SEC. File Nos. 33-54444
811-7338
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
Registration Statement Under the Securities Act of 1933 [X]
Post-Effective Amendment No. 6
and
Registration Statement Under The Investment Company Act of 1940 [X]
Amendment No. 8
CAPITAL WORLD GROWTH AND INCOME 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
VINCENT P. CORTI
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 LLP
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 January xx, 1997 the Registrant filed its 24f-2 notice for fiscal 1996.
Approximate date of proposed public offering:
It is proposed that this filing become effective on February 1, 1997, pursuant
to paragraph (a) of rule 485.
CAPITAL WORLD GROWTH AND INCOME FUND, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM NUMBER OF PART "A" OF FORM N-1A CAPTIONS IN PROSPECTUS (PART "A")
<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 Policies and Risks; Securities and Investment
Techniques; Multiple Portfolio Counselor System; Fund Organization
and Management
5. Management of the Fund Fund Organization and Management; Securities and Investment Techniques;
Multiple Portfolio Counselor System
6. Capital Stock and Other Securities Investment Policies and Risks; Securities and Investment Techniques;
Fund Organization and Management; Dividends, Distributions and Taxes
7. Purchase of Securities Being Offered Purchasing Shares; Fund Organization and Management
8. Redemption or Repurchase Selling Shares
9. Legal Proceedings N/A
</TABLE>
<TABLE>
<CAPTION>
ITEM NUMBER OF PART "B" OF FORM N-1A CAPTIONS IN STATEMENT OF ADDITIONAL
INFORMATION (PART "B")
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Fund Organization and Management (Part "A")
13. Investment Objectives and Policies Description of Certain Securities and Investment Techniques;
Investment Restrictions
14. Management of the Registrant Fund Directors and Officers; Management
15. Control Persons and Principal Holder of Fund Directors and Officers
Securities
16. Investment Advisory and Other Services Management
17. Brokerage Allocation and Other Practices Execution of Portfolio Transactions
18. Capital Stock and Other Securities Part "A"
19. Purchase, Redemption and Pricing of Purchase of Shares; Redeeming Shares; Shareholder
Securities Being Offered Account Services and Privileges; Redemption of Shares
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>
<PAGE>
[LOGO OF THE AMERICAN FUNDS GROUP(R)]
- --------------------------------------------------------------------------------
Capital World Growth and Income Fund(R)
Prospectus
FEBRUARY 1, 1997
<PAGE>
CAPITAL WORLD GROWTH AND INCOME FUND
333 South Hope Street
Los Angeles, CA 90071
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TABLE OF CONTENTS
Expenses 3
Financial Highlights 4
Investment Policies and Risks 5
Securities and Investment Techniques 5
Multiple Portfolio Counselor System 8
Investment Results 9
Dividends, Distributions and Taxes 10
Fund Organization and Management 11
Shareholder Services 14
- --------------------------------------------------------------------------------
The fund's investment objective is to seek long-term capital growth while
providing current income. The fund invests, on a global basis, in a diversified
portfolio of common stocks and other equity-type securities, bonds, and money
market instruments that are denominated in U.S. dollars or other currencies.
This prospectus presents information you should know before investing in the
fund. You should keep it on file for future reference.
YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS IS GREATER
IF YOU INVEST FOR A SHORTER PERIOD OF TIME. YOUR INVESTMENT IN THE FUND IS NOT
A DEPOSIT OR OBLIGATION OF, OR INSURED OR GUARANTEED BY, ANY ENTITY OR PERSON
INCLUDING THE U.S. GOVERNMENT AND THE FEDERAL DEPOSIT INSURANCE CORPORATION.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
33-010-0297
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
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EXPENSES
The effect of the expenses described below is reflected in the fund's share
price or return.
You may pay certain shareholder transaction expenses when you buy or sell
shares of the fund. Fund operating expenses are paid out of the fund's earned
income.
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge on purchases
(as a percentage of offering price) 5.75%
................................................................................
SALES CHARGES ARE REDUCED OR ELIMINATED FOR LARGER PURCHASES. There is 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 made within 12 months following purchases without a sales charge.
FUND OPERATING EXPENSES
(as a percentage of average net assets for the fiscal year ended November 30,
1996)
- --------------------------------------------------------------------------------
Management fees 0.45%
12b-1 expenses 0.22%/1/
Other expenses 0.18%
Total fund operating expenses 0.85%
/1/ 12b-1 expenses may not exceed 0.30% of the fund's average net assets
annually. 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, Inc.
EXAMPLES
Assuming a hypothetical annual return of 5% and shareholder transaction and
operating expenses as described above, for every $1,000 you invested, you would
pay the following total expenses over the following periods:
- --------------------------------------------------------------------------------
One year $ 66
Three years $ 83
Five years $102
Ten years $156
THESE EXAMPLES ARE NOT MEANT TO REPRESENT YOUR ACTUAL INVESTMENT RESULTS OR
EXPENSES, WHICH MAY VARY. YOUR EXPENSES WILL BE LESS IF YOU QUALIFY TO PURCHASE
SHARES AT A REDUCED OR NO SALES CHARGE.
3
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
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FINANCIAL HIGHLIGHTS
The following information has been audited by Price Waterhouse llp, independent
accountants. This table should be read together with the financial statements
which are included in the statement of additional information and annual
report.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30
-------------------------------------
1996 1995 1994 1993/1/
- ------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $20.22 $17.81 $17.00 $15.08
- ------------------------------------------------------------
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income .70 .61 .52 .29
Net realized and
unrealized gain
on investments 3.91 2.72 .75 1.86
Total income
from investment
operations 4.61 3.33 1.27 2.15
- ------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from
net investment
income (.72)/2/ (.63) (.46) (.23)
Distributions from
net realized gains (.34) (.29) -- --
Total distributions (1.06) (.92) (.46) (.23)
Net asset value,
end of period $23.77 $20.22 $17.81 $17.00
- ------------------------------------------------------------
Total return/3/ 23.67% 19.41% 7.51% 14.39%/4/
- ------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (in millions) $5,139 $3,611 $2,784 $ 1,521
Ratio of expenses to
average net assets .85% .88% .87% .62%/4/
Ratio of net income
to average net assets 3.28% 3.24% 3.11% 2.01%/4/
Average
commissions paid/5/ .25c 1.94c 1.24c 1.31c
Portfolio turnover
rate 30.18% 25.50% 18.66% 2.71%/4/
- ------------------------------------------------------------
</TABLE>
/1/ The period ended November 30, 1993 represents the initial period of
operations which began March 26, 1993.
/2/ Includes 1.5 cents realized non-U.S. currency gains treated as ordinary
income for federal income tax purposes.
/3/ Calculated without deducting a sales change. The maximum sales charge is
5.75% of the fund's offering price.
/4/ Based on operations for the period shown and, accordingly, not
representative of a full year's operations.
/5/ Brokerage commissions paid on portfolio transactions increase the cost of
securities purchased or reduce the proceeds of securities sold and are not
reflected in the fund's statement of operations. Shares traded on a
principal basis (without commissions) are excluded. Generally, non-U.S.
commissions are lower than U.S. commissions when expressed as cents per
share but higher when expressed as a percentage of transactions because of
the lower per-share prices of many non-U.S. securities.
4
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
INVESTMENT POLICIES AND RISKS
The fund has the investment objective of seeking long-term capital growth while
providing current income. The fund invests, on a global basis, in a diversified
portfolio that can include common stocks and other equity-type securities (such
as convertible bonds), bonds (and other fixed-income securities), and money
market instruments that are denominated in U.S. dollars or other currencies.
The fund's investment adviser, Capital Research and Management Company,
determines the relative mix of equity-type securities, fixed-income securities
and money market instruments for the fund's portfolio as well as the countries
and currencies in which the fund invests. It will do so based on its view of
long-term economic and market trends, taking the relative risks and
opportunities into account. Capital Research and Management Company does not
intend to make frequent shifts among equity-type securities, fixed-income
securities and money market instruments. Under normal market conditions,
Capital Research and Management Company expects that the fund will invest
principally in equity-type securities and that no more than 40% of its assets
will be invested in securities or issuers domiciled in any one country. While
the fund, under normal conditions, will invest principally in equity
securities, the fund also expects to invest in fixed-income securities
(generally rated in the top three quality categories by Standard & Poor's
Corporation or Moody's Investors Services, Inc. or determined to be of
equivalent quality by Capital Research and Management Company) on a regular
basis in pursuit of its investment objective. In addition, the fund may also
hold cash or cash equivalents. For temporary defensive purposes the fund may
invest substantially in fixed-income securities and/or money market instruments
of issuers based around the world. MORE INFORMATION ON THE FUND'S INVESTMENT
POLICIES IS CONTAINED IN ITS STATEMENT OF ADDITIONAL INFORMATION.
The fund's fundamental investment restrictions (described in the statement of
additional information) and objective may not be changed without shareholder
approval. All other investment practices may be changed by the fund's 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.
- --------------------------------------------------------------------------------
SECURITIES AND INVESTMENT TECHNIQUES
EQUITY SECURITIES
Equity securities represent an ownership position in a company. These
securities may include common stocks and securities with equity conversion or
purchase
5
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
rights. The prices of equity securities fluctuate based on changes in the
financial condition of their issuers and on market and economic conditions. The
fund's results will be related to the overall market for these securities.
DEBT SECURITIES
Bonds and other debt securities are used by issuers to borrow money. Issuers
pay investors interest and generally must repay the amount borrowed at
maturity. Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. The prices of
debt securities fluctuate depending on such factors as interest rates, credit
quality and maturity. In general their prices decline when interest rates rise
and vice versa.
The fund may invest up to 10% of its total assets in debt securities rated Baa
or BBB or below by Moody's Investors Service, Inc. or Standard & Poor's
Corporation or in unrated securities that are determined to be of equivalent
quality by Capital Research and Management Company; however, the fund does not
currently intend to invest more than 5% of its net assets in bonds rated Ba and
BB or below or in unrated securities that are determined to be of equivalent
quality. These securities are commonly known as "high-yield, high-risk" or
"junk" bonds. The market prices of these securities may fluctuate more than
higher quality securities and may decline significantly in periods of general
economic difficulty.
Capital Research and Management Company attempts to reduce the risks described
above through diversification of the portfolio and by credit analysis of each
issuer as well as by monitoring broad economic trends and corporate and
legislative developments.
While the fund may purchase debt obligations of corporations and financial
institutions domiciled around the world, it currently anticipates that most of
its intermediate- or long-term investments outside the U.S. principally will be
in governmental or quasi-governmental issues.
INVESTING IN VARIOUS COUNTRIES
The fund has the ability to invest outside the U.S. Investing outside the U.S.
involves special risks, particularly in certain developing countries, caused
by, among other things, fluctuating currency values; different accounting,
auditing, and financial reporting regulations and practices in some countries;
changing local and regional economic, political and social conditions; greater
market volatility; differing securities 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
6
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
and Management Company, investing outside the U.S. also can reduce certain
portfolio risks due to greater diversification opportunities.
The fund does not intend to emphasize any particular country or region in
making its investments. Under normal market conditions, the fund will invest in
securities of issuers determined by Capital Research and Management Company to
be domiciled in at least three countries, with no more than 40% of its assets
invested in issuers domiciled in any one country. (In determining the domicile
of an issuer, Capital Research and Management Company takes into account such
factors as where the company is legally organized, or maintains principal
corporate offices, or conducts its principal operations.) For temporary
defensive purposes, the fund may invest principally or entirely in securities
that are denominated in U.S. dollars or whose issuers are domiciled in the
United States. Securities denominated in U.S. dollars include American
Depositary Receipts and European Depositary Receipts. Generally ADRs, in
registered form, are dollar denominated securities designed for use in the U.S.
securities markets, which represent and may be converted into the underlying
foreign security. EDRs, in bearer form, are designed for use in the European
securities markets.
Additional costs could be incurred in connection with the fund's investment
activities outside the U.S. Brokerage commissions may be 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.
CURRENCY TRANSACTIONS
The fund can purchase and sell currencies to facilitate securities transactions
and enter into forward currency contracts to hedge against changes in currency
exchange rates. While entering into forward currency transactions could
minimize the risk of loss due to a decline in the value of the hedged currency,
it could also limit any potential gain which might result from an increase in
the value of the currency. The fund will not generally attempt to protect
against all potential changes in exchange rates.
7
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
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MULTIPLE PORTFOLIO COUNSELOR SYSTEM
The basic investment philosophy of Capital Research and Management Company is
to seek fundamental values at reasonable prices, 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. Counselors decide how their respective segments will be invested
(within the limits provided by the fund's objective and policies and by Capital
Research and Management Company's investment committee). In addition, Capital
Research and Management Company's research professionals make investment
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
(APPROXIMATE)
---------------------
YEARS OF
EXPERIENCE
AS PORTFOLIO WITH CAPITAL
COUNSELOR RESEARCH AND
PORTFOLIO COUNSELORS FOR MANAGEMENT
FOR CAPITAL WORLD CAPITAL WORLD COMPANY OR
GROWTH AND GROWTH ITS TOTAL
INCOME FUND PRIMARY TITLE(S) AND INCOME FUND AFFILIATES YEARS
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
THIERRY Chairman of the 4 years (since 34 34 years
VANDEVENTER Board of the the fund began years
fund. Chairman operations)*
of the Board
and Chief
Executive
Officer,
Capital
Research
Company**
- -------------------------------------------------------------------------------
STEPHEN E. Senior Vice 4 years (since 24 31 years
BEPLER President the fund began years
of the fund. operations)*
Senior
Vice President
and Director,
Capital
Research
Company**
- -------------------------------------------------------------------------------
MARK E. Vice President 4 years (since 15 15 years
DENNING of the fund. the fund began years
Senior Vice operations)*
President and
Director,
Capital
Research
Company**
- -------------------------------------------------------------------------------
JANET A. Vice President 4 years (since 15 21 years
MCKINLEY of the fund. the fund began years
Senior Vice operations)*
President,
Capital
Research
Company**
- -------------------------------------------------------------------------------
WILLIAM R. Senior Vice 4 years (since 27 34 years
GRIMSLEY President and the fund began years
Director, operations)*
Capital
Research and
Management
Company
- -------------------------------------------------------------------------------
</TABLE>
* The fund began operations on March 26, 1993.
** Company affiliated with Capital Research and Management Company.
8
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
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INVESTMENT RESULTS
The fund may from time to time compare investment results to various indices or
other mutual funds. Fund results may be calculated on a total return, yield
and/or distribution rate basis. Results calculated without a sales charge will
be higher.
- - TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gain
distributions.
- - YIELD is computed by dividing the net investment income per share earned by
the fund over a given period of time by the maximum offering price per share
on the last day of the period, according to a formula mandated by the
Securities and Exchange Commission. A yield calculated using this formula
may be different than the income actually paid to shareholders.
- - DISTRIBUTION RATE reflects dividends that were paid by the fund. The
distribution rate is calculated by dividing the dividends paid over the last
12 months by the sum of the month-end price and the capital gain
distributions paid over the last 12 months.
INVESTMENT RESULTS
(FOR PERIODS ENDED DECEMBER 31, 1996)
<TABLE>
<CAPTION>
AVERAGE
ANNUAL THE FUND
TOTAL AT NET THE FUND AT MAXIMUM MSCI
RETURNS: ASSET VALUE/1/ SALES CHARGE/1/,/2/ WORLD/3/
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
One year 21.55% 14.53% 14.00%
................................................................................
Lifetime/4/ 17.32% 15.49% 14.64%
</TABLE>
- --------------------------------------------------------------------------------
Yield/1/,/2/: 2.47%
Distribution Rate/2/: 2.78%
/1/ These fund results were calculated according to a standard that is required
for all stock and bond funds.
/2/ The maximum sales charge has been deducted.
/3/ Morgan Stanley Capital International World Index measures 22 major stock
markets throughout the world, including the U.S. This index is unmanaged and
does not reflect sales charges, commissions or expenses.
/4/ The fund began investment operations March 26, 1993.
9
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
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DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
The fund pays dividends, which may fluctuate, four times a year (usually in
March, June, September and December). Capital gains, if any, are also usually
distributed in December. When a dividend or capital gain is distributed, the
net asset value per share is reduced by the amount of the payment.
FEDERAL TAXES
In any fiscal year in which the fund qualifies as a regulated investment
company and distributes to shareholders all of its net investment income and
net capital gains, the fund itself is relieved of federal income tax.
Generally, 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 income distributions paid during the prior
year. Such distributions may also be subject to state or local taxes. The tax
treatment of redemptions from a retirement plan account may differ from
redemptions from an ordinary shareholder account.
YOU MUST PROVIDE THE FUND WITH A CERTIFIED CORRECT TAXPAYER IDENTIFICATION
NUMBER (GENERALLY YOUR SOCIAL SECURITY NUMBER) AND CERTIFY THAT YOU ARE NOT
SUBJECT TO BACKUP WITHHOLDING. IF YOU FAIL TO DO SO THE IRS CAN REQUIRE THE
FUND TO WITHHOLD 31% OF YOUR TAXABLE DISTRIBUTIONS AND REDEMPTIONS. Federal law
also requires the fund to withhold 30% or the applicable tax treaty rate from
dividends paid to certain nonresident alien, non-U.S. partnership and non-U.S.
corporation shareholder accounts.
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
adviser for further information.
10
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
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FUND ORGANIZATION AND MANAGEMENT
FUND ORGANIZATION AND VOTING RIGHTS
The fund, an open-end, diversified management investment company, was organized
as a Maryland corporation in 1992. All fund operations are supervised by the
fund's board of directors who meet periodically and perform duties required by
applicable state and federal laws. Members of the board who are not employed by
Capital Research and Management Company or its affiliates are paid certain fees
for services rendered to the fund as described in the statement of additional
information. They may elect to defer all or a portion of these fees through a
deferred compensation plan in effect for the fund. The fund does not hold
annual meetings of shareholders. However, significant corporate matters which
require shareholder approval, such as certain elections of board members or a
change in a fundamental investment policy, will be presented to shareholders at
a meeting called for such purpose. Shareholders have one vote per share owned.
At the request of the holders of at least 10% of the shares, the fund will hold
a meeting at which any member of the board could be removed by a majority vote.
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, a wholly owned subsidiary of The Capital Group
Companies, Inc., is headquartered at 333 South Hope Street, Los Angeles, CA
90071. Capital Research and Management Company manages the investment portfolio
and business affairs of the fund. The management fee paid by the fund to
Capital Research and Management Company may not exceed 0.60% of the fund's
average net assets annually and declines at certain asset levels. The total
management fee paid by the fund, as a percentage of average net assets, for the
previous fiscal year is discussed earlier under "Expenses."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company
Institute's Advisory Group on Personal Investing. This policy has also been
incorporated into the fund's "code of ethics."
11
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
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PLAN OF DISTRIBUTION
The fund has a Plan of Distribution or "12b-1 Plan" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the board and the expenses paid under the
plan were incurred within the preceding 12 months and accrued while the plan is
in effect. The 12b-1 fee paid by the fund, as a percentage of average net
assets, for the previous fiscal year is discussed earlier under "Expenses."
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. Fixed-income
securities are generally traded on a "net" basis with a dealer acting as
principal for its own account without a stated commission, although the price
of the security usually includes a profit to the dealer. In underwritten
offerings, securities are usually purchased at a fixed price which includes an
amount of compensation to the dealer, generally referred to as a concession or
discount. On occasion, securities may be purchased directly from an issuer, in
which case no commissions or discounts are paid. 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 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 who
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.
12
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
American Funds Distributors, Inc. and American Funds Service Company serve as
the principal underwriter and transfer agent for the fund, respectively. They
are headquartered at 333 South Hope Street, Los Angeles, CA 90071 and 135 South
State College Boulevard, Brea, CA 92821, respectively.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
[MAP APPEARS HERE]
CALL TOLL-FREE FROM ANYWHERE IN THE U.S.
(8 A.M. TO 8 P.M. ET):
800/421-0180
WESTERN SERVICE CENTER
American Funds Service Company
P.O. Box 2205
Brea, California
92822-2205
Fax: 714/671-7080
WESTERN CENTRAL SERVICE CENTER
American Funds Service Company
P.O. Box 659522
San Antonio, Texas
78265-9522
Fax: 210/530-4050
EASTERN CENTRAL SERVICE CENTER
American Funds Service Company
P.O. Box 6007
Indianapolis, Indiana
46206-6007
Fax: 317/735-6620
EASTERN SERVICE CENTER
American Funds Service Company
P.O. Box 2280
Norfolk, Virginia
23501-2280
Fax: 804/670-4773
13
<PAGE>
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CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES
The fund offers you a valuable array of services you can use to alter your
investment program as your needs and circumstances change. These services,
which are summarized below, are available only in states where they may be
legally offered and may be terminated or modified at any time upon 60 days'
written notice. A COMPLETE DESCRIPTION OF SHAREHOLDER SERVICES AND ACCOUNT
POLICIES IS CONTAINED IN THE FUND'S STATEMENT OF ADDITIONAL INFORMATION. In
addition, an easy-to-read guide to owning a fund in The American Funds Group
titled "Welcome to the Family" is sent to new shareholders and is available by
writing or calling American Funds Service Company.
THE SERVICES DESCRIBED MAY NOT BE AVAILABLE THROUGH SOME RETIREMENT PLANS. IF
YOU ARE INVESTING THROUGH A RETIREMENT PLAN, YOU SHOULD CONTACT YOUR PLAN
ADMINISTRATOR/TRUSTEE ABOUT WHAT SERVICES ARE AVAILABLE AND WITH QUESTIONS
ABOUT YOUR ACCOUNT.
- --------------------------------------------------------------------------------
PURCHASING SHARES
HOW TO PURCHASE SHARES
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may add to your account through your
dealer or directly through American Funds Service Company by mail, wire, or
bank debit. You may also establish or add to your account by exchanging shares
from any of your other accounts in The American Funds Group. The fund and
American Funds Distributors reserve the right to reject any purchase order.
Various purchase options are available as described below subject to certain
investment minimums and limitations described in the statement of additional
information and "Welcome to the Family."
- - Automatic Investment Plan
You may invest monthly or quarterly through automatic withdrawals from your
bank account.
- - Automatic Reinvestment
You may reinvest your dividends and capital gain distributions into the
fund (with no sales charge). This will be done automatically unless you
elect to have the dividends and/or capital gain distributions paid to you
in cash.
14
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
- - Cross-Reinvestment
You may invest your dividend and capital gain distributions into any other
fund in The American Funds Group.
- - Exchange Privilege
You may exchange your shares into other funds in The American Funds Group
generally with no sales charge. Exchanges of shares from the money market
funds that were initially purchased with no sales charge will generally be
subject to the appropriate sales charge. You may also elect to
automatically exchange shares among any of the funds in The American Funds
Group. Exchange requests may be made in writing, by telephone including
American FundsLine(R) (see below) or by fax. EXCHANGES HAVE THE SAME TAX
CONSEQUENCES AS ORDINARY SALES AND PURCHASES.
- - Retirement Plans
You may invest in the fund through various retirement plans. For further
information contact your investment dealer or American Funds Distributors.
SHARE PRICE
The fund's share price, also called net asset value, is determined as of the
close of trading (normally 4:00 p.m., Eastern time) every day the New York
Stock Exchange is open. The fund calculates its net asset value per share,
generally using market prices, by dividing the total value of its assets after
subtracting liabilities by the number of its shares outstanding. Shares are
purchased at the offering price next determined after your investment is
received and accepted by American Funds Service Company. The offering price is
the net asset value plus a sales charge, if applicable.
SHARE CERTIFICATES
Shares are credited to your account and certificates are not issued unless you
request them by writing to American Funds Service Company.
INVESTMENT MINIMUMS
<TABLE>
- ----------------------------------------------------------------
<S> <C>
To establish an account $1,000
For a retirement plan account $ 250
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account $ 25
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
SALES CHARGES
A sales charge may apply, as described below, when purchasing shares. Sales
charges may be reduced for larger purchases as indicated below.
<TABLE>
<CAPTION>
SALES CHARGE AS A
PERCENTAGE OF
-----------------
DEALER
NET CONCESSION AS
OFFERING AMOUNT % OF OFFERING
INVESTMENT PRICE INVESTED PRICE
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50% 4.71% 3.75%
$100,000 but less than $250,000 3.50% 3.63% 2.75%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 but less than $1 million 2.00% 2.04% 1.60%
$1 million or more and certain
other investments described below see below see below see below
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGES
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 200 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY BE
IMPOSED ON CERTAIN REDEMPTIONS MADE WITHIN ONE YEAR OF PURCHASE BY THESE
ACCOUNTS. A dealer concession of up to 1% may be paid by the fund from its Plan
of Distribution on these investments. Investments by retirement plans with $100
million or more in assets may be made with no sales charge and are not subject
to a contingent deferred sales charge. A dealer concession of up to 1% may be
paid by American Funds Distributors on these investments. Investments by
certain individuals and entities including employees and other associated
persons of dealers authorized to sell shares of the fund and Capital Research
and Management Company and its affiliated companies are not subject to a sales
charge.
16
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
ADDITIONAL DEALER COMPENSATION
In addition to the concessions listed, up to 0.30% of average net assets is
paid annually to qualified dealers for providing certain services pursuant to
the fund's Plan of Distribution. During 1997, American Funds Distributors will
also provide additional compensation to the top one hundred dealers who have
sold shares of funds in The American Funds Group based on the pro rata share of
a qualifying dealer's sales.
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your costs. 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 below.
- - Aggregation
Investments that may be aggregated include those made by you, your spouse
and your children under the age of 21, if all parties are purchasing shares
for their own account(s), including any business account solely "controlled
by," as well as any retirement plan or trust account solely for the benefit
of, these individuals. Investments made for multiple employee benefit plans
of a single employer or "affiliated" employers may be aggregated provided
they are not also aggregated with individual accounts. Finally, investments
made by a common trust fund or other diversified pooled account not
specifically formed for the purpose of accumulating fund shares may be
aggregated.
Purchases made for nominee or street name accounts will generally not be
aggregated with those made for other accounts unless qualified as described
above.
- - Concurrent Purchases
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.
- - Right of Accumulation
You may take into account the current value of your existing holdings in
The American Funds Group to determine your sales charge. Direct purchases
of the money market funds are excluded.
17
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
- - Statement of Intention
You may enter into a non-binding commitment to invest a certain amount
(which, at your request, may include purchases made during the previous 90
days) in non-money market fund shares over a 13-month period. A portion of
your account may 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 the applicable sales charge reduction.
- --------------------------------------------------------------------------------
SELLING SHARES
HOW TO SELL SHARES
You may sell (redeem) shares in your account by contacting your investment
dealer or American Funds Service Company. You may also use American
FundsLine(R) (see below). In addition, you may sell shares in amounts of $50 or
more automatically. If you sell shares through your investment dealer you may
be charged for this service. Shares held for you in your dealer's street name
must be sold through the dealer.
Shares are sold at the net asset value next determined after your request is
received in good order by American Funds Service Company. Sale requests may be
made in writing, by telephone, including American FundsLine(R) (see below), or
by fax. Sales by telephone or fax are limited to $10,000 in accounts registered
to individual(s) (including non-retirement trust accounts). In addition, checks
must be made payable to the registered shareholder(s) and mailed to an address
of record that has been used with the account for at least 10 days. 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), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. The fund may, with 60
days' written notice, close your account if due to a sale of shares the account
has a value of less than the minimum required initial investment.
Generally, written requests to sell shares must be signed by you and must
include any shares you wish to sell that are in certificate form. Your
signature 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. A
signature guarantee is not currently required for any sale of $50,000 or less
provided the check is made
18
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
payable to the registered shareholder(s) and is mailed to the address of record
on the account, and provided the address has been used with the account for at
least 10 days. Additional documentation may be required for sales of shares
held in corporate, partnership or fiduciary accounts.
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution without a sales charge in any fund in The American Fund Group
within 90 days after the date of the redemption or distribution. Reinvestment
will be at the next calculated net asset value after receipt and acceptance by
American Funds Service Company.
- --------------------------------------------------------------------------------
OTHER IMPORTANT THINGS TO REMEMBER
AMERICAN FUNDSLINE(R)
You may check your share balance, the price of your shares, or your most recent
account transactions, sell 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.
TELEPHONE PURCHASES, SALES AND EXCHANGES
Unless you opt out of the telephone (including American FundsLine(R)) or fax
purchase, sale and/or exchange options (see below), 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 provided American Funds Service Company employs reasonable
procedures to confirm that the instructions received from any person with
appropriate account information are genuine. If reasonable procedures are not
employed, the fund may be liable for losses due to unauthorized or fraudulent
instructions.
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 also reinstate them at any time by writing to
American Funds Service Company.)
ACCOUNT STATEMENTS
You will receive regular confirmation statements reflecting transactions in
your account. Purchases through automatic investment plans and certain
retirement plans will be confirmed at least quarterly.
19
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
NOTES
20
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
NOTES
21
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
NOTES
22
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
NOTES
23
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL WORLD GROWTH AND INCOME FUND / PROSPECTUS
- --------------------------------------------------------------------------------
FOR SHAREHOLDER FOR DEALER FOR 24-HOUR
SERVICES SERVICES INFORMATION
American Funds American Funds American
Service Company Distributors FundsLine(R)
800/421-0180 ext. 1 800/421-9900 ext. 11 800/325-3590
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
--------------------------------------------------------------
OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL STATEMENT OF ADDITIONAL
REPORT TO SHAREHOLDERS INFORMATION (SAI)
Includes financial Contains more detailed
statements, detailed information on all aspects of
performance information, the fund, including the
portfolio holdings, a fund's financial statements.
statement from portfolio
management and the
independent accountants'
report.
CODE OF ETHICS A current SAI has been filed
with the Securities and
Includes a description of the Exchange Commission and is
fund's personal investing incorporated by reference (is
policy. legally part of the
prospectus).
To request a free copy of any of the documents above:
Call American Funds or Write to the Secretary of the
Service Company fund 333 South Hope Street
800/421-0180 ext. 1 Los Angeles, CA 90071
[RECYCLE LOGO]
This prospectus has been printed on recycled paper.
24
CAPITAL WORLD GROWTH AND INCOME FUND, INC.
Part B
Statement of Additional Information
FEBRUARY 1, 1997
This document is not a prospectus but should be read in conjunction
with the current prospectus of Capital World Growth and Income Fund, Inc. (the
fund) dated February 1, 1997. The prospectus may be obtained from your
investment dealer or financial planner or by writing to the fund at the
following address:
Capital World Growth and Income Fund, Inc.
Attention: Secretary
333 South Hope Street
Los Angeles, CA 90071
(213) 486-9200
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>
Description of Certain Securities and Investment Techniques 1
Investment Restrictions 3
Fund Directors and Officers 6
Management 11
Dividends, Distributions and Federal Taxes 13
Purchase of Shares 16
Redeeming Shares 23
Shareholder Account Services and Privileges 24
Execution of Portfolio Transactions 26
General Information 27
Investment Results 28
Description of Ratings for Debt Securities 30
Financial Statements Attached
</TABLE>
DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
THE DESCRIPTIONS BELOW ARE INTENDED TO SUPPLEMENT THE MATERIAL IN THE
PROSPECTUS UNDER "INVESTMENT POLICIES AND RISKS."
INVESTMENT POLICIES -- The fund may invest up to 10% of its assets in debt
securities which are rated below the top three quality categories by Standard &
Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's") or
securities that are determined equivalent by the fund's investment adviser,
Capital Research and Management Company (the "Investment Adviser") including
bonds rated BBB and Baa or below ("junk" bonds or "high-yield, high-risk"
bonds). (See "Description of Ratings for Debt Securities" below.)
CERTAIN RISK FACTORS RELATING TO HIGH-YIELD, HIGH-RISK BONDS
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 defaults on its obligations to pay interest
or principal or enters into bankruptcy 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 and yields of high-yield, high-risk bonds.
PAYMENT EXPECTATIONS - High-yield, high-risk bonds may contain redemption
or call provisions. If an issuer exercised these provisions in a declining
interest rate market, the fund may have to replace the security with a lower
yielding security, resulting in a decreased return for investors. Conversely,
a high-yield, high-risk bond is likely to decrease in a rising interest rate
market, as is generally true 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.
Subsequent to its purchase by the fund, certain bonds or notes may cease to be
rated or their ratings may be reduced below the minimum rating required for
purchase by the fund. Neither event requires the elimination of such
obligations from the fund's portfolio, but the Investment Adviser will consider
such an event in its determination of whether the fund should continue to hold
such obligations in its portfolio. If, however, as a result of a downgrade or
otherwise, the fund holds more than 5% of its net assets in high-yield,
high-risk bonds, the fund will dispose of the excess as expeditiously as
possible.
REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements,
under which it buys a security and obtains a simultaneous commitment from the
seller to repurchase the security at a specified time and price. 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. 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, liquidation of the collateral by the fund may be
delayed or limited. For purposes of Investment Restriction number five, under
"Investment Restrictions" below, repurchase agreements maturing in excess of
seven days are considered not readily marketable. The fund does not currently
intend (at least for the next 12 months) to invest more than 5% of its net
assets in repurchase agreements.
CURRENCY TRANSACTIONS -- The fund has the ability to enter into forward
currency contracts to protect against changes in currency exchange rates. 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. Forward currency contracts entered into by the fund will involve the
purchase or sale of a currency against the U.S. dollar. The fund will
segregate liquid assets which will be marked to market daily to meet its
forward contract commitments to the extent required by the Securities and
Exchange Commission.
Certain provisions of the Internal Revenue Code may affect 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.
U.S. GOVERNMENT SECURITIES -- From time to time, the fund may invest in U.S.
government securities. Securities guaranteed by the U.S. government include:
(1) direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds) and (2) federal agency obligations guaranteed as to principal and
interest by the U.S. Treasury.
Certain securities issued by U.S. government instrumentalities and certain
federal agencies are neither direct obligations of, nor guaranteed by, the
Treasury. However, such securities 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 and others are supported only by the credit of the issuing
government agency or instrumentality.
CASH EQUIVALENTS -- The fund invests in various high-quality money market
instruments that mature, or may be redeemed or resold, in 13 months or less (25
months in the case of U.S. government securities). These include: (1)
commercial paper ( notes issued by corporations or governmental bodies); (2)
certificates of deposit and banker's acceptances (time drafts on a commercial
bank where the bank accepts an irrevocable obligation to pay at maturity), ,
(3) savings association and bank obligations (4) securities of the U.S.
Government, its agencies or instrumentalities, and (5) corporate bonds and
notes.
INVESTMENT RESTRICTIONS
FUNDAMENTAL POLICIES -- 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. With respect to 75% of the fund's total assets, purchase the securities of
any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities) if, as a result, (a) more than 5%
of the fund's total assets would be invested in the securities of that issuer,
or (b) the fund would hold more than 10% of the outstanding voting securities
of that issuer;
2. Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
3. Purchase or sell commodities unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
engaging in currency-related options and forward or futures contracts);
4. Invest 25% or more of the fund's total assets in the securities of issuers
in the same industry. Obligations of the U.S. Government, its agencies and
instrumentalities are not subject to this 25% limitation on industry
concentration;
5. Invest more than 15% of the value of its net assets in securities which are
not readily marketable (including repurchase agreements maturing in more than
seven days or securities traded outside the U.S. 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 purchase or disposal of an investment position may
technically constitute the fund as an underwriter as that term is defined under
the Securities Act of 1933;
6. Invest in companies for the purpose of exercising control or management;
7. Make loans to others except for (a) purchasing debt securities; (b) entering
into repurchase agreements; and (c) loaning portfolio securities;
8. Issue senior securities, except as permitted under the Investment Company
Act of 1940;
9. Borrow money, except from banks for temporary purposes in an amount not to
exceed one-third of the value of the fund's total assets. Moreover, in the
event that the asset coverage for such borrowing falls below 300%, the fund
will reduce, within three days, the amount of its borrowing in order to provide
for 300% asset coverage;
10. Pledge or hypothecate assets in excess of one-third of the fund's total
assets; or
11. Purchase or sell puts, calls, straddles, or spreads, or combinations
thereof (except for currency options);
The fund does not currently intend (at least for the next 12 months) to loan
portfolio securities or invest in securities or other instruments backed by
real estate.
NON-FUNDAMENTAL POLICIES -- The following policies may be changed by action of
the Board of Directors without shareholder approval.
1. The fund does not currently intend (at least for the next 12 months) to
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.
2. The fund does not currently intend (at least for the next 12 months) to
purchase securities on margin, except that margin payments in connection with
currency-related transactions shall not constitute purchasing securities on
margin.
3. The fund does not currently intend (at least for the next 12 months) to
purchase the securities of any issuer (other than securities issued or
guaranteed by the governments of any country or political subdivisions thereof)
if, as a result, more than 5% of its total assets would be invested in the
securities of business enterprises that, including predecessors, have a record
of less than three years of continuous operation.
4. The fund does not currently intend (at least for the next 12 months) to
invest in oil, gas, or other mineral exploration or development programs or
leases.
5. The fund does not currently intend (at least for the next 12 months) to
purchase the securities of any issuer if those officers and Directors of the
fund, its Investment Adviser or principal underwriter who individually own more
than 1/2 of 1% of the securities of such issuer together own more than 5% of
such issuer's securities.
6. The fund does not currently intend (at least for the next 12 months) to
invest more than 5% of its net assets, valued at the lower of cost or market at
the time of purchase, in warrants, including not more than 2% of such net
assets in warrants that are not listed on a major stock exchange. However,
warrants acquired in units or attached to securities may be deemed to be
without value for the purpose of this restriction.
7. Although the fund has no current intention of investing in securities of
other investment companies (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.) Notwithstanding this restriction, the fund may invest in securities
of other managed investment companies if deemed advisable by its officers in
connection with the administration of a deferred compensation plan adopted by
Directors and to the extent such investments are allowed by an exemptive order
granted by the U.S. Securities and Exchange Commission.
8. The fund does not currently intend (at least for the next 12 months) to
invest more than 5% of its net assets in restricted securities (excluding Rule
144A securities).
9. The fund does not currently intend (at least for the next 12 months) to
purchase securities in the event its borrowings exceed 5%.
FUND DIRECTORS AND OFFICERS
DIRECTORS AND DIRECTOR COMPENSATION
(with their principal occupations during the past five years)#
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION PRINCIPAL AGGREGATE TOTAL TOTAL
AND AGE WITH OCCUPATION(S) COMPENSATION COMPENSATION NUMBER
REGISTRANT DURING PAST 5 FROM THE FUND (INCLUDING OF FUND
YEARS DURING FISCAL VOLUNTARILY BOARDS
(POSITIONS YEAR ENDED DEFERRED ON WHICH
WITHIN THE 11/30/96 COMPENSATION/1/) DIRECTOR
ORGANIZATIONS FROM ALL FUNDS SERVES
LISTED MAY MANAGED BY
HAVE CHANGED CAPITAL RESEARCH
DURING THIS AND
PERIOD) MANAGEMENT
COMPANY/2/
<S> <C> <C> <C> <C> <C>
++H. Frederick Director Private $11,900/4/ $149,900 18
Christie Investor;
P.O. Box 144 former
Palos Verdes President and
Estates, CA Chief
90274 Executive
Age: 63 Officer, The
Mission Group
(non-utility
holding
company,
subsidiary of
Southern
California
Edison
Company);
former
President,
Southern
California
Edison Company.
+Paul G. President Senior Vice None/3/ None/3/ 14
Haaga, Jr. and President and
333 South Hope Director Director,
Street Capital
Los Angeles, Research and
CA 90071 Management
Age: 48 Company.
Mary Myers Director President and $11,100/4/ $75,500 4
Kauppila Founder,
One Winthrop Energy
Square Investment,
Boston, MA Inc.
02110-1097
Age: 42
Gail L. Neale Director President, $11,100/4/ $51,400 4
The Lovejoy The Lovejoy
Consulting Consulting
Group, Inc. Group, Inc.;
154 Prospect Special
Parkway Adviser,
Burlington, VT Salzburg
05401 Seminar;
Age: 61 former
Executive
Vice
President,
Salzburg
Seminar;
former
Director of
Development
and the
Capital
Campaign,
Hampshire College;
former Special Advisor,
The Commonwealth Fund
and Mount Holyoke
College.
Robert J. Director Chichele $11,100 $32,700 3
O'Neill Professor of
St. Mary's the History
Close of War and
27 Church Fellow of All
Green Souls
Whitney, OXON, College,
U.K. University of
Age: 60 Oxford.
Donald E. Director Retired; $10,400/4/ $58,150 4
Petersen former
255 East Brown Chairman of
Birmingham, MI the board and
48009 Chief
Age: 70 Executive
Officer, Ford
Motor
Company.
Frank Stanton Director President $12,400 $27,000 2
25 West 52nd Emeritus, CBS
Street Inc.;
New York, NY Chairman
10019 Emeritus, The
Age: 88 American Red
Cross.
+Thierry Chairman Chairman of None/3/ None/3/ 2
Vandeventer of the the Board,
3 Place des Board and Capital
Bergues Principal Research
1201 Geneva, Executive Company.
Switzerland Officer
Age: 61
Charles Wolf, Director Dean, The $11,900 $52,200 4
Jr. RAND Graduate
1700 Main School;
Street Director,
Santa Monica, International
CA 90406 Economic
Age: 72 Studies, The
RAND
Corporation.
</TABLE>
+ Directors who are considered "interested" persons as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), on the basis of
their affiliation with the fund's Investment Adviser, Capital Research and
Management Company.
++ May be deemed an "interested person" of the fund within the meaning of the
1940 Act due to membership on the board of directors of the parent company of a
registered broker-dealer.
/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, and Endowments, Inc. and Bond Portfolio for
Endowments, Inc.
/3/ Paul G. Haaga, Jr. and Thierry Vandeventer are affiliated with the
Investment Adviser and, accordingly, receive no remuneration from the fund.
/4/ Since the plan's adoption, the total amount of deferred compensation
accrued by the fund (plus earnings thereon) for participating Directors is as
follows: H. Frederick Christie ($21,656); Mary Myers Kauppila ($47,968); Gail
L. Neale ($40,008); Donald E. Petersen ($39,063). Amounts deferred and
accumulated earnings thereon are not funded and are general unsecured
liabilities of the fund until paid to the Directors.
OFFICERS/#/
THIERRY VANDEVENTER, Chairman of the Board (see above).
PAUL G. HAAGA, JR., President (see above).
* LARRY P. CLEMMENSEN, Senior Vice President .
Senior Vice President and Director, Capital Research and Management Company.
President, The Capital Group Companies, Inc.
** STEPHEN E. BEPLER, Senior Vice President.
Senior Vice President and Director, Capital Research Company.
**** MARK E. DENNING, Vice President.
Senior Vice President, Capital Research Company.
** JANET A. MCKINLEY , Vice President.
Senior Vice President, Capital Research Company.
* VINCENT P. CORTI, Secretary.
Vice President - Fund Business Management Group, Capital Research and
Management Company.
*** R. MARCIA GOULD, Treasurer
Vice President - Fund Business Management Group, Capital Research and
Management Company. Former Senior Tax Manager, Price Waterhouse LLP.
__________________________________
# Positions within the organizations listed may have changed during this
period.
* Address is 333 South Hope Street, Los Angeles, CA 90071.
** Address is 630 Fifth Avenue, New York, NY 10111.
*** Address is 135 South State College Boulevard, Brea, CA 92821.
**** Address is 25 Bedford Street, London, England.
All of the officers listed are also officers or employees of the Investment
Adviser or affiliated companies. 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 fees of $9,000 per annum, plus
$800 for each Board of Directors meeting attended, plus $400 for each meeting
attended as a member of a committee of the Board of Directors. No pension or
retirement benefits are accrued as part of fund expenses. 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. As of December 31, 1996 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 (Los Angeles, San Francisco, New
York, Washington, D.C., London, Geneva, Singapore, Hong Kong and Tokyo), with a
staff of professionals, many of whom have a number of years of investment
experience. The Investment Adviser is located at 333 South Hope Street, Los
Angeles, CA 90071, and at 135 South State College Boulevard, Brea, CA 92821.
The Investment Adviser's 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. The Investment Adviser is a wholly owned subsidiary of The
Capital Group Companies, Inc.
An affiliate of the Investment Adviser compiles indices for major stock markets
around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information on 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, dated
February 1, 1993, will continue in effect until October 31, 1997, 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, 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 the 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, 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).
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of
qualified persons to perform the executive and related administrative functions
of the fund, provides suitable office space, necessary small office equipment
and telephone facilities and utilities, and general purpose forms, supplies,
stationery and postage used at the office of the fund relating to the services
furnished by the Investment Adviser.
The Investment Adviser agrees 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 regulations, will reimburse the
fund in the amount of such excess. The management fee is based on an annual
rate of 0.60% of the first $500 million of average net assets; 0.50% of such
assets in excess of $500 million but not exceeding $1 billion; 0.46% of such
assets in excess of $1 billion but not exceeding $1.5 billion; 0.43% of such
assets in excess of $1.5 billion but not exceeding $2.5 billion; 0.41% of such
assets in excess of $2.5 billion but not exceeding $4 billion; 0.40% of such
assets in excess of $4 billion but not exceeding $6.5 billion; and 0.395% of
such assets in excess of $6.5 billion.
During the fiscal years ended November 30, 1996, 1995 and 1994, the
Investment Adviser's total fee amounted to $19,343,000, $14,847,000, and
$11,438,000 respectively.
PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal
Underwriter") is the principal underwriter of the fund's shares. The principal
Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92821, 8000 IH-10 West, San Antonio, TX
78230, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240, and 5300
Robin Hood Road, Norfolk, VA 23513. The fund has adopted a Plan of
Distribution (the Plan), pursuant to rule 12b-1 under the 1940 Act . 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 during the fiscal year ended
November 30, 1996 amounted to $4,496,000 after allowance of $22,759,000 to
dealers. During the fiscal years ended November 30, 1995 and 1994, the
Principal Underwriter received $2,990,000 and $6,306,000 respectively.
As required by rule 12b-1, the Plan (together with the Principal Underwriting
Agreement) has been approved by the full 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 are 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 is 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 being 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 preceding 12 months and accrued while the Plan is in effect may be
paid by the fund. During the fiscal year ended November 30, 1996, the fund
paid $9,567,000 under the Plan.
The Glass-Stegall 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
with 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 the sum of its investment
company taxable income it will be taxed only on that portion, if any, of the
investment company taxable income which 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
sale or other disposition of stock or securities held for 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, U.S. Government securities and other securities which 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.
Distributions of investment company taxable income, including short-term
capital gains, generally are taxable to the shareholder as ordinary income,
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the fund. 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. A capital gain distribution,
whether paid in cash or reinvested in shares, is taxable to shareholders as
long-term capital gains, regardless of the length of time a shareholder has
held the shares or whether such gain was realized by the fund before the
shareholder acquired such shares and was reflected in the price paid for the
shares.
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.
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 forward
currency contracts 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 amount of any realized gain or loss on closing out forward currency
contracts 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 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.
Under the Code, if within 90 days after fund shares are purchased, such shares
are exchanged for the shares of any other fund in The American Funds Group and
the otherwise applicable sales charge is waived, then the amount of the sales
charge previously incurred in purchasing fund shares shall not be taken into
account for purposes of determining the amount of any gain or loss on the
exchange, but will be treated as having been incurred in the purchase of the
fund shares acquired in the exchange.
Under the Code, the fund's taxable income for each year will be computed
without regard to any net foreign currency loss attributable to transactions
after October 31, and any such net foreign currency loss will be treated as
arising on the first day of the following taxable year.
The fund's dividends will be based on its income for federal tax purposes.
Because some gains and losses from currency fluctuation are deemed to be income
or loss for federal tax purposes, the fund's dividends may be more or less than
interest and dividends earned by the fund.
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.
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 amount of
tax of 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 an individual
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. Shareholders should consult their own tax advisers for
additional details as to their particular tax status.
PURCHASE OF SHARES
<TABLE>
<CAPTION>
METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
<S> <C> <C>
See "Investment Minimums and Fund $50 minimum (except where a lower
Numbers" for initial minimum is noted under "Investment
investment minimums. Minimums and Fund Numbers").
By contacting Visit any investment dealer who Mail directly to your investment
your investment is registered in the state where dealer's address printed on your
dealer the purchase is made and who has account statement.
a sales agreement with American
Funds Distributors.
By mail Make your check payable to the Fill out the account additions form
fund and mail to the address at the bottom of a recent account
indicated on the account statement, make your check payable to
application. Please indicate an the fund, write your account number
investment dealer on the account on your check, and mail the check and
application. form in the envelope provided with
your account statement.
By telephone Please contact your investment Complete the "Investments by Phone"
dealer to open account, then section on the account application or
follow the procedures for American FundsLink Authorization
additional investments. Form.
Once you establish the privilege,
you, your financial advisor or any
person with your account information
can call American FundsLine(r) and make
investments by telephone (subject to
conditions noted in "Shareholder
Account Services and Privileges -
Telephone Redemptions and
Exchanges" below).
By wire Call 800/421-0180 to obtain Your bank should wire your additional
your account number(s), if investments in the same manner as
necessary. Please indicate an described under "Initial Investment."
investment dealer 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.
</TABLE>
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>
<S> <C> <C>
MINIMUM FUND
FUND INITIAL NUMBER
INVESTMENT
STOCK AND STOCK/BOND FUNDS
AMCAP Fund(r) 02
$1,000
American Balanced Fund(r) 11
500
American Mutual Fund(r) 03
250
Capital Income Builder(r) 12
1,000
Capital World Growth and Income Fund(sm) 33
1,000
EuroPacific Growth Fund(r) 16
250
Fundamental Investors(sm) 10
250
The Growth Fund of America(r) 05
1,000
The Income Fund of America(r) 06
1,000
The Investment Company of America(r) 04
250
The New Economy Fund(r) 14
1,000
New Perspective Fund(r) 07
250
SMALLCAP World Fund(r) 35
1,000
Washington Mutual Investors Fund(sm) 01
250
BOND FUNDS
American High-Income Municipal Bond Fund(r) 40
1,000
American High-Income Trust(sm) 21
1,000
The Bond Fund of America(sm) 08
1,000
Capital World Bond Fund(r) 31
1,000
Intermediate Bond Fund of America(sm) 23
1,000
Limited Term Tax-Exempt Bond Fund of America(sm) 43
1,000
The Tax-Exempt Bond Fund of America(r) 19
1,000
The Tax-Exempt Fund of California(r)* 20
1,000
The Tax-Exempt Fund of Maryland(r)* 24
1,000
The Tax-Exempt Fund of Virginia(r)* 25
1,000
U.S. Government Securities Fund(sm) 22
1,000
MONEY MARKET FUNDS
The Cash Management Trust of America(r) 09
2,500
The Tax-Exempt Money Fund of America(sm) 39
2,500
The U.S. Treasury Money Fund of America(sm) 49
2,500
___________
*Available only in certain states.
</TABLE>
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). 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. TAX-EXEMPT FUNDS
SHOULD NOT SERVE AS RETIREMENT PLAN INVESTMENTS. The minimum is $50 for
additional investments (except as noted above).
DEALER COMMISSIONS - 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.)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SALES CHARGE AS DEALER
AMOUNT OF PURCHASE PERCENTAGE OF THE: CONCESSION
AT THE OFFERING PRICE AS PERCENTAGE
OF THE
OFFERING
PRICE
NET AMOUNT OFFERING
INVESTED PRICE
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 (see below)
none none
</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 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 of $1 million
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.
American Funds Distributors, at its expense (from a designated percentage of
its income), will, during calendar year 1997, provide additional compensation
to dealers. Currently these payments are limited to the top one hundred dealers
who have sold shares of the fund or other funds in The American Funds Group.
These 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 payments.
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 twelve months of the purchase. (See
"Redeeming Shares--Contingent Deferred Sales Charge.")
Qualified dealers currently are paid a continuing service fee not to exceed
0.30% 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. 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.
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 following 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 will 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 of such 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 securities dealer, the appropriate
number of shares held in escrow 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 payroll
deduction 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, 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 acceptance of these terms with their first purchase.
AGGREGATION - Sales charge discounts are available for certain aggregated
investments. Qualifying investments include those by you, your spouse and your
children under the age of 21, if all parties are purchasing shares for their
own account(s), which may include purchases through employee benefit plan(s)
such as an IRA, individual-type 403(b) plan or single-participant Keogh-type
plan or by a business solely controlled by 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 other accounts and may not be aggregated with other nominee or
street name accounts unless otherwise qualified as described above.
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; 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. In case of orders sent directly to the fund or American Funds
Service Company, an investment dealer MUST be indicated. 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 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. The New York Stock Exchange is currently closed on weekends and on the
following holidays: New Year's Day, Presidents' 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 ADRs and EDRs, 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 in the over-the-counter
market prior to the time of valuation or, lacking any sales, at the last
reported bid price. 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 or 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 the 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 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 net assets so obtained are 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 Principal Underwriter will not knowingly sell shares 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 though an investment
trust more than 3% of the outstanding shares of the fund without the consent of
a majority of the fund's Directors.
REDEEMING SHARES
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By writing to American Funds Send a letter of instruction specifying the name of
Service Company (at the the fund, the number of shares or dollar amount to be
appropriate address sold, your name and account number. You should also
indicated under "Fund enclose any share certificates you wish to redeem.
Organization and Management For redemptions over $50,000 and for certain
- - Principal Underwriter and redemptions of $50,000 or less (see below), your
Transfer Agent" in the signature must be guaranteed by a bank, savings
prospectus) 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. 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 your If you redeem shares through your investment dealer,
investment dealer you may be charged for this service. SHARES HELD FOR
YOU IN YOUR INVESTMENT DEALER'S STREET NAME MUST BE
REDEEMED THROUGH THE DEALER.
You may have a redemption You may use this option, provided the account is
check sent to you by using registered in the name of an individual(s), a
American FundsLine(r) or by UGMA/UTMA custodian, or a non-retirement plan trust.
telephoning, faxing, or These redemptions may not exceed $10,000 per day, per
telegraphing American Funds fund account and the check must be made payable to the
Service Company (subject to shareholder(s) of record and be sent to the address of
the conditions noted in this record provided the address has been used with the
section and in "Telephone account for at least 10 days. See "Fund Organization
Purchases, Sales and and Management - Principal Underwriter and Transfer
Exchanges" in the Agent" in the prospectus and "Exchange Privilege"
prospectus) below for the appropriate telephone or fax number.
In the case of the money Upon request (use the account application for the
market funds, you may have money market funds) you may establish telephone
redemptions wired to your redemption privileges (which will enable you to have a
bank by telephoning American redemption sent to your bank account) and/or check
Funds Service Company writing privileges. If you request check writing
($1,000 or more) or by privileges, you will be provided with checks that you
writing a check ($250 or may use to draw against your account. These checks
more) may be made payable to anyone you designate and must
be signed by the authorized number of registered
shareholders exactly as indicated on your checking
account signature card.
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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.
CONTINGENT DEFERRED SALES CHARGE - A contingent deferred sales charge of 1%
applies to certain redemptions made within twelve months of purchase 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 591/2; 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.
REDEMPTION OF SHARES - The fund's Articles of Incorporation permit the fund
to direct the Transfer Agent to redeem the shares of any shareholder if (a) the
shares owned by such shareholder have a value (determined, for the purpose of
this sentence only, as the greater of the shareholder's cost or the then net
asset value of the shares, including the reinvestment of income dividends and
capital gain distributions, if any) of less than $150, or (b) such shareholder
owns less than ten (10) shares of capital stock of the fund. Prior notice of
at least 60 days will be given to a shareholder before the involuntary
redemption provision is made effective with respect to the shareholder's
account. The shareholder will have not less than 30 days from the date of such
notice within which to bring the account up to the minimum determined as set
forth above.
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 dates you select. 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 the
shareholder's bank account cannot be charged due to insufficient funds, a
stop-payment order or the closing of the 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 to the Transfer
Agent.
AUTOMATIC REINVESTMENT - Dividends and capital gain distributions are
reinvested in additional shares at no sales charge unless you indicate
otherwise on the account application. You also may elect to have dividends
and/or capital gain distributions paid in cash by informing the fund, American
Funds Service Company or your investment dealer.
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).
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 "American FundsLine(r)" below), or by telephoning
800/421-0180 toll-free, faxing (see "Principal Underwriter and Transfer Agent"
in the prospectus for the appropriate fax numbers) or telegraphing American
Funds Service Company. (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 simultaneously at the share
prices next determined after the exchange order is received. (See "Purchase of
Shares--Price of Shares.") 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
preceding 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 receiving 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 - 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.
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 and certain retirement plans will be confirmed at
least quarterly.
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 TouchTonet
telephone. Redemptions and exchanges through American FundsLine(r) are subject
to the conditions noted above and in "Telephone Redemptions and Exchanges"
below. You will need your fund number (see the list of funds in The American
Funds Group under "Purchase of 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.
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 also reinstate them at any time 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.
REDEMPTION OF SHARES - The Transfer Agent may redeem the shares of any
shareholder if the shares owned by such shareholder through redemptions, market
decline or otherwise, have a value of less than the minimum initial investment
amount required of new shareholders, (determined, for this purpose only as the
greater of the shareholder's cost or current net asset value of the shares,
including any shares acquired through reinvestment of income dividends and
capital gains distributions). Prior notice of at least 60 days will be given
to a shareholder before the involuntary redemtion provision is made effective
with respect to the shareholder's account. The shareholder will have not less
than 30 days from the date of such notice within which to bring the account up
to the minimum determined as set forth above.
EXECUTION OF PORTFOLIO TRANSACTIONS
Orders for the fund's portfolio securities transactions are placed by the
Investment Adviser. The Investment Adviser strives to obtain the best
available prices in its portfolio transactions taking into account the costs
and promptness of executions. When circumstances relating to a proposed
transaction indicate that a particular broker is in a position to obtain the
best price and execution, the order is placed with that broker. This may or may
not be a broker who has provided investment research, statistical, or other
related services to the Investment Adviser or has sold shares of the fund or
other funds served by the Investment Adviser. The fund does not consider that
it has an obligation to obtain the lowest available commission rate to the
exclusion of price, service and qualitative considerations.
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 of the 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.
As of the end of the fund's most recent fiscal year, amounts held in certain
equity and debt securities of some of its regular brokers and dealers were as
follows: J.P. Morgan & Co., Inc. ($7,550,000).
Brokerage commissions paid on portfolio transactions for the fiscal years
ended November 30, 1996, 1995 and 1994 amounted to $5,545,000, $3,091,000 and
$3,482,000 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, One Chase Manhattan Plaza, New York, NY
10081, as Custodian. Non-U.S. securities may be held by the Custodian pursuant
to subcustodial arrangements in non-U.S. banks or foreign branches of U.S.
banks.
TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary
of the Investment Adviser, maintains the records of each shareholder's account,
processes purchases and redemptions of the fund's shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee
of $3,781,000 for the fiscal year ended November 30, 1996.
INDEPENDENT ACCOUNTANTS - Price Waterhouse LLP, 400 South Hope Street, Los
Angeles, CA 90071, provides 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 have been so included in reliance on the report of Price Waterhouse
LLP given on the authority of said firm as experts in auditing and accounting.
REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on November 30.
Shareholders are provided at least semi-annually with reports showing the
investment portfolio and financial statements audited annually by the fund's
independent auditors, Price Waterhouse LLP, whose selection is determined
annually by the 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. You may obtain a summary of
the personal investing policy by contacting the Secretary of the fund.
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.
The financial statements including the investment portfolio and the report of
Independent Auditors 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 -- NOVEMBER 30, 1996
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Net asset value and redemption price per share
(net assets divided by shares outstanding) $ 23.77
Maximum offering price per share
(100/94.25 of net asset value per share, which takes
into account the fund's current maximum sales load) $ 25.22
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INVESTMENT RESULTS
The fund's yield is 2.49% based on a 30-day (or one month) period ended
November 30, 1996, 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 and average annualized lifetime return
ending on November 30, 1996 was 16.58% and 15.72% respectively. Total return
(T) is computed by equating the value at the end of the period (ending
redeemable value or 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 may also 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 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 Composite Stock
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, Ibbottson Associates, Lipper Analytical Services, Morningstar,
Inc. and Wiesenberger 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 (E.G. food, clothing, fuels,
transportation, and other goods and services that people buy for day-to-day
living).
EXPERIENCE OF INVESTMENT ADVISER - Capital Research and Management Company
manages nine common stock funds that are at least 10 years old. In the
10-year periods since January 1, 1967 (127 in all), those funds have had
better total returns than the Standard and Poor's 500 Stock Composite Index in
91 of the 127 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.
DESCRIPTION OF RATINGS FOR DEBT SECURITIES
BOND RATINGS --
The ratings of Moody's Investors Service, Inc. and Standard & Poor's
Corporation represent their opinions as to the quality of the municipal bonds
which they undertake to rate. It should be emphasized, however, that ratings
are general and are not absolute standards of quality. Consequently, municipal
bonds with the same maturity, coupon and rating may have different yields,
while municipal bonds of the same maturity and coupon with different ratings
may have the same yield.
Moody's Investors Service, Inc. rates the long-term debt securities issued by
various entities from "Aaa" to "C." Moody's applies the numerical modifiers 1,
2, and 3 in each generic rating classification from Aa through B in its
corporate bond rating system. The modifier 1 indicates that the security ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category. Ratings are described as follows:
"Bonds which are rated Aaa are judged to be of the best quality. They 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."
"Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities."
"Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. 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."
"Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. 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."
"Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often 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. Uncertainty of position characterizes
bonds in this class."
"Bonds which are rated 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."
"Bonds which are rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest."
"Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings."
"Bonds which are rated C are the lowest rated class of bonds, and issues so
rated 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. The
ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories.
Ratings are described as follows:
"Debt rated 'AAA' has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong."
"Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree."
"Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."
"Debt rated 'BBB' is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories."
"Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or impled 'BBB-' rating.
"Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The 'B' rating category is also used for
debt subordinated to senior debt that is assigned an actual or implied 'BB' or
'BB-' rating."
"The rating 'CC' is typically applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC' rating."
"The rating 'C' is typically applied to debt subordinated to senior debt which
is assigned an actual or implied 'CCC-' debt rating. The 'C' rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued."
"The rating 'C1' is reserved for income bonds on which no interest is being
paid."
"Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The 'D' rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized."
COMMERCIAL PAPER RATINGS --
STANDARD & POOR'S CORPORATION: "A-1" and "A-2" are the two highest commercial
paper rating categories and are described as follows:
"A-1 This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong."
"A-2 Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
'A-1'."
MOODY'S INVESTORS SERVICE, INC.: "Prime-1" and "Prime-2" are the two highest
commercial paper rating categories and are described as follows:
"ISSUERS RATED PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:
- Leading market positions in well established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
- Broad margins in earning coverage of fixed financial charges and high
internal cash generation.
- Well established access to a range of financial markets and assured
sources of alternate liquidity."
"ISSUERS RATED PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained."
<TABLE>
CAPITAL WORLD GROWTH & INCOME FUND
Where Capital World Growth and Income Fund's
Assets Were Invested
(percent invested by country as of 11/30/96)
<S> <C> <C>
Europe 36.9%
United Kingdom 12.1
Netherlands 5.2
France 4.5
Germany 3.6
Sweden 3.0
Italy 2.2
Spain 1.8
Portugal 1.4
Finland .6
Denmark .5
Norway .5
Switzerland .5
Luxembourg .4
Belgium .3
Ireland .2
Austria .1
The Americas 35.6%
United States 28.0
Canada 5.3
Mexico .8
Chile .6
Argentina .6
Brazil .3
Asia/Pacific Rim 14.5%
Australia 5.5
Hong Kong 3.3
New Zealand 2.9
Japan 1.6
Philippines .8
Thailand .2
South Korea .1
India .1
Other 2.0%
Supra-National 1.3
South Africa .7
Total Equity-Type Securities 89.0%
Bonds & Notes 1.9%
Cash & Equivalents 9.1%
100.0%
</TABLE>
<TABLE>
CAPITAL WORLD GROWTH & INCOME FUND
Investment Portfolio, November 30, 1996
<S> <C> <C>
Largest Industry Holdings
Equity-Type Securities 89.02%
Banking 14.36%
Telecommunications 9.38%
Health & Personal Care 4.45%
Energy Sources 3.96%
Utilities: Electric & Gas 3.74%
Other Industries 53.13%
Bonds and Notes 1.87%
Cash & Equivalents 9.11%
Largest Individual Percent of
Equity Holdings Net Assets
ING Groep NV (Netherlands) 2.53%
Telecom Corp. of New Zealand (New Zealand) 1.82
Australia and New Zealand
Banking Group (Australia) 1.61
Portugal Telecom (Portugal) 1.41
Astra (Sweden) 1.20
First Union (USA) 1.12
Koninklijke PTT Nederland (Netherlands) 1.10
Royal Bank of Canada (Canada) 1.08
Bank of New York (USA) 1.07
Cadbury Schweppes (United Kingdom) 1.01
</TABLE>
<TABLE>
CAPITAL WORLD GROWTH AND INCOME FUND
INVESTMENT PORTFOLIO, NOVEMBER 30, 1996
- ------------------------------------------- ---------- ---------- ----------
Equity-Type Securities Shares or Market Percent
(common and preferred stocks and convertible Principal Value of Net
debentures) Amount (Millions) Assets
- ------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
BANKING- 14.36%
Australia and New Zealand Banking Group Ltd. (Australia) 12571382 $82.551 1.61
First Union Corp. (USA) 752500 57.472 1.12
Royal Bank of Canada (Canada) 1,509,200 55.762 1.08
Bank of New York Co., Inc. (USA) 1540000 55.248 1.07
ABN AMRO Holding NV (Netherlands) 711279 46.042 .90
Barclays PLC (United Kingdom) 2450000 42.152 .82
Chase Manhattan Corp. (USA) 300000 28.350 .55
Cie. de Suez (France) 635000 27.178 .53
First Chicago NBD Corp. (USA) 452500 26.584 .52
Westpac Banking Corp. (Australia) 4025164 24.073 .47
Grupo Financiero Banamex Accival, SA de CV, Class B .00
(Mexico) /1/ 2993000 5.906
Grupo Financiero Banamex Accival, SA de CV, Class L /1/ 509000 .924
Banco Nacional de Mexico, S.A. 11.00% convertible .00
debentures 2003 $15,000,000 15.375 .43
HSBC Holdings PLC (United Kingdom) 1050000 21.865 .43
Banc One Corp. (USA) 440000 20.955 .41
Bank of Scotland (United Kingdom) 4200000 20.686 .40
Istituto Mobiliare Italiano SpA (American Depositary .00
Receipts) (Italy) 600000 15.600
Istituto Mobiliare Italiano SpA 500000 4.219 .39
Credit Commercial de France (France) 379931 18.407 .36
Safra Republic Holdings SA (Luxembourg) 133000 18.288 .36
Advance Bank Australia Ltd. (Australia) 2959755 16.690 .32
Banco de Santander, SA (Spain) 211800 11.473
Banco de Santander, SA (American Depositary Receipts) 88200 4.807 .31
National Bank of Canada (Canada) 1500000 16.009 .31
National Australia Bank Ltd. (Australia) 1,269,071 15.799 .31
Bank of Philippine Islands (Philippines) 2364000 14.841 .29
Wilmington Trust Corp. (USA) 300000 12.225 .24
Allied Irish Banks, PLC (Ireland) 1730000 11.385 .22
Cie. Financiere de Paribas, Class A (France) 150,000 10.309 .20
Bangkok Bank PCL., 3.25% convertible .00
debentures 2004 (Thailand) $9,000,000 9.288 .18
Svenska Handelsbanken Group, Class A (Sweden) 325000 8.913 .17
Svenska Handelsbanken Group, Class B 21900 .578
J.P. Morgan & Co. Inc. (USA) 80000 7.550 .16
MBL International Finance, 3.00% convertible debentures .00
2002 (Bermuda) $3,800,000 4.211 .08
CS Holding Group (Switzerland) 32,500 3.461 .07
Banca Popolare di Bergamo-Credito Varesino S.C.r.l., .00
7.40% convertible debentures 2000 (Italy) /2/ Lr2,277,775 1.621
Banca Popolare di Bergamo-Credito Varesino S.C.r.l., .05
7.50% convertible debentures 1999 Lr1,000,000 .856
Banca Popolare di Bergamo-Credito Varesino S.C.r.l., .00
warrants, expire 2000 /1/ 455555 .147 .00
.00
TELECOMMUNICATIONS- 9.38%
Telecom Corp. of New Zealand Ltd. (New Zealand) 8380000 44.156
Telecom Corp. of New Zealand Ltd. (American Depositary .00
Receipts) 331000 27.845
Telecom Corp. of New Zealand Ltd. /3/ 4048000 21.330 1.82
Portugal Telecom, SA (Portugal) 2737600 72.627 1.41
Koninklijke PTT Nederland NV (Netherlands) 1512800 56.634 1.10
Hong Kong Telecommunications Ltd. (Hong Kong) 27689285 47.990 .93
STET-Societa Finanziaria Telefonica p.a., nonconvertible .00
savings shares (Italy) 7275000 22.380
STET-Societa Finanziaria Telefonica p.a. 3890000 16.563 .76
Tele Danmark AS, Class B (American Depositary Receipts) .00
(Denmark) 924100 23.102
Tele Danmark AS, Class B 82500 4.115 .53
Telecom Italia SpA (Italy) 13610400 25.027
Telecom Italia SpA, savings shares 357800 .837 .51
Telecomunicacoes Brasileiras SA, preferred nominative .00
(American Depositary Receipts) (Brazil) 249000 18.862 .37
Telefonos de Mexico, SA de CV, Class L (American .00
Depositary Receipts) (Mexico) 582300 17.687 .34
U S WEST Communications Group (USA) 500000 15.625 .30
British Telecommunications PLC (United Kingdom) 2000000 12.658 .25
International CableTel Inc., 7.25% convertible .00
debentures 2005 (USA) /3/ $11,000,000 11.907 .23
MFS Communications Co., Inc., 8.00% DECS convertible .00
preferred shares (USA) 130000 10.676 .21
Telefonica de Espana, SA (Spain) 450000 9.861 .19
SmarTone Telecommunications Holdings Ltd. (Incorporated
in Bermuda) /3/ 4000000 8.123 .16
Telecom Italia Mobile SpA, ordinary shares (Italy) 2224200 5.207 .10
Bell Atlantic Corp. (USA) 75000 4.716 .09
AirTouch Communications (USA) /1/ 117820 3.019 .06
ALLTEL Corp. (USA) 36100 1.151 .02
.00
MULTI-INDUSTRY- 7.16%
Imasco Ltd. (Canada) 2,036,200 50.558 .98
Hutchison Whampoa Ltd. (Hong Kong) 5,990,000 46.291 .90
Incentive AB, Class B (Sweden) 580,000 38.471 .75
B. A. T. Industries PLC (United Kingdom) 4766000 38.015 .74
Brierley Investments Ltd. (New Zealand) 26,098,186 23.384
Brierley Investments Ltd., $0.85 convertible preferred .00
shares 4025000 3.492 .52
Orkla AS, Class B (Norway) 351,000 21.389
Orkla AS, Class A 71,000 4.730 .51
U.S. Industries, Inc. (USA) /1/ 623157 18.383 .36
Williams Holdings PLC (United Kingdom) 3000000 17.197 .33
Ayala Corp., 3.00% convertible debentures 2000 .00
(Philippines) $10,000,000 13.400 .26
Industriforvaltnings AB Kinnevik, Class B (Sweden) 468,750 13.135 .26
Lend Lease Corp. Ltd. (Australia) 703632 13.054 .25
Jardine Strategic Holdings Ltd. (Hong Kong--Incorporated .00
in Bermuda) 3375000 11.745
Jardine Strategic Holdings Ltd., 7.50% convertible .00
debentures 2049 $181,000 .200 .00
Jardine Strategic Holdings Ltd., warrants, expire 1998 /1/ 375,000 .139 .24
Canadian Pacific Ltd. (Canada) 400000 11.000 .21
Groupe Bruxelles Lambert SA (Belgium) 63,000 7.991 .16
Tenneco Inc. (USA) 150,000 7.650 .15
Textron Inc. (USA) 75000 7.153 .14
Harsco Corp. (USA) 100,000 6.975 .14
Cie. Nationale a Portefeuille (Belgium) 100000 6.121
Cie. Nationale a Portefeuille, warrants, .00
expire 1999 /1/ 150000 .265 .12
LTV Corp. (USA) 500,000 5.375 .10
Preussag AG (Germany) 8,000 1.878
Preussag AG, warrants, expire 2001 /1/ 3,100 .090 .04
.00
HEALTH & PERSONAL CARE- 4.45% .00
AB Astra, Class A (Sweden) 800000 38.396
AB Astra, Class B 500000 23.513 1.20
Glaxo Wellcome PLC (United Kingdom) 2000000 33.109 .64
Merck & Co., Inc. (USA) 385000 31.955 .62
Eli Lilly and Co. (USA) 400000 30.600 .60
American Home Products Corp. (USA) 442,000 28.399 .55
Bristol-Myers Squibb Co. (USA) 175000 19.906 .39
Warner-Lambert Co. (USA) 150000 10.725 .21
Sandoz Ltd., 2.00% convertible debentures 2002 .00
(Switzerland) /1/ $7,500,000 8.524 .17
Abbott Laboratories (USA) 50000 2.788 .05
Baxter International Inc. (USA) 30000 1.275 .02
Allegiance Corp. (USA) 6000 .136 .00
.00
ENERGY SOURCES- 3.96% .00
Repsol SA (American Depositary Receipts) (Spain) 1,275,000 46.697
Repsol SA 100,000 3.700 .98
"Shell" Transport and Trading Co., PLC (New York .00
Registered Shares) (United Kingdom) 175,000 17.456
Royal Dutch Petroleum Co. (Netherlands) 35000 5.898
Royal Dutch Petroleum Co. (New York Registered Shares) 20,000 3.398 .52
TOTAL, Class B (France) 324,487 25.955 .51
Phillips Petroleum Co. (USA) 475,000 21.434 .42
Unocal Corp. (USA) 520000 21.190 .41
MESA Inc., 8.00% convertible preferred, Series A (USA) /4/ 1,611,327 9.668
MESA Inc. /1/ 1,600,000 8.200 .35
YPF SA, Class D (American Depositary Receipts) .00
(Argentina) 450,000 10.463 .20
Esso SA Francaise (France) 78567 8.410 .16
Engen Ltd. (South Africa) 1176000 6.199 .12
Occidental Petroleum Corp. (USA) 250000 6.000 .12
ENI SpA (American Depositary Shares) (Italy) 100000 5.250 .10
Burmah Castrol PLC (United Kingdom) 206343 3.642 .07
.00
UTILITIES: ELECTRIC & GAS- 3.74%
National Power PLC (United Kingom) 6160000 47.840 .93
Columbia Gas System, Inc. (USA) 535700 34.619 .67
Southern Electric PLC (United Kingdom) 2,050,100 24.175 .47
Scottish Power PLC (United Kingdom) 3066250 17.422 .34
Sonat Inc. (USA) 313000 16.198 .32
Hongkong Electric Holdings Ltd. (Hong Kong) 4073500 13.066 .25
Enersis SA (American Depositary Receipts) (Chile) 378100 10.681 .21
British Gas PLC (American Depositary Receipts) .00
(United Kingdom) 150000 5.569
British Gas PLC 900000 3.306 .17
Australian Gas Light Co. (Australia) 1133367 6.317 .12
GPU Inc. (Formerly General Public Utilities Corp.) (USA) 150000 5.044 .10
Hong Kong and China Gas Co. Ltd. (Hong Kong) 2371144 4.708 .09
National Grid Group PLC (United Kingdom) 1080000 3.549 .07
.00
FOOD & HOUSEHOLD PRODUCTS- 3.67% .00
Cadbury Schweppes PLC (United Kingdom) 6036120 51.900 1.01
Reckitt & Colman PLC (United Kingdom) 3371312 39.727 .77
Unilever PLC (United Kingdom) 650000 15.319
Unilever NV (Netherlands) 30000 5.188 .40
Dalgety PLC (United Kingdom) 3350000 18.724 .36
Cultor Ltd. (Finland) 390000 18.601 .36
Groupe Danone (France) 76480 11.263 .22
Colgate-Palmolive Co. (USA) 100000 9.262 .18
Nestle SA (Switzerland) 8452 9.178 .18
McCormick & Co. (USA) 205000 5.048 .10
Uni-Charm Corp. (Japan) 189000 4.566 .09
.00
BUSINESS & PUBLIC SERVICES- 3.63% .00
United Utilities PLC (United Kingdom) 3886428 38.545 .75
PacifiCare Health Systems, Inc., Class A (USA) /1/ 200000 15.800
PacifiCare Health Systems, Inc., Class B /1/ 125000 10.375 .51
Brambles Industries Ltd. (Australia) 1296000 22.673 .44
Electronic Data Systems Corp. (Formerly General Motors, Class E)
(USA) 300000 14.513 .28
Autopistas del Mare Nostrum, SA Concesionaria del Estado .00
(Spain) 850,000 13.084 .25
American Water Works Co., Inc. (USA) 600,000 11.850 .23
Quintiles Transnational Corp., 4.25% convertible .00
debentures 2000 (USA) /3/ $10,000,000 9.925 .19
Alco Standard Corp. (USA) 160000 8.280 .16
Hyder PLC (United Kingdom) 625000 7.785 .15
Hutchison Delta Finance Ltd., 7.00% convertible .00
debentures 2002 (Hong Kong--Incorporated in Cayman .00
Islands) /3/ $6,000,000 6.696 .13
Vanstar Financing Trust, 6.75% convertible preferred (USA) /3/ 108000 6.102 .12
Omnicom Group Inc. (USA) 100000 5.100 .10
Thorn PLC (United Kingdom) 1009470 4.700 .09
WMX Technologies, Inc. (USA) 125000 4.500 .09
Thames Water PLC (United Kingdom) 441994 4.291 .08
Cie. Generale des Eaux (France) 25490 3.144 .06
.00
INSURANCE- 3.50% .00
ING Groep NV (Netherlands) 3324635 116.370
ING Groep NV, warrants, .00
expire 2001 /1/ 2000000 13.688 2.53
National Mutual Asia Ltd. (Hong Kong) 22008000 20.068 .39
GIO Australia Holdings Ltd. (Australia) 5851530 15.998 .31
Allstate Corp. (USA) 150000 9.038 .18
Prudential Corp. PLC (United Kingdom) 406576 3.332 .06
Yasuda Fire and Marine Insurance Co., Ltd. (Japan) 250000 1.583 .03
.00
.00
METALS: NONFERROUS- 2.76% .00
Aluminum Co. of America (USA) 595000 37.857 .74
Inco Ltd. (Canada) 785000 27.377 .53
Pechiney, Class A (France) 675400 27.174 .53
Teck Corp., 3.75% convertible debentures 2006 (Canada) $14,950,000 17.585 .34
Freeport-McMoRan Copper & Gold Inc., Class A (USA) 500,000 14.937 .29
Noranda Inc. (Canada) 525,000 12.413 .24
Phelps Dodge Corp. (USA) 40200 2.919 .06
Indian Aluminium Co. Ltd. (Global Depositary Receipts) .00
(India) 411800 1.441 .03
.00
BEVERAGES & TOBACCO- 2.76% .00
Philip Morris Companies Inc. (USA) 500000 51.563 1.01
RJR Nabisco Holdings Corp. (USA) 1000000 32.000 .62
Seagram Co. Ltd. (Canada) 670000 27.386 .53
Lion Nathan Ltd. (New Zealand) 5000000 12.835 .25
Coca-Cola Amatil Ltd. (Australia) 993708 11.223 .22
UST Inc. (USA) 200000 6.525 .13
.00
FOREST PRODUCTS & PAPER- 2.75%
James River Corp. of Virginia, $1.55 DECS convertible .00
preferred shares (USA) 450000 13.613
James River Corp. of Virginia 350000 11.200 .48
Champion International Corp. (USA) 530000 22.790 .44
Sonoco Products Co. (USA) 735000 20.029 .39
Jefferson Smurfit Corp. (USA) /1/ 1332300 17.986 .35
Union Camp Corp. (USA) 300000 14.738 .29
Bowater Inc. (USA) 320000 12.040 .23
UPM-Kymmene Corp. (Finland) /1/ 324100 6.492
Kymmene Corp., 8.25% convertible debentures 2043 FM18,000,000 4.429 .22
N.V. Koninklijke KNP BT (Netherlands) 400000 9.110 .18
MAYR-MELNHOF Karton AG (Austria) /1/ 145000 6.967 .13
Carter Holt Harvey Ltd. (New Zealand) 616770 1.421 .03
Fletcher Challenge Paper (New Zealand) 254050 .455 .01
.00
AUTOMOBILES- 2.68% .00
Daimler-Benz AG, 4.125% convertible debentures, .00
consisting of bonds with undetachable warrants, 2003 /3/ DM60,000,000 45.171 .88
Ford Motor Co., Class A (USA) 750,000 24.562 .48
Regie Nationale des Usines Renault, SA (France) 949,079 22.537 .44
Bayerische Motoren Werke AG (Germany) 22000 14.266
Bayerische Motoren Werke AG, preferred shares 10,254 4.695 .37
Chrysler Corp. (USA) 400,000 14.200 .28
Toyota Motor Corp. (Japan) 435000 11.884 .23
.00
CHEMICALS- 2.66% .00
Praxair, Inc. (USA) 992500 48.260 .94
Airgas, Inc. (USA) /1/ 1686100 43.417 .85
Sherwin-Williams Co.(USA) 436000 24.743 .48
L'Air Liquide (France) 50599 8.071 .16
AGA AB, Class B (Sweden) 300000 4.583 .09
DSM NV (Netherlands) 30000 2.903 .06
BASF AG (Germany) 62500 2.313 .05
Akzo Nobel NV (Netherlands) 10200 1.353 .03
MERCHANDISING- 2.30% .00
Tesco PLC (United Kingdom) 7,322,963 41.915 .82
Wal-Mart Stores, Inc. (USA) 1096000 27.948 .54
Amway Japan Ltd. (Japan) 179,000 6.651
AJL PEPS Trust, $1.44 convertible preferred shares 465,000 8.370 .29
J.C. Penney Co., Inc. (USA) 160000 8.600 .17
Duty Free International, Inc. (USA) 470,000 7.403 .14
Staples, Inc., 4.50% convertible debentures 2000 (USA) /3/ $6,000,000 6.510 .13
Giant Food Inc., Class A (USA) 150,000 5.063 .10
Woolworths Ltd. (Australia) 1218696 3.034 .06
WHSmith Group PLC (United Kingdom) 350000 2.489 .05
.00
MACHINERY & ENGINEERING- 1.92% .00
Mannesmann AG (Germany) 120075 50.100 .97
Caterpillar Inc. (USA) 245000 19.386 .38
Kawasaki Heavy Industries, Ltd. (Japan) 2100000 9.629 .19
Triplex Lloyd PLC (United Kingdom) 2465963 8.622 .17
Daewoo Heavy Industries Ltd. (South Korea) 900000 6.200 .12
Zardoya Otis, SA (Spain) 23731 2.527 .05
Bombardier Inc., Class B (Canada) 121100 2.154 .04
Scania AB, Class B, warrants, expire 1999 (Sweden) /1/ 160000 .141 .00
.00
GOLD MINES- 1.49% .00
Normandy Mining Ltd. (Australia) 15228436 20.446
Normandy Mining Ltd., options, expire 2001 /1/ 4875799 1.746 .43
Barrick Gold Corp. (Canada) 650000 19.500 .38
Driefontein Consolidated Ltd. (South Africa) 1200000 13.666 .27
Kloof Gold Mining Co. Ltd. (South Africa) 1500000 12.299 .24
Newcrest Mining Ltd. (Australia) 2393325 8.764 .17
.00
INDUSTRIAL COMPONENTS- 1.32% .00
Federal-Mogul Corp. (USA) 800,000 17.800 .35
Morgan Crucible Co. PLC (United Kingdom) 2119487 16.282 .32
Lear Corp. (USA) /1/ 352300 12.639 .25
Goodyear Tire & Rubber Co. (USA) 256900 12.460 .24
BICC PLC (United Kingdom) 750000 3.549 .07
Cie. Generale des Etablissements Michelin, Class B .00
(France) 50000 2.565
Cie. Generale des Etablissements Michelin, $2.50 .00
convertible preferred shares 3333 .191 .05
AB SKF, Class B (Sweden) 100,000 2.124 .04
.00
FINANCIAL SERVICES- 1.29% .00
Federal Home Loan Mortgage Corp.(USA) 175000 19.994 .39
Household International, Inc. (USA) 175000 16.581 .32
Associates First Capital Corp., Class A (USA) 310000 14.996 .29
Federal National Mortgage Assn. (USA) 200000 8.250 .16
United Companies Financial Corp., 6.75% PRIDES .00
convertible preferred shares (USA) 75000 4.031 .08
Beneficial Corp. (USA) 40000 2.485 .05
.00
BROADCASTING & PUBLISHING- 1.26% .00
Time Warner Inc. (USA) 450,000 18.337 .36
CANAL (France) 60949 13.983 .27
Viacom Inc., Class B (USA) /1/ 275000 10.381 .20
CanWest Global Communications Corp. (Canada) 741300 7.610 .15
Tele-Communications, Inc., Series A, Liberty Media Group .00
(USA) /1/ 265000 6.625 .13
News Corp., preferred (Australia) 1339935 5.888 .11
TeleWest Communications PLC (American Depositary .00
Receipts) (United Kingdom) /1/ 71000 1.420 .03
Elsevier NV (Netherlands) 37500 .639 .01
.00
ENERGY EQUIPMENT- 1.11% .00
Schlumberger Ltd. (Netherlands Antilles) 405000 42.120 .82
Halliburton Co. (USA) 250000 15.063 .29
.00
MISCELLANEOUS MATERIALS & COMMODITIES- 1.10% .00
English China Clays PLC (United Kingdom) 6891000 20.735 .40
Cie. de Saint-Gobain (France) 109195 15.704 .31
Crown Cork & Seal Co., Inc. (USA) 275000 14.575 .28
TRINOVA Corp. (USA) 150000 5.475 .11
.00
ELECTRICAL & ELECTRONIC- 1.03% .00
Siemens AG, 1.00% convertible debentures 2001 (Germany) DM25,000,000 14.187
Siemens AG 150000 7.229 .42
Alcatel Alsthom (France) 127043 11.551 .22
Northern Telecom Ltd. (Canada) 100000 6.575 .13
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 147400 4.548 .09
ABB AG, Class A (Switzerland) 3500 4.381 .09
Lucent Technologies Inc. (USA) 85000 4.356 .08
TRANSPORTATION: RAIL & ROAD- 0.86% .00
TNT Ltd., convertible preferred shares (Australia) 9,043,900 17.956
TNT Ltd. /1/ 524,862 1.034 .37
Railtrack Group PLC (United Kingdom) 2,500,000 15.381 .30
Canadian National Railway System (Canada) 236,200 9.714 .19
.00
.00
REAL ESTATE- 0.62% .00
Sun Hung Kai Properties Ltd. (Hong Kong) 1400000 17.383 .34
SM Prime Holdings, Inc. (Philippines) 45770000 10.971 .21
Westfield Trust (Australia) 1672997 3.376 .07
.00
LEISURE & TOURISM- 0.51% .00
Village Roadshow Ltd., Class A preferred shares
(Australia) /3/ 2500000 7.222 .00
Village Roadshow Ltd., Class A preferred shares 2018592 5.831 .25
ITT Corp. (USA) /1/ 246400 11.365 .22
Euro Disney SCA, 6.75% convertible debentures 2001 .00
(France) FF10,000,000 2.043 .04
RECREATION & OTHER CONSUMER PRODUCTS- 0.33% .00
EMI Group PLC (United Kingdom) 291,704 6.730 .13
Fuji Photo Film Co., Ltd. (Japan) 200000 6.272 .12
Hasbro, Inc. (USA) 103200 4.244 .08
.00
METALS: STEEL- 0.32% .00
Usinor Sacilor (France) 850000 12.721 .25
N.T.S. Steel Group PCL., 4.00% Eurobond,
2008 (Thailand) $6,670,000 1.934 .04
Nippon Denro Ispat Ltd., 3.00% convertible debentures .00
2001 (India) $2,800,000 1.470 .03
TRANSPORTATION: SHIPPING- 0.29% .00
Teekay Shipping Corp. (Bahamas) 416700 12.501 .24
Shun Tak Holdings Ltd. (Hong Kong) 3708471 2.590 .05
.00
CONSTRUCTION & HOUSING- 0.28% .00
Philipp Holzmann AG (Germany) /1/ 60000 14.634 .28
.00
TRANSPORTATION: AIRLINES- 0.27% .00
Air New Zealand Ltd., Class B (New Zealand) 5,320,000 13.997 .27
WHOLESALE & INTERNATIONAL TRADE- 0.27% .00
Mitsubishi Corp. (Japan) 1180000 13.682 .27
.00
ELECTRONIC COMPONENTS- 0.26% .00
Quantum Corp., 5.00% convertible debentures 2003 (USA) /3/ $10,000,000 13.350 .26
APPLIANCES & HOUSEHOLD DURABLES- 0.25% .00
AB Electrolux, Class B (Sweden) 100000 5.865 .11
Sony Corp. (Japan) 75000 4.803 .09
SANYO Electric Co., Ltd. (Japan) 534000 2.500 .05
.00
TEXTILES & APPAREL- 0.13% .00
Courtaulds Textiles PLC (United Kingdom) 1641500 6.898 .13
ELECTRONIC INSTRUMENTS- 0.08% .00
ThermoQuest Corp., 5.00% convertible debentures 2000 .00
(USA) /3/ $3,750,000 3.900 .08
BUILDING MATERIALS & COMPONENTS- 0.01% .00
Fletcher Challenge Building (New Zealand) 127,025 .357 .01
.00
MISCELLANEOUS- 4.26% .00
Other equity-type securities in initial .00
period of acquisition 218.942 4.26
-------- --------
TOTAL EQUITY-TYPE SECURITIES (cost:
$3,492.440 million) 4,575.196 89.02
-------- --------
- ------------------------------------------ -------------
Principal
Amount
Bonds and Notes (Millions)
- ------------------------------------------ -------------
INDUSTRIALS- 0.61%
Container Corp. of America 11.25% May 2004 $6,000 6.480
Container Corp. of America 9.75% April 2003 1.000 1.043 .14
Mesa Operating Co. 10.625% July 2006 4.000 4.320
Mesa Operating Co. 11.625% July 2006 3.500 2.362 .13
Telecom Argentina STET-France Telecom SA 12.00%
November 2002 5.500 6.064 .12
Fort Howard Corp. 8.25% February 2002 4.500 4.511 .09
Multicanal Participacoes SA 12.625% June 2004 /3/ 2.250 2.424 .05
AB SKF 7.625% July 2003 2.000 2.115 .04
Bufete Industrial, SA Eurobond 11.375% July 1999 1.805 1.893 .04
ARGENTINEAN GOVERNMENT- 0.64%
Argentina Eurobond 6.625% March 2005 /2/ 29.645 25.606 .50
Argentina (Republic of) 11.00% October 2006 7.000 7.324 .14
SOUTH AFRICAN GOVERNMENT- 0.42%
South Africa 13.00% August 2010 ZAR120.000 21.605 .42
CANADIAN GOVERNMENT- 0.20%
Canada 6.25% February 1998 C$13.200 10.112 .20
-------- --------
TOTAL BONDS AND NOTES (cost: $90.961 million) 95.859 1.87
-------- --------
- ------------------------------------------ ------------- ------------- -------------
Short-Term Securities
- ------------------------------------------ ------------- ------------- -------------
CORPORATE SHORT-TERM NOTES- 7.12%
Siemens Capital Corp. 5.26%-5.30% due 1/14-2/7/97 54.000 53.555 1.04
Daimler-Benz North America Corp. 5.24%-5.32% .00
due 12/3/96-2/6/97 52.400 52.223 1.02
Sandoz Corp. 5.27%-5.30% due 12/16/96-1/31/97 42.050 41.785 .81
Svenska Handelsbanken Group 5.29%-5.31% due 1/9-1/27/97 37.000 36.716 .71
ABN AMRO North America Finance Inc. 5.29%-5.43%
due 12/3/96-1/21/97 31.900 31.791 .62
Toyota Motor Credit Corp. 5.27%-5.35% due 12/16/96-1/16/97 29.950 29.828 .58
Barclays U.S. Funding Corp. 5.29% due 1/16-2/13/97 28.800 28.494 .55
Canada Bills 5.23%-5.40% due 12/3-12/9/96 26.100 26.074 .51
Gaz de France 5.30% due 1/15/97 25.000 24.830 .48
H.J. Heinz Co. 5.25%-5.27% due 12/4/96-1/2/97 19.600 19.516 .38
Dresdner U.S. Finance Inc. 5.25%-5.30% due 12/5/96-1/6/97 11.000 10.954 .21
Caisse D'Amortissement de La Dette Sociale 5.25% .00
due 12/9/96 10.600 10.586 .21
FEDERAL AGENCY DISCOUNT NOTES- 1.40%
Federal Home Loan Mortgage Corp. 5.195%-5.215% due
12/11-12/20/96 41.000 40.910 .80
Federal Home Loan Bank 5.30% due 12/26/96 30.800 30.682 .60
-------- --------
TOTAL SHORT-TERM SECURITIES (cost: $437.952
million) 437.944 8.52
-------- ------
TOTAL INVESTMENT SECURITIES (cost: $4,021.353
million) 5,108.999 99.41
Excess of cash and receivables over payables 30.486 .59
-------- ------
NET ASSETS $5,139.485 100.00
======================================================== ============ ==========
/1/ Non-income-producing securities.
/2/ Coupon rates may change periodically.
/3/ Purchased in a private placement
transaction; resale to the public may
require registration or sale only
to qualified institutional buyers.
/4/ The issuer has the option of
paying additional securities in lieu of cash.
See Notes to Financial Statements
</TABLE>
<TABLE>
Equity-Type Securities Added Equity-Type Securities Eliminated
to the Portfolio Since May 31, 1996 from the Portfolio Since May 31, 1996
<S> <C>
Banco Nacional de Mexico Advanced Micro Devices
Bank of Scotland American Brands
Bank of the Philippine Islands Atlas Copco
British Telecommunications Autopistas, Concesionaria Espanola
Chrysler Banco Popular Espanol
Crown Cork & Seal Bausch & Lomb
Daewoo Heavy Industries Boatmen's Bancshares
Daimler-Benz British Airways
Federal Home Loan Mortgage China Light & Power
Freeport-McMoRan Copper & Gold CSX
Halliburton Fletcher Challenge Energy
HSBC Holdings Hanson
ITT Havas
Koninklijke KNP BT Hazlewood Foods
Lear Home Depot
MESA Industrivarden
Newcrest Mining Inland Steel Industries
N.T.S. Steel Group Investor
Philipp Holzmann Land Securities
SmarTone Telecommunications Holdings National City
SM Prime Holdings National Westminster Bank
Sonat NationsBank
Time Warner Nordbanken
Vanstar Financing Trust North American Vaccine
Williams Holdings Pacific Telesis
Porsche
Southern Water
Stadshypotek
Sumitomo Bank
Tai Cheung Holdings
Telefonica de Argentina
Toys 'R' Us
Union des Assurances Federales
Whirlpool
</TABLE>
<TABLE>
Capital World Growth and Income Fund, Inc.
Financial Statements
- ---------------------------------------- ---------- ----------
Statement of Assets and Liabilities (dollars in
at November 30, 1996 millions)
- ----------------------------------------- ---------- ----------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $4,021.353) $5,108.999
Cash 3.149
Receivables for--
Sales of investments $19.650
Sales of fund's shares 11.095
Dividends and accrued interest 17.496 48.241
---------- ----------
5,160.389
Liabilities:
Payables for--
Purchases of investments 12.724
Repurchases of fund's shares 3.320
Management services 1.823
Accrued expenses 3.037 20.904
---------- ----------
Net Assets at November 30, 1996--
Equivalent to $23.77 per share on
216,242,143 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $5,139.485
==========
---------
Statement of Operations (dollars in
for the year ended November 30, 1996 millions)
- --------------------------------------------- ---------- ----------
Investment Income:
Income:
Dividends $136.224
Interest 40.235 $176.459
---------
Expenses:
Management services fee 19.343
Distribution expenses 9.567
Transfer agent fee 3.781
Reports to shareholders .439
Registration statement and prospectus .386
Postage, stationery and supplies .679
Directors' fees .118
Auditing and legal fees .056
Custodian fee 1.707
Taxes other than federal income tax .119
Other expenses .088 36.283
---------- ----------
Net investment income 140.176
----------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 207.627
Net increase in unrealized appreciation on investments 584.880
Net realized gain and increase in unrealized ----------
appreciation on investments 792.507
----------
Net Increase in Net Assets Resulting
from Operations $932.683
==========
- ---------------------------------------------- ---------- ----------
Year ended
Statement of Changes in Net Assets November 30
(dollars in millions) 1996 1995
- ---------------------------------------------- ---------- ----------
Operations:
Net investment income $ 140.176 $ 102.914
Net realized gain on investments 207.627 63.160
Net increase in unrealized appreciation
on investments 584.880 396.914
---------- ----------
Net increase in net assets
resulting from operations 932.683 562.988
---------- ----------
Dividends and Distributions Paid to Shareholders:
Dividends from net investment income (138.616) (104.776)
Distributions from net realized gain on investment (64.705) (45.496)
---------- ----------
Total dividends and distributions (203.321) (150.272)
Capital Share Transactions:
Proceeds from shares sold: 48,019,573
and 34,635,645 shares, respectively 1,027.076 647.812
Proceeds from shares issued in reinvestment
of net investment income dividends and distributions
of net realized gain on investments:
9,172,617 and 7,787,809 shares, respectively 190.709 141.079
Cost of shares repurchased: 19,581,034
and 20,156,313 shares, respectively (418.893) (374.730)
---------- ----------
Net increase in net assets
resulting from capital share
transactions 798.892 414.161
---------- ----------
Total Increase in Net Assets 1,528.254 826.877
Net Assets:
Beginning of year 3,611.231 2,784.354
---------- ----------
End of year (including undistributed
net investment income: $22.074
and $16.988, respectively) $5,139.485 $3,611.231
========== =========
See Notes to Financial Statements
</TABLE>
1. Capital World Growth and Income Fund, Inc. (the "fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks long-term capital growth while providing
current income. 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.
Bonds and notes are valued at prices obtained from a bond- pricing service
provided by a major dealer in bonds, when such prices are available; however,
in circumstances where the investment adviser deems it appropriate to do so,
such securities will be valued at the mean of their representative quoted bid
and asked prices or, if such prices are not available, at prices for securities
of comparable maturity, quality, and type. Securities denominated in non-U.S.
currencies are generally valued on the basis of bid quotations.
Securities for which market quotations are not readily available are
valued at fair value by the Board of Directors or a committee thereof.
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.
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 effects of
changes in foreign currency exchange rates on investment securities are
included with the net realized and unrealized gain or loss on investment
securities.
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 $1,707,000 includes $36,000 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 November 30, 1996, net unrealized appreciation on investments for
federal income tax purposes aggregated $1,087,646,000, of which $1,202,899,000
related to appreciated securities and $115,253,000 related to depreciated
securities. During the year ended November 30, 1996, the fund realized, on a
tax basis, a net capital gain of $201,370,000 on securities transactions. Net
gains related to non-U.S. currency and passive foreign investment company
transactions of $6,257,000 were treated as adjustments to ordinary income for
federal income tax purposes. The cost of portfolio securities for book and
federal income tax purposes was $4,021,353,000 at November 30, 1996.
3. The fee of $19,343,000 for management services was paid pursuant to an
agreement with 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 0.60% of the first $500 million
of average net assets; 0.50% of such assets in excess of $500 million but not
exceeding $1.0 billion; 0.46% of such assets in excess of $1.0 billion but not
exceeding $1.5 billion; 0.43% of such assets in excess of $1.5 billion but not
exceeding $2.5 billion; 0.41% of such assets in excess of $2.5 billion but not
exceeding $4.0 billion; 0.40% of such assets in excess of $4.0 billion but not
exceeding $6.5 billion; and 0.395% of such assets in excess of $6.5 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 November 30, 1996,
distribution expenses under the Plan were $9,567,000. As of November 30, 1996,
accrued and unpaid distribution expenses were $2,443,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $3,781,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $4,496,000 (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 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 November 30,
1996, aggregate amounts deferred and earnings thereon were $149,000.
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 November 30, 1996, accumulated undistributed net realized gain on
investments was $196,920,000 and additional paid-in capital was $3,825,787,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,809,496,000 and $1,169,222,000, respectively,
during the year ended November 30, 1996.
Dividend and interest income is recorded net of non-U.S. taxes paid. For
the year ended November 30, 1996, such non-U.S. taxes were $14,765,000. Net
realized currency gains on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $4,097,000 for the year ended
November 30, 1996.
To conform to its tax reporting, the fund reclassified $1,366,000 from
undistributed currency gains to undistributed net realized gains and $3,526,000
from undistributed net realized gains to undistributed net investment income
for the year ended November 30, 1996.
<TABLE>
Per-Share Data and Ratios Period
Year ended November 30 3/26/93 /1/
1996 1995 1994 to 11/30/93
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $20.22 $17.81 $17.00 $15.08
---------- ---------- ---------- ----------
Income From Investment Operations:
Net investment income .70 .61 .52 .29
Net realized and unrealized gain on investments 3.91 2.72 .75 1.86
---------- ---------- ---------- ----------
Total income from investment operations 4.61 3.33 1.27 2.15
---------- ---------- ---------- ----------
Less Distributions:
Dividends from net investment income (.72) /2/ (.63) (.46) (.23)
Distributions from net realized gains (.34) (.29) -- --
---------- ---------- ---------- ----------
Total distributions (1.06) (.92) (.46) (.23)
---------- ---------- ---------- ----------
Net Asset Value, End of Period $23.77 $20.22 $17.81 $17.00
========== ========== ========== ==========
Total Return /3/ 23.67% 19.41% 7.51% 14.39% /4/
Ratios/Supplemental Data:
Net assets, end of period (in millions) $5,139 $3,611 $2,784 $1,521
Ratio of expenses to average net assets .85% .88% .87% .62% /4/
Ratio of net income to average net assets 3.28% 3.24% 3.11% 2.01% /4/
Average commissions paid per share /5/ .25 cents 1.94 cents 1.24 cents 1.31 cents
Portfolio turnover rate 30.18% 25.50% 18.66% 2.71% /4/
/1/Commencement of operations
/2/ Includes 1.5 cents realized non-U.S. currency gains treated as ordinary income for federal income tax
purposes.
/3/ Calculated without deducting a sales charge. The maximum sales charge is 5.75% of the fund's
offering price.
/4/ Based on operations for the period shown and, accordingly, not representative of a full year's
operations.
/5/ Brokerage commissions paid on portfolio transactions increase the cost of securities
purchased or reduce the proceeds of securities sold and are not reflected in the fund's
statement of operations. Shares traded on a principal basis (without commissions) are excluded.
Generally, non-U.S. commissions are lower than U.S. commissions when expressed as cents per
share but higher when expressed as a percentage of transactions because of the lower per-share
prices of many non-U.S. securities.
</TABLE>
Report of Independent Accountants
To the Board of Directors and Shareholders of Capital World Growth and Income
Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of Capital World Growth and Income
Fund, Inc. (the "Fund") at November 30, 1996, the results of its operations,
the changes in its net assets and the per-share data and ratios for the periods
indicated in conformity with generally accepted accounting principles. These
financial statements and per-share data and ratios (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at November 30, 1996 by correspondence with the custodian and
brokers and the application of alternative auditing procedures where
confirmations from brokers were not received, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
Los Angeles, California
December 31, 1996
1996 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. The distributions made during the fiscal year by the
fund were earned from the following sources:
Dividends and Distributions Per Share
To Shareholders of Record
<TABLE>
<CAPTION>
TO PAYMENT FROM NET FROM NET FROM NET
SHAREHOLDERS DATE INVESTMENT REALIZED REALIZED
OF RECORD INCOME SHORT-TERM LONG-TERM
GAINS GAINS
<S> <C> <C> <C> <C>
December 8, 1995 December 11, 1995 $0.14 - $0.270
March 22, 1996 March 25,1996 0.15 $0.032 .038
June 7, 1996 June 10, 1996 0.25 - -
September 26, 1996 September 27, 1996 0.18 - -
</TABLE>
The fund makes an election under the Internal Revenue Code Section 853 to pass
through non-U.S. taxes paid by the fund to its shareholders. The amount of
non-U.S. taxes for the fiscal year ended November 30, 1996 is $0.07723 on a per
share basis. Shareholders are entitled to a foreign tax credit or an itemized
deduction, at their option. Generally, it is more advantageous to claim a
credit rather than to take a deduction.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 16% of the dividends
paid by the fund from net investment income represent 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 OR OTHER
INFORMATION WHICH WILL BE MAILED IN JANUARY 1997 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 1996 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Included in Prospectus - Part A
Financial Highlights
Included in Statement of Additional Information - Part B
As of November 30, 1996:
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
Report of Independent Accountants
(b) Exhibits:
1. On file (see SEC file nos. 811-7338 and 33-54444).
2. On file (see SEC file nos. 811-7338 and 33-54444).
3. None.
4. On file (see SEC file nos. 811-7338 and 33-54444).
5. On file (see SEC file nos. 811-7338 and 33-54444).
6. On file (see SEC file nos. 811-7338 and 33-54444).
7. None.
8. On file (see SEC file nos. 811-7338 and 33-54444).
9. On file (see SEC file nos. 811-7338 and 33-54444).
10. Not applicable to this filing.
11. Consent of Independent Accountants.
12. None.
13. None.
14. On file (see SEC file nos. 811-7338 and 33-54444).
15. On file (see SEC file nos. 811-7338 and 33-54444).
16. On file (see SEC file nos. 811-7338 and 33-54444).
17. EX-27 Financial data schedule.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of December 31, 1996:
<TABLE>
<CAPTION>
<S> <C>
Title of Class Number of Record-Holders
Capital Stock 297,862
($0.01 par value)
</TABLE>
ITEM 27. INDEMNIFICATION.
Registrant is a joint-insured under Investment Advisor/Mutual Fund Errors
and Omissions Policies 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 matter 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 in 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."
The fund will comply with the indemnification requirements contained in
the 1940 Act Releases No. 7221 (June 9, 1972) and No. 11330 (September 4,
1980). In addition, indemnification by the Corporation shall be consistent
with the requirements of rule 484 under the Securities Act of 1933.
Furthermore, the fund has undertaken to the staff of the Securities and
Exchange Commission that the fund's indemnification provisions quoted above
prohibit indemnification for liabilities arising under the Securities Act of
1933 and 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., 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., SMALLCAP World 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 A. Abzug Regional Vice President None
5657 Lemona Avenue
Van Nuys, CA 91411
John A. Agar Regional Vice President None
1501 N. University Drive
Suite 227A
Little Rock, AR 72207
Robert B. Aprison Vice President None
2983 Brynwood Drive
Madison, WI 53711
% Richard Armstrong Assistant Vice President None
* William W. Bagnard Vice President None
Steven L. Barnes Senior Vice President None
8000 Town Line Avenue So.
Suite 204
Minneapolis, MN 55438
Michelle A. Bergeron Vice President None
4160 Gateswalk Drive
Smyrna, GA 30080
Joseph T. Blair Senior Vice President None
27 Drumlin Road
West Simsbury, CT 06092
John A. Blanchard Regional Vice President None
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior 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, 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
609 W. Littleton Blvd. - Suite 310
Littleton, CO 8012o
Christopher J. Cassin Senior Vice President None
111 West Chicago Avenue
Suite G3
Hinsdale, IL 60521
Denise M. Cassin Regional Vice President None
1301 Stoney Creek Drive
San Ramon, CA 94538
* Larry P. Clemmensen Director Senior Vice President
* Kevin G. Clifford Director, Senior Vice None
President
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
4116 Woodbine Street
Chevy Chase, MD 20815
* Carl D. Cutting Vice President None
Dan J. Delianedis Regional Vice President None
8689 Braxton Drive
Eden Prairie, MN 55347
Michael A. Dilella Vice President None
P.O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President None
505 East Main Street
Jenks, OK 74037
Kirk D. Dodge Vice President None
2617 Salisbury Road
3034 Parkridge Drive
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
* 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 Senior 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
David E. Harper Senior Vice President None
R.D. 1, Box 210, Rte. 519
Frenchtown, NJ 08825
Ronald R. Hulsey Vice President None
6744 Avalon
Dallas, TX 75214
Robert S. Irish Regional Vice President None
1225 Vista Del Mar Drive
Delray Beach, FL 33483
* Robert L. Johansen Vice President, Controller None
Michael J. Johnston Chairman of the Board None
630 Fifth Avenue, 36th Floor
New York, NY 10111
V. John 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
1940 Blake Street, Suite 303
Denver, CO 80202
* Lorin E. Liesy Assistant Vice President None
* Susan G. Lindgren Vice President - None
Institutional Investment
Services Division
% Stella Lopez Vice President None
+ Robert W. Lovelace Director None
Stephen A. Malbasa Regional Vice President None
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Vice President None
5241 S. Race Street
Littleton, CO 80121
* John C. Massar Director, Senior Vice President None
* E. Lee McClennahan Senior Vice President None
Laurie B. McCurdy Regional Vice President None
3500 West Camino de Urania
Tucson, AZ 85741
% 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 Vice President None
25701 S.E. 32nd Place
Issaquah, WA 98027
Stephen S. Nelson Vice President None
7215 Trevor Court
Charlotte, NC 28226
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 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 S. Ross Vice President None
55 Madison Avenue
Morristown, NJ 07960
* Julie D. Roth Vice President None
* James F. Rothenberg Director 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
31465 St. Andrews
Westlake, OH 44145
* Daniel B. Seivert Assistant Vice President None
* R. Michael Shanahan Director None
David W. Short Director, Senior Vice President None
1000 RIDC Plaza, Ste. 212
Pittsburgh, PA 15238
William P. Simon, Jr. Vice President None
554 Canterbury Lane
Berwyn, PA 19312
* John C. Smith Assistant Vice President, None
Institutional Investment
Services Division
* Mary E. Smith Assistant Vice President, None
Institutional Investment
Services Division
Rodney G. Smith Vice President None
100 N. Central Expressway
Suite 1214
Richardson, TX 75080
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
Thomas A. Stout Regional Vice President None
12913 Kendale Lane
Bowie, MD 20715
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
* Drew Taylor Assistant Vice President None
% 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
* 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, Treasurer None
Gregory J. Weimer Vice President None
125 Surrey Drive
Canonsburg, PA 15317
# Timothy W. Weiss Director None
** N. Dexter Williams Vice President None
Timothy J. Wilson Regional Vice President None
113 Farmview Place
Venetia, PA 15367
# Laura L. Wimberly Assistant Vice President None
* Marshall D. Wingo Director, Senior Vice President None
* Robert L. Winston Director, Senior Vice President None
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
Scott D. Zambon Regional Vice President None
209 Robinson Drive
Tustin Ranch, CA 92782
</TABLE>
_____________________
* Business Address, 333 South Hope Street, Los Angeles, CA 90071
** Business Address, One Market Plaza, Steuart Tower, Suite 1800, San
Francisco, CA 94111
+ Business Address, 11100 Santa Monica Blvd., Los Angeles, CA 90025
# Business Address, 135 South State College Blvd., Brea, CA 92821
% 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 92821.
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 92821, 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, 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 has duly caused this amended
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
20th day of January, 1997.
CAPITAL WORLD GROWTH AND INCOME FUND, INC.
By /s/ Thierry Vandeventer
Thierry Vandeventer, Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this amendment
to Registration Statement has been signed below on January 20, 1997, by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C> <C>
(1) Principal Executive Officer:
/s/ Thierry Vandeventer Chairman of the Board
(Thierry Vandeventer)
(2) Principal Financial Officer and
Principal Accounting Officer:
/s/ R. Marcia Gould Treasurer
(R. Marcia Gould)
(3) Directors:
H. Frederick Christie* Director
/s/ Paul G. Haaga, Jr. President and Director
(Paul G. Haaga, Jr.)
Mary Myers Kauppila* Director
Gail L. Neale* Director
Robert J. O'Neill Director
Donald E. Petersen* Director
Frank Stanton* Director
/s/ Thierry Vandeventer Chairman of the Board
(Thierry Vandeventer)
Charles Wolf, Jr.* Director
</TABLE>
*By /s/ Vincent P. Corti
(Vincent P. Corti, Attorney-in-Fact)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 6 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 31, 1996, relating to the financial
statements and per share data and ratios appearing in the November 30, 1996
Annual Report of The Capital World Growth and Income Fund, Inc., which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the headings "Independent Accountants" and "Reports to Shareholders"
in the Statement of Additional Information.
PRICE WATERHOUSE LLP
Los Angeles, California
January 20, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-START> DEC-1-1995
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 4,021,353
<INVESTMENTS-AT-VALUE> 5,108,999
<RECEIVABLES> 48,241
<ASSETS-OTHER> 3,149
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,160,389
<PAYABLE-FOR-SECURITIES> 12,724
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,180
<TOTAL-LIABILITIES> 20,904
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,825,787
<SHARES-COMMON-STOCK> 216,242,143
<SHARES-COMMON-PRIOR> 178,630,987
<ACCUMULATED-NII-CURRENT> 22,074
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 196,920
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,087,850
<NET-ASSETS> 5,139,485
<DIVIDEND-INCOME> 136,224
<INTEREST-INCOME> 40,235
<OTHER-INCOME> 0
<EXPENSES-NET> 36,283
<NET-INVESTMENT-INCOME> 140,176
<REALIZED-GAINS-CURRENT> 207,627
<APPREC-INCREASE-CURRENT> 584,880
<NET-CHANGE-FROM-OPS> 932,683
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 138,616
<DISTRIBUTIONS-OF-GAINS> 64,705
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 48,019,573
<NUMBER-OF-SHARES-REDEEMED> 19,581,034
<SHARES-REINVESTED> 9,172,617
<NET-CHANGE-IN-ASSETS> 1,528,254
<ACCUMULATED-NII-PRIOR> 16,988
<ACCUMULATED-GAINS-PRIOR> 61,621
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 19,343
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 36,283
<AVERAGE-NET-ASSETS> 4,276,497
<PER-SHARE-NAV-BEGIN> 20.22
<PER-SHARE-NII> .70
<PER-SHARE-GAIN-APPREC> 3.91
<PER-SHARE-DIVIDEND> .72
<PER-SHARE-DISTRIBUTIONS> .34
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.77
<EXPENSE-RATIO> .008
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
