-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, h9xbHODFcBlQi2mNx8uOeJzU4OLD2ZQL6cUeESdEsNi1PHTGD+wwVahGbtSuF044 SV10pY3vKveNMw63no1AUQ== 0000013075-95-000007.txt : 19950302 0000013075-95-000007.hdr.sgml : 19950302 ACCESSION NUMBER: 0000013075-95-000007 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19950227 EFFECTIVENESS DATE: 19950227 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOND FUND OF AMERICA INC CENTRAL INDEX KEY: 0000013075 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 952884967 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-50700 FILM NUMBER: 95515811 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02444 FILM NUMBER: 95515802 BUSINESS ADDRESS: STREET 1: 333 S HOPE ST - 52ND FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: 2134869200 485BPOS 1 FORM N-1A POST EFFECTIVE AMENDMENT SEC. File Nos. 2- 50700 811-2444 SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM N-1A Registration Statement Under the Securities Act of 1933 Post-Effective Amendment No. 38 and Registration Statement Under The Investment Company Act of 1940 Amendment No. 19 THE BOND FUND OF AMERICA, INC. (Exact Name of Registrant as specified in charter) 333 South Hope Street Los Angeles, California 90071 (Address of principal executive offices) Registrant's telephone number, including area code: (213) 486-9200 JULIE F. WILLIAMS 333 SOUTH HOPE STREET LOS ANGELES, CALIFORNIA 90071 (NAME AND ADDRESS OF AGENT FOR SERVICE) Copies to: CARY I. KLAFTER, ESQ. MORRISON & FOERSTER 345 CALIFORNIA STREET SAN FRANCISCO, CALIFORNIA 94104 (COUNSEL FOR THE REGISTRANT) The Registrant has filed a declaration pursuant to rule 24f-2 registering an indefinite number of shares under the Securities Act of 1933. On February 17, 1995, it filed its 24f-2 notice for fiscal 1994. Approximate date of proposed public offering: It is proposed that this filing become effective on March 1, 1995, pursuant to paragraph (b) of rule 485. THE BOND FUND OF AMERICA, INC. CROSS REFERENCE SHEET
Item Number of Captions in Prospectus (Part "A") Part "A" of Form N-1A 1. Cover Page Cover Page 2. Synopsis Summary of Expenses 3. Condensed Financial Information Financial Highlights 4. General Description of Registrant Investment Objective and Policies 5. Management of the Fund Financial Highlights; Fund Organization and Management 6. Capital Stock and Other Securities Investment Objective and Policies; Certain Securities and Investment Techniques; Fund Organization and Management; Dividends, Distributions and Taxes 7. Purchase of Securities Being Offered Purchasing Shares 8. Redemption or Repurchase Redeeming Shares 9. Legal Proceedings N/A
Item Number of Captions in Statement of Part "B" of Form N-1A Additional Information (Part "B") 10. Cover Page Cover 11. Table of Contents Table of Contents 12. General Information and History Investment Restrictions; General Information 13. Investment Objectives and Policies The Fund's Investment Objective and Policies; Investment Restrictions 14. Management of the Registrant Fund Officers and Directors; Management 15. Control Persons and Principal Holders of Securities Fund Officers and Directors 16. Investment Advisory and Other Services Management 17. Brokerage Allocation and Other Practices Execution of Portfolio Transactions 18. Capital Stock and Other Securities None 19. Purchase, Redemption and Pricing of Purchase of Shares; Shareholder Securities Being Offered Account Services and Privileges 20. Tax Status Dividends, Distributions and Federal Taxes 21. Underwriter Management -- Principal Underwriter 22. Calculation of Performance Data Investment Results 23. Financial Statements Financial Statements
Item in Part "C" 24. Financial Statements and Exhibits 25. Persons Controlled by or under Common Control with Registrant 26. Number of Holders of Securities 27. Indemnification 28. Business and Other Connections of Investment Adviser 29. Principal Underwriters 30. Location of Accounts and Records 31. Management Services 32. Undertakings Signature Page
PROSPECTUS THE BOND FUND OF AMERICA(SM) AN OPPORTUNITY FOR CURRENT INCOME AND PRESERVATION OF CAPITAL THROUGH A DIVERSIFIED PORTFOLIO OF BONDS [LOGO OF THE AMERICAN FUNDS GROUP(R)] March 1, 1995 THE BOND FUND OF AMERICA, INC. 333 South Hope Street Los Angeles, CA 90071 The fund seeks to provide as high a level of current income as is consistent with the preservation of capital by investing primarily in bonds. This prospectus presents information you should know before investing in the funds. It should be retained for future reference. You may obtain the statement of additional information dated March 1, 1995, which contains the fund's financial statements, without charge, by writing to the Secretary of the fund at the above address or telephoning 800/421-0180. These requests will be honored within three business days of receipt. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED, GUARANTEED, OR ENDORSED BY, THE U.S. GOVERNMENT, ANY BANK, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, ENTITY OR PERSON. THE PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 08-010-0395 TABLE OF CONTENTS Summary of Expenses.................. 3 Financial Highlights................. 4 Investment Objective and Policies.... 4 Certain Securities and Investment Techniques.......................... 6 Investment Results................... 10 Dividends, Distributions and Taxes... 10 Fund Organization and Management..... 11 The American Funds Shareholder Guide. 14-22 Purchasing Shares................... 14 Reducing Your Sales Charge.......... 17 Shareholder Services................ 18 Redeeming Shares.................... 20 Retirement Plans.................... 22
IMPORTANT PHONE NUMBERS Shareholder Services........800/421-0180 ext. 1 Dealer Services.............800/421-9900 ext. 11 American FundsLine(R).......800/325-3590 (24-hour information) 2 - ------------------------------------------------------------------------------- SUMMARY OF EXPENSES Average annual expenses paid over a 10-year period would be approximately $13 per year, assuming a $1,000 investment and a 5% annual return. This table is designed to help you understand costs of investing in the fund. These are historical expenses; your actual expenses may vary. SHAREHOLDER TRANSACTION EXPENSES Maximum sales charge on purchases (as a percentage of offering price)............... 4.75%/1/
The fund has no sales charge on reinvested dividends, deferred sales charge,/2/ redemption fees or exchange fees. ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets) Management fees.................................... 0.37% 12b-1 expenses..................................... 0.22%/3/ Other expenses (including audit, legal, shareholder services, transfer agent and custodian expenses).. 0.10% Total fund operating expenses...................... 0.69%
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------- ------ ------- ------- -------- You would pay the following cumulative expenses on a $1,000 investment, assuming a 5% annual return./4/ $54 $69 $84 $129
/1/ Sales charges are reduced for certain large purchases. (See "The American Funds Shareholder Guide: Purchasing Shares--Sales Charges.") /2/ Any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees or any other purchaser investing at least $1 million in shares of the fund (or in combination with shares of other funds in The American Funds Group other than the money market funds) may purchase shares at net asset value; however, a contingent deferred sales charge of 1% applies on certain redemptions within 12 months following such purchases. (See "The American Funds Shareholder Guide: Redeeming Shares--Contingent Deferred Sales Charge.") /3/ These expenses may not exceed 0.25% of the fund's average net assets annually. (See "Fund Organization and Management--Plan of Distribution.") Due to these distribution expenses, long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charge permitted by the National Association of Securities Dealers. /4/ Use of this assumed 5% return is required by the Securities and Exchange Commission; it is not an illustration of past or future investment results. THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 3 - ------------------------------------------------------------------------------- FINANCIAL The following information has been audited by Deloitte HIGHLIGHTS & Touche LLP, independent accountants, whose unquali- (For a share fied report covering each of the most recent five years outstanding is included in the statement of additional information. throughout the This information should be read in conjunction with the fiscal year) financial statements and accompanying notes which are included in the statement of additional information.
YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------- 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, Begin- ning of Year........... $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 $14.01 $12.34 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income.. 1.05 1.09 1.15 1.21 1.24 1.31 1.28 1.28 1.38 1.44 Net realized and unrealized gain (loss) on investments........ (1.76) .84 .34 1.28 (.84) (.02) .08 (1.02) .66 1.67 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total from investment operations........... (0.71) 1.93 1.49 2.49 .40 1.29 1.36 .26 2.04 3.11 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net in- vestment income....... (1.05) (1.08) (1.16) (1.18) (1.24) (1.30) (1.26) (1.23) (1.44) (1.44) Distributions from net realized gains........ -- (.39) (.04) -- -- -- -- (.10)/1/ (.40) -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total distributions... (1.05) ( 1.47) (1.20) (1.18) (1.24) (1.30) (1.26) (1.33) (1.84) (1.44) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, End of Year................... $12.69 $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 $14.01 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== Total Return/2/ (5.02)% 14.14% 11.34% 21.04% 3.27% 10.13% 10.70% 1.96% 15.17% 26.61% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in millions)......... $4,941 $5,285 $3,917 $2,859 $1,945 $1,481 $1,021 $ 825 $ 694 $ 451 Ratio of expenses to average net assets.... .69% .71% .73% .77% .76% .76% .66% .59% .58% .61% Ratio of net income to average net assets.... 7.77% 7.53% 8.36% 9.28% 9.70% 9.73% 9.54% 9.45% 9.39% 10.80% Portfolio turnover rate.................. 57.0% 44.7% 49.7% 56.5% 59.9% 64.2% 93.0% 93.0% 107.8% 142.3%
- -------- /1/ Represents only net short-term realized gains. /2/ This was calculated without deducting a sales charge. The maximum sales charge is 4.75% of the fund's offering price. INVESTMENT The fund's investment objective is to provide as high a OBJECTIVE level of current income as is consistent with the pres- AND POLICIES ervation of capital. The fund invests substantially all of its assets in marketable corporate debt securities, The fund's goal is U.S. Government securities, mortgage-related securi- to provide you ties, other asset-backed securities and cash or money with high current market instruments. Normally, at least 65% of the incomeand fund's assets will be invested in bonds. (For this pur- conservationof pose, bonds are considered any debt securities having capital. initial maturities in excess of one year.) At least 60% of the value of the fund's assets, mea- sured at the time of any purchase, must be invested in the following categories: . marketable corporate debt securities such as bonds rated at the time of purchase within the three highest investment grade ratings (A or better) assigned by Moody's Investors Service, Inc. or Standard & Poor's Corporation (all ratings discussed below refer to those assigned by these two rating agencies) or, if not rated by either of these rating agencies, determined by the fund's investment adviser, Capital Research and Management Company, as being of investment quality equivalent to securities rated A or better; 4 - ------------------------------------------------------------------------------- . U.S. Government securities including (1) direct obligations of the U.S. Treasury (such as Treasury bills, notes and bonds), (2) obligations guaranteed as to principal and interest by the U.S. Treasury such as Government National Mortgage Association certificates (described below) and Federal Housing Administration debentures, and (3) securities issued by U.S. Government instrumentalities and certain federal agencies that are neither direct obligations of, nor guaranteed by, the Treasury; . mortgage-related securities rated A or better or unrated securities that are determined to be of equivalent quality of (1) governmental issuers, including Government National Mortgage Association certificates, which are securities representing part ownership of a pool of mortgage loans on which timely payment of interest and principal is guaranteed by the U.S. Government, and securities issued and guaranteed as to the payment of interest and principal by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation (but not backed by the U.S. Government); (2) private issuers, including mortgage pass-through certificates or mortgage-backed bonds; and (3) the governmental issuers mentioned above or private issuers, including collateralized mortgage obligations and real estate mortgage investment conduits which are issued in portions or tranches with varying maturities and characteristics; some tranches may only receive the interest paid on the underlying mortgages (IOs) and others may only receive the principal payments (POs); the values of IOs and POs are extremely sensitive to interest rate fluctuations and prepayment rates, and IOs are also subject to the risk of early prepayment of the underlying mortgages which will substantially reduce or eliminate interest payments (see the statement of additional information for more about these securities); . other asset-backed securities rated A or better or unrated securities that are determined to be of equivalent quality (unrelated to mortgage loans) such as securities whose assets consist of a pool of motor vehicle retail installment sales contracts and security interests in the vehicles securing the contracts or a pool of credit card loan receivables (see the statement of additional information for more about these securities); . cash or money market instruments, including commercial bank obligations (certificates of deposit, which are interest-bearing time deposits; bankers acceptances, which are time drafts on a commercial bank where the bank accepts an irrevocable obligation to pay at maturity; and demand or time deposits), and commercial paper (short-term notes with maturities of up to nine months issued by corporations or government bodies). The remaining 40% of the fund's assets, measured at the time of purchase, may be invested in debt securities rated below A or unrated securities that are determined to be of equivalent quality, including marketable cor- porate debt securities, mortgage-related securities and other asset-backed securities. These securities may be rated as low as Ca by Moody's or CC by S&P. 5 - ------------------------------------------------------------------------------- However, securities rated Ba or BB or below or unrated securities that are determined to be of equivalent quality (commonly known as "junk" or "high-yield, high- risk" bonds) will represent less than 35% of the fund's net assets and are subject to special review before purchase. The fund may from time to time invest in fixed-income securities of corporations outside the U.S. or govern- mental entities, and the fund may purchase or sell var- ious currencies on either a spot or forward basis in connection with these investments. The average monthly composition of the fund's portfolio based on the higher of the Moody's or S&P ratings for the fiscal year ended December 31, 1994 was as fol- lows: bonds--Aaa/AAA-41.04%; Aa/AA-3.78%; A/A-6.61%; Baa/BBB-13.46%; Ba/BB-9.34%; B/B-11.3%, and Caa/CCC- 0.8%. Other investments, including non-rated invest- ments, equity-type securities and cash or cash equiva- lents amounted to 2.35%, 2.24% and 9.08%, respectively. The fund's investment restrictions (which are described in the statement of additional information) and objec- tive cannot be changed without shareholder approval. All other investment practices may be changed by the fund's board. ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT, OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN SECURITIES. CERTAIN SECURITIES RISKS OF INVESTING IN BONDS The market values of fixed- AND INVESTMENT income securities generally vary inversely with the TECHNIQUES level of interest rates--when interest rates rise, their values will tend to decline and vice versa. The Investing in bonds magnitude of these changes generally will be greater involves certain the longer the remaining maturity of the security. risks. Fluctuations in the value of the fund's investments will be reflected in its net asset value per share; typically declining when interest rates rise. High-yield, high-risk bonds (bonds rated Ba or BB or below) may be subject to greater market fluctuations and to greater risk of loss of income and principal due to default by the issuer than are higher-rated bonds. Their values tend to reflect short-term corporate, eco- nomic and market developments and investor perceptions of the issuer's credit quality to a greater extent than lower yielding higher-rated bonds. In addition, it may be more difficult to dispose of, or to determine the value of, high-yield, high-risk bonds. Bonds rated Ba or BB are considered speculative. Bonds rated Ca or CC are described by the ratings agencies as "speculative in a high degree; often in default or [having] other marked shortcomings." See the statement of additional information for a complete description of the bond rat- ings. Capital Research and Management Company attempts to re- duce the risks described above through diversification of the portfolio and by credit analysis of each issuer as well as by monitoring broad economic trends and cor- porate and legislative developments. 6 - ------------------------------------------------------------------------------- RISKS OF INVESTING IN VARIOUS COUNTRIES The fund may invest in securities of issuers located outside the United States which may be denominated in currencies other than the U.S. dollar. Companies located outside the U.S. operate under different accounting, auditing and financial reporting standards and practices and regulatory requirements that may be less rigorous than U.S. companies. There may be less information publicly available about companies located outside the U.S. Ad- ditionally, specific local political and economic fac- tors must be evaluated in making these investments in- cluding trade balances and imbalances; and related eco- nomic policies; expropriation or confiscatory taxation; limitations on the removal of funds or other assets; political or social instability; the diverse structure and liquidity of the various securities markets; and nationalization policies of governments around the world. Additional costs could be incurred in connection with the fund's investment activities outside the U.S. Increased custodian costs as well as administrative difficulties (for example, delays in clearing and set- tling portfolio transactions) may be associated with the maintenance of assets in certain jurisdictions. The fund may invest to a limited extent in countries that are considered developing countries, and, in those cases the degree of risk described above may be great- er. However, in the opinion of Capital Research and Management Company, global investing also can reduce certain of these risks through greater diversification opportunities. CURRENCY TRANSACTIONS The fund has the ability to hold a portion of its assets in currencies other than the U.S. dollar and to enter into spot or forward currency contracts to facilitate transactions and/or to protect against changes in currency exchange rates. Although this strategy could minimize the risk of loss due to a decline in the value of the hedged currency, it could also limit any potential gain which might result from an increase in the value of the currency. (See "Cur- rency Transactions," in the statement of additional in- formation.) WHEN-ISSUED SECURITIES, FIRM COMMITMENT AGREEMENTS AND "ROLL" TRANSACTIONS The fund may purchase securities on a delayed delivery or "when-issued" basis and enter into firm commitment agreements (transactions whereby the payment obligation and interest rate are fixed at the time of the transaction but the settlement is de- layed). The fund as purchaser assumes the risk of any decline in value of the security beginning on the date of the agreement or purchase. The fund also may enter into "roll" transactions, which are the sale of GNMA certificates or other securities together with a com- mitment (for which the fund typically receives a fee) to purchase similar, but not identical securities at a later date. As the fund's aggregate commitments under these transactions increase, the opportunity for lever- age similarly may increase; however, it is not the in- tent of the fund to engage in these transactions for leveraging purposes. The fund will segregate liquid assets such as cash, U.S. Government securities or other appropriate high- grade debt obligations in an amount sufficient to meet its payment obligations in these transactions. Although 7 - ------------------------------------------------------------------------------- these transactions will not be entered into for leveraging purposes, to the extent the fund's aggregate commitments under these transactions exceed its hold- ings of cash and securities that do not fluctuate in value (such as short-term money market instruments), the fund temporarily will be in a leveraged position (i.e., it will have an amount greater than its net as- sets subject to market risk). Should market values of the fund's portfolio securities decline while the fund is in a leveraged position, greater depreciation of its net assets would likely occur than were it not in such a position. The fund will not borrow money to settle these transactions and, therefore, will liquidate other portfolio securities in advance of settlement if neces- sary to generate additional cash to meet its obliga- tions thereunder. REPURCHASE AGREEMENTS The fund may enter into repur- chase agreements, under which it buys a security and obtains a simultaneous commitment from the seller to repurchase the security at a specified time and price. The seller must maintain with the fund's custodian col- lateral equal to at least 100% of the repurchase price including accrued interest as monitored daily by Capi- tal Research and Management Company. If the seller un- der the repurchase agreement defaults, the fund may in- cur a loss if the value of the collateral securing the repurchase agreement has declined and may incur dispo- sition costs in connection with liquidating the collat- eral. If bankruptcy proceedings are commenced with re- spect to the seller, liquidation of the collateral by the fund may be delayed or limited. LOAN PARTICIPATIONS The fund may invest, subject to an overall 10% limit on loans, in loan participations, typically made by a syndicate of banks to U.S. and non- U.S. corporate or governmental borrowers for a variety of purposes. The underlying loans may be secured or unsecured, and will vary in term and legal structure. When purchasing such instruments the fund may assume the credit risks associated with the original bank lender as well as the credit risks associated with the borrower. Investments in loan participations present the possibility that the fund could be held liable as a co-lender under emerging legal theories of lender lia- bility. In addition, if the loan is foreclosed, the fund could be part owner of any collateral, and could bear the costs and liabilities of owning and disposing of the collateral. Loan participations are generally not rated by major rating agencies and may not be pro- tected by the securities laws. Also, loan participa- tions are generally considered to be illiquid. PRIVATE PLACEMENTS Private placements may be either purchased from another institutional investor that originally acquired the securities in a private place- ment or directly from the issuers of the securities. Generally, securities acquired in private placements are subject to contractual restrictions on resale and may not be resold except pursuant to a registration statement under the Securities Act of 1933 or in reli- ance upon an exemption from the registration require- ments under the Act, for example, private placements sold pursuant to Rule 144A. Accordingly, any such obli- gation will be deemed illiquid unless it has been spe- cifically determined to be liquid under procedures adopted by the fund's board of directors, and the fund may incur certain additional costs in disposing of such securities. 8 - ------------------------------------------------------------------------------- In determining whether these securities are liquid, factors such as the frequency and volume of trading and the commitment of dealers to make markets will be con- sidered. Additionally, the liquidity of any particular security will depend on such factors as the availabil- ity of "qualified" institutional investors and the ex- tent of investor interest in the security, which can change from time to time. INVERSE FLOATING RATE NOTES The fund may invest to a limited extent in inverse floating rate notes (a type of derivative instrument). These notes have rates that move in the opposite direction of prevailing interest rates; thus, a change in prevailing interest rates will often result in a greater change in the instruments' interest rates. As a result, these instruments may have a greater degree of volatility than other types of in- terest-bearing securities. MATURITY The maturity composition of the fund's portfo- lio of fixed-income securities will be adjusted in re- sponse to market conditions and expectations. There are no restrictions on the maturity composition of the portfolio, although it is anticipated that the fund normally will be invested substantially in intermedi- ate-term (3 to 10 years to maturity) and long-term (over 10 years to maturity) securities. MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic investment philosophy of Capital Research and Management Company is to seek fundamental values at reasonable prices, using a system of multiple portfolio counselors in managing mutual fund assets. Under this system the portfolios of the managed funds are divided into segments which are usually managed by individual counselors. Each counselor decides how the segment will be invested (within the limits provided by the fund's objective and policies and by Capital Research and Management Company's investment committee). In addition, Capital Research and Management Company's research professionals make investment decisions with respect to a portion of the fund's portfolio. The primary individual portfolio counselors for the fund are listed below. YEARS OF EXPERIENCE AS INVESTMENT PROFESSIONAL (APPROXIMATE) YEARS OF EXPERIENCE AS WITH CAPITAL PORTFOLIO RESEARCH AND PORTFOLIO COUNSELOR FOR MANAGEMENT COUNSELORS FOR THE BOND FUND COMPANY OR THE BOND FUND OF AMERICA ITS TOTAL OF AMERICA PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS - ----------------------------------------------------------------------------------------------------------------- Abner D. Goldstine President and Director Since the fund began operations 28 years 43 years of the fund. Senior Vice in 1974 President and Director, Capital Research and Management Company - ---------------------------------------------------------------------------------------------------------------- Richard T. Schotte Senior Vice President of 17 years 17 years 28 years the fund. Senior Vice President, Capital Research and Management Company - ---------------------------------------------------------------------------------------------------------------- John H. Smet Vice President of the 6 years 12 years 13 years fund. Vice President, Capital Research and Management Company - ---------------------------------------------------------------------------------------------------------------- The fund began operations on May 28, 1974. 9 - -------------------------------------------------------------------------------- INVESTMENT RESULTS The fund may from time to time compare its investment results to various unmanaged indices or other mutual The fund has funds in reports to shareholders, sales literature and averaged a total advertisements. The results may be calculated on a total return of 10.03% a return and/or yield basis for various periods, with or year (assuming the without sales charges. Results calculated without a maximum sales sales charge will be higher. Total returns assume the charge was paid) reinvestment of all dividends and capital gain distribu- over its lifetime tions. (May 28, 1974 through December The fund's yield and the average annual total returns 31, 1994). are calculated in accordance with the Securities and Exchange Commission requirements which provide that the maximum sales charge be reflected. The fund's yield for the 30-day period ended December 31, 1994 was 7.95%. The fund's total return over the past 12 months and average annual total returns over the past five-year and ten- year periods, as of December 31, 1994, were -9.52%, 7.52% and 10.04%, respectively. Of course, past results are not an indication of future results. Further information regarding the fund's investment results is contained in the fund's annual report which may be obtained without charge by writing to the Secretary of the fund at the address indicated on the cover of this prospectus. DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS The fund declares dividends DISTRIBUTIONS AND from its net investment income daily and distributes TAXES such accrued dividends to shareholders each month. Dividends begin accruing one day after payment for Income shares is received by the fund or American Funds Service distributions are Company. All capital gains, if any, are distributed made each month. annually, usually in December. When a capital gain is distributed, the net asset value per share is reduced by the amount of the payment. FEDERAL TAXES The fund intends to operate as a "regu- lated investment company" under the Internal Revenue Code. In any fiscal year in which the fund so qualifies and distributes to shareholders all of its net invest- ment income and net capital gains, the fund itself is relieved of federal income tax. All dividends and capital gains are taxable whether they are reinvested or received in cash--unless you are ex- empt from taxation or entitled to tax deferral. Early each year, you will be notified as to the amount and federal tax status of all dividends and capital gains paid during the prior year. Such dividends and capital gains may also be subject to state or local taxes. IF YOU HAVE NOT FURNISHED A CERTIFIED CORRECT TAXPAYER IDENTIFICATION NUMBER (GENERALLY YOUR SOCIAL SECURITY NUMBER) AND HAVE NOT CERTIFIED THAT WITHHOLDING DOES NOT APPLY, OR IF THE INTERNAL REVENUE SERVICE HAS NOTIFIED THE FUND THAT THE TAXPAYER IDENTIFICATION NUMBER LISTED ON YOUR ACCOUNT IS INCORRECT ACCORDING TO THEIR RECORDS OR THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING, FEDERAL LAW GENERALLY REQUIRES THE FUND TO WITHHOLD 31% FROM ANY DIVIDENDS AND/OR REDEMPTIONS (INCLUDING EXCHANGE REDEMPTIONS). Amounts withheld are applied to your federal tax liability; a refund may be obtained from the Service if withholding results in overpayment of taxes. Federal law also requires the fund to withhold 30% or the applicable tax treaty rate from dividends paid to certain nonresident alien, non-U.S. partnership and non- U.S. corporation shareholder accounts. 10 - ------------------------------------------------------------------------------- This is a brief summary of some of the tax laws that affect your investment in the fund. Please see the statement of additional information and your tax adviser for further information. FUND FUND ORGANIZATION AND VOTING RIGHTS The fund, an open- ORGANIZATION end, diversified management investment company, was or- AND MANAGEMENT ganized as a Maryland corporation in 1973. The fund's board supervises fund operations and performs duties The fund is a required by applicable state and federal law. Members member of The of the board who are not employed by Capital Research American Funds and Management Company or its affiliates are paid cer- Group, which is tain fees for services rendered to the fund as de- managed by one of scribed in the statement of additional information. the largest and They may elect to defer all or a portion of these fees most experienced through a deferred compensation plan in effect for the investment fund. Shareholders have one vote per share owned and, advisers. at the request of the holders of at least 10% of the shares, the fund will hold a meeting at which any mem- ber of the board could be removed by a majority vote. There will not usually be a shareholder meeting in any year except, for example, when the election of the board is required to be acted upon by shareholders un- der the Investment Company Act of 1940. THE INVESTMENT ADVISER Capital Research and Management Company, a large and experienced investment management organization founded in 1931, is the investment adviser to the fund and other funds, including those in The American Funds Group. Capital Research and Management Company is located at 333 South Hope Street, Los Ange- les, CA 90071 and at 135 South State College Boulevard, Brea, CA 92621. (See "The American Funds Shareholder Guide: Purchasing Shares-- Investment Minimums and Fund Numbers" for a listing of funds in The American Funds Group.) Capital Research and Management Company manages the investment portfolio and business affairs of the fund and receives a fee at the annual rate of 0.30% on the first $60 million of the fund's net assets, plus 0.21% on net assets over $60 million to $1 billion, plus 0.18% on assets over $1 billion to $3 billion, plus 0.16% on assets over $3 billion, plus 3% of the first $5.4 million of annual gross income, plus 2.25% of annual gross income over $5.4 million. Assuming net assets of $5 billion and gross investment income levels of 8%, 9%, 10%, 11%, 12% and 13%, management fees would be .36%, .38%, .40%, .43%, .45% and .47%, respectively. Capital Research and Management Company is a wholly owned subsidiary of The Capital Group Companies, Inc. (formerly "The Capital Group, Inc."), which is located at 333 South Hope Street, Los Angeles, CA 90071. The research activities of Capital Research and Management Company are conducted by affiliated companies which have offices in Los Angeles, San Francisco, New York, Washington, D.C., London, Geneva, Singapore, Hong Kong and Tokyo. Capital Research and Management Company and its affili- ated companies have adopted a personal investing policy that is consistent with the 11 - ------------------------------------------------------------------------------- recommendations contained in the report dated May 9, 1994 issued by the Investment Company Institute's Advi- sory Group on Personal Investing. (See the statement of additional information.) PORTFOLIO TRANSACTIONS Orders for the fund's portfolio securities transactions are placed by Capital Research and Management Company, which strives to obtain the best available prices, taking into account the costs and quality of executions. Fixed-income securities are generally traded on a "net" basis with a dealer acting as principal for its own account without a stated com- mission, although the price of the security usually in- cludes a profit to the dealer. In underwritten offer- ings, securities are usually purchased at a fixed price which includes an amount of compensation to the under- writer, generally referred to as the underwriter's con- cession or discount. On occasion, securities may be purchased directly from an issuer, in which case no commissions or discounts are paid. Subject to the above policy, when two or more brokers are in a position to offer comparable prices and execu- tions, preference may be given to brokers that have sold shares of the fund or have provided investment re- search, statistical, and other related services for the benefit of the fund and/or of other funds served by Capital Research and Management Company. PRINCIPAL UNDERWRITER American Funds Distributors, Inc., a wholly owned subsidiary of Capital Research and Management Company, is the principal underwriter of the fund's shares. American Funds Distributors is located at 333 South Hope Street, Los Angeles, CA 90071, 135 South State College Boulevard, Brea, CA 92621, 8000 IH- 10 West, San Antonio, TX 78230, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240, and 5300 Robin Hood Road, Norfolk, VA 23513. Telephone conversations with American Funds Distributors may be recorded or moni- tored for verification, recordkeeping and quality as- surance purposes. PLAN OF DISTRIBUTION The fund has a plan of distribu- tion or "12b-1 Plan" under which it may finance activi- ties primarily intended to sell shares, provided the categories of expenses are approved in advance by the board and the expenses paid under the plan were in- curred within the last 12 months and accrued while the plan is in effect. Expenditures by the fund under the plan may not exceed 0.25% of its average net assets an- nually (all of which may be for service fees). See "Purchasing Shares--Sales Charges" below. TRANSFER AGENT American Funds Service Company, a wholly owned subsidiary of Capital Research and Management Company, is the transfer agent and performs shareholder service functions. It was paid a fee of $3,751,000 for the fiscal year ended December 31, 1994. Telephone con- versations with American Funds Service Company may be recorded or monitored for verification, recordkeeping and quality assurance purposes. 12 - -------------------------------------------------------------------------------- AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS SERVICE ADDRESS AREAS SERVED AREA ------------------------------------------------------------ WEST P.O. Box 2205 AK, AZ, CA, HI, ID, Brea, CA 92622-2205 MT, NV, OR, UT, WA Fax: 714/671-7080 and outside the U.S. ------------------------------------------------------------ CENTRAL- P.O. Box 659522 AR, CO, IA, KS, LA, WEST San Antonio, TX 78265-9522 MN, MO, ND, NE, NM, Fax: 210/530-4050 OK, SD, TX, and WY ------------------------------------------------------------ CENTRAL- P.O. Box 6007 AL, IL, IN, KY, MI, EAST Indianapolis, IN 46206-6007 MS, OH, TNand WI Fax: 317/735-6620 ------------------------------------------------------------ EAST P.O. Box 2280 CT, DE, FL, GA, MA, Norfolk, VA 23501-2280 MD, ME, NC, NH, NJ, Fax: 804/670-4773 NY, PA, RI, SC, VA, VT, WV and Washington, D.C. ------------------------------------------------------------ ALL SHAREHOLDERS MAY CALL AMERICAN FUNDS SERVICE COMPANY AT 800/421-0180 FOR SERVICE. ------------------------------------------------------------ [MAP OF THE UNITED STATES OF AMERICA] ------------------------------------------------------------ West (light grey); Central-West (white); Central-East (dark grey), East (green) 13 THE AMERCIAN FUNDS SHAREHOLDER GUIDE PURCHASING SHARES METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS --------------------------------------------------------- Your investment See "Investment $50 minimum (except dealer can help Minimums and Fund where a lower you establish your Numbers" for minimum is noted account--and help initial under "Investment you add to it investment Minimums and Fund whenever you like. minimums. Numbers"). --------------------------------------------------------- By Visit any Mail directly to contacting investment dealer your investment your who is registered dealer's address investment in the state printed on your dealer where the account statement. purchase is made and who has a sales agreement with American Funds Distributors. --------------------------------------------------------- By mail Make your check Fill out the account payable to the additions form at the fund and mail to bottom of a recent the address account statement, indicated on the make your check account payable to the fund, application. write your account Please indicate number on your check, an investment and mail the check dealer on the and form in the account envelope provided application. with your account statement. --------------------------------------------------------- By wire Call 800/421-0180 Your bank should wire to obtain your your additional account investments in the number(s), if same manner as necessary. Please described under indicate an "Initial Investment." investment dealer on the account. Instruct your bank to wire funds to: Wells Fargo Bank 155 Fifth Street Sixth Floor San Francisco, CA 94106 (ABA #121000248) For credit to the account of: American Funds Service Company a/c #4600-076178 (fund name) (your fund acct. no.) --------------------------------------------------------- THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER. SHARE PRICE Shares are purchased at the next offering price after the order is received by the fund or American Funds Service Company. In the case of orders sent directly to the fund or American Funds Service Company, an investment dealer MUST be indicated. This price is the net asset value plus a sales charge, if applicable. Dealers are responsible for promptly transmitting orders. (See the statement of additional information under "Purchase of Shares--Price of Shares.") The net asset value per share is determined as of the close of trading (currently 4:00 p.m., New York time) on each day the New York Stock Exchange is open. The current value of the fund's total assets, less all liabilities, is divided by the total number of shares outstanding and the result, rounded to the nearer cent, is the net asset value per share. The net asset value per share of the money market funds normally will remain constant at $1.00 based on the funds' current practice of valuing their shares on the basis of the penny- rounding method in accordance with rules of the Securities and Exchange Commission. SHARE CERTIFICATES Shares are credited to your account and certificates are not issued unless specifically requested. This eliminates the costly problem of lost or destroyed certificates. 14 - ------------------------------------------------------------------------------- If you would like certificates issued, please request them by writing to American Funds Service Company. There is usually no charge for issuing certificates in reasonable denominations. CERTIFICATES ARE NOT AVAILABLE FOR THE MONEY MARKET FUNDS. INVESTMENT MINIMUMS AND FUND NUMBERS Here are the minimum initial investments required by the funds in The American Funds Group along with fund numbers for use with our automated phone line, American FundsLine(R) (see description below):
MINIMUM INITIAL FUND FUND INVESTMENT NUMBER - ---- ---------- ------ STOCK AND STOCK/BOND FUNDS AMCAP Fund(R).......................... $1,000 02 American Balanced Fund(R).............. 500 11 American Mutual Fund(R)................ 250 03 Capital Income Builder(R).............. 1,000 12 Capital World Growth and Income Fund(SM)............................. 1,000 33 EuroPacific Growth Fund(R)............. 250 16 Fundamental Investors(SM).............. 250 10 The Growth Fund of America(R).......... 1,000 05 The Income Fund of America(R).......... 1,000 06 The Investment Company of America(R)... 250 04 The New Economy Fund(R)................ 1,000 14 New Perspective Fund(R)................ 250 07 SMALLCAP World Fund(SM)................ 1,000 35 Washington Mutual Investors Fund(SM)... 250 01
MINIMUM INITIAL FUND FUND INVESTMENT NUMBER - ---- ---------- ------ BOND FUNDS American High-Income Municipal Bond Fund(SM)............................. $1,000 40 American High-Income Trust(R).......... 1,000 21 The Bond Fund of America(SM)........... 1,000 08 Capital World Bond Fund(R)............. 1,000 31 Intermediate Bond Fund of America(R)... 1,000 23 Limited Term Tax-Exempt Bond Fund of America(SM).......................... 1,000 43 The Tax-Exempt Bond Fund of America(SM).......................... 1,000 19 The Tax-Exempt Fund of California(R)*.. 1,000 20 The Tax-Exempt Fund of Maryland(R)*.... 1,000 24 The Tax-Exempt Fund of Virginia(R)*.... 1,000 25 U.S. Government Securities Fund(SM).... 1,000 22 MONEY MARKET FUNDS The Cash Management Trust of America(R)........................... 2,500 09 The Tax-Exempt Money Fund of America(SM).......................... 2,500 39 The U.S. Treasury Money Fund of America(SM).......................... 2,500 49
-------- * Available only in certain states. For retirement plan investments, the minimum is $250, except that the money market funds have a minimum of $1,000 for individual retirement accounts (IRAs). Minimums are reduced to $50 for purchases through "Automatic Investment Plans" (except for the money market funds) or to $25 for purchases by retirement plans through payroll deductions and may be reduced or waived for shareholders of other funds in The American Funds Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS RETIREMENT PLAN INVESTMENTS. The minimum is $50 for additional investments (except as noted above). SALES CHARGES The sales charges you pay when purchasing the stock, stock/bond, and bond funds of The American Funds Group are set forth below. The money market funds of The American Funds Group are offered at net asset value. (See "Investment Minimums and Fund Numbers" for a listing of the funds.) 15 - -------------------------------------------------------------------------------
DEALER SALES CHARGE AS CONCESSION PERCENTAGE OF THE: AS PERCENTAGE ------------------ OF THE AMOUNT OF PURCHASE NET AMOUNT OFFERING OFFERING AT THE OFFERING PRICE INVESTED PRICE PRICE --------------------- ---------- -------- ------------- STOCK AND STOCK/BOND FUNDS Less than $50,000...... 6.10% 5.75% 5.00% $50,000 but less than $100,000.............. 4.71 4.50 3.75 BOND FUNDS Less than $25,000...... 4.99 4.75 4.00 $25,000 but less than $50,000............... 4.71 4.50 3.75 $50,000 but less than $100,000.............. 4.17 4.00 3.25 STOCK, STOCK/BOND, AND BOND FUNDS $100,000 but less than $250,000. 3.63 3.50 2.75 $250,000 but less than $500,000. 2.56 2.50 2.00 $500,000 but less than $1,000,000. 2.04 2.00 1.60 $1,000,000 or more..... none none (see below)
Commissions of up to 1% will be paid to dealers who initiate and are responsible for purchases of $1 million or more, for purchases by any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees (paid pursuant to the fund's plan of distribution), and for purchases made at net asset value by certain retirement plans of organizations with collective retirement plan assets of $100 million or more as set forth in the statement of additional information (paid by American Funds Distributors). American Funds Distributors, at its expense (from a designated percentage of its income), will provide additional promotional incentives to dealers. Currently these incentives are limited to the top one hundred dealers who have sold shares of the fund or other funds in The American Funds Group. These incentive payments will be based on a pro rata share of a qualifying dealer's sales. Any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees or any other purchaser investing at least $1 million in shares of the fund (or in combination with shares of other funds in The American Funds Group other than the money market funds) may purchase shares at net asset value; however, a contingent deferred sales charge of 1% is imposed on certain redemptions within one year of the purchase. (See "Redeeming Shares--Contingent Deferred Sales Charge.") Qualified dealers currently are paid a continuing service fee not to exceed 0.25% of average net assets (0.15% in the case of the money market funds) annually in order to promote selling efforts and to compensate them for providing certain services. (See "Fund Organization and Management-- 16 - ------------------------------------------------------------------------------- Plan of Distribution.") These services include processing purchase and redemption transactions, establishing shareholder accounts and providing certain information and assistance with respect to the fund. NET ASSET VALUE PURCHASES The stock, stock/bond and bond funds may sell shares at net asset value to: (1) current or retired directors, trustees, officers and advisory board members of the funds managed by Capital Research and Management Company, employees of Washington Management Corporation, employees and partners of The Capital Group Companies, Inc. and its affiliated companies, certain family members of the above persons, and trusts or plans primarily for such persons; (2) current or retired registered representatives or full-time employees and their spouses and minor children of dealers having sales agreements with American Funds Distributors and plans for such persons; (3) companies exchanging securities with the fund through a merger, acquisition or exchange offer; (4) trustees or other fiduciaries purchasing shares for certain retirement plans of organizations with retirement plan assets of $100 million or more; (5) insurance company separate accounts; (6) accounts managed by subsidiaries of The Capital Group Companies, Inc.; and (7) The Capital Group Companies, Inc., its affiliated companies and Washington Management Corporation. Shares are offered at net asset value to these persons and organizations due to anticipated economies in sales effort and expense. REDUCING AGGREGATION Sales charge discounts are available for YOUR SALES certain aggregated investments. Qualifying investments CHARGE include those by you, your spouse and your children under the age of 21, if all parties are purchasing You and your shares for their own account(s), which may include immediate family purchases through employee benefit plan(s) such as an may combine IRA, individual-type 403(b) plan or single-participant investments to Keogh-type plan or by a business solely controlled by reduce your costs. these individuals (for example, the individuals own the entire business) or by a trust (or other fiduciary arrangement) solely for the benefit of these individuals. Individual purchases by a trustee(s) or other fiduciary(ies) may also be aggregated if the investments are (1) for a single trust estate or fiduciary account, including an employee benefit plan other than those described above or (2) made for two or more employee benefit plans of a single employer or of affiliated employers as defined in the Investment Company Act of 1940, again excluding employee benefit plans described above, or (3) for a diversified common trust fund or other diversified pooled account not specifically formed for the purpose of accumulating fund shares. Purchases made for nominee or street name accounts (securities held in the name of an investment dealer or another nominee such as a bank trust department instead of the customer) may not be aggregated with those made for other accounts and may not be aggregated with other nominee or street name accounts unless otherwise qualified as described above. 17 - ------------------------------------------------------------------------------- CONCURRENT PURCHASES To qualify for a reduced sales charge, you may combine concurrent purchases of two or more funds in The American Funds Group, except direct purchases of the money market funds. (Shares of the money market funds purchased through an exchange, reinvestment or cross-reinvestment from a fund having a sales charge do qualify.) For example, if you concurrently invest $25,000 in one fund and $25,000 in another, the sales charge would be reduced to reflect a $50,000 purchase. RIGHT OF ACCUMULATION The sales charge for your invest- ment may also be reduced by taking into account the current value of your existing holdings in The American Funds Group. Direct purchases of the money market funds are excluded. (See account application.) STATEMENT OF INTENTION You may reduce sales charges on all investments by meeting the terms of a statement of intention, a non-binding commitment to invest a certain amount in fund shares subject to a commission within a 13-month period. Five percent of the statement amount will be held in escrow to cover additional sales charges which may be due if your total investments over the statement period are insufficient to qualify for a sales charge reduction. (See account application.) YOU MUST LET YOUR INVESTMENT DEALER OR AMERICAN FUNDS SERVICE COMPANY KNOW IF YOU QUALIFY FOR A REDUCTION IN YOUR SALES CHARGE USING ONE OR ANY COMBINATION OF THE METHODS DESCRIBED ABOVE. SHAREHOLDER AUTOMATIC INVESTMENT PLAN You may make regular monthly SERVICES or quarterly investments through automatic charges to your bank account. Once a plan is established, your ac- The fund offers count will normally be charged by the 10th day of the you a valuable month during which an investment is made (or by the array of services 15th day of the month in the case of any retirement designed to plan for which Capital Guardian Trust Company--another increase the affiliate of The Capital Group Companies, Inc.--acts as convenience and trustee or custodian). flexibility of your investment-- AUTOMATIC REINVESTMENT Dividends and capital gain dis- services you can tributions are reinvested in additional shares at no use to alter your sales charge unless you indicate otherwise on the investment program account application. You also may elect to have divi- as your needs and dends and/or capital gain distributions paid in cash by circumstances informing the fund, American Funds Service Company or change. your investment dealer. CROSS-REINVESTMENT You may cross-reinvest dividends or dividends and capital gain distributions paid by one fund into another fund in The American Funds Group, subject to conditions outlined in the statement of ad- ditional information. Generally, to use this service the value of your account in the paying fund must equal at least $5,000. EXCHANGE PRIVILEGE You may exchange shares into other funds in The American Funds Group. Exchange purchases are subject to the minimum investment requirements of the fund purchased and no sales 18 - ------------------------------------------------------------------------------- charge generally applies. However, exchanges of shares from the money market funds are subject to applicable sales charges on the fund being purchased, unless the money market fund shares were acquired by an exchange from a fund having a sales charge, or by reinvestment or cross-reinvestment of dividends or capital gain distributions. You may exchange shares by writing to American Funds Service Company (see "Redeeming Shares"), by contacting your investment dealer, by using American FundsLine(R) (see "Shareholder Services--American FundsLine(R)" be- low), or by telephoning 800/421-0180 toll-free, telexing 3778108 (answerback CGAFSBR), faxing (see "Transfer Agent" above for the appropriate fax numbers) or telegraphing American Funds Service Company. (See "Telephone Redemptions and Exchanges" below.) Shares held in corporate-type retirement plans for which Capi- tal Guardian Trust Company serves as trustee may not be exchanged by telephone, telex, fax or telegraph. Ex- change redemptions and purchases are processed simulta- neously at the share prices next determined after the exchange order is received. (See "Purchasing Shares-- Share Price.") THESE TRANSACTIONS HAVE THE SAME TAX CONSEQUENCES AS ORDINARY SALES AND PURCHASES. AUTOMATIC EXCHANGES You may automatically exchange shares (in amounts of $50 or more) among any of the funds in The American Funds Group on any day (or pre- ceding business day if the day falls on a non-business day) of each month you designate. You must either meet the minimum initial investment requirement for the re- ceiving fund OR the originating fund's balance must be at least $5,000 and the receiving fund's minimum must be met within one year. AUTOMATIC WITHDRAWALS You may make automatic withdrawals of $50 or more as follows: five or more times per year if you have an account of $10,000 or more, or four or fewer times per year if you have an account of $5,000 or more. Withdrawals are made on or about the 15th day of each month you designate, and checks will be sent within seven days. (See "Other Important Things to Remember.") Additional investments in a withdrawal account must not be less than one year's scheduled withdrawals or $1,200, whichever is greater. However, additional investments in a withdrawal account may be inadvisable due to sales charges and tax liabilities. THESE SERVICES ARE AVAILABLE ONLY IN STATES WHERE THE FUND TO BE PURCHASED MAY BE LEGALLY OFFERED AND MAY BE TERMINATED OR MODIFIED AT ANY TIME UPON 60 DAYS' WRITTEN NOTICE. ACCOUNT STATEMENTS Your account is opened in accordance with your registration instructions. Transactions in the account, such as additional investments and dividend reinvestments, will be reflected on regular confirmation statements from American Funds Service Company. 19 - ------------------------------------------------------------------------------- AMERICAN FUNDSLINE(R) You may check your share balance, the price of your shares, or your most recent account transaction, redeem shares (up to $10,000 per fund, per account each day), or exchange shares around the clock with American FundsLine(R). To use this service, call 800/325-3590 from a TouchTone(TM) telephone. Redemptions and exchanges through American FundsLine(R) are subject to the conditions noted above and in "Redeeming Shares--Telephone Redemptions and Exchanges" below. You will need your fund number (see the list of funds in The American Funds Group under "Purchasing Shares--Investment Minimums and Fund Numbers"), personal identification number (the last four digits of your Social Security number or other tax identification number associated with your account) and account number. -------------------------------------------------------- REDEEMING By writing to Send a letter of instruction SHARES American specifying the name of the fund, the Funds Service number of shares or dollar amount to You may take money Company (at be sold, your name and account out of your the number. You should also enclose any account whenever appropriate share certificates you wish to you please. address redeem. For redemptions over $50,000 indicated and for certain redemptions of under "Fund $50,000 or less (see below), your Organization signature must be guaranteed by a and bank, savings association, credit Management-- union, or member firm of a domestic Transfer stock exchange or the National Agent") Association of Securities Dealers, Inc., that is an eligible guarantor institution. You should verify with the institution that it is an eligible guarantor prior to signing. Additional documentation may be required for redemption of shares held in corporate, partnership or fiduciary accounts. Notarization by a Notary Public is not an acceptable signature guarantee. -------------------------------------------------------- By contacting If you redeem shares through your your investment dealer, you may be charged investment for this service. SHARES HELD FOR YOU dealer IN YOUR INVESTMENT DEALER'S STREET NAME MUST BE REDEEMED THROUGH THE DEALER. -------------------------------------------------------- You may have You may use this option, provided the a redemption account is registered in the name of check sent to an individual(s), a UGMA/UTMA you by using custodian, or a non-retirement plan American trust. These redemptions may not FundsLine(R) exceed $10,000 per day, per fund or by account and the check must be made telephoning, payable to the shareholder(s) of telexing, record and be sent to the address of faxing, or record provided the address has been telegraphing used with the account for at least 10 American days. See "Transfer Agent" and Funds Service "Exchange Privilege" above for the Company appropriate telephone, fax, or telex (subject to number. the conditions noted in this section and in "Telephone Redemptions and Exchanges" below) -------------------------------------------------------- In the case Upon request (use the account of the money application for the money market market funds, funds) you may establish telephone you may have redemption privileges (which will redemptions enable you to have a redemption sent wired to your to your bank account) and/or check bank by writing privileges. If you request telephoning check writing privileges, you will be American provided with checks that you may use Funds Service to draw against your account. These Company checks may be made payable to anyone ($1,000 or you designate and must be signed by more) or by the authorized number of registered writing a shareholders exactly as indicated on check ($250 your checking account signature card. or more) -------------------------------------------------------- A SIGNATURE GUARANTEE IS NOT CURRENTLY REQUIRED FOR ANY REDEMPTION OF $50,000 OR LESS PROVIDED THE REDEMPTION CHECK IS MADE PAYABLE TO THE REGISTERED SHAREHOLDER(S) AND IS MAILED TO THE ADDRESS OF RECORD, PROVIDED THE ADDRESS HAS BEEN USED WITH THE ACCOUNT FOR AT LEAST 10 DAYS. 20 - ------------------------------------------------------------------------------- THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING SHARES--SHARE PRICE.") TELEPHONE REDEMPTIONS AND EXCHANGES By using the telephone (including American FundsLine(R)), telex, fax or telegraph redemption and/or exchange options, you agree to hold the fund, American Funds Service Company, any of its affiliates or mutual funds managed by such affiliates, and each of their respective directors, trustees, officers, employees and agents harmless from any losses, expenses, costs or liability (including attorney fees) which may be incurred in connection with the exercise of these privileges. Generally, all shareholders are automatically eligible to use these options. However, you may elect to opt out of these options by writing American Funds Service Company (you may reinstate them at any time also by writing American Funds Service Company). If American Funds Service Company does not employ reasonable procedures to confirm that the instructions received from any person with appropriate account information are genuine, the fund may be liable for losses due to unauthorized or fraudulent instructions. In the event that shareholders are unable to reach the fund by telephone because of technical difficulties, market conditions, or a natural disaster, redemption and exchange requests may be made in writing only. CONTINGENT DEFERRED SALES CHARGE A contingent deferred sales charge of 1% applies to certain redemptions within the first year on investments of $1 million or more and on any investment made with no initial sales charge by any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees. The charge is 1% of the lesser of the value of the shares redeemed (exclusive of reinvested dividends and capital gain distributions) or the total cost of such shares. Shares held for the longest period are assumed to be redeemed first for purposes of calculating this charge. The charge is waived for exchanges (except if shares acquired by exchange were then redeemed within 12 months of the initial purchase); for distributions from qualified retirement plans and other employee benefit plans; for distributions from 403(b) plans or IRAs due to death, disability or attainment of age 59 1/2; for tax-free returns of excess contributions to IRAs; for redemptions through certain automatic withdrawals not exceeding 10% of the amount that would otherwise be subject to the charge; and for redemptions in connection with loans made by qualified retirement plans. REINSTATEMENT PRIVILEGE You may reinvest proceeds from a redemption or a dividend or capital gain distribution without sales charge (any contingent deferred sales charge paid will be credited to your account) in any fund in The American Funds Group. Send a written 21 - ------------------------------------------------------------------------------- request and a check to American Funds Service Company within 90 days after the date of the redemption or distribution. Reinvestment will be at the next calculated net asset value after receipt. The tax status of a gain realized on a redemption will not be affected by exercise of the reinstatement privilege, but a loss may be nullified if you reinvest in the same fund within 30 days. If you redeem your shares within 90 days after purchase and the sales charge on the purchase of other shares is waived under the reinstatement privilege, the sales charge you previously paid for the shares may not be taken into account when you calculate your gain or loss on that redemption. OTHER IMPORTANT THINGS TO REMEMBER The net asset value for redemptions is determined as indicated under "Purchasing Shares--Share Price." Because each stock, stock/bond and bond fund's net asset value fluctuates, reflecting the market value of the fund's portfolio, the amount a shareholder receives for shares redeemed may be more or less than the amount paid for them. Redemption proceeds will not be mailed until sufficient time has passed to provide reasonable assurance that checks or drafts (including certified or cashier's checks) for shares purchased have cleared (which may take up to 15 calendar days from the purchase date). Except for delays relating to clearance of checks for share purchases or in extraordinary circumstances (and as permissible under the Investment Company Act of 1940), redemption proceeds will be paid on or before the seventh day following receipt of a proper redemption request. A fund may, with 60 days' written notice, close your account if, due to a redemption, the account has a value of less than the minimum required initial investment. (For example, a fund may close an account if a redemption is made shortly after a minimum initial investment is made.) RETIREMENT You may invest in the funds through various retirement PLANS plans including the following plans for which Capital Guardian Trust Company acts as trustee or custodian: IRAs, Simplified Employee Pension plans, 403(b) plans and Keogh- and corporate-type business retirement plans. For further information about any of the plans, agreements, applications and annual fees, contact American Funds Distributors or your investment dealer. To determine which retirement plan is appropriate for you, please consult your tax adviser. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS INVESTMENTS FOR RETIREMENT PLANS. FOR MORE INFORMATION, PLEASE REFER TO THE ACCOUNT APPLICATION OR THE STATEMENT OF ADDITIONAL INFORMATION. IF YOU HAVE ANY QUESTIONS ABOUT ANY OF THE SHAREHOLDER SERVICES DESCRIBED HEREIN OR YOUR ACCOUNT, PLEASE CONTACT YOUR INVESTMENT DEALER OR AMERICAN FUNDS SERVICE COMPANY. [RECYCLE LOGO] This prospectus has been printed on recycled paper that meets the guidelines of the United States Environmental Protection Agency 22 PROSPECTUS for Eligible Retirement Plans THE BOND FUND OF AMERICA(SM) AN OPPORTUNITY FOR CURRENT INCOME AND PRESERVATION OF CAPITAL THROUGH A DIVERSIFIED PORTFOLIO OF BONDS [LOGO OF THE AMERICAN FUNDS GROUP(R)] March 1, 1995 THE BOND FUND OF AMERICA, INC. 333 South Hope Street Los Angeles, CA 90071 The fund seeks to provide as high a level of current income as is consistent with the preservation of capital by investing primarily in bonds. This prospectus relates only to shares of the fund offered without a sales charge to eligible retirement plans. For a prospectus regarding shares of the fund to be acquired otherwise, contact the Secretary of the fund at the address indicated above. This prospectus presents information you should know before investing in the fund. It should be retained for future reference. You may obtain the statement of additional information for the fund dated March 1, 1995, which contains the fund's financial statements, without charge, by writing to the Secretary of the fund at the above address or telephoning 800/421-0180. These requests will be honored within three business days of receipt. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED, GUARANTEED, OR ENDORSED BY THE U.S. GOVERNMENT, ANY BANK, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, ENTITY OR PERSON. THE PURCHASE OF FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 08-010-0395 RP TABLE OF CONTENTS Summary of Expenses.................... 3 Financial Highlights................... 4 Investment Objective and Policies...... 4 Certain Securities and Investment Tech- niques................................ 6 Investment Results..................... 10 Dividends, Distributions and Taxes..... 10 Fund Organization and Management....... 11 Purchasing Shares...................... 13 Shareholder Services................... 14 Redeeming Shares....................... 14
2 - ------------------------------------------------------------------------------- SUMMARY OF EXPENSES Average annual expenses paid over a 10-year period would be approximately $9 per year, assuming a $1,000 investment and a 5% annual return. This table is designed to help you understand costs of investing in the fund. These are historical expenses; your actual expenses may vary. SHAREHOLDER TRANSACTION EXPENSES Certain retirement plans may purchase shares of the fund with no sales charge./1/ The fund also has no sales charge on reinvested dividends, deferred sales charge, redemption fees or exchange fees. ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets) Management fees....................................................... 0.37% 12b-1 expenses........................................................ 0.22%/2/ Other expenses (including audit, legal, shareholder services, transfer agent and custodian expenses)........................................ 0.10% Total fund operating expenses......................................... 0.69%
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------- ------ ------- ------- -------- You would pay the following cumulative expenses on a $1,000 investment, assuming a 5% annual return./3/ $7 $22 $38 $86
/1/ Retirement plans of organizations with $100 million or more in collective retirement plan assets may purchase shares of the fund with no sales charge. Any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees or any other plan that invests at least $1 million in shares of the fund (or in combination with shares of other funds in The American Funds Group other than the money market funds) may purchase shares at net asset value; however, a contingent deferred sales charge of 1% applies on certain redemptions within 12 months following such purchases. (See "Redeeming Shares--Contingent Deferred Sales Charge.") /2/ These expenses may not exceed 0.25% of the fund's average net assets annually. (See "Fund Organization and Management--Plan of Distribution.") Due to these distribution expenses, long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charge permitted by the National Association of Securities Dealers. /3/ Use of this assumed 5% return is required by the Securities and Exchange Commission; it is not an illustration of past or future investment results. THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. 3 FINANCIAL The following information has been audited by Deloitte HIGHLIGHTS & Touche LLP, independent accountants, whose unquali- (For a share fied report covering each of the most recent five years outstanding is included in the statement of additional information. throughout the This information should be read in conjunction with the fiscal year) financial statements and accompanying notes which are included in the statement of additional information.
- --------------------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------- 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, Begin- ning of Year........... $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 $14.01 $12.34 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income.. 1.05 1.09 1.15 1.21 1.24 1.31 1.28 1.28 1.38 1.44 Net realized and unrealized gain (loss) on investments........ (1.76) .84 .34 1.28 (.84) (.02) .08 (1.02) .66 1.67 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total from investment operations........... (0.71) 1.93 1.49 2.49 .40 1.29 1.36 .26 2.04 3.11 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net in- vestment income....... (1.05) (1.08) (1.16) (1.18) (1.24) (1.30) (1.26) (1.23) (1.44) (1.44) Distributions from net realized gains........ -- (.39) (.04) -- -- -- -- (.10)/1/ (.40) -- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total distributions... (1.05) ( 1.47) (1.20) (1.18) (1.24) (1.30) (1.26) (1.33) (1.84) (1.44) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, End of Year................... $12.69 $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 $14.01 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== Total Return/2/ (5.02)% 14.14% 11.34% 21.04% 3.27% 10.13% 10.70% 1.96% 15.17% 26.61% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in millions)......... $4,941 $5,285 $3,917 $2,859 $1,945 $1,481 $1,021 $ 825 $ 694 $ 451 Ratio of expenses to average net assets.... .69% .71% .73% .77% .76% .76% .66% .59% .58% .61% Ratio of net income to average net assets.... 7.77% 7.53% 8.36% 9.28% 9.70% 9.73% 9.54% 9.45% 9.39% 10.80% Portfolio turnover rate.................. 57.0% 44.7% 49.7% 56.5% 59.9% 64.2% 93.0% 93.0% 107.8% 142.3%
- -------- /1/ Represents only net short-term realized gains. /2/ Calculated with no sales charge. INVESTMENT The fund's investment objective is to provide as high a OBJECTIVE level of current income as is consistent with the pres- AND POLICIES ervation of capital. The fund invests substantially all of its assets in marketable corporate debt securities, The fund's goal is U.S. Government securities, mortgage-related securi- to provide you ties, other asset-backed securities and cash or money with high current market instruments. Normally, at least 65% of the incomeand fund's assets will be invested in bonds. (For this pur- conservationof pose, bonds are considered any debt securities having capital. initial maturities in excess of one year.) At least 60% of the value of the fund's assets, mea- sured at the time of any purchase, must be invested in the following categories: . marketable corporate debt securities such as bonds rated at the time of purchase within the three highest investment grade ratings (A or better) assigned by Moody's Investors Service, Inc. or Standard & Poor's Corporation (all ratings discussed below refer to those assigned by these two rating agencies) or, if not rated by either of these rating agencies, determined by the fund's investment adviser, Capital Research and Management Company, as being of investment quality equivalent to securities rated A or better; . U.S. Government securities including (1) direct obligations of the U.S. Treasury (such as Treasury bills, notes and bonds), (2) obligations guaranteed as to principal and interest by the U.S. Treasury such as 4 - ------------------------------------------------------------------------------- Government National Mortgage Association certificates (described below) and Federal Housing Administration debentures, and (3) securities issued by U.S. Government instrumentalities and certain federal agencies that are neither direct obligations of, nor guaranteed by, the Treasury; . mortgage-related securities rated A or better or unrated securities that are determined to be of equivalent quality of (1) governmental issuers, including Government National Mortgage Association certificates, which are securities representing part ownership of a pool of mortgage loans on which timely payment of interest and principal is guaranteed by the U.S. Government, and securities issued and guaranteed as to the payment of interest and principal by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation (but not backed by the U.S. Government); (2) private issuers, including mortgage pass-through certificates or mortgage-backed bonds; and (3) the governmental issuers mentioned above or private issuers, including collateralized mortgage obligations and real estate mortgage investment conduits which are issued in portions or tranches with varying maturities and characteristics; some tranches may only receive the interest paid on the underlying mortgages (IOs) and others may only receive the principal payments (POs); the values of IOs and POs are extremely sensitive to interest rate fluctuations and prepayment rates, and IOs are also subject to the risk of early prepayment of the underlying mortgages which will substantially reduce or eliminate interest payments (see the statement of additional information for more about these securities); . other asset-backed securities rated A or better or unrated securities that are determined to be of equivalent quality (unrelated to mortgage loans) such as securities whose assets consist of a pool of motor vehicle retail installment sales contracts and security interests in the vehicles securing the contracts or a pool of credit card loan receivables (see the statement of additional information for more about these securities); . cash or money market instruments, including commercial bank obligations (certificates of deposit, which are interest-bearing time deposits; bankers acceptances, which are time drafts on a commercial bank where the bank accepts an irrevocable obligation to pay at maturity; and demand or time deposits), and commercial paper (short-term notes with maturities of up to nine months issued by corporations or government bodies). The remaining 40% of the fund's assets, measured at the time of purchase, may be invested in debt securities rated below A or unrated securities that are determined to be of equivalent quality, including marketable corpo- rate debt securities, mortgage-related securities and other asset-backed securities. These securities may be rated as low as Ca by Moody's or CC by S&P. However, se- curities rated Ba or BB or below or unrated securities that are determined to be of equivalent quality (com- monly known as "junk" or "high-yield, high-risk" bonds) will represent less than 35% of the fund's net assets and are subject to special review before purchase. 5 - ------------------------------------------------------------------------------- The fund may from time to time invest in fixed-income securities of corporations outside the U.S. or govern- mental entities, and the fund may purchase or sell var- ious currencies on either a spot or forward basis in connection with these investments. The average monthly composition of the fund's portfolio based on the higher of the Moody's or S&P ratings for the fiscal year ended December 31, 1994 was as fol- lows: bonds--Aaa/AAA-41.04%; Aa/AA-3.78%; A/A-6.61%; Baa/BBB-13.46%; Ba/BB-9.34%; B/B-11.3%, and Caa/CCC- 0.8%. Other investments, including non-rated invest- ments, equity-type securities and cash or cash equiva- lents amounted to 2.35%, 2.24% and 9.08%, respectively. The fund's investment restrictions (which are described in the statement of additional information) and objec- tive cannot be changed without shareholder approval. All other investment practices may be changed by the fund's board. ACHIEVEMENT OF THE FUND'S INVESTMENT OBJECTIVE CANNOT, OF COURSE, BE ASSURED DUE TO THE RISK OF CAPITAL LOSS FROM FLUCTUATING PRICES INHERENT IN ANY INVESTMENT IN SECURITIES. CERTAIN SECURITIES RISKS OF INVESTING IN BONDS The market values of fixed- AND INVESTMENT income securities generally vary inversely with the TECHNIQUES level of interest rates--when interest rates rise, their values will tend to decline and vice versa. The Investing in bonds magnitude of these changes generally will be greater involves certain the longer the remaining maturity of the security. risks. Fluctuations in the value of the fund's investments will be reflected in its net asset value per share; typically declining when interest rates rise. High-yield, high-risk bonds (bonds rated Ba or BB or below) may be subject to greater market fluctuations and to greater risk of loss of income and principal due to default by the issuer than are higher-rated bonds. Their values tend to reflect short-term corporate, eco- nomic and market developments and investor perceptions of the issuer's credit quality to a greater extent than lower yielding higher-rated bonds. In addition, it may be more difficult to dispose of, or to determine the value of, high-yield, high-risk bonds. Bonds rated Ba or BB are considered speculative. Bonds rated Ca or CC are described by the ratings agencies as "speculative in a high degree; often in default or [having] other marked shortcomings." See the statement of additional information for a complete description of the bond rat- ings. Capital Research and Management Company attempts to re- duce the risks described above through diversification of the portfolio and by credit analysis of each issuer as well as by monitoring broad economic trends and cor- porate and legislative developments. RISKS OF INVESTING IN VARIOUS COUNTRIES The fund may invest in securities of issuers located outside the United States which may be denominated in currencies other than the U.S. dollar. Companies located outside the U.S. operate under different accounting, auditing and financial reporting standards and practices and regulatory requirements that may 6 - ------------------------------------------------------------------------------- be less rigorous than U.S. companies. There may be less information publicly available about companies located outside the U.S. Additionally, specific local political and economic factors must be evaluated in making these investments including trade balances and imbalances; and related economic policies; expropriation or confis- catory taxation; limitations on the removal of funds or other assets; political or social instability; the di- verse structure and liquidity of the various securities markets; and nationalization policies of governments around the world. Additional costs could be incurred in connection with the fund's investment activities out- side the U.S. Increased custodian costs as well as ad- ministrative difficulties (for example, delays in clearing and settling portfolio transactions) may be associated with the maintenance of assets in certain jurisdictions. The fund may invest to a limited extent in countries that are considered developing countries, and, in those cases the degree of risk described above may be greater. However, in the opinion of Capital Re- search and Management Company, global investing also can reduce certain of these risks through greater di- versification opportunities. CURRENCY TRANSACTIONS The fund has the ability to hold a portion of its assets in currencies other than the U.S. dollar and to enter into spot or forward currency contracts to facilitate transactions and/or to protect against changes in currency exchange rates. Although this strategy could minimize the risk of loss due to a decline in the value of the hedged currency, it could also limit any potential gain which might result from an increase in the value of the currency. (See "Cur- rency Transactions" in the statement of additional in- formation.) WHEN-ISSUED SECURITIES, FIRM COMMITMENT AGREEMENTS AND "ROLL" TRANSACTIONS The fund may purchase securities on a delayed delivery or "when-issued" basis and enter into firm commitment agreements (transactions whereby the payment obligation and interest rate are fixed at the time of the transaction but the settlement is de- layed). The fund as purchaser assumes the risk of any decline in value of the security beginning on the date of the agreement or purchase. The fund also may enter into "roll" transactions, which are the sale of GNMA certificates or other securities together with a com- mitment (for which the fund typically receives a fee) to purchase similar, but not identical, securities at a later date. As the fund's aggregate commitments under these transactions increase, the opportunity for lever- age similarly may increase; however, it is not the in- tent of the fund to engage in these transactions for leveraging purposes. The fund will segregate liquid assets such as cash, U.S. Government securities or other appropriate high- grade debt obligations in an amount sufficient to meet its payment obligations in these transactions. Although these transactions will not be entered into for leveraging purposes, to the extent the fund's aggregate commitments under these transactions exceed its hold- ings of cash and securities that do not fluctuate in value (such as short-term money market instruments), the fund temporarily will be in a 7 - ------------------------------------------------------------------------------- leveraged position (i.e., it will have an amount greater than its net assets subject to market risk). Should market values of the fund's portfolio securities decline while the fund is in a leveraged position, greater depreciation of its net assets would likely oc- cur than were it not in such a position. The fund will not borrow money to settle these transactions and, therefore, will liquidate other portfolio securities in advance of settlement if necessary to generate addi- tional cash to meet its obligations thereunder. REPURCHASE AGREEMENTS The fund may enter into repur- chase agreements, under which it buys a security and obtains a simultaneous commitment from the seller to repurchase the security at a specified time and price. The seller must maintain with the fund's custodian col- lateral equal to at least 100% of the repurchase price including accrued interest as monitored daily by Capi- tal Research and Management Company. If the seller un- der the repurchase agreement defaults, the fund may in- cur a loss if the value of the collateral securing the repurchase agreement has declined and may incur dispo- sition costs in connection with liquidating the collat- eral. If bankruptcy proceedings are commenced with re- spect to the seller, liquidation of the collateral by the fund may be delayed or limited. LOAN PARTICIPATIONS The fund may invest, subject to an overall 10% limit on loans, in loan participations, typically made by a syndicate of banks to U.S. and non- U.S. corporate or governmental borrowers for a variety of purposes. The underlying loans may be secured or unsecured, and will vary in term and legal structure. When purchasing such instruments the fund may assume the credit risks associated with the original bank lender as well as the credit risks associated with the borrower. Investments in loan participations present the possibility that the fund could be held liable as a co-lender under emerging legal theories of lender lia- bility. In addition, if the loan is foreclosed, the fund could be part owner of any collateral, and could bear the costs and liabilities of owning and disposing of the collateral. Loan participations are generally not rated by major rating agencies and may not be pro- tected by the securities laws. Also, loan participa- tions are generally considered to be illiquid. PRIVATE PLACEMENTS Private placements may be either purchased from another institutional investor that originally acquired the securities in a private place- ment or directly from the issuers of the securities. Generally, securities acquired in private placements are subject to contractual restrictions on resale and may not be resold except pursuant to a registration statement under the Securities Act of 1933 or in reli- ance upon an exemption from the registration require- ments under the Act, for example, private placements sold pursuant to Rule 144A. Accordingly, any such obli- gation will be deemed illiquid unless it has been spe- cifically determined to be liquid under procedures adopted by the fund's board of directors, and the fund may incur certain additional costs in disposing of such securities. In determining whether these securities are liquid, factors such as the frequency and volume of trading and the commitment of dealers to make 8 - ------------------------------------------------------------------------------- markets will be considered. Additionally, the liquidity of any particular security will depend on such factors as the availability of "qualified" institutional in- vestors and the extent of investor interest in the se- curity, which can change from time to time. INVERSE FLOATING RATE NOTES The fund may invest to a limited extent in inverse floating rate notes (a type of derivative instrument). These notes have rates that move in the opposite direction of prevailing interest rates; thus, a change in prevailing interest rates will often result in a greater change in the instruments' interest rates. As a result, these instruments may have a greater degree of volatility than other types of in- terest-bearing securities. MATURITY The maturity composition of the fund's portfo- lio of fixed-income securities will be adjusted in re- sponse to market conditions and expectations. There are no restrictions on the maturity composition of the portfolio, although it is anticipated that the fund normally will be invested substantially in intermedi- ate-term (3 to 10 years to maturity) and long-term (over 10 years to maturity) securities. MULTIPLE PORTFOLIO COUNSELOR SYSTEM The basic investment philosophy of Capital Research and Management Company is to seek fundamental values at reasonable prices, using a system of multiple portfolio counselors in managing mutual fund assets. Under this system the portfolios of the managed funds are divided into segments which are usually managed by individual counselors. Each counselor decides how the segment will be invested (within the limits provided by the fund's objective and policies and by Capital Research and Management Company's investment committee). In addition, Capital Research and Management Company's research professionals make investment decisions with respect to a portion of the fund's portfolio segments. The primary individual portfolio counselors for the fund are listed below.
YEARS OF EXPERIENCE AS INVESTMENT PROFESSIONAL (APPROXIMATE) YEARS OF EXPERIENCE AS WITH CAPITAL PORTFOLIO RESEARCH AND PORTFOLIO COUNSELOR FOR MANAGEMENT COUNSELORS FOR THE BOND FUND COMPANY OR THE BOND FUND OF AMERICA ITS TOTAL OF AMERICA PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS - ----------------------------------------------------------------------------------------------------------------- Abner D. Goldstine President and Director Since the fund began operations 28 years 43 years of the fund. Senior Vice in 1974 President and Director, Capital Research and Management Company - ----------------------------------------------------------------------------------------------------------------- Richard T. Schotte Senior Vice President of 17 years 17 years 28 years the fund. Senior Vice President, Capital Research and Management Company - ----------------------------------------------------------------------------------------------------------------- John H. Smet Vice President of the 6 years 12 years 13 years fund. Vice President, Capital Research and Management Company - -----------------------------------------------------------------------------------------------------------------
The fund began operations on May 28, 1974. 9 - -------------------------------------------------------------------------------- INVESTMENT RESULTS The fund may from time to time compare its investment results to various indices or other mutual funds in re- The fund has ports to shareholders, sales literature and advertise- averaged a total ments. The results may be calculated on a total return return (at no and/or yield basis for various periods, with or without sales charge) of sales charges. Results calculated without a sales charge 10.29% a year over will be higher. Total returns assume the reinvestment of its lifetime all dividends and capital gain distributions. (May 28, 1974 through December The fund's yield and the average annual total returns 31, 1994). are calculated in accordance with Securities and Exchange Commission requirementswith no sales charge. The fund's yield for the 30-day period endedDecember 31, 1994 was 8.35%. The fund's total return over the past 12 months and average annual total returns over the past five-year and ten-year periods, as of December 31, 1994, were -5.02%, 8.57% and 10.58%, respectively. Of course, past results are not an indication of future results. Further information regarding the fund's investment results is contained in the fund's annual report which may be obtained without charge by writing to the Secretary of the fund at the address indicated on the cover of this prospectus. DIVIDENDS, DIVIDENDS AND DISTRIBUTIONS The fund declares dividends DISTRIBUTIONS AND from its net investment income daily and distributes the TAXES accrued dividends to shareholders each month. Dividends begin accruing one day after payment for shares is re- Income ceived by the fund or American Funds Service Company. distributions are All capital gains, if any, are distributed annually, made each month. usually in December. When a capital gain is declared, the net asset value per share is reduced by the amount of the payment. The terms of your plan will govern how your plan may receive distributions from the fund. Generally, periodic distributions from the fund to your plan are reinvested in additional fund shares, although your plan may permit fund distributions from net investment income to be received by you in cash while reinvesting capital gains distributions in additional shares or all fund distributions to be received in cash. Unless you select another option, all distributions will be reinvested in additional fund shares. FEDERAL TAXES The fund intends to operate as a "regu- lated investment company" under the Internal Revenue Code. For any fiscal year in which the fund so qualifies and distributes to shareholders all of its net invest- ment income and net capital gains, the fund itself is relieved of federal income tax. The tax treatment of re- demptions from a retirement plan may differ from redemp- tions from an ordinary shareholder account. Please see the statement of additional information and your tax adviser for further information. 10 - ------------------------------------------------------------------------------- FUND FUND ORGANIZATION AND VOTING RIGHTS The fund, an open- ORGANIZATION end, diversified management investment company, was or- AND MANAGEMENT ganized as a Maryland corporation in 1973. The fund's board supervises fund operations and performs duties The fund is a required by applicable state and federal law. Members member of The of the board who are not employed by Capital Research American Funds and Management Company or its affiliates are paid cer- Group, which is tain fees for services rendered to the fund as de- managed by one of scribed in the statement of additional information. the largest and They may elect to defer all or a portion of these fees most experienced through a deferred compensation plan in effect for the investment fund. Shareholders have one vote per share owned and, advisers. at the request of the holders of at least 10% of the shares, the fund will hold a meeting at which any mem- ber of the board could be removed by a majority vote. There will not usually be a shareholder meeting in any year except, for example, when the election of the board is required to be acted upon by shareholders un- der the Investment Company Act of 1940. THE INVESTMENT ADVISER Capital Research and Management Company, a large and experienced investment management organization founded in 1931, is the investment adviser to the fund and other funds, including those in The American Funds Group. Capital Research and Management Company is located at 333 South Hope Street, Los Ange- les, CA 90071 and at 135 South State College Boulevard, Brea, CA 92621. Capital Research and Management Company manages the investment portfolio and business affairs of the fund and receives a fee at the annual rate of 0.30% on the first $60 million of the fund's net as- sets, plus 0.21% on net assets in excess of $60 million to $1 billion, plus 0.18% on assets over $1 billion to $3 billion, plus 0.16% on assets over $3 billion, plus 3% of the first $5.4 million of annual gross income, plus 2.25% of annual gross income over $5.4 million. Assuming net assets of $5 billion and gross investment income levels of 8%, 9%, 10%, 11%, 12% and 13%, manage- ment fees would be .36%, .38%, .40%, .43%, .45% and .47%, respectively. Capital Research and Management Company is a wholly owned subsidiary of The Capital Group Companies, Inc. (formerly "The Capital Group, Inc."), which is located at 333 South Hope Street, Los Angeles, CA 90071. The research activities of Capital Research and Management Company are conducted by affiliated companies which have offices in Los Angeles, San Francisco, New York, Washington, D.C., London, Geneva, Singapore, Hong Kong and Tokyo. Capital Research and Management Company and its affiliated companies have adopted a personal investing policy that is consistent with the recommendations contained in the report dated May 9, 1994 issued by the Investment Company Institute's Advisory Group on Personal Investing. (See the statement of additional information.) 11 - ------------------------------------------------------------------------------- PORTFOLIO TRANSACTIONS Orders for the fund's portfolio securities transactions are placed by Capital Research and Management Company, which strives to obtain the best available prices, taking into account the costs and quality of executions. Fixed-income securities are generally traded on a "net" basis with a dealer acting as principal for its own account without a stated com- mission, although the price of the security usually in- cludes a profit to the dealer. In underwritten offer- ings, securities are usually purchased at a fixed price which includes an amount of compensation to the under- writer, generally referred to as the underwriter's con- cession or discount. On occasion, securities may be purchased directly from an issuer, in which case no commissions or discounts are paid. Subject to the above policy, when two or more brokers are in a position to offer comparable prices and execu- tions, preference may be given to brokers that have sold shares of the fund or have provided investment re- search, statistical, and other related services for the benefit of the fund and/or of other funds served by Capital Research and ManagementCompany. PRINCIPAL UNDERWRITER American Funds Distributors, Inc., a wholly owned subsidiary of Capital Research and Management Company, is the principal underwriter of the fund's shares. American Funds Distributors is located at 333 South Hope Street, Los Angeles, CA 90071, 135 South State College Boulevard, Brea, CA 92621, 8000 IH- 10 West, San Antonio, TX 78230, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240, and 5300 Robin Hood Road, Norfolk, VA 23513. Telephone conversations with American Funds Distributors may be recorded or moni- tored for verification, recordkeeping and quality as- surance purposes. PLAN OF DISTRIBUTION The fund has a plan of distribu- tion or "12b-1 Plan" under which it may finance activi- ties primarily intended to sell shares, provided the categories of expenses are approved in advance by the board and the expenses paid under the plan were in- curred within the last 12 months and accrued while the plan is in effect. Expenditures by the fund under the plan may not exceed 0.25% of its average net assets an- nually (all of which may be for service fees). TRANSFER AGENT American Funds Service Company, 800/421- 0180, a wholly owned subsidiary of Capital Research and ManagementCompany, is the transfer agent and performs shareholder service functions. American Funds Service Company is located at 333 South Hope Street, Los Angeles, CA 90071, 135 South State College Boulevard, Brea, CA 92621, 8000 IH-10 West, San Antonio, TX 78230, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240, and 5300 Robin Hood Road, Norfolk, VA 23513. It was paid a fee of $3,751,000 for the fiscal year ended December 31, 1994. Telephone conversations with American Funds Service Company may be recorded or monitored for verification, recordkeeping and quality assurance purposes. 12 - ------------------------------------------------------------------------------- PURCHASING ALL ORDERS TO PURCHASE SHARES MUST BE MADE THROUGH YOUR SHARES RETIREMENT PLAN. FOR MORE INFORMATION ABOUT HOW TO PURCHASE SHARES OF THE FUND THROUGH YOUR PLAN OR LIMITATIONS ON THE AMOUNT THAT MAY BE PURCHASED, PLEASE CONSULT WITH YOUR EMPLOYER. Shares are sold to eligible retirement plans at the net asset value per share next determined after receipt of an order by the fund or American Funds Service Company. Orders must be received before the close of regular trading on the New York Stock Exchange in order to receive that day's net asset value. Plans of organizations with collective retirement plan assets of $100 million or more may purchase shares at net asset value. In addition, any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees or any other plan that invests at least $1 million in shares of the fund (or in combination with shares of other funds in The American Funds Group other than the money market funds) may purchase shares at net asset value; however, a contingent deferred sales charge of 1% is imposed on certain redemptions within one year of such purchase. (See "Redeeming Shares--Contingent Deferred Sales Charge.") Plans may also qualify to purchase shares at net asset value by completing a statement of intention to purchase $1 million in fund shares subject to a commission over a maximum of 13 consecutive months. Certain redemptions of such shares may also be subject to a contingent deferred sales charge as described above. (See the statement of additional information.) American Funds Distributors, at its expense, (from a designated percentage of its income), will provide additional promotional incentives to dealers. Currently these incentives are limited to the top one hundred dealers who have sold shares of the fund or other funds in The American Funds Group. The incentive payments will be based on a pro rata share of a qualifying dealer's sales. Qualified dealers currently are paid a continuing serv- ice fee not to exceed 0.25% of average net assets (0.15% in the case of the money market funds) annually in order to promote selling efforts and to compensate them for providing certain services. (See "Fund Organi- zation and Management--Plan of Distribution.") These services include processing purchase and redemption transactions, establishing shareholder accounts and providing certain information and assistance with re- spect to the fund. Shares of the fund are offered to other shareholders pursuant to another prospectus at public offering prices that may include an initial sales charge. SHARE PRICE Shares are offered to eligible retirement plans at the net asset value after the order is received by the fund or American Funds Service Company. In the case of orders sent directly to the fund or American Funds Service Company, an investment dealer must be indicated. Dealers are responsible for promptly transmitting orders. (See the statement of additional information under "Purchase of Shares--Price of Shares.") 13 - ------------------------------------------------------------------------------- The fund's net asset value per share is determined as of the close of trading (currently 4:00 p.m., New York time) on each day the New York Stock Exchange is open. The current value of the fund's total assets, less all liabilities, is divided by the total number of shares outstanding and the result, rounded to the nearer cent, is the net asset value per share. SHAREHOLDER Subject to any restrictions contained in your plan, you SERVICES can exchange your shares for shares of other funds in The American Funds Group which are offered through the plan at net asset value. In addition, again depending on your plan, you may be able to exchange shares automatically orcross-reinvest dividends in shares of other funds. Contact your plan administrator/trustee regarding how to use these services. Also, see the fund's statement of additional information for a description of these and other services that may be available through your plan. These services are available only in states where the fund to be purchased may be legally offered and may be terminated or modified at any time upon 60 days' written notice. REDEEMING SHARES Subject to any restrictions imposed by your plan, you can sell your shares through the plan to the fund any day the New York Stock Exchange is open. For more information about how to sell shares of the fund through your retirement plan, including any charges that may be imposed by the plan, please consult with your employer. -------------------------------------------------------- By Your plan administrator/trustee must contacting send a letter of instruction your plan specifying the name of the fund, the administrator/ number of shares or dollar amount to trustee be sold, and, if applicable, your name and account number. For your protection, if you redeem more than $50,000, the signatures of the registered owners or their legal representatives must be guaranteed by a bank, savings association, credit union, or member firm of a domestic stock exchange or the National Association of Securities Dealers, Inc., that is an eligible guarantor institution. Your plan administrator/trustee should verify with the institution that it is an eligible guarantor prior to signing. Additional documentation may be required to redeem shares from certain accounts. Notarization by a Notary Public is not an acceptable signature guarantee. -------------------------------------------------------- By Shares may also be redeemed through contacting an investment dealer; however, you or an your plan may be charged for this investment service. SHARES HELD FOR YOU IN AN dealer INVESTMENT DEALER'S STREET NAME MUST BE REDEEMED THROUGH THE DEALER. 14 - ------------------------------------------------------------------------------- THE PRICE YOU RECEIVE FOR THE SHARES YOU REDEEM IS THE NET ASSET VALUE NEXT DETERMINED AFTER YOUR ORDER AND ALL REQUIRED DOCUMENTATION ARE RECEIVED BY THE FUND OR AMERICAN FUNDS SERVICE COMPANY. (SEE "PURCHASING SHARES--SHARE PRICE.") CONTINGENT DEFERRED SALES CHARGE A contingent deferred sales charge of 1% applies to certain redemptions within the first year on investments of $1 million or more and on any investment made with no initial sales charge by any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees. The charge is 1% of the lesser of the value of the shares redeemed (exclusive of reinvested dividends and capital gain distributions) or the total cost of such shares. Shares held for the longest period are assumed to be redeemed first for purposes of calculating this charge. The charge is waived for exchanges (except if shares acquired by exchange were then redeemed within 12 months of the initial purchase); for distributions from qualified retirement plans and other employee benefit plans; and for redemptions in connection with loans made by qualified retirement plans. OTHER IMPORTANT THINGS TO REMEMBER The net asset value for redemptions is determined as indicated under "Pur- chasing Shares--Share Price." Because the fund's net asset value fluctuates, reflecting the market value of the portfolio, the amount you receive for shares re- deemed may be more or less than the amount paid for them. Redemption proceeds will not be mailed until sufficient time has passed to provide reasonable assurance that checks or drafts (including certified or cashier's checks) for shares purchased have cleared (which may take up to 15 calendar days from the purchase date). Except for delays relating to clearance of checks for share purchases or in extraordinary circumstances (and as permissible under the Investment Company Act of 1940), redemption proceeds will be paid on or before the seventh day following receipt of a proper redemp- tion request. [RECYCLE LOGO] This prospectus has been printed on recycled paper that meets the guidelines of the United States Environmental Protection Agency 15 ---------------------------------------------------------- THIS PROSPECTUS RELATES ONLY TO SHARES OF THE FUND OFFERED WITHOUT A SALES CHARGE TO ELIGIBLE RETIREMENT PLANS. FOR A PROSPECTUS REGARDING SHARES OF THE FUND TO BE ACQUIRED OTHERWISE, CONTACT THE SECRETARY OF THE FUND AT THE ADDRESS INDICATED ON THE FRONT. ---------------------------------------------------------- THE BOND FUND OF AMERICA, INC. PART B STATEMENT OF ADDITIONAL INFORMATION MARCH 1, 1995 This document is not a prospectus but should be read in conjunction with the current Prospectus of The Bond Fund of America, Inc. (the "fund") dated March 1, 1995. The Prospectus may be obtained from your investment dealer or financial planner or by writing to the fund at the following address: The Bond Fund of America, Inc. Attention: Secretary 333 South Hope Street Los Angeles, CA 90071 (213) 486-9200 The fund has two forms of prospectuses. Each reference to the prospectus in this Statement of Additional Information includes both of the fund's prospectuses. Shareholders who purchase shares at net asset value through eligible retirement plans should note that not all of the services or features described below may be available to them, and they should contact their employer for details. TABLE OF CONTENTS
ITEM PAGE NO. DESCRIPTION OF CERTAIN SECURITIES 2 INVESTMENT RESTRICTIONS 5 FUND OFFICERS AND DIRECTORS 7 MANAGEMENT 10 DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES 12 PURCHASE OF SHARES 15 SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES 17 REDEMPTION OF SHARES 18 EXECUTION OF PORTFOLIO TRANSACTIONS 18 GENERAL INFORMATION 19 INVESTMENT RESULTS 20 DESCRIPTION OF BOND RATINGS 25 FINANCIAL STATEMENTS ATTACHED
DESCRIPTION OF CERTAIN SECURITIES CERTAIN RISK FACTORS RELATING TO HIGH-YIELD, HIGH-RISK BONDS SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES - High-yield, high-risk bonds can be sensitive to adverse economic changes and corporate developments. During an economic downturn or substantial period of rising interest rates, highly leveraged issuers may experience financial stress that would adversely affect their ability to service their principal and interest payment obligations, to meet projected business goals, and to obtain additional financing. If the issuer of a bond defaulted on its obligations to pay interest or principal or entered into bankruptcy proceedings, the fund may incur losses or expenses in seeking recovery of amounts owed to it. In addition, periods of economic uncertainty and changes can be expected to result in increased volatility of market prices and yields of high-yield, high-risk bonds. PAYMENT EXPECTATIONS - High-yield, high-risk bonds may contain redemption or call provisions. If an issuer exercised these provisions in a declining interest rate market, the fund would have to replace the security with a lower yielding security, resulting in a decreased return for investors. Conversely, a high-yield, high-risk bond's value will decrease in a rising interest rate market, as will the value of the fund's assets. LIQUIDITY AND VALUATION - There may be little trading in the secondary market for particular bonds, which may affect adversely the fund's ability to value accurately or dispose of such bonds. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of high-yield, high-risk bonds, especially in a thin market. DOWNGRADE POLICY - The fund is not normally required to dispose of a security in the event that its rating is reduced to Ba or below by Moody's Investors, Inc. or BB or below by Standard & Poors Corporation (or it is not rated and its quality becomes equivalent to such a security). The fund, however, has no current intention to hold 35% or more of its net assets in these securities (also known as "high-yield, high-risk" or "junk" bonds). GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES - Certificates issued by the Government National Mortgage Association ("GNMA") are mortgage-backed securities representing part ownership of a pool of mortgage loans, which are issued by lenders such as mortgage bankers, commercial banks and savings and loan associations, and are either insured by the Federal Housing Administration or guaranteed by the Veterans Administration. A pool of these mortgages is assembled and, after being approved by GNMA, is offered to investors through securities dealers. The timely payment of interest and principal on each mortgage is guaranteed by GNMA and backed by the full faith and credit of the U.S. Government. Principal is paid back monthly by the borrower over the term of the loan. Reinvestment of prepayments may occur at higher or lower rates than the original yield on the certificates. Due to the prepayment feature and the need to reinvest prepayments of principal at current market rates, GNMA certificates can be less effective than typical bonds of similar maturities at "locking in" yields during periods of declining interest rates. GNMA certificates typically appreciate or decline in market value during periods of declining or rising interest rates, respectively. Due to the regular repayment of principal and the prepayment feature, the effective maturities of mortgage pass-through securities are shorter than stated maturities, will vary based on market conditions and cannot be predicted in advance. The effective maturities of newly-issued GNMA certificates backed by relatively new loans at or near the prevailing interest rates are generally assumed to range between approximately 9 and 12 years. FNMA AND FHLMC MORTGAGE-BACKED OBLIGATIONS - FNMA, a federally chartered and privately-owned corporation, issues pass-through securities representing interests in a pool of conventional mortgage loans. FNMA guarantees the timely payment of principal and interest but this guarantee is not backed by the full faith and credit of the U.S. Government. FHLMC, a corporate instrumentality of the U.S. Government, issues participation certificates which represent an interest in a pool of conventional mortgage loans. FHLMC guarantees the timely payment of interest and the ultimate collection of principal, and maintains reserves to protect holders against losses due to default, but the certificates are not backed by the full faith and credit of the U.S. Government. As is the case with GNMA certificates, the actual maturity of and realized yield on particular FNMA and FHLMC pass-through securities will vary based on the prepayment experience of the underlying pool of mortgages. OTHER MORTGAGE-RELATED SECURITIES - The fund may invest in mortgage-related securities issued by financial institutions such as commercial banks, savings and loan associations, mortgage bankers and securities broker-dealers (or separate trusts or affiliates of such institutions established to issue these securities). These securities include mortgage pass-through certificates, collateralized mortgage obligations (including real estate mortgage investment conduits as authorized under the Internal Revenue Code of 1986) (CMOs) or mortgage-backed bonds. Each class of bonds in a CMO series may have a different maturity, bear a different coupon, and have a different priority in receiving payments. All principal payments, both regular principal payments as well as any prepayment of principal, are passed through to the holders of the various CMO classes dependent on the characteristics of each class. In some cases, all payments are passed through first to the holders of the class with the shortest stated maturity until it is completely retired. Thereafter, principal payments are passed through to the next class of bonds in the series, until all the classes have been paid off. In other cases, payments are passed through to holders of whichever class first has the shortest effective maturity at the time payments are made. As a result, an acceleration in the rate of prepayments that may be associated with declining interest rates shortens the expected life of each class. The impact of an acceleration in prepayments affects the expected life of each class differently depending on the unique characteristics of that class. In the case of some CMO series, each class may receive a differing proportion of the monthly interest and principal repayments on the underlying collateral. In these series the classes would be more affected by an acceleration (or slowing) in the rate of prepayments than CMOs which share principal and interest proportionally. Mortgage-backed bonds are general obligations of the issuer fully collateralized directly or indirectly by a pool of mortgages. The mortgages serve as collateral for the issuer's payment obligations on the bonds, but interest and principal payments on the mortgages are not passed through either directly (as with GNMA certificates and FNMA and FHLMC pass-through securities) or on a modified basis (as with CMO's). Accordingly, a change in the rate of prepayments on the pool of mortgages could change the effective maturity of a CMO but not that of a mortgage-backed bond (although, like many bonds, mortgage-backed bonds can provide that they are callable by the issuer prior to maturity). OTHER ASSET-BACKED SECURITIES - The fund may invest in bonds or notes backed by loan paper or accounts receivable originated by banks, credit card companies, or other providers of credit. These securities are often "enhanced" by a bank letter of credit or by insurance coverage provided by an institution other than the issuer; such an enhancement typically covers only a portion of the par value until exhausted. Generally, the originator of the loan or accounts receivable paper sells it to a specially created trust, which repackages it as securities with a term of five years or less. Examples of these types of securities include "certificates for automobile receivables" and bonds backed by credit card loan receivables. The loans underlying these securities are subject to prepayments which can decrease maturities and returns. The values of these securities are ultimately dependent upon payment of the underlying loans by individuals, and the holders generally have no recourse against the originator of the loans. Holders of these securities may experience losses or delays in payment if the original payments of principal and interest are not made to the trust with respect to the underlying loans. The values of these securities also may fluctuate due to changes in the market perception of the creditworthiness of the servicing agent for the loan pool, the originator of the loan, or the financial institution providing the credit enhancement. CURRENCY TRANSACTIONS - The fund has the ability to hold a portion of its assets in various currencies and to enter into forward currency contracts to protect against changes in currency exchange rates. A forward currency contract is an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. The fund might purchase a currency or enter into a forward purchase contract for the currency to preserve the U.S. dollar price of securities it has the authority to purchase or has contracted to purchase. Alternatively, it might sell a currency on either a spot or forward basis to hedge against an anticipated decline in the U.S. dollar value of securities in its portfolio or which it intends or has contracted to sell. Although this strategy could minimize the risk of loss due to a decline in the value of the hedged currency, it could also limit any potential gain which might result from an increase in the value of the currency. LOANS OF PORTFOLIO SECURITIES - Although the fund has no current intention of doing so during the next 12 months, the fund is authorized to lend portfolio securities to selected securities dealers or to other institutional investors whose financial condition is monitored by Capital Research and Management Company (the "Investment Adviser"). The borrower must maintain with the fund's custodian collateral consisting of cash, cash equivalents or U.S. Government securities equal to at least 100% of the value of the borrowed securities, plus any accrued interest. The Investment Adviser will monitor the adequacy of the collateral on a daily basis. The fund may at any time call a loan of its portfolio securities and obtain the return of the loaned securities. The fund will receive any interest paid on the loaned securities and a fee or a portion of the interest earned on the collateral. The fund will limit its loans of portfolio securities to an aggregate of one-third of the value of its total assets, measured at the time any such loan is made. PORTFOLIO TRADING - The fund intends to engage in portfolio trading when it is believed that the sale of a security owned by the fund and the purchase of another security of better value can enhance principal and/or increase income. A security may be sold to avoid any prospective decline in market value in light of what is evaluated as an expected rise in prevailing yields, or a security may be purchased in anticipation of a market rise (a decline in prevailing yields). A security also may be sold and a comparable security purchased coincidentally in order to take advantage of what is believed to be a disparity in the normal yield and price relationship between the two securities, or in connection with a "roll" transaction as described in the Prospectus under "Certain Securities and Investment Techniques." INVERSE FLOATING RATE NOTES - Although the fund has no current intention of doing so during the next 12 months, the fund is authorized to invest up to 1.5% of the fund's net assets in inverse floating rate notes (a type of derivative instrument). These notes have rates that move in the opposite direction of prevailing interest rates; thus, a change in prevailing interest rates will often result in a greater change in the instruments' interest rates. As a result, these instruments may have a greater degree of volatility than other types of interest-bearing securities. STRATEGIC PORTFOLIO ADJUSTMENT - The composition of the fund's portfolio will change from time to time primarily in response to expected changes in interest rates and in the yield relationships among sectors of the fixed-income market. The Investment Adviser continually monitors the creditworthiness of companies, the price and yield relationships among different sections of the debt market and the outlook for interest rates in general and in particular parts of the debt market. Yield relationships among securities of various types of issuers, maturities, coupon rates or quality ratings frequently change in response to changing supply-demand influences in the market. When it appears to the Investment Adviser that the yield relationships may change, the composition of the portfolio may be adjusted, should such changes offer the opportunity to further the fund's investment objective. Changes may also be made if the Investment Adviser believes that there is a temporary disparity among individual securities of comparable characteristics. Some such changes may result in short-term gains or losses to the fund. This information, which is shared among the Investment Adviser's other departments and its affiliates, makes up a part of the Investment Adviser's investment decisions. PORTFOLIO TURNOVER - Portfolio changes will be made without regard to the length of time particular investments may have been held. High portfolio turnover involves correspondingly greater transaction costs in the form of dealer spreads or brokerage commissions, and may result in the realization of net capital gains, which are taxable when distributed to shareholders. Fixed-income securities are generally traded on a net basis and usually neither brokerage commissions nor transfer taxes are involved. The fund does not anticipate its portfolio turnover to exceed 100% annually. The fund's portfolio turnover rate would equal 100% if each security in the fund's portfolio were replaced once per year. See "Financial Highlights" in the Prospectus for the fund's portfolio turnover for each of the last 10 years. OTHER POLICIES - The fund may not make direct purchases of common or preferred stocks or warrants or rights to acquire such common or preferred stocks. The fund may invest in debt securities which are convertible into or exchangeable for or which carry warrants or rights to purchase common stock or other equity interests. Equity interests acquired through such conversion, exchange or exercise will be disposed of by the fund as soon as it may feasibly be done in an orderly manner. INVESTMENT RESTRICTIONS The fund has adopted certain additional investment restrictions which may not be changed without approval of the holders of a majority of its outstanding shares. Such majority is defined by the 1940 Act as the vote of the lesser of (i) 67% or more of the outstanding voting securities present at a meeting, if the holders of more than 50% of the outstanding voting securities are present in person or by proxy, or (ii) more than 50% of the outstanding voting securities. These restrictions provide that the fund may not: 1. Purchase any security (other than securities issued or guaranteed by the U.S. government or its agencies or instrumentalities) if, immediately after and as a result of such investment (a) more than 5% of the value of the fund's total assets would be invested in securities of the issuer; or (b) the fund would hold more than 10% of the voting securities of the issuer; or (c) 25% or more of the value of the fund's assets would be invested in a single industry. Each of the electric utility, natural gas distribution, natural gas pipeline, combined electric and natural gas utility, and telephone industries shall be considered as a separate industry for this purpose; 2. Invest in companies for the purpose of exercising control or management; 3. Knowingly purchase securities of other investment companies, except in connection with a merger, consolidation, acquisition, or reorganization; 4. Buy or sell real estate in the ordinary course of its business; however, the fund may invest in debt securities secured by real estate or interests therein or issued by companies, including real estate investment trusts, which invest in real estate or interests therein; 5. Buy or sell commodities or commodity contracts in the ordinary course of its business, provided, however, that this shall not prohibit the fund from purchasing or selling currencies including forward currency contracts; 6. Invest more than 15% of the value of its net assets in securities that are illiquid; 7. Engage in the business of underwriting of securities of other issuers, except to the extent that the disposal of an investment position may technically constitute the fund an underwriter as that term is defined under the Securities Act of 1933; 8. Make loans in an aggregate amount in excess of 10% of the value of the fund's total assets, taken at the time any loan is made, provided, (i) that the purchase of debt securities pursuant to the fund's investment objectives and entering into repurchase agreements maturing in seven days or less shall not be deemed loans for the purposes of this restriction, and (ii) that loans of portfolio securities as described under "Loans of Portfolio Securities," shall be made only in accordance with the terms and conditions therein set forth; 9. Sell securities short, except to the extent that the fund contemporaneously owns or has the right to acquire at no additional cost securities identical to those sold short; 10. Purchase securities at margin; 11. Borrow money except from banks for temporary or emergency purposes, not in excess of 5% of the value of the fund's total assets; 12. Mortgage, pledge, or hypothecate any of its assets; 13. Purchase or retain the securities of any issuer, if those individual officers and directors of the fund, its investment adviser, or distributor, each owning beneficially more than 1/2 of 1% of the securities of such issuer, together own more than 5% of the securities of such issuer; The fund has adopted the following non-fundamental investment policies, which may be changed by action of the Board of Directors without shareholder approval: (a) the fund will not invest more than 5% of its total assets in securities of companies having, together with their predecessors, a record of less than three years of continuous operation, and (b) the fund will not purchase partnership interests or invest in leases to develop, or explore for, oil, gas or minerals. Notwithstanding Investment Restriction #3, the fund may invest in securities of other managed investment companies if deemed advisable by its officers in connection with the administration of a deferred compensation plan adopted by Directors pursuant to an exemptive order granted by the Securities and Exchange Commission. FUND OFFICERS AND DIRECTORS Directors and Director Compensation (with their principal occupations during the past five years)#
NAME, ADDRESS AND AGE POSITION WITH PRINCIPAL OCCUPATION(S) DURING AGGREGATE TOTAL COMPENSATION TOTAL NUMBER REGISTRANT PAST 5 YEARS (POSITIONS WITHIN THE COMPENSATION FROM ALL FUNDS OF FUND ORGANIZATIONS LISTED MAY HAVE (INCLUDING MANAGED BY CAPITAL BOARDS/2/ ON CHANGED DURING THIS PERIOD) VOLUNTARILY DEFERRED RESEARCH AND WHICH COMPENSATION/1/) FROM MANAGEMENT COMPANY/2/ DIRECTOR FUND DURING FISCAL SERVES YEAR ENDED 12/31/94 ++ H. Frederick Christie Director Private Investor. The Mission P. O. Box 144 Group (non-utility holding $6,000 $135,583 18 Palos Verdes, CA 90274 Company, subsidiary of Southern Age: 61 California Edison Company), former President and Chief Executive Officer Diane C. Creel Director Chairwoman, CEO and President, 100 W. Broadway The Earth Technology Corporation 533 7200 10 Suite 5000 Long Beach, CA 90802 Age: 46 Martin Fenton, Jr. Director Chairman, Senior Resource Group 4350 Executive Drive (management of senior living 5,804/3/ 93,050 15 Suite 101 centers) San Diego, CA 92123 Age: 59 Leonard R. Fuller Director President, Fuller & Company, Inc. 4333 Admiralty Way (financial management consulting 533 7,200 10 Suite 841 ETH firm) Marina del Rey, CA 90292 Age: 48 +* Abner D. Goldstine President, PEO Capital Research and Management Age: 65 and Director Company, Senior Vice President none/4/ none/4/ 12 and Director +** Paul G. Haaga, Jr. Chairman of Capital Research and Management Age: 46 the Board Company, Senior Vice President none/4/ none/4/ 14 and Director Herbert Hoover III Director Private Investor 200 S. Los Robles 5,400 57,850 14 Avenue Suite 520 Pasadena, CA 91101-2431 Age: 57 Richard G. Newman Director Chairman, President and CEO, 3250 Wilshire Boulevard AECOM Technology Corporation 5,752/3/ 42,050 12 Los Angeles, CA 90010- (architectural engineering) 1599 Age: 50 Peter C. Valli Director Chairman and CEO, BW/IP 200 Oceangate Boulevard International Inc. (industrial 5,737/3/ 40,850 12 Suite 900 manufacturing) Long Beach, CA 90802 Age: 68
+ Directors who are considered "interested persons as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), on the basis of their affiliation with the fund's Investment Adviser, Capital Research and Management Company. ++ May be deemed an "interested person" of the fund due to membership on the board of directors of the parent company of a registered broker-dealer. * Address is 11100 Santa Monica Boulevard, Los Angeles, CA 90025. ** Address is 333 South Hope Street, Los Angeles, CA 90071 /1/ Amounts may be deferred by eligible directors under a non-qualified deferred compensation plan adopted by the Fund in 1993. Deferred amounts accumulate at an earnings rate determined by the total return of one or more funds in The American Funds Group as designated by the Director. /2/ Capital Research and Management Company manages The American Funds Group consisting of 28 funds: AMCAP Fund, American Balanced Fund, Inc., American High-Income Municipal Bond Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management Trust of America, Capital Income Builder, Inc., Capital World Growth and Income Fund, Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc., Intermediate Bond Fund of America, The Investment Company of America, Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S. Treasury Money Fund of America, U.S. Government Securities Fund and Washington Mutual Investors Fund, Inc. Capital Research and Management Company also manages American Variable Insurance Series and Anchor Pathway Fund which serve as the underlying investment vehicle for certain variable insurance contracts; and Bond Portfolio for Endowments, Inc. and Endowments, Inc. whose shares may be owned only by tax-exempt organizations. /3/ Since the plan's adoption, the total amount of deferred compensation accrued by the fund (plus earnings thereon) for participating Directors is as follows: Martin Fenton, Jr. ($5,804), Richard G. Newman ($5,752) and Peter C. Valli ($5,737). Amounts deferred and accumulated earnings thereon are not funded and are general unsecured liabilities of the fund until paid to the Director. /4/ Paul G. Haaga, Jr. and Abner D. Goldstine are affiliated with the Investment Adviser and, accordingly, receive no compensation from the Fund. OFFICERS (with their principal occupations during the past five years)# * RICHARD T. SCHOTTE, SENIOR VICE PRESIDENT. Capital Research Company, Senior Vice President * JOHN H. SMET, VICE PRESIDENT. Capital Research and Management Company, Vice President ** MARY C. CREMIN, VICE PRESIDENT AND TREASURER. Capital Research and Management Company, Senior Vice President - Fund Business Management Group *** MICHAEL J. DOWNER, VICE PRESIDENT. Capital Research and Management Company, Senior Vice President - Fund Business Management Group *** JULIE F. WILLIAMS, SECRETARY. Capital Research and Management Company, Vice President - Fund Business Management Group *** KIMBERLY S. VERDICK, ASSISTANT SECRETARY. Capital Research and Management Company, Compliance Associate. OFFICERS (cont.) ** ANTHONY W. HYNES, Assistant Treasurer. Capital Research and Management Company, Vice President - Fund Business Management Group # Positions within the organizations listed may have changed during this period. * Address is 11100 Santa Monica Boulevard, Los Angeles, CA 90025. ** Address is 135 South State College Boulevard, Brea, CA 92621. *** Address is 333 South Hope Street, Los Angeles, CA 90071. The fund pays annual fees of $2850 to Directors who are not affiliated with the Investment Adviser, plus $200 for each Board of Directors meeting attended, plus $200 for each meeting attended as a member of a committee of the Board of Directors. The Directors may elect, on a voluntary basis, to defer all or a portion of these fees through a deferred compensation plan in effect for the fund. The fund also reimburses certain expenses of the Directors who are not affiliated with the Investment Adviser. As of February 1, 1995, the officers and Directors and their families, as a group, owned beneficially or of record less than 1% of the outstanding shares of the fund. MANAGEMENT INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains research facilities in the U.S. and abroad, with a staff of professionals, many of whom have a number of years of investment experience. The Investment Adviser's research professionals travel several million miles a year, making more than 5,000 research visits in more than 50 countries around the world. The Investment Adviser believes that it is able to attract and retain quality personnel. An affiliate of the Investment Adviser compiles indices for major stock markets around the world and compiles and edits the Morgan Stanley Capital International Perspective, providing financial and market information about more than 2,400 companies around the world. The Investment Adviser is responsible for approximately $100 billion of stocks, bonds and money market instruments and serve over five million investors of all types throughout the world. These investors include privately owned businesses and large corporations, as well as schools, colleges, foundations and other non-profit and tax-exempt organizations. INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and Service Agreement (the "Agreement") between the fund and the Investment Adviser will continue until October 31, 1995 unless sooner terminated and may be renewed from year to year thereafter, provided that any such renewal has been specifically approved at least annually by (i) the Board of Directors, or by the vote of a majority (as defined in the 1940 Act) of the outstanding voting securities, and (ii) the vote of a majority of directors who are not parties to the Agreement or interested persons (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such approval. The Agreement provides that the Investment Adviser has no liability to the fund for its acts or omissions in the performance of its obligations to the fund not involving willful misconduct, bad faith, gross negligence or reckless disregard of its obligations under the Agreement. The Agreement also provides that either party has the right to terminate it, without penalty, upon 60 days' written notice to the other party and that the Agreement automatically terminates in the event of its assignment (as defined in the 1940 Act). The Investment Adviser, in addition to providing investment advisory services, furnishes the services and pays the compensation and travel expenses of persons to perform the executive, administrative, clerical and bookkeeping functions of the fund, provides suitable office space and utilities, necessary small office equipment and general purpose accounting forms, supplies, and postage used at the offices of the fund. The fund pays all expenses not assumed by the Investment Adviser, including, but not limited to, custodian, stock transfer and dividend disbursing fees and expenses; costs of the designing, printing and mailing of reports, prospectuses, proxy statements, and notices to its shareholders, taxes; expenses of the issuance and redemption of shares (including stock certificates, registration and qualification fees and expenses); legal and auditing expenses; compensation, fees, and expenses paid to directors unaffiliated with the Investment Adviser; association dues; and costs of stationery and forms prepared exclusively for the fund. The Investment Adviser has agreed to reduce the fee payable to it under the agreement, (a) by the amount by which the ordinary operating expenses of the fund for any fiscal year of the fund, excluding interest, taxes and extraordinary expenses such as litigation, shall exceed the greater of (i) one percent (1%) of the average month-end net assets of the fund for such fiscal year, or (ii) ten percent (10%) of the fund's gross investment income, and (b) by any additional amount necessary to assure that such ordinary operating expenses of the fund in any year after such reduction do not exceed the lesser of (i) one and one-half percent (1 1/2%) of the first $30 million of average month-end net assets of the fund, plus one percent (1%) of the average month-end net assets in excess thereof or (ii) twenty-five percent (25%) of the fund's gross investment income. During the fiscal years ended December 31, 1994, 1993, and 1992, the Investment Adviser's total fees amounted to $18,755,000, $17,170,000, and $13,243,000, respectively. PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal Underwriter") is the principal underwriter of the fund's shares. The fund has adopted a Plan of Distribution (the "Plan"), pursuant to rule 12b-1 under the 1940 Act (see "Principal Underwriter" in the Prospectus). The Principal Underwriter receives amounts payable pursuant to the Plan (see below) and commissions consisting of that portion of the sales charge remaining after the discounts which it allows to investment dealers. Commissions retained by the Principal Underwriter on sales of fund shares during the fiscal year ended December 31, 1994 amounted to $4,561,902 after allowance of $19,570,842 to dealers. During the fiscal years ended December 31, 1992 and 1991 the Principal Underwriter retained $8,418,631 and $7,091,000, respectively. As required by rule 12b-1, the Plan (together with the Principal Underwriting Agreement) has been approved by the full Board of Directors and separately by a majority of the Directors who are not "interested persons" of the fund and who have no direct or indirect financial interest in the operation of the Plan or the Principal Underwriting Agreement, and the Plan has been approved by the vote of a majority of the outstanding voting securities of the fund. The officers and directors who are "interested persons" of the fund due to present or past affiliations with the investment adviser and related companies may be considered to have a direct or indirect financial interest in the operation of the Plan. Potential benefits of the plan to the fund include improved shareholder services, savings to the fund in transfer agency costs, savings to the fund in advisory fees and other expenses, benefits to the investment process from growth or stability of assets and maintenance of a financially healthy management organization. The selection and nomination of Directors who are not "interested persons" of the fund is committed to the discretion of the Directors who are not "interested persons" during the existence of the Plan. The Plan is reviewed quarterly and must be renewed annually by the Board of Directors. Under the Plan the fund may expend up to 0.25% of its average net assets annually to finance any activity which is primarily intended to result in the sale of fund shares, provided the fund's Board of Directors has approved the category of expenses for which payment is being made. These include service fees for qualified dealers and dealer commissions and wholesaler compensation on sales of shares exceeding $1 million (including purchases by any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees). Only expenses incurred during the preceding 12 months and accrued while the Plan is in effect may be paid by the fund. During the fiscal year ended December 31, 1994, the fund paid $11,347,000, $9,768,000 under the Plan as compensation to dealers. As of December 31, 1994 accrued and unpaid distribution expenses were $829,000. The Glass-Steagall Act and other applicable laws, among other things, generally prohibit commercial banks from engaging in the business of underwriting, selling or distributing securities, but permit banks to make shares of mutual funds available to their customers and to perform administrative and shareholder servicing functions. However, judicial or administrative decisions or interpretations of such laws, as well as changes in either federal or state statutes or regulations relating to the permissible activities of banks or their subsidiaries of affiliates, could prevent a bank from continuing to perform all or a part of its servicing activities. If a bank were prohibited from so acting, shareholder clients of such bank would be permitted to remain shareholders of the fund and alternate means for continuing the servicing of such shareholders would be sought. In such event, changes in the operation of the fund might occur and shareholders serviced by such bank might no longer be able to avail themselves of any automatic investment or other services then being provided by such bank. It is not expected that shareholders would suffer with adverse financial consequences as a result of any of these occurrences. In addition, state securities laws on this issue may differ from the interpretations of federal law expressed herein and certain banks and financial institutions may be required to be registered as dealers pursuant to state law. DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES The fund intends to meet all the requirements and has elected the tax status of a "regulated investment company" under the provisions of Subchapter M of the Internal Revenue Code of 1986 (the "Code"). Under Subchapter M, if the fund distributes within specified times at least 90% of the sum of its investment company taxable investment income (net investment income and the excess of net short-term capital gains over net long-term capital losses) and its tax-exempt interest, if any, it will be taxed only on that portion (if any) of the investment company taxable income and net capital gain that it retains. To qualify, the fund must (a) derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans and gains from the sale or other disposition of stock, securities, currencies or other income derived with respect to its business of investing in such stock, securities or currencies; (b) derive less than 30% of its gross income from the sale or other disposition of stock or securities held for less than three months; and (c) diversify its holdings so that at the end of each fiscal quarter, (i) at least 50% of the market value of the fund's assets is represented by cash, U.S. Government securities and other securities which must be limited, in respect of any one issuer, to an amount not greater than 5% of the fund's assets and 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its assets is invested in the securities of any one issuer (other than U.S. Government securities or the securities of other regulated investment companies), or in two or more issuers which the fund controls and which are engaged in the same or similar trades or businesses or related trades or businesses. Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a regulated investment company's "required distribution" for the calendar year ending within the regulated investment company's taxable year over the "distributed amount" for such calendar year. The term "required distribution" means the sum of (i) 98% of ordinary income (generally net investment income) for the calendar year, (ii) 98% of capital gain (both long-term and short-term) for the one-year period ending on October 31 (as though the one-year period ending on October 31 were the regulated investment company's taxable year), and (iii) the sum of any untaxed, undistributed net investment income and net capital gains of the regulated investment company for prior periods. The term "distributed amount" generally means the sum of (i) amounts actually distributed by the fund from its current year's ordinary income and net capital gain and (ii) any amount on which the fund pays income tax during the periods described above. The fund intends to distribute net investment income and net capital gains so as to minimize or avoid the excise tax liability. The fund also intends to distribute to shareholders all of the excess of net long-term capital gain over net short-term capital loss on sales of securities. If the net asset value of shares of the fund should, by reason of a distribution of realized capital gains, be reduced below a shareholder's cost, such distribution would to that extent be a return of capital to that shareholder even though taxable to the shareholder, and a sale of shares by a shareholder at net asset value at that time would establish a capital loss for federal tax purposes. In particular, investors should consider the tax implications of purchasing shares just prior to a dividend or distribution record date. Those investors purchasing shares just prior to such a date will then receive a partial return of capital upon the dividend or distribution, which will nevertheless be taxable to them as an ordinary or capital gains dividend. Dividends generally are taxable to shareholders at the time they are paid. However, dividends and distributions declared in October, November and December and made payable to shareholders of record in such a month are treated as paid and are thereby taxable as of December 31, provided that the fund pays the dividend no later than the end of January of the following year. If a shareholder exchanges or otherwise disposes of shares of the fund within 90 days of having acquired such shares, and if, as a result of having acquired those shares, the shareholder subsequently pays a reduced sales charge for shares of the fund, or of a different fund, the sales charge previously incurred in acquiring the fund's shares shall not be taken into account (to the extent such previous sales charges do not exceed the reduction in sales charges) for the purpose of determining the amount of gain or loss on the exchange, but will be treated as having been incurred in the acquisition of such other shares. Also, any loss realized on a redemption or exchange of shares of a fund will be disallowed to the extent shares are reacquired within the 61-day period beginning 30 days before and ending 30 days after the shares are disposed of. Under the Code, distributions of net investment income by the fund to a shareholder who, as to the U.S., is a nonresident alien individual, nonresident alien fiduciary of a trust or estate, non-U.S. corporation, or non-U.S. partnership (a "non-U.S. shareholder") will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate). Withholding will not apply if a dividend paid by the fund to a non-U.S. shareholder is "effectively connected" with a U.S. trade or business, in which case the reporting and withholding requirements applicable to U.S. citizens, U.S. residents or domestic corporations will apply. However, if the distribution is effectively connected with the conduct of the non-U.S. shareholder's trade or business within the U.S., the distribution would be included in the net income of the shareholder and subject to U.S. income tax at the applicable marginal rate. Distributions of capital gains not effectively connected with a U.S. trade or business are not subject to the withholding, but if the non-U.S. shareholder was an individual who was physically present in the U.S. during the tax year for more than 182 days and such shareholder is nonetheless treated as a nonresident alien, the distributions would be subject to a 30% tax. The fund may be required to pay withholding and other taxes imposed by countries outside the United States which would reduce the fund's investment income, generally at rates from 10% to 40%. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% in value of the fund's total assets at the close of its taxable year consist of securities of non-U.S. corporations, the fund will be eligible to file elections with the Internal Revenue Service pursuant to which shareholders of the fund will be required to include their respective pro rata portions of such withholding taxes in their federal income tax returns as gross income, treat such amounts as foreign taxes paid by them, and deduct such amounts in computing their taxable incomes or, alternatively, use them as foreign tax credits against their federal income taxes. The fund does not currently expect to meet the eligibility requirement for filing this election as its investments in securities of non-U.S. issuers are limited. Sales of forward currency contracts which are intended to hedge against a change in the value of securities or currencies held by the fund may affect the holding period of such securities or currencies and, consequently, the nature of the gain or loss on such securities or currencies upon disposition. The amount of any realized gain or loss on closing out a forward currency contract such as a forward commitment for the purchase or sale of non-U.S. currency will generally result in a realized capital gain or loss for tax purposes. Under Code Section 1256, forward currency contracts held by the fund at the end of each fiscal year will be required to be "marked to market" for federal income tax purposes, that is, deemed to have been sold at market value. Except for transactions in forward currency contracts which are classified as part of a "mixed straddle," any gain nor loss recognized with respect to forward currency contracts is considered to be 60% long-term capital gain or loss, and 40% short-term capital gain or loss, without regard to the holding period of the contract. In the case of a transaction classified as a "mixed straddle," the recognition of losses may be deferred to a later taxable year. Code Section 988 may also apply to forward currency contracts. Under Section 988, each non-U.S. currency gain or loss is generally computed separately and treated as ordinary income or loss. In the case of overlap between Sections 1256 and 988, special provisions determine the character and timing of any income, gain or loss. The fund will attempt to monitor Section 988 transactions to avoid an adverse tax impact. Under the Code, a fund's taxable income for each year will be computed without regard to any net non-U.S. currency loss attributable to transactions after October 31, and any such net non-U.S. currency loss will be treated as arising on the first day of the following taxable year. As of the date of this statement of additional information, the maximum individual Federal tax rate applicable to ordinary income is 39.6% (effective tax rates may be higher for some individuals due to phase out of exemptions and elimination of deductions); the maximum individual tax rate applicable to net capital gain is 28%; and the maximum corporate tax applicable to ordinary income and net capital gain is 35% (except that corporations which have taxable income in excess of $100,000 for a taxable year will be required to pay an additional amount of income tax of up to $11,750 and corporations which have taxable income in excess of $15,000,000 for a taxable year will be required to pay an additional amount of income tax of up to $100,000). Naturally, the amount of tax payable by an individual will be affected by a combination of tax law rules covering, E.G., deductions, credits, deferrals, exemptions, sources of income and other matters. Under the Code, an individual is entitled to establish and contribute to an IRA each year (prior to the tax return filing deadline for that year) whereby earnings on investments are tax-deferred. In addition, in some cases, the IRA contribution itself may be deductible. The foregoing is limited to a summary discussion of federal taxation and should not be viewed as a comprehensive discussion of all provisions of the Code relevant to investors. Dividends and distributions may also be subject to state or local taxes. Investors should consult their own tax advisers for additional details as to their particular tax status. PURCHASE OF SHARES PRICE OF SHARES - Purchases of shares are made at the offering price next determined after the purchase order is received by the fund or American Funds Service Company; this offering price is effective for orders received by American Funds Service Company (the "Transfer Agent"), the fund or investment dealers prior to the time of determination of the net asset value and, in the case of orders placed with dealers, accepted by the Principal Underwriter prior to its close of business. The dealer is responsible for promptly transmitting purchase orders to the Principal Underwriter. Orders received by the investment dealer, the Transfer Agent, or the fund after the time of the determination of the net asset value will be entered at the next calculated offering price. Prices which appear in the newspaper are not always indicative of prices at which you will be purchasing and redeeming shares of the fund, since such prices generally reflect the previous day's closing price whereas purchases and redemptions are made at the next calculated price. The price you pay for shares, the offering price, is based on the net asset value per share which is calculated once daily at the close of trading (currently 4:00 p.m., New York time) each day the New York Stock Exchange is open. The New York Stock Exchange is currently closed on weekends and on the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The net asset value per share is determined as follows: 1. Stocks and convertible bonds will be valued at closing sales prices reported on recognized securities exchanges on the day of valuation or, for listed stocks and convertible bonds having no sales reported and for unlisted stocks and convertible bonds, upon last-reported bid prices on that date. Non-convertible bonds, debentures and other long-term debt securities are valued at prices obtained from a bond-pricing service provided by a major dealer in bonds, when such prices are available; however, in circumstances where the Investment Adviser deems it appropriate to do so, such securities will be valued at the mean of representative quoted bid and asked prices or, if such prices are not available, at prices for securities of comparable maturity, quality and type. Short-term securities with original maturities of less than one year and remaining maturities in excess of 60 days will be valued at the mean of their quoted bid and asked prices or, if such prices are not available, at prices for securities of comparable maturity, quality and type. Short-term securities with original maturities of less than one year and with 60 days or less to maturity will be amortized to maturity based on their cost to the fund if acquired within 60 days of maturity or, if already held by the fund on the 60th day, based on the value determined on the 61st day. Bonds denominated in currencies other than U.S. dollars will be valued at the closing bid quotation obtained from Reuters Information Services Inc. The value of each security denominated in a currency other than U.S. dollars will be translated into U.S. dollars at the prevailing exchange rate as determined by the fund's officers. 2. Where pricing service or market quotations are not readily available, securities will be valued at fair value by the Valuation Committee of the Board of Directors. 3. There are deducted from the total assets, thus determined, the liabilities, including proper accruals of taxes and other expense items; and 4. The net assets so obtained is then divided by the total number of shares outstanding, and the result, rounded to the nearest cent, is the net asset value per share. Any purchase order may be rejected by the Principal Underwriter or by the fund. The fund will not knowingly sell shares (other than for the reinvestment of dividends or capital gain distributions) directly or indirectly or through a unit investment trust to any other investment company, person or entity, where, after the sale, such investment company, person, or entity would own beneficially directly, indirectly, or through a unit investment trust more than 3% of the outstanding shares of the fund without the consent of a majority of the Board of Directors. STATEMENT OF INTENTION - The reduced sales charges and offering prices set forth in the Prospectus apply to purchases of $25,000 or more made within a 13-month period pursuant to the terms of a written statement of intention (the "Statement") in the form provided by the Principal Underwriter and signed by the purchaser. The Statement is not a binding obligation to purchase the indicated amount. When a shareholder signs a Statement in order to qualify for a reduced sales charge, shares equal to 5% of the dollar amount specified in the Statement will be held in escrow in the shareholder's account out of the initial purchase (or subsequent purchases, if necessary) by the Transfer Agent. All dividends and capital gain distributions on shares held in escrow will be credited to the shareholder's account in shares (or paid in cash, if requested). If the intended investment is not completed within the specified 13-month period, the purchaser will remit to the Principal Underwriter the difference between the sales charge actually paid and the sales charge which would have been paid if the total of such purchases had been made at a single time. If the difference is not paid within 20 days after written request by the Principal Underwriter or the securities dealer, the appropriate number of escrowed shares will be redeemed to pay such difference. If the proceeds from this redemption are inadequate, the purchaser will be liable to the Principal Underwriter for the balance still outstanding. The Statement may be revised upward at any time during the 13-month period, and such a revision will be treated as a new Statement, except that the 13-month period during which the purchase must be made will remain unchanged and there will be no retroactive reduction of the sales charges paid on prior purchases. In the case of purchase orders by the trustees of certain retirement plans by payroll deduction, the sales charge for the investments made during the 13-month period will be handled as follows: The investment made the first month of the 13-month period will be multiplied by 13 and then multiplied by 1.5. On the first investment and all other investments made pursuant to the statement of intention, a sales charge will be assessed according to the sales charge breakpoint thus determined. There will be no retroactive adjustments in sales charges on investments previously made during the 13-month period. DEALER COMMISSIONS - The following commissions will be paid to dealers who initiate and are responsible for purchases of $1 million or more, for purchases by any defined contribution plan qualified under Section 401(a) of the Internal Revenue Code including a "401(k)" plan with 200 or more eligible employees, and for purchases made at net asset value by certain retirement plans of organizations with collective retirement plan assets of $100 million or more: 1.00% on amounts of $1 million to $2 million, 0.80% on amounts over $2 million to $3 million, 0.50% on amounts over $3 million to $50 million, 0.25% on amounts over $50 million to $100 million, and 0.15% on amounts over $100 million. The level of dealer commissions will be determined based on sales made over a 12-month period commencing from the date of the first sale at net asset value. See "The American Funds Shareholder Guide" in the fund's Prospectus for more information. SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES AUTOMATIC INVESTMENT PLAN - The automatic investment plan enables shareholders to make regular monthly or quarterly investments in shares through automatic charges to their bank accounts. With shareholder authorization and bank approval, the Transfer Agent will automatically charge the bank account for the amount specified ($50 minimum), which will be automatically invested in shares at the offering price on or about the 10th day of the month (or on or about the 15th day of the month in the case of accounts for retirement plans where Capital Guardian Trust Company serves as trustee or custodian). Bank accounts will be charged on the day or a few days before investments are credited, depending on the bank's capabilities, and shareholders will receive a confirmation statement showing the current transaction. Participation in the plan will begin within 30 days after receipt of the account application. If the shareholder's bank account cannot be charged due to insufficient funds, a stop-payment order or closing of the account, the plan may be terminated and the related investment reversed. The shareholder may change the amount of the investment or discontinue the plan at any time by writing the Transfer Agent. AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as dividends, yield or income. Automatic investments may not be made into a shareholder account from which there are automatic withdrawals. Withdrawals of amounts exceeding reinvested dividends and distributions and increases in share value would reduce the aggregate value of the shareholder's account. The Transfer Agent arranges for the redemption by the fund of sufficient shares, deposited by the shareholder with the Transfer Agent, to provide the withdrawal payment specified. CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - A shareholder in one fund may elect to cross-reinvest dividends or dividends and capital gain distributions paid by that fund (the "paying fund") into any other fund in The American Funds Group (the "receiving fund") subject to the following conditions: (i) the aggregate value of the shareholder's account(s) in the paying fund(s) must equal or exceed $5,000 (this condition is waived if the value of the account in the receiving fund equals or exceeds that fund's minimum initial investment requirement), (ii) as long as the value of the account in the receiving fund is below that fund's minimum initial investment requirement, dividends and capital gain distributions paid by the receiving fund must be automatically reinvested in the receiving fund, and (iii) if this privilege is discontinued with respect to a particular receiving fund, the value of the account in that fund must equal or exceed the fund's minimum initial investment requirement or the fund shall have the right, if the shareholder fails to increase the value of the account to such minimum within 90 days after being notified of the deficiency, automatically to redeem the account and send the proceeds to the shareholder. These cross-reinvestments of dividends and capital gain distributions will be at net asset value (without sales charge). REDEMPTION OF SHARES The fund's Articles of Incorporation permit the fund to direct the Transfer Agent to redeem the shares of any shareholder if the shares owned by such shareholder through redemptions, market decline or otherwise, have a value of less than $150 (determined, for this purpose only as the greater of the shareholder's cost or the current net asset value of the shares, including any shares acquired through reinvestment of income dividends and capital gain distributions), or are fewer than ten shares. Prior notice of at least 60 days will be given to a shareholder before the involuntary redemption provision is made effective with respect to the shareholder's account. The shareholder will have not less than 30 days from the date of such notice within which to bring the account up to the minimum determined as set forth above. While payment of redemptions normally will be in cash, the fund's Articles of Incorporation permit payment of the redemption price wholly or partly in securities or other property included in the assets belonging to the fund when in the opinion of the fund's Board of Directors, which shall be conclusive, conditions exist which make payment wholly in cash unwise or undesirable. EXECUTION OF PORTFOLIO TRANSACTIONS There are occasions on which portfolio transactions for the fund may be executed as part of concurrent authorizations to purchase or sell the same security for other funds served by the Investment Adviser, or for trusts or other accounts served by affiliated companies of the Investment Adviser. Although such concurrent authorizations potentially could be either advantageous or disadvantageous to the fund, they are effected only when the Investment Adviser believes that to do so is in the interest of the fund. When such concurrent authorizations occur, the objective is to allocate the executions in an equitable manner. The fund does not intend to pay a mark-up in exchange for research in connection with principal transactions. The fund held certain debt securities of two of its regular brokers or dealers or their parents which included securities of Ford Motor Credit Co. and General Electric Capital Corp. in the amounts of $71,353,000 and $35,201,000, respectively, at December 31, 1994. Brokerage commissions paid on portfolio transactions, including dealer concessions on underwritings, for the fiscal years ended December 31, 1994, 1993, and 1992, amounted to $6,647,968, $8,431,000, and $5,572,000, respectively. GENERAL INFORMATION CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including proceeds from the sale of shares of the fund and of securities in the fund's portfolio, are held by The Chase Manhattan Bank (National Association), One Chase Manhattan Plaza, New York, NY 10081, as Custodian. Non-U.S. securities may be held by the Custodian pursuant to sub-custodial agreements in non-U.S. banks or non-U.S. branches of U.S. banks. TRANSFER AGENT - The Transfer Agent, maintains the record of each shareholder's account, processes purchases and redemptions of the fund's shares, acts as dividend and capital gain distribution disbursing agent, and performs other related shareholder service functions. When fund shares are purchased by an insurance company separate account to serve as the underlying investment vehicle for variable insurance contracts, the fund may pay a fee to the insurance company or another party for performing certain transfer agent services with respect to contract owners having interests in the fund. The fund has entered into such an agreement with Nationwide Life Insurance Company. INDEPENDENT ACCOUNTANTS - Deloitte & Touche LLP, 1000 Wilshire Boulevard, 15th Floor, Los Angeles, CA 90017, has served as the fund's independent auditors since its inception, providing audit services, preparation of tax returns and review of certain documents to be filed with the Securities and Exchange Commission. The financial statements, included in this Statement of Additional Information from the attached Annual Report, have been so included in reliance on the independent auditors' report given on the authority of said firm as experts in accounting and auditing. REMOVAL OF DIRECTORS BY SHAREHOLDERS - At any meeting of shareholders, duly called and at which a quorum is present, the shareholders may, by the affirmative vote of the holders of a majority of the votes entitled to be cast thereon, remove any director or directors from office and may elect a successor or successors to fill any resulting vacancies for the unexpired terms of removed directors. The fund has made an undertaking, at the request of the staff of the Securities and Exchange Commission, to apply the provisions of section 16(c) of the 1940 Act with respect to the removal of directors, as though the fund were a common-law trust. Accordingly, the Directors of the fund shall promptly call a meeting of shareholders for the purpose of voting upon the question of removal of any Director when requested in writing to do so by the record holders of not less than 10% of the outstanding shares. REPORTS TO SHAREHOLDERS - The fund's fiscal year ends on December 31. Shareholders are provided at least semi-annually with reports showing the investment portfolio, financial statements and other information. The fund's annual financial statements are audited by the fund's independent auditors, Deloitte & Touche LLP, whose selection is determined annually by the Board of Directors. PERSONAL INVESTING POLICY - Capital Research and Management Company and its affiliated companies have adopted a personal investing policy consistent with Investment Company Institute guidelines. This policy includes: a ban on acquisitions of securities pursuant to an initial public offering; restrictions on acquisitions of private placement securities; pre-clearance and reporting requirements; review of duplicate confirmation statements; annual recertification of compliance with codes of ethics; disclosure of personal holdings by certain investment personnel prior to recommendation for purchase for the fund; blackout periods on personal investing for certain investment personnel; ban on short-term trading profits for investment personnel; limitations on service as a director of publicly traded companies; and disclosure of personal securities transactions. The financial statements including the investment portfolio and the report of Independent Auditors contained in the Annual Report are included in this Statement of Additional Information. The following information is not included in the Annual Report:
DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE PER SHARE - DECEMBER 31, 1994 Net asset value and redemption price per share $12.69 (Net assets divided by shares outstanding) Maximum offering price per share $13.32 (100/95.25 of net asset value per share, which takes into account the fund's current maximum sales charge)
INVESTMENT RESULTS The fund's yield is 7.95% based on a 30-day (or one month) period ended December 31, 1994, computed by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the period, according to the following formula: YIELD = 2[( a-b/cd + 1)/6/ -1] Where: a = dividends and interest earned during the period. b = expenses accrued for the period (net of reimbursements). c = the average daily number of shares outstanding during the period that were entitled to receive dividends. d = the maximum offering price per share on the last day of the period. The fund's total return over the past twelve months and average annual total returns over the past 5-year and 10-year periods ending on December 31, 1994, were -9.52%, 7.52%, and 10.04%, respectively. The average total return ("T") is computed by equating the value at the end of the period ("ERV") with a hypothetical initial investment of $1,000 ("P") over a period of years ("n") according to the following formula as required by the Securities and Exchange Commission: P(1+T)/n/ = ERV. The following assumptions will be reflected in computations made in accordance with the formula stated above: (1) deduction of the maximum sales charge of 4.75% from the $1,000 initial investment; (2) reinvestment of dividends and distributions at net asset value on the reinvestment date determined by the Board; and (3) a complete redemption at the end of any period illustrated. The investment results for the fund (also referred to as "BFA") set forth below were calculated as described in the fund's prospectus. Data contained in Salomon Brothers' Market Performance and Lehman Brother's The Bond Market Report are used to calculate cumulative total return from their base period (12/31/79 and 12/31/72, respectively) for each index. The percentage increases shown in the table below or used in published reports of the fund are obtained by subtracting the index results at the beginning of the period from the index results at the end of the period and dividing the difference by the index results at the beginning of the period. THE FUND VS. VARIOUS UNMANAGED INDICES
Period The Fund Salomon Lehman Average 1/1 - 12/31 Brothers (1) Brothers (2) Savings Deposit (3) 1985 - 1994 + 160% + 160% + 175% + 77% 1984 - 1993 + 207 + 208 + 233 + 88 1983 - 1992 + 194 + 203 + 225 + 99 1982 - 1991 + 252 + 271 + 316 + 112 1981 - 1990 + 210 + 240 + 261 + 122 1980 - 1989 + 210 + 221 + 236 + 125 1979 - 1988 + 191 n/a + 189 + 125 1978 - 1987 + 168 n/a + 165 + 125 1977 - 1986 + 176 n/a + 167 + 125 1976 - 1985 + 184 n/a + 173 + 123 1975 - 1984 + 152 n/a + 157 + 119 1974*- 1983 + 134 n/a + 118 + 109
* From May 28. (1) The Salomon Brothers Broad Investment Grade Bond Index spans the available market for U.S. Treasury/Agency securities, investment grade corporate bonds which have a rating of BBB or better by Standard and Poor's Corporation, and mortgage pass-through securities. This index's inception date is 12/31/79. (2) The Lehman Brothers Corporate Bond Index is comprised of a large universe of bonds issued by industrial, utility and financial companies which have a minimum rating of Baa by Moody's Investors Service, BBB by Standard and Poor's Corporation or, in the case of bank bonds not rated by either of the previously mentioned services, BBB by Fitch Investors Service. (3) Based on figures supplied by the U.S. League of Savings Institutions and the Federal Reserve Board which reflect all kinds of savings deposits, including longer-term certificates. Savings accounts offer a guaranteed return of principal, but no opportunity for capital growth. During a portion of the period, the maximum rates paid on some savings deposits were fixed by law. IF YOU ARE CONSIDERING THE FUND FOR AN INDIVIDUAL RETIREMENT ACCOUNT . . .
Here's how much you would have if you had invested $2,000 on January 1 of each year in the Fund over the past 5 and 10 years: 5 Years 10 Years (1/1/90-12/31/94) (1/1/85-12/31/94) $11,832 $31,405
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
If you had invested ...and taken all $10,000 in the Fund distributions in shares, this many years ago... your investment would have been worth this much at Dec. 31, 1994 | Period | Number of Years 1/1-12/31 Value 1 1994 $ 9,048 2 1993 - 1994 10,325 3 1992 - 1994 11,500 4 1991 - 1994 13,914 5 1990 - 1994 14,371 6 1989 - 1994 15,827 7 1988 - 1994 17,515 8 1987 - 1994 17,863 9 1986 - 1994 20,572 10 1985 - 1994 26,039 11 1984 - 1994 29,157 12 1983 - 1994 31,924 13 1982 - 1994 42,433 14 1981 - 1994 45,221 15 1980 - 1994 46,825 16 1979 - 1994 48,307 17 1978 - 1994 49,289 18 1977 - 1994 51,827 19 1976 - 1994 61,237 20 1975 - 1994 68,988 21 1974*- 1994 71,582
* From May 28, 1974, the fund's inception date FUND COMPARISONS According to Lipper Analytical Services, during the period May 31, 1974 through December 31, 1994 (the fund's lifetime), the fund ranked first among the thirteen similar bond funds that were in existence for that period. The fund may also refer to results compiled by organizations such as CDA Investment Technologies, Ibbottson Associates, Lipper Analytical Services and Wiesenberger Investment Companies Services. Additionally, the Fund may, from time to time, refer to results published in various periodicals, including Barrons, Forbes, Institutional Investor, Kiplinger's Personal Finance Magazine, Money, U.S. News and World Report and The Wall Street Journal. In addition, the fund may also, from time to time, illustrate the benefits of tax deferral by comparing taxable investments to investments made through tax-deferred retirement plans. Past results are not an indication of future investment results. ILLUSTRATION OF A $10,000 INVESTMENT IN THE FUND WITH DIVIDENDS REINVESTED AND CAPITAL GAIN DISTRIBUTIONS TAKEN IN SHARES (For the lifetime of the Fund May 28, 1974 through December 31, 1994)
COST OF SHARES VALUE OF SHARES Fiscal Annual Dividends Total From From From Total Year End Dividends (cumulative) Investment Initial Capital Gains Dividends Value Dec. 31 Cost Investment Reinvested Reinvested 1974 $ 413 $ 413 $10,413 $ 9,473 $ 0 $ 411 $ 9,884 1975 897 1,310 11,310 9,799 0 1,338 11,137 1976 1,010 2,320 12,320 10,555 126 2,473 13,154 1977 1,114 3,434 13,434 10,125 240 3,466 13,831 1978 1,198 4,632 14,632 9,438 278 4,396 14,112 1979 1,387 6,019 16,019 8,848 260 5,448 14,556 1980 1,706 7,725 17,725 8,147 240 6,685 15,072 1981 2,096 9,821 19,821 7,564 222 8,287 16,073 1982 2,408 12,229 22,229 8,799 259 12,303 21,361 1983 2,529 14,758 24,758 8,612 253 14,517 23,382 1984 2,838 17,596 27,596 8,563 252 17,360 26,175 1985 3,193 20,789 30,789 9,722 286 23,132 33,140 1986 3,566 24,355 34,355 9,861 1,325 26,980 38,166 1987 3,746 28,101 38,101 9,119 1,225 28,571 38,915 1988 3,912 32,013 42,013 9,188 1,235 32,657 43,080 1989 4,425 36,438 46,438 9,181 1,234 37,028 47,443 1990 4,650 41,088 51,088 8,598 1,155 39,240 48,993 1991 4,859 45,947 55,947 9,507 1,277 48,519 59,303 1992 5,221 51,168 61,168 9,709 1,491 54,828 66,028 1993 5,269 56,437 66,437 10,028 3,501 61,833 75,362 199 5,673 62,110 72,110 8,806 3,075 59,701 71,582 4
The dollar amount of capital gain distributions during the period was $3,490 DESCRIPTION OF BOND RATINGS MOODY'S INVESTORS SERVICE, INC. rates the long-term debt securities issued by various entities from "Aaa" to "C," according to quality as described below: "AAA -- Best quality. These securities carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large, or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues." "AA -- High quality by all standards. They are rated lower than the best bond because margins of protection may not be as large as in Aaa securities, fluctuation of protective elements may be of greater amplitude, or there may be other elements present which make the long-term risks appear somewhat greater." "A -- Upper medium grade obligations. These bonds possess many favorable investment attributes. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future." "BAA -- Medium grade obligations. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and, in fact, have speculative characteristics as well." "BA -- Have speculative elements; future cannot be considered as well assured. The protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Bonds in this class are characterized by uncertainty of position." "B -- Generally lack characteristics of the desirable investment; assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small." "CAA -- Of poor standing. Issues may be in default or there may be present elements of danger with respect to principal or interest." "CA -- Speculative in a high degree; often in default or have other marked shortcomings." "C -- Lowest rated class of bonds; can be regarded as having extremely poor prospects of ever attaining any real investment standing." STANDARD & POOR'S CORPORATION rates the long-term securities debt of various entities in categories ranging from "AAA" to "D" according to quality as described below: "AAA -- Highest rating. Capacity to pay interest and repay principal is extremely strong." "AA -- High grade. Very strong capacity to pay interest and repay principal. Generally, these bonds differ from AAA issues only in a small degree." "A -- Have a strong capacity to pay interest and repay principal, although they are somewhat more susceptible to the adverse effects of change in circumstances and economic conditions, than debt in higher rated categories." "BBB -- Regarded as having adequate capacity to pay interest and repay principal. These bonds normally exhibit adequate protection parameters, but adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal than for debt in higher rated categories." "BB, B, CCC, CC, C -- Regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. BB indicates the lowest degree of speculation and C the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions." "C1 -- Reserved for income bonds on which no interest is being paid." "D -- In default and payment of interest and/or repayment of principal is in arrears." THE BOND FUND OF AMERICA INVESTMENT PORTFOLIO DECEMBER 31, 1994
THE BOND FUND OF AMERICA Market Percent Principal of INVESTMENT PORTFOLIO DECEMBER 31, 1994 Amount Value Net Assets (000) (000) ELECTRICAL & GAS UTILITIES UTILITIES: ELECTRICAL & GAS Big Rivers Electic Corp. 10.70% 2017 $17,000 $18,610 .38% CEZ Finance BV 8.875% 1999/1/ 3,000 2,977 0.06 CMS Energy 0%/9.50% 1997/2/ 2,000 1,860 0.04 Commonwealth Edison Co. 6.50% 2000 5,000 4,515 0.09 Coso Funding Corp. 8.87% 2001/1/ 7,500 7,215 0.15 Hero Asia (BVI) Co. Ltd. 9.11% 2001/1/ 5,000 4,826 0.1 Korea Electric Power Corp. 6.375% 2003 13,000 11,036 0.22 Long Island Lighting Co. 8.90% 2019 5,000 4,090 0.08 Midland Cogeneration Venture, LP 10.33% 2002 13,537 12,861 0.26 Midland Cogeneration Venture, LP, secured lease obligation bonds, 10.33% 2002 7,209 6,849 0.14 Transco Energy Co. 9.125% 1998 2,000 2,002 0.04 Transco Energy Co. 9.625% 2000 2,000 2,030 0.04 Transco Energy Co. 9.375% 2001 5,800 5,829 0.12 United Illuminating Co. 9.76% 2006 5,388 5,455 0.11 ---------- --------- - 90,155 1.45 ---------- --------- - INDUSTRIAL & SERVICE AUTOMOBILES General Motors Corp. 9.45% 2011 20,000 20,504 0.41 General Motors Corp. 8.80% 2021 50,000 51,191 1.04 ---------- --------- - 71,695 1.45 ---------- --------- - BEVERAGES & TOBACCO Canandaigua Wine Co., Inc. 8.75% 2003 5,000 4,550 0.09 Dr. Pepper Bottlng Co. of Texas 10.25% 2000 8,500 8,500 0.17 Dr. Pepper/Seven-Up Cos. 0%/11.50% 2002/2/ 5,572 4,416 0.09 RJR Nabisco, Inc. 8.75% 2004 5,000 4,606 0.09 RJR Nabisco, Inc. 8.75% 2005 4,000 3,647 0.07 RJR Nabisco, Inc. 9.25% 2013 6,000 5,396 0.11 ---------- --------- - 31,115 0.62 ---------- --------- - BROADCASTING & PUBLISHING Infinity Broadcasting Corp. 10.375% 2002 11,250 11,362 0.23 Marvel Holdings, Inc. 0% 1998 52,750 32,441 0.66 Univision Television Group, Inc. 11.75% 2001/1/ 5,500 5,748 0.12 Univision Television Group, Inc. 7.00% 2002/1/ 3,498 2,064 0.04 ---------- --------- - 51,615 1.05 ---------- --------- - CONSTRUCTION & HOUSING Del Webb Corp. 9.75% 2003 10,000 8,300 0.17 Kaufman & Broad Home Corp. 10.375% 1999 7,500 7,462 0.15 M.D.C. Holdings, Inc. 11.125% 2003 9,000 7,200 0.15 ---------- --------- - 22,962 0.47 ---------- --------- - DATA PROCESSING & REPRODUCTION Data General Corp. 7.75% convertible debentures 2001 8,000 6,920 0.14 Data General Corp. 8.375% 2002 1,250 1,084 0.02 Digital Equipment Corp. 7.125% 2002 6,500 5,377 0.11 Maxtor Corp. 5.75% convertible debentures 2012 2,000 1,050 0.02 Neodata Services, Inc. 0%/12.00% 2003/2/ 12,000 9,360 0.19 Unisys Corp. 15.00% 1997 4,000 4,280 0.09 ---------- --------- - 28,071 0.57 ---------- --------- - DIVERSIFIED MEDIA & CABLE TELEVISION Adelphia Communications Corp. 9.50% 2004 3,507 2,359 0.05 American Media Operations, Inc. 11.625% 2004 2,000 2,050 0.04 Bell Cablemedia PLC 0%/11.95% 2004/2/ 36,000 19,260 0.39 Cablevision Industries Corp. 10.75% 2004 1,000 1,000 0.02 Cablevision Industries Corp. 9.875% 2013 5,000 4,500 0.09 Century Communications Corp. 9.50% 2000 5,650 5,424 0.11 Century Communications Corp. 9.75% 2002 5,550 5,328 0.11 Comcast Corp. 10.25% 2001 11,000 10,780 0.22 Comcast Corp. 1.125% convertible debentures 2007 25,000 10,062 0.2 Continental Cablevision, Inc. 8.50% 2001 22,050 20,506 0.42 Continental Cablevision, Inc. 10.625% 2002 4,500 4,511 0.09 Continental Cablevision, Inc. 8.625% 2003 4,000 3,640 0.07 Continental Cablevision, Inc. 8.875% 2005 12,000 10,860 0.22 Continental Cablevision, Inc. 11.00% 2007 4,000 4,060 0.08 Continental Cablevision, Inc. 9.00% 2008 12,000 10,800 0.22 Continental Cablevision, Inc. 9.50 % 2013 13,000 11,895 0.24 Insight Communications Co. 8.25% 2000/3/ 11,250 10,575 0.21 International CableTel Inc. 0%/10.875% 2003/2/ 9,000 4,770 0.1 News America Holdings Inc. 9.125% 1999 7,000 7,056 0.14 News America Holdings Inc. 12.00% 2001 4,250 4,722 0.1 News America Holdings Inc. 8.625% 2003 7,000 6,809 0.14 News America Holdings Inc. 10.125% 2012 27,500 28,366 0.58 News America Holdings Inc. 9.25% 2013 15,000 14,592 0.3 News America Holdings Inc. 8.625% 2014 3,250 1,890 0.04 News America Holdings Inc. 8.45% 2034 10,000 9,592 0.19 Rogers Communications Inc. 10.875% 2004 3,500 3,552 0.07 Storer Communications, Inc. 10.00% 2003 12,087 11,362 0.23 Tele-Communications, Inc. 7.375% 2000 6,000 5,624 0.11 Tele-Communications, Inc. 10.125% 2001 2,500 2,613 0.05 Time Warner Inc. 7.95% 2000 5,000 4,687 0.09 Time Warner Inc. 9.625% 2002/1/ 21,000 21,181 0.43 Time Warner Inc. 10.15% 2012/1/ 10,000 10,063 0.2 Time Warner Inc. 8.875% 2012/1/,/3/ 5,000 4,548 0.09 Time Warner Inc. 0% convertible debentures 2012 100,000 30,500 0.62 TKR Cable I, Inc. 10.50% 2007 26,000 26,590 0.54 Turner Broadcasting System 0% 2007 15,000 5,888 0.12 Viacom International Inc. 9.125% 1999 5,000 4,950 0.1 Viacom International Inc. 10.25% 2001 1,600 1,636 0.03 Videotron Holdings PLC 0%/11.125% 2004/2/ 16,500 8,663 0.18 ---------- --------- - 357,264 7.23 ---------- --------- - ELECTRICAL & ELECTRONICS General Electric Co. 8.625% 2008 3,000 3,084 0.06 MagneTek, Inc. 10.75% 1998 7,500 7,500 0.15 Samsung Electronics Co., Ltd. 8.50% 2002/1/ 27,850 26,590 0.54 Westinghouse Electric Corp. 8.875% 2001 4,000 3,855 0.08 Westinghouse Electric Corp. 8.375% 2002 7,000 6,504 0.13 ---------- --------- - 47,533 0.96 ---------- --------- - ENERGY & RELATED COMPANIES BP America Inc. 10.00% 2018 4,000 4,339 0.09 California Energy Co., Inc. 0%/10.25% 2004/2/ 33,600 24,024 0.49 Global Marine Inc. 12.75% 1999 12,750 13,706 0.28 Maxus Energy Corp. 9.875% 2002 5,500 4,785 0.1 Occidental Petroleum Corp. 9.25% 2019 12,000 12,521 0.25 Oryx Energy Co. 9.30% 1996 6,000 5,975 0.12 Oryx Energy Co. 9.50% 1999 3,500 3,351 0.07 Petronas 6.875% 2003/2/ 6,000 5,378 0.11 Subic Power Corp. 9.50% 2008/1/ 8,448 7,244 0.15 ---------- --------- - 81,323 1.66 ---------- --------- - FOOD RETAILING Ralphs Grocery Co. 10.25% 2002 16,700 16,408 0.33 Ralphs Grocery Co. 9.00% 2003 4,000 3,880 0.08 Safeway Inc. 10.00% 2002 1,500 1,530 0.03 Smith's Food & Drug Centers, Inc., Series 94A2, 0%/8.64% 2012/2/ 12,000 11,046 0.22 Star Markets Co., Inc. 13.00% 2004/1/ 1,500 1,530 0.03 Stater Brothers Holdings, Inc. 11.00% 2001 9,500 8,883 0.18 Vons Companies, Inc. 9.625% 2002 8,000 7,840 0.16 ---------- --------- - 51,117 1.03 ---------- --------- - FOREST PRODUCTS & PAPER Container Corp. of America 9.75% 2003 38,000 36,290 0.74 Container Corp. of America 11.25% 2004 2,500 2,562 0.05 Fort Howard Corp. 9.25% 2001 7,750 7,246 0.15 Fort Howard Corp. 10.00% 2003 9,750 9,116 0.18 Fort Howard Paper Co. 8.25% 2002 3,000 2,685 0.05 Fort Howard Paper Co. 9.00% 2006 6,750 5,805 0.12 Grupo Industrial Durango SA de CV 9.6875% 1996/1/,/3/ 7,500 7,200 0.15 Klabin Fabricadora de Papel e Celulose SA 10.00% 2001 2,500 2,213 0.04 P.T. Indah Kiat Paper & Pulp Corp. 11.375% 1999/1/ 4,500 4,388 0.09 P.T. Indah Kiat Paper & Pulp Corp. 8.875% 2000/1/ 9,135 7,947 0.16 P.T. Indorayon Yankee 9.125% 2000 3,000 2,445 0.05 Pacific Lumber Co. 10.50% 2003 500 465 0.01 Riverwood International Corp. 10.75% 2000 12,000 12,210 0.25 Riverwood International Corp. 11.25% 2002 5,000 5,137 0.1 Riverwood International Corp., Series II 10.75% 2000 3,500 3,561 0.07 Tjiwi Kimia International Finance Co. 13.25% 2001 10,250 10,352 0.21 ---------- --------- - 119,622 2.42 ---------- --------- - GENERAL RETAILING & MERCHANDISING Allied Supermarkets Inc. 6.625% 1998 3,590 3,267 0.07 Ann Taylor 8.75% 2000 5,000 4,725 0.1 Barnes & Noble, Inc. 11.875% 2003/1/ 10,500 11,235 0.23 CompUSA, Inc. 9.50% 2000 6,000 4,980 0.1 Dayton Hudson Corp. 9.52% 2015 7,500 8,197 0.17 Dayton Hudson Corp. 9.35% 2020 6,000 6,528 0.13 Levitz Furniture Corp. 12.375% 1997 7,750 7,982 0.16 Payless Cashways, Inc. 9.125% 2003 7,000 6,265 0.13 Thrifty Payless, Inc. 11.75% 2003 11,500 11,270 0.23 Thrifty Payless, Inc. 12.25% 2004 1,500 1,410 0.03 Thrifty Payless, Inc. 12.25% 2004 5,000 5,050 0.1 ---------- --------- - 70,909 1.45 ---------- --------- - HEALTH & PERSONAL CARE FHP International Corp. 7.00% 2003 5,000 4,440 0.09 ---------- --------- - LEISURE & TOURISM Circus Circus Enterprises, Inc. 10.625% 1997 8,000 8,233 0.17 Embassy Suites, Inc. 8.75% 2000 3,000 2,820 0.06 Euro Disney S.C.A. 6.75% convertible debentures 2001 FF108,780 14,441 0.29 Foodmaker, Inc. 9.25% 1999 $12,200 10,370 0.21 Foodmaker, Inc. 9.75% 2002 4,300 3,268 0.07 Four Seasons Hotels Inc. 9.125% 2000 6,000 5,520 0.11 Host Marriott Hospitality, Inc. 9.125% 2000 5,833 5,753 0.12 Host Marriott Hospitality, Inc. 10.375% 2011 1,480 1,480 0.03 Kloster Cruise Ltd. 13.00% 2003 13,500 12,150 0.25 Six Flags Corp. 0% 1999 22,000 13,690 0.28 ---------- --------- - 77,725 1.59 ---------- --------- - MACHINERY & ENGINEERING Coleman Holdings, Inc. 0% 1998 3,500 2,354 0.05 Coltec Industries 9.75% 1999 7,000 6,860 0.14 Coltec Industries 9.75% 2000 7,500 7,350 0.15 John Deere Capital Corp. 8.625% 2019 9,150 9,296 0.19 ---------- --------- - 25,860 0.53 ---------- --------- - METALS Acme Metals Inc. 0%/13.50% 2004/2/ 9,000 6,075 0.12 Armco Inc. 11.375% 1999 12,000 12,000 0.24 ISPAT Mexicana (Euro) 10.375% 2001 4,650 3,976 0.08 ISPAT Mexicana 10.375% 2001/1/ 5,000 4,275 0.09 Kaiser Aluminum and Chemical Corp. 12.75% 2003 2,500 2,519 0.05 Pohang Iron & Steel Co., Ltd. 7.50% 2002 10,000 9,282 0.19 Tubos de Acero de Mexico, SA 13.750% 1999/1/ 2,500 2,363 0.05 USX Corp. 9.625% 2003 6,000 6,157 0.12 USX Corp. 0% convertible debentures 2005 40,000 17,500 0.35 USX Corp. 9.125% 2013 5,000 4,770 0.1 ---------- --------- - 68,917 1.39 ---------- --------- - MISCELLANEOUS MATERIALS & COMMODITIES Anchor Glass Container Corp. 10.25% 2002 3,000 2,850 0.06 Hyster-Yale Materials Handling, Inc. 12.375% 1999 447 469 0.01 Owens-Illinois, Inc. 11.00% 2003 7,000 7,263 0.15 Tolmex, SA de CV 8.375% 2003 5,500 3,960 0.08 ---------- --------- - 14,542 0.3 ---------- --------- - MULTI-INDUSTRY Hanson America, Inc. 144A 2.39% convertible debentures 2001/1/ 40,000 28,600 0.58 Tenneco Inc. 7.875% 2002 3,000 2,851 0.06 Tenneco Inc. 10.00% 2008 8,720 9,543 0.19 ---------- --------- - 40,994 0.83 ---------- --------- - OTHER United States Banknote Co. 10.375% 2002 1,500 1,275 0.03 ---------- --------- - TELECOMMUNICATIONS Cellular Inc. 0%/11.75% 2003/2/ 10,500 6,930 0.14 CenCall Communications Corp. 10.125% 2004 33,500 11,725 0.24 Centennial Cellular Corp. 8.875% 2001 19,000 16,815 0.34 Comcast Cellular Corp., Series A, 0% 2000 23,500 15,862 0.32 Comcast Cellular Corp., Series B, 0% 2000 29,400 19,845 0.4 Dial Call Communications, Inc. 0%/12.25% 2004/2/ 38,750 13,562 0.27 GTE Corp. 8.85% 1998 9,500 9,591 0.19 Horizon Cellular Telephone Co., LP 0%/11.375% 2000/2/ 13,000 9,165 0.19 MFS Communications Co., Inc. 0%/9.375% 2004/2/ 35,000 21,000 0.43 MobileMedia Communications, Inc. 0%/10.50% 2003/2/ 14,600 7,884 0.16 NEXTEL Communications, Inc. 0%/11.50% 2003/2/ 56,000 21,840 0.44 NEXTEL Communications, Inc. 0%/9.75% 2004/2/ 60,000 21,000 0.43 Northern Telecom Ltd. 8.75% 2001 3,500 3,544 0.07 Paging Network, Inc. 11.75% 2002 11,675 11,675 0.24 Paging Network, Inc. 8.875% 2006 2,000 1,560 0.03 PanAmSat, LP PanAmSat Capital Corp. 0%/11.375% 2003/2/ 14,000 8,750 0.18 PanAmSat, LP PanAmSat Capital Corp. 9.75% 2000 9,800 9,237 0.19 PriCellular Wireless Corp. 0%/14.00% 2001/2/ 3,500 2,328 0.05 Rogers Cantel Mobile Communications Inc. 10.75% 2001 38,475 38,956 0.79 ---------- --------- - 251,269 5.1 ---------- --------- - TEXTILES & APPAREL VF Corp. 9.25% 2022 4,000 4,032 0.08 Westpoint Stevens Inc. 8.75% 2001 4,500 4,140 0.08 ---------- --------- - 8,172 0.16 ---------- --------- - TRANSPORTATION Air Wis Services, Inc. 7.75% convertible debentures 2010 4,000 2,440 0.05 Alaska Air Lyon 0% convertible debentures 2006 23,750 9,916 0.2 Alaska Airlines, Series A, 9.50% 2010 2,461 2,236 0.05 Alaska Airlines, Series B, 9.50% 2010 3,092 2,806 0.06 Alaska Airlines, Series C, 9.50% 2010 3,002 2,705 0.05 Alaska Airlines, Series D, 9.50% 2012 4,990 4,513 0.09 American Airlines, Inc., 1991-A, pass-through certificates, 9.71% 2007/1/, 4 9,496 9,131 0.18 AMR Corp. 9.00% 2012 7,500 6,732 0.14 Delta Air Lines, Inc. 8.25% 1996 6,000 5,937 0.12 Delta Air Lines, Inc. 9.875% 2000 8,000 7,971 0.16 Delta Air Lines, Inc. 10.375% 2011 2,500 2,444 0.05 Delta Air Lines, Inc. 10.00% 2014/1/ 3,000 2,700 0.05 Delta Air Lines, Inc., pass-through certificates, Series 1992-A2, 9.20% 2014/4/ 5,000 4,275 0.09 Delta Air Lines, Inc., pass-through certificates, Series 1992-B1, 9.375% 2007/4/ 9,495 8,866 0.18 Federal Express Corp. 8.40% 2010 10,000 9,245 0.19 NWA, Inc. 8.625% 1996 5,000 4,800 0.1 Northwest Airlines, Inc. 12.0916% 2000/1/ 7,973 7,813 0.16 TNT Transport (Euro) PLC/TNT (USA) Inc. 11.50% 2004 4,750 4,774 0.1 United Air Lines, Inc. 10.67% 2004 4,500 4,532 0.09 United Air Lines, Inc. 9.125% 2012 5,000 4,330 0.09 United Air Lines, Inc., pass-through certificates, Series 1993-A3, 8.39% 2011/4/ 7,500 6,315 0.13 Viking 9.625% 2003 7,000 6,510 0.13 ---------- --------- - 120,991 2.46 ---------- --------- - FINANCE BANKING & THRIFTS Bank of Scotland 8.80% 2004/1/ 16,000 16,123 0.33 CalFed Inc. 10.00% 2003 846 753 0.02 Chevy Chase Savings Bank, F.S.B. 9.25% 2005 3,500 2,940 0.06 Coast Federal Bank 13.00% 2002 5,000 5,500 0.11 Coast Savings Financial, Inc. 10.00% 2000 6,500 6,110 0.12 First Federal Michigan Eurobond 0% 2005 10,000 4,206 0.09 First Nationwide 12.25% 2001 9,000 9,045 0.18 First Nationwide 10.00% 2006 5,850 5,843 0.12 Midland American Capital 12.75% 2003 12,150 13,816 0.28 Skandinaviska Enskilda Banken (N.Y. City) 6.875% 2009 5,000 4,162 0.08 State Bank of New South Wales Euronotes 10.375% 1999 3,000 3,221 0.07 Union Bank Finland Ltd. 5.25% 1996 3,000 2,873 0.06 ---------- --------- - 74,592 1.52 ---------- --------- - FINANCIAL SERVICES Beneficial Corp. 12.875% 2013 3,800 4,449 0.09 Fairfax Financial Holdings Ltd. 7.75% 2003 7,750 6,870 0.14 Ford Motor Credit Co. 9.50% 2000 7,350 7,637 0.15 General Electric Capital Corp. 8.875% 2009 8,000 8,200 0.17 General Motors Acceptance Corp. 6.70% 1997 8,000 7,704 0.16 General Motors Acceptance Corp. 7.00% 2000 5,000 4,681 0.09 General Motors Acceptance Corp. 9.625% 2001 6,500 6,827 0.14 General Motors Acceptance Corp. 8.75% 2005 10,000 10,000 0.2 General Motors Acceptance Corp. 8.875% 2010 2,500 2,504 0.05 General Motors Acceptance Corp. International, medium-term note (Euro-Yen), 3.75% 1999 1000000 9,719 0.2 New American Capital, Inc. 9.60% 1999/1/ 15,000 14,813 0.3 Xerox Credit Corp. 10.125% 1999 5,000 5,113 0.1 ---------- --------- - 88,517 1.79 ---------- --------- - INSURANCE American Re Corp. 10.875% 2004 46,000 48,662 0.98 ---------- --------- - REAL ESTATE B.F. Saul REIT 11.625% 2002 13,500 11,340 0.23 Beverly Finance Corp. 8.36% 2004/1/ 15,000 14,284 0.29 Corporate Property Investors 9.00% 2002/1/ 15,000 15,206 0.31 Corporate Property Investors 7.75% 2004/1/ 7,500 7,023 0.14 Shopping Center Associates 6.75% 2004/1/ 7,500 6,514 0.13 ---------- --------- - 54,367 1.1 ---------- --------- - COLLATERALIZED MORTGAGE/ASSET-BACKED OBLIGATIONS/4/ (EXCLUDING THOSE ISSUED BY FEDERAL AGENCIES) Capstead Securities Corp., collateralized mortgage obligations, Series 1992-A, Class 10, 13.123% 2002 3,913 1,937 0.04 Capstead Securities Corp. IV, collateralized mortgage obligations, Series 1992-4, Class J, 24.231% 2002/5/ 8,750 8,312 0.17 Chase Manhattan Bank, N.A., Series 93-I, Class 2A5, 7.25% 2024 10,000 9,175 0.19 Countrywide Funding Corp., Series 94-2, Class A-12, 9.50341% 2009/5/ 5,206 2,291 0.05 GCC Home Equity Trust, asset-backed certificates, Series 1990-1, 10.00% 2005 5,667 5,678 0.11 G E Capital Mortgage Services,Series 1994-15, Class A10, 6.00% 2009 16,376 12,814 0.26 G E Capital Mortgage Services, Series 1994-10, Class A26, 9.152% 2024/5/ 6,009 1,562 0.03 Green Tree Financial Corp., pass-through certificates, Series 1994-A, Class NIM, 6.90% 2004 4,118 3,922 0.08 Green Tree Financial Corp., pass-through certificates, Series 1993-2, Class B, 8.00% 2018 2,250 1,993 0.04 Jet Equipment Trust Series 1994-A 10.91% 2006 7,000 7,014 0.14 MBNA Credit Card Trust, asset-backed certificates, Series 1991-1, 7.75% 1998 11,000 10,921 0.22 Prudential Home Mortgage Securities Co., Inc., Series 1993-48, Class A-6, 6.25% 2008 4,466 3,594 0.07 Prudential Home Mortgage Securities Co., Inc., Series 1992-46, Class A-13, 10.682% 2008/5/ 4,431 2,171 0.04 Prudential Home Mortgage Securities Co., Inc., Series 1992-37, Class A-6, 7.00% 2022 2,500 2,416 0.05 Prudential Home Mortgage Securities Co., Inc., Series 1993-7, Class A-4, 8.00% 2003 9,323 9,011 0.18 Prudential Home Mortgage Securities Co., Inc., Series 1993-7, Class A-5, 8.00% 2003 7,336 7,276 0.15 Residential Funding Mortgage Securities I, Inc., Series 1992-S22, Class A-5, 8.00% 2005 221 220 0 Residential Funding Mortgage Securities I, Inc., Series 1993-48, Class A-10, 8.2331% 2008 4,598 2,391 0.05 Residential Funding Mortgage Securities I, Inc., Series 1991-S5, Class A-8, 9.225% 2021 83 83 0 Residential Funding Mortgage Securities I, Inc., Series 1992-S6, Class A-10, 15.333% 2022/5/ 10,124 7,897 0.16 Resolution Trust Corp., Series 1991-M5, Class B, 9.00% 2017 2,806 2,701 0.05 Resolution Trust Corp., Series 1992-C5, Class C, 8.85% 2022 10,404 9,832 0.2 Resolution Trust Corp., Series 1992-6, Class A-2B, 8.40% 2024 10,602 10,443 0.21 Resolution Trust Corp., Series 1992-C6, Class C, 8.00% 2024 7,257 6,595 0.13 Resolution Trust Corp., Series 1993-C1, Class D, 9.45% 2024 9,352 8,943 0.18 Resolution Trust Corp., Series 1993-C1, Class E, 9.50% 2024 1,042 992 0.02 Resolution Trust Corp., Series 1993-C2, Class C, 8.00% 2025 3,000 2,738 0.06 Resolution Trust Corp., Series 1993-C2, Class D, 8.50% 2025 3,290 3,075 0.06 Resolution Trust Corp., Series 1993-C2, Class E, 8.50% 2025 1,244 1,172 0.02 Ryland Mortgage Securities Corp., Series 1991-14, Class F, 26.374% 2021/5/ 1,070 1,188 0.02 Sears Credit Account Trust, Series 1991-C, 8.65% 1998 20,000 20,162 0.41 Standard Credit Card Master Trust I, credit card participation certificates, Series 1991-1A, 8.50% 1997 20,500 20,654 0.42 Standard Credit Card Master Trust I, credit card participation certificates, Series 1994-2A, 7.25% 2008 5,000 4,563 0.09 Standard Credit Card Trust, credit card participation certificates, Series 1990-3A, 9.50% 1998 5,000 5,136 0.1 Standard Credit Card Trust, credit card participation certificates, Series 1990-6A, 9.375% 1998 9,500 9,737 0.2 Standard Credit Card Trust, credit card participation certificates, Series 1991-3A, 8.875% 1999 11,000 11,223 0.23 Travelers Mortgage Services, Inc., pass-through certificates, Series 1989-9, Class Z-2, 8.80% 2019 1,003 978 0.02 ---------- --------- - 220,810 4.45 ---------- --------- - GOVERNMENTAL GOVERNMENTS (EXCLUDING U.S. GOVERNMENT) Argentina (Republic of) 8.37% 2003 14,000 9,975 0.2 Argentina (Republic of) 4.00% 2023 15,000 6,356 0.13 Argentina Bocon 4.3125% 2001 11,500 6,692 0.14 British Columbia Hydro & Power Authority 15.50% 2011/1/ 17,000 19,743 0.4 British Columbia Hydro & Power Authority 15.50% 2011/1/ 11,967 14,127 0.29 British Columbia Hydro & Power Authority 12.50% 2013/3/ 4,000 4,637 0.09 British Columbia Hydro & Power Authority 12.50% 2014/4/ 7,000 8,165 0.17 Canadian Government 8.75% 1996 C$40,000 28,541 0.58 Canadian Government 9.25% 1996 46,250 33,252 0.67 Canadian Government 10.50% 2001 3,000 2,280 0.05 Canadian Government 4.25% 2021 1,000 661 0.01 Italian Government National 8.50% 1999 ITL5,000,0 2,706 0.05 00 Italian Government National 8.50% 2004 3,200,000 1,601 0.03 Italian Government National 8.50% 2004 12,500,000 6,185 0.13 Italy (Republic of) 6.875% 2023 $20000 15,754 0.32 Manitoba (Province of) 9.25% 2020 5,000 5,252 0.11 National Bank of Hungary 8.80% 2002 3,500 3,080 0.06 Netherlands Government DFL 7.50% 2023 FL5,000 2,711 0.05 New South Wales Treasury 6.50% 2006 A$3,000 1,711 0.03 Nova Scotia (Province of) 7.25% 2013 $ 4000 3,384 0.07 Nova Scotia (Province of) 11.50% 2013 2,212 2,460 0.05 Ontario (Province of) 7.75% 2002 3,500 3,381 0.07 Ontario (Province of) 17.00% 2011 11,250 13,535 0.27 Ontario (Province of) 15.25% 2012 6,985 8,443 0.17 Ontario (Province of) 11.50% 2013 5,000 5,553 0.11 Petroleo Brasileiro S.A. 9.275% debentures 1998/3/ 7,500 7,613 0.15 Quebec (Province of) 13.25% 2014 5,500 6,672 0.14 Queensland Global Treasury Note 8.00% 2001 17,000 11,701 0.24 Queensland Global Treasury Note 12.00% 2001 5,000 4,190 0.08 Spain (Kingdom of) 11.45% 1998 PTA600,000 4,530 0.09 Spain (Kingdom of) 10.50% 2003 600,000 4,231 0.09 United Mexican States Government Eurobonds, Series A, 6.25% 2019 1,000 538 0.01 United Mexican States Government Eurobonds, Series B, 6.25% 2019 6,500 3,494 0.07 ---------- --------- - 253,154 5.12 ---------- --------- - DEVELOPMENT AUTHORITIES Inter-American Development Bank 8.875% 2009 10,000 10,585 0.21 International Bank for Reconstruction & Development 14.90% 1997 2,500 2,854 0.06 ---------- --------- - 13,439 0.27 ---------- --------- - FEDERAL AGENCY OBLIGATIONS - MORTGAGE PASS-THROUGHS/4/ Federal Home Loan Mortgage Corp. 8.00% 2003-2010 Federal Home Loan Mortgage Corp. 8.00% 2003-2010 Federal Home Loan Mortgage Corp. 8.00% 2003-2010 Federal Home Loan Mortgage Corp. 8.00% 2003-2010 Federal Home Loan Mortgage Corp. 8.00% 2003-2010 Federal Home Loan Mortgage Corp. 8.00% 2003-2010 9,114 8,740 0.18 Federal Home Loan Mortgage Corp. 8.25% 2007 Federal Home Loan Mortgage Corp. 8.25% 2007 Federal Home Loan Mortgage Corp. 8.25% 2007 4,011 3,874 0.08 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 Federal Home Loan Mortgage Corp. 8.50% 2002-2020 16,442 16,172 0.33 Federal Home Loan Mortgage Corp. 8.75% 2008 Federal Home Loan Mortgage Corp. 8.75% 2008 Federal Home Loan Mortgage Corp. 8.75% 2008 Federal Home Loan Mortgage Corp. 8.75% 2008 Federal Home Loan Mortgage Corp. 8.75% 2008 5,267 5,191 0.11 Federal Home Loan Mortgage Corp. 9.00% 2021 1,548 1,557 0.03 Federal Home Loan Mortgage Corp. 10.00% 2011-2019 Federal Home Loan Mortgage Corp. 10.00% 2011-2019 Federal Home Loan Mortgage Corp. 10.00% 2011-2019 960 1,001 0.02 Federal Home Loan Mortgage Corp. 10.75% 2010 Federal Home Loan Mortgage Corp. 10.75% 2010 Federal Home Loan Mortgage Corp. 10.75% 2010 220 235 0 Federal Home Loan Mortgage Corp. 11.50% 2000 Federal Home Loan Mortgage Corp. 11.50% 2000 Federal Home Loan Mortgage Corp. 11.50% 2000 79 84 0 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 Federal Home Loan Mortgage Corp. 12.00% 2010-2015 2,542 2,749 0.06 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 Federal Home Loan Mortgage Corp. 12.50% 2009-2019 2,816 3,212 0.07 Federal Home Loan Mortgage Corp. 12.75% 2015-2019 Federal Home Loan Mortgage Corp. 12.75% 2015-2019 Federal Home Loan Mortgage Corp. 12.75% 2015-2019 963 1,095 0.02 Federal Home Loan Mortgage Corp. 13.00% 2014 80 92 0 Federal Home Loan Mortgage Corp. 13.50% 2018 50 58 0 Federal Home Loan Mortgage Corp. 13.75% 2014 40 45 0 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 Federal National Mortgage Assn. 7.00% 2013-2023 34,509 31,318 0.63 Federal National Mortgage Assn. 7.50% 2023-2024 Federal National Mortgage Assn. 7.50% 2023-2024 Federal National Mortgage Assn. 7.50% 2023-2024 Federal National Mortgage Assn. 7.50% 2023-2024 Federal National Mortgage Assn. 7.50% 2023-2024 FNCI POOL #286168 7.500% 06-01-09 FNCI POOL #292811 7.500% 10-01-09 FNCI POOL #292956 7.500% 10-01-09 FNCI POOL #294214 7.500% 10-01-09 FNCI POOL #296707 7.500% 10-01-09 Federal National Mortgage Assn. 7.50% 2023-2024 18,472 17,366 0.35 Federal National Mortgage Assn. 8.00% 2023 Federal National Mortgage Assn. 8.00% 2023 Federal National Mortgage Assn. 8.00% 2023 3,985 3,817 0.08 Federal National Mortgage Assn. 8.50% 2022-2023 Federal National Mortgage Assn. 8.50% 2022-2023 Federal National Mortgage Assn. 8.50% 2022-2023 Federal National Mortgage Assn. 8.50% 2022-2023 9,083 8,936 0.18 Federal National Mortgage Assn. 9.00% 2018-2025 Federal National Mortgage Assn. 9.00% 2018-2025 Federal National Mortgage Assn. 9.00% 2018-2025 6,020 6,051 0.12 Federal National Mortgage Assn. 11.00% 2015 213 229 0 Federal National Mortgage Assn. 11.25% 2014 110 118 0 Federal National Mortgage Assn. 11.50% 2010-2014 Federal National Mortgage Assn. 11.50% 2010-2014 Federal National Mortgage Assn. 11.50% 2010-2014 454 493 0.01 Federal National Mortgage Assn. 12.00% 2015-2019 Federal National Mortgage Assn. 12.00% 2015-2019 Federal National Mortgage Assn. 12.00% 2015-2019 229 251 0.01 Federal National Mortgage Assn. 12.50% 2015 Federal National Mortgage Assn. 12.50% 2015 Federal National Mortgage Assn. 12.50% 2015 508 559 0.01 Federal National Mortgage Assn. 13.00% 2014 67 77 0 Federal National Mortgage Assn. 13.25% 2015 28 32 0 Federal National Mortgage Assn. 15.00% 2013 99 114 0 Government National Mortgage Assn. 4.50% 2023-2024 Government National Mortgage Assn. 4.50% 2023-2024 Government National Mortgage Assn. 4.50% 2023-2024 Government National Mortgage Assn. 4.50% 2023-2024 Government National Mortgage Assn. 4.50% 2023-2024 Government National Mortgage Assn. 4.50% 2023-2024/3/ 159,115 144,758 2.93 Government National Mortgage Assn. 5.00% 2024 Government National Mortgage Assn. 5.00% 2024 Government National Mortgage Assn. 5.00% 2024 Government National Mortgage Assn. 5.00% 2024 Government National Mortgage Assn. 5.00% 2024 Government National Mortgage Assn. 5.00% 2024 Government National Mortgage Assn. 5.00% 2024/3/ 66,023 61,131 1.24 Government National Mortgage Assn. 5.50% 2024 Government National Mortgage Assn. 5.50% 2024 Government National Mortgage Assn. 5.50% 2024/3/ 1,921 1,809 0.04 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 Government National Mortgage Assn. 6.50% 2023-2024 38,758 33,587 0.68 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 Government National Mortgage Assn. 7.00% 2022-2025 79,215 71,154 1.44 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2022-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2017-2024 Government National Mortgage Assn. 7.50% 2022-2024 Government National Mortgage Assn. 7.50% 2022-2024 Government National Mortgage Assn. 7.50% 2022-2024 58,614 54,417 1.1 Government National Mortgage Assn. 8.00% 2017-2023 Government National Mortgage Assn. 8.00% 2017-2023 Government National Mortgage Assn. 8.00% 2017-2023 Government National Mortgage Assn. 8.00% 2017-2023 4,167 4,013 0.08 Government National Mortgage Assn. 8.50% 2020 2,153 2,116 0.04 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2021 Government National Mortgage Assn. 9.00% 2016-2024 Government National Mortgage Assn. 9.00% 2016-2024 Government National Mortgage Assn. 9.00% 2016-2024 Government National Mortgage Assn. 9.00% 2016-2024 Government National Mortgage Assn. 9.00% 2016-2024 13,111 13,226 0.27 Government National Mortgage Assn. 9.50% 2017-2020 Government National Mortgage Assn. 9.50% 2017-2020 Government National Mortgage Assn. 9.50% 2017-2020 Government National Mortgage Assn. 9.50% 2017-2020 3,172 3,272 0.07 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 Government National Mortgage Assn. 10.00% 2017-2019 3,665 3,852 0.08 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 Government National Mortgage Assn. 10.50% 2015-2019 1,224 1,305 0.03 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 Government National Mortgage Assn. 11.00% 2013-2016 2,177 2,365 0.05 Government National Mortgage Assn. 11.50% 2015 82 90 0 Government National Mortgage Assn. 12.00% 2014 201 218 0 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 Government National Mortgage Assn. 12.50% 2010-2015 1,388 1,559 0.03 Government National Mortgage Assn. 13.25% 2014 Government National Mortgage Assn. 13.25% 2014 Government National Mortgage Assn. 13.25% 2014 113 126 0 ---------- --------- - 512,464 10.37 ---------- --------- - FEDERAL AGENCY OBLIGATION - OTHER Federal Home Loan Bank Bonds 6.00% 1996 10,000 9,787 0.2 Federal Home Loan Bank Bonds 8.23% 2004 5,000 4,830 0.1 Federal Home Loan Bank Notes 6.41% 2003 3,685 3,178 0.06 Federal Home Loan Bank Notes 6.16% 2004 24,000 20,625 0.42 Federal Home Loan Bank Notes 6.27% 2004 5,000 4,341 0.09 Federal Home Loan Mortgage Notes 5.74% 2003 6,500 5,450 0.11 Federal Home Loan Mortgage Notes 6.185% 2003 13,100 11,381 0.23 Federal Home Loan Mortgage Notes 6.24% 2003 2,900 2,508 0.05 Federal Home Loan Mortgage Notes 6.28% 2003 3,000 2,559 0.05 Federal Home Loan Mortgage Notes 6.30% 2003 2,000 1,756 0.04 Federal Home Loan Mortgage Notes 6.375% 2003 5,820 5,136 0.1 Federal Home Loan Mortgage Notes 6.39% 2003 4,500 3,960 0.08 Federal Home Loan Mortgage Notes 6.50% 2003 6,200 5,413 0.11 Federal Home Loan Mortgage Notes 6.19% 2004 6,000 5,137 0.1 Federal Home Loan Mortgage Notes 6.27% 2004 2,500 2,163 0.04 Federal Home Loan Mortgage Notes 7.29% 2004 6,000 5,535 0.11 Federal National Mortgage Association Notes 6.30% 1997 15,000 14,255 0.29 Federal National Mortgage Association, medium-term note, 5.20% 1998 15,000 13,733 0.28 Federal National Mortgage Association, medium-term note, 5.30% 1998 12,500 11,438 0.23 Federal National Mortgage Association, medium-term note, 6.14% 2004 13,000 11,239 0.23 FNSM Callable Principal STRIPS 0%/8.25% 2022/2/ 4,500 2,945 0.06 ---------- --------- - 147,369 2.98 ---------- --------- - COLLATERALIZED MORTGAGE OBLIGATIONS - FEDERAL AGENCIES/4/ Federal Home Loan Mortgage Corp., Series 1604, Class SA, 7.5067% 2008/5/ 2,000 1,015 0.02 Federal Home Loan Mortgage Corp., Series 1625, Class SC, 7.117803% 2008/5/ 3,000 1,515 0.03 Federal Home Loan Mortgage Corp., Series 1716, Claass A, 6.50% 2009 4,750 4,061 0.08 Federal Home Loan Mortgage Corp., Series 1082, Class B, 9.00% 2020 2,522 2,533 0.05 Federal Home Loan Mortgage Corp., Series 1574, Class AB, 6.50% 2023 4,338 2,533 0.05 Federal Home Loan Mortgage Corp., Series 21, Class GNMA SE, 8.0309% 2023/5/ 4,000 1,598 0.03 Federal Home Loan Mortgage Corp., Series 1657, Class SA, 8.6026% 2023/5/ 7,520 2,999 0.06 Federal Home Loan Mortgage Corp., Series 1673, Class SA, 6.7691% 2024/5/ 7,879 2,718 0.06 Federal Home Loan Mortgage Corp., Series 1671, Class O, 16.3085% 2024/5/ 13,330 4,399 0.09 Federal National Mortgage Assn., Series 90-142, Class J, 9.25% 2003 5,000 5,028 0.1 Federal National Mortgage Assn., Series 91-146, Class Z, 8.00% 2006 5,793 5,400 0.11 Federal National Mortgage Assn., Series 93-229, Class SB, 7.134% 2008/5/ 4,000 1,600 0.03 Federal National Mortgage Assn., Series 93-78, Class SB, 9.054% 2008 3,412 1,842 0.04 Federal National Mortgage Assn., Series 93-107, Class SA, 9.6212% 2008/5/ 5,906 3,278 0.07 Federal National Mortgage Assn., Series 91-65, Class X, 6.50% 2019 18,473 14,940 0.3 Federal National Mortgage Assn., Series 90-93, Class G, 5.50% 2020 1,500 1,190 0.02 Federal National Mortgage Assn., Series G93-19SJ, Class I, 1.7647% 2023/5/ 467 119 0 Federal National Mortgage Assn., Series 93-130, Class SA, 10.9133% 2023/5/ 3,758 1,747 0.04 Federal National Mortgage Assn., Series 93-120, Class SB, 10.9134% 2023/5/ 5,828 2,928 0.06 ---------- --------- - 61,443 1.24 ---------- --------- - U.S. TREASURY OBLIGATIONS 12.625% May 1995 15,000 15,340 0.31 8.875% February 1996 42,000 42,623 0.86 7.625% April 1996 30,000 30,052 0.61 9.375% April 1996 20,000 20,444 0.41 7.25% August 1996 20,000 19,884 0.4 8.00% October 1996 14,500 14,577 0.3 8.00% January 1997 63,000 63,325 1.28 8.50% April 1997 50,000 50,750 1.03 8.75% October 1997 7,500 7,669 0.16 8.875% November 1997 11,500 11,804 0.24 8.125% February 1998 207,000 208,586 4.22 9.25% August 1998 170,000 177,385 3.59 8.875% February 1999 21,000 21,735 0.44 9.125% May 1999 18,750 19,605 0.4 6.875% July 1999 42,000 40,425 0.82 8.875% May 2000 10,000 10,459 0.21 8.750% August 2000 25,000 26,023 0.53 8.50% November 2000 30,000 30,923 0.63 7.75% February 2001 5,000 4,980 0.1 13.125% May 2001 21,500 27,147 0.55 14.25% February 2002 7,000 9,399 0.19 6.375% August 2002 9,200 8,424 0.17 11.625% November 2002 70,000 85,093 1.72 11.625% November 2004 94,750 118,674 2.4 10.375% November 2009 7,000 8,127 0.16 14.00% November 2011 12,000 17,467 0.35 8.875% August 2017 31,500 34,315 0.69 6.25% August 2023 10,000 8,130 0.16 ---------- --------- - 1,133,365 22.93 ---------- --------- - FLOATING RATE EURODOLLAR NOTES (UNDATED)/3/ Allied Irish Banks Ltd. 6.187% 10,000 8,500 0.17 Bank of Nova Scotia 5.437% 15,000 11,903 0.24 Bergen Bank 5.4375% 5,000 3,913 0.08 Canadian Imperial Bank of Commerce 3.875% 18,500 14,800 0.3 Christiana Bank Og Kreditkasse 6.3125% 6,000 4,725 0.1 Financiere Credit Suisse 3.4375% 8,000 6,440 0.13 Hongkong and Shanghai Banking Corp. 5.5625% 10,000 8,050 0.16 Lloyds Bank FRN (#2) 5.412% 5,000 4,263 0.09 Lloyds Bank FRN (#3) 6.187% 5,000 4,213 0.09 National Bank of Canada 2.7187% 5,000 3,400 0.07 Standard Chartered Bank 7.00% 15,000 11,400 0.23 Standard Chartered Bank 5.025% 5,000 3,800 0.08 ---------- --------- - 85,407 1.74 ---------- --------- - EQUITY-TYPE SECURITIES & MISCELLANEOUS EQUITY-TYPE SECURITIES/6/ California Federal Bank, Inc., Class A 2,002 21,768 0.44 Dial Page, Inc., warrants 39 5 0 Glendale Federal Bank, warrants expire 03/10/00 8 8 0 ---------- --------- - 21,781 0.44 ---------- --------- - MISCELLANEOUS ASH Capital Finance, Ltd. 9.50% 2006 4,500 4,625 #DIV/0 #N/A 12,500 3,687 #DIV/0 #N/A 3,500 2,415 #DIV/0 #N/A 20,000 6,800 #DIV/0 Investment securities in the initial period of acquisition 17,527 0.35 ---------- --------- - TOTAL BONDS, NOTES AND EQUITY-TYPE SECURITIES ---------- --------- - (cost $4,718,738) 4,370,463 88.12 ---------- --------- - SHORT-TERM SECURITIES COMMERCIAL PAPER AIG Funding Inc. 5.80% due 1/3/95 20,000 19,990 0.4 AIG Funding Inc. 6.01% due 1/11/95 10,000 9,982 0.2 American Telephone and Telegraph Co. 5.45% due 1/12/95 25,000 24,953 0.51 Bayerische Landesbank Girozentrale 6.01% due 1/11/95 12,000 11,978 0.24 Beneficial Corp. 5.76% due 1/18/95 10,000 9,971 0.2 Beneficial Corp. 5.99% due 1/31/95 10,000 9,949 0.2 Beneficial Corp. 6.15% due 2/17/95 25,000 24,797 0.5 Commerzbank U.S. Finance Inc. 5.88% due 1/3/95 27,700 27,686 0.56 Deere & Co. 6.11% due 2/21/95 20,000 19,827 0.4 Eli Lilly & Co. 5.77% due 1/6/95 15,800 15,785 0.32 Ford Motor Credit Co. 6.03% due 1/5/95 15,000 14,988 0.3 Ford Motor Credit Co. 6.10% due 1/19/95 25,000 24,920 0.5 Ford Motor Credit Co. 5.81% due 1/20/95 23,350 23,275 0.47 Ford Motor Credit Co. 6.01% due 2/28/95 8,250 8,170 0.17 General Electric Capital Corp. 5.49% due 1/9/95 35,250 35,201 0.71 H.J. Heinz Co. 5.95% due 1/20/95 15,000 14,951 0.3 H.J. Heinz Co. 5.95% due 1/23/95 3,970 3,955 0.08 H.J. Heinz Co. 6.10% due 1/24/95 25,000 24,899 0.5 H.J. Heinz Co. 5.95% due 2/15/95 8,000 7,939 0.16 John Deere Capital Corp. 6.14% due 2/6/95 15,000 14,907 0.3 Kimberly-Clark Corp. 5.93% due 1/18/95 20,000 19,941 0.4 Miles, Inc. 5.80% due 1/19/95 20,000 19,939 0.4 Monsanto Co. 5.93% due 1/6/95 6,150 6,144 0.12 National Rural Utilities Cooperative Finance Corp. 5.94% due 1/12/95 10,000 9,980 0.2 Texaco Inc. 6.02% due 1/17/95 20,000 19,944 0.4 U S WEST Communications, Inc. 5.47% due 1/17/95 5,300 5,286 0.11 U S WEST Communications, Inc. 5.99% due 2/22/95 7,000 6,938 0.14 Xerox Corp. 5.89% due 2/6/95 22,000 21,868 0.44 Xerox Corp. 6.12% due 2/10/95 23,600 23,437 0.47 ---------- --------- - 481,600 9.7 ---------- --------- - Federal Agency Discount Notes Federal Farm Credit Banks 5.94% due 1/11/95 10,000 9,982 0.2 ---------- --------- - TOTAL SHORT-TERM SECURITIES (Cost $491,585) 491,582 9.9 ---------- --------- - TOTAL INVESTMENT SECURITIES (cost $5,210,323) 4,862,045 98.02 Excess of cash and receivables over payables 79,105 1.6 ---------- --------- - NET ASSETS 4,941,150 99.62 ========== =========
/1/ Purchased in a private placement transaction; resale to the public may require registration. /2/ Represents a zero coupon bond which will convert to an interest bearing security at a later date. /3/ Coupon rates may change periodically. /4/ Pass-through securities backed by a pool of mortgages or other loans on which principal payments are periodically made. Therefore, the effective maturity of these securities is shorter than the stated maturity. /5/ Represents an inverse floater, which is a floating rate note whose interest rate moves in the opposite direction of prevailing interest rates. /6/ Non-income-producing security See Notes to Financial Statements The Bond Fund of America FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994 (dollars in thousands) Assets: Investment securities at market (cost: $5,210,323) $4,862,045 Cash 3,838 Prepaid expense .................... Receivables for-- Sales of investments $19,418 Sales of Fund's shares 13,531 Dividends and accrued interest 86,501 119,450 ------------ -------------- - 4,985,333 Liabilities: Payables for-- Purchases of investments 29,639 Repurchases of fund's shares 11,087 Forward currency contracts 1,403 Management services 1,586 Accrued expenses 468 44,183 ------------ -------------- - Net Assets at December 31, 1994-- Equivalent to $12.69 per share on 389,436,473 shares of $1 par value capital stock outstanding (authorized capital stock - 500,000,000 shares) $4,941,150 ============== = STATEMENT OF OPERATIONS for the year ended December 31, 1994 (dollars in thousands) Investment Income: Income: Interest 430,119 Dividends from investment in stocks 20 $430,139 ------------ Expenses: Management services fee 18,755 Distribution expenses 11,347 Transfer agent fee 3,751 Reports to shareholders 175 Registration statement and prospectus 146 Postage, stationery and supplies 301 Directors' fees 37 Auditing and legal fees 46 Custodian fee 293 Taxes other than federal income tax 81 34,932 ------------ -------------- - Net investment income $395,207 ============== = Realized Loss and Unrealized Depreciation on Investments: Net realized loss (36,092) Net unrealized depreciation on Investments (624,178) Open forward currency contracts (2,363) ------------ Net unrealized depreciation (626,541) -------------- - Net realized loss and unrealized depreciation on investments (662,633) -------------- - Net Decrease in Net Assets Resulting ($267,426) from Operations ============== = STATEMENT OF CHANGES IN NET ASSETS (dollars in thousands) Year ended December 31 1994 1993 Operations: Net investment income $395,207 $352,923 Net realized gain(loss) on investments (36,092) 130,054 Net unrealized appreciation (depreciation) on investments (626,541) 121,833 ------------ -------------- - Net increase (decrease) in net assets resulting from operations (267,426) 604,810 ------------ -------------- - Dividends and Distributions Paid to Shareholders: Dividends from net investment income (396,205) (348,157) Distributions from net realized gain on investments -- (137,077) ------------ -------------- - Total dividends and distributions (396,205) (485,234) ------------ -------------- - Capital Share Transactions: Proceeds from shares sold: 99,296,409 and 127,144,414 shares, respectively 1,337,647 1,858,704 Proceeds from shares issued in reinvestment of net investment income dividends and distributions of net realized gain on investments: 20,827,138 and 24,515,759 shares, respectively 277,618 357,602 Cost of shares repurchased: 96,388,393 and 66,054,022 shares, respectively (1,295,101) (968,614) ------------ -------------- - Net increase in net assets resulting from capital share transactions 320,164 1,247,692 ------------ -------------- - Total Increase (Decrease) in Net Assets (343,467) 1,367,268 Net Assets: Beginning of year 5,284,617 3,917,349 ------------ -------------- - End of year (including undistributed net investment income: $10,433 and $10,941 respectively) 4,941,150 $5,284,617 ============ ============== =
See Notes to Financial Statements ***** NOTES TO FINANCIAL STATEMENTS 1. Bond Fund of America (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The following paragraphs summarize the significant accounting policies consistently followed by the fund in the preparation of its financial statements: Bonds and notes are valued at prices obtained from a bond-pricing service provided by a major dealer in bonds, when such prices are available; however, in circumstances where the investment adviser deems it appropriate to do so, such securities will be valued at the mean of their representative quoted bid and asked prices or, if such prices are not available, at the mean of such prices for securities of comparable maturity, quality and type. Securities denominated in non-U.S. currencies are generally valued on the basis of bid quotations. Equity-type securities are stated at market value based upon closing sales prices reported on recognized securities exchanges on the last business day of the period or, for listed securities having no sales reported and for unlisted securities, upon last-reported bid prices on that date. Short-term securities with original or remaining maturities in excess of 60 days, including forward currency contracts, are valued at the mean of their quoted bid and asked prices. Short-term securities with 60 days or less to maturity are valued at amortized cost, which approximates market value. The maturities of variable or floating rate instruments are deemed to be the time remaining until the next interest rate adjustment date. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by the Valuation Committee of the Board of Directors. As is customary in the mutual fund industry, securities transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses from securities transactions are reported on an identified cost basis. Interest income is reported on the accrual basis. Discounts on securities purchased are amortized over the life of the respective securities. The fund does not amortize premiums on securities purchased. Dividends are declared on a daily basis after determination of the fund's net asset value and are paid to shareholders on a monthly basis. Investment securities, including forward currency contracts, denominated in non-U.S. currencies are recorded in the financial statements after translation into U.S. dollars utilizing rates of exchange on the last business day of the year. Interest income from such investments is calculated using the approximate exchange rate as accrued or when received. Purchases and sales of investment securities and interest income are calculated using the approximate exchange rate as accrued. The fund does not identify the portion of each amount shown in the fund's Statement of Operations under the caption "Realized Loss and Unrealized Depreciation on Investments" that arises from changes in non-U.S. currency exchange rates. Pursuant to the custodian agreement, the fund receives credit against its custodian fee for imputed interest on certain balances with the with the custodian bank. The custodian fee of $293,000 includes $111,000 that was paid by credits rather than in cash. 2. It is the fund's policy to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income, including any net realized gain on investments, to its shareholders. Therefore, no federal income tax provision is required. As of December 31, 1994, net unrealized depreciation on investments, excluding forward currency contracts, for book and federal income tax purposes aggregated $348,278,000, of which $29,860,000 related to appreciated securities and $378,138,000 related to depreciated securities. During the year ended December 31, 1994, the fund realized, on a tax basis, a net capital loss of $36,090,000 on securities transactions. The fund has available at December 31, 1994, a net capital loss carryforward totaling $23,841,000 which may be used to offset capital gains realized during subsequent years through 2002 and thereby relieve the fund and its shareholders of any federal income tax liability with respect to capital gains that are so offset. It is the intention of the fund not to make distributions from capital gains while there is a capital loss carryforward. The cost of portfolio securities, excluding foreign currency contracts, for book and federal income tax purposes was $5,210,323,000 at December 31, 1994. 3. The fee of $18,755,0000 for management services was paid pursuant to an agreement with Capital Research and Management Company (CRMC), with which certain officers and Directors of the fund are affiliated. The Investment Advisory and Service Agreement provides for monthly fees, accrued daily, based on an annual rate of 0.30% of the first $60 million of average net assets; 0.21% of such assets in excess of $60 million but not exceeding $1 billion; 0.18% of such assets in excess of $1 billion but not exceeding $3 billion; and 0.16% of such assets in excess of $3 billion ("asset-based fee"); plus 3.00% on the first $450,000 of the fund's monthly gross investment income, plus 2.25% of such income in excess of $450,000 ("income-based fee"). Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its average net assets annually for any activities primarily intended to result in sales of fund shares, provided the categories of expenses for which reimbursement is made are approved by the fund's Board of Directors. Fund expenses under the Plan include payments to dealers to compensate them for their selling and servicing efforts. During the year ended December 31, 1994, distribution expenses under the Plan were $11,347,000. As of December 31, 1994, accrued and unpaid distribution expenses were $829,000. American Funds Service Company (AFS), the transfer agent for the fund, was paid a fee of $3,751,000. American Funds Distributors, Inc. (AFD), the principal underwriter of the fund's shares, received $4,562,000 (after allowances to dealers) as its portion of the sales charges paid by purchasers of the fund's shares. Such sales charges are not an expense of the fund and, hence, are not reflected in the accompanying statement of operations. CRMC is owned by The Capital Group, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC. Certain of the Directors and officers of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers, directors or employees of CRMC, AFS and AFD received any remuneration directly from the fund. 4. As of December 31, 1994, accumulated undistributed net realized loss on investments was $35,644,000 and paid-in capital was $4,926,606,000. The fund made purchases and sales of investment securities, excluding short-term securities, of $2,822,901,000 and $2,634,896,000, respectively, during the year ended December 31, 1994. The fund purchases forward currency contracts in anticipation of, or to protect itself against, fluctuations in exchange rates. The contracts are recorded at market value and reflect the extent of the fund's involvement in these financial instruments. Risks may arise upon entering these contracts from the potential inability of counterparties to meet the terms of their contracts and from the possible movements in foreign exchange rates and securities values underlying these instruments. The fund reclassified $7,850,000 from undistributed net realized gains to undistributed net investment income for the year ended December 31, 1994. At December 31, 1994, the fund had outstanding forward currency contracts to sell non-U.S. currencies as follows:
Contract Amount U.S. at 12/31/94 Valuations ------------ ----------- ------------ ------------ Unrealized Appreciation Non-U.S. currency contracts Non-U.S. U.S. Amount (Depreciation ) French Francs expiring 11/27/95 to 9/9/98 FF 70,000,000 $11,811,000 $13,051,000 ($1,240,000) Great Britain Pounds expiring 5/19/95 GB 3,325,000 4,996,000 5,205,000 (209,000) P Japanese Yen expiring 11/22/95 1,000,000,000 10,582,000 10,492,000 90,000 Netherland Guilders expiring 6/8/95 FL 4,820,000 2,753,000 2,797,000 (44,000) ----------- ----------- ---------- $30,142,000 $31,545,000 ($1,403,000) ============ ============ ==========
***** Per-Share Data and Ratios
Year Ended December 31 1994 1993 1992 1991 1990 Net asset value, beginning of years $14.45 $13.99 $13.70 $12.39 $13.23 ------- ------- ------- ------ ----- Income from investment operations: Net investment income 1.05 1.09 1.15 1.21 1.24 Net realized and unrealized gain(loss) on investments (1.76) 0.84 0.34 1.28 (0.84) ------- ------- ------- ------ ----- Total from investment operations (0.71) 1.93 1.49 2.49 0.40 ------- ------- ------- ------ ----- Less distributions: Dividends from net investment income (1.05) (1.08) (1.16) (1.18) (1.24) Distributions from capital gains -- (0.39) (0.04) -- -- ------- ------- ------- ------ ----- Total distributions (1.05) (1.47) (1.20) (1.18) (1.24) ------- ------- ------ ------ ----- Net asset value, end of year $12.69 $14.45 $13.99 $13.70 $12.39 ======== ======== ======= ====== ===== Total Return* (5.02%) 14.14% 11.34% 21.04% 3.27% Ratios/supplemental data: Net assets, end of period (in millions) $4,941 $5,285 $3,917 $2,859 $1,945 Ratio of expenses to average net assets .69% .71% .73% .77% .76% Ratio of net income to average net assets 7.77% 7.53% 8.36% 9.28% 9.70% Portfolio turnover rate 57.0% 44.7% 49.7% 56.5% 59.9%
*This was calculated without deducting a sales charge. The maximum sales charge is 4.75% of the fund's offering price. INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholders of The Bond Fund of America, Inc.: We have audited the accompanying statement of assets and liabilities, including the investment portfolio, of The Bond Fund of America, Inc., as of December 31, 1994, and the related statement of operations for the year then ended, the statement of changes in net assets for the two years then ended, and the per-share data and ratios for each of the five years in the period then ended. These financial statements and the per-share data and ratios are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and the per-share data and ratios based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and per-share data and ratios are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 1994 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and per-share data and ratios referred to above present fairly, in all material respects, the financial position of The Bond Fund of America, Inc., at December 31, 1994, the results of its operations, the changes in its net assets and the per-share data and ratios for the respective stated years, in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP Los Angeles, California January 27, 1995 PART C OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS. (A) FINANCIAL STATEMENTS. Included in Prospectus - Part A Financial Highlights Included in Statement of Additional Information - Part B Statement of Assets and Liabilities Statement of Operations Statement of Changes in Net Assets Notes to Financial Statements Per-Share Data and Ratios Report of Independent Accountants (B) EXHIBITS. 1. On file (see SEC files nos. 811-2444 and 2-50700) 2. On file (see SEC files nos. 811-2444 and 2-50700) 3. None. 4. On file (see SEC files nos. 811-2444 and 2-50700) 5. On file (see SEC files nos. 811-2444 and 2-50700) 6. On file (see SEC files nos. 811-2444 and 2-50700) 7. None. 8. On file (see SEC files nos. 811-2444 and 2-50700) 9. On file (see SEC files nos. 811-2444 and 2-50700) 10. Not applicable to this filing. 11. Consent of Independent Accountants 12. None. 13. None. 14. On file (see SEC files nos. 811-2444 and 2-50700) 15. On file (see SEC files nos. 811-2444 and 2-50700) 16. Updates to previously filed schedule for computation of each performance quotation provided in the Registration Statement in response to Item 22 (see SEC file nos. 811-2444 and 2-50700) ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. None. ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of December 31, 1994 Title of Class Number of Record Holders Capital Stock 220,050 ($1.00 par value)
ITEM 27. INDEMNIFICATION. Registrant is a joint-insured under an Investment Advisor/Mutual Fund Errors and Omissions Policy. The carrier of the primary policy in the amount of $15 million is American International Surplus Lines Insurance Company. The carrier of the secondary policy in the amount of $10 million is Chubb Custom Insurance Company. The carrier of the excess policy in the amount of $20 million is ICI Mutual Insurance Company Article VIII of the Articles of Incorporation of the Fund provides that "The Corporation shall indemnify (1) its directors to the full extent provided by the general laws of the State of Maryland now or hereafter in force, including the advance of expenses under the procedures provided by such laws; (2) its officers to the same extent it shall indemnify its directors; and (3) its officers who are not directors to such further extent as shall be authorized by the Board of Directors and be consistent with law. The foregoing shall not limit the authority of the Corporation to indemnify other employees and agents. Any indemnification by the Corporation shall be consistent with the requirements of law, including the Investment Company Act of 1940." Subsection (b) of Section 2-418 of the General Corporation Law of Maryland empowers a corporation to indemnify any person who was or is party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against reasonable expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually incurred by him in connection with such action, suit or proceeding unless it is proved that: (i) the act or omission of the person was material to the cause of action adjudicated in the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the person actually received an improper personal benefit of money, property or services; or (iii) with respect to any criminal action or proceeding, the person had reasonable cause to believe his act or omission was unlawful. Indemnification under subsection (b) of Section 2-418 may not be made by a corporation unless authorized for a specific proceeding after a determination has been made that indemnification is permissible in the circumstances because the party to be indemnified has met the standard of conduct set forth in subsection (b). This determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors not, at the time, parties to the proceeding, or, if such quorum cannot be obtained, then by a majority vote of a committee of the Board consisting solely of two or more directors not, at the time, parties to such proceeding and who were duly designated to act in the matter by a majority vote of the full Board in which the designated directors who are parties may participate; (ii) by special legal counsel selected by the Board of Directors of a committee of the Board by vote as set forth in subparagraph (i), or, if the requisite quorum of the full Board cannot be obtained therefor and the committee cannot be established, by a majority vote of the full Board in which any director who is a party may participate; or (iii) by the stockholders (except that shares held by any party to the specific proceeding may not be voted). A court of appropriate jurisdiction may also order indemnification if the court determines that a person seeking indemnification is entitled to reimbursement under subsection (b). Section 2-418 further provides that indemnification provided for by Section 2-418 shall not be deemed exclusive of any rights to which the indemnified party may be entitled; that the scope of indemnification extends to directors, officers, employees or agents of a constituent corporation absorbed in a consolidation or merger and persons serving in that capacity at the request of the constituent corporation for another; and empowers the corporation to purchase and maintain insurance on behalf of a director, officer, employee or agent of the corporation against any liability asserted against or incurred by such person in any such capacity or arising out of such person's status as such whether or not the corporation would have the power to indemnify such person against such liabilities under Section 2-418. ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER. None. ITEM 29. PRINCIPAL UNDERWRITERS. (a) American Funds Distributors, Inc. is also the Principal Underwriter of shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds Income Series, The American Funds Tax-Exempt Series I, The American Funds Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World Growth and Income Fund, Inc., The Cash Management Trust of America, EuroPacific Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc., Intermediate Bond Fund of America, The Investment Company of America, Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Money Fund of America, The U. S. Treasury Money Fund of America and Washington Mutual Investors Fund, Inc.
(B) (1) (2) (3) NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT # David L. Abzug Assistant Vice President None Robert B. Aprison Regional Vice President None 2983 Bryn Wood Drive Madison, WI 53711 # Richard Armstrong Assistant Vice President None * William W. Bagnard Vice President None Steven L. Barnes Vice President None 8000 Town Line Avenue South Suite 204 Minneapolis, MN 55438 Michelle A. Bergeron Regional Vice President None 1190 Rockmart Circle Kennesaw, GA 30144 Joseph T. Blair Vice President None 27 Drumlin Road West Simsbury, CT 06092 Ian B. Bodell Regional Vice President None 5900 Robert E. Lee Court Nashville, TN 37215 Michael L. Brethower Vice President None 108 Hagen Court Georgetown, TX 78628 C. Alan Brown Regional Vice President None 4619 McPherson Avenue St. Louis, MO 63108 * Daniel C. Brown Director, Sr. Vice President None @ J. Peter Burns Vice President None Brian C. Casey Regional Vice President None 9508 Cable Drive Kensington, MD 20895 Victor C. Cassato Vice President None 999 Green Oaks Drive Littleton, CO 80121 Christopher J. Cassin Regional Vice President None 231 Burlington Clarendon Hills, IL 60514 * Larry P. Clemmensen Director, Treasurer None * Kevin G. Clifford Senior Vice President None Ruth M. Collier Vice President None 145 West 67th St., Ste. 12K New York, NY 10023 Thomas E. Cournoyer Vice President None 2333 Granada Boulevard Coral Gables, FL 33134 Douglas A. Critchell Vice President None 1230 31st Street Washington, DC 20007 * Carl D. Cutting Vice President None Michael A. Dilella Vice President None P. O. Box 661 Ramsey, NJ 07446 G. Michael Dill Vice President None 3622 E. 87th Street Tulsa, OK 74137 Kirk D. Dodge Vice President None 2617 Salisbury Road Ann Arbor, MI 48103 Peter J. Doran Senior Vice President None 1205 Franklin Avenue Garden City, NY 11530 * Michael J. Downer Secretary Vice President Robert W. Durbin Vice President None 74 Sunny Lane Tiffin, OH 44883 % Lloyd G. Edwards Vice President None @ Richard A. Eychner Vice President None * Paul H. Fieberg Sr. Vice President None John R. Fodor Regional Vice President None 5 Marlborough Street, Suite 51 Boston, MA 02116 Steven S. Fogerty Regional Vice President None 535 Spring Club Drive Altamonte Springs, FL 32714 * Mark P. Freeman, Jr. Director, President None Clyde E. Gardner Vice President None Route 2, Box 3162 Osage Beach, MO 65065 # Evelyn K. Glassford Vice President None Jeffrey J. Greiner Regional Vice President None 5898 Heather Glen Court Dublin, OH 43017 * Paul G. Haaga, Jr. Director Chairman of the Board David E. Harper Vice President None R.D. 1, Box 210, Rte 519 Baptistown, NJ 08825 Ronald R. Hulsey Regional Vice President None 6744 Avalon Dallas, TX 75214 * Robert L. Johansen Vice President, Controller None * V. John Kriss Sr. Vice President None Arthur J. Levine Vice President None 12558 Highlands Place Fishers, IN 46038 # Karl A. Lewis Assistant Vice President None T. Blake Liberty Regional Vice President None 12585-E East Tennessee Circle Aurora, CO 80012 * Heather A. Maier Assistant Vice President - None Institutional Investment Services Division Stephen A. Malbasa Regional Vice President None 13405 Lake Shore Blvd. Cleveland, OH 44110 Steven M. Markel Vice President None 5575 S. Sycamore Littleton, CO 80120 * John C. Massar Vice President None Laurie B. McCurdy Regional Vice President None 5335 E. Shea Blvd., Apt. 1033 Scottsdale, AZ 85254 E. Lee McClennahan Vice President None 4445 N. Highway AIA, Ste. 232 Vero Beach, FL 32963 & John V. McLaughlin Senior Vice President None Terry W. McNabb Vice President None 2002 Barrett Station Road St. Louis, MO 63131 * R. William Melinat Vice President - Institutional None Investment Services Division David R. Murray Regional Vice President None 25701 S.E. 32nd Place Issaquah, WA 98027 Stephen S. Nelson Vice President None 7215 Trevor Court Charlotte, NC 28226 * Barbara G. Nicholich Assistant Vice President - None Institutional Investment Services Division Fredric Phillips Regional Vice President None 32 Ridge Avenue Newton Centre, MA 02159 # Candance D. Pilgrim Assistant Vice President None Steven J. Reitman Vice President None 212 The Lane Hinsdale, IL 60521 Brian A. Roberts Regional Vice President None 12025 Delmahoy Drive Charlotte, NC 28277 * George L. Romine , Jr . Vice President - Institutional None Investment Services Division George S. Ross Vice President None 55 Madison Avenue Morristown, NJ 07962 * Julie D. Roth Vice President None * Christopher Rowey Regional Vice President None Dean B. Rydquist Vice President None 155 Willow Brook Drive Roswell, GA 30076 Richard R. Samson Vice President None 4604 Glencoe Avenue, No. 4 Marina del Rey, CA 90292 * R. Michael Shanahan Chairman of the Board None David W. Short Vice President None Suite 212, 1000 RIDC Plaza Pittsburgh, PA 15238-2941 * Victor S. Sidhu Vice President - Institutional None Investment Services Division William P. Simon, Jr. Vice President None 554 Canterbury Lane Berwyn, PA 19312 * John C. Smith Assistant Vice President - None Institutional Investment Services Division # Mark S. Smith Director, Sr. Vice President None Rodney G. Smith Regional Vice President None 2350 Lakeside Blvd., #850 Richardson, TX 75082 Daniel S. Spradling Senior Vice President None #4 West Fourth Avenue, Suite 406 San Mateo, CA 94402 Craig R. Strauser Regional Vice President None 2590 Oregon City Blvd. West Linn, OR 97068 % Christopher E. Trede Assistant Vice President None & James P. Toomey Assistant Vice President None George F. Truesdail Vice President None 400 Abbotsford Court Charlotte, NC 28270 Scott W. Ursin-Smith Regional Vice President None 606 Glenwood Avenue Mill Valley, CA 94941 @ Andrew J. Ward Vice President None * David M. Ward Assistant Vice President - None Institutional Investment Services Division Thomas E. Warren Regional Vice President None 1231 Starboard Lane Sarasota, FL 34242 # J. Kelly Webb Sr. Vice President None Gregory J. Weimer Regional Vice President None 125 Surrey Drive Canonsburg, PA 15317 # Timothy W. Weiss Director None ** N. Dexter Williams Vice President None Timothy J. Wilson Regional Vice President None 113 Farmview Place Venetia, PA 15367 * Marshall D. Wingo Sr. Vice President None * Robert L. Winston Director, Sr. Vice President None William R. Yost Regional Vice President None 9320 Overlook Trail Eden Prairie, MN 55347 Janet M. Young Regional Vice President None 1616 Vermont Houston, TX 77006
____________ * Business Address, 333 South Hope Street, Los Angeles, CA 90071 ** Business Address, Four Embarcadero, Suite 1800, San Francisco, CA 94111 # Business Address, 135 South State College Boulevard, Brea, CA 92621 & Business Address, 8000 IH-10, Suite 1400, San Antonio, TX 78230 @ Business Address, 5300 Robin Hood Road, Norfolk, VA 23513 % Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240 (c) None. ITEM 30. LOCATION OF ACCOUNTS AND RECORDS. Accounts, books and other records required by Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended, are maintained and kept in the offices of the Fund and its investment adviser, Capital Research and Management Company, 333 South Hope Street, Los Angeles, CA 90071. Certain accounting records are maintained and kept in the offices of the Fund's accounting department, 135 South State College Blvd., Brea, CA 92621. Records covering shareholder accounts are maintained and kept by the transfer agent, American Funds Service Company, 135 South State College Blvd., Brea, CA 92621, 8000 IH-10 Suite 1400, San Antonio, TX 78230, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240 and 5300 Robin Hood Road, Norfolk, VA 23514. Records covering portfolio transactions are also maintained and kept by the custodian, The Chase Manhattan Bank, N.A., One Chase Manhattan Plaza, New York, New York, 10081. ITEM 31. MANAGEMENT SERVICES. None. ITEM 32. UNDERTAKINGS. As reflected in the prospectus, the fund undertakes to provide each person to whom a prospectus is delivered with a copy of the fund's latest annual report to shareholders, upon request and without charge. SIGNATURE OF REGISTRANT Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this amended Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, and State of California, on the 23rd day of February, 1995. THE BOND FUND OF AMERICA, INC. By /s/ Paul G. Haaga, Jr. (Paul G. Haaga, Jr., Chairman of the Board) Pursuant to the requirements of the Securities Act of 1933, this amendment to Registration Statement has been signed below on February 23, 1995, by the following persons in the capacities indicated.
SIGNATURE TITLE (1) Principal Executive Officer: /s/ Abner D. Goldstine President and Director (Abner D. Goldstine) (2) Principal Financial Officer and Principal Accounting Officer: /s/ Mary C. Cremin Vice President and Treasurer (Mary C. Cremin) (3) Directors: H. Frederick Christie* Director Diane C. Creel* Director Martin Fenton, Jr.* Director Leonard R. Fuller* Director /s/ Paul G. Haaga, Jr. Chairman and Director Paul G. Haaga, Jr.* Herbert Hoover III* Director Richard G. Newman* Director Peter C. Valli* Director
*By /s/ Julie F. Williams (Julie F. Williams, Attorney-in-Fact) Counsel represents that this amendment does not contain disclosures that would make the amendment ineligible for effectiveness under the provisions of Rule 485(b). /s/ Michael J. Downer (Michael J. Downer) C-12 EX-99.B11OTHCONSNT 2 CONSENT OF INDEPENDENT ACCOUNTANT CONSENT OF INDEPENDENT AUDITORS The Bond Fund of America, Inc. We consent to (a) the use in this Post-Effective Amendment No. 38 to Registration Statement No. 2-50700 on Form N-1A of our report dated January 27, 1995 appearing in the Financial Statements which are included in Part B, the Statement of Additional Information of such Registration Statements, (b) the reference to us under the heading "General Information" in such Statement of Additional Information, and (c) the reference to us under the heading "Financial Highlights" in the Prospectus, which is a part of such Registration Statement. \s\ Deloitte & Touche LLP Los Angeles, California February 24, 1995 EX-99.B16PERFQUOT 3 EXHIBIT 16 SCHEDULE FOR COMPUTATION OF EACH PERFORMANCE QUOTATION PROVIDED IN THE REGISTRATION STATEMENT (1) ENDING REDEMPTION VALUE AND TOTAL RETURN Value of an initial investment at the end of a period and total return for the period are computed as set forth below. (A) Initial investment DIVIDED BY Public offering price for one share at beginning of period EQUALS Number of shares initially purchased (B) Number of shares initially purchased PLUS Number of shares acquired at net asset value through reinvestment of dividends and capital gain distributions during period EQUALS Number of shares purchased during period (C) Number of shares purchased during period MULTIPLIED BY Net asset value of one share as of the last day of the period EQUALS Value of investment at end of period (D) Value of investment at end of period DIVIDED BY Initial investment minus one and then multiplied by 100 EQUALS Total return for the period expressed as a percentage EXHIBIT 16 (2) AVERAGE ANNUAL TOTAL RETURN Average annual total return quotations for the 1-, 5- and 10-year periods ended December 31, 1994 are computed according to the formula set forth below. P(1+T)/n/ = ERV WHERE: P= a hypothetical initial investment of $1,000 T= average annual total return n= number of years ERV= ending redeemable value of a hypothetical $1,000 investment as of the end of 1 year and lifetime periods (computed in accordance with the formula shown in (1), above) THUS: AVG. ANNUAL TOTAL RETURN AT PUBLIC OFFERING PRICE: 1 Year Total Return 1,000(1+T)/1/ = 904.77 T = -9.52 5 Year Average Annual Total Return 1,000(1+T)/5/ = 1,437.17 T = +7.52% 10 Year Average Annual Total Return 1,000(1+T)/10/ = 2,603.87 T = +10.04% Hypothetical illustrations which are based on $1,000 and $10,000 initial investments used to obtain ending values over various time periods are attached. Illustrations of $2,000 per year which show the benefits of systematic investing are also included. (3) YIELD Yield is computed as set forth below. (A) Dividends and interest earned during the period MINUS Expenses accrued for the period EQUALS Net investment income (B) Net income investment DIVIDED BY Average daily number of shares outstanding during the period that were entitled to receive dividends EQUALS Net investment income per share earned during the period (C) Net investment income per share earned during the period DIVIDED BY Maximum offering price per share on last day of the period EQUALS Current month's yield (D) Current months yield PLUS ONE RAISED TO THE SIXTH POWER EQUALS Semiannual compounded yield (E) Semiannual compounded yield MINUS ONE MULTIPLIED BY TWO EQUALS Annualized rate
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 5/28/74 1000.00 14.41 4.75 % 69.396 13.725 952 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/74 1000 41 41 1041 0 947 0 947 41 988.37 72.408 12/31/75 1000 89 130 1130 0 980 0 980 133 1113.73 78.876 12/31/76 1000 101 231 1231 13 1056 13 1069 246 1315.45 86.486 12/31/77 1000 112 343 1343 12 1012 24 1036 347 1383.10 94.798 12/31/78 1000 119 462 1462 6 944 28 972 439 1411.24 103.768 12/31/79 1000 139 601 1601 0 885 26 911 544 1455.64 114.168 12/31/80 1000 170 771 1771 0 815 24 839 668 1507.18 128.380 12/31/81 1000 210 981 1981 0 756 22 778 829 1607.30 147.459 12/31/82 1000 241 1222 2222 0 880 26 906 1230 2136.12 168.464 12/31/83 1000 253 1475 2475 0 861 25 886 1452 2338.24 188.416 12/31/84 1000 284 1759 2759 0 856 25 881 1736 2617.50 212.115 12/31/85 1000 320 2079 3079 0 972 29 1001 2312 3313.98 236.544 12/31/86 1000 357 2436 3436 104 986 133 1119 2697 3816.64 268.588 12/31/87 1000 375 2811 3811 0 912 123 1035 2856 3891.46 296.154 12/31/88 1000 392 3203 4203 0 919 123 1042 3265 4307.97 325.375 12/31/89 1000 442 3645 4645 0 918 123 1041 3703 4744.30 358.602 12/31/90 1000 464 4109 5109 0 860 116 976 3923 4899.34 395.427 12/31/91 1000 486 4595 5595 0 951 128 1079 4851 5930.31 432.869 12/31/92 1000 523 5118 6118 19 971 149 1120 5482 6602.75 471.962 12/31/93 1000 527 5645 6645 196 1003 350 1353 6183 7536.21 521.537 12/31/94 1000 567 6212 7212 0 881 307 1188 5970 7158.20 564.082 TOTAL $ 350
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/94 1000.00 15.17 4.75 % 65.920 14.450 953 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/94 1000 72 72 1072 0 837 0 837 67 904.77 71.298 TOTAL $ 0
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/90 1000.00 13.89 4.75 % 71.994 13.230 952 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/90 1000 94 94 1094 0 892 0 892 91 983.65 79.391 12/31/91 1000 96 190 1190 0 986 0 986 204 1190.64 86.908 12/31/92 1000 103 293 1293 4 1007 4 1011 314 1325.64 94.756 12/31/93 1000 106 399 1399 39 1040 43 1083 430 1513.06 104.710 12/31/94 1000 114 513 1513 0 914 38 952 485 1437.17 113.252 TOTAL $ 43
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/85 1000.00 12.96 4.75 % 77.160 12.340 952 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/85 1000 116 116 1116 0 1081 0 1081 124 1205.52 86.047 12/31/86 1000 130 246 1246 38 1096 38 1134 254 1388.35 97.702 12/31/87 1000 137 383 1383 0 1014 35 1049 366 1415.55 107.728 12/31/88 1000 142 525 1525 0 1022 35 1057 510 1567.05 118.357 12/31/89 1000 161 686 1686 0 1021 35 1056 669 1725.79 130.445 12/31/90 1000 169 855 1855 0 956 33 989 793 1782.21 143.843 12/31/91 1000 176 1031 2031 0 1057 36 1093 1064 2157.23 157.462 12/31/92 1000 188 1219 2219 7 1079 44 1123 1278 2401.83 171.682 12/31/93 1000 190 1409 2409 71 1115 117 1232 1509 2741.38 189.715 12/31/94 1000 207 1616 2616 0 979 102 1081 1522 2603.87 205.191 TOTAL $ 116
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 5/28/74 1000.00 13.73 0.00 % 72.860 13.725 1000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/74 1000 43 43 1043 0 995 0 995 42 1037.70 76.022 12/31/75 1000 95 138 1138 0 1029 0 1029 140 1169.31 82.812 12/31/76 1000 106 244 1244 13 1108 13 1121 260 1381.10 90.802 12/31/77 1000 117 361 1361 13 1063 25 1088 364 1452.13 99.529 12/31/78 1000 126 487 1487 6 991 29 1020 461 1481.65 108.945 12/31/79 1000 146 633 1633 0 929 27 956 572 1528.27 119.864 12/31/80 1000 179 812 1812 0 855 25 880 702 1582.35 134.783 12/31/81 1000 221 1033 2033 0 794 23 817 870 1687.45 154.812 12/31/82 1000 253 1286 2286 0 924 27 951 1291 2242.64 176.864 12/31/83 1000 265 1551 2551 0 904 27 931 1523 2454.82 197.810 12/31/84 1000 298 1849 2849 0 899 26 925 1822 2747.99 222.690 12/31/85 1000 336 2185 3185 0 1021 30 1051 2428 3479.23 248.339 12/31/86 1000 375 2560 3560 109 1035 139 1174 2832 4006.95 281.981 12/31/87 1000 393 2953 3953 0 957 129 1086 2999 4085.53 310.923 12/31/88 1000 410 3363 4363 0 965 130 1095 3427 4522.78 341.600 12/31/89 1000 465 3828 4828 0 964 130 1094 3886 4980.95 376.489 12/31/90 1000 487 4315 5315 0 903 121 1024 4119 5143.67 415.147 12/31/91 1000 510 4825 5825 0 998 134 1132 5094 6226.05 454.456 12/31/92 1000 549 5374 6374 20 1019 157 1176 5756 6932.03 495.499 12/31/93 1000 554 5928 6928 206 1053 368 1421 6491 7912.01 547.544 12/31/94 1000 595 6523 7523 0 925 323 1248 6267 7515.17 592.212 TOTAL $ 367
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/94 1000.00 14.45 0.00 % 69.204 14.450 1000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/94 1000 73 73 1073 0 878 0 878 71 949.82 74.848 TOTAL $ 0
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/90 1000.00 13.23 0.00 % 75.586 13.230 1000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/90 1000 97 97 1097 0 937 0 937 95 1032.66 83.346 12/31/91 1000 103 200 1200 0 1036 0 1036 213 1249.95 91.237 12/31/92 1000 112 312 1312 4 1057 4 1061 330 1391.68 99.477 12/31/93 1000 110 422 1422 41 1092 45 1137 451 1588.46 109.928 12/31/94 1000 120 542 1542 0 959 40 999 509 1508.78 118.895 TOTAL $ 45
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/85 1000.00 12.34 0.00 % 81.037 12.340 1000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/85 1000 123 123 1123 0 1135 0 1135 131 1266.07 90.369 12/31/86 1000 136 259 1259 40 1152 40 1192 266 1458.12 102.612 12/31/87 1000 144 403 1403 0 1065 37 1102 384 1486.70 113.143 12/31/88 1000 150 553 1553 0 1073 37 1110 535 1645.81 124.306 12/31/89 1000 169 722 1722 0 1072 37 1109 703 1812.50 136.999 12/31/90 1000 178 900 1900 0 1004 34 1038 833 1871.72 151.067 12/31/91 1000 186 1086 2086 0 1110 38 1148 1117 2265.58 165.371 12/31/92 1000 200 1286 2286 7 1134 46 1180 1342 2522.48 180.306 12/31/93 1000 200 1486 2486 75 1171 122 1293 1586 2879.09 199.245 12/31/94 1000 217 1703 2703 0 1028 108 1136 1598 2734.67 215.498 TOTAL $ 122
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/85 10000.00 12.96 4.75 % 771.605 12.340 9522 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/85 10000 1162 1162 11162 0 10810 0 10810 1245 12055.18 860.470 12/31/86 10000 1297 2459 12459 377 10965 377 11342 2541 13883.71 977.038 12/31/87 10000 1362 3821 13821 0 10139 348 10487 3668 14155.93 1077.316 12/31/88 10000 1423 5244 15244 0 10216 351 10567 5104 15671.04 1183.613 12/31/89 10000 1606 6850 16850 0 10208 351 10559 6699 17258.35 1304.486 12/31/90 10000 1691 8541 18541 0 9560 328 9888 7934 17822.32 1438.444 12/31/91 10000 1767 10308 20308 0 10571 363 10934 10638 21572.61 1574.643 12/31/92 10000 1902 12210 22210 68 10795 439 11234 12784 24018.77 1716.853 12/31/93 10000 1919 14129 24129 714 11150 1166 12316 15098 27414.37 1897.188 12/31/94 10000 2063 16192 26192 0 9792 1024 10816 15223 26039.32 2051.956 TOTAL $ 1159
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/85 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/85 10000 812 812 10812 0 10000 0 10000 810 10810.53 1081.053 12/31/86 10000 747 1559 11559 0 10000 0 10000 1557 11557.79 1155.779 12/31/87 10000 715 2274 12274 0 10000 0 10000 2271 12271.85 1227.185 12/31/88 10000 803 3077 13077 0 10000 0 10000 3075 13075.01 1307.501 12/31/89 10000 981 4058 14058 0 10000 0 10000 4055 14055.93 1405.593 12/31/90 10000 1012 5070 15070 0 10000 0 10000 5067 15067.46 1506.746 12/31/91 10000 919 5989 15989 0 10000 0 10000 5985 15985.76 1598.576 12/31/92 10000 661 6650 16650 0 10000 0 10000 6646 16646.38 1664.638 12/31/93 10000 530 7180 17180 0 10000 0 10000 7175 17175.26 1717.526 12/31/94 10000 546 7726 17726 0 10000 0 10000 7720 17720.95 1772.095 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/84 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/84 10000 956 956 10956 0 10000 0 10000 956 10956.52 1095.652 12/31/85 10000 889 1845 11845 0 10000 0 10000 1844 11844.59 1184.459 12/31/86 10000 819 2664 12664 0 10000 0 10000 2663 12663.31 1266.331 12/31/87 10000 782 3446 13446 0 10000 0 10000 3445 13445.67 1344.567 12/31/88 10000 880 4326 14326 0 10000 0 10000 4325 14325.65 1432.565 12/31/89 10000 1074 5400 15400 0 10000 0 10000 5400 15400.39 1540.039 12/31/90 10000 1108 6508 16508 0 10000 0 10000 6508 16508.66 1650.866 12/31/91 10000 1006 7514 17514 0 10000 0 10000 7514 17514.78 1751.478 12/31/92 10000 724 8238 18238 0 10000 0 10000 8238 18238.59 1823.859 12/31/93 10000 579 8817 18817 0 10000 0 10000 8818 18818.06 1881.806 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/83 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/83 10000 918 918 10918 0 10000 0 10000 918 10918.02 1091.802 12/31/84 10000 1044 1962 11962 0 10000 0 10000 1962 11962.34 1196.234 12/31/85 10000 970 2932 12932 0 10000 0 10000 2931 12931.93 1293.193 12/31/86 10000 894 3826 13826 0 10000 0 10000 3825 13825.81 1382.581 12/31/87 10000 854 4680 14680 0 10000 0 10000 4679 14679.99 1467.999 12/31/88 10000 961 5641 15641 0 10000 0 10000 5640 15640.76 1564.076 12/31/89 10000 1173 6814 16814 0 10000 0 10000 6814 16814.17 1681.417 12/31/90 10000 1210 8024 18024 0 10000 0 10000 8024 18024.19 1802.419 12/31/91 10000 1100 9124 19124 0 10000 0 10000 9122 19122.67 1912.267 12/31/92 10000 792 9916 19916 0 10000 0 10000 9912 19912.91 1991.291 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/82 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/82 10000 1086 1086 11086 0 10000 0 10000 1085 11085.58 1108.558 12/31/83 10000 1018 2104 12104 0 10000 0 10000 2103 12103.25 1210.325 12/31/84 10000 1158 3262 13262 0 10000 0 10000 3260 13260.94 1326.094 12/31/85 10000 1075 4337 14337 0 10000 0 10000 4335 14335.78 1433.578 12/31/86 10000 992 5329 15329 0 10000 0 10000 5326 15326.72 1532.672 12/31/87 10000 946 6275 16275 0 10000 0 10000 6273 16273.64 1627.364 12/31/88 10000 1065 7340 17340 0 10000 0 10000 7338 17338.70 1733.870 12/31/89 10000 1300 8640 18640 0 10000 0 10000 8639 18639.50 1863.950 12/31/90 10000 1341 9981 19981 0 10000 0 10000 9980 19980.88 1998.088 12/31/91 10000 1218 11199 21199 0 10000 0 10000 11198 21198.62 2119.862 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/81 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/81 10000 1098 1098 11098 0 10000 0 10000 1098 11098.56 1109.856 12/31/82 10000 1205 2303 12303 0 10000 0 10000 2303 12303.40 1230.340 12/31/83 10000 1129 3432 13432 0 10000 0 10000 3432 13432.87 1343.287 12/31/84 10000 1284 4716 14716 0 10000 0 10000 4717 14717.74 1471.774 12/31/85 10000 1193 5909 15909 0 10000 0 10000 5910 15910.66 1591.066 12/31/86 10000 1100 7009 17009 0 10000 0 10000 7010 17010.45 1701.045 12/31/87 10000 1052 8061 18061 0 10000 0 10000 8061 18061.39 1806.139 12/31/88 10000 1183 9244 19244 0 10000 0 10000 9243 19243.46 1924.346 12/31/89 10000 1444 10688 20688 0 10000 0 10000 10687 20687.15 2068.715 12/31/90 10000 1489 12177 22177 0 10000 0 10000 12175 22175.89 2217.589 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/80 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/80 10000 891 891 10891 0 10000 0 10000 891 10891.33 1089.133 12/31/81 10000 1197 2088 12088 0 10000 0 10000 2087 12087.80 1208.780 12/31/82 10000 1312 3400 13400 0 10000 0 10000 3400 13400.05 1340.005 12/31/83 10000 1230 4630 14630 0 10000 0 10000 4630 14630.20 1463.020 12/31/84 10000 1400 6030 16030 0 10000 0 10000 6029 16029.59 1602.959 12/31/85 10000 1299 7329 17329 0 10000 0 10000 7328 17328.84 1732.884 12/31/86 10000 1198 8527 18527 0 10000 0 10000 8526 18526.65 1852.665 12/31/87 10000 1145 9672 19672 0 10000 0 10000 9671 19671.26 1967.126 12/31/88 10000 1287 10959 20959 0 10000 0 10000 10958 20958.70 2095.870 12/31/89 10000 1573 12532 22532 0 10000 0 10000 12531 22531.08 2253.108 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/79 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/79 10000 743 743 10743 0 10000 0 10000 742 10742.84 1074.284 12/31/80 10000 958 1701 11701 0 10000 0 10000 1700 11700.39 1170.039 12/31/81 10000 1285 2986 12986 0 10000 0 10000 2985 12985.74 1298.574 12/31/82 10000 1410 4396 14396 0 10000 0 10000 4395 14395.45 1439.545 12/31/83 10000 1322 5718 15718 0 10000 0 10000 5716 15716.97 1571.697 12/31/84 10000 1503 7221 17221 0 10000 0 10000 7220 17220.32 1722.032 12/31/85 10000 1395 8616 18616 0 10000 0 10000 8616 18616.08 1861.608 12/31/86 10000 1287 9903 19903 0 10000 0 10000 9902 19902.88 1990.288 12/31/87 10000 1230 11133 21133 0 10000 0 10000 11132 21132.51 2113.251 12/31/88 10000 1383 12516 22516 0 10000 0 10000 12515 22515.57 2251.557 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/78 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/78 10000 642 642 10642 0 10000 0 10000 641 10641.90 1064.190 12/31/79 10000 790 1432 11432 0 10000 0 10000 1432 11432.42 1143.242 12/31/80 10000 1019 2451 12451 0 10000 0 10000 2451 12451.43 1245.143 12/31/81 10000 1367 3818 13818 0 10000 0 10000 3819 13819.30 1381.930 12/31/82 10000 1501 5319 15319 0 10000 0 10000 5319 15319.51 1531.951 12/31/83 10000 1406 6725 16725 0 10000 0 10000 6725 16725.85 1672.585 12/31/84 10000 1599 8324 18324 0 10000 0 10000 8325 18325.70 1832.570 12/31/85 10000 1486 9810 19810 0 10000 0 10000 9811 19811.06 1981.106 12/31/86 10000 1369 11179 21179 0 10000 0 10000 11180 21180.46 2118.046 12/31/87 10000 1310 12489 22489 0 10000 0 10000 12489 22489.02 2248.902 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/77 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/77 10000 613 613 10613 0 10000 0 10000 612 10612.59 1061.259 12/31/78 10000 681 1294 11294 0 10000 0 10000 1293 11293.81 1129.381 12/31/79 10000 839 2133 12133 0 10000 0 10000 2132 12132.77 1213.277 12/31/80 10000 1081 3214 13214 0 10000 0 10000 3214 13214.20 1321.420 12/31/81 10000 1452 4666 14666 0 10000 0 10000 4665 14665.85 1466.585 12/31/82 10000 1593 6259 16259 0 10000 0 10000 6257 16257.96 1625.796 12/31/83 10000 1493 7752 17752 0 10000 0 10000 7750 17750.46 1775.046 12/31/84 10000 1698 9450 19450 0 10000 0 10000 9448 19448.32 1944.832 12/31/85 10000 1577 11027 21027 0 10000 0 10000 11024 21024.67 2102.467 12/31/86 10000 1452 12479 22479 0 10000 0 10000 12477 22477.97 2247.797 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/76 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/76 10000 610 610 10610 0 10000 0 10000 610 10610.50 1061.050 12/31/77 10000 650 1260 11260 0 10000 0 10000 1260 11260.49 1126.049 12/31/78 10000 723 1983 11983 0 10000 0 10000 1983 11983.30 1198.330 12/31/79 10000 892 2875 12875 0 10000 0 10000 2873 12873.47 1287.347 12/31/80 10000 1148 4023 14023 0 10000 0 10000 4020 14020.93 1402.093 12/31/81 10000 1540 5563 15563 0 10000 0 10000 5561 15561.20 1556.120 12/31/82 10000 1690 7253 17253 0 10000 0 10000 7250 17250.52 1725.052 12/31/83 10000 1583 8836 18836 0 10000 0 10000 8834 18834.13 1883.413 12/31/84 10000 1801 10637 20637 0 10000 0 10000 10635 20635.64 2063.564 12/31/85 10000 1672 12309 22309 0 10000 0 10000 12308 22308.23 2230.823 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/75 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/75 10000 617 617 10617 0 10000 0 10000 616 10616.77 1061.677 12/31/76 10000 648 1265 11265 0 10000 0 10000 1264 11264.93 1126.493 12/31/77 10000 690 1955 11955 0 10000 0 10000 1955 11955.00 1195.500 12/31/78 10000 766 2721 12721 0 10000 0 10000 2722 12722.39 1272.239 12/31/79 10000 945 3666 13666 0 10000 0 10000 3667 13667.46 1366.746 12/31/80 10000 1218 4884 14884 0 10000 0 10000 4885 14885.70 1488.570 12/31/81 10000 1635 6519 16519 0 10000 0 10000 6520 16520.99 1652.099 12/31/82 10000 1793 8312 18312 0 10000 0 10000 8314 18314.49 1831.449 12/31/83 10000 1682 9994 19994 0 10000 0 10000 9995 19995.78 1999.578 12/31/84 10000 1913 11907 21907 0 10000 0 10000 11908 21908.40 2190.840 TOTAL $ 0
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 6/01/74 10000.00 10.00 0.00 % 1000.000 10.000 10000 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/74 10000 474 474 10474 0 10000 0 10000 473 10473.79 1047.379 12/31/75 10000 646 1120 11120 0 10000 0 10000 1119 11119.78 1111.978 12/31/76 10000 679 1799 11799 0 10000 0 10000 1798 11798.64 1179.864 12/31/77 10000 723 2522 12522 0 10000 0 10000 2521 12521.41 1252.141 12/31/78 10000 803 3325 13325 0 10000 0 10000 3325 13325.15 1332.515 12/31/79 10000 990 4315 14315 0 10000 0 10000 4315 14315.00 1431.500 12/31/80 10000 1276 5591 15591 0 10000 0 10000 5590 15590.95 1559.095 12/31/81 10000 1713 7304 17304 0 10000 0 10000 7303 17303.71 1730.371 12/31/82 10000 1879 9183 19183 0 10000 0 10000 9182 19182.18 1918.218 12/31/83 10000 1761 10944 20944 0 10000 0 10000 10943 20943.12 2094.312 TOTAL $ 0
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/90 2000.00 13.89 4.75 % 143.988 13.230 1905 ANNUAL INVESTMENTS OF $ 2000.00 -- SAME DAY AS INITIAL INVESTMENT DIVIDENDS AND CAPITAL GAINS REINVESTED RIGHT OF ACCUMULATION DISCOUNT REFLECTED WHERE APPLICABLE IN THIS ILLUSTRATION ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/90 2000 186 186 2186 0 1784 0 1784 183 1967.23 158.776 12/31/91 4000 384 570 4570 0 4079 0 4079 607 4686.67 342.093 12/31/92 6000 580 1150 7150 21 6111 21 6132 1207 7339.60 524.632 12/31/93 8000 738 1888 9888 275 8279 296 8575 1976 10551.20 730.187 12/31/94 10000 936 2824 12824 0 8944 260 9204 2627 11831.52 932.350 TOTAL $ 296
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/85 2000.00 12.96 4.75 % 154.321 12.340 1904 ANNUAL INVESTMENTS OF $ 2000.00 -- SAME DAY AS INITIAL INVESTMENT DIVIDENDS AND CAPITAL GAINS REINVESTED RIGHT OF ACCUMULATION DISCOUNT REFLECTED WHERE APPLICABLE IN THIS ILLUSTRATION ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/85 2000 232 232 2232 0 2162 0 2162 249 2411.05 172.095 12/31/86 4000 466 698 4698 135 4125 135 4260 710 4970.53 349.791 12/31/87 6000 676 1374 7374 0 5576 125 5701 1309 7010.14 533.496 12/31/88 8000 895 2269 10269 0 7537 126 7663 2205 9868.59 745.362 12/31/89 10000 1209 3478 13478 0 9435 125 9560 3406 12966.17 980.058 12/31/90 12000 1460 4938 16938 0 10620 118 10738 4619 15357.08 1239.474 12/31/91 14000 1711 6649 20649 0 13849 130 13979 6915 20894.12 1525.118 12/31/92 16000 2006 8655 24655 72 16088 205 16293 9091 25384.84 1814.499 12/31/93 18000 2178 10833 28833 812 18589 1022 19611 11542 31153.49 2155.951 12/31/94 20000 2489 13322 33322 0 18003 897 18900 12505 31405.25 2474.803 TOTAL $ 1019
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 5/28/74 10000.00 14.41 4.75 % 693.963 13.725 9525 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/74 10000 413 413 10413 0 9473 0 9473 410 9883.72 724.082 12/31/75 10000 897 1310 11310 0 9799 0 9799 1338 11137.22 788.755 12/31/76 10000 1010 2320 12320 126 10555 126 10681 2473 13154.47 864.857 12/31/77 10000 1114 3434 13434 121 10125 240 10365 3466 13831.03 947.980 12/31/78 10000 1198 4632 14632 57 9438 278 9716 4396 14112.38 1037.675 12/31/79 10000 1387 6019 16019 0 8848 260 9108 5448 14556.41 1141.679 12/31/80 10000 1706 7725 17725 0 8147 240 8387 6684 15071.79 1283.798 12/31/81 10000 2096 9821 19821 0 7564 222 7786 8286 16072.97 1474.584 12/31/82 10000 2408 12229 22229 0 8799 259 9058 12303 21361.26 1684.642 12/31/83 10000 2529 14758 24758 0 8612 253 8865 14517 23382.36 1884.155 12/31/84 10000 2838 17596 27596 0 8563 252 8815 17359 26174.88 2121.141 12/31/85 10000 3193 20789 30789 0 9722 286 10008 23131 33139.70 2365.432 12/31/86 10000 3566 24355 34355 1036 9861 1325 11186 26980 38166.23 2685.871 12/31/87 10000 3746 28101 38101 0 9119 1225 10344 28570 38914.60 2961.537 12/31/88 10000 3912 32013 42013 0 9188 1235 10423 32656 43079.54 3253.742 12/31/89 10000 4425 36438 46438 0 9181 1234 10415 37028 47443.11 3586.025 12/31/90 10000 4650 41088 51088 0 8598 1155 9753 39240 48993.45 3954.274 12/31/91 10000 4859 45947 55947 0 9507 1277 10784 48519 59303.03 4328.688 12/31/92 10000 5221 51168 61168 186 9709 1491 11200 54827 66027.50 4719.621 12/31/93 10000 5269 56437 66437 1964 10028 3501 13529 61833 75362.02 5215.365 12/31/94 10000 5673 62110 72110 0 8806 3075 11881 59701 71582.09 5640.827 TOTAL $ 3490
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/75 10000.00 14.33 4.75 % 697.837 13.650 9525 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/75 10000 865 865 10865 0 9853 0 9853 880 10733.54 760.166 12/31/76 10000 974 1839 11839 121 10614 122 10736 1941 12677.72 833.512 12/31/77 10000 1073 2912 12912 117 10181 231 10412 2917 13329.76 913.623 12/31/78 10000 1155 4067 14067 55 9491 268 9759 3841 13600.92 1000.068 12/31/79 10000 1337 5404 15404 0 8897 251 9148 4880 14028.86 1100.303 12/31/80 10000 1644 7048 17048 0 8193 231 8424 6101 14525.59 1237.273 12/31/81 10000 2020 9068 19068 0 7606 214 7820 7670 15490.45 1421.142 12/31/82 10000 2321 11389 21389 0 8849 249 9098 11489 20587.08 1623.587 12/31/83 10000 2437 13826 23826 0 8660 244 8904 13630 22534.93 1815.869 12/31/84 10000 2736 16562 26562 0 8611 243 8854 16372 25226.24 2044.266 12/31/85 10000 3077 19639 29639 0 9777 276 10053 21885 31938.63 2279.702 12/31/86 10000 3438 23077 33077 999 9916 1277 11193 25590 36783.01 2588.530 12/31/87 10000 3612 26689 36689 0 9170 1181 10351 27153 37504.23 2854.203 12/31/88 10000 3770 30459 40459 0 9239 1190 10429 31089 41518.27 3135.821 12/31/89 10000 4265 34724 44724 0 9232 1189 10421 35302 45723.67 3456.060 12/31/90 10000 4480 39204 49204 0 8646 1113 9759 37458 47217.86 3810.965 12/31/91 10000 4682 43886 53886 0 9560 1231 10791 46362 57153.78 4171.809 12/31/92 10000 5032 48918 58918 180 9763 1437 11200 52434 63634.51 4548.571 12/31/93 10000 5079 53997 63997 1893 10084 3374 13458 59172 72630.70 5026.346 12/31/94 10000 5467 59464 69464 0 8856 2963 11819 57168 68987.78 5436.389 TOTAL $ 3365
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/76 10000.00 14.82 4.75 % 674.764 14.120 9528 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/76 10000 864 864 10864 108 10263 108 10371 882 11253.42 739.870 12/31/77 10000 952 1816 11816 104 9845 205 10050 1782 11832.20 810.980 12/31/78 10000 1025 2841 12841 49 9177 237 9414 2658 12072.88 887.712 12/31/79 10000 1186 4027 14027 0 8603 223 8826 3626 12452.75 976.686 12/31/80 10000 1459 5486 15486 0 7922 205 8127 4766 12893.65 1098.267 12/31/81 10000 1793 7279 17279 0 7355 190 7545 6205 13750.12 1261.479 12/31/82 10000 2061 9340 19340 0 8556 221 8777 9497 18274.16 1441.180 12/31/83 10000 2164 11504 21504 0 8374 217 8591 11412 20003.17 1611.859 12/31/84 10000 2429 13933 23933 0 8327 215 8542 13850 22392.13 1814.597 12/31/85 10000 2733 16666 26666 0 9453 245 9698 18652 28350.40 2023.583 12/31/86 10000 3051 19717 29717 887 9588 1134 10722 21928 32650.53 2297.715 12/31/87 10000 3208 22925 32925 0 8866 1048 9914 23376 33290.73 2533.541 12/31/88 10000 3347 26272 36272 0 8934 1056 9990 26863 36853.80 2783.520 12/31/89 10000 3785 30057 40057 0 8927 1055 9982 30604 40586.76 3067.782 12/31/90 10000 3977 34034 44034 0 8360 988 9348 32565 41913.05 3382.813 12/31/91 10000 4156 38190 48190 0 9244 1093 10337 40395 50732.73 3703.119 12/31/92 10000 4465 42655 52655 160 9440 1276 10716 45769 56485.35 4037.552 12/31/93 10000 4507 47162 57162 1680 9750 2995 12745 51725 64470.91 4461.655 12/31/94 10000 4853 52015 62015 0 8563 2630 11193 50044 61237.27 4825.632 TOTAL $ 2988
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/77 10000.00 15.97 4.75 % 626.174 15.210 9524 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/77 10000 806 806 10806 88 9136 86 9222 791 10013.95 686.357 12/31/78 10000 868 1674 11674 41 8516 119 8635 1582 10217.67 751.299 12/31/79 10000 1004 2678 12678 0 7984 112 8096 2443 10539.14 826.599 12/31/80 10000 1235 3913 13913 0 7351 103 7454 3458 10912.29 929.497 12/31/81 10000 1518 5431 15431 0 6825 96 6921 4716 11637.15 1067.628 12/31/82 10000 1745 7176 17176 0 7940 111 8051 7415 15466.00 1219.716 12/31/83 10000 1831 9007 19007 0 7771 109 7880 9049 16929.32 1364.168 12/31/84 10000 2055 11062 21062 0 7727 108 7835 11116 18951.17 1535.751 12/31/85 10000 2312 13374 23374 0 8773 123 8896 15097 23993.82 1712.621 12/31/86 10000 2582 15956 25956 750 8898 874 9772 17861 27633.14 1944.626 12/31/87 10000 2712 18668 28668 0 8228 808 9036 19138 28174.95 2144.212 12/31/88 10000 2833 21501 31501 0 8291 814 9105 22085 31190.46 2355.775 12/31/89 10000 3200 24701 34701 0 8284 814 9098 25251 34349.75 2596.353 12/31/90 10000 3368 28069 38069 0 7758 762 8520 26952 35472.22 2862.972 12/31/91 10000 3518 31587 41587 0 8579 843 9422 33514 42936.55 3134.055 12/31/92 10000 3779 35366 45366 135 8760 996 9756 38049 47805.17 3417.096 12/31/93 10000 3818 39184 49184 1422 9048 2448 11496 43067 54563.52 3776.022 12/31/94 10000 4106 43290 53290 0 7946 2150 10096 41730 51826.77 4084.064 TOTAL $ 2436
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/78 10000.00 15.32 4.75 % 652.742 14.590 9523 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/78 10000 825 825 10825 39 8877 37 8914 803 9717.24 714.503 12/31/79 10000 956 1781 11781 0 8322 35 8357 1665 10022.99 786.117 12/31/80 10000 1175 2956 12956 0 7663 32 7695 2682 10377.87 883.975 12/31/81 10000 1443 4399 14399 0 7115 30 7145 3922 11067.23 1015.342 12/31/82 10000 1659 6058 16058 0 8277 35 8312 6396 14708.56 1159.981 12/31/83 10000 1742 7800 17800 0 8101 34 8135 7965 16100.21 1297.358 12/31/84 10000 1955 9755 19755 0 8055 34 8089 9934 18023.04 1460.538 12/31/85 10000 2199 11954 21954 0 9145 38 9183 13635 22818.75 1628.747 12/31/86 10000 2455 14409 24409 714 9275 751 10026 16253 26279.83 1849.390 12/31/87 10000 2580 16989 26989 0 8577 695 9272 17523 26795.09 2039.200 12/31/88 10000 2693 19682 29682 0 8642 700 9342 20320 29662.95 2240.404 12/31/89 10000 3047 22729 32729 0 8636 700 9336 23331 32667.52 2469.200 12/31/90 10000 3201 25930 35930 0 8087 655 8742 24993 33735.05 2722.764 12/31/91 10000 3345 29275 39275 0 8943 725 9668 31165 40833.85 2980.573 12/31/92 10000 3595 32870 42870 128 9132 868 10000 35464 45464.04 3249.753 12/31/93 10000 3631 36501 46501 1352 9432 2247 11679 40212 51891.41 3591.101 12/31/94 10000 3906 40407 50407 0 8283 1974 10257 39031 49288.67 3884.056 TOTAL $ 2233
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/79 10000.00 14.28 4.75 % 700.280 13.600 9524 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/79 10000 935 935 10935 0 8929 0 8929 894 9823.47 770.468 12/31/80 10000 1152 2087 12087 0 8221 0 8221 1950 10171.28 866.378 12/31/81 10000 1415 3502 13502 0 7633 0 7633 3213 10846.90 995.128 12/31/82 10000 1626 5128 15128 0 8880 0 8880 5535 14415.73 1136.887 12/31/83 10000 1707 6835 16835 0 8690 0 8690 7089 15779.67 1271.529 12/31/84 10000 1916 8751 18751 0 8641 0 8641 9023 17664.23 1431.461 12/31/85 10000 2155 10906 20906 0 9811 0 9811 12553 22364.46 1596.321 12/31/86 10000 2407 13313 23313 699 9951 698 10649 15107 25756.63 1812.571 12/31/87 10000 2530 15843 25843 0 9202 646 9848 16413 26261.66 1998.604 12/31/88 10000 2641 18484 28484 0 9272 651 9923 19149 29072.43 2195.803 12/31/89 10000 2986 21470 31470 0 9265 650 9915 22102 32017.17 2420.043 12/31/90 10000 3138 24608 34608 0 8676 609 9285 23778 33063.41 2668.556 12/31/91 10000 3279 27887 37887 0 9594 673 10267 29753 40020.84 2921.229 12/31/92 10000 3523 31410 41410 126 9797 814 10611 33947 44558.84 3185.049 12/31/93 10000 3556 34966 44966 1325 10119 2164 12283 38575 50858.25 3519.602 12/31/94 10000 3830 38796 48796 0 8887 1900 10787 37520 48307.35 3806.726 TOTAL $ 2150
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/80 10000.00 13.39 4.75 % 746.826 12.750 9522 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/80 10000 1116 1116 11116 0 8768 0 8768 1091 9859.17 839.793 12/31/81 10000 1371 2487 12487 0 8140 0 8140 2374 10514.06 964.593 12/31/82 10000 1577 4064 14064 0 9470 0 9470 4503 13973.41 1102.004 12/31/83 10000 1655 5719 15719 0 9268 0 9268 6027 15295.51 1232.515 12/31/84 10000 1857 7576 17576 0 9216 0 9216 7906 17122.24 1387.540 12/31/85 10000 2089 9665 19665 0 10463 0 10463 11215 21678.26 1547.342 12/31/86 10000 2333 11998 21998 678 10612 677 11289 13677 24966.40 1756.960 12/31/87 10000 2451 14449 24449 0 9813 626 10439 15016 25455.95 1937.287 12/31/88 10000 2559 17008 27008 0 9888 631 10519 17661 28180.52 2128.438 12/31/89 10000 2894 19902 29902 0 9881 630 10511 20523 31034.92 2345.799 12/31/90 10000 3041 22943 32943 0 9253 590 9843 22206 32049.09 2586.690 12/31/91 10000 3176 26119 36119 0 10232 653 10885 27908 38793.08 2831.612 12/31/92 10000 3415 29534 39534 122 10448 789 11237 31954 43191.89 3087.340 12/31/93 10000 3447 32981 42981 1285 10792 2097 12889 36409 49298.04 3411.629 12/31/94 10000 3710 36691 46691 0 9477 1842 11319 35506 46825.41 3689.946 TOTAL $ 2085
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/81 10000.00 12.33 4.75 % 811.030 11.740 9521 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/81 10000 1324 1324 11324 0 8840 0 8840 1313 10153.96 931.556 12/31/82 10000 1522 2846 12846 0 10284 0 10284 3210 13494.80 1064.259 12/31/83 10000 1598 4444 14444 0 10065 0 10065 4706 14771.61 1190.299 12/31/84 10000 1794 6238 16238 0 10008 0 10008 6527 16535.79 1340.015 12/31/85 10000 2018 8256 18256 0 11363 0 11363 9572 20935.76 1494.344 12/31/86 10000 2252 10508 20508 655 11525 654 12179 11932 24111.19 1696.776 12/31/87 10000 2368 12876 22876 0 10657 605 11262 13321 24583.92 1870.922 12/31/88 10000 2471 15347 25347 0 10738 609 11347 15868 27215.10 2055.521 12/31/89 10000 2796 18143 28143 0 10730 609 11339 18632 29971.73 2265.437 12/31/90 10000 2936 21079 31079 0 10049 570 10619 20332 30951.14 2498.074 12/31/91 10000 3069 24148 34148 0 11111 630 11741 25723 37464.09 2734.605 12/31/92 10000 3299 27447 37447 118 11346 762 12108 29604 41712.19 2981.572 12/31/93 10000 3329 30776 40776 1241 11719 2026 13745 33864 47609.17 3294.752 12/31/94 10000 3584 34360 44360 0 10292 1779 12071 33150 45221.26 3563.535 TOTAL $ 2014
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/82 10000.00 11.44 4.75 % 874.126 10.900 9528 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/82 10000 1428 1428 11428 0 11084 0 11084 1578 12662.84 998.647 12/31/83 10000 1500 2928 12928 0 10848 0 10848 3012 13860.94 1116.917 12/31/84 10000 1683 4611 14611 0 10787 0 10787 4729 15516.33 1257.401 12/31/85 10000 1894 6505 16505 0 12247 0 12247 7398 19645.03 1402.215 12/31/86 10000 2114 8619 18619 614 12421 614 13035 9589 22624.75 1592.171 12/31/87 10000 2222 10841 20841 0 11486 567 12053 11015 23068.36 1755.583 12/31/88 10000 2319 13160 23160 0 11573 572 12145 13392 25537.35 1928.803 12/31/89 10000 2623 15783 25783 0 11565 571 12136 15988 28124.02 2125.776 12/31/90 10000 2756 18539 28539 0 10830 535 11365 17678 29043.06 2344.073 12/31/91 10000 2879 21418 31418 0 11976 592 12568 22586 35154.53 2566.024 12/31/92 10000 3094 24512 34512 111 12229 715 12944 26196 39140.73 2797.765 12/31/93 10000 3124 27636 37636 1164 12631 1901 14532 30142 44674.18 3091.639 12/31/94 10000 3365 31001 41001 0 11093 1669 12762 29671 42433.49 3343.853 TOTAL $ 1889
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/83 10000.00 13.31 4.75 % 751.315 12.680 9527 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/83 10000 1128 1128 11128 0 9324 0 9324 1104 10428.02 840.292 12/31/84 10000 1266 2394 12394 0 9271 0 9271 2402 11673.43 945.983 12/31/85 10000 1425 3819 13819 0 10526 0 10526 4253 14779.60 1054.932 12/31/86 10000 1592 5411 15411 462 10676 462 11138 5883 17021.31 1197.840 12/31/87 10000 1670 7081 17081 0 9872 427 10299 7056 17355.01 1320.777 12/31/88 10000 1745 8826 18826 0 9947 430 10377 8835 19212.55 1451.099 12/31/89 10000 1974 10800 20800 0 9940 430 10370 10788 21158.58 1599.288 12/31/90 10000 2073 12873 22873 0 9309 402 9711 12138 21849.98 1763.517 12/31/91 10000 2166 15039 25039 0 10293 445 10738 15709 26447.78 1930.495 12/31/92 10000 2328 17367 27367 83 10511 538 11049 18397 29446.71 2104.840 12/31/93 10000 2351 19718 29718 876 10856 1430 12286 21323 33609.69 2325.930 12/31/94 10000 2531 22249 32249 0 9534 1256 10790 21133 31923.95 2515.678 TOTAL $ 1421
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/84 10000.00 13.03 4.75 % 767.460 12.410 9524 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/84 10000 1155 1155 11155 0 9470 0 9470 1191 10661.64 863.990 12/31/85 10000 1302 2457 12457 0 10752 0 10752 2746 13498.56 963.495 12/31/86 10000 1458 3915 13915 422 10906 422 11328 4218 15546.01 1094.019 12/31/87 10000 1528 5443 15443 0 10084 390 10474 5376 15850.83 1206.304 12/31/88 10000 1597 7040 17040 0 10161 393 10554 6993 17547.33 1325.327 12/31/89 10000 1803 8843 18843 0 10153 393 10546 8778 19324.69 1460.672 12/31/90 10000 1894 10737 20737 0 9509 368 9877 10079 19956.20 1610.670 12/31/91 10000 1979 12716 22716 0 10514 406 10920 13235 24155.51 1763.176 12/31/92 10000 2127 14843 24843 76 10737 491 11228 15666 26894.54 1922.412 12/31/93 10000 2146 16989 26989 800 11090 1306 12396 18300 30696.70 2124.339 12/31/94 10000 2311 19300 29300 0 9739 1147 10886 18271 29157.04 2297.639 TOTAL $ 1298
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/85 10000.00 12.96 4.75 % 771.605 12.340 9522 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/85 10000 1162 1162 11162 0 10810 0 10810 1245 12055.18 860.470 12/31/86 10000 1297 2459 12459 377 10965 377 11342 2541 13883.71 977.038 12/31/87 10000 1362 3821 13821 0 10139 348 10487 3668 14155.93 1077.316 12/31/88 10000 1423 5244 15244 0 10216 351 10567 5104 15671.04 1183.613 12/31/89 10000 1606 6850 16850 0 10208 351 10559 6699 17258.35 1304.486 12/31/90 10000 1691 8541 18541 0 9560 328 9888 7934 17822.32 1438.444 12/31/91 10000 1767 10308 20308 0 10571 363 10934 10638 21572.61 1574.643 12/31/92 10000 1902 12210 22210 68 10795 439 11234 12784 24018.77 1716.853 12/31/93 10000 1919 14129 24129 714 11150 1166 12316 15098 27414.37 1897.188 12/31/94 10000 2063 16192 26192 0 9792 1024 10816 15223 26039.32 2051.956 TOTAL $ 1159
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/86 10000.00 14.71 4.75 % 679.810 14.010 9524 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/86 10000 1025 1025 11025 298 9660 297 9957 1011 10968.76 771.904 12/31/87 10000 1078 2103 12103 0 8933 275 9208 1975 11183.82 851.128 12/31/88 10000 1124 3227 13227 0 9001 277 9278 3102 12380.83 935.108 12/31/89 10000 1272 4499 14499 0 8994 277 9271 4363 13634.90 1030.605 12/31/90 10000 1336 5835 15835 0 8423 259 8682 5398 14080.49 1136.440 12/31/91 10000 1396 7231 17231 0 9313 287 9600 7443 17043.42 1244.045 12/31/92 10000 1501 8732 18732 54 9511 347 9858 9117 18975.99 1356.397 12/31/93 10000 1514 10246 20246 564 9823 922 10745 10913 21658.69 1498.871 12/31/94 10000 1630 11876 21876 0 8627 809 9436 11136 20572.37 1621.148 TOTAL $ 916
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/87 10000.00 14.92 4.75 % 670.241 14.210 9524 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/87 10000 934 934 10934 0 8807 0 8807 903 9710.87 739.031 12/31/88 10000 977 1911 11911 0 8874 0 8874 1876 10750.19 811.948 12/31/89 10000 1104 3015 13015 0 8867 0 8867 2972 11839.09 894.867 12/31/90 10000 1161 4176 14176 0 8304 0 8304 3921 12225.98 986.762 12/31/91 10000 1214 5390 15390 0 9182 0 9182 5616 14798.64 1080.193 12/31/92 10000 1302 6692 16692 47 9377 47 9424 7052 16476.67 1177.746 12/31/93 10000 1316 8008 18008 490 9685 537 10222 8584 18806.02 1301.455 12/31/94 10000 1416 9424 19424 0 8505 472 8977 8885 17862.77 1407.626 TOTAL $ 537
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/88 10000.00 13.80 4.75 % 724.638 13.140 9522 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/88 10000 957 957 10957 0 9594 0 9594 946 10540.85 796.137 12/31/89 10000 1083 2040 12040 0 9587 0 9587 2021 11608.54 877.441 12/31/90 10000 1138 3178 13178 0 8978 0 8978 3009 11987.92 967.548 12/31/91 10000 1190 4368 14368 0 9928 0 9928 4582 14510.53 1059.163 12/31/92 10000 1276 5644 15644 46 10138 46 10184 5971 16155.89 1154.817 12/31/93 10000 1289 6933 16933 481 10471 527 10998 7441 18439.92 1276.119 12/31/94 10000 1388 8321 18321 0 9196 463 9659 7856 17515.00 1380.221 TOTAL $ 527
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/89 10000.00 13.90 4.75 % 719.424 13.240 9525 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/89 10000 979 979 10979 0 9518 0 9518 971 10489.99 792.894 12/31/90 10000 1027 2006 12006 0 8914 0 8914 1918 10832.80 874.318 12/31/91 10000 1075 3081 13081 0 9856 0 9856 3256 13112.30 957.102 12/31/92 10000 1154 4235 14235 41 10065 41 10106 4493 14599.14 1043.541 12/31/93 10000 1165 5400 15400 434 10396 476 10872 5791 16663.05 1153.152 12/31/94 10000 1255 6655 16655 0 9129 418 9547 6280 15827.30 1247.226 TOTAL $ 475
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/90 10000.00 13.89 4.75 % 719.942 13.230 9525 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/90 10000 934 934 10934 0 8920 0 8920 916 9836.09 793.873 12/31/91 10000 975 1909 11909 0 9863 0 9863 2042 11905.89 869.043 12/31/92 10000 1048 2957 12957 37 10072 37 10109 3146 13255.94 947.530 12/31/93 10000 1058 4015 14015 394 10403 432 10835 4294 15129.97 1047.057 12/31/94 10000 1139 5154 15154 0 9136 380 9516 4855 14371.10 1132.474 TOTAL $ 431
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/91 10000.00 13.01 4.75 % 768.640 12.390 9523 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/91 10000 945 945 10945 0 10530 0 10530 997 11527.44 841.419 12/31/92 10000 1016 1961 11961 36 10753 36 10789 2045 12834.57 917.410 12/31/93 10000 1024 2985 12985 382 11107 419 11526 3123 14649.03 1013.774 12/31/94 10000 1103 4088 14088 0 9754 368 10122 3792 13914.27 1096.475 TOTAL $ 418
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/92 10000.00 14.38 4.75 % 695.410 13.700 9527 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/92 10000 838 838 10838 30 9729 30 9759 848 10607.43 758.215 12/31/93 10000 846 1684 11684 316 10049 346 10395 1712 12107.00 837.855 12/31/94 10000 912 2596 12596 0 8825 304 9129 2370 11499.75 906.206 TOTAL $ 346
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/93 10000.00 14.69 4.75 % 680.735 13.990 9523 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/93 10000 759 759 10759 283 9837 283 10120 749 10869.84 752.238 12/31/94 10000 818 1577 11577 0 8639 248 8887 1437 10324.65 813.605 TOTAL $ 283
THE BOND FUND OF AMERICA, INC. SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/94 10000.00 15.17 4.75 % 659.196 14.450 9525 DIVIDENDS AND CAPITAL GAINS REINVESTED ============COST OF SHARES============= ================VALUE OF SHARES===================== CURRENT CUM. TOTAL CURRENT FROM FROM CUM INCOME INCOME INVM'T CAP GAIN FROM CAP GAINS SUB- DIVS TOTAL SHARES DATE INV'M'T DIVS DIVS COST DISTRIB'N INV'M'T REINV'D TOTAL REINV'D VALUE HELD 12/31/94 10000 718 718 10718 0 8365 0 8365 682 9047.60 712.971 TOTAL $ 0
EX-27 4 FINANCIAL DATA SCHEDULE
6 1000 YEAR DEC-31-1994 DEC-31-1994 5,210,323 4,862,045 119,450 3,838 0 4,985,333 29,639 0 14,544 44,183 0 4,926,606 389,436 365,701 10,433 0 (35,644) 0 (349,681) 4,941,150 20 430,119 0 34,932 395,207 (36,092) (626,541) (267,426) 0 396,205 0 0 99,296,409 96,388,393 20,827,138 320,164 10,941 977 0 0 18,755 0 34,932 4,924,282 14.45 1.05 (1.76) 1.05 0 0 12.69 .007 0 0
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