[THE AMERICAN FUNDS GROUP(R)]
CAPITAL WORLD GROWTH
AND INCOME FUND
[photos of various countries' flags]
[watermark: chess pieces and numbers]
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED MAY 31, 1999
CAPITAL WORLD GROWTH AND INCOME FUND(SM) seeks long-term capital growth while
providing current income. It invests on a global basis in a diversified
portfolio consisting primarily of common stocks and other equity securities.
Capital World Growth and Income Fund is one of the 29 mutual funds in The
American Funds Group,(r) the nation's third-largest mutual fund family. For
more than six decades, Capital Research and Management Company, the American
Funds adviser, has invested with a long-term focus based on thorough research
and attention to risk.
Results at a Glance
(with distributions reinvested)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Average Annual Compound Return
6 Months 12 Months
Through Through 3 Years 5 Years Lifetime
5/31/99 5/31/99 6/1/96-5/31/99 6/1/94-5/31/99 3/26/93-5/31/99
CAPITAL WORLD
GROWTH AND
INCOME FUND +8.7% +9.7% +17.7% +17.2% +17.1%
Morgan Stanley
Capital
International
World Index +8.9 +13.5 +17.2 +16.1 +16.1
Lipper Global
Stock
Funds Average +10.0 +5.2 +12.9 +12.9 +13.8
</TABLE>
The MSCI World Index is unmanaged and measures all of the world's major stock
markets, including the U.S. The Lipper Global Stock Funds Average consists of
funds that invest at least 25% of their portfolios in securities traded outside
of the United States.
Fund results were computed without a sales charge, unless otherwise indicated.
Here are the fund's total returns and average annual compound returns with all
distributions reinvested for periods ended June 30, 1999 (the most recent
calendar quarter), assuming payment of the 5.75% maximum sales charge at the
beginning of the stated periods:
Since inception on 3/26/93: +159.60%, or +16.45% a year; 5 years: +120.62%, or
+17.15% a year; 12 months: +7.81%. Sales charges are lower for accounts of
$50,000 or more.
The fund's 30-day yield as of June 30, 1999, calculated in accordance with the
Securities and Exchange Commission formula, was 1.69%.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS AND ARE NOT PREDICTIVE OF
FUTURE RESULTS. SHARE PRICE AND RETURN WILL VARY, SO YOU MAY LOSE MONEY.
INVESTING FOR SHORT PERIODS MAKES LOSSES MORE LIKELY. INVESTMENTS ARE NOT
FDIC-INSURED, NOR ARE THEY DEPOSITS OF OR GUARANTEED BY A BANK OR ANY OTHER
ENTITY. INVESTING OUTSIDE THE UNITED STATES IS SUBJECT TO ADDITIONAL RISKS,
SUCH AS CURRENCY FLUCTUATIONS, POLITICAL INSTABILITY, DIFFERING SECURITIES
REGULATIONS AND PERIODS OF ILLIQUIDITY, WHICH ARE DETAILED IN THE FUND'S
PROSPECTUS.
FELLOW SHAREHOLDERS:
Capital World Growth and Income Fund continued to make good progress during the
six months ended May 31, 1999. The value of your investment appreciated 8.7%
if, like most shareholders, you reinvested your dividends totaling 21 cents a
share and your capital gain distributions totaling $2.29 a share. If you took
your dividends in cash, the value of your holdings rose 7.8% and you received
an income return of 0.8%.
Your fund differs from most global funds in that it pursues income as well as
growth. And in contrast to most global indexes, Capital World Growth and Income
Fund invests no more than 40% of its assets in any one country. That makes
finding a single benchmark to compare it against quite difficult. The Morgan
Stanley Capital International (MSCI) World Index measures 22 major markets, but
the steady rise of the U.S. market in recent years means that U.S. stocks now
constitute 52% of that index.
In comparison, U.S. stocks make up just under 30% of Capital World Growth and
Income Fund's portfolio. Much of the U.S. market rise has been driven by the
stocks of a few large companies, many of which we found too highly valued, and
which paid low dividends or none at all.
Even so, Capital World Growth and Income Fund's 8.7% return was in line with
the 8.9% return of the MSCI World Index. By contrast, the MSCI EAFE(r) (Europe,
Australasia, Far East) Index, which measures major markets excluding the United
States, was up only 4.2% for the period. Your fund slightly trailed the global
stock fund average return of 10.0%, as measured by Lipper, Inc.
THE SIX MONTHS IN REVIEW
When Capital World Growth and Income Fund's fiscal year began on December 1,
markets around the world were staging a lively recovery from one of the most
turbulent periods in recent memory. After retreating to the safe haven of
government bonds late last summer, investors around the world rekindled their
romance with stocks in the fall, confident that they had seen the worst of the
market turmoil prompted by the crises in Asia and Russia.
Recovery in the U.S. stock market, by far your fund's largest country
concentration, continued throughout the six months. Once again driven by
large-company stocks and megamergers, the U.S. market closed the first half of
the fund's fiscal year with a 13.2% gain. (All market returns are based on MSCI
country indexes, expressed in dollar terms unless otherwise stated, and assume
reinvestment of dividends.)
Despite the overall gains, individual holdings reflected the mixed nature of
the U.S. market during the period. One of Capital World Growth and Income
Fund's largest holdings, U.S. utilities giant Williams Companies, for example,
was up 79.8%. By contrast, another of the fund's larger investments, First
Union, was down 24.2%. The disappointing result reflected the bank's problems
in gaining the full efficiencies of its recent merger with CoreStates
Financial. There was also a general decline in the stocks of banks amid fears
of some loan losses in developing countries, particularly Russia and parts of
Latin America, as well as concerns that the Federal Reserve would raise
interest rates. That said, we believe many bank stocks still offer attractive
opportunities for long-term growth and above-average dividends.
WHERE THE
FUND'S ASSETS
WERE INVESTED
Percent by country as of 5/31/99
[begin pie chart]
<TABLE>
<CAPTION>
<S> <C>
EUROPE 34.7%
United Kingdom 12.7
Germany 4.1
Italy 4.0
Netherlands 3.8
France 2.6
Sweden 1.9
Denmark .9
Spain .8
Ireland .7
Norway .6
Poland .6
Luxembourg .5
Switzerland .4
Finland .4
Croatia .3
Portugal .2
Belgium .2
THE AMERICAS 37.4%
United States 29.9
Canada 4.9
Mexico 1.1
Argentina .9
Brazil .5
Chile .1
ASIA/PACIFIC 14.4%
Japan 4.8
Australia 4.6
Hong Kong 2.0
Philippines 1.1
New Zealand 1.0
Thailand .4
South Korea .3
Israel .2
OTHER 1.1%
Supranational .6
South Africa .5
BONDS, CASH
& EQUIVALENTS 12.4%
100.0%
</TABLE>
[end chart]
The telecommunications sector has experienced tremendous growth in recent
years, and Capital World Growth and Income Fund was well-positioned to take
advantage of the trend. At 15.7% of assets, telecommunications is the
portfolio's heaviest industry concentration, as it has been for some time.
German telecommunications provider Mannesmann, a major holding for Capital
World Growth and Income Fund, was up 26.4%, for instance.
Canada, your fund's third-largest country concentration, experienced solid
economic growth and a stronger currency, helping the stock market post a 15.4%
gain. Across the Atlantic, most European markets climbed in the early winter,
fueled by a flurry of merger activity and optimism about the new single
currency, the euro, which was introduced on January 1. The MSCI Europe Index
reached a record high on January 6. A slump in economic growth in much of
Europe interrupted the momentum, however, and several European markets ended
the period lower than where they had started.
The major stock markets of the European Monetary Union did post gains if
measured in the euro, but unfortunately those gains were offset by a drop in
value of the euro against the dollar, leading to lower, and in some cases,
negative results for euro-based investments measured in U.S. dollars.
France, for instance, ended the six months with a strong 13.6% return in the
local currency, which translated into a meek 2.4% increase in U.S. dollar
terms. Faring worse, the German market declined 6.8% measured in U.S. dollars.
German telecommunications providers did well nonetheless. Alongside Mannesmann,
mentioned earlier, Deutsche Telekom posted a 41.8% return.
In the United Kingdom, the fund's second-largest country concentration, the
stock market was soft amid an idle economy and fears that the strong pound
would negatively affect British trade. To stimulate growth, the Bank of England
slashed interest rates four times during the period, helping the stock market
close the six months with a 5.6% return. Dixons Group, for instance, the United
Kingdom's largest retailer of consumer electronics and one of Capital World
Growth and Income Fund's largest holdings, experienced a 46.0% increase.
On the other side of the globe, investors cautiously returned to Asia, pulling
markets out of their earlier misery. In an effort to reverse Japan's worst
recession since World War II, the Japanese government cut taxes and increased
the money supply to stimulate spending and economic growth. The Japanese market
responded by finishing the period with a 14.6% gain. The fund was underweighted
in Japan, largely because few stocks provided much if any yield in a market
where the average gross dividend yield was a very low 0.8% for the period as
measured by MSCI.
The Hong Kong stock market also staged a comeback with a gain of 17.9%, while
Philippine stocks returned 19.6%. Elsewhere in developing markets, Mexico
rebounded vigorously from financial woes that had dragged its equity market
into the negative zone six months ago, posting a remarkable 47.5% increase. The
stock of Telefonos de Mexico illustrated the trend, ending the six months with
a 71.7% gain.
A NOTE ON DIVIDENDS
Capital World Growth and Income Fund paid dividends of 9 cents a share in
December and 12 cents a share in March. On June 7, after the end of the fiscal
reporting period, the fund paid a dividend of 18 cents a share. Dividends vary
from quarter to quarter, mainly because companies outside North America
typically pay dividends annually or semi-annually, as opposed to quarterly,
which is customary in the United States. Dividends paid by the fund in
September, December and March generally are smaller than those paid in June.
LOOKING FORWARD
A number of countries including Japan still struggle to strengthen flagging
economies. Adjustment to a single currency continues in Europe. In the United
States, inflation shows some signs of increasing. We believe, however, that the
outlook for global investing remains very encouraging, especially when viewed
over the long term. Deregulation of various industries is progressing around
the world, creating new investment opportunities and leading businesses to
expand beyond their borders. Inflation remains tame in much of the world, and
interest rates are still low. As globalization continues, we believe world
markets will continue to provide attractive opportunities for both growth and
income.
As always, we will closely monitor economic and political developments while
combing the globe for solid, well-managed companies and investing in the best
of them on your behalf. Despite the low level of dividends in many major stock
markets today, the fund continues to achieve not only solid growth, but also
significantly higher income than most global stock funds. As the table on the
inside front cover indicates, over its lifetime the fund has outpaced the MSCI
World Index as well as the average global equity fund, as measured by Lipper.
We look forward to reporting to you again in six months.
Cordially,
/s/Thierry Vandeventer
Thierry Vandeventer
Chairman of the Board
/s/Paul G. Haaga
Paul G. Haaga
President
July 16, 1999
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<CAPTION>
<S> <C> <C> <C>
PERCENT OF PERCENT CHANGE IN
10 LARGEST THE FUND'S U.S. $ SHARE PRICE
EQUITY COUNTRY NET ASSETS SINCE 11/30/98
HOLDINGS
Telecom Italia Italy 2.92% -2.88%
Deutsche Germany 1.92 +41.82
Telekom
Williams USA 1.77 +79.83
Companies
Mannesmann Germany 1.50 +26.39
AstraZeneca United Kingdom 1.27 +7.18
Dixons Group United Kingdom 1.05 +46.03
Northeast USA 1.02 +11.90
Utilities
AT&T - Liberty USA 1.02 +64.81
Media Group
ING Groep Netherlands 1.01 -6.88
First Union USA .97 -24.18
</TABLE>
<TABLE>
Capital World Growth and Income Fund
Investment Portfolio, May 31, 1999
<S> <C> <C> <C>
Unaudited
Shares or Market Percent
Principal Value of Net
Equity Securitites Amount (Million Assets
- -------------------------------------------- -------- ----------------
TELECOMMUNICATIONS - 15.74%
Telecom Italia SpA, nonconvertible savings shares (Italy) 30,651,752$165.494
Telecom Italia SpA 9,888,775 101.659 2.92%
Deutsche Telekom AG (Germany) 4,411,618 175.545 1.92
Mannesmann AG (ADR) (Germany) 938,250 128.540
Mannesmann AG 62,500 8.518 1.50
Telefonos de Mexico, SA de CV, Class L (ADR) (Mexico) 1,032,300 82.520 .90
Telecom Corp. of New Zealand Ltd. (New Zealand) 9,191,000 39.677
Telecom Corp. of New Zealand Ltd. (ADR) 720,700 24.954 .85
Telecom Corp. of New Zealand Ltd. (1) 3,038,610 13.117
Tele Danmark AS (Denmark) 379,900 38.733
Tele Danmark AS, Class B (ADR) 565,100 28.926 .74
Koninklijke PTT Nederland NV (Netherlands) 1,286,571 61.969 .68
U S WEST, Inc. (USA) 1,036,500 56.036 .61
Telecom Italia Mobile SpA, savings shares (Italy) 12,565,800 42.197
Telecom Italia Mobile SpA 2,224,200 13.057 .60
Telefonica, SA (Spain) 1,103,130 52.766 .58
Telecom Argentina STET-France Telecom SA, Class B 1,511,700 43.084 .47
(ADR) (Argentina)
British Telecommunications PLC (United Kingdom) 2,000,000 33.617 .37
France Telecom SA (France) 407,000 31.120 .34
NTT Mobile Communications Network, Inc. (Japan) 513 27.936 .30
Swisscom AG (Switzerland) (2) 68,126 24.493 .27
Teleglobe Inc. (Canada) 808,100 24.431 .27
Korea Telecom Corp. (ADR) (South Korea) (2) 744,500 23.684 .26
Nextel Communications, Inc., Series D, 13.00% 14,455 15.467
preferred 2009 (USA) (2,3)
Nextel Communications, Inc. convertible preferred 2013 (1,2) 20,000 8.000 .26
TELECEL - Comunicacoes Pessoais, SA (Portugal) 178,000 22.350 .24
Nortel Inversora SA, preferred, Class B (ADR) (Argentina) 1,465,000 22.158 .24
Philippine Long Distance Telephone Co. (ADR) (Philippines) 750,000 21.656 .24
Embratel Participacoes SA (ADR) (Brazil) 1,500,000 20.625 .22
AT&T Corp. (USA) 350,000 19.425 .21
Mobistar NV (Belgium) (1,2) 300,000 16.978 .19
Telefonica de Argentina SA, Class B (ADR) (Argentina) 504,500 16.333 .18
AirTouch Communications (USA) (2) 100,000 10.050 .11
Telesp Celular Participacoes SA, preferred (Brazil) 190,915,800 8.806
Telesp Celular Participacoes SA 32,000,000 .942 .11
SmarTone Telecommunications Holdings Ltd. (Hong Kong 2,000,000 6.203 .07
- Incorporated in Bermuda) (1)
Crown Castle International Corp., 12.75% preferred 2010 5,159 5.469 .06
(USA) (1,2,3)
DDI Corp. (Japan) 500 2.299 .03
BANKING - 11.12%
First Union Corp. (USA) 1,929,700 88.887 .97
Australia and New Zealand Banking Group Ltd. (Australia) 9,405,862 68.222 .75
Washington Mutual, Inc. (USA) 1,630,000 62.246 .68
Royal Bank of Canada (Canada) 1,259,200 57.683 .63
Westpac Banking Corp. (Australia) 7,200,589 49.263 .54
Commonwealth Bank of Australia (Australia) 2,993,172 48.081 .53
Bank of Scotland (United Kingdom) 3,200,000 43.581 .48
Toronto-Dominion Bank (Canada) 808,200 42.673 .47
ABN AMRO Holding NV (Netherlands) 1,923,313 42.518 .46
Siam Commercial Bank PCL, units (Thailand) (1,2) 28,600,000 39.347 .43
Bank of the Philippine Islands (Philippines) 12,154,520 38.484 .42
Wells Fargo & Co. (USA) 900,000 36.000 .39
Safra Republic Holdings SA (Luxembourg) 532,000 35.663 .39
Hang Seng Bank Ltd. (Hong Kong) 3,300,000 35.322 .39
National Australia Bank Ltd. (Australia) 2,037,527 32.972 .36
National Bank of Canada (Canada) 2,000,000 29.793 .33
BANK ONE CORP. (USA) 484,000 27.376 .30
SunTrust Banks, Inc. (USA) 365,000 24.638 .27
Bank of Nova Scotia (Canada) 1,128,400 24.467 .27
HSBC Holdings PLC (United Kingdom) 717,533 23.467 .26
Asahi Bank, Ltd. (Japan) 4,150,000 19.659 .21
Bank Leumi le-Israel B.M. (Israel) (2) 10,250,000 19.303 .21
Corporacion Bancaria de Espana, SA (Spain) 860,000 19.226 .21
Wilmington Trust Corp. (USA) 300,000 17.644 .19
Unidanmark A/S, Class A (Denmark) 215,000 15.055 .16
Chase Manhattan Corp. (USA) 200,000 14.500 .16
Sakura Bank, Ltd. (Japan) 4,000,000 13.511 .15
Unibanco-Uniao de Bancos Brasileiros SA, units (GDR) (Brazil) 480,000 10.830 .12
Fuji Bank, Ltd. (Japan) 1,700,000 10.714 .12
Skandinaviska Enskilda Banken AB, Class A (Sweden) 800,000 9.662 .10
Sanwa International Finance (Bermuda) Trust 1.25% 849,000,000 7.239 .08
preferred share units 2005 (Japan) (1)
ForeningsSparbanken AB, Class A (Sweden) 226,600 4.632 .05
Banco de Galicia y Buenos Aires SA, Class B (ADR) (Argentina) 192,112 4.022 .04
UTILITIES: ELECTRIC & GAS - 5.53%
Williams Companies, Inc. (USA) 3,120,000 161.655 1.77
Northeast Utilities (USA) (2) 5,290,000 93.236 1.02
Dynegy Inc. (USA) 1,975,000 34.192 .37
Columbia Energy Group (USA) 591,600 31.651 .35
National Power PLC (United Kingdom) 3,830,000 29.773 .33
El Paso Energy Corp. (USA) 560,000 20.195 .22
Scottish and Southern Energy PLC (United Kingdom) 2,079,138 19.703 .21
Public Service Co. of New Mexico (USA) 864,300 17.934 .20
MidAmerican Energy Holdings Co. (formerly 500,000 16.875 .18
CalEnergy Co., Inc.) (USA) (2)
Niagara Mohawk Holdings, Inc. (USA) (2) 1,100,000 16.363 .18
Sonat Inc. (USA) 454,100 16.092 .18
K N Energy, Inc. (USA) 547,500 11.737 .13
Australian Gas Light Co. (Australia) 1,734,726 10.974 .12
NICOR Inc. (USA) 175,000 6.584 .07
Empresa Nacional de Electricidad SA (ADR) (Chile) 598,487 6.546 .07
National Fuel Gas Co. (USA) 127,000 6.033 .07
Scottish Power PLC (United Kingdom) 400,000 3.402 .04
KeySpan Energy Corp. (USA) 85,200 2.300 .02
HEALTH & PERSONAL CARE - 4.42%
AstraZeneca PLC (United Kingdom) 2,944,834 115.756 1.27
Elan Corp., PLC (ADR) (Ireland) (2) 830,000 44.820
Elan Finance Corp. 0.00% convertible debentures 2018 (1) $29,000,000 14.754 .75
Athena Neurosciences, Inc. 4.75% convertible $9,176,000 9.555
debentures 2004
Pfizer Inc. (USA) 538,000 57.566 .63
Glaxo Wellcome PLC (United Kingdom) 2,000,000 55.387 .61
Forest Laboratories, Inc. (USA) (2) 750,000 35.719 .39
PLIVA d.d. (GDR) (Croatia) 1,500,000 24.375 .27
Merck & Co., Inc. (USA) 289,400 19.534 .21
Eli Lilly and Co. (USA) 200,000 14.287 .16
Luxottica Group SpA (ADR) (Italy) 790,700 12.454 .13
MERCHANDISING - 4.10%
Dixons Group PLC (United Kingdom) 5,430,000 95.813 1.05
Tesco PLC (United Kingdom) 18,889,753 54.808 .60
J.C. Penney Co., Inc. (USA) 800,000 41.350 .45
Loblaw Companies Ltd. (Canada) 1,172,100 30.824 .34
Safeway PLC (United Kingdom) 6,500,000 26.897 .29
Limited Inc. (USA) 513,700 25.107 .27
Kingfisher PLC (United Kingdom) 1,686,000 21.214 .23
MYCAL Corp. (Japan) 3,578,000 19.780 .22
Lowe's Companies, Inc. (USA) 300,000 15.581 .17
Tandy Corp. (USA) 150,000 12.375 .14
Coles Myer Ltd. (Australia) 2,150,882 11.241 .12
Wal-Mart Stores, Inc. (USA) 250,000 10.656 .12
Koninklijke Ahold NV 3.00% convertible $9,513,000 5.720 .06
debentures 2003 (Netherlands)
George Weston Ltd. (Canada) 83,300 3.434 .04
BUSINESS & PUBLIC SERVICES - 3.63%
TNT Post Groep (Netherlands) 3,083,200 77.300 .85
Brambles Industries Ltd. (Australia) 1,524,354 40.632 .45
United Utilities PLC (United Kingdom) 2,591,910 31.160 .34
Suez Lyonnaise des Eaux (France) 150,000 24.795
Suez Lyonnaise des Eaux, tax-free rights (Belgium) (2) 135,000 .001 .27
Hays PLC (United Kingdom) 2,560,000 23.835 .26
Thames Water PLC (United Kingdom) 1,266,667 19.395 .21
Hyder PLC (United Kingdom) 1,495,000 17.985 .20
Electronic Data Systems Corp. (USA) 300,000 16.875 .18
Quintiles Transnational Corp. 4.25% convertible $14,000,000 15.488 .17
debentures 2000 (USA) (1)
Omnicom Group Inc. (USA) 200,000 14.000 .15
Columbia/HCA Healthcare Corp. (USA) 550,000 12.959 .14
Cintas Corp. (USA) 200,000 12.700 .14
Cendant Corp. 7.50% PRIDES convertible preferred (USA) 300,000 9.525 .10
American Water Works Co., Inc. (USA) 300,000 9.300 .10
Hutchison Delta Finance Ltd. 7.00% convertible debentures
2002 (Hong Kong-Incorporated in the Cayman Islands (1,4) $6,000,000 6.000 .07
BEVERAGES & TOBACCO - 3.63%
Imperial Tobacco Ltd. (United Kingdom) 7,290,295 81.926 .90
RJR Nabisco Holdings Corp. (USA) 2,025,000 62.648 .68
Gallaher Group PLC (United Kingdom) 9,500,000 59.994 .66
Foster's Brewing Group Ltd. (Australia) 21,112,399 59.760 .65
Philip Morris Companies Inc. (USA) 800,000 30.850 .34
Swedish Match AB (Sweden) 4,000,000 14.539 .16
Coca-Cola Amatil Ltd. (Australia) 1,929,325 8.218 .09
UST Inc. (USA) 200,000 6.100 .07
Asahi Breweries, Ltd. (Japan) 318,000 4.027 .04
Coca-Cola Beverages PLC (United Kingdom) (2) 2,006,362 3.709 .04
FOREST PRODUCTS & PAPER - 3.07%
Fort James Corp. (USA) 1,700,000 62.263 .68
Smurfit-Stone Container Corp. (USA) (2) 2,471,300 53.287 .58
Georgia-Pacific Corp., Georgia-Pacific Group (USA) 400,000 34.575 .38
Metsa-Serla Oy 4.375% convertible debentures 2002 $30,000,000 28.350 .31
(Finland) (1)
Bowater Inc. (USA) 500,000 25.750 .28
International Paper Co. (USA) 445,560 22.278 .24
Champion International Corp. (USA) 330,000 16.911 .19
Kimberly-Clark de Mexico, SA de CV (Mexico) 4,400,000 14.538 .16
Sonoco Products Co. (USA) 577,500 14.438 .16
UPM-Kymmene Corp. (Finland) 287,000 8.390 .09
BROADCASTING & PUBLISHING - 2.85%
AT&T Corp. - Liberty Media Group (USA) (2) 1,396,250 92.763 1.02
Time Warner Inc. (USA) 825,000 56.152 .61
Viacom Inc., Class B (USA) (2) 850,000 32.725 .36
CANAL (France) 59,356 17.135 .19
ProSieben Media AG (Germany) 400,000 17.040 .19
News Corp. Ltd., preferred (Australia) 1,934,770 14.754 .16
Seat Pagine Gialle SpA (Italy) 6,000,000 8.164
Seat Pagine Gialle SpA, savings shares 7,000,000 5.853 .15
United Pan-Europe Communications NV (Netherlands) (2) 175,600 10.732 .12
CanWest Global Communications Corp. (Canada) 387,300 5.047 .05
REAL ESTATE - 2.80%
Sun Hung Kai Properties Ltd. (Hong Kong) 6,360,000 50.850 .56
Hysan Development Co. Ltd. (Hong Kong) 21,000,000 31.008 .34
AMB Property Corp. (USA) 1,300,000 29.250 .32
Meditrust Corp. (USA) 1,630,339 22.621 .25
Amoy Properties Ltd. (Hong Kong) 27,000,000 22.284 .24
CarrAmerica Realty Corp. (USA) 850,000 21.197 .23
IndyMac Mortgage Holdings, Inc. (USA) 1,300,000 19.256 .21
Unibail (France) (2) 116,300 15.728
Unibail, warrants, expire 2004 (2) 116,300 .490 .18
Hongkong Land Holdings Ltd. (Hong Kong - Incorporated 9,999,700 13.799 .15
in Bermuda)
SM Prime Holdings, Inc. (Philippines) 52,885,000 11.582 .12
Security Capital Global Realty (Luxembourg) (1,2,4) 450,000 9.000 .10
Cheung Kong (Holdings) Ltd. (Hong Kong) 1,100,000 8.937 .10
MULTI-INDUSTRY - 2.74%
Williams PLC (United Kingdom) 8,000,000 46.775 .51
Orkla AS, Class A (Norway) 1,232,000 19.295
Orkla AS, Class B 1,404,000 19.152 .42
Invensys PLC (formerly Siebe PLC) (United Kingdom) 7,980,000 36.319 .40
JG Summit Holdings, Inc. 3.50% convertible $26,000,000 19.240 .21
debentures 2003 (Philippines)
Swire Pacific Ltd., Class A (Hong Kong) 4,000,000 19.086 .21
TI Group PLC (United Kingdom) 2,230,781 16.863 .19
Lend Lease Corp. Ltd. (Australia) 1,329,620 16.830 .18
Ayala Corp. 3.00% convertible debentures 2000 (Philippines) $10,000,000 12.144 .13
Harsco Corp. (USA) 363,600 11.863 .13
AlliedSignal Inc. (USA) 200,000 11.613 .13
Canadian Pacific Ltd. (Canada) 400,000 9.150 .10
Berkshire Hathaway Inc., Class A (USA) (2) 98 7.056 .08
FMC Corp. (USA) (2) 70,000 4.633 .05
ELECTRICAL & ELECTRONIC - 2.59%
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 2,600,000 69.294
Telefonaktiebolaget LM Ericsson, Class B (ADR) 300,000 8.081 .85
Siemens AG (Germany) 500,000 33.550 .37
Premier Farnell PLC (United Kingdom) 7,400,000 31.332 .34
Toshiba Corp. (Japan) 4,000,000 24.617 .27
Elektrim SA 2.00% convertible debentures 2004 (Poland) $9,000,000 5.649
Elektrim SA 1,500,000 17.534 .25
Nortel Networks Corp. (formerly Northern Telecom Ltd.) 200,000 15.000 .16
(Canada)
General Electric Co. (USA) 125,000 12.711 .14
York International Corp. (USA) 250,000 10.547 .12
Matsushita Communication Industrial Co., Ltd. (Japan) 133,000 8.503 .09
INSURANCE - 2.24%
ING Groep NV (Netherlands) 1,725,683 92.005 1.01
Allstate Corp. (USA) 600,000 21.863 .24
PartnerRe Holdings Ltd. (Singapore - Incorporated 550,000 20.453 .22
in Bermuda)
Independent Insurance Group PLC (United Kingdom) 3,460,000 16.118 .18
Mercury General Corp. (USA) 425,000 15.327 .17
Fairfax Financial Holdings Ltd. (Canada) (2) 35,300 9.918
Fairfax Financial Holdings Ltd., subscription 11,000 3.091 .14
receipts (1,2)
Transatlantic Holdings, Inc. (USA) 170,400 12.769 .14
Norwich Union PLC (United Kingdom) 1,805,000 12.757 .14
Corporacion Mapfre, CIR, SA (Spain) 22,017 .455 .00
ENERGY SOURCES - 2.15%
Shell Canada Ltd., Class A (Canada) 2,437,300 46.480 .51
'Shell' Transport and Trading Co., PLC (New York 650,000 28.681
Registered Shares) (United Kingdom)
Royal Dutch Petroleum Co. (Netherlands) 100,000 5.555 .42
Royal Dutch Petroleum Co. (New York Registered Shares) 80,000 4.525
Elf Aquitaine (France) 200,000 28.879 .32
Mobil Corp. (USA) 200,000 20.250 .22
ENI SpA (Italy) 2,900,000 17.996 .20
TOTAL, Class B (France) 100,687 12.203 .13
Broken Hill Proprietary Co. Ltd. (Australia) 1,138,766 11.681 .13
Pioneer Natural Resources Co. (USA) 683,919 7.438 .08
Esso SA Francaise (France) 78,567 6.865 .07
Unocal Corp. (USA) 160,000 6.360 .07
DATA PROCESSING & REPRODUCTION - 2.15%
Computer Associates International, Inc. (USA) 1,250,000 59.141 .65
Microsoft Corp. (USA) (2) 490,000 39.537 .43
Fujitsu Ltd. (Japan) 1,000,000 16.642
Fujitsu Ltd., warrants, expire 2000 (2) 5,670 15.380 .35
Oracle Corp. (USA) (2) 1,290,000 32.009 .35
3Com Corp. (USA) (2) 800,000 21.850 .24
Compaq Computer Corp. (USA) 500,000 11.844 .13
CHEMICALS - 2.12%
Praxair, Inc. (USA) 1,117,200 54.533 .60
BOC Group PLC (United Kingdom) 2,000,000 34.193 .38
Airgas, Inc. (USA) (2) 2,367,100 27.074 .30
DSM NV (Netherlands) 267,989 24.896 .27
Sherwin-Williams Co. (USA) 572,000 17.625 .19
Monsanto Co. (USA) 352,200 14.616 .16
Millennium Chemicals Inc. (USA) 469,500 11.708 .13
L'Air Liquide (France) 57,555 8.646 .09
ELECTRONIC COMPONENTS - 1.98%
Micron Technology, Inc. (USA) (2) 2,000,000 75.875 .83
Advanced Micro Devices, Inc. (USA) (2) 1,500,000 27.750 .30
Hoya Corp. (Japan) 430,000 21.858 .24
Rohm Co., Ltd. (Japan) 100,000 13.042 .14
Corning Inc. (USA) 203,100 11.094 .12
Intel Corp. (USA) 200,000 10.812 .12
Altera Corp. (USA) (2) 300,000 10.444 .12
Murata Manufacturing Co., Ltd. (Japan) 180,000 9.891 .11
METALS: NONFERROUS - 1.91%
Freeport-McMoRan Copper & Gold Inc., Class B (USA) 3,269,800 46.186 .50
Alcoa Inc. (USA) 650,000 35.750 .39
KGHM Polska Miedz SA (GDR) (Poland) 2,874,000 35.207 .39
Billiton PLC (United Kingdom) 8,200,000 25.662 .28
Gencor Ltd. (South Africa) 8,000,000 20.401 .22
Pechiney, Class A (France) 299,300 11.570 .13
AUTOMOBILES - 1.67%
Volvo AB, Class B (Sweden) 2,250,000 56.961 .62
Renault SA (France) 900,000 34.876 .38
Suzuki Motor Corp. (Japan) 2,100,000 29.689 .33
General Motors Corp. (USA) 300,000 20.700 .23
Bayerische Motoren Werke AG (Germany) 15,600 9.964 .11
INDUSTRIAL COMPONENTS - 1.60%
Federal-Mogul Corp. (USA) 1,045,000 48.201 .53
THK Co., Ltd. (Japan) 2,280,000 42.264 .46
Tomkins PLC (United Kingdom) 8,250,000 29.748 .33
Lear Corp. (USA) (2) 230,000 11.313 .12
Morgan Crucible Co. PLC (United Kingdom) 2,161,523 10.138 .11
Delphi Automotive Systems Corp. (USA) (2) 209,679 4.115 .05
FINANCIAL SERVICES - 1.44%
Household International, Inc. (USA) 1,485,000 64.412 .70
Nichiei Co., Ltd. (Japan) 350,100 26.420 .29
Shohkoh Fund & Co., Ltd. (Japan) 38,000 21.163 .23
OM Gruppen AB (Sweden) 790,000 9.954 .11
Bell Atlantic Financial Services, Inc. 4.25% senior
exchangeable notes2005 (USA) (1) $5,000,000 5.156 .06
Associates First Capital Corp., Class A (USA) 70,000 2.870 .03
Freddie Mac (USA) 30,000 1.750 .02
GOLD MINES - 1.32%
Barrick Gold Corp. (Canada) 3,000,000 51.750 .57
Homestake Mining Co. (USA) 2,500,000 19.531 .21
Normandy Mining Ltd. (Australia) 20,630,175 14.935
Normandy Mining Ltd., options, expire 2001 (2) 30,000,000 1.878 .18
Gold Fields Ltd. (South Africa) 3,818,386 11.942 .13
Newcrest Mining Ltd. (Australia) (2) 6,000,000 11.153 .12
Anglogold Ltd. (South Africa) 250,000 9.904 .11
ENERGY EQUIPMENT - 0.88%
Baker Hughes Inc. (USA) 1,422,300 44.269 .49
Schlumberger Ltd. (Netherlands Antilles) 415,000 24.978 .27
Halliburton Co. (USA) 259,800 10.749 .12
FOOD & HOUSEHOLD PRODUCTS - 0.79%
Reckitt & Colman PLC (United Kingdom) 4,409,437 49.410 .54
Nestle SA (Switzerland) 6,452 11.577 .13
Groupe Danone (France) 40,000 10.986 .12
LEISURE & TOURISM - 0.70%
Seagram Co. Ltd. (Canada) 800,000 41.550 .45
NCL Holding ASA (Norway) (2) 4,186,200 12.319 .14
Village Roadshow Ltd., Class A, 5.50% preferred (Australia) 2,806,287 4.210
Village Roadshow Ltd., Class A, 5.50% preferred (1) 2,500,000 3.750 .11
Village Roadshow Ltd. 1,200,000 2.113
APPLIANCES & HOUSEHOLD DURABLES - 0.59%
Sony Corp. (Japan) 350,000 32.757 .36
Koninklijke Philips Electronics NV (Netherlands) 250,000 21.391 .23
RECREATION & OTHER CONSUMER PRODUCTS - 0.51%
Nintendo Co., Ltd. (Japan) 175,000 20.473 .22
EMI Group PLC (United Kingdom) 1,865,067 13.263 .15
Mattel, Inc. (USA) 500,000 13.219 .14
AEROSPACE & MILITARY TECHNOLOGY - 0.47%
Bombardier Inc., Class B (Canada) 2,210,800 34.359 .38
Boeing Co. (USA) 140,000 5.915 .06
Raytheon Co., Class A (USA) 42,180 2.802 .03
METALS: STEEL - 0.33%
Usinor Sacilor (France) 1,400,000 19.021 .21
British Steel PLC (United Kingdom) (2) 4,550,600 9.652 .10
N.T.S. Steel Group PCL 4.00% convertible debentures $6,670,000 .667 .01
2008 (Thailand) (2)
Ispat Industries Ltd. 3.00% convertible debentures $2,800,000 .616 .01
2001 (India) (1)
MACHINERY & ENGINEERING - 0.31%
Fuji Machine Mfg. Co., Ltd. (Japan) 520,000 15.465 .17
AIDA Engineering, Ltd. (Japan) 4,065,000 12.927 .14
ELECTRONIC INSTRUMENTS - 0.29%
ADVANTEST CORP. (Japan) 330,000 26.073 .29
BUILDING MATERIALS & COMPONENTS - 0.26%
BPB PLC (United Kingdom) 5,114,600 24.153 .26
TRANSPORTATION: RAIL & ROAD - 0.21%
Westshore Terminals Inc. (Canada) (1) 3,040,900 12.382 .13
CSX Corp. (USA) 150,000 7.041 .08
MISCELLANEOUS MATERIALS & COMMODITIES - 0.19%
Cie. de Saint-Gobain (France) 111,377 17.438 .19
TRANSPORTATION: AIRLINES - 0.15%
Air New Zealand Ltd., Class B (New Zealand) 6,320,000 13.371 .15
WHOLESALE & INTERNATIONAL TRADE - 0.07%
Ingram Micro, 0.00 convertible debentures 2018 (USA) (1) $18,700,000 6.335 .07
TEXTILES & APPAREL - 0.04%
Courtaulds Textiles PLC (United Kingdom) 1,641,500 3.547 .04
MISCELLANEOUS - 1.03%
Other equity securities in initial period of acquisition 93.858 1.03
------------------
TOTAL EQUITY SECURITIES (cost: $6,267.517 million) 8,007.79 87.62
------------------
Principal
Amount
Bonds and Notes (Millions)
- -------------------------------------------- -------- ----------------
INDUSTRIALS - 0.19%
Indah Kiat Finance Mauritius Ltd. 10.00% 2007 $11.650 7.369
Indah Kiat International Finance 8.875% 2000 2.290 1.918 .11
Indah Kiat Global BD 12.50% 2006 1.000 .742
Container Corp. of America, Series A, 11.25% 2004 6.000 6.300
Container Corp. of America 9.75% 2003 1.000 1.035 .08
------------------
TELEPHONE - 0.07%
Netia Holdings BV 10.25% 2007 4.125 3.785
Netia Holdings BV 0%/11.25% 2007 (5) 3.750 2.466 .07
------------------
FINANCIAL - 0.02%
APP Finance (VI) Mauritius Ltd. 11.75% 2005 2.800 2.114 .02
------------------
ARGENTINEAN GOVERNMENT - 0.21%
Argentina (Republic of) 11.75% 2007 ARP8.000 6.645
Argentina (Republic of) 11.00% 2006 $7.000 6.317
Argentina (Republic of) 8.75% 2002 ARP4.000 3.333 .21
Argentina (Republic of) 11.375% 2017 $3.000 2.636
------------------
BRAZILIAN GOVERNMENT - 0.85%
Brazil (Federal Republic of), Bearer 8.00% 2014 123.496 77.494 .85
------------------
SOUTH AFRICAN GOVERNMENT - 0.24%
South Africa (Republic of) 13.00% 2010 ZAR157.500 22.055 .24
------------------
TOTAL BONDS AND NOTES (cost: $147.658 million) 144.209 1.58
Short-Term Securities
- -------------------------------------------- -------- ----------------
CORPORATE SHORT-TERM NOTES - 9.72%
International Lease Finance Corp. 4.79%-4.82% $63.200 62.606 .69
due 7/8-8/24/1999
Svenska Handelsbanken 4.81% due 7/14-8/10/1999 55.500 55.008 .60
Halifax PLC 4.80%-4.85% due 7/12-8/23/1999 55.500 54.969 .60
BMW U.S. Capital Corp. 4.80%-4.84% due 6/7-7/12/1999 54.580 54.368 .59
Rio Tinto America, Inc. 4.83%-4.85% due 6/7-7/23/1999 (1) 52.000 51.831 .57
DaimlerChrysler NA Holdings 4.79%-4.84% due 7/20-8/10/1999 50.000 49.613 .54
Shell Finance (UK) PLC 4.78%-4.79% due 7/21-8/9/1999 43.000 42.636 .47
Motiva Enterprises LLC 4.79%-4.83% due 6/2-7/19/1999 40.300 40.156 .44
Toyota Motor Credit Corp. 4.75%-4.80% due 6/14-7/9/1999 40.300 40.146 .44
Xerox Capital (Europe) PLC 4.83% due 6/3/1999 40.000 39.984 .44
Abbey National North America 4.80%-4.81% due 7/15-8/9/1999 40.000 39.701 .43
Coca-Cola Co. 4.76%-4.77% due 6/28-8/13/1999 39.600 39.286 .43
American Honda Finance Corp. 4.81%-4.82% due 6/11-7/27/1999 39.400 39.231 .43
Associates First Capital Corp. 4.80%-4.81% due 6/29-7/16/1999 37.800 37.585 .41
Reed Elsevier Inc. 4.82%-4.84% due 6/17-7/28/1999 37.800 37.566 .41
Repsol International Finance BV 4.80%-4.82% due 7/15-8/12/1999 37.800 37.453 .41
National Australia Funding (DE) Inc. 4.77%-4.78% 29.700 29.584 .32
due 6/21-7/26/1999
BP America Inc. 4.80% due 7/6/1999 28.200 28.064 .31
Siemens Capital Corp. 4.77% due 8/2/1999 25.800 25.570 .28
Lloyds Bank PLC 4.80% due 7/6/1999 25.000 24.880 .27
Electricite de France 4.78% due 7/15/1999 25.000 24.851 .27
General Electric Capital Corp. 4.82% due 6/8/1999 20.300 20.278 .22
Toronto-Dominion Holdings USA Inc. 4.78% due 7/16/1999 13.300 13.217 .15
FEDERAL AGENCY DISCOUNT NOTES - 0.50%
Freddie Mac 4.77% due 6/22/1999 45.700 45.568 .50
------------------
CERTIFICATES OF DEPOSIT - 0.19%
Canadian Imperial Bank of Commerce 4.86% due 6/1/1999 17.000 17.000 .19
------------------
NON-U.S. CURRENCY - 0.06%
New Taiwanese Dollar NT$192.3 5.902 .06
------------------
TOTAL SHORT-TERM SECURITIES (cost: $958.007 million) 957.053 10.47
------------------
TOTAL INVESTMENT SECURITIES (cost: $7,373.182 million) 9,109.06 99.67
Excess of cash and receivables over payables 30.688 .33
NET ASSETS $9,139.7 100.00%
(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 security.
(3) Payment in kind; the issuer has the option of paying
additional securities in lieu of cash.
(4) Valued under procedures approved by the Board of
Directors.
(5) Step-bond; coupon rate will increase at a later date.
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
See Notes to Financial Statements
</TABLE>
Equity Securities Added
to the Portfolio Since
November 30, 1998
Alcoa
AlliedSignal
Allstate
Athena Neurosciences
Baker Hughes
Bank Leumi le-Israel
Berkshire Hathaway
Billiton
BPB
British Steel
Cintas
Compaq Computer
Corning
Crown Castle International
CSX
Delphi Automotive Systems
Elan
Elan Finance
Embratel Participacoes
Forest Laboratories
Freeport-McMoRan Copper & Gold
Hays
Hongkong Land Holdings
Independent Insurance Group
IndyMac Mortgage Holdings
International Paper
Kimberly-Clark de Mexico
Korea Telecom
Limited
Loblaw
Lowe's
Luxottica Group
Mattel
Mercury General
Monsanto
MYCAL
NCL Holding
Nextel Communications
Niagara Mohawk Holdings
Seat Pagine Gialle
Shohkoh Fund
Siam Commercial Bank
Swedish Match
Swisscom
TI Group
Tandy
Teleglobe
THK
Toronto-Dominion Bank
Toshiba
Unibail
United Pan-Europe Communications
Volvo
Equity Securities Eliminated
from the Portfolio Since
November 30, 1998
Allegheny Teledyne
Ameren
Ascend Communications
AutoZone
Barry Callebaut
Bayer
Cadbury Schweppes
Caterpillar
Centrais Geradoras do Sul do Brazil
Crown Cork & Seal
Cultor
DaimlerChrysler
Delta Electronics
English China Clays
Fannie Mae
Ford Motor
General RE
GIO Australia Holdings
Guardian Royal Exchange
Hong Kong Telecommuncations
Hutchison Whampoa
Indian Aluminium
Jardine Strategic Holdings
Kerry Properties
King World Productions
MAYR-MELNHOF Karton
Medallion Financial
Mitsui O.S.K. Lines
Modern Times Group
Nine West Group
Nippon Telegraph and Telephone
Nokia
NTL
Paribas
Publishing & Broadcasting
Rentokil Initial
Rockwell International
Security Capital Group
Security Dynamics Technologies
Svedala Industri
Teck
Texas Instruments
Union Pacific
Vanstar Financing Trust
Woolworths
YPF
<TABLE>
Capital World Growth and Income Fund
<S> <C> <C>
Financial Statements Unaudited
- ---------------------------------------- -----------------------------
Statement of Assets and Liabilities (dollars in
at May 31, 1999 millions)
- ----------------------------------------- -----------------------------
Assets:
Investment securities at market
(cost: $6,415.175) $8,152.007
Short-term securities
(cost: $958.007) 957.053
Cash 3.085
Receivables for--
Sales of investments $29.050
Sales of fund's shares 10.235
Dividends and accrued interest 33.020 72.305
-----------------------------
9,184.450
Liabilities:
Payables for--
Purchases of investments 29.568
Repurchases of fund's shares 6.093
Management services 3.351
Accrued expenses 5.690 44.702
-----------------------------
Net Assets at May 31, 1999--
Equivalent to $26.76 per share on
341,568,412 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $9,139.748
===============
Unaudited
---------------
Statement of Operations (dollars in
for the six months ended May 31, 1999 millions)
- --------------------------------------------- -----------------------------
Investment Income:
Income:
Dividends $84.148
Interest 43.850 $127.998
------------
Expenses:
Management services fee 18.849
Distribution expenses 10.670
Transfer agent fee 3.480
Reports to shareholders .268
Registration statement and prospectus .375
Postage, stationery and supplies .618
Directors' fees .067
Auditing and legal fees .055
Custodian fee 1.216
Taxes other than federal income tax .194
Other expenses .069 35.861
----------------------------
Net investment income 92.137
--------------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 389.633
Net increase in unrealized appreciation 252.890
on investments
Net realized gain and increase in unrealized ---------------
appreciation on investments 642.523
---------------
Net Increase in Net Assets Resulting
from Operations $734.660
===============
- ---------------------------------------------- -----------------------------
Six months end Year ended
Statement of Changes in Net Assets May 31, November 30,
(dollars in millions) 1999* 1998
- ---------------------------------------------- -----------------------------
Operations:
Net investment income $ 92.137 $ 180.925
Net realized gain on investments 389.633 753.023
Net increase in unrealized appreciation
on investments 252.890 173.442
-----------------------------
Net increase in net assets
resulting from operations 734.660 1,107.390
-----------------------------
Dividends and Distributions Paid to Shareholders:
Dividends from net investment income (69.084) (176.534)
Distributions from net realized gain on investments (719.209) (524.360)
-----------------------------
Total dividends and distributions (788.293) (700.894)
Capital Share Transactions:
Proceeds from shares sold: 20,443,304
and 47,546,047 shares, respectively 535.312 1,246.606
Proceeds from shares issued in reinvestment
of net investment income dividends and distributions
of net realized gain on investments:
30,728,473 and 27,000,566 shares, respectively 753.406 665.329
Cost of shares repurchased: 23,270,935
and 39,209,730 shares, respectively (609.883) (1,010.432)
-----------------------------
Net increase in net assets
resulting from capital share
transactions 678.835 901.503
-----------------------------
Total Increase in Net Assets 625.202 1,307.999
Net Assets:
Beginning of period 8,514.546 7,206.547
-----------------------------
End of period (including undistributed
net investment income: $37.354
and $14.301, respectively) $9,139.748 $8,514.546
=============================
*Unaudited
See Notes to Financial Statements
</TABLE>
Capital World Growth and Income Fund
Notes to Financial Statements Unaudited
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 financial statements have been prepared
in conformity with generally accepted accounting principles which require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. 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. The ability of the issuers of the debt securities held by the fund to
meet their obligations may be affected by economic developments in a specific
industry, state or region. Short-term securities maturing within 60 days are
valued at amortized cost, which approximates market value. 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 and 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 and other
assets and liabilities are included with the net realized and unrealized gain
or loss on investment securities.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for as of the trade date. Realized gains and losses from
securities transactions are determined based on specific identified cost. In
the event securities are purchased on a delayed delivery or "when-issued"
basis, the fund will instruct the custodian to segregate liquid assets in an
amount sufficient to meet its payment obligations in these transactions.
Dividend income is recognized on the ex-dividend date, and interest income is
recognized on an accrual basis. Market discounts and original issue discounts
on securities purchased are amortized daily over the expected life of the
security. The fund does not amortize premiums on securities purchased.
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.
Dividend and interest income is recorded net of non-U.S. taxes paid. For the
six months ended May 31, 1999, such non-U.S. taxes were $X,XXX,000. Net
realized currency losses on dividends, interest, sales of non-U.S. bonds and
notes, and other receivables and payables, on a book basis, were $4,679,000 for
the six months ended May 31, 1999.
3. FEDERAL INCOME TAXATION
The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income and net capital gains for the fiscal year. As a regulated
investment company, the fund is not subject to income taxes if such
distributions are made. Required distributions are determined on a tax basis
and may differ from net investment income and net realized gains for financial
reporting purposes. In addition, the fiscal year in which amounts are
distributed may differ from the year in which the net investment income and net
realized gains are recorded by the fund.
As of May 31, 1999, net unrealized appreciation on investments for federal
income tax purposes aggregated $1,733,682,000, of which $2,129,009,000 related
to appreciated securities and $395,327,000 related to depreciated securities.
During the six months ended May 31, 1999, the fund realized, on a tax basis, a
net capital gain of $394,055,000 on securities transactions.
Net losses related to non-U.S. currency transactions of $4,422,000 were
treated as an adjustment to ordinary income for federal income tax purposes.
The cost of portfolio securities for federal income tax purposes was
$7,375,378,000 at May 31, 1999.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $18,849,000 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; 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; 0.395% of such assets in excess of $6.5 billion but not
exceeding $10.5 billion and 0.39% of such assets in excess of $10.5 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 six months
ended May 31, 1999, distribution expenses under the Plan were $10,670,000. As
of May 31, 1999, accrued and unpaid distribution expenses were $5,034,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $2,076,000 (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 $3,480,000.
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 May 31, 1999, aggregate deferred compensation and earnings thereon since the
deferred compensation plan's adoption (1993), net of any payments to Directors,
were $295,000.
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, excluding
short-term securities, of $2,004,256,000 and $1,634,986,000, respectively,
during the six months ended May 31, 1999.
As of May 31, 1999, accumulated undistributed net realized gain on investments
was $392,174,000 and additional paid-in capital was $6,976,101,000.
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 $1,216,000 includes $28,000 that was paid by these credits
rather than in cash.
<TABLE>
<S> <C> <C> <C> <c<C> <c<C> <C>
Six months
Per-Share Data and Ratios ended
May 31, Year ended Novembe30
1999 (1) 1998 1997 1996 1995 1994
Net Asset Value, Beginning of Period $27.15 $25.89 $23.77 $20.22 $17.81 $17.00
------- -------------- ------- --------------
Income From Investment Operations:
Net investment income .27 .59 .640 .70 .61 .52
Net gains or losses on securities (both
realized and unrealized) 1.84 3.12 3.045 3.91 2.72 .75
------- -------------- ------- --------------
Total from investment operations 2.11 3.71 3.685 4.61 3.33 1.27
------- -------------- ------- --------------
Less Distributions:
Dividends (from net investment income) (.21) (.58) (.650)(2 (.72)(2 (.63) (.46)
Distributions (from capital gains) (2.29) (1.87) (.915) (.34) (.29) -
------- -------------- ------- --------------
Total distributions (2.50) (2.45)(1.565) (1.06) (.92) (.46)
------- -------------- ------- --------------
Net Asset Value, End of Period $26.76 $27.15 $25.89 $23.77 $20.22 $17.81
======================= ======== ===============
Total Return (3) 8.68%(4) 15.51% 16.36% 23.67% 19.41% 7.51%
Ratios/Supplemental Data:
Net assets, end of period (in millions) $9,140 $8,515 $7,207 $5,139 $3,611 $2,784
Ratio of expenses to average net assets .40% (4) .78% .82% .85% .88% .87%
Ratio of net income to average net assets1.03% (4) 2.25% 2.53% 3.28% 3.24% 3.11%
Portfolio turnover rate 21.28% (4) 39.44% 32.41% 30.18% 25.50% 18.66%
(1) Unaudited
(2) 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.
(3) Excludes maximum sales charge.
of 5.75%
(4) Based on operations for the period
shown and, accordingly, not
representative of a full year.
</TABLE>
OFFICES OF THE FUND AND OF THE
INVESTMENT ADVISER, CAPITAL RESEARCH
AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5823
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 2205
Brea, California 92822-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
PREPARING FOR THE YEAR 2000
The fund's key service providers - Capital Research and Management Company, the
investment adviser, and American Funds Service Company, the transfer agent -
have updated all significant computer systems to process date-related
information properly following the turn of the century. Testing of these and
other systems with business partners, vendors and other service providers will
continue through much of 1999. We will continue to keep you up to date in our
regular publications. If you'd like more detailed information, call Shareholder
Services at 800/421-0180, ext. 21, or visit our Web site at
www.americanfunds.com.
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR FINANCIAL ADVISER. YOU MAY ALSO CALL AMERICAN FUNDS SERVICE
COMPANY, TOLL-FREE, AT 800/421-0180 OR VISIT WWW.AMERICANFUNDS.COM ON THE WORLD
WIDE WEB.
This report is for the information of shareholders of Capital World Growth and
Income Fund, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after September 30, 1999, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Printed on recylced paper
Litho in USA AGD/AL/4217
Lit. No. WGI-013-0799
