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Amcap Fund (CAFBX)

Filed: 6 Nov 08, 7:00pm
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: August 31, 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
 
[photo of a man on a sailboat in the ocean]
 
Semi-annual report for the six months ended August 31, 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 31 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.

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 September 30, 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     2.74%  5.22%
Cumulative total return  –26.69%  14.50%  66.37%

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 20 to 25 for details.

Results for other share classes can be found on page 28.
 

 
Fellow shareholders:
 
[photo of a person holding onto a sailboats' steering wheel]
 
U.S. stocks declined during the past six months ended August 31, 2008, as a housing industry downturn, a slowing economy and problems in financial markets triggered a full-blown credit crunch. These issues affected many other countries around the globe as well.

Following the end of our fiscal reporting period, financial markets were hit with a round of unprecedented developments. As a result, the U.S. government has stepped in to support, conserve or facilitate the takeover of assets from Fannie Mae, Freddie Mac, Lehman, Merrill Lynch, Washington Mutual Bank and American International Group, among others. On October 3, President Bush signed a $700 billion Wall Street rescue plan after it was passed by the Senate and the House. It would aid financial firms and give regulators broader tools to deal with the financial crisis. It is clear that, coming out of this period, the financial industry will be much changed both in terms of the number of participants and the regulatory environment in which they will operate.

During the six months ended August 31, AMCAP Fund posted a total return of –4.2%, compared with the –2.6% total return of the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of mostly large U.S. stocks. AMCAP also trailed the –2.9% total return of the Lipper Multi-Cap Core Funds Index and the –2.9% total return of the Lipper Growth Funds Index.

Over the longer term, AMCAP continued to exceed the S&P 500 and the fund’s two Lipper peer-group indexes by a significant margin. For the 10 years ended August 31, 2008, AMCAP produced a cumulative total return of 105.1%, compared with 57.9% for the S&P 500, 76.9% for the Lipper Multi-Cap Core Funds Index and 45.1% for the Lipper Growth Funds Index.

[Begin Sidebar]
Cumulative total returns         
For periods ended August 31, 2008 1 year  5 years  10 years 
          
AMCAP (Class A shares)  –13.2%  28.4%  105.1%
Standard & Poor’s 500 Composite Index*  –11.1   39.7   57.9 
Lipper Multi-Cap Core Funds Index
  –10.8   45.0   76.9 
Lipper Growth Funds Index
  –11.3   32.5   45.1 
             
*The S&P 500 is unmanaged, and its results do not reflect the effect of sales charges, commissions or expenses.            
Lipper indexes do not include the effect of sales charges.
            
[End Sidebar]

Investment results analysis

Select information technology, energy, consumer staples and consumer discretionary stocks helped the fund in the six months ended August 31, 2008. Major contributors in the fund’s 10 largest companies were Oracle (+16.6%), Intel (+14.6%) and Schlumberger (+9.0%). Two of the fund’s other largest holdings, Wellpoint (–­24.7%) and Yahoo! (–30.2%), hurt returns. AMCAP’s sizable cash position of 14.3% of the total portfolio helped support the fund.

Financial companies again detracted from results. While any exposure to this group was negative in the past 18 months, AMCAP held a relatively small position in financials (9.2% of net assets as of August 31, 2008, compared with 15.1% for the S&P 500). Among the fund’s financial holdings was American International Group (–54.1%). The events after the close of the quarter put additional pressure on our holdings in the financial sector.

Looking ahead

We are in the midst of a significant challenge to the health of the world’s financial markets. Central banks and federal governments are using tools to support the markets that have rarely, if ever, been used. As the leverage in the system unwinds, the road to recovery is, and will continue to be, rocky. Ultimately, global economies should find themselves in a healthier state.

We are fortunate to have a large and experienced team of analysts and portfolio counselors who continue to monitor economic conditions generally and industries and companies specifically. At some point, this credit crunch should right itself and the stage will be set for a much healthier economic environment. Periods of highest uncertainty are often the time of greatest value. While few companies will emerge unscathed from this economic slowdown and credit crunch, having a steady hand during turbulent times can help us invest in strong growth companies at attractive prices.

Our four veteran portfolio counselors have endured difficult markets in the past. Collectively, they bring 119 years of investment experience to managing your investments. We recommend that you continue to take a long-term perspective, especially in these challenging times.

Cordially,
 
/s/ R. Michael Shanahan
R. Michael Shanahan
Vice Chairman of the Board
 
 
/s/ Claudia P. Huntington
Claudia P. Huntington
President
 
October 10, 2008

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

Summary investment portfolio, August 31, 2008
unaudited
 

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  20.45 %
Consumer discretionary  17.09 
Health care  12.19 
Financials  9.21 
Consumer staples  7.60 
Other industries  19.06 
Short-term securities & other assets less liabilities  14.40 
[end pie chart]
 
Common stocks  - 85.60% Shares  
Value
 (000)
  
Percent of
net assets
 
          
Information technology  - 20.45%         
Cisco Systems, Inc. (1)  24,704,300  $594,138   2.62%
Microsoft Corp.  19,695,000   537,477   2.37 
Intel Corp.  18,267,000   417,766   1.84 
Oracle Corp. (1)  16,921,659   371,092   1.63 
Yahoo! Inc. (1)  18,625,000   360,953   1.59 
SAP AG  (2)  5,255,000   294,100   1.29 
Hewlett-Packard Co.  3,900,000   182,988   .81 
Google Inc., Class A (1)  380,800   176,421   .78 
Automatic Data Processing, Inc.  3,500,000   155,330   .68 
Texas Instruments Inc.  5,750,000   140,933   .62 
Other securities      1,413,588   6.22 
       4,644,786   20.45 
             
Consumer discretionary  - 17.09%            
Lowe's Companies, Inc.  24,889,700   613,282   2.70 
Target Corp.  8,316,000   440,914   1.94 
Best Buy Co., Inc.  7,400,000   331,298   1.46 
Johnson Controls, Inc.  8,570,000   264,984   1.17 
Time Warner Inc.  14,714,000   240,868   1.06 
Kohl's Corp. (1)  4,534,820   222,977   .98 
YUM! Brands, Inc.  5,976,000   213,224   .94 
Carnival Corp., units  5,725,200   212,176   .93 
O'Reilly Automotive, Inc. (1)  (3)  7,253,900   211,234   .93 
Omnicom Group Inc.  4,100,000   173,799   .76 
Other securities      958,153   4.22 
       3,882,909   17.09 
             
Health care  - 12.19%            
WellPoint, Inc. (1)  6,950,000   366,891   1.62 
Medtronic, Inc.  6,300,000   343,980   1.51 
UnitedHealth Group Inc.  10,650,000   324,293   1.43 
Roche Holding AG (2)  1,562,000   263,226   1.16 
Varian Medical Systems, Inc. (1)  2,400,000   151,584   .67 
Other securities      1,318,132   5.80 
       2,768,106   12.19 
             
Financials  - 9.21%            
Capital One Financial Corp.  7,251,200   320,068   1.41 
Citigroup Inc.  16,806,700   319,159   1.40 
American International Group, Inc.  13,440,000   288,826   1.27 
American Express Co.  6,150,000   244,032   1.07 
State Street Corp.  3,325,000   225,003   .99 
Wells Fargo & Co.  6,440,000   194,939   .86 
Fannie Mae  7,159,000   48,968   .22 
Freddie Mac  6,050,000   27,285   .12 
Other securities      425,038   1.87 
       2,093,318   9.21 
             
Consumer staples  - 7.60%            
Walgreen Co.  13,375,800   487,281   2.14 
PepsiCo, Inc.  5,000,000   342,400   1.51 
Avon Products, Inc.  5,045,000   216,077   .95 
L'Oréal SA (2)  1,950,000   193,621   .85 
Philip Morris International Inc.  2,500,000   134,250   .59 
Other securities      353,569   1.56 
       1,727,198   7.60 
             
Energy  - 5.98%            
Schlumberger Ltd.  3,740,000   352,383   1.55 
Newfield Exploration Co. (1)  3,275,000   148,096   .65 
Murphy Oil Corp.  1,850,000   145,280   .64 
EOG Resources, Inc.  1,262,900   131,872   .58 
Other securities      581,308   2.56 
       1,358,939   5.98 
             
Industrials  - 5.67%            
Precision Castparts Corp.  2,579,015   266,309   1.17 
General Electric Co.  8,100,000   227,610   1.00 
United Parcel Service, Inc., Class B  3,200,000   205,184   .91 
Robert Half International Inc.  7,359,000   188,390   .83 
Other securities      399,687   1.76 
       1,287,180   5.67 
             
Telecommunication services  - 1.45%            
Sprint Nextel Corp., Series 1  17,200,000   149,984   .66 
Other securities      179,858   .79 
       329,842   1.45 
             
Materials - 1.19%            
Other securities      269,378   1.19 
             
             
Miscellaneous  -  4.77%            
Other common stocks in initial period of acquisition      1,084,542   4.77 
             
             
Total common stocks (cost: $18,065,688,000)      19,446,198   85.60 
             
             
             
Short-term securities  - 14.28%  
Principal amount (000)
     
             
             
Federal Home Loan Bank 1.706%-2.54% due 9/10-11/24/2008 $741,170   739,776   3.26 
U.S. Treasury Bills 1.43%-2.135% due 9/25/2008-1/15/2009  393,300   391,837   1.72 
Freddie Mac 2.04%-2.50% due 9/2-12/3/2008  341,700   341,226   1.50 
Fannie Mae 1.68%-2.10% due 9/3-12/8/2008  201,100   200,421   .88 
Wal-Mart Stores Inc. 2.05%-2.10% due 11/10-12/22/2008 (4)  136,800   135,651   .60 
Edison Asset Securitization LLC 2.28%-2.48% due 9/22-10/30/2008 (4)  59,000   58,710     
General Electric Co. 2.35% due 9/16/2008  42,900   42,855     
General Electric Capital Services, Inc. 2.48% due 10/15/2008  17,600   17,547   .52 
United Parcel Service Inc. 2.13%-2.14% due 9/10-11/5/2008 (4)  100,000   99,776   .44 
Hewlett-Packard Co. 2.22%-2.30% due 9/19-10/14/2008 (4)  85,400   85,220   .38 
CAFCO, LLC 2.42% due 9/11/2008 (4)  30,000   29,978     
Ciesco LLC 2.40% due 9/22/2008 (4)  23,050   23,016   .23 
Medtronic Inc. 2.06% due 9/17-9/23/2008 (4)  36,700   36,659   .16 
PepsiCo Inc. 2.02% due 9/3/2008 (4)  20,200   20,197   .09 
Other securities      1,021,652   4.50 
             
             
Total short-term securities (cost: $3,244,862,000)      3,244,521   14.28 
             
             
Total investment securities (cost: $21,310,550,000)      22,690,719   99.88 
Other assets less liabilities      28,059   .12 
             
Net assets     $22,718,778   100.00%
             
"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.     
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio.         
 

Investments in affiliates
 
 
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the
fund's holdings in that company represent 5% or more of the outstanding voting shares of that company.
The fund's affiliated holdings listed below are either shown in the preceding summary investment portfolio
or included in the value of "Other securities" under their respective industry sectors. Further
details on these holdings and related transactions during the six months ended August 31, 2008, appear below.
 

  Beginning shares  Additions  Reductions  
Ending
shares
  
Dividend
 income (000)
  Value of affiliates at 8/31/08 (000) 
O'Reilly Automotive, Inc. (1)  6,794,800   459,100   -   7,253,900  $-  $211,234 
Harman International Industries, Inc.  1,728,901   1,591,099   -   3,320,000   63   112,980 
Tractor Supply Co. (1)  2,525,000   -   -   2,525,000   -   107,616 
Williams-Sonoma, Inc.  6,000,000   -   500,000   5,500,000   1,380   97,295 
Haemonetics Corp. (1)  1,190,000   200,000   -   1,390,000   -   87,181 
Medicis Pharmaceutical Corp., Class A  3,625,000   -   -   3,625,000   290   75,074 
P.F. Chang's China Bistro, Inc. (1) (5)  1,650,000   -   1,258,364   391,636   -   - 
Talbots, Inc. (5)  3,057,725   -   3,057,725   -   441   - 
                  $2,174  $691,380 

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 $994,939,000, which represented 4.38% of the net assets of the fund. 
(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 $1,179,883,000, which represented 5.19% of the net assets of the fund. 
(5) Unaffiliated issuer at 8/31/2008.            
             
See Notes to Financial Statements            
 

Financial statements
unaudited
 
Statement of assets and liabilities      
at August 31, 2008 (dollars in thousands) 
       
Assets:      
 Investment securities, at value:      
  Unaffiliated issuers (cost: $20,409,295) $21,999,339    
  Affiliated issuers (cost: $901,255)  691,380  $22,690,719 
 Cash denominated in currencies other than U.S. dollars        
  (cost: $13,919)      13,919 
 Cash      153 
 Receivables for:        
  Sales of investments  48,995     
  Sales of fund's shares  24,116     
  Dividends and interest  25,947   99,058 
       22,803,849 
Liabilities:        
 Payables for:        
  Purchases of investments  24,840     
  Repurchases of fund's shares  35,207     
  Investment advisory services  5,616     
  Services provided by affiliates  17,056     
  Directors' deferred compensation  2,202     
  Other  150   85,071 
Net assets at August 31, 2008     $22,718,778 
         
Net assets consist of:        
 Capital paid in on shares of capital stock     $21,340,117 
 Undistributed net investment income      102,207 
 Accumulated net realized loss      (103,735)
 Net unrealized appreciation      1,380,189 
Net assets at August 31, 2008     $22,718,778 
 
 
  (dollars and shares in thousands, except per-share amounts) 
Total authorized capital stock - 2,000,000 shares, $1.00 par value (1,349,109 total shares outstanding)       
  Net assets  Shares outstanding  Net asset value per share* 
Class A $15,238,860   899,080  $16.95 
Class B  913,497   56,186   16.26 
Class C  1,339,744   83,033   16.14 
Class F-1  2,076,845   123,180   16.86 
Class F-2  8,154   481   16.95 
Class 529-A  460,471   27,247   16.90 
Class 529-B  79,984   4,907   16.30 
Class 529-C  137,948   8,458   16.31 
Class 529-E  26,114   1,562   16.72 
Class 529-F-1  18,897   1,117   16.92 
Class R-1  39,793   2,420   16.45 
Class R-2  393,284   23,942   16.43 
Class R-3  643,104   38,436   16.73 
Class R-4  402,931   23,874   16.88 
Class R-5  939,152   55,186   17.02 
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Classes A and 529-A, for which the maximum offering prices per share were $17.98 and $17.93, respectively. 
             
             
See Notes to Financial Statements            
 
 
Statement of operations    unaudited 
for the six months ended August 31, 2008 (dollars in thousands) 
       
Investment income:      
 Income:      
  Dividends (net of non-U.S.      
            taxes of $3,197; also includes      
            $2,174 from affiliates) $156,701    
  Interest  41,803  $198,504 
         
 Fees and expenses*:        
  Investment advisory services  38,695     
  Distribution services  39,362     
  Transfer agent services  11,329     
  Administrative services  5,781     
  Reports to shareholders  740     
  Registration statement and prospectus  502     
  Postage, stationery and supplies  1,152     
  Directors' compensation  55     
  Auditing and legal  83     
  Custodian  185     
  State and local taxes  1     
  Other  15     
  Total fees and expenses before waiver  97,900     
   Less investment advisory services waiver  3,870     
  Total fees and expenses after waiver      94,030 
 Net investment income      104,474 
         
Net realized loss and unrealized        
 depreciation on investments        
 and currency:        
 Net realized loss on:        
  Investments (including $82,084 net loss from affiliates)  (103,445)    
  Currency transactions  (51)  (103,496)
 Net unrealized depreciation on:        
  Investments  (1,033,228)    
  Currency translations  (80)  (1,033,308)
   Net realized loss and        
    unrealized depreciation        
    on investments and currency      (1,136,804)
Net decrease in net assets resulting        
 from operations     $(1,032,330)
         
(*) 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) 
         
  Six months    
  
ended
August 31,
  Year ended February 29, 
   2008*  2008 
Operations:        
 Net investment income $104,474  $294,419 
 Net realized (loss) gain on investments and        
  currency transactions  (103,496)  2,289,586 
 Net unrealized depreciation        
  on investments and currency translations  (1,033,308)  (3,427,418)
  Net decrease in net assets        
   resulting from operations  (1,032,330)  (843,413)
         
Dividends and distributions paid to shareholders:        
 Dividends from net investment income and currency gain  -   (272,105)
 Distributions from net realized gain        
  on investments  (938,080)  (1,437,511)
   Total dividends and distributions paid        
    to shareholders  (938,080)  (1,709,616)
         
Net capital share transactions  26,378   1,562,312 
         
Total decrease in net assets  (1,944,032)  (990,717)
         
Net assets:        
 Beginning of period  24,662,810   25,653,527 
 End of period (including        
  undistributed and distributions in excess of        
  net investment income: $102,207 and $(2,267), respectively) $22,718,778  $24,662,810 
         
*Unaudited.
        
         
See Notes to Financial Statements        
 

 
Notes to financial statements  
                                                                                                                   unaudited
 
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 15 share classes consisting of five 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-1) can be used to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are generally only offered through eligible employer-sponsored retirement plans. The fund’s share classes are described below:

Share classInitial sales chargeContingent deferred sales charge upon redemptionConversion feature
Classes A and 529-AUp to 5.75%None (except 1% for certain redemptions within one year of purchase without an initial sales charge)None
Classes B and 529-BNoneDeclines from 5% to 0% for redemptions within six years of purchaseClasses B and 529-B convert to Classes A and 529-A, respectively, after eight years
Class CNone1% for redemptions within one year of purchaseClass C converts to Class F-1 after 10 years
Class 529-CNone1% for redemptions within one year of purchaseNone
Class 529-ENoneNoneNone
Classes F-1, F-2 and 529-F-1NoneNoneNone
Classes R-1, R-2, R-3, R-4 and R-5NoneNone
None
 

On August 1, 2008, the fund made an additional retail share class (Class F-2) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”). In addition, Class F shares were renamed Class F-1 and Class 529-F shares were renamed Class 529-F-1. Refer to the fund’s prospectus for more details.

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 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.

As of and during the period ended August 31, 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; 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 components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of February 29, 2008, the fund had undistributed long-term capital gains of $937,922,000.

As of August 31, 2008, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

  (dollars in thousands) 
Gross unrealized appreciation on investment securities $3,726,244 
Gross unrealized depreciation on investment securities  (2,346,156)
Net unrealized appreciation on investment securities  1,380,088 
Cost of investment securities  21,310,631 

The tax character of distributions paid to shareholders was as follows (dollars in thousands):
 
  Six months ended August 31, 2008  Year ended February 29, 2008 
  Ordinary income  Long-term capital gains  Total distributions paid  Ordinary income  Long-term capital gains  Total distributions paid 
Share class                  
Class A $-  $621,110  $621,110  $202,493  $949,313  $1,151,806 
Class B  -   39,384   39,384   3,095   63,326   66,421 
Class C  -   58,355   58,355   3,933   93,635   97,568 
Class F-1  -   92,611   92,611   31,829   147,270   179,099 
Class F-2*  -   -   -   -   -   - 
Class 529-A  -   18,356   18,356   5,167   25,950   31,117 
Class 529-B  -   3,329   3,329   164   4,950   5,114 
Class 529-C  -   5,770   5,770   337   8,394   8,731 
Class 529-E  -   1,045   1,045   209   1,508   1,717 
Class 529-F-1  -   749   749   237   968   1,205 
Class R-1  -   1,616   1,616   118   2,486   2,604 
Class R-2  -   16,317   16,317   1,108   24,659   25,767 
Class R-3  -   27,709   27,709   5,891   42,508   48,399 
Class R-4  -   16,070   16,070   6,712   32,121   38,833 
Class R-5  -   35,659   35,659   10,812   40,423   51,235 
Total $-  $938,080  $938,080  $272,105  $1,437,511  $1,709,616 
                         
                         
* Class F-2 was offered beginning August 1, 2008.                 

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® ("AFS"), the fund’s transfer agent, and American Funds Distributors,® 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 six months ended August 31, 2008, total investment advisory services fees waived by CRMC were $3,870,000. As a result, the fee shown on the accompanying financial statements of $38,695,000, which was equivalent to an annualized rate of 0.320%, was reduced to $34,825,000, or 0.288% of average daily net assets.

Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:

Distribution services – The fund has adopted plans of distribution for all share classes, except Classes F-2 and 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 below. 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 Classes 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 August 31, 2008, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.

Share classCurrently approved limitsPlan limits
Class A0.25%0.25%
Class 529-A0.250.50
Classes B and 529-B1.001.00
Classes C, 529-C and R-11.001.00
Class R-20.751.00
Classes 529-E and R-30.500.75
Classes F-1, 529-F-1 and R-40.250.50

Transfer agent services The fund has a transfer agent agreement with AFS for Classes 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 Classes 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. 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 six months ended August 31, 2008, were as follows (dollars in thousands):

Share classDistribution servicesTransfer agent servicesAdministrative services
CRMC administrative servicesTransfer agent servicesCommonwealth of Virginia administrative services
Class A$18,546$10,678Not applicableNot applicableNot applicable
Class B4,935651Not applicableNot applicableNot applicable
Class C7,255
 
 
 
Included
in
administrative services
$1,078$160Not applicable
Class F-12,9371,173104Not applicable
Class F-2 Not applicable1- *Not applicable
Class 529-A47624841$ 236
Class 529-B415441442
Class 529-C715752172
Class 529-E6714 213
Class 529-F-1-1029
Class R-12021410Not applicable
Class R-21,537301678Not applicable
Class R-31,756504224Not applicable
Class R-4 521277 10Not applicable
Class R-5Not applicable 3995Not applicable
Total$39,362$11.329$4,138$1,271$372
* Amount less than one thousand.

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 $55,000, shown on the accompanying financial statements, includes $242,000 in current fees (either paid in cash or deferred) and a net decrease of $187,000 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. Disclosure of fair value measurements
 
The fund adopted the Statement of Financial Accounting Standards No. 157 (“FAS 157”), Fair Value Measurements, on March 1, 2008. FAS 157 requires the fund to classify its assets and liabilities based on valuation method using three levels. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are generally high quality and liquid; however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.  The following table presents the fund’s valuation levels as of August 31, 2008 (dollars in thousands):

  Investment securities 
Level 1 – Quoted prices $18,451,259 
Level 2 – Other significant observable inputs  4,239,460(*)
Level 3 – Significant unobservable inputs  - 
Total $22,690,719 
 
(*) Includes certain securities trading primarily outside the U.S. whose value was adjusted as a result of significant market movements following the close of local trading.

5. 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 
Six months ended August 31, 2008                        
Class A $917,565   51,305  $596,801   34,698  $(1,363,024)  (77,213) $151,342   8,790 
Class B  29,919   1,737   38,002   2,299   (100,503)  (5,906)  (32,582)  (1,870)
Class C  80,841   4,750   55,792   3,402   (190,409)  (11,284)  (53,776)  (3,132)
Class F-1  237,867   13,324   83,010   4,852   (542,450)  (31,103)  (221,573)  (12,927)
Class F-2
  8,202   482   -   -   (22)  (1)  8,180   481 
Class 529-A  33,532   1,882   18,350   1,069   (19,868)  (1,132)  32,014   1,819 
Class 529-B  3,535   206   3,329   201   (3,278)  (194)  3,586   213 
Class 529-C  10,156   590   5,767   348   (9,121)  (542)  6,802   396 
Class 529-E  1,945   111   1,045   61   (1,252)  (72)  1,738   100 
Class 529-F-1  2,693   150   749   43   (1,477)  (84)  1,965   109 
Class R-1  6,639   380   1,609   97   (5,282)  (305)  2,966   172 
Class R-2  54,504   3,139   16,308   976   (57,184)  (3,307)  13,628   808 
Class R-3  81,676   4,616   27,641   1,627   (131,032)  (7,556)  (21,715)  (1,313)
Class R-4  57,843   3,287   16,066   938   (165,638)  (9,156)  (91,729)  (4,931)
Class R-5  272,610   15,122   35,407   2,052   (82,485)  (4,621)  225,532   12,553 
Total net increase                                
   (decrease) $1,799,527   101,081  $899,876   52,663  $(2,673,025)  (152,476) $26,378   1,268 
                                 
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-1  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-1  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 
                                 
(*) Includes exchanges between share classes of the fund.                     
† Class F-2 was offered beginning August 1, 2008                             

6. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $2,969,464,000 and $3,495,026,000, respectively, during the six months ended August 31, 2008.
 

 
Financial highlights (1)
 
        
 (Loss) income from investment operations(2)
   Dividends and distributions                            
     Net asset value, beginning of period  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 period  
Total return (3) (4)
  Net assets, end of period (in millions)  
Ratio of expenses to average net assets before reimbursements
/waivers
  
Ratio of expenses to average net assets after reimbursements
/waivers (4)
  
Ratio of net income (loss) to average net assets (4)
 
Class A:                                                            
 Six months ended 8/31/2008  (5) $18.41  $.09     $(.85) $(.76) $-     $(.70) $(.70)    $16.95   (4.16)% $15,239   .71%  (6)  .68%  (6)  .97%  (6)
 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   -   (7)  -   -   (7)  17.50   36.96   11,086   .73       .73       .11     
Class B:                                                                               
 Six months ended 8/31/2008  (5)  17.75   .02      (.81)  (.79)  -       (.70)  (.70)      16.26   (4.49)  914   1.47   (6)  1.44   (6)  .20   (6)
 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:                                                                               
 Six months ended 8/31/2008  (5)  17.63   .01      (.80)  (.79)  -       (.70)  (.70)      16.14   (4.58)  1,340   1.51   (6)  1.48   (6)  .16   (6)
 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-1:                                                                               
 Six months ended 8/31/2008  (5)  18.31   .09      (.84)  (.75)  -       (.70)  (.70)      16.86   (4.13)  2,077   .69   (6)  .66   (6)  .98   (6)
 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   -   (7)  -   -   (7)  17.41   36.81   978   .78       .78       .05     
Class F-2:                                                                               
 Period from 8/1/2008 to 8/31/2008  (5)  16.52   .02      .41   .43   -       -   -       16.95   2.60   8   .04       .04       .10     
Class 529-A:                                                                               
 Six months ended 8/31/2008  (5)  18.36   .08      (.84)  (.76)  -       (.70)  (.70)      16.90   (4.18)  460   .77   (6)  .74   (6)  .91   (6)
 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:                                                                               
 Six months ended 8/31/2008  (5)  17.81   .01      (.82)  (.81)  -       (.70)  (.70)      16.30   (4.59)  80   1.58   (6)  1.55   (6)  .10   (6)
 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   -   (7)  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:                                                                                
 Six months ended 8/31/2008  (5)  17.82   .01       (.82)  (.81)  -       (.70)  (.70)      16.31   (4.59)  138   1.57   (6)  1.54   (6)  .10   (6)
 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   -   (7)  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:                                                                                
 Six months ended 8/31/2008  (5)  18.20   .05       (.83)  (.78)  -       (.70)  (.70)      16.72   (4.32)  26   1.07   (6)  1.04   (6)  .61   (6)
 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-1:                                                                                
 Six months ended 8/31/2008  (5) $18.36  $.10      $(.84) $(.74) $-      $(.70) $(.70)     $16.92   (4.07)% $19   .57%  (6)  .54%  (6)  1.11%  (6)
 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   -   (7)  -   -   (7)  17.46   36.66   3   .89       .89       (.07)    
Class R-1:                                                                                
 Six months ended 8/31/2008  (5)  17.95   .02       (.82)  (.80)  -       (.70)  (.70)      16.45   (4.50)  40   1.45   (6)  1.42   (6)  .22   (6)
 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:                                                                                
 Six months ended 8/31/2008  (5)  17.94   .01       (.82)  (.81)  -       (.70)  (.70)      16.43   (4.56)  393   1.56   (6)  1.53   (6)  .11   (6)
 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   -   (7)  -   -   (7)  17.26   35.80   130   1.91       1.53       (.70)    
Class R-3:                                                                                
 Six months ended 8/31/2008  (5)  18.21   .06       (.84)  (.78)  -       (.70)  (.70)      16.73   (4.32)  643   1.04   (6)  1.01   (6)  .63   (6)
 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   -   (7)  .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   -   (7)  -   -   (7)  17.37   36.27   189   1.16       1.15       (.32)    
Class R-4:                                                                                
 Six months ended 8/31/2008  (5)  18.33   .09       (.84)  (.75)  -       (.70)  (.70)      16.88   (4.13)  403   .72   (6)  .69   (6)  .95   (6)
 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:                                                                                
 Six months ended 8/31/2008  (5)  18.45   .11       (.84)  (.73)  -       (.70)  (.70)      17.02   (3.99)  939   .42   (6)  .39   (6)  1.26   (6)
 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     
 
 
  
Six months ended
August 31,
  Year ended February 28 or 29 
  
2008(5)
  2008  2007  2006  2005  2004 
                   
Portfolio turnover rate for all classes of shares  15%  29%  20%  20%  16%  17%
 
 
(1) Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.     
(2) Based on average shares outstanding.              
(3) Total returns exclude any applicable sales charges, including contingent deferred sales charges.        
(4) This column reflects the impact, if any, of certain reimbursements/waivers from CRMC.   During some of the periods shown, CRMC reduced fees for investment advisory services.
      In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.   
(5) Unaudited.               
(6) Annualized.               
(7) Amount less than $.01.               
                
See Notes to Financial Statements               


 
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 (March 1, 2008, through August 31, 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-1, F-2 and 529-F-1 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 3/1/2008  Ending account value 8/31/2008  
Expenses paid during period*
  Annualized expense ratio 
             
Class A -- actual return $1,000.00  $958.37  $3.35   .68%
Class A -- assumed 5% return  1,000.00   1,021.72   3.46   .68 
Class B -- actual return  1,000.00   955.06   7.08   1.44 
Class B -- assumed 5% return  1,000.00   1,017.90   7.30   1.44 
Class C -- actual return  1,000.00   954.19   7.27   1.48 
Class C -- assumed 5% return  1,000.00   1,017.70   7.51   1.48 
Class F-1 -- actual return  1,000.00   958.69   3.25   .66 
Class F-1 -- assumed 5% return  1,000.00   1,021.82   3.35   .66 
Class F-2 -- actual return
  1,000.00   1,026.03   .39   .47 
Class F-2 -- assumed 5% return
  1,000.00   1,022.77   2.39   .47 
Class 529-A -- actual return  1,000.00   958.25   3.64   .74 
Class 529-A -- assumed 5% return  1,000.00   1,021.42   3.76   .74 
Class 529-B -- actual return  1,000.00   954.10   7.61   1.55 
Class 529-B -- assumed 5% return  1,000.00   1,017.34   7.86   1.55 
Class 529-C -- actual return  1,000.00   954.14   7.56   1.54 
Class 529-C -- assumed 5% return  1,000.00   1,017.39   7.81   1.54 
Class 529-E -- actual return  1,000.00   956.77   5.12   1.04 
Class 529-E -- assumed 5% return  1,000.00   1,019.91   5.28   1.04 
Class 529-F-1 -- actual return  1,000.00   959.35   2.66   .54 
Class 529-F-1 -- assumed 5% return  1,000.00   1,022.42   2.75   .54 
Class R-1 -- actual return  1,000.00   955.02   6.98   1.42 
Class R-1 -- assumed 5% return  1,000.00   1,018.00   7.20   1.42 
Class R-2 -- actual return  1,000.00   954.44   7.52   1.53 
Class R-2 -- assumed 5% return  1,000.00   1,017.44   7.76   1.53 
Class R-3 -- actual return  1,000.00   956.79   4.97   1.01 
Class R-3 -- assumed 5% return  1,000.00   1,020.06   5.13   1.01 
Class R-4 -- actual return  1,000.00   958.73   3.40   .69 
Class R-4 -- assumed 5% return  1,000.00   1,021.67   3.51   .69 
Class R-5 -- actual return  1,000.00   960.13   1.92   .39 
Class R-5 -- assumed 5% return  1,000.00   1,023.18   1.98   .39 
 
*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, and divided by 365 (to reflect the one-half year period).
 
† The period for the “annualized expense ratio” and “actual return” line is based on the number of days from August 1, 2008 (the initial sale of the share class), through August 31, 2008, and accordingly, is not representative of a full period.  The “assumed 5% return” line is based on 184 days.
 
 

Other share class results
unaudited

Classes B, C, F and 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       Life 
September 30, 2008 (the most recent calendar quarter-end): 1 year  5 years  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  –26.36%  2.79%  1.12%
Not reflecting CDSC  –22.85   3.15   1.12 
             
Class C shares — first sold 3/15/01
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  –23.54   3.11   1.39 
Not reflecting CDSC  –22.84   3.11   1.39 
             
Class F-1 shares1 — first sold 3/16/01
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  –22.23   3.93   2.42 
             
Class F-2 shares1 — first sold 8/1/08
            
Not reflecting annual asset-based fee charged            
by sponsoring firm        –5.692
             
Class 529-A shares3 — first sold 2/15/02
            
Reflecting 5.75% maximum sales charge  –26.77   2.67   1.97 
Not reflecting maximum sales charge  –22.29   3.89   2.88 
             
Class 529-B shares3 — first sold 2/19/02
            
Reflecting applicable CDSC, maximum of 5%,            
payable only if shares are sold within six years            
of purchase  –26.41   2.66   2.27 
Not reflecting CDSC  –22.90   3.01   2.27 
             
Class 529-C shares3 — first sold 2/19/02
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  –23.60   3.02   2.29 
Not reflecting CDSC  –22.90   3.02   2.29 
             
Class 529-E shares1,3 — first sold 3/7/02
  –22.51   3.56   1.97 
             
Class 529-F-1 shares1,3 — first sold 9/17/02
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  –22.12   3.99   6.42 
             
1These shares are sold without any initial or contingent deferred sales charge.
            
2Results are cumulative total returns; they are not annualized.
            
3Results 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 20 to 25 for details.

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


Approval of Investment Advisory and Service Agreement

The fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through March 31, 2009. The board approved the agreement following the recommendation of the fund’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided and that approving the agreement was in the best interests of the fund and its shareholders.

In reaching this decision, the board and the committee took into account information furnished to them throughout the year, as well as information prepared specifically in connection with their review of the agreement and were advised by their independent counsel. They considered the factors discussed below, among others, but did not identify any single issue or particular piece of information that, in isolation, was the controlling factor.

1. Nature, extent and quality of services

The board and the committee considered the depth and quality of CRMC’s investment management process, including its global research capabilities; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of its organization; and the ongoing evolution of CRMC’s organizational structure designed to maintain and strengthen these qualities. The board and the committee also considered the nature, extent and quality of administrative, compliance and shareholder services provided by CRMC to the fund under the agreement and other agreements as well as the benefits to fund shareholders from investing in a fund that is part of a large family of funds. The board and the committee concluded that the nature, extent and quality of the services provided by CRMC have benefited and should continue to benefit the fund and its shareholders.

2. Investment results

The board and the committee considered the investment results of the fund in light of its objective of providing long-term growth of capital. They compared the fund’s total returns with those of other relevant funds (including the other funds that are the basis of the Lipper index for the category in which the fund is included) and market data such as relevant market indices. This report, including the letter to shareholders and related disclosures, contains certain information about the fund’s investment results. The board and the committee concluded that the fund’s short- and long-term results have been satisfactory and that CRMC’s record in managing the fund indicated that its continued management should benefit the fund and its shareholders.

3. Advisory fees and total expenses

The board and the committee compared the advisory fees and total expense levels of the fund to those of other relevant funds. They observed that the fund’s advisory fees and expenses remain significantly below those of most other relevant funds. The board and the committee also noted the breakpoint discounts in the fund’s advisory fee structure that reduce the level of fees charged by CRMC to the fund as fund assets increase as well as the 10% advisory fee waiver in effect since April 2005. In addition, they reviewed information regarding the advisory fees paid by institutional clients of an affiliate of CRMC with investment mandates similar to those of the fund. They noted that, although the fees paid by those clients generally were lower than those paid by the fund, the differences appropriately reflected the significant investment, operational and regulatory differences between advising mutual funds and institutional clients. The board and the committee concluded that the fund’s cost structure was fair and reasonable in relation to the services provided, and that the shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund.

4. Ancillary benefits

The board and the committee considered a variety of other benefits received by CRMC and its affiliates as a result of CRMC’s relationship with the fund and the other American Funds, including fees for administrative services provided to certain share classes; fees paid to CRMC’s affiliated transfer agent; sales charges and distribution fees received and retained by the fund’s principal underwriter, an affiliate of CRMC; and possible ancillary benefits to CRMC’s institutional management affiliates. The board and the committee reviewed CRMC’s portfolio trading practices, noting that while CRMC receives the benefit of research provided by broker-dealers executing portfolio transactions on behalf of the fund, it does not obtain third-party research or other services in return for allocating brokerage to such broker-dealers. The board and the committee took these ancillary benefits into account in evaluating the reasonableness of the advisory fees and other amounts paid to CRMC by the fund.

5. Adviser financial information

The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, including personnel, systems and resources of investment, compliance, trading, accounting and other administrative operations. They considered CRMC’s costs and willingness to invest in technology, infrastructure and staff to maintain and expand services and capabilities, respond to industry and regulatory developments and attract and retain qualified personnel. They noted information previously received regarding the compensation structure for CRMC’s investment professionals. The board and the committee also compared CRMC’s profitability to the reported results of several large, publicly held investment management companies. The board and the committee noted the competitiveness and cyclicality of both the mutual fund industry and the capital markets, and the importance in that environment of CRMC’s long-term profitability for maintaining its independence, company culture and management continuity. They further considered the breakpoint discounts in the fund’s advisory fee structure and the impact of CRMC’s current 10% advisory fee waiver, reflecting benefits that may accrue from growth in assets. The board and the committee concluded that the fund’s advisory fee structure reflected a reasonable sharing of benefits between CRMC and the fund’s shareholders.
 
 
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 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 August 31, 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 December 31, 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 31 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
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
 
American Mutual Fund®
 
Capital World Growth and Income FundSM
 
Fundamental InvestorsSM
 
International Growth and Income FundSM
 
The Investment Company of America®
 
Washington Mutual Investors FundSM

 •Equity-income funds
 
Capital Income Builder®
 
The Income Fund of America®

 •Balanced fund
 
American Balanced Fund®

 •Bond funds
 
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
 
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. MFGESR-902-1008P
 
Litho in USA AGD/CG/8078-S16783
 
Printed on paper containing 10% post-consumer waste
 
Printed with inks containing soy and/or vegetable oil
 
 
ITEM 2 – Code of Ethics

Not applicable for filing of semi-annual reports to shareholders.


ITEM 3 – Audit Committee Financial Expert

Not applicable for filing of semi-annual reports to shareholders.


ITEM 4 – Principal Accountant Fees and Services

Not applicable for filing of semi-annual reports to shareholders.


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

August 31, 2008
 
unaudited


Common stocks — 85.60% Shares  
Value
(000)
 
       
INFORMATION TECHNOLOGY — 20.45%      
Cisco Systems, Inc.1
  24,704,300  $594,138 
Microsoft Corp.  19,695,000   537,477 
Intel Corp.  18,267,000   417,766 
Oracle Corp.1
  16,921,659   371,092 
Yahoo! Inc.1
  18,625,000   360,953 
SAP AG2
  5,255,000   294,100 
Hewlett-Packard Co.  3,900,000   182,988 
Google Inc., Class A1
  380,800   176,421 
Automatic Data Processing, Inc.  3,500,000   155,330 
Texas Instruments Inc.  5,750,000   140,933 
Apple Inc.1
  750,000   127,147 
Logitech International SA1
  4,550,000   121,439 
eBay Inc.1
  4,550,000   113,432 
KLA-Tencor Corp.  2,985,000   110,624 
Global Payments Inc.  2,250,000   108,472 
Hon Hai Precision Industry Co., Ltd.2
  19,410,000   97,515 
Maxim Integrated Products, Inc.  4,645,000   95,455 
EMC Corp.1
  6,100,000   93,208 
Linear Technology Corp.  2,500,000   81,600 
Verifone Holdings, Inc.1
  4,000,000   80,640 
Xilinx, Inc.  2,500,000   64,950 
Paychex, Inc.  1,600,000   54,528 
QUALCOMM Inc.  1,000,000   52,650 
Analog Devices, Inc.  1,750,000   48,930 
Applied Materials, Inc.  2,700,000   48,384 
Microchip Technology Inc.  1,500,000   48,015 
Delta Electronics, Inc.2
  12,316,500   33,074 
Dell Inc.1
  1,250,000   27,162 
Cadence Design Systems, Inc.1
  796,400   6,363 
       4,644,786 
         
CONSUMER DISCRETIONARY — 17.09%        
Lowe’s Companies, Inc.  24,889,700   613,282 
Target Corp.  8,316,000   440,914 
Best Buy Co., Inc.  7,400,000   331,298 
Johnson Controls, Inc.  8,570,000   264,984 
Time Warner Inc.  14,714,000   240,868 
Kohl’s Corp.1
  4,534,820   222,977 
YUM! Brands, Inc.  5,976,000   213,224 
Carnival Corp., units  5,725,200   212,176 
O’Reilly Automotive, Inc.1,3
  7,253,900   211,234 
Omnicom Group Inc.  4,100,000   173,799 
Harley-Davidson, Inc.  2,896,900   115,239 
Harman International Industries, Inc.3
  3,320,000   112,980 
Scripps Networks Interactive, Inc., Class A  2,600,000   108,004 
Tractor Supply Co.1,3
  2,525,000   107,616 
Williams-Sonoma, Inc.3
  5,500,000   97,295 
Walt Disney Co.  3,000,000   97,050 
Gentex Corp.  5,079,900   80,923 
Comcast Corp., Class A, special nonvoting stock  3,750,000   79,275 
Brinker International, Inc.  2,587,500   48,955 
Life Time Fitness, Inc.1
  900,000   31,815 
MGM Mirage, Inc.1
  678,942   23,892 
Liberty Media Corp., Liberty Interactive, Series A1
  1,750,000   23,782 
Timberland Co., Class A1
  905,000   15,258 
P.F. Chang’s China Bistro, Inc.1
  391,636   10,175 
Fossil, Inc.1
  197,000   5,894 
       3,882,909 
         
HEALTH CARE — 12.19%        
WellPoint, Inc.1
  6,950,000   366,891 
Medtronic, Inc.  6,300,000   343,980 
UnitedHealth Group Inc.  10,650,000   324,293 
Roche Holding AG2
  1,562,000   263,226 
Varian Medical Systems, Inc.1
  2,400,000   151,584 
Express Scripts, Inc.1
  1,600,000   117,456 
Becton, Dickinson and Co.  1,200,000   104,856 
Cardinal Health, Inc.  1,900,000   104,462 
Medco Health Solutions, Inc.1
  2,200,000   103,070 
Amgen Inc.1
  1,565,000   98,360 
Schering-Plough Corp.  5,000,000   97,000 
Haemonetics Corp.1,3
  1,390,000   87,181 
ResMed Inc1
  1,828,000   85,550 
Abbott Laboratories  1,400,000   80,402 
Medicis Pharmaceutical Corp., Class A3
  3,625,000   75,074 
Beckman Coulter, Inc.  936,400   69,125 
McKesson Corp.  1,100,000   63,558 
Forest Laboratories, Inc.1
  1,349,232   48,154 
Johnson & Johnson  500,000   35,215 
Boston Scientific Corp.1
  2,547,890   32,001 
Allergan, Inc.  560,000   31,287 
Henry Schein, Inc.1
  500,000   29,240 
Mentor Corp.  1,138,000   28,086 
Cochlear Ltd.2
  600,000   28,055 
       2,768,106 
         
FINANCIALS — 9.21%        
Capital One Financial Corp.  7,251,200   320,068 
Citigroup Inc.  16,806,700   319,159 
American International Group, Inc.  13,440,000   288,826 
American Express Co.  6,150,000   244,032 
State Street Corp.  3,325,000   225,003 
Wells Fargo & Co.  6,440,000   194,939 
PNC Financial Services Group, Inc.  1,545,000   111,163 
M&T Bank Corp.  1,124,230   80,203 
Arthur J. Gallagher & Co.  2,860,896   75,756 
JPMorgan Chase & Co.  1,700,000   65,433 
Fannie Mae  7,159,000   48,968 
Bank of New York Mellon Corp.  940,000   32,533 
Hudson City Bancorp, Inc.  1,700,000   31,348 
Wachovia Corp.  1,800,000   28,602 
Freddie Mac  6,050,000   27,285 
       2,093,318 
         
CONSUMER STAPLES — 7.60%        
Walgreen Co.  13,375,800   487,281 
PepsiCo, Inc.  5,000,000   342,400 
Avon Products, Inc.  5,045,000   216,077 
L’Oréal SA2
  1,950,000   193,621 
Philip Morris International Inc.  2,500,000   134,250 
McCormick & Co., nonvoting  2,996,100   121,192 
Costco Wholesale Corp.  1,600,000   107,296 
Kraft Foods Inc., Class A  1,211,042   38,160 
Altria Group, Inc.  1,750,000   36,803 
Whole Foods Market, Inc.  1,500,000   27,465 
Dean Foods Co.1
  900,000   22,653 
       1,727,198 
         
ENERGY — 5.98%        
Schlumberger Ltd.  3,740,000   352,383 
Newfield Exploration Co.1
  3,275,000   148,096 
Murphy Oil Corp.  1,850,000   145,280 
EOG Resources, Inc.  1,262,900   131,872 
Apache Corp.  1,100,000   125,818 
FMC Technologies, Inc.1
  2,345,000   125,598 
Smith International, Inc.  1,500,000   104,550 
Marathon Oil Corp.  2,090,000   94,196 
Devon Energy Corp.  800,000   81,640 
ConocoPhillips  600,000   49,506 
       1,358,939 
         
INDUSTRIALS — 5.67%        
Precision Castparts Corp.  2,579,015   266,309 
General Electric Co.  8,100,000   227,610 
United Parcel Service, Inc., Class B  3,200,000   205,184 
Robert Half International Inc.  7,359,000   188,390 
United Technologies Corp.  1,850,000   121,342 
Southwest Airlines Co.  6,353,800   96,768 
Avery Dennison Corp.  1,744,200   84,140 
FedEx Corp.  790,000   65,428 
Mine Safety Appliances Co.  881,050   32,009 
       1,287,180 
         
TELECOMMUNICATION SERVICES — 1.45%        
Sprint Nextel Corp., Series 1  17,200,000   149,984 
Telephone and Data Systems, Inc., Special Common Shares  2,000,900   74,734 
Telephone and Data Systems, Inc.  1,737,500   66,720 
United States Cellular Corp.1
  734,300   38,404 
       329,842 
         
MATERIALS — 1.19%        
Barrick Gold Corp.  2,500,000   86,825 
Monsanto Co.  633,003   72,321 
Sealed Air Corp.  2,400,000   58,152 
Potash Corp. of Saskatchewan Inc.  300,000   52,080 
       269,378 
         
MISCELLANEOUS — 4.77%        
Other common stocks in initial period of acquisition      1,084,542 
         
         
Total common stocks (cost: $18,065,688,000)      19,446,198 
         
         
  Principal amount     
Short-term securities — 14.28%  (000)    
         
Federal Home Loan Bank 1.706%–2.54% due 9/10–11/24/2008 $741,170   739,776 
U.S. Treasury Bills 1.43%–2.135% due 9/25/2008–1/15/2009  393,300   391,837 
Freddie Mac 2.04%–2.50% due 9/2–12/3/2008  341,700   341,226 
Fannie Mae 1.68%–2.10% due 9/3–12/8/2008  201,100   200,421 
Wal-Mart Stores Inc. 2.05%–2.10% due 11/10–12/22/20084
  136,800   135,651 
AT&T Inc. 2.20%–2.34% due 9/9–11/13/20084
  124,200   123,798 
Edison Asset Securitization LLC 2.28%–2.48% due 9/22–10/30/20084
  59,000   58,710 
General Electric Co. 2.35% due 9/16/2008  42,900   42,855 
General Electric Capital Services, Inc. 2.48% due 10/15/2008  17,600   17,547 
Coca-Cola Co. 2.08%–2.33% due 9/9–10/17/20084
  114,600   114,353 
Procter & Gamble Co. 2.08% due 9/23/20084
  42,200   42,144 
Procter & Gamble International Funding S.C.A. 2.10%–2.15% due 9/12–11/19/20084
  67,800   67,676 
IBM Capital Inc. 2.15–2.20% due 9/10/20084
  100,000   99,925 
United Parcel Service Inc. 2.13%–2.14% due 9/10–11/5/20084
  100,000   99,776 
Pfizer Inc 1.95%–2.28% due 9/8–9/26/20084
  95,400   95,283 
JPMorgan Chase & Co. 2.51%–2.62% due 10/6–10/15/2008  91,500   91,206 
Hewlett-Packard Co. 2.22%–2.30% due 9/19–10/14/20084
  85,400   85,220 
CAFCO, LLC 2.42% due 9/11/20084
  30,000   29,978 
Ciesco LLC 2.40% due 9/22/20084
  23,050   23,016 
Chevron Funding Corp. 2.13% due 9/4/2008  50,000   49,988 
3M Co. 2.01%–2.02% due 9/5/2008  39,900   39,889 
Merck & Co. Inc. 2.08%–2.20% due 10/6–10/14/2008  38,800   38,685 
Medtronic Inc. 2.06% due 9/17–9/23/20084
  36,700   36,659 
John Deere Capital Corp. 2.14% due 9/17/20084
  36,500   36,454 
E.I. duPont de Nemours and Co. 2.08% due 9/11/20084
  30,600   30,581 
Caterpillar Financial Services Corp. 2.02% due 9/22/2008  30,000   29,963 
Johnson & Johnson 2.09% due 10/29/20084
  30,000   29,866 
Paccar Financial Corp. 2.20% due 11/13/2008  30,000   29,827 
Honeywell International Inc. 2.09%–2.10% due 9/25–10/15/20084
  27,700   27,606 
Bank of America Corp. 2.68% due 10/7/2008  26,600   26,527 
Walt Disney Co. 2.00% due 10/28/2008  25,000   24,891 
PepsiCo Inc. 2.02% due 9/3/20084
  20,200   20,197 
NetJets Inc. 2.10% due 9/9/20084
  17,000   16,991 
Private Export Funding Corp. 2.13% due 9/2/20084
  6,000   5,999 
         
         
Total short-term securities (cost: $3,244,862,000)      3,244,521 
         
         
Total investment securities (cost: $21,310,550,000)     $22,690,719 
Other assets less liabilities      28,059 
         
Net assets     $22,718,778 

“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 $994,939,000, which represented 4.38% of the net assets of the fund.
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 $1,179,883,000, which represented 5.19% of the net
 assets of the fund.




Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.

 
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from your financial professional and should be read carefully before investing.
 
 
 
 
 
 
MFGEFP-902-1008O-S15884
 
 
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)Not applicable for filing of semi-annual reports to shareholders.
  
(a)(2)The certifications required by Rule 30a-2 of the Investment Company Act of 1940 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: November 7, 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: November 7, 2008



By /s/ Karl C. Grauman
Karl C. Grauman, Treasurer and
Principal Financial Officer
 
Date: November 7, 2008