-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vh+QFsUQL8uUy/65LlaJkrKMPkAgMIF22hwQ7+/YB2eeJgybsZrTRgsWLbqSZ2wx +8+QJ34hVIskjxvCFrfvEQ== 0000013075-96-000004.txt : 19960301 0000013075-96-000004.hdr.sgml : 19960301 ACCESSION NUMBER: 0000013075-96-000004 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960229 EFFECTIVENESS DATE: 19960301 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: 96528360 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02444 FILM NUMBER: 96528361 BUSINESS ADDRESS: STREET 1: 333 S HOPE ST - 52ND FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: 2134869200 485BPOS 1 THE BOND FUND OF AMERICA, INC. CONFORMED SEC. File Nos. 2- 50700 811-2444 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A Registration Statement Under the Securities Act of 1933 Post-Effective Amendment No. 39 and Registration Statement Under The Investment Company Act of 1940 Amendment No. 20 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 23, 1996, it filed its 24f-2 notice for fiscal 1995. Approximate date of proposed public offering: It is proposed that this filing become effective on March 1, 1996, 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
March 1, 1996 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, 1996, 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 OR GUARANTEED BY, THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, 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. 08-010-0396 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... 11 Fund Organization and Management..... 12 The American Funds Shareholder Guide. 15-23 Purchasing Shares.................. 15 Reducing Your Sales Charge......... 18 Shareholder Services............... 19 Redeeming Shares................... 21 Retirement Plans................... 23
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) - ------------------------------------------------------------------------------- SUMMARY OF EXPENSES Average annual expenses paid over a 10-year period would be approximately $14 per year, assuming a $1,000 investment and a 5% annual return with a maximum sales charge. 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........................................................ 0.25%/3/ Other expenses (including audit, legal, shareholder services, transfer agent and custodian expenses)............................... 0.12% Total fund operating expenses......................................... 0.74%
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS - ------- ------ ------- ------- -------- You would pay the following cumulative expenses on a $1,000 $55 $70 $87 $135 investment, assuming a 5% annual return./4/
/1/ Sales charges are reduced for certain large purchases. (See "The American Funds Shareholder Guide: Purchasing Shares--Sales Charges.") /2/ Any employer-sponsored 403(b) plan or 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 made 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 ---------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, Begin- ning of Year............ $12.69 $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 $14.01 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income.. 1.05 1.05 1.09 1.15 1.21 1.24 1.31 1.28 1.28 1.38 Net realized and unrealized gain (loss) on investments........ 1.18 (1.76) .84 .34 1.28 (.84) (.02) .08 (1.02) .66 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total income from in- vestment operations.. 2.23 (0.71) 1.93 1.49 2.49 .40 1.29 1.36 .26 2.04 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net in- vestment income....... (1.04) (1.05) (1.08) (1.16) (1.18) (1.24) (1.30) (1.26) (1.23) (1.44) Distributions from net realized gains........ -- -- (.39) (.04) -- -- -- -- (.10)/1/ (.40) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total distributions... (1.04) (1.05) ( 1.47) (1.20) (1.18) (1.24) (1.30) (1.26) (1.33) (1.84) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, End of Year.................... $13.88 $12.69 $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== Total Return/2/ 18.25% (5.02)% 14.14% 11.34% 21.04% 3.27% 10.13% 10.70% 1.96% 15.17% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in millions).......... $6,290 $4,941 $5,285 $3,917 $2,859 $1,945 $1,481 $1,021 $ 825 $ 694 Ratio of expenses to average net assets..... .74% .69% .71% .73% .77% .76% .76% .66% .59% .58% Ratio of net income to average net assets..... 7.87% 7.77% 7.53% 8.36% 9.28% 9.70% 9.73% 9.54% 9.45% 9.39% Portfolio turnover rate................... 43.80% 57.0% 44.7% 49.7% 56.5% 59.9% 64.2% 93.0% 93.0% 107.8%
-------- /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- conservation of 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). 5 - ------------------------------------------------------------------------------- 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. However, securities rated Ba and BB or below or unrated securi- ties 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 pur- chase. In addition, the fund may from time to time invest in fixed-income securities of corporations outside the U.S. or governmental entities and may purchase or sell various currencies and enter into forward currency con- tracts in connection with these investments. The fund may also invest up to 1% of its assets in inverse floating rate notes (a type of derivative instrument). 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, 1995 was as follows: bonds--Aaa/AAA-42.84%; Aa/AA-3.49%; A/A-6.26%; Baa/BBB- 10.17%; Ba/BB-7.45%; B/B-11.95%, and Caa/CCC-1.41%. Other investments, including non-rated investments, equity-type securities and cash or cash equivalents amounted to 1.74%, 3.34% and 11.35%, 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 and 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, economic and 6 - ------------------------------------------------------------------------------- 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 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 ratings. Capital Research and Management Company attempts to reduce 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 corporate and legislative developments. INVESTING IN VARIOUS COUNTRIES The fund may invest in securities which may be denominated in currencies other than the U.S. dollar. The fund may also invest in secu- rities of issuers located outside the United States. Investing globally involves special risks, particularly in certain developing countries, caused by, among other things: 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. 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, and frequently there may be less information publicly available about such companies. However, investing out- side the U.S. also can reduce certain of these risks through greater diversification opportunities. Transaction costs are generally higher outside the U.S., and the fund will bear certain expenses in con- nection with its currency transactions. Increased cus- todian costs as well as administrative difficulties (for example, delays in clearing and settling portfolio transactions or in receiving payments of dividends) may be associated with the maintenance of assets in certain jurisdictions. CURRENCY TRANSACTIONS The fund has the ability to pur- chase and sell currencies to facilitate securities transactions and to enter into forward currency con- tracts to hedge against changes in currency exchange rates. While entering into forward transactions could minimize the risk of loss due to a decline in the value of the hedged currency, it could also limit any poten- tial gain which might result from an increase in the value of the currency. (See "Currency Transactions" in the statement of additional information.) 7 - ------------------------------------------------------------------------------- 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 delayed). The fund as purchaser assumes the risk of 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. In addition, the fund may enter into other purchase and sale transactions involving securities which are not settled in the ordinary course of business and under various terms when to do so is in the best interest of the fund. 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 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 under the repurchase agreement defaults, the fund may incur 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. 8 - ------------------------------------------------------------------------------- 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. 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. 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 9 - ------------------------------------------------------------------------------- the portfolio of the fund is divided into segments which are managed by individual counselors. Each counselor decides how their 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 THE BOND FUND OF AMERICA OR ITS TOTAL OF AMERICA PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS - ---------------------------------------------------------------------------------------------------------------- Abner D. Goldstine President and Director Since the fund began operations 29 years 44 years of the fund. Senior Vice in 1974 President and Director, Capital Research and Management Company - ---------------------------------------------------------------------------------------------------------------- Richard T. Schotte Senior Vice President of 18 years 18 years 29 years the fund. Senior Vice President, Capital Research and Management Company - ---------------------------------------------------------------------------------------------------------------- John H. Smet Vice President of the 7 years 13 years 14 years fund. Vice President, Capital Research and Management Company - ---------------------------------------------------------------------------------------------------------------- Mark H. Dalzell Vice President, 2 years 8 years 18 years Investment Management Group, Capital Research and Management Company - ---------------------------------------------------------------------------------------------------------------- The fund began operations on May 28, 1974. - ----------------------------------------------------------------------------------------------------------------
INVESTMENT The fund may from time to time compare its investment RESULTS results to various unmanaged indices or other mutual funds in reports to shareholders, sales literature and The fund has advertisements. The results may be calculated on a to- averaged a total tal return, yield and/or distribution rate basis for return of 10.40% a various periods, with or without sales charges. Results year (assuming the calculated without a sales charge will be higher. Total maximum sales returns assume the reinvestment of all dividends and charge was paid) capital gain distributions. over its lifetime (May 28, 1974 The fund's yield and the average annual total returns through December are calculated in accordance with the Securities and 31, 1995). Exchange Commission requirements which provide that the maximum sales charge be reflected. The fund's distribution rate is calculated by annualizing the current month's dividend and dividing by the average price for the month. For the 30-day period ended December 31, 1995, the fund's SEC yield was 6.18% and the distribution rate was 6.84% at maximum offering price. The SEC yield reflects income earned by the fund, while the distribution rate reflects dividends paid by the fund. The fund's total return over the past 12 months and average annual total returns over the past five-year and 10 - ------------------------------------------------------------------------------- ten-year periods, as of December 31, 1995, were 12.66%, 10.47% and 9.30%, 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 distributions are Service Company. All capital gains, if any, are made each month. distributed 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 exempt 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. 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. 11 - ------------------------------------------------------------------------------- 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 $6 billion and gross investment income levels of 6%, 7%, 8%, 9%, 10% and 11%, management fees would be .31%, .33%, .36%, .38%, .40% and .42%, 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 12 - ------------------------------------------------------------------------------- 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 commission, although the price of the security usually includes a profit to the dealer. In underwritten offerings, securities are usually purchased at a fixed price which includes an amount of compensation to the underwriter, generally referred to as the underwriter's concession 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 executions, preference may be given to brokers that have sold shares of the fund or have provided investment research, statistical, and other related services for the benefit of the fund and/or 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 monitored for verification, recordkeeping and quality assurance 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. 13 - -------------------------------------------------------------------------------- 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 $4,205,000 for the fiscal year ended December 31, 1995. Telephone con- versations with American Funds Service Company may be recorded or monitored for verification, recordkeeping and quality assurance purposes. 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, MN, MO, ND, NE, NM, TX 78265-9522 OK, SD, TX, and WY Fax: 210/530-4050 --------------------------------------------------------- CENTRAL- P.O. Box 6007 AL, IL, IN, KY, MI, EAST Indianapolis, MS, OH, TN and WI IN 46206-6007 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. --------------------------------------------------------- [LOGO] --------------------------------------------------------- West (light grey); Central-West (white); Central-East (dark grey), East (green) 14 - ------------------------------------------------------------------------------- THE AMERICAN 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 investment under "Investment you add to it minimums. Minimums and Fund whenever you like. 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 number(s) investments in the if necessary. same manner as Please indicate an described under investment dealer "Initial Investment." 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 offering price next determined 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 using 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. 15 - ------------------------------------------------------------------------------- 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 AVAIL- ABLE 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). Mini- mums are reduced to $50 for purchases through "Auto- matic 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 in- vestments (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.) 16 - -------------------------------------------------------------------------------
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 employer- sponsored 403(b) plan or 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, during calendar year 1996, provide additional compensation to dealers. Currently these payments are limited to the top one hundred dealers who have sold shares of the fund or other funds in The American Funds Group. These payments will be based on a pro rata share of a qualifying dealer's sales. American Funds Distributors will, on an annual basis, determine the advisability of continuing these payments. Any employer-sponsored 403(b) plan or 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 made within twelve months 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 17 - ------------------------------------------------------------------------------- compensate them for providing certain services. (See "Fund Organization and Management--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 registered representatives, retired registered representatives with respect to accounts established while active, or full-time employees (and their spouses, parents, and children) of dealers who have sales agreements with American Funds Distributors (or who clear transactions through such dealers) and plans for such persons or the dealers; (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 18 - ------------------------------------------------------------------------------- other accounts and may not be aggregated with other nominee or street name accounts unless otherwise qualified as described above. 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 and the statement of additional information under "Purchase of Shares--Statement of Intention.") 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. 19 - ------------------------------------------------------------------------------- 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 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, faxing (see "Transfer Agent" above for the appropriate fax numbers) or telegraphing American Funds Service Compa- ny. (See "Telephone Redemptions and Exchanges" below.) Shares held in corporate-type retirement plans for which Capital Guardian Trust Company serves as trustee may not be exchanged by telephone, fax or telegraph. Exchange redemptions and purchases are processed simul- taneously 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. Purchases through automatic investment plans will be confirmed at least quarterly. 20 - ------------------------------------------------------------------------------- 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 invest- investment dealer, you may be charged ment dealer for this service. SHARES HELD FOR YOU 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 faxing, or record and be sent to the address of telegraphing record provided the address has been American used with the account for at least 10 Funds Service days. See "Transfer Agent" and Company "Exchange Privilege" above for the (subject to appropriate telephone or fax number. the condi- tions noted in this sec- tion 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. 21 - ------------------------------------------------------------------------------- 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)), 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 made within twelve months of purchase on investments of $1 million or more and on any investment made with no initial sales charge by any employer-sponsored 403(b) plan or 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 redemptions resulting from participant- directed switches among investment options within a participant-directed employer-sponsored retirement plan; 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 a sales charge (any contingent deferred sales charge paid will be credited to your 22 - ------------------------------------------------------------------------------- account) in any fund in The American Funds Group. Send a written 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 23 March 1, 1996 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, 1996, 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 OR GUARANTEED BY THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, 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. 08-010-0396 RP - ------------------------------------------------------------------------------- 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 with no sales charge. 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........................................................ 0.25%/2/ Other expenses (including audit, legal, shareholder services, transfer agent and custodian expenses)........................................ 0.12% Total fund operating expenses......................................... 0.74%
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/ $8 $24 $41 $92
/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. 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% applies on certain redemptions made 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. TABLE OF CONTENTS Summary of Expenses.......... 2 Financial Highlights......... 3 Investment Objective and Policies.................... 3 Certain Securities and Investment Techniques....... 5 Investment Results........... 9 Dividends, Distributions and Taxes....................... 10 Fund Organization and Management.................. 11 Purchasing Shares............ 13 Shareholder Services......... 14 Redeeming Shares............. 15
2 - ------------------------------------------------------------------------------- FINANCIAL The following information has been audited by Deloitte HIGHLIGHTS & Touche LLP, independent accountants, whose unquali- fied report covering each of the most recent five years (For a share is included in the statement of additional information. outstanding This information should be read in conjunction with the throughout the financial statements and accompanying notes which are fiscal year) included in the statement of additional information.
YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, Begin- ning of Year........... $12.69 $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 $14.01 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment income.. 1.05 1.05 1.09 1.15 1.21 1.24 1.31 1.28 1.28 1.38 Net realized and unrealized gain (loss) on investments........ 1.18 (1.76) .84 .34 1.28 (.84) (.02) .08 (1.02) .66 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total income from in- vestment operations.. 2.23 (0.71) 1.93 1.49 2.49 .40 1.29 1.36 .26 2.04 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ LESS DISTRIBUTIONS Dividends from net in- vestment income....... (1.04) (1.05) (1.08) (1.16) (1.18) (1.24) (1.30) (1.26) (1.23) (1.44) Distributions from net realized gains........ -- -- (.39) (.04) -- -- -- -- (.10)/1/ (.40) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total distributions... (1.04) (1.05) ( 1.47) (1.20) (1.18) (1.24) (1.30) (1.26) (1.33) (1.84) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, End of Year................... $13.88 $12.69 $14.45 $13.99 $13.70 $12.39 $13.23 $13.24 $13.14 $14.21 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== Total Return/2/ 18.25% (5.02)% 14.14% 11.34% 21.04% 3.27% 10.13% 10.70% 1.96% 15.17% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (in millions)......... $6,290 $4,941 $5,285 $3,917 $2,859 $1,945 $1,481 $1,021 $ 825 $ 694 Ratio of expenses to average net assets.... .74% .69% .71% .73% .77% .76% .76% .66% .59% .58% Ratio of net income to average net assets.... 7.87% 7.77% 7.53% 8.36% 9.28% 9.70% 9.73% 9.54% 9.45% 9.39% Portfolio turnover rate.................. 43.80% 57.0% 44.7% 49.7% 56.5% 59.9% 64.2% 93.0% 93.0% 107.8%
-------- /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; 3 - ------------------------------------------------------------------------------- . 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). 4 - ------------------------------------------------------------------------------- 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. However, securities rated Ba and BB or below or unrated securi- ties 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 pur- chase. In addition, the fund may from time to time invest in fixed-income securities of corporations outside the U.S. or governmental entities and may purchase or sell various currencies and enter into forward currency con- tracts in connection with these investments. The fund may also invest up to 1% of its assets in inverse floating rate notes (a type of derivative instrument). 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, 1995 was as follows: bonds--Aaa/AAA-42.84%; Aa/AA-3.49%; A/A-6.26%; Baa/BBB-10.17%; Ba/BB-7.45%; B/B-11.95%, and Caa/ CCC-1.41%. Other investments, including non-rated investments, equity-type securities and cash or cash equivalents amounted to 1.74%, 3.34% and 11.35%, 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 and 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, economic and 5 - ------------------------------------------------------------------------------- market developments and investor perceptions of the is- suer'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 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. INVESTING IN VARIOUS COUNTRIES The fund may invest in securities which may be denominated in currencies other than the U.S. dollar. The fund may also invest in securities of issuers located outside the United States. Investing globally involves special risks, particularly in certain developing countries, caused by, among other things: trade balances and imbalances and related economic 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. 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, and frequently there may be less information publicly available about such companies. However, investing outside the U.S. also can reduce certain of these risks through greater diversification opportunities. Transaction costs are generally higher outside the U.S., and the fund will bear certain expenses in con- nection with its currency transactions. Increased cus- todian costs as well as administrative difficulties (for example, delays in clearing and settling portfolio transactions or in receiving payments of dividends) may be associated with the maintenance of assets in certain jurisdictions. CURRENCY TRANSACTIONS The fund has the ability to pur- chase and sell currencies to facilitate securities transactions and to enter into forward currency con- tracts to hedge against changes in currency exchange rates. While entering into forward transactions could minimize the risk of loss due to a decline in the value of the hedged currency, it could also limit any poten- tial gain which might result from an increase in the value of the currency. (See "Currency Transactions" in the statement of additional information.) 6 - ------------------------------------------------------------------------------- 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. In addition, the fund may enter into other purchase and sale transactions involving se- curities which are not settled in the ordinary course of business and under various terms when to do so is in the best interest of the fund. 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 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 under the repurchase agreement defaults, the fund may incur 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 respect to the seller, liquidation of the collateral by the fund may be delayed or limited. 7 - ------------------------------------------------------------------------------- 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. 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. 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 8 - ------------------------------------------------------------------------------- the portfolio of the fund is divided into segments which are managed by individual counselors. Each counselor decides how their 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 PORTFOLIO WITH CAPITAL PORTFOLIO COUNSELOR FOR RESEARCH AND COUNSELORS FOR THE BOND FUND MANAGEMENT THE BOND FUND OF AMERICA COMPANY OR ITS TOTAL OF AMERICA PRIMARY TITLE(S) (APPROXIMATE) AFFILIATES YEARS - ----------------------------------------------------------------------------------------------------------------------------- Abner D. Goldstine President and Director of Since the fund began 29 years 44 years the fund. Senior Vice President operations in 1974 and Director, Capital Research and Management Company - ----------------------------------------------------------------------------------------------------------------------------- Richard T. Schotte Senior Vice President of 18 years 18 years 29 years the fund. Senior Vice President, Capital Research and Management Company John H. Smet Vice President of the 7 years 13 years 14 years fund. Vice President, Capital Research and Management Company - ----------------------------------------------------------------------------------------------------------------------------- Mark H. Dalzell Vice President, Investment 2 years 8 years 18 years Management Group, Capital Research and Management Company - ----------------------------------------------------------------------------------------------------------------------------- The fund began operations on May 28, 1974. - -----------------------------------------------------------------------------------------------------------------------------
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 to- return (at no tal return, yield, and/or distribution rate basis for sales charge) of various periods, with or without sales charges. Results 10.65% a year over calculated without a sales charge will be higher. Total its lifetime returns assume the reinvestment of all dividends and (May 28, 1974 capital gain distributions. through December 31, 1995). The fund's yield and the average annual total returns are calculated with no sales charge in accordance with Securities and Exchange Commission requirements. The fund's distribution rate is calculated by annualizing the current month's dividend and dividing by the average price for the month. For the 30-day period ended December 31, 1995, the fund's SEC yield was 6.49% and the distribution rate was 7.18% with no sales charge. The SEC yield reflects income earned by the fund, while the distribution rate reflects dividends paid by the fund. The fund's total 9 - ------------------------------------------------------------------------------- return over the past 12 months and average annual total returns over the past five-year and ten-year periods, as of December 31, 1995, were 18.25%, 11.56% and 9.83%, 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 the accrued dividends to shareholders each month. Divi- dends begin accruing one day after payment for shares Income is received by the fund or American Funds Service Com- distributions are pany. All capital gains, if any, are distributed annu- made each month. ally, usually in December. When a capital gain is de- clared, 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 quali- fies and distributes to shareholders all of its net in- vestment income and net capital gains, the fund itself is relieved of federal income tax. The tax treatment of redemptions from a retirement plan may differ from re- demptions 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 AND MANAGEMENT organized 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 Group, which is certain fees for services rendered to the fund as managed by one of described 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 member 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 under 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 Angeles, 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 assets, 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 $6 billion and gross investment income levels of 6%, 7%, 8%, 9%, 10% and 11%, management fees would be .31%, .33%, .36%, .38%, .40%, and .42%, 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 other funds served by Capi- tal 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). TRANSFER AGENT American Funds Service Company, 800/421- 0180, a wholly owned subsidiary of Capital Research and Management Company, 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 $4,205,000 for the fiscal year ended December 31, 1995. 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 employer-sponsored 403(b) plan or 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 made within twelve months 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.) The minimum initial investment 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. American Funds Distributors, at its expense, (from a designated percentage of its income), will, during calendar year 1996, 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. Such incentive payments will be based on a pro rata share of a qualifying dealer's sales. American Funds Distributors will, on an annual basis, determine the advisability of continuing these payments. 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 13 - ------------------------------------------------------------------------------- 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 next determined 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.") 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 or cross-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. 14 - ------------------------------------------------------------------------------- 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 contact- Your plan administrator/trustee must ing your plan send a letter of instruction administrator/ specifying the name of the fund, the trustee number of shares or dollar amount to 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 (i.e., trustees 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 contact- Shares may also be redeemed through ing an in- an investment dealer; however, you or vestment your plan may be charged for this dealer service. SHARES HELD FOR YOU IN AN INVESTMENT DEALER'S STREET NAME MUST BE REDEEMED THROUGH THE DEALER. -------------------------------------------------------- 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 made within twelve months of purchase on investments of $1 million or more and on any investment made with no initial sales charge by any employer-sponsored 403(b) plan or 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 15 - ------------------------------------------------------------------------------- benefit plans; for redemptions resulting from participant-directed switches among investment options within a participant-directed employer-sponsored retirement plan, 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 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. 16 THE BOND FUND OF AMERICA, INC. The Bond Fund of America, Inc.(R) March 1, 1996 THE BOND FUND OF AMERICA, INC.(R) Profile 333 South Hope Street March 1, 1996 Los Angeles, CA 90071 1. Goal The fund seeks to provide you with high income while preserving your investment. 2. Investment Strategies The fund will invest at least 60% of its assets in higher quality bonds (rated "A" or better). The fund may also hold lower rated bonds (including "junk bonds"). In addition, the fund may invest in non-U.S. bonds to a limited degree. The fund has no maturity limits. 3. Risks Investing in bonds involves risk, including credit risk (the possibility that the bond issuer will default on its obligation) and market risk (when interest rates rise, bond prices fall and vice versa). Lower rated bonds are subject to greater price fluctuations and risk of loss than higher rated bonds. Moreover, investing outside the U.S. involves special risks, such as currency fluctuations. You can lose money by investing in the fund; your investment is not guaranteed. The likelihood of loss is greater if you intend to invest for a shorter period of time. 4. Appropriateness If you are not a long-term investor seeking current income and are not willing to accept the risks described above including the risks of investing in lower rated bonds, this fund may not be appropriate for you. Please consult your investment dealer. 5. Fees and Expenses Shareholder transaction expenses are charges you pay when you buy or sell shares of a fund. Annual fund operating expenses are paid out of the fund's assets. The fund's expenses are factored into its share price and distributions and are not charged directly to shareholder accounts. Shareholder Transaction Expenses
Maximum sales charge on purchases (as a percentage of offering price) 4.75%
SALES CHARGES ARE REDUCED OR ELIMINATED FOR LARGER PURCHASES. The fund has no sales charge on reinvested dividends, and no deferred sales charge or redemption or exchange fees. A contingent deferred sales charge of 1% applies on certain redemptions made within 12 months following purchases without a sales charge. Annual Fund Operating Expenses (as a percentage of average net assets)
Management fees 0.37% 12b-1 expenses 0.25% Other expenses 0.12% Total fund operating expenses 0.74%
Example You would pay the following cumulative expenses on a $1,000 investment, assuming a 5% annual return. This example should not be considered a representation of past or future expenses.
One year $ 55 Three years 70 Five years 87 Ten years 135
6. Past Results Here are the fund's annual total returns for each of the past 10 calendar years: [CHART]
1986 15.17 1987 1.96 1988 10.70 1989 10.13 1990 3.27 1991 21.04 1992 11.34 1993 14.14 1994 -5.02 1995 18.25
[END CHART] Sales charges have not been deducted from results shown above. The fund's average annual total return* is +10.65% over its lifetime (May 28, 1974 through December 31, 1995). PAST RESULTS ARE NOT A GUARANTEE OF FUTURE RESULTS.
Average Annual Total Returns* One year + 12.66% Five years + 10.47% Lifetime + 9.30% 30-Day Yield* 6.18%
* These results were calculated for periods ended December 31, 1995 in accordance with Securities and Exchange Commission rules which require that the maximum sales charge be deducted. 7. Investment Adviser Capital Research and Management Company, one of the world's largest and most experienced investment advisers, manages the fund, which is a member of The American Funds Group. Capital Research and Management Company manages this diversified mutual fund using the multiple portfolio counselor system. Under this system, the fund's assets are divided into several portions. Each portion is independently managed by a portfolio counselor or a group of research professionals, subject to oversight by the investment adviser's investment committee. 8. Purchases The fund's shares are sold through investment dealers. Your investment dealer can help you with your account, or you may call American Funds Service Company at 800/421-0180 with questions about your account. Generally, the minimum initial investment is $1,000. 9. Redemptions You may redeem shares through your investment dealer or by calling American FundsLineR at 800/325-3590. (You will need the fund's number - 08 - if you use this service.) Transactions will be processed as of the next close of the New York Stock Exchange. 10. Distributions Dividends and capital gain distributions are automatically reinvested unless you notify American Funds Service Company that you would like to invest them in another of the American Funds or receive payment in cash. Income distributions are usually made monthly. Capital gains, if any, are usually distributed in December. 11. Other Services You may exchange your shares for any of the other American Funds or obtain information about your investment any time by calling American FundsLineR. If you purchase shares at net asset value through a retirement plan, some or all of the services or features described may not be available. Contact your employer for details. This Profile contains key information about the fund. More details appear in the fund's accompanying prospectus. This profile has been printed on recycled paper that meets the guidelines of the United States Environmental Protection Agency. PART B STATEMENT OF ADDITIONAL INFORMATION MARCH 1, 1996 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, 1996. 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 17 EXECUTION OF PORTFOLIO TRANSACTIONS 18 GENERAL INFORMATION 18 INVESTMENT RESULTS 19 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 purchase and sell currencies to facilitate securities transactions and to enter into forward currency contracts to hedge against changes in currency exchange rates. THE FUND PURCHASES OR SELLS CURRENCY IN CONNECTION WITH SETTLING TRANSACTIONS INVOLVING SECURITIES DENOMINATED IN CURRENCIES OTHER THAN THE U.S. DOLLAR. A forward currency contract is an obligation to purchase or sell a specific currency at a future date and price, both of which are set at the time of the contract. FOR EXAMPLE, THE FUND MIGHT SELL A CURRENCY ON A FORWARD BASIS TO HEDGE AGAINST AN ANTICIPATED DECLINE IN THE CURRENCY IN WHICH A PORTFOLIO SECURITY IS DENOMINATED. 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 in 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 - The fund is authorized to invest up to 1% 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 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 12/31/95 ++ H. Frederick Christie Director Private Investor. The Mission P. O. Box 144 Group (non-utility holding $ 5,459/3/ $138,050 18 Palos Verdes, CA 90274 company, subsidiary of Southern Age: 62 California Edison Company), former President and Chief Executive Officer Diane C. Creel Director Chairwoman, CEO and President, 100 W. Broadway The Earth Technology Corporation 4,855 36,075 12 Suite 5000 Long Beach, CA 90802 Age: 47 Martin Fenton, Jr. Director Chairman, Senior Resource Group 4350 Executive Drive (management of senior living 5,072/3/ 112,550 16 Suite 101 centers) San Diego, CA 92121-2116 Age: 60 Leonard R. Fuller Director President, Fuller & Company, Inc. 4333 Admiralty Way (financial management consulting 5,511 39,175 12 Suite 841 ETH firm) Marina del Rey, CA 90292 Age: 49 +* Abner D. Goldstine President, PEO Capital Research and Management Age: 66 and Director Company, Senior Vice President none/4/ none/4/ 12 and Director +** Paul G. Haaga, Jr. Chairman of Capital Research and Management Age: 47 the Board Company, Senior Vice President none/4/ none/4/ 14 and Director Herbert Hoover III Director Private Investor 200 S. Los Robles 5,277 59,800 14 Avenue Suite 520 Pasadena, CA 91101-2431 Age: 68 Richard G. Newman Director Chairman, President and CEO, 3250 Wilshire Boulevard AECOM Technology Corporation 5,091/3/ 39,000 12 Los Angeles, CA 90010- (architectural engineering) 1599 Age: 61 Peter C. Valli Director Chairman and CEO, BW/IP 200 Oceangate Boulevard International Inc. (industrial 5,000/3/ 37,000 12 Suite 900 manufacturing) Long Beach, CA 90802 Age: 69
+ 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: H. Frederick Christie ($6,412), Martin Fenton, Jr. ($7,238), Richard G. Newman ($12,661) and Peter C. Valli ($12,557). 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. HALL, 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, Assistant Vice President - Fund Business Management Group ** ANTHONY W. HYNES, JR., 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, 1996, 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 more than $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, 1996 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, 1995, 1994, and 1993, the Investment Adviser's total fees amounted to $20,858,000, $18,755,000, and $17,170,000, 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, 1995 amounted to $4,814,000 after allowance of $20,990,000 to dealers. During the fiscal years ended December 31, 1994 and 1993 the Principal Underwriter retained $4,561,902 and $8,418,631, 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 employer-sponsored 403(b) plan or 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, 1995, the fund paid $13,834,000 under the Plan as compensation to dealers. As of December 31, 1995 accrued and unpaid distribution expenses were $926,000. 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 substantially identical 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 or 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 federal individual stated 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%. However, to eliminate the benefit of lower marginal corporate income tax rates, 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 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, American Funds Service Company, 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 debentures 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, upon last-reported bid prices on that date. Securities traded in the over-the-counter market are valued at the last available sale prior prior to the time of valuation, or, lacking any sales, at the last reported bid price. 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 representative quoted bid and asked prices or, if such prices are not available, at 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. Short-term securities with original or remaining maturities in excess of 60 days 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. 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 subject to the following statement of intention (the "Statement") terms . The Statement is not a binding obligation to purchase the indicated amount. When a shareholder elects to utilize the 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 45 days after written request by the Principal Underwriter or the securities dealer, the appropriate number of shares held in escrow 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. Existing holdings eligible for rights of accumulation (see the prospectus and account application) may be credited toward satisfying the Statement. During the Statement period reinvested dividends and capital gain distributions, investments in money market funds, and investments made under a right of reinstatement will not be credited toward satisfying the Statement. 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 regular monthly payroll deduction investment will be multiplied by 13 and then multiplied by 1.5. The current value of existing American Funds investments (other than money market fund investments) and any rollovers or transfers reasonably anticipated to be invested in non-money market American Funds during the 13-month period are added to the figure determined above. The sum is the Statement amount and applicable breakpoint level. 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. Shareholders purchasing shares at a reduced sales charge under a Statement indicate their acceptance of these terms with their first purchase. 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 employer-sponsored 403(b) plan or 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 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 at least quarterly. 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. Brokerage commissions paid on portfolio transactions, including dealer concessions on underwritings, for the fiscal years ended December 31, 1995, 1994, and 1993, amounted to $7,096,214, $6,647,968, and $8,431,663, 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, 1995 Net asset value and redemption price $13.88 per share (Net assets divided by shares outstanding) Maximum offering price per share $14.57 (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 6.18% based on a 30-day (or one month) period ended December 31, 1995, 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 may also calculate a distribution rate on a taxable and tax equivalent basis. The distribution rate is computed by annualizing the current month's dividend and dividing by the average net asset value or maximum offering price for the month. The distribution rate may differ from the yield. 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, 1995, were 12.66%, 10.47%, and 9.30%, 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 Brothers Savings (1) (2) Deposit (3) 1986 - 1995 + 143% + 152% + 171% + 69% 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 (1/1/91-12/31/95) (1/1/86-12/31/95) $12,845 $33,230
SEE THE DIFFERENCE TIME CAN MAKE IN AN INVESTMENT PROGRAM
If you had invested ...and taken all $10,000 in the Fund distributions in this many years shares, ago... your investment would have been worth this much at Dec. 31, 1995 | Period | Number of 1/1-12/31 Years Value 1 1995 $11,266 2 1994 - 1995 10,699 3 1993 - 1995 12,209 4 1992 - 1995 13,598 5 1991 - 1995 16,454 6 1990 - 1995 16,994 7 1989 - 1995 18,716 8 1988 - 1995 20,711 9 1987 - 1995 21,123 10 1986 - 1995 24,327 11 1985 - 1995 30,791 12 1984 - 1995 34,478 13 1983 - 1995 37,750 14 1982 - 1995 50,177 15 1981 - 1995 53,474 16 1980 - 1995 55,371 17 1979 - 1995 57,123 18 1978 - 1995 58,284 19 1977 - 1995 61,285 20 1976 - 1995 72,413 21 1975 - 1995 81,578 22 1974*- 1995 84,645
* 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, 1995 (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, 1995)
COST OF VALUE OF SHARES SHARES Annual Dividends Total From From From Total Fisca Dividend (cumulati Investment Initial Capital Gains Dividends l s ve) Cost Investment Reinvested Reinvested Value Year End Dec. 31 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 1994 5,673 62,110 72,110 8,806 3,075 59,701 71,582 1995 6,112 68,222 78,222 9,632 3,363 71,650 84,645
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 Corporate Bonds 41% Mortgage and Asset-Backed Securities 23% U.S. Treasury Securities 21% Cash Equivalents 9% Non-U.S. Government Bonds and Development Agencies 6%
Principal Market Percent of INVESTMENT PORTFOLIO DECEMBER 31, 1995 Amount Value Net Assets (000) (000) ELECTRICAL & GAS UTILITIES UTILITIES: ELECTRICAL & GAS Big Rivers Electric Corp. 10.70% 2017 17,000 19,156 .31% CEZ Finance BV 8.875% 1999/1/ 7,000 7,656 .12 CMS Energy 0%/9.50% 1997/2/ 2,000 2,063 .03 Columbia Gas System: Series A 6.39% 2000 10,000 10,152 Series C 6.80% 2005 22,000 22,629 1.16 Series D 7.05% 2007 5,000 5,181 Series F 7.42% 2015 35,000 35,437 Long Island Lighting Co.: .00 6.25% 2011 4,000 3,833 .06 8.90% 2019 5,000 5,050 .08 8.20% 2023 10,000 9,800 .16 United Illuminating Co. 9.76% 2006 5,388 5,658 .09 --------- -------- 126,615 2.01 INDUSTRIAL & SERVICE --------- -------- AUTOMOBILES General Motors Corp.: 9.45% 2011 20,000 25,164 8.80% 2021 52,000 64,092 1.42 --------- -------- 89,256 1.42 --------- -------- BEVERAGES & TOBACCO Canandaigua Wine Co., Inc. 8.75% 2003 2,000 2,010 .03 Dr Pepper Bottling Co. of Texas 10.25% 2000 8,500 8,967 .14 --------- -------- 10,977 .17 --------- -------- BROADCASTING & PUBLISHING American Media Operations, Inc. 11.625% 2004 11,500 11,615 .18 Infinity Broadcasting Corp. 10.375% 2002 10,500 11,287 .18 Marvel Holdings Inc. 0% 1998 55,250 39,780 .63 People's Choice TV Corp. 0%/13.125% 2004/2/ 23,250 13,543 .22 Univision Television Group, Inc.: 11.75% 2001 5,500 5,968 .09 7.00% 2002 3,498 2,217 .04 Young Broadcasting Inc. 10.125% 2005 3,000 3,165 .05 --------- -------- 87,575 1.39 --------- -------- CONSTRUCTION & HOUSING Del Webb Corp. 9.75% 2003 10,000 10,175 .17 Kaufman and Broad Home Corp. 10.375% 1999 7,500 7,650 .12 M.D.C. Holdings, Inc. 11.125% 2003 12,000 11,430 .18 --------- -------- 29,255 .47 --------- -------- DATA PROCESSING & REPRODUCTION AST Research, Inc. 0% 2013 31,500 10,710 .17 Data General Corp.: 7.75% convertible debentures 2001 8,000 7,840 .13 8.375% 2002 1,250 1,228 .02 Maxtor Corp. 5.75% convertible debentures 2012 2,000 1,550 .02 Neodata Services, Inc. 0%/12.00% 2003/2/ 13,000 11,960 .19 VLSI Technology, Inc. 8.25% convertible 4,000 3,670 .06 debentures 2005 --------- -------- 36,958 .59 --------- -------- DIVERSIFIED MEDIA & CABLE TELEVISION Adelphia Communications Corp. 9.50% 2004 2,498 1,980 .03 Bell Cablemedia PLC 0%/11.95% 2004/2/ 39,500 27,847 .44 Cablevision Industries Corp.: 10.75% 2004 1,000 1,055 .02 9.875% 2013 5,000 5,312 .08 CAI Wireless Systems, Inc. 12.25% 2002 5,250 5,604 .09 Century Communications Corp.: 9.50% 2000 3,500 3,631 .06 9.75% 2002 4,550 4,755 .08 Comcast Corp.: 10.25% 2001 13,000 14,072 .22 9.375% 2005 3,000 3,173 .05 1.125% convertible debentures 2007 25,000 12,687 .20 Continental Cablevision, Inc.: 8.50% 2001 22,050 22,877 .36 10.625% 2002 4,500 4,804 .08 8.625% 2003 4,000 4,160 .07 8.875% 2005 10,000 10,475 .17 8.30% 2006/1/ 15,750 15,809 .25 11.00% 2007 3,000 3,352 .05 9.00% 2008 9,000 9,450 .15 9.50% 2013 10,500 11,287 .18 Heartland Wireless Communications, Inc. 4,000 4,510 .07 13.00% 2003/1/ Insight Communications Co.,LP 8.25% 2000/3/ 11,250 11,137 .18 International CableTel Inc.: 0%/10.875% 2003/2/ 9,500 6,840 .11 0%/12.75% 2005/2/ 17,750 11,227 .18 News America Holdings Inc.: 10.125% 2012 26,000 31,465 .50 8.625% 2014 A$3,250 2,117 .03 8.45% 2034 10,000 11,537 .18 Rogers Communications Inc. 10.875% 2004 3,500 3,658 .06 Storer Communications, Inc. 10.00% 2003 11,087 11,156 .18 Tele-Communications, Inc. 9.25% 2023 7,500 8,187 .13 Time Warner Inc.: 9.625% 2002 15,000 17,376 .27 10.15% 2012 17,500 21,691 .34 0% convertible debentures 2013 40,000 16,500 .26 9.125% 2013 21,000 23,666 .38 TKR Cable I, Inc. 10.50% 2007 27,500 31,969 .51 Turner Broadcasting System, Inc. 0% 2007/1/ 15,000 6,863 .11 Viacom International Inc.: 9.125% 1999 5,000 5,225 .08 10.25% 2001 2,600 2,990 .05 Videotron Holdings PLC 0%/11.125% 2004/2/ 20,500 14,299 .23 --------- -------- 404,743 6.43 --------- -------- ELECTRICAL & ELECTRONICS General Electric Co. 8.625% 2008 3,000 3,617 .06 MagneTek, Inc. 10.75% 1998 7,500 7,706 .12 Samsung Electronics Co., Ltd. 8.50% 2002/1/ 27,850 30,983 .49 --------- -------- 42,306 .67 --------- -------- ENERGY & RELATED COMPANIES BP America Inc. 10.00% 2018 4,000 4,532 .07 California Energy Co., Inc.: 9.875% 2003 14,000 14,700 .23 0%/10.25% 2004/2/ 38,600 36,477 .58 Flores & Rucks, 13.50% 2004 4,300 4,880 .08 Global Marine, Inc. 12.75% 1999 4,250 4,696 .07 Mesa Capital Corp. 0%/12.75% 1998/2/ 7,500 6,637 .11 Midland Cogeneration Venture LP: 10.33% 2002 8,052 8,374 .13 secured lease obligation bonds, 10.33% 2002 7,398 7,694 .12 Mobil Corp. 8.00% 2032 10,000 11,058 .18 Occidental Petroleum Corp. 9.25% 2019 12,000 15,098 .24 Oil Co. Ltd. 8.90% 2000/1/ 20,000 20,800 .33 Oryx Energy Co. 9.50% 1999 3,500 3,765 .06 Parker & Parsley Petroleum 8.25% 2007 11,000 11,893 .19 Subic Power Corp. 9.50% 2008/1/ 7,845 7,394 .12 TransTexas Gas Corp. 11.50% 2002 15,000 15,488 .25 --------- -------- 173,486 2.76 --------- -------- FOOD RETAILING Allied Supermarkets Inc. 6.625% 1998 3,590 3,554 .06 Carr-Gottstein Co. 12.00% 2005 9,000 9,090 .14 Safeway Inc. 10.00% 2002 1,500 1,755 .03 Smith's Food & Drug Centers, Inc., Series 94A2, 0%/8.64% 2012/2/ 14,000 14,822 .24 Star Markets Co., Inc. 13.00% 2004 1,500 1,530 .02 Stater Bros. Holdings Inc. 11.00% 2001 9,500 9,453 .15 Vons Companies, Inc. 9.625% 2002 1,000 1,060 .02 --------- -------- 41,264 .66 --------- -------- FOREST PRODUCTS & PAPER Container Corp. of America: 10.75% 2002 4,300 4,364 .07 9.75% 2003 36,000 35,100 .56 11.25% 2004 2,500 2,575 .04 Fort Howard Corp.: 9.25% 2001 7,750 7,866 .13 11.00% 2002 3,746 3,915 .06 10.00% 2003 5,250 5,407 .09 Fort Howard Paper Co.: 8.25% 2002 3,000 2,925 .04 9.00% 2006 6,750 6,615 .11 Grupo Industrial Durango, SA de CV: 9.25% 1996/1/ /3/ 7,500 7,219 .11 12.00% 2001 3,000 2,655 .04 PT Indah Kiat Paper & Pulp Corp.: 8.875% 2000 2,000 1,890 .03 8.875% 2000/1/ 9,135 8,633 .13 11.875% 2002 2,000 2,020 .03 P.T. Inti Indorayon Utama 9.125% 2000 3,000 2,801 .04 Pacific Lumber Co. 10.50% 2003 500 474 .01 Repap Wisconsin 9.875% 2006 12,250 11,576 .18 Riverwood International Corp.: 10.75% 2000 4,500 4,838 .08 Series II 10.75% 2000 1,500 1,613 .03 11.25% 2002 1,000 1,085 .02 Tjiwi Kimia International Finance Co. 8,500 9,201 .15 13.25% 2001 --------- -------- 122,772 1.95 --------- -------- GENERAL RETAILING & MERCHANDISING Ann Taylor, Inc. 8.75% 2000 4,500 3,735 .06 Barnes & Noble, Inc. 11.875% 2003 10,000 11,100 .17 Dayton Hudson Corp.: 10.00% 2010 10,000 10,784 .17 8.50% 2022 5,000 6,244 .10 Levitz Furniture Corp. 12.375% 1997 425 385 .01 Thrifty PayLess, Inc.: 11.75% 2003 15,000 16,200 .26 12.25% 2004 16,500 17,573 .28 Units 12.25% 2004 5,000 5,750 .09 --------- -------- 71,771 1.14 --------- -------- HEALTH & PERSONAL CARE FHP International Corp. 7.00% 2003 5,000 4,934 .08 Merit Behaviorial Care Corp. 11.50% 2005/1/ 3,000 3,105 .05 --------- -------- 8,039 .13 --------- -------- LEISURE & TOURISM Discovery Zone 0% convertible debentures 2013 28,500 7,410 .12 Euro Disney SCA 6.75% convertible FF108,780 20,068 .32 debentures 2001 Foodmaker, Inc.: 9.25% 1999 12,200 11,712 .19 9.75% 2002 8,300 7,677 .12 Four Seasons Hotels Inc. 9.125% 2000 6,000 5,985 .09 Harrah's Jazz Finance Corp. 14.25% 2001 3,000 825 .01 Harrah's Jazz Co. 8.75% 2000 2,000 2,025 .03 Kloster Cruise Ltd. 13.00% 2003 25,750 19,570 .31 Plitt Theatres, Inc. 10.875% 2004 6,850 6,199 .10 Station Casinos, Inc. 9.625% 2003 1,000 993 .02 --------- -------- 82,464 1.31 --------- -------- MACHINERY & ENGINEERING Coltec Industries Inc.: 9.75% 1999 7,000 7,210 .11 9.75% 2000 7,500 7,725 .12 John Deere Capital Corp. 8.625% 2019 9,150 10,493 .17 NL Industries 11.75% 2003 1,000 1,067 .02 --------- -------- 26,495 .42 --------- -------- METALS Acme Metals Inc.: 0%/13.50% 2004/2/ 9,000 7,403 .12 12.50% 2004 4,500 4,545 .07 AK Steel Corp. 10.75% 2004 6,500 7,215 .12 Inco Ltd.: 9.875% 2019 7,500 8,413 .13 9.60% 2022 16,000 18,505 .30 ISPAT Mexicana: (Euro) 10.375% 2001 4,650 4,266 .07 10.375% 2001/1/ 2,000 1,835 .03 Kaiser Aluminum and Chemical Corp.: 9.875% 2002 1,400 1,438 .02 12.75% 2003 18,500 20,257 .32 Tubos de Acero de Mexico, SA 13.750% 1999/1/ 2,500 2,531 .04 UCAR Global Enterprises Inc. 12.00% 2005 3,430 3,962 .06 USX Corp. 9.125% 2013 15,000 17,246 .27 --------- -------- 97,616 1.55 --------- -------- MISCELLANEOUS MATERIALS & COMMODITIES Building Materials Corp. of America 6,000 4,140 .07 0%/11.75% 2004/2/ Exide Corp. 10.00% 2005 5,500 5,967 .09 Owens-Illinois, Inc. 11.00% 2003 5,000 5,650 .09 Tolmex, SA de CV 8.375% 2003 5,500 4,441 .07 --------- -------- 20,198 .32 --------- -------- Multi-Industry Hanson America, Inc. 144A 2.39% convertible debentures 2001/1/ 20,000 16,650 .26 Swire Pacific Ltd. 8.50% 2004/1/ 25,000 27,459 .44 Tenneco Inc. 7.875% 2002 3,000 3,277 .05 --------- -------- 47,386 .75 --------- -------- OTHER ADT Operations 9.25% 2003 2,500 2,681 .04 ASH Capital Finance, Ltd. 9.50% 2006 Pound4,500 4,997 .08 Protection One Alarm Monitoring, Inc. 17,000 14,185 .23 0%/13.625% 2005/2/ --------- -------- 21,863 .35 --------- -------- TELECOMMUNICATIONS CellNet Data Systems, Inc. 0%/13.00% 2005/1/ /2/ /4/ 40,750 24,654 .39 Cellular Communications International, 15,071 9,043 .14 Inc. 0% 2000 Cellular, Inc. 0%/11.75% 2003/2/ 10,500 8,347 .13 CenCall Communications Corp. 0%/10.125% 2004/2/ /5/ 26,500 14,972 .24 Centennial Cellular Corp. 8.875% 2001 19,000 18,715 .30 Comcast Cellular Corp.: Series A, 0% 2000 22,500 17,325 .28 Series B, 0% 2000 18,400 14,168 .23 Comcast UK Cable Partners Ltd. 0%/11.20% 2007/2/ 18,000 10,530 .17 Commnet Cellular Inc. 11.25% 2005 5,500 5,803 .09 Comunicacion Celular S.A. Units 17,550 10,025 .16 0%/13.125% 2003/1/ /2/ Dial Call Communications, Inc. 0%/12.25% 2004/2/ /5/ 37,750 21,517 .34 Geotek Communications, Inc. 0%/15.00% 2005/2/ 8,750 4,134 .07 Horizon Cellular Telephone Co., LP 15,500 13,485 .21 0%/11.375% 2000/2/ IntelCom Group, Inc. 0%/13.50% 2005/1/ /2/ 16,250 9,466 .15 MFS Communications Co., Inc. 0%/9.375% 2004/2/ 42,500 34,319 .55 MobileMedia Communications, Inc. 0%/10.50% 2003/2/ 8,600 6,708 .11 NEXTEL Communications, Inc./5/: 0%/11.50% 2003/2/ 42,500 26,775 .42 0%/9.75% 2004/2/ 51,750 28,074 .45 Northern Telecom Ltd. 8.75% 2001 3,500 3,946 .06 Omnipoint Corp. 6.00%/12.00% 2000 /4/ 12,500 12,500 .20 Paging Network, Inc. 11.75% 2002 10,275 11,354 .18 PanAmSat, LP PanAmSat Capital Corp. 9.75% 2000 10,150 10,759 .17 PriCellular Wireless Corp.: 0%/14.00% 2001/2/ 6,000 5,295 .08 0%/12.25% 2003/2/ 12,200 9,425 .15 Rogers Cantel Mobile Communications Inc. 31,975 33,654 .53 10.75% 2001 TCI Communications, Inc Deb 8.75% 2015 10,000 11,087 .18 Telecom Argentina STET - France Telecom 5,500 5,871 .09 S. A. 12.00% 1999 Tele West plc: 9.625% 2006 3,000 3,060 .05 0%/11.00% 2007/2/ 16,000 9,660 .15 --------- -------- 394,671 6.27 --------- -------- TEXTILES & APPAREL Tultex Corp. 10.625% 2005 1,250 1,281 .02 WestPoint Stevens Inc. 8.75% 2001 2,500 2,500 .04 --------- -------- 3,781 .06 --------- -------- TRANSPORTATION Air Wis Services, Inc. 7.75% convertible 4,000 3,540 .06 debentures 2010 Alaska Airlines: Series A, 9.50% 2010 2,397 2,548 .04 Series B, 9.50% 2010 3,024 3,214 .05 Series C, 9.50% 2010 2,927 3,128 .05 Series D, 9.50% 2012 4,889 5,219 .08 American Airlines Inc., 1991-C2, pass-through certificates 9.73% 2014/6/ 6,000 7,080 .11 American Airlines, Inc., 1991-A, mortgage pass-through certificates, 9.71% 2007/6/ 9,244 10,734 .17 AMR Corp.: 10.40% 2011 13,000 16,043 .26 10.42% 2011 5,000 6,144 .10 Atlas Air,Inc., pass-through certificates, .00 12.25% 2002 Delta Air Lines, Inc.: 11,000 11,220 .18 9.875% 2000 2,000 2,261 .04 10.375% 2011 2,500 3,127 .05 9.25% 2022 5,000 5,906 .09 10.375% 2022 3,000 3,928 .06 pass-through certificates: Series 1992-A2, 9.20% 2014/6/ 11,750 13,350 .21 Series 1992-B1, 9.375% 2007/6/ 9,200 10,451 .17 Series 1993-A2, 10.50% 2016/6/ 15,000 18,910 .30 Series 1993-B2, 10.06% 2016/6/ 2,000 2,445 .04 Series 1993-C2, 9.59% 2017/6/ 5,000 5,925 .09 1990 Equipment trust certificates: Series J, 10.00% 2014/1/ 10,000 12,092 .19 Series I, 10.00% 2014/1/ 8,000 9,674 .15 Series F, 10.79% 2014/1/ 1,700 2,172 .04 Federal Express Corp. 8.40% 2010 10,000 10,875 .17 Jet Equipment Trust: Series 1994-A, 10.91% 2006/1/ 6,989 8,186 .13 Series 1995-B 10.91% 2014/1/ 5,000 5,381 .09 Series 1995-A, 10.69% 2015/1/ 10,500 12,613 .20 Series 1995B-A, 7.63% 2015/1/ 23,500 24,704 .39 Series 1995B-C, 9.71% 2015/1/ 5,500 6,119 .10 MC-Cuernavaca Trust 9.25% 2001/1/ 5,161 3,529 .06 Northwest Airlines, Inc. 12.0916% 2000 8,015 8,366 .13 TNT Transport (Euro) PLC/TNT (USA) Inc. 4,750 4,964 .08 11.50% 2004 United Air Lines, Inc.: 10.67% 2004 9,000 10,857 .17 pass-through certificates: Series 1993-A3, 8.39% 2011/6/ 7,500 8,008 .13 Series 1995-A1, 9.02% 2012/6/ 8,659 9,691 .15 USAir, pass-through trust, Series 2,000 1,880 .03 1993-A3, 10.375% 2013 Viking Star Shipping Inc. 9.625% 2003 4,000 4,100 .07 --------- -------- 278,384 4.43 --------- -------- FINANCE BANKING & THRIFTS Bank of Scotland 8.80% 2004/1/ 16,000 18,362 .29 Den Danske Bank Aktieselskab 7.25% 2005/1/ 14,025 14,804 .24 First Nationwide 12.25% 2001 9,000 10,170 .16 Kansallis-Osak-Pankki 9.75% 1998 5,000 5,527 .09 Maybank-New York 7.125% 2005 10,000 10,505 .17 Midland American Capital 12.75% 2003 12,150 14,340 .23 New American Capital, Inc. 9.60% 1999/1/ 15,000 15,113 .24 Skandinaviska Enskilda Banken (N.Y. City) 14,000 14,083 .22 6.875% 2009 State Bank of New South Wales Euronotes 3,000 3,403 .05 10.375% 1999 --------- -------- 106,307 1.69 --------- -------- FINANCIAL SERVICES Beneficial Corp. 12.875% 2013 3,800 4,596 .07 Ford Motor Credit Co. 9.50% 2000 7,350 8,280 .13 General Electric Capital Corp. 8.875% 2009 8,000 10,043 .16 General Motors Acceptance Corp.: 7.00% 2000 5,000 5,193 .08 8.75% 2005 10,000 11,615 .19 8.875% 2010 2,500 3,043 .05 --------- -------- 42,770 .68 --------- -------- INSURANCE American Re Corp. 10.875% 2004 15,000 16,734 .27 CIGNA Corp. 6.375% 2006 15,000 14,782 .23 Fairfax Financial Holdings Ltd.: 7.75% 2003 7,750 8,145 .13 8.25% 2015 6,250 6,696 .11 Fidelity National Financial 0% 2009 20,000 9,150 .14 --------- -------- 55,507 .88 --------- -------- REAL ESTATE B.F. Saul REIT 11.625% 2002 20,000 20,400 .32 Beverly Finance Corp. 8.36% 2004/1/ 15,000 16,519 .26 Corporate Property Investors 9.00% 2002/1/ 2,000 2,274 .04 ERP Operating Limited Partnership 7.95% 2002 6,750 7,213 .11 IRVINE Co. 7.46% 2006 17,000 16,979 .27 Price REIT, Inc. 7.25% 2000 5,000 5,052 .08 Security Capital Industrial Trust 7.875% 2009 6,250 6,641 .10 Shopping Center Associates 6.75% 2004/1/ 12,000 12,015 .19 Wellsford Residential Property Trust: 7.75% 2005 1,000 1,064 .02 7.25% 2000 1,000 1,032 .02 Wharf Capital International, Ltd. 8.875% 2004 15,000 16,108 .26 --------- -------- 105,297 1.67 --------- -------- COLLATERALIZED MORTGAGE/ASSET- BACKED OBLIGATIONS/6/ (Excluding Those Issued by Federal Agencies) Banco Nacional de Mexico 0% 2002/1/ 21,340 15,845 .25 Capstead Securities Corp. IV, collateralized mortgage obligations, Series 1992-4, 8,750 9,625 .15 Class J, 18.3103% 2022/7/ Chase Manhattan Bank, N.A., Series 93-I, Class 2A5, 7.25% 2024 2024 10,000 9,987 .16 Countrywide Funding Corp., Series 94-2, Class A-12, 5.6680% 2009/7/ 5,206 3,527 .06 CSFB Finance Co. Ltd. 7.00% 2005 30,000 29,797 .47 CS First Boston Mortgage Securities Corp., mortgage pass-through certificates: Series 1995-AEW1, 6.665% 2027/3/ 997 1,006 .02 Series 1995-MBL1 Class A 6.425% 2030 17,922 18,012 .29 Electronic Transfer Master Trust 9.35% 2002/1/ 18,000 18,162 .29 GCC Home Equity Trust, asset-backed certificates, Series 1990-1, 10.00% 2005 3,974 4,063 .06 G E Capital Mortgage Services: Series 1994-15, Class A10, 6.00% 2009 16,376 15,230 .24 Series 1995-1, Class A8, 8.40% 2025 21,785 22,972 .37 Green Tree Financial Corp., pass-through certificates: Series 1994-A, Class NIM, 6.90% 2004 3,350 3,347 .05 Series 1995-A, Class NIM, 7.25% 2005 3,555 3,598 .06 Series 1993-2, Class B, 8.00% 2018 2,250 2,377 .04 Series 1995-9, Class A-5, 6.80% 2027 8,000 8,180 .13 J.P. Morgan Commercial Mortgage Finance Corp., pass-through certificates, Series 1995-C1, Class A-2, 7.3517% 2010/3/ 1,000 1,054 .02 MBNA Credit Card Trust, asset-backed certificates, Series 1991-1, 7.75% 1998 6,000 6,092 .10 Merrill Lynch Mortgage Investors, Inc.: Seriies 1995-C2, Class D 8.0603% 2021/3/ 993 1,020 .02 Series 1995-C3, Class A1, 6.7889% 2025/3/ 1,993 2,035 .03 Morgan Stanley Capital Inc. Series 1995-GA1, Class A1, 7.00% 2002/1/ 19,104 19,510 .31 Prudential Home Mortgage Securities Co., Inc.: Series 1993-7, Class A-4, 8.00% 2003 9,323 9,416 .15 Series 1993-7, Class A-5, 8.00% 2003 5,406 5,413 .09 Series 1993-48, Class A-6, 6.25% 2008 4,466 4,318 .07 Series 1992-37, Class A-6, 7.00% 2022 2,460 2,457 .04 Series 1993-34, Class A-1, 7.00% 2023 16,910 17,021 .27 Residential Funding Mortgage Securities I, Inc., Series 1992-S6, Class A-10, 12.102% 2022/7/ 10,124 10,225 .16 Resolution Trust Corp.: Series 1991-M5, Class B, 9.00% 2017 2,560 2,649 .04 Series 1992-6, Class A-2B, 8.40% 2024 9,062 9,175 .14 Series 1993-C1, Class D, 9.45% 2024 9,352 9,799 .16 Series 1993-C1, Class E, 9.50% 2024 755 750 .01 Series 1993-C2, Class C, 8.00% 2025 3,000 3,105 .05 Series 1993-C2, Class D, 8.50% 2025 3,290 3,422 .05 Series 1993-C2, Class E, 8.50% 2025 801 792 .01 Ryland Mortgage Securities Corp., Series 1991-14, Class F, 21.528% 2021/7/ 1,070 1,113 .02 Structured Asset Securities Corp., pass-through certificates, Series 1995-C1, Class A1A, 928 942 .01 7.375% 2024 SKW II Real Estate L.P.: 6.45% 2002/1/ 887 888 .01 6.90% 2002/1/ 4,646 4,658 .07 Standard Credit Card Master Trust I, credit card participation certificates: Series 1991-1A, 8.50% 1997 10,500 10,628 .17 Series 1994-2A, 7.25% 2008 5,000 5,389 .09 Standard Credit Card Trust, credit card participation certificates: Series 1990-3A, 9.50% 1998 5,000 5,245 .08 Series 1990-6A, 9.375% 1998 4,000 4,211 .07 Series 1991-3A, 8.875% 1999 11,000 11,839 .19 Travelers Mortgage Services, Inc., pass-through certificates, Series 1989-9, Class Z-2, 802 815 .01 8.80% 2019 --------- -------- 319,709 5.08 --------- -------- GOVERNMENTAL GOVERNMENTS (EXCLUDING U.S. GOVERNMENT) Argentina (Republic of): 8.375% 2003 15,000 12,638 .20 Eurobond 6.8125% 2005/3/ 30,500 21,731 .34 Eurobond 5.00% 2023/3/ 6,500 3,721 .06 Brazil (Republic of): Debt Conversion Bond 6.875% 2012/3/ 2,000 1,148 .02 British Columbia Hydro & Power Authority: 15.50% 2011 17,000 18,979 .30 15.50% 2011 11,967 13,726 .22 12.50% 2013 4,000 4,806 .07 12.50% 2014 7,000 8,547 .14 Canadian Government: 10.50% 2001 C$5,000 4,277 .07 6.50% 2004 34,500 24,466 .39 9.00% 2004 37,750 31,201 .50 8.75% 2005 15,000 12,301 .19 4.524% 2021 2,000 1,514 .02 9.00% 2025 9,000 7,694 .12 Israel (State of) 6.375% 2005 13,000 13,130 .21 Italian Government National: 8.50% 2004 ITL7,200,000 4,033 .06 8.50% 2004 16,650,000 9,257 .15 Italy (Republic of) 6.875% 2023 38,000 37,109 .59 Netherlands Government DFL 7.50% 2023 FL41,300 28,167 .45 Nova Scotia (Province of): 7.25% 2013 4,000 4,192 .07 11.50% 2013 2,212 2,571 .04 Ontario (Province of): 7.75% 2002 3,500 3,810 .06 7.375% 2003 1,250 1,354 .02 7.625% 2004 5,000 5,497 .09 7.00% 2005 10,750 11,354 .18 17.00% 2011 11,250 12,979 .21 15.25% 2012 6,985 8,411 .13 11.50% 2013 5,000 5,793 .09 Panama Interest Reduction Bond 3.50% 2014 4,000 1,815 .03 Poland (Republic of): 7.75% 2000/1/ 3,000 3,069 .05 Discount Bond 7.125% 2024/3/ 750 568 .01 Past Due Interest Bond 3.75% 2014/3/ 2,000 1,300 .02 Quebec (Province of): 8.625% 2005 4,750 5,493 .09 13.25% 2014 5,500 7,006 .11 Queensland Global Treasury Note: 8.00% 2001 A$17,000 12,610 .20 12.00% 2001 5,000 4,384 .07 South Africa (Republic of) 13.00% 2010 ZAR24,500 6,192 .10 United Mexican States Government Eurobonds: Series A, 6.25% 2019 1,000 656 .01 Series B, 6.25% 2019 6,500 4,266 .07 --------- -------- 361,765 5.75 --------- -------- DEVELOPMENT AUTHORITIES European Investment Bank 10.125% 2000 2,000 2,357 .04 Inter-American Development Bank 8.875% 2009 10,000 12,757 .20 International Bank for Reconstruction & Development 14.90% 1997 2,500 2,816 .05 --------- -------- 17,930 .29 --------- -------- FEDERAL AGENCY OBLIGATIONS - MORTGAGE PASS-THROUGHS1/2 Federal Home Loan Mortgage Corp.: 8.00% 2003-2010 7,196 7,488 .12 8.25% 2007 3,386 3,529 .06 8.50% 2002-2020 43,350 45,234 .72 8.75% 2008 4,324 4,535 .07 9.00% 2021 1,338 1,408 .02 10.00% 2011-2019 2,020 744 .01 10.50% 2020 3,578 3,951 .06 10.75% 2010 148 164 .00 11.50% 2000 49 51 .00 12.00% 2010-2015 2,015 2,270 .04 12.50% 2009-2019 2,288 2,650 .04 12.75% 2015-2019 791 909 .02 13.00% 2014 78 91 .00 13.50% 2018 16 19 .00 13.75% 2014 28 32 .00 Federal National Mortgage Assn.: 7.50% 2009-2024 19,381 19,891 .32 8.00% 2023 3,666 3,797 .06 8.50% 2009-2023 16,433 17,215 .27 9.00% 2018-2025 9,194 9,695 .15 9.50% 2009-2019 1,372 1,472 .02 10.00% 2019 870 957 .02 10.50% 2012 4,566 5,086 .08 11.00% 2015-2020 4,395 4,924 .08 11.25% 2014 85 95 .00 11.50% 2010-2014 390 443 .01 12.00% 2015-2019 182 209 .00 12.50% 2015 390 456 .01 13.00% 2014 66 78 .00 13.25% 2015 28 33 .00 15.00% 2013 88 106 .00 Government National Mortgage Assn.: 5.00% 2024/3/ 2,000 1,973 .03 5.50% 2023-2024/3/ 151,765 153,444 2.44 6.00% 2022-2024/3/ 66,656 67,687 1.08 6.125% 2022/3/ 9,870 10,097 .16 6.50% 2008-2024/3/ 21,107 21,138 .34 7.00% 2008-2024/3/ 112,681 114,475 1.82 7.50% 2008-2024 85,223 87,774 1.40 8.00% 2023-2025 14,289 14,900 .24 8.50% 2020-2026 80,188 84,219 1.37 9.00% 2016-2025 24,683 26,145 .42 9.50% 2009-2020 19,485 20,964 .33 10.00% 2017-2019 3,069 3,380 .05 10.50% 2015-2019 976 1,092 .02 11.00% 2013-2016 1,715 1,941 .03 11.50% 2015 81 93 .00 12.00% 2014 167 192 .00 12.50% 2010-2015 1,165 1,373 .02 13.25% 2014 110 126 .00 --------- -------- 748,545 11.91 --------- -------- FEDERAL AGENCY OBLIGATION - OTHER Federal Home Loan Bank Bonds: 6.16% 2004 24,000 23,696 .38 6.27% 2004 5,000 4,938 .08 6.38% 2003 3,000 2,982 .05 6.41% 2003 18,580 18,455 .29 7.00% 2005 35,000 34,973 .56 8.23% 2004 5,000 5,070 .08 Federal Home Loan Mortgage Notes: 5.74% 2003 6,500 6,333 .10 5.78% 2003 12,175 11,762 .19 6.185% 2003 19,845 19,607 .31 6.19% 2004 11,000 10,849 .17 6.24% 2003 2,900 2,872 .05 6.27% 2004 2,500 2,471 .04 6.28% 2003 3,000 2,974 .05 6.30% 2003 2,000 1,988 .03 6.375% 2003 5,820 5,793 .09 6.39% 2003 10,330 10,269 .16 6.50% 2003 6,200 6,128 .10 7.00% 2002 25,000 25,098 .40 7.12% 2003 15,000 15,000 .24 7.29% 2004 6,000 6,103 .10 Federal National Mortgage Association Notes: 7.70% 2004 12,500 13,217 .21 medium-term note: 6.14% 2004 13,000 12,812 .20 7.43% 2005 30,000 30,225 .48 Callable Principal STRIPS 0%/8.25% 2022/2/ 4,500 3,764 .06 --------- -------- 277,379 4.42 --------- -------- COLLATERALIZED MORTGAGE OBLIGATIONS - FEDERAL AGENCIES/6/ Federal Home Loan Mortgage Corp.: Series 1604, Class SA, 4.7763% 2008/7/ 2,000 1,411 .02 Series 1712, Class D, 6.00% 2009 7,500 7,024 .11 Series 1716, Class A, 6.50% 2009 4,750 4,596 .07 Series 1574, Class AB, 6.50% 2023 4,842 4,055 .07 Series 1657, Class SA, 5.9935% 2023/7/ 7,520 4,500 .07 Series 1673, Class SA, 4.4499% 2024/7/ 7,879 4,400 .07 Federal National Mortgage Assn.: Series 90-142, Class J, 9.25% 2003 2,390 2,407 .04 Series 91-146, Class Z, 8.00% 2006 6,273 6,450 .10 Series 91-65, Class X, 6.50% 2019 19,711 19,169 .31 Series 90-93, Class G, 5.50% 2020 1,500 1,436 .02 Series 93-138, Class SA, 7.8532% 2023/7/ 3,758 2,691 .04 --------- -------- 58,139 .92 --------- -------- U.S. TREASURY OBLIGATIONS 9.25% January 1996 15,000 15,021 .24 7.875% February 1996 14,250 14,292 .23 9.375% April 1996 10,000 10,114 .16 8.00% January 1997 53,000 54,449 .87 5.625% January 1998 3,500 3,529 .06 8.125% February 1998 130,750 138,268 2.20 5.375% May 1998 10,000 10,033 .16 9.25% August 1998 180,750 198,259 3.15 8.875% February 1999 43,500 47,959 .76 9.125% May 1999 20,750 23,156 .37 6.875% July 1999 58,000 60,900 .97 8.875% May 2000 10,000 11,350 .18 8.750% August 2000 25,000 28,394 .45 8.50% November 2000 63,000 71,269 1.13 7.75% February 2001 26,500 29,262 .47 13.125% May 2001 21,500 29,230 .46 14.25% February 2002 7,000 10,170 .16 6.375% August 2002 8,700 9,123 .15 11.625% November 2002 87,000 117,069 1.86 5.75% August 2003 10,000 10,120 .16 11.625% November 2004 78,500 111,102 1.77 6.50% August 2005 5,000 5,327 .08 10.375% November 2009 17,000 22,429 .36 12.75% November 2010 10,500 15,993 .25 10.375% November 2012 17,000 23,502 .37 12.00% August 2013 10,000 15,408 .24 11.25% February 2015 6,000 9,605 .15 10.625% August 2015 25,000 38,293 .61 8.875% August 2017 129,500 173,448 2.76 8.125% May 2021 8,000 10,116 .16 --------- -------- 1,317,190 20.94 --------- -------- FLOATING RATE EURODOLLAR NOTES (UNDATED)/3/ Allied Irish Banks Ltd. 6.4375% 10,000 8,675 .14 Bank of Nova Scotia 6.00% 15,000 11,700 .19 Bergen Bank 6.00% 5,000 3,925 .06 Canadian Imperial Bank of Commerce 6.125% 25,000 19,625 .31 Christiana Bank Og Kreditkasse 6.0625% 11,000 8,745 .14 Financiere Credit Suisse 5.8125% 8,000 6,240 .10 Hongkong and Shanghai Banking Corp. 6.25% 10,000 8,013 .13 Lloyds Bank: (#2) 6.062% 5,000 4,150 .07 (#3) 5.985% 5,000 4,125 .06 Midland Bank 5.8125% 5,000 4,010 .06 National Bank of Canada 3.03125% 5,000 3,250 .05 Standard Chartered Bank: 5.8125% 15,000 11,419 .18 5.775% 5,000 3,819 .06 --------- -------- 97,696 1.55 --------- -------- EQUITY-TYPE SECURITIES & MISCELLANEOUS EQUITY-TYPE SECURITIES Dial Page, Inc., warrants/8/ 39 - .00 Geotek Comminications, Inc., warrants expire 263 656 .01 7/15/2005/8/ Glendale Federal Bank, FSB warrants expire 8 14 .00 3/10/00/8/ IntelCom Group Inc., warrants expire 8/8/05/8/ 48 215 .00 --------- -------- 885 .01 --------- -------- MISCELLANEOUS Investment securities in the initial period of 16,907 .28 acquisition --------- -------- TOTAL BONDS, NOTES AND EQUITY-TYPE SECURITIES --------- -------- (cost: $5,585,511,000) 5,743,901 91.32 --------- -------- SHORT-TERM SECURITIES COMMERCIAL PAPER Albertson's Inc. 5.75% due 1/5/96 19,000 18,985 .30 American Express Credit Corp.: 5.78% due 1/18/96 15,900 15,855 .25 5.72% due 1/31/96 10,000 9,951 .16 Anhueuser-Busch Cos. 5.72% due 1/4/96 15,000 14,991 .24 Associates Corp. of North America 5.99% due 8,600 8,597 .14 1/2/96 Bayerische Landesbank Girozentrale 5.76% due 10,000 9,995 .16 1/3/96 Beneficial Corp.: 5.70% due 1/30/96 10,000 9,953 .16 5.71% due 2/9/96 28,500 28,321 .45 Chevron Oil Finance Co. 5.70% due 2/8/96 27,700 27,530 .44 CIT Group Holdings Inc.: 5.75% due 1/10/96 15,000 14,976 .24 5.73% due 2/2/96 10,000 9,948 .16 Ford Credit Europe PLC 5.76% due 1/11/96 25,000 24,956 .40 Gannett Co. 5.76% due 1/19/96 20,000 19,940 .32 General Electric Capital Corp. 5.73% due 2/2/96 25,000 24,870 .39 Haifax Building Society: 5.76% due 1/2/96 5,000 4,998 .08 5.77% due 1/10/96 15,000 14,976 .24 Hershey Foods Corp. 5.70% due 1/30/96 10,000 9,953 .16 H.J. Heinz Co. 5.79% due 1/5/96 5.79% due 1/5/96 22,000 21,983 .35 5.74% due 1/25/96 13,000 12,949 .20 5.76% due 1/29/96 10,000 9,954 .16 Motorola Inc. 5.70% due 1/11/96 5.70% due 1/11/96 18,000 17,969 .28 5.72% due 1/26/96 14,100 14,042 .22 PepsiCo, Inc. 5.72% due 1/19/96 5,500 5,484 .09 Sandoz Corp.: 5.73 due 2/5/96 3,500 3,480 .05 5.73 due 2/20/96 12,000 11,906 .19 Sony Capital Corp.: 5.80% due 1/12/96 5,591 5,580 .09 5.75% due 2/8/96 13,000 12,921 .20 --------- -------- 385,063 6.12 --------- -------- Certificates of Deposit ABN-AMRO Bank, NV (Netherlands) 5.72% due 2/1/96 30,000 30,001 .47 Bank of Montreal 5.76% due 1/17/96 20,000 20,000 .32 Bayer Landesbank 5.73% due 2/1/96 20,000 20,001 .32 National Westminster 5.82% due 1/12/96 25,000 25,000 .40 --------- -------- 95,002 1.51 --------- -------- TOTAL SHORT-TERM SECURITIES (Cost $480,063,000) 480,065 7.63 --------- -------- TOTAL INVESTMENT SECURITIES (cost $6,065,574,000) 6,223,966 98.95 Excess of cash and receivables over payables 66,210 1.05 --------- -------- NET ASSETS 6,290,176 100.00% ========= ========
/1/ Purchased in a private placement transaction; resale may be made to qualified institutional buyers. /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/ Valued under procedures established by the Board of Directors /5/ CenCall Communications merged with NEXTEL on July 28, 1995, and Dial Call is expected to merge with NEXTEL 1/19/96. After their repective closings, the securities of Cencall and Dial Call will become obligations of NEXTEL. /6/ 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 /7/ Represents an inverse floater, which is a floating rate note whose interest rate moves in the opposite direction of prevailing interest rates. /8/ Non-income-producing security. See Notes to Financial Statements The Bond Fund of America FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995 (dollars in thousands) Assets: Investment securities at market (cost: $6,065,574) $6,223,966 Cash 2,703 Prepaid expense Receivables for-- Sales of investments $3,090 Sales of Fund's shares 15,065 Dividends and accrued interest 97,066 115,221 ------------ --------------- 6,341,890 Liabilities: Payables for-- Purchases of investments 35,924 Repurchases of fund's shares 10,815 Forward currency contracts 1,864 Dividends on Fund's shares 2 Management services 1,884 Accrued expenses 1,225 51,714 ------------ --------------- Net Assets at December 31, 1995-- Equivalent to $13.88 per share on 453,215,186 shares of $1 par value capital stock outstanding (authorized capital stock - 500,000,000 shares) $6,290,176 =============== STATEMENT OF OPERATIONS for the year ended December 31, 1995 (dollars in thousands) Investment Income: Income: Interest 482,948 Dividends from investment in stocks 1,001 $483,949 ------------ Expenses: Management services fee 20,858 Distribution expenses 13,834 Transfer agent fee 4,205 Reports to shareholders 487 Registration statement and prospectus 411 Postage, stationery and supplies 1,270 Directors' fees 36 Auditing and legal fees 51 Custodian fee 268 Taxes other than federal income tax 68 Other expense 43 41,531 ------------ --------------- Net investment income $442,418 =============== Realized Loss and Unrealized Appreciation on Investments: Net realized loss (13,362) Net change in unrealized appreciation (depreciation) on: Investments 506,688 Open forward currency contracts (461) ------------ Net unrealized appreciation 506,227 --------------- Net realized loss and unrealized appreciation on investments 492,865 --------------- Net Increase in Net Assets Resulting $935,283 from Operations =============== STATEMENT OF CHANGES IN NET ASSETS (dollars in thousands) Year ended Year ended December 31, December 31, 1995 1994 Operations: Net investment income $442,418 $395,207 Net realized loss on investments (13,362) (36,092) Net unrealized appreciation (depreciation) on investments 506,227 (626,541) ------------ --------------- Net increase (decrease) in net assets resulting from operations 935,283 (267,426) ------------ --------------- Dividends and Distributions Paid to Shareholders: Dividends from net investment income (438,147) (396,205) ------------ --------------- Capital Share Transactions: Proceeds from shares sold: 119,215,625 and 99,296,409 shares, respectively 1,591,640 1,337,647 Proceeds from shares issued in reinvestment of net investment income dividends and distributions of net realized gain on investments: 23,407,092 and 20,827,138 shares, respectively 312,925 277,618 Cost of shares repurchased: 78,844,004 and 96,388,393 shares, respectively (1,052,675) (1,295,101) ------------ --------------- Net increase in net assets resulting from capital share transactions 851,890 320,164 ------------ --------------- Total Increase (Decrease) in Net Assets 1,349,026 (343,467) Net Assets: Beginning of year 4,941,150 5,284,617 ------------ --------------- End of year (including undistributed net investment income: $14,704 and $10,433 respectively) $6,290,176 $4,941,150 ============ ===============
See Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS 1. Bond Fund of America, Inc. (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 representative quoted bid and asked prices or, if such prices are not available, at 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, upon last-reported bid prices on that date. Securities traded in the over-the-counter market are valued at the last available sale price prior to the time of valuation, or, lacking any sales, at the last reported bid price. 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 and other assets and liabilities, 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, income, and expenses are calculated at the rates of exchange prevailing on the respective dates of such transactions. 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 Appreciation 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 $268,000 includes $107,000 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, 1995, net unrealized appreciation on investments, excluding forward currency contracts, for book and federal income tax purposes aggregated $158,387,000, of which $229,379,000 related to appreciated securities and $70,992,000 related to depreciated securities. During the year ended December 31, 1995, the fund realized, on a tax basis, a net capital loss of $13,362,000 on securities transactions. The fund has available at December 31, 1995 a net capital loss carryforward of $49,122,000 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 the 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 $6,067,241,000 at December 31, 1995. 3. The fee of $20,858,0000 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; and 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, 1995, distribution expenses under the Plan were $13,834,000. As of December 31, 1995, accrued and unpaid distribution expenses were $926,000. American Funds Service Company (AFS), the transfer agent for the fund, was paid a fee of $4,205,000. American Funds Distributors, Inc. (AFD), the principal underwriter of the fund's shares, received $4,814,000 (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. Directors of the fund who are unaffiliated with CRMC may elect to defer part or all of the fees earned for services as members of the Board. Amounts deferred are not funded and are general unsecured liabilities of the fund. As of December 31, 1995, aggregate amounts deferred and earnings thereon were $38,868. CRMC is owned by The Capital Group Companies, 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 such persons received any remuneration directly from the fund 4. As of December 31, 1995, accumulated net realized loss on investments was $42,020,000 and paid-in capital was $5,714,717,000. The fund made purchases and sales of investment securities, excluding short-term securities, of $2,995,429,000 and $2,209,896,000, respectively, during the year ended December 31, 1995. The fund purchases forward currency contracts in anticipation of, or to protect itself against, fluctuations in exchange rates. The contracts are recorded in the statement of assets and liabilities at their net unrealized value; the fund$s maximum potential liability in these contracts is equal to the full contract amounts. Risk 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. - -----
Contract Amount U.S. Valuations at 12/31/95 ------------ --------- ---------- --------- Unrealized Appreciation NON-U.S. CURRENCY SALES CONTRACTS Non-U.S. U.S. Amount (Depreciation) French Francs expiring FF70,000,000 $12,091,000 $14,294,000 ($2,203,000) 11/25/96 to 9/9/98 Great Britain Pounds Pound2,000,000 3,082,000 3,101,000 (19,000) expiring 3/19/96 Netherland Guilders expiring FL46,487,000 29,726,000 29,368,000 358,000 1/16/96 to 12/9/96 --------- ---------- --------- $44,899,000 $46,763,000 ($1,864,000) =========== ========== =========
- ------- PER-SHARE DATA AND RATIOS
Year Ended December 31 1995 1994 1993 1992 1991 Net asset value, beginning of year $12.69 $14.45 $13.99 $13.70 $12.39 ------- ------- ------ ------- ------- Income from investment operations: Net investment income 1.05 1.05 1.09 1.15 1.21 Net realized and unrealized gain(loss) 1.18 (1.76) 0.84 0.34 1.28 ON INVESTMENTS ------- ------- ------ ------- ------- Total income (loss) from investment 2.23 (0.71) 1.93 1.49 2.49 OPERATIONS ------- ------- ------ ------- ------- Less distributions: Dividends from net investment income (1.04) (1.05) (1.08) (1.16) (1.18) Distributions from net realized gains -- -- (0.39) (0.04) -- -- -- -- -- -- ------- ------- ------ ------- ------- Total distributions (1.04) (1.05) (1.47) (1.20) (1.18) ------- ------- ------ ------- ------- Net Asset Value, end of year $13.88 $12.69 $14.45 $13.99 $13.70 ======= ======= ====== ======= ======= Total Return/1/ 18.25% (5.02%) 14.14% 11.34% 21.04% Ratios/supplemental data: Net assets, end of year (in millions) $6,290 $4,941 $5,285 $3,917 $2,859 Ratio of expenses to average net assets .74% .69% .71% .73% .77% Ratio of net income to average net 7.87% 7.77% 7.53% 8.36% 9.28% assets Portfolio turnover rate 43.80% 56.98% 44.68% 49.70% 56.47%
/1/ This was calculated without deducting a sales charge. The maximum sales charge is 4.75% of the fund's offering price. 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 NOTES TO FINANCIAL STATEMENTS Statement of Operations PER-SHARE DATA AND RATIOS Statement of Changes in Net Assets INDEPENDENT AUDITORS' REPORT (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. Form of Shareholder Service Agreement between Registrant and American Funds Service Company, as amended 1/1/95. 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) 17. Financial data schedule (EDGAR) ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. None. ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
As of December 31, 1995 Title of Class Number of Record Holders Capital Stock 296,820 ($1.00 par value)
ITEM 27. INDEMNIFICATION. Registrant is a joint-insured under an Investment Advisor/Mutual fund Errors and Omissions Policy written by American International Surplus Lines Insurance Company, Chubb Custom Insurance Company, and ICI Mutual Insurance Company which insures its officers and directors against certain liabilities. 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 John A. Agar Regional Vice President None 1501 N. University Drive Little Rock, AR 72207 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 John A. Blanchard Regional Vice President None 6421 Aberdeen Road Mission Hills, KS 66208 Ian B. Bodell Senior Vice President None 3100 West End Ave., Suite 870 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 Denise M. Cassin Regional Vice President None 1425 Vallejo, #203 San Francisco, CA 94109 * 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 4116 Woodbine st. Chevy Chase, MD 20815 * Carl D. Cutting Vice President None Michael A. Dilella Vice President None P. O. Box 661 Ramsey, NJ 07446 G. Michael Dill Senior Vice President None 3622 E. 87th Street Tulsa, OK 74137 Kirk D. Dodge Regional 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 * Paul H. Fieberg Sr. Vice President None John R. Fodor Regional Vice President None 15 Latisquama Road Southborough, MA 01772 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 Frenchtown, NJ 08825 Ronald R. Hulsey Regional Vice President None 6744 Avalon Dallas, TX 75214 * Robert L. Johansen Vice President, Controller None Michael J. Johnston Chairman of the Board None 630 Fifth Ave., 36th Floor New York, NY 10111-0121 V. John Kriss, Sr. Vice President None P.O. Box 274 Surfside, CA 90743 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 * Susan G. Lindgren Vice President - Institutional None 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 Senior Vice President None * E. Lee McClennahan Senior Vice President None Laurie B. McCurdy Regional Vice President None 6008 E. Anderson Drive Scottsdale, AZ 85255 & 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 William E. Noe Regional Vice President None 304 River Oaks Road Brentwood, TN 37207 Peter A. Nyhus Regional Vice President None 3084 Wilds Ridge Court Prior Lake, MN 55372 Eric P. Olson Regional Vice President None 62 Park Drive Glenview, IL 60025 Fredric Phillips Regional Vice President None 32 Ridge Avenue Newton Centre, MA 02159 # Candance D. Pilgrim Assistant Vice President None Carl S. Platou Regional Vice President None 4021 96th Avenue, SE Mercer Island, WA 98040 * John O. Post, Jr. 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 S. Ross Vice President None 55 Madison Avenue Morristown, NJ 07962 * Julie D. Roth Vice President None * James F. Rothenberg Director None Douglas F. Rowe Regional Vice President None 30309 Oak Tree Drive Georgetown, TX 78628 Christopher Rowey Regional Vice President None 9417 Beverlywood Street Los Angeles, CA 90034 Dean B. Rydquist Vice President None 1080 Bay Pointe Crossing Alpharetta, GA 30202 Richard R. Samson Vice President None 4604 Glencoe Avenue, No. 4 Marina del Rey, CA 90292 Joe D. Scarpitti Regional Vice President None 25760 Kensington Drive Westlake, OH 44145 * R. Michael Shanahan Director None David W. Short Senior 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 * Mary E. Smith Assistant Vice President - None Institutional Investment Services Division Rodney G. Smith Regional Vice President None 2350 Lakeside Blvd., #850 Richardson, TX 75082 Nicholas D. Spadaccini Regional Vice President None 855 Markley Woods Way Cincinnati, OH 45230 Daniel S. Spradling Senior Vice President None #4 West Fourth Avenue, Suite 406 San Mateo, CA 94402 Thomas A. Stout Regional Vice President None 2603 Kresson Place Bowie, MD 20715 Craig R. Strauser Regional Vice President None 17040 Summer Place Lake Oswego, OR 97035 Francis N. Strazzeri Regional Vice President None 31641 Saddletree Drive Westlake Village, CA 91361 & James P. Toomey Assistant Vice President None % Christopher E. Trede 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 4001 Crockers Lake Blvd., #1012 Sarasota, FL 34238 # 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
[/R] ____________ * 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, 1996. 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, 1996, 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. Hall Vice President and Treasurer (Mary C. Hall) (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.B9OTHCONTRCT 2 SHAREHOLDER SERVICES AGREEMENT 1. The parties to this Agreement, which is effective as of January 1, 1995, are THE BOND FUND OF AMERICA, INC., a Maryland corporation (hereinafter called "the Fund"), and American Funds Service Company, a California corporation (hereinafter called "AFS"). AFS is a wholly owned subsidiary of Capital Research and Management Company (hereinafter called "CRMC"). This Agreement will continue in effect until amended or terminated in accordance with its terms. 2. The Fund hereby employs AFS, and AFS hereby accepts such employment by the Fund, as its transfer agent. In such capacity AFS will provide the services of stock transfer agent, dividend disbursing agent, redemption agent, and such additional related services as the Fund may from time to time require, all of which services are sometimes referred to herein as "shareholder services." 3. AFS has entered into substantially identical agreements with other investment companies for which CRMC serves as investment adviser. (For the purposes of this Agreement, such investment companies, including the Fund, are called "participating investment companies.") 4. AFS has entered into an agreement with DST Systems, Inc. (hereinafter called "DST"), to provide AFS with electronic data processing services sufficient for the performance of the shareholder services referred to in paragraph 2. 5. The Fund, together with the other participating companies, will maintain a Review and Advisory Committee, which Committee will review and may make recommendations to the boards of the participating investment companies regarding all fees and charges provided for in this Agreement, as well as review the level and quality of the shareholder services rendered to the participating investment companies and their shareholders. Each participating investment company may select one director or trustee who is not affiliated with CRMC, or any of its affiliated companies, or with Washington Management Corporation or any of its affiliated companies, to serve on the Review and Advisory Committee. 6. AFS will provide to the participating investment companies the shareholder services referred to herein in return for the following fees: ANNUAL ACCOUNT MAINTENANCE FEE (PAID MONTHLY): $.67 per month for each open account on AFS books or in Level 2 or 4 Networking ($8.04 per year) $.09 per month for each open account maintained in Street Name or Level 1 or 3 Networking ($1.08 per year) EXHIBIT 9 No annual fee will be charged for a participant account underlying a 401(k) or other defined contribution plan where the plan maintains a single account on AFS books and responds to all participant inquiries TRANSACTION FEES: $2.00 per non-automated transaction $0.50 per automated transaction For this purpose, "transactions" shall include all types of transactions included in an "activity index" as reported to the Review and Advisory Committee at least annually. AFS will bill the Fund monthly, on or shortly after the first of each calendar month, and the Fund will pay to AFS within five business days of such billing. Any revision of the schedule of charges set forth herein shall require the affirmative vote of a majority of the members of the board of directors/trustees of the Fund. 7. All fund-specific charges from third parties -- including DST charges, payments described in the next sentence, postage, NSCC transaction charges and similar out-of-pocket expenses -- will be passed through directly to the Fund or other participating investment companies, as applicable. AFS, subject to approval of its board of directors, is authorized in its discretion to negotiate payments to third parties for account maintenance and/or transaction processing services provided such payments do not exceed the anticipated savings to the Fund, either in fees payable to AFS hereunder or in other direct Fund expenses, that AFS reasonably anticipates would be realized by the Fund from using the services of such third party rather than maintaining the accounts directly on AFS' books and/or processing non-automated transactions. 8. It is understood that AFS may have income in excess of its expenses and may accumulate capital and surplus. AFS is not, however, permitted to distribute any net income or accumulated surplus to its parent, CRMC, in the form of a dividend without the affirmative vote of a majority of the members of the boards of directors/trustees of the Fund and all participating investment companies. 9. This Agreement may be amended at any time by mutual agreement of the parties, with agreement of the Fund to be evidenced by affirmative vote of a majority of the members of the board of directors/trustees of the Fund. 10. This Agreement may be terminated on 180 days' written notice by either party. In the event of a termination of this Agreement, AFS and the Fund will each extend full cooperation in effecting a conversion to whatever successor shareholder service provider(s) the Fund may select, it being understood that all records relating to the Fund and its shareholders are property of the Fund. 11. In the event of a termination of this Agreement by the Fund, the Fund will pay to AFS as a termination fee the Fund's proportionate share of any costs of conversion of the Fund's shareholder service from AFS to a successor. In the event of termination of this Agreement and all corresponding agreements with all the participating investment companies, all assets of AFS will be sold or otherwise converted to cash, with a view to the liquidation of AFS when it ceases to provide shareholder services for the participating investment companies. To the extent any such assets are sold by AFS to CRMC and/or any of its affiliates, such sales shall be at fair market value at the time of sale as agreed upon by AFS, the purchasing company or companies, and the Review and Advisory Committee. After all assets of AFS have been converted to cash and all liabilities of AFS have been paid or discharged, an amount equal to any capital or paid-in surplus of AFS that shall have been contributed by CRMC or its affiliates shall be set aside in cash for distribution to CRMC upon liquidation of AFS. Any other capital or surplus and any assets of AFS remaining after the foregoing provisions for liabilities and return of capital or paid-in surplus to CRMC shall be distributed to the participating investment companies in such proportions as may be determined by the Review and Advisory Committee. 12. In the event of disagreement between the Fund and AFS, or between the Fund and other participating investment companies as to any matter arising under this Agreement, which the parties to the disagreement are unable to resolve, the question shall be referred to the Review and Advisory Committee for resolution. If the Review and Advisory Committee is unable to resolve the question to the satisfaction of both parties, either party may elect to submit the question to arbitration; one arbitrator to be named by each party to the disagreement and a third arbitrator to be selected by the two arbitrators named by the original parties. The decision of a majority of the arbitrators shall be final and binding on all parties to the arbitration. The expenses of such arbitration shall be paid by the party electing to submit the question to arbitration. 13. The obligations of the Fund under this Agreement are not binding upon any of the directors, trustees, officers, employees, agents or shareholders of the Fund individually, but bind only the Fund itself. AFS agrees to look solely to the assets of the Fund for the satisfaction of any liability of the Fund in respect to this Agreement and will not seek recourse against such directors, trustees, officers, employees, agents or shareholders, or any of them or their personal assets for such satisfaction. AMERICAN FUNDS SERVICE COMPANY THE BOND FUND OF AMERICA, INC. By /s/ Don R. Conlan By /s/ Paul G. Haaga, Jr. Don R. Conlan, Chairman Paul G. Haaga, Jr., Chairman By /s/ Kenneth R. Gorvetzian By /s/ Julie F. Williams Kenneth R. Gorvetzian, Secretary Julie F. Williams, Secretary EX-99.B11OTHCONSNT 3 CONSENT OF INDEPENDENT AUDITORS The Bond Fund of America, Inc.: We consent to (a) the use in this Post-Effective Amendment No. 39 to Registration Statement No. 2-50700 on Form N-1A of our report dated January 26, 1996 appearing in the Financial Statements, which are included in Part B, the Statement of Additional Information of such Registration Statement; (b) the references 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. Deloitte & Touche llp February 26, 1996 EX-99.B16PERFQUOT 4 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, 1995 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/ = 1,126.57 T = + 12.66 5 Year Average Annual Total Return 1,000(1+T)/5/ = 1,645.42 T = +10.47% 10 Year Average Annual Total Return 1,000(1+T)/10/ = 2,432.65 T = +9.30% 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 1/01/95 1000.00 13.32 4.75 % 75.075 12.690 953 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 12/31/95 1000 84 84 1084 0 1042 0 1042 84 1126.57 81.165 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 1/01/91 1000.00 13.01 4.75 % 76.864 12.390 952 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 12/31/91 1000 96 96 1096 0 1053 0 1053 99 1152.77 84.144 12/31/92 1000 100 196 1196 4 1075 4 1079 204 1283.48 91.743 12/31/93 1000 106 302 1302 38 1111 42 1153 311 1464.94 101.380 12/31/94 1000 109 411 1411 0 975 37 1012 379 1391.47 109.651 12/31/95 1000 121 532 1532 0 1067 40 1107 538 1645.42 118.546 TOTAL $ 42
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 1000.00 14.71 4.75 % 67.981 14.010 952 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 12/31/86 1000 103 103 1103 30 966 30 996 100 1096.88 77.191 12/31/87 1000 108 211 1211 0 893 28 921 197 1118.40 85.114 12/31/88 1000 112 323 1323 0 900 28 928 310 1238.11 93.513 12/31/89 1000 127 450 1450 0 899 28 927 436 1363.55 103.065 12/31/90 1000 134 584 1584 0 842 26 868 540 1408.10 113.648 12/31/91 1000 140 724 1724 0 931 29 960 744 1704.39 124.408 12/31/92 1000 150 874 1874 5 951 35 986 911 1897.62 135.641 12/31/93 1000 153 1027 2027 56 982 92 1074 1091 2165.85 149.886 12/31/94 1000 163 1190 2190 0 863 81 944 1113 2057.24 162.115 12/31/95 1000 175 1365 2365 0 944 89 1033 1399 2432.65 175.263 TOTAL $ 91
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 12/31/95 1000 611 6823 7823 0 963 336 1299 7165 8464.54 609.837 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 1/01/95 1000.00 12.69 0.00 % 78.802 12.690 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 12/31/95 1000 86 86 1086 0 1094 0 1094 88 1182.53 85.197 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 1/01/91 1000.00 12.39 0.00 % 80.710 12.390 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 12/31/91 1000 97 97 1097 0 1106 0 1106 104 1210.44 88.353 12/31/92 1000 108 205 1205 4 1129 4 1133 214 1347.68 96.332 12/31/93 1000 106 311 1311 40 1166 44 1210 328 1538.19 106.449 12/31/94 1000 116 427 1427 0 1024 39 1063 398 1461.01 115.131 12/31/95 1000 123 550 1550 0 1120 42 1162 565 1727.63 124.469 TOTAL $ 44
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 1000.00 14.01 0.00 % 71.378 14.010 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 12/31/86 1000 108 108 1108 31 1014 31 1045 106 1151.68 81.047 12/31/87 1000 113 221 1221 0 938 29 967 207 1174.30 89.368 12/31/88 1000 119 340 1340 0 945 29 974 325 1299.98 98.186 12/31/89 1000 134 474 1474 0 944 29 973 458 1431.63 108.211 12/31/90 1000 140 614 1614 0 884 27 911 567 1478.40 119.322 12/31/91 1000 147 761 1761 0 978 30 1008 781 1789.47 130.618 12/31/92 1000 159 920 1920 6 999 36 1035 957 1992.39 142.415 12/31/93 1000 159 1079 2079 59 1031 97 1128 1146 2274.08 157.376 12/31/94 1000 171 1250 2250 0 906 85 991 1168 2159.99 170.212 12/31/95 1000 185 1435 2435 0 991 93 1084 1470 2554.16 184.017 TOTAL $ 96
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 12/31/95 1000 642 7165 8165 0 1011 353 1364 7522 8886.64 640.248 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 1/01/86 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 12/31/95 10000 1759 13635 23635 0 9436 885 10321 14005 24326.66 1752.641 TOTAL $ 916
AVERAGE FIXED INCOME ACCOUNT SALES NET ASSET INITIAL INITIAL OFFERING CHARGE SHARES VALUE NET ASSET DATE INVESTMENT PRICE INCLUDED PURCHASED PER SHARE VALUE 1/01/86 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 12/31/86 10000 692 692 10692 0 10000 0 10000 692 10692.28 1069.228 12/31/87 10000 660 1352 11352 0 10000 0 10000 1352 11352.87 1135.287 12/31/88 10000 742 2094 12094 0 10000 0 10000 2095 12095.88 1209.588 12/31/89 10000 908 3002 13002 0 10000 0 10000 3003 13003.35 1300.335 12/31/90 10000 936 3938 13938 0 10000 0 10000 3937 13937.76 1393.776 12/31/91 10000 850 4788 14788 0 10000 0 10000 4788 14788.67 1478.867 12/31/92 10000 611 5399 15399 0 10000 0 10000 5399 15399.81 1539.981 12/31/93 10000 490 5889 15889 0 10000 0 10000 5889 15889.09 1588.909 12/31/94 10000 506 6395 16395 0 10000 0 10000 6393 16393.92 1639.392 12/31/95 10000 514 6909 16909 0 10000 0 10000 6908 16908.07 1690.807 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 1/01/85 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 749 1561 11561 0 10000 0 10000 1558 11558.93 1155.893 12/31/87 10000 715 2276 12276 0 10000 0 10000 2273 12273.07 1227.307 12/31/88 10000 803 3079 13079 0 10000 0 10000 3076 13076.31 1307.631 12/31/89 10000 981 4060 14060 0 10000 0 10000 4057 14057.33 1405.733 12/31/90 10000 1010 5070 15070 0 10000 0 10000 5067 15067.48 1506.748 12/31/91 10000 920 5990 15990 0 10000 0 10000 5987 15987.34 1598.734 12/31/92 10000 661 6651 16651 0 10000 0 10000 6648 16648.03 1664.803 12/31/93 10000 530 7181 17181 0 10000 0 10000 7176 17176.97 1717.697 12/31/94 10000 546 7727 17727 0 10000 0 10000 7722 17722.71 1772.271 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 820 2665 12665 0 10000 0 10000 2664 12664.57 1266.457 12/31/87 10000 782 3447 13447 0 10000 0 10000 3447 13447.01 1344.701 12/31/88 10000 880 4327 14327 0 10000 0 10000 4327 14327.09 1432.709 12/31/89 10000 1074 5401 15401 0 10000 0 10000 5401 15401.95 1540.195 12/31/90 10000 1107 6508 16508 0 10000 0 10000 6508 16508.71 1650.871 12/31/91 10000 1008 7516 17516 0 10000 0 10000 7516 17516.56 1751.656 12/31/92 10000 724 8240 18240 0 10000 0 10000 8240 18240.44 1824.044 12/31/93 10000 579 8819 18819 0 10000 0 10000 8819 18819.97 1881.997 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 895 3827 13827 0 10000 0 10000 3827 13827.18 1382.718 12/31/87 10000 854 4681 14681 0 10000 0 10000 4681 14681.44 1468.144 12/31/88 10000 961 5642 15642 0 10000 0 10000 5642 15642.31 1564.231 12/31/89 10000 1173 6815 16815 0 10000 0 10000 6815 16815.84 1681.584 12/31/90 10000 1208 8023 18023 0 10000 0 10000 8024 18024.22 1802.422 12/31/91 10000 1100 9123 19123 0 10000 0 10000 9124 19124.60 1912.460 12/31/92 10000 792 9915 19915 0 10000 0 10000 9914 19914.92 1991.492 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 5328 15328.22 1532.822 12/31/87 10000 947 6276 16276 0 10000 0 10000 6275 16275.23 1627.523 12/31/88 10000 1065 7341 17341 0 10000 0 10000 7340 17340.41 1734.041 12/31/89 10000 1300 8641 18641 0 10000 0 10000 8641 18641.34 1864.134 12/31/90 10000 1340 9981 19981 0 10000 0 10000 9980 19980.88 1998.088 12/31/91 10000 1220 11201 21201 0 10000 0 10000 11200 21200.71 2120.071 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 1101 7010 17010 0 10000 0 10000 7012 17012.12 1701.212 12/31/87 10000 1052 8062 18062 0 10000 0 10000 8063 18063.16 1806.316 12/31/88 10000 1183 9245 19245 0 10000 0 10000 9245 19245.35 1924.535 12/31/89 10000 1444 10689 20689 0 10000 0 10000 10689 20689.19 2068.919 12/31/90 10000 1486 12175 22175 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 8528 18528.48 1852.848 12/31/87 10000 1145 9672 19672 0 10000 0 10000 9673 19673.20 1967.320 12/31/88 10000 1287 10959 20959 0 10000 0 10000 10960 20960.76 2096.076 12/31/89 10000 1574 12533 22533 0 10000 0 10000 12533 22533.29 2253.329 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 1288 9904 19904 0 10000 0 10000 9904 19904.84 1990.484 12/31/87 10000 1230 11134 21134 0 10000 0 10000 11134 21134.60 2113.460 12/31/88 10000 1384 12518 22518 0 10000 0 10000 12517 22517.82 2251.782 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 1372 11182 21182 0 10000 0 10000 11182 21182.53 2118.253 12/31/87 10000 1310 12492 22492 0 10000 0 10000 12491 22491.24 2249.124 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 1/01/91 2000.00 13.01 4.75 % 153.728 12.390 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 12/31/91 2000 188 188 2188 0 2106 0 2106 199 2305.49 168.284 12/31/92 4000 370 558 4558 13 4096 13 4109 579 4688.41 335.126 12/31/93 6000 525 1083 7083 196 6198 210 6408 1117 7525.20 520.775 12/31/94 8000 710 1793 9793 0 7116 184 7300 1657 8957.30 705.855 12/31/95 10000 926 2719 12719 0 9868 201 10069 2776 12845.09 925.439 TOTAL $ 209
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 2000.00 14.71 4.75 % 135.962 14.010 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 12/31/86 2000 205 205 2205 60 1932 59 1991 202 2193.78 154.383 12/31/87 4000 403 608 4608 0 3548 55 3603 575 4178.99 318.036 12/31/88 6000 612 1220 7220 0 5494 55 5549 1185 6734.43 508.643 12/31/89 8000 888 2108 10108 0 7393 55 7448 2066 9514.58 719.167 12/31/90 10000 1118 3226 13226 0 8708 52 8760 3032 11792.75 951.796 12/31/91 12000 1358 4584 16584 0 11735 57 11792 4787 16579.77 1210.202 12/31/92 14000 1629 6213 20213 58 13929 117 14046 6535 20581.23 1471.139 12/31/93 16000 1795 8008 24008 669 16354 788 17142 8522 25664.88 1776.116 12/31/94 18000 2075 10083 28083 0 16040 692 16732 9459 26191.93 2063.982 12/31/95 20000 2401 12484 32484 0 19632 757 20389 12841 33230.00 2394.092 TOTAL $ 787
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 12/31/95 10000 6112 68222 78222 0 9632 3363 12995 71650 84645.32 6098.366 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 12/31/95 10000 5893 65357 75357 0 9686 3241 12927 68650 81577.55 5877.345 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 12/31/95 10000 5231 57246 67246 0 9366 2877 12243 60169 72412.63 5217.048 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 12/31/95 10000 4426 47716 57716 0 8691 2352 11043 50241 61284.79 4415.331 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 12/31/95 10000 4211 44618 54618 0 9060 2159 11219 47064 58283.51 4199.100 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 12/31/95 10000 4126 42922 52922 0 9720 2079 11799 45324 57123.13 4115.499 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 12/31/95 10000 4001 40692 50692 0 10366 2015 12381 42989 55370.71 3989.244 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 12/31/95 10000 3863 38223 48223 0 11257 1946 13203 40270 53473.81 3852.580 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 12/31/95 10000 3628 34629 44629 0 12133 1826 13959 36218 50177.30 3615.079 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 12/31/95 10000 2727 24976 34976 0 10428 1374 11802 25947 37749.87 2719.731 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 12/31/95 10000 2491 21791 31791 0 10652 1255 11907 22570 34477.96 2484.003 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 12/31/95 10000 2225 18417 28417 0 10710 1120 11830 18961 30791.32 2218.395 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 12/31/95 10000 1759 13635 23635 0 9436 885 10321 14005 24326.66 1752.641 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 12/31/95 10000 1526 10950 20950 0 9303 516 9819 11303 21122.60 1521.801 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 12/31/95 10000 1496 9817 19817 0 10058 506 10564 10147 20711.32 1492.170 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 12/31/95 10000 1352 8007 18007 0 9986 457 10443 8272 18715.68 1348.392 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 12/31/95 10000 1227 6381 16381 0 9993 415 10408 6585 16993.71 1224.331 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 12/31/95 10000 1189 5277 15277 0 10669 402 11071 5382 16453.52 1185.412 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 12/31/95 10000 982 3578 13578 0 9652 332 9984 3614 13598.36 979.709 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 12/31/95 10000 882 2459 12459 0 9449 272 9721 2487 12208.82 879.598 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 12/31/95 10000 773 1491 11491 0 9150 0 9150 1548 10698.70 770.800 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 1/01/95 10000.00 13.32 4.75 % 750.751 12.690 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 12/31/95 10000 814 814 10814 0 10420 0 10420 845 11265.65 811.646 TOTAL $ 0
EX-27 5 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 1000 YEAR DEC-31-1995 JAN-1-1995 DEC-31-1995 6,065,574 6,223,966 115,221 2,703 0 6,341,890 35,924 0 15,790 51,714 0 5,714,717 453,215,186 389,436,473 14,704 0 (42,020) 0 158,392 6,290,176 1,001 482,948 0 41,531 442,418 (13,362) 506,227 492,865 0 438,147 0 0 119,215,625 78,844,004 23,407,092 63,778,713 10,433 (35,644) 0 0 20,858 0 41,531 5,620,886 12.69 1.05 1.18 1.04 0 0 13.88 .007 0 0
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