fi485b.htm

<PAGE>

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

Fundamental Investors/SM/

CLASS TICKER F-1.... AFIFX 529-C.. CFNCX
A...... ANCFX F-2.... FINFX 529-E.. CFNEX
B...... AFIBX 529-A.. CFNAX 529-F-1 CFNFX
C...... AFICX 529-B.. CFNBX

PROSPECTUS

March 1, 2010

TABLE OF CONTENTS

1 Investment objective
1 Fees and expenses of the fund
3 Principal investment strategies
3 Principal risks
4 Investment results
6 Management
6 Purchase and sale of fund shares
7 Tax information
7 Payments to broker-dealers and other financial
intermediaries
8 Investment objective, strategies and risks
9 Additional investment results
11 Management and organization
14 Shareholder information
15 Choosing a share class
19 Purchase, exchange and sale of shares
24 Sales charges
27 Sales charge reductions and waivers
31 Rollovers from retirement plans to IRAs
31 Plans of distribution
32 Other compensation to dealers
32 How to sell shares
34 Distributions and taxes
36 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.

<PAGE>

Investment objective

The fund's investment objective is to achieve long-term growth of capital and
income.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for sales charge discounts if you and your
family invest, or agree to invest in the future, at least $25,000 in American
Funds. More information about these and other discounts is available from your
financial professional and in the "Sales charge reductions and waivers" section
on page 27 of the prospectus and on page 55 of the fund's statement of
additional information.

<SHAREHOLDER FEES
(fees paid directly from your investment)
- ----------------------------------------------------SHARE CLASSES--------------

-----------------------------F-1, F-2-
A AND B AND C AND AND
529-A 529-B 529-C 529-E 529-F-1

- -------------------------------------------------------------------------------

Maximum sales charge (load) imposed on 5.75% none none none none
purchases (as a percentage of offering
price)
- -------------------------------------------------------------------------------
Maximum deferred sales charge (load) none 5.00% 1.00% none none
(as a percentage of the amount
redeemed)
- -------------------------------------------------------------------------------
Maximum sales charge (load) imposed on none none none none none
reinvested dividends
- -------------------------------------------------------------------------------
Redemption or exchange fees none none none none none
- -------------------------------------------------------------------------------
Maximum annual account fee $10 $10 $10 $10 $10
(529 share classes only)

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment)
- --------------------------------------------------SHARE CLASSES----------------

--A-------B-------C------F-1-------F-2----

- -------------------------------------------------------------------------------

Management fees 0.26% 0.26% 0.26% 0.26% 0.26%
- -------------------------------------------------------------------------------
Distribution and/or service 0.23 1.00 1.00 0.24 none
(12b-1) fees
- -------------------------------------------------------------------------------
Other expenses 0.20 0.20 0.22 0.17 0.17
- -------------------------------------------------------------------------------
Total annual fund operating 0.69 1.46 1.48 0.67 0.43
expenses
529-A 529-B 529-C 529-E 529-F-1
- -------------------------------------------------------------------------------
Management fees 0.26% 0.26% 0.26% 0.26% 0.26%
- -------------------------------------------------------------------------------
Distribution and/or service 0.20 1.00 1.00 0.50 0.00
(12b-1) fees
- -------------------------------------------------------------------------------
Other expenses 0.27 0.29 0.29 0.28 0.28
- -------------------------------------------------------------------------------
Total annual fund operating 0.73 1.55 1.55 1.04 0.54
expenses

Fundamental Investors / Prospectus

<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes 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. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------

A $641 $783 $ 937 $1,384
- ---------------------------------------------------------------------
B 649 862 997 1,537
- ---------------------------------------------------------------------
C 251 468 808 1,768
- ---------------------------------------------------------------------
F-1 68 214 373 835
- ---------------------------------------------------------------------
F-2 44 138 241 542
- ---------------------------------------------------------------------
529-A 665 834 1,016 1,534
- ---------------------------------------------------------------------
529-B 677 928 1,102 1,726
- ---------------------------------------------------------------------
529-C 277 528 902 1,945
- ---------------------------------------------------------------------
529-E 126 370 632 1,374
- ---------------------------------------------------------------------
529-F-1 75 213 361 783

For the share classes listed below, you would pay the following if you did not
redeem your shares:

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------

B $149 $462 $797 $1,537
- ---------------------------------------------------------------------
C 151 468 808 1,768
- ---------------------------------------------------------------------
529-B 177 528 902 1,726
- ---------------------------------------------------------------------
529-C 177 528 902 1,945
- ---------------------------------------------------------------------

PORTFOLIO TURNOVER

The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate was 30%
of the average value of its portfolio.

Fundamental Investors / Prospectus
<PAGE>

Principal investment strategies

The fund seeks to invest primarily in common stocks of companies that appear to
offer superior opportunities for capital growth and most of which have a history
of paying dividends. In addition, the fund 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 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. The investment adviser
uses a system of multiple portfolio counselors in managing the fund's assets.
Under this approach, the portfolio of the fund is divided into segments managed
by individual counselors who decide how their respective segments will be
invested.

Principal risks

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.

Investors in the fund should have a long-term perspective and, for example, be
able to tolerate potentially sharp declines in value.

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

Fundamental Investors / Prospectus

<PAGE>

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent. These investments
may also be affected by currency fluctuations and controls; different
accounting, auditing, financial reporting, disclosure, regulatory and legal
standards and practices; expropriation; changes in tax policy; greater market
volatility; different 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.

You should consider how this fund fits into your overall investment program.

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
governmental agency, entity or person.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 5 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. Past results (before and after taxes) are not predictive of future
results. Updated information on the fund's results can be obtained by visiting
americanfunds.com.

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]

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
2009 33.36

[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 17.14% (quarter ended June 30, 2009)
LOWEST -23.34% (quarter ended December 31, 2008)

Fundamental Investors / Prospectus
<PAGE>

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2009 (WITH MAXIMUM SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -------------------------------------------------------------------------------------

A - Before taxes 8/1/1978 25.71% 2.77% 2.99% 12.26%
- After taxes on 25.38 2.21 2.30 N/A
distributions
- After taxes on distributions and sale of 17.04 2.41 2.39 N/A
fund shares

SHARE CLASS (before taxes) INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------------

B 3/15/2000 27.30% 2.84% 3.04%
- -------------------------------------------------------------------------
C 3/15/2001 31.26 3.14 3.59
- -------------------------------------------------------------------------
F-1 3/15/2001 33.40 3.99 4.43
- -------------------------------------------------------------------------
F-2 8/1/2008 33.72 N/A -6.28
- -------------------------------------------------------------------------
529-A 2/15/2002 25.65 2.71 4.89
- -------------------------------------------------------------------------
529-B 2/19/2002 27.16 2.72 5.02
- -------------------------------------------------------------------------
529-C 2/15/2002 31.22 3.08 4.80
- -------------------------------------------------------------------------
529-E 3/7/2002 32.89 3.61 4.63
- -------------------------------------------------------------------------
529-F-1 9/23/2002 33.56 4.11 9.51

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

S&P 500 (reflects no deductions for
fees, expenses or taxes) 26.47% 0.42% -0.95% 11.21%
Lipper Growth & Income Funds Index
(reflects no 29.10 0.75 1.20 10.60
deductions for fees or taxes)
MSCI/(R)/ World Index (reflects no
deductions for fees, 30.79 2.57 0.23 10.39
expenses or taxes)
Class A annualized 30-day yield at December 31, 2009: 1.28%
(For current yield information, please call American FundsLine/(R)/ at
800/325-3590.)

1 Standard & Poor's 500 Composite Index (S&P 500) reflects certain market
sectors in which the fund may invest. Lipper Growth & Income Funds Index
includes the fund and other mutual funds that disclose investment objectives
that are reasonably comparable to the fund's investment objective. MSCI World
Index also reflects certain market sectors in which the fund may invest. See
page 9 of this prospectus for more information on the indexes listed above.
2 Lifetime results for the index(es) shown are measured from August 1, 1978,
when Capital Research and Management Company became the fund's investment
adviser.

After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes. Your actual
after-tax returns depend on your individual tax situation and likely will differ
from the results shown above. In addition, after-tax returns are not relevant if
you hold your fund shares through a tax-deferred arrangement, such as a 401(k)
plan, individual retirement account (IRA) or 529 college savings plan.

Fundamental Investors / Prospectus

<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:

PORTFOLIO COUNSELOR PRIMARY TITLE
PORTFOLIO COUNSELOR/ EXPERIENCE WITH INVESTMENT ADVISER
FUND TITLE (if applicable) IN THIS FUND (or one of its divisions)
- ------------------------------------------------------------------------------

DINA N. PERRY 17 years Senior Vice President -
President and Director Capital World Investors
- ------------------------------------------------------------------------------
MICHAEL T. KERR 11 years Senior Vice President -
Senior Vice President Capital World Investors
- ------------------------------------------------------------------------------
RONALD B. MORROW 7 years Senior Vice President -
Vice President Capital World Investors
- ------------------------------------------------------------------------------
JAMES E. DRASDO 26 years Senior Vice President -
Capital World Investors
- ------------------------------------------------------------------------------
BRADY L. ENRIGHT 4 years Senior Vice President -
Capital World Investors
- ------------------------------------------------------------------------------

Purchase and sale of fund shares

PURCHASE MINIMUMS (for all share classes)
- ------------------------------------------------------------------------------

TO ESTABLISH AN ACCOUNT (including retirement plan and 529 accounts) $250
For a payroll deduction retirement plan account, payroll deduction 25
savings plan account or employer-sponsored 529 account
TO ADD TO AN ACCOUNT 50
For a payroll deduction retirement plan account, payroll deduction 25
savings plan account or employer-sponsored 529 account
- ------------------------------------------------------------------------------

You may sell (redeem) shares through your dealer or financial adviser or by
writing to American Funds Service Company at P.O. Box 6007, Indianapolis,
Indiana 46206-6007; telephoning American Funds Service Company at 800/421-0180;
faxing American Funds Service Company at 317/735-6636; or accessing our website
at americanfunds.com.

Fundamental Investors / Prospectus
<PAGE>

Tax information

Dividends and capital gain distributions you receive from the fund are subject
to federal income taxes and may also be subject to state and local taxes.

Payments to broker-dealers and other financial intermediaries

If you purchase shares of the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and the fund's distributor or its
affiliates may pay the intermediary for the sale of fund shares and related
services. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your individual financial adviser to
recommend the fund over another investment. Ask your individual financial
adviser or visit your financial intermediary's website for more information.

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 seeks to invest primarily in common stocks of companies that
appear to offer superior opportunities for capital growth and most of which have
a history of paying dividends. In addition, the fund 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.

Investors in the fund should have a long-term perspective and, for example, be
able to tolerate potentially sharp declines in value.

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. For temporary
defensive purposes, the fund may hold a significant portion of its assets in
such securities. The investment adviser may determine that it is appropriate to
take such action in response to certain circumstances, such as periods of market
turmoil. 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.

You should consider how this fund fits into your overall investment program.

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

Fundamental Investors / Prospectus
<PAGE>

Additional investment results

Unlike the table on page 5, the table below reflects the fund's results
calculated without sales charges.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2009 (WITHOUT SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -------------------------------------------------------------------------------------

A - Before taxes 8/1/1978 33.36% 3.99% 3.61% 12.48%
- After taxes on 33.00 3.43 2.91 N/A
distributions
- After taxes on distributions and sale of 22.03 3.47 2.93 N/A
fund shares

SHARE CLASS (before taxes) INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------------

B 3/15/2000 32.30% 3.20% 3.04%
- -------------------------------------------------------------------------
C 3/15/2001 32.26 3.14 3.59
- -------------------------------------------------------------------------
F-1 3/15/2001 33.40 3.99 4.43
- -------------------------------------------------------------------------
F-2 8/1/2008 33.72 N/A -6.28
- -------------------------------------------------------------------------
529-A 2/15/2002 33.30 3.94 5.68
- -------------------------------------------------------------------------
529-B 2/19/2002 32.16 3.07 5.02
- -------------------------------------------------------------------------
529-C 2/15/2002 32.22 3.08 4.80
- -------------------------------------------------------------------------
529-E 3/7/2002 32.89 3.61 4.63
- -------------------------------------------------------------------------
529-F-1 9/23/2002 33.56 4.11 9.51

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

S&P 500 (reflects no deductions for
fees, expenses or taxes) 26.47% 0.42% -0.95% 11.21%
Lipper Growth & Income Funds Index
(reflects no 29.10 0.75 1.20 10.60
deductions for fees or taxes)
MSCI World Index (reflects no
deductions for fees, expenses 30.79 2.57 0.23 10.39
or taxes)
Class A distribution rate at December 31, 2009: 1.47%/3/
(For current distribution rate information, please call American FundsLine
at 800/325-3590.)

1 Standard & Poor's 500 Composite Index (S&P 500) reflects certain market
sectors in which the fund may invest. Lipper Growth & Income Funds Index
includes the fund and other mutual funds that disclose investment objectives
that are reasonably comparable to the fund's investment objective. MSCI World
Index also reflects certain market sectors in which the fund may invest.
2 Lifetime results for the index(es) shown are measured from August 1, 1978,
when Capital Research and Management Company became the fund's investment
adviser.
3 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>

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. 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 more than 20 developed
market 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.

All fund results reflected in the "Investment results" section of this
prospectus and this "Additional investment results" section 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.

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." Please see the statement of additional information for
further details. 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, 2009.

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. Although not currently contemplated, Capital
Research and Management Company could incorporate its Fixed Income division in
the future and engage it to provide day-to-day investment management of
fixed-income assets. Capital Research and Management Company and each of the
funds it advises have applied to the U.S. Securities and Exchange Commission for
an exemptive order that would give Capital Research and Management Company the
authority to use, upon approval of the fund's board, its management subsidiaries
and affiliates to provide day-to-day investment management services to the fund,
including making changes to the management subsidiaries and affiliates providing
such services. The fund's shareholders approved this arrangement at a meeting of
the fund's shareholders on November 24, 2009. There is no assurance that Capital
Research and Management Company will incorporate its investment divisions or
exercise any authority, if granted, under an exemptive order.

In addition, shareholders approved a proposal to reorganize the fund into a
Delaware statutory trust. The reorganization is expected to be completed in 2010
or early 2011; however, the fund reserves the right to delay the implementation.

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 U.S.
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. The table below shows the investment
experience and role in management of the fund for each of the fund's primary
portfolio counselors.

Fundamental Investors / Prospectus
<PAGE>

ROLE IN
INVESTMENT EXPERIENCE MANAGEMENT
PORTFOLIO COUNSELOR EXPERIENCE IN THIS FUND OF THE FUND
- -----------------------------------------------------------------------------------------

DINA N. PERRY Investment 17 years Serves as an equity
professional for 32 (plus 1 year of portfolio counselor
years in total; prior experience
18 years with Capital as an
Research and investment analyst
Management Company or for the fund)
affiliate
- -----------------------------------------------------------------------------------------
MICHAEL T. KERR Investment 11 years Serves as an equity
professional for 27 (plus 5 years of portfolio counselor
years in total; prior experience
25 years with Capital as an
Research and investment analyst
Management Company or for the fund)
affiliate
- -----------------------------------------------------------------------------------------
RONALD B. MORROW Investment 7 years Serves as an equity
professional for 42 (plus 5 years of portfolio counselor
years in total; prior experience
13 years with Capital as an
Research and investment analyst
Management Company or for the fund)
affiliate
- -----------------------------------------------------------------------------------------
JAMES E. DRASDO Investment 26 years Serves as an equity
professional for 38 (plus 6 years of portfolio counselor
years in total; prior experience
33 years with Capital as an
Research and investment analyst
Management Company or for the fund)
affiliate
- -----------------------------------------------------------------------------------------
BRADY L. ENRIGHT Investment 4 years Serves as an equity
professional for 18 portfolio counselor
years in total;
13 years with Capital
Research and
Management Company or
affiliate
- -----------------------------------------------------------------------------------------

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

Fundamental Investors / Prospectus

<PAGE>

Shareholder information

SHAREHOLDER SERVICES

American Funds Service Company/(R)/,the fund's transfer agent, offers a wide
range of services that you can use to alter your investment program should your
needs or circumstances change. These services may be terminated or modified at
any time upon 60 days' written notice.

AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
Call toll-free from anywhere in the United States
(8 a.m. to 8 p.m. ET): 800/421-0180
Access the American Funds website : americanfunds.com

[map of the United States]

INDIANA VIRGINIA
SERVICE CENTER SERVICE CENTER
American Funds American Funds
Service Company Service Company
P.O. Box 6007 P.O. Box 2280
Indianapolis, Indiana Norfolk, Virginia
46206-6007 23501-2280
Fax: 317/735-6636 Fax: 757/670-4761

A MORE DETAILED DESCRIPTION OF POLICIES AND SERVICES IS INCLUDED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION AND THE OWNER'S GUIDE SENT TO NEW AMERICAN
FUNDS SHAREHOLDERS ENTITLED WELCOME. CLASS 529 SHAREHOLDERS SHOULD ALSO REFER TO
THE APPLICABLE PROGRAM DESCRIPTION FOR INFORMATION ON POLICIES AND SERVICES
SPECIFICALLY RELATING TO THEIR ACCOUNT(S). These documents are available by
writing to or calling American Funds Service Company. 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. Please see your financial adviser or investment dealer
for more information.

Fundamental Investors / Prospectus
<PAGE>

Choosing a share class

The fund offers different classes of shares through this prospectus. Class A, C,
F-1 and F-2 shares are available through various investment programs or
accounts, including certain types of retirement plans (see limitations below).
The services or share classes available to you may vary depending upon how you
wish to purchase shares of the fund. Unless otherwise noted, references in this
prospectus to Class F shares refer to both Class F-1 and F-2 shares.

Class B and 529-B shares may no longer be purchased or acquired, except by
exchange from Class B or 529-B shares of another fund in the American Funds
family. Any investment received by the fund that is intended for Class B or
529-B shares will instead be invested in Class A or 529-A shares and will be
subject to any applicable sales charges.

Shareholders with investments in Class B and 529-B shares may continue to hold
such shares until they convert to Class A or 529-A shares. However, no
additional investments will be accepted in Class B or 529-B shares. Dividends
and capital gain distributions may continue to be reinvested in Class B or 529-B
shares until their conversion dates. In addition, shareholders invested in Class
B or 529-B shares will be able to exchange those shares for Class B or 529-B
shares of other American Funds offering Class B or 529-B shares until they
convert.

Investors residing in any state may purchase Class 529 shares through an account
established with a 529 college savings plan managed by the American Funds
organization. Class 529-A, 529-B, 529-C and 529-F-1 shares are structured
similarly to the corresponding Class A, B, C and F-1 shares. For example, the
same initial sales charges apply to Class 529-A shares as to Class A shares.
Class 529-E shares are available only to investors participating through an
eligible employer plan.

Each share class represents an investment in the same portfolio of securities,
but each class has its own sales charge and expense structure, allowing you to
choose the class that best fits your situation. WHEN YOU PURCHASE SHARES OF THE
FUND, YOU SHOULD CHOOSE A SHARE CLASS. IF NONE IS CHOSEN, YOUR INVESTMENT WILL
BE MADE IN CLASS A SHARES OR, IN THE CASE OF A 529 PLAN INVESTMENT, CLASS 529-A
SHARES.

Factors you should consider when choosing a class of shares include:

.. how long you expect to own the shares;

.. how much you intend to invest;

.. total expenses associated with owning shares of each class;

.. whether you qualify for any reduction or waiver of sales charges (for
example, Class A or 529-A shares may be a less expensive option over time,
particularly if you qualify for a sales charge reduction or waiver);

.. whether you plan to take any distributions in the near future (for example,
the contingent deferred sales charge will not be waived if you sell your Class
529-B or 529-C shares to cover higher education expenses); and

Fundamental Investors / Prospectus

<PAGE>

.. availability of share classes:

-- Class C shares are not available to retirement plans that do not currently
invest in such shares and that are eligible to invest in Class R shares,
including employer-sponsored retirement plans such as defined benefit plans,
401(k) plans, 457 plans, 403(b) plans, and money purchase pension and
profit-sharing plans; and

-- Class F and 529-F-1 shares are generally available only to fee-based
programs of investment dealers that have special agreements with the fund's
distributor and to certain registered investment advisers.

EACH INVESTOR'S FINANCIAL CONSIDERATIONS ARE DIFFERENT. YOU SHOULD SPEAK WITH
YOUR FINANCIAL ADVISER TO HELP YOU DECIDE WHICH SHARE CLASS IS BEST FOR YOU.

UNLESS OTHERWISE NOTED, REFERENCES TO CLASS A, B, C OR F-1 SHARES ON THE
FOLLOWING PAGES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR
529-F-1 SHARES.

Fundamental Investors / Prospectus
<PAGE>

SUMMARY OF THE PRIMARY DIFFERENCES AMONG SHARE CLASSES

CLASS A SHARES
Initial sales charge up to 5.75% (reduced for purchases of $25,000 or more
and eliminated for purchases of $1 million or more)
Contingent deferred none (except that a charge of 1.00% applies to certain
sales charge redemptions made within one year following purchases
of $1 million or more without an initial sales charge)
12b-1 fees up to .25% annually (for Class 529-A shares, may not
exceed .50% annually)
Dividends generally higher than other classes due to lower
annual expenses, but may be lower than Class F-1
shares, depending on relative expenses, and lower than
Class F-2 shares due to 12b-1 fees
Purchase maximum none
Conversion none

CLASS B SHARES
Initial sales charge none
Contingent deferred starts at 5.00%, declining to 0% six years after
sales charge purchase
12b-1 fees up to 1.00% annually
Dividends generally lower than Class A and F shares due to
higher 12b-1 fees and other expenses, but higher than
Class C shares due to lower other expenses
Purchase maximum Class B shares may not be purchased or acquired except
by exchange from Class B shares of other American
Funds
Conversion automatic conversion to Class A or 529-A shares in the
month of the eight-year anniversary of the purchase
date, reducing future annual expenses

CLASS C SHARES
Initial sales charge none
Contingent deferred 1.00% if shares are sold within one year after
sales charge purchase
12b-1 fees up to 1.00% annually
Dividends generally lower than other classes due to higher 12b-1
fees and other expenses
Purchase maximum see the discussion regarding purchase minimums and
maximums in "Purchase and exchange of shares"
Conversion automatic conversion to Class F-1 shares in the month
of the 10-year anniversary of the purchase date,
reducing future annual expenses (Class 529-C shares
will not convert to Class 529-F-1 shares)

CLASS 529-E SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees currently up to .50% annually (may not exceed .75%
annually)
Dividends generally higher than Class 529-B and 529-C shares due
to lower 12b-1 fees, but lower than Class 529-A and
529-F-1 shares due to higher 12b-1 fees
Purchase maximum none
Conversion none

CLASS F-1 SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees currently up to .25% annually (may not exceed .50%
annually)
Dividends generally higher than Class B and C shares due to
lower 12b-1 fees, but may be higher than Class A
shares, depending on relative expenses, and lower than
Class F-2 shares due to 12b-1 fees
Purchase maximum none
Conversion none

CLASS F-2 SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees none
Dividends generally higher than other classes due to absence of
12b-1 fees
Purchase maximum none
Conversion none

Fundamental Investors / Prospectus

<PAGE>

FUND EXPENSES

In periods of market volatility, assets of the fund may decline significantly,
causing total annual fund operating expenses (as a percentage of the value of
your investment) to become higher than the numbers shown in the Annual Fund
Operating Expenses table in this prospectus.

The "Other expenses" items in the table on page 1 include custodial, legal,
transfer agent and subtransfer agent/recordkeeping payments and various other
expenses. Subtransfer agent/recordkeeping payments may be made to third parties
(including affiliates of the fund's investment adviser) that provide subtransfer
agent, recordkeeping and/or shareholder services with respect to certain
shareholder accounts in lieu of the transfer agent providing such services. The
amount paid for subtransfer agent/recordkeeping services varies depending on the
share class and services provided and typically ranges from $3 to $19 per
account. For Class 529 shares, an expense of up to a maximum of .10% (paid to a
state or states for oversight and administrative services) is included as an
"Other expenses" item.

Fundamental Investors / Prospectus
<PAGE>

Purchase, exchange and sale of shares

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.

When purchasing shares, you should designate the fund or funds in which you wish
to invest. If no fund is designated and the amount of your cash investment is
more than $5,000, your money will be held uninvested (without liability to the
transfer agent for loss of income or appreciation pending receipt of proper
instructions) until investment instructions are received, but for no more than
three business days. Your investment will be made at the net asset value (plus
any applicable sales charge in the case of Class A shares) next determined after
investment instructions are received and accepted by the transfer agent. If
investment instructions are not received, your money will be invested in Class A
shares of American Funds Money Market Fund/SM/ on the third business day after
receipt of your investment.

If no fund is designated and the amount of your cash investment is $5,000 or
less, your money will be invested in the same proportion and in the same fund or
funds in which your last cash investment (excluding exchanges) was made,
provided that such investment was made within the last 16 months. If no
investment was made within the last 16 months, your money will be held
uninvested (without liability to the transfer agent for loss of income or
appreciation pending receipt of proper instructions) until investment
instructions are received, but for no more than three business days. Your
investment will be made at the net asset value (plus any applicable sales charge
in the case of Class A shares) next determined after investment instructions are
received and accepted by the transfer agent. If investment instructions are not
received, your money will be invested in Class A shares of American Funds Money
Market Fund on the third business day after receipt of your investment.

PURCHASE OF CLASS A AND C SHARES

You may generally open an account and purchase Class A and C shares by
contacting any financial adviser (who may impose transaction charges in addition
to those described in this prospectus) authorized to sell the fund's shares. You
may purchase additional shares in various ways, including through your financial
adviser and by mail, telephone, the Internet and bank wire.

Fundamental Investors / Prospectus

<PAGE>

PURCHASE OF CLASS F SHARES

You may generally open an account and purchase Class F shares only through
fee-based programs of investment dealers that have special agreements with the
fund's distributor and through certain registered investment advisers. These
dealers and advisers typically charge ongoing fees for services they provide.
Intermediary fees are not paid by the fund and normally range from .75% to 1.50%
of assets annually, depending on the services offered.

PURCHASE OF CLASS 529 SHARES

Class 529 shares may be purchased only through an account established with a 529
college savings plan managed by the American Funds organization. You may open
this type of account and purchase Class 529 shares by contacting any financial
adviser (who may impose transaction charges in addition to those described in
this prospectus) authorized to sell such an account. You may purchase additional
shares in various ways, including through your financial adviser and by mail,
telephone, the Internet and bank wire.

Class 529-E shares may be purchased only by employees participating through an
eligible employer plan.

Accounts holding Class 529 shares are subject to a $10 account setup fee and an
annual $10 account maintenance fee.

EXCHANGE

Generally, you may exchange your shares into shares of the same class of other
American Funds without a sales charge. Class A, C or F-1 shares may generally be
exchanged into the corresponding 529 share class without a sales charge. Class B
shares may not be exchanged into Class 529-B shares. EXCHANGES FROM CLASS A, C
OR F-1 SHARES TO THE CORRESPONDING 529 SHARE CLASS, PARTICULARLY IN THE CASE OF
UNIFORM GIFTS TO MINORS ACT OR UNIFORM TRANSFERS TO MINORS ACT CUSTODIAL
ACCOUNTS, MAY RESULT IN SIGNIFICANT LEGAL AND TAX CONSEQUENCES, AS DESCRIBED IN
THE APPLICABLE PROGRAM DESCRIPTION. PLEASE CONSULT YOUR FINANCIAL ADVISER BEFORE
MAKING SUCH AN EXCHANGE.

Exchanges of shares from American Funds Money Market Fund initially purchased
without a sales charge generally will be subject to the appropriate sales
charge. For purposes of computing the contingent deferred sales charge on Class
B and C shares, the length of time you have owned your shares will be measured
from the date of original purchase and will not be affected by any permitted
exchange.

Exchanges have the same tax consequences as ordinary sales and purchases. For
example, to the extent you exchange shares held in a taxable account that are
worth more now than what you paid for them, the gain will be subject to
taxation. See "Transactions by telephone, fax or the Internet" in this
prospectus for information regarding electronic exchanges.

Fundamental Investors / Prospectus
<PAGE>

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.

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 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/(R)/; retirement plan contributions, loans
and distributions (including hardship withdrawals) identified as such on the
retirement plan recordkeeper's system; 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; and systematic redemptions
and purchases, where the entity maintaining the shareholder account is able to
identify the transaction as a systematic redemption or purchase. Generally,
purchases and redemptions will not be considered "systematic" unless the
transaction is pre-scheduled for a specific date.

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 deter-

Fundamental Investors / Prospectus

<PAGE>

mines 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.

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 RIGHT OF THE FUND AND
AMERICAN FUNDS DISTRIBUTORS 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.

PURCHASE MINIMUMS AND MAXIMUMS

The purchase minimums described on the table on page 6 may be waived in certain
cases. See the statement of additional information for details.

For accounts established with an automatic investment plan, the initial purchase
minimum of $250 may be waived if the purchases (including purchases through
exchanges from another fund) made under the plan are sufficient to reach $250
within five months of account establishment.

The effective purchase maximums for Class 529-A, 529-C, 529-E and 529-F-1 shares
will reflect the maximum applicable contribution limits under state law. See the
applicable program description for more information.

The purchase maximum for Class C shares is $500,000 per transaction. In
addition, if you have significant American Funds holdings, you may not be
eligible to invest in Class C or 529-C shares. Specifically, you may not
purchase Class C or 529-C shares if you are eligible to purchase Class A or
529-A shares at the $1 million or more sales charge discount rate (that is, at
net asset value). See "Sales charge reductions and waivers" in this

Fundamental Investors / Prospectus
<PAGE>

prospectus and the statement of additional information for more information
regarding sales charge discounts.

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 values 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 your request, provided
that your request contains all information and legal documentation necessary to
process the transaction. A contingent deferred sales charge may apply at the
time you sell certain Class A, B and C shares.

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.

Fundamental Investors / Prospectus

<PAGE>

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.

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. Similarly, any contingent
deferred sales charge paid by you on investments in Class A shares may be higher
or lower than the 1% charge described below due to rounding.

EXCEPT AS PROVIDED BELOW, INVESTMENTS IN CLASS A SHARES OF $1 MILLION OR MORE
MAY BE SUBJECT TO A 1% CONTINGENT DEFERRED SALES CHARGE IF THE SHARES ARE SOLD
WITHIN ONE YEAR OF PURCHASE. The contingent deferred sales charge is based on
the original purchase cost or the current market value of the shares being sold,
whichever is less.

CLASS A SHARE 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:

Fundamental Investors / Prospectus
<PAGE>

.. investments in Class A shares made by endowments or foundations with $50
million or more in assets;

.. 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).

Transfers from certain 529 plans to plans managed by the American Funds
organization will be made with no sales charge. No commission will be paid to
the dealer on such a transfer. Please see the statement of additional
information for more information.

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,
Inc. Please see the statement of additional information for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS

Many employer-sponsored retirement plans are eligible to purchase Class R
shares. Such eligible plans and Class R shares are described in more detail in
the fund's retirement plan prospectus.

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 that 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 and waivers" 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 before April 1, 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 or C shares unless it was invested in
Class A or C shares prior to January 1, 2009.

Fundamental Investors / Prospectus

<PAGE>

CLASS B AND C SHARES

For Class B shares, a contingent deferred sales charge may be applied to shares
you sell within six years of purchase, as shown in the table below. The
contingent deferred sales charge is eliminated six years after purchase.

CONTINGENT DEFERRED SALES CHARGE ON CLASS B SHARES

YEAR OF REDEMPTION: 1 2 3 4 5 6 7+
- ----------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGE: 5% 4% 4% 3% 2% 1% 0%

Class C shares are sold without any initial sales charge. American Funds
Distributors pays 1% of the amount invested to dealers who sell Class C shares.
A contingent deferred sales charge of 1% applies if Class C shares are sold
within one year of purchase. The contingent deferred sales charge is eliminated
one year after purchase.

Any contingent deferred sales charge paid by you on redemptions of Class B or C
shares, expressed as a percentage of the applicable redemption amount, may be
higher or lower than the percentages described above due to rounding.

Shares acquired through reinvestment of dividends or capital gain distributions
are not subject to a contingent deferred sales charge. In addition, the
contingent deferred sales charge may be waived in certain circumstances. See
"Contingent deferred sales charge waivers" in this prospectus. The contingent
deferred sales charge is based on the original purchase cost or the current
market value of the shares being sold, whichever is less. For purposes of
determining the contingent deferred sales charge, if you sell only some of your
shares, shares that are not subject to any contingent deferred sales charge will
be sold first, followed by shares that you have owned the longest.

See "Plans of distribution" in this prospectus for ongoing compensation paid to
your dealer or financial adviser for all share classes.

AUTOMATIC CONVERSION OF CLASS B AND C SHARES

Class B shares automatically convert to Class A shares in the month of the
eight-year anniversary of the purchase date. Class C shares automatically
convert to Class F-1 shares in the month of the 10-year anniversary of the
purchase date; however, Class 529-C shares will not convert to Class 529-F-1
shares. The Internal Revenue Service currently takes the position that these
automatic conversions are not taxable. Should its position change, the automatic
conversion feature may be suspended. If this happens, you would have the option
of converting your Class B, 529-B or C shares to the respective share classes at
the anniversary dates described above. This exchange would be based on the
relative net asset values of the two classes in question, without the imposition
of a sales charge or fee, but you might face certain tax consequences as a
result.

Fundamental Investors / Prospectus
<PAGE>

CLASS 529-E AND CLASS F SHARES

Class 529-E and Class F shares are sold without any initial or contingent
deferred sales charge.

Sales charge reductions and waivers

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 AND
WAIVERS THROUGH A LINK ON THE HOME 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, you and your
"immediate family" (your spouse -- or equivalent if recognized under local law
- -- and your children under the age of 21) may combine all of your American Funds
investments to reduce your 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 Fund are excluded. Following are
different ways that you may qualify for a reduced Class A sales charge:

AGGREGATING ACCOUNTS

To receive a reduced Class A sales charge, investments made by you and your
immediate family (see above) may be aggregated if made for your own account(s)
and/or certain other accounts, such as:

. trust accounts established by the above individuals (please see the statement
of additional information for details regarding aggregation of trust accounts
where the person(s) who established the trust is/are deceased);

. solely controlled business accounts; and

. single-participant retirement plans.

Fundamental Investors / Prospectus

<PAGE>

CONCURRENT PURCHASES

You may combine simultaneous purchases (including, upon your request, purchases
for gifts) of any class of shares of two or more American Funds (excluding
American Funds Money Market Fund) 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 Fund) to determine the
initial sales charge you pay on each purchase of Class A shares. Subject to
your investment dealer's capabilities, your accumulated holdings will be
calculated as the higher of (a) the current value of your existing holdings (as
of the day prior to your additional American Funds investment) 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.

If you make a gift of 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 accounts.

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

RIGHT OF REINVESTMENT

Fundamental Investors / Prospectus
<PAGE>

closed, you may reinvest without a sales charge if the new receiving account has
the same registration as the closed account.

Proceeds from a Class B share redemption for which a contingent deferred sales
charge was paid will be reinvested in Class A shares without any initial sales
charge. If you redeem Class B shares without paying a contingent deferred sales
charge, you may reinvest the proceeds in Class B shares or purchase Class A
shares; if you purchase Class A shares, you are responsible for paying any
applicable Class A sales charges. Proceeds from any other type of redemption and
all dividend payments and capital gain distributions will be reinvested in the
same share class from which the original redemption or distribution was made.
Any contingent deferred sales charge on Class A or C shares will be credited to
your account. Redemption proceeds of Class A shares representing direct
purchases in American Funds Money Market Fund that are reinvested in other
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 by American Funds Service Company, provided that your
request contains all information and legal documentation necessary to process
the transaction. 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. 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.

CONTINGENT DEFERRED SALES CHARGE WAIVERS

The contingent deferred sales charge on Class A, B and C shares may be waived in
the following cases:

.. permitted exchanges of shares, except if shares acquired by exchange are then
redeemed within the period during which a contingent deferred sales charge
would apply to the initial shares purchased;

.. tax-free returns of excess contributions to IRAs;

.. redemptions due to death or postpurchase disability of the shareholder (this
generally excludes accounts registered in the names of trusts and other
entities);

.. for 529 share classes only, redemptions due to a beneficiary's death,
postpurchase disability or receipt of a scholarship (to the extent of the
scholarship award);

.. redemptions due to the complete termination of a trust upon the death of the
trustor/ grantor or beneficiary, but only if such termination is specifically
provided for in the trust document; and

Fundamental Investors / Prospectus

<PAGE>

.. the following types of transactions, if together they do not exceed 12% of the
value of an account annually (see the statement of additional information for
more information about waivers regarding these types of transactions):

-- redemptions due to receiving required minimum distributions from retirement
accounts upon reaching 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); and

-- if you have established an automatic withdrawal plan, redemptions through
such a plan (including any dividends and/or capital gain distributions taken
in cash).

To have your Class A, B or C contingent deferred sales charge waived, you must
inform your adviser or American Funds Service Company at the time you redeem
shares that you qualify for such a waiver.

Fundamental Investors / Prospectus
<PAGE>

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, C or F shares through
an IRA rollover, subject to the other provisions of this prospectus. 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 that 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
..50% for Class 529-A shares; up to 1.00% for Class B and 529-B shares; up to
1.00% for Class C and 529-C shares; up to .75% for Class 529-E shares; and up to
..50% for Class F-1 and 529-F-1 shares. For all share classes indicated above, up
to .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. The higher fees for
Class B and C shares may cost you more over time than paying the initial sales
charge for Class A shares.

Fundamental Investors / Prospectus

<PAGE>

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 2009, 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 or investments.
You should consult with your financial adviser and review carefully any
disclosure by your financial adviser's firm as to compensation received.

How to sell shares

You may sell (redeem) shares in any of the following ways:

THROUGH YOUR DEALER OR FINANCIAL ADVISER (CERTAIN CHARGES MAY APPLY)

. Shares held for you in your dealer's name must be sold through the dealer.

. Class F shares must be sold through your dealer or financial adviser.

WRITING TO AMERICAN FUNDS SERVICE COMPANY

. Requests must be signed by the registered shareholder(s).

. A signature guarantee is required if the redemption is:

-- more than $75,000;

-- made payable to someone other than the registered shareholder(s); or

-- sent to an address other than the address of record or to an address of
record that has been changed within the last 10 days.

Fundamental Investors / Prospectus
<PAGE>

. American Funds Service Company reserves the right to require signature
guarantee(s) on any redemption.

. Additional documentation may be required for redemptions of shares held in
corporate, partnership or fiduciary accounts.

TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY OR USING THE INTERNET

. Redemptions by telephone, fax or the Internet (including American FundsLine
and americanfunds.com) are limited to $75,000 per American Funds shareholder
each day.

. Checks must be made payable to the registered shareholder.

. Checks must be mailed to an address of record that has been used with the
account for at least 10 days.

If you recently purchased shares and subsequently request a redemption of those
shares, you will receive proceeds from the redemption once a sufficient period
of time has passed to reasonably ensure that checks or drafts (including
certified or cashier's checks) for the shares purchased have cleared (normally
10 business days).

Fundamental Investors / Prospectus

<PAGE>

TRANSACTIONS BY TELEPHONE, FAX OR THE INTERNET

Generally, you are automatically eligible to redeem or exchange shares by
telephone, fax or the Internet, unless you notify us in writing that you do not
want any or all of these services. You may reinstate these services at any time.

Unless you decide not to have telephone, fax or Internet services on your
account(s), you agree to hold the fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, and each of their
respective directors, trustees, officers, employees and agents harmless from any
losses, expenses, costs or liabilities (including attorney fees) that may be
incurred in connection with the exercise of these privileges, provided that
American Funds Service Company employs reasonable procedures to confirm that the
instructions received from any person with appropriate account information are
genuine. If reasonable procedures are not employed, American Funds Service
Company and/or the fund may be liable for losses due to unauthorized or
fraudulent instructions.

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

The fund intends to distribute dividends to you, usually in March, June,
September and December.

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

You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or other American Funds, or you may
elect to receive them in cash. Most shareholders do not elect to take capital
gain distributions in cash because these distributions reduce principal value.
Dividends and capital gain distributions for 529 share classes will be
automatically reinvested.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

Dividends and capital gain distributions you receive from the fund are subject
to federal income taxes and may also be subject to state and local taxes, unless
you or your account is tax-exempt or tax-deferred.

For federal tax purposes, dividends and distributions of short-term capital
gains are taxable as ordinary income. Some or all of your dividends may be
eligible for a reduced tax rate if you meet a holding period requirement. The
fund's distributions of net long-term capital gains are taxable as long-term
capital gains. Any dividends or capital gain distributions you receive from the
fund will normally be taxable to you when made, regardless of whether you
reinvest dividends or capital gain distributions or receive them in cash.

Fundamental Investors / Prospectus
<PAGE>

TAXES ON TRANSACTIONS

Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment is the
difference between the cost of your shares, including any sales charges, and the
amount you receive when you sell them.

SHAREHOLDER FEES

Fees borne directly by the fund normally have the effect of reducing a
shareholder's taxable income on distributions. By contrast, fees paid directly
to advisers by a fund shareholder for ongoing advice are deductible for income
tax purposes only to the extent that they (combined with certain other
qualifying expenses) exceed 2% of such shareholder's adjusted gross income.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION. HOLDERS OF CLASS 529 SHARES
SHOULD REFER TO THE APPLICABLE PROGRAM DESCRIPTION FOR MORE INFORMATION
REGARDING THE TAX CONSEQUENCES OF SELLING CLASS 529 SHARES.

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. 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 fund's
statement of additional information and 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.

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

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

CLASS A:
Year ended 12/31/2009 $24.98 $ .44 $ 7.79 $ 8.23 $ (.48) $ --
Year ended 12/31/2008 42.45 .60 (17.23) (16.63) (.58) (.26)
Year ended 12/31/2007 40.05 1.03 4.39 5.42 (.95) (2.07)
Year ended 12/31/2006 35.40 .62 6.16 6.78 (.56) (1.57)
Year ended 12/31/2005 32.25 .58 3.16 3.74 (.59) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B:
Year ended 12/31/2009 24.92 .23 7.76 7.99 (.27) --
Year ended 12/31/2008 42.35 .34 (17.20) (16.86) (.31) (.26)
Year ended 12/31/2007 39.96 .70 4.38 5.08 (.62) (2.07)
Year ended 12/31/2006 35.33 .32 6.14 6.46 (.26) (1.57)
Year ended 12/31/2005 32.19 .33 3.15 3.48 (.34) --
- ---------------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
CLASS C:
Year ended 12/31/2009 $24.90 $ .22 $ 7.75 $ 7.97 $ (.26) $ --
Year ended 12/31/2008 42.31 .32 (17.17) (16.85) (.30) (.26)
Year ended 12/31/2007 39.92 .70 4.36 5.06 (.60) (2.07)
Year ended 12/31/2006 35.30 .30 6.13 6.43 (.24) (1.57)
Year ended 12/31/2005 32.17 .30 3.15 3.45 (.32) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS F-1:
Year ended 12/31/2009 24.97 .45 7.79 8.24 (.49) --
Year ended 12/31/2008 42.43 .60 (17.22) (16.62) (.58) (.26)
Year ended 12/31/2007 40.03 1.06 4.36 5.42 (.95) (2.07)
Year ended 12/31/2006 35.39 .62 6.15 6.77 (.56) (1.57)
Year ended 12/31/2005 32.24 .57 3.16 3.73 (.58) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS F-2:
Year ended 12/31/2009 24.98 .49 7.81 8.30 (.55) --
Period from 8/1/2008 to 12/31/2008/5/ 37.09 .23 (11.97) (11.74) (.37) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 12/31/2009 24.97 .43 7.78 8.21 (.47) --
Year ended 12/31/2008 42.42 .58 (17.21) (16.63) (.56) (.26)
Year ended 12/31/2007 40.02 1.03 4.36 5.39 (.92) (2.07)
Year ended 12/31/2006 35.38 .60 6.15 6.75 (.54) (1.57)
Year ended 12/31/2005 32.24 .55 3.15 3.70 (.56) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 12/31/2009 24.96 .20 7.77 7.97 (.24) --
Year ended 12/31/2008 42.41 .30 (17.22) (16.92) (.27) (.26)
Year ended 12/31/2007 40.01 .66 4.38 5.04 (.57) (2.07)
Year ended 12/31/2006 35.37 .27 6.16 6.43 (.22) (1.57)
Year ended 12/31/2005 32.23 .27 3.16 3.43 (.29) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS 529-C:
Year ended 12/31/2009 $24.95 $ .20 $ 7.78 $ 7.98 $ (.24) $ --
Year ended 12/31/2008 42.40 .30 (17.22) (16.92) (.27) (.26)
Year ended 12/31/2007 40.00 .67 4.37 5.04 (.57) (2.07)
Year ended 12/31/2006 35.37 .28 6.14 6.42 (.22) (1.57)
Year ended 12/31/2005 32.23 .27 3.16 3.43 (.29) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 12/31/2009 24.95 .34 7.78 8.12 (.38) --
Year ended 12/31/2008 42.40 .48 (17.21) (16.73) (.46) (.26)
Year ended 12/31/2007 40.00 .88 4.38 5.26 (.79) (2.07)
Year ended 12/31/2006 35.36 .48 6.15 6.63 (.42) (1.57)
Year ended 12/31/2005 32.23 .44 3.15 3.59 (.46) --
- ---------------------------------------------------------------------------------------------------------------------------
CLASS 529-F-1:
Year ended 12/31/2009 24.95 .48 7.78 8.26 (.52) --
Year ended 12/31/2008 42.39 .64 (17.19) (16.55) (.63) (.26)
Year ended 12/31/2007 40.00 1.13 4.33 5.46 (1.00) (2.07)
Year ended 12/31/2006 35.36 .67 6.15 6.82 (.61) (1.57)
Year ended 12/31/2005 32.22 .59 3.15 3.74 (.60) --
- ---------------------------------------------------------------------------------------------------------------------------

Ratio of Ratio of
expenses expenses
to average to average
net assets net assets
Total Net asset Net assets, before after
dividends value, end of reim- reim-
and end of Total period bursements/ bursements/
distributions period return/3,4/ (in millions) waivers waivers/4/
- -----------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2009 $ (.48) $32.73 33.36% $30,954 .69% .69%
Year ended 12/31/2008 (.84) 24.98 (39.70) 24,443 .63 .61
Year ended 12/31/2007 (3.02) 42.45 13.55 38,877 .60 .57
Year ended 12/31/2006 (2.13) 40.05 19.24 32,187 .61 .58
Year ended 12/31/2005 (.59) 35.40 11.68 24,390 .62 .60
- -----------------------------------------------------------------------------------------------------------------------
CLASS B:
Year ended 12/31/2009 (.27) 32.64 32.30 897 1.46 1.46
Year ended 12/31/2008 (.57) 24.92 (40.14) 924 1.39 1.37
Year ended 12/31/2007 (2.69) 42.35 12.70 1,667 1.36 1.33
Year ended 12/31/2006 (1.83) 39.96 18.33 1,417 1.38 1.35
Year ended 12/31/2005 (.34) 35.33 10.84 1,090 1.39 1.36
- -----------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
CLASS C:
Year ended 12/31/2009 $ (.26) $32.61 32.26% $ 1,925 1.48% 1.48%
Year ended 12/31/2008 (.56) 24.90 (40.16) 1,468 1.43 1.41
Year ended 12/31/2007 (2.67) 42.31 12.65 2,053 1.41 1.38
Year ended 12/31/2006 (1.81) 39.92 18.23 1,380 1.43 1.41
Year ended 12/31/2005 (.32) 35.30 10.76 776 1.45 1.43
- -----------------------------------------------------------------------------------------------------------------------
CLASS F-1:
Year ended 12/31/2009 (.49) 32.72 33.40 3,868 .67 .67
Year ended 12/31/2008 (.84) 24.97 (39.69) 2,932 .62 .60
Year ended 12/31/2007 (3.02) 42.43 13.55 3,235 .61 .58
Year ended 12/31/2006 (2.13) 40.03 19.21 1,815 .61 .58
Year ended 12/31/2005 (.58) 35.39 11.64 662 .66 .63
- -----------------------------------------------------------------------------------------------------------------------
CLASS F-2:
Year ended 12/31/2009 (.55) 32.73 33.72 641 .43 .43
Period from 8/1/2008 to 12/31/2008/5/ (.37) 24.98 (31.78) 92 .17 .16
- -----------------------------------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 12/31/2009 (.47) 32.71 33.30 723 .73 .73
Year ended 12/31/2008 (.82) 24.97 (39.71) 485 .68 .65
Year ended 12/31/2007 (2.99) 42.42 13.49 643 .66 .64
Year ended 12/31/2006 (2.11) 40.02 19.16 414 .66 .63
Year ended 12/31/2005 (.56) 35.38 11.60 231 .70 .67
- -----------------------------------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 12/31/2009 (.24) 32.69 32.16 71 1.55 1.55
Year ended 12/31/2008 (.53) 24.96 (40.20) 54 1.50 1.47
Year ended 12/31/2007 (2.64) 42.41 12.57 80 1.48 1.46
Year ended 12/31/2006 (1.79) 40.01 18.18 60 1.50 1.47
Year ended 12/31/2005 (.29) 35.37 10.66 40 1.54 1.52
- -----------------------------------------------------------------------------------------------------------------------
CLASS 529-C:
Year ended 12/31/2009 $ (.24) $32.69 32.22% $ 215 1.55% 1.55%
Year ended 12/31/2008 (.53) 24.95 (40.21) 147 1.49 1.47
Year ended 12/31/2007 (2.64) 42.40 12.58 195 1.48 1.45
Year ended 12/31/2006 (1.79) 40.00 18.16 126 1.49 1.47
Year ended 12/31/2005 (.29) 35.37 10.68 71 1.53 1.51
- -----------------------------------------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 12/31/2009 (.38) 32.69 32.89 32 1.04 1.04
Year ended 12/31/2008 (.72) 24.95 (39.90) 21 .98 .96
Year ended 12/31/2007 (2.86) 42.40 13.14 29 .97 .95
Year ended 12/31/2006 (1.99) 40.00 18.80 20 .97 .95
Year ended 12/31/2005 (.46) 35.36 11.24 12 1.02 .99
- -----------------------------------------------------------------------------------------------------------------------
CLASS 529-F-1:
Year ended 12/31/2009 (.52) 32.69 33.56 27 .54 .54
Year ended 12/31/2008 (.89) 24.95 (39.59) 20 .48 .46
Year ended 12/31/2007 (3.07) 42.39 13.69 20 .47 .45
Year ended 12/31/2006 (2.18) 40.00 19.40 11 .47 .45
Year ended 12/31/2005 (.60) 35.36 11.68 5 .58 .56
- -----------------------------------------------------------------------------------------------------------------------

Ratio
of net
income to
average
net
assets/2,4/
- ----------------------------------------------------

CLASS A:
Year ended 12/31/2009 1.60%
Year ended 12/31/2008 1.70
Year ended 12/31/2007 2.40
Year ended 12/31/2006 1.60
Year ended 12/31/2005 1.75
- ----------------------------------------------------
CLASS B:
Year ended 12/31/2009 .85
Year ended 12/31/2008 .94
Year ended 12/31/2007 1.63
Year ended 12/31/2006 .83
Year ended 12/31/2005 .99
- ----------------------------------------------------
(The Financial Highlights table continues on the following page.)
CLASS C:
Year ended 12/31/2009 .81%
Year ended 12/31/2008 .90
Year ended 12/31/2007 1.62
Year ended 12/31/2006 .77
Year ended 12/31/2005 .91
- ----------------------------------------------------
CLASS F-1:
Year ended 12/31/2009 1.61
Year ended 12/31/2008 1.72
Year ended 12/31/2007 2.45
Year ended 12/31/2006 1.58
Year ended 12/31/2005 1.71
- ----------------------------------------------------
CLASS F-2:
Year ended 12/31/2009 1.69
Period from 8/1/2008 to 12/31/2008/5/ .88
- ----------------------------------------------------
CLASS 529-A:
Year ended 12/31/2009 1.55
Year ended 12/31/2008 1.66
Year ended 12/31/2007 2.37
Year ended 12/31/2006 1.55
Year ended 12/31/2005 1.66
- ----------------------------------------------------
CLASS 529-B:
Year ended 12/31/2009 .74
Year ended 12/31/2008 .84
Year ended 12/31/2007 1.53
Year ended 12/31/2006 .71
Year ended 12/31/2005 .82
- ----------------------------------------------------
CLASS 529-C:
Year ended 12/31/2009 .74%
Year ended 12/31/2008 .85
Year ended 12/31/2007 1.56
Year ended 12/31/2006 .71
Year ended 12/31/2005 .83
- ----------------------------------------------------
CLASS 529-E:
Year ended 12/31/2009 1.24
Year ended 12/31/2008 1.36
Year ended 12/31/2007 2.05
Year ended 12/31/2006 1.23
Year ended 12/31/2005 1.34
- ----------------------------------------------------
CLASS 529-F-1:
Year ended 12/31/2009 1.74
Year ended 12/31/2008 1.84
Year ended 12/31/2007 2.62
Year ended 12/31/2006 1.73
Year ended 12/31/2005 1.76
- ----------------------------------------------------

Fundamental Investors / Prospectus

<PAGE>

[This page intentionally left blank for this filing]

Fundamental Investors / Prospectus

<PAGE>

YEAR ENDED DECEMBER 31
2009 2008 2007 2006 2005
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 30% 29% 27% 21% 24%
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 0.90%, respectively. The impact to the other share classes
would have been similar.
3 Total returns exclude any applicable sales charges, including contingent
deferred sales charges.

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 529 PLANS American Funds Service Company
800 /421-0180, ext. 529

American FundsLine
FOR 24-HOUR INFORMATION 800/325-3590
americanfunds.com

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

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).

PROGRAM DESCRIPTION The CollegeAmerica/(R)/ 529 program description contains
additional information about the policies and services related to 529 plan
accounts.

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 U.S. 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, D.C. (202/551-8090), 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, D.C. 20549-1520. The codes of ethics, current SAI and
shareholder reports are also available, free of charge, on our website,
americanfunds.com.

E-DELIVERY AND HOUSEHOLD MAILINGS Each year you are automatically sent an
updated summary 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, annual/semi-annual
report to shareholders or applicable program description, 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
MFGEPR-910-0310P Litho in USA CGD/RRD/8008
- -------------------------------------------------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust

<PAGE>

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

Fundamental Investors/SM/

CLASS TICKER R-3......... RFNCX
A........... ANCFX R-4......... RFNEX
R-1......... RFNAX R-5......... RFNFX
R-2......... RFNBX R-6......... RFNGX

RETIREMENT PLAN
PROSPECTUS

March 1, 2010

TABLE OF CONTENTS

1 Investment objective
1 Fees and expenses of the fund
3 Principal investment strategies
3 Principal risks
4 Investment results
6 Management
6 Purchase and sale of fund shares
7 Tax information
7 Payments to broker-dealers and other financial
intermediaries
8 Investment objective, strategies and risks
9 Additional investment results
11 Management and organization
15 Purchase, exchange and sale of shares
19 Sales charges
21 Sales charge reductions
23 Rollovers from retirement plans to IRAs
24 Plans of distribution
25 Other compensation to dealers
26 Distributions and taxes
27 Financial highlights

<PAGE>

[This page intentionally left blank for this filing]

<PAGE>

Investment objective

The fund's investment objective is to achieve long-term growth of capital and
income.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for a Class A sales charge discount if you
and your family invest, or agree to invest in the future, at least $25,000 in
American Funds. More information about these and other discounts is available
from your financial professional and in the "Sales charge reductions" section on
page 21 of the retirement plan prospectus and in the "Sales charge reductions
and waivers" section on page 55 of the fund's statement of additional
information.

SHAREHOLDER FEES
(fees paid directly from your investment)
- ------------------------------------------------------------------------------
CLASS A ALL R SHARE CLASSES
------------------------------

Maximum sales charge (load) imposed on 5.75% none
purchases (as a percentage of offering price)
- ------------------------------------------------------------------------------
Maximum deferred sales charge (load) none none
(as a percentage of the amount redeemed)
- ------------------------------------------------------------------------------
Maximum sales charge (load) imposed none none
on reinvested dividends
- ------------------------------------------------------------------------------
Redemption or exchange fees none none

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment)
- ----------------------------------------------SHARE CLASSES--------------------

--A-----R-1----R-2----R-3----R-4----R-5------R-6---

---------------------------------------------------

Management fees 0.26% 0.26% 0.26% 0.26% 0.26% 0.26% 0.26%
- -------------------------------------------------------------------------------
Distribution and/or 0.23 0.99 0.75 0.50 0.25 none none
service (12b-1) fees
- -------------------------------------------------------------------------------
Other expenses 0.20 0.22 0.51 0.23 0.18 0.13 0.09/*/
- -------------------------------------------------------------------------------
Total annual fund 0.69 1.47 1.52 0.99 0.69 0.39 0.35
operating expenses
- -------------------------------------------------------------------------------

Fundamental Investors / Retirement plan prospectus
<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------

A $641 $783 $937 $1,384
- --------------------------------------------------------------------
R-1 150 465 803 1,757
- --------------------------------------------------------------------
R-2 155 480 829 1,813
- --------------------------------------------------------------------
R-3 101 315 547 1,213
- --------------------------------------------------------------------
R-4 70 221 384 859
- --------------------------------------------------------------------
R-5 40 125 219 493
- --------------------------------------------------------------------
R-6 36 113 197 443
- --------------------------------------------------------------------

* Estimated by annualizing actual fees and expenses of the share class for a
partial year.

PORTFOLIO TURNOVER

Fundamental Investors / Retirement plan prospectus

<PAGE>

Principal investment strategies

Principal risks

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.

Investors in the fund should have a long-term perspective and, for example, be
able to tolerate potentially sharp declines in value.

Fundamental Investors / Retirement plan prospectus
<PAGE>

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent. These investments
may also be affected by currency fluctuations and controls; different
accounting, auditing, financial reporting, disclosure, and regulatory and legal
standards and practices; expropriation; changes in tax policy; greater market
volatility; different 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.

You should consider how this fund fits into your overall investment program.

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
governmental agency, entity or person.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 5 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. Past results are not predictive of future results. Updated
information on the fund's results can be obtained by visiting americanfunds.com.

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]

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
2009 33.36

[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 17.14% (quarter ended June 30, 2009)
LOWEST -23.34% (quarter ended December 31, 2008)

Fundamental Investors / Retirement plan prospectus

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2009 (WITH MAXIMUM SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- ----------------------------------------------------------------------------

A 8/1/1978 25.71% 2.77% 2.99% 12.26%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- ------------------------------------------------------------------

R-1 6/19/2002 32.30% 3.13% 5.39%
- ------------------------------------------------------------------
R-2 5/21/2002 32.22 3.12 4.63
- ------------------------------------------------------------------
R-3 6/4/2002 32.93 3.62 5.50
- ------------------------------------------------------------------
R-4 7/25/2002 33.31 3.94 8.91
- ------------------------------------------------------------------
R-5 5/15/2002 33.75 4.25 5.64

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

Fundamental Investors / Retirement plan prospectus
<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:

Purchase and sale of fund shares

Eligible retirement plans generally may open an account and purchase Class A or
R shares by contacting any investment dealer authorized to sell these classes of
the fund's shares. Investment dealers may impose transaction charges in addition
to those described in this prospectus.

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

Fundamental Investors / Retirement plan prospectus

<PAGE>

Tax information

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

Payments to broker-dealers and other financial intermediaries

Fundamental Investors / Retirement plan prospectus
<PAGE>

Investment objective, strategies and risks

Investors in the fund should have a long-term perspective and, for example, be
able to tolerate potentially sharp declines in value.

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent. These investments
may also be affected by currency fluctuations and controls; different
accounting, auditing, financial reporting, disclosure, and regulatory and legal
standards and practices; expropriation; changes in tax policy; greater market
volatility; different 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.

You should consider how this fund fits into your overall investment program.

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

Fundamental Investors / Retirement plan prospectus

<PAGE>

Additional investment results

Unlike the table on page 5, the table below reflects the fund's results
calculated without a sales charge.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2009 (WITHOUT SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- ----------------------------------------------------------------------------

A 8/1/1978 33.36% 3.99% 3.61% 12.48%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- ------------------------------------------------------------------

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

S&P 500 (reflects no deductions
for fees, expenses or taxes) 26.47% 0.42% -0.95% 11.21%
Lipper Growth & Income Funds
Index (reflects no 29.10 0.75 1.20 10.60
deductions for fees or taxes)
MSCI World Index (reflects no
deductions for fees, 30.79 2.57 0.23 10.39
expenses or taxes)
Class A distribution rate at December 31, 2009: 1.47%/3/
(For current distribution rate information, please call American FundsLine
at 800/325-3590.)

1 Standard & Poor's 500 Composite Index (S&P 500) reflects certain market
sectors in which the fund may invest. Lipper Growth & Income Funds Index
includes the fund and other mutual funds that disclose investment objectives
that are reasonably comparable to the fund's investment objective. MSCI World
Index also reflects certain market sectors in which the fund may invest.
2 Lifetime results for the index(es) shown are measured from August 1, 1978,
when Capital Research and Management Company became the fund's investment
adviser.
3 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.

The investment results tables above and on page 5 show how the fund's average
annual total returns compare with various broad measures of market performance.
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. 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. 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 more than 20 developed

Fundamental Investors / Retirement plan prospectus
<PAGE>

market 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.

Fundamental Investors / Retirement plan prospectus

<PAGE>

Management and organization

INVESTMENT ADVISER

Fundamental Investors / Retirement plan 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.

Fundamental Investors / Retirement plan prospectus

<PAGE>

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

ROLE IN
INVESTMENT EXPERIENCE MANAGEMENT
PORTFOLIO COUNSELOR EXPERIENCE IN THIS FUND OF THE FUND
- -----------------------------------------------------------------------------------------

Fundamental Investors / Retirement plan prospectus
<PAGE>

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage is 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 / Retirement plan 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 these
classes of 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/(R)/ or Recordkeeper Direct/(R)/ recordkeeping programs.

Class R shares are generally 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. Class R-5 and R-6 shares are generally available only
to fee-based programs or through retirement plan intermediaries. 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 Fund/SM/ purchased without a sales
charge generally will be subject to the appropriate sales charge.

FREQUENT TRADING OF FUND SHARES

Fundamental Investors / Retirement plan prospectus
<PAGE>

exchange activity that the fund or American Funds Distributors has determined
could involve actual or potential harm to the fund, may be rejected.

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 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; 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; and systematic redemptions
and purchases, where the entity maintaining the shareholder account is able to
identify the transaction as a systematic redemption or purchase. Generally,
purchases and redemptions will not be considered "systematic" unless the
transaction is pre-scheduled for a specific date.

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.

Fundamental Investors / Retirement plan prospectus

<PAGE>

mediary'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.

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

VALUING SHARES

Fundamental Investors / Retirement plan prospectus
<PAGE>

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

FUND EXPENSES

The "Other expenses" items in the table on page 1 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 these
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 program.
3 Payment with respect to PlanPremier program.

Fundamental Investors / Retirement plan prospectus

<PAGE>

Sales charges

CLASS A SHARES

CLASS A SHARE 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 / Retirement plan 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 that 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.

A 403(b) plan may not invest in Class A or C shares, unless it was invested in
Class A or C shares before January 1, 2009.

CLASS R SHARES

Class R shares are sold without any initial or contingent deferred sales charge.
The distributor will pay dealers annually 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).

Fundamental Investors / Retirement plan prospectus

<PAGE>

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 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 Fund
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 Fund) 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 Fund) 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 (as of the day prior to your additional American Funds
investment) 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.

Fundamental Investors / Retirement plan prospectus
<PAGE>

STATEMENT OF INTENTION

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 Fund that
are reinvested in other American Funds will be subject to a sales charge.

Fundamental Investors / Retirement plan prospectus

<PAGE>

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, 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 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.

Fundamental Investors / Retirement plan prospectus
<PAGE>

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 that 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 .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.

Fundamental Investors / Retirement plan prospectus

<PAGE>

Other compensation to dealers

Fundamental Investors / Retirement plan prospectus
<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

The fund intends to distribute dividends to shareholders, usually in March,
June, September and December.

Capital gains, if any, are usually distributed in December and March. 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 currently taxable.

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 / Retirement plan prospectus

<PAGE>

Financial highlights

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

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

CLASS A:
Year ended 12/31/2009 $24.98 $ .44 $ 7.79 $ 8.23 $ (.48) $ --
Year ended 12/31/2008 42.45 .60 (17.23) (16.63) (.58) (.26)
Year ended 12/31/2007 40.05 1.03 4.39 5.42 (.95) (2.07)
Year ended 12/31/2006 35.40 .62 6.16 6.78 (.56) (1.57)
Year ended 12/31/2005 32.25 .58 3.16 3.74 (.59) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2009 24.90 .22 7.76 7.98 (.26) --
Year ended 12/31/2008 42.31 .32 (17.18) (16.86) (.29) (.26)
Year ended 12/31/2007 39.93 .72 4.33 5.05 (.60) (2.07)
Year ended 12/31/2006 35.31 .29 6.13 6.42 (.23) (1.57)
Year ended 12/31/2005 32.18 .29 3.16 3.45 (.32) --
- ----------------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 12/31/2009 $24.89 $ .21 $ 7.76 $ 7.97 $ (.25) $ --
Year ended 12/31/2008 42.30 .30 (17.17) (16.87) (.28) (.26)
Year ended 12/31/2007 39.92 .70 4.34 5.04 (.59) (2.07)
Year ended 12/31/2006 35.29 .30 6.14 6.44 (.24) (1.57)
Year ended 12/31/2005 32.17 .30 3.14 3.44 (.32) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 12/31/2009 24.94 .36 7.77 8.13 (.40) --
Year ended 12/31/2008 42.38 .48 (17.20) (16.72) (.46) (.26)
Year ended 12/31/2007 39.98 .92 4.34 5.26 (.79) (2.07)
Year ended 12/31/2006 35.35 .47 6.14 6.61 (.41) (1.57)
Year ended 12/31/2005 32.21 .45 3.16 3.61 (.47) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 12/31/2009 24.95 .44 7.77 8.21 (.48) --
Year ended 12/31/2008 42.39 .58 (17.19) (16.61) (.57) (.26)
Year ended 12/31/2007 39.99 1.05 4.34 5.39 (.92) (2.07)
Year ended 12/31/2006 35.36 .59 6.14 6.73 (.53) (1.57)
Year ended 12/31/2005 32.22 .55 3.16 3.71 (.57) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 12/31/2009 24.99 .52 7.79 8.31 (.56) --
Year ended 12/31/2008 42.46 .69 (17.23) (16.54) (.67) (.26)
Year ended 12/31/2007 40.06 1.18 4.34 5.52 (1.05) (2.07)
Year ended 12/31/2006 35.41 .71 6.16 6.87 (.65) (1.57)
Year ended 12/31/2005 32.26 .65 3.17 3.82 (.67) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 12/31/2009/5/ 25.63 .37 7.17 7.54 (.43) --
- ----------------------------------------------------------------------------------------------------------------------------

Ratio of Ratio of
expenses expenses
to to
average average
Net net net
assets, assets assets
Total Net asset end of before after
dividends value, period reim- reim-
and end of Total (in bursements/ bursements/
distributions period return/3,4/ millions) waivers waivers/4/
- ----------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2009 $ (.48) $32.73 33.36% $30,954 .69 % .69 %
Year ended 12/31/2008 (.84) 24.98 (39.70) 24,443 .63 .61
Year ended 12/31/2007 (3.02) 42.45 13.55 38,877 .60 .57
Year ended 12/31/2006 (2.13) 40.05 19.24 32,187 .61 .58
Year ended 12/31/2005 (.59) 35.40 11.68 24,390 .62 .60
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2009 (.26) 32.62 32.30 98 1.47 1.47
Year ended 12/31/2008 (.55) 24.90 (40.16) 61 1.43 1.41
Year ended 12/31/2007 (2.67) 42.31 12.62 57 1.44 1.42
Year ended 12/31/2006 (1.80) 39.93 18.19 23 1.47 1.43
Year ended 12/31/2005 (.32) 35.31 10.74 11 1.50 1.46
- ----------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 12/31/2009 $ (.25) $32.61 32.22% $ 550 1.52 % 1.52 %
Year ended 12/31/2008 (.54) 24.89 (40.19) 366 1.49 1.47
Year ended 12/31/2007 (2.66) 42.30 12.61 471 1.46 1.40
Year ended 12/31/2006 (1.81) 39.92 18.26 291 1.54 1.41
Year ended 12/31/2005 (.32) 35.29 10.73 155 1.64 1.43
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 12/31/2009 (.40) 32.67 32.93 1,707 .99 .99
Year ended 12/31/2008 (.72) 24.94 (39.89) 1,058 .98 .95
Year ended 12/31/2007 (2.86) 42.38 13.17 1,157 .97 .94
Year ended 12/31/2006 (1.98) 39.98 18.75 525 .99 .96
Year ended 12/31/2005 (.47) 35.35 11.26 220 1.01 .98
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 12/31/2009 (.48) 32.68 33.31 1,545 .69 .69
Year ended 12/31/2008 (.83) 24.95 (39.70) 942 .67 .65
Year ended 12/31/2007 (2.99) 42.39 13.51 879 .66 .64
Year ended 12/31/2006 (2.10) 39.99 19.12 438 .67 .65
Year ended 12/31/2005 (.57) 35.36 11.61 205 .69 .66
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 12/31/2009 (.56) 32.74 33.75 1,269 .39 .39
Year ended 12/31/2008 (.93) 24.99 (39.53) 1,077 .37 .35
Year ended 12/31/2007 (3.12) 42.46 13.81 1,014 .37 .34
Year ended 12/31/2006 (2.22) 40.06 19.50 481 .38 .35
Year ended 12/31/2005 (.67) 35.41 11.94 265 .39 .36
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 12/31/2009/5/ (.43) 32.74 29.60 596 .35/6/ .35/6/
- ----------------------------------------------------------------------------------------------------------------------

Ratio
of net
income
to
average
net
assets/2,4/
- ---------------------------------------------------------

CLASS A:
Year ended 12/31/2009 1.60 %
Year ended 12/31/2008 1.70
Year ended 12/31/2007 2.40
Year ended 12/31/2006 1.60
Year ended 12/31/2005 1.75
- ---------------------------------------------------------
CLASS R-1:
Year ended 12/31/2009 .80
Year ended 12/31/2008 .91
Year ended 12/31/2007 1.67
Year ended 12/31/2006 .74
Year ended 12/31/2005 .88
- ---------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- ---------------------------------------------------------
CLASS R-2:
Year ended 12/31/2009 .77 %
Year ended 12/31/2008 .85
Year ended 12/31/2007 1.62
Year ended 12/31/2006 .77
Year ended 12/31/2005 .91
- ---------------------------------------------------------
CLASS R-3:
Year ended 12/31/2009 1.29
Year ended 12/31/2008 1.37
Year ended 12/31/2007 2.12
Year ended 12/31/2006 1.21
Year ended 12/31/2005 1.35
- ---------------------------------------------------------
CLASS R-4:
Year ended 12/31/2009 1.58
Year ended 12/31/2008 1.68
Year ended 12/31/2007 2.42
Year ended 12/31/2006 1.52
Year ended 12/31/2005 1.66
- ---------------------------------------------------------
CLASS R-5:
Year ended 12/31/2009 1.92
Year ended 12/31/2008 1.98
Year ended 12/31/2007 2.73
Year ended 12/31/2006 1.83
Year ended 12/31/2005 1.96
- ---------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 12/31/2009/5/ 1.87/6/
- ---------------------------------------------------------

Fundamental Investors / Retirement plan prospectus

<PAGE>

[This page intentionally left blank for this filing]

Fundamental Investors / Retirement plan prospectus

<PAGE>

YEAR ENDED DECEMBER 31
2009 2008 2007 2006 2005
- ------------------------------------------------------------------------------------

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

1 Based on average shares outstanding.

4 This column reflects the impact, if any, of certain reimbursements/waivers
from Capital Research and Management Company. During some of the periods shown,
Capital Research and Management Company reduced fees for investment advisory
services. In addition, during some of the periods shown, Capital Research and
Management Company paid a portion of the fund's transfer agent fees for certain
retirement plan share classes.
5 Based on operations for the period shown and, accordingly, may not be
representative of a full year.
6 Annualized.

Fundamental Investors / Retirement plan 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

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

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.

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-910-0310P Litho in USA CGD/RRD/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/

CLASS TICKER R-3......... RFNCX
A........... ANCFX R-4......... RFNEX
R-1......... RFNAX R-5......... RFNFX
R-2......... RFNBX R-6......... RFNGX

RETIREMENT PLAN
PROSPECTUS

March 1, 2010

TABLE OF CONTENTS

1 Investment objective
1 Fees and expenses of the fund
3 Principal investment strategies
3 Principal risks
4 Investment results
6 Management
6 Purchase and sale of fund shares
7 Tax information
7 Payments to broker-dealers and other financial
intermediaries
8 Investment objective, strategies and risks
9 Additional investment results
11 Management and organization
15 Purchase, exchange and sale of shares
19 Sales charges
21 Sales charge reductions
23 Rollovers from retirement plans to IRAs
24 Plans of distribution
25 Other compensation to dealers
26 Distributions and taxes
27 Financial highlights

<PAGE>

[This page intentionally left blank for this filing]

<PAGE>

Investment objective

The fund's investment objective is to achieve long-term growth of capital and
income.

Fees and expenses of the fund

SHAREHOLDER FEES
(fees paid directly from your investment)
- ------------------------------------------------------------------------------
CLASS A ALL R SHARE CLASSES
------------------------------

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment)
- ----------------------------------------------SHARE CLASSES--------------------

--A-----R-1----R-2----R-3----R-4----R-5------R-6---

---------------------------------------------------

Fundamental Investors / Retirement plan prospectus
<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------

* Estimated by annualizing actual fees and expenses of the share class for a
partial year.

PORTFOLIO TURNOVER

Fundamental Investors / Retirement plan prospectus

<PAGE>

Principal investment strategies

Principal risks

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.

Investors in the fund should have a long-term perspective and, for example, be
able to tolerate potentially sharp declines in value.

Fundamental Investors / Retirement plan prospectus
<PAGE>

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent. These investments
may also be affected by currency fluctuations and controls; different
accounting, auditing, financial reporting, disclosure, and regulatory and legal
standards and practices; expropriation; changes in tax policy; greater market
volatility; different 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.

You should consider how this fund fits into your overall investment program.

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
governmental agency, entity or person.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 5 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. Past results are not predictive of future results. Updated
information on the fund's results can be obtained by visiting americanfunds.com.

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]

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
2009 33.36

[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 17.14% (quarter ended June 30, 2009)
LOWEST -23.34% (quarter ended December 31, 2008)

Fundamental Investors / Retirement plan prospectus

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2009 (WITH MAXIMUM SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- ----------------------------------------------------------------------------

A 8/1/1978 25.71% 2.77% 2.99% 12.26%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- ------------------------------------------------------------------

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

Fundamental Investors / Retirement plan prospectus
<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:

Purchase and sale of fund shares

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

Fundamental Investors / Retirement plan prospectus

<PAGE>

Tax information

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

Payments to broker-dealers and other financial intermediaries

Fundamental Investors / Retirement plan prospectus
<PAGE>

Investment objective, strategies and risks

Investors in the fund should have a long-term perspective and, for example, be
able to tolerate potentially sharp declines in value.

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent. These investments
may also be affected by currency fluctuations and controls; different
accounting, auditing, financial reporting, disclosure, and regulatory and legal
standards and practices; expropriation; changes in tax policy; greater market
volatility; different 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.

You should consider how this fund fits into your overall investment program.

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

Fundamental Investors / Retirement plan prospectus

<PAGE>

Additional investment results

Unlike the table on page 5, the table below reflects the fund's results
calculated without a sales charge.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2009 (WITHOUT SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- ----------------------------------------------------------------------------

A 8/1/1978 33.36% 3.99% 3.61% 12.48%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- ------------------------------------------------------------------

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

S&P 500 (reflects no deductions
for fees, expenses or taxes) 26.47% 0.42% -0.95% 11.21%
Lipper Growth & Income Funds
Index (reflects no 29.10 0.75 1.20 10.60
deductions for fees or taxes)
MSCI World Index (reflects no
deductions for fees, 30.79 2.57 0.23 10.39
expenses or taxes)
Class A distribution rate at December 31, 2009: 1.47%/3/
(For current distribution rate information, please call American FundsLine
at 800/325-3590.)

1 Standard & Poor's 500 Composite Index (S&P 500) reflects certain market
sectors in which the fund may invest. Lipper Growth & Income Funds Index
includes the fund and other mutual funds that disclose investment objectives
that are reasonably comparable to the fund's investment objective. MSCI World
Index also reflects certain market sectors in which the fund may invest.
2 Lifetime results for the index(es) shown are measured from August 1, 1978,
when Capital Research and Management Company became the fund's investment
adviser.
3 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 / Retirement plan prospectus
<PAGE>

Fundamental Investors / Retirement plan prospectus

<PAGE>

Management and organization

INVESTMENT ADVISER

Fundamental Investors / Retirement plan 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.

Fundamental Investors / Retirement plan prospectus

<PAGE>

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

ROLE IN
INVESTMENT EXPERIENCE MANAGEMENT
PORTFOLIO COUNSELOR EXPERIENCE IN THIS FUND OF THE FUND
- -----------------------------------------------------------------------------------------

Fundamental Investors / Retirement plan prospectus
<PAGE>

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

Fundamental Investors / Retirement plan prospectus

<PAGE>

Purchase, exchange and sale of shares

PURCHASES AND EXCHANGES

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

FREQUENT TRADING OF FUND SHARES

Fundamental Investors / Retirement plan prospectus
<PAGE>

exchange activity that the fund or American Funds Distributors has determined
could involve actual or potential harm to the fund, may be rejected.

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 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; 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; and systematic redemptions
and purchases, where the entity maintaining the shareholder account is able to
identify the transaction as a systematic redemption or purchase. Generally,
purchases and redemptions will not be considered "systematic" unless the
transaction is pre-scheduled for a specific date.

Fundamental Investors / Retirement plan prospectus

<PAGE>

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

VALUING SHARES

Fundamental Investors / Retirement plan prospectus
<PAGE>

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

FUND 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 program.
3 Payment with respect to PlanPremier program.

Fundamental Investors / Retirement plan prospectus

<PAGE>

Sales charges

CLASS A SHARES

CLASS A SHARE 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 / Retirement plan 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 that 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.

A 403(b) plan may not invest in Class A or C shares, unless it was invested in
Class A or C shares before January 1, 2009.

CLASS R SHARES

Fundamental Investors / Retirement plan prospectus

<PAGE>

Sales charge reductions

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 Fund) 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 Fund) 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 (as of the day prior to your additional American Funds
investment) 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.

Fundamental Investors / Retirement plan prospectus
<PAGE>

STATEMENT OF INTENTION

RIGHT OF REINVESTMENT

Fundamental Investors / Retirement plan prospectus

<PAGE>

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.

Fundamental Investors / Retirement plan prospectus
<PAGE>

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 that 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 .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.

Fundamental Investors / Retirement plan prospectus

<PAGE>

Other compensation to dealers

Fundamental Investors / Retirement plan prospectus
<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

The fund intends to distribute dividends to shareholders, usually in March,
June, September and December.

Capital gains, if any, are usually distributed in December and March. 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 currently taxable.

TAXES ON TRANSACTIONS

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.

Fundamental Investors / Retirement plan prospectus

<PAGE>

Financial highlights

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

CLASS A:
Year ended 12/31/2009 $24.98 $ .44 $ 7.79 $ 8.23 $ (.48) $ --
Year ended 12/31/2008 42.45 .60 (17.23) (16.63) (.58) (.26)
Year ended 12/31/2007 40.05 1.03 4.39 5.42 (.95) (2.07)
Year ended 12/31/2006 35.40 .62 6.16 6.78 (.56) (1.57)
Year ended 12/31/2005 32.25 .58 3.16 3.74 (.59) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2009 24.90 .22 7.76 7.98 (.26) --
Year ended 12/31/2008 42.31 .32 (17.18) (16.86) (.29) (.26)
Year ended 12/31/2007 39.93 .72 4.33 5.05 (.60) (2.07)
Year ended 12/31/2006 35.31 .29 6.13 6.42 (.23) (1.57)
Year ended 12/31/2005 32.18 .29 3.16 3.45 (.32) --
- ----------------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 12/31/2009 $24.89 $ .21 $ 7.76 $ 7.97 $ (.25) $ --
Year ended 12/31/2008 42.30 .30 (17.17) (16.87) (.28) (.26)
Year ended 12/31/2007 39.92 .70 4.34 5.04 (.59) (2.07)
Year ended 12/31/2006 35.29 .30 6.14 6.44 (.24) (1.57)
Year ended 12/31/2005 32.17 .30 3.14 3.44 (.32) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 12/31/2009 24.94 .36 7.77 8.13 (.40) --
Year ended 12/31/2008 42.38 .48 (17.20) (16.72) (.46) (.26)
Year ended 12/31/2007 39.98 .92 4.34 5.26 (.79) (2.07)
Year ended 12/31/2006 35.35 .47 6.14 6.61 (.41) (1.57)
Year ended 12/31/2005 32.21 .45 3.16 3.61 (.47) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 12/31/2009 24.95 .44 7.77 8.21 (.48) --
Year ended 12/31/2008 42.39 .58 (17.19) (16.61) (.57) (.26)
Year ended 12/31/2007 39.99 1.05 4.34 5.39 (.92) (2.07)
Year ended 12/31/2006 35.36 .59 6.14 6.73 (.53) (1.57)
Year ended 12/31/2005 32.22 .55 3.16 3.71 (.57) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 12/31/2009 24.99 .52 7.79 8.31 (.56) --
Year ended 12/31/2008 42.46 .69 (17.23) (16.54) (.67) (.26)
Year ended 12/31/2007 40.06 1.18 4.34 5.52 (1.05) (2.07)
Year ended 12/31/2006 35.41 .71 6.16 6.87 (.65) (1.57)
Year ended 12/31/2005 32.26 .65 3.17 3.82 (.67) --
- ----------------------------------------------------------------------------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 12/31/2009/5/ 25.63 .37 7.17 7.54 (.43) --
- ----------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2009 $ (.48) $32.73 33.36% $30,954 .69 % .69 %
Year ended 12/31/2008 (.84) 24.98 (39.70) 24,443 .63 .61
Year ended 12/31/2007 (3.02) 42.45 13.55 38,877 .60 .57
Year ended 12/31/2006 (2.13) 40.05 19.24 32,187 .61 .58
Year ended 12/31/2005 (.59) 35.40 11.68 24,390 .62 .60
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2009 (.26) 32.62 32.30 98 1.47 1.47
Year ended 12/31/2008 (.55) 24.90 (40.16) 61 1.43 1.41
Year ended 12/31/2007 (2.67) 42.31 12.62 57 1.44 1.42
Year ended 12/31/2006 (1.80) 39.93 18.19 23 1.47 1.43
Year ended 12/31/2005 (.32) 35.31 10.74 11 1.50 1.46
- ----------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 12/31/2009 $ (.25) $32.61 32.22% $ 550 1.52 % 1.52 %
Year ended 12/31/2008 (.54) 24.89 (40.19) 366 1.49 1.47
Year ended 12/31/2007 (2.66) 42.30 12.61 471 1.46 1.40
Year ended 12/31/2006 (1.81) 39.92 18.26 291 1.54 1.41
Year ended 12/31/2005 (.32) 35.29 10.73 155 1.64 1.43
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 12/31/2009 (.40) 32.67 32.93 1,707 .99 .99
Year ended 12/31/2008 (.72) 24.94 (39.89) 1,058 .98 .95
Year ended 12/31/2007 (2.86) 42.38 13.17 1,157 .97 .94
Year ended 12/31/2006 (1.98) 39.98 18.75 525 .99 .96
Year ended 12/31/2005 (.47) 35.35 11.26 220 1.01 .98
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 12/31/2009 (.48) 32.68 33.31 1,545 .69 .69
Year ended 12/31/2008 (.83) 24.95 (39.70) 942 .67 .65
Year ended 12/31/2007 (2.99) 42.39 13.51 879 .66 .64
Year ended 12/31/2006 (2.10) 39.99 19.12 438 .67 .65
Year ended 12/31/2005 (.57) 35.36 11.61 205 .69 .66
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 12/31/2009 (.56) 32.74 33.75 1,269 .39 .39
Year ended 12/31/2008 (.93) 24.99 (39.53) 1,077 .37 .35
Year ended 12/31/2007 (3.12) 42.46 13.81 1,014 .37 .34
Year ended 12/31/2006 (2.22) 40.06 19.50 481 .38 .35
Year ended 12/31/2005 (.67) 35.41 11.94 265 .39 .36
- ----------------------------------------------------------------------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 12/31/2009/5/ (.43) 32.74 29.60 596 .35/6/ .35/6/
- ----------------------------------------------------------------------------------------------------------------------

Ratio
of net
income
to
average
net
assets/2,4/
- ---------------------------------------------------------

CLASS A:
Year ended 12/31/2009 1.60 %
Year ended 12/31/2008 1.70
Year ended 12/31/2007 2.40
Year ended 12/31/2006 1.60
Year ended 12/31/2005 1.75
- ---------------------------------------------------------
CLASS R-1:
Year ended 12/31/2009 .80
Year ended 12/31/2008 .91
Year ended 12/31/2007 1.67
Year ended 12/31/2006 .74
Year ended 12/31/2005 .88
- ---------------------------------------------------------
(The Financial Highlights table continues on the following page.)
- ---------------------------------------------------------
CLASS R-2:
Year ended 12/31/2009 .77 %
Year ended 12/31/2008 .85
Year ended 12/31/2007 1.62
Year ended 12/31/2006 .77
Year ended 12/31/2005 .91
- ---------------------------------------------------------
CLASS R-3:
Year ended 12/31/2009 1.29
Year ended 12/31/2008 1.37
Year ended 12/31/2007 2.12
Year ended 12/31/2006 1.21
Year ended 12/31/2005 1.35
- ---------------------------------------------------------
CLASS R-4:
Year ended 12/31/2009 1.58
Year ended 12/31/2008 1.68
Year ended 12/31/2007 2.42
Year ended 12/31/2006 1.52
Year ended 12/31/2005 1.66
- ---------------------------------------------------------
CLASS R-5:
Year ended 12/31/2009 1.92
Year ended 12/31/2008 1.98
Year ended 12/31/2007 2.73
Year ended 12/31/2006 1.83
Year ended 12/31/2005 1.96
- ---------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 12/31/2009/5/ 1.87/6/
- ---------------------------------------------------------

Fundamental Investors / Retirement plan prospectus

<PAGE>

[This page intentionally left blank for this filing]

Fundamental Investors / Retirement plan prospectus

<PAGE>

YEAR ENDED DECEMBER 31
2009 2008 2007 2006 2005
- ------------------------------------------------------------------------------------

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

1 Based on average shares outstanding.

Fundamental Investors / Retirement plan 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

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.

FUNDAMENTAL INVESTORS, INC.

Part B
Statement of Additional Information

March 1, 2010

This document is not a prospectus but should be read in conjunction with the
current prospectus or retirement plan prospectus of Fundamental Investors, Inc.
(the "fund" or "FI") dated March 1, 2010. 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.

Class A ANCFX Class 529-A CFNAX Class R-1 RFNAX
Class B AFIBX Class 529-B CFNBX Class R-2 RFNBX
Class C AFICX Class 529-C CFNCX Class R-3 RFNCX
Class F-1 AFIFX Class 529-E CFNEX Class R-4 RFNEX
Class F-2 FINFX Class 529-F-1 CFNFX Class R-5 RFNFX
Class R-6 RFNGX

TABLE OF CONTENTS

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

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 3
Fund policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Management of the fund . . . . . . . . . . . . . . . . . . . . . . 10
Execution of portfolio transactions . . . . . . . . . . . . . . . . 34
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 37
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 42
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 47
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 55
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Shareholder account services and privileges . . . . . . . . . . . . 61
General information . . . . . . . . . . . . . . . . . . . . . . . . 64
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Investment portfolio
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.

Fundamental Investors -- Page 2
<PAGE>

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 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.

Fundamental Investors -- Page 3
<PAGE>

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 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 OUTSIDE THE U.S. -- 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, disclosure, and regulatory and legal standards and practices;
changing local, regional and global economic, political and social conditions;
expropriation; changes in tax policy; greater market volatility; different
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

Fundamental Investors -- Page 4
<PAGE>

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 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 Federal Financing Bank
(FFB), 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;

Fundamental Investors -- Page 5
<PAGE>

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 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.

Fundamental Investors -- Page 6
<PAGE>

* * * * * *

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 may be taxable when
distributed to shareholders.

The fund's portfolio turnover rates for the fiscal years ended December 31, 2009
and 2008 were 30% and 29%, 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 Investors -- Page 7
<PAGE>

FUND POLICIES

All percentage limitations in the following fund policies are considered at the
time securities are purchased and are based on the fund's net assets unless
otherwise indicated. None of the following policies 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. In managing the
fund, the fund's investment adviser may apply more restrictive policies than
those listed below.

FUNDAMENTAL POLICIES -- The fund has adopted the following policies, which may
not be changed without approval by holders of a majority of its outstanding
shares. Such majority is currently 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.

1. Except as permitted by (i) the 1940 Act and the rules and regulations
thereunder, or other successor law governing the regulation of registered
investment companies, or interpretations or modifications thereof by the SEC,
SEC staff or other authority of competent jurisdiction, or (ii) exemptive or
other relief or permission from the SEC, SEC staff or other authority of
competent jurisdiction, the fund may not:

a. Borrow money;

b. Issue senior securities;

c. Underwrite the securities of other issuers;

d. Purchase or sell real estate or commodities;

e. Make loans; or

f. Purchase the securities of any issuer if, as a result of such
purchase, the fund's investments would be concentrated in any
particular industry.

2. The fund may not invest in companies for the purpose of exercising control
or management.

NONFUNDAMENTAL POLICIES -- The following policy may be changed without
shareholder approval:

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.

ADDITIONAL INFORMATION ABOUT FUNDAMENTAL POLICIES -- The information below is
not part of the fund's fundamental policies. This information is intended to
provide a summary of what is currently required or permitted by the 1940 Act and
the rules and regulations thereunder, or by the interpretive guidance thereof by
the SEC or SEC staff, for particular fundamental policies of the fund.

Fundamental Investors -- Page 8
<PAGE>

For purposes of fundamental policy 1a, the fund may borrow money in amounts of
up to 33-1/3% of its total assets from banks for any purpose, and may borrow up
to 5% of its total assets from banks or other lender for temporary purposes.

For purposes of fundamental policy 1e, the fund may not lend more than 33-1/3%
of its total assets, except through the purchase of debt obligations.

For purposes of fundamental policy 1f, the fund may not invest 25% or more of
its total assets in the securities of issuers in the same industry.

Fundamental Investors -- Page 9
<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, 67 Retired; former Vice Chairman, 4 Amphenol Corporation;
Director (2008) Deutsche Bank Alex. Brown Merisel, Inc.;
Nautilus, Inc.;
Obagi Medical Products, Inc.

- -----------------------------------------------------------------------------------------------------------
Joseph C. Berenato, 63 Chairman, Ducommun 6 None
Chairman of the Board Incorporated (aerospace
(Independent and components manufacturer)
Non-Executive) (2003)
- -----------------------------------------------------------------------------------------------------------
Louise H. Bryson, 65 Chair of the Board of 6 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, 68 Chair, First Security 7 None
Director (2005) Management (private
investment)
- -----------------------------------------------------------------------------------------------------------
Mary Anne Dolan, 62 Founder and President, MAD Ink 9 None
Director (2010) (communications company);
former Editor-in-Chief, The
Los Angeles Herald Examiner
- -----------------------------------------------------------------------------------------------------------
Robert A. Fox, 72 Managing General Partner, Fox 9 None
Director (1998) Investments LP; corporate
director; retired President
and CEO, Foster Farms (poultry
producer)
- -----------------------------------------------------------------------------------------------------------
John G. Freund, 56 Founder and Managing Director, 3 Hansen Medical, Inc.;
Director (2010) Skyline Ventures (venture Mako Surgical Corporation;
capital investor in health MAP Pharmaceuticals, Inc.;
care companies) XenoPort, Inc.
- -----------------------------------------------------------------------------------------------------------
Leonade D. Jones, 62 Co-founder, VentureThink LLC 9 None
Director (1998) (developed and managed
e-commerce businesses) and
Versura Inc. (education loan
exchange); former Treasurer,
The Washington Post Company
- -----------------------------------------------------------------------------------------------------------
William H. Kling,/5,6/ President and CEO, American 9 None
67 Public Media Group
Director (2010)
- -----------------------------------------------------------------------------------------------------------
John G. McDonald, 72 Stanford Investors Professor, 12 iStar Financial, Inc.;
Director (1998) Graduate School of Business, Plum Creek Timber Co.;
Stanford University Scholastic Corporation;
Varian, Inc.
- -----------------------------------------------------------------------------------------------------------
Gail L. Neale, 75 President, The Lovejoy 5 None
Director (1985) Consulting Group, Inc. (a pro
bono consulting group advising
nonprofit organizations)
- -----------------------------------------------------------------------------------------------------------
Henry E. Riggs, 75 President Emeritus, Keck 5 None
Director (1989) Graduate Institute of Applied
Life Sciences
- -----------------------------------------------------------------------------------------------------------
Christopher E. Stone, 53 Daniel and Florence Guggenheim 6 None
Director (2010) Professor of the Practice of
Criminal Justice, John F.
Kennedy School of Government,
Harvard University
- -----------------------------------------------------------------------------------------------------------

Fundamental Investors -- Page 10
<PAGE>

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Fundamental Investors -- Page 11
<PAGE>

"INTERESTED" DIRECTORS/7,8/

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, 63 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, 64 Senior Vice President - Capital 1 None
World Investors, Capital
Research and Management Company;
President (1994) Director, Capital Research and
Management Company
- -------------------------------------------------------------------------------------------------------------

OTHER OFFICERS/8/

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
61 Management Company; Senior Vice President - Fixed
Income, Capital Research and Management Company
Executive Vice
President (1994)
- -------------------------------------------------------------------------------
Michael T. Kerr, 50 Senior Vice President - Capital World Investors,
Capital Research and Management Company; Director,
Senior Vice President Capital Research and Management Company
(1995)
- -------------------------------------------------------------------------------
Martin Romo,/8/ 42 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,/8/ 39 Senior Vice President - Capital World Investors,
Capital Research Company*; Director, Capital Research
Vice President (2008) Company*

- -------------------------------------------------------------------------------
Ronald B. Morrow, 64 Senior Vice President - Capital World Investors,
Capital Research and Management Company
Vice President (2004)
- -------------------------------------------------------------------------------
Donald H. Rolfe, 37 Associate Counsel - Fund Business Management Group,
Capital Research and Management Company
Vice President (2007)
- -------------------------------------------------------------------------------
Patrick F. Quan, 51 Vice President - Fund Business Management Group,
Capital Research and Management Company
Secretary (1989-1998;
2000)
- -------------------------------------------------------------------------------
Jeffrey P. Regal, 38 Vice President - Fund Business Management Group,
Capital Research and Management Company
Treasurer (2006)
- -------------------------------------------------------------------------------
Gregory F. Niland, 38 Vice President - Fund Business Management Group,
Capital Research and Management Company
Assistant Treasurer
(2009)
- -------------------------------------------------------------------------------

Fundamental Investors -- Page 12
<PAGE>

* 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 10 funds and is available through tax-deferred retirement
plans and IRAs; and Endowments, which 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 Gordon Crawford (Senior Vice President, Capital Research Global Investors,
Capital Research and Management Company and Director, The Capital Group
Companies, Inc.) has been a trustee of Southern California Public Radio, where
Mr. Kling formerly served as a trustee and as Second Vice Chair during 2008 and
2009.
6 Mr. Kling is a former director of Irwin Financial Corporation, which filed a
petition for liquidation under Chapter 7 of the federal Bankruptcy Code on
September 21, 2009. This action followed the issuance of consent orders by
relevant federal and state banking authorities and the appointment of the
Federal Deposit Insurance Corporation as receiver for Irwin Financial
Corporation's two banking subsidiaries.
7 "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).
8 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 13
<PAGE>

FUND SHARES OWNED BY DIRECTORS AS OF DECEMBER 31, 2009:

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 $50,001 - Over $100,000
$100,000
- --------------------------------------------------------------------------------------------
Joseph C. Berenato $10,001 - Over $100,000 $50,001 - Over $100,000
$50,000 $100,000
- --------------------------------------------------------------------------------------------
Louise H. Bryson Over $100,000 Over $100,000 $50,001 - Over $100,000
$100,000
- --------------------------------------------------------------------------------------------
Robert J. Denison $10,001 - $50,001 - N/A N/A
$50,000 $100,000
- --------------------------------------------------------------------------------------------
Mary Anne Dolan/3/ $50,001 - Over $100,000 N/A N/A
$100,000
- --------------------------------------------------------------------------------------------
Robert A. Fox Over $100,000 Over $100,000 Over $100,000 Over $100,000
- --------------------------------------------------------------------------------------------
John G. Freund/3/ None Over $100,000 $50,001 - Over $100,000
$100,000/4/
- --------------------------------------------------------------------------------------------
Leonade D. Jones Over $100,000 Over $100,000 Over $100,000 Over $100,000
- --------------------------------------------------------------------------------------------
William H. Kling/3/ $50,001 - Over $100,000 N/A N/A
$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
- --------------------------------------------------------------------------------------------
Christopher E. $10,001 - Over $100,000 N/A N/A
Stone/3/ $50,000
- --------------------------------------------------------------------------------------------

Fundamental Investors -- Page 14
<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.

3 Mary Anne Dolan, John G. Freund, William H. Kling and Christopher E. Stone
were newly elected to the board effective January 1, 2010.
4 As of January 15, 2010.

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 $6,875 to $20,000, 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 15
<PAGE>

DIRECTOR COMPENSATION EARNED DURING THE FISCAL YEAR ENDED DECEMBER 31, 2009

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

Ronald P. Badie/3/ $55,750 $129,500
- ------------------------------------------------------------------------------------------
Joseph C. Berenato/3/ 65,125 329,416
- ------------------------------------------------------------------------------------------
Louise H. Bryson/3/ 51,083 206,500
- ------------------------------------------------------------------------------------------
Robert J. Denison/3/ 50,875 240,666
- ------------------------------------------------------------------------------------------
Mary Anne Dolan/4/ None 317,500
- ------------------------------------------------------------------------------------------
Robert A. Fox/3/ 49,963 310,667
- ------------------------------------------------------------------------------------------
John G. Freund/4/ None 89,917
- ------------------------------------------------------------------------------------------
Leonade D. Jones/3/ 49,609 360,667
- ------------------------------------------------------------------------------------------
William H. Kling/4/ None 333,896
- ------------------------------------------------------------------------------------------
John G. McDonald/3/ 48,333 400,250
- ------------------------------------------------------------------------------------------
Gail L. Neale 60,375 225,250
- ------------------------------------------------------------------------------------------
Henry E. Riggs/3/ 72,533 293,416
- ------------------------------------------------------------------------------------------
Christopher E. Stone/4/ None 196,896
- ------------------------------------------------------------------------------------------

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, 2009 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 10 funds and is available through tax-deferred retirement
plans and IRAs; and Endowments, which 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 2009
fiscal year for participating directors is as follows: Ronald P. Badie
($90,838), Joseph C. Berenato ($75,065), Louise H. Bryson ($83,290), Robert J.
Denison ($193,453), Robert A. Fox ($473,862), Leonade D. Jones ($123,351), John
G. McDonald ($480,363) and Henry E. Riggs ($445,736). Amounts deferred and
accumulated earnings thereon are not funded and are general unsecured
liabilities of the fund until paid to the directors.
4 Mary Anne Dolan, John G. Freund, William H. Kling and Christopher E. Stone
were newly elected to the board effective January 1, 2010.

As of February 1, 2010, 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. At a meeting of the fund's shareholders on November 24, 2009, shareholders
approved the reorganization of the fund to a Delaware statutory trust. The
reorganization is expected to be completed in 2010 or early 2011; however, the
fund reserves the right to delay the implementation. A summary comparison of the
governing documents and state laws affecting the Delaware statutory trust and
the current form

Fundamental Investors -- Page 16
<PAGE>

of organization of the fund can be found in a joint proxy statement available on
the SEC's website at sec.gov. 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 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 the fund's Class 529 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, Robert J. Denison, Leonade D. Jones, William H.
Kling and Christopher E. Stone, 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

Fundamental Investors -- Page 17
<PAGE>

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 2009
fiscal year.

The fund has a contracts committee, comprised of Ronald P. Badie, Joseph C.
Berenato, Louise H. Bryson, Robert J. Denison, Mary Anne Dolan, Robert A. Fox,
John G. Freund, Leonade D. Jones, William H. Kling, John G. McDonald, Gail L.
Neale, Henry E. Riggs and Christopher E. Stone, 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, 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 2009 fiscal year.

The fund has a nominating and governance committee, comprised of Louise H.
Bryson, Mary Anne Dolan, John G. Freund, John G. McDonald and Henry E. Riggs,
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.
Five nominating and governance committee meetings were held during the 2009
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. Proxies are voted by a committee of the
appropriate equity investment division of the investment adviser under authority
delegated by the funds' boards. Therefore, if more than one fund invests in the
same company, they may vote differently on the same proposal. In addition, the
funds' boards monitor the proxy voting process and provide guidance with respect
to the Principles.

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 18
<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 19
<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 February 1, 2010. 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 27.45%
Omnibus Account Class B 18.64
Maryland Heights, MO Class F-1 15.08
- -------------------------------------------------------------------------------
First Clearing, LLC Record Class A 7.02
Custody Account Class B 7.02
St. Louis, MO Class C 10.33
- -------------------------------------------------------------------------------
Citigroup Global Markets, Inc. Record Class C 13.69
Omnibus Account Class F-1 23.12
New York, NY
- -------------------------------------------------------------------------------
Merrill Lynch Record Class C 10.04
Omnibus Account Class F-2 23.43
Jacksonville, FL
- -------------------------------------------------------------------------------
LPL Financial Record Class F-1 8.71
Omnibus Account Class F-2 15.49
San Diego, CA
- -------------------------------------------------------------------------------
Charles Schwab & Co., Inc. Record Class F-1 6.80
Custody Account Class F-2 5.48
San Francisco, CA Class R-4 6.25
Class R-5 8.54
Class R-6 8.26
- -------------------------------------------------------------------------------
Hartford Life Insurance Co. Separate Record Class R-1 35.56
Account Beneficial
401K Plan
Hartford, CT
- -------------------------------------------------------------------------------
NFS, LLC FEBO Record Class R-3 6.90
Transamerica Life Insurance Beneficial
Los Angeles, CA
- -------------------------------------------------------------------------------
ING Life Insurance & Annuity Record Class R-3 6.04
Hartford, CT
- -------------------------------------------------------------------------------
NFS, LLC FEBO Record Class R-4 14.13
401K Plans Beneficial Class R-5 16.62
Covington, KY Class R-6 10.96
- -------------------------------------------------------------------------------
Principal Financial Group Record Class R-4 6.89
Omnibus Account
Des Moines, IA
- -------------------------------------------------------------------------------
The Capital Group Companies Record Class R-5 5.63
Retirement Plan Beneficial
Los Angeles, CA
- -------------------------------------------------------------------------------
John Hancock Life Insurance Co. USA Record Class R-5 5.55
Omnibus Account
Boston, MA
- -------------------------------------------------------------------------------
Edward D. Jones & Co. Record Class R-5 5.53
Retirement Plan Beneficial
Norwood, MA
- -------------------------------------------------------------------------------
Reed Elsevier Record Class R-5 5.50
Retirement Plan Beneficial
Westwood, MA
- -------------------------------------------------------------------------------
American Funds 2020 Target Date Record Class R-6 11.31
Retirement Fund
Norfolk, VA
- -------------------------------------------------------------------------------
American Funds 2025 Target Date Record Class R-6 9.12
Retirement Fund
Norfolk, VA
- -------------------------------------------------------------------------------
American Funds 2030 Target Date Record Class R-6 8.88
Retirement Fund
Norfolk, VA
- -------------------------------------------------------------------------------
American Funds 2015 Target Date Record Class R-6 7.79
Retirement Fund
Norfolk, VA
- -------------------------------------------------------------------------------
American Funds 2035 Target Date Record Class R-6 6.83
Retirement Fund
Norfolk, VA
- -------------------------------------------------------------------------------
American Funds 2040 Target Date Record Class R-6 6.57
Retirement Fund
Norfolk, VA
- -------------------------------------------------------------------------------

Fundamental Investors -- Page 20
<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

Fundamental Investors -- Page 21
<PAGE>

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.

Fundamental Investors -- Page 22
<PAGE>

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 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.

Fundamental Investors -- Page 23
<PAGE>

THE FOLLOWING TABLE REFLECTS INFORMATION AS OF DECEMBER 31, 2009:

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 $156.7 1 $0.94 None
$1,000,000
- ----------------------------------------------------------------------------------------
Michael T. Kerr Over 2 $256.3 None None
$1,000,000
- ----------------------------------------------------------------------------------------
Ronald B. $100,001 - 3 $306.5 None None
Morrow $500,000
- ----------------------------------------------------------------------------------------
James E. Drasdo Over 1 $156.2 None None
$1,000,000
- ----------------------------------------------------------------------------------------
Brady L. $100,001 - 2 $ 62.0 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 or its affiliates 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.

Fundamental Investors -- Page 24
<PAGE>

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, 2010, 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 (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, the Agreement provides that the investment adviser may
delegate all, or a portion of, its investment management responsibilities to one
or more subsidiary advisers approved by the fund's board, pursuant to an
agreement between the investment adviser and such subsidiary. Any such
subsidiary adviser will be paid solely by the investment adviser out of its
fees.

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.

For the fiscal years ended December 31, 2009, 2008 and 2007, the investment
adviser was entitled to receive from the fund management fees of $97,096,000,
$115,983,000 and $115,799,000, 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) and $104,219,000 (a
reduction of $11,580,000) for the fiscal years ended December 31, 2008 and 2007,
respectively.

Fundamental Investors -- Page 25
<PAGE>

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, 2010, 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 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.

Fundamental Investors -- Page 26
<PAGE>

During the 2009 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:

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

CLASS C $2,840,000
- ------------------------------------------------------------------------------
CLASS F-1 4,393,000
- ------------------------------------------------------------------------------
CLASS F-2 461,000
- ------------------------------------------------------------------------------
CLASS 529-A 787,000
- ------------------------------------------------------------------------------
CLASS 529-B 95,000
- ------------------------------------------------------------------------------
CLASS 529-C 260,000
- ------------------------------------------------------------------------------
CLASS 529-E 35,000
- ------------------------------------------------------------------------------
CLASS 529-F-1 33,000
- ------------------------------------------------------------------------------
CLASS R-1 152,000
- ------------------------------------------------------------------------------
CLASS R-2 2,100,000
- ------------------------------------------------------------------------------
CLASS R-3 2,674,000
- ------------------------------------------------------------------------------
CLASS R-4 1,840,000
- ------------------------------------------------------------------------------
CLASS R-5 1,097,000
- ------------------------------------------------------------------------------
CLASS R-6* 151,000
- ------------------------------------------------------------------------------

* Class R-6 was first offered for sale on May 1, 2009.

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 sold prior to April 21, 2009, the
Principal Underwriter sold 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 compensated investment dealers for sales of
Class B and 529-B shares out of the proceeds of this sale and kept any
amounts remaining after this compensation was paid.

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

Fundamental Investors -- Page 27
<PAGE>

In addition, the fund reimburses the Principal Underwriter for advancing
immediate service fees to qualified dealers and advisers upon the sale of Class
C and 529-C shares. The fund also reimbursed the Principal Underwriter for
advancing immediate service fees to qualified dealers on sales of Class B and
529-B shares prior to April 21, 2009. 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 2009 $10,650,000 $ 48,070,000
2008 22,580,000 99,505,000
2007 23,001,000 100,028,000
- -----------------------------------------------------------------------------------------------------
CLASS B 2009 229,000 943,000
2008 763,000 6,709,000
2007 1,020,000 6,693,000
- -----------------------------------------------------------------------------------------------------
CLASS C 2009 759,000 2,474,000
2008 272,000 5,732,000
2007 -- 6,137,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-A 2009 570,000 2,709,000
2008 877,000 4,067,000
2007 947,000 4,327,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-B 2009 18,000 75,000
2008 49,000 393,000
2007 58,000 407,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-C 2009 28,000 304,000
2008 -- 502,000
2007 -- 543,000
- -----------------------------------------------------------------------------------------------------

Fundamental Investors -- Page 28
<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 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:

Fundamental Investors -- Page 29
<PAGE>

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 2009 fiscal year, 12b-1 expenses accrued and paid, and if applicable,
unpaid, were:

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

CLASS A $59,885,000 $5,626,000
- ------------------------------------------------------------------------------
CLASS B 8,642,000 774,000
- ------------------------------------------------------------------------------
CLASS C 16,027,000 1,653,000
- ------------------------------------------------------------------------------
CLASS F-1 7,661,000 1,308,000
- ------------------------------------------------------------------------------
CLASS 529-A 1,119,000 113,000
- ------------------------------------------------------------------------------
CLASS 529-B 601,000 63,000
- ------------------------------------------------------------------------------
CLASS 529-C 1,712,000 197,000
- ------------------------------------------------------------------------------
CLASS 529-E 127,000 14,000
- ------------------------------------------------------------------------------
CLASS 529-F-1 -- --
- ------------------------------------------------------------------------------
CLASS R-1 807,000 90,000
- ------------------------------------------------------------------------------
CLASS R-2 3,319,000 357,000
- ------------------------------------------------------------------------------
CLASS R-3 6,653,000 745,000
- ------------------------------------------------------------------------------
CLASS R-4 3,074,000 354,000
- ------------------------------------------------------------------------------

Fundamental Investors -- Page 30
<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.

Fundamental Investors -- Page 31
<PAGE>

OTHER COMPENSATION TO DEALERS -- As of July 2009, 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
American General Securities Incorporated
FSC Securities Corporation
Royal Alliance Associates, Inc.
SagePoint Financial, Inc.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc
Cambridge Investment Research, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Edward Jones
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.
J. J. B. Hilliard, W. L. Lyons, LLC
JJB Hilliard/PNC Bank
PNC Bank, National Association
PNC Investments LLC
Lincoln Financial Advisors Corporation
Lincoln Financial Securities 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, Inc.
Walnut Street Securities, Inc.
MML Investors Services, Inc.

Fundamental Investors -- Page 32
<PAGE>

Morgan Keegan & Company, Inc.
Morgan Stanley Smith Barney LLC
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
PFS Investments Inc.
Raymond James Group
Raymond James & Associates, Inc.
Raymond James Financial Services Inc.
RBC Capital Markets Corporation
Robert W. Baird & Co. Incorporated
Securian / C.R.I.
CRI Securities, LLC
Securian Financial Services, Inc.
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
Wells Fargo Network
A. G. Edwards, A Division Of Wells Fargo Advisors, LLC
First Clearing LLC
H.D. Vest Investment Securities, Inc.
Wells Fargo Advisors Financial Network, LLC
Wells Fargo Advisors Investment Services Group
Wells Fargo Advisors Latin American Channel
Wells Fargo Advisors Private Client Group
Wells Fargo Investments, LLC

Fundamental Investors -- Page 33
<PAGE>

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, 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

Fundamental Investors -- Page 34
<PAGE>

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-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

Fundamental Investors -- Page 35
<PAGE>

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, 2009, 2008 and 2007 amounted to $21,256,000, $23,964,000 and
$18,379,000, respectively. The volume of trading decreased during the year,
resulting in a decrease 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. As of the fund's most
recent fiscal year-end, the fund held equity securities of Citigroup Inc. in the
amount of $99,300,000.

Fundamental Investors -- Page 36
<PAGE>

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 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

Fundamental Investors -- Page 37
<PAGE>

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 38
<PAGE>

PRICE OF SHARES

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 by the fund or the
Transfer Agent provided that your request contains all information and legal
documentation necessary to process the transaction; 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 American Funds Money Market Fund) 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.

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, proprietary pricing models 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.

Fundamental Investors -- Page 39
<PAGE>

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 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.

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).

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

Fundamental Investors -- Page 40
<PAGE>

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.

Net assets so obtained for each share class are 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.

Fundamental Investors -- Page 41
<PAGE>

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"
generally 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.

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

Fundamental Investors -- Page 42
<PAGE>

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. When a dividend or a capital gain is distributed by the fund,
the net asset value per share is reduced by the amount of the payment.

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 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.

Fundamental Investors -- Page 43
<PAGE>

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 to corporate shareholders 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 distribute its net
capital gain each year. The fund's net capital gain is 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.

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

Fundamental Investors -- Page 44
<PAGE>

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 net capital gain 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. For non-corporate shareholders, 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 (including any undistributed
amounts treated as distributed capital gains, as described above) 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).

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.

Fundamental Investors -- Page 45
<PAGE>

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 fund 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 46
<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 transaction confirmation and mailing the form, along
with a check made payable to the fund, using the envelope provided with
your confirmation.

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 47
<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. 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. In addition, 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.

Class R-5 and R-6 shares may also be made available to the Virginia College
Savings Plan for use in the Virginia Education Savings Trust and the Virginia
Prepaid Education Program.

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

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

Fundamental Investors -- Page 48
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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 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
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 Fund are subject to applicable sales
charges, unless the American Funds 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." 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

Fundamental Investors -- Page 49
<PAGE>

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 50
<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.

Fundamental Investors -- Page 51
<PAGE>

SALES CHARGES

CLASS A PURCHASES

PURCHASES BY CERTAIN 403(B) PLANS

A 403(b) plan may not invest in Class A or C shares unless such plan was
invested in Class A or C shares before January 1, 2009.

Participant accounts of a 403(b) plan that were treated as an
individual-type plan for sales charge purposes before 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 before 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 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

Fundamental Investors -- Page 52
<PAGE>

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;

(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:

Fundamental Investors -- Page 53
<PAGE>

. 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%.

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.

Fundamental Investors -- Page 54
<PAGE>

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 American Funds Money Market Fund) 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.

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

Fundamental Investors -- Page 55
<PAGE>

Statements for these plans will expire if they have not been met by the
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;

. 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;

Fundamental Investors -- Page 56
<PAGE>

. 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 American
Funds Money Market Fund 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 Fund 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 Fund 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") as of the day prior to your American Funds investment 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 calculation at cost value and instead may be calculated at
market value for purposes of rights of accumulation.

Fundamental Investors -- Page 57
<PAGE>

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 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.

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.

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

Fundamental Investors -- Page 58
<PAGE>

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 Fund 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.

Fundamental Investors -- Page 59
<PAGE>

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."

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 American Funds
Money Market Fund be wired to your bank by writing American Funds Service
Company. A signature guarantee is required on all requests to wire funds.

Fundamental Investors -- Page 60
<PAGE>

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 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.

Fundamental Investors -- Page 61
<PAGE>

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.

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

Fundamental Investors -- Page 62
<PAGE>

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 Fund 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 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.

Fundamental Investors -- Page 63
<PAGE>

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 $42,535,000 for Class A shares and $1,396,000 for
Class B shares for the 2009 fiscal year. American Funds Service Company is also
compensated for certain transfer agency services provided to all 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.

INDEPENDENT LEGAL COUNSEL -- K&L Gates, LLP, Four Embarcadero Center, Suite
1200, San Francisco, CA 94111, serves as independent legal counsel ("counsel")
for the fund and for independent directors in their capacities as such.
Counsel does not provide legal services to the fund's investment adviser, but
provides an insignificant amount of legal services unrelated to the operations
of the fund to an investment adviser affiliate. 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 summary prospectuses
annually and at least semi-annually with reports showing the fund's investment
portfolio or summary investment portfolio, financial statements and other
information. Shareholders may request a copy of the fund's current prospectus at
no cost by calling 800/421-0180 or by sending an e-mail request to
prospectus@americanfunds.com. The fund's annual financial statements are audited
by the

Fundamental Investors -- Page 64
<PAGE>

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 summary prospectuses, shareholder reports and
proxy statements. To receive additional copies of a summary prospectus, report
or proxy statement, shareholders should contact the Transfer Agent.

Shareholders may also elect to receive updated summary 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 summary 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 summary prospectuses and other reports in
paper form by mail.

Summary prospectuses, 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.

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.

Fundamental Investors -- Page 65
<PAGE>

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- DECEMBER 31, 2009

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $32.73
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). . . . . . . . . . . . . . . . $34.73

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.

Fundamental Investors -- Page 66
<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 Funds Short-Term
Tax-Exempt Bond Fund/SM/ . 039 N/A N/A 439 639
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 FUND
American Funds Money Market
Fund/SM/ . . . . . . . . . 059 259 359 459 659
___________
*Qualified for sale only in certain jurisdictions.

Fundamental Investors -- Page 67
<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

Fundamental Investors -- Page 68
<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 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
Short-Term Bond Fund of America. . 2148 2248 2348 2448 2548 2648
U.S. Government Securities Fund . 2122 2222 2322 2422 2522 2622
MONEY MARKET FUND
American Funds Money Market Fund . 2159 2259 2359 2459 2559 2659
___________
*Qualified for sale only in certain
jurisdictions.

Fundamental Investors -- Page 69
<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 2055 Target
Date Retirement Fund/SM/ 082 2182 2282 2382 2482 2582 2682
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 70
<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 71
<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 72
<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 73

Industry sector diversification	(percent of net assets)

Information technology		16.99	%
Energy		12.65
Health Care		12.13
Industrials		10.99
Financials		9.57
Other industries		32.99
Convertible securities		0.03
Bonds & notes		0.01
Short-term securities & other assets less liabilities		4.64

Country diversification (percent of net assets)
United States	72.3	%
Euro zone *	8.0
Canada	4.9
United Kingdom	3.1
Switzerland	3.1
Other countries	3.9
Bonds, short-term securities & other assets less liabilities	4.7

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

							Percent
				Value			of net
Common stocks - 95.32%	Shares				(000	)	assets

Information technology - 16.99%
Microsoft Corp.		38,795,000		$	1,182,860			2.62	%
Oracle Corp.		40,523,879			994,456			2.20
Cisco Systems, Inc. (1)		25,643,500			613,905			1.36
Google Inc., Class A (1)		920,000			570,382			1.27
Yahoo! Inc. (1)		30,660,000			514,475			1.14
Apple Inc. (1)		2,420,000			510,281			1.13
Corning Inc.		24,270,000			468,654			1.04
Intuit Inc. (1)		10,875,000			333,971			.74
SAP AG (ADR)		6,500,000			304,265			.68
Other securities					2,170,111			4.81
					7,663,360			16.99

Energy - 12.65%
Suncor Energy Inc.		40,433,040			1,437,387			3.18
Occidental Petroleum Corp.		6,204,244			504,715			1.12
CONSOL Energy Inc. (2)		6,700,000			333,660			.74
ConocoPhillips		5,470,000			279,353			.62
TOTAL SA (3)		4,210,000			269,586			.60
Tenaris SA (ADR)		6,200,000			264,430			.59
FMC Technologies, Inc. (1)		4,500,000			260,280			.58
Other securities					2,357,846			5.22
					5,707,257			12.65

Health care - 12.13%
Merck & Co., Inc.		36,151,059			1,320,960			2.93
Roche Holding AG (3)		3,820,000			649,122			1.44
Medtronic, Inc.		13,625,000			599,227			1.33
Eli Lilly and Co.		13,685,000			488,691			1.08
Baxter International Inc.		6,940,000			407,239			.90
Pfizer Inc		15,940,000			289,949			.64
Other securities					1,719,292			3.81
					5,474,480			12.13

Industrials - 10.99%
Lockheed Martin Corp.		5,398,200			406,754			.90
Union Pacific Corp.		6,100,000			389,790			.87
Schneider Electric SA (3)		3,157,277			365,509			.81
Deere & Co.		5,600,000			302,904			.67
Boeing Co.		5,500,000			297,715			.66
First Solar, Inc. (1)		2,110,000			285,694			.63
Other securities					2,909,600			6.45
					4,957,966			10.99

Financials - 9.57%
JPMorgan Chase & Co.		16,255,000			677,346			1.50
Wells Fargo & Co.		19,513,000			526,656			1.17
U.S. Bancorp		21,952,000			494,140			1.09
Bank of America Corp.		28,000,000			421,680			.93
Berkshire Hathaway Inc., Class A (1)		2,945			292,144			.65
ACE Ltd.		5,700,000			287,280			.64
Aon Corp.		6,700,000			256,878			.57
Other securities					1,363,800			3.02
					4,319,924			9.57

Materials - 9.03%
Rio Tinto PLC (3)		10,662,500			575,417			1.27
Syngenta AG (3)		2,025,400			566,922			1.26
Potash Corp. of Saskatchewan Inc.		2,684,100			291,225			.65
Other securities					2,639,682			5.85
					4,073,246			9.03

Consumer discretionary - 7.79%
McDonald's Corp.		11,556,400			721,582			1.60
Home Depot, Inc.		12,600,000			364,518			.81
Starbucks Corp. (1)		14,000,000			322,840			.72
Walt Disney Co.		8,000,000			258,000			.57
Other securities					1,845,711			4.09
					3,512,651			7.79

Consumer staples - 6.12%
Coca-Cola Co.		11,460,000			653,220			1.45
Philip Morris International Inc.		8,224,800			396,353			.88
Altria Group, Inc.		14,175,100			278,257			.61
Other securities					1,433,644			3.18
					2,761,474			6.12

Utilities - 4.44%
Exelon Corp.		7,760,900			379,275			.84
GDF Suez (3)		6,029,861			261,407			.58
Other securities					1,364,583			3.02
					2,005,265			4.44

Telecommunication services - 2.91%
Verizon Communications Inc.		16,800,000			556,584			1.23
Telefónica, SA (3)		9,500,000			264,586			.59
Other securities					490,144			1.09
					1,311,314			2.91

Miscellaneous - 2.70%
Other common stocks in initial period of acquisition					1,219,520			2.70


Total common stocks (cost: $37,957,243,000)					43,006,457			95.32



							Percent
				Value			of net
Convertible securities - 0.03%					(000	)	assets

Miscellaneous - 0.03%
Other convertible securities in initial period of acquisition					13,875			.03


Total convertible securities (cost: $12,500,000)					13,875			.03



							Percent
				Value			of net
Bonds & notes - 0.01%					(000	)	assets

Mortgage-backed obligations - 0.01%
Other securities					6,360			.01


Total bonds & notes (cost: $6,440,000)					6,360			.01



	Principal						Percent
	amount			Value			of net
Short-term securities - 4.59%		(000	)		(000	)	assets


Freddie Mac 0.08%-1.00% due 1/20-9/14/2010	$	754,000			753,730			1.67
Coca-Cola Co. 0.18%-0.21% due 1/6-3/18/2010 (2)		102,850			102,841			.23
Variable Funding Capital Company LLC 0.16%-0.21% due 1/5-1/14/2010 (2)		77,000			76,991			.17
Enterprise Funding Co. LLC 0.20% due 3/17/2010 (2)		35,019			35,003
Bank of America Corp. 0.23% due 3/23/2010		30,000			29,986			.15
Park Avenue Receivables Co., LLC 0.15% due 1/4/2010 (2)		35,000			34,999
Jupiter Securitization Co., LLC 0.15%-0.21% due 1/12-1/15/2010 (2)		24,500			24,497			.13
Medtronic Inc. 0.14% due 1/5/2010 (2)		26,300			26,300			.06
Other securities					984,630			2.18


Total short-term securities (cost: $2,068,739,000)					2,068,977			4.59


Total investment securities (cost: $40,044,922,000)					45,095,669			99.95
Other assets less liabilities					22,220			.05

Net assets				$	45,117,889			100.00	%

									Dividend			Value of affiliates
	Beginning						Ending		income			at 12/31/09
	shares		Additions		Reductions		shares			(000	)		(000	)
Strayer Education, Inc.		-		743,100		-		743,100	$	1,369		$	157,901
Grafton Group PLC, units (3)		14,650,000		312,000		-		14,962,000		1,492			62,041
Corporate Executive Board Co.		2,304,200		-		-		2,304,200		1,705			52,582
FMC Technologies, Inc. (1) (4) (5)		6,200,000		322,400		2,022,400		4,500,000		-			-
									$	4,566		$	272,524

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

(1) Security did not produce income during the last 12 months.
(2) 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 $982,869,000, which represented 2.18% of the net assets of the fund.
(3) 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 $6,744,614,000, which represented 14.95% of the net assets of the fund. This entire amount relates to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.
(4) This security was an unaffiliated issuer in its initial period of acquisition at 12/31/2008; it was not publicly disclosed.
(5) Unaffiliated issuer at 12/31/2009.


Key to abbreviation
ADR = American Depositary Receipts

See Notes to Financial Statements

Common stocks — 95.32%	Shares			Value (000)

INFORMATION TECHNOLOGY — 16.99%
Microsoft Corp.		38,795,000		$	1,182,860
Oracle Corp.		40,523,879			994,456
Cisco Systems, Inc.1		25,643,500			613,905
Google Inc., Class A1		920,000			570,382
Yahoo! Inc.1		30,660,000			514,475
Apple Inc.1		2,420,000			510,281
Corning Inc.		24,270,000			468,654
Intuit Inc.1		10,875,000			333,971
SAP AG (ADR)		6,500,000			304,265
EMC Corp.1		14,000,000			244,580
QUALCOMM Inc.		5,125,000			237,083
Fidelity National Information Services, Inc.		8,285,499			194,212
Intel Corp.		8,000,000			163,200
Visa Inc., Class A		1,850,000			161,801
Xilinx, Inc.		6,300,000			157,878
Lender Processing Services, Inc.		3,807,500			154,813
Microchip Technology Inc.		5,300,000			154,018
Hewlett-Packard Co.		2,600,000			133,926
Red Hat, Inc.1		3,000,000			92,700
Applied Materials, Inc.		6,500,000			90,610
Comverse Technology, Inc.1		7,684,470			72,618
Tyco Electronics Ltd.		2,615,000			64,198
Paychex, Inc.		2,043,500			62,613
Linear Technology Corp.		1,860,000			56,804
ASML Holding NV2		1,374,568			46,719
KLA-Tencor Corp.		1,274,500			46,086
HTC Corp.2		1,880,940			21,430
Murata Manufacturing Co., Ltd.2		300,000			14,822
					7,663,360

ENERGY — 12.65%
Suncor Energy Inc.		40,433,040			1,437,387
Occidental Petroleum Corp.		6,204,244			504,715
CONSOL Energy Inc.3		6,700,000			333,660
ConocoPhillips		5,470,000			279,353
TOTAL SA2		4,210,000			269,586
Tenaris SA (ADR)		6,200,000			264,430
FMC Technologies, Inc.1		4,500,000			260,280
Chevron Corp.		3,117,763			240,036
Royal Dutch Shell PLC, Class A (ADR)		3,500,000			210,385
Royal Dutch Shell PLC, Class B (ADR)		450,000			26,158
Murphy Oil Corp.		4,343,636			235,425
Baker Hughes Inc.		5,220,000			211,305
Diamond Offshore Drilling, Inc.		2,050,000			201,761
Petróleo Brasileiro SA – Petrobras, ordinary nominative (ADR)		3,210,000			153,053
Hess Corp.		2,500,000			151,250
Acergy SA2		9,520,000			150,096
Imperial Oil Ltd.		3,608,739			140,185
Smith International, Inc.		4,810,000			130,688
OAO TMK (GDR)1,2		5,685,000			99,646
Halliburton Co.		3,040,000			91,474
Schlumberger Ltd.		1,200,000			78,108
Devon Energy Corp.		1,000,000			73,500
Quicksilver Resources Inc.1		2,592,200			38,909
Canadian Oil Sands Trust		1,249,700			35,711
Exxon Mobil Corp.		500,000			34,095
Arch Coal, Inc.		1,286,600			28,627
Cameco Corp.		846,300			27,434
					5,707,257

HEALTH CARE — 12.13%
Merck & Co., Inc.		36,151,059			1,320,960
Roche Holding AG2		3,820,000			649,122
Medtronic, Inc.		13,625,000			599,227
Eli Lilly and Co.		13,685,000			488,691
Baxter International Inc.		6,940,000			407,239
Pfizer Inc		15,940,000			289,949
Shire Ltd. (ADR)		3,500,000			205,450
Intuitive Surgical, Inc.1		649,895			197,126
Hologic, Inc.1		12,730,000			184,585
Novartis AG2		3,200,000			174,150
Johnson & Johnson		2,300,000			148,143
Amgen Inc.1		2,058,000			116,421
Abbott Laboratories		1,800,000			97,182
Stryker Corp.		1,800,000			90,666
Hospira, Inc.1		1,700,000			86,700
Novo Nordisk A/S, Class B2		1,329,000			85,022
Bayer AG2		1,000,000			79,867
Aetna Inc.		2,310,000			73,227
St. Jude Medical, Inc.1		1,900,000			69,882
Medco Health Solutions, Inc.1		926,000			59,181
Boston Scientific Corp.1		4,445,000			40,005
C. R. Bard, Inc.		150,000			11,685
					5,474,480

INDUSTRIALS — 10.99%
Lockheed Martin Corp.		5,398,200			406,754
Union Pacific Corp.		6,100,000			389,790
Schneider Electric SA2		3,157,277			365,509
Deere & Co.		5,600,000			302,904
Boeing Co.		5,500,000			297,715
First Solar, Inc.1		2,110,000			285,694
Emerson Electric Co.		6,000,000			255,600
Tyco International Ltd.		7,040,000			251,187
Parker Hannifin Corp.		4,500,000			242,460
United Technologies Corp.		3,250,000			225,582
Northrop Grumman Corp.		3,966,243			221,515
Waste Management, Inc.		5,700,000			192,717
United Parcel Service, Inc., Class B		3,250,000			186,452
European Aeronautic Defence and Space Co. EADS NV2		8,000,000			159,688
Precision Castparts Corp.		1,200,000			132,420
Joy Global Inc.		2,238,638			115,491
Fastenal Co.		2,500,500			104,121
General Electric Co.		6,650,000			100,615
Honeywell International Inc.		2,300,000			90,160
Raytheon Co.		1,732,732			89,270
Republic Services, Inc.		3,051,600			86,391
MTU Aero Engines Holding AG2		1,475,220			80,890
General Dynamics Corp.		1,145,800			78,109
KBR, Inc.		3,950,000			75,050
Grafton Group PLC, units2,4		14,962,000			62,041
Corporate Executive Board Co.4		2,304,200			52,582
Vestas Wind Systems A/S1,2		787,000			48,148
Vallourec SA2		200,000			36,351
Iron Mountain Inc.1		1,000,000			22,760
					4,957,966

FINANCIALS — 9.57%
JPMorgan Chase & Co.		16,255,000			677,346
Wells Fargo & Co.		19,513,000			526,656
U.S. Bancorp		21,952,000			494,140
Bank of America Corp.		28,000,000			421,680
Berkshire Hathaway Inc., Class A1		2,945			292,144
ACE Ltd.		5,700,000			287,280
Aon Corp.		6,700,000			256,878
SunTrust Banks, Inc.		9,250,000			187,682
Marsh & McLennan Companies, Inc.		8,060,000			177,965
AMP Ltd.2		25,571,383			154,000
Crédit Agricole SA2		8,000,000			139,367
Industrial and Commercial Bank of China Ltd., Class H2		133,400,000			109,488
New York Community Bancorp, Inc.		7,500,000			108,825
Citigroup Inc.		30,000,000			99,300
Cincinnati Financial Corp.		3,000,000			78,720
Travelers Companies, Inc.		1,500,000			74,790
American Express Co.		1,100,000			44,572
Irish Life & Permanent PLC1,2		8,435,059			39,795
People’s United Financial, Inc.		2,000,000			33,400
Bank of Ireland1,2		15,863,513			29,586
Bank of New York Mellon Corp.		1,000,000			27,970
CapitalSource Inc.		6,725,954			26,702
Marshall & Ilsley Corp.		3,189,998			17,385
Allied Irish Banks, PLC1,2		8,200,000			14,253
					4,319,924

MATERIALS — 9.03%
Rio Tinto PLC2		10,662,500			575,417
Syngenta AG2		2,025,400			566,922
Potash Corp. of Saskatchewan Inc.		2,684,100			291,225
Monsanto Co.		2,850,000			232,987
Dow Chemical Co.		8,376,600			231,445
CRH PLC2		8,219,550			222,485
Vale SA, ordinary nominative (ADR)		7,000,000			203,210
Weyerhaeuser Co.		3,583,000			154,571
E.I. du Pont de Nemours and Co.		4,565,300			153,714
Mosaic Co.		2,500,000			149,325
Praxair, Inc.		1,725,000			138,535
PPG Industries, Inc.		2,166,649			126,836
Xstrata PLC1,2		7,000,000			123,456
Newmont Mining Corp.		2,500,000			118,275
BHP Billiton Ltd.2		2,860,000			109,514
MeadWestvaco Corp.		3,750,000			107,362
Ecolab Inc.		2,200,000			98,076
Sigma-Aldrich Corp.		1,925,000			97,270
Alcoa Inc.		6,000,000			96,720
Cliffs Natural Resources Inc.		2,000,000			92,180
Grupo México, SAB de CV, Series B		30,000,000			68,854
Norsk Hydro ASA1,2		6,500,000			54,025
Vulcan Materials Co.		637,233			33,563
Buzzi Unicem SpA, nonconvertible shares2		2,640,000			27,279
					4,073,246

CONSUMER DISCRETIONARY — 7.79%
McDonald’s Corp.		11,556,400			721,582
Home Depot, Inc.		12,600,000			364,518
Starbucks Corp.1		14,000,000			322,840
Walt Disney Co.		8,000,000			258,000
Time Warner Inc.		8,500,000			247,690
Comcast Corp., Class A		12,330,000			207,884
Johnson Controls, Inc.		7,500,000			204,300
Strayer Education, Inc.4		743,100			157,901
Industria de Diseño Textil, SA2		2,500,000			154,796
Virgin Media Inc.1		8,000,000			134,640
Lowe’s Companies, Inc.		5,630,000			131,686
Shaw Communications Inc., Class B, nonvoting		6,000,000			123,420
Macy’s, Inc.		6,500,000			108,940
Marriott International, Inc., Class A		3,352,545			91,357
Nikon Corp.2		3,977,000			78,483
News Corp., Class A		3,650,000			49,968
Penn National Gaming, Inc.1		1,763,000			47,918
Toyota Motor Corp.2		1,000,000			42,041
Chipotle Mexican Grill, Inc.1		379,832			33,486
Weight Watchers International, Inc.		1,070,000			31,201
					3,512,651

CONSUMER STAPLES — 6.12%
Coca-Cola Co.		11,460,000			653,220
Philip Morris International Inc.		8,224,800			396,353
Altria Group, Inc.		14,175,100			278,257
Pernod Ricard SA2		2,473,500			212,158
PepsiCo, Inc.		3,100,000			188,480
Avon Products, Inc.		5,600,000			176,400
Procter & Gamble Co.		2,555,000			154,910
Wal-Mart Stores, Inc.		2,400,000			128,280
Unilever NV, depository receipts2		3,500,000			113,965
British American Tobacco PLC2		3,150,000			102,321
Coca-Cola Amatil Ltd.2		9,390,556			96,762
Colgate-Palmolive Co.		1,100,000			90,365
CVS/Caremark Corp.		2,500,000			80,525
Kraft Foods Inc., Class A		1,900,000			51,642
C&C Group PLC2		8,773,609			37,836
					2,761,474

UTILITIES — 4.44%
Exelon Corp.		7,760,900			379,275
GDF Suez2		6,029,861			261,407
Questar Corp.		5,000,000			207,850
Edison International		5,250,000			182,595
E.ON AG2		4,000,000			166,868
PPL Corp.		4,500,000			145,395
American Water Works Co., Inc.		5,000,000			112,050
Duke Energy Corp.		6,500,000			111,865
Electricité de France SA2		1,761,147			104,721
PG&E Corp.		2,000,000			89,300
NV Energy, Inc.		7,000,000			86,660
SUEZ Environnement Co.2		2,500,000			57,712
FPL Group, Inc.		1,050,000			55,461
Xcel Energy Inc.		1,500,000			31,830
Entergy Corp.		150,000			12,276
					2,005,265

TELECOMMUNICATION SERVICES — 2.91%
Verizon Communications Inc.		16,800,000			556,584
Telefónica, SA2		9,500,000			264,586
AT&T Inc.		7,150,000			200,414
SOFTBANK CORP.2		4,700,000			109,917
Vodafone Group PLC2		44,500,000			103,183
China Telecom Corp. Ltd., Class H2		185,180,000			76,630
					1,311,314

MISCELLANEOUS — 2.70%
Other common stocks in initial period of acquisition					1,219,520


Total common stocks (cost: $37,957,243,000)					43,006,457



Convertible securities — 0.03%

MISCELLANEOUS — 0.03%
Other convertible securities in initial period of acquisition					13,875


Total convertible securities (cost: $12,500,000)					13,875



	Principal amount
Bonds & notes — 0.01%		(000	)

MORTGAGE-BACKED OBLIGATIONS5 — 0.01%
ChaseFlex Trust, Series 2007-2, Class A-1, 0.511% 20376	$	10,392			6,360


Total bonds & notes (cost: $6,440,000)					6,360



	Principal amount			Value
Short-term securities — 4.59%		(000	)		(000	)

Freddie Mac 0.08%–1.00% due 1/20–9/14/2010	$	754,000		$	753,730
Fannie Mae 0.07%–0.25% due 1/25–8/16/2010		251,330			251,104
U.S. Treasury Bills 0.161%–0.28% due 2/4–8/26/2010		145,450			145,399
Coca-Cola Co. 0.18%–0.21% due 1/6–3/18/20103		102,850			102,841
Straight-A Funding LLC 0.18% due 2/9–3/8/20103		100,000			99,976
Federal Home Loan Bank 0.06%–0.10% due 1/8–3/29/2010		96,900			96,893
Private Export Funding Corp. 0.15%–0.22% due 2/3–3/3/20103		96,600			96,578
General Electric Capital Corp. 0.17%–0.20% due 1/11–1/20/2010		67,700			67,691
General Electric Capital Services, Inc. 0.18% due 2/22/2010		25,000			24,992
Variable Funding Capital Company LLC 0.16%–0.21% due 1/5–1/14/2010 3		77,000			76,991
Enterprise Funding Co. LLC 0.20% due 3/17/20103		35,019			35,003
Bank of America Corp. 0.23% due 3/23/2010		30,000			29,986
Park Avenue Receivables Co., LLC 0.15% due 1/4/20103		35,000			34,999
Jupiter Securitization Co., LLC 0.15%–0.21% due 1/12–1/15/20103		24,500			24,497
Procter & Gamble International Funding S.C.A. 0.21%–0.22% due 1/14–2/11/20103		50,500			50,492
Federal Farm Credit Banks 0.37% due 5/10/2010		50,000			49,973
NetJets Inc. 0.12% due 3/1/20103		41,550			41,537
Abbott Laboratories 0.11% due 2/1/20103		35,000			34,997
Medtronic Inc. 0.14% due 1/5/20103		26,300			26,300
Walt Disney Co. 0.11% due 1/20/20103		25,000			24,998


Total short-term securities (cost: $2,068,739,000)					2,068,977

Total investment securities (cost: $40,044,922,000)					45,095,669
Other assets less liabilities					22,220

Net assets				$	45,117,889

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

Investments in affiliates
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund's holdings in affiliated companies is included in "Other securities" under the respective industry sectors in the summary investment portfolio. Further details on these holdings and related transactions during the year ended December 31, 2009, appear below.

Statement of assets and liabilities
at December 31, 2009	(dollars in thousands)

Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $39,576,506)	$	44,823,145
Affiliated issuers (cost: $468,416)		272,524	$	45,095,669
Cash				53
Receivables for:
Sales of investments		1,206
Sales of fund's shares		93,673
Dividends and interest		65,285		160,164
				45,255,886
Liabilities:
Payables for:
Purchases of investments		9,801
Repurchases of fund's shares		94,633
Investment advisory services		9,688
Services provided by affiliates		17,325
Directors' deferred compensation		2,477
Other		4,073		137,997
Net assets at December 31, 2009			$	45,117,889

Net assets consist of:
Capital paid in on shares of capital stock			$	44,948,255
Undistributed net investment income				148,902
Accumulated net realized loss				(5,030,779	)
Net unrealized appreciation				5,051,511
Net assets at December 31, 2009			$	45,117,889

	(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock - 2,500,000 shares, $1.00 par value (1,379,017 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*
Class A	$	30,953,609		945,682	$	32.73
Class B		897,167		27,483		32.64
Class C		1,925,132		59,027		32.61
Class F-1		3,867,745		118,222		32.72
Class F-2		640,678		19,574		32.73
Class 529-A		723,224		22,113		32.71
Class 529-B		70,590		2,159		32.69
Class 529-C		215,199		6,583		32.69
Class 529-E		32,228		986		32.69
Class 529-F-1		27,393		838		32.69
Class R-1		97,904		3,001		32.62
Class R-2		549,800		16,861		32.61
Class R-3		1,707,176		52,252		32.67
Class R-4		1,544,555		47,260		32.68
Class R-5		1,269,294		38,764		32.74
Class R-6		596,195		18,212		32.74

(*) 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 $34.73 and $34.71, respectively.

See Notes to Financial Statements

Statement of operations
for the year ended December 31, 2009				(dollars in thousands)

Investment income:
Income:
Dividends (net of non-U.S. taxes of $28,985; also includes $4,566 from affiliates)	$	837,362
Interest		25,254		$	862,616

Fees and expenses*:
Investment advisory services		97,096
Distribution services		109,627
Transfer agent services		43,931
Administrative services		17,773
Reports to shareholders		2,527
Registration statement and prospectus		8,033
Directors' compensation		1,067
Auditing and legal		122
Custodian		1,228
State and local taxes		2
Other		2,333			283,739
Net investment income					578,877

Net realized loss and unrealized appreciation on investments and currency:
Net realized (loss) gain on:
Investments (including $25,862 net gain from affiliates)		(1,996,639	)
Currency transactions		2,385			(1,994,254	)
Net unrealized appreciation on:
Investments		12,486,938
Currency translations		1,037			12,487,975
Net realized loss and unrealized appreciation on investments and currency					10,493,721
Net increase in net assets resulting from operations				$	11,072,598

(*) 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
		2009			2008
Operations:
Net investment income	$	578,877		$	745,138
Net realized loss on investments and currency transactions		(1,994,254	)		(3,028,217	)
Net unrealized appreciation (depreciation) on investments and currency translations		12,487,975			(19,833,779	)
Net increase (decrease) in net assets resulting from operations		11,072,598			(22,116,858	)

Dividends and distributions paid to shareholders:
Dividends from net investment income		(631,972	)		(721,047	)
Distributions from net realized gain on investments		-			(316,888	)
Total dividends and distributions paid to shareholders		(631,972	)		(1,037,935	)


Net capital share transactions		587,441			6,867,554

Total increase (decrease) in net assets		11,028,067			(16,287,239	)

Net assets:
Beginning of year		34,089,822			50,377,061
End of year (including undistributed net investment income: $148,902 and $199,930, respectively)	$	45,117,889		$	34,089,822

See Notes to Financial Statements

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, R-5 and R-6	None	None	None

	(dollars in thousands)
Undistributed ordinary income				$	198,508
Post-October currency loss deferrals (realized during the period November 1, 2009, through December 31, 2009)*					(1,425	)
Capital loss carryforwards†:
Expiring 2016	$	(1,885,675	)
Expiring 2017		(3,190,744	)		(5,076,419	)
Gross unrealized appreciation on investment securities					8,389,073
Gross unrealized depreciation on investment securities					(3,338,390	)
Net unrealized appreciation on investment securities					5,050,683
Cost of investment securities					40,044,986

*These deferrals are considered incurred in the subsequent year. †The capital loss carryforwards will be used to offset any capital gains realized by the fund in future years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.

	Year ended December 31, 2009						Year ended December 31, 2008
Share class	Ordinary income		Long-term capital gains		Total distributions paid		Ordinary income		Long-term capital gains		Total distributions paid

Class A	$	458,892	$	-	$	458,892	$	557,598	$	241,668	$	799,266
Class B		8,510		-		8,510		11,804		10,319		22,123
Class C		15,323		-		15,323		16,584		13,050		29,634
Class F-1		55,986		-		55,986		60,738		21,382		82,120
Class F-2*		6,438		-		6,438		779		-		779
Class 529-A		9,809		-		9,809		9,941		4,136		14,077
Class 529-B		527		-		527		570		506		1,076
Class 529-C		1,504		-		1,504		1,515		1,251		2,766
Class 529-E		353		-		353		360		187		547
Class 529-F-1		442		-		442		424		134		558
Class R-1		765		-		765		628		389		1,017
Class R-2		3,950		-		3,950		3,842		3,036		6,878
Class R-3		19,065		-		19,065		16,994		7,755		24,749
Class R-4		21,195		-		21,195		17,908		6,485		24,393
Class R-5		23,009		-		23,009		21,362		6,590		27,952
Class R-6†		6,204		-		6,204		-		-		-
Total	$	631,972	$	-	$	631,972	$	721,047	$	316,888	$	1,037,935

*Class F-2 was offered beginning August 1, 2008.
†Class R-6 was offered beginning May 1, 2009.

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

Share class	Sales(1)				Reinvestments of dividends and distributions				Repurchases(1)						Net (decrease) increase
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended December 31, 2009
Class A	$	4,133,420		152,140	$	437,083		16,132	$	(5,318,512	)		(200,947	)	$	(748,009	)		(32,675	)
Class B		76,831		2,969		8,202		311		(341,345	)		(12,885	)		(256,312	)		(9,605	)
Class C		336,939		12,332		14,652		550		(336,935	)		(12,840	)		14,656			42
Class F-1		1,304,172		47,008		49,006		1,806		(1,278,430	)		(47,975	)		74,748			839
Class F-2		541,618		19,496		5,112		175		(107,195	)		(3,766	)		439,535			15,905
Class 529-A		125,979		4,562		9,805		361		(60,203	)		(2,232	)		75,581			2,691
Class 529-B		5,218		203		527		20		(6,215	)		(230	)		(470	)		(7	)
Class 529-C		41,294		1,498		1,503		56		(23,111	)		(855	)		19,686			699
Class 529-E		6,233		226		352		13		(2,902	)		(106	)		3,683			133
Class 529-F-1		8,008		288		442		16		(7,887	)		(265	)		563			39
Class R-1		43,940		1,610		761		28		(31,016	)		(1,070	)		13,685			568
Class R-2		170,514		6,366		3,946		146		(117,622	)		(4,361	)		56,838			2,151
Class R-3		594,024		21,683		19,055		701		(345,362	)		(12,572	)		267,717			9,812
Class R-4		564,135		20,763		21,187		777		(337,037	)		(12,025	)		248,285			9,515
Class R-5		617,507		22,851		22,633		842		(755,761	)		(28,025	)		(115,621	)		(4,332	)
Class R-6(2)		519,256		19,015		6,203		208		(32,583	)		(1,011	)		492,876			18,212
Total net increase
(decrease)	$	9,089,088		333,010	$	600,469		22,142	$	(9,102,116	)		(341,165	)	$	587,441			13,987

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(3)		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

Investment securities:	Level 1		Level 2			Level 3		Total
Common stocks:
Information technology	$	7,580,389	$	82,971	*	$	-	$	7,663,360
Energy		5,187,929		519,328	*		-		5,707,257
Health care		4,486,319		988,161	*		-		5,474,480
Industrials		4,205,339		752,627	*		-		4,957,966
Financials		3,833,435		486,489	*		-		4,319,924
Materials		2,394,148		1,679,098	*		-		4,073,246
Consumer discretionary		3,237,331		275,320	*		-		3,512,651
Consumer staples		2,198,432		563,042	*		-		2,761,474
Utilities		1,414,557		590,708	*		-		2,005,265
Telecommunication services		756,998		554,316	*		-		1,311,314
Miscellaneous		966,966		252,554	*		-		1,219,520
Convertible securities		-		13,875			-		13,875
Bonds & notes		-		6,360			-		6,360
Short-term securities		-		2,068,977			-		2,068,977
Total	$	36,261,843	$	8,833,826		$	-	$	45,095,669

(*) Includes certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading; therefore, $6,744,614,000 of investment securities were classified as Level 2 instead of Level 1.

			Income (loss) from investment operations(2)								Dividends and distributions
	Net asset value, beginning of period		Net investment income (3)		Net gains (losses) on securities (both realized and unrealized)			Total from investment operations			Dividends (from net investment income)			Distributions (from capital gains)			Total dividends and distributions			Net asset value, end of period		Total return(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 12/31/2009	$	24.98	$	.44	$	7.79		$	8.23		$	(.48	)	$	-		$	(.48	)	$	32.73		33.36	%	$	30,954		.69	%		.69	%		1.60	%
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
Class B:
Year ended 12/31/2009		24.92		.23		7.76			7.99			(.27	)		-			(.27	)		32.64		32.30			897		1.46			1.46			.85
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
Class C:
Year ended 12/31/2009		24.90		.22		7.75			7.97			(.26	)		-			(.26	)		32.61		32.26			1,925		1.48			1.48			.81
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
Class F-1:
Year ended 12/31/2009		24.97		.45		7.79			8.24			(.49	)		-			(.49	)		32.72		33.40			3,868		.67			.67			1.61
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
Class F-2:
Year ended 12/31/2009		24.98		.49		7.81			8.30			(.55	)		-			(.55	)		32.73		33.72			641		.43			.43			1.69
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 12/31/2009		24.97		.43		7.78			8.21			(.47	)		-			(.47	)		32.71		33.30			723		.73			.73			1.55
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
Class 529-B:
Year ended 12/31/2009		24.96		.20		7.77			7.97			(.24	)		-			(.24	)		32.69		32.16			71		1.55			1.55			.74
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
Class 529-C:
Year ended 12/31/2009		24.95		.20		7.78			7.98			(.24	)		-			(.24	)		32.69		32.22			215		1.55			1.55			.74
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
Class 529-E:
Year ended 12/31/2009		24.95		.34		7.78			8.12			(.38	)		-			(.38	)		32.69		32.89			32		1.04			1.04			1.24
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

Class 529-F-1:
Year ended 12/31/2009	$	24.95	$	.48	$	7.78		$	8.26		$	(.52	)	$	-		$	(.52	)	$	32.69		33.56	%	$	27		.54	%		.54	%		1.74	%
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
Class R-1:
Year ended 12/31/2009		24.90		.22		7.76			7.98			(.26	)		-			(.26	)		32.62		32.30			98		1.47			1.47			.80
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
Class R-2:
Year ended 12/31/2009		24.89		.21		7.76			7.97			(.25	)		-			(.25	)		32.61		32.22			550		1.52			1.52			.77
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
Class R-3:
Year ended 12/31/2009		24.94		.36		7.77			8.13			(.40	)		-			(.40	)		32.67		32.93			1,707		.99			.99			1.29
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
Class R-4:
Year ended 12/31/2009		24.95		.44		7.77			8.21			(.48	)		-			(.48	)		32.68		33.31			1,545		.69			.69			1.58
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
Class R-5:
Year ended 12/31/2009		24.99		.52		7.79			8.31			(.56	)		-			(.56	)		32.74		33.75			1,269		.39			.39			1.92
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
Class R-6:
Period from 5/1/2009 to 12/31/2009		25.63		.37		7.17			7.54			(.43	)		-			(.43	)		32.74		29.60			596		.35	(6)		.35	(6)		1.87	(6)

	(1) Name and Principal Business Address	(2) Positions and Offices with Underwriter	(3) Positions and Offices with Registrant
LAO	David L. Abzug	Vice President	None
IRV	Laurie M. Allen	Senior 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
IRV	Carl R. Bauer	Vice President	None
LAO	Michelle A. Bergeron	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	Vice President	None
LAO	Bill Brady	Director, 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
LAO	Steven Calabria	Vice President	None
LAO	Thomas E. Callahan	Regional Vice President	None
LAO	Damian F. Carroll	Director, Vice President	None
LAO	James D. Carter	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 Intermediary Relations	None
LAO	David D. Charlton	Director, Senior Vice President and Director of Marketing	None
LAO	Thomas M. Charon	Vice President	None
LAO	Paul A. Cieslik	Vice President	None
LAO	Kevin G. Clifford	Director, President and Chief Executive Officer	None
LAO	Ruth M. Collier	Senior Vice President	None
LAO	Charles H. Cote	Regional Vice President	None
SNO	Kathleen D. Cox	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	William F. Daugherty	Senior Vice President	None
LAO	Peter J. Deavan	Regional Vice President	None
LAO	Daniel J. Delianedis	Senior Vice President	None
LAO	James W. DeLouise	Assistant Vice President	None
LAO	James A. DePerno, Jr.	Senior Vice President	None
LAO	Bruce L. DePriester	Director, Senior Vice President, Treasurer and Controller	None
LAO	Dianne M. Dexter	Assistant Vice President	None
LAO	Thomas J. Dickson	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	Timothy L. Ellis	Senior 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
SNO	Michael J. Franchella	Assistant Vice President	None
LAO	Charles L. Freadhoff	Vice President	None
LAO	Daniel B. Frick	Senior Vice President	None
LAO	J. Christopher Gies	Senior Vice President	None
LAO	David M. Givner	Secretary	None
LAO	Jack E. Goldin	Vice President	None
LAO	Earl C. Gottschalk	Vice President	None
LAO	Jeffrey J. Greiner	Director, Senior Vice President	None
LAO	Eric M. Grey	Senior 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
LAO	Derek S. Hansen	Vice President	None
LAO	Robert J. Hartig, Jr.	Vice President	None
LAO	Craig W. Hartigan	Regional Vice President	None
LAO	Linda Molnar Hines	Vice President	None
LAO	Russell K. Holliday	Vice President	None
LAO	Heidi Horwitz-Marcus	Vice President	None
LAO	Kevin B. Hughes	Vice President	None
LAO	Marc Ialeggio	Vice President	None
HRO	Jill Jackson-Chavis	Vice President	None
IND	David K. Jacocks	Assistant Vice President	None
LAO	Linda Johnson	Vice President	None
GVO-1	Joanna F. Jonsson	Director	None
LAO	Marc J. Kaplan	Vice President	None
LAO	John P. Keating	Senior Vice President	None
LAO	Brian G. Kelly	Vice President	None
LAO	Ryan C. Kidwell	Regional Vice President	None
LAO	Mark Kistler	Regional Vice President	None
NYO	Dorothy Klock	Vice President	None
IRV	Elizabeth K. Koster	Vice President	None
LAO	Christopher F. Lanzafame	Regional Vice President	None
IRV	Laura Lavery	Vice President	None
LAO	R. Andrew LeBlanc	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	Lorin E. Liesy	Vice President	None
LAO	Louis K. Linquata	Vice President	None
LAO	Brendan T. Mahoney	Senior Vice President	None
LAO	Nathan G. Mains	Regional Vice President	None
LAO	Stephen A. Malbasa	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	Joseph A. McCreesh, III	Regional Vice President	None
LAO	Will McKenna	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	Vice President	None
LAO	Andrew J. Moscardini	Vice President	None
LAO	Brian D. Munson	Regional Vice President	None
LAO	Jon Christian Nicolazzo	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	W. Burke Patterson, Jr.	Vice President	None
LAO	Gary A. Peace	Senior Vice President	None
LAO	Samuel W. Perry	Vice President	None
LAO	David K. Petzke	Senior Vice President	None
IRV	John H. Phelan, Jr.	Director	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
SNO	John P. Raney	Assistant Vice President	None
LAO	James P. Rayburn	Vice President	None
LAO	Rene M. Reincke	Vice President	None
LAO	Steven J. Reitman	Senior Vice President	None
LAO	Jeffrey Robinson	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	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	Paul V. Santoro	Vice President	None
LAO	Joseph D. Scarpitti	Senior Vice President	None
IRV	MaryAnn Scarsone	Assistant 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	James J. Sewell III	Regional Vice President	None
LAO	Arthur M. Sgroi	Vice President	None
LAO	Steven D. Shackelford	Regional Vice President	None
LAO	Michael J. Sheldon	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	Connie F. Sjursen	Vice President	None
LAO	Jerry L. Slater	Senior Vice President	None
SNO	Stacy D. Smolka	Assistant Vice President	None
LAO	J. Eric Snively	Vice President	None
LAO	Therese L. Soullier	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	Craig R. Strauser	Senior Vice President	None
LAO	Libby J. Syth	Vice President	None
LAO	Drew W. Taylor	Senior 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	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	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
LAO	Jason P. Young	Vice President	None
LAO	Jonathan A. Young	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

	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*	Chairman of the Board (Independent and Non-Executive)
	Louise H. Bryson*	Director
	Robert J. Denison*	Director
	Mary Anne Dolan*	Director
	Robert A. Fox*	Director
	John G. Freund*	Director
	Leonade D. Jones*	Director
	William H. Kling*	Director
	John G. McDonald*	Director
	Gail L. Neale*	Director
	/s/ Dina N. Perry	President and Director
	(Dina N. Perry)
	Henry E. Riggs*	Director
	/s/ James F. Rothenberg	Vice Chairman
	(James F. Rothenberg)
	Christopher E. Stone*	Director
	/s/ Patrick F. Quan
	(Patrick F. Quan, Attorney-in-Fact, Powers of Attorney enclosed)

FUNDAMENTAL INVESTORS, INC.	CAPITAL RESEARCH AND
	MANAGEMENT COMPANY


By /s/ Paul G. Haaga, Jr.	By /s/ James F. Rothenberg
Paul G. Haaga, Jr.	James F. Rothenberg, Chairman and
Executive Vice President and	Principal Executive Officer
Principal Executive Officer


By /s/ Patrick F. Quan	By /s/ Michael J. Downer
Patrick F. Quan	Michael J. Downer
Secretary	Senior Vice President and Secretary

Paragraph Title	Page No
1. Definitions	1
2. Introduction	4

3. Plan Oversight; Administration and Amendment	4
3.1. Plan Oversight and Operation	4
3.2. Plan Interpretation and Administration	4
3.3. Plan Amendment	5
3.4. Plan Termination	5

4. Election to Defer Payments	5
4.1. Election to Defer	5
4.2. Current Independent Board Members	5
4.2.a. Newly Elected or Appointed Independent Board Members	5
4.3. Modification or Revocation of Election to Defer	5

5. Beneficiary Designation	6

6. Deferred Payment Account	6
6.1. Crediting Amounts	6
6.2. Change of Investment Designation	6
6.3. Exchange Requests	6
6.4. Plan Participants Serving on Money Market Fund Boards	7

7. Timing and Manner of Payments	7
7.1. Timing of Payments	7
7.2. Manner of Payment – Lump Sum	7
7.3. Alternative Payment Methods	7
7.4. Death of Plan Participant	8
7.5. Disability of Plan Participant	8
7.6. Unforeseeable Emergency	8
7.7. Modification or Revocation for Post-2004 Deferrals	8
7.7.a. Special Transition Rule	8
7.8. Modification or Revocation for Pre-2005 Deferrals	9

8. Miscellaneous	9

Signature Pages
Exhibits A through D

LIST OF PARTICIPATING FUNDS	ABBREVIATION

AMCAP Fund, Inc.	AMCAP
American Balanced Fund, Inc.	AMBAL
American Funds Insurance Series	AFIS
American Funds Money Market Fund	MMF
American Funds Short-Term Tax-Exempt Bond Fund	STEX
American Funds Target Date Retirement Series	AFTD
American High-Income Municipal Bond Fund, Inc.	AHIM
American High-Income Trust	AHIT
American Mutual Fund, Inc.	AMF
The Bond Fund of America, Inc.	BFA
Capital Income Builder, Inc.	CIB
Capital World Bond Fund, Inc.	WBF
Capital World Growth and Income Fund, Inc.	WGI
EuroPacific Growth Fund	EUPAC
Fundamental Investors, Inc.	FI
The Growth Fund of America, Inc.	GFA
The Income Fund of America, Inc.	IFA
Intermediate Bond Fund of America	IBFA
International Growth and Income Fund, Inc.	IGI
The Investment Company of America	ICA
Limited Term Tax-Exempt Bond Fund of America	LTEX
The New Economy Fund	NEF
New Perspective Fund, Inc.	NPF
New World Fund, Inc.	NWF
SMALLCAP World Fund, Inc.	SCWF
Short-Term Bond Fund of America, Inc.	STBF
The Tax-Exempt Bond Fund of America, Inc.	TEBF
The Tax-Exempt Fund of California	TEFCA
U.S. Government Securities Fund	GVT

I elect to defer the following portion of my compensation from the funds managed by CRMC and designated above:1	· Annual retainer as an Independent Board Member: % · Board and Committee meeting fees as an Independent Board Member:% I understand that, to be effective, this election must be filed with the Administrator of the Plan prior to the first day of the first calendar year to which it applies, except as provided in Section 4.2.a. of the Plan. Once effective, this election will continue until revoked or modified in accordance with the terms of the Plan.
I hereby specify that I shall be entitled to payment of my deferred compensation upon the occurrence of either Permissible Payment Event indicated in the corresponding box (check one), or any other Permissible Payment Event:	q The date on which I am no longer an Independent Board Member of any fund managed by CRMC; or q The following date which is objectively determinable at the time my compensation is deferred and is at least twenty four months past the date of the first deferral election made by me (cannot be an “event”):
I hereby specify that payments from my Deferred Payment Account(s) for the fund(s) listed above be made beginning within thirty (30) days of the close of the calendar quarter containing the Permissible Payment Event (outlined above):	q In a single lump sum payment; OR q In annual q In quarterly variable dollar installment payments over a period of q 5 years q 10 years q 15 years q years (not to exceed 30); OR q In annual q In quarterly fixed dollar payments of $ each; however, in no event shall any installment payment exceed the balance credited to my Deferred Payment Account on the date immediately preceding the date of payment.

FUNDAMENTAL INVESTORS, INC.	AMERICAN FUNDS SERVICE
	COMPANY

By: /s/ Patrick F. Quan	By: /s/ Angela M. Mitchell

Name: Patrick F. Quan	Name: Angela M. Mitchell
Title: Secretary	Title: Secretary
Date: January 2, 2010	Date: January 2, 2010