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Amcap Fund (CAFBX)

Filed: 28 Oct 10, 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
(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, 2010





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
 
 
 
 
 
 
 
AMCAP Fund
 
[close-up photo of leaves on a branch]
 
Semi-annual report for the six months ended August 31, 2010

 
AMCAP Fund® seeks long-term growth of capital by investing primarily in U.S. companies that have solid long-term growth records and the potential for good future 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 total returns on a $1,000 investment with all distributions reinvested for periods ended September 30, 2010 (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     0.40%  1.47%
Cumulative total return  2.73%  2.00%  15.75%

The total annual fund operating expense ratio was 0.78% for Class A shares as of the most recent fiscal year-end.
 
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable 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:
 
[close-up photo of leaves on a branch]
 
The U.S. stock market was very volatile over the six months ended August 31, 2010. The period had three positive months and three negative months. Continuing high unemployment; troubling local, state and federal deficits; a slow U.S. economic recovery and debt problems in Europe were major influences on market sentiment during this period.

In this market environment, AMCAP Fund posted a total return of –6.6%, compared with –4.0% for the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of mostly large U.S. stocks. The fund also lagged the Lipper Multi-Cap Core Funds Index and the Lipper Growth Funds Index for the six months, as shown below.

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 43-year lifetime, AMCAP provided an average annual return of 10.9%, outpacing the 9.1% return of the S&P 500, the 8.9% of the Lipper Multi-Cap Core Funds Index and the 8.1% of the Lipper Growth Funds Index. The table below shows cumulative returns over selected periods. It’s significant that the 10-year period includes two of the most severe declines in the postwar period.

Investment results analysis

Most major industry sectors were down for the past six months, including information technology, the fund’s largest holding. With the exception of Apple (+18.9%), the fund’s major technology holdings such as Microsoft, Google and Oracle suffered losses ranging from 11.2% to 18.1%. In contrast, these same stocks posted gains of 55.9% to 77.5% during the past fiscal year ended February 28, 2010.

[Begin Sidebar]
Cumulative total returns            
             
For periods ended August 31, 2010 Six months  1 year  5 years  10 years 
             
AMCAP (Class A shares)  –6.6%  2.7%  –2.2%  7.9%
Standard & Poor’s 500 Composite Index*  –4.0   4.9   –4.4   –16.7 
Lipper Multi-Cap Core Funds Index
  –3.6   6.1   –1.3   –6.5 
Lipper Growth Funds Index
  –4.5   5.7   –7.5   –32.0 
                 
*The S&P 500 is unmanaged, and its results do not reflect the effect of sales charges, commissions or expenses.    
Lipper indexes do not include the effect of sales charges.
                
[End Sidebar]

Telecommunications, materials, and cash equivalent holdings of 8.3% helped the fund during the past six months along with some contributions from small and mid-sized stocks in a variety of industries. At the end of the six months, AMCAP’s industry-sector mix included 26.8% in information technology, 13.3% in consumer discretionary, 12.7% in industrials, 11.4% in health care, 9.8% in financials, 6.5% in energy, 5.2% in consumer staples and 3.8% in materials.

Real gross domestic product increased 1.7% in the second quarter of 2010 after increasing 3.7% in the first quarter. The slower GDP growth primarily reflected a surge in imports compared with the previous quarter and a slowdown in inventory investment. These contributions to the slowdown in GDP growth were partly offset by an upturn in residential investment, acceleration in business investment, an upturn in state and local government spending, and a pickup in federal government spending.

Looking ahead

A bright spot in the economic and market outlook is the good financial position U.S. companies are in today. Over the past two years, a growing number have cut costs, repaired their balance sheets and built up cash which enables them to reinvest in their own businesses, pay dividends, buy back stock or purchase other companies. So far, most companies have been very cautious about hiring, though that may change as clarity improves in areas such as taxes, regulations, medical insurance and other cost issues.

In the meantime, AMCAP investment professionals are finding many attractively valued companies as a result of the market weakness and volatility. We feel that our long-term focus is a strategy that helps bring value to our shareholders.

We thank you for taking a long-term perspective on your mutual fund investments and for your 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, 2010

For current information about the fund, visit americanfunds.com.
 
 
Summary investment portfolio August 31, 2010
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]
Industry sector diversification 
Percent of net assets
 
    
Information technology  26.79%
Consumer discretionary  13.27 
Industrials  12.67 
Health care  11.42 
Financials  9.75 
Other industries  17.83 
Short-term securities & other assets less liabilities  8.27 
[end pie chart]
 
 
        Percent 
     Value  of net 
Common stocks  - 91.73% Shares   (000) assets 
           
Information technology  - 26.79%          
Microsoft Corp.  20,545,000  $482,397   2.67%
Google Inc., Class A (1)  962,100   432,964   2.40 
Oracle Corp.  18,420,000   403,030   2.23 
Accenture PLC, Class A  9,735,400   356,316   1.98 
Corning Inc.  20,060,000   314,541   1.74 
Yahoo! Inc. (1)  22,825,000   298,551   1.66 
Hewlett-Packard Co.  6,050,000   232,804   1.29 
Apple Inc. (1)  890,000   216,599   1.20 
Cisco Systems, Inc. (1)  9,169,300   183,844   1.02 
MasterCard Inc., Class A  875,000   173,565   .96 
Rovi Corp. (1)  3,675,000   159,899   .89 
QUALCOMM Inc.  4,100,000   157,071   .87 
Other securities      1,419,942   7.88 
       4,831,523   26.79 
             
Consumer discretionary  - 13.27%            
Johnson Controls, Inc.  9,400,000   249,382   1.38 
Best Buy Co., Inc.  6,400,000   200,896   1.11 
YUM! Brands, Inc.  4,726,000   197,074   1.09 
Staples, Inc.  10,430,000   185,341   1.03 
DIRECTV, Class A (1)  4,040,000   153,197   .85 
Target Corp.  2,650,000   135,574   .75 
Time Warner Inc.  4,433,333   132,911   .74 
Lowe's Companies, Inc.  6,317,000   128,235   .71 
Tractor Supply Co.  1,725,000   117,265   .65 
Other securities      894,333   4.96 
       2,394,208   13.27 
             
Industrials  - 12.67%            
Precision Castparts Corp.  3,764,000   426,009   2.36 
Union Pacific Corp.  3,822,300   278,799   1.55 
General Dynamics Corp.  4,365,000   243,873   1.35 
CSX Corp.  3,801,500   189,657   1.05 
United Technologies Corp.  2,850,000   185,848   1.03 
United Parcel Service, Inc., Class B  2,820,000   179,916   1.00 
Robert Half International Inc.  6,314,400   136,265   .76 
Other securities      645,164   3.57 
       2,285,531   12.67 
             
Health care  - 11.42%            
Medtronic, Inc.  9,710,000   305,671   1.70 
McKesson Corp.  3,850,000   223,492   1.24 
Hologic, Inc. (1)  (2)  14,374,100   203,968   1.13 
Amgen Inc. (1)  2,877,700   146,878   .81 
Endo Pharmaceuticals Holdings Inc. (1)  4,900,000   133,133   .74 
Beckman Coulter, Inc.  2,810,100   128,253   .71 
Other securities      918,898   5.09 
       2,060,293   11.42 
             
Financials  - 9.75%            
JPMorgan Chase & Co.  8,050,000   292,698   1.62 
Bank of New York Mellon Corp.  9,660,000   234,448   1.30 
State Street Corp.  5,842,200   204,944   1.14 
Wells Fargo & Co.  8,379,600   197,340   1.09 
Capital One Financial Corp.  4,750,000   179,835   1.00 
American Express Co.  3,500,000   139,545   .77 
Other securities      508,868   2.83 
       1,757,678   9.75 
             
Energy  - 6.51%            
Schlumberger Ltd.  5,866,940   312,884   1.73 
EOG Resources, Inc.  1,822,900   158,355   .88 
FMC Technologies, Inc. (1)  2,420,000   149,677   .83 
Other securities      554,087   3.07 
       1,175,003   6.51 
             
Consumer staples  - 5.24%            
PepsiCo, Inc.  3,042,481   195,266   1.08 
CVS/Caremark Corp.  6,250,000   168,750   .93 
Philip Morris International Inc.  2,500,000   128,600   .71 
Ralcorp Holdings, Inc. (1)  1,985,000   118,405   .66 
Other securities      334,528   1.86 
       945,549   5.24 
             
Materials  - 3.80%            
Monsanto Co.  4,097,900   215,754   1.20 
Other securities      470,155   2.60 
       685,909   3.80 
             
Telecommunication services - 0.88%            
Other securities      158,564   .88 
             
             
Miscellaneous - 1.40%            
Other common stocks in initial period of acquisition      251,592   1.40 
             
             
Total common stocks (cost: $14,780,378,000)      16,545,850   91.73 
             
             
             
          Percent 
      Value  of net 
Convertible securities  - 0.00% Shares   (000) assets 
             
Consumer discretionary  - 0.00%            
Johnson Controls, Inc. 11.50% convertible preferred 2012, units  4,600   621   .00 
             
             
Total convertible securities (cost: $230,000)      621   .00 
             
             
             
  Principal      Percent 
  amount  Value  of net 
Short-term securities  - 8.30%  (000)  (000) assets 
             
Freddie Mac 0.185%-0.44% due 9/1/2010-5/3/2011 $396,220   396,023   2.20 
Fannie Mae 0.15%-0.35% due 9/15/2010-1/18/2011  320,940   320,810   1.78 
Straight-A Funding LLC 0.23%-0.27% due 9/21-11/22/2010 (3)  289,802   289,654   1.61 
Jupiter Securitization Co., LLC 0.32%-0.45% due 9/10-9/17/2010 (3)  55,000   54,992   .30 
Other securities      435,522   2.41 
             
             
Total short-term securities (cost: $1,496,809,000)      1,497,001   8.30 
             
             
Total investment securities (cost: $16,277,417,000)      18,043,472   100.03 
Other assets less liabilities      (5,699)  (.03)
             
Net assets     $18,037,773   100.00%
 
"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
 
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio.
 
Investments in affiliates      
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund's affiliated-company holdings is either shown in the summary investment portfolio or included in the value of "Other securities" under the respective industry sectors. Further details on such holdings and related transactions during the six months ended August 31, 2010, appear below.
 
  
Beginning
shares
  Additions  Reductions  
Ending
 shares
  
Dividend
income
 (000)
  
Value of
affiliates at
 8/31/10
 (000)
 
Hologic, Inc.(1)  12,001,100   2,373,000   -   14,374,100  $-  $203,968 
MITIE Group PLC  14,578,000   4,500,000   -   19,078,000   1,098   57,114 
MITIE Group PLC (3)  2,578,000   -   -   2,578,000   157   7,718 
Harman International Industries, Inc.(1) (4)  4,051,200   -   2,151,200   1,900,000   -   - 
Portfolio Recovery Associates, Inc.(1) (4)  990,600   -   190,600   800,000   -   - 
Tractor Supply Co.(4)  2,025,000   -   300,000   1,725,000   850   - 
                  $2,105  $268,800 
 
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) Represents an affiliated company as defined under the Investment Company Act of 1940.
(3) Acquired in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $587,820,000, which represented 3.26% of the net assets of the fund.
(4) Unaffiliated issuer at 8/31/2010.
 
 
See Notes to Financial Statements
 
 
Financial statements
 
Statement of assets and liabilities    unaudited 
at August 31, 2010  (dollars in thousands) 
       
Assets:      
 Investment securities, at value:      
  Unaffiliated issuers (cost: $15,966,600) $17,774,672    
  Affiliated issuers (cost: $310,817)  268,800  $18,043,472 
 Cash      142 
 Receivables for:        
  Sales of investments  16,150     
  Sales of fund's shares  14,491     
  Dividends and interest  25,784   56,425 
       18,100,039 
Liabilities:        
 Payables for:        
  Purchases of investments  8,750     
  Repurchases of fund's shares  32,699     
  Investment advisory services  5,238     
  Services provided by affiliates  13,800     
  Trustees' deferred compensation  1,644     
  Other  135   62,266 
Net assets at August 31, 2010     $18,037,773 
         
Net assets consist of:        
 Capital paid in on shares of beneficial interest     $19,108,144 
 Undistributed net investment income      47,265 
 Accumulated net realized loss      (2,883,780)
 Net unrealized appreciation      1,766,144 
Net assets at August 31, 2010     $18,037,773 
 
 
  (dollars and shares in thousands, except per-share amounts) 
Shares of beneficial interest issued and outstanding (no stated par value) -
unlimited shares authorized (1,178,461 total shares outstanding)
 
  Net assets  
Shares
 outstanding
  
Net asset value
 per share
 
Class A $11,783,383   765,452  $15.39 
Class B  502,614   34,060   14.76 
Class C  955,213   65,246   14.64 
Class F-1  1,299,626   84,786   15.33 
Class F-2  432,049   28,019   15.42 
Class 529-A  459,898   29,990   15.33 
Class 529-B  59,537   4,036   14.75 
Class 529-C  126,745   8,587   14.76 
Class 529-E  26,124   1,723   15.16 
Class 529-F-1  19,604   1,277   15.35 
Class R-1  38,347   2,576   14.89 
Class R-2  343,899   23,126   14.87 
Class R-3  490,531   32,261   15.20 
Class R-4  367,071   23,957   15.32 
Class R-5  696,970   45,094   15.46 
Class R-6  436,162   28,271   15.43 
             
See Notes to Financial Statements            
 
 
Statement of operations    unaudited 
for the six months ended August 31, 2010  (dollars in thousands) 
       
Investment income:      
 Income:      
  Dividends (net of non-U.S. taxes of $2,380; also includes $2,105 from affiliates) $129,771    
  Interest  1,986  $131,757 
         
 Fees and expenses*:        
  Investment advisory services  32,519     
  Distribution services  30,296     
  Transfer agent services  11,097     
  Administrative services  5,323     
  Reports to shareholders  830     
  Registration statement and prospectus  395     
  Trustees' compensation  311     
  Auditing and legal  120     
  Custodian  89     
  State and local taxes  195     
  Other  545   81,720 
 Net investment income      50,037 
         
Net realized gain and unrealized depreciation on investments and currency:        
 Net realized gain (loss) on:        
  Investments (includes $46,283 net loss from affiliates)  199,333     
  Currency transactions  (214)  199,119 
 Net unrealized (depreciation) appreciation on:        
  Investments  (1,528,817)    
  Currency translations  89   (1,528,728)
   Net realized gain and unrealized depreciation on investments and currency      (1,329,609)
Net decrease in net assets resulting from operations     $(1,279,572)
         
(*) 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, 2010*  Year ended February 28, 2010 
Operations:        
 Net investment income $50,037  $86,250 
 Net realized gain (loss) on investments and currency transactions  199,119   (779,466)
 Net unrealized (depreciation) appreciation on investments and currency translations  (1,528,728)  8,316,101 
  Net (decrease) increase in net assets resulting from operations  (1,279,572)  7,622,885 
         
Dividends paid to shareholders from net investment income  (87,370)  (181,054)
         
Net capital share transactions  (242,889)  (808,734)
         
Total (decrease) increase in net assets  (1,609,831)  6,633,097 
         
Net assets:        
 Beginning of period  19,647,604   13,014,507 
 End of period (including undistributed net investment income: $47,265 and $84,598, respectively) $18,037,773  $19,647,604 
         
*Unaudited.
        
         
See Notes to Financial Statements        
 
 
 
Notes to financial statements                                                                                                       
   unaudited

1.  Organization

AMCAP Fund (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 that have solid long-term growth records and the potential for good future growth. Effective May 1, 2010, the fund reorganized from a Maryland corporation to a Delaware statutory trust in accordance with a proposal approved by shareholders on November 24, 2009.
 
 
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
 
*Class B and 529-B shares of the fund are not available for purchase.

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.

2.  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 fund follows the significant accounting policies described below, as well as the valuation policies described in the next section on valuation.

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.

3.  Valuation

The fund’s investments are reported at fair value as defined by accounting principles generally accepted in the United States of America. 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.

Methods and inputs – The fund uses the following methods and inputs to establish the fair value of its assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

Equity securities are generally 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 generally valued at prices obtained as of approximately 3:00 p.m. New York time from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.

Fixed-income classExamples of standard inputs
AllBenchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”)
Corporate bonds & notes; convertible securitiesStandard inputs and underlying equity of the issuer
Bonds & notes of governments & government agenciesStandard inputs and interest rate volatilities

Where the investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income 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.

Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally 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 fair 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.

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 trustees. Market quotations may be considered unreliable if events occur that materially affect the value of securities (particularly equity securities trading 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 inputs may be reviewed in order to make a good faith determination of a security’s fair value. These inputs include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant f inancial 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.

Classifications - The fund classifies its assets and liabilities into three levels based on the inputs 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 inves tment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The table on the following page presents the fund’s valuation levels as of August 31, 2010 (dollars in thousands):
 
Investment securities: Level 1  Level 2  Level 3  Total 
Common stocks:            
 Information technology $4,831,523  $-  $-  $4,831,523 
 Consumer discretionary  2,394,208   -   -   2,394,208 
 Industrials  2,285,531   -   -   2,285,531 
 Health care  2,060,293   -   -   2,060,293 
 Financials  1,757,678   -   -   1,757,678 
 Energy  1,175,003   -   -   1,175,003 
 Consumer staples  945,549   -   -   945,549 
 Materials  685,909   -   -   685,909 
 Telecommunication services  158,564   -   -   158,564 
 Miscellaneous  251,592   -   -   251,592 
Convertible securities  -   621   -   621 
Short-term securities  -   1,497,001   -   1,497,001 
Total $16,545,850  $1,497,622  $-  $18,043,472 

4.  Risk factors

Investing in the fund may involve certain risks including, but not limited to, those described below.

Market risks – The prices of the common stocks and other securities held by the fund may decline in response to certain events taking place around the world, including those directly involving the issuers whose securities are owned by the fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions; and currency, interest rate and commodity price fluctuations.

Growth stock risks – The growth-oriented common stocks and other equity-type securities, such as preferred stocks, convertible preferred stocks and convertible bonds, generally purchased by the fund may involve large price swings and potential for loss.

5.  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, 2010, 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 2006 and by state tax authorities for tax years before 2005.

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; 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, 2010, the components of distributable earnings on a tax basis were as follows:

   (dollars in thousands) 
Undistributed ordinary income    $86,101 
Capital loss carryforwards*:       
     Expiring 2017 $(860,717)    
     Expiring 2018  (2,221,999)  (3,082,716)
         
*The capital loss carryforwards will be used to offset any capital gains realized by the fund in the current year or in subsequent years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.


As of August 31, 2010, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

  (dollars in thousands) 
Gross unrealized appreciation on investment securities $2,903,562 
Gross unrealized depreciation on investment securities  (1,137,695)
Net unrealized appreciation on investment securities  1,765,867 
Cost of investment securities  16,277,605 

Ordinary income distributions paid to shareholders from net investment income were as follows (dollars in thousands):
 
Share class Six months ended August 31, 2010  
Year ended
February 28, 2010
 
Class A $62,209  $132,922 
Class B  -   1,312 
Class C  -   2,279 
Class F-1  7,464   14,462 
Class F-2  3,113   2,791 
Class 529-A  2,323   4,608 
Class 529-B  -   204 
Class 529-C  -   395 
Class 529-E  62   205 
Class 529-F-1  133   230 
Class R-1  -   166 
Class R-2  -   1,184 
Class R-3  1,122   3,791 
Class R-4  1,912   4,322 
Class R-5  5,751   9,204 
Class R-6(*)
  3,281   2,979 
Total $87,370  $181,054 
         
         
(*)Class R-6 was offered beginning May 1, 2009.
     

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

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a series of decreasing 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, 2010, the investment advisory services fee was $32,519,000, which was equivalent to an annualized rate of 0.325% 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 trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted below. In some cases, the board of trustees 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 comp ensate 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 trustees 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, 2010, 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 for all share classes, except Classes A and B, to provide certain services, including transfer agent and recordkeeping services; coordinating, monitoring, assisting and overseeing third-party service providers; and educating advisers and shareholders about the impact of market-related events, tax laws affecting investments, retirement plan restrictions, exchange limitations and other related matters. 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 servi ces. 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 series of decreasing 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 Commonw ealth of Virginia is not considered a related party.

Expenses under the agreements described above for the six months ended August 31, 2010, were as follows (dollars in thousands):
 
        Administrative services 
 
Share class
  
Distribution services
   
Transfer
 agent
 services
  CRMC administrative services  Transfer agent services  Commonwealth of Virginia administrative services 
Class A $15,046  $10,611  Not applicable  Not applicable  Not applicable 
Class B  2,973   486  Not applicable  Not applicable  Not applicable 
Class C  5,363  
Included
in
administrative services
 
  $806  $143  Not applicable 
Class F-1  1,795       893   71  Not applicable 
Class F-2 
Not applicable
     288   16  Not applicable 
Class 529-A  524       276   48  $248 
Class 529-B  345       38   13   35 
Class 529-C  689       77   22   69 
Class 529-E  70       16   3   14 
Class 529-F-1  -       12   2   11 
Class R-1  205       27   8  Not applicable 
Class R-2  1,444       290   537  Not applicable 
Class R-3  1,351       402   170  Not applicable 
Class R-4  491       292   9  Not applicable 
Class R-5 
Not applicable
     376   4  Not applicable 
Class R-6 
Not applicable
     106   1  Not applicable 
Total $30,296  $11,097  $3,899  $1,047  $377 
 
Trustees’ deferred compensation – Since the adoption of the deferred compensation plan in 1993, trustees 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. Trustees’ compensation of $311,000, shown on the accompanying financial statements, includes $260,000 in current fees (either paid in cash or deferred) and a net increase of $51,000 in the value o f the deferred amounts.

Affiliated officers and trustees – Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the fund.
 
7.  Capital share transactions
 
Capital share transactions in the fund were as follows (dollars and shares in thousands):
 
Share class 
Sales(*)
  
Reinvestments of dividends
and distributions
  
Repurchases(*)
  
Net (decrease)
increase
 
  Amount  Shares  Amount  Shares  Amount  Shares  Amount  Shares 
Six months ended August 31, 2010                        
Class A $903,647   53,397  $59,720   3,604  $(1,259,635)  (75,547) $(296,268)  (18,546)
Class B  12,703   777   -   -   (106,466)  (6,595)  (93,763)  (5,818)
Class C  76,050   4,721   -   -   (113,972)  (7,195)  (37,922)  (2,474)
Class F-1  232,094   13,850   6,742   409   (261,378)  (15,701)  (22,542)  (1,442)
Class F-2  139,101   8,310   2,814   169   (43,197)  (2,564)  98,718   5,915 
Class 529-A  42,382   2,526   2,323   141   (23,973)  (1,451)  20,732   1,216 
Class 529-B  949   59   -   -   (9,074)  (562)  (8,125)  (503)
Class 529-C  11,348   702   -   -   (9,095)  (572)  2,253   130 
Class 529-E  2,232   135   62   4   (1,405)  (85)  889   54 
Class 529-F-1  2,645   159   133   8   (1,249)  (76)  1,529   91 
Class R-1  7,348   452   -   -   (5,974)  (368)  1,374   84 
Class R-2  49,357   3,027   -   -   (61,991)  (3,861)  (12,634)  (834)
Class R-3  72,046   4,345   1,121   68   (87,040)  (5,275)  (13,873)  (862)
Class R-4  55,888   3,356   1,910   116   (40,570)  (2,440)  17,228   1,032 
Class R-5  76,386   4,460   5,716   344   (71,994)  (4,282)  10,108   522 
Class R-6  91,913   5,546   3,281   198   (5,787)  (345)  89,407   5,399 
Total net increase                                
   (decrease) $1,776,089   105,822  $83,822   5,061  $(2,102,800)  (126,919) $(242,889)  (16,036)
                                 
Year ended February 28, 2010                                
Class A $1,507,879   104,997  $126,497   9,398  $(2,299,485)  (162,394) $(665,109)  (47,999)
Class B  23,505   1,788   1,265   98   (165,417)  (12,007)  (140,647)  (10,121)
Class C  121,330   8,798   2,165   168   (208,216)  (15,531)  (84,721)  (6,565)
Class F-1  281,641   19,567   12,582   939   (519,481)  (37,981)  (225,258)  (17,475)
Class F-2  263,691   18,036   1,996   148   (64,898)  (4,417)  200,789   13,767 
Class 529-A  59,495   4,080   4,608   343   (46,183)  (3,197)  17,920   1,226 
Class 529-B  2,201   171   204   15   (6,636)  (483)  (4,231)  (297)
Class 529-C  18,923   1,351   393   30   (17,272)  (1,241)  2,044   140 
Class 529-E  3,986   280   205   15   (3,393)  (238)  798   57 
Class 529-F-1  4,223   291   230   17   (3,598)  (248)  855   60 
Class R-1  12,124   854   165   13   (10,497)  (737)  1,792   130 
Class R-2  91,844   6,686   1,183   91   (90,288)  (6,470)  2,739   307 
Class R-3  124,096   8,706   3,784   284   (141,784)  (9,800)  (13,904)  (810)
Class R-4  133,309   9,217   4,319   323   (163,311)  (10,835)  (25,683)  (1,295)
Class R-5  196,892   13,697   9,194   681   (391,376)  (28,712)  (185,290)  (14,334)
Class R-6(†)
  327,153   23,905   2,979   221   (20,960)  (1,254)  309,172   22,872 
Total net increase                                
   (decrease) $3,172,292   222,424  $171,769   12,784  $(4,152,795)  (295,545) $(808,734)  (60,337)
                                 
                                 
(*) Includes exchanges between share classes of the fund.
                     
(†)Class R-6 was offered beginning May 1, 2009.
                     

 
8.  Investment transactions
  
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $2,712,305,000 and $2,890,419,000, respectively, during the six months ended August 31, 2010.


 
Financial highlights(1)
 
      
(Loss) income from investment operations(2)
  Dividends and distributions                   
   Net asset value, beginning of period  Net investment income (loss)  Net (losses) gains on securities (both realized and unrealized)  Total from investment operations  Dividends (from net investment income)  Distributions (from capital gains)  Total dividends and distributions  Net asset value, end of period  
Total
return(3)(4)
  Net assets, end of period (in millions)  
Ratio of expenses to average net assets before reimbursements/
waivers
  
Ratio of expenses to average net assets after reimbursements/
waivers(4)
  
Ratio of net income (loss) to average net assets(4)
 
                                         
Class A:
Six months ended 8/31/2010(5)
 $16.55  $.05  $(1.13) $(1.08) $(.08) $-  $(.08) $15.39   (6.56)% $11,783   .74%(6)  .74%(6)  .58%(6)
 Year ended 2/28/2010  10.44   .08   6.19   6.27   (.16)  -   (.16)  16.55   60.46   12,973   .78   .78   .57 
 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 
                                                      
Class B:
Six months ended 8/31/2010(5)
  15.85   (.02)  (1.07)  (1.09)  -   -   -   14.76   (6.88)  503   1.51(6)  1.51(6)  (.20)(6)
 Year ended 2/28/2010  9.98   (.03)  5.93   5.90   (.03)  -   (.03)  15.85   59.16   632   1.55   1.55   (.20)
 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)
                                                      
Class C:
Six months ended 8/31/2010(5)
  15.72   (.02)  (1.06)  (1.08)  -   -   -   14.64   (6.87)  955   1.53(6)  1.53(6)  (.21)(6)
 Year ended 2/28/2010  9.90   (.03)  5.88   5.85   (.03)  -   (.03)  15.72   59.18   1,065   1.56   1.56   (.21)
 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)
                                                      
Class F-1:
Six months ended 8/31/2010(5)
  16.48   .05   (1.11)  (1.06)  (.09)  -   (.09)  15.33   (6.50)  1,300   .73(6)  .73(6)  .59(6)
 Year ended 2/28/2010  10.39   .09   6.16   6.25   (.16)  -   (.16)  16.48   60.46   1,421   .74   .74   .61 
 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 
                                                      
Class F-2:
Six months ended 8/31/2010(5)
  16.60   .07   (1.12)  (1.05)  (.13)  -   (.13)  15.42   (6.39)  432   .49(6)  .49(6)  .83(6)
 Year ended 2/28/2010  10.46   .12   6.20   6.32   (.18)  -   (.18)  16.60   60.82   367   .52   .52   .79 
 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 8/31/2010(5)
  16.49   .04   (1.12)  (1.08)  (.08)  -   (.08)  15.33   (6.59)  460   .79(6)  .79(6)  .53(6)
 Year ended 2/28/2010  10.41   .08   6.17   6.25   (.17)  -   (.17)  16.49   60.35   474   .83   .83   .51 
 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 
                                                      
Class 529-B:
Six months ended 8/31/2010(5)
  15.85   (.02)  (1.08)  (1.10)  -   -   -   14.75   (6.94)  60   1.60(6)  1.60(6)  (.28)(6)
 Year ended 2/28/2010  10.00   (.04)  5.93   5.89   (.04)  -   (.04)  15.85   59.02   72   1.64   1.64   (.29)
 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)
                                                      
Class 529-C:
Six months ended 8/31/2010(5)
  15.86   (.02)  (1.08)  (1.10)  -   -   -   14.76   (6.94)  127   1.59(6)  1.59(6)  (.27)(6)
 Year ended 2/28/2010  10.00   (.04)  5.95   5.91   (.05)  -   (.05)  15.86   59.02   134   1.63   1.63   (.28)
 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)
                                                      
Class 529-E:
Six months ended 8/31/2010(5)
 $16.28  $.02  $(1.10) $(1.08) $(.04) $-  $(.04) $15.16   (6.67)% $26   1.08%(6)  1.08%(6)  .24%(6)
 Year ended 2/28/2010  10.28   .03   6.10   6.13   (.13)  -   (.13)  16.28   59.86   27   1.13   1.13   .22 
 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 
                                                      
Class 529-F-1:
Six months ended 8/31/2010(5)
  16.52   .06   (1.12)  (1.06)  (.11)  -   (.11)  15.35   (6.48)  20   .58(6)  .58(6)  .74(6)
 Year ended 2/28/2010  10.43   .11   6.18   6.29   (.20)  -   (.20)  16.52   60.70   20   .63   .63   .72 
 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 
                                                      
Class R-1:
Six months ended 8/31/2010(5)
  15.99   (.02)  (1.08)  (1.10)  -   -   -   14.89   (6.88)  38   1.51(6)  1.51(6)  (.19)(6)
 Year ended 2/28/2010  10.09   (.03)  6.00   5.97   (.07)  -   (.07)  15.99   59.14   40   1.53   1.53   (.19)
 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)
                                                      
Class R-2:
Six months ended 8/31/2010(5)
  15.97   (.02)  (1.08)  (1.10)  -   -   -   14.87   (6.89)  344   1.52(6)  1.52(6)  (.20)(6)
 Year ended 2/28/2010  10.08   (.04)  5.98   5.94   (.05)  -   (.05)  15.97   59.02   383   1.60   1.60   (.25)
 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)
                                                      
Class R-3:
Six months ended 8/31/2010(5)
  16.33   .02   (1.12)  (1.10)  (.03)  -   (.03)  15.20   (6.66)  490   1.05(6)  1.05(6)  .27(6)
 Year ended 2/28/2010  10.29   .04   6.11   6.15   (.11)  -   (.11)  16.33   60.02   541   1.08   1.08   .27 
 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 
                                                      
Class R-4:
Six months ended 8/31/2010(5)
  16.47   .05   (1.12)  (1.07)  (.08)  -   (.08)  15.32   (6.53)  367   .75(6)  .75(6)  .57(6)
 Year ended 2/28/2010  10.40   .08   6.16   6.24   (.17)  -   (.17)  16.47   60.42   378   .77   .77   .57 
 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 
                                                      
Class R-5:
Six months ended 8/31/2010(5)
  16.64   .07   (1.12)  (1.05)  (.13)  -   (.13)  15.46   (6.38)  697   .44(6)  .44(6)  .87(6)
 Year ended 2/28/2010  10.50   .13   6.22   6.35   (.21)  -   (.21)  16.64   60.97   741   .47   .47   .89 
 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 
                                                      
Class R-6:
Six months ended 8/31/2010(5)
  16.60   .08   (1.12)  (1.04)  (.13)  -   (.13)  15.43   (6.33)  436   .40(6)  .40(6)  .93(6)
 Period from 5/1/2009 to 2/28/2010  13.04   .11   3.61   3.72   (.16)  -   (.16)  16.60   28.85   380   .42(6)  .42(6)  .90(6)
 
 
  
Six months ended
August 31,
  Year ended February 28 or 29 
  
2010(5)
  2010  2009  2008  2007  2006 
                   
Portfolio turnover rate for all classes of shares 15%  29%  37%  29%  20%  20% 
 
 
(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                                                                                                                        0;                    
         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, 2010, through August 31, 2010).
 
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 additi on, 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 3/1/2010  Ending account value 8/31/2010  Expenses paid during period*  
Annualized
expense ratio
 
             
Class A -- actual return $1,000.00  $934.40  $3.61   .74%
Class A -- assumed 5% return  1,000.00   1,021.48   3.77   .74 
Class B -- actual return  1,000.00   931.22   7.35   1.51 
Class B -- assumed 5% return  1,000.00   1,017.59   7.68   1.51 
Class C -- actual return  1,000.00   931.29   7.45   1.53 
Class C -- assumed 5% return  1,000.00   1,017.49   7.78   1.53 
Class F-1 -- actual return  1,000.00   935.04   3.56   .73 
Class F-1 -- assumed 5% return  1,000.00   1,021.53   3.72   .73 
Class F-2 -- actual return  1,000.00   936.06   2.39   .49 
Class F-2 -- assumed 5% return  1,000.00   1,022.74   2.50   .49 
Class 529-A -- actual return  1,000.00   934.06   3.85   .79 
Class 529-A -- assumed 5% return  1,000.00   1,021.22   4.02   .79 
Class 529-B -- actual return  1,000.00   930.59   7.79   1.60 
Class 529-B -- assumed 5% return  1,000.00   1,017.14   8.13   1.60 
Class 529-C -- actual return  1,000.00   930.65   7.74   1.59 
Class 529-C -- assumed 5% return  1,000.00   1,017.19   8.08   1.59 
Class 529-E -- actual return  1,000.00   933.30   5.26   1.08 
Class 529-E -- assumed 5% return  1,000.00   1,019.76   5.50   1.08 
Class 529-F-1 -- actual return  1,000.00   935.20   2.83   .58 
Class 529-F-1 -- assumed 5% return  1,000.00   1,022.28   2.96   .58 
Class R-1 -- actual return  1,000.00   931.21   7.35   1.51 
Class R-1 -- assumed 5% return  1,000.00   1,017.59   7.68   1.51 
Class R-2 -- actual return  1,000.00   931.11   7.40   1.52 
Class R-2 -- assumed 5% return  1,000.00   1,017.54   7.73   1.52 
Class R-3 -- actual return  1,000.00   933.38   5.12   1.05 
Class R-3 -- assumed 5% return  1,000.00   1,019.91   5.35   1.05 
Class R-4 -- actual return  1,000.00   934.70   3.66   .75 
Class R-4 -- assumed 5% return  1,000.00   1,021.42   3.82   .75 
Class R-5 -- actual return  1,000.00   936.21   2.15   .44 
Class R-5 -- assumed 5% return  1,000.00   1,022.99   2.24   .44 
Class R-6 -- actual return  1,000.00   936.68   1.95   .40 
Class R-6 -- assumed 5% return  1,000.00   1,023.19   2.04   .40 
                 
*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period).
 
 
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       
10 years1/
 
September 30, 2010 (the most recent calendar quarter-end): 1 year  5 years  Life of class 
          
Class B shares2
         
Reflecting applicable contingent deferred sales         
charge (CDSC), maximum of 5%, payable only         
if shares are sold within six years of purchase  3.13%  0.45%  1.44%
Not reflecting CDSC  8.13   0.81   1.44 
             
Class C shares — first sold 3/15/01
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  7.13   0.78   2.00 
Not reflecting CDSC  8.13   0.78   2.00 
             
Class F-1 shares3 — first sold 3/16/01
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  9.06   1.61   3.00 
             
Class F-2 shares3 — first sold 8/1/08
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  9.27      2.20 
             
Class 529-A shares4 — first sold 2/15/02
            
Reflecting 5.75% maximum sales charge  2.73   0.34   2.69 
Not reflecting maximum sales charge  9.00   1.53   3.39 
             
Class 529-B shares2,4 — first sold 2/19/02
            
Reflecting applicable CDSC, maximum of 5%, payable            
only if shares are sold within six years of purchase  3.13   0.35   2.78 
Not reflecting CDSC  8.13   0.70   2.78 
             
Class 529-C shares4 — first sold 2/19/02
            
Reflecting CDSC, maximum of 1%, payable only            
if shares are sold within one year of purchase  7.06   0.71   2.74 
Not reflecting CDSC  8.06   0.71   2.74 
             
Class 529-E shares3,4 — first sold 3/7/02
  8.63   1.22   2.62 
             
Class 529-F-1 shares3,4 — first sold 9/17/02
            
Not reflecting annual asset-based fee charged            
by sponsoring firm  9.18   1.73   6.15 

 
1Applicable to Class B shares only. All other share classes reflect results for the life of the class.
 
2These shares are not available for purchase.
 
3These shares are sold without any initial or contingent deferred sales charge.
 
4Results shown do not reflect the $10 account setup fee and an annual $10 account maintenance fee.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable 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 that include expense ratios for all share classes.

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, 2011. 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 ben efits 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 board and committee meetings. 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 long-term results have been satisfactory and that CRMC’s record in managing the fund indicated that its continued management shou ld 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 clients of an affiliate of CRMC. They noted that, to the extent these were differences among the advisory fees paid by the clients and the advisory fees paid by the fund, the differences appropriately reflected the investment, operational and regulatory differences between advising the fund a nd the other 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 retu rn 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 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 an d 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 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 summary prospectus and 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, 2010, 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 summary prospectus or prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after December 31, 2010, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
 
 
 
 
 
 
What makes American Funds different?

For nearly 80 years, we have followed a consistent philosophy to benefit our investors. Our 30 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 million shareholder accounts.

Our unique combination of strengths includes these five factors:

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

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

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

 •Experienced investment professionals
American Funds portfolio counselors have an average of 26 years of investment experience, providing a 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®

 
•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-902-1010P
 
Litho in USA AGD/ALD/8078-S26171
 
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
 
 
 
 
AMCAP Fund® 
Investment portfolio
 
August 31, 2010
unaudited


Common stocks — 91.73% Shares  
Value
(000)
 
       
INFORMATION TECHNOLOGY — 26.79%      
Microsoft Corp.  20,545,000  $482,397 
Google Inc., Class A1
  962,100   432,964 
Oracle Corp.  18,420,000   403,030 
Accenture PLC, Class A  9,735,400   356,316 
Corning Inc.  20,060,000   314,541 
Yahoo! Inc.1
  22,825,000   298,551 
Hewlett-Packard Co.  6,050,000   232,804 
Apple Inc.1
  890,000   216,599 
Cisco Systems, Inc.1
  9,169,300   183,844 
MasterCard Inc., Class A  875,000   173,565 
Rovi Corp.1
  3,675,000   159,899 
QUALCOMM Inc.  4,100,000   157,071 
Automatic Data Processing, Inc.  2,975,000   114,865 
Global Payments Inc.  2,934,500   110,425 
Intel Corp.  6,000,000   106,320 
Trimble Navigation Ltd.1
  3,490,000   98,174 
SAP AG  2,220,000   96,932 
Autodesk, Inc.1
  3,460,000   96,015 
eBay Inc.1
  4,050,000   94,122 
Avago Technologies Ltd.1
  4,000,000   80,600 
International Business Machines Corp.  600,000   73,938 
Maxim Integrated Products, Inc.  4,645,000   73,716 
Texas Instruments Inc.  2,720,000   62,642 
Xilinx, Inc.  2,496,900   60,300 
EMC Corp.1
  3,150,000   57,456 
NVIDIA Corp.1
  5,400,000   50,382 
FLIR Systems, Inc.1
  1,784,800   44,834 
Paychex, Inc.  1,600,000   39,824 
Logitech International SA1
  2,081,556   30,682 
KLA-Tencor Corp.  1,083,000   30,335 
Linear Technology Corp.  1,050,000   30,083 
Applied Materials, Inc.  2,057,000   21,372 
Digital River, Inc.1
  703,300   18,546 
Altera Corp.  673,900   16,625 
Intersil Corp., Class A  1,176,000   11,754 
       4,831,523 
         
CONSUMER DISCRETIONARY — 13.27%        
Johnson Controls, Inc.  9,400,000   249,382 
Best Buy Co., Inc.  6,400,000   200,896 
YUM! Brands, Inc.  4,726,000   197,074 
Staples, Inc.  10,430,000   185,341 
DIRECTV, Class A1
  4,040,000   153,197 
Target Corp.  2,650,000   135,574 
Time Warner Inc.  4,433,333   132,911 
Lowe’s Companies, Inc.  6,317,000   128,235 
Tractor Supply Co.  1,725,000   117,265 
Apollo Group, Inc., Class A1
  2,750,000   116,820 
Time Warner Cable Inc.  2,095,613   108,155 
Kohl’s Corp.1
  1,975,000   92,785 
Harley-Davidson, Inc.  3,330,000   80,986 
Omnicom Group Inc.  2,100,000   73,521 
Bed Bath & Beyond Inc.1
  2,000,000   71,940 
News Corp., Class A  5,000,000   62,850 
Texas Roadhouse, Inc.1
  4,557,200   60,428 
Harman International Industries, Inc.1
  1,900,000   59,223 
McDonald’s Corp.  700,000   51,142 
P.F. Chang’s China Bistro, Inc.  700,000   29,967 
NIKE, Inc., Class B  400,000   28,000 
O’Reilly Automotive, Inc.1
  580,000   27,417 
Carnival Corp., units  750,000   23,385 
Timberland Co., Class A1
  480,000   7,714 
       2,394,208 
         
INDUSTRIALS — 12.67%        
Precision Castparts Corp.  3,764,000   426,009 
Union Pacific Corp.  3,822,300   278,799 
General Dynamics Corp.  4,365,000   243,873 
CSX Corp.  3,801,500   189,657 
United Technologies Corp.  2,850,000   185,848 
United Parcel Service, Inc., Class B  2,820,000   179,916 
Robert Half International Inc.  6,314,400   136,265 
Copart, Inc.1
  2,900,000   95,845 
SGS SA  60,000   86,875 
Southwest Airlines Co.  7,385,000   81,604 
Serco Group PLC  8,358,000   74,602 
General Electric Co.  5,000,000   72,400 
Gardner Denver, Inc.  1,368,600   65,337 
MITIE Group PLC2
  19,078,000   57,114 
MITIE Group PLC2,3
  2,578,000   7,718 
Rockwell Collins, Inc.  550,000   29,661 
MSC Industrial Direct Co., Inc., Class A  560,000   24,959 
Landstar System, Inc.  640,000   23,027 
Mine Safety Appliances Co.  685,000   15,618 
Iron Mountain Inc.  513,000   10,404 
       2,285,531 
         
HEALTH CARE — 11.42%        
Medtronic, Inc.  9,710,000   305,671 
McKesson Corp.  3,850,000   223,492 
Hologic, Inc.1,2
  14,374,100   203,968 
Amgen Inc.1
  2,877,700   146,878 
Endo Pharmaceuticals Holdings Inc.1
  4,900,000   133,133 
Beckman Coulter, Inc.  2,810,100   128,253 
Biogen Idec Inc.1
  2,156,000   115,993 
St. Jude Medical, Inc.1
  3,350,000   115,809 
Abbott Laboratories  2,300,000   113,482 
Becton, Dickinson and Co.  1,200,000   81,828 
Alere Inc.1
  2,712,000   75,855 
Medco Health Solutions, Inc.1
  1,500,000   65,220 
Life Technologies Corp.1
  1,503,600   64,309 
Emergency Medical Services Corp., Class A1
  1,148,200   55,171 
Myriad Genetics, Inc.1
  3,421,800   53,585 
Allergan, Inc.  780,000   47,908 
ResMed Inc.1
  1,380,000   41,593 
Merck & Co., Inc.  778,545   27,374 
Roche Holding AG  165,000   22,428 
Illumina, Inc.1
  520,000   22,303 
Boston Scientific Corp.1
  2,547,890   13,224 
Cochlear Ltd.  45,741   2,816 
       2,060,293 
         
FINANCIALS — 9.75%        
JPMorgan Chase & Co.  8,050,000   292,698 
Bank of New York Mellon Corp.  9,660,000   234,448 
State Street Corp.  5,842,200   204,944 
Wells Fargo & Co.  8,379,600   197,340 
Capital One Financial Corp.  4,750,000   179,835 
American Express Co.  3,500,000   139,545 
Hudson City Bancorp, Inc.  8,000,000   92,200 
Arthur J. Gallagher & Co.  3,525,000   87,596 
Zions Bancorporation  3,487,000   64,266 
Cullen/Frost Bankers, Inc.  1,250,000   64,063 
BB&T Corp.  2,500,000   55,300 
Portfolio Recovery Associates, Inc.1
  800,000   50,960 
PNC Financial Services Group, Inc.  795,000   40,513 
Northern Trust Corp.  620,000   28,607 
City National Corp.  523,600   25,363 
       1,757,678 
         
ENERGY — 6.51%        
Schlumberger Ltd.  5,866,940   312,884 
EOG Resources, Inc.  1,822,900   158,355 
FMC Technologies, Inc.1
  2,420,000   149,677 
Apache Corp.  1,300,000   116,805 
Devon Energy Corp.  1,625,000   97,955 
Baker Hughes Inc.  2,319,300   87,159 
Chevron Corp.  1,100,000   81,576 
ConocoPhillips  1,363,000   71,462 
Murphy Oil Corp.  700,000   37,492 
Marathon Oil Corp.  882,800   26,917 
BG Group PLC  1,180,000   18,993 
Hess Corp.  313,000   15,728 
       1,175,003 
         
CONSUMER STAPLES — 5.24%        
PepsiCo, Inc.  3,042,481   195,266 
CVS/Caremark Corp.  6,250,000   168,750 
Philip Morris International Inc.  2,500,000   128,600 
Ralcorp Holdings, Inc.1
  1,985,000   118,405 
Avon Products, Inc.  2,950,000   85,845 
Walgreen Co.  2,000,000   53,760 
L’Oréal SA  500,000   49,740 
Whole Foods Market, Inc.1
  1,350,000   46,966 
Altria Group, Inc.  1,750,000   39,060 
Shoppers Drug Mart Corp.  1,000,000   34,051 
Colgate-Palmolive Co.  340,000   25,106 
       945,549 
         
MATERIALS — 3.80%        
Monsanto Co.  4,097,900   215,754 
Barrick Gold Corp.  2,500,000   116,900 
AptarGroup, Inc.  2,100,000   87,465 
Ecolab Inc.  1,560,000   73,944 
Praxair, Inc.  795,431   68,431 
Air Products and Chemicals, Inc.  812,100   60,120 
Vulcan Materials Co.  1,450,000   53,302 
AK Steel Holding Corp.  784,400   9,993 
       685,909 
         
TELECOMMUNICATION SERVICES — 0.88%        
tw telecom inc.1
  5,750,000   100,826 
United States Cellular Corp.1
  734,300   30,782 
Telephone and Data Systems, Inc., special common shares  1,066,300   26,956 
       158,564 
         
MISCELLANEOUS — 1.40%        
Other common stocks in initial period of acquisition      251,592 
         
         
Total common stocks (cost: $14,780,378,000)      16,545,850 
         
         
         
Convertible securities — 0.00%        
         
CONSUMER DISCRETIONARY — 0.00%        
Johnson Controls, Inc. 11.50% convertible preferred 2012, units  4,600   621 
         
         
Total convertible securities (cost: $230,000)      621 
         
         
         
  Principal amount     
Short-term securities — 8.30%  (000)    
         
Freddie Mac 0.185%–0.44% due 9/1/2010–5/3/2011 $396,220   396,023 
Fannie Mae 0.15%–0.35% due 9/15/2010–1/18/2011  320,940   320,810 
Straight-A Funding LLC 0.23%–0.27% due 9/21–11/22/20103
  289,802   289,654 
Merck & Co. Inc. 0.20%–0.21% due 9/27–9/28/20103
  85,000   84,986 
General Electric Capital Services, Inc. 0.46% due 9/9/2010  40,000   39,998 
General Electric Co. 0.22% due 9/21/2010  35,000   34,996 
Federal Home Loan Bank 0.18%–0.19% due 10/22–11/26/2010  66,100   66,074 
Jupiter Securitization Co., LLC 0.32%–0.45% due 9/10–9/17/20103
  55,000   54,992 
Procter & Gamble International Funding S.C.A. 0.20% due 9/3/20103
  24,000   24,000 
Procter & Gamble Co. 0.26% due 12/2/20103
  18,800   18,790 
U.S. Treasury Bills 0.156%–0.165% due 9/2–9/9/2010  42,000   41,999 
E.I. duPont de Nemours and Co. 0.21% due 9/23/20103
  38,600   38,595 
Wal-Mart Stores Inc. 0.19% due 9/7–9/16/20103
  32,900   32,898 
Abbott Laboratories 0.20%–0.21% due 9/30–11/22/20103
  21,600   21,595 
Bank of America Corp. 0.20% due 9/14/2010  17,000   16,999 
Coca-Cola Co. 0.23% due 11/22/20103
  14,600   14,592 
         
         
Total short-term securities (cost: $1,496,809,000)      1,497,001 
         
Total investment securities (cost: $16,277,417,000)      18,043,472 
Other assets less liabilities      (5,699)
         
Net assets     $18,037,773 

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

1Security did not produce income during the last 12 months.
2Represents an affiliated company as defined under the Investment Company Act of 1940.
3Acquired 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 $587,820,000, which represented 3.26% 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 they may lose value.
 
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 summary prospectus and 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.
 
 
 
 
 
MFGEFP-902-1010O-S25544
 
 
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 trustees since the Registrant last submitted a proxy statement to its shareholders.  The procedures are as follows.  The Registrant has a nominating and governance 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 trustees. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will c onsider 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 and governance 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 and governance 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
  
 
By /s/ Claudia P. Huntington
 
Claudia P. Huntington, Vice Chairman and
Principal Executive Officer
  
 Date: October 29, 2010



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 29, 2010



By /s/ Karl C. Grauman
Karl C. Grauman, Treasurer and
Principal Financial Officer
 
Date: October 29, 2010