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Amcap Fund (CAFBX)

Filed: 29 Oct 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: August 31, 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

[photo of the trunk of a large tree - more trees in the background]
 
Semi-annual report for the six months ended August 31, 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 30 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, so they may lose value. For current information and month-end results, visit americanfunds.com.

Here are returns on a $1,000 investment with all distributions reinvested for periods ended September 30, 2009 (the most recent calendar quarter-end): 
          
Class A shares 1 year  5 years  10 years 
          
Reflecting 5.75% maximum sales charge         
          
Average annual total return     0.81%  2.75%
Cumulative total return  –4.42%  4.12%  31.10%

The total annual fund operating expense ratio was 0.81% for Class A shares for the 12 months ended September 30, 2009. Note that the expense ratio shown above differs from those shown in the Financial Highlights table on pages 22 to 28 and the Expense Example on pages 29 and 30, which are annualized for the six-month period ended August 31, 2009.
 
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. See the Financial Highlights table on pages 22 to 28 for details.

Results for other share classes can be found on page 31.

Equity investments are subject to market fluctuations. See the prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.

Fellow shareholders:
 
[photo of the trunk of a large tree - more trees in the background]
 
U.S. stocks rallied sharply during the past six months ended August 31, 2009, as the global financial crisis eased and signs of recovery emerged. Today the U.S. economy has improved but is far from vigorous. A number of fundamental issues in the economy and the markets have yet to be resolved.

AMCAP posted a total return of 46.0% for the six months ended August 31, exceeding the 40.5% total return of the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of mostly large U.S. stocks. AMCAP also outpaced the 45.0% total return of the Lipper Multi-Cap Core Funds Index and the 41.6% total return of the Lipper Growth Funds Index.

While we are pleased to report AMCAP’s strong returns, it is worth pointing out that the past six-month period began just before the market lows and ended close to the near-term market highs. In many ways, this period reflects a bounce back from the deep pessimism of the period leading up to the market’s low on March 9. Progress in the overall market from here will depend on how fast and how pervasively the signs of recovery turn into broad fundamental improvement.
 
Over the longer term, AMCAP continued to exceed the S&P 500 and the fund’s two Lipper peer-group indexes by a significant margin. For its 42-year lifetime, AMCAP provided an average annual return of 11.1%, outpacing the 9.2% of the S&P 500, the 9.0% of the Lipper Multi-Cap Core Funds Index and the 8.2% of the Lipper Growth Funds Index. The table below shows cumulative returns during selected periods. Note that the 10-year period encompasses two of the most severe declines in the postwar period.

Cumulative total returns            
             
For periods ended August 31, 2009 Six months  1 year  5 years  10 years 
             
AMCAP (Class A shares)  46.0%  –10.1%  8.9%  33.5%
Standard & Poor’s 500 Composite Index*  40.5   –18.2   2.5   –7.7 
Lipper Multi-Cap Core Funds Index
  45.0   –17.0   9.2   9.7 
Lipper Growth Funds Index
  41.6   –19.7   0.6   –17.5 
                 
*The S&P 500 is unmanaged, and its results do not reflect the effect of sales charges, commissions or expenses.     
Lipper indexes do not include the effect of sales charges.
                

Investment results analysis
The past six months ended August 31 was a very strong period for AMCAP. Many stocks bounced back from steep price losses in fiscal 2009 ended February 28, one of the most difficult periods in the fund’s history. Information technology is the fund’s largest industry sector, with 27.5% of the investment portfolio, followed by consumer discretionary stocks (16.3%), health care (11.9%), industrials (11.8%), financials (7.4%), energy (6.6%) and consumer staples (5.7%). AMCAP had 7.1% of its portfolio in cash and equivalents as of August 31.
 
Looking ahead
Signs of an economic recovery in the United States are clear, but uncertainties about the pace and strength of the upturn still exist. Unemployment remains high, and consumer spending has not yet returned to healthy levels. Personal and government debt levels remain high. Loan problems in commercial real estate continue, though there appears to be a recovery beginning in many residential real estate markets.

There is uncertainty about rising taxes and health care. Until these issues are resolved, small businesses may find it difficult to move forward with construction of new plants or make other major capital expenditures. Consumers may take some time to rebuild their balance sheets. Thus, this recovery may take longer than many previous recoveries and be more fragile than past upturns.

As the recovery continues, it is easy to get caught up in the minute-by-minute media coverage of fluctuating news and stock prices. But it is important to realize that underlying the sometimes volatile stock prices are real companies that provide real goods and services, with managements that are working hard, seeking long-term growth and fundamental strength. It’s good to remember that these are the types of companies we have in AMCAP.

At AMCAP, we are pleased to have a large and experienced team of analysts and portfolio counselors to carefully monitor economic conditions, industries and companies during this challenging time. As usual, we will continue to follow our long-term strategy of investing in quality growth companies at attractive prices.

We thank you for taking a long-term perspective on your mutual fund investments and for your continued support of AMCAP Fund.

Cordially,

/s/ Claudia P. Huntington

Claudia P. Huntington
Vice Chairman of the Board


/s/ Timothy D. Armour

Timothy D. Armour
President

October 13, 2009

For current information about the fund, visit americanfunds.com.
 
 
Summary investment portfolio, August 31, 2009
unaudited
 
The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.
 
[begin pie chart]
  Percent of 
Industry sector diversification net assets 
    
Information technology  27.51 
Consumer discretionary  16.27 
Health care  11.91 
Industrials  11.77 
Financials  7.40 
Other industries  18.03 
Short-term securities & other assets less liabilities  7.11 
[end pie chart]
 
 
        Percent 
     Value  of net 
Common stocks  - 92.89% Shares   (000) assets 
           
Information technology  - 27.51%          
Microsoft Corp.  20,295,000  $500,272   2.71%
Oracle Corp.  17,920,000   391,910   2.12 
Accenture Ltd, Class A  10,060,000   331,980   1.80 
Yahoo! Inc. (1)  21,395,000   312,581   1.69 
SAP AG (2)  5,163,300   252,375   1.37 
Cisco Systems, Inc. (1)  11,669,300   252,057   1.37 
Google Inc., Class A (1)  527,300   243,439   1.32 
Hewlett-Packard Co.  5,400,000   242,406   1.31 
Corning Inc.  15,260,000   230,121   1.25 
Apple Inc. (1)  1,250,000   210,262   1.14 
Automatic Data Processing, Inc.  4,100,000   157,235   .85 
MasterCard Inc., Class A  725,000   146,907   .80 
Intel Corp.  7,000,000   142,240   .77 
Logitech International SA (1)  7,581,556   138,591   .75 
Other securities      1,522,685   8.26 
       5,075,061   27.51 
             
Consumer discretionary  - 16.27%            
Omnicom Group Inc.  7,951,000   288,780   1.57 
Target Corp.  5,795,600   272,393   1.48 
Johnson Controls, Inc.  10,621,700   263,099   1.43 
Lowe's Companies, Inc.  10,999,700   236,494   1.28 
YUM! Brands, Inc.  5,976,000   204,678   1.11 
Best Buy Co., Inc.  5,400,000   195,912   1.06 
Time Warner Inc.  6,300,000   175,833   .95 
O'Reilly Automotive, Inc. (1)  3,819,800   146,222   .79 
Staples, Inc.  6,565,000   141,870   .77 
Carnival Corp., units  4,725,200   138,212   .75 
Other securities      937,158   5.08 
       3,000,651   16.27 
             
Health care  - 11.91%            
Medtronic, Inc.  10,030,000   384,149   2.08 
McKesson Corp.  4,600,000   261,556   1.42 
WellPoint, Inc. (1)  4,000,000   211,400   1.15 
Aetna Inc.  6,313,700   179,940   .97 
Hologic, Inc. (1)  9,370,000   154,137   .83 
Roche Holding AG (2)  865,000   137,798   .75 
Other securities      868,079   4.71 
       2,197,059   11.91 
             
Industrials  - 11.77%            
Precision Castparts Corp.  3,921,621   357,966   1.94 
General Dynamics Corp.  4,365,000   258,364   1.40 
Robert Half International Inc.  7,359,000   193,468   1.05 
Manpower Inc.  3,506,000   181,260   .98 
United Technologies Corp.  2,850,000   169,176   .92 
United Parcel Service, Inc., Class B  2,820,000   150,757   .82 
CSX Corp.  3,242,115   137,790   .75 
Union Pacific Corp.  2,303,300   137,760   .74 
Other securities      584,707   3.17 
       2,171,248   11.77 
             
Financials  - 7.40%            
Capital One Financial Corp.  7,251,200   270,397   1.47 
American Express Co.  7,500,000   253,650   1.37 
Bank of New York Mellon Corp.  7,136,000   211,297   1.15 
JPMorgan Chase & Co.  3,700,000   160,802   .87 
Other securities      467,932   2.54 
       1,364,078   7.40 
             
Energy  - 6.63%            
Schlumberger Ltd.  5,740,000   322,588   1.75 
FMC Technologies, Inc. (1)  3,420,000   163,134   .88 
Other securities      736,925   4.00 
       1,222,647   6.63 
             
Consumer staples  - 5.68%            
PepsiCo, Inc.  3,042,481   172,418   .93 
Walgreen Co.  4,700,000   159,236   .86 
L'Oréal SA (2)  1,450,000   143,079   .78 
Other securities      572,886   3.11 
       1,047,619   5.68 
             
Materials  - 2.02%            
Other securities      372,986   2.02 
             
             
Other - 0.56%            
Other securities      102,402   .56 
             
             
Miscellaneous  -  3.14%            
Other common stocks in initial period of acquisition      579,831   3.14 
             
             
Total common stocks (cost: $15,380,861,000)      17,133,582   92.89 
             
             
             
Convertible securities  - 0.00%            
             
Miscellaneous  -  0.00%            
Other convertible securities in initial period of acquisition      583   .00 
             
             
Total convertible securities (cost: $230,000)      583   .00 
             
             
             
  Principal amount         
Short-term securities  - 7.41%  (000)        
             
Freddie Mac 0.20%-0.70% due  9/14/2009-5/17/2010 $433,000   432,815   2.35 
U.S. Treasury Bills  0.161%-0.39% due 9/15/2009-2/4/2010  321,100   321,027   1.74 
Federal Home Loan Bank  0.145-0.56% due 9/2-11/25/2009  243,553   243,506   1.32 
Other securities      369,329   2.00 
             
             
Total short-term securities (cost: $1,366,560,000)      1,366,677   7.41 
             
             
Total investment securities (cost: $16,747,651,000)      18,500,842   100.30 
Other assets less liabilities      (56,068)  (.30)
             
Net assets     $18,444,774   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. Some of these securities (with aggregate value of $188,495,000, which represented 1.02% of the net assets of the fund) may be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers.
 
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 six months ended August 31, 2009, appear below.
 
  
Beginning
shares
  Additions  Reductions  
Ending
shares
   
Dividend
income
 (000)
   
Value of affiliates
at 8/31/09 (000)
 
Harman International Industries, Inc.  3,320,000   755,900   -   4,075,900  $-  $122,236 
Tractor Supply Co.1
  1,525,000   500,000   -   2,025,000   -   95,296 
Bare Escentuals, Inc.1
  5,735,000   -   -   5,735,000   -   53,221 
Portfolio Recovery Associates, Inc. 1
  975,391   17,609   -   993,000   -   43,613 
Medicis Pharmaceutical Corp., Class A3
  3,625,000   -   3,625,000   -   250   - 
Williams-Sonoma, Inc.3
  6,174,900   173,100   4,448,000   1,900,000   1,524   - 
                  $1,774  $314,366 
 
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.
 
(1) Security did not produce income during the last 12 months.
(2) Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in “Miscellaneous” and “Other securities,” was $779,800,000, which represented 4.23% of the net assets of the fund. This entire amount relates to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.
(3) Unaffiliated issuer at 8/31/2009.
 
See Notes to Financials Statements
 
 
 
Financial statements
 
Statement of assets and liabilities    unaudited 
at August 31, 2009  (dollars in thousands) 
       
Assets:      
 Investment securities, at value:      
  Unaffiliated issuers (cost: $16,336,489) $18,186,476    
  Affiliated issuers (cost: $411,162)  314,366  $18,500,842 
 Cash      121 
 Receivables for:        
  Sales of investments  13,520     
  Sales of fund's shares  22,039     
  Dividends and interest  25,860   61,419 
       18,562,382 
         
Liabilities:        
 Payables for:        
  Purchases of investments  62,124     
  Repurchases of fund's shares  32,918     
  Investment advisory services  5,080     
  Services provided by affiliates  13,665     
  Directors' deferred compensation  1,664     
  Other  2,157   117,608 
Net assets at August 31, 2009     $18,444,774 
         
Net assets consist of:        
 Capital paid in on shares of capital stock     $19,941,299 
 Undistributed net investment income      47,294 
 Accumulated net realized loss      (3,297,152)
 Net unrealized appreciation      1,753,333 
Net assets at August 31, 2009     $18,444,774 
 
 
(dollars and shares in thousands, except per-share amounts) 
Total authorized capital stock - 2,000,000 shares, $1.00 par value (1,231,646 total shares outstanding)       
  Net assets  Shares outstanding  Net asset value per share* 
Class A $12,237,741   812,457  $15.06 
Class B  654,916   45,224   14.48 
Class C  1,017,691   70,823   14.37 
Class F-1  1,376,491   91,757   15.00 
Class F-2  257,221   17,041   15.09 
Class 529-A  425,151   28,322   15.01 
Class 529-B  68,324   4,715   14.49 
Class 529-C  121,997   8,416   14.50 
Class 529-E  24,713   1,665   14.85 
Class 529-F-1  17,412   1,159   15.02 
Class R-1  35,818   2,452   14.61 
Class R-2  356,984   24,457   14.60 
Class R-3  507,865   34,120   14.88 
Class R-4  385,758   25,727   14.99 
Class R-5  652,182   43,128   15.12 
Class R-6  304,510   20,183   15.09 
  
(*) 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 $15.98 and $15.93, respectively. 
             
See Notes to Financial Statements            
 
 
Statement of operations    unaudited 
for the six months ended August 31, 2009  (dollars in thousands)
       
Investment income:      
 Income:      
  Dividends (net of non-U.S.      
            taxes of $2,607; also includes      
            $1,774 from affiliates) $120,350    
  Interest  2,439  $122,789 
         
 Fees and expenses*:        
  Investment advisory services  26,809     
  Distribution services  25,512     
  Transfer agent services  11,652     
  Administrative services  4,572     
  Reports to shareholders  968     
  Registration statement and prospectus  2,677     
  Directors' compensation  660     
  Auditing and legal  44     
  Custodian  116     
  State and local taxes  1     
  Other  642   73,653 
 Net investment income      49,136 
         
Net realized loss and unrealized appreciation        
 on investments and currency:        
 Net realized (loss) gain on:        
  Investments (including $105,659 net loss from affiliates)  (994,249)    
  Currency transactions  80   (994,169)
 Net unrealized appreciation on:        
  Investments  6,774,363     
  Currency translations  199   6,774,562 
   Net realized loss and unrealized appreciation        
    on investments and currency      5,780,393 
Net increase in net assets resulting        
 from operations     $5,829,529 
         
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.     
         
See Notes to Financial Statements        
         
         
         
Statements of changes in net assets   (dollars in thousands)
         
  Six months ended August 31, 2009*  
Year ended
February 28, 2009
 
Operations:        
 Net investment income $49,136  $188,389 
 Net realized loss on investments and currency transactions  (994,169)  (2,303,365)
 Net unrealized appreciation (depreciation) on investments and currency translations  6,774,562   (7,434,726)
  Net increase (decrease) in net assets resulting from operations  5,829,529   (9,549,702)
         
Dividends and distributions paid to shareholders:        
 Dividends from net investment income  (181,053)  - 
 Distributions from net realized gain on investments  -   (938,078)
  Total dividends and distributions paid to shareholders  (181,053)  (938,078)
         
         
Net capital share transactions  (218,209)  (1,160,523)
         
Total increase (decrease) in net assets  5,430,267   (11,648,303)
         
Net assets:        
 Beginning of period  13,014,507   24,662,810 
 End of period (including undistributed        
  net investment income: $47,294 and $179,211, respectively) $18,444,774  $13,014,507 
         
*Unaudited.
        
         
See Notes to Financial Statements        
 
 
Notes to financial statements                                                                                                    
       unaudited
 
1. Organization and significant accounting policies
 
Organization – AMCAP Fund, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks long-term growth of capital by investing primarily in U.S. companies with a record of above-average growth.

The fund has 16 share classes consisting of five retail share classes, five 529 college savings plan share classes and six 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 six retirement plan share classes (R-1, R-2, R-3, R-4, R-5 and R-6) 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-B*NoneDeclines 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,  R-5 and R-6NoneNone
None
 
*Effective April 21, 2009, Class B and 529-B shares of the fund are no longer available for purchase.

On May 1, 2009, the fund made an additional retirement plan share class (Class R-6) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”). Refer to the fund’s retirement plan 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:

Net asset value – The fund generally determines its net asset value as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

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 one or more independent pricing vendors when such prices are available. However, where the investment adviser deems it appropriate to do so, such securities will be valued in good faith at the mean quoted bid and asked prices that are reasonably and timely available (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Vendors base bond prices on, among other things, valuation matrices that incorporate dealer-supplied valuations, proprietary pricing models and evaluations of the yield curve as of approximately 3:00 p.m. New York time. 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 guidelines 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. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.

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

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

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

Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
 
2. 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 taking place around the world, 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 August 31, 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 different 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 components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of February 28, 2009, the components of distributable earnings on a tax basis 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)
     
* 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 the current year or in subsequent years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains. 

As of August 31, 2009, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

  (dollars in thousands) 
Gross unrealized appreciation on investment securities $3,073,026 
Gross unrealized depreciation on investment securities  (1,320,019)
Net unrealized appreciation on investment securities  1,753,007 
Cost of investment securities  16,747,835 

The tax character of distributions paid to shareholders was as follows (dollars in thousands):
 
  Six months August 31, 2009  Year ended February 28, 2009 
  Share class 
Ordinary
 income
  Long-term capital gains  Total distributions paid  
Ordinary
income
  Long-term capital gains  Total distributions paid 
                      
    Class A $132,921  $-  $132,921  $-  $621,109  $621,109 
    Class B  1,312   -   1,312   -   39,384   39,384 
    Class C  2,279   -   2,279   -   58,353   58,353 
    Class F-1  14,462   -   14,462   -   92,611   92,611 
    Class F-2*  2,791   -   2,791   -   -   - 
    Class 529-A  4,608   -   4,608   -   18,357   18,357 
    Class 529-B  204   -   204   -   3,329   3,329 
    Class 529-C  395   -   395   -   5,770   5,770 
    Class 529-E  205   -   205   -   1,043   1,043 
    Class 529-F-1  230   -   230   -   749   749 
    Class R-1  166   -   166   -   1,617   1,617 
    Class R-2  1,184   -   1,184   -   16,318   16,318 
    Class R-3  3,791   -   3,791   -   27,709   27,709 
    Class R-4  4,322   -   4,322   -   16,070   16,070 
    Class R-5  9,204   -   9,204   -   35,659   35,659 
    Class R-6
  2,979   -   2,979   -   -   - 
    Total $181,053  $-  $181,053  $-  $938,078  $938,078 
                         
                         
*Class F-2 was offered beginning August 1, 2008.                 
Class R-6 was offered beginning May 1, 2009.
                 

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. For the six months ended August 31, 2009, the investment advisory services fee was $26,809,000, which was equivalent to an annualized rate of 0.331% 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, R-5 and R-6. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted on the following page In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Classes A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of August 31, 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 as 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 and 0.05% for Class R-6) 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 six months ended August 31, 2009, were as follows (dollars in thousands):

Share classDistribution servicesTransfer agent servicesAdministrative services
CRMC administrative servicesTransfer agent servicesCommonwealth of Virginia administrative services
Class A$12,465$11,052Not applicableNot applicableNot applicable
Class B 2,985 600Not applicableNot applicableNot applicable
Class C 4,490
 
 
 
 
 
 
Included
in
administrative services
$675$157Not applicable
Class F-11,48279783Not applicable
Class F-2 Not applicable 113 6Not applicable
Class 529-A 386 267 49$184
Class 529-B 302 44 14 30
Class 529-C 527 77 22 53
Class 529-E 53 16 3 11
Class 529-F-1 - 11 2 8
Class R-1 15319 9Not applicable
Class R-2 1,153 231 579Not applicable
Class R-3 1,105 330 171Not applicable
Class R-4 411 236 9Not applicable
Class R-5Not applicable3203Not applicable
Class R-6*Not applicable43
-
Not applicable
Total$25,512$11,652$3,179$1,107$286
*Class R-6 was offered beginning May 1, 2009.
Amount less than one thousand.

Directors’ deferred compensation – Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $660,000, shown on the accompanying financial statements, includes $218,000 in current fees (either paid in cash or deferred) and a net increase of $442,000 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 classifies 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 August 31, 2009 (dollars in thousands):
 
Investment securities: Level 1  Level 2  Level 3  Total 
Common stocks:            
Information technology $4,757,568  $317,493* $-  $5,075,061 
Consumer discretionary  2,976,669   23,982*  -   3,000,651 
Health care  2,030,840   166,219*  -   2,197,059 
Industrials  2,102,469   68,779*  -   2,171,248 
Financials  1,364,078   -   -   1,364,078 
Energy  1,222,647   -   -   1,222,647 
Consumer staples  904,540   143,079*  -   1,047,619 
Materials  372,986   -   -   372,986 
Other  102,402   -   -   102,402 
Miscellaneous  519,583   60,248*  -   579,831 
Convertible securities  583   -   -   583 
Short-term securities  -   1,366,677   -   1,366,677 
Total $16,354,365  $2,146,477  $-  $18,500,842 
                 
                 
(*) Includes certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading; therefore, $779,800,000 of investment securities were classified as Level 2 instead of Level 1. 

6. Capital share transactions

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

Share class 
Sales(1)
  Reinvestments of dividends and distributions  
Repurchases(1)
  Net (decrease) increase 
  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Shares 
Six months August 31, 2009                        
Class A $793,170   60,669  $126,496   9,398  $(1,128,382)  (89,607) $(208,716)  (19,540)
Class B  15,294   1,255   1,266   98   (74,424)  (6,128)  (57,864)  (4,775)
Class C  61,482   4,901   2,165   169   (101,023)  (8,532)  (37,376)  (3,462)
Class F-1  151,368   11,457   12,582   939   (301,146)  (24,342)  (137,196)  (11,946)
Class F-2  139,930   10,304   1,996   148   (21,785)  (1,748)  120,141   8,704 
Class 529-A  26,296   2,019   4,608   343   (20,308)  (1,588)  10,596   774 
Class 529-B  1,408   119   204   16   (3,116)  (256)  (1,504)  (121)
Class 529-C  8,601   686   393   30   (7,606)  (617)  1,388   99 
Class 529-E  1,957   152   205   16   (1,436)  (115)  726   53 
Class 529-F-1  1,930   149   230   17   (1,744)  (133)  416   33 
Class R-1  5,387   424   165   13   (4,397)  (347)  1,155   90 
Class R-2  48,563   3,908   1,183   90   (39,355)  (3,194)  10,391   804 
Class R-3  58,262   4,571   3,784   284   (59,975)  (4,668)  2,071   187 
Class R-4  54,073   4,210   4,319   322   (38,201)  (3,025)  20,191   1,507 
Class R-5  105,455   8,042   9,194   681   (323,099)  (24,501)  (208,450)  (15,778)
Class R-62
  263,078   19,978   2,979   221   (235)  (16)  265,822   20,183 
Total net increase                                
   (decrease) $1,736,254   132,844  $171,769   12,785  $(2,126,232)  (168,817) $(218,209)  (23,188)
                                 
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-23
  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)
                                 
1Includes exchanges between share classes of the fund.
                     
2Class R-6 was offered beginning May 1, 2009.
                         
3Class 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 $2,594,423,000 and $2,480,117,000, respectively, during the six months ended August 31, 2009.

8. Subsequent events

As of October 13, 2009, the date the financial statements were available to be issued, no subsequent events or transactions had occurred that would have materially impacted the financial statements as presented.
 
 
Financial highlights(1)
 
      
Income (loss) from investment operations(2)
  Dividends and distributions                   
   Net asset value, beginning of period  Net investment income (loss)  Net gains (losses) on securities (both realized and unrealized)  Total from investment operations  Dividends (from net investment income)  Distributions (from capital gains)  Total dividends and distributions  Net asset value, end of period  
Total return(3)(4)
  Net assets, end of period (in millions)  
Ratio of expenses to average net assets before reimbursements/
waivers
  
Ratio of expenses to average net assets after reimbursements/
waivers(4)
  
Ratio of net income (loss) to average net assets(4)
 
                                         
Class A:
Six months ended 8/31/2009(5)
 $10.44  $.05  $4.73  $4.78  $(.16) $-  $(.16) $15.06   46.01% $12,238   .83%(6)  .83%(6)  .69%(6)
 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:
Six months ended 8/31/2009(5)
  9.98   -(7)  4.53   4.53   (.03)  -   (.03)  14.48   45.40   655   1.60(6)  1.60(6)  (.08)(6)
 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:
Six months ended 8/31/2009(5)
  9.90   -(7)  4.50   4.50   (.03)  -   (.03)  14.37   45.51   1,018   1.58(6)  1.58(6)  (.06)(6)
 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:
Six months ended 8/31/2009(5)
  10.39   .05   4.72   4.77   (.16)  -   (.16)  15.00   46.05   1,376   .77(6)  .77(6)  .75(6)
 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:
Six months ended 8/31/2009(5)
  10.46   .06   4.75   4.81   (.18)  -   (.18)  15.09   46.19   257   .55(6)  .55(6)  .92(6)
 Period from 8/1/2008 to 2/28/2009  16.52   .10   (6.16)  (6.06)  -   -   -   10.46   (36.68)  87   .50(6)  .48(6)  1.50(6)
                                                      
Class 529-A:
Six months ended 8/31/2009(5)
  10.41   .04   4.73   4.77   (.17)  -   (.17)  15.01   45.96   425   .88(6)  .88(6)  .64(6)
 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:
Six months ended 8/31/2009(5)
  10.00   (.01)  4.54   4.53   (.04)  -   (.04)  14.49   45.38   68   1.69(6)  1.69(6)  (.17)(6)
 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   -(7)  1.32   1.32   -   (.58)  (.58)  19.65   7.09   84   1.57   1.54   .01 
 Year ended 2/28/2006  17.58   (.05)  1.77   1.72   -   (.39)  (.39)  18.91   9.87   73   1.61   1.58   (.27)
 Year ended 2/28/2005  17.20   (.10)  .61   .51   -   (.13)  (.13)  17.58   2.94   56   1.66   1.65   (.59)
                                                      
Class 529-C:
Six months ended 8/31/2009(5)
  10.00   (.01)  4.56   4.55   (.05)  -   (.05)  14.50   45.38   122   1.68(6)  1.68(6)  (.16)(6)
 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   -(7)  1.32   1.32   -   (.58)  (.58)  19.67   7.08   136   1.56   1.53   .02 
 Year ended 2/28/2006  17.59   (.05)  1.78   1.73   -   (.39)  (.39)  18.93   9.92   110   1.59   1.56   (.25)
 Year ended 2/28/2005  17.21   (.10)  .61   .51   -   (.13)  (.13)  17.59   2.93   76   1.65   1.64   (.58)
                                                      
Class 529-E:
Six months ended 8/31/2009(5)
 $10.28  $.02  $4.68  $4.70  $(.13) $-  $(.13) $14.85   45.82% $25   1.17%(6)  1.17%(6)  .35%(6)
 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:
Six months ended 8/31/2009(5)
  10.43   .06   4.73   4.79   (.20)  -   (.20)  15.02   46.11   17   .67(6)  .67(6)  .85(6)
 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:
Six months ended 8/31/2009(5)
  10.09   -(7)  4.59   4.59   (.07)  -   (.07)  14.61   45.40   36  ��1.56(6)  1.56(6)  (.04)(6)
 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:
Six months ended 8/31/2009(5)
  10.08   (.01)  4.58   4.57   (.05)  -   (.05)  14.60   45.38   357   1.66(6)  1.66(6)  (.15)(6)
 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:
Six months ended 8/31/2009(5)
  10.29   .03   4.67   4.70   (.11)  -   (.11)  14.88   45.81   508   1.11(6)  1.11(6)  .41(6)
 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   -(7)  .62   .62   -   (.13)  (.13)  17.86   3.54   421   1.08   1.07   .01 
                                                      
Class R-4:
Six months ended 8/31/2009(5)
  10.40   .05   4.71   4.76   (.17)  -   (.17)  14.99   46.00   386   .79(6)  .79(6)  .73(6)
 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:
Six months ended 8/31/2009(5)
  10.50   .07   4.76   4.83   (.21)  -   (.21)  15.12   46.27   652   .48(6)  .48(6)  1.03(6)
 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 
                                                      
Class R-6:
Period from 5/1/2009 to 8/31/2009(5)
  13.04   .05   2.16   2.21   (.16)  -   (.16)  15.09   17.13   305   .15   .15   .37 
 
  
Six months ended
August 31,
  Year ended February 28 or 29 
  
2009(5)
  2009  2008  2007  2006  2005 
                   
Portfolio turnover rate for all classes of shares  17%  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 some of the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.
(5)Unaudited.
             
(6)Annualized.
             
(7)Amount less than $.01.
            
              
See Notes to Financial Statements            
 
 
 
Expense example
unaudited
 
As a shareholder of the fund, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (March 1, 2009, through August 31, 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.
 
Note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
 
  Beginning account value 3/1/2009  Ending account value 8/31/2009  
Expenses paid during period*
  Annualized expense ratio 
             
Class A -- actual return $1,000.00  $1,460.10  $5.15   .83%
Class A -- assumed 5% return  1,000.00   1,021.02   4.23   .83 
Class B -- actual return  1,000.00   1,454.02   9.90   1.60 
Class B -- assumed 5% return  1,000.00   1,017.14   8.13   1.60 
Class C -- actual return  1,000.00   1,455.12   9.78   1.58 
Class C -- assumed 5% return  1,000.00   1,017.24   8.03   1.58 
Class F-1 -- actual return  1,000.00   1,460.54   4.78   .77 
Class F-1 -- assumed 5% return  1,000.00   1,021.32   3.92   .77 
Class F-2 -- actual return  1,000.00   1,461.89   3.41   .55 
Class F-2 -- assumed 5% return  1,000.00   1,022.43   2.80   .55 
Class 529-A -- actual return  1,000.00   1,459.60   5.46   .88 
Class 529-A -- assumed 5% return  1,000.00   1,020.77   4.48   .88 
Class 529-B -- actual return  1,000.00   1,453.77   10.45   1.69 
Class 529-B -- assumed 5% return  1,000.00   1,016.69   8.59   1.69 
Class 529-C -- actual return  1,000.00   1,453.80   10.39   1.68 
Class 529-C -- assumed 5% return  1,000.00   1,016.74   8.54   1.68 
Class 529-E -- actual return  1,000.00   1,458.17   7.25   1.17 
Class 529-E -- assumed 5% return  1,000.00   1,019.31   5.96   1.17 
Class 529-F-1 -- actual return  1,000.00   1,461.09   4.16   .67 
Class 529-F-1 -- assumed 5% return  1,000.00   1,021.83   3.41   .67 
Class R-1 -- actual return  1,000.00   1,454.05   9.65   1.56 
Class R-1 -- assumed 5% return  1,000.00   1,017.34   7.93   1.56 
Class R-2 -- actual return  1,000.00   1,453.82   10.27   1.66 
Class R-2 -- assumed 5% return  1,000.00   1,016.84   8.44   1.66 
Class R-3 -- actual return  1,000.00   1,458.09   6.88   1.11 
Class R-3 -- assumed 5% return  1,000.00   1,019.61   5.65   1.11 
Class R-4 -- actual return  1,000.00   1,460.03   4.90   .79 
Class R-4 -- assumed 5% return  1,000.00   1,021.22   4.02   .79 
Class R-5 -- actual return  1,000.00   1,462.69   2.98   .48 
Class R-5 -- assumed 5% return  1,000.00   1,022.79   2.45   .48 
Class R-6 -- actual return
  1,000.00   1,171.30   1.67   .46 
Class R-6 -- assumed 5% return
  1,000.00   1,022.89   2.35   .46 
 
*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365  (to reflect the one-half year period).
† The period for the “annualized expense ratio” and “actual return” line is based on the number of days from May 1, 2009 (the initial sale of the share class), through August 31, 2009, and accordingly, is not representative of a full period. The “assumed 5% return” line is based on 184 days.
 
 
Other share class results
unaudited

Classes B, C, F and 529

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

Average annual total returns for periods ended       Life 
September 30, 2009 (the most recent calendar quarter-end): 1 year  5 years  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  –4.31%  0.88%  1.15%
Not reflecting CDSC  0.69   1.23   1.15 
             
Class C shares — first sold 3/15/01
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  –0.35   1.18   1.31 
Not reflecting CDSC  0.65   1.18   1.31 
             
Class F-1 shares2 — first sold 3/16/01
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  1.49   2.00   2.31 
             
Class F-2 shares2 — first sold 8/1/08
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  1.73      –3.50 
             
Class 529-A shares3 — first sold 2/15/02
            
Reflecting 5.75% maximum sales charge  –4.48   0.73   1.89 
Not reflecting maximum sales charge  1.36   1.93   2.68 
             
Class 529-B shares1,3 — first sold 2/19/02
            
Reflecting applicable CDSC, maximum of 5%, payable            
only if shares are sold within six years of purchase  –4.47   0.74   2.04 
Not reflecting CDSC  0.53   1.09   2.04 
             
Class 529-C shares3 — first sold 2/19/02
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  –0.44   1.10   2.06 
Not reflecting CDSC  0.56   1.10   2.06 
             
Class 529-E shares2,3 — first sold 3/7/02
  1.07   1.63   1.85 
             
Class 529-F-1 shares2,3 — first sold 9/17/02
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  1.59   2.10   5.72 

 
1These shares are no longer available for purchase.
 
2These shares are sold without any initial or contingent deferred sales charge.
 
3Results 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. See the Financial Highlights table on pages 22 to 28 for details.

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

 
Approval of Investment Advisory and Service Agreement

The fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through March 31, 2010. The board approved the agreement following the recommendation of the fund’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided and that approving the agreement was in the best interests of the fund and its shareholders.

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

1. Nature, extent and quality of services

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

2. Investment results

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

3. Advisory fees and total expenses

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

4. Ancillary benefits

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

5. Adviser financial information

The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, including personnel, systems and resources of investment, compliance, trading, accounting and other administrative operations. They considered CRMC’s costs and willingness to invest in technology, infrastructure and staff to maintain and expand services and capabilities, respond to industry and regulatory developments and attract and retain qualified personnel. They noted information previously received regarding the compensation structure for CRMC’s investment professionals. The board and the committee also compared CRMC’s profitability to the reported results of several large, publicly held investment management companies. The board and the committee noted the competitiveness and cyclicality of both the mutual fund industry and the capital markets, and the importance in that environment of CRMC’s long-term profitability for maintaining its independence, company culture and management continuity. They further considered the breakpoint discounts in the fund’s advisory fee structure and the impact of the termination of CRMC’s 10% advisory fee waiver effective December 31, 2008. The board and the committee concluded that the fund’s advisory fee structure reflected a reasonable sharing of benefits between CRMC and the fund’s shareholders.

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

6455 Irvine Center Drive
Irvine, CA 92618

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

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

P.O. Box 2280
Norfolk, VA 23501-2280
 
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070

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

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

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

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

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

A complete August 31, 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 by calling AFS.

This report is for the information of shareholders of AMCAP Fund, but it also may be used as sales literature when preceded or accompanied by the current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after December 31, 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 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
> 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
American Mutual Fund®
Capital World Growth and Income FundSM
Fundamental InvestorsSM
International Growth and Income FundSM
The Investment Company of America®
Washington Mutual Investors FundSM

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

Balanced fund
American Balanced Fund®

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

•  Tax-exempt bond funds
American Funds Short-Term Tax-Exempt Bond FundSM
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 fund
American Funds Money Market Fund SM

•  American Funds Target Date Retirement Series®
 

 
The Capital Group Companies

American Funds   Capital Research and Management   Capital International   Capital Guardian   Capital Bank and Trust

 
 
 
 
Lit. No. MFGESR-902-1009P
 
Litho in USA AGD/B/8078-S20691
 
Printed on paper containing 10% post-consumer waste
 
Printed with inks containing soy and/or vegetable oil
 
 
ITEM 2 – Code of Ethics

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


ITEM 3 – Audit Committee Financial Expert

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


ITEM 4 – Principal Accountant Fees and Services

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


ITEM 5 – Audit Committee of Listed Registrants

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


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

AMCAP Fund
Investment portfolio

August 31, 2009
unaudited
 
Common stocks — 92.89% Shares  
Value
(000)
 
       
INFORMATION TECHNOLOGY �� 27.51%      
Microsoft Corp.  20,295,000  $500,272 
Oracle Corp.  17,920,000   391,910 
Accenture Ltd, Class A  10,060,000   331,980 
Yahoo! Inc.1
  21,395,000   312,581 
SAP AG2
  5,163,300   252,375 
Cisco Systems, Inc.1
  11,669,300   252,057 
Google Inc., Class A1
  527,300   243,439 
Hewlett-Packard Co.  5,400,000   242,406 
Corning Inc.  15,260,000   230,121 
Apple Inc.1
  1,250,000   210,262 
Automatic Data Processing, Inc.  4,100,000   157,235 
MasterCard Inc., Class A  725,000   146,907 
Intel Corp.  7,000,000   142,240 
Logitech International SA1
  7,581,556   138,591 
Global Payments Inc.  3,105,400   131,793 
NVIDIA Corp.1
  7,400,000   107,448 
McAfee, Inc.1
  2,600,000   103,428 
eBay Inc.1
  4,550,000   100,737 
Intuit Inc.1
  3,600,000   99,972 
Trimble Navigation Ltd.1
  3,800,000   96,748 
QUALCOMM Inc.  1,900,000   88,198 
Maxim Integrated Products, Inc.  4,645,000   87,233 
Texas Instruments Inc.  3,460,000   85,081 
Autodesk, Inc.1
  3,460,000   81,068 
KLA-Tencor Corp.  2,185,000   68,172 
Xilinx, Inc.  2,800,000   62,272 
EMC Corp.1
  3,700,000   58,830 
Visa Inc., Class A  800,000   56,880 
Paychex, Inc.  1,975,000   55,873 
Intersil Corp., Class A  3,191,908   47,240 
Verifone Holdings, Inc.1
  4,000,000   46,160 
Linear Technology Corp.  1,500,000   39,855 
Applied Materials, Inc.  2,700,000   35,586 
Delta Electronics, Inc.2
  12,562,830   33,526 
HTC Corp.2
  3,150,000   31,592 
Cadence Design Systems, Inc.1
  796,400   4,993 
       5,075,061 
         
CONSUMER DISCRETIONARY — 16.27%        
Omnicom Group Inc.  7,951,000   288,780 
Target Corp.  5,795,600   272,393 
Johnson Controls, Inc.  10,621,700   263,099 
Lowe’s Companies, Inc.  10,999,700   236,494 
YUM! Brands, Inc.  5,976,000   204,678 
Best Buy Co., Inc.  5,400,000   195,912 
Time Warner Inc.  6,300,000   175,833 
O’Reilly Automotive, Inc.1
  3,819,800   146,222 
Staples, Inc.  6,565,000   141,870 
Carnival Corp., units  4,725,200   138,212 
Harman International Industries, Inc.3
  4,075,900   122,236 
Harley-Davidson, Inc.  4,181,900   100,282 
Bed Bath & Beyond Inc.1
  2,700,000   98,496 
Tractor Supply Co.1,3
  2,025,000   95,296 
Expedia, Inc.1
  3,600,000   82,980 
Scripps Networks Interactive, Inc., Class A  2,429,145   78,875 
Time Warner Cable Inc.1
  2,095,613   77,370 
Comcast Corp., Class A, special nonvoting shares  5,280,000   77,035 
News Corp., Class A  5,000,000   53,600 
Texas Roadhouse, Inc., Class A1
  4,195,000   42,747 
Williams-Sonoma, Inc.  1,900,000   36,347 
Rightmove PLC2
  2,750,000   23,982 
Life Time Fitness, Inc.1
  650,000   20,228 
P.F. Chang’s China Bistro, Inc.1
  500,000   15,955 
Timberland Co., Class A1
  905,000   11,729 
       3,000,651 
         
HEALTH CARE — 11.91%        
Medtronic, Inc.  10,030,000   384,149 
McKesson Corp.  4,600,000   261,556 
WellPoint, Inc.1
  4,000,000   211,400 
Aetna Inc.  6,313,700   179,940 
Hologic, Inc.1
  9,370,000   154,137 
Roche Holding AG2
  865,000   137,798 
UnitedHealth Group Inc.  4,495,284   125,868 
Medco Health Solutions, Inc.1
  2,000,000   110,440 
Schering-Plough Corp.  3,350,000   94,403 
Abbott Laboratories  1,850,000   83,675 
Becton, Dickinson and Co.  1,200,000   83,544 
Beckman Coulter, Inc.  901,500   61,050 
ResMed Inc1
  1,240,000   56,928 
Myriad Genetics, Inc.1
  1,500,000   45,855 
Allergan, Inc.  780,000   43,618 
Johnson & Johnson  500,000   30,220 
Boston Scientific Corp.1
  2,547,890   29,938 
Cochlear Ltd.2
  600,000   28,421 
Amgen Inc.1
  377,700   22,564 
Inverness Medical Innovations, Inc.1
  462,000   16,447 
Integra LifeSciences Holdings Corp.1
  442,000   14,935 
Millipore Corp.1
  196,500   13,014 
Haemonetics Corp.1
  136,000   7,159 
       2,197,059 
         
INDUSTRIALS — 11.77%        
Precision Castparts Corp.  3,921,621   357,966 
General Dynamics Corp.  4,365,000   258,364 
Robert Half International Inc.  7,359,000   193,468 
Manpower Inc.  3,506,000   181,260 
United Technologies Corp.  2,850,000   169,176 
United Parcel Service, Inc., Class B  2,820,000   150,757 
CSX Corp.  3,242,115   137,790 
Union Pacific Corp.  2,303,300   137,760 
General Electric Co.  9,104,300   126,550 
Burlington Northern Santa Fe Corp.  830,200   68,923 
MITIE Group PLC2
  16,331,000   68,779 
MSC Industrial Direct Co., Inc., Class A  1,660,000   65,587 
Southwest Airlines Co.  7,385,000   60,409 
Rockwell Collins, Inc.  1,200,000   55,248 
FedEx Corp.  790,000   54,281 
Cintas Corp.  1,180,000   32,379 
Avery Dennison Corp.  1,000,000   30,900 
Mine Safety Appliances Co.  810,000   21,651 
       2,171,248 
         
FINANCIALS — 7.40%        
Capital One Financial Corp.  7,251,200   270,397 
American Express Co.  7,500,000   253,650 
Bank of New York Mellon Corp.  7,136,000   211,297 
JPMorgan Chase & Co.  3,700,000   160,802 
State Street Corp.  2,352,200   123,444 
Wells Fargo & Co.  4,135,000   113,795 
Arthur J. Gallagher & Co.  3,525,000   83,789 
M&T Bank Corp.  1,124,230   69,432 
Portfolio Recovery Associates, Inc.1,3
  993,000   43,613 
PNC Financial Services Group, Inc.  795,000   33,859 
       1,364,078 
         
ENERGY — 6.63%        
Schlumberger Ltd.  5,740,000   322,588 
FMC Technologies, Inc.1
  3,420,000   163,134 
EOG Resources, Inc.  1,472,900   106,049 
Smith International, Inc.  3,750,000   103,387 
Apache Corp.  1,100,000   93,445 
Baker Hughes Inc.  2,275,000   78,374 
Chevron Corp.  1,100,000   76,934 
Hess Corp.  1,413,000   71,483 
Marathon Oil Corp.  2,240,000   69,149 
ConocoPhillips  1,363,000   61,376 
Murphy Oil Corp.  700,000   39,900 
Devon Energy Corp.  600,000   36,828 
       1,222,647 
         
CONSUMER STAPLES — 5.68%        
PepsiCo, Inc.  3,042,481   172,418 
Walgreen Co.  4,700,000   159,236 
L’Oréal SA2
  1,450,000   143,079 
Avon Products, Inc.  4,262,883   135,858 
CVS/Caremark Corp.  3,541,521   132,878 
Philip Morris International Inc.  2,500,000   114,275 
Wal-Mart Stores, Inc.  1,200,000   61,044 
Bare Escentuals, Inc.1,3
  5,735,000   53,221 
Whole Foods Market, Inc.1
  1,500,000   43,620 
Altria Group, Inc.  1,750,000   31,990 
       1,047,619 
         
MATERIALS — 2.02%        
Barrick Gold Corp.  2,800,000   97,160 
Monsanto Co.  1,056,003   88,578 
Vulcan Materials Co.  1,450,000   72,558 
AptarGroup, Inc.  2,100,000   72,198 
Potash Corp. of Saskatchewan Inc.  300,000   26,553 
AK Steel Holding Corp.  784,400   15,939 
       372,986 
         
TELECOMMUNICATION SERVICES — 0.56%        
Telephone and Data Systems, Inc., special common shares  1,883,600   47,712 
Telephone and Data Systems, Inc.  1,057,300   27,881 
United States Cellular Corp.1
  734,300   26,809 
       102,402 
         
MISCELLANEOUS — 3.14%        
Other common stocks in initial period of acquisition      579,831 
         
         
Total common stocks (cost: $15,380,861,000)      17,133,582 
         
         
         
Convertible securities — 0.00%        
         
MISCELLANEOUS — 0.00%        
Other convertible securities in initial period of acquisition      583 
         
         
Total convertible securities (cost: $230,000)      583 
         
         
         
  Principal amount     
Short-term securities — 7.41%  (000)    
         
Freddie Mac 0.20%–0.70% due 9/14/2009–5/17/2010 $433,000   432,815 
U.S. Treasury Bills 0.161%–0.39% due 9/15/2009–2/4/2010  321,100   321,027 
Federal Home Loan Bank 0.145%–0.56% due 9/2–11/25/2009  243,553   243,506 
Pfizer Inc 0.26%–0.35% due 9/10–12/8/20094
  66,300   66,267 
Fannie Mae 0.22% due 10/26/2009  49,100   49,088 
Merck & Co. Inc. 0.17% due 9/18/2009  35,000   34,997 
Eli Lilly and Co. 0.17% due 9/1/20094
  32,700   32,700 
General Electric Capital Corp. 0.20% due 10/9/2009  31,800   31,793 
Federal Farm Credit Banks 0.21% due 1/27/2010  25,000   24,973 
Abbott Laboratories 0.20% due 11/9/20094
  23,500   23,488 
NetJets Inc. 0.21% due 10/1/20094
  20,255   20,249 
Bank of America Corp. 0.20% due 9/1/2009  20,000   20,000 
Yale University 0.28% due 12/1/2009  20,000   19,983 
Coca-Cola Co. 0.25% due 9/2/20094
  18,500   18,500 
Procter & Gamble International Funding S.C.A. 0.22% due 11/3/20094
  16,100   16,092 
E.I. duPont de Nemours and Co. 0.15% due 9/29/20094
  11,200   11,199 
         
         
Total short-term securities (cost: $1,366,560,000)      1,366,677 
         
         
Total investment securities (cost: $16,747,651,000)      18,500,842 
Other assets less liabilities      (56,068)
         
Net assets     $18,444,774 


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

1Security did not produce income during the last 12 months.
2Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Miscellaneous," was $779,800,000, which represented 4.23% of the net assets of the fund. This entire amount relates to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.
3Represents an affiliated company as defined under the Investment Company Act of 1940.
4Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $188,495,000, which represented 1.02% 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-902-1009O-S21455
 
 
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

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


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

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


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

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


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

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


ITEM 11 – Controls and Procedures

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


ITEM 12 – Exhibits

(a)(1)Not applicable for filing of semi-annual reports to shareholders.
  
(a)(2)The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.


 
 

 

SIGNATURES

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

 AMCAP FUND, INC.
  
 
By /s/ Claudia P. Huntington
 
Claudia P. Huntington, Vice Chairman and
Principal Executive Officer
  
 Date: October 30, 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, Vice Chairman and
Principal Executive Officer
 
Date: October 30, 2009



By /s/ Karl C. Grauman
Karl C. Grauman, Treasurer and
Principal Financial Officer
 
Date: October 30, 2009