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Previous: TRUST FOR CREDIT UNIONS, N-30D, 1996-05-03 |
Next: DREYFUS NEW JERSEY MUNICIPAL BOND FUND INC, 497, 1996-05-03 |
INTERMEDIATE BOND FUND OF AMERICA
SEMI-ANNUAL REPORT
for the six months ended February 29, 1996
The American Funds Group(R)
Intermediate Bond Fund of America(R) seeks current income
and preservation of capital primarily through high-quality bonds with effective
maturities between three and 10 years.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the total returns and average annual compound
returns with all distributions reinvested for periods ended March 31, 1996 (the
most recent calendar quarter), assuming payment of the 4.75% maximum sales
charge at the beginning of the stated periods - since inception on 2/19/88:
+70.19%, or +6.77% a year; 5 years: +35.92%, or +6.33% a year; 12 months:
+3.62%. Sales charges are lower for accounts of $25,000 or more. The fund's
30-day yield as of March 31, 1996, calculated in accordance with the Securities
and Exchange Commission formula, was 5.22%. The fund's distribution rate as of
that date was 6.35%. 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.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
FELLOW SHAREHOLDERS:
The value of your investment in Intermediate Bond Fund of America rose 3.9% in
the six months ended February 29 if, like most shareholders, you reinvested
dividends totaling 45 cents a share. Over the same period, the unmanaged
Salomon Brothers Broad Investment-Grade Medium Term Index increased 4.1% with
dividends reinvested.* If you took the fund's dividends in cash, your income
return was 3.3% (6.6% on an annualized basis), while the share price gained
0.5%.
The fund's latest results bring its total return over the past 12 months to
+9.8% and its lifetime total return since its introduction in February 1988 to
+79.3%, or an average compound return of 7.5% a year.
RATES FALL, THEN RISE
Intermediate-term and long-term interest rates declined in 1995 amid moderate
economic growth, continued low inflation and additional cuts in short-term
rates by the Federal Reserve. In early 1996, however, interest rates, other
than very short-term rates, started to move up. The turnaround was prompted by
indications that the economy might be growing faster than anticipated. This
dampened hopes for additional rate cuts by the Fed. The lack of a multiyear
federal budget resolution added to the uncertainty.
*As you know, the fund only purchases issues rated "Aa/AA" or higher. The index
includes all investment-grade issues, including those rated "A" and "Baa/BBB."
A FOCUSED, HIGH-QUALITY APPROACH
During the six-month fiscal period, your fund maintained its focused,
conservative, quality-oriented approach to the intermediate-term sector of the
bond market. The fund's average effective maturity was shortened to 4.4 years
from 4.7 years. As you can see in the chart on page 4, approximately a third
of the fund's assets was invested in U.S. Treasury obligations at the close of
the period. Another one-quarter was invested in Government National Mortgage
Association (GNMA) and other mortgage-backed securities. An additional 11% of
the fund's portfolio was in asset-backed obligations, which are securities
backed by pools of financial instruments such as credit card and auto loans.
Approximately 7% was invested in corporate bonds. As of February 29,
three-quarters of the fund's portfolio was in bonds with the highest credit
rating of Triple A, including many direct obligations of, or issues guaranteed
by, the U.S. government.
The last few months are a reminder that price fluctuations - both up and down -
are inevitable in the securities markets. While sentiment in the market about
the future course of interest rates is mixed, we believe the current
low-inflation environment could continue for some time.
With the economy at a critical juncture and the nation heading toward a
presidential election, we will continue to monitor developments that could
affect the intermediate-term bond market.
We look forward to reporting to you again in six months.
Cordially,
Paul G. Haaga, Jr.
Chairman of the Board
Abner D. Goldstine
President
April 12, 1996
Effective with the April payment, Intermediate Bond Fund of America's monthly
dividend was lowered from 7 1/2 cents a share (excluding special dividends) to
7 cents. The 7 1/2-cent-per-share rate had been in effect for the previous 24
months.
Intermediate Bond Fund of America
Investment Portfolio February 29, 1996
Unaudited
Mortgage-Backed Securities 32.53%
U.S. Treasury Securities 32.13%
Asset-Backed Obligations 10.55%
Federal Agency Obligations--Non-Mortgage 6.98%
Corporate Bonds 6.60%
Non-U.S. Government Bonds 4.71%
Cash Equivalents 6.50%
<TABLE>
<CAPTION>
Principal Market Percent
Amount Value of Net
(000) (000) Assets
<S> <C> <C> <C>
Bonds & Notes
Industrial & Service- 1.93%
BP America Inc. 10.00% 2018 (1998) /1/ $2,600 $2,914 .19%
Donnelley (R.R.) & Sons Co. 9.125% 2000 2,000 2,233 .14
Johnson & Johnson 8.72% 2024 (2004) /1/ 4,500 5,112 .33
Loews Corp. 8.25% 2007 (1997)/1/ 5,500 5,732 .37
Schering-Plough Corp. 0% 1996 4,000 3,840 .24
Wal-Mart Inc. Stores 8.50% 2024 (2004) /1/ 9,545 10,192 .66
------- ------
30,023 1.93
------- ------
Utilities- 1.14%
Northern Telecom Ltd. 8.75% 2001 3,250 3,596 .23
Southern California Gas Co. 8.75% 2021 (2001) /1/ 3,000 3,254 .21
US WEST Communications Inc. 8.875% 2031 (2001) /1/ 10,000 10,949 .70
------- --------
17,799 1.14
------- --------
Financial Services- 3.53%
ABN AMRO Bank NV, Chicago Branch 7.25% 2005 4,500 4,672 .30
Beverly Finance Corp. 8.36% 2004 10,000 10,625 .68
Corporate Property Investors:
9.00% 2002 9,500 10,560
7.75% 2004 2,000 2,078 .81
General Electric Capital Corp. 8.375% 2001 1,500 1,635 .11
National Australia Bank Ltd. 9.70% 1998 3,000 3,272 .21
National Westminster Bancorp Inc. 12.125% 2002 (1997)/1/ 1,000 1,101 .07
NatWest Capital Corporation 9.375% 2003 2,000 2,323 .15
S & S Finance International, Inc. 10.125% 12,180 12,599 .81
Euronotes 1996
Societe Generale, New York Branch 9.875% 2003 5,100 6,051 .39
------- --------
54,916 3.53
------- --------
Collateralized Mortgage Obligations
(Privately Originated) /2/- 8.20%
Chase Manhattan Bank, NA, Series 1993-I, Class 2A-5, 7,500 7,382 .47
7.25% 2024
CS First Boston Mortgage Securities Corp., Series
1995-AEW1:
Class A-1, 6.665% 2027 10,472 10,486
Class B, 7.182% 2027 /3/ 7,200 7,137 1.13
J.P. Morgan Commercial Mortgage Finance Corp.,
pass-through certificates, Series 1995-C1, Class A-2, 18,155 18,836 1.21
7.398% 2010 /2/
Merrill Lynch Mortgage Investors Inc.:
Series 1992B, Class A-2, 8.05% 2012 11,974 12,109
Series 1992B, Class A-3, 8.30% 2012 10,000 10,356
Series 1995-C2, Class A, 7.521% 2021 /3/ 9,728 9,923 2.41
Series 1995-C3, Class A-2, 6.849% 2025 /3/ 5,000 5,013
Morgan Stanley Capital Inc.,
Series 1995-GA1, Class A1, 7.00% 2002 9,493 9,576 .62
Prudential Home Mortgage Securities Co., Inc.:
Series 1992-33, Class A-12, 7.50% 2022 2,000 1,998
Series 1992-37, Class A-6, 7.00% 2022 10,871 10,861 .83
Resolution Trust Corp.,
Series 1992-7, Class A-2D, 8.35% 2029 7,453 7,471 .48
Structured Asset Securities Corp.,
Series 1996-CFL, Class A1-C, 5.944% 2028 4,900 4,845 .31
Westam Mortgage, Class 4-H, 8.95% 2018 11,000 11,522 .74
------- --------
127,515 8.20
------- --------
Asset-Backed Obligations /2/- 10.55%
Capstead Securities Corp. III, Series 1991-5, Class G, 10,560 10,613 .68
9.50% 2021
Case Equipment Loan Trust 1995-A 7.30% 2002 6,787 6,915 .45
Chemical Financial Acceptance Corp., 1989-A, 9.25% 1998 11,696 12,069 .78
Discover Card Trust, Series 1991-D, Class A, 8.00% 2000 10,000 10,462 .67
(1998) /1/
Ford Motor Credit Co. 1994-A, 6.35% 1999 1,226 1,232 .08
GCC Home Equity Trust, asset-backed certificates,
1990-1, 10.00% 2005 4,291 4,398 .28
Green Tree Financial Corp., pass-through certificates:
Series 1993-3, Class A5, 5.75% 2018 10,000 9,744
Series 1995-1, Class A2, 7.80% 2025 12,000 12,221
Series 1995-1, Class A3, 7.95% 2025 4,000 4,142 2.58
Series 1995-9, Class A4, 6.45% 2027 14,250 14,098
MBNA Credit Card Trust, asset-backed certificates,
1991-1, 7.75% 1998 (1991) /1/ 2,000 2,023 .13
Sears Credit Account Trust,
1991-C, 8.65% 1998 (1996) /1/ 10,000 10,109 .65
Standard Credit Card Master Trust I, credit card
participation certificates:
Series 1991-3, Class A, 8.875% 1999 (1998) /1/ 9,050 9,644
Series 1991-6, Class A, 7.875% 2000 (1998) /1/ 40,000 41,887 3.31
Town & Country Funding Corp. 5.85% 2000 (1998) /1/ 15,000 14,550 .94
------- --------
164,107 10.55
------- --------
Governments (Excluding U.S. Government) &
Government Authorities- 3.87%
British Columbia Hydro & Power Authority 12.50% 2013 2,000 2,370 .15
(1998) /1/
Ontario (Province of):
7.75% 2002 10,000 10,744
7.375% 2003 10,000 10,615
7.00% 2005 5,000 5,139
17.00% 2011 (1996) /1/ 3,100 3,522
15.25% 2012 (1997) /1/ 5,550 6,586 2.91
15.75% 2012 (1997) /1/ 105 121
11.50% 2013 (1997) /1/ 3,000 3,436
11.75% 2013 (1998) /1/ 4,500 5,209
County of Orange, California Taxable Pension
Obligation Bonds, Series 1994A, 6.81% 1996 5,000 4,806 .31
Victorian (Territory of) Public Authorities Finance
Agency 8.45% 2001 7,000 7,712 .50
------- --------
60,260 3.87
------- --------
Development Authorities- 0.84%
African Development Bank 9.30% 2000 3,750 4,189 .27
International Bank for Reconstruction and Development
14.90% 1997 8,000 8,880 .57
------- --------
13,069 .84
------- --------
Federal Agency Obligation - Mortgage
Pass-Throughs /2/- 20.26%
Federal Home Loan Mortgage Corp.:
8.00% 2003-2017 7,663 7,911
8.50% 2008-2021 10,206 10,641
8.75% 2008-2009 1,436 1,508
9.50% 2013 793 858
10.00% 2004 389 429 1.41
11.00% 2018 90 99
12.00% 2013 274 308
12.50% 2013 143 165
12.75% 2019 73 84
Federal National Mortgage Assn.:
7.00% 2009-2023 3,484 3,465
7.50% 2009-2024 28,890 29,364
8.00% 2002-2005 2,958 3,054
8.50% 2008-2023 14,089 14,781
9.00% 2001-2022 17,152 18,252
9.50% 2009-2020 5,207 5,675 5.34
10.00% 2019-2021 4,093 4,533
10.50% 2004-2020 2,799 3,082
11.00% 2000-2010 708 781
12.25% 2013 28 30
Government National Mortgage Assn.:
5.00% 2025 4,298 4,248
5.50% 2024 /3/ 78,176 79,565
6.00% 2024 /3/ 11,416 11,622
6.50% 2023-2024 3,798 3,861
7.00% 2007-2023 /3/ 13,911 14,155
8.00% 2023 1,429 1,474
8.50% 2007-2025 45,494 47,718
9.00% 2008-2025 17,550 18,577
9.50% 2009-2021 24,398 26,603 13.51
9.75% 1999 193 203
10.25% 2012 377 392
10.50% 2019 145 160
11.00% 2010-2019 529 596
11.50% 2010-2013 344 391
12.50% 2010-2014 526 618
------- --------
315,203 20.26
------- --------
Federal Agency Collateralized Mortgage
Obligations /2/- 4.07%
Federal Home Loan Mortgage Corp., Class B-3, 12.50% 2013 187 206 .01
Federal National Mortgage Assn.:
Series 91-50, Class H, 7.75% 2006 9,000 9,180
Series 91-146, Class Z, 8.00% 2006 3,532 3,587
Series 88-16, Class B, 9.50% 2018 904 978
Series 90-93, Class G, 5.50% 2020 3,850 3,618
Series 91-78, Class PK, 8.50% 2020 10,000 10,338 4.06
Series 90-21, Class Z, 9.00% 2020 24,647 25,864
Series 76, Class F, 9.125% 2020 4,085 4,206
Trust D2, 11.00% 2009 4,834 5,432
------- --------
63,409 4.07
------- --------
Federal Agency Obligations--Non-Mortgage- 6.98%
Federal Home Loan Bank Notes:
6.38% 2003 4,000 3,938
6.16% 2004 15,000 14,588 1.38
6.27% 2004 3,000 2,920
Federal Home Loan Mortgage Notes:
6.30% 2003 9,300 9,133
6.39% 2003 2,000 1,967
6.50% 2003 2,000 1,956
6.61% 2003 16,650 16,653 2.88
6.19% 2004 10,000 9,673
8.36% 2009 5,000 5,307
Federal National Mortgage Assn. Medium-Term Note:
6.14% 2004 3,000 2,915
6.40% 2004 1,500 1,467
7.37% 2004 8,800 9,060 1.21
6.53% 2006 5,625 5,463
FNSM Callable Principal STRIPS:
1991-B8, 0%/7.89% 2002 /4/ 25,000 23,559 1.51
------- --------
108,599 6.98
------- --------
U.S. Treasury Obligations- 32.13%
9.375% April 1996 3,000 3,015 .19
6.75% February 1997 70,000 70,974 4.56
8.125% February 1998 22,000 23,072 1.48
9.25% August 1998 19,250 20,880 1.34
5.125% November 1998 55,000 54,415 3.50
9.125% May 1999 28,500 31,386 2.02
6.75% June 1999 57,000 58,915 3.79
7.75% November 1999 5,500 5,875 .38
8.00% May 2001 8,000 8,790 .56
13.375% August 2001 15,000 20,344 1.31
7.50% November 2001 10,000 10,780 .69
10.75% February 2003 5,000 6,340 .41
11.125% August 2003 12,000 15,615 1.00
7.25% May 2004 51,750 55,518 3.57
7.25% August 2004 20,000 21,469 1.38
11.625% November 2004 50,750 69,424 4.46
8.75% November 2008 (2003) /1/ 20,000 23,112 1.49
------- --------
499,924 32.13
------- --------
Total Bonds & Notes (cost: $1,444,757,000) 1,454,824 93.50
------- --------
Short-Term Securities
Commercial Paper- 5.28%
Associates Corp. of North America 5.44% due 3/1/96 19,000 18,997 1.22
General Electric Capital Corp. 5.44% due 3/1/96 10,000 9,998 .64
H.J. Heinz Co. 5.19% due 4/1/96 10,000 9,954 .64
Pitney Bowes Credit Corp.:
5.17% due 3/11/96 5,400 5,391
5.12% due 4/23/96 5,500 5,458 .70
Raytheon Co. 5.20% due 3/11/96 15,000 14,976 .96
Safeco Credit Co. Inc.:
5.17% due 4/2/96 6,800 6,768
5.17% due 4/8/96 10,600 10,541 1.12
------- --------
Total Short-Term Securities (cost: $82,083,000) 82,083 5.28
------- --------
Total Investment Securities (cost: $1,526,840,000) 1,536,907 98.78
Excess of cash and receivables over payables 18,985 1.22
------- --------
Net Assets $1,555,892 100.00%
======= ========
</TABLE>
/1/ Valued in the market on the basis of its effective maturity -- that is, the
date at which the security is expected to be called or refunded by the issuer
or the date at which the investor can put the security to the issuer for
redemption. Effective maturity date is shown in parentheses.
/2/ Pass-through security backed by a pool of mortgages or other loans on which
principal payments are periodically made. Therefore, the effective maturity of
this security is shorter than the stated maturity.
/3/ Coupon rate may change periodically.
/4/ Zero-coupon bond which will convert to a coupon-bearing security at a later
date.
See Notes to Financial Statements
INTERMEDIATE BOND FUND OF AMERICA
FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
at February 29, 1996 (dollars in thousands)
- ---------------------------------------- ------------ ------------
<S> <C> <C>
ASSETS:
Investment securities at market
(cost: $1,526,840) $1,536,907
Cash 2,627
Receivables for--
Sales of investments $ 14,804
Sales of fund's shares 6,499
Accrued interest 17,249 38,552
------------ ------------
1,578,086
LIABILITIES:
Payables for--
Purchases of investments 15,817
Repurchases of fund's shares 2,435
Dividends payable 2,507
Management services 492
Accrued expenses 943 22,194
------------ ------------
NET ASSETS AT FEBRUARY 29, 1996--
Equivalent to $13.59 per share on
114,496,325 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $1,555,892
=============
Statement of Operations (Unaudited)
for the six months ended February 29, 1996 (dollars in thousands)
------------ ------------
INVESTMENT INCOME:
Income:
Interest $ 55,925
Expenses:
Management services fee $ 3,026
Distribution expenses 2,282
Transfer agent fee 556
Reports to shareholders 83
Registration statement and prospectus 33
Postage, stationery and supplies 67
Trustees' fees 14
Auditing and legal fees 43
Custodian fee 33
Taxes other than federal income tax 19 6,156
------------ ------------
Net investment income 49,769
------------
REALIZED GAIN AND UNREALIZED APPRECIATION
ON INVESTMENTS:
Net realized gain 5,922
Net unrealized appreciation
on investments:
Beginning of period 8,386
End of period 10,062
------------
Net increase in unrealized appreciation on
investments 1,676
------------
Net realized gain and increase in
unrealized appreciation on investments 7,598
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $57,367
============
Statement of Changes in Net
Assets (dollars in thousands)
------------- -------------
Six months Year
ended ended
2/29/96* 8/31/95
OPERATIONS: ------------- -------------
Net investment income $49,769 $104,689
Net realized gain (loss) on investments 5,922 (47,764)
Net unrealized
appreciation on investments 1,676 59,259
------------- -------------
Net increase in net assets
resulting from operations 57,367 116,184
------------- -------------
DIVIDENDS PAID FROM NET INVESTMENT INCOME (50,011) (103,958)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
29,543,983 and 38,884,119
shares, respectively 403,849 515,751
Proceeds from shares issued in
reinvestment of net investment income
dividends and distributions of net
realized gain on investments:
2,768,288 and 5,917,803 shares,
respectively 37,731 78,348
Cost of shares repurchased:
28,848,158 and 55,272,862
shares, respectively (394,227) (730,831)
------------- -------------
Net increase (decrease) in net assets resulting
from capital share transactions 47,353 (136,732)
------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 54,709 (124,506)
NET ASSETS:
Beginning of period 1,501,183 1,625,689
------------- -------------
End of period (including undistributed
net investment income of $2,251 and
$2,493, respectively) $1,555,892 $1,501,183
============= =============
</TABLE>
*Unaudited
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. Intermediate Bond Fund of America (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks current income, consistent with preservation
of capital, within certain guidelines for quality and maturity. The following
paragraphs summarize the significant accounting policies consistently followed
by the fund in the preparation of its financial statements:
Bonds and notes are valued at prices obtained from a bond-pricing service
provided by a major dealer in bonds, when such prices are available; however,
in circumstances where the investment adviser deems it appropriate to do so,
such securities will be valued at the mean of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality and type. Short-term securities with original
or remaining maturities in excess of 60 days are valued at the mean of their
quoted bid and asked prices. Short-term securities with 60 days or less to
maturity are valued at amortized cost, which approximates market value. The
maturities of variable or floating rate instruments are deemed to be the time
remaining until the next interest rate adjustment date. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by the Valuation Committee of the Board of Trustees.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed delivery or "when-issue" basis, it
will segregate with its custodian liquid assets in an amount sufficient to meet
its payment obligations in these transactions. Realized gains and losses from
securities transactions are reported on an identified cost basis. Interest
income is reported on the accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective securities. Dividends
are declared daily after determination of the fund's net asset value and are
paid to shareholders monthly.
Pursuant to the custodian agreement, the fund receives credit against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $33,000 includes $15,000 that was paid with credits rather
than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of February 29, 1996, net unrealized appreciation on investments for
book and federal income tax purposes aggregated $10,067,000, of which
$25,348,000 related to appreciated securities and $15,281,000 related to
depreciated securities. There was no difference between book and tax realized
gains on securities transactions for the six months ended February 29, 1996.
During the six months ended February 29, 1996, the fund realized, on a tax
basis, a net capital gain of $5,922,000 on security transactions. The fund has
available at February 29 1996, a net capital loss carryforward of $39,144,000
which may be used to offset capital gains realized during subsequent years
through 2002 and thereby relieve the fund and its shareholders of any federal
income tax liability with respect to the capital gains that are so offset. It
is the intention of the fund not to make distributions from capital gains while
there is a capital loss carryforward. The cost of portfolio securities for book
and federal income tax purposes was $1,526,840,000 at February 29, 1996.
3. The fee of $3,026,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Trustees of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.30% of the first $60 million of average net assets;
0.21% of such assets in excess of $60 million but not exceeding $1 billion;
0.18% of such assets in excess of $1 billion but not exceeding $3 billion; and
0.16% of such assets in excess of $3 billion; plus 3.00% on the first
$3,333,333 of the fund's monthly gross investment income; 2.50% of such income
in excess of $3,333,333 but not exceeding $8,333,333; and 2.00% of such income
in excess of $8,333,333.
Pursuant to a Plan of Distribution, the fund may expend up to 0.30% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Trustees. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended February 29,
1996, distribution expenses under the Plan were $2,282,000. As of February 29,
1996, accrued and unpaid distribution expenses were $712,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $556,000. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $1,156,000 (after allowances to
dealers) as its portion of the sales charges paid by purchasers of the fund's
shares. Such sales charges are not an expense of the fund and, hence, are not
reflected in the accompanying statement of operations.
Trustees of the fund who are unaffiliated with CRMC may elect to defer
part or all of the fees earned for services as members of the Board. Amounts
deferred are not funded and are general unsecured liabilities of the fund. As
of February 29, 1996, aggregate amounts deferred and earnings thereon were
$30,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain of the Trustees and officers of the
fund are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
4. As of February 29, 1996, accumulated net realized loss on investments was
$73,905,000 and paid-in capital was $1,617,484,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $388,956,000 and $366,406,000, respectively, during
the six months ended February 29, 1996.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Year Ended August 31
Six months
ended
February 29, 1995 1994 1993 1992 1991
1996/1/
------- ------ ------ ------ ------ ------
Net Asset Value, Beginning
of Period $13.52 $13.38 $14.64 $14.28 $13.69 $13.37
------- ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .45 .93 .95 1.00 1.09 1.21
Net realized and unrealized
gain (loss) on investments. .07 .13 (1.20) .37 .59 .30
Total income (loss) from ------- ------ ------ ------ ------ ------
investment operations .52 1.06 (.25) 1.37 1.68 1.51
------- ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.45) (.92) (.94) (1.01) (1.09) (1.19)
Distributions from capital gains - - (.07) - - -
------- ------ ------ ------ ------ ------
Total distributions (.45) (.92) (1.01) (1.01) (1.09) (1.19)
------- ------ ------ ------ ------ ------
Net Asset Value, End of Period $13.59 $13.52 $13.38 $14.64 $14.28 $13.69
======= ====== ====== ====== ====== ======
Total Return/2/ 3.88%/3/ 8.33% (1.80)% 9.95% 12.79% 11.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions) $1,556 $1,501 $1,626 $1,686 $1,215 $407
Ratio of expenses to average
net assets .40%/3/ .78% .83% .82% .90% 1.00%
Ratio of net income to
average net assets 3.25%/3/ 6.96% 6.79% 7.00% 7.66% 8.67%
Portfolio turnover rate 24.90%/3/ 71.91% 52.94% 42.59% 45.01% 83.00%
</TABLE>
/1/ Unaudited
/2/ Calculated without deducting a sales charge. The maximum sales charge is
4.75% of the fund's offering price.
/3/ Based on operations for the period shown and, accordingly, not
representative of a full year's operations.
OFFICES OF THE FUND AND OF THE INVESTMENT ADVISER,
CAPITAL RESEARCH AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster LLP
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR SECURITIES DEALER OR FINANCIAL PLANNER, OR CALL THE FUND'S
TRANSFER AGENT AT 800/421-0180.
This report is for the information of shareholders of Intermediate Bond Fund of
America, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after June 30, 1996, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA TAG/CG/2938
Lit. No. IBFA-013-0496
The American Funds Group(R)
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