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Amcap Fund (CAFBX)

Filed: 7 May 07, 8:00pm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM N-CSR
Certified Shareholder Report of
Registered Management Investment Companies

Investment Company Act File Number: 811-01435



AMCAP Fund, Inc.
(Exact name of registrant as specified in charter)

333 South Hope Street
Los Angeles, California 90071
(Address of principal executive offices)




Registrant's telephone number, including area code: (213) 486-9200

Date of fiscal year end: February 28 or 29

Date of reporting period: February 28, 2007





Vincent P. Corti
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(Name and address of agent for service)


Copies to:
Eric A.S. Richards
O’Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071
(Counsel for the registrant)


 
 

 

ITEM 1 - Reports to Stockholders
 
[logo - American Funds®]

The right choice for the long term®

AMCAP Fund

What is long-term growth and how does disciplined investing lead to it?

[photo - leaf growing on a shoot off of a tree trunk]

Annual report for the year ended February 28, 2007


AMCAP Fund® seeks long-term growth of capital by investing primarily in U.S. companies with a record of above-average growth.

This fund is one of the 30 American Funds. The organization ranks among the nation’s three largest mutual fund families. For 75 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.

Contents 
  
Letter to shareholders1
The value of a long-term perspective4
Feature article: 
What is long-term growth and how
 
does disciplined investing lead to it?
6
Summary investment portfolio12
Financial statements16
Board of directors and other officers28
What makes American Funds different?back cover

Figures shown are past results for Class A shares and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors 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. For current information and month-end results, visit americanfunds.com. Fund results shown, unless otherwise indicated, are at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower.

Here are returns on a $1,000 investment with all distributions reinvested for periods ended March 31, 2007 (the most recent calendar quarter):

Class A shares
1 year
5 years
10 years
Reflecting 5.75% maximum sales charge
   
    
Average annual total return
+5.36%+10.73%
Cumulative total return
+1.22%+29.83%+177.11%

The total annual fund operating expense ratio was 0.68% for Class A shares as of the most recent fiscal year-end. This figure does not reflect a fee waiver that currently is in effect and which causes the actual expense ratio to be lower.

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased it to 10% on April 1, 2005. Fund results shown reflect actual expenses, with the waiver applied. Fund results would have been lower without the waiver. Please see the Financial Highlights table on pages 23 and 24 for details.

Results for other share classes can be found on page 3.
 
[photo - dew on a leaf]

Fellow shareholders:

U.S. and world stock markets produced solid gains for the 12 months ended February 28, 2007. Economies in most nations continued to expand, especially in developing markets; oil prices softened a bit and inflation remained low. U.S. corporate earnings growth generally continued at a strong pace. Concerns about a mid-cycle correction — brought on by a weaker housing market — seemed to surface earlier in the year, then fade in the second half, only to resurface at our fiscal year-end. Despite this specific issue, the markets have proved to be remarkably resilient.

Against this backdrop, AMCAP Fund provided a total return of 8.1% for the fiscal year, compared with a total return of 12.0% for the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of primarily large U.S. stocks. As the table below shows, AMCAP exceeded the 7.8% total return of the Lipper Growth Funds Index and trailed the 11.4% total return of the Lipper Multi-Cap Core Funds Index.

Over the longer term, AMCAP continued to surpass the S&P 500 and its two other benchmark indexes by a significant margin. For the 10 years ended February 28, AMCAP produced an average annual total return of 10.8%, compared with 7.6% by the S&P 500, 6.1% by the Lipper Growth Funds Index and 8.0% by the Lipper Multi-Cap Core Funds Index.

Over its lifetime of almost 40 years, AMCAP has provided an average annual total return of 12.3%, compared with 10.6% by the S&P 500, 9.5% by the Lipper Growth Funds Index and 10.3% by the Lipper Multi-Cap Core Funds Index. The table below shows how the fund is meeting its objective of long-term growth of capital.

What helped the fund’s results

The information technology sector in general had a mixed year but several specific technology companies helped the fund during the past 12 months. In addition, some select industrial and health care companies aided the fund. Among the fund’s major contributors were Precision Castparts (+71.5%), a diversified manufacturer of complex metal components and products; Oracle (+32.3%), the world’s largest supplier of database management software; Cisco Systems (+28.2%), the leading maker of equipment used in Internet networking; and Google (+24.0%), one of the most frequently used website search engines in the world. Health care companies that contributed included Medco Health Solutions (+21.3%), a manager of pharmacy benefits; and Roche Holding (+20.5%), a world leader in pharmaceuticals and diagnostic research.

[Begin Sidebar]
Cumulative total returns (for periods ended 2/28/07)
       
        
  1 year 5 years 10 years 
        
AMCAP
  
+8.1
%
 
+43.8
%
 
+179.2
%
Standard & Poor’s 500 Composite Index1 
  +12.0  +39.0  +108.6 
Lipper Multi-Cap Core Funds Index2
  +11.4  +49.8  +115.1 
Lipper Growth Funds Index2
  +7.8  +34.3  +81.3 

AMCAP’s lifetime results (5/1/67 - 2/28/07)
     
      
  
Cumulative total return
 
Average annual
total return
 
      
AMCAP
  
+10,181.2
%
 
+12.3
%
Standard & Poor’s 500 Composite Index1
  +5,345.3  +10.6 
Consumer Price Index (inflation)3
  +514.8  +4.7 
Lipper Multi-Cap Core Funds Index2
  +4,783.5  +10.3 
Lipper Growth Funds Index2
  +3,572.0  +9.5 

1 The S&P 500 is unmanaged and does not reflect sales charges, commissions or expenses.
2 Lipper indexes do not include the effects of sales charges.
3 Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
[End Sidebar]

What detracted from results

Some consumer discretionary and a few health care service companies held the fund back. United Healthgroup, a provider of health care services, declined 10.4% because of concerns that the new Congress might increase cost pressures on health care. Lowe’s, one of America’s largest do-it-yourself home improvement retailers, fell 4.5% in the wake of weakness in the housing market.

Looking ahead

In the long term, continued growth of economies around the world, particularly the developing nations, should be a strong tailwind for the world and U.S. markets. Barring the imposition of restrictive trade polices or an unexpected geopolitical or financial shock, this long-term growth trend could last for awhile. Although increased global trade and capital flows have caused adjustments in some countries and markets, the overall effect has been very beneficial for the U.S. economy and American companies. Many companies in AMCAP Fund do a significant amount of business outside the U.S. and are successful global competitors.

Corporate earnings have been strong this past year, spurred by a growing economy, rising sales and tight control over expenses. In fact, corporate earnings strength has had many beneficial effects including keeping overall employment strong and wages rising. It has also contributed to a trend of increased or newly initiated dividends and stock buy-backs. While earnings growth is likely to slow in the coming year, the trend toward dividend growth and share repurchases will probably continue.

We continue to be sensitive to risk at a time when many investors are not. The large inflows into alternative asset classes, derivatives and certain hedge funds have injected a level of complexity and leverage into the world’s financial system that is worrisome. That said, it is quite possible that occasional shocks will be well-handled by the markets, and valuations, at least in the U.S., appear reasonable.

In this environment, AMCAP Fund’s portfolio counselors and investment analysts will continue to do what they have done for the past 40 years: invest in companies with proven results for the long run instead of trading for short-term gains. Our feature story on page 6 explains how AMCAP’s disciplined approach to investing for growth focuses on company fundamentals. We hope you will find it informative.

We are pleased to report that in the past 12 months the number of shareholder accounts has increased by about 7% to nearly 1.6 million. We welcome our new shareholders and thank our long-term investors for their continuing faith in AMCAP Fund.

Cordially,

/s/ R. Michael Shanahan
R. Michael Shanahan
Vice Chairman of the Board


/s/ Claudia P. Huntington
Claudia P. Huntington
President
 
April 10, 2007

For current information about the fund, visit americanfunds.com.

[Begin Sidebar]
AMCAP’s last 10 years 
One-year total returns for the past 10 fiscal years (ended 2/28 or 2/29) 
    
1998
  +37.0%
1999
  +21.1 
2000
  +22.3 
2001
  +3.0 
2002
  -7.1 
2003
  -15.7 
2004
  +37.0 
2005
  +3.9 
2006
  +10.9 
2007
  +8.1 
     
Cumulative total return for the 10-year period ended 2/28/07
  +179.2%
Average annual total return for the 10-year period ended 2/28/07
  +10.8%
[End Sidebar]


Other share class results

Class B, Class C, Class F and Class 529

Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.

Average annual total returns for periods ended March 31, 2007 (the most recent calendar quarter):

 
1 year
5 years
Life of class
    
Class B shares— first sold 3/15/00
   
Reflecting applicable contingent deferred sales charge   
(CDSC), maximum of 5%, payable only if shares
   
are sold within six years of purchase
+1.52%+5.46%+3.88%
Not reflecting CDSC+6.52%+5.78%+3.88%
    
Class C shares— first sold 3/15/01
   
Reflecting CDSC, maximum of 1%, payable only if   
shares are sold within one year of purchase
+5.51%+5.73%+4.78%
Not reflecting CDSC+6.51%+5.73%+4.78%
    
Class F shares*— first sold 3/16/01
   
Not reflecting annual asset-based fee charged by   
sponsoring firm
+7.42%+6.57%+5.91%
    
Class 529-A shares— first sold 2/15/02
   
Reflecting 5.75% maximum sales charge+1.14%+5.30%+5.94%
Not reflecting maximum sales charge+7.30%+6.55%+7.17%
    
Class 529-B shares— first sold 2/19/02
   
Reflecting applicable CDSC, maximum of 5%, payable   
only if shares are sold within six years of purchase
+1.45%+5.29%+6.47%
Not reflecting CDSC+6.45%+5.61%+6.62%
    
Class 529-C shares— first sold 2/19/02
   
Reflecting CDSC, maximum of 1%, payable only if   
shares are sold within one year of purchase
+5.44%+5.63%+6.64%
Not reflecting CDSC+6.44%+5.63%+6.64%
    
Class 529-E shares*— first sold 3/7/02
+6.96%+6.18%+6.09%
    
Class 529-F shares*— first sold 9/17/02
   
Not reflecting annual asset-based fee charged by   
sponsoring firm
+7.57%+12.64%

*These shares are sold without any initial or contingent deferred sales charge.
 Results shown do not reflect the $10 initial account setup fee and an annual $10 account maintenance fee.

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased it to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 23 and 24 for details that include expense ratios for all share classes.

For information regarding the differences among the various share classes, please refer to the fund’s prospectus.


The value of a long-term perspective

How a $10,000 investment has grown

Figures shown are past results for Class A shares and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com. Fund figures reflect deduction of the maximum sales charge of 5.75% on the $10,000 investment.1 Thus, the net amount invested was $9,425.2 

The chart and accompanying table illustrate how a $10,000 investment in AMCAP grew between May 1, 1967 — when the fund began operations — and February 28, 2007.

As you can see, that $10,000 grew to $968,098 with all distributions reinvested, a gain of 9,581%. Over the same period, $10,000 would have grown to $544,532 in the unmanaged Standard & Poor’s 500 Composite Index. The chart also records the fund’s progress relative to the rate of inflation as measured by the Consumer Price Index.

The fund’s year-by-year results appear in the table under the chart. You can use this table to estimate how much the value of your own holdings has grown. Let’s say, for example, that you have been reinvesting all your dividends and capital gain distributions since February 28, 1997. At that time, according to the table, the value of the investment illustrated here was $346,783. Since then, it has nearly tripled in value, to $968,098. Thus, in that same 10-year period, the value of your investment — regardless of size — has also nearly tripled.

Average annual total returns based on a $1,000 investment
(for periods ended February 28, 2007)*
 
1 year
5 years
10 years
    
Class A shares+1.84%+6.27%+10.16%

*Assumes reinvestment of all distributions and payment of the maximum 5.75% sales charge.

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased it to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 23 and 24 for details.


[begin mountain chart]

S&P 500 with dividends reinvested5
AMCAP with dividends reinvested4
Consumer Price Index (inflation)6
   
5/1/1967$ 10,0005/1/1967$ 9,4255/1/1967$ 10,000
2/29/1968$ 9,7782/29/1968$ 10,0562/29/1968$ 10,332
2/28/1969$ 11,0742/28/1969$ 12,2122/28/1969$ 10,816
2/28/1970$ 10,4422/28/1970$ 11,8352/28/1970$ 11,480
2/28/1971$ 11,7132/28/1971$ 12,6432/28/1971$ 12,054
2/29/1972$ 13,3052/29/1972$ 14,9022/29/1972$ 12,477
2/28/1973$ 14,3452/28/1973$ 13,9782/28/1973$ 12,961
2/28/1974$ 12,7762/28/1974$ 11,0372/28/1974$ 14,260
2/28/1975$ 11,3542/28/1975$ 9,9032/28/1975$ 15,861
2/29/1976$ 14,4532/29/1976$ 13,8832/29/1976$ 16,858
2/28/1977$ 15,0622/28/1977$ 14,1732/28/1977$ 17,855
2/28/1978$ 13,8072/28/1978$ 16,6122/28/1978$ 19,003
2/28/1979$ 16,1052/28/1979$ 22,7382/28/1979$ 20,876
2/29/1980$ 20,0712/29/1980$ 33,5412/29/1980$ 23,837
2/28/1981$ 24,4002/28/1981$ 40,5482/28/1981$ 26,556
2/28/1982$ 22,1752/28/1982$ 42,6432/28/1982$ 28,580
2/28/1983$ 30,6902/28/1983$ 61,4562/28/1983$ 29,577
2/29/1984$ 34,0132/29/1984$ 62,1282/29/1984$ 30,937
2/28/1985$ 41,1082/28/1985$ 72,1652/28/1985$ 32,024
2/28/1986$ 53,6362/28/1986$ 88,7382/28/1986$ 33,021
2/28/1987$ 69,4622/28/1987$ 115,6642/28/1987$ 33,716
2/29/1988$ 67,5862/29/1988$ 112,0372/29/1988$ 35,045
2/28/1989$ 75,6082/28/1989$ 122,8272/28/1989$ 36,737
2/28/1990$ 89,8632/28/1990$ 140,0272/28/1990$ 38,671
2/28/1991$ 103,0182/28/1991$ 163,4922/28/1991$ 40,725
2/29/1992$ 119,4502/29/1992$ 196,8562/29/1992$ 41,873
2/28/1993$ 132,1582/28/1993$ 208,5572/28/1993$ 43,233
2/28/1994$ 143,1492/28/1994$ 232,1372/28/1994$ 44,320
2/28/1995$ 153,6722/28/1995$ 240,0472/28/1995$ 45,589
2/29/1996$ 206,9412/29/1996$ 310,3452/29/1996$ 46,798
2/28/1997$ 261,0462/28/1997$ 346,7832/28/1997$ 48,218
2/28/1998$ 352,3822/28/1998$ 475,0032/28/1998$ 48,912
2/28/1999$ 421,9352/28/1999$ 575,0892/28/1999$ 49,698
2/29/2000$ 471,4312/29/2000$ 703,3582/29/2000$ 51,299
2/28/2001$ 432,7992/28/2001$ 724,6382/28/2001$ 53,112
2/28/2002$ 391,6542/28/2002$ 673,3272/28/2002$ 53,716
2/28/2003$ 302,8602/28/2003$ 567,6182/28/2003$ 55,317
2/29/2004$ 419,4522/29/2004$ 777,4202/29/2004$ 56,254
2/28/2005$ 448,6882/28/2005$ 808,0372/28/2005$ 57,946
2/28/2006$ 486,3492/28/2006$ 895,8552/28/2006$ 60,030
2/28/2007     $ 544,5322/28/2007         $ 968,0982/28/2007 $ 61,480
 
        
Year ended February 28 or 29
19683
196919701971197219731974
        
Total value (dollars in thousands)
       
Dividends reinvested$ .1.2.2.2.2.2
Value at fiscal year-end1
$10.112.211.812.614.914.011.0
AMCAP total return0.6%21.4(3.1)6.817.9(6.2)(21.0)
        
        
Year ended February 28 or 291975197619771978197919801981
        
Total value (dollars in thousands)       
Dividends reinvested.3.3.2.3.3.4.7
Value at fiscal year-end1
9.913.914.216.622.733.540.5
AMCAP total return(10.3)40.22.117.236.947.520.9
        
        
Year ended February 28 or 291982198319841985198619871988
        
Total value (dollars in thousands)       
Dividends reinvested2.61.21.61.91.51.63.0
Value at fiscal year-end1
42.661.562.172.288.7115.7112.0
AMCAP total return5.244.11.116.223.030.3(3.1)
        
        
Year ended February 28 or 291989199019911992199319941995
        
Total value (dollars in thousands)       
Dividends reinvested3.23.23.32.22.31.92.4
Value at fiscal year-end1
122.8140.0163.5196.9208.6232.1240.0
AMCAP total return9.614.016.820.45.911.33.4
        
        
Year ended February 28 or 291996199719981999200020012002
        
Total value (dollars in thousands)       
Dividends reinvested3.42.62.53.73.34.13.7
Value at fiscal year-end1
310.3346.8475.0575.1703.4724.6673.3
AMCAP total return29.311.737.021.122.33.0(7.1)
        
        
Year ended February 28 or 2920032004200520062007  
        
Total value (dollars in thousands)       
Dividends reinvested1.1.12.04.17.2  
Value at fiscal year-end1
567.6777.4808.0895.9968.1  
AMCAP total return(15.7)37.03.910.98.1  

Average annual total return for 39-3/4 years
12.2%4

1 As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares.
2 The maximum initial sales charge was 8.5% prior to July 1, 1988.
3 For the period May 1, 1967 (when the fund began operations), through February 29, 1968.
4 Includes reinvested dividends of $73,389 and reinvested capital gain distributions of $544,347.
5 The S&P 500 cannot be invested in directly.
6 Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
The indexes are unmanaged and do not reflect sales charges, commissions or expenses.
The results shown are before taxes on fund distributions and sale of fund shares.
[end mountain chart]


[Begin Sidebar]
Careful research by experienced investment professionals is the key to the disciplined approach. Above all, we look for fundamental strengths that can help a company sustain a long period of future growth.
— Claudia Huntington, President
[End Sidebar]

[photo - row of trees between a meadow and a field]

What is long-term growth and how does disciplined investing lead to it?

[photo - single tree with supports]
Growth investing has come to mean different things to different people.

It can be investing with short-term time horizons. It can signify paying a high price for a company’s stock with the hope that the underlying growth of the business will justify the price. Growth “investing” can even describe day trading to some or making a “bet” on the next “play.”

In contrast, AMCAP Fund’s disciplined approach to investing for growth focuses on company fundamentals. “We work hard to determine if a business has a history of growth — in metrics such as earnings, cash flow and/or sales — and also good prospects for the future,” says Claudia Huntington, the fund’s president. “We think in terms of years, not months or days. We review qualitative aspects of the company, including its management. Then, after we have carefully analyzed the past and the expected future growth of the fundamentals, we decide to invest only if we feel the stock price is fair. Our disciplined investing process has helped AMCAP achieve its goal of long-term growth for shareholders.”

It begins with careful research.

“Careful research by experienced investment professionals is the key to the disciplined approach. Above all, we look for fundamental strengths that can help a company sustain a long period of future growth,” Claudia says. “We also seek companies with a sustainable competitive edge, whether it is in their services or products, culture, product development process, distribution systems or technologies.” To find out how AMCAP’s disciplined investment process works, we met with the fund’s four portfolio counselors and three of the fund’s 20 investment analysts.

AMCAP’s investment portfolio is divided into five segments. Four segments are each managed by one of the fund’s portfolio counselors. The fifth is managed by the fund’s investment analysts. The portfolio counselors are generalists who invest broadly across many industries, while the investment analysts are specialists with deep expertise in specific industries. As in all American Funds, an investment committee makes certain that AMCAP remains true to its mandate of investing in long-term growth companies and that each individual’s investment choices reflect that mandate. But within this constraint, each portfolio counselor or analyst is free to make his or her own investment decisions.

How do we distinguish an AMCAP growth company?

AMCAP’s emphasis is on the long term. “Our goal is to find good growing businesses with multiple years of opportunity ahead of them,” says Claudia. “We look for companies where there is more than just a promise. We need evidence that this is a business, a company and a management that has been able to demonstrate long-term growth. Personally, I put a great deal of emphasis on the quality of the management team.”

[Begin Sidebar]
Companies grow because of new products, new markets, new geographies and new technologies. Management provides the environment to create the new products, new services and other growth ... and they all need to be working on the same page.”
— Mike Shanahan
[End Sidebar]

[photo - sun behind the tops of trees]

“Companies grow because of new products, new markets, new geographies and new technologies,” says Mike Shanahan, vice chairman of the fund. “Management provides the environment to create the new products, new services and other growth. You need the right research and development, manufacturing and marketing managers, and they all need to be working on the same page.”

AMCAP invests in growth companies of all sizes and industries. Brad Barrett, an investment analyst who covers Internet media, says one company he covers fits the AMCAP model because it “has shown the ability to grow very profitably, expanding its business in territory after territory, not only in the United States but abroad. The management team, while young, has proved themselves to be savvy dealmakers focused on the end-user experience. They have done it all while maintaining a sound balance sheet and generating a tremendous amount of cash.”

Software investment analyst Dylan Yolles prefers to invest in growing technology companies that are out of favor or trade at temporarily depressed valuations — and yet have enduring sources of value, such as recurring maintenance revenue streams or strong market franchises. A database management software company he holds in AMCAP derives a significant part of its revenues from recurring product support and software license updates. “The company has generated a lot of cash that it doesn’t need to reinvest in the business. It can use that cash to buy back stock and buy other companies. The company’s customers are primarily in growth industries. In addition, the valuation of the company is fairly reasonable. It’s a growth company, but it is not trading at a growth stock multiple.”

It’s a key strategy to invest in a quality growth industry when it’s experiencing an overall downturn. “We first started looking at one aerospace company in 2003 during a time when there was a down period in the industry,” says investment analyst Keiko McKibben. “Often when there is a downturn in an industry, you can find really good companies that have been over-penalized by the market.”

“The company has had a solid track record over time,” Keiko says. “During 2003, the company began to gain market share and, as the aerospace industry came out of a slump, the combination of improving market share and improving environment was positive for the stock. The company always seemed to be adding value — and its earnings have been increasing steadily.”

[Begin Sidebar]
Walking around the plant floor gives you an understanding of how the company works. You get a sense of the company’s culture and how management’s overall approach is translated into reality. — Keiko McKibben
[End Sidebar]

How can we be certain that a company has a proven growth record?

Tim Armour, an AMCAP portfolio counselor, says he and the other counselors use a variety of investment measurement tools to analyze a company’s growth record. They include such measures as cash flow per share, earnings per share, return on equity, return on investment and sales growth per share. His favorite is sales growth per share instead of overall sales growth. “A company can buy sales growth by acquiring other companies,” Tim says. “If you just look at total sales alone, it looks as if the sales of a company’s products have gone up sharply after an acquisition, but that may not be the case. Some companies use their shares to acquire other companies, and that inflates their sales. Looking at sales growth per share cuts through all this and gives a clearer picture of true sales growth.”

How do we find the right management?

“It’s hard work,” Claudia says. “The best way to understand management is to meet with the company leaders at their offices, one on one. It helps to discuss the company’s past and future as part of a continuum: What has management done especially well in the past? Is the same management in place for the future? What does management appear to be exceptionally skilled at doing? Are there any weaknesses in management’s style or depth? A company is a living, breathing entity that changes over time. It’s our goal to think about where the company is relative to its past and future, and whether management has the strength to continue to grow the company.”

Understanding management doesn’t just start and stop with the CEO of the company. It’s also important to get to know other company employees besides top management. Keiko, for instance, says she also meets with line managers on the plant floor. “Walking around the plant floor gives you an understanding of how the company works,” she says. “You get a sense of the company’s culture and how management’s overall approach is translated into reality.”

[photo - man and child walking through the woods]

[Begin Sidebar]
With AMCAP, if a company hasn’t achieved above-average growth in the past, we are unlikely to invest in it. This doesn’t mean we won’t invest in companies in cyclical industries, but we want to see a baseline of growth through these cycles. — Tim Armour
[End Sidebar]
 

[photo - person measuring height of tree with tape measure]
 
Mike gains insight into a company’s business prospects by meeting sales people and other employees who regularly talk to customers. AMCAP investment analysts may also meet with the companies’ suppliers, customers and creditors.

A company’s culture is very important.

“We meet with many employees to learn about the fundamentals of the business and the corporate culture they are building,” Brad says. “For instance, in an industry as dynamic as Internet media, the company needs an innovative culture and a friendly atmosphere in which to work. At the end of the day, the main asset of these companies is that they be able to continue to hire top engineering and computer science talent. To do that, you need a culture where the quality of the product comes first.”

“When new management comes in, we need to understand whether the company will continue with its same objectives,” Tim says. “Do the new leaders have the same beliefs and core objectives as the previous group? It’s a crucial question.”

How do we decide how much to pay for a company’s shares?

“We try to establish a value for the entire company and equate that to what the market says it is worth. If we find that the share price is appropriate based on the future prospects for the company’s business, we will move forward.”

How does AMCAP’s disciplined investment process help the fund’s portfolio counselors, investment analysts and shareholders?

“It compels us to focus on investing in proven growth companies,” says Tim. “It helps us avoid some of the hype. It’s easy to fall into a short-term mindset that a company is really great. With AMCAP, if a company hasn’t achieved above-average growth in the past, we are unlikely to invest in it. This doesn’t mean we won’t invest in companies in cyclical industries, but we want to see a baseline of growth through these cycles.”

Portfolio counselor Ross Sappenfield says that his own investing style works well within the fund’s approach. “I prefer to invest in companies that are growing and when valuations are low and I hope that the low valuation entry point will reduce risk. Not every portfolio counselor works this way. Each counselor uses his or her own parameters to evaluate whether a company’s stock valuation is fair relative to its future prospects. Some may be willing to pay more for high growth or for a higher certainty of growth.”

Why do we follow this disciplined investment style?

“Over the long term, we have provided shareholders with returns that reflect the above-average growth of the companies in which we invest,” Claudia says. “Our approach is based on owning pieces of growth companies, which, over time, the market will recognize,” adds Mike. “That’s quite different from asking what we think the market will buy next month.”

AMCAP’s wealth of experience

AMCAP Fund’s four portfolio counselors bring together 115 years of investment experience to managing your investment. Here are the specific years of experience for these primary decision-makers for the fund:

 Years of
 investment
Portfolio counselorexperience
  
R. Michael Shanahan42
Claudia P. Huntington34
Timothy D. Armour24
C. Ross Sappenfield15

Years of experience as of May 1, 2007.


[photo - Claudia Huntington]
[Begin Photo Caption]
Claudia Huntington
[End Photo Caption]


[photo - Michael Shanahan]
[Begin Photo Caption]
Michael Shanahan
[End Photo Caption]


[photo - Tim Armour]
[Begin Photo Caption]
Tim Armour
[End Photo Caption]


[photo - Ross Sappenfield]
[Begin Photo Caption]
Ross Sappenfield
[End Photo Caption]
 

 
Summary investment portfolio
February 28, 2007

The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings. For details on how to obtain a complete schedule of portfolio holdings, please see the inside back cover.
 
 
[begin pie chart]
  Percent of 
Industry sector diversification net assets 
     
Information technology  20.28%
Consumer discretionary  18.68 
Health care  16.19 
Financials  7.89 
Consumer staples  6.05 
Other industries  16.48 
Short-term securities & other assets less liabilities  14.43 
[end pie chart]
 
 
 

  
Shares
 
Market
 
Percent
 
    
value
 
of net
 
Common stocks - 85.57%
   
(000)
 
assets
 
        
Information technology - 20.28%
       
Cisco Systems, Inc. (1)  24,604,300 $638,236  2.49%
Oracle Corp. (1)  33,171,659  545,010  2.12 
Intel Corp.  25,567,000  507,505  1.98 
Google Inc., Class A (1)  1,030,000  462,934  1.81 
Microsoft Corp.  15,595,000  439,311  1.71 
Texas Instruments Inc.  12,250,000  379,260  1.48 
eBay Inc. (1)  11,170,000  358,110  1.40 
Affiliated Computer Services, Inc., Class A (1)  3,610,000  187,612  .73 
Automatic Data Processing, Inc.  3,500,000  174,265  .68 
Other securities     1,509,114  5.88 
      5,201,357  20.28 
           
Consumer discretionary - 18.68%
          
Lowe's Companies, Inc.  20,800,000  677,248  2.64 
Target Corp.  9,250,000  569,153  2.22 
Carnival Corp., units  8,525,200  395,740  1.54 
Johnson Controls, Inc.  3,390,000  317,982  1.24 
Best Buy Co., Inc.  6,300,000  292,761  1.14 
YUM! Brands, Inc.  3,738,000  216,580  .84 
Williams-Sonoma, Inc.  6,000,000  202,560  .79 
Harley-Davidson, Inc.  2,896,900  190,906  .74 
Ross Stores, Inc.  5,525,000  181,054  .71 
Other securities     1,748,479  6.82 
      4,792,463  18.68 
           
Health care - 16.19%
          
UnitedHealth Group Inc.  12,106,400  631,954  2.46 
WellPoint, Inc. (1)  6,700,000  531,913  2.07 
Medco Health Solutions, Inc. (1)  4,510,000  304,921  1.19 
Medtronic, Inc.  5,200,000  261,872  1.02 
Forest Laboratories, Inc. (1)  4,717,300  244,167  .95 
Alcon, Inc.  1,730,000  215,592  .84 
St. Jude Medical, Inc. (1)  4,929,200  195,443  .76 
Roche Holding AG  982,000  175,176  .68 
Johnson & Johnson  500,000  31,525  .12 
Other securities     1,561,751  6.10 
      4,154,314  16.19 
           
Financials - 7.89%
          
Fannie Mae  8,640,000  490,147  1.91 
Capital One Financial Corp.  5,651,200  435,594  1.70 
American International Group, Inc.  4,365,000  292,892  1.14 
Wachovia Corp.  3,307,008  183,109  .71 
Freddie Mac  2,550,000  163,659  .64 
Other securities     459,328  1.79 
      2,024,729  7.89 
           
Consumer staples - 6.05%
          
PepsiCo, Inc.  5,000,000  315,750  1.23 
L'Oréal SA  2,300,000  240,712  .94 
Altria Group, Inc.  2,500,000  210,700  .82 
Other securities     784,078  3.06 
      1,551,240  6.05 
           
Energy - 5.96%
          
Schlumberger Ltd.  6,310,000  396,268  1.55 
Devon Energy Corp.  3,020,000  198,444  .77 
Newfield Exploration Co. (1)  3,795,000  164,020  .64 
Other securities     769,573  3.00 
      1,528,305  5.96 
           
Industrials - 5.52%
          
Precision Castparts Corp.  3,640,000  331,131  1.29 
Robert Half International Inc.  6,800,000  265,676  1.04 
United Parcel Service, Inc., Class B  3,200,000  224,608  .88 
General Electric Co.  5,400,000  188,568  .73 
Other securities     406,478  1.58 
      1,416,461  5.52 
           
Telecommunication services - 2.55%
          
Sprint Nextel Corp., Series 1  15,970,000  307,902  1.20 
Other securities     346,559  1.35 
      654,461  2.55 
           
Other - 0.40%
          
Other securities     102,905  .40 
           
           
MISCELLANEOUS - 2.05%
          
Other common stocks in initial period of acquisition     525,051  2.05 
           
           
Total common stocks (cost: $16,110,535,000)
     21,951,286  85.57 
           
           
           
   
Principal
       
  
amount
       
Short-term securities - 14.03%
  
(000
)
      
           
           
Federal Home Loan Bank 5.13%-5.18% due 3/9-5/9/2007 $297,161  295,302  1.15 
Procter & Gamble International Funding S.C.A. 5.21%-5.23% due 3/13-6/1/2007 (2)  273,600  271,446  1.06 
Johnson & Johnson 5.17%-5.18% due 3/12-5/8/2007 (2)  254,400  252,896  .98 
CAFCO, LLC 5.235%-5.25% due 3/6-5/4/2007 (2)  153,500  152,567    
Ciesco LLC 5.23%-5.235% due 4/4-4/11/2007 (2)  100,000  99,450  .98 
Bank of America Corp. 5.23%-5.245% due 3/5-5/16/2007  222,400  221,338    
Ranger Funding Co. LLC 5.25% due 3/1/2007 (2)  23,200  23,197  .95 
Park Avenue Receivables Co., LLC 5.21%-5.23% due 3/6-4/23/2007 (2)  123,000  122,434    
Jupiter Securitization Co., LLC 5.23%-5.24% due 4/10-4/25/2007 (2)  66,100  65,600    
J.P. Morgan Chase & Co. 5.24% due 4/11/2007  50,000  49,700  .93 
Clipper Receivables Co., LLC 5.23%-5.25% due 3/2-4/3/2007 (2)  234,000  233,394  .91 
Variable Funding Capital Corp. 5.23%-5.245% due 3/2-4/5/2007 (2)  215,800  215,313  .84 
General Electric Capital Corp. 5.22%-5.23% due 4/5-5/7/2007  100,000  99,268    
Edison Asset Securitization LLC 5.23%-5.24% due 3/13-4/27/2007 (2)  75,000  74,695    
General Electric Co. 5.23% due 3/22/2007  20,800  20,733  .76 
Freddie Mac 5.12%-5.18% due 3/9-5/29/2007  163,250  162,366  .63 
International Lease Finance Corp. 5.205%-5.22% due 3/20-5/18/2007  72,700  72,211    
American General Finance Corp. 5.20% due 3/12/2007  40,000  39,930  .44 
Fannie Mae 5.12%-5.155% due 3/13-3/23/2007  82,600  82,384  .32 
Other securities     1,045,654  4.08 
           
           
Total short-term securities (cost: $3,599,738,000)
     3,599,878  14.03 
           
           
Total investment securities (cost: $19,710,273,000)
     25,551,164  99.60 
Other assets less liabilities
     102,363  .40 
           
Net assets
    $25,653,527  100.00%
 
 

"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
 
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio.
 
 
  
Investments in affiliates
 
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The fund's affiliated holdings listed below are either shown in the preceding summary investment portfolio or included in the market value of "Other securities" under their respective industry sectors. Further details on these holdings and related transactions during the year ended February 28, 2007, appear below.
 

  
 
 
 
 
 
 
    
Market value
 
          
Dividend
 
of affiliates
 
Company
 
Beginning
 
 
 
 
 
Ending
 
income
 
at 2/28/2007
 
 
 
shares
 
Purchases
 
Sales
 
shares
 
(000)
 
(000)
 
Williams-Sonoma, Inc.  3,205,200  2,794,800  -  6,000,000 $2,011 $202,560 
Medicis Pharmaceutical Corp., Class A  3,625,000  -  -  3,625,000  435  131,805 
Tractor Supply Co. (1)  -  2,525,000  -  2,525,000  -  129,204 
Mine Safety Appliances Co.  -  1,942,750  -  1,942,750  1,226  78,973 
P.F. Chang's China Bistro, Inc. (1)  1,000,000  650,000  -  1,650,000  -  72,089 
Fossil, Inc. (1) (3)  4,415,000  -  3,000,000  1,415,000  -  - 
OSI Restaurant Partners, Inc. (3)  3,750,000  -  1,500,000  2,250,000  1,365  - 
Power Integrations, Inc. (3)  1,850,000  -  1,850,000  -  -  - 
              $5,037 $614,631 
 
 
 
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.
(1) Security did not produce income during the last 12 months.
(2) Restricted security that can be resold only to institutional investors. In practice, this security is typically as liquid as unrestricted securities in the portfolio. The total value of all such restricted securities, including those in "Other securities" in the summary investment portfolio, was $2,356,826,000, which represented 9.19% of the net assets of the fund.
(3) Unaffiliated issuer at 2/28/2007.
 
The descriptions of the companies shown in the summary investment portfolio are supplemental. These descriptions and the industry classifications were obtained from published reports and other sources believed to be reliable, and are not covered by the Report of Independent Registered Public Accounting Firm.
 
 
 
See Notes to Financial Statements
 
 
 

Financial statements       
        
Statement of assets and liabilities
       
at February 28, 2007   (dollars and shares in thousands, except per-share amounts) 
        
Assets:
       
Investment securities at market:       
Unaffiliated issuers (cost: $19,153,719)    $24,936,533    
Affiliated issuers (cost: $556,554)     614,631 $25,551,164 
Cash        55,912 
Receivables for:          
Sales of investments     23,494    
Sales of fund's shares     168,015    
Dividends and interest     25,450  216,959 
         25,824,035 
Liabilities:
          
Payables for:          
Purchases of investments     102,542    
Repurchases of fund's shares     41,257    
Investment advisory services     5,719    
Services provided by affiliates     18,620    
Deferred directors' compensation     1,997    
Other     373  170,508 
Net assets at February 28, 2007
       $25,653,527 
           
Net assets consist of:
          
Capital paid in on shares of capital stock       $19,648,381 
Undistributed net investment income        46,727 
Undistributed net realized gain        117,504 
Net unrealized appreciation        5,840,915 
Net assets at February 28, 2007
       $25,653,527 
           
Total authorized capital stock - 2,000,000 shares, $1.00 par value (1,271,726 total shares outstanding)          
  Net assets  Shares outstanding  
Net asset value
per share
 
           
Class A $17,341,234  854,563 $20.29 
Class B  1,163,435  59,386  19.59 
Class C  1,666,466  85,625  19.46 
Class F  2,506,343  124,086  20.20 
Class 529-A  431,659  21,320  20.25 
Class 529-B  84,412  4,295  19.65 
Class 529-C  136,252  6,926  19.67 
Class 529-E  25,036  1,247  20.07 
Class 529-F  13,447  664  20.26 
Class R-1  43,356  2,189  19.80 
Class R-2  427,044  21,580  19.79 
Class R-3  746,719  37,188  20.08 
Class R-4  554,490  27,419  20.22 
Class R-5  513,634  25,238  20.35 
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A and 529-A, for which the maximum offering prices per share were $21.53 and $21.49, respectively. 
           
           
See Notes to Financial Statements          
           
Statement of operations
          
for the year ended February 28, 2007      
 (dollars in thousands
 
Investment income:
          
Income:          
           
           
Dividends (net of non-U.S. taxes of $590; also includes $5,037 from affiliates)    $189,727    
Interest     185,199 $374,926 
           
Fees and expenses(*):          
Investment advisory services     77,407    
Distribution services     81,919    
Transfer agent services     18,889    
Administrative services     10,810    
Reports to shareholders     800    
Registration statement and prospectus     867    
Postage, stationery and supplies     2,034    
Directors' compensation     538    
Auditing and legal     49    
Custodian     184    
State and local taxes     247    
Other     124    
Total fees and expenses before reimbursements/waivers     193,868    
Less reimbursements/waivers of fees and expenses:          
Investment advisory services     7,741    
Administrative services     376    
Total fees and expenses after reimbursements/waivers        185,751 
Net investment income        189,175 
           
Net realized gain and unrealized
          
appreciation on investments
          
and non-U.S. currency:
          
Net realized gain (loss) on:          
Investments (including $44,193 net loss from affiliates)     706,150    
Non-U.S. currency transactions     (142) 706,008 
Net unrealized appreciation on:          
Investments     969,451    
Non-U.S. currency translations     24  969,475 
Net realized gain and          
unrealized appreciation          
on investments and non-U.S. currency        1,675,483 
Net increase in net assets resulting
          
from operations
       $1,864,658 
           
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.       
           
See Notes to Financial Statements          
           
           
           
           
           
Statements of changes in net assets
        (dollars in thousands) 
           
     Year ended   Year ended
 
 
 
 
 
 
February 28,
 
 
February 28,
 
 
 
 
 
 
 
2007
 
 
2006 
Operations:
          
Net investment income    $189,175 $109,967 
Net realized gain on investments and          
non-U.S. currency transactions     706,008  382,805 
Net unrealized appreciation          
on investments and non-U.S. currency translations     969,475  1,685,059 
Net increase in net assets          
resulting from operations     1,864,658  2,177,831 
           
Dividends and distributions paid to shareholders:
          
Dividends from net investment income and non-U.S. currency gain     (161,301) (88,586)
Distributions from net realized gain          
on investments     (713,424) (433,776)
Total dividends and distributions paid          
to shareholders     (874,725) (522,362)
           
Capital share transactions
     1,323,416  3,068,453 
           
Total increase in net assets
     2,313,349  4,723,922 
           
Net assets:
          
Beginning of year     23,340,178  18,616,256 
End of year (including undistributed          
net investment income: $46,727 and $19,070, respectively)    $25,653,527 $23,340,178 
           
           
See Notes to Financial Statements          
 

Notes to financial statements     

1.   
Organization and significant accounting policies
 
Organization - AMCAP 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 growth of capital by investing primarily in U.S. companies with a record of above-average growth.

The fund offers 14 share classes consisting of four retail share classes, five CollegeAmerica® savings plan share classes and five retirement plan share classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F) can be utilized to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry any conversion rights. The fund’s share classes are described below:
 
Share class
 
Initial sales charge
 
Contingent deferred sales charge upon redemption
 
Conversion feature
Class A and 529-A Up to 5.75% None (except 1% for certain redemptions within one year of purchase without an initial sales charge) None
Class B and 529-B None Declines from 5% to 0% for redemptions within six years of purchase Class B and 529-B convert to Class A and 529-A, respectively, after eight years
Class C None 1% for redemptions within one year of purchase Class C converts to Class F after 10 years
Class 529-C None 1% for redemptions within one year of purchase None
Class 529-E None None None
Class F and 529-F None None None
Class R-1, R-2, R-3, R-4 and R-5 None None None

Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.

Significant accounting policies - The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:


Security valuation - Equity securities are valued at the official closing price of, or 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. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. 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.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under procedures adopted by authority of the fund's board of directors. Market quotations may be considered unreliable if events occur that materially affect the value of securities (particularly non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security;
and changes in overall market conditions.

Security transactions and related investment income - Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

Class allocations - Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.

Dividends and distributions to shareholders - Dividends and distributions paid to shareholders are recorded on the ex-dividend date.

Non-U.S. currency translation - Assets and liabilities, including investment securities, denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. In the accompanying financial statements, the effects of changes in non-U.S. exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in non-U.S. currencies are disclosed separately.

2. Federal income taxation and distributions  

The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
 
Distributions - Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; and cost of investments sold. 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 for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

During the year ended February 28, 2007, the fund reclassified $142,000 from undistributed net investment income to undistributed net realized gains; and reclassified $75,000 from undistributed net investment income and $50,807,000 from undistributed net realized gain to capital paid in on shares of capital stock to align financial reporting with tax reporting. 

As of February 28, 2007, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investments were as follows:

  (dollars in thousands)
Undistributed ordinary income $48,723
Undistributed long-term capital gain 119,036
Gross unrealized appreciation on investment securities 5,963,124
Gross unrealized depreciation on investment securities (123,765)
Net unrealized appreciation on investment securities 5,839,359
Cost of investment securities 19,711,805

The tax character of distributions paid to shareholders was as follows (dollars in thousands): 
 
  
Year ended February 28, 2007
 
Year ended February 28, 2006
 
Share class
 
Ordinary income
 
Long-term
capital gains
 
Total
distributions paid
 
Ordinary income
 
Long-term
capital gains
 
Total
distributions paid
 
              
Class A $138,143 $474,443 $612,586 $72,208 $301,745 $373,953 
Class B  665  33,768  34,433  -  22,692  22,692 
Class C  945  48,247  49,192  -  30,880  30,880 
Class F  19,657  66,410  86,067  9,265  38,509  47,774 
Class 529-A  3,126  11,205  14,331  1,362  5,755  7,117 
Class 529-B  44  2,354  2,398  -  1,370  1,370 
Class 529-C  67  3,667  3,734  -  1,978  1,978 
Class 529-E  109  663  772  30  349  379 
Class 529-F  120  341  461  42  152  194 
Class R-1  21  1,177  1,198  -  558  558 
Class R-2  215  11,654  11,869  -  6,340  6,340 
Class R-3  3,213  20,676  23,889  1,283  11,210  12,493 
Class R-4  3,285  12,219  15,504  2,042  5,723  7,765 
Class R-5  5,167  13,124  18,291  2,354  6,515  8,869 
Total $174,777 $699,948 $874,725 $88,586 $433,776 $522,362 
 
 
3. Fees and transactions with related parties

Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company SM ("AFS"), the fund’s transfer agent, and American Funds Distributors, Inc.SM ("AFD"), the principal underwriter of the fund’s shares.

Investment advisory services -The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.485% on the first $1 billion of daily net assets and decreasing to 0.290% on such assets in excess of $27 billion. CRMC is currently waiving 10% of investment advisory services fees. During the year ended February 28, 2007, total investment advisory services fees waived by CRMC were $7,741,000. As a result, the fee shown on the accompanying financial statements of $77,407,000, which was equivalent to an annualized rate of 0.320%, was reduced to $69,666,000, or 0.288% of average daily net assets.
 
Class-specific fees and expenses - Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below: 

Distribution services - The fund has adopted plans of distribution for all share classes, except Class R-5. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted on the following page. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Class A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of February 28, 2007, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A.

Share class
Currently approved limits
Plan limits
Class A   0.25%   0.25%
Class 529-A0.250.50
Class B and 529-B1.001.00
Class C, 529-C and R-11.001.00
Class R-20.751.00
Class 529-E and R-30.500.75
Class F, 529-F and R-40.250.50

Transfer agent services - The fund has a transfer agent agreement with AFS for Class A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described below.

Administrative services - The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Class A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. CRMC has agreed to pay AFS on the fund's behalf for a portion of the transfer agent services fees for some of the retirement plan share classes. For the year ended February 28, 2007, the total administrative services fees paid by CRMC were $1,000 and $375,000 for Class R-1 and R-2, respectively. Administrative services fees are presented gross of any payments made by CRMC. Each 529 share class is subject to an additional annual administrative services fee of 0.10% of its respective average daily net assets; this fee is payable to the Commonwealth of Virginia for the maintenance of the CollegeAmerica plan. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party. 

Expenses under the agreements described above/on the previous page for the year ended February 28, 2007, were as follows (dollars in thousands):
 
Share class
Distribution services
Transfer agent services
Administrative services
CRMC administrative services
Transfer agent services
Commonwealth of Virginia administrative services
Class A$37,941$17,593Not applicableNot applicableNot applicable
Class B11,4141,296Not applicableNot applicableNot applicable
Class C16,176
 
 
 
 
Included
in
administrative services
$2,387$375Not applicable
Class F5,6621,957229Not applicable
Class 529-A73834662$ 379
Class 529-B781713078
Class 529-C1,20511039121
Class 529-E11120422
Class 529-F-10212
Class R-13864618Not applicable
Class R-22,9135601,412Not applicable
Class R-33,5321,009439Not applicable
Class R-41,06061920Not applicable
Class R-5Not applicable4258Not applicable 
Total$81,919$18,889$7,560$2,638$612
 
Deferred directors’ compensation - Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $538,000, shown on the accompanying financial statements, includes $335,000 in current fees (either paid in cash or deferred) and a net increase of $203,000 in the value of the deferred amounts.

Affiliated officers and directors - Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.

4. Capital share transactions

Capital share transactions in the fund were as follows (dollars and shares in thousands):

 
Share class
 
Sales(*)
 
Reinvestments of dividends and distributions
 
Repurchases(*)
 
Net increase (decrease)
 
 
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Year ended February 28, 2007                 
Class A $2,452,797  124,436 $584,816  29,600 $(2,466,827) (125,268)$570,786  28,768 
Class B  106,571  5,614  33,035  1,734  (160,492) (8,454) (20,886) (1,106)
Class C  271,113  14,343  46,681  2,465  (320,656) (17,014) (2,862) (206)
Class F  757,923  38,524  77,095  3,918  (553,473) (28,268) 281,545  14,174 
Class 529-A  93,121  4,721  14,329  726  (30,939) (1,573) 76,511  3,874 
Class 529-B  11,842  620  2,398  126  (6,334) (332) 7,906  414 
Class 529-C  31,635  1,651  3,733  194  (13,915) (729) 21,453  1,116 
Class 529-E  5,470  280  772  39  (2,230) (114) 4,012  205 
Class 529-F  4,701  239  459  23  (1,812) (92) 3,348  170 
Class R-1  18,747  973  1,192  62  (12,866) (667) 7,073  368 
Class R-2  142,090  7,398  11,863  615  (100,614) (5,226) 53,339  2,787 
Class R-3  243,454  12,483  23,865  1,221  (212,286) (10,855) 55,033  2,849 
Class R-4  261,251  13,135  15,462  786  (146,292) (7,369) 130,421  6,552 
Class R-5  207,095  10,475  18,095  912  (89,453) (4,511) 135,737  6,876 
Total net increase                         
(decrease) $4,607,810  234,892 $833,795  42,421 $(4,118,189) (210,472)$1,323,416  66,841 
                          
Year ended February 28, 2006                         
Class A $3,092,186  166,408 $357,200  19,030 $(1,871,812) (100,597)$1,577,574  84,841 
Class B  167,343  9,346  21,789  1,206  (114,314) (6,354) 74,818  4,198 
Class C  426,454  23,913  29,319  1,631  (220,054) (12,296) 235,719  13,248 
Class F  844,870  45,759  43,406  2,321  (417,815) (22,471) 470,461  25,609 
Class 529-A  102,618  5,518  7,116  380  (17,125) (915) 92,609  4,983 
Class 529-B  14,294  792  1,370  75  (3,143) (173) 12,521  694 
Class 529-C  33,083  1,829  1,978  109  (8,504) (464) 26,557  1,474 
Class 529-E  5,660  307  380  20  (874) (46) 5,166  281 
Class 529-F  4,055  216  194  10  (973) (51) 3,276  175 
Class R-1  19,809  1,083  557  30  (11,112) (620) 9,254  493 
Class R-2  153,311  8,437  6,340  347  (70,666) (3,872) 88,985  4,912 
Class R-3  301,219  16,370  12,486  672  (116,779) (6,309) 196,926  10,733 
Class R-4  277,912  14,949  7,765  412  (71,175) (3,823) 214,502  11,538 
Class R-5  104,143  5,563  8,804  467  (52,862) (2,812) 60,085  3,218 
Total net increase                         
(decrease) $5,546,957  300,490 $498,704  26,710 $(2,977,208) (160,803)$3,068,453  166,397 
                          
                          
(*) Includes exchanges between share classes of the fund.               

5. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities, of $5,373,270,000 and $4,096,743,000, respectively, during the year ended February 28, 2007.



  
 
 Income (loss) from investment operations(2) Dividends and distributions 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Net asset value, beginning of period Net investment income (loss) 
 
 Net gains (losses) on securities (both realized and unrealized) 
 
 Total from investment operations Dividends (from net investment income) 
 
 Distributions (from capital gains) Total dividends and distributions 
 
 Net asset value, end of period Total return (3) Net assets, end of period (in millions) 
 
 
Ratio of expenses to average net assets before reimbursements/
waivers
 
 
 
Ratio of expenses to average net assets after reimbursements/
waivers (4)
 
 
 Ratio of net income (loss) to average net assets   
Class A:
                                           
Year ended 2/28/2007 $19.48 $.18    $1.37    $1.55 $(.16)   $(.58)$(.74)   $20.29  8.07%$17,341     .68%    .65%    .91%   
Year ended 2/28/2006  18.02  .12     1.82     1.94  (.09)    (.39) (.48)    19.48  10.87  16,091     .68     .65     .66    
Year ended 2/28/2005  17.50  .06     .63     .69  (.04)    (.13) (.17)    18.02  3.94  13,350     .69     .68     .36    
Year ended 2/29/2004  12.78  .02     4.70     4.72  -  (5) -  -  (5) 17.50  36.96  11,086     .73     .73     .11    
Year ended 2/28/2003  15.29  .03     (2.42)    (2.39) (.02)    (.10) (.12)    12.78  (15.70) 6,641     .77     .77     .25    
Class B:
                                                                
Year ended 2/28/2007  18.83  .02     1.32     1.34  -     (.58) (.58)    19.59  7.23  1,163     1.46     1.42     .13    
Year ended 2/28/2006  17.48  (.02)    1.76     1.74  -     (.39) (.39)    18.83  10.04  1,139     1.47     1.44     (.13)   
Year ended 2/28/2005  17.07  (.07)    .61     .54  -     (.13) (.13)    17.48  3.13  984     1.48     1.47     (.41)   
Year ended 2/29/2004  12.56  (.10)    4.61     4.51  -     -  -     17.07  35.91  740     1.50     1.50     (.66)   
Year ended 2/28/2003  15.12  (.07)    (2.39)    (2.46) -     (.10) (.10)    12.56  (16.36) 299     1.55     1.55     (.52)   
Class C:
                                                                
Year ended 2/28/2007  18.72  .01     1.31     1.32  -     (.58) (.58)    19.46  7.16  1,667     1.51     1.48     .07    
Year ended 2/28/2006  17.39  (.03)    1.75     1.72  -     (.39) (.39)    18.72  9.98  1,607     1.52     1.49     (.18)   
Year ended 2/28/2005  16.99  (.08)    .61     .53  -     (.13) (.13)    17.39  3.09  1,262     1.54     1.53     (.47)   
Year ended 2/29/2004  12.51  (.11)    4.59     4.48  -     -  -     16.99  35.81  849     1.56     1.56     (.73)   
Year ended 2/28/2003  15.07  (.07)    (2.39)    (2.46) -     (.10) (.10)    12.51  (16.42) 274     1.59     1.59     (.55)   
Class F:
                                                                
Year ended 2/28/2007  19.40  .18     1.36     1.54  (.16)    (.58) (.74)    20.20  8.06  2,506     .68     .65     .90    
Year ended 2/28/2006  17.94  .12     1.82     1.94  (.09)    (.39) (.48)    19.40  10.90  2,132     .71     .68     .63    
Year ended 2/28/2005  17.41  .06     .62     .68  (.02)    (.13) (.15)    17.94  3.88  1,513     .76     .75     .31    
Year ended 2/29/2004  12.73  .01     4.67     4.68  -  (5) -  -  (5) 17.41  36.81  978     .78     .78     .05    
Year ended 2/28/2003  15.25  .03     (2.41)    (2.38) (.04)    (.10) (.14)    12.73  (15.74) 289     .82     .82     .22    
Class 529-A:
                                                             
Year ended 2/28/2007  19.45  .17     1.36     1.53  (.15)    (.58) (.73)    20.25  7.99  432     .74     .71     .84    
Year ended 2/28/2006  17.99  .11     1.82     1.93  (.08)    (.39) (.47)    19.45  10.85  339     .75     .72     .60    
Year ended 2/28/2005  17.46  .06     .62     .68  (.02)    (.13) (.15)    17.99  3.86  224     .77     .76     .31    
Year ended 2/29/2004  12.76  .01     4.70     4.71  (.01)    -  (.01)    17.46  36.90  128     .77     .77     .06    
Year ended 2/28/2003  15.29  .04     (2.43)    (2.39) (.04)    (.10) (.14)    12.76  (15.73) 39     .78     .78     .28    
Class 529-B:
                                                             
Year ended 2/28/2007  18.91  -  (5) 1.32     1.32  -     (.58) (.58)    19.65  7.09  84     1.57     1.54     .01    
Year ended 2/28/2006  17.58  (.05)    1.77     1.72  -     (.39) (.39)    18.91  9.87  73     1.61     1.58     (.27)   
Year ended 2/28/2005  17.20  (.10)    .61     .51  -     (.13) (.13)    17.58  2.94  56     1.66     1.65     (.59)   
Year ended 2/29/2004  12.68  (.13)    4.65     4.52  -     -  -     17.20  35.65  37     1.68     1.68     (.85)   
Year ended 2/28/2003  15.28  (.08)    (2.42)    (2.50) -     (.10) (.10)    12.68  (16.45) 12     1.71     1.71     (.65)   
Class 529-C:
                                                             
Year ended 2/28/2007  18.93  -  (5) 1.32     1.32  -     (.58) (.58)    19.67  7.08  136     1.56     1.53     .02    
Year ended 2/28/2006  17.59  (.05)    1.78     1.73  -     (.39) (.39)    18.93  9.92  110     1.59     1.56     (.25)   
Year ended 2/28/2005  17.21  (.10)    .61     .51  -     (.13) (.13)    17.59  2.93  76     1.65     1.64     (.58)   
Year ended 2/29/2004  12.68  (.13)    4.66     4.53  -     -  -     17.21  35.72  46     1.67     1.67     (.84)   
Year ended 2/28/2003  15.28  (.08)    (2.42)    (2.50) -     (.10) (.10)    12.68  (16.45) 14     1.69     1.69     (.63)   
Class 529-E:
                                                             
Year ended 2/28/2007  19.28  .10     1.35     1.45  (.08)    (.58) (.66)    20.07  7.66  25     1.05     1.02     .54    
Year ended 2/28/2006  17.85  .05     1.80     1.85  (.03)    (.39) (.42)    19.28  10.46  20     1.08     1.05     .27    
Year ended 2/28/2005  17.37  (.01)    .62     .61  -     (.13) (.13)    17.85  3.48  14     1.13     1.12     (.05)   
Year ended 2/29/2004  12.73  (.05)    4.69     4.64  -     -  -     17.37  36.45  8     1.14     1.14     (.31)   
Period from 3/7/2002 to 2/28/2003  16.08  (.01)    (3.22)    (3.23) (.02)    (.10) (.12)    12.73  (20.18) 3     1.16  (6) 1.16  (6) (.09) (6)
Class 529-F:
                                                             
Year ended 2/28/2007  19.46  .20     1.37     1.57  (.19)    (.58) (.77)    20.26  8.20  14     .55     .52     1.04    
Year ended 2/28/2006  17.99  .14     1.82     1.96  (.10)    (.39) (.49)    19.46  10.99  10     .62     .59     .73    
Year ended 2/28/2005  17.46  .04     .62     .66  -     (.13) (.13)    17.99  3.75  6     .88     .87     .20    
Year ended 2/29/2004  12.78  (.01)    4.69     4.68  -  (5) -  -  (5) 17.46  36.66  3     .89     .89     (.07)   
Period from 9/17/2002 to 2/28/2003  12.80  .01     -  (5) .01  (.03)    -  (.03)    12.78  .05  -  (7) .40     .40     .07    
Class R-1:
                                                             
Year ended 2/28/2007 $19.04 $.02    $1.32    $1.34 $-    $(.58)$(.58)   $19.80  7.14%$43     1.50%    1.47%    .09%   
Year ended 2/28/2006  17.69  (.03)    1.77     1.74  -     (.39) (.39)    19.04  9.92  35     1.55     1.51     (.19)   
Year ended 2/28/2005  17.28  (.08)    .62     .54  -     (.13) (.13)    17.69  3.09  23     1.57     1.54     (.47)   
Year ended 2/29/2004  12.73  (.12)    4.68     4.56  (.01)    -  (.01)    17.28  35.81  12     1.60     1.57     (.75)   
Period from 6/26/2002 to 2/28/2003  13.96  (.04)    (1.19)    (1.23) -     -  -     12.73  (8.81) 1     3.01  (6) 1.58  (6) (.49) (6)
Class R-2:
                                                             
Year ended 2/28/2007  19.03  .02     1.32     1.34  -     (.58) (.58)    19.79  7.15  427     1.59     1.46     .09    
Year ended 2/28/2006  17.66  (.03)    1.79     1.76  -     (.39) (.39)    19.03  10.05  358     1.66     1.48     (.17)   
Year ended 2/28/2005  17.26  (.07)    .60     .53  -     (.13) (.13)    17.66  3.04  245     1.73     1.51     (.43)   
Year ended 2/29/2004  12.71  (.11)    4.66     4.55  -  (5) -  -  (5) 17.26  35.80  130     1.91     1.53     (.70)   
Period from 5/21/2002 to 2/28/2003  15.51  (.05)    (2.63)    (2.68) (.02)    (.10) (.12)    12.71  (17.37) 25     2.21  (6) 1.54  (6) (.46) (6)
Class R-3:
                                                              
Year ended 2/28/2007  19.28  .11     1.35     1.46  (.08)    (.58) (.66)    20.08  7.68  747     1.04     1.01     .55    
Year ended 2/28/2006  17.86  .05     1.80     1.85  (.04)    (.39) (.43)    19.28  10.45  662     1.06     1.02     .29    
Year ended 2/28/2005  17.37  -  (5) .62     .62  -     (.13) (.13)    17.86  3.54  421     1.08     1.07     .01    
Year ended 2/29/2004  12.75  (.05)    4.67     4.62  -  (5) -  -  (5) 17.37  36.27  189     1.16     1.15     (.32)   
Period from 6/4/2002 to 2/28/2003  15.06  (.01)    (2.17)    (2.18) (.03)    (.10) (.13)    12.75  (14.58) 24     1.29  (6) 1.16  (6) (.09) (6)
Class R-4:
                                                              
Year ended 2/28/2007  19.42  .17     1.35     1.52  (.14)    (.58) (.72)    20.22  7.97  555     .73     .70     .85    
Year ended 2/28/2006  17.99  .11     1.81     1.92  (.10)    (.39) (.49)    19.42  10.79  405     .75     .71     .61    
Year ended 2/28/2005  17.45  .06     .62     .68  (.01)    (.13) (.14)    17.99  3.85  168     .76     .75     .35    
Year ended 2/29/2004  12.76  .01     4.69     4.70  (.01)    -  (.01)    17.45  36.84  60     .78     .78     .05    
Period from 5/20/2002 to 2/28/2003  15.67  .02     (2.78)    (2.76) (.05)    (.10) (.15)    12.76  (17.74) 3     .95  (6) .81  (6) .24  (6)
Class R-5:
                                                              
Year ended 2/28/2007  19.55  .23     1.36     1.59  (.21)    (.58) (.79)    20.35  8.29  514     .43     .40     1.15    
Year ended 2/28/2006  18.07  .17     1.83     2.00  (.13)    (.39) (.52)    19.55  11.19  359     .44     .41     .90    
Year ended 2/28/2005  17.54  .11     .63     .74  (.08)    (.13) (.21)    18.07  4.20  274     .45     .44     .62    
Year ended 2/29/2004  12.78  .06     4.71     4.77  (.01)    -  (.01)    17.54  37.32  127     .47     .47     .37    
Period from 5/15/2002 to 2/28/2003  15.72  .06     (2.85)    (2.79) (.05)    (.10) (.15)    12.78  (17.83) 53     .48  (6) .48  (6) .58  (6)
 
 
    
 
Year ended February 28 or 29
 
 
 
 
 
2007
 
2006
 
2005
 
2004
 
2003
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portfolio turnover rate for all classes of shares
 
 
 
 
20%
 
20%
 
16%
 
17%
 
18%
 

(1) Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.
(2) Based on average shares outstanding.
(3) Total returns exclude all sales charges, including contingent deferred sales charges.
(4) The ratios in this column reflect the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.
(5) Amount less than $.01.
(6) Annualized.
(7) Amount less than $1 million.
 
 
See Notes to Financial Statements
 


Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of AMCAP Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of AMCAP Fund, Inc. (the “Fund”), including the summary investment portfolio, as of February 28, 2007, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of February 28, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AMCAP Fund, Inc. as of February 28, 2007, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.


Deloitte & Touche LLP

Costa Mesa, California
April 10, 2007


 
Expense example
 
 
unaudited
 
 
As a shareholder of the fund, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2006, through February 28, 2007).
 
Actual expenses:
 
The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F and 529-F shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
 
Hypothetical example for comparison purposes:
 
The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F and 529-F shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
 
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
 
  Beginning account value 9/1/2006 Ending account value 2/28/2007 
Expenses paid
during period*
 
Annualized
expense ratio
 
          
Class A -- actual return $1,000.00 $1,089.53 $3.32  .64%
Class A -- assumed 5% return  1,000.00  1,021.62  3.21  .64 
Class B -- actual return  1,000.00  1,085.58  7.34  1.42 
Class B -- assumed 5% return  1,000.00  1,017.75  7.10  1.42 
Class C -- actual return  1,000.00  1,085.01  7.60  1.47 
Class C -- assumed 5% return  1,000.00  1,017.50  7.35  1.47 
Class F -- actual return  1,000.00  1,090.09  3.37  .65 
Class F -- assumed 5% return  1,000.00  1,021.57  3.26  .65 
Class 529-A -- actual return  1,000.00  1,089.96  3.68  .71 
Class 529-A -- assumed 5% return  1,000.00  1,021.27  3.56  .71 
Class 529-B -- actual return  1,000.00  1,084.72  7.91  1.53 
Class 529-B -- assumed 5% return  1,000.00  1,017.21  7.65  1.53 
Class 529-C -- actual return  1,000.00  1,085.21  7.86  1.52 
Class 529-C -- assumed 5% return  1,000.00  1,017.26  7.60  1.52 
Class 529-E -- actual return  1,000.00  1,087.83  5.23  1.01 
Class 529-E -- assumed 5% return  1,000.00  1,019.79  5.06  1.01 
Class 529-F -- actual return  1,000.00  1,090.66  2.64  .51 
Class 529-F -- assumed 5% return  1,000.00  1,022.27  2.56  .51 
Class R-1 -- actual return  1,000.00  1,085.18  7.55  1.46 
Class R-1 -- assumed 5% return  1,000.00  1,017.55  7.30  1.46 
Class R-2 -- actual return  1,000.00  1,085.24  7.55  1.46 
Class R-2 -- assumed 5% return  1,000.00  1,017.55  7.30  1.46 
Class R-3 -- actual return  1,000.00  1,088.10  5.18  1.00 
Class R-3 -- assumed 5% return  1,000.00  1,019.84  5.01  1.00 
Class R-4 -- actual return  1,000.00  1,089.25  3.57  .69 
Class R-4 -- assumed 5% return  1,000.00  1,021.37  3.46  .69 
Class R-5 -- actual return  1,000.00  1,091.29  2.07  .40 
Class R-5 -- assumed 5% return  1,000.00  1,022.81  2.01  .40 
              
 
* Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (181), and divided by 365 (to reflect the one-half year period).
 
 
Tax informationunaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended February 28, 2007:

Long-term capital gains$727,046,000
Qualified dividend income100%
Corporate dividends received deduction100%
U.S. government income that may be exempt from state taxation$12,923,000


Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2008, to determine the calendar year amounts to be included on their 2007 tax returns. Shareholders should consult their tax advisers.
 
 

Board of directors and other officers

“Independent” directors
Name and age
Year first elected a
director of the fund1
Principal occupation(s) during past five years
   
H. Frederick Christie, 731998Private investor; former President and CEO,
Chairman of the Board The Mission Group (non-utility holding company,
(Independent and Non-Executive) subsidiary of Southern California Edison Company)
   
Mary Anne Dolan, 601998Founder and President, M.A.D., Inc. (communications company); former Editor-in-Chief, The Los Angeles Herald Examiner
   
Martin Fenton, 711990Chairman of the Board, Senior Resource Group LLC (development and management of senior living communities)
   
William D. Jones, 512006President and CEO, CityLink Investment Corporation (real estate development and management)
   
Mary Myers Kauppila, 531998Private investor; Chairman of the Board and CEO, Ladera Management Company (venture capital and agriculture); former owner and President, Energy Investment, Inc.
   
William H. Kling, 652006President, American Public Media Group
   
Bailey Morris-Eck, 621999Director and Programming Chair, WYPR Baltimore/Washington (public radio station); Senior Adviser, Financial News (London); Senior Fellow, Institute for International Economics
   
Kirk P. Pendleton, 671986Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment)
   
Olin C. Robison, Ph.D., 701998Fellow, The Oxford Centre for the Study of Christianity and Culture; Director, The Oxford Project on Religion and Public Policy; President Emeritus of the Salzburg Seminar; President Emeritus, Middlebury College
   
Stephen B. Sample, Ph.D., 661999President, University of Southern California
   

“Independent” directors

Name and age
Number of portfolios
in fund complex2
overseen by director
Other directorships3 held by director
   
H. Frederick Christie, 7321Ducommun Incorporated; IHOP Corporation;
Chairman of the Board Southwest Water Company
(Independent and Non-Executive)  
   
Mary Anne Dolan, 603None
   
Martin Fenton, 7118None
   
William D. Jones, 512Sempra Energy; Southwest Water Company
   
Mary Myers Kauppila, 536None
   
William H. Kling, 658Irwin Financial Corporation
   
Bailey Morris-Eck, 623None
   
Kirk P. Pendleton, 677None
   
Olin C. Robison, Ph.D., 703American Shared Hospital Services
   
Stephen B. Sample, Ph.D., 662Intermec, Inc.; William Wrigley Jr. Company
   

“Interested” directors4

Name, age and position with fund
Year first elected a
director or officer
of the fund1
Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund
   
R. Michael Shanahan, 681986Chairman Emeritus, Capital Research and
Vice Chairman of the Board 
Management Company; Director, American Funds Distributors, Inc.;5 Chairman of the Executive Committee, The Capital Group Companies, Inc.;5 Chairman of the Board, Capital Management Services, Inc.;5 Director, Capital Strategy Research, Inc.5
   
Claudia P. Huntington, 551992-1994Senior Vice President, Capital Research and
President1996
Management Company; Director, The Capital Group Companies, Inc.5
   
   
“Interested” directors4
  
   
   
Name, age and position with fund
Number of portfolios
in fund complex2
overseen by director
Other directorships3 held by director
   
R. Michael Shanahan, 682None
Vice Chairman of the Board  
   
Claudia P. Huntington, 551None
President  

The statement of additional information includes additional information about fund directors and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all directors and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Fund Secretary.

1 Directors and officers of the fund serve until their resignation, removal or retirement.
2 Capital Research and Management Company manages the American Funds, consisting of 30 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which serves as the underlying investment vehicle for certain variable insurance contracts, American Funds Target Date Retirement Series,SM Inc., which is available to investors in tax-deferred retirement plans and IRAs, and Endowments, whose shareholders are limited to certain nonprofit organizations.
3 This includes all directorships (other than those in the American Funds) that are held by each director as a director of a public company or a registered investment company.
4 “Interested persons” within the meaning of the 1940 Act, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter).
5 Company affiliated with Capital Research and Management Company.

Other officers

Name, age and position with fund
Year first elected an
officer of the fund1
Principal occupation(s) during past five years and positions held with affiliated entities or the principal underwriter of the fund
   
Timothy D. Armour, 461996President and Director, Capital Research and
Senior Vice President 
Management Company; Director, The Capital Group Companies, Inc.5
   
Paul G. Haaga, Jr., 581994Vice Chairman of the Board, Capital Research and
Senior Vice President 
Management Company; Director, The Capital Group Companies, Inc.5 
   
Barry S. Crosthwaite, 482006
Senior Vice President, Capital Research Company5
Vice President  
   
C. Ross Sappenfield, 411999Vice President, Capital Research and Management
Vice President Company
   
James Terrile, 412006
Senior Vice President, Capital Research Company5
Vice President  
   
Vincent P. Corti, 501998Vice President — Fund Business Management
Secretary Group, Capital Research and Management Company
   
Karl C. Grauman, 392006Vice President — Fund Business Management
Treasurer Group, Capital Research and Management Company
   
Jeffrey P. Regal, 352003Vice President — Fund Business Management
Assistant Treasurer Group, Capital Research and Management Company
   
Chairman Emeritus  
James D. Fullerton, 90 
Retired; former Chairman of the Board, The Capital Group Companies, Inc.5

Offices of the fund and of the investment adviser
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406

135 South State College Boulevard
Brea, CA 92821-5823

Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)

P.O. Box 25065
Santa Ana, CA 92799-5065

P.O. Box 659522
San Antonio, TX 78265-9522

P.O. Box 6007
Indianapolis, IN 46206-6007

P.O. Box 2280
Norfolk, VA 23501-2280

Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070

Counsel
O’Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071-2899

Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188

Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus, which can be obtained from your financial adviser and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.

“American Funds Proxy Voting Guidelines” — which describes how we vote proxies relating to portfolio securities — is available free of charge on the U.S. Securities and Exchange Commission (SEC) website at sec.gov, on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the SEC for the 12 months ended June 30 by August 31. The report also is available on the SEC and American Funds websites.

A complete February 28, 2007, portfolio of AMCAP Fund’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).

AMCAP Fund files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. (800/SEC-0330). Additionally, the list of portfolio holdings also is available by calling AFS.

This report is for the information of shareholders of AMCAP Fund, but it also may 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 June 30, 2007, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

[logo - American Funds®]

The right choice for the long term®

What makes American Funds different?

For 75 years, we have followed a consistent philosophy that we firmly believe is in our investors’ best interests. The range of opportunities offered by our family of just 30 carefully conceived, broadly diversified funds has attracted over 40 million shareholder accounts.

Our unique combination of strengths includes these five factors:

 A long-term, value-oriented approach
We seek to buy securities at reasonable prices relative to their prospects and hold them for the long term.

 An extensive global research effort
Our investment professionals travel the world to find the best investment opportunities and gain a comprehensive understanding of companies and markets.

 The multiple portfolio counselor system
Our unique method of portfolio management, developed nearly 50 years ago, blends teamwork with individual accountability and has provided American Funds with a sustainable method of achieving fund objectives.

 Experienced investment professionals
American Funds portfolio counselors have an average of 24 years of investment experience, providing a wealth of knowledge and experience that few organizations have.

 A commitment to low operating expenses
The American Funds provide exceptional value for shareholders, with operating expenses that are among the lowest in the mutual fund industry.

American Funds span a range of investment objectives

 Growth funds
Emphasis on long-term growth through stocks
         > AMCAP Fund®
EuroPacific Growth Fund®
The Growth Fund of America®
The New Economy Fund®
New Perspective Fund®
New World FundSM
SMALLCAP World Fund®

 Growth-and-income funds
Emphasis on long-term growth and dividends through stocks
American Mutual Fund®
Capital World Growth and Income FundSM
Fundamental InvestorsSM
The Investment Company of America®
Washington Mutual Investors FundSM

 Equity-income funds
Emphasis on above-average income and growth through stocks and/or bonds
Capital Income Builder®
The Income Fund of America®

 Balanced fund
Emphasis on long-term growth and current income through stocks and bonds
American Balanced Fund®

 Bond funds
Emphasis on current income through bonds
American High-Income TrustSM
The Bond Fund of AmericaSM
Capital World Bond Fund®
Intermediate Bond Fund of America®
         Short-Term Bond Fund of AmericaSM
U.S. Government Securities FundSM

 Tax-exempt bond funds
Emphasis on tax-free current income through municipal bonds
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of AmericaSM
The Tax-Exempt Bond Fund of America®
State-specific tax-exempt funds
The Tax-Exempt Fund of California®
The Tax-Exempt Fund of Maryland®
The Tax-Exempt Fund of Virginia®

 Money market funds
The Cash Management Trust of America®
The Tax-Exempt Money Fund of AmericaSM
The U.S. Treasury Money Fund of AmericaSM

 American Funds Target Date Retirement SeriesSM

The Capital Group Companies

American Funds

Capital Research and Management

Capital International

Capital Guardian

Capital Bank and Trust

Lit. No. MFGEAR-902-0407P

Litho in USA AGD/LPT/8051-S7518

Printed on recycled paper


ITEM 2 - Code of Ethics

The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made to American Funds Service Company at 800/421-0180 or to the Secretary of the Registrant, 333 South Hope Street, Los Angeles, California 90071.


ITEM 3 - Audit Committee Financial Expert

The Registrant’s board has determined that Martin Fenton, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.


ITEM 4 - Principal Accountant Fees and Services

 Registrant:
  a) Audit Fees:
   2006$62,000
   2007$67,000
    
  b) Audit-Related Fees:
   2006$6,000
   2007$7,000
   The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants.
  c) Tax Fees:
   2006$6,000
   2007$6,000
   The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns.
  d) All Other Fees:
   2006None
   2007None
    
 
 
Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below):
  a) Not Applicable
  b) Audit-Related Fees:
   2006$439,000
   2007$656,000
   The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants.
  c) Tax Fees:
   2006None
   200712,000
   The tax fees consist of consulting services relating to the Registrant’s investments.
  d) All Other Fees:
   2006$36,000
   2007None
   The other fees consist of consulting services related to the Registrant’s compliance program.

The Registrant’s Audit Committee will pre-approve all audit and permissible non-audit services that the Committee considers compatible with maintaining the auditors’ independence. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The Committee will not delegate its responsibility to pre-approve these services to the investment adviser. The Committee may delegate to one or more Committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full Committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser, and affiliates.

Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant and the adviser and affiliates that provide ongoing services to the Registrant were $945,000 for fiscal year 2006 and $942,000 for fiscal year 2007. The non-audit services represented by these amounts were brought to the attention of the Committee and considered to be compatible with maintaining the auditors’ independence.


ITEM 5 - Audit Committee of Listed Registrants

Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.


ITEM 6 - Schedule of Investments
 
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AMCAP Fund
Investment portfolio

February 28, 2007


  Market value
Common stocks — 85.57%Shares(000)
   
INFORMATION TECHNOLOGY — 20.28%
  
Cisco Systems, Inc.1
24,604,300$ 638,236
Oracle Corp.1
33,171,659545,010
Intel Corp.25,567,000507,505
Google Inc., Class A1
1,030,000462,934
Microsoft Corp.15,595,000439,311
Texas Instruments Inc.12,250,000379,260
eBay Inc.1
11,170,000358,110
Affiliated Computer Services, Inc., Class A1
3,610,000187,612
Automatic Data Processing, Inc.3,500,000174,265
Altera Corp.1
5,250,000110,828
Maxim Integrated Products, Inc.3,375,000110,531
First Data Corp.4,180,000106,715
Linear Technology Corp.3,200,000106,208
Accenture Ltd, Class A2,710,00096,747
Yahoo! Inc.1 
3,000,00092,580
Intuit Inc.1 
3,100,00091,481
Intersil Corp., Class A3,400,00089,930
Microchip Technology Inc.2,500,00089,000
Analog Devices, Inc.2,213,20080,228
EMC Corp.1
5,400,00075,330
NAVTEQ Corp.1 
2,353,50075,218
Paychex, Inc.1,600,00065,008
Xilinx, Inc.2,500,00064,050
Dell Inc.1
2,300,00052,555
Applied Materials, Inc.2,700,00050,139
Rogers Corp.1
750,00036,307
KLA-Tencor Corp.700,00036,218
Jabil Circuit, Inc.1,087,00029,045
National Instruments Corp.768,75020,626
Cadence Design Systems, Inc.1 
796,40015,880
Solectron Corp.1
4,500,00014,490
  
5,201,357
   
CONSUMER DISCRETIONARY — 18.68%
  
Lowe’s Companies, Inc.20,800,000677,248
Target Corp.9,250,000569,153
Carnival Corp., units8,525,200395,740
Johnson Controls, Inc.3,390,000317,982
Best Buy Co., Inc.6,300,000292,761
YUM! Brands, Inc.3,738,000216,580
Williams-Sonoma, Inc.2
6,000,000202,560
Harley-Davidson, Inc.2,896,900190,906
Ross Stores, Inc.5,525,000181,054
Brinker International, Inc.4,687,500159,422
Time Warner Inc.7,647,500155,627
E.W. Scripps Co., Class A3,100,000140,585
Walt Disney Co.4,000,000137,040
Tractor Supply Co.1,2 
2,525,000129,204
Harman International Industries, Inc.1,100,000109,076
IAC/InterActiveCorp1
2,557,500100,254
Comcast Corp., Class A, special nonvoting stock1
3,750,00095,437
OSI Restaurant Partners, Inc.2,250,00090,000
Kohl’s Corp.1
1,275,00087,962
Gentex Corp.5,130,00085,722
P.F. Chang’s China Bistro, Inc.1,2
1,650,00072,089
Expedia, Inc.1
3,386,60071,999
Dollar General Corp.4,250,00071,740
Applebee’s International, Inc.2,500,00063,900
Discovery Holding Co., Class A1 
3,245,00052,115
Amazon.com, Inc.1
1,200,00046,968
Liberty Media Holding Corp., Liberty Interactive, Series A1
1,750,00041,247
Fossil, Inc.1
1,415,00038,092
  
4,792,463
   
HEALTH CARE — 16.19%
  
UnitedHealth Group Inc.12,106,400631,954
WellPoint, Inc.1
6,700,000531,913
Medco Health Solutions, Inc.1
4,510,000304,921
Medtronic, Inc.5,200,000261,872
Forest Laboratories, Inc.1 
4,717,300244,167
Alcon, Inc.1,730,000215,592
St. Jude Medical, Inc.1
4,929,200195,443
Roche Holding AG982,000175,176
Cephalon, Inc.1
2,000,000142,160
Medicis Pharmaceutical Corp., Class A2
3,625,000131,805
Amgen Inc.1
2,024,100130,069
Bristol-Myers Squibb Co.4,225,000111,498
Lincare Holdings Inc.1 
2,800,000109,340
Biogen Idec Inc.1
2,380,000107,552
IDEXX Laboratories, Inc.1 
1,100,00094,798
Caremark Rx, Inc.1,500,00092,385
Becton, Dickinson and Co.1,200,00091,188
Genentech, Inc.1 
1,000,00084,370
Express Scripts, Inc.1 
1,080,00081,443
Abbott Laboratories1,400,00076,468
McKesson Corp.1,100,00061,336
Haemonetics Corp.1 
1,190,00053,550
AstraZeneca PLC880,00049,625
Eli Lilly and Co.900,00047,376
Boston Scientific Corp.1 
2,547,89041,556
Johnson & Johnson500,00031,525
Mentor Corp.607,10029,147
Henry Schein, Inc.1
500,00026,085
  
4,154,314
   
   
FINANCIALS — 7.89%
  
Fannie Mae8,640,000$ 490,147
Capital One Financial Corp.5,651,200435,594
American International Group, Inc.4,365,000292,892
Wachovia Corp.3,307,008183,109
Freddie Mac2,550,000163,659
Wells Fargo & Co.3,440,000119,368
M&T Bank Corp.959,230115,031
Commerce Bancorp, Inc.3,000,000100,260
Bank of New York Co., Inc.1,740,00070,679
City National Corp.510,00036,812
Arthur J. Gallagher & Co.600,00017,178
  
2,024,729
   
CONSUMER STAPLES — 6.05%
  
PepsiCo, Inc.5,000,000315,750
L’Oréal SA2,300,000240,712
Altria Group, Inc.2,500,000210,700
Avon Products, Inc.4,000,000146,640
Church & Dwight Co., Inc.2,867,800137,511
Dean Foods Co.1
2,500,000112,600
Wm. Wrigley Jr. Co.1,870,00093,126
Costco Wholesale Corp.1,600,00089,424
CVS Corp.2,300,00072,243
Walgreen Co.1,600,00071,536
Wal-Mart Stores, Inc.1,000,00048,300
Bunge Ltd.160,00012,698
  
1,551,240
   
ENERGY — 5.96%
  
Schlumberger Ltd.6,310,000396,268
Devon Energy Corp.3,020,000198,444
Newfield Exploration Co.1 
3,795,000164,020
FMC Technologies, Inc.1 
2,285,000150,307
Apache Corp.2,150,000147,340
EOG Resources, Inc.2,122,900143,805
Murphy Oil Corp.2,200,000114,004
Smith International, Inc.2,130,00087,330
Noble Corp.1,200,00084,264
ConocoPhillips650,00042,523
  
1,528,305
   
INDUSTRIALS — 5.52%
  
Precision Castparts Corp.3,640,000331,131
Robert Half International Inc.6,800,000265,676
United Parcel Service, Inc., Class B3,200,000224,608
General Electric Co.5,400,000188,568
Avery Dennison Corp.1,744,200115,919
FedEx Corp.790,00090,202
Mine Safety Appliances Co.2
1,942,75078,973
United Technologies Corp.1,000,00065,630
Southwest Airlines Co.3,685,00055,754
  
1,416,461
   
   
TELECOMMUNICATION SERVICES — 2.55%
  
Sprint Nextel Corp., Series 115,970,000$ 307,902
Telephone and Data Systems, Inc., Special Common Shares2,000,000102,480
Telephone and Data Systems, Inc.1,575,00087,712
CenturyTel, Inc.2,690,000120,377
United States Cellular Corp.1
501,60035,990
  
654,461
   
MATERIALS — 0.30%
  
Sealed Air Corp.1,200,000
77,328
   
   
UTILITIES — 0.10%
  
Duke Energy Corp.1,299,000
25,577
   
   
MISCELLANEOUS — 2.05%
  
Other common stocks in initial period of acquisition 
525,051
   
   
Total common stocks (cost: $16,110,535,000)
 
21,951,286
   
   
 Principal amount 
Short-term securities — 14.03%(000) 
   
Federal Home Loan Bank 5.13%-5.18% due 3/9-5/9/2007$297,161295,302
Procter & Gamble International Funding S.C.A. 5.21%-5.23% due 3/13-6/1/20073
273,600271,446
Johnson & Johnson 5.17%-5.18% due 3/12-5/8/20073
254,400252,896
CAFCO, LLC 5.235%-5.25% due 3/6-5/4/20073
153,500152,567
Ciesco LLC 5.23%-5.235% due 4/4-4/11/20073 
100,00099,450
Bank of America Corp. 5.23%-5.245% due 3/5-5/16/2007222,400221,338
Ranger Funding Co. LLC 5.25% due 3/1/20073
23,20023,197
Park Avenue Receivables Co., LLC 5.21%-5.23% due 3/6-4/23/20073
123,000122,434
Jupiter Securitization Co., LLC 5.23%-5.24% due 4/10-4/25/20073
66,10065,600
J.P. Morgan Chase & Co. 5.24% due 4/11/200750,00049,700
Clipper Receivables Co., LLC 5.23%-5.25% due 3/2-4/3/20073
234,000233,394
Variable Funding Capital Corp. 5.23%-5.245% due 3/2-4/5/20073
215,800215,313
General Electric Capital Corp. 5.22%-5.23% due 4/5-5/7/2007100,00099,268
Edison Asset Securitization LLC 5.23%-5.24% due 3/13-4/27/20073
75,00074,695
General Electric Co. 5.23% due 3/22/200720,80020,733
Freddie Mac 5.12%-5.18% due 3/9-5/29/2007163,250162,366
Atlantic Industries 5.19%-5.22% due 3/6-4/26/20073
95,25094,853
Coca-Cola Co. 5.19%-5.20% due 4/20-4/26/20073 
60,00059,536
CIT Group, Inc. 5.22%-5.24% due 3/5-5/1/20073 
135,000134,181
Abbott Laboratories 5.18%-5.22% due 3/20-3/28/20073
123,670123,209
Wal-Mart Stores Inc. 5.18%-5.20% due 3/6-4/17/20073 
115,850115,516
International Lease Finance Corp. 5.205%-5.22% due 3/20-5/18/200772,70072,211
American General Finance Corp. 5.20% due 3/12/200740,00039,930
Union Bank of California, N.A. 5.28%-5.285% due 4/12-4/20/200780,00080,000
UnionBanCal Commercial Funding Corp. 5.23% due 3/12/200720,40020,364
IBM Capital Inc. 5.19%-5.21% due 3/7-3/16/20073
72,00071,903
IBM Corp. 5.18% due 3/14/20073
16,60016,566
Fannie Mae 5.12%-5.155% due 3/13-3/23/200782,60082,384
Eli Lilly and Co. 5.19% due 3/14-3/23/20073 
63,70063,553
Merck & Co. Inc. 5.20% due 4/24-4/27/200750,00049,591
Hershey Co. 5.19%-5.20% due 3/1-3/23/20073
45,06044,974
NetJets Inc. 5.20% due 4/27-5/1/20073
38,30037,983
FCAR Owner Trust I 5.26% due 3/16/200725,00024,941
Becton, Dickinson and Co. 5.21% due 3/21/200725,00024,924
Colgate-Palmolive Co. 5.19% due 3/29/20073 
25,00024,895
Wm. Wrigley Jr. Co. 5.20% due 5/15/20073
25,00024,726
Triple-A One Funding Corp. 5.24% due 4/20/20073
23,63223,466
AT&T Inc. 5.24% due 3/19/20073
6,0005,983
Emerson Electric Co. 5.18% due 3/16/20073
4,5004,490
   
   
Total short-term securities (cost: $3,599,738,000)
 
3,599,878
   
Total investment securities (cost: $19,710,273,000)
 
25,551,164
Other assets less liabilities
 
102,363
   
Net assets
 
$25,653,527

“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.

1Security did not produce income during the last 12 months.
2Represents an affiliated company as defined under the Investment Company Act of 1940.
3Restricted security that can be resold only to institutional investors. In practice, this security is typically as liquid as unrestricted securities in the portfolio. The total value of all such restricted securities was $2,356,826,000, which represented 9.19% of the net assets of the fund.

 
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.
 
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from a financial adviser and should be read carefully before investing.
 
 
MFGEFP-902-0407-S6899
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO

To the Shareholders and Board of Directors of
AMCAP Fund, Inc

We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of AMCAP Fund, Inc. (the “Fund”) as of February 28, 2007, and for the year then ended and have issued our report thereon dated April 10, 2007, which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR. Our audit also included the Fund’s investment portfolio (the “Schedule”) as of February 28, 2007, appearing in Item 6 of this Form N-CSR. This Schedule is the responsibility of the Fund’s management. Our responsibility is to express an opinion based on our audit. In our opinion, the Schedule referred to above, when considered in relation to the basic financial statements taken as a whole of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.



DELOITTE & TOUCHE LLP

Costa Mesa, California
April 10, 2007

 
ITEM 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.


ITEM 8 - Portfolio Managers of Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.


ITEM 9 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.


ITEM 10 - Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of directors since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the Board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of directors. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating committee.
 
 
 

 

ITEM 11 - Controls and Procedures

(a)The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.
  
(b)There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.


ITEM 12 - Exhibits

(a)(1)The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto.
  
(a)(2)The certifications required by Rule 30a-2 of the Investment Company Act of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.
 
 
 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 AMCAP FUND, INC.
  
 
By /s/ Claudia P. Huntington 
 
Claudia P. Huntington, President and
Principal Executive Officer
  
 Date: May 8, 2007



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


By /s/ Claudia P. Huntington
Claudia P. Huntington, President and
Principal Executive Officer
 
Date: May 8, 2007



By /s/ Karl C. Grauman
Karl C. Grauman, Treasurer and
Principal Financial Officer
 
Date: May 8, 2007