[The American Funds Group(r)]
CAPITAL WORLD GROWTH AND INCOME FUND
2000 Semi-Annual Report
for the six months ended May 31
[photo: country flags]
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 American Funds, the
nation's third-largest mutual fund family. For nearly seven 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 CHART
(through 5/31/00, with distributions reinvested)
<TABLE>
<CAPTION>
Average Annual Compound Return
6 Months 12 Months 5 Years Lifetime
(since 3/26/93)
<S> <C> <C> <C> <C>
CAPITAL WORLD
GROWTH AND
INCOME FUND +9.96% +20.48% +18.69% +17.56%
Morgan Stanley
Capital International
World Index +2.05 +13.95 +16.75 +15.82
Lipper Global Stock
Funds Average +5.61 +23.29 +16.93 +14.89
</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 in this report were calculated for Class A shares at net asset
value (without a sales charge) unless otherwise indicated. Here are the average
annual compound returns on a $1,000 investment for periods ended June 30, 2000
(the most recent calendar quarter), with all distributions reinvested:
<TABLE>
<CAPTION>
Lifetime 5 Years 1 Year
(since 3/26/93)
<S> <C> <C> <C>
CLASS A SHARES
reflecting 5.75% maximum sales 0.1685 0.1791 0.125
charge
</TABLE>
The fund's 30-day yield for Class A shares as of June 30, 2000, calculated in
accordance with the Securities and Exchange Commission formula, was 1.87%.
Results for Class B shares are not shown because of the brief time between
their introduction on March 15 and the end of the fund's fiscal period.
Please see back cover for important information about Class A and B shares.
FIGURES SHOWN ARE 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,
WHICH ARE DETAILED IN THE FUND'S PROSPECTUS.
FELLOW SHAREHOLDERS:
The first half of our 2000 fiscal year witnessed dramatic shifts in major
equity markets and currency values. In this volatile environment, the value of
your investment in Capital World Growth and Income Fund appreciated 9.96% over
the six months ended May 31, 2000, assuming you reinvested dividends totaling
22 cents a share and capital gain distributions totaling $1.98 a share paid
during the period.
This return compares favorably to those of the Morgan Stanley Capital
International (MSCI) World Index and the Lipper Global Stock Funds Average,
which serve as benchmarks for your fund. Over the same period, the MSCI World
Index returned 2.05%, while the average global stock fund, as measured by
Lipper Inc., returned 5.61%, again assuming that dividends and capital gains
were reinvested.
Your fund benefited from its emphasis on income-generating stocks and its
company-by-company approach to stock selection, which frequently results in
notably different geographic concentrations than those of the MSCI World Index.
That index measures 22 major markets worldwide and currently ascribes
significantly greater weighting to the United States, for instance, than does
your fund. During the previous fiscal year, when stock markets rallied in the
U.S., the higher weighting boosted the returns of the MSCI World Index. That
benefit evaporated earlier this year when markets here began to sell off
sharply.
THE SIX MONTHS IN REVIEW
Equity markets in the U.S. soared to record highs in the first months of 2000,
but those levels proved unsustainable against a backdrop of rising interest
rates and renewed fears of inflation. As the Federal Reserve ratcheted
short-term rates higher and the economy extended its record expansion, markets
recoiled. The Dow Jones Industrial Average began to decline in mid-January; the
Nasdaq followed suit two months later. For the six-month period, U.S. equities
returned 2.4%.*
*All country returns are based on MSCI indexes, expressed in U.S. dollar terms,
and assume reinvestment of dividends, unless otherwise indicated.
Internet and technology stocks were especially hard hit during this time. Many
investors sought protection in more traditional business sectors, such as
utilities and energy and consumer staples concerns. Companies in these sectors
have historically paid higher dividends, which makes them candidates for your
fund and can make them even more attractive investments during periods of
market volatility.
[Begin Sidebar]
WHERE THE FUND'S
ASSETS WERE INVESTED
PERCENT BY COUNTRY AS OF 5/31/00
<TABLE>
<CAPTION>
<S> <C>
THE AMERICAS 37.3%
United States 29.8
Canada 4.5
Mexico 1.2
Argentina .9
Brazil .8
Chile .1
EUROPE 33.8%
United Kingdom 13.1
Netherlands 4.1
Italy 3.8
Sweden 2.7
France 2.4
Germany 1.9
Ireland 1.5
Denmark .8
Norway .8
Poland .8
Portugal .4
Finland .3
Greece .3
Spain .3
Switzerland .3
Luxembourg .1
Croatia .1
Turkey .1
ASIA/PACIFIC 18.6%
Japan 9.3
Australia 3.3
Hong Kong 1.7
Taiwan .9
New Zealand .8
Philippines .7
South Korea .7
Israel .6
Singapore .2
Thailand .2
China .1
India .1
OTHER 1.1%
Supranational .6
South Africa .5
BONDS, CASH & EQUIVALENTS 9.2%
100.0%
</TABLE>
[End Sidebar]
U.S. investments constitute the largest country concentration in your fund's
portfolio, totaling some 30% of net assets, but this still falls far short of
its 50% weighting in the MSCI World Index. Among our largest corporate holdings
are two U.S. utilities, Williams Companies and Northeast Utilities. During this
turbulent period, the market price of Northeast Utilities climbed 4.7%, while
Williams Companies jumped 23.1%.
Overseas, the U.S. dollar strengthened steadily against key currencies. As a
result, the British pound fell to a six-year low against the dollar, and the
fledgling Euro sank to an all-time low of 89 cents. Although both currencies
began to recover by early June, their weaker valuations served to constrain
returns on our European holdings when translated from local currency into U.S.
dollars. European holdings total 33.8% of the fund's net assets.
Stock markets in Europe were only mildly impacted by the market swings on this
side of the Atlantic. Several logged strong performances; Sweden, France and
Italy ended the period with double-digit gains of 32.1%, 14.0%, and 11.7%,
respectively. In the United Kingdom, however, market behavior more closely
resembled that of the U.S. For the reporting period, U.K. stocks declined 1.5%
in local currency terms. In dollar terms, that decline measured 7.6% owing to
the weak pound. Approximately 13% of the fund's portfolio is invested in U.K.
holdings.
In the Pacific region, Japanese stocks registered a correction akin to that in
the U.S. Although the market has recovered slightly since the end of May,
Japanese stocks fell 5.9% over the six-month period. Australia posted a
negative return as well, declining 7.1%. In both instances, the strength of the
dollar against local currencies exacerbated the negative impact. Closer to
home, Canadian equities posted a 25.5% return for the period, as demand growth
in the U.S. spilled across the border, stimulating exports and employment.
Roughly 5% of the fund's holdings are based in Canada.
Amid these diverse and erratic markets, fresh opportunities emerged. Your fund
increased its holdings in Elan Corp., an Irish pharmaceutical concern, and
established a significant new position in Lloyds TSB Group, a U.K. bank. These
positions currently rank among the top holdings in the fund. Their appreciation
through the end of the period enhanced the fund's results.
Early in the year, Capital World Growth and Income Fund selectively began to
reduce its exposure to the telecommunications sector. Although growth prospects
remain promising over the longer term, valuations became quite high prior to
market corrections. The telecommunications sector (representing both
diversified and wireless companies) remains the largest industry concentration
in the portfolio, though its weighting has diminished from 17.2% in November
1999 to 13.4% as of May 2000.
A NOTE ON DIVIDENDS
Capital World Growth and Income Fund paid dividends of 11.5 cents a share in
December and 10.5 cents a share in March. On June 2, after the end of the
fiscal reporting period, the fund paid a dividend of 18.5 cents a share on
Class A shares; Class B shares received an initial dividend of 14.99 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 are generally smaller than those
paid in June.
LOOKING AHEAD
In May, the OECD (Organization for Economic Co-operation and Development)
released its semi-annual forecast for growth in major world economies.
Collectively, the OECD anticipates that world output may increase by about 4%
this year and next, "the fastest pace in more than a decade." Furthermore, the
OECD expects inflation to remain low "nearly everywhere" through a tightening
of monetary policy. Perhaps now more than ever, a global investment strategy
seems warranted.
Every country, however, faces unique challenges in its quest to achieve
sustainable growth. Further structural reforms are needed throughout Europe to
ensure employment mobility and advance business competition. In Japan,
additional measures may be required to further stimulate domestic demand and
foster corporate restructuring. In the United States, where the specter of
inflation still lingers, the ability of the Federal Reserve to moderate demand
through higher rates will determine the pace and duration of the current record
expansion.
Despite this array of challenges, we remain confident that the patient investor
will be rewarded over the longer term as the pace of globalization accelerates
through advances in trade and technology. As always, we will continue to
evaluate the risks and rewards of each investment we make on your behalf, even
as we monitor broader political and economic developments. Our vision remains
global; our focus, to uncover value; our aim, to enhance returns over the long
term through careful research.
We look forward to reporting to you again in six months.
Cordially,
/s/ Paul G. Haaga, Jr. /s/ Gina H. Despres
Paul G. Haaga, Jr. Gina H. Despres
Chairman of the Board President
July 20, 2000
Please note that Thierry Vandeventer, who has been chairman of the fund from
its inception, has retired from the Board. We want to thank him for his many
contributions to the fund's success. Paul Haaga, formerly President of the
fund, has been elected Chairman of the Board, succeeding Thierry. Additionally,
Gina Despres has been elected a Director and President; formerly, she was
Executive Vice President.
<TABLE>
<CAPTION>
LARGEST INDIVIDUAL PERCENT OF
EQUITY HOLDINGS COUNTRY NET ASSETS
<S> <C> <C>
Telecom Italia Italy 2.23%
Philip Morris Companies USA 2.08
Vodafone AirTouch United Kingdom 1.64
Ericsson Sweden 1.47
AstraZeneca United Kingdom 1.34
Elan Ireland 1.32
Northeast Utilities USA 1.30
Williams Companies USA 1.26
ING Groep Netherlands 1.11
Lloyds TSB Group United Kingdom 1.05
</TABLE>
<TABLE>
CAPITAL WORLD GROWTH AND INCOME FUND
Investment Portfolio May 31, 2000
INVESTMENT MIX
[begin pie chart]
<S> <C> <C>
Largest Industry Holdings
Equity Securities 90.80%
Diversified Telecommunications Services 10.1
Banking 9.3
Health & Personal Care 5.9
Utilities: Electric & Gas 5.0
Beverages & Tobacco 4.6
Other Industries -35.0
Bonds & Notes 1.5%
Cash & Equivalents 7.7%
[end pie chart]
Largest Individual Percent of
Equity Holdings Country Net Assets
Telecom Italia Italy 2.23%
Philip Morris USA 2.08
Vodafone AirTouch United Kingdom 1.64
Telefonaktiebolaget LM Ericsson Sweden 1.47
AstraZeneca United Kingdom 1.34
Elan Ireland 1.32
Northeast Utilities USA 1.30
Williams Companies USA 1.26
ING Groep Netherlands 1.11
Lloyds TSB Group United Kingdom 1.05
</TABLE>
<TABLE>
Capital World Growth and Income Fund
Investment Portfolio, May 31, 2000
<S> <C> <C> <C>
Shares or Market Percent
Equity Securitites Principal Value of Net
(common and preferred stocks and convertible debentures) Amount (Millions) Assets
DIVERSIFIED TELECOMMUNICATION SERVICES - 10.07%
Telecom Italia SpA, nonconvertible savings shares (Italy) 30,651,752 $191.866
Telecom Italia SpA 4,039,975 55.911 2.23%
Telefonos de Mexico, SA de CV, Class L (ADR) (Mexico) 2,064,600 100.520
Telefonos de Mexico, SA de CV 4.25% convertible $9,220,000 10.675 1.00
debentures 2004
Tele Danmark AS (Denmark) 759,800 53.804
Tele Danmark AS, Class B (ADR) 1,030,200 36.250 .81
Koninklijke PTT Nederland NV (Netherlands) 987,746 89.408 .80
Telecom Corp. of New Zealand Ltd. (New Zealand) (1) 6,963,810 24.495
Telecom Corp. of New Zealand Ltd. 6,465,800 22.743
Telecom Corp. of New Zealand Ltd. (ADR) 720,700 20.090 .60
Deutsche Telekom AG (Germany) 837,600 52.477 .47
British Telecommunications PLC (United Kingdom) 3,080,600 44.717 .40
Portugal Telecom, SA (Portugal) 3,975,000 43.489 .39
Telecom Argentina STET-France Telecom SA, 1,641,700 40.427 .36
Class B (ADR) (Argentina)
Telefonica, SA (Spain) (2) 1,879,448 38.664 .35
Telefonica de Argentina SA, Class B (ADR) (Argentina) 1,000,000 32.875 .30
U S WEST, Inc. (USA) 436,500 31.428 .28
Embratel Participacoes SA, (ADR) (Brazil) 1,500,000 31.406 .28
Hellenic Telecommunications Organization SA (Greece) (2) 1,234,000 30.513 .27
France Telecom, SA (France) 200,000 29.269 .26
Nortel Inversora SA, preferred, Class B (ADR) (Argentina) 1,465,000 26.370 .24
SBC Communications Inc. (USA) 500,000 21.844 .20
AT&T Corp. (USA) 600,000 20.813 .19
eircom PLC (Ireland) 6,000,000 17.393 .16
Philippine Long Distance Telephone Co. (ADR) (Philippines) 750,000 13.219 .12
TELUS Corp. (formerly BCT.TELUS Communications Inc.)(Canada) 456,234 10.676 .10
Teleglobe Inc. (Canada) 524,400 10.668 .10
Korea Telecom Corp. (South Korea) 72,730 5.411
Korea Telecom Corp. (ADR) 87,800 3.249 .08
Nippon Telegraph and Telephone Corp. (Japan) 534 6.341 .06
AAPT Ltd. (Australia) (2) 728,223 2.458 .02
BANKING - 9.26%
Lloyds TSB Group PLC (United Kingdom) 10,790,000 117.023 1.05
Royal Bank of Canada (Canada) 1,259,200 65.483 .59
Washington Mutual, Inc. (USA) 2,130,000 61.237 .55
ABN AMRO Holding NV (Netherlands) 2,486,414 56.964 .51
Toronto-Dominion Bank (Canada) 2,215,500 55.498 .50
Westpac Banking Corp. (Australia) 7,217,400 49.265 .44
Bank Hapoalim Ltd. (Israel) 17,000,000 48.997 .44
First Union Corp. (USA) 1,329,700 46.789 .42
Australia and New Zealand Banking Group Ltd. (Australia) 6,320,823 43.835 .39
Wells Fargo & Co. (USA) 900,000 40.725 .37
Bank of America Corp. (USA) 700,000 38.894 .35
Hang Seng Bank Ltd. (Hong Kong) 4,450,000 37.692 .34
Sakura Bank, Ltd. (Japan) 4,144,000 30.638 .27
Bank of Nova Scotia (Canada) 1,128,400 28.078 .25
Fuji Bank, Ltd. (Japan) 3,269,000 25.260 .23
Commonwealth Bank of Australia (Australia) 1,551,262 24.705 .22
Asahi Bank, Ltd. (Japan) 5,350,000 23.772 .21
Bank of the Philippine Islands (Philippines) 12,154,520 23.281 .21
Bank Leumi le-Israel B.M. (Israel) 10,250,000 22.403 .20
Bank of Scotland (United Kingdom) 2,214,424 20.898 .19
Siam Commercial Bank PCL 5.25% convertible 28,600,000 16.607
preferred (Thailand) (2)
Siam Commercial Bank PCL, warrants, expire 2002 (2) 28,600,000 4.234 .19
National Australia Bank Ltd. (Australia) 1,312,584 19.568 .18
BANK ONE CORP. (USA) 469,800 15.533 .14
Wilmington Trust Corp. (USA) 300,000 15.225 .14
Chase Manhattan Corp. (USA) 200,000 14.938 .13
Canadian Imperial Bank of Commerce (Canada) 450,000 12.129 .11
Unibanco-Uniao de Bancos Brasileiros SA, 480,000 11.610 .10
units (GDR) (Brazil)
Toyo Trust and Banking Co., Ltd. (Japan) 3,000,000 10.130 .09
Skandinaviska Enskilda Banken AB, Class A (Sweden) 800,000 8.750 .08
Industrial Bank of Japan, Ltd. (Japan) 1,110,000 8.649 .08
Dai-Ichi Kangyo Bank, Ltd. (Japan) 1,100,000 8.265 .07
Housing & Commercial Bank (South Korea) 450,000 8.171 .07
Sanwa International Finance (Bermuda) Trust 1.25% 849,000,000 7.738 .07
preferred units 2005 (Japan) (1)
Dah Sing Financial Holdings Ltd. (Hong Kong) 1,500,000 5.467 .05
Banco de Galicia y Buenos Aires SA, Class B (ADR) (Argentina) 222,081 3.331 .03
Banque Nationale de Paris, guaranteed value 65,000 .304 .00
certificates, expire 2002 (France) (2)
HEALTH & PERSONAL CARE - 6.38%
AstraZeneca PLC (United Kingdom) 3,546,633 149.093 1.34
Elan Corp., PLC (ADR) (Ireland) (2) 2,860,000 113.864
Elan Finance Corp. 0% convertible debentures 2018 (1) $29,000,000 18.625
Athena Neurosciences, Inc. 4.75% convertible $12,000,000 14.850 1.32
debentures 2004
Pfizer Inc (USA) 1,964,000 87.521 .79
Forest Laboratories, Inc. (USA) (2) 750,000 66.375 .60
Pharmacia Corp. (formerly Monsanto Co.) 1,004,100 52.150 .47
Glaxo Wellcome PLC (United Kingdom) 1,500,000 42.468 .38
Kimberly-Clark Corp. (USA) 600,000 36.300 .32
Bergen Brunswig Corp. (USA) 6,700,000 34.756 .31
Luxottica Group SpA (ADR) (Italy) 1,040,700 24.066 .22
Shionogi & Co., Ltd. (Japan) 1,341,000 21.272 .19
PLIVA d.d. (GDR) (Croatia) 1,500,000 16.650 .15
Omnicare, Inc. (USA) 1,000,000 16.500 .15
Eli Lilly and Co. (USA) 200,000 15.225 .14
UTILITIES: ELECTRIC & GAS - 5.03%
Northeast Utilities (USA) 6,525,000 144.366 1.30
Williams Companies, Inc. (USA) 3,370,000 140.065 1.26
El Paso Energy Corp. (USA) 1,014,100 52.226 .47
Columbia Energy Group (USA) 685,000 44.311 .40
PowerGen PLC (United Kingdom) 4,304,800 28.374 .25
Niagara Mowhawk Holdings, Inc. (USA) (2) 1,850,000 27.172 .24
National Power PLC (United Kingdom) 3,830,000 21.085 .19
Kinder Morgan, Inc. (USA) 547,500 17.862 .16
Duke Energy Corp. (USA) 300,000 17.475 .16
Scottish and Southern Energy PLC (United Kingdom) 2,079,138 16.242 .14
Southern Co. (USA) 600,000 15.562 .14
Scottish Power PLC (United Kingdom) 1,110,000 8.813 .08
Empresa Nacional de Electricidad SA (ADR) (Chile) 598,487 7.070 .06
National Fuel Gas Co. (USA) 127,000 6.580 .06
NICOR Inc. (USA) 175,000 6.420 .06
Australian Gas Light Co. (Australia) 818,918 4.271 .04
United Energy Ltd. (Australia) 1,386,500 2.059 .02
BEVERAGES & TOBACCO - 4.58%
Philip Morris Companies Inc. (USA) 8,850,000 231.206 2.08
Imperial Tobacco Ltd. (United Kingdom) 7,690,295 67.680 .61
Foster's Brewing Group Ltd. (Australia) 26,822,683 65.268 .59
R.J. Reynolds Tobacco Holdings, Inc. (USA) 1,975,000 54.806 .49
Gallaher Group PLC (United Kingdom) 10,000,000 52.131 .47
Swedish Match AB (Sweden) 4,000,000 12.455 .11
Lion Nathan Ltd. (New Zealand) 6,031,631 12.045 .11
Coca-Cola West Japan Co. Ltd. (Japan) 200,000 6.123 .05
Coca-Cola Beverages PLC (United Kingdom) (2) 2,006,362 3.396 .03
UST Inc. (USA) 200,000 3.325 .03
Coca-Cola Amatil Ltd. (Australia) 417,700 .811 .01
ELECTRICAL & ELECTRONICS - 4.02%
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 6,800,000 138.504
Telefonaktiebolaget LM Ericsson, Class B (ADR) 1,200,000 24.600 1.47
Toshiba Corp. (Japan) 7,600,000 73.321 .66
Siemens AG (Germany) 290,000 43.063 .39
Elektrim SA (Poland) (2) 1,957,676 25.686
Elektrim SA 3.75% convertible debentures 2004 E17,000,000 15.579 .37
Hitachi, Ltd. (Japan) 2,200,000 27.224 .24
Hubbell Inc., Class B (USA) 1,000,000 26.375 .24
NEC Corp. (Japan) 972,000 24.616 .22
Premier Farnell PLC (United Kingdom) 2,700,000 18.475 .17
General Electric Co. (USA) 300,000 15.788 .14
ERG Ltd. 7.50% convertible notes 2005 (Australia) (2) 1,240,000 9.102 .08
Matsushita Communication Industrial Co., Ltd. (Japan) 50,000 5.380 .04
ELECTRONIC COMPONENTS - 3.91%
Micron Technology, Inc. (USA) (2) 1,250,000 87.422 .79
Advanced Micro Devices, Inc. (USA) (2) 850,000 69.222 .62
Hoya Corp. (Japan) 430,000 39.849 .36
Infineon Technologies AG (Germany) (2) 459,200 30.101 .27
Macronix International Co., Ltd. 1.00% convertible $20,000,000 27.000 .24
debentures 2005 (Taiwan)
Murata Manufacturing Co., Ltd. (Japan) 144,000 24.846 .22
Rohm Co., Ltd. (Japan) 60,000 18.701 .17
Corning Inc. (USA) 90,000 17.409 .16
NatSteel Electronics Ltd 1.50% convertible $18,000,000 17.190 .15
debentures 2004 (Singapore) (1)
Samsung Electronics Co., Ltd. (South Korea) 61,000 16.641 .15
SCG Holding Corp. (USA) (2) 847,200 16.362 .15
Mosel Vitelic Inc. 1.00% convertible debentures 2005 (Taiwan) $13,000,000 15.600 .14
Intel Corp. (USA) 100,000 12.469 .11
Texas Instruments Inc. (USA) 157,800 11.401 .10
Motorola, Inc. (USA) 90,000 8.437 .08
Hyundai Electronics Industries Co., Ltd. (South Korea) (2) 500,000 7.794 .07
KYODEN CO LTD. (Japan) 238,000 7.330 .07
Altera Corp. (USA) (2) 75,000 6.441 .06
WIRELESS TELECOMMUNICATION SERVICES - 3.31%
Vodafone AirTouch PLC (United Kingdom) (formerly 40,011,366 182.808 1.64
Mannesmann AG) (United Kingdom)
Telecom Italia Mobile SpA, savings shares (Italy) 12,565,800 53.135
Telecom Italia Mobile SpA 2,224,200 23.315 .69
Telesp Celular Participacoes SA, preferred nominative (Brazil) 2,806,563,351 42.444
Telesp Celular Participacoes SA, ordinary nominative 179,760,000 2.930 .41
DDI Corp. (Japan) 1,900 19.388 .17
Nextel Communications, Inc., Series D, 13.00% 16,426 16.755 .15
preferred 2009 (USA) (3)
NTT DoCoMo, Inc. (formerly NTT Mobile Communications 400 10.315 .09
Network, Inc.) (Japan)
TELECEL -- Comunicacoes Pessoais, SA (Portugal) 386,000 6.281 .06
Crown Castle International Corp. 12.75% preferred 2010 (USA) (3) 5,848 5.848 .05
Mobistar NV (Belgium) (2) 150,000 5.122 .05
MERCHANDISING - 3.21%
Dixons Group PLC (United Kingdom) 24,389,524 115.635 1.04
Albertson's, Inc. (USA) 911,400 33.380 .30
Tesco PLC (United Kingdom) 9,786,721 29.614 .27
Loblaw Companies Ltd. (Canada) 980,000 28.804 .26
Limited Inc. (USA) 1,027,400 24.786 .22
Safeway PLC (United Kingdom) 6,500,000 23.831 .21
Dollar General Corp. (USA) 1,037,500 18.156 .16
MYCAL Corp. (Japan) 5,678,000 17.171 .15
Lowe's Companies, Inc. (USA) 355,000 16.530 .15
Kingfisher PLC (United Kingdom) 1,696,431 15.705 .15
J.C. Penney Co., Inc. (USA) 800,000 14.500 .13
Woolworths Ltd. (Australia) 2,300,385 7.621 .07
Somerfield PLC (United Kingdom) 10,000,000 7.565 .07
George Weston Ltd. (Canada) 83,300 3.506 .03
MULTI-INDUSTRY - 3.13%
Williams PLC (United Kingdom) 15,000,000 85.386 .77
Orkla AS, Class A (Norway) 2,985,714 49.401 .44
Stinnes AG (Germany) (2) 1,800,000 34.000 .30
Thyssen Krupp AG (Germany) 1,635,000 27.979 .25
Invensys PLC (United Kingdom) 7,980,000 27.494 .25
Swire Pacific Ltd., Class A (Hong Kong) 4,000,000 23.100 .21
JG Summit Holdings, Inc. 3.50% convertible $26,000,000 21.060 .19
debentures 2003 (Philippines)
China Merchants Holdings Co. Ltd. (Hong Kong) 28,198,000 16.104 .14
Ayala Corp. 3.00% convertible debentures 2000 (Philippines) $10,000,000 12.712 .11
Lend Lease Corp. Ltd. (Australia) 1,003,778 11.410 .10
Honeywell International Inc. (formerly AlliedSignal Inc.) (USA) 200,000 10.937 .10
TI Group PLC (United Kingdom) 1,790,400 9.923 .09
Harsco Corp. (USA) 363,600 9.772 .09
Berkshire Hathaway Inc., Class A (USA) (2) 98 5.743 .05
FMC Corp. (USA) (2) 70,000 4.253 .04
BUSINESS SERVICES - 2.88%
TNT Post Groep (Netherlands) 3,121,547 75.484 .68
Elior (France) (2) 2,449,100 29.772 .27
Thames Water PLC (United Kingdom) 2,266,667 27.232 .24
United Utilities PLC (United Kingdom) 2,591,910 24.500 .22
Brambles Industries Ltd. (Australia) 878,354 24.082 .22
Hays PLC (United Kingdom) 4,120,000 23.144 .21
Robert Half International Inc. (USA) (2) 300,000 17.812 .16
America Online, Inc. (USA) (2) 310,000 16.430 .15
Omnicom Group Inc. (USA) 150,000 12.591 .11
United Parcel Service, Inc. (USA) 200,000 11.975 .11
Rakuten, Inc. (Japan) (2) 136 9.840 .09
iXL Enterprises, Inc. (USA) (2) 440,000 8.360 .08
Cendant Corp. 7.50% FELINE PRIDES convertible preferred (USA) 300,000 6.244
Cendant Corp., rights, 2001 220,000 1.691 .07
American Water Works Co., Inc. (USA) 300,000 7.013 .06
Hutchison Delta Finance Ltd. 7.00% convertible $6,000,000 6.960 .06
debentures 2002 (Hong Kong -- Incorporated in
Caymen Islands) (1)
Hyder PLC (United Kingdom) 1,401,067 6.380 .06
Zhejiang Expressway Co. Ltd. (China) 39,402,000 5.057 .05
Internet Capital Group, Inc. (USA) (2) 100,000 2.694 .02
ISS-International Service System A/S (Denmark) (2) 35,000 2.544 .02
BROADCASTING & PUBLISHING - 2.84%
Time Warner Inc. (USA) 600,000 47.363 .43
Viacom Inc., Class B (USA) (2) 735,000 45.570 .41
Seat Pagine Gialle SpA (Italy) 6,000,000 23.060
Seat Pagine Gialle SpA, savings shares 7,000,000 18.498 .37
AT&T Corp. - Liberty Media Group (USA) (2) 900,000 39.881 .36
Mediaset SpA (Italy) 2,200,000 33.985 .30
News Corp. Ltd., preferred (Australia) 3,109,045 29.888 .27
CANAL + (France) 118,712 22.646 .20
ProSieben Media AG (Germany) 200,000 19.039 .17
United Pan-Europe Communications NV (Netherlands) (2) 600,000 15.581 .14
Clear Channel Communications, Inc. (USA) (2) 120,000 8.985 .08
Publishing & Broadcasting Ltd. (Australia) 1,000,000 7.368 .07
Nippon Broadcasting System, Inc. (Japan) 78,000 4.710 .04
FOREST PRODUCTS & PAPER - 2.72%
Fort James Corp. (USA) 2,500,000 56.562 .51
Georgia-Pacific Corp., Georgia-Pacific Group (USA) 800,000 26.200
Georgia-Pacific Corp., Timber Group 750,000 17.344 .39
Smurfit-Stone Container Corp. (USA) (2) 2,471,300 35.062 .31
Consolidated Papers, Inc. (USA) 750,000 28.031 .25
Metsa-Serla Oy 4.375% convertible debentures 2002 (Finland) $30,000,000 27.750 .25
Sonoco Products Co. (USA) 1,200,000 26.475 .24
Bowater Inc. (USA) 500,000 25.844 .23
Champion International Corp. (USA) 330,000 24.090 .22
Kimberly-Clark de Mexico, SA de CV (Mexico) 5,429,500 16.842 .15
International Paper Co. (USA) 323,560 11.264 .10
UPM-Kymmene Corp. (Finland) 287,000 7.300 .07
ENERGY SOURCES - 2.56%
Shell Canada Ltd., Class A (Canada) 4,438,100 99.168 .89
TOTAL FINA SA, Class B (France) 369,594 58.373 .52
Norsk Hydro AS (Norway) 910,000 35.081 .32
"Shell" Transport and Trading Co., PLC (New York 400,000 20.150
registered) (United Kingdom)
Royal Dutch Petroleum Co. (Netherlands) 100,000 6.174 .28
Royal Dutch Petroleum Co. (New York registered) 80,000 4.995
Broken Hill Proprietary Co. Ltd. (Australia) 2,156,933 21.942 .20
Petro-Canada (Canada) 1,000,000 19.105 .17
Devon Energy Corp. (USA) 150,000 8.972 .08
Unocal Corp. (USA) 160,000 6.150 .06
Esso SA Francaise (France) 78,567 4.625 .04
INSURANCE - 2.48%
ING Groep NV (Netherlands) 2,054,024 123.137 1.11
EULER SA (France) (2) 710,000 34.856 .31
PartnerRe Holdings Ltd. (Singapore - Incorporated in Bermuda) 550,000 20.419 .18
Clarica Life Insurance Co. (Canada) 1,000,000 19.339 .17
Allstate Corp. (USA) 650,000 17.225 .15
Mercury General Corp. (USA) 650,000 16.575 .15
Independent Insurance Group PLC (United Kingdom) 3,460,000 12.589 .11
Sumitomo Marine & Fire Insurance Co., Ltd. (Japan) 2,000,000 12.523 .11
QBE Insurance Group Ltd. (Australia) 3,000,000 11.412 .10
Chiyoda Fire & Marine Insurance Co., Ltd. (Japan) 1,735,000 5.553 .05
Fairfax Financial Holdings Ltd. (Canada) (2) 35,300 3.702
Fairfax Financial Holdings Ltd., subscription receipts (2) 11,000 1.153 .04
DATA PROCESSING & REPRODUCTION - 2.04%
Fujitsu Ltd. (Japan) 1,000,000 28.293
Fujitsu Ltd., warrants, expire 2000 (2) 2,670 18.957 .42
SOTEC Co., Ltd. (Japan) (1)(2) (4) 2,950 33.072 .30
Microsoft Corp. (USA) (2) 518,000 32.407 .29
Acer Inc. SIZeS 0% convertible debentures 2005 (Taiwan) (1) $29,975,000 29.151 .26
3Com Corp. (USA) (2) 575,000 24.042 .22
Hewlett-Packard Co. (USA) 200,000 24.025 .21
Dell Computer Corp. (USA) (2) 325,000 14.016 .13
Xerox Corp. (USA) 498,100 13.511 .12
Cadence Design Systems, Inc. (USA) (2) 600,000 9.600 .09
FOOD & HOUSEHOLD PRODUCTS - 2.03%
Nabisco Group Holdings Corp. (USA) 3,025,000 65.983 .59
Reckitt Benckiser PLC (formerly Reckitt & Colman 3,340,687 36.682 .33
PLC) (United Kingdom)
Nestle SA (Switzerland) 18,600 35.605 .32
Keebler Foods Co. (USA) 675,000 24.469 .22
Uni-Charm Corp. (Japan) 400,000 23.377 .21
Unilever PLC (United Kingdom) 3,243,500 21.439 .19
Groupe Danone (France) 40,000 9.392 .09
Sara Lee Corp. (USA) 500,000 9.000 .08
FINANCIAL SERVICES - 2.02%
Household International, Inc. (USA) 1,485,000 69.795 .63
OM Gruppen AB (Sweden) 990,000 40.108 .36
Nichiei Co., Ltd. (Japan) 1,600,000 28.126 .25
ORIX Corp. (Japan) 143,500 19.395
ORIX Corp. 0.375% convertible debentures 2005 Y400,000,000 5.520 .22
China Development Industrial Bank (Taiwan) (2) 15,717,000 24.007 .22
Associates First Capital Corp., Class A (USA) 670,000 18.383 .17
ICICI Ltd. (India) 420,000 8.190 .07
Bell Atlantic Financial Services, Inc. 4.25% $5,000,000 5.744 .05
convertible debentures 2005 (USA)
Shohkoh Fund & Co., Ltd. (Japan) 20,000 4.304 .04
Freddie Mac (USA) 30,000 1.335 .01
REAL ESTATE - 2.00%
Sun Hung Kai Properties Ltd. (Hong Kong) 8,860,000 54.010 .49
Hongkong Land Holdings Ltd. (Hong Kong - 23,217,500 35.987 .32
Incorporated in Bermuda)
AMB Property Corp. (USA) 1,400,000 31.500 .28
Hysan Development Co. Ltd. (Hong Kong) 21,482,553 23.296 .21
IndyMac Mortgage Holdings, Inc. (USA) 1,300,000 16.981 .15
Amoy Properties Ltd. (Hong Kong) 27,000,000 16.026 .14
Unibail (France) 116,300 15.095
Unibail, warrants, expire 2004 (2) 116,300 .674 .14
Security Capital Global Realty (Luxembourg) (1)(2)(4) 450,000 8.645 .08
Brookfield Properties Corp. (Canada) 612,500 8.142 .07
SM Prime Holdings, Inc. (Philippines) 52,885,000 6.463 .06
New World China Land Ltd. (China - Incorporated 20,800,000 5.339 .05
in the Cayman Islands) (2)
Meditrust Corp., (USA) 415,339 .779 .01
INDUSTRIAL COMPONENTS - 1.71%
THK Co., Ltd. (Japan) 1,840,000 84.148 .76
Autoliv, Inc. (USA) 1,280,000 35.357 .32
Dana Corp. (USA) 1,250,000 32.266 .29
Asahi Diamond Industrial Co., Ltd. (Japan) 3,465,000 18.900 .17
Morgan Crucible Co. PLC (United Kingdom) 3,161,523 10.182 .09
Tomkins PLC (United Kingdom) 2,250,000 6.455 .06
Federal-Mogul Corp. 7.00% convertible preferred (USA) 110,000 2.503 .02
METALS: NONFERROUS - 1.64%
KGHM Polska Miedz (GDR) (Poland) 2,874,000 43.110 .39
Alcoa Inc. (USA) 650,000 37.984 .34
Freeport-McMoRan Copper & Gold Inc., Class B (USA) (2) 3,569,800 32.798 .29
Billiton PLC (United Kingdom) 8,200,000 27.884 .25
Pechiney, Class A (France) 499,300 20.590 .19
Gencor Ltd. (South Africa) 8,000,000 20.093 .18
GOLD MINES - 1.29%
Barrick Gold Corp. (Canada) 3,600,000 65.025 .59
Gold Fields Ltd. (South Africa) 5,498,850 19.888
Gold Fields of South Africa Ltd. 681,726 .729 .19
Homestake Mining Co. (USA) 3,000,000 20.250 .18
Normandy Mining Ltd. (Australia) 30,000,000 14.223
Normandy Mining Ltd., warramts, expire 2001 (2) 30,000,000 .274 .13
Newcrest Mining Ltd. (Australia) (2) 6,000,000 12.269 .11
Anglogold Ltd. (South Africa) 250,000 9.975 .09
LEISURE & TOURISM - 1.12%
Hilton Group PLC (United Kingdom) 7,350,000 27.195 .24
Seagram Co. Ltd. (Canada) 336,100 16.028
Seagram Co. Ltd. 7.50% ACES convertible preferred 225,000 10.364 .24
Millennium & Copthorne Hotels PLC (United Kingdom) 3,830,000 22.376 .20
Airtours PLC 5.75% convertible subordinated notes P12900000 18.106 .16
2004 (United Kingdom)
SFX Entertainment, Inc., Class A (USA) (2) 385,000 16.796 .15
AMCV Capital Trust I 7.00% convertible preferred (USA) 200,000 8.200 .07
Village Roadshow Ltd., Class A, 5.50% preferred (Australia) 2,967,813 3.060
Village Roadshow Ltd., Class A, 5.50% preferred (1) 2,623,574 2.705
Village Roadshow Ltd. 600,000 .781 .06
TRANSPORTATION: RAIL & ROAD - 1.02%
Norfolk Southern Corp. (USA) 3,350,000 59.672 .53
CSX Corp. (USA) 2,500,000 54.375 .49
AEROSPACE & MILITARY TECHNOLOGY - 0.97%
Lockheed Martin Corp. (USA) 2,650,000 64.925 .58
Bombardier Inc., Class B (Canada) 1,650,000 43.151 .39
AUTOMOBILES - 0.94%
Volvo AB, Class B (Sweden) 2,900,000 69.101
Volvo AB, Class B, redemption rights 2000 (2) 2,900,000 1.861 .64
Suzuki Motor Corp. (Japan) 2,100,000 25.812 .23
Honda Motor Co., Ltd. (Japan) 250,000 8.233 .07
CHEMICALS - 0.92%
Dow Chemical Co. (USA) 265,200 28.393 .26
DSM NV (Netherlands) 834,828 27.323 .25
Sherwin-Williams Co. (USA) 572,000 13.299 .12
Praxair, Inc. (USA) 300,000 12.600 .11
Millennium Chemicals Inc. (USA) 469,500 9.038 .08
L'Air Liquide (France) 57,555 8.100 .07
Rhone-Poulenc-Rhodia 3.25% convertible preferred 175,000 3.878 .03
(France) (1)(2)
APPLIANCES & HOUSEHOLD DURABLES - 0.83%
Newell Rubbermaid Inc. (USA) 1,365,000 35.831 .32
Sony Corp. (Japan) 385,400 34.858 .32
Koninklijke Philips Electronics NV (Netherlands) 480,000 21.482 .19
MISCELLANEOUS MATERIALS & COMMODITIES - 0.60%
Crown Cork & Seal Co., Inc. (USA) 2,000,000 34.250 .31
Nippon Sheet Glass Co., Ltd. (Japan) 3,540,000 32.018 .29
WHOLESALE & INTERNATIONAL TRADE - 0.49%
Marubeni Corp. (Japan) 16,239,400 43.084 .40
Ingram Micro Inc. 0% convertible debentures 2018 (USA) $26,375,000 9.528 .09
METALS: STEEL - 0.43%
Usinor (formerly Usinor Sacilor) (France) 2,000,000 24.126
Usinor 3.875 convertible preferred 660,000 11.942 .33
Corus Group PLC (United Kingdom) 4,550,600 6.680 .06
Tubos de Acero de Mexico, SA (ADR) (Mexico) 350,000 4.725 .04
N.T.S. Steel Group PCL 4.00% convertible $6,670,000 .267 .00
debentures 2008 (Thailand) (2)
MACHINERY & ENGINEERING - 0.41%
Fuji Machine Mfg. Co., Ltd. (Japan) 620,000 29.907 .27
AIDA Engineering, Ltd. (Japan) 4,065,000 15.348 .14
RECREATION & OTHER CONSUMER PRODUCTS - 0.38%
Nintendo Co., Ltd. (Japan) 175,000 25.974 .23
EMI Group PLC (United Kingdom) 1,003,167 8.551 .08
Hasbro, Inc. (USA) 500,000 8.187 .07
HEALTH CARE PROVIDERS & SERVICES - 0.36%
HCA -- The Healthcare Co. (formerly Columbia/ 800,000 21.600 .19
HCA Healthcare Corp.) (USA)
Cintas Corp. (USA) 427,500 18.810 .17
BUILDING MATERIALS & COMPONENTS - 0.29%
BPB PLC (United Kingdom) 3,607,900 19.997 .18
TOSTEM CORP. (Japan) 750,000 12.349 .11
ENERGY EQUIPMENT - 0.16%
Schlumberger Ltd. (Netherlands Antilles) 165,000 12.138 .12
Baker Hughes Inc. (USA) 134,300 4.868 .04
ELECTRONIC INSTRUMENTS - 0.13%
PE Biosystems Group (USA) 200,000 11.100 .10
Research In Motion Ltd. (Canada) (2) 100,000 3.220 .03
IT CONSULTING & SERVICES - 0.10%
CMG PLC (United Kingdom) 536,000 7.491
CMG PLC (Netherlands) 264,000 3.597 .10
TRANSPORTATION: AIRLINES - 0.06%
Air New Zealand Ltd., Class B (New Zealand) 6,320,000 6.339 .06
TRANSPORTATION: SHIPPING - 0.05%
Peninsular and Oriental Steam Navigation Co. (United Kingdom) 550,000 5.776 .05
Miscellaneous - 2.43%
Other equity securities in initial period of acquisition 270.057 2.43
TOTAL EQUITY SECURITIES (cost: $8,121.932) 10,104.417 90.80
Principal Market Percent
Amount Value of Net
(Millions) (Millions) Assets
Bonds & Notes
Industrials - 0.21%
Indah Kiat Finance Mauritius Ltd. 10.00% 2007 $24.050 12.987
Indah Kiat International Finance 8.875% 2000 2.290 2.238
Indah Kiat Global BD 12.50% 2006 1.000 .663 .15
Container Corp. of America, Series A, 11.25% 2004 6.000 6.045
Container Corp. of America 9.75% 2003 1.000 1.000 .06
ENERGY SOURCES - 0.06%
Petrozuata Finance, Inc., Series B, 8.22% 2017 (1) 9.000 6.773 .06
WIRELESS TELECOMMUNICATION SERVICES - 0.02%
SBA Communications Corp. 0%/12.00% 2008 (5) 2.825 1.921 .02
Financial - 0.02%
APP Finance (VI) Mauritius Ltd. 11.75% 2005 2.800 1.820 .02
Argentinean Government - 0.25%
Argentina (Republic of) 11.375% 2017 21.000 18.244
Argentina (Republic of) 11.75% 2007 ARP8.000 6.441 .25
Argentina (Republic of) 8.75% 2002 4.000 3.485
Brazilian Government - 0.90%
Brazil (Federal Republic of), Bearer 8.00% 2014 (4) $142.653 100.748 .90
TOTAL BONDS AND NOTES (cost: $151.973 million) 162.365 1.46
Shares/
Principal Market Percent
Amount Value of Net
(Million) (Million) Assets
Short-Term Securities
Corporate Short-Term Notes - 5.72%
Abbey National North America 6.05% due 6/12-6/13/2000 $72.500 72.345 .65
Associates First Capital Corp. 6.16%-6.58% due 7/7-7/13/2000 68.000 67.510 .61
Spintab AB 5.98%-6.13% due 6/9-7/6/2000 62.800 62.539 .56
USAA Capital Corp. 6.23%-6.51% due 6/12-7/7/2000 61.000 60.648 .55
Ciesco L.P. 6.05%-6.56% due 6/20-7/21/2000 49.000 48.797 .44
DaimlerChrysler NA Holdings 6.04%-6.56% due 6/16-7/18/2000 47.000 46.652 .42
British Telecommunications PLC 6.50%-6.11% due 7/6-7/21/2000 45.000 44.639 .40
FCE Bank 6.10%-6.56% due 6/22-7/11/2000 44.000 43.787 .39
Coca-Cola Co. 6.01% due 6/16/2000 35.000 34.907 .31
Procter & Gamble Co. 6.19%-6.49% due 6/2-6/29/2000 29.900 29.768 .27
E.I. du Pont de Nemours & Co. 6.54% due 7/19/2000 30.000 29.733 .27
Motiva Enterprises LLC 6.07% due 6/21/2000 27.800 27.702 .25
Rio Tinto America, Inc. 6.03%-6.49% due 6/9-6/21/2000 25.500 25.449 .23
American Honda Finance Corp. 6.03% due 6/15/2000 25.000 24.936 .22
General Electric Capital Corp. 6.78% due 6/1/2000 16.800 16.797 .15
Federal Agency Discount Notes - 0.77%
Freddie Mac 5.77%-6.385% due 6/15-7/20/2000 62.745 62.401 .56
Federal Home Loan Banks 6.13% due 6/2/2000 13.600 13.595 .12
Federal National Mortgage Assn. 5.85%-6.02% due 6/1-6/29/2000 10.100 10.084 .09
Certificates of Deposit - 0.66%
Canadian Imperial Bank of Commerce 6.07%-6.14% due 6/5-6/19/2000 74.000 74.000 .66
Non-U.S. Currency - 0.06%
New Taiwanese Dollar NT$189.971 6.174 .06
TOTAL SHORT-TERM SECURITIES (cost: $802.940 million) 802.463 7.21
TOTAL INVESTMENT SECURITIES (cost: $9,076.845 million) 11,069.245 99.47
Excess of cash and receivables over payables 59.288 .53
NET ASSETS $11,128.533 100.00%
(1) Purchased in a private placement transaction;
resale to the public may rquire 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, 1999
AAPT
Acer
AMCV Capital Trust
America Online
Asahi Diamond Industrial
Bank of America
Bergen Brunswig
Brookfield Properties
Cadence Design Systems
Canadian Imperial Bank of Commerce
China Development Industrial Bank
China Merchants Holdings
Clear Channel Communications
CMG
Crown Cork & Seal
Dai-ichi Kangyo Bank
Dell Computer
Dow Chemical
Duke Energy
Elior
ERG
EULER
Hasbro
Hilton Group
Housing & Commercial Bank
Hubbell
Hyundai Electronics Industries
ICICI
Industrial Bank of Japan
Infineon Technologies
Internet Capital Group
iXL Enterprises
Kyoden
Lion Nathan
Lloyds TSB Group
Macronix International
Marubeni
Millennium & Copthorne Hotels
Mosel Vitelic
Motorola
Nippon Broadcasting System
Nippon Sheet Glass
Norfolk Southern
Omnicare
Peninsular & Oriental Steam Navigation
PowerGen
Publishing & Broadcasting
Rakuten
Research In Motion
Samsung Electronics
SBC Communications
SCG Holding
SFX Entertainment
Shionogi & Co
Somerfield
SOTEC
Southern Co
Texas Instruments
TOSTEM
Toyo Trust and Banking
Tubos de Acero de Mexico
Unilever
United Energy
Xerox
Zhejiang Expressway
Equity Securities Eliminated
from the Portfolio Since November 30, 1999
Airgas
Asahi Breweries
Bayerische Motoren Werke
BOC Group
Canadian Pacific
CarrAmerica Realty
Celera Genomics Group
Chartered Semiconductor Manufacturing
Coles Myer
Compania de Telecomunicaciones de Chile
Computer Associates International
Courtaulds Textiles
Delphi Automotive Systems
Electronic Data Systems
Fujisawa Pharmaceutical
Ispat Industries
Lear
Merck & Co
MidAmerican Energy Holdings
National Bank of Canada
NCL Holding
Oracle
Quintiles Transnational
Renault
Safra Republic Holdings
SmarTone Telecommunications Holdings
SunTrust Banks
Swisscom
Telefonica Publicidad e Informacion
Unidanmark
<TABLE>
Capital World Growth and Income Fund
Financial Statements
(dollars in millions)
<S> <C> <C>
Statement of Assets and Liabilities Unaudited
at May 31, 2000
Assets:
Investment securities at market
(cost: $8,273.905) $10,266.782
Short-term securities
(cost: $802.940) 802.463
Cash 1.105
Receivables for --
Sales of investments $62.933
Sales of fund's shares 10.720
Dividends and accrued interest 33.698 107.351
11,177.701
Liabilities:
Payables for --
Purchases of investments 29.148
Repurchases of fund's shares 8.410
Management services 3.922
Accrued expenses 7.688 49.168
Net Assets at May 31, 2000 -- (authorized
capital stock -- 400,000,000 shares) $11,128.533
Class A shares, $.01 par value
Net assets $11,110.031
Shares outstanding 375,448,915
Net asset value per share $29.59
Class B shares, $.01 par value
Net assets $18.502
Shares outstanding 626,322
Net asset value per share $29.54
See Notes to Financial Statements
Statement of Operations
for the six months ended May 31, 2000
Investment Income:
Income:
Dividends $116.847
Interest 36.256 $153.103
Expenses:
Management services fee 22.973
Distribution expenses - Class A 13.299
Distribution expenses - Class B .021
Transfer agent fee - Class A 4.393
Transfer agent fee - Class B .002
Reports to shareholders .239
Registration statement and prospectus .523
Postage, stationery and supplies .652
Directors' fees .089
Auditing and legal fees .054
Custodian fee 1.537
Taxes other than federal income tax .148
Other expenses .123 44.053
Net investment income 109.050
Realized Gain and Change in Unrealized
Appreciation on Investments:
Net realized gain 1,102.877
Net change in unrealized appreciation on
investments (216.011)
Net realized gain and change in unrealized
appreciation on investments 886.866
Net Increase in Net Assets Resulting from
Operations $995.916
See Notes to Financial Statements
Statement of Changes in Net Assets
Six months
ended Year ended
May 31, November 30,
2000* 1999
Operations:
Net investment income $ 109.050 $ 178.443
Net realized gain on investments 1,102.877 707.262
Net change in unrealized appreciation
on investments (216.011) 725.617
Net increase in net assets
resulting from operations 995.916 1,611.322
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income:
Class A (78.531) (161.528)
Class B - -
Distributions from net realized gain
on investments:
Class A (688.960) (719.208)
Class B - -
Total dividends and distributions (767.491) (880.736)
Capital Share Tranactions:
Proceeds from shares sold 842.587 1,019.018
Proceeds from shares issued in reinvestment
of net investment income dividends and
distributions of net realized gain on
investments 731.062 839.704
Cost of shares repurchased (695.185) (1,082.210)
Net increase in net assets
resulting from capital share transactions 878.464 776.512
Total Increase in Net Assets 1,106.889 1,507.098
Net Assets:
Beginning of period 10,021.644 8,514.546
End of period (including
undistributed net investment income
of: $47.701 and $17.182, respectively) $11,128.533 $10,021.644
* 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. The fund offers Class A and Class B shares. Class A
shares are sold with an initial sales charge of up to 5.75%. Class B shares
are sold without an initial sales charge but subject to a contingent deferred
sales charge paid upon redemption. This charge declines from 5% to zero over a
period of six years. Class B shares have higher distribution expenses and
transfer agent fees than Class A shares. Class B shares are automatically
converted to Class A shares eight years after the date of purchase. Holders of
both classes of shares have equal pro rata rights to assets and identical
voting, dividend, liquidation and other rights, except that each class bears
different distribution and transfer agent expenses, and each class shall have
exclusive rights to vote on matters affecting only that class.
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 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.
ALLOCATIONS - Income, expenses other than class-specific expenses and realized
and unrealized gains and losses are allocated daily between the classes based
on their relative net asset values. Distribution expenses, transfer agent fees
and any other class-specific expenses are accrued daily and charged to the
applicable share class.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - Investments in securities of non-U.S. issuers in certain
countries involve special investment risks. These risks may include, but are
not limited to, investment and repatriation restrictions, revaluation of
currencies, adverse political, social, and economic developments, government
involvement in the private sector, limited and less reliable investor
information, lack of liquidity, certain local tax law considerations, and
limited regulation of the securities markets.
TAXATION - Dividend and interest income is recorded net of non-U.S. taxes paid.
For the six months ended May 31, 2000, such non-U.S. taxes were $8,811,000.
CURRENCY GAINS AND LOSSES - 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 $950,000 for the six months ended May 31, 2000.
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, 2000, net unrealized appreciation on investments for federal
income tax purposes aggregated $1,983,668,000; $2,698,251,000 related to
appreciated securities and $714,583,000 related to depreciated securities.
During the six months ended May 31, 2000, the fund realized, on a tax basis, a
net capital gain of $1,103,827,000 on securities transactions. Net losses
related to non-U.S. currency transactions of $950,000 were treated as an
adjustment to ordinary income for federal income tax purposes. The cost of
portfolio securities for federal income tax purposes was $9,085,577,000 at May
31, 2000.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $22,973,000 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 the following rates and average net asset levels:
<TABLE>
<CAPTION>
Average Net Asset Level
<S> <C> <C>
Rate In Excess of Up to
0.60% $0 $500 million
0.50% $500 million $1 billion
0.46% $1 billion $1.5 billion
0.43% $1.5 billion $2.5 billion
0.41% $2.5 billion $4 billion
0.40% $4 billion $6.5 billion
0.395% $6.5 billion $10.5 billion
0.39% $10.5 billion
</TABLE>
DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution for Class A shares,
the fund may expend up to 0.30% of Class A average daily 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. Pursuant to a Plan of Distribution
for Class B shares, the fund may expend up to 1.00% of Class B average daily
net assets annually to compensate dealers for their selling and servicing
efforts. During the six months ended May 31, 2000, distribution expenses under
the Plans of Distribution for Class A and Class B shares were $13,299,000 and
$21,000, respectively. As of May 31, 2000, accrued and unpaid distribution
expenses for Class A and Class B shares were $6,176,000 and $13,000,
respectively. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $2,363,000 (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 $4,395,000.
DEFERRED 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, 2000, aggregate deferred amounts and earnings thereon since
the deferred compensation plan's adoption (1993), net of any payments to
Directors, were $333,000.
AFFILIATED DIRECTORS AND OFFICERS - 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 $2,240,693,000 and $2,419,166,000, respectively,
during the six months ended May 31, 2000.
As of May 31, 2000, net assets consisted of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
Capital paid in on shares of beneficial $7,987,627,000
interest
Undistributed net investment income 47,701,000
Accumulated net realized gain 1,101,107,000
Net unrealized appreciation 1,992,098,000
Net assets $11,128,533,000
</TABLE>
Capital shares transactions in the fund were as follows:
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 $1,537,000 includes $23,000 that was paid by these credits
rather than in cash.
<TABLE>
Capital World Growth and Income Fund
Capital share transactions table:
(dollars in millions)
<S> <C> <C> <C> <C>
Six months Year ended
ended November 30,
May 31, 2000 1999
Amount Shares Amount Shares
Class A Shares:
Sold $ 823.773 27,823,747 $1,019.018 37,818,271
Reinvested dividends and distributions 731.062 25,902,747 839.704 33,918,618
Repurchased (695.098) (23,446,519) (1,082.210) (40,235,519)
Net increase in Class A 859.737 30,279,975 776.512 31,501,370
Class B Shares: *
Sold 18.814 629,257 - -
Reinvested dividends and distributions - - - -
Repurchased (0.087) (2,935) - -
Net increase in Class B 18.727 626,322 - -
Total net increase in fund $ 878.464 30,906,297 $ 776.512 31,501,370
*Class B shares not offered before March 15, 2000.
</TABLE>
<TABLE>
Capital World Growth and Income Fund
Per-Share Data and Ratios(1)
<S> <C> <C> <C>
Net gains
(losses) on
Net asset securities
value, Net (both
beginning investment realized and
Period ended of period income unrealized)
Class A:
2000 $29.03 $.30 (2) $2.46 (2)
1999 27.15 .48 4.17
1998 25.89 .59 3.12
1997 23.77 .64 3.045
1996 20.22 .70 3.91
1995 17.81 .61 2.72
Class B:
2000 29.57 .11 (2) (.14) (2)
Total Dividends
from (from net Distributions
investment investment (from capital
Period ended operations income) gains)
Class A:
2000 $2.76 $(.22) $(1.98)
1999 4.65 (.48) (2.29)
1998 3.71 (.58) (1.87)
1997 3.685 (.650) (.915)
1996 4.61 (.72) (.34)
1995 3.33 (.63) (.29)
Class B:
2000 (.03) - -
Net
asset
value,
Total end of Total
Period ended distributions period return
Class A:
2000 $(2.20) $29.59 9.96%
1999 (2.77) 29.03 19.08
1998 (2.45) 27.15 15.51
1997 (1.57) 25.89 16.36
1996 (1.06) 23.77 23.67
1995 (.92) 20.22 19.41
Class B:
2000 - 29.54 (.10)
Net assets,
end of Ratio of Ratio of
period expenses net income
(in to average to average
Period ended millions) net assets net assets
Class A:
2000 $11,110 .81% (3) 2.01% (3)
1999 10,022 .79 1.93
1998 8,515 .78 2.25
1997 7,207 .82 2.53
1996 5,139 .85 3.28
1995 3,611 .88 3.24
Class B:
2000 19 1.55 (3) 1.27 (3)
Portfolio
turnover
Period ended rate
Class A:
2000 21.79% (4)
1999 33.90
1998 39.44
1997 32.41
1996 30.18
1995 25.50
Class B:
2000 21.79 (4)
(1) The periods 1995 to 1999 represent
fiscal years ended November 30.
The periods ended 2000 (unaudited)
respresent, for Class A shares, the
six-month period ended May 31,
2000, and, for Class B shares, the
77-day period ended May 31, 2000.
Class B shares were not offered
before March 15, 2000. Total returns
for such periods ares based on activity
during the period and thus are not
representative of a full year. Total
returns 'exclude all sales charges,
including contingent 'deferred sales
charges.
(2) Based on average shares outstanding.
(3) Annualized.
(4) Represents portfolio turnover rate
(equivalent for all shares classes)
for the six months ended May 31, 2000.
</TABLE>
[The American Funds Group(r)]
Capital World Growth and Income Fund
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
For information about your account or any of the fund's services, or for a
prospectus for any of the American Funds, 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. Please read
the prospectus carefully before you invest or send money.
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, 2000, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Class A and B Shares: There are two ways to invest in Capital World Growth and
Income Fund. Class A shares are subject to a 5.75% maximum up-front sales
charge that declines for accounts of $25,000 or more. Class B shares, which are
not available for certain employer-sponsored retirement plans, have no up-front
charge. They are, however, subject to additional expenses of approximately
0.75% a year over the first eight years of ownership. If redeemed within six
years, they may also be subject to a contingent deferred sales charge (5%
maximum) that declines over time.
Printed on recycled paper
Litho in USA AGD/GRS/4631
Lit. No. WGI-013-0700
