Loading...
Docoh

Amcap Fund (CAFBX)

Filed: 7 May 08, 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 29, 2008





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, 10th Floor
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

Navigating a long-term investment course

[photo of a man on a sailboat in the ocean]
 
Annual report for the year ended February 29, 2008
 

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. For more than 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: 
Navigating a long-term investment course6
Summary investment portfolio12
Financial statements16
Board of directors and other officers28
What makes American Funds different?back cover

Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for 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.

Here are returns on a $1,000 investment with all distributions reinvested for periods ended March 31, 2008 (the most recent calendar quarter-end):    
          
Class A shares 1 year  5 years  10 years 
Reflecting 5.75% maximum sales charge         
          
Average annual total return     8.74%  5.79%
Cumulative total return  –10.68%  52.07%  75.63%

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

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver 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.
 

 
Fellow shareholders:

[photo of a person holding onto a sailboats' steering wheel]
 
Fiscal 2008 was a turbulent year. While the stock market rose for most of the first half, an escalating wave of events caused weakness in the second half. Beginning with a slowdown in the housing industry brought on by too much supply and easy credit, problems in mortgage-backed securities began to appear and then rolled over into the broader financial markets. As a result, a full-blown credit crunch has developed, and the economy has slowed. By the end of AMCAP’s fiscal year on February 29, 2008, the Federal Reserve had responded by lowering the federal funds rate and instituting other actions to support the financial markets.

In this difficult environment, AMCAP Fund posted a return of –3.1%, compared with the –3.6% return of the unmanaged Standard and Poor’s 500 Composite Index, a broad measure of mostly large U.S. stocks. As the table below shows, AMCAP did slightly better than the –3.4% return of the Lipper Multi-Cap Core Funds Index and slightly trailed the –3.0% return of the Lipper Growth Funds Index.

Over the longer term, AMCAP continued to surpass the S&P 500 and its two peer group indexes by a significant margin. For the 10 years ended February 29, 2008, AMCAP produced a cumulative total return of 97.4%, compared with 49.0% by the S&P 500, 33.1% by the Lipper Growth Funds Index and 59.4% by the Lipper Multi-Cap Core Funds Index.

On a cumulative basis during its lifetime of almost 41 years, AMCAP has returned nearly twice as much as the S&P 500. On an annual basis during this period, AMCAP has produced an average annual total return of 11.9%, compared with 10.2% by the S&P 500, 9.1% by the Lipper Growth Funds Index and 9.9% by the Lipper Multi-Cap Core Funds Index.

[Begin Sidebar]
Cumulative total returns (for periods ended 2/29/08)         
          
  1 year  5 years  10 years 
          
AMCAP (Class A shares)  –3.1%  65.2%  97.4%
Standard & Poor’s 500 Composite Index1
  –3.6   73.3   49.0 
Lipper Multi-Cap Core Funds Index2
  –3.4   83.8   59.4 
Lipper Growth Funds Index2
  –3.0   66.6   33.1 

AMCAP’s lifetime results (5/1/67–2/29/08)      
       
  Cumulative  Average annual 
  total return  total return 
       
AMCAP  9,858.2%  11.9%
Standard & Poor’s 500 Composite Index1
  5,149.1   10.2 
Consumer Price Index (inflation)3
  539.6   4.6 
Lipper Multi-Cap Core Funds Index2
  4,616.4   9.9 
Lipper Growth Funds Index2
  3,462.9   9.1 

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

Investment results analysis

Energy service, production and exploration companies helped the fund’s results. The oil and gas industry benefited from rising crude oil prices and continuing demand from developing nations. Among the fund’s major contributors were EOG Resources, an oil and gas production company (+75.7%); Devon Energy, an independent producer of oil and gas (+56.3%); and Schlumberger, a provider of oil services and technology, and our ninth-largest holding (+37.7%). Other companies that helped included Medco Health Solutions, a manager of pharmacy benefits (+31.1%); Precision Castparts, a manufacturer of jet engine parts and industrial tools (+21.3%); and YUM! Brands, a quick-service restaurant company (+18.9%).

Financial companies detracted from results. Early in the fiscal year, investors first became concerned about the potential impact of loan quality and liquidity problems on the profits and balance sheets of financial companies. In the second half of the fiscal year, many of the fears were realized in a string of losses and write-offs. While virtually any exposure to this group was negative in the past 12 months, AMCAP held a relatively small position in financials (8.4% of net assets as of August 31, 2007, compared with 20.1% for the S&P 500). Among the fund’s financial holdings were Fannie Mae (–51.3%), Capital One Financial (–40.3%) and American International Group (–30.2%).

Retail companies were affected by a slowing U.S. economy, the housing industry slump and the potential impact on consumer spending. Two of our larger consumer discretionary holdings are Lowe’s, a large, do-it-yourself home improvement store operator (–26.4%) and consumer electronics retailer Best Buy (–7.4%).

[Begin Sidebar]
AMCAP’s last 10 years   
    
One-year total returns for the past 10 fiscal years (ended 2/28 or 2/29)   
    
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 
2008  –3.1 
     
Cumulative total return for the 10-year period ended 2/29/2008
  97.4%
     
Average annual total return for the 10-year period ended 2/29/2008
  7.0%
[End Sidebar]

Looking ahead

In last year’s annual report, we wrote that “We continue to be sensitive to risk at a time when many investors are not.” In the past 12 months, many of our concerns about the level of complexity and leverage that has been injected into the world’s financial system have come to pass. We do not know how long it will take for the system to deleverage or how much longer bad news will trump good news. That said, however, this is a reckoning that had to take place at some time, and its resolution should make our economy much healthier in the long run.

At AMCAP we will continue to search for high-quality growth companies with a history of above-average growth, a sustainable competitive edge and good future prospects. Indeed, investing in quality companies at attractive prices is the right strategy in any market. These companies have some combination of strong management, superior products, stable customers, good balance sheets and solid, long-term growth prospects. While very few companies can ride completely unscathed through an economic slowdown, we feel that having a steady hand during turbulent times can help us stay with the best growth companies and hopefully find others to invest in at attractive prices.

We remind our shareholders that this current crisis is only the latest in a long pattern of stock market bubbles. While the recent decline in housing and the credit crunch seem unprecedented, they are not. In our feature story on page 6, we explain what led to the current situation, how it compares with other periods of market excess and what all this means for AMCAP shareholders.

As always, we recommend that you take a long-term perspective toward your mutual fund investment and that you continue with the financial plan that you and your investment adviser have carefully worked out.

Cordially,
 
/s/ R. Michael Shanahan
R. Michael Shanahan
Vice Chairman of the Board
 
/s/ Claudia P. Huntington
Claudia P. Huntington
President

April 8, 2008

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

 
Other share class results

Class B, Class C, Class F and Class 529

Fund results shown are for past periods and are not predictive of results for 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, 2008 (the most recent calendar quarter-end):         
  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  –10.34%  8.93%  2.61%
Not reflecting CDSC  –5.91   9.21   2.61 
             
Class C shares — first sold 3/15/01
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  –6.87   9.14   3.18 
Not reflecting CDSC  –5.98   9.14   3.18 
             
Class F shares* — first sold 3/16/01
            
Not reflecting annual asset-based fee charged by            
sponsoring firm  –5.22   10.01   4.25 
             
Class 529-A shares — first sold 2/15/02
            
Reflecting 5.75% maximum sales charge  –10.68   8.68   4.03 
Not reflecting maximum sales charge  –5.24   9.98   5.04 
             
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  –10.45   8.75   4.44 
Not reflecting CDSC  –6.02   9.04   4.44 
             
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  –6.91   9.06   4.45 
Not reflecting CDSC  –6.02   9.06   4.45 
             
Class 529-E shares* — first sold 3/7/02
  –5.55   9.62   4.08 
             
Class 529-F shares* — first sold 9/17/02
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  –5.09   10.04   9.20 
             
*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 the waiver 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.

Fund results shown are for Class A shares and 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 Results are for past periods and are not predictive of results for 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.

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 29, 2008.

As you can see, that $10,000 grew to $937,689 with all distributions reinvested, a gain of 9,277%. Over the same period, $10,000 would have grown to $524,909 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, 1998. At that time, according to the table, the value of the investment illustrated here was $475,003. Since then, it has nearly doubled in value, to $937,689. Thus, in that same 10-year period, the value of your investment — regardless of size — has also nearly doubled.

[Begin Sidebar]
Average annual total returns based on a $1,000 investment         
(for periods ended February 29, 2008)*         
          
  1 year  5 years  10 years 
          
Class A shares  –8.72%  9.26%  6.41%
             
*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 the waiver 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. 
[End Sidebar]
 
 
 
[begin mountain chart]
  
 S&P 500 with dividends reinvested5
  
 AMCAP with dividends reinvested4
  
 Consumer Price Index (inflation)6
 
          
        
5/1/1967 $10,000  $9,425  $10,000 
2/29/1968 $9,778  $10,056  $10,332 
2/28/1969 $11,074  $12,212  $10,816 
2/28/1970 $10,442  $11,835  $11,480 
2/28/1971 $11,713  $12,643  $12,054 
2/29/1972 $13,305  $14,902  $12,477 
2/28/1973 $14,345  $13,978  $12,961 
2/28/1974 $12,776  $11,037  $14,260 
2/28/1975 $11,354  $9,903  $15,861 
2/29/1976 $14,453  $13,883  $16,858 
2/28/1977 $15,062  $14,173  $17,855 
2/28/1978 $13,807  $16,612  $19,003 
2/28/1979 $16,105  $22,738  $20,876 
2/29/1980 $20,071  $33,541  $23,837 
2/28/1981 $24,400  $40,548  $26,556 
2/28/1982 $22,175  $42,643  $28,580 
2/28/1983 $30,690  $61,456  $29,577 
2/29/1984 $34,013  $62,128  $30,937 
2/28/1985 $41,108  $72,165  $32,024 
2/28/1986 $53,636  $88,738  $33,021 
2/28/1987 $69,462  $115,664  $33,716 
2/29/1988 $67,586  $112,037  $35,045 
2/28/1989 $75,608  $122,827  $36,737 
2/28/1990 $89,863  $140,027  $38,671 
2/28/1991 $103,018  $163,492  $40,725 
2/29/1992 $119,450  $196,856  $41,873 
2/28/1993 $132,158  $208,557  $43,233 
2/28/1994 $143,149  $232,137  $44,320 
2/28/1995 $153,672  $240,047  $45,589 
2/29/1996 $206,941  $310,345  $46,798 
2/28/1997 $261,046  $346,783  $48,218 
2/28/1998 $352,382  $475,003  $48,912 
2/28/1999 $421,935  $575,089  $49,698 
2/29/2000 $471,431  $703,358  $51,299 
2/28/2001 $432,799  $724,638  $53,112 
2/28/2002 $391,654  $673,327  $53,716 
2/28/2003 $302,860  $567,618  $55,317 
2/29/2004 $419,452  $777,420  $56,254 
2/28/2005 $448,688  $808,037  $57,946 
2/28/2006 $486,349  $895,855  $60,030 
2/28/2007 $544,532  $968,098  $61,480 
2/29/2008 $524,909  $937,689  $63,956 
[end mountain chart]
 

Year ended                     
February 28 or 29  19683 1969  1970  1971  1972  1973  1974 
                       
Total value                      
(dollars in thousands)                      
Dividends reinvested    $.1   .2   .2   .2   .2   .2 
Value at fiscal year-end1
 $10.1   12.2   11.8   12.6   14.9   14.0   11.0 
AMCAP total return  0.6%  21.4   (3.1)  6.8   17.9   (6.2)  (21.0)
                             
Year ended                            
February 28 or 29 1975  1976  1977  1978  1979  1980  1981 
                             
Total value                            
(dollars in thousands)                            
Dividends reinvested  .3   .3   .2   .3   .3   .4   .7 
Value at fiscal year-end1
  9.9   13.9   14.2   16.6   22.7   33.5   40.5 
AMCAP total return  (10.3)  40.2   2.1   17.2   36.9   47.5   20.9 
                             
Year ended                            
February 28 or 29 1982  1983  1984  1985  1986  1987  1988 
                             
Total value                            
(dollars in thousands)                            
Dividends reinvested  2.6   1.2   1.6   1.9   1.5   1.6   3.0 
Value at fiscal year-end1
  42.6   61.5   62.1   72.2   88.7   115.7   112.0 
AMCAP total return  5.2   44.1   1.1   16.2   23.0   30.3   (3.1)
                             
Year ended                            
February 28 or 29 1989  1990  1991  1992  1993  1994  1995 
                             
Total value                            
(dollars in thousands)                            
Dividends reinvested  3.2   3.2   3.3   2.2   2.3   1.9   2.4 
Value at fiscal year-end1
  122.8   140.0   163.5   196.9   208.6   232.1   240.0 
AMCAP total return  9.6   14.0   16.8   20.4   5.9   11.3   3.4 
                             
Year ended                            
February 28 or 29 1996  1997  1998  1999  2000  2001  2002 
                             
Total value                            
(dollars in thousands)                            
Dividends reinvested  3.4   2.6   2.5   3.7   3.3   4.1   3.7 
Value at fiscal year-end1
  310.3   346.8   475.0   575.1   703.4   724.6   673.3 
AMCAP total return  29.3   11.7   37.0   21.1   22.3   3.0   (7.1)
                             
Year ended                            
February 28 or 29 2003  2004  2005  2006  2007  2008     
                             
Total value                            
(dollars in thousands)                            
Dividends reinvested  1.1   .1   2.0   4.1   7.2   11.4     
Value at fiscal year-end1
  576.6   777.4   808.0   895.9   968.1   937.7     
AMCAP total return  (15.7)  37.0   3.9   10.9   8.1   (3.1)    

Average annual total return for 40-3/4 years 11.8%4
 

 
1As 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.
 
2The maximum initial sales charge was 8.5% prior to July 1, 1988.
 
3For the period May 1, 1967 (when the fund began operations), through February 29, 1968.
 
4Includes reinvested dividends of $84,803 and reinvested capital gain distributions of $597,900.
 
5The S&P 500 cannot be invested in directly.
 
6Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.

The market indexes are unmanaged and their results do not reflect the effect of sales charges, commissions or expenses. The results shown are before taxes on fund distributions and sale of fund shares.

[photo of a sail]
[photo of a divider caliper on top of a map]
[photo of a woman in a sailboat in open water]
 
[Begin Sidebar]
This market can have a silver lining. … Our perspective is to take the longer view and invest in companies that continue to have good growth opportunities, even though the near term may be hard to predict.
— Claudia Huntington, president
[End Sidebar]

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

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

 
Navigating a long-term investment course

In the stock, bond and housing markets these days, investors are navigating through turbulent waters. Market volatility has been driven by increasing defaults in the subprime mortgage business, a nationwide housing slump, significant losses by many large financial companies and a general tightening in credit for small and large borrowers. Concerns are also increasing about the strength of the U.S. consumer.

At AMCAP Fund, despite the turmoil in the financial markets, we remain on our long-term course of investing in companies with a history of proven growth and good prospects for superior future growth. “Our long-term focus helps us keep our perspective during periods of market excess,” says Claudia Huntington, president of AMCAP.

In past annual reports (notably 2001), we have reported to shareholders about market bubbles, or periods of market excess that occur every so often. The recent decline in housing, financial and consumer discretionary stocks may seem scary and unprecedented, but it is only the latest in a long pattern of stock market excess followed by contraction. In fact, our 2001 annual report was published during a difficult period which followed the collapse of the so-called “TMT” (technology-media-telecommunications) bubble of the late 1990s. At that time we observed that “long-term opportunities in technology and communication still remain. There will be fewer companies coming out of this decline, but the survivors should be stronger and more seasoned. We will continue to maintain our discipline of paying a reasonable price for solid growth.” Those words ring true today, though in a different context.

Given that we are now on the downside of the credit bubble, we talked with AMCAP’s four portfolio counselors to gain perspective on what the current market excess means for the fund’s shareholders.

The home has long been the bedrock asset of most American families. Why did prices rise so high? What has caused the current housing bubble and why did it deflate?

First, a little background is helpful. “If you go back 15 years, you will see that home prices had lagged compared with financial assets for a long period of time,” recalls Tim Armour, veteran AMCAP portfolio counselor. “Recently, low interest rates, interest-only mortgages and relaxed mortgage underwriting standards helped fuel a housing price boom. Individuals were able to pay more to buy homes because they could borrow money more easily at low rates.” In addition, the easy availability of money from both banks and alternative asset classes fueled overbuilding by housing developers.

Speculators exacerbated the housing mania. Instead of investing in a home for life as many of our parents and grandparents did, many homeowners “flipped” houses to cash in on steadily rising home prices. The housing bubble grew out of the same over-enthusiasm that gave rise to the 1995–2000 stock boom, according to Yale economist Robert J. Shiller, who wrote the book Irrational Exuberance. Once stocks fell in early 2000, real estate became the primary outlet for the speculative frenzy that the stock market had unleashed, Shiller says.

Securitization (the packaging of hundreds of individual mortgage loans into securities to be sold to investors around the world) spread the risk but added complexity. Subprime mortgage loans (those held by less credit-worthy borrowers) grew rapidly and were included in many of the new investment products called collateralized debt obligations. “Financial institutions thought they were passing off the risk to investors, but they ended up holding more than they realized because they weren’t able to sell all the mortgage-backed securities they sponsored,” Tim says.

[photo of the side of a sailboat in open water]
 
[Begin Sidebar]
As the market and the news media stories get more and more negative, I get more and more positive. … I see the current environment as potentially creating opportunities.
— Ross Sappenfield, portfolio counselor
[End Sidebar]

The bubble of high home prices and low adjustable rate or no-money-down loans began to deflate as mortgage interest rates climbed to more normal levels in 2006. A growing number of subprime mortgage holders were unable to meet the increased monthly payments under the higher rates. Homes were abandoned and bankruptcies declared.

Meanwhile, financial institutions and hedge funds had actively traded investment products based on the mortgage-backed securities and collateralized debt obligations. New mortgage products were developed for short-term trading. When the loans went bad, it turned out that the complex debt instruments being traded were more risky than previously thought. In addition, the use of leverage by hedge funds and other investors aggravated the problem on the downside just as leverage had added to returns on the upside.

The housing problem was just one part of a larger “credit complexity” bubble, Claudia explains. “You have a system with multiple layers — and multiple products within the layers — and multiple assumptions based on what each particular layer’s risk is. If one assumption fails, that affects the next layer up or the next layer down. What makes it even more difficult is that the bookkeeping of all these layers has been imperfect at times and certainly obscure.” Banks stopped lending money easily and demanded higher collateral, bringing on a “credit crunch.” Mortgage holders, businesses and investors around the world were affected by financial innovation gone wrong.

How does the housing/credit/financial complexity bubble compare with past market bubbles?

Many bubbles in the past have been driven by transforming technologies that have fired the imagination of investors. Electric power, railroads, airlines, and radio and television manufacturing companies have transformed the United States, but many of the early investors in these “booms” fared poorly. They invested in fads and companies that weren’t well capitalized and had no staying power. The most recent example of a technology bubble was the Internet-inspired market excess that began in 2000 and ended in mid-2002, during which Standard & Poor’s 500 Composite Index fell 49.1%. AMCAP mostly avoided the Internet boom and bust because “we didn’t invest in many Internet companies at the time,” says Mike Shanahan, vice chairman of the fund. “We avoided most companies in the Internet area because of their weak fundamentals. Many of these companies had strong volume growth — one of the things we look for — but they didn’t meet our earnings goals.”

The current bubble differs from these previous bubbles in that it was built on financial innovation instead of technological innovation, says Mike. “We went from a system where banks held mortgages on their books to one in which banks originate mortgages and then securitize and distribute them. For hundreds of years, the secret of good lending has been to know the borrower. In today’s world, often the lenders no longer know any details about who the borrowers really are.”

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

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

The savings and loan crisis of the late 1980s and early 1990s also had its origins in financial innovation and lax regulation, says Mike, who calls it a “precursor to the current bubble.” In the late 1980s, the balance sheets of the savings and loan associations came under severe pressure from higher interest rates. Congress then substantially loosened S&L lending standards and let the S&Ls diversify into riskier and more profitable commercial real estate lending. At the same time, federally backed insurance at these institutions was raised from $40,000 to $100,000. Not only did this trigger a rush of money into the S&Ls, but “it also further encouraged the S&Ls to increase risk taking and invest deposits way beyond their competence,” Mike says.

What does this all mean for AMCAP shareholders?

AMCAP has not been highly exposed to some of the worst-hit sectors among the financial stocks. “We held comparatively few financial stocks,” Claudia explains. “This was due in part to our own concerns about the risk in the financial markets, but also to our discipline of looking very carefully at the fundamental growth characteristics of any potential investment. Looking forward, it is quite possible that the environment for lending and financial services in general will undergo some changes. The growth engines of the past may not necessarily be those of the future for many companies in this sector. It is our job to discern which companies will remain good growth companies, and whether their stock prices reasonably reflect the potential for future disappointments as well as future growth.”

[photo of a person in a raincoat holding onto the sail of a sailboat]
[photo of rope wrapped around a boat winch]
 
[Begin Sidebar]
For hundreds of years, the secret of good lending has been to know the borrower. In today’s world, often the lenders no longer know any details about who the borrowers really are.
— Michael Shanahan, vice chairman
[End Sidebar]

[Begin Sidebar]
With a longer term point of view, we feel there are some interesting investment opportunities in the financial sector but they will take a while to prove out. The question is: When is the right time and what are the right investment opportunities?
— Tim Armour, portfolio counselor
[End Sidebar]

[photo of part of the deck of a sailboat]
[photo of a woman leaning on rope]
 
The other aspect of this market correction is that it has not hit all industries as hard as the financial sector. In fact, when earnings for companies in the S&P 500 dropped 23.8% in the fourth quarter of 2007 from the prior year, most of that decline was due to the financials. Without them, earnings that quarter would have risen almost 14.6%. According to Claudia, 2008 is likely to be a year in which new industry growth leaders emerge, and they are unlikely to be those of the prior year.

Can AMCAP portfolio counselors and research analysts take advantage of the situation?

Though current market conditions may be challenging, declining stock prices often create buying opportunities by bringing appealing investments into attractive valuation ranges.

The banks and the major institutions involved in home loans have been crushed, Tim says. “Many have had to go out and issue equity because of the amount of bad debt these institutions must write off. With a longer term point of view, we feel there are some interesting investment opportunities in the financial sector but they will take a while to prove out. The question is: When is the right time and what are the right investment opportunities? Our research analysts always strive to identify good investment opportunities and our portfolio counselors will seek to determine the right time to invest.”

Ross Sappenfield, AMCAP portfolio counselor, says he is spending a lot of time researching “companies that have potentially good growth prospects even though they have been battered recently.”

[photo of a seagull flying over open water]
 
Ross says he takes a contrarian approach. “As the market and the news media stories get more and more negative, I get more and more positive. When everyone is euphoric and not worried about risk, that’s when I tend to be more pessimistic. I see the current environment as potentially creating opportunities. However, one has to be careful about stepping in too early. A big risk for a contrarian is moving too soon before either pessimism or euphoria has reached its peak.”

“This market can have a silver lining,” says Claudia. “Whenever there is negative news, there can be opportunities. When sentiment is at its worst, even the best growth companies can be affected through a decline in their valuation or their results, or both. Our perspective is to take the longer view and invest in companies that continue to have good growth opportunities, even though the near term may be hard to predict.”

Shareholders can be reassured that even though the market environment has changed, AMCAP’s approach to investing has not. “We look for quality growth companies of any size and in any industry at reasonable prices,” says Claudia. The approach is well-suited for the recent turbulent market and for the future as well.

[photo of a man on a sailboat in the ocean]
 
[Begin Sidebar]
A wealth of experience 
  
AMCAP Fund’s four portfolio counselors bring together 119 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 Shanahan43
Claudia P. Huntington35
Timothy D. Armour25
C. Ross Sappenfield16
  
Years of experience as of May 1, 2008. 
[End Sidebar]
 
 
 
Summary investment portfolio, February 29, 2008


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]
Industry sector diversification 
Percent of net assets
 
    
Information technology  18.19%
Consumer discretionary  16.81 
Health care  14.10 
Financials  10.87 
Consumer staples  7.88 
Other industries  17.74 
Short-term securities & other assets less liabilities  14.41 
[end pie chart]

 
Common stocks  - 85.59% Shares  Market value (000)  Percent of net assets 
          
Information technology  - 18.19%         
Cisco Systems, Inc. (1)  24,704,300  $602,044   2.44%
Microsoft Corp.  20,895,000   568,762   2.31 
Yahoo! Inc. (1)  14,175,000   393,781   1.60 
Oracle Corp. (1)  20,221,659   380,167   1.54 
Intel Corp.  18,267,000   364,427   1.48 
SAP AG (2)  5,801,892   276,437   1.12 
Texas Instruments Inc.  7,250,000   217,210   .88 
Google Inc., Class A (1)  380,800   179,425   .73 
Other securities      1,502,569   6.09 
       4,484,822   18.19 
             
Consumer discretionary  - 16.81%            
Lowe's Companies, Inc.  24,189,700   579,827   2.35 
Target Corp.  8,316,000   437,505   1.77 
Best Buy Co., Inc.  9,200,000   395,692   1.60 
Carnival Corp., units  8,525,200   335,467   1.36 
Johnson Controls, Inc.  8,570,000   281,610   1.14 
YUM! Brands, Inc.  7,476,000   257,548   1.04 
O'Reilly Automotive, Inc. (1)  (3)  6,794,800   183,188   .74 
Time Warner Inc.  11,681,500   182,348   .74 
Kohl's Corp. (1)  4,025,000   178,871   .73 
Other securities      1,314,164   5.34 
       4,146,220   16.81 
             
Health care  - 14.10%            
UnitedHealth Group Inc.  12,680,000   589,366   2.39 
WellPoint, Inc. (1)  6,950,000   487,056   1.97 
Medtronic, Inc.  5,200,000   256,672   1.04 
Roche Holding AG (2)  1,262,000   247,763   1.00 
Amgen Inc. (1)  4,370,000   198,922   .81 
St. Jude Medical, Inc. (1)  4,005,000   172,135   .70 
Varian Medical Systems, Inc. (1)  3,100,000   162,595   .66 
Other securities      1,363,465   5.53 
       3,477,974   14.10 
             
Financials  - 10.87%            
American International Group, Inc.  10,750,000   503,745   2.04 
Wachovia Corp.  12,404,909   379,838   1.54 
Citigroup Inc.  14,640,000   347,115   1.41 
Fannie Mae  10,605,000   293,228   1.19 
Capital One Financial Corp.  6,151,200   283,140   1.15 
Hudson City Bancorp, Inc.  12,700,000   201,549   .82 
Wells Fargo & Co.  6,440,000   188,241   .76 
Freddie Mac  6,050,000   152,339   .62 
Other securities      331,188   1.34 
       2,680,383   10.87 
             
Consumer staples  - 7.88%            
Walgreen Co.  13,375,800   488,350   1.98 
PepsiCo, Inc.  5,000,000   347,800   1.41 
L'Oréal SA (2)  1,850,000   219,347   .89 
Avon Products, Inc.  5,045,000   192,013   .78 
Altria Group, Inc.  2,500,000   182,850   .74 
Other securities      512,401   2.08 
       1,942,761   7.88 
             
Energy  - 6.76%            
Schlumberger Ltd.  4,990,000   431,386   1.75 
EOG Resources, Inc.  2,122,900   252,604   1.02 
Newfield Exploration Co. (1)  3,795,000   210,167   .85 
Murphy Oil Corp.  2,200,000   176,836   .72 
Other securities      596,470   2.42 
       1,667,463   6.76 
             
Industrials  - 5.31%            
Precision Castparts Corp.  3,440,000   379,742   1.54 
United Parcel Service, Inc., Class B  3,200,000   224,768   .91 
General Electric Co.  6,400,000   212,096   .86 
Robert Half International Inc.  6,800,000   183,260   .74 
Other securities      310,162   1.26 
       1,310,028   5.31 
             
Telecommunication services - 1.43%            
Other securities      353,830   1.43 
             
             
Other - 0.52%            
Other securities      128,558   .52 
             
             
MISCELLANEOUS  -  3.72%            
Other common stocks in initial period of acquisition      917,037   3.72 
             
             
Total common stocks (cost: $18,696,646,000)      21,109,076   85.59 
             
             
             
             
Short-term securities  - 14.24%   
             
             
Federal Home Loan Bank 2.52%-4.285% due 3/13-8/27/2008 $576,452   574,284   2.33 
Freddie Mac 2.50%-4.23% due 3/3-9/10/2008  308,700   307,635   1.25 
Wells Fargo & Co. 2.97%-3.17% due 3/13-3/18/2008  247,500   247,154   1.00 
General Electric Capital Corp. 3.00%-4.37% due 4/24-5/8/2008  160,000   159,138     
General Electric Co. 4.51% due 3/26/2008  35,000   34,918     
Edison Asset Securitization LLC 4.49% due 3/14/2008 (4)  25,000   24,955   .89 
Procter & Gamble International Funding S.C.A. 2.85%-4.22% due 3/7-3/17/2008 (4)  192,000   191,774   .78 
Coca-Cola Co. 2.67%-2.93% due 4/10-5/16/2008 (4)  183,400   182,564   .74 
United Parcel Service Inc. 4.17%-4.40% due 3/3-3/31/2008 (4)  144,800   144,608   .59 
Variable Funding Capital Corp. 3.90%-4.25% due 3/4-3/14/2008 (4)  132,300   132,151   .54 
Lowe's Cos. Inc. 2.80%-2.85% due 3/5-3/24/2008  119,300   119,180   .48 
Fannie Mae 4.05%-4.27% due 3/12-5/28/2008  75,500   75,127   .30 
Other securities      1,317,323   5.34 
       3,510,811   14.24 
             
             
Total short-term securities (cost: $3,509,844,000)      3,510,811   14.24 
             
             
Total investment securities (cost: $22,206,490,000)      24,619,887   99.83 
Other assets less liabilities      42,923   .17 
             
Net assets     $24,662,810   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.            
 

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 29, 2008, appear below.


  Beginning shares  Additions  Reductions  
Ending
 shares
  
Dividend
 income
(000)
  Market value of affiliates at 2/29/2008 (000) 
O'Reilly Automotive, Inc. (1) (5)
  2,140,000   4,654,800   -   6,794,800  $-  $183,188 
Williams-Sonoma, Inc.  6,000,000   -   -   6,000,000   2,760   140,160 
Tractor Supply Co. (1)  2,525,000   -   -   2,525,000   -   94,536 
Medicis Pharmaceutical Corp., Class A  3,625,000   -   -   3,625,000   435   74,349 
P.F. Chang's China Bistro, Inc. (1)  1,650,000   -   -   1,650,000   -   47,074 
Talbots, Inc.  (5)
  2,413,225   644,500   -   3,057,725   1,590   25,012 
Mine Safety Appliances Co. (6)  1,942,750   -   1,061,700   881,050   1,242   - 
                  $6,027  $564,319 
 
 
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) Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Miscellaneous" and "Other securities," was $983,529,000. 
(3) Represents an affiliated company as defined under the Investment Company Act of 1940.     
(4) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the United States in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $1,470,205,000, which represented 5.96% of the net assets of the fund. 
(5) This security was in its initial period of acquisition at 2/28/2007 and was not publicly disclosed. 
(6) Unaffiliated issuer at 2/29/2008.            
             
             
See Notes to Financial Statements            

 
 
Financial statements

Statement of assets and liabilities      
at February 29, 2008 (dollars and shares in thousands, except per-share amounts) 
       
Assets:      
 Investment securities at market:      
  Unaffiliated issuers (cost: $21,424,297) $24,055,568    
  Affiliated issuers (cost: $782,193)  564,319  $24,619,887 
 Cash      161 
 Receivables for:        
  Sales of investments  40,948     
  Sales of fund's shares  39,454     
  Dividends and interest  33,937   114,339 
       24,734,387 
Liabilities:        
 Payables for:        
  Purchases of investments  17,946     
  Repurchases of fund's shares  26,524     
  Investment advisory services  5,734     
  Services provided by affiliates  18,675     
  Directors' deferred compensation  2,267     
  Other  431   71,577 
Net assets at February 29, 2008     $24,662,810 
         
Net assets consist of:        
 Capital paid in on shares of capital stock     $21,313,739 
 Distributions in excess of net investment income      (2,267)
 Undistributed net realized gain      937,841 
 Net unrealized appreciation      2,413,497 
Net assets at February 29, 2008     $24,662,810 
 
 
Total authorized capital stock - 2,000,000 shares, $1.00 par value (1,347,841 total shares outstanding) 
  Net assets  Shares outstanding  Net asset value per share* 
           
Class A $16,387,568   890,290  $18.41 
Class B  1,030,719   58,056   17.75 
Class C  1,518,902   86,165   17.63 
Class F  2,492,460   136,107   18.31 
Class 529-A  466,893   25,428   18.36 
Class 529-B  83,586   4,694   17.81 
Class 529-C  143,631   8,062   17.82 
Class 529-E  26,594   1,462   18.20 
Class 529-F  18,502   1,008   18.36 
Class R-1  40,355   2,248   17.95 
Class R-2  414,968   23,134   17.94 
Class R-3  723,842   39,749   18.21 
Class R-4  528,100   28,805   18.33 
Class R-5  786,690   42,633   18.45 
(*) 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 $19.53 and $19.48, respectively. 
             
See Notes to Financial Statements            
 
 
Statement of operations      
for the year ended February 29, 2008 (dollars in thousands) 
       
Investment income:      
 Income:      
       
  Dividends (net of non-U.S. taxes of $1,968; also includes $6,027 from affiliates) $285,951    
  Interest  216,007  $501,958 
         
 Fees and expenses*:        
  Investment advisory services  85,798     
  Distribution services  90,510     
  Transfer agent services  21,654     
  Administrative services  12,436     
  Reports to shareholders  818     
  Registration statement and prospectus  1,069     
  Postage, stationery and supplies  2,528     
  Directors' compensation  513     
  Auditing and legal  187     
  Custodian  355     
  State and local taxes  272     
  Other  114     
  Total fees and expenses before reimbursements/waivers  216,254     
 Less reimbursements/waivers of fees and expenses:        
  Investment advisory services  8,580     
  Administrative services  135     
  Total fees and expenses after reimbursements/waivers      207,539 
 Net investment income      294,419 
         
Net realized gain and unrealized depreciation on investments and currency:        
 Net realized gain on:        
  Investments (including $7,144 net gain from affiliates)  2,289,028     
  Currency transactions  558   2,289,586 
 Net unrealized (depreciation) appreciation on:        
  Investments  (3,427,494)    
  Currency translations  76   (3,427,418)
   Net realized gain and unrealized depreciation on investments and currency      (1,137,832)
Net decrease in net assets resulting from operations     $(843,413)
         
(*) 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 February 29, 2008  Year ended February 28, 2007
Operations:        
 Net investment income $294,419  $189,175 
 Net realized gain on investments and currency transactions  2,289,586   706,008 
 Net unrealized (depreciation) appreciation on investments and currency translations  (3,427,418)  969,475 
  Net (decrease) increase in net assets resulting from operations  (843,413)  1,864,658 
         
Dividends and distributions paid to shareholders:        
 Dividends from net investment income and currency gain  (272,105)  (161,301)
 Distributions from net realized gain on investments  (1,437,511)  (713,424)
  Total dividends and distributions paid to shareholders  (1,709,616)  (874,725)
         
Net capital share transactions  1,562,312   1,323,416 
         
Total (decrease) increase in net assets  (990,717)  2,313,349 
         
Net assets:        
 Beginning of year  25,653,527   23,340,178 
 End of year (including distributions in excess of and undistributed net investment income: $(2,267) and $46,727, respectively) $24,662,810  $25,653,527 
         
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 529 college savings plan share classes and five retirement plan share classes. The 529 college 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 classInitial sales chargeContingent deferred sales charge upon redemptionConversion feature
Class A and 529-AUp to 5.75%None (except 1% for certain redemptions within one year of purchase without an initial sales charge)None
Class B and 529-BNoneDeclines from 5% to 0% for redemptions within six years of purchaseClass B and 529-B convert to Class A and 529-A, respectively, after eight years
Class CNone1% for redemptions within one year of purchaseClass C converts to Class F after 10 years
Class 529-CNone1% for redemptions within one year of purchaseNone
Class 529-ENoneNoneNone
Class F and 529-FNoneNoneNone
Class R-1, R-2, R-3, R-4 and R-5NoneNone
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 securities outside the U.S.) 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.

Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars 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. On the accompanying financial statements, the effects of changes in 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 currencies other than U.S. dollars 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.

The fund adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, on June 29, 2007. The implementation of FIN 48 resulted in no material liability for unrecognized tax benefits and no material change to the beginning net asset value of the fund.

As of and during the period ended February 29, 2008, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2004 and by state tax authorities for tax years before 2003.

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 currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; deferred expenses; 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 29, 2008, the fund reclassified $557,000 from undistributed net realized gains to undistributed net investment income; and reclassified $71,865,000 from undistributed net investment income and $31,181,000 from undistributed net realized gain to capital paid in on shares of capital stock to align financial reporting with tax reporting.

As of February 29, 2008, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

  (dollars in thousands) 
Undistributed long-term capital gain $937,922 
Gross unrealized appreciation on investment securities  4,202,172 
Gross unrealized depreciation on investment securities  (1,788,856)
Net unrealized appreciation on investment securities  2,413,316 
Cost of investment securities  22,206,571 

The tax character of distributions paid to shareholders was as follows (dollars in thousands):
 
  Year ended February 29, 2008  Year ended February 28, 2007 
  Ordinary income  Long-term capital gains  Total distributions paid  Ordinary income  Long-term capital gains  Total distributions paid 
Share class                  
Class A $202,493  $949,313  $1,151,806  $138,143  $474,443  $612,586 
Class B  3,095   63,326   66,421   665   33,768   34,433 
Class C  3,933   93,635   97,568   945   48,247   49,192 
Class F  31,829   147,270   179,099   19,657   66,410   86,067 
Class 529-A  5,167   25,950   31,117   3,126   11,205   14,331 
Class 529-B  164   4,950   5,114   44   2,354   2,398 
Class 529-C  337   8,394   8,731   67   3,667   3,734 
Class 529-E  209   1,508   1,717   109   663   772 
Class 529-F  237   968   1,205   120   341   461 
Class R-1  118   2,486   2,604   21   1,177   1,198 
Class R-2  1,108   24,659   25,767   215   11,654   11,869 
Class R-3  5,891   42,508   48,399   3,213   20,676   23,889 
Class R-4  6,712   32,121   38,833   3,285   12,219   15,504 
Class R-5  10,812   40,423   51,235   5,167   13,124   18,291 
Total $272,105  $1,437,511  $1,709,616  $174,777  $699,948  $874,725 

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, SM Inc. ("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 29, 2008, total investment advisory services fees waived by CRMC were $8,580,000. As a result, the fee shown on the accompanying financial statements of $85,798,000, which was equivalent to an annualized rate of 0.318%, was reduced to $77,218,000, or 0.286% 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 29, 2008, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A.

Share classCurrently approved limitsPlan limits
Class A0.25%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 29, 2008, the total administrative services fees paid by CRMC were $135,000 for Class R-2. 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 529 college savings 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 for the year ended February 29, 2008, were as follows (dollars in thousands):

Share classDistribution servicesTransfer agent servicesAdministrative services
CRMC administrative servicesTransfer agent servicesCommonwealth of Virginia administrative services
Class A$41,932$20,350Not applicableNot applicableNot applicable
Class B11,764 1,304Not applicableNot applicableNot applicable
Class C17,127
 
 
 
Included
in
administrative services
$2,376$348Not applicable
Class F6,8402,494237Not applicable
Class 529-A98249573$ 480
Class 529-B9019326 90
Class 529-C1,50715638 151
Class 529-E13929427
Class 529-F-173 17
Class R-14465221Not applicable
Class R-23,4186611,396Not applicable
Class R-33,9701,126494Not applicable
Class R-41,48485827Not applicable
Class R-5Not applicable63413Not applicable
Total$90,510$21,654$8,991$2,680$765

Directors’ deferred 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 $513,000, shown on the accompanying financial statements, includes $484,000 in current fees (either paid in cash or deferred) and a net increase of $29,000 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 29, 2008                      
Class A $2,271,915   108,920  $1,097,298   54,393  $(2,652,045)  (127,586) $717,168   35,727 
Class B  76,097   3,786   63,681   3,269   (167,642)  (8,385)  (27,864)  (1,330)
Class C  233,670   11,684   92,706   4,794   (316,185)  (15,938)  10,191   540 
Class F  746,451   35,893   159,739   7,959   (653,098)  (31,831)  253,092   12,021 
Class 529-A  93,127   4,490   31,113   1,547   (39,989)  (1,929)  84,251   4,108 
Class 529-B  9,313   463   5,114   262   (6,528)  (326)  7,899   399 
Class 529-C  30,758   1,525   8,731   447   (16,784)  (836)  22,705   1,136 
Class 529-E  5,191   252   1,717   87   (2,552)  (124)  4,356   215 
Class 529-F  7,865   377   1,205   60   (1,936)  (93)  7,134   344 
Class R-1  16,032   781   2,590   131   (17,338)  (853)  1,284   59 
Class R-2  138,404   6,820   25,729   1,307   (133,315)  (6,573)  30,818   1,554 
Class R-3  252,587   12,248   48,224   2,415   (249,306)  (12,102)  51,505   2,561 
Class R-4  167,376   8,027   38,823   1,932   (175,334)  (8,573)  30,865   1,386 
Class R-5  459,146   21,732   50,913   2,523   (141,151)  (6,860)  368,908   17,395 
Total net increase                                
   (decrease) $4,507,932   216,998  $1,627,583   81,126  $(4,573,203)  (222,009) $1,562,312   76,115 
                                 
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 
                                 
                                 
* 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 $6,876,994,000 and $6,548,961,000, respectively, during the year ended February 29, 2008.
 

 
Financial highlights

      (Loss) income from investment operations (1)  Dividends and distributions                   
  Net asset value, beginning of year  Net investment income (loss)  Net (losses) gains 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 year  
Total return (2) (3)
  Net assets, end of year (in millions)  
Ratio of expenses to average net assets before reimbursements
/waivers
  
Ratio of expenses to average net assets after reimbursements
/waivers (3)
  
Ratio of net income (loss) to average net assets (3)
 
Class A:                                                
 Year ended 2/29/2008 $20.29  $.25     $(.77) $(.52) $(.24)    $(1.12) $(1.36)    $18.41   (3.14)% $16,387   .68%  .65%  1.21%
 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   -    (4)  -   -    (4)  17.50   36.96   11,086   .73   .73   .11 
Class B:                                                               
 Year ended 2/29/2008  19.59   .09      (.76)  (.67)  (.05)      (1.12)  (1.17)      17.75   (3.92)  1,031   1.45   1.42   .44 
 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)
Class C:                                                               
 Year ended 2/29/2008  19.46   .08      (.74)  (.66)  (.05)      (1.12)  (1.17)      17.63   (3.93)  1,519   1.50   1.47   .39 
 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)
Class F:                                                               
 Year ended 2/29/2008  20.20   .25      (.78)  (.53)  (.24)      (1.12)  (1.36)      18.31   (3.19)  2,492   .68   .65   1.20 
 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   -    (4)  -   -    (4)  17.41   36.81   978   .78   .78   .05 
Class 529-A:                                                               
 Year ended 2/29/2008  20.25   .23      (.78)  (.55)  (.22)      (1.12)  (1.34)      18.36   (3.26)  467   .76   .73   1.12 
 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 
Class 529-B:                                                               
 Year ended 2/29/2008  19.65   .06      (.74)  (.68)  (.04)      (1.12)  (1.16)      17.81   (3.99)  84   1.57   1.54   .31 
 Year ended 2/28/2007  18.91   -    (4)  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)
Class 529-C:                                                                
 Year ended 2/29/2008  19.67   .06       (.74)  (.68)  (.05)      (1.12)  (1.17)      17.82   (4.00)  144   1.57   1.54   .31 
 Year ended 2/28/2007  18.93   -    (4)  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)
Class 529-E:                                                                
 Year ended 2/29/2008  20.07   .17       (.76)  (.59)  (.16)      (1.12)  (1.28)      18.20   (3.50)  27   1.06   1.03   .82 
 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)
                                                                 
Class 529-F:                                                                
 Year ended 2/29/2008 $20.26  $.27      $(.77) $(.50) $(.28)     $(1.12) $(1.40)     $18.36   (3.07%) $18   .56%  .53%  1.30%
 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   -    (4)  -   -    (4)  17.46   36.66   3   .89   .89   (.07)
Class R-1:                                                                
 Year ended 2/29/2008  19.80   .08       (.76)  (.68)  (.05)      (1.12)  (1.17)      17.95   (3.93)  40   1.50   1.47   .39 
 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)
Class R-2:                                                                
 Year ended 2/29/2008  19.79   .08       (.76)  (.68)  (.05)      (1.12)  (1.17)      17.94   (3.95)  415   1.53   1.47   .38 
 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   -    (4)  -   -    (4)  17.26   35.80   130   1.91   1.53   (.70)
Class R-3:                                                                
 Year ended 2/29/2008  20.08   .18       (.78)  (.60)  (.15)      (1.12)  (1.27)      18.21   (3.51)  724   1.04   1.01   .85 
 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   -    (4)  .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   -    (4)  -   -    (4)  17.37   36.27   189   1.16   1.15   (.32)
Class R-4:                                                                
 Year ended 2/29/2008  20.22   .24       (.78)  (.54)  (.23)      (1.12)  (1.35)      18.33   (3.22)  528   .73   .70   1.16 
 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 
Class R-5:                                                                
 Year ended 2/29/2008  20.35   .30       (.77)  (.47)  (.31)      (1.12)  (1.43)      18.45   (2.93)  787   .43   .40   1.43 
 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 

 
  Year ended February 28 or 29 
  2008  2007  2006  2005  2004 
                
Portfolio turnover rate for all classes of shares  29%  20%  20%  16%  17%
 
(1) Based on average shares outstanding.          
(2) Total returns exclude any applicable sales charges, including contingent deferred sales charges.
(3) This column reflects the impact, if any, of certain reimbursements/waivers from CRMC.  
    During some of the years shown, CRMC reduced fees for investment advisory services. In addition, during
    some of the years shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.
(4) Amount less than $.01.            
              
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, including the summary investment portfolio, of AMCAP Fund, Inc. (the “Fund”), as of February 29, 2008, 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 the 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 29, 2008, 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 29, 2008, 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 8, 2008




 
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, 2007, through February 29, 2008).
 
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.
 
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.
 
Notes:
 
There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan 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 9/1/2007  Ending account value 2/29/2008  
Expenses paid during period*
  Annualized expense ratio 
             
Class A -- actual return $1,000.00  $905.46  $3.09   .65%
Class A -- assumed 5% return  1,000.00   1,021.69   3.28   .65 
Class B -- actual return  1,000.00   901.81   6.73   1.42 
Class B -- assumed 5% return  1,000.00   1,017.85   7.14   1.42 
Class C -- actual return  1,000.00   901.88   6.92   1.46 
Class C -- assumed 5% return  1,000.00   1,017.65   7.34   1.46 
Class F -- actual return  1,000.00   905.14   3.09   .65 
Class F -- assumed 5% return  1,000.00   1,021.69   3.28   .65 
Class 529-A -- actual return  1,000.00   905.09   3.47   .73 
Class 529-A -- assumed 5% return  1,000.00   1,021.29   3.68   .73 
Class 529-B -- actual return  1,000.00   901.45   7.25   1.53 
Class 529-B -- assumed 5% return  1,000.00   1,017.30   7.70   1.53 
Class 529-C -- actual return  1,000.00   901.80   7.25   1.53 
Class 529-C -- assumed 5% return  1,000.00   1,017.30   7.70   1.53 
Class 529-E -- actual return  1,000.00   903.98   4.84   1.02 
Class 529-E -- assumed 5% return  1,000.00   1,019.85   5.14   1.02 
Class 529-F -- actual return  1,000.00   905.83   2.47   .52 
Class 529-F -- assumed 5% return  1,000.00   1,022.34   2.62   .52 
Class R-1 -- actual return  1,000.00   901.93   6.88   1.45 
Class R-1 -- assumed 5% return  1,000.00   1,017.70   7.29   1.45 
Class R-2 -- actual return  1,000.00   901.65   7.02   1.48 
Class R-2 -- assumed 5% return  1,000.00   1,017.55   7.44   1.48 
Class R-3 -- actual return  1,000.00   903.93   4.75   1.00 
Class R-3 -- assumed 5% return  1,000.00   1,019.95   5.04   1.00 
Class R-4 -- actual return  1,000.00   904.84   3.32   .70 
Class R-4 -- assumed 5% return  1,000.00   1,021.44   3.53   .70 
Class R-5 -- actual return  1,000.00   906.43   1.90   .40 
Class R-5 -- assumed 5% return  1,000.00   1,022.94   2.02   .40 
 
*The “expenses paid during period” 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 (182), and divided by 366 (to reflect the one-half year period).
 
 

Tax information     
                                                                                                                           unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended February 29, 2008:

Long-term capital gains $1,437,511,000 
Qualified dividend income  100%
Corporate dividends received deduction $281,744,000 
U.S. government income that may be exempt from state taxation $11,941,000 

Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2009, to determine the calendar year amounts to be included on their 2008 tax returns. Shareholders should consult their tax advisers.
 
 


Board of directors and other officers

 
“Independent” directors  
 Year first 
 elected 
 a director 
Name and age
of the fund1
Principal occupation(s) during past five years
   
H. Frederick Christie, 741998Private 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, 611998Founder and President, M.A.D., Inc. (communications company); former Editor-in-Chief, The Los Angeles Herald Examiner
   
Martin Fenton, 721990Chairman of the Board, Senior Resource Group LLC (development and management of senior living communities)
   
William D. Jones, 522006President and CEO, CityLink Investment Corporation (real estate development and management)
   
Mary Myers Kauppila, 541998Private investor; Chairman of the Board and CEO, Ladera Management Company (venture capital and agriculture); former owner and President, Energy Investment, Inc.
   
William H. Kling, 662006President and CEO, American Public Media Group
   
Bailey Morris-Eck, 631999Director and Programming Chair, WYPR Baltimore/ Washington (public radio station); Senior Adviser, Financial News (London); Senior Fellow, Institute for International Economics; former Senior Associate and head of the Global Policy Initiative, Reuters Foundation
   
Kirk P. Pendleton, 681986Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment)
   
Olin C. Robison, Ph.D., 711998Fellow, 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., 671999President, University of Southern California
   
   
“Independent” directors  
   
 Number of 
 portfolios 
 in fund 
 
complex2
 
 overseen by 
Name and agedirector
Other directorships3 held by director
   
H. Frederick Christie, 7421AECOM Technology Corporation;
Chairman of the Board Ducommun Incorporated;
(Independent and Non-Executive) IHOP Corporation; Southwest Water Company
   
Mary Anne Dolan, 615None
   
Martin Fenton, 72 18None
   
William D. Jones, 522Sempra Energy; Southwest Water Company
   
Mary Myers Kauppila, 546None
   
William H. Kling, 667Irwin Financial Corporation
   
Bailey Morris-Eck, 633None
   
Kirk P. Pendleton, 687None
   
Olin C. Robison, Ph.D., 713American Shared Hospital Services
   
Stephen B. Sample, Ph.D., 672Intermec, Inc.; William Wrigley Jr. Company
   
   
“Interested” directors4
  
   
 Year first 
 elected a 
 director orPrincipal occupation(s) during past five years and
Name, age andofficer ofpositions held with affiliated entities or the principal
position with fund
the fund1
underwriter of the fund
   
R. Michael Shanahan, 691986Director and Chairman Emeritus, Capital Research
Vice Chairman of the Board 
and 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, 561992–1994Senior Vice President — Capital Research Global
President1996
Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5
   
   
“Interested” directors4
  
   
 Number of 
 portfolios 
 in fund 
 
complex2
 
Name, age andoverseen by 
position with funddirector
Other directorships3 held by director
   
R. Michael Shanahan, 692None
Vice Chairman of the Board  
   
Claudia P. Huntington, 561None
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: Secretary.

 
1Directors and officers of the fund serve until their resignation, removal or retirement.
 
2Capital Research and Management Company manages the American Funds, consisting of 30 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which is composed of 15 funds and serves as the underlying investment vehicle for certain variable insurance contracts; American Funds Target Date Retirement Series,® Inc., which is composed of nine funds and is available to investors in tax-deferred retirement plans and IRAs; and Endowments, which is composed of two portfolios and is available to certain nonprofit organizations.
 
3This includes all directorships (other than those in the American Funds or other funds managed by Capital Research and Management Company) 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).
 
5Company affiliated with Capital Research and Management Company.
 

 
Other officers  
   
 Year first 
 electedPrincipal occupation(s) during past five years and
Name, age andan officerpositions held with affiliated entities
position with fund
of the fund1
or the principal underwriter of the fund
   
Timothy D. Armour, 471996President and Director, Capital Research and
Senior Vice President 
Management Company; Senior Vice President — Capital Research Global Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5
   
Paul F. Roye, 542007Senior Vice President — Fund Business
Senior Vice President 
Management Group, Capital Research and Management Company; Director, American Funds Service Company;5 former Director of Investment Management, United States Securities and Exchange Commission
   
Barry S. Crosthwaite, 492006Senior Vice President — Capital Research Global
Vice President 
Investors, Capital Research Company5
   
C. Ross Sappenfield, 421999
Senior Vice President — Capital Research Global Investors, Capital Research Company5
   
James Terrile, 422006Senior Vice President — Capital Research Global
Vice President 
Investors, Capital Research Company5
   
Vincent P. Corti, 511998Vice President — Fund Business Management
Secretary Group, Capital Research and Management Company
   
Karl C. Grauman, 402006Vice President — Fund Business Management
Treasurer Group, Capital Research and Management Company
   
Courtney R. Taylor, 332007Assistant Vice President — Fund Business
Assistant Secretary Management Group, Capital Research and Management Company
   
Jeffrey P. Regal, 362003Vice President — Fund Business Management
Assistant Treasurer Group, Capital Research and Management Company
   
Chairman Emeritus  
James D. Fullerton, 91 
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

6455 Irvine Center Drive
Irvine, CA 92618

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 professional 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 29, 2008, 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, 2008, 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 more than 75 years, we have followed a consistent philosophy to benefit our investors. Our 30 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 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 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 26 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 Series®


The Capital Group Companies
 
American Funds    Capital Research and Management    Capital International    Capital Guardian    Capital Bank and Trust
 

 
Lit. No. MFGEAR-902-0408P
 
Litho in USA AGD/AC/8051-S10029
 
10% post-consumer waste
 
Printed with inks containing soy and/or vegetable oil
 
 
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:
   2007$67,000
   2008$72,000
    
  b)  Audit-Related Fees:
   2007$7,000
   2008$10,000
   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:
   2007$6,000
   2008$6,000
   The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns.
   
  d)  All Other Fees:
   2007None
   2008None
    
 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:
   2007$744,000
   2008$1,060,000
   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:
   2007$12,000
   2008$3,000
   The tax fees consist of consulting services relating to the Registrant’s investments.
   
  d)  All Other Fees:
   2007None
   2008None
   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 independent registered public accounting firm’s 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 $1,030,000 for fiscal year 2007 and $1,405,000 for fiscal year 2008. 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
 
[logo – American Funds®]
 

AMCAP Fund
Investment portfolio

February 29, 2008



Common stocks — 85.59% Shares  
Market value
(000)
 
       
INFORMATION TECHNOLOGY — 18.19%      
Cisco Systems, Inc.1
  24,704,300  $602,044 
Microsoft Corp.  20,895,000   568,762 
Yahoo! Inc.1
  14,175,000   393,781 
Oracle Corp.1
  20,221,659   380,167 
Intel Corp.  18,267,000   364,427 
SAP AG2
  5,801,892   276,437 
Texas Instruments Inc.  7,250,000   217,210 
Google Inc., Class A1
  380,800   179,425 
Hon Hai Precision Industry Co., Ltd.2
  25,000,000   148,720 
Automatic Data Processing, Inc.  3,500,000   139,825 
eBay Inc.1
  4,900,000   129,164 
Logitech International SA1
  4,550,000   116,389 
EMC Corp.1
  6,100,000   94,794 
Apple Inc.1
  750,000   93,765 
Global Payments Inc.  2,250,000   89,257 
Linear Technology Corp.  3,200,000   88,672 
Maxim Integrated Products, Inc.  4,645,000   84,864 
KLA-Tencor Corp.  1,985,000   83,390 
Microchip Technology Inc.  2,500,000   76,950 
Xilinx, Inc.  2,500,000   55,900 
Applied Materials, Inc.  2,700,000   51,759 
Paychex, Inc.  1,600,000   50,336 
Analog Devices, Inc.  1,750,000   47,110 
Dell Inc.1
  2,300,000   45,655 
QUALCOMM Inc.  1,000,000   42,370 
Delta Electronics, Inc. 2
  12,075,000   34,038 
Rogers Corp.1
  667,700   21,153 
Cadence Design Systems, Inc.1
  796,400   8,458 
       4,484,822 
         
CONSUMER DISCRETIONARY — 16.81%        
Lowe’s Companies, Inc.  24,189,700   579,827 
Target Corp.  8,316,000   437,505 
Best Buy Co., Inc.  9,200,000   395,692 
Carnival Corp., units  8,525,200   335,467 
Johnson Controls, Inc.  8,570,000   281,610 
YUM! Brands, Inc.  7,476,000   257,548 
O’Reilly Automotive, Inc.1,3
  6,794,800   183,188 
Time Warner Inc.  11,681,500   182,348 
Kohl’s Corp.1
  4,025,000   178,871 
Williams-Sonoma, Inc.3
  6,000,000   140,160 
Walt Disney Co.  4,000,000   129,640 
Ross Stores, Inc.  4,625,000   128,806 
E. W. Scripps Co., Class A  2,600,000   108,602 
Harley-Davidson, Inc.  2,896,900   107,649 
Tractor Supply Co.1,3
  2,525,000   94,536 
Brinker International, Inc.  4,687,500   86,438 
Gentex Corp.  5,130,000   82,696 
Comcast Corp., Class A, special nonvoting stock1
  3,750,000   72,563 
Harman International Industries, Inc.  1,728,901   71,231 
Apollo Group, Inc., Class A1
  900,000   55,242 
Timberland Co., Class A1
  3,264,000   49,025 
P.F. Chang’s China Bistro, Inc.1,3
  1,650,000   47,074 
MGM Mirage, Inc.1
  678,942   41,816 
Life Time Fitness, Inc.1
  900,000   26,154 
Liberty Media Holding Corp., Liberty Interactive, Series A1
  1,750,000   25,130 
Talbots, Inc.3
  3,057,725   25,012 
Expedia, Inc.1
  700,000   16,051 
Fossil, Inc.1
  197,000   6,339 
       4,146,220 
         
HEALTH CARE — 14.10%        
UnitedHealth Group Inc.  12,680,000   589,366 
WellPoint, Inc.1
  6,950,000   487,056 
Medtronic, Inc.  5,200,000   256,672 
Roche Holding AG2
  1,262,000   247,763 
Amgen Inc.1
  4,370,000   198,922 
St. Jude Medical, Inc.1
  4,005,000   172,135 
Varian Medical Systems, Inc.1
  3,100,000   162,595 
Forest Laboratories, Inc.1
  3,445,000   137,008 
Genentech, Inc.1
  1,510,000   114,383 
Becton, Dickinson and Co.  1,200,000   108,504 
Express Scripts, Inc.1
  1,800,000   106,380 
Respironics, Inc.1
  1,578,600   103,682 
Cephalon, Inc.1
  1,700,000   102,578 
Medco Health Solutions, Inc.1
  2,200,000   97,482 
Abbott Laboratories  1,400,000   74,970 
Medicis Pharmaceutical Corp., Class A3
  3,625,000   74,349 
Haemonetics Corp.1
  1,190,000   69,139 
McKesson Corp.  1,100,000   64,636 
Beckman Coulter, Inc.  936,400   63,207 
Bristol-Myers Squibb Co.  2,000,000   45,220 
Schering-Plough Corp.  2,000,000   43,400 
ResMed Inc1
  828,000   33,526 
Boston Scientific Corp.1
  2,547,890   32,078 
Johnson & Johnson  500,000   30,980 
Henry Schein, Inc.1
  500,000   29,910 
Gilead Sciences, Inc.1
  500,000   23,660 
Mentor Corp.  282,300   8,373 
       3,477,974 
         
FINANCIALS — 10.87%        
American International Group, Inc.  10,750,000   503,745 
Wachovia Corp.  12,404,909   379,838 
Citigroup Inc.  14,640,000   347,115 
Fannie Mae  10,605,000   293,228 
Capital One Financial Corp.  6,151,200   283,140 
Hudson City Bancorp, Inc.  12,700,000   201,549 
Wells Fargo & Co.  6,440,000   188,241 
Freddie Mac  6,050,000   152,339 
State Street Corp.  1,600,000   125,680 
M&T Bank Corp.  1,124,230   92,277 
Bank of New York Mellon Corp.  2,070,000   90,811 
Arthur J. Gallagher & Co.  950,000   22,420 
       2,680,383 
         
CONSUMER STAPLES — 7.88%        
Walgreen Co.  13,375,800   488,350 
PepsiCo, Inc.  5,000,000   347,800 
L’Oréal SA2
  1,850,000   219,347 
Avon Products, Inc.  5,045,000   192,013 
Altria Group, Inc.  2,500,000   182,850 
McCormick & Co.  4,435,000   152,786 
Wm. Wrigley Jr. Co.  1,870,000   111,938 
Costco Wholesale Corp.  1,600,000   99,072 
Dean Foods Co.  2,500,000   53,800 
Whole Foods Market, Inc.  1,200,000   42,180 
Kraft Foods Inc., Class A  1,211,042   37,748 
Wal-Mart Stores, Inc.  300,000   14,877 
       1,942,761 
         
ENERGY — 6.76%        
Schlumberger Ltd.  4,990,000   431,386 
EOG Resources, Inc.  2,122,900   252,604 
Newfield Exploration Co.1
  3,795,000   210,167 
Murphy Oil Corp.  2,200,000   176,836 
FMC Technologies, Inc.1
  2,745,000   155,532 
Apache Corp.  1,320,000   151,417 
Smith International, Inc.  2,130,000   134,254 
Devon Energy Corp.  1,270,000   130,454 
ConocoPhillips  300,000   24,813 
       1,667,463 
         
INDUSTRIALS — 5.31%        
Precision Castparts Corp.  3,440,000   379,742 
United Parcel Service, Inc., Class B  3,200,000   224,768 
General Electric Co.  6,400,000   212,096 
Robert Half International Inc.  6,800,000   183,260 
Avery Dennison Corp.  1,744,200   89,512 
United Technologies Corp.  1,000,000   70,510 
FedEx Corp.  790,000   69,623 
Southwest Airlines Co.  3,685,000   45,178 
Mine Safety Appliances Co.  881,050   35,339 
       1,310,028 
         
TELECOMMUNICATION SERVICES — 1.43%        
Telephone and Data Systems, Inc., Special Common Shares  2,000,900   86,239 
Telephone and Data Systems, Inc.  1,737,500   81,489 
Sprint Nextel Corp., Series 1  17,200,000   122,292 
CenturyTel, Inc.  890,000   32,209 
United States Cellular Corp.1
  501,600   31,601 
       353,830 
         
MATERIALS — 0.43%        
Sealed Air Corp.  2,400,000   58,104 
Potash Corp. of Saskatchewan Inc.  300,000   47,670 
       105,774 
         
UTILITIES — 0.09%        
Duke Energy Corp.  1,299,000   22,784 
         
         
MISCELLANEOUS — 3.72%        
Other common stocks in initial period of acquisition      917,037 
         
         
Total common stocks (cost: $18,696,646,000)      21,109,076 
         
         
  Principal amount     
Short-term securities — 14.24%  (000)    
         
Federal Home Loan Bank 2.52%–4.285% due 3/13–8/27/2008 $576,452   574,284 
Freddie Mac 2.50%–4.23% due 3/3–9/10/2008  308,700   307,635 
Wells Fargo & Co. 2.97%–3.17% due 3/13–3/18/2008  247,500   247,154 
General Electric Capital Corp. 3.00%–4.37% due 4/24–5/8/2008  160,000   159,138 
General Electric Co. 4.51% due 3/26/2008  35,000   34,918 
Edison Asset Securitization LLC 4.49% due 3/14/20084
  25,000   24,955 
Procter & Gamble International Funding S.C.A. 2.85%–4.22% due 3/7–3/17/20084
  192,000   191,774 
Coca-Cola Co. 2.67%–2.93% due 4/10–5/16/20084
  183,400   182,564 
United Parcel Service Inc. 4.17%–4.40% due 3/3–3/31/20084
  144,800   144,608 
Variable Funding Capital Corp. 3.90%–4.25% due 3/4–3/14/20084
  132,300   132,151 
Hewlett-Packard Co. 2.82%–3.00% due 3/27–4/11/20084
  127,800   127,478 
Lowe’s Cos. Inc. 2.80%–2.85% due 3/5–3/24/2008  119,300   119,180 
John Deere Capital Corp. 3.75%–3.78% due 3/27/20084
  115,000   114,719 
Ranger Funding Co. LLC 3.45% due 4/24/20084
  59,500   59,179 
Bank of America Corp. 3.015% due 4/8/2008  50,000   49,833 
FCAR Owner Trust II 3.33% due 3/17/2008  58,000   57,909 
FCAR Owner Trust I 3.27% due 3/17/2008  50,000   49,923 
Walt Disney Co. 2.73%–2.75% due 4/22–5/2/2008  94,905   94,428 
Wal-Mart Stores Inc. 2.72%–3.65% due 3/4–4/22/20084
  88,400   88,292 
U.S. Treasury Bills 2.305%–3.505% due 4/15–4/24/2008  76,700   76,463 
Fannie Mae 4.05%–4.27% due 3/12–5/28/2008  75,500   75,127 
Chevron Corp. 2.85% due 3/18/2008  50,000   49,929 
Chevron Funding Corp. 2.85% due 3/20/2008  25,000   24,960 
Park Avenue Receivables Co., LLC 3.30% due 3/28/20084
  50,000   49,872 
Jupiter Securitization Co., LLC 4.65% due 3/20/20084
  25,000   24,941 
Pfizer Inc 4.33% due 6/13/20084
  53,300   52,831 
Paccar Financial Corp. 3.60%–4.17% due 3/26–4/17/2008  52,600   52,411 
Private Export Funding Corp. 4.25%–4.37% due 3/6–3/26/20084
  51,000   50,922 
Honeywell International Inc. 2.78% due 3/19/20084
  50,000   49,927 
Colgate-Palmolive Co. 2.82% due 3/25/20084
  50,000   49,902 
Federal Farm Credit Banks 3.31% due 8/14/2008  40,000   39,485 
IBM International Group Capital LLC 2.72% due 4/21/20084
  34,000   33,866 
AT&T Inc. 2.73% due 5/22/20084
  33,110   32,876 
Union Bank of California, N.A. 3.86% due 4/17/2008  27,800   27,829 
Johnson & Johnson 2.70%–3.60% due 3/27–4/24/20084
  27,400   27,293 
NetJets Inc. 4.18% due 3/10/20084
  25,000   24,970 
Harley-Davidson Funding Corp. 2.85% due 3/26/20084
  7,100   7,085 
         
         
         
Total short-term securities (cost: $3,509,844,000)     $3,510,811 
         
Total investment securities (cost: $22,206,490,000)      24,619,887 
Other assets less liabilities      42,923 
         
Net assets  ��  $24,662,810 

“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.
2Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Miscellaneous,"
 was $983,529,000.
3Represents an affiliated company as defined under the Investment Company Act of 1940.
4Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the United States in transactions exempt from
 registration, normally to qualified institutional buyers. The total value of all such securities was $1,470,205,000, which represented 5.96% 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 your financial professional and should be read carefully before investing.
 
 
 

 
MFGEFP-902-0408O-S10875
 
 
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 29, 2008, and for the year then ended and have issued our report thereon dated April 8, 2008, 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 29, 2008, 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 8, 2008
 
 
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, 2008



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, 2008



By /s/ Karl C. Grauman
Karl C. Grauman, Treasurer and
Principal Financial Officer
 
Date: May 8, 2008