SEC. File Nos. 33-32785
811-5888
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
Registration Statement
Under
the Securities Act of 1933
Post-Effective Amendment No. 11
and
Registration Statement
Under
The Investment Company Act of 1940
Amendment No. 14
SMALLCAP WORLD FUND, INC.
(Exact Name of Registrant as specified in charter)
333 South Hope Street
Los Angeles, California 90071
(Address of principal executive offices)
Registrant's telephone number, including area code:
(213) 486-9200
Chad L. Norton
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(name and address of agent for service)
Copies to:
MICHAEL J. FAIRCLOUGH, ESQ.
O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071
(Counsel for the Registrant)
The Registrant has filed a declaration pursuant to rule 24f-2
registering an indefinite number of shares under the Securities Act of 1933.
On November 16, 1995, it filed its 24f-2 notice for fiscal 1994.
Approximate date of proposed public offering:
It is proposed that this filing become effective on December 1, 1995,
pursuant to paragraph (b) of rule 485.
SMALLCAP WORLD FUND, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Item Number of Captions in Prospectus (Part "A")
Part "A" of Form N-1A
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Summary of Expenses
3. Condensed Financial Information Financial Highlights; Investment Results
4. General Description of Registrant Investment Objective and Policies; Certain Securities and
Investment Techniques; Fund Organization and
Management
5. Management of the Fund Financial Highlights; Fund Organization and
Management; Summary of Expenses; Certain Securities and
Investment Techniques
6. Capital Stock and Other Securities Investment Objective and Policies; Certain Securities and
Investment Techniques; Fund Organization and Management;
Dividends, Distributions and Taxes
7. Purchase of Securities Being Offered Purchasing Shares; Fund Organization and Management;
Shareholder Services
8. Redemption or Repurchase Redeeming Shares
9. Legal Proceedings N/A
</TABLE>
<TABLE>
<CAPTION>
Item Number of Captions in Statement of
Part "B" of Form N-1A Additional Information (Part "B")
<S> <C> <C>
10. Cover Page Cover
11. Table of Contents Table of Contents
12. General Information and History Fund Organization and Management (Part "A")
13. Investment Objectives and Policies Certain Securities and Investment Techniques (Part "A");
Investment Policies; Investment Restrictions
14. Management of the Registrant Fund Directors and Officers; Management
15. Control Persons and Principal Holders Fund Directors and Officers
of Securities
16. Investment Advisory and Other Services Management; Fund Organization and Management (Part "A");
General Information
17. Brokerage Allocation and Other Practices Execution of Portfolio Transactions
18. Capital Stock and Other Securities N/A
19. Purchase, Redemption and Pricing of Purchase of Shares; Purchasing Shares (Part "A"); Shareholder
Securities Being Offered Account Services and Privileges
20. Tax Status Dividends, Distributions and Federal Taxes
21. Underwriter Management -- Principal Underwriter
22. Calculation of Performance Data Investment Results
23. Financial Statements Financial Statements
</TABLE>
<TABLE>
<CAPTION>
Item in Part "C"
<S> <C>
24. Financial Statements and Exhibits
25. Persons Controlled by or under
Common Control with Registrant
26. Number of Holders of Securities
27. Indemnification
28. Business and Other Connections of
Investment Adviser
29. Principal Underwriters
30. Location of Accounts and Records
31. Management Services
32. Undertakings
Signature Page
</TABLE>
Prospectus
SMALLCAP
World Fund(R)
AN OPPORTUNITY FOR LONG-TERM
GROWTH OF CAPITAL PRIMARILY
THROUGH THE STOCKS OF SMALLER
COMPANIES IN THE UNITED STATES--
AND AROUND THE WORLD
[LOGO OF THE AMERICAN FUNDS GROUP(R)]
December 1, 1995
SMALLCAP WORLD FUND, INC.
333 South Hope Street
Los Angeles, California 90071
The fund's investment objective is to achieve long-term growth of capital. It
seeks to achieve this objective by investing primarily in equity securities of
issuers with relatively small market capitalizations located in various
countries. Investing in smaller capitalization stocks and securities of
issuers in various countries involves certain opportunities and risks that are
different from those associated with investing solely in larger capitalization
stocks and securities of issuers based in the United States.
This prospectus presents information you should know before investing in the
fund. It should be retained for future reference.
You may obtain the statement of additional information for the fund dated
December 1, 1995, which contains the fund's financial statements, without
charge by writing to the Secretary of the fund at the above address or
telephoning 800/421-0180. These requests will be honored within three business
days of receipt.
SHARES OF THE FUND 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. THE
PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
35-010-1295
<PAGE>
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SUMMARY OF
EXPENSES
Average annual expenses
paid over a 10-year
period would be
approximately $19 per
year, assuming a $1,000
investment and a 5%
annual return with the
maximum sales charge.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary of Expenses........................... 2
Financial Highlights.......................... 3
Investment Objective and Policies............. 3
Certain Securities and Investment Techniques.. 4
Investment Results............................ 7
Dividends, Distributions and Taxes............ 7
Fund Organization and Management.............. 8
The American Funds Shareholder Guide.......... 11-19
Purchasing Shares............................ 11
Reducing Your Sales Charge................... 14
Shareholder Services......................... 15
Redeeming Shares............................. 17
Retirement Plans............................. 19
</TABLE>
IMPORTANT PHONE NUMBERS
Shareholder Services
800/421-0180 ext. 1
Dealer Services
800/421-9900 ext. 11
American FundsLine(R)
800/325-3590
(24-hour information)
This table is designed to help you understand the costs of investing in the
fund. These are historical expenses; your actual expenses may vary.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum sales charge on purchases
(as a percentage of offering price)................................... 5.75%/1/
</TABLE>
The fund has no sales charge on reinvested dividends, deferred sales
charge,/2/ redemption fees or exchange fees.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<S> <C>
Management fees........................................................ 0.70%
12b-1 expenses......................................................... 0.22%/3/
Other expenses (including audit, legal, shareholder services,
transfer agent and custodian expenses)................................ 0.21%
Total fund operating expenses.......................................... 1.13%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following cumulative
expenses on a $1,000 investment,
assuming a 5% annual return./4/ $68 $91 $116 $187
</TABLE>
/1/ Sales charges are reduced for certain large purchases. (See "The American
Funds Shareholder Guide: Purchasing Shares--Sales Charges.")
/2/ Any employer-sponsored 403(b) plan or defined contribution plan qualified
under Section 401(a) of the Internal Revenue Code including a "401(k)" plan
with 200 or more eligible employees or any other purchaser investing at
least $1 million in shares of the fund (or in combination with shares of
other funds in The American Funds Group other than the money market funds)
may purchase shares at net asset value; however, a contingent deferred sales
charge of 1% applies on certain redemptions made within 12 months following
such purchases. (See "The American Funds Shareholder Guide: Redeeming
Shares--Contingent Deferred Sales Charge.")
/3/ These expenses may not exceed 0.30% of the fund's average net assets
annually. (See "Fund Organization and Management--Plan of Distribution.")
Due to these distribution expenses, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers.
/4/ Use of this assumed 5% return is required by the Securities and Exchange
Commission; it is not an illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
2
<PAGE>
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FINANCIAL The following information relating to the past six
HIGHLIGHTS periods has been audited by Deloitte & Touche LLP,
independent accountants, whose unqualified report is
(For a share included in the statement of additional information.
outstanding This information should be read in conjunction with the
throughout the financial statements and accompanying notes which are
fiscal year) also included in the statement of additional
information.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
-----------------------------------------------
1995 1994 1993 1992 1991 1990/1/
------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period........... $23.61 $22.72 $18.01 $17.60 $13.26 $15.08
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .22 .09 .06 .14 .18 .26
Net realized and
unrealized gain (loss)
on investments......... 3.79 1.83 5.56 .38 4.56 (2.08)
------ ------ ------ ------ ------ ------
Total income from in-
vestment operations... 4.01 1.92 5.62 .52 4.74 (1.82)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net in-
vestment income........ (.16) (.06) (.08) (.11) (.40) --
Distributions from net
realized gains......... (1.35) (.97) (.83) -- -- --
------ ------ ------ ------ ------ ------
Total distributions.... (1.51) (1.03) (.91) (.11) (.40) --
------ ------ ------ ------ ------ ------
Net Asset Value, End of
Period................... $26.11 $23.61 $22.72 $18.01 $17.60 $13.26
====== ====== ====== ====== ====== ======
Total Return/2/........... 18.59% 8.60% 32.46% 2.95% 36.43% (12.07)%/3/
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of pe-
riod (in millions)..... $4,625 $3,497 $2,247 $1,255 $798 $571
Ratio of expenses to av-
erage net assets....... 1.13% 1.12% 1.15% 1.21% 1.31% .49%/3/
Ratio of net income to
average net assets..... .97% .38% .33% .85% 1.11% 1.70%/3/
Portfolio turnover rate. 45.63% 29.43% 25.00% 23.10% 19.26% 1.91%/3/
</TABLE>
- -------------------
/1/ Period from 4/30/90-9/30/90 (initial period of operations).
/2/ This was calculated without deducting a sales charge. The maximum sales
charge is 5.75% of the fund's offering price.
/3/ These amounts are based on operations for the period shown and,
accordingly, not representative of a full year's operations.
INVESTMENT The fund's investment objective is to provide long-term
OBJECTIVE growth of capital. It seeks to achieve its objective by
AND POLICIES investing primarily in equity securities of companies
with relatively small market capitalizations (share
The fund's goal is price times number of equity securities outstanding).
to provide you In selecting investments, the fund emphasizes companies
with long-term that are believed by the fund's investment adviser,
growth of capital. Capital Research and Management Company, to have the
potential for growth (based on strength of management,
new products or new services, etc.). Current income is
not a consideration.
The fund's investments typically have individual market
capitalizations of approximately $50 million to
$1.2 billion. The fund will not normally purchase
shares of any company, or add to any existing holding,
with a market capitalization of more than $1.2 billion.
However, the fund will not necessarily sell stocks
because they exceed this limit through appreciation.
The fund's assets may also be held in cash or high-
quality cash equivalents (including certificates of
deposit, bankers acceptances, commercial paper, short-
term notes or repurchase agreements), government or
corporate debt securities denominated in U.S. dollars
or other currencies for liquidity purposes or when, in
the opinion of Capital Research and Management Company,
prevailing market and economic
3
<PAGE>
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conditions indicate that it is desirable to do so (for
example, for temporary defensive purposes). Under
normal market conditions the fund will invest no more
than 35% of its total assets in such securities.
The fund's investment restrictions (which are described
in the statement of additional information) and
objective cannot be changed without shareholder
approval. All other investment practices may be changed
by the board of directors.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES AND THE SPECIAL RISKS ASSOCIATED WITH
INVESTING OUTSIDE THE U.S. DESCRIBED BELOW.
CERTAIN SECURITIES INVESTING IN SMALLER CAPITALIZATION STOCKS Capital
AND INVESTMENT Research and Management Company believes that the
TECHNIQUES issuers of smaller capitalization stocks often have
sales and earnings growth rates which exceed those of
Investing in larger companies and that such growth rates may in turn
smaller be reflected in more rapid share price appreciation.
capitalization However, investing in smaller capitalization stocks can
stocks involves involve greater risk than is customarily associated
greater risks than with investing in stocks of larger, more established
investing in the companies. For example, smaller capitalization
stocks of larger, companies often have limited product lines, markets, or
more established financial resources, may be dependent for management on
companies. one or a few key persons, and can be more susceptible
to losses. Also, their securities may be thinly traded
(and therefore have to be sold at a discount from
current prices or sold in small lots over an extended
period of time), may be followed by fewer investment
research analysts, and may be subject to wider price
swings thus creating a greater chance of loss than
securities of larger capitalization companies.
Transaction costs in stocks of smaller capitalization
companies may be higher than those of larger
capitalization companies. Because the fund emphasizes
the stocks of issuers with smaller market
capitalizations (by U.S. standards), it can be expected
to have more difficulty obtaining information about the
issuers or valuing or disposing of its securities than
it would if it were to concentrate on more widely held
stocks.
INVESTING AROUND THE WORLD The fund's assets are
invested globally which, in the opinion of Capital
Research and Management Company, enhances the fund's
ability to meet its objective--long-term growth of
capital.
Of course, investing globally involves special risks,
particularly in certain developing countries, caused
by, among other things: fluctuating currency values;
less stringent accounting, auditing, and financial
reporting regulations and practices in some countries;
changing local and regional economic, political, and
social conditions; differing securities
4
<PAGE>
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market structures; and various administrative
difficulties such as delays in clearing and settling
portfolio transactions or in receiving payment of
dividends.
However, in the opinion of Capital Research and
Management Company, global investing also can reduce
certain portfolio market risks due to greater
diversification opportunities.
Additional costs could be incurred in connection with
the fund's investment activities outside the U.S.
Brokerage commissions are generally higher outside the
U.S., and the fund will bear certain expenses in
connection with its currency transactions. Furthermore,
increased custodian costs may be associated with the
maintenance of assets in certain jurisdictions.
Under current market conditions, the fund expects that
it will not invest more than approximately 50% of its
assets (taken at cost) in companies based outside the
U.S., although there is no specific limit on the fund's
non-U.S. investments (except as noted below). At
September 30, 1995, the fund maintained investments in
31 countries, and 31% of its assets (approximately 38%
of its equity investments) were in issues outside the
U.S. In making its investments in companies outside the
U.S., the fund does not intend to emphasize any
particular country or region. Under normal market
conditions the fund will invest at least 65% of its
total assets in equity securities of smaller
capitalization issuers as described above, and such
issuers will be located in at least three countries.
INVESTING IN FIXED-INCOME SECURITIES When prevailing
market, economic, political or currency conditions
warrant, assets may also be invested in securities
convertible into common stocks, straight debt
securities (generally rated in the top three quality
categories by any national rating service or determined
to be of equivalent quality by Capital Research and
Management Company), government securities, or
nonconvertible preferred stocks. If market interest
rates increase, such fixed-income securities generally
decline in value and vice versa. These securities may
also be issued by entities domiciled outside the U.S.
The fund's investments in debt securities may be
denominated in currencies other than the U.S. dollar.
If the currency in which the security is denominated
declines against the U.S. dollar, the dollar value of
the security will decline and vice versa. The fund may
hold a portion of its assets in U.S. dollars and other
currencies and in cash equivalents of either U.S.
issuers or issuers domiciled outside the U.S. (See the
statement of additional information for a description
of cash equivalents.)
CURRENCY TRANSACTIONS The fund has the ability to hold
currencies and enter into forward currency contracts to
protect against changes in currency exchange rates.
However, there is no assurance that such strategies
will be successful. Moreover, due to the expenses
involved, the fund will not generally attempt to
protect against all potential changes in exchange
rates.
5
<PAGE>
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MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic invest-
ment philosophy of Capital Research and Management Com-
pany is to seek fundamental values at reasonable pric-
es, using a system of multiple portfolio counselors in
managing mutual fund assets. Under this system the
portfolio of the fund is divided into segments, which
are managed by individual counselors. Each counselor
decides how their segment will be invested (within the
limits provided by the fund's objective and policies
and by Capital Research and Management Company's in-
vestment committee). In addition, Capital Research and
Management Company's research professionals make in-
vestment decisions with respect to a portion of the
fund's portfolio. The primary individual portfolio
counselors for the fund are listed below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
YEARS OF EXPERIENCE AS
INVESTMENT PROFESSIONAL
YEARS OF EXPERIENCE AS (APPROXIMATE)
PORTFOLIO COUNSELOR (AND
PORTFOLIO COUNSELORS RESEARCH PROFESSIONAL, WITH CAPITAL
FOR IF APPLICABLE) FOR RESEARCH AND
SMALLCAP PRIMARY TITLE(S) SMALLCAP MANAGEMENT
WORLD FUND WORLD FUND COMPANY OR TOTAL
(APPROXIMATE) ITS AFFILIATES YEARS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William R. Grimsley President, Director Since the fund began 26 years 33 years
and Principal Execu- operations
tive Officer of the
fund. Senior Vice
President and Director,
Capital Research and
Management Company
- ------------------------------------------------------------------------------------------------------------
Gordon Crawford Senior Vice President Since the fund began 24 years 24 years
of the fund. Senior operations
Vice President and
Director, Capital
Research Company*
- ------------------------------------------------------------------------------------------------------------
Mark E. Denning Senior Vice President, Four years (in addition to 13 years 13 years
Capital Research Company* one year as a research
professional prior to
becoming a portfolio
counselor for the fund)
- ------------------------------------------------------------------------------------------------------------
Robert W. Lovelace Vice President, Capi- Two years (in addition to 10 years 10 years
tal Research Company* four years as a research
professional prior to
becoming a portfolio
counselor for the fund)
- ------------------------------------------------------------------------------------------------------------
James F. Rothenberg President and Direc- One year 25 years 25 years
tor, Capital Research
and Management Company
- ------------------------------------------------------------------------------------------------------------
R. Michael Shanahan Chairman and Principal Since the fund began 31 years 31 years
Executive Officer, operations
Capital Research and
Management Company
- ------------------------------------------------------------------------------------------------------------
THE FUND BEGAN OPERATIONS ON APRIL 30, 1990
*COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
- ------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
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INVESTMENT The fund may from time to time compare its investment
RESULTS results to various unmanaged indices or other mutual
funds in reports to shareholders, sales literature and
The fund has advertisements. The results may be calculated on a to-
averaged a total tal return, yield and/or distribution rate basis for
return of 13.49% a various periods, with or without sales charges. Results
year (assuming the calculated without a sales charge will be higher. Total
maximum sales returns assume the reinvestment of all dividends and
charge was paid) capital gain distributions. The fund's distribution
under Capital rate is calculated by dividing the dividends paid by
Research and the fund over the last 12 months by the sum of the
Management month-end price and the capital gains paid over the
Company's last 12 months. The SEC yield reflects income earned by
management the fund, while the distribution rate reflects divi-
(April 30, 1990 dends paid by the fund. Among the elements used to cal-
through September culate the SEC yield are the dividend and interest in-
30, 1995). come earned and expenses paid by the fund, whereas the
income paid to shareholders is used to calculate the
distribution rate.
The fund's total return over the past 12 months, aver-
age annual return over the past five years and average
lifetime return, as of September 30, 1995, were 11.77%,
17.69% and 13.49%, respectively. These results were
calculated in accordance with Securities and Exchange
Commission rules which require that the maximum sales
charge be deducted. Of course, past results are not an
indication of future results. Further information re-
garding the fund's investment results is contained in
the fund's annual report which may be obtained without
charge by writing to the Secretary of the fund at the
address indicated on the cover of this prospectus.
DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS in June and December. Capital gains, if any, are usu-
AND TAXES ally distributed in December. When a dividend or capi-
tal gain is distributed, the net asset value per share
Income is reduced by the amount of the payment.
distributions are
usually made FEDERAL TAXES The fund intends to operate as a "regu-
inJune and lated investment company" under the Internal Revenue
December. Code. In any fiscal year in which the fund so qualifies
and distributes to shareholders all of its net invest-
ment income and net capital gains, the fund itself is
relieved of federal income tax.
All dividends and capital gains are taxable whether
they are reinvested or received in cash--unless you are
exempt from taxation or entitled to tax deferral. Early
each year, you will be notified as to the amount and
federal tax status of all dividends and capital gains
paid during the prior year. Such dividends and capital
gains may also be subject to state or local taxes.
IF YOU HAVE NOT FURNISHED A CERTIFIED CORRECT TAXPAYER
IDENTIFICATION NUMBER (GENERALLY YOUR SOCIAL SECURITY
NUMBER) AND HAVE NOT CERTIFIED THAT WITHHOLDING DOES
NOT APPLY, OR IF THE INTERNAL REVENUE SERVICE HAS NOTI-
FIED THE FUND THAT THE TAXPAYER IDENTIFICATION NUMBER
LISTED ON YOUR ACCOUNT IS INCORRECT ACCORDING TO THEIR
RECORDS OR THAT YOU ARE
7
<PAGE>
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SUBJECT TO BACKUP WITHHOLDING, FEDERAL LAW GENERALLY
REQUIRES THE FUND TO WITHHOLD 31% FROM ANY DIVIDENDS
AND/OR REDEMPTIONS (INCLUDING EXCHANGE REDEMPTIONS).
Amounts withheld are applied to your federal tax lia-
bility; a refund may be obtained from the Service if
withholding results in overpayment of taxes. Federal
law also requires the fund to withhold 30% or the ap-
plicable tax treaty rate from dividends paid to certain
nonresident alien, non-U.S. partnership and non-U.S.
corporation shareholder accounts.
The fund may be required to pay withholding and other
taxes imposed by various countries in connection with
its investments outside the U.S., generally at rates
from 10% to 40%, which would reduce the fund's invest-
ment income.
This is a brief summary of some of the tax laws that
affect your investment in the fund. Please see the
statement of additional information and your tax ad-
viser for further information.
FUND FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
ORGANIZATION end, diversified management investment company, was or-
AND ganized as a Maryland corporation in 1989. The fund's
MANAGEMENT board supervises fund operations and performs duties
required by applicable state and federal law. Members
The fund is a of the board who are not employed by Capital Research
member of The and Management Company or its affiliates are paid for
American Funds services rendered to the fund as described in the
Group, which is statement of additional information. They may elect to
managed by one of defer all or a portion of these fees through a deferred
the largest and compensation plan in effect for the fund. Shareholders
most experienced have one vote per share owned and, at the request of
investment the holders of at least 10% of the shares, the fund
advisers. will hold a meeting at which any member of the board
could be removed by a majority vote. There will not
usually be a shareholder meeting in any year except,
for example, when the election of the board is required
to be acted upon by shareholders under the Investment
Company Act of 1940.
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071, and at 135 South State College Boule-
vard, Brea, CA 92621. (See "The American Funds Share-
holder Guide: Purchasing Shares--Investment Minimums
and Fund Numbers" for a listing of funds in The Ameri-
can Funds Group.) Capital Research and Management Com-
pany manages the investment portfolio and business af-
fairs of the fund and receives a fee at the annual
rates of 0.80% on the first $1 billion of the fund's
net assets, 0.70% on net assets in excess of $1 billion
but not exceeding $2 billion, 0.67% on net assets in
excess of $2 billion but not
8
<PAGE>
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exceeding $3 billion, 0.65% on net assets in excess of
$3 billion but not exceeding $5 billion, 0.635% on net
assets in excess of $5 billion but not exceeding $8
billion, and 0.625% on net assets in excess of $8 bil-
lion.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
Capital Research and Management Company and its affili-
ated companies have adopted a personal investing policy
that is consistent with the recommendations contained
in the report dated May 9, 1994 issued by the Invest-
ment Company Institute's Advisory Group on Personal In-
vesting. (See the statement of additional information.)
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter mar-
ket, purchases and sales are transacted directly with
principal market-makers except in those circumstances
where it appears better prices and executions are
available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers that
have sold shares of the fund or have provided
investment research, statistical, and other related
services for the benefit of the fund and/or other funds
served by Capital Research and Management Company.
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors, Inc. is lo-
cated at 333 South Hope Street, Los Angeles, CA 90071,
135 South State College Boulevard, Brea, CA 92621, 8000
IH-10 West, San Antonio, TX 78230, 8332 Woodfield
Crossing Boulevard, Indianapolis, IN 46240, and 5300
Robin Hood Road, Norfolk, VA 23513. Telephone conversa-
tions with American Funds Distributors may be recorded
or monitored for verification, recordkeeping and qual-
ity assurance purposes.
PLAN OF DISTRIBUTION The fund has a plan of distribu-
tion or "12b-1 Plan" under which it may finance activi-
ties primarily intended to sell shares, provided the
categories of expenses are approved in advance
9
<PAGE>
- --------------------------------------------------------------------------------
by the board and the expenses paid under the plan were
incurred within the last 12 months and accrued while
the plan is in effect. Expenditures by the fund under
the plan may not exceed 0.30% of its average net assets
annually (0.25% of which may be for service fees). See
"The American Funds Shareholder Guide: Purchasing
Shares--Sales Charges" below.
TRANSFER AGENT American Funds Service Company, a wholly
owned subsidiary of Capital Research and Management
Company, is the transfer agent and performs shareholder
service functions. It was paid a fee of $4,265,000 for
the fiscal year ended September 30, 1995. Telephone
conversations with American Funds Service Company may
be recorded or monitored for verification, recordkeep-
ing and quality assurance purposes.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
<TABLE>
<CAPTION>
SERVICE ADDRESS AREAS SERVED
AREA
--------------------------------------------------------
<S> <C> <C>
WEST P.O. Box 2205 AK, AZ, CA, HI, ID,
Brea, CA 92622-2205 MT, NV, OR, UT, WA and
Fax: 714/671-7080 outside the U.S.
--------------------------------------------------------
CENTRAL- P.O. Box 659522 AR, CO, IA, KS, LA,
WEST San Antonio, MN, MO, ND, NE, NM,
TX 78265-9522 OK, SD, TX, and WY
Fax: 210/530-4050
--------------------------------------------------------
CENTRAL- P.O. Box 6007 AL, IL, IN, KY, MI,
EAST Indianapolis, MS, OH, TN and WI
IN 46206-6007
Fax: 317/735-6620
--------------------------------------------------------
EAST P.O. Box 2280 CT, DE, FL, GA, MA,
Norfolk, MD, ME, NC, NH, NJ,
VA 23501-2280 NY, PA, RI, SC, VA,
Fax: 804/670-4773 VT, WV and Washington,
D.C.
--------------------------------------------------------
</TABLE>
ALL SHAREHOLDERS MAY CALL AMERICAN FUNDS SERVICE
COMPANY AT 800/421-0180 FOR SERVICE.
--------------------------------------------------------
[MAP OF UNITED STATES]
--------------------------------------------------------
West (light grey); Central-West (white); Central-East
(dark grey), East (red)
10
<PAGE>
THE AMERICAN FUNDS SHAREHOLDERS GUIDE
----------------------------------------------------------
PURCHASING SHARES METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
----------------------------------------------------------
Your investment See "Investment $50 minimum (except
dealer can help Minimums and Fund where a lower
you establish your Numbers" for minimum is noted
account--and help initial investment under "Investment
you add to it minimums. Minimums and Fund
whenever you like. Numbers").
---------------------------------------------------------
By contacting Visit any invest- Mail directly to
your invest- ment dealer who is your investment
ment dealer registment dealer dealer's address
who is registered printed on your
in the state where account statement.
the purchase is
made and who has
a sales agreement
with American Funds
Distributors.
---------------------------------------------------------
By mail Make your check Fill out the account
payable to the additions form at
fund and mail to the bottom of a re-
the address cent account state-
indicated on the ment, make your
account check payable to the
application. fund, write your
Please indicate account number on
an investment your check, and mail
dealer on the the check and form
account in the envelope pro-
application. vided with your
account statement.
---------------------------------------------------------
By wire Call 800/421-0180 Your bank should
to obtain your wire your additional
account number(s), investments in the
if necessary. same manner as
Please indicate an described under
investment dealer "Initial Investment."
on the account.
Instruct your
bank to wire
funds to:
Wells Fargo Bank
155 Fifth Street
Sixth Floor
San Francisco,
CA 94106
(ABA #121000248)
For credit to the
account of:
American Funds
Service Company
a/c #4600-076178
(fund name)
(your fund
acct. no.)
----------------------------------------------------------
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE
RIGHT TO REJECT ANY PURCHASE ORDER.
SHARE PRICE Shares are purchased at the offering price
next determined after the order is received by the fund
or American Funds Service Company. In the case of orders
sent directly to the fund or American Funds Service
Company, an investment dealer MUST be indicated. This
price is the net asset value plus a sales charge, if
applicable. Dealers are responsible for promptly
transmitting orders. (See the statement of additional
information under "Purchase of Shares--Price of
Shares.")
The net asset value per share is determined as of the
close of trading (currently 4:00 p.m., New York time) on
each day the New York Stock Exchange is open. The
current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share. The net asset value
per share of the money market funds normally will remain
constant at $1.00 based on the funds' current practice
of valuing their shares using the penny-rounding method
in accordance with rules of the Securities and Exchange
Commission.
SHARE CERTIFICATES Shares are credited to your account
and certificates are not issued unless specifically
requested. This eliminates the costly problem of lost or
destroyed certificates.
11
<PAGE>
- -------------------------------------------------------------------------------
If you would like certificates issued, please request
them by writing to American Funds Service Company.
There is usually no charge for issuing certificates in
reasonable denominations. CERTIFICATES ARE NOT AVAIL-
ABLE FOR THE MONEY MARKET FUNDS.
INVESTMENT MINIMUMS AND FUND NUMBERS Here are the
minimum initial investments required by the funds in
The American Funds Group along with fund numbers for
use with our automated phone line, American
FundsLine(R) (see description below):
<TABLE>
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
- ---- ---------- ------
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund(R).................................. $1,000 02
American Balanced Fund(R)...................... 500 11
American Mutual Fund(R)........................ 250 03
Capital Income Builder(R)...................... 1,000 12
Capital World Growth and Income Fund(SM)....... 1,000 33
EuroPacific Growth Fund(R)..................... 250 16
Fundamental Investors(SM)...................... 250 10
The Growth Fund of America(R).................. 1,000 05
The Income Fund of America(R).................. 1,000 06
The Investment Company of America(R)........... 250 04
The New Economy Fund(R)........................ 1,000 14
New Perspective Fund(R)........................ 250 07
SMALLCAP World Fund(SM)........................ 1,000 35
Washington Mutual Investors Fund(SM)........... 250 01
<CAPTION>
MINIMUM
INITIAL FUND
FUND INVESTMENT NUMBER
- ---- ---------- ------
<S> <C> <C>
BOND FUNDS
American High-Income Municipal Bond Fund(SM)..... $1,000 40
American High-Income Trust(R).................... 1,000 21
The Bond Fund of America(SM)..................... 1,000 08
Capital World Bond Fund(R)....................... 1,000 31
Intermediate Bond Fund of America(R)............. 1,000 23
Limited Term Tax-Exempt Bond Fund of America(SM). 1,000 43
The Tax-Exempt Bond Fund of America(SM).......... 1,000 19
The Tax-Exempt Fund of California(R)*............ 1,000 20
The Tax-Exempt Fund of Maryland(R)*.............. 1,000 24
The Tax-Exempt Fund of Virginia(R)*.............. 1,000 25
U.S. Government Securities Fund(SM).............. 1,000 22
MONEY MARKET FUNDS
The Cash Management Trust of America(R).......... 2,500 09
The Tax-Exempt Money Fund of America(SM)......... 2,500 39
The U.S. Treasury Money Fund of America(SM)...... 2,500 49
</TABLE>
--------
*Available only in certain states.
For retirement plan investments, the minimum is $250,
except that the money market funds have a minimum of
$1,000 for individual retirement accounts (IRAs). Mini-
mums are reduced to $50 for purchases through "Auto-
matic Investment Plans" (except for the money market
funds) or to $25 for purchases by retirement plans
through payroll deductions and may be reduced or waived
for shareholders of other funds in The American Funds
Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS RETIREMENT
PLAN INVESTMENTS. The minimum is $50 for additional in-
vestments (except as noted above).
SALES CHARGES The sales charges you pay when purchasing
the stock, stock/bond, and bond funds of The American
Funds Group are set forth below. The money market funds
of The American Funds Group are offered at net asset
value. (See "Investment Minimums and Fund Numbers" for
a listing of the funds.)
12
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEALER
SALES CHARGE AS CONCESSION
PERCENTAGE OF THE: AS PERCENTAGE
------------------ OF THE
AMOUNT OF PURCHASE NET AMOUNT OFFERING OFFERING
AT THE OFFERING PRICE INVESTED PRICE PRICE
--------------------- ---------- -------- -------------
<S> <C> <C> <C>
STOCK AND STOCK/BOND FUNDS
Less than $50,000...... 6.10% 5.75% 5.00%
$50,000 but less than
$100,000.............. 4.71 4.50 3.75
BOND FUNDS
Less than $25,000...... 4.99 4.75 4.00
$25,000 but less than
$50,000............... 4.71 4.50 3.75
$50,000 but less than
$100,000.............. 4.17 4.00 3.25
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000. 3.63 3.50 2.75
$250,000 but less than $500,000. 2.56 2.50 2.00
$500,000 but less than $1,000,000. 2.04 2.00 1.60
$1,000,000 or more..... none none (see below)
</TABLE>
Commissions of up to 1% will be paid to dealers who
initiate and are responsible for purchases of $1
million or more, for purchases by any employer-
sponsored 403(b) plan or defined contribution plan
qualified under Section 401(a) of the Internal Revenue
Code including a "401(k)" plan with 200 or more
eligible employees (paid pursuant to the fund's plan of
distribution), and for purchases made at net asset
value by certain retirement plans of organizations with
collective retirement plan assets of $100 million or
more as set forth in the statement of additional
information (paid by American Funds Distributors).
American Funds Distributors, at its expense (from a
designated percentage of its income), will, during the
1996 calendar year, provide additional promotional
incentives to dealers. Currently these incentives are
limited to the top one hundred dealers who have sold
shares of the fund or other funds in The American Funds
Group. These incentive payments will be based on a pro
rata share of a qualifying dealer's sales. American
Funds Distributors will, on an annual basis, determine
the advisability of continuing these promotional
incentives.
Any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees or any other purchaser
investing at least $1 million in shares of the fund (or
in combination with shares of other funds in The
American Funds Group other than the money market funds)
may purchase shares at net asset value; however, a
contingent deferred sales charge of 1% is imposed on
certain redemptions made within one year of the
purchase. (See "Redeeming Shares--Contingent Deferred
Sales Charge.")
Qualified dealers currently are paid a continuing
service fee not to exceed 0.25% of average net assets
(0.15% in the case of the money market funds) annually
in order to promote selling efforts and to
13
<PAGE>
- -------------------------------------------------------------------------------
compensate them for providing certain services. (See
"Fund Organization and Management--Plan of
Distribution.") These services include processing
purchase and redemption transactions, establishing
shareholder accounts and providing certain information
and assistance with respect to the fund.
NET ASSET VALUE PURCHASES The stock, stock/bond and
bond funds may sell shares at net asset value to: (1)
current or retired directors, trustees, officers and
advisory board members of the funds managed by Capital
Research and Management Company, employees of
Washington Management Corporation, employees and
partners of The Capital Group Companies, Inc. and its
affiliated companies, certain family members of the
above persons, and trusts or plans primarily for such
persons; (2) current registered representatives,
retired registered representatives with respect to
accounts established while active, or full-time
employees (and their spouses, parents, and children) of
dealers who have sales agreements with American Funds
Distributors (or who clear transactions through such
dealers) and plans for such persons or the dealers; (3)
companies exchanging securities with the fund through a
merger, acquisition or exchange offer; (4) trustees or
other fiduciaries purchasing shares for certain
retirement plans of organizations with retirement plan
assets of $100 million or more; (5) insurance company
separate accounts; (6) accounts managed by subsidiaries
of The Capital Group Companies, Inc.; and (7) The
Capital Group Companies, Inc., its affiliated companies
and Washington Management Corporation. Shares are
offered at net asset value to these persons and
organizations due to anticipated economies in sales
effort and expense.
REDUCING AGGREGATION Sales charge discounts are available for
YOUR SALES certain aggregated investments. Qualifying investments
CHARGE include those by you, your spouse and your children
under the age of 21, if all parties are purchasing
You and your shares for their own account(s), which may include
immediate family purchases through employee benefit plan(s) such as an
may combine IRA, individual-type 403(b) plan or single-participant
investments to Keogh-type plan or by a business solely controlled by
reduce your costs. these individuals (for example, the individuals own the
entire business) or by a trust (or other fiduciary
arrangement) solely for the benefit of these
individuals. Individual purchases by a trustee(s) or
other fiduciary(ies) may also be aggregated if the
investments are (1) for a single trust estate or
fiduciary account, including an employee benefit plan
other than those described above or (2) made for two or
more employee benefit plans of a single employer or of
affiliated employers as defined in the Investment
Company Act of 1940, again excluding employee benefit
plans described above, or (3) for a diversified common
trust fund or other diversified pooled account not
specifically formed for the purpose of accumulating
fund shares. Purchases made for nominee or street name
accounts (securities held in the name of an investment
dealer or another nominee such as a bank trust
department instead of the customer) may not be
aggregated with those made for
14
<PAGE>
- -------------------------------------------------------------------------------
other accounts and may not be aggregated with other
nominee or street name accounts unless otherwise
qualified as described above.
CONCURRENT PURCHASES To qualify for a reduced sales
charge, you may combine concurrent purchases of two or
more funds in The American Funds Group, except direct
purchases of the money market funds. (Shares of the
money market funds purchased through an exchange,
reinvestment or cross-reinvestment from a fund having a
sales charge do qualify.) For example, if you
concurrently invest $25,000 in one fund and $25,000 in
another, the sales charge would be reduced to reflect a
$50,000 purchase.
RIGHT OF ACCUMULATION The sales charge for your invest-
ment may also be reduced by taking into account the
current value of your existing holdings in The American
Funds Group. Direct purchases of the money market funds
are excluded. (See account application.)
STATEMENT OF INTENTION You may reduce sales charges on
all investments by meeting the terms of a statement of
intention, a non-binding commitment to invest a certain
amount in fund shares subject to a commission within a
13-month period. Five percent of the statement amount
will be held in escrow to cover additional sales
charges which may be due if your total investments over
the statement period are insufficient to qualify for a
sales charge reduction. (See account application and
the statement of additional information under "Purchase
of Shares--Statement of Intention.")
YOU MUST LET YOUR INVESTMENT DEALER OR AMERICAN FUNDS
SERVICE COMPANY KNOW IF YOU QUALIFY FOR A REDUCTION IN
YOUR SALES CHARGE USING ONE OR ANY COMBINATION OF THE
METHODS DESCRIBED ABOVE.
SHAREHOLDER AUTOMATIC INVESTMENT PLAN You may make regular monthly
SERVICES or quarterly investments through automatic charges to
your bank account. Once a plan is established, your ac-
The fund offers count will normally be charged by the 10th day of the
you a valuable month during which an investment is made (or by the
array of services 15th day of the month in the case of any retirement
designed to plan for which Capital Guardian Trust Company--another
increase the affiliate of The Capital Group Companies, Inc.--acts as
convenience and trustee or custodian).
flexibility of
your investment-- AUTOMATIC REINVESTMENT Dividends and capital gain dis-
services you can tributions are reinvested in additional shares at no
use to alter your sales charge unless you indicate otherwise on the
investment program account application. You also may elect to have divi-
as your needs and dends and/or capital gain distributions paid in cash by
circumstances informing the fund, American Funds Service Company or
change. your investment dealer.
CROSS-REINVESTMENT You may cross-reinvest dividends or
dividends and capital gain distributions paid by one
fund into another fund in The American Funds Group,
subject to conditions outlined in the statement of ad-
ditional information. Generally, to use this service
the value of your account in the paying fund must equal
at least $5,000.
15
<PAGE>
- -------------------------------------------------------------------------------
EXCHANGE PRIVILEGE You may exchange shares into other
funds in The American Funds Group. Exchange purchases
are subject to the minimum investment requirements of
the fund purchased and no sales charge generally
applies. However, exchanges of shares from the money
market funds are subject to applicable sales charges on
the fund being purchased, unless the money market fund
shares were acquired by an exchange from a fund having
a sales charge, or by reinvestment or cross-
reinvestment of dividends or capital gain
distributions.
You may exchange shares by writing to American Funds
Service Company (see "Redeeming Shares"), by contacting
your investment dealer, by using American FundsLine(R)
(see "Shareholder Services--American FundsLine(R)" be-
low), or by telephoning 800/421-0180 toll-free, faxing
(see "Transfer Agent" above for the appropriate fax
numbers) or telegraphing American Funds Service Compa-
ny. (See "Telephone Redemptions and Exchanges" below.)
Shares held in corporate-type retirement plans for
which Capital Guardian Trust Company serves as trustee
may not be exchanged by telephone, fax or telegraph.
Exchange redemptions and purchases are processed simul-
taneously at the share prices next determined after the
exchange order is received. (See "Purchasing Shares--
Share Price.") THESE TRANSACTIONS HAVE THE SAME TAX
CONSEQUENCES AS ORDINARY SALES AND PURCHASES.
AUTOMATIC EXCHANGES You may automatically exchange
shares (in amounts of $50 or more) among any of the
funds in The American Funds Group on any day (or pre-
ceding business day if the day falls on a non-business
day) of each month you designate. You must either meet
the minimum initial investment requirement for the re-
ceiving fund OR the originating fund's balance must be
at least $5,000 and the receiving fund's minimum must
be met within one year.
AUTOMATIC WITHDRAWALS You may make automatic
withdrawals of $50 or more as follows: five or more
times per year if you have an account of $10,000 or
more, or four or fewer times per year if you have an
account of $5,000 or more. Withdrawals are made on or
about the 15th day of each month you designate, and
checks will be sent within seven days. (See "Other
Important Things to Remember.") Additional investments
in a withdrawal account must not be less than one
year's scheduled withdrawals or $1,200, whichever is
greater. However, additional investments in a
withdrawal account may be inadvisable due to sales
charges and tax liabilities.
THESE SERVICES ARE AVAILABLE ONLY IN STATES WHERE THE
FUND TO BE PURCHASED MAY BE LEGALLY OFFERED AND MAY BE
TERMINATED OR MODIFIED AT ANY TIME UPON 60 DAYS'
WRITTEN NOTICE.
ACCOUNT STATEMENTS Your account is opened in accordance
with your registration instructions. Transactions in
the account, such as additional investments and
dividend reinvestments, will be reflected on regular
confirmation statements from American Funds Service
Company. Purchases through automatic investment plans
will be confirmed at least quarterly.
16
<PAGE>
- -------------------------------------------------------------------------------
AMERICAN FUNDSLINE(R) You may check your share balance,
the price of your shares, or your most recent account
transaction, redeem shares (up to $10,000 per fund, per
account each day), or exchange shares around the clock
with American FundsLine(R). To use this service, call
800/325-3590 from a TouchTone(TM) telephone.
Redemptions and exchanges through American FundsLine(R)
are subject to the conditions noted above and in
"Redeeming Shares--Telephone Redemptions and Exchanges"
below. You will need your fund number (see the list of
funds in The American Funds Group under "Purchasing
Shares--Investment Minimums and Fund Numbers"),
personal identification number (the last four digits of
your Social Security number or other tax identification
number associated with your account) and account
number.
---------------------------------------------------------
REDEEMING By writing to Send a letter of instruction
SHARES American specifying the name of the fund, the
Funds Service number of shares or dollar amount to
You may take money Company (at be sold, your name and account
out of your the number. You should also enclose any
account whenever appropriate share certificates you wish to
you please. address redeem. For redemptions over $50,000
indicated and for certain redemptions of
under "Fund $50,000 or less (see below), your
Organization signature must be guaranteed by a
and bank, savings association, credit
Management-- union, or member firm of a domestic
Transfer stock exchange or the National
Agent") Association of Securities Dealers,
Inc., that is an eligible guarantor
institution. You should verify with
the institution that it is an
eligible guarantor prior to signing.
Additional documentation may be
required for redemption of shares
held in corporate, partnership or
fiduciary accounts. Notarization by a
Notary Public is not an acceptable
signature guarantee.
--------------------------------------------------------
By contacting If you redeem shares through your
your investment dealer, you may be charged
investment for this service. SHARES HELD FOR YOU
dealer IN YOUR INVESTMENT DEALER'S STREET
NAME MUST BE REDEEMED THROUGH THE
DEALER.
--------------------------------------------------------
You may use this option, provided the
You may have account is registered in the name of
a redemption an individual(s), a UGMA/UTMA
check sent to custodian, or a non-retirement plan
you by using trust. These redemptions may not
American exceed $10,000 per day, per fund
FundsLine(R) account and the check must be made
or by payable to the shareholder(s) of
telephoning, record and be sent to the address of
faxing, or record provided the address has been
telegraphing used with the account for at least 10
American days. See "Transfer Agent" and
Funds Service "Exchange Privilege" above for the
Company appropriate telephone or fax number.
(subject to
the
conditions
noted in this
section and
in "Telephone
Redemptions
and
Exchanges"
below)
--------------------------------------------------------
In the case Upon request (use the account
of the money application for the money market
market funds, funds) you may establish telephone
you may have redemption privileges (which will
redemptions enable you to have a redemption sent
wired to your to your bank account) and/or check
bank by writing privileges. If you request
telephoning check writing privileges, you will be
American provided with checks that you may use
Funds Service to draw against your account. These
Company checks may be made payable to anyone
($1,000 or you designate and must be signed by
more) or by the authorized number of registered
writing a shareholders exactly as indicated on
check ($250 your checking account signature card.
or more)
--------------------------------------------------------
A SIGNATURE GUARANTEE IS NOT CURRENTLY REQUIRED FOR ANY
REDEMPTION OF $50,000 OR LESS PROVIDED THE REDEMPTION
CHECK IS MADE PAYABLE TO THE REGISTERED SHAREHOLDER(S)
AND IS MAILED TO THE ADDRESS OF RECORD, PROVIDED THE
ADDRESS HAS BEEN USED WITH THE ACCOUNT FOR AT LEAST 10
DAYS.
17
<PAGE>
- -------------------------------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND
ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
TELEPHONE REDEMPTIONS AND EXCHANGES By using the
telephone (including American FundsLine(R)), fax or
telegraph redemption and/or exchange options, you agree
to hold the fund, American Funds Service Company, any
of its affiliates or mutual funds managed by such
affiliates, and each of their respective directors,
trustees, officers, employees and agents harmless from
any losses, expenses, costs or liability (including
attorney fees) which may be incurred in connection with
the exercise of these privileges. Generally, all
shareholders are automatically eligible to use these
options. However, you may elect to opt out of these
options by writing American Funds Service Company (you
may reinstate them at any time also by writing American
Funds Service Company). If American Funds Service
Company does not employ reasonable procedures to
confirm that the instructions received from any person
with appropriate account information are genuine, the
fund may be liable for losses due to unauthorized or
fraudulent instructions. In the event that shareholders
are unable to reach the fund by telephone because of
technical difficulties, market conditions, or a natural
disaster, redemption and exchange requests may be made
in writing only.
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions
within the first year on investments of $1 million or
more and on any investment made with no initial sales
charge by any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees. The charge is 1% of the
lesser of the value of the shares redeemed (exclusive
of reinvested dividends and capital gain distributions)
or the total cost of such shares. Shares held for the
longest period are assumed to be redeemed first for
purposes of calculating this charge. The charge is
waived for exchanges (except if shares acquired by
exchange were then redeemed within 12 months of the
initial purchase); for distributions from qualified
retirement plans and other employee benefit plans; for
redemptions resulting from participant-directed
switches among investment options within a participant-
directed employer-sponsored retirement plan; for
distributions from 403(b) plans or IRAs due to death,
disability or attainment of age 59 1/2; for tax-free
returns of excess contributions to IRAs; for
redemptions through certain automatic withdrawals not
exceeding 10% of the amount that would otherwise be
subject to the charge; and for redemptions in
connection with loans made by qualified retirement
plans.
REINSTATEMENT PRIVILEGE You may reinvest proceeds from
a redemption or a dividend or capital gain distribution
without a sales charge (any contingent deferred sales
charge paid will be credited to your
18
<PAGE>
- -------------------------------------------------------------------------------
account) in any fund in The American Funds Group. Send
a written request and a check to American Funds Service
Company within 90 days after the date of the redemption
or distribution. Reinvestment will be at the next
calculated net asset value after receipt. The tax
status of a gain realized on a redemption will not be
affected by exercise of the reinstatement privilege,
but a loss may be nullified if you reinvest in the same
fund within 30 days. If you redeem your shares within
90 days after purchase and the sales charge on the
purchase of other shares is waived under the
reinstatement privilege, the sales charge you
previously paid for the shares may not be taken into
account when you calculate your gain or loss on that
redemption.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because each stock,
stock/bond and bond fund's net asset value fluctuates,
reflecting the market value of the fund's portfolio,
the amount a shareholder receives for shares redeemed
may be more or less than the amount paid for them.
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
A fund may, with 60 days' written notice, close your
account if, due to a redemption, the account has a
value of less than the minimum required initial
investment. (For example, a fund may close an account
if a redemption is made shortly after a minimum initial
investment is made.)
RETIREMENT You may invest in the funds through various retirement
PLANS plans including the following plans for which Capital
Guardian Trust Company acts as trustee or custodian:
IRAs, Simplified Employee Pension plans, 403(b) plans
and Keogh- and corporate-type business retirement
plans. For further information about any of the plans,
agreements, applications and annual fees, contact
American Funds Distributors or your investment dealer.
To determine which retirement plan is appropriate for
you, please consult your tax adviser. TAX-EXEMPT FUNDS
SHOULD NOT SERVE AS INVESTMENTS FOR RETIREMENT PLANS.
FOR MORE INFORMATION, PLEASE REFER TO THE ACCOUNT
APPLICATION OR THE STATEMENT OF ADDITIONAL INFORMATION.
IF YOU HAVE ANY QUESTIONS ABOUT ANY OF THE SHAREHOLDER
SERVICES DESCRIBED HEREIN OR YOUR ACCOUNT, PLEASE
CONTACT YOUR INVESTMENT DEALER OR AMERICAN FUNDS
SERVICE COMPANY.
[RECYCLE LOGO] This prospectus has been printed on
recycled paper that meets the
guidelines of the United States
Environmental Protection Agency
19
Prospectus
for Eligible Retirement Plans
SMALLCAP
WORLD FUND(R)
AN OPPORTUNITY FOR LONG-TERM GROWTH OF
CAPITAL PRIMARILY THROUGH THE STOCKS OF
SMALLER COMPANIES IN THE UNITED STATES --
AND AROUND THE WORLD
December 1, 1995
[LOGO OF THE AMERICAN FUNDS GROUP(R)]
SMALLCAP WORLD FUND, INC.
333 South Hope Street
Los Angeles, California 90071
The fund's investment objective is to achieve long-term growth of capital. It
seeks to achieve this objective by investing primarily in equity securities of
issuers with relatively small market capitalizations located in various
countries. Investing in smaller capitalization stocks and securities of
issuers in various countries involves certain opportunities and risks that are
different from those associated with investing solely in larger capitalization
stocks and securities of issuers based in the United States.
This prospectus relates only to shares of the fund offered without a sales
charge to eligible retirement plans. For a prospectus regarding shares of the
fund to be acquired otherwise, contact the Secretary of the fund at the
address indicated above.
This prospectus presents information you should know before investing in the
fund. It should be retained for future reference.
You may obtain the statement of additional information for the fund dated
December 1, 1995, which contains the fund's financial statements, without
charge by writing to the Secretary of the fund at the above address or
telephoning 800/421-0180. These requests will be honored within three business
days of receipt.
SHARES OF THE FUND 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. THE
PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
RP 35-010-1295
<PAGE>
- -------------------------------------------------------------------------------
SUMMARY OF
EXPENSES
Average annual expenses
paid over a 10-year
period would be
approximately $14 per
year, assuming a $1,000
investment and a 5%
annual return with no
sales charge.
TABLE OF
CONTENTS
<TABLE>
<S> <C>
Summary of Expenses.............................. 2
Financial Highlights............................. 3
Investment Objective and Policies................ 3
Certain Securities and Investment Techniques..... 4
Investment Results............................... 7
Dividends, Distributions and Taxes............... 7
Fund Organization and Management................. 8
Purchasing Shares................................ 9
Shareholder Services............................. 11
Redeeming Shares................................. 11
</TABLE>
This table is designed to help you understand the costs of investing in the
fund. These are historical expenses; your actual expenses may vary.
SHAREHOLDER TRANSACTION EXPENSES
Certain retirement plans may purchase shares of the fund with no sales
charge./1/ The fund also has no sales charge on reinvested dividends, deferred
sales charge, redemption fees or exchange fees.
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<S> <C>
Management fees...................................................... 0.70%
12b-1 expenses....................................................... 0.22%/2/
Other expenses (including audit, legal, shareholder services,
transfer agent and custodian expenses).............................. 0.21%
Total fund operating expenses........................................ 1.13%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following cumulative
expenses on a $1,000 investment,
assuming a 5% annual return./3/ $12 $36 $62 $137
</TABLE>
/1/ Retirement plans of organizations with $100 million or more in collective
retirement plan assets may purchase shares of the fund with no sales charge.
In addition, any employer-sponsored 403(b) plan or defined contribution plan
qualified under Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees or any other plan that
invests at least $1 million in shares of the fund (or in combination with
shares of other funds in The American Funds Group other than the money
market funds) may purchase shares at net asset value; however, a contingent
deferred sales charge of 1% applies on certain redemptions within 12 months
following such purchases. (See "Redeeming Shares--Contingent Deferred Sales
Charge.")
/2/ These expenses may not exceed 0.30% of the fund's average net assets
annually. (See "Fund Organization and Management--Plan of Distribution.")
Due to these distribution expenses, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers.
/3/ Use of this assumed 5% return is required by the Securities and Exchange
Commission; it is not an illustration of past or future investment results.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
2
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL The following information relating to the past six pe-
HIGHLIGHTS riods has been audited by Deloitte & Touche LLP, inde-
pendent accountants, whose unqualified report is in-
(For a share cluded in the statement of additional information. This
outstanding information should be read in conjunction with the fi-
throughout the nancial statements and accompanying notes which are
fiscal year) also included in the statement of additional
information.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
-----------------------------------------------
1995 1994 1993 1992 1991 1990/1/
------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period........... $23.61 $22.72 $18.01 $17.60 $13.26 $15.08
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .22 .09 .06 .14 .18 .26
Net realized and
unrealized gain (loss)
on investments......... 3.79 1.83 5.56 .38 4.56 (2.08)
------ ------ ------ ------ ------ ------
Total income from in-
vestment operations... 4.01 1.92 5.62 .52 4.74 (1.82)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net in-
vestment income........ (.16) (.06) (.08) (.11) (.40) --
Distributions from net
realized gains......... (1.35) (.97) (.83) -- -- --
------ ------ ------ ------ ------ ------
Total distributions.... (1.51) (1.03) (.91) (.11) (.40) --
------ ------ ------ ------ ------ ------
Net Asset Value, End of
Period................... $26.11 $23.61 $22.72 $18.01 $17.60 $13.26
====== ====== ====== ====== ====== ======
Total Return/2/........... 18.59% 8.60% 32.46% 2.95% 36.43% (12.07)%/3/
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of pe-
riod (in millions)..... $4,625 $3,497 $2,247 $1,255 $ 798 $ 571
Ratio of expenses to av-
erage net assets....... 1.13% 1.12% 1.15% 1.21% 1.31% .49%/3/
Ratio of net income to
average net assets..... .97% .38% .33% .85% 1.11% 1.70%/3/
Portfolio turnover rate. 45.63% 29.43% 25.00% 23.10% 19.26% 1.91%/3/
</TABLE>
- -----------------
/1/ Period from 4/30/90-9/30/90 (initial period of operations).
/2/ Calculated with no sales charge.
/3/ These amounts are based on operations for the period shown and,
accordingly, not representative of a full year's operations.
INVESTMENT The fund's investment objective is to provide long-term
OBJECTIVE growth of capital. It seeks to achieve its objective by
AND POLICIES investing primarily in equity securities of companies
with relatively small market capitalizations (share
The fund's goal is price times number of equity securities outstanding).
to provide you In selecting investments, the fund emphasizes companies
with long-term that are believed by the fund's investment adviser,
growth of capital. Capital Research and Management Company, to have the
potential for growth (based on strength of management,
new products or new services, etc.). Current income is
not a consideration.
The fund's investments typically have individual market
capitalizations of approximately $50 million to
$1.2 billion. The fund will not normally purchase
shares of any company, or add to any existing holding,
with a market capitalization of more than $1.2 billion.
However, the fund will not necessarily sell stocks be-
cause they exceed this limit through appreciation.
The fund's assets may also be held in cash or high-
quality cash equivalents (including certificates of de-
posit, bankers acceptances, commercial paper, short-
term notes or repurchase agreements), government or
corporate debt securities denominated in U.S. dollars
or other currencies for liquidity purposes or when, in
the opinion of Capital Research and Management Company,
prevailing market and economic conditions in-
3
<PAGE>
- -------------------------------------------------------------------------------
dicate that it is desirable to do so (for example, for
temporary defensive purposes). Under normal market con-
ditions the fund will invest no more than 35% of its
total assets in such securities.
The fund's investment restrictions (which are described
in the statement of additional information) and objec-
tive cannot be changed without shareholder approval.
All other investment practices may be changed by the
board of directors.
ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT,
OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS
FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN
SECURITIES AND THE SPECIAL RISKS ASSOCIATED WITH IN-
VESTING OUTSIDE THE U.S. DESCRIBED HEREIN.
CERTAIN INVESTING IN SMALLER CAPITALIZATION STOCKS Capital
SECURITIES AND Research and Management Company believes that the
INVESTMENT issuers of smaller capitalization stocks often have
TECHNIQUES sales and earnings growth rates which exceed those of
larger companies and that such growth rates may in turn
Investing in be reflected in more rapid share price appreciation.
smaller However, investing in smaller capitalization stocks can
capitalization involve greater risk than is customarily associated
stocks involves with investing in stocks of larger, more established
greater risks than companies. For example, smaller capitalization
investing in the companies often have limited product lines, markets, or
stocks of larger, financial resources, may be dependent for management on
more established one or a few key persons, and can be more susceptible
companies. to losses. Also, their securities may be thinly traded
(and therefore have to be sold at a discount from
current prices or sold in small lots over an extended
period of time), may be followed by fewer investment
research analysts, and may be subject to wider price
swings thus creating a greater chance of loss than
securities of larger capitalization companies.
Transaction costs in stocks of smaller capitalization
companies may be higher than those of larger
capitalization companies. Because the fund emphasizes
the stocks of issuers with smaller market
capitalizations (by U.S. standards), it can be expected
to have more difficulty obtaining information about the
issuers or valuing or disposing of its securities than
it would if it were to concentrate on more widely held
stocks.
INVESTING AROUND THE WORLD The fund's assets are
invested globally which, in the opinion of Capital
Research and Management Company, enhances the fund's
ability to meet its objective--long-term growth of
capital.
Of course, investing globally involves special risks,
particularly in certain developing countries, caused
by, among other things: fluctuating currency values;
less stringent accounting, auditing, and financial
reporting regulations and practices in some countries;
changing local and regional economic, political, and
social conditions; differing securities market
structures; and various administrative difficulties
such as delays in clearing and settling portfolio
transactions or in receiving payment of dividends.
4
<PAGE>
- -------------------------------------------------------------------------------
However, in the opinion of Capital Research and Manage-
ment Company, global investing also can reduce certain
portfolio market risks due to greater diversification
opportunities.
Additional costs could be incurred in connection with
the fund's investment activities outside the U.S. Bro-
kerage commissions are generally higher outside the
U.S., and the fund will bear certain expenses in con-
nection with its currency transactions. Furthermore,
increased custodian costs may be associated with the
maintenance of assets in certain jurisdictions.
Under current market conditions, the fund expects that
it will not invest more than approximately 50% of its
assets (taken at cost) in companies based outside the
U.S., although there is no specific limit on the fund's
non-U.S. investments (except as noted below). At Sep-
tember 30, 1995, the fund maintained investments in 31
countries, and 31% of its assets (approximately 38% of
its equity investments) were in issues outside the U.S.
In making its investments in companies outside the
U.S., the fund does not intend to emphasize any partic-
ular country or region. Under normal market conditions
the fund will invest at least 65% of its total assets
in equity securities of smaller capitalization issuers
as described above, and such issuers will be located in
at least three countries.
INVESTING IN FIXED-INCOME SECURITIES When prevailing
market, economic, political or currency conditions
warrant, assets may also be invested in securities
convertible into common stocks, straight debt
securities (generally rated in the top three quality
categories by any national rating service or determined
to be of equivalent quality by Capital Research and
Management Company), government securities, or
nonconvertible preferred stocks. If market interest
rates increase, such fixed-income securities generally
decline in value and vice versa. These securities may
also be issued by entities domiciled outside the U.S.
The fund's investments in debt securities may be denom-
inated in currencies other than the U.S. dollar. If the
currency in which the security is denominated declines
against the U.S. dollar, the dollar value of the secu-
rity will decline and vice versa. The fund may hold a
portion of its assets in U.S. dollars and other curren-
cies and in cash equivalents of either U.S. issuers or
issuers domiciled outside the U.S. (See the statement
of additional information for a description of cash
equivalents.)
CURRENCY TRANSACTIONS The fund has the ability to hold
currencies and enter into forward currency contracts to
protect against changes in currency exchange rates.
However, there is no assurance that such strategies
will be successful. Moreover, due to the expenses in-
volved, the fund will not generally attempt to protect
against all potential changes in exchange rates.
5
<PAGE>
- -------------------------------------------------------------------------------
MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic invest-
ment philosophy of Capital Research and Management Com-
pany is to seek fundamental values at reasonable pric-
es, using a system of multiple portfolio counselors in
managing mutual fund assets. Under this system the
portfolio of the fund is divided into segments, which
are managed by individual counselors. Each counselor
decides how their segment will be invested (within the
limits provided by the fund's objective and policies
and by Capital Research and Management Company's in-
vestment committee). In addition, Capital Research and
Management Company's research professionals make in-
vestment decisions with respect to a portion of the
fund's portfolio. The primary individual portfolio
counselors for the fund are listed below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
YEARS OF EXPERIENCE AS
INVESTMENT PROFESSIONAL
YEARS OF EXPERIENCE AS (APPROXIMATE)
PORTFOLIO COUNSELOR (AND
PORTFOLIO COUNSELORS RESEARCH PROFESSIONAL, WITH CAPITAL
FOR IF APPLICABLE) FOR RESEARCH AND
SMALLCAP PRIMARY TITLE(S) SMALLCAP MANAGEMENT
WORLD FUND WORLD FUND COMPANY OR TOTAL
(APPROXIMATE) ITS AFFILIATES YEARS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William R. Grimsley President, Director Since the fund began 26 years 33 years
and Principal Execu- operations
tive Officer of the
fund. Senior Vice
President and Director,
Capital Research and
Management Company
- ------------------------------------------------------------------------------------------------------------
Gordon Crawford Senior Vice President Since the fund began 24 years 24 years
of the fund. Senior operations
Vice President and
Director, Capital
Research Company*
- ------------------------------------------------------------------------------------------------------------
Mark E. Denning Senior Vice President, Four years (in addition to 13 years 13 years
Capital Research Company* one year as a research
professional prior to
becoming a portfolio
counselor for the fund)
- ------------------------------------------------------------------------------------------------------------
Robert W. Lovelace Vice President, Capi- Two years (in addition to 10 years 10 years
tal Research Company* four years as a research
professional prior to
becoming a portfolio
counselor for the fund)
- ------------------------------------------------------------------------------------------------------------
James F. Rothenberg President and Direc- One year 25 years 25 years
tor, Capital Research
and Management Company
- ------------------------------------------------------------------------------------------------------------
R. Michael Shanahan Chairman and Principal Since the fund began 31 years 31 years
Executive Officer, operations
Capital Research and
Management Company
- ------------------------------------------------------------------------------------------------------------
THE FUND BEGAN OPERATIONS ON APRIL 30, 1990
*COMPANY AFFILIATED WITH CAPITAL RESEARCH AND MANAGEMENT COMPANY.
- ------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
- -------------------------------------------------------------------------------
INVESTMENT The fund may from time to time compare its investment
RESULTS results to various unmanaged indices or other mutual
funds in reports to shareholders, sales literature and
The fund has advertisements. The results may be calculated on a to-
averaged a total tal return, yield and/or distribution rate basis for
return (at no various periods, with or without sales charges. Results
sales charge) of calculated without a sales charge will be higher. Total
14.74% a year returns assume the reinvestment of all dividends and
under Capital capital gain distributions. The fund's distribution
Research and rate is calculated by dividing the dividends paid by
Management the fund over the last 12 months by the sum of the
Company's month-end price and the capital gains paid over the
management last 12 months. The SEC yield reflects income earned by
(April 30, 1990 the fund, while the distribution rate reflects divi-
through September dends paid by the fund. Among the elements used to cal-
30, 1995). culate the SEC yield are the dividend and interest in-
come earned and expenses paid by the fund, whereas the
income paid to shareholders is used to calculate the
distribution rate.
The fund's total return over the past 12 months, aver-
age annual return over the past five years and average
lifetime return, as of September 30, 1995, were 18.59%,
19.10% and 14.74%, respectively. These results were
calculated with no sales charge in accordance with Se-
curities and Exchange Commission requirements. Of
course, past results are not an indication of future
results. Further information regarding the fund's in-
vestment results is contained in the fund's annual re-
port which may be obtained without charge by writing to
the Secretary of the fund at the address indicated on
the cover of this prospectus.
DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS Dividends are usually paid
DISTRIBUTIONS in June and December. Capital gains, if any, are usu-
AND TAXES ally distributed in December. When a dividend or capi-
tal gain is distributed, the net asset value per share
Income is reduced by the amount of the payment.
distributions are
usually made in The terms of your plan will govern how your plan may
June and December. receive distributions from the fund. Generally, peri-
odic distributions from the fund to your plan are rein-
vested in additional fund shares, although your plan
may permit fund distributions from net investment in-
come to be received by you in cash while reinvesting
capital gain distributions in additional shares or may
permit all fund distributions to be received in cash.
Unless you select another option, all distributions
will be reinvested in additional fund shares.
FEDERAL TAXES The fund intends to operate as a "regu-
lated investment company" under the Internal Revenue
Code. In any fiscal year in which the fund so qualifies
and distributes to shareholders all of its net invest-
ment income and net capital gains, the fund itself is
relieved of federal income tax. The tax treatment of
redemptions from a retirement plan may differ from re-
demptions from an ordinary shareholder account.
The fund may be required to pay withholding and other
taxes imposed by various countries in connection with
its investments outside the U.S., generally at rates
from 10% to 40%, which would reduce the fund's invest-
ment income.
PLEASE SEE THE STATEMENT OF ADDITIONAL INFORMATION AND
YOUR TAX ADVISER FOR FURTHER INFORMATION.
7
<PAGE>
- -------------------------------------------------------------------------------
FUND FUND ORGANIZATION AND VOTING RIGHTS The fund, an open-
ORGANIZATION end, diversified management investment company, was or-
AND ganized as a Maryland corporation in 1989. The fund's
MANAGEMENT board supervises fund operations and performs duties
required by applicable state and federal law. Members
The fund is a of the board who are not employed by Capital Research
member of The and Management Company or its affiliates are paid for
American Funds services rendered to the fund as described in the
Group, which is statement of additional information. They may elect to
managed by one of defer all or a portion of these fees through a deferred
the largest and compensation plan in effect for the fund. Shareholders
most experienced have one vote per share owned and, at the request of
investment the holders of at least 10% of the shares, the fund
advisers. will hold a meeting at which any member of the board
could be removed by a majority vote. There will not
usually be a shareholder meeting in any year except,
for example, when the election of the board is required
to be acted upon by shareholders under the Investment
Company Act of 1940.
THE INVESTMENT ADVISER Capital Research and Management
Company, a large and experienced investment management
organization founded in 1931, is the investment adviser
to the fund and other funds, including those in The
American Funds Group. Capital Research and Management
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071, and at 135 South State College Boule-
vard, Brea, CA 92621. Capital Research and Management
Company manages the investment portfolio and business
affairs of the fund and receives a fee at the annual
rates of 0.80% on the first $1 billion of the fund's
assets, 0.70% on net assets in excess of $1 billion but
not exceeding $2 billion, 0.67% on net assets in excess
of $2 billion but not exceeding $3 billion, 0.65% on
net assets in excess of $3 billion but not exceeding $5
billion, 0.635% on net assets in excess of $5 billion
but not exceeding $8 billion, and 0.625% on net assets
in excess of $8 billion.
Capital Research and Management Company is a wholly
owned subsidiary of The Capital Group Companies, Inc.
(formerly "The Capital Group, Inc."), which is located
at 333 South Hope Street, Los Angeles, CA 90071. The
research activities of Capital Research and Management
Company are conducted by affiliated companies which
have offices in Los Angeles, San Francisco, New York,
Washington, D.C., London, Geneva, Singapore, Hong Kong
and Tokyo.
Capital Research and Management Company and its affili-
ated companies have adopted a personal investing policy
that is consistent with the recommendations contained
in the report dated May 9, 1994 issued by the Invest-
ment Company Institute's Advisory Group on Personal In-
vesting. (See the statement of additional information.)
PORTFOLIO TRANSACTIONS Orders for the fund's portfolio
securities transactions are placed by Capital Research
and Management Company, which strives to obtain the
best available prices, taking into account the costs
and quality of executions. In the over-the-counter mar-
ket, purchases and sales are transacted directly with
principal market-makers
8
<PAGE>
- -------------------------------------------------------------------------------
except in those circumstances where it appears better
prices and executions are available elsewhere.
Subject to the above policy, when two or more brokers
are in a position to offer comparable prices and
executions, preference may be given to brokers that
have sold shares of the fund or have provided
investment research, statistical, and other related
services for the benefit of the fund and/or other funds
served by Capital Research and Management Company.
PRINCIPAL UNDERWRITER American Funds Distributors,
Inc., a wholly owned subsidiary of Capital Research and
Management Company, is the principal underwriter of the
fund's shares. American Funds Distributors, Inc. is lo-
cated at 333 South Hope Street, Los Angeles, CA 90071,
135 South State College Boulevard, Brea, CA 92621, 8000
IH-10 West, San Antonio, TX 78230, 8332 Woodfield
Crossing Boulevard, Indianapolis, IN 46240, and 5300
Robin Hood Road, Norfolk, VA 23513. Telephone conversa-
tions with American Funds Distributors may be recorded
or monitored for verification, recordkeeping and qual-
ity assurance purposes.
PLAN OF DISTRIBUTION The fund has a plan of distribu-
tion or "12b-1 Plan" under which it may finance activi-
ties primarily intended to sell shares, provided the
categories of expenses are approved in advance by the
board and the expenses paid under the plan were in-
curred within the last 12 months and accrued while the
plan is in effect. Expenditures by the fund under the
plan may not exceed 0.30% of its average net assets an-
nually (0.25% of which may be for service fees.)
TRANSFER AGENT American Funds Service Company, 800/421-
0180, a wholly owned subsidiary of Capital Research and
Management Company, is the transfer agent and performs
shareholder service functions. American Funds Service
Company is located at 333 South Hope Street, Los Ange-
les, CA 90071, 135 South State College Boulevard, Brea,
CA 92621, 8000 IH-10 West, San Antonio, TX 78230, 5300
Robin Hood Road, Norfolk, VA 23513 and 8332 Woodfield
Crossing Boulevard, Indianapolis, IN 46240. It was paid
a fee of $4,265,000 for the fiscal year ended September
30, 1995. Telephone conversations with American Funds
Service Company may be recorded or monitored for veri-
fication, recordkeeping and quality assurance purposes.
PURCHASING SHARES ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR
RETIREMENT PLAN. FOR MORE INFORMATION ABOUT HOW TO
PURCHASE SHARES OF THE FUND THROUGH YOUR PLAN OR
LIMITATIONS ON THE AMOUNT THAT MAY BE PURCHASED, PLEASE
CONSULT WITH YOUR EMPLOYER. Shares are sold to eligible
retirement plans at the net asset value per share next
determined after receipt of an order by the fund or
American Funds Service Company. Orders must be received
before the close of regular trading on the New York
Stock Exchange in order to receive that day's net asset
value. Plans of organizations with collective
retirement plan assets of $100 million or more may
purchase shares at net asset value. In
9
<PAGE>
- -------------------------------------------------------------------------------
addition, any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees or any other plan that
invests at least $1 million in shares of the fund (or
in combination with shares of other funds in The
American Funds Group other than the money market funds)
may purchase shares at net asset value; however, a
contingent deferred sales charge of 1% is imposed on
certain redemptions made within one year of such
purchase. (See "Redeeming Shares--Contingent Deferred
Sales Charge.") Plans may also qualify to purchase
shares at net asset value by completing a statement of
intention to purchase $1 million in fund shares subject
to a commission over a maximum of 13 consecutive
months. Certain redemptions of such shares may also be
subject to a contingent deferred sales charge as
described above. (See the statement of additional
information.)
The minimum initial investment is $250, except that the
money market funds have a minimum of $1,000 for
individual retirement accounts (IRAs). Minimums are
reduced to $50 for purchases through "Automatic
Investment Plans" (except for the money market funds)
or to $25 for purchases by retirement plans through
payroll deductions and may be reduced or waived for
shareholders of other funds in The American Funds
Group.
American Funds Distributors, at its expense (from a
designated percentage of its income), will, during
calendar year 1996, provide additional promotional
incentives to dealers. Currently these incentives are
limited to the top one hundred dealers who have sold
shares of the fund or other funds in The American Funds
Group. Such incentive payments will be based on a pro
rata share of a qualifying dealer's sales. American
Funds Distributors will, on an annual basis, determine
the advisability of continuing these promotional
incentives.
Qualified dealers currently are paid a continuing
service fee not to exceed 0.25% of average net assets
(0.15% in the case of the money market funds) annually
in order to promote selling efforts and to compensate
them for providing certain services. (See "Fund
Organization and Management--Plan of Distribution.")
These services include processing purchase and
redemption transactions, establishing shareholder
accounts and providing certain information and
assistance with respect to the fund.
Shares of the fund are offered to other shareholders
pursuant to another prospectus at public offering
prices that may include an initial sales charge.
SHARE PRICE Shares are offered to eligible retirement
plans at the net asset value next determined after the
order is received by the fund or American Funds Service
Company. In the case of orders sent directly to the
fund or American Funds Service Company, an investment
dealer must be indicated. Dealers are responsible for
promptly transmitting orders. (See the
10
<PAGE>
- -------------------------------------------------------------------------------
statement of additional information under "Purchase of
Shares--Price of Shares.")
The fund's net asset value per share is determined as
of the close of trading (currently 4:00 p.m., New York
time) on each day the New York Stock Exchange is open.
The current value of the fund's total assets, less all
liabilities, is divided by the total number of shares
outstanding and the result, rounded to the nearer cent,
is the net asset value per share.
SHAREHOLDER Subject to any restrictions contained in your plan, you
SERVICES can exchange your shares for shares of other funds in
The American Funds Group which are offered through the
plan at net asset value. In addition, again depending
on your plan, you may be able to exchange shares auto-
matically or cross-reinvest dividends in shares of
other funds. Contact your plan administrator/trustee
regarding how to use these services. Also, see the
fund's statement of additional information for a de-
scription of these and other services that may be
available through your plan. These services are avail-
able only in states where the fund to be purchased may
be legally offered and may be terminated or modified at
any time upon 60 days' written notice.
REDEEMING SHARES Subject to any restrictions imposed by your plan, you
can sell your shares through the plan any day the New
York Stock Exchange is open. For more information about
how to sell shares of the fund through your retirement
plan, including any charges that may be imposed by the
plan, please consult with your employer.
--------------------------------------------------------
By contacting Your plan administrator/trustee must
your plan send a letter of instruction
administrator/ specifying the name of the fund, the
trustee number of shares or dollar amount to
be sold, and, if applicable, your
name and account number. For your
protection, if you redeem more than
$50,000, the signatures of the
registered owners or their legal
representatives must be guaranteed by
a bank, savings association, credit
union, or member firm of a domestic
stock exchange or the National
Association of Securities Dealers,
Inc., that is an eligible guarantor
institution. Your plan administrator/
trustee should verify with the
institution that it is an eligible
guarantor prior to signing.
Additional documentation may be
required to redeem shares from
certain accounts. Notarization by a
Notary Public is not an acceptable
signature guarantee.
--------------------------------------------------------
By contacting Shares may also be redeemed through
an investment an investment dealer; however, you or
dealer your plan may be charged for this
service. SHARES HELD FOR YOU IN AN
INVESTMENT DEALER'S STREET NAME MUST
BE REDEEMED THROUGH THE DEALER.
--------------------------------------------------------
THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE
NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND ALL
REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR
AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING
SHARES--SHARE PRICE.")
11
<PAGE>
- -------------------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGE A contingent deferred
sales charge of 1% applies to certain redemptions made
within the first year on investments of $1 million or
more and on any investment made with no initial sales
charge by any employer-sponsored 403(b) plan or defined
contribution plan qualified under Section 401(a) of the
Internal Revenue Code including a "401(k)" plan with
200 or more eligible employees. The charge is 1% of the
lesser of the value of the shares redeemed (exclusive
of reinvested dividends and capital gain distributions)
or the total cost of such shares. Shares held for the
longest period are assumed to be redeemed first for
purposes of calculating this charge. The charge is
waived for exchanges (except if shares acquired by
exchange were then redeemed within 12 months of the
initial purchase); for distributions from qualified
retirement plans and other employee benefit plans; for
redemptions resulting from participant-directed
switches among investment options within a participant-
directed employer-sponsored retirement plan; and for
redemptions in connection with loans made by qualified
retirement plans.
OTHER IMPORTANT THINGS TO REMEMBER The net asset value
for redemptions is determined as indicated under
"Purchasing Shares--Share Price." Because the fund's
net asset value fluctuates, reflecting the market value
of the portfolio, the amount you receive for shares
redeemed may be more or less than the amount paid for
them.
Redemption proceeds will not be mailed until sufficient
time has passed to provide reasonable assurance that
checks or drafts (including certified or cashier's
checks) for shares purchased have cleared (which may
take up to 15 calendar days from the purchase date).
Except for delays relating to clearance of checks for
share purchases or in extraordinary circumstances (and
as permissible under the Investment Company Act of
1940), redemption proceeds will be paid on or before
the seventh day following receipt of a proper
redemption request.
[RECYCLE LOGO] This prospectus has been printed on
recycled paper that meets the
guidelines of the United States
Environmental Protection Agency
THIS PROSPECTUS RELATES ONLY TO SHARES OF THE FUND
OFFERED WITHOUT A SALES CHARGE TO ELIGIBLE RETIREMENT
PLANS. FOR A PROSPECTUS REGARDING SHARES OF THE FUND
TO BE ACQUIRED OTHERWISE, CONTACT THE SECRETARY OF
THE FUND AT THE ADDRESS INDICATED ON THE FRONT.
12
SMALLCAP
World
Fund(R)
December 1, 1995
SMALLCAP WORLD FUND(R)
Profile
333 South Hope Street December 1, 1995
Los Angeles, CA 90071
1. Goal
The fund primarily seeks to make your money grow over time through investments
in the stocks of smaller companies around the world.
2. Investment Strategies
The fund will normally invest at least 65% of its assets in stocks of companies
with stock market capitalizations of between $50 million and $1.2 billion
located around the world. Under normal market conditions, the fund expects
that it will not invest more than 50% of its assets in companies based outside
the U.S. The fund does not intend to emphasize any particular country or
region and the fund's non-U.S. investments may include securities of companies
based in developing countries. The fund may also invest up to 35% of its
assets under normal market conditions in other types of securities, such as
bonds, when appropriate.
3. Risks
Stock prices rise and fall. Investing in smaller companies and outside the
U.S. involves special risks. The prices of the stocks of smaller
capitalization companies often are subject to very large price swings thus
creating a greater chance of loss than securities of larger capitalization
companies. Investing outside the U.S. can involve a number of risks caused by,
among other things, currency fluctuations and differing securities market
structures and accounting standards.
YOU CAN LOSE MONEY BY INVESTING IN THE FUND; YOUR INVESTMENT IS NOT GUARANTEED.
THE LIKELIHOOD OF LOSS IS GREATER IF YOU INTEND TO INVEST FOR A SHORTER PERIOD
OF TIME.
4. Appropriateness
If you are not a long-term investor seeking capital growth through investments
in smaller companies on a global basis, this fund may not be appropriate for
you. For more information, consult your investment dealer or employer.
5. Fees and Expenses
Shareholder transaction expenses are charges you pay when you buy or sell
shares of a fund. Annual fund operating expenses are paid out of the fund's
assets. The fund's expenses are factored into its share price and
distributions and are not charged directly to shareholder accounts.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
<S> <C>
Maximum sales charge
on purchases
(as a percentage of offering price) 5.75%
</TABLE>
SALES CHARGES ARE REDUCED OR ELIMINATED FOR LARGER PURCHASES. The fund has no
sales charge on reinvested dividends, and no deferred sales charge or
redemption or exchange fees. A contingent deferred sales charge of 1% applies
on certain redemptions within 12 months following purchases without a sales
charge.
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
<S> <C>
Management fees 0.70%
12b-1 expenses 0.22%
Other expenses 0.21%
Total fund operating expenses 1.13%
</TABLE>
Example
You would pay the following cumulative expenses on a $1,000 investment,
assuming a 5% annual return. This example should not be considered a
representation of past or future expenses.
<TABLE>
<CAPTION>
<S> <C>
One year $ 68
Three years 91
Five years 116
Ten years 187
</TABLE>
6. Past Results
Here are the fund's annual total returns for each calendar year over the fund's
lifetime:
[CHART]
<TABLE>
<CAPTION>
<S> <C>
1991 25.28%
1992 0.56%
1993 22.54%
1994 -8.44%
</TABLE>
[END CHART]
Sales charges have not been deducted from results shown above.
The fund's average annual total return* is +13.49% over its lifetime (April 30,
1990 through September 30, 1995). PAST RESULTS ARE NOT A GUARANTEE OF FUTURE
RESULTS.
<TABLE>
<CAPTION>
<S> <C>
Average Annual
Total Returns*
One year + 11.77%
Five years + 17.69%
Lifetime + 13.49%
</TABLE>
* These results were calculated for periods ended September 30, 1995 in
accordance with Securities and Exchange Commission rules which require that the
maximum sales charge be deducted.
7. Investment Adviser
Capital Research and Management Company, one of the world's largest and most
experienced investment advisers, manages the fund, which is a member of The
American Funds Group. Capital Research and Management Company manages this
diversified mutual fund using the multiple portfolio counselor system. Under
this system, the fund's assets are divided into several portions. Each portion
is independently managed by a portfolio counselor or a group of research
professionals, subject to oversight by the investment adviser's investment
committee.
8. Purchases
The fund's shares are sold through investment dealers. Your investment dealer
can help you with your account, or you may call American Funds Service Company
at 800/421-0180 with questions about your account. Generally, the minimum
initial investment is $1,000.
9. Redemptions
You may redeem shares at no cost at any time through your investment dealer or
by calling American FundsLineR at 800/325-3590. (You will need the fund's
number - 35 - if you use this service.) Transactions will be processed as of
the next close of the New York Stock Exchange.
10. Distributions
Dividends and capital gain distributions are automatically reinvested unless
you notify American Funds Service Company that you would like to invest them in
another of the American Funds or receive payment in cash. Income distributions
are usually made in June and December. Capital gains, if any, are usually
distributed in December.
11. Other Services
You may exchange your shares for any of the other American Funds or obtain
information about your investment any time by calling American FundsLineR. If
you purchase shares at net asset value through a retirement plan, some or all
of the services or features described may not be available. Contact your
employer for details.
THIS PROFILE CONTAINS KEY INFORMATION ABOUT THE FUND. MORE DETAILS APPEAR IN
THE FUND'S ACCOMPANYING PROSPECTUS.
This profile has been printed on recycled
paper that meets the guidelines of the United
States Environmental Protection Agency.
<PAGE>
SMALLCAP
World
Fund(R)
December 1, 1995
SMALLCAP WORLD FUND(R)
Profile for Eligible Retirement Plans
333 South Hope Street December 1, 1995
Los Angeles, CA 90071
1. Goal
The fund primarily seeks to make your money grow over time through investments
in the stocks of smaller companies around the world.
2. Investment Strategies
The fund will normally invest at least 65% of its assets in stocks of companies
with stock market capitalizations of between $50 million and $1.2 billion
located around the world. Under normal market conditions, the fund expects
that it will not invest more than 50% of its assets in companies based outside
the U.S. The fund does not intend to emphasize any particular country or
region and the fund's non-U.S. investments may include securities of companies
based in developing countries. The fund may also invest up to 35% of its
assets under normal market conditions in other types of securities, such as
bonds, when appropriate.
3. Risks
Stock prices rise and fall. Investing in smaller companies and outside the
U.S. involves special risks. The prices of the stocks of smaller
capitalization companies often are subject to very large price swings thus
creating a greater chance of loss than securities of larger capitalization
companies. Investing outside the U.S. can involve a number of risks caused by,
among other things, currency fluctuations and differing securities market
structures and accounting standards.
YOU CAN LOSE MONEY BY INVESTING IN THE FUND; YOUR INVESTMENT IS NOT GUARANTEED.
THE LIKELIHOOD OF LOSS IS GREATER IF YOU INTEND TO INVEST FOR A SHORTER PERIOD
OF TIME.
4. Appropriateness
If you are not a long-term investor seeking capital growth through investments
in smaller companies on a global basis, this fund may not be appropriate for
you. For more information, consult your investment dealer or employer.
5. Fees and Expenses
Shareholder transaction expenses are charges you pay when you buy or sell
shares of a fund. Annual fund operating expenses are paid out of the fund's
assets. The fund's expenses are factored into its share price and
distributions and are not charged directly to shareholder accounts.
Shareholder Transaction Expenses
Shares of the fund are sold with no sales charge to the following eligible
retirement plans: plans of companies with collective retirement plan assets of
$100 million or more or plans purchasing $1 million or more or having 200 or
more eligible employees. However, a 1% contingent deferred sales charge is
imposed on certain redemptions within one year of the purchase from eligible
plans other than those with collective assets of $100 million or more. The
fund has no sales charge on reinvested dividends and no deferred sales charge
for redemptions or exchanges.
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
<S> <C>
Management fees 0.70%
12b-1 expenses 0.22%
Other expenses 0.21%
Total fund operating expenses 1.13%
</TABLE>
Example
You would pay the following cumulative expenses on a $1,000 investment,
assuming a 5% annual return. This example should not be considered a
representation of past or future expenses.
<TABLE>
<CAPTION>
<S> <C>
One year $ 12
Three years 36
Five years 62
Ten years 137
</TABLE>
6. Past Results
Here are the fund's annual total returns for each calendar year over the fund's
lifetime:
[CHART]
<TABLE>
<CAPTION>
<S> <C>
1991 32.89%
1992 6.69%
1993 30.04%
1994 -2.85%
</TABLE>
[END CHART]
The fund's average annual total return* is +14.74% over its lifetime (April 30,
1990 through September 30, 1995). PAST RESULTS ARE NOT A GUARANTEE OF FUTURE
RESULTS.
<TABLE>
<CAPTION>
<S> <C>
Average Annual
Total Returns*
One year + 18.59%
Five years + 19.10%
Lifetime + 14.74%
</TABLE>
* These results were calculated for periods ended September 30, 1995 in
accordance with Securities and Exchange Commission rules.
7. Investment Adviser
Capital Research and Management Company, one of the world's largest and most
experienced investment advisers, manages the fund, which is a member of The
American Funds Group. Capital Research and Management Company manages this
diversified mutual fund using the multiple portfolio counselor system. Under
this system, the fund's assets are divided into several portions. Each portion
is independently managed by a portfolio counselor or a group of research
professionals, subject to oversight by the investment adviser's investment
committee.
8. Purchases
All orders to purchase shares must be made through your retirement plan. For
more information about how to purchase shares of the fund through your plan or
limitations on the amount that may be purchased, please consult with your
employer.
9. Redemptions
Subject to any restrictions imposed by your plan, you may sell your shares
through the plan any day the New York Stock Exchange is open. For more
information about how to sell shares of the fund through your retirement plan,
including any charges that may be imposed by the plan, please consult with your
employer.
10. Distributions
Dividends and capital gain distributions are automatically reinvested unless
you notify American Funds Service Company that you would like to invest them in
another of the American Funds or receive payment in cash. Income distributions
are usually made in June and December. Capital gains, if any, are usually
distributed in December.
11. Other Services
You may exchange your shares for any of the other American Funds or obtain
information about your investment any time by calling American FundsLineR. If
you purchase shares at net asset value through a retirement plan, some or all
of the services or features described may not be available. Contact your
employer for details.
THIS PROFILE RELATES ONLY TO SHARES OF THE FUND OFFERED WITHOUT SALES CHARGE TO
ELIGIBLE RETIREMENT PLANS. TO RECEIVE A FULL PROSPECTUS, CONTACT YOUR EMPLOYER
OR THE SECRETARY OF THE FUND AT THE ABOVE ADDRESS.
This profile has been printed on recycled
paper that meets the guidelines of the United
States Environmental Protection Agency.
SMALLCAP WORLD FUND, INC.
PART B
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 1, 1995
This document is not a prospectus but should be read in conjunction with
the current prospectus dated December 1, 1995 of SMALLCAP World Fund, Inc. (the
fund). The prospectus may be obtained from your investment dealer or financial
planner or by writing to the fund at the following address:
SMALLCAP WORLD FUND, INC.
Attention: Secretary
333 South Hope Street
Los Angeles, CA 90071
(213) 486-9200
The fund has two forms of prospectuses. Each reference to the prospectus
in this Statement of Additional Information includes both of the fund's
prospectuses. Shareholders who purchase shares at net asset value through
eligible retirement plans should note that not all of the services or features
described below may be available to them, and they should contact their
employer for details.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
NO.
<S> <C>
INVESTMENT POLICIES 2
DESCRIPTION OF CERTAIN SECURITIES 3
CERTAIN RISK FACTORS RELATING TO BELOW INVESTMENT GRADE BONDS 4
INVESTMENT RESTRICTIONS 4
FUND DIRECTORS AND OFFICERS 7
MANAGEMENT 11
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES 13
PURCHASE OF SHARES 16
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES 18
EXECUTION OF PORTFOLIO TRANSACTIONS 19
GENERAL INFORMATION 19
INVESTMENT RESULTS 20
APPENDIX - DESCRIPTION OF BOND RATINGS 25
FINANCIAL STATEMENTS ATTACHED
</TABLE>
INVESTMENT POLICIES
REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements, under
which the fund buys a security and obtains a simultaneous commitment from the
seller to repurchase the security at a specified time and price. Repurchase
agreements permit the fund to maintain liquidity and earn income over periods
of time as short as overnight. The seller must maintain with the fund's
custodian collateral equal to at least 100% of the repurchase price, including
accrued interest, as monitored daily by Capital Research and Management Company
(the Investment Adviser). See "Management" below. The fund will only enter
into repurchase agreements involving securities in which it could otherwise
invest and with selected banks and securities dealers whose financial condition
is monitored by the Investment Adviser. If the seller under the repurchase
agreement defaults, the fund may incur a loss if the value of the collateral
securing the repurchase agreement has declined and may incur disposition costs
in connection with liquidating the collateral. If bankruptcy proceedings are
commenced with respect to the seller, realization upon the collateral by the
fund may be delayed or limited.
CURRENCY TRANSACTIONS -- The fund has the ability to hold a portion of its
assets in U.S. dollars and other currencies and to enter into certain currency
contracts (on either a spot or forward basis) in connection with investing in
non-U.S. dollar denominated securities including foreign currency exchange and
forward currency contracts. A foreign exchange contract is used to facilitate
settlement of trades. For example, the fund might purchase a currency or enter
into a foreign exchange contract to preserve the U.S. dollar price of
securities it has contracted to purchase. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, the fund
might enter into a forward currency contract to protect against an anticipated
decline in value of a foreign currency against the U.S. dollar when it holds
securities denominated in that foreign currency. To avoid having an amount
greater than its net assets subject to market risk in connection with currency
contract transactions, the fund will segregate cash, cash equivalents, or high
quality debt instruments to the extent required by the Securities and Exchange
Commission.
At the maturity of a forward contract, the fund may either accept or make
delivery of the currency specified in the contract or, prior to maturity, enter
into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually
effected with the currency trader who is a party to the original contract. The
fund will only enter into such a forward contract if it is expected that the
fund will be able readily to close out such contract. There can, however, be
no assurance that it will be able in any particular case to do so, in which
case the fund may suffer a loss.
Certain provisions of the Internal Revenue Code may limit the extent to which
the fund may enter into forward contracts. Such transactions may also affect,
for U.S. federal income tax purposes, the character and timing of income, gain
or loss recognized by the fund.
INVESTMENT COMPANIES -- Although the fund has no current intention of investing
in such securities (at least for the next 12 months), it has the ability to
invest up to 5% of its total assets in shares of closed-end investment
companies. Additionally, the fund would not acquire more than 3% of the
outstanding voting securities of any one closed-end investment company. (To
the extent that the fund invests in another investment company, it would pay an
investment advisory fee in addition to the fee paid to the Investment Adviser.)
DESCRIPTION OF CERTAIN SECURITIES
U.S. GOVERNMENT SECURITIES -- Securities guaranteed by the U.S. Government
include: (i) direct obligations of the U.S. Treasury (such as Treasury bills,
notes and bonds) and (ii) federal agency obligations guaranteed as to principal
and interest by the U.S. Treasury. In these securities, the payment of
principal and interest is unconditionally guaranteed by the U.S. Government,
and thus they are of the highest possible credit quality. Such securities are
subject to variations in market value due to fluctuations in interest rates,
but, if held to maturity, will be paid in full.
Securities issued by U.S. Government instrumentalities and certain federal
agencies are neither direct obligations of, nor guaranteed by, the Treasury.
However, they generally involve federal sponsorship in one way or another; some
are backed by specific types of collateral; some are supported by the issuer's
right to borrow from the Treasury; some are supported by the discretionary
authority of the Treasury to purchase certain obligations of the issuer; others
are supported only by the credit of the issuing government agency or
instrumentality. These agencies and instrumentalities include, but are not
limited to, Federal Land Banks, Farmers Home Administration, Central Bank
Cooperatives, and Federal Intermediate Credit Banks.
CASH EQUIVALENTS -- These securities include (1) commercial paper (short-term
notes up to 9 months in maturity issued by corporations or governmental
bodies), (2) commercial bank obligations (certificates of deposit
(interest-bearing time deposits), banker's acceptances (time drafts on a
commercial bank where the bank accepts an irrevocable obligation to pay at
maturity), and documented discount notes (corporate promissory discount notes
accompanied by a commercial bank guarantee to pay at maturity)), (3) savings
association obligations (certificates of deposit issued by mutual savings banks
or savings and loan associations), (4) securities of the U.S. Government, its
agencies or instrumentalities that mature, or may be redeemed, in one year or
less, and (5) corporate bonds and notes (corporate obligations that mature, or
that may be redeemed, in one year or less).
INVESTMENTS IN LOWER RATED BONDS -- Although the fund has no current intention
of investing in such securities (at least for the next 12 months), it has the
ability to invest up to 5% of it total assets in lower rated straight debt
securities (securities rated Baa or below by Moody's Investors Service, Inc. or
BBB or below by Standard & Poor's Corporation), including securities rate Ba
and BB or below (commonly referred to as "junk bonds" or "high-yield,
high-risk bonds") or in unrated securities that are determined to be of
equivalent quality. High-yield, high-risk bonds carry a higher degree of
investment risk and are considered speculative.
PORTFOLIO TURNOVER -- Portfolio changes will be made without regard to the
length of time particular investments may have been held. High portfolio
turnover involves correspondingly greater transaction costs in the form of
dealer spreads or brokerage commissions, and may result in the realization of
net capital gains, which are taxable when distributed to shareholders. In the
over-the-counter market, purchases and sales are transacted directly with
principal market-makers except in those circumstances where it appears better
prices and executions are available. See Financial Highlights in the
prospectus for the fund's portfolio turnover for each of the last six fiscal
periods.
CERTAIN RISK FACTORS RELATING TO
BELOW INVESTMENT GRADE BONDS
Certain risk factors relating to investing in below investment grade
securities (high-yield, high-risk bonds) are discussed below.
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES - High-yield, high risk bonds
are very sensitive to adverse economic changes and corporate developments.
During an economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress that would adversely
affect their ability to service their principal and interest payment
obligations, to meet projected business goals, and to obtain additional
financing. If the issuer of a bond defaulted on its proceedings, the fund may
incur losses or expenses in seeking recovery of amounts owed to it. In
addition, periods of economic uncertainty and changes can be expected to result
in increased volatility of market prices of high-yield, high-risk bonds.
PAYMENT EXPECTATIONS - High-yield, high-risk bonds, like other bonds, may
contain redemption or call provisions. If an issuer exercised these provisions
in a declining interest rate market, the fund would have to replace the
security with a lower yielding security, resulting in a decreased return for
investors. Conversely, a high-yield, high-risk bond's value will decrease in a
rising interest rate market, as it will with all bonds.
LIQUIDITY AND VALUATION - There may be little trading in the secondary market
for particular bonds, which may affect adversely the fund's ability to value
accurately or dispose of such bonds. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of high-yield, high-risk bonds, especially in a thin
market.
INVESTMENT RESTRICTIONS
The fund has adopted the following fundamental policies and investment
restrictions which may not be changed without a majority vote of its
outstanding shares. Such majority is defined by law as the vote of the lesser
of (i) 67% or more of the outstanding voting securities present at a meeting,
if the holders of more than 50% of the outstanding voting securities are
present in person or by proxy, or (ii) more than 50% of the outstanding voting
securities. All percentage limitations expressed in the following investment
restrictions are measured immediately after and giving effect to the relevant
transaction. The fund may not:
1. Invest in securities of an issuer (other than the U.S. or its agencies or
instrumentalities), if immediately after and as a result of such investment
more than 5% of the value of its total assets would be invested in the
securities of such other issuer (except with respect to 25% of the value of its
total assets, the fund may exceed the 5% limitation with regard to investments
in the securities of any one foreign government);
2. Invest in companies for the purpose of exercising control or management;
3. Invest 25% or more of the value of its total assets in the securities of
companies primarily engaged in any one industry;
4. Invest more than 5% of its total assets in the securities of other managed
investment companies; such investments shall be limited to 3% of the voting
stock of any investment company, provided, however, that investment in the open
market of a closed-end investment company where no more than customary brokers'
commissions are involved and investment in connection with a merger,
consolidation, acquisition or reorganization shall not be prohibited by this
restriction;
5. Buy or sell real estate (including real estate limited partnerships) in the
ordinary course of its business; however, the fund may invest in securities
secured by real estate or interests therein or issued by companies, including
real estate investment trusts and funds, which invest in real estate or
interests therein;
6. Buy or sell commodities or commodity contracts in the ordinary course of
its business, provided, however, that entering into a currency forward or
futures contract shall not be prohibited by this restriction;
7. Invest more than 10% of the value of its total assets in securities which
are not readily marketable (including repurchase agreements maturing in more
than seven days or non-U.S. securities for which there is no recognized
exchange or active and substantial over-the-counter market) or engage in the
business of underwriting securities of other issuers, except to the extent that
the disposal of an investment position may technically constitute the fund an
underwriter as that term is defined under the Securities Act of 1933;
8. Lend money; provided that entering into repurchase agreements, investment
in debt securities or in cash equivalents and lending of portfolio securities
shall not be prohibited by this restriction;
9. Sell securities short except to the extent that the fund contemporaneously
owns or has the right to acquire, at no additional cost, securities identical
to those sold short;
10. Purchase securities on margin or mortgage, pledge or hypothecate its
assets to any extent;
11. Borrow amounts in excess of 5% of the value of its total assets or issue
senior securities. In any event, the fund may borrow only as a temporary
measure for extraordinary or emergency purposes and not for investment in
securities;
12. Purchase or retain the securities of any issuer if those individual
officers and Directors of the fund, its Investment Adviser or principal
underwriter, each owning beneficially more than 1/2 of 1% of the securities of
such issuer, together own more than 5% of the securities of such issuer;
13. Invest more than 5% of the value of its total assets in securities of
companies having, together with their predecessors, a record of less than three
years of continuous operation;
14. Purchase or sell puts, calls, straddles or spreads, or combinations
thereof; nor
15. Purchase partnership interests or invest in leases to develop, or explore
for, oil, gas, or minerals.
For purposes of investment restriction number 3, the fund will not invest 25%
or more of total assets in the securities of issuers in the same industry.
Further investment policies of the fund, which may be changed by action of the
Board of Directors without shareholder approval, are as follows: the fund will
not invest in securities of an issuer if the investment would cause the fund to
own more than 10% of any class of securities of any one issuer; and the fund
will not invest more than 5% of its net assets in warrants valued at the lower
of cost or market, with no more than 2% being unlisted on either the New York
or the American Stock Exchanges (warrants acquired or attached to securities
may be deemed to be without value for the purpose of this restriction).
All percentages relating to the policies and restrictions of the fund are
measured at the time the investment is made.
FUND DIRECTORS AND OFFICERS
DIRECTORS AND DIRECTOR COMPENSATION
<TABLE>
<CAPTION>
NAME, ADDRESS AND POSITION PRINCIPAL OCCUPATION(S) DURING PAST AGGREGATE COMPENSATION TOTAL COMPENSATION FROM TOTAL
NUMBER
AGE WITH 5 YEARS (POSITIONS WITHIN THE (INCLUDING VOLUNTARILY ALL FUNDS MANAGED BY OF FUND BOARDS
REGISTRANT ORGANIZATIONS LISTED MAY HAVE DEFERRED COMPENSATION/1/) CAPITAL RESEARCH AND ON WHICH
CHANGED DURING THIS PERIOD) FROM THE FUND MANAGEMENT COMPANY/2/ DIRECTOR SERVES
DURING FISCAL YEAR ENDED FOR THE YEAR ENDED 9/30/95
9/30/95
<S> <C> <C> <C> <C> <C>
Richard G. Capen, Jr. Director Corporate Director and author; former $13,000 $25,300 2
Box 2494 United States Ambassador to Spain;
Rancho Santa Fe, CA former Vice Chairman of the Board;
92067 Knight Ridder, Inc.; former Chairman
Age: 61 and Publisher, The Miami Herald.
+H. Frederick Christie Director Private Investor; former President and $13,058/3/ $137,300/3/ 18
P.O. Box 144 Chief Executive Officer, The Mission
Palos Verdes Estates, Group (non-utility holding company,
CA 90274 subsidiary of Southern California
Age: 62 Edison Company); former President,
Southern California Edison Company
Alan E. Clements Director Private investor; former Executive $12,300 $23,900 2
16 Great Peter Street Director - Finance, Imperial Chemical
London SW1P3JF Industries PLC
England
Age: 66
++Robert B. Egelston Chairman Senior Partner, Capital Group None/4/ None/4/ 5
333 South Hope Street of the Partners, Limited Partnership
Los Angeles, CA Board
90071
Age: 64
Alan Greenway Director President, Greenway Associates, Inc. $13,250 $68,200 4
7413 Fairway Road (management consulting services);
La Jolla, CA 92037 former Chairman, Australian Tourist
Age: 68 Commission
++William R. Grimsley President Senior Vice President and Director, None/4/ None/4/ 3
Four Embarcadero and Capital Research and Management
Center, Suite 1800 Director Company
San Francisco, CA
94111
Age: 57
++Graham Holloway Director Former Chairman of the Board, None/4/ None/4/ 2
17309 Club Hill Drive American Funds Distributors, Inc.
Dallas, TX 75248
Age: 65
Leonade D. Jones Director Treasurer, The Washington Post $5,700/3/ $50,967/3/ 5
1150-15th Street, N.W. Company
Washington, DC 20071
Age: 48
William H. Kling Director President, Minnesota Public Radio; $12,650/3/ $72,900/3/ 4
45 East Seventh Street President, Greenspring Co.; former
St. Paul, MN 55101 President, American Public Radio
Age: 53 (now Public Radio International)
Norman R. Weldon Director President and Director, Corvita $12,900 $31,600 2
8210 N.W. 27th Street Corporation; Chairman of the
Miami, FL 33122 Board, Novoste Corporation; Director,
Age: 61 Enable Medical
Patricia K. Woolf Director Private investor; Lecturer, Department $12,600 $62,700 5
506 Quaker Road of Molecular Biology, Princeton
Princeton, NJ 08540 University
Age: 61
</TABLE>
+ May be deemed an "interested person" within the meaning of the Investment
Company Act of 1940 (the 1940 Act) due to membership on the board of directors
of the parent company of a registered broker-dealer.
++ Directors who are "interested persons" within the meaning of the 1940 Act
on the basis of their affiliation with the Investment Adviser.
/1/ Amounts may be deferred by eligible directors under a non-qualified
deferred compensation plan adopted by the fund in 1993. Deferred amounts
accumulate at an earnings rate determined by the total return of one or more of
the funds in The American Funds Group as designated by the director.
/2/ Capital Research and Management Company manages The American Funds Group
consisting of 28 funds: AMCAP Fund, American Balanced Fund, Inc., American
High-Income Municipal Bond Fund, Inc., American High-Income Trust, American
Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management Trust of
America, Capital Income Builder, Inc., Capital World Growth and Income Fund,
Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America.
Inc., Intermediate Bond Fund of America, The Investment Company of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of
America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of
Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of
America, The U.S. Treasury Money Fund of America, U.S. Government Securities
Fund and Washington Mutual Investors Fund, Inc. Capital Research and
Management Company also manages American Variable Insurance Series and Anchor
Pathway Fund which serve as the underlying investment vehicles for certain
variable insurance contracts; amd Bond Portfolio for Endowments, Inc. and
Endowments, Inc whose shares may be owned only by tax-exempt organizations.
/3/ Since the plan's adoption, the total amounts of deferred compensation
accrued by the fund (plus earnings thereon) for participating Directors are as
follows: H. Frederick Christie ($7,602); William H. Kling ($23,648); and
Leonade D. Jones ($6,678). Amounts deferred and accumulated earnings thereon
are not funded and are general unsecured liabilities of the fund until paid to
the Director.
/4/ Robert B. Egelston, William R. Grimsley and Graham Holloway are
affiliated with the Investment Adviser and, accordingly, receive no
compensation from the fund.
OFFICERS
(with their principal occupations during the past five years)#
ROBERT B. EGELSTON, Chairman of the Board (see above).
WILLIAM R. GRIMSLEY, President (see above).
* GORDON CRAWFORD, Senior Vice President. Senior Vice President and Director,
Capital Research Company
** STEVEN N. KEARSLEY, Vice President and Treasurer. Vice President and
Treasurer, Capital Research and Management Company.
* VINCENT P. CORTI, Vice President. Vice President - Fund Business Management
Group, Capital Research and Management Company.
GREGORY W. WENDT, Vice President. Four Embarcadero Center, San Francisco, CA
94111. Vice President, Capital Research Company.
* CHAD L. NORTON, Secretary. Vice President - Fund Business Management Group,
Capital Research and Management Company.
** MARY C. CREMIN, Assistant Treasurer. Vice President - Fund Business
Management Group, Capital Research and Management Company.
** ROBERT P. SIMMER, Assistant Treasurer. 5300 Robin Hood Road, Norfolk, VA
23513. Vice President - Fund Business Management Group, Capital Research and
Management Company.
__________________________________
# Positions within the organizations listed may have changed during this
period.
* Address is 333 South Hope Street, Los Angeles, CA 90071
** Address is 135 South State College Boulevard, Brea, CA 92621
All of the Directors and officers also are officers and/or
directors/trustees of one or more of the other funds for which Capital Research
and Management company serves as Investment Adviser. No compensation is paid
by the fund to any officer or Director who is a director, officer or employee
of the Investment Adviser or affiliated companies. The fund pays each
unaffiliated Director a fee of $8,000 per annum, plus $700 for each Board of
Directors meeting attended, plus $300 for each meeting attended as a member of
a committee of the Board of Directors. The Directors may elect, on a voluntary
basis, to defer all or a portion of these fees through a deferred compensation
plan in effect for the fund. The fund also reimburses certain expenses of the
Directors who are not affiliated with the Investment Adviser. The total
compensation paid by the fund to unaffiliated Directors during the fiscal year
ended September 30, 1995 was $96,000. As of November 1, 1995 the officers and
Directors of the fund and their families as a group owned beneficially or of
record less than 1% of the outstanding shares of the fund.
MANAGEMENT
INVESTMENT ADVISER -- The Investment Adviser, founded in 1931, maintains
research facilities in the U.S. and abroad, with a staff of professionals, many
of whom have a number of years of investment experience. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world.
The Investment Adviser believes that it is able to attract and retain quality
personnel.
An affiliate of the Investment Adviser compiles indices for major stock
markets around the world and compiles and edits Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The Investment Adviser is responsible for more than $100 billion of stocks,
bonds and money market instruments and serves over five million investors of
all types. These investors include privately owned businesses and large
corporations as well as schools, colleges, foundations and other non-profit and
tax-exempt organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENT -- The Investment Advisory and
Service Agreement (the Agreement) between the fund and the Investment Adviser
will continue in effect until November 30, 1996, unless sooner terminated and
may be renewed from year to year thereafter, provided that any such renewal has
been specifically approved at least annually by (i) the Board of Directors of
the fund, or by the vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of the fund, and (ii) the vote of a majority of
Directors who are not parties to the Agreement or interested persons (as
defined in the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on such approval. The Agreement provides that the
Investment Adviser has no liability to the fund for its acts or omissions in
performance of its obligations to the fund not involving willful misconduct,
bad faith, gross negligence or reckless disregard of its obligations under the
Agreement. The Agreement also provides that either party has the right to
terminate it, without penalty, upon 60 days' written notice to the other party
and that the Agreement automatically terminates in the event of its assignment
(as defined in the 1940 Act).
Under the Agreement, the Investment Adviser's fee is calculated at the annual
rates of 0.80% on the first $1 billion of the fund's net assets, 0.70% on net
assets in excess of $1 billion but not exceeding $2 billion, 0.67% on net
assets in excess of $2 billion but not exceeding $3 billion, 0.65% on net
assets in excess of $3 billion but not exceeding $5 billion, 0.635% on net
assets in excess of $5 billion but not exceeding $8 billion, and 0.625% on net
assets in excess of $8 billion.
The Investment Adviser, in addition to providing the services and paying the
compensation and travel expenses of qualified persons to perform executive,
administrative, clerical and bookkeeping functions of the fund, provides
suitable office space and utilities, and provides necessary small office
equipment and general purpose accounting forms, supplies, and postage used at
the office of the fund.
The Investment Adviser has agreed that in the event the expenses of the fund
(with the exclusion of interest, taxes, brokerage costs, extraordinary expenses
such as litigation and acquisitions or other expenses excludable under
applicable state securities laws or regulations) for any fiscal year ending on
a date on which the Agreement is in effect, exceed the expense limitations, if
any, applicable to the fund pursuant to state securities laws or any
regulations thereunder, it will reduce its fee by the extent of such excess
and, if required pursuant to any such laws or any regulations thereunder, will
reimburse the fund in the amount of such excess.
During the fiscal years ended September 30, 1995, 1994 and 1993, the
Investment Adviser received advisory fees of $26,933,000, $21,425,000 and
$12,856,000, respectively.
PRINCIPAL UNDERWRITER -- American Funds Distributors, Inc. (the Principal
Underwriter) is the principal underwriter of the fund's shares. The fund has
adopted a Plan of Distribution (the Plan), pursuant to rule 12b-1 under the
1940 Act (see Fund Organization and Management -- Principal Underwriter in the
prospectus). The Principal Underwriter receives amounts payable pursuant to
the Plan (see below) and commissions consisting of that portion of the sales
charge remaining after the discounts which it allows to investment dealers.
Commissions retained by the Principal Underwriter on sales of fund shares for
the fiscal year ended September 30, 1995 amounted to $3,278,000 after allowance
of $17,171,000 to dealers. During the fiscal years ended September 30, 1994
and 1993, the Principal Underwriter retained $5,343,000 and $3,044,000,
respectively.
As required by rule 12b-1, the Plan (together with the Principal Underwriting
Agreement) has been approved by a majority of the entire Board of Directors and
separately by a majority of the Directors who are not interested persons of the
fund and who have no direct or indirect financial interest in the operation of
the Plan or the Principal Underwriting Agreement, and the Plan has been
approved by the vote of a majority of the outstanding voting securities of the
fund. The officers and Directors who are interested persons of the fund may be
considered to have a direct or indirect financial interest in the operation of
the Plan due to present or past affiliations with the Investment Adviser and
related companies. Potential benefits of the Plan to the fund include improved
shareholder services, savings to the fund in transfer agency costs, savings to
the fund in advisory fees and other expenses, benefits to the investment
process from growth or stability of assets and maintenance of a financially
healthy management organization. The selection and nomination of Directors who
are not interested persons of the fund shall be committed to the discretion of
the Directors who are not interested persons during the existence of the Plan.
The Plan is reviewed quarterly and must be renewed annually by the Board of
Directors.
Under the Plan, the fund may expend up to 0.30% of its average net assets
annually to finance any activity which is primarily intended to result in the
sale of fund shares provided the fund's Board of Directors has approved the
category of expenses for which payment is made. These include service fees for
qualified dealers and dealer commissions and wholesaler compensation on sales
of shares exceeding $1 million (including purchases by any employer-sponsored
403(b) plan or purchases by any defined contribution plan qualified under
Section 401(a) of the Internal Revenue code including a 401(k) plan with 200 or
more eligible employees). Only expenses incurred during the preceeding 12
months and accrued while the Plan is in effect may be paid by the fund. During
the fiscal year ended September 30, 1995, the fund paid or accrued $8,551,000
under the Plan as compensation to dealers.
The Glass-Steagall Act and other applicable laws, among other things,
generally prohibit commercial banks from engaging in the business of
underwriting, selling or distributing securities, but permit banks to make
shares of mutual funds available to their customers and to perform
administrative and shareholder servicing functions. However, judicial or
administrative decisions or interpretations of such laws, as well as changes in
either federal or state statutes or regulations relating to the permissible
activities of banks or their subsidiaries of affiliates, could prevent a bank
from continuing to perform all or a part of its servicing activities. If a
bank were prohibited from so acting, shareholder clients of such bank would be
permitted to remain shareholders of the fund and alternate means for continuing
the servicing of such shareholders would be sought. In such event, changes in
the operation of the fund might occur and shareholders serviced by such bank
might no longer be able to avail themselves of any automatic investment or
other services then being provided by such bank. It is not expected that
shareholders would suffer adverse financial consequences as a result of any of
these occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and certain banks and financial
institutions may be required to be registered as dealers pursuant to state law.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
The fund intends to meet all the requirements and has elected the tax status
of a regulated investment company under the provisions of Subchapter M of the
Internal Revenue Code of 1986 (the Code). Under Subchapter M, if the fund
distributes within specified times at least 90% of its investment company
taxable income, it will be taxed only on that portion of such investment
company taxable income that it retains.
To qualify, the fund must (a) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and
gains from the sale or other disposition of stock, securities, currencies or
other income derived with respect to its business of investing in such stock,
securities or currencies; (b) derive less than 30% of its gross income from the
gains or sale or other disposition of stock or securities held less than three
months; and (c) diversify its holdings so that, at the end of each fiscal
quarter, (i) at least 50% of the market value of the fund's assets is
represented by cash, cash items, U.S. Government securities, securities of
other regulated investment companies and other securities, but such other
securities must be limited, in respect of any one issuer, to an amount not
greater than 5% of the fund's assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its
assets is invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies), or in two or more issuers which the fund controls and which are
engaged in the same or similar trades or businesses or related trades or
businesses.
Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gains (both long-term and
short-term) for the one-year period ending on October 31 (as though the
one-year period ending on October 31 were the regulated investment company's
taxable year), and (iii) the sum of any untaxed, undistributed net investment
income and net capital gains of the regulated investment company for prior
periods. The term "distributed amount" generally means the sum of (i) amounts
actually distributed by the fund from its current year's ordinary income and
capital gain net income and (ii) any amount on which the fund pays income tax
for the year. The fund intends, to the extent practicable, to meet these
distribution requirements to minimize or avoid the excise tax liability.
The amount of any realized gain or loss on closing out a forward currency
contract such as a forward commitment for the purchase or sale of foreign
currency will generally result in a realized capital gain or loss for tax
purposes. Under Code Section 1256, forward currency contracts held by the fund
at the end of each fiscal year will be required to be "marked to market" for
federal income tax purposes, that is, deemed to have been sold at market value.
Code Section 988 may also apply to forward currency contracts. Under Section
988, each foreign currency gain or loss is generally computed separately and
treated as ordinary income or loss. In the case of overlap between Sections
1256 and 988, special provisions determine the character and timing of any
income, gain or loss. The fund will attempt to monitor Section 988
transactions to avoid an adverse tax impact.
The fund also intends to continue distributing to shareholders all of the
excess of net long-term capital gain over net short-term capital loss on sales
of securities. If the net asset value of shares of the fund should, by reason
of a distribution of realized capital gains, be reduced below a shareholder's
cost, such distribution would to that extent be a return of capital to that
shareholder even though taxable to the shareholder, and a sale of shares by a
shareholder at net asset value at that time would establish a capital loss for
federal tax purposes.
Except for transactions the fund has identified as hedging transactions, the
fund is required for federal income tax purposes to recognize as income for
each taxable year its net unrealized gains and losses on forward currency
contracts as of the end of the year as well as those actually realized during
the year. Except for transactions in forward currency contracts which are
classified as part of a "mixed straddle," any gain or loss recognized with
respect to forward currency contracts is considered to be 60% long-term capital
gain or loss and 40% short-term capital gain or loss, without regard to the
holding period of the contract. In the case of a transaction classified as a
"mixed straddle," the recognition of losses may be deferred to a later taxable
year.
Sales of forward currency contracts which are intended to hedge against a
change in the value of securities or currencies held by the fund may affect the
holding period of such securities or currencies and, consequently, the nature
of the gain or loss on such securities or currencies upon disposition.
It is anticipated that any net gain realized from the closing out of forward
currency contracts will be considered gain from the sale of securities or
currencies and therefore be qualifying income for purposes of the 90% of gross
income from qualified sources requirement, as discussed above. In order to
avoid realizing excessive gains on securities or currencies held less than
three months, the fund may be required to defer the closing out of a forward
currency contract beyond the time when it would otherwise be advantageous to do
so. It is anticipated that unrealized gains on forward currency contracts,
which have been open for less than three months as of the end of the fund's
fiscal year and which are recognized for tax purposes, will not be considered
gains on securities or currencies held less than three months for purposes of
the 30% test, as discussed above.
The fund will distribute to shareholders annually any net long-term capital
gains which have been recognized for federal income tax purposes (including
unrealized gains at the end of the fund's fiscal year) on forward currency
contract transactions. Such distributions will be combined with distributions
of capital gains realized on the fund's other investments.
Dividends generally are taxable to shareholders at the time they are paid.
However, dividends declared in October, November and December and made payable
to shareholders of record in such a month are treated as paid, and are
therefore taxable, in the current calendar year even if the fund pays the
dividend after December 31 but during January of the following year.
If a shareholder exchanges or otherwise disposes of shares of the fund
within 90 days of having acquired such shares, and if, as a result of having
acquired those shares, the shareholder subsequently pays a reduced sales charge
for shares of the fund, or of a different fund, the sales charge previously
incurred in acquiring the fund's shares shall not be taken into account (to the
extent such previous sales charges do not exceed the reduction in sales
charges) for the purpose of determining the amount of gain or loss on the
exchange, but will be treated as having been incurred in the acquisition of
such other shares. Also, any loss realized on a redemption or exchange of
shares of a fund will be disallowed to the extent substantially identical
shares are reacquired within the 61-day period beginning 30 days before and
ending 30 days after the shares are disposed of.
Under the Code, distributions of net investment income by the fund to a
shareholder who, as to the U.S., is a nonresident alien individual, nonresident
alien fiduciary of a trust or estate, non-U.S. corporation, or non-U.S.
partnership (a non-U.S. shareholder) will be subject to U.S. withholding tax
(at a rate of 30% or lower treaty rate). Withholding will not apply if a
dividend paid by the fund to a non-U.S. shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens, U.S. residents, or domestic
corporations will apply. However, if the distribution is effectively connected
with the conduct of the non-U.S. shareholder's trade or business within the
U.S., the distribution would be included in the net income of the shareholder
and subject to U.S. income tax at the applicable marginal rate. Distributions
of net long-term capital gains are not subject to tax withholding, but if the
non-U.S. shareholder was an individual who was physically present in the U.S.
during the tax year for more than 182 days and such shareholder is nonetheless
treated as a nonresident alien, the distributions would be subject to a 30%
tax.
The fund may be required to pay withholding and other taxes imposed by foreign
countries, generally at rates from 10% to 40%, which would reduce the fund's
investment income. While the fund expects to invest less than 50% of its
assets outside the U.S. under current market conditions, if more than 50% in
value of the fund's total assets at the close of its taxable year consists of
securities of foreign issuers, the fund will be eligible to file elections with
the Internal Revenue Service pursuant to which shareholders of the fund will be
required to include their respective pro rata portions of such withholding
taxes in their federal income tax returns as gross income, treat such amounts
as foreign taxes paid by them, and deduct such amounts in computing their
taxable incomes or, alternatively, use them as foreign tax credits against
their federal income taxes. In any year the fund makes such an election,
shareholders will be notified as to the amount of foreign withholding and other
taxes paid by the fund.
As of the date of this statement of additional information, the maximum
federal individual stated tax rate applicable to ordinary income is 39.6%
(effective tax rates may be higher for some individuals due to phase out of
exemptions and elimination of deductions); the maximum individual tax rate
applicable to net capital gain is 28%; and the maximum corporate tax applicable
to ordinary income and net capital gain is 35%. However, to eliminate the
benefit of lower marginal corporate income tax rates, corporations which have
income in excess of $100,000 for a taxable year will be required to pay an
additional income tax liability up to $11,750 and corporations which have
taxable income in excess of $15,000,000 for a taxable year will be required to
pay an additional amount of tax of up to $100,000. Naturally, the amount of
tax payable by a taxpayer will be affected by a combination of tax law rules
covering, E.G., deductions, credits, deferrals, exemptions, sources of income
and other matters. Under the Code, an individual is entitled to establish an
IRA each year (prior to the tax return filing deadline for that year) whereby
earnings on investments are tax-deferred. In addition, in some cases, the IRA
contribution itself may be deductible.
The foregoing is limited to a summary of federal taxation and should not be
viewed as a comprehensive discussion of all provisions of the Code relevant to
investors. Dividends and capital gain distributions may also be subject to
state or local taxes. Investors should consult their own tax advisers for
additional details as to their particular tax status.
PURCHASE OF SHARES
PRICE OF SHARES -- Purchases of shares are made at the offering price next
determined after the purchase order is received by the fund or American Funds
Service Company (the Transfer Agent); this offering price is effective for
orders received prior to the time of determination of the net asset value and,
in the case of orders placed with dealers, accepted by the Principal
Underwriter prior to its close of business. The dealer is responsible for
promptly transmitting purchase orders to the Principal Underwriter. Orders
received by the investment dealer, the Transfer Agent, or the fund after the
time of the determination of the net asset value will be entered at the next
calculated offering price. Prices which appear in the newspaper are not always
indicative of prices at which you will be purchasing and redeeming shares of
the fund, since such prices generally reflect the previous day's closing price
whereas purchases and redemptions are made at the next calculated price.
The price you pay for shares, the public offering price, is based on the
net asset value per share which is calculated once daily at the close of
trading (currently 4:00 p.m., New York Time) each day the New York Stock
Exchange is open as set forth below. The New York Stock Exchange is currently
closed on weekends and on the following holidays: New Year's Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas Day. The net asset value per share is determined as follows:
1. Portfolio securities, including American Depositary Receipt's and
European Depositary Receipt's, which are traded on stock exchanges, are valued
at the last sale price on the exchange on which such securities are traded, as
of the close of business on the day the securities are being valued or, lacking
any sales, at the last available bid price. In cases where securities are
traded on more than one exchange, the securities are valued on the exchange
designated by or under the authority of the Board of Directors as the primary
market. Securities traded in the over-the-counter market are valued at the
last reported sale price prior to the time of valuation or, lacking any sales,
at the last available bid price in the over-the-counter market prior to the
time of valuation. Securities and assets for which market quotations are not
readily available (including restricted securities which are subject to
limitations as to their sale) are valued at fair value as determined in good
faith by or under the direction of the Board of Directors. U.S. Treasury
bills, and other short-term obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, with original or remaining
maturities in excess of 60 days are valued at the mean of representative quoted
bid and asked prices for such securities or, if such prices are not available,
are valued at the mean of representative quoted bid and asked prices for
securities of comparable maturity, quality and type. Short-term securities
with 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. Trading in securities on
European and Far Eastern securities exchanges and over-the-counter markets is
normally completed well before the close of business day in New York. In
addition, European or Far Eastern securities trading may not take place on all
business days in New York. Furthermore, trading takes place in various
non-U.S. markets on days which are not business days in New York and on which
the Fund's net asset value is not calculated. The calculation of net asset
value may not take place contemporaneously with the determination of the prices
of portfolio securities used in such calculation. Events affecting the values
of non-U.S. portfolio securities that occur between the time their prices are
determined and the close of the New York Stock Exchange will not be reflected
in the fund's calculation of net asset value unless the Board of Directors
deems that the particular event would materially affect net asset value, in
which case an adjustment will be made. Assets or liabilities initially
expressed in terms of foreign currencies are translated prior to the next
determination of the net asset value of the fund's shares, into U.S. dollars at
the prevailing market rates. The fair value of all other assets is added to
the value of securities to arrive at the total assets;
2. There are deducted from the total assets, thus determined, the liabilities,
including accruals of taxes and other expense items; and
3. The value of the net assets so obtained is then divided by the total number
of shares outstanding (excluding treasury shares) and the result, rounded to
the nearer cent, is the net asset value per share.
Any purchase order may be rejected by the Principal Underwriter or the fund.
The fund will not knowingly sell shares (other than for the reinvestment of
dividends or capital gain distributions) directly or indirectly, or through a
unit investment trust to any other investment company, person or entity, where,
after the sale, such investment company, person, or entity would own
beneficially directly, indirectly, or through a unit investment trust more than
4.5% of the outstanding shares of the fund without the consent of a majority of
the Board of Directors.
STATEMENT OF INTENTION -- The reduced sales charges and offering prices set
forth in the prospectus apply to purchases of $50,000 or more made within a
13-month period subject to the folowing statement of intention (the Statement)
terms. The Statement is not a binding obligation to purchase the indicated
amount. When a shareholder elects to utilize a Statement in order to qualify
for a reduced sales charge, shares equal to 5% of the dollar amount specified
in the Statement will be held in escrow in the shareholder's account out of the
initial purchase (or subsequent purchases, if necessary) by the Transfer Agent.
All dividends and any capital gain distributions on shares held in escrow will
be credited to the shareholder's account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified
13-month period, the purchaser must remit to the Principal Underwriter the
difference between the sales charge actually paid and the sales charge which
would have been paid if the total purchases had been made at a single time. If
the difference is not paid within 45 days after written request by the
Principal Underwriter or the investment dealer, the appropriate number of
shares will be redeemed to pay such difference. If the proceeds from this
redemption are inadequate, the purchaser will be liable to the Principal
Underwriter for the balance still outstanding. The Statement may be revised
upward at any time during the 13-month period, and such a revision will be
treated as a new Statement, except that the 13-month period during which the
purchase must be made will remain unchanged and there will be no retroactive
reduction of the sales charges paid on prior purchases. Existing holdings
eligible for rights of accumulation (see the prospectus and account
application) may be credited toward satisfying the Statement. During the
Statement period reinvested dividends and capital gain distributions,
investments in money market funds, and investments made under a right of
reinstatement will not be credited toward satisfying the Statement
In the case of purchase orders by the trustees of certain retirement
plans by payroll deduction, the sales charge for the investments made during
the 13-month period will be handled as follows: The regular monthly payrol
decuction investment will be multiplied by 13 and then multiplied by 1.5. The
current value of existing American Funds investments (other than money market
fund investments) and any rollovers or transfers reasonably anticipated to be
invested in non-money market American Funds during the 13-month period are
added to the figure determined above. The sum is the Statement amount and
applicable breakpoint level. On the first investment and all other investments
made pursuant to the statement of intention, a sales charge will be assessed
according to the sales charge breakpoint thus determined. There will be no
retroactive adjustments in sales charges on investments previously made during
the 13-month period.
Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their accepatance of these terms with their first purchase.
DEALER COMMISSIONS -- The following commissions will be paid to dealers who
initiate and are responsible for purchases of $1 million or more, for purchases
by any employer-sponsored 403(b) plan or purchases by any defined contribution
plan qualified under Section 401(a) of the Internal Revenue Code including a
"401(k)" plan with 200 or more eligible employees, and for purchases made at
net asset value by certain retirement plans of organizations with collective
retirement plan assets of $100 million or more: 1.00% on amounts to $2
million, 0.80% on amounts over $2 million to $3 million, 0.50% on amounts over
$3 million to $50 million, 0.25% on amounts over $50 million to $100 million,
and 0.15% on amounts over $100 million. The level of dealer commissions will
be determined based on sales made over a 12-month period commencing from the
date of the first sale at net asset value. See "The American Funds Shareholder
Guide" in the fund's prospectus for more information.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
AUTOMATIC INVESTMENT PLAN -- The automatic investment plan enables shareholders
to make regular monthly or quarterly investments in shares through automatic
charges to their bank accounts. With shareholder authorization and bank
approval, the Transfer Agent will automatically charge the bank account for the
amount specified ($50 minimum), which will be automatically invested in shares
at the offering price on or about the 10th day of the month (or on or about the
15th day of the month in the case of accounts for retirement plans where
Capital Guardian Trust Company serves as trustee or custodian.) Bank accounts
will be charged on the day or a few days before investments are credited,
depending on the bank's capabilities, and shareholders will receive a
confirmation statement at least quarterly. Participation in the plan will
begin within 30 days after receipt of the account application. If your bank
account cannot be charged due to insufficient funds, a stop-payment order or
closing of your account, the plan may be terminated and the related investment
reversed. The shareholder may change the amount of the investment or
discontinue the plan at any time by writing the Transfer Agent.
AUTOMATIC WITHDRAWALS -- Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -- A shareholder in one fund
may elect to cross-reinvest dividends or dividends and capital gain
distributions paid by that fund (the paying fund) into any other fund in The
American Funds Group (the receiving fund) subject to the following conditions:
(i) the aggregate value of the shareholder's account(s) in the paying fund(s)
must equal or exceed $5,000 (this condition is waived if the value of the
account in the receiving fund equals or exceeds that fund's minimum initial
investment requirement), (ii) as long as the value of the account in the
receiving fund is below that fund's minimum initial investment requirement,
dividends and capital gain distributions paid by the receiving fund must be
automatically reinvested in the receiving fund, and (iii) if this privilege is
discontinued with respect to a particular receiving fund, the value of the
account in that fund must equal or exceed the fund's minimum initial investment
requirement or the fund shall have the right, if the shareholder fails to
increase the value of the account to such minimum within 90 days after being
notified of the deficiency, automatically to redeem the account and send the
proceeds to the shareholder. These cross-reinvestments of dividends and
capital gain distributions will be at net asset value (without sales charge).
EXECUTION OF PORTFOLIO TRANSACTIONS
There are occasions on which portfolio transactions for the fund may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the fund, they are effected only when the
Investment Adviser believes that to do so is in the interest of the fund. When
such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner. The fund will not pay a mark-up for
research in principal transactions.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings, for the fiscal years ended September 30, 1995,
1994 and 1993 amounted to $13,063,000, $10,987,000 and $8,787,000
respectively.
GENERAL INFORMATION
CUSTODIAN OF ASSETS -- Securities and cash owned by the fund, including
proceeds from the sale of shares of the fund and of securities in the fund's
portfolio, are held by The Chase Manhattan Bank, N.A., One Chase Manhattan
Plaza, New York, NY 10081, as Custodian. Non-U.S. securities may be held by
the Custodian pursuant to sub-custodial arrangements in non-U.S. banks or
foreign branches of U.S. banks.
INDEPENDENT ACCOUNTANTS -- Deloitte & Touche LLP, 1000 Wilshire Boulevard,
Suite 1500, Los Angeles, CA 90017, has served as the fund's independent
accountants since its inception, providing audit services, preparation of tax
returns and review of certain documents to be filed with the Securities and
Exchange Commission. The financial statements included in this Statement of
Additional Information from the Annual Report have been so included in reliance
on the report of Deloitte & Touche LLP given on the authority of said firm as
experts in accounting and auditing.
REMOVAL OF DIRECTORS BY SHAREHOLDERS -- At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be cast
thereon, remove any director or directors from office and may elect a successor
or successors to fill any resulting vacancies for the unexpired terms of
removed directors. The fund has made an undertaking, at the request of the
staff of the Securities and Exchange Commission, to apply the provisions of
section 16(c) of the 1940 Act with respect to the removal of directors as
though the fund were a common-law trust. Accordingly, the directors of the
fund shall promptly call a meeting of shareholders for the purpose of voting
upon the question of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the outstanding shares.
REPORTS TO SHAREHOLDERS -- The fund's fiscal year ends on September 30.
Shareholders are provided at least semi-annually with reports showing the
investment portfolio, financial statements and other information. The fund's
annual financial statements are audited by the fund's independent accountants,
Deloitte & Touche LLP, whose selection is determined annually by the Board of
Directors.
PERSONAL INVESTING POLICY -- Capital Research and Management Company and its
affiliated companies have adopted a personal investing policy consistent with
Investment Company Institute guidelines. This policy includes: a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; pre-clearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the fund; blackout periods on personal investing for certain investment
personnel; ban on short-term trading profits for investment personnel;
limitations on service as a director of publicly traded companies; and
disclosure of personal securities transactions.
The financial statements including the investment portfolio and the report of
Independent Accountants contained in the Annual Report are included in this
Statement of Additional Information. The following information is not included
in the Annual Report:
DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND
MAXIMUM OFFERING PRICE PER SHARE - SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Net asset value and redemption price per share
(Net assets divided by shares outstanding) $26.11
Maximum offering price per share (100/94.25 of
per share net asset value, which takes into
account the fund's current maximum sales load) $27.70
</TABLE>
INVESTMENT RESULTS
The fund's yield is 0.86% based on a 30-day (or one month) period ended
September 30, 1995, computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last
day of the period, according to the following formula:
YIELD = 2[( a-b/cd + 1)/6/ -1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
The fund's one-year total return, five-year average annual compound return
and lifetime average annual compound return for the periods ended September 30,
1995 were 11.77%, 17.69% and 13.49%, respectively. The average annual compound
return ("T") is computed by using the value at the end of the period ("ERV") of
a hypothetical initial investment of $1,000 ("P") over a period of years ("n")
according to the following formula as required by the Securities and Exchange
Commission: P(1+T)/n/ = ERV.
To calculate total return, an initial investment is divided by the offering
price (which includes the sales charge) as of the first day of the period in
order to determine the initial number of shares purchased. Subsequent
dividends and capital gain distributions are then reinvested at net asset value
on the reinvestment date determined by the Board of Directors. The sum of the
initial shares purchased and shares acquired through reinvestment is multiplied
by the net asset value per share as of the end of the period in order to
determine ending value. The difference between the ending value and the
initial investment divided by the initial investment converted to a percentage
equals total return. The resulting percentage indicates the positive or
negative investment results that an investor would have experienced from
reinvested dividends and capital gain distributions and changes in share price
during the period. Total return may be calculated for one year, five years,
ten years and for other periods of years. The average annual total return over
periods greater than one year also may be computed by utilizing ending values
as determined above.
The following assumptions will be reflected in computations made in accordance
with the formula stated above: (1) deduction of the maximum sales load of
5.75% from the $1,000 initial investment; (2) reinvestment of dividends and
distributions at net asset value on the reinvestment date determined by the
Board; and (3) a complete redemption at the end of any period illustrated.
The fund may also, at times, calculate total return based on net asset value
per share (rather than the offering price), in which case the figure would not
reflect the effect of any sales charges which would have been paid if shares
were purchased during the period reflected in the computation. Consequently,
total return calculated in this manner will be higher. These total returns may
be calculated over periods in addition to those described above. Total return
for the unmanaged indices will be calculated assuming reinvestment of dividends
and interest, but will not reflect any deductions for advisory fees, brokerage
costs or administrative expenses.
The fund may also calculate a distribution rate on a taxable and tax
equivalent basis. The distribution rate is computed by dividing the dividends
paid by the fund over the last 12 months by the sum of the month-end net asset
value or maximum offering price and the capital gains paid over the last 12
months. The distribution rate may differ from the yield.
The fund may include information on its investment results and/or comparisons
of its investment results to various unmanaged indices (such as The Dow Jones
Average of 30 Industrial Stocks and The Standard and Poor's 500 Stock Composite
Index) or results of other mutual funds or investment or savings vehicles in
advertisements or in reports furnished to present or prospective shareholders.
The fund may refer to results compiled by organizations such as CDA Investment
Technologies, Ibbotson Associates, Lipper Analytical Services, Morningstar,
Inc. and Weisenberger Investment Companies Services and by the U.S. Department
of Commerce. Additionally, the fund may, from time to time, refer to results
published in various newspapers or periodicals, including Barrons, Forbes,
Fortune, Institutional Investor, Kiplinger's Personal Finance Magazine, Money,
U.S. News and World Report and The Wall Street Journal.
The fund may, from time to time, illustrate the benefits of tax-deferral by
comparing taxable investments to investments made through tax-deferred
retirement plans.
The fund may, from time to time, compare its investment results with the
Consumer Price Index, which is a measure of the average change in prices over
time in a fixed market basket of goods and services (I.E. food, clothing,
fuels, transportation, and other goods and services that people buy for
day-to-day living).
The investment results set forth below were calculated as described in the
fund's prospectus. The fund's results will vary from time to time depending
upon market conditions, the composition of the fund's portfolio and operating
expenses of the fund, so that any investment results reported by the fund
should not be considered representative of what an investment in the fund may
earn in any future period. These factors and possible differences in
calculation methods should be considered when comparing the fund's investment
results with those published for other mutual funds, other investment vehicles
and unmanaged indices. The fund's results also should be considered relative
to the risks associated with the fund's investment objective and policies.
EXPERIENCE OF THE INVESTMENT ADVISER -- Capital Research and Management Company
manages nine common stock funds that are at least 10 years old. In all of the
10-year periods since 1964 (115 in all), those funds have had better total
returns than the Standard and Poor's 500 Stock Composite Index in 94 of the 115
periods.
Note that past results are not an indication of future investment results.
Also, the fund has different investment policies than the funds mentioned
above. These results are included solely for the purpose of informing
investors about the experience and history of Capital Research and Management
Company.
SMALL CAPITALIZATION STOCKS VERSUS LARGE CAPITALIZATION STOCKS -- According to
Ibbottson Associates, an investment in small company stocks has grown an
average of 15.6% a year from September 30, 1970 through September 30, 1995
compared with an average of 12.4% a year for an investment in large company
stocks. Small company stocks are represented by the lowest 20% of market
capitalization of New York Stock Exchange, American Stock Exchange and
Over-the-Counter stocks, while large company stocks are represented by the
Standard & Poor's 500 Stock Composite Index.
The investment results set forth below were calculated as described in the
fund's Prospectus.
SMALLCAP VS. VARIOUS UNMANAGED INDICES
<TABLE>
<CAPTION>
Capital Appreciation
Russell/3/ NASDAQ/4/
Period SMALLCAP S&P 500/1/ MSCIW/2/ 2000 SMALLCAP OTC
<S> <C> <C> <C> <C> <C> <C>
4/30/90*
to 9/30/95 + 98.6% + 108.2% + 68.4% + 116.1% + 89.4% + 148.4%
</TABLE>
*Commencement of operations
/1/ The Standard and Poor's 500 Stock Composite Index, which consists of
industrial, transportation, public utilities and financial stocks and
represents a large portion of the value of issues traded on the New York Stock
Exchange. Selected issues traded on the American Stock Exchange are also
included.
/2/ The Morgan Stanley Capital International World Index, which is an
arithmetical average, weighted by market value, of the performance of more than
1,400 securities listed on the stock exchanges of Europe, Australia, the Far
East, Canada, New Zealand and the U.S.
/3/ The Russell 2000 Index, which contains 2000 smaller capitalized companies
in the Russell 3000 Index (these smaller companies have market capitalizations
of approximately $20 million to $300 million).
/4/ The National Association of Securities Dealers Automated Quotation
Composite Index of Over-the-Counter Stocks represents all domestic
over-the-counter stocks except those traded on exchanges and those having only
one market maker, covers some 3,500 stocks, is market value weighed and
reflects only capital appreciation.
IF YOU ARE CONSIDERING THE FUND FOR RETIREMENT...
<TABLE>
<CAPTION>
Here's how much you would have if you invested $2,000 a year in the fund:
<S> <C> <C>
1 Year 3 Years Lifetime
(10/1/94 - 9/30/95) (10/1/93 - 9/30/95) (4/30/90 - 9/30/95)
$2,235 $7,878 $17,910
</TABLE>
Illustration of a $10,000 investment in the fund with
dividends reinvested and capital gain distributions taken in shares
(For the lifetime of the fund, April 30, 1990 through September 30,
1995)
<TABLE>
<CAPTION>
COST OF SHARES VALUE OF
SHARES
Fiscal Annual Total Investment From From Dividends Total
Year End Dividends Dividends Cost Initial Capital Reinvested Value
9/30 (cumulative) Investment Gains
Reinvested
<S> <C> <C> <C> <C> <C> <C> <C>
1990# $ -- $ -- $ 10,000 $ 8,288 $ -- $ -- $ 8,288
1991 251 251 10,251 11,000 -- 307 11,307
1992 71 322 10,322 11,256 -- 384 11,640
1993 52 374 10,374 14,200 670 548 15,418
1994 41 415 10,415 14,756 1,376 612 16,744
1995 116 531 10,531 16,319 2,719 818 19,856
</TABLE>
The dollar amount of capital gain distributions during the period was
$2,151
# from April 30, 1990, the date the fund commenced operations
APPENDIX
DESCRIPTION OF BOND RATINGS
CORPORATE DEBT SECURITIES
MOODY'S INVESTORS SERVICE, INC. rates the long-term debt securities issued by
various entities in categories ranging from "Aaa" to "C" according to quality.
"AAA -- Best quality. These securities carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues."
"AA -- High quality by all standards. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude, or there may be
other elements present which make the long-term risks appear somewhat greater."
"A -- Upper medium grade obligations. These bonds possess many favorable
investment attributes. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future."
"BAA -- Medium grade obligations. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and, in fact, have
speculative characteristics as well."
"BA -- Have speculative elements; future cannot be considered as well assured.
The protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Bonds in this class are characterized by uncertainty of position."
"B -- Generally lack characteristics of the desirable investment; assurance of
interest and principal payments or of maintenance of other terms of the
contract over any long period of time may be small."
"CAA -- Of poor standing. Issues may be in default or there may be present
elements of danger with respect to principal or interest."
"CA -- Speculative in a high degree; often in default or have other marked
shortcomings."
"C -- Lowest rated class of bonds; can be regarded as having extremely poor
prospects of ever attaining any real investment standing."
STANDARD & POOR'S CORPORATION rates the long-term securities debt of various
entities in categories ranging from "AAA" to "D" according to quality.
"AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong."
"AA -- High grade. Very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree."
"A - Have a strong capacity to pay interest and repay principal, although they
are somewhat more susceptible to the adverse effects of change in circumstances
and economic conditions, than debt in higher rated categories."
"BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal than for debt in
higher rated categories."
"BB, B, CCC, CC, C -- Regarded, on balance, as predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with the
terms of the obligation. BB indicates the lowest degree of speculation and C
the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions."
"C-1 -- Reserved for income bonds on which no interest is being paid."
"D -- In default and payment of interest and/or repayment of principal is in
arrears."
SMALLCAP World Fund
INVESTMENT PORTFOLIO September 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INDUSTRY DIVERSIFICATION
Broadcasting & Publishing 8.69%
Leisure & Tourism 5.74%
Business & Public Services 4.88%
Data Processing & Reproduction 4.43%
Banking 4.14%
Other Industries 51.80%
Cash & Equivalents 20.32%
PERCENT
OF
NET
ASSETS
LARGEST INDIVIDUAL HOLDINGS
Wisconsin Central Transportation 1.13%
Village Roadshow .93
Hoganas Eldfast .90
Acclaim Entertainment .86
Mentor Graphics .79
Gaylord Entertainment .79
Westwood One .73
Cablevision Systems .72
Consolidated Stores .71
CIDCO .70
Percent
Shares or Market of
EQUITY-TYPE SECURITIES Principal Value Net
(common and preferred stocks and convertible Amount (000) Assets
debentures)
BROADCASTING & PUBLISHING - 8.69%
Gaylord Entertainment Co., Class A (USA) 1,344,000 $36,456 .79%
Westwood One, Inc. (USA)/1/ /2/ 1,875,000 33,750 .73
Cablevision Systems Corp., Class A (USA)/1/ 560,000 33,390 .72
International Family Entertainment, Inc., Class B 1,415,000 26,885 .58
(USA)/1/
Scandinavian Broadcasting System SA (Denmark - 655,000 18,504 .40
Incorporated in Luxembourg) /1/
CanWest Global Communications Corp. (Canada) /2/ 918,300 16,938 .37
FLEXTECH PLC (United Kingdom)/1/ 2,329,600 16,570 .36
Renaissance Communications Corp. (USA)/1/ 461,300 16,145 .35
TCA Cable TV, Inc. (USA) 540,000 15,525 .33
WIC Western International Communications Ltd., 1,025,000 15,469 .33
Class B (Canada)
United International Holdings, Inc., Class A (USA)/1/ 810,000 14,985 .32
United Television, Inc. (USA) 150,000 13,387 .29
BET Holdings, Inc., Class A (USA)/1/ /2/ 662,100 13,242 .29
Comcast UK Cable Partners Ltd., Class A (United 700,000 10,938 .24
Kingdom)/1/
Westcott Communications, Inc. (USA) /1/ 700,000 10,587 .23
Young Broadcasting Inc., Class A (USA)/1/ /2/ 310,000 9,688 .21
Central European Media Enterprises Ltd., Class A
(USA - Incorporated in Bermuda) /1/ /2/ 349,500 8,825 .19
Jones Intercable, Inc., Class A (USA)/1/ 610,000 8,311 .18
Data Broadcasting Corp. (USA) /1/ 1,000,000 7,688 .17
Chrysalis Group PLC (United Kingdom)/1/ /2/ 1,600,000 7,637 .16
Century Communications Corp., Class A (USA)/1/ 724,064 7,331 .16
Scottish Television PLC (United Kingdom) 900,000 7,184 .15
Metropole Television (France) 68,900 6,059 .13
ValueVision International, Inc., Class A (USA) /1/ 1,000,000 5,875 .13
DMX Inc. (formerly International Cablecasting 2,180,000 5,723 .12
Technologies, Inc.) (USA) /1/
American Publishing Co., Class A (USA) 400,000 5,000 .11
Adelphia Communications Corp., Class A (USA)/1/ 525,000 4,725 .10
Infinity Broadcasting Corp., Class A (USA)/1/ 138,562 4,538 .10
AUSTEREO (Australia) 3,339,984 4,164 .09
Western Publishing Group, Inc. (USA) /1/ 300,000 3,825 .08
NRJ SA (France) 39,284 3,120 .07
SelecTV PLC (United Kingdom)/1/ 7,150,000 2,486 .05
Grammy Entertainment (Thailand) 240,000 2,182 .05
Multimedia, Inc. (USA)/1/ 37,700 1,640 .04
AUDIOFINA (Luxembourg) 2,085 1,252 .03
Pacific Media PLC (United Kingdom)/1/ 52,249,124 1,032 .02
M-Net (South Africa) 1,330,000 929 .02
LEISURE & TOURISM - 5.74%
Village Roadshow Ltd. (Australia) 8,147,437 28,623
Village Roadshow Ltd., preferred shares 5,185,001 14,494 .93
Spelling Entertainment Group Inc. (USA)/1/ 2,118,500 28,070 .61
Rio Hotel & Casino, Inc. (USA)/1/ /2/ 1,382,700 17,975 .39
Showboat, Inc. (USA) /2/ 785,000 16,976 .37
AAPC Ltd. (Australia) /2/ 28,028,854 16,941 .37
Aztar Corp. (USA) /1/ 1,740,000 14,573 .31
Savoy Pictures Entertainment, Inc. (USA)/1/ /2/ 1,870,000 12,389 .27
Sydney Harbour Casino Holdings Ltd., convertible 9,073,100 12,201 .26
preferred (Australia) /1/ /3/
Four Seasons Hotels Inc. (Canada) 823,649 10,435 .22
ACTIVISION, Inc. (USA)/1/ /3/ 720,000 11,430 .25
Bally Entertainment Corp. (USA) /1/ 850,000 9,244 .20
London Clubs International PLC (United Kingdom) 1,415,000 9,013 .19
J D Wetherspoon PLC (United Kingdom) 800,000 7,802 .17
Station Casinos, Inc. (USA) /1/ 475,000 7,303 .16
Trump Hotels & Casino Resorts, Inc. (USA) /1/ 410,000 6,970 .15
UGC Droit Audiovisuels, SA (France) 146,869 6,473 .14
ALLIANCE COMM, Class A (Canada)/1/ /2/ 316,000 3,297
ALLIANCE COMM, Class B (Canada)/1/ 316,000 3,032 .14
CINAR Films Inc., Class B (Canada) /1/ 375,000 4,641 .10
Quantum Restaurant Group, Inc. (USA)/1/ 315,000 4,213 .09
Mandarin Oriental International Ltd. (Hong Kong - 3,916,319 4,073 .09
Incorporated in Bermuda)
Gaumont SA (France) 69,159 4,003 .09
Ameristar Casinos, Inc. (USA)/1/ 440,000 2,860 .06
Filmes Lusomundo, SA, preferred shares (Portugal) 292,500 2,759 .06
Samuel Goldwyn Co. (USA)/1/ /2/ 428,400 2,570 .05
MovieFone, Inc., Class A (USA)/1/ /2/ 360,000 1,755 .04
Au Bon Pain Co., Inc. (USA)/1/ 200,000 1,550 .03
BUSINESS & PUBLIC SERVICES - 4.88%
Banta Corp. (USA) 679,900 28,896 .62
Flughafen Wien AG (Austria) 350,600 22,163 .48
Bell & Howell Holdings Co. (USA) /1/ 855,000 21,802 .47
Oxford Health Plans, Inc. (USA)/1/ 200,000 14,550 .31
Vivra Inc. (USA)/1/ 400,000 12,700 .27
DOVatron International, Inc. (USA) /1/ /2/ 350,000 12,119 .26
America Online, Inc.(USA)/1/ 175,000 12,031 .26
Katz Media Group, Inc. (USA) /1/ 575,500 11,726 .25
Quebecor Printing Inc. (Canada) 705,000 11,296 .24
Blenheim Group PLC (United Kingdom) 2,261,460 8,364
Blenheim Group PLC, 6.40% convertible preferred 409,090 427 .19
Western Waste Industries (USA)/1/ 417,000 8,340 .18
Filofax Group PLC (United Kingdom) 1,459,000 5,881 .13
Thomas Group, Inc. (USA)/1/ /2/ 388,500 5,633 .12
US Order, Inc. (USA) /1/ 300,000 5,550 .12
Continental Waste Industries, Inc. (USA)/1/ 300,000 5,175 .11
International Container Terminal Services, Inc.,
5.00% convertible debentures 2001 (Philippines) $5,500,000 4,647 .10
Goldsborough Healthcare PLC (United Kingdom) 2,194,000 4,424 .10
United Waste Systems, Inc. (USA)/1/ 100,000 4,175 .09
APCOA PARKING (Germany) 61,000 3,993 .09
Air & Water Technologies Corp., Class A (USA)/1/ 658,500 3,539 .08
MDC Corp., Class A (Canada)/1/ 2,600,000 3,488 .08
M.A.I.D. PLC (United Kingdom)/1/ 841,600 3,259 .07
CBT Group PLC (American Depositary Receipts) 60,000 2,865 .06
(Ireland) /1/
Kanamoto Co. Ltd. (Japan) 156,000 2,294 .05
Energy BioSystems Corp. (USA)/1/ 240,000 2,220 .05
UNC Inc. (USA)/1/ 350,000 2,187 .05
GNI Group, Inc. (USA)/1/ 290,000 2,103 .05
DATA PROCESSING & REPRODUCTION - 4.43%
Acclaim Entertainment, Inc. (USA)/1/ 1,550,000 39,912 .86
Mentor Graphics Corp. (USA)/1/ 1,750,000 36,531 .79
Corel Corp. (Canada)/1/ 1,522,500 24,931 .54
Diamond Multimedia Systems, Inc. (USA) /1/ 700,000 22,575 .49
Structural Dynamics Research Corp. (USA)/1/ 530,000 9,838 .21
Transaction Systems Architects, Inc., Class A (USA) /1/ 350,000 9,362 .20
Scribona AB, Class B (Sweden) 982,000 8,640 .19
Aspen Technology, Inc. (USA)/1/ 270,000 8,100 .17
CONVEX Computer Corp. (USA)/1/ /2/ 1,515,000 6,818 .15
Avid Technology, Inc. (USA)/1/ 150,000 6,450 .14
Radius Inc. (USA)/1/ /2/ 900,000 6,413 .14
Symantec Corp. (USA)/1/ 200,000 6,000 .13
Electronic Arts (USA)/1/ 125,000 4,594 .10
Walker Interactive Systems, Inc. (USA)/1/ 511,800 4,446 .10
Crystal Dynamics, Inc., convertible preferred, 533,334 4,000 .09
Series D (USA) /1/ /2/ /3/
Innovus Corp. (USA) /1/ /2/ /3/ 300,625 2,593 .05
Hummingbird Communications Ltd. (Canada)/1/ 57,500 2,142 .05
Information International, Inc. (USA)/1/ /2/ 150,000 1,425 .03
BANKING - 4.14%
Washington Mutual Savings Bank (USA) 918,750 24,347 .53
First Financial Corp. (USA) 900,000 19,125 .41
Mercantile Bancorporation Inc. (USA) 375,000 16,781 .36
West One Bancorp (USA) 350,000 14,044 .30
Dah Sing Financial Holdings Ltd. (Hong Kong) 6,200,000 13,955 .30
City National Corp. (USA) 1,025,000 13,581 .29
Provident Bancorp, Inc. (USA) 305,000 12,657 .27
Central Fidelity Banks, Inc. (USA) 367,500 11,944 .26
Hibernia Corp., Class A (USA) 1,100,000 11,137 .24
Keystone Financial, Inc. (USA) 300,000 9,600 .21
Safra Republic Holdings SA (Luxembourg) 112,000 9,520 .21
FirstMerit Corp. (formerly First Bancorporation of 340,000 8,500 .18
Ohio) (USA)
Washington Federal Savings and Loan Assn. (USA) 353,925 8,406 .18
Standard Federal Bank (USA) 150,000 5,850 .13
Collective Bancorp, Inc. (USA) 221,800 5,739 .13
TriCo Bancshares (USA) 149,880 3,073 .07
Yapi ve Kredi Bankasi AS (Turkey) 58,000,000 3,063 .07
HEALTH & PERSONAL CARE - 3.95%
Genetics Institute, Inc. (USA)/1/ 333,000 12,654 .27
Cephalon, Inc. (USA)/1/ 455,000 12,512 .27
AutoImmune Inc. (USA)/1/ /3/ 794,000 12,406 .27
Athena Neurosciences, Inc. (USA)/1/ 992,500 11,848 .26
Sequus Pharmaceuticals, Inc. (formerly Liposome 585,000 6,801
Technology, Inc.) (USA) /1/
Sequus Pharmaceuticals, Inc., warrants, expire 1998 /1/ 48,000 1,848
Sequus Pharmaceuticals, Inc., convertible preferred /1/ /3/ 80,832 323 .19
Vical Inc. (USA) /1/ 700,000 8,225 .18
Ranbaxy Laboratories Ltd. (Global Depositary 250,000 7,062 .15
Receipts)(India)
Omnicare, Inc. (USA) 180,000 7,020 .15
Genelabs Technologies, Inc., units (each unit
consists of one ordinary share and one warrant
to purchase one ordinary share) (USA) /1/ /2/ /3/ 1,390,000 6,776 .15
NeoPath, Inc. (USA) /1/ 253,000 6,704 .14
Paragon Trade Brands, Inc. (USA)/1/ 420,000 6,510 .14
PerSeptive Biosystems, Inc. (USA)/1/ 600,000 6,450 .14
Hologic, Inc. (USA) /1/ /2/ 265,000 6,095 .13
Ethical Holdings PLC (American Depositary Receipts) 675,000 6,075 .13
(United Kingdom) /1/ /2/
Neurogen Corp. (USA) /1/ 250,000 5,563 .12
SciClone Pharmaceuticals, Inc. (USA)/1/ 600,000 5,100 .11
Anesta Corp. (USA)/1/ /2/ 460,000 5,002 .11
Benson Eyecare Corp. (USA) /1/ 500,000 4,938 .11
Alpha-Beta Technology, Inc. (USA)/1/ 545,000 4,428 .09
VIVUS, Inc. (USA) /1/ 200,000 4,125 .09
InStent Inc. (USA) /1/ 250,000 4,063 .09
Thermedics Inc. (USA) /1/ 200,000 3,975 .08
Isis Pharmaceuticals, Inc. (USA)/1/ 325,000 3,778 .08
HemaSure (USA) /1/ 240,000 3,720 .08
Biomatrix, Inc. (USA)/1/ 410,000 3,588 .08
Maybelline, Inc. (USA) 150,000 3,563 .08
Body Shop International PLC (United Kingdom) 1,360,000 3,063 .07
Ventritex, Inc. (USA) /1/ 100,000 2,150 .05
Cyberonics, Inc. (USA)/1/ 370,800 1,854 .04
InSite Vision Inc. (USA)/1/ 350,000 1,641 .04
Vision-Sciences, Inc. (USA)/1/ 484,500 1,635 .04
Gensia Pharmaceuticals, Inc. (USA)/1/ 180,000 990 .02
TELECOMMUNICATIONS - 3.42%
International CableTel Inc. (USA)/1/ 1,009,466 28,265 .61
Vanguard Cellular Systems, Inc. (USA)/1/ 937,500 24,023 .52
Pilipino Telephone Corp. (Philippines)/1/ /3/ 25,225,000 23,976 .52
Octel Communications Corp. (USA)/1/ 650,000 22,669 .49
Telephone and Data Systems, Inc. (USA) 270,000 11,340 .25
Associated Communications Corp., Class A (USA)/1/ 319,075 6,621
Associated Communications Corp., Class B /1/ 319,075 6,621 .29
Centennial Cellular Corp. (USA)/1/ 490,000 9,555 .21
Brooks Fiber Properties, Inc., convertible 49,000 8,085 .17
preferred (USA) /1/ /2/ /3/
Atlantic Tele-Network, Inc. (USA)/1/ 610,000 7,472 .16
MULTICHOICE (South Africa) 1,330,000 4,007 .09
MIDCOM Communications Inc. (USA) /1/ 250,000 3,813 .08
M-CELL (South Africa) 2,500,400 1,575 .03
MERCHANDISING - 3.21%
Consolidated Stores Corp. (USA)/1/ 1,430,000 33,069 .71
Sports Authority, Inc. (USA) /1/ 699,000 19,310 .42
Fabri-Centers of America, Inc., Class A (USA)/1/ 525,000 8,072
Fabri-Centers of America, Inc., Class B /1/ 525,000 6,431 .31
Williams-Sonoma, Inc. (USA)/1/ 548,750 11,387 .25
Duty Free International, Inc. (USA) 856,500 10,920 .24
AnnTaylor, Inc. (USA) /1/ 600,000 10,575 .23
Arbor Drugs, Inc. (USA) 500,000 9,375 .20
Viking Office Products, Inc. (USA)/1/ 200,000 8,350 .18
Hanover Direct, Inc. (USA)/1/ 3,944,000 7,641 .16
Lands' End, Inc. (USA)/1/ 360,000 5,670 .12
HOMAC CORP (Japan) 284,000 5,577 .12
Daiki, 1.50% convertible debentures 2004 (Japan) Y450,000,000 4,378 .09
Colruyt NV (Belgium) 12,000 3,022 .07
Tandy Brands Accessories, Inc. (USA)/1/ 221,625 1,787 .04
Crown Books Corp. (USA)/1/ 160,000 1,680 .04
Groupe Andre (France) 18,494 1,521 .03
TRANSPORTATION: RAIL & ROAD - 2.97%
Wisconsin Central Transportation Corp. (USA)/1/ 783,100 52,272 1.13
TNT Freightways Corp. (USA) /2/ 1,350,000 25,481 .55
Werner Enterprises, Inc. (USA) 850,000 17,637 .38
Swift Transportation Co., Inc. (USA)/1/ 950,000 16,388 .36
M.S. Carriers, Inc. (USA)/1/ /2/ 837,000 13,392 .29
TNT Ltd. (Australia)/1/ 4,076,379 6,252
TNT Ltd., 8.00% convertible preferred 1,316,100 2,118 .18
Nippon Konpo Unyu Soko (Japan) 460,000 3,701 .08
ELECTRONIC COMPONENTS - 2.73%
Flextronics International Ltd. (Singapore)/1/ /2/ 746,500 19,222 .41
SCI Systems, Inc. (USA)/1/ 525,236 18,121 .39
ANTEC Corp. (USA)/1/ /2/ 1,305,000 17,454 .38
VLSI Technology, Inc. (USA)/1/ 500,000 17,125 .37
Quantum Corp. (USA)/1/ 618,100 13,521 .29
Actel Corp. (USA)/1/ 650,000 11,456 .25
Park Electrochemical Corp. (USA) 240,000 7,770 .17
Linear Technology Corp. (USA) 120,000 4,980 .11
Micro Linear Corp. (USA)/1/ 300,000 4,688 .10
Raychem Corp. (USA) 88,000 3,960 .09
Rogers Corp. (USA)/1/ 140,000 3,360 .07
Western Digital Corp. (USA)/1/ 200,000 3,175 .07
First Pacific Networks, Inc. (USA)/1/ 850,000 1,541 .03
MACHINERY & ENGINEERING - 2.49%
Svedala Industri AB (Sweden) 500,000 15,073 .33
Thermo Fibertek Inc. (USA)/1/ 825,000 13,509 .29
Greenfield Industries, Inc. (USA) 414,100 12,734 .28
Valmont Industries, Inc. (USA) 470,000 11,398 .25
Kalmar Industries AB (American Depositary Receipts) 638,000 11,006 .24
(Sweden) /3/
Allied Products Corp. (USA) 371,900 7,949 .17
AGCO Corp. (USA) 150,000 6,825 .15
Thermo Power Corp. (USA)/1/ 410,000 6,509 .14
Crompton & Knowles Corp. (USA) 400,000 5,950 .13
Cincinnati Milacron Inc. (USA) 138,900 4,375 .09
Jungheinrich AG (Germany) 20,500 4,176 .09
Miura Co., Ltd. (Japan) 250,000 3,928 .08
UMW Holdings Bhd. (Malaysia) 1,337,000 3,617 .08
Varity Corp. (USA)/1/ 71,914 3,200 .07
Siu-Fung Ceramics Holdings Ltd. (Hong Kong - 10,655,737 2,398 .05
Incorporated in Bermuda)
Memtec Ltd. (American Depositary Receipts)(Australia) 114,236 1,999 .04
EMCON (USA)/1/ 117,700 574 .01
ENERGY SOURCES - 2.40%
Transocean Drilling AS (Norway) 1,508,500 24,145 .52
California Energy Co., Inc. (USA)/1/ 750,000 15,375 .33
ELAN Energy Inc. (Canada)/1/ 1,635,000 14,013 .30
Ashland Coal, Inc. (USA)/3/ 429,000 12,924 .28
ABACAN RES CORP C$ (Canada)/1/ /2/ 4,524,000 11,463 .25
Cabre Exploration Ltd. (Canada)/1/ /2/ 933,400 9,043 .19
Ampolex Ltd., 8.00% convertible preferred (Australia) 908,000 3,300
Ampolex Ltd. 1,000,000 2,161 .12
Paramount Resources Ltd. (Canada) 488,300 5,459 .12
Blue Range Resource Corp. (Canada)/1/ 500,000 3,633 .08
NOVUS PETROLEUM (Australia) 2,700,000 3,468 .08
Czar Resources Ltd. (Canada)/1/ 2,858,000 2,939 .06
Zhenhai Refining & Chemical Co. Ltd., Class H 10,798,500 2,570 .06
(People's Republic of China)
Elf Gabon SA (Gabon) 3,325 472 .01
MISCELLANEOUS MATERIAL & COMMODITIES -2.31%
Hoganas Eldfast AB, Class B (Sweden) /2/ 1,405,000 41,748 .90
SGL Carbon AG (Germany) 250,000 16,188 .35
Intertape Polymer Group Inc. (Canada) 400,000 11,700 .25
Sealed Air Corp. (USA)/1/ 200,000 11,025 .24
Forsheda AB, Class B (Sweden) /2/ 450,000 10,580 .23
Ashton Mining Ltd. (Australia) 6,100,000 8,203 .18
Carbide/Graphite Group, Inc. (USA)/1/ /2/ 511,800 7,229 .16
CHEMICALS - 2.03%
Kalon Group PLC (United Kingdom) 7,030,000 16,334 .35
Holliday Chemical Holdings PLC (United Kingdom) 4,912,500 14,986 .32
Valspar Corp. (USA) 343,900 13,154 .28
McWhorter, Inc. (USA)/1/ /2/ 706,000 10,855 .24
Airgas, Inc. (USA)/1/ 359,000 9,558 .21
Ferro Corp. (USA) 350,000 8,706 .19
Tessenderlo Chemie SA (Belgium) 19,954 7,259 .16
RPM, Inc. (USA) 330,000 6,559 .14
Armor All Products Corp. (USA) 222,100 3,803 .08
Yip's Hang Cheung (Holdings) Ltd. (Hong Kong) 13,100,000 2,813 .06
MULTI-INDUSTRY - 1.96%
First Pacific Co. Ltd.(Hong Kong) 26,783,048 28,583 .62
Industriforvaltnings AB Kinnevik, Class B (Sweden) 360,000 10,983
Industriforvaltnings AB Kinnevik, Class A 203,440 6,162 .37
D'Ieteren Holdings BV (Belgium) 203,883 16,886 .37
Amalgamated Holdings Ltd. (Australia) 789,320 10,078
Amalgamated Holdings Ltd., 5.00% convertible preferred 265,000 4,004 .30
Corporacion Financiera Alba, SA (Spain) 178,449 9,470 .20
ABOITIZ EQUITY VENTR (Philippines) 25,083,800 4,720 .10
INDUSTRIAL COMPONENTS - 1.96%
Cardo AB (Sweden) 1,114,150 18,722 .41
Kolbenschmidt AG (Germany)/1/ 114,000 16,599 .36
Autoliv AB (American Depositary Receipts)(Sweden)/3/ 203,300 12,390 .27
Lear Seating Corp. (USA)/1/ 352,300 10,349 .22
Bearings, Inc. (USA) 273,300 9,258 .20
Standard Products Co. (USA) 507,600 8,883 .19
Innovative International (Holdings) Ltd. (Hong Kong) 18,156,000 4,873 .11
Federal-Mogul Corp. (USA) 250,000 4,781 .10
Watts Industries, Inc., Class A (USA) 100,000 2,488 .05
Timken Co. (USA) 50,000 2,131 .05
Gold Peak Industries (Holdings) Ltd., warrants, 1,140,000 13 .00
expire 1995 (Hong Kong) /1/
METALS: NONFERROUS - 1.85%
ERAMET (France)/3/ 284,119 21,582 .47
Capral Aluminium Ltd. (formerly Alcan Australia 8,680,000 20,395 .44
Ltd.) (Australia)
QNI Ltd. (Australia) 8,211,900 17,061 .37
Asturiana de Zinc, SA (Spain)/1/ 1,440,000 14,818 .32
Magma Copper Co., convertible preferred, 90,000 6,232
Series E (USA)
Magma Copper Co., convertible preferred, Series D 70,000 4,638 .23
Alumax Inc. (USA)/1/ 25,300 854 .02
ENERGY EQUIPMENT - 1.79%
Camco International, Inc. (USA) 1,011,100 24,772 .54
Landmark Graphics Corp. (USA) /1/ 800,000 22,550 .49
Babcock International Group PLC (United Kingdom) 6,222,285 16,916 .36
Reading & Bates Corp. (USA)/1/ 700,000 8,400 .18
COFLEXIP SA (American Depositary Receipts)(France) 437,800 6,731 .14
Enterra Corp. (USA)/1/ 160,000 3,520 .08
INSURANCE - 1.77%
Fairfax Financial Holdings Ltd. (Canada)/1/ /3/ 272,700 16,462 .36
Transatlantic Holdings, Inc. (USA) 225,000 15,131 .33
Liberty Corp. (USA) 350,000 11,375 .25
Harleysville Group Inc. (USA) 375,000 11,156 .24
Irish Life PLC (Ireland) 2,097,968 7,478 .16
Selective Insurance Group, Inc. (USA) 195,000 7,118 .15
NYMAGIC, Inc. (USA) 254,000 4,318 .09
Nelson Hurst PLC (United Kingdom) 1,435,000 3,697 .08
NAC Re Corp. (USA) 87,200 3,161 .07
ACMAT Corp., Class A (USA)/1/ 150,000 1,800 .04
ELECTRONIC INSTRUMENTS - 1.50%
CIDCO Inc. (USA)/1/ /2/ 913,000 32,183 .70
Plantronics, Inc. (USA)/1/ 350,000 12,731 .28
LoJack Corp. (USA)/1/ 575,000 9,488 .20
Fluke Corp. (USA) 160,000 6,080 .13
C-COR Electronics, Inc. (USA)/1/ 200,000 4,700 .10
Lumonics Inc. (Canada)/1/ 372,000 4,020 .09
TRANSPORTATION: SHIPPING - 1.47%
ICB Shipping AB, Class B (Sweden) 1,150,000 10,782 .23
Bona Shipholding (Norway) 880,200 8,972 .19
Wah Kwong Shipping Holdings Ltd. (Hong Kong) 5,258,500 8,843 .19
Nordstrom & Thulin AB, Class B (Sweden) 3,118,300 8,546 .19
Irish Continental Group PLC (Ireland) 1,025,000 8,277 .18
SMEDVIG AS (American Depositary Receipts)(Norway)/1/ /2/ 463,000 5,556
SMEDVIG AS /1/ 200,000 1,306 .15
IMC Holdings Ltd. (Hong Kong) 8,198,000 5,302 .11
WILLIAMS LINES (Philippines) 14,100,000 4,494 .10
Benor Tankers Ltd. (Norway)/1/ 763,800 4,128 .09
Silja Oy AB, Class A (formerly EffJohn Oy AB) (Finland)/1/ 362,000 1,865 .04
RECREATION & OTHER CONSUMER PRODUCTS - 1.42%
WMS Industries Inc. (USA)/1/ 750,000 15,844 .34
Coleman Co., Inc. (USA)/1/ 304,100 11,404 .25
Scotts Co., Class A (USA)/1/ 500,000 11,062 .24
Fossil, Inc. (USA)/1/ 550,000 7,219 .16
Pacific Concord Holding Ltd., 4.75% convertible $5,000,000 4,069
debentures 1998 (Hong Kong)
Pacific Concord Holding Ltd. 19,862,000 3,057 .15
Bulgari SpA (American Depositary Receipts)(Italy)/1/ /3/ 850,000 6,443 .14
World Houseware (Holdings) Ltd. (Hong Kong) 17,295,809 3,311 .07
Rawlings Sporting Goods Co., Inc. (USA)/1/ 380,000 3,183 .07
BEVERAGES - 1.24%
Taunton Cider PLC (United Kingdom) 5,482,400 19,584 .42
Brau-Union Goss-Reininghaus-Osterreichische Brau AG 271,800 15,234 .33
(Austria)
Osterreichische Brau-Beteiligungs AG (Austria) 176,770 9,098 .20
Canandaigua Wine Co., Inc., Class A (USA)/1/ 141,000 6,856 .15
San Miguel Brewery Hong Kong Ltd. (Hong Kong) 11,200,000 6,701 .14
BUILDING MATERIALS & COMPONENTS - 0.93%
Puerto Rican Cement Co., Inc. (USA) /2/ 371,000 12,846 .28
Tolmex, SA de CV, Class B2 (Mexico) 1,500,000 7,576 .16
Lafarge Corp. (USA) 396,600 7,288 .16
Futuris Corp. Ltd. (Australia) 6,790,200 6,515 .14
Giant Cement Holding, Inc. (USA)/1/ 458,000 5,553 .12
Falcon Building Products, Inc. (USA)/1/ /2/ 390,000 3,413 .07
UTILITIES: ELECTRIC & GAS - 0.81%
Hub Power Co. (Global Depositary Receipts)(Pakistan)/1/ 831,409 14,550 .32
Australian Gas Light Co. (Australia) 3,190,769 11,089 .24
Capex SA, Class A (Global Depositary Receipts) 384,200 5,187 .11
(Argentina)
Espoon Sahko Oy (Finland) 258,000 3,322 .07
South Wales Electricity PLC (United Kingdom) 220,000 3,189 .07
WHOLESALE & INTERNATIONAL TRADE - 0.71%
Finning Ltd. (Canada) 803,500 12,725 .28
Tech Data Corp. (USA)/1/ 900,000 12,713 .27
Kamei Corp. (Japan) 483,000 5,496 .12
Tokyo Sangyo (Japan) 192,500 1,822 .04
METALS: STEEL - 0.70%
Avesta Sheffield AB (Sweden) 1,218,542 13,270 .29
ARBED SA (Luxembourg)/1/ 35,500 4,718
ARBED SA, 2.50% convertible Eurobonds 2003 BFR6,000,000 3,680 .18
Tubos de Acero de Mexico, SA (American Depositary 1,245,000 7,470 .16
Receipts)(Mexico)/1/
Nippon Denro Ispat Ltd., 3.00% convertible $4,700,000 2,949 .07
debentures 2001 (India)
Tung Ho Steel Enterprise Corp. (Global Depositary 5,955 63 .00
Receipts)(Taiwan)/1/
CONSTRUCTION & HOUSING - 0.63%
plettac AG (Germany) 49,332 13,088 .28
Ryland Group, Inc. (USA) 660,000 10,230 .22
Corporacion Geo, SA, Class B (Mexico) /3/ 1,751,568 5,770 .13
ELECTRICAL & ELECTRONICS - 0.53%
Spectra-Physics AB, Class A (Sweden) 425,720 7,461 .16
Steinbrecher Corp., convertible preferred, Series D 910,000 7,280 .16
(USA)/1/ /3/
MagneTek, Inc. (USA)/1/ 400,000 4,950 .11
Johnson Electric Holdings Ltd. (Hong Kong - 2,420,000 4,821 .10
Incorporated in Bermuda)
AEROSPACE & MILITARY TECHNOLOGY - 0.49%
CAE Industries Ltd. (Canada) 1,750,000 12,064 .26
Thiokol Corp. (USA) 300,000 10,725 .23
Food & Household Products - 0.46%
Hazelwood Foods PLC (United Kingdom) 7,500,000 14,462 .31
J.M. Smucker Co., Class B (USA) 300,000 5,625 .12
Nestle (Malaysia) Sdn. Bhd. (Malaysia) 200,000 1,416 .03
TEXTILES & APPAREL - 0.33%
Phillips-Van Heusen Corp. (USA) 450,000 5,175 .11
Marzotto Ord (Italy) 675,000 4,457 .10
Z Groupe Zannier (France) 247,000 2,910 .06
Delta Woodside Industries, Inc. (USA) 350,000 2,669 .06
APPLIANCES & HOUSEHOLD DURABLES - 0.32%
O'Sullivan Industries Holdings, Inc. (USA)/1/ 840,000 6,510 .14
Moulinex SA (France)/1/ 255,000 5,226 .11
SEB SA (France) 25,862 3,152 .07
FOREST PRODUCTS & PAPER - 0.21%
Caraustar Industries, Inc. (USA) 495,000 9,900 .21
TRANSPORTATION: AIRLINES - 0.16%
PR Holdings, Inc., subscription rights (Philippines)/1/ /3/ 1,730,000 7,347 .16
REAL ESTATE - 0.10%
Cadiz Land Co., Inc. (USA)/1/ /2/ 935,000 4,792 .10
MISCELLANEOUS - 4.95%
Other equity-type securities in initial period of 229,032 4.95
acquisition
-------- -----
TOTAL EQUITY -TYPE SECURITIES (cost: $2,981,798,000) 3,685,732 79.68
-------- -----
Principal
Amount
SHORT-TERM SECURITIES (000)
CORPORATE SHORT-TERM NOTES - 16.21%
General Electric Capital Corp. 5.70%-5.71% due 72,300 71,867 1.55
11/2-11/9/95
Halifax Building Society 5.56%-5.70% due 55,400 54,863 1.19
10/25-12/20/95
GLAXO WELLCOME 5.67%-5.70% due 10/17-12/12/95 49,700 49,408 1.07
Bayerische Landesbank Girozentrale 5.67%-5.72% 47,400 47,307 1.02
due 10/5-11/1/95
Chevron Oil Finance Co. 5.69%-5.74% due 10/12-11/7/95 44,900 44,711 .97
Commonwealth Bank of Australia 5.62%-5.65% 45,000 44,705 .97
due 10/11-11/21/95
Ford Credit Europe PLC 5.67%-5.69% due 10/2-10/16/95 41,000 40,946 .88
Ford Motor Credit Co. 5.70%-6.10% due 10/4-10/19/95 35,300 35,241 .76
National Australia Funding (Delaware) Inc. 31,500 31,276 .68
5.66%-5.725% due 10/18-11/29/95
ABN-AMRO North America Finance Inc. 5.63%-5.72% 31,300 31,248 .68
due 10/4-10/11/95
Toyota Motor Credit Corp. 5.67%-5.75% due 30,000 29,919 .65
10/6-11/8/95
PepsiCo, Inc. 5.68%-5.69% due 11/2-11/6/95 28,500 28,347 .61
Canadian Wheat Board 5.69%-5.72% due 10/10-11/2/95 27,000 26,884 .58
Shell Oil Co. 5.72% due 10/12/95 25,000 24,953 .54
Exxon Imperial U.S. Inc. 5.63% due 10/19/95 25,000 24,924 .54
British Gas Capital Inc. 5.68% due 11/20/95 25,000 24,799 .54
Commerzbank U.S. Finance Inc. 5.69% due 10/20/95 22,200 22,130 .48
Daimler-Benz North America Corp. 5.70%-5.73% 19,800 19,742 .43
due 10/13-10/20/95
Sony Capital Corp. 5.70% due 10/6/95 17,900 17,883 .39
Telstra Corp. Ltd. 5.75% due 10/4/95 15,000 14,991 .32
Bank of Montreal 5.71% due 10/16/95 15,000 14,962 .32
BAYER 4 (2) 5.69% due 10/31/95 15,000 14,926 .32
Coca-Cola Co. 5.68% due 10/18/95 14,000 13,960 .30
Panasonic Finance Inc. 5.65% due 10/31/95 10,000 9,951 .21
BNP CANADA 5.73% due 11/17/95 10,000 9,925 .21
CERTIFICATES OF DEPOSIT - 3.09%
Societe Generale 5.71%-5.80% due 10/13-11/21/95 51,000 50,999 1.10
CANADIAN IMPERIAL BANK 5.73%-5.74% due 10/24-11/27/95 42,000 41,998 .91
National Westminster Bank PLC 5.74%-5.76% 25,000 25,000 .54
due 10/2-11/27/95
Abbey National Treasury Services PLC Eurocertificate 15,000 15,000 .32
5.77% due 11/15/95
BANK OF MONTREAL YK CD 5.79% due 11/27/95 10,000 10,000 .22
FEDERAL AGENCY DISCOUNT NOTES - 1.17%
Federal Home Loan Mortgage Corp. 5.62% due 11/10/95 54,200 53,853 1.17
-------- -----
TOTAL SHORT-TERM SECURITIES (cost: $946,765,000) 946,718 20.47
-------- -----
TOTAL INVESTMENT SECURITIES (cost: $3,928,563,000) 4,632,450 100.15
Excess of payables over cash and receivables 7,052 .15
-------- -----
NET ASSETS $4,625,39 100.00%
8
======== =====
</TABLE>
/1/ Non-income-producing securities.
/2/ The fund owns the following percentages (over 5%) of the outstanding
voting securities of the following companies and thus is considered an
affiliate as defined in the Investment Company Act of 1940: Steinbrecher-7.32,
Puerto Rican Cement-6.85, Thomas Group-6.75, Carbide/Graphite Group-6.50, M.S.
Carriers-6.50, CIDCO-6.48, Hologic-6.48, Abacan Resource-6.47, Rio Hotel &
Casino-6.47, Alliance Communications-6.46, Innovus-6.45, McWhorter-6.44,
Anesta-6.40, Brooks Fiber Properties-6.37, Information International-6.23,
Savoy Pictures Entertainment-6.22, TNT Freightways-6.18, SMEDVIG-6.08,
Chrysalis Group-5.99, AAPC-5.90, Flextronics International-5.90, ANTEC-5.86,
Cabre Exploration-5.67, CONVEX Computer-5.66, Cadiz Land-5.33, Radius-5.28,
Ethical Holdings-5.25, Showboat-5.10, Samuel Goldwyn-5.05, and DMX Inc.-5.00.
/3/ Purchased in a private placement transaction; resale to the public may
require registration or may extend only to qualified institutional buyers.
See Notes to Financial Statements
EQUITY-TYPE SECURITIES APPEARING IN THE
PORTFOLIO SINCE MARCH 31, 1995
Abacan Resources
Aboitiz Equity Venture
Alliance Comm
Allied Products
Alumax
AnnTaylor
APCOA Parking
Arbor Drugs
Ashton Mining
Austereo
Aztar
Bally Entertainment
Bell & Howell Holdings
Benson Eyecare
Blue Range Resource
Brooks Fiber Properties
Bulgari
Cadiz Land
CAE Industries
Carbide/Graphite Group
Cardo
CBT Group
C-COR Electronics
CINAR Films
COFLEXIP
Corporacion Geo
Crystal Dynamics
Data Broadcasting
Delta Woodside Industries
Diamond Multimedia Systems
DOVatron International
Espoon Sahko Oy
Falcon Building Products
Filmes Lusomundo
Filofax Group
Flextronics International
Forsheda
Fossil
Genelabs Technologies
Hemasure
Hologic
HOMAC
ICB Shipping
Innovus
InStent
Intertape Polymer Group
Katz Media Group
Kolbenschmidt
London Clubs International
Lumonics
M-Cell
MIDCOM Communications
Multichoice
Neopath
Neurogen
Novus Petroleum
Ranbaxy Laboratories
Raychem
Reading & Bates
San Miguel Brewery
Scotts
Sports Authority
SGL Carbon
Station Casinos
Swift Transportation
Tech Data
Thermedics
Thiokol
Transaction Systems Architects
Transocean Drilling
Trump Hotels & Casino Resorts
UMW Holdings
US Order
United Television
ValueVision International
Ventritex
Vical
VIVUS
Westcott Communications
Western Publishing Group
Williams Lines
Yapi ve Kredi Bankasi
EQUITY-TYPE SECURITIES ELIMINATED FROM
THE PORTFOLIO SINCE MARCH 31, 1995
APV
Australis Media Group
Bay View Capital
BayBanks
BCE Mobile Communications
Bell Cablemedia
Bernard Chaus
Boddington Group
Burgenland Holding
Celsius Industries
Cirrus Logic
COR Therapeutics
Coram Healthcare
Cordiant
Courtaulds Textiles
CRSS
Cypress Semiconductor
Deceuninck Plastics Industries
Del Webb
El Aguila
EnSys Environmental Products
Fila Holding
Fourth Financial
Goody's Family Clothing
Goulds Pumps
H & M Hennes & Mauritz
Harding Associates
Hayes Wheels International
Higashi Nihon House
Hitachi Kiden Kogyo
Ishiguro Homa
Jardine International Motor Holdings
Jostens
KSB
Kwik-Fit Holdings
LCI International
Le Groupe Videotron Ltee
Maanshan Iron & Steel
Matrix Service
Maxtor
McClatchy Newspapers
Microchip Technology
Mississippi Chemical
Moorco International
NGC
Nihon Dempa Kogyo
Nine West Group
Nordictel Holdings
Oil-Dri Corp. of America
OPTi
Orbital Engine
Philippine National Bank
PictureTel
Playboy Enterprises
Pohjola Insurance
PT Indah Kiat Pulp & Paper
Pulitzer Publishing
Raychem
Shaw Brothers
Shaw Communications
ShopKo Stores
Sterling Chemicals
Super Food Services
Svenskt Stal AB
Taisei Fire and Marine Insurance
TJX Companies
Tower Air
TV4
United States Cellular
Vital Forsikring
Worthington Industries
Yorkshire Chemical
SMALLCAP World Fund
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
at September 30, 1995 (dollars in thousands)
- ---------------------------------------- ------------ ------------
<S> <C> <C>
ASSETS:
Investment securities at market
(cost: $3,928,563) $4,632,450
Cash 133
Receivables for -
Sales of investments $42,267
Sales of fund's shares 10,542
Dividends and accrued interest 5,618 58,427
------------ ------------
4,691,010
LIABILITIES:
Payables for -
Purchases of investments 49,549
Repurchases of fund's shares 12,262
Management services 2,637
Accrued expenses 1,164 65,612
------------ ------------
NET ASSETS AT SEPTEMBER 30, 1995 -
Equivalent to $26.11 per share on
177,117,618 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $4,625,398
============
STATEMENT OF OPERATIONS
for the year ended September 30, 1995 (dollars in thousands)
- ---------------------------------------- ------------ ------------
INVESTMENT INCOME:
Income:
Dividends $ 37,814
Interest 42,505 $ 80,319
------------
Expenses:
Management services fee 26,933
Distribution expenses 8,551
Transfer agent fee 4,265
Reports to shareholders 403
Registration statement and
prospectus 525
Postage, stationery and supplies 1,279
Directors' fees 96
Auditing and legal fees 60
Custodian fee 1,018
Taxes other than federal income tax 90
Other expenses 143 43,363
------------ ------------
Net investment income 36,956
------------
REALIZED GAIN AND UNREALIZED
APPRECIATION ON INVESTMENTS:
Net realized gain 429,536
Net increase in unrealized appreciation
on investments:
Beginning of year 465,051
End of Year 703,887
------------
Net unrealized appreciation on investments 238,836
------------
Net realized gain and unrealized appreciation
on investments 668,372
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $705,328
============
STATEMENT OF CHANGES IN NET
ASSETS (dollars in thousands)
- ---------------------------------------- ------------- -------------
Year ended September 30
1995 1994
------------ ------------
OPERATIONS:
Net investment income $36,956 $11,146
Net realized gain on investments 429,536 212,165
Net unrealized appreciation
(depreciation) on investments 238,836 (12,601)
------------ ------------
Net increase in net assets
resulting from operations 705,328 210,710
------------ ------------
DIVIDENDS AND DISTRIBUTIONS PAID
TO SHAREHOLDERS:
Dividends from net
investment income (24,819) (6,434)
Distributions from net realized
gain on investments (204,948) (104,133)
------------ ------------
Total dividends and
distributions (229,767) (110,567)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
43,202,952 and 57,399,291
shares, respectively 1,002,339 1,341,144
Proceeds from shares issued in
reinvestment of net investment
income dividends and
distributions of net realized
gain on investments:
10,403,045 and 4,360,143,
respectively 217,741 99,705
Cost of shares repurchased:
24,592,934 and 12,557,650
shares, respectively (566,957) (290,901)
------------ ------------
Net increase in net assets
resulting from capital share
transactions 653,123 1,149,948
------------ ------------
TOTAL INCREASE IN NET ASSETS 1,128,684 1,250,091
NET ASSETS:
Beginning of period 3,496,714 2,246,623
------------ ------------
End of period (including undistributed
net investment income: $23,552 and
$11,415, respectively) $4,625,398 $3,496,714
============ ============
</TABLE>
See Notes to Financial Statements
SMALLCAP WORLD FUND
NOTES TO FINANCIAL STATEMENTS
1. SMALLCAP World Fund, Inc. (the "fund") is registered under the Investment
Company Act of 1940 as an open-end, diversified management investment company.
The following paragraphs summarize the significant accounting policies
consistently followed by the fund in the preparation of its financial
statements:
Equity-type securities traded on a national securities exchange (or reported
on the NASDAQ national market) and securities traded in the over-the-counter
market are stated at the last reported sales price on the day of valuation;
other securities, and securities for which no sale was reported on that date,
are stated at the last quoted bid price. 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.
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 Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. The fund does not amortize premiums on securities purchased.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities and other assets and liabilities denominated in
non-U.S. currencies are recorded in the financial statements after translation
into U.S. dollars utilizing rates of exchange on the last business day of the
year. Purchases and sales of investment securities, income, and expenses are
calculated using the prevailing exchange rate as accrued. The fund does not
identify the portion of each amount shown in the fund's statement of operations
under the caption "Realized Gain and Unrealized Appreciation on Investments"
that arises from changes in non-U.S. currency exchange rates.
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 $1,018,000 includes $80,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of September 30, 1995, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $703,887,000, of which $940,889,000
related to appreciated securities and $237,002,000 related to depreciated
securities. During the year ended September 30, 1995, the fund realized, on a
tax basis, a net capital gain of $429,739,000 on securities transactions. Net
losses related to non-U.S. currency transactions of $203,000 were treated as an
adjustment to ordinary income for federal income tax purposes. The cost of
portfolio securities for book and federal income tax purposes was
$3,928,563,000 at September 30, 1995.
3. The fee of $26,933,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.80% of the first $1 billion of average net assets; 0.70%
of such assets in excess of $1 billion but not exceeding $2 billion; 0.67% of
such assets in excess of $2 billion but not exceeding $3 billion; 0.65% of such
assets in excess of $3 billion but not exceeding $5 billion; 0.635% of such
assets in excess of $5 billion but not exceeding $8 billion; and 0.625% of such
assets in excess of $8 billion.
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 Directors. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the year ended September 30, 1995,
distribution expenses under the Plan were $8,551,000. As of September 30,
1995, accrued and unpaid distribution expenses were $966,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $4,265,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $3,278,000 (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.
Directors 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 September 30, 1995, aggregate amounts deferred were $32,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors 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 September 30, 1995, accumulated undistributed net realized gain on
investments was $402,430,000 and additional paid-in capital was $3,493,758,000.
The fund reclassified $32,000 from undistributed net investment income to
undistributed net realized gains for the year ended September 30, 1995.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,618,024,000 and $1,420,450,000, respectively,
during the year ended September 30, 1995.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
year ended September 30, 1995, such non-U.S. taxes were $1,832,000. Net
realized currency losses on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $171,000 for the year ended
September 30, 1995.
PER-SHARE DATA AND
RATIOS
<TABLE>
<CAPTION>
Year ended September 30
-------- -------- -------- ------- -------
1995 1994 1993 1992 1991
- ----------------------- --------- --------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Year $23.61 $22.72 $18.01 $17.60 $13.26
--------- --------- --------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .22 .09 .06 .14 .18
Net realized and
unrealized gain
on investments 3.79 1.83 5.56 .38 4.56
--------- --------- --------- ------- -------
Total income from
investment
operations 4.01 1.92 5.62 .52 4.74
--------- --------- --------- ------- -------
LESS DISTRIBUTIONS:
Dividends from
net investment
income (.16) (.06) (.08) (.11) (.40)
Distributions
from net
realized gains (1.35) (.97) (.83) - -
--------- --------- --------- ------- -------
Total distributions (1.51) (1.03) (.91) (.11) (.40)
--------- --------- --------- ------- -------
Net Asset Value, End
of Year $26.11 $23.61 $22.72 $18.01 $17.60
========= ========= ========= ======= =======
Total Return /1/ 18.59% 8.60% 32.46% 2.95% 36.43%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of year (in
millions) $4,625 $3,497 $2,247 $1,255 $798
Ratio of expenses
to average net
assets 1.13% 1.12% 1.15% 1.21% 1.31%
Ratio of net income
to average net
assets .97% .38% .33% .85% 1.11%
Portfolio turnover
rate 45.63% 29.43% 25.00% 23.10% 19.26%
</TABLE>
/1/ This was calculated without decuting a sales charge. The maximum sales
charge is 5.75% of the fund's offering price.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
SMALLCAP World Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
SMALLCAP World Fund, Inc., including the schedule of portfolio investments as
of September 30, 1995, 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 the 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 the
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 September 30, 1995 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 SMALLCAP World Fund, Inc. at September 30, 1995, 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.
DELOITTE & TOUCHE LLP
Los Angeles, California
October 23, 1995
1995 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 received by shareholders
during such fiscal year.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 9% of the dividends
paid by the fund from net investment income represents qualifying dividends.
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 plan retirement trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099 DIV WHICH WILL BE
MAILED IN JANUARY 1996 TO DETERMINE THE CALENDAR YEAR AMOUNTS TO BE INCLUDED ON
THEIR 1995 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS:
Included in Prospectus - Part A
Financial Highlights
Included in Statement of Additional Information
Investment Portfolio
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Per-Share Data and Ratios
Independent Auditors Report
(B) EXHIBITS:
1. On file (see SEC file Nos. 811-5888 and 33-32785).
2. On file (see SEC file Nos. 811-5888 and 33-32785).
3. None.
4. On file (see SEC file Nos. 811-5888 and 33-32785).
5. On file (see SEC file Nos. 811-5888 and 33-32785).
6. On file (see SEC file Nos. 811-5888 and 33-32785).
7. None.
8. On file (see SEC file Nos. 811-5888 and 33-32785).
9. Form of Shareholder Agreement between Registrant and American Funds
Service
Company, as amended January 1, 1995
10. On file (see SEC file Nos. 811-5888 and 33-32785).
11. Consent of independent accountants
12. None.
13. On file (see SEC file Nos. 811-5888 and 33-32785).
14. On file (see SEC file Nos. 811-5888 and 33-32785).
15. On file (see SEC file Nos. 811-5888 and 33-32785).
16. Updates to previously filed schedule for computation of each performance
quotation
provided in the Registration Statement in response to Item 22 (see SEC file
Nos.
811-5888 and 33-32785).
17. Financial data schedule (EDGAR)
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of October 31, 1995
<TABLE>
<CAPTION>
Title of Class Number of
Record-Holders
<S> <C>
Capital Stock 449,518
($0.01 par value)
</TABLE>
ITEM 27. INDEMNIFICATION.
Registrant is a joint-insured under an Investment Advisor/Mutual Fund
Errors and Omissions Policy written by American International Surplus Lines
Insurance Company, Chubb Custom Insurance Company and ICI Mutual Insurance
Company, which insures its officers and Directors against certain liabilities.
However, in no event will Registrant maintain insurance to indemnify any such
person for any act for which Registrant itself is not permitted to indemnify
the individual.
Subsection (b) of Section 2-418 of the General Corporation Law of Maryland
empowers a corporation to indemnify any person who was or is party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against reasonable expenses (including attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually incurred by him in connection
with such action, suit or proceeding unless it is established that: (i) the
act or omission of the person was material to the matters giving rise to the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) the person actually received an improper personal
benefit of money, property or services; or (iii) with respect to any criminal
action or proceeding, the person had reasonable cause to believe his act or
omission was unlawful.
Indemnification under subsection (b) of Section 2-418 may not be made by a
corporation unless authorized for a specific proceeding after a determination
has been made that indemnification is permissible under the circumstances
because the party to be indemnified has met the standard of conduct set forth
in subsection (b). This determination shall be made (i) by the Board of
Directors by a majority vote of a quorum consisting of directors not, at the
time, parties to the proceeding, or, if such quorum cannot be obtained, then by
a majority vote of a committee of the Board consisting solely of two or more
directors not, at the time, parties to such proceeding and who were duly
designated to act in the matter by a majority vote of the full Board in which
the designated directors who are parties may participate; (ii) by special legal
counsel selected by the Board of Directors of a committee of the Board by vote
as set forth in subparagraph (i), or, if the requisite quorum of the full Board
cannot be obtained therefor and the committee cannot be established, by a
majority vote of the full Board in which any director who is a party may
participate; or (iii) by the stockholders (except that shares held by any party
to the specific proceeding may not be voted). A court of appropriate
jurisdiction may also order indemnification if the court determines that a
person seeking indemnification is entitled to reimbursement under subsection
(b).
Section 2-418 further provides that indemnification provided for by Section
2-418 shall not be deemed exclusive of any rights to which the indemnified
party may be entitled; that the scope of indemnification extends to directors,
officers, employees or agents of a constituent corporation absorbed in a
consolidation or merger and persons serving in that capacity at the request of
the constituent corporation for another; and empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against or incurred by
such person in any such capacity or arising out of such person's status as such
whether or not the corporation would have the power to indemnify such person
against such liabilities under Section 2-418.
Article VIII (h) of the Articles of Incorporation of the fund provides that
"The Corporation shall indemnify (1) its directors and officers, whether
serving the Corporation or at its request any other entity, to the full extent
required or permitted by the General Laws of the State of Maryland now or
hereafter in force, including the advance of expenses under the procedures and
to the full extent permitted by law, and (2) its other employees and agents to
such extent as shall be authorized by the Board of Directors or the
Corporation's By-Laws and be permitted by law. The foregoing rights of
indemnification shall not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of Directors may take such
action as is necessary to carry out these indemnification provisions and is
expressly empowered to adopt, approve and amend from time to time such by-laws,
resolutions or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No amendment of this
Charter of the Corporation shall limit or eliminate the right to
indemnification provided hereunder with respect to acts or omissions occurring
prior to such amendment or repeal. Nothing contained herein shall be construed
to authorize the Corporation to indemnify any director or officer of the
Corporation against any liability to the Corporation or to any holders of
securities of the Corporation to which he is subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. Any indemnification by the Corporation
shall be consistent with the requirements of law, including the Investment
Company Act of 1940."
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
None.
ITEM 29. PRINCIPAL UNDERWRITERS.
(A) American Funds Distributors, Inc. is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds
Income Series, The American Funds Tax-Exempt Series I, The American Funds
Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American
High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc.,
Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World
Growth and Income Fund, Inc., The Cash Management Trust of America, EuroPacific
Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The
Income Fund of America, Inc., The Intermediate Bond Fund of America, The
Investment Company of America, Limited Term Tax-Exempt Bond Fund of America,
The New Economy Fund, New Perspective Fund, Inc., The Tax-Exempt Bond Fund of
America, Inc., The Tax-Exempt Money Fund of America, The U.S. Treasury Money
Fund of America and Washington Mutual Investors Fund, Inc.
(B)
<TABLE>
<CAPTION>
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C>
# David L. Abzug Assistant Vice President None
John A. Agar Regional Vice President None
1501 N. University Drive
Little Rock, AR 72207
Robert B. Aprison Regional Vice President None
2983 Brynwood Drive
Madison, WI 53711
& Richard L. Armstrong Assistant Vice President None
* William W. Bagnard Vice President None
Steven L. Barnes Vice President None
8000 Town Line Avenue So.
Suite 204
Minneapolis, MN 55438
Michelle A. Bergeron Regional Vice President None
1190 Rockmart Circle
Kennesaw, GA 30144
Joseph T. Blair Vice President None
27 Drumlin Road
West Simsbury, CT 06092
Ian B. Bodell Vice President None
3100 West End Avenue,
Suite 870
Nashville, TN 37215
Mick L. Brethower Vice President None
108 Hagen Court
Georgetown, TX 78628
C. Alan Brown Regional Vice President None
4619 McPherson Avenue
St. Louis, MO 63108
* Daniel C. Brown Senior Vice President, Director None
@ J. Peter Burns Vice President None
Brian C. Casey Regional Vice President None
9508 Cable Drive
Kensington, MD 20895
Victor C. Cassato Vice President None
999 Green Oaks Drive
Littleton, CO 80121
Christopher J. Cassin Regional Vice President None
231 Burlington
Clarendon Hills, IL 60514
Denise M. Cassin Regional Vice President None
1425 Vallejo, #203
San Francisco, CA 94109
* Larry P. Clemmensen Treasurer, Director None
* Kevin G. Clifford Senior Vice President None
Ruth M. Collier Vice President None
145 W. 67th Street #12K
New York, NY 10023
Thomas E. Cournoyer Vice President None
2333 Granada Blvd.
Coral Gables, FL 33134
Douglas A. Critchell Vice President None
3521 Rittenhouse Street
N.W.
Washington, D.C. 20015
* Carl D. Cutting Vice President None
Michael A. Dilella Vice President None
P.O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President None
3622 East 87th Street
Tulsa, OK 74137
Kirk D. Dodge Vice President None
2617 Salisbury Road
Ann Arbor, MI 48103
Peter J. Doran Senior Vice President None
1205 Franklin Avenue
Garden City, NY 11530
* Michael J. Downer Secretary None
Robert W. Durbin Vice President None
74 Sunny Lane
Tiffin, OH 44883
+ Lloyd G. Edwards Vice President None
@ Richard A. Eychner Vice President None
* Paul H. Fieberg Senior Vice President None
John R. Fodor Regional Vice President None
15 Latisquana Road
Southborough, MA 01772
* Mark P. Freeman, Jr. President, Director None
Clyde E. Gardner Vice President None
Rt. 2, Box 3162
Osage Beach, MO 65065
# Evelyn K. Glassford Vice President None
Jeffrey J. Greiner Regional Vice President None
5898 Heather Glen Court
Dublin, OH 43017
* Paul G. Haaga, Jr. Director None
David E. Harper Vice President None
R.D. 1, Box 210, Rte. 519
Frenchtown, NJ 08825
Ronald R. Hulsey Regional Vice President None
6744 Avalon
Dallas, TX 75214
* Robert L. Johansen Vice President, Controller None
Victor J. Kriss, Jr. Senior Vice President None
P.O. Box 274
Surfside, CA 90743
Arthur J. Levine Vice President None
12558 Highlands Place
Fishers, IN 46038
# Karl A. Lewis Assistant Vice President None
T. Blake Liberty Regional Vice President None
12585-E
East Tennessee Circle
Aurora, CO 80012
Stephen A. Malbasa Regional Vice President None
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President None
5241 S. Race Street
Littleton, CO 80121
* John C. Massar Senior Vice President None
* E. Lee McClennahan Senior Vice President None
Laurie B. McCurdy Regional Vice President None
6008 E. Anderson Drive
Scottsdale, AZ 85255
& John V. McLaughlin Senior Vice President None
Terry W. McNabb Vice President None
2002 Barrett Station Rd.
St. Louis, MO 63131
* R. William Melinat Vice President, Institutional None
Investment Services Division
David R. Murray Regional Vice President None
25701 S.E. 32nd Place
Issaquah, WA 98027
Stephen S. Nelson Vice President None
7215 Trevor Court
Charlotte, NC 28226
* Barbara G. Nicolich Assistant Vice President, None
Institutional Investment
Services
Division
William E. Noe Regional Vice President None
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Regional Vice President None
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Regional Vice President None
62 Park Drive
Glenview, IL 60025
Fredric Phillips Regional Vice President None
32 Ridge Avenue
Newton Centre, MA 02161
# Candance D. Pilgram Assistant Vice President None
Carl S. Platou Regional Vice President None
4021 96th Avenue, SE
Mercer Island, WA 98040
* John O. Post, Jr. Vice President None
Steven J. Reitman Vice President None
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Regional Vice President None
12025 Delmahoy Drive
Charlotte, NC 28277
* George L. Romine, Jr. Vice President, Institutional None
Investment Services Division
George S. Ross Vice President None
55 Madison Avenue
Morristown, NJ 07960
* Julie D. Roth Vice President None
Douglas F. Rowe Regional Vice President None
30309 Oak Tree Drive
Georgetown, TX 78628
Christopher S. Rowey Regional Vice President None
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Vice President None
1080 Bay Pointe Crossing
Alpharetta, GA 30202
Richard R. Samson Vice President None
4604 Glencoe Avenue, #4
Marina del Rey, CA 90292
Joe D. Scarpitti Regional Vice President None
25760 Kensington Drive
Westlake, OH 44145
* R. Michael Shanahan Chairman None
David W. Short Senior Vice President None
1000 RIDC Plaza, Ste. 212
Pittsburgh, PA 15238
* Victor S. Sidhu Vice President, None
Institutional Investment
Services
Division
William P. Simon, Jr. Vice President None
554 Canterbury Lane
Berwyn, PA 19312
* John C. Smith Assistant Vice President, None
Institutional Investment
Services
Division
* Mark S. Smith Senior Vice President, None
Director
* Mary E. Smith Assistant Vice President, None
Institutional Investment
Services
Division
Rodney G. Smith Regional Vice President None
2350 Lakeside Blvd., #850
Richardson, TX 75082
Nicholas D. Spadaccini Regional Vice President None
855 Markley Woods Way
Cincinnati, OH 45230
Daniel S. Spradling Senior Vice President None
4 West 4th Avenue, Suite
406
San Mateo, CA 94402
Craig R. Strauser Regional Vice President None
17040 Summer Place
Lake Oswego, OR 97035
Francis N. Strazzeri Regional Vice President None
31641 Saddletree Drive
Westlake Village, CA 91361
& James P. Toomey Assistant Vice President None
+ Christopher E. Trede Assistant Vice President None
George F. Truesdail Vice President None
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Regional Vice President None
606 Glenwood Avenue
Mill Valley, CA 94941
@ Andrew J. Ward Vice President None
* David M. Ward Assistant Vice President, None
Institutional Investment
Services
Division
Thomas E. Warren Regional Vice President None
4001 Crockers Lake Blvd.,
#1012
Sarasota, FL 34238
# J. Kelly Webb Senior Vice President None
Gregory J. Weimer Regional Vice President None
125 Surrey Drive
Canonsburg, PA 15317
# Timothy W. Weiss Director None
N. Dexter Williams Vice President None
Four Embarcadero Center
San Francisco, CA 94111
Timothy J. Wilson Regional Vice President None
113 Farmview Place
Venetia, PA 15367
* Marshall D. Wingo Senior Vice President None
* Robert L. Winston Senior Vice President, None
Director
William R. Yost Regional Vice President None
9320 Overlook Trail
Eden Prairie, MN 55347
Janet Young Regional Vice President None
1616 Vermont
Houston, TX 77006
</TABLE>
* Business Address, 333 South Hope Street, Los Angeles, CA 90071
# Business Address, 135 South State College Blvd., Brea, CA 92621
& Business Address, 8000 IH-10, Suite 1400, San Antonio, TX 78230
@ Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
+ Business Address, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240
(C) None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under the
Investment Company Act of 1940, are maintained and kept in the offices of the
fund and its investment adviser, Capital Research and Management Company, 333
South Hope Street, Los Angeles, CA 90071. Certain accounting records are
maintained and kept in the offices of the Fund's accounting department, 135
South State College Blvd., Brea, CA 92621.
Records covering shareholder accounts are maintained and kept by the fund's
transfer agent, American Funds Service Company, 135 South State College Blvd.,
Brea, CA 92621, 8000 IH-10, Suite 1400, San Antonio, TX 78230, 8332 Woodfield
Crossing Blvd., Indianapolis, IN 46240 and 5300 Robin Hood Road, Norfolk, VA
23513.
Records covering portfolio transactions are also maintained and kept by the
Custodian, The Chase Manhattan Bank, N.A., One Chase Manhattan Plaza, New York,
New York, 10081.
ITEM 31. MANAGEMENT SERVICES.
None.
ITEM 32. UNDERTAKINGS.
(c) As reflected in the prospectus, the fund undertakes to provide each
person to whom a prospectus is delivered with a copy of the fund's latest
annual report to shareholders, upon request and without charge.
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, and State of California, on the 22nd
day of November, 1995.
SMALLCAP World Fund, Inc.
By: /s/ William R. Grimsley
William R. Grimsley, President and Director
Pursuant to the requirements of the Securities Act of 1933, this amendment to
Registration Statement has been signed below on November 22, 1995, by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE
(1) Principal Executive Officer:
/s/ William R. Grimsley President
William R. Grimsley
(2) Principal Financial Officer and
Principal Accounting Officer:
/s/ Steven N. Kearsley Vice President and Treasurer
Steven N. Kearsley
(3) Directors:
Richard G. Capen, Jr. Director
H. Frederick Christie* Director
Alan W. Clements* Director
Robert B. Egelston* Chairman of the Board
Alan Greenway* Director
William R. Grimsley* President and Director
E. Graham Holloway* Director
Leonade D. Jones Director
William H. Kling* Director
Norman R. Weldon* Director
Patricia K. Woolf* Director
</TABLE>
*By /s/ Vincent P. Corti
Vincent P. Corti
(Attorney-in-Fact)
Counsel reports that the amendment does not contain disclosures that would
make the amendment ineligible for effectiveness under the provisions of rule
485(b).
/s/ Michael J. Downer
Michael J. Downer, Esq.
C-13
SHAREHOLDER SERVICES AGREEMENT
1. The parties to this Agreement, which is effective as of January 1, 1995,
are SMALLCAP World Fund, Inc. (hereinafter called "the Fund") and American
Funds Service Company, a California corporation (hereinafter called "AFS").
AFS is a wholly owned subsidiary of Capital Research and Management Company
(hereinafter called "CRMC"). This Agreement will continue in effect until
amended or terminated in accordance with its terms.
2. The Fund hereby employs AFS, and AFS hereby accepts such employment by the
Fund, as its transfer agent. In such capacity AFS will provide the services of
stock transfer agent, dividend disbursing agent, redemption agent, and such
additional related services as the Fund may from time to time require, all of
which services are sometimes referred to herein as "shareholder services."
3. AFS has entered into substantially identical agreements with other
investment companies for which CRMC serves as investment adviser. (For the
purposes of this Agreement, such investment companies, including the Fund, are
called "participating investment companies.")
4. AFS has entered into an agreement with DST Systems, Inc. (hereinafter
called "DST"), to provide AFS with electronic data processing services
sufficient for the performance of the shareholder services referred to in
paragraph 2.
5. The Fund, together with the other participating companies, will maintain a
Review and Advisory Committee, which Committee will review and may make
recommendations to the boards of the participating investment companies
regarding all fees and charges provided for in this Agreement, as well as
review the level and quality of the shareholder services rendered to the
participating investment companies and their shareholders. Each participating
investment company may select one director or trustee who is not affiliated
with CRMC, or any of its affiliated companies, or with Washington Management
Corporation or any of its affiliated companies, to serve on the Review and
Advisory Committee.
6. AFS will provide to the participating investment companies the shareholder
services referred to herein in return for the following fees:
ANNUAL ACCOUNT MAINTENANCE FEE (PAID MONTHLY):
$.67 per month for each open account on AFS books or in Level 2 or 4
Networking ($8.04 per year)
$.09 per month for each open account maintained in Street Name or Level 1 or
3 Networking ($1.08 per year)
No annual fee will be charged for a participant account underlying a 401(k)
or other defined contribution plan where the plan maintains a single account
on AFS books and responds to all participant inquiries
TRANSACTION FEES:
$2.00 per non-automated transaction
$0.50 per automated transaction
For this purpose, "transactions" shall include all types of transactions
included in an "activity index" as reported to the Review and Advisory
Committee at least annually. AFS will bill the Fund monthly, on or shortly
after the first of each calendar month, and the Fund will pay to AFS within
five business days of such billing.
Any revision of the schedule of charges set forth herein shall require the
affirmative vote of a majority of the members of the board of
directors/trustees of the Fund.
7. All fund-specific charges from third parties -- including DST charges,
payments described in the next sentence, postage, NSCC transaction charges and
similar out-of-pocket expenses -- will be passed through directly to the Fund
or other participating investment companies, as applicable. AFS, subject to
approval of its board of directors, is authorized in its discretion to
negotiate payments to third parties for account maintenance and/or transaction
processing services provided such payments do not exceed the anticipated
savings to the Fund, either in fees payable to AFS hereunder or in other direct
Fund expenses, that AFS reasonably anticipates would be realized by the Fund
from using the services of such third party rather than maintaining the
accounts directly on AFS' books and/or processing non-automated transactions.
8. It is understood that AFS may have income in excess of its expenses and may
accumulate capital and surplus. AFS is not, however, permitted to distribute
any net income or accumulated surplus to its parent, CRMC, in the form of a
dividend without the affirmative vote of a majority of the members of the
boards of directors/trustees of the Fund and all participating investment
companies.
9. This Agreement may be amended at any time by mutual agreement of the
parties, with agreement of the Fund to be evidenced by affirmative vote of a
majority of the members of the board of directors/trustees of the Fund.
10. This Agreement may be terminated on 180 days' written notice by either
party. In the event of a termination of this Agreement, AFS and the Fund will
each extend full cooperation in effecting a conversion to whatever successor
shareholder service provider(s) the Fund may select, it being understood that
all records relating to the Fund and its shareholders are property of the Fund.
11. In the event of a termination of this Agreement by the Fund, the Fund will
pay to AFS as a termination fee the Fund's proportionate share of any costs of
conversion of the Fund's shareholder service from AFS to a successor. In the
event of termination of this Agreement and all corresponding agreements with
all the participating investment companies, all assets of AFS will be sold or
otherwise converted to cash, with a view to the liquidation of AFS when it
ceases to provide shareholder services for the participating investment
companies. To the extent any such assets are sold by AFS to CRMC and/or any of
its affiliates, such sales shall be at fair market value at the time of sale as
agreed upon by AFS, the purchasing company or companies, and the Review and
Advisory Committee. After all assets of AFS have been converted to cash and
all liabilities of AFS have been paid or discharged, an amount equal to any
capital or paid-in surplus of AFS that shall have been contributed by CRMC or
its affiliates shall be set aside in cash for distribution to CRMC upon
liquidation of AFS. Any other capital or surplus and any assets of AFS
remaining after the foregoing provisions for liabilities and return of capital
or paid-in surplus to CRMC shall be distributed to the participating investment
companies in such proportions as may be determined by the Review and Advisory
Committee.
12. In the event of disagreement between the Fund and AFS, or between the Fund
and other participating investment companies as to any matter arising under
this Agreement, which the parties to the disagreement are unable to resolve,
the question shall be referred to the Review and Advisory Committee for
resolution. If the Review and Advisory Committee is unable to resolve the
question to the satisfaction of both parties, either party may elect to submit
the question to arbitration; one arbitrator to be named by each party to the
disagreement and a third arbitrator to be selected by the two arbitrators named
by the original parties. The decision of a majority of the arbitrators shall
be final and binding on all parties to the arbitration. The expenses of such
arbitration shall be paid by the party electing to submit the question to
arbitration.
13. The obligations of the Fund under this Agreement are not binding upon any
of the directors, trustees, officers, employees, agents or shareholders of the
Fund individually, but bind only the Fund itself. AFS agrees to look solely to
the assets of the Fund for the satisfaction of any liability of the Fund in
respect to this Agreement and will not seek recourse against such directors,
trustees, officers, employees, agents or shareholders, or any of them or their
personal assets for such satisfaction.
AMERICAN FUNDS SERVICE COMPANY SMALLCAP WORLD FUND, INC.
By /s/ Don R. Conlan By /s/ Robert B. Egelston
Don R. Conlan, Chairman Robert B. Egelston, Chairman
By /s/ Kenneth R. Gorvetzian By /s/ Chad L. Norton
Kenneth R. Gorvetzian, Secretary Chad L. Norton, Secretary
CONSENT OF INDEPENDENT AUDITORS
SMALLCAP World Fund, Inc.:
We consent to (a) the use in this Post-Effective Amendment No. 11 to
Registration Statement
No. 33-32785 on Form N-1A of our report dated October 23, 1995 appearing in the
Financial Statements, which are included in Part B, the Statement of Additional
Information of such Registration Statement, (b) the reference to us under the
heading "General Information" in such Statement of Additional Information, and
(c) the reference to us under the heading "Financial Highlights" in the
Prospectus, which is part of such Registration Statement.
DELOITTE & TOUCHE llp
November 27, 1995
SCHEDULE FOR COMPUTATION OF EACH PERFORMANCE QUOTATION
PROVIDED IN THE REGISTRATION STATEMENT
(1) ENDING REDEMPTION VALUE AND TOTAL RETURN
Value of an initial investment at the end of a period and total return for the
period are computed as set forth below.
(A) INITIAL INVESTMENT DIVIDED BY
PUBLIC OFFERING PRICE FOR ONE SHARE AT BEGINNING
OF PERIOD EQUALS
NUMBER OF SHARES INITIALLY PURCHASED
(B) NUMBER OF SHARES INITIALLY PURCHASED PLUS
NUMBER OF SHARES ACQUIRED AT NET ASSET VALUE
THROUGH REINVESTMENT OF DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS DURING PERIOD EQUALS
NUMBER OF SHARES PURCHASED DURING PERIOD
(C) NUMBER OF SHARES PURCHASED DURING PERIOD MULTIPLIED BY
NET ASSET VALUE OF ONE SHARE AS OF THE LAST DAY
OF THE PERIOD EQUALS
VALUE OF INVESTMENT AT END OF PERIOD
(D) VALUE OF INVESTMENT AT END OF PERIOD DIVIDED BY
INITIAL INVESTMENT
MINUS ONE AND THEN MULTIPLIED BY 100 EQUALS
TOTAL RETURN FOR THE PERIOD EXPRESSED AS A
PERCENTAGE
Exhibit 16
(2) AVERAGE ANNUAL TOTAL RETURN
Average annual total return quotations for the one-year, five-year and lifetime
periods ended on the date of the most recent balance sheet are computed
according to the formula set forth below.
P(1+T)/n/ = ERV
WHERE: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 investment as of
the end of one-year, five-year and lifetime periods (computed in accordance
with the formula shown in (1), above)
THUS:
AVG. ANNUAL TOTAL RETURN AT PUBLIC OFFERING PRICE:
1 Year Total Return 1,000(1+T)/1/ = $1,117.66
T = +11.77%
5 Year Total Return 1,000(1+T)/5/ = $2,257.94
T = +17.69%
Lifetime Avg. Annual Total Return 1,000(1+T)/5.42/ = $1,985.56
T = +13.49%
Hypothetical illustrations based on $1,000 and $10,000 initial investments used
to obtain ending values over various time periods are attached. Illustrations
of $2,000 per year investments in an Individual Retirement Account are also
included.
(3) YIELD
Yield is computed as set forth below.
(A) Dividends and interest earned during the period MINUS
Expenses accrued for the period EQUALS
Net investment income
(B) Net income investment DIVIDED BY
Average daily number of shares
outstanding during the period that
were entitled to receive dividends EQUALS
Net investment income per share earned
during the period
(C) Net investment income per share earned
during the period DIVIDED BY
Maximum offering price per share on
last day of the period EQUALS
Current month's yield
(D) Current months yield PLUS ONE RAISED
TO THE SIXTH POWER EQUALS
Semiannual compounded yield
(E) Semiannual compounded yield MINUS ONE
MULTIPLIED BY TWO
EQUALS
Annualized rate
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/94 1000.00 25.05 5.75 % 39.920 23.610 943
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95 1000 6 6 1006 54 1042 67 1109 8 1117.66 42.806
TOTAL $ 54
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/90 1000.00 14.07 5.75 % 71.073 13.260 942
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/91 1000 29 29 1029 0 1251 0 1251 34 1285.75 73.054
9/30/92 1000 8 37 1037 0 1280 0 1280 43 1323.64 73.495
9/30/93 1000 6 43 1043 61 1615 76 1691 62 1753.33 77.171
9/30/94 1000 5 48 1048 75 1678 156 1834 70 1904.05 80.646
9/30/95 1000 13 61 1061 109 1856 309 2165 92 2257.94 86.478
TOTAL $ 245
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
4/30/90 1000.00 16.00 5.75 % 62.500 15.080 943
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/90 1000 0 0 1000 0 829 0 829 0 828.75 62.500
9/30/91 1000 25 25 1025 0 1100 0 1100 30 1130.66 64.242
9/30/92 1000 7 32 1032 0 1126 0 1126 37 1163.97 64.629
9/30/93 1000 5 37 1037 54 1420 67 1487 54 1541.82 67.862
9/30/94 1000 4 41 1041 66 1476 138 1614 60 1674.37 70.918
9/30/95 1000 12 53 1053 96 1632 272 1904 81 1985.56 76.046
TOTAL $ 216
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/94 1000.00 23.61 0.00 % 42.355 23.610 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95 1000 7 7 1007 57 1106 72 1178 7 1185.86 45.418
TOTAL $ 57
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/90 1000.00 13.26 0.00 % 75.415 13.260 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/91 1000 30 30 1030 0 1327 0 1327 37 1364.30 77.517
9/30/92 1000 9 39 1039 0 1358 0 1358 46 1404.49 77.984
9/30/93 1000 6 45 1045 65 1713 81 1794 66 1860.45 81.886
9/30/94 1000 5 50 1050 79 1781 166 1947 73 2020.40 85.574
9/30/95 1000 14 64 1064 116 1969 328 2297 98 2395.91 91.762
TOTAL $ 260
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
4/30/90 1000.00 15.08 0.00 % 66.313 15.080 1000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/90 1000 0 0 1000 0 879 0 879 0 879.31 66.313
9/30/91 1000 26 26 1026 0 1167 0 1167 32 1199.63 68.161
9/30/92 1000 7 33 1033 0 1194 0 1194 40 1234.96 68.571
9/30/93 1000 5 38 1038 57 1507 71 1578 57 1635.89 72.002
9/30/94 1000 4 42 1042 70 1566 146 1712 64 1776.53 75.245
9/30/95 1000 12 54 1054 102 1731 289 2020 86 2106.71 80.686
TOTAL $ 229
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
4/30/90 10000.00 16.00 5.75 % 625.000 15.080 9425
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/90 10000 0 0 10000 0 8288 0 8288 0 8287.50 625.000
9/30/91 10000 251 251 10251 0 11000 0 11000 306 11306.56 642.418
9/30/92 10000 71 322 10322 0 11256 0 11256 383 11639.68 646.290
9/30/93 10000 52 374 10374 536 14200 670 14870 548 15418.29 678.622
9/30/94 10000 41 415 10415 658 14756 1376 16132 611 16743.86 709.185
9/30/95 10000 116 531 10531 957 16319 2719 19038 817 19855.82 760.468
TOTAL $ 2151
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STANDARD & POOR'S 500 COMPOSITE INDEX
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
4/30/90 10000.00 330.80 0.00 % 30.230 330.800 10000
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/90 10000 189 189 10189 0 9252 0 9252 169 9421.14 30.783
9/30/91 10000 383 572 10572 0 11725 0 11725 619 12344.42 31.827
9/30/92 10000 399 971 10971 0 12630 0 12630 1080 13710.11 32.815
9/30/93 10000 414 1385 11385 0 13873 0 13873 1612 15485.67 33.743
9/30/94 10000 441 1826 11826 0 13987 0 13987 2063 16050.72 34.690
9/30/95 10000 477 2303 12303 0 17667 0 17667 3154 20821.36 35.628
TOTAL $ 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
4/30/90 10000.00 16.00 5.75 % 625.000 15.080 9425
DIVIDENDS TAKEN IN CASH -- CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/90 10000 0 0 10000 0 8288 0 8288 0 8287.50 625.000
9/30/91 10000 250 250 10000 0 11000 0 11000 0 11000.00 625.000
9/30/92 10000 69 319 10000 0 11256 0 11256 0 11256.25 625.000
9/30/93 10000 50 369 10000 519 14200 647 14847 0 14847.93 653.518
9/30/94 10000 39 408 10000 634 14756 1327 16083 0 16083.98 681.236
9/30/95 10000 111 519 10000 920 16319 2618 18937 0 18937.66 725.303
TOTAL $ 2073
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/94 2000.00 25.05 5.75 % 79.840 23.610 1885
ANNUAL INVESTMENTS OF $ 2000.00 -- SAME DAY AS INITIAL INVESTMENT
DIVIDENDS AND CAPITAL GAINS REINVESTED
RIGHT OF ACCUMULATION DISCOUNT REFLECTED WHERE APPLICABLE IN THIS ILLUSTRATION
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95 2000 13 13 2013 108 2085 135 2220 15 2235.36 85.613
TOTAL $ 108
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/92 2000.00 19.11 5.75 % 104.657 18.010 1885
ANNUAL INVESTMENTS OF $ 2000.00 -- SAME DAY AS INITIAL INVESTMENT
DIVIDENDS AND CAPITAL GAINS REINVESTED
RIGHT OF ACCUMULATION DISCOUNT REFLECTED WHERE APPLICABLE IN THIS ILLUSTRATION
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/93 2000 8 8 2008 87 2378 109 2487 9 2496.77 109.893
9/30/94 4000 12 20 4020 187 4429 306 4735 23 4758.15 201.531
9/30/95 6000 46 66 6066 380 6983 813 7796 81 7877.86 301.718
TOTAL $ 654
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
4/30/90 2000.00 16.00 5.75 % 125.000 15.080 1885
ANNUAL INVESTMENTS OF $ 2000.00 -- SAME DAY AS INITIAL INVESTMENT
DIVIDENDS AND CAPITAL GAINS REINVESTED
RIGHT OF ACCUMULATION DISCOUNT REFLECTED WHERE APPLICABLE IN THIS ILLUSTRATION
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/90 2000 0 0 2000 0 1658 0 1658 0 1657.50 125.000
9/30/91 4000 56 56 4056 0 4188 0 4188 66 4254.68 241.743
9/30/92 6000 32 88 6088 0 6091 0 6091 99 6190.31 343.715
9/30/93 8000 28 116 8116 285 9883 356 10239 160 10399.28 457.715
9/30/94 10000 27 143 10143 444 12225 829 13054 194 13248.63 561.145
9/30/95 12000 96 239 12239 758 15714 1864 17578 331 17909.97 685.943
TOTAL $ 1487
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/90 10000.00 14.07 5.75 % 710.732 13.260 9424
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/91 10000 285 285 10285 0 12509 0 12509 348 12857.50 730.540
9/30/92 10000 81 366 10366 0 12800 0 12800 436 13236.31 734.942
9/30/93 10000 59 425 10425 610 16148 762 16910 623 17533.25 771.710
9/30/94 10000 46 471 10471 749 16780 1565 18345 695 19040.64 806.465
9/30/95 10000 132 603 10603 1089 18557 3092 21649 930 22579.48 864.783
TOTAL $ 2448
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/91 10000.00 18.67 5.75 % 535.619 17.600 9427
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/92 10000 59 59 10059 0 9646 0 9646 58 9704.63 538.847
9/30/93 10000 43 102 10102 447 12169 559 12728 127 12855.07 565.804
9/30/94 10000 34 136 10136 549 12646 1147 13793 167 13960.26 591.286
9/30/95 10000 97 233 10233 798 13985 2267 16252 302 16554.86 634.043
TOTAL $ 1794
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/92 10000.00 19.11 5.75 % 523.286 18.010 9424
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/93 10000 42 42 10042 434 11889 542 12431 52 12483.82 549.464
9/30/94 10000 33 75 10075 533 12355 1114 13469 88 13557.12 574.211
9/30/95 10000 94 169 10169 775 13663 2202 15865 211 16076.79 615.733
TOTAL $ 1742
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/93 10000.00 24.11 5.75 % 414.766 22.720 9423
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/94 10000 25 25 10025 402 9793 415 10208 25 10233.66 433.446
9/30/95 10000 71 96 10096 585 10830 1191 12021 114 12135.67 464.790
TOTAL $ 987
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/94 10000.00 25.05 5.75 % 399.202 23.610 9425
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95 10000 65 65 10065 539 10423 674 11097 79 11176.91 428.070
TOTAL $ 539
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SMALLCAP WORLD FUND, INC.
SALES NET ASSET INITIAL
INITIAL OFFERING CHARGE SHARES VALUE NET ASSET
DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE
10/01/95 10000.00 27.70 5.75 % 361.011 26.110 9426
DIVIDENDS AND CAPITAL GAINS REINVESTED
============COST OF SHARES============= ================VALUE OF SHARES=====================
CURRENT CUM. TOTAL CURRENT FROM FROM
CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES
DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/30/95 10000 0 0 10000 0 9426 0 9426 0 9426.00 361.011
TOTAL $ 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-1-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 3,928,563
<INVESTMENTS-AT-VALUE> 4,632,450
<RECEIVABLES> 58,427
<ASSETS-OTHER> 133
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,691,010
<PAYABLE-FOR-SECURITIES> 49,549
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,063
<TOTAL-LIABILITIES> 65,612
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,493,758
<SHARES-COMMON-STOCK> 177,117,618
<SHARES-COMMON-PRIOR> 148,104,555
<ACCUMULATED-NII-CURRENT> 23,552
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 402,430
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 703,887
<NET-ASSETS> 4,625,398
<DIVIDEND-INCOME> 37,814
<INTEREST-INCOME> 42,505
<OTHER-INCOME> 0
<EXPENSES-NET> 43,363
<NET-INVESTMENT-INCOME> 36,956
<REALIZED-GAINS-CURRENT> 429,536
<APPREC-INCREASE-CURRENT> 238,836
<NET-CHANGE-FROM-OPS> 705,328
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 24,819
<DISTRIBUTIONS-OF-GAINS> 204,948
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 43,202,952
<NUMBER-OF-SHARES-REDEEMED> 24,592,934
<SHARES-REINVESTED> 10,403,045
<NET-CHANGE-IN-ASSETS> 1,128,684
<ACCUMULATED-NII-PRIOR> 11,447
<ACCUMULATED-GAINS-PRIOR> 117,809
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 26,933
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 43,363
<AVERAGE-NET-ASSETS> 3,829,721
<PER-SHARE-NAV-BEGIN> 23.61
<PER-SHARE-NII> .22
<PER-SHARE-GAIN-APPREC> 3.79
<PER-SHARE-DIVIDEND> .16
<PER-SHARE-DISTRIBUTIONS> 1.35
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.11
<EXPENSE-RATIO> .011
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
