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Amcap Fund (CAFBX)

Filed: 7 May 09, 8:00pm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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

Investment Company Act File Number: 811-01435



AMCAP Fund, Inc.
(Exact Name of Registrant as Specified in Charter)

333 South Hope Street
Los Angeles, California 90071
(Address of Principal Executive Offices)




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

Date of fiscal year end: February 28 or 29

Date of reporting period: February 28, 2009





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

Gaining a long-term perspective on today’s stock market

[photo of the trunk of a large tree - more trees in the background]
 
Annual report for the year ended February 28, 2009

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 nearly 80 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 March 31, 2009 (the most recent calendar quarter-end): 
          
Class A shares         
Reflecting 5.75% maximum sales charge 1 year  5 years  10 years 
          
Average annual total return     –5.70%  –0.06%
Cumulative total return  –38.03%  –25.42%  –0.64%

The total annual fund operating expense ratio was 0.74% for Class A shares as of the most recent fiscal year-end.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 24 and 25 for details.

Results for other share classes can be found on page 3.
 
 
In this report
  
 Special feature
  
6Gaining a long-term perspective on today’s stock market
  
 As difficult as the past year has been for global stock markets and economies, the real question at this point is, What happens next?
  
  
 Contents
  
1Letter to shareholders
  
4The value of a long-term perspective
  
12Summary investment
 portfolio
  
16Financial statements
  
30Board of directors and other officers

 
[photo of the trunk of a large tree - more trees in the background]

 
Fellow shareholders:

Fiscal 2009 was clearly one of the most difficult investment periods we have lived through. During the 12 months ended February 28, 2009, weakened housing markets, slowing economies and a worldwide credit crisis caused near-record declines in stock markets around the world. During the year, it became increasingly clear that our financial system had become too leveraged, too inexact in its measurement of risk, and overly complex. In retrospect, lending and borrowing practices of recent years now appear to have been sloppy at best, irresponsible at worst.

AMCAP Fund seeks to invest in high-quality growth companies with a history of above-average growth and good future prospects. However, fundamental growth was very hard to come by in the past year. Many fundamentally sound companies found themselves with problems in accessing credit, maintaining low enough inventories and realizing adequate demand for their goods and services. Since this has become a global decline and not just a domestic decline, even AMCAP companies with strong global positions experienced setbacks.

In this rough environment, AMCAP Fund posted a total return of –41.0%, better than the –43.3% of the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of mostly large U.S. stocks. As the table below shows, the fund also did better than the –44.4% return of the Lipper Multi-Cap Core Funds Index and the –44.9% return of the Lipper Growth Funds Index. However, given the sizable absolute loss, we take little solace in our relatively better results.

Although the past year diminished our gains, AMCAP continued to surpass the S&P 500 and its two peer-group indexes over the longer term by significant margins, as shown on page 2. Over its lifetime of almost 42 years, AMCAP provided an average annual total return of 10.2%, exceeding the 8.5% of the S&P 500, the 8.1% of the Lipper Multi-Cap Core Funds Index and the 7.4% of the Lipper Growth Funds Index. On a cumulative basis during its lifetime, AMCAP has returned twice as much as the S&P 500.

When assessing results, it’s important to keep in mind that beneath the battered stock prices are real companies that provide real goods and services, have serious managements and have an opportunity to come out of this period stronger and more competitive than they were before.

Investment results analysis

The credit crisis and its economic effects were so pervasive that few stocks escaped the downfall. Stock prices of most companies in AMCAP’s portfolio declined much more than fundamentals during this past year. Within the top 10, all posted double-digit declines during the period. Information technology companies, which make up four of the fund’s 10 largest holdings, helped on a relative basis, losing significantly less than the overall market. They include Google (–28.3%) and Oracle (–17.3%).

[Begin Sidebar]
Cumulative total returns (for periods ended 2/28/2009)
         
          
  1 year  5 years  10 years 
          
AMCAP (Class A shares)  –41.0%  –28.8%  –3.8%
Standard & Poor’s 500 Composite Index1
  –43.3   –29.0   –29.4 
Lipper Multi-Cap Core Funds Index2
  –44.4   –27.7   –19.0 
Lipper Growth Funds Index2
  –44.9   –32.8   –37.6 
             
1 The S&P 500 is unmanaged and its results do not reflect the effect of sales charges, commissions or expenses.
     
2 Lipper indexes do not include the effect of sales charges.
            
[End Sidebar]

The exception to the overall bad news was found in the consumer discretionary sector of the portfolio. O’Reilly Automotive, a major auto parts retailer specializing in after-market parts, tools, supplies, equipment and accessories, showed a 23.7% gain.

Energy service, production and exploration companies, which helped the fund’s results in the 2008 fiscal year because of rising oil prices, were disappointing in the past 12 months, as the price of oil fell from $102 a barrel on February 29, 2008, to $45 a barrel on February 28, 2009, because of slowing world demand. Schlumberger, a provider of services and technology to the oil industry, declined 56%.

Any exposure to financial companies hurt results this year, as banks’ balance sheets came under enormous pressure and regulators moved to shore up some of them while attempting to get credit flowing again. AMCAP had a relatively small investment in financials: 3.4% as of February 28, 2009, compared with a holding of 9.8% by the S&P 500.

AMCAP held a fair amount of cash during the year, ending the year at 13.6% of the portfolio, which helped buffer the portfolio’s decline by a bit. Portfolio counselors and investment analysts have sufficient cash resources to invest in quality companies whose stock prices, they believe, have been beaten down unjustifiably in the wave of selling. In our feature story on page 6, four AMCAP portfolio counselors discuss why shareholders should take a long-term perspective and how the fund’s investment professionals use fundamental research to identify opportunities.

Looking ahead

This is clearly one of the worst credit crises this country has ever experienced. While the process of deleveraging, increasing savings and improving corporate balance sheets is painful and so far incomplete, there are indications that financial systems around the world are starting to stabilize. The global stimulus packages are unusually large and bear watching for their long-term implications, but for the near term, they do seem to be having some encouraging effects.

We appreciate your continued support of AMCAP Fund and your commitment to taking a long-term perspective on your investments.

Cordially,

/s/ R. Michael Shanahan

R. Michael Shanahan
Vice Chairman of the Board

/s/ Claudia P. Huntington

Claudia P. Huntington
President

April 7, 2009

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

[Begin Sidebar]
AMCAP’s lifetime results (5/1/1967–2/28/2009)      
  Cumulative  Average annual 
  total return  total return 
       
AMCAP  5,778.3%  10.2%
Standard & Poor’s 500 Composite Index1
  2,876.9   8.5 
Lipper Multi-Cap Core Funds Index2
  2,520.8   8.1 
Lipper Growth Funds Index2
  1,861.5   7.4 
Consumer Price Index (inflation)3
  541.1   4.5 
         
1The S&P 500 is unmanaged and its results do not reflect the effect of sales charges, commissions or expenses.
     
2Lipper indexes do not include the effect of sales charges.
        
3Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
        
[End Sidebar]
 
 
Other share class results

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 March 31, 2009 (the most recent calendar quarter-end):         
          
  1 year  5 years  Life of class 
Class B shares1 — 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  –37.86%  –5.63%  –2.31%
Not reflecting CDSC  –34.73   –5.31   –2.31 
             
Class C shares — first sold 3/15/01
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  –35.32   –5.34   –2.52 
Not reflecting CDSC  –34.70   –5.34   –2.52 
             
Class F-1 shares2 — first sold 3/16/01
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  –34.18   –4.58   –1.55 
             
Class F-2 shares2 — first sold 8/1/08
            
Not reflecting annual asset-based fee charged            
by sponsoring firm        –30.453
             
Class 529-A shares4 — first sold 2/15/02
            
Reflecting 5.75% maximum sales charge  –38.03   –5.75   –2.46 
Not reflecting maximum sales charge  –34.26   –4.63   –1.65 
             
Class 529-B shares1,4 — first sold 2/19/02
            
Reflecting applicable CDSC, maximum of 5%, payable            
only if shares are sold within six years of purchase  –37.93   –5.76   –2.26 
Not reflecting CDSC  –34.80   –5.43   –2.26 
             
Class 529-C shares4 — first sold 2/19/02
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  –35.41   –5.42   –2.24 
Not reflecting CDSC  –34.78   –5.42   –2.24 
             
Class 529-E shares2,4 — first sold 3/7/02
  –34.42   –4.93   –2.51 
             
Class 529-F-1 shares2,4 — first sold 9/17/02
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  –34.15   –4.52   1.07 

 
1These shares are no longer available for purchase.
 
2These shares are sold without any initial or contingent deferred sales charge.
 
3Results are cumulative total returns; they are not annualized.
 
4Results shown do not reflect the $10 account setup fee and an annual $10 account maintenance fee.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 24 and 25 for details.

For information regarding the differences among the various share classes, please refer to the fund’s prospectus.
 
 
The value of a long-term perspective

How a $10,000 investment has grown.

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

The chart and accompanying table illustrate how a $10,000 investment in AMCAP grew between May 1, 1967 — when the fund began operations — and February 28, 2009.

As you can see, that $10,000 grew to $553,512 with all distributions reinvested. Over the same period, $10,000 would have grown to $297,686 in the unmanaged Standard & Poor’s 500 Composite Index. The chart also records the fund’s progress relative to the rate of inflation as measured by the Consumer Price Index.

The fund’s year-by-year results appear in the table under the chart. You can use this table to estimate how much the value of your own holdings has grown. While last year’s results have eroded gains made in recent years, it is helpful to maintain a long-term perspective. Let’s say, for example, that you have been reinvesting all your dividends and capital gain distributions since February 28, 1994. Over the last 15 years, including this past one, the value of your investment in AMCAP would have grown from $232,137 to $553,512, meaning that the value more than doubled.

Average annual total returns based on a $1,000 investment         
(for periods ended February 28, 2009)*         
  1 year  5 years  10 years 
          
Class A shares  –44.36%  –7.67%  –0.97%
             
*Assumes reinvestment of all distributions and payment of the maximum 5.75% sales charge.         

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 24 and 25 for details.
 
[begin mountain chart]
   S&P 500 with dividends reinvested   
 AMCAP with dividends reinvested4
   
 Consumer Price Index (inflation)5
 
            
5/1/1967 $10,000 5/1/1967 $9,425 5/1/1967 $10,000 
2/29/1968 $9,778 2/29/1968 $10,056 2/29/1968 $10,332 
2/28/1969 $11,074 2/28/1969 $12,212 2/28/1969 $10,816 
2/28/1970 $10,442 2/28/1970 $11,835 2/28/1970 $11,480 
2/28/1971 $11,713 2/28/1971 $12,643 2/28/1971 $12,054 
2/29/1972 $13,305 2/29/1972 $14,902 2/29/1972 $12,477 
2/28/1973 $14,345 2/28/1973 $13,978 2/28/1973 $12,961 
2/28/1974 $12,776 2/28/1974 $11,037 2/28/1974 $14,260 
2/28/1975 $11,354 2/28/1975 $9,903 2/28/1975 $15,861 
2/29/1976 $14,453 2/29/1976 $13,883 2/29/1976 $16,858 
2/28/1977 $15,062 2/28/1977 $14,173 2/28/1977 $17,855 
2/28/1978 $13,807 2/28/1978 $16,612 2/28/1978 $19,003 
2/28/1979 $16,105 2/28/1979 $22,738 2/28/1979 $20,876 
2/29/1980 $20,071 2/29/1980 $33,541 2/29/1980 $23,837 
2/28/1981 $24,400 2/28/1981 $40,548 2/28/1981 $26,556 
2/28/1982 $22,175 2/28/1982 $42,643 2/28/1982 $28,580 
2/28/1983 $30,690 2/28/1983 $61,456 2/28/1983 $29,577 
2/29/1984 $34,013 2/29/1984 $62,128 2/29/1984 $30,937 
2/28/1985 $41,108 2/28/1985 $72,165 2/28/1985 $32,024 
2/28/1986 $53,636 2/28/1986 $88,738 2/28/1986 $33,021 
2/28/1987 $69,462 2/28/1987 $115,664 2/28/1987 $33,716 
2/29/1988 $67,586 2/29/1988 $112,037 2/29/1988 $35,045 
2/28/1989 $75,608 2/28/1989 $122,827 2/28/1989 $36,737 
2/28/1990 $89,863 2/28/1990 $140,027 2/28/1990 $38,671 
2/28/1991 $103,018 2/28/1991 $163,492 2/28/1991 $40,725 
2/29/1992 $119,450 2/29/1992 $196,856 2/29/1992 $41,873 
2/28/1993 $132,158 2/28/1993 $208,557 2/28/1993 $43,233 
2/28/1994 $143,149 2/28/1994 $232,137 2/28/1994 $44,320 
2/28/1995 $153,672 2/28/1995 $240,047 2/28/1995 $45,589 
2/29/1996 $206,941 2/29/1996 $310,345 2/29/1996 $46,798 
2/28/1997 $261,046 2/28/1997 $346,783 2/28/1997 $48,218 
2/28/1998 $352,382 2/28/1998 $475,003 2/28/1998 $48,912 
2/28/1999 $421,935 2/28/1999 $575,089 2/28/1999 $49,698 
2/29/2000 $471,431 2/29/2000 $703,358 2/29/2000 $51,299 
2/28/2001 $432,799 2/28/2001 $724,638 2/28/2001 $53,112 
2/28/2002 $391,654 2/28/2002 $673,327 2/28/2002 $53,716 
2/28/2003 $302,860 2/28/2003 $567,618 2/28/2003 $55,317 
2/29/2004 $419,452 2/29/2004 $777,420 2/29/2004 $56,254 
2/28/2005 $448,688 2/28/2005 $808,037 2/28/2005 $57,946 
2/28/2006 $486,349 2/28/2006 $895,855 2/28/2006 $60,030 
2/28/2007 $544,532 2/28/2007 $968,098 2/28/2007 $61,480 
2/29/2008 $524,909 2/29/2008 $937,689 2/29/2008 $63,956 
2/28/2009 $297,686 2/28/2009 $553,512 2/28/2009 $64,107 
[end mountain chart]

Year ended                     
February 28 or 29  19683 1969  1970  1971  1972  1973  1974 
Total value (dollars in thousands)
                 
Dividends reinvested    $.1   .2   .2   .2   .2   .2 
Value at fiscal year-end1
 $10.1   12.2   11.8   12.6   14.9   14.0   11.0 
AMCAP total return  0.6%  21.4   (3.1)  6.8   17.9   (6.2)  (21.0)
                             
                             
Year ended                            
February 28 or 29 1975  1976  1977  1978  1979  1980  1981 
Total value (dollars in thousands)
                         
Dividends reinvested  .3   .3   .2   .3   .3   .4   .7 
Value at fiscal year-end1
  9.9   13.9   14.2   16.6   22.7   33.5   40.5 
AMCAP total return  (10.3)  40.2   2.1   17.2   36.9   47.5   20.9 
                             
                             
Year ended                            
February 28 or 29 1982  1983  1984  1985  1986  1987  1988 
Total value (dollars in thousands)
                         
Dividends reinvested  2.6   1.2   1.6   1.9   1.5   1.6   3.0 
Value at fiscal year-end1
  42.6   61.5   62.1   72.2   88.7   115.7   112.0 
AMCAP total return  5.2   44.1   1.1   16.2   23.0   30.3   (3.1)
                             
                             
Year ended                            
February 28 or 29 1989  1990  1991  1992  1993  1994  1995 
Total value (dollars in thousands)
                         
Dividends reinvested  3.2   3.2   3.3   2.2   2.3   1.9   2.4 
Value at fiscal year-end1
  122.8   140.0   163.5   196.9   208.6   232.1   240.0 
AMCAP total return  9.6   14.0   16.8   20.4   5.9   11.3   3.4 
                             
                             
Year ended                            
February 28 or 29 1996  1997  1998  1999  2000  2001  2002 
Total value (dollars in thousands)
                         
Dividends reinvested  3.4   2.6   2.5   3.7   3.3   4.1   3.7 
Value at fiscal year-end1
  310.3   346.8   475.0   575.1   703.4   724.6   673.3 
AMCAP total return  29.3   11.7   37.0   21.1   22.3   3.0   (7.1)
                             
                             
Year ended                            
February 28 or 29 2003  2004  2005  2006  2007  2008  2009 
Total value (dollars in thousands)
                         
Dividends reinvested  1.1   .1   2.0   4.1   7.2   11.4    
Value at fiscal year-end1
  567.6   777.4   808.0   895.9   968.1   937.7   553.5 
AMCAP total return  (15.7)  37.0   3.9   10.9   8.1   (3.1)  (41.0)

Average annual total return for 41-3/4 years 10.1%4

 
1As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares.
 
2The maximum initial sales charge was 8.5% prior to July 1, 1988.
 
3For the period May 1, 1967 (when the fund began operations), through February 29, 1968.
 
4Includes reinvested dividends of $84,803 and reinvested capital gain distributions of $633,757.
 
5Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.

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

Gaining a long-term perspective on today’s stock market

[photo of trees in a forest]
 
[photo of a trail in a forest]
 
[Begin Sidebar]
It is easy to get caught up in the minute-by-minute coverage of fluctuating news and stock prices. It’s very difficult to keep in mind that underlying the volatile stock prices are real companies that provide real goods and services and have serious managements. …
— Claudia Huntington, president
[End Sidebar]
 
[Begin Photo Caption]
[photo of Claudia Huntington]
Claudia Huntington
[End Photo Caption]

As difficult as the past year has been for global stock markets and economies, the real question at this point is, What happens next? Precise predictions are bound to be inaccurate. “But it certainly is clear,” says Claudia Huntington, president of AMCAP Fund, “that underlying global demand and supply are adjusting rapidly and governments around the world are bringing fiscal and monetary policy to bear in order to stabilize the credit markets.”

It is important to keep in mind that market cycles have always existed. “Cycles imply an upside and a downside,” Claudia says. “The current downside has been particularly tough, and it’s hard to take a long-term perspective when the world looks most bleak.”

In this environment, what is the one word we can offer our shareholders to help them think about the future? “Perspective,” says Claudia. “These days, it is easy to get caught up in the minute-by-minute coverage of fluctuating news and stock prices. It’s very difficult to keep in mind that underlying the volatile stock prices are real companies that provide real goods and services, have serious managements and are taking steps to ensure that they will come out of this period stronger and more competitive. Not all of them will, of course. But often, times such as these can be great opportunities for companies to become more productive, more focused and more streamlined.” That kind of perspective is precisely what the investment managers of AMCAP are focused on today. We thought that you might find it helpful to hear their views on the current situation and their beliefs about the road ahead.

Our panel discussion with Claudia; Michael Shanahan, vice chairman of AMCAP and a portfolio counselor; and portfolio counselors Tim Armour and Ross Sappenfield follows.

How did this worldwide credit crisis begin, and where does it go from here?

Tim Armour: The crisis started in subprime mortgage lending, and it has rolled into higher quality mortgages. Now it’s headed to commercial real estate, auto loans and credit card loans. So there is no place to hide in the financial industry. Everything related to credit or lending has been hurt because the standards of lending have become so weak. They were too easy, and lots of people were able to borrow money at very low rates when they really shouldn’t have. Frankly, their creditworthiness was, and is, quite suspect in many cases. This comes at the end of 20 to 30 years of credit expansion to companies and individuals. We have leveraged the system to such an extent that we now must pay the piper for those excesses.

[Begin Sidebar]
Fund results shown 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. For current information and month-end results, visit americanfunds.com.
[End Sidebar]
 
[photo of the top of trees in a forest]
 
[Begin Photo Caption]
[photo of Mike Shanahan]
Mike Shanahan
[End Photo Caption]

[Begin Sidebar]
The 1929–32 era is far from our world today and not comparable. ... In fact, there wasn’t any regulation of banks in 1929 to 1932; all that came later. Today, we have a system that can step in to help avoid a similar situation.
— Mike Shanahan, vice chairman
[End Sidebar]

Can we learn lessons from other major stock market declines and bear markets?

Mike Shanahan: The 1929–32 era is far from our world today and not comparable. Back then, you had a string of bank failures, but they weren’t large banks and they weren’t New York-based. It was the smaller agricultural banks instead. They suffered the effects of their customers’ crop losses, and their farm loans went under. You had a significant deflation in commodity prices. In fact, there wasn’t any regulation of banks in 1929 to 1932; all that came later. Today, we have a system that can step in to help avoid a similar situation. This current crisis arose from financial innovation instead of technological innovation, such as the dot-com bubble of 2000 to 2002. We went from a system in which banks held mortgages on their books to one in which banks originate mortgages and then securitize and distribute them. For hundreds of years, the secret to good lending was to know the borrower. In today’s world, often the lenders no longer know any details about who the borrowers really are.

Claudia: I agree with Tim and Mike. Our financial system was too leveraged and too unable or, perhaps, unwilling to accurately measure risk and too complex. Responsible lending and borrowing methods were left by the wayside. The result has been a crisis in credit that has exacerbated the problems for an economy that was already starting to slow down.

Are there any rays of sunshine in all of this gloom? Where are we now in this crisis?

Tim: We are coming off a period that had huge excesses, and it’s going to take a while to get back to normal. Much of the excesses that have occurred over the last several years cannot continue, and that is always painful. The good part about it is that there are a lot of very good companies out there that make products or that provide services that are going to continue to be valuable and needed. So for now, if we can have a long-term time horizon and be patient, I think we can find the opportunity to buy pieces of very good companies that could do quite well over the long run.

[Begin Sidebar]
We are coming off a period that had huge excesses, and it’s going to take a while to get back to normal. Much of the excesses that have occurred over the last several years cannot continue, and that is always painful.
— Tim Armour, portfolio counselor
[End Sidebar]
 
[Begin Photo Caption]
[photo of Tim Armour]
Tim Armour
[End Photo Caption]
 
[photo of a tree - sunlight shining through branches of other trees]

 
Claudia: This economic decline tends to be cathartic for many companies because they become more productive, focusing on what they do well. Sometimes they get rid of parts of the company that they shouldn’t have had in the first place. Often they emerge from a recession leaner and more streamlined.

Ross Sappenfield: As a contrarian investor, I get more and more positive as the market and the news media stories get more and more negative. I am finding many more opportunities now than a year ago. But even the most die-hard contrarian has probably been shaken over the last year, because the depth of the decline and the problems in the market turned out to be so much worse than even the most pessimistic person would have thought a year ago. So I am looking for stocks that are inexpensively valued relative to their earnings outlook over the next three or more years.

What opportunities are you looking for in the current environment?

Ross: Having a strong balance sheet is an absolute necessity. But I am also looking for businesses that are inherently stable and less volatile. If they look as inexpensively valued as the rest of the market, they should be worth more in future years. So that’s where I am focusing my attention. Two areas are health care services and medical devices companies. Their businesses have been quite steady, but their stocks are down a lot like the general market. I am meeting with corporate managements of these companies to hear their views on the near term and the long term. I talk with their competitors, customers and suppliers. I also want to make sure that the longer term competitive position of companies we already hold in our portfolio is intact, despite the current difficult environment.

[Begin Sidebar]
AMCAP vs. S&P 500 Composite Index 1 year  10 years  20 years  30 years  AMCAP lifetime 
                
Cumulative returns (for periods ended 2/28/09)               
                
AMCAP  –40.97%  –3.75%  350.64%  2,334.31%  5,778.27%
                     
Standard & Poor’s 500 Composite Index  –43.29   –29.45   293.72   1,748.41   2,876.86 
                     
Annualized returns (for periods ended 2/28/09)                    
                     
AMCAP  –40.97   –0.38   7.82   11.23   10.23 
                     
Standard & Poor’s 500 Composite Index  –43.29   –3.43   7.09   10.21   8.45 
[End Sidebar]

[Begin Sidebar]
[photo of tree trunks]
A wealth of experience   
    
AMCAP Fund’s six portfolio counselors bring together 152 years of investment experience to managing your investment. Here are the specific years of experience for these primary decision-makers for the fund: 
    
  Years of 
  investment 
Portfolio counselor experience 
    
R. Michael Shanahan  44 
Claudia P. Huntington  36 
Timothy D. Armour  26 
Eric S. Richter  17 
C. Ross Sappenfield  17 
Barry S. Crosthwaite  12 
     
Years of experience as of May 1, 2009.    
[End Sidebar]
 
[Begin Sidebar]
Having a strong balance sheet is an absolute necessity. But I am also looking for businesses that are inherently stable and less volatile. If they look as inexpensively valued as the rest of the market, they should be worth more in future years.
— Ross Sappenfield, portfolio counselor
[End Sidebar]
 
[Begin Photo Caption]
[photo of Ross Sappenfield]
Ross Sappenfield
[End Photo Caption]

Tim: Companies with large cash positions are the best. Little debt is great because they don’t have to worry about refinancing or needing debt to grow their businesses.

Claudia: We still have enormous engines of growth in the developing markets, like China, India and Brazil, and many of them don’t have the leverage that developed markets have. They have higher savings rates than the developed markets and plenty of opportunities for internal growth and export growth. We have some excellent companies in the U.S. that are great global competitors, and I believe they should continue to be great competitors when this market cycle moves to the upside.

What are your concerns as we move forward?

Claudia: Higher systemwide taxes are one of my concerns. Paying for the stimulus is going to be a challenge, and I’m hopeful that we will find a way to strengthen the economy to generate higher employment and higher government revenues, as opposed to raising the overall tax structure for businesses or individuals. This is a country that is already taxed at one of the highest levels of any nation, depending on how you measure that. Generally, higher taxes make it harder for a country to be competitive.

Tim: Reduced consumer- and business-spending are concerns. Consumers are getting to the point where, for the first time in a while, they are saving money instead of spending everything they have. Businesses have cut way back on capital spending and consumption because they are trying to shore up their balance sheets. Companies have stopped ordering, so they are running down inventories because they are trying to conserve cash. This means that most companies are going to see their sales decline a fair amount, and we’ve already seen the early signs of this.
 
[photo of a road - trees on either side]

[Begin Sidebar]
My message to you, therefore, is “Courage!” We have been here before. Bear markets have lasted this long before. Well-managed mutual funds have gone down this much before. And shareholders in those funds have survived and prospered.
— Jim Fullerton,
first chairman of AMCAP Fund, 1974,
near the bottom of the bear market
[End Sidebar]

The road ahead

On November 7, 1974, near the bottom of the 1973–74 bear market, Jim Fullerton (the first chairman of AMCAP Fund) gave a speech that is just as relevant today as it was 35 years ago. (Jim retired in 1984 after a 27-year career with The Capital Group Companies.) In November 1974, few people thought it was a good time to invest. The Dow Jones Industrial Average lost more than 40% from its high in January 1973. Jim offered some perspective by recalling an even darker period in U.S. history — April 1942, five months after American naval ships were attacked at Pearl Harbor.

“One significant reason why there is such an extreme degree of bearishness, pessimism, bewildering confusion and sheer terror in the minds of brokers and investors right now is that most people today have nothing in their own experience that they can relate to, which is similar to this market decline,” Jim said in 1974.

“In 1942, everyone knew it was a whole new ballgame. We were in a war that we were losing. The Germans had overrun France. The British had been thrown out of Dunkirk. The Pacific fleet had been disastrously crippled at Pearl Harbor.

“Yet on April 28, 1942, in that gloomy environment, the market turned around. Why? Simply a return to reality. Simply a slow, but growing, recognition that despite all the bad news and gloomy outlook, the United States was going to survive and that strongly financed and well-managed U.S. corporations were going to survive also. The reality was that those companies were far more valuable than the prices of their stocks had indicated. The Dow Jones Industrial Average is not reality. In the real world, companies create wealth.

“My message to you, therefore, is ‘Courage!’ We have been here before. Bear markets have lasted this long before. Well-managed mutual funds have gone down this much before. And shareholders in those funds have survived and prospered.”
 
 
Summary investment portfolio, February 28, 2009
 
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  24.34%
Consumer discretionary  15.30 
Health care  13.09 
Industrials  8.83 
Energy 7.95 
Other industries  16.88 
Short-term securities & other assets less liabilities  13.61 
[end pie chart]
 
 
        Percent 
     Value  of net 
Common stocks  - 86.39% Shares   (000) assets 
           
Information technology  - 24.34%          
Microsoft Corp.  22,435,500  $362,333   2.78%
A world leader in software and Internet technologies. Its products include the Windows operating system and Office software.            
Google Inc., Class A (1)  844,800   285,534   2.19 
One of the most frequently used website search engines in the world.            
Yahoo! Inc. (1)  21,395,000   283,056   2.17 
One of the three largest Internet portals, offering online media, commerce and communications services to consumers and businesses worldwide.            
Oracle Corp. (1)  15,921,659   247,423   1.90 
Major supplier of database management software. Also develops business applications and provides consulting and support.            
Cisco Systems, Inc. (1)  14,004,300   204,043   1.57 
The leading maker of equipment used in Internet networking.            
Corning Inc.  18,200,000   192,010   1.48 
Leading manufacturer of optical fiber, ceramics and high-performance glass used in industrial and scientific products.            
SAP AG  5,786,600   187,509   1.44 
A leading developer of software for business applications. Also provides information technology services.            
Apple Inc. (1)  2,000,000   178,620   1.38 
Manufacturer of personal computers and various software products, as well as portable media players, browsers and smartphones.            
Automatic Data Processing, Inc.  4,300,000   146,845   1.13 
Major provider of payroll processing and data communications services.            
Hewlett-Packard Co.  3,500,000   101,605   .78 
A premier manufacturer of servers, software, printing systems and PCs.            
Intel Corp.  7,972,000   101,563   .78 
Leading supplier of microprocessors and other integrated circuits for personal computers, networks and communications products.            
Global Payments Inc.  3,010,000   92,347   .71 
Provider of electronic payment processing and money transfer services.            
Other securities      785,377   6.03 
       3,168,265   24.34 
             
             
Consumer discretionary  - 15.30%            
Time Warner Inc.  29,914,000   228,244   1.75 
This media and communications conglomerate combines Internet services with film, TV, cable and publishing.            
Best Buy Co., Inc.  6,900,000   198,858   1.53 
This leading consumer electronics retailer also sells home office products, entertainment software and appliances.            
Lowe's Companies, Inc.  11,499,700   182,155   1.40 
Among America's largest do-it-yourself home improvement retailers.            
Omnicom Group Inc.  7,301,000   175,443   1.35 
The world's largest advertising group.            
O'Reilly Automotive, Inc. (1)  5,184,800   172,965   1.33 
Major auto parts retailer specializing in aftermarket parts, tools, supplies, equipment and accessories.            
Target Corp.  6,095,600   172,566   1.32 
Operates Target, a major chain of general merchandise and food discount stores in the U.S.            
YUM! Brands, Inc.  5,976,000   157,049   1.21 
Quick-service-oriented restaurant company whose brands include KFC, Long John Silver's, Pizza Hut and Taco Bell.            
Johnson Controls, Inc.  9,586,000   109,089   .84 
A leading manufacturer of components for automotive systems and building controls.            
Carnival Corp., units  4,975,200   97,315   .75 
The world's largest cruise company. Its brands include Carnival Cruises, Princess Cruises and Holland America.            
Bed Bath & Beyond Inc. (1)  4,500,000   95,850   .73 
A leading retailer of domestic goods and home furnishings.            
Other securities      401,910   3.09 
       1,991,444   15.30 
             
             
Health care  - 13.09%            
Medtronic, Inc.  8,180,000   242,046   1.86 
A leading producer of medical devices, including pacemakers and implantable defibrillators.            
WellPoint, Inc. (1)  6,530,806   221,525   1.70 
One of the nation's largest managed care providers.            
McKesson Corp.  3,850,000   157,927   1.22 
A leading distributor of pharmaceuticals in the U.S.            
Schering-Plough Corp.  9,000,000   156,510   1.20 
Global pharmaceutical company focused on prescription drugs, consumer health care and animal health products.            
Roche Holding AG  1,262,000   143,901   1.11 
A world leader in pharmaceuticals and diagnostic research.            
UnitedHealth Group Inc.  6,500,000   127,725   .98 
Provides managed health care services across the U.S.            
Other securities      653,710   5.02 
       1,703,344   13.09 
             
             
Industrials  - 8.83%            
Precision Castparts Corp.  4,121,621   228,461   1.76 
Manufactures jet engine parts, valves and industrial tools.            
United Parcel Service, Inc., Class B  3,200,000   131,776   1.01 
The world's largest package delivery company and express carrier.            
United Technologies Corp.  2,850,000   116,366   .90 
Among the world's leading producers of elevators, jet engines, helicopters, aerospace systems, security services, and heating and air conditioning systems.          
Robert Half International Inc.  7,359,000   113,108   .87 
One of the world's largest providers of professional staffing services.            
General Electric Co.  12,900,000   109,779   .84 
One of the world's top makers of power turbines, aircraft engines and medical imaging equipment. Operates finance businesses and NBC Universal, the entertainment conglomerate, and makes consumer appliances, lighting and industrial equipment.   
Manpower Inc.  3,506,000   97,747   .75 
Provides temporary staffing services around the world.            
General Dynamics Corp.  2,115,000   92,679   .71 
This major defense contractor manufactures warships, submarines and information systems.            
Other securities      259,483   1.99 
       1,149,399   8.83 
             
             
Energy  - 7.95%            
Schlumberger Ltd.  5,740,000   218,464   1.68 
A leading provider of services and technology to the petroleum industry.            
FMC Technologies, Inc. (1)  4,620,000   122,384   .94 
A leader in offshore energy production, food processing and airplane loading systems.            
Hess Corp.  2,100,000   114,849   .88 
Explores for and produces crude oil, natural gas and refined petroleum products.            
Other securities      578,891   4.45 
       1,034,588   7.95 
             
             
Consumer staples  - 5.95%            
PepsiCo, Inc.  4,577,481   220,360   1.69 
A global soft drink and snack foods company.            
Walgreen Co.  8,291,600   197,837   1.52 
One of the largest drugstore chains in the U.S.            
L'Oréal SA  1,450,000   94,506   .73 
One of the world's largest makers of beauty products. In addition to L'Oreal, its brands include Maybelline and Lancome.            
Avon Products, Inc.  4,957,883   87,209   .67 
In addition to distribution through direct sales, Avon sells its cosmetics via catalog, mall kiosks and the Internet.            
Philip Morris International Inc.  2,500,000   83,675   .64 
One of the world's largest international tobacco companies.            
Other securities      90,955   .70 
       774,542   5.95 
             
��            
Financials  - 3.42%            
Capital One Financial Corp.  7,251,200   87,377   .67 
One of the largest U.S. credit card issuers.            
Other securities      357,706   2.75 
       445,083   3.42 
             
             
Materials  - 2.43%            
Barrick Gold Corp.  2,800,000   84,560   .65 
Owns and operates gold mines in North and South America, Australia and Africa.            
Other securities      231,098   1.78 
       315,658   2.43 
             
             
Telecommunications services - 1.01%            
Other securities      131,541   1.01 
             
             
Miscellaneous  -  4.07%            
Other common stocks in initial period of acquisition      529,484   4.07 
Total common stocks (cost: $16,264,128,000)      11,243,348   86.39 
             
             
             
  Principal         
  amount         
Short-term securities  - 14.02%  (000)        
Freddie Mac 0.22%-1.30% due 3/23-9/15/2009 $756,000   754,900   5.80 
Fannie Mae 0.308%-0.85% due 5/19-7/22/2009  196,100   195,746   1.50 
Federal Home Loan Bank 0.24%-0.56% due 3/12-10/19/2009  159,089   158,794   1.22 
U.S. Treasury Bills 0.27%-0.34% due 4/9-9/15/2009  122,700   122,610   .95 
General Electric Capital Corp. 0.27% due 3/2/2009  56,000   55,999     
General Electric Capital Corp., FDIC insured, 0.55% due 6/15/2009  30,000   29,955   .66 
Hewlett-Packard Co. 0.30% due 3/10/2009 (2)  32,600   32,597��  .25 
Other securities      473,491   3.64 
       1,824,092   14.02 
             
             
Total short-term securities (cost: $1,824,484,000)      1,824,092   14.02 
             
             
Total investment securities (cost: $18,088,612,000)      13,067,440   100.41 
Other assets less liabilities      (52,933)  (0.41)
             
Net assets     $13,014,507   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 value of the fund's holdings in affiliated companies is included in "Other securities" under their respective industry sectors in the preceding summary investment portfolio.  Further details on these holdings and related transactions during the year ended February 28, 2009, appear below.
 
  Beginning shares  Additions  Reductions  Ending shares   
Dividend
income
(000
)  
Value of affiliates at 2/28/2009
(000
)
Williams-Sonoma, Inc.  6,000,000   674,900   500,000   6,174,900  $2,771  $53,907 
Medicis Pharmaceutical Corp., Class A  3,625,000   -   -   3,625,000   580   40,890 
Harman International Industries, Inc.  1,728,901   1,591,099   -   3,320,000   146   35,258 
Portfolio Recovery Associates, Inc. (1)  -   975,391   -   975,391   -   22,005 
Bare Escentuals, Inc. (1)  -   5,735,000   -   5,735,000   -   18,123 
Haemonetics Corp. (1) (3)  1,190,000   200,000   1,190,000   200,000   -   - 
O'Reilly Automotive, Inc. (1) (3)  6,794,800   459,100   2,069,100   5,184,800   -   - 
P.F. Chang's China Bistro, Inc.(3)  1,650,000   -   1,650,000   -   -   - 
Talbots, Inc.(3)  3,057,725   -   3,057,725   -   -   - 
Tractor Supply Co. (1) (3)  2,525,000   -   1,000,000   1,525,000   -   - 
                  $3,497  $170,183 
 
 
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) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $361,398,000, which represented 2.78% of the net assets of the fund.
(3) Unaffiliated issuer at 2/28/2009.
 
 
The descriptions of the companies shown in the summary investment portfolio are supplemental. These descriptions and the industry classifications were obtained from published reports and other sources believed to be reliable, and are not covered by the Report of Independent Registered Public Accounting Firm.
 
See Notes to Financial Statements
 
 
Financial statements
 
Statement of assets and liabilities      
at February 28, 2009  (dollars in thousands) 
       
Assets:      
 Investment securities, at value:      
  Unaffiliated issuers (cost: $17,517,039) $12,897,257    
  Affiliated issuers (cost: $571,573)  170,183  $13,067,440 
 Cash      89 
 Receivables for:        
  Sales of investments  100,266     
  Sales of fund's shares  17,681     
  Dividends and interest  28,621   146,568 
       13,214,097 
Liabilities:        
 Payables for:        
  Purchases of investments  133,653     
  Repurchases of fund's shares  48,957     
  Investment advisory services  3,674     
  Services provided by affiliates  11,447     
  Directors' deferred compensation  1,560     
  Other  299   199,590 
Net assets at February 28, 2009     $13,014,507 
         
Net assets consist of:        
 Capital paid in on shares of capital stock     $20,159,508 
 Undistributed net investment income      179,211 
 Accumulated net realized loss      (2,302,983)
 Net unrealized depreciation      (5,021,229)
Net assets at February 28, 2009     $13,014,507 
 
 
 
  (dollars and shares in thousands, except per-share amounts) 
Total authorized capital stock - 2,000,000 shares, $1.00 par value (1,254,834 total shares outstanding)    
  Net assets  Shares outstanding  Net asset value per share* 
Class A $8,686,939   831,997  $10.44 
Class B  498,850   49,999   9.98 
Class C  735,587   74,285   9.90 
Class F-1  1,077,463   103,703   10.39 
Class F-2  87,190   8,337   10.46 
Class 529-A  286,752   27,548   10.41 
Class 529-B  48,349   4,836   10.00 
Class 529-C  83,207   8,317   10.00 
Class 529-E  16,572   1,612   10.28 
Class 529-F-1  11,743   1,126   10.43 
Class R-1  23,843   2,362   10.09 
Class R-2  238,311   23,653   10.08 
Class R-3  349,243   33,933   10.29 
Class R-4  251,871   24,220   10.40 
Class R-5  618,587   58,906   10.50 
  
(*) 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 $11.08 and $11.05, respectively. 
             
             
See Notes to Financial Statements            
 
 
Statement of operations      
for the year ended February 28, 2009  (dollars in thousands)
       
Investment income:      
 Income:      
  Dividends (net of non-U.S.      
            taxes of $3,784; also includes      
            $3,497 from affiliates) $290,590    
  Interest  60,430  $351,020 
         
 Fees and expenses*:        
  Investment advisory services  65,646     
  Distribution services  65,356     
  Transfer agent services  22,825     
  Administrative services  10,206     
  Reports to shareholders  1,102     
  Registration statement and prospectus  757     
  Postage, stationery and supplies  2,196     
  Directors' compensation  (434)    
  Auditing and legal  118     
  Custodian  299     
  State and local taxes  202     
  Other  126     
  Total fees and expenses before waiver  168,399     
   Less investment advisory services waiver  5,768     
  Total fees and expenses after waiver      162,631 
 Net investment income      188,389 
         
Net realized loss and unrealized        
 depreciation on investments and currency:        
 Net realized loss on:        
  Investments (including $(111,451) net loss from affiliates)  (2,302,902)    
  Currency transactions  (463)  (2,303,365)
 Net unrealized depreciation on:        
  Investments  (7,434,569)    
  Currency translations  (157)  (7,434,726)
   Net realized loss and unrealized depreciation on investments and currency      (9,738,091)
Net decrease in net assets resulting        
 from operations     $(9,549,702)
         
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.        
         
See Notes to Financial Statements        
         
         
         
         
Statements of changes in net assets   (dollars in thousands)
         
  Year ended  Year ended 
  February 28,  February 29, 
  2009  2008 
Operations:        
 Net investment income $188,389  $294,419 
 Net realized (loss) gain on investments        
  and currency transactions  (2,303,365)  2,289,586 
 Net unrealized depreciation on investments        
  and currency translations  (7,434,726)  (3,427,418)
  Net decrease in net assets resulting from operations  (9,549,702)  (843,413)
         
Dividends and distributions paid to shareholders:        
 Dividends from net investment income  -   (272,105)
 Distributions from net realized gain on investments  (938,078)  (1,437,511)
  Total dividends and distributions paid to shareholders  (938,078)  (1,709,616)
         
         
Net capital share transactions  (1,160,523)  1,562,312 
         
Total decrease in net assets  (11,648,303)  (990,717)
         
Net assets:        
 Beginning of year  24,662,810   25,653,527 
 End of year (including undistributed and distributions in excess of        
  net investment income: $179,211 and $(2,267), respectively) $13,014,507  $24,662,810 
         
         
See Notes to Financial Statements        
 
 
Notes to financial statements
 
1. Organization and significant accounting policies
 
Organization – AMCAP Fund, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks long-term growth of capital by investing primarily in U.S. companies with a record of above-average growth.

The fund has 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 offered only 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.

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. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. 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. Risk factors
 
Investing in the fund may involve certain risks including, but not limited to, those described below.

The value of the fund’s portfolio holdings may fluctuate in response to events specific to the companies or markets in which the fund invests, as well as economic, political or social events in the U.S. or abroad.

The prices of securities held by the fund may decline in response to certain events, including those directly involving the companies whose securities are owned by the fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and commodity price fluctuations.

The growth-oriented, equity-type securities generally purchased by the fund may involve large price swings and potential for loss.
 
3. Taxation and distributions                                                                                     

Federal income taxation – 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 February 28, 2009, 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 2005 and by state tax authorities for tax years before 2004.

Non-U.S. taxation – Dividend income is recorded net of non-U.S. taxes paid.

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; deferred expenses; cost of investments sold; and net capital losses. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

During the year ended February 28, 2009, the fund reclassified $619,000 from undistributed net investment income to accumulated net realized loss; and $6,292,000 from undistributed net investment income to capital paid in on shares of capital stock to align financial reporting with tax reporting.

As of February 28, 2009, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

  (dollars in thousands) 
     
Undistributed ordinary income $180,952 
Post-October currency loss deferrals (realized during the period November 1, 2008, through February 28, 2009)*
  (181)
Capital loss carryforward expiring 2017
  (860,717)
Post-October capital loss deferrals (realized during the period November 1, 2008, through February 28, 2009)*
  (1,442,045)
Gross unrealized appreciation on investment securities  521,833 
Gross unrealized depreciation on investment securities  (5,543,227)
Net unrealized depreciation on investment securities  (5,021,394)
Cost of investment securities  18,088,834 
     
*These deferrals are considered incurred in the subsequent year.    
†The capital loss carryforward will be used to offset any capital gains realized by the fund in future years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains. 
 
The tax character of distributions paid to shareholders was as follows (dollars in thousands):
 
  Year ended February 28, 2009  Year ended February 29, 2008 
 
Share class
 Ordinary income  Long-term capital gains  Total distributions paid  Ordinary income  Long-term capital gains  Total distributions paid 
                   
Class A  -  $621,109  $621,109  $202,493  $949,313  $1,151,806 
Class B  -   39,384   39,384   3,095   63,326   66,421 
Class C  -   58,353   58,353   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  -   18,357   18,357   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  -   1,043   1,043   209   1,508   1,717 
Class 529-F-1  -   749   749   237   968   1,205 
Class R-1  -   1,617   1,617   118   2,486   2,604 
Class R-2  -   16,318   16,318   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  -  $938,078  $938,078  $272,105  $1,437,511  $1,709,616 
                         
                         
* Class F-2 was offered beginning August 1, 2008.                 
 
4. 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 waived a portion of its investment advisory services fee commencing on September 1, 2004, and terminating on December 31, 2008. During the year ended February 28, 2009, total investment advisory services fees waived by CRMC were $5,768,000. As a result, the fee shown on the accompanying financial statements of $65,646,000, which was equivalent to an annualized rate of 0.325%, was reduced to $59,878,000, or 0.296% 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 except Classes F-2 and R-5 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 February 28, 2009, 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 administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. The quarterly fee is based on a declining series of annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any  given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. 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 on the previous page for the year ended February 28, 2009, were as follows (dollars in thousands):

Share classDistribution servicesTransfer agent servicesAdministrative services
CRMC administrative servicesTransfer agent servicesCommonwealth of Virginia administrative services
Class A$30,955$21,548Not applicableNot applicableNot applicable
Class B 8,133 1,277Not applicableNot applicableNot applicable
Class C11,966
 
 
 
 
 
 
Included
in
administrative services
$1,797$310Not applicable
Class F-14,7111,965190Not applicable
Class F-2 * Not applicable 33 3Not applicable
Class 529-A 822 477 81$ 408
Class 529-B709 8327 71
Class 529-C 1,222 143 40 123
Class 529-E 116 27 523
Class 529-F-1 -19 3 16
Class R-1 347 32 19Not applicable
Class R-22,616525 1,255Not applicable
Class R-3 2,860848399Not applicable
Class R-4 899497 19Not applicable
Class R-5Not applicable7599Not applicable
Total$65,356$22,825$7,205$2,360$641
* Class F-2 was offered beginning August 1, 2008.

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 $(434,000), shown on the accompanying financial statements, includes $470,000 in current fees (either paid in cash or deferred) and a net decrease of $904,000 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.

5. 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 into three levels based on the method used to value the assets or liabilities. 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 February 28, 2009 (dollars in thousands):

  Investment securities 
Level 1 – Quoted prices $11,243,348 
Level 2 – Other significant observable inputs  1,824,092 
Level 3 – Significant unobservable inputs  - 
Total $13,067,440 
 
6. 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 (decrease) increase 
  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Shares 
Year ended February 28, 2009                      
Class A $2,031,710   140,956  $596,800   34,698  $(3,325,626)  (233,947) $(697,116)  (58,293)
Class B  56,893   4,006   38,002   2,299   (203,079)  (14,362)  (108,184)  (8,057)
Class C  184,522   13,664   55,790   3,401   (400,253)  (28,945)  (159,941)  (11,880)
Class F-1  503,663   35,048   83,010   4,851   (1,051,411)  (72,303)  (464,738)  (32,404)
Class F-2
  117,839   9,582   -   -   (14,721)  (1,245)  103,118   8,337 
Class 529-A  60,850   4,067   18,352   1,070   (43,463)  (3,017)  35,739   2,120 
Class 529-B  6,477   450   3,329   201   (7,032)  (509)  2,774   142 
Class 529-C  18,181   1,259   5,766   348   (18,794)  (1,352)  5,153   255 
Class 529-E  4,038   281   1,043   61   (2,761)  (192)  2,320   150 
Class 529-F-1  4,736   311   749   44   (3,407)  (237)  2,078   118 
Class R-1  10,855   723   1,609   96   (10,141)  (705)  2,323   114 
Class R-2  100,826   6,952   16,308   977   (107,330)  (7,410)  9,804   519 
Class R-3  144,480   9,603   27,641   1,627   (255,728)  (17,046)  (83,607)  (5,816)
Class R-4  130,418   8,744   16,066   938   (232,374)  (14,267)  (85,890)  (4,585)
Class R-5  415,141   26,109   35,408   2,051   (174,905)  (11,887)  275,644   16,273 
Total net increase                                
   (decrease) $3,790,629   261,755  $899,873   52,662  $(5,851,025)  (407,424) $(1,160,523)  (93,007)
                                 
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 F-2
  -   -   -   -   -   -   -   - 
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.                     

7. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $6,459,281,000 and $6,586,586,000, respectively, during the year ended February 28, 2009.

 
 
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:                                                   
 Year ended 2/28/2009 $18.41  $.16     $(7.43) $(7.27) $-  $(.70) $(.70) $10.44   (40.97)% $8,687   .74%     .71%     1.03%   
 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    
Class B:                                                                
 Year ended 2/28/2009  17.75   .04      (7.11)  (7.07)  -   (.70)  (.70)  9.98   (41.38)  499   1.50      1.48      .26    
 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)   
Class C:                                                                
 Year ended 2/28/2009  17.63   .03      (7.06)  (7.03)  -   (.70)  (.70)  9.90   (41.44)  736   1.52      1.49      .24    
 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)   
Class F-1:                                                                
 Year ended 2/28/2009  18.31   .16      (7.38)  (7.22)  -   (.70)  (.70)  10.39   (40.92)  1,077   .70      .67      1.06    
 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    
Class F-2:                                                                
 Period from 8/1/2008 to 2/28/2009  16.52   .10      (6.16)  (6.06)  -   -   -   10.46   (36.68)  87   .50    (5)  .48    (5)  1.50    (5)
Class 529-A:                                                                   
 Year ended 2/28/2009  18.36   .15      (7.40)  (7.25)  -   (.70)  (.70)  10.41   (40.97)  287   .79       .76       .98     
 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     
Class 529-B:                                                                   
 Year ended 2/28/2009  17.81   .02      (7.13)  (7.11)  -   (.70)  (.70)  10.00   (41.47)  48   1.60       1.57       .17     
 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   -    (6)  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)    
Class 529-C:                                                                    
 Year ended 2/28/2009  17.82   .03       (7.15)  (7.12)  -   (.70)  (.70)  10.00   (41.44)  83   1.59       1.57       .17     
 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   -    (6)  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)    
Class 529-E:                                                                    
 Year ended 2/28/2009  18.20   .10       (7.32)  (7.22)  -   (.70)  (.70)  10.28   (41.17)  17   1.09       1.06       .69     
 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)    
                                                                     
Class 529-F-1:                                                                    
 Year ended 2/28/2009 $18.36  $.18      $(7.41) $(7.23) $-  $(.70) $(.70) $10.43   (40.86%) $12   .59%      .56%      1.18%    
 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     
Class R-1:                        ��                                           
 Year ended 2/28/2009  17.95   .04       (7.20)  (7.16)  -   (.70)  (.70)  10.09   (41.36)  24   1.48       1.45       .29     
 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)    
Class R-2:                                                                    
 Year ended 2/28/2009  17.94   .03       (7.19)  (7.16)  -   (.70)  (.70)  10.08   (41.44)  238   1.59       1.57       .17     
 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)    
Class R-3:                                                                    
 Year ended 2/28/2009  18.21   .11       (7.33)  (7.22)  -   (.70)  (.70)  10.29   (41.15)  349   1.05       1.02       .70     
 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   -    (6)  .62   .62   -   (.13)  (.13)  17.86   3.54   421   1.08       1.07       .01     
Class R-4:                                                                    
 Year ended 2/28/2009  18.33   .16       (7.39)  (7.23)  -   (.70)  (.70)  10.40   (40.93)  252   .73       .70       1.04     
 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     
Class R-5:                                                                    
 Year ended 2/28/2009  18.45   .20       (7.45)  (7.25)  -   (.70)  (.70)  10.50   (40.77)  619   .43       .40       1.35     
 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 February 28 or 29 
  2009  2008  2007  2006  2005 
                
Portfolio turnover rate for all classes of shares  37%  29%  20%  20%  16%
 
(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 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) Annualized.
(6) Amount less than $.01.
 
See Notes to Financial Statements
 
 
 
Report of Independent Registered Public Accounting Firm
 
To the Shareholders and Board of Directors of AMCAP Fund, Inc.:

We have audited the accompanying statement of assets and liabilities, including the summary investment portfolio, of AMCAP Fund, Inc. (the “Fund”), as of February 28, 2009, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of February 28, 2009, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AMCAP Fund, Inc. as of February 28, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.


Deloitte & Touche LLP

Costa Mesa, California
April 7, 2009

 

Tax information       
                                                                                                                         unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended February 28, 2009:

Long-term capital gains $938,078,000 
Qualified dividend income  100%
Corporate dividends received deduction $187,105,000 
U.S. government income that may be exempt from state taxation $8,901,000 

Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2010, to determine the calendar year amounts to be included on their 2009 tax returns. Shareholders should consult their tax advisers.
 

 
Expense example
unaudited
 
As a shareholder of the fund, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008, through February 28, 2009).
 
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 be lower by the amount of these fees.
 
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
 
  Beginning account value 9/1/2008  Ending account value 2/28/2009  
Expenses paid during period*
  Annualized expense ratio 
             
Class A -- actual return $1,000.00  $615.93  $3.04   .76%
Class A -- assumed 5% return  1,000.00   1,020.97   3.80   .76 
Class B -- actual return  1,000.00   613.78   6.07   1.52 
Class B -- assumed 5% return  1,000.00   1,017.21   7.58   1.52 
Class C -- actual return  1,000.00   613.76   6.03   1.51 
Class C -- assumed 5% return  1,000.00   1,017.26   7.53   1.51 
Class F-1 -- actual return  1,000.00   616.25   2.76   .69 
Class F-1 -- assumed 5% return  1,000.00   1,021.31   3.45   .69 
Class F-2 -- actual return  1,000.00   617.11   1.92   .48 
Class F-2 -- assumed 5% return  1,000.00   1,022.35   2.40   .48 
Class 529-A -- actual return  1,000.00   615.98   3.16   .79 
Class 529-A -- assumed 5% return  1,000.00   1,020.82   3.95   .79 
Class 529-B -- actual return  1,000.00   613.50   6.42   1.61 
Class 529-B -- assumed 5% return  1,000.00   1,016.76   8.03   1.61 
Class 529-C -- actual return  1,000.00   613.73   6.38   1.60 
Class 529-C -- assumed 5% return  1,000.00   1,016.81   7.98   1.60 
Class 529-E -- actual return  1,000.00   614.84   4.35   1.09 
Class 529-E -- assumed 5% return  1,000.00   1,019.34   5.44   1.09 
Class 529-F-1 -- actual return  1,000.00   616.43   2.36   .59 
Class 529-F-1 -- assumed 5% return  1,000.00   1,021.81   2.95   .59 
Class R-1 -- actual return  1,000.00   613.98   5.95   1.49 
Class R-1 -- assumed 5% return  1,000.00   1,017.36   7.43   1.49 
Class R-2 -- actual return  1,000.00   613.51   6.46   1.62 
Class R-2 -- assumed 5% return  1,000.00   1,016.72   8.08   1.62 
Class R-3 -- actual return  1,000.00   615.06   4.19   1.05 
Class R-3 -- assumed 5% return  1,000.00   1,019.53   5.24   1.05 
Class R-4 -- actual return  1,000.00   616.12   2.88   .72 
Class R-4 -- assumed 5% return  1,000.00   1,021.17   3.60   .72 
Class R-5 -- actual return  1,000.00   616.92   1.68   .42 
Class R-5 -- assumed 5% return  1,000.00   1,022.65   2.10   .42 
 
*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 (181), and divided by 365 (to reflect the one-half year period).
 
 
Board of directors and other officers

“Independent” directors  
   
 Year first 
 elected 
 a director 
Name and age
of the fund1
Principal occupation(s) during past five years
   
Mary Anne Dolan, 621998Founder and President, M.A.D., Ink. (communications
Chairman of the Board company); former Editor-in-Chief, The Los Angeles
(Independent and Non-Executive) Herald Examiner
   
Martin Fenton, 731990Chairman of the Board, Senior Resource Group LLC (development and management of senior living communities)
   
William D. Jones, 532006Real estate developer/owner, President and CEO, CityLink Investment Corporation (acquires, develops and manages real estate ventures in selected urban communities) and City Scene Management Company (provides commercial asset and property management services)
   
Mary Myers Kauppila, 551998Chairman of the Board and CEO, Ladera Management Company (private investment company)
   
William H. Kling, 672006President and CEO, American Public Media Group
   
Bailey Morris-Eck, 641999Director and Programming Chair, WYPR Baltimore/Washington (public radio station); Senior Adviser, Financial News (London); Senior Fellow, Institute for International Economics; former Senior Associate and head of the Global Policy Initiative, Reuters Foundation
   
Kirk P. Pendleton, 691986Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment)
   
Olin C. Robison, Ph.D., 721998Fellow, The Oxford Centre for the Study of Christianity and Culture; Director, The Oxford Project on Religion and Public Policy; President Emeritus of the Salzburg Seminar; President Emeritus, Middlebury College
   
Steven B. Sample, Ph.D., 681999President, University of Southern California
   
   
“Independent” directors  
   
 Number of 
 portfolios 
 in fund 
 
complex2
 
 overseen by 
Name and agedirector
Other directorships3 held by director
   
Mary Anne Dolan, 625None
Chairman of the Board  
(Independent and Non-Executive)  
   
Martin Fenton, 7318None
   
William D. Jones, 535Sempra Energy; SouthWest Water Company
   
Mary Myers Kauppila, 556None
   
William H. Kling, 677Irwin Financial Corporation
   
Bailey Morris-Eck, 643None
   
Kirk P. Pendleton, 697None
   
Olin C. Robison, Ph.D., 723American Shared Hospital Services
   
Steven B. Sample, Ph.D., 682Intermec, Inc.


H. Frederick Christie, a director of the fund, retired from the board in December 2008. The directors thank Mr. Christie for his dedication and service to the fund.
 
Please see page 31 for footnotes.

“Interested” directors4
  
   
 Year first 
 elected a 
 director orPrincipal occupation(s) during past five years and
Name, age andofficer ofpositions held with affiliated entities or the principal
position with fundthe fund¹underwriter of the fund
   
R. Michael Shanahan, 701986Director and Chairman Emeritus, Capital Research
Vice Chairman of the Board 
and Management Company; Director, American Funds Distributors, Inc.;5 Chairman of the Executive Committee, The Capital Group Companies, Inc.;5 Chairman of the Board, Capital Management Services, Inc.;5 Director, Capital Strategy Research, Inc.5
   
Claudia P. Huntington, 571992–1994Senior Vice President — Capital Research Global
President1996
Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5
   
   
“Interested” directors4
  
   
 Number of 
 portfolios in 
 
fund complex2
 
Name, age andoverseen 
position with fundby director
Other directorships3 held by director
   
R. Michael Shanahan, 702None
Vice Chairman of the Board  
   
Claudia P. Huntington, 571None
President  
   
Chairman emeritus  
   
James D. Fullerton, 92 
Retired; former Chairman of the Board, The Capital Group Companies, Inc.5

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

 
1Directors and officers of the fund serve until their resignation, removal or retirement.
 
2Capital Research and Management Company manages the American Funds, consisting of 31 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which is composed of 16 funds and serves as the underlying investment vehicle for certain variable insurance contracts; American Funds Target Date Retirement Series,® Inc., which is composed of nine funds and is available through tax-deferred retirement plans and IRAs; and Endowments, which is composed of two portfolios and is available to certain nonprofit organizations.
 
3This includes all directorships (other than those in the American Funds or other funds managed by Capital Research and Management Company) that are held by each director as a director of a public company or a registered investment company.
 
4“Interested persons” within the meaning of the 1940 Act, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter).
 
5Company affiliated with Capital Research and Management Company.
 

 
Other officers6
  
   
 Year first 
 elected anPrincipal occupation(s) during past five years and
Name, age andofficer ofpositions held with affiliated entities or the principal
position with fundthe fund¹underwriter of the fund
   
Timothy D. Armour, 481996President and Director, Capital Research and
Senior Vice President 
Management Company; Senior Vice President —Capital Research Global Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5
   
Paul F. Roye, 552007Senior Vice President — Fund Business Management
Senior Vice President 
Group, Capital Research and Management Company; Director, American Funds Service Company;5 former Director of Investment Management, United States Securities and Exchange Commission
   
Barry S. Crosthwaite, 502006Senior Vice President — Capital Research Global
Vice President 
Investors, Capital Research Company5
   
Eric S. Richter, 482008Vice President — Capital Research Global Investors,
Vice President Capital Research and Management Company
   
C. Ross Sappenfield, 431999Senior Vice President — Capital Research Global
Vice President 
Investors, Capital Research Company5
   
James Terrile, 432006Senior Vice President — Capital Research Global
Vice President 
Investors, Capital Research Company5
   
Vincent P. Corti, 521998Vice President — Fund Business Management
Secretary Group, Capital Research and Management Company
   
Karl C. Grauman, 412006Vice President — Fund Business Management
Treasurer Group, Capital Research and Management Company
   
Courtney R. Taylor, 342007Assistant Vice President — Fund Business
Assistant Secretary Management Group, Capital Research and Management Company
   
Jeffrey P. Regal, 372003Vice President — Fund Business Management
Assistant Treasurer Group, Capital Research and Management Company

Please see page 31 for footnotes.


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

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

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

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

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

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

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

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

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

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

A complete February 28, 2009, 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. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at 800/SEC-0330. Additionally, the list of portfolio holdings is available on the American Funds website or by calling AFS.

This report is for the information of shareholders of AMCAP Fund, but it also may be used as sales literature when preceded or accompanied by the current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after June 30, 2009, 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 nearly 80 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 approach to 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 25 years of investment experience, providing a depth of knowledge and broad perspective that few organizations have.

 •A commitment to low management fees
 The American Funds provide exceptional value for shareholders, with management fees that are among the lowest in the mutual fund industry.
 
 
American Funds span a range of investment objectives

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

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

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

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

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

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

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

 
•American Funds Target Date Retirement Series®


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

 
Lit. No. MFGEAR-902-0409P
 
Litho in USA AGD/HN/8051-S16811
 
Printed on paper containing 10% post-consumer waste
 
Printed with inks containing soy and/or vegetable oil
 
 
ITEM 2 – Code of Ethics

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


ITEM 3 – Audit Committee Financial Expert

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


ITEM 4 – Principal Accountant Fees and Services

 Registrant:
  a)  Audit Fees:
   2008$72,000
   2009$74,000
    
  b)  Audit-Related Fees:
   2008$10,000
   2009$7,000
   The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants.
   
  c)  Tax Fees:
   2008$6,000
   2009$7,000
   The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns.
   
  d)  All Other Fees:
   2008None
   2009None
    
 Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below):
  a)  Audit Fees:
   Not Applicable
   
  b)  Audit-Related Fees:
   2008$1,060,000
   2009$1,024,000
   The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants.
   
  c)  Tax Fees:
   2008$3,000
   2009$6,000
   The tax fees consist of consulting services relating to the Registrant’s investments.
   
  d)  All Other Fees:
   2008None
   2009$2,000
   The other fees consist of subscription services related to an accounting research tool.

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

Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant, adviser and affiliates that provide ongoing services to the Registrant, were $1,405,000 for fiscal year 2008 and $1,390,000 for fiscal year 2009. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence.


ITEM 5 – Audit Committee of Listed Registrants

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


ITEM 6 – Schedule of Investments
 
[logo – American Funds®]
 

AMCAP Fund
Investment portfolio

February 28, 2009
 

Common stocks — 86.39% Shares  
Value
(000)
 
       
INFORMATION TECHNOLOGY — 24.34%      
Microsoft Corp.  22,435,500  $362,333 
Google Inc., Class A1
  844,800   285,534 
Yahoo! Inc.1
  21,395,000   283,056 
Oracle Corp.1
  15,921,659   247,423 
Cisco Systems, Inc.1
  14,004,300   204,043 
Corning Inc.  18,200,000   192,010 
SAP AG  5,786,600   187,509 
Apple Inc.1
  2,000,000   178,620 
Automatic Data Processing, Inc.  4,300,000   146,845 
Hewlett-Packard Co.  3,500,000   101,605 
Intel Corp.  7,972,000   101,563 
Global Payments Inc.  3,010,000   92,347 
Texas Instruments Inc.  5,750,000   82,512 
NVIDIA Corp.1
  8,400,000   69,552 
QUALCOMM Inc.  1,900,000   63,517 
EMC Corp.1
  5,400,000   56,700 
Maxim Integrated Products, Inc.  4,645,000   56,204 
KLA-Tencor Corp.  3,185,000   54,941 
Logitech International SA1
  6,293,200   53,870 
Trimble Navigation Ltd.1
  3,800,000   53,580 
eBay Inc.1
  4,550,000   49,459 
Xilinx, Inc.  2,500,000   44,200 
Paychex, Inc.  1,975,000   43,569 
Intersil Corp., Class A  4,091,908   41,369 
Linear Technology Corp.  1,500,000   32,700 
Applied Materials, Inc.  2,700,000   24,867 
Delta Electronics, Inc.  12,316,500   19,612 
Hon Hai Precision Industry Co., Ltd.  9,043,500   18,020 
Verifone Holdings, Inc.1
  4,000,000   17,360 
Cadence Design Systems, Inc.1
  796,400   3,345 
       3,168,265 
         
CONSUMER DISCRETIONARY — 15.30%        
Time Warner Inc.  29,914,000   228,244 
Best Buy Co., Inc.  6,900,000   198,858 
Lowe’s Companies, Inc.  11,499,700   182,155 
Omnicom Group Inc.  7,301,000   175,443 
O’Reilly Automotive, Inc.1
  5,184,800   172,965 
Target Corp.  6,095,600   172,566 
YUM! Brands, Inc.  5,976,000   157,049 
Johnson Controls, Inc.  9,586,000   109,089 
Carnival Corp., units  4,975,200   97,315 
Bed Bath & Beyond Inc.1
  4,500,000   95,850 
Williams-Sonoma, Inc.2
  6,174,900   53,907 
Scripps Networks Interactive, Inc., Class A  2,600,000   51,766 
Walt Disney Co.  3,000,000   50,310 
Tractor Supply Co.1
  1,525,000   47,641 
Comcast Corp., Class A, special nonvoting stock  3,750,000   45,563 
Kohl’s Corp.1
  1,250,000   43,925 
Harman International Industries, Inc.2
  3,320,000   35,258 
Harley-Davidson, Inc.  2,896,900   29,259 
Expedia, Inc.1
  3,000,000   23,910 
Timberland Co., Class A1
  905,000   10,181 
Life Time Fitness, Inc.1
  900,000   7,704 
Fossil, Inc.1
  197,000   2,486 
       1,991,444 
         
HEALTH CARE — 13.09%        
Medtronic, Inc.  8,180,000   242,046 
WellPoint, Inc.1
  6,530,806   221,525 
McKesson Corp.  3,850,000   157,927 
Schering-Plough Corp.  9,000,000   156,510 
Roche Holding AG  1,262,000   143,901 
UnitedHealth Group Inc.  6,500,000   127,725 
Medco Health Solutions, Inc.1
  2,000,000   81,160 
Hologic, Inc.1
  6,620,000   74,938 
Becton, Dickinson and Co.  1,200,000   74,268 
Abbott Laboratories  1,000,000   47,340 
Varian Medical Systems, Inc.1
  1,412,522   43,096 
Medicis Pharmaceutical Corp., Class A2
  3,625,000   40,890 
Beckman Coulter, Inc.  836,400   37,504 
ResMed Inc1
  903,000   33,303 
Cardinal Health, Inc.  1,000,000   32,450 
Allergan, Inc.  780,000   30,217 
Genentech, Inc.1
  328,107   28,070 
Johnson & Johnson  500,000   25,000 
Cochlear Ltd.  600,000   20,522 
Amgen Inc.1
  377,700   18,481 
Boston Scientific Corp.1
  2,547,890   17,886 
Inverness Medical Innovations, Inc.1
  692,000   15,549 
Integra LifeSciences Holdings Corp.1
  442,000   11,541 
Millipore Corp.1
  196,500   10,819 
Haemonetics Corp.1
  200,000   10,676 
       1,703,344 
         
INDUSTRIALS — 8.83%        
Precision Castparts Corp.  4,121,621   228,461 
United Parcel Service, Inc., Class B  3,200,000   131,776 
United Technologies Corp.  2,850,000   116,366 
Robert Half International Inc.  7,359,000   113,108 
General Electric Co.  12,900,000   109,779 
Manpower Inc.  3,506,000   97,747 
General Dynamics Corp.  2,115,000   92,679 
CSX Corp.  2,969,500   73,287 
Southwest Airlines Co.  7,385,000   43,498 
Rockwell Collins, Inc.  1,200,000   37,440 
MITIE Group PLC  13,753,000   34,893 
FedEx Corp.  790,000   34,136 
Avery Dennison Corp.  1,000,000   20,150 
Mine Safety Appliances Co.  881,050   16,079 
       1,149,399 
         
ENERGY — 7.95%        
Schlumberger Ltd.  5,740,000   218,464 
FMC Technologies, Inc.1
  4,620,000   122,384 
Hess Corp.  2,100,000   114,849 
Murphy Oil Corp.  1,850,000   77,348 
Chevron Corp.  1,100,000   66,781 
Baker Hughes Inc.  2,275,000   66,680 
Apache Corp.  1,100,000   64,999 
Newfield Exploration Co.1
  3,275,000   63,306 
EOG Resources, Inc.  1,262,900   63,196 
Smith International, Inc.  2,906,945   62,441 
Marathon Oil Corp.  2,240,000   52,125 
Devon Energy Corp.  800,000   34,936 
ConocoPhillips  725,000   27,079 
       1,034,588 
         
CONSUMER STAPLES — 5.95%        
PepsiCo, Inc.  4,577,481   220,360 
Walgreen Co.  8,291,600   197,837 
L’Oréal SA  1,450,000   94,506 
Avon Products, Inc.  4,957,883   87,209 
Philip Morris International Inc.  2,500,000   83,675 
Kraft Foods Inc., Class A  1,211,042   27,587 
Altria Group, Inc.  1,750,000   27,020 
Whole Foods Market, Inc.  1,500,000   18,225 
Bare Escentuals, Inc.1,2
  5,735,000   18,123 
       774,542 
         
FINANCIALS — 3.42%        
Capital One Financial Corp.  7,251,200   87,377 
State Street Corp.  2,823,000   71,337 
Arthur J. Gallagher & Co.  3,525,000   55,942 
American Express Co.  4,250,000   51,255 
M&T Bank Corp.  1,124,230   41,147 
JPMorgan Chase & Co.  1,700,000   38,845 
Citigroup Inc.  15,000,000   22,500 
Portfolio Recovery Associates, Inc.1,2
  975,391   22,005 
PNC Financial Services Group, Inc.  795,000   21,735 
Bank of New York Mellon Corp.  940,000   20,840 
Wells Fargo & Co.  1,000,000   12,100 
       445,083 
         
MATERIALS — 2.43%        
Barrick Gold Corp.  2,800,000   84,560 
Monsanto Co.  1,033,003   78,787 
AptarGroup, Inc.  2,100,000   58,926 
Vulcan Materials Co.  1,000,000   41,410 
Sealed Air Corp.  2,400,000   26,784 
Potash Corp. of Saskatchewan Inc.  300,000   25,191 
       315,658 
         
TELECOMMUNICATION SERVICES — 1.01%        
Telephone and Data Systems, Inc., Special Common Shares  2,000,900   55,025 
Telephone and Data Systems, Inc.  1,737,500   51,256 
United States Cellular Corp. 1
  734,300   25,260 
       131,541 
         
MISCELLANEOUS — 4.07%        
Other common stocks in initial period of acquisition      529,484 
         
         
Total common stocks (cost: $16,264,128,000)      11,243,348 
         
         
  Principal amount     
Short-term securities — 14.02%  (000)    
         
Freddie Mac 0.22%–1.30% due 3/23–9/15/2009 $756,000   754,900 
Fannie Mae 0.308%–0.85% due 5/19–7/22/2009  196,100   195,746 
Federal Home Loan Bank 0.24%–0.56% due 3/12–10/19/2009  159,089   158,794 
U.S. Treasury Bills 0.27%–0.34% due 4/9–9/15/2009  122,700   122,610 
General Electric Capital Corp. 0.27% due 3/2/2009  56,000   55,999 
General Electric Capital Corp., FDIC insured, 0.55% due 6/15/2009  30,000   29,955 
Procter & Gamble International Funding S.C.A. 0.45%–1.40% due 3/3–5/18/20093
  81,700   81,638 
International Bank for Reconstruction and Development due 0.25%–0.38% due 4/23–5/18/2009  67,300   67,234 
Park Avenue Receivables Co., LLC 0.45% due 3/3/20093
  50,053   50,051 
Ranger Funding Co. LLC 0.40% due 4/24/20093
  50,000   49,958 
Pfizer Inc due 1.20%–1.30% 3/13–3/18/20093
  46,840   46,835 
Coca-Cola Co. 0.25%–0.55% due 4/24–7/24/20093
  43,600   43,531 
Hewlett-Packard Co. 0.30% due 3/10/20093
  32,600   32,597 
Honeywell International Inc. 0.28% due 3/23/20093
  25,000   24,992 
Yale University 0.45% due 4/6/2009  25,000   24,988 
Brown-Forman Corp. 0.36% due 3/17/20093
  21,800   21,796 
Walt Disney Co. 0.30% due 4/7/2009  18,600   18,589 
Chevron Corp. 0.44% due 4/24/2009  18,500   18,486 
Merck & Co. Inc. 0.30% due 4/6/2009  15,400   15,393 
Private Export Funding Corp. 0.15% due 3/2/20093
  10,000   10,000 
         
         
Total short-term securities (cost: $1,824,484,000)      1,824,092 
         
Total investment securities (cost: $18,088,612,000)      13,067,440 
Other assets less liabilities      (52,933)
         
Net assets     $13,014,507 
 
“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.

1Security did not produce income during the last 12 months.
2Represents an affiliated company as defined under the Investment Company Act of 1940.
3Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration,  normally to qualified institutional buyers. The total value of all such securities was $361,398,000, which represented 2.78% 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-902-0409O-S15826
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO

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

We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of AMCAP Fund, Inc. (the “Fund”) as of February 28, 2009, and for the year then ended and have issued our report thereon dated April 7, 2009, which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR.  Our audit also included the Fund’s investment portfolio (the “Schedule”) as of February 28, 2009, appearing in Item 6 of this Form N-CSR.  This Schedule is the responsibility of the Fund’s management.  Our responsibility is to express an opinion based on our audit.  In our opinion, the Schedule referred to above, when considered in relation to the basic financial statements taken as a whole of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.



DELOITTE & TOUCHE LLP

Costa Mesa, California
April 7, 2009
 
 
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
 
 
ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies

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


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

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


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

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

 
 
 

 

ITEM 11 – Controls and Procedures

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


ITEM 12 – Exhibits

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


 
 

 

SIGNATURES

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

 AMCAP FUND, INC.
  
 
By /s/ Claudia P. Huntington
 
Claudia P. Huntington, President and
Principal Executive Officer
  
 Date: May 8, 2009



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


By /s/ Claudia P. Huntington
Claudia P. Huntington, President and
Principal Executive Officer
 
Date: May 8, 2009



By /s/ Karl C. Grauman
Karl C. Grauman, Treasurer and
Principal Financial Officer
 
Date: May 8, 2009