[The American Funds Group(r)]
Capital World Growth and Income Fund
1999 Annual Report
for the year ended November 30
Venturing Away from Home: A Sound Course for the Long Term
[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 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.
<TABLE>
<CAPTION>
Results at a Glance
(with distributions reinvested)
Average Annual Compound Return
12 Months 5 Years Lifetime Lifetime Total Return
Through 12/1/94 - 3/26/93 - 3/26/93 -
11/30/99 11/30/99 11/30/99 11/30/99
<S> <C> <C> <C> <C>
Capital World Growth
and Income Fund +19.1% +18.8% +17.3% +190.7%
Morgan Stanley Capital
International World Index +21.6 +18.6 +16.7 +181.4
Lipper Global
Funds Average +27.6 +17.1 +15.2 +157.9
</TABLE>
The MSCI World Index is unmanaged and measures all of the world's major stock
markets, including the U.S.
The Lipper Global 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.
The fund's 30-day yield as of December 31, 1999, calculated in accordance with
the Securities and Exchange Commission formula, was 1.51%.
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:
We are pleased to report that for the fiscal year ended November 30, 1999,
Capital World Growth and Income Fund generated a total return of 19.1%,
assuming reinvestment of capital gain distributions totaling $2.29 a share and
dividends totaling $0.48 a share. The fund's gain was above its 17.3% lifetime
average but below the 21.6% return posted by the unmanaged Morgan Stanley
Capital International World Index, which measures 22 major markets including
the United States. Capital World Growth and Income Fund also trailed the global
funds average of 27.6% as measured by Lipper, Inc., a leading mutual fund
tracking service.
The gap in part reflects your fund's lower exposure to Japanese stocks. The
Japanese stock market was one of the year's strongest performers, with a 58.2%
gain.* However, because most Japanese companies pay relatively low dividends,
they often do not satisfy your fund's mandate to produce income as well as
growth. We were therefore underweighted in Japan compared with the MSCI World
Index and many other global mutual funds. The fund did significantly increase
its investments in Japanese companies to 9.6% of total assets at the end of the
fiscal year from 3.9% a year ago. In addition, growth-oriented stocks, with
technology issues leading the pack, drove the U.S. market this year. The fund
held comparatively few technology stocks, which also pay low or no dividends.
*All country returns are based on MSCI indexes, expressed in U.S. dollar terms,
and assume reinvestment of dividends, unless otherwise indicated.
Since its introduction in March 1993, Capital World Growth and Income Fund's
emphasis on income as well as growth has served shareholders well - even if it
held the fund back somewhat this past year. Over its lifetime, the fund has
recorded a total return of 190.7%, ahead of the MSCI World Index's 181.4%
increase, and well ahead of the global equity funds average total return of
157.9% as measured by Lipper.
The Year in Review
In 1999, the United States, your fund's largest country concentration, posted
its ninth consecutive year of economic growth. Although concerns over the pace
of that growth nudged up interest rates this summer - pulling stock prices down
slightly - the U.S. market nonetheless closed the fund's fiscal year with a
solid 21.2% gain. Elsewhere in the Americas, Canadian stocks rose 36.4%, while
Argentina returned a respectable 15.8% and Brazil posted a 9.3% increase.
European stock indexes were generally disappointing this year, with many
once-stellar performers recording declines or meager results. The situation was
exacerbated by the weakness of the euro compared with the U.S. dollar. The
notable exceptions were the Swedish stock market (+50.1%) and the French market
(+21.2%), where a series of major mergers bolstered investor confidence. In
Germany and Italy, high unemployment brought down consumer spending, hampering
stock market results. The German market ended the fiscal year up 5.5%. The
Italian stock market, among the top performers a year ago, declined 5.3% in
U.S. dollar terms. In the United Kingdom, a strong currency continued to hurt
exports, and a fast-growing economy triggered concerns over rising interest
rates. The U.K. market ended the fiscal year 9.7% higher nonetheless.
The major story this year, however, was the remarkable turnaround staged by
Asian markets. Businesses there began to restructure to improve their
productivity and profitability, and governments continued to implement reforms
to improve the climate for business and, in particular, banks. Recovering from
earlier financial woes that had dragged down markets throughout the region,
many Asian markets ended the year with spectacular gains. In Japan, which
finally began to emerge from a profound recession, a strong currency added to
results for U.S. investors: Japan ended the year with a 31.5% gain in local
currency terms, which translated into a 58.2% gain when converted into dollars.
The Hong Kong market posted a 44.0% increase. Elsewhere in Asia, South Korea
recorded a stunning 171.8% increase. Australian stocks gained 11.5%, while New
Zealand was up 5.7% and the Philippine market fell 8.5%.
How Your Fund Was Affected
Capital World Growth and Income Fund has substantial investments in the
telecommunications industry, which generally helped results. Telefonos de
Mexico, for instance, rewarded shareholders with a 98.8% price increase. On the
other side of the globe, Germany's Mannesmann ended the year with a 94.1% gain,
while Swedish telecommunications equipment provider Ericsson was up 74.6%.
Telecom Italia, however, your fund's largest holding, suffered from a hostile
takeover bid by Olivetti and saw its stock decline by 1.0%.
The fund has a fairly high exposure to utility stocks, which tend to pay
attractive dividends. One of the fund's largest holdings, Northeast Utilities,
ended the year with an increase of 34.1%. Many U.K. utility companies, however,
suffered from adverse regulatory measures.
Banks, another major area of concentration for Capital World Growth and Income
Fund, generally had a weak year, because rising interest rates generated
concerns about earnings. U.S.-based First Union dropped 36.3%, and BANK ONE
fell by 31.3%. Although the Canadian market did well, bank stocks in that
country had a difficult year, which affected your fund's results. Royal Bank of
Canada, for instance, was down 8.5%. National Bank of Canada fell further
still, recording a 24.6% decline. A notable exception was Japanese banks.
Japan's Fuji Bank was up 204.0%.
Among other industries, one of your fund's largest holdings, Dixons Group, the
United Kingdom's largest retailer of consumer electronics, recorded a 76.2%
rise. In the pharmaceuticals sector, AstraZeneca, a major holding for the fund,
was up 21.9%.
[Begin Sidebar]
Yields
The fund/1/ vs. MSCI World Index/2/
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C>
Capital World Growth
and Income Fund 3.1% 3.0% 2.4% 2.0% 1.5%
MSCI World Index 2.2% 2.0% 1.8% 1.6% 1.4%
</TABLE>
/1/12-month distribution rates at net asset value calculated by Capital
Research and Management Company
/2/Gross dividend yields calculated by MSCI
[End Sidebar]
The fund benefited from many of the holdings we did have in Japan and in
technology. Fujitsu, Japan's largest manufacturer of computers and a leading
producer of telecommunications systems and semiconductors, was the fund's top
performer with a staggering 492.0% return. U.S.-based Micron Technology, a
leading manufacturer of computer systems and components and one of your fund's
largest holdings, recorded a gain of 62.5%.
A Note About Dividends
As many shareholders in the fund already know, dividends vary from quarter to
quarter. Companies outside North America usually pay dividends annually or
semi-annually as opposed to quarterly in the United States. Dividends paid by
the fund in September, December and March are usually smaller than the one paid
in June.
For the 12 months ended November 30, the fund produced a dividend rate of 1.5%,
exceeding the MSCI World Index's yield of 1.4%.
Looking Forward
The rise in technology stocks made headline news this year and undoubtedly
rewarded many investors. We believe, however, that many of these stocks are
today fully priced and do not offer the best long-term value for shareholders.
While our investment professionals remain tuned to developments in this area,
it appears today that there are better opportunities among lower growth, higher
income-producing stocks. Cyclical stocks, which tend to pay attractive
dividends, remain well priced.
Although the fund's 12-month return of 19.1% is most welcome, we want to
caution shareholders against expecting double-digit gains as a matter of
course. We continue to closely monitor economic and political developments
around the world, but no one can predict with certainty what direction global
markets will assume. In general, the trend seems positive. Deregulation of
various industries continues, increasing the potential for companies to
successfully compete in the global marketplace. Inflation remains relatively
benign in major markets, fueling investor enthusiasm.
In the United States, however, a major question is whether the pace of growth
will raise concerns about inflation, leading to increases in interest rates. In
Europe, the outlook for stocks remains good despite a disappointing year.
Companies are merging at record rates in an effort to be more globally
competitive, and the European Central Bank is trying to create an environment
hospitable to business growth. Asia's rebound is a welcome improvement in
global markets.
Our strong commitment to research and value-oriented investing has served
shareholders well in the past, and should prove a sound course for the long
term.
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, Jr.
Paul G. Haaga, Jr.
President
January 18, 2000
[Begin Sidebar]
How a $10,000 Investment Has Grown
Since March 26, 1993
$28,141/1/
Morgan Stanley Capital
International World Index
with dividends reinvested
$27,396/1/,/2/
Capital World Growth
and Income Fund
with dividends reinvested
$23,014/2/
Capital World Growth
and income Fund
with dividends excluded
$11,720/3/
U.S. Consumer
Price Index (inflation)
$10,000
original investment
<TABLE>
<CAPTION>
Date Capital World Capital World Morgan Stanley U.S. Consumer Price
Growth and Income Growth and Income Capital Index (inflation)
Fund /1/ /2/ with fund /2/ International World /3/
dividends with dividends Index
reinvested excluded with dividends
reinvested /1/
<S> <C> <C> <C> <C>
3/26/93 $9,425 9425 $10,000 $10,000
5/31/93 * 9,719 9719 10,837 10,042
8/31/93 10,401 10313 11,475 10,084
11/30/93 10,782 10625 10,924 10,153
2/28/94 11,615 11388 12,062 10,216
5/31/94 11,315 11044 11,936 10,272
8/31/94 12,038 11656 12,501 10,376
11/30/94 11,592 11131 11,982 10,425
2/28/95 11,860 11293 12,097 10,508
5/31/95 12,788 12094 13,242 10,599
8/31/95 13,412 12558 13,598 10,648
11/30/95 13,841 12850 14,260 10,696
2/28/96 14,700 13553 15,042 10,787
5/31/96 15,326 14031 15,673 10,905
8/31/96 15,414 13947 15,379 10,954
11/30/96 17,118 15362 17,004 11,045
2/28/97 17,848 15936 17,136 11,114
5/31/97 18,908 16782 18,427 11,149
8/31/97 19,755 17380 18,892 11,198
11/30/97 19,917 17414 19,212 11,247
2/28/98 21,881 19,050 21,351 11,274
5/31/98 22,801 19,763 22,198 11,337
8/31/98 19,884 17,104 19,671 11,379
11/30/98 23,007 19,676 23,138 11,421
2/28/99 23,904 20,375 24,151
5/31/99 25,004 21,214 25,203
8/31/99 26,176 22,063 26,263
11/30/99 27,396 23,014 28,141 11,720
</TABLE>
<TABLE>
<CAPTION>
Average Annual Compound Returns /4/
For periods ended
11/30/99 12/31/99
<S> <C> <C>
Lifetime (since 3/26/93) +16.28% +17.64%
Five Years +17.37% +19.40%
One Year +12.22% +19.98%
</TABLE>
* For the period March 26 through May 31, 1993.
/1/ Results calculated with dividends and capital gains reinvested.
/2/ This number, unlike those shown earlier in this report, reflects payment of
the maximum sales charge of 5.75% on the $10,000 investment. Thus, the net
amount invested was $9,425. Results shown do not take into account income or
capital gain taxes. The sales charge is lower for investments of $25,000 or
more.
/3/ Computed from data supplied by the U.S. Department of Labor, Bureau of
Labor Statistics.
/4/ Assumes reinvestment of all distributions and payment of the 5.75% maximum
sales charge at the beginning of the stated periods.
The indexes are unmanaged and do not reflect sales charges, commissions or
expenses. Past results are not predictive of future results.
[End Sidebar]
[photos: country flags, American flag, cellular phone, person on phone]
Venturing Away from Home:
A Sound Course for the Long Term
In the fifth century B.C., the historian Herodotus noted that "All men's gains
are the fruit of venturing." When Capital Research and Management Company
launched Capital World Growth and Income Fund six years ago, the intent was to
help conservative investors gain the potential benefits of global investing by
making them comfortable venturing outside U.S. borders. Your fund holds a
distinctive place among globally diversified funds in that it pursues income as
well as growth. Since its inception, your fund has posted solid gains with less
volatility than the average global fund, fulfilling its mandate of seeking
capital growth and above-average income by investing in the stocks of solid,
established companies around the world.
Meanwhile, global markets have gyrated, at times posting spectacular returns,
at others plummeting. In recent years, investors have been reminded of the
unpredictable nature of equity markets in general, as well as of the special
risks associated with investing in foreign markets. The Asian currency crisis
of 1997 was succeeded by the collapse of the Russian economy in summer 1998,
sending tremors through stock markets across the globe. Latin American markets
have had several bouts of queasiness, while European markets until recently
have been lackluster.
Against this background of change, at Capital Research we believe global
diversification is as sound an investment perspective today as ever. In the
next few pages, we'll tell you more about the benefits of maintaining a global
perspective.
[Begin Sidebar]
What Investors Are Paying
as of 12/31/99
For every $1 in corporate assets,
Market investors are paying
Hong Kong $2.27
Japan $2.41
Australia $2.55
Canada $2.79
Italy $3.71
United Kingdom $4.09
France $4.28
Germany $4.41
United States $5.81
Figures shown are averages based on price/book vale ratios reported in Morgan
Stanley Capital International Perspective.
[End Sidebar]
A World of Choice
The U.S. stock market, driven mainly by technology stocks, has for several
years outperformed many foreign markets. Yet maintaining a global perspective
is the only way to remain exposed to as many attractive investment
opportunities as possible.
"International investing makes a lot of sense because there are so many
attractive companies outside the United States," explains Thierry Vandeventer,
chairman of the fund and one of its six portfolio counselors. "Remember that
more than three-quarters of the world's stocks aren't available in U.S.
markets." Today, some two-thirds of the world's 100 largest corporations are
non-U.S. companies, including six of the 10 largest utilities, eight of the 10
largest banks and six of the 10 largest telecommunications firms. "It would be
a bit myopic to ignore that in your investment strategy," says Steve Bepler, a
portfolio counselor for the fund. Many of these companies are represented in
your fund's portfolio.
Opportunity means more than having a wide choice of companies, however. It also
is measured by value. Many stock markets around the world have not kept pace
with the soaring U.S. market in recent years. As portfolio counselor Janet
McKinley puts it, "When the U.S. market is as expensive as it has been, there
is no doubt that much better values can be found abroad."
Based on the MSCI Europe Index, stocks of European corporations are currently
trading at 26.5 times earnings, compared with 29.0 times for stocks in the MSCI
USA Index. The lower the price-to-earnings ratio, the less you're paying for
every dollar of earnings. The chart at left also shows what investors are
paying for every $1 in corporate assets. As you can see, U.S. stocks are
currently most expensive among these major markets.
Because Capital Research tends to follow a value-oriented approach, Capital
World Growth and Income Fund has less exposure to the U.S. market than many of
its peers, and has since its inception. Typically, it keeps about 60% of its
assets invested in markets outside the United States.
A Stream of Income
[photos: electric outlet, telephone pole, country flags]
Another characteristic that sets Capital World Growth and Income Fund apart
from other global funds is its emphasis on income. Income not only helps smooth
out the peaks and valleys of investing, it also plays a critical role in the
long-term growth of an investment. Reinvested dividends accounted for 46% of
the total return of the MSCI World Index over the past 20 years. In the six
years since Capital World Growth and Income Fund was created, a period
generally marked by spectacular capital appreciation and low dividend yields,
reinvested dividends have still accounted for 21% of the fund's total return.
Over the past several years, however, it has been difficult to find companies
paying attractive yields. Many companies have used their profits to buy back
their own stock or to plow money into operations rather than increase
dividends. Stock prices have also zoomed so high that dividends have looked
quite meager in comparison.
"For investors looking for income, global diversification is especially
important nowadays," says Mark Denning, a portfolio counselor based in London.
Yields in the United States have been quite low for several years now. For
various reasons, including differences in national tax structures, some
countries tend to foster higher dividend payouts. The gross dividend yield in
the United Kingdom, your fund's second-highest country concentration, is 2.5%,
compared with 0.6% in Japan, according to MSCI. Other countries where companies
have a history of paying high dividends include Australia, New Zealand, Hong
Kong and the Netherlands. Certain industries, such as utilities, also tend to
pay attractive dividends.
[Begin Sidebar]
Declines of 5% or More
in the MSCI World Index
since 3/26/93
<TABLE>
<CAPTION>
Capital World
Growth and MSCI World
Income Fund Index
<S> <C> <C>
10/29/93 -11/29/93 -1.57% -6.28%
2/1/94 - 4/4/94 -7.51 -7.25
10/31/94 - 1/23/95 -3.90 -6.74
7/1/96 - 7/24/96 -4.15 -5.75
2/25/97 - 4/14/97 -5.16 -6.77
7/31/97 - 9/1/97 -4.44 -6.99
10/7/97 - 11/12/97 -8.09 -9.44
4/15/98 - 6/15/98 -8.32 -6.27
7/20/98 - 10/5/98 -17.34 -20.24
1/6/99 - 2/9/99 -2.92 -5.87
4/27/99 - 5/27/99 -2.56 -5.99
7/16/99 - 8/10/99 -4.46 -6.89
</TABLE>
Total declines 12
Capital World Growth and Income
Fund performed better 10 times
MSCI performed better 2 times
Decline dates are based on the MSCI World Index and assume 100% recovery.
Returns are in U.S. dollars with gross dividends reinvested.
The fund's returns are calculated at net asset value with reinvestment of all
distributions.
[End Sidebar]
With intensive research, Capital Research seeks these better yields on a
company-by-company basis. German telecommunications provider Mannesmann,
operator of one of the world's leading cellular telephone networks, is one of
your fund's largest holdings. Our global team of investment professionals took
a good look at Mannesmann when the company entered a joint venture with U.S.
mobile telephone operator AirTouch, which has since merged with Vodafone. One
consideration was Mannesmann's history of dividend payments. Brad Vogt, a
telecommunications analyst based in our Washington, D.C., office, found that
Mannesmann had an excellent record of paying attractive dividends, and that
payments were likely to increase with earnings growth. Indeed, in 1999
Mannesmann raised its dividend by 20%, marking the fifth consecutive year the
company raised its dividend by more than 10%.
A Smoother Path
For investors, the world keeps getting smaller. Even as world economies become
more interdependent and inter-related, however, stock markets around the world
still move in different directions and at different paces. Experience shows
that global diversification often can help smooth the effect of market
fluctuations on investors' portfolios. Capital World Growth and Income Fund's
global diversification has helped the fund hold up better when the U.S. market
plunges. When the Standard & Poor's 500 Composite Index fell by 11.8% between
July 16 and October 15, 1999, for instance, your fund recorded a far less
severe 3.5% decline.* As you can also see from the table at left, in the 12
MSCI World Index declines of 5% or more since your fund's inception, Capital
World Growth and Income Fund held up better than this benchmark all but two
times, reflecting the value of the fund's growth and income objectives.
*Index and fund results calculated with dividends reinvested.
[Begin Sidebar]
Best Markets in Past 10 Calendar Years
<TABLE>
<CAPTION>
Best Best
developed developing U.S.
market market
<S> <C> <C> <C> <C> <C>
'99 Finland 153% Turkey 252% 22%
'98 Finland 123 South Korea 141 31
'97 Switzerland 45 Turkey 118 34
'96 Spain 41 Venezuela 131 24
'95 Switzerland 45 Israel 24 38
'94 Finland 52 Brazil 66 2
'93 Hong Kong 117 Poland 754 10
'92 Hong Kong 32 Jordan 40 7
'91 Hong Kong 50 Argentina 405 31
'90 U.K. 10 Greece 90 -2
</TABLE>
Source: Total returns for MSCI market indexes in U.S.-dollar terms, with gross
dividends reinvested.
[End Sidebar]
What's more, while the U.S. market has been strong for years, it has rarely
been the leading stock market in any single year. The most rewarding equity
markets have almost always been abroad. While the U.S. market returned an
attractive 22% in 1999, for instance, the leading developed market was Finland,
which posted a remarkable 153%, and the strongest developing market was Turkey
(up 252%), as measured by MSCI. The table at left shows the trend over the past
10 years. Your fund's global mandate means shareholders are far more likely to
take part in the gains of the leading markets in any year than their
U.S.-focused counterparts.
This is especially true for investors who share Capital Research's focus on the
long term. Consider this example: From 1994 to 1998, many Americans, tracking
the often remarkable returns of U.S. markets, were satisfied to keep their
money in the United States, arguing that a stake in U.S. companies with
profitable overseas operations was the only "foreign" element any portfolio
needed. During that period, such investors may have done quite well. But if
they stuck to their
U.S.-only strategy in 1999, they missed out on the superior returns posted by
many of the Asian and Latin American stock markets in the first half of 1999.
In addition, while many European markets have posted modest returns this year,
those who did not invest in Europe in the past five years would have missed out
on an average gain of nearly 20% a year as measured by MSCI - quite respectable
by any measure.
[photos: currency, flags, workplace]
A Sound Course
All markets have their ups and downs. The wisest path, we believe, is to remain
committed to our investment goals and strategy, riding out the tougher periods
and focusing on the long term. We comb the world for opportunities, constantly
monitoring any developments that might affect the stocks in which your fund is
invested. We add new holdings to the fund's portfolio only after painstaking
research.
Since it began in 1993, Capital World Growth and Income Fund has brought the
benefits of international diversification to nearly 400,000 investors while
seeking income as well as growth. We remain confident that a broad horizon is
the optimal way to find the best opportunities in the world today.
[Begin Sidebar]
Where the Fund's Assets Were Invested
Percent by country as of 11/30/99
<TABLE>
<CAPTION>
<S> <C>
The Americas 37.0%
United States 28.9
Canada 5.1
Mexico 1.2
Argentina 1.1
Other Americas .7
Europe 36.1%
United Kingdom 10.9
Germany 4.7
Netherlands 4.2
Italy 3.9
France 2.4
Sweden 2.3
Spain 1.4
Denmark 1.3
Ireland 1.1
Other Europe 3.9
Asia/Pacific 19.8%
Japan 9.6
Australia 4.1
Hong Kong 2.0
Other Asia/Pacific 4.1
Other 1.0%
South Africa .6
Supranational .4
Bonds, Cash
& Equivalents 6.1%
</TABLE>
[End Sidebar]
What Makes the American Funds Different?
[Begin Sidebar]
As a shareholder in Capital World Growth and Income Fund, you are also a member
of the American Funds Group, the nation's third-largest mutual fund family. You
won't find us advertised, yet thousands of financial advisers recommend the
American Funds for their clients' serious money - money set aside for
education, a home, retirement and other important dreams.
[End Sidebar]
What the 29 funds in our group have in common is a commitment to your best
interests and the proven approach of our investment adviser, Capital Research
and Management Company. In business since 1931, Capital's calling cards
include:
A long-term, value-oriented approach. Rather than follow short-term fads, we
rely on our own intensive research to find well-managed companies with
reasonably priced shares and solid, long-term potential. Despite our size, we
offer relatively few funds compared with many large fund families, allowing us
to maintain a careful focus on our objectives and to benefit from economies of
scale.
A global perspective. We opened our first overseas office in 1962, well before
most mutual funds began investing internationally. Today, the American Funds
draw on one of the industry's most globally integrated research networks.
Capital Research spends substantial resources getting to know companies and
industries around the world.
A multiple portfolio counselor system. More than 40 years ago, we developed a
unique strategy for managing investments that blends teamwork with individual
accountability. Every American Fund is divided among a number of portfolio
counselors, each of whom manages his or her portion independently, within each
fund's objectives; in most cases, research analysts manage a portion as well.
Over time, this method has contributed to consistency of results and continuity
of management.
Experienced investment professionals. Nearly 90% of the portfolio counselors
who serve the American Funds were in the investment business before the stock
market decline in October 1987. Long tenure and experience through a variety of
market conditions mean we aren't "practicing" with your money.
A commitment to low operating expenses. You can't control market returns, but
you can control what you invest in and how much you pay to own it. American
Funds provide exceptional value for shareholders, with operating expenses that
are among the lowest in the mutual fund industry. Our portfolio turnover rate
is low as well, keeping transaction costs and tax consequences contained.
A Portfolio for Every Investor
Most financial advisers suggest that investors balance their portfolios by
investing across several types of investments. Which mix is right for you? That
depends on a number of things - including your risk tolerance, investment time
horizon and financial goals. The American Funds Group offers 29 funds with an
array of investment objectives to help you and your financial adviser build a
portfolio specifically tailored to your needs.
Growth Funds
Emphasis on long-term growth through stocks
AMCAP Fund(r)
EuroPacific Growth Fund(r)
The Growth Fund of America(r)
The New Economy Fund(r)
New Perspective Fund(r)
New World Fund(sm)
SMALLCAP World Fund(r)
Growth-and-Income Funds
Emphasis on long-term growth and dividends through stocks
American Mutual Fund(r)
Capital World Growth and Income Fund(sm)
Fundamental Investors(sm)
The Investment Company of America(r)
Washington Mutual Investors Fund(sm)
Equity-Income Funds
Emphasis on above-average income and growth through stocks and/or bonds
Capital Income Builder(r)
The Income Fund of America(r)
Balanced Fund
Emphasis on long-term growth and current income through stocks and bonds
American Balanced Fund(r)
Income Funds
Emphasis on current income through bonds
American High-Income Trust(sm)
The Bond Fund of America(sm)
Capital World Bond Fund(r)
Intermediate Bond Fund of America(r)
U.S. Government Securities Fund(sm)
Tax-Exempt Income Funds
Emphasis on tax-free current income through municipal bonds
American High-Income Municipal Bond Fund(r)
Limited Term Tax-Exempt Bond Fund of America(sm)
The Tax-Exempt Bond Fund of America(r)
State-specific tax-exempt funds
The Tax-Exempt Fund of California(r)
The Tax-Exempt Fund of Maryland(r)
The Tax-Exempt Fund of Virginia(r)
Money Market Funds
Seek stable monthly income through money market instruments
The Cash Management Trust of America(r)
The Tax-Exempt Money Fund of America(sm)
The U.S. Treasury Money Fund of America(sm)
We also offer a full line of retirement plans and variable annuities.
FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE FUNDS, INCLUDING CHARGES AND
EXPENSES, PLEASE OBTAIN A PROSPECTUS FROM YOUR FINANCIAL ADVISER, DOWNLOAD ONE
FROM OUR WEB SITE AT WWW.AMERICANFUNDS.COM, OR PHONE THE FUND'S TRANSFER AGENT,
AMERICAN FUNDS SERVICE COMPANY, AT 800/421-0180. PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE YOU INVEST OR SEND MONEY. FOR MORE INFORMATION, ASK YOUR
FINANCIAL ADVISER FOR A COPY OF A PORTFOLIO FOR EVERY INVESTOR.
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CAPITAL WORLD GROWTH AND INCOME FUND
Investment Portfolio November 30, 1999
INVESTMENT MIX
Largest Industry Holdings
Equity Securities 93.9%
Diversified Telecommunication Services 12.8
Banking 10.3
Health & Personal Care 4.8
Utilities: Electric & Gas 4.7
Electrical & Electronics 4.6
Other Industries 56.7
Bonds and Notes 1.5
Cash & Equivalents 4.6
Largest Individual Percent of
Equity Holdings Country Net Assets
Telecom Italia Italy 2.63%
Mannesmann Germany 2.10
Telefonaktiebolaget LM Ericsson Sweden 1.40
Northeast Utilities USA 1.38
AstraZeneca United Kingdom 1.32
ING Groep Netherlands 1.15
Williams Companies USA 1.13
Micron Technology USA 1.07
Telefonos de Mexico Mexico 1.06
Dixons Group United Kingdom 1.04
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Capital World Growth and Income Fund
Investment Portfolio, November 30, 1999
Equity Securitites Shares or Market Percent
(common and preferred stocks and Principal Value Of Net
convertible debentures) Amount (Millions) Assets
- -------------------------------------------- -------- -------- --------
DIVERSIFIED TELECOMMUNICATION SERVICES - 12.76%
Telecom Italia SpA, nonconvertible savings shares (Italy) 30,651,752 $165.166
Telecom Italia SpA 9,008,775 98.520 2.63%
Telefonos de Mexico, SA de CV, Class L(ADR)(Mexico) 1,032,300 95.552
Telefonos de Mexico, SA de CV 4.25% convertible debentures 2004 $ 9,220,000 10.522 1.06
Deutsche Telekom AG(Germany) 1,779,800 101.890 1.02
Tele Danmark AS(Denmark) 759,800 48.985
Tele Danmark AS, Class B(ADR) 1,130,200 36.096 .85
Telecom Corp. of New Zealand Ltd.(New Zealand)(1) 6,963,810 29.785
Telecom Corp. of New Zealand Ltd. 6,465,800 27.655
Telecom Corp. of New Zealand Ltd.(ADR) 720,700 24.143 .82
Koninklijke PTT Nederland NV(Netherlands) 1,296,946 72.223 .72
Telefonica, SA(Spain)(2) 3,375,578 70.020 .70
U S WEST, Inc.(USA) 1,036,500 64.328 .64
Telecom Argentina STET-France Telecom SA, 1,911,700 56.156 .56
Class B(ADR)(Argentina)
British Telecommunications PLC(United Kingdom) 2,000,000 42.464 .42
Korea Telecom Corp.(ADR)(South Korea)(2) 744,500 39.458 .39
Portugal Telecom, SA(Portugal)(2) 3,975,000 38.227 .38
France Telecom SA(France) 300,000 34.772 .35
Embratel Participacoes SA(ADR)(Brazil) 1,500,000 27.938 .28
Nortel Inversora SA, preferred, Class B(ADR)(Argentina) 1,465,000 27.469 .27
Hellenic Telecommunications Organization SA(Greece) 1,234,000 26.451 .26
Telefonica de Argentina SA, Class B(ADR)(Argentina) 1,000,000 26.313 .26
eircom PLC(Ireland) 6,000,000 23.866 .24
Swisscom AG(Switzerland) 68,126 23.121 .23
Teleglobe Inc.(Canada) 808,100 20.058 .20
AT&T Corp.(USA) 350,000 19.556 .20
Philippine Long Distance Telephone Co.(ADR)(Philippines) 750,000 15.375 .15
Nippon Telegraph and Telephone Corp.(Japan) 534 9.620 .10
BCT.TELUS Communications Inc.(Canada) 104,934 2.162 .02
Compania de Telecomunicaciones de Chile SA(ADR)(Chile) 22,900 .421 .01
BANKING - 10.26%
Australia and New Zealand Banking Group Ltd.(Australia) 9,528,232 68.613 .69
Toronto-Dominion Bank(Canada) 2,515,500 60.592 .61
ABN AMRO Holding NV(Netherlands) 2,486,414 60.517 .60
Royal Bank of Canada(Canada) 1,259,200 56.817 .57
First Union Corp.(USA) 1,329,700 51.443 .51
Westpac Banking Corp.(Australia) 7,217,400 48.641 .49
Washington Mutual, Inc.(USA) 1,630,000 47.270 .47
Bank Hapoalim Ltd.(Israel) 17,000,000 44.897 .45
Wells Fargo & Co.(USA) 900,000 41.850 .42
Siam Commercial Bank PCL 5.25% convertible 28,600,000 30.258
preferred(Thailand)(2)
Siam Commercial Bank PCL warrants, expire 2002(2) 28,600,000 9.719 .40
Safra Republic Holdings SA(Luxembourg) 532,000 38.304 .38
Hang Seng Bank Ltd.(Hong Kong) 3,300,000 36.650 .37
Commonwealth Bank of Australia(Australia) 2,139,172 35.331 .35
Banque Nationale de Paris(France) 347,500 31.844
Banque Nationale de Paris, guaranteed value 97,500 .418 .32
certificates, expire 2002(2)
Bank of the Philippine Islands(Philippines) 12,154,520 32.095 .32
National Australia Bank Ltd.(Australia) 2,058,227 29.748 .30
Sakura Bank, Ltd.(Japan) 4,000,000 29.730 .30
Asahi Bank, Ltd.(Japan) 4,150,000 29.211 .29
Unidanmark A/S, Class A(Denmark) 380,000 28.822 .29
Bank of Scotland(United Kingdom) 2,214,424 26.350 .26
SunTrust Banks, Inc.(USA) 365,000 25.504 .25
Bank of Nova Scotia(Canada) 1,128,400 24.347 .24
Fuji Bank, Ltd.(Japan) 1,700,000 20.451 .20
Bank Leumi le-Israel B.M.(Israel) 10,250,000 18.896 .19
BANK ONE CORP.(USA) 484,000 17.061 .17
Chase Manhattan Corp.(USA) 200,000 15.450 .15
Wilmington Trust Corp.(USA) 300,000 15.112 .15
National Bank of Canada(Canada) 1,076,100 12.632 .13
Unibanco-Uniao de Bancos Brasileiros SA, units(GDR)(Brazil) 480,000 11.310 .11
Sanwa International Finance (Bermuda) Trust 1.25% preferred 849,000,000 9.089 .09
share units 2005(Japan)(1)
Skandinaviska Enskilda Banken AB, Class A(Sweden) 800,000 7.621
Skandinaviska Enskilda Banken AB, rights 1999(2) 105,000 .109 .08
Dah Sing Financial Holdings Ltd.(Hong Kong) 1,500,000 6.355 .06
Banco de Galicia y Buenos Aires SA, Class B(ADR)(Argentina) 222,081 4.539 .05
HEALTH & PERSONAL CARE - 4.84%
AstraZeneca PLC(United Kingdom) 2,944,833 131.684 1.32
Elan Corp., PLC(ADR)(Ireland)(2) 2,360,000 64.605
Elan Finance Corp. 0.00% convertible debentures 2018(1) $29,000,000 14.863
Athena Neurosciences, Inc. 4.75% convertible debentures 2004 $12,000,000 12.090 .92
Glaxo Wellcome PLC(United Kingdom) 2,000,000 60.976 .61
Pfizer Inc(USA) 1,614,000 58.407 .58
Forest Laboratories, Inc.(USA)(2) 750,000 38.391 .38
Merck & Co., Inc.(USA) 289,400 22.718 .23
Kimberly-Clark Corp.(USA) 300,000 19.163 .19
PLIVA d.d.(GDR)(Croatia) 1,500,000 18.225 .18
Luxottica Group SpA(ADR)(Italy) 1,040,700 18.212 .18
Eli Lilly and Co.(USA) 200,000 14.350 .14
Fujisawa Pharmaceutical Co. Ltd.(Japan) 300,000 8.136 .08
Celera Genomics Group(USA)(2) 50,000 3.062 .03
UTILITIES: ELECTRIC & GAS - 4.74%
Northeast Utilities(USA) 6,525,000 137.841 1.38
Williams Companies, Inc.(USA) 3,370,000 113.737 1.13
Columbia Energy Group(USA) 885,000 55.534 .55
El Paso Energy Corp.(USA) 1,014,100 39.043 .39
Niagara Mohawk Holdings, Inc.(USA)(2) 1,850,000 27.750 .28
National Power PLC(United Kingdom) 3,830,000 24.092 .24
MidAmerican Energy Holdings Co.(USA)(2) 500,000 16.719 .17
Scottish and Southern Energy PLC(United Kingdom) 2,079,138 15.135 .15
Kinder Morgan, Inc.(USA) 547,500 11.121 .11
Australian Gas Light Co.(Australia) 1,781,610 9.935 .10
Empresa Nacional de Electricidad SA(ADR)(Chile) 598,487 8.005 .08
National Fuel Gas Co.(USA) 127,000 6.358 .06
NICOR Inc.(USA) 175,000 6.070 .06
Scottish Power PLC(United Kingdom) 400,000 3.544 .04
ELECTRICAL & ELECTRONICS - 4.55%
Telefonaktiebolaget LM Ericsson, Class B(Sweden) 2,600,000 126.132
Telefonaktiebolaget LM Ericsson, Class B(ADR) 300,000 14.456 1.40
Toshiba Corp.(Japan) 8,000,000 59.146 .59
Siemens AG(Germany) 555,000 55.944 .56
Premier Farnell PLC(United Kingdom) 7,400,000 40.165 .40
Hitachi, Ltd.(Japan) 2,500,000 34.702 .35
NEC Corp.(Japan) 1,300,000 30.523 .31
Chartered Semiconductor Manufacturing Ltd(ADR)(Singapore)(2) 569,100 30.305 .30
Elektrim SA 3.75% convertible debentures 2004(Poland) EURO17,000,000 13.866
Elektrim SA(2) 1,500,000 11.213
Elektrim SA 2.00% convertible debentures 2004 DM9,000,000 4.078 .29
Matsushita Communication Industrial Co., Ltd.(Japan) 100,000 19.295 .19
General Electric Co.(USA) 125,000 16.250 .16
WIRELESS TELECOMMUNICATION SERVICES - 4.39%
Mannesmann AG(ADR)(Germany) 938,250 197.033
Mannesmann AG 62,500 12.990 2.10
NTT Mobile Communications Network, Inc.(Japan) 2,165 76.301 .76
Telecom Italia Mobile SpA, savings shares(Italy) 12,565,800 48.565
Telecom Italia Mobile SpA 2,224,200 17.354 .66
TELECEL - Comunicacoes Pessoais, SA(Portugal) 1,780,000 23.553 .23
Telesp Celular Participacoes SA, preferred nominative(Brazil) 347,480,700 16.833
Telesp Celular Participacoes SA, ordinary nominative 32,000,000 .959 .18
Nextel Communications, Inc., Series D, 13.00% 15,409 16.334 .16
preferred 2009(USA)(4)
SmarTone Telecommunications Holdings Ltd.(Hong Kong - 2,000,000 9.812 .10
Incorporated in Bermuda)
Mobistar NV(Belgium)(2) 150,000 7.142 .07
DDI Corp.(Japan) 500 6.940 .07
Crown Castle International Corp. 12.75% preferred 2010(USA)(4) 5,493 5.715 .06
DATA PROCESSING & REPRODUCTION - 3.52%
Computer Associates International, Inc.(USA) 1,250,000 81.250 .81
Fujitsu Ltd.(Japan) 1,000,000 35.637
Fujitsu Ltd., warrants, expire 2000(2) 3,170 30.432 .66
3Com Corp.(USA)(2) 1,600,000 63.700 .64
Microsoft Corp.(USA)(2) 668,000 60.819 .61
Oracle Corp.(USA)(2) 770,000 52.216 .52
Hewlett-Packard Co.(USA) 300,000 28.462 .28
BEVERAGES & TOBACCO - 3.31%
Imperial Tobacco Ltd.(United Kingdom) 7,290,295 76.122 .76
Foster's Brewing Group Ltd.(Australia) 22,950,000 61.620 .62
Philip Morris Companies Inc.(USA) 2,300,000 60.519 .60
Gallaher Group PLC(United Kingdom) 9,500,000 50.047 .50
R.J. Reynolds Tobacco Holdings, Inc.(USA) 1,975,000 42.092 .42
Swedish Match AB(Sweden) 4,000,000 14.301 .14
Coca-Cola West Japan Co. Ltd.(Japan) 200,000 8.072 .08
Coca-Cola Amatil Ltd.(Australia) 1,951,629 6.126 .06
UST Inc.(USA) 200,000 5.325 .05
Coca-Cola Beverages PLC(United Kingdom)(2) 2,006,362 3.940 .04
Asahi Breweries, Ltd.(Japan) 318,000 3.772 .04
MERCHANDISING - 3.31%
Dixons Group PLC(United Kingdom) 4,890,000 104.126 1.04
Loblaw Companies Ltd.(Canada) 1,480,000 34.645 .34
MYCAL Corp.(Japan) 5,678,000 27.725 .28
Tesco PLC(United Kingdom) 9,786,721 26.404 .26
Limited Inc.(USA) 513,700 21.800 .22
Safeway PLC(United Kingdom) 6,500,000 19.276 .19
J.C. Penney Co., Inc.(USA) 800,000 17.850 .18
Albertson's, Inc.(USA) 554,400 17.706 .18
Kingfisher PLC(United Kingdom) 1,696,431 15.789 .16
Lowe's Companies, Inc.(USA) 300,000 14.944 .15
Dollar General Corp.(USA) 510,000 12.495 .12
Coles Myer Ltd.(Australia) 1,550,882 7.900 .08
Woolworths Ltd.(Australia) 2,300,385 7.777 .08
George Weston Ltd.(Canada) 83,300 2.798 .03
MULTI-INDUSTRY - 3.27%
Orkla AS, Class A(Norway) 1,581,714 24.329
Orkla AS, Class B 1,404,000 21.770 .46
Thyssen Krupp AG(Germany)(2) 1,635,000 42.972 .43
Williams PLC(United Kingdom) 8,000,000 41.443 .41
Invensys PLC(United Kingdom) 7,980,000 37.071 .37
Stinnes AG(Germany)(2) 1,800,000 34.983 .35
Swire Pacific Ltd., Class A(Hong Kong) 4,000,000 22.972 .23
JG Summit Holdings, Inc. 3.50% convertible $26,000,000 20.020 .20
debentures 2003(Philippines)
Lend Lease Corp. Ltd. (Australia) 1,339,078 17.094 .17
Ayala Corp. 3.00% convertible debentures 2000(Philippines) $10,000,000 12.525 .12
TI Group PLC(United Kingdom) 1,790,400 12.262 .12
AlliedSignal Inc.(USA) 200,000 11.963 .12
Harsco Corp.(USA) 363,600 10.840 .11
Canadian Pacific Ltd.(Canada) 400,000 8.675 .09
Berkshire Hathaway Inc., Class A(USA)(2) 98 5.615 .06
FMC Corp.(USA)(2) 70,000 3.395 .03
ELECTRONIC COMPONENTS - 3.24%
Micron Technology, Inc.(USA)(2) 1,600,000 107.400 1.07
Advanced Micro Devices, Inc.(USA)(2) 2,500,000 70.625 .71
Hoya Corp.(Japan) 430,000 31.325 .31
Murata Manufacturing Co., Ltd.(Japan) 180,000 29.982 .30
Rohm Co., Ltd.(Japan) 100,000 27.249 .27
Corning Inc.(USA) 203,100 19.028 .19
NatSteel Electronics Ltd. 1.50% convertible $18,000,000 18.765 .19
debentures 2004(Singapore)(1)
Intel Corp.(USA) 200,000 15.338 .15
Altera Corp.(USA)(2) 100,000 5.388 .05
FOREST PRODUCTS & PAPER - 3.14%
Fort James Corp.(USA) 2,100,000 60.375 .60
Georgia-Pacific Corp., Georgia-Pacific Group(USA) 800,000 31.850
Georgia-Pacific Corp., Timber Group 750,000 18.609 .50
Smurfit-Stone Container Corp.(USA)(2) 2,471,300 47.418 .47
Metsa-Serla Oy 4.375% convertible debentures 2002(Finland) $30,000,000 29.100 .29
Bowater Inc.(USA) 500,000 24.500 .25
International Paper Co.(USA) 445,560 23.253 .23
Consolidated Papers, Inc.(USA) 750,000 21.938 .22
Champion International Corp.(USA) 330,000 18.294 .18
Kimberly-Clark de Mexico, SA de CV(Mexico) 4,400,000 16.520 .17
Sonoco Products Co.(USA) 577,500 13.283 .13
UPM-Kymmene Corp.(Finland) 287,000 9.595 .10
BROADCASTING & PUBLISHING - 3.11%
Telefonica Publicidad e Informacion, SA(Spain)(2) 2,178,200 66.023 .66
AT&T Corp. - Liberty Media Group(USA)(2) 1,500,000 62.719 .63
Viacom Inc., Class B(USA)(2) 775,000 38.556 .38
Time Warner Inc.(USA) 615,100 37.944 .38
Mediaset SpA(Italy) 2,200,000 25.132 .25
Seat Pagine Gialle SpA(Italy) 6,000,000 12.150
Seat Pagine Gialle SpA, savings shares 7,000,000 8.106 .20
ProSieben Media AG(Germany) 400,000 18.617 .19
United Pan-Europe Communications NV(Netherlands)(2) 175,600 17.241 .17
News Corp. Ltd., preferred(Australia) 1,942,760 15.116 .15
CANAL+(France) 118,712 9.814 .10
BUSINESS SERVICES - 2.74%
TNT Post Groep(Netherlands) 3,121,547 79.842 .80
Hays PLC(United Kingdom) 2,560,000 39.029 .39
Brambles Industries Ltd.(Australia) 978,354 26.876 .27
United Utilities PLC(United Kingdom) 2,591,910 24.206 .24
ISS-International Service System A/S, Class B(Denmark)(2) 362,500 21.112 .21
Thames Water PLC(United Kingdom) 1,266,667 18.059 .18
Omnicom Group Inc.(USA) 200,000 17.625 .18
Hyder PLC(United Kingdom) 1,562,326 10.600 .10
Robert Half International Inc.(USA)(2) 300,000 8.400 .08
Cendant Corp. 7.50% FELINE PRIDES convertible preferred(USA) 300,000 8.025 .08
American Water Works Co., Inc.(USA) 300,000 7.669 .08
United Parcel Service, Inc., Class B(USA) 113,500 7.498 .07
Hutchison Delta Finance Ltd. 7.00% convertible debentures 2002 $6,000,000 6.000 .06
(Hong Kong - Incorporated in Cayman Islands)(1)(3)
ENERGY SOURCES - 2.39%
Shell Canada Ltd., Class A(Canada) 4,338,100 86.833 .87
TOTAL FINA SA, Class B(France) 369,594 49.165 .49
"Shell" Transport and Trading Co., PLC 400,000 18.250
(New York Registered Shares)(United Kingdom)
Royal Dutch Petroleum Co.(Netherlands) 100,000 5.884
Royal Dutch Petroleum Co.(New York Registered Shares) 80,000 4.640 .28
Norsk Hydro AS(Norway) 710,000 27.743 .28
Petro-Canada(Canada) 1,000,000 13.977 .14
Broken Hill Proprietary Co. Ltd.(Australia) 1,156,933 12.704 .13
Devon Energy Corp.(USA) 250,000 8.813 .09
Esso SA Francaise(France) 78,567 5.934 .06
Unocal Corp.(USA) 160,000 5.310 .05
INSURANCE - 2.27%
ING Groep NV(Netherlands) 2,054,024 115.520 1.15
Allstate Corp.(USA) 650,000 17.022 .17
Clarica Life Insurance Co.(Canada) 1,000,000 16.726 .17
PartnerRe Holdings Ltd.(Singapore - Incorporated in Bermuda) 550,000 16.156 .16
Independent Insurance Group PLC(United Kingdom) 3,460,000 15.411 .15
Sumitomo Marine & Fire Insurance Co., Ltd.(Japan) 2,000,000 14.156 .14
QBE Insurance Group Ltd.(Australia) 3,000,000 11.957 .12
Mercury General Corp.(USA) 425,000 9.934 .10
Fairfax Financial Holdings Ltd.(Canada)(2) 35,300 5.198
Fairfax Financial Holdings Ltd., subscription receipts(2) 11,000 1.620 .07
Chiyoda Fire & Marine Insurance Co., Ltd.(Japan) 1,200,000 3.922 .04
REAL ESTATE - 2.19%
Sun Hung Kai Properties Ltd.(Hong Kong) 6,360,000 58.146 .58
AMB Property Corp.(USA) 1,400,000 28.000 .28
Hysan Development Co. Ltd.(Hong Kong) 21,482,553 25.588 .26
Amoy Properties Ltd.(Hong Kong) 27,000,000 20.860 .21
Unibail(France) 116,300 15.108
Unibail, warrants, expire 2004(2) 116,300 .488 .16
IndyMac Mortgage Holdings, Inc.(USA) 1,300,000 14.381 .14
Hongkong Land Holdings Ltd.(Hong Kong - 9,999,700 14.100 .14
Incorporated in Bermuda)
CarrAmerica Realty Corp.(USA) 450,000 9.337 .09
New World China Land Ltd.(China - Incorporated 20,800,000 9.240 .09
in the Cayman Islands)(2)
Security Capital Global Realty(Luxembourg)(1)(2)(3) 450,000 8.644 .09
SM Prime Holdings, Inc.(Philippines) 52,885,000 8.405 .08
Meditrust Corp.(USA) 1,030,339 6.762 .07
METALS: NONFERROUS - 2.18%
Freeport-McMoRan Copper & Gold Inc., Class B(USA)(2) 3,269,800 51.704 .52
Alcoa Inc.(USA) 650,000 42.575 .42
Billiton PLC(United Kingdom) 8,200,000 39.565 .39
KGHM Polska Miedz(GDR)(Poland) 2,874,000 37.218 .37
Gencor Ltd.(South Africa) 8,000,000 30.563 .31
Pechiney, Class A(France) 299,300 17.345 .17
INDUSTRIAL COMPONENTS - 2.02%
THK Co., Ltd.(Japan) 2,280,000 89.108 .89
Federal-Mogul Corp.(USA) 1,045,000 23.317
Federal-Mogul Corp. 7.00% convertible preferred 300,000 10.575 .34
Autoliv, Inc.(Sweden) 1,095,000 32.838 .33
Tomkins PLC(United Kingdom) 5,250,000 18.288 .18
Morgan Crucible Co. PLC(United Kingdom) 2,161,523 9.282 .09
Dana Corp.(USA) 300,000 8.325 .08
Lear Corp.(USA)(2) 230,000 7.604 .08
Delphi Automotive Systems Corp.(USA) 209,679 3.303 .03
CHEMICALS - 1.79%
Praxair, Inc.(USA) 975,800 43.545 .43
Monsanto Co.(USA) 725,000 30.586 .31
DSM NV(Netherlands) 813,423 27.850 .28
Airgas, Inc.(USA)(2) 2,367,100 23.079 .23
BOC Group PLC(United Kingdom) 1,000,000 20.720 .21
Sherwin-Williams Co.(USA) 572,000 12.262 .12
Millennium Chemicals Inc.(USA) 469,500 9.185 .09
L'Air Liquide(France) 57,555 8.450 .08
Rhone-Poulenc-Rhodia 3.25% convertible preferred(France)(2) 175,000 4.117 .04
FOOD & HOUSEHOLD PRODUCTS - 1.51%
Reckitt & Colman PLC(United Kingdom) 3,340,687 40.148 .40
Nabisco Group Holdings Corp.(formerly RJR Nabisco 3,025,000 34.976 .35
Holdings Corp.)(USA)
Uni-Charm Corp.(Japan) 400,000 24.414 .24
Keebler Foods Co.(USA)(2) 675,000 18.605 .19
Sara Lee Corp.(USA) 500,000 12.125 .12
Nestle SA(Switzerland) 6,452 11.606 .12
Groupe Danone(France) 40,000 9.276 .09
GOLD MINES - 1.43%
Barrick Gold Corp.(Canada) 3,000,000 54.000 .54
Homestake Mining Co.(USA) 2,500,000 20.625 .21
Normandy Mining Ltd.(Australia) 25,000,000 17.987
Normandy Mining Ltd., warrants, expire 2001(2) 30,000,000 1.260 .19
Newcrest Mining Ltd.(Australia)(2) 6,000,000 19.139 .19
Gold Fields Ltd.(South Africa) 3,818,385 17.153 .17
Anglogold Ltd.(South Africa) 250,000 12.748 .13
FINANCIAL SERVICES - 1.40%
Household International, Inc.(USA) 1,485,000 58.750 .59
ORIX Corp.(Japan) 186,000 22.855
ORIX Corp.0.375% convertible debentures 2005 $400,000,000 5.080 .28
Shohkoh Fund & Co., Ltd.(Japan) 35,490 19.251 .19
Nichiei Co., Ltd.(Japan) 560,600 13.852 .14
OM Gruppen AB(Sweden) 790,000 12.078 .12
Bell Atlantic Financial Services, Inc. 4.25% convertible $5,000,000 5.438 .05
debentures 2005(USA)
Associates First Capital Corp., Class A(USA) 70,000 2.328 .02
Freddie Mac(USA) 30,000 1.481 .01
AUTOMOBILES - 1.28%
Volvo AB, Class B(Sweden) 2,300,000 55.857 .56
Suzuki Motor Corp.(Japan) 2,100,000 30.989 .31
Renault SA(France) 450,000 19.771 .20
Bayerische Motoren Werke AG(Germany) 405,600 10.823 .11
Honda Motor Co., Ltd.(Japan) 250,000 10.337 .10
APPLIANCES & HOUSEHOLD DURABLES - 1.09%
Sony Corp.(Japan) 350,000 65.121 .65
Newell Rubbermaid Inc.(USA) 890,000 29.203 .29
Koninklijke Philips Electronics NV(Netherlands) 120,000 14.604 .15
LEISURE & TOURISM - 0.92%
Seagram Co. Ltd.(Canada) 925,000 40.295
Seagram Co. Ltd. 7.50% ACES convertible preferred 225,000 10.238 .50
AirTours PLC 5.75% convertible subordinated notes GBP12,900,000 21.627 .22
2004(United Kingdom)
Village Roadshow Ltd., Class A, 5.50% preferred(Australia) 2,945,000 5.550
Village Roadshow Ltd., Class A, 5.50% preferred(1) 2,623,574 4.944
Village Roadshow Ltd. 622,813 1.247 .12
NCL Holding ASA(Norway)(2) 3,044,200 8.572 .08
AEROSPACE & MILITARY TECHNOLOGY - 0.66%
Bombardier Inc., Class B(Canada) 2,210,800 43.802 .44
Lockheed Martin Corp.(USA) 1,100,000 21.862 .22
MACHINERY & ENGINEERING - 0.49%
Fuji Machine Mfg. Co., Ltd.(Japan) 620,000 36.377 .36
AIDA Engineering, Ltd.(Japan) 4,065,000 12.926 .13
RECREATION & OTHER CONSUMER PRODUCTS - 0.44%
Nintendo Co., Ltd.(Japan) 175,000 29.304 .29
EMI Group PLC(United Kingdom) 1,865,067 15.367 .15
METALS: STEEL - 0.44%
Usinor Sacilor(France) 2,200,000 33.674 .33
Corus Group PLC(United Kingdom) 4,550,600 9.262 .09
Ispat Industries Ltd., 3.00% convertible debentures 2001(India) $2,800,000 .616 .01
N.T.S. Steel Group PCL 4.00% convertible debentures $6,670,000 .467 .01
2008(Thailand)(2)
HEALTH CARE PROVIDERS & SERVICES - 0.43%
Quintiles Transnational Corp. 4.25% convertible $15,800,000 15.395 .15
debentures 2000(USA)(1)
Columbia/HCA Healthcare Corp.(USA) 550,000 14.988 .15
Cintas Corp.(USA) 285,000 13.092 .13
ENERGY EQUIPMENT - 0.35%
Baker Hughes Inc.(USA) 980,300 24.753 .25
Schlumberger Ltd.(Netherlands Antilles) 165,000 9.910 .10
BUILDING MATERIALS & COMPONENTS - 0.19%
BPB PLC(United Kingdom) 3,607,900 18.834 .19
ELECTRONIC INSTRUMENTS - 0.18%
PE Biosystems Group(USA) 220,000 17.958 .18
TRANSPORTATION: RAIL & ROAD - 0.11%
CSX Corp.(USA) 300,000 10.669 .11
TRANSPORTATION: AIRLINES - 0.09%
Air New Zealand Ltd., Class B(New Zealand) 6,320,000 9.193 .09
WHOLESALE & INTERNATIONAL TRADE - 0.08%
Ingram Micro Inc. 0.00% convertible debentures 2018(USA) $26,375,000 8.473 .08
IT CONSULTING & SERVICES - 0.05%
Electronic Data Systems Corp.(USA) 75,000 4.823 .05
TEXTILES & APPAREL - 0.02%
Courtaulds Textiles PLC(United Kingdom) 1,641,500 2.018 .02
MISCELLANEOUS - 2.70%
Other equity securities in initial period of acquisition 270.933 2.70
TOTAL EQUITY SECURITIES (cost: $7,215.824 million) 9,407.477 93.88
---------- ----------
Principal
Amount
Bonds & Notes (Millions)
- -------------------------------------------- -------- -------- --------
INDUSTRIALS - 0.18%
Indah Kiat Finance Mauritius Ltd. 10.00% 2007 $11.650 8.301
Indah Kiat International Finance 8.875% 2000 2.290 2.112
Indah Kiat Global BD 12.50% 2006 1.000 .798 .11%
Container Corp. of America, Series A, 11.25% 2004 6.000 6.240
Container Corp. of America 9.75% 2003 1.000 1.020 .07
TELEPHONE - 0.04%
Netia Holdings BV 10.25% 2007 4.125 3.496 .04
FINANCIAL - 0.02%
APP Finance (VI) Mauritius Ltd. 11.75% 2005 2.800 2.282 .02
ARGENTINEAN GOVERNMENT - 0.37%
Argentina (Republic of) 11.375% 2017 21.000 19.687
Argentina (Republic of) 11.75% 2007 ARP8.000 7.061
Argentina (Republic of) 11.00% 2006 $7.000 6.702
Argentina (Republic of) 8.75% 2002 ARP4.000 3.471 .37
BRAZILIAN GOVERNMENT - 0.86%
Brazil (Federal Republic of), Bearer 8.00% 2014(4) 125.349 85.864 .86
---------- ----------
TOTAL BONDS & NOTES (cost: $129.819 million) 147.034 1.47
---------- ----------
Short-Term Securities
- -------------------------------------------- -------- -------- --------
CORPORATE SHORT-TERM NOTES - 3.97%
National Australia Funding (DE) Inc. 5.78%-5.86% 60.000 59.367 .59%
due 2/1-2/2/2000
British Telecommunications PLC 5.82%-5.83% due 2/4-2/11/2000 50.000 49.433 .49
KfW International Finance Inc. 5.31%-5.94% due 44.750 44.510 .44
12/14/1999-1/18/2000
UBS Finance Delaware LLC 5.33%-5.34% due 12/16/1999 39.000 38.903 .39
Telstra Corp. Ltd. 5.35%-5.88% due 12/3/1999-3/9/2000 38.800 38.462 .38
Internationale Nederlanden(U.S.)Funding Corp. 5.74%-5.91% 36.700 36.140 .36
due 2/25-3/20/2000
Lloyds TSB Bank PLC 5.36%-5.83% due 12/20/1999-2/1/2000 32.250 31.970 .32
Asset Securitization 5.93% due 2/23/2000(1) 25.700 25.338 .25
ANZ(DE)Inc. 5.32% due 12/7/1999 25.000 24.974 .25
Coca-Cola Co. 5.83% due 2/18/2000 25.000 24.678 .25
Xerox Capital(Europe)PLC 5.31%-5.70% due 12/1-12/15/1999 24.700 24.659 .25
FEDERAL AGENCY DISCOUNT NOTES - 0.54%
Freddie Mac 5.20%-5.46% due 12/1-12/17/1999 39.150 39.097 .39
Federal Home Loan Banks 5.20% due 12/22/1999 15.000 14.953 .15
NON-U.S. CURRENCY - 0.06%
New Taiwanese Dollar NT$193.964 6.138 .06
---------- ----------
TOTAL SHORT-TERM SECURITIES (cost: $459.283 million) 458.622 4.57
---------- ----------
TOTAL INVESTMENT SECURITIES (cost: $7,804.926 million) 10,013.133 99.92
Excess of cash and receivables over payables 8.511 .08
---------- ----------
NET ASSETS $10,021.644 100.00%
======= =======
(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) Valued under procedures approved by the Board of Directors.
(4) Payment in kind; the issuer has the option of paying
additional securities in lieu of cash.
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
The descriptions of the companies shown in the portfolio,
which were obtained from published reports and other sources
believed to be reliable, are supplemental and are not covered
by the Report of Independent Accountants.
See Notes to Financial Statements
</TABLE>
<TABLE>
<S> <C>
Equity Securities Added Equity Securities Eliminated
to the Portfolio Since May 31, 1999 from the Portfolio Since May 31, 1999
Airtours ADVANTEST
Albertson's AirTouch Communications
Autoliv Boeing
Bank Hapoalim CanWest Global Communications
Banque Nationale de Paris Cheung Kong (Holdings)
BCT.TELUS Communications Cie. de Saint-Gobain
Celera Genomics Group Compaq Computer
Chartered Semiconductor Manufacturing Corporacion Bancaria de Espana
Chiyoda Fire & Marine Insurance Corporacion Mapfre
Clarica Life Insurance Dynegy
Coca-Cola West Japan ENI SpA
Compania de Telecomunicaciones de Chile ForeningsSparbanken
Consolidated Papers General Motors
Dah Sing Financial Holdings Halliburton
Dana HSBC Holdings
Devon Energy KeySpan Energy
Dollar General Koninklijke Ahold
eircom Mattel
Fujisawa Pharmaceutical Mobil
Hellenic Telecommunications Organization Nortel Networks
Hewlett-Packard Norwich Union
Hitachi Pioneer Natural Resources
Honda Motor Public Service Co. of New Mexico
Ingram Micro Raytheon
ISS-International Service System Sonat
Keebler Foods Suez Lyonnaise des Eaux
Kimberly-Clark Tandy
Lockheed Martin Transatlantic Holdings
Mediaset Wal-Mart Stores
NatSteel Electronics Westshore Terminals
NEC York International
New World China Land
Newell Rubbermaid
Nippon Telegraph and Telephone
Norsk Hydro
ORIX
PE Biosystems Group
Petro-Canada
Portugal Telecom
QBE Insurance Group
Rhone-Poulenc-Rhodia
Robert Half International
Sara Lee
Stinnes
Sumitomo Marine & Fire Insurance
Telefonica Publicidad e Informacion
Thyssen Krupp
Uni-Charm
United Parcel Service
Woolworths
</TABLE>
<TABLE>
<S> <C> <C>
Capital World Growth and Income Fund
Financial Statements
- ---------------------------------- ------- -------
Statement of Assets and Liabilities (dollars in
at November 30, 1999 millions)
- ---------------------------------- ------- -------
Assets:
Investment securities at market
(cost: $7,345.643) $9,554.511
Short-term securities
(cost: $459.283) 458.622
Cash .564
Receivables for--
Sales of investments $18.812
Sales of fund's shares 7.033
Dividends and accrued interest 22.649 48.494
------- -------
10,062.191
Liabilities:
Payables for--
Purchases of investments 22.745
Repurchases of fund's shares 8.050
Management services 3.436
Accrued expenses 6.316 40.547
------- -------
Net Assets at November 30, 1999--
Equivalent to $29.03 per share on
345,168,940 shares of $0.01 par value
capital stock outstanding (authorized
capital stock - 400,000,000 shares) $10,021.644
=======
-------
Statement of Operations (dollars in
for the year ended November 30, 1999 millions)
- ---------------------------------- ------- -------
Investment Income:
Income:
Dividends $176.149
Interest 75.569 $251.718
-------
Expenses:
Management services fee 39.132
Distribution expenses 22.432
Transfer agent fee 6.871
Reports to shareholders .340
Registration statement and prospectus .414
Postage, stationery and supplies 1.033
Directors' fees .166
Auditing and legal fees .069
Custodian fee 2.485
Taxes other than federal income tax .228
Other expenses .105 73.275
------- -------
Net investment income 178.443
-------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 707.262
Net increase in unrealized appreciation
on investments 725.617
Net realized gain and increase in unrealized -------
appreciation on investments 1,432.879
-------
Net Increase in Net Assets Resulting
from Operations $1,611.322
=======
- ---------------------------------- ------- -------
Year ended
Statement of Changes in Net Assets November 30
(dollars in millions) 1999 1998
- ---------------------------------- ------- -------
Operations:
Net investment income $ 178.443 $ 180.925
Net realized gain on investments 707.262 753.023
Net increase in unrealized appreciation
on investments 725.617 173.442
------- -------
Net increase in net assets
resulting from operations 1,611.322 1,107.390
------- -------
Dividends and Distributions Paid to Shareholders:
Dividends from net investment income (161.528) (176.534)
Distributions from net realized gain
on investments (719.208) (524.360)
------- -------
Total dividends and distributions (880.736) (700.894)
Capital Share Transactions:
Proceeds from shares sold: 37,818,271
and 47,546,047 shares, respectively 1,019.018 1,246.606
Proceeds from shares issued in reinvestment
of net investment income dividends and distributions
of net realized gain on investments:
33,918,618 and 27,000,566 shares, respectively 839.704 665.329
Cost of shares repurchased: 40,235,519
and 39,209,730 shares, respectively (1,082.210) (1,010.432)
------- -------
Net increase in net assets
resulting from capital share
transactions 776.512 901.503
------- -------
Total Increase in Net Assets 1,507.098 1,307.999
Net Assets:
Beginning of year 8,514.546 7,206.547
------- -------
End of year (including undistributed
net investment income: $17.182
and $14.301, respectively) $10,021.644 $8,514.546
======= =======
See Notes to Financial Statements
</TABLE>
CAPITAL WORLD GROWTH AND INCOME FUND
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - Capital World Growth and Income Fund, Inc. (the "fund") is
registered under the Investment Company Act of 1940 as an open-end, diversified
management investment company. The fund seeks long-term capital growth while
providing current income.
SIGNIFICANT ACCOUNTING POLICIES - The 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.
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 year ended November 30, 1999, such non-U.S. taxes were $13,153,000.
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 $14,396,000 for the year ended November 30,
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 November 30, 1999, net unrealized appreciation on investments for
federal income tax purposes aggregated $2,199,063,000; $2,737,566,000 related
to appreciated securities and $538,503,000 related to depreciated securities.
During the year ended November 30, 1999, the fund realized, on a tax basis, a
net capital gain of $721,520,000 on securities transactions. Net losses
related to non-U.S. currency and other transactions of $14,258,000 were treated
as an adjustment for federal income tax purposes. The cost of portfolio
securities for federal income tax purposes was $7,814,070,000 at November 30,
1999.
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
INVESTMENT ADVISORY FEE - The fee of $39,132,000 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 bllion 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 year ended November 30, 1999,
distribution expenses under the Plan were $22,383,000. As of November 30,
1999, accrued and unpaid distribution expenses were $5,532,000. American Funds
Distributors, Inc. (AFD), the principal underwriter of the fund's shares,
received $3,947,000 (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 $6,920,000.
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 November 30, 1999, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Directors, were $361,000.
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 $3,747,784,000 and $2,810,664,000, respectively,
during the year ended November 30, 1999.
As of November 30, 1999, accumulated undistributed net realized gain on
investments was $688,055,000 and additional paid-in capital was $7,104,846,000.
The fund reclassified $14,107,000 from undistributed net realized currency
losses and $73,000 from additional paid-in capital to undistributed net
investment income and $31,177,000 to additional paid-in capital from
undistributed net realized gains for the year ended November 30, 1999 as a
result of permanent differences between book and tax.
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 $2,485,000 includes $41,000 that was paid by these credits
rather than in cash.
<TABLE>
<S> <C> <C> <C> <C> <C>
Capital World Growth and Income Fund
Per-Share Data and Ratios
Year ended November 30
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Net Asset Value, Beginning of Year $27.15 $25.89 $23.77 $20.22 $17.81
---- ---- ---- ---- ----
Income From Investment Operations:
Net investment income .48 .59 .640 .70 .61
Net realized and unrealized gain on investments 4.17 3.12 3.045 3.91 2.72
---- ---- ---- ---- ----
Total income from investment operations 4.65 3.71 3.685 4.61 3.33
---- ---- ---- ---- ----
Less Distributions:
Dividends from net investment income (.48) (.58) (.650) (1) (.72) (1) (.63)
Distributions from net realized gains (2.29) (1.87) (.915) (.34) (.29)
---- ---- ---- ---- ----
Total distributions (2.77) (2.45) (1.565) (1.06) (.92)
---- ---- ---- ---- ----
Net Asset Value, End of Year $29.03 $27.15 $25.89 $23.77 $20.22
==== ==== ==== ==== ====
Total Return (2) 19.08% 15.51% 16.36% 23.67% 19.41%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $10,022 $8,515 $7,207 $5,139 $3,611
Ratio of expenses to average net assets .79% .78% .82% .85% .88%
Ratio of net income to average net assets 1.93% 2.25% 2.53% 3.28% 3.24%
Portfolio turnover rate 33.90% 39.44% 32.41% 30.18% 25.50%
(1) Includes 0.2 cents and 1.5 cents realized
non-U.S. currency gains treated as ordinary
income in 1997 and 1996, respectively, for
federal income tax purposes.
(2) Excludes maximum sales charge of 5.75%.
</TABLE>
Capital World Growth and Income Fund
Report of Independent Accountants
To the Board of Directors and Shareholders of Capital World Growth and Income
Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of Capital World Growth and Income
Fund, Inc. (the "Fund") at November 30, 1999, the results of its operations,
the changes in its net assets and the per-share data and ratios for the years
indicated in conformity with generally accepted accounting principles. These
financial statements and per-share data and ratios (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at November 30, 1999 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Los Angeles, California
December 30, 1999
1999 Tax Information (unaudited)
We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by the
fund were earned from the following sources:
<TABLE>
<CAPTION>
Dividends and Distributions per Share
To Shareholders Payment Date From Net From Net From Net
of Record Investment Realized Short- Realized Long-
Income Term Gains Term Gains
<S> <C> <C> <C> <C>
December 14, 1998 December 15, 1998 $0.09 - $2.23
March 19, 1999 March 22, 1999 0.12 - 0.06
June 4, 1999 June 7, 1999 0.18 - -
September 24, 1999 September 27, 1999 0.09 - -
</TABLE>
The fund also designates as a capital gain distribution a portion of earnings
and profits paid to shareholders in redemption of their shares.
The fund makes an election under the Internal Revenue Code Section 853 to pass
through non-U.S. taxes paid by the fund to its shareholders. The amount of
non-U.S. taxes for the fiscal year ended November 30, 1999 is $0.0348 on a
per-share basis. Foreign source income earned by the fund was $0.3255 on a
per-share basis. Shareholders are entitled to a foreign tax credit or an
itemized deduction, at their discretion. Generally, it is more advantageous to
claim a credit rather than to take a deduction.
Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year. For purposes of computing this exclusion, 29% of the dividends
paid by the fund from net investment income represent qualifying dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans and 403(b) plans need not be reported as taxable income.
However, many retirement plan trusts may need this information for their annual
information reporting.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER
INFORMATION WHICH WILL BE MAILED IN JANUARY 2000 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 1999 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.
[The American Funds Group(r)]
Capital World Growth and Income Fund
Board of Directors
H. Frederick Christie
Rolling Hills Estates, California
Private investor; former President and
Chief Executive Officer, The Mission Group;
former President, Southern California
Edison Company
Paul G. Haaga, Jr.
Los Angeles, California
President of the fund
Executive Vice President and Director,
Capital Research and Management Company
Mary Myers Kauppila
Boston, Massachusetts
Private investor; former owner and President,
Energy Investment, Inc.
Gail L. Neale
Burlington, Vermont
President, The Lovejoy Consulting Group, Inc.;
former Executive Vice President of the
Salzburg Seminar
Robert J. O'Neill, Ph.D.
Oxford, England
Chichele Professor of the History of War;
Fellow of All Souls College, University of Oxford
Donald E. Petersen
Birmingham, Michigan
Retired; former Chairman of the Board and
Chief Executive Officer, Ford Motor Company
Stefanie Powers
Beverly Hills, California
Actor; Founder and President,
The William Holden Wildlife Foundation
Frank Stanton
New York, New York
Retired; former President, CBS Inc. (1946-1973)
Thierry Vandeventer
Geneva, Switzerland
Chairman of the Board of the fund
Director, Capital Research and
Management Company
Charles Wolf, Jr., Ph.D.
Santa Monica, California
Senior Economic Adviser and Corporate
Fellow in International Economics,
The RAND Corporation
Other Officers
Gina H. Despres
Washington, D.C.
Executive Vice President of the fund
Senior Vice President,
Capital Research and Management Company
Stephen E. Bepler
New York, New York
Senior Vice President of the fund
Senior Vice President,
Capital Research Company
Mark E. Denning
London, England
Senior Vice President of the fund
Director, Capital Research and
Management Company
Gregg E. Ireland
Washington, D.C.
Senior Vice President of the fund
Senior Vice President,
Capital Research and Management Company
Janet A. McKinley
New York, New York
Senior Vice President of the fund
Director, Capital Research and
Management Company
Carl M. Kawaja
San Francisco, California
Vice President of the fund
Vice President, Capital Research Company
Vincent P. Corti
Los Angeles, California
Secretary of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
R. Marcia Gould
Brea, California
Treasurer of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
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
Independent accountants
PricewaterhouseCoopers LLP
400 South Hope Street
Los Angeles, California 90071-2889
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR FINANCIAL ADVISER. YOU MAY ALSO CALL AMERICAN FUNDS SERVICE
COMPANY, TOLL-FREE, AT 800/421-0180 OR VISIT WWW.AMERICANFUNDS.COM ON THE WORLD
WIDE WEB.
This report is for the information of shareholders of Capital World Growth and
Income Fund, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after March 31, 2000, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Printed on recycled paper
Litho in USA AGD/GRS/4472
Lit. No. WGI-011-0100
