,025 3,381
7.00% 2006 4,000 3,120 .23
Dillard's, Inc.:
6.43% 2004 1,600 1,297
6.30% 2008 2,900 2,071 .12
67,702 2.40
Paper & Forest Products - 1.80%
Kappa Beheer BV:
10.625% 2009 euro 17,750 16,222
0%/12.50% 2009(1) 26,250 15,762 1.14
Indah Kiat Finance Mauritius Ltd.:
11.875% 2002 $ 7,900 6,103
10.00% 2007 5,200 2,509 .31
Advance Agro Capital BV 13.00% 2007 7,125 5,130 .18
Pindo Deli Finance Mauritius Ltd.:
10.25% 2002 5,000 3,312
10.75% 2007 2,925 1,441 .17
APP International Finance Co. BV 275 133 .00
11.75% 2005
50,612 1.80
Electrical Equipment - 1.65%
Zilog, Inc. 9.50% 2005 30,300 25,755 .92
SpectraSite Holdings, Inc.,
Series B:(1)
0%/12.00% 2008 8,500 5,568
0%/11.25% 2009 24,375 13,284
0%/12.875% 2010 3,500 1,785 .73
46,392 1.65
Health Care Providers &
Services - 1.53%
Paracelsus Healthcare Corp. 35,825 14,330 .51
10.00% 2006(6)
Omnicare, Inc. 5.00% convertible 17,500 13,147 .47
debentures 2007
Columbia/HCA Healthcare Corp. 12,250 11,515 .41
6.91% 2005
Concentra Operating Corp. 13.00% 2009 3,000 2,655 .09
Integrated Health Services,
Inc.:(5),(6)
5.75% convertible debentures 2001 11,000 1
10.25% 2006(7) 11,250 113
Series A, 9.50% 2007 37,500 375
Series A, 9.25% 2008 46,250 463 .03
Sun Healthcare Group, Inc.:(6)
Series B, 9.50% 2007(5) 24,875 249
9.375% 2008(4),(5) 19,110 191 .02
Mariner Health Group, Inc. 13,625 136 .00
9.50% 2006(5),(6)
43,175 1.53
Beverages - 1.21%
Canandaigua Wine Co., Inc.:
Series C, 8.75% 2003 9,750 9,701
8.75% 2003 8,150 8,099 .63
Delta Beverage Group, Inc. 9.75% 2003 15,735 16,128 .58
33,928 1.21
Electric Utilities - 0.93%
AES Drax Holdings Ltd. 10.41% 2020 17,855 18,722 .66
TNP Enterprises, Inc. 10.25% 2010(4) 7,250 7,540 .27
26,262 .93
Couriers - 0.70%
Eletson Holdings Inc. 9.25% 2003 18,485 17,746 .63
Gearbulk Holding Ltd. 11.25% 2004 2,000 2,013 .07
19,759 .70
Internet Software & Services - 0.70%
GT Group Telecom Inc. 0%/13.25% 2010(1) 29,250 14,625 .52
Exodus Communications Inc. 5,000 5,038 .18
11.625% 2010(4)
19,663 .70
Household Durables - 0.69%
Boyds Collection, Ltd., Series B, 8,803 8,407 .30
9.00% 2008
Salton/Maxim Housewares, Inc. 8,425 8,299 .29
10.75% 2005
Home Products International, 3,250 1,983 .07
Inc. 9.625% 2008
WestPoint Stevens Inc. 7.875% 2005 1,000 865 .03
19,554 .69
Aerospace & Defense - 0.58%
EarthWatch Inc.:(5)
0%/12.50% 2005(1),(4) 8,640 6,321
Series B, 7.00% convertible 777,665 shares 2,500
preferred 2009(2),(3)
Series C, 8.50% convertible 373,613 590 .33
preferred 2009(2),(3),(4)
Loral Orion Network Systems, $ 11,725 6,918 .25
Inc. 11.25% 2007
16,329 .58
Other - 3.89%
Chevy Chase Preferred Capital 214,000 shares 11,503
Corp. 10.375%
Chevy Chase Bank, FSB 9.25% 2008 $ 2,000 1,845 .47
Ingram Micro Inc. 0% convertible 26,500 10,070 .36
debentures 2018
Gramercy Place Insurance Ltd., 7,834 7,780 .28
Series 1998-A, Class C-2,
8.95% 2002(4),(8)
Fage Dairy Industry SA 9.00% 2007 9,250 7,030 .25
Flextronics International Ltd. 6,500 6,338 .23
8.75% 2007
Friendly Ice Cream Corp. 10.50% 2007 7,875 6,300 .22
SBA Communications Corp. 8,250 6,229 .22
0%/12.00% 2008(1)
McDermott Inc. 9.375% 2002 6,775 6,098 .22
Doe Run Resources Corp., Series B, 9,250 4,764 .17
11.25% 2005
Chase Commercial Mortgage Securities 5,000 4,438 .16
Corp., Series 1998-2, Class E,
6.39% 2030(8)
American Standard Inc. 8.25% 2009(4) 4,500 4,410 .16
Sunglass Hut International, Inc. 5,500 4,235 .15
5.25% convertible debentures 2003
Kaiser Aluminum & Chemical Corp. 4,500 4,005 .14
12.75% 2003
Federal-Mogul Corp.:
7.50% 2004 3,500 1,470
7.375% 2006 2,500 975
7.50% 2009 2,500 950 .12
USAir, Inc., pass-through trust, 3,150 2,898 .10
Series 1993-A3, 10.375% 2013(8)
Freeport-McMoRan Copper & Gold Inc.:
7.50% 2006 100 59
7.20% 2026 3,825 2,390 .09
GMAC Commercial Mortgage Securities, 2,500 2,303 .08
Inc., Series 1997-C2, Class E,
7.624% 2011(8)
Actuant Corp. 13.00% 2009(4) 2,000 2,005 .07
Fred Meyer, Inc.:
7.375% 2005 1,000 986
7.45% 2008 1,000 967 .07
Tenneco Automotive Inc. 11.625% 2009 3,000 1,920 .07
Overseas Shipholding Group, Inc.:
8.00% 2003 1,750 1,705
8.75% 2013 125 120 .06
New World Pasta Co. 9.25% 2009 2,750 1,650 .06
International Shipholding Corp., 1,100 971 .03
Series B, 7.75% 2007
Copamex Industrias, SA de CV, 995 968 .03
Series B, 11.375% 2004
Key Plastics Holdings, Inc. 9,650 869 .03
10.25% 2007(6)
DGS International Finance Co. BV 4,050 618 .02
10.00% 2007
Reliance Industries Ltd. 10.50% 2046 500 453 .02
BREED Technologies, Inc. 24,500 245 .01
9.25% 2008(5),(6)
109,567 3.89
U.S. Treasury Notes and Bonds - 1.19%
7.50% November 2001 20,000 20,256
6.25% February 2003 6,765 6,803
7.50% February 2005 6,000 6,361 1.19
33,420 1.19
Non U.S. Government Obligations - 1.88%
United Mexican States Government:
0% 2003(5) 768 - -
Eurobonds:
Global 11.375% 2016 7,695 8,965
Series A, units, 7.313% 2019(7) 500 518
Global 11.50% 2026 2,625 3,193 .45
Panama (Republic of):
Interest Reduction Bond 4.50% 2014(7) 12,400 9,920
Past Due Interest Eurobond 555 443
7.75% 2016(7)
10.75% 2020 415 408
8.875% 2027 2,000 1,675 .44
Capitalization Interest ADD TO FGP119
Brazil (Federal Republic of):
7.438% 2009(7) 1,625 1,427
14.50% 2009 2,750 3,032
Bearer 8.00% 2014(2) 7,034 5,398 .35
Capitalization Interest ADD TO 35B06
Russian Federation 12.75% 2028 6,250 5,456 .19
Turkey (Republic of) 12.375% 2009 3,675 3,780 .13
Argentina (Republic of):
Series E, 0% 2003 1,500 1,103
11.75% 2009 270 255
11.375% 2017 2,000 1,797 .11
Venezuela (Republic of):
Front Loaded Interest Reduction Bond, 667 565
Series A, 7.625% 2007(7)
Eurobond 7.875% 2007(7) 1,429 1,228
9.25% 2027 510 347 .08
South Africa (Republic of) 13.00% 2010 ZAR 13,600 1,829 .07
Bulgaria (Republic of), Front Loaded $ 1,770 1,289 .05
Interest Reduction Bond 3.00% 2012(7)
Philippines (Republic of) 9.875% 2019 500 411 .01
53,039 1.88
Number of
Shares
Common Stocks & Warrants - 2.22%
Price Communications Corp.(3) 960,382 18,787 .67
Nortel Inversora SA, preferred, 822,224 8,814 .31
Class A (ADR) (Argentina)(5)
VoiceStream Wireless Corp.(3) 49,393 5,733 .20
Felcor Lodging Trust Inc. 225,000 5,203 .19
Boyds Collection, Ltd.(3) 700,000 5,163 .18
Infinity Broadcasting Corp.(3) 106,800 3,524 .13
Global TeleSystems, Inc.(3) 750,000 3,422 .12
Clear Channel Communications, Inc.(3) 51,012 2,882 .10
Leap Wireless International, Inc., 66,750 1,942 .07
warrants, expire 2010(3),(5)
ACME Communications, Inc.(3) 213,145 1,918 .07
GT Group Telecom Inc., warrants, 29,250 1,610 .06
expire 2010 (Canada) (3),(5)
WorldCom, Inc. (formerly MCI 31,500 957 .03
WorldCom, Inc.)(3)
Cumulus Media Inc., Class A(3) 100,000 613 .02
Viatel, Inc.(3) 58,503 600 .02
Radio One, Inc.(3) 44,000 311
Radio One, Inc., Class A(3) 22,000 183 .02
Allegiance Telecom, Inc., warrants, 5,000 290 .01
expire 2008(3),(4),(5)
NTL Inc., warrants, expire 6,412 279 .01
2008(3),(4),(5)
Teletrac, Inc.(3),(4),(5) 1,045,551 157
Teletrac Holdings, Inc., warrants, 384,986 38 .01
expire 2004(3),(5)
KMC Telecom Holdings Inc., warrants, 22,500 23 .00
expire 2008(3),(4)
McCaw International, Ltd., warrants, 8,500 21 .00
expire 2007(3),(4),(5)
Comunicacion Celular SA, Class B, 15,000 2 .00
warrants, expire 2003 (Colombia)(3),(5)
Globalstar Telecommunications Ltd., 2,000 2 .00
warrants, expire 2004(3),(5)
Protection One Alarm Monitoring, 30,400 2 .00
Inc., warrants, expire 2005(3),(4),(5)
Maxcom Telecomunicaciones, SA de CV, 12,100 - -
warrants, expire 2007 (Mexico)(3),(5)
Tultex Corp.:(3),(5)
Warrants, expire 2007 81,220 - -
Warrants, expire 2007 40,610 - -
TVN Entertainment Corp., warrants, 11,750 - -
expire 2008(3),(4),(5)
V2 Music Holdings PLC (United
Kingdom):(3),(5)
Warrants, expire 2000 2,250 - -
Warrants, expire 2008 10,905 - -
62,476 2.22
Principal
Amount
(000)
Miscellaneous
Investment securities in initial 11,183 .40
period of acquisition
Total Bonds, Notes & Equity Securities 2,649,815 94.13
(cost: $3,007,056,000)
Short-Term Securities
Corporate Short-Term Notes - 3.15%
Park Avenue Receivables Corp.:
6.51% due 10/6/2000 $10,000 9,989
6.51% due 10/20/2000 11,000 10,960 .75
CIT Group Inc. 6.70% due 10/2/00 15,600 15,591 .55
Merck & Co. Inc. 6.47% due 10/16/00 15,000 14,957 .53
USAA Capital Corp. 6.47% due 10/30/00 11,600 11,537 .41
Preferred Receivables Funding Corp. 10,000 9,955 .35
6.50% due 10/25/00
Gannett Co. 6.48% due 11/10/00 7,600 7,544 .27
Corporate Asset Funding Co. Inc. 5,000 4,989 .18
6.50% due 10/12/00
Associates Corp. of North America 3,200 3,198 .11
6.69% due 10/2/00
88,720 3.15
Federal Agency Short-Term
Obligations - 1.06%
Federal Home Loan Banks 6.43% 15,000 14,971 .53
due 10/11/00
Freddie Mac 6.42%-6.425% due 10/31/00 15,000 14,917 .53
29,888 1.06
Total Short-Term Securities 118,608 4.21
(cost: $118,608,000)
Total Investment Securities 2,768,423 98.34
(cost:$3,125,664,000)
Excess of cash and receivables 46,704 1.66
over payables
Net Assets $2,815,127 100.00%
1 Step bond; coupon rate will increase
at a later date.
2 Payment in kind. The issuer has
the option of paying additional
securities in lieu of cash.
3 Non-income-producing security.
4 Purchased in a private placement
transaction; resale may be limited to
qualified institutional buyers; resale
to the public may require registration.
5 Valued under procedures established
by the Board of Trustees.
6 Company not making interest payments,
bankruptcy proceedings pending.
7 Coupon rate may change periodically.
8 Pass-through security backed by a
pool of mortgages or other loans on
which principal payments are
periodically made. Therefore, the
effective maturity
is shorter than the stated maturity.
See Notes to Financial Statements
</TABLE>
<TABLE>
<S> <C> <C>
AMERICAN HIGH INCOME TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000 (dollars in thousands)
Assets:
Investment securities at market
(cost: $3,125,664) $2,768,423
Cash 3,069
Receivables for--
Sales of investments $11,582
Sales of fund's shares 5,785
Forward currency contracts - net 1,768
Dividends and accrued interest 54,944
Other 3 74,082
2,845,574
Liabilities:
Payables for--
Purchases of investments 14,655
Repurchases of fund's shares 4,838
Forward currency contracts - net 0
Forward currency contracts - net 529
Dividends on fund's shares 8,596
Management services 1,079
Chase Manhattan Bank 0
Other expenses 750 30,447
Net Assets at September 30, 2000--
Unlimited shares authorized $2,815,127
Class A shares:
Net Assets $2,788,551
Shares outstanding 215,730,435
Net asset value per share $12.93
Class B shares:
Net Assets $ 26,576
Shares outstanding 2,056,029
Net asset value per share $12.93
See Notes to Financial Statements
STATEMENT OF OPERATIONS
for the year ended September 30, 2000 (dollars in thousands)
Investment Income:
Income:
Interest $267,020
Dividends 4,355 $271,375
Expenses:
Management services fee 12,688
Distribution expenses - Class A 6,916
Distribution expenses - Class B 68
Transfer agent fee - Class A 2,240
Transfer agent fee - Class B 5
Reports to shareholders 172
Registration statement and prospectus 305
Postage, stationery and supplies 429
Trustees' fees 31
Auditing and legal fees 70
Custodian fee 86
Taxes other than federal income tax 62
Other expenses 27 23,099
Net investment income 248,276
Realized Gain and Unrealized
Depreciation on Investments:
Net realized gain 34,882
Net change in unrealized (depreciation)
appreciation on:
Investments (142,942)
Open forward currency contracts 2,908
Net unrealized depreciation (140,034)
Net realized loss and
unrealized depreciation
on investments (105,152)
Net Increase/(Decrease) in Net Assets Resulting
from Operations $143,124
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS (dollars in thousands)
Year ended
September 30,
2000 1999
Operations:
Net investment income $248,276 $246,356
Net realized gain (loss) on investments 34,882 (23,484)
Net unrealized depreciation
on investments (140,034) (27,296)
Net increase in net assets
resulting from operations 143,124 195,576
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income:
Class A (269,111) (244,894)
Class B (569) -
Distributions from net realized gains on investments
Class A - (8,119)
Total Dividends and Distributions (269,680) (253,013)
Capital Share Transactions:
Proceeds from shares sold 736,403 1,060,634
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on investments 187,256 178,581
Cost of shares repurchased (759,365) (764,282)
Net increase in net assets resulting from 164,294 474,933
capital share transactions
Total Increase in Net Assets 37,738 417,496
Net Assets:
Beginning of year 2,777,389 2,359,893
End of year (including
undistributed net investment (loss)
income: $(3,111) and $18,569
respectively) $2,815,127 $2,777,389
See Notes to Financial Statements
</TABLE>
American High-Income Trust
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - American High-Income Trust, Inc. (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 carefully supervised portfolio
consisting primarily of lower rated, higher risk corporate bonds. The fund
offers Class A and Class B shares. Class A shares are sold with an initial
sales charge of up to 3.75%. Class B shares are sold without an initial sales
charge but are subject to a contingent deferred sales charge paid upon
redemption. This charge declines from 5% to zero over a period of six years.
Class B shares have higher distribution expenses and transfer agent fees than
Class A shares. Class B shares are automatically converted to Class A shares
eight years after the date of purchase. Holders of both classes of shares have
equal pro rata rights to assets and identical voting, dividend, liquidation and
other rights, except that each class bears different distribution and transfer
agent expenses, and each class shall have exclusive rights to vote on matters
affecting only their class.
SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with accounting principles generally accepted in the United
States which require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
SECURITY VALUATION - Fixed-income securities are valued at prices obtained from
a pricing service, when such prices are available; however, in circumstances
where the investment adviser deems it appropriate to do so, such securities
will be valued at the mean quoted bid and asked prices or at prices for
securities of comparable maturity, quality and type. Short-term securities
maturing within 60 days are valued at amortized cost, which approximates market
value.
Forward currency contracts are valued at the mean of their
representative quoted bid and asked prices. Securities and assets for which
representative market quotations are not readily available are valued at fair
value as determined in good faith by a committee appointed by the Board of
Trustees. The ability of the issuers of the fixed-income securities held by the
fund to meet their obligations may be affected by economic developments in a
specific industry, state or region.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities initially expressed in
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing
market rates at the end of the reporting period. Purchases and sales of
securities and income and expenses are translated into U.S. dollars at the
prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities and other
assets and liabilities are included with the net realized and unrealized gain
or loss on investment securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are
accounted for as of the trade date. Realized gains and losses from securities
transactions are determined based on specific identified cost. In the event
securities are purchased on a delayed delivery or "when-issued" basis, the fund
will instruct the custodian to segregate liquid assets sufficient to meet its
payment obligations in these transactions. Dividend income is recognized on the
ex-dividend date, and interest income is recognized on an accrual basis. Market
discounts, premiums, and original issue discounts on fixed-income securities
are amortized daily over the expected life of the security.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - [Dividends and distributions paid
to shareholders are recorded on the ex-dividend date.
Forward Currency Contracts - The fund may enter into forward currency
contracts, which represent agreements to exchange currencies of different
countries at specified future dates at specified rates. The fund enters into
these contracts to manage its exposure to fluctuations in foreign exchange
rates arising from investments denominated in non-U.S. currencies. The fund's
use of forward currency contracts involves market risk in excess of the amount
recognized in the statement of assets and liabilities. The contracts are
recorded in the statement of assets and liabilities at their net unrealized
value. The fund records realized gains or losses at the time the forward
contract is closed or offset by a matching contract. The face or contract
amount in U.S. dollars reflects the total exposure the fund has in that
particular contract. Risks may arise upon entering these contracts from the
potential inability of counterparties to meet the terms of their contracts and
from possible movements in non-U.S. exchange rates and securities values
underlying these instruments. Purchases and sales of forward currency exchange
contracts having the same settlement date and broker are offset and presented
net in the statement of assets and liabilities.
ALLOCATIONS - Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses are allocated daily between Class A
and Class B based on their relative net asset values. Distribution expenses,
transfer agent fees and any other class-specific expenses are accrued daily and
charged to the applicable share class.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - Investments in securities of non-U.S. issuers in certain
countries involve special investment risks. These risks may include, but are
not limited to, investment and repatriation restrictions, revaluation of
currencies, adverse political, social and economic developments, government
involvement in the private sector, limited and less reliable investor
information, lack of liquidity, certain local tax law considerations, and
limited regulation of the securities markets.
CURRENCY GAINS AND LOSSES - Net realized currency gains on dividends, interest,
sales of non-U.S. bonds and notes, forward contracts, and other receivables and
payables, on a book basis, were $7,558,000 for the year ended September 30,
2000.
3. FEDERAL INCOME TAXATION
The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income and net capital gains for the fiscal year. As a regulated
investment company, the fund is not subject to income taxes if such
distributions are made. Required distributions are determined on a tax basis
and may differ from net investment income and net realized gains for financial
reporting purposes. In addition, the fiscal year in which amounts are
distributed may differ from the year in which the net investment income and net
realized gains are recorded by the fund.
As of September 30, 2000, net unrealized depreciation on investments, excluding
forward currency contracts, for book and federal income tax purposes aggregated
$357,241,000; $112,652,000 related to appreciated securities and $469,893,000
related to depreciated securities. There was no difference between book and tax
realized gains on securities transactions for the year ended September 30,
2000. During the year ended September 30, 2000, the fund realized, on a tax
basis, a net capital gain of $496,000 on securities transactions. During the
year ended September 30, 2000, the fund utilized the remaining capital loss
carryforward totaling $4,518,000 to offset, for tax purposes, capital gains
realized during the year up to such amount. In addition, the fund has
recognized, for tax purposes, capital losses totaling $8,643,000 which were
realized during the period November 1, 1998 through September 30, 1999. Net
gains related to non-U.S. currency transactions of $7,983,000 are treated as an
adjustment to ordinary income for federal income tax purposes. The cost of
portfolio securities, excluding forward currency contracts, for book and
federal income tax purposes was $3,125,664,000 at September 30, 2000.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $12,688,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Trustees of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees accrued
daily, based on the following rates and net asset levels:
<TABLE>
<CAPTION>
Net Asset Level
<S> <C> <C>
Rate In Excess of Up to
0.30% $0 $60 million
0.21 60 million 1 billion
0.18 1 billion 3 billion
0.16 3 billion
</TABLE>
The agreement also provides for fees based on monthly gross investment income
at the following rates:
<TABLE>
<CAPTION>
Monthly Gross Investment Income
<S> <C> <C>
Rate In Excess of Up to
3.00% $0 8,333,333
2.50 8,333,333 25,000,000
2.00 25,000,000
</TABLE>
DISTRIBUTION EXPENSES - American Funds Distributors, Inc. ("AFD"), the
principal underwriter of the fund's shares, received $1,874,000 (after
allowances to dealers) as its portion of the sales charges paid by purchasers
of the fund's Class A shares during the year ended September 30, 2000. Such
sales charges are not an expense of the fund and, hence, are not reflected in
the accompanying Statement of Operations.
The fund has adopted plans of distribution under which it may finance
activities primarily intended to sell fund shares, provided the categories of
expense are approved in advance by the fund's Board of Trustees. The plans
provide for aggregate annual expense limits of 0.30% of net assets for Class A
shares, and 1.00% of net assets for Class B shares.
For Class A shares, approved categories of expense include dealer service fees
of up to 0.30% of net assets. Also included are monthly reimbursements to AFD
for commissions paid during the prior 15-month period to dealers and
wholesalers in respect of certain shares sold without a sales charge. These
reimbursements are permitted only to the extent that the fund's overall 0.30%
annual expense limit is not exceeded. For the year ended September 30, 2000,
aggregate distribution expenses were $6,916,000, or 0.25% of net assets
attributable to Class A shares.
For Class B shares, approved categories of expense include fees of 0.75% per
annum payable to AFD. AFD sells the rights to receive such payments (as well as
any contingent deferred sales charges payable in respect of shares sold during
the period) in order to finance the payment of dealer commissions. Also
included are service fees of 0.25% per annum. These fees are paid to AFD to
compensate AFD for paying service fees to qualified dealers. For the year
ended September 30, 2000, aggregate distribution expenses were $68,000, or
1.00% of net assets attributable to Class B shares.
As of September 30, 2000, accrued and unpaid distribution expenses payable to
AFD for Class A and Class B shares were $472,000 and $20,000, respectively.
TRANSFER AGENT FEE - A fee of $2,245,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund.
DEFERRED TRUSTEES' FEES - Trustees who are unaffiliated with CRMC may elect to
defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of September 30, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Trustees, were $77,000.
AFFILIATED TRUSTEES AND OFFICERS - CRMC is owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC.
Officers of the fund and certain Trustees are or may be considered to be
affiliated with CRMC, AFS and AFD. No such persons received any remuneration
directly from the fund.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,340,704,000 and $1,238,916,000, respectively,
during the year ended September 30, 2000.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $86,000 includes
$84,000 that was paid by these credits rather than in cash.
Net assets consisted of the following:
<TABLE>
<S> <C>
As of September 30, 2000, net assets consisted of the following:
(dollars in thousands)
Capital paid in on shares of beneficial interest $3,165,853
Undistributed net investment income (3,111)
Accumulated net realized gain 8,479
Net unrealized depreciation (356,094)
Net assets $2,815,127
</TABLE>
Capital share transactions in the fund were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Capital share
transactions in the fund
were as follows:
Year ended Septe mber 30, 2000 Year ended Septe mber 30, 1999
Amount (000) Shares Amount (000) Shares
Class A Shares:
Sold $ 709,127 52,802,532 $ 1,060,634 75,509,296
Reinvestment of 186,881 13,990,142 178,581 12,742,880
dividends and
distributions
Repurchased (758,788) (56,441,175) (764,282) (54,497,988)
Net (decrease) 137,220 10,351,499 474,933 33,754,188
increase in Class A
Class B Shares:*
Sold 27,276 2,071,283 - -
Reinvestment of 375 28,676 - -
dividends and
distributions
Repurchased (577) (43,930) - -
Net (decrease) 27,074 2,056,029 - -
increase in Class B
Total net increase $ 164,294 12,407,528 $ 474,933 33,754,188
(decrease) in fund
* Class B shares were
not offered before
March 15, 2000.
</TABLE>
At September 30, 2000, the fund had outstanding forward currency contracts to
buy and sell non-U.S. currencies as follows:
<TABLE>
<S> <C> <C> <C> <C>
Contract Amount U.S. Valuations
Non-U.S.
Currency Unrealized
Contracts Non-U.S. U.S. Amount Appreciation
Sales:
Japanese yen
expiring 09/13/01 Yen 430,474,000 $4,362,000 $4,224,000 $138,000
Euros
expiring 10/20-
12/13/00 Euro 38,133,000 34,644,000 33,763,000 881,000
British pounds
expiring 10/10-
12/20/00 Pound 24,898,000 37,018,000 36,834,000 184,000
1/31/2000 N0K0 2,358,365 2,250,528 107,837
Euros
expiring 11/02/1999 to
1/31/2000 0 0 0 0
76,024,000 74,821,000 1,203,000
Purchases:
British pounds
expiring 10/26/00 Pound 650,000 950,000 950,000 -
$1,203,000
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
PER-SHARE DATA AND RATIOS (1)
Net
Net asset gains/(losses)
value, Net on securities
beginning investment (both realized
Year ended of Year income and unrealized)
Class A:
2000 $13.52 1.18 (2) $(.48)(2)
1999 13.75 1.28 (.17)
1998 15.69 1.30 (1.60)
1997 14.86 1.26 .83
1996 14.30 1.29 .59
Class B:
2000 13.57 0.52 (2) (.53)(2)
Dividends
Total from (from net Distributions
investment investment (from capital
Year ended operations income) gains)
Class A:
2000 $.70 $(1.29) -
1999 1.11 (1.29) $(.05)
1998 (.30) (1.30) (.34)
1997 2.09 (1.24) (.02)
1996 1.88 (1.32) -
Class B:
2000 (.01) (.63) -
Net asset
Total value, end Total
Year ended distributions of Year return
Class A:
2000 $(1.29) $12.96 5.29%
1999 (1.34) 13.52 8.11
1998 (1.64) 13.75 (2.40)
1997 (1.26) 15.69 14.66
1996 (1.32) 14.86 13.68
Class B:
2000 (.63) 12.93 (.10)
Ratio of Ratio of
Net assets, expenses net income
end of Year to average to average
Year ended (in millions) net assets net assets
Class A:
2000 $2,788 .82% 8.87%
1999 2,777 .82 9.21
1998 2,360 .81 8.76
1997 2,108 .82 8.35
1996 1,547 .87 8.90
Class B:
2000 27 1.52 (3) 8.18(3)
Portfolio
turnover
Year ended rate
Class A:
2000 46.43% (4)
1999 29.79
1998 54.63
1997 53.55
1996 39.74
Class B:
2000 46.43 (4)
<table/>
(1) The periods 1996 through 2000 represent, for Class A shares, fiscal years
ended September 30. The period ended 2000 represents, for Class B shares, the
199-day period ended September 30, 2000. Class B shares were not offered before
March 15, 2000. Total return for Class B is based on activity during the
period and thus is not representative of a full year. Total
returns exclude all sales charges, including contingent deferred sales charges.
(2) Based on average shares outstanding.
(3) Annualized.
(4) Represents portfolio turnover rate (equivalent for all share classes) for
the year ended September 30, 2000.
Independent Auditors' Report
To the Board of Trustees and Shareholders of
American High-Income Trust:
We have audited the accompanying statement of assets and liabilities of
American High-Income Trust (the "fund"), including the investment portfolio, as
of September 30, 2000, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two years in
the period then ended, and the per-share data and ratios for each of the five
years in the period then ended for Class A shares and the period March 15, 2000
through September 30, 2000 for Class B shares. These financial statements and
per-share data and ratios are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
per-share data and ratios based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and per-share data and ratios are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned at September 30, 2000, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of American High-Income Trust as of September 30, 2000, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the per-share data and ratios
for each of the five years in the period then ended for Class A shares and the
period March 15, 2000 through September 30, 2000 for Class B shares, in
conformity with accounting principles genera11y accepted in the United States
of America.
Deloitte & Touche LLP
Los Angeles, California
October 31, 2000
2000 TAX INFORMATION (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 0.9% of the
dividends paid by the fund from net investment income represent qualifying
dividends.
Certain states may exempt from income taxation a portion of the dividends paid
from net investment income that was derived from direct U.S. Treasury
obligations. For purposes of computing this exclusion, 0.9% of the dividends
paid by the fund from net investment income were derived from interest on
direct U.S. Treasury obligations.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many retirement plan trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FISCAL YEAR AND NOT THE CALENDAR
YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV WHICH WILL BE MAILED IN
JANUARY 2001 TO DETERMINE THE CALENDAR YEAR AMOUNTS TO BE INCLUDED ON THEIR
2000 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISERS.
BOARD OF TRUSTEES
David C. Barclay
Los Angeles, California
President of the fund
Senior Vice President and Director, Capital Research
and Management Company
Ambassador Richard G. Capen, Jr.
Rancho Santa Fe, California
Corporate director and author;
former United States Ambassador to Spain;
former Vice Chairman of the Board,
Knight-Ridder, Inc.; former Chairman
of the Board and Publisher,
The Miami Herald
H. Frederick Christie
Rolling Hills Estates, California
Private investor; former President and
Chief Executive Officer, The Mission Group;
former President, Southern California Edison
Company
Diane C. Creel
Long Beach, California
President and Chief Executive Officer,
The Earth Technology Corporation
(international consulting engineering)
Martin Fenton
San Diego, California
Managing Director, Senior Resource Group, LLC
(development and management of senior living
communities)
Leonard R. Fuller
Marina del Rey, California
President, Fuller Consulting
(financial management consulting firm)
Abner D. Goldstine
Los Angeles, California
Vice Chairman of the Board of the fund
Senior Vice President and Director,
Capital Research and Management Company
Paul G. Haaga, Jr.
Los Angeles, California
Chairman of the Board of the fund
Executive Vice President and Director,
Capital Research and Management Company
Richard G. Newman
Los Angeles, California
Chairman of the Board and Chief Executive Officer,
AECOM Technology Corporation
(architectural engineering)
Frank M. Sanchez
Los Angeles, California
Chairman of the Board and Chief Executive Officer,
The Sanchez Family Corporation
dba McDonald's Restaurants (McDonald's licensee)
Don R. Conlan, a Trustee since 1996, has retired
from the Board. The Trustees thank him for his many contributions to the fund.
OTHER OFFICERS
Michael J. Downer
Los Angeles, California
Vice President of the fund
Senior Vice President - Fund Business Management
Group, Capital Research and Management Company
Susan M. Tolson
Los Angeles, California
Vice President of the fund
Senior Vice President, Capital Research Company
Julie F. Williams
Los Angeles, California
Secretary of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
Anthony W. Hynes, Jr.
Brea, California
Treasurer of the fund
Vice President - Fund Business Management Group,
Capital Research and Management Company
Kimberly S. Verdick
Los Angeles, California
Assistant Secretary of the fund
Assistant Vice President - Fund Business Management
Group, Capital Research and Management Company
The American Funds Group(r)
AMERICAN HIGH-INCOME TRUST
Offices of the fund and of the investment adviser,
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5823
Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
Custodian of assets
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
Counsel
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071-2371
Independent auditors
Deloitte & Touche LLP
Two California Plaza
350 South Grand Avenue
Los Angeles, California 90071-3462
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
There are two ways to invest in American High-Income Trust. Class A shares are
subject to a 3.75% maximum up-front sales charge that declines for accounts of
$100,000 or more. Class B shares, which are not available for certain
employer-sponsored retirement plans, have no up-front charge. They are,
however, subject to additional expenses of approximately 0.75% a year over the
first eight years of ownership. If redeemed within six years, they may also be
subject to a contingent deferred sales charge (5% maximum) that declines over
time. Because expenses are first deducted from income, dividends for Class B
share accounts will be lower.
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 December 31, 2000, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
For information about your account or any of the fund's services, or for a
prospectus for any of the American Funds, please contact your financial
adviser. You may also call American Funds Service Company, toll-free, at
800/421-0180, or visit www.americanfunds.com on the World Wide Web. Please read
the prospectus carefully before you invest or send money.
Printed on recycled paper
Litho in USA RCG/INS/4866
Lit. No. AHIT-011-1100
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