fi485b.htm

SEC File Nos. 002-10760

811-00032

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 97 (X)

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 40 (X)

__________________

FUNDAMENTAL INVESTORS, INC.

(Exact Name of Registrant as Specified in Charter)

One Market, Steuart Tower, Suite 1800, San Francisco, California 94105-1409

(Address of Principal Executive Offices) (ZIP Code)

Registrant's Telephone Number, Including Area Code: (415) 421-9360

__________________

Patrick F. Quan

Secretary

Fundamental Investors, Inc.

One Market

Steuart Tower, Suite 1800

San Francisco, California 94105-1409

(Name and Address of Agent for Service)

Copy to:

Michael Glazer

Paul, Hastings, Janofsky & Walker, LLP

515 South Flower Street

Los Angeles, California 90071-2228

(Counsel for the Registrant)

__________________

Approximate date of proposed public offering:

It is proposed that this filing will become effective on May 1, 2009, pursuant to paragraph (b) of Rule 485.

....

<PAGE>

[Logo - American Funds /(R)/] The right choice for the long term/(R)/

Fundamental Investors/SM/

RETIREMENT PLAN
PROSPECTUS

May 1, 2009

TABLE OF CONTENTS

1 Risk/Return summary
4 Fees and expenses of the fund
6 Investment objective, strategies and risks
10 Management and organization
14 Purchase, exchange and sale of shares
17 Sales charges
19 Sales charge reductions
21 Rollovers from retirement plans to IRAs
21 Plans of distribution
22 Other compensation to dealers
23 Distributions and taxes
24 Financial highlights

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

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[This page intentionally left blank for this filing]

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Risk/Return summary

The fund seeks to make your investment grow and provide you with income over
time by investing primarily in common stocks of large, established companies
that offer growth potential at reasonable prices. The fund may also invest
significantly in securities of issuers domiciled outside the United States.

The fund is designed for investors seeking both capital appreciation and income.
Your investment in the fund is subject to risks, including the possibility that
the fund's income and the value of its portfolio holdings may fluctuate in
response to events specific to the companies or markets in which the fund
invests, as well as economic, political or social events in the United States or
abroad.

Although all securities in the fund's portfolio may be adversely affected by
currency fluctuations or global economic, political or social instability,
securities issued by entities based outside the United States may be affected to
a greater extent.

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

Fundamental Investors / Prospectus
<PAGE>

HISTORICAL INVESTMENT RESULTS

The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 3 shows how the fund's
average annual total returns for various periods compare with different broad
measures of market performance. This information provides some indication of the
risks of investing in the fund. All fund results reflect the reinvestment of
dividends and capital gain distributions, if any. Unless otherwise noted, fund
results reflect any fee waivers and/or expense reimbursements in effect during
the period presented. Past results are not predictive of future results.

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999 24.58%
2000 4.27
2001 -9.55
2002 -17.34
2003 31.96
2004 13.91
2005 11.68
2006 19.24
2007 13.55
2008 -39.70

[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 16.28% (quarter ended December 31, 2003)
LOWEST -23.34% (quarter ended December 31, 2008)

Fundamental Investors / Prospectus

<PAGE>

Unlike the bar chart on the previous page, the Investment Results table below
reflects, as required by Securities and Exchange Commission rules, the fund's
investment results with the following maximum initial sales charge imposed:

. Class A share results reflect the maximum initial sales charge of 5.75%. This
charge is reduced for purchases of $25,000 or more and eliminated for
purchases of $1 million or more.

. Class R shares are sold without any initial sales charge.

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 8 reflects the fund's results calculated without a sales charge.

INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
- -------------------------------------------------------------------------

CLASS A -- FROM 8/1/78 -43.16% -0.42% 2.30% 11.63%

1 YEAR 5 YEARS LIFETIME/1/
- -----------------------------------------------------------------

CLASS R-1 -- FIRST SOLD 6/19/02 -40.16% -0.08% 1.78%
CLASS R-2 -- FIRST SOLD 5/21/02 -40.19 -0.07 0.99
CLASS R-3 -- FIRST SOLD 6/4/02 -39.89 0.38 1.86
CLASS R-4 -- FIRST SOLD 7/25/02 -39.70 0.71 5.54
CLASS R-5 -- FIRST SOLD 5/15/02 -39.53 1.00 1.94

1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

INDEXES
S&P 500/3/ -36.99% -2.19% -1.38% 10.74%
Lipper Growth & Income -37.54 -2.12 -0.24 10.04
Funds Index/4/
MSCI/(R)/ World Index/5/ -40.33 0.00 -0.19 9.78
Class A annualized 30-day yield at December 31, 2008: 2.04%/6/
(For current yield information, please call American FundsLine/(R)/ at
800/325-3590.)

1 Lifetime results for Class A shares are measured from August 1, 1978, when
Capital Research and Management Company became the fund's investment adviser.
Lifetime results for other share classes are measured from the date the share
class was first sold.
2 Lifetime results for the index(es) shown are measured from the date Capital
Research and Management Company became the fund's investment adviser. The funds
or securities that compose each index may vary over time.

3 Standard & Poor's 500 Composite Index is a market capitalization-weighted
index based on the average weighted performance of 500 widely held common
stocks. This index is unmanaged and its results include reinvested dividends
and/ or distributions, but do not reflect the effect of sales charges,
commissions, expenses or taxes.
4 Lipper Growth & Income Funds Index is an equally weighted index of funds that
combine a growth-of-earnings orientation and an income requirement for level
and/or rising dividends. The results of the underlying funds in the index
include the reinvestment of dividends and capital gain distributions, as well
as brokerage commissions paid by the funds for portfolio transactions, but do
not reflect the effect of sales charges or taxes.
5 MSCI World Index is a free float-adjusted market capitalization weighted index
that is designed to measure equity market performance of developed markets. The
index consists of 23 developed country indexes, including the United States.
This index is unmanaged and its results include reinvested dividends and/or
distributions, but do not reflect the effect of sales charges, commissions,
expenses or taxes.
6 Reflects a fee waiver (2.02% without the waiver) as described in the Annual
Fund Operating Expenses table under "Fees and expenses of the fund."

Fundamental Investors / Prospectus
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Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)

CLASS A ALL R SHARE CLASSES
- ------------------------------------------------------------------------------

Maximum initial sales charge on purchases 5.75%/*/ none
(as a percentage of offering price)
- ------------------------------------------------------------------------------
Maximum sales charge on reinvested dividends none none
- ------------------------------------------------------------------------------
Maximum contingent deferred sales charge none none
- ------------------------------------------------------------------------------
Redemption or exchange fees none none

* The initial sales charge is reduced for purchases of $25,000 or more and
eliminated for purchases of $1 million or more.

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)

CLASS CLASS CLASS CLASS CLASS CLASS
CLASS A R-1 R-2 R-3 R-4 R-5/3/ R-6/3,4/
- -------------------------------------------------------------------------------

Management fees/1/ 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
- -------------------------------------------------------------------------------
Distribution and/or 0.24 1.00 0.75 0.50 0.25 none none
service (12b-1)
fees/2/
- -------------------------------------------------------------------------------
Other expenses/1/ 0.14 0.18 0.49 0.23 0.17 0.12 0.07
- -------------------------------------------------------------------------------
Total annual fund 0.63 1.43 1.49 0.98 0.67 0.37 0.32
operating expenses/1/
- -------------------------------------------------------------------------------

1 The fund's investment adviser waived a portion of its management fees from
September 1, 2004, through December 31, 2008. In addition, the investment
adviser paid a portion of the fund's transfer agent fees for certain R share
classes. Management fees, other expenses and total annual fund operating
expenses in the table do not reflect any waiver or reimbursement. Information
regarding the effect of any waiver/reimbursement on total annual fund operating
expenses can be found in the Financial Highlights table in this prospectus and
in the fund's annual report.
2 Class A, R-1, R-2, R-3 and R-4 12b-1 fees may not exceed .25%, 1.00%, 1.00%,
.75% and .50%, respectively, of the class's average net assets annually.

3 Class R-5 and R-6 shares are generally available only to fee-based programs
and/or through retirement plan intermediaries.
4 Based on estimated amounts for the current fiscal year. Amounts for all other
share classes are based on amounts incurred in the fund's previous fiscal year.

Fundamental Investors / Prospectus

<PAGE>

OTHER EXPENSES

The "Other expenses" items in the table above include custodial, legal, transfer
agent and subtransfer agent/recordkeeping payments, as well as various other
expenses. Subtransfer agent/recordkeeping payments may be made to the fund's
investment adviser, affiliates of the adviser and unaffiliated third parties for
providing recordkeeping and other administrative services to retirement plans
invested in the fund in lieu of the transfer agent providing such services. The
amount paid for subtransfer agent/recordkeeping services will vary depending on
the share class selected and the entity receiving the payments. The table below
shows the maximum payments to entities providing services to retirement plans.

PAYMENTS TO AFFILIATED ENTITIES PAYMENTS TO UNAFFILIATED
ENTITIES
- -------------------------------------------------------------------------------

Class A .05% of assets or .05% of assets or
$12 per participant position/1/ $12 per participant position/1/
- -------------------------------------------------------------------------------
Class R-1 .10% of assets .10% of assets
- -------------------------------------------------------------------------------
Class R-2 .15% of assets plus $27 per .25% of assets
participant position/2/ or .35%
of assets/3/
- -------------------------------------------------------------------------------
Class R-3 .10% of assets plus $12 per .15% of assets
participant position/2/ or .19%
of assets/3/
Class R-4 .10% of assets .10% of assets
- -------------------------------------------------------------------------------
Class R-5 .05% of assets .05% of assets
- -------------------------------------------------------------------------------
Class R-6 none none
- -------------------------------------------------------------------------------

1 Payment amount depends on the date upon which services commenced.
2 Payment with respect to Recordkeeper Direct/(R)/ program.
3 Payment with respect to PlanPremier/(R)/ program.

EXAMPLES

The examples below are intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The examples do not reflect the impact of any fee waivers
or expense reimbursements.

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------

Class A* $636 $765 $906 $1,316
- --------------------------------------------------------------------
Class R-1 146 452 782 1,713
- --------------------------------------------------------------------
Class R-2 152 471 813 1,779
- --------------------------------------------------------------------
Class R-3 100 312 542 1,201
- --------------------------------------------------------------------
Class R-4 68 214 373 835
- --------------------------------------------------------------------
Class R-5 38 119 208 468
- --------------------------------------------------------------------
Class R-6 33 103 180 406
- --------------------------------------------------------------------

* Reflects the maximum initial sales charge.

Fundamental Investors / Prospectus
<PAGE>

Investment objective, strategies and risks

The fund's investment objective is to achieve long-term growth of capital and
income. The fund invests primarily in common stocks or securities convertible
into common stocks and may invest significantly in securities of issuers
domiciled outside the United States and Canada and not included in the Standard
& Poor's 500 Composite Index.

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

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent and may also be
affected by currency fluctuations and controls; different accounting, auditing,
financial reporting, and legal standards and practices in some countries;
expropriation; changes in tax policy; greater market volatility; differing
securities market structures; higher transaction costs; and various
administrative difficulties, such as delays in clearing and settling portfolio
transactions or in receiving payment of dividends. These risks may be heightened
in connection with investments in developing countries. Investments in
securities issued by entities domiciled in the United States may also be subject
to many of these risks.

The fund may also hold cash or money market instruments. The percentage of the
fund invested in such holdings varies and depends on various factors, including
market conditions and purchases and redemptions of fund shares. A larger
percentage of such holdings could moderate the fund's investment results in a
period of rising market prices.

A larger percentage of cash or money market instruments could reduce the
magnitude of the fund's loss in a period of falling market prices and provide
liquidity to make additional investments or to meet redemptions.

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively valued
companies that, in its opinion, represent above-average long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is through fundamental analysis, which may include meeting with
company executives and employees, suppliers, customers and competitors.
Securities may be sold when the investment adviser believes that they no longer
represent relatively attractive investment opportunities.

Fundamental Investors / Prospectus

<PAGE>

OTHER IMPORTANT INVESTMENT PRACTICES

In addition to the principal investment strategies described above, the fund has
other investment practices that are described in this prospectus and in the
statement of additional information.

The fund may invest to a limited extent in lower quality debt securities rated
Ba1 and BB+ or below or unrated but determined by the investment adviser to be
of equivalent quality. The prices of debt securities fluctuate depending on such
factors as changing interest rates, effective maturities and credit ratings. For
example, their prices generally decline when interest rates rise and vice versa.
Lower quality or longer maturity debt securities generally have higher rates of
interest and may be subject to greater price fluctuations than higher quality or
shorter maturity debt securities.

Fundamental Investors / Prospectus
<PAGE>

ADDITIONAL INVESTMENT RESULTS

Unlike the Investment Results table on page 3, the table below reflects the
fund's results calculated without a sales charge.

ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
- -------------------------------------------------------------------------

CLASS A -- FROM 8/1/78 -39.70% 0.76% 2.90% 11.85%

1 YEAR 5 YEARS LIFETIME/1/
- -----------------------------------------------------------------

1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

INDEXES
S&P 500/3/ -36.99% -2.19% -1.38% 10.74%
Lipper Growth & Income -37.54 -2.12 -0.24 10.04
Funds Index/4/
MSCI World Index/5/ -40.33 0.00 -0.19 9.78
Class A distribution rate at December 31, 2008: 2.30%/6/
(For current distribution rate information, please call American FundsLine
at 800/325-3590.)

3 Standard & Poor's 500 Composite Index is a market capitalization-weighted
index based on the average weighted performance of 500 widely held common
stocks. This index is unmanaged and its results include reinvested dividends
and/ or distributions, but do not reflect the effect of sales charges,
commissions, expenses or taxes.
4 Lipper Growth & Income Funds Index is an equally weighted index of funds that
combine a growth-of-earnings orientation and an income requirement for level
and/or rising dividends. The results of the underlying funds in the index
include the reinvestment of dividends and capital gain distributions, as well
as brokerage commissions paid by the funds for portfolio transactions, but do
not reflect the effect of sales charges or taxes.
5 MSCI World Index is a free float-adjusted market capitalization weighted index
that is designed to measure equity market performance of developed markets. The
index consists of 23 developed country indexes, including the United States.
This index is unmanaged and its results include reinvested dividends and/or
distributions, but do not reflect the effect of sales charges, commissions,
expenses or taxes.
6 The distribution rate is based on actual dividends paid to Class A
shareholders over a 12-month period. Capital gain distributions, if any, are
added back to net asset value to determine the rate.

Fundamental Investors / Prospectus

<PAGE>

[begin pie chart]

INDUSTRY SECTOR DIVERSIFICATION AS OF DECEMBER 31, 2008 (PERCENT OF NET ASSETS)

Health care 11.87%
Industrials 12.24%
Information technology 17.61%
Energy 10.54%
Financials 7.58%
Other industries 28.19%
Bonds & notes 0.15%
Short-term securities & other assets less liabilities 11.82%

[end pie chart]

PERCENT INVESTED BY COUNTRY AS OF DECEMBER 31, 2008 PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------

United States 65.0%
- -------------------------------------------------------------------------------
Euro zone* 9.1
- -------------------------------------------------------------------------------
Canada 3.9
- -------------------------------------------------------------------------------
Japan 1.7
- -------------------------------------------------------------------------------
Switzerland 3.4
- -------------------------------------------------------------------------------
United Kingdom 2.5
- -------------------------------------------------------------------------------
Other countries 2.4
- -------------------------------------------------------------------------------
Bonds, short-term securities & other assets less 12.0
liabilities
- -------------------------------------------------------------------------------

* Countries using the euro as a common currency; those represented in the fund's
portfolio are Finland, France, Germany, Ireland, Italy and the Netherlands.

Because the fund is actively managed, its holdings will change over time.

For updated information on the fund's portfolio holdings, please visit us at
americanfunds.com.

Fundamental Investors / Prospectus
<PAGE>

Management and organization

INVESTMENT ADVISER

Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including the American Funds. Capital Research and Management Company is
a wholly owned subsidiary of The Capital Group Companies, Inc. and is located at
333 South Hope Street, Los Angeles, California 90071, and 6455 Irvine Center
Drive, Irvine, California 92618. Capital Research and Management Company manages
the investment portfolio and business affairs of the fund. The total management
fee paid by the fund, as a percentage of average net assets, for the previous
fiscal year appears in the Annual Fund Operating Expenses table under "Fees and
expenses of the fund." A discussion regarding the basis for the approval of the
fund's investment advisory and service agreement by the fund's board of
directors is contained in the fund's annual report to shareholders for the
fiscal year ended December 31, 2008.

Capital Research and Management Company manages equity assets through two
investment divisions, Capital World Investors and Capital Research Global
Investors, and manages fixed-income assets through its Fixed Income division.
Capital World Investors and Capital Research Global Investors make investment
decisions on an independent basis.

Rather than remain as investment divisions, Capital World Investors and Capital
Research Global Investors may be incorporated into wholly owned subsidiaries of
Capital Research and Management Company. In that event, Capital Research and
Management Company would continue to be the investment adviser, and day-to-day
investment management of equity assets would continue to be carried out through
one or both of these subsidiaries. Capital Research and Management Company and
the funds it advises have applied to the Securities and Exchange Commission for
an exemptive order that would give Capital Research and Management Company the
authority to use, upon approval of the funds' boards, its management
subsidiaries and affiliates to provide day-to-day investment management services
to the funds, including making changes to the management subsidiaries and
affiliates providing such services. Approval by the funds' shareholders would be
required before any authority granted under an exemptive order could be
exercised. There is no assurance that Capital Research and Management Company
will incorporate its investment divisions or seek a shareholder vote to exercise
any authority, if granted, under an exemptive order.

Fundamental Investors / Prospectus

<PAGE>

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. In selecting broker-dealers, the investment adviser
strives to obtain "best execution" (the most favorable total price reasonably
attainable under the circumstances) for the fund's portfolio transactions,
taking into account a variety of factors. Subject to best execution, the
investment adviser may consider investment research and/or brokerage services
provided to the adviser in placing orders for the fund's portfolio transactions.
The investment adviser may place orders for the fund's portfolio transactions
with broker-dealers who have sold shares of funds managed by the investment
adviser or its affiliated companies; however, it does not give consideration to
whether a broker-dealer has sold shares of the funds managed by the investment
adviser or its affiliated companies when placing any such orders for the fund's
portfolio transactions. A more detailed description of the investment adviser's
policies is included in the fund's statement of additional information.

PORTFOLIO HOLDINGS

Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the fund's
detailed information page on the website. A list of the fund's top 10 equity
holdings, updated as of each month-end, is generally posted to this page within
14 days after the end of the applicable month. A link to the fund's complete
list of publicly disclosed portfolio holdings, updated as of each calendar
quarter-end, is generally posted to this page within 45 days after the end of
the applicable quarter. Both lists remain available on the website until new
information for the next month or quarter is posted. Portfolio holdings
information for the fund is also contained in reports filed with the Securities
and Exchange Commission.

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors who decide how
their respective segments will be invested. In addition, Capital Research and
Management Company's investment analysts may make investment decisions with
respect to a portion of a fund's portfolio. Investment decisions are subject to
a fund's objective(s), policies and restrictions and the oversight of the
appropriate investment-related committees of Capital Research and Management
Company and its investment divisions.

Fundamental Investors / Prospectus
<PAGE>

The primary individual portfolio counselors for Fundamental Investors are:

PRIMARY TITLE WITH PORTFOLIO
PORTFOLIO INVESTMENT ADVISER COUNSELOR
PORTFOLIO COUNSELOR/ COUNSELOR (OR AFFILIATE) ROLE IN
FUND TITLE EXPERIENCE AND INVESTMENT MANAGEMENT
(IF APPLICABLE) IN THIS FUND EXPERIENCE OF THE FUND
- --------------------------------------------------------------------------------------------------

DINA N. PERRY 16 years Senior Vice President - Serves as an equity
President and Director (plus 1 year of Capital World Investors portfolio counselor
prior experience
as an Investment professional for
investment analyst 31 years in total;
for the fund) 17 years with Capital
Research and Management
Company or affiliate
- --------------------------------------------------------------------------------------------------
MICHAEL T. KERR 10 years Senior Vice President - Serves as an equity
Senior Vice President (plus 5 years of Capital World Investors portfolio counselor
prior experience
as an Investment professional for
investment analyst 26 years in total;
for the fund) 24 years with Capital
Research and Management
Company or affiliate
- --------------------------------------------------------------------------------------------------
RONALD B. MORROW 6 years Senior Vice President - Serves as an equity
Vice President (plus 5 years of Capital World Investors portfolio counselor
prior experience
as an Investment professional for
investment analyst 41 years in total;
for the fund) 12 years with Capital
Research and Management
Company or affiliate
- --------------------------------------------------------------------------------------------------
JAMES E. DRASDO 25 years Senior Vice President - Serves as an equity
(plus 6 years of Capital World Investors portfolio counselor
prior experience
as an Investment professional for
investment analyst 37 years in total;
for the fund) 32 years with Capital
Research and Management
Company or affiliate
- --------------------------------------------------------------------------------------------------
BRADY L. ENRIGHT 4 years Senior Vice President - Serves as an equity
Capital World Investors portfolio counselor

Investment professional for
18 years in total;
12 years with Capital
Research and Management
Company or affiliate
- --------------------------------------------------------------------------------------------------

Fundamental Investors / Prospectus

<PAGE>

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage can be found in the
statement of additional information.

CERTAIN PRIVILEGES AND/OR SERVICES DESCRIBED ON THE FOLLOWING PAGES OF THIS
PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION MAY NOT BE AVAILABLE
TO YOU, DEPENDING ON YOUR INVESTMENT DEALER OR RETIREMENT PLAN RECORDKEEPER.
PLEASE SEE YOUR FINANCIAL ADVISER, INVESTMENT DEALER OR RETIREMENT PLAN
RECORDKEEPER FOR MORE INFORMATION.

Fundamental Investors / Prospectus
<PAGE>

Purchase, exchange and sale of shares

AMERICAN FUNDS SERVICE COMPANY, THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND
AND AMERICAN FUNDS DISTRIBUTORS,/(R)/ THE FUND'S DISTRIBUTOR, IS REQUIRED BY
LAW TO OBTAIN CERTAIN PERSONAL INFORMATION FROM YOU OR ANY OTHER PERSON(S)
ACTING ON YOUR BEHALF IN ORDER TO VERIFY YOUR OR SUCH PERSON'S IDENTITY. IF YOU
DO NOT PROVIDE THE INFORMATION, THE TRANSFER AGENT MAY NOT BE ABLE TO OPEN YOUR
ACCOUNT. IF THE TRANSFER AGENT IS UNABLE TO VERIFY YOUR IDENTITY OR THAT OF ANY
OTHER PERSON(S) AUTHORIZED TO ACT ON YOUR BEHALF, OR BELIEVES IT HAS IDENTIFIED
POTENTIALLY CRIMINAL ACTIVITY, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE
THE RIGHT TO CLOSE YOUR ACCOUNT OR TAKE SUCH OTHER ACTION THEY DEEM REASONABLE
OR REQUIRED BY LAW.

PURCHASES AND EXCHANGES

Eligible retirement plans generally may open an account and purchase Class A or
R shares by contacting any investment dealer (who may impose transaction charges
in addition to those described in this prospectus) authorized to sell the fund's
shares. Some or all R share classes may not be available through certain
investment dealers. Additional shares may be purchased through a plan's
administrator or recordkeeper.

Class A shares are generally not available for retirement plans using the
PlanPremier or Recordkeeper Direct recordkeeping programs.

Class R shares generally are available only to 401(k) plans, 457 plans, 403(b)
plans, profit-sharing and money purchase pension plans, defined benefit plans
and nonqualified deferred compensation plans. Class R shares also are generally
available only to retirement plans where plan level or omnibus accounts are held
on the books of the fund. In addition, Class R-6 shares are available for
investment by American Funds Target Date Retirement Series/(R)/ and Class R-5
shares are available to other registered investment companies approved by the
fund. Class R shares generally are not available to retail nonretirement
accounts, traditional and Roth individual retirement accounts (IRAs), Coverdell
Education Savings Accounts, SEPs, SARSEPs, SIMPLE IRAs and 529 college savings
plans.

Shares of the fund offered through this prospectus generally may be exchanged
into shares of the same class of other American Funds. Exchanges of Class A
shares from American Funds money market funds purchased without a sales charge
generally will be subject to the appropriate sales charge.

FREQUENT TRADING OF FUND SHARES

The fund and American Funds Distributors reserve the right to reject any
purchase order for any reason. The fund is not designed to serve as a vehicle
for frequent trading. Frequent trading of fund shares may lead to increased
costs to the fund and less efficient management of the fund's portfolio,
potentially resulting in dilution of the value of the shares held by long-term
shareholders. Accordingly, purchases, including those that are part of exchange
activity that the fund or American Funds Distributors has determined could
involve actual or potential harm to the fund, may be rejected.

Fundamental Investors / Prospectus

<PAGE>

The fund, through its transfer agent, American Funds Service Company, maintains
surveillance procedures that are designed to detect frequent trading in fund
shares. Under these procedures, various analytics are used to evaluate factors
that may be indicative of frequent trading. For example, transactions in fund
shares that exceed certain monetary thresholds may be scrutinized. American
Funds Service Company also may review transactions that occur close in time to
other transactions in the same account or in multiple accounts under common
ownership or influence. Trading activity that is identified through these
procedures or as a result of any other information available to the fund will be
evaluated to determine whether such activity might constitute frequent trading.
These procedures may be modified from time to time as appropriate to improve the
detection of frequent trading, to facilitate monitoring for frequent trading in
particular retirement plans or other accounts, and to comply with applicable
laws.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of directors has adopted a "purchase
blocking policy" under which any shareholder redeeming shares having a value of
$5,000 or more from the fund will be precluded from investing in the fund for 30
calendar days after the redemption transaction. This policy also applies to
redemptions and purchases that are part of exchange transactions. Under the
fund's purchase blocking policy, certain purchases will not be prevented and
certain redemptions will not trigger a purchase block, such as systematic
redemptions and purchases, where the entity maintaining the shareholder account
is able to identify the transaction as a systematic redemption or purchase;
purchases and redemptions of shares having a value of less than $5,000;
transactions in Class 529 shares; purchases and redemptions resulting from
reallocations by American Funds Target Date Retirement Series; retirement plan
contributions, loans and distributions (including hardship withdrawals)
identified as such on the retirement plan recordkeeper's system; and purchase
transactions involving transfers of assets, rollovers, Roth IRA conversions and
IRA recharacterizations, where the entity maintaining the shareholder account is
able to identify the transaction as one of these types of transactions.

The fund reserves the right to waive the purchase blocking policy with respect
to specific shareholder accounts in those instances where American Funds Service
Company determines that its surveillance procedures are adequate to detect
frequent trading in fund shares.

American Funds Service Company will work with certain intermediaries (such as
investment dealers holding shareholder accounts in street name, retirement plan
recordkeepers, insurance company separate accounts and bank trust companies) to
apply their own procedures, provided that American Funds Service Company
believes the intermediary's procedures are reasonably designed to enforce the
frequent trading policies of the fund. You should refer to disclosures provided
by the intermediaries with which you have an account to determine the specific
trading restrictions that apply to you.

Fundamental Investors / Prospectus
<PAGE>

If American Funds Service Company identifies any activity that may constitute
frequent trading, it reserves the right to contact the intermediary and request
that the intermediary either provide information regarding an account owner's
transactions or restrict the account owner's trading. If American Funds Service
Company is not satisfied that the intermediary has taken appropriate action,
American Funds Service Company may terminate the intermediary's ability to
transact in fund shares.

There is no guarantee that all instances of frequent trading in fund shares will
be prevented.

NOTWITHSTANDING THE FUND'S SURVEILLANCE PROCEDURES AND PURCHASE BLOCKING POLICY,
ALL TRANSACTIONS IN FUND SHARES REMAIN SUBJECT TO THE FUND'S AND AMERICAN FUNDS
DISTRIBUTORS' RIGHT TO RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY (INCLUDING
THE TYPES OF TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED OR TRIGGER
A BLOCK UNDER THE PURCHASE BLOCKING POLICY). SEE THE STATEMENT OF ADDITIONAL
INFORMATION FOR MORE INFORMATION ABOUT HOW AMERICAN FUNDS SERVICE COMPANY MAY
ADDRESS OTHER POTENTIALLY ABUSIVE TRADING ACTIVITY IN THE AMERICAN FUNDS.

SALES

Please contact your plan administrator or recordkeeper in order to sell shares
from your retirement plan.

RIGHT OF REINVESTMENT

If you notify American Funds Service Company, you may reinvest proceeds from a
redemption, dividend payment or capital gain distribution without a sales charge
in the same fund or other American Funds, provided that the reinvestment occurs
within 90 days after the date of the redemption or distribution and is made into
the same account from which you redeemed the shares or received the
distribution. If the account has been closed, you may reinvest without a sales
charge if the new receiving account has the same registration as the closed
account. Proceeds will be reinvested in the same share class from which the
original redemption or distribution was made. Redemption proceeds of Class A
shares representing direct purchases in American Funds money market funds that
are reinvested in non-money market American Funds will be subject to a sales
charge. Proceeds will be reinvested at the next calculated net asset value after
your request is received and accepted by American Funds Service Company. For
purposes of this "right of reinvestment policy," automatic transactions
(including, for example, automatic purchases, withdrawals and payroll
deductions) and ongoing retirement plan contributions are not eligible for
investment without a sales charge. See the statement of additional information
for further information. You may not reinvest proceeds in the American Funds as
described in this paragraph if such proceeds are subject to a purchase block as
described under "Frequent trading of fund shares" in this prospectus. This
paragraph does not apply to certain rollover investments as described under
"Rollovers from retirement plans to IRAs" in this prospectus.

Fundamental Investors / Prospectus

<PAGE>

VALUING SHARES

The net asset value of each share class of the fund is the value of a single
share. The fund calculates the net asset value each day the New York Stock
Exchange is open for trading as of approximately 4 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, if events occur between the close of markets
outside the United States and the close of regular trading on the New York Stock
Exchange that, in the opinion of the investment adviser, materially affect the
value of any of the fund's securities that principally trade in those
international markets, those securities will be valued in accordance with fair
value procedures. Use of these procedures is intended to result in more
appropriate net asset values. In addition, such use will reduce, if not
eliminate, potential arbitrage opportunities otherwise available to short-term
investors.

Because the fund may hold securities that are primarily listed on foreign
exchanges that trade on weekends or days when the fund does not price its
shares, the value of securities held in the fund may change on days when you
will not be able to purchase or redeem fund shares.

Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request.

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

Please see the statement of additional information for details and limitations
on moving investments in certain share classes to different share classes and on
moving investments held in certain accounts to different accounts.

Sales charges

CLASS A SHARES

The initial sales charge you pay each time you buy Class A shares differs
depending upon the amount you invest and may be reduced or eliminated for larger
purchases as indicated below. The "offering price," the price you pay to buy
shares, includes any applicable sales charge, which will be deducted directly
from your investment. Shares acquired through reinvestment of dividends or
capital gain distributions are not subject to an initial sales charge.

Fundamental Investors / Prospectus
<PAGE>

SALES CHARGE AS A
PERCENTAGE OF:
DEALER
NET COMMISSION
OFFERING AMOUNT AS A PERCENTAGE
INVESTMENT PRICE INVESTED OF OFFERING PRICE
- ------------------------------------------------------------------------------

Less than $25,000 5.75% 6.10% 5.00%
- ------------------------------------------------------------------------------
$25,000 but less than $50,000 5.00 5.26 4.25
- ------------------------------------------------------------------------------
$50,000 but less than $100,000 4.50 4.71 3.75
- ------------------------------------------------------------------------------
$100,000 but less than $250,000 3.50 3.63 2.75
- ------------------------------------------------------------------------------
$250,000 but less than $500,000 2.50 2.56 2.00
- ------------------------------------------------------------------------------
$500,000 but less than $750,000 2.00 2.04 1.60
- ------------------------------------------------------------------------------
$750,000 but less than $1 million 1.50 1.52 1.20
- ------------------------------------------------------------------------------
$1 million or more and certain other none none see below
investments described below
- ------------------------------------------------------------------------------

The sales charge, expressed as a percentage of the offering price or the net
amount invested, may be higher or lower than the percentages described in the
table above due to rounding. This is because the dollar amount of the sales
charge is determined by subtracting the net asset value of the shares purchased
from the offering price, which is calculated to two decimal places using
standard rounding criteria. The impact of rounding will vary with the size of
the investment and the net asset value of the shares.

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:

.. investments made by accounts that are part of certain qualified fee-based
programs and that purchased Class A shares before the discontinuation of your
investment dealer's load-waived Class A share program with the American Funds;
and

.. certain rollover investments from retirement plans to IRAs (see "Rollovers
from retirement plans to IRAs" in this prospectus for more information).

The distributor may pay dealers up to 1% on investments made in Class A shares
with no initial sales charge. The fund may reimburse the distributor for these
payments through its plans of distribution (see "Plans of distribution" in this
prospectus).

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell American Funds, and employees of The Capital Group Companies.
Please see the statement of additional information for more information.

Fundamental Investors / Prospectus

<PAGE>

EMPLOYER-SPONSORED RETIREMENT PLANS

Employer-sponsored retirement plans that are eligible to purchase Class R
shares may instead purchase Class A shares and pay the applicable Class A sales
charge, provided their recordkeepers can properly apply a sales charge on plan
investments. These plans are not eligible to make initial purchases of $1
million or more in Class A shares and thereby invest in Class A shares without
a sales charge, nor are they eligible to establish a statement of intention
that qualifies them to purchase Class A shares without a sales charge. More
information about statements of intention can be found under "Sales charge
reductions" in this prospectus. Plans investing in Class A shares with a sales
charge may purchase additional Class A shares in accordance with the sales
charge table in this prospectus.

Employer-sponsored retirement plans that invested in Class A shares without any
sales charge on or before March 31, 2004, and that continue to meet the
eligibility requirements in effect as of that date for purchasing Class A
shares at net asset value, may continue to purchase Class A shares without any
initial or contingent deferred sales charge.

A 403(b) plan may not invest in Class A, B or C shares on or after January 1,
2009, unless such plan was invested in Class A, B or C shares prior to that
date.

CLASS R SHARES

Class R shares are sold without any initial or contingent deferred sales charge.
The distributor will pay dealers annually an asset-based compensation of up to
1.00% for sales of Class R-1 shares, up to .75% for Class R-2 shares, up to .50%
for Class R-3 shares and up to .25% for Class R-4 shares. No dealer compensation
is paid from fund assets on sales of Class R-5 or R-6 shares. The fund may
reimburse the distributor for these payments through its plans of distribution
(see "Plans of distribution" in this prospectus).

Sales charge reductions

TO RECEIVE A REDUCTION IN YOUR CLASS A INITIAL SALES CHARGE, YOU MUST LET YOUR
FINANCIAL ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW AT THE TIME YOU
PURCHASE SHARES THAT YOU QUALIFY FOR SUCH A REDUCTION. IF YOU DO NOT LET YOUR
ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW THAT YOU ARE ELIGIBLE FOR A
REDUCTION, YOU MAY NOT RECEIVE A SALES CHARGE DISCOUNT TO WHICH YOU ARE
OTHERWISE ENTITLED. In order to determine your eligibility to receive a sales
charge discount, it may be necessary for you to provide your adviser or American
Funds Service Company with information and records (including account
statements) of all relevant accounts invested in the American Funds.

IN ADDITION TO THE INFORMATION IN THIS PROSPECTUS, YOU MAY OBTAIN MORE
INFORMATION ABOUT SHARE CLASSES, SALES CHARGES AND SALES CHARGE REDUCTIONS
THROUGH A LINK ON THE HOME

Fundamental Investors / Prospectus
<PAGE>

PAGE OF THE AMERICAN FUNDS WEBSITE AT AMERICANFUNDS.COM, FROM THE STATEMENT OF
ADDITIONAL INFORMATION OR FROM YOUR FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE

Consistent with the policies described in this prospectus, two or more
retirement plans of an employer or employer's affiliates may combine all of
their American Funds investments to reduce their Class A sales charge. Certain
investments in the American Funds Target Date Retirement Series may also be
combined for this purpose. Please see the American Funds Target Date Retirement
Series prospectus for further information. However, for this purpose,
investments representing direct purchases of American Funds money market funds
are excluded. Following are different ways that you may qualify for a reduced
Class A sales charge:

CONCURRENT PURCHASES

Simultaneous purchases of any class of shares of two or more American Funds
(excluding American Funds money market funds) may be combined to qualify for a
reduced Class A sales charge.

RIGHTS OF ACCUMULATION

You may take into account your accumulated holdings in all share classes of the
American Funds (excluding American Funds money market funds) to determine the
initial sales charge you pay on each purchase of Class A shares. Subject to
your investment dealer's or recordkeeper's capabilities, your accumulated
holdings will be calculated as the higher of (a) the current value of your
existing holdings or (b) the amount you invested (including reinvested
dividends and capital gains, but excluding capital appreciation) less any
withdrawals. Please see the statement of additional information for further
details. You should retain any records necessary to substantiate the historical
amounts you have invested.

STATEMENT OF INTENTION

You may reduce your Class A sales charge by establishing a statement of
intention. A statement of intention allows you to combine all purchases of all
share classes of the American Funds (excluding American Funds money market
funds) you intend to make over a 13-month period to determine the applicable
sales charge; however, purchases made under a right of reinvestment,
appreciation of your holdings, and reinvested dividends and capital gains do
not count as purchases made during the statement period. The market value of
your existing holdings eligible to be aggregated as of the day immediately
before the start of the statement period may be credited toward satisfying the
statement. A portion of your account may be held in escrow to cover additional
Class A sales charges that may be due if your total purchases over the
statement period do not qualify you for the applicable sales charge reduction.
Employer-sponsored retirement

Fundamental Investors / Prospectus

<PAGE>

plans may be restricted from establishing statements of intention. See "Sales
charges" in this prospectus for more information.

RIGHT OF REINVESTMENT

Please see the "Sales" section of "Purchase, exchange and sale of shares" in
this prospectus for information on how to reinvest proceeds from a redemption,
dividend payment or capital gain distribution without a sales charge.

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover, subject to the other provisions of this prospectus and
the prospectus for nonretirement plan shareholders. More information on Class B,
C and F shares can be found in the fund's prospectus for nonretirement plan
shareholders. Rollovers invested in Class A shares from retirement plans will be
subject to applicable sales charges. The following rollovers to Class A shares
will be made without a sales charge:

.. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
custodian; and

.. rollovers to IRAs that are attributable to American Funds investments, if they
meet the following requirements:

-- the assets being rolled over were invested in American Funds at the time of
distribution; and

-- the rolled over assets are contributed to an American Funds IRA with Capital
Bank and Trust Company as custodian.

IRA rollover assets that roll over without a sales charge as described above
will not be subject to a contingent deferred sales charge and investment dealers
will be compensated solely with an annual service fee that begins to accrue
immediately. IRA rollover assets invested in Class A shares that are not
attributable to American Funds investments, as well as future contributions to
the IRA, will be subject to sales charges and the terms and conditions generally
applicable to Class A share investments as described in this prospectus and the
statement of additional information.

Plans of distribution

The fund has plans of distribution or "12b-1 plans" for certain share classes,
under which it may finance activities primarily intended to sell shares,
provided the categories of expenses are approved in advance by the fund's board
of directors. The plans provide for payments, based on annualized percentages of
average daily net assets, of up to .25% for Class A shares, up to 1.00% for
Class R-1 and R-2 shares, up to .75% for Class R-3 shares and up to .50% for
Class R-4 shares. For all share classes indicated above, up to

Fundamental Investors / Prospectus
<PAGE>

..25% of these expenses may be used to pay service fees to qualified dealers for
providing certain shareholder services. The amount remaining for each share
class may be used for distribution expenses.

The 12b-1 fees paid by the fund, as a percentage of average net assets for the
previous fiscal year, are indicated in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund" in this prospectus. Since these fees are
paid out of the fund's assets or income on an ongoing basis, over time they will
increase the cost and reduce the return of your investment.

Other compensation to dealers

American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 100 dealers (or their
affiliates) that have sold shares of the American Funds. The level of payments
made to a qualifying firm in any given year will vary and in no case would
exceed the sum of (a) .10% of the previous year's American Funds sales by that
dealer and (b) .02% of American Funds assets attributable to that dealer. For
calendar year 2008, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the average assets of the American Funds.
Aggregate payments may also change from year to year. A number of factors will
be considered in determining payments, including the qualifying dealer's sales,
assets and redemption rates, and the quality of the dealer's relationship with
American Funds Distributors. American Funds Distributors makes these payments to
help defray the costs incurred by qualifying dealers in connection with efforts
to educate financial advisers about the American Funds so that they can make
recommendations and provide services that are suitable and meet shareholder
needs. American Funds Distributors will, on an annual basis, determine the
advisability of continuing these payments. American Funds Distributors may also
pay expenses associated with meetings conducted by dealers outside the top 100
firms to facilitate educating financial advisers and shareholders about the
American Funds. If investment advisers, distributors or other affiliates of
mutual funds pay additional compensation or other incentives in differing
amounts, dealer firms and their advisers may have financial incentives for
recommending a particular mutual fund over other mutual funds. You should
consult with your financial adviser and review carefully any disclosure by your
financial adviser's firm as to compensation received.

Fundamental Investors / Prospectus

<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

The fund intends to distribute dividends to shareholders, usually in February,
May, August and December.

Capital gains, if any, are usually distributed in December and February. When a
dividend or capital gain is distributed, the net asset value per share is
reduced by the amount of the payment.

All dividends and capital gain distributions paid to retirement plan
shareholders will be automatically reinvested.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

Dividends and capital gains distributed by the fund to tax-deferred retirement
plan accounts are not taxable currently.

TAXES ON TRANSACTIONS

Exchanges within a tax-deferred retirement plan account will not result in a
capital gain or loss for federal or state income tax purposes. With limited
exceptions, distributions from a retirement plan account are taxable as ordinary
income.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.

Fundamental Investors / Prospectus
<PAGE>

Financial highlights

The Financial Highlights table is intended to help you understand the fund's
results for the past five fiscal years. Certain information reflects financial
results for a single share of a particular class. A similar table will be shown
for Class R-6 shares beginning with the fund's fiscal year ending after the date
the share class is first offered. The total returns in the table represent the
rate that an investor would have earned or lost on an investment in the fund
(assuming reinvestment of all dividends and capital gain distributions). Where
indicated, figures in the table reflect the impact, if any, of certain
reimbursements/waivers from Capital Research and Management Company. For more
information about these reimbursements/waivers, see the footnotes to the Annual
Fund Operating Expenses table under "Fees and expenses of the fund" in this
prospectus and the fund's annual report. The information in the Financial
Highlights table has been audited by Deloitte & Touche LLP, whose report, along
with the fund's financial statements, is included in the statement of additional
information, which is available upon request.

(LOSS) INCOME FROM INVESTMENT OPERATIONS/1/ DIVIDENDS AND DISTRIBUTIONS

Net (losses)
gains on
Net securities
asset (both Dividends Distributions Total
value, Net realized Total from (from net (from dividends
beginning investment and investment investment capital and
of year income/2/ unrealized) operations income) gains) distributions
- ----------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2008 $42.45 $ .60 $(17.23) $(16.63) $ (.58) $ (.26) $ (.84)
Year ended 12/31/2007 40.05 1.03 4.39 5.42 (.95) (2.07) (3.02)
Year ended 12/31/2006 35.40 .62 6.16 6.78 (.56) (1.57) (2.13)
Year ended 12/31/2005 32.25 .58 3.16 3.74 (.59) -- (.59)
Year ended 12/31/2004 28.85 .61 3.35 3.96 (.56) -- (.56)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2008 42.31 .32 (17.18) (16.86) (.29) (.26) (.55)
Year ended 12/31/2007 39.93 .72 4.33 5.05 (.60) (2.07) (2.67)
Year ended 12/31/2006 35.31 .29 6.13 6.42 (.23) (1.57) (1.80)
Year ended 12/31/2005 32.18 .29 3.16 3.45 (.32) -- (.32)
Year ended 12/31/2004 28.79 .37 3.33 3.70 (.31) -- (.31)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 12/31/2008 $42.30 $ .30 $(17.17) $(16.87) $ (.28) $ (.26) $ (.54)
Year ended 12/31/2007 39.92 .70 4.34 5.04 (.59) (2.07) (2.66)
Year ended 12/31/2006 35.29 .30 6.14 6.44 (.24) (1.57) (1.81)
Year ended 12/31/2005 32.17 .30 3.14 3.44 (.32) -- (.32)
Year ended 12/31/2004 28.77 .38 3.34 3.72 (.32) -- (.32)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 12/31/2008 42.38 .48 (17.20) (16.72) (.46) (.26) (.72)
Year ended 12/31/2007 39.98 .92 4.34 5.26 (.79) (2.07) (2.86)
Year ended 12/31/2006 35.35 .47 6.14 6.61 (.41) (1.57) (1.98)
Year ended 12/31/2005 32.21 .45 3.16 3.61 (.47) -- (.47)
Year ended 12/31/2004 28.82 .50 3.33 3.83 (.44) -- (.44)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 12/31/2008 42.39 .58 (17.19) (16.61) (.57) (.26) (.83)
Year ended 12/31/2007 39.99 1.05 4.34 5.39 (.92) (2.07) (2.99)
Year ended 12/31/2006 35.36 .59 6.14 6.73 (.53) (1.57) (2.10)
Year ended 12/31/2005 32.22 .55 3.16 3.71 (.57) -- (.57)
Year ended 12/31/2004 28.83 .60 3.33 3.93 (.54) -- (.54)
- ----------------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 12/31/2008 $42.46 $ .69 $(17.23) $(16.54) $ (.67) $ (.26) $ (.93)
Year ended 12/31/2007 40.06 1.18 4.34 5.52 (1.05) (2.07) (3.12)
Year ended 12/31/2006 35.41 .71 6.16 6.87 (.65) (1.57) (2.22)
Year ended 12/31/2005 32.26 .65 3.17 3.82 (.67) -- (.67)
Year ended 12/31/2004 28.86 .68 3.35 4.03 (.63) -- (.63)

Ratio of Ratio of
expenses expenses
to to
average average Ratio
Net net net of net
assets, assets assets income
Net asset end of before after to
value, year reim- reim- average
end of Total (in bursements/ bursements/ net
year return/3,4/ millions) waivers waivers/4/ assets/2,4/
- --------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2008 $24.98 (39.70)% $24,443 .63% .61% 1.70%
Year ended 12/31/2007 42.45 13.55 38,877 .60 .57 2.40
Year ended 12/31/2006 40.05 19.24 32,187 .61 .58 1.60
Year ended 12/31/2005 35.40 11.68 24,390 .62 .60 1.75
Year ended 12/31/2004 32.25 13.91 21,543 .63 .63 2.05
- --------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2008 24.90 (40.16) 61 1.43 1.41 .91
Year ended 12/31/2007 42.31 12.62 57 1.44 1.42 1.67
Year ended 12/31/2006 39.93 18.19 23 1.47 1.43 .74
Year ended 12/31/2005 35.31 10.74 11 1.50 1.46 .88
Year ended 12/31/2004 32.18 12.92 6 1.53 1.49 1.26
- --------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 12/31/2008 $24.89 (40.19)% $ 366 1.49% 1.47% .85%
Year ended 12/31/2007 42.30 12.61 471 1.46 1.40 1.62
Year ended 12/31/2006 39.92 18.26 291 1.54 1.41 .77
Year ended 12/31/2005 35.29 10.73 155 1.64 1.43 .91
Year ended 12/31/2004 32.17 13.02 93 1.76 1.45 1.29
- --------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 12/31/2008 24.94 (39.89) 1,058 .98 .95 1.37
Year ended 12/31/2007 42.38 13.17 1,157 .97 .94 2.12
Year ended 12/31/2006 39.98 18.75 525 .99 .96 1.21
Year ended 12/31/2005 35.35 11.26 220 1.01 .98 1.35
Year ended 12/31/2004 32.21 13.41 125 1.05 1.04 1.69
- --------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 12/31/2008 24.95 (39.70) 942 .67 .65 1.68
Year ended 12/31/2007 42.39 13.51 879 .66 .64 2.42
Year ended 12/31/2006 39.99 19.12 438 .67 .65 1.52
Year ended 12/31/2005 35.36 11.61 205 .69 .66 1.66
Year ended 12/31/2004 32.22 13.85 80 .69 .69 2.04
- --------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- --------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 12/31/2008 $24.99 (39.53)% $ 1,077 .37% .35% 1.98%
Year ended 12/31/2007 42.46 13.81 1,014 .37 .34 2.73
Year ended 12/31/2006 40.06 19.50 481 .38 .35 1.83
Year ended 12/31/2005 35.41 11.94 265 .39 .36 1.96
Year ended 12/31/2004 32.26 14.19 141 .39 .39 2.31

Fundamental Investors / Prospectus

<PAGE>

YEAR ENDED DECEMBER 31
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 29% 27% 21% 24% 30%
OF SHARES

1 Based on average shares outstanding.
2 For the year ended December 31, 2007, this column reflects the impact of a
corporate action event that resulted in a one-time increase to net investment
income. If the corporate action had not occurred, the Class A net investment
income per share and ratio of net income to average net assets would have been
lower by $0.39 and .90%, respectively. The impact to the other share classes
would have been approximately the same.
3 Total returns exclude any applicable sales charges.
4 This column reflects the impact, if any, of certain reimbursements/waivers
from Capital Research and Management Company. During the years shown, Capital
Research and Management Company reduced fees for investment advisory services.
In addition, during some of the years shown, Capital Research and Management
Company paid a portion of the fund's transfer agent fees for certain retirement
plan share classes.

Fundamental Investors / Prospectus

<PAGE>

NOTES

Fundamental Investors / Prospectus

<PAGE>

[Logo - American Funds /(R)/] The right choice for the long term/(R)/

FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180

FOR RETIREMENT PLAN SERVICES Call your employer or plan
administrator

FOR ADVISER MARKETING American Funds Distributors
800/421-9900

americanfunds.com
FOR 24-HOUR INFORMATION For Class R share information, visit
AmericanFundsRetirement.com

Telephone calls you have with the American Funds organization may be
monitored or recorded for quality assurance, verification and/or
recordkeeping purposes. By speaking with us on the telephone, you are
giving your consent to such monitoring and recording.
- -----------------------------------------------------------------------------------

MULTIPLE TRANSLATIONS This prospectus may be translated into other languages.
If there is any inconsistency or ambiguity in the meaning of any translated word
or phrase, the English text will prevail.

ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS The shareholder reports contain
additional information about the fund, including financial statements,
investment results, portfolio holdings, a discussion of market conditions and
the fund's investment strategies and the independent registered public
accounting firm's report (in the annual report).

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information about the fund,
including the fund's financial statements, and is incorporated by reference into
this prospectus. This means that the current SAI, for legal purposes, is part of
this prospectus. The codes of ethics describe the personal investing policies
adopted by the fund, the fund's investment adviser and its affiliated companies.

The codes of ethics and current SAI are on file with the Securities and Exchange
Commission (SEC). These and other related materials about the fund are available
for review or to be copied at the SEC's Public Reference Room in Washington, DC
(202/551-8090) or on the EDGAR database on the SEC's website at sec.gov or,
after payment of a duplicating fee, via e-mail request to publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, 100 F Street, NE, Washington,
DC 20549-1520. The codes of ethics, current SAI and shareholder reports are also
available, free of charge, on americanfunds.com.

E-DELIVERY AND HOUSEHOLD MAILINGS Each year you are automatically sent an
updated prospectus and annual and semi-annual reports for the fund. You may also
occasionally receive proxy statements for the fund. In order to reduce the
volume of mail you receive, when possible, only one copy of these documents will
be sent to shareholders who are part of the same family and share the same
household address. You may elect to receive these documents electronically in
lieu of paper form by enrolling in e-delivery on our website, americanfunds.com.

If you would like to opt out of household-based mailings or receive a
complimentary copy of the current SAI, codes of ethics or annual/semi-annual
report to shareholders, please call American Funds Service Company at
800/421-0180 or write to the secretary of the fund at P.O. Box 7650, San
Francisco, California 94120.

SECURITIES INVESTOR PROTECTION CORPORATION (SIPC) Shareholders may obtain
information about SIPC/(R)/ on its website at sipc.org or by calling
202/371-8300.

Investment Company File No. 811-00032
RPGEPR-910-0509P Litho in USA CGD/B/8032
- ---------------------------------------------------------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust

THE FUND PROVIDES SPANISH TRANSLATION IN CONNECTION WITH THE
PUBLIC OFFERING AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR
AND ACCURATE ENGLISH TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS
FOR THE FUND.

/s/ PATRICK F. QUAN
PATRICK F. QUAN
SECRETARY

<PAGE>

[Logo - American Funds /(R)/] The right choice for the long term/(R)/

Fundamental Investors/SM/

RETIREMENT PLAN
PROSPECTUS

May 1, 2009

TABLE OF CONTENTS

<PAGE>

[This page intentionally left blank for this filing]

<PAGE>

Risk/Return summary

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

Fundamental Investors / Prospectus
<PAGE>

HISTORICAL INVESTMENT RESULTS

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999 24.58%
2000 4.27
2001 -9.55
2002 -17.34
2003 31.96
2004 13.91
2005 11.68
2006 19.24
2007 13.55
2008 -39.70

[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 16.28% (quarter ended December 31, 2003)
LOWEST -23.34% (quarter ended December 31, 2008)

Fundamental Investors / Prospectus

<PAGE>

. Class A share results reflect the maximum initial sales charge of 5.75%. This
charge is reduced for purchases of $25,000 or more and eliminated for
purchases of $1 million or more.

. Class R shares are sold without any initial sales charge.

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 8 reflects the fund's results calculated without a sales charge.

INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
- -------------------------------------------------------------------------

CLASS A -- FROM 8/1/78 -43.16% -0.42% 2.30% 11.63%

1 YEAR 5 YEARS LIFETIME/1/
- -----------------------------------------------------------------

1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

Fundamental Investors / Prospectus
<PAGE>

Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)

CLASS A ALL R SHARE CLASSES
- ------------------------------------------------------------------------------

* The initial sales charge is reduced for purchases of $25,000 or more and
eliminated for purchases of $1 million or more.

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)

CLASS CLASS CLASS CLASS CLASS CLASS
CLASS A R-1 R-2 R-3 R-4 R-5/3/ R-6/3,4/
- -------------------------------------------------------------------------------

Fundamental Investors / Prospectus

<PAGE>

OTHER EXPENSES

PAYMENTS TO AFFILIATED ENTITIES PAYMENTS TO UNAFFILIATED
ENTITIES
- -------------------------------------------------------------------------------

1 Payment amount depends on the date upon which services commenced.
2 Payment with respect to Recordkeeper Direct/(R)/ program.
3 Payment with respect to PlanPremier/(R)/ program.

EXAMPLES

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------

* Reflects the maximum initial sales charge.

Fundamental Investors / Prospectus
<PAGE>

Investment objective, strategies and risks

Fundamental Investors / Prospectus

<PAGE>

OTHER IMPORTANT INVESTMENT PRACTICES

In addition to the principal investment strategies described above, the fund has
other investment practices that are described in this prospectus and in the
statement of additional information.

Fundamental Investors / Prospectus
<PAGE>

ADDITIONAL INVESTMENT RESULTS

Unlike the Investment Results table on page 3, the table below reflects the
fund's results calculated without a sales charge.

ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
- -------------------------------------------------------------------------

CLASS A -- FROM 8/1/78 -39.70% 0.76% 2.90% 11.85%

1 YEAR 5 YEARS LIFETIME/1/
- -----------------------------------------------------------------

1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

3 Standard & Poor's 500 Composite Index is a market capitalization-weighted
index based on the average weighted performance of 500 widely held common
stocks. This index is unmanaged and its results include reinvested dividends
and/ or distributions, but do not reflect the effect of sales charges,
commissions, expenses or taxes.
4 Lipper Growth & Income Funds Index is an equally weighted index of funds that
combine a growth-of-earnings orientation and an income requirement for level
and/or rising dividends. The results of the underlying funds in the index
include the reinvestment of dividends and capital gain distributions, as well
as brokerage commissions paid by the funds for portfolio transactions, but do
not reflect the effect of sales charges or taxes.
5 MSCI World Index is a free float-adjusted market capitalization weighted index
that is designed to measure equity market performance of developed markets. The
index consists of 23 developed country indexes, including the United States.
This index is unmanaged and its results include reinvested dividends and/or
distributions, but do not reflect the effect of sales charges, commissions,
expenses or taxes.
6 The distribution rate is based on actual dividends paid to Class A
shareholders over a 12-month period. Capital gain distributions, if any, are
added back to net asset value to determine the rate.

Fundamental Investors / Prospectus

<PAGE>

[begin pie chart]

INDUSTRY SECTOR DIVERSIFICATION AS OF DECEMBER 31, 2008 (PERCENT OF NET ASSETS)

[end pie chart]

PERCENT INVESTED BY COUNTRY AS OF DECEMBER 31, 2008 PERCENT OF NET ASSETS
- -------------------------------------------------------------------------------

* Countries using the euro as a common currency; those represented in the fund's
portfolio are Finland, France, Germany, Ireland, Italy and the Netherlands.

Because the fund is actively managed, its holdings will change over time.

For updated information on the fund's portfolio holdings, please visit us at
americanfunds.com.

Fundamental Investors / Prospectus
<PAGE>

Management and organization

INVESTMENT ADVISER

Fundamental Investors / Prospectus

<PAGE>

EXECUTION OF PORTFOLIO TRANSACTIONS

PORTFOLIO HOLDINGS

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Fundamental Investors / Prospectus
<PAGE>

The primary individual portfolio counselors for Fundamental Investors are:

Fundamental Investors / Prospectus

<PAGE>

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage can be found in the
statement of additional information.

Fundamental Investors / Prospectus
<PAGE>

Purchase, exchange and sale of shares

PURCHASES AND EXCHANGES

Class A shares are generally not available for retirement plans using the
PlanPremier or Recordkeeper Direct recordkeeping programs.

FREQUENT TRADING OF FUND SHARES

Fundamental Investors / Prospectus

<PAGE>

Fundamental Investors / Prospectus
<PAGE>

There is no guarantee that all instances of frequent trading in fund shares will
be prevented.

SALES

Please contact your plan administrator or recordkeeper in order to sell shares
from your retirement plan.

RIGHT OF REINVESTMENT

Fundamental Investors / Prospectus

<PAGE>

VALUING SHARES

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

Sales charges

CLASS A SHARES

Fundamental Investors / Prospectus
<PAGE>

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:

.. certain rollover investments from retirement plans to IRAs (see "Rollovers
from retirement plans to IRAs" in this prospectus for more information).

Fundamental Investors / Prospectus

<PAGE>

EMPLOYER-SPONSORED RETIREMENT PLANS

A 403(b) plan may not invest in Class A, B or C shares on or after January 1,
2009, unless such plan was invested in Class A, B or C shares prior to that
date.

CLASS R SHARES

Sales charge reductions

IN ADDITION TO THE INFORMATION IN THIS PROSPECTUS, YOU MAY OBTAIN MORE
INFORMATION ABOUT SHARE CLASSES, SALES CHARGES AND SALES CHARGE REDUCTIONS
THROUGH A LINK ON THE HOME

Fundamental Investors / Prospectus
<PAGE>

PAGE OF THE AMERICAN FUNDS WEBSITE AT AMERICANFUNDS.COM, FROM THE STATEMENT OF
ADDITIONAL INFORMATION OR FROM YOUR FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE

CONCURRENT PURCHASES

Simultaneous purchases of any class of shares of two or more American Funds
(excluding American Funds money market funds) may be combined to qualify for a
reduced Class A sales charge.

RIGHTS OF ACCUMULATION

STATEMENT OF INTENTION

Fundamental Investors / Prospectus

<PAGE>

plans may be restricted from establishing statements of intention. See "Sales
charges" in this prospectus for more information.

RIGHT OF REINVESTMENT

Rollovers from retirement plans to IRAs

.. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
custodian; and

.. rollovers to IRAs that are attributable to American Funds investments, if they
meet the following requirements:

-- the assets being rolled over were invested in American Funds at the time of
distribution; and

-- the rolled over assets are contributed to an American Funds IRA with Capital
Bank and Trust Company as custodian.

Plans of distribution

Fundamental Investors / Prospectus
<PAGE>

Other compensation to dealers

Fundamental Investors / Prospectus

<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

The fund intends to distribute dividends to shareholders, usually in February,
May, August and December.

Capital gains, if any, are usually distributed in December and February. When a
dividend or capital gain is distributed, the net asset value per share is
reduced by the amount of the payment.

All dividends and capital gain distributions paid to retirement plan
shareholders will be automatically reinvested.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

Dividends and capital gains distributed by the fund to tax-deferred retirement
plan accounts are not taxable currently.

TAXES ON TRANSACTIONS

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.

Fundamental Investors / Prospectus
<PAGE>

Financial highlights

(LOSS) INCOME FROM INVESTMENT OPERATIONS/1/ DIVIDENDS AND DISTRIBUTIONS

Fundamental Investors / Prospectus

<PAGE>

YEAR ENDED DECEMBER 31
2008 2007 2006 2005 2004
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 29% 27% 21% 24% 30%
OF SHARES

Fundamental Investors / Prospectus

<PAGE>

NOTES

Fundamental Investors / Prospectus

<PAGE>

[Logo - American Funds /(R)/] The right choice for the long term/(R)/

FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180

FOR RETIREMENT PLAN SERVICES Call your employer or plan
administrator

FOR ADVISER MARKETING American Funds Distributors
800/421-9900

americanfunds.com
FOR 24-HOUR INFORMATION For Class R share information, visit
AmericanFundsRetirement.com

SECURITIES INVESTOR PROTECTION CORPORATION (SIPC) Shareholders may obtain
information about SIPC/(R)/ on its website at sipc.org or by calling
202/371-8300.

<PAGE>

FUNDAMENTAL INVESTORS, INC.

Part B
Statement of Additional Information

May 1, 2009

This document is not a prospectus but should be read in conjunction with the
current prospectus of Fundamental Investors, Inc. (the "fund" or "FI") dated
March 1, 2009 or retirement plan prospectus of the fund dated May 1, 2009. You
may obtain a prospectus from your financial adviser or by writing to the fund at
the following address:

Fundamental Investors, Inc.
Attention: Secretary
One Market
Steuart Tower, Suite 1800
San Francisco, California 94105
415/421-9360

Certain privileges and/or services described below may not be available to all
shareholders (including shareholders who purchase shares at net asset value
through eligible retirement plans) depending on the shareholder's investment
dealer or retirement plan recordkeeper. Please see your financial adviser,
investment dealer, plan recordkeeper or employer for more information.

TABLE OF CONTENTS

Item Page no.
- ---- --------

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 2
Fundamental policies and investment restrictions. . . . . . . . . . 6
Management of the fund . . . . . . . . . . . . . . . . . . . . . . 9
Execution of portfolio transactions . . . . . . . . . . . . . . . . 29
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 31
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 35
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 40
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 47
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Shareholder account services and privileges . . . . . . . . . . . . 52
General information . . . . . . . . . . . . . . . . . . . . . . . . 55
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Financial statements

Fundamental Investors -- Page 1
<PAGE>

CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

The following limitations and guidelines are considered at the time of purchase,
under normal circumstances, and are based on a percentage of the fund's net
assets unless otherwise noted. This summary is not intended to reflect all of
the fund's investment limitations.

DEBT SECURITIES

.. The fund may invest up to 5% of its assets in straight debt securities
(i.e, not convertible into equity) rated Ba1 or below by Moody's Investors
Service ("Moody's") and BB+ or below by Standard & Poor's Corporation
("S&P") or unrated but determined to be of equivalent quality.

INVESTING OUTSIDE THE U.S.

.. The fund may invest up to 30% of its assets in securities of issuers that
are domiciled outside the United States and Canada and not included in the
S&P 500 Composite Index. In determining the domicile of an issuer, the
fund's investment adviser will consider the domicile determination of a
leading provider of global indexes, such as Morgan Stanley Capital
International, and may also take into account such factors as where the
company is legally organized and/or maintains principal corporate offices
and/or conducts its principal operations.

* * * * * *

The fund may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.

DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

The descriptions below are intended to supplement the material in the prospectus
under "Investment objective, strategies and risks."

EQUITY SECURITIES -- Equity securities represent an ownership position in a
company. Equity securities held by the fund typically consist of common stocks.
The prices of equity securities fluctuate based on, among other things, events
specific to their issuers and market, economic and other conditions. For
example, prices of these securities can be affected by financial contracts held
by the issuer or third parties (such as derivatives) relating to the security or
other assets or indices.

There may be little trading in the secondary market for particular equity
securities, which may adversely affect the fund's ability to value accurately or
dispose of such equity securities. Adverse publicity and investor perceptions,
whether or not based on fundamental analysis, may decrease the value and/or
liquidity of equity securities.

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

DEBT SECURITIES -- Debt securities are used by issuers to borrow money.
Generally, issuers pay investors periodic interest and repay the amount borrowed
either periodically during the life of the

Fundamental Investors -- Page 2
<PAGE>

security and/or at maturity. Some debt securities, such as zero coupon bonds, do
not pay current interest, but are purchased at a discount from their face values
and their values accrete over time to face value at maturity. The market prices
of debt securities fluctuate depending on such factors as interest rates, credit
quality and maturity. In general, market prices of debt securities decline when
interest rates rise and increase when interest rates fall. For example, prices
of these securities can be affected by financial contracts held by the issuer or
third parties (such as derivatives) relating to the security or other assets or
indices.

Lower rated debt securities, rated Ba1 or below by Moody's and/or BB+ or below
by S&P or unrated but determined by the fund's investment adviser to be of
equivalent quality, are described by the rating agencies as speculative and
involve greater risk of default or price changes due to changes in the issuer's
creditworthiness than higher rated debt securities, or they may already be in
default. The market prices of these securities may fluctuate more than higher
quality securities and may decline significantly in periods of general economic
difficulty. It may be more difficult to dispose of, and to determine the value
of, lower rated debt securities.

Credit ratings for debt securities provided by rating agencies reflect an
evaluation of the safety of principal and interest payments, not market value
risk. The rating of an issuer is a rating agency's view of past and future
potential developments related to the issuer and may not necessarily reflect
actual outcomes. There can be a lag between the time of developments relating to
an issuer and the time a rating is assigned and updated.

Bond rating agencies may assign modifiers (such as +/-) to ratings categories to
signify the relative position of a credit within the rating category. Investment
policies that are based on ratings categories should be read to include any
security within that category, without giving consideration to the modifier
except where otherwise provided. See the Appendix for more information about
credit ratings.

SECURITIES WITH EQUITY AND DEBT CHARACTERISTICS -- The fund may invest in
securities that have a combination of equity and debt characteristics. These
securities may at times behave more like equity than debt or vice versa. Some
types of convertible bonds, preferred stocks or other preferred securities
automatically convert into common stocks or other securities at a stated
conversion ratio and some may be subject to redemption at the option of the
issuer at a predetermined price. These securities, prior to conversion, may pay
a fixed rate of interest or a dividend. Because convertible securities have both
debt and equity characteristics, their values vary in response to many factors,
including the values of the securities into which they are convertible, general
market and economic conditions, and convertible market valuations, as well as
changes in interest rates, credit spreads and the credit quality of the issuer.

The prices and yields of nonconvertible preferred securities or preferred stocks
generally move with changes in interest rates and the issuer's credit quality,
similar to the factors affecting debt securities. Nonconvertible preferred
securities will be treated as debt for fund investment limit purposes.

REAL ESTATE INVESTMENT TRUSTS -- The fund may invest in securities issued by
real estate investment trusts (REITs), which primarily invest in real estate or
real estate-related loans. Equity REITs own real estate properties, while
mortgage REITs hold construction, development and/or long-term mortgage loans.
The values of REITs may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property taxes,
interest rates, tax laws and regulatory requirements, such as those relating to
the environment. Both types of

Fundamental Investors -- Page 3
<PAGE>

REITs are dependent upon management skill and the cash flows generated by their
holdings, the real estate market in general and the possibility of failing to
qualify for any applicable pass-through tax treatment or failing to maintain any
applicable exemptive status afforded under relevant laws.

INVESTING IN VARIOUS COUNTRIES -- Investing outside the United States may
involve additional risks caused by, among other things, currency controls and
fluctuating currency values; different accounting, auditing, financial reporting
and legal standards and practices in some countries; changing local, regional
and global economic, political and social conditions; expropriation; changes in
tax policy; greater market volatility; differing securities market structures;
higher transaction costs; and various administrative difficulties, such as
delays in clearing and settling portfolio transactions or in receiving payment
of dividends.

The risks described above may be heightened in connection with investments in
developing countries. Although there is no universally accepted definition, the
investment adviser generally considers a developing country as a country that is
in the earlier stages of its industrialization cycle with a low per capita gross
domestic product ("GDP") and a low market capitalization to GDP ratio relative
to those in the United States and the European Union. Historically, the markets
of developing countries have been more volatile than the markets of developed
countries. The fund may invest in securities of issuers in developing countries
only to a limited extent.

Additional costs could be incurred in connection with the fund's investment
activities outside the United States. Brokerage commissions may be higher
outside the United States, and the fund will bear certain expenses in connection
with its currency transactions. Furthermore, increased custodian costs may be
associated with maintaining assets in certain jurisdictions.

CURRENCY TRANSACTIONS -- The fund may purchase and sell currencies to facilitate
securities transactions and enter into forward currency contracts to protect
against changes in currency exchange rates. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. Forward currency contracts
entered into by the fund will involve the purchase or sale of one currency
against the U.S. dollar. While entering into forward currency transactions could
minimize the risk of loss due to a decline in the value of the hedged currency,
it could also limit any potential gain that may result from an increase in the
value of the currency. The fund will not generally attempt to protect against
all potential changes in exchange rates. The fund will segregate liquid assets
that will be marked to market daily to meet its forward contract commitments to
the extent required by the Securities and Exchange Commission.

Certain provisions of the Internal Revenue Code may affect the extent to which
the fund may enter into forward contracts. Such transactions also may affect the
character and timing of income, gain or loss recognized by the fund for U.S.
federal income tax purposes.

INVESTING IN SMALLER CAPITALIZATION STOCKS -- The fund may invest in the stocks
of smaller capitalization companies (typically companies with market
capitalizations of less than $3.5 billion at the time of purchase). The
investment adviser believes that the issuers of smaller capitalization stocks
often provide attractive investment opportunities. However, investing in smaller
capitalization stocks can involve greater risk than is customarily associated
with investing in stocks of larger, more established companies. For example,
smaller companies often have limited product lines, limited operating histories,
limited markets or financial resources, may be

Fundamental Investors -- Page 4
<PAGE>

dependent on one or a few key persons for management and can be more susceptible
to losses. Also, their securities may be thinly traded (and therefore have to be
sold at a discount from current prices or sold in small lots over an extended
period of time), may be followed by fewer investment research analysts and may
be subject to wider price swings, thus creating a greater chance of loss than
securities of larger capitalization companies.

OBLIGATIONS BACKED BY THE "FULL FAITH AND CREDIT" OF THE U.S. GOVERNMENT -- U.S.
government obligations include the following types of securities:

U.S. TREASURY SECURITIES -- U.S. Treasury securities include direct
obligations of the U.S. Treasury, such as Treasury bills, notes and bonds.
For these securities, the payment of principal and interest is
unconditionally guaranteed by the U.S. government, and thus they are of the
highest possible credit quality. Such securities are subject to variations
in market value due to fluctuations in interest rates, but, if held to
maturity, will be paid in full.

FEDERAL AGENCY SECURITIES -- The securities of certain U.S. government
agencies and government-sponsored entities are guaranteed as to the timely
payment of principal and interest by the full faith and credit of the U.S.
government. Such agencies and entities include the Government National
Mortgage Association (Ginnie Mae), the Veterans Administration (VA), the
Federal Housing Administration (FHA), the Export-Import Bank (Exim Bank),
the Overseas Private Investment Corporation (OPIC), the Commodity Credit
Corporation (CCC) and the Small Business Administration (SBA).

OTHER FEDERAL AGENCY OBLIGATIONS -- Additional federal agency securities are
neither direct obligations of, nor guaranteed by, the U.S. government. These
obligations include securities issued by certain U.S. government agencies and
government-sponsored entities. However, they generally involve some form of
federal sponsorship: some operate under a government charter; some are backed by
specific types of collateral; some are supported by the issuer's right to borrow
from the Treasury; and others are supported only by the credit of the issuing
government agency or entity. These agencies and entities include, but are not
limited to: Federal Home Loan Bank, Federal Home Loan Mortgage Corporation
(Freddie Mac), Federal National Mortgage Association (Fannie Mae), Tennessee
Valley Authority and Federal Farm Credit Bank System.

On September 7, 2008, Freddie Mac and Fannie Mae were placed into
conservatorship by their new regulator, the Federal Housing Finance Agency.
Simultaneously, the U.S. Treasury made a commitment of indefinite duration to
maintain the positive net worth of both firms.

CASH AND CASH EQUIVALENTS -- The fund may hold cash or invest in cash
equivalents. Cash equivalents include (a) commercial paper (for example,
short-term notes with maturities typically up to 12 months in length issued by
corporations, governmental bodies or bank/corporation sponsored conduits
(asset-backed commercial paper)) (b) short-term bank obligations (for example,
certificates of deposit, bankers' acceptances (time drafts on a commercial bank
where the bank accepts an irrevocable obligation to pay at maturity)) or bank
notes, (c) savings association and savings bank obligations (for example, bank
notes and certificates of deposit issued by savings banks or savings
associations), (d) securities of the U.S. government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (e)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.

REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements under
which the fund buys a security and obtains a simultaneous commitment from the
seller to repurchase the

Fundamental Investors -- Page 5
<PAGE>

security at a specified time and price. Repurchase agreements permit the fund to
maintain liquidity and earn income over periods of time as short as overnight.
The seller must maintain with the fund's custodian collateral equal to at least
100% of the repurchase price, including accrued interest, as monitored daily by
the investment adviser. The fund will only enter into repurchase agreements
involving securities in which it could otherwise invest and with selected banks
and securities dealers whose financial condition is monitored by the investment
adviser. 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 disposition costs in connection with liquidating the
collateral. If bankruptcy proceedings are commenced with respect to the seller,
realization of the collateral by the fund may be delayed or limited.

RESTRICTED OR ILLIQUID SECURITIES -- The fund may purchase securities subject to
restrictions on resale. Restricted securities may only be sold pursuant to an
exemption from registration under the Securities Act of 1933 (the "1933 Act"),
or in a registered public offering. Where registration is required, the holder
of a registered security may be obligated to pay all or part of the registration
expense and a considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under an
effective registration statement. Difficulty in selling such securities may
result in a loss to the fund or cause it to incur additional administrative
costs.

Securities (including restricted securities) not actively traded will be
considered illiquid unless they have been specifically determined to be liquid
under procedures adopted by the fund's board of directors, taking into account
factors such as the frequency and volume of trading, the commitment of dealers
to make markets and the availability of qualified investors, all of which can
change from time to time. The fund may incur certain additional costs in
disposing of illiquid securities.

* * * * * *

PORTFOLIO TURNOVER -- Portfolio changes will be made without regard to the
length of time particular investments may have been held. Short-term trading
profits are not the fund's objective, and changes in its investments are
generally accomplished gradually, though short-term transactions may
occasionally be made. 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.

The fund's portfolio turnover rates for the fiscal years ended December 31, 2008
and 2007 were 29% and 27%, respectively. The portfolio turnover rate would equal
100% if each security in a fund's portfolio were replaced once per year. See
"Financial highlights" in the prospectus for the fund's annual portfolio
turnover rate for each of the last five fiscal years.

FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

All percentage limitations are considered at the time securities are purchased
and are based on the fund's net assets unless otherwise indicated. None of the
following investment restrictions involving a maximum percentage of assets will
be considered violated unless the excess occurs immediately after, and is caused
by, an acquisition by the fund.

FUNDAMENTAL POLICIES -- The fund has adopted the following fundamental policies
and investment restrictions, which may not be changed without approval by
holders of a majority of its

Fundamental Investors -- Page 6
<PAGE>

outstanding shares. Such majority is defined in the Investment Company Act of
1940, as amended (the "1940 Act"), as the vote of the lesser of (a) 67% or more
of the voting securities present at a shareholder meeting, if the holders of
more than 50% of the outstanding voting securities are present in person or by
proxy, or (b) more than 50% of the outstanding voting securities.

The fund may not:

1. borrow money or securities;

2. buy securities "on margin";

3. effect "short sales" of securities;

4. mortgage, pledge or hypothecate securities;

5. lend money or securities (but the purchase of a portion of an issue of
publicly distributed debt securities is not considered the making of a loan);

6. invest in the securities of any issuer which, including predecessors, has
a record of less than three years continuous operation;

7. invest in the securities of any issuer if any officer or director of the
fund owns more than 1/2 of 1% of the securities of that issuer or if the fund's
officers and directors together own more than 5% of the securities of that
issuer;

8. invest any of its assets in the securities of any managed investment trust
or of any other managed investment company;

9. invest more than 5% of its total assets at the market value at the time of
investment in securities of any one issuer, or hold more than 10% of such
securities of any one issuer, but these limitations do not apply to obligations
of or guaranteed by the U.S.;

10. purchase or sell real estate (this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);

11. purchase or sell commodities or commodity contracts;

12. act as underwriter of securities issued by other persons;

13. make investments in other companies for the purpose of exercising control
or management;

14. concentrate its investments in any one industry or group of industries,
but may invest up to 25% of its assets in any one industry.

Notwithstanding investment restriction number 8, 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.

Fundamental Investors -- Page 7
<PAGE>

For purposes of investment restriction number 14, the fund will not invest 25%
or more (rather than more than 25%) of its total assets in the securities of
issuers in the same industry.

NONFUNDAMENTAL POLICIES -- The following policies may be changed without
shareholder approval.

1. The fund will not invest in puts or calls; or invest more than 10% of the
value of its total assets in securities which are not readily marketable
(including repurchase agreements maturing in more than seven days or securities
for which there is no active and substantial market).

2. No officer or director of the fund may sell portfolio securities to the
fund or buy portfolio securities from it.

3. The fund may not issue senior securities, except as permitted by the 1940
Act.

4. The fund may not acquire securities of open-end investment companies or
unit investment trusts registered under the 1940 Act in reliance on Sections
12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.

Fundamental Investors -- Page 8
<PAGE>

MANAGEMENT OF THE FUND

BOARD OF DIRECTORS AND OFFICERS

"INDEPENDENT" DIRECTORS/1/

NAME, AGE AND NUMBER OF
POSITION WITH FUND PORTFOLIOS/3/
(YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
AS A DIRECTOR/2/) DURING PAST FIVE YEARS BY DIRECTOR BY DIRECTOR
- -----------------------------------------------------------------------------------------------------------------

Ronald P. Badie, 66 Retired; former Vice Chairman, 3 Amphenol Corporation;
Director (2008) Deutsche Bank Alex. Brown Merisel, Inc.; Nautilus, Inc.;
Obagi Medical Products, Inc.

- -----------------------------------------------------------------------------------------------------------------
Joseph C. Berenato, 62 Chairman and CEO, Ducommun 6 None
Director (2003) Incorporated (aerospace
components manufacturer)
- -----------------------------------------------------------------------------------------------------------------
Louise H. Bryson, 65 Chair of the Board of 3 None
Director (2008) Trustees, J. Paul Getty Trust;
former President,
Distribution, Lifetime
Entertainment Network; former
Executive Vice President and
General Manager, Lifetime
Movie Network
- -----------------------------------------------------------------------------------------------------------------
Robert J. Denison, 67 Chair, First Security 5 None
Director (2005) Management (private
investment)
- -----------------------------------------------------------------------------------------------------------------
Robert A. Fox, 72 Managing General Partner, Fox 8 Chemtura Corporation
Director (1998) Investments LP; corporate
director; retired President
and CEO, Foster Farms (poultry
producer)
- -----------------------------------------------------------------------------------------------------------------
Leonade D. Jones, 61 Co-founder, VentureThink LLC 7 None
Director (1998) (developed and managed
e-commerce businesses) and
Versura Inc. (education loan
exchange); former Treasurer,
The Washington Post Company
- -----------------------------------------------------------------------------------------------------------------
John G. McDonald, 71 Stanford Investors Professor, 9 iStar Financial, Inc.;
Director (1998) Graduate School of Business, Plum Creek Timber Co.;
Stanford University Scholastic Corporation;
Varian, Inc.
- -----------------------------------------------------------------------------------------------------------------
Gail L. Neale, 74 President, The Lovejoy 4 None
Director (1985) Consulting Group, Inc. (a pro
bono consulting group advising
nonprofit organizations)
- -----------------------------------------------------------------------------------------------------------------
Henry E. Riggs, 74 President Emeritus, Keck 5 None
Chairman of the Board Graduate Institute of Applied
(Independent and Life Sciences
Non-Executive) (1989)
- -----------------------------------------------------------------------------------------------------------------
Patricia K. Woolf, Ph.D., Private investor; corporate 7 None
74 director; former Lecturer,
Director (1998) Department of Molecular
Biology, Princeton University
- -----------------------------------------------------------------------------------------------------------------

Fundamental Investors -- Page 9
<PAGE>

"INTERESTED" DIRECTORS/5,6/

PRINCIPAL OCCUPATION(S)
DURING PAST FIVE YEARS
NAME, AGE AND AND POSITIONS NUMBER OF
POSITION WITH FUND HELD WITH AFFILIATED ENTITIES PORTFOLIOS/3/
(YEAR FIRST ELECTED AS A OR THE PRINCIPAL UNDERWRITER OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
DIRECTOR/OFFICER/2/) OF THE FUND BY DIRECTOR BY DIRECTOR
- -------------------------------------------------------------------------------------------------------------

James F. Rothenberg, 62 Chairman of the Board, Capital 2 None
Research and Management
Company; Director and
Vice Chairman of the Board Non-Executive Chair, American
(1998) Funds Distributors, Inc.*;
Director and Non-Executive
Chair, The Capital Group
Companies, Inc.*
- -------------------------------------------------------------------------------------------------------------
Dina N. Perry, 63 Senior Vice President - Capital 1 None
World Investors, Capital
Research and Management Company;
President (1994) Director, Capital Research and
Management Company
- -------------------------------------------------------------------------------------------------------------

Fundamental Investors -- Page 10
<PAGE>

Other officers/6/

NAME, AGE AND
POSITION WITH FUND PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
(YEAR FIRST ELECTED AS AND POSITIONS HELD WITH AFFILIATED ENTITIES
AN OFFICER/2/) OR THE PRINCIPAL UNDERWRITER OF THE FUND
- -------------------------------------------------------------------------------

Paul G. Haaga, Jr., Vice Chairman of the Board, Capital Research and
60 Management Company; Senior Vice President - Fixed
Income, Capital Research and Management Company
Executive Vice
President (1994)
- -------------------------------------------------------------------------------
Michael T. Kerr, 49 Senior Vice President - Capital World Investors,
Capital Research and Management Company; Director,
Senior Vice President Capital Research and Management Company
(1995)
- -------------------------------------------------------------------------------
Martin Romo,/6/ 41 Senior Vice President - Capital World Investors,
Capital Research Company*; Director and Co-President,
Senior Vice President Capital Research Company*; Director, The Capital
(1999) Group Companies, Inc.*
- -------------------------------------------------------------------------------
Mark L. Casey,/6 /38 Vice President - Capital World Investors, Capital
Research Company*
Vice President (2008)
- -------------------------------------------------------------------------------
Ronald B. Morrow, 63 Senior Vice President - Capital World Investors,
Capital Research and Management Company
Vice President (2004)
- -------------------------------------------------------------------------------
Donald H. Rolfe, 36 Associate Counsel - Fund Business Management Group,
Capital Research and Management Company
Vice President (2007)
- -------------------------------------------------------------------------------
Patrick F. Quan, 50 Vice President - Fund Business Management Group,
Capital Research and Management Company
Secretary (1989-1998;
2000)
- -------------------------------------------------------------------------------
Jeffrey P. Regal, 37 Vice President - Fund Business Management Group,
Capital Research and Management Company
Treasurer (2006)
- -------------------------------------------------------------------------------
Gregory F. Niland, 37 Vice President - Fund Business Management Group,
Capital Research and Management Company
Assistant Treasurer
(2009)
- -------------------------------------------------------------------------------

* Company affiliated with Capital Research and Management Company.

1 The term "independent" director refers to a director who is not an "interested
person" of the fund within the meaning of the 1940 Act.
2 Directors and officers of the fund serve until their resignation, removal or
retirement.
3 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R)/ /Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
4 This includes all directorships (other than those in the American Funds or
other funds managed by Capital Research and Management Company) that are held
by each director as a director of a public company or a registered investment
company.
5 "Interested persons" of the fund within the meaning of the 1940 Act, on the
basis of their affiliation with the fund's investment adviser, Capital Research
and Management Company, or affiliated entities (including the fund's principal
underwriter).
6 All of the officers listed, except Mark L. Casey and Martin Romo, are officers
and/or directors/trustees of one or more of the other funds for which Capital
Research and Management Company serves as investment adviser.

THE ADDRESS FOR ALL DIRECTORS AND OFFICERS OF THE FUND IS 333 SOUTH HOPE STREET,
55TH FLOOR, LOS ANGELES, CALIFORNIA 90071, ATTENTION: SECRETARY.

Fundamental Investors -- Page 11
<PAGE>

FUND SHARES OWNED BY DIRECTORS AS OF DECEMBER 31, 2008:

AGGREGATE
DOLLAR
RANGE/1/ OF
INDEPENDENT
AGGREGATE DIRECTORS
DOLLAR RANGE/1/ DOLLAR DEFERRED
OF SHARES RANGE/1 /OF COMPENSATION/2/
OWNED IN INDEPENDENT ALLOCATED TO
ALL FUNDS DIRECTORS ALL FUNDS
IN THE DEFERRED WITHIN
DOLLAR RANGE/1/ AMERICAN FUNDS COMPENSATION/2/ AMERICAN FUNDS
OF FUND FAMILY OVERSEEN ALLOCATED FAMILY OVERSEEN
NAME SHARES OWNED BY DIRECTOR TO FUND BY DIRECTOR
- -----------------------------------------------------------------------------------------

"INDEPENDENT" DIRECTORS
- -----------------------------------------------------------------------------------------
Ronald P. Badie Over $100,000 Over $100,000 $10,001 - $10,001 - $50,000
$50,000
- -----------------------------------------------------------------------------------------
Joseph C. $10,001 - Over $100,000 $50,001 - Over $100,000
Berenato $50,000 $100,000
- -----------------------------------------------------------------------------------------
Louise H. Bryson $10,001 - Over $100,000 $10,001 - Over $100,000
$50,000 $50,000
- -----------------------------------------------------------------------------------------
Robert J. Denison $10,001 - $10,001 - N/A N/A
$50,000 $50,000
- -----------------------------------------------------------------------------------------
Robert A. Fox Over $100,000 Over $100,000 Over $100,000 Over $100,000
- -----------------------------------------------------------------------------------------
Leonade D. Jones $50,001 - Over $100,000 Over $100,000 Over $100,000
$100,000
- -----------------------------------------------------------------------------------------
John G. McDonald Over $100,000 Over $100,000 N/A N/A
- -----------------------------------------------------------------------------------------
Gail L. Neale $10,001 - Over $100,000 N/A N/A
$50,000
- -----------------------------------------------------------------------------------------
Henry E. Riggs Over $100,000 Over $100,000 Over $100,000 Over $100,000
- -----------------------------------------------------------------------------------------
Patricia K. Woolf $10,001 - Over $100,000 Over $100,000 Over $100,000
$50,000
- -----------------------------------------------------------------------------------------

Fundamental Investors -- Page 12
<PAGE>

AGGREGATE
DOLLAR RANGE/1/
OF SHARES
OWNED IN
ALL FUNDS
IN THE
DOLLAR RANGE/1/ AMERICAN FUNDS
OF FUND FAMILY OVERSEEN
NAME SHARES OWNED BY DIRECTOR
- ------------------------------------------------------------------------------

"INTERESTED" DIRECTORS
- ------------------------------------------------------------------------------
Dina N. Perry Over $100,000 Over $100,000
- ------------------------------------------------------------------------------
James F. Over $100,000 Over $100,000
Rothenberg
- ------------------------------------------------------------------------------

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; and Over $100,000. The amounts listed
for "interested" directors include shares owned through The Capital Group
Companies, Inc. retirement plan and 401(k) plan.

2 Eligible directors may defer their compensation under a nonqualified deferred
compensation plan. Deferred amounts accumulate at an earnings rate determined
by the total return of one or more American Funds as designated by the
director.

DIRECTOR COMPENSATION -- No compensation is paid by the fund to any officer or
director who is a director, officer or employee of the investment adviser or its
affiliates. The boards of funds advised by the investment adviser typically meet
either individually or jointly with the boards of one or more other such funds
with substantially overlapping board membership (in each case referred to as a
"board cluster"). The fund typically pays each independent director an annual
fee, which ranges from $16,500 to $35,000, based primarily on the total number
of board clusters on which that independent director serves.

In addition, the fund generally pays independent directors attendance and other
fees for meetings of the board and its committees. Board and committee chairs
receive additional fees for their services.

Independent directors also receive attendance fees for certain special joint
meetings and information sessions with directors and trustees of other groupings
of funds advised by the investment adviser. The fund and the other funds served
by each independent director each pay an equal portion of these attendance fees.

No pension or retirement benefits are accrued as part of fund expenses.
Independent directors may elect, on a voluntary basis, to defer all or a portion
of their fees through a deferred compensation plan in effect for the fund. The
fund also reimburses certain expenses of the independent directors.

Fundamental Investors -- Page 13
<PAGE>

DIRECTOR COMPENSATION EARNED DURING THE FISCAL YEAR ENDED DECEMBER 31, 2008

TOTAL COMPENSATION
AGGREGATE COMPENSATION (INCLUDING
(INCLUDING VOLUNTARILY VOLUNTARILY DEFERRED
DEFERRED COMPENSATION/1/) COMPENSATION/1/)
NAME FROM THE FUND FROM ALL FUNDS MANAGED BY
CAPITAL RESEARCH AND
MANAGEMENT
COMPANY OR ITS
AFFILIATES/2/
- ------------------------------------------------------------------------------------------------------------------------------------

Ronald P. Badie/3,4/ $22,583 $ 67,000
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph C. Berenato/3/ 53,667 310,500
- ------------------------------------------------------------------------------------------------------------------------------------
Louise H. Bryson/3,4/ 20,604 155,500
- ------------------------------------------------------------------------------------------------------------------------------------
Robert J. Denison/3/ 50,500 215,500
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Fox/3/ 49,777 325,625
- ------------------------------------------------------------------------------------------------------------------------------------
Leonade D. Jones/3/ 49,643 380,597
- ------------------------------------------------------------------------------------------------------------------------------------
John G. McDonald/3/ 44,334 398,667
- ------------------------------------------------------------------------------------------------------------------------------------
Gail L. Neale 56,375 240,500
- ------------------------------------------------------------------------------------------------------------------------------------
Henry E. Riggs/3/ 75,250 287,840
- ------------------------------------------------------------------------------------------------------------------------------------
Patricia K. Woolf/3/ 51,178 364,569
- ------------------------------------------------------------------------------------------------------------------------------------

1 Amounts may be deferred by eligible directors under a nonqualified 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 American Funds
as designated by the directors. Compensation shown in this table for the fiscal
year ended December 31, 2008 does not include earnings on amounts deferred in
previous fiscal years. See footnote 3 to this table for more information.
2 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R)/ /Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
3 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) through the 2008
fiscal year for participating directors is as follows: Ronald P. Badie
($18,015), Joseph C. Berenato ($56,288), Louise H. Bryson ($16,942), Robert J.
Denison ($127,099), Robert A. Fox ($310,406), Leonade D. Jones ($92,496), John
G. McDonald ($425,372), Henry E. Riggs ($334,239) and Patricia K. Woolf
($223,667). Amounts deferred and accumulated earnings thereon are not funded
and are general unsecured liabilities of the fund until paid to the directors.
4 Ronald P. Badie and Louise H. Bryson were elected on August 7, 2008.

As of March 1, 2009, the officers and directors of the fund and their families,
as a group, owned beneficially or of record less than 1% of the outstanding
shares of the fund.

FUND ORGANIZATION AND THE BOARD OF DIRECTORS -- The fund, an open-end,
diversified management investment company, was organized as a Delaware
corporation on October 17, 1932 and reincorporated in Maryland on February 1,
1990. Although the board of directors has delegated day-to-day oversight to the
investment adviser, all fund operations are supervised by the fund's board,
which meets periodically and performs duties required by applicable state and
federal laws.

Under Maryland law, the business affairs of a fund are managed under the
direction of the board of directors, and all powers of the fund are exercised by
or under the authority of the board except as reserved to the shareholders by
law or the fund's charter or by-laws. Maryland law requires each director to
perform his/her duties as a director, including his/her duties as a

Fundamental Investors -- Page 14
<PAGE>

member of any board committee on which he/she serves, in good faith, in a manner
he/she reasonably believes to be in the best interest of the fund, and with the
care that an ordinarily prudent person in a like position would use under
similar circumstances.

Independent board members are paid certain fees for services rendered to the
fund as described above. They may elect to defer all or a portion of these fees
through a deferred compensation plan in effect for the fund.

The fund has several different classes of shares. Shares of each class represent
an interest in the same investment portfolio. Each class has pro rata rights as
to voting, redemption, dividends and liquidation, except that each class bears
different distribution expenses and may bear different transfer agent fees and
other expenses properly attributable to the particular class as approved by the
board of directors and set forth in the fund's rule 18f-3 Plan. Each class'
shareholders have exclusive voting rights with respect to the respective class'
rule 12b-1 plans adopted in connection with the distribution of shares and on
other matters in which the interests of one class are different from interests
in another class. Shares of all classes of the fund vote together on matters
that affect all classes in substantially the same manner. Each class votes as a
class on matters that affect that class alone. Note that 529 college savings
plan account owners invested in Class 529 shares are not shareholders of the
fund and, accordingly, do not have the rights of a shareholder, such as the
right to vote proxies relating to fund shares. As the legal owner of the fund's
Class 529 shares, the Virginia College Savings Plan/SM/ will vote any proxies
relating to such fund shares.

The fund does not hold annual meetings of shareholders. However, significant
matters that require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. 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.

The fund's articles of incorporation and by-laws as well as separate
indemnification agreements that the fund has entered into with independent
directors provide in effect that, subject to certain conditions, the fund will
indemnify its officers and directors against liabilities or expenses actually
and reasonably incurred by them relating to their service to the fund. However,
directors are not protected from liability by reason of their willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their office.

COMMITTEES OF THE BOARD OF DIRECTORS -- The fund has an audit committee
comprised of Ronald P. Badie, Joseph C. Berenato, Robert J. Denison, Robert A.
Fox and Leonade D. Jones, none of whom is an "interested person" of the fund
within the meaning of the 1940 Act. The committee provides oversight regarding
the fund's accounting and financial reporting policies and practices, its
internal controls and the internal controls of the fund's principal service
providers. The committee acts as a liaison between the fund's independent
registered public accounting firm and the full board of directors. Four audit
committee meetings were held during the 2008 fiscal year.

The fund has a contracts committee, comprised of Ronald P. Badie, Joseph C.
Berenato, Louise H. Bryson, Robert J. Denison, Robert A. Fox, Leonade D. Jones,
John G. McDonald, Gail L. Neale, Henry E. Riggs and Patricia K. Woolf, none of
whom is an "interested person" of the fund within the meaning of the 1940 Act.
The committee's principal function is to request,

Fundamental Investors -- Page 15
<PAGE>

review and consider the information deemed necessary to evaluate the terms of
certain agreements between the fund and its investment adviser or the investment
adviser's affiliates, such as the Investment Advisory and Service Agreement,
Principal Underwriting Agreement, Administrative Services Agreement and Plans of
Distribution adopted pursuant to rule 12b-1 under the 1940 Act, that the fund
may enter into, renew or continue, and to make its recommendations to the full
board of directors on these matters. One contracts committee meeting was held
during the 2008 fiscal year.

The fund has a nominating and governance committee, comprised of Joseph C.
Berenato, Louise H. Bryson, John G. McDonald, Gail L. Neale and Patricia K.
Woolf, none of whom is an "interested person" of the fund within the meaning of
the 1940 Act. The committee periodically reviews such issues as the board's
composition, responsibilities, committees, compensation and other relevant
issues, and recommends any appropriate changes to the full board of directors.
The committee also evaluates, selects and nominates independent director
candidates to the full board of directors. While the committee normally is able
to identify from its own and other resources an ample number of qualified
candidates, it will consider shareholder suggestions of persons to be considered
as nominees to fill future vacancies on the board. Such suggestions must be sent
in writing to the nominating and governance committee, of the fund, addressed to
the fund's secretary, and must be accompanied by complete biographical and
occupational data on the prospective nominee, along with a written consent of
the prospective nominee for consideration of his or her name by the committee.
Three nominating committee meetings were held during the 2008 fiscal year.

The fund has a proxy committee comprised of Robert A. Fox, Leonade D. Jones,
John G. McDonald, Gail L. Neale and Patricia K. Woolf, none of whom is an
"interested person" of the fund within the meaning of the 1940 Act. The
committee's functions include reviewing procedures and policies
for voting proxies of companies held in the fund's portfolio, making
determinations with regard to certain contested proxy voting issues, and
discussing related current issues. Four proxy committee meetings were held
during the 2008 fiscal year.

PROXY VOTING PROCEDURES AND PRINCIPLES -- The fund's investment adviser, in
consultation with the fund's board, has adopted Proxy Voting Procedures and
Principles (the "Principles") with respect to voting proxies of securities held
by the fund, other American Funds, Endowments and American Funds Insurance
Series. The complete text of these principles is available on the American Funds
website at americanfunds.com. Certain American Funds, including the fund, have
established separate proxy voting committees that vote proxies or delegate to a
voting officer the authority to vote on behalf of those funds. Proxies for all
other funds are voted by a committee of the appropriate equity investment
division of the investment adviser under authority delegated by those funds'
boards. Therefore, if more than one fund invests in the same company, they may
vote differently on the same proposal.

All U.S. proxies are voted. Proxies for companies outside the U.S. also are
voted, provided there is sufficient time and information available. After a
proxy statement is received, the investment adviser prepares a summary of the
proposals contained in the proxy statement. A discussion of any potential
conflicts of interest also is included in the summary. For proxies of securities
managed by a particular investment division of the investment adviser, the
initial voting recommendation is made by one or more of the division's
investment analysts familiar with the company and industry. A second
recommendation is made by a proxy coordinator (an investment analyst with
experience in corporate governance and proxy voting matters) within the
appropriate

Fundamental Investors -- Page 16
<PAGE>

investment division, based on knowledge of these Principles and familiarity with
proxy-related issues. The proxy summary and voting recommendations are made
available to the appropriate proxy voting committee for a final voting decision.

The analyst and proxy coordinator making voting recommendations are responsible
for noting any potential material conflicts of interest. One example might be
where a director of one or more American Funds is also a director of a company
whose proxy is being voted. In such instances, proxy voting committee members
are alerted to the potential conflict. The proxy voting committee may then elect
to vote the proxy or seek a third-party recommendation or vote of an ad hoc
group of committee members.

The Principles, which have been in effect in substantially their current form
for many years, provide an important framework for analysis and decision-making
by all funds. However, they are not exhaustive and do not address all potential
issues. The Principles provide a certain amount of flexibility so that all
relevant facts and circumstances can be considered in connection with every
vote. As a result, each proxy received is voted on a case-by-case basis
considering the specific circumstances of each proposal. The voting process
reflects the funds' understanding of the company's business, its management and
its relationship with shareholders over time.

Information regarding how the fund voted proxies relating to portfolio
securities during the 12-month period ended June 30 of each year will be
available on or about September 1 of each year (a) without charge, upon request
by calling American Funds Service Company at 800/421-0180, (b) on the American
Funds website and (c) on the SEC's website at sec.gov.

The following summary sets forth the general positions of the American Funds,
Endowments, American Funds Insurance Series and the investment adviser on
various proposals. A copy of the full Principles is available upon request, free
of charge, by calling American Funds Service Company or visiting the American
Funds website.

DIRECTOR MATTERS -- The election of a company's slate of nominees for
director generally is supported. Votes may be withheld for some or all of
the nominees if this is determined to be in the best interest of
shareholders. Separation of the chairman and CEO positions also may be
supported.

GOVERNANCE PROVISIONS -- Typically, proposals to declassify a board (elect
all directors annually) are supported based on the belief that this
increases the directors' sense of accountability to shareholders. Proposals
for cumulative voting generally are supported in order to promote
management and board accountability and an opportunity for leadership
change. Proposals designed to make director elections more meaningful,
either by requiring a majority vote or by requiring any director receiving
more withhold votes than affirmative votes to tender his or her
resignation, generally are supported.

SHAREHOLDER RIGHTS -- Proposals to repeal an existing poison pill generally
are supported. (There may be certain circumstances, however, when a proxy
voting committee of a fund or an investment division of the investment
adviser believes that a company needs to maintain anti-takeover
protection.) Proposals to eliminate the right of shareholders to act by
written consent or to take away a shareholder's right to call a special
meeting typically are not supported.

Fundamental Investors -- Page 17
<PAGE>

COMPENSATION AND BENEFIT PLANS -- Option plans are complicated, and many
factors are considered in evaluating a plan. Each plan is evaluated based
on protecting shareholder interests and a knowledge of the company and its
management. Considerations include the pricing (or repricing) of options
awarded under the plan and the impact of dilution on existing shareholders
from past and future equity awards. Compensation packages should be
structured to attract, motivate and retain existing employees and qualified
directors; however, they should not be excessive.

ROUTINE MATTERS -- The ratification of auditors, procedural matters
relating to the annual meeting and changes to company name are examples of
items considered routine. Such items generally are voted in favor of
management's recommendations unless circumstances indicate otherwise.

PRINCIPAL FUND SHAREHOLDERS -- The following table identifies those investors
who own of record or are known by the fund to own beneficially 5% or more of any
class of its shares as of the opening of business on March 1, 2009. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.

NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
- --------------------------------------------------------------------------------

Edward D. Jones & Co. Record Class A 26.49%
Omnibus Account Class B 16.90
Maryland Heights, MO
- --------------------------------------------------------------------------------
First Clearing, LLC Record Class A 7.37
Custody Account Class B 7.88
Glen Allen, VA Class C 10.27
- --------------------------------------------------------------------------------
Citigroup Global Markets, Inc. Record Class C 16.76
Omnibus Account Class F-1 25.70
New York, NY
- --------------------------------------------------------------------------------
Merrill Lynch Record Class C 10.60
Omnibus Account
Jacksonville, FL
- --------------------------------------------------------------------------------
LPL Financial Record Class F-1 10.60
Omnibus Account Class F-2 26.60
San Diego, CA
- --------------------------------------------------------------------------------
Charles Schwab & Co., Inc. Record Class F-1 6.08
Custody Account Class F-2 9.49
San Francisco. CA Class R-4 6.61
Class R-5 9.65
- --------------------------------------------------------------------------------
Hartford Life Insurance Co. Separate Record Class R-1 27.12
Account Beneficial
401K Plan
Hartford, CT
- --------------------------------------------------------------------------------
NFS, LLC FEBO Record Class R-3 7.34
Transamerica Life Insurance Beneficial
Los Angeles, CA
- --------------------------------------------------------------------------------
NFS, LLC FEBO Record Class R-4 15.25
401K Plans Beneficial Class R-5 15.44
Covington, KY
- --------------------------------------------------------------------------------
Principal Financial Group Record Class R-4 6.77
Omnibus Account
Des Moines, IA
- --------------------------------------------------------------------------------

Fundamental Investors -- Page 18
<PAGE>

UNLESS OTHERWISE NOTED, REFERENCES IN THIS STATEMENT OF ADDITIONAL INFORMATION
TO CLASS F SHARES, CLASS R SHARES OR CLASS 529 SHARES REFER TO BOTH F SHARE
CLASSES, ALL R SHARE CLASSES OR ALL 529 SHARE CLASSES, RESPECTIVELY.

INVESTMENT ADVISER -- Capital Research and Management Company, the fund's
investment adviser, founded in 1931, maintains research facilities in the United
States and abroad (Los Angeles, San Francisco, New York, Washington, DC, London,
Geneva, Hong Kong, Singapore and Tokyo). These facilities are staffed with
experienced investment professionals. The investment adviser is located at 333
South Hope Street, Los Angeles, CA 90071 and 6455 Irvine Center Drive, Irvine,
CA 92618. It is a wholly owned subsidiary of The Capital Group Companies, Inc.,
a holding company for several investment management subsidiaries. Capital
Research and Management Company manages equity assets through two investment
divisions, Capital World Investors and Capital Research Global Investors, and
manages fixed-income assets through its Fixed Income division. Capital World
Investors and Capital Research Global Investors make investment decisions on an
independent basis.

The investment adviser has adopted policies and procedures that address issues
that may arise as a result of an investment professional's management of the
fund and other funds and accounts. Potential issues could involve allocation of
investment opportunities and trades among funds and accounts, use of information
regarding the timing of fund trades, investment professional compensation and
voting relating to portfolio securities. The investment adviser believes that
its policies and procedures are reasonably designed to address these issues.

COMPENSATION OF INVESTMENT PROFESSIONALS -- As described in the prospectus, the
investment adviser uses a system of multiple portfolio counselors in managing
fund assets. In addition, Capital Research and Management Company's investment
analysts may make investment decisions with respect to a portion of a fund's
portfolio within their research coverage.

Portfolio counselors and investment analysts are paid competitive salaries by
Capital Research and Management Company. In addition, they may receive bonuses
based on their individual portfolio results. Investment professionals also may
participate in profit-sharing plans. The relative mix of compensation
represented by bonuses, salary and profit-sharing plans will vary depending on
the individual's portfolio results, contributions to the organization and other
factors.

To encourage a long-term focus, bonuses based on investment results are
calculated by comparing pretax total investment returns to relevant benchmarks
over the most recent year, a four-year rolling average and an eight-year rolling
average with greater weight placed on the four-year and eight-year rolling
averages. For portfolio counselors, benchmarks may include measures of the
marketplaces in which the fund invests and measures of the results of comparable
mutual funds. For investment analysts, benchmarks may include relevant market
measures and appropriate industry or sector indexes reflecting their areas of
expertise. Capital Research and Management Company makes periodic subjective
assessments of analysts' contributions to the investment process and this is an
element of their overall compensation. The investment results of each of the
fund's portfolio counselors may be measured against one or

Fundamental Investors -- Page 19
<PAGE>

more of the following benchmarks, depending on his or her investment focus: S&P
500, MSCI World Index and Lipper Growth & Income Funds Index.

PORTFOLIO COUNSELOR FUND HOLDINGS AND OTHER MANAGED ACCOUNTS -- As described
below, portfolio counselors may personally own shares of the fund. In addition,
portfolio counselors may manage portions of other mutual funds or accounts
advised by Capital Research and Management Company or its affiliates.

THE FOLLOWING TABLE REFLECTS INFORMATION AS OF DECEMBER 31, 2008:

NUMBER NUMBER
OF OTHER OF OTHER NUMBER
REGISTERED POOLED OF OTHER
INVESTMENT INVESTMENT ACCOUNTS
COMPANIES (RICS) VEHICLES (PIVS) FOR WHICH
FOR WHICH FOR WHICH PORTFOLIO
PORTFOLIO PORTFOLIO COUNSELOR
DOLLAR RANGE COUNSELOR COUNSELOR IS A MANAGER
OF FUND IS A MANAGER IS A MANAGER (ASSETS OF
PORTFOLIO SHARES (ASSETS OF RICS (ASSETS OF PIVS OTHER ACCOUNTS
COUNSELOR OWNED/1/ IN BILLIONS)/2/ IN BILLIONS)/3/ IN BILLIONS)/4/
- ----------------------------------------------------------------------------------------

Dina N. Perry Over 3 $134.3 1 $0.71 None
$1,000,000
- -----------------------------------------------------------------------------------------
Michael T. Kerr $500,001 - 2 $190.8 None None
$1,000,000
- -----------------------------------------------------------------------------------------
Ronald B. $100,001 - 3 $239.6 None None
Morrow $500,000
- -----------------------------------------------------------------------------------------
James E. Drasdo Over 1 $117.9 None None
$1,000,000
- -----------------------------------------------------------------------------------------
Brady L. $100,001 - 2 $ 46.3 None None
Enright $500,000
- -----------------------------------------------------------------------------------------

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; $100,001 - $500,000; $500,001 -
$1,000,000; and Over $1,000,000. The amounts listed include shares owned
through The Capital Group Companies, Inc. retirement plan and 401(k) plan.
2 Indicates fund(s) where the portfolio counselor also has significant
responsibilities for the day to day management of the fund(s). Assets noted are
the total net assets of the registered investment companies and are not the
total assets managed by the individual, which is a substantially lower amount.
No fund has an advisory fee that is based on the performance of the fund.
3 Represents funds advised or sub-advised by Capital Research and Management
Company and sold outside the United States and/ or fixed-income assets in
institutional accounts managed by investment adviser subsidiaries of Capital
Group International, Inc., an affiliate of Capital Research and Management
Company. Assets noted are the total net assets of the funds or accounts and are
not the total assets managed by the individual, which is a substantially lower
amount. No fund or account has an advisory fee that is based on the performance
of the fund or account.
4 Reflects other professionally managed accounts held at companies affiliated
with Capital Research and Management Company. Personal brokerage accounts of
portfolio counselors and their families are not reflected.

INVESTMENT ADVISORY AND SERVICE AGREEMENT -- The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the investment adviser will
continue in effect until August 31, 2009, 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

Fundamental Investors -- Page 20
<PAGE>

(a) the board of directors, or by the vote of a majority (as defined in the 1940
Act) of the outstanding voting securities of the fund, and (b) 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).

In addition to providing investment advisory services, the investment adviser
furnishes the services and pays the compensation and travel expenses of persons
to perform the fund's executive, administrative, clerical and bookkeeping
functions, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies and postage used at
the fund's offices. 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; shareholder recordkeeping and administrative
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 fund shares (including stock certificates,
registration and qualification fees and expenses); expenses pursuant to the
fund's plans of distribution (described below); legal and auditing expenses;
compensation, fees and expenses paid to independent directors; association dues;
costs of stationery and forms prepared exclusively for the fund; and costs of
assembling and storing shareholder account data.

As compensation for its services, the investment adviser receives a monthly
management fee that is based on average daily net assets and is calculated at an
annual rate of 0.39% on the first $1 billion of the fund's net assets, plus
0.336% on net assets over $1 billion to $2 billion, plus 0.30% on net assets
over $2 billion to $3 billion, plus 0.276% on net assets over $3 billion to $5
billion, plus 0.27% on net assets over $5 billion to $8 billion, plus 0.258% on
net assets over $8 billion to $13 billion, plus 0.252% on net assets over $13
billion to $17 billion, plus 0.250% on net assets over $17 billion to $21
billion, plus 0.245% on net assets over $21 billion to $27 billion, plus 0.240%
on net assets over $27 billion to $34 billion, plus 0.237% on net assets over
$34 billion to $44 billion, plus 0.234% on net assets over $44 billion to $55
billion, plus 0.232% on net assets over $55 billion.

The investment adviser has agreed to waive any fees to the extent they would
exceed those payable under the rate structure contained in its previous
agreement that was in effect from December 1, 1991 through May 31, 1998. The fee
structure referenced above is lower than that in the previous agreement except
in the event that the fund's net assets were to fall below $8 billion when fees
are equal to, or higher than, that in the previous agreement.

The Agreement provides for a management fee reduction to the extent that the
annual ordinary operating expenses of the fund's Class A shares exceed 1% of the
average net assets in excess thereof. Expenses which are not subject to these
limitations are interest, taxes and extraordinary expenses. Expenditures,
including costs incurred in connection with the purchase or sale of portfolio
securities, which are capitalized in accordance with generally accepted
accounting principles applicable to investment companies, are accounted for as
capital items and not as expenses. To the extent the fund's management fee must
be waived due to Class A share expense ratios exceeding the expense limitations
described above, management fees will be

Fundamental Investors -- Page 21
<PAGE>

reduced similarly for all classes of shares of the fund, or other Class A fees
will be waived in lieu of management fees.

For the fiscal years ended December 31, 2008, 2007 and 2006, the investment
adviser was entitled to receive from the fund management fees of $115,983,000,
$115,799,000 and $87,469,000, respectively. After giving effect to the
management fee waivers described below, the fund paid the investment adviser
management fees of $104,385,000 (a reduction of $11,598,000), $104,219,000 (a
reduction of $11,580,000) and $78,722,000 (a reduction of $8,747,000) for the
fiscal years ended December 31, 2008, 2007 and 2006, respectively.

For the period from September 1, 2004 through March 31, 2005, the investment
adviser agreed to waive 5% of the management fees that it was otherwise entitled
to receive under the Agreement. From April 1, 2005 through December 31, 2008,
this waiver increased to 10% of the management fees that the investment adviser
was otherwise entitled to receive. The waiver was discontinued effective January
1, 2009.

ADMINISTRATIVE SERVICES AGREEMENT -- The Administrative Services Agreement (the
"Administrative Agreement") between the fund and the investment adviser relating
to the fund's Class C, F, R and 529 shares will continue in effect until August
31, 2009, 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 the vote of a majority of directors who are not parties to the
Administrative 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 fund may terminate the Administrative Agreement at any time
by vote of a majority of independent directors. The investment adviser has the
right to terminate the Administrative Agreement upon 60 days' written notice to
the fund. The Administrative Agreement automatically terminates in the event of
its assignment (as defined in the 1940 Act).

Under the Administrative Agreement, the investment adviser provides certain
transfer agent and administrative services for shareholders of the fund's Class
C and F shares, and Class R and 529 shares. The investment adviser may contract
with third parties, including American Funds Service Company,/(R)/ the fund's
Transfer Agent, to provide some of these services. Services include, but are not
limited to, shareholder account maintenance, transaction processing, tax
information reporting and shareholder and fund communications. In addition, the
investment adviser monitors, coordinates, oversees and assists with the
activities performed by third parties providing such services.

The investment adviser receives an administrative services fee at the annual
rate of up to 0.15% of the average daily net assets for Class C, F, R (excluding
Class R-5 and R-6 shares) and 529 shares for administrative services provided to
these share classes. Administrative services fees are paid monthly and accrued
daily. The investment adviser uses a portion of this fee to compensate third
parties for administrative services provided to the fund. Of the remainder, the
investment adviser does not retain more than 0.05% of the average daily net
assets for each applicable share class. For Class R-5 and R-6 shares, the
administrative services fee is calculated at the annual rate of up to 0.10% and
0.05%, respectively, of the average daily net assets of such class. The
administrative services fee includes compensation for transfer agent and
shareholder services provided to the fund's Class C, F, R and 529 shares. In
addition to making administrative service fee payments to unaffiliated third
parties, the investment adviser also makes payments from the administrative
services fee to American Funds Service Company according to a fee schedule,
based principally on the number of accounts serviced, contained in

Fundamental Investors -- Page 22
<PAGE>

a Shareholder Services Agreement between the fund and American Funds Service
Company. A portion of the fees paid to American Funds Service Company for
transfer agent services is also paid directly from the relevant share class.

During the 2008 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:

ADMINISTRATIVE SERVICES FEE
- --------------------------------------------------------------------------------

CLASS C $3,055,000
- --------------------------------------------------------------------------------
CLASS F-1 3,671,000
- --------------------------------------------------------------------------------
CLASS F-2 24,000
- --------------------------------------------------------------------------------
CLASS 529-A 652,000
- --------------------------------------------------------------------------------
CLASS 529-B 87,000
- --------------------------------------------------------------------------------
CLASS 529-C 218,000
- --------------------------------------------------------------------------------
CLASS 529-E 29,000
- --------------------------------------------------------------------------------
CLASS 529-F-1 24,000
- --------------------------------------------------------------------------------
CLASS R-1 107,000
- --------------------------------------------------------------------------------
CLASS R-2 2,138,000
- --------------------------------------------------------------------------------
CLASS R-3 2,543,000
- --------------------------------------------------------------------------------
CLASS R-4 1,587,000
- --------------------------------------------------------------------------------
CLASS R-5 1,065,000
- --------------------------------------------------------------------------------

PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds
Distributors,/(R)/ Inc. (the "Principal Underwriter") is the principal
underwriter of the fund's shares. The Principal Underwriter is located at 333
South Hope Street, Los Angeles, CA 90071; 6455 Irvine Center Drive, Irvine, CA
92618; 3500 Wiseman Boulevard, San Antonio, TX 78251; 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 46240; and 5300 Robin Hood Road, Norfolk, VA 23513.

The Principal Underwriter receives revenues relating to sales of the fund's
shares, as follows:

. For Class A and 529-A shares, the Principal Underwriter receives
commission revenue consisting of the balance of the Class A and 529-A
sales charge remaining after the allowances by the Principal
Underwriter to investment dealers.

. For Class B and 529-B shares, the Principal Underwriter sells its
rights to the 0.75% distribution-related portion of the 12b-1 fees
paid by the fund, as well as any contingent deferred sales charges, to
a third party. The Principal Underwriter compensates investment
dealers for sales of Class B and 529-B shares out of the proceeds of
this sale and keeps any amounts remaining after this compensation is
paid.

Fundamental Investors -- Page 23
<PAGE>

. For Class C and 529-C shares, the Principal Underwriter receives any
contingent deferred sales charges that apply during the first year
after purchase.

In addition, the fund reimburses the Principal Underwriter for advancing
immediate service fees to qualified dealers and advisers upon the sale of Class
B, 529-B, C and 529-C shares. The fund also reimburses the Principal Underwriter
for service fees (and, in the case of Class 529-E shares, commissions) paid on a
quarterly basis to qualified dealers and advisers in connection with investments
in Class F-1, 529-F-1, 529-E, R-1, R-2, R-3 and R-4 shares.

Commissions, revenue or service fees retained by the Principal Underwriter after
allowances or compensation to dealers were:

COMMISSIONS, ALLOWANCE OR

REVENUE COMPENSATION

FISCAL YEAR/PERIOD OR FEES RETAINED TO DEALERS
- -----------------------------------------------------------------------------------------------------

CLASS A 2008 $22,580,000 $ 99,505,000
2007 23,001,000 100,028,000
2006 20,462,000 89,708,000
- -----------------------------------------------------------------------------------------------------
CLASS B 2008 763,000 6,709,000
2007 1,020,000 6,693,000
2006 788,000 5,960,000
- -----------------------------------------------------------------------------------------------------
CLASS C 2008 272,000 5,732,000
2007 -- 6,137,000
2006 -- 4,452,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-A 2008 877,000 4,067,000
2007 947,000 4,327,000
2006 696,000 3,180,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-B 2008 49,000 393,000
2007 58,000 407,000
2006 46,000 328,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-C 2008 -- 502,000
2007 -- 543,000
2006 -- 363,000
- -----------------------------------------------------------------------------------------------------

Fundamental Investors -- Page 24
<PAGE>

Plans of distribution -- The fund has adopted plans of distribution (the
"Plans") pursuant to rule 12b-1 under the 1940 Act. The Plans permit the fund to
expend amounts to finance any activity 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.

Each Plan is specific to a particular share class of the fund. As the fund has
not adopted a Plan for Class F-2, Class R-5 or Class R-6, no 12b-1 fees are paid
from Class F-2, Class R-5 or Class R-6 share assets and the following disclosure
is not applicable to these share classes.

Payments under the Plans may be made for service-related and/or
distribution-related expenses. Service-related expenses include paying service
fees to qualified dealers. Distribution-related expenses include commissions
paid to qualified dealers. The amounts actually paid under the Plans for the
past fiscal year, expressed as a percentage of the fund's average daily net
assets attributable to the applicable share class, are disclosed in the
prospectus under "Fees and expenses of the fund." Further information regarding
the amounts available under each Plan is in the "Plans of Distribution" section
of the prospectus.

Following is a brief description of the Plans:

CLASS A AND 529-A -- For Class A and 529-A shares, up to 0.25% of the
fund's average daily net assets attributable to such shares is reimbursed
to the Principal Underwriter for paying service-related expenses, and the
balance available under the applicable Plan may be paid to the Principal
Underwriter for distribution-related expenses. The fund may annually expend
up to 0.25% for Class A shares and up to 0.50% for Class 529-A shares under
the applicable Plan.

Distribution-related expenses for Class A and 529-A shares include dealer
commissions and wholesaler compensation paid on sales of shares of $1
million or more purchased without a sales charge. Commissions on these "no
load" purchases (which are described in further detail under the "Sales
Charges" section of this statement of additional information) in excess of
the Class A and 529-A Plan limitations and not reimbursed to the Principal
Underwriter during the most recent fiscal quarter are recoverable for five
quarters, provided that the reimbursement of such commissions does not
cause the fund to exceed the annual expense limit. After five quarters,
these commissions are not recoverable.

CLASS B AND 529-B -- The Plans for Class B and 529-B shares provide for
payments to the Principal Underwriter of up to 0.25% of the fund's average
daily net assets attributable

Fundamental Investors -- Page 25
<PAGE>

to such shares for paying service-related expenses and 0.75% for
distribution-related expenses, which include the financing of commissions
paid to qualified dealers.

OTHER SHARE CLASSES (CLASS C, 529-C, F-1, 529-F-1, 529-E, R-1, R-2, R-3 AND
R-4) -- The Plans for each of the other share classes that have adopted
Plans provide for payments to the Principal Underwriter for paying
service-related and distribution-related expenses of up to the following
amounts of the fund's average daily net assets attributable to such shares:

TOTAL
SERVICE DISTRIBUTION ALLOWABLE
RELATED RELATED UNDER
SHARE CLASS PAYMENTS/1/ PAYMENTS/1/ THE PLANS/2/
- ----------------------------------------------------------------------------------

Class C 0.25% 0.75% 1.00%
- ----------------------------------------------------------------------------------
Class 529-C 0.25 0.75 1.00
- ----------------------------------------------------------------------------------
Class F-1 0.25 -- 0.50
- ----------------------------------------------------------------------------------
Class 529-F-1 0.25 -- 0.50
- ----------------------------------------------------------------------------------
Class 529-E 0.25 0.25 0.75
- ----------------------------------------------------------------------------------
Class R-1 0.25 0.75 1.00
- ----------------------------------------------------------------------------------
Class R-2 0.25 0.50 1.00
- ----------------------------------------------------------------------------------
Class R-3 0.25 0.25 0.75
- ----------------------------------------------------------------------------------
Class R-4 0.25 -- 0.50
- ----------------------------------------------------------------------------------

1 Amounts in these columns represent the amounts approved by the board of
directors under the applicable Plan.
2 The fund may annually expend the amounts set forth in this column under
the current Plans with the approval of the board of directors.

During the 2008 fiscal year, 12b-1 expenses accrued and paid, and if applicable,
unpaid, were:

12B-1 UNPAID LIABILITY
12B-1 EXPENSES OUTSTANDING
- ------------------------------------------------------------------------------

CLASS A $80,557,000 $4,352,000
- ------------------------------------------------------------------------------
CLASS B 13,828,000 773,000
- ------------------------------------------------------------------------------
CLASS C 19,214,000 1,224,000
- ------------------------------------------------------------------------------
CLASS F-1 8,841,000 1,266,000
- ------------------------------------------------------------------------------
CLASS 529-A 1,199,000 76,000
- ------------------------------------------------------------------------------
CLASS 529-B 719,000 47,000
- ------------------------------------------------------------------------------
CLASS 529-C 1,855,000 134,000
- ------------------------------------------------------------------------------
CLASS 529-E 136,000 9,000
- ------------------------------------------------------------------------------
CLASS 529-F-1 -- --
- ------------------------------------------------------------------------------
CLASS R-1 655,000 57,000
- ------------------------------------------------------------------------------
CLASS R-2 3,405,000 230,000
- ------------------------------------------------------------------------------
CLASS R-3 6,137,000 450,000
- ------------------------------------------------------------------------------
CLASS R-4 2,609,000 207,000
- ------------------------------------------------------------------------------

Fundamental Investors -- Page 26
<PAGE>

Approval of the Plans -- As required by rule 12b-1 and the 1940 Act, the Plans
(together with the Principal Underwriting Agreement) have been approved by the
full board of directors and separately by a majority of the independent
directors of the fund who have no direct or indirect financial interest in the
operation of the Plans or the Principal Underwriting Agreement. In addition, the
selection and nomination of independent directors of the fund are committed to
the discretion of the independent directors during the existence of the Plans.

Potential benefits of the Plans to the fund include quality shareholder
services, savings to the fund in transfer agency costs, and benefits to the
investment process from growth or stability of assets. The Plans may not be
amended to materially increase the amount spent for distribution without
shareholder approval. Plan expenses are reviewed quarterly by the board of
directors and the Plans must be renewed annually by the board of directors.

FEE TO VIRGINIA COLLEGE SAVINGS PLAN -- With respect to Class 529 Shares, as
compensation for its oversight and administration, Virginia College Savings Plan
receives a quarterly fee accrued daily and calculated at the annual rate of
0.10% on the first $30 billion of the net assets invested in Class 529 Shares of
the American Funds, 0.09% on net assets between $30 billion and $60 billion,
0.08% on net assets between $60 billion and $90 billion, 0.07% on net assets
between $90 billion and $120 billion, and 0.06% on net assets between $120
billion and $150 billion. The fee for any given calendar quarter is accrued and
calculated on the basis of average net assets of Class 529 Shares of the
American Funds for the last month of the prior calendar quarter.

OTHER COMPENSATION TO DEALERS -- As of October 2008, the top dealers (or their
affiliates) that American Funds Distributors anticipates will receive additional
compensation (as described in the prospectus) include:

AIG Advisors Group
Advantage Capital Corporation
AIG Financial Advisors, Inc.
American General Securities Incorporated
FSC Securities Corporation
Royal Alliance Associates, Inc.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc.
Cambridge Investment Research, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Deutsche Bank Securities Inc.
Edward Jones

Fundamental Investors -- Page 27
<PAGE>

Genworth Financial Securities Corporation
Hefren-Tillotson, Inc.
HTK / Janney Montgomery Group
Hornor, Townsend & Kent, Inc.
Janney Montgomery Scott LLC
ING Advisors Network Inc.
Bancnorth Investment Group, Inc.
Financial Network Investment Corporation
Guaranty Brokerage Services, Inc.
ING Financial Partners, Inc.
Multi-Financial Securities Corporation
Primevest Financial Services, Inc.
Intersecurities / Transamerica
InterSecurities, Inc.
Transamerica Financial Advisors, Inc.
JJB Hilliard/PNC Bank
J.J.B. Hilliard, W.L. Lyons, Inc.
PNC Bank, National Association
PNC Investments LLC
Lincoln Financial Advisors Corporation
LPL Group
Associated Securities Corp.
LPL Financial Corporation
Mutual Service Corporation
Uvest Investment Services
Waterstone Financial Group, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Metlife Enterprises
Metlife Securities Inc.
New England Securities
Tower Square Securities
Walnut Street Securities, Inc.
MML Investors Services, Inc.
Morgan Keegan & Company, Inc.
Morgan Stanley & Co., Incorporated
National Planning Holdings Inc.
Invest Financial Corporation
Investment Centers of America, Inc.
National Planning Corporation
SII Investments, Inc.
NFP Securities, Inc.
Northwestern Mutual Investment Services, LLC
Park Avenue Securities LLC
Princor Financial Services Corporation
Raymond James Group
Raymond James & Associates, Inc.
Raymond James Financial Services Inc.
RBC Dain Rauscher Inc.
Robert W. Baird & Co. Incorporated

Fundamental Investors -- Page 28
<PAGE>

Securian / C.R.I.
CRI Securities, LLC
Securian Financial Services, Inc.
Smith Barney
Legg Mason
Primerica Financial Services
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
Wachovia Group
A. G. Edwards, a Division of Wachovia Securities, LLC
First Clearing LLC
Wachovia Securities Financial Network, LLC
Wachovia Securities Investment Services Group
Wachovia Securities Latin American Channel
Wachovia Securities Private Client Group
Wells Fargo Investments, LLC

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. Purchases and sales of equity securities on a securities
exchange or an over-the-counter market are effected through broker-dealers who
receive commissions for their services. Generally, commissions relating to
securities traded on foreign exchanges will be higher than commissions relating
to securities traded on U.S. exchanges and may not be subject to negotiation.
Equity securities may also be purchased from underwriters at prices that include
underwriting fees. Purchases and sales of fixed-income securities are generally
made with an issuer or a primary market-maker acting as principal with no stated
brokerage commission. The price paid to an underwriter for fixed-income
securities includes underwriting fees. Prices for fixed-income securities in
secondary trades usually include undisclosed compensation to the market-maker
reflecting the spread between the bid and ask prices for the securities.

In selecting broker-dealers, the investment adviser strives to obtain "best
execution" (the most favorable total price reasonably attainable under the
circumstances) for the fund's portfolio transactions, taking into account a
variety of factors. These factors include the size and type of transaction, the
nature and character of the markets for the security to be purchased or sold,
the cost, quality and reliability of the executions and the broker-dealer's
ability to offer liquidity and anonymity. The investment adviser considers these
factors, which involve qualitative judgments, when selecting broker-dealers and
execution venues for fund portfolio transactions. The investment adviser views
best execution as a process that should be evaluated over time as part of an
overall relationship with particular broker-dealer firms rather than on a
trade-by-trade basis. The fund does not consider the investment adviser as
having an obligation to obtain the lowest commission rate available for a
portfolio transaction to the exclusion of price, service and qualitative
considerations.

The investment adviser may execute portfolio transactions with broker-dealers
who provide certain brokerage and/or investment research services to it, but
only when in the investment adviser's judgment the broker-dealer is capable of
providing best execution for that transaction. The receipt of these services
permits the investment adviser to supplement its own research and analysis and
makes available the views of, and information from, individuals and the research
staffs of other firms. Such views and information may be provided in the form of
written reports,

Fundamental Investors -- Page 29
<PAGE>

telephone contacts and meetings with securities analysts. These services may
include, among other things, reports and other communications with respect to
individual companies, industries, countries and regions, economic, political and
legal developments, as well as scheduling meetings with corporate executives and
seminars and conferences related to relevant subject matters. The investment
adviser considers these services to be supplemental to its own internal research
efforts and therefore the receipt of investment research from broker-dealers
does not tend to reduce the expenses involved in the investment adviser's
research efforts. If broker-dealers were to discontinue providing such services
it is unlikely the investment adviser would attempt to replicate them on its
own, in part because they would then no longer provide an independent,
supplemental viewpoint. Nonetheless, if it were to attempt to do so, the
investment adviser would incur substantial additional costs. Research services
that the investment adviser receives from broker-dealers may be used by the
investment adviser in servicing the fund and other funds and accounts that it
advises; however, not all such services will necessarily benefit the fund.

The investment adviser may pay commissions in excess of what other
broker-dealers might have charged - including on an execution-only basis - for
certain portfolio transactions in recognition of brokerage and/or investment
research services provided by a broker-dealer. In this regard, the investment
adviser has adopted a brokerage allocation procedure consistent with the
requirements of Section 28(e) of the U.S. Securities Exchange Act of 1934.
Section 28(e) permits an investment adviser to cause an account to pay a higher
commission to a broker-dealer that provides certain brokerage and/or investment
research services to the investment adviser, if the investment adviser makes a
good faith determination that such commissions are reasonable in relation to the
value of the services provided by such broker-dealer to the investment adviser
in terms of that particular transaction or the investment adviser's overall
responsibility to the fund and other accounts that it advises. Certain brokerage
and/or investment research services may not necessarily benefit all accounts
paying commissions to each such broker-dealer; therefore, the investment adviser
assesses the reasonableness of commissions in light of the total brokerage and
investment research services provided by each particular broker-dealer.

In accordance with its internal brokerage allocation procedure, each equity
investment division of the investment adviser periodically assesses the
brokerage and investment research services provided by each broker-dealer from
which it receives such services. Using its judgment, each equity investment
division of the investment adviser then creates lists with suggested levels of
commissions for particular broker-dealers and provides those lists to its
trading desks. Neither the investment adviser nor the fund incurs any obligation
to any broker-dealer to pay for research by generating trading commissions. The
actual level of business received by any broker-dealer may be less than the
suggested level of commissions and can, and often does, exceed the suggested
level in the normal course of business. As part of its ongoing relationships
with broker-dealers, the investment adviser routinely meets with firms,
typically at the firm's request, to discuss the level and quality of the
brokerage and research services provided, as well as the perceived value and
cost of such services. In valuing the brokerage and investment research services
the investment adviser receives from broker-dealers in connection with its good
faith determination of reasonableness, the investment adviser does not attribute
a dollar value to such services, but rather takes various factors into
consideration, including the quantity, quality and usefulness of the services to
the investment adviser.

The investment adviser seeks, on an ongoing basis, to determine what the
reasonable levels of commission rates are in the marketplace. The investment
adviser takes various considerations into account when evaluating such
reasonableness, including, (a) rates quoted by broker--

Fundamental Investors -- Page 30
<PAGE>

dealers, (b) the size of a particular transaction in terms of the number of
shares and dollar amount, (c) the complexity of a particular transaction, (d)
the nature and character of the markets on which a particular trade takes place,
(e) the ability of a broker-dealer to provide anonymity while executing trades,
(f) the ability of a broker-dealer to execute large trades while minimizing
market impact, (g) the extent to which a broker-dealer has put its own capital
at risk, (h) the level and type of business done with a particular broker-dealer
over a period of time, (i) historical commission rates, and (j) commission rates
that other institutional investors are paying.

When executing portfolio transactions in the same equity security for the funds
and accounts, or portions of funds and accounts, over which the investment
adviser, through its equity investment divisions, has investment discretion,
each of the investment divisions will normally aggregate its respective
purchases or sales and execute them as part of the same transaction or series of
transactions. When executing portfolio transactions in the same fixed-income
security for the fund and the other funds or accounts over which it or one of
its affiliated companies has investment discretion, the investment adviser will
normally aggregate such purchases or sales and execute them as part of the same
transaction or series of transactions. The objective of aggregating purchases
and sales of a security is to allocate executions in an equitable manner among
the funds and other accounts that have concurrently authorized a transaction in
such security.

The investment adviser may place orders for the fund's portfolio transactions
with broker-dealers who have sold shares of the funds managed by the investment
adviser or its affiliated companies; however, it does not consider whether a
broker-dealer has sold shares of the funds managed by the investment adviser or
its affiliated companies when placing any such orders for the fund's portfolio
transactions.

Brokerage commissions paid on portfolio transactions for the fiscal years ended
December 31, 2008, 2007 and 2006 amounted to $23,964,000, $18,379,000 and
$17,751,000, respectively. The volume of trading activity increased during 2008,
resulting in an increase in brokerage commissions paid on portfolio
transactions.

The fund is required to disclose information regarding investments in the
securities of its "regular" broker-dealers (or parent companies of its regular
broker-dealers) that derive more than 15% of their revenue from broker-dealer,
underwriter or investment adviser activities. A regular broker-dealer is (a) one
of the 10 broker-dealers that received from the fund the largest amount of
brokerage commissions by participating, directly or indirectly, in the fund's
portfolio transactions during the fund's most recent fiscal year; (b) one of the
10 broker-dealers that engaged as principal in the largest dollar amount of
portfolio transactions of the fund during the fund's most recent fiscal year; or
(c) one of the 10 broker-dealers that sold the largest amount of securities of
the fund during the fund's most recent fiscal year.

At the end of the fund's most recent fiscal year, the fund's regular
broker-dealers included Citigroup Global Markets Inc. and J.P. Morgan Securities
Inc. As of the fund's most recent fiscal year-end, the fund held equity
securities of Citigroup Inc. in the amount of $193,919,000 and JPMorgan Chase &
Co. in the amount of $252,240,000.

DISCLOSURE OF PORTFOLIO HOLDINGS

The fund's investment adviser, on behalf of the fund, has adopted policies and
procedures with respect to the disclosure of information about fund portfolio
securities. These policies and

Fundamental Investors -- Page 31
<PAGE>

procedures have been reviewed by the fund's board of directors and compliance
will be periodically assessed by the board in connection with reporting from the
fund's Chief Compliance Officer.

Under these policies and procedures, the fund's complete list of portfolio
holdings available for public disclosure, dated as of the end of each calendar
quarter, is permitted to be posted on the American Funds website no earlier than
the tenth day after such calendar quarter. In practice, the public portfolio
typically is posted on the website approximately 45 days after the end of the
calendar quarter. In addition, the fund's list of top 10 equity portfolio
holdings measured by percentage of net assets invested, dated as of the end of
each calendar month, is permitted to be posted on the American Funds website no
earlier than the tenth day after such month. Such portfolio holdings information
may then be disclosed to any person pursuant to an ongoing arrangement to
disclose portfolio holdings information to such person no earlier than one day
after the day on which the information is posted on the American Funds website.
The fund's custodian, outside counsel and auditor, each of which requires
portfolio holdings information for legitimate business and fund oversight
purposes, may receive the information earlier.

Affiliated persons of the fund, including officers of the fund and employees of
the investment adviser and its affiliates, who receive portfolio holdings
information are subject to restrictions and limitations on the use and handling
of such information pursuant to applicable codes of ethics, including
requirements not to trade in securities based on confidential and proprietary
investment information, to maintain the confidentiality of such information, and
to preclear securities trades and report securities transactions activity, as
applicable. For more information on these restrictions and limitations, please
see the "Code of Ethics" section in this statement of additional information and
the Code of Ethics. Third party service providers of the fund, as described in
this statement of additional information, receiving such information are subject
to confidentiality obligations. When portfolio holdings information is disclosed
other than through the American Funds website to persons not affiliated with the
fund (which, as described above, would typically occur no earlier than one day
after the day on which the information is posted on the American Funds website),
such persons will be bound by agreements (including confidentiality agreements)
or fiduciary obligations that restrict and limit their use of the information to
legitimate business uses only. Neither the fund nor its investment adviser or
any affiliate thereof receives compensation or other consideration in connection
with the disclosure of information about portfolio securities.

Subject to board policies, the authority to disclose a fund's portfolio
holdings, and to establish policies with respect to such disclosure, resides
with the appropriate investment-related committees of the fund's investment
adviser. In exercising their authority, the committees determine whether
disclosure of information about the fund's portfolio securities is appropriate
and in the best interest of fund shareholders. The investment adviser has
implemented policies and procedures to address conflicts of interest that may
arise from the disclosure of fund holdings. For example, the investment
adviser's code of ethics specifically requires, among other things, the
safeguarding of information about fund holdings and contains prohibitions
designed to prevent the personal use of confidential, proprietary investment
information in a way that would conflict with fund transactions. In addition,
the investment adviser believes that its current policy of not selling portfolio
holdings information and not disclosing such information to unaffiliated third
parties until such holdings have been made public on the American Funds website
(other than to certain fund service providers for legitimate business and fund
oversight purposes) helps reduce potential conflicts of interest between fund
shareholders and the investment adviser and its affiliates.

Fundamental Investors -- Page 32
<PAGE>

Shares are purchased at the offering price or sold at the net asset value price
next determined after the purchase or sell order is received and accepted by the
fund or the Transfer Agent; the offering or net asset value 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 or their authorized designees,
accepted by the Principal Underwriter, the Transfer Agent, a dealer or any of
their designees. In the case of orders sent directly to the fund or the Transfer
Agent, an investment dealer should be indicated. The dealer is responsible for
promptly transmitting purchase and sell orders to the Principal Underwriter.

Orders received by the investment dealer or authorized designee, the Transfer
Agent or the fund after the time of the determination of the net asset value
will be entered at the next calculated offering price. Note that investment
dealers or other intermediaries may have their own rules about share
transactions and may have earlier cut-off times than those of the fund. For more
information about how to purchase through your intermediary, contact your
intermediary directly.

Prices that appear in the newspaper do not always indicate prices at which you
will be purchasing and redeeming shares of the fund, since such prices generally
reflect the previous day's closing price, while 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
as of approximately 4 p.m. New York time, which is the normal close of trading
on the New York Stock Exchange, each day the Exchange is open. If, for example,
the Exchange closes at 1 p.m., the fund's share price would still be determined
as of 4 p.m. New York time. The New York Stock Exchange is currently closed on
weekends and on the following holidays: New Year's Day; Martin Luther King, Jr.
Day; Presidents' Day; Good Friday; Memorial Day; Independence Day; Labor Day;
Thanksgiving; and Christmas Day. Each share class of the fund has a separately
calculated net asset value (and share price).

All portfolio securities of funds managed by Capital Research and Management
Company (other than money market funds) are valued, and the net asset values per
share for each share class are determined, as indicated below. The fund follows
standard industry practice by typically reflecting changes in its holdings of
portfolio securities on the first business day following a portfolio trade.

1. Equity securities, including depositary receipts, are valued at the
official closing price of, or the last reported sale price on, the exchange or
market on which such securities are traded, as of the close of business on the
day the securities are being valued or, lacking any sales, at the last available
bid price. Prices for each security are taken from the principal exchange or
market in which the security trades. Fixed-income securities are valued at
prices obtained from one or more independent pricing vendors, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued in good faith at the mean
quoted bid and asked prices that are reasonably and timely available (or bid
prices, if asked prices are not available) or at prices for securities of
comparable maturity, quality and type. The pricing vendors base bond prices on,
among other things, valuation matrices which may incorporate dealer-supplied
valuations, electronic data processing techniques and an evaluation of the
yield curve as of approximately 3 p.m. New York time. The fund's investment
adviser performs certain checks on these prices prior to calculation of the
fund's net asset value.

Securities with both fixed-income and equity characteristics (e.g., convertible
bonds, preferred stocks, units comprised of more than one type of security,
etc.), or equity securities traded prin-

Fundamental Investors -- Page 33
<PAGE>

cipally among fixed-income dealers, are valued in the manner described above for
either equity or fixed-income securities, depending on which method is deemed
most appropriate by the investment adviser.

Securities with original maturities of one year or less having 60 days or less
to maturity are amortized to maturity based on their cost if acquired within 60
days of maturity, or if already held on the 60th day, based on the value
determined on the 61st day. Forward currency contracts are valued at the mean of
representative quoted bid and asked prices.

Assets or liabilities initially expressed in terms of currencies other than U.S.
dollars are translated prior to the next determination of the net asset value of
the fund's shares into U.S. dollars at the prevailing market rates.

Securities and assets for which market quotations are not readily available or
are considered unreliable are valued at fair value as determined in good faith
under policies approved by the fund's board. Subject to board oversight, the
fund's board has delegated the obligation to make fair valuation determinations
to a valuation committee established by the fund's investment adviser. The board
receives regular reports describing fair-valued securities and the valuation
methods used.

The valuation committee has adopted guidelines and procedures (consistent with
SEC rules and guidance) to consider certain relevant principles and factors
when making all fair value determinations. As a general principle,
securities lacking readily available market quotations, or that have quotations
that are considered unreliable by the investment adviser, are valued in good
faith by the valuation committee based upon what the fund might reasonably
expect to receive upon their current sale. Fair valuations and valuations of
investments that are not actively trading involve judgment and may differ
materially from valuations that would have been used had greater market
activity occurred. The valuation committee considers relevant indications of value
that are reasonably and timely available to it in determining the fair value to be
assigned to a particular security, such as the type and cost of the security,
contractual or legal restrictions on resale of the security, relevant financial
or business developments of the issuer, actively traded similar or related
securities, conversion or exchange rights on the security, related corporate
actions, significant events occurring after the close of trading in the security
and changes in overall market conditions. The valuation committee employs
additional fair value procedures to address issues related to equity holdings
of applicable fund portfolios outside the United States. Securities owned by
these funds trade in markets that open and close at different times, reflecting
time zone differences. If significant events occur after the close of a market
(and before these fund's net asset values are next determined) which affect the
value of portfolio securities, appropriate adjustments from closing market
prices may be made to reflect these events. Events of this type could include,
for example, earthquakes and other natural disasters or significant price
changes in other markets (e.g., U.S. stock markets).

2. Each class of shares represents interests in the same portfolio of
investments and is identical in all respects to each other class, except for
differences relating to distribution, service and other charges and expenses,
certain voting rights, differences relating to eligible investors, the
designation of each class of shares, conversion features and exchange
privileges. Expenses attributable to the fund, but not to a particular class of
shares, are borne by each class pro rata based on relative aggregate net assets
of the classes. Expenses directly attributable to a class of shares are borne by
that class of shares. Liabilities, including accruals of taxes and other expense
items attributable to particular share classes, are deducted from total assets
attributable to such share classes.

Fundamental Investors -- Page 34
<PAGE>

3. Net assets so obtained for each share class are then divided by the total
number of shares outstanding of that share class, and the result, rounded to the
nearest cent, is the net asset value per share for that share class.

TAXES AND DISTRIBUTIONS

FUND TAXATION -- The fund has elected to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code (the "Code"). A
regulated investment company qualifying under Subchapter M of the Code is
required to distribute to its shareholders at least 90% of its investment
company taxable income (including the excess of net short-term capital gain over
net long-term capital losses) and generally is not subject to federal income tax
to the extent that it distributes annually 100% of its investment company
taxable income and net realized capital gains in the manner required under the
Code. The fund intends to distribute annually all of its investment company
taxable income and net realized capital gains and therefore does not expect to
pay federal income tax, although in certain circumstances the fund may determine
that it is in the interest of shareholders to distribute less than that amount.

To be treated as a regulated investment company under Subchapter M of the Code,
the fund must also (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, net income from certain
publicly traded partnerships and gains from the sale or other disposition of
securities or foreign currencies, or other income (including, but not limited
to, gains from options, futures or forward contracts) derived with respect to
the business of investing in such securities or currencies, and (b) 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 securities of other regulated investment companies, and other
securities (for purposes of this calculation, generally limited in respect of
any one issuer, to an amount not greater than 5% of the market value 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), two or more issuers which the fund
controls and which are determined to be engaged in the same or similar trades or
businesses or the securities of certain publicly traded partnerships.

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 (a) 98% of ordinary income (generally net investment income)
for the calendar year, (b) 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
(c) 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 (a) amounts actually distributed
by the fund from its current year's ordinary income and capital gain net income
and (b) any amount on which the fund pays income tax during the periods
described above. Although the fund intends to distribute its net investment
income and net capital gains so as to avoid excise tax liability, the fund may
determine that it is in the interest of shareholders to distribute a lesser
amount.

Fundamental Investors -- Page 35
<PAGE>

The following information may not apply to you if you hold fund shares in a
tax-deferred account, such as a retirement plan or education savings account.
Please see your tax adviser for more information.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS -- Dividends and capital gain
distributions on fund shares will be reinvested in shares of the fund of the
same class, unless shareholders indicate in writing that they wish to receive
them in cash or in shares of the same class of other American Funds, as provided
in the prospectus. Dividends and capital gain distributions by 529 share classes
will be automatically reinvested.

Distributions of investment company taxable income and net realized capital
gains to shareholders will be taxable whether received in shares or in cash,
unless such shareholders are exempt from taxation. Shareholders electing to
receive distributions in the form of additional shares will have a cost basis
for federal income tax purposes in each share so received equal to the net asset
value of that share on the reinvestment date. Dividends and capital gain
distributions by the fund to a tax-deferred retirement plan account are not
taxable currently.

DIVIDENDS -- The fund intends to follow the practice of distributing
substantially all of its investment company taxable income. Investment
company taxable income generally includes dividends, interest, net
short-term capital gains in excess of net long-term capital losses, and
certain foreign currency gains, if any, less expenses and certain foreign
currency losses. To the extent the fund invests in stock of domestic and
certain foreign corporations and meets the applicable holding period
requirement, it may receive "qualified dividends". The fund will designate
the amount of "qualified dividends" to its shareholders in a notice sent
within 60 days of the close of its fiscal year and will report "qualified
dividends" to shareholders on Form 1099-DIV.

Under the Code, gains or losses attributable to fluctuations in exchange
rates that occur between the time the fund accrues receivables or
liabilities denominated in a foreign currency and the time the fund
actually collects such receivables, or pays such liabilities, generally are
treated as ordinary income or ordinary loss. Similarly, on disposition of
debt securities denominated in a foreign currency and on disposition of
certain futures contracts, forward contracts and options, gains or losses
attributable to fluctuations in the value of foreign currency between the
date of acquisition of the security or contract and the date of disposition
are also treated as ordinary gain or loss. These gains or losses, referred
to under the Code as Section 988 gains or losses, may increase or decrease
the amount of the fund's investment company taxable income to be
distributed to its shareholders as ordinary income.

If the fund invests in stock of certain passive foreign investment
companies, the fund may be subject to U.S. federal income taxation on a
portion of any "excess distribution" with respect to, or gain from the
disposition of, such stock. The tax would be determined by allocating such
distribution or gain ratably to each day of the fund's holding period for
the stock. The distribution or gain so allocated to any taxable year of the
fund, other than the taxable year of the excess distribution or
disposition, would be taxed to the fund at the highest ordinary income rate
in effect for such year, and the tax would be further increased by an
interest charge to reflect the value of the tax deferral deemed to have
resulted from the ownership of the foreign company's stock. Any amount of
distribution or gain allocated to the taxable year of the distribution or
disposition would be included in the

Fundamental Investors -- Page 36
<PAGE>

fund's investment company taxable income and, accordingly, would not be
taxable to the fund to the extent distributed by the fund as a dividend to
its shareholders.

To avoid such tax and interest, the fund intends to elect to treat these
securities as sold on the last day of its fiscal year and recognize any
gains for tax purposes at that time. Under this election, deductions for
losses are allowable only to the extent of any prior recognized gains, and
both gains and losses will be treated as ordinary income or loss. The fund
will be required to distribute any resulting income, even though it has not
sold the security and received cash to pay such distributions. Upon
disposition of these securities, any gain recognized is treated as ordinary
income and loss is treated as ordinary loss to the extent of any prior
recognized gain.

Dividends from domestic corporations are expected to comprise some portion
of the fund's gross income. To the extent that such dividends constitute
any of the fund's gross income, a portion of the income distributions of
the fund may be eligible for the deduction for dividends received by
corporations. Corporate shareholders will be informed of the portion of
dividends that so qualifies. The dividends-received deduction is reduced to
the extent that either the fund shares, or the underlying shares of stock
held by the fund, with respect to which dividends are received, are treated
as debt-financed under federal income tax law, and is eliminated if the
shares are deemed to have been held by the shareholder or the fund, as the
case may be, for less than 46 days during the 91-day period beginning on
the date that is 45 days before the date on which the shares become
ex-dividend. Capital gain distributions are not eligible for the
dividends-received deduction.

A portion of the difference between the issue price of zero coupon
securities and their face value (original issue discount) is considered to
be income to the fund each year, even though the fund will not receive cash
interest payments from these securities. This original issue discount
(imputed income) will comprise a part of the investment company taxable
income of the fund that must be distributed to shareholders in order to
maintain the qualification of the fund as a regulated investment company
and to avoid federal income taxation at the level of the fund.

The price of a bond purchased after its original issuance may reflect
market discount which, depending on the particular circumstances, may
affect the tax character and amount of income required to be recognized by
a fund holding the bond. In determining whether a bond is purchased with
market discount, certain de minimis rules apply.

Dividend and interest income received by the fund from sources outside the
United States may be subject to withholding and other taxes imposed by such
foreign jurisdictions. Tax conventions between certain countries and the
United States, however, may reduce or eliminate these foreign taxes. Some
foreign countries impose taxes on capital gains with respect to investments
by foreign investors.

CAPITAL GAIN DISTRIBUTIONS -- The fund also intends to follow the practice
of distributing the entire excess of net realized long-term capital gains
over net realized short-term capital losses. Net capital gains for a fiscal
year are computed by taking into account any capital loss carryforward of
the fund.

Fundamental Investors -- Page 37
<PAGE>

If any net long-term capital gains in excess of net short-term capital
losses are retained by the fund for reinvestment, requiring federal income
taxes to be paid thereon by the fund, the fund intends to elect to treat
such capital gains as having been distributed to shareholders. As a result,
each shareholder will report such capital gains as long-term capital gains
taxable to individual shareholders at a maximum 15% capital gains rate,
will be able to claim a pro rata share of federal income taxes paid by the
fund on such gains as a credit against personal federal income tax
liability, and will be entitled to increase the adjusted tax basis on fund
shares by the difference between a pro rata share of the retained gains and
such shareholder's related tax credit.

SHAREHOLDER TAXATION -- In January of each year, individual shareholders holding
fund shares in taxable accounts will receive a statement of the federal income
tax status of all distributions. Shareholders of the fund also may be subject to
state and local taxes on distributions received from the fund.

DIVIDENDS -- Fund dividends are taxable to shareholders as ordinary income.
All or a portion of a fund's dividend distribution may be a "qualified
dividend." If the fund meets the applicable holding period requirement, it
will distribute dividends derived from qualified corporation dividends to
shareholders as qualified dividends. Interest income from bonds and money
market instruments and nonqualified foreign dividends will be distributed
to shareholders as nonqualified fund dividends. The fund will report on
Form 1099-DIV the amount of each shareholder's dividend that may be treated
as a qualified dividend. If a shareholder other than a corporation meets
the requisite holding period requirement, qualified dividends are taxable
at a maximum rate of 15%.

CAPITAL GAINS -- Distributions of the excess of net long-term capital gains
over net short-term capital losses that the fund properly designates as
"capital gain dividends" generally will be taxable as long-term capital
gain. Regardless of the length of time the shares of the fund have been
held by a shareholder, a capital gain distribution by the fund is subject
to a maximum tax rate of 15%. Any loss realized upon the redemption of
shares held at the time of redemption for six months or less from the date
of their purchase will be treated as a long-term capital loss to the extent
of any amounts treated as distributions of long-term capital gains during
such six-month period.

Distributions by the fund result in a reduction in the net asset value of the
fund's shares. Investors should consider the tax implications of buying shares
just prior to a distribution. The price of shares purchased at that time
includes the amount of the forthcoming distribution. Those purchasing just prior
to a distribution will subsequently receive a partial return of their investment
capital upon payment of the distribution, which will be taxable to them.

Redemptions of shares, including exchanges for shares of other American Funds,
may result in federal, state and local tax consequences (gain or loss) to the
shareholder.

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 will not be taken into account (to the extent
such previous sales charges do not exceed the reduction in sales charges) for
the purposes 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 fund(s).

Fundamental Investors -- Page 38
<PAGE>

Any loss realized on a redemption or exchange of shares of the 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. Any loss disallowed under this rule will be added to the
shareholder's tax basis in the new shares purchased.

The fund will be required to report to the IRS all distributions of investment
company taxable income and capital gains as well as gross proceeds from the
redemption or exchange of fund shares, except in the case of certain exempt
shareholders. Under the backup withholding provisions of Section 3406 of the
Code, distributions of investment company taxable income and capital gains and
proceeds from the redemption or exchange of a regulated investment company may
be subject to backup withholding of federal income tax in the case of non-exempt
U.S. shareholders who fail to furnish the investment company with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. Withholding may also be required if the fund
is notified by the IRS or a broker that the taxpayer identification number
furnished by the shareholder is incorrect or that the shareholder has previously
failed to report interest or dividend income. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld.

The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. persons (i.e., U.S. citizens and residents and
U.S. corporations, partnerships, trusts and estates). Each shareholder who is
not a U.S. person should consider the U.S. and foreign tax consequences of
ownership of shares of the fund, including the possibility that such a
shareholder may be subject to a U.S. withholding tax at a rate of 30% (or a
lower rate under an applicable income tax treaty) on dividend income received by
the shareholder.

Shareholders should consult their tax advisers about the application of federal,
state and local tax law in light of their particular situation.

Fundamental Investors -- Page 39
<PAGE>

UNLESS OTHERWISE NOTED, ALL REFERENCES IN THE FOLLOWING PAGES TO CLASS A, B, C
OR F-1 SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR
529-F-1 SHARES. CLASS 529 SHAREHOLDERS SHOULD ALSO REFER TO THE APPLICABLE
PROGRAM DESCRIPTION FOR INFORMATION ON POLICIES AND SERVICES SPECIFICALLY
RELATING TO THESE ACCOUNTS. SHAREHOLDERS HOLDING SHARES THROUGH AN ELIGIBLE
RETIREMENT PLAN SHOULD CONTACT THEIR PLAN'S ADMINISTRATOR OR RECORDKEEPER FOR
INFORMATION REGARDING PURCHASES, SALES AND EXCHANGES.

PURCHASE AND EXCHANGE OF SHARES

PURCHASES BY INDIVIDUALS -- As described in the prospectus, you may generally
open an account and purchase fund shares by contacting a financial adviser or
investment dealer authorized to sell the fund's shares. You may make investments
by any of the following means:

CONTACTING YOUR FINANCIAL ADVISER -- Deliver or mail a check to your
financial adviser.

BY MAIL -- For initial investments, you may mail a check, made payable to
the fund, directly to the address indicated on the account application.
Please indicate an investment dealer on the account application. You may
make additional investments by filling out the "Account Additions" form at
the bottom of a recent account statement and mailing the form, along with a
check made payable to the fund, using the envelope provided with your
account statement.

The amount of time it takes for us to receive regular U.S. postal mail may
vary and there is no assurance that we will receive such mail on the day
you expect. Mailing addresses for regular U.S. postal mail can be found in
the prospectus. To send investments or correspondence to us via overnight
mail or courier service, use either of the following addresses:

American Funds
8332 Woodfield Crossing Blvd.
Indianapolis, IN 46240-2482

American Funds
5300 Robin Hood Rd.
Norfolk, VA 23513-2407

BY TELEPHONE -- Using the American FundsLine. Please see the "Shareholder
account services and privileges" section of this statement of additional
information for more information regarding this service.

BY INTERNET -- Using americanfunds.com. Please see the "Shareholder account
services and privileges" section of this statement of additional
information for more information regarding this service.

BY WIRE -- If you are making a wire transfer, instruct your bank to wire
funds to:

Wells Fargo Bank
ABA Routing No. 121000248
Account No. 4600-076178

Fundamental Investors -- Page 40
<PAGE>

Your bank should include the following information when wiring funds:

For credit to the account of:
American Funds Service Company
(fund's name)

For further credit to:
(shareholder's fund account number)
(shareholder's name)

You may contact American Funds Service Company at 800/421-0180 if you have
questions about making wire transfers.

OTHER PURCHASE INFORMATION -- The Principal Underwriter will not knowingly sell
shares of the fund directly or indirectly to any person or entity, where, after
the sale, such person or entity would own beneficially directly or indirectly
more than 3.0% of the outstanding shares of the fund without the consent of a
majority of the fund's board.

Class 529 shares may be purchased only through CollegeAmerica by investors
establishing qualified higher education savings accounts. Class 529-E shares may
be purchased only by investors participating in CollegeAmerica through an
eligible employer plan. Class R-5 shares are also available to clients of the
Personal Investment Management group of Capital Guardian Trust Company who do
not have an intermediary associated with their accounts. In addition, the
American Funds state tax-exempt funds are qualified for sale only in certain
jurisdictions, and tax-exempt funds in general should not serve as retirement
plan investments. The fund and the Principal Underwriter reserve the right to
reject any purchase order.

Class R-5 and R-6 shares may be made available to certain charitable foundations
organized and maintained by The Capital Group Companies, Inc. or its affiliates.

Beginning May 1, 2009, cash investments received without investment instructions
will be invested in Class A shares of the American Funds Money Market Fund
(rather than The Cash Management Trust of America) pursuant to the policies
described in the "Purchase and exchange of shares" section of the prospectus.

PURCHASE MINIMUMS AND MAXIMUMS -- All investments are subject to the purchase
minimums and maximums described in the prospectus. As noted in the prospectus,
purchase minimums may be waived or reduced in certain cases.

In the case of American Funds non-tax-exempt funds, the initial purchase minimum
of $25 may be waived for the following account types:

. Payroll deduction retirement plan accounts (such as, but not limited
to, 403(b), 401(k), SIMPLE IRA, SARSEP and deferred compensation plan
accounts); and

. Employer-sponsored CollegeAmerica accounts.

The following account types may be established without meeting the initial
purchase minimum:

. Retirement accounts that are funded with employer contributions; and

Fundamental Investors -- Page 41
<PAGE>

. Accounts that are funded with monies set by court decree.

The following account types may be established without meeting the initial
purchase minimum, but shareholders wishing to invest in two or more funds must
meet the normal initial purchase minimum of each fund:

. Accounts that are funded with (a) transfers of assets, (b) rollovers
from retirement plans, (c) rollovers from 529 college savings plans or
(d) required minimum distribution automatic exchanges; and

. American Funds money market fund accounts registered in the name of
clients of Capital Guardian Trust Company's Personal Investment
Management group.

Certain accounts held on the fund's books, known as omnibus accounts, contain
multiple underlying accounts that are invested in shares of the fund. These
underlying accounts are maintained by entities such as financial intermediaries
and are subject to the applicable initial purchase minimums as described in the
prospectus and this statement of additional information. However, in the case
where the entity maintaining these accounts aggregates the accounts' purchase
orders for fund shares, such accounts are not required to meet the fund's
minimum amount for subsequent purchases.

EXCHANGES -- You may only exchange shares into other American Funds within the
same share class. However, exchanges from Class A shares of The Cash Management
Trust of America or American Funds Money Market Fund may be made to Class C shares
of other American Funds for dollar cost averaging purposes. Exchanges are not
permitted from Class A shares of The Cash Management Trust of America or American
Funds Money Market Fund to Class C shares of Intermediate Bond Fund of America,
Limited Term Tax-Exempt Bond Fund of America or Short-Term Bond Fund of America.
Exchange purchases are subject to the minimum investment requirements of the fund
purchased and no sales charge generally applies. However, exchanges of shares
from American Funds 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. Exchanges of Class F shares generally
may only be made through fee-based programs of investment firms that have special
agreements with the fund's distributor and certain registered investment advisers.

You may exchange shares of other classes by contacting the Transfer Agent, by
contacting your investment dealer or financial adviser, by using American
FundsLine or americanfunds.com, or by telephoning 800/421-0180 toll-free, or
faxing (see "American Funds Service Company service areas" in the prospectus for
the appropriate fax numbers) the Transfer Agent. For more information, see
"Shareholder account services and privileges" in this statement of additional
information. THESE TRANSACTIONS HAVE THE SAME TAX CONSEQUENCES AS ORDINARY SALES
AND PURCHASES.

Shares held in employer-sponsored retirement plans may be exchanged into other
American Funds by contacting your plan administrator or recordkeeper. Exchange
redemptions and purchases are processed simultaneously at the share prices next
determined after the exchange order is received (see "Price of shares" in this
statement of additional information).

FREQUENT TRADING OF FUND SHARES -- As noted in the prospectus, certain
redemptions may trigger a purchase block lasting 30 calendar days under the
fund's "purchase blocking policy."

Fundamental Investors -- Page 42
<PAGE>

Under this policy, systematic redemptions will not trigger a purchase block and
systematic purchases will not be prevented. For purposes of this policy,
systematic redemptions include, for example, regular periodic automatic
redemptions and statement of intention escrow share redemptions. Systematic
purchases include, for example, regular periodic automatic purchases and
automatic reinvestments of dividends and capital gain distributions.

OTHER POTENTIALLY ABUSIVE ACTIVITY -- In addition to implementing purchase
blocks, American Funds Service Company will monitor for other types of activity
that could potentially be harmful to the American Funds - for example,
short-term trading activity in multiple funds. When identified, American Funds
Service Company will request that the shareholder discontinue the activity. If
the activity continues, American Funds Service Company will freeze the
shareholder account to prevent all activity other than redemptions of fund
shares.

MOVING BETWEEN SHARE CLASSES

If you wish to "move" your investment between share classes (within the
same fund or between different funds), we generally will process your
request as an exchange of the shares you currently hold for shares in the
new class or fund. Below is more information about how sales charges are
handled for various scenarios.

EXCHANGING CLASS B SHARES FOR CLASS A SHARES -- If you exchange Class B
shares for Class A shares during the contingent deferred sales charge
period you are responsible for paying any applicable deferred sales charges
attributable to those Class B shares, but you will not be required to pay a
Class A sales charge. If, however, you exchange your Class B shares for
Class A shares after the contingent deferred sales charge period, you are
responsible for paying any applicable Class A sales charges.

EXCHANGING CLASS C SHARES FOR CLASS A SHARES -- If you exchange Class C
shares for Class A shares, you are still responsible for paying any Class C
contingent deferred sales charges and applicable Class A sales charges.

EXCHANGING CLASS C SHARES FOR CLASS F SHARES -- If you are part of a
qualified fee-based program and you wish to exchange your Class C shares
for Class F shares to be held in the program, you are still responsible for
paying any applicable Class C contingent deferred sales charges.

EXCHANGING CLASS F SHARES FOR CLASS A SHARES -- You can exchange Class F
shares held in a qualified fee-based program for Class A shares without
paying an initial Class A sales charge if all of the following requirements
are met: (a) you are leaving or have left the fee-based program, (b) you
have held the Class F shares in the program for at least one year, and (c)
you notify American Funds Service Company of your request. If you have
already redeemed your Class F shares, the foregoing requirements apply and
you must purchase Class A shares within 90 days after redeeming your Class
F shares to receive the Class A shares without paying an initial Class A
sales charge.

EXCHANGING CLASS A SHARES FOR CLASS F SHARES -- If you are part of a
qualified fee-based program and you wish to exchange your Class A shares
for Class F shares to be held in the program, any Class A sales charges
(including contingent deferred sales charges) that you paid or are payable
will not be credited back to your account.

Fundamental Investors -- Page 43
<PAGE>

EXCHANGING CLASS A SHARES FOR CLASS R SHARES -- Provided it is eligible to
invest in Class R shares, a retirement plan currently invested in Class A
shares may exchange its shares for Class R shares. Any Class A sales
charges that the retirement plan previously paid will not be credited back
to the plan's account.

EXCHANGING CLASS F-1 SHARES FOR CLASS F-2 SHARES -- If you are part of a
qualified fee-based program that offers Class F-2 shares, you may exchange
your Class F-1 shares for Class F-2 shares to be held in the program.

MOVING BETWEEN OTHER SHARE CLASSES -- If you desire to move your investment
between share classes and the particular scenario is not described in this
statement of additional information, please contact American Funds Service
Company at 800/421-0180 for more information.

NON-REPORTABLE TRANSACTIONS -- Automatic conversions described in the
prospectus will be non-reportable for tax purposes. In addition, except in
the case of a movement between a 529 share class and a non-529 share class,
an exchange of shares from one share class of a fund to another share class
of the same fund will be treated as a non-reportable exchange for tax
purposes, provided that the exchange request is received in writing by
American Funds Service Company and processed as a single transaction.

SALES CHARGES

CLASS A PURCHASES

PURCHASES BY CERTAIN 403(B) PLANS

A 403(b) plan may not invest in Class A, B or C shares on or after January
1, 2009, unless such plan was invested in Class A, B or C shares prior to
that date.

Participant accounts of a 403(b) plan that were treated as an
individual-type plan for sales charge purposes prior to January 1, 2009,
may continue to be treated as accounts of an individual-type plan for sales
charge purposes. Participant accounts of a 403(b) plan that were treated as
an employer-sponsored plan for sales charge purposes prior to January 1,
2009, may continue to be treated as accounts of an employer-sponsored plan
for sales charge purposes. Participant accounts of a 403(b) plan that is
established on or after January 1, 2009 are treated as accounts of an
employer-sponsored plan for sales charge purposes.

PURCHASES BY SEP PLANS AND SIMPLE IRA PLANS

Participant accounts in a Simplified Employee Pension (SEP) plan or a
Savings Incentive Match Plan for Employees of Small Employers IRA (SIMPLE
IRA) plan will be aggregated together for Class A sales charge purposes if
the SEP plan or SIMPLE IRA plan was established after November 15, 2004 by
an employer adopting a prototype plan produced by American Funds
Distributors, Inc. In the case where the employer adopts any other plan
(including, but not limited to, an IRS model agreement), each participant's
account in the plan will be aggregated with the participant's own personal
investments that qualify under the aggregation policy. A SEP plan or SIMPLE
IRA plan with a certain method of

Fundamental Investors -- Page 44
<PAGE>

aggregating participant accounts as of November 15, 2004 may continue with
that method so long as the employer has not modified the plan document
since that date.

OTHER PURCHASES

Pursuant to a determination of eligibility by a vice president or more
senior officer of the Capital Research and Management Company Fund
Administration Unit, or by his or her designee, Class A shares of the
American Funds stock, stock/bond and bond funds may be sold at net asset
value to:

(1) current or retired directors, trustees, officers and advisory board
members of, and certain lawyers who provide services to, the funds
managed by Capital Research and Management Company, current or retired
employees of Washington Management Corporation, current or retired
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) currently registered representatives and assistants directly employed
by such representatives, retired registered representatives with
respect to accounts established while active, or full-time employees
(collectively, "Eligible Persons") (and their (a) spouses or
equivalents if recognized under local law, (b) parents and children,
including parents and children in step and adoptive relationships,
sons-in-law and daughters-in-law, and (c) parents-in-law, if the
Eligible Persons or the spouses, children or parents of the Eligible
Persons are listed in the account registration with the
parents-in-law) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such
dealers), plans for the dealers, and plans that include as
participants only the Eligible Persons, their spouses, parents and/or
children;

(3) currently registered investment advisers ("RIAs") and assistants
directly employed by such RIAs, retired RIAs with respect to accounts
established while active, or full-time employees (collectively,
"Eligible Persons") (and their (a) spouses or equivalents if
recognized under local law, (b) parents and children, including
parents and children in step and adoptive relationships, sons-in-law
and daughters-in-law and (c) parents-in-law, if the Eligible Persons
or the spouses, children or parents of the Eligible Persons are listed
in the account registration with the parents-in-law) of RIA firms that
are authorized to sell shares of the funds, plans for the RIA firms,
and plans that include as participants only the Eligible Persons,
their spouses, parents and/or children;

(4) companies exchanging securities with the fund through a merger,
acquisition or exchange offer;

(5) insurance company separate accounts;

(6) accounts managed by subsidiaries of The Capital Group Companies, Inc.;

(7) The Capital Group Companies, Inc., its affiliated companies and
Washington Management Corporation;

(8) an individual or entity with a substantial business relationship with
The Capital Group Companies, Inc. or its affiliates, or an individual
or entity related or relating to such individual or entity;

Fundamental Investors -- Page 45
<PAGE>

(9) wholesalers and full-time employees directly supporting wholesalers
involved in the distribution of insurance company separate accounts
whose underlying investments are managed by any affiliate of The
Capital Group Companies, Inc.; and

(10) full-time employees of banks that have sales agreements with the
Principal Underwriter, who are solely dedicated to directly supporting
the sale of mutual funds.

Shares are offered at net asset value to these persons and organizations
due to anticipated economies in sales effort and expense. Once an account
is established under this net asset value privilege, additional investments
can be made at net asset value for the life of the account.

TRANSFERS TO COLLEGEAMERICA -- A transfer from the Virginia Prepaid
Education Program/SM/ or the Virginia Education Savings Trust/SM/ to a
CollegeAmerica account will be made with no sales charge. No commission
will be paid to the dealer on such a transfer.

MOVING BETWEEN ACCOUNTS -- Investments in certain account types may be moved to
other account types without incurring additional Class A sales charges. These
transactions include, for example:

. redemption proceeds from a non-retirement account (for example, a
joint tenant account) used to purchase fund shares in an IRA or other
individual-type retirement account;

. required minimum distributions from an IRA or other individual-type
retirement account used to purchase fund shares in a non-retirement
account; and

. death distributions paid to a beneficiary's account that are used by
the beneficiary to purchase fund shares in a different account.

LOAN REPAYMENTS -- Repayments on loans taken from a retirement plan or an
individual-type retirement account are not subject to sales charges if American
Funds Service Company is notified of the repayment.

DEALER COMMISSIONS AND COMPENSATION -- Commissions (up to 1.00%) are paid to
dealers who initiate and are responsible for certain Class A share purchases not
subject to initial sales charges. These purchases consist of purchases of $1
million or more, purchases by employer-sponsored defined contribution-type
retirement plans investing $1 million or more or with 100 or more eligible
employees, and purchases made at net asset value by certain retirement plans,
endowments and foundations with assets of $50 million or more. Commissions on
such investments (other than IRA rollover assets that roll over at no sales
charge under the fund's IRA rollover policy as described in the prospectus) are
paid to dealers at the following rates: 1.00% on amounts of less than $4
million, 0.50% on amounts of at least $4 million but less than $10 million and
0.25% on amounts of at least $10 million. Commissions are based on cumulative
investments over the life of the account with no adjustment for redemptions,
transfers, or market declines. For example, if a shareholder has accumulated
investments in excess of $4 million (but less than $10 million) and subsequently
redeems all or a portion of the account(s), purchases following the redemption
will generate a dealer commission of 0.50%.

Fundamental Investors -- Page 46
<PAGE>

A dealer concession of up to 1% may be paid by the fund under its Class A plan
of distribution to reimburse the Principal Underwriter in connection with dealer
and wholesaler compensation paid by it with respect to investments made with no
initial sales charge.

SALES CHARGE REDUCTIONS AND WAIVERS

REDUCING YOUR CLASS A SALES CHARGE -- As described in the prospectus, there are
various ways to reduce your sales charge when purchasing Class A shares.
Additional information about Class A sales charge reductions is provided below.

STATEMENT OF INTENTION -- By establishing a statement of intention (the
"Statement"), you enter into a nonbinding commitment to purchase shares of
the American Funds (excluding money market funds) over a 13-month period
and receive the same sales charge (expressed as a percentage of your
purchases) as if all shares had been purchased at once, unless the
Statement is upgraded as described below.

The Statement period starts on the date on which your first purchase made
toward satisfying the Statement is processed. The market value of your
existing holdings eligible to be aggregated (see below) as of the day
immediately before the start of the Statement period may be credited toward
satisfying the Statement.

You may revise the commitment you have made in your Statement upward at any
time during the Statement period. If your prior commitment has not been met
by the time of the revision, the Statement period during which purchases
must be made will remain unchanged. Purchases made from the date of the
revision will receive the reduced sales charge, if any, resulting from the
revised Statement. If your prior commitment has been met by the time of the
revision, your original Statement will be considered met and a new
Statement will be established.

The Statement will be considered completed if the shareholder dies within
the 13-month Statement period. Commissions to dealers will not be adjusted
or paid on the difference between the Statement amount and the amount
actually invested before the shareholder's death.

When a shareholder elects to use a Statement, shares equal to 5% of the
dollar amount specified in the Statement may 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 any 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 Statement period,
the purchaser may be required to 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. Any dealers assigned to the shareholder's account at the
time a purchase was made during the Statement period will receive a
corresponding commission adjustment if appropriate. If the difference is
not paid by the close of the Statement period, 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 may be liable
to the Principal Underwriter for the balance still outstanding.

Fundamental Investors -- Page 47
<PAGE>

Certain payroll deduction retirement plans purchasing Class A shares under
a Statement on or before November 12, 2006, may continue to purchase Class
A shares at the sales charge determined by that particular Statement until
the plans' values reach the amounts specified in their Statements. Upon
reaching such amounts, the Statements for these plans will be deemed
completed and will terminate. In addition, effective May 1, 2009, the
Statements for these plans will expire if they have not been met by next
anniversary of the establishment of such Statement. After such termination,
these plans are eligible for additional sales charge reductions by meeting
the criteria under the fund's rights of accumulation policy.

In addition, if you currently have individual holdings in American Legacy
variable annuity contracts or variable life insurance policies that were
established on or before March 31, 2007, you may continue to apply
purchases under such contracts and policies to a Statement.

Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms and those in the prospectus with
their first purchase.

AGGREGATION -- Qualifying investments for aggregation include those made by
you and your "immediate family" as defined in the prospectus, if all
parties are purchasing shares for their own accounts and/or:

. individual-type employee benefit plans, such as an IRA,
single-participant Keogh-type plan, or a participant account of a
403(b) plan that is treated as an individual-type plan for sales
charge purposes (see "Purchases by certain 403(b) plans" under "Sales
charges" in this statement of additional information);

. SEP plans and SIMPLE IRA plans established after November 15, 2004 by
an employer adopting any plan document other than a prototype plan
produced by American Funds Distributors, Inc.;

. business accounts solely controlled by you or your immediate family
(for example, you own the entire business);

. trust accounts established by you or your immediate family (for trusts
with only one primary beneficiary, upon the trustor's death the trust
account may be aggregated with such beneficiary's own accounts; for
trusts with multiple primary beneficiaries, upon the trustor's death
the trustees of the trust may instruct American Funds Service Company
to establish separate trust accounts for each primary beneficiary;
each primary beneficiary's separate trust account may then be
aggregated with such beneficiary's own accounts);

. endowments or foundations established and controlled by you or your
immediate family; or

. 529 accounts, which will be aggregated at the account owner level
(Class 529-E accounts may only be aggregated with an eligible employer
plan).

Individual purchases by a trustee(s) or other fiduciary(ies) may also be
aggregated if the investments are:

. for a single trust estate or fiduciary account, including employee
benefit plans other than the individual-type employee benefit plans
described above;

Fundamental Investors -- Page 48
<PAGE>

. made for two or more employee benefit plans of a single employer or of
affiliated employers as defined in the 1940 Act, excluding the
individual-type employee benefit plans described above;

. for a diversified common trust fund or other diversified pooled
account not specifically formed for the purpose of accumulating fund
shares;

. for nonprofit, charitable or educational organizations, or any
endowments or foundations established and controlled by such
organizations, or any employer-sponsored retirement plans established
for the benefit of the employees of such organizations, their
endowments, or their foundations;

. for participant accounts of a 403(b) plan that is treated as an
employer-sponsored plan for sales charge purposes (see "Purchases by
certain 403(b) plans" under "Sales charges" in this statement of
additional information), or made for participant accounts of two or
more such plans, in each case of a single employer or affiliated
employers as defined in the 1940 Act; or

.
for a SEP or SIMPLE IRA plan established after November 15, 2004 by an
employer adopting a prototype plan produced by American Funds
Distributors, Inc.

Purchases made for nominee or street name accounts (securities held in the
name of an investment dealer or another nominee such as a bank trust
department instead of the customer) may not be aggregated with those made
for other accounts and may not be aggregated with other nominee or street
name accounts unless otherwise qualified as described above.

CONCURRENT PURCHASES -- As described in the prospectus, you may reduce your
Class A sales charge by combining purchases of all classes of shares in the
American Funds, as well as holdings in Endowments and applicable holdings
in the American Funds Target Date Retirement Series. Shares of money market
funds purchased through an exchange, reinvestment or cross-reinvestment
from a fund having a sales charge also qualify. However, direct purchases
of American Funds money market funds are excluded. If you currently have
individual holdings in American Legacy variable annuity contracts or
variable life insurance policies that were established on or before March
31, 2007, you may continue to combine purchases made under such contracts
and policies to reduce your Class A sales charge.

RIGHTS OF ACCUMULATION -- Subject to the limitations described in the
aggregation policy, you may take into account your accumulated holdings in
all share classes of the American Funds, as well as your holdings in
Endowments and applicable holdings in the American Funds Target Date
Retirement Series, to determine your sales charge on investments in
accounts eligible to be aggregated. Direct purchases of American Funds
money market funds are excluded. Subject to your investment dealer's or
recordkeeper's capabilities, your accumulated holdings will be calculated
as the higher of (a) the current value of your existing holdings (the
"market value") or (b) the amount you invested (including reinvested
dividends and capital gains, but excluding capital appreciation) less any
withdrawals (the "cost value"). Depending on the entity on whose books your
account is held, the value of your holdings in that account may not be
eligible for calculation at cost value. For example, accounts held in
nominee or street name may not be eligible for

Fundamental Investors -- Page 49
<PAGE>

calculation at cost value and instead may be calculated at market value for
purposes of rights of accumulation.

The value of all of your holdings in accounts established in calendar year
2005 or earlier will be assigned an initial cost value equal to the market
value of those holdings as of the last business day of 2005. Thereafter,
the cost value of such accounts will increase or decrease according to
actual investments or withdrawals. You must contact your financial adviser
or American Funds Service Company if you have additional information that
is relevant to the calculation of the value of your holdings.

When determining your American Funds Class A sales charge, if your
investment is not in an employer-sponsored retirement plan, you may also
continue to take into account the market value (as of the day prior to your
American Funds investment) of your individual holdings in various American
Legacy variable annuity contracts and variable life insurance policies that
were established on or before March 31, 2007. An employer-sponsored
retirement plan may also continue to take into account the market value of
its investments in American Legacy Retirement Investment Plans that were
established on or before March 31, 2007.

You may not purchase Class B or 529-B shares if your combined American
Funds and applicable American Legacy holdings cause you to be eligible to
purchase Class A or 529-A shares at the $100,000 or higher sales charge
discount rate. In addition, you may not purchase Class C or 529-C shares if
such combined holdings cause you to be eligible to purchase Class A or
529-A shares at the $1 million or more sales charge discount rate (i.e. at
net asset value).

If you make a gift of American Funds Class A shares, upon your request, you
may purchase the shares at the sales charge discount allowed under rights
of accumulation of all of your American Funds and applicable American
Legacy accounts.

RIGHT OF REINVESTMENT -- As described in the prospectus, certain
transactions may be eligible for investment without a sales charge pursuant
to the fund's right of reinvestment policy. Recent legislation suspended
required minimum distributions from individual retirement accounts and
employer-sponsored retirement plan accounts for the 2009 tax year. Given
this suspension, proceeds from an automatic withdrawal plan to satisfy a
required minimum distribution may be invested without a sales charge for
the 2009 tax year, or any subsequent period, to the extent such legislation
is extended. This policy is subject to any restrictions regarding the
investment of proceeds from a required minimum distribution that may be
established by the transfer agent.

CDSC WAIVERS FOR CLASS A, B AND C SHARES -- As noted in the prospectus, a
contingent deferred sales charge ("CDSC") may be waived for redemptions due to
death or post-purchase disability of a shareholder (this generally excludes
accounts registered in the names of trusts and other entities). In the case of
joint tenant accounts, if one joint tenant dies, a surviving joint tenant, at
the time he or she notifies the Transfer Agent of the other joint tenant's death
and removes the decedent's name from the account, may redeem shares from the
account without incurring a CDSC. Redemptions made after the Transfer Agent is
notified of the death of a joint tenant will be subject to a CDSC.

Fundamental Investors -- Page 50
<PAGE>

In addition, a CDSC may be waived for the following types of transactions, if
together they do not exceed 12% of the value of an "account" (defined below)
annually (the "12% limit"):

. Required minimum distributions taken from retirement accounts upon the
shareholder's attainment of age 70-1/2 (required minimum distributions
that continue to be taken by the beneficiary(ies) after the account
owner is deceased also qualify for a waiver).

. Redemptions through an automatic withdrawal plan ("AWP") (see
"Automatic withdrawals" under "Shareholder account services and
privileges" in this statement of additional information). For each AWP
payment, assets that are not subject to a CDSC, such as appreciation
on shares and shares acquired through reinvestment of dividends and/or
capital gain distributions, will be redeemed first and will count
toward the 12% limit. If there is an insufficient amount of assets not
subject to a CDSC to cover a particular AWP payment, shares subject to
the lowest CDSC will be redeemed next until the 12% limit is reached.
Any dividends and/or capital gain distributions taken in cash by a
shareholder who receives payments through an AWP will also count
toward the 12% limit. In the case of an AWP, the 12% limit is
calculated at the time an automatic redemption is first made, and is
recalculated at the time each additional automatic redemption is made.
Shareholders who establish an AWP should be aware that the amount of a
payment not subject to a CDSC may vary over time depending on
fluctuations in the value of their accounts. This privilege may be
revised or terminated at any time.

For purposes of this paragraph, "account" means:

. in the case of Class A shares, your investment in Class A shares of
all American Funds (investments representing direct purchases of
American Funds money market funds are excluded);

. in the case of Class B shares, your investment in Class B shares of
the particular fund from which you are making the redemption; and

. in the case of Class C shares, your investment in Class C shares of
the particular fund from which you are making the redemption.

CDSC waivers are allowed only in the cases listed here and in the prospectus.
For example, CDSC waivers will not be allowed on redemptions of Class 529-B and
529-C shares due to termination of CollegeAmerica; a determination by the
Internal Revenue Service that CollegeAmerica does not qualify as a qualified
tuition program under the Code; proposal or enactment of law that eliminates or
limits the tax-favored status of CollegeAmerica; or elimination of the fund by
the Virginia College Savings Plan as an option for additional investment within
CollegeAmerica.

SELLING SHARES

The methods for selling (redeeming) shares are described more fully in the
prospectus. If you wish to sell your shares by contacting American Funds Service
Company directly, any such request must be signed by the registered
shareholders. To contact American Funds Service Company via overnight mail or
courier service, see "Purchase and exchange of shares."

Fundamental Investors -- Page 51
<PAGE>

A signature guarantee may be required for certain redemptions. In such an event,
your signature may be guaranteed by a domestic stock exchange or the Financial
Industry Regulatory Authority, bank, savings association or credit union that is
an eligible guarantor institution. The Transfer Agent reserves the right to
require a signature guarantee on any redemptions.

Additional documentation may be required for sales of shares held in corporate,
partnership or fiduciary accounts. You must include with your written request
any shares you wish to sell that are in certificate form.

If you sell Class A, B or C shares and request a specific dollar amount to be
sold, we will sell sufficient shares so that the sale proceeds, after deducting
any applicable CDSC, equals the dollar amount requested.

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 10
business 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 1940 Act), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.

You may request that redemption proceeds of $1,000 or more from money market
funds be wired to your bank by writing American Funds Service Company. A
signature guarantee is required on all requests to wire funds.

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders. However, certain services and privileges described in the
prospectus and this statement of additional information may not be available for
Class 529 shareholders or if your account is held with an investment dealer or
through an employer-sponsored retirement plan.

AUTOMATIC INVESTMENT PLAN -- An automatic investment plan enables you to make
monthly or quarterly investments in the American Funds through automatic debits
from your bank account. To set up a plan, you must fill out an account
application and specify the amount that you would like to invest and the date on
which you would like your investments to occur. The plan will begin within 30
days after your account application is received. Your bank account will be
debited on the day or a few days before your investment is made, depending on
the bank's capabilities. The Transfer Agent will then invest your money into the
fund you specified on or around the date you specified. If the date you
specified falls on a weekend or holiday, your money will be invested on the
following business day. However, if the following business day falls in the next
month, your money will be invested on the business day immediately preceding the
weekend or holiday. If your bank account cannot be debited due to insufficient
funds, a stop-payment or the closing of the account, the plan may be terminated
and the related investment reversed. You may change the amount of the investment
or discontinue the plan at any time by contacting the Transfer Agent.

AUTOMATIC REINVESTMENT -- Dividends and capital gain distributions are
reinvested in additional shares of the same class and fund at net asset value
unless you indicate otherwise on the account application. You also may elect to
have dividends and/or capital gain distributions paid in

Fundamental Investors -- Page 52
<PAGE>

cash by informing the fund, the Transfer Agent or your investment dealer.
Dividends and capital gain distributions paid to retirement plan shareholders or
shareholders of the 529 share classes will be automatically reinvested.

If you have elected to receive dividends and/or capital gain distributions in
cash, and the postal or other delivery service is unable to deliver checks to
your address of record, or you do not respond to mailings from American Funds
Service Company with regard to uncashed distribution checks, your distribution
option may be automatically converted to having all dividends and other
distributions reinvested in additional shares.

CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -- For all share classes,
except the 529 classes of shares, you may cross-reinvest dividends and capital
gains (distributions) into other American Funds in the same share class at net
asset value, subject to the following conditions:

(1) the aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the fund
receiving the distributions equals or exceeds that fund's minimum initial
investment requirement);

(2) if the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested; and

(3) if you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distributions must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.

AUTOMATIC EXCHANGES -- For all share classes, you may automatically exchange
shares of the same class in amounts of $50 or more among any of the American
Funds on any day (or preceding business day if the day falls on a nonbusiness
day) of each month you designate.

AUTOMATIC WITHDRAWALS -- Depending on the type of account, for all share classes
except R shares, you may automatically withdraw shares from any of the American
Funds. You can make automatic withdrawals of $50 or more. You can designate the
day of each period for withdrawals and request that checks be sent to you or
someone else. Withdrawals may also be electronically deposited to your bank
account. The Transfer Agent will withdraw your money from the fund you specify
on or around the date you specify. If the date you specified falls on a weekend
or holiday, the redemption will take place on the previous business day.
However, if the previous business day falls in the preceding month, the
redemption will take place on the following business day after the weekend or
holiday. You should consult with your adviser or intermediary to determine if
your account is eligible for automatic withdrawals.

Withdrawal payments are not to be considered as dividends, yield or income.
Generally, 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.

Redemption proceeds from an automatic withdrawal plan are not eligible for
reinvestment without a sales charge.

Fundamental Investors -- Page 53
<PAGE>

ACCOUNT STATEMENTS -- Your account is opened in accordance with your
registration instructions. Transactions in the account, such as additional
investments, will be reflected on regular confirmation statements from the
Transfer Agent. Dividend and capital gain reinvestments, purchases through
automatic investment plans and certain retirement plans, as well as automatic
exchanges and withdrawals, will be confirmed at least quarterly.

AMERICAN FUNDSLINE AND AMERICANFUNDS.COM -- You may check your share balance,
the price of your shares or your most recent account transaction; redeem shares
(up to $75,000 per American Funds shareholder each day) from nonretirement plan
accounts; or exchange shares around the clock with American FundsLine or using
americanfunds.com. To use American FundsLine, call 800/325-3590 from a
TouchTone(TM) telephone. Redemptions and exchanges through American FundsLine
and americanfunds.com are subject to the conditions noted above and in
"Telephone and Internet purchases, redemptions and exchanges" below. You will
need your fund number (see the list of the American Funds under "General
information -- fund numbers"), personal identification number (generally the
last four digits of your Social Security number or other tax identification
number associated with your account) and account number.

Generally, all shareholders are automatically eligible to use these services.
However, if you are not currently authorized to do so, you may complete an
American FundsLink Authorization Form. Once you establish this privilege, you,
your financial adviser or any person with your account information may use these
services.

TELEPHONE AND INTERNET PURCHASES, REDEMPTIONS AND EXCHANGES -- By using the
telephone (including American FundsLine) or the Internet (including
americanfunds.com), or fax purchase, redemption and/or exchange options, you
agree to hold the fund, the Transfer Agent, 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 liabilities (including attorney fees) that may be incurred in
connection with the exercise of these privileges. Generally, all shareholders
are automatically eligible to use these services. However, you may elect to opt
out of these services by writing the Transfer Agent (you may also reinstate them
at any time by writing the Transfer Agent). If the Transfer Agent does not
employ reasonable procedures to confirm that the instructions received from any
person with appropriate account information are genuine, it and/or 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.

CHECKWRITING -- You may establish check writing privileges for Class A shares
(but not Class 529-A shares) of American Funds money market funds upon meeting
the fund's initial purchase minimum of $1,000. This can be done by using an
account application. If you request check writing privileges, you will be
provided with checks that you may use to draw against your account. These checks
may be made payable to anyone you designate and must be signed by the authorized
number of registered shareholders exactly as indicated on your account
application.

REDEMPTION OF SHARES -- The fund's articles of incorporation permit the fund to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per share if at such time the shareholder of record owns
shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in

Fundamental Investors -- Page 54
<PAGE>

the fund's current registration statement under the 1940 Act, and subject to
such further terms and conditions as the board of directors of the fund may from
time to time adopt.

While payment of redemptions normally will be in cash, the fund's articles of
incorporation permit payment of the redemption price wholly or partly with
portfolio securities or other fund assets under conditions and circumstances
determined by the fund's board of directors. For example, redemptions could be
made in this manner if the board determined that making payments wholly in cash
over a particular period would be unfair and/or harmful to other fund
shareholders.

SHARE CERTIFICATES -- Shares are credited to your account and certificates are
not issued unless you request them by contacting the Transfer Agent.
Certificates are not available for the 529 or R share classes.

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 State Street Bank and Trust Company, One Lincoln Street, Boston, MA
02111, as Custodian. If the fund holds securities of issuers outside the U.S.,
the Custodian may hold these securities pursuant to subcustodial arrangements in
banks outside the U.S. or branches of U.S. banks outside the U.S.

TRANSFER AGENT -- American Funds Service Company, a wholly owned subsidiary of
the investment adviser, maintains the records of shareholder accounts, 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. The principal office of American Funds Service Company is
located at 6455 Irvine Center Drive, Irvine, CA 92618. American Funds Service
Company was paid a fee of $40,731,000 for Class A shares and $1,598,000 for
Class B shares for the 2008 fiscal year. American Funds Service Company is also
compensated for certain transfer agency services provided to all other share
classes from the administrative services fees paid to Capital Research and
Management Company and from the relevant share class, as described under
"Administrative services agreement."

In the case of certain shareholder accounts, third parties who may be
unaffiliated with the investment adviser provide transfer agency and shareholder
services in place of American Funds Service Company. These services are rendered
under agreements with American Funds Service Company or its affiliates and the
third parties receive compensation according to such agreements. Compensation
for transfer agency and shareholder services, whether paid to American Funds
Service Company or such third parties, is ultimately paid from fund assets and
is reflected in the expenses of the fund as disclosed in the prospectus.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -- Deloitte & Touche LLP, 695 Town
Center Drive, Costa Mesa, California 92626, serves as the fund's independent
registered public accounting firm, 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 annual report have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated in their
report appearing herein. Such financial statements have been so included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing. The selection of the fund's independent registered
public accounting firm is reviewed and determined annually by the board of
directors.

Fundamental Investors -- Page 55
<PAGE>

INDEPENDENT LEGAL COUNSEL -- Paul, Hastings, Janofsky & Walker LLP, 515 South
Flower Street, Los Angeles, CA 90071, serves as independent legal counsel
("counsel") for the fund and for independent directors in their capacities as
such. Certain legal matters in connection with certain capital shares offered by
the prospectus have been passed upon for the fund by Paul, Hastings, Janofsky &
Walker LLP and DLA Piper US LLP, Baltimore, Maryland. A determination with
respect to the independence of the fund's counsel will be made at least annually
by the independent directors of the fund, as prescribed by the 1940 Act and
related rules.

PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- The fund's fiscal
year ends on December 31. Shareholders are provided updated prospectuses
annually and at least semiannually with reports showing the fund's investment
portfolio or summary investment portfolio, financial statements and other
information. The fund's annual financial statements are audited by the fund's
independent registered public accounting firm, Deloitte & Touche LLP. In
addition, shareholders may also receive proxy statements for the fund. In an
effort to reduce the volume of mail shareholders receive from the fund when a
household owns more than one account, the Transfer Agent has taken steps to
eliminate duplicate mailings of prospectuses, shareholder reports and proxy
statements. To receive additional copies of a prospectus, report or proxy
statement, shareholders should contact the Transfer Agent.

Shareholders may also elect to receive updated prospectuses, annual reports and
semi-annual reports electronically by signing up for electronic delivery on our
website, americanfunds.com. Upon electing the electronic delivery of updated
prospectuses and other reports, a shareholder will no longer automatically
receive such documents in paper form by mail. A shareholder who elects
electronic delivery is able to cancel this service at any time and return to
receiving updated prospectuses and other reports in paper form by mail.

Prospectuses, annual reports and semi-annual reports that are mailed to
shareholders by the American Funds organization are printed with ink containing
soy and/or vegetable oil on paper containing recycled fibers.

CODES OF ETHICS -- The fund and Capital Research and Management Company and its
affiliated companies, including the fund's Principal Underwriter, have adopted
codes of ethics that allow for personal investments, including securities in
which the fund may invest from time to time. These codes include a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; preclearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; 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.

LEGAL PROCEEDINGS -- On February 16, 2005, the NASD (now the Financial Industry
Regulatory Authority, or FINRA) filed an administrative complaint against the
Principal Underwriter. The complaint alleges violations of certain NASD rules by
the Principal Underwriter with respect to the selection of broker-dealer firms
that buy and sell securities for mutual fund investment portfolios. The
complaint seeks sanctions, restitution and disgorgement. On August 30, 2006, a
FINRA Hearing Panel ruled against the Principal Underwriter and imposed a $5
million fine. On April 30, 2008, FINRA's National Adjudicatory Council affirmed
the decision by FINRA's Hearing Panel. The Principal Underwriter has appealed
this decision to the Securities and Exchange Commission.

Fundamental Investors -- Page 56
<PAGE>

The investment adviser and Principal Underwriter believe that the likelihood
that this matter could have a material adverse effect on the fund or on the
ability of the investment adviser or Principal Underwriter to perform their
contracts with the fund is remote. In addition, class action lawsuits have been
filed in the U.S. District Court, Central District of California, relating to
this and other matters. The investment adviser believes that these suits are
without merit and will defend itself vigorously.

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- DECEMBER 31, 2008

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $24.98
Maximum offering price per share
(100/94.25 of net asset value per share,
which takes into account the fund's current maximum
sales charge). . . . . . . . . . . . . . . . $26.50

OTHER INFORMATION -- The fund reserves the right to modify the privileges
described in this statement of additional information at any time.

The financial statements, including the investment portfolio and the report of
the fund's independent registered public accounting firm contained in the annual
report, are included in this statement of additional information. The following
information on fund numbers is not included in the annual report:

Fundamental Investors -- Page 57
<PAGE>

FUND NUMBERS -- Here are the fund numbers for use with our automated telephone
line, American FundsLine/(R)/, or when making share transactions:

FUND NUMBERS
-------------------------------------------------
FUND CLASS A CLASS B CLASS C CLASS F-1 CLASS F-2
- -------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . 002 202 302 402 602
American Balanced Fund/(R)/ 011 211 311 411 611
American Mutual Fund/(R)/ . 003 203 303 403 603
Capital Income Builder/(R)/ 012 212 312 412 612
Capital World Growth and
Income Fund/SM/ . . . . . . 033 233 333 433 633
EuroPacific Growth Fund/(R)/ 016 216 316 416 616
Fundamental Investors/SM/ . 010 210 310 410 610
The Growth Fund of
America/(R)/. . . . . . . . 005 205 305 405 605
The Income Fund of
America/(R)/. . . . . . . . 006 206 306 406 606
International Growth and
Income Fund/SM/ . . . . . . 034 234 334 434 634
The Investment Company of
America/(R)/. . . . . . . . 004 204 304 404 604
The New Economy Fund/(R)/ . 014 214 314 414 614
New Perspective Fund/(R)/ . 007 207 307 407 607
New World Fund/(R)/ . . . . 036 236 336 436 636
SMALLCAP World Fund/(R)/ . 035 235 335 435 635
Washington Mutual Investors
Fund/SM/ . . . . . . . . . 001 201 301 401 601
BOND FUNDS
American High-Income
Municipal Bond Fund/(R)/ . 040 240 340 440 640
American High-Income
Trust/SM/ . . . . . . . . . 021 221 321 421 621
The Bond Fund of America/SM/ 008 208 308 408 608
Capital World Bond Fund/(R)/ 031 231 331 431 631
Intermediate Bond Fund of
America/SM/ . . . . . . . . 023 223 323 423 623
Limited Term Tax-Exempt Bond
Fund of America/SM/ . . . . 043 243 343 443 643
Short-Term Bond Fund of
America/SM/ . . . . . . . . 048 248 348 448 648
The Tax-Exempt Bond Fund of
America/(R)/. . . . . . . . 019 219 319 419 619
The Tax-Exempt Fund of
California/(R)/*. . . . . . 020 220 320 420 620
The Tax-Exempt Fund of
Maryland/(R)/*. . . . . . . 024 224 324 424 624
The Tax-Exempt Fund of
Virginia/(R)/*. . . . . . . 025 225 325 425 625
U.S. Government Securities
Fund/SM/. . . . . . . . . . 022 222 322 422 622
MONEY MARKET FUNDS
American Funds Money Market
Fund/SM/ . . . . . . . . . 059 259 359 459 659
The Cash Management Trust of
America/(R)/. . . . . . . . 009 209 309 409 609
The Tax-Exempt Money Fund of
America/SM/ . . . . . . . . 039 N/A N/A N/A N/A
The U.S. Treasury Money Fund
of America/SM/ . . . . . . 049 N/A N/A N/A N/A
___________
*Qualified for sale only in certain jurisdictions.

Fundamental Investors -- Page 58
<PAGE>

FUND NUMBERS
----------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND 529-A 529-B 529-C 529-E 529-F-1
- -------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . 1002 1202 1302 1502 1402
American Balanced Fund . . . . 1011 1211 1311 1511 1411
American Mutual Fund . . . . . 1003 1203 1303 1503 1403
Capital Income Builder . . . . 1012 1212 1312 1512 1412
Capital World Growth and Income
Fund . . . . . . . . . . . . . 1033 1233 1333 1533 1433
EuroPacific Growth Fund . . . 1016 1216 1316 1516 1416
Fundamental Investors . . . . 1010 1210 1310 1510 1410
The Growth Fund of America . . 1005 1205 1305 1505 1405
The Income Fund of America . . 1006 1206 1306 1506 1406
International Growth and Income
Fund . . . . . . . . . . . . . 1034 1234 1334 1534 1434
The Investment Company of
America. . . . . . . . . . . . 1004 1204 1304 1504 1404
The New Economy Fund . . . . . 1014 1214 1314 1514 1414
New Perspective Fund . . . . . 1007 1207 1307 1507 1407
New World Fund . . . . . . . . 1036 1236 1336 1536 1436
SMALLCAP World Fund . . . . . 1035 1235 1335 1535 1435
Washington Mutual Investors
Fund . . . . . . . . . . . . . 1001 1201 1301 1501 1401
BOND FUNDS
American High-Income Trust . . 1021 1221 1321 1521 1421
The Bond Fund of America . . . 1008 1208 1308 1508 1408
Capital World Bond Fund . . . 1031 1231 1331 1531 1431
Intermediate Bond Fund of
America. . . . . . . . . . . . 1023 1223 1323 1523 1423
Short-Term Bond Fund of America 1048 1248 1348 1548 1448
U.S. Government Securities Fund 1022 1222 1322 1522 1422
MONEY MARKET FUND
American Funds Money Market
Fund . . . . . . . . . . . . . 1059 1259 1359 1559 1459
The Cash Management Trust of
America. . . . . . . . . . . . 1009 1209 1309 1509 1409

Fundamental Investors -- Page 59
<PAGE>

FUND NUMBERS
------------------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
FUND R-1 R-2 R-3 R-4 R-5 R-6
- -------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . . . 2102 2202 2302 2402 2502 2602
American Balanced Fund . . . . . . 2111 2211 2311 2411 2511 2611
American Mutual Fund . . . . . . . 2103 2203 2303 2403 2503 2603
Capital Income Builder . . . . . . 2112 2212 2312 2412 2512 2612
Capital World Growth and Income
Fund . . . . . . . . . . . . . . . 2133 2233 2333 2433 2533 2633
EuroPacific Growth Fund . . . . . 2116 2216 2316 2416 2516 2616
Fundamental Investors . . . . . . 2110 2210 2310 2410 2510 2610
The Growth Fund of America . . . . 2105 2205 2305 2405 2505 2605
The Income Fund of America . . . . 2106 2206 2306 2406 2506 2606
International Growth and Income
Fund . . . . . . . . . . . . . . . 2134 2234 2334 2434 2534 2634
The Investment Company of America 2104 2204 2304 2404 2504 2604
The New Economy Fund . . . . . . . 2114 2214 2314 2414 2514 2614
New Perspective Fund . . . . . . . 2107 2207 2307 2407 2507 2607
New World Fund . . . . . . . . . . 2136 2236 2336 2436 2536 2636
SMALLCAP World Fund . . . . . . . 2135 2235 2335 2435 2535 2635
Washington Mutual Investors Fund . 2101 2201 2301 2401 2501 2601
BOND FUNDS
American High-Income Municipal Bond
Fund . . . . . . . . . . . . . . . N/A N/A N/A N/A 2540 N/A
American High-Income Trust . . . . 2121 2221 2321 2421 2521 2621
The Bond Fund of America . . . . . 2108 2208 2308 2408 2508 2608
Capital World Bond Fund . . . . . 2131 2231 2331 2431 2531 2631
Intermediate Bond Fund of America 2123 2223 2323 2423 2523 2623
Limited Term Tax-Exempt Bond Fund
of America . . . . . . . . . . . . N/A N/A N/A N/A 2543 N/A
Short-Term Bond Fund of America. . 2148 2248 2348 2448 2548 2648
The Tax-Exempt Bond Fund of America N/A N/A N/A N/A 2519 N/A
The Tax-Exempt Fund of California* N/A N/A N/A N/A 2520 N/A
The Tax-Exempt Fund of Maryland* . N/A N/A N/A N/A 2524 N/A
The Tax-Exempt Fund of Virginia* . N/A N/A N/A N/A 2525 N/A
U.S. Government Securities Fund . 2122 2222 2322 2422 2522 2622
MONEY MARKET FUNDS
American Funds Money Market Fund . 2159 2259 2359 2459 2559 2659
The Cash Management Trust of
America. . . . . . . . . . . . . . 2109 2209 2309 2409 2509 N/A
The Tax-Exempt Money Fund of
America . . . . . . . . . . . . . N/A N/A N/A N/A 2539 N/A
The U.S. Treasury Money Fund of
America . . . . . . . . . . . . . 2149 2249 2349 2449 2549 N/A
___________
*Qualified for sale only in certain
jurisdictions.

Fundamental Investors -- Page 60
<PAGE>

FUND NUMBERS
---------------------------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
FUND CLASS A R-1 R-2 R-3 R-4 R-5 R-6
- -------------------------------------------------------------------------------

AMERICAN FUNDS TARGET DATE RETIREMENT SERIES/(R)/
American Funds 2050 Target
Date Retirement Fund/(R)/ 069 2169 2269 2369 2469 2569 2669
American Funds 2045 Target
Date Retirement Fund/(R)/ 068 2168 2268 2368 2468 2568 2668
American Funds 2040 Target
Date Retirement Fund/(R)/ 067 2167 2267 2367 2467 2567 2667
American Funds 2035 Target
Date Retirement Fund/(R)/ 066 2166 2266 2366 2466 2566 2666
American Funds 2030 Target
Date Retirement Fund/(R)/ 065 2165 2265 2365 2465 2565 2665
American Funds 2025 Target
Date Retirement Fund/(R)/ 064 2164 2264 2364 2464 2564 2664
American Funds 2020 Target
Date Retirement Fund/(R)/ 063 2163 2263 2363 2463 2563 2663
American Funds 2015 Target
Date Retirement Fund/(R)/ 062 2162 2262 2362 2462 2562 2662
American Funds 2010 Target
Date Retirement Fund/(R)/ 061 2161 2261 2361 2461 2561 2661

Fundamental Investors -- Page 61
<PAGE>

APPENDIX

The following descriptions of debt security ratings are based on information
provided by Moody's Investors Service and Standard & Poor's Corporation.

DESCRIPTION OF BOND RATINGS

MOODY'S
LONG-TERM RATING DEFINITIONS

Aaa
Obligations rated Aaa are judged to be of the highest quality, with minimal
credit risk.

Aa
Obligations rated Aa are judged to be of high quality and are subject to very
low credit risk.

A
Obligations rated A are considered upper-medium grade and are subject to low
credit risk.

Baa
Obligations rated Baa are subject to moderate credit risk. They are considered
medium-grade and as such may possess certain speculative characteristics.

Ba
Obligations rated Ba are judged to have speculative elements and are subject to
substantial credit risk.

B
Obligations rated B are considered speculative and are subject to high credit
risk.

Caa
Obligations rated Caa are judged to be of poor standing and are subject to very
high credit risk.

Ca
Obligations rated Ca are highly speculative and are likely in, or very near,
default, with some prospect of recovery of principal and interest.

C
Obligations rated C are the lowest rated class of bonds and are typically in
default, with little prospect for recovery of principal or interest.

NOTE: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

Fundamental Investors -- Page 62
<PAGE>

STANDARD & POOR'S
LONG-TERM ISSUE CREDIT RATINGS

AAA
An obligation rated AAA has the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA
An obligation rated AA differs from the highest-rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A
An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB
An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

BB, B, CCC, CC, AND C
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.

BB
An obligation rated BB is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B
An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC
An obligation rated CCC is currently vulnerable to nonpayment and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.

CC
An obligation rated CC is currently highly vulnerable to nonpayment.

Fundamental Investors -- Page 63
<PAGE>

C
A C rating is assigned to obligations that are currently highly vulnerable to
nonpayment, obligations that have payment arrearages allowed by the terms of the
documents, or obligations of an issuer that is the subject of a bankruptcy
petition or similar action which have not experienced a payment default. Among
others, the C rating may be assigned to subordinated debt, preferred stock or
other obligations on which cash payments have been suspended in accordance with
the instrument's terms.

D
An obligation rated D is in payment default. The D rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless Standard & Poor's believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.

PLUS (+) OR MINUS (-)
The ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories.

Fundamental Investors -- Page 64

...

[logo – American Funds®]

Fundamental InvestorsSM

Investment portfolio

December 31, 2008

Common stocks — 88.03%	Shares			Value (000)

INFORMATION TECHNOLOGY — 17.61%
Nokia Corp. (ADR)		34,522,000		$	538,543
Nokia Corp.1		18,900,000			293,733
Oracle Corp.2		38,391,979			680,690
Microsoft Corp.		33,295,000			647,255
Cisco Systems, Inc.2		32,910,000			536,433
Google Inc., Class A2		1,200,000			369,180
Yahoo! Inc.2		28,160,000			343,552
EMC Corp.2		24,745,000			259,080
Intuit Inc.2		9,975,000			237,305
SAP AG (ADR)		6,500,000			235,430
Corning Inc.		16,520,000			157,436
Applied Materials, Inc.		14,600,000			147,898
Fidelity National Information Services, Inc.		7,615,000			123,896
Kyocera Corp.1		1,625,000			116,969
Lender Processing Services, Inc.		3,807,500			112,131
Xilinx, Inc.		5,800,000			103,356
Paychex, Inc.		3,900,000			102,492
International Business Machines Corp.		1,200,000			100,992
Microchip Technology Inc.		4,818,000			94,096
Apple Inc.2		1,000,000			85,350
Trimble Navigation Ltd.2		3,725,000			80,497
STMicroelectronics NV1		11,000,000			73,852
QUALCOMM Inc.		2,000,000			71,660
Red Hat, Inc.2		5,301,536			70,086
Linear Technology Corp.		2,700,000			59,724
Hewlett-Packard Co.		1,500,000			54,435
Texas Instruments Inc.		3,500,000			54,320
Autodesk, Inc.2		2,500,000			49,125
Comverse Technology, Inc.2		7,684,470			48,105
ASML Holding NV1		2,609,568			46,685
KLA-Tencor Corp.		1,674,500			36,487
Dell Inc.2		2,000,000			20,480
Tyco Electronics Ltd.		1,125,000			18,236
HTC Corp.1		1,522,800			15,390
Murata Manufacturing Co., Ltd.1		300,000			11,734
Metavante Technologies, Inc.2		496,666			8,001
					6,004,634


INDUSTRIALS — 12.24%
Deere & Co.		10,500,000			402,360
Schneider Electric SA1		4,110,075			307,770
Emerson Electric Co.		8,400,000			307,524
Union Pacific Corp.		6,100,000			291,580
General Electric Co.		14,700,000			238,140
Caterpillar Inc.		5,217,500			233,066
General Dynamics Corp.		3,545,800			204,203
Northrop Grumman Corp.		4,366,243			196,655
Parker Hannifin Corp.		4,200,000			178,668
Boeing Co.		4,000,000			170,680
Waste Management, Inc.		5,100,000			169,014
Deutsche Post AG1		8,945,000			151,707
Raytheon Co.		2,832,732			144,583
Tyco International Ltd.		6,615,000			142,884
European Aeronautic Defence and Space Co. EADS NV1		7,500,000			126,937
Lockheed Martin Corp.		1,248,200			104,949
Fastenal Co.		2,995,500			104,393
Finmeccanica SpA1		6,000,000			92,140
United Parcel Service, Inc., Class B		1,600,000			88,256
Precision Castparts Corp.		1,300,000			77,324
United Technologies Corp.		1,250,000			67,000
Mitsubishi Heavy Industries, Ltd.1		14,446,000			64,312
KBR, Inc.		3,950,000			60,040
Mitsubishi Corp.1		3,995,800			55,971
Joy Global Inc.		2,238,638			51,242
Corporate Executive Board Co.3		2,304,200			50,831
Grafton Group PLC, units1,3		14,650,000			47,441
Republic Services, Inc.		1,125,000			27,889
Kingspan Group PLC1		3,500,000			15,297
					4,172,856


HEALTH CARE — 11.87%
Merck & Co., Inc.		19,940,800			606,200
Roche Holding AG1		3,025,000			462,758
Eli Lilly and Co.		9,898,400			398,609
Wyeth		10,000,000			375,100
Bayer AG, non-registered shares1		4,670,000			275,019
Abbott Laboratories		4,450,000			237,496
C. R. Bard, Inc.		2,500,000			210,650
UnitedHealth Group Inc.		6,500,000			172,900
Hologic, Inc.2		12,730,000			166,381
Shire Ltd. (ADR)		3,500,000			156,730
Medtronic, Inc.		4,124,700			129,598
Johnson & Johnson		2,000,000			119,660
Amgen Inc.2		2,058,000			118,849
Schering-Plough Corp.		5,302,800			90,307
Celgene Corp.2		1,600,000			88,448
Boston Scientific Corp.2		11,290,000			87,385
Stryker Corp.		1,700,000			67,915
Novo Nordisk A/S, Class B1		1,329,000			67,826
Aetna Inc.		2,310,000			65,835
St. Jude Medical, Inc.2		1,600,000			52,736
Hospira, Inc.2		1,700,000			45,594
Medco Health Solutions, Inc.2		926,000			38,809
Elan Corp., PLC (ADR)2		1,832,661			10,996
					4,045,801


ENERGY — 10.54%
Suncor Energy Inc.		36,866,206			717,658
Occidental Petroleum Corp.		6,804,244			408,186
Chevron Corp.		2,892,763			213,978
Tenaris SA (ADR)		10,170,000			213,367
EnCana Corp.		4,300,000			201,008
Diamond Offshore Drilling, Inc.		3,332,000			196,388
Murphy Oil Corp.		4,343,636			192,640
CONSOL Energy Inc.4		6,700,000			191,486
Royal Dutch Shell PLC, Class A (ADR)		3,500,000			185,290
Hess Corp.		3,000,000			160,920
Imperial Oil Ltd.		3,608,739			121,397
Petróleo Brasileiro SA – Petrobras, ordinary nominative (ADR)		4,850,000			118,776
Schlumberger Ltd.		2,700,000			114,291
Petro-Canada		4,890,000			107,231
Transocean Ltd.2		1,500,000			70,875
Devon Energy Corp.		1,000,000			65,710
OAO LUKOIL (ADR)1		2,000,000			64,846
Smith International, Inc.		2,685,000			61,460
Acergy SA1		9,520,000			54,555
Exxon Mobil Corp.		500,000			39,915
OAO TMK (GDR)1		5,685,000			22,164
Marathon Oil Corp.		710,000			19,426
Saipem SpA, Class S1		1,000,000			16,833
Cameco Corp.		846,300			14,620
Quicksilver Resources Inc.2		2,592,200			14,439
CNX Gas Corp.2		217,800			5,946
					3,593,405


FINANCIALS — 7.58%
Wells Fargo & Co.		10,880,000			320,742
Berkshire Hathaway Inc., Class A2		2,945			284,487
JPMorgan Chase & Co.		8,000,000			252,240
Bank of America Corp.		17,160,000			241,613
U.S. Bancorp		8,712,000			217,887
Citigroup Inc.		28,900,000			193,919
SunTrust Banks, Inc.		6,000,000			177,240
ACE Ltd.		3,200,000			169,344
AMP Ltd.1		25,000,412			96,949
Capital One Financial Corp.		2,400,000			76,536
Marsh & McLennan Companies, Inc.		2,795,000			67,835
AXA SA1		2,845,500			63,597
M&T Bank Corp.		1,090,000			62,577
Industrial and Commercial Bank of China Ltd., Class H1		109,000,000			57,935
Marshall & Ilsley Corp.		3,189,998			43,512
T. Rowe Price Group, Inc.		1,200,000			42,528
HSBC Holdings PLC (United Kingdom)1		4,000,000			38,723
People’s United Financial, Inc.		2,000,000			35,660
Bank of New York Mellon Corp.		1,000,000			28,330
CapitalSource Inc.		5,500,954			25,414
American Express Co.		1,100,000			20,405
Irish Life & Permanent PLC1		9,000,000			20,020
Allied Irish Banks, PLC1		8,200,000			19,991
Bank of Ireland1		15,863,513			18,738
Zions Bancorporation		252,000			6,177
					2,582,399


CONSUMER DISCRETIONARY — 7.18%
McDonald’s Corp.		9,406,400			584,984
Lowe’s Companies, Inc.		20,210,000			434,919
Time Warner Inc.		17,500,000			176,050
Home Depot, Inc.		7,500,000			172,650
Johnson Controls, Inc.		7,500,000			136,200
Best Buy Co., Inc.		3,775,000			106,115
Toyota Motor Corp.1		3,000,000			97,982
Target Corp.		2,750,000			94,958
Amazon.com, Inc.2		1,600,000			82,048
Starbucks Corp.2		8,000,000			75,680
Macy’s, Inc.		6,500,000			67,275
Starwood Hotels & Resorts Worldwide, Inc.		3,424,417			61,297
Nikon Corp.1		3,977,000			47,543
Virgin Media Inc.2		8,000,000			39,920
Honda Motor Co., Ltd.1		1,841,500			39,849
Harman International Industries, Inc.		2,370,000			39,650
Penn National Gaming, Inc.2		1,763,000			37,693
News Corp., Class A		3,650,000			33,179
Weight Watchers International, Inc.		1,070,000			31,479
Garmin Ltd.		1,469,383			28,168
Chipotle Mexican Grill, Inc., Class A2		238,832			14,803
Chipotle Mexican Grill, Inc., Class B2		208,000			11,916
Liberty Media Corp., Liberty Interactive, Series A2		6,274,100			19,575
Magna International Inc., Class A		474,300			14,196
					2,448,129


MATERIALS — 6.28%
Syngenta AG1		2,025,400			389,946
Potash Corp. of Saskatchewan Inc.		2,509,100			183,716
Monsanto Co.		2,550,000			179,392
Rio Tinto PLC1		7,266,709			159,248
CRH PLC1		6,083,204			153,907
E.I. du Pont de Nemours and Co.		5,500,000			139,150
Sigma-Aldrich Corp.		2,650,000			111,936
Freeport-McMoRan Copper & Gold Inc.		4,500,000			109,980
Weyerhaeuser Co.		3,583,000			109,676
Newmont Mining Corp.		2,500,000			101,750
BHP Billiton Ltd.1		4,675,000			100,439
Alcoa Inc.		8,150,000			91,769
Ecolab Inc.		1,600,000			56,240
Southern Peru Copper Corp.		2,800,000			44,968
United States Steel Corp.		1,000,000			37,200
Mosaic Co.		1,000,000			34,600
Vulcan Materials Co.		450,000			31,311
Norsk Hydro ASA1		6,500,000			26,422
Cliffs Natural Resources Inc.		1,000,000			25,610
Buzzi Unicem SpA, nonconvertible shares1		2,640,000			24,587
Grupo México, SAB de CV, Series B		36,757,713			23,458
Temple-Inland Inc.		1,500,000			7,200
					2,142,505


CONSUMER STAPLES — 5.19%
Wal-Mart Stores, Inc.		7,732,700			433,495
Philip Morris International Inc.		8,224,800			357,861
Altria Group, Inc.		14,996,000			225,840
Coca-Cola Co.		3,850,000			174,290
Avon Products, Inc.		6,880,000			165,326
Procter & Gamble Co.		1,600,000			98,912
Diageo PLC1		6,700,000			94,267
Kraft Foods Inc., Class A		3,400,000			91,290
Unilever NV, depository receipts1		2,995,000			72,749
Archer Daniels Midland Co.		1,310,000			37,767
C&C Group PLC1		8,884,742			18,035
					1,769,832


TELECOMMUNICATION SERVICES — 3.32%
AT&T Inc.		18,512,500			527,606
Verizon Communications Inc.		9,400,000			318,660
KDDI Corp.1		20,000			142,134
Vodafone Group PLC1		44,500,000			90,609
Qwest Communications International Inc.		10,500,000			38,220
Sprint Nextel Corp., Series 12		8,400,000			15,372
					1,132,601


UTILITIES — 2.82%
Questar Corp.		5,000,000			163,450
American Water Works Co., Inc.		7,785,000			162,551
Exelon Corp.		2,545,000			141,527
GDF Suez1		2,809,089			139,471
Edison International		3,250,000			104,390
Electricité de France SA1		1,734,000			101,032
FPL Group, Inc.		1,256,397			63,234
Duke Energy Corp.		3,000,000			45,030
E.ON AG1		500,000			20,269
Entergy Corp.		150,000			12,470
SUEZ Environnement Co.1,2		500,000			8,452
					961,876


MISCELLANEOUS — 3.40%
Other common stocks in initial period of acquisition					1,154,476


Total common stocks (cost: $37,451,706,000)					30,008,514



	Principal amount
Bonds & notes — 0.15%		(000	)

INDUSTRIALS — 0.15%
Burlington Northern Santa Fe Corp. 7.00% 2014	$	48,570			50,741


Total bonds & notes (cost: $48,559,000)					50,741




Short-term securities — 11.40%

Freddie Mac 0.25%–2.35% due 1/12–9/30/2009		1,086,444			1,085,086
Fannie Mae 0.10%–2.50% due 1/28–6/19/2009		778,500			777,788
Federal Home Loan Bank 0.22%–2.65% due 1/16–4/13/2009		594,900			594,597
U.S. Treasury Bills 1.89%–1.945% due 1/15–2/12/2009		188,800			188,795
Hewlett-Packard Co. 0.30%–2.20% due 1/7–2/12/20095		160,495			160,370
Walt Disney Co. 0.40%–1.70% due 1/13–4/6/2009		141,800			141,641
Procter & Gamble International Funding S.C.A. 0.35%–1.40% due 3/4–3/27/20095		84,500			84,457
Procter & Gamble Co. 1.75% due 2/10/20095		31,800			31,772
Illinois Tool Works Inc. 1.50%–1.85% due 1/8–1/12/2009		100,000			99,963
Honeywell International Inc. 0.28%–2.10% due 1/20–3/23/20095		65,000			64,946
AT&T Inc. 0.35%–2.10% due 1/9–1/20/20095		60,000			59,980
International Bank for Reconstruction and Development 1.00% due 2/18/2009		58,200			58,184
Bank of America Corp. 1.90% due 2/4/2009		50,000			50,002
Chevron Corp. 0.15% due 2/27/2009		50,000			49,984
United Parcel Service Inc. 0.50% due 3/3/20095		50,000			49,978
Federal Farm Credit Banks 1.00% due 3/25/2009		50,000			49,966
General Dynamics Corp. 2.30% due 1/16/20095		50,000			49,952
General Electric Capital Corp., FDIC insured, 0.75% due 2/9/2009		50,000			49,901
Park Avenue Receivables Co., LLC 1.40% due 1/14/20095		21,428			21,416
Jupiter Securitization Co., LLC 0.25% due 1/28/20095		19,700			19,696
Private Export Funding Corp. 0.15%–1.30% due 1/21–3/2/20095		40,100			40,063
Emerson Electric Co. 1.20% due 1/26/20095		36,000			35,969
Caterpillar Inc. 1.30% due 1/7/20095		17,300			17,295
Caterpillar Financial Services Corp. 1.30% due 1/5/2009		17,000			16,997
Merck & Co. Inc. 1.75% due 1/6/2009		29,300			29,293
Harvard University 1.07% due 2/5/2009		20,000			19,981
NetJets Inc. 1.05% due 1/20/20095		19,900			19,874
Estée Lauder Companies Inc. 1.25% due 1/12/20095		15,000			14,994
Medtronic Inc. 1.30% due 2/2/20095		3,900			3,892


Total short-term securities (cost: $3,882,013,000)					3,886,832

Total investment securities (cost: $41,382,278,000)					33,946,087
Other assets less liabilities					143,735

Net assets				$	34,089,822

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

1Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Miscellaneous,"

was $4,750,396,000, which represented 13.93% of the net assets of the fund.

2Security did not produce income during the last 12 months.

3Represents an affiliated company as defined under the Investment Company Act of 1940.

4Purchased in a transaction exempt from registration under the Securities Act of 1933. This security (acquired 10/2/2003 at a cost of $61,372,000) may be

subject to legal or contractual restrictions on resale.

5Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration,

normally to qualified institutional buyers. The total value of all such securities was $674,654,000, which represented 1.98% of the net assets of the fund.

Key to abbreviations

ADR = American Depositary Receipts

GDR = Global Depositary Receipts

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from your financial professional and should be read carefully before investing.

MFGEFP-910-0209O-S15839

Summary investment portfolio, December 31, 2008

The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings. For details on how to obtain a complete schedule of portfolio holdings, please see the inside back cover.

[begin pie chart]

Industry sector diversification (percent of net assets)

Information technology	17.61	%
Industrials	12.24
Health Care	11.87
Energy	10.54
Financials	7.58
Other industries	28.19
Bonds & Notes	0.15
Short-term securities & other assets less liabilities	11.82

[end pie chart]

Country diversification (percent of net assets)

United States	65.0	%
Euro zone *	9.1
Canada	3.9
Japan	1.7
Switzerland	3.4
United Kingdom	2.5
Other countries	2.4
Bonds, short-term securities & other assets less liabilities	12.0

*Countries using the euro as a common currency; those represented in the fund's
portfolio are Finland, France, Germany, Ireland, Italy and the Netherlands.

	Shares		Value (000)		Percent of net assets

Common stocks - 88.03%

Information technology - 17.61%
Nokia Corp. (ADR)		34,522,000	$	538,543
Nokia Corp. (1)		18,900,000		293,733		2.44	%
Oracle Corp. (2)		38,391,979		680,690		2.00
Microsoft Corp.		33,295,000		647,255		1.90
Cisco Systems, Inc. (2)		32,910,000		536,433		1.57
Google Inc., Class A (2)		1,200,000		369,180		1.08
Yahoo! Inc. (2)		28,160,000		343,552		1.01
EMC Corp. (2)		24,745,000		259,080		.76
Intuit Inc. (2)		9,975,000		237,305		.70
SAP AG (ADR)		6,500,000		235,430		.69
Other securities				1,863,433		5.46
				6,004,634		17.61

Industrials - 12.24%
Deere & Co.		10,500,000		402,360		1.18
Schneider Electric SA (1)		4,110,075		307,770		.90
Emerson Electric Co.		8,400,000		307,524		.90
Union Pacific Corp.		6,100,000		291,580		.86
General Electric Co.		14,700,000		238,140		.70
Caterpillar Inc.		5,217,500		233,066		.68
General Dynamics Corp.		3,545,800		204,203		.60
Northrop Grumman Corp.		4,366,243		196,655		.58
Other securities				1,991,558		5.84
				4,172,856		12.24

Health care - 11.87%
Merck & Co., Inc.		19,940,800		606,200		1.78
Roche Holding AG (1)		3,025,000		462,758		1.36
Eli Lilly and Co.		9,898,400		398,609		1.17
Wyeth		10,000,000		375,100		1.10
Bayer AG, non-registered shares (1)		4,670,000		275,019		.81
Abbott Laboratories		4,450,000		237,496		.69
C. R. Bard, Inc.		2,500,000		210,650		.62
Other securities				1,479,969		4.34
				4,045,801		11.87

Energy - 10.54%
Suncor Energy Inc.		36,866,206		717,658		2.10
Occidental Petroleum Corp.		6,804,244		408,186		1.20
Chevron Corp.		2,892,763		213,978		.63
Tenaris SA (ADR)		10,170,000		213,367		.63
EnCana Corp.		4,300,000		201,008		.59
Diamond Offshore Drilling, Inc.		3,332,000		196,388		.58
Murphy Oil Corp.		4,343,636		192,640		.56
CONSOL Energy Inc. (3)		6,700,000		191,486		.56
Other securities				1,258,694		3.69
				3,593,405		10.54

Financials - 7.58%
Wells Fargo & Co.		10,880,000		320,742		.94
Berkshire Hathaway Inc., Class A (2)		2,945		284,487		.84
JPMorgan Chase & Co.		8,000,000		252,240		.74
Bank of America Corp.		17,160,000		241,613		.71
U.S. Bancorp		8,712,000		217,887		.64
Citigroup Inc.		28,900,000		193,919		.57
Other securities				1,071,511		3.14
				2,582,399		7.58

Consumer discretionary - 7.18%
McDonald's Corp.		9,406,400		584,984		1.72
Lowe's Companies, Inc.		20,210,000		434,919		1.27
Other securities				1,428,226		4.19
				2,448,129		7.18

Materials - 6.28%
Syngenta AG (1)		2,025,400		389,946		1.14
Other securities				1,752,559		5.14
				2,142,505		6.28

Consumer staples - 5.19%
Wal-Mart Stores, Inc.		7,732,700		433,495		1.27
Philip Morris International Inc.		8,224,800		357,861		1.05
Altria Group, Inc.		14,996,000		225,840		.66
Other securities				752,636		2.21
				1,769,832		5.19

Telecommunication services - 3.32%
AT&T Inc.		18,512,500		527,606		1.55
Verizon Communications Inc.		9,400,000		318,660		.93
Other securities				286,335		.84
				1,132,601		3.32

Utilities- 2.82%
Other securities				961,876		2.82


Miscellaneous - 3.40%
Other common stocks in initial period of acquisition				1,154,476		3.40


Total common stocks (cost: $37,451,706,000)				30,008,514		88.03



			Value (000)			Percent of net assets
Bonds & notes - 0.15%


Industrials - 0.15%
Other securities				50,741		.15


Total bonds & notes (cost: $48,559,000)				50,741		.15



		Principal amount (000)	Value (000)			Percent of net assets
Short-term securities - 11.40%


Freddie Mac 0.25%-2.35% due 1/12-9/30/2009	$	1,086,444		1,085,086		3.18
Fannie Mae 0.10%-2.50% due 1/28-6/19/2009		778,500		777,788		2.28
Federal Home Loan Bank 0.22%-2.65% due 1/16-4/13/2009		594,900		594,597		1.74
U.S. Treasury Bills 1.89%-1.945% due 1/15-2/12/2009		188,800		188,795		.55
AT&T Inc. 0.35%-2.10% due 1/9-1/20/2009 (4)		60,000		59,980		.18
Emerson Electric Co. 1.20% due 1/26/2009 (4)		36,000		35,969		.11
Merck & Co. Inc. 1.75% due 1/6/2009		29,300		29,293		.09
Other securities				1,115,324		3.27


Total short-term securities (cost: $3,882,013,000)				3,886,832		11.40


Total investment securities (cost: $41,382,278,000)				33,946,087		99.58
Other assets less liabilities				143,735		.42

Net assets			$	34,089,822		100.00	%


"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio.

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the

fund's holdings in that company represent 5% or more of the outstanding voting shares of that company.

The value of the fund's holdings in affiliated companies is included in "Other securities"

under their respective industry sectors in the preceding summary investment portfolio. Further details on

these holdings and related transactions during the year ended December 31, 2008, appear below.

	Beginning shares		Additions		Reductions		Ending shares		Dividend income (000)		Value of affiliates at 12/31/08 (000)

Corporate Executive Board Co.		2,304,200		-		-		2,304,200	$	4,055	$	50,831
Grafton Group PLC, units (1)		9,500,000		5,150,000		-		14,650,000		3,122		47,441
C&C Group PLC (5)		16,055,047		-		7,170,305		8,884,742		5,019		-
Rohm and Haas Co.(5)		8,607,300		1,795,400		10,402,700		-		12,768		-
									$	24,964	$	98,272

The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.

(1) Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities,

including those in "Miscellaneous" and "Other securities," was $4,750,396,000, which represented 13.93% of the net assets of the fund.

(2) Security did not produce income during the last 12 months.

(3) Purchased in a transaction exempt from registration under the securities Act of 1933. This security (acquired 10/2/2003 at a cost of $61,372,000) may be subject to legal or contractual restrictions on resale.

(4) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt

from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities,"

was $674,654,000, which represented 1.98% of the net assets of the fund.

(5) Unaffiliated issuer at 12/31/2008.

Key to abbreviation

ADR = American Depositary Receipts

The industry classifications shown in the summary investment portfolio were obtained from sources

believed to be reliable and are not covered by the Report of Independent Registered Public Accounting Firm.

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities
at December 31, 2008	(dollars in thousands)

Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $41,061,272)	$	33,847,815
Affiliated issuers (cost: $321,006)		98,272	$	33,946,087
Cash denominated in currencies other than U.S. dollars
(cost: $1,467)				1,467
Cash				85
Receivables for:
Sales of investments		16,922
Sales of fund's shares		276,039
Dividends and interest		62,833		355,794
				34,303,433
Liabilities:
Payables for:
Purchases of investments		21,142
Repurchases of fund's shares		169,386
Investment advisory services		6,518
Services provided by affiliates		14,496
Directors' deferred compensation		1,826
Other		243		213,611
Net assets at December 31, 2008			$	34,089,822

Net assets consist of:
Capital paid in on shares of capital stock			$	44,360,313
Undistributed net investment income				199,930
Accumulated net realized loss				(3,033,957	)
Net unrealized depreciation				(7,436,464	)
Net assets at December 31, 2008			$	34,089,822

(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock - 2,500,000 shares, $1.00 par value (1,365,030 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*
Class A	$	24,443,154		978,357	$	24.98
Class B		924,219		37,088		24.92
Class C		1,468,473		58,985		24.90
Class F-1		2,931,565		117,383		24.97
Class F-2		91,669		3,669		24.98
Class 529-A		484,971		19,422		24.97
Class 529-B		54,050		2,166		24.96
Class 529-C		146,821		5,884		24.95
Class 529-E		21,291		853		24.95
Class 529-F-1		19,922		799		24.95
Class R-1		60,566		2,433		24.90
Class R-2		366,059		14,710		24.89
Class R-3		1,058,385		42,440		24.94
Class R-4		941,588		37,745		24.95
Class R-5		1,077,089		43,096		24.99

(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Classes A and 529-A, for which the maximum offering prices per share were $26.50 and $26.49, respectively.


See Notes to Financial Statements

Statement of operations
for the year ended December 31, 2008	(dollars in thousands)

Investment income:
Income:
Dividends (net of non-U.S.
taxes of $31,830; also includes
$24,964 from affiliates)	$	939,641
Interest		117,332		$	1,056,973


Fees and expenses*:
Investment advisory services		115,983
Distribution services		139,155
Transfer agent services		42,329
Administrative services		16,120
Reports to shareholders		3,317
Registration statement and prospectus		2,046
Postage, stationery and supplies		3,571
Directors' compensation		(570	)
Auditing and legal		129
Custodian		1,217
State and local taxes		1
Other		135
Total fees and expenses before waiver		323,433
Less investment advisory services waiver		11,598
Total fees and expenses after waiver					311,835
Net investment income					745,138

Net realized loss and unrealized
depreciation on investments
and currency:
Net realized loss on:
Investments (including $137,783 net gain from affiliates)		(3,025,394	)
Currency transactions		(2,823	)		(3,028,217	)
Net unrealized depreciation on:
Investments		(19,833,532	)
Currency translations		(247	)		(19,833,779	)
Net realized loss and
unrealized depreciation
on investments and currency					(22,861,996	)
Net decrease in net assets resulting
from operations				$	(22,116,858	)

(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.

See Notes to Financial Statements




Statements of changes in net assets		(dollars in thousands)

	Year ended December 31,
	2008			2007
Operations:
Net investment income	$	745,138		$	1,063,193
Net realized (loss) gain on investments
and currency transactions		(3,028,217	)		2,686,389
Net unrealized (depreciation) appreciation on investments
and currency translations		(19,833,779	)		1,808,390
Net (decrease) increase in net assets resulting from operations		(22,116,858	)		5,557,972

Dividends and distributions paid to
shareholders :
Dividends from net investment income		(721,047	)		(998,744	)
Distributions from net realized gain on investments		(316,888	)		(2,310,752	)
Total dividends and distributions paid to shareholders		(1,037,935	)		(3,309,496	)


Net capital share transactions		6,867,554			8,940,644

Total (decrease) increase in net assets		(16,287,239	)		11,189,120

Net assets:
Beginning of year		50,377,061			39,187,941
End of year (including undistributed
net investment income: $199,930 and $179,577, respectively)	$	34,089,822		$	50,377,061


See Notes to Financial Statements

Notes to financial statements

1.	Organization and significant accounting policies

Organization – Fundamental Investors, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks long-term growth of capital and income primarily through investments in common stocks.

The fund offers 15 share classes consisting of five retail share classes, five 529 college savings plan share classes and five retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Classes A and 529-A	Up to 5.75%	None (except 1% for certain redemptions within one year of purchase without an initial sales charge)	None
Classes B and 529-B	None	Declines from 5% to 0% for redemptions within six years of purchase	Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years
Class C	None	1% for redemptions within one year of purchase	Class C converts to Class F-1 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Classes F-1, F-2 and 529-F-1	None	None	None
Classes R-1, R-2, R-3, R-4 and R-5	None	None	None

On August 1, 2008, the fund made an additional retail share class (Class F-2) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”). In addition, Class F shares were renamed Class F-1 and Class 529-F shares were renamed Class 529-F-1. Refer to the fund’s prospectus for more details.

Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.

Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:

Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under procedures adopted by authority of the fund's board of directors. Market quotations may be considered unreliable if events occur that materially affect the value of securities (particularly securities outside the U.S.) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions.

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

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

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

Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.

2.	Risk factors

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

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

Investments in securities issued by entities based outside the United States may be subject to the risks described above to a greater extent and may also be affected by currency fluctuations and controls; different accounting, auditing, financial reporting, and legal standards and practices in some countries; expropriation; changes in tax policy; greater market volatility; differing securities market structures; higher transaction costs; and various administrative difficulties, such as delays in clearing and settling portfolio transactions or in receiving payment of dividends. These risks may be heightened in connection with investments in developing countries. Investments in securities issued by entities domiciled in the United States may also be subject to many of these risks.

3. Taxation and distributions

Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.

As of and during the period ended December 31, 2008, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2005, by state tax authorities for tax years before 2004 and by tax authorities outside the U.S. for tax years before 2005.

Non-U.S. taxation –Dividend income is recorded net of non-U.S. taxes paid. Gains realized by the fund on the sale of securities in certain countries are subject to non-U.S. taxes. The fund records a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities. For the year ended December 31, 2008, there were no non-U.S. taxes paid on realized gains. As of December 31, 2008, there was no liability for non-U.S. taxes based on unrealized gains.

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

During the year ended December 31, 2008, the fund reclassified $3,498,000 from undistributed net investment income to accumulated net realized loss and $240,000 from undistributed net investment income to capital paid in on shares of capital stock to align financial reporting with tax reporting.

As of December 31, 2008, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

(dollars in thousands)
Undistributed ordinary income	$	201,756
Capital loss carryforward expiring in 2016*		(1,885,675	)
Post-October capital loss deferrals (realized during the period November 1, 2008, through December 31, 2008)†		(1,140,924	)
Gross unrealized appreciation on investment securities		3,153,922
Gross unrealized depreciation on investment securities		(10,597,471	)
Net unrealized depreciation on investment securities		(7,443,549	)
Cost of investment securities		41,389,636
*The capital loss carryforward will be used to offset any capital gains realized by the fund in future years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains.
† These deferrals are considered incurred in the subsequent year.

The tax character of distributions paid to shareholders was as follows (dollars in thousands):

	Year ended December 31, 2008						Year ended December 31, 2007
Share class	Ordinary income		Long-term capital gains		Total distributions paid		Ordinary income		Long-term capital gains		Total distributions paid

Class A	$	557,598	$	241,668	$	799,266	$	809,465	$	1,788,460	$	2,597,925
Class B		11,804		10,319		22,123		23,044		76,989		100,033
Class C		16,584		13,050		29,634		26,701		93,931		120,632
Class F-1		60,738		21,382		82,120		61,524		146,701		208,225
Class F-2*		779		-		779		-		-		-
Class 529-A		9,941		4,136		14,077		12,265		29,043		41,308
Class 529-B		570		506		1,076		998		3,671		4,669
Class 529-C		1,515		1,251		2,766		2,393		8,837		11,230
Class 529-E		360		187		547		487		1,322		1,809
Class 529-F-1		424		134		558		404		908		1,312
Class R-1		628		389		1,017		710		2,590		3,300
Class R-2		3,842		3,036		6,878		6,021		21,466		27,487
Class R-3		16,994		7,755		24,749		18,381		52,112		70,493
Class R-4		17,908		6,485		24,393		16,207		39,566		55,773
Class R-5		21,362		6,590		27,952		20,144		45,156		65,300
Total	$	721,047	$	316,888	$	1,037,935	$	998,744	$	2,310,752	$	3,309,496


* Class F-2 was offered beginning August 1, 2008.

4. Fees and transactions with related parties

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

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.390% on the first $1 billion of daily net assets and decreasing to 0.232% on such assets in excess of $55 billion. CRMC waived a portion of its investment advisory services fee from September 1, 2004, through December 31, 2008. During the year ended December 31, 2008, total investment advisory services fees waived by CRMC were $11,598,000. As a result, the fee shown on the accompanying financial statements of $115,983,000, which was equivalent to an annualized rate of 0.254%, was reduced to $104,385,000, or 0.228% of average daily net assets.

Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:

Distribution services – The fund has adopted plans of distribution for all share classes, except Classes F-2 and R-5. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted below. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes except Classes F-2 and R-5 may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Classes A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of December 31, 2008, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.

Share class	Currently approved limits	Plan limits
Class A	0.25%	0.25%
Class 529-A	0.25	0.50
Classes B and 529-B	1.00	1.00
Classes C, 529-C and R-1	1.00	1.00
Class R-2	0.75	1.00
Classes 529-E and R-3	0.50	0.75
Classes F-1, 529-F-1 and R-4	0.25	0.50

Transfer agent services – The fund has a transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described below.

Administrative services – The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Classes A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. The quarterly fee is based on a declining series of annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described above for the year ended December 31, 2008, were as follows (dollars in thousands):

Share class	Distribution services	Transfer agent services	Administrative services
Share class	Distribution services	Transfer agent services	CRMC administrative services	Transfer agent services	Commonwealth of Virginia administrative services
Class A	$80,557	$40,731	Not applicable	Not applicable	Not applicable
Class B	13,828	1,598	Not applicable	Not applicable	Not applicable
Class C	19,214	Included in administrative services	$2,690	$365	Not applicable
Class F-1	8,841		3,367	304	Not applicable
Class F-2 *	Not applicable		21	3	Not applicable
Class 529-A	1,199		565	87	$612
Class 529-B	719		66	21	72
Class 529-C	1,855		171	47	186
Class 529-E	136		25	4	27
Class 529-F-1	-		21	3	23
Class R-1	655		63	44	Not applicable
Class R-2	3,405		681	1,457	Not applicable
Class R-3	6,137		1,840	703	Not applicable
Class R-4	2,609		1,542	45	Not applicable
Class R-5	Not applicable		1,042	23	Not applicable
Total	$139,155	$42,329	$12,094	$3,106	$920

* Class F-2 was offered beginning August 1, 2008.

Directors’ deferred compensation – Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $(570,000), shown on the accompanying financial statements, includes $394,000 in current fees (either paid in cash or deferred) and a net decrease of $964,000 in the value of the deferred amounts.

Affiliated officers and directors – Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.

5. Disclosure of fair value measurements

The fund adopted the Statement of Financial Accounting Standards No. 157 (“FAS 157”), Fair Value Measurements, on January 1, 2008. FAS 157 requires the fund to classify its assets and liabilities into three levels based on the method used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are generally high quality and liquid; however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of December 31, 2008 (dollars in thousands):

Investment securities
Level 1 – Quoted prices	$	25,258,118
Level 2 – Other significant observable inputs		8,687,969	(*)
Level 3 – Significant unobservable inputs		-
Total	$	33,946,087

(*) Includes certain securities trading primarily outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading; therefore, $4,750,396,000 of investment securities were classified as Level 2 instead of Level 1.

6. Capital share transactions

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

Share class	Sales(*)				Reinvestments of dividends and distributions				Repurchases(*)						Net increase (decrease)
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended December 31, 2008
Class A	$	7,911,594		231,401	$	763,364		22,342	$	(6,050,793	)		(191,212	)	$	2,624,165			62,531
Class B		276,235		7,940		21,439		636		(363,229	)		(10,840	)		(65,555	)		(2,264	)
Class C		785,133		22,623		28,519		865		(416,578	)		(13,019	)		397,074			10,469
Class F-1		2,763,196		78,243		72,793		2,178		(1,213,116	)		(39,270	)		1,622,873			41,151
Class F-2†		116,845		4,125		650		25		(12,665	)		(481	)		104,830			3,669
Class 529-A		190,435		5,390		14,075		417		(50,723	)		(1,537	)		153,787			4,270
Class 529-B		14,144		400		1,076		33		(5,318	)		(159	)		9,902			274
Class 529-C		62,565		1,765		2,766		84		(19,014	)		(572	)		46,317			1,277
Class 529-E		7,990		228		547		16		(2,522	)		(75	)		6,015			169
Class 529-F-1		14,406		390		558		17		(2,864	)		(88	)		12,100			319
Class R-1		55,324		1,583		1,012		32		(18,085	)		(537	)		38,251			1,078
Class R-2		240,522		6,876		6,875		210		(120,579	)		(3,509	)		126,818			3,577
Class R-3		835,509		23,703		24,701		750		(317,096	)		(9,313	)		543,114			15,140
Class R-4		850,916		23,655		24,370		735		(258,547	)		(7,396	)		616,739			16,994
Class R-5		800,099		24,178		27,167		814		(196,142	)		(5,773	)		631,124			19,219
Total net increase
(decrease)	$	14,924,913		432,500	$	989,912		29,154	$	(9,047,271	)		(283,781	)	$	6,867,554			177,873

Year ended December 31, 2007
Class A	$	6,456,455		150,249	$	2,483,027		58,072	$	(4,147,003	)		(96,202	)	$	4,792,479			112,119
Class B		235,580		5,496		96,689		2,265		(166,258	)		(3,864	)		166,011			3,897
Class C		687,356		16,009		116,095		2,721		(205,156	)		(4,780	)		598,295			13,950
Class F-1		1,620,221		37,361		185,210		4,331		(467,079	)		(10,793	)		1,338,352			30,899
Class 529-A		195,316		4,545		41,303		966		(30,624	)		(708	)		205,995			4,803
Class 529-B		15,494		361		4,669		109		(3,171	)		(73	)		16,992			397
Class 529-C		63,670		1,483		11,229		263		(12,819	)		(297	)		62,080			1,449
Class 529-E		7,666		179		1,809		42		(1,862	)		(43	)		7,613			178
Class 529-F-1		9,733		225		1,312		31		(2,366	)		(55	)		8,679			201
Class R-1		40,043		927		3,279		77		(10,137	)		(236	)		33,185			768
Class R-2		238,540		5,572		27,471		644		(101,887	)		(2,364	)		164,124			3,852
Class R-3		733,841		17,019		70,429		1,648		(193,827	)		(4,485	)		610,443			14,182
Class R-4		506,361		11,794		55,763		1,306		(143,084	)		(3,308	)		419,040			9,792
Class R-5		547,603		12,544		63,750		1,490		(93,997	)		(2,173	)		517,356			11,861
Total net increase
(decrease)	$	11,357,879		263,764	$	3,162,035		73,965	$	(5,579,270	)		(129,381	)	$	8,940,644			208,348


(*) Includes exchanges between share classes of the fund.
† Class F-2 was offered beginning August 1, 2008.

7. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $19,004,890,000 and $12,131,021,000, respectively, during the year ended December 31, 2008.

Financial highlights (1)

		(Loss) income from investment operations(2)				Dividends and distributions
	Net asset value, beginning of period	Net investment income (3)		Net (losses) gains on securities (both realized and unrealized)	Total from investment operations	Dividends (from net investment income)	Distributions (from capital gains)	Total dividends and distributions	Net asset value, end of period	Total return (4) (5)	Net assets, end of period (in millions)	Ratio of expenses to average net assets before reimbursements /waivers	Ratio of expenses to average net assets after reimbursements /waivers (5)	Ratio of net income to average net assets (3) (5)
Class A:
Year ended 12/31/2008	$42.45	$.60	$	(17.23)	$(16.63)	$(.58)	$(.26)	$(.84)	$24.98	(39.70%)	$24,443	.63%	.61%	1.70%
Year ended 12/31/2007	40.05	1.03		4.39	5.42	(.95)	(2.07)	(3.02)	42.45	13.55	38,877	.60	.57	2.40
Year ended 12/31/2006	35.40	.62		6.16	6.78	(.56)	(1.57)	(2.13)	40.05	19.24	32,187	.61	.58	1.60
Year ended 12/31/2005	32.25	.58		3.16	3.74	(.59)	-	(.59)	35.40	11.68	24,390	.62	.60	1.75
Year ended 12/31/2004	28.85	.61		3.35	3.96	(.56)	-	(.56)	32.25	13.91	21,543	.63	.63	2.05
Class B:
Year ended 12/31/2008	42.35	.34		(17.20)	(16.86)	(.31)	(.26)	(.57)	24.92	(40.14)	924	1.39	1.37	.94
Year ended 12/31/2007	39.96	.70		4.38	5.08	(.62)	(2.07)	(2.69)	42.35	12.70	1,667	1.36	1.33	1.63
Year ended 12/31/2006	35.33	.32		6.14	6.46	(.26)	(1.57)	(1.83)	39.96	18.33	1,417	1.38	1.35	.83
Year ended 12/31/2005	32.19	.33		3.15	3.48	(.34)	-	(.34)	35.33	10.84	1,090	1.39	1.36	.99
Year ended 12/31/2004	28.80	.38		3.35	3.73	(.34)	-	(.34)	32.19	13.03	971	1.40	1.39	1.29
Class C:
Year ended 12/31/2008	42.31	.32		(17.17)	(16.85)	(.30)	(.26)	(.56)	24.90	(40.16)	1,468	1.43	1.41	.90
Year ended 12/31/2007	39.92	.70		4.36	5.06	(.60)	(2.07)	(2.67)	42.31	12.65	2,053	1.41	1.38	1.62
Year ended 12/31/2006	35.30	.30		6.13	6.43	(.24)	(1.57)	(1.81)	39.92	18.23	1,380	1.43	1.41	.77
Year ended 12/31/2005	32.17	.30		3.15	3.45	(.32)	-	(.32)	35.30	10.76	776	1.45	1.43	.91
Year ended 12/31/2004	28.78	.37		3.34	3.71	(.32)	-	(.32)	32.17	12.96	566	1.47	1.46	1.24
Class F-1:
Year ended 12/31/2008	42.43	.60		(17.22)	(16.62)	(.58)	(.26)	(.84)	24.97	(39.69)	2,932	.62	.60	1.72
Year ended 12/31/2007	40.03	1.06		4.36	5.42	(.95)	(2.07)	(3.02)	42.43	13.55	3,235	.61	.58	2.45
Year ended 12/31/2006	35.39	.62		6.15	6.77	(.56)	(1.57)	(2.13)	40.03	19.21	1,815	.61	.58	1.58
Year ended 12/31/2005	32.24	.57		3.16	3.73	(.58)	-	(.58)	35.39	11.64	662	.66	.63	1.71
Year ended 12/31/2004	28.84	.59		3.35	3.94	(.54)	-	(.54)	32.24	13.84	463	.70	.70	2.02
Class F-2:
Period from 8/1/2008 to 12/31/2008	37.09	.23		(11.97)	(11.74)	(.37)	-	(.37)	24.98	(31.78)	92	.17	.16	.88
Class 529-A:
Year ended 12/31/2008	42.42	.58		(17.21)	(16.63)	(.56)	(.26)	(.82)	24.97	(39.71)	485	.68	.65	1.66
Year ended 12/31/2007	40.02	1.03		4.36	5.39	(.92)	(2.07)	(2.99)	42.42	13.49	643	.66	.64	2.37
Year ended 12/31/2006	35.38	.60		6.15	6.75	(.54)	(1.57)	(2.11)	40.02	19.16	414	.66	.63	1.55
Year ended 12/31/2005	32.24	.55		3.15	3.70	(.56)	-	(.56)	35.38	11.60	231	.70	.67	1.66
Year ended 12/31/2004	28.84	.59		3.34	3.93	(.53)	-	(.53)	32.24	13.77	146	.73	.72	2.00
Class 529-B:
Year ended 12/31/2008	42.41	.30		(17.22)	(16.92)	(.27)	(.26)	(.53)	24.96	(40.20)	54	1.50	1.47	.84
Year ended 12/31/2007	40.01	.66		4.38	5.04	(.57)	(2.07)	(2.64)	42.41	12.57	80	1.48	1.46	1.53
Year ended 12/31/2006	35.37	.27		6.16	6.43	(.22)	(1.57)	(1.79)	40.01	18.18	60	1.50	1.47	.71
Year ended 12/31/2005	32.23	.27		3.16	3.43	(.29)	-	(.29)	35.37	10.66	40	1.54	1.52	.82
Year ended 12/31/2004	28.83	.33		3.35	3.68	(.28)	-	(.28)	32.23	12.83	29	1.59	1.59	1.13
Class 529-C:
Year ended 12/31/2008	42.40	.30		(17.22)	(16.92)	(.27)	(.26)	(.53)	24.95	(40.21)	147	1.49	1.47	.85
Year ended 12/31/2007	40.00	.67		4.37	5.04	(.57)	(2.07)	(2.64)	42.40	12.58	195	1.48	1.45	1.56
Year ended 12/31/2006	35.37	.28		6.14	6.42	(.22)	(1.57)	(1.79)	40.00	18.16	126	1.49	1.47	.71
Year ended 12/31/2005	32.23	.27		3.16	3.43	(.29)	-	(.29)	35.37	10.68	71	1.53	1.51	.83
Year ended 12/31/2004	28.83	.34		3.34	3.68	(.28)	-	(.28)	32.23	12.84	45	1.58	1.58	1.14
Class 529-E:
Year ended 12/31/2008	42.40	.48		(17.21)	(16.73)	(.46)	(.26)	(.72)	24.95	(39.90)	21	.98	.96	1.36
Year ended 12/31/2007	40.00	.88		4.38	5.26	(.79)	(2.07)	(2.86)	42.40	13.14	29	.97	.95	2.05
Year ended 12/31/2006	35.36	.48		6.15	6.63	(.42)	(1.57)	(1.99)	40.00	18.80	20	.97	.95	1.23
Year ended 12/31/2005	32.23	.44		3.15	3.59	(.46)	-	(.46)	35.36	11.24	12	1.02	.99	1.34
Year ended 12/31/2004	28.83	.49		3.35	3.84	(.44)	-	(.44)	32.23	13.40	7	1.06	1.05	1.66

Class 529-F-1:
Year ended 12/31/2008	$42.39	$.64	$	(17.19)	$(16.55)	$(.63)	$(.26)	$(.89)	$24.95	(39.59%)	$20	.48%	.46%	1.84%
Year ended 12/31/2007	40.00	1.13		4.33	5.46	(1.00)	(2.07)	(3.07)	42.39	13.69	20	.47	.45	2.62
Year ended 12/31/2006	35.36	.67		6.15	6.82	(.61)	(1.57)	(2.18)	40.00	19.40	11	.47	.45	1.73
Year ended 12/31/2005	32.22	.59		3.15	3.74	(.60)	-	(.60)	35.36	11.68	5	.58	.56	1.76
Year ended 12/31/2004	28.82	.58		3.33	3.91	(.51)	-	(.51)	32.22	13.73	2	.81	.80	1.95
Class R-1:
Year ended 12/31/2008	42.31	.32		(17.18)	(16.86)	(.29)	(.26)	(.55)	24.90	(40.16)	61	1.43	1.41	.91
Year ended 12/31/2007	39.93	.72		4.33	5.05	(.60)	(2.07)	(2.67)	42.31	12.62	57	1.44	1.42	1.67
Year ended 12/31/2006	35.31	.29		6.13	6.42	(.23)	(1.57)	(1.80)	39.93	18.19	23	1.47	1.43	.74
Year ended 12/31/2005	32.18	.29		3.16	3.45	(.32)	-	(.32)	35.31	10.74	11	1.50	1.46	.88
Year ended 12/31/2004	28.79	.37		3.33	3.70	(.31)	-	(.31)	32.18	12.92	6	1.53	1.49	1.26
Class R-2:
Year ended 12/31/2008	42.30	.30		(17.17)	(16.87)	(.28)	(.26)	(.54)	24.89	(40.19)	366	1.49	1.47	.85
Year ended 12/31/2007	39.92	.70		4.34	5.04	(.59)	(2.07)	(2.66)	42.30	12.61	471	1.46	1.40	1.62
Year ended 12/31/2006	35.29	.30		6.14	6.44	(.24)	(1.57)	(1.81)	39.92	18.26	291	1.54	1.41	.77
Year ended 12/31/2005	32.17	.30		3.14	3.44	(.32)	-	(.32)	35.29	10.73	155	1.64	1.43	.91
Year ended 12/31/2004	28.77	.38		3.34	3.72	(.32)	-	(.32)	32.17	13.02	93	1.76	1.45	1.29
Class R-3:
Year ended 12/31/2008	42.38	.48		(17.20)	(16.72)	(.46)	(.26)	(.72)	24.94	(39.89)	1,058	.98	.95	1.37
Year ended 12/31/2007	39.98	.92		4.34	5.26	(.79)	(2.07)	(2.86)	42.38	13.17	1,157	.97	.94	2.12
Year ended 12/31/2006	35.35	.47		6.14	6.61	(.41)	(1.57)	(1.98)	39.98	18.75	525	.99	.96	1.21
Year ended 12/31/2005	32.21	.45		3.16	3.61	(.47)	-	(.47)	35.35	11.26	220	1.01	.98	1.35
Year ended 12/31/2004	28.82	.50		3.33	3.83	(.44)	-	(.44)	32.21	13.41	125	1.05	1.04	1.69
Class R-4:
Year ended 12/31/2008	42.39	.58		(17.19)	(16.61)	(.57)	(.26)	(.83)	24.95	(39.70)	942	.67	.65	1.68
Year ended 12/31/2007	39.99	1.05		4.34	5.39	(.92)	(2.07)	(2.99)	42.39	13.51	879	.66	.64	2.42
Year ended 12/31/2006	35.36	.59		6.14	6.73	(.53)	(1.57)	(2.10)	39.99	19.12	438	.67	.65	1.52
Year ended 12/31/2005	32.22	.55		3.16	3.71	(.57)	-	(.57)	35.36	11.61	205	.69	.66	1.66
Year ended 12/31/2004	28.83	.60		3.33	3.93	(.54)	-	(.54)	32.22	13.85	80	.69	.69	2.04
Class R-5:
Year ended 12/31/2008	42.46	.69		(17.23)	(16.54)	(.67)	(.26)	(.93)	24.99	(39.53)	1,077	.37	.35	1.98
Year ended 12/31/2007	40.06	1.18		4.34	5.52	(1.05)	(2.07)	(3.12)	42.46	13.81	1,014	.37	.34	2.73
Year ended 12/31/2006	35.41	.71		6.16	6.87	(.65)	(1.57)	(2.22)	40.06	19.50	481	.38	.35	1.83
Year ended 12/31/2005	32.26	.65		3.17	3.82	(.67)	-	(.67)	35.41	11.94	265	.39	.36	1.96
Year ended 12/31/2004	28.86	.68		3.35	4.03	(.63)	-	(.63)	32.26	14.19	141	.39	.39	2.31

	Year ended December 31
	2008			2007			2006			2005			2004

Portfolio turnover rate for all classes of shares		29	%		27	%		21	%		24	%		30	%

(1) Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.

(2) Based on average shares outstanding.

(3) For the year ended December 31, 2007, this column reflects the impact of a corporate action event that

resulted in a one-time increase to net investment income. If the corporate action had not occurred,

the Class A net investment income per share and ratio of net income to average net assets would

have been lower by $0.39 and 0.90%, respectively. The impact to the other share classes would have

been approximately the same.

(4) Total returns exclude any applicable sales charges, including contingent deferred sales charges.

(5) This column reflects the impact, if any, of certain reimbursements/waivers from CRMC.

During the periods shown, CRMC reduced fees for investment advisory services. In addition, during

some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.

See Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Fundamental Investors, Inc.:

We have audited the accompanying statement of assets and liabilities, including the summary investment portfolio, of Fundamental Investors, Inc. (the “Fund”), as of December 31, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fundamental Investors, Inc. as of December 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Costa Mesa, California

February 9, 2009

Tax information

unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended December 31, 2008:

Long-term capital gains	$	316,888,000
Qualified dividend income		100	%
Corporate dividends received deduction	$	626,660,000
U.S. government income that may be exempt from state taxation	$	19,248,000

Individual shareholders should refer to their Form 1099 or other tax information, which was mailed in January 2009, to determine the calendar year amounts to be included on their 2008 tax returns. Shareholders should consult their tax advisers.

...

Fundamental Investors, Inc.

Part C

Other Information

Item 23. Exhibits for Registration Statement (1940 Act No. 002-10760 and 1933 Act No. 811-00032)

(a-1)

Articles of Incorporation - previously filed (see P/E Amendment No. 81 filed 2/28/97, No. 85 filed 3/13/00, No. 86 filed 3/8/01, No. 87 filed 2/15/02, No. 93 filed 2/28/07 No. 95 filed 7/1/08 and No. 96 filed 2/27/09)

(a-2)

Articles Supplementary as filed with the State of Maryland 3/20/09

(b)	By-laws – By-laws as amended 5/15/07 – previously filed (see P/E Amendment No. 94 filed 2/29/08)

(c)	Instruments Defining Rights of Security Holders – Form of share certificate – previously filed (see P/E Amendment No. 86 filed 3/8/01)

(d)	Investment Advisory Contracts – Amended Investment Advisory and Service Agreement dated 9/1/07 – previously filed (see P/E Amendment No. 94 filed 2/29/08)

(e-1)

Underwriting Contracts – Form of Selling Group Agreements – previously filed (see P/E Amendment No. 88 filed 5/13/02); Form of Institutional Selling Group Agreement (see P/E Amendment No. 91 filed 2/28/05); Form of Amendment to Selling Group Agreement effective 11/1/06 – previously filed (see P/E Amendment No. 93 filed 2/28/07); Form of Amendment to Selling Group Agreement effective 2/1/07 – previously filed (see P/E Amendment No. 93 filed 2/28/07); Form of Amendment to Institutional Selling Group Agreement effective 2/1/07 – previously filed (see P/E Amendment No. 94 filed 2/29/08); Form of Amended and Restated Principal Underwriting Agreement dated 6/16/08 – previously filed (see P/E Amendment No. 95 filed 7/1/08); and Form of Amendment to Selling Group Agreement effective 10/1/08 – previously filed (see P/E Amendment No. 96 filed 2/27/09); Form of Amendment to Institutional Selling Group Agreement effective 10/1/08 – previously filed (see P/E Amendment No. 96 filed 2/27/09); Form of Class F Share Participation Agreement – previously filed (see P/E Amendment No. 96 filed 2/27/09); Form of Amendment to Class F Share Participation Agreement effective 8/1/08 – previously filed (see P/E Amendment No. 96 filed 2/27/09); Form of Bank/Trust Company Participation Agreement for Class F Shares – previously filed (see P/E Amendment No. 96 filed 2/27/09); and Form of Amendment to Bank/Trust Company Participation Agreement for Class F Shares effective 8/1/08 – previously filed (see P/E Amendment No. 96 filed 2/27/09)

(e-2)

Form of Amended and Restated Principal Underwriting Agreement effective 5/1/09; Form of Amendment to Selling Group Agreement effective 5/1/09; Form of Amendment to Institutional Selling Group Agreement effective 5/1/09; Form of Amendment to Bank/Trust Company Selling Group Agreement effective 5/1/09; Form of Amendment to Class F Share Participation Agreement effective 5/1/09; and Form of Amendment to Bank/Trust Company Participation Agreement for Class F Shares effective 5/1/09

(f)	Bonus or Profit Sharing Contracts – Form of Deferred Compensation Plan as amended 1/1/08 – previously filed (see P/E Amendment No. 94 filed 2/29/08)

(g)	Custodian Agreements – Form of Global Custody Agreement dated 12/14/06 – previously filed (see P/E Amendment No. 93 filed 2/28/07)

(h-1)

Other Material Contracts - Amended Shareholder Services Agreement as of 4/1/03 - previously filed (see P/E Amendment No. 90 filed 2/26/04); and Form of Indemnification Agreement dated 7/1/04 – previously filed – see P/E Amendment 91 filed 2/28/05); Form of Amendment to Shareholder Services Agreement dated 11/1/06 – previously filed (see P/E Amendment No. 93 filed 2/28/07); Form of Amended and Restated Administrative Service Agreement dated 6/16/08 – previously filed (see P/E Amendment No. 95 filed 7/1/08); Form of Amendment of Amended Shareholder Services Agreement dated 11/1/08 – previously filed (see P/E Amendment No. 96 filed 2/27/09)

(h-2)

Form of Amended and Restated Administrative Services Agreement effective 5/1/09

(i- 1)

Legal Opinion – Legal Opinion previously filed (see P/E Amendment No. 85 filed 3/13/00, No. 86 filed 3/8/01, No. 87 filed 2/15/02, No. 88 filed 5/13/02, No. 95 filed 7/1/08)

(i-2)

Legal Opinion

(j)	Other Opinions – Consent of Independent Registered Public Accounting Firm

(k)	Omitted Financial Statements - none

(l)	Initial capital agreements - not applicable to this filing

(m)

Rule 12b-1 Plan – Forms of Plans of Distribution – Class A Plan of Distribution - previously filed (No. 81 filed 2/28/97); Class 529-A – previously filed (see P/E Amendment No. 87 filed 2/15/02; and Forms of Amended Plans of Distribution for Classes B, C, F, 529-B, 529-C, 529-E, 529-F and R-1, R-2, R-3 and R-4 dated 8/18/05 – previously filed (see P/E Amendment No. 92 filed 2/28/06); Forms of Amendment to Plan of Distribution – Class F-1 and Class 529-F-1 dated 6/16/08 – previously filed (see P/E Amendment No. 95 filed 7/1/08)

(n)	Rule 18f-3 – Form of Amended and Restated Multiple Class Plan effective 5/1/09

(o)

Reserved

(p)	Code of Ethics – Code of Ethics for The Capital Group Companies dated December 2008; and Code of Ethics for Registrant dated December 2005

Item 24. Persons Controlled by or under Common Control with the Fund

None

Item 25. Indemnification

The Registrant is a joint-insured under Investment Adviser/Mutual Fund Errors and Omissions Policies, which insure its officers and directors against certain liabilities. However, in no event will Registrant maintain insurance to indemnify any such person for any act for which Registrant itself is not permitted to indemnify the individual.

Section 2-418 (b) of The Annotated Code of Maryland states:

Permitted indemnification of director:

1.	A corporation may indemnify any director made a party to any proceeding by reason of service in that capacity unless it is established that

(i)

The act or omission of the director was material to the matter giving rise to the proceeding; and

1. Was committed in bad faith; or

2. Was the result of active and deliberate dishonesty; or

(ii)

The director actually received an improper personal benefit in money, property, or services; or

(iii)

In the case of any criminal proceeding, the director had reasonable cause to believe that the act or omission was unlawful.

(i)

Indemnification may be against judgments, penalties, fines, settlements, and reasonable expenses actually incurred by the director in connection with the proceeding.

(ii)

However, if the proceeding was one by or in the right of the corporation, indemnification may not be made in respect of any proceeding in which the director shall have been adjudged to be liable to the corporation.

Article VIII of the Registrant's Articles of Incorporation and Article V of the Registrant’s By-Laws as well as the indemnification agreements that the Registrant has entered into with each of its directors who is not an “interested person” of the Registrant (as defined under the Investment Company Act of 1940, as amended), provide in effect that the Registrant will indemnify its officers and directors against any liability or expenses actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the Registrant, to the fullest extent permitted by applicable law, subject to certain conditions. In accordance with Section 17(h) and 17(i) of the Investment Company Act of 1940, as amended, and their respective terms, these provisions do not protect any person against any liability to the Registrant or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Registrant will comply with the indemnification requirements contained in the Investment Company Act of 1940, as amended, and Release Nos. 7221 (June 9, 1972) and 11330 (September 4, 1980).

Item 26. Business and Other Connections of the Investment Adviser

None

Item 27. 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, American Funds Target Date Retirement Series, Inc., 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., The Bond Fund of America, Inc., Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World Growth and Income Fund, Inc., The Cash Management Trust of America, Endowments, EuroPacific Growth Fund, The Growth Fund of America, Inc., The Income Fund of America, Inc., Intermediate Bond Fund of America, International Growth and Income Fund, Inc., The Investment Company of America, Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc., Short-Term Bond Fund of America, 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) Name and Principal Business Address	(2) Positions and Offices with Underwriter	(3) Positions and Offices with Registrant
LAO	E. Grant Abramson	Vice President	None
LAO	David L. Abzug	Vice President	None
LAO	William C. Anderson	Vice President	None
LAO	Robert B. Aprison	Senior Vice President	None
LAO	T. Patrick Bardsley	Regional Vice President	None
LAO	Shakeel A. Barkat	Vice President	None
LAO	Thomas M. Bartow	Senior Vice President	None
IRV	Carl R. Bauer	Vice President	None
LAO	Michelle A. Bergeron	Senior Vice President	None
LAO	J. Walter Best, Jr.	Senior Vice President	None
LAO	Roger J. Bianco, Jr.	Regional Vice President	None
LAO	John A. Blanchard	Senior Vice President	None
LAO	Randall L. Blanchetti	Regional Vice President	None
LAO	Gerard M. Bockstie, Jr.	Regional Vice President	None
LAO	Jonathan W. Botts	Regional Vice President	None
LAO	Bill Brady	Senior Vice President	None
LAO	Mick L. Brethower	Senior Vice President	None
LAO	C. Alan Brown	Vice President	None
IRV	William H. Bryan	Regional Vice President	None
LAO	Sheryl M. Burford	Assistant Vice President	None
IRV	J. Peter Burns	Vice President	None
LAO	Steven Calabria	Vice President	None
LAO	Thomas E. Callahan	Regional Vice President	None
SNO	Kathleen D. Campbell	Vice President	None
LAO	Matthew C. Carlisle	Vice President	None
LAO	Jason S. Carlough	Regional Vice President	None
LAO	Damian F. Carroll	Vice President	None
LAO	James D. Carter	Regional Vice President	None
LAO	Brian C. Casey	Senior Vice President	None
LAO	Victor C. Cassato	Senior Vice President	None
LAO	Christopher J. Cassin	Senior Vice President	None
LAO	Denise M. Cassin	Director, Senior Vice President and Director of AFIG and Dealer Relations	None
LAO	David D. Charlton	Director, Senior Vice President and Director Individual Investor and Advisory Business	None
LAO	Thomas M. Charon	Vice President	None
LAO	Wellington Choi	Vice President	None
LAO	Paul A. Cieslik	Vice President	None
LAO	Kevin G. Clifford	Director, President and Chief Executive Officer	None
HRO	Cheri Coleman	Vice President	None
LAO	Ruth M. Collier	Director, Senior Vice President	None
SNO	David Coolbaugh	Vice President	None
LAO	Carlo O. Cordasco	Regional Vice President	None
LAO	Charles H. Cote	Regional Vice President	None
LAO	Michael D. Cravotta	Assistant Vice President	None
LAO	Joseph G. Cronin	Vice President	None
LAO	D. Erick Crowdus	Regional Vice President	None
LAO	Christopher J. Curran	Regional Vice President	None
LAO	William F. Daugherty	Vice President	None
LAO	Peter J. Deavan	Regional Vice President	None
LAO	Guy E. Decker	Vice President	None
LAO	Daniel J. Delianedis	Senior Vice President	None
LAO	James W. DeLouise	Assistant Vice President	None
LAO	Jeffrey C. Denny	Regional Vice President	None
	James A. DePerno, Jr. 570 Porterville Road East Aurora, NY 14052	Senior Vice President	None
LAO	Bruce L. DePriester	Director, Senior Vice President, Treasurer and Controller	None
LAO	Lori A. Deuberry	Regional Vice President	None
LAO	Dianne M. Dexter	Assistant Vice President	None
LAO	Thomas J. Dickson	Vice President	None
LAO	Michael A. DiLella	Senior Vice President	None
NYO	Dean M. Dolan	Vice President	None
LAO	Hedy B. Donahue	Assistant Vice President	None
LAO	Michael J. Downer	Director	None
LAO	Craig A. Duglin	Regional Vice President	None
LAO	Michael J. Dullaghan	Vice President	None
IND	Lloyd G. Edwards	Senior Vice President	None
LAO	Timothy L. Ellis	Senior Vice President	None
LAO	Kristopher A. Feldmeyer	Regional Vice President	None
LAO	Lorna Fitzgerald	Vice President	None
LAO	William F. Flannery	Vice President	None
LAO	John R. Fodor	Director, Executive Vice President	None
LAO	Charles L. Freadhoff	Vice President	None
LAO	Daniel B. Frick	Vice President	None
LAO	Linda S. Gardner	Vice President	None
LAO	Keith R. George	Regional Vice President	None
IRV	Lori A. Giacomini	Assistant Vice President	None
LAO	J. Christopher Gies	Senior Vice President	None
LAO	David M. Givner	Secretary	None
LAO	Jack E. Goldin	Regional Vice President	None
LAO	Earl C. Gottschalk	Vice President	None
LAO	Jeffrey J. Greiner	Director, Senior Vice President	None
LAO	Eric M. Grey	Vice President	None
NYO	Maura S. Griffin	Assistant Vice President	None
LAO	Christopher M. Guarino	Senior Vice President	None
IRV	Steven Guida	Director, Senior Vice President	None
IRV	Mariellen Hamann	Vice President	None
LAO	Derek S. Hansen	Vice President	None
LAO	Calvin L. Harrelson, III	Vice President	None
LAO	Robert J. Hartig, Jr.	Vice President	None
LAO	Craig W. Hartigan	Regional Vice President	None
LAO	Linda M. Hines	Vice President	None
LAO	Russell K. Holliday	Vice President	None
LAO	Heidi Horwitz-Marcus	Regional Vice President	None
LAO	Kevin B. Hughes	Vice President	None
LAO	Ronald R. Hulsey	Senior Vice President	None
LAO	Marc Ialeggio	Vice President	None
LAO	Robert S. Irish	Senior Vice President	None
HRO	Jill Jackson-Chavis	Vice President	None
IND	David K. Jacocks	Assistant Vice President	None
LAO	Krista M. Johnson	Assistant Vice President	None
LAO	Linda Johnson	Vice President	None
GVO-1	Joanna F. Jonsson	Director	None
IRV	Damien M. Jordan	Senior Vice President	None
LAO	Marc J. Kaplan	Vice President	None
LAO	John P. Keating	Senior Vice President	None
LAO	Brian G. Kelly	Regional Vice President	None
LAO	Ryan C. Kidwell	Regional Vice President	None
LAO	Andrew J. Kilbride	Vice President	None
LAO	Mark Kistler	Regional Vice President	None
NYO	Dorothy Klock	Vice President	None
LAO	Dianne L. Koske	Vice President	None
IRV	Elizabeth K. Koster	Vice President	None
LAO	Christopher F. Lanzafame	Regional Vice President	None
LAO	Patricia D. Lathrop	Regional Vice President	None
IRV	Laura Lavery	Vice President	None
	R. Andrew LeBlanc 78 Eton Road Garden City, NY 11530	Vice President	None
LAO	Clay M. Leveritt	Regional Vice President	None
LAO	Susan B. Lewis	Assistant Vice President	None
LAO	T. Blake Liberty	Vice President	None
LAO	Mark J. Lien	Vice President	None
LAO	Lorin E. Liesy	Vice President	None
LAO	Louis K. Linquata	Vice President	None
HRO	Maria M. Lockard	Assistant Vice President	None
	Brendan T. Mahoney 1 Union Avenue, Suite One Sudbury, MA 01776	Vice President	None
LAO	Nathan G. Mains	Regional Vice President	None
	Stephen A. Malbasa 13405 Lake Shore Blvd. Cleveland, OH 44110	Director, Senior Vice President and Director of Retirement Plan Business	None
LAO	Paul R. Mayeda	Assistant Vice President	None
LAO	Eleanor P. Maynard	Vice President	None
LAO	Christopher McCarthy	Vice President	None
LAO	James R. McCrary	Vice President	None
LAO	Joseph A. McCreesh, III	Regional Vice President	None
LAO	Will McKenna	Vice President	None
SNO	John V. McLaughlin	Senior Vice President	None
LAO	Scott M. Meade	Senior Vice President	None
LAO	Daniel P. Melehan	Regional Vice President	None
LAO	William T. Mills	Regional Vice President	None
LAO	James R. Mitchell III	Regional Vice President	None
LAO	Charles L. Mitsakos	Regional Vice President	None
LAO	Monty L. Moncrief	Vice President	None
LAO	David H. Morrison	Regional Vice President	None
LAO	Andrew J. Moscardini	Vice President	None
LAO	Brian D. Munson	Regional Vice President	None
LAO	Jack Nitowitz	Assistant Vice President	None
LAO	William E. Noe	Senior Vice President	None
LAO	Matthew P. O’Connor	Vice President	None
LAO	Jonathan H. O’Flynn	Regional Vice President	None
LAO	Eric P. Olson	Senior Vice President	None
LAO	Jeffrey A. Olson	Vice President	None
LAO	Thomas A. O’Neil	Regional Vice President	None
LAO	Shawn M. O’Sullivan	Regional Vice President	None
LAO	Michael W. Pak	Regional Vice President	None
LAO	W. Burke Patterson, Jr.	Vice President	None
LAO	Gary A. Peace	Senior Vice President	None
LAO	Samuel W. Perry	Vice President	None
LAO	Raleigh G. Peters	Regional Vice President	None
LAO	David K. Petzke	Senior Vice President	None
IRV	John H. Phelan, Jr.	Director	None
LAO	Fredric Phillips	Senior Vice President	None
LAO	John Pinto	Vice President	None
LAO	Carl S. Platou	Senior Vice President	None
LAO	Charles R. Porcher	Regional Vice President	None
LAO	Julie K. Prather	Vice President	None
SNO	Richard P. Prior	Vice President	None
LAO	Steven J. Quagrello	Regional Vice President	None
LAO	Mike Quinn	Vice President	None
LAO	John W. Rankin	Regional Vice President	None
LAO	Jennifer D. Rasner	Regional Vice President	None
LAO	James P. Rayburn	Regional Vice President	None
LAO	Rene M. Reincke	Vice President	None
LAO	Mark S. Reischmann	Regional Vice President	None
LAO	Steven J. Reitman	Senior Vice President	None
LAO	Brian A. Roberts	Vice President	None
LAO	Jeffrey Robinson	Regional Vice President	None
LAO	Suzette M. Rothberg	Regional Vice President	None
LAO	James F. Rothenberg	Non-Executive Chairman and Director	Vice Chairman
LAO	Romolo D. Rottura	Vice President	None
LAO	Douglas F. Rowe	Senior Vice President	None
LAO	William M. Ryan	Regional Vice President	None
LAO	Dean B. Rydquist	Director, Senior Vice President, Chief Compliance Officer	None
LAO	Richard A. Sabec, Jr.	Vice President	None
LAO	Richard R. Samson	Senior Vice President	None
HRO	Diane Sawyer	Senior Vice President	None
LAO	Joseph D. Scarpitti	Senior Vice President	None
LAO	Kim D. Schmidt	Assistant Vice President	None
LAO	Shane D. Schofield	Vice President	None
LAO	David L. Schroeder	Assistant Vice President	None
LAO	Mark A. Seaman	Vice President	None
SNO	Sherrie L. Senft	Vice President	None
LAO	James J. Sewell III	Regional Vice President	None
LAO	Arthur M. Sgroi	Vice President	None
LAO	Steven D. Shackelford	Regional Vice President	None
LAO	R. Michael Shanahan	Director	None
LAO	Michael J. Sheldon	Vice President	None
LAO	Frederic J. Shipp	Regional Vice President	None
LAO	Daniel S. Shore	Vice President	None
LAO	Brad Short	Vice President	None
LAO	Nathan W. Simmons	Regional Vice President	None
LAO	William P. Simon, Jr.	Director, Senior Vice President	None
LAO	Connie F. Sjursen	Vice President	None
LAO	Jerry L. Slater	Senior Vice President	None
LAO-W	John H. Smet	Director	None
LAO	Rodney G. Smith	Senior Vice President	None
SNO	Stacy D. Smolka	Assistant Vice President	None
LAO	J. Eric Snively	Regional Vice President	None
LAO	Anthony L. Soave	Vice President	None
LAO	Therese L. Soullier	Vice President	None
LAO	Nicholas D. Spadaccini	Senior Vice President	None
LAO	Kristen J. Spazafumo	Vice President	None
LAO	Mark D. Steburg	Vice President	None
LAO	Michael P. Stern	Regional Vice President	None
LAO	Brad Stillwagon	Vice President	None
LAO	Thomas A. Stout	Vice President	None
LAO	Craig R. Strauser	Senior Vice President	None
LAO	Libby J. Syth	Vice President	None
LAO	Drew W. Taylor	Senior Vice President	None
LAO	Larry I. Thatt	Assistant Vice President	None
LAO	Gary J. Thoma	Vice President	None
LAO	Cynthia M. Thompson	Vice President	None
LAO	David R. Therrien	Assistant Vice President	None
LAO	John B. Thomas	Regional Vice President	None
LAO	Mark R. Threlfall	Regional Vice President	None
LAO	David Tippets	Regional Vice President	None
IND	James P. Toomey	Vice President	None
LAO	Luke N. Trammel	Regional Vice President	None
IND	Christopher E. Trede	Vice President	None
LAO	Scott W. Ursin-Smith	Director, Senior Vice President	None
SNO	Cindy Vaquiax	Vice President	None
LAO	Srinkanth Vemuri	Regional Vice President	None
LAO	J. David Viale	Senior Vice President	None
DCO	Bradley J. Vogt	Director	None
LAO	Sherrie S. Walling	Assistant Vice President	None
SNO	Chris L. Wammack	Assistant Vice President	None
LAO	Thomas E. Warren	Senior Vice President	None
LAO	Gregory J. Weimer	Senior Vice President	None
SFO	Gregory W. Wendt	Director	None
LAO	George J. Wenzel	Vice President	None
LAO	Jason M. Weybrecht	Regional Vice President	None
LAO	Brian E. Whalen	Vice President	None
LAO	William C. Whittington	Regional Vice President	None
LAO	N. Dexter Williams, Jr.	Senior Vice President	None
LAO	Alan J. Wilson	Director	None
LAO	Andrew L. Wilson	Vice President	None
LAO	Steven C. Wilson	Regional Vice President	None
LAO	Timothy J. Wilson	Director, Senior Vice President	None
LAO	Kurt A. Wuestenberg	Vice President	None
	William R. Yost 9463 Olympia Drive Eden Prairie, MN 55347	Senior Vice President	None
LAO	Jason P. Young	Vice President	None
LAO	Jonathan A. Young	Regional Vice President	None

__________

DCO	Business Address, 3000 K Street N.W., Suite 230, Washington, DC 20007-5140
GVO-1	Business Address, 3 Place des Bergues, 1201 Geneva, Switzerland
HRO	Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
IND	Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
IRV	Business Address, 6455 Irvine Center Drive, Irvine, CA 92618
LAO	Business Address, 333 South Hope Street, Los Angeles, CA 90071
LAO-W	Business Address, 11100 Santa Monica Blvd., 15th Floor, Los Angeles, CA 90025
NYO	Business Address, 630 Fifth Avenue, 36th Floor, New York, NY 10111
SFO	Business Address, One Market, Steuart Tower, Suite 1800, San Francisco, CA 94105
SNO	Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251

Item 28.

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 held in the offices of the Registrant’s investment adviser, Capital Research and Management Company, 333 South Hope Street, Los Angeles, California 90071; 6455 Irvine Center Drive, Irvine, California 92618; and/or 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering shareholder accounts are maintained and kept by its transfer agent, American Funds Service Company, 6455 Irvine Center Drive, Irvine, California 92618; 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240; 10001 North 92nd Street, Suite 100; Scottsdale, Arizona 85258; 3500 Wiseman Boulevard, San Antonio, Texas 78251; and 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering portfolio transactions are maintained and kept by its custodian, State Street Bank and Trust Company, One Lincoln Street, Boston, Massachusetts 02111.

Item 29.

Management Services

None

Item 30.

Undertakings

n/a

SIGNATURES

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 under Rule 485(b) under the Securities Act of 1933 and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City and County of San Francisco, and State of California on the 31st day of March, 2009.

FUNDAMENTAL INVESTORS, INC.

By: /s/ Patrick F. Quan

(Patrick F. Quan, Secretary)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below on March 31, 2009, by the following persons in the capacities indicated.

	Signature	Title
(1)	Principal Executive Officer:
	/s/ Paul G. Haaga, Jr. (Paul G. Haaga, Jr.)	Executive Vice President

(2)	Principal Financial Officer and Principal Accounting Officer:
	/s/ Jeffrey P. Regal (Jeffrey P. Regal)	Treasurer

(3)	Directors:
	Ronald P. Badie*	Director
	Joseph C. Berenato*	Director
	Louise H. Bryson*	Director
	Robert J. Denison*	Director
	Robert A. Fox*	Director
	Leonade D. Jones*	Director
	John G. McDonald*	Director
	Gail L. Neale*	Director
	/s/ Dina N. Perry	President and Director
	(Dina N. Perry)
	Henry E. Riggs*	Chairman of the Board (Independent and Non-Executive)
	/s/ James F. Rothenberg	Vice Chairman
	(James F. Rothenberg)
	Patricia K. Woolf*	Director
	/s/ Patrick F. Quan
	(Patrick F. Quan, Attorney-in-Fact, Powers of Attorney enclosed)

Counsel represents that the amendment does not contain disclosures that would make the amendment ineligible for effectiveness under the provisions of Rule 485(b).

/s/ Katherine H. Newhall

(Katherine H. Newhall, Counsel)

POWER OF ATTORNEY

I, Ronald P. Badie, the undersigned Board member of the following registered investment companies(collectively, the “Funds”):

-	Endowments (File No. 002-34371, File No. 811-01884)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Fund and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Dori Laskin

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Fund on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Flintridge, CA, this 25th day of August, 2008.

(City, State)

/s/ Ronald P. Badie

Ronald P. Badie, Board member

POWER OF ATTORNEY

I, Joseph C. Berenato, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-	Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

David A. Pritchett

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Carson, CA, this 8th day of August, 2008.

(City, State)

/s/ Joseph C. Berenato

Joseph C. Berenato, Board member

POWER OF ATTORNEY

I, Louise H. Bryson, the undersigned Board member of the following registered investment companies(collectively, the “Funds”):

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Fund and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Jeffrey P. Regal

Carmelo Spinella

EXECUTED at Los Angeles, CA, this 7th day of August, 2008.

(City, State)

/s/ Louise H. Bryson

Louise H. Bryson, Board member

POWER OF ATTORNEY

I, Robert J. Denison, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-	Capital World Growth and Income Fund (File No. 033-54444, File No. 811-07338)

-	Endowments (File No. 002-34371, File No. 811-01884)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Dori Laskin

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Santa Fe, NM, this 8th day of August, 2008.

(City, State)

/s/ Robert J. Denison

Robert J. Denison, Board member

POWER OF ATTORNEY

I, Robert A. Fox, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	EuroPacific Growth Fund (File No. 002-83847, File No. 811-03734)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	International Growth and Income Fund, Inc. (File No. 333-152323, File No. 811-22215)

-	New Perspective Fund, Inc. (File No. 002-47749, File No. 811-02333)

-	New World Fund, Inc. (File No. 333-67455, File No. 811-09105)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Jennifer M. Buchheim

Bryan K. Nielsen

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Reno, NV, this 8th day of August, 2008.

(City, State)

/s/ Robert A. Fox

Robert A. Fox, Board member

POWER OF ATTORNEY

I, Leonade D. Jones, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	International Growth and Income Fund, Inc. (File No. 333-152323, File No. 811-22215)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Jennifer M. Buchheim

David A. Pritchett

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Washington, DC, this 11th day of August, 2008.

(City, State)

/s/ Leonade D. Jones

Leonade D. Jones, Board member

POWER OF ATTORNEY

I, John G. McDonald, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	EuroPacific Growth Fund (File No. 002-83847, File No. 811-03734)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	International Growth and Income Fund, Inc. (File No. 333-152323, File No. 811-22215)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	New Perspective Fund, Inc. (File No. 002-47749, File No. 811-02333)

-	New World Fund, Inc. (File No. 333-67455, File No. 811-09105)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Jennifer M. Buchheim

Bryan K. Nielsen

Jeffrey P. Regal

Carmelo Spinella

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Stanford, CA, this 6th day of August, 2008.

(City, State)

/s/ John G. McDonald

John G. McDonald, Board member

POWER OF ATTORNEY

I, Gail L. Neale, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-	Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Burlington, VT, this 7th day of August, 2008.

(City, State)

/s/ Gail L. Neale

Gail L. Neale, Board member

POWER OF ATTORNEY

I, Henry E. Riggs, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	International Growth and Income Fund, Inc. (File No. 333-152323, File No. 811-22215)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Jennifer M. Buchheim

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Stanford, CA, this 11th day of August, 2008.

(City, State)

/s/ Henry E. Riggs

Henry E. Riggs, Board member

POWER OF ATTORNEY

I, Patricia K. Woolf, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	International Growth and Income Fund, Inc. (File No. 333-152323, File No. 811-22215)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Jennifer M. Buchheim

David A. Pritchett

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Princeton, NJ, this 6th day of August, 2008.

(City, State)

/s/ Patricia K. Woolf

Patricia K. Woolf, Board member

EX-99.A CHARTER 2 exha.htm EXHIBIT A exha.htm

FUNDAMENTAL INVESTORS, INC.

ARTICLES SUPPLEMENTARY

Fundamental Investors, Inc., a Maryland corporation having its principal office in Baltimore, Maryland (the “Corporation”), certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: (a) The Board of Directors of the Corporation has divided and further classified the authorized, but unissued shares common stock of the Corporation, par value $1.00 per share, into 1 additional class, designated “Class R-6”. The remaining shares of common stock, including the shares currently issued and outstanding, shall consist of the previously designated Class A, Class B, Class C, Class F-1, Class F-2, Class R-1, Class R-2, Class R-3, Class R-4, Class R-5, Class 529-A, Class 529-B, Class 529-C, Class 529-E and Class 529-F-1 shares. The authorized shares of each such class of common stock shall consist of the sum of (x) the outstanding shares of that class and (y) one-sixteenth (1/16) of the authorized but unissued shares of all classes of common stock; provided however, that in the event application of the above formula would result, at the time, in fractional shares of one or more classes, the number of authorized shares of each such class shall be rounded down to the nearest whole number of shares; and provided, further, that at all times the aggregate number of authorized Class A, Class B, Class C, Class F-1, Class F-2, Class R-1, Class R-2, Class R-3, Class R-4, Class R-5, Class R-6, Class 529-A, Class 529-B, Class 529-C, Class 529-E and Class 529-F-1 shares of common stock shall not exceed the authorized number of shares of common stock (i.e., 2,500,000,000 shares) until changed by action of the Board of Directors in accordance with Section 2-208.1 of the Maryland General Corporation Law.

(b) The preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the Class A, Class B, Class C, Class F-1, Class F-2, Class R-1, Class R-2, Class R-3, Class R-4, Class R-5, Class 529-A, Class 529-B, Class 529-C, Class 529-E and Class 529-F-1 shares are set forth in the Charter of the Corporation. The preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the Class R-6 shares of the Corporation are set forth below.

SECOND: Except to the extent provided otherwise by the Charter of the Corporation, all classes of shares of the Corporation shall represent an equal proportionate interest in the assets of the Corporation (subject to the liabilities of the Corporation) and each share shall have identical voting, dividend, liquidation and other rights; provided, however, that notwithstanding anything in the Charter of the Corporation to the contrary:

(i) Each class of shares of the Corporation may be issued and sold subject to different sales loads or charges, whether initial, deferred or contingent, or any combination thereof, as may be established from time to time by the Board of Directors in accordance with the Investment Company Act of 1940, as amended, and applicable rules and regulations of self-regulatory organizations and as shall be set forth in the applicable prospectus for the shares;

(ii) Expenses, costs and charges which are determined by or under the supervision of the Board of Directors to be attributable to the shares of a particular class may be charged to that class and appropriately reflected in the net asset value of, and/or dividends payable on, the shares of that class; and

(iii) Subject to the provisions in the Charter of the Corporation pertaining to the exchange rights of Class B, Class C and Class 529-B shares, each class of shares of the Corporation may have such different exchange rights as the Board of Directors shall provide in compliance with the Investment Company Act of 1940.

THIRD: The foregoing amendment to the Charter of the Corporation does not increase the authorized capital stock of the Corporation.

FOURTH: The aforesaid shares have been duly classified by the Board of Directors pursuant to authority and power contained in the Charter of the Corporation.

IN WITNESS WHEREOF, the Corporation has caused these presents to be signed in its name and on its behalf by its Executive Vice President and Principal Executive Officer and attested by its Secretary on this 10th day of March, 2009.

FUNDAMENTAL INVESTORS, INC.

By: /s/ Paul G. Haaga, Jr.

Paul G. Haaga, Jr.

Executive Vice President and

Principal Executive Officer

ATTEST:

By: /s/ Patrick F. Quan

Patrick F. Quan

Secretary

The undersigned, Executive Vice President and Principal Executive Officer of Fundamental Investors, Inc. who executed on behalf of said Corporation the foregoing Articles Supplementary of which this certificate is made a part, acknowledges in the name and on behalf of the Corporation the foregoing Articles Supplementary to be the corporate act of the Corporation and certifies that, to the best of his knowledge, information and belief, the matters and facts set forth therein with respect to the authorization and approval thereof are true in all material respects under the penalties of perjury.

/s/ Paul G. Haaga, Jr.

Paul G. Haaga, Jr.

Executive Vice President and

Principal Executive Officer

EX-99.E UNDR CONTR 3 exhe.htm EXHIBIT E Unassociated Document

FORM OF

AMENDED AND RESTATED PRINCIPAL UNDERWRITING AGREEMENT

THIS AMENDED AND RESTATED PRINCIPAL UNDERWRITING AGREEMENT, is between [Name of Fund], a [State of Formation] [corporation/business trust] (the "Fund"), and AMERICAN FUNDS DISTRIBUTORS, INC., a California corporation (the "Distributor").

W I T N E S S E T H:

WHEREAS, the Fund is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end diversified investment company which offers sixteen classes of shares of [common stock/beneficial interest], designated as Class A shares, Class B shares, Class C shares, Class F-1 shares, Class F-2 shares, Class 529-A shares, Class 529-B shares, Class 529-C shares, Class 529-E shares, Class 529-F-1 shares, Class R-1 shares, Class R-2 shares, Class R-3 shares, Class R-4 shares, Class R-5 shares, and Class R-6 shares, and it is a part of the business of the Fund, and affirmatively in the interest of the Fund, to offer shares of the Fund either from time to time or continuously as determined by the Fund's officers subject to authorization by its Board of [Directors/Trustees]; and

WHEREAS, the Distributor is engaged in the business of promoting the distribution of shares of investment companies through securities broker-dealers; and

WHEREAS, the Fund and the Distributor wish to enter into an agreement with each other to promote the distribution of the shares of the Fund and of all series or classes of the Fund which may be established in the future;

NOW, THEREFORE, the parties agree as follows:

1. (a) The Distributor shall be the exclusive principal underwriter for the sale of the shares of the Fund and of each series or class of the Fund which may be established in the future, except as otherwise provided pursuant to the following subsection (b). The terms "shares of the Fund" or "shares" as used herein shall mean shares of [common stock/beneficial interest] of the Fund and each series or class which may be established in the future and become covered by this Agreement in accordance with Section 31 of this Agreement.

(b) The Fund may, upon 60 days written notice to the Distributor, from time to time designate other principal underwriters of its shares with respect to areas other than the North American continent, Hawaii, Puerto Rico, and such countries or other jurisdictions as to which the Fund may have expressly waived in writing its right to make such designation. In the event of such designation, the right of the Distributor under this Agreement to sell shares in the areas so designated shall terminate, but this Agreement shall remain otherwise in full force and effect until terminated in accordance with the other provisions hereof.

2. In the sale of shares of the Fund, the Distributor shall act as agent of the Fund except in any transaction in which the Distributor sells such shares as a dealer to the public, in which event the Distributor shall act as principal for its own account.

3. The Fund shall sell shares only through the Distributor, except that the Fund may, to the extent permitted by the 1940 Act and the rules and regulations promulgated thereunder or pursuant thereto, at any time:

(a) issue shares to any corporation, association, trust, partnership or other organization, or its, or their, security holders, beneficiaries or members, in connection with a merger, consolidation or reorganization to which the Fund is a party, or in connection with the acquisition of all or substantially all the property and assets of such corporation, association, trust, partnership or other organization;

(b) issue shares at net asset value to the holders of shares of capital stock or beneficial interest of other investment companies served as investment adviser by any affiliated company or companies of The Capital Group Companies, Inc., to the extent of all or any portion of amounts received by such shareholders upon redemption or repurchase of their shares by the other investment companies;

(c) issue shares at net asset value to its shareholders in connection with the reinvestment of dividends paid and other distributions made by the Fund;

(d) issue shares at net asset value to persons entitled to purchase shares at net asset value without sales charge or contingent deferred sales charge as described in the Fund's current Registration Statement in effect under the Securities Act of 1933, as amended, for each series issued by the Fund at the time of such offer or sale.

4. The Distributor shall devote its best efforts to the sale of shares of the Fund and shares of any other mutual funds served as investment adviser by affiliated companies of The Capital Group Companies, Inc., and insurance contracts funded by shares of such mutual funds, for which the Distributor has been authorized to act as principal underwriter for the sale of shares. The Distributor shall maintain a sales organization suited to the sale of shares of the Fund and shall use its best efforts to effect such sales in jurisdictions as to which the Fund shall have expressly waived in writing its right to designate another principal underwriter pursuant to subsection 1(b) hereof, and shall effect and maintain appropriate qualification to do so in all those jurisdictions in which it sells or offers shares for sale and in which qualification is required.

5. Within the United States of America, all dealers to whom the Distributor shall offer and sell shares must be duly licensed and qualified to sell shares of the Fund. Shares sold to dealers shall be for resale by such dealers only at the public offering price set forth in the current Prospectus of the Fund's Registration Statement in effect under the Securities Act of 1933, as amended ("Prospectus"). The Distributor shall not, without the consent of the Fund, sell or offer for sale any shares of a series or class issued by the Fund other than as principal underwriter pursuant to this Agreement.

6. In its sales to dealers, it shall be the responsibility of the Distributor to insure that such dealers are appropriately qualified to transact business in the shares under applicable laws, rules and regulations promulgated by such national, state, local or other governmental or quasi-governmental authorities as may in a particular instance have jurisdiction.

7. The applicable public offering price of shares shall be the price which is equal to the net asset value per share, as shall be determined by the Fund in the manner and at the time or times set forth in and subject to the provisions of the Prospectus of the Fund.

8. All orders for shares received by the Distributor shall, unless rejected by the Distributor or the Fund, be accepted by the Distributor immediately upon receipt and confirmed at an offering price determined in accordance with the provisions of the Prospectus and the 1940 Act, and applicable rules in effect thereunder. The Distributor shall not hold orders subject to acceptance nor otherwise delay their execution. The provisions of this Section shall not be construed to restrict the right of the Fund to withhold shares from sale under Section 26 hereof.

9. The Fund or its transfer agent shall be promptly advised of all orders received, and shall cause shares to be issued upon payment therefor in New York or Los Angeles Clearing House Funds.

10. The Distributor shall adopt and follow procedures as approved by the officers of the Fund for the confirmation of sales to dealers, the collection of amounts payable by dealers on such sales, and the cancellation of unsettled transactions, as may be necessary to comply with the requirements of the Securities and Exchange Commission or the Financial Industry Regulatory Authority ("FINRA"), as such requirements may from time to time exist.

11. The Distributor, as principal underwriter under this Agreement for Class A shares, shall receive (i) that part of the sales charge which is retained by the Distributor after allowance of discounts to dealers, unless waived by the Distributor for certain qualified fee-based programs, as set forth in the Prospectus of the Fund, and (ii) amounts payable to the Distributor pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class A shares.

12. The Distributor, as principal underwriter under this agreement for Class B shares shall receive (i) distribution fees as commissions for the sale of Class B shares and contingent deferred sales charges ("CDSC") (as defined below), as set forth in the Fund's Prospectus, and (ii) shareholder service fees at the rate of 0.25% per annum of the average net asset value of Class B shares pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class B shares (the "Class B Plan").

(a) In accordance with the Class B Plan, and subject to the limit on asset-based sales charges set forth in NASD Conduct Rule 2830 (and any successor provision thereto), the Fund shall pay to the Distributor or, at the Distributor's direction, to a third-party, monthly in arrears on or prior to the 10th business day of the following calendar month, the Distributor's Allocable Portion (as defined below) of a fee (the "Distribution Fee") which shall accrue daily in an amount equal to the product of (A) the daily equivalent of 0.75% per annum multiplied by (B) the net asset value of the Class B shares of the Fund outstanding on such day. The Fund agrees to withhold from redemption proceeds of the Class B shares, the Distributor's Allocable Portion of any CDSCs payable with respect to the Class B shares, as provided in the Fund's Prospectus, and to pay the same over to the Distributor or, at the Distributor's direction to a third-party, at the time the redemption proceeds are payable to the holder of such shares redeemed. Payment of these CDSC amounts to the Distributor is not contingent upon the adoption or continuation of any Class B Plan.

(b) For purposes of this Agreement, the term "Allocable Portion" of Distribution Fees and CDSCs payable with respect to Class B shares shall mean the portion of such Distribution Fees and CDSC allocated to the Distributor in accordance with the Allocation Schedule attached hereto as Schedule A.

(c) The Distributor shall be considered to have completely earned the right to the payment of its Allocable Portion of the Distribution Fees and the right to payment of its Allocable Portion of the CDSCs with respect to each "Commission Share" (as defined in the Allocation Schedule attached hereto as Schedule A) upon the settlement date of such Commission Share taken into account in determining the Distributor's Allocable Portion of Distribution Fees.

(d) The provisions set forth in Section 1 of the Class B Plan (in effect on the date hereof) relating to Class B shares, together with the related definitions are hereby incorporated into this Section 12 by reference with the same force and effect as if set forth herein in their entirety.

13. The Distributor, as principal underwriter under this agreement for Class C shares shall receive (i) distribution fees as commissions for the sale of Class C shares and CDSCs, as set forth in the Fund's Prospectus, and (ii) shareholder service fees at the rate of 0.25% per annum of the average net asset value of Class C shares pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class C shares (the "Class C Plan").

(a) In accordance with the Class C Plan, and subject to the limit on asset-based sales charges set forth in NASD Conduct Rule 2830 (and any successor provision thereto), the Fund shall pay to the Distributor, no more frequently than monthly in arrears within 30 days of receipt of an invoice for payment, the Distributor's Allocable Portion (as defined below) of a fee (the "Distribution Fee") which shall accrue daily in an amount equal to the daily equivalent of 0.75% per annum of the net asset value of the Class C shares outstanding on such day. The Fund agrees to withhold from redemption proceeds of the Class C shares, the Distributor's Allocable Portion of any CDSCs payable with respect to the Class C shares, as provided in the Fund's Prospectus and to pay the same over to the Distributor, or, at the Distributor's direction to a third party, at the time the redemption proceeds are payable to the holder of such shares redeemed. Payment of these CDSC amounts to the Distributor is not contingent upon the adoption or continuation of any Class C Plan.

(b) For purposes of this Agreement, the term "Allocable Portion" of Distribution Fees and CDSCs payable with respect to Class C shares shall mean the portion of such Distribution Fees and CDSC allocated to the Distributor in accordance with the Allocation Schedule attached hereto as Schedule B.

(c) The Distributor shall be considered to have completely earned the right to the payment of its Allocable Portion of the Distribution Fees and the right to payment of its Allocable Portion of the CDSCs with respect to each "Commission Share" (as defined in the Allocation Schedule attached hereto as Schedule B) upon the settlement date of such Commission Share taken into account in determining the Distributor's Allocable Portion of Distribution Fees.

(d) The provisions set forth in Section 1 of the Class C Plan (in effect on the date hereof) relating to Class C shares, together with the related definitions are hereby incorporated into this Section 13 by reference with the same force and effect as if set forth herein in their entirety.

14. The Distributor, as principal underwriter under this agreement for Class F-1 shares, shall receive shareholder service fees at the rate of 0.25% per annum of the average net asset value of Class F-1 shares pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class F-1 shares (the "Class F-1 Plan").

15. The Distributor, as principal underwriter under this Agreement for Class F-2 shares, shall receive no compensation.

16. The Distributor, as principal underwriter under this Agreement for Class 529-A shares, shall receive (i) that part of the sales charge which is retained by the Distributor after allowance of discounts to dealers, unless waived by the Distributor for certain qualified fee-based programs, as set forth in the Prospectus of the Fund, and (ii) amounts payable to the Distributor pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class 529-A shares.

17. The Distributor, as principal underwriter under this agreement for Class 529-B shares shall receive (i) distribution fees as compensation for the sale of Class 529-B shares and CDSCs, as set forth in the Fund's Prospectus, and (ii) shareholder service fees at the rate of 0.25% per annum of the average net asset value of Class 529-B shares pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class 529-B shares (the "Class 529-B Plan").

(a) In accordance with the Class 529-B Plan, and subject to the limit on asset-based sales charges set forth in NASD Conduct Rule 2830 (and any successor provision thereto), the Fund shall pay to the Distributor or, at the Distributor's direction, to a third-party, monthly in arrears on or prior to the 10th business day of the following calendar month, the Distributor's Allocable Portion (as defined below) of a fee (the "Distribution Fee") which shall accrue daily in an amount equal to the product of (A) the daily equivalent of 0.75% per annum multiplied by (B) the net asset value of the Class 529-B shares of the Fund outstanding on such day. The Fund agrees to withhold from redemption proceeds of the Class 529-B shares, the Distributor's Allocable Portion of any CDSCs payable with respect to the Class 529-B shares, as provided in the Fund's Prospectus, and to pay the same over to the Distributor or, at the Distributor's direction to a third party, at the time the redemption proceeds are payable to the holder of such shares redeemed. Payment of these CDSC amounts to the Distributor is not contingent upon the adoption or continuation of any Class 529-B Plan.

(b) For purposes of this Agreement, the term "Allocable Portion" of Distribution Fees and CDSCs payable with respect to Class 529-B shares shall mean the portion of such Distribution Fees and CDSC allocated to the Distributor in accordance with the Allocation Schedule attached hereto as Schedule C.

(c) The Distributor shall be considered to have completely earned the right to the payment of its Allocable Portion of the Distribution Fees and the right to payment of its Allocable Portion of the CDSCs with respect to each "Commission Share" (as defined in the Allocation Schedule attached hereto as Schedule C) upon the settlement date of such Commission Share taken into account in determining the Distributor's Allocable Portion of Distribution Fees.

(d) The provisions set forth in Section 1 of the Class 529-B Plan (in effect on the date hereof) relating to Class 529-B shares, together with the related definitions are hereby incorporated into this Section 17 by reference with the same force and effect as if set forth herein in their entirety.

18. The Distributor, as principal underwriter under this agreement for Class 529-C shares shall receive (i) distribution fees as compensation for the sale of Class 529-C shares and CDSCs, as set forth in the Fund's Prospectus, and (ii) shareholder service fees at the rate of 0.25% per annum of the average net asset value of Class 529-C shares pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class 529-C shares (the "Class 529-C Plan").

(a) In accordance with the Class 529-C Plan, and subject to the limit on asset-based sales charges set forth in NASD Conduct Rule 2830 (and any successor provision thereto), the Fund shall pay to the Distributor, no more frequently than monthly in arrears within 30 days of receipt of an invoice for payment, the Distributor's Allocable Portion (as defined below) of a fee (the "Distribution Fee") which shall accrue daily in an amount equal to the product of (A) the daily equivalent of 0.75% per annum multiplied by (B) the net asset value of the Class 529-C shares of the Fund outstanding on such day. The Fund agrees to withhold from redemption proceeds of the Class 529-C shares, the Distributor's Allocable Portion of any CDSCs payable with respect to the Class 529-C shares, as provided in the Fund's Prospectus, and to pay the same over to the Distributor or, at the Distributor's direction to a third party, at the time the redemption proceeds are payable to the holder of such shares redeemed. Payment of these CDSC amounts to the Distributor is not contingent upon the adoption or continuation of any Class 529-C Plan.

(b) For purposes of this Agreement, the term "Allocable Portion" of Distribution Fees and CDSCs payable with respect to Class 529-C shares shall mean the portion of such Distribution Fees and CDSC allocated to the Distributor in accordance with the Allocation Schedule attached hereto as Schedule D.

(c) The Distributor shall be considered to have completely earned the right to the payment of its Allocable Portion of the Distribution Fees and the right to payment of its Allocable Portion of the CDSCs with respect to each "Commission Share" (as defined in the Allocation Schedule attached hereto as Schedule D) upon the settlement date of such Commission Share taken into account in determining the Distributor's Allocable Portion of Distribution Fees.

(d) The provisions set forth in Section 1 of the Class 529-C Plan (in effect on the date hereof) relating to Class 529-C shares, together with the related definitions are hereby incorporated into this Section 18 by reference with the same force and effect as if set forth herein in their entirety.

19. The Distributor, as principal underwriter under this agreement for Class 529-E shares shall receive (i) distribution fees at the rate of 0.25% per annum of the average net asset value of Class 529-E shares as compensation for the sale of Class 529-E shares as set forth in the Fund's Prospectus, and (ii) shareholder service fees at the rate of 0.25% per annum of the average net asset value of Class 529-E shares. The payment of distribution and service fees is pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class 529-E shares (the "Class 529-E Plan").

20. The Distributor, as principal underwriter under this agreement for Class 529-F-1 shares, shall receive shareholder service fees at the rate of 0.25% per annum of the average net asset value of Class 529-F-1 shares pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act relating to its Class 529-F-1 shares (the "Class 529-F-1 Plan").

21. The Distributor, as principal underwriter under this agreement for each of the Class R shares shall receive (i) distribution fees as compensation for the sale of Class R-1, R-2, R-3, R-4, R-5 and R-6 shares (collectively, "Class R shares"), and (ii) shareholder service fees as set forth below. The payment of distribution and service fees is pursuant to the Fund's various Plans of Distribution under Rule 12b-1 under the 1940 Act relating to each of the Class R shares (the "Class R Plans"). For purposes of the following chart the fee rates represent annual fees as a percentage of average net assets of the respective share class. Fees shall accrue daily and be paid monthly.

Share Class	Distribution Fee	Service Fee
Class R-1	0.75%	0.25%
Class R-2	0.50%	0.25%
Class R-3	0.25%	0.25%
Class R-4	0.00%	0.25%
Class R-5	0.00%	0.00%
Class R-6	0.00%	0.00%

22. The Fund agrees to use its best efforts to maintain its registration as a diversified open-end management investment company under the 1940 Act.

23. The Fund agrees to use its best efforts to maintain an effective Prospectus under the Securities Act of 1933, as amended, and warrants that such Prospectus will contain all statements required by and will conform with the requirements of such Securities Act of 1933 and the rules and regulations thereunder, and that no part of any such Prospectus, at the time the Registration Statement of which it is a part becomes effective, will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading (excluding any information provided by the Distributor in writing for inclusion in the Prospectus). The Distributor agrees and warrants that it will not in the sale of shares use any Prospectus, advertising or sales literature not approved by the Fund or its officers nor make any untrue statement of a material fact nor omit the stating of a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading. The Distributor agrees to indemnify and hold the Fund harmless from any and all loss, expense, damage and liability resulting from a breach of the agreements and warranties contained in this Section, or from the use of any sales literature, information, statistics or other aid or device employed in connection with the sale of shares.

24. The expense of each printing of each Prospectus and each revision thereof or addition thereto deemed necessary by the Fund's officers to meet the requirements of applicable laws shall be divided between the Fund, the Distributor and any other principal underwriter of the shares of the Fund as follows:

(a) the Fund shall pay the typesetting and make-ready charges;

(b) the printing charges shall be prorated between the Fund, the Distributor, and any other principal underwriter(s) in accordance with the number of copies each receives; and

(c) expenses incurred in connection with the foregoing, other than to meet the requirements of the Securities Act of 1933, as amended, or other applicable laws, shall be borne by the Distributor, except in the event such incremental expenses are incurred at the request of any other principal underwriter(s), in which case such incremental expenses shall be borne by the principal underwriter(s) making the request.

25. The Fund agrees to use its best efforts to qualify and maintain the qualification of an appropriate number of the shares of each series or class it offers for sale under the securities laws of such states as the Distributor and the Fund may approve. Any such qualification for any series or class may be withheld, terminated or withdrawn by the Fund at any time in its discretion. The expense of qualification and maintenance of qualification shall be borne by the Fund, but the Distributor shall furnish such information and other material relating to its affairs and activities as may be required by the Fund or its counsel in connection with such qualifications.

26. The Fund may withhold shares of any series or class from sale to any person or persons or in any jurisdiction temporarily or permanently if, in the opinion of its counsel, such offer or sale would be contrary to law or if the [Directors/Trustees] or the President or any Vice President of the Fund determines that such offer or sale is not in the best interest of the Fund. The Fund will give prompt notice to the Distributor of any withholding and will indemnify it against any loss suffered by the Distributor as a result of such withholding by reason of non-delivery of shares of any series or class after a good faith confirmation by the Distributor of sales thereof prior to receipt of notice of such withholding.

27. (a) This Agreement may be terminated at any time, without payment of any penalty, as to the Fund or any series on sixty (60) days written notice by the Distributor to the Fund.

(b) This Agreement may be terminated as to the Fund or any series or class by either party upon five (5) days written notice to the other party in the event that the Securities and Exchange Commission has issued an order or obtained an injunction or other court order suspending effectiveness of the Registration Statement covering the shares of the Fund or such series or class.

(c) This Agreement may be terminated as to the Fund or any series or class by the Fund upon five (5) days written notice to the Distributor provided either of the following events has occurred:

(i) FINRA has expelled the Distributor or suspended its membership in that organization; or

(ii) the qualification, registration, license or right of the Distributor to sell shares of any series in a particular state has been suspended or canceled by the State of California or any other state in which sales of the shares of the Fund or such series during the most recent 12-month period exceeded 10% of all shares of such series sold by the Distributor during such period.

(d) This Agreement may be terminated as to the Fund or any series or class at any time on sixty (60) days written notice to the Distributor without the payment of any penalty, by vote of a majority of the Independent [Directors/Trustees] or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund or such series or class.

28. This Agreement shall not be assignable by either party hereto and in the event of assignment shall automatically terminate forthwith. The term "assignment" shall have the meaning set forth in the 1940 Act. Notwithstanding this Section, this Agreement, with respect to the Fund's Class B and Class 529-B shares, has been approved in accordance with Section 31 in anticipation of the Distributor's transfer of its Allocable Portion of Distribution Fees and CDSCs (but not its obligations under this Agreement) to a third-party pursuant to a "Purchase and Sale Agreement" in order to raise funds to cover distribution expenditures, and such transfer will not cause a termination of this Agreement. If Distributor determines to transfer its Allocable Portion of Distribution Fees and CDSCs in respect of Class C or Class 529-C shares to a third party, such transfer shall not cause a termination of this Agreement.

29. No provision of this Agreement shall protect or purport to protect the Distributor against any liability to the Fund or holders of its shares for which the Distributor would otherwise be liable by reason of willful misfeasance, bad faith, or gross negligence.

30. This Agreement shall become effective on May 1, 2009. Unless sooner terminated in accordance with the other provisions hereof, this Agreement shall continue in effect until [Month] [Day], 2010, and shall continue in effect from year to year thereafter but only so long as such continuance is specifically approved at least annually by (i) the vote of a majority of the Independent [Directors/Trustees] of the Fund cast in person at a meeting called for the purpose of voting on such approval, and (ii) the vote of either a majority of the entire Board of [Directors/Trustees] of the Fund or a majority (within the meaning of the 1940 Act) of the outstanding voting securities of the Fund.

31. If the Fund shall at any time issue shares in more than one series or class, this Agreement shall take effect with respect to such series or class of the Fund which may be established in the future at such time as it has been approved as to such series or class by vote of the Board of [Directors/Trustees] and the Independent [Directors/Trustees] in accordance with Section 30. The Agreement as approved with respect to any series or class shall specify the compensation payable to the Distributor pursuant to Sections 11 through 21, as well as any provisions which may differ from those herein with respect to such series, subject to approval in writing by the Distributor.

This Agreement may be approved, amended, continued or renewed with respect to a series or class as provided herein notwithstanding such approval, amendment, continuance or renewal has not been effected with respect to any one or more other series or class of the Fund.

This Agreement shall be construed under and shall be governed by the laws of the State of California, and the parties hereto agree that proper venue of any action with respect hereto shall be Los Angeles County, California.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed in duplicate original by their officers thereunto duly authorized, as of [Month] [Day],2009.

	AMERICAN FUNDS DISTRIBUTORS, INC.		[NAME OF FUND]
By:		By:
	Kevin G. Clifford		[Name of Officer]
	President		[Title]


By:		By:
	David M. Givner		[Name]
	Secretary		Secretary

SCHEDULE A

to the

Principal Underwriting Agreement

ALLOCATION SCHEDULE

The following relates solely to Class B shares.

The Distributor's Allocable Portion of Distribution Fees and CDSCs in respect of Class B shares shall be 100% until such time as the Distributor shall cease to serve as exclusive distributor of Class B shares; thereafter, collections that constitute CDSCs and Distribution Fees relating to Class B shares shall be allocated among the Distributor and any successor distributor ("Successor Distributor") in accordance with this Schedule.

Defined terms used in this Schedule and not otherwise defined herein shall have the meanings assigned to them in the Principal Underwriting Agreement (the "Distribution Agreement"), of which this Schedule is a part. As used herein the following terms shall have the meanings indicated:

"Commission Share" means each B share issued under circumstances which would normally give rise to an obligation of the holder of such share to pay a CDSC upon redemption of such share (including, without limitation, any B share issued in connection with a permitted free exchange), and any such share shall continue to be a Commission Share of the applicable Fund prior to the redemption (including a redemption in connection with a permitted free exchange) or conversion of such share, even though the obligation to pay the CDSC may have expired or conditions for waivers thereof may exist.

"Date of Original Issuance" means in respect of any Commission Share, the date with reference to which the amount of the CDSC payable on redemption thereof, if any, is computed.

"Free Share" means, in respect of a Fund, each B share of the Fund, other than a Commission Share (including, without limitation, any B share issued in connection with the reinvestment of dividends or capital gains).

"Inception Date" means in respect of a Fund, the first date on which the Fund issued shares.

"Net Asset Value" means the net asset value determined as set forth in the Prospectus of each Fund.

“Omnibus Share” means, in respect of a Fund, a Commission Share or Free Share sold by one of the selling agents maintaining shares in an omnibus account (“Omnibus Selling Agents”). If, subsequent to the Successor Distributor becoming exclusive distributor of the Class B shares, the Distributor reasonably determines that the transfer agent is able to track all Commission Shares and Free Shares sold by any of the Omnibus Selling Agents in the same manner that NonOmnibus Commission Shares and Free Shares (defined below) are currently tracked, then Omnibus Shares of such Omnibus Selling Agent shall be treated as Commission Shares and Free Shares.

PART I: ATTRIBUTION OF CLASS B SHARES

Class B shares that are outstanding from time to time, shall be attributed to the Distributor and each Successor Distributor in accordance with the following rules;

(1) Commission Shares other than Omnibus Shares:

(a) Commission Shares that are not Omnibus Shares ("Non-Omnibus Commission Shares") attributed to the Distributor shall be those Non-Omnibus Commission Shares the Date of Original Issuance of which occurred on or after the Inception Date of the applicable Fund and on or prior to the date the Distributor ceased to be exclusive distributor of Class B shares of the Fund.

(b) Non-Omnibus Commission Shares attributable to each Successor Distributor shall be those Non-Omnibus Commission Shares the Date of Original Issuance of which occurs after the date such Successor Distributor became the exclusive distributor of Class B shares of the Fund and on or prior to the date such Successor Distributor ceased to be the exclusive distributor of Class B shares of the Fund.

(c) A Non-Omnibus Commission Share of a Fund issued in consideration of the investment of proceeds of the redemption of a Non-Omnibus Commission Share of another fund (the "Redeeming Fund") in connection with a permitted free exchange, is deemed to have a Date of Original Issuance identical to the Date of Original Issuance of the Non-Omnibus Commission Share of the Redeeming Fund, and any such Commission Share will be attributed to the Distributor or Successor Distributor based upon such Date of Original Issuance in accordance with rules (a) and (b) above.

(2) Free Shares:

Free Shares that are not Omnibus Shares ("Non-Omnibus Free Shares") of a Fund outstanding on any date shall be attributed to the Distributor or a Successor Distributor, as the case may be, in the same proportion that the Non-Omnibus Commission Shares of a Fund outstanding on such date are attributed to each on such date; provided that if the Distributor and its transferees reasonably determines that the transfer agent is able to produce monthly reports that track the Date of Original Issuance for such Non-Omnibus Free Shares, then such Free Shares shall be allocated pursuant to clause 1(a), (b) and (c) above.

(3) Omnibus Shares:

Omnibus Shares of a Fund outstanding on any date shall be attributed to the Distributor or a Successor Distributor, as the case may be, in the same proportion that the Non-Omnibus Commission Shares of the applicable Fund outstanding on such date are attributed to it on such date; provided that if the Distributor reasonably determines that the transfer agent is able to produce monthly reports that track the Date of Original Issuance for the Omnibus Shares, then the Omnibus Shares shall be allocated pursuant to clause 1(a), (b) and (c) above.

PART II: ALLOCATION OF CDSCs

(1) CDSCs Related to the Redemption of Non-Omnibus Commission Shares:

CDSCs in respect of the redemption of Non-Omnibus Commission Shares shall be allocated to the Distributor or a Successor Distributor depending upon whether the related redeemed Commission Share is attributable to the Distributor or such Successor Distributor, as the case may be, in accordance with Part I above.

(2) CDSCs Related to the Redemption of Omnibus Shares:

CDSCs in respect of the redemption of Omnibus Shares shall be allocated to the Distributor or a Successor Distributor in the same proportion that CDSCs related to the redemption of Non-Omnibus Commission Shares are allocated to each thereof; provided, that if the Distributor reasonably determines that the transfer agent is able to produce monthly reports which track the Date of Original Issuance for the Omnibus Shares, then the CDSCs in respect of the redemption of Omnibus Shares shall be allocated among the Distributor and any Successor Distributor depending on whether the related redeemed Omnibus Share is attributable to the Distributor or a Successor Distributor, as the case may be, in accordance with Part I above.

PART III: ALLOCATION OF DISTRIBUTION FEE

Assuming that the Distribution Fee remains constant over time so that Part IV hereof does not become operative:

(1) The portion of the aggregate Distribution Fee accrued in respect of all Class B shares of a Fund during any calendar month allocable to the Distributor or a Successor Distributor is determined by multiplying the total of such Distribution Fee by the following fraction:

(A + C)/2

(B + D)/2

where:

A=	The aggregate Net Asset Value of all Class B shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the beginning of such calendar month

B=	The aggregate Net Asset Value of all Class B shares of a Fund at the beginning of such calendar month

C=	The aggregate Net Asset Value of all Class B shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the end of such calendar month

D=	The aggregate Net Asset Value of all Class B shares of a Fund at the end of such calendar month

(2) If the Distributor reasonably determines that the transfer agent is able to produce automated monthly reports that allocate the average Net Asset Value of the Commission Shares (or all Class B shares if available) of a Fund among the Distributor and any Successor Distributor in a manner consistent with the methodology detailed in Part I and Part III(1) above, the portion of the Distribution Fee accrued in respect of all such Class B shares of a Fund during a particular calendar month will be allocated to the Distributor or a Successor Distributor by multiplying the total of such Distribution Fee by the following fraction:

(A)/(B)

where:

A=	Average Net Asset Value of all such Class B shares of a Fund for such calendar month attributed to the Distributor or a Successor Distributor, as the case may be

B=	Total average Net Asset Value of all such Class B shares of a Fund for such calendar month

PART IV: ADJUSTMENT OF THE DISTRIBUTOR'S ALLOCABLE PORTION AND EACH SUCCESSOR DISTRIBUTOR'S ALLOCABLE PORTION

The parties to the Distribution Agreement recognize that, if the terms of any distributor's contract, any distribution plan, any prospectus, the NASD Conduct Rules or any other applicable law change so as to disproportionately reduce, in a manner inconsistent with the intent of this Distribution Agreement, the amount of the Distributor's Allocable Portion or any Successor Distributor's Allocable Portion had no such change occurred, the definitions of the Distributor's Allocable Portion and/or the Successor Distributor's Allocable Portion in respect of the Class B shares relating to a Fund shall be adjusted by agreement among the relevant parties; provided, however, if the Distributor, the Successor Distributor and the Fund cannot agree within thirty (30) days after the date of any such change in applicable laws or in any distributor's contract, distribution plan, prospectus or the NASD Conduct Rules, they shall submit the question to arbitration in accordance with the commercial arbitration rules of the American Arbitration Association and the decision reached by the arbitrator shall be final and binding on each of them.

SCHEDULE B

to the

Principal Underwriting Agreement

ALLOCATION SCHEDULE

The following relates solely to Class C shares.

The Distributor's Allocable Portion of Distribution Fees and CDSCs in respect of Class C shares shall be 100% until such time as the Distributor shall cease to serve as exclusive distributor of Class C shares; thereafter, collections that constitute CDSCs and Distribution Fees relating to Class C shares shall be allocated among the Distributor and any successor distributor ("Successor Distributor") in accordance with this Schedule. At such time as the Distributor's Allocable Portion of the Distribution Fees equals zero, the Successor Distributor shall become the Distributor for purposes of this Allocation Schedule.

"Commission Share" means each C share issued under circumstances which would normally give rise to an obligation of the holder of such share to pay a CDSC upon redemption of such share (including, without limitation, any C share issued in connection with a permitted free exchange), and any such share shall continue to be a Commission Share of the applicable Fund prior to the redemption (including a redemption in connection with a permitted free exchange) or conversion of such share, even though the obligation to pay the CDSC may have expired or conditions for waivers thereof may exist.

"Date of Original Issuance" means in respect of any Commission Share, the date with reference to which the amount of the CDSC payable on redemption thereof, if any, is computed.

"Free Share" means, in respect of a Fund, each C share of the Fund, other than a Commission Share (including, without limitation, any C share issued in connection with the reinvestment of dividends or capital gains).

"Inception Date" means in respect of a Fund, the first date on which the Fund issued shares.

"Net Asset Value" means the net asset value determined as set forth in the Prospectus of each Fund.

"Omnibus Share" means, in respect of a Fund, a Commission Share or Free Share sold by one of the selling agents maintaining shares in an omnibus account ("Omnibus Selling Agents"). If, subsequent to the Successor Distributor becoming exclusive distributor of the Class C shares, the Distributor reasonably determines that the transfer agent is able to track all Commission Shares and Free Shares sold by any of the Omnibus Selling Agents in the same manner as Non-Omnibus Commission Shares and Free Shares (defined below) are currently tracked, then Omnibus Shares of such Omnibus Selling Agent shall be treated as Commission Shares and Free Shares.

PART I: ATTRIBUTION OF CLASS C SHARES

Class C shares that are outstanding from time to time, shall be attributed to the Distributor and each Successor Distributor in accordance with the following rules;

(1) Commission Shares other than Omnibus Shares:

(a) Commission Shares that are not Omnibus Shares ("Non-Omnibus Commission Shares") attributed to the Distributor shall be those Non-Omnibus Commission Shares (i) the Date of Original Issuance of which occurred on or after the Inception Date of the applicable Fund and on or prior to the date the Distributor ceased to be exclusive distributor of Class C shares of the Fund and (ii) that are subject to a CDSC (without regard to any conditions for waivers thereof).

(b) Non-Omnibus Commission Shares attributable to each Successor Distributor shall be those Non-Omnibus Commission Shares (i) the Date of Original Issuance of which occurs after the date such Successor Distributor became the exclusive distributor of Class C shares of the Fund and on or prior to the date such Successor Distributor ceased to be the exclusive distributor of Class C shares of the Fund and (ii) that are subject to a CDSC (without regard to any conditions for waivers thereof).

(2) Free Shares:

(3) Omnibus Shares:

PART II: ALLOCATION OF CDSCs

(1) CDSCs Related to the Redemption of Non-Omnibus Commission Shares:

(2) CDSCs Related to the Redemption of Omnibus Shares:

PART III: ALLOCATION OF DISTRIBUTION FEE

Assuming that the Distribution Fee remains constant over time so that Part IV hereof does not become operative:

(1) The portion of the aggregate Distribution Fee accrued in respect of all Class C shares of a Fund during any calendar month allocable to the Distributor or a Successor Distributor is determined by multiplying the total of such Distribution Fee by the following fraction:

(A + C)/2

(B + D)/2

where:

A=	The aggregate Net Asset Value of all Class C shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the beginning of such calendar month

B=	The aggregate Net Asset Value of all Class C shares of a Fund at the beginning of such calendar month

C=	The aggregate Net Asset Value of all Class C shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the end of such calendar month

D=	The aggregate Net Asset Value of all Class C shares of a Fund at the end of such calendar month

(2) If the Distributor reasonably determines that the transfer agent is able to produce automated monthly reports that allocate the average Net Asset Value of the Commission Shares (or all Class C shares if available) of a Fund among the Distributor and any Successor Distributor in a manner consistent with the methodology detailed in Part I and Part III(1) above, the portion of the Distribution Fee accrued in respect of all such Class C shares of a Fund during a particular calendar month will be allocated to the Distributor or a Successor Distributor by multiplying the total of such Distribution Fee by the following fraction:

(A)/(B)

where:

A=	Average Net Asset Value of all such Class C shares of a Fund for such calendar month attributed to the Distributor or a Successor Distributor, as the case may be

B=	Total average Net Asset Value of all such Class C shares of a Fund for such calendar month

PART IV: ADJUSTMENT OF THE DISTRIBUTOR'S ALLOCABLE PORTION AND EACH SUCCESSOR DISTRIBUTOR'S ALLOCABLE PORTION

The parties to the Distribution Agreement recognize that, if the terms of any distributor's contract, any distribution plan, any prospectus, the NASD Conduct Rules or any other applicable law change so as to disproportionately reduce, in a manner inconsistent with the intent of this Distribution Agreement, the amount of the Distributor's Allocable Portion or any Successor Distributor's Allocable Portion had no such change occurred, the definitions of the Distributor's Allocable Portion and/or the Successor Distributor's Allocable Portion in respect of the Class C shares relating to a Fund shall be adjusted by agreement among the relevant parties; provided, however, if the Distributor, the Successor Distributor and the Fund cannot agree within thirty (30) days after the date of any such change in applicable laws or in any distributor's contract, distribution plan, prospectus or the NASD Conduct Rules, they shall submit the question to arbitration in accordance with the commercial arbitration rules of the American Arbitration Association and the decision reached by the arbitrator shall be final and binding on each of them.

SCHEDULE C

to the

Principal Underwriting Agreement

ALLOCATION SCHEDULE

The following relates solely to Class 529-B shares.

The Distributor's Allocable Portion of Distribution Fees and CDSCs in respect of Class 529-B shares shall be 100% until such time as the Distributor shall cease to serve as exclusive distributor of Class 529-B shares; thereafter, collections that constitute CDSCs and Distribution Fees relating to Class 529-B shares shall be allocated among the Distributor and any successor distributor ("Successor Distributor") in accordance with this Schedule.

"Commission Share" means each 529-B share issued under circumstances which would normally give rise to an obligation of the holder of such share to pay a CDSC upon redemption of such share (including, without limitation, any 529-B share issued in connection with a permitted free exchange), and any such share shall continue to be a Commission Share of the applicable Fund prior to the redemption (including a redemption in connection with a permitted free exchange) or conversion of such share, even though the obligation to pay the CDSC may have expired or conditions for waivers thereof may exist.

"Date of Original Issuance" means in respect of any Commission Share, the date with reference to which the amount of the CDSC payable on redemption thereof, if any, is computed.

"Free Share" means, in respect of a Fund, each 529-B share of the Fund, other than a Commission Share (including, without limitation, any 529-B share issued in connection with the reinvestment of dividends or capital gains).

"Inception Date" means in respect of a Fund, the first date on which the Fund issued shares.

"Net Asset Value" means the net asset value determined as set forth in the Prospectus of each Fund.

“Omnibus Share” means, in respect of a Fund, a Commission Share or Free Share sold by one of the selling agents maintaining shares in an omnibus account (“Omnibus Selling Agents”). If, subsequent to the Successor Distributor becoming exclusive distributor of the Class 529-B shares, the Distributor reasonably determines that the transfer agent is able to track all Commission Shares and Free Shares sold by any of the Omnibus Selling Agents in the same manner that Non-Omnibus Commission Shares and Free Shares (defined below) are currently tracked, then Omnibus Shares of such Omnibus Selling Agent shall be treated as Commission Shares and Free Shares.

PART I: ATTRIBUTION OF CLASS 529-B SHARES

Class 529-B shares that are outstanding from time to time, shall be attributed to the Distributor and each Successor Distributor in accordance with the following rules;

(1) Commission Shares other than Omnibus Shares:

(b) Non-Omnibus Commission Shares attributable to each Successor Distributor shall be those Non-Omnibus Commission Shares the Date of Original Issuance of which occurs after the date such Successor Distributor became the exclusive distributor of Class 529-B shares of the Fund and on or prior to the date such Successor Distributor ceased to be the exclusive distributor of Class 529-B shares of the Fund.

(2) Free Shares:

(3) Omnibus Shares:

PART II: ALLOCATION OF CDSCs

(1) CDSCs Related to the Redemption of Non-Omnibus Commission Shares:

(2) CDSCs Related to the Redemption of Omnibus Shares:

PART III: ALLOCATION OF DISTRIBUTION FEE

Assuming that the Distribution Fee remains constant over time so that Part IV hereof does not become operative:

(1) The portion of the aggregate Distribution Fee accrued in respect of all Class 529-B shares of a Fund during any calendar month allocable to the Distributor or a Successor Distributor is determined by multiplying the total of such Distribution Fee by the following fraction:

(A + C)/2

(B + D)/2

where:

A=	The aggregate Net Asset Value of all Class 529-B shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the beginning of such calendar month

B=	The aggregate Net Asset Value of all Class 529-B shares of a Fund at the beginning of such calendar month

C=	The aggregate Net Asset Value of all Class 529-B shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the end of such calendar month

D=	The aggregate Net Asset Value of all Class 529-B shares of a Fund at the end of such calendar month

(2) If the Distributor reasonably determines that the transfer agent is able to produce automated monthly reports that allocate the average Net Asset Value of the Commission Shares (or all Class 529-B shares if available) of a Fund among the Distributor and any Successor Distributor in a manner consistent with the methodology detailed in Part I and Part III(1) above, the portion of the Distribution Fee accrued in respect of all such Class 529-B shares of a Fund during a particular calendar month will be allocated to the Distributor or a Successor Distributor by multiplying the total of such Distribution Fee by the following fraction:

(A)/(B)

where:

A=	Average Net Asset Value of all such Class 529-B shares of a Fund for such calendar month attributed to the Distributor or a Successor Distributor, as the case may be

B=	Total average Net Asset Value of all such Class 529-B shares of a Fund for such calendar month

PART IV: ADJUSTMENT OF THE DISTRIBUTOR'S ALLOCABLE PORTION AND EACH SUCCESSOR DISTRIBUTOR'S ALLOCABLE PORTION

The parties to the Distribution Agreement recognize that, if the terms of any distributor's contract, any distribution plan, any prospectus, the NASD Conduct Rules or any other applicable law change so as to disproportionately reduce, in a manner inconsistent with the intent of this Distribution Agreement, the amount of the Distributor's Allocable Portion or any Successor Distributor's Allocable Portion had no such change occurred, the definitions of the Distributor's Allocable Portion and/or the Successor Distributor's Allocable Portion in respect of the Class 529-B shares relating to a Fund shall be adjusted by agreement among the relevant parties; provided, however, if the Distributor, the Successor Distributor and the Fund cannot agree within thirty (30) days after the date of any such change in applicable laws or in any distributor's contract, distribution plan, prospectus or the NASD Conduct Rules, they shall submit the question to arbitration in accordance with the commercial arbitration rules of the American Arbitration Association and the decision reached by the arbitrator shall be final and binding on each of them.

SCHEDULE D

to the

Principal Underwriting Agreement

ALLOCATION SCHEDULE

The following relates solely to Class 529-C shares.

The Distributor's Allocable Portion of Distribution Fees and CDSCs in respect of Class 529-C shares shall be 100% until such time as the Distributor shall cease to serve as exclusive distributor of Class 529-C shares; thereafter, collections that constitute CDSCs and Distribution Fees relating to Class 529-C shares shall be allocated among the Distributor and any successor distributor ("Successor Distributor") in accordance with this Schedule. At such time as the Distributor's Allocable Portion of the Distribution Fees equals zero, the Successor Distributor shall become the Distributor for purposes of this Allocation Schedule.

"Commission Share" means each 529-C share issued under circumstances which would normally give rise to an obligation of the holder of such share to pay a CDSC upon redemption of such share (including, without limitation, any 529-C share issued in connection with a permitted free exchange), and any such share shall continue to be a Commission Share of the applicable Fund prior to the redemption (including a redemption in connection with a permitted free exchange) or conversion of such share, even though the obligation to pay the CDSC may have expired or conditions for waivers thereof may exist.

"Date of Original Issuance" means in respect of any Commission Share, the date with reference to which the amount of the CDSC payable on redemption thereof, if any, is computed.

"Free Share" means, in respect of a Fund, each 529-C share of the Fund, other than a Commission Share (including, without limitation, any 529-C share issued in connection with the reinvestment of dividends or capital gains).

"Inception Date" means in respect of a Fund, the first date on which the Fund issued shares.

"Net Asset Value" means the net asset value determined as set forth in the Prospectus of each Fund.

"Omnibus Share" means, in respect of a Fund, a Commission Share or Free Share sold by one of the selling agents maintaining shares in an omnibus account ("Omnibus Selling Agents"). If, subsequent to the Successor Distributor becoming exclusive distributor of the Class 529-C shares, the Distributor reasonably determines that the transfer agent is able to track all Commission Shares and Free Shares sold by any of the Omnibus Selling Agents in the same manner that Non-Omnibus Commission Shares and Free Shares (defined below) are currently tracked, then Omnibus Shares of such Omnibus Selling Agent shall be treated as Commission Shares and Free Shares.

PART I: ATTRIBUTION OF CLASS 529-C SHARES

Class 529-C shares that are outstanding from time to time, shall be attributed to the Distributor and each Successor Distributor in accordance with the following rules;

(1) Commission Shares other than Omnibus Shares:

(a) Commission Shares that are not Omnibus Shares ("Non-Omnibus Commission Shares") attributed to the Distributor shall be those Non-Omnibus Commission Shares (i) the Date of Original Issuance of which occurred on or after the Inception Date of the applicable Fund and on or prior to the date the Distributor ceased to be exclusive distributor of Class 529-C shares of the Fund and (ii) that are subject to a CDSC (without regard to any conditions for waivers thereof).

(b) Non-Omnibus Commission Shares attributable to each Successor Distributor shall be those Non-Omnibus Commission Shares (i) the Date of Original Issuance of which occurs after the date such Successor Distributor became the exclusive distributor of Class 529-C shares of the Fund and on or prior to the date such Successor Distributor ceased to be the exclusive distributor of Class 529-C shares of the Fund and (ii) that are subject to a CDSC (without regard to any conditions for waivers thereof).

(2) Free Shares:

(3) Omnibus Shares:

PART II: ALLOCATION OF CDSCs

(1) CDSCs Related to the Redemption of Non-Omnibus Commission Shares:

(2) CDSCs Related to the Redemption of Omnibus Shares:

PART III: ALLOCATION OF DISTRIBUTION FEE

Assuming that the Distribution Fee remains constant over time so that Part IV hereof does not become operative:

(1) The portion of the aggregate Distribution Fee accrued in respect of all Class 529-C shares of a Fund during any calendar month allocable to the Distributor or a Successor Distributor is determined by multiplying the total of such Distribution Fee by the following fraction:

(A + C)/2

(B + D)/2

where:

A=	The aggregate Net Asset Value of all Class 529-C shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the beginning of such calendar month

B=	The aggregate Net Asset Value of all Class 529-C shares of a Fund at the beginning of such calendar month

C=	The aggregate Net Asset Value of all Class 529-C shares of a Fund attributed to the Distributor or such Successor Distributor, as the case may be, and outstanding at the end of such calendar month

D=	The aggregate Net Asset Value of all Class 529-C shares of a Fund at the end of such calendar month

(2) If the Distributor reasonably determines that the transfer agent is able to produce automated monthly reports that allocate the average Net Asset Value of the Commission Shares (or all Class 529-C shares if available) of a Fund among the Distributor and any Successor Distributor in a manner consistent with the methodology detailed in Part I and Part III(1) above, the portion of the Distribution Fee accrued in respect of all such Class 529-C shares of a Fund during a particular calendar month will be allocated to the Distributor or a Successor Distributor by multiplying the total of such Distribution Fee by the following fraction:

(A)/(B)

where:

A=	Average Net Asset Value of all such Class 529-C shares of a Fund for such calendar month attributed to the Distributor or a Successor Distributor, as the case may be

B=	Total average Net Asset Value of all such Class 529-C shares of a Fund for such calendar month

PART IV: ADJUSTMENT OF THE DISTRIBUTOR'S ALLOCABLE PORTION AND EACH SUCCESSOR DISTRIBUTOR'S ALLOCABLE PORTION

The parties to the Distribution Agreement recognize that, if the terms of any distributor's contract, any distribution plan, any prospectus, the NASD Conduct Rules or any other applicable law change so as to disproportionately reduce, in a manner inconsistent with the intent of this Distribution Agreement, the amount of the Distributor's Allocable Portion or any Successor Distributor's Allocable Portion had no such change occurred, the definitions of the Distributor's Allocable Portion and/or the Successor Distributor's Allocable Portion in respect of the Class 529-C shares relating to a Fund shall be adjusted by agreement among the relevant parties; provided, however, if the Distributor, the Successor Distributor and the Fund cannot agree within thirty (30) days after the date of any such change in applicable laws or in any distributor's contract, distribution plan, prospectus or the NASD Conduct Rules, they shall submit the question to arbitration in accordance with the commercial arbitration rules of the American Arbitration Association and the decision reached by the arbitrator shall be final and binding on each of them.

[logo – American Funds ®]

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, California 90071

Telephone 800/421-9900, ext. 4

April 2009

To Our Dealer Friends,

As you may know, shares of our newest fund in the American Funds family, American Funds Money Market Fund, will be available for sale to the public beginning May 1, 2009. The new fund combines aspects of two of our existing money market funds; The Cash Management Trust of America and The U.S. Treasury Money Fund of America. The fund’s investment objective is to provide income while preserving capital and maintaining liquidity.

American Funds Money Market Fund seeks to preserve the value of an investment at $1.00 per share. The fund initially will suspend payment of ongoing 12b-1 fees to advisers. The fund will have a 12b-1 plan, and future payment of 12b-1 fees to advisers will be contingent on the fund’s yield.

With the introduction of the new fund, The Cash Management Trust of America, The U.S. Treasury Money Fund of America and The Tax-Exempt Money Fund of America will not allow establishment of new accounts, effective May 1, 2009.

In addition, American Funds is introducing a new share class for retirement plans, effective May 1, 2009. Class R-6 shares will carry the lowest expense ratio of the American Funds Class R shares and will be available to all retirement plans with an intermediary, regardless of plan size. The new share class is similar to Class R-5, but it will not include any compensation for third-party recordkeepers.

Finally, effective April 21, 2009 American Funds will no longer allow new investments in Class B shares and Class 529-B shares.

The purpose of this notice is to amend your selling group agreement (the “Agreement”) with American Funds Distributors, Inc. to reflect these and certain other changes.

In consideration of the foregoing, the Agreement is amended as follows effective May 1, 2009:

1.	The paragraph titled “Compensation on Sales of Class B Shares and Class 529-B Shares” is deleted in its entirety.

2.	The following provisions are added to the Agreement:

Payments of 12b-1 fees to you for payment to your financial advisers in respect of American Funds Money Market Fund are currently suspended. Payments may resume at a future date, if the fund’s investment adviser determines, in its sole discretion, that the yield on the fund’s portfolio securities supports such payments.

·	Each party to this Agreement agrees to comply with all applicable laws, including applicable state privacy laws.

·	We reserve the right not to pay any compensation more than six (6) months in arrears in respect of accounts and/or assets that were not timely identified as eligible for compensation pursuant to this Agreement.

3.	The following is added to the paragraph titled “Retirement Plan Share Classes (R shares) and Account Options (for retirement plans only)”:

R Share Class	Annual Compensation Rate

Class R-6	No compensation paid

4.	The paragraph titled “Mutual Funds Sold Through PlanPremier” is deleted and replaced with the following paragraph:

Mutual Funds Sold Through PlanPremier

With respect to sales you make through American Funds’ PlanPremier retirement plan recordkeeping program, we will pay you as servicing dealer ongoing compensation on a quarterly basis, at the applicable annual rate set forth below, of the average daily net asset value of Eligible Plan Assets that are held in a retirement plan (Plan) assigned to you at the end of the quarter for which payment is made. For purposes of this Agreement, Eligible Plan Assets mean total Plan assets (including assets invested in American Funds and other mutual funds or investment options approved for use in PlanPremier), excluding (i) assets held in self-directed brokerage accounts, (ii) employer stock and (iii) any other investment option not approved for use in PlanPremier. This ongoing compensation will accrue on a calendar-quarter basis. The payment of this compensation is subject to the limitations contained in each American Funds’ Plan of Distribution and may be varied or discontinued at any time.

Eligible Plan Assets1	Annual Compensation Rate
Eligible Plan Assets that include American Funds Class R-2 shares	0.65%
Eligible Plan Assets that include American Funds Class R-3 shares	0.35%
Eligible Plan Assets that include American Funds Class R-4 shares	0.20%
Eligible Plan Assets that include American Funds Class R-5 shares	No compensation paid
Eligible Plan Assets that include American Funds Class R-6 shares	No compensation paid

1 American Funds Class R-1 shares are not available to Plans for which a PlanPremier proposal is generated on or after July 31, 2006.

Notwithstanding the foregoing, no compensation will be paid on shares of American Funds Money Market Fund held through the PlanPremier program. Payments may resume at a future date, if the fund’s investment adviser determines, in its sole discretion, that the yield on the fund’s portfolio securities supports such payments.

5.	The existing Schedule A to the Agreement is replaced in its entirety by the new Schedule A attached hereto.

* * * * *

The Agreement remains unchanged in all other respects. Any order for Fund shares received by us beginning May 1, 2009 shall be deemed an acceptance of this amendment to your Agreement.

Very truly yours,

/s/ Kevin G. Clifford

Kevin G. Clifford

President

Schedule A

May 1, 2009

(supersedes all previous versions of Schedule A – last version dated October 1, 2008)

529-A

529-B

529-C

529-E

R-1

R-2

R-3

R-4

R-5

R-6

Category 1

AMCAP Fund

American Balanced Fund

American Funds Target Date Retirement Series

American Mutual Fund

Capital Income Builder

Capital World Growth and Income Fund

EuroPacific Growth Fund

Fundamental Investors

Growth Fund of America

Income Fund of America

International Growth and Income Fund

Investment Company of America

New Economy Fund

New Perspective Fund

New World Fund

SMALLCAP World Fund

Washington Mutual Investors Fund

Category 2

American High-Income Trust

American High-Income Municipal Bond Fund

Bond Fund of America

Capital World Bond Fund

Tax-Exempt Bond Fund of America

Tax-Exempt Fund of California

Tax-Exempt Fund of Maryland

Tax-Exempt Fund of Virginia

U.S. Government Securities Fund

Category 3

Intermediate Bond Fund of America

Limited Term Tax-Exempt Bond Fund of America

Short-Term Bond Fund of America

Category 4

American Funds Money Market Fund

Cash Management Trust of America

c/e

Tax-Exempt Money Fund of America

U.S. Treasury Money Fund of America

Notes and symbols

Class F-1, Class F-2 and Class 529-F-1 shares are available pursuant to a separate agreement.

l	Share class is available	c	Fund closed to new investors
e	Share class is available for exchanges only	na	Share class is not available

[logo – American Funds ®]

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, California 90071

Telephone 800/421-9900, ext. 4

April 2009

To Our Dealer Friends,

With the introduction of the new fund, The Cash Management Trust of America and The U.S. Treasury Money Fund of America will not allow establishment of new accounts, effective May 1, 2009.

The purpose of this notice is to amend your institutional selling group agreement (the “Agreement”) with American Funds Distributors, Inc. to reflect these and certain other changes.

In consideration of the foregoing, the Agreement is amended as follows effective May 1, 2009:

1.	The following provisions are added to the Agreement:

·	Each party to this Agreement agrees to comply with all applicable laws, including applicable state privacy laws.

·	We reserve the right not to pay any compensation more than six (6) months in arrears in respect of accounts and/or assets that were not timely identified as eligible for compensation pursuant to this Agreement.

2.	The following is added to the paragraph titled “Retirement Plan Share Classes (R shares) and Account Options (for retirement plans only)”:

R Share Class	Annual Compensation Rate

Class R-6	No compensation paid

3.	The paragraph titled “Mutual Funds Sold Through PlanPremier” is deleted and replaced with the following paragraph:

Mutual Funds Sold Through PlanPremier

Eligible Plan Assets1	Annual Compensation Rate
Eligible Plan Assets that include American Funds Class R-2 shares	0.65%
Eligible Plan Assets that include American Funds Class R-3 shares	0.35%
Eligible Plan Assets that include American Funds Class R-4 shares	0.20%
Eligible Plan Assets that include American Funds Class R-5 shares	No compensation paid
Eligible Plan Assets that include American Funds Class R-6 shares	No compensation paid

1 American Funds Class R-1 shares are not available to Plans for which a PlanPremier proposal is generated on or after July 31, 2006.

4.	The existing Schedule A to the Agreement is replaced in its entirety by the new Schedule A attached hereto.

* * * * *

The Agreement remains unchanged in all other respects. Any order for Fund shares received by us beginning May 1, 2009 shall be deemed an acceptance of this amendment to your Agreement.

Very truly yours,

/s/ Kevin G. Clifford

Kevin G. Clifford

President

Schedule A

May 1, 2009

(supersedes all previous versions of Schedule A)

Category 1

AMCAP Fund

American Balanced Fund

American Funds Target Date Retirement Series

American Mutual Fund

Capital Income Builder

Capital World Growth and Income Fund

EuroPacific Growth Fund

Fundamental Investors

The Growth Fund of America

The Income Fund of America

The Investment Company of America

International Growth and Income Fund

The New Economy Fund

New Perspective Fund

New World Fund

SMALLCAP World Fund

Washington Mutual Investors Fund

Category 2

American High-Income Trust

The Bond Fund of America

Capital World Bond Fund

Intermediate Bond Fund of America

Short-Term Bond Fund of America

U.S. Government Securities Fund

Category 3

American Funds Money Market Fund

The Cash Management Trust of America*

U.S. Treasury Money Fund of America*

* Fund closed to new investors

[logo – American Funds ®]

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, California 90071

Telephone 800/421-9900, ext. 4

April 2009

To Our Dealer Friends,

Finally, effective April 21, 2009 American Funds will no longer allow new investments in Class B shares and Class 529-B shares.

The purpose of this notice is to amend your Bank/Trust Company selling group agreement (the “Agreement”) with American Funds Distributors, Inc. to reflect these and certain other changes.

In consideration of the foregoing, the Agreement is amended as follows effective May 1, 2009:

1.	The paragraph titled “Compensation on Sales of Class B Shares and Class 529-B Shares” is deleted in its entirety.

2.	The following provisions are added to the Agreement:

·	Each party to this Agreement agrees to comply with all applicable laws, including applicable state privacy laws.

·	We reserve the right not to pay any compensation more than six (6) months in arrears in respect of accounts and/or assets that were not timely identified as eligible for compensation pursuant to this Agreement.

·	The following is added to the paragraph titled “Retirement Plan Share Classes (R shares) and Account Options (for retirement plans only)”:

R Share Class	Annual Compensation Rate

Class R-6	No compensation paid

3.	The paragraph titled “Mutual Funds Sold Through PlanPremier” is deleted and replaced with the following paragraph:

Mutual Funds Sold Through PlanPremier

Eligible Plan Assets1	Annual Compensation Rate
Eligible Plan Assets that include American Funds Class R-2 shares	0.65%
Eligible Plan Assets that include American Funds Class R-3 shares	0.35%
Eligible Plan Assets that include American Funds Class R-4 shares	0.20%
Eligible Plan Assets that include American Funds Class R-5 shares	No compensation paid
Eligible Plan Assets that include American Funds Class R-6 shares	No compensation paid

1 American Funds Class R-1 shares are not available to Plans for which a PlanPremier proposal is generated on or after July 31, 2006.

4.	The existing Schedule A to the Agreement is replaced in its entirety by the new Schedule A attached hereto.

* * * * *

The Agreement remains unchanged in all other respects. Any order for Fund shares received by us beginning May 1, 2009 shall be deemed an acceptance of this amendment to your Agreement.

Very truly yours,

/s/ Kevin G. Clifford

Kevin G. Clifford

President

Schedule A

May 1, 2009

(supersedes all previous versions of Schedule A – last version dated October 1, 2008)

529-A

529-B

529-C

529-E

R-1

R-2

R-3

R-4

R-5

R-6

Category 1

AMCAP Fund

American Balanced Fund

American Funds Target Date Retirement Series

American Mutual Fund

Capital Income Builder

Capital World Growth and Income Fund

EuroPacific Growth Fund

Fundamental Investors

Growth Fund of America

Income Fund of America

International Growth and Income Fund

Investment Company of America

New Economy Fund

New Perspective Fund

New World Fund

SMALLCAP World Fund

Washington Mutual Investors Fund

Category 2

American High-Income Trust

American High-Income Municipal Bond Fund

Bond Fund of America

Capital World Bond Fund

Tax-Exempt Bond Fund of America

Tax-Exempt Fund of California

Tax-Exempt Fund of Maryland

Tax-Exempt Fund of Virginia

U.S. Government Securities Fund

Category 3

Intermediate Bond Fund of America

Limited Term Tax-Exempt Bond Fund of America

Short-Term Bond Fund of America

Category 4

American Funds Money Market Fund

Cash Management Trust of America

c/e

Tax-Exempt Money Fund of America

U.S. Treasury Money Fund of America

Notes and symbols

Class F-1, Class F-2 and Class 529-F-1 shares are available pursuant to a separate agreement.

l	Share class is available	c	Fund closed to new investors
e	Share class is available for exchanges only	na	Share class is not available

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, California 90071

Telephone 800/421-9900, ext. 4

April 2009

To Our Dealer Friends,

As you may know, shares of our newest fund in the American Funds family, American Funds Money Market Fund, will be available for sale to the public beginning May 1, 2009. The fund’s investment objective is to provide income while preserving capital and maintaining liquidity. The fund seeks to preserve the value of an investment at $1.00 per share.

With the introduction of the new fund, The Cash Management Trust of America will not allow establishment of new accounts, effective May 1, 2009.

The purpose of this notice is to amend your Class F Share Participation Agreement (the “Agreement”) with American Funds Distributors, Inc. to reflect these and certain other changes.

In consideration of the foregoing, the Agreement is amended as follows effective May 1, 2009:

1. The following provisions are added to the Agreement:

If you offer American Funds Money Market Fund, you acknowledge and agree that we may discontinue making payments of 12b-1 fees in respect of American Funds Money Market Fund if the fund’s investment adviser determines, in its sole discretion, that the yield on the fund’s portfolio securities does not support such payments. We currently intend to make these payments under this Agreement.

·	Each party to this Agreement agrees to comply with all applicable laws, including applicable state privacy laws.

·	We reserve the right not to pay any compensation more than six (6) months in arrears in respect of accounts and/or assets that were not timely identified as eligible for compensation pursuant to this Agreement.

Remainder of page left blank intentionally

2.	The list of funds on Schedule A to the Agreement is replaced in its entirety with the following list:

LIST OF FUNDS

AMCAP Fund	Investment Company of America
American Balanced Fund	Intermediate Bond Fund of America
American Funds Money Market Fund	International Growth and Income Fund
American High-Income Municipal Bond Fund	Limited Term Tax-Exempt Bond Fund of America
American High-Income Trust	New Economy Fund
American Mutual Fund	New Perspective Fund
Bond Fund of America	New World Fund
Capital Income Builder	Short-Term Bond Fund of America
Capital World Growth and Income Fund	SMALLCAP World Fund
Capital World Bond Fund	Tax-Exempt Bond Fund of America
Cash Management Trust of America*	Tax-Exempt Fund of California
EuroPacific Growth Fund	Tax-Exempt Fund of Maryland
Fundamental Investors	Tax-Exempt Fund of Virginia
Growth Fund of America	U.S. Government Securities Fund
Income Fund of America	Washington Mutual Investors Fund

* Fund closed to new investors

* * * * *

The agreement remains unchanged in all other respects. Any order for Fund shares received by us following this notice shall be deemed an acceptance of this amendment to your Agreement.

Very truly yours,

/s/ Kevin G. Clifford

Kevin G. Clifford

President

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, California 90071

Telephone 800/421-9900, ext. 4

April 2009

To Our Dealer Friends,

With the introduction of the new fund, The Cash Management Trust of America will not allow establishment of new accounts, effective May 1, 2009.

The purpose of this notice is to amend your Bank/Trust Company Participation Agreement for Class F Shares (the “Agreement”) with American Funds Distributors, Inc. to reflect these and certain other changes.

In consideration of the foregoing, the Agreement is amended as follows effective May 1, 2009:

1. The following provisions are added to the Agreement:

·	Each party to this Agreement agrees to comply with all applicable laws, including applicable state privacy laws.

·	We reserve the right not to pay any compensation more than six (6) months in arrears in respect of accounts and/or assets that were not timely identified as eligible for compensation pursuant to this Agreement.

Remainder of page left blank intentionally

2.	The list of funds on Schedule A to the Agreement is replaced in its entirety with the following list:

LIST OF FUNDS

AMCAP Fund	Investment Company of America
American Balanced Fund	Intermediate Bond Fund of America
American Funds Money Market Fund	International Growth and Income Fund
American High-Income Municipal Bond Fund	Limited Term Tax-Exempt Bond Fund of America
American High-Income Trust	New Economy Fund
American Mutual Fund	New Perspective Fund
Bond Fund of America	New World Fund
Capital Income Builder	Short-Term Bond Fund of America
Capital World Growth and Income Fund	SMALLCAP World Fund
Capital World Bond Fund	Tax-Exempt Bond Fund of America
Cash Management Trust of America*	Tax-Exempt Fund of California
EuroPacific Growth Fund	Tax-Exempt Fund of Maryland
Fundamental Investors	Tax-Exempt Fund of Virginia
Growth Fund of America	U.S. Government Securities Fund
Income Fund of America	Washington Mutual Investors Fund

* Fund closed to new investors

* * * * *

The Agreement remains unchanged in all other respects. Any order for Fund shares received by us following this notice shall be deemed an acceptance of this amendment to your Agreement.

Very truly yours,

/s/ Kevin G. Clifford

Kevin G. Clifford

President

EX-99.H OTH MAT CONT 4 exhh.htm EXHIBIT H exhh.htm

FORM OF

AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT

WHEREAS, [Name of Fund] (the “Fund”), is a [State of Formation] [corporation/business trust] registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end diversified investment company that offers Class C shares; Class F-1 shares, Class F-2 shares (together, the “Class F shares”); Class R-1 shares, Class R-2 shares, Class R-3 shares, Class R-4 shares, Class R-5 shares, and Class R-6 shares (collectively, the “Class R shares”); and Class 529-A shares, Class 529-B shares, Class 529-C shares, Class 529-E shares, and Class 529-F-1 shares (collectively, the “Class 529 shares”); and

WHEREAS, Capital Research and Management Company (the “Investment Adviser”), is a Delaware corporation registered under the Investment Advisers Act of 1940, as amended, and is engaged in the business of providing investment advisory and related services to the Fund and to other investment companies; and

WHEREAS, the Fund wishes to have the Investment Adviser arrange for and coordinate, monitor, oversee and assist with the provision of transfer agent and shareholder services (“transfer agent services”) and certain other administrative services (other than those provided pursuant to any other agreement with the Fund), including but not limited to recordkeeping, transactional services, tax information returns and reports, fund communication and shareholder communication (collectively “administrative services”) for the Fund’s Class C shares, Class F shares, Class R shares and Class 529 shares; and

WHEREAS, the Investment Adviser is willing to perform or to cause to be performed such transfer agent services and administrative services for the Fund’s Class C shares, Class F shares, Class R shares and Class 529 shares on the terms and conditions set forth herein; and

WHEREAS, the Fund and the Investment Adviser wish to enter into an Administrative Services Agreement (“Agreement”) whereby the Investment Adviser would perform or cause to be performed such transfer agent services and administrative services for the Fund’s Class C shares, Class F shares, Class R shares and Class 529 shares;

NOW, THEREFORE, the parties agree as follows:

1. Services. During the term of this Agreement, the Investment Adviser shall perform or cause to be performed the transfer agent services and administrative services set forth in Exhibit A hereto, as such exhibit may be amended from time to time by mutual consent of the parties. The Fund and Investment Adviser acknowledge that the Investment Adviser will contract with third parties, including American Funds Service Company (“AFS”), to perform such transfer agent services and administrative services. In selecting third parties to perform transfer agent and administrative services, the Investment Adviser shall select only those third parties that the Investment Adviser reasonably believes have adequate facilities and personnel to diligently perform such services. The Investment Adviser shall monitor, coordinate, oversee and assist with the activities performed by third parties with which it or AFS contracts to ensure shareholders receive high-quality service. In doing so the Investment Adviser shall establish procedures to monitor the activities of such third parties. These procedures may, but need not, include monitoring: (i) telephone queue wait times; (ii) telephone abandon rates; (iii) website and voice response unit downtimes; (iv) downtime of the third party’s shareholder account recordkeeping system; (v) the accuracy and timeliness of financial and non-financial transactions; (vi) to ensure compliance with the Fund prospectus; and (vii) with respect to Class 529 shares, compliance with the CollegeAmerica program description.

2. Fees.

(a) Transfer Agent Fees. In consideration of transfer agent services performed or caused to be performed by the Investment Adviser for the Fund’s Class C shares, Class F shares and Class R shares, the Fund shall pay the Investment Adviser transfer agent fees according to the fee schedule contained in the Shareholder Services Agreement, as amended from time to time, between the Fund and AFS. No Transfer Agent Fees shall be paid in respect of accounts that are held in other than street name or a networked environment. No fees shall be paid under this paragraph 2(a) for services provided by third parties other than AFS. All fund-specific charges from third parties—including DST charges, postage, NSCC transaction charges and similar out-of-pocket expenses—will be passed through directly to the Fund. Transfer agent fees shall be paid within 30 days after receipt of an invoice for transfer agent services performed the preceding month.

(b) Administrative Services Fees. In consideration of administrative services performed or caused to be performed by the Investment Adviser for the Fund’s Class C shares, Class F shares, Class R shares and Class 529 shares, the Fund shall pay the Investment Adviser an administrative services fee (“administrative fee”). For the Fund’s Class C shares, Class F-1 shares, Class F-2 shares, Class R-1 shares, Class R-2 shares, Class R-3 shares, Class R-4 shares and Class 529 shares, the administrative fee shall accrue daily and shall be calculated at the annual rate of 0.15% of the average net assets of those shares. For the Fund’s Class R-5 shares, the administrative fee shall accrue daily and shall be calculated at the annual rate of 0.10% of the average net assets of the Class R-5 shares. For the Fund’s Class R-6 shares, the administrative fee shall accrue daily and shall be calculated at the annual rate of 0.05% of the average net assets of the Class R-6 shares. The administrative fee shall be paid within 30 days after receipt of an invoice for administrative services performed in the preceding month.

3. Effective Date and Termination of Agreement. This Agreement shall become effective on May 1, 2009, and unless terminated sooner it shall continue in effect until [Month] [Day], 2010. It may thereafter be continued from year to year only with the approval of a majority of those [Directors/Trustees] of the Fund who are not “interested persons” of the Fund (as defined in the 1940 Act) and have no direct or indirect financial interest in the operation of this Agreement or any agreement related to it (the “Independent [Directors/Trustees]”). This Agreement may be terminated as to the Fund as a whole or any class of shares individually at any time by vote of a majority of the Independent [Directors/Trustees]. The Investment Adviser may terminate this agreement upon sixty (60) days’ prior written notice to the Fund.

4. Amendment. This Agreement may not be amended to increase materially the fees payable under this Agreement unless such amendment is approved by the vote of a majority of the Independent [Directors/Trustees].

5. Assignment. This Agreement shall not be assignable by either party hereto and in the event of assignment shall automatically terminate forthwith. The term “assignment” shall have the meaning set forth in the 1940 Act. Notwithstanding the foregoing, the Investment Adviser is specifically authorized to contract with third parties for the provision of transfer agent, shareholder services, and administrative services on behalf of the Fund.

6. Issuance of Series of Shares. If the Fund shall at any time issue shares in more than one series, this Agreement may be adopted, amended, continued or renewed with respect to a series as provided herein, notwithstanding that such adoption, amendment, continuance or renewal has not been effected with respect to any one or more other series of the Fund.

7. Choice of Law. This Agreement shall be construed under and shall be governed by the laws of the State of California, and the parties hereto agree that proper venue of any action with respect hereto shall be Los Angeles County, California.

8. Limitation on Fees. Notwithstanding the foregoing, the portion of the administrative fees payable under this Agreement retained by the Investment Adviser (after all permissible payments to AFS and third party service providers) will be limited to no more than 0.05% of average net assets per share class.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate original by its officers thereunto duly authorized, as of [Month] [Day], 2009.

	CAPITAL RESEARCH AND MANAGEMENT COMPANY		[NAME OF FUND]
By:		By:
	Timothy D. Armour, President		[Name of Officer], [Title]


By:		By:
	Michael J. Downer, Senior Vice President		[Name], Secretary
	and Secretary

EXHIBIT A

to the

Administrative Services Agreement

Transfer Agent Services

The Investment Adviser or any third party with whom it may contract, including its affiliates (the Investment Adviser and any such third-party are collectively referred to as “Service Provider”), shall act, as necessary, as stock transfer agent, dividend disbursing agent and redemption agent for the Fund’s Class C shares, Class F shares, Class R shares and Class 529 shares, and shall provide such additional related services as the Fund’s Class C shares, Class F shares, Class R shares and Class 529 shares may from time to time require, all of which services are sometimes referred to herein as "shareholder services."

Administrative Services

1. Record Maintenance

The Service Provider shall maintain, and require any third parties with which it contracts to maintain with respect to each Fund shareholder holding the Fund’s Class C shares, Class F shares, Class R shares and/or Class 529 shares in a Service Provider account (“Customers”) the following records:

a. Number of Shares;

b. Date, price and amount of purchases and redemptions (including dividend reinvestments) and dates and amounts of dividends paid for at least the current year to date;

c. Name and address of the Customer, including zip codes and social security numbers or taxpayer identification numbers;

d. Records of distributions and dividend payments; and

e. Any transfers of shares.

2. Shareholder Communications

Service Provider shall:

a. Provide to a shareholder mailing agent for the purpose of delivering certain Fund-related materials the names and addresses of all Customers. The Fund-related materials shall consist of updated prospectuses and any supplements and amendments thereto, annual and other periodic reports, proxy or information statements and other appropriate shareholder communications. In the alternative, the Service Provider may distribute the Fund-related materials to its Customers.

b. Deliver current Fund prospectuses and statements of additional information and annual and other periodic reports upon Customer request, and, as applicable, with confirmation statements;

c. Deliver statements to Customers on no less frequently than a quarterly basis showing, among other things, the number of Class C shares, Class F shares, Class R shares and/or Class 529 shares of the Fund owned by such Customer and the net asset value of the Class C shares, Class F shares, Class R shares and/or Class 529 shares of the Fund as of a recent date;

d. Produce and deliver to Customers confirmation statements reflecting purchases and redemptions of Class C shares, Class F shares, Class R shares and/or Class 529 shares of the Fund;

e. Respond to Customer inquiries regarding, among other things, share prices, account balances, dividend amounts and dividend payment dates;

f. With respect to Class C and/or Class F shares of the Fund purchased by Customers after the effective date of this Agreement, provide average cost basis reporting to Customers to assist them in preparation of their income tax returns; and

g. If the Service Provider accepts transactions in the Fund’s Class C shares, Class F shares and Class R shares from any brokers or banks in an omnibus relationship, require each such broker or bank to provide such shareholder communications as set forth in 2(a) through 2(f) to its own Customers.

3. Transactional Services

The Service Provider shall communicate to its Customers, as to Class C shares, Class F shares, Class R shares and Class 529 shares of the Fund, purchase, redemption and exchange orders reflecting the orders it receives from its Customers or from any brokers and banks for their Customers. The Service Provider shall also communicate to beneficial owners holding through it, and to any brokers or banks for beneficial owners holding through them, as to shares of Class C shares, Class F shares, Class R shares and Class 529 shares of the Fund, mergers, splits and other reorganization activities, and require any broker or bank to communicate such information to its Customers.

4. Tax Information Returns and Reports

The Service Provider shall prepare and file, and require to be prepared and filed by any brokers or banks as to their Customers, with the appropriate governmental agencies, such information, returns and reports as are required to be so filed for reporting: (i) dividends and other distributions made; (ii) amounts withheld on dividends and other distributions and payments under applicable federal and state laws, rules and regulations; and (iii) gross proceeds of sales transactions as required.

5. Fund Communications

The Service Provider shall, upon request by the Fund, on each business day, report the number of Class C shares, Class F shares, Class R shares and Class 529 shares on which the administrative fee is to be paid pursuant to this Agreement. The Service Provider shall also provide the Fund with a monthly invoice.

6. Coordination and Oversight of Service Providers

The Investment Adviser shall coordinate, monitor, oversee and assist with the activities performed by the Service Providers with which it contracts to ensure that the shareholders of the Fund’s Class C shares, Class F shares, Class R shares and Class 529 shares receive high-quality service. The Investment Adviser shall also ensure that Service Providers deliver to Customers account statements and all Fund-related materials, including prospectuses, shareholder reports, and proxies.

EX-99.I LEGAL OPININ 5 exhi.htm EXHIBIT I exhi.htm

DLA Piper LLP (US)

The Marbury Building

6225 Smith Avenue

Baltimore, Maryland 21209-3600

www.dlapiper.com

T 410.580.3000

F 410.580.3001

March 27, 2009

Fundamental Investors, Inc.

One Market, Steuart Tower, 20th Floor

San Francisco, California 94105

Ladies and Gentlemen:

We serve as special Maryland counsel to Fundamental Investors, Inc., a Maryland corporation (the “Fund”), and have been requested by the Fund to render this opinion in connection with the Fund’s Post-Effective Amendment No. 97 to the Fund’s Registration Statement on Form N-1A to be filed on or about March 30, 2009 (the “Registration Statement”), including the prospectus, the retirement prospectus and statement of additional information included therein (collectively, the “Prospectus”), under the Securities Act of 1933, as amended (the “Securities Act”), and Amendment No. 40 under the Investment Company Act of 1940, as amended, for offering by the Fund from time to time of the Fund’s Class R-6 Common Stock, par value $.001 per share (collectively, the “Shares”).

In our capacity as special Maryland counsel, we have reviewed the following documents (the “Documents”):

(a) The Registration Statement, including the Prospectus, in the form to be filed with the Securities and Exchange Commission.

(b) the retirement prospectus and statement.

(c) The charter of the Fund (the “Charter”), as in effect on the date hereof, certified by the State Department of Assessments and Taxation of the State of Maryland (the “SDAT”).

(d) The by-laws of the Fund (the “By-laws”), certified by an officer of the Fund.

(e) Resolutions adopted by the Fund’s Board of Directors relating to the authorization of the filing of the Registration Statement and the issuance of the Shares, certified by an officer of the Fund.

(f) A certificate executed by an officer of the Fund, dated the date hereof (the “Certificate”).

(f) A good standing certificate for the Fund, dated as of a recent date, issued by the SDAT.

(g) Such other documents as we have deemed necessary to the rendering of the opinions expressed below.

In examining the Documents, and in rendering the opinion set forth below, we have assumed the following: (a) each of the parties to the Documents (other than the Fund) has duly and validly executed and delivered each of the Documents and each instrument, agreement, and other document executed in connection with the Documents to which such party is a signatory and each such party's (other than the Fund’s) obligations set forth in the Documents, are its legal, valid and binding obligations, enforceable in accordance with their respective terms; (b) each person executing any such instrument, agreement or other document on behalf of any such party (other than the Fund) is duly authorized to do so; (c) each natural person executing any such instrument, agreement or other document is legally competent to do so; (d) the Documents accurately describe and contain the mutual understandings of the parties, there are no oral or written modifications of or amendments or supplements to the Documents and there has been no waiver of any of the provisions of the Documents by actions or conduct of the parties or otherwise; and (e) all documents submitted to us as originals are authentic, all documents submitted to us as certified or photostatic copies or telecopies or portable document file (".PDF") copies conform to the original documents (and the authenticity of the originals of such copies), all signatures on all documents submitted to us for examination (and including signatures on photocopies, telecopies and .PDF copies) are genuine, and all public records reviewed are accurate and complete. As to certain factual matters we have relied on the Certificate as to the factual matters set forth therein, which we assume to be accurate and complete.

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:

(1) The Fund is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.

(2) The Shares have been duly authorized and, upon issuance of the Shares in exchange for the consideration and in accordance with the procedures of the Registration Statement, will be validly issued, fully paid and non-assessable.

In addition to the qualifications set forth above, the foregoing opinion is further qualified as follows:

(i)	The foregoing opinion is rendered as of the date hereof. We assume no obligation to update such opinion to reflect any facts or circumstances which may hereafter come to our attention or changes in the law which may hereafter occur.

(ii)

We have made no investigation as to, and we express no opinion concerning, the laws of any jurisdiction other than the laws of the State of Maryland. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

(iii)

We assume that the issuance of the Shares will not result in the Fund issuing shares in excess of the number of shares of any class or series of the Fund authorized by the Charter.

Without in any way limiting the foregoing, this opinion is based upon our consideration of only those statutes, rules, and regulations which, in our experience, are normally applicable to the transactions of the type contemplated by the Registration Statement, provided that we express no opinion as to compliance with the securities (or “blue sky”), broker licensing, real estate syndication or mortgage lending laws of the State of Maryland.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and the use of our name wherever it appears in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, the rules and regulations of the Securities and Exchange Commission promulgated thereunder or Item 509 of Regulation S-K.

Very truly yours,

/s/ DLA Piper LLP (US)

DLA PIPER LLP (US)

EAST\42376258.1

EX-99.J OTHER OPININ 6 exhj.htm EXHIBIT J exhj.htm

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Post-Effective Amendment 97 to Registration Statement No. 002-10760 on Form N-1A of our report dated February 9, 2009, relating to the financial statements and financial highlights of Fundamental Investors, Inc. appearing in the Statement of Additional Information, which is part of such Registration Statement, and to the references to us under the headings “Financial highlights” in the Prospectuses and “Independent registered public accounting firm” and “Prospectuses, reports to shareholders and proxy statements” in the Statement of Additional Information, which are part of such Registration Statement.

DELOITTE & TOUCHE LLP

Costa Mesa, California

April 7, 2009

EX-99.N 18F-3 PLAN 7 exhn.htm EXHIBIT N Unassociated Document

FORM OF

AMENDED AND RESTATED MULTIPLE CLASS PLAN

WHEREAS, [Name of Fund] (the “Fund”), a [State of Formation] [corporation/business trust], is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company that offers shares of [common stock/beneficial interest];

WHEREAS, American Funds Distributors, Inc. (the “Distributor”) serves as the principal underwriter for the Fund;

WHEREAS, the Fund has adopted Plans of Distribution (each a “12b-1 Plan”) under which the Fund may bear expenses of distribution of its shares, including payments to and/or reimbursement of certain expenses incurred by the Distributor in connection with its distribution of the Fund’s shares;

WHEREAS, the Fund has entered into an Administrative Services Agreement with Capital Research and Management Company under which the Fund may bear certain transfer agent and administrative expenses for certain classes of shares;

WHEREAS, the Fund is authorized to issue the following classes of shares of [common stock/beneficial interest]: Class A shares, Class B shares, Class C shares, Class F-1 shares and Class F-2 shares (together, the “Class F shares”), Class R-1 shares, Class R-2 shares, Class R-3 shares, Class R-4 shares, Class R-5 shares, and Class R-6 shares (collectively, the “Class R shares”), as well as Class 529-A shares, Class 529-B shares, Class 529-C shares, Class 529-E shares and Class 529-F-1 shares (collectively, the “Class 529 shares”);

WHEREAS, Rule 18f-3 under the 1940 Act permits open-end management investment companies to issue multiple classes of voting stock representing interests in the same portfolio if, among other things, an investment company adopts a written Multiple Class Plan (the “Plan”) setting forth the separate arrangement and expense allocation of each class and any related conversion features or exchange privileges; and

WHEREAS, the Board of [Directors/Trustees] of the Fund has determined, that it is in the best interest of each class of shares of the Fund individually, and the Fund as a whole, to adopt this Plan;

NOW THEREFORE, the Fund adopts the Plan as follows:

1. Each class of shares will represent interests in the same portfolio of investments of the Fund, and be identical in all respects to each other class, except as set forth below. The differences among the various classes of shares of the Fund will relate to: (i) distribution, service and other charges and expenses as provided for in paragraph 3 of this Plan; (ii) the exclusive right of each class of shares to vote on matters submitted to shareholders that relate solely to that class or the separate voting right of each class on matters for which the interests of one class differ from the interests of another class; and (iii) such differences relating to (a) eligible investors, (b) the designation of each class of shares, (c) conversion features, and (d) exchange privileges each as may be set forth in the Fund’s prospectus and statement of additional information (“SAI”), as the same may be amended or supplemented from time to time.

2. (a) Certain expenses may be attributable to the Fund, but not a particular class of shares thereof. All such expenses will be borne by each class on the basis of the relative aggregate net assets of the classes. Notwithstanding the foregoing, the Distributor, the investment adviser or other provider of services to the Fund may waive or reimburse the expenses of a specific class or classes to the extent permitted by Rule 18f-3 under the 1940 Act and any other applicable law.

(b) A class of shares may be permitted to bear expenses that are directly attributable to that class, including: (i) any distribution service fees associated with any rule 12b-1 Plan for a particular class and any other costs relating to implementing or amending such rule 12b-1 Plan; (ii) any administrative service fees attributable to such class; and (iii) any transfer agency, sub-transfer agency and shareholder servicing fees attributable to such class.

(c) Any additional incremental expenses not specifically identified above that are subsequently identified and determined to be applied properly to one class of shares of the Fund shall be so applied upon approval by votes of the majority of both (i) the Board of [Directors/Trustees] of the Fund; and (ii) those [Directors/Trustees] of the Fund who are not “interested persons” of the Fund (as defined in the 1940 Act) (“Independent [Directors/Trustees]”).

3. Consistent with the general provisions of section 2(b), above, each class of shares of the Fund shall differ in the amount of, and the manner in which costs are borne by shareholders as follows:

(a) Class A shares

(i) Class A shares shall be sold at net asset value plus a front-end sales charge, at net asset value without a front-end sales charge but subject to a contingent deferred sales charge (“CDSC”), and at net asset value without any sales charge, as set forth in the Fund’s prospectus and SAI.

(ii) Class A shares shall be subject to an annual distribution expense under the Fund’s Class A Plan of Distribution of up to [0.30%/0.25%] of average net assets, as set forth in the Fund’s prospectus, SAI, and Plan of Distribution. This expense consists of a service fee of up to 0.25% plus certain other distribution costs.

(b) Class B shares

(i) Class B shares shall be sold at net asset value without a front-end sales charge, but subject to a CDSC and maximum purchase limits as set forth in the Fund’s prospectus and SAI.

(ii) Class B shares shall be subject to an annual 12b-1 expense under the Fund’s Class B Plan of Distribution of 1.00% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class B Plan of Distribution. This expense shall consist of a distribution fee of 0.75% and a service fee of 0.25% of such net assets.

(iii) Class B shares will automatically convert to Class A shares of the Fund approximately eight years after purchase, subject to the limitations described in the Fund’s prospectus and SAI. All conversions shall be effected on the basis of the relative net asset values of the two classes of shares without the imposition of any sales load or other charge.

(iv) Class B shares shall be subject to a fee (included within the transfer agency expense) for additional costs associated with tracking the age of each Class B share.

(i) Class C shares shall be sold at net asset value without a front-end sales charge, but subject to a CDSC and maximum purchase limits as set forth in the Fund’s prospectus and SAI.

(ii) Class C shares shall be subject to an annual 12b-1 expense under the Fund’s Class C Plan of Distribution of 1.00% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class C Plan of Distribution. This expense shall consist of a distribution fee of 0.75% and a service fee of 0.25% of such net assets.

(iii) Class C shares shall be subject to an Administrative Services fee comprising transfer agent fees (according to the fee schedule contained in the Shareholder Services Agreement between the Fund and its transfer agent for its Class A and Class B shares) plus 0.15% of average net assets, as set forth in the Fund’s prospectus, SAI, and its Administrative Services Agreement. In calculating transfer agent fees allocable to the Class C shares, the fees generated shall be charged to the Fund and allocated to the Class C shares based on their aggregate net assets relative to those of the Class A, Class B and Class 529 shares. No transfer agent fees shall be charged for accounts held in other than street name or a networked environment.

(iv) Class C shares will automatically convert to Class F-1 shares of the Fund approximately ten years after purchase, subject to the limitations described in the Fund’s prospectus and SAI. All conversions shall be effected on the basis of the relative net asset values of the two classes of shares without the imposition of any sales load or other charge.

(v) Class C shares shall be subject to a fee, if any, (included within the transfer agency expense) for additional costs associated with tracking the age of each Class C share.

(d)

The Class F shares consisting of Class F-1 shares and Class F-2 shares

(i) The Class F shares shall be sold at net asset value without a front-end or back-end sales charge.

(ii) Class F-1 shares shall be subject to an annual 12b-1 expense under the Fund’s Class F-1 Plan of Distribution of up to 0.50% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class F-1 Plan of Distribution. This expense shall consist of a distribution fee of 0.25% and a service fee of 0.25% of such net assets.

(iii) Class F-2 shares shall not be subject to an annual 12b-1 expense.

(iv) The Class F shares shall be subject to an Administrative Services fee comprising transfer agent fees (according to the fee schedule contained in the Shareholder Services Agreement between the Fund and its transfer agent for its Class A and Class B shares) plus 0.15% of average net assets, as set forth in the Fund’s prospectus, SAI, and its Administrative Services Agreement. The Class F shares will pay only those transfer agent fees and third party pass-through fees (e.g., DST and NSCC fees) that are directly attributed to accounts of and activities generated by the Class F shares. No transfer agent fees shall be charged for accounts held in other than street name or a networked environment.

(e)

The Class R shares consisting of Class R-1 shares, Class R-2 shares, Class R-3 shares, Class R-4 shares, Class R-5 shares, and Class R-6 shares

(i) The Class R shares shall be sold at net asset value without a front-end or back-end sales charge.

(ii) Class R-1 shares shall be subject to an annual 12b-1 expense under the Fund’s Class R-1 Plan of Distribution of 1.00% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class R-1 Plan of Distribution. This expense shall consist of a distribution fee of 0.75% and a service fee of 0.25% of such net assets.

(iii) Class R-2 shares shall be subject to an annual 12b-1 expense under the Fund’s Class R-2 Plan of Distribution of up to 1.00% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class R-2 Plan of Distribution. This expense shall consist of a distribution fee of 0.75% and a service fee of 0.25% of such net assets.

(iv) Class R-3 shares shall be subject to an annual 12b-1 expense under the Fund’s Class R-3 Plan of Distribution of up to 0.75% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class R-3 Plan of Distribution. This expense shall consist of a distribution fee of 0.50% and a service fee of 0.25% of such net assets.

(v) Class R-4 shares shall be subject to an annual 12b-1 expense under the Fund’s Class R-4 Plan of Distribution of up to 0.50% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class R-4 Plan of Distribution. This expense shall consist of a distribution fee of 0.25% and a service fee of 0.25% of such net assets.

(vi) Class R-5 shares shall not be subject to an annual 12b-1 expense.

(vii) Class R-6 shares shall not be subject to an annual 12b-1 expense.

(viii) The Class R shares shall be subject to an Administrative Services fee comprising transfer agent fees (according to the fee schedule contained in the Shareholder Services Agreement between the Fund and its transfer agent for its Class A and Class B shares) plus 0.15% of average net assets for Class R-1 shares, Class R-2 shares, Class R-3 shares and Class R-4 shares, 0.10% of average net assets for Class R-5 shares and 0.05% of average net assets for Class R-6 shares, as set forth in the Fund’s prospectus, SAI, and Administrative Services Agreement. Each of the Class R share classes will pay only those transfer agent fees and third party pass-through fees (e.g., DST and NSCC fees) that are directly attributed to accounts of and activities generated by its own share class.

(ix) The Class R-2 and Class R-3 shares may be subject to additional sub-transfer agent fees paid to third parties providing services to Fund shareholders in those share classes. These fees will be charged directly to the share class incurring the expense.

(f)

The 529 share classes consisting of Class 529-A shares, Class 529-B shares, Class 529-C shares, Class 529-E shares and Class 529-F-1 shares

(i) The Class 529-A shares shall be sold at net asset value plus a front-end sales charge, at net asset value without a front-end sales charge but subject to a CDSC, and at net asset value without any sales charge, as set forth in the Fund’s prospectus and SAI.

(ii) The Class 529-B and Class 529-C shares shall be sold at net asset value without a front-end sales charge, but subject to a CDSC and maximum purchase limits as set forth in the Fund’s prospectus and SAI.

(iii) The Class 529-E and Class 529-F-1 shares shall be sold at net asset value without a front-end or back-end sales charge.

(iv) Class 529-A shares shall be subject to an annual 12b-1 expense under the Fund’s Class 529-A Plan of Distribution of up to 0.50% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class 529-A Plan of Distribution. This expense shall consist of a distribution fee of 0.25% and a service fee of 0.25% of such net assets.

(v) Class 529-B shares shall be subject to an annual 12b-1 expense under the Fund’s Class 529-B Plan of Distribution of 1.00% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class 529-B Plan of Distribution. This expense shall consist of a distribution fee of 0.75% and a service fee of 0.25% of such net assets.

(vi) Class 529-C shares shall be subject to an annual 12b-1 expense under the Fund’s Class 529-C Plan of Distribution of 1.00% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class 529-C Plan of Distribution. This expense shall consist of a distribution fee of 0.75% and a service fee of 0.25% of such net assets.

(vii) Class 529-E shares shall be subject to an annual 12b-1 expense under the Fund’s Class 529-E Plan of Distribution of up to 0.75% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class 529-E shares Plan of Distribution. This expense shall consist of a distribution fee of 0.50% and a service fee of 0.25% of such net assets.

(viii) Class 529-F-1 shares shall be subject to an annual 12b-1 expense under the Fund’s Class 529-F-1 Plan of Distribution of up to 0.50% of average net assets, as set forth in the Fund’s prospectus, SAI, and Class 529-F-1 Plan of Distribution. This expense shall consist of a distribution fee of 0.25% and a service fee of 0.25% of such net assets.

(ix) The Class 529 shares shall be subject to an Administrative Services fee of 0.15% of average net assets for all 529 shares, as set forth in the Fund’s prospectus, SAI, and Administrative Services Agreement. In calculating transfer agent fees allocable to the Class 529 shares, the fees generated from maintaining these accounts (determined using the fee schedule contained in the Shareholder Services Agreement between the Fund and its transfer agent for its Class A and Class B shares) shall be allocated to the Class 529 shares based on their aggregate net assets relative to those of the Class A, Class B and Class C shares. The fee thus determined shall be paid by CRMC from the Administrative Services Fee.

(x) The Class 529 shares shall be subject to a Virginia Administrative Fee of 0.10% of average net assets payable to the Commonwealth of Virginia, as set forth in the Fund’s prospectus and SAI.

All other rights and privileges of Fund shareholders are identical regardless of which class of shares is held.

4. This Plan shall not take effect until it has been approved by votes of the majority of both (i) the Board of [Directors/Trustees] of the Fund and (ii) the Independent [Directors/Trustees].

5. This Plan shall become effective with respect to any class of shares of the Fund, other than Class A, Class B, Class C, Class F-1, Class F-2, Class R-1, Class R-2, Class R-3, Class R-4, Class R-5, Class R-6, Class 529-A, Class 529-B, Class 529-C, Class 529-E or Class 529-F-1 shares upon the commencement of the initial public offering thereof (provided that the Plan has previously been approved with respect to such additional class by votes of the majority of both (i) the Board of [Directors/Trustees] of the Fund; and (ii) Independent [Directors/Trustees] prior to the offering of such additional class of shares), and shall continue in effect with respect to such additional class or classes until terminated in accordance with paragraph 7. An addendum setting forth such specific and different terms of such additional class or classes shall be attached to and made part of this Plan.

6. No material amendment to the Plan shall be effective unless it is approved by the votes of the majority of both (i) the Board of [Directors/Trustees] of the Fund and (ii) Independent [Directors/Trustees].

7. This Plan may be terminated at any time with respect to the Fund as a whole or any class of shares individually, by the votes of the majority of both (i) the Board of [Directors/Trustees] of the Fund and (ii) Independent [Directors/Trustees]. This Plan may remain in effect with respect to a particular class or classes of shares of the Fund even if it has been terminated in accordance with this paragraph with respect to any other class of shares.

IN WITNESS WHEREOF, the Fund has caused this Plan to be executed by its officers thereunto duly authorized, as [Month] [Day], 2009.

[NAME OF FUND]

By:
	[Name of Officer], [Title]


By:
	[Name], Secretary

EX-99.P CODE ETH 8 exhp.htm EXHIBIT P Unassociated Document

December 2008

The following is the Code of Ethics for The Capital Group Companies Inc., which includes Capital Research and Management Company (CRMC), the investment adviser to the American Funds, and those involved in the distribution of the funds, client support and services; and Capital Group International Inc. (CGII), which includes Capital Guardian Trust Company and Capital International Inc. The Code of Ethics applies to all Capital Group associates.

The Capital Group Companies

Code of Ethics

Introduction

Associates of The Capital Group Companies are responsible for maintaining the highest ethical standards when conducting business. In keeping with these standards, all associates must keep in mind the importance of putting the interests of clients and fund shareholders first. Moreover, associates should adhere to the spirit as well as the letter of the law, and be vigilant in guarding against anything that could color their judgment.

Over the years, the Capital Group has earned a reputation for the utmost integrity. Regardless of lesser standards that may be followed through business or community custom, associates must observe exemplary standards of openness, integrity, honesty and trust.

Accordingly, the Capital Group has adopted certain standards for the purpose of deterring wrongdoing and promoting: 1) honest and ethical conduct; 2) full, fair, accurate and timely disclosure in reports and documents; 3) compliance with applicable laws (including federal securities laws), rules and regulations; 4) prompt internal reporting of violations of the Capital Group’s Code of Ethics; and 5) accountability for adherence to the Code of Ethics.

General Guidelines

Specific policies are discussed in further detail later; however, the following are general guidelines of which all Capital Group associates should be aware.

Protecting Non-Public/Confidential Information

It is a crime in the U.S. and many other countries to transact in a company’s securities while in possession of material non-public information about the company. Questions regarding received material information (typically from a company “insider”) should be directed to a member of the Legal staff.

Associates are responsible for safeguarding non-public information relating to securities recommendations and fund and client holdings (e.g., analyst research reports, investment meeting discussions/notes, and current fund/client transaction information). As such, associates should not trade based on the Capital Group’s confidential and proprietary investment information.

Other types of information (e.g., marketing plans, employment issues, shareholder identities, etc.) may also be confidential and should not be shared with individuals outside the company (except those retained to provide services for the Capital Group).

Extravagant or Excessive Gifts and Entertainment

Associates should not accept extravagant or excessive gifts or entertainment from persons or companies that conduct business with the Capital Group.

No Special Treatment from Brokers

Associates may not accept negotiated commission rates or any other terms they believe may be more favorable than the broker-dealer grants to accounts with similar characteristics. U.S. broker-dealers are subject to certain rules designed to prevent favoritism toward such accounts. Favors or preferential treatment from stockbrokers may not be accepted. This rule applies to the associate’s spouse and any immediate family member residing in the same household.

No Excessive Trading of Capital Group-affiliated Funds

Associates should not engage in excessive trading of the American Funds or other Capital Group-managed investment vehicles worldwide in order to take advantage of short-term market movements. Excessive activity, such as a frequent pattern of exchanges, could involve actual or potential harm to shareholders or clients. This rule applies to the associate’s spouse and any immediate family member residing in the same household.

Ban on Initial Public Offerings (IPOs)

Associates and immediate family members residing in the same household may not participate in IPOs. Exceptions are rarely granted; however, they will be considered on a case-by-case basis (e.g., where a family member is employed by the IPO company and IPO shares are considered part of that family member’s compensation).

Outside Business Interests/Affiliations

Board of Directors/Advisory Board Member

Associates are discouraged from serving on the board of directors or advisory board of any public or private company (this rule does not apply to boards of Capital companies or funds, or where board service is a direct result of your responsibilities at Capital, such as with respect to portfolio companies of private equity funds managed by Capital). With the exception of non-profit and charitable organizations and the above-mentioned boards, approval must be received prior to serving on a board.

Material Business Ownership Interest and Affiliations

Material business ownership interests may give rise to potential conflicts of interest. Associates should disclose senior officer positions or ownership of at least 5% or more of public or private companies that are or potentially may do business with Capital or the American Funds. This reporting requirement also applies to the associate’s spouse and any immediate family member(s) residing in the same household.

Other Guidelines

Associates should not knowingly misrepresent, or cause others to misrepresent, facts about the Capital Group to fund or client shareholders, regulators or any other member of the public. Disclosure in reports and documents should be fair and accurate.

Reporting Requirements

Annual Certification of the Code of Ethics

All associates are required to certify at least annually that they have read and understand the Code of Ethics.

Reporting Violations

Associates are responsible for reporting violations of the Capital Group’s Code of Ethics, including: (1) fraud or illegal acts involving any aspect of the Capital Group’s business; (2) noncompliance with applicable laws, rules and regulations; (3) intentional or material misstatements in regulatory filings, internal books and records, or client records and reports; or (4) activity that is harmful to fund or client shareholders. Deviations from controls or procedures that safeguard the company, including the assets of shareholders and clients, should also be reported. Reported violations of the Code of Ethics will be investigated and appropriate actions will be taken.

Associates may report confidentially to a manager/department head. Associates may also contact:

Ø	The CGC Audit Committee

Ø	The CIL Audit Committee

Ø	Any lawyer employed by the Capital Group organization

Failure to adhere to the Code of Ethics may result in disciplinary action, including termination.

Conflicts of Interest

Gifts and Entertainment Policy

A conflict of interest occurs when the private interests of associates interfere or could potentially interfere with their responsibilities at work. Associates must not place themselves or the company in a position of actual or potential conflict. Associates may not accept (or give) gifts worth more than US$100, or accept (or extend) excessive business entertainment, loans, or anything else involving personal gain from (or to) those who conduct business with the company. Business entertainment exceeding US$500 in value should not be accepted (or given) unless the associate receives permission from his/her manager and the Gifts and Entertainment Committee (GECO).

Gifts or entertainment extended by a Capital Group associate and approved by the associate’s manager for reimbursement by the Capital Group do not need to be reported (or precleared). The expenses, however, are subject to the approval of the associate’s manager. When giving a gift or extending entertainment on behalf of the Capital Group, it is important to keep in mind that extravagant or excessive gifts or entertainment may create the appearance of conflict. Associates should also be aware that certain laws or rules may prohibit or limit gifts or entertainment extended to public officials – especially those responsible for investing public funds.

Reporting

The limitations on accepting (or giving) gifts apply to all associates as described above, and associates will be asked to complete quarterly disclosures. Associates must report any gift exceeding US$50 and business entertainment in which an event exceeds US$75 (although it is recommended that associates report all gifts and entertainment).

Charitable Contributions

In soliciting donations from various people in the business community, associates must never allow the Capital Group’s present or anticipated business to be a factor.

Gifts and Entertainment Committee (GECO)

The Gifts and Entertainment Committee (GECO) oversees administration of and compliance with the Policy.

Political Contributions Policy

This policy applies to all associates and their spouses.

Making Political Contributions

Contributions (financial or non-financial) made to certain political campaigns may raise potential conflicts of interest due to certain office holders’ ability to direct business to the Capital Group. Concerns may arise when contributions are made to persons currently holding, or candidates running for, a city, county or state treasurer position. As a result, associates should not make contributions to persons currently holding or running for these positions.

Associates are encouraged to seek guidance for contributions to other political offices. Some offices may have the power to influence the decision to choose a Capital Group company to manage public funds. Other offices may have the ability to influence the decision to choose the American Funds as an investment option for public funds.

As a general matter, contributions to candidates for U.S. President, Senate, House of Representatives and contributions to national political parties are permissible (unless the candidate currently holds an office that may raise potential conflict of interest related issues as described above). Likewise, unless the associate is subject to the special “CollegeAmerica” requirements (described below), contributions to State Governor and State Representative positions, and state political parties are permissible.

Special Political Contribution Requirements – CollegeAmerica

Certain associates involved with "CollegeAmerica," the American Funds 529 College Savings Plan sponsored by the Commonwealth of Virginia, will receive a special reporting form. These associates are subject to additional restrictions and reporting requirements. For example, these associates generally may not contribute to Virginia political candidates or parties. These associates must also preclear any contributions to political candidates and parties in all states and municipalities and any Political Action Committee (PAC) other than to the Investment Company Institute’s PAC (IMPAC).

Soliciting Political Contributions

In soliciting political contributions from various people in the business community, associates must never allow the Capital Group’s present or anticipated business relationships to be a factor.

Other Considerations

Please keep in mind that any political contributions associates make or solicit should be viewed as personal. Therefore, associates should not use the Capital Group’s letterhead for correspondence regarding these contributions, and associates should not hold fundraising events in the Capital Group’s offices.

Political Contributions Committee

The Political Contributions Committee oversees the administration of the Policy. The Committee evaluates questions relating to potential political contributions considering, among other things: 1) the associate’s relationship with the candidate, i.e., is the relationship a personal or business one and 2) the candidate's current or potential relationship with the Capital Group.

Insider Trading Policy

Antifraud provisions of U.S. securities laws as well as the laws of other countries generally prohibit persons in possession of material non-public information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines and jail sentences.

While investment research analysts are most likely to come in contact with material non-public information, the rules (and sanctions) in this area apply to all Capital Group associates and extend to activities both within and outside each associate's duties. Associates who believe they have material non-public information should contact any Capital Group lawyer.

Personal Investing Policy

This policy applies only to “covered associates.”

Introduction

Certain associates may have access to confidential information that places them in a position of special trust. They are affiliated with a group of companies responsible for the management of over a trillion dollars belonging to mutual fund shareholders and other clients. Laws, ethics and the Capital Group’s policies place a responsibility on all associates to ensure that the highest standards of honesty and integrity are maintained at all times.

There are several rules that must be followed to avoid possible conflicts of interest in regards to personal investments. Keep in mind, however, that placing the interests of fund and client shareholders first is the core principle of the Capital Group’s policies and applies even if the matter is not covered by a specific provision.

The following is only a summary of the Capital Group’s Personal Investing Policy.

Personal investing should be viewed as a privilege, not a right. As such, the Personal Investing Committee (PICO) may place limitations on the number of preclearances and/or transactions.

Covered Associates

“Covered associates” are associates with access to non-public information relating to current or imminent fund/client transactions, investment recommendations or fund portfolio holdings. Covered associates include the associate’s spouse and other immediate family members (e.g., children, siblings and parents) residing in the same household. Any reference to the requirements of covered associates in this document applies to these family members.

Additional rules apply to investment professionals:

“Investment professionals” include portfolio counselors/managers, investment counselors, investment analysts and research associates, certain investment specialists, trading associates, including trading assistants, and investment control, portfolio control and fixed income control associates, including assistants.

Prohibited Transactions

The following transactions are prohibited:

Ø	Initial Public Offering (IPO) investments

Exceptions are rarely granted; however, they will be considered on a case-by-case basis (e.g., where a family member is employed by the IPO company and IPO shares are considered part of that family member’s compensation).

Ø	Short selling of securities subject to preclearance

Ø	Spread betting/contracts for difference (CFD) on securities (allowed only on currencies, commodities, and broad-based indices)

Ø	Writing puts and calls on securities subject to preclearance

Reporting Requirements

Covered associates are required to report their securities accounts, holdings and transactions. Initial, quarterly, and annual disclosure forms will be made available for this purpose.

Preclearance of Securities Transactions

Certain transactions may be exempt from preclearance.

Before buying or selling securities, covered associates must check with the staff of PICO.

Preclearance requests will be handled during the hours the New York Stock Exchange (NYSE) is open, generally 6:30am to 1:00pm Pacific Standard Time.

Transactions will generally not be permitted in securities on days the funds or clients are transacting in the issuer in question. In the case of investment professionals, permission to transact will be denied if the transaction would violate the seven-day blackout or short-term profits policies (see “Additional Policies Specific to Investment Professionals” below). Preclearance requests by investment professionals are subject to special review.

Additional Policies Specific to Investment Professionals

Disclosure of Personal and Professional Holdings (Cross-Holdings)

Portfolio counselors/managers, investment analysts and certain investment specialists will be asked to disclose securities they own both personally and professionally on a quarterly basis. Analysts will also be required to disclose securities they hold personally that are within their research coverage or could be eligible for recommendation by the analyst professionally in the future in light of current research coverage areas. This disclosure will be reviewed by the staff of PICO and may also be reviewed by various Capital Group committees.

If disclosure has not already been made to PICO by including the information on a disclosure form, any associate who is in a position to recommend a security that the associate owns personally for purchase or sale in a fund or client account should first disclose such personal ownership either in writing (in a company write-up) or verbally (when discussing the company at investment meetings) prior to making a recommendation.1

In addition, portfolio counselors/managers, investment analysts and certain investment specialists are encouraged to notify investment/portfolio/fixed-income control of personal ownership of securities when placing an order (especially with respect to a first-time purchase).

Blackout Periods

Investment professionals may not buy or sell a security during a period beginning seven calendar days before and ending seven calendar days after a fund or client account transacts in that issuer. The blackout period applies only to trades in the same management company with which the associate is affiliated.

If a fund or client account transaction takes place in the seven calendar days following a precleared transaction by an investment professional, the personal transaction may be reviewed by PICO to determine the appropriate action, if any.

Ban on Short-term Trading2

Investment professionals are generally prohibited from the purchase and sale or sale and purchase of the same (or equivalent) securities within 60 calendar days. However, if a situation arises whereby the associate is attempting to take a tax loss, an exception may be made. This restriction applies to the purchase of an option and the sale of an option, or the purchase of an option and the exercise of the option and sale of shares within 60 days. Although the associate may be granted preclearance at the time the option is purchased, there is a risk of being denied permission to sell the option or exercise and sell the underlying security. Accordingly, transactions in options on individual securities are strongly discouraged.

Exchange Traded Funds (ETFs) and Index Funds

Investment professionals should preclear ETFs and index funds (including UCITS, SICAVs, OEICs, FCPs, Unit Trusts, Publikumsfonds, etc.) except those based on certain indices.

Penalties for Violating the Policy

Covered associates may be subject to penalties for violating the Policy including failing to preclear, report, submit statements and/or failing to submit timely initial, quarterly and annual disclosure forms.

Personal Investing Committee

The Personal Investing Committee (PICO) oversees the administration of the Policy. Among other duties, the Committee considers certain types of preclearance requests as well as requests for exceptions to the Policy.

* * * *

1 This disclosure requirement is consistent with both the CFA Institute standards as well as the ICI Advisory Group Guidelines.

2 Applies to securities subject to preclearance.

[Logo – American Funds®]

The following is representative of the Code of Ethics in effect for each Fund:

CODE OF ETHICS

With respect to non-affiliated Board members and all other access persons to the extent that they are not covered by The Capital Group Companies, Inc. policies:

No Board member shall so use his or her position or knowledge gained therefrom as to create a conflict between his or her personal interest and that of the Fund.

No Board member shall engage in excessive trading of shares of the fund or any other affiliated fund to take advantage of short-term market movements.

Each non-affiliated Board member shall report to the Secretary of the Fund not later than thirty (30) days after the end of each calendar quarter any transaction in securities which such Board member has effected during the quarter which the Board member then knows to have been effected within fifteen (15) days before or after a date on which the Fund purchased or sold, or considered the purchase or sale of, the same security.

For purposes of this Code of Ethics, transactions involving United States Government securities as defined in the Investment Company Act of 1940, bankers’ acceptances, bank certificates of deposit, commercial paper, or shares of registered open-end investment companies are exempt from reporting as are non-volitional transactions such as dividend reinvestment programs and transactions over which the Board member exercises no control.

* * * *

In addition, the Fund has adopted the following standards in accordance with the requirements of Form N-CSR adopted by the Securities and Exchange Commission pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 for the purpose of deterring wrongdoing and promoting: 1) honest and ethical conduct, including handling of actual or apparent conflicts of interest between personal and professional relationships; 2) full, fair, accurate, timely and understandable disclosure in reports and documents that a fund files with or submits to the Commission and in other public communications made by the fund; 3) compliance with applicable governmental laws, rules and regulations; 4) the prompt internal reporting of violations of the Code of Ethics to an appropriate person or persons identified in the Code of Ethics; and 5) accountability for adherence to the Code of Ethics. These provisions shall apply to the principal executive officer or chief executive officer and treasurer (“Covered Officers”) of the Fund.

It is the responsibility of Covered Officers to foster, by their words and actions, a corporate culture that encourages honest and ethical conduct, including the ethical resolution of, and appropriate disclosure of conflicts of interest. Covered Officers should work to assure a working environment that is characterized by respect for law and compliance with applicable rules and regulations.

Each Covered Officer must act in an honest and ethical manner while conducting the affairs of the Fund, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Duties of Covered Officers include:

Acting with integrity;

Adhering to a high standard of business ethics; and

Not using personal influence or personal relationships to improperly influence investment decisions or financial reporting whereby the Covered Officer would benefit personally to the detriment of the Fund.

Each Covered Officer should act to promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with or submits to, the Securities and Exchange Commission and in other public communications made by the Fund.

Covered Officers should familiarize themselves with disclosure requirements applicable to the Fund and disclosure controls and procedures in place to meet these requirements; and

Covered Officers must not knowingly misrepresent, or cause others to misrepresent facts about the Fund to others, including the Fund’s auditors, independent directors, governmental regulators and self-regulatory organizations.

Any existing or potential violations of this Code of Ethics should be reported to The Capital Group Companies’ Personal Investing Committee. The Personal Investing Committee is authorized to investigate any such violations and report their findings to the Chairman of the Audit Committee of the Fund. The Chairman of the Audit Committee may report violations of the Code of Ethics to the Board or other appropriate entity including the Audit Committee, if he or she believes such a reporting is appropriate. The Personal Investing Committee may also determine the appropriate sanction for any violations of this Code of Ethics, including removal from office, provided that removal from office shall only be carried out with the approval of the Board.

Application of this Code of Ethics is the responsibility of the Personal Investing Committee, which shall report periodically to the Chairman of the Audit Committee of the Fund.

Material amendments to these provisions must be ratified by a majority vote of the Board. As required by applicable rules, substantive amendments to the Code of Ethics must be filed or appropriately disclosed.

December 2005

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