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
Post-Effective Amendment No. 9
and
Registration Statement
Under
The Investment Company Act of 1940
Amendment No. 11
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)
Approximate date of proposed public offering:
It is proposed that this filing become effective on February 1, 1999, pursuant
to paragraph (b) of rule 485.
[The American Funds Group(r)]
CAPITAL WORLD GROWTH AND INCOME FUND(SM)
PROSPECTUS
February 1, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
- --------------------------------------------------------------------------------
Capital World Growth and Income Fund
333 South Hope Street
Los Angeles, California 90071
TICKER SYMBOL: CWGIX NEWSPAPER ABBREV.: CapWGr FUND NO.: 33
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk/Return Summary 2
................................................................................
Fees and Expenses of the Fund 5
................................................................................
Investment Objective, Strategies and Risks 6
................................................................................
Year 2000 9
................................................................................
Management and Organization 10
................................................................................
Shareholder Information 12
................................................................................
Purchase and Exchange of Shares 13
................................................................................
Distribution Arrangements 17
................................................................................
Financial Highlights 18
- --------------------------------------------------------------------------------
</TABLE>
33-010-0299/RRD
Capital World Growth and Income Fund / Prospectus 1
<PAGE>
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RISK/RETURN SUMMARY
The fund seeks to make your investment grow over time and provide you with
current income by investing primarily in stocks of well-established companies
located around the world.
The fund is designed for investors seeking both capital appreciation and
income. In pursuing its objective, the fund tends to invest in stocks that are
more resilient to market declines. An investment in the fund is subject to
risks, including the possibility that the fund may decline in value in response
to certain events, such as changes in securities markets or economic
conditions. In addition, the prices of equity securities held by the fund may
be affected by events specifically involving the issuers of these securities.
Although all securities in the fund's portfolio, including U.S. securities, may
be adversely affected by currency fluctuations or world political, social and
economic instability, investments outside the U.S. may be affected to a greater
extent.
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 bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
2 Capital World Growth and Income Fund / Prospectus
<PAGE>
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Investment Results
The following information illustrates how the fund's results fluctuate. Past
results are not an indication of future results.
[BAR CHART APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period FUND
(Calendar Year) RESULTS
- ------------------- ----------
<S> <C>
1994 1.22
1995 21.39
1996 21.55
1997 17.99
1998 16.20
</TABLE>
The fund's highest/lowest quarterly results during this time period were:
X Highest 15.02% (quarter ended December 31, 1998)
X Lowest -9.65% (quarter ended September 30, 1998)
Capital World Growth and Income Fund / Prospectus 3
<PAGE>
- --------------------------------------------------------------------------------
For periods ended December 31, 1998:
<TABLE>
<CAPTION>
Average
Annual The fund with
Total maximum sales MSCI Lipper
Return charge deducted/1/ World/2/ Average/3/
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 9.50% 24.80% 14.34%
................................................................................
Five Years 14.06% 16.19% 12.22%
................................................................................
Lifetime/4/ 16.04% 16.62% 14.29%
</TABLE>
Yield/1/: 2.11%
(For current yield information call American FundsLine(R) at 1-800-325-3590)
/1/ These fund results were calculated according to a formula which requires
that the maximum sales charge of 5.75% be deducted. Results would be higher
if they were calculated at net asset value.
/2/ Morgan Stanley Capital International World Index measures 23 major stock
markets throughout the world, including the U.S. This index is unmanaged and
does not reflect sales charges, commissions or expenses.
/3/ The Lipper Global Stock Fund Average consists of funds that invest at least
25% of their portfolios in securities traded outside the U.S. and may own
U.S. securities. Sales charges and commissions are not reflected in the
results of the underlying funds.
/4/ The fund began investment operations on March 26, 1993.
4 Capital World Growth and Income Fund / Prospectus
<PAGE>
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FEES AND EXPENSES OF THE FUND
The following describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
Shareholders Fees
(fees paid directly from your investment)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.75%/1/
................................................................................
Maximum sales charge imposed on reinvested dividends 0%
................................................................................
Maximum deferred sales charge 0%/2/
................................................................................
Redemption or exchange fees 0%
</TABLE>
/1/ Sales charges are reduced or eliminated for larger purchases.
/2/ A contingent deferred sales charge of 1% applies on certain redemptions made
within 12 months following any purchases you made without a sales charge.
Annual Fund Operating Expenses
(expenses that are deducted from the fund assets)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Management Fees 0.43%
................................................................................
Service (12b-1) Fees 0.23%*
................................................................................
Other Expenses 0.12%
................................................................................
Total Annual Fund Operating Expenses 0.78%
</TABLE>
*12b-1 expenses may not exceed 0.30% of the fund's average net assets annually.
Example
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
One year $ 650
................................................................................
Three years $ 810
................................................................................
Five years $ 983
................................................................................
Ten years $1,486
</TABLE>
Capital World Growth and Income Fund / Prospectus 5
<PAGE>
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INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to provide you with long-term growth of cap-
ital while providing current income. It invests, on a global basis, in common
stocks that are denominated in U.S. dollars or other currencies.
The prices of equity securities held by the fund may decline in response to
certain events, including those directly involving issuers of these securities,
adverse conditions affecting the general economy, overall market declines,
world political, social and economic instability and currency fluctuations. In-
vestments outside the U.S. may be affected by these events to a greater extent
and may also be affected by differing securities regulations, and administra-
tive difficulties such as delays in clearing and settling portfolio transac-
tions.
The fund may also invest in cash or cash equivalents of any issuer. The fund
may invest in cash and cash equivalents to any extent deemed appropriate, in
response to abnormal market conditions. The extent of the fund's cash position
will depend on market conditions, fund purchases and redemptions, and other
factors. In addition, for temporary defensive purposes, the fund may invest
substantially in debt securities and/or money market instruments of issuers
based around the world. This may detract from the achievement of the fund's ob-
jective over the short-term or it may protect the fund during a market down-
turn.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic investment philosophy of Capital Research and Management
Company is to seek undervalued securities that represent good long-term invest-
ment opportunities. Securities may be sold when they no longer represent good
long-term value.
6 Capital World Growth and Income Fund / Prospectus
<PAGE>
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Additional Investment Results
(For periods ended December 31, 1998)
<TABLE>
<CAPTION>
Average
Annual
Total The fund with no MSCI Lipper
Return sales charge/1/ World/2/ Average/3/
- ------------------------------------------------------
<S> <C> <C> <C>
One Year 16.20% 24.80% 14.34%
......................................................
Five Years 15.41% 16.19% 12.22%
......................................................
Lifetime/4/ 17.24% 16.62% 14.29%
</TABLE>
/1/ These fund results were calculated according to a formula that is required
for all stock and bond funds.
/2/ Morgan Stanley Capital International World Index measures 23 major stock
markets throughout the world, including the U.S. This index is unmanaged and
does not reflect sales charges, commissions or expenses.
/3/ The Lipper Global Stock Fund Average consists of funds that invest at least
25% of their portfolios in securities traded outside the U.S. and may own
U.S. securities. Sales charges and commissions are not reflected in the
results of the underlying funds.
/4/ The fund began investment operations on March 26, 1993.
Capital World Growth and Income Fund / Prospectus 7
<PAGE>
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The following chart illustrates the industry mix of the funds investment
portfolio as of the ned of the fund's fiscal year, November 30, 1998.
Largest Industry Holdings
<TABLE>
<S> <C>
Telecommunications 14.9%
............................................
Banking 9.3%
............................................
Utilities: Electric & Gas 4.9%
............................................
Beverages & Tobacco 4.8% [PIE CHART APPEARS HERE]
............................................
Business & Public Services 3.7%
............................................
Other Industries 45.3%
............................................
Bonds & Notes 1.1%
............................................
Cash & Equivalents 16.0%
............................................
</TABLE>
<TABLE>
<CAPTION>
Percent Invested Percent of
by Country Net Assets
- ---------------------------------------------
<S> <C>
Europe 35.6%
United Kingdom 11.9
Germany 5.0
Italy 3.6
France 3.2
Netherlands 3.2
Sweden 2.1
Spain 1.5
Denmark 1.1
Switzerland .9
Finland .7
Portugal .6
Norway .5
Other Europe 1.3
............................................
The Americas 33.6%
United States 27.1
Canada 3.9
Argentina 1.3
Brazil .7
Other Americas .6
............................................
Asia/Pacific 12.4%
Australia 4.0
Japan 3.9
Hong Kong 2.3
Philippines 1.0
New Zealand .9
Other Asia/Pacific .3
............................................
Other 1.3%
South Africa .7
Supranational .6
............................................
Bonds, Cash & Equivalents 17.1%
............................................
</TABLE>
<TABLE>
<CAPTION>
Ten Largest
Individual Percent of
Holdings Net Assets
- ---------------------------------------------
<S> <C>
Telecom Italia 2.49%
............................................
Deutsche Telekom 1.84
............................................
Mannesmann 1.27
............................................
Imperial Tobacco 1.16
............................................
Telefonica 1.15
............................................
ING Groep 1.13
............................................
Astra 1.06
............................................
Tele Danmark .87
............................................
RJR Nabisco Holdings .85
............................................
Philip Morris .85
............................................
</TABLE>
Because the fund is actively managed, its holdings will change from time to
time.
8 Capital World Growth and Income Fund / Prospectus
<PAGE>
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YEAR 2000
The date-related computer issue known as the "Year 2000 problem" could have an
adverse impact on the quality of services provided to the fund and its
shareholders. However, the fund understands that its key service providers --
including the investment adviser and its affiliates -- are taking steps to
address the issue. In addition, the Year 2000 problem may adversely affect the
issuers in which the fund invests. For example, issuers may incur substantial
costs to address the problem. They may also suffer losses caused by corporate
and governmental data processing errors. The fund and its investment adviser
will continue to monitor developments relating to this issue.
Capital World Growth and Income Fund / Prospectus 9
<PAGE>
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MANAGEMENT AND ORGANIZATION
Investment Adviser
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as 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 total management fee paid by the fund, as a percentage
of average net assets, for the previous fiscal year is discussed earlier under
"Fees and Expenses of the Fund."
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.
Multiple Portfolio Counselor System
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this system the portfolio of a
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 a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee). In addition, Capital Research
and Management Company's research professionals may make investment decisions
with respect to a portion of a fund's portfolio. The primary individual
portfolio counselors for Capital World Growth and Income Fund are listed on the
following page.
10 Capital World Growth and Income Fund / Prospectus
<PAGE>
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<TABLE>
<CAPTION>
Approximate Years of
Experience as
an Investment Professional
(including
the last five
years)
..........................
Years of Experience
as
Portfolio Counselor
(and Research
Portfolio Professional, if
Counselors applicable) for With Capital
for Capital Capital World Research and
World Growth and Income Management
Growth and Fund Company or
Income Fund Primary Title(s) (approximate) Affiliates Total Years
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thierry Chairman of the 6 years (since the 36 years 36 years
Vandeventer Board fund began
of the fund. operations)
Director, Capital
Research and
Management Company
-------------------------------------------------------------------------------
Stephen E. Senior Vice 6 years (since the 26 years 33 years
Bepler President of fund began
the fund. Senior operations)
Vice President,
Capital
Research Company*
-------------------------------------------------------------------------------
Mark E. Senior Vice 6 years (since the 17 years 17 years
Denning President of fund began
the fund. operations)
Director,
Capital Research
and Management
Company
-------------------------------------------------------------------------------
Janet A. Senior Vice 6 years (since the 17 years 23 years
McKinley President of fund began
the fund. operations)
Director,
Capital Research
and Management
Company
-------------------------------------------------------------------------------
Carl M. Vice President of 1 year (plus 5 8 years 12 years
Kawaja the years as a
fund. Vice research
President, Capital professional prior
Research to becoming a
Company* portfolio
counselor for the
fund)
-------------------------------------------------------------------------------
Gregg E. Senior Vice 6 years 27 years 27 years
Ireland President, Capital
Research and
Management Company
-------------------------------------------------------------------------------
</TABLE>
The fund began investment operations on March 26, 1993.
* Company affiliated with Capital Research and Management Company.
Capital World Growth and Income Fund / Prospectus 11
<PAGE>
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SHAREHOLDER INFORMATION
Shareholder Services
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your
needs and circumstances change. These services 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. For your convenience, American Funds Service
Company has four service centers across the country.
American Funds Service Company Service Areas
[MAP OF AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS APPEARS HERE]
<TABLE>
<S> <C> <C> <C>
WESTERN SERVICE WESTERN CENTRAL EASTERN CENTRAL EASTERN SERVICE
CENTER SERVICE CENTER SERVICE CENTER CENTER
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Norfolk, Virginia
92822-2205 78265-9522 Indiana 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 46206-6007 Fax: 757/670-4773
Fax: 317/735-6620
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER ARE DESCRIBED 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.
YOU MAY INVEST IN THE FUND THROUGH VARIOUS RETIREMENT PLANS. However,
some retirement plans or accounts held by investment dealers may not offer
certain services. If you have any questions, please contact your plan
administrator/trustee or dealer.
12 Capital World Growth and Income Fund / Prospectus
<PAGE>
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PURCHASE AND EXCHANGE OF SHARES
Purchase
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
Exchange
You may exchange your shares into other funds in The American Funds Group gen-
erally without a sales charge. Exchange of shares from the money market funds
initially purchased without a sales charge generally will be subject to the ap-
propriate sales charge. Exchanges have the same tax consequences as ordinary
sales and purchases. See "Transactions by Telephone..." for information regard-
ing electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE
IS CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A
PERIOD OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO
REJECT ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY
INVESTOR WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES
ACTUAL OR POTENTIAL HARM TO THE FUND.
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 through payroll deduction $ 25
</TABLE>
Share Price
The fund calculates its share price, also called net asset value, as of 4:00
p.m. New York time which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value, mar-
ket prices are used when available. If a market price for a particular security
is not available, the fund will determine the appropriate price for the securi-
ty.
Your shares will be purchased at the offering price, or sold at the net asset
value, next determined after American Funds Service Company receives and ac-
cepts your request. The offering price is the net asset value plus a sales
charge, if applicable.
Capital World Growth and Income Fund / Prospectus 13
<PAGE>
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Sales Charge
A sales charge may apply to your purchase. Your sales charge may be reduced for
larger purchases as indicated below.
<TABLE>
<CAPTION>
Sales Charge as a
Percentage of
....................
Net Dealer Concession
Offering Amount as % of
Investment Price Invested Offering 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 Charge
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 100 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY
BE IMPOSED ON CERTAIN REDEMPTIONS BY ACCOUNTS THAT INVEST WITH NO INITIAL
SALES CHARGE (OTHER THAN EMPLOYER-SPONSORED PLANS), IF REDEMPTIONS ARE MADE
WITHIN ONE YEAR OF PURCHASE. A dealer concession of up to 1% may be paid by
the fund under its Plan of Distribution and/or by American Funds Distributors
on investments made with no initial sales charge.
Reducing Your Sales Charge
You and your immediate family may combine investments to reduce your sales
charge. 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 in the statement of additional information
and "Welcome to the Family."
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 ex-
penses are approved in advance by the fund's board of directors. Up to 0.25% of
average net assets is paid annually to qualified dealers for providing certain
14 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
services pursuant to the fund's Plan of Distribution. The 12b-1 fee paid by the
fund, as a percentage of average net assets, for the previous fiscal year is
indicated earlier under "Fees and Expenses of the Fund." Since these fees are
paid out of the fund's assets on an ongoing basis, over time they will increase
the cost of an investment and may cost you more than paying higher initial
sales charges.
Other Compensation to Dealers
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.
How to Sell Shares
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
Through Your Dealer (certain charges may apply)
. Shares held for you in your dealer's name must be sold through the dealer.
Writing to American Funds Service Company
. Requests must be signed by the registered shareholder(s)
. A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
. Additional documentation may be required for sales of shares held in corpo-
rate, partnership or fiduciary accounts.
Telephoning or Faxing American Funds Service Company, or by using American
FundsLine(R) or American FundsLine OnLine(R):
. Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day
. Checks must be made payable to the registered shareholder
. Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
Capital World Growth and Income Fund / Prospectus 15
<PAGE>
- --------------------------------------------------------------------------------
Transactions by Telephone, Fax, American FundsLine(R), or American FundsLine
OnLine(R)
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all
of these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your ac-
count(s), 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 liabilities (including attorney fees) which may
be incurred in connection with the exercise of these privileges, provided Amer-
ican 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 fradulent instructions.
16 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
Dividends and Distributions
The fund intends to pay dividends to you, usually in March, June, September and
December. Capital gains, if any, are usually distributed in December.
You may elect to reinvest dividends and/or capital gain distributions to pur-
chase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash.
Tax Consequences
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.
Capital gains may be taxed at different rates depending on the length of time
the fund holds its assets.
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 num-
ber (generally your Social Security Number) and certify that you are not sub-
ject 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 divi-
dends paid to certain nonresident alien, non-U.S. partnership and non-U.S. cor-
poration shareholder accounts.
Please see the statement of additional information, "Welcome to the Family,"
and your tax adviser for further information.
Capital World Growth and Income Fund / Prospectus 17
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
results for the past five years. Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been au-
dited by PricewaterhouseCoopers LLP, whose report, along with the fund's finan-
cial statements, are included in the statement of additional information, which
is available upon request.
<TABLE>
<CAPTION>
Year ended November 30
.......................
1998 1997 1996 1995 1994
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $25.89 $23.77 $20.22 $17.81 $17.00
- --------------------------------------------------------------------------------
Income From Investment
Operations:
Net investment income .59 .640 .70 .61 .52
................................................................................
Net gains or losses on
securities (both realized and
unrealized) 3.12 3.045 3.91 2.72 .75
................................................................................
Total from investment
operations 3.71 3.685 4.61 3.33 1.27
- --------------------------------------------------------------------------------
Less Distributions:
Dividends (from net
investment income) (.58) (.650)/1/ (.72)/1/ (.63) (.46)
................................................................................
Distributions (from capital
gains) (1.87) (.915) (.34) (.29) --
................................................................................
Total distributions (2.45) (1.565) (1.06) (.92) (.46)
- --------------------------------------------------------------------------------
Net asset value,
end of period $27.15 $25.89 $23.77 $20.22 $17.81
................................................................................
Total return2 15.51% 16.36% 23.67% 19.41% 7.51%
- --------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of year
(in millions) $8,515 $7,207 $5,139 $3,611 $2,784
................................................................................
Ratio of expenses to
average net assets .78% .82% .85% .88% .87%
................................................................................
Ratio of net income
to average net assets 2.25% 2.53% 3.28% 3.24% 3.11%
................................................................................
Portfolio turnover rate 39.44% 32.41% 30.18% 25.50% 18.66%
</TABLE>
/1/ 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.
/2/ Excludes maximum sales charge of 5.75%.
18 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
NOTES
Capital World Growth and Income Fund / Prospectus 19
<PAGE>
- --------------------------------------------------------------------------------
NOTES
20 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
NOTES
Capital World Growth and Income Fund / Prospectus 21
<TABLE>
For Shareholder For Retirement Plan For Dealer
Services Services Services
<S> <C> <C>
American Funds Call your employer or American Funds
Service Company plan administrator Distributors
800/421-0180 800/421-9900 ext. 11
</TABLE>
For 24-hour Information
<TABLE>
<S> <C>
American American Funds
FundsLine(R) Internet Web site
800/325-3590 http://www.americanfunds.com
</TABLE>
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
------------------------------------------------------------
Multiple Translations
This prospectus may be translated into other languages. If
there are any inconsistencies or ambiguities, the English
text will prevail.
------------------------------------------------------------
OTHER FUND INFORMATION
Annual/Semi-Annual Report to Shareholders
Contains additional information about the fund including
financial statements, investment results, portfolio
holdings, a statement from portfolio management discussing
market conditions and the fund's investment strategies, and
the independent accountants' report (in the annual report).
Statement of Additional Information (SAI)
Contains more detailed information on all aspects of the
fund, including the fund's financial statements.
A current SAI has been filed with the Securities and
Exchange Commission ("SEC") and is incorporated by
reference into this prospectus. The SAI and other related
materials about the fund are available for review or to be
copied at the SEC's Public Reference Room in Washington,
D.C. (1-800-SEC-0330) or on the SEC's Internet Web site at
http://www.sec.gov.
Code of Ethics
Includes a description of the fund's personal investing
policy.
To request a free copy of any of the documents above:
Call American Funds or Write to the Secretary of
Service Company the fund
800/421-0180 ext. 1 333 South Hope Street
Los Angeles, California
90071
Investment Company File No. 811-7338 Printed on recycled paper
<PAGE>
THE FUND PROVIDES SPANISH TRANSLATIONS IN CONNECTION WITH THE PUBLIC OFFERING
AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR AND ACCURATE ENGLISH
TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS FOR THE FUND.
/s/ Vincent P. Corti
Vincent P. Corti
Secretary
[The American Funds Group(r)]
CAPITAL WORLD GROWTH AND INCOME FUND(SM)
PROSPECTUS
February 1, 1999
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF THESE
SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
- --------------------------------------------------------------------------------
Capital World Growth and Income Fund
333 South Hope Street
Los Angeles, California 90071
TICKER SYMBOL: CWGIX NEWSPAPER ABBREV.: CapWGr FUND NO.: 33
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk/Return Summary 2
................................................................................
Fees and Expenses of the Fund 5
................................................................................
Investment Objective, Strategies and Risks 6
................................................................................
Year 2000 9
................................................................................
Management and Organization 10
................................................................................
Shareholder Information 12
................................................................................
Purchase and Exchange of Shares 13
................................................................................
Distribution Arrangements 17
................................................................................
Financial Highlights 18
- --------------------------------------------------------------------------------
</TABLE>
33-010-0299/RRD
Capital World Growth and Income Fund / Prospectus 1
<PAGE>
- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY
The fund seeks to make your investment grow over time and provide you with
current income by investing primarily in stocks of well-established companies
located around the world.
The fund is designed for investors seeking both capital appreciation and
income. In pursuing its objective, the fund tends to invest in stocks that are
more resilient to market declines. An investment in the fund is subject to
risks, including the possibility that the fund may decline in value in response
to certain events, such as changes in securities markets or economic
conditions. In addition, the prices of equity securities held by the fund may
be affected by events specifically involving the issuers of these securities.
Although all securities in the fund's portfolio, including U.S. securities, may
be adversely affected by currency fluctuations or world political, social and
economic instability, investments outside the U.S. may be affected to a greater
extent.
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 bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.
2 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
Investment Results
The following information illustrates how the fund's results fluctuate. Past
results are not an indication of future results.
[BAR CHART APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period FUND
(Calendar Year) RESULTS
- ------------------- ----------
<S> <C>
1994 1.22
1995 21.39
1996 21.55
1997 17.99
1998 16.20
</TABLE>
The fund's highest/lowest quarterly results during this time period were:
X Highest 15.02% (quarter ended December 31, 1998)
X Lowest -9.65% (quarter ended September 30, 1998)
Capital World Growth and Income Fund / Prospectus 3
<PAGE>
- --------------------------------------------------------------------------------
For periods ended December 31, 1998:
<TABLE>
<CAPTION>
Average
Annual The fund with
Total maximum sales MSCI Lipper
Return charge deducted/1/ World/2/ Average/3/
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
One Year 9.50% 24.80% 14.34%
................................................................................
Five Years 14.06% 16.19% 12.22%
................................................................................
Lifetime/4/ 16.04% 16.62% 14.29%
</TABLE>
Yield/1/: 2.11%
(For current yield information call American FundsLine(R) at 1-800-325-3590)
/1/ These fund results were calculated according to a formula which requires
that the maximum sales charge of 5.75% be deducted. Results would be higher
if they were calculated at net asset value.
/2/ Morgan Stanley Capital International World Index measures 23 major stock
markets throughout the world, including the U.S. This index is unmanaged and
does not reflect sales charges, commissions or expenses.
/3/ The Lipper Global Stock Fund Average consists of funds that invest at least
25% of their portfolios in securities traded outside the U.S. and may own
U.S. securities. Sales charges and commissions are not reflected in the
results of the underlying funds.
/4/ The fund began investment operations on March 26, 1993.
4 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUND
The following describes the fees and expenses that you may pay if you buy and
hold shares of the fund.
Shareholders Fees
(fees paid directly from your investment)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.75%/1/
................................................................................
Maximum sales charge imposed on reinvested dividends 0%
................................................................................
Maximum deferred sales charge 0%/2/
................................................................................
Redemption or exchange fees 0%
</TABLE>
/1/ Sales charges are reduced or eliminated for larger purchases.
/2/ A contingent deferred sales charge of 1% applies on certain redemptions made
within 12 months following any purchases you made without a sales charge.
Annual Fund Operating Expenses
(expenses that are deducted from the fund assets)
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
Management Fees 0.43%
................................................................................
Service (12b-1) Fees 0.23%*
................................................................................
Other Expenses 0.12%
................................................................................
Total Annual Fund Operating Expenses 0.78%
</TABLE>
*12b-1 expenses may not exceed 0.30% of the fund's average net assets annually.
Example
This Example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
One year $ 650
................................................................................
Three years $ 810
................................................................................
Five years $ 983
................................................................................
Ten years $1,486
</TABLE>
Capital World Growth and Income Fund / Prospectus 5
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
The fund's investment objective is to provide you with long-term growth of cap-
ital while providing current income. It invests, on a global basis, in common
stocks that are denominated in U.S. dollars or other currencies.
The prices of equity securities held by the fund may decline in response to
certain events, including those directly involving issuers of these securities,
adverse conditions affecting the general economy, overall market declines,
world political, social and economic instability and currency fluctuations. In-
vestments outside the U.S. may be affected by these events to a greater extent
and may also be affected by differing securities regulations, and administra-
tive difficulties such as delays in clearing and settling portfolio transac-
tions.
The fund may also invest in cash or cash equivalents of any issuer. The fund
may invest in cash and cash equivalents to any extent deemed appropriate, in
response to abnormal market conditions. The extent of the fund's cash position
will depend on market conditions, fund purchases and redemptions, and other
factors. In addition, for temporary defensive purposes, the fund may invest
substantially in debt securities and/or money market instruments of issuers
based around the world. This may detract from the achievement of the fund's ob-
jective over the short-term or it may protect the fund during a market down-
turn.
The fund relies on the professional judgment of its investment adviser, Capital
Research and Management Company, to make decisions about the fund's portfolio
securities. The basic investment philosophy of Capital Research and Management
Company is to seek undervalued securities that represent good long-term invest-
ment opportunities. Securities may be sold when they no longer represent good
long-term value.
6 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
Additional Investment Results
(For periods ended December 31, 1998)
<TABLE>
<CAPTION>
Average
Annual
Total The fund with no MSCI Lipper
Return sales charge/1/ World/2/ Average/3/
- ------------------------------------------------------
<S> <C> <C> <C>
One Year 16.20% 24.80% 14.34%
......................................................
Five Years 15.41% 16.19% 12.22%
......................................................
Lifetime/4/ 17.24% 16.62% 14.29%
</TABLE>
/1/ These fund results were calculated according to a formula that is required
for all stock and bond funds.
/2/ Morgan Stanley Capital International World Index measures 23 major stock
markets throughout the world, including the U.S. This index is unmanaged and
does not reflect sales charges, commissions or expenses.
/3/ The Lipper Global Stock Fund Average consists of funds that invest at least
25% of their portfolios in securities traded outside the U.S. and may own
U.S. securities. Sales charges and commissions are not reflected in the
results of the underlying funds.
/4/ The fund began investment operations on March 26, 1993.
Capital World Growth and Income Fund / Prospectus 7
<PAGE>
- --------------------------------------------------------------------------------
The following chart illustrates the industry mix of the funds investment
portfolio as of the ned of the fund's fiscal year, November 30, 1998.
Largest Industry Holdings
<TABLE>
<S> <C>
Telecommunications 14.9%
............................................
Banking 9.3%
............................................
Utilities: Electric & Gas 4.9%
............................................
Beverages & Tobacco 4.8% [PIE CHART APPEARS HERE]
............................................
Business & Public Services 3.7%
............................................
Other Industries 45.3%
............................................
Bonds & Notes 1.1%
............................................
Cash & Equivalents 16.0%
............................................
</TABLE>
<TABLE>
<CAPTION>
Percent Invested Percent of
by Country Net Assets
- ---------------------------------------------
<S> <C>
Europe 35.6%
United Kingdom 11.9
Germany 5.0
Italy 3.6
France 3.2
Netherlands 3.2
Sweden 2.1
Spain 1.5
Denmark 1.1
Switzerland .9
Finland .7
Portugal .6
Norway .5
Other Europe 1.3
............................................
The Americas 33.6%
United States 27.1
Canada 3.9
Argentina 1.3
Brazil .7
Other Americas .6
............................................
Asia/Pacific 12.4%
Australia 4.0
Japan 3.9
Hong Kong 2.3
Philippines 1.0
New Zealand .9
Other Asia/Pacific .3
............................................
Other 1.3%
South Africa .7
Supranational .6
............................................
Bonds, Cash & Equivalents 17.1%
............................................
</TABLE>
<TABLE>
<CAPTION>
Ten Largest
Individual Percent of
Holdings Net Assets
- ---------------------------------------------
<S> <C>
Telecom Italia 2.49%
............................................
Deutsche Telekom 1.84
............................................
Mannesmann 1.27
............................................
Imperial Tobacco 1.16
............................................
Telefonica 1.15
............................................
ING Groep 1.13
............................................
Astra 1.06
............................................
Tele Danmark .87
............................................
RJR Nabisco Holdings .85
............................................
Philip Morris .85
............................................
</TABLE>
Because the fund is actively managed, its holdings will change from time to
time.
8 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
YEAR 2000
The date-related computer issue known as the "Year 2000 problem" could have an
adverse impact on the quality of services provided to the fund and its
shareholders. However, the fund understands that its key service providers --
including the investment adviser and its affiliates -- are taking steps to
address the issue. In addition, the Year 2000 problem may adversely affect the
issuers in which the fund invests. For example, issuers may incur substantial
costs to address the problem. They may also suffer losses caused by corporate
and governmental data processing errors. The fund and its investment adviser
will continue to monitor developments relating to this issue.
Capital World Growth and Income Fund / Prospectus 9
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT AND ORGANIZATION
Investment Adviser
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as 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 total management fee paid by the fund, as a percentage
of average net assets, for the previous fiscal year is discussed earlier under
"Fees and Expenses of the Fund."
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.
Multiple Portfolio Counselor System
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this system the portfolio of a
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 a fund's objective(s) and policies and by Capital Research
and Management Company's investment committee). In addition, Capital Research
and Management Company's research professionals may make investment decisions
with respect to a portion of a fund's portfolio. The primary individual
portfolio counselors for Capital World Growth and Income Fund are listed on the
following page.
10 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Approximate Years of
Experience as
an Investment Professional
(including
the last five
years)
..........................
Years of Experience
as
Portfolio Counselor
(and Research
Portfolio Professional, if
Counselors applicable) for With Capital
for Capital Capital World Research and
World Growth and Income Management
Growth and Fund Company or
Income Fund Primary Title(s) (approximate) Affiliates Total Years
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thierry Chairman of the 6 years (since the 36 years 36 years
Vandeventer Board fund began
of the fund. operations)
Director, Capital
Research and
Management Company
-------------------------------------------------------------------------------
Stephen E. Senior Vice 6 years (since the 26 years 33 years
Bepler President of fund began
the fund. Senior operations)
Vice President,
Capital
Research Company*
-------------------------------------------------------------------------------
Mark E. Senior Vice 6 years (since the 17 years 17 years
Denning President of fund began
the fund. operations)
Director,
Capital Research
and Management
Company
-------------------------------------------------------------------------------
Janet A. Senior Vice 6 years (since the 17 years 23 years
McKinley President of fund began
the fund. operations)
Director,
Capital Research
and Management
Company
-------------------------------------------------------------------------------
Carl M. Vice President of 1 year (plus 5 8 years 12 years
Kawaja the years as a
fund. Vice research
President, Capital professional prior
Research to becoming a
Company* portfolio
counselor for the
fund)
-------------------------------------------------------------------------------
Gregg E. Senior Vice 6 years 27 years 27 years
Ireland President, Capital
Research and
Management Company
-------------------------------------------------------------------------------
</TABLE>
The fund began investment operations on March 26, 1993.
* Company affiliated with Capital Research and Management Company.
Capital World Growth and Income Fund / Prospectus 11
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER INFORMATION
Shareholder Services
American Funds Service Company, the fund's transfer agent, offers you a wide
range of services you can use to alter your investment program should your
needs and circumstances change. These services 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. For your convenience, American Funds Service
Company has four service centers across the country.
American Funds Service Company Service Areas
[MAP OF AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS APPEARS HERE]
<TABLE>
<S> <C> <C> <C>
WESTERN SERVICE WESTERN CENTRAL EASTERN CENTRAL EASTERN SERVICE
CENTER SERVICE CENTER SERVICE CENTER CENTER
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Norfolk, Virginia
92822-2205 78265-9522 Indiana 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 46206-6007 Fax: 757/670-4773
Fax: 317/735-6620
</TABLE>
A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER ARE DESCRIBED 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.
YOU MAY INVEST IN THE FUND THROUGH VARIOUS RETIREMENT PLANS. However,
some retirement plans or accounts held by investment dealers may not offer
certain services. If you have any questions, please contact your plan
administrator/trustee or dealer.
12 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES
Purchase
Generally, you may open an account by contacting any investment dealer
authorized to sell the fund's shares. You may purchase additional shares using
various options described in the statement of additional information and
"Welcome to the Family."
Exchange
You may exchange your shares into other funds in The American Funds Group gen-
erally without a sales charge. Exchange of shares from the money market funds
initially purchased without a sales charge generally will be subject to the ap-
propriate sales charge. Exchanges have the same tax consequences as ordinary
sales and purchases. See "Transactions by Telephone..." for information regard-
ing electronic exchanges.
THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE
IS CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A
PERIOD OF TIME, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO
REJECT ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY
INVESTOR WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES
ACTUAL OR POTENTIAL HARM TO THE FUND.
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 through payroll deduction $ 25
</TABLE>
Share Price
The fund calculates its share price, also called net asset value, as of 4:00
p.m. New York time which is the normal close of trading on the New York Stock
Exchange, every day the Exchange is open. In calculating net asset value, mar-
ket prices are used when available. If a market price for a particular security
is not available, the fund will determine the appropriate price for the securi-
ty.
Your shares will be purchased at the offering price, or sold at the net asset
value, next determined after American Funds Service Company receives and ac-
cepts your request. The offering price is the net asset value plus a sales
charge, if applicable.
Capital World Growth and Income Fund / Prospectus 13
<PAGE>
- --------------------------------------------------------------------------------
Sales Charge
A sales charge may apply to your purchase. Your sales charge may be reduced for
larger purchases as indicated below.
<TABLE>
<CAPTION>
Sales Charge as a
Percentage of
....................
Net Dealer Concession
Offering Amount as % of
Investment Price Invested Offering 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 Charge
Investments of $1 million or more and investments made by employer-sponsored
defined contribution-type plans with 100 or more eligible employees are sold
with no initial sales charge. A 1% CONTINGENT DEFERRED SALES CHARGE MAY
BE IMPOSED ON CERTAIN REDEMPTIONS BY ACCOUNTS THAT INVEST WITH NO INITIAL
SALES CHARGE (OTHER THAN EMPLOYER-SPONSORED PLANS), IF REDEMPTIONS ARE MADE
WITHIN ONE YEAR OF PURCHASE. A dealer concession of up to 1% may be paid by
the fund under its Plan of Distribution and/or by American Funds Distributors
on investments made with no initial sales charge.
Reducing Your Sales Charge
You and your immediate family may combine investments to reduce your sales
charge. 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 in the statement of additional information
and "Welcome to the Family."
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 ex-
penses are approved in advance by the fund's board of directors. Up to 0.25% of
average net assets is paid annually to qualified dealers for providing certain
14 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
services pursuant to the fund's Plan of Distribution. The 12b-1 fee paid by the
fund, as a percentage of average net assets, for the previous fiscal year is
indicated earlier under "Fees and Expenses of the Fund." Since these fees are
paid out of the fund's assets on an ongoing basis, over time they will increase
the cost of an investment and may cost you more than paying higher initial
sales charges.
Other Compensation to Dealers
American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.
How to Sell Shares
Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:
Through Your Dealer (certain charges may apply)
. Shares held for you in your dealer's name must be sold through the dealer.
Writing to American Funds Service Company
. Requests must be signed by the registered shareholder(s)
. A signature guarantee is required if the redemption is:
-- Over $50,000;
-- Made payable to someone other than the registered shareholder(s); or
-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.
. Additional documentation may be required for sales of shares held in corpo-
rate, partnership or fiduciary accounts.
Telephoning or Faxing American Funds Service Company, or by using American
FundsLine(R) or American FundsLine OnLine(R):
. Redemptions by telephone or fax (including American FundsLine and American
FundsLine OnLine) are limited to $50,000 per shareholder each day
. Checks must be made payable to the registered shareholder
. Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
Capital World Growth and Income Fund / Prospectus 15
<PAGE>
- --------------------------------------------------------------------------------
Transactions by Telephone, Fax, American FundsLine(R), or American FundsLine
OnLine(R)
Generally, you are automatically eligible to use these services for redemptions
and exchanges unless you notify us in writing that you do not want any or all
of these services. You may reinstate these services at any time.
Unless you decide not to have telephone, fax, or computer services on your ac-
count(s), 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 liabilities (including attorney fees) which may
be incurred in connection with the exercise of these privileges, provided Amer-
ican 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 fradulent instructions.
16 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
Dividends and Distributions
The fund intends to pay dividends to you, usually in March, June, September and
December. Capital gains, if any, are usually distributed in December.
You may elect to reinvest dividends and/or capital gain distributions to pur-
chase additional shares of this fund or any other fund in The American Funds
Group or you may elect to receive them in cash.
Tax Consequences
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.
Capital gains may be taxed at different rates depending on the length of time
the fund holds its assets.
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 num-
ber (generally your Social Security Number) and certify that you are not sub-
ject 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 divi-
dends paid to certain nonresident alien, non-U.S. partnership and non-U.S. cor-
poration shareholder accounts.
Please see the statement of additional information, "Welcome to the Family,"
and your tax adviser for further information.
Capital World Growth and Income Fund / Prospectus 17
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
results for the past five years. Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been au-
dited by PricewaterhouseCoopers LLP, whose report, along with the fund's finan-
cial statements, are included in the statement of additional information, which
is available upon request.
<TABLE>
<CAPTION>
Year ended November 30
.......................
1998 1997 1996 1995 1994
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $25.89 $23.77 $20.22 $17.81 $17.00
- --------------------------------------------------------------------------------
Income From Investment
Operations:
Net investment income .59 .640 .70 .61 .52
................................................................................
Net gains or losses on
securities (both realized and
unrealized) 3.12 3.045 3.91 2.72 .75
................................................................................
Total from investment
operations 3.71 3.685 4.61 3.33 1.27
- --------------------------------------------------------------------------------
Less Distributions:
Dividends (from net
investment income) (.58) (.650)/1/ (.72)/1/ (.63) (.46)
................................................................................
Distributions (from capital
gains) (1.87) (.915) (.34) (.29) --
................................................................................
Total distributions (2.45) (1.565) (1.06) (.92) (.46)
- --------------------------------------------------------------------------------
Net asset value,
end of period $27.15 $25.89 $23.77 $20.22 $17.81
................................................................................
Total return2 15.51% 16.36% 23.67% 19.41% 7.51%
- --------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of year
(in millions) $8,515 $7,207 $5,139 $3,611 $2,784
................................................................................
Ratio of expenses to
average net assets .78% .82% .85% .88% .87%
................................................................................
Ratio of net income
to average net assets 2.25% 2.53% 3.28% 3.24% 3.11%
................................................................................
Portfolio turnover rate 39.44% 32.41% 30.18% 25.50% 18.66%
</TABLE>
/1/ 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.
/2/ Excludes maximum sales charge of 5.75%.
18 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
NOTES
Capital World Growth and Income Fund / Prospectus 19
<PAGE>
- --------------------------------------------------------------------------------
NOTES
20 Capital World Growth and Income Fund / Prospectus
<PAGE>
- --------------------------------------------------------------------------------
NOTES
Capital World Growth and Income Fund / Prospectus 21
<TABLE>
For Shareholder For Retirement Plan For Dealer
Services Services Services
<S> <C> <C>
American Funds Call your employer or American Funds
Service Company plan administrator Distributors
800/421-0180 800/421-9900 ext. 11
</TABLE>
For 24-hour Information
<TABLE>
<S> <C>
American American Funds
FundsLine(R) Internet Web site
800/325-3590 http://www.americanfunds.com
</TABLE>
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
------------------------------------------------------------
Multiple Translations
This prospectus may be translated into other languages. If
there are any inconsistencies or ambiguities, the English
text will prevail.
------------------------------------------------------------
OTHER FUND INFORMATION
Annual/Semi-Annual Report to Shareholders
Contains additional information about the fund including
financial statements, investment results, portfolio
holdings, a statement from portfolio management discussing
market conditions and the fund's investment strategies, and
the independent accountants' report (in the annual report).
Statement of Additional Information (SAI)
Contains more detailed information on all aspects of the
fund, including the fund's financial statements.
A current SAI has been filed with the Securities and
Exchange Commission ("SEC") and is incorporated by
reference into this prospectus. The SAI and other related
materials about the fund are available for review or to be
copied at the SEC's Public Reference Room in Washington,
D.C. (1-800-SEC-0330) or on the SEC's Internet Web site at
http://www.sec.gov.
Code of Ethics
Includes a description of the fund's personal investing
policy.
To request a free copy of any of the documents above:
Call American Funds or Write to the Secretary of
Service Company the fund
800/421-0180 ext. 1 333 South Hope Street
Los Angeles, California
90071
Investment Company File No. 811-7338 Printed on recycled paper
<PAGE>
CAPITAL WORLD GROWTH AND INCOME FUND, INC.
Part B
Statement of Additional Information
FEBRUARY 1, 1999
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, 1999. 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>
Certain Investment Limitations and Guidelines 2
Description of Certain Securities and Investment Techniques 2
Fundamental Policies and Investment Restrictions 6
Fund Organization 8
Fund Directors and Officers 9
Management 13
Dividends, Distributions and Federal Taxes 15
Purchase of Shares 19
Selling Shares 25
Shareholder Account Services and Privileges 27
Execution of Portfolio Transactions 29
General Information 30
Investment Results and Related Statistics 31
Description of Ratings for Debt Securities 33
Financial Statements Attached
</TABLE>
CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES
The following limitations and guidelines are considered at the time of
purchase, under normal market conditions, and are based on a percentage of the
fund's net assets unless otherwise noted. This summary is not intended to
reflect all of the fund's investment limitations.
DEBT SECURITIES
- - The fund may invest up to 10% of its 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.
NON-U.S. SECURITIES
- - The fund will invest in securities of issuers domiciled in at least three
countries.
- - No more than 40% of the fund's assets will be invested in issuers domiciled
in any one country.
DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES
The fund may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.
The descriptions below are intended to supplement the material in the
prospectus under "Investment Objective, Strategies and Risks."
EQUITY SECURITIES -- Equity securities represent an ownership position in a
company. 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.
Certain securities purchased by the fund, particularly smaller capitalization
stocks, may involve large price swings and potential for loss.
INVESTING IN SMALLER CAPITALIZATION STOCKS -- The fund may invest from time to
time in the stocks of smaller companies (typically companies with market
capitalizations of less than $1.2 billion at the time of purchase). Capital
Research and Management Company (the "Investment Adviser") believes that the
issuers of smaller capitalization stocks often provide attractive investment
opportunities. However, investing in smaller capitalization stocks can involve
greater risk than is customarily associated with investing in stocks of larger,
more established companies. For example, smaller companies often have limited
product lines, markets, or financial resources, may be dependent for management
on one or a few key persons, and can be more susceptible to losses. Also,
their securities may be thinly traded (and therefore have to be sold at a
discount from current prices or sold in small lots over an extended period of
time), may be followed by fewer investment research analysts, and may be
subject to wider price swings thus creating a greater chance of loss than
securities or larger capitalization companies.
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 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 the
Investment Adviser. The fund does not currently intend to invest more than 5%
of its 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.
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, like other 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.
The Investment Adviser 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.
OTHER SECURITIES -- The fund may also invest in securities that have equity and
debt characteristics such as non-convertible preferred stocks and convertible
securities. These securities may at times resemble equity more than debt and
vice versa.
Non-convertible preferred stocks are similar to debt in that they have a stated
dividend rate akin to the coupon of a bond or note even though they are often
classified as equity securities. The prices and yields of non-convertible
preferred stocks generally move with changes in interest rates and the issuer's
credit quality, similar to the factors affecting debt securities.
Bonds, preferred stocks, and other securities may sometimes be converted into
common stock or other securities at a stated exchange ratio. These securities
prior to conversion pay a fixed rate of interest or a dividend. Because
convertible securities have both debt and equity characteristics, their value
varies in response to many factors, including the value of the underlying
equity, general market and economic conditions, convertible market valuations,
as well as changes in interest rates, credit spreads, and the issuer's credit
quality.
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; expropriation or confiscatory
taxation; 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 the Investment Adviser, 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 the Investment Adviser 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, the Investment Adviser takes into account such factors as where the
company is legally organized, maintains its 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.
The risks described above are potentially heightened in connection with
investments in developing countries. Although there is no universally accepted
definition, a developing country is generally considered to be a country which
is in the initial stages of its industrialization cycle with a low per capita
gross national product. For example, political and/or economic structures in
these countries may be in their infancy and developing rapidly. Historically,
the markets of developing countries have been more volatile than the markets of
developed countries. The fund may only invest in securities of issuers in
developing countries to a limited extent.
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. 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. 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. 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 limit the extent to which
the fund may enter into forward contracts. Such transactions may also affect,
for U.S. federal income tax purposes, the character and timing of income, gain
or loss recognized by the fund.
RESTRICTED SECURITIES AND LIQUIDITY -- The fund may purchase securities subject
to restrictions on resale. All such securities whose principal trading market
is in the U.S. will be considered illiquid unless they have been specifically
determined to be liquid under procedures which may be adopted by the fund's
board of directors, taking into account factors such as the frequency and
volume of trading, the commitment of dealers to make markets and the
availability of qualified investors, all of which can change from time to time.
The fund may incur certain additional costs in disposing of illiquid
securities.
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. Repurchase
agreements permit the fund to maintain liquidity and earn income over periods
of time as short as overnight. The seller must maintain with the fund's
custodian collateral equal to at least 100% of the repurchase price, including
accrued interest, as monitored daily by the Investment Adviser. The fund will
only enter into repurchase agreements involving securities in which it could
otherwise invest and with selected banks and securities dealers whose financial
condition is monitored by the Investment Adviser. If the seller under the
repurchase agreement defaults, the fund may incur a loss if the value of the
collateral securing the repurchase agreement has declined and may incur
disposition costs in connection with liquidating the collateral. If bankruptcy
proceedings are commenced with respect to the seller, 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.
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.
FORWARD COMMITMENTS -- The fund may enter into commitments to purchase or sell
securities at a future date. When the fund agrees to purchase such securities
it assumes the risk of any decline in value of the security beginning on the
date of the agreement. When the fund agrees to sell such securities, it does
not participate in further gains or losses with respect to the securities
beginning on the date of the agreement. If the other party to such a
transaction fails to deliver or pay for the securities, the fund could miss a
favorable price or yield opportunity, or could experience a loss beginning on
the date of the agreement.
As the fund's aggregate commitments under these transactions increase, the
opportunity for leverage similarly may increase. The fund will not use these
transactions for the purpose of leveraging and will segregate liquid assets
which will be marked to market daily in an amount sufficient to meet its
payment obligations in these transactions. Although these transactions will
not be entered into for leveraging purposes, to the extent the fund's aggregate
commitments under these transactions exceed its segregated assets, the fund
temporarily could be in a leveraged position (because it may have an amount
greater than its net assets subject to market risk). Should market values of
the fund's portfolio securities decline while the fund is in a leveraged
position, greater depreciation of its net assets will likely occur than were it
not in such a position. The fund will not borrow money to settle these
transactions and, therefore, will liquidate other portfolio securities in
advance of settlement if necessary to generate additional cash to meet its
obligations thereunder.
FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
The fund has adopted the following fundamental policies and investment
restrictions which may not be changed without a majority vote of its
outstanding shares. Such majority is defined by law as the vote of the lesser
of (i) 67% or more of the outstanding voting securities present at a meeting,
if the holders of more than 50% of the outstanding voting securities are
present in person or by proxy, or (ii) more than 50% of the outstanding voting
securities. Investment limitations expressed in the following restrictions are
considered at the time securities are purchased and are based on the fund's net
assets unless otherwise indicated. 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 as amended (the "1940 Act");
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).
For purposes of Investment Restriction number 7, 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 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 purchasing 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 ORGANIZATION
The fund, an open-end, diversified management investment company, was organized
as a Maryland corporation on November 4, 1992.
All fund operations are supervised by the fund's Board of Directors. The board
meets periodically and performs duties required by applicable state and federal
laws. Members of the board who are not employed by the Investment Adviser or
its affiliates are paid certain fees for services rendered to the fund as
described in "Fund Directors and Officers - Directors and Director
Compensation" below. They may elect to defer all or a portion of these fees
through a deferred compensation plan in effect for the fund.
FUND DIRECTORS AND OFFICERS
DIRECTORS AND DIRECTOR COMPENSATION
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION PRINCIPAL AGGREGATE TOTAL TOTAL
AND AGE WITH OCCUPATION(S) COMPENSATION COMPENSATION NUMBER
REGISTRANT DURING (INCLUDING (INCLUDING OF FUND
PAST 5 YEARS VOLUNTARILY VOLUNTARILY BOARDS
DEFERRED DEFERRED ON WHICH
COMPENSATION/1/) COMPENSATION/1/) DIRECTOR
FROM THE FUND FROM ALL FUNDS SERVES
DURING FISCAL MANAGED BY /2/
YEAR ENDED CAPITAL RESEARCH
11/30/98 AND
MANAGEMENT
COMPANY OR ITS
AFFILIATES/2/
FOR THE YEAR
ENDED 11/30/98
<S> <C> <C> <C> <C> <C>
H. Frederick Director Private $15,950/4/ $189,650 18
Christie Investor;
P.O. Box 144 former
Palos Verdes President and
Estates, CA Chief
90274 Executive
Age: 65 Officer, The
Mission Group
(non-utility
holding
company,
subsidiary of
Southern
California
Edison
Company)
+Paul G. President Executive None/3/ None/3/ 14
Haaga, Jr. and Vice
333 South Director President and
Hope Street Director,
Los Angeles, Capital
CA 90071 Research and
Age: 50 Management
Company
Mary Myers Director Private $15,050/4/ $102,950 5
Kauppila Investor;
One Winthrop former Owner
Square and
Boston, MA President,
02110 Energy
Age: 44 Investment,
Inc.
Gail L. Neale Director President, $15,050/4/ $65,450 5
The Lovejoy The Lovejoy
Consulting Consulting
Group Group, Inc.;
154 Prospect former
Parkway Executive
Burlington, Vice
VT 05401 President of
Age: 63 the Salzburg
Seminar;
former
Director of
Development
and the
Capital
Campaign,
Hampshire
College
Robert J. Director Chichele $15,050 $40,150 3
O'Neill Professor of
Whitney, OXON the History
United of War and
Kingdom Fellow of All
Age: 62 Souls
College,
University of
Oxford
Donald E. Director Retired; $15,050/4/ $74,950 4
Petersen former
255 East Chairman of
Brown the Board and
Birmingham, Chief
MI 48009 Executive
Age: 72 Officer, Ford
Motor Company
Stefanie Director Actor; $15,050 $31,850 2
Powers President,
2661 Hutton William
Drive Holden
Beverly Wildlife
Hills, CA Foundation
90210
Age: 56
Frank Stanton Director Retired; $15,950 $33,550 2
25 West 52nd former
Street President,
New York, NY CBS Inc.
10019 (1946-1973)
Age: 90
+Thierry Chairman Director, None/3/ None/3/ 2
Vandeventer of the Capital
3 Place des Bergues Board and Research and
1201 Geneva, Principal Management
Switzerland Executive Company
Age: 63 Officer
Charles Wolf, Director Economic $15,550 $31,150 2
Jr. Adviser and
1700 Main Corporate
Street Fellow in
Santa Monica, International
CA 90407 Economics,
Age: 74 The RAND
Corporation
</TABLE>
+ Directors who are considered "interested persons" of the fund as defined in
the 1940 Act on the basis of their affiliation with the fund's Investment
Adviser, Capital Research and Management Company.
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, Inc., 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; Endowments, Inc. whose shareholders are limited
to (i) any entity exempt from taxation under Section 501 (c)(3) of the Internal
Revenue Code of 1986, as amended ("501(c)(3) organization"); (ii) any trust,
the presnet or future beneficiary of which is a 501 (c)(3) organization, and
(iii) any other entitiy formed for the primary purpose of benefiting a 501
(c)(3) organization. An affiliate of Capital Research and Management Company,
Capital International, Inc., manages Emerging Markets Growth Fund, 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 deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) as of the fiscal year
ended November 30, 1998 for participating Directors is as follows: H. Frederick
Christie ($47,460); Mary Myers Kauppila ($99,209); Gail L. Neale ($64,516);
Donald E. Petersen ($52,504). Amounts deferred and accumulated earnings
thereon are not funded and are general unsecured liabilities of the fund until
paid to the Director.
OFFICERS
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE POSITION(S) PRINCIPAL
HELD WITH OCCUPATION(S) DURING
REGISTRANT PAST 5 YEARS
<S> <C> <C> <C>
Thierry Vandeventer
(see above)
Paul G. Haaga, Jr.
(see above)
Larry P. Clemmensen 51 Senior Vice Senior Vice President
333 South Hope President and Director,
Street Capital Research and
Los Angeles, CA Management Company;
90071 President and
Director, The Capital
Group Companies, Inc.
Stephen E. Bepler 56 Senior Vice Senior Vice President,
630 Fifth Avenue President Capital Research
New York, NY 10111 Company
Mark E. Denning 41 Senior Vice Director, Capital
President Research and
25 Bedford Street Management Company;
London, England Senior Vice President
WC2E 9HN and Director, Capital
Research Company
Janet A. McKinley 44 Senior Vice Director, Capital
630 Fifth Avenue President Research and
New York, NY 10111 Management Company;
Senior Vice President,
Capital Research
Company
Carl M. Kawaja 34 Vice Vice President,
P.O. Box 7650 President Capital Research
San Francisco, CA Company
94120
Vincent P. Corti 42 Secretary Vice President - Fund
333 South Hope Business Management
Street Group, Capital
Los Angeles, CA Research and
90071 Management Company
R. Marcia Gould 44 Treasurer Vice President - Fund
135 S. State Business Management
College Blvd. Group, Capital
Brea, CA 92821 Research and Management Company
Diana J. Prohoroff 49 Assistant Assistant Vice
135 S. State Treasurer President - Fund
College Blvd. Business Management
Brea, CA 92821 Group, Capital
Research and Management Company
</TABLE>
All of the officers listed are officers or employees of the Investment Adviser
or affiliated companies. No compensation is paid by the fund to any Director
or officer who is a director, officer or employee of the Investment Adviser or
affiliated companies. The fund pays fees of $12,500 per annum to Directors who
are not affiliated with the Investment Adviser, plus $1,000 for each Board of
Directors meeting attended, plus $500 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 January 1,
1999 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 managing more than $200 billion of
stocks, bonds and money market instruments and serves over eight 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
is dated February 1, 1993. The Agreement will continue in effect until October
31, 1999, unless sooner terminated, and may be renewed from year to year
thereafter, provided that any such renewal has been specifically approved at
least annually by (i) the Board of Directors of the fund, or by the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the fund, and (ii) the vote of a majority of Directors who are not parties to
the Agreement or interested persons (as defined in the 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. The Agreement provides that the Investment Adviser has no liability
to the fund for its acts or omissions in 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 it without penalty, upon
60 days' written notice to the other party and that the Agreement automatically
terminates in the event of its assignment (as defined in the 1940 Act).
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of 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.
As compensation for its services, the Investment Adviser receives a monthly fee
which is accrued daily, calculated at the 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. For the fiscal years ended November 30, 1998, 1997 and 1996, the
Investment Adviser received advisory fees of $34,372,000, $27,481,000 and
$19,343,000, 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, 3500 Wiseman Boulevard, San
Antonio, TX 78251, 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 for the fiscal year ended
November 30, 1998 amounted to $5,280,000 after allowance of $25,992,000 to
dealers. During the fiscal years ended November 30, 1997 and 1996, the
Principal Underwriter retained $7,994,000 and $4,496,000 after allowance of
$40,304,000 and $22,759,000, respectively.
As required by rule 12b-1 and the 1940 Act, 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 include improved shareholder services, savings to the fund in transfer
agency costs, savings to the fund in advisory fees and other expenses, benefits
to the investment process from growth or stability of assets and maintenance of
a financially healthy management organization. The selection and nomination of
Directors who are not "interested persons" of the fund are 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 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, any defined contribution plan qualified under section 401(a) of
the Internal Revenue Code including a "401(k)" plan with 100 or more eligible
employees, or a community foundation).
Commissions 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 any
"401(k)" plan with 100 or more eligible employees) in excess of the Plan
limitation not reimbursed during the most recent fiscal quarter are recoverable
for five quarters, provided that such commissions do not exceed the annual
expense limit. After five quarters, commissions are not recoverable. During
the fiscal year ended November 30, 1998, the fund paid or accrued $18,262,000
for compensation to dealers 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, as amended (the "Code"). Under Subchapter M, if
the fund distributes within specified times at least 90% of the sum of its
investment company taxable income (net investment income and the excess of net
short-term capital gains over net long-term capital losses) and its tax-exempt
interest, if any, it generally will be taxed only on that portion 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; and (b) diversify its holdings so that at the end of
each fiscal quarter, (i) at least 50% of the market value of the fund's assets
is represented by cash, cash items, U.S. Government securities, securities of
other regulated investment companies, and other securities (but such other
securities must be limited, in respect of any one issuer, to an amount not
greater than 5% of the fund's total assets and to not more than 10% of the
outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of its total 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 distribute net investment income and net
capital gains so as 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. 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.
The fund also intends to continue distributing to shareholders all of the
excess of net long-term capital gain over net short-term capital loss on sales
of securities. If the net asset value of shares of the fund should, by reason
of a distribution of realized capital gains, be reduced below a shareholder's
cost, such distribution would to that extent be a return of capital to that
shareholder even though taxable to the shareholder, and a sale of shares by a
shareholder at net asset value at that time would establish a capital loss for
federal tax purposes.
Except for transactions the fund has identified as hedging transactions, the
fund is required for federal income tax purposes to recognize as income for
each taxable year its net unrealized gains and losses on forward currency
contracts as of the end of the year as well as those actually realized during
the year.
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.
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, 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.
If a shareholder exchanges or otherwise disposes of shares of the fund within
90 days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund in The American Funds Group, the
sales charge previously incurred in acquiring the fund's shares shall not be
taken into account (to the extent such previous sales charges do not exceed the
reduction in sales charges) for the purpose of determining the amount of gain
or loss on the exchange, but will be treated as having been incurred in the
acquisition of such other shares. Also, any loss realized on a redemption or
exchange of shares of a fund will be disallowed to the extent substantially
identical shares are reacquired within the 61-day period beginning 30 days
before and ending 30 days after the shares are disposed of.
Under the Code, distributions of net investment income by the fund to a
shareholder who, as to the U.S., is a nonresident alien individual, foreign
trust or estate, non-U.S. corporation or non-U.S. partnership (a non-U.S.
shareholder) will be subject to U.S. withholding tax (at a rate of 30% or lower
treaty rate). Withholding will not apply if a dividend paid by the fund to a
non-U.S. shareholder is "effectively connected" with a U.S. trade or business,
in which case the reporting and withholding requirements applicable to U.S.
citizens, U.S. residents, or domestic corporations will apply. However, if the
distribution is effectively connected with the conduct of the non-U.S.
shareholder's trade or business within the U.S., the distribution would be
included in the net income of the shareholder and subject to U.S. income tax at
the applicable marginal rate. Distributions of net long-term capital gains are
not subject to tax withholding, but in the case of a non-U.S. shareholder who
is a nonresident alien individual, such distributions ordinarily will be
subject to U.S. income tax at a rate of 30% if the individual is physically
present in the U.S. for more than 182 days during the taxable 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 gains on assets held more than one year is 20%; 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 taxable income in excess of $100,000 for a taxable year
will be required to pay an additional amount of tax liability 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 a shareholder with respect
to either distributions from the fund or disposition of fund shares 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 Individual Retirement Account ("IRA")
each year (prior to the tax return filing deadline for that year) whereby
earnings on investments are tax-deferred. The maximum amount that an
individual may contribute to all IRA's (deductible, nondeductible and Roth
IRA's) per year is the lesser of $2,000 or the individual's compensation for
the year. 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 $50 minimum (except where a
Minimums and Fund lower minimum is noted under
Numbers" for initial "Investment Minimums and Fund
investment minimums. Numbers").
By Visit any investment Mail directly to your
contacting dealer who is investment dealer's address
your registered in the printed on your account
investment state where the statement.
dealer purchase is made and
who has a sales
agreement with
American Funds
Distributors.
By mail Make your check Fill out the account
payable to the fund additions form at the bottom
and mail to the of a recent account
address indicated on statement, make your check
the account payable to the fund, write
application. Please your account number on your
indicate an check, and mail the check and
investment dealer on form in the envelope provided
the account with your account statement.
application.
By Please contact your Complete the "Investments by
telephone investment dealer to Phone" section on
open account, then the account application or
follow the procedures American FundsLink
for additional Authorization Form. Once you
investments. 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 and Computer
Purchases, Redemptions and
Exchanges" below).
By Please contact your Complete the American
computer investment dealer to FundsLink Authorization Form.
open account, then Once you establish the
follow the procedures privilege, you, your
for additional financial adviser or any
investments. person with your account
information may access
American FundsLine OnLine(r)
on the Internet and make
investments by computer
(subject to conditions noted
in "Shareholder Account
Services and Privileges -
Telephone and Computer
Purchases, Redemptions and
Exchanges" below).
By wire Call 800/421-0180 to Your bank should wire your
obtain your account additional investments in the
number(s), if same manner as described
necessary. Please under "Initial Investment."
indicate an
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>
FUND MINIMUM FUND
INITIAL NUMBER
INVESTMENT
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund(r) $1,000 02
American Balanced Fund(r) 500 11
American Mutual Fund(r) 250 03
Capital Income Builder(r) 1,000 12
Capital World Growth and Income Fund(sm) 1,000 33
EuroPacific Growth Fund(r) 250 16
Fundamental Investors(sm) 250 10
The Growth Fund of America(r) 1,000 05
The Income Fund of America(r) 1,000 06
The Investment Company of America(r) 250 04
The New Economy Fund(r) 1,000 14
New Perspective Fund(r) 250 07
SMALLCAP World Fund(r) 1,000 35
Washington Mutual Investors Fund(sm) 250 01
BOND FUNDS
American High-Income Municipal Bond 1,000 40
Fund(r)
American High-Income Trust(sm) 1,000 21
The Bond Fund of America(sm) 1,000 08
Capital World Bond Fund(r) 1,000 31
Intermediate Bond Fund of America(sm) 1,000 23
Limited Term Tax-Exempt Bond Fund of 1,000 43
America(sm)
The Tax-Exempt Bond Fund of America(r) 1,000 19
The Tax-Exempt Fund of California(r)* 1,000 20
The Tax-Exempt Fund of Maryland(r)* 1,000 24
The Tax-Exempt Fund of Virginia(r)* 1,000 25
U.S. Government Securities Fund(sm) 1,000 22
MONEY MARKET FUNDS
The Cash Management Trust of America(r) 2,500 09
The Tax-Exempt Money Fund of America(sm) 2,500 39
The U.S. Treasury Money Fund of 2,500 49
America(sm)
___________
*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 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).
SALES CHARGES -- The sales charges you pay when purchasing the stock,
stock/bond, and bond funds of The American Funds Group are set forth below.
The money market funds of The American Funds Group are offered at net asset
value. (See "Investment Minimums and Fund Numbers" for a listing of the
funds.)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Amount of Purchase SALES CHARGE AS DEALER
at the Offering Price PERCENTAGE OF THE: CONCESSION
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 3.63 3.50 2.75
$250,000
$250,000 but less than 2.56 2.50 2.00
$500,000
$500,000 but less than 2.04 2.00 1.60
$1,000,000
$1,000,000 or more none none (see below)
</TABLE>
PURCHASES NOT SUBJECT TO SALES CHARGES -- Investment of $1 million or more
and investments made by employer-sponsored defined contribution-type plans with
100 or more eligible employees are sold with no initial sales charge. A
contingent deferred sales charge may be imposed on certain redemptions by these
accounts made within one year of purchases. Investments by retirement plans,
foundations or endowments with $50 million or more in assets and
employer-sponsored defined contribution-type plans with 100 or more eligible
employees made with no sales charge are not subject to a contingent deferred
sales charge.
In addition, 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 $50 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.
DEALER COMMISSIONS -- 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 100 or more eligible employees, and for purchases made at
net asset value by certain retirement plans of organizations with collective
retirement plan assets of $50 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.
OTHER COMPENSATION TO DEALERS -- American Funds Distributors, Inc., at its
expense (from a designated percentage of its income), currently provides
additional compensation to dealers. Currently these payments are limited to the
top 100 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. The Principal Underwriter will, on an annual basis, determine
the advisability of continuing these payments.
Qualified dealers currently are paid a continuing service fee not to exceed
0.25% of average net assets (0.15% in the case of the money market funds)
annually in order to promote selling efforts and to compensate them for
providing certain services. These services include processing purchase and
redemption transactions, establishing shareholder accounts and providing
certain information and assistance with respect to the fund.
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.
STATEMENT OF INTENTION -- You may enter into a non-binding commitment to
purchase shares of a fund(s) over a 13-month period and receive the same sales
charge as if all shares had been purchased at once. This includes purchases
made during the previous 90 days, but does not include appreciation of your
investment or reinvested distributions. 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"). 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 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.
When the trustees of certain retirement plans purchase shares 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.
CONCURRENT PURCHASES -- You may combine purchases of two or more funds in The
American Funds Group, except direct purchases of the money market funds.
Shares of 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, as well as your holdings in
Endowments (shares of which may be owned only by tax-exempt organizations), to
determine your sales charge on investments in accounts eligible to be
aggregated, or when making a gift to an individual or charity. Direct
purchases of the money market funds are excluded.
PRICE OF SHARES -- Shares are purchased at the offering price next determined
after the purchase order is received and accepted 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. For example, if the Exchange closes at 1:00 p.m. on one day and at 4:00
p.m. on the next, the fund's share price would be determined as of 4:00 p.m.
New York time on both days. The New York Stock Exchange is currently closed on
weekends and on the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas Day.
All portfolio securities of funds managed by Capital Research and Managment
Company (other than money market funds) are valued, and the net asset value per
share is determined as follows:
1. Equity securities, including depositary receipts, are valued at the last
reported sale price on the exchange or market 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 equity
securities are traded on more than one exchange, the securities are valued on
the exchange or market determined by the Investment Adviser to be the broadest
and most representative market, which may be either a securities exchange or
the over-the-counter market. Fixed-income securities are valued at prices
obtained from a pricing service, when such prices are available; however, in
circumstances where the Investment Adviser deems it appropriate to do so, such
securities will be valued at the mean quoted bid and asked prices or at prices
for securities of comparable maturity, quality and type.
Securities with original maturities of one year or less having 60 days or less
to maturity are amortized to maturity based on their cost if acquired within 60
days of maturity or, if already held on the 60th day, based on the value
determined on the 61st day. Forward currency contracts are valued at the mean
of representative quoted bid and asked prices.
Assets or liabilities initially expressed in terms of non-U.S. 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.
Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith under
policies approved by the fund's Board. The fair value of all other assets is
added to the value of securities to arrive at the total assets;
2. Liabilities, including accruals of taxes and other expense items, are
deducted from total assets; and
3. Net assets so obtained are then divided by the total number of shares
outstanding, 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 of the fund directly
or indirectly, to any person or entity, where, after the sale, such person or
entity would own beneficially directly or indirectly more than 3% of the
outstanding shares of the fund without the consent of a majority of the fund's
Board of Directors.
SELLING SHARES
Shares are sold at the net asset value next determined after your request is
received in good order by American Funds Service Company. You may sell
(redeem) shares in your account in any of the following ways:
THROUGH YOUR DEALER (certain charges may apply)
- - Shares held for you in your dealer's street name must be sold through the
dealer.
WRITING TO AMERICAN FUNDS SERVICE COMPANY
- - Requests must be signed by the registered shareholder(s)
- - A signature guarantee is required if the redemption is:
- -- Over $50,000;
- -- Made payable to someone other than the registered shareholder(s); or
- -- Sent to an address other than the address of record, or an address of record
which has been changed within the last 10 days.
Your signature may be guaranteed by a domestic stock exchange or the National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution.
- - Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.
- - You must include any shares you wish to sell that are in certificate form.
TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE(R) OR AMERICAN FUNDSLINE ONLINE(R)
- - Redemptions by telephone or fax (including American FundsLine(r) and American
FundsLine OnLine(r)) are limited to $50,000 per shareholder each day.
- - Checks must be made payable to the registered shareholder(s).
- - Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
MONEY MARKET FUNDS
- - You may have redemptions of $1,000 or more wired to your bank by writing
American Funds Service Company.
- - You may establish check writing privileges (use the money market funds
application).
- -- If you request check writing privileges, you will be provided with checks
that you may use to draw against your account. These checks may be made
payable to anyone you designate and must be signed by the authorized number or
registered shareholders exactly as indicated on your checking account signature
card.
Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the Investment Company Act of 1940), sale proceeds will be
paid on or before the seventh day following receipt and acceptance of an order.
Interest will not accrue or be paid on amounts that represent uncashed
distribution or redemption checks.
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution without a sales charge (any contingent deferred sales charge paid
will be credited to your account) in any fund in The American Funds Group
within 90 days after the date of the redemption or distribution. Redemption
proceeds of shares representing direct purchases in the money market funds are
excluded. Proceeds will be reinvested at the next calculated net asset value
after your request is received and accepted by American Funds Service Company.
CONTINGENT DEFERRED SALES CHARGE -- A contingent deferred sales charge of 1%
applies to certain redemptions from funds other than the money market funds
made within twelve months of purchase on investments of $1 million or more
(other than redemptions by employer-sponsored retirement plans). 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 403(b) plans or IRAs due to
death, disability or attainment of age 591/2; for tax-free returns of excess
contributions to IRAs; and for redemptions through certain automatic
withdrawals not exceeding 10% of the amount that would otherwise be subject to
the charge.
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 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 -- An automatic investment plan enables you to make
monthly or quarterly investments into the American Funds through automatic
debits from your bank account. To set up a plan you must fill out an account
application and specify the amount you would like to invest ($50 minimum) and
the date on which you would like your investments to occur. The plan will
begin within 30 days after your account application is received. Your bank
account will be debited on the day or a few days before your investment is
made, depending on the bank's capabilities. American Funds Service Company
will then invest your money into the fund you specified on or around the date
you specified. If your bank account cannot be debited due to insufficient
funds, a stop-payment or the closing of the account, the plan may be terminated
and the related investment reversed. You may change the amount of the
investment or discontinue the plan at any time by writing to American Funds
Service Company.
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 -- You may cross-reinvest
dividends and capital gains ("distributions") into any other fund in The
American Funds Group at net asset value, subject to the following conditions:
(a) The aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the
fund receiving the distributions equals or exceeds that fund's minimum initial
investment requirement),
(b) If the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested,
(c) If you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distribution must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.
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) or American FundsLine OnLine(sm) (see "American FundsLine(r) and
American FundsLine OnLine(sm)" 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 and Computer Purchases, 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, computer, 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 (a) meet the minimum initial investment
requirement for the receiving fund or (b) 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, will be reflected on regular confirmation statements from American
Funds Service Company. Dividend and capital gain reinvestments and purchases
through automatic investment plans and certain retirement plans will be
confirmed at least quarterly.
AMERICAN FUNDSLINE(R) AND AMERICAN FUNDSLINE ONLINE(sm)-- You may check your
share balance, the price of your shares, or your most recent account
transaction, redeem shares (up to $50,000 per shareholder each day), or
exchange shares around the clock with American FundsLine(r) or American
FundsLine OnLine(sm). To use this service, call 800/325-3590 from a
TouchTone(tm) telephone or access the American Funds Web site on the Internet
at www.americanfunds.com. Redemptions and exchanges through American
FundsLine(r) and American FundsLine OnLine(sm) are subject to the conditions
noted above and in "Shareholder Account Services and Privileges - Telephone and
Computer Purchases, 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 AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES -- By using the
telephone (including American FundsLine(r)) or computer (including American
FundsLine OnLine(sm)), fax or telegraph purchase, 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.
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 (either directly or through their
correspondent clearing agent) 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 have an obligation
to obtain the lowest available commission rate to the exclusion of price,
service and qualitative considerations.
Portfolio transactions for the fund may be executed as part of concurrent
authorizations to purchase or sell the same security for other funds served by
the Investment Adviser, or for trusts or other accounts served by affiliated
companies of the Investment Adviser. Although such concurrent authorizations
potentially could be either advantageous or disadvantageous to the fund, they
are effected only when the Investment Adviser believes that to do so is in the
interest of the fund. When such concurrent authorizations occur, the objective
is to allocate the executions in an equitable manner. The fund will not pay a
mark-up for research in principal transactions.
Brokerage commissions paid on portfolio transactions for the fiscal years ended
November 30, 1998, 1997 and 1996 amounted to $9,076,000, $6,500,000 and
$5,545,000, 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 $5,574,000 for the fiscal year ended November 30, 1998.
INDEPENDENT ACCOUNTANTS -- PricewaterhouseCoopers LLP, 400 South Hope Street,
Los Angeles, CA 90071, has served as the fund's independent accountants since
the fund's inception, providing audit services, preparation of tax returns and
review of certain documents to be filed with the Securities and Exchange
Commission. The financial statements included in this Statement of Additional
Information from the Annual Report have been so included in reliance on the
report of PricewaterhouseCoopers 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, financial statements and other information. The fund's
annual financial statements are audited by the fund's independent accountants,
PricewaterhouseCoopers LLP, whose selection is determined annually by the Board
of Directors. In an effort to reduce the volume of mail shareholders receive
form the fund when a household owns more than one account, the Transfer Agent
has taken steps to eliminate duplicate mailings of shareholder reports. To
receive additional copies of a report, shareholders should contact the Transfer
Agent.
YEAR 2000 -- The fund and its shareholders depend on the proper functioning of
computer systems maintained by the Investment Adviser and its affiliates and
other key service providers. Many computer systems in use today will require
reprogramming or replacement prior to the year 2000 because of the way they
store dates and make date-related calculations. The fund understands that
these service providers are taking steps to address the "Year 2000 problem".
However, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the fund. In addition, the fund's investments could be
adversely affected by the Year 2000 problem. For example, the markets for
securities in which the fund invests could experience settlement problems and
liquidity issues. Corporate and governmental data processing errors may cause
losses for individual companies and overall economic uncertainties. Earnings of
individual issuers are likely to be affected by the costs of addressing the
problem, which may be substantial and may be reported inconsistently.
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; blackout periods on
personal investing for certain investment personnel; a 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.
OTHER INFORMATION -- 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, 1998
<TABLE>
<CAPTION>
<S> <C>
Net asset value and redemption price per share
(net assets divided by shares outstanding) $27.15
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) $28.81
</TABLE>
SHAREHOLDER VOTING RIGHTS -- The fund does not hold annual meetings of
shareholders. However, significant 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 any meeting of
shareholders, duly called and at which a quorum is present, the shareholders
holding a majority of the votes entitled to be cast, may 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
agreed, 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.
INVESTMENT RESULTS AND RELATED STATISTICS
The fund's yield is 2.10% based on a 30-day (or one month) period ended
November 30, 1998, computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last
day of the period, according to the following formula:
YIELD = 2[(a-b/cd+1)/6/-1]
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends.
d = the maximum offering price per share on the last day of the period.
The fund's one year total return, five-year average annual compound return and
lifetime average annual compound return for the periods ending November 30,
1998 were 8.86%, 14.99% and 15.79%, 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.
For educational purposes, fund literature may contain discussions and/or
illustrations of volatility, risk tolerance, asset allocation and investment
strategies.
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 growth and growth-income funds that are at least 10 years old.
In the rolling 10-year periods since January 1, 1969 (138 in all) those funds
have had better total returns than their comparable Lipper indexes in 128 of
138 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 and S&P 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 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."
S & P 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 S & P. 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 -- S & P: "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: "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
Investment Portfolio, November 30, 1998
<S> <C> <C> <C>
INVESTMENT MIX
Largest Industry Holdings
Equity Securities 82.9%
Telecommunications 14.9%
Banking 9.3%
Utilities: Electric & Gas 4.9%
Beverages & Tobacco 4.8%
Business & Public Services 3.7%
Other Industries 45.3%
Bonds & Notes 1.1%
Cash & Equivalents 16.0%
Percent Change
10 Largest Percent of in share price
Equity Holdings Country WGI's net ass since 11/30/97
Telecom Italia Italy 2.49% + 56.32
Deutsche Telekom Germany 1.84 + 38.56
Mannesmann Germany 1.27 +132.57
Imperial Tobacco United Kingdom 1.16 + 61.91
Telefonica Spain 1.15 + 63.09
ING Groep Netherlands 1.13 + 40.93
Astra Sweden 1.06 + 5.91
Tele Danmark Denmark .87 + 86.25
RJR Nabisco Holdings USA .85 - 20.93
Philip Morris USA .85 + 58.59
</TABLE>
<TABLE>
CAPITAL WORLD GROWTH AND INCOME FUND
INVESTMENT PORTFOLIO, NOVEMBER 30, 1998
- ------------------------------------------- ---------- ---------- ----------
Equity Securities Shares or Market Percent
(common and preferred stocks and convertible Principal Value of Net
debentures) Amount (Millions) Assets
- ------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
TELECOMMUNICATIONS- 14.92%
Telecom Italia SpA nonconvertible savings shares (Italy) 25,602,251 158.717
Telecom Italia SpA 6,588,775 53.333 2.49
Deutsche Telekom AG (Germany) 5,576,618 156.467 1.84
Mannesmann AG (Germany) 1,000,750 108.245 1.27
Telefonica, SA (Spain) 2,091,811 98.319 1.15
Tele Danmark AS (Denmark) 379,900 42.424
Tele Danmark AS, Class B (ADR) 565,100 31.328 .87
Telecom Italia Mobile SpA, savings shares (Italy) 12,565,800 53.158
Telecom Italia Mobile SpA 2,224,200 14.618 .80
Telecom Corp. of New Zealand Ltd. (New Zealand) 6,391,000 27.173
Telecom Corp. of New Zealand Ltd. (ADR) 720,700 24.188 .75
Telecom Corp. of New Zealand Ltd. (1) 3,038,610 12.919
Koninklijke PTT Nederland NV (Netherlands) 1,267,369 54.668 .64
Telecom Argentina SA, Class B (ADR) (Argentina) 1,765,700 53.854 .63
TELECEL - Comunicacoes Pessoais, SA (Portugal) 272,200 53.231 .63
U S WEST, Inc. (USA) 850,000 52.913 .62
France Telecom, SA (France) 607,000 42.142 .49
British Telecommunications PLC (United Kingdom) 3,000,000 41.085 .48
Telesp Celular Participacoes SA, preferred (Brazil) (2) 423,995,800 29.829
Telesp Celular Participacoes SA, (2) 159,705,000 5.983 .42
Nortel Inversora SA, preferred, Class B (ADR) (Argentina) 1,465,000 27.835 .33
Telefonos de Mexico, SA de CV, Class L (ADR) (Mexico) 582,300 27.113 .32
Philippine Long Distance Telephone Co. (ADR) (Philippines) 750,000 19.641 .23
AirTouch Communications (USA) (2) 300,000 17.156 .20
Mobistar NV (Belgium) (1,2) 300,000 14.292 .17
AT&T Corp. (USA) 150,000 9.347 .11
Hong Kong Telecommunications Ltd. (Hong Kong) 4,700,783 8.986 .11
Telefonica de Argentina SA, Class B (ADR) (Argentina) 277,500 8.984 .11
NTT Mobile Communications Network, Inc. (Japan) (2) 213 8.135 .10
SmarTone Telecommunications Holdings Ltd.
(Hong Kong- Incorporated in Bermuda) 2,000,000 6.575 .08
TELUS Corp. (Canada) 135,000 2.918 .03
Nippon Telegraph and Telephone Corp. (Japan) 365 2.729 .03
DDI Corp. (Japan) 500 1.625 .02
BANKING- 9.30%
Royal Bank of Canada (Canada) 1,334,200 65.782 .77
Washington Mutual,Inc. (USA) 1,630,000 63.162 .74
First Union Corp. (USA) 900,000 54.675 .64
Australia and New Zealand Banking Group Ltd. (Australia) 7,405,862 48.764 .57
Bank of Scotland (United Kingdom) 4,200,000 46.678 .55
Commonwealth Bank of Australia (Australia) 2,934,483 40.354 .47
Westpac Banking Corp. (Australia) 4,962,577 33.018 .39
Wells Fargo & Co. (USA) 900,000 32.400 .38
National Bank of Canada (Canada) 2,000,000 31.150 .37
Hang Seng Bank Ltd. (Hong Kong) 3,300,000 29.091 .34
HSBC Holdings PLC (United Kingdom) 1,067,626 27.373 .32
Bank of the Philippine Islands (Philippines) 12,154,520 26.631 .31
Safra Republic Holdings SA (Luxembourg) 532,000 25.536 .30
BANK ONE CORP.(USA) 484,000 24.835 .29
Bank of Nova Scotia (Canada) 1,128,400 24.760 .29
Unibanco-Uniao de Bancos Brasileiros SA, units
(Global Depositary Receipts) (Brazil) 980,000 20.458 .24
Corporacion Bancaria de Espana, SA (Spain) 860,000 20.032 .24
Crestar Financial Corp. (USA) 300,000 19.913 .23
National Australia Bank Ltd. (Australia) 1,307,527 19.513 .23
Unidanmark A/S, Class A (Denmark) 215,000 17.540 .21
Wilmington Trust Corp. (USA) 300,000 17.400 .20
Asahi Bank, Ltd. (Japan) 4,150,000 15.850 .19
Paribas, Class A (formerly Cie. Financiere de Paribas) (France) 150,000 13.367 .16
ForeningsSparbanken AB, Class A (Sweden) 477,000 13.365 .16
Chase Manhattan Corp. (USA) 200,000 12.688 .15
ABN AMRO Holding NV (Netherlands) 546,600 11.260 .13
Sakura Bank, Ltd. (Japan) 4,000,000 10.206 .12
Skandinaviska Enskilda Banken AB, Class A (Sweden) 800,000 9.094 .11
Fuji Bank, Ltd. (Japan) 1,700,000 6.728 .08
Sanwa International Finance (Bermuda) Trust 1.25% preferred
share units 2005 (Japan) (1) 849,000,000 6.433 .08
Banco de Galicia y Buenos Aires SA, Class B (ADR) (Argentina) 176,250 3.789 .04
UTILITIES: ELECTRIC & GAS- 4.88%
Williams Companies, Inc. (USA) 2,420,560 69.742 .82
Northeast Utilities (USA) (2) 3,050,000 48.038 .56
Southern Electric PLC (United Kingdom) 3,996,061 45.995 .54
Columbia Energy Group (USA) 591,600 33.573 .39
National Power PLC (United Kingdom) 3,480,000 29.611 .35
Dynegy Inc. (formerly NGC Corp.) (USA) 1,975,000 25.675 .30
Empresa Nacional de Electricidad SA (ADR) (Chile) 2,029,546 21.818 .26
El Paso Energy Corp. (formerly El Paso Natural Gas Co.) (USA) 560,000 19.110 .22
Scottish Power PLC (United Kingdom) 1,700,000 18.081 .21
Public Service Co. of New Mexico (USA) 864,300 16.800 .20
K N Energy, Inc. (USA) 365,000 15.969 .19
CalEnergy Co., Inc. (USA) (2) 500,000 15.656 .18
Sonat Inc. (USA) 454,100 13.481 .16
KeySpan Energy Corp. (formerly Long Island Lighting Co.) (USA) 352,000 10.450 .12
Australian Gas Light Co. (Australia) 1,308,941 9.710 .11
Ameren Corp. (USA) 230,000 9.473 .11
NICOR Inc. (USA) 175,000 7.361 .09
National Fuel Gas Co. (USA) 127,000 5.834 .07
Centrais Geradoras do Sul do Brasil SA - GERASUL,
preferred (ADR) (Brazil) (2) 24,000 .156 .00
BEVERAGES & TOBACCO- 4.75%
Imperial Tobacco Ltd. (United Kingdom) 9,200,000 98.914 1.16
RJR Nabisco Holdings Corp. (USA) 2,525,000 72.752 .85
Philip Morris Companies Inc. (USA) 1,300,000 72.719 .85
Gallaher Group PLC (United Kingdom) 9,500,000 66.892 .79
Foster's Brewing Group Ltd. (Australia) 19,712,399 51.499 .60
Seagram Co. Ltd. (Canada) 575,000 19.730 .23
UST Inc. (USA) 200,000 6.950 .09
Coca-Cola Amatil Ltd. (Australia) 1,909,672 6.398 .08
Asahi Breweries, Ltd. (Japan) 318,000 4.600 .05
Coca-Cola Beverages PLC (United Kingdom) (2) 2,006,362 4.168 .05
BUSINESS & PUBLIC SERVICES- 3.75%
Suez Lyonnaise des Eaux (France) 150,000 29.608
Suez Lyonnaise des Eaux (Belgium) (2) 85,000 17.024
Suez Lyonnaise des Eaux, rights expire 2001 (Belgium) (2) 74,400 .532 .55
Suez Lyonnaise des Eaux, tax free rights (Belgium) (2) 135,000 .003
TNT Post Groep NV (Netherlands) 1,627,800 40.938 .48
United Utilities PLC (United Kingdom) 2,806,091 40.905 .48
Brambles Industries Ltd. (Australia) 1,524,354 37.251 .44
Thames Water PLC (United Kingdom) 1,312,067 25.920 .30
Cendant Corp. (USA) (2) 800,000 15.200
Cendant Corp. 7.50% PRIDES convertible preferred 300,000 10.089 .30
Hyder PLC (United Kingdom) 1,495,000 20.092 .24
Electronic Data Systems Corp. (USA) 400,000 15.600 .18
Columbia/HCA Healthcare Corp. (USA) 550,000 13.544 .16
Quintiles Transnational Corp. 4.25% convertible debentures 2000 (USA)$10,000,000 12.962 .15
Omnicom Group Inc. (USA) 200,000 10.689 .13
Vanstar Financing Trust 6.75% convertible preferred (USA) 350,000 10.631 .12
American Water Works Co., Inc. (USA) 300,000 9.281 .11
Hutchison Delta Finance Ltd. 7.00% convertible debentures 2002
(Hong Kong- Incorporated in the Cayman Islands) (1,3) $6,000,000 6.000 .07
Rentokil Initial PLC (United Kingdom) 450,000 3.006 .04
HEALTH & PERSONAL CARE- 3.27%
Astra AB, Class A (Sweden) 3,552,400 65.045
Astra AB, Class B 1,390,533 24.863 1.06
Glaxo Wellcome PLC (United Kingdom) 2,240,000 70.809 .83
Pfizer Inc (USA) 438,000 48.892 .57
PLIVA d.d. (Croatia) 1,500,000 23.625 .28
Merck & Co., Inc. (USA) 144,700 22.410 .26
Zeneca Group PLC (United Kingdom) 325,000 13.479 .16
Eli Lilly and Co. (USA) 100,000 8.970 .11
MERCHANDISING- 3.01%
Dixons Group PLC (United Kingdom) 5,305,000 64.101 .75
Tesco PLC (United Kingdom) 18,889,753 56.287 .66
Wal-Mart Stores, Inc. (USA) 596,000 44.886 .53
J.C. Penney Co., Inc. (USA) 400,000 22.000 .26
Safeway PLC (United Kingdom) 3,850,000 18.982 .22
AutoZone, Inc. (USA) (2) 550,000 16.568 .19
Coles Myer Ltd. (Australia) 2,150,700 11.116 .13
Kingfisher PLC (United Kingdom) 936,422 8.925 .10
Koninklijke Ahold NV 3.00% convertible debentures 2003 (Netherlands) $9,513,000 5.708 .07
Woolworths Ltd. (Australia) 1,219,885 4.280 .07
George Weston Ltd. (Canada) 83,300 2.925 .03
FOREST PRODUCTS & PAPER- 2.80%
Fort James Corp. (USA) 1,700,000 66.513 .78
Smurfit Stone Container (USA) (2) 2,471,300 34.753 .41
Metsa-Serla Oy 4.375% convertible debentures 2002 (Finland) (1) $30,000,000 27.300 .32
Georgia-Pacific Corp., Georgia-Pacific Group (USA) 450,000 25.538 .30
Bowater Inc. (USA) 500,000 19.750 .23
Union Camp Corp. (USA) 300,000 19.407 .23
Sonoco Products Co. (USA) 577,500 17.289 .20
Champion International Corp. (USA) 330,000 13.715 .16
UPM-Kymmene Corp. (Finland) 287,000 7.513 .09
MAYR-MELNHOF Karton AG (Austria) 145,000 6.646 .08
ELECTRICAL & ELECTRONIC- 2.79%
Siemens AG (Germany) 909,000 63.225 .74
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 1,345,000 37.354
Telefonaktiebolaget LM Ericsson, Class B (ADR) 300,000 8.288 .54
York International Corp. (USA) 650,000 27.300 .31
Northern Telecom Ltd. (Canada) 503,000 23.484 .28
Premier Farnell PLC (United Kingdom) 7,400,000 21.965 .26
Nokia Corp., Class A (ADR) (Finland) 214,000 20.972 .25
Matsushita Communication Industrial Co., Ltd. (Japan) 400,000 17.454 .21
General Electric Co. (USA) 125,000 11.313 .13
Elektrim SA 2.00% convertible debentures 2004 (Poland) $9,000,000 4.615
Elektrim SA 200,000 1.683 .07
MULTI-INDUSTRY- 2.62%
Orkla AS, Class A (Norway) 1,232,000 20.561
Orkla AS, Class B 1,404,000 20.245 .48
Siebe PLC (United Kingdom) 11,280,000 40.503 .48
Williams PLC (formerly Williams Holdings PLC) (United Kingdom) 6,000,000 37.102 .44
Hutchison Whampoa Ltd. (Hong Kong) 2,590,000 18.483 .22
Swire Pacific Ltd., Class A (Hong Kong) 4,000,000 18.135 .21
Lend Lease Corp. Ltd. (Australia) 655,946 15.965 .19
JG Summit Holdings, Inc. 3.50% convertible debentures 2003 (Philippin$26,000,000 15.600 .18
Ayala Corp. 3.00% convertible debentures 2000 (Philippines) $10,000,000 11.625 .14
FMC Corp. (USA) (2) 170,000 9.881 .12
Canadian Pacific Ltd. (Canada) 400,000 8.825 .10
Harsco Corp. (USA) 163,600 5.297 .06
Jardine Strategic Holdings Ltd. (Singapore - Incorporated In Bermuda) 185,000 .349 .00
ELECTRONIC COMPONENTS- 2.55%
Micron Technology, Inc. (USA) (2) 1,600,000 66.100 .78
Advanced Micro Devices, Inc. (USA) (2) 1,500,000 41.531 .49
Delta Electronics, Inc. (Taiwan) 8,400,000 27.490 .32
Hoya Corp. (Japan) 527,000 22.140 .26
Intel Corp. (USA) 200,000 21.525 .25
Altera Corp. (USA) (2) 300,000 14.719 .17
Rohm Co., Ltd. (Japan) 100,000 8.451 .10
Texas Instruments Inc. (USA) 100,000 7.638 .10
Murata Manufacturing Co., Ltd. (Japan) 180,000 7.050 .08
INSURANCE- 2.42%
ING Groep NV (Netherlands) 1,673,683 95.822 1.13
Transatlantic Holdings, Inc. (USA) 320,400 24.350 .29
Guardian Royal Exchange PLC (United Kingdom) 3,600,095 19.591 .23
Norwich Union PLC (United Kingdom) 2,360,600 16.544 .19
Corporacion Mapfre, CIR, SA (Spain) 457,812 12.695 .15
Fairfax Financial Holdings Ltd. (Canada) (2) 35,300 11.318 .13
PartnerRe Holdings Ltd. (Singapore - Incorporated in Bermuda) 250,000 11.062 .13
GIO Australia Holdings Ltd. (Australia) 2,285,486 7.431 .09
General Re Corp. (USA) 28,000 6.538 .08
BROADCASTING & PUBLISHING- 2.41%
Tele-Communications, Inc., Series A, Liberty Media Group (USA) (2) 1,496,250 60.317 .71
Time Warner Inc. (USA) 450,000 47.587 .56
Viacom Inc., Class B (USA) (2) 425,000 28.289 .33
NTL Inc. (United Kingdom) (2) 326,560 18.185 .21
ProSieben Media AG (Germany) 320,800 15.373 .18
CANAL (France) 59,356 13.635 .16
News Corp. Ltd., preferred (Australia) 1,728,482 10.828 .13
CanWest Global Communications Corp. (Canada) 741,300 9.052 .11
Publishing & Broadcasting Ltd. (Australia) 286,800 1.244 .01
Modern Times Group MTG AB, Class B (ADR) (Sweden) (2) 16,278 1.046 .01
AUTOMOBILES- 2.29%
DaimlerChrysler AG (New York Registered Shares)
(formerly Chrysler Corp.) (Germany) (2) 623,500 57.167 .67
Renault V.I. SA (France) 900,000 41.762 .49
Ford Motor Co. (USA) 700,000 38.675 .45
Suzuki Motor Corp. (Japan) 2,100,000 24.061 .29
General Motors Corp. (USA) 300,000 21.000 .25
Bayerische Motoren Werke AG (Germany) 12,000 9.266
Bayerische Motoren Werke AG (2) 3,600 2.716 .14
CHEMICALS- 2.25%
Praxair, Inc. (USA) 1,159,700 44.286 .52
BOC Group PLC (United Kingdom) 2,000,000 29.039 .34
Sherwin-Williams Co. (USA) 872,000 24.743 .31
DSM NV (Netherlands) 258,064 24.112 .28
Airgas, Inc. (USA) (2) 2,367,100 23.967 .28
Millennium Chemicals Inc. (USA) 939,000 22.419 .26
Bayer AG (Germany) 315,000 12.923 .15
L'Air Liquide (France) 57,555 9.782 .11
ENERGY SOURCES- 2.15%
Shell Canada Ltd., Class A (Canada) 2,437,300 37.483 .44
Elf Aquitaine (France) 200,000 24.924 .29
Shell Transport and Trading Co., PLC (New York Registered Shares) 400,000 14.525
(United Kingdom)
Royal Dutch Petroleum Co. (Netherlands) 100,000 4.789
Royal Dutch Petroleum Co. (New York Registered Shares) 80,000 3.760 .27
ENI SpA (Italy) 2,900,000 17.950 .21
Mobil Corp. (USA) 200,000 17.239 .20
YPF SA, Class D (ADR) (Argentina) 450,000 13.275 .16
TOTAL, Class B (France) 100,687 12.477 .15
Unocal Corp. (USA) 360,000 12.195 .14
Pioneer Natural Resources Co. (USA) 683,919 9.062 .11
Broken Hill Proprietary Co. Ltd. (Australia) 1,121,153 8.885 .10
Esso SA Francaise (France) 78,567 6.904 .08
FINANCIAL SERVICES- 2.14%
Household International, Inc. (USA) 1,245,000 48.711 .57
Freddie Mac (USA) 700,000 42.350 .50
Associates First Capital Corp., Class A (USA) 373,459 29.083 .34
Nichiei Co., Ltd. (Japan) 350,100 28.222 .33
Fannie Mae (USA) 180,000 13.095 .15
OM Gruppen AB (Sweden) 790,000 11.359 .14
Bell Atlantic Financial Services, Inc., Senior Exchangeable Notes, 4.25%
convertible debentures 2005 (1) $5,000,000 5.144 .06
Medallion Financial Corp. (USA) 275,000 4.262 .05
REAL ESTATE- 1.93%
Sun Hung Kai Properties Ltd. (Hong Kong) 6,360,000 45.593 .54
Hysan Development Co. Ltd. (Hong Kong) 21,000,000 30.651
Hysan Development Co. Ltd. warrants, expire 1999 (2) 1,683,000 .052 .36
Amoy Properties Ltd. (Hong Kong) 27,000,000 19.530 .23
CarrAmerica Realty Corp. (USA) 750,000 18.188 .21
SM Prime Holdings, Inc. (Philippines) 52,885,000 9.971 .12
Security Capital Global Realty (Luxembourg) (1,2,3) 450,000 9.000 .11
Cheung Kong (Holdings) Ltd. (Hong Kong) 1,100,000 7.921 .09
Security Capital Group Inc., Class A (USA) (2) 9,960 7.022 .08
Meditrust Corp. (USA) 415,339 6.308 .07
AMB Property Corp. (USA) 250,000 5.562 .07
Kerry Properties Ltd. (Hong Kong) 5,243,500 4.232 .05
FOOD & HOUSEHOLD PRODUCTS- 1.59%
Reckitt & Colman PLC (United Kingdom) 3,109,437 43.686 .52
Nestle SA (Switzerland) 15,952 33.122 .39
Barry Callebaut AG (Switzerland) (2) 83,500 19.579 .23
Groupe Danone (France) 58,000 16.923 .20
Cadbury Schweppes PLC (United Kingdom) 1,000,000 15.116 .18
Cultor Ltd. (Finland) 682,500 6.288 .07
DATA PROCESSING & REPRODUCTION- 1.47%
Oracle Corp. (USA) (2) 1,160,000 39.730 .47
Microsoft Corp. (USA) (2) 245,000 29.890 .35
3Com Corp. (USA) (2) 500,000 19.344 .22
Fujitsu Ltd. (Japan) 1,000,000 11.555
Fujitsu Ltd., warrants, expire 2000 (2) 7,670 6.903 .22
Computer Associates International, Inc. (USA) 275,000 12.169 .14
Ascend Communications, Inc. (USA) (2) 100,000 5.618 .07
GOLD MINES- 1.35%
Barrick Gold Corp. (Canada) 1,800,000 36.000 .42
Homestake Mining Co. (USA) 2,000,000 21.500 .25
Normandy Mining Ltd. (Australia) 20,630,175 19.129
Normandy Mining Ltd., options, expire 2001 (2) 4,875,799 .398 .22
Anglogold Ltd. (South Africa) 250,000 12.214 .14
Driefontein Consolidated Ltd. (South Africa) 2,200,000 12.083 .14
Newcrest Mining Ltd. (Australia) (2) 6,000,000 8.495 .10
Gold Fields Ltd. (South Africa) (2) 1,044,120 6.790 .08
INDUSTRIAL COMPONENTS- 1.17%
Federal-Mogul Corp. (USA) 945,000 53.629 .63
Tomkins PLC (United Kingdom) 4,400,000 19.844 .23
Lear Corp. (USA) (2) 352,300 13.608 .16
Morgan Crucible Co. PLC (United Kingdom) 2,161,523 10.871 .13
Rockwell International Corp. (USA) 30,000 1.468 .02
MACHINERY & ENGINEERING- 0.88%
Fuji Machine Mfg. Co., Ltd. (Japan) 1,420,000 44.771 .53
AIDA Engineering, Ltd. (Japan) 3,300,000 11.799 .14
Caterpillar Inc. (USA) 200,000 9.887 .12
Svedala Industri AB (Sweden) 600,000 8.921 .09
METALS: NONFERROUS- 0.70%
Gencor Ltd. (South Africa) 14,320,120 25.796 .30
KGHM Polska Miedz SA (Global Depositary Receipts) (Poland) 1,974,000 14.460 .17
Pechiney, Class A (France) 299,300 9.964 .12
Teck Corp. 3.75% convertible debentures 2006 (Canada) $14,950,000 9.120 .11
Indian Aluminium Co., Ltd. (India) 100 .000 .00
APPLIANCES & HOUSEHOLD DURABLES- 0.64%
Philips Electronics NV (Netherlands) 450,000 28.469 .33
Sony Corp. (Japan) 350,000 25.625 .31
MISCELLANEOUS MATERIALS & COMMODITIES- 0.50%
English China Clays PLC (United Kingdom) 6,891,000 17.840 .21
Cie. de Saint-Gobain (France) 111,377 16.444 .18
Crown Cork & Seal Co., Inc. (USA) 275,000 9.281 .11
ELECTRONIC INSTRUMENTS- 0.45%
ADVANTEST CORP. (Japan) 330,000 22.043 .26
Perkin-Elmer Corp. (USA) 100,000 9.326 .11
Security Dynamics Technologies, Inc. (USA) (2) 450,000 6.862 .08
AEROSPACE & MILITARY TECHNOLOGY- 0.43%
Bombardier Inc., Class B (Canada) 2,210,800 28.802 .34
Boeing Co. (USA) 140,000 5.687 .07
Raytheon Co., Class A (USA) 42,180 2.306 .02
ENERGY EQUIPMENT- 0.38%
Schlumberger Ltd. (Netherlands Antilles) 545,000 24.355 .29
Halliburton Co. (USA) 259,800 7.632 .09
METALS: STEEL- 0.30%
Usinor Sacilor (France) 1,400,000 15.748 .19
Allegheny Teledyne Inc. (USA) 377,000 7.752 .09
Ispat Industries Ltd., 3.00% convertible debentures 2001 (India) (1) $2,800,000 .672 .01
N.T.S. Steel Group PCL 4.00% convertible debentures 2008 (Thailand) $6,670,000 .667 .01
RECREATION & OTHER CONSUMER PRODUCTS- 0.29%
Nintendo Co., Ltd. (Japan) 175,000 16.226 .19
EMI Group PLC (United Kingdom) 1,365,067 8.126 .10
LEISURE & TOURISM- 0.29%
King World Productions, Inc. (USA) (2) 525,000 14.306 .17
Village Roadshow Ltd., Class A, 5.50% preferred (Australia) 2,806,287 4.044
Village Roadshow Ltd., Class A, 5.50% preferred (1) 2,500,000 3.602 .12
Village Roadshow Ltd. 1,200,000 2.353
TRANSPORTATION: RAIL & ROAD- 0.28%
Westshore Terminals Inc. (Canada) (1) 3,040,900 12.312 .14
Union Pacific Corp. (USA) 250,000 12.156 .14
TRANSPORTATION: AIRLINES- 0.10%
Air New Zealand Ltd., Class B (New Zealand) 6,320,000 8.128 .10
TEXTILES & APPAREL- 0.08%
Courtaulds Textiles PLC (United Kingdom) 1,641,500 4.141 .05
Nine West Group Inc. (USA) (2) 213,200 2.665 .03
TRANSPORTATION: SHIPPING- 0.00%
Mitsui O.S.K. Lines, Ltd. (Japan) 165,000 .267 .00
MISCELLANEOUS- 1.78%
Other equity securities in intial period of acquisition 152.607 1.78
Booker PLC (United Kingdom) 550,000 0.608 .01
Corning Inc. (USA) 72,800 2.922 .03
France Telecom, SA, rights, expire 1998 607,000 0.027 .00
Hays PLC (United Kingdom) 1,000,000 8.427 .10
Hongkong Land Holdings Ltd. (Singapore) 9,999,700 14.500 .17
Independent Insurance Group PLC (United Kingdom) 1,041,600 3.728 .04
Kerry Group PLC (United Kingdom) 840,000 11.359 .13
Loblaw Companies Ltd. (Canada) 400,000 8.555 .10
Mercury General Corp. (USA) 413,400 17.311 .20
MYCAL Corp. (Japan) 928,000 5.807 .07
Niagara Mohawk Power Corp. (USA) 1,100,000 16.913 .20
San Paolo-IMI SpA (Italy) 209,000 3.421 .04
Seat Pagine Gialle SpA (Italy) 6,000,000 5.309
Seat Pagine Gialle SpA (Italy) 7,000,000 4.856 .12
Swisscom AG (Switzerland) 68,126 22.925 .27
THK Co., Ltd. (Japan) 2,280,000 25.939 .30
-------- --------
TOTAL EQUITY SECURITIES (cost:
$5,564.085 million) 7,059.031 82.91
-------- --------
- ------------------------------------------
Principal
Amount
Bonds and Notes (Millions)
- ------------------------------------------ -------------
INDUSTRIALS- 0.26%
Indah Kiat Finance Mauritius Ltd. 10.00% 2007 $11.650 7.543
Indah Kiat International Finance 8.875% 2000 2.290 1.672 .12
Indah Kiat Global BD 12.50% 2006 1.000 .737
Container Corp. of America, Series A, 11.25% 2004 6.000 6.180
Container Corp. of America 9.75% 2003 1.000 1.020 .08
Hutchison Whampoa 7.50% 2027 2.700 2.268
Hutchison Whampoa 7.45% 2017 (1) 1.000 .841 .04
Hutchison Whampoa Finance (CI) Ltd., Series D, 6.988% 2037 .750 .679
Multicanal Participacoes SA, Series B, 12.625% 2004 2.250 2.087 .02
TELEPHONE- 0.14%
Netia Holdings BV 10.25% 2007 4.125 3.651
Netia Holdings BV 0%/11.25% 2007 (4) 3.750 2.269 .07
Telecom Argentina STET-France Telecom SA 12.00% 2002 5.500 5.913 .07
FINANCIAL- 0.03%
APP Finance (VI) Mauritius Ltd. 11.75% 2005 2.800 2.219 .03
ARGENTINEAN GOVERNMENT- 0.24%
Argentina (Republic of) 11.00% 2006 7.000 7.157
Argentina (Republic of) 11.75% 2007 ARP8.000 7.041 .24
Argentina (Republic of) 11.375% 2017 6.000 6.098
Argentina (Republic of) 8.75% 2002 ARP4.000 3.381
SOUTH AFRICAN GOVERNMENT- 0.34%
South Africa (Republic of) 13.00% 2010 ZAR197.500 29.216 .34
TOTAL BONDS AND NOTES (cost: $101.851 million) 89.972 1.05
-------- --------
- ------------------------------------------ -----------------------------------
Short-Term Securities
- ------------------------------------------ -----------------------------------
CORPORATE SHORT-TERM NOTES- 13.79%
Abbey National North America 5.22%-5.42% due 12/9/98-1/13/99 $75.000 74.779 .88
Canada Bills 4.93%-5.32% due 12/2/98-2/4/99 72.000 71.709 .84
Daimler-Benz North America Corp. 5.02%-5.33% due 12/16/98-3/19/99 67.500 66.971 .79
Diageo Capital PLC 5.11%-5.26% due 12/10/98-1/19/99 (1) 67.300 66.917 .79
Halifax PLC 5.12%-5.40% due 12/29/98-1/7/99 62.250 61.949 .73
SmithKline Beecham Corp. 5.07%-5.25% due 1/12-1/20/99 61.630 61.217 .72
Ford Motor Credit Co. 5.04%-5.20% due 12/8/98-1/6/99 57.650 57.388 .67
Siemens Capital Corp. 5.10%-5.18% due 12/14/98-1/20/99 53.500 53.237 .63
Xerox Capital (Europe) PLC 5.00%-5.27% due 1/8-1/14/99 51.800 51.490 .60
KfW International Finance Inc. 4.98%-4.99% due 1/22-1/28/99 49.800 49.405 .58
British Gas Capital Inc. 5.10%-5.25% due 1/4-3/11/99 49.100 48.604 .57
BMW U.S. Capital Corp. 5.02%-5.03% due 12/3-12/17/98 48.200 48.131 .56
BP America Inc. 4.95%-5.32% due 12/14/98-1/20/99 47.800 47.578 .56
Procter & Gamble Co. 5.05%-5.15% due 12/7/98-1/5/99 45.000 44.853 .53
British Columbia (Province of) 4.86%-5.03% due 2/3-2/18/99 41.600 41.182 .48
BellSouth Telecommunications Inc. 5.02%-5.06% due 12/10/98-1/21/99 39.200 39.020 .46
France Telecom, SA 5.07%-5.35% due 12/14/98-2/11/99 39.200 38.955 .46
General Electric Capital Services, Inc. 5.18% due 12/1/98 38.000 37.995 .45
Commonwealth Bank of Australia 5.14%-5.42% due 12/2-12/4/98 37.000 36.986 .43
Caisse d'amortissement de la dette sociale 5.03% due 12/28/98 35.200 35.062 .41
International Lease Finance Corp. 5.19% due 1/15/99 29.400 29.205 .34
American Express Credit Corp. 5.34% due 12/9/98 26.200 26.166 .31
Sony Capital Corp. 5.20% due 12/11/98 (1) 23.400 23.363 .27
Rio Tinto America, Inc. 5.17%-5.35% due 12/18/98-2/12/99 (1) 22.900 22.741 .27
National Australia Funding (DE) Inc. 5.07%-5.13% due 1/19-2/4/99 21.100 20.915 .25
Household Finance Corp. 5.05% due 1/14/99 17.800 17.682 .21
FEDERAL AGENCY DISCOUNT NOTES- 2.23%
Freddie Mac 4.93%-5.08% due 1/15-2/25/99 119.860 118.508 1.39
Federal Home Loan Banks 4.95%-5.08% due 12/4/98-2/16/99 72.250 71.730 .84
NON-U.S. CURRENCY- 0.07%
New Taiwanese Dollar NT$190.7 5.890 .07
-------- --------
TOTAL SHORT-TERM SECURITIES (cost: $1,370.450
million) 1,369.628 16.09
-------- ------
TOTAL INVESTMENT SECURITIES (cost: $7,036.386
million) 8,518.631 100.05
Excess of payables over cash and receivables 4.085 .05
-------- ------
NET ASSETS 8,514.546 100.00%
======================================================== =====================
(1) Purchased in a private placement transaction; resale to the public may
require registration or sale only to qualified institutional buyers.
(2) Non-income-producing securities.
(3) Valued under procedures approved by the Board of Directors.
(4) Step-bond; coupon rate will increase at a later date.
ADR = American Depositary Receipts
The descriptions of the companies shown in the portfolio, which were obtained
from published reports and other sources believed to be reliable, are
supplemental and are not covered by the Report of Independent Accountants.
See Notes to Financial Statements
</TABLE>
<TABLE>
Equity Securities Added Equity Securities Eliminated
to the Portfolio Since November 30, 1997from the Portfolio Since November 30, 1997
<S> <C>
ADVANTEST Abbott Laboratories
AIDA Engineering Aetna
AMB Property Allegiance
Anglogold Allied Irish Banks
Barry Callebaut Aluminum Co. of America
Bayer American Home Products
Bell Atlantic Financial Services AMF Bowling
BOC Group Amway Japan
Bombardier Anglovaal
Broken Hill Proprietary APP Global Finance
Cendant Banco de Santander
Centrais Geradoras do Sul do Brasil Banco Nacional de Mexico
Corporacion Bancaria de Espana Bangkok Bank
DDI Bank of New York
DSM B.A.T Industries
Elektrim Bell Atlantic
Fairfax Financial Holdings Beneficial
Fuji Bank BG
Fuji Machine Mfg. Brierley Investments
Gencor Bristol-Myers Squibb
General Electric Bunzl
General Motors Burmah Castrol
General Re Carter Holt Harvey
George Weston Centrais Eletricas Brasileiras-ELECTROBRAS
Georgia-Pacific, Georgia-Pacific Group Centrica
Gold Fields Cia. Paulista de Forca e Luz-CPFL
Harsco Cie. Nationale a Portefeuille
Homestake Mining Daewoo Heavy Industries
Hysan Development Engen
JG Summit (Cayman) First Chicago
KGHM Polska Miedz Freeport-McMoRan Copper & Gold
King World Productions Friedrich Grohe
KN Energy Giant Food
Koninklijke Ahold GPU
Matsushita Communication Industrial Grupo Financiero Banamex Accival
Microsoft Hongkong Electric Holdings
Mitsui O.S.K. Lines IKON Office Solutions
Mobistar Imasco
Nintendo Inco
Nippon Telegraph and Telephone Industriforvaltnings AB Kinnevik
Nokia Istituto Mobiliare Italiano
NTT Mobile Communications Network Kawasaki Heavy Industries
OM Gruppen Kloof Gold Mining
Perkin-Elmer Land Securities
PLIVA Lion Nathan
Publishing & Broadcasting Lite-On Technology
Rockwell International Lloyds TSB Group
Rohm Loewen Group
Sakura Bank Lucent Technologies
Sanwa International Finance Mandamus
Security Capital Group MBL International Finance (Bermuda)
Security Capital Global Realty McCormick
Security Dynamics Technologies National Mutual Asia
Siemens National Westminster Bank
Skandinaviska Enskilda Banken Noranda
Telesp Celular Participacoes Novartis
Texas Instruments PacifiCare Health Systems
TNT Post Groep Philipp Holzmann
Unidanmark Portugal Telecom
Union Pacific Preussag
Wells Fargo Prudential
Repsol
Sidel
Staples
TB Finance (Cayman)
Telecommunicacoes Brasileiras
Tenneco
Textron
Thistle Hotels
Thorn
Tidnings AB Marieberg
Toyota Motor
Triplex Lloyd
Unilever
Unisource Worldwide
United Companies Financial
USA Waste Services
U.S. Industries
Warner-Lambert
WHSmith Group
Yasuda Fire and Marine Insurance
</TABLE>
<TABLE>
Capital World Growth and Income Fund, Inc.
Financial Statements
- ---------------------------------------- ------------------------------
Statement of Assets and Liabilities (dollars in
at November 30, 1998 millions)
- ----------------------------------------- ------------------------------
<S> <C> <C>
Assets:
Investment securities at market
(cost: $5,665.936) $7,149.003
Short-term securities
(cost: $1,370.450) 1,369.628
Cash .192
Receivables for--
Sales of investments $39.292
Sales of fund's shares 6.346
Dividends and accrued interest 24.142 69.780
------------------------------
8,588.603
Liabilities:
Payables for--
Purchases of investments 58.755
Repurchases of fund's shares 7.336
Management services 2.937
Accrued expenses 5.029 74.057
------------------------------
Net Assets at November 30, 1998--
Equivalent to $27.15 per share on
313,667,570 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $8,514.546
===============
---------------
Statement of Operations (dollars in
for the year ended November 30, 1998 millions)
- --------------------------------------------- ------------------------------
Investment Income:
Income:
Dividends $169.036
Interest 74.488 $243.524
------------
Expenses:
Management services fee 34.372
Distribution expenses 18.262
Transfer agent fee 5.574
Reports to shareholders .532
Registration statement and prospectus .658
Postage, stationery and supplies .886
Directors' fees .156
Auditing and legal fees .065
Custodian fee 1.897
Taxes other than federal income tax .102
Other expenses .095 62.599
-------------- --------------
Net investment income 180.925
--------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 753.023
Net increase in unrealized appreciation on investments 173.442
Net realized gain and increase in unrealized ---------------
appreciation on investments 926.465
---------------
Net Increase in Net Assets Resulting
from Operations $1,107.390
===============
- ---------------------------------------------- ------------------------------
Year ended
Statement of Changes in Net Assets November 30
(dollars in millions) 1998 1997
- ---------------------------------------------- ------------------------------
Operations:
Net investment income $ 180.925 $ 158.747
Net realized gain on investments 753.023 522.194
Net increase in unrealized appreciation
on investments 173.442 221.200
------------------------------
Net increase in net assets
resulting from operations 1,107.390 902.141
------------------------------
Dividends and Distributions Paid to Shareholders:
Dividends from net investment income (176.534) (160.940)
Distributions from net realized gain on investmen (524.360) (201.626)
------------------------------
Total dividends and distributions (700.894) (362.566)
Capital Share Transactions:
Proceeds from shares sold: 47,546,047
and 74,465,301 shares, respectively 1,246.606 1,853.652
Proceeds from shares issued in reinvestment
of net investment income dividends and distributions
of net realized gain on investments:
27,000,566 and 14,610,266 shares, respectively 665.329 342.876
Cost of shares repurchased: 39,209,730
and 26,987,023 shares, respectively (1,010.432) (669.041)
------------------------------
Net increase in net assets
resulting from capital share
transactions 901.503 1,527.487
------------------------------
Total Increase in Net Assets 1,307.999 2,067.062
Net Assets:
Beginning of year 7,206.547 5,139.485
------------------------------
End of year (including undistributed
net investment income: $14.301
and $20.571, respectively) $8,514.546 $7,206.547
==============================
See Notes to Financial Statements
</TABLE>
CAPITAL WORLD GROWTH AND INCOME FUND
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - 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.
SIGNIFICANT ACCOUNTING POLICIES - The following is a summary of the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at the last reported sale price on the exchange or market 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 equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market. Fixed-income securities
are valued at prices obtained from a pricing service, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued at the mean quoted bid and
asked prices or at prices for securities of comparable maturity, quality and
type. Securities with original maturities of one year or less having 60 days
or less to maturity are amortized to maturity based on their cost if acquired
within 60 days of maturity or, if already held on the 60th day, based on the
value determined on the 61st day. Securities and assets for which
representative market quotations are not readily available are valued at fair
value as determined in good faith by a committee appointed by the Board of
Directors.
NON-U.S. CURRENCY TRANSLATION - Assets or liabilities initially expressed in
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing
market rates at the end of the reporting period. Purchases and sales of
securities and income and expenses are translated into U.S. dollars at the
prevailing market rates on the dates of such transactions. The effects of
changes in non-U.S. currency exchange rates on investment securities are
included with the net realized and unrealized gain or loss on investment
securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - 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 premium on securities purchased are
amortized.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions paid
to shareholders are recorded on the ex-dividend date.
2. NON-U.S. TAXATION
Net realized gain and net unrealized gain of the fund derived in India are
subject to certain non-U.S. taxes at a rate of 10%. The fund provides for such
non-U.S. taxes on investment income, net realized gain and net unrealized gain.
3. FEDERAL INCOME TAXATION
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, 1998, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $1,477,938,000 of which
$1,916,205,000 related to appreciated securities and $438,267,000 related to
depreciated securities. During the year ended November 30, 1998, the fund
realized, on a tax basis, a net capital gain of $752,155,000 on securities
transactions. Net gains related to non-U.S. currency and other transactions of
$868,000 were treated as ordinary income for federal income tax purposes. The
cost of portfolio securities for book and federal income tax purposes was
$7,040,693,000 at November 30, 1998.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $34,372,000 for management services was
incurred 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 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; and 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 buy 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.
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution, the fund may
expend up to 0.30% of its average net assets annually for any activities
primarily intended to result in sales of fund shares, provided the categories
of expenses for which reimbursement is made are approved by the fund's Board of
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, 1998, distribution expenses under the Plan were $18,262,000. As of
November 30, 1998, accrued and unpaid distribution expenses were $4,485,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $5,280,000 (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.
TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer agent
for the fund, was paid a fee of $5,574,000.
DIRECTORS' FEES - 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, 1998, aggregate amounts deferred and earnings thereon were
$264,000.
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.
5. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities of $2,749,767,000
and $2,762,855,000, respectively, during the year ended November 30, 1998.
As of November 30, 1998, accumulated undistributed net realized gain on
investments was $717,071,000 and additional paid-in capital was $6,297,545,000.
The fund reclassified $561,000 from undistributed net investment income and
$2,200,000 from undistributed net realized gains to undistributed net realized
currency gains; and reclassified $10,100,000 and $33,643,000 from undistributed
net investment income and undistributed net realized gains, respectively, to
additional paid-in capital for the year ended November 30, 1998.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $1,897,000 includes $115,000 that was paid by these
credits rather than in cash.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
year ended November 30, 1998, such non-U.S. taxes were $14,895,000. Net
realized currency losses on dividends, interest, withholding taxes reclaimable,
and sales of non-U.S. bonds and notes, on a book basis, were $1,218,000 for the
year ended November 30, 1998.
<TABLE>
Per-Share Data and Ratios
Year ended November 30
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $25.89 $23.77 $20.22 $17.81 $17.00
------- ------- ------- ------- -------
Income From Investment Operations:
Net investment income .59 .640 .70 .61 .52
Net realized and unrealized gain on inves 3.12 3.045 3.91 2.72 .75
------- ------- ------- ------- -------
Total income from investment operations 3.71 3.685 4.61 3.33 1.27
------- ------- ------- ------- -------
Less Distributions:
Dividends from net investment income (.58) (.650)(1) (.72)(1) (.63) (.46)
Distributions from net realized gains (1.87) (.915) (.34) (.29) --
------- ------- ------- ------- -------
Total distributions (2.45) (1.565) (1.06) (.92) (.46)
------- ------- ------- ------- -------
Net Asset Value, End of Year $27.15 $25.89 $23.77 $20.22 $17.81
======= ======= ======= ======= =======
Total Return (2) 15.51% 16.36% 23.67% 19.41% 7.51%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $8,515 $7,207 $5,139 $3,611 $2,784
Ratio of expenses to average net assets .78% .82% .85% .88% .87%
Ratio of net income to average net assets 2.25% 2.53% 3.28% 3.24% 3.11%
Portfolio turnover rate 39.44% 32.41% 30.18% 25.50% 18.66%
(1) 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.
(2) Excludes maximum sales charge of 5.75%.
</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, 1998, the results of its operations,
the changes in its net assets and the per-share data and ratios for the years
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, 1998 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
December 31, 1998
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:
<TABLE>
<CAPTION>
Dividends and Distributions per Share
From Net
Investment From Net Realized From Net Realized
Reinvest Date Payment Date Income Short-term Gains Long-term Gains
<S> <C> <C> <C> <C>
December 12, 1997 December 15, 1997 $0.11 $0.365 $1.365*
March 20, 1998 March 23, 1998 0.12 0.015 .125
June 5, 1998 June 8, 1998 0.21 - -
September 25, 1998 September 28, 1998 0.14 - -
</TABLE>
*INCLUDES $0.411 LONG-TERM CAPITAL GAINS TAXED AT A MAXIMUM RATE OF 28%.
The fund also designates as a capital gain distribution a portion of earnings
and profits paid to shareholders in redemption of their shares.
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, 1998 is $0.0485 on a
per-share basis. Foreign source income earned by the fund was $0.3964.
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, 23% of the dividends
paid by the fund from net investment income represent qualifying dividends.
Certain states may exempt from income taxation that portion of the dividends
paid from net investment income that was derived from U.S. Treasury
obligations. For purposes of computing this exclusion, .07% of the dividends
paid by the fund from net investment income were derived from interest on U.S.
Treasury obligations.
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 retirement plan 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 TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 1999 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 1998 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.
PART C
OTHER INFORMATION
CAPITAL WORLD GROWTH AND INCOME FUND, INC.
ITEM 23. EXHIBITS
(a) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(b) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(c) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(d) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(e) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(f) None.
(g) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(h) None.
(i) Not applicable to this filing.
(j) Consent of Independent Auditors.
(k) None.
(l) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(m) Previously filed (see Post-Effective Amendment No. 7 filed January 29,
1998).
(n) EX-27 Financial data schedule (EDGAR).
(o) None.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 25. 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.
These policies insure 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 Capital World Growth and
Income Fund, Inc. (the "Fund" or the "Corporation") 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
Investment Company Act of 1940 (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 1940 Act.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
None.
ITEM 27. 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.,
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, U.S. Treasury Money Fund of America
and Washington Mutual Investors Fund, Inc.
<TABLE>
<CAPTION>
(B) (1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C> <C> <C> <C>
David L. Abzug Regional Vice President None
27304 Park Vista Road
Agoura Hills, CA 91301
John A. Agar Vice President None
1501 N. University, Suite 227A
Little Rock, AR 72207
Robert B. Aprison Vice President None
2983 Bryn Wood Drive
Madison, WI 53711
L William W. Bagnard Vice President None
Steven L. Barnes Senior Vice President None
5400 Mount Meeker Road
Suite 1
Boulder, CO 80301-3508
B Carl R. Bauer Assistant Vice President None
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 Vice President None
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior Vice President None
P.O. Box 1665
Brentwood, TN 37024-1665
Michael L. Brethower Senior Vice President None
2320 North Austin Avenue
Georgetown, TX 78626
C. Alan Brown Regional Vice President None
4129 Laclede Avenue
St. Louis, MO 63108
H J. Peter Burns Vice President None
Brian C. Casey Regional Vice President None
8002 Greentree Road
Bethesda, MD 20817
Victor C. Cassato Senior Vice President None
609 W. Littleton Blvd., Suite 310
Littleton, CO 80120
Christopher J. Cassin Senior Vice President None
111 W. Chicago Avenue, Suite G3
Hinsdale, IL 60521
Denise M. Cassin Vice President None
1301 Stoney Creek Drive
San Ramon, CA 94538
L Larry P. Clemmensen Director Senior Vice President
L Kevin G. Clifford Director, President and None
Co-Chief Executive Officer
Ruth M. Collier Senior Vice President None
145 West 67th St., #12K
New York, NY 10023
S David Coolbaugh Assistant Vice President None
Thomas E. Cournoyer Vice President None
2333 Granada Boulevard
Coral Gables, FL 33134
Douglas A. Critchell Senior Vice President None
3521 Rittenhouse Street, N.W.
Washington, D.C. 20015
L Carl D. Cutting Vice President None
Daniel 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 E. Main Street
Jenks, OK 74037
Kirk D. Dodge Senior Vice President None
633 Menlo Avenue, Suite 210
Menlo Park, CA 94025
Peter J. Doran Senior Vice President None
1205 Franklin Avenue
Garden City, NY 11530
L Michael J. Downer Secretary None
Robert W. Durbin Vice President None
74 Sunny Lane
Tiffin, OH 44883
I Lloyd G. Edwards Senior Vice President None
L Paul H. Fieberg Senior Vice President None
John Fodor Vice President None
15 Latisquama Road
Southborough, MA 01772
Clyde E. Gardner Senior Vice President None
Route 2, Box 3162
Osage Beach, MO 65065
B Evelyn K. Glassford Vice President None
Jeffrey J. Greiner Vice President None
12210 Taylor Road
Plain City, OH 43064
L Paul G. Haaga, Jr. Director President and Director
B Mariellen Hamann Assistant Vice President None
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
L Robert L. Johansen Vice President None
Michael J. Johnston Director None
630 Fifth Avenue, 36th Floor
New York, NY 10111
B Damien M. Jordan Vice President None
Arthur J. Levine Senior Vice President None
12558 Highlands Place
Fishers, IN 46038
B Karl A. Lewis Assistant Vice President None
T. Blake Liberty Regional Vice President None
5506 East Mineral Lane
Littleton, CO 80122
Mark Lien Regional Vice President None
5570 Beechwood Terrace
West Des Moines, IA 50266
L Lorin E. Liesy Assistant Vice President None
L Susan G. Lindgren Vice President - None
Institutional
Investment Services
LW Robert W. Lovelace Director None
Stephen A. Malbasa Vice President None
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President None
5241 South Race Street
Littleton, CO 80121
L J. Clifton Massar Director, Senior Vice None
President
L E. Lee McClennahan Senior Vice President None
L Jamie R. McCrary Assistant Vice President None
S John V. McLaughlin Senior Vice President None
Terry W. McNabb Vice President None
2002 Barrett Station Road
St. Louis, MO 63131
L R. William Melinat Vice President - None
Institutional
Investment Services
David R. Murray Vice President None
60 Briant Drive
Sudbury, MA 01776
Stephen S. Nelson Vice President None
P.O. Box 470528
Charlotte, NC 28247-0528
William E. Noe Regional Vice President None
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Vice President None
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Vice President None
62 Park Drive
Glenview, IL 60025
Fredric Phillips Senior Vice President None
175 Highland Avenue, 4th Floor
Needham, MA 02494
B Candance D. Pilgrim Assistant Vice President None
Carl S. Platou Vice President None
4021 96th Avenue, S.E.
Mercer Island, WA 98040
L John O. Post, Jr. Vice President None
S Richard P. Prior Assistant Vice President None
Steven J. Reitman Senior Vice President None
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Vice President None
11404 Foxhaven Drive
Charlotte, NC 28277
George S. Ross Senior Vice President None
55 Madison Avenue
Morristown, NJ 07962
L Julie D. Roth Vice President None
L James F. Rothenberg Director None
Douglas F. Rowe Vice President None
30008 Oakland Hills Drive
Georgetown, TX 78628
Christopher S. Rowey Regional Vice President None
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Senior Vice President None
1080 Bay Pointe Crossing
Alpharetta, GA 30005
Richard R. Samson Senior Vice President None
4604 Glencoe Avenue, #4
Marina del Rey, CA 90292
Joseph D. Scarpitti Vice President None
31465 St. Andrews
Westlake, OH 44145
L R. Michael Shanahan Director None
David W. Short Director, Chairman of the None
1000 RIDC Plaza, Suite 212 Board and Co-Chief
Pittsburgh, PA 15238-2941 Executive Officer
William P. Simon, Jr. Senior Vice President None
912 Castlehill Lane
Devon, PA 91333
L John C. Smith Assistant Vice President - None
Institutional Investment
Services
Rodney G. Smith Vice President None
100 N. Central Expressway
Suite 1214
Richardson, TX 75080
Tony Soave Regional Vice President None
8831 Morning Mist Drive
Clarkston, MI 48348
Nicholas D. Spadaccini Regional Vice President None
855 Markley Woods Way
Cincinnati, OH 45230
L Kristen J. Spazafumo Assistant Vice President None
Daniel S. Spradling Senior Vice President None
181 Second Avenue
Suite 228
San Mateo, CA 94401
B Max D. Stites Vice President None
Thomas A. Stout Regional Vice President None
3919 Whooping Crane Circle
Virginia Beach, VA 23455
Craig R. Strauser Vice President None
3 Dover Way
Lake Oswego, OR 97034
Francis N. Strazzeri Senior Vice President None
31641 Saddletree Drive
Westlake Village, CA 91361
L Drew W. Taylor Assistant Vice President None
S James P. Toomey Vice President None
I Christopher E. Trede Vice President None
George F. Truesdail Vice President None
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Vice President None
60 Reedland Woods Way
Tiburon, CA 94920
Thomas E. Warren Regional Vice President None
119 Faubel Street
Sarasota, FL 34242
L J. Kelly Webb Senior Vice President, None
Treasurer
Gregory J. Weimer Vice President None
206 Hardwood Drive
Venetia, PA 15367
B Timothy W. Weiss Director None
George Wenzel Regional Vice President None
3406 Shakespeare Drive
Troy, MI 48084
N. Dexter Williams Senior Vice President None
P.O. Box 2200
Danville, CA 94526
Timothy J. Wilson Vice President None
113 Farmview Place
Venetia, PA 15367
B Laura L. Wimberly Vice President None
H Marshall D. Wingo Director, Senior Vice None
President
L Robert L. Winston Director, Senior Vice None
President
William R. Yost Vice President None
9320 Overlook Trail
Eden Prairie, MN 55347
Janet M. Young Regional Vice President None
1616 Vermont
Houston, TX 77006
Scott D. Zambon Regional Vice President None
2887 Player Lane
Tustin Ranch, CA 92782
</TABLE>
__________
L Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW Business Address, 11100 Santa Monica Boulevard, 15th Floor, Los Angeles, CA
90025
B Business Address, 135 South State College Boulevard, Brea, CA 92821
S Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251
H Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
ITEM 27. (c) None.
ITEM 28. 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, as amended, 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 transfer
agent, American Funds Service Company, 135 South State College Blvd., Brea, CA
92821, 3500 Wiseman Boulevard, San Antonio, TX 78251, 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 42640 and 5300 Robin Hood Road, Norfolk, VA
23514.
Records covering portfolio transactions are also maintained and kept by the
custodian, The Chase Manhattan Bank, One Chase Manhattan Plaza, New York, NY
10081.
ITEM 29. MANAGEMENT SERVICES.
None.
ITEM 30. UNDERTAKINGS.
n/a
SIGNATURE OF REGISTRANT
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this 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
26th day of January, 1999.
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
its registration statement has been signed below on January 26, 1999, by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
<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
Stefanie Powers 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
Counsel represents that this amendment does not contain disclosures that would
make the amendment ineligible for effectiveness under the provisions of rule
485(b).
/s/ Michael J. Downer
(Michael J. Downer)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 9 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
December 31, 1998, relating to the financial statements and per-share data and
ratios of Capital World Growth and Income Fund, which appears in such Statement
of Additional Information, and to the incorporation by reference of our report
into the Prospectus which constitutes part of this Registration Statement. We
also consent to the references to us under the headings "Independent
Accountants" and "Reports to Shareholders" in such Statement of Additional
Information and to the reference to us under the heading "Financial Highlights"
in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
January 25, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 7,036,386
<INVESTMENTS-AT-VALUE> 8,518,631
<RECEIVABLES> 69,780
<ASSETS-OTHER> 192
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,588,603
<PAYABLE-FOR-SECURITIES> 58,755
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 15,302
<TOTAL-LIABILITIES> 74,057
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,297,545
<SHARES-COMMON-STOCK> 313,667,570
<SHARES-COMMON-PRIOR> 278,330,687
<ACCUMULATED-NII-CURRENT> 14,301
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 717,071
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,482,492
<NET-ASSETS> 8,514,546
<DIVIDEND-INCOME> 169,036
<INTEREST-INCOME> 74,488
<OTHER-INCOME> 0
<EXPENSES-NET> 62,599
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<PER-SHARE-NII> .590
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</TABLE>
