[The American Funds Group(r)]
INTERMEDIATE BOND FUND OF AMERICA
CELEBRATING A DECADE OF HIGH-QUALITY INVESTING
[photo: close-up of various stock market computer screens]
Annual Report for the year ended August 31, 1998
[Sidebar]
Pictured on the cover: A view from one of the many fixed-income trading desks
at Capital Research and Management Company, the investment adviser for
Intermediate Bond Fund of America.
INTERMEDIATE BOND FUND OF AMERICA is one of the 28 mutual funds in The American
Funds Group,(r) managed by Capital Research and Management Company. Since 1931,
Capital has invested with a long-term focus based on thorough research and
attention to risk.
PREPARING FOR THE YEAR 2000
The fund's key service providers - Capital Research and Management Company, the
investment adviser, and American Funds Service Company, the transfer agent -
are updating their computer systems to process date-related information
properly following the turn of the century. Both are on track to complete
modifications of significant internal systems by the end of 1998. Testing with
business partners, vendors and other service providers is already under way. We
will continue to keep you up-to-date in our regular publications. If you'd like
more detailed information, call Shareholder Services at 800/421-0180, ext. 21,
or visit our Web site at www.americanfunds.com.
[End Sidebar]
THE OBJECTIVE OF INTERMEDIATE BOND FUND OF AMERICA(r) is to earn current
income, consistent with preservation of capital, within certain guidelines for
quality and maturity. After November 1, 1998, the fund will seek to fulfill its
objective by investing primarily in fixed-income securities with an average
effective maturity of no more than five years and with quality ratings of A or
better (as rated by Standard & Poor's Corporation or Moody's Investors Service)
or equivalent unrated securities.
These investments include:
- - U.S. government and federal agency securities
- - Pass-through securities, such as mortgage- and asset-backed securities
- - High-quality corporate obligations
In pursuing its objective, the fund takes a middle course, seeking a higher
yield than money market funds (which typically offer a stable principal value)
with less volatility than longer term bonds (which typically provide higher
income).
FIGURES SHOWN ARE PAST 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.
FELLOW SHAREHOLDERS:
For the past 12 months, a bumpy stock market ride has once again shown the
importance of including quality bond funds such as Intermediate Bond Fund of
America in a long-term investment portfolio. As an economic and market crisis
took hold of Asia and then spread to other parts of the world, the United
States became a haven for investors searching for stability and security in
quality U.S. dollar-denominated bonds. Your fund has benefited from this move
toward quality.
During the fund's 1998 fiscal year, shareholders received monthly dividends
totaling 86 cents a share - representing an income return of 6.6% for those
shareholders who reinvested their dividends. Shareholders who opted to receive
their monthly dividends in cash received an income return of 6.4%.
In addition, the fund's net asset value increased 1.0% from $13.42 to $13.56.
This increase, combined with the monthly dividends, helped the fund generate a
one-year total return of 7.7% for shareholders who reinvested their dividends.
During the same time frame, the unmanaged Salomon Smith Barney Broad
Investment-Grade Medium Term Index had a return of 8.8%, and the average for
the intermediate investment grade debt funds monitored by Lipper Analytical
Services was 9.1%.
Since 1995, the fund's average effective maturity has ranged between four and
five years - quite a bit shorter than its benchmark index and its Lipper
category. Because bonds with longer maturities typically fluctuate more than
shorter term bonds, our conservative approach is the primary reason the fund
has lagged the index and the average intermediate investment grade debt fund
during the past few years of rising bond prices. Also, the index and most
similar funds have held lower rated securities - those rated A and BBB - while
the fund has limited its investments to AAA and AA bonds. A more appropriate
fund comparison, given the fund's conservative approach, is Lipper's
short/intermediate investment grade debt category. The average total return for
the year for funds in this category was 7.2% with distributions reinvested.
Most of the funds in this category have average effective maturities that are
more in line with that of Intermediate Bond Fund of America.
CHANGES TO THE FUND'S INVESTMENT GUIDELINES
The fund's board of trustees recently approved several changes in the fund's
quality and maturity investment guidelines that will increase the fund's
flexibility and better reflect the management of the fund's portfolio maturity.
The fund's November 1, 1998, prospectus will include these changes. Once the
changes to the investment guidelines become effective on November 1, 1998,
Lipper will move the fund into the short/intermediate investment grade debt
category.
[photo: Abner D. Goldstine]
[Photo Caption]
Abner D. Goldstine
[End Photo Caption]
[photo: Paul G. Haaga, Jr.]
[Photo Caption]
Paul G. Haaga, Jr.
[End Photo Caption]
[Sidebar]
On September 17, 1998, the board of trustees approved changes to the fund's
investment guidelines, shortening its average maturity and expanding its
investment flexibility.
[End Sidebar]
[Sidebar]
The fund's monthly dividend will decrease to 6.5 cents a share beginning with
the November payment.
[End Sidebar]
Credit quality: To capture new opportunities while maintaining the fund's
commitment to quality, the fund's investment guidelines were expanded to
include securities rated A by Standard & Poor's or Moody's, or, if unrated,
issues that meet the standards for securities rated A or better. Previously,
the fund had been limited to investments in the two highest rating categories,
AAA and AA. Including A-rated securities substantially increases the number of
investment choices and enhances the investment adviser's ability to use its
extensive research capabilities to add value for its shareholders. (For more
information about credit ratings, see pages 6 and 7.)
Maturity: Until recently, the fund has sought to achieve its objectives by
investing in bonds with effective maturities between three and 10 years. The
trustees have established a guideline to require that the average effective
maturity of the fund be five years or less. At the same time that the trustees
set a maximum average maturity, they also voted to permit the fund to invest in
a limited number of individual securities with effective maturities of more
than 10 years. We believe these changes better reflect our approach to managing
the maturity of the fund's total portfolio and will give the portfolio
counselors more flexibility in selecting individual bonds for the fund.
CHANGE IN THE FUND'S MONTHLY DIVIDEND
Due to the general decline in interest rates during the past few years, we will
be decreasing the fund's monthly dividend to 6.5 cents a share from the 7.0
cents a share that has been paid since April 1996. The new dividend rate will
take effect beginning with the November payment.
MARKET AND ECONOMIC OUTLOOK
What long-term impact the economic trouble overseas will have on corporate
America and the U.S. economy remains to be seen. Despite recent stock market
volatility, U.S. economic fundamentals are favorable. Inflation, unemployment
and interest rates continue to be low, and corporate earnings remain strong. No
matter what the future holds, history has shown that the best defense against
market volatility is to work with your financial adviser to determine the most
appropriate mix of stock and bond funds - and to maintain a long-term
perspective.
As always, we will monitor developments that may affect the holdings in your
fund.
We look forward to reporting to you again in six months.
Cordially,
[/s/ Paul G. Haaga, Jr.] [/s/ Abner D. Goldstine]
Paul G. Haaga, Jr. Abner D. Goldstine
Chairman of the Board President
October 15, 1998
RESULTS:
HOW A $10,000 INVESTMENT IN THE FUND HAS GROWN
$23,291 Salomon Smith Barney Broad
Investment-Grade Medium Term Index
with interest compounded
$19,969 Intermediate Bond Fund of America
with dividends reinvested
$14,086 Consumer Price Index+
*From inception, February 19, 1988, through
August 31, 1988.
+Computed from data supplied by the U.S. Department
of Labor, Bureau of Labor Statistics.
Past results are not predictive of future results.
Average annual compound returns++
<TABLE>
<CAPTION>
Periods ended
8/31/989/30/98
<S> <C>
Ten Years +7.06%+7.08%
Five Years +4.24+4.48
One Year +2.56+3.25
</TABLE>
++Assumes reinvestment of all distributions and payment of the maximum 4.75%
sales charge at the beginning of the stated periods. Sales charges are lower
for accounts of $25,000 or more.
The fund results in the chart on this page reflect payment of the maximum sales
charge of 4.75%. Thus, the net amount invested was $9,525 versus $10,000 in the
Salomon Smith Barney Broad Investment-Grade Medium Term Index, which is
unmanaged and does not reflect sales charges, commissions or expenses.
Fund results in this report were computed without a sales charge unless
otherwise indicated. The fund's 30-day yield as of September 30, 1998,
calculated in accordance with the Securities and Exchange Commission formula,
was 5.10%. The fund's distribution rate as of that date was 5.88%. The SEC
yield reflects income the fund expects to earn based on its current portfolio
of securities, while the distribution rate is based solely on the fund's past
dividends. Accordingly, the fund's SEC yield and distribution rate may differ.
[begin mountain chart]
<TABLE>
<CAPTION>
Year Intermediate Bond Salomon Brothers Broad Consumer
Ended Fund of America Investment-Grade Medium Price
August with dividends Term Index with interest Index*
31 reinvested compounded
<S> <C> <C> <C>
2/19/88 $9,525 $10,000 $10,000
1988# 9,613 10,062 10,259
1989 10,478 11,233 10,741
1990 11,152 12,207 11,345
1991 12,460 13,872 11,776
1992 14,054 15,675 12,147
1993 15,452 17,027 12,483
1994 15,174 17,026 12,845
1995 16,439 18,732 13,181
1996 17,199 19,605 13,560
1997 18,545 21,403 13,862
1998 19.969 23,291 14,086
</TABLE>
CELEBRATING A DECADE OF HIGH-QUALITY INVESTING
[photo: Geoff Hawkins]
[Photo Caption]
Geoff Hawkins, an analyst for the fund, participates in a fixed-income meeting
with other Capital Research analysts and portfolio counselors.
[End Photo Caption]
In 1987, the roaring '80s came to an abrupt stop. Early in the year, threats of
rising inflation caused the Federal Reserve to increase interest rates, causing
bond prices to plummet. Later that year, the October 19 stock market crash
wiped out $600 billion in assets in less than a day - making it the largest
stock market decline since World War II.
[timeline]
[Sidebar]
1988
Intermediate Bond Fund of America is launched to provide investors access to
the benefits of high-quality fixed-income investing.
1989
The Berlin Wall falls, foreshadowing an end to the Cold War.
1990
Iraq invades Kuwait, triggering an increase in oil prices and igniting
inflation fears. Prices of bonds and stocks fall due to investor concerns.
1991
A brief recession causes a slowdown in inflation, employment and consumer
credit. To revive the economy, the Federal Reserve lowers short-term interest
rates.
1992
The annual rate of inflation dips to 2.9% and stays at or below 3.0% until
1996.
1993
Slow growth, lower inflation and falling interest rates characterize the U.S.
economy, driving bond prices higher. In February, bond investors react
positively to President Clinton's budget cut proposal.
1994
The Federal Reserve raises interest rates six times during the year, causing
the worst bond returns in recorded market history.
1995
A slowdown in consumer spending and a weakening economy temper concerns about
inflation, fueling a bond market rally.
1996
After falling during the first half of the year, bond prices recover during the
second half, ending the year slightly lower than where they began. Inflation
reaches 3.3%.
1997
The Asian market crisis causes volatility in the U.S. stock market, increasing
investors' appetites for bond funds. Inflation dips to 1.7%.
1998
High-quality U.S. bonds benefit from continued volatility in international and
U.S. stock markets as investors around the globe search for stability and
security in U.S. dollar-denominated bonds.
[End Sidebar]
[end timeline]
In February 1988, shortly after these tumultuous economic and financial events,
we launched Intermediate Bond Fund of America. With all the uncertainty the
financial markets were experiencing at the time, we believed many investors
could benefit from a high-quality bond fund. Although the U.S. economic and
financial markets have changed since 1988, the fund's goal remains the same -
to provide attractive current income with an eye toward preserving capital.
Over the years, the fund has typically provided higher income than short-term
investments, with less price fluctuation than longer term bonds. The primary
reason the fund has been able to provide higher income is because the bond
market has typically rewarded intermediate and longer term fixed-income
securities with higher yields than shorter term securities. Active portfolio
management, extensive research efforts and the ability to purchase high-quality
investments not available to individuals have also been important factors
contributing to our success.
TIMELESS MANAGEMENT FOR CHANGING TIMES
The foundation of the fund's management approach lies in our research efforts.
Capital Research and Management Company, the fund's investment adviser, has
assembled a highly experienced team of investment professionals. In addition to
monitoring the economic environment, our research analysts and portfolio
counselors carefully review each individual fixed-income security before it is
added to the fund's portfolio.
One goal of our in-depth research is consistency - maintaining relatively
stable flows of income while moderating principal fluctuations. The fund's
consistency is due, in large part, to our multiple portfolio counselor system,
which divides the fund's assets into several portions with each being managed
independently by a different portfolio counselor. This investment approach has
helped us ease the volatility often associated with a single-manager approach -
in which all investment decisions are dependent on one person's investment
outlook and style.
We also cannot ignore the importance of technology. To help monitor market
activity and identify new opportunities, Capital Research has taken advantage
of technological advances to track the history of individual securities and to
evaluate factors affecting a security's prospective yield and average life -
all to find the best values for the fund's portfolio.
[Sidebar]
WHO INVESTS IN INTERMEDIATE BOND FUND OF AMERICA
As part of a well-planned investment strategy, Intermediate Bond Fund of
America's relatively stable stream of monthly distributions can be a good
source of regular income or, if reinvested, generate growth through compounding
over the long term. Today, Intermediate Bond Fund of America shareholders
include:
- - MORE THAN 32,000 INDIVIDUAL ACCOUNTS totaling $767 million. Individual
accounts include single and joint accounts as well as personal tax-deferred
retirement accounts and accounts held by trustees, guardians or custodians.
- - MORE THAN 5,600 INSTITUTIONAL ACCOUNTS - including corporate, charitable,
educational and religious organizations as well as pension, profit-sharing and
employee benefit plans - totaling approximately $324 million.
[End Sidebar]
[begin pie chart]
[Sidebar]
HOW YOUR MONEY IS INVESTED
QUALITY
U.S. Government/Agency 52%
AAA 35%
AA 9%
Cash & Equivalents 4%
[end pie chart]
[begin pie chart]
SECTOR
Federal Agency Mortgage-Backed 30%
U.S. Govt./Agency (Non-Mortgage) 23%
Other Mortgage-Backed 21%
Asset-Backed 12%
Corporate Bonds 10%
Cash & Equivalents 4%
[End Sidebar]
[end pie chart]
FOLLOWING VALUES - NOT FADS
The investment professionals at Capital Research search for value rather than
following fads. The value of every fixed-income security is dependent on a
number of variables - including the outlook for inflation and interest rates,
shifts in bond supply and demand as well as developments in government and
industry. One of the areas in which we have found good long-term value has been
high-quality pass-through securities. Pass-through securities are pools of
loans packaged and sold by financial institutions to investors. They are called
pass-through securities because the interest and principal payments are passed
along to the investors.
In 1970, the Government National Mortgage Association created the first
pass-through security - a mortgage-backed security - which pooled home
mortgages. Since then, other government and private agencies have followed
suit, making the pass-through mortgage-backed market one of the largest
financial markets today. In fact, over the years, the idea of pooling and
selling loans has spread to other types of debt as well - such as auto and
corporate loans and credit card debt. These securities are called asset-backed
securities.
For investors, mortgage-backed securities offer the benefit of yields that are
usually higher than other fixed-income securities with comparable credit
quality. In part, this higher yield is compensation for the uncertain timing of
mortgage prepayments - when borrowers pay off the underlying loans early and
the principal is passed through to investors. To avoid surprises in prepayment
activity, we pay careful attention to the economic and interest rate
environment as well as the characteristics of underlying loans.
COMMITMENT TO QUALITY
Since its inception, the fund's guidelines have limited investments to
securities within the two highest credit quality categories (AAA and AA for
Standard & Poor's and Aaa and Aa for Moody's). On September 17, 1998, the
fund's board of trustees approved a change allowing the purchase of A-rated
securities. This expansion significantly increases the size of the fund's
investment universe, thereby increasing the portfolio counselors' ability to
use research to find value and add yield. A-rated securities fall well within
the investment-grade category of credit risk and do not compromise the fund's
commitment to quality investing.
Capital Research does not rely solely on third-party rating agencies, such as
Moody's and Standard & Poor's. As part of our thorough research, each security
is put through an extensive credit review by the fund's investment
professionals. This credit review helps us identify securities that are likely
to be upgraded and avoid issues with deteriorating credit. By allowing the
fund's investment professionals to invest in A-rated securities, we expand our
shareholders' opportunities to benefit from these research efforts.
THE NEXT 10 YEARS
Recent market volatility has opened many investors' eyes to the importance of
owning a quality bond fund in their long-term portfolios. Investment-grade
bonds are an excellent source of income that can help buoy a portfolio during
market declines.
The one sure thing in investing is change. In the future, market levels will
continue to rise and fall in response to changes in political and economic
environments around the world. As always, you can be assured Capital Research
will continue to actively manage the fund within its investment guidelines and
search for new opportunities in the market - all to add value to your
Intermediate Bond Fund of America investment.
[Sidebar]
MAKING THE GRADE
Credit ratings are used to indicate a bond issuer's ability to repay its debts
in differing economic conditions. Using Standard & Poor's credit ratings as an
example, credit quality ratings range from AAA to D, with AAA-rated securities
considered the safest investments against credit loss and a D rating indicating
the security's issuer is in default. Bonds in the four highest categories -
AAA, AA, A and BBB - are considered investment-grade securities. Your fund
invests only in securities rated A or higher. Since safety has a price, these
higher quality securities generally offer lower yields than those with lower
credit ratings.
[End Sidebar]
[photo: John Smet, Abner D. Goldstine]
[Photo Caption]
Two senior officers for Intermediate Bond Fund of America - John Smet (left)
and Abner Goldstine (right) - discuss investment policy.
[End Photo Caption]
<TABLE>
Intermediate Bond Fund of America
Investment Portfolio August 31, 1998
<S> <C> <C> <C>
Federal Agency Mortgage Obligations 29.99%
U.S. Treasury Securities 21.64%
Privately Originated Mortgage Obligations 21.33%
Asset-Backed Obligations 12.38%
Corporate Bonds 8.43%
Cash & Equivalents 4.02%
Governments (Excluding U.S. Government) 1.46%
Federal Agency Obligations--Non-Mortgage 0.75%
Bonds & Notes Principal Market Percent
Amount Value of Net
Industrial & Service - 1.87% (000) (000) Assets
Oil Enterprises 6.239% 2008 (1) $ 10,000 $ 10,026 .69%
PacifiCorp Australia, LLC 6.15% 2008 (1) 10,000 10,183 .70
Sony Corp. 6.125% 2003 3,000 3,024 .21
Wal-Mart Stores 5.65% 2000 4,000 4,014 .27
-----------------------
27,247 1.19
-----------------------
Transportation - 1.80%
Continental Airlines:
6.41% 2007 9,000 8,835
7.75% 2016 (2014) (2),(3) 1,282 1,434 .71
Jet Equipment Trust, Series 1995-B, Class A, 7.63% 2015 (2012) (1 9,242 10,163 .70
USAir, Inc. 6.76% 2009 (2008) (2),(3) 5,638 5,807 .39
-----------------------
26,239 1.80
-----------------------
Utilities - 0.41%
Texas Utilities Co., Series A, 6.20% 2002 6,000 6,027 .41
-----------------------
Financial Services - 4.35%
ABN AMRO Bank NV 7.55% 2006 4,000 4,275 .29
Barclays North American Capital Corp. 9.75% 2021 (2001)(2) 7,230 8,158 .56
BBV International Finance (Cayman) 6.875% 2005 7,200 7,369 .51
Beverly Finance Corp. 8.36% 2004(1) 10,000 11,080 .76
Deutsche Bank Financial 6.70% 2006 4,000 4,054 .28
Dresdner Bank New York 6.625% 2005 4,000 4,041 .28
General Electric Capital Corp. 8.375% 2001 1,500 1,591 .11
Ikon Capital Inc. 6.33% 2000 2,500 2,542 .17
Lend Lease (US) Finance Inc. 6.75% 2005 5,000 5,115 .35
Margaretten Financial 6.75% 2000 7,450 7,619 .52
NationsBank Corp. 6.125% 2004 3,000 2,982 .20
Toyota Motor Credit Corp. 6.125% 2000 2,495 2,527 .17
Union Bank of Switzerland 7.25% 2006 2,000 2,118 .15
-----------------------
63,471 4.35
-----------------------
Collateralized Mortgage Obligations
(Privately Originated)(3) - 21.33%
Asset Backed Securities Investment Trust,
Series 1997-D, 6.79% 2003 (1) 14,590 14,613 1.00
Asset Securitization Corp.,
Series 1997-D5, Class A-PS1, interest only, 1.57% 2043 (4) 173,930 18,367 1.26
Bear Asset Trust Securities, Series 1997-1,
Class A, 6.686% 2006(1) 9,802 9,824 .67
Blackrock Capital Finance LP, Series 1996-C2,
Class A, 7.632% 2026 (1),(4) 16 16 .00
Chase Commercial Mortgage Securities Corp.:
Series 1996-1, Class A1, 7.60% 2005 1,887 2,026
Series 1997-1, Class A1, 7.27% 2029 3,781 3,952
Series 1998-1, Class A1, 6.34% 2030 6,893 7,044 .89
Chase Manhattan Bank, NA, Series 1993-I,
Class 2A-5, 7.25% 2024 6,511 6,537 .45
CS First Boston Mortgage Securities Corp.,:
Series 1995-AEW1, Class B, 7.182% 2027(4) 7,200 7,200
Series 1998-C1, Class A-1A, 6.26% 2040 6,430 6,540 .94
Deutsche Mortgage & Asset Receiving Corp.,
Series 1998-C1, Class A-1, 6.22% 2031 13,705 13,888 .95
DLJ Mortgage Acceptance Corp.:
Series 1997-CF1, Class A1A, 7.40% 2006 (1) 6,481 6,859
Series 1995-CF2, Class A1B, 6.85% 2027 (1) 5,000 5,215
Series 1996-CF1, Class A1A, 7.28% 2028 2,536 2,648 1.01
GMAC Commercial Mortgage Securities Inc.,
Series 1996-C1, Class A2A, 6.79% 2028 16,417 16,786 1.15
Iroquois Trust, Series 1997-2, Class A, 6.752% 2007 (1) 5,000 5,071 .35
J.P. Morgan Commercial Mortgage Finance Corp., pass-through
certificates:
Series 1995-C1, Class A-2, 7.463% 2010(4) 18,155 18,407
Series 1997-C4, Class A-1, 6.939% 2028 1,609 1,646 1.37
Merrill Lynch Mortgage Investors Inc.:
Series 1995-C2, Class A-1, 7.384% 2021(4) 4,910 5,019
Series 1995-C3, Class A-2, 6.822% 2025(4) 5,180 5,356
Series 1997-C1, Class A-1, 6.95% 2029 (4) 13,218 13,676 1.66
Morgan Stanley Capital I Inc.:
Series 1995-GA1, Class A-1, 7.00% 2002(1) 3,355 3,381
Series 1998-WF1, Class A-1, 6.25% 2007 (4) 35,150 35,744
Series 1998-WF2, Class A-1, 6.34% 2030 (4) 6,931 7,081 3.17
Mortgage Capital Funding Inc.,
Series 1998-MC1, Class A-1, 6.417% 2030 12,742 13,022 .89
Nomura Asset Securities Corp.,
Series 1998-D6, Class A-A1, 6.28% 2030 (4) 9,730 9,721 .67
Paine Webber CMO, Series O, Class 5, 9.50% 2019 3,889 4,258 .29
SMA Finance Co., Inc.,
Series 1998-C1, Class A-1, 6.27% 2005 (1) 4,922 4,988 .34
Structured Asset Securities Corp.:
Series 1998-RF2, Class A, 8.582% 2022 (1),(4) 18,584 20,314
Series 1998-RF1, Class A, 8.709% 2027 (1),(4) 20,104 22,062
Series 1996-CFL, Class A1-C, 5.944% 2028 (4) 2,086 2,079 3.05
Structured Assets Notes Transactions,
Series 1996-A, Class A1, 7.156% 2003(1) 6,169 6,263 .43
Westam Mortgage, Class 4-H, 8.95% 2018 11,000 11,509 .79
-----------------------
311,112 21.33
-----------------------
Asset-Backed Obligations(3) - 12.38%
Case Equipment Loan Trust, Series 1995-A, 7.30% 2002 1,070 1,076 .07
Chase Manhattan Credit Card Master Trust:
Series 1996-4, Class A, 6.73% 2003 6,000 6,045
Series 1997-5, Class A, 6.194% 2005 5,500 5,613 .79
Equicredit Funding Trust, Series 1996-A,
Class A2, 6.95% 2012 5,500 5,540 .38
FIRSTPLUS Home Loan Owner Trust:
Series 1997-1, Class A-1, 6.28% 2004 1,350 1,348
Series 1997-1, Class A-3, 6.45% 2009 3,900 3,914
Series 1997-4, Class A-5, 6.62% 2015 6,200 6,307
Series 1997-3, Class M-1, 7.32% 2023 4,000 4,219 1.08
FMAC Loan Receivables Trust, Series 1998-A, Class A, 6.69% 2020 ( 22,000 22,268 1.53
GCC Home Equity Trust, asset-backed certificates,
Series 1990-1, Class A, 10.00% 2005 1,288 1,286 .09
Green Tree Financial Corp., pass-through certificates:
Series 1998-2, Class A5, 6.24% 2016 3,500 3,539
Series 1993-3, Class A5, 5.75% 2018 9,420 9,391
Series 1995-9, Class A4, 6.45% 2027 4,250 4,269
Series 1996-8, Class A4, 7.00% 2027 5,000 5,064
Series 1996-10, Class A4, 6.42% 2028 3,500 3,531
Series 1996-10, Class A5, 6.83% 2028 14,000 14,319
Series 1997-6, Class A5, 6.68% 2029 5,000 5,105
Series 1997-6, Class A6, 6.90% 2029 3,000 3,088 3.31
Green Tree Home Improvement Loan Trust:
Series 1997-D, Class HIA1, 6.14% 2023 1,392 1,392
Series 1997-D, Class HIA3, 6.77% 2023 5,000 5,074
Series 1997-C, Class HIA2, 6.46% 2028 1,750 1,759 .56
Merrill Lynch Mortgage Investors Inc.,
Series 1992-B, Class A3, 8.30% 2012 3,510 3,525 .24
The Money Store Home Equity Trust:
Series 1996-B, Class A14, 7.35% 2012 5,000 5,067
Series 1994-D, Class A5, 8.925% 2022 9,621 10,187 1.07
Nebhelp Trust, Student Loan Interest Margin Securities,
Series 1998-1, Class A, 6.68% 2016 (1) 20,000 20,330 1.39
Norwest Asset Securities Corp., Series 1998-8, Class A1, 6.50% 20 5,998 6,005 .41
Standard Credit Card Master Trust I, credit card
participation certificates,
Series 1991-6, Class A, 7.875% 2000 21,250 21,323 1.46
-----------------------
180,584 12.38
-----------------------
Governments (Excluding U.S. Government) &
Government Authorities - 1.46%
British Columbia Hydro & Power Authority 12.50% 2013 (1998)(2) 2,000 2,080 .14
Canadian Government 6.125% 2002 7,000 7,154 .49
Ontario (Province of) 7.75% 2002 8,000 8,540 .59
Victoria (Territory of) Public Authorities Finance Agency
8.45% 2001 3,500 3,794 .24
-----------------------
21,568 1.46
-----------------------
Federal Agency Mortgage Pass-Through Obligations(3) - 26.10%
Fannie Mae:
6.00% 2013-2028 22,447 22,320
6.167% 2033(4) 13,481 13,557
6.50% 2013-2028 20,442 20,592
7.00% 2008-2028 24,735 25,204
7.50% 2009-2028 18,867 19,372
8.00% 2002-2005 1,171 1,189
8.281% 2002(4) 8,851 9,220
8.50% 2008-2027 9,985 10,444
9.00% 2001-2022 9,866 10,490
9.50% 2009-2026 7,047 7,524
10.00% 2017-2025 15,779 17,271
10.50% 2004-2020 1,172 1,293
11.00% 2000-2020 2,464 2,761
12.00% 2015-2028 6,466 7,615
12.25% 2012-2013 1,965 2,284
12.50% 2028 3,830 4,540
13.00% 2015 1,875 2,264
15.00% 2028 1,283 1,617 12.31
Freddie Mac:
6.00% 2013 5,152 5,147
6.50% 2013 1,939 1,964
7.00% 2008 2,860 2,931
8.00% 2003-2017 4,367 4,565
8.50% 2008-2021 5,827 6,093
8.75% 2008-2009 819 856
9.50% 2010-2013 1,345 1,415
10.00% 2005-2019 13,721 14,898
11.00% 2018 47 53
12.00% 2016 153 175
12.50% 2015-2019 1,105 1,297
12.75% 2019 36 42 2.70
Government National Mortgage Assn.:
5.50% 2013 2,723 2,679
6.00% 2013-2028 10,280 10,230
6.875% 2016-2024(4) 18,217 18,568
7.00% 2007-2028(4) 44,244 45,014
7.50% 2028 15,942 16,415
8.00% 2023-2026 15,067 15,630
8.50% 2007-2023 14,509 15,399
9.00% 2008-2025 10,657 11,418
9.50% 2009-2021 16,282 17,625
9.75% 1999 3 3
10.00% 2019 6,839 7,536
10.25% 2012 251 273
10.50% 2019 95 106
11.00% 2010-2019 260 296
11.50% 2010-2013 115 131
12.50% 2010-2014 351 409 11.09
-----------------------
380,725 26.10
-----------------------
Federal Agency Collateralized Mortgage Obligations(3) - 3.89%
Fannie Mae:
Series 91-50, Class H, 7.75% 2006 10,490 10,975
Series 91-146, Class Z, 8.00% 2006 3,019 3,169
Trust D2, 11.00% 2009 2,880 3,353
Series 97-41, Class B, 7.25% 2014 7,967 7,984 3.43
Series 88-16, Class B, 9.50% 2018 460 495
Series 90-93, Class G, 5.50% 2020 2,420 2,414
Series 91-78, Class PK, 8.50% 2020 5,113 5,209
Series 90-21, Class Z, 9.00% 2020 15,322 16,414
Freddie Mac:
Series 1539, Class PL, 6.50% 2008 2,000 2,070
Series 83-B, Class 3, 12.50% 2013 99 112
Series 1567, Class A, 6.088% 2023(4) 1,996 1,926
Series 2030, Class F, 6.141% 2028 (4) 2,540 2,554 .46
-----------------------
56,675 3.89
-----------------------
Federal Agency Obligations--Non-Mortgage - 0.75%
Freddie Mac Notes:
5.75% 2008 10,750 10,871 .75
-----------------------
U.S. Treasury Obligations - 21.64%
9.125% May 1999 8,250 8,473 .58
8.00% May 2001 8,000 8,598 .59
13.375% August 2001 16,750 20,542 1.41
5.875% September 2002 7,500 7,727 .53
10.75% February 2003 5,000 6,127 .42
10.75% May 2003 21,750 26,888 1.84
11.125% August 2003 12,500 15,801 1.08
7.25% May 2004 62,706 69,486 4.76
7.25% August 2004 19,750 21,975 1.51
7.875% November 2004 16,165 18,554 1.27
11.625% November 2004 40,900 54,991 3.77
7.50% February 2005 4,250 4,813 .33
6.50% May 2005 6,750 7,304 .50
5.625% February 2006 9,000 9,298 .64
3.375% January 2007 (5) 10,802 10,465 .72
6.25% February 2007 10,500 11,299 .77
6.125% August 2007 6,480 6,939 .48
10.375% November 2009 5,000 6,355 .44
-----------------------
315,635 21.64
-----------------------
TOTAL BONDS & NOTES (cost: $1,379,275,000) 1,400,154 95.98
-----------------------
Short-Term Securities
Commercial Paper - 3.05%
AIG Funding Inc. 5.50% due 9/15/98 18,100 18,059 1.24
General Electric Capital Corp. 5.85% due 9/1/98 16,500 16,497 1.13
SBC Communications Inc. 5.51% due 9/1/98 (1) 10,000 9,999 .68
-----------------------
TOTAL SHORT-TERM SECURITIES (cost: $44,555,000) 44,555 3.05
-----------------------
TOTAL INVESTMENT SECURITIES (cost: $1,423,830,000) 1,444,709 99.03
Excess of cash and receivables over payables 14,074 .97
-----------------------
Net Assets $1,458,783 100.00
=======================
(1) Purchased in a private placement transaction;
resale may be limited to qualified institutional buyers;
resale to the public may require registration.
(2) 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.
(3) Pass-through securities backed by a pool of mortgages or
other loans on which principal payments are periodically made.
Therefore, the effective maturities are shorter
than the stated maturities.
(4) Coupon rate may change periodically.
(5) Index-linked bond whose principal amount moves with a
government retail price index.
See Notes to Financial Statements
</TABLE>
<TABLE>
Intermediate Bond Fund of America
Financial Statements
<S> <C> <C>
- ---------------------------------------- ----------------------
Statement of Assets and Liabilities
at August 31, 1998 (dollars inthousands)
- ---------------------------------------- ----------------------
Assets:
Investment securities at market
(cost: $1,423,830) $1,444,709
Cash 199
Receivables for-
Sales of investments $ 9,404
Sales of fund's shares 17,799
Accrued interest 13,535 40,738
----------------------
1,485,646
Liabilities:
Payables for-
Purchases of investments 19,390
Repurchases of fund's shares 4,040
Dividends payable 2,257
Management services 380
Accrued expenses 796 26,863
----------------------
Net Assets at August 31, 1998 -
Equivalent to $13.56 per share on 107,598,289 shares
of beneficial interest issued and outstanding;
unlimited shares authorized $1,458,783
=========
Statement of Operations
for the year ended August 31, 1998 (dollars inthousands)
----------------------
Investment Income:
Income:
Interest $ 93,277
Expenses:
Management services fee $ 5,328
Distribution expenses 4,067
Transfer agent fee 899
Reports to shareholders 101
Registration statement and prospectus 104
Postage, stationery and supplies 188
Trustees' fees 24
Auditing and legal fees 43
Custodian fee 6
Taxes other than federal income tax 20
------------
Total expenses before reimbursement 10,780
Reimbursement of expenses 471 10,309
Net investment income ----------------------
82,968
Realized Gain and Unrealized -----------
Appreciation on Investments:
Net realized gain 2,961
Net unrealized appreciation on investments:
Beginning of year 6,084
End of year 20,879
------------
Net unrealized appreciation on investments 14,795
-----------
Net realized gain and unrealized appreciation
on investments 17,756
-----------
Net Increase in Net Assets Resulting
from Operations $100,724
===========
Statement of Changes in Net Assets (dollars inthousands)
- ---------------------------------------- ----------------------
Year ended August 31
August 31,
1998 1997
Operations: ---------------------
Net investment income $ 82,968 $ 88,644
Net realized gain (loss) on investments 2,961 (9,914)
Net unrealized appreciation on investments 14,795 25,828
----------------------
Net increase in net assets
resulting from operations 100,724 104,558
----------------------
Dividends Paid From Net Investment Income (86,313) (87,766)
----------------------
Capital Share Transactions:
Proceeds from shares sold:
49,876,745 and 45,770,888 shares, respectivel 672,768 612,621
Proceeds from shares issued in
reinvestment of net investment income
dividends: 4,954,203 and 4,954,744 shares,
respectively 66,762 66,280
Cost of shares repurchased: 46,961,620 and
58,792,101 shares, respectively (633,193) (786,616)
----------------------
Net increase (decrease) in net assets resulting
from capital share transactions 106,337 (107,715)
----------------------
Total Increase (Decrease) in Net Assets 120,748 (90,923)
Net Assets:
Beginning of year 1,338,035 1,428,958
----------------------
End of year (including undistributed
net investment income of $527 and
$4,237, respectively) $1,458,783 $1,338,035
====================
See Notes to Financial Statements
</TABLE>
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:
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. Securities with original maturities of one year or
less having 60 days or less to maturity are amortized to maturity based on
their cost if acquired within 60 days of maturity or, if already held on the
60th day, based on the value determined on the 61st day. 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.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed-delivery or "when-issued" basis, it
will segregate with its custodian liquid assets in an 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. Dividends to shareholders are declared daily after the
determination of the fund's net investment income and are paid to shareholders
monthly.
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 August 31, 1998, net unrealized appreciation on investments for book and
federal income tax purposes aggregated $20,879,000, of which $25,531,000
related to appreciated securities and $4,652,000 related to depreciated
securities. During the year ended August 31, 1998, the fund realized, on a tax
basis, a net capital loss of $3,836,000 on security transactions. The fund had
available at August 31, 1998, a net capital loss carryforward of $89,401,000
which may be used to offset capital gains realized during subsequent years
through 2005 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 the portfolio securities for
book and federal income tax purposes was $1,423,830,000 at August 31, 1998.
3. The fee of $5,328,000 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 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. During the year, CRMC reduced the management fees by
$471,000 to reimburse the fund for certain distribution expenses.
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 year ended August 31, 1998,
distribution expenses under the Plan were limited to $4,067,000. Had no
limitation been in effect, the fund would have paid $4,681,000 in distribution
expenses under the Plan. As of August 31, 1998, accrued and unpaid
distribution expenses were $731,000.
American Funds Service Company (AFS), the transfer agent for the fund, was paid
a fee of $899,000. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $1,328,000 (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 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 August 31,
1998, aggregate amounts deferred and earnings thereon were $51,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both wholly
owned subsidiaries of CRMC. Certain Trustees and officers of the fund are or
may be considered to be affiliated with CRMC, AFS and AFD. No such persons
received any remuneration directly from the fund.
4. As of August 31, 1998, accumulated net realized loss on investments was
$89,401,000 and paid-in capital was $1,526,778,000. The fund reclassified
$365,000 from undistributed net investment income to undistributed net realized
gains for the year ended August 31, 1998.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,270,954,000 and $1,170,477,000, respectively,
during the year ended August 31, 1998.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $6,000 was paid by these credits rather than in cash.
<TABLE>
PER-SHARE DATA AND RATIOS
- --------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended August 31
--------------------------------------------
1998 1997 1996 1995 1994
--------------------------------------------
Net Asset Value, Beginning
of Year $13.42 $13.26 $13.52 $13.38 $14.64
--------------------------------------------
Income from Investment
Operations:
Net investment income .83 .86 .88 .93 .95
Net realized and unrealized
gain (loss) on investments .17 .15 (.27) .13 (1.20)
Total from investment --------------------------------------------
operations 1.00 1.01 0.61 1.06 (0.25)
--------------------------------------------
Less Distributions:
Dividends from net investment
income (.86) (.85) (.87) (.92) (.94)
Distributions from net realized
gains (.07)
--------------------------------------------
Total distributions (.86) (.85) (.87) (.92) (1.01)
--------------------------------------------
Net Asset Value, End of Year $13.56 $13.42 $13.26 $13.52 $13.38
============================================
Total Return (1) 7.68% 7.83% 4.63% 8.33%(1.80%)
Ratios/Supplemental Data:
Net assets, end of year (in
millions) $1,459 $1,338 $1,429 $1,501 $1,626
Ratio of expenses to average
net assets .76% (2) .82% .80% .78% .83%
Ratio of net income to
average net assets 6.12% 6.40% 6.53% 6.96% 6.79%
Portfolio turnover rate 79.19% 41.55% 48.25 % 71.91 %52.94 %
(1)Excludes maximum sales charge of 4.75%.
(2)Had CRMC not waived management services fees,
the fund's expense ratio would have been 0.79%
for the fiscal year ended August 31, 1998.
</TABLE>
Independent Auditors' Report
To the Board of Trustees and Shareholders
of Intermediate Bond Fund of America:
We have audited the accompanying statement of assets and liabilities of
Intermediate Bond Fund of America (the "fund"), including investment portfolio,
as of August 31, 1998, 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. 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 generally accepted auditing
standards. 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 August 31, 1998, 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 Intermediate Bond Fund of America at August 31, 1998, 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, in conformity with
generally accepted accounting principles.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Los Angeles, California
September 30, 1998
Tax Information (Unaudited)
Certain states may exempt from income taxation a portion of the dividends paid
from net investment income if derived from direct U.S. Treasury obligations.
For purposes of computing this exclusion, 21% of the dividends paid by the fund
from net investment income was derived from interest on direct U.S. Treasury
obligations.
Dividends received by retirement plans such as IRAs, Keogh-type plans, and
403(b) plans need not be reported as taxable income. However, many retirement
trusts may need this information for their annual information reporting.
Since the amounts above are reported for the FISCAL YEAR and not a CALENDAR
YEAR, shareholders should refer to their Form 1099-DIV or other tax information
which will be mailed in January 1999 to determine the CALENDAR YEAR amounts to
be included on their respective 1998 tax returns. Shareholders should consult
their tax advisers.
BOARD OF TRUSTEES
H. FREDERICK CHRISTIE, Rolling Hills Estates, California
Private investor; former President and Chief Executive Officer,
The Mission Group; former President, Southern California
Edison Company
DON R. CONLAN, South Pasadena, California
President (retired), The Capital Group Companies, Inc.
DIANE C. CREEL, Long Beach, California
President and Chief Executive Officer,
The Earth Technology Corporation
(international consulting engineering)
MARTIN FENTON, JR., San Diego, California
Chairman of the Board, Senior Resource Group, Inc.
(senior living centers management)
LEONARD R. FULLER, Marina del Rey, California
President, Fuller Consulting
(management consultants)
ABNER D. GOLDSTINE, Los Angeles, California
President 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
HERBERT HOOVER III, San Marino, California
Private investor
RICHARD G. NEWMAN, Los Angeles, California
Chairman of the Board, President and Chief Executive Officer,
AECOM Technology Corporation
(architectural engineering)
PETER C. VALLI retired from the Board of Trustees effective
March 17, 1998. He had been a Trustee of the fund since 1991.
The Trustees thank him for his many contributions to the fund.
OTHER OFFICERS
JOHN H. SMET, Los Angeles, California
Executive Vice President of the fund
Vice President, Capital Research and Management Company
MICHAEL J. DOWNER, Los Angeles, California
Vice President of the fund
Senior Vice President - Fund Business Management Group,
Capital Research and Management 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
TODD L. MILLER, Brea, California
Assistant Treasurer of the fund
Assistant Vice President - Fund Business Management Group,
Capital Research and Management Company
[The American Funds Group(r)]
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, 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.
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 December 31, 1998, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
OFFICES
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
1000 Wilshire Boulevard
Los Angeles, California 90017-2472
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
Printed on recycled paper
Litho in USA SG/AL/3848
Lit. No. IBFA-011-1098
45003/15003
