CAPITAL WORLD GROWTH AND INCOME FUND
SEMI-ANNUAL REPORT
for the six months ended May 31, 1997
[Photo: various country flags with shadow of globe in the background]
[The American Funds Group (r)]
CAPITAL WORLD GROWTH AND INCOME FUND(sm) seeks long-term capital growth while
providing current income. It invests on a global basis in a diversified
portfolio consisting primarily of common stocks and other equity-type
securities.
INVESTMENT RESULTS
FOR PERIODS ENDED 5/31/97
(with dividends reinvested)
<TABLE>
<CAPTION>
Lifetime
since fund's inception on 3/26/93
6-Month 12-Month Total Average Annual
Return Return Return Compund Return
<S> <C> <C> <C> <C>
CAPITAL WORLD GROWTH
AND INCOME FUND +10.5% +23.4% +100.6% +18.1%
MSCI World Index +8.4 +17.6 +84.3 +15.7
Lipper Global Stock
Fund Average +8.4 +14.2 +76.9 +14.6
</TABLE>
The MSCI World Index measures all of the world's major stock markets, including
the U.S. The index is unmanaged. Lipper and fund results do not reflect the
effect of sales charges.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the fund's average annual compound returns with
all distributions reinvested for periods ended June 30, 1997 (the most recent
calendar quarter), assuming payment of the 5.75% maximum sales charge at the
beginning of the stated periods (sales charges are lower for accounts of
$50,000 or more):
SINCE INCEPTION ON 3/26/93: +17.21%; 12 MONTHS: +21.47%
The fund's 30-day yield as of June 30, 1997, calculated in accordance with the
Securities and Exchange Commission formula, was 2.05%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS AND ARE NOT PREDICTIVE OF
FUTURE RESULTS. INVESTING OUTSIDE THE U.S. IS SUBJECT TO RISKS WHICH ARE
DETAILED IN THE FUND'S PROSPECTUS. SHARE PRICE AND RETURN WILL VARY, SO YOU MAY
LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME PERIOD OF YOUR
INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE NOT DEPOSITS
OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S. GOVERNMENT, ANY
FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER
AGENCY, ENTITY OR PERSON.
[photo: globe]
FELLOW SHAREHOLDERS:
The first half of fiscal 1997 was another period of solid progress for Capital
World Growth and Income Fund. For the six months ended May 31, the value of
your investment rose 10.5% if, like most shareholders, you reinvested the
income dividends and capital gain distributions totaling 26 cents a share and
91.5 cents a share, respectively.
The fund's 10.5% six-month gain outpaced the broad unmanaged global stock
market indexes and most global stock funds. The Morgan Stanley Capital
International (MSCI) World Index, which measures 22 major markets including the
U.S., returned 8.4% with dividends reinvested. The 191 global stock funds
tracked by Lipper Analytical Services rose an average of 8.4% as well.
During the first fiscal half, all but three of the world's major markets
reported positive results. The exceptions were Japan, where the fund had
relatively few investments, and Singapore and Malaysia, where the fund had no
investments. A breakdown of the portfolio by country is shown on page 2.
IN THE UNITED STATES, where the fund had the largest concentration of
investments (about 30% of assets), stocks rose 13.7% as measured by the
unmanaged MSCI USA Index. The combined forces of economic growth, rising
corporate profits and continued low inflation once again created a favorable
environment for stocks, although the Federal Reserve Board's tightening of
monetary policy last March created a sharp but short market downdraft.
Elsewhere in North America, the Canadian stock market rose 8.6% measured in
Canadian dollars or 6.1% in U.S. dollars.
IN EUROPE, markets were buoyed by falling interest rates and a broad focus
on corporate restructuring as well as other measures aimed at improving
competitiveness and increasing shareholder value. A stronger U.S. dollar helped
fuel advances in the stocks of export-oriented companies by making their
products less expensive in the United States. However, for U.S. investors it
also pared otherwise strong local market returns once those returns were
translated into dollars. In the United Kingdom, the fund's second-largest
country concentration, stocks rose 14.5% in local currency or 11.5% in U.S.
dollars. The fund also had significant holdings in companies domiciled in
France (+12.5% in local currency, +2.0% in U.S. dollars), the Netherlands
(+27.2% in local currency, +14.3% in U.S. dollars) and Spain (+38.5% in local
currency, +24.3% in U.S. dollars). With more than a third of its assets
invested in Europe, the fund was well positioned to take advantage of broad
market strength throughout the region.
WHERE THE FUND'S ASSETS WERE INVESTED
(percent by country as of 5/31/97)
<TABLE>
<CAPTION>
<S> <C>
EUROPE 34.6%
United Kingdom 13.1
France 4.3
Netherlands 4.0
Spain 2.2
Italy 2.2
Sweden 2.0
Germany 1.9
Portugal 1.7
Denmark .7
Norway .5
Luxembourg .5
Switzerland .4
Belgium .4
Finland .4
Other Europe .3
THE AMERICAS 37.9%
United States 29.6
Canada 5.4
Argentina .9
Mexico .8
Chile .7
Brazil .5
ASIA/PACIFIC RIM 13.7%
Australia 4.6
Hong Kong 3.1
New Zealand 2.1
Japan 1.8
Taiwan 1.0
Philippines .7
Other Asia/Pacific Rim .4
OTHER 1.6%
Supranational 1.0
South Africa .6
BONDS, CASH &
EQUIVALENTS 12.2%
100.0%
</TABLE>
[photo: globe]
IN ASIA AND THE PACIFIC RIM, where investments made up 13.7% of the fund's
assets, returns were often disappointing amid slower economic growth and
ongoing concerns about the health of the Japanese economy. Stock prices in
Japan fell 3.2% in yen or 5.5% in U.S. dollars. The fund's investments in
Japan, at 1.8% of assets, were considerably less than the 15% or so that would
have been held by a globally indexed portfolio that mirrored the size of each
country's stock market. The fund also had investments in Australia, New Zealand
and Hong Kong, all of which posted modest gains after factoring in changes in
currency values. Despite the modest gain in Hong Kong, investor sentiment there
was positive enough to carry the market to new highs on the verge of the
British crown colony's transfer to China.
While Capital World Growth and Income Fund emphasizes investments in
leading companies in the world's largest stock markets, we also held selected
investments in businesses based in developing countries. Over the six-month
period, returns in these markets generally followed the patterns set by their
more developed counterparts. There was strength throughout the Americas (e.g.,
in Argentina, Mexico and Brazil) and weakness in Asia (e.g., in Thailand and
the Philippines). In Taiwan, where we have intensified our research efforts,
stock prices ignored regional trends and moved higher.
Strength in largest industries and largest holdings
All in all, the 267 equity-type securities held over the course of the
six-month period were diversified across more than 30 countries. Of these
securities, 180 rose in price, 86 declined and one was unchanged. There was
also broad strength across many industries, including banking and
telecommunications, our two largest areas of concentration. As you can see in
the table below, this was reflected in the gains of many of the fund's largest
individual stock holdings.
In the portfolio as a whole, holdings with price declines tended to be
concentrated in such areas as chemicals, mining, broadcasting & publishing, and
leisure & tourism, where the fund had relatively minor investments. The
portfolio listing that begins on page 5 shows investments in some 36
industries.
[photo: various country flags]
10 LARGEST HOLDINGS
<TABLE>
<CAPTION>
Percent of 6 Month
Net Assets Returns*
Ended 5/31/97
<S> <C> <C>
ING Groep (Netherlands) 2.1% +28.0%
Portugal Telecom (Portugal) 1.7 +47.6
Hong Kong Telecommunications
(Hong Kong) 1.5 +30.8
Australia and New Zealand
Banking Group (Australia) 1.4 +7.0
Telefonica de Espana (Spain) 1.3 +32.9
Telecom Corp. of New Zealand
(New Zealand) 1.2 -6.3
Imasco (Canada) 1.1 +14.4
Bank of New York (USA) 1.0 +20.2
Royal Bank of Canada (Canada) 1.0 +18.6
Philip Morris (USA) .9 +30.3
</TABLE>
*In U.S. dollars including dividends
A note about dividends
Capital World Growth and Income Fund paid dividends of 12 cents a share in
December and 14 cents a share in March. On June 9, after the end of the fiscal
reporting period, the fund paid a dividend of 22 cents a share. As many of you
know, the fund's dividends vary from quarter to quarter. This is because
companies outside North America usually pay dividends annually or semi-annually
(as opposed to quarterly in the United States). Dividends paid by the fund in
September, December and March are generally smaller than those paid in June.
As we mentioned in last year's annual report, we expect that the fund's
total per-share dividends will be lower this year, due in part to the unusually
large number of "special" dividends declared by companies in fiscal 1996.
Nevertheless, sound, seasoned companies have tended to increase their dividends
regularly, and we expect that many companies held by the fund will raise their
dividends fairly steadily over time. It is also worth noting that if you
reinvest capital gain distributions - as 98% of you do - you have more shares
producing income. This helps offset any reduction in the per-share dividend.
The fund's capital gain distributions reflect our ongoing efforts to find
value in sharply rising markets. Stocks that had risen to the point where they
appeared fully valued were sold in favor of opportunities we felt were more
moderately priced.
A look at 12-month and lifetime returns
The fund's latest advance brought its 12-month total return to +23.4% and its
return since inception in March 1993 to +100.6%, or an average compound return
of +18.1% a year. Over these periods, the fund has outpaced the leading
benchmark index as well as the average return of other global funds. We feel
that this achievement, which was accomplished through intensive, value-oriented
research, is particularly notable in light of the fund's focus on income as
well as capital growth.
While it gives us considerable pleasure to report on Capital World Growth
and Income Fund's progress, these have been exceptionally good times for stock
investors - and we emphasize "exceptionally." There will, no doubt, be periods
marked by much less favorable returns. Hence, a long-term perspective is
important.
Cordially,
[/s/ Thierry Vandeventer]
Thierry Vandeventer
Chairman of the Board
[/s/ Paul G. Haaga, Jr.]
Paul G. Haaga, Jr.
President
July 14, 1997
<TABLE>
CAPITAL WORLD GROWTH & INCOME FUND
Investment Portfolio, May 31, 1997
<S> <C> <C> <C>
[photo: various country flags]
Largest Industry Holdings
Equity-Type Securities 87.85%
Banking 13.13%
Telecommunications 11.52%
Utilities: Electric & Gas 5.78%
Health & Personal Care 4.51%
Merchandising 3.58%
Other Industries 49.33%
Bonds and Notes 1.83%
Cash & Equivalents 10.32%
CAPITAL WORLD GROWTH AND INCOME FUND
INVESTMENT PORTFOLIO, MAY 31, 1997 Unaudited
- ------------------------------------------- ---------- ---------- ----------
Equity-Type Securities Shares or Market Percent
(common and preferred stocks and convertible Principal Value of Net
debentures) Amount (Millions) Assets
- ------------------------------------------- ---------- ---------- ----------
BANKING- 11.76%
Australia and New Zealand Banking Group Ltd. (Australia) 12571382 $85.961 1.37%
Bank of New York Co., Inc. (USA) 1540000 65.643 1.04
Royal Bank of Canada (Canada) 1,509,200 65.399 1.04
ABN AMRO Holding NV (Netherlands) 2845116 52.583 .84
First Union Corp. (USA) 400000 34.350 .54
Cie. de Suez (France) 650000 33.169 .53
HSBC Holdings PLC (United Kingdom) 1,050,000 31.847 .51
Lloyds TSB Group PLC (United Kingdom) 2970000 29.874 .48
Safra Republic Holdings SA (Luxembourg) 133000 28.728 .46
First Chicago NBD Corp. (USA) 452500 26.811 .43
Bank of Scotland (Scotland) 4200000 26.456 .42
Chase Manhattan Corp. (USA) 250000 23.625 .38
Grupo Financiero Banamex Accival, SA de CV, Class B .00
(Mexico) /1/ 2993000 6.484
Grupo Financiero Banamex Accival, SA de CV, Class L /1/ 509000 1.010
Banco Nacional de Mexico, S.A. 11.00% convertible
debentures 2003 $15,000,000 15.637 .37
Banco de Galicia y Buenos Aires SA (American Depositary
Receipts) (Argentina) 840000 22.050 .35
Westpac Banking Corp. (Australia) 4025164 21.829 .35
Istituto Mobiliare Italiano SpA (American Depositary .00
Receipts) (Italy) 600000 16.125
Istituto Mobiliare Italiano SpA 500000 4.385 .33
Banc One Corp. (USA) 440000 19.030 .30
Sparbanken Sverige AB (Sweden) 960000 18.837 .30
National Australia Bank Ltd. (Australia) 1,307,527 18.677 .30
National Bank of Canada (Canada) 1500000 17.663 .28
Commonwealth Bank of Australia (Australia) 1624000 17.435 .28
Cie. Financiere de Paribas, Class A (France) 250,000 16.107 .26
Uniao de Bancos Brasileiros, S.A. (Global Depositary
Receipts) (Brazil) /1/ 458,000 15.801 .25
Bank of the Philippine Islands (Philippines) 2364000 14.623 .23
Wilmington Trust Corp. (USA) 300000 13.388 .21
Allied Irish Banks, PLC (Ireland) 1730000 13.207 .21
Crestar Financial Corp. 300000 11.400 .18
Credit Commercial de France (France) 230501 9.752 .15
Bank of Nova Scotia (Canada) 234200 9.716 .15
Commerzbank AG (Germany) 300000 8.820 .14
TB Finance (Cayman) Ltd., non-cumulative mandatory
exchangeable preference shares (Japan) 520 8.599 .14
Banco de Santander, SA (Spain) 89000 7.594 .12
Bangkok Bank PCL, 3.25% convertible debentures 2004 .00
(Thailand) /2/ $9,000,000 7.515 .12
MBL International Finance, 3.00% convertible debentures .00
2002 (Bermuda) $3,800,000 4.018 .06
Svenska Handelsbanken Group, Class B (Sweden) 21900 .563 .01
.00
TELECOMMUNICATIONS- 11.52%
Portugal Telecom, SA (Portugal) 2737600 105.052 1.67
Hong Kong Telecommunications Ltd. (Hong Kong) 41236022 91.275 1.45
Telefonica de Espana, SA (Spain) 2900000 83.683 1.33
Telecom Corp. of New Zealand Ltd. (New Zealand) 7225100 34.707
Telecom Corp. of New Zealand Ltd. (American Depositary .00
Receipts) 623400 23.923
Telecom Corp. of New Zealand Ltd. /2/ 3984210 19.139 1.24
STET-Societa Finanziaria Telefonica p.a., nonconvertible .00
savings shares (Italy) 7275000 28.642
STET-Societa Finanziaria Telefonica p.a. 3890000 19.659 .77
Koninklijke PTT Nederland NV (Netherlands) 1227800 42.955 .68
Tele Danmark AS, Class B (American Depositary Receipts) .00
(Denmark) 924100 22.871
Tele Danmark AS, Class B 382500 18.763 .66
U S WEST Communications Group (USA) 950000 34.794 .55
Telecom Italia SpA, savings shares (Italy) 13610400 30.092
Telecom Italia SpA 357800 .980 .50
British Telecommunications PLC (United Kingdom) 4000000 28.996 .46
Telecom Italia Mobile SpA, savings shares (Italy) 12565800 22.047
Telecom Italia Mobile SpA 2224200 6.545 .46
Telefonos de Mexico, SA de CV, Class L (American .00
Depositary Receipts) (Mexico) 582300 25.839 .41
Telecom Argentina SA, Class B (American
Depositary Receipts) (Argentina) 316000 16.867 .27
Ascend Communications, Inc. (USA) /1/ 300000 16.725 .27
Telecomunicacoes Brasileiras SA, preferred nominative .00
(American Depositary Receipts) (Brazil) 114000 15.661 .25
International CableTel Inc., 7.25% convertible .00
debentures 2005 (USA) /2/ $11,000,000 11.220 .18
SmarTone Telecommunications Holdings Ltd. (incorporated
in Bermuda) /2/ 4000000 7.873 .13
Telefonica de Argentina SA, Class B (American .000 .00
Depositary Receipts) (Argentina) 190700 6.913 .11
Bell Atlantic Corp. (USA) 75000 5.250 .08
AirTouch Communications (USA) /1/ 117820 3.284 .05
.00
MULTI-INDUSTRY- 6.82%
Imasco Ltd. (Canada) 2,386,200 66.917 1.07
B.A.T Industries PLC (United Kingdom) 5666000 50.819 .81
Orkla AS, Class B (Norway) 351,000 27.362
Orkla AS, Class A 71,000 6.193 .53
Siebe PLC (United Kingdom) 2020000 31.751 .50
Williams Holdings PLC (United Kingdom) 6000000 30.520 .49
Incentive AB, Class B (Sweden) 290,000 25.869 .41
Hutchison Whampoa Ltd. (Hong Kong) 3,090,000 25.723 .41
Brierley Investments Ltd. (New Zealand) 22,244,020 20.696
Brierley Investments Ltd., $0.85 convertible preferred .00
shares 4025000 3.551 .38
U.S. Industries, Inc. (USA) /1/ 467057 16.639 .26
Lend Lease Corp. Ltd. (Australia) 830314 16.433 .26
Industriforvaltnings AB Kinnevik, Class B (Sweden) 502,750 13.759 .22
Ayala Corp., 3.00% convertible debentures 2000 .00
(Philippines) $10,000,000 13.050 .21
Jardine Strategic Holdings Ltd. (Hong Kong--Incorporated .00
in Bermuda) 3375000 12.555
Jardine Strategic Holdings Ltd., 7.50% convertible .00
debentures 2049 $181,000 .219 .00
Jardine Strategic Holdings Ltd., warrants, expire 1998 /1/ 375,000 .141 .21
FMC Corp. (USA) /1/ 170,000 12.240 .20
Canadian Pacific Ltd. (Canada) 400000 10.600 .17
Groupe Bruxelles Lambert SA (Belgium) 63,000 10.039 .16
Cie. Nationale a Portefeuille (Belgium) 100000 7.287
Cie. Nationale a Portefeuille, warrants, .00
expire 1999 /1/ 150000 2.161 .15
Textron Inc. (USA) 75000 8.888 .14
Tenneco Inc. (USA) 150,000 6.713 .11
Lagardere Groupe SCA (France) 200,000 5.886 .09
Preussag AG (Germany) 8,000 2.108
Preussag AG, warrants, expire 2001 /1/ 3,100 .176 .04
.00
UTILITIES: ELECTRIC & GAS- 5.78%
National Power PLC (United Kingom) 6160000 55.653 .89
Columbia Gas System, Inc. (USA) 794400 51.140 .81
Empresa Nacional de Electricidad SA, (American
Depositary Receipts) (Chile) 1326746 29.852 .47
Southern Electric PLC (United Kingdom) 4,174,707 28.040 .45
Sonat Inc. (USA) 454100 26.111 .42
Williams Companies, Inc. (USA) 570350 25.167 .40
CalEnergy Co., Inc. (USA) /1/ 500000 20.625 .33
Long Island Lighting Co. (USA) 850000 19.656 .31
Scottish Power PLC (United Kingdom) 3066250 19.289 .31
Enersis SA (American Depositary Receipts) (Chile) 462900 16.086 .26
Public Service Co. of New Mexico (USA) 864300 15.233 .24
Hongkong Electric Holdings Ltd. (Hong Kong) 4073500 14.668 .23
El Paso Natural Gas Co. (USA) 174200 10.321 .16
BG PLC (American Depositary Receipts) .00
(United Kingdom) 150000 5.006
BG PLC (Formerly British Gas PLC) 900000 3.000 .13
Australian Gas Light Co. (Australia) 1133367 6.750 .11
GPU Inc. (USA) 150000 5.250 .08
China Light & Power Co., Ltd. (Hong Kong) 1000000 5.008 .08
National Grid Group PLC (United Kingdom) 1080000 4.007 .06
Centrica PLC (United Kingdom) /1/ 2400000 2.516 .04
.00
HEALTH & PERSONAL CARE- 4.51% .00
AB Astra, Class A (Sweden) 2133333 34.424
AB Astra, Class B 1333333 20.569 .88
Glaxo Wellcome PLC (United Kingdom) 2620000 52.428 .83
Eli Lilly and Co. (USA) 400000 37.200 .59
Merck & Co., Inc. (USA) 385000 34.602 .55
American Home Products Corp. (USA) 370,000 28.213 .45
Bristol-Myers Squibb Co. (USA) 350000 25.681 .41
Pfizer Inc (USA) 219000 22.530 .36
Warner-Lambert Co. (USA) 150000 15.112 .24
Sandoz Ltd., 2.00% convertible debentures 2002 .00
(Switzerland) /2/ $7,500,000 9.540 .15
Abbott Laboratories (USA) 50000 3.150 .05
Allegiance Corp. (USA) 6000 .163 .00
.00
MERCHANDISING- 3.58% .00
Tesco PLC (United Kingdom) 7,322,963 45.047 .72
Wal-Mart Stores, Inc. (USA) 1096000 32.606 .52
J.C. Penney Co., Inc. (USA) 400000 20.600 .33
George Weston Ltd. (Canada) 340000 20.572 .33
AJL PEPS Trust, $1.44 convertible preferred shares .00
(Japan) /1/ 465,000 8.719
Amway Japan Ltd. 179,000 6.904 .25
Kingfisher PLC (United Kingdom) 1265000 14.796 .23
Safeway PLC (United Kingdom) 2350000 13.840 .22
AutoZone, Inc. (USA) /1/ 550000 12.856 .20
Staples, Inc., 4.50% convertible debentures 2000 (USA) /2/ $11,000,000 12.678 .20
Giant Food Inc., Class A (USA) 350,000 11.528 .18
Duty Free International, Inc. (USA) 470,000 7.344 .12
Ito-Yokado Co., Ltd. (Japan) 105,000 5.989 .10
Coles Myer Ltd. (Australia) 1,150,264 5.360 .08
Woolworths Ltd. (Australia) 1219130 3.783 .06
WHSmith Group PLC (United Kingdom) 350000 2.408 .04
.00
ENERGY SOURCES- 3.56% .00
Repsol SA (American Depositary Receipts) (Spain) 975,000 41.072
Repsol SA 100,000 4.187 .72
"Shell" Transport and Trading Co., PLC (New York .00
Registered Shares) (United Kingdom) 175,000 20.891
Royal Dutch Petroleum Co. (Netherlands) 35000 6.762
Royal Dutch Petroleum Co. (New York Registered Shares) 20,000 3.905 .50
TOTAL, Class B (France) 324,487 29.697 .47
Elf Aquitaine (France) 250,000 25.003 .40
MESA Inc., 8.00% convertible preferred, Series A (USA) /3/ 1,676,424 11.106
MESA Inc. /1/ 1,600,000 8.800 .32
Unocal Corp. (USA) 360000 15.345 .24
Mobil Corp. (USA) 100,000 13.987 .22
YPF SA, Class D (American Depositary Receipts) .00
(Argentina) 450,000 13.500 .21
Phillips Petroleum Co. (USA) 200,000 8.500 .14
Esso SA Francaise (France) 78567 7.081 .11
Engen Ltd. (South Africa) 1176000 5.438 .09
ENI SpA (American Depositary Shares) (Italy) 100000 5.075 .08
Burmah Castrol PLC (United Kingdom) 206343 3.583 .06
.00
INSURANCE- 3.27% .00
ING Groep NV (Netherlands) 2968948 131.228 2.09
GIO Australia Holdings Ltd. (Australia) 8851823 25.988 .41
National Mutual Asia Ltd. (Hong Kong) 22008000 24.002 .38
Transatlantic Holdings, Inc. (USA) 213600 19.144 .30
Prudential Corp. PLC (United Kingdom) 406576 4.089 .07
Yasuda Fire and Marine Insurance Co., Ltd. (Japan) 190000 1.172 .02
.00
BUSINESS & PUBLIC SERVICES- 3.09% .00
United Utilities PLC (United Kingdom) 4886428 55.955 .89
Brambles Industries Ltd. (Australia) 1296000 23.313 .37
Hyder PLC (United Kingdom) 1495000 19.850 .32
Thames Water PLC (United Kingdom) 1575000 17.713 .28
American Water Works Co., Inc. (USA) 600,000 12.900 .21
Vanstar Financing Trust, 6.75% convertible preferred (USA) 350000 11.943 .19
Electronic Data Systems Corp. (USA) 300000 11.213 .18
Quintiles Transnational Corp., 4.25% convertible .00
debentures 2000 (USA) /2/ $10,000,000 10.200 .16
PacifiCare Health Systems, Inc., Class A (USA) /1/ 100000 7.500 .12
Hutchison Delta Finance Ltd., 7.00% convertible .00
debentures 2002 (Hong Kong--Incorporated in Cayman .00
Islands) /2/ $6,000,000 6.634 .11
Omnicom Group Inc. (USA) 100000 5.800 .09
IKON Office Solutions, Inc. (USA) 160000 4.640 .07
(Formerly Alco Standard Corp.)
Waste Management, Inc. (Formerly WMX Technologies, .00
Inc.) (USA) 82445 2.618 .04
Thorn PLC (United Kingdom) 1009470 2.571 .04
Unisource Worldwide, Inc. (USA) 80000 1.390 .02
.00
FOREST PRODUCTS & PAPER- 2.63%
James River Corp. of Virginia, $1.55 DECS convertible .00
preferred shares (USA) 450000 14.625
James River Corp. of Virginia 350000 12.294 .43
Sonoco Products Co. (USA) 925000 26.941 .43
Champion International Corp. (USA) 530000 26.169 .42
Bowater Inc. (USA) 500000 24.687 .39
Jefferson Smurfit Corp. (USA) /1/ 1332300 23.981 .38
Union Camp Corp. (USA) 300000 15.750 .25
UPM-Kymmene Corp. (Finland) /1/ 324100 7.447
Kymmene Corp., 8.25% convertible debentures 2043 FIM18,000,000 4.437 .19
MAYR-MELNHOF Karton AG (Austria) /1/ 145000 7.286 .12
Carter Holt Harvey Ltd. (New Zealand) 616770 1.479 .02
.00
BEVERAGES & TOBACCO- 2.54% .00
Philip Morris Companies Inc. (USA) 1300000 57.200 .91
RJR Nabisco Holdings Corp. (USA) 1400000 45.325 .72
Seagram Co. Ltd. (Canada) 670000 26.967 .43
Lion Nathan Ltd. (New Zealand) 5000000 13.095 .21
Coca-Cola Amatil Ltd. (Australia) 1002189 11.587 .18
UST Inc. (USA) 200000 5.700 .09
FOOD & HOUSEHOLD PRODUCTS- 2.52% .00
Reckitt & Colman PLC (United Kingdom) 3643812 51.336 .82
Cadbury Schweppes PLC (United Kingdom) 4685225 42.022 .67
Unilever PLC (United Kingdom) 650000 17.426
Unilever NV (Netherlands) 30000 5.771 .40
Cultor Ltd. (Finland) 227500 11.676 .19
Groupe Danone (France) 76480 11.520 .18
Nestle SA (Switzerland) 8452 10.511 .17
McCormick & Co. (USA) 205000 5.356 .09
.00
CHEMICALS- 2.36% .00
Praxair, Inc. (USA) 992500 52.230 .83
Airgas, Inc. (USA) /1/ 1720100 29.242 .47
Sherwin-Williams Co.(USA) 872000 26.160 .42
Millennium Chemicals Inc. (USA) 950000 18.287 .29
Nan Ya Plastics Corp. (Taiwan) 3975000 10.562 .17
L'Air Liquide (France) 50599 7.762 .12
AGA AB, Class B (Sweden) 300000 3.950 .06
METALS: NONFERROUS- 2.30% .00
Aluminum Co. of America (USA) 595000 43.807 .70
Pechiney, Class A (France) 847000 28.922 .46
Inco Ltd. (Canada) 785000 25.905 .41
Teck Corp., 3.75% convertible debentures 2006 (Canada) $14,950,000 16.221 .26
Freeport-McMoRan Copper & Gold Inc., Class A (USA) 500,000 13.875 .22
Noranda Inc. (Canada) 525,000 11.717 .19
Indian Aluminium Co., Ltd. (Global Depositary Receipts) .00
(India) 532300 1.973
Indian Aluminium Co., Ltd. 527700 1.669 .06
Granges AB (Canada)/1/ 22000 .274 .00
MACHINERY & ENGINEERING- 2.16% .00
Mannesmann AG (Germany) 120075 48.806 .78
Caterpillar Inc. (USA) 418700 40.876 .65
Daewoo Heavy Industries Ltd. (South Korea) 1800000 15.339 .24
Sidel SA (France) 210000 14.742 .23
Kawasaki Heavy Industries, Ltd. (Japan) 2100000 9.092 .15
Triplex Lloyd PLC (United Kingdom) 2465963 6.585 .11
ELECTRONIC COMPONENTS- 1.92% .00
Micron Technology, Inc. (USA) /1/ 1200000 51.000 .81
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan) 9682000 41.544 .66
Quantum Corp., 5.00% convertible debentures 2003 (USA) /2/ $10,000,000 18.275 .29
Delta Electronics, Inc. (Taiwan) 1950000 9.697 .16
.00
AUTOMOBILES- 1.78% .00
Regie Nationale des Usines Renault, SA (France) 1,638,010 35.149 .56
Ford Motor Co., Class A (USA) 650,000 24.375 .39
Bayerische Motoren Werke AG (Germany) 22000 18.026
Bayerische Motoren Werke AG, preferred shares 10,254 5.886 .38
Chrysler Corp. (USA) 465,000 14.764 .23
Toyota Motor Corp. (Japan) 414000 11.878 .19
Daimler-Benz AG, 4.125% convertible debentures, consisting of .00
bonds with undetachable warrants, 2003 /2/ DM1,918,000 1.578 .03
.00
DATA PROCESSING & REPRODUCTION- 1.67% .00
Cascade Communications Corp. (USA) /1/ 725000 27.731 .44
3Com Corp. (USA) /1/ 500000 24.250 .39
Oracle Corp. (USA) /1/ 500000 23.313 .37
Fujitsu Ltd. (Japan) 1000000 12.198 .19
Computer Associates International, Inc. (USA) 200000 10.950 .17
CompuServe Corp. (USA) /1/ 631700 7.107 .11
.00
FINANCIAL SERVICES- 1.24% .00
Household International, Inc. (USA) 261700 25.712 .41
Federal Home Loan Mortgage Corp. (USA) 700000 23.100 .37
Associates First Capital Corp., Class A (USA) 310000 14.648 .23
Federal National Mortgage Assn. (USA) 200000 8.725 .14
United Companies Financial Corp., 6.75% PRIDES .00
convertible preferred shares (USA) 75000 3.206 .05
Beneficial Corp. (USA) 40000 2.570 .04
.00
GOLD MINES- 1.22% .00
Normandy Mining Ltd. (Australia) 15453708 18.924
Normandy Mining Ltd., options, expire 2001 /1/ 4875799 1.094 .32
Driefontein Consolidated Ltd. (South Africa) 2000000 16.883 .27
Barrick Gold Corp. (Canada) 650000 16.413 .26
Kloof Gold Mining Co. Ltd. (South Africa) 2000000 13.524 .21
Newcrest Mining Ltd. (Australia) 4000000 9.949 .16
.00
MISCELLANEOUS MATERIALS & COMMODITIES- 1.20% .00
English China Clays PLC (United Kingdom) 6891000 22.747 .36
Bunzl PLC (United Kingdom) 6770000 22.236 .35
Crown Cork & Seal Co., Inc. (USA) 275000 16.019 .25
Cie. de Saint-Gobain (France) 109195 15.085 .24
.00
ENERGY EQUIPMENT- 1.14% .00
Schlumberger Ltd. (Netherlands Antilles) 405000 48.246 .77
Halliburton Co. (USA) 250000 19.344 .31
Nabors Industries, Inc., 5.00% convertible debentures 2006 .00
(USA) $3,194,000 4.056 .06
.00
ELECTRICAL & ELECTRONIC- 1.09% .00
York International Corp. (USA) 550000 26.675 .42
Premier Farnell PLC (United Kingdom) 2238000 17.121
Premier Farnell PLC, $1.35 convertible preferred (American
Depositary Receipts) 225000 4.950 .35
Lucent Technologies Inc. (USA) 85000 5.408 .09
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 147400 5.176 .08
ABB AG, Class A (Switzerland) 3500 4.803 .08
Northern Telecom Ltd. (Canada) 51500 4.326 .07
INDUSTRIAL COMPONENTS- 1.08% .00
Federal-Mogul Corp. (USA) 800,000 23.300 .37
Morgan Crucible Co. PLC (United Kingdom) 2119487 15.868 .25
Lear Corp. (USA) /1/ 352300 13.475 .21
Bridgestone Corp. (Japan) 500000 11.296 .18
AB SKF, Class B (Sweden) 100,000 2.311 .04
BICC PLC (United Kingdom) 750000 2.089 .03
.00
BROADCASTING & PUBLISHING- 1.06% .00
Time Warner Inc. (USA) 450,000 20.925 .33
CanWest Global Communications Corp. (Canada) 741300 11.630 .19
CANAL+ (France) 58266 9.877 .16
Viacom Inc., Class B (USA) /1/ 325000 9.648 .15
Tele-Communications, Inc., Series A, Liberty Media Group .00
(USA) /1/ 397500 8.670 .14
News Corp. Ltd., preferred (Australia) 1351730 5.079 .08
Elsevier NV (Netherlands) 37500 .635 .01
.00
REAL ESTATE- 0.85% .00
CarrAmerica Realty Corp. (USA) 750000 21.281 .34
Sun Hung Kai Properties Ltd. (Hong Kong) 1400000 17.211 .27
SM Prime Holdings, Inc. (Philippines) 52885000 15.053 .24
.00
METALS: STEEL- 0.53% .00
Usinor Sacilor (France) 1400000 21.014 .34
Allegheny Teledyne Inc. (USA) 377000 9.708 .15
Ispat Industries Ltd., 3.00% convertible debentures .00
2001 (Formerly Nippon Denro Ispat Ltd.) (India) /2/ $2,800,000 1.540 .02
N.T.S. Steel Group PCL, 4.00% Eurobond,
2008 (Thailand) $6,670,000 1.401 .02
APPLIANCES & HOUSEHOLD DURABLES- 0.30% .00
Sony Corp. (Japan) 105000 8.848 .14
Philips Electronics NV (Netherlands) 135000 7.387 .12
AB Electrolux, Class B (Sweden) 44000 2.624 .04
CONSTRUCTION & HOUSING- 0.28% .00
Philipp Holzmann AG (Germany) /1/ 60000 17.746 .28
.00
LEISURE & TOURISM- 0.27% .00
Village Roadshow Ltd., Class A preferred shares (Australia) 2518592 6.417
Village Roadshow Ltd., Class A preferred shares /2/ 2500000 6.370
Village Roadshow Ltd. 1200000 4.290 .27
TRANSPORTATION: AIRLINES- 0.25% .00
Air New Zealand Ltd., Class B (New Zealand) 5,320,000 15.729 .25
TRANSPORTATION: RAIL & ROAD- 0.25% .00
Westshore Terminal (Canada) 3,498,000 15.462 .25
.00
AEROSPACE & MILITARY TECHNOLOGY- 0.18% .00
Boeing Co. (USA) 70,000 7.368 .12
General Motors Corp., Class H (USA) 75,000 4.134 .06
BUILDING MATERIALS & COMPONENTS- 0.17% .00
Friedrich Grohe AG (Germany) 35,000 10.557 .17
.00
WHOLESALE & INTERNATIONAL TRADE- 0.14% .00
Mitsubishi Corp. (Japan) 750000 8.827 .14
.00
TEXTILES & APPAREL- 0.12% .00
Courtaulds Textiles PLC (United Kingdom) 1641500 7.556 .12
RECREATION & OTHER CONSUMER PRODUCTS- 0.03% .00
EMI Group PLC (United Kingdom) 91,704 1.764 .03
.00
MISCELLANEOUS- 1.31% .00
Other equity-type securities in initial .00
period of acquisition 82.369 1.31
-------- --------
TOTAL EQUITY-TYPE SECURITIES (cost:
$4,153.638 million) 5,519.280 87.85
-------- --------
- ------------------------------------------ -------------
Principal
Amount
Bonds and Notes (Millions)
- ------------------------------------------ -------------
INDUSTRIALS- 0.40%
Mesa Operating Co. 10.625% July 2006 6.500 7.264 .12
Container Corp. of America 11.25% May 2004 6,000 6.510
Container Corp. of America 9.75% April 2003 1.000 1.048 .11
Telecom Argentina STET-France Telecom SA 12.00%
November 2002 5.500 6.366 .10
Multicanal Participacoes SA 12.625% June 2004 /2/ 2.250 2.552 .04
AB SKF 7.625% July 2003 2.000 2.034 .03
ARGENTINA GOVERNMENT- 0.81%
Argentina Eurobond 6.75% March 2005 /4/ 29.343 27.368 .44
Argentina (Republic of) 11.75% February 2007 /2/ 8.000 8.704 .14
Argentina (Republic of) 11.00% October 2006 7.000 7.640 .12
Argentina (Republic of) 11.375% January 2017 6.000 6.570 .11
SOUTH AFRICAN GOVERNMENT- 0.62%
South Africa 13.00% August 2010 ZAR197.500 39.181 .62
-------- --------
TOTAL BONDS AND NOTES (cost: $105.288 million) 115.237 1.83
-------- --------
- ------------------------------------------ ------------- ------------- -------------
Short-Term Securities
- ------------------------------------------ ------------- ------------- -------------
CORPORATE SHORT-TERM NOTES- 8.19%
Barclays U.S. Funding Corp. 5.535%-5.62% due 6/25-7/23/97 86.900 86.394 1.38
Bayer Corp. 5.55%-5.57% due 6/17-8/19/97 /2/ 57.300 56.875 .91
Svenska Handelsbanken Group 5.39%-5.58% due 6/18-8/11/97 53.500 53.237 .85
Siemens Capital Corp. 5.50%-5.52% due 6/6-7/8/97 45.700 45.532 .72
Deutsche Bank Financal Inc. 5.52%-5.64% due 6/9-8/18/97 42.900 42.594 .68
Canada Bills 5.46%-5.53% due 7/8-7/31/97 39.000 38.669 .62
Lloyds Bank PLC 5.52%-5.55% due 6/27-7/25/97 33.500 33.296 .53
Halifax Building Society 5.32%-5.55% due 6/13-7/1/97 33.000 32.887 .52
Daimler-Benz North America Corp. 5.50%-5.56% due 6/18-6/26/97 26.263 26.180 .42
ABN AMRO North America Finance Inc. 5.53% due 6/23/97 25.000 24.911 .40
E.I. du Pont de Nemours and Co. 5.55% due 7/9/97 23.000 22.862 .36
Reed Elsevier 5.55% due 6/4/97 /2/ 20.700 20.687 .33
International Lease Finance Corp. 5.57% due 8/19/97 19.900 19.652 .31
UBS Finance (Delaware) Inc. 5.60% due 6/2/97 9.900 9.897 .16
FEDERAL AGENCY DISCOUNT NOTES- 1.46%
Student Loan Marketing Assn. 5.46%-5.47% due 6/19-6/30/97 45.100 44.923 .71
Federal Home Loan Banks 5.44% due 6/26/97 31.600 31.476 .50
Federal National Mortgage Assn. 5.51%-5.53% due
6/19-7/21/97 16.000 15.906 .25
NON-U.S. CURRENCY- 0.10%
New Taiwanese Dollar NT$178.815 6.421 .10
-------- --------
TOTAL SHORT-TERM SECURITIES (cost: $612.480
million) 612.399 9.75
-------- ------
TOTAL INVESTMENT SECURITIES (cost: $4,871.406
million) 6,246.916 99.43
Excess of cash and receivables over payables 36.039 .57
-------- ------
NET ASSETS $6,282.955 100.00%
======================================================== ============ ==========
/1/Non-income-producing securities.
/2/Purchased in a private placement
transaction; resale to the public may
require registration or sale only
to qualified institutional buyers.
/3/Payment in kind. The issuer has the option of
paying additional securities in lieu of cash.
/4/Coupon rates may change periodically.
See Notes to Financial Statements
</TABLE>
<TABLE>
Capital World Growth and Income Fund, Inc.
Financial Statements Unaudited
- ---------------------------------------- ----------- -----------
Statement of Assets and Liabilities (dollars in
at May 31, 1997 millions)
- ----------------------------------------- ----------- -----------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $4,871.406) $6,246.916
Cash 2.608
Receivables for--
Sales of investments $31.189
Sales of fund's shares 18.463
Dividends and accrued interest 26.432 76.084
----------- -----------
6,325.608
Liabilities:
Payables for--
Purchases of investments 33.435
Repurchases of fund's shares 3.354
Management services 2.270
Accrued expenses 3.594 42.653
----------- -----------
Net Assets at May 31, 1997--
Equivalent to $24.95 per share on
251,780,753 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $6,282.955
===========
Unaudited
-----------
Statement of Operations (dollars in
for the six months ended May 31, 1997 millions)
- --------------------------------------------- ----------- -----------
Investment Income:
Income:
Dividends $74.055
Interest 25.611 $ 99.666
-----------
Expenses:
Management services fee 12.227
Distribution expenses 6.609
Transfer agent fee 2.068
Reports to shareholders .336
Registration statement and prospectus .405
Postage, stationery and supplies .372
Directors' fees .069
Auditing and legal fees .048
Custodian fee 1.090
Taxes other than federal income tax .073
Other expenses .073 23.370
----------- -----------
Net investment income 76.296
-----------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 211.687
Net increase in unrealized appreciation on investments 287.455
Net realized gain and increase in unrealized -----------
appreciation on investments 499.142
-----------
Net Increase in Net Assets Resulting
from Operations $575.438
===========
- ---------------------------------------------- ----------- -----------
Six months
Statement of Changes in Net Assets ended Year ended
(dollars in millions) 5/31/97* 11/30/96
- ---------------------------------------------- ----------- -----------
Operations:
Net investment income $ 76.296 $ 140.176
Net realized gain on investments 211.687 207.627
Net increase in unrealized appreciation
on investments 287.455 584.880
----------- -----------
Net increase in net assets
resulting from operations 575.438 932.683
----------- -----------
Dividends and Distributions Paid to Shareholders:
Dividends from net investment income (59.037) (138.616)
Distributions from net realized gain on investments (201.624) (64.705)
--------------- ---------------
Total dividends and distributions (260.661) (203.321)
----------- -----------
Capital Share Transactions:
Proceeds from shares sold: 39,244,717
and 48,019,573 shares, respectively 926.135 1,027.076
Proceeds from shares issued in reinvestment
of net investment income dividends and distributions
of net realized gain on investments:
10,953,822 and 9,172,617 shares, respectively 248.125 190.709
Cost of shares repurchased: 14,659,929
and 19,581,034 shares, respectively (345.57) (418.89)
----------- -----------
Net increase in net assets
resulting from capital share
transactions 828.693 798.892
----------- -----------
Total Increase in Net Assets 1,143.470 1,528.254
Net Assets:
Beginning of period 5,139.485 3,611.231
----------- -----------
End of period (including undistributed
net investment income: $39.333
and $22.074, respectively) $6,282.955 $5,139.485
=========== ===========
*Unaudited
See Notes to Financial Statements
</TABLE>
CAPITAL WORLD GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
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. Long-term and
short-term securities with original or remaining maturities in excess of 60
days are 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. Short-term securities with 60
days or less to maturity are valued at amortized cost, which approximates
market value. Securities for which market quotations are not readily available
are valued at fair value by the Board of Directors or a committee thereof.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed delivery or "when-issued basis", it
will segregate with its custodian liquid assets in an amount sufficient to meet
its payment obligations in these transactions. Realized gains and losses from
securities transactions are reported on an identified cost basis. Dividend and
interest income is reported on the accrual basis. Discounts and premiums on
securities purchased are amortized over the life of the respective securities.
Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
Investment securities, cash balances, 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 period. 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 $1,090,000 includes $30,000 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 May 31, 1997, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $1,375,510,000 of which
$1,512,731,000 related to appreciated securities and $137,221,000 related to
depreciated securities. During the six months ended May 31, 1997, the fund
realized, on a tax basis, a net capital gain of $212,173,000 on securities
transactions. Net losses of $1,078,000 related to non-U.S. currency
transactions and net gains of $592,000 related to other tax adjustments were
treated as adjustments to ordinary income for federal income tax purposes. The
capital gain distribution paid in December 1996 includes $433,000 of realized
non-U.S. currency gains. The cost of portfolio securities for book and federal
income tax purposes was $4,871,406,000 at May 31, 1997.
3. The fee of $12,227,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.60% of the first $500 million of 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.
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 six months ended May 31, 1997,
distribution expenses under the Plan were $6,609,000. As of May 31, 1997,
accrued and unpaid distribution expenses were $3,044,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $2,068,000. American Funds Distributors, Inc. (AFD), the
principal underwriter of the fund's shares, received $3,663,000 (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 May 31, 1997,
aggregate amounts deferred and earnings thereon were $181,000.
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 May 31, 1997, accumulated undistributed net realized gain on
investments was $216,017,000 and additional paid-in capital was $4,654,124,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,208,646,000 and $746,149,000, respectively, during
the six months ended May 31, 1997.
Dividend and interest income is recorded net of non-U.S. taxes paid. For
the six months ended May 31, 1997, such non-U.S. taxes were $6,880,000. Net
realized currency losses on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes were $5,471,000 for the six months ended
May 31, 1997.
<TABLE>
Per-Share Data and Ratios Six months Period
ended Year ended November 30 3/26/93 /2/
5/31/97 /1/ 1996 1995 1994 to 11/30/93
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $23.77 $20.22 $17.81 $17.00 $15.08
---------- ---------- ---------- ---------- ----------
Income From Investment Operations:
Net investment income .330 .70 .61 .52 .29
Net realized and unrealized gain on investments 2.025 3.91 2.72 .75 1.86
---------- ---------- ---------- ---------- ----------
Total income from investment operations 2.355 4.61 3.33 1.27 2.15
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends from net investment income (.260) /3/ (.72) /3/ (.63) (.46) (.23)
Distributions from net realized gains (.915) (.34) (.29) -- --
---------- ---------- ---------- ---------- ----------
Total distributions (1.175) (1.06) (.92) (.46) (.23)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $24.95 $23.77 $20.22 $17.81 $17.00
========== ========== ========== ========== ==========
Total Return /4/ 10.46% /5/ 23.67% 19.41% 7.51% 14.39% /5/
Ratios/Supplemental Data:
Net assets, end of period (in millions) $6,283 $5,139 $3,611 $2,784 $1,521
Ratio of expenses to average net assets .42% /5/ .85% .88% .87% .62% /5/
Ratio of net income to average net assets 1.36% /5/ 3.28% 3.24% 3.11% 2.01% /5/
Average commissions paid per share6 .07 c .25 c 1.94 c 1.24 c 1.31 c
Portfolio turnover rate 14.75% /5/ 30.18% 25.50% 18.66% 2.71% /5/
/1/Unaudited
/2/Commencement of operations
/3/Includes 0.2 cents and 1.5 cents realized
non-U.S. currency gains treated as ordinary
income in 1997 and 1996, respectively, for
federal income tax purposes.
/4/Calculated without deducting a sales charge. The
maximum sales charge is 5.75% of the fund's
offering price.
/5/Based on operations for the period shown and,
accordingly, not representative of a full year's
operations.
/6/Brokerage commissions paid on portfolio
transactions increase the cost of securities
purchased or reduce the proceeds of securities
sold and are not separately reflected in the
fund's statement of operations. Shares traded
on a principal basis (without commissions),
such as most over-the-counter and fixed
income transactions, 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>
OFFICES OF THE FUND AND OF THE INVESTMENT ADVISER,
CAPITAL RESEARCH AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
(Please write to the address nearest you.)
American Funds Service Company
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR FINANCIAL ADVISER. YOU MAY ALSO CALL AMERICAN FUNDS SERVICE
COMPANY, TOLL-FREE, AT 800/421-0180 OR VISIT WWW.AMERICANFUNDS.COM ON THE WORLD
WIDE WEB.
This report is for the information of shareholders of Capital World Growth and
Income Fund, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after September 30, 1997, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA AGD/AL/3455
Lit. No. WGI-013-0797
[Recylcle logo]
Printed on recycled paper
[The American Funds Group(r)]
