Investment Company of America

0000051931-07-000091.txt : 20070228 0000051931-07-000091.hdr.sgml : 20070228 20070228133317 ACCESSION NUMBER: 0000051931-07-000091 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20070228 DATE AS OF CHANGE: 20070228 EFFECTIVENESS DATE: 20070301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESTMENT CO OF AMERICA CENTRAL INDEX KEY: 0000051931 IRS NUMBER: 951426645 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00116 FILM NUMBER: 07656596 BUSINESS ADDRESS: STREET 1: 333 S HOPE ST - 55TH FL (TODP) CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: 213-486-9200 MAIL ADDRESS: STREET 1: 333 S HOPE ST - 55TH FL (TODP) CITY: LOS ANGELES STATE: CA ZIP: 90071 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESTMENT CO OF AMERICA CENTRAL INDEX KEY: 0000051931 IRS NUMBER: 951426645 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-10811 FILM NUMBER: 07656597 BUSINESS ADDRESS: STREET 1: 333 S HOPE ST - 55TH FL (TODP) CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: 213-486-9200 MAIL ADDRESS: STREET 1: 333 S HOPE ST - 55TH FL (TODP) CITY: LOS ANGELES STATE: CA ZIP: 90071

0000051931 S000009597 INVESTMENT CO OF AMERICA

C000026214 Class A AIVSX

C000026215 Class R-1 RICAX

C000026216 Class R-2 RICBX

C000026217 Class R-3 RICCX

C000026218 Class R-4 RICEX

C000026219 Class R-5 RICFX

C000026220 Class B AICBX

C000026221 Class C AICCX

C000026222 Class F AICFX

C000026223 Class 529-A CICAX

C000026224 Class 529-B CICBX

C000026225 Class 529-C CICCX

C000026226 Class 529-E CICEX

C000026227 Class 529-F CICFX

485BPOS 1 ica485bpos.htm INVESTMENT COMPANY OF AMERICA Investment Company of America

SEC File Nos. 002-10811

811-00116

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM N-1A

Registration Statement

Under

the Securities Act of 1933

Post-Effective Amendment No. 113

and

Registration Statement

Under

The Investment Company Act of 1940

Amendment No. 37

__________________

THE INVESTMENT COMPANY OF AMERICA

(Exact Name of Registrant as Specified in Charter)

333 South Hope Street

Los Angeles, California 90071-1406

(Address of Principal Executive Offices)

Registrant's telephone number, including area code:

(213) 486-9200

__________________

Vincent P. Corti

Capital Research and Management Company

333 South Hope Street

Los Angeles, California 90071-1406

(Name and Address of Agent for Service)

__________________

Copies to:

Eric A.S. Richards

O'Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071-2899

(Counsel for the Registrant)

__________________

Approximate date of proposed public offering:

It is proposed that this filing become effective on March 1, 2007, pursuant to paragraph (b) of rule 485.

<PAGE>

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

The Investment
Company of America/(R)/

PROSPECTUS

March 1, 2007

TABLE OF CONTENTS

1 Risk/Return summary
5 Fees and expenses of the fund
7 Investment objectives, strategies and risks
11 Management and organization
15 Shareholder information
16 Choosing a share class
18 Purchase and exchange of shares
22 Sales charges
25 Sales charge reductions and waivers
28 Rollovers from retirement plans to IRAs
28 Plans of distribution
29 Other compensation to dealers
29 How to sell shares
31 Distributions and taxes
32 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>

[This page was intentionally left blank.]

<PAGE>

Risk/Return summary

The fund seeks to make your investment grow and provide you with income over
time by investing primarily in common stocks that offer growth and dividend
potential.

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

The fund's investments are limited to securities of companies that are included
on its eligible list. Changes to the eligible list are reviewed and authorized
by the fund's board of directors at the recommendation of Capital Research and
Management Company, the fund's investment adviser.

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

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

The Investment Company of America / Prospectus

<PAGE>

HISTORICAL INVESTMENT RESULTS

The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 4 shows how the fund's
average annual total returns for various periods compare with different broad
measures of market performance. This information provides some indication of the
risks of investing in the fund. All fund results reflect the reinvestment of
dividends and capital gain distributions, if any. Unless otherwise noted, fund
results reflect any fee waivers and/or expense reimbursements in effect during
the period presented. Past results (before and after taxes) are not predictive
of future results.

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES

(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1997 29.81
1998 22.93
1999 16.55
2000 3.84
2001 -4.59
2002 -14.47
2003 26.30
2004 9.78
2005 6.87
2006 15.94

[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 17.34% (quarter ended December 31, 1998)
LOWEST -14.51% (quarter ended September 30, 2002)

The Investment Company of America / Prospectus

<PAGE>

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

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

. Class B share results reflect the applicable contingent deferred sales
charge. For example, results for the one-year period shown reflect a
contingent deferred sales charge of 5%. These charges begin to decline one
year after purchase and are eliminated six years after purchase.

. Class C share results for the one-year period shown reflect a contingent
deferred sales charge of 1%, which only applies if shares are sold within one
year of purchase.

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

Results would be higher if calculated without sales charges. The references
above to Class A, B, C or F sales charges also refer to the corresponding Class
529-A, 529-B, 529-C or 529-F sales charges.

The Investment Results table shows the fund's results on both a pretax and
after-tax basis, as required by Securities and Exchange Commission rules.
After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. Total returns shown "after taxes on distributions"
reflect the effect of taxes on distributions (for example, dividends or capital
gain distributions) by the fund. Total returns shown "after taxes on
distributions and sale of fund shares" assume that you sold your fund shares at
the end of the particular time period and, as a result, reflect the effect of
both taxes on distributions by the fund and taxes on any gain or loss realized
upon the sale of the shares. 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 BELOW. IN ADDITION, AFTER-TAX RETURNS MAY NOT
BE 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.

Unlike the Investment Results table on page 4, the Additional Investment Results
table on page 9 reflects the fund's results calculated without sales charges.

The Investment Company of America / Prospectus

<PAGE>

INVESTMENT RESULTS (WITH MAXIMUM SALES CHARGES)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
- -------------------------------------------------------------------------------

CLASS A -- FIRST SOLD 1/1/34
Before taxes 9.28% 6.73% 9.82% 12.82%
After taxes on distributions 7.99 5.89 8.23 N/A
After taxes on distributions and 7.72 5.58 7.93 N/A
sale of fund shares
- -------------------------------------------------------------------------------

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

CLASS B -- FIRST SOLD 3/15/00
Before taxes 10.04% 6.85% 5.25%
- ------------------------------------------------------------------
CLASS C -- FIRST SOLD 3/15/01
Before taxes 14.00 7.09 6.05
- ------------------------------------------------------------------
CLASS F -- FIRST SOLD 3/15/01
Before taxes 15.95 7.92 6.88
- ------------------------------------------------------------------
CLASS 529-A -- FIRST SOLD 2/15/02
Before taxes 9.21 N/A 7.31
- ------------------------------------------------------------------
CLASS 529-B -- FIRST SOLD 2/15/02
Before taxes 9.90 N/A 7.38
- ------------------------------------------------------------------
CLASS 529-C -- FIRST SOLD 2/19/02
Before taxes 13.94 N/A 8.06
- ------------------------------------------------------------------
CLASS 529-E -- FIRST SOLD 3/1/02
Before taxes 15.52 N/A 7.84
- ------------------------------------------------------------------
CLASS 529-F -- FIRST SOLD 9/16/02
Before taxes 16.10 N/A 13.34
- ------------------------------------------------------------------

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

INDEXES (BEFORE TAXES)
S&P 500/3/ 15.78% 6.19% 8.42% 11.33%
Lipper Growth and Income Funds 15.57 7.59 8.01 N/A
Index/4/
Class A annualized 30-day yield at December 31, 2006: 2.04%/5/
(For current yield information, please call American FundsLine at 800/325-3590.)

/1/ Lifetime results for each share class are measured from the date the share
class was first sold.

/2/ Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold. The composition of each index may vary over time.

/3/ Standard & Poor's 500 Composite Index is a market capitalization-weighted
index based on the average weighted performance of 500 widely held common
stocks. This index is unmanaged and includes reinvested dividends and/or
distributions, but does not reflect sales charges, commissions, expenses or
taxes.
/4/ Lipper Growth and 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 sales charges or taxes. This index was not in existence as of the
date the fund became available; therefore, lifetime results are not shown.

/5/ Reflects a fee waiver (2.02% without the waiver) as described in the Annual
Fund Operating Expenses table under "Fees and expenses of the fund."

The Investment Company of America / Prospectus

<PAGE>

Fees and expenses of the fund

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

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS A/1/ CLASS B/1/ CLASS C/1/ CLASS 529-E/2/ CLASS F/1/,/3/
- --------------------------------------------------------------------------------------------

Maximum initial sales
charge on purchases 5.75%/4/ none none none none
(as a percentage of
offering price)
- --------------------------------------------------------------------------------------------
Maximum sales charge none none none none none
on reinvested
dividends
- --------------------------------------------------------------------------------------------
Maximum contingent none/5/ 5.00%/6/ 1.00%/7/ none none
deferred sales charge
- --------------------------------------------------------------------------------------------
Redemption or none none none none none
exchange fees

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
CLASS A CLASS B CLASS C CLASS F
- -------------------------------------------------------------------------------

Management fees/8/ 0.24% 0.24% 0.24% 0.24%
- -------------------------------------------------------------------------------
Distribution and/or service 0.23 1.00 1.00 0.25
(12b-1) fees/9/
- -------------------------------------------------------------------------------
Other expenses/10/ 0.10 0.10 0.17 0.11
- -------------------------------------------------------------------------------
Total annual fund operating 0.57 1.34 1.41 0.60
expenses/8/
CLASS CLASS CLASS CLASS CLASS
529-A 529-B 529-C 529-E 529-F
- -------------------------------------------------------------------------------
Management fees/8/ 0.24% 0.24% 0.24% 0.24% 0.24%
- -------------------------------------------------------------------------------
Distribution and/or service 0.20 1.00 1.00 0.50 --
(12b-1) fees/11/
- -------------------------------------------------------------------------------
Other expenses/10/,/12/ 0.20 0.23 0.22 0.21 0.21
- -------------------------------------------------------------------------------
Total annual fund operating 0.64 1.47 1.46 0.95 0.45
expenses/8/

/1/ Includes corresponding 529 share class. Accounts holding these 529 shares are
subject to a $10 account setup fee and an annual $10 account maintenance fee,
which are not reflected in this table.
/2/ Available only to employer-sponsored 529 plans. Accounts holding these shares
are subject to a $10 account setup fee and an annual $10 account maintenance
fee, which are not reflected in this table.
/3/ Class F and 529-F 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.
/4/ The initial sales charge is reduced for purchases of $25,000 or more and
eliminated for purchases of $1 million or more.
/5/ A contingent deferred sales charge of 1.00% applies on certain redemptions
made within one year following purchases of $1 million or more made without an
initial sales charge.
/6/ The contingent deferred sales charge is reduced one year after purchase and
eliminated six years after purchase.
/7/ The contingent deferred sales charge is eliminated one year after purchase.
/8/ The fund's investment adviser is currently waiving 10% of its management fee.
The waiver may be discontinued at any time in consultation with the fund's
board, but it is expected to continue at this level until further review. The
fund's investment adviser and board intend to review the waiver as
circumstances warrant. Management fees and total expenses do not reflect any
waiver. Information regarding the effect of any waiver on total annual fund
operating expenses can be found in the Financial Highlights table in this
prospectus and in the fund's annual report.
/9/ Class A and F 12b-1 fees may not exceed .25% and .50%, respectively, of each
class' average net assets annually. Class B and C 12b-1 fees may not exceed
1.00% of each class' average net assets annually.

/10/ Includes 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 will vary depending on the share class and
services provided, and typically ranges from $3 to $19 per account.

/11/ Class 529-A and 529-F 12b-1 fees may not exceed .50% of each class' average
net assets annually. Class 529-B and 529-C 12b-1 fees may not exceed 1.00% of
each class' average net assets annually. Class 529-E 12b-1 fees may not exceed
.75% of the class' average net assets annually.
/12/ Includes .10% paid to a state or states for oversight and administrative
services.

The Investment Company of America / Prospectus

<PAGE>

EXAMPLES

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

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

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

Class A/1/ $630 $747 $ 875 $1,248
- ---------------------------------------------------------------------------------
Class B -- assuming redemption/2/ 636 825 934 1,401
- ---------------------------------------------------------------------------------
Class B -- assuming no redemption/3/ 136 425 734 1,401
- ---------------------------------------------------------------------------------
Class C -- assuming redemption/4/ 244 446 771 1,691
- ---------------------------------------------------------------------------------
Class C -- assuming no redemption 144 446 771 1,691
- ---------------------------------------------------------------------------------
Class F -- excluding intermediary fees/5/ 61 192 335 750
- ---------------------------------------------------------------------------------
Class 529-A/1/,/6/ 657 808 970 1,433
- ---------------------------------------------------------------------------------
Class 529-B -- assuming redemption/2/,/6/ 669 904 1,060 1,634
- ---------------------------------------------------------------------------------
Class 529-B -- assuming no redemption/3/,/6/ 169 504 860 1,634
- ---------------------------------------------------------------------------------
Class 529-C -- assuming redemption/4/,/6/ 268 501 855 1,846
- ---------------------------------------------------------------------------------
Class 529-C -- assuming no redemption/6/ 168 501 855 1,846
- ---------------------------------------------------------------------------------
Class 529-E/6/ 117 342 584 1,270
- ---------------------------------------------------------------------------------
Class 529-F -- excluding intermediary 66 184 311 674
fees/5/,/6/

/1/ Reflects the maximum initial sales charge in the first year.
/2/ Reflects applicable contingent deferred sales charges through year six and
Class A or 529-A expenses for years nine and 10 because Class B and 529-B
shares automatically convert to Class A and 529-A shares, respectively, after
eight years.
/3/ Reflects Class A or 529-A expenses for years nine and 10 because Class B and
529-B shares automatically convert to Class A and 529-A shares, respectively,
after eight years.
/4/ Reflects a contingent deferred sales charge in the first year.
/5/ Does not include fees charged by financial intermediaries, which are
independent of fund expenses and will increase the overall cost of your
investment. Intermediary fees typically range from .75% to 1.50% of assets
annually depending on the services offered.

/6/ Reflects an initial $10 account setup fee and an annual $10 account
maintenance fee.

The Investment Company of America / Prospectus

<PAGE>

Investment objectives, strategies and risks

The fund's investment objectives are to achieve long-term growth of capital and
income. The fund strives to accomplish these objectives through extensive U.S.
and global research, careful selection and broad diversification. In the
selection of securities for investment, potential for capital appreciation and
future dividends are given more weight than current yield. The fund invests
primarily in common stocks. The fund's investments are limited to securities of
companies that are included on its eligible list, which consists of securities
deemed suitable by the fund's investment adviser in light of the fund's
investment objectives and policies. Securities are added to, or deleted from,
the eligible list by the board of directors, after reviewing and acting upon the
recommendations of the investment adviser.

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

The fund may invest up to 15% of its assets, at the time of purchase, in
securities of issuers domiciled outside the United States and not included in
Standard & Poor's 500 Composite Index. Investments in securities issued by
entities based outside the United States may be subject to the risks described
above to a greater extent and may also be affected by currency fluctuation and
controls; different accounting, auditing, financial reporting and legal
standards and practices in some countries; expropriation; changes in tax policy;
greater market volatility; differing securities market structures; higher
transaction costs; and various administrative difficulties, such as delays in
clearing and settling portfolio transactions or in receiving payment of
dividends.

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

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

The Investment Company of America / Prospectus

<PAGE>

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.

OTHER IMPORTANT INVESTMENT PRACTICES

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

The Investment Company of America / Prospectus

<PAGE>

ADDITIONAL INVESTMENT RESULTS
Unlike the Investment Results table on page 4, the table below reflects the
fund's results calculated without sales charges.

ADDITIONAL INVESTMENT RESULTS (WITHOUT SALES CHARGES)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
- -------------------------------------------------------------------------------

CLASS A -- FIRST SOLD 1/1/34
Before taxes 15.94% 8.00% 10.47% 12.91%
After taxes on distributions 14.57 7.15 8.87 N/A
After taxes on distributions and 12.15 6.70 8.53 N/A
sale of fund shares
- -------------------------------------------------------------------------------

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

CLASS B -- FIRST SOLD 3/15/00
Before taxes 15.04% 7.15% 5.25%
- ------------------------------------------------------------------
CLASS C -- FIRST SOLD 3/15/01
Before taxes 15.00 7.09 6.05
- ------------------------------------------------------------------
CLASS F -- FIRST SOLD 3/15/01
Before taxes 15.95 7.92 6.88
- ------------------------------------------------------------------
CLASS 529-A -- FIRST SOLD 2/15/02
Before taxes 15.87 N/A 8.62
- ------------------------------------------------------------------
CLASS 529-B -- FIRST SOLD 2/15/02
Before taxes 14.90 N/A 7.69
- ------------------------------------------------------------------
CLASS 529-C -- FIRST SOLD 2/19/02
Before taxes 14.94 N/A 8.06
- ------------------------------------------------------------------
CLASS 529-E -- FIRST SOLD 3/1/02
Before taxes 15.52 N/A 7.84
- ------------------------------------------------------------------
CLASS 529-F -- FIRST SOLD 9/16/02
Before taxes 16.10 N/A 13.34
- ------------------------------------------------------------------

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

INDEXES (BEFORE TAXES)
S&P 500/3/ 15.78% 6.19% 8.42% 11.33%
Lipper Growth and Income 15.57 7.59 8.01 N/A
Funds Index/4/
Class A distribution rate at December 31, 2006: 2.08%/5/
(For current distribution rate information, please call American FundsLine at 800/325-3590.)

/1/ Lifetime results for each share class are measured from the date the share
class was first sold.

/2/ Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold. The composition of each index may vary over time.

The Investment Company of America / Prospectus

<PAGE>

INDUSTRY SECTOR DIVERSIFICATION AS OF DECEMBER 31, 2006 (percent of net assets)

[begin pie chart]

Information technology 13.83%
Financials 12.27%
Industrials 9.71%
Consumer staples 9.39%
Health care 8.88%
Convertible securities 0.48%
Other industries 30.24%
Short-term securities & other assets less liabilities 15.20%

[end pie chart]

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

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

The Investment Company of America / 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 135 South State
College Boulevard, Brea, California 92821. Capital Research and Management
Company manages the investment portfolio and business affairs of the fund. The
total management fee paid by the fund, as a percentage of average net assets,
for the previous fiscal year appears in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." A discussion regarding the basis for the
approval of the fund's investment advisory and service agreement by the fund's
board of directors is contained in the fund's semi-annual report to shareholders
for the fiscal period ended June 30, 2006.

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. The investment adviser strives to obtain best execution
for the fund's portfolio transactions, taking into account a variety of factors
to produce the most favorable total price reasonably attainable under the
circumstances. These factors include the size and type of transaction, the cost
and quality of executions, and the broker-dealer's ability to offer liquidity
and anonymity. For example, with respect to equity transactions, the fund does
not consider the investment adviser as having an obligation to obtain the lowest
available commission rate to the exclusion of price, service and qualitative
considerations. Subject to the considerations outlined above, 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 who have provided investment research and/or brokerage services to the
investment adviser. In placing orders for the fund's portfolio transactions, the
investment adviser does not commit to any specific amount of business with any
particular broker-dealer. 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. However, when the
investment adviser places orders for the fund's portfolio transactions, it does
not give any consideration to whether a broker-dealer has sold shares of the
funds managed by the investment adviser.

The Investment Company of America / Prospectus

<PAGE>

PORTFOLIO HOLDINGS

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

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

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
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.

The Investment Company of America / Prospectus

<PAGE>

The primary individual portfolio counselors for The Investment Company of
America are:

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

R. MICHAEL SHANAHAN 16 years Chairman Emeritus, Serves as an equity
Vice Chairman of the (plus 7 years of Capital Research and portfolio counselor
Board prior experience Management Company
as an
investment analyst Investment professional
for the fund) for 42 years, all with
Capital Research and
Management Company or
affiliate
- -----------------------------------------------------------------------------------------------
JAMES B. LOVELACE 15 years Senior Vice President Serves as an equity
Senior Vice President (plus 3 years of and Director, Capital portfolio counselor
and Director prior experience Research and Management
as an Company
investment analyst
for the fund) Investment professional
for 25 years, all with
Capital Research and
Management Company or
affiliate
- -----------------------------------------------------------------------------------------------
DONALD D. O'NEAL 15 years Senior Vice President Serves as an equity
Senior Vice President (plus 4 years of and Director, Capital portfolio counselor
and Director prior experience Research and Management
as an Company
investment analyst
for the fund) Investment professional
for 22 years, all with
Capital Research and
Management Company or
affiliate
- -----------------------------------------------------------------------------------------------
JOYCE E. GORDON 6 years Senior Vice President Serves as an equity
Senior Vice President (plus 12 years of and Director, Capital portfolio counselor
prior experience Research and Management
as an Company
investment analyst
for the fund) Investment professional
for 27 years, all with
Capital Research and
Management Company or
affiliate
- -----------------------------------------------------------------------------------------------

The Investment Company of America / Prospectus

<PAGE>

J. DALE HARVEY 1 year Vice President, Capital Serves as an equity
Vice President Research and Management portfolio counselor
Company

Investment professional
for 18 years in total;
16 years with Capital
Research and Management
Company or affiliate
- -----------------------------------------------------------------------------------------------
JAMES E. DRASDO 20 years Senior Vice President Serves as an equity
(plus 9 years of and Director, Capital portfolio counselor
prior experience Research and Management
as an Company
investment analyst
for the fund) Investment professional
for 35 years in total;
30 years with Capital
Research and Management
Company or affiliate
- -----------------------------------------------------------------------------------------------
DARCY B. KOPCHO 1 year Senior Vice President Serves as an equity
and Director, Capital portfolio counselor
Research and Management
Company

Investment professional
for 27 years in total;
19 years with Capital
Research and Management
Company or affiliate
- -----------------------------------------------------------------------------------------------
C. ROSS SAPPENFIELD 7 years Vice President, Capital Serves as an equity
(plus 6 years of Research and Management portfolio counselor
prior experience Company
as an
investment analyst Investment professional
for the fund) for 15 years, all 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 can be found in the
statement of additional information.

The Investment Company of America / Prospectus

<PAGE>

Shareholder information

SHAREHOLDER SERVICES

American Funds Service Company, the fund's transfer agent, offers a wide range
of services that you can use to alter your investment program should your needs
and circumstances change. These services may be terminated or modified at any
time upon 60 days' written notice. For your convenience, American Funds Service
Company has four service centers across the country.

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]

Western Western Central Eastern Central Eastern
service center service center service center service center
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 25065 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Santa Ana, San Antonio, Texas Indianapolis, Indiana Norfolk, Virginia
California 78265-9522 46206-6007 23501-2280
92799-5065 Fax: 210/474-4352 Fax: 317/735-6636 Fax: 757/670-4761
Fax: 714/671-7133

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 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.

The Investment Company of America / Prospectus

<PAGE>

Choosing a share class

The fund offers different classes of shares through this prospectus. Class A, B,
C and F 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.

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 shares are structured
similarly to the corresponding Class A, B, C and F 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 in 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);

.. availability of share classes:

-- Class B and 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, employer-sponsored 403(b) plans, and money
purchase pension and profit-sharing plans; and

-- Class F and 529-F 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 IN THE FOLLOWING PAGES TO CLASS A, B, C OR F
SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR 529-F
SHARES.

The Investment Company of America / 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 529-A shares, may not exceed
.50% annually)
Dividends generally higher than other classes due to lower
annual expenses, but may be lower than F shares,
depending on relative expenses
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 A and F shares due to higher
12b-1 fees and other expenses, but higher than C
shares due to lower other expenses
Purchase maximum see the discussion regarding purchase minimums and
maximums in "Purchase and exchange of shares"
Conversion automatic conversion to A or 529-A shares after eight
years, 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 F shares after 10 years,
reducing future annual expenses (529-C shares will not
convert to 529-F 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 529-B and 529-C shares due to
lower 12b-1 fees, but lower than 529-A and 529-F
shares due to higher 12b-1 fees
Purchase maximum none
Conversion none
CLASS F 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 B and C shares due to lower
12b-1 fees, and may be higher than A shares, depending
on relative expenses
Purchase maximum none
Conversion none

The Investment Company of America / Prospectus

<PAGE>

Purchase and exchange of shares

THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND AND AMERICAN FUNDS
DISTRIBUTORS, 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.

PURCHASE OF CLASS A, B AND C SHARES

You may generally open an account and purchase Class A, B 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.

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.

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 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.

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 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 SHARES TO THE CORRESPONDING 529 SHARE CLASS, PARTICULARLY IN THE CASE OF
UNIFORM GIFTS TO MINORS ACT OR

The Investment Company of America / Prospectus

<PAGE>

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 funds 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" for information
regarding electronic exchanges.

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,
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.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of directors has adopted certain policies
and procedures with respect to frequent purchases and redemptions of fund
shares. Under the fund's "purchase blocking policy," any shareholder redeeming
shares (including redemptions that are part of an exchange transaction) having a
value of $5,000 or more from the fund will be precluded from investing in the
fund (including investments that are part of an exchange transaction) for 30
calendar days after the redemption transaction. This prohibition will not apply
to redemptions by shareholders whose shares are held on the books of third-party
intermediaries (such as investment dealers holding shareholder accounts in
street name, retirement plan recordkeepers, insurance company separate accounts
and bank trust companies) that have not adopted procedures to implement this
policy. American Funds Service Company will work with intermediaries to develop
such procedures or other procedures that American Funds Service Company
determines are reasonably designed to achieve the objective of the purchase
blocking policy. At the time the intermediaries adopt these procedures,
shareholders whose accounts are on the books of such intermediaries will be
subject to this purchase blocking policy or another frequent trading policy that
is reasonably designed to achieve the objective of the purchase blocking policy.
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.

The Investment Company of America / Prospectus

<PAGE>

Under the fund's purchase blocking policy, certain purchases will not be
prevented and certain redemptions will not trigger a purchase block, such as:
systematic redemptions and purchases where the entity maintaining the
shareholder account is able to identify the transaction as a systematic
redemption or purchase; purchases and redemptions of shares having a value of
less than $5,000; transactions in Class 529 shares; purchases and redemptions
resulting from reallocations by American Funds Target Date Retirement
Series/SM/; retirement plan contributions, loans and distributions (including
hardship withdrawals) identified as such on the retirement plan recordkeeper's
system; and purchase transactions involving transfers of assets, rollovers, Roth
IRA conversions and IRA recharacterizations, where the entity maintaining the
shareholder account is able to identify the transaction as one of these types of
transactions.

NOTWITHSTANDING THE FUND'S PURCHASE BLOCKING POLICY, ALL TRANSACTIONS IN FUND
SHARES REMAIN SUBJECT TO THE FUND'S AND AMERICAN FUNDS DISTRIBUTORS' RIGHT TO
RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY (INCLUDING THE TYPES OF
TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED OR TRIGGER A PURCHASE
BLOCK UNDER THE 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

PURCHASE MINIMUMS FOR ALL CLASSES OF SHARES/1/
- -------------------------------------------------------------------------------

To establish an account (including retirement plan and 529 $ 250/2/
accounts)
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 25
deduction
savings plan account or employer-sponsored 529 account
- -------------------------------------------------------------------------------
PURCHASE MAXIMUM PER TRANSACTION FOR CLASS B SHARES 50,000
- -------------------------------------------------------------------------------
PURCHASE MAXIMUM PER TRANSACTION FOR CLASS C SHARES 500,000

/1/ Purchase minimums may be waived in certain cases. Please see the statement of
additional information for details.
/2/ 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 shares
will reflect the maximum applicable contribution limits under state law. See the
applicable program description for more information.

If you have significant American Funds or American Legacy/(R)/ holdings, you may
not be eligible to invest in Class B or C shares (or their corresponding 529
share classes). Specifically, you may not purchase Class B or 529-B shares if
you are eligible to purchase Class A or 529-A shares at the $100,000 or higher
sales charge discount rate, and 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 (i.e., at net asset value). See

The Investment Company of America / Prospectus

<PAGE>

"Sales charge reductions and waivers" below 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 4:00 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, if events occur between the close of markets
outside the United States and the close of regular trading on the New York Stock
Exchange that, in the opinion of the investment adviser, materially affect the
value of any of the fund's securities that principally trade in those
international markets, those securities will be valued in accordance with fair
value procedures. Use of these procedures is intended to result in more
appropriate net asset values. In addition, such use will reduce, if not
eliminate, potential arbitrage opportunities otherwise available to short-term
investors.

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

Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request. A contingent deferred sales charge may apply at the time you sell
certain Class A, B and C shares.

MOVING BETWEEN SHARE CLASSES

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

The Investment Company of America / 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 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:

The Investment Company of America / 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 A share program with the American Funds; and

.. certain rollover investments from retirement plans to IRAs (see "Rollovers
from retirement plans to IRAs" below 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" below).

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.
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. 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 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." Plans investing in Class A shares with a sales charge
may purchase additional Class A shares in accordance with the sales charge
table above.

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

The Investment Company of America / Prospectus

<PAGE>

CLASS B AND C SHARES

Class B and C shares are sold without any initial sales charge. American Funds
Distributors pays 4% of the amount invested to dealers who sell Class B shares
and 1% to dealers who sell Class 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.

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%

For Class C shares, a contingent deferred sales charge of 1% applies if shares
are sold within one year of purchase.

Any contingent deferred sales charge paid by you on investments in 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" below. 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" below 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 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
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.

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

IN ADDITION TO THE INFORMATION BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
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
and American Legacy investments to reduce your Class A sales charge. However,
for this purpose, investments representing direct purchases of American Funds
money market funds are excluded. Following are different ways that you may
qualify for a reduced Class A sales charge:

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.

The Investment Company of America / 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, as well as
individual holdings in various American Legacy variable annuity contracts and
variable life insurance policies, 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 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 or (b) the amount you invested (excluding capital
appreciation) less any withdrawals. Please see the statement of additional
information for details. You should retain any records necessary to
substantiate the historical amounts you have invested.

In addition, you may also take into account the current value of your
individual holdings in various American Legacy variable annuity contracts and
variable life insurance policies to determine your Class A sales charge. 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 and American Legacy 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 American Funds non-money market funds you intend
to make over a 13-month period (including purchases of various American
Legacy individual variable annuity contracts and variable life insurance
policies) 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" above for more information.

RIGHT OF REINVESTMENT

Please see "How to sell shares" below for information on how to reinvest
proceeds from a redemption, dividend payment or capital gain distribution
without a sales charge.

The Investment Company of America / Prospectus

<PAGE>

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;

.. 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 a systematic withdrawal plan, redemptions through
such a plan (including any dividends and/or capital gain distributions taken
in cash).

The Investment Company of America / Prospectus

<PAGE>

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover. 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 the prospectus and
statement of additional information.

Plans of distribution

The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of directors. The plans
provide for payments, based on annualized percentages of average daily net
assets, of up to .25% for Class A shares; up to .50% for Class 529-A shares; up
to 1.00% for Class B, 529-B, C and 529-C shares; up to .75% for Class 529-E
shares; and up to .50% for Class F and 529-F shares. For all share classes, 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." 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.

The Investment Company of America / 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 75 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 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the 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 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.

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:

-- over $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.

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

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

The Investment Company of America / Prospectus

<PAGE>

TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY OR USING THE INTERNET

. Redemptions by telephone, fax or the Internet (including American
FundsLine/(R)/ 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).

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 within 90 days after the date of the
redemption or distribution. Proceeds from a Class B share redemption made during
the contingent deferred sales charge period will be reinvested in Class A
shares. 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 funds that are reinvested in non-money market American Funds will be
subject to a sales charge. Proceeds will be reinvested at the next calculated
net asset value after your request is received and accepted by American Funds
Service Company. 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." This paragraph does not apply
to rollover investments as described under "Rollovers from retirement plans to
IRAs."

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 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.

The Investment Company of America / Prospectus

<PAGE>

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. 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 will be
subject to federal income tax and may also be subject to state or local taxes --
unless you are exempt from taxation.

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.

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.

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

The Investment Company of America / Prospectus

<PAGE>

Financial highlights/1/

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). The figures under "Ratio of expenses to average net assets after
reimbursements/waivers" reflect the impact, if any, of certain
reimbursements/waivers from Capital Research and Management Company. For more
information about these reimbursements/waivers, see the Annual Fund Operating
Expenses table under "Fees and expenses of the fund" in this prospectus and the
fund's annual report. The information below has been audited by
PricewaterhouseCoopers 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/2/

Net gains
(losses) on
securities
Net asset (both Total
value, Net realized from
beginning investment and investment
of period income unrealized) operations
- -----------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006 $31.36 $.72 $ 4.23 $ 4.95
Year ended 12/31/2005 30.75 .64 1.46 2.10
Year ended 12/31/2004 28.84 .60 2.19 2.79
Year ended 12/31/2003 23.48 .54 5.55 6.09
Year ended 12/31/2002 28.53 .49 (4.56) (4.07)
- -----------------------------------------------------------------------------------------------
CLASS B:
Year ended 12/31/2006 31.24 .46 4.21 4.67
Year ended 12/31/2005 30.64 .39 1.46 1.85
Year ended 12/31/2004 28.74 .38 2.17 2.55
Year ended 12/31/2003 23.41 .34 5.53 5.87
Year ended 12/31/2002 28.47 .30 (4.57) (4.27)
- -----------------------------------------------------------------------------------------------
CLASS C:
Year ended 12/31/2006 31.18 .44 4.21 4.65
Year ended 12/31/2005 30.59 .37 1.45 1.82
Year ended 12/31/2004 28.70 .36 2.16 2.52
Year ended 12/31/2003 23.38 .31 5.53 5.84
Year ended 12/31/2002 28.44 .30 (4.58) (4.28)
- -----------------------------------------------------------------------------------------------
CLASS F:
Year ended 12/31/2006 $31.32 $.71 $ 4.24 $ 4.95
Year ended 12/31/2005 30.72 .62 1.45 2.07
Year ended 12/31/2004 28.81 .58 2.18 2.76
Year ended 12/31/2003 23.46 .51 5.55 6.06
Year ended 12/31/2002 28.52 .49 (4.59) (4.10)
- -----------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 12/31/2006 31.33 .69 4.24 4.93
Year ended 12/31/2005 30.73 .61 1.45 2.06
Year ended 12/31/2004 28.82 .59 2.17 2.76
Year ended 12/31/2003 23.48 .52 5.55 6.07
Period from 2/15/2002 to 12/31/2002 27.88 .46 (3.91) (3.45)
- -----------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 12/31/2006 31.27 .42 4.21 4.63
Year ended 12/31/2005 30.67 .35 1.45 1.80
Year ended 12/31/2004 28.78 .33 2.16 2.49
Year ended 12/31/2003 23.45 .28 5.54 5.82
Period from 2/15/2002 to 12/31/2002 27.88 .28 (3.92) (3.64)
- -----------------------------------------------------------------------------------------------
CLASS 529-C:
Year ended 12/31/2006 31.27 .42 4.23 4.65
Year ended 12/31/2005 30.68 .35 1.45 1.80
Year ended 12/31/2004 28.78 .33 2.17 2.50
Year ended 12/31/2003 23.45 .29 5.54 5.83
Period from 2/19/2002 to 12/31/2002 27.47 .28 (3.50) (3.22)
- -----------------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 12/31/2006 31.28 .59 4.23 4.82
Year ended 12/31/2005 30.68 .51 1.45 1.96
Year ended 12/31/2004 28.78 .48 2.17 2.65
Year ended 12/31/2003 23.45 .42 5.54 5.96
Period from 3/1/2002 to 12/31/2002 28.27 .38 (4.52) (4.14)
- -----------------------------------------------------------------------------------------------

(The Financial Highlights table continues on the following page.)

CLASS 529-F:
Year ended 12/31/2006 $31.32 $.76 $ 4.23 $ 4.99
Year ended 12/31/2005 30.71 .64 1.46 2.10
Year ended 12/31/2004 28.81 .56 2.16 2.72
Year ended 12/31/2003 23.47 .48 5.55 6.03
Period from 9/16/2002 to 12/31/2002 23.98 .16 (.19) (.03)

The Investment Company of America / Prospectus

<PAGE>

DIVIDENDS AND DISTRIBUTIONS
Ratio of
expenses
to average
Net net assets
Dividends Distributions Total Net asset assets, before
(from net (from dividends value, end of reim-
investment capital and end of Total period bursements/
income) gains) distributions period return/3/ (in millions) waivers
- ----------------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006 $(.74) $(2.06) $(2.80) $33.51 15.94% $74,181 .57%
Year ended 12/31/2005 (.68) (.81) (1.49) 31.36 6.87 66,959 .57
Year ended 12/31/2004 (.52) (.36) (.88) 30.75 9.78 64,880 .57
Year ended 12/31/2003 (.52) (.21) (.73) 28.84 26.30 58,353 .59
Year ended 12/31/2002 (.52) (.46) (.98) 23.48 (14.47) 46,129 .59
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B:
Year ended 12/31/2006 (.48) (2.06) (2.54) 33.37 15.04 4,222 1.34
Year ended 12/31/2005 (.44) (.81) (1.25) 31.24 6.04 3,853 1.35
Year ended 12/31/2004 (.29) (.36) (.65) 30.64 8.94 3,683 1.36
Year ended 12/31/2003 (.33) (.21) (.54) 28.74 25.30 3,011 1.38
Year ended 12/31/2002 (.33) (.46) (.79) 23.41 (15.18) 1,841 1.39
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS C:
Year ended 12/31/2006 (.46) (2.06) (2.52) 33.31 15.00 3,350 1.41
Year ended 12/31/2005 (.42) (.81) (1.23) 31.18 5.96 2,929 1.42
Year ended 12/31/2004 (.27) (.36) (.63) 30.59 8.85 2,691 1.43
Year ended 12/31/2003 (.31) (.21) (.52) 28.70 25.22 1,985 1.45
Year ended 12/31/2002 (.32) (.46) (.78) 23.38 (15.20) 1,025 1.45
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS F:
Year ended 12/31/2006 $(.73) $(2.06) $(2.79) $33.48 15.95% $ 1,673 .60%
Year ended 12/31/2005 (.66) (.81) (1.47) 31.32 6.77 1,336 .64
Year ended 12/31/2004 (.49) (.36) (.85) 30.72 9.69 1,209 .67
Year ended 12/31/2003 (.50) (.21) (.71) 28.81 26.18 897 .69
Year ended 12/31/2002 (.50) (.46) (.96) 23.46 (14.59) 415 .70
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 12/31/2006 (.72) (2.06) (2.78) 33.48 15.87 1,118 .64
Year ended 12/31/2005 (.65) (.81) (1.46) 31.33 6.74 835 .67
Year ended 12/31/2004 (.49) (.36) (.85) 30.73 9.68 625 .68
Year ended 12/31/2003 (.52) (.21) (.73) 28.82 26.19 380 .64
Period from 2/15/2002 to 12/31/2002 (.49) (.46) (.95) 23.48 (12.57) 153 .71/5/
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 12/31/2006 (.44) (2.06) (2.50) 33.40 14.90 238 1.47
Year ended 12/31/2005 (.39) (.81) (1.20) 31.27 5.87 191 1.51
Year ended 12/31/2004 (.24) (.36) (.60) 30.67 8.69 155 1.56
Year ended 12/31/2003 (.28) (.21) (.49) 28.78 25.05 100 1.58
Period from 2/15/2002 to 12/31/2002 (.33) (.46) (.79) 23.45 (13.22) 41 1.58/5/
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-C:
Year ended 12/31/2006 (.45) (2.06) (2.51) 33.41 14.94 325 1.46
Year ended 12/31/2005 (.40) (.81) (1.21) 31.27 5.85 247 1.50
Year ended 12/31/2004 (.24) (.36) (.60) 30.68 8.74 188 1.55
Year ended 12/31/2003 (.29) (.21) (.50) 28.78 25.07 115 1.57
Period from 2/19/2002 to 12/31/2002 (.34) (.46) (.80) 23.45 (11.91) 45 1.57/5/
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 12/31/2006 (.62) (2.06) (2.68) 33.42 15.52 48 .95
Year ended 12/31/2005 (.55) (.81) (1.36) 31.28 6.42 36 .99
Year ended 12/31/2004 (.39) (.36) (.75) 30.68 9.29 27 1.03
Year ended 12/31/2003 (.42) (.21) (.63) 28.78 25.70 16 1.04
Period from 3/1/2002 to 12/31/2002 (.33) (.35) (.68) 23.45 (14.72) 6 1.03/5/
- ----------------------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continu the fol page.)
CLASS 529-F:
Year ended 12/31/2006 $(.78) $(2.06) $(2.84) $33.47 16.10% $ 13 .45%
Year ended 12/31/2005 (.68) (.81) (1.49) 31.32 6.87 8 .56
Year ended 12/31/2004 (.46) (.36) (.82) 30.71 9.55 5 .78
Year ended 12/31/2003 (.48) (.21) (.69) 28.81 26.05 3 .79
Period from 9/16/2002 to 12/31/2002 (.13) (.35) (.48) 23.47 (.14) --/6/ .23

Ratio of
expenses
to average Ratio
net assets of net
after income to
reim- average
bursements/ net
waivers/4/ assets
- --------------------------------------------------------------

CLASS A:
Year ended 12/31/2006 .54 % 2.16 %
Year ended 12/31/2005 .55 2.06
Year ended 12/31/2004 .57 2.06
Year ended 12/31/2003 .59 2.14
Year ended 12/31/2002 .59 1.89
- --------------------------------------------------------------
CLASS B:
Year ended 12/31/2006 1.32 1.38
Year ended 12/31/2005 1.33 1.28
Year ended 12/31/2004 1.35 1.29
Year ended 12/31/2003 1.38 1.33
Year ended 12/31/2002 1.39 1.18
- --------------------------------------------------------------
CLASS C:
Year ended 12/31/2006 1.38 1.32
Year ended 12/31/2005 1.40 1.21
Year ended 12/31/2004 1.43 1.22
Year ended 12/31/2003 1.45 1.25
Year ended 12/31/2002 1.45 1.17
- --------------------------------------------------------------
CLASS F:
Year ended 12/31/2006 .58% 2.12%
Year ended 12/31/2005 .62 1.99
Year ended 12/31/2004 .67 1.99
Year ended 12/31/2003 .69 2.01
Year ended 12/31/2002 .70 1.92
- --------------------------------------------------------------
CLASS 529-A:
Year ended 12/31/2006 .62 2.08
Year ended 12/31/2005 .65 1.96
Year ended 12/31/2004 .68 2.00
Year ended 12/31/2003 .64 2.06
Period from 2/15/2002 to 12/31/2002 .71/5/ 2.17/5/
- --------------------------------------------------------------
CLASS 529-B:
Year ended 12/31/2006 1.45 1.25
Year ended 12/31/2005 1.49 1.12
Year ended 12/31/2004 1.55 1.12
Year ended 12/31/2003 1.58 1.12
Period from 2/15/2002 to 12/31/2002 1.58/5/ 1.30/5/
- --------------------------------------------------------------
CLASS 529-C:
Year ended 12/31/2006 1.44 1.26
Year ended 12/31/2005 1.48 1.13
Year ended 12/31/2004 1.54 1.13
Year ended 12/31/2003 1.57 1.13
Period from 2/19/2002 to 12/31/2002 1.57/5/ 1.32/5/
- --------------------------------------------------------------
CLASS 529-E:
Year ended 12/31/2006 .92 1.78
Year ended 12/31/2005 .96 1.65
Year ended 12/31/2004 1.02 1.65
Year ended 12/31/2003 1.04 1.65
Period from 3/1/2002 to 12/31/2002 1.03/5/ 1.90/5/
- --------------------------------------------------------------
CLASS 529-F:
Year ended 12/31/2006 .42% 2.27%
Year ended 12/31/2005 .54 2.07
Year ended 12/31/2004 .77 1.91
Year ended 12/31/2003 .79 1.88
Period from 9/16/2002 to 12/31/2002 .23 .68

The Investment Company of America / Prospectus

<PAGE>

YEAR ENDED DECEMBER 31
2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 20% 19% 19% 24% 27%
OF SHARES

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

/2/ Based on average shares outstanding.
/3/ Total returns exclude all sales charges, including contingent deferred sales
charges.

/4/ The ratios in this column reflect 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 for all share classes.

/5/ Annualized.
/6/ Amount less than $1 million.

The Investment Company of America / Prospectus

<PAGE>

NOTES

The Investment Company of America / 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 DEALER SERVICES American Funds Distributors
800/421-9900
FOR 529 PLANS American Funds Service Company
800 /421-0180, ext. 529
FOR 24-HOUR INFORMATION American FundsLine
800/325-3590
americanfunds.com

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

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

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

PROGRAM DESCRIPTIONS Program descriptions for 529 programs managed by the
American Funds organization contain 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 on all aspects
of the fund, including the fund's financial statements, and is incorporated by
reference into this prospectus. This means that the current SAI, for legal
purposes, is part of this prospectus. The codes of ethics describe the personal
investing policies adopted by the fund, the fund's investment adviser and its
affiliated companies.

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

HOUSEHOLD MAILINGS Each year you are automatically sent an updated prospectus
and annual and semi-annual reports for the fund. You may also occasionally
receive proxy statements for the fund. In order to reduce the volume of mail you
receive, when possible, only one copy of these documents will be sent to
shareholders who are part of the same family and share the same household address.

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
333 South Hope Street, Los Angeles, California 90071.

[logo - recycle bug]
Printed on recycled paper

MFGEPR-904-0307P Litho in USA CGD/RRD/8012 Investment Company File No. 811-00116
- -------------------------------------------------------------------------------------
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)/

The Investment
Company of America/(R)/

PROSPECTUS
ADDENDUM

March 1, 2007

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Class R-5 shares of The Investment Company of America are available to certain
clients of the Personal Investment Management group of Capital Guardian Trust
Company./SM/ Accordingly, for these shareholders, the following information
should be read in conjunction with the prospectus for this fund.

Fees and expenses of the fund -- pages 5-6

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

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS R-5
- -------------------------------------------------------------------------------

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

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
CLASS R-5
- --------------------------------------------------------------

Management fees/1/ 0.24%
- --------------------------------------------------------------
Distribution and/or service (12b-1) fees none
- --------------------------------------------------------------
Other expenses/2/ 0.11
- --------------------------------------------------------------
Total annual fund operating expenses/1/ 0.35

/1/ The fund's investment adviser is currently waiving 10% of its management fee.
The waiver may be discontinued at any time in consultation with the fund's
board, but it is expected to continue at this level until further review. The
fund's investment adviser and board intend to review the waiver as
circumstances warrant. Management fees and total expenses do not reflect any
waiver. Information regarding the effect of any waiver on total annual fund
operating expenses can be found in the Financial Highlights table in this
prospectus addendum and in the fund's annual report.
/2/ A portion of the fund's expenses may be used to pay third parties (including
affiliates of the fund's investment adviser) that provide recordkeeping
services to retirement plans invested in the fund.

EXAMPLE

The example below 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, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The example does not reflect the impact of any fee waivers
or expense reimbursements.

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

1 YEAR 3 YEARS 5 YEARS 10 YEARS
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Class R-5 $36 $113 $197 $443
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Purchase and exchange of shares -- pages 18-21

PURCHASE OF CLASS R-5 SHARES

Class R-5 shares of the fund are available to certain clients of the Personal
Investment Management group of Capital Guardian Trust Company. Please contact
Capital Guardian Trust Company if you wish to purchase Class R-5 shares of the
fund.

Sales charges -- pages 22-25

CLASS R-5 SHARES

Class R-5 shares are sold without any initial or contingent deferred sales
charge. In addition, no compensation is paid to investment dealers on sales of
Class R-5 shares.

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Financial highlights/1/ -- pages 32-34

The Financial Highlights table is intended to help you understand the fund's
results. Certain information reflects financial results for a single share. 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). The figures under "Ratio of expenses to average net
assets after reimbursements/ waivers" reflect the impact, if any, of certain
reimbursements/waivers from Capital Research and Management Company. For more
information about these reimbursements/waivers, see the Annual Fund Operating
Expenses table under "Fees and expenses of the fund" in this prospectus addendum
and the fund's annual report. The information below has been audited by
PricewaterhouseCoopers 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/2/

CLASS R-5:
Year ended 12/31/2006 $31.35 $.79 $4.24 $ 5.03
Year ended 12/31/2005 30.75 .70 1.46 2.16
Year ended 12/31/2004 28.84 .67 2.18 2.85
Year ended 12/31/2003 23.48 .56 5.59 6.15
Period from 5/15/2002 to 12/31/2002 28.37 .39 (4.50) (4.11)

DIVIDENDS AND DISTRIBUTIONS

Net
Dividends Distributions Total asset
(from net (from dividends value,
investment capital and end of Total
income) gains) distributions period return
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CLASS R-5:
Year ended 12/31/2006 $(.81) $(2.06) $(2.87) $33.51 16.22%
Year ended 12/31/2005 (.75) (.81) (1.56) 31.35 7.06
Year ended 12/31/2004 (.58) (.36) (.94) 30.75 10.02
Year ended 12/31/2003 (.58) (.21) (.79) 28.84 26.58
Period from 5/15/2002 to 12/31/2002 (.43) (.35) (.78) 23.48 (14.59)

Ratio of Ratio of
expenses expenses
to average to average Ratio
Net net assets net assets of net
assets, before after income to
end of reim- reim- average
period bursements/ bursements/ net
(in millions) waivers waivers/3/ assets
- ------------------------------------------------------------------------------------------

CLASS R-5:
Year ended 12/31/2006 $1,980 .35% .33% 2.37%
Year ended 12/31/2005 1,562 .36 .34 2.28
Year ended 12/31/2004 1,408 .36 .35 2.28
Year ended 12/31/2003 1,201 .36 .36 2.11
Period from 5/15/2002 to 12/31/2002 48 .37/4/ .37/4/ 2.56/4/

YEAR ENDED DECEMBER 31
2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 20% 19% 19% 24% 27%
OF SHARES

/1/ Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
/2/ Based on average shares outstanding.

/3/ The ratios in this column reflect 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.

/4/ Annualized.

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THE INVESTMENT COMPANY OF AMERICA

Part B
Statement of Additional Information

March 1, 2007

This document is not a prospectus but should be read in conjunction with the
current prospectus or retirement plan prospectus of The Investment Company of
America (the "fund" or "ICA") dated March 1, 2007. You may obtain a prospectus
from your financial adviser or by writing to the fund at the following address:

The Investment Company of America
Attention: Secretary
333 South Hope Street
Los Angeles, California 90071
213/486-9200
Certain privileges and/or services described below may not be available to all
shareholders (including shareholders who purchase shares at net asset value
through eligible retirement plans) depending on the shareholder's investment
dealer or retirement plan recordkeeper. Please see your financial adviser,
investment dealer, plan recordkeeper or employer for more information.

TABLE OF CONTENTS

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

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 2
Fundamental policies and investment restrictions. . . . . . . . . . 6
Management of the fund . . . . . . . . . . . . . . . . . . . . . . 9
Execution of portfolio transactions . . . . . . . . . . . . . . . . 30
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 31
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 34
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 39
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 45
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Shareholder account services and privileges . . . . . . . . . . . . 49
General information . . . . . . . . . . . . . . . . . . . . . . . . 52
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Financial statements

The Investment Company of America -- Page 1

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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.

GENERAL GUIDELINE

.. The fund may only invest in securities included on its eligible list (does
not apply to securities issued or guaranteed by the U.S. government).

DEBT SECURITIES

.. The fund's investments in straight debt securities (i.e., not convertible
into equity) will generally consist of investment grade securities. The
fund may, however, invest up to 5% of its assets in straight debt
securities rated Ba or below by Moody's Investors Service and BB or below
by Standard & Poor's Corporation or unrated but determined to be of
equivalent quality.

NON-U.S. SECURITIES

.. The fund may invest up to 15% of its assets in issuers domiciled outside
the United States and not included in the Standard & Poor's 500 Composite
Index.

* * * * * *

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

DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

The descriptions below are intended to supplement the material in the prospectus
under "Investment objectives, 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. The prices
of these securities can also be adversely affected depending on the outcome of
financial contracts (such as derivatives) held by third parties relating to
various 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.

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 accrue interest at the

The Investment Company of America -- Page 2

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applicable coupon rate over a specified time period. 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.

Lower rated debt securities, rated Ba or below by Moody's and/or BB or below by
S&P or unrated but determined 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.

Certain additional risk factors relating to debt securities are discussed below:

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES -- Debt securities may be
sensitive to economic changes, political and corporate developments, and
interest rate changes. In addition, during an economic downturn or
substantial period of rising interest rates, issuers that are highly
leveraged may experience increased financial stress that would adversely
affect their ability to meet projected business goals, to obtain additional
financing and to service their principal and interest payment obligations.
Periods of economic change and uncertainty also can be expected to result
in increased volatility of market prices and yields of certain debt
securities. The prices of these securities also can be adversely affected
depending on the outcome of financial contracts (such as derivatives) held
by third parties relating to various assets or indices.

PAYMENT EXPECTATIONS -- Debt securities may contain redemption or call
provisions. If an issuer exercises these provisions in a lower interest
rate market, the fund would have to replace the security with a lower
yielding security, resulting in decreased income to investors. If the
issuer of a debt security defaults on its obligations to pay interest or
principal or is the subject of bankruptcy proceedings, the fund may incur
losses or expenses in seeking recovery of amounts owed to it.

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

The investment adviser attempts to reduce the risks described above through
diversification of the fund's portfolio and by credit analysis of each issuer,
as well as by monitoring broad economic trends and corporate and legislative
developments, but there can be no assurance that it will be successful in doing
so.

Credit ratings for debt securities provided by rating agencies evaluate the
safety of principal and interest payments, not market value risk. The rating of
an issuer is also heavily weighted by past developments and does not necessarily
reflect future conditions. There is frequently a lag between the time a rating
is assigned and the time it is updated. See the Appendix for more information
about credit ratings.

The Investment Company of America -- Page 3

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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 and vice versa. Some
types of convertible bonds or preferred stocks automatically convert into common
stocks and some may be subject to redemption at the option of the issuer at a
predetermined price. The prices and yields of nonconvertible preferred stocks
generally move with changes in interest rates and the issuer's credit quality,
similar to the factors affecting debt securities. These securities may be
treated as debt for fund investment limit purposes.

Convertible bonds, convertible preferred stocks and other securities may
sometimes be converted, or may automatically convert, into common stocks or
other securities at a stated conversion ratio. 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 value varies in
response to many factors, including the value of the underlying assets, 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.

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

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

INVESTING IN VARIOUS COUNTRIES -- Investing outside the United States may
involve additional risks caused by, among other things, currency controls and
fluctuating currency values; different accounting, auditing, financial reporting
and legal standards and practices in some countries; changing local, regional
and global economic, political and social conditions; expropriation;

The Investment Company of America -- Page 4

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changes in tax policy; greater market volatility; differing securities market
structures; higher transaction costs; and various administrative difficulties,
such as delays in clearing and settling portfolio transactions or in receiving
payment of dividends.

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

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

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

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

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.

The Investment Company of America -- Page 5

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CASH AND CASH EQUIVALENTS -- The fund may invest in cash and cash equivalents.
These 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.

* * * * * *

PORTFOLIO TURNOVER -- Portfolio changes will be made without regard to the
length of time particular investments may have been held. Short-term trading
profits are not the fund's objective, and changes in its investments are
generally accomplished gradually, though short-term transactions may
occasionally be made. High portfolio turnover involves correspondingly greater
transaction costs in the form of dealer spreads or brokerage commissions, and
may result in the realization of net capital gains, which are taxable when
distributed to shareholders.

A fund's portfolio turnover rate would equal 100% if each security in the fund's
portfolio were replaced once per year. The fund's portfolio turnover rates for
the fiscal years ended December 31, 2006 and 2005 were 20% and 19%,
respectively. See "Financial highlights" in the prospectus for the fund's annual
portfolio turnover rate for each of the last five fiscal years.

FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES -- The fund has adopted the following fundamental policies
and investment restrictions, which may not be changed without approval by
holders of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), as the vote of the
lesser of (a) 67% or more of the outstanding 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. All percentage limitations are considered at the
time securities are purchased and are based on the fund's net assets unless
otherwise indicated. None of the following investment restrictions involving a
maximum percentage of assets will be considered violated unless the excess
occurs immediately after, and is caused by, an acquisition by the fund.

These restrictions (which do not apply to the purchase of securities issued or
guaranteed by the U.S. government) provide that the fund shall make no
investment:

Which involves promotion or business management by the fund;

In any security about which reliable information is not available with respect
to the history, management, assets, earnings, and income of the issuer;

If the investment would cause more than 5% of the value of the total assets of
the fund, as they exist at the time of investment, to be invested in the
securities of any one issuer;

The Investment Company of America -- Page 6

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If the investment would cause more than 20% of the value of the total assets of
the fund to be invested in the securities in any one industry;

If the investment would cause the fund to own more than 10% of the outstanding
voting securities of any one issuer, provided that this restriction shall apply
as to 75% of the fund's total assets; or

In any security which has not been placed on the fund's Eligible List. (See the
prospectus).

The fund is not permitted to buy securities on margin, sell securities short,
borrow money, or to invest in real estate. The fund may invest in the securities
of real estate investment trusts.

The fund has also adopted other fundamental policies which cannot be changed
without shareholder approval. These policies require the fund not to:

Concentrate its investment in any particular industry or group of industries.
Some degree of concentration may occur from time to time (within the 20%
limitation of the Certificate of Incorporation) as certain industries appear to
present desirable fields for investment.

Engage generally in the making of loans. Although the fund has reserved the
right to make loans to unaffiliated persons subject to certain restrictions,
including requirements concerning collateral and amount of any loan, no loans
have been made since adoption of this fundamental policy more than 50 years ago.

Act as underwriter of securities issued by others, engage in distribution of
securities for others, engage in the purchase and sale of commodities or
commodity contracts, borrow money, invest in real estate, or make investments in
other companies for the purpose of exercising control or management.

Pledge, encumber or assign all or any part of its property and assets as
security for a debt.

Invest in the securities of other investment companies.

Notwithstanding the restriction on making loans, the fund may lend portfolio
securities; however, it does not currently intend to engage in an ongoing or
regular securities lending program.

Notwithstanding the restriction on investing in the securities of other
investment companies, the fund may invest in securities of other investment
companies if deemed advisable by its officers in connection with the
administration of a deferred compensation plan adopted by directors pursuant to
an exemptive order granted by the Securities and Exchange Commission.

The Investment Company of America -- Page 7

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

The fund will not:

Purchase and sell securities for short-term profits; however, securities will be
sold without regard to the time that they have been held whenever investment
judgment makes such action seem advisable.

Purchase or retain the securities of any issuer if those officers and directors
of the fund or the Investment Adviser who own beneficially more than one half of
1% of such issuer together own more than 5% of the securities of such issuer.

Invest in securities of companies which, with their predecessors, have a record
of less than three years' continuous operations.

Invest in puts, calls, straddles, spreads or any combination thereof.

Purchase partnership interests in oil, gas or mineral exploration, drilling or
mining ventures.

Invest in excess of 10% of the market value of its total assets in securities
which may require registration under the Securities Act of 1933 prior to sale by
the fund (restricted securities), or other securities that are not readily
marketable.

Issue senior securities, except as permitted by the 1940 Act.

The Investment Company of America -- Page 8

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

Louise H. Bryson, 62 President, Distribution, 1 None
Director (1999) Lifetime Entertainment
Network; General Manager,
Lifetime Movie Network;
former Chairman of the Board
and Director, KCET - Los
Angeles (public television
station)
- -----------------------------------------------------------------------------------------------------------------
Mary Anne Dolan, 59 Founder and President, 3 None
Director (2000) M.A.D., Inc. (communications
company); former
Editor-in-Chief, The Los
Angeles Herald Examiner
- -----------------------------------------------------------------------------------------------------------------
Martin Fenton, 71 Chairman of the Board, Senior 18 None
Chairman of the Board Resource Group LLC
(Independent and (development and management
Non-Executive) (2000) of senior living communities)
- -----------------------------------------------------------------------------------------------------------------
Leonard R. Fuller, 60 President and CEO, Fuller 16 None
Director (2002) Consulting (financial
management consulting firm)
- -----------------------------------------------------------------------------------------------------------------
Claudio X. Gonzalez Chairman of the Board and 1 America Movil, S.A. de C.V.;
Laporte, 72 CEO, Kimberly-Clark de General Electric Company; Grupo
Director (2001) Mexico, S.A. (household Alfa, S.A. de C.V.; Grupo Carso,
products) S.A. de C.V.; Grupo Financiero
Inbursa; Grupo Industrial
Saltillo, S.A. de C.V.; Grupo
Mexico, S.A. de C.V.; The Home
Depot, Inc.; Kellogg Company;
Kimberly-Clark Corporation; The
Mexico Fund
- -----------------------------------------------------------------------------------------------------------------
L. Daniel Jorndt, 65 Retired; former Chairman of 1 Kellogg Company
Director (2006) the Board and CEO, Walgreen
Company (drug stores)
- -----------------------------------------------------------------------------------------------------------------
John G. McDonald, 69 Stanford Investors Professor, 8 iStar Financial, Inc.;
Director (1976) Graduate School of Business, Plum Creek Timber Co.;
Stanford University Scholastic Corporation;
Varian, Inc.
- -----------------------------------------------------------------------------------------------------------------
Bailey Morris-Eck, 62 Director and Programming 3 None
Director (1993) Chair, WYPR Baltimore/
Washington (public radio
station); Senior Adviser,
Financial News (London);
Senior Fellow, Institute for
International Economics
- -----------------------------------------------------------------------------------------------------------------
Richard G. Newman,/5/ 72 Chairman of the Board, AECOM 14 Sempra Energy;
Director (1996) Technology Corporation Southwest Water Company
(engineering, consulting and
professional technical
services)
- -----------------------------------------------------------------------------------------------------------------
Olin C. Robison, 70 Fellow, The Oxford Centre for 3 American Shared Hospital Services
Director (1987) the Study of Christianity and
Culture; Director, The Oxford
Project on Religion and
Public Policy; President
Emeritus of the Salzburg
Seminar; President Emeritus,
Middlebury College
- -----------------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 9

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"INTERESTED" DIRECTORS/6/,/7/

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 OR THE PRINCIPAL UNDERWRITER OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
AS A DIRECTOR/OFFICER/2/) OF THE FUND BY DIRECTOR BY DIRECTOR
- -------------------------------------------------------------------------------------------------------------

R. Michael Shanahan, 68 Chairman Emeritus, Capital 2 None
Vice Chairman of the Board Research and Management
(1994) Company; Director, American
Funds Distributors, Inc.*;
Chairman of the Executive
Committee, The Capital Group
Companies, Inc.*; Chairman
of the Board, Capital
Management Services, Inc.*;
Director, Capital Strategy
Research, Inc.*
- -------------------------------------------------------------------------------------------------------------
James B. Lovelace, 50 Senior Vice President and 2 None
Senior Vice President (1994) Director, Capital Research
and Management Company
- -------------------------------------------------------------------------------------------------------------
Donald D. O'Neal, 46 Senior Vice President and 3 None
Senior Vice President (1994) Director, Capital Research
and Management Company
- -------------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 10

<PAGE>

OTHER OFFICERS/7/

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

Joyce E. Gordon, 50 Senior Vice President and Director, Capital Research
Senior Vice and Management Company
President (1998)
- -------------------------------------------------------------------------------
J. Dale Harvey, 41 Vice President, Capital Research and Management
Vice President Company; Director, American Funds Service Company*
(2006)
- -------------------------------------------------------------------------------
Anne M. Llewellyn, Vice President - Fund Business Management Group,
59 Capital Research and Management Company
Vice President
(1984)
- -------------------------------------------------------------------------------
Vincent P. Corti, 50 Vice President - Fund Business Management Group,
Secretary (1994) Capital Research and Management Company
- -------------------------------------------------------------------------------
Carmelo Spinella, 43 Senior Vice President - Fund Business Management Group,
Treasurer (2006) Capital Research and Management Company; Director,
American Funds Service Company*
- -------------------------------------------------------------------------------
R. Marcia Gould, 52 Vice President - Fund Business Management Group,
Assistant Treasurer Capital Research and Management Company
(1993)
- -------------------------------------------------------------------------------

* Company affiliated with Capital Research and Management Company.

/1/ The term "independent" director refers to a director who is not an "interested
person" within the meaning of the 1940 Act.

/2/ Directors and officers of the fund are elected annually and serve until
earlier 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 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, American Funds Target Date Retirement Series,/SM/ Inc.,
which is composed of nine funds and is available to investors in tax-deferred
retirement plans and IRAs, and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
/4/ This includes all directorships (other than those in the American Funds) that
are held by each director as a director of a public company or a registered
investment company.
/5/ The investment adviser and its affiliates use a subsidiary of AECOM, Inc. to
perform architectural and space management services. The investment adviser's
business relationship with the group preceded its acquisition by AECOM in 1994.
The total fees relating to this engagement for the last two years represent
less than 0.1% of AECOM, Inc.'s 2005 gross revenues.

/6/ "Interested persons," 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).
/7/ All of the officers listed, with the exception of Anne M. Llewellyn and
Carmelo Spinella, 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.

The Investment Company of America -- Page 11

<PAGE>

FUND SHARES OWNED BY DIRECTOR AS OF DECEMBER 31, 2006

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

"INDEPENDENT" DIRECTORS
- -------------------------------------------------------------------------------
Louise H. Bryson Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
Mary Anne Dolan Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
Martin Fenton $50,001 - $100,000 Over $100,000
- -------------------------------------------------------------------------------
Leonard R. Fuller $10,001 - $50,000 $50,001 - $100,000
- -------------------------------------------------------------------------------
Claudio X. Gonzalez Laporte Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
L. Daniel Jorndt Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
John G. McDonald Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
Bailey Morris-Eck Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
Richard G. Newman Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
Olin C. Robison Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
"INTERESTED" DIRECTORS
- -------------------------------------------------------------------------------
James B. Lovelace Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
Donald D. O'Neal Over $100,000 Over $100,000
- -------------------------------------------------------------------------------
R. Michael Shanahan Over $100,000 Over $100,000
- -------------------------------------------------------------------------------

/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.

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 $50,000 to $81,500, 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.

The Investment Company of America -- Page 12

<PAGE>

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.

DIRECTOR COMPENSATION PAID DURING THE FISCAL YEAR ENDED DECEMBER 31, 2006

TOTAL COMPENSATION (INCLUDING
VOLUNTARILY DEFERRED
AGGREGATE COMPENSATION 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/
- ------------------------------------------------------------------------------------------------------

Louise H. Bryson/3/ $ 88,500 $ 88,500
- ------------------------------------------------------------------------------------------------------
Mary Anne Dolan 73,668 143,500
- ------------------------------------------------------------------------------------------------------
Martin Fenton/3/ 101,657 346,890
- ------------------------------------------------------------------------------------------------------
Leonard R. Fuller/3/ 76,222 227,810
- ------------------------------------------------------------------------------------------------------
Claudio X. Gonzalez Laporte/3/ 76,000 76,000
- ------------------------------------------------------------------------------------------------------
L. Daniel Jorndt/3/,/4/ 52,750 52,750
- ------------------------------------------------------------------------------------------------------
John G. McDonald/3/ 92,188 340,000
- ------------------------------------------------------------------------------------------------------
Bailey Morris-Eck 71,168 139,500
- ------------------------------------------------------------------------------------------------------
Richard G. Newman 84,273 163,810
- ------------------------------------------------------------------------------------------------------
Olin C. Robison/3/ 77,668 144,500
- ------------------------------------------------------------------------------------------------------

/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, 2006 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 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, American Funds Target Date Retirement Series,/SM/ Inc.,
which is composed of nine funds and is available to investors in tax-deferred
retirement plans and IRAs, and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
/3/ Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) through the 2006
fiscal year for participating directors is as follows: Louise H. Bryson
($675,429), Martin Fenton ($168,186), Leonard R. Fuller ($10,940), Claudio X.
Gonzalez Laporte ($510,702), L. Daniel Jorndt ($49,882), John G. McDonald
($1,453,516) and Olin C. Robison ($704,940). Amounts deferred and accumulated
earnings thereon are not funded and are general unsecured liabilities of the
fund until paid to the directors.
/4/ L. Daniel Jorndt was elected a director of the fund in May 2006.

As of February 1, 2007, 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.

The Investment Company of America -- Page 13

<PAGE>

FUND ORGANIZATION AND THE BOARD OF DIRECTORS -- The fund, an open-end,
diversified management investment company, was organized as a Delaware
corporation on August 28, 1933. 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.

Delaware law provides that the business and affairs of the fund are managed by
or under the direction of the board of directors. Directors are charged with
fiduciary duties of care and loyalty to the fund and its shareholders.
Generally, a director will satisfy his or her duties if he or she acts with the
care of an ordinarily prudent person under similar circumstances and refrains
from self-dealing.

Members of the board who are not employed by the investment adviser or its
affiliates 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 CollegeAmerica/(R)/
account owners invested in Class 529 shares are not shareholders of the fund
and, accordingly, do not have the rights of a shareholder, such as the right to
vote proxies relating to fund shares. As the legal owner of the fund's Class 529
shares, the Virginia College Savings Plan/SM/ will vote any proxies relating to
such fund shares.

The fund holds annual meetings of shareholders for the purpose of electing
directors. Significant matters that require shareholder approval, such as 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 certificate of incorporatoin 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 Louise H. Bryson, Mary Anne Dolan, Martin Fenton, Leonard R.
Fuller, Claudio X. Gonzalez Laporte, L. Daniel Jorndt, John G. McDonald, Bailey
Morris-Eck, Richard G. Newman and Olin C. Robison, none of whom is an
"interested person" of the fund within the meaning of the 1940 Act. The
committee provides oversight regarding the fund's accounting and financial
reporting policies and practices, its internal controls and the internal

The Investment Company of America -- Page 14

<PAGE>

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. Five audit committee meetings were held during the 2006
fiscal year.

The fund has a governance and contracts committee comprised of Louise H. Bryson,
Mary Anne Dolan, Martin Fenton, Leonard R. Fuller, Claudio X. Gonzalez Laporte,
L. Daniel Jorndt, John G. McDonald, Bailey Morris-Eck, Richard G. Newman and
Olin C. Robison, 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 governance and contracts committee
meeting was held during the 2006 fiscal year.

The fund has a nominating committee comprised of Louise H. Bryson, Mary Anne
Dolan, John G. McDonald and Olin C. Robison, 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 and advisory board member
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 committee of the fund, addressed to the fund's
secretary, and must be accompanied by complete biographical and occupational
data on the prospective nominee, along with a written consent of the prospective
nominee for consideration of his or her name by the committee. Three nominating
committee meetings were held during the 2006 fiscal year.

The fund has a proxy committee comprised of Leonard R. Fuller, John G. McDonald
and Richard G. Newman, none of whom is an "interested person" of the fund within
the meaning of the 1940 Act. The committee's functions include establishing and
reviewing procedures and policies for voting proxies of companies held in the
fund's portfolio, making determinations with regard to certain contested proxy
voting issues, and discussing related current issues. Five proxy committee
meetings were held during the 2006 fiscal year.

The Investment Company of America -- Page 15

<PAGE>

ADVISORY BOARD MEMBERS
The board of directors has established an advisory board whose members are, in
the judgment of the directors, highly knowledgeable about world political and
economic matters. In addition to holding meetings with the board of directors,
members of the advisory board, while not participating in specific investment
decisions, consult from time to time with the investment adviser, primarily with
respect to world trade and business conditions. Members of the advisory board,
however, possess no authority or responsibility with respect to the fund's
investments or management. The chart below sets out additional information about
the advisory board members.

NUMBER OF
BOARDS/1/
WHICH
NAME AND AGE PRINCIPAL OCCUPATION(S) MEMBER
(YEAR FIRST ELECTED) DURING PAST FIVE YEARS SERVES OTHER DIRECTORSHIPS/2/ HELD
- -------------------------------------------------------------------------------------------------------------

Thomas M. Crosby, Jr., 68 Partner, Faegre & Benson (law firm) 1 None
(1995)
- -------------------------------------------------------------------------------------------------------------
Ellen H. Goldberg, 61 Consultant; Interim President, Santa 1 None
(1998) Fe Institute (former President);
Professor Emeritus, University of New
Mexico
- -------------------------------------------------------------------------------------------------------------
William H. Kling, 61 President, American Public Media 8 Irwin Financial Corporation
(1985) Group
- -------------------------------------------------------------------------------------------------------------
Robert J. O'Neill, 70 Planning Director and acting CEO of 3 None
(1988) the United States Studies Centre,
University of Sydney, Australia;
Member of the Board of Directors, The
Lowy Institute for International
Policy Studies, Sydney, Australia;
former Deputy Chairman of the Council
and Chairman of the International
Advisory Panel, Graduate School of
Government, University of Sydney,
Australia; former Chairman of the
Council, Australian Strategic Policy
Institute; former Chichele Professor
of the History of War and Fellow, All
Souls College, University of Oxford;
former Chairman of the Council,
International Institute for Strategic
Studies
- -------------------------------------------------------------------------------------------------------------
William J. Spencer, 76 Chairman Emeritus and former Chairman 1 LECG Corporation
(2006) of the Board and CEO, SEMATECH
(research and development consortium)
- -------------------------------------------------------------------------------------------------------------
Norman R. Weldon, 72 Managing Director, Partisan 1 AtriCure, Inc.
(1977) Management Group, Inc. (venture
capital investor in medical device
companies); former Chairman of the
Board, Novoste Corporation; former
President and Director, Corvita
Corporation
- -------------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 16

<PAGE>

/1/ Funds managed by Capital Research and Management Company, including the
American Funds, American Funds Insurance Series,(R) which is composed of 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, American Funds Target Date Retirement Series,/SM/ Inc.,
which is composed of nine funds and is available to investors in tax-deferred
retirement plans and IRAs, and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.

/2/ This includes all directorships (other than those of the American Funds) that
are held by each advisory board member as a director of a public company or a
registered investment company.

THE ADDRESS FOR ALL ADVISORY BOARD MEMBERS OF THE FUND IS 333 SOUTH HOPE STREET
- - 55TH FLOOR, LOS ANGELES, CALIFORNIA 90071, ATTENTION: SECRETARY.

ADVISORY BOARD MEMBER COMPENSATION -- The fund pays fees of $5,500 per annum to
advisory board members who are not affiliated with the investment adviser, plus
$1,500 for each meeting attended in conjunction with meetings with the board of
directors.

No pension or retirement benefits are accrued as part of fund expenses. The
advisory board members 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 advisory board members
who are not affiliated with the fund.

ADVISORY BOARD MEMBER COMPENSATION PAID DURING THE FISCAL YEAR ENDED DECEMBER
31, 2006

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/
- ------------------------------------------------------------------------------------------

Thomas M. Crosby, Jr. $ 8,500 $ 8,500
- ------------------------------------------------------------------------------------------
Ellen H. Goldberg 8,500 8,500
- ------------------------------------------------------------------------------------------
William H. Kling 8,500 251,333
- ------------------------------------------------------------------------------------------
Robert J. O'Neill 8,500 103,000
- ------------------------------------------------------------------------------------------
William J. Spencer/3/ 55,833 55,833
- ------------------------------------------------------------------------------------------
Norman R. Weldon 8,500 82,085
- ------------------------------------------------------------------------------------------

The Investment Company of America -- Page 17

<PAGE>

/1/ Amounts may be deferred by eligible advisory board members under a
non-qualified deferred compensation plan adopted by the fund in 1993. Deferred
amounts accumulate at an earnings rate determined by the total return of one or
more American Funds as designated by the advisory board member. Compensation
for the fiscal year ended December 31, 2006 includes earnings on amounts
deferred in previous years.

/2/ Funds managed by Capital Research and Management Company, including the
American Funds, American Funds Insurance Series,(R) which is composed of 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, American Funds Target Date Retirement Series,/SM/ Inc.,
which is composed of nine funds and is available to investors in tax-deferred
retirement plans and IRAs, and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
/3/ William J. Spencer retired as a director of the fund in August 2006 and was
subsequently elected to the advisory board. The aggregate compensation listed
above represent fees paid to him for his service as a director during 2006. In
addition, his total deferred compensation accrued by the fund (plus earnings
thereon) through the 2006 fiscal year was $1,094,517.

PROXY VOTING PROCEDURES AND GUIDELINES -- The fund and its investment adviser
have adopted Proxy Voting Guidelines (the "Guidelines") with respect to voting
proxies of securities held by the fund, other American Funds, Endowments and
American Funds Insurance Series. Certain American Funds, including the fund,
have established separate proxy voting committees that vote proxies or delegate
to a voting officer the authority to vote on behalf of those funds. Proxies for
all other funds are voted by a committee of the investment adviser under
authority delegated by those funds' boards. Therefore, if more than one fund
invests in the same company, they may vote differently on the same proposal.

All U.S. proxies are voted. Non-U.S. proxies also are voted, provided there is
sufficient time and information available. After a proxy is received, the
investment adviser prepares a summary of the proposals in the proxy. A
discussion of any potential conflicts of interest is also included in the
summary. After reviewing the summary, one or more research analysts familiar
with the company and industry make a voting recommendation on the proxy
proposals. A second recommendation is made by a proxy coordinator (a senior
investment professional) based on the individual's knowledge of the Guidelines
and familiarity with proxy-related issues. The proxy summary and voting
recommendations are then sent to the appropriate proxy voting committee for the
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 Guidelines, 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 Guidelines 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

The Investment Company of America -- Page 18

<PAGE>

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 at americanfunds.com 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 Guidelines is available upon request, free
of charge, by calling American Funds Service Company at 800/421-0180 or visiting
the American Funds website.

DIRECTOR MATTERS -- The election of a company's slate of nominees for
director is generally 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 may also be
supported. Typically, proposals to declassify the board (elect all
directors annually) are supported based on the belief that this increases
the directors' sense of accountability to shareholders.

SHAREHOLDER RIGHTS -- Proposals to repeal an existing poison pill, to
provide for confidential voting and to provide for cumulative voting are
usually supported. 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 are not typically supported.

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 are generally 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, 2007. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.

The Investment Company of America -- Page 19

<PAGE>

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

Edward D. Jones & Co. Class A 18.72%
201 Progress Parkway Class B 11.77
Maryland Heights, MO 63043-3009
- ----------------------------------------------------------------------------
Citigroup Global Markets, Inc. Class B 6.64
333 W. 34th Street Class C 17.46
New York, NY 10001-2402
- ----------------------------------------------------------------------------
MLPF&S Class B 5.25
4800 Deer Lake Drive, East, Floor 2 Class C 15.89
Jacksonville, FL 32246-6484
- ----------------------------------------------------------------------------
Charles Schwab & Co., Inc. Class F 8.39
101 Montgomery Street
San Francisco, CA 94104-4151
- ----------------------------------------------------------------------------
Hartford Life Insurance Co. Class R-1 32.51
P.O. Box 2999 Class R-3 14.28
Hartford, CT 06104-2999
- ----------------------------------------------------------------------------
John Hancock Life Ins. Co. USA Class R-3 16.59
601 Congress Street
Boston, MA 02210-2804
- ----------------------------------------------------------------------------
Saxon & Co. Class R-4 7.91
P.O. Box 7780-1888
Philadelphia, PA 19182-0001
- ----------------------------------------------------------------------------
State Street Bank & Trust Co. Class R-5 66.15
105 Rosemont Road
Westwood, MA 02090-2318
- ----------------------------------------------------------------------------
Fidelity Investments Institutional Operations Co. Class R-5 5.21
100 Magellan Way
Covington, KY 41015-1999
- ----------------------------------------------------------------------------
Mercer Trust Company Class R-5 5.07
1 Investors Way
Norwood, MA 02062-1584
- ----------------------------------------------------------------------------

INVESTMENT ADVISER -- Capital Research and Management Company, the fund's
investment adviser, founded in 1931, maintains research facilities in the United
States and abroad (Los Angeles, San Francisco, New York, Washington, DC, London,
Geneva, Hong Kong, Singapore and Tokyo). These facilities are staffed with
experienced investment professionals. The investment adviser is located at 333
South Hope Street, Los Angeles, CA 90071 and 135 South State College Boulevard,
Brea, CA 92821. It is a wholly owned subsidiary of The Capital Group Companies,
Inc., a holding company for several investment management subsidiaries. The
investment adviser manages equity assets for the American Funds through two
divisions. These divisions generally function separately from each other with
respect to investment research activities and they make investment decisions for
the funds on a separate 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

The Investment Company of America -- Page 20

<PAGE>

funds and accounts, use of information regarding the timing of fund trades,
investment professional compensation and voting relating to portfolio
securities. The investment adviser has adopted policies and procedures that it
believes are reasonably designed to address these issues.

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

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 will vary depending on the
individual's portfolio results, contributions to the organization and other
factors. In order to encourage a long-term focus, bonuses based on investment
results are calculated by comparing pretax total returns to relevant benchmarks
over both the most recent year and a four-year rolling average, with the greater
weight placed on the four-year rolling average. For portfolio counselors,
benchmarks may include measures of the marketplaces in which the relevant 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 also separately compensates analysts for the quality of
their research efforts. The benchmarks against which The Investment Company of
America portfolio counselors are measured include: S&P 500, the securities that
are eligible to be purchased by the fund and Lipper Growth and Income Funds
Index.

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

The Investment Company of America -- Page 21

<PAGE>

THE FOLLOWING TABLE REFLECTS INFORMATION AS OF DECEMBER 31, 2006:

NUMBER NUMBER
OF OTHER OF OTHER NUMBER
REGISTERED POOLED OF OTHER
INVESTMENT INVESTMENT ACCOUNTS
COMPANIES (RICS) VEHICLES (PIVS) THAT
THAT THAT PORTFOLIO
PORTFOLIO PORTFOLIO COUNSELOR
DOLLAR RANGE COUNSELOR COUNSELOR MANAGES AND
OF FUND MANAGES AND MANAGES AND ASSETS OF
PORTFOLIO SHARES ASSETS OF RICS ASSETS OF PIVS OTHER ACCOUNTS
COUNSELOR OWNED/1/ IN BILLIONS/2/ IN BILLIONS/3/ IN BILLIONS/4/
- ---------------------------------------------------------------------------------------------

R. Michael Shanahan Over 3 $206.6 None None
$1,000,000
- ----------------------------------------------------------------------------------------------
James B. Lovelace $100,001 -- 3 $104.0 1 $0.05 None
$500,000
- ----------------------------------------------------------------------------------------------
Donald D. O'Neal $500,001 -- 2 $252.0 1 $0.05 None
$1,000,000
- ----------------------------------------------------------------------------------------------
Joyce E. Gordon Over 3 $104.0 None None
$1,000,000
- ----------------------------------------------------------------------------------------------
J. Dale Harvey $100,001 -- 4 $215.3 None None
$500,000
- ----------------------------------------------------------------------------------------------
James E. Drasdo Over 2 $201.1 None None
$1,000,000
- ----------------------------------------------------------------------------------------------
Darcy B. Kopcho $100,001 -- 1 $ 83.2 None None
$500,000
- ----------------------------------------------------------------------------------------------
C. Ross Sappenfield $100,001 -- 2 $115.2 None None
Sappenfield $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
indicative of the total assets managed by the individual, which is a
substantially lower amount. No fund has an advisory fee that is based on the
performance of the fund.

/3/ Represents funds advised or sub-advised by Capital Research and Management
Company and sold outside the United States and/ or fixed-income assets in
institutional accounts managed by investment adviser subsidiaries of Capital
Group International, Inc., an affiliate of Capital Research and Management
Company. Assets noted are the total net assets of the funds or accounts and are
not indicative of the total assets managed by the individual, which is a
substantially lower amount. No fund or account has an advisory fee that is
based on the performance of the fund or account.

/4/ Reflects other professionally managed accounts held at companies affiliated
with Capital Research and Management Company. Personal brokerage accounts of
portfolio counselors and their families are not reflected.

INVESTMENT ADVISORY AND SERVICE AGREEMENT -- The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the investment adviser will
continue in effect until April 30, 2008, 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

The Investment Company of America -- Page 22

<PAGE>

securities of the fund, and (b) the vote of a majority of directors who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement provides that the investment adviser has no
liability to the fund for its acts or omissions in the performance of its
obligations to the fund not involving willful misconduct, bad faith, gross
negligence or reckless disregard of its obligations under the Agreement. The
Agreement also provides that either party has the right to terminate it, without
penalty, upon 60 days' written notice to the other party, and that the Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).

In addition to providing investment advisory services, the investment adviser
furnishes the services and pays the compensation and travel expenses of persons
to perform the fund's executive, administrative, clerical and bookkeeping
functions, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies and postage used at
the fund's offices. The fund pays all expenses not assumed by the investment
adviser, including, but not limited to: custodian, stock transfer and dividend
disbursing fees and expenses; shareholder recordkeeping and administrative
expenses; costs of the designing, printing and mailing of reports, prospectuses,
proxy statements and notices to its shareholders; taxes; expenses of the
issuance and redemption of fund shares (including stock certificates,
registration and qualification fees and expenses); expenses pursuant to the
fund's plans of distribution (described below); legal and auditing expenses;
compensation, fees and expenses paid to independent directors and members of the
advisory board; 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 fee
that is based on prior month-end net assets, calculated at the annual rate of
0.39% on the first $1 billion of 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 0.258% on net
assets over $5 billion to $8 billion, plus 0.246% on net assets over $8 billion
to $13 billion, plus 0.24% on net assets over $13 billion to $21 billion, plus
0.234% on net assets over $21 billion to $34 billion, plus 0.231% on net assets
over $34 billion to $44 billion, plus 0.228% on net assets over $44 billion to
$55 billion, plus 0.225% on net assets over $55 billion to $71 billion, plus
0.222% on net assets over $71 billion to $89 billion, plus 0.219% on net assets
in excess of $89 billion.

The Agreement provides that if the normal operating expenses of the fund,
including the management fee paid to the investment adviser, and certain
expenses of the fund, for any fiscal year during which the Agreement is in
effect, exceed the expense limitations applicable to the fund imposed by state
securities laws or any regulations thereunder, the investment adviser will
reduce its fee by the extent of such excess and, if required pursuant to any
such laws or regulations, will reimburse the fund in the amount of such excess.
Expenses that are not subject to these limitations are interest, taxes,
brokerage costs, distribution expenses pursuant to a plan under rule 12b-1 and
extraordinary expenses such as litigation and acquisitions. Under the most
restrictive state regulations, as of the effective date of the Agreement, the
investment adviser would be required to reimburse the fund if the normal
operating expenses exceed the lesser of: (i) 1 1/2% of the average value of the
fund's net assets for the fiscal year up to $30 million, plus 1% of the average
value of the fund's net assets for the fiscal year in excess of $30 million or
(ii) 25% of the gross investment income of the fund.

The Investment Company of America -- Page 23

<PAGE>

To the extent the investment adviser is required to reduce its management fee
pursuant to the expense limitations described above due to the expenses of the
Class A shares exceeding the stated limit, the investment adviser will either:
(i) reduce its management fee similarly for other classes of shares or (ii)
reimburse the fund for other expenses to the extent necessary to result in an
expense reduction only for Class A shares of the fund.

For the fiscal years ended December 31, 2006, 2005 and 2004, the investment
adviser was entitled to receive from the fund management fees of $198,992,000,
$182,140,000 and $167,990,000, respectively. After giving effect to the
management fee waiver described below, the fund paid the investment adviser
management fees of $179,093,000 (a reduction of $19,899,000), $166,165,000 (a
reduction of $15,975,000) and $165,092,000 (a reduction of $2,898,000) for the
fiscal years ended December 31, 2006, 2005 and 2004, respectively.

For the period from September 1, 2004 through March 31, 2005, the investment
adviser agreed to waive 5% of the management fees that it was otherwise entitled
to receive under the Agreement. Beginning April 1, 2005, this waiver increased
to 10% of the management fees that the investment adviser is otherwise entitled
to receive. As a result of this waiver, management fees are reduced similarly
for all classes of shares of the fund.

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 April
30, 2008, 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, the fund's
Transfer Agent, to provide 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 and oversees the activities performed by third
parties providing such services. For Class R-1 and R-2 shares, the investment
adviser has agreed to pay a portion of the fees payable under the Administrative
Agreement that would otherwise have been paid by the fund. For the year ended
December 31, 2006, the total fees paid by the investment adviser were $487,000.

As compensation for its services, the investment adviser receives transfer agent
fees for transfer agent services provided to the fund's Class C, F, R and 529
shares. Transfer agent fees are paid monthly according to a fee schedule
contained in a Shareholder Services Agreement between the fund and American
Funds Service Company. The investment adviser also 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 shares) and 529 shares for administrative
services provided to these share classes. Administrative services fees are paid
monthly and accrued daily. The

The Investment Company of America -- Page 24

<PAGE>

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 shares, the administrative services fee is
calculated at the annual rate of up to 0.10% of the average daily net assets.
This fee is subject to the same uses and limitations described above.

During the 2006 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:

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

CLASS C $4,707,000
- ------------------------------------------------------------------------------
CLASS F 1,497,000
- ------------------------------------------------------------------------------
CLASS 529-A 868,000
- ------------------------------------------------------------------------------
CLASS 529-B 243,000
- ------------------------------------------------------------------------------
CLASS 529-C 304,000
- ------------------------------------------------------------------------------
CLASS 529-E 37,000
- ------------------------------------------------------------------------------
CLASS 529-F 8,000
- ------------------------------------------------------------------------------
CLASS R-1 64,000
- ------------------------------------------------------------------------------
CLASS R-2 2,785,000
- ------------------------------------------------------------------------------
CLASS R-3 1,515,000
- ------------------------------------------------------------------------------
CLASS R-4 403,000
- ------------------------------------------------------------------------------
CLASS R-5 1,737,000
- ------------------------------------------------------------------------------

PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds Distributors,
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; 135 South State College Boulevard, Brea, CA 92821; 15370
Barranca Parkway, 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 from sales of the fund's shares. For
Class A and 529-A shares, the Principal Underwriter receives commission revenue
consisting of that portion of the Class A and 529-A sales charge remaining after
the allowances by the Principal Underwriter to investment dealers. For Class B
and 529-B shares, the Principal Underwriter sells the rights to the 12b-1 fees
paid by the fund for distribution expenses to a third party and receives the
revenue remaining after compensating investment dealers for sales of Class B and
529-B shares. The fund also pays the Principal Underwriter for advancing the
immediate service fees paid to qualified dealers of Class B and 529-B shares.
For Class C and 529-C shares, the Principal Underwriter receives any contingent
deferred sales charges that apply during the first year after purchase. The fund
pays the Principal Underwriter for advancing the immediate service fees and
commissions paid to qualified dealers of Class C and 529-C shares. For Class
529-E shares, the fund pays the Principal Underwriter for advancing the
immediate service fees and commissions paid to qualified dealers. For Class F
and 529-F shares, the fund pays the

The Investment Company of America -- Page 25

<PAGE>

Principal Underwriter for advancing the immediate service fees paid to qualified
dealers and advisers who sell Class F and 529-F shares. For Class R-1, R-2, R-3
and R-4 shares, the fund pays the Principal Underwriter for advancing the
immediate service fees paid to qualified dealers and advisers who sell Class
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 2006 $21,449,000 $ 97,597,000
2005 23,259,000 107,667,000
2004 30,647,000 143,628,000
- -----------------------------------------------------------------------------------
CLASS B 2006 1,472,000 9,507,000
2005 1,908,000 12,381,000
2004 3,668,000 24,863,000
- -----------------------------------------------------------------------------------
CLASS C 2006 598,000 4,228,000
2005 1,103,000 4,765,000
2004 1,863,000 7,444,000
- -----------------------------------------------------------------------------------
CLASS 529-A 2006 1,196,000 5,796,000
2005 1,230,000 6,073,000
2004 1,331,000 6,637,000
- -----------------------------------------------------------------------------------
CLASS 529-B 2006 142,000 894,000
2005 189,000 1,148,000
2004 326,000 1,807,000
- -----------------------------------------------------------------------------------
CLASS 529-C 2006 9,000 582,000
2005 23,000 577,000
2004 39,000 640,000
- -----------------------------------------------------------------------------------

The fund has adopted plans of distribution (the "Plans") pursuant to rule 12b-1
under the 1940 Act. The Principal Underwriter receives amounts payable pursuant
to the Plans (see below). 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

The Investment Company of America -- Page 26

<PAGE>

independent directors of the fund who have no direct or indirect financial
interest in the operation of the Plans or the Principal Underwriting Agreement.
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 selection and
nomination of independent directors are committed to the discretion of the
independent directors during the existence of the Plans. The Plans may not be
amended to increase materially the amount spent for distribution without
shareholder approval. Plan expenses are reviewed quarterly and the Plans must be
renewed annually by the board of directors.

Under the Plans, the fund may annually expend the following 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: (a) for Class A shares, up to 0.25% of the average daily
net assets attributable to Class A shares; (b) for Class 529-A shares, up to
0.50% of the average daily net assets attributable to Class 529-A shares; (c)
for Class B and 529-B shares, up to 1.00% of the average daily net assets
attributable to Class B and 529-B shares, respectively; (d) for Class C and
529-C shares, up to 1.00% of the average daily net assets attributable to Class
C and 529-C shares, respectively; (e) for Class 529-E shares, up to 0.75% of the
average daily net assets attributable to Class 529-E shares; (f) for Class F and
529-F shares, up to 0.50% of the average daily net assets attributable to Class
F and 529-F shares, respectively; (g) for Class R-1 shares, up to 1.00% of the
average daily net assets attributable to Class R-1 shares; (h) for Class R-2
shares, up to 1.00% of the average daily net assets attributable to Class R-2
shares; (i) for Class R-3 shares, up to 0.75% of the average daily net assets
attributable to Class R-3 shares; and (j) for Class R-4 shares, up to 0.50% of
the average daily net assets attributable to Class R-4 shares. The fund has not
adopted a Plan for Class R-5 shares; accordingly, no 12b-1 fees are paid from
Class R-5 share assets.

For Class A and 529-A shares: (a) up to 0.25% is reimbursed to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to the amount allowable under the fund's Class
A and 529-A 12b-1 limit, after reimbursement for paying service-related
expenses, is reimbursed to the Principal Underwriter for paying
distribution-related expenses, including dealer commissions and wholesaler
compensation paid on sales of shares of $1 million or more purchased without a
sales charge (including purchases by employer-sponsored defined
contribution-type retirement plans investing $1 million or more or with 100 or
more eligible employees, and retirement plans, endowments and foundations with
$50 million or more in assets -- "no load purchases"). Commissions on no load
purchases of Class A and 529-A shares in excess of the Class A and 529-A plan
limitations not reimbursed to the Principal Underwriter during the most recent
fiscal quarter are recoverable for five quarters, provided the amount recovered
does not cause the fund to exceed the annual expense limit. After five quarters,
these commissions are not recoverable.

For Class B and 529-B shares: (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) 0.75% is paid to the Principal Underwriter for
distribution-related expenses, including the financing of commissions paid to
qualified dealers.

For Class C and 529-C shares: (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.75% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

The Investment Company of America -- Page 27

<PAGE>

For Class 529-E shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.25% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class F and 529-F shares: currently up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers or advisers.

For Class R-1 shares: (a) up to 0.25% is paid to the Principal Underwriter for
paying service-related expenses, including paying service fees to qualified
dealers, and (b) up to 0.75% is paid to the Principal Underwriter for
distribution-related expenses, including commissions paid to qualified dealers.

For Class R-2 shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.50% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class R-3 shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.25% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class R-4 shares: currently up to 0.25% is paid to the Principal Underwriter
for paying service-related expenses, including paying service fees to qualified
dealers or advisers.

As of the end of the 2006 fiscal year, total 12b-1 expenses, and the portion of
the expenses that remained unpaid, were:

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

CLASS A $163,142,000 $14,391,000
- -----------------------------------------------------------------------------
CLASS B 40,236,000 3,603,000
- -----------------------------------------------------------------------------
CLASS C 31,123,000 2,864,000
- -----------------------------------------------------------------------------
CLASS F 3,708,000 362,000
- -----------------------------------------------------------------------------
CLASS 529-A 1,916,000 185,000
- -----------------------------------------------------------------------------
CLASS 529-B 2,138,000 203,000
- -----------------------------------------------------------------------------
CLASS 529-C 2,833,000 292,000
- -----------------------------------------------------------------------------
CLASS 529-E 209,000 20,000
- -----------------------------------------------------------------------------
CLASS 529-F 0 0
- -----------------------------------------------------------------------------
CLASS R-1 391,000 44,000
- -----------------------------------------------------------------------------
CLASS R-2 4,167,000 401,000
- -----------------------------------------------------------------------------
CLASS R-3 3,932,000 385,000
- -----------------------------------------------------------------------------
CLASS R-4 693,000 78,000
- -----------------------------------------------------------------------------

The Investment Company of America -- Page 28

<PAGE>

OTHER COMPENSATION TO DEALERS -- As of January 2007, the top dealers (or their
affiliates) that American Funds Distributors anticipates will receive additional
compensation (as described in the prospectus) include:

A. G. Edwards & Sons, Inc.
AIG Advisors Group:
Advantage Capital Corporation
AIG Financial Advisors, Inc.
American General Securities Incorporated
FSC Securities Corporation
Royal Alliance Associates, Inc.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc.
Cambridge Investment Research, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Deutsche Bank Securities Inc.
Edward Jones
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/PNC Bank:
J.J.B. Hilliard, W.L. Lyons, Inc.
PNC Bank, National Association
PNC Brokerage Corp.
PNC Investments LLC
Lincoln Financial Advisors Corporation:
Lincoln Financial Advisors Corporation
Jefferson Pilot Securities Corporation
LPL Financial Services:
Linsco/Private Ledger Corp.
Uvest Investment Services
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Metlife Enterprises:
Metlife Securities Inc.
Tower Square Securities
New England Securities
Walnut Street Securities, Inc.
MML Investors Services, Inc.

The Investment Company of America -- Page 29

<PAGE>

Morgan Keegan & Company, Inc.
Morgan Stanley DW Inc.
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
Pacific Select Distributors Inc.:
Associated Securities Corp.
Contemporary Financial Solutions, Inc.
M.L. Stern & Co., LLC
Mutual Service Corporation
Sorrento Pacific Financial, LLC
United Planners' Financial Services of America
Waterstone Financial Group, Inc.
Park Avenue Securities LLC
Princor Financial Services Corporation
Raymond James Group:
Raymond James & Associates, Inc.
Raymond James Financial Services Inc.
RBC Dain Rauscher Inc.
Robert W. Baird & Co. Incorporated
Securian/C.R.I.:
CRI Securities, LLC
Securian Financial Services, Inc.
Smith Barney
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
First Clearing LLC
Wells Fargo Investments, L.L.C.

EXECUTION OF PORTFOLIO TRANSACTIONS

As described in the prospectus, the investment adviser places orders with
broker-dealers for the fund's portfolio transactions. Portfolio transactions for
the fund may be executed as part of concurrent authorizations to purchase or
sell the same security for other funds served by the investment adviser, or for
trusts or other accounts served by affiliated companies of the investment
adviser. When such concurrent authorizations occur, the objective is to allocate
the executions in an equitable manner.

Brokerage commissions paid on portfolio transactions, including investment
dealer concessions on underwritings, if applicable, for the fiscal years ended
December 31, 2006, 2005 and 2004 amounted to $26,524,000, $26,787,000 and
$24,089,000. With respect to fixed-income securities, brokerage commissions
include explicit investment dealer concessions and may exclude other transaction
costs which may be reflected in the spread between the bid and asked price. The
volume of securities purchased by the fund in new issues and underwritten
offerings decreased from 2005 to 2006, resulting in a reduction in brokerage
concessions paid on portfolio transactions.

The Investment Company of America -- Page 30

<PAGE>

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., J.P. Morgan Securities
and Wachovia Corporation. As of the fund's most recent fiscal year-end, the fund
held equity securities of Citigroup Inc. in the amount of $1,919,422,000, J.P.
Morgan Chase & Co. in the amount of $712,425,000 and Wachovia Corp. in the
amount of $336,005,000. As of the fund's most recent fiscal year-end, the fund
held debt securities of J.P. Morgan Chase & Co. in the amount of $49,488,000.

DISCLOSURE OF PORTFOLIO HOLDINGS

The fund's investment adviser, on behalf of the fund, has adopted policies and
procedures with respect to the disclosure of information about fund portfolio
securities. These policies and 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 as described above 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 to maintain the confidentiality of such information, preclear
securities trades and report securities transactions activity, as applicable.
Third party service providers of the fund 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 may be bound by agreements (including confidentiality agreements)
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.

The Investment Company of America -- Page 31

<PAGE>

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

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 and accepted by the
fund or the Transfer Agent; the offering or net asset value price is effective
for orders received prior to the time of determination of the net asset value
and, in the case of orders placed with dealers or their authorized designees,
accepted by the Principal Underwriter, the Transfer Agent, a dealer or any of
their designees. In the case of orders sent directly to the fund or the Transfer
Agent, an investment dealer should be indicated. The dealer is responsible for
promptly transmitting purchase and sell orders to the Principal Underwriter.

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

Prices that appear in the newspaper do not always indicate prices at which you
will be purchasing and redeeming shares of the fund, since such prices generally
reflect the previous day's closing price, while purchases and redemptions are
made at the next calculated price. The price you pay for shares, the offering
price, is based on the net asset value per share, which is calculated once daily
as of approximately 4:00 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 1:00 p.m., the fund's share price would still be
determined as of 4:00 p.m. New York time. The New York Stock Exchange is
currently closed on weekends and on the following holidays: New Year's Day;
Martin Luther King, Jr. Day; Presidents' Day; Good Friday; Memorial Day;
Independence Day; Labor Day; Thanksgiving; and Christmas Day. Each share class
of the fund has a separately calculated net asset value (and share price).

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

The Investment Company of America -- Page 32

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1. Equity securities, including depositary receipts, are valued at the
official closing price of, or the last reported sale price on, the exchange or
market on which such securities are traded, as of the close of business on the
day the securities are being valued or, lacking any sales, at the last available
bid price. Prices for each security are taken from the principal exchange or
market in which the security trades. Fixed-income securities are valued at
prices obtained from an independent pricing service, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued at the mean quoted bid and
asked prices (or bid prices, if asked prices are not available) or at prices for
securities of comparable maturity, quality and type. The pricing services base
bond prices on, among other things, an evaluation of the yield curve as of
approximately 3:00 p.m. New York time. The fund's investment adviser performs
certain checks on these prices prior to calculation of the fund's net asset
value.

Securities with both fixed-income and equity characteristics (e.g., convertible
bonds, preferred stocks, units comprised of more than one type of security,
etc.), or equity securities traded 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 non-U.S. currencies 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 ensure that certain basic principles and factors are
considered 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. The valuation committee considers all
indications of value available to it in determining the fair value to be
assigned to a particular security, including, without limitation, 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 investing substantial portions 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

The Investment Company of America -- Page 33

<PAGE>

these fund's net asset values are next determined) which affect the value of
portfolio securities, appropriate adjustments from closing market prices may be
made to reflect these events. Events of this type could include, for example,
earthquakes and other natural disasters or significant price changes in other
markets (e.g., U.S. stock markets).

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

TAXES AND DISTRIBUTIONS

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

To be treated as a regulated investment company under Subchapter M of the Code,
the fund must also (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, net income from certain
publicly traded partnerships and gains from the sale or other disposition of
securities or foreign currencies, or other income (including, but not limited
to, gains from options, futures or forward contracts) derived with respect to
the business of investing in such securities or currencies, and (b) diversify
its holdings so that, at the end of each fiscal quarter, (i) at least 50% of the
market value of the fund's assets is represented by cash, U.S. government
securities and securities of other regulated investment companies, and other
securities (for purposes of this calculation, generally limited in respect of
any one issuer, to an amount not greater than 5% of the market value of the
fund's assets and 10% of the outstanding voting securities of such issuer) and
(ii) not more than 25% of the value of its assets is invested in the securities
of (other than U.S. government securities or the securities of other regulated
investment companies) any one issuer; 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

The Investment Company of America -- Page 34

<PAGE>

investment company's taxable year over the "distributed amount" for such
calendar year. The term "required distribution" means the sum of (a) 98% of
ordinary income (generally net investment income) for the calendar year, (b) 98%
of capital gain (both long-term and short-term) for the one-year period ending
on October 31 (as though the one-year period ending on October 31 were the
regulated investment company's taxable year) and (c) the sum of any untaxed,
undistributed net investment income and net capital gains of the regulated
investment company for prior periods. The term "distributed amount" generally
means the sum of (a) amounts actually distributed by the fund from its current
year's ordinary income and capital gain net income and (b) any amount on which
the fund pays income tax during the periods described above. Although the fund
intends to distribute its net investment income and net capital gains so as to
avoid excise tax liability, the fund may determine that it is in the interest of
shareholders to distribute a lesser amount.

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

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

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

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

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

The Investment Company of America -- Page 35

<PAGE>

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. Under this election, deductions for
losses are allowable only to the extent of any prior recognized gains, and
both gains and losses will be treated as ordinary income or loss. The fund
will be required to distribute any resulting income, even though it has not
sold the security and received cash to pay such distributions. Upon
disposition of these securities, any gain recognized is treated as ordinary
income and loss is treated as ordinary loss to the extent of any prior
recognized gain.

Dividends from domestic corporations are expected to comprise some portion
of the fund's gross income. To the extent that such dividends constitute
any of the fund's gross income, a portion of the income distributions of
the fund may be eligible for the deduction for dividends received by
corporations. Corporate shareholders will be informed of the portion of
dividends that so qualifies. The dividends-received deduction is reduced to
the extent that either the fund shares, or the underlying shares of stock
held by the fund, with respect to which dividends are received, are treated
as debt-financed under federal income tax law, and is eliminated if the
shares are deemed to have been held by the shareholder or the fund, as the
case may be, for less than 46 days during the 90-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.

The Investment Company of America -- Page 36

<PAGE>

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

CAPITAL GAIN DISTRIBUTIONS -- The fund also intends to follow the practice
of distributing the entire excess of net realized long-term capital gains
over net realized short-term capital losses. Net capital gains for a fiscal
year are computed by taking into account any capital loss carry forward 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 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 meets the requisite holding
period requirement, qualified dividends are taxable at a maximum rate of
15%.

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

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

The Investment Company of America -- Page 37

<PAGE>

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.

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

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

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

The Investment Company of America -- Page 38

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

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

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

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

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

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

American Funds
3500 Wiseman Blvd.
San Antonio, TX 78251-4321

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 document for more
information regarding this service.

BY INTERNET -- using americanfunds.com. Please see the "Shareholder account
services and privileges" section of this document 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

The Investment Company of America -- Page 39

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Your bank should include the following information when wiring funds:

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

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

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

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

Class 529 shares may be purchased only through CollegeAmerica by investors
establishing qualified higher education savings accounts. Class 529-E shares may
be purchased only by investors participating in CollegeAmerica through an
eligible employer plan. Class R-5 shares are also available to clients of the
Personal Investment Management group of Capital Guardian Trust Company who do
not have an intermediary associated with their accounts and without regard to
the $1 million purchase minimum. In addition, the American Funds state
tax-exempt funds are qualified for sale only in certain jurisdictions, and
tax-exempt funds in general should not serve as retirement plan investments. The
fund and the Principal Underwriter reserve the right to reject any purchase
order.

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.

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:

The Investment Company of America -- Page 40

<PAGE>

. 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 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 minimum amount for
subsequent purchases.

EXCHANGES -- You may only exchange shares into other American Funds within the
same share class. However, exchanges from Class A shares of The Cash Management
Trust of America may be made to Class B or C shares of other American Funds for
dollar cost averaging purposes. Exchanges are not permitted from Class A shares
of The Cash Management Trust of America to Class B or C shares of Intermediate
Bond Fund of America, Limited Term Tax-Exempt Bond Fund of America and
Short-Term Bond Fund of America. Exchange purchases are subject to the minimum
investment requirements of the fund purchased and no sales charge generally
applies. However, exchanges of shares from American Funds money market funds are
subject to applicable sales charges on the fund being purchased, unless the
money market fund shares were acquired by an exchange from a fund having a sales
charge, or by reinvestment or cross-reinvestment of dividends or capital gain
distributions. Exchanges of Class F shares generally may only be made through
fee-based programs of investment firms that have special agreements with the
fund's distributor and certain registered investment advisers.

You may exchange shares of other classes by contacting the Transfer Agent, by
contacting your investment dealer or financial adviser, by using American
FundsLine or americanfunds.com, or by telephoning 800/421-0180 toll-free, or
faxing (see "American Funds Service Company service areas" in the prospectus for
the appropriate fax numbers) the Transfer Agent. For more information, see
"Shareholder account services and privileges" below. 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" above).

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
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.

The Investment Company of America -- Page 41

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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

AUTOMATIC CONVERSIONS -- As described more fully in the prospectus, Class
B, 529-B and C shares automatically convert to Class A, 529-A and F shares,
respectively, after a certain period from the purchase date.

MOVING FROM CLASS B TO CLASS A SHARES -- Under the right of reinvestment
policy as described in the prospectus, if you redeem Class B shares during
the contingent deferred sales charge period, you may reinvest the proceeds
in Class A shares without paying a Class A sales charge if you notify
American Funds Service Company and the reinvestment occurs within 90 days
after the date of redemption. If you redeem your Class B shares after the
contingent deferred sales charge period, you may either 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.

MOVING FROM CLASS C TO CLASS A SHARES -- If you redeem Class C shares and
with the redemption proceeds purchase Class A shares, you are still
responsible for paying any Class C contingent deferred sales charges and
applicable Class A sales charges.

MOVING FROM CLASS F TO CLASS A SHARES -- You can redeem Class F shares held
in a qualified fee-based program and with the redemption proceeds purchase
Class A shares without paying an initial Class A sales charge if all of the
following 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 and purchase the Class A
shares within 90 days after redeeming the Class F shares.

MOVING FROM CLASS A TO CLASS F SHARES -- If you are part of a qualified
fee-based program and you wish to redeem your Class A shares and with the
redemption proceeds purchase Class F shares for 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.

MOVING FROM CLASS A TO CLASS R SHARES -- Provided it is eligible to invest
in Class R shares, a retirement plan currently invested in Class A shares
may redeem its shares and purchase Class R shares with the redemption
proceeds. Any Class A sales charges that the retirement plan previously
paid will not be credited back to the plan's account.

NON-REPORTABLE TRANSACTIONS -- As described above, automatic conversions
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 or vice
versa, 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.

The Investment Company of America -- Page 42

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SALES CHARGES

CLASS A PURCHASES

PURCHASES BY CERTAIN 403(B) PLANS

Individual 403(b) plans may be treated similarly to employer-sponsored
plans for Class A sales charge purposes (i.e., individual participant
accounts are eligible to be aggregated together) if: (a) the American Funds
are principal investment options; (b) the employer facilitates the
enrollment process by, for example, allowing for onsite group enrollment
meetings held during working hours; and (c) there is only one dealer firm
assigned to the plans.

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 and employees of the
above persons, and trusts or plans primarily for such persons;

(2) currently registered representatives and assistants directly employed
by such representatives, retired registered representatives with
respect to accounts established while active, or full-time employees
(collectively, "Eligible Persons") (and their (a) spouses or
equivalents if recognized under local law, (b) parents and children,
including parents and children in step and adoptive relationships,
sons-in-law and daughters-in-law, and (c) parents-in-law, if the
Eligible Persons or the spouses, children or parents of the Eligible
Persons are listed in the account registration with the
parents-in-law) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such
dealers), plans for the dealers, and plans that include as
participants only the Eligible Persons, their spouses, parents and/or
children;

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

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(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:

. 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 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

The Investment Company of America -- Page 44

<PAGE>

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 to $4
million, 0.50% on amounts over $4 million to $10 million and 0.25% on amounts
over $10 million. Commissions are based on cumulative investments and are not
annually reset.

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

SALES CHARGE REDUCTIONS AND WAIVERS

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

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

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.

The Statement may be revised upward at any time during the Statement
period, and such a revision will be treated as a new Statement, except that
the Statement period during which the purchases must be made will remain
unchanged. Purchases made from the date of revision will receive the
reduced sales charge, if any, resulting from the revised Statement.

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

The Investment Company of America -- Page 45

<PAGE>

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 at that time. After such termination, these
plans are eligible for additional sales charge reductions by meeting the
criteria under the fund's rights of accumulation policy.

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, individual
403(b) plan (see exception in "Purchases by certain 403(b) plans"
under "Sales charges") or single-participant Keogh-type plan;

. 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;

. 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-

The Investment Company of America -- Page 46

<PAGE>

sponsored retirement plans established for the benefit of the
employees of such organizations, their endowments, or their
foundations; or

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

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 individual holdings in Endowments, American
Legacy variable annuity contracts and variable life insurance policies.
Shares of money market funds purchased through an exchange, reinvestment or
cross-reinvestment from a fund having a sales charge also qualify. However,
direct purchases of American Funds money market funds are excluded.

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, to determine your sales charge on investments in accounts
eligible to be aggregated. Subject to your investment dealer's or
recordkeeper's capabilities, your accumulated holdings will be calculated
as the higher of (a) the current value of your existing holdings (the
"market value") or (b) the amount you invested (including reinvested
dividends and capital gains, but excluding capital appreciation) less any
withdrawals (the "cost value"). Depending on the entity on whose books your
account is held, the value of your holdings in that account may not be
eligible for calculation at cost value. For example, accounts held in
nominee or street name are not eligible for calculation at cost value and
instead will be calculated at market value for purposes of rights of
accumulation.

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

When determining your American Funds Class A sales charge, if your
investment is not in an employer-sponsored retirement plan, you may also
take into account the market value (as of the end of the week prior to your
American Funds investment) of your individual holdings in various American
Legacy variable annuity contracts and variable life insurance policies. An
employer-sponsored retirement plan may also take into account the market
value of its investments in American Legacy Retirement Investment Plans.
Direct purchases of American Funds money market funds are excluded. If you
make a gift

The Investment Company of America -- Page 47

<PAGE>

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 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 postpurchase 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 a systematic withdrawal plan (SWP) (see "Automatic
withdrawals" under "Shareholder account services and privileges"
below). For each SWP 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 SWP payment, shares subject to the lowest CDSC will be
redeemed next until the 12% limit is reached. Any dividends and/or
capital gain distributions taken in cash by a shareholder who receives
payments through a SWP will also count toward the 12% limit. In the
case of a SWP, the 12% limit is calculated at the time a systematic
redemption is first made, and is recalculated at the time each
additional systematic redemption is made. Shareholders who establish a
SWP should be aware that the amount of a payment not subject to a CDSC
may vary over time depending on fluctuations in the value of their
accounts. This privilege may be revised or terminated at any time.

For purposes of this paragraph, "account" means:

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

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

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

CDSC waivers are allowed only in the cases listed here and in the prospectus.
For example, CDSC waivers will not be allowed on redemptions of Class 529-B and
529-C shares due to termination of CollegeAmerica; a determination by the
Internal Revenue Service that CollegeAmerica

The Investment Company of America -- Page 48

<PAGE>

does not qualify as a qualified tuition program under the Code; proposal or
enactment of law that eliminates or limits the tax-favored status of
CollegeAmerica; or elimination of the fund by the Virginia College Savings Plan
as an option for additional investment within CollegeAmerica.

SELLING SHARES

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

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 National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution. The Transfer Agent reserves the
right to require a signature guarantee on any redemptions.

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

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

Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 10
business days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the 1940 Act), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.

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

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders. However, certain services and privileges 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 ($50 minimum
per fund; $25 minimum per fund in the case of employer-sponsored 529 accounts)
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

The Investment Company of America -- Page 49

<PAGE>

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 will automatically be converted to having all dividends and other
distributions reinvested in additional shares.

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

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

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

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

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

AUTOMATIC WITHDRAWALS -- For all share classes, except the R and 529 classes of
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.

The Investment Company of America -- Page 50

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Withdrawal payments are not to be considered as dividends, yield or income.
Automatic investments may not be made into a shareholder account from which
there are automatic withdrawals. Withdrawals of amounts exceeding reinvested
dividends and distributions and increases in share value would reduce the
aggregate value of the shareholder's account. The Transfer Agent arranges for
the redemption by the fund of sufficient shares, deposited by the shareholder
with the Transfer Agent, to provide the withdrawal payment specified.

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

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

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

TELEPHONE AND INTERNET PURCHASES, REDEMPTIONS AND EXCHANGES -- By using the
telephone (including American FundsLine) or the Internet (including
americanfunds.com), or fax purchase, redemption and/or exchange options, you
agree to hold the fund, the Transfer Agent, any of its affiliates or mutual
funds managed by such affiliates, and each of their respective directors,
trustees, officers, employees and agents harmless from any losses, expenses,
costs or liability (including attorney fees) that may be incurred in connection
with the exercise of these privileges. Generally, all shareholders are
automatically eligible to use these services. However, you may elect to opt out
of these services by writing the Transfer Agent (you may also reinstate them at
any time by writing the Transfer Agent). If the Transfer Agent does not employ
reasonable procedures to confirm that the instructions received from any person
with appropriate account information are genuine, it and/or the fund may be
liable for losses due to unauthorized or fraudulent instructions. In the event
that shareholders are unable to reach the fund by telephone because of technical
difficulties, market conditions or a natural disaster, redemption and exchange
requests may be made in writing only.

CHECKWRITING -- You may establish check writing privileges for Class A shares
(but not Class 529-A shares) of American Funds money market funds. 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.

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<PAGE>

REDEMPTION OF SHARES -- The fund's Certificate of Incorporation permits 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 Certificate of
Incorporation permits payment of the redemption price wholly or partly in
securities or other property included in the assets belonging to the fund when
in the opinion of the fund's board of directors, which shall be conclusive,
conditions exist which make payment wholly in cash unwise or undesirable.

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

GENERAL INFORMATION

CUSTODIAN OF ASSETS -- Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017-2070, as
Custodian. If the fund holds non-U.S. securities, the Custodian may hold these
securities pursuant to subcustodial arrangements in non-U.S. banks or non-U.S.
branches of U.S. banks.

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 135 South State College Boulevard, Brea, CA 92821-5823. American
Funds Service Company was paid a fee of $54,083,000 for Class A shares and
$3,476,000 for Class B shares for the 2006 fiscal year. American Funds Service
Company is also compensated for certain transfer agency services provided to all
other share classes from the administrative services fees paid to Capital
Research and Management Company, 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 -- PricewaterhouseCoopers LLP, 350
South Grand Avenue, Los Angeles, CA 90071, 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 so included in reliance
on the report of PricewaterhouseCoopers LLP, independent registered public
accounting firm, given on the authority of said firm as experts in accounting
and auditing. The

The Investment Company of America -- Page 52

<PAGE>

selection of the fund's independent registered public accounting firm is
reviewed and determined annually by the board of directors.

INDEPENDENT LEGAL COUNSEL -- O'Melveny & Myers LLP, 400 South Hope Street, Los
Angeles, CA 90071, serves as counsel for the fund and for independent directors
in their capacities as such. Certain legal matters in connection with the
capital shares offered by the prospectus have been passed upon for the fund by
O'Melveny & Myers LLP. Counsel does not provide legal services to the fund's
investment adviser or any of its affiliated companies or control persons. A
determination with respect to the independence of the fund's "independent legal
counsel" will be made at least annually by the independent directors of the
fund, as prescribed by the 1940 Act and related rules.

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

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 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, the NASD Hearing Panel ruled against the Principal Underwriter
and imposed a $5 million fine. The Principal Underwriter has appealed this
decision to the NASD's National Adjudicatory Council.

On March 24, 2005, the investment adviser and Principal Underwriter filed a
complaint against the Attorney General of the State of California in Los Angeles
County Superior Court. The complaint alleged that the Attorney General
threatened to take enforcement actions against the investment adviser and
Principal Underwriter that are without merit and preempted by federal law. On
the same day, following the filing of the investment adviser's and Principal
Underwriter's complaint, the Attorney General of the State of California filed a
complaint against the Principal Underwriter and investment adviser. Filed in Los
Angeles County Superior Court, the Attorney General's complaint alleged
violations of certain sections of the California Corporations Code with respect
to so-called "revenue sharing" disclosures in mutual fund prospectuses and

The Investment Company of America -- Page 53

<PAGE>

statements of additional information. On November 22, 2005, the Los Angeles
Superior Court dismissed the Attorney General's complaint. The Attorney General
subsequently appealed the Superior Court's decision to California's Court of
Appeal for the Second Appellate District. On January 26, 2007, the Court of
Appeal issued a ruling allowing the California Attorney General to proceed with
his civil action.

The investment adviser and Principal Underwriter believe that the likelihood
that these matters 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. The SEC is conducting a related investigation
as of the date of this statement of additional information. The investment
adviser and Principal Underwriter are cooperating fully. In addition, class
action lawsuits have been filed in the U.S. District Court, Central District of
California, relating to these matters. The investment adviser believes that
these suits are without merit and will defend itself vigorously. Further updates
on these issues will be available on the American Funds website
(americanfunds.com) under "American Funds regulatory matters."

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

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- DECEMBER 31, 2006

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $33.51
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). . . . . . . . . . . . . . . . $35.55

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

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

The Investment Company of America -- Page 54

<PAGE>

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

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
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
The Cash Management Trust of
America . . . . . . . . . . . . 1009 1209 1309 1509 1409

The Investment Company of America -- Page 55

<PAGE>

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

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

The Investment Company of America -- Page 56

<PAGE>

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

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

The Investment Company of America -- Page 57

<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.

The Investment Company of America -- Page 58

<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.

The Investment Company of America -- Page 59

<PAGE>

C
The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

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.

The Investment Company of America -- Page 60

financials

[logo - American Funds ^®]

The Investment Company of America^®

Investment portfolio

December 31, 2006


Common stocks — 84.32%	Shares	Market value (000)

ENERGY — 8.87%
Baker Hughes Inc.	7,825,000	$ 584,214
Chevron Corp.	19,702,278	1,448,708
ConocoPhillips	11,843,340	852,128
Exxon Mobil Corp.	6,481,500	496,677
Halliburton Co.	5,040,000	156,492
Hess Corp.	3,546,300	175,790
Marathon Oil Corp.	6,800,000	629,000
Murphy Oil Corp.	4,100,000	208,485
Occidental Petroleum Corp.	2,000,000	97,660
Royal Dutch Shell PLC, Class A (ADR)	17,970,000	1,272,096
Royal Dutch Shell PLC, Class B	833,265	29,204
Royal Dutch Shell PLC, Class B (ADR)	2,370,498	168,661
Schlumberger Ltd.	22,200,000	1,402,152
TOTAL SA	5,280,000	380,716
		7,901,983

MATERIALS — 3.34%
Air Products and Chemicals, Inc.	2,750,000	193,270
Alcoa Inc.	10,806,400	324,300
Barrick Gold Corp.	23,786,250	730,238
Barrick Gold Corp. (CAD denominated)	1,114,350	34,303
Dow Chemical Co.	9,479,800	378,623
International Paper Co.	6,997,235	238,606
MeadWestvaco Corp.	4,085,000	122,795
Newmont Mining Corp.	9,500,000	428,925
PPG Industries, Inc.	1,913,900	122,892
Rio Tinto PLC	6,044,473	321,677
Weyerhaeuser Co.	1,175,000	83,014
		2,978,643

INDUSTRIALS — 9.71%
3M Co.	1,400,000	109,102
Boeing Co.	7,300,000	648,532
Burlington Northern Santa Fe Corp.	4,000,000	295,240
Caterpillar Inc.	8,000,000	490,640
Cummins Inc.	1,700,000	200,906
Deere & Co.	4,400,000	418,308
FedEx Corp.	1,500,000	162,930
General Dynamics Corp.	6,745,800	501,550
General Electric Co.	49,600,000	1,845,616
Illinois Tool Works Inc.	7,400,000	341,806
Mitsubishi Corp.	4,035,000	75,953
Northrop Grumman Corp.	3,400,000	230,180
Parker Hannifin Corp.	1,790,400	137,646
Raytheon Co.	3,399,800	179,509
Siemens AG	2,680,000	265,694
Southwest Airlines Co.	9,000,000	137,880
Tyco International Ltd.	47,160,100	1,433,667
Union Pacific Corp.	1,500,000	138,030
United Parcel Service, Inc., Class B	4,965,700	372,328
United Technologies Corp.	10,190,000	637,079
Waste Management, Inc.	600,000	22,062
		8,644,658

CONSUMER DISCRETIONARY — 8.74%
Best Buy Co., Inc.	14,017,300	689,511
Carnival Corp., units	13,000,000	637,650
CBS Corp., Class B	1,250,000	38,975
Clear Channel Communications, Inc.	6,500,000	231,010
Comcast Corp., Class A¹	2,857,900	120,975
Ford Motor Co.	2,500,000	18,775
General Motors Corp.	12,830,000	394,138
Harley-Davidson, Inc.	2,000,000	140,940
Honda Motor Co., Ltd.	2,265,000	89,458
Kohl’s Corp.¹	1,600,000	109,488
Liberty Media Holding Corp., Liberty Capital, Series A¹	589,000	57,710
Liberty Media Holding Corp., Liberty Interactive, Series A¹	2,945,000	63,524
Limited Brands, Inc.²	20,042,743	580,037
Lowe’s Companies, Inc.	53,236,600	1,658,320
McDonald’s Corp.	1,600,000	70,928
Omnicom Group Inc.	1,500,000	156,810
Target Corp.	22,475,000	1,282,199
Time Warner Inc.	18,250,000	397,485
TJX Companies, Inc.	8,350,000	238,142
Toyota Motor Corp.	10,055,000	672,587
Viacom Inc., Class B¹	3,250,000	133,347
		7,782,009

CONSUMER STAPLES — 9.39%
Altria Group, Inc.	46,500,000	3,990,630
Anheuser-Busch Companies, Inc.	3,500,000	172,200
Avon Products, Inc.	9,520,000	314,541
Coca-Cola Co.	6,820,000	329,065
ConAgra Foods, Inc.	4,000,000	108,000
General Mills, Inc.	2,858,700	164,661
H.J. Heinz Co.	4,475,700	201,451
Kraft Foods Inc., Class A	2,100,000	74,970
PepsiCo, Inc.	14,200,000	888,210
Procter & Gamble Co.	2,800,000	179,956
Reynolds American Inc.	8,923,332	584,211
Sara Lee Corp.	5,000,000	85,150
SYSCO Corp.	1,723,900	63,371
Unilever NV (New York registered)	6,450,000	175,762
UST Inc.	2,000,000	116,400
Walgreen Co.	12,595,000	577,985
Wal-Mart Stores, Inc.	7,250,000	334,805
		8,361,368

HEALTH CARE — 8.88%
Abbott Laboratories	15,750,000	$ 767,182
Aetna Inc.	11,975,000	517,080
Amgen Inc.¹	2,750,000	187,852
AstraZeneca PLC (ADR)	4,534,500	242,822
AstraZeneca PLC (Sweden)	4,909,500	263,605
AstraZeneca PLC (United Kingdom)	3,215,000	172,734
Becton, Dickinson and Co.	1,500,000	105,225
Boston Scientific Corp.¹	9,394,850	161,404
Bristol-Myers Squibb Co.	26,250,000	690,900
Cardinal Health, Inc.	2,400,000	154,632
Eli Lilly and Co.	14,585,000	759,878
Johnson & Johnson	600,000	39,612
McKesson Corp.	2,600,000	131,820
Medco Health Solutions, Inc.¹	971,000	51,890
Merck & Co., Inc.	15,750,000	686,700
Novartis AG (ADR)	256,556	14,737
Pfizer Inc	16,200,900	419,603
Roche Holding AG	5,135,000	920,727
Schering-Plough Corp.	18,486,300	437,016
UnitedHealth Group Inc.	11,000,000	591,030
WellPoint, Inc.¹	6,425,000	505,583
Wyeth	1,685,000	85,800
		7,907,832

FINANCIALS — 12.27%
Allstate Corp.	1,000,000	65,110
American International Group, Inc.	10,713,900	767,758
Aon Corp.	1,300,000	45,942
Bank of America Corp.	12,834,320	685,224
Berkshire Hathaway Inc., Class A¹	3,050	335,469
Capital One Financial Corp.	3,500,000	268,870
Chubb Corp.	1,000,000	52,910
Citigroup Inc.	34,460,000	1,919,422
Fannie Mae	25,865,600	1,536,158
Freddie Mac	5,750,000	390,425
Hartford Financial Services Group, Inc.	2,250,000	209,947
HSBC Holdings PLC (ADR)	1,079,588	98,944
HSBC Holdings PLC (United Kingdom)	17,037,111	310,569
J.P. Morgan Chase & Co.	14,750,001	712,425
Lloyds TSB Group PLC	15,000,000	167,850
Marsh & McLennan Companies, Inc.	7,550,000	231,483
National City Corp.	7,600,000	277,856
PNC Financial Services Group, Inc.	3,560,000	263,582
U.S. Bancorp	8,000,000	289,520
Wachovia Corp.	5,900,000	336,005
Washington Mutual, Inc.	25,400,000	1,155,446
Wells Fargo & Co.	18,660,000	663,550
XL Capital Ltd., Class A	2,000,000	144,040
		10,928,505

INFORMATION TECHNOLOGY — 13.83%
Altera Corp.¹	6,000,000	118,080
Analog Devices, Inc.	8,050,000	264,603
Applied Materials, Inc.	16,950,000	312,728
Automatic Data Processing, Inc.	3,625,000	178,531
Canon, Inc.	2,700,000	152,017
Cisco Systems, Inc.¹	31,320,400	855,987
Corning Inc.¹	11,000,000	205,810
eBay Inc.¹	4,000,000	120,280
Electronic Data Systems Corp.	1,500,000	41,325
First Data Corp.	2,600,000	66,352
Google Inc., Class A¹	225,000	103,608
Hewlett-Packard Co.	22,000,000	906,180
Intel Corp.	38,140,000	772,335
International Business Machines Corp.	11,820,000	1,148,313
KLA-Tencor Corp.	1,825,000	90,794
Linear Technology Corp.	7,350,000	222,852
Maxim Integrated Products, Inc.	14,995,000	459,147
Micron Technology, Inc.¹	10,000,000	139,600
Microsoft Corp.	54,310,000	1,621,697
Motorola, Inc.	9,500,000	195,320
Nokia Corp.	34,327,550	701,117
Nokia Corp. (ADR)	14,387,350	292,351
Oracle Corp.¹	82,770,100	1,418,680
Sabre Holdings Corp., Class A	1,000,000	31,890
Samsung Electronics Co., Ltd.	744,000	490,664
Sun Microsystems, Inc.¹	25,010,000	135,554
Taiwan Semiconductor Manufacturing Co. Ltd.	159,743,480	330,960
Texas Instruments Inc.	25,000,000	720,000
Western Union Co.	1,600,000	35,872
Xilinx, Inc.	7,650,000	182,147
		12,314,794

TELECOMMUNICATION SERVICES — 6.00%
ALLTEL Corp.	2,000,000	120,960
AT&T Inc.	67,305,497	2,406,172
BellSouth Corp.	27,900,000	1,314,369
Qwest Communications International Inc.¹	26,829,700	224,565
Sprint Nextel Corp., Series 1	51,177,300	966,739
Verizon Communications Inc.	2,183,200	81,302
Vodafone Group PLC	71,187,500	197,230
Windstream Corp.	2,067,853	29,405
		5,340,742

UTILITIES — 2.19%
American Electric Power Co., Inc.	1,000,000	42,580
Dominion Resources, Inc.	7,131,912	597,940
Duke Energy Corp.	4,000,000	132,840
E.ON AG	1,025,000	139,066
Exelon Corp.	5,275,500	326,501
FirstEnergy Corp.	1,138,500	68,652
FPL Group, Inc.	3,800,000	206,796
PPL Corp.	2,900,000	103,936
Public Service Enterprise Group Inc.	5,000,000	331,900
		1,950,211

MISCELLANEOUS — 1.10%
Other common stocks in initial period of acquisition		979,731


Total common stocks (cost: $48,720,705,000)		75,090,476


Warrants — 0.00%	Shares	Market value (000)

INDUSTRIALS — 0.00%
Raytheon Co., warrants, expire 2011¹	148,257	$ 2,657


Total warrants (cost: $1,835,000)		2,657





Convertible securities — 0.48%	Shares or principal amount

CONSUMER DISCRETIONARY — 0.19%
Ford Motor Co. Capital Trust II 6.50% cumulative convertible trust preferred 2032	3,000,000	102,600
Ford Motor Co. 4.25% convertible notes 2036	$63,200,000	67,861
		170,461

FINANCIALS — 0.11%
Fannie Mae 5.375% convertible preferred	970	96,636


TELECOMMUNICATION SERVICES — 0.18%
Qwest Communications International Inc. 3.50% convertible debenture 2025	$100,000,000	156,875


Total convertible securities (cost: $356,975,000)		423,972





Short-term securities — 15.29%	Principal amount (000)

3M Co. 5.18% due 1/30/2007	$ 20,300	20,212
Abbott Laboratories 5.19%-5.23% due 1/25-3/29/2007³	290,500	288,257
AIG Funding, Inc. 5.215% due 1/23/2007	50,000	49,835
International Lease Finance Corp. 5.21%-5.23% due 1/4-2/12/2007	273,000	272,034
American Express Credit Corp. 5.20%-5.27% due 1/17-1/18/2007	84,000	83,792
Anheuser-Busch Cos. Inc. 5.19% due 2/14/2007³	25,000	24,843
AT&T Inc. 5.25% due 1/18/2007³	50,000	49,875
Atlantic Industries 5.22% due 3/5/2007³	30,000	29,728
Coca-Cola Co. 5.17% due 3/21-3/23/2007³	70,000	69,188
Bank of America Corp. 5.22%-5.25% due 1/5-3/28/2007	449,200	446,095
Ranger Funding Co. LLC 5.25% due 3/1/2007³	26,800	26,557
Becton, Dickinson and Co. 5.21% due 2/8/2007	20,200	20,086
CAFCO, LLC 5.23%-5.25% due 1/8-1/19/2007³	278,000	277,418
Ciesco LLC 5.22%-5.23% due 1/12-2/15/2007³	150,000	149,504
Citigroup Funding Inc. 5.23% due 1/22/2007	50,000	49,845
Caterpillar Financial Services Corp. 5.21%-5.23% due 1/5-1/22/2007	70,000	69,900
Chevron Funding Corp. 5.21% due 1/16/2007	100,000	99,768
CIT Group, Inc. 5.21%-5.25% due 1/30-4/2/2007³	318,800	316,446
Clipper Receivables Co., LLC 5.23%-5.26% due 1/4-3/2/2007³	438,200	437,121
Edison Asset Securitization LLC 5.22%-5.24% due 2/5-2/13/2007³	289,300	287,640
General Electric Capital Services, Inc. 5.22%-5.23% due 1/18-2/21/2007	90,000	89,591
Fannie Mae 3.00%-5.16% due 1/3-3/28/2007	1,492,763	1,482,468
FCAR Owner Trust I 5.26%-5.27% due 1/9-1/19/2007	137,600	137,328
Federal Farm Credit Banks 5.08%-5.14% due 1/4-4/19/2007	329,235	326,492




Short-term securities	Principal amount (000)	Market value (000)

Federal Home Loan Bank 5.065%-5.18% due 1/3-3/21/2007	$2,088,630	$ 2,076,840
Freddie Mac 5.04%-5.17% due 1/2-3/30/2007	2,423,000	2,407,045
Harley-Davidson Funding Corp.5.20%-5.23% due 1/4-2/26/2007³	50,500	50,248
Hershey Co. 5.19%-5.20% due 1/12-2/14/2007³	35,000	34,848
Hewlett-Packard Co. 5.25% due 1/19/2007³	36,000	35,900
HSBC Finance Corp. 5.20%-5.23% due 1/8-2/12/2007	364,100	363,236
IBM Capital Inc. 5.20% due 3/16/2007³	28,700	28,394
IBM Corp. 5.19%-5.23% due 1/5-2/15/2007³	150,000	149,354
International Bank for Reconstruction and Development 5.12%-5.15% due 1/19-1/29/2007	179,800	179,206
J.P. Morgan Chase & Co. 5.23% due 3/13/2007	50,000	49,488
Jupiter Securitization Co., LLC 5.24%-5.25% due 1/17-2/9/2007³	161,638	161,047
Park Avenue Receivables Co., LLC 5.25%-5.26% due 1/8-2/1/2007³	221,795	221,190
Johnson & Johnson 5.18% due 1/19-1/23/2007³	125,000	124,629
Kimberly-Clark Worldwide Inc. 5.22% due 2/21/2007³	35,000	34,751
Medtronic Inc. 5.20% due 1/11/2007³	25,000	24,961
NetJets Inc. 5.18%-5.19% due 2/9-2/23/2007³	73,500	73,026
Pfizer Investment Capital PLC 5.20%-5.22% due 2/8-2/23/2007³	150,000	148,995
Private Export Funding Corp. 5.21%-5.22% due 1/23-2/8/2007³	36,825	36,646
Procter & Gamble Co. 5.24% due 2/23/2007³	38,700	38,396
Procter & Gamble International Funding S.C.A. 5.24%-5.27% due 1/8-2/12/2007³	341,000	339,517
SunTrust Banks Inc. 5.29% due 2/5/2007	100,000	99,996
Three Pillars Funding, LLC 5.25%-5.31% due 1/2-3/26/2007³	209,056	208,204
Tennessee Valley Authority 5.10%-5.11% due 1/4-3/15/2007	125,000	124,156
Triple-A One Funding Corp. 5.25% due 1/29/2007³	9,333	9,294
U.S. Treasury Bills 4.805%-4.955% due 1/11-3/22/2007	866,100	860,499
Union Bank of California, N.A. 5.26%-5.29% due 1/4-3/29/2007	200,000	199,995
Variable Funding Capital Corp. 5.23%-5.25% due 1/4-2/2/2007³	407,000	406,298
Wm. Wrigley Jr. Co. 5.20% due 1/25/2007³	25,000	24,913

Total short-term securities (cost: $13,615,604,000)		13,615,095


Total investment securities (cost: $62,695,119,000)		89,132,200
Other assets less liabilities		(78,099)

Net assets		$89,054,101

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

¹Security did not produce income during the last 12 months.

²Represents an affiliated company as defined under the Investment Company Act of 1940.

³Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration.

The total value of all such restricted securities was $4,107,188,000, which represented 4.61% of the net assets of the fund.

ADR = American Depositary Receipts

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

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information

is contained in each fund’s prospectus, which can be obtained from a financial adviser and should be read carefully before investing.

MFGEFP-904-0207-S6860

Summary investment portfolio, December 31, 2006

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

[begin pie chart]

Industry sector diversification (percent of net assets)

Information technology	13.83	%
Financials	12.27
Industrials	9.71
Consumer staples	9.39
Health care	8.88
Other industries	30.24
Convertible securities	.48
Short-term securities & other assets less liabilities	15.20

[end pie chart]

	Shares		Market value (000)			Percent of net assets

Common stocks - 84.32%

Energy - 8.87%
Baker Hughes Inc.		7,825,000	$	584,214			.65	%
Chevron Corp.		19,702,278		1,448,708			1.63
ConocoPhillips		11,843,340		852,128			.96
Marathon Oil Corp.		6,800,000		629,000			.71
Royal Dutch Shell PLC, Class A (ADR)		17,970,000		1,272,096
Royal Dutch Shell PLC, Class B		833,265		29,204
Royal Dutch Shell PLC, Class B (ADR)		2,370,498		168,661			1.65
Schlumberger Ltd.		22,200,000		1,402,152			1.57
Other securities				1,515,820			1.70
				7,901,983			8.87

Materials - 3.34%
Barrick Gold Corp.		23,786,250		730,238
Barrick Gold Corp. (CAD denominated)		1,114,350		34,303			.86
Other securities				2,214,102			2.48
				2,978,643			3.34

Industrials - 9.71%
Boeing Co.		7,300,000		648,532			.73
General Electric Co.		49,600,000		1,845,616			2.07
Tyco International Ltd.		47,160,100		1,433,667			1.61
United Technologies Corp.		10,190,000		637,079			.72
Other securities				4,079,764			4.58
				8,644,658			9.71

Consumer discretionary - 8.74%
Best Buy Co., Inc.		14,017,300	$	689,511			.77	%
Carnival Corp., units		13,000,000		637,650			.72
Limited Brands, Inc.		20,042,743		580,037			.65
Lowe's Companies, Inc.		53,236,600		1,658,320			1.86
Target Corp.		22,475,000		1,282,199			1.44
Toyota Motor Corp.		10,055,000		672,587			.76
Other securities				2,261,705			2.54
				7,782,009			8.74

Consumer staples - 9.39%
Altria Group, Inc.		46,500,000		3,990,630			4.48
PepsiCo, Inc.		14,200,000		888,210			1.00
Reynolds American Inc.		8,923,332		584,211			.66
Walgreen Co.		12,595,000		577,985			.65
Other securities				2,320,332			2.60
				8,361,368			9.39

Health care - 8.88%
Abbott Laboratories		15,750,000		767,182			.86
AstraZeneca PLC (ADR)		4,534,500		242,822
AstraZeneca PLC (Sweden)		4,909,500		263,605
AstraZeneca PLC (United Kingdom)		3,215,000		172,734			.76
Bristol-Myers Squibb Co.		26,250,000		690,900			.79
Eli Lilly and Co.		14,585,000		759,878			.85
Merck & Co., Inc.		15,750,000		686,700			.77
Roche Holding AG		5,135,000		920,727			1.03
UnitedHealth Group Inc.		11,000,000		591,030			.66
Other securities				2,812,254			3.16
				7,907,832			8.88

Financials - 12.27%
American International Group, Inc.		10,713,900		767,758			.86
Bank of America Corp.		12,834,320		685,224			.77
Citigroup Inc.		34,460,000		1,919,422			2.16
Fannie Mae		25,865,600		1,536,158			1.72
Freddie Mac		5,750,000		390,425			.44
J.P. Morgan Chase & Co.		14,750,001		712,425			.80
Washington Mutual, Inc.		25,400,000		1,155,446			1.30
Wells Fargo & Co.		18,660,000		663,550			.74
Other securities				3,098,097			3.48
				10,928,505			12.27

Information technology - 13.83%
Cisco Systems, Inc. (1)		31,320,400		855,987			.96
Hewlett-Packard Co.		22,000,000		906,180			1.02
Intel Corp.		38,140,000		772,335			.87
International Business Machines Corp.		11,820,000		1,148,313			1.29
Microsoft Corp.		54,310,000		1,621,697			1.82
Nokia Corp.		34,327,550	$	701,117
Nokia Corp. (ADR)		14,387,350		292,351			1.12	%
Oracle Corp. (1)		82,770,100		1,418,680			1.59
Texas Instruments Inc.		25,000,000		720,000			.81
Other securities				3,878,134			4.35
				12,314,794			13.83

Telecommunication services - 6.00%
AT&T Inc.		67,305,497		2,406,172			2.70
BellSouth Corp.		27,900,000		1,314,369			1.48
Sprint Nextel Corp., Series 1		51,177,300		966,739			1.09
Other securities				653,462			.73
				5,340,742			6.00

Utilities - 2.19%
Dominion Resources, Inc.		7,131,912		597,940			.67
Other securities				1,352,271			1.52
				1,950,211			2.19

Miscellaneous - 1.10%
Other common stocks in initial period of acquisition				979,731			1.10


Total common stocks (cost: $48,720,705,000)				75,090,476			84.32





Warrants - 0.00%

Industrials - 0.00%
Other securities				2,657			.00


Total warrants (cost: $1,835,000)				2,657			.00





Convertible securities - 0.48%

Financials - 0.11%
Fannie Mae 5.375% convertible preferred		970		96,636			.11

Other - 0.37%
Other securities				327,336			.37


Total convertible securities (cost: $356,975,000)				423,972			.48



		Principal amount (000)		Market value (000	)		Percent of net assets

Short-term securities - 15.29%


Abbott Laboratories 5.19%-5.23% due 1/25-3/29/2007 (2)	$	290,500	$	288,257			.32	%
AIG Funding, Inc. 5.215% due 1/23/2007		50,000		49,835
International Lease Finance Corp. 5.21%-5.23% due 1/4-2/12/2007		273,000		272,034			.36
AT&T Inc. 5.25% due 1/18/2007 (2)		50,000		49,875			.06
Bank of America Corp 5.22%-5.25% due 1/5-3/28/2007		449,200		446,095
Ranger Funding Co. LLC 5.25% due 3/1/2007 (2)		26,800		26,557			.53
CAFCO, LLC 5.23%-5.25% due 1/8-1/19/2007 (2)		278,000		277,418
Ciesco LLC 5.22%-5.23% due 1/12-2/15/2007 (2)		150,000		149,504
Citigroup Funding Inc. 5.23% due 1/22/2007		50,000		49,845			.54
Chevron Funding Corp. 5.21% due 1/16/2007		100,000		99,768			.11
Edison Asset Securitization LLC 5.22%-5.24% due 2/5-2/13/2007 (2)		289,300		287,640
General Electric Capital Services, Inc. 5.22%-5.23% due 1/18-2/21/2007		90,000		89,591			.42
Fannie Mae 3.00%-5.16% due 1/3-3/28/2007		1,492,763		1,482,468			1.67
Federal Home Loan Bank 5.065%-5.18% due 1/3-3/21/2007		2,088,630		2,076,840			2.33
Freddie Mac 5.04%-5.17% due 1/2-3/30/2007		2,423,000		2,407,045			2.70
Hewlett-Packard Co. 5.25% due 1/19/2007 (2)		36,000		35,900			.04
IBM Capital Inc. 5.20% due 3/16/2007 (2)		28,700		28,394
IBM Corp. 5.19%-5.23% due 1/5-2/15/2007 (2)		150,000		149,354			.20
J.P. Morgan Chase & Co. 5.23% due 3/13/2007		50,000		49,488
Jupiter Securitization Co., LLC 5.24%-5.25% due 1/17-2/9/2007 (2)		161,638		161,047
Park Avenue Receivables Co., LLC 5.25%-5.26% due 1/8-2/1/2007 (2)		221,795		221,190			.48
U.S. Treasury Bills 4.805%-4.955% due 1/11-3/22/2007		866,100		860,499			.97
Other securities				4,056,451			4.56


Total short-term securities (cost: $13,615,604,000)				13,615,095			15.29


Total investment securities (cost: $62,695,119,000)				89,132,200			100.09
Other assets less liabilities				(78,099	)		(.09	)

Net assets			$	89,054,101			100.00	%


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

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The fund's affiliated holding listed below is also among the fund's largest holdings and is shown in the preceding summary investment portfolio. Further details on this holding and related transactions during the year ended December 31, 2006, appear below.




Company	Beginning shares		Purchases		Sales		Ending shares		Dividend income (000)		Market value of affiliate at 12/31/06 (000)
Limited Brands, Inc.		20,749,400		-		706,657		20,042,743	$	12,026	$	580,037


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 private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities, including those in "Other securities" in the summary investment portfolio, was $4,107,188,000, which represented 4.61% of the net assets of the fund.


ADR = American Depositary Receipts

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities
at December 31, 2006	(dollars and shares in thousands, except per-share amounts)

Assets:
Investment securities at market:
Unaffiliated issuers (cost: $62,452,907)			$	88,552,163
Affiliated issuer (cost: $242,212)				580,037		$	89,132,200
Cash denominated in non-U.S. currencies (cost: $9,056)							9,046
Cash							146
Receivables for:
Sales of fund's shares			$	91,234
Dividends and interest				129,077			220,311
							89,361,703
Liabilities:
Payables for:
Purchases of investments				145,028
Repurchases of fund's shares				112,010
Investment advisory services				15,727
Services provided by affiliates				29,651
Deferred directors' and advisory board compensation				4,591
Other				595			307,602
Net assets at December 31, 2006						$	89,054,101

Net assets consist of:
Capital paid in on shares of capital stock						$	62,384,108
Undistributed net investment income							252,359
Distributions in excess of net realized gain							(19,660	)
Net unrealized appreciation							26,437,294
Net assets at December 31, 2006						$	89,054,101


		Authorized shares of capital stock - $.001 par value		Net assets			Shares outstanding			Net asset value per share*

Class A		2,500,000	$	74,180,851			2,213,415		$	33.51
Class B		250,000		4,222,131			126,510			33.37
Class C		250,000		3,349,689			100,562			33.31
Class F		250,000		1,673,481			49,992			33.48
Class 529-A		325,000		1,118,135			33,395			33.48
Class 529-B		75,000		238,111			7,129			33.40
Class 529-C		150,000		324,539			9,714			33.41
Class 529-E		75,000		47,915			1,434			33.42
Class 529-F		75,000		12,740			380			33.47
Class R-1		75,000		49,238			1,474			33.39
Class R-2		100,000		624,809			18,709			33.40
Class R-3		300,000		909,474			27,189			33.45
Class R-4		75,000		322,909			9,646			33.48
Class R-5		150,000		1,980,079			59,088			33.51
Total		4,650,000	$	89,054,101			2,658,637
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A and 529-A, for which the maximum offering prices per share were $35.55 and $35.52, respectively.



Statement of operations										(dollars in thousands	)
for the year ended December 31, 2006
Investment income:
Income:
Dividends (net of non-U.S. taxes of $22,381; also includes $12,026 from affiliate)			$	1,586,180
Interest (net of non-U.S. taxes of $6)				674,124		$	2,260,304

Fees and expenses(*):
Investment advisory services				198,992
Distribution services				254,488
Transfer agent services				57,559
Administrative services				15,686
Reports to shareholders				3,550
Registration statement and prospectus				1,186
Postage, stationery and supplies				6,584
Directors' and advisory board compensation				1,361
Auditing and legal				233
Custodian				1,821
State and local taxes				702
Other				234
Total fees and expenses before reimbursements/waivers				542,396
Less reimbursements/waivers of fees and expenses:
Investment advisory services				19,899
Administrative services				487
Total fees and expenses after reimbursements/waivers							522,010
Net investment income							1,738,294

Net realized gain and unrealized appreciation on investments and non-U.S. currency:
Net realized gain on:
Investments (including $2,037 net gain from affiliate)				5,515,639
Non-U.S. currency transactions				950			5,516,589
Net unrealized appreciation on:
Investments				5,134,635
Non-U.S. currency translations				285			5,134,920
Net realized gain and unrealized appreciation on investments and non-U.S. currency							10,651,509
Net increase in net assets resulting from operations						$	12,389,803

(*) 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
				2006			2005
Operations:
Net investment income			$	1,738,294		$	1,515,226
Net realized gain on investments and non-U.S. currency transactions				5,516,589			2,153,683
Net unrealized appreciation on investments and non-U.S. currency translations				5,134,920			1,418,797
Net increase in net assets resulting from operations				12,389,803			5,087,706

Dividends and distributions paid to shareholders:
Dividends from net investment income				(1,784,654	)		(1,614,567	)
Distributions from net realized gain on investments				(5,146,726	)		(1,991,337	)
Total dividends and distributions paid to shareholders				(6,931,380	)		(3,605,904	)

Capital share transactions				4,229,674			2,016,797

Total increase in net assets				9,688,097			3,498,599

Net assets:
Beginning of year				79,366,004			75,867,405
End of year (including undistributed net investment income: $252,359 and $297,894, respectively)			$	89,054,101		$	79,366,004


See Notes to Financial Statements

Notes to financial statements

1.	Organization and significant accounting policies

Organization - The Investment Company of America (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks long-term growth of capital and income, placing greater emphasis on future dividends than on current income.

The fund offers 14 share classes consisting of four retail share classes, five CollegeAmerica® savings plan share classes and five retirement plan share classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F) can be utilized to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry any conversion rights. The fund’s share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Class 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
Class B and 529-B	None	Declines from 5% to 0% for redemptions within six years of purchase	Class B and 529-B convert to Class 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 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Class F and 529-F	None	None	None
Class R-1, R-2, R-3, R-4 and R-5	None	None	None

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

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

Security valuation - Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the fund to meet their obligations may be affected by economic developments in a specific industry, state or region. Forward currency contracts are valued at the mean of representative quoted bid and asked prices. Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under procedures adopted by authority of the fund's board of directors. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions.

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

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

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

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

2.	Non-U.S. investments

Investment risk - The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.

Taxation - Dividend and interest income is recorded net of non-U.S. taxes paid.

3. Federal income taxation and distributions

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

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

During the year ended December 31, 2006, the fund reclassified $933,000 from distributions in excess of net realized gain to undistributed net investment income; and reclassified $108,000 from undistributed net investment income and $386,837,000 from distributions in excess of net realized gain to capital paid in on shares of capital stock to align financial reporting with tax reporting.

As of December 31, 2006, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investments were as follows:

	(dollars in thousands)
Undistributed ordinary income	$	270,414
Post-October non-U.S. currency loss deferrals (realized during the period November 1, 2006, through December 31, 2006)*		(1,089	)
Gross unrealized appreciation on investment securities		26,805,009
Gross unrealized depreciation on investment securities		(397,877	)
Net unrealized appreciation on investment securities		26,407,132
Cost of investment securities		62,725,068
*These deferrals are considered incurred in the subsequent year.

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

	Year ended December 31, 2006						Year ended December 31, 2005

	Ordinary income		Long-term capital gains		Total distributions paid		Ordinary income		Long-term capital gains		Total distributions paid
Share class
Class A	$	1,549,720	$	4,286,757	$	5,836,477	$	1,418,613	$	1,679,915	$	3,098,528
Class B		57,806		244,915		302,721		52,768		97,012		149,780
Class C		43,246		194,579		237,825		38,151		73,830		111,981
Class F		32,890		97,019		129,909		26,813		33,532		60,345
Class 529-A		21,169		63,983		85,152		15,608		20,713		36,321
Class 529-B		2,883		13,752		16,635		2,231		4,781		7,012
Class 529-C		3,885		18,648		22,533		2,858		6,141		8,999
Class 529-E		786		2,753		3,539		578		900		1,478
Class 529-F		236		713		949		143		187		330
Class R-1		572		2,836		3,408		375		720		1,095
Class R-2		7,776		36,010		43,786		5,949		12,003		17,952
Class R-3		14,853		52,450		67,303		11,035		16,698		27,733
Class R-4		6,052		18,571		24,623		4,356		5,862		10,218
Class R-5		42,780		113,740		156,520		35,089		39,043		74,132
Total	$	1,784,654	$	5,146,726	$	6,931,380	$	1,614,567	$	1,991,337	$	3,605,904

4. Fees and transactions with related parties

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

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.390% on the first $1 billion of month-end net assets and decreasing to 0.219% on such assets in excess of $89 billion. CRMC is currently waiving 10% of investment advisory services fees. During the year ended December 31, 2006, total investment advisory services fees waived by CRMC were $19,899,000. As a result, the fee shown on the accompanying financial statements of $198,992,000, which was equivalent to an annualized rate of 0.238%, was reduced to $179,093,000, or 0.214% of month-end net assets.

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

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

For Class A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of December 31, 2006, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A.

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

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

Administrative services - The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Class A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. CRMC has agreed to pay AFS on the fund's behalf for a portion of the transfer agent services fees for some of the retirement plan share classes. For the year ended December 31, 2006, the total administrative services fees paid by CRMC were $2,000 and $485,000 for Class R-1 and R-2, respectively. Administrative services fees are presented gross of any payments made by CRMC. Each 529 share class is subject to an additional annual administrative services fee of 0.10% of its respective average daily net assets; this fee is payable to the Commonwealth of Virginia for the maintenance of the CollegeAmerica plan. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described above for the year ended December 31, 2006, were as follows (dollars in thousands):

Share class	Distribution services	Transfer agent services	Administrative services
Share class	Distribution services	Transfer agent services	CRMC administrative services	Transfer agent services	Commonwealth of Virginia administrative services
Class A	$163,142	$54,083	Not applicable	Not applicable	Not applicable
Class B	40,236	3,476	Not applicable	Not applicable	Not applicable
Class C	31,123	Included in administrative services	$4,126	$581	Not applicable
Class F	3,708		1,284	213	Not applicable
Class 529-A	1,916		752	116	$969
Class 529-B	2,138		166	77	214
Class 529-C	2,833		220	84	284
Class 529-E	209		32	5	42
Class 529-F	-		7	1	9
Class R-1	391		45	19	Not applicable
Class R-2	4,167		816	1,969	Not applicable
Class R-3	3,932		1,059	456	Not applicable
Class R-4	693		388	15	Not applicable
Class R-5	Not applicable		1,730	7	Not applicable
Total	$254,488	$57,559	$10,625	$3,543	$1,518

Deferred directors’ and advisory board compensation - Since the adoption of the deferred compensation plan in 1993, directors and advisory board members who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ and advisory board compensation of $1,361,000, shown on the accompanying financial statements, includes $842,000 in current fees (either paid in cash or deferred) and a net increase of $519,000 in the value of the deferred amounts.

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

5. Warrants

As of December 31, 2006, the fund had warrants outstanding which may be exercised at any time for the purchase of 819,437 Class A shares at approximately $5.24 per share. If these warrants had been exercised as of December 31, 2006, the net asset value of Class A shares would have been reduced by $0.01 per share.

6. Capital share transactions

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

Share class	*Sales()**				Reinvestments of dividends and distributions				*Repurchases()**						Net increase
	Amount		Shares		Amount		Shares		Amount			Shares			Amount		Shares
Year ended December 31, 2006
Class A	$	5,290,882		159,177	$	5,481,530		164,293	$	(8,155,422	)		(245,460	)	$	2,616,990		78,010
Class B		271,904		8,230		291,674		8,769		(458,225	)		(13,841	)		105,353		3,158
Class C		455,460		13,780		227,586		6,853		(462,026	)		(14,011	)		221,020		6,622
Class F		424,643		12,741		118,930		3,567		(297,324	)		(8,964	)		246,249		7,344
Class 529-A		208,622		6,272		85,143		2,553		(68,950	)		(2,072	)		224,815		6,753
Class 529-B		28,898		873		16,630		499		(11,480	)		(345	)		34,048		1,027
Class 529-C		63,827		1,923		22,528		676		(25,566	)		(770	)		60,789		1,829
Class 529-E		9,172		276		3,537		106		(3,598	)		(108	)		9,111		274
Class 529-F		4,900		147		949		28		(1,247	)		(38	)		4,602		137
Class R-1		23,018		696		3,405		102		(8,091	)		(243	)		18,332		555
Class R-2		197,672		5,975		43,770		1,314		(130,069	)		(3,904	)		111,373		3,385
Class R-3		292,010		8,809		67,296		2,019		(163,408	)		(4,926	)		195,898		5,902
Class R-4		128,640		3,882		24,601		738		(82,853	)		(2,513	)		70,388		2,107
Class R-5		310,130		9,266		155,841		4,671		(155,265	)		(4,677	)		310,706		9,260
Total net increase
(decrease)	$	7,709,778		232,047	$	6,543,420		196,188	$	(10,023,524	)		(301,872	)	$	4,229,674		126,363

Year ended December 31, 2005
Class A	$	5,258,845		170,349	$	2,900,935		92,222	$	(7,335,187	)		(236,971	)	$	824,593		25,600
Class B		335,330		10,931		144,393		4,598		(380,598	)		(12,352	)		99,125		3,177
Class C		501,711		16,364		107,001		3,413		(423,938	)		(13,782	)		184,774		5,995
Class F		361,246		11,715		54,903		1,746		(313,924	)		(10,164	)		102,225		3,297
Class 529-A		202,043		6,536		36,316		1,155		(43,353	)		(1,396	)		195,006		6,295
Class 529-B		32,939		1,070		7,011		223		(7,679	)		(248	)		32,271		1,045
Class 529-C		61,312		1,989		8,998		286		(16,443	)		(531	)		53,867		1,744
Class 529-E		8,874		288		1,478		47		(1,771	)		(57	)		8,581		278
Class 529-F		2,796		90		329		10		(754	)		(24	)		2,371		76
Class R-1		15,777		514		1,093		35		(11,805	)		(386	)		5,065		163
Class R-2		181,876		5,909		17,945		571		(90,700	)		(2,940	)		109,121		3,540
Class R-3		255,565		8,290		27,718		882		(122,033	)		(3,948	)		161,250		5,224
Class R-4		140,331		4,569		10,217		325		(38,267	)		(1,234	)		112,281		3,660
Class R-5		216,379		6,989		73,594		2,340		(163,706	)		(5,285	)		126,267		4,044
Total net increase
(decrease)	$	7,575,024		245,603	$	3,391,931		107,853	$	(8,950,158	)		(289,318	)	$	2,016,797		64,138

(*) Includes exchanges between share classes of the fund.

7. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities, of $14,380,611,000 and $16,464,914,000, respectively, during the year ended December 31, 2006.

Financial highlights (1)

			Income (loss) from investment operations(2)								Dividends and distributions

	Net asset value, beginning of period		Net investment income		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 (3)			Net assets, end of period (in millions)				Ratio of expenses to average net assets before reimbursements/ waivers					Ratio of expenses to average net assets after reimbursements/ waivers (4)					Ratio of net income to average net assets
Class A:
Year ended 12/31/2006	$	31.36	$	.72	$	4.23		$	4.95		$	(.74	)	$	(2.06	)	$	(2.80	)	$	33.51		15.94	%	$	74,181				.57	%				.54	%				2.16	%
Year ended 12/31/2005		30.75		.64		1.46			2.10			(.68	)		(.81	)		(1.49	)		31.36		6.87	%		66,959				.57					.55					2.06
Year ended 12/31/2004		28.84		.60		2.19			2.79			(.52	)		(.36	)		(.88	)		30.75		9.78			64,880				.57					.57					2.06
Year ended 12/31/2003		23.48		.54		5.55			6.09			(.52	)		(.21	)		(.73	)		28.84		26.30			58,353				.59					.59					2.14
Year ended 12/31/2002		28.53		.49		(4.56	)		(4.07	)		(.52	)		(.46	)		(.98	)		23.48		(14.47	)		46,129				.59					.59					1.89
Class B:
Year ended 12/31/2006		31.24		.46		4.21			4.67			(.48	)		(2.06	)		(2.54	)		33.37		15.04			4,222				1.34					1.32					1.38
Year ended 12/31/2005		30.64		.39		1.46			1.85			(.44	)		(.81	)		(1.25	)		31.24		6.04			3,853				1.35					1.33					1.28
Year ended 12/31/2004		28.74		.38		2.17			2.55			(.29	)		(.36	)		(.65	)		30.64		8.94			3,683				1.36					1.35					1.29
Year ended 12/31/2003		23.41		.34		5.53			5.87			(.33	)		(.21	)		(.54	)		28.74		25.30			3,011				1.38					1.38					1.33
Year ended 12/31/2002		28.47		.30		(4.57	)		(4.27	)		(.33	)		(.46	)		(.79	)		23.41		(15.18	)		1,841				1.39					1.39					1.18
Class C:
Year ended 12/31/2006		31.18		.44		4.21			4.65			(.46	)		(2.06	)		(2.52	)		33.31		15.00			3,350				1.41					1.38					1.32
Year ended 12/31/2005		30.59		.37		1.45			1.82			(.42	)		(.81	)		(1.23	)		31.18		5.96			2,929				1.42					1.40					1.21
Year ended 12/31/2004		28.70		.36		2.16			2.52			(.27	)		(.36	)		(.63	)		30.59		8.85			2,691				1.43					1.43					1.22
Year ended 12/31/2003		23.38		.31		5.53			5.84			(.31	)		(.21	)		(.52	)		28.70		25.22			1,985				1.45					1.45					1.25
Year ended 12/31/2002		28.44		.30		(4.58	)		(4.28	)		(.32	)		(.46	)		(.78	)		23.38		(15.20	)		1,025				1.45					1.45					1.17
Class F:
Year ended 12/31/2006		31.32		.71		4.24			4.95			(.73	)		(2.06	)		(2.79	)		33.48		15.95			1,673				.60					.58					2.12
Year ended 12/31/2005		30.72		.62		1.45			2.07			(.66	)		(.81	)		(1.47	)		31.32		6.77			1,336				.64					.62					1.99
Year ended 12/31/2004		28.81		.58		2.18			2.76			(.49	)		(.36	)		(.85	)		30.72		9.69			1,209				.67					.67					1.99
Year ended 12/31/2003		23.46		.51		5.55			6.06			(.50	)		(.21	)		(.71	)		28.81		26.18			897				.69					.69					2.01
Year ended 12/31/2002		28.52		.49		(4.59	)		(4.10	)		(.50	)		(.46	)		(.96	)		23.46		(14.59	)		415				.70					.70					1.92
Class 529-A:
Year ended 12/31/2006		31.33		.69		4.24			4.93			(.72	)		(2.06	)		(2.78	)		33.48		15.87			1,118				.64					.62					2.08
Year ended 12/31/2005		30.73		.61		1.45			2.06			(.65	)		(.81	)		(1.46	)		31.33		6.74			835				.67					.65					1.96
Year ended 12/31/2004		28.82		.59		2.17			2.76			(.49	)		(.36	)		(.85	)		30.73		9.68			625				.68					.68					2.00
Year ended 12/31/2003		23.48		.52		5.55			6.07			(.52	)		(.21	)		(.73	)		28.82		26.19			380				.64					.64					2.06
Period from 2/15/2002 to 12/31/2002		27.88		.46		(3.91	)		(3.45	)		(.49	)		(.46	)		(.95	)		23.48		(12.57	)		153				.71		(5	)		.71		(5	)		2.17		(5	)
Class 529-B:
Year ended 12/31/2006		31.27		.42		4.21			4.63			(.44	)		(2.06	)		(2.50	)		33.40		14.90			238				1.47					1.45					1.25
Year ended 12/31/2005		30.67		.35		1.45			1.80			(.39	)		(.81	)		(1.20	)		31.27		5.87			191				1.51					1.49					1.12
Year ended 12/31/2004		28.78		.33		2.16			2.49			(.24	)		(.36	)		(.60	)		30.67		8.69			155				1.56					1.55					1.12
Year ended 12/31/2003		23.45		.28		5.54			5.82			(.28	)		(.21	)		(.49	)		28.78		25.05			100				1.58					1.58					1.12
Period from 2/15/2002 to 12/31/2002		27.88		.28		(3.92	)		(3.64	)		(.33	)		(.46	)		(.79	)		23.45		(13.22	)		41				1.58		(5	)		1.58		(5	)		1.30		(5	)
Class 529-C:
Year ended 12/31/2006		31.27		.42		4.23			4.65			(.45	)		(2.06	)		(2.51	)		33.41		14.94			325				1.46					1.44					1.26
Year ended 12/31/2005		30.68		.35		1.45			1.80			(.40	)		(.81	)		(1.21	)		31.27		5.85			247				1.50					1.48					1.13
Year ended 12/31/2004		28.78		.33		2.17			2.50			(.24	)		(.36	)		(.60	)		30.68		8.74			188				1.55					1.54					1.13
Year ended 12/31/2003		23.45		.29		5.54			5.83			(.29	)		(.21	)		(.50	)		28.78		25.07			115				1.57					1.57					1.13
Period from 2/19/2002 to 12/31/2002		27.47		.28		(3.50	)		(3.22	)		(.34	)		(.46	)		(.80	)		23.45		(11.91	)		45				1.57		(5	)		1.57		(5	)		1.32		(5	)
Class 529-E:
Year ended 12/31/2006		31.28		.59		4.23			4.82			(.62	)		(2.06	)		(2.68	)		33.42		15.52			48				.95					.92					1.78
Year ended 12/31/2005		30.68		.51		1.45			1.96			(.55	)		(.81	)		(1.36	)		31.28		6.42			36				.99					.96					1.65
Year ended 12/31/2004		28.78		.48		2.17			2.65			(.39	)		(.36	)		(.75	)		30.68		9.29			27				1.03					1.02					1.65
Year ended 12/31/2003		23.45		.42		5.54			5.96			(.42	)		(.21	)		(.63	)		28.78		25.70			16				1.04					1.04					1.65
Period from 3/1/2002 to 12/31/2002		28.27		.38		(4.52	)		(4.14	)		(.33	)		(.35	)		(.68	)		23.45		(14.72	)		6				1.03		(5	)		1.03		(5	)		1.90		(5	)
Class 529-F:
Year ended 12/31/2006		31.32		.76		4.23			4.99			(.78	)		(2.06	)		(2.84	)		33.47		16.10			13				.45					.42					2.27
Year ended 12/31/2005		30.71		.64		1.46			2.10			(.68	)		(.81	)		(1.49	)		31.32		6.87			8				.56					.54					2.07
Year ended 12/31/2004		28.81		.56		2.16			2.72			(.46	)		(.36	)		(.82	)		30.71		9.55			5				.78					.77					1.91
Year ended 12/31/2003		23.47		.48		5.55			6.03			(.48	)		(.21	)		(.69	)		28.81		26.05			3				.79					.79					1.88
Period from 9/16/2002 to 12/31/2002		23.98		.16		(.19	)		(.03	)		(.13	)		(.35	)		(.48	)		23.47		(.14	)		-	(6	)		.23					.23					.68
Class R-1:
Year ended 12/31/2006	$	31.25	$	.44	$	4.22		$	4.66		$	(.46	)		(2.06	)	$	(2.52	)	$	33.39		14.96	%	$	49				1.42	%				1.39	%				1.31	%
Year ended 12/31/2005		30.67		.38		1.44			1.82			(.43	)		(.81	)		(1.24	)		31.25		5.93			29				1.42					1.40					1.22
Year ended 12/31/2004		28.77		.36		2.17			2.53			(.27	)		(.36	)		(.63	)		30.67		8.84			23				1.47					1.46					1.21
Year ended 12/31/2003		23.46		.31		5.54			5.85			(.33	)		(.21	)		(.54	)		28.77		25.18			14				1.51					1.47					1.18
Period from 6/6/2002 to 12/31/2002		27.27		.20		(3.36	)		(3.16	)		(.30	)		(.35	)		(.65	)		23.46		(11.68	)		1				2.43		(5	)		1.47		(5	)		1.49		(5	)
Class R-2:
Year ended 12/31/2006		31.26		.43		4.23			4.66			(.46	)		(2.06	)		(2.52	)		33.40		14.99			625				1.50					1.39					1.31
Year ended 12/31/2005		30.67		.37		1.45			1.82			(.42	)		(.81	)		(1.23	)		31.26		5.95			479				1.57					1.40					1.21
Year ended 12/31/2004		28.77		.37		2.17			2.54			(.28	)		(.36	)		(.64	)		30.67		8.88			361				1.63					1.42					1.27
Year ended 12/31/2003		23.46		.31		5.54			5.85			(.33	)		(.21	)		(.54	)		28.77		25.18			188				1.76					1.43					1.21
Period from 5/21/2002 to 12/31/2002		28.23		.23		(4.34	)		(4.11	)		(.31	)		(.35	)		(.66	)		23.46		(14.64	)		24				1.57		(5	)		1.43		(5	)		1.61		(5	)
Class R-3:
Year ended 12/31/2006		31.30		.59		4.24			4.83			(.62	)		(2.06	)		(2.68	)		33.45		15.54			909				.94					.92					1.78
Year ended 12/31/2005		30.71		.52		1.45			1.97			(.57	)		(.81	)		(1.38	)		31.30		6.43			666				.95					.93					1.68
Year ended 12/31/2004		28.80		.50		2.17			2.67			(.40	)		(.36	)		(.76	)		30.71		9.34			493				.99					.98					1.72
Year ended 12/31/2003		23.47		.41		5.55			5.96			(.42	)		(.21	)		(.63	)		28.80		25.70			231				1.06					1.05					1.60
Period from 6/4/2002 to 12/31/2002		27.58		.27		(3.69	)		(3.42	)		(.34	)		(.35	)		(.69	)		23.47		(12.49	)		24				1.11		(5	)		1.05		(5	)		2.00		(5	)
Class R-4:
Year ended 12/31/2006		31.32		.69		4.24			4.93			(.71	)		(2.06	)		(2.77	)		33.48		15.90			323				.65					.62					2.07
Year ended 12/31/2005		30.72		.62		1.45			2.07			(.66	)		(.81	)		(1.47	)		31.32		6.77			236				.65					.63					1.99
Year ended 12/31/2004		28.82		.60		2.16			2.76			(.50	)		(.36	)		(.86	)		30.72		9.67			119				.67					.66					2.05
Year ended 12/31/2003		23.47		.51		5.55			6.06			(.50	)		(.21	)		(.71	)		28.82		26.19			40				.68					.68					2.00
Period from 5/28/2002 to 12/31/2002		28.22		.32		(4.33	)		(4.01	)		(.39	)		(.35	)		(.74	)		23.47		(14.31	)		9				.73		(5	)		.69		(5	)		2.25		(5	)
Class R-5:
Year ended 12/31/2006		31.35		.79		4.24			5.03			(.81	)		(2.06	)		(2.87	)		33.51		16.22			1,980				.35					.33					2.37
Year ended 12/31/2005		30.75		.70		1.46			2.16			(.75	)		(.81	)		(1.56	)		31.35		7.06			1,562				.36					.34					2.28
Year ended 12/31/2004		28.84		.67		2.18			2.85			(.58	)		(.36	)		(.94	)		30.75		10.02			1,408				.36					.35					2.28
Year ended 12/31/2003		23.48		.56		5.59			6.15			(.58	)		(.21	)		(.79	)		28.84		26.58			1,201				.36					.36					2.11
Period from 5/15/2002 to 12/31/2002		28.37		.39		(4.50	)		(4.11	)		(.43	)		(.35	)		(.78	)		23.48		(14.59	)		48				.37		(5	)		.37		(5	)		2.56		(5	)

Year ended December 31

2006

2005

2004

2003

2002

Portfolio turnover rate for all classes of shares

20%

19%

24%

27%

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

(2) Based on average shares outstanding.

(3) Total returns exclude all sales charges, including contingent deferred sales charges.

(4) The ratios in this column reflect the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown CRMC reduced fees for investment advisory services for all share classes. In addition, during the start-up period for the retirement plan share classes (except Class R-5), CRMC agreed to pay a portion of the fees related to transfer agent services.

(5) Annualized.

(6) Amount less than $1 million.

See Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of The Investment Company of America:

In our opinion, the accompanying statement of assets and liabilities, including the summary investment portfolio, and the related statements of operations and changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Investment Company of America (the "Fund") at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities owned at December 31, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Los Angeles, California

February 7, 2007

Tax information

unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended December 31, 2006:

	Long-term capital gains	$5,410,467,000
	Qualified dividend income	100%
	Corporate dividends received deduction	$1,298,221,000
	U.S. government income that may be exempt from state taxation	148,890,000

Individual shareholders should refer to their Form 1099 or other tax information, which was mailed in January 2007, to determine the calendar year amounts to be included on their 2006 tax returns. Shareholders should consult their tax advisers.

<PAGE>





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




The Investment
Company of America/(R)/



RETIREMENT PLAN
PROSPECTUS






March 1, 2007






TABLE OF CONTENTS

 1    Risk/Return summary
 4    Fees and expenses of the fund
 6    Investment objectives, strategies and risks
 9    Management and organization
13    Purchase, exchange and sale of shares
16    Sales charges
18    Sales charge reductions
19    Rollovers from retirement plans to IRAs
20    Plans of distribution
20    Other compensation to dealers
21    Distributions and taxes
22    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>

[This page was intentionally left blank.]



<PAGE>

Risk/Return summary

The fund seeks to make your investment grow and provide you with income over
time by investing primarily in common stocks that offer growth and dividend
potential.

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

The fund's investments are limited to securities of companies that are included
on its eligible list. Changes to the eligible list are reviewed and authorized
by the fund's board of directors at the recommendation of Capital Research and
Management Company, the fund's investment adviser.

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

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


                                       1

                                 The Investment Company of America / Prospectus

<PAGE>

HISTORICAL INVESTMENT RESULTS

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


CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES

(Results do not include a sales charge; if a sales charge were included,
 results would be lower.)

[begin bar chart]

1997            29.81
1998            22.93
1999            16.55
2000             3.84
2001            -4.59
2002           -14.47
2003            26.30
2004             9.78
2005             6.87
2006            15.94

[end bar chart]





Highest/Lowest quarterly results during this time period were:




HIGHEST            17.34%      (quarter ended December 31, 1998)
LOWEST            -14.51%      (quarter ended September 30, 2002)






                                       2

The Investment Company of America / Prospectus


<PAGE>



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

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

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

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 7 reflects the fund's results calculated without a sales charge.


 INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006
                                  1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
- --------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 1/1/34     9.28%    6.73%    9.82%       12.82%
- --------------------------------------------------------------------------




                                  1 YEAR   LIFETIME/1/
- -------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/6/02   14.96%      8.72%
- -------------------------------------------------------
 CLASS R-2 -- FIRST SOLD 5/21/02  14.99       7.85
- -------------------------------------------------------
 CLASS R-3 -- FIRST SOLD 6/4/02   15.54       8.93
- -------------------------------------------------------
 CLASS R-4 -- FIRST SOLD 5/28/02  15.90       8.70
- -------------------------------------------------------
 CLASS R-5 -- FIRST SOLD 5/15/02  16.22       8.84
- -------------------------------------------------------




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

 INDEXES
 S&P 500/3/                        15.78%    6.19%      8.42%       11.33%
 Lipper Growth and Income Funds    15.57     7.59       8.01          N/A
  Index/4/
Class A annualized 30-day yield at December 31, 2006: 2.04%/5/
(For current yield information, please call American FundsLine at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.

/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The composition of each index may vary over time.

/3/  Standard & Poor's 500 Composite Index is a market capitalization-weighted
     index based on the average weighted performance of 500 widely held common
     stocks. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper Growth and 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 sales charges or taxes. This index was not in existence as of the
     date the fund became available; therefore, lifetime results are not shown.
/5/  Reflects a fee waiver (2.02% without the waiver) as described in the Annual
     Fund Operating Expenses table under "Fees and expenses of the fund."


                                       3

                                 The Investment Company of America / Prospectus

<PAGE>

Fees and expenses of the fund

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



 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
                                               CLASS A    ALL R SHARE CLASSES
- ------------------------------------------------------------------------------

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



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


 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
                                            CLASS  CLASS  CLASS  CLASS   CLASS
                                   CLASS A   R-1    R-2    R-3    R-4     R-5
- -------------------------------------------------------------------------------

 Management fees/1/                 0.24%   0.24%  0.24%  0.24%  0.24%   0.24%
- -------------------------------------------------------------------------------
 Distribution and/or service        0.23    1.00   0.75   0.50   0.25    none
 (12b-1) fees/2/
- -------------------------------------------------------------------------------
 Other expenses                     0.10    0.18   0.51   0.20   0.16    0.11
- -------------------------------------------------------------------------------
 Total annual fund operating        0.57    1.42   1.50   0.94   0.65    0.35
 expenses/1/
- -------------------------------------------------------------------------------



/1/  The fund's investment adviser is currently waiving 10% of its management fee.
     The waiver may be discontinued at any time in consultation with the fund's
     board, but it is expected to continue at this level until further review. The
     fund's investment adviser and board intend to review the waiver as
     circumstances warrant. In addition, the investment adviser paid a portion of
     the fund's transfer agent fees for certain R share classes. Management fees and
     total expenses do not reflect any waiver or reimbursement. Information
     regarding the effect of any waiver/reimbursement on total annual fund operating
     expenses can be found in the Financial Highlights table in this prospectus and
     in the fund's annual report.

/2/  Class A, R-1, R-2, R-3 and R-4 12b-1 fees may not exceed .25%, 1.00%, 1.00%,
     .75% and .50%, respectively, of the class' average net assets annually.


                                       4

The Investment Company of America / Prospectus


<PAGE>

OTHER EXPENSES

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


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




/1/  Payment amount depends on the date upon which services commenced.

/2/  Payment with respect to Recordkeeper Direct/(R)/ program.
/3/  Payment with respect to PlanPremier/(R)/ program.

EXAMPLES

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

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


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

 Class A*                        $630    $747     $875      $1,248
- --------------------------------------------------------------------
 Class R-1                        145     449      776       1,702
- --------------------------------------------------------------------
 Class R-2                        153     474      818       1,791
- --------------------------------------------------------------------
 Class R-3                         96     300      520       1,155
- --------------------------------------------------------------------
 Class R-4                         66     208      362         810
- --------------------------------------------------------------------
 Class R-5                         36     113      197         443
- --------------------------------------------------------------------



* Reflects the maximum initial sales charge in the first year.


                                       5

                                 The Investment Company of America / Prospectus

<PAGE>

Investment objectives, strategies and risks

The fund's investment objectives are to achieve long-term growth of capital and
income. The fund strives to accomplish these objectives through extensive U.S.
and global research, careful selection and broad diversification. In the
selection of securities for investment, potential for capital appreciation and
future dividends are given more weight than current yield. The fund invests
primarily in common stocks. The fund's investments are limited to securities of
companies that are included on its eligible list, which consists of securities
deemed suitable by the fund's investment adviser in light of the fund's
investment objectives and policies. Securities are added to, or deleted from,
the eligible list by the board of directors, after reviewing and acting upon the
recommendations of the investment adviser.

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

The fund may invest up to 15% of its assets, at the time of purchase, in
securities of issuers domiciled outside the United States and not included in
Standard & Poor's 500 Composite Index. Investments in securities issued by
entities based outside the United States may be subject to the risks described
above to a greater extent and may also be affected by currency fluctuation and
controls; different accounting, auditing, financial reporting and legal
standards and practices in some countries; expropriation; changes in tax policy;
greater market volatility; differing securities market structures; higher
transaction costs; and various administrative difficulties, such as delays in
clearing and settling portfolio transactions or in receiving payment of
dividends.

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

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

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively valued
companies that, in its opinion, represent above-average long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is through fundamental analysis, which may include meeting with
company executives and employees, suppliers, customers and competitors.


                                       6

The Investment Company of America / Prospectus


<PAGE>

Securities may be sold when the investment adviser believes that they no longer
represent relatively attractive investment opportunities.

OTHER IMPORTANT INVESTMENT PRACTICES

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

ADDITIONAL INVESTMENT RESULTS

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

 ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006
                                  1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
- --------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 1/1/34     15.94%   8.00%    10.47%      12.91%




                                  1 YEAR   LIFETIME/1/
- -------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/6/02   14.96%      8.72%
- -------------------------------------------------------
 CLASS R-2 -- FIRST SOLD 5/21/02  14.99       7.85
- -------------------------------------------------------
 CLASS R-3 -- FIRST SOLD 6/4/02   15.54       8.93
- -------------------------------------------------------
 CLASS R-4 -- FIRST SOLD 5/28/02  15.90       8.70
- -------------------------------------------------------
 CLASS R-5 -- FIRST SOLD 5/15/02  16.22       8.84




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

 INDEXES
 S&P 500/3/                 15.78%      6.19%        8.42%         11.33%
 Lipper Growth and Income   15.57       7.59         8.01            N/A
  Funds Index/4/
Class A distribution rate at December 31, 2006: 2.08%/5/
(For current distribution rate information, please call American FundsLine at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.

/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The composition of each index may vary over time.

/3/  Standard & Poor's 500 Composite Index is a market capitalization-weighted
     index based on the average weighted performance of 500 widely held common
     stocks. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper Growth and 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 sales charges or taxes. This index was not in existence as of the
     date the fund became available; therefore, lifetime results are not shown.
/5/  The distribution rate is based on actual distributions paid to shareholders
     over a 12-month period. Capital gain distributions, if any, are added back to
     the net asset value to determine the rate.


                                       7

                                 The Investment Company of America / Prospectus

<PAGE>


INDUSTRY SECTOR DIVERSIFICATION AS OF DECEMBER 31, 2006 (percent of net assets)

[begin pie chart]

Information technology                                       13.83%
Financials                                                   12.27%
Industrials                                                   9.71%
Consumer staples                                              9.39%
Health care                                                   8.88%
Convertible securities                                        0.48%
Other industries                                             30.24%
Short-term securities & other assets less liabilities        15.20%

[end pie chart]




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

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


                                       8

The Investment Company of America / 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 135 South State
College Boulevard, Brea, California 92821. Capital Research and Management
Company manages the investment portfolio and business affairs of the fund. The
total management fee paid by the fund, as a percentage of average net assets,
for the previous fiscal year appears in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." A discussion regarding the basis for the
approval of the fund's investment advisory and service agreement by the fund's
board of directors is contained in the fund's semi-annual report to shareholders
for the fiscal period ended June 30, 2006.

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. The investment adviser strives to obtain best execution
for the fund's portfolio transactions, taking into account a variety of factors
to produce the most favorable total price reasonably attainable under the
circumstances. These factors include the size and type of transaction, the cost
and quality of executions, and the broker-dealer's ability to offer liquidity
and anonymity. For example, with respect to equity transactions, the fund does
not consider the investment adviser as having an obligation to obtain the lowest
available commission rate to the exclusion of price, service and qualitative
considerations. Subject to the considerations outlined above, 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 who have provided investment research and/or brokerage services to the
investment adviser. In placing orders for the fund's portfolio transactions, the
investment adviser does not commit to any specific amount of business with any
particular broker-dealer. 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. However, when the
investment adviser places orders for the fund's portfolio transactions, it does
not give any consideration to whether a broker-dealer has sold shares of the
funds managed by the investment adviser.


                                       9

                                 The Investment Company of America / Prospectus

<PAGE>

PORTFOLIO HOLDINGS

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

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

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
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.

The primary individual portfolio counselors for The Investment Company of
America are:

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

 R. MICHAEL SHANAHAN          16 years        Chairman Emeritus,         Serves as an equity
 Vice Chairman of the     (plus 7 years of    Capital Research and       portfolio counselor
 Board                    prior experience    Management Company
                               as an
                         investment analyst   Investment professional
                           for the fund)      for 42 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------





                                       10

The Investment Company of America / Prospectus


<PAGE>


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

 JAMES B. LOVELACE            15 years        Senior Vice President      Serves as an equity
 Senior Vice President    (plus 3 years of    and Director, Capital      portfolio counselor
 and Director             prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 25 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------
 DONALD D. O'NEAL             15 years        Senior Vice President      Serves as an equity
 Senior Vice President    (plus 4 years of    and Director, Capital      portfolio counselor
 and Director             prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 22 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------
 JOYCE E. GORDON              6 years         Senior Vice President      Serves as an equity
 Senior Vice President   (plus 12 years of    and Director, Capital      portfolio counselor
                          prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 27 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------
 J. DALE HARVEY                1 year         Vice President, Capital    Serves as an equity
 Vice President                               Research and Management    portfolio counselor
                                              Company

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




                                       11

                                 The Investment Company of America / Prospectus

<PAGE>


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

 JAMES E. DRASDO              20 years        Senior Vice President      Serves as an equity
                          (plus 9 years of    and Director, Capital      portfolio counselor
                          prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 35 years in total;
                                              30 years with Capital
                                              Research and Management
                                              Company or affiliate
- -----------------------------------------------------------------------------------------------
 DARCY B. KOPCHO               1 year         Senior Vice President      Serves as an equity
                                              and Director, Capital      portfolio counselor
                                              Research and Management
                                              Company

                                              Investment professional
                                              for 27 years in total;
                                              19 years with Capital
                                              Research and Management
                                              Company or affiliate
- -----------------------------------------------------------------------------------------------
 C. ROSS SAPPENFIELD          7 years         Vice President, Capital    Serves as an equity
                          (plus 6 years of    Research and Management    portfolio counselor
                          prior experience    Company
                               as an
                         investment analyst   Investment professional
                           for the fund)      for 15 years, all 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 can be found in the
statement of additional information.

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


                                       12

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

PURCHASES AND EXCHANGES

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

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

Class R shares generally are available only to 401(k) plans, 457 plans,
employer-sponsored 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 shares
generally are available only to retirement plans with $1 million or more in plan
assets. In addition, Class R-5 shares are available for investment by American
Funds Target Date Retirement Series/SM/. 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, individual 403(b) plans and 529 college savings plans.

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

FREQUENT TRADING OF FUND SHARES

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


                                       13

                                 The Investment Company of America / Prospectus

<PAGE>

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 certain policies
and procedures with respect to frequent purchases and redemptions of fund
shares. Under the fund's "purchase blocking policy," any shareholder redeeming
shares (including redemptions that are part of an exchange transaction) having a
value of $5,000 or more from the fund will be precluded from investing in the
fund (including investments that are part of an exchange transaction) for 30
calendar days after the redemption transaction. This prohibition will not apply
to redemptions by shareholders whose shares are held on the books of third-party
intermediaries (such as investment dealers holding shareholder accounts in
street name, retirement plan recordkeepers, insurance company separate accounts
and bank trust companies) that have not adopted procedures to implement this
policy. American Funds Service Company will work with intermediaries to develop
such procedures or other procedures that American Funds Service Company
determines are reasonably designed to achieve the objective of the purchase
blocking policy. At the time the intermediaries adopt these procedures,
shareholders whose accounts are on the books of such intermediaries will be
subject to this purchase blocking policy or another frequent trading policy that
is reasonably designed to achieve the objective of the purchase blocking policy.
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.

Under the fund's purchase blocking policy, certain purchases will not be
prevented and certain redemptions will not trigger a purchase block, such as:
systematic redemptions and purchases where the entity maintaining the
shareholder account is able to identify the transaction as a systematic
redemption or purchase; purchases and redemptions of shares having a value of
less than $5,000; transactions in Class 529 shares; purchases and redemptions
resulting from reallocations by American Funds Target Date Retirement Series;
retirement plan contributions, loans and distributions (including hardship
withdrawals) identified as such on the retirement plan recordkeeper's system;
and purchase transactions involving transfers of assets, rollovers, Roth IRA
conversions and IRA recharacterizations, where the entity maintaining the
shareholder account is able to identify the transaction as one of these types of
transactions.

NOTWITHSTANDING THE FUND'S PURCHASE BLOCKING POLICY, ALL TRANSACTIONS IN FUND
SHARES REMAIN SUBJECT TO THE FUND'S AND AMERICAN FUNDS DISTRIBUTORS' RIGHT TO
RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY (INCLUDING THE TYPES OF
TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED OR TRIGGER A PURCHASE
BLOCK UNDER THE 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.


                                       14

The Investment Company of America / Prospectus


<PAGE>

SALES

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

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 within 90 days after the date of the
redemption or distribution. Proceeds will be reinvested in the same share class
from which the original redemption or distribution was made. Redemption proceeds
of Class A shares representing direct purchases in American Funds money market
funds that are reinvested in non-money market American Funds will be subject to
a sales charge. Proceeds will be reinvested at the next calculated net asset
value after your request is received and accepted by American Funds Service
Company. 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." This paragraph does not apply to
rollover investments as described under "Rollovers from retirement plans to
IRAs."

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 4:00 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, if events occur between the close of markets
outside the United States and the close of regular trading on the New York Stock
Exchange that, in the opinion of the investment adviser, materially affect the
value of any of the fund's  securities that principally trade in those
international markets, those securities will be valued in accordance with fair
value procedures. Use of these procedures is intended to result in more
appropriate net asset values. In addition, such use will reduce, if not
eliminate, potential arbitrage opportunities otherwise available to short-term
investors.

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

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


                                       15

                                 The Investment Company of America / 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.

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES

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

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


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


                                       16

The Investment Company of America / Prospectus


<PAGE>

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" below).

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

 EMPLOYER-SPONSORED RETIREMENT PLANS

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

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

CLASS R SHARES

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


                                       17

                                 The Investment Company of America / Prospectus

<PAGE>

Sales charge reductions

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

IN ADDITION TO THE INFORMATION BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
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. However,
for this purpose, investments representing direct purchases of American Funds
money market funds are excluded. Following are different ways that you may
qualify for a reduced Class A sales charge:

 CONCURRENT PURCHASES

 Simultaneous purchases of any class of shares of two or more American Funds 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 to determine the initial sales charge you pay on each purchase
 of Class A shares. Subject to your investment dealer's or recordkeeper's
 capabilities, your accumulated holdings will be calculated as the higher of (a)
 the current value of your existing holdings or (b) the amount you invested
 (excluding capital appreciation) less any withdrawals. Please see the statement
 of additional information for details. You should retain any records necessary
 to substantiate the historical amounts you have invested. The current value of
 existing investments in an American Legacy/(R)/ Retirement Investment Plan may
 also be taken into account to determine your Class A sales charge.

 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 American Funds non-money market funds you intend to make over
 a 13-month period to determine the applicable sales charge; however, purchases
 made under a right of


                                       18

The Investment Company of America / Prospectus


<PAGE>

 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" above for more
 information.

RIGHT OF REINVESTMENT

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

Rollovers from retirement plans to IRAs

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

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

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

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

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

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


                                       19

                                 The Investment Company of America / Prospectus

<PAGE>

Plans of distribution

The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of directors. The plans
provide for payments, based on annualized percentages of average daily net
assets, of up to .25% for Class A shares, up to 1.00% for Class R-1 and R-2
shares, up to .75% for Class R-3 shares and up to .50% for Class R-4 shares. For
all share classes, 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." Since these fees are paid out of the
fund's assets or income on an ongoing basis, over time they will increase the
cost and reduce the return of your investment.

Other compensation to dealers

American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 75 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 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the 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 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.


                                       20

The Investment Company of America / 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. When a dividend or
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.

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

TAXES ON DIVIDENDS AND DISTRIBUTIONS

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

TAXES ON TRANSACTIONS

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

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.


                                       21

                                 The Investment Company of America / Prospectus
<PAGE>

Financial highlights/1/

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). The figures under "Ratio of expenses to average net assets after
reimbursements/waivers" reflect the impact, if any, of certain
reimbursements/waivers from Capital Research and Management Company. For more
information about these reimbursements/waivers, see the Annual Fund Operating
Expenses table under "Fees and expenses of the fund" in this prospectus and the
fund's annual report. The information below has been audited by
PricewaterhouseCoopers 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/2/

                                                                  Net gains
                                                                 (losses) on
                                                                  securities
                                      Net asset                     (both           Total
                                       value,         Net          realized         from
                                      beginning   investment         and         investment
                                      of period     income       unrealized)     operations
- -----------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006                  $31.36        $.72          $ 4.23          $ 4.95
Year ended 12/31/2005                   30.75         .64            1.46            2.10
Year ended 12/31/2004                   28.84         .60            2.19            2.79
Year ended 12/31/2003                   23.48         .54            5.55            6.09
Year ended 12/31/2002                   28.53         .49           (4.56)          (4.07)
- -----------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2006                   31.25         .44            4.22            4.66
Year ended 12/31/2005                   30.67         .38            1.44            1.82
Year ended 12/31/2004                   28.77         .36            2.17            2.53
Year ended 12/31/2003                   23.46         .31            5.54            5.85
Period from 6/6/2002 to 12/31/2002      27.27         .20           (3.36)          (3.16)
- -----------------------------------------------------------------------------------------------
CLASS R-2:
 Year ended 12/31/2006                  31.26         .43            4.23            4.66
 Year ended 12/31/2005                  30.67         .37            1.45            1.82
 Year ended 12/31/2004                  28.77         .37            2.17            2.54
 Year ended 12/31/2003                  23.46         .31            5.54            5.85
 Period from 5/21/2002 to 12/31/2002    28.23         .23           (4.34)          (4.11)
- -----------------------------------------------------------------------------------------------
CLASS R-3:
 Year ended 12/31/2006                 $31.30        $.59          $ 4.24          $ 4.83
 Year ended 12/31/2005                  30.71         .52            1.45            1.97
 Year ended 12/31/2004                  28.80         .50            2.17            2.67
 Year ended 12/31/2003                  23.47         .41            5.55            5.96
 Period from 6/4/2002 to 12/31/2002     27.58         .27           (3.69)          (3.42)
- -----------------------------------------------------------------------------------------------
CLASS R-4:
 Year ended 12/31/2006                  31.32         .69            4.24            4.93
 Year ended 12/31/2005                  30.72         .62            1.45            2.07
 Year ended 12/31/2004                  28.82         .60            2.16            2.76
 Year ended 12/31/2003                  23.47         .51            5.55            6.06
 Period from 5/28/2002 to 12/31/2002    28.22         .32           (4.33)          (4.01)
- -----------------------------------------------------------------------------------------------
CLASS R-5:
 Year ended 12/31/2006                  31.35         .79            4.24            5.03
 Year ended 12/31/2005                  30.75         .70            1.46            2.16
 Year ended 12/31/2004                  28.84         .67            2.18            2.85
 Year ended 12/31/2003                  23.48         .56            5.59            6.15
 Period from 5/15/2002 to 12/31/2002    28.37         .39           (4.50)          (4.11)






                                       22

The Investment Company of America / Prospectus


<PAGE>


                                            DIVIDENDS AND DISTRIBUTIONS




                                      Dividends   Distributions      Total      Net asset
                                      (from net       (from        dividends     value,
                                      investment     capital          and        end of      Total
                                       income)       gains)      distributions   period    return/3/
- ------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006                   $(.74)       $(2.06)        $(2.80)      $33.51      15.94%
Year ended 12/31/2005                    (.68)         (.81)         (1.49)       31.36       6.87
Year ended 12/31/2004                    (.52)         (.36)          (.88)       30.75       9.78
Year ended 12/31/2003                    (.52)         (.21)          (.73)       28.84      26.30
Year ended 12/31/2002                    (.52)         (.46)          (.98)       23.48     (14.47)
- ------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2006                    (.46)        (2.06)         (2.52)       33.39      14.96
Year ended 12/31/2005                    (.43)         (.81)         (1.24)       31.25       5.93
Year ended 12/31/2004                    (.27)         (.36)          (.63)       30.67       8.84
Year ended 12/31/2003                    (.33)         (.21)          (.54)       28.77      25.18
Period from 6/6/2002 to 12/31/2002       (.30)         (.35)          (.65)       23.46     (11.68)
- ------------------------------------------------------------------------------------------------------
CLASS R-2:
 Year ended 12/31/2006                   (.46)        (2.06)         (2.52)       33.40      14.99
 Year ended 12/31/2005                   (.42)         (.81)         (1.23)       31.26       5.95
 Year ended 12/31/2004                   (.28)         (.36)          (.64)       30.67       8.88
 Year ended 12/31/2003                   (.33)         (.21)          (.54)       28.77      25.18
 Period from 5/21/2002 to 12/31/2002     (.31)         (.35)          (.66)       23.46     (14.64)
- ------------------------------------------------------------------------------------------------------
CLASS R-3:
 Year ended 12/31/2006                  $(.62)       $(2.06)        $(2.68)      $33.45      15.54%
 Year ended 12/31/2005                   (.57)         (.81)         (1.38)       31.30       6.43
 Year ended 12/31/2004                   (.40)         (.36)          (.76)       30.71       9.34
 Year ended 12/31/2003                   (.42)         (.21)          (.63)       28.80      25.70
 Period from 6/4/2002 to 12/31/2002      (.34)         (.35)          (.69)       23.47     (12.49)
- ------------------------------------------------------------------------------------------------------
CLASS R-4:
 Year ended 12/31/2006                   (.71)        (2.06)         (2.77)       33.48      15.90
 Year ended 12/31/2005                   (.66)         (.81)          1.47)       31.32       6.77
 Year ended 12/31/2004                   (.50)         (.36)          (.86)       30.72       9.67
 Year ended 12/31/2003                   (.50)         (.21)          (.71)       28.82      26.19
 Period from 5/28/2002 to 12/31/2002     (.39)         (.35)          (.74)       23.47     (14.31)
- ------------------------------------------------------------------------------------------------------
CLASS R-5:
 Year ended 12/31/2006                   (.81)        (2.06)         (2.87)       33.51      16.22
 Year ended 12/31/2005                   (.75)         (.81)         (1.56)       31.35       7.06
 Year ended 12/31/2004                   (.58)         (.36)          (.94)       30.75      10.02
 Year ended 12/31/2003                   (.58)         (.21)          (.79)       28.84      26.58
 Period from 5/15/2002 to 12/31/2002     (.43)         (.35)          (.78)       23.48     (14.59)


                                                      Ratio of     Ratio of
                                                      expenses     expenses
                                                     to average   to average      Ratio
                                           Net       net assets   net assets     of net
                                         assets,       before        after      income to
                                         end of         reim-        reim-       average
                                         period      bursements/  bursements/      net
                                      (in millions)    waivers    waivers/4/     assets
- ------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006                    $74,181        .57%         .54%        2.16%
Year ended 12/31/2005                     66,959        .57          .55         2.06
Year ended 12/31/2004                     64,880        .57          .57         2.06
Year ended 12/31/2003                     58,353        .59          .59         2.14
Year ended 12/31/2002                     46,129        .59          .59         1.89
- ------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2006                         49       1.42         1.39         1.31
Year ended 12/31/2005                         29       1.42         1.40         1.22
Year ended 12/31/2004                         23       1.47         1.46         1.21
Year ended 12/31/2003                         14       1.51         1.47         1.18
Period from 6/6/2002 to 12/31/2002             1       2.43/5/      1.47/5/      1.49/5/
- ------------------------------------------------------------------------------------------
CLASS R-2:
 Year ended 12/31/2006                       625       1.50         1.39         1.31
 Year ended 12/31/2005                       479       1.57         1.40         1.21
 Year ended 12/31/2004                       361       1.63         1.42         1.27
 Year ended 12/31/2003                       188       1.76         1.43         1.21
 Period from 5/21/2002 to 12/31/2002          24       1.57/5/      1.43/5/      1.61/5/
- ------------------------------------------------------------------------------------------
CLASS R-3:
 Year ended 12/31/2006                   $   909        .94%         .92%        1.78%
 Year ended 12/31/2005                       666        .95          .93         1.68
 Year ended 12/31/2004                       493        .99          .98         1.72
 Year ended 12/31/2003                       231       1.06         1.05         1.60
 Period from 6/4/2002 to 12/31/2002           24       1.11/5/      1.05/5/      2.00/5/
- ------------------------------------------------------------------------------------------
CLASS R-4:
 Year ended 12/31/2006                       323        .65          .62         2.07
 Year ended 12/31/2005                       236        .65          .63         1.99
 Year ended 12/31/2004                       119        .67          .66         2.05
 Year ended 12/31/2003                        40        .68          .68         2.00
 Period from 5/28/2002 to 12/31/2002           9        .73/5/       .69/5/      2.25/5/
- ------------------------------------------------------------------------------------------
CLASS R-5:
 Year ended 12/31/2006                     1,980        .35          .33         2.37
 Year ended 12/31/2005                     1,562        .36          .34         2.28
 Year ended 12/31/2004                     1,408        .36          .35         2.28
 Year ended 12/31/2003                     1,201        .36          .36         2.11
 Period from 5/15/2002 to 12/31/2002          48        .37/5/       .37/5/      2.56/5/





                                          YEAR ENDED DECEMBER 31
                           2006        2005        2004        2003         2002
- ------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
 RATE FOR ALL CLASSES      20%         19%         19%         24%          27%
 OF SHARES




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

/2/  Based on average shares outstanding.
/3/  Total returns exclude all sales charges.

/4/  The ratios in this column reflect 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 for all share classes. In addition, during the
     start-up period for the retirement plan share classes (except Class R-5),
     Capital Research and Management Company agreed to pay a portion of the fees
     related to transfer agent services.

/5/  Annualized.



                                       23

                                 The Investment Company of America / Prospectus

<PAGE>

NOTES


                                       24

The Investment Company of America / Prospectus


<PAGE>

NOTES


                                       25

                                 The Investment Company of America / Prospectus

<PAGE>

NOTES


                                       26

The Investment Company of America / Prospectus


<PAGE>

NOTES


                                       27

                                 The Investment Company of America / 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 DEALER SERVICES                American Funds Distributors
                                    800/421-9900
                                    americanfunds.com
 FOR 24-HOUR INFORMATION            For Class R share information, visit
                                    AmericanFundsRetirement.com


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



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

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

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

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

HOUSEHOLD MAILINGS Each year you are automatically sent an updated prospectus
and annual and semi-annual reports for the fund. You may also occasionally
receive proxy statements for the fund. In order to reduce the volume of mail you
receive, when possible, only one copy of these documents will be sent to
shareholders who are part of the same family and share the same household address.

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 333 South Hope Street, Los
Angeles, California 90071.


[logo - recycle bug]
Printed on recycled paper







RPGEPR-904-0307P Litho in USA CGD/RRD/8036     Investment Company File No. 811-00116
- -------------------------------------------------------------------------------------
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/ VINCENT P. CORTI
    VINCENT P. CORTI
    SECRETARY









<PAGE>





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




The Investment
Company of America/(R)/



RETIREMENT PLAN
PROSPECTUS






March 1, 2007






TABLE OF CONTENTS

 1    Risk/Return summary
 4    Fees and expenses of the fund
 6    Investment objectives, strategies and risks
 9    Management and organization
13    Purchase, exchange and sale of shares
16    Sales charges
18    Sales charge reductions
19    Rollovers from retirement plans to IRAs
20    Plans of distribution
20    Other compensation to dealers
21    Distributions and taxes
22    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>

[This page was intentionally left blank.]



<PAGE>

Risk/Return summary

The fund seeks to make your investment grow and provide you with income over
time by investing primarily in common stocks that offer growth and dividend
potential.

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

The fund's investments are limited to securities of companies that are included
on its eligible list. Changes to the eligible list are reviewed and authorized
by the fund's board of directors at the recommendation of Capital Research and
Management Company, the fund's investment adviser.

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

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


                                       1

                                 The Investment Company of America / Prospectus

<PAGE>

HISTORICAL INVESTMENT RESULTS

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


CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES

(Results do not include a sales charge; if a sales charge were included,
 results would be lower.)

[begin bar chart]

1997            29.81
1998            22.93
1999            16.55
2000             3.84
2001            -4.59
2002           -14.47
2003            26.30
2004             9.78
2005             6.87
2006            15.94

[end bar chart]





Highest/Lowest quarterly results during this time period were:




HIGHEST            17.34%      (quarter ended December 31, 1998)
LOWEST            -14.51%      (quarter ended September 30, 2002)






                                       2

The Investment Company of America / Prospectus


<PAGE>



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

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

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

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 7 reflects the fund's results calculated without a sales charge.


 INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006
                                  1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
- --------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 1/1/34     9.28%    6.73%    9.82%       12.82%
- --------------------------------------------------------------------------




                                  1 YEAR   LIFETIME/1/
- -------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/6/02   14.96%      8.72%
- -------------------------------------------------------
 CLASS R-2 -- FIRST SOLD 5/21/02  14.99       7.85
- -------------------------------------------------------
 CLASS R-3 -- FIRST SOLD 6/4/02   15.54       8.93
- -------------------------------------------------------
 CLASS R-4 -- FIRST SOLD 5/28/02  15.90       8.70
- -------------------------------------------------------
 CLASS R-5 -- FIRST SOLD 5/15/02  16.22       8.84
- -------------------------------------------------------




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

 INDEXES
 S&P 500/3/                        15.78%    6.19%      8.42%       11.33%
 Lipper Growth and Income Funds    15.57     7.59       8.01          N/A
  Index/4/
Class A annualized 30-day yield at December 31, 2006: 2.04%/5/
(For current yield information, please call American FundsLine at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.

/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The composition of each index may vary over time.

/3/  Standard & Poor's 500 Composite Index is a market capitalization-weighted
     index based on the average weighted performance of 500 widely held common
     stocks. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper Growth and 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 sales charges or taxes. This index was not in existence as of the
     date the fund became available; therefore, lifetime results are not shown.
/5/  Reflects a fee waiver (2.02% without the waiver) as described in the Annual
     Fund Operating Expenses table under "Fees and expenses of the fund."


                                       3

                                 The Investment Company of America / Prospectus

<PAGE>

Fees and expenses of the fund

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



 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
                                               CLASS A    ALL R SHARE CLASSES
- ------------------------------------------------------------------------------

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



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


 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
                                            CLASS  CLASS  CLASS  CLASS   CLASS
                                   CLASS A   R-1    R-2    R-3    R-4     R-5
- -------------------------------------------------------------------------------

 Management fees/1/                 0.24%   0.24%  0.24%  0.24%  0.24%   0.24%
- -------------------------------------------------------------------------------
 Distribution and/or service        0.23    1.00   0.75   0.50   0.25    none
 (12b-1) fees/2/
- -------------------------------------------------------------------------------
 Other expenses                     0.10    0.18   0.51   0.20   0.16    0.11
- -------------------------------------------------------------------------------
 Total annual fund operating        0.57    1.42   1.50   0.94   0.65    0.35
 expenses/1/
- -------------------------------------------------------------------------------



/1/  The fund's investment adviser is currently waiving 10% of its management fee.
     The waiver may be discontinued at any time in consultation with the fund's
     board, but it is expected to continue at this level until further review. The
     fund's investment adviser and board intend to review the waiver as
     circumstances warrant. In addition, the investment adviser paid a portion of
     the fund's transfer agent fees for certain R share classes. Management fees and
     total expenses do not reflect any waiver or reimbursement. Information
     regarding the effect of any waiver/reimbursement on total annual fund operating
     expenses can be found in the Financial Highlights table in this prospectus and
     in the fund's annual report.

/2/  Class A, R-1, R-2, R-3 and R-4 12b-1 fees may not exceed .25%, 1.00%, 1.00%,
     .75% and .50%, respectively, of the class' average net assets annually.


                                       4

The Investment Company of America / Prospectus


<PAGE>

OTHER EXPENSES

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


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




/1/  Payment amount depends on the date upon which services commenced.

/2/  Payment with respect to Recordkeeper Direct/(R)/ program.
/3/  Payment with respect to PlanPremier/(R)/ program.

EXAMPLES

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

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


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

 Class A*                        $630    $747     $875      $1,248
- --------------------------------------------------------------------
 Class R-1                        145     449      776       1,702
- --------------------------------------------------------------------
 Class R-2                        153     474      818       1,791
- --------------------------------------------------------------------
 Class R-3                         96     300      520       1,155
- --------------------------------------------------------------------
 Class R-4                         66     208      362         810
- --------------------------------------------------------------------
 Class R-5                         36     113      197         443
- --------------------------------------------------------------------



* Reflects the maximum initial sales charge in the first year.


                                       5

                                 The Investment Company of America / Prospectus

<PAGE>

Investment objectives, strategies and risks

The fund's investment objectives are to achieve long-term growth of capital and
income. The fund strives to accomplish these objectives through extensive U.S.
and global research, careful selection and broad diversification. In the
selection of securities for investment, potential for capital appreciation and
future dividends are given more weight than current yield. The fund invests
primarily in common stocks. The fund's investments are limited to securities of
companies that are included on its eligible list, which consists of securities
deemed suitable by the fund's investment adviser in light of the fund's
investment objectives and policies. Securities are added to, or deleted from,
the eligible list by the board of directors, after reviewing and acting upon the
recommendations of the investment adviser.

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

The fund may invest up to 15% of its assets, at the time of purchase, in
securities of issuers domiciled outside the United States and not included in
Standard & Poor's 500 Composite Index. Investments in securities issued by
entities based outside the United States may be subject to the risks described
above to a greater extent and may also be affected by currency fluctuation and
controls; different accounting, auditing, financial reporting and legal
standards and practices in some countries; expropriation; changes in tax policy;
greater market volatility; differing securities market structures; higher
transaction costs; and various administrative difficulties, such as delays in
clearing and settling portfolio transactions or in receiving payment of
dividends.

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

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

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively valued
companies that, in its opinion, represent above-average long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is through fundamental analysis, which may include meeting with
company executives and employees, suppliers, customers and competitors.


                                       6

The Investment Company of America / Prospectus


<PAGE>

Securities may be sold when the investment adviser believes that they no longer
represent relatively attractive investment opportunities.

OTHER IMPORTANT INVESTMENT PRACTICES

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

ADDITIONAL INVESTMENT RESULTS

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

 ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006
                                  1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
- --------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 1/1/34     15.94%   8.00%    10.47%      12.91%




                                  1 YEAR   LIFETIME/1/
- -------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/6/02   14.96%      8.72%
- -------------------------------------------------------
 CLASS R-2 -- FIRST SOLD 5/21/02  14.99       7.85
- -------------------------------------------------------
 CLASS R-3 -- FIRST SOLD 6/4/02   15.54       8.93
- -------------------------------------------------------
 CLASS R-4 -- FIRST SOLD 5/28/02  15.90       8.70
- -------------------------------------------------------
 CLASS R-5 -- FIRST SOLD 5/15/02  16.22       8.84




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

 INDEXES
 S&P 500/3/                 15.78%      6.19%        8.42%         11.33%
 Lipper Growth and Income   15.57       7.59         8.01            N/A
  Funds Index/4/
Class A distribution rate at December 31, 2006: 2.08%/5/
(For current distribution rate information, please call American FundsLine at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.

/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The composition of each index may vary over time.

/3/  Standard & Poor's 500 Composite Index is a market capitalization-weighted
     index based on the average weighted performance of 500 widely held common
     stocks. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper Growth and 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 sales charges or taxes. This index was not in existence as of the
     date the fund became available; therefore, lifetime results are not shown.
/5/  The distribution rate is based on actual distributions paid to shareholders
     over a 12-month period. Capital gain distributions, if any, are added back to
     the net asset value to determine the rate.


                                       7

                                 The Investment Company of America / Prospectus

<PAGE>


INDUSTRY SECTOR DIVERSIFICATION AS OF DECEMBER 31, 2006 (percent of net assets)

[begin pie chart]

Information technology                                       13.83%
Financials                                                   12.27%
Industrials                                                   9.71%
Consumer staples                                              9.39%
Health care                                                   8.88%
Convertible securities                                        0.48%
Other industries                                             30.24%
Short-term securities & other assets less liabilities        15.20%

[end pie chart]




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

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


                                       8

The Investment Company of America / 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 135 South State
College Boulevard, Brea, California 92821. Capital Research and Management
Company manages the investment portfolio and business affairs of the fund. The
total management fee paid by the fund, as a percentage of average net assets,
for the previous fiscal year appears in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." A discussion regarding the basis for the
approval of the fund's investment advisory and service agreement by the fund's
board of directors is contained in the fund's semi-annual report to shareholders
for the fiscal period ended June 30, 2006.

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. The investment adviser strives to obtain best execution
for the fund's portfolio transactions, taking into account a variety of factors
to produce the most favorable total price reasonably attainable under the
circumstances. These factors include the size and type of transaction, the cost
and quality of executions, and the broker-dealer's ability to offer liquidity
and anonymity. For example, with respect to equity transactions, the fund does
not consider the investment adviser as having an obligation to obtain the lowest
available commission rate to the exclusion of price, service and qualitative
considerations. Subject to the considerations outlined above, 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 who have provided investment research and/or brokerage services to the
investment adviser. In placing orders for the fund's portfolio transactions, the
investment adviser does not commit to any specific amount of business with any
particular broker-dealer. 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. However, when the
investment adviser places orders for the fund's portfolio transactions, it does
not give any consideration to whether a broker-dealer has sold shares of the
funds managed by the investment adviser.


                                       9

                                 The Investment Company of America / Prospectus

<PAGE>

PORTFOLIO HOLDINGS

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

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

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
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.

The primary individual portfolio counselors for The Investment Company of
America are:

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

 R. MICHAEL SHANAHAN          16 years        Chairman Emeritus,         Serves as an equity
 Vice Chairman of the     (plus 7 years of    Capital Research and       portfolio counselor
 Board                    prior experience    Management Company
                               as an
                         investment analyst   Investment professional
                           for the fund)      for 42 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------





                                       10

The Investment Company of America / Prospectus


<PAGE>


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

 JAMES B. LOVELACE            15 years        Senior Vice President      Serves as an equity
 Senior Vice President    (plus 3 years of    and Director, Capital      portfolio counselor
 and Director             prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 25 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------
 DONALD D. O'NEAL             15 years        Senior Vice President      Serves as an equity
 Senior Vice President    (plus 4 years of    and Director, Capital      portfolio counselor
 and Director             prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 22 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------
 JOYCE E. GORDON              6 years         Senior Vice President      Serves as an equity
 Senior Vice President   (plus 12 years of    and Director, Capital      portfolio counselor
                          prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 27 years, all with
                                              Capital Research and
                                              Management Company or
                                              affiliate
- -----------------------------------------------------------------------------------------------
 J. DALE HARVEY                1 year         Vice President, Capital    Serves as an equity
 Vice President                               Research and Management    portfolio counselor
                                              Company

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




                                       11

                                 The Investment Company of America / Prospectus

<PAGE>


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

 JAMES E. DRASDO              20 years        Senior Vice President      Serves as an equity
                          (plus 9 years of    and Director, Capital      portfolio counselor
                          prior experience    Research and Management
                               as an          Company
                         investment analyst
                           for the fund)      Investment professional
                                              for 35 years in total;
                                              30 years with Capital
                                              Research and Management
                                              Company or affiliate
- -----------------------------------------------------------------------------------------------
 DARCY B. KOPCHO               1 year         Senior Vice President      Serves as an equity
                                              and Director, Capital      portfolio counselor
                                              Research and Management
                                              Company

                                              Investment professional
                                              for 27 years in total;
                                              19 years with Capital
                                              Research and Management
                                              Company or affiliate
- -----------------------------------------------------------------------------------------------
 C. ROSS SAPPENFIELD          7 years         Vice President, Capital    Serves as an equity
                          (plus 6 years of    Research and Management    portfolio counselor
                          prior experience    Company
                               as an
                         investment analyst   Investment professional
                           for the fund)      for 15 years, all 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 can be found in the
statement of additional information.

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


                                       12

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

PURCHASES AND EXCHANGES

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

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

Class R shares generally are available only to 401(k) plans, 457 plans,
employer-sponsored 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 shares
generally are available only to retirement plans with $1 million or more in plan
assets. In addition, Class R-5 shares are available for investment by American
Funds Target Date Retirement Series/SM/. 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, individual 403(b) plans and 529 college savings plans.

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

FREQUENT TRADING OF FUND SHARES

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


                                       13

                                 The Investment Company of America / Prospectus

<PAGE>

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 certain policies
and procedures with respect to frequent purchases and redemptions of fund
shares. Under the fund's "purchase blocking policy," any shareholder redeeming
shares (including redemptions that are part of an exchange transaction) having a
value of $5,000 or more from the fund will be precluded from investing in the
fund (including investments that are part of an exchange transaction) for 30
calendar days after the redemption transaction. This prohibition will not apply
to redemptions by shareholders whose shares are held on the books of third-party
intermediaries (such as investment dealers holding shareholder accounts in
street name, retirement plan recordkeepers, insurance company separate accounts
and bank trust companies) that have not adopted procedures to implement this
policy. American Funds Service Company will work with intermediaries to develop
such procedures or other procedures that American Funds Service Company
determines are reasonably designed to achieve the objective of the purchase
blocking policy. At the time the intermediaries adopt these procedures,
shareholders whose accounts are on the books of such intermediaries will be
subject to this purchase blocking policy or another frequent trading policy that
is reasonably designed to achieve the objective of the purchase blocking policy.
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.

Under the fund's purchase blocking policy, certain purchases will not be
prevented and certain redemptions will not trigger a purchase block, such as:
systematic redemptions and purchases where the entity maintaining the
shareholder account is able to identify the transaction as a systematic
redemption or purchase; purchases and redemptions of shares having a value of
less than $5,000; transactions in Class 529 shares; purchases and redemptions
resulting from reallocations by American Funds Target Date Retirement Series;
retirement plan contributions, loans and distributions (including hardship
withdrawals) identified as such on the retirement plan recordkeeper's system;
and purchase transactions involving transfers of assets, rollovers, Roth IRA
conversions and IRA recharacterizations, where the entity maintaining the
shareholder account is able to identify the transaction as one of these types of
transactions.

NOTWITHSTANDING THE FUND'S PURCHASE BLOCKING POLICY, ALL TRANSACTIONS IN FUND
SHARES REMAIN SUBJECT TO THE FUND'S AND AMERICAN FUNDS DISTRIBUTORS' RIGHT TO
RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY (INCLUDING THE TYPES OF
TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED OR TRIGGER A PURCHASE
BLOCK UNDER THE 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.


                                       14

The Investment Company of America / Prospectus


<PAGE>

SALES

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

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 within 90 days after the date of the
redemption or distribution. Proceeds will be reinvested in the same share class
from which the original redemption or distribution was made. Redemption proceeds
of Class A shares representing direct purchases in American Funds money market
funds that are reinvested in non-money market American Funds will be subject to
a sales charge. Proceeds will be reinvested at the next calculated net asset
value after your request is received and accepted by American Funds Service
Company. 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." This paragraph does not apply to
rollover investments as described under "Rollovers from retirement plans to
IRAs."

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 4:00 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, if events occur between the close of markets
outside the United States and the close of regular trading on the New York Stock
Exchange that, in the opinion of the investment adviser, materially affect the
value of any of the fund's  securities that principally trade in those
international markets, those securities will be valued in accordance with fair
value procedures. Use of these procedures is intended to result in more
appropriate net asset values. In addition, such use will reduce, if not
eliminate, potential arbitrage opportunities otherwise available to short-term
investors.

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

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


                                       15

                                 The Investment Company of America / 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.

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES

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

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


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


                                       16

The Investment Company of America / Prospectus


<PAGE>

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" below).

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

 EMPLOYER-SPONSORED RETIREMENT PLANS

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

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

CLASS R SHARES

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


                                       17

                                 The Investment Company of America / Prospectus

<PAGE>

Sales charge reductions

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

IN ADDITION TO THE INFORMATION BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
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. However,
for this purpose, investments representing direct purchases of American Funds
money market funds are excluded. Following are different ways that you may
qualify for a reduced Class A sales charge:

 CONCURRENT PURCHASES

 Simultaneous purchases of any class of shares of two or more American Funds 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 to determine the initial sales charge you pay on each purchase
 of Class A shares. Subject to your investment dealer's or recordkeeper's
 capabilities, your accumulated holdings will be calculated as the higher of (a)
 the current value of your existing holdings or (b) the amount you invested
 (excluding capital appreciation) less any withdrawals. Please see the statement
 of additional information for details. You should retain any records necessary
 to substantiate the historical amounts you have invested. The current value of
 existing investments in an American Legacy/(R)/ Retirement Investment Plan may
 also be taken into account to determine your Class A sales charge.

 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 American Funds non-money market funds you intend to make over
 a 13-month period to determine the applicable sales charge; however, purchases
 made under a right of


                                       18

The Investment Company of America / Prospectus


<PAGE>

 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" above for more
 information.

RIGHT OF REINVESTMENT

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

Rollovers from retirement plans to IRAs

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

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

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

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

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

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


                                       19

                                 The Investment Company of America / Prospectus

<PAGE>

Plans of distribution

The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of directors. The plans
provide for payments, based on annualized percentages of average daily net
assets, of up to .25% for Class A shares, up to 1.00% for Class R-1 and R-2
shares, up to .75% for Class R-3 shares and up to .50% for Class R-4 shares. For
all share classes, 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." Since these fees are paid out of the
fund's assets or income on an ongoing basis, over time they will increase the
cost and reduce the return of your investment.

Other compensation to dealers

American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 75 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 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the 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 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.


                                       20

The Investment Company of America / 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. When a dividend or
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.

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

TAXES ON DIVIDENDS AND DISTRIBUTIONS

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

TAXES ON TRANSACTIONS

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

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.


                                       21

                                 The Investment Company of America / Prospectus
<PAGE>

Financial highlights/1/

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). The figures under "Ratio of expenses to average net assets after
reimbursements/waivers" reflect the impact, if any, of certain
reimbursements/waivers from Capital Research and Management Company. For more
information about these reimbursements/waivers, see the Annual Fund Operating
Expenses table under "Fees and expenses of the fund" in this prospectus and the
fund's annual report. The information below has been audited by
PricewaterhouseCoopers 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/2/

                                                                  Net gains
                                                                 (losses) on
                                                                  securities
                                      Net asset                     (both           Total
                                       value,         Net          realized         from
                                      beginning   investment         and         investment
                                      of period     income       unrealized)     operations
- -----------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006                  $31.36        $.72          $ 4.23          $ 4.95
Year ended 12/31/2005                   30.75         .64            1.46            2.10
Year ended 12/31/2004                   28.84         .60            2.19            2.79
Year ended 12/31/2003                   23.48         .54            5.55            6.09
Year ended 12/31/2002                   28.53         .49           (4.56)          (4.07)
- -----------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2006                   31.25         .44            4.22            4.66
Year ended 12/31/2005                   30.67         .38            1.44            1.82
Year ended 12/31/2004                   28.77         .36            2.17            2.53
Year ended 12/31/2003                   23.46         .31            5.54            5.85
Period from 6/6/2002 to 12/31/2002      27.27         .20           (3.36)          (3.16)
- -----------------------------------------------------------------------------------------------
CLASS R-2:
 Year ended 12/31/2006                  31.26         .43            4.23            4.66
 Year ended 12/31/2005                  30.67         .37            1.45            1.82
 Year ended 12/31/2004                  28.77         .37            2.17            2.54
 Year ended 12/31/2003                  23.46         .31            5.54            5.85
 Period from 5/21/2002 to 12/31/2002    28.23         .23           (4.34)          (4.11)
- -----------------------------------------------------------------------------------------------
CLASS R-3:
 Year ended 12/31/2006                 $31.30        $.59          $ 4.24          $ 4.83
 Year ended 12/31/2005                  30.71         .52            1.45            1.97
 Year ended 12/31/2004                  28.80         .50            2.17            2.67
 Year ended 12/31/2003                  23.47         .41            5.55            5.96
 Period from 6/4/2002 to 12/31/2002     27.58         .27           (3.69)          (3.42)
- -----------------------------------------------------------------------------------------------
CLASS R-4:
 Year ended 12/31/2006                  31.32         .69            4.24            4.93
 Year ended 12/31/2005                  30.72         .62            1.45            2.07
 Year ended 12/31/2004                  28.82         .60            2.16            2.76
 Year ended 12/31/2003                  23.47         .51            5.55            6.06
 Period from 5/28/2002 to 12/31/2002    28.22         .32           (4.33)          (4.01)
- -----------------------------------------------------------------------------------------------
CLASS R-5:
 Year ended 12/31/2006                  31.35         .79            4.24            5.03
 Year ended 12/31/2005                  30.75         .70            1.46            2.16
 Year ended 12/31/2004                  28.84         .67            2.18            2.85
 Year ended 12/31/2003                  23.48         .56            5.59            6.15
 Period from 5/15/2002 to 12/31/2002    28.37         .39           (4.50)          (4.11)






                                       22

The Investment Company of America / Prospectus


<PAGE>


                                            DIVIDENDS AND DISTRIBUTIONS




                                      Dividends   Distributions      Total      Net asset
                                      (from net       (from        dividends     value,
                                      investment     capital          and        end of      Total
                                       income)       gains)      distributions   period    return/3/
- ------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006                   $(.74)       $(2.06)        $(2.80)      $33.51      15.94%
Year ended 12/31/2005                    (.68)         (.81)         (1.49)       31.36       6.87
Year ended 12/31/2004                    (.52)         (.36)          (.88)       30.75       9.78
Year ended 12/31/2003                    (.52)         (.21)          (.73)       28.84      26.30
Year ended 12/31/2002                    (.52)         (.46)          (.98)       23.48     (14.47)
- ------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2006                    (.46)        (2.06)         (2.52)       33.39      14.96
Year ended 12/31/2005                    (.43)         (.81)         (1.24)       31.25       5.93
Year ended 12/31/2004                    (.27)         (.36)          (.63)       30.67       8.84
Year ended 12/31/2003                    (.33)         (.21)          (.54)       28.77      25.18
Period from 6/6/2002 to 12/31/2002       (.30)         (.35)          (.65)       23.46     (11.68)
- ------------------------------------------------------------------------------------------------------
CLASS R-2:
 Year ended 12/31/2006                   (.46)        (2.06)         (2.52)       33.40      14.99
 Year ended 12/31/2005                   (.42)         (.81)         (1.23)       31.26       5.95
 Year ended 12/31/2004                   (.28)         (.36)          (.64)       30.67       8.88
 Year ended 12/31/2003                   (.33)         (.21)          (.54)       28.77      25.18
 Period from 5/21/2002 to 12/31/2002     (.31)         (.35)          (.66)       23.46     (14.64)
- ------------------------------------------------------------------------------------------------------
CLASS R-3:
 Year ended 12/31/2006                  $(.62)       $(2.06)        $(2.68)      $33.45      15.54%
 Year ended 12/31/2005                   (.57)         (.81)         (1.38)       31.30       6.43
 Year ended 12/31/2004                   (.40)         (.36)          (.76)       30.71       9.34
 Year ended 12/31/2003                   (.42)         (.21)          (.63)       28.80      25.70
 Period from 6/4/2002 to 12/31/2002      (.34)         (.35)          (.69)       23.47     (12.49)
- ------------------------------------------------------------------------------------------------------
CLASS R-4:
 Year ended 12/31/2006                   (.71)        (2.06)         (2.77)       33.48      15.90
 Year ended 12/31/2005                   (.66)         (.81)          1.47)       31.32       6.77
 Year ended 12/31/2004                   (.50)         (.36)          (.86)       30.72       9.67
 Year ended 12/31/2003                   (.50)         (.21)          (.71)       28.82      26.19
 Period from 5/28/2002 to 12/31/2002     (.39)         (.35)          (.74)       23.47     (14.31)
- ------------------------------------------------------------------------------------------------------
CLASS R-5:
 Year ended 12/31/2006                   (.81)        (2.06)         (2.87)       33.51      16.22
 Year ended 12/31/2005                   (.75)         (.81)         (1.56)       31.35       7.06
 Year ended 12/31/2004                   (.58)         (.36)          (.94)       30.75      10.02
 Year ended 12/31/2003                   (.58)         (.21)          (.79)       28.84      26.58
 Period from 5/15/2002 to 12/31/2002     (.43)         (.35)          (.78)       23.48     (14.59)


                                                      Ratio of     Ratio of
                                                      expenses     expenses
                                                     to average   to average      Ratio
                                           Net       net assets   net assets     of net
                                         assets,       before        after      income to
                                         end of         reim-        reim-       average
                                         period      bursements/  bursements/      net
                                      (in millions)    waivers    waivers/4/     assets
- ------------------------------------------------------------------------------------------

CLASS A:
Year ended 12/31/2006                    $74,181        .57%         .54%        2.16%
Year ended 12/31/2005                     66,959        .57          .55         2.06
Year ended 12/31/2004                     64,880        .57          .57         2.06
Year ended 12/31/2003                     58,353        .59          .59         2.14
Year ended 12/31/2002                     46,129        .59          .59         1.89
- ------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 12/31/2006                         49       1.42         1.39         1.31
Year ended 12/31/2005                         29       1.42         1.40         1.22
Year ended 12/31/2004                         23       1.47         1.46         1.21
Year ended 12/31/2003                         14       1.51         1.47         1.18
Period from 6/6/2002 to 12/31/2002             1       2.43/5/      1.47/5/      1.49/5/
- ------------------------------------------------------------------------------------------
CLASS R-2:
 Year ended 12/31/2006                       625       1.50         1.39         1.31
 Year ended 12/31/2005                       479       1.57         1.40         1.21
 Year ended 12/31/2004                       361       1.63         1.42         1.27
 Year ended 12/31/2003                       188       1.76         1.43         1.21
 Period from 5/21/2002 to 12/31/2002          24       1.57/5/      1.43/5/      1.61/5/
- ------------------------------------------------------------------------------------------
CLASS R-3:
 Year ended 12/31/2006                   $   909        .94%         .92%        1.78%
 Year ended 12/31/2005                       666        .95          .93         1.68
 Year ended 12/31/2004                       493        .99          .98         1.72
 Year ended 12/31/2003                       231       1.06         1.05         1.60
 Period from 6/4/2002 to 12/31/2002           24       1.11/5/      1.05/5/      2.00/5/
- ------------------------------------------------------------------------------------------
CLASS R-4:
 Year ended 12/31/2006                       323        .65          .62         2.07
 Year ended 12/31/2005                       236        .65          .63         1.99
 Year ended 12/31/2004                       119        .67          .66         2.05
 Year ended 12/31/2003                        40        .68          .68         2.00
 Period from 5/28/2002 to 12/31/2002           9        .73/5/       .69/5/      2.25/5/
- ------------------------------------------------------------------------------------------
CLASS R-5:
 Year ended 12/31/2006                     1,980        .35          .33         2.37
 Year ended 12/31/2005                     1,562        .36          .34         2.28
 Year ended 12/31/2004                     1,408        .36          .35         2.28
 Year ended 12/31/2003                     1,201        .36          .36         2.11
 Period from 5/15/2002 to 12/31/2002          48        .37/5/       .37/5/      2.56/5/





                                          YEAR ENDED DECEMBER 31
                           2006        2005        2004        2003         2002
- ------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
 RATE FOR ALL CLASSES      20%         19%         19%         24%          27%
 OF SHARES




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

/2/  Based on average shares outstanding.
/3/  Total returns exclude all sales charges.

/4/  The ratios in this column reflect 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 for all share classes. In addition, during the
     start-up period for the retirement plan share classes (except Class R-5),
     Capital Research and Management Company agreed to pay a portion of the fees
     related to transfer agent services.

/5/  Annualized.



                                       23

                                 The Investment Company of America / Prospectus

<PAGE>

NOTES


                                       24

The Investment Company of America / Prospectus


<PAGE>

NOTES


                                       25

                                 The Investment Company of America / Prospectus

<PAGE>

NOTES


                                       26

The Investment Company of America / Prospectus


<PAGE>

NOTES


                                       27

                                 The Investment Company of America / 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 DEALER SERVICES                American Funds Distributors
                                    800/421-9900
                                    americanfunds.com
 FOR 24-HOUR INFORMATION            For Class R share information, visit
                                    AmericanFundsRetirement.com


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



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

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

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

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

HOUSEHOLD MAILINGS Each year you are automatically sent an updated prospectus
and annual and semi-annual reports for the fund. You may also occasionally
receive proxy statements for the fund. In order to reduce the volume of mail you
receive, when possible, only one copy of these documents will be sent to
shareholders who are part of the same family and share the same household address.

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 333 South Hope Street, Los
Angeles, California 90071.


[logo - recycle bug]
Printed on recycled paper







RPGEPR-904-0307P Litho in USA CGD/RRD/8036     Investment Company File No. 811-00116
- -------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds        Capital Research and Management        Capital International
        Capital Guardian        Capital Bank and Trust

The Investment Company of America

Part C

Other Information

Item 23. Exhibits for Registration Statement (1940 Act No. 002-10811 and 1933 Act No. 811-00116)

(a)	Certificate of Incorporation - previously filed (see Post-Effective Amendment No. 108 filed 5/17/02)

(b)	By-laws - By-laws as amended 2/22/06

(c)	Instruments Defining Rights of Security Holders - Form of share certificate - previously filed (see P/E Amendment No. 106 filed 3/13/01)

(d)	Investment Advisory Contracts - Amended Investment Advisory and Service Agreement dated 2/16/05 - previously filed (see P/E Amendment No. 111 filed 2/25/05)

(e)

Underwriting Contracts - Form of Amended and Restated Principal Underwriting Agreement and Selling Group Agreements - previously filed (see P/E Amendment No. 107 filed 2/15/02 and P/E Amendment No. 108 filed 5/14/02); Form of Institutional Selling Group Agreement - previously filed (see P/E Amendment No. 111 filed 2/25/05); Form of Amendment to Selling Group Agreement effective 11/1/06; and Form of Amendment to Selling Group Agreement effective 2/1/07

(f)	Bonus or Profit Sharing Contracts - Deferred Compensation Plan amended 1/1/05

(g)	Custodian Agreements - Form of Global Custody Agreement - dated 12/21/06

(h-1)

Other Material Contracts - Form of Amended and Restated Administrative Services Agreement dated 10/1/05 - previously filed (see P/E Amendment No. 112 filed 2/28/06); Amended Shareholder Services Agreement as of 4/1/03 - previously filed (see P/E Amendment No. 110 filed on 2/26/04); and Form of Indemnification Agreement dated 7/1/04 - previously filed (see P/E Amendment No. 111 filed 2/25/05)

(h-2)

Form of Amendment to Shareholder Services Agreement dated 11/1/06

(i)	Legal Opinion - Legal Opinion - previously filed (see P/E Amendment No. 108 filed 5/17/02)

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

(k) Omitted Financial Statements - None

(l) Initial Capital Agreements - None

(m)

Rule 12b-1 - Forms of Plans of Distribution - Class A Plan of Distribution - previously filed (see P/E Amendment No. 101 filed 2/27/97); Class 529-A - previously filed (see P/E Amendment No. 107 filed 2/14/02; Forms of Amended Plans of Distribution for Classes B, C, F, 529-B, 529-C, 529-E, 529-F and R-1, R-2, R-3 and R-4 dated 10/1/05 - previously filed (see P/E Amendment No. 112 filed 2/28/06)

(n) Rule 18f-3 - Form of Amended and Restated Multiple Class Plan - previously filed (see P/E Amendment No. 108 filed 5/17/02)

(o) Reserved

(p)	Code of Ethics - Code of Ethics for The Capital Group Companies dated December 2006; and Code of Ethics for Registrant dated December 2005

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

None

Item 25. Indemnification

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

The following are certain provisions of the Delaware Corporation Law applicable to the Registrant:

Subsection (a) of Section 145 of the Delaware Corporation Law empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

Subsection (b) of Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that a court of equity or the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

Section 145 further provides that to the extent a director or officer of a corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) and (b) or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; that the scope of indemnification extends to directors, officers, employees or agents of a constituent corporation absorbed in a consolidation or merger and persons serving in that capacity at the request of the constituent corporation for another; and empowers the corporation to purchase and maintain insurance on behalf of a director or officer of the corporation against any liability asserted against him or incurred by him in any such capacity or arising out of his status as such whether or not the corporation would have the power to indemnify him against such liabilities under Section 145.

Registrant's Certificate of Incorporation and Section 38 of the Registrant’s By-Laws as well as the indemnification agreements that the Registrant has entered into with each of its directors who is not an “interested person” of the Registrant (as defined under the Investment Company Act of 1940 as amended), provide in effect that the Registrant will indemnify its officers and directors against any liability or expenses actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the Registrant, to the fullest extent permitted by applicable law, subject to certain conditions. In accordance with Section 17(h) and 17(i) of the Investment Company Act of 1940 and their respective terms, these provisions do not protect any person against any liability to the Registrant or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Registrant will comply with the indemnification requirements contained in the Investment Company Act of 1940, as amended, and Release Nos. 7221 (June 9, 1972) and 11330 (September 4, 1980).

Item 26. Business and Other Connections of the Investment Adviser

None

Item 27. Principal Underwriters

(a) American Funds Distributors, Inc. is also the Principal Underwriter of shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds Income Series, American Funds Target Date Retirement Series, Inc., The American Funds Tax-Exempt Series I, The American Funds Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc., Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World Growth and Income Fund, Inc., The Cash Management Trust of America, EuroPacific Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc., Intermediate Bond Fund of America, Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc., Short-Term Bond Fund of America, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Money Fund of America, U.S. Treasury Money Fund of America and Washington Mutual Investors Fund, Inc.

(b)

	(1) Name and Principal Business Address	(2) Positions and Offices with Underwriter	(3) Positions and Offices with Registrant
L	E. Grant Abramson	Vice President	None
	David L. Abzug P.O. Box 2248 Agoura Hills, CA 91376	Vice President	None
	William C. Anderson 7780 Boylston Court Dublin, OH 43016	Regional Vice President	None
	Robert B. Aprison 2983 Bryn Wood Drive Madison, WI 53711	Senior Vice President	None
	T. Patrick Bardsley 36 East Woodward Blvd. Tulsa, OK 74114	Regional Vice President	None
	Shakeel A. Barkat 982 Wayson Way Davidsonville, MD 21035	Vice President	None
	Steven L. Barnes 7490 Clubhouse Road Suite 100 Boulder, CO 80301	Senior Vice President	None
	Thomas M. Bartow 20 Cerchio Alto Henderson, NV 89011	Vice President	None
B	Carl R. Bauer	Vice President	None
	Michelle A. Bergeron 4160 Gateswalk Drive Smyrna, GA 30080	Senior Vice President	None
	J. Walter Best, Jr. 7003 Chadwick Drive, Suite 355 Brentwood, TN 37027	Vice President	None
	John A. Blanchard 576 Somerset Lane Northfield, IL 60093	Senior Vice President	None
	Randall L. Blanchetti 12809 Huntmaster Lane Richmond, VA 23233	Regional Vice President	None
	Ian B. Bodell 7003 Chadwick Drive, Suite 355 Brentwood, TN 37027	Senior Vice President	None
	Jonathan W. Botts 2231 Garden View Lane Weddington, NC 28104	Regional Vice President	None
	Bill Brady 646 Somerset Drive Indianapolis, IN 46260	Regional Vice President	None
	Mick L. Brethower 510 Cimmaron Hills Trail W. Georgetown, TX 78628	Senior Vice President	None
	C. Alan Brown 7424 Somerset Avenue St. Louis, MO 63105	Vice President	None
B	William H. Bryan	Regional Vice President	None
L	Sheryl M. Burford	Assistant Vice President	None
B	J. Peter Burns	Vice President	None
	Steven Calabria 161 Bay Avenue Huntington Bay, NY 11743	Regional Vice President	None
S	Kathleen D. Campbell	Assistant Vice President	None
	Matthew C. Carlisle 100 Oakmont Lane, #409 Belleair, FL 33756	Vice President	None
	Damian F. Carroll 40 Ten Acre Road New Britain, CT 06052	Vice President	None
	James D. Carter 560 Valley Hill Lane Knoxville, TN 37922	Regional Vice President	None
	Brian C. Casey 8002 Greentree Road Bethesda, MD 20817	Senior Vice President	None
	Victor C. Cassato 999 Green Oaks Drive Greenwood Village, CO 80121	Senior Vice President	None
	Christopher J. Cassin 120 E. Ogden Ave., Suite 106 Hinsdale, IL 60521	Senior Vice President	None
L	Denise M. Cassin	Director, Senior Vice President	None
L	David D. Charlton	Director, Senior Vice President	None
	Thomas M. Charon N27 W23960 Paul Road, Suite 204 Pewaukee, WI 53072	Regional Vice President	None
L	Wellington Choi	Vice President	None
	Paul A. Cieslik 90 Northington Drive Avon, CT 06001	Regional Vice President	None
L	Kevin G. Clifford	Director, President and Co-Chief Executive Officer	None
H	Cheri Coleman	Vice President	None
	Ruth M. Collier 106 Central Park South, #10K New York, NY 10019	Senior Vice President	None
S	David Coolbaugh	Vice President	None
	Carlo O. Cordasco 4036 Ambassador Circle Williamsburg, VA 23188	Regional Vice President	None
B	Josie Cortez	Assistant Vice President	None
	Charles H. Cote 305 Edgeworth Lane Sewickley, PA 15143	Regional Vice President	None
	Thomas E. Cournoyer 2333 Granada Blvd. Coral Gables, FL 33134	Vice President	None
L	Michael D. Cravotta	Assistant Vice President	None
	Joseph G. Cronin 1281 Fiore Drive Lake Forest, IL 60045	Vice President	None
	William F. Daugherty 1213 Redwood Hills Circle Carlisle, PA 17015	Vice President	None
	Peter J. Deavan 1805 Snowden Circle Rochester Hills, MI 48308	Regional Vice President	None
	Guy E. Decker 2990 Topaz Lane Carmel, IN 46032	Vice President	None
	Daniel J. Delianedis Edina Executive Plaza 5200 Willson Road, Suite 150 Edina, MN 55424	Senior Vice President	None
L	James W. DeLouise	Assistant Vice President	None
	James A. DePerno, Jr. 1 Nehercrest Lane Orchard Park, NY 14127	Vice President	None
L	Bruce L. DePriester	Director, Senior Vice President, Treasurer and Controller	None
	Lori A. Deuberry 130 Aurora Street Hudson, OH 44236	Regional Vice President	None
L	Dianne M. Dexter	Assistant Vice President	None
	Thomas J. Dickson 108 Wilmington Court Southlake, TX 76092	Vice President	None
	Michael A. DiLella 22 Turner’s Lake Drive Mahwah, NJ 07430	Senior Vice President	None
N	Dean M. Dolan	Vice President	None
L	Hedy B. Donahue	Assistant Vice President	None
L	Michael J. Downer	Director	None
	Craig A. Duglin 4170 Vanetta Drive Studio City, CA 91604	Regional Vice President	None
	Michael J. Dullaghan 5040 Plantation Grove Lane Roanoke, VA 24012	Vice President	None
I	Lloyd G. Edwards	Senior Vice President	None
	Timothy L. Ellis 1700 Lelia Drive, Suite 105 Jackson, MS 39216	Senior Vice President	None
	Kristopher A. Feldmeyer 787 Jackson Road Greenwood, IN 46142	Regional Vice President	None
L	Lorna Fitzgerald	Vice President	None
	William F. Flannery 29 Overlook Road Hopkinton, MA 01748	Regional Vice President	None
	John R. Fodor 15 Latisquama Road Southborough, MA 01772	Senior Vice President	None
L	Charles L. Freadhoff	Vice President	None
	Daniel B. Frick 845 Western Avenue Glen Ellyn, IL 60137	Vice President	None
L	Linda S. Gardner	Vice President	None
	Keith R. George 3835 East Turtle Hatch Road Springfield, MO 65809	Regional Vice President	None
B	Lori A. Giacomini	Assistant Vice President	None
L	J. Christopher Gies	Senior Vice President	None
L	David M. Givner	Secretary	None
B	Evelyn K. Glassford	Vice President	None
	Jack E. Goldin 3424 Belmont Terrace Davie, FL 33328	Regional Vice President	None
L	Earl C. Gottschalk	Vice President	None
	Jeffrey J. Greiner 8250-A Estates Parkway Plain City, OH 43064	Senior Vice President	None
	Eric M. Grey 601 Fisher Road N. Dartmouth, MA 02747	Regional Vice President	None
B	Steven Guida	Senior Vice President	None
B	Mariellen Hamann	Vice President	None
	Derek S. Hansen 13033 Ridgedale Drive, #147 Minnetonka, MN 55305	Vice President	None
	David E. Harper 5400 Russell Cave Road Lexington, KY 40511	Senior Vice President	None
	Calvin L. Harrelson, III 2048 Kings Manor Drive Weddington, NC 28104	Vice President	None
	Robert J. Hartig, Jr. 13563 Marjac Way McCordsville, IN 46055	Vice President	None
L	Linda M. Hines	Vice President	None
	Steven J. Hipsley 44 Tyler Drive Saratoga Springs, NY 12866	Regional Vice President	None
L	Russell K. Holliday	Vice President	None
	Heidi Horwitz 5 Christopher Hill Road Weston, CT 06883	Regional Vice President	None
L	Kevin B. Hughes	Vice President	None
	Ronald R. Hulsey 6202 Llano Dallas, TX 75214	Senior Vice President	None
	Marc Ialeggio 13 Prince Royal Passage Corte Madera, CA 94925	Regional Vice President	None
	Robert S. Irish 1225 Vista Del Mar Drive Delray Beach, FL 33483	Senior Vice President	None
I	David K. Jacocks	Assistant Vice President	None
L	Linda Johnson	Assistant Vice President	None
G1	Joanna F. Jonsson	Director	None
B	Damien M. Jordan	Senior Vice President	None
L	Marc J. Kaplan	Vice President	None
	John P. Keating 1576 Sandy Springs Dr. Orange Park, FL 32003	Senior Vice President	None
	Brian G. Kelly 76 Daybreak Road Southport, CT 06890	Regional Vice President	None
	Andrew J. Kilbride 3080 Tuscany Court Ann Arbor, MI 48103	Regional Vice President	None
N	Dorothy Klock	Vice President	None
	Dianne L. Koske 6 Black Oak Court Poquoson, VA 23662	Assistant Vice President	None
B	Elizabeth K. Koster	Vice President	None
	Christopher F. Lanzafame 19365 Lovall Valley Court Sonoma, CA 95476	Regional Vice President	None
	Patricia D. Lathrop 822 Monterey Blvd., NE St. Petersburg, FL 33704	Regional Vice President	None
	R. Andrew LeBlanc 78 Eton Road Garden City, NY 11530	Vice President	None
	T. Blake Liberty 5506 East Mineral Lane Littleton, CO 80122	Vice President	None
	Mark J. Lien 1103 Tulip Tree Lane West Des Moines, IA 50266	Vice President	None
L	Lorin E. Liesy	Vice President	None
I	Kelle Lindenberg	Assistant Vice President	None
	Louis K. Linquata 5214 Cass Street Omaha, NE 68132	Vice President	None
	Brendan T. Mahoney 1 Union Avenue, Suite One Sudbury, MA 01776	Vice President	None
	Nathan G. Mains 7711 S. Columbine Street Centennial, CO 80122	Regional Vice President	None
	Stephen A. Malbasa 13405 Lake Shore Blvd. Cleveland, OH 44110	Director, Senior Vice President	None
	Steven M. Markel 5241 South Race Street Greenwood Village, CO 80121	Senior Vice President	None
L	Paul R. Mayeda	Assistant Vice President	None
L	Eleanor P. Maynard	Vice President	None
L	Christopher McCarthy	Vice President	None
	James R. McCrary 28812 Crestridge Rancho Palos Verdes, CA 90275	Vice President	None
L	Will McKenna	Vice President	None
S	John V. McLaughlin	Senior Vice President	None
	Terry W. McNabb 2002 Barrett Station Road St. Louis, MO 63131	Senior Vice President	None
L	Katharine McRoskey	Vice President	None
	Scott M. Meade 41 South Road Rye Beach, NH 03871	Vice President	None
	Charles L. Mitsakos 3017 11^th Avenue West Seattle, WA 98119	Regional Vice President	None
	Monty L. Moncrief 55 Chandler Creek Court The Woodlands, TX 77381	Vice President	None
	David H. Morrison 7021 North Stratton Court Peoria, IL 61615	Regional Vice President	None
	Andrew J. Moscardini 832 Coldwater Creek Circle Niceville, FL 32578	Regional Vice President	None
L	Jack Nitowitz	Assistant Vice President	None
	William E. Noe 3600 Knollwood Road Nashville, TN 37215	Senior Vice President	None
L	Heidi J. Novaes	Vice President	None
	Eric P. Olson 27 Main Street, Suite 200 Topsfield, MA 01983	Senior Vice President	None
	Jeffrey A. Olson 2708 88^th St. Court, NW Gig Harbor, WA 98332	Regional Vice President	None
	Thomas A. O’Neil 4 Hillcrest Avenue Eastborough, KS 67208	Regional Vice President	None
	Michael W. Pak 13929 SE 92^nd Street Newcastle, WA 98059	Regional Vice President	None
	W. Burke Patterson, Jr. 1643 Richland Avenue Baton Rouge, LA 70808	Regional Vice President	None
	Gary A. Peace 291 Kaanapali Drive Napa, CA 94558	Vice President	None
	Samuel W. Perry 4340 East Indian School Road Suite 21 Phoenix, AZ 85018	Vice President	None
	Raleigh G. Peters 1439 Byrd Drive Berwyn, PA 19312	Regional Vice President	None
	David K. Petzke 4016 Saint Lucia Street Boulder, CO 80301	Senior Vice President	None
B	John H. Phelan, Jr.	Director	None
	Fredric Phillips 175 Highland Avenue, 4th Floor Needham, MA 02494	Senior Vice President	None
	John Pinto 226 Country Club Drive Lansdale, PA 19446	Regional Vice President	None
	Carl S. Platou 7455 80th Place, S.E. Mercer Island, WA 98040	Senior Vice President	None
	Charles R. Porcher One Glenlake Pkwy., Suite 700 Atlanta, GA 30328	Regional Vice President	None
S	Richard P. Prior	Vice President	None
	Mike Quinn 1035 Vintage Club Drive Duluth, GA 30097	Regional Vice President	None
	John W. Rankin 1725 Centennial Club Drive Conway, AR 72034	Regional Vice President	None
	Jennifer D. Rasner 11940 Baypoint Drive Burnsville, MN 55337	Regional Vice President	None
	James P. Rayburn 3108 Roxbury Road Homewood, AL 35209	Regional Vice President	None
	Mark S. Reischmann 4125 Hermitage Drive Colorado Springs, CO 80906	Regional Vice President	None
	Steven J. Reitman 212 The Lane Hinsdale, IL 60521	Senior Vice President	None
	Jeffrey Robinson 7 Waterville Lane Shrewsbury, MA 01545	Regional Vice President	None
	Suzette M. Rothberg 4508 Shady Beach Circle Independence, MN 55359	Regional Vice President	None
L	James F. Rothenberg	Director	None
	Romolo D. Rottura 233 Glenhaven Court Swedesboro, NJ 08085	Vice President	None
	Douglas F. Rowe 414 Logan Ranch Road Georgetown, TX 78628	Senior Vice President	None
	William M. Ryan 1408 Cortland Drive Manasquan, NJ 08736	Regional Vice President	None
L	Dean B. Rydquist	Director, Senior Vice President, Chief Compliance Officer	None
	Richard A. Sabec, Jr. 6868 Meadow Glen Drive Westerville, OH 43082	Regional Vice President	None
	Richard R. Samson 4604 Glencoe Avenue, #4 Marina del Rey, CA 90292	Senior Vice President	None
	Paul V. Santoro 28 State Street, Suite 1100 Boston, MA 02109	Vice President	None
H	Diane Sawyer	Senior Vice President	None
	Joseph D. Scarpitti 31465 St. Andrews Westlake, OH 44145	Senior Vice President	None
	Shane D. Schofield 201 McIver Street Greenville, SC 29601	Vice President	None
L	David L. Schroeder	Assistant Vice President	None
	Mark A. Seaman 645 Baltimore Annapolis Blvd Suite 220 Severna Park, MD 21146	Vice President	None
S	Sherrie L. Senft	Vice President	None
	James J. Sewell III 415 East Holyoke Place Claremont, CA 91711	Regional Vice President	None
	Arthur M. Sgroi 76 Fields End Drive Glenmont, NY 12077	Regional Vice President	None
L	R. Michael Shanahan	Director	None
L	Michael J. Sheldon	Vice President	None
	Frederic J. Shipp 1352 Sanjo Farms Drive Chesapeake, VA 23320	Regional Vice President	None
	Daniel S. Shore 3734 North Greenview Avenue Chicago, IL 60613	Vice President	None
	Brad Short 1601 Seal Way Seal Beach, CA 90740	Vice President	None
	David W. Short 1000 RIDC Plaza, Suite 212 Pittsburgh, PA 15238	Chairman of the Board and Co-Chief Executive Officer	None
	Nathan W. Simmons 496 Dogwood Trail Quincy, FL 32352	Regional Vice President	None
	William P. Simon, Jr. 237 Lancaster Avenue, Suite 207 Devon, PA 19333	Director, Senior Vice President	None
L	Connie F. Sjursen	Vice President	None
	Jerry L. Slater 2216 38^th Place E. Seattle, WA 98112	Senior Vice President	None
LW	John H. Smet	Director	None
	Rodney G. Smith 15851 Dallas Parkway, Suite 500 Addison, TX 75001-6016	Senior Vice President	None
	J. Eric Snively 2548 Violet Street Glenview, IL 60025	Regional Vice President	None
	Anthony L. Soave 3780 Foxglove Court NE Grand Rapids, MI 49525	Vice President	None
L	Therese L. Soullier	Vice President	None
	Nicholas D. Spadaccini 855 Markley Woods Way Cincinnati, OH 45230	Senior Vice President	None
L	Kristen J. Spazafumo	Vice President	None
	Mark D. Steburg 12508 160^th Avenue Southeast Renton, WA 98059	Regional Vice President	None
	Michael P. Stern 213 Aptos Place Danville, CA 94526	Regional Vice President	None
	Brad Stillwagon 2438 Broadmeade Road Louisville, KY 40205	Vice President	None
	Thomas A. Stout 1004 Ditchley Road Virginia Beach, VA 23451	Vice President	None
	Craig R. Strauser 175 Berwick Lake Oswego, OR 97034	Senior Vice President	None
L	Libby J. Syth	Vice President	None
L	Drew W. Taylor	Assistant Vice President	None
L	Larry I. Thatt	Assistant Vice President	None
	Gary J. Thoma 401 Desnoyer Kaukauna, WI 54130	Vice President	None
	Cynthia M. Thompson 4 Franklin Way Ladera Ranch, CA 92694	Vice President	None
	David Tippets 15 Player Green Place The Woodlands, TX 77382	Regional Vice President	None
L	James P. Toomey	Vice President	None
I	Christopher E. Trede	Vice President	None
	George F. Truesdail 400 Abbotsford Court Charlotte, NC 28270	Senior Vice President	None
	Scott W. Ursin-Smith 103 E. Blithedale Avenue, Suite 1 Mill Valley, CA 94941	Senior Vice President	None
S	Cindy Vaquiax	Assistant Vice President	None
	Srinkanth Vemuri 527 McElheny Road Glenshaw, PA 15116	Regional Vice President	None
	J. David Viale 39 Old Course Drive Newport Beach, CA 92660	Senior Vice President	None
D	Bradley J. Vogt	Director	None
L	A. Jordan Wallens 1501 Maple Avenue, #602 Evanston, IL 60201	Regional Vice President	None
S	Chris L. Wammack	Assistant Vice President	None
	Thomas E. Warren 119 Faubel St. Sarasota, FL 34242	Vice President	None
L	J. Kelly Webb	Senior Vice President	None
	Gregory J. Weimer 143 Redwood Drive Venetia, PA 15367	Director, Senior Vice President	None
SF	Gregory W. Wendt	Director	None
	George J. Wenzel 261 Barden Road Bloomfield Hills, MI 48304	Vice President	None
	Brian E. Whalen 4072 Yellow Ginger Glen Norcross, GA 30092	Regional Vice President	None
	William C. Whittington 11928 Sheldon Road Tampa, FL 33626	Regional Vice President	None
L	N. Dexter Williams, Jr.	Senior Vice President	None
L	Alan J. Wilson	Director	None
	Andrew L. Wilson 11163 Rich Meadow Drive Great Falls, VA 22066	Vice President	None
	Steven C. Wilson 7529 Summit Ridge Road Middleton, WI 53562	Regional Vice President	None
	Timothy J. Wilson 501 Valley Brook Road, Suite 204 McMurray, PA 15317	Senior Vice President	None
B	Laura L. Wimberly	Vice President	None
	Kurt A. Wuestenberg 975 Arboretum Drive Saline, MI 48176	Vice President	None
	William R. Yost 9463 Olympia Drive Eden Prairie, MN 55347	Senior Vice President	None
	Jason P. Young 11141 Whitetail Lane Olathe, KS 66061	Vice President	None
	Jonathan A. Young 2145 Hickory Forrest Chesapeake, VA 23322	Regional Vice President	None
	Scott D. Zambon 2178 Pieper Lane Tustin, CA 92782	Regional Vice President	None

__________

L	Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW	Business Address, 11100 Santa Monica Blvd., 15th Floor, Los Angeles, CA 90025
B	Business Address, 135 South State College Boulevard, Brea, CA 92821
S	Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251
SF	Business Address, One Market, Steuart Tower, Suite 1800, San Francisco, CA 94105-1016
H	Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I	Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
N	Business Address, 630 Fifth Avenue, 36^th Floor, New York, NY10111
D	Business Address, 3000 K Street N.W., Suite 230, Washington, DC 20007-5140
G1	Business Address, 3 Place des Bergues, 1201 Geneva, Switzerland

Item 28. Location of Accounts and Records

Accounts, books and other records required by Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended, are maintained and held in the offices of the Registrant’s investment adviser, Capital Research and Management Company, 333 South Hope Street, Los Angeles, California 90071; 135 South State College Boulevard, Brea, California 92821; and/or 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering shareholder accounts are maintained and kept by its transfer agent, American Funds Service Company, 135 South State College Boulevard, Brea, California 92821; 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240; 10001 North 92^nd Street, Suite 100, Scottsdale, Arizona 85258; 3500 Wiseman Boulevard, San Antonio, Texas 78251; and 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering portfolio transactions are maintained and kept by its custodian, JPMorgan Chase Bank, 270 Park Avenue, New York, New York 10017-2070.

Item 29. Management Services

None

Item 30. Undertakings

n/a

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under Rule 485(b) under the Securities Act of 1933 and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Los Angeles, and State of California, on the 23rd day of February, 2007.

THE INVESTMENT COMPANY OF AMERICA

By: /s/ R. Michael Shanahan

(R. Michael Shanahan, Vice Chairman of the Board)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below on February 23, 2007, by the following persons in the capacities indicated.

	Signature		Title
(1)	Principal Executive Officer:
	/s/ R. Michael Shanahan	Vice Chairman of the Board
	(R. Michael Shanahan)

(2)	Principal Financial Officer and Principal Accounting Officer:
	/s/ Carmelo Spinella	Treasurer
	(Carmelo Spinella)

(3)	Directors:
	Louise H. Bryson*	Director
	Mary Anne Dolan*	Director
	Martin Fenton*	Chairman of the Board (Independent and Non-Executive)
	Leonard R. Fuller*	Director
	Claudio X. Gonzalez Laporte*	Director
	L. Daniel Jorndt*	Director
	/s/ James B. Lovelace	Senior Vice President and Director
	(James B. Lovelace)
	John G. McDonald*	Director
	Bailey Morris-Eck*	Director
	Richard G. Newman*	Director
	/s/ Donald D. O’Neal	Senior Vice President and Director
	(Donald D. O’Neal)
	Olin C. Robison*	Director
	/s/ R. Michael Shanahan	Vice Chairman and Director
	(R. Michael Shanahan)
	*By: /s/ Vincent P. Corti
	(Vincent P. Corti, pursuant to a power of attorney filed herewith)

Counsel represents that this amendment does not contain disclosures that would make the amendment ineligible for effectiveness under the provisions of rule 485(b).

/s/ Donald H. Rolfe

(Donald H. Rolfe)

POWER OF ATTORNEY

I, Louise H. Bryson, the undersigned Board member of the following registered investment company:

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Fund and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Carmelo Spinella

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Fund on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 27th day of July, 2006.

(City, State)

/s/ Louise H. Bryson

Louise H. Bryson, Board member

POWER OF ATTORNEY

I, Mary Anne Dolan, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Karl C. Grauman

Carmelo Spinella

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 10th day of July, 2006.

(City, State)

/s/ Mary Anne Dolan

Mary Anne Dolan, Board member

POWER OF ATTORNEY

I, Martin Fenton, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	The American Funds Income Series - U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-	American Funds Target Date Retirement Series, Inc. (File No. 333-138648, 811-21981)

-	The American Funds Tax-Exempt Series II - The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Karl C. Grauman

Sheryl F. Johnson

Sharon G. Moseley

David A. Pritchett

Susi M. Silverman

Carmelo Spinella

Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Solana Beach, CA, this 10th day of January, 2007.

(City, State)

/s/ Martin Fenton

Martin Fenton, Board member

POWER OF ATTORNEY

I, Leonard R. Fuller, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series - U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-	American Funds Target Date Retirement Series, Inc. (File No. 333-138648, 811-21981)

-	The American Funds Tax-Exempt Series II - The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Sheryl F. Johnson

Sharon G. Moseley

David A. Pritchett

Susi M. Silverman

Carmelo Spinella

Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 10^th day of January, 2007.

(City, State)

/s/ Leonard R. Fuller

Leonard R. Fuller, Board member

POWER OF ATTORNEY

I, Claudio X. Gonzalez Laporte, the undersigned Board member of the following registered investment company:

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Fund and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Carmelo Spinella

EXECUTED at Mexico, D.F., this 3rd day of July, 2006.

(City, State)

/s/ Claudio X. Gonzalez Laporte

Claudio X. Gonzalez Laporte, Board member

POWER OF ATTORNEY

I, L. Daniel Jorndt, the undersigned Board member of the following registered investment company:

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Fund and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Carmelo Spinella

EXECUTED at Deerfield, IL, this 5th day of July, 2006.

(City, State)

/s/ L. Daniel Jorndt

L. Daniel Jorndt, Board member

POWER OF ATTORNEY

I, John G. McDonald, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	EuroPacific Growth Fund (File No. 002-83847, File No. 811-03734)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	New Perspective Fund, Inc. (File No. 002-47749, File No. 811-02333)

-	New World Fund, Inc. (File No. 333-67455, File No. 811-09105)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Jennifer M. Buchheim

R. Marcia Gould

Sheryl F. Johnson

Carmelo Spinella

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Stanford, CA, this 5th day of July, 2006.

(City, State)

/s/ John G. McDonald

John G. McDonald, Board member

POWER OF ATTORNEY

I, Bailey Morris-Eck, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Karl C. Grauman

Carmelo Spinella

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Butler, MD, this 6th day of July, 2006.

(City, State)

/s/ Bailey Morris-Eck

Bailey Morris-Eck, Board member

POWER OF ATTORNEY

I, Richard G. Newman, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series - U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II - The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Sharon G. Moseley

Susi M. Silverman

Carmelo Spinella

Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA this 21^st day of September, 2006.

(City, State)

/s/ Richard G. Newman

Richard G. Newman, Board member

POWER OF ATTORNEY

I, Olin C. Robison, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Karl C. Grauman

Carmelo Spinella

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Shelburne, VT, this 10th day of July, 2006.

(City, State)

/s/ Olin C. Robison

Olin C. Robison, Board member

EX-99.B BYLAWS 2 exhibitb.htm EXHIBIT B Exhibit B

BY-LAWS*

THE INVESTMENT COMPANY OF AMERICA

(as amended February 22, 2006)

OFFICES

1. The principal office shall be in the City of Wilmington, County of New Castle, State of Delaware, and the name of the resident agent in charge thereof shall be The Corporation Trust Company.

2. The corporation may also have other offices in the city of Wilmington, State of Delaware, and also offices at such other places within or without the State of Delaware as the Board of Directors may from time to time appoint or the business of the corporation may require.

SEAL

3. The corporate seal shall have inscribed thereon the name of the corporation and the words ACorporate Seal, Delaware.@ Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

STOCKHOLDERS’ MEETINGS

4. Meetings of stockholders may be held within or without the State of Delaware. Meetings of stockholders shall be held at the principal office of the corporation in the City of Wilmington, County of New Castle, State of Delaware, unless the place of meeting be changed by the determination or approval of (a) the persons requesting that a special meeting be called, pursuant to the right to so request conferred by these By-Laws, or (b) the person calling such special meeting, if no such request is made or if the request made does not state where the meeting is to be held, or (c) a majority of the Board of Directors, in the case of an annual meeting, or (d) the holders of all of the Capital Stock of the corporation outstanding and entitled to vote, regardless of any place of meeting otherwise determined under this By-Law. The time and place of meeting shall be stated in the notice of meeting, if notice be given; otherwise, in the instrument by which notice is waived. The place of any meeting for the election of directors shall not be changed within sixty days next before the day on which the election is to be held. A notice of any such change shall be given to each stockholder twenty days before the election is held, in person or by letter mailed to his last known post office address.

* Gender Designation - Whenever in these By-Laws a gender designation is used, the gender designation is used for convenience only. All references in these By-Laws are intended to be, and will for all purposes be interpreted to be, gender neutral.

5. An annual meeting of stockholders shall be held each year, the exact time and date to be fixed by the Board of Directors, at which they shall elect by plurality vote, a Board of Directors, and transact such other business as may properly be brought before the meeting.

6. The holders of a majority of the stock issued and outstanding, and entitled to vote thereat, present in person, or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by law, by the Certificate of Incorporation or by these By-Laws. If, however, such majority shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person, or by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of voting stock shall be present. At such adjourned meeting at which the requisite amount of voting stock shall be represented, any business may be transacted which might have been transacted at the meeting as originally notified.

7. Each stockholder entitled to vote at a meeting of stockholders may vote in person or may authorize another person to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or his authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, facsimile signature. A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent authorized by the person who will be the holder of such proxy to receive such transmission. Each stockholder shall have one vote for each share of stock having voting power, registered in his name on the books of the corporation, and except where the transfer books of the corporation shall have been closed or a date shall have been fixed as a record date for the determination of its stockholders entitled to vote, no share of stock shall be voted on at any election for directors which shall have been transferred on the books of the corporation within twenty days next preceding such election of directors.

8. At least ten days before every election of directors, a complete list of the stockholders entitled to vote at said election, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder, shall be prepared by the Secretary. Such list shall be open to the examination of any stockholder during ordinary business hours, for a period of at least ten days prior to the election, either at a place within the city, town or village where the election is to be held and which place shall be specified in the notice of the meeting, or, if not so specified, at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of election during the whole time thereof, and subject to the inspection of any stockholder who may be present.

9. Special meetings of the stockholders, for any purpose, or purposes, unless otherwise prescribed by the statute, may be called by the President, and shall be called by the President or Secretary at the request in writing of any three members of the Board of Directors, or at the request in writing of stockholders owning a majority in amount of the entire Capital Stock of the corporation issued and outstanding, and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at all special meetings shall be confined to the purposes stated in the call.

10. Written notice of the annual meeting shall be mailed to each stockholder entitled to vote thereat at such address as appears on the stock ledger of the corporation, at least ten days prior to the meeting.

11. Written notice of each special meeting of stockholders, stating the time and place and object thereof, shall be mailed, postage prepaid, at least ten days before such meeting, to each stockholder entitled to vote thereat at such address as appears on the books of the corporation.

DIRECTORS

12. The property and business of the corporation shall be managed by its Board of Directors except as otherwise provided in the Certificate of Incorporation or By-Laws of the corporation or by law or statute.

13. The number of directors which shall constitute the whole Board shall be not less than three (3) nor more than fifteen (15). Within the limits above specified, the number of directors shall be determined by resolution of the Board of Directors or by the stockholders at the annual meeting. Directors need not be stockholders. Directors shall be elected at any meeting of stockholders except as provided in Section 16 hereof. Each director shall hold office until his successor is elected and qualified.

14. The directors may hold their meetings, maintain offices, keep the books, records, and files of the corporation, and perform any duty or function within or without the State of Delaware and at such places as they may from time to time determine.

15. Any director of the corporation may be suspended or removed at any time by the affirmative vote of the holders of a majority of the stock issued and outstanding and entitled to vote, such vote being cast at any annual or special meeting of stockholders, or by the written order, direction or consent of such holders, with or without a meeting.

16. If the office of any director becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, or if by increase in the size of the Board a vacancy is created, a majority of the remaining or existing directors, though less than a quorum, shall choose a director to fill such vacancy, who shall hold office until the next annual election and until a successor has been duly elected and qualified, unless sooner displaced.

17. In addition to the powers and authorities by these By-Laws expressly conferred upon it, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws required to be exercised or done by the stockholders.

18. Directors Emeritus. The Board of Directors may elect Directors Emeritus, chosen from among persons who have served as directors of the Company, without limit as to number or period of service. The term of office of any Directors Emeritus (which may include one or more Chairmen Emeritus) shall be as determined by the Board of Directors. Directors Emeritus shall be invited, but not required, to attend and to speak at meetings of the Board of Directors and committees thereof, except for meetings or portions of meetings at which the Board determines attendance shall be limited. Directors Emeritus shall be paid such compensation and reimbursed for such expenses as shall be determined from time to time by the Board of Directors and may be provided some or all of the information and documents relating to the Company that is provided to the Board of Directors as may be determined from time to time by the Board and/or the officers of the Company. Directors Emeritus shall not be members of the Board of Directors and shall have none of the rights, obligations or duties of a director including, without limitation, voting rights. Unless otherwise expressly required by the context, the term “director” or “directors” as used in these By-laws does not include Directors Emeritus.

19. The Board of Directors who are not considered “interested persons” of the Corporation under the 1940 Act may hire employees or retain advisers and experts as they deem necessary to help ensure that they are able to deal with matters beyond their expertise and fulfill their role of representing shareholder interests.

COMMITTEES OF DIRECTORS

20. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the corporation. If the Chairman of the Board is an independent director, he shall be an ex officio member of each committee which he is not otherwise a member. An ex officio member of a committee may take part in discussions of that committee’s business, but shall not be considered for the purposes of calculating attendance, determining quorum, voting or authorizing any action by such committee. Any Committee of the Board, to the extent to the extent provided in said resolution or resolutions, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation, and may have power to authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

21. The committees shall keep regular minutes of their proceedings and report the same to the board when required.

COMPENSATION OF DIRECTORS

22. Directors shall receive no compensation for their services except fees in such amount as may from time to time be authorized by the Board of Directors. Directors may be reimbursed for such expenses as they incur in serving as directors and attending meetings of the Board of Directors and of committees. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

MEETINGS OF THE BOARD

23. The first meeting of the Board of Directors shall be held at such place and time, either within or without the State of Delaware, as shall be fixed by the stockholders at a meeting, or at such place and time, either within or without the State of Delaware, as may be fixed by the consent in writing of all the directors. Notice to directors of the place and time of such first meeting shall be required only in case the place and time be fixed by the stockholders.

24. Regular meetings of the board of Directors may be held without notice at such time and place either within or without the State of Delaware as from time to time shall be determined by the Board.

25. Special meetings of the Board of Directors may be called at any time by the Chairman or Vice Chairman of the Board, the President, or any Vice President on four days’ notice to each director, either personally or by mail, telegram, cablegram, or radiogram; special meetings shall be called the President or Secretary in like manner, and on like notice, at the written request of any two directors. Such notices shall be deemed to be given at the time when in normal course of post, telegraph, cable, or radio they would be received. Special meetings shall be held a such place as the requesting officer or directors shall appoint, which shall be stated in the notice of the meeting. No call shall be necessary where notice of the time and place of the meeting is waived in writing by all of the directors.

26. At all meetings of the Board of Directors, three of the directors shall be necessary and sufficient to constitute a quorum for the transaction of business, unless such number shall be less than one-third of the total number of directors, in which event one-third of the total number of directors shall constitute a quorum. The act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these By-Laws. A meeting attended by less than a quorum may adjourn the meeting to a later date which, however, shall not be later than the next regular meeting of the directors.

CHAIRMAN OF THE BOARD

27. The Chairman of the Board, if one be elected by the Board of Directors, shall preside at all meetings of the Board of Directors and of the shareholders at which he is present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board of Directors or as may be required by law. If, the Chairman of the Board is a director who is not an “interested person” of the Corporation as defined in Section 2(a)(19) of the Investment Company Act of 1940 (“independent director”) the Chairman of the Board shall serve as a non-executive Chairman and shall not be considered an officer of the Corporation. The election of an independent director as Chairman of the Board will not reduce the responsibilities of the other Directors. The Chairman of the Board shall hold such title until a successor shall have been duly chosen and qualified, or until the Chairman shall have resigned or shall have been removed. Any vacancy may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting.

OFFICERS

28. The corporation shall have a Vice Chairman of the Board, a President, a Vice President, a Secretary, and a Treasurer, who shall be chosen by the Board of Directors. The Board of Directors may choose an Executive Vice President, one or more Senior Vice Presidents, additional Vice Presidents, and one or more Assistant Secretaries and Assistant Treasurers. Any three offices, other than the offices of President and Vice President, Secretary and Assistant Secretary, Treasurer and Assistant Treasurer, and President and Secretary, may be held by the same person. The Board of Directors may designate the seniority of the respective Vice Presidents, at the time of their election or otherwise, but such seniority need not be indicated in the title conferred on or used by them as Vice Presidents. If any Vice President shall succeed to the office of President, and is then holding office as Secretary, his office as Secretary shall be automatically vacated. The Vice Chairman of the Board shall be member of the Board of Directors.

29. The Board of Directors may appoint, select and employ such other officers as it shall deem necessary.

30. The salaries, remuneration, and other compensation of the officers of the corporation shall be fixed by the Board of Directors.

31. The Vice Chairman of the Board, the President, the Vice Presidents, the Secretary, and the Treasurer of the corporation shall hold office until their successors are chosen and qualify in their stead, or until they resign or are removed. Other officers shall hold offices for such terms as shall be determined by the Board of Directors. The Board of Directors may remove any officer or discharge any agent or employee at any time, without cause provided, however, that removal of the Vice Chairman of the Board, the President, any Vice President, the Secretary, or the Treasurer of the corporation shall require the affirmative vote of a majority of the whole Board of Directors. A vacancy occurring in any office at any time may be filled by the Board.

32. Any officer, agent, or employee of the corporation may be suspended or removed at any time by the affirmative vote of the holders of a majority of the stock issued and outstanding and entitled to vote, such vote being cast at any annual or special meeting of stockholders, or by the written order, direction, or consent of such holders, with or without a meeting.

32A. Either the Vice Chairman of the Board or President shall be the Chief Executive Officer of the corporation.

PRESIDENT

33. The President shall be the Chief Operating Officer of the corporation and shall be ex-officio a member of all standing committees. In the absence of the Chairman of the Board the Vice Chairman or President shall preside at all meetings of the stockholders and directors, and shall have all other powers and duties of the Chairman.

34. The Vice Chairman or President shall execute bonds, mortgages, and other contracts requiring a seal, under the seal of the corporation.

VICE PRESIDENTS

35. The Vice Presidents, in the order of their seniority (which need not be seniority in time but may be designated upon election) shall, in the absence or disability of the Vice Chairman of the Board and the President, perform the duties and exercise the powers of the President, and shall perform such other duties and exercise such other powers as the Board of Directors shall prescribe.

THE SECRETARY AND ASSISTANT SECRETARIES

36. The Secretary shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose, and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, or shall obtain waivers of notice, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. He shall keep in safe custody the seal of the corporation, and when authorized by the Board, affix the same to any instrument requiring it, and when so affixed, it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary. He shall have the general powers usually vested in the office of Secretary of a corporation. The Secretary may delegate any of his duties, powers or authorities to one or more Assistant Secretaries unless such delegation be disapproved by the Board of Directors.

37. The Assistant Secretaries, in order of their rank as determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall prescribe.

THE TREASURER AND ASSISTANT TREASURERS

38. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall have the general powers usually vested in the office of a Treasurer of a corporation. The Treasurer may delegate any of his duties, powers, and authorities to one or more Assistant Treasurers unless such delegation be disapproved by the Board of Directors.

39. The Assistant Treasurers, in the order of their rank as determined by the Board of Directors shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors shall prescribe.

INDEMNIFICATION AND INSURANCE

40. Indemnification. The corporation shall promptly indemnify and hold harmless each of its directors and officers, and may indemnify and hold harmless any of its employees and agents, against any liabilities or expenses (collectively, “Liability”) actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the corporation, to the fullest extent permitted by the Certificate of Incorporation and the laws of the State of Delaware, the Securities Act of 1933, and the Investment Company Act of 1940, as now or hereafter in effect, subject to the provisions of paragraphs (a) and (b) of this paragraph 40. The Board of Directors may take such action as is necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve and amend from time to time these By-laws, resolutions or contracts implementing such provisions or such further indemnification arrangements as may be permitted by law. No amendment of these By-laws shall limit or eliminate the right to indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.

(a) Special Condition. With respect to Liability to the corporation or its stockholders, and subject to applicable state and federal law, a director or officer shall be indemnified and held harmless pursuant to this paragraph 40 against any Liability to the corporation or its stockholders unless such Liability arises by reason of his or her willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office as defined in Section 17(h) of the Investment Company Act of 1940 (“disabling conduct”).

(b) Special Process Condition. With respect to Liability to the corporation or its stockholders, no indemnification shall be made unless a determination has been made by reasonable and fair means that the director or officer has not engaged in disabling conduct. In making such a determination, the Board of Directors shall act in conformity with then applicable law and administrative interpretations, and shall afford a director requesting indemnification who is not an “interested person” of the corporation, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended, a rebuttable presumption that such director did not engage in disabling conduct while acting in his or her capacity as a director.

41. Advancement of Expenses. The corporation shall promptly advance funds to its directors and officers, and may advance funds to its employees and agents, to cover expenses they incur with respect to any proceeding arising out of or in connection with their service to the corporation, to the fullest extent permitted by the Certificate of Incorporation and the laws of the State of Delaware, the Securities Act of 1933, and the Investment Company Act of 1940, as now or hereafter in effect.

(a) Affirmation of Conduct. A request by a director or officer for advancement of funds pursuant to this paragraph 41 shall be accompanied by the director’s or officer’s written affirmation of his or her good faith belief that he or she met the standard of conduct necessary for indemnification, and such other statements, documents or undertakings as may be required under applicable law.

(b) Special Conditions to Advancement. With respect to Liability to the corporation or its stockholders, and subject to applicable state and federal law, a director or officer shall be entitled to advancements of expenses pursuant to this paragraph 41 against any Liability to the corporation or its stockholders if (1) the corporation has obtained assurances required under applicable law, such as by obtaining insurance or receiving collateral provided by the director or officer, that the advance will be repaid if the director or officer is found to have engaged in disabling conduct, or (2) the Board has a reasonable belief that the director or officer has not engaged in disabling conduct and ultimately will be entitled to indemnification. In forming such a reasonable belief, the Board of Directors shall act in conformity with then applicable law and administrative interpretations, and shall afford a director requesting an advance who is not an “interested person” of the corporation, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended, a rebuttable presumption that such director did not engage in disabling conduct while acting in his or her capacity as a director.

42. Insurance. The corporation shall purchase and maintain in effect one or more policies of insurance on behalf of its directors and officers in such amounts and with such coverage as shall be determined from time to time by the board of directors, and may purchase and maintain such insurance for any of its employees and agents, issued by a reputable insurer or insurers, against any expenses actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the corporation, with customary limitations and exceptions, whether or not the corporation would have the power to indemnify such person against such expenses pursuant to this section, Indemnification and Insurance.

43. General Provisions.

(a) Non-Exclusive Rights. The provisions for indemnification of, and advancement of expenses to, directors and officers of the corporation set forth in this section, Indemnification and Insurance, shall not be deemed exclusive of any other contractual or legal rights to which a director or officer may otherwise be entitled.

(b) Continuation of Provisions. The provisions of this section, Indemnification and Insurance, shall continue as to a person who has ceased to provide service to the corporation and shall inure to the benefit of his or her spouses, heirs, assigns, devisees, executors, administrators and legal representatives. No amendment of the Certificate of Incorporation or By-Laws of the corporation shall limit or eliminate the right of a person to indemnification, advancement of expenses and insurance set forth in this section, Indemnification and Insurance, with respect to his or her acts, omissions or service to the corporation occurring prior to such amendment.

44. Definitions. For purposes of this section, Indemnification and Insurance, the following terms shall have the following meanings:

(1) “Disabling conduct” shall be as defined in paragraph 40(a).

(2) “Expenses” shall include without limitation all judgments, penalties, fines, amounts paid or to be paid in settlement, ERISA excise taxes, liabilities, losses, interest, expenses of investigation, attorneys’ fees, retainers, court costs, transcript costs, fees of experts and witnesses, expenses of preparing for and attending depositions and other proceedings, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other costs, disbursements or expenses of the type customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or acting as a witness in a proceeding.

(3) “Liability” shall be as defined in paragraph 40.

(4) The term “proceeding” shall include without limitation any threatened, pending or completed claim, demand, threat, discovery request, request for testimony or information, action, suit, arbitration, alternative dispute mechanism, investigation, hearing, or other proceeding, including any appeal from any of the foregoing, whether civil, criminal, administrative or investigative.

(5) A person’s “service to the corporation” shall include without limitation his or her service as a director, officer, employee, agent or representative of the corporation, and his or her service at the request of the corporation as a director, officer, employee, agent or representative of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

BONDS

45. The Board of Directors may require any officer, agent or employee to give bond for the faithful discharge of his duty and for the protection of the corporation in such sum and with such surety or sureties as the Board may deem adviseable.

45A. (a) The corporation shall indemnify its directors and officers, and may indemnify its employees and agents, against any liability or cost arising out of their service to the corporation, to the fullest extent permitted by the law of the State of Delaware, except as set forth in paragraph (b) and except as conditioned by paragraph (c).

(b) The corporation may not indemnify any of its directors or officers against any liability to the corporation or to its stockholders to which he or she is subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office as described in Section 17(h) of the Investment Company Act of 1940 ("disabling conduct").

(c) Indemnification by the corporation of any director or officer against any liability to the corporation or to its stockholders is conditioned on either:

(1) a final decision on the merits by a court or other body before which a proceeding relating to the liability of that director or officer is brought finding that he or she is not liable by reason of disabling conduct; or

(2) in the absence of such a decision, a determination, based upon a review of the facts, that the director or officer is not liable by reason of disabling conduct, by either:

a. the vote of a majority of a quorum of directors, who are neither Ainterested persons@ of the corporation as defined in Section 2(a)(19) of the Investment Company Act of 1940 nor parties to the proceeding; or

b. independent legal counsel in a written opinion; or

(3) the dismissal of either a court or an administrative proceeding against the director or officer for insufficiency of evidence of any disabling conduct with which he or she has been charged.

(d) Under the conditions set forth in paragraph (e), the corporation shall advance funds to its officers and directors, and may advance funds to its employees and agents, to cover expenses, including attorneys' fees, they incur in defending any civil, criminal, administrative or investigative action, suit or proceeding, arising out of their service as directors or officers, to the fullest extent permitted by Delaware law.

(e) The corporation shall advance funds to cover expenses, including attorneys= fees, incurred by any director or officer in connection with the defense of any proceeding described in paragraph (d) only if an undertaking is provided by or on behalf of the director or officer to repay the advance unless it is ultimately determined using the procedure described in clause (c) (1) or (c) (2) or (c) (3) that he or she is entitled to indemnification. It shall be a condition to any such advance that either:

(1) the director or officer shall provide security for his or her undertaking; or

(2) the corporation shall be insured against losses arising by reason of any unlawful advance; or

(3) either (aa) a majority of a quorum of the directors, who are neither Ainterested persons@ of the corporation as defined in Section 2(a) (19) of the Investment Company Act of 1940 nor parties to the proceeding, or (bb) independent legal counsel in a written opinion, shall determine, based on a review of readily available facts, that there is reason to believe that the director or officer will be found entitled to indemnification.

(f) Provisions in this Section for indemnification of, and advancement of expenses to, officers, directors, employees and agents shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators.

CERTIFICATES OF STOCK

46. The certificates of stock of the corporation shall be numbered and shall be entered in the books of the corporation as they are issued. They shall exhibit the holder=s name and number of shares and shall be signed by the President or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. Where the stock certificate is signed by a transfer agent or an assistant transfer agent, or by a transfer clerk acting on behalf of the corporation and a registrar, the signature of any such President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be a facsimile.

TRANSFERS OF STOCK

47. Transfer of shares of the Capital Stock of the corporation shall be made on the books of the corporation upon surrender of the certificates therefor, properly endorsed or accompanied by evidence of succession, assignment, or authority to transfer satisfactory to the corporation or its transfer agent. Upon transfer it shall be the duty of the corporation to issue a new certificate to the person entitled thereto.

TRANSFER AGENTS AND REGISTRARS

48. The Board of Directors may appoint and employ such transfer agent or agents and/or such registrar or registrars as it may deem advisable to assist the corporation in connection with the transfer and/or issue of shares of its Capital Stock, rights, options, and privileges to purchase shares of its Capital Stock, bonds, debentures, certificates of indebtedness, and other obligations issued or assumed by it, and other securities. The Board may require that any certificate, warrant, bond, debenture or similar instrument bear the signature or signatures of a transfer agent and/or registrar.

48A. All securities, moneys and funds of the corporation shall be entrusted for safekeeping to a properly qualified bank or trust company. With the exception of funds currently required for business operations and other corporate expenses, and which shall not exceed a maximum of three percent (3%) of the assets of the corporation, the custodian of moneys and securities shall be a properly qualified bank or trust company with an aggregate capital, surplus, and undivided profits of not less than three million dollars. Any provisions of By-Law 58 notwithstanding, this By-Law 47A shall not be amended save by the affirmative vote of the holders of a majority of the shares of the Capital Stock of the corporation outstanding and entitled to vote at any regular or special meeting of stockholders.

DETERMINATION OF STOCKHOLDERS OF RECORD

49. The Board of Directors shall have the power to fix in advance a date, not more than sixty nor less than ten days preceding the date of any meeting of stockholders, nor more than sixty days preceding the date for the payment of any dividend or other distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of Capital Stock shall go into effect, or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting, and any adjournment thereof, or entitled to receive payment of any such dividend or other distribution, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of Capital Stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend or other distribution, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid.

REGISTERED STOCKHOLDERS

50. The corporation shall be entitled to treat the person in whose name any share of the Capital Stock of the corporation is registered as the owner thereof for purposes of dividends and other distributions in the course of business or in the course of recapitalization, consolidation, merger, reorganization, liquidation, sale of the property and assets of the corporation, or otherwise, and for the purpose of votes, approvals and consents by stockholders, and for the purpose of notices to stockholders, and for all other purposes whatever, and shall be entitled to treat the person in whose name any right, option or privilege to purchase shares of the Capital Stock of the corporation is registered as the owner thereof for all purposes whatever; the corporation shall not be bound to recognize any equitable or other claim to or interest in such share or such right, option or privilege to purchase a share, on the part of any other person, whether or not the corporation shall have notice thereof, save as expressly required by statute.

LOST CERTIFICATES

51. Upon presentation to the corporation of a proper affidavit attesting the loss, destruction, or mutilation of any certificate for a share or shares of the Capital Stock of the corporation, or any certificate or warrant evidencing any right, option, or privilege to purchase a share or shares of the Capital Stock of the corporation, the Board of Directors may direct the issuance of a new certificate or warrant in lieu of and to replace the certificate or warrant so alleged to be lost, destroyed, or mutilated. Except as otherwise specifically required by statute the Board of Directors may require as a condition precedent to the issuance of a new certificate or warrant, any or all of the following, to wit: (a) presentation of such additional evidence or proof of the loss, destruction, or mutilation claimed as the Board may deem advisable; (b) advertisement of loss in such manner as the Board of Directors may direct or approve; (c) a bond or agreement of indemnity in such form and amount, and with such sureties or without sureties as the Board of Directors may direct or approve; (d) the order or approval of a court or judge.

CHECKS AND OTHER INSTRUMENTS

52. All checks, drafts, or demands or orders for the payment of money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

53. The Board of Directors of the corporation may in any instance designate the officers and agents who shall have authority to execute any contract, conveyance, or other instrument on behalf of the corporation, or may ratify or confirm any execution. When the execution of any instrument has been authorized without specification of the executing officers or agents, the President or any Vice President, and the Secretary or Assistant Secretary or Treasurer or Assistant Treasurer may execute the same in the name and on behalf of this corporation and may affix the corporate seal thereto.

FISCAL YEAR

54. The fiscal year shall begin on the 1st day of January and end on the 31st day of December in each year.

BOOKS AND RECORDS

55. The proper officers and agents of the corporation shall keep and maintain such books, records, and accounts of the corporation=s business and affairs and such stock ledgers and lists of stockholders as the Board of Directors shall deem advisable and as shall be required by the laws of the State of Delaware and/or other states or jurisdictions empowered to impose such requirements.

STATEMENTS TO STOCKHOLDERS

56. The directors and officers of the corporation shall prepare and exhibit or make available or cause to be prepared and exhibited or made available to stockholders such statements of operations and properties of the corporation as they shall deem advisable and as shall be required by the laws of the State of Delaware, and/or other states or jurisdictions empowered to impose such requirements.

NOTICE AND WAIVERS OF NOTICE

57. Notices required to be given to any director, officer, or stockholder may be given in person or by written notice mailed or sent by telegraph, radiogram, or cablegram to such director, officer, or stockholder at his last address as it appears on the books of the corporation, and in default of such address to such director, officer, or stockholder at the general post office in the City of Wilmington, State of Delaware, and, except as otherwise in the Certificate of Incorporation or By-Laws of the corporation or by statute provided such notice shall be deemed to be given at the time when the same shall be mailed or sent.

58. Whenever any notice whatever is required to be given under the provisions of the Certificate of Incorporation or By-Laws of the corporation, or by any law or statute, said notice may be waived, and the waiver thereof in writing, signed by the person or persons entitled to receive said notice, whether before or after the meeting or other time stated in said notice or to which such notice is directed, shall be deemed equivalent thereto. Waivers given by telegram, radiogram, or cablegram shall be deemed waivers in writing within the meaning of this By-Law.

AMENDMENTS

59. The By-Laws may be altered or repealed, and new By-Laws may be made to replace or add to the By-Laws or any of them by the affirmative vote of the holders of the majority of the shares of the Capital Stock of the corporation outstanding and entitled to vote, at any regular or special meeting of stockholders, or by the affirmative vote of a majority of the whole Board of Directors. Notice of proposed alterations, repeals, replacements, or additions shall be contained in the notice of any such meeting, but may be waived in the same manner that notice may be waived. No change of the time or place for the election of directors shall be made within sixty days next before the day on which the election is to be held. The power hereby conferred upon the directors to alter, repeal, replace, and add By-Laws is subject and subordinate to the power hereby and by the Certificate of Incorporation conferred upon the stockholders having general voting power to review, modify, and rescind any such action by the affirmative vote or written order, direction, or consent of the holders of a majority of outstanding shares of stock having general voting power of the corporation.

EX-99.E UNDR CONTR 3 exhibite.htm EXHIBIT E Exhibit E

[logo - American Funds ®]

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, California 90071

Telephone 800/421-9900, ext. 4

January 2007

To Our Dealer Friends,

As you may know, American Funds recently announced plans to introduce a series of target date funds of funds designed for investment by employer-sponsored retirement plans and individual retirement accounts. Shares of the American Funds Target Date Retirement Series will be available for sale to the public beginning February 1, 2007. The series will initially consist of nine funds corresponding to approximate retirement dates between 2010 and 2050, in five-year increments.

Each of the new funds in the American Funds Target Date Retirement Series will invest in a combination of mutual funds offered by the American Funds. The mix of investments for each fund in the series will change over time. For example, as each fund approaches and passes its retirement goal, it will emphasize more conservative investment objectives, such as capital preservation and current income. The purpose of this notice is to amend your selling group agreement (the “Agreement”) with American Funds Distributors to reflect the addition of the American Funds Target Date Retirement Series. This notice also authorizes you to offer any funds that may be added to the series in the future.

In consideration of the foregoing, the Agreement is amended as follows effective February 1, 2007:

1. The existing Schedule A to the Agreement is replaced in its entirety by the new Schedule A attached hereto.

* * * * *

The Agreement remains unchanged in all other respects. Any order for Fund shares received by us beginning February 1, 2007 shall be deemed an acceptance of this amendment to your Agreement.

Very truly yours,

Kevin G. Clifford

Schedule A

February 1, 2007

(supersedes all previous versions of Schedule A - last version dated November 1, 2006)

529-A

529-B

529-C

529-E

R-1

R-2

R-3

R-4

R-5

Category 1

AMCAP Fund

American Balanced Fund

American Funds Target Date Retirement Series

American Mutual Fund

Capital Income Builder

Capital World Growth and Income Fund

EuroPacific Growth Fund

Fundamental Investors

The Growth Fund of America

The Income Fund of America

The Investment Company of America

The New Economy Fund

New Perspective Fund

New World Fund

SMALLCAP World Fund

Washington Mutual Investors Fund

Category 2

American High-Income Trust

American High-Income Municipal Bond Fund

The Bond Fund of America

Capital World Bond Fund

The Tax-Exempt Bond Fund of America

The Tax-Exempt Fund of California

The Tax-Exempt Fund of Maryland

The Tax-Exempt Fund of Virginia

U.S. Government Securities Fund

Category 3

Intermediate Bond Fund of America

Limited Term Tax-Exempt Bond Fund of America

Short-Term Bond Fund of America

Category 4

The Cash Management Trust of America

The Tax-Exempt Money Fund of America

The U.S. Treasury Money Fund of America

Notes and symbols

Class F and Class 529-F shares are available pursuant to a separate agreement.

l Share class is available

e Share class is available for exchanges only

na Share class is not available

[logo - American Funds ®]

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, California 90071

Telephone 800/421-9900, ext. 4

October 2006

To Our Dealer Friends,

As you may know, shares of our newest fund in the American Funds family, Short-Term Bond Fund of America, will be available for sale to the public beginning November 1, 2006. Short-Term Bond Fund of America is designed to provide current income and capital preservation by investing in high-quality short-term bonds. The purpose of this notice is to amend your selling group agreement (the “Agreement”) with American Funds Distributors to reflect this new fund as well as certain other changes.

As compared to other American Funds bond funds, Short-Term Bond Fund of America will have a new concession schedule for Class A (including 529-A) shares that provides a maximum dealer concession of 2.00% on investments. Beginning Nov. 1, 2006, this new Class A concession schedule will also apply to Intermediate Bond Fund of America and Limited Term Tax-Exempt Bond Fund of America. However, please note that for these three funds, ongoing service fees for Class A shares and compensation on all other share classes will remain unchanged. Also beginning Nov. 1, 2006, Class B, C, 529-B and 529-C shares of all three funds will be available through exchanges only.

As a result of the new Class A concession schedule discussed above, we are creating a new category of compensation for purposes of the Agreement. Funds currently assigned to Category 3 in the Agreement, including all current references to “Category 3,” will now be relabeled as “Category 4.” Short-Term Bond Fund of America, Intermediate Bond Fund of America and Limited Term Tax-Exempt Bond Fund of America will now comprise new Category 3. These changes are detailed in the Agreement amendment set forth below.

In consideration of the foregoing, the Agreement is amended as follows effective November 1, 2006:

1.	Each instance of “Category 3” in the body of the Agreement is replaced by “Category 4.”

2.	The existing Schedule A to the Agreement is replaced in its entirety by the new Schedule A attached hereto.

3.	A concession schedule for the new Category 3 Funds is added to the Agreement as follows:

On sales of Class A shares and Class 529-A shares of Funds listed in Category 3 on the attached Schedule A that are accepted by us and for which you are responsible, you will be paid dealer concessions as follows:

	Concession as	Sales Charge
	Percentage of	as Percentage
Purchases	Offering Price	of Offering Price
Less than $500,000	2.00%	2.50%
$500,000 but less than $750,000	1.60%	2.00%
$750,000 but less than $1 million	1.20%	1.50%
$1 million or more	See Agreement	None

4.	Ongoing service fees for Class A and Class 529-A shares and compensation on all other share classes as currently stated in the Agreement for Category 2 Funds, shall also apply to the new Category 3 Funds.

* * * * *

The Agreement remains unchanged in all other respects. Any order for Fund shares received by us beginning November 1, 2006 shall be deemed an acceptance of this amendment to your Agreement.

Very truly yours,

Kevin G. Clifford

Schedule A

November 1, 2006

(supersedes all previous versions of Schedule A - last version dated May 15, 2002)

529-A

529-B

529-C

529-E

R-1

R-2

R-3

R-4

R-5

Category 1

AMCAP Fund

American Balanced Fund

American Mutual Fund

Capital Income Builder

Capital World Growth and Income Fund

EuroPacific Growth Fund

Fundamental Investors

The Growth Fund of America

The Income Fund of America

The Investment Company of America

The New Economy Fund

New Perspective Fund

New World Fund

SMALLCAP World Fund

Washington Mutual Investors Fund

Category 2

American High-Income Trust

American High-Income Municipal Bond Fund

The Bond Fund of America

Capital World Bond Fund

The Tax-Exempt Bond Fund of America

The Tax-Exempt Fund of California

The Tax-Exempt Fund of Maryland

The Tax-Exempt Fund of Virginia

U.S. Government Securities Fund

Category 3

Intermediate Bond Fund of America

Limited Term Tax-Exempt Bond Fund of America

Short-Term Bond Fund of America

Category 4

The Cash Management Trust of America

The Tax-Exempt Money Fund of America

The U.S. Treasury Money Fund of America

Notes and symbols

Class F and Class 529-F shares are available pursuant to a separate agreement.

	l	Share class is available
	e	Share class is available for exchanges only
	na	Share class is not available

EX-99.F BONUS PROFIT 4 exhibitf.htm EXHIBIT F Exhibit F

“Form of”

[logo - American Funds®]

DEFERRED COMPENSATION PLAN

(Amended, effective as of January 1, 2005)

TABLE OF CONTENTS

Paragraph Title		Page Number
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 or Termination	4

4.	Election to Defer Payments	4
	4.1. Election to Defer	4
	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	5

6.	Deferred Payment Account	5
	6.1. Crediting Amounts	5
	6.2. Change of Investment Designation	6
	6.3. Exchange Requests	6
	6.4. Plan Participants Serving on Money Market Fund Boards	6

7.	Timing and Manner of Payments	6
	7.1. Timing of Payments	6
	7.2. Manner of Payment - Lump Sum	6
	7.3. Alternative Payment Methods	7
	7.4. Death of Plan Participant	7
	7.5. Disability of Plan Participant	7
	7.6. Unforeseeable Emergency	7
	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	8

8.	Miscellaneous	8

Signature Pages
Exhibits A through D

1.	DEFINITIONS

1.1. Administrator. An individual designated by CRMC to process forms and receive Plan related communications from Plan Participants and otherwise assist the Committee in the administration of the Plan.

1.2. Beneficiary(ies). The person or persons last designated in writing by a Plan Participant in accordance with procedures established by the Committee to receive the amounts payable under the Plan in the event of the Plan Participant’s death. A Plan Participant may designate a Primary Beneficiary(ies) to receive amounts payable under the Plan upon the Plan Participant’s death. A Plan Participant may also name a Contingent Beneficiary(ies) to receive amounts payable under the Plan upon the Participant’s death if there is no surviving Primary Beneficiary(ies).

1.3. Board(s). The Board of Directors of a Fund(s).

1.4. Committee. A group of Independent Board Members responsible for oversight and operation of the Plan. The Committee must consist of a minimum of three members, each currently serving as an Independent Board Member of at least one Fund. Each Fund, by the affirmative vote of at least a majority of its Board (including a majority of the Fund’s Independent Board Members) shall appoint the initial members of the Committee. Thereafter, the Committee shall determine its membership by majority vote.

1.5. CRMC. Capital Research and Management Company.

1.6. Date of Crediting.

(i)	With respect to a retainer deferred by a Plan Participant, the Date of Crediting is the first day of the period to which the retainer relates.

(ii)	With respect to a meeting fee deferred by a Plan Participant, the Date of Crediting is the date of the meeting.

(iii)

If any Date of Crediting falls on a Saturday, Sunday or federal holiday, the Date of Crediting will be the first business day following such Saturday, Sunday or federal holiday.

1.7. Deferred Payment Account(s). An account established in the name of the Plan Participant on the books of each Fund serviced by the Plan Participant. Such account shall reflect the number of Phantom Shares credited to the Plan Participant under the Plan. A Deferred Payment Account will be divided into two separate Deferred Payment Accounts. One account will contain deferrals made prior to January 1, 2005, including any earnings thereon (“pre-2005 deferrals”). The other account will contain deferrals made on or after January 1, 2005, including any earnings thereon (“post-2004 deferrals”).

1.8. Disabled or Disability. A Plan Participant is disabled when he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or

mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

1.9. Exhibit A (“List of Participating Funds”). List of mutual funds managed by CRMC that have adopted the Plan.

1.10. Exhibit B (“Deferral Election Form”). A form indicating the compensation to be deferred under the Plan and the timing and manner of distribution. This form must be filed with the Administrator prior to the first day of the calendar year to which it first applies. Notwithstanding the foregoing, any person who is first elected or appointed an Independent Board Member of the Fund may file this form before or within 30 days after first becoming an Independent Board Member.

1.11. Exhibit C (“Beneficiary Designation Form”). A form indicating the beneficiary designations of a Plan Participant.

1.12. Exhibit D (“Rate of Return Election Form”). A form indicating the percentages of deferrals allocated to each Fund.

1.13. Fixed Dollar Installment Method. One of the two alternative methods to a lump-sum available for payments under the Plan other than for reasons of death, Disability or Unforeseeable Emergency. The amount of each installment shall equal the fixed dollar amount previously selected by the Plan Participant on Exhibit B. A Plan Participant’s Deferred Payment Account subject to the Fixed Dollar Installment method shall be adjusted by the amount of each such installment payment by reducing the number of Phantom Shares of each Fund credited to the Deferred Payment Account using the net asset values per Class A share as of the last day of the calendar quarter immediately preceding the date of payment. These reductions shall occur proportionately so that, with respect to each such Fund, the ratio of the value of all Phantom Shares of the Fund to the value of the Deferred Payment Account shall remain the same before and after each installment payment.

1.14. Fund(s). A mutual fund advised by CRMC, collectively the “Funds.”

1.15. Independent Board Member(s). Directors or trustees, and as applicable, advisory board members and director or trustee emeriti who are not considered “interested persons” of any mutual fund managed by CRMC under the Investment Company Act of 1940 and listed in Exhibit A.

1.16 Money Market Fund. The Cash Management Trust of America (CMTA), The U.S. Treasury Money Fund of America (CTRS) or The Tax-Exempt Money Fund of America, Inc. (CTEX).

1.17. Permissible Payment Event. A Permissible Payment Event is any one of the following:

(i)	The date specified in Exhibit B by the Plan Participant that is objectively determinable at the time compensation is deferred under the Plan and is at least twenty-four months past the date of the first deferral election made by the Plan Participant; or

(ii)	The date on which the Plan Participant is no longer an Independent Board Member of any Fund; or

(iii)

The date the Plan Participant dies; or

(iv)	The date the Administrator receives notification that the Plan Participant is Disabled; or

(v)	The date the Committee determines that the Plan Participant has an Unforeseeable Emergency; or

(vi)	For pre-2005 deferrals only, a distribution event permissible under the terms of the Plan in effect on January 1, 2004.

1.18. Phantom Shares. Fictional shares of the Fund(s) that a Plan Participant has selected in Exhibit D that have been credited to his or her Deferred Payment Account(s). Phantom Shares shall have the same economic characteristics as actual Class A shares in terms of mirroring changes in net asset value and reflecting corporate actions (including, without limitation, receipt of dividends and capital gains distributions). However, because Phantom Shares are fictional, they shall not entitle any Plan Participant to vote on matters of any sort, including those affecting the Funds.

1.19. Plan or Deferred Compensation Plan. The deferred compensation plan adopted by the Funds listed in Exhibit A.

1.20. Plan Participant(s). An Independent Board Member who has elected to defer compensation under the Plan, or is receiving payments under the Plan in respect of prior service as an Independent Board Member.

1.21. Unforeseeable Emergency. The following events may constitute an Unforeseeable Emergency under the Plan: (i) severe financial hardship of the Plan Participant or his or her Beneficiary(ies) resulting from illness or accident of the Plan Participant or Beneficiary(ies) and such spouses or dependents of the Plan Participant or Beneficiary(ies); (ii) loss of the Plan Participant’s or Beneficiary(ies)’ property due to casualty or (iii) similar extraordinary unforeseeable circumstances beyond the control of the Plan Participant or the Beneficiary(ies). The Committee, in its sole discretion, will determine if the Plan Participant has an Unforeseeable Emergency, after taking into account the extent to which such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Plan Participant's assets (to the extent the liquidation of such assets would not itself cause an Unforeseeable Emergency).

1.22. Variable Dollar Installment Method. One of the two alternative methods to a lump-sum available for payments under the Plan other than for reasons of death, Disability or Unforeseeable Emergency. The amount of each installment shall be determined for a Deferred Payment Account by multiplying the number of Phantom Shares of a Fund(s) allocated to the Deferred Payment Account by a fraction, the numerator of which shall be one and the denominator of which shall be the then remaining number of unpaid installments (including the installment then to be paid), and multiplying the resulting number of Phantom Shares by the net asset value per Class A share of such Fund(s) as of the last day of the calendar quarter immediately preceding the date of payment. A Plan Participant’s Deferred Payment Account subject to the Variable Dollar Installment method shall be adjusted by the amount of each such installment payment by reducing the number of Phantom Shares of each Fund credited to the Deferred Payment Account. These reductions shall occur proportionately so that, with respect to each such Fund, the ratio of the value of all Phantom Shares of the Fund to the value of the Deferred Payment Account shall remain the same before and after each installment payment. For this purpose, net asset values per Class A share as of the last day of the calendar quarter immediately preceding the date of payment shall be used in calculating pre- and post-payment values.

2.	INTRODUCTION

With effect on January 1, 2005, each mutual fund managed by CRMC and listed in Exhibit A has adopted, by the affirmative vote of at least a majority of its Board (including a majority of its Board members who are not interested persons of the mutual fund), this Plan for Independent Board Members.

3.	PLAN OVERSIGHT; INTERPRETATION AND AMENDMENT

3.1. Plan Oversight and Operation. The Committee shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes. The Committee may utilize the services of the Administrator to conduct routine Plan administration.

3.2. Plan Interpretation and Administration. The Committee shall have full discretion to construe and interpret the terms and provisions of the Plan, which interpretation or construction shall be final and binding on all parties, including, but not limited to, the Funds and any Plan Participant or Beneficiary. The Committee shall administer such terms and provisions in a uniform and non-discriminatory manner and in full accordance with any and all laws and regulations applicable to the Plan.

3.3. Plan Amendment or Termination. The Committee may recommend to the Boards any amendment to or termination of the Plan; provided, however, that no such amendment or termination shall adversely affect the right of Plan Participants to receive amounts previously credited to their Deferred Payment Accounts.

4.	ELECTION TO DEFER PAYMENTS

4.1. Election to Defer. Pursuant to the Plan, Independent Board Members may elect to have all or any portion of payment of their retainer and/or meeting fees, including board and committee meeting fees, deferred as provided herein. An Independent Board Member who elects to participate in the Plan shall file copies of Exhibits B, C and D with the Administrator. An Independent Board Member will not be treated as a Plan Participant and no amount will be deferred under the Plan until Exhibits B, C and D are received by the Administrator and determined by the Administrator to be complete and in good order.

4.2. Current Independent Board Members. A deferral election made by a Plan Participant who timely files Exhibits B, C and D with the Administrator shall become effective and apply with respect to retainers and meeting fees earned during the calendar year following the filing of the deferral election, and each subsequent calendar year, unless modified or revoked in accordance with the terms of this Plan. During the period from such filing and prior to the effectiveness of such election, the most recently filed and effective Exhibit B shall apply to all amounts payable to the Plan Participant under the Plan.

4.2.a. Newly Elected or Appointed Independent Board Members. Any person who is first elected or appointed an Independent Board Member of the Fund during a calendar year and who timely files Exhibits B, C and D with the Administrator may elect to defer any unpaid portion of (i) the retainer applicable to such calendar year and (ii) the fees for future meetings during such calendar year. Unless revoked or modified in accordance with the terms of this Plan, a deferral election made pursuant to this paragraph will apply for each subsequent calendar year after the year of the deferral election.

4.3. Modification or Revocation of an Election to Defer. A Plan Participant may modify or revoke an election to defer, as to future compensation, effective on the first day of the next calendar year, which modification or revocation shall remain in effect for each subsequent calendar year (until modified or revoked in accordance with the Plan), by filing a new Exhibit B with the Administrator prior to the beginning of such next calendar year.

5.	BENEFICIARY DESIGNATION

Each Plan Participant shall designate in Exhibit C the Primary and, if applicable, Contingent Beneficiary(ies) he or she desires to receive amounts payable under the Plan in the event of the Plan Participant’s death. A Plan Participant may from time to time change his or her designated Primary or Contingent Beneficiary(ies) without the consent of such Beneficiary(ies) by filing a new Exhibit C with the Administrator.

At the time of death of a Plan Participant, if there is no living designated Primary Beneficiary(ies), the designated Contingent Beneficiary(ies), if any, shall be the Beneficiary. If there are no living Primary or Contingent Beneficiary(ies), the Plan Participant’s surviving spouse shall be the Beneficiary. If there is no surviving spouse, the Plan Participant’s estate shall be the Beneficiary.

6.	DEFERRED PAYMENT ACCOUNT

6.1. Crediting Amounts. A Plan Participant may select one or more Funds in which his or her deferred compensation is invested for purposes of crediting earnings, by filing Exhibit D with the Administrator. Any compensation deferred by a Plan Participant shall be credited to his or her Deferred Payment Account on the books of each Fund served by the Plan Participant in the form of Phantom Shares of the Fund(s) that the Plan Participant has selected.

The number of Phantom Shares credited to a Plan Participant’s Deferred Payment Account shall be the number of whole and fractional Phantom Shares determined by dividing the amount of the deferred compensation invested in the particular Fund(s) by the net asset value per Class A share of such Fund(s) as of the Date of Crediting.

6.2. Change of Investment Designation. A Plan Participant may change the designation of the Fund(s) in which his or her future deferred compensation is invested by filing a revised Exhibit D with, or by telephoning, the Administrator. The Administrator will confirm promptly in writing to the Plan Participant any change of investment designation accomplished by telephone. Any change of investment designation shall be effective only with respect to retainers and meeting fees earned after receipt of such request by the Administrator. If a request is received after 1:00pm PT, the change in investment designation will be effective the next business day.

6.3. Exchange Requests. By contacting the Administrator, a Plan Participant may request to exchange Phantom Shares of one or more Funds previously credited to a Deferred Payment Account for Phantom Shares of another Fund(s) based on their relative net asset values per Class A share next determined. The Administrator will confirm promptly in writing to the Plan Participant any exchange request made by telephone. An exchange request will be effective after receipt of such request by the Administrator If a request is received after 1:00pm PT, the exchange will be effective the next business day. An exchange request may relate to one or more Deferred Payment Accounts; however, no more than 12 exchange requests will be processed each calendar year for all amounts credited under this Plan to any one Plan Participant. For purposes of this limitation, all exchange requests received by the Administrator in one day shall be treated as one exchange request.

6.4. Plan Participants Serving on Money Market Fund Boards. Notwithstanding the other provisions of Section 6, a Plan Participant serving on the Board of a Money Market Fund may select only that Money Market Fund in which his or her compensation is invested for purposes of crediting earnings. In addition, no exchanges will be permitted in a Deferred Payment Account on the books of a Money Market Fund.

7.	TIMING AND MANNER OF PAYMENTS

7.1. Timing of Payments. Amounts credited to a Deferred Payment Account under the Plan to a Plan Participant shall be paid to the Plan Participant in accordance with the terms of the Plan only upon the occurrence of a Permissible Payment Event.

7.2. Manner of Payment - Lump Sum. Upon the occurrence of a Permissible Payment Event, the amount of payment to a Participant shall be determined by multiplying the number of Phantom Shares of a Fund(s) that have been allocated to the Plan Participant’s Deferred Payment Account subject to the Permissible Payment Event, by the net asset value per Class A share of such Fund(s) as of the date of the Permissible Payment Event.

The payment shall be made to the Plan Participant as soon as administratively practicable, but in no event later than thirty (30) days from the date of the Permissible Payment Event.

7.3. Alternative Payment Methods. A Plan Participant entitled to payment for reasons other than death, Disability or Unforeseeable Emergency, may elect, instead of a lump-sum payment, to receive annual or quarterly installment payments as specified by the Plan Participant in Exhibit B.

The Plan Participant may elect either the Variable Dollar Installment Method or the Fixed Dollar Installment Method for a period not to exceed thirty (30) years. Once installment payments begin under either method, they cannot be stopped, except in case of death, Disability or Unforeseeable Emergency. Under either method, the first payment to a Plan Participant shall be calculated as of last day of the calendar quarter that contains the Permissible Payment Event. This first payment shall be made to the Plan Participant as soon as administratively practicable thereafter, but in no event later than thirty (30) days after the end of the calendar quarter that contains the Permissible Payment Event. Subsequent payments shall be made within thirty (30) days of the close of future calendar quarters or years, consistent with the Plan Participant’s election of either quarterly or annual installments. As of December 31, 2006, Plan Participants receiving payments under either one of the alternative payment methods will continue to receive payments under the payment schedule existing on that date.

In no event shall a payment under the Fixed Dollar Installment Method relating to a Deferred Payment Account exceed the value of the Deferred Payment Account as of the last day of the calendar quarter immediately preceding the date of payment. If any balance credited to a Plan Participant’s Deferred Payment Account remains positive on the date 30 years from the date of the initial payment to the Plan Participant, then such remaining balance shall be paid to the Plan Participant as soon as practicable thereafter in a single lump sum payment.

7.4. Death of Plan Participant. If the Plan Participant dies at any time before all amounts in his or her Deferred Payment Accounts have been paid, such remaining amounts shall be paid in a lump-sum to the Plan Participant’s Beneficiary(ies).

7.5. Disability of Plan Participant. In the event the Plan Participant shall become Disabled before all amounts credited to the Plan Participant’s Deferred Payment Accounts have been paid to him or her, such remaining amounts shall be paid in a lump sum to the Plan Participant.

7.6. Unforeseeable Emergency. If the Committee determines that the Plan Participant has an Unforeseeable Emergency, the Committee may make a lump sum payment to the Plan Participant from his or her Deferred Payment Account(s) in an amount not to exceed the amount necessary to satisfy the emergency need plus any taxes that may be owed on the payment. In the event the payment is less than the value of all of the Plan Participant’s Deferred Payment Accounts, the Deferred Payment Accounts shall be reduced proportionately so that, with respect to each such Fund, the ratio of the value of all Phantom Shares of the Fund to the value of the Deferred Payment Account shall remain the same before and after payment.

7.7. Modification or Revocation for Post-2004 Deferrals. A Plan Participant’s designation as to timing and manner of payments of post-2004 deferrals under the Plan may be modified or revoked by filing a written election with the Administrator. Such designation will not be effective for at least 12 months. To be valid the new designation must (i) be made at least 12 months before the first scheduled payment under the current designation and (ii) delay the first payment by at least 5 years from the date the first payment would otherwise have been made under the current designation. No other modification of the designation as to the timing or manner of payment will be valid.

7.7.a. Special Transition Rule. Under U.S. Treasury transition relief that extends through December 31, 2007, a Plan Participant may change the timing or manner of payment with respect to post-2004 deferrals without regard to the limitations described in paragraph 7.7. A Plan Participant may not, however, change the timing of payment with respect to deferrals that would have been paid in the year that he or she uses the transition relief. Furthermore, a Plan Participant may not accelerate post-2004 deferrals into the year that he or she takes advantage of the transition relief.

7.8. Modification or Revocation for Pre-2005 Deferrals. A Plan Participant’s designation as to timing and manner of payments of pre-2005 deferrals under the Plan may be modified or revoked by filing a written election with the Administrator. However, any subsequent designation that would result in a change in the timing of a payment under the Plan or a change in the manner of payments under the Plan shall not be effective unless such subsequent designation is made not less than 12 months prior to the date of the first scheduled payment under the Plan. With respect to such pre-2005 deferrals, the Committee may, in its sole discretion, accelerate the payment of any pre-2005 deferral.

8.	MISCELLANEOUS

8.1. Purchase of Underlying Shares. To the extent a Plan Participant’s Deferred Payment Account has been credited with Phantom Shares of a Fund other than the Fund responsible for payment of the compensation being deferred, a Fund may, but shall not be obligated to, purchase and maintain Class A shares of such other Fund in amounts equal in value to such Phantom Shares.

8.2. Unsecured Promise to Pay. Amounts credited to a Plan Participant’s Deferred Payment Account under this Plan shall not be evidenced by any note or other security, funded or secured in any way. No assets of a Fund (including, without limitation, shares of other Funds) shall be segregated for the account of any Plan Participant (or Beneficiary), and Plan Participants (and Beneficiaries) shall be general unsecured creditors for payments due under the Plan.

8.3. Withholding Taxes. The Administrator shall deduct, any federal, state or local taxes and other charges required by law to be withheld.

8.4. Statements. The Administrator, on behalf of each Fund, shall furnish to each Plan Participant a statement showing the balance credited to his or her Deferred Payment Account at least annually.

8.5. Assignment. No amount in a Plan Participant’s Deferred Payment Account may be assigned or transferred by the Plan Participant except by will or the law of descent and distribution.

8.6. Governing Law; Severability. The Plan shall be construed, governed and administered in accordance with the laws and regulations of the United States Treasury Department and the State of California. The Plan is subject to applicable law and regulation and, in the event of changes in such law or regulation, shall be construed and applied in a manner in which the intent of its terms and provisions are best preserved. In the event that one or more provisions of the Plan are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions shall not in any way be affected or impaired.

AMCAP Fund, Inc.:

Claudia P. Huntington, President & Principal Executive Officer

Vincent P. Corti, Secretary

American Balanced Fund, Inc.:

Robert G. O’Donnell, Vice Chairman & Principal Executive Officer

Patrick F. Quan, Secretary

The American Funds Income Series:

John H. Smet, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

American Funds Insurance Series:

James K. Dunton, Vice Chairman & Principal Executive Officer

Chad L. Norton, Secretary

The American Funds Tax-Exempt Series II:

Abner D. Goldstine, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

American High-Income Municipal Bond Fund, Inc.:

Mark R. Macdonald, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

American High-Income Trust:

David C. Barclay, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

American Mutual Fund, Inc.:

James K. Dunton, Vice Chairman & Principal Executive Officer

Vince P. Corti, Secretary

The Bond Fund of America, Inc.:

Abner D. Goldstine, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

Capital Income Builder, Inc.:

James B. Lovelace, Vice Chairman & Principal Executive Officer

Vincent P. Corti, Secretary

Capital World Bond Fund, Inc.:

Mark H. Dalzell, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

Capital World Growth and Income Fund, Inc.:

Stephen E. Bepler, President & Principal Executive Officer

Vincent P. Corti, Secretary

The Cash Management Trust of America:

Abner D. Goldstine, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

EuroPacific Growth Fund:

Mark E. Denning, President & Principal Executive Officer

Vincent P. Corti, Secretary

Fundamental Investors, Inc.:

James F. Rothenberg, Vice Chairman & Principal Executive Officer

Patrick F. Quan, Secretary

The Growth Fund of America, Inc.:

James F. Rothenberg, Vice Chairman & Principal Executive Officer

Patrick F. Quan, Secretary

The Income Fund of America, Inc.:

Hilda L. Appplbaum, Chairman & Principal Executive Officer

Patrick F. Quan, Secretary

Intermediate Bond Fund of America:

John H. Smet, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

The Investment Company of America:

R. Michael Shanahan, Chairman & Chief Executive Officer

Vincent P. Corti, Secretary

Limited Term Tax-Exempt Bond Fund of America:

Brenda S. Ellerin, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

The New Economy Fund:

Timothy D. Armour, President & Principal Executive Officer

Chad L. Norton, Secretary

New Perspective Fund, Inc.:

Robert W. Lovelace, President & Principal Executive Officer

Vincent P. Corti, Secretary

New World Fund, Inc.:

Robert W. Lovelace, President & Principal Executive Officer

Vincent P. Corti, Secretary

Short-Term Bond Fund of America, Inc.

David A. Hoag, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

SMALLCAP World Fund, Inc.:

Gordon Crawford, Vice Chairman & Principal Executive Officer

Chad L. Norton, Secretary

The Tax-Exempt Bond Fund of America, Inc.:

Neil L. Langberg, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

The Tax-Exempt Money Fund of America, Inc.:

Abner D. Goldstine, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

The U.S. Treasury Money Fund of America:

Abner D. Goldstine, President & Principal Executive Officer

Kimberly S. Verdick, Secretary

EXHIBIT A

LIST OF PARTICIPATING FUNDS	ABBREVIATION
AMCAP Fund, Inc.	AMCAP
American Balanced Fund, Inc.	AMBAL
American Funds Insurance Series	VI
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
The Cash Management Trust of America	CMTA
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
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
The Tax-Exempt Money Fund of America, Inc.	CTEX
The U.S. Treasury Money Fund of America	CTRS
U.S. Government Securities Fund	GVT

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EXHIBIT B

Deferral Election Form

I am a participant in the Deferred Compensation Plan for Independent Board Members of the mutual funds managed by CRMC and I wish my compensation from Board service to [all funds][the following funds ______________________________________] deferred as follows:

I elect to defer the following portion of my compensation from the funds managed by CRMC and designated above:¹ ^{If clarification regarding deferrals for different Funds is necessary, please attach explanatory sheet.}	· 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 annualqIn quarterly variable dollar installment payments over a period of q 5 yearsq10 yearsq15 yearsq 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.

Name (please print) Date

____________________

Signature SSN or ITIN

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EXHIBIT C

Beneficiary Designation Form

I hereby designate the following beneficiary(ies) to receive any death benefit payable on account of my participation in the Deferred Compensation Plan for Independent Board Members of

the mutual funds managed by CRMC.

Primary Beneficiary(ies):	1. Name:% Share: Address: Relationship: Date of Birth: Social Security #: Trust Name and Date (if beneficiary is a trust): Trustee of Trust: 2. Name:% Share: Address: Relationship: Date of Birth: Social Security #: Trust Name and Date (if beneficiary is a trust): Trustee of Trust:
Contingent Beneficiary(ies):	1. Name:% Share: Address: Relationship: Date of Birth: Social Security #: Trust Name and Date (if beneficiary is a trust): Trustee of Trust: 2. Name:% Share: Address: Relationship: Date of Birth: Social Security #: Trust Name and Date (if beneficiary is a trust): Trustee of Trust:

I understand that payment will be made to my Contingent Beneficiary(ies) only if there is no surviving Primary Beneficiary(ies).

Participant’s Name (please print) Date

Participant’s Signature

^{1 If
clarification
regarding deferrals for different Funds is necessary, please attach explanatory
sheet.}

[logo - American Funds®]

EXHIBIT D

Rate of Return Election Form

I am a participant in the Deferred Compensation Plan for Independent Board Members of

the mutual funds managed by CRMC and I wish my compensation from Board service to [all funds] [the following funds ________________________________________________________________] invested as follows:


	FUNDS	% ALLOCATION

With respect to	AMCAP Fund, Inc.	%
future earnings, I	American Balanced Fund, Inc.	%
hereby elect to have	American High-Income Municipal Bond Fund, Inc.	%
amounts credited to	American High-Income Trust	%
my Deferred	American Mutual Fund, Inc.	%
Payment Account(s)	The Bond Fund of America, Inc.	%
for the fund(s) listed	Capital Income Builder, Inc.	%
above invested in	Capital World Bond Fund, Inc.	%
Class A shares of	Capital World Growth and Income Fund, Inc.	%
the specified funds:	The Cash Management Trust of America*	%
	EuroPacific Growth Fund	%
	Fundamental Investors, Inc.	%
*I understand that if I	The Growth Fund of America, Inc.	%
serve on the Board	The Income Fund of America, Inc.	%
of a Money Market	Intermediate Bond Fund of America	%
Fund, I may only	The Investment Company of America	%
have amounts	Limited Term Tax-Exempt Bond Fund of America	%
credited to my	The New Economy Fund	%
Deferred Payment	New Perspective Fund, Inc.	%
Account for that	New World Fund, Inc.	%
Money Market Fund	SMALLCAP World Fund, Inc.	%
with respect to future	Short-Term Bond Fund of America, Inc. (available January 2007)	%
earnings invested in	The Tax-Exempt Bond Fund of America, Inc.	%
Class A shares of	The Tax-Exempt Fund of California	%
that particular Money	The Tax-Exempt Fund of Maryland	%
Market Fund.	The Tax-Exempt Fund of Virginia	%
	The Tax-Exempt Money Fund of America, Inc.*	%
	The U.S. Treasury Money Fund of America*	%
	U.S. Government Securities Fund	%
	Washington Mutual Investors Fund, Inc.	%

I have read and understand this Rate of Return Election Form. I understand that earnings credited to my Deferred Payment Account(s) under the Plan in accordance with this Form shall be credited in the form of Phantom Shares rather than actual shares. I further state that I have reviewed the prospectus for each designated mutual fund.

Name (please print) Date

Signature

EX-99.G CUST AGREEMT 5 exhibitg.htm EXHIBIT G Exhibit G

GLOBAL CUSTODY AGREEMENT

This AGREEMENT is effective as of December 21, 2006, and is between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION ("Bank") and each of the investment companies and other pooled investment vehicles (which may be organized as corporations, business or other trusts, limited liability companies, partnerships or other entities) managed by Capital Research and Management Company and listed on Appendix A hereto, as such Appendix may be amended from time to time (each a "Customer").

WHEREAS, each Customer is or may be organized with one or more series of shares, each of which shall represent an interest in a separate investment portfolio of cash, securities and other assets;

WHEREAS, each Customer desires to appoint, in accordance with the provisions of the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations thereunder, Bank as custodian on behalf of itself or those of its existing or additional series of shares that are also listed on Appendix A hereto (each such listed investment portfolio being referred to hereinafter as a “Portfolio”), and Bank has agreed to act as custodian for the Portfolios under the terms and conditions hereinafter set forth;

WHEREAS, for administrative purposes only, each Customer wishes to evidence its individual agreement with Bank in a single instrument, notwithstanding each Customer’s intention to be separately bound;

NOW THEREFORE, Bank and each Customer agree as follows:

1.	Appointment of Custodian; Customer Accounts.

Customer hereby appoints Bank as its custodian for each Portfolio. Bank hereby accepts such appointment. Bank, acting as “Securities Intermediary” (as defined in Section 2 hereof) shall establish and maintain the following accounts in the name of Customer on behalf of each Portfolio:

(a) a Custody Account for Securities and other Financial Assets (as such terms are defined in Section 2 hereof); and

(b) an account (“Deposit Account”) for any and all cash in any currency received by Bank or its Subcustodian for the account of the Portfolio, which cash shall not be subject to withdrawal by draft or check.

Customer warrants its authority on behalf of each Portfolio to: (i) deposit the Financial Assets and cash (collectively, "Assets") received in the Custody Account or the Deposit Account, as the case may be (collectively, “Accounts”) and (ii) give Instructions concerning the Accounts and such Instructions shall be clear as to which Portfolio they relate. Bank may deliver Financial Assets with different certificate number(s) but which are otherwise identical in all respects (including, without limitation, any related CUSIP, ISN, rights and privileges) to Financial Assets deposited in the Custody Account.

Bank shall be accountable under the terms of this agreement to the Customer for all Assets held in the Accounts and shall take prompt and appropriate action to remedy any discrepancies with respect to such Assets. Upon written agreement between Bank and Customer, additional Accounts may be established and separately accounted for as additional Accounts hereunder.

2. Definitions.

As used herein, the following terms shall have the following respective meanings:

(a) “Affiliate” shall mean an entity controlling, controlled by, or under common control with, another entity.

(b) “Authorized Person" shall mean an employee or agent (including an investment manager) designated by prior written notice from Customer or its designated agent to act on behalf of Customer hereunder. Such persons shall continue to be Authorized Persons until such time as Bank receives Instructions from Customer or its designated agent that any such employee or agent is no longer an Authorized Person.

(d) “Custody Account” shall mean each custody account on Bank’s records to which Financial Assets are or may be credited pursuant hereto.

(e) “Eligible Foreign Custodian” shall have the meaning assigned thereto in Rule 17f-5 (and shall include any entity qualifying as such pursuant to an exemp-tion, rule or other appropriate action of the U.S. Securities and Exchange Commission).

(f) “Eligible Securities Depository” shall have the meaning assigned thereto in Rule 17f-7 (and shall include any entity qualifying as such pursuant to an exemption, rule or other appropriate action of the U.S. Securities and Exchange Commission).

(g) “Eligible Contract” shall mean a currently effective written contract between Bank and a Subcustodian satisfying the requirements of paragraph (c)(2) of Rule 17f-5 (including any amendments thereto or successor provisions).

(h) “Entitlement Holder” shall mean the person on the records of a Securities Intermediary as the person having a Securities Entitlement against the Securities Intermediary.

(i) “Financial Asset” shall have the meaning assigned thereto in Article 8 of the Uniform Commercial Code, which, as of the date hereof, generally means:

(i) a Security;

(ii) an obligation of a person or a share, participation or other interest in a person or property or enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or

(iii) any property that is held by a Securities Intermediary for another person in a Securities account if the Securities Intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under Article 8 of the Uniform Commercial Code. As the context requires, the term means either the interest itself or the means by which a person’s claim to it is evidenced, including a Certificated Security or an Uncertificated Security, a Security certificate, or a Security Entitlement. Financial Asset shall in no event mean cash.

(j) “Foreign Assets” shall have the meaning assigned thereto under Rule 17f-5, which, as of the date hereof, means any investments (including foreign currencies) for which the primary market is outside the United States, and any cash and cash equivalents that are reasonably necessary to effect Customer’s transactions in those investments.

(k) “Instructions" shall mean instructions of any Authorized Person received by Bank, via telephone, telex, facsimile transmission, bank wire or other teleprocess or electronic instruction or trade information system (which may include Internet-based systems involving appropriate testing and authentication) acceptable to Bank which Bank believes in good faith to have been given by, or under the direction of, Authorized Persons. The term "Instructions" includes, without limitation, instructions to sell, assign, transfer, deliver, purchase or receive for the Custody Account, any and all stocks, bonds and other Financial Assets or to transfer funds in the Deposit Account.

(l) “Local Practice” shall mean the customary securities trading or securities processing practices and procedures generally accepted by Institutional Investors in the jurisdiction or market in which the transaction occurs, including, without limitation:

(i) delivering Financial Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such securities from such purchaser or dealer;

(ii) delivering cash to a seller or a dealer (or an agent for such seller or dealer) against expectation of receiving later delivery of purchased Financial Assets; or

(iii) in the case of a purchase or sale effected through a securities system, in accordance with the rules governing the operation of such system.

(m) “Institutional Investor” shall mean a major commercial bank, corporation, insurance company, or substantially similar institution, which, as a substantial part of its business operations, purchases and sells Financial Assets and makes use of global custodial services.

(n) “Intermediary Custodian” shall mean any Subcustodian that is a Securities Intermediary and is qualified to act as a custodian.

(o) “Rule 17f-5” shall mean rule 17f-5 under the 1940 Act, including any amendments thereto or successor rules.

(p) “Rule 17f-7” shall mean rule 17f-7 under the 1940 Act, including any amendments thereto or successor rules.

(q) “Security” shall have the meaning assigned thereto in Article 8 of the Uniform Commercial Code, which, as of the date hereof, generally means an obligation of an issuer or a share, participation, or other interest in an issuer or in property or an enterprise of an issuer:

(i) which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;

(ii) which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests, or obligations; and

(iii)

which:

(A) is, or is of a type, dealt in or traded on securities exchanges or securities markets; or

(B) is a medium for investment and by its terms expressly provides that it is a security governed by Article 8 of the Uniform Commercial Code.

(r) “Securities Depository” means a clearing corporation that is registered with the U.S. Securities and Exchange Commission as a clearing agency under section 17A of the Securities Exchange Act of 1934; or a Federal Reserve Bank or other person authorized to operate the federal book entry system described in the regulations of the Department of Treasury codified at 31 CFR 357, Subpart B, or book-entry systems operated pursuant to comparable regulations of other federal agencies.

(s) “Securities Entitlement” shall mean the rights and property interest of an Entitlement Holder with respect to a Financial Asset as set forth in Part 5 of Article 8 of the Uniform Commercial Code.

(t) “Securities Intermediary” shall have the meaning assigned thereto in Article 8 of the Uniform Commercial Code, which, as of the date hereof, means Bank, a Subcustodian, a securities depository, clearing corporation or any other person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity.

(u) “Uncertificated Security” shall mean a Security that is not represented by a certificate.

(v) “Uniform Commercial Code” shall mean the Uniform Commercial Code of the State of New York, as amended from time to time.

3.	Maintenance of Financial Assets and Cash at Bank and Subcustodian Locations.

Unless Instructions specifically require another location reasonably acceptable to Bank:

(a) Financial Assets shall be held in the country or other jurisdiction in which the principal trading market for such Financial Assets is located, where such Financial Assets are to be presented for payment or where such Financial Assets are acquired; and

(b) Cash shall be credited to an account in a country or other jurisdiction in which such cash may be legally deposited or is the legal currency for the payment of public or private debts.

Cash may be held pursuant to Instructions in such accounts as may be available for the particular currency, recognizing that accounts bearing commercially reasonable interest will be used to the extent such use does not violate applicable law. To the extent Instructions are issued and Bank can comply with such Instructions, Bank is authorized to maintain cash balances on deposit for Customer with itself (or its Affiliates, in accordance with applicable law and regulation), at such commercially reasonable rates of interest as may from time to time be paid on such accounts, or in non-interest bearing accounts as Customer may direct, if acceptable to Bank.

If Customer wishes to have any Foreign Assets belonging to one or more Portfolios held in the custody of an institution other than the established Subcustodians as defined in Section 4 (or an Eligible Securities Depository listed on Schedule B hereto), such arrangement must be authorized by a written agreement, signed by Bank and Customer.

If Bank places and maintains Customer’s Financial Assets, corresponding to a Securities Entitlement, with a Securities Depository or Intermediary Custodian, Bank must:

(c) at a minimum exercise due care in accordance with reasonable commercial standards in discharging its duty as a Securities Intermediary to obtain and thereafter maintain such Financial Assets;

(d) provide, promptly upon request by Customer, such reports as are available concerning the internal accounting controls and financial strength of Bank; and

(e) require any Intermediary Custodian at a minimum to exercise due care in accordance with reasonable commercial standards in discharging its duty as a Securities Intermediary to obtain and thereafter maintain Financial Assets corresponding to the Securities Entitlements of its Entitlement Holders.

4. Subcustodians.

(a) Bank may act under the Agreement through the subcustodians with which Bank has entered into Eligible Contracts and which are listed on Schedule A attached hereto (“Subcustodians”). Bank reserves the right, exercising reasonable care, prudence and diligence, to amend Schedule A from time to time. Any such amendment shall be effective upon 45 calendar days’ written notice to Customer in accordance with the Agreement or such shorter period as Bank reasonably believes is necessary, with due regard to the continuing reasonable care of the Customer’s Foreign Assets in accordance with Rule 17f-5.

(b) Bank hereby represents to Customer that each Subcustodian is an Eligible Foreign Custodian. If Schedule A is amended to add one or more Subcustodians, this representation shall be effective as to the amended Schedule on the date of such amendment. Bank shall promptly advise Customer if any Subcustodian ceases to be an Eligible Foreign Custodian.

(c) Customer authorizes Bank to hold Assets belonging to each Portfolio in accounts that Bank has established with one or more of its branches or such Subcusto-dians, provided that, in the case of an Eligible Foreign Custodian, Customer’s Foreign Custody Manager has made the determinations required by Rule 17f-5 with respect to the Portfolio’s Foreign Assets to be held by such Subcustodian. If Bank is not acting as Foreign Custody Manager for the relevant Portfolio at such time, Customer shall give Bank appropriate notice of such determinations.

5.	Appointment as Foreign Custody Manager.

Customer hereby appoints Bank as its Foreign Custody Manager for each Portfolio in accordance with Rule 17f-5. Bank hereby accepts such appointment. Customer and Bank shall act in conformity with such rule (including any amendments thereto or successor provisions) for as long as Bank acts as Customer’s Foreign Custody Manager. Bank’s appointment as Foreign Custody Manager for a Portfolio (or for a particular country or other political or geographical jurisdiction) may be terminated at any time by Customer or Bank, regardless of whether Bank serves as custodian for such Portfolio hereunder. Any such termination as to one or more Portfolios (or jurisdictions) shall be effected in a manner consistent with the provisions for notice and termination set forth elsewhere in this Agreement. Bank shall not be obligated to serve in this capacity for a Portfolio if Bank no longer acts as Customer’s custodian for such Portfolio.

As of the date hereof, Rule 17f-5 provides that Customer may from time to time place or maintain in the care of an Eligible Foreign Custodian any of Customer’s Foreign Assets, provided that:

(a) Customer’s Foreign Custody Manager determines that Customer’s assets will be subject to reasonable care, based on the standards applicable to custodians in the relevant market, if maintained with the Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation:

(i) The Eligible Foreign Custodian’s practices, procedures, and internal controls, including, but not limited to, the physical protections available for Certificated Securities (if applicable), the method of keeping custodial records, and the security and data protection practices;

(ii) Whether the Eligible Foreign Custodian has the requisite financial strength to provide reasonable care for Foreign Assets;

(iii) The Eligible Foreign Custodian’s general reputation and standing; and

(iv) Whether Customer will have jurisdiction over and be able to enforce judgments against the Eligible Foreign Custodian, such as by virtue of the existence of any offices of the custodian in the United States or the custodian’s consent to service of process in the United States.

(b) The arrangement with the Eligible Foreign Custodian is governed by a written contract that Customer’s Foreign Custody Manager, has determined will provide reasonable care for Customer’s assets based on the standards set forth in paragraph (a) above.

(i)

Such contract must provide:

(A) For indemnification or insurance arrangements (or any combination of the foregoing) that will adequately protect Customer against the risk of loss of Foreign Assets held in accordance with such contract;

(B) That Foreign Assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the Eligible Foreign Custodian or its creditors, except a claim of payment for their safe custody or administration or, in the case of cash deposits, liens or rights in favor of creditors of the custodian arising under bankruptcy, insolvency, or similar laws;

(C) That beneficial ownership of the Foreign Assets will be freely transferable without the payment of money or value other than for safe custody or administration;

(D) That adequate records will be maintained identifying the assets as belonging to Customer or as being held by a third party for the benefit of Customer;

(E) That Customer’s independent public accountants will be given access to those records or confirmation of the contents of those records; and

(F) That Customer will receive periodic reports with respect to the safekeeping of Customer’s assets, including, but not limited to, notification of any transfer to or from Customer’s account or a third party account containing assets held for the benefit of Customer.

(ii) Such contract may contain, in lieu of any or all of the provisions specified in paragraph (b)(i) above, such other provisions that Customer’s Foreign Custody Manager, reasonably determines will provide, in their entirety, the same or a greater level of care and protection for the Foreign Assets as the specified provisions, in their entirety.

(c) (i) Customer’s Foreign Custody Manager, has established a system to monitor the appropriateness of maintaining Customer’s assets with a particular custodian under paragraph (a) above, and to monitor performance of the contract under paragraph (b) above.

(ii) If an arrangement no longer meets these requirements, Customer must withdraw its assets from the Eligible Foreign Custodian as soon as reasonably practicable.

Customer’s Foreign Custody Manager will provide written reports in a form reasonably acceptable to Customer (or an Authorized Person) notifying Customer’s Board of Directors (or equivalent body; hereinafter, “Board”) of the placement of Customer’s Foreign Assets with a particular custodian and of any material change in Customer’s non-U.S. custody arrangements, with the reports to be provided to the Board at such times as the Board deems reasonable and appropriate based on the circumstances of Customer’s non-U.S. custody arrangements.

Customer hereby confirms that Customer will withdraw its Foreign Assets from any non-U.S. custodian as soon as reasonably practicable upon written notification from Customer’s Foreign Custody Manager that custody arrangements with such custodian no longer meet the requirements of Rule 17f-5 (an “Adverse Notification”). Customer also confirms that, if Bank is acting as Customer’s Foreign Custody Manager and has delivered an Adverse Notification to Customer, Bank, as Foreign Custody Manager, shall have no further responsibility under this Agreement in relation to Customer’s Foreign Assets held under any custody arrangement covered by such Adverse Notification following the Adverse Notification. (However, the existence of an Adverse Notification shall not affect the scope of responsibilities, or the standard of care, applicable to Bank in relation to such Assets under other provisions of this Agreement.)

6. Securities Depositories.

(a) Bank hereby represents to Customer that each securities depository listed on Schedule B is an Eligible Securities Depository. If Schedule B is amended, this representation shall be effective as to the amended Schedule on the date of such amendment. Bank shall promptly advise Customer if any securities depository listed on Schedule B ceases to be an Eligible Securities Depository.

(b) Bank shall provide Customer an analysis of the custody risks (which analyses may be provided to Customer electronically) associated with maintaining Customer’s Foreign Assets with each Eligible Securities Depository used by Bank and at which any Foreign Assets of Customer are held or are expected to be held. Bank shall use reasonable efforts to provide such analysis at least annually on March 31^st of each calendar year (or, in the case of an Eligible Securities Depository not used by Bank as of the agreed upon date, prior to the initial placement of Customer’s Foreign Assets at such Depository after such date). Bank shall monitor the custody risks associated with maintaining Custo-mer’s Foreign Assets at each such Eligible Securities Depository on a continuing basis, and shall promptly notify Customer or its investment adviser of any material changes in such risks.

(c) Bank shall, upon Customer’s reasonable request from time to time, provide certain additional information (“Additional Information”) to Customer beyond the scope of the information Bank is otherwise obligated to provide to Customer under this Agreement, or any other agreement between the parties relating to Customer’s Foreign Assets. For example, Additional Information may relate to a country’s financial infrastructure, prevailing custody and settlement practices, laws applicable to the safekeeping and recovery of Foreign Assets held in custody, and the likelihood of nationalization, currency controls and similar risks, but shall not include information required to be provided under this Agreement or any other agreement between the parties relating to Customer’s Foreign Assets.

(d) Bank’s obligation to provide Customer with Additional Information shall be limited to the extent Additional Information is (i) already in the possession of Bank, or (ii) available to Bank using commercially reasonable means. Customer hereby acknowledges that: (i) Additional Information is designed solely to inform Customer of certain market conditions and procedures and is not intended as a recommendation to invest or not invest in particular markets; and (ii) Bank has gathered the information from sources it considers reliable, but does not assume responsibility for inaccuracies or incomplete information attributable to actions or omissions of third parties. (For this purpose, “third parties” shall not include any of the Subcustodians listed on Schedule A, except to the extent that, in a given case, a Subcustodian accurately transmitted information it had itself received from a third party (such as from a regulator or securities depository) rather than information it had generated itself.)

(e) Customer and Bank hereby acknowledge and agree that the decision to place Customer's Foreign Assets with an Eligible Securities Depository shall be made by Customer's investment adviser (subject to the Board's oversight) or the Customer, after consideration of the information provided by Bank and other information Customer deems relevant, and based on standards of care that are generally applicable to investment advisers and the Board. Further, the parties understand that the decision to place Customer’s Foreign Assets with an Eligible Securities Depository does not have to be made separately, but may be made in the overall context of the decision to invest in a particular country.

7.	Use of Subcustodians and Securities Depositories.

(a) Bank shall identify the Assets on its books as belonging to Customer and identify the Portfolio to which such Assets belong.

(b) A Subcustodian shall hold such Assets together with assets belonging to other customers of Bank in accounts identified on such Subcustodian's books as custody accounts for the exclusive benefit of customers of Bank, such that it is readily apparent that the Assets do not belong to Bank or the Subcustodian.

(c) Any Financial Assets in the Accounts held by a Subcustodian shall be subject only to the instructions of Bank or its agent. Any Financial Assets held in a securities depository for the account of a Subcustodian shall be subject only to the instructions of such Subcustodian or its agent.

(d) Where Securities are deposited by a Subcustodian with a securities depository, Bank shall cause the Subcustodian to identify on its books as belonging to Bank, as agent, the Securities shown on the Subcustodian’s account on the books of such securities depository, such that it is readily apparent that the Securities do not belong to Bank or the Subcustodian.

(e) Bank shall supply periodically, as mutually agreed upon, a statement in respect of any Securities and cash, including identification of the foreign entities having custody of the Securities and cash and descriptions thereof.

8. Deposit Account Transactions.

(a) Bank (or the applicable Subcustodian) shall make payments from the Deposit Account upon receipt of Instructions which include all information reasonably required by Bank.

(b) In the event that any payment to be made under this Section 8 exceeds the funds available in the Deposit Account, Bank, in its discretion, may advance Customer such excess amount which shall be deemed a loan payable on demand, bearing interest at the rate customarily charged by Bank on similar loans.

(c) Bank shall, or shall cause the applicable Subcustodian to: (i) subject to the last sentence hereof, collect all amounts due and payable to Customer with respect to Financial Assets and other assets held in the Accounts; (ii) promptly notify Customer of the collection of income or other payments in a currency other than US dollars that relate to Financial Assets or other Assets held by Bank (or the applicable Subcustodian’s receipt) in a manner mutually agreeable to Bank and Customer; (iii) promptly credit to the account of Customer all income and other payments relating to Financial Assets or other Assets held by Bank hereunder upon Bank’s receipt (or the applicable Subcustodian’s receipt) of such income or payments or as otherwise agreed in writing by Customer and Bank; and (iv) promptly endorse and deliver instruments required to effect such collections. If Bank credits the Deposit Account on a payable date, or at any time prior to actual collec-tion and reconciliation to the Deposit Account, with interest, dividends, redemptions or any other amount due, Customer shall promptly return any such amount upon oral or written notification: (i) that such amount has not been received in the ordinary course of business or (ii) that such amount was incorrectly credited. If Customer does not promptly return any amount upon such notification, Bank shall be entitled, upon oral or written notification to Customer, to reverse such credit by debiting the Deposit Account for the amount pre-viously credited. Bank shall furnish regular overdue income reports to Customer in writing (or by any means by which Instructions may be transmitted hereunder, other than by telephone) of any amounts payable with respect to Financial Assets or other Assets of Customer if such amounts are not received by Bank (or the applicable Subcustodian) when due (or otherwise in accordance with Local Practice). Bank or its Subcustodian shall have no duty or obligation to institute legal proceedings, file a claim or a proof of claim in any insolvency proceeding or take any other action with respect to the collection of such amount, but will reasonably notify Customer of any such proceedings known to Bank and may act for Customer upon Instructions after consultation with Customer.

9. Custody Account Transactions.

(a) Financial Assets shall be transferred, exchanged or delivered by Bank or its Subcustodian upon receipt by Bank of Instructions which include all information reasonably required by Bank. Settlement and payment for Financial Assets received for, and delivery of Financial Assets out of, the Custody Account shall be made in accordance with Local Practice. In connection with the foregoing, where Bank believes in good faith that use of a reasonably available alternative practice to Local Practice would be more protective of Financial Assets than Local Practice, Bank shall advise Customer of such practice and Customer may authorize its use solely in such instance or consent that such practice shall thereafter be deemed to be Local Practice.

(b) Bank shall effect book entries on a contractual settlement date accounting basis with respect to the settlement of trades in those markets where Bank generally offers contractual settlement day accounting and shall notify Customer of these markets from time to time. On the contractual settlement date for a sale, Bank shall credit the Cash Account with the sales proceeds of the sale and transfer the relevant Financial Assets to an account pending settlement of the trade if not already delivered. On the contractual settlement date for the purchase (or earlier if market practice requires delivery of the purchase price before the contractual settlement date), Bank shall debit the Cash Account with the settlement monies and credit a separate account. Bank then shall post the Securities Account as awaiting receipt of the expected Financial Assets. Customer shall not be entitled to the delivery of Financial Assets that are awaiting receipt until Bank or a Subcustodian actually receives them. Bank reserves the right to restrict in good faith the availability of contractual date settlement accounting for credit reasons. Bank, whenever reasonably possible, will notify Customer prior to imposing such restrictions.

(i) Bank may reverse credits or debits made to the Accounts in its discretion if the related transaction fails to settle within a reasonable period, determined by Bank in its discretion, after the contractual settlement date for the related transaction; provided however that prior to taking action, Bank will use every reasonable effort to give Customer written notice of any such reversal which may include back valuation.

(ii) If any Financial Assets delivered pursuant to this Section 9 are returned by the recipient thereof, Bank may reverse the credits and debits of the particular transaction at any time.

10. Actions of Bank.

Bank shall follow Instructions received regarding Assets held in the Accounts. However, until it receives Instructions to the contrary, Bank shall:

(a) Present for payment any Financial Assets which are called, redeemed or retired or other-wise become payable and all coupons and other income items which call for payment upon presentation, to the extent that Bank or Subcustodian is actually aware of such opportunities.

(b) Execute in the name of Customer such ownership and other certificates as may be required to obtain payments in respect of Financial Assets.

(d) Appoint brokers and agents for any transaction involving the Financial Assets, including, without limitation, Affiliates of Bank or any Subcustodian.

(e) Issue statements to Customer, at times and in a form mutually agreed upon, identifying the Assets in the Accounts.

Bank shall promptly send Customer an advice or notification of any transfers of Assets to or from the Accounts. Such statements, advices or notifications shall indicate the identity of the entity having custody of the Assets.

All collections of funds or other property paid or distributed in respect of Financial Assets in the Custody Account shall be made at the risk of Customer until such funds or other property have been received by Bank (or the applicable Subcustodian). Bank shall have no liability for any loss occasioned by delay (other than its own) in the actual receipt of notice by Bank or by its Subcustodians of any payment, redemption or other trans-action regarding Financial Assets in the Custody Account in respect of which Bank has agreed to take any action hereunder.

11. Corporate Actions; Proxies; Taxes; Class Actions.

(a) Corporate Actions. Bank shall transmit promptly to Customer on behalf of each Portfolio summary notification of corporate action information received on a timely basis by Bank (including, without limitation, pendency of calls and maturities of Financial Assets and expirations of rights in connection therewith and notices of exercise of call and put options written by Customer on behalf of a Portfolio and the maturity of futures contracts (and options thereon) purchased or sold by Customer on behalf of a Portfolio) from issuers of the Financial Assets being held for a Portfolio. Bank shall transmit promptly to Customer on behalf of each Portfolio notice of the filing of any registration statement with respect to Financial Assets held for a Portfolio if such information is received by Bank or Bank’s central corporate actions department has actual knowledge of the filing. With respect to tender or exchange offers, Bank shall transmit promptly to Customer on behalf of each Portfolio notice of corporate action information received on a timely basis by Bank from issuers of the Financial Assets whose tender or exchange is sought and from the party (or its agents) making the tender or exchange offer. If Customer desires to take action with respect to any tender offer, exchange offer or any other similar transaction, Customer shall notify Bank within such period as will give Bank (including any Subcustodian) reasonably sufficient time to take such action. Bank shall inform Customer of pertinent deadlines in each case.

When a rights entitlement or a fractional interest resulting from a rights issue, stock dividend, stock split or similar corporate action is received which bears an expiration date, Bank shall use reasonable efforts to obtain Instructions from Customer or its Authorized Person, even if its own deadlines for receiving instructions have passed; however, if Instructions are not received in time for Bank to take timely action, or actual notice of such corporate action was received too late to seek Instructions, Bank will notify Customer of the corporate action but shall not be required to take further action.

(b) Proxy Voting.

(i) Bank shall, with respect to Financial Assets that are not Foreign Assets, cause to be promptly executed by the registered holder of such Financial Assets, if the Financial Assets are registered otherwise than in the name of Customer on behalf of a Portfolio or a nominee thereof, all proxies, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to Customer such proxies, all proxy soliciting materials and all notices relating to such Financial Assets.

(ii) Bank shall, with respect to Financial Assets that are Foreign Assets, use commercially reasonable efforts (including the use of third party representatives) to facilitate the exercise of voting and other shareholder proxy rights; it being understood and agreed that (A) proxy voting may not be available in all markets (it being understood that Bank shall make proxy voting services available to Customer in a given market where Bank offers such services to any other custody client), and (B) apart from voting, Bank will, upon request and in its discretion, assist customer in exercising other shareholder rights such as attending shareholder meetings, nominating directors and proposing agenda items. In particular, and without limiting the generality of the foregoing, Bank may provide written summaries of proxy materials in lieu of providing original materials (or copies thereof) and while Bank shall attempt to provide accurate summaries, whether or not translated, Bank shall not be liable for any losses or other consequences that may result from reliance by Customer upon the same where Bank prepared the same in good faith and with reasonable efforts. Bank shall use reasonable efforts to notify Customer in cases where, due to various circumstances beyond control of Bank, voting cannot be exercised. Customer acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice, practical constraints and other facts, may have the effect of severely limiting the ability of Customer to exercise shareholder rights. In addition, Customer acknowledges that: (A) in certain countries Bank may be unable to vote individual proxies but shall only be able to vote proxies on a net basis (e.g., a net yes or no vote given the voting instructions received from all customers); and (B) proxy voting may be precluded or restricted in a variety of circumstances, including, without limitation, where the relevant Financial Assets are: (1) on loan; (2) at registrar for registration or reregistration; (3) the subject of a conversion or other corporate action; (4) not held in a name subject to the control of Bank or its Subcustodian or are otherwise held in a manner which precludes voting; (5) held in a margin or collateral account; and (6) American Depository Receipts.

(iii) Customer and each Authorized Person shall respect the proprietary nature of information developed exclusively through the efforts of Bank (or Subcustodians or other parties acting under Bank’s direction) in relation to proxy voting services.

(i) Customer confirms that Bank is authorized to deduct from any cash received or credited to the Deposit Account any taxes or levies required to be deducted by any revenue or other govern-mental authority for whatever reason in respect of the Custody Account.

(ii) Customer shall provide Bank with all required tax-related documentation and other information relating to Assets held hereunder (“Tax Information”). Tax Information shall include, but shall not be limited to, information necessary for submission to revenue or other governmental authorities to establish taxable amounts or reduce tax burdens that would otherwise be borne by a Portfolio. Upon receipt of Instructions and all required Tax Information from Customer, Bank shall (A) execute ownership and other certificates and affidavits for all tax purposes (within and outside of the United States) in connection with receipt of income and other payments with respect to Assets held hereunder, or in connection with the purchase, sale or transfer of such Assets, and (B) where appropriate, file any certificates or other affidavits for the refund or reclaim of non-U.S. taxes paid with respect to such Assets. Customer warrants that, when given, Tax Information shall be true and correct in all material respects. Customer shall notify Bank promptly if any Tax Infor-mation requires updating or amendment to correct misleading information.

(iii) Bank shall have no responsibility or liability for any tax obligations (including both taxes and any and all penalties, interest or additions to tax) now or hereafter imposed on Customer, its Portfolio, or Bank as Customer’s custodian, by any revenue or governmental authority, or penalties or other costs or expenses arising out of the delivery of, or failure to deliver, Tax Information by Customer

(iv) Bank shall perform tax reclaim services only with respect to taxation levied by the revenue authorities of the countries notified to Customer from time to time and Bank may, by notification in writing, in Bank’s absolute discretion, supplement or amend the markets in which tax reclaim services are offered; provided that, Bank shall make tax reclaim services available to Customer in a given country where Bank offers such services to any other custody client having the same tax status. Other than as expressly provided in this sub-clause, Bank shall have no responsibility with regard to Customer’s tax position or status in any jurisdiction.

(v) Tax reclaim services may be provided by Bank or, in whole or in part, by one or more third parties appointed by Bank (which may be Bank’s affiliates); provided that Bank shall be liable for the performance of any such third party to the same extent as Bank would have been if Bank had performed such services.

(vi) If Bank does not receive appropriate declarations, documentation and informa-tion then any applicable United States withholding tax shall be deducted from income received from Financial Assets.

(d) Class Actions.

(i) Upon receipt of a settled securities class action notification by its corporate actions department, Bank shall research its records for each Custody Account to endeavour to identify Customer’s interest, if any, with respect to any such class action notification. Customer acknowledges that identifying its interest may involve manually researching historic records and that Bank does not warrant that the review will be error free.

(ii) Bank will provide Customer with a summary of each class action notification that it has identified as being pertinent to Customer (together with the information discovered with regard to the applicable securities holding of Customer) and the cut-off time by which Customer is required to inform Bank if it disagrees with Bank’s record of such securities holdings and/or securities transactions or wishes to instruct Bank not to file a claim on Customer’s behalf.

(iii) Unless Customer instructs Bank not to do so by the applicable cut-off time, Bank shall complete and file the required claim forms for the particular class action insofar as they relate to transactions or holdings for which Bank acted as custodian. Bank shall present with the claim any supporting information that it has in its possession and that is required as part of the filing as set out in the class action notification. Bank shall be authorized to disclose such information as may be reasonably required to complete and file such claims. Customer acknowledges that Bank is acting in a clerical capacity in completing and filing such claim forms and that Bank will not be using legal expertise in providing this service.

12. Nominees.

Financial Assets which are ordinarily held in registered form may be registered in a nominee name of Bank, Subcustodian or Eligible Securities Depository, as the case may be. Bank may without notice to Customer cause any such Financial Assets to cease to be registered in the name of any such nominee and to be registered in the name of Customer. Bank shall, or shall cause the applicable Subcustodian or Eligible Securities Depository to use commercially reasonable efforts to promptly register such Financial Assets that are or may be subject to ownership limitations. In the event that any Financial Assets registered in a nominee name are called for partial redemption by the issuer, Bank may allot the called portion to the respective beneficial holders of such class of security in any manner Bank deems to be fair and equitable. Customer shall hold Bank, Subcustodians, and their respective nominees harmless from any liability arising directly or indirectly from their status as a mere record holder of Financial Assets in the Custody Account. Financial Assets accepted by Custodian on behalf of a Portfolio under this Agreement shall be in a form and delivered in a manner consistent with Local Practice.

13. Instructions.

Unless otherwise expressly provided, all Instructions shall continue in full force and effect until canceled or superseded. Any Instructions delivered to Bank by telephone shall promptly thereafter be confirmed in writing by an Authorized Person (which confirmation may bear the facsimile signature of such Person), but Cus-tomer shall hold Bank harmless for the failure of an Authorized Person to send such confirmation in writing, the failure of such confirmation to conform to the telephone instructions received or Bank's failure to produce such confirmation at any subsequent time. Bank shall notify Customer as soon as reasonably practicable if Bank does not receive written confirmation or if such written confirmation fails to conform to the telephone Instructions received. Either party may electronically record any Instructions given by telephone, and any other telephone discussions with respect to the Custody Account. Customer shall be responsible for safeguarding any testkeys, identification codes or other security devices which Bank shall make available to Customer or its Authorized Persons.

14. Standard of Care; Liabilities.

(a) Bank shall exercise reasonable care and diligence in carrying out all of its duties and obligations under this Agreement, and shall be liable to Customer for any and all claims, liabilities, losses, damages, fines, penalties, and expenses, including out-of-pocket and incidental expenses and reasonable attorneys’ fees (“Losses”) suffered or incurred by Customer resulting from failure of Bank (including any branch thereof, regardless of location) to exercise such reasonable care and diligence. Bank shall be liable to Customer in respect of such Losses to the same extent that Bank would be liable to Customer if Bank were holding the affected Assets in New York City, but only to the extent of Customer’s direct damages, to be determined based on the market value of the property which is the subject of the Loss at the date of discovery of such Loss by Customer and without reference to any special conditions or circumstances.

(b) Bank shall be liable to Customer for all Losses resulting from the action or inaction of any Subcustodian to the same extent that Bank would be liable to Customer if Bank were holding the affected Assets in New York City, and such action or inaction were that of the Bank or the fraud or willful default of such Subcustodian.

(c) As long as and to the extent that it has exercised reasonable care and acted in good faith, Bank shall not be responsible for:

(i) the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement; it being understood that Bank shall be deemed to have exercised reasonable care in respect of this subparagraph (i) if Financial Assets are received by Bank in accordance with Local Practice for the particular Financial Asset in question;

(ii) any act, omission, default or for the solvency of any broker or agent which it or a Subcustodian appoints and which is not a branch or Affiliate of the Bank; it being understood that Bank or a Subcustodian shall be deemed to have exercised reasonable care in respect of this subparagraph (ii) if it exercised reasonable care in the selection and continued retention of any such broker or agent; or

(iii) the insolvency of any Subcustodian which is not a branch or Affiliate of Bank; it being understood that Bank shall be deemed to have exercised reasonable care in respect of this subparagraph (iii) where Bank used reasonable care in the monitoring of a Subcustodian’s financial condition as reflected in its most recently published financial statements and other publicly available financial information.

(d) Neither Bank nor any Subcustodian shall be liable for the acts or omissions of any Eligible Securities Depository (or, for purposes of clarity, any domestic securities depository). In the event Customer incurs a loss due to the negligence, bad faith, willful misconduct or insolvency of an Eligible Securities Depository, Bank shall make reasonable endeavors to seek recovery from the Eligible Securities Depository.

(e) In no event shall Bank incur liability hereunder if Bank or any Subcustodian, or any nominee of Bank or any Subcustodian (each a “Person”), is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed, by reason of:

(i) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction; or

(ii) events or circumstances beyond the reasonable control of the applicable Person, including, without limitation, the interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, natural disasters, or other similar events or acts, unless, in each case, such delay or nonperformance is caused by (A) the negligence, misfeasance or misconduct of the applicable Person, or (B) a malfunction or failure of equipment operated or utilized by the applicable Person other than a malfunction or failure beyond such Person’s control and which could not be reasonably anticipated or prevented by such Person (each such provision, event or circumstance being a “Force Majeure Event”).

Bank shall notify Customer as soon as reasonably practicable of any material performance delay or non-performance in accordance with this clause (e).

(f) In no event shall Customer incur liability to Bank if it is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed, by reason of a Force Majeure Event.

(g) Customer shall indemnify and hold Bank and its directors, officers, agents and employees (collectively the “Indemnitees”) harmless from and against any and all Losses that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any Instructions or other directions upon which Bank is authorized to rely pur-suant to the terms of this Agreement, or for any action taken or omitted by it in good faith, provided that such action or omission is consistent with the standard of care applicable to Bank under this Agreement and the Indemnitees have not acted with negligence or bad faith or engaged in fraud or willful misconduct in connection with the Losses in question.

(h) In performing its obligations hereunder, Bank may rely on the genuineness of any document which it believes in good faith to have been validly executed, and, subject to the following sentence, shall be entitled to rely on and may act upon advice of counsel (which may be counsel for Customer) on all matters, and shall be without liability for action reasonably taken or omitted pursuant to such advice. If Customer disputes an action or omission by Bank within 45 days of when Customer became aware or reasonably should have become aware of such action or omission, Bank shall be entitled to rely on and may act upon advice of “independent legal counsel” (as defined by rule 0-1(6) of the Investment Company Act of 1940) to Customer or such other counsel that is mutually acceptable to Customer and Bank and shall be without liability for action reasonably taken or omitted pursuant to such advice.

(i) Customer shall pay for and hold Bank harmless from any liability or loss resulting from the imposition or assessment of any taxes or other governmental charges, and any related expenses (including, without limitation, penalties, interest or additions to tax due), with respect to income from or Assets in the Accounts, provided that Bank has complied with the standard of care set forth in Section 14(a) of this Agreement (it being understood that while Bank’s failure to comply with such standard of care shall constitute a breach of this Agreement, Bank shall have no liability for taxes or governmental charges and related expenses imposed or assessed with respect to such Assets prior to such breach or that would have been imposed or assessed even absent such breach).

(j) Bank need not maintain any insurance for the benefit of Customer.

(k) Without limiting the foregoing, Bank shall not be liable for any Loss which results from (i) the general risk of investing, or (ii) investing or holding Assets in a particular country including, but not limited to, losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; currency restrictions, devaluations or fluctuations; and market conditions which prevent the orderly execution of securities transactions or affect the value of Assets.

(l) Consistent with and without limiting the application of the foregoing paragraphs of this Section 14, it is specifically acknowledged that Bank shall have no duty or responsibility to:

(i) question Instructions or make any suggestions to Customer or an Authorized Person regarding such Instructions that Bank believes in good faith to have been given by Authorized Persons or which are transmitted with proper testing or authentication pursuant to terms and conditions the Bank may specify;

(ii) supervise or make recommendations with respect to investments or the retention of Financial Assets;

(iii) advise Customer or an Authorized Person regarding any default in the payment of principal or income of any security other than as provided in Section 8(c) hereof;

(iv) evaluate or report to Customer or an Authorized Person regarding the financial condition of any broker, agent or other party to which Bank receives an Instruction to deliver Financial Assets;

(v) except for trades settled at DTC where the broker provides DTC trade confirmation and Customer provides for Bank to receive the trade instruction, review or reconcile trade confirmations received from brokers. Customer or its Authorized Persons issuing Instructions shall bear any responsibility to review such confirmations against Instructions issued to and statements issued by Bank;

(vi) advise Customer or an Authorized Person regarding information (i) held on a confidential basis by an officer, director or employee of Bank (or any Affiliate of Bank) and (ii) obtained by such person in connection with the provision of services or other activities unrelated to global custody; and

(vii) advise Customer or an Authorized Person promptly regarding corporate action information obtained by an officer, director or employee of Bank (or any Affiliate of Bank) who is not engaged directly in the provision of global custody services.

(m) Customer authorizes Bank to act hereunder notwithstanding that Bank or any of its divisions or Affiliates may have a material interest in a transaction, or circumstances are such that Bank may have a potential conflict of duty or interest including the fact that Bank or any of its Affiliates may provide broker-age services to other customers, act as financial advisor to the issuer of Financial Assets, act as a lender to the issuer of Financial Assets, act in the same transaction as agent for more than one customer, have a material interest in the issue of Financial Assets, or earn profits from any of the activities listed herein; provided that none of such services or actions would violate applicable laws or regulations.

(n) Upon the occurrence of any event which causes or may cause any Loss to the other party, each of Customer and Bank shall (and Bank shall cause each applicable Subcustodian to) use all commercially reasonable efforts and take all reasonable steps under the circumstances to mitigate the effects of such event and to avoid continuing harm to the other party. For this purpose, the obligations of Customer and Bank to mitigate Losses (or potential Losses) hereunder shall include (but shall not be limited to) the periodic review and reconciliation by Bank and Customer (or Authorized Persons) of statements provided to Customer under Section 10 of this Agreement; provided, however, that Bank's obligations to Customer with respect to any transaction covered by a given statement shall be reduced to the extent that Bank's ability to mitigate damages related to such transaction has been compromised by Customer’s failure to object to such statement within 180 days of Customer’s receipt thereof.

15. Bank Fees and Expenses.

Customer agrees to pay Bank for its services under this Agreement such amount as may be mutually agreed upon in writing. Customer agrees to reimburse Bank for its reasonable out-of-pocket or incidental expenses (including, without limitation, legal fees) incurred on behalf of Customer, provided that, in respect of such expenses, Bank has acted in conformity with the standard of care set forth in Section 14 hereof. Bank shall obtain Customer’s prior approval, which approval shall not be unreasonably withheld, of out-of-pocket or incidental expenses that Bank reasonably expects to exceed $10,000 or that approaches $10,000 during the process of incurring such expenses. In the latter case, Customer shall not withhold its approval on the ground that Bank had not obtained Customer’s approval prior to beginning to incur such expenses if Bank believed in good faith that the subject expenses would not exceed $10,000. Subject to the foregoing, Bank shall have a lien on and is authorized to charge or otherwise enforce its rights as lienholder against Assets in any Accounts of the Customer for any amount owing in respect of such Account by the Customer to the Bank under any provision of this Agreement.

16. Miscellaneous.

(a) Foreign Exchange Transactions Other Than as Principal. Upon receipt of Instructions, Bank shall settle foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of a Portfolio with such currency brokers or banking institutions as Customer may determine and direct pursuant to Instructions. Bank shall be responsible for the transmission of cash and instructions to and from the currency broker or banking institution with which the contract or option is made, the safekeeping of all certificates and other documents and agreements evidencing or relating to such foreign exchange transactions and the maintenance of proper records in accordance with this Agreement. Bank shall have no duty with respect to the selection of currency brokers or banking institutions with which Customer deals on behalf of its Portfolio or, as long as Bank acts in accordance with Instructions, for the failure of such brokers or banking institutions to comply with the terms of any contract or option.

(b) Foreign Exchange Transactions as Principal. Bank shall not be obligated to enter into foreign exchange transactions as principal. However, if and to the extent that Bank makes available to Customer its services as principal in foreign exchange transactions, upon receipt of Instructions, Bank shall enter into foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of Customer on behalf of its Portfolio with Bank as principal. Instructions may be issued with respect to such contracts but Bank may establish rules or limitations concerning any foreign exchange facility made available. Bank shall be responsible for the selection of currency brokers or banking institutions (which may include Affiliates of Bank and Subcustodians) and the failure of such currency brokers or banking institutions to comply with the terms of any contract or option.

(c) Certification of Residency, etc. Customer certifies that it is a resident of the United States and shall notify Bank of any changes in residency. Bank may rely upon this certification or the certification of such other facts as may be required to administer Bank's obligations hereunder. Customer shall indemnify Bank against all losses, liability, claims or demands arising directly or indirectly from any such certifications.

(d) Custodian’s Records; Access to Records. Bank shall provide any assistance reasonably requested by Customer in the preparation of reports to Customer’s shareholders and others, audits of accounts, and other ministerial matters of like nature. Bank shall maintain complete and accurate records with respect to Financial Assets and other Assets held for the account of Customer as required by the rules and regulations of the U.S. Securities and Exchange Commission applicable to investment companies registered under the 1940 Act. All such books and records maintained by Bank shall be made available to Customer upon request and shall, where required to be maintained by Rule 31a-1 under the 1940 Act, be preserved for the periods prescribed in Rule 31a-2 under the 1940 Act. Bank shall allow Customer's independent public accountant reasonable access to the records of Bank relating to Financial Assets as is required in connection with their examination of books and records pertaining to Customer's affairs. Subject to restrictions under applicable law, Bank shall also obtain an undertaking to permit Customer's independent public accountants reasonable access to the records of any Subcustodian which has physical possession of any Financial Assets as may be required in connection with the examination of Customer's books and records. Upon reasonable request of Customer, Bank shall provide Customer with a copy of Bank’s reports prepared in compliance with the requirements of Statement of Auditing Standards No. 70 issued by the American Institute of Certified Public Accountants, as it may be amended from time to time (commonly referred to as a “SAS 70 report”). Bank shall use commercially reasonable efforts to obtain and furnish Customer with such similar reports as Customer may reasonably request with respect to each Subcustodian holding Assets of Customer. Except as respects Bank’s SAS 70 Report, as to which there shall be no charge, the Customer shall pay reasonable expenses of the Bank and any Subcustodians under this provision. Bank shall use commercially reasonable efforts to provide Customer and agents with such reports as the Customer may reasonably request or otherwise reasonably require to fulfill its duties under rule 38a-1 of the 1940 Act, and, in any case, provide Customer with at least the same level of such reporting as Bank furnishes to its other mutual fund clients.

(e) Confidential Information. The parties hereto agree that each shall treat confidentially all confidential information provided by each party to the other regarding its business and operations in accordance with this Agreement and represent that each has implemented controls that are reasonably designed to achieve the purposes of this section. All confidential information provided by a party hereto shall be used by the other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any affiliated division or entity or third party in any form without the prior written consent of such providing party. Confidential information for purposes hereof shall include information traditionally recognized as confidential, such as financial information, strategies, security practices, portfolio holdings, portfolio trades, product and business proposals, business plans, and the like. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, that is generally furnished to third parties by the providing party without confidentiality restriction, or that is required to be disclosed by any bank examiner of Bank or any Subcustodian, any auditor of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation. For this purpose, Customer and any Authorized Person shall be permitted to disclose any information provided by Bank hereunder to the U.S. Securities and Exchange Commission (or its staff) in connection with any inspection or examination or other action or proceeding. If a party becomes aware that it or its agents have breached the confidentiality obligations under this Section 16(e), it will promptly notify the other party in writing of the nature and extent of such breach.

(f) Governing Law; Successors and Assigns; Immunity; Captions. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK and shall not be assigned by either party, but shall bind the successors in interest of Customer and Bank. To the extent that in any jurisdiction Customer or Bank may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, Customer or Bank, as the case may be, irrevocably shall not claim, and it hereby waives, such immunity. The captions given to the sections and subsections of this Agreement are for convenience of reference only and are not to be used to interpret this Agreement.

(g) Entire Agreement. This Agreement consists exclusively of this document (including Appendix A and Schedules A and B hereof). There are no other provisions hereof and this Agreement supersedes any other agreements, whether written or oral, between the parties. Any amendment hereto must be in writing, executed by both parties.

(h) Severability. In the event that one or more provisions hereof are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions shall not in any way be affected or impaired.

(i) Waiver. Except as otherwise provided herein, no failure or delay on the part of either party in exercising any power or right hereunder operates as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right. No waiver by a party of any provision hereof, or waiver of any breach or default, is effective unless in writing and signed by the party against whom the waiver is to be enforced.

(j) Representations and Warranties.

(i) Customer hereby represents and warrants to Bank that: (A) it has full power and authority to deposit and control the Financial Assets and cash deposited in the Accounts; (B) it has all necessary authority to use Bank as its custodian; (C) this Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms; (D) it has taken all necessary action to authorize the execution and delivery hereof.

(ii) Bank hereby represents and warrants to Customer that: (A) it has the full power and authority to perform its obligations hereunder, (B) this Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms; and (C) that it has taken all necessary action to authorize the execution and delivery hereof.

(k) Notices. All notices hereunder shall be effective when actually received. Any notices or other communications which may be required hereunder are to be sent to the parties at the following addresses or such other addresses as may subsequently be given to the other party in writing: (a) Bank: JPMorgan Chase Bank, N.A., 1 Chase Manhattan Plaza, New York, N.Y. 10081, Attention: _____________, Vice President, Worldwide Securities Services, Investment Management Group; and (b) Customer: [Name of Customer], c/o Capital Research and Management Company, Attention: Carmelo Spinella, Senior Vice President, 135 South State College Boulevard, Brea, CA 92821-5804; with a copy to: Donald H. Rolfe, Counsel, Capital Research and Management Company, 333 S. Hope Street, 55^th Floor, Los Angeles, CA 90071.

(l) Termination. This Agreement may be terminated as to one or more Portfolios by Customer or Bank by giving sixty (60) days’ written notice to the other, provided that such notice to Bank shall specify the names of the persons to whom Bank shall deliver the Assets belonging to the affected Portfolios in the Accounts. If notice of termination is given by Bank, Customer shall, within sixty (60) days following receipt of the notice, deliver to Bank Instructions specifying the names of the persons to whom Bank shall deliver the Assets belonging to the affected Portfolios. In either case Bank shall deliver the Assets belonging to the affected Portfolios to the persons so specified, after deducting any uncontested amounts which Bank determines in good faith to be owed to it under Section 15. Customer shall reimburse Bank promptly for all reasonable out-of-pocket expenses it incurs in delivering Assets upon termination by Customer. Termination shall not affect any of the liabilities either party owes to the other arising under this Agreement prior to such termination. If within sixty (60) days following receipt of a notice of termination by Bank, Bank does not receive Instructions from Customer specifying the names of the persons to whom Bank shall deliver the Assets belonging to the affected Portfolios, Bank, at its election, may deliver such Assets to a bank or trust company doing business in the State of New York to be held and disposed of pursuant to the provisions hereof, or to Authorized Persons, or may continue to hold such Assets until Instructions are provided to Bank. For avoidance of doubt, each Customer, Portfolio or the Bank may terminate this Agreement pursuant to its provisions and the Agreement shall survive such termination in respect of the remaining Customers and Portfolios that have not so terminated or been terminated.

(m) Representative Capacity; Non-recourse Obligations. A COPY OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF EACH CUSTOMER IS ON FILE WITH THE SECRETARY OF STATE OF THE STATE OF THE CUSTOMER’S FORMATION, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE TRUSTEES OF ANY CUSTOMER AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF EACH CUSTOMER’S RESPECTIVE PORTFOLIOS. BANK AGREES THAT NO SHAREHOLDER, TRUSTEE, OFFICER OR PARTNER OF ANY FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY CUSTOMER ARISING OUT OF THIS AGREEMENT.

(n) Several Obligations of each Customer and Portfolio. WITH RESPECT TO ANY OBLIGATIONS OF A CUSTOMER ON BEHALF OF ANY OF ITS PORTFOLIOS ARISING OUT OF THIS AGREEMENT, BANK SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY SUCH OBLIGATION SOLELY TO THE ASSETS AND PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH THAT CUSTOMER HAD SEPARATELY CONTRACTED WITH BANK BY SEPARATE WRITTEN AGREEMENT WITH RESPECT TO EACH OF ITS PORTFOLIOS. THE RIGHTS AND BENEFITS TO WHICH A GIVEN PORTFOLIO IS ENTITLED HEREUNDER SHALL BE SOLELY THOSE OF SUCH PORTFOLIO AND NO OTHER PORTFOLIO HEREUNDER SHALL RECEIVE SUCH BENEFITS.

(o) Information Concerning Deposits at Bank. Bank’s London Branch is a member of the United Kingdom Deposit Protection Scheme (the “Scheme”) established under Banking Act 1987 (as amended). The Scheme provides that in the event of Bank’s insolvency, payments may be made to certain customers of Bank’s London Branch. Payments under the Scheme are limited to 90% of a depositor’s total cash deposits subject to a maximum payment to any one depositor of £18,000 (or euro 20,000 if greater). Most deposits denominated in sterling and other European Economic Area Currencies and euros made with Bank within the United Kingdom are covered. Further details of the Scheme are available on request. Any cash so deposited with Bank’s London Branch will be payable exclusively by Bank’s London Branch in the applicable currency, subject to compliance with applicable law, including, without limitation, any restrictions on transactions in the applicable currency imposed by the country of the applicable currency.

(p) Information Relating to Divisions. Upon written request by Customer, the Bank shall use commercially reasonable efforts to provide information regarding portfolio holdings, portfolio trades and proxy voting in a format that is both technically practicable and reasonably acceptable to Customer so as to allow each investment division of Capital Research and Management Company to receive solely such information as is relevant to its own operations. Customer shall pay reasonable expenses of Bank arising from this section, provided that estimates of such expenses are approved by the Customer before the expenses are incurred.

IN WITNESS WHEREOF, each of the Customers and Bank have executed this Agreement as of the date first-written above. Execution of this Agreement by more than one Customer shall not create a contractual or other obligation between or among such Customers (or between or among their respective Portfolios) and this Agreement shall constitute a separate agreement between Bank and each Customer on behalf of itself or each of its Portfolios.

EACH OF THE CUSTOMERS LISTED ON

APPENDIX A ATTACHED HERETO, ON

BEHALF OF ITSELF OR ITS LISTED PORTFOLIOS

By: CAPITAL RESEARCH AND MANAGEMENT COMPANY

By:____________________________________

Name: Carmelo Spinella

Title: Senior Vice President

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

By:________________________________________

Name:

Title:

APPENDIX A

CUSTOMERS AND PORTFOLIOS

Dated as of December 21, 2006

The following is a list of Customers and their respective Portfolios for which Bank shall serve under this Agreement.

CUSTOMER PORTFOLIO:	EFFECTIVE AS OF:
AMCAP Fund, Inc.	12/26/2006
EuroPacific Growth Fund	12/26/2006
New Perspective Fund, Inc.	12/26/2006
New World Fund, Inc.	12/26/2006
American Mutual Fund, Inc.	12/26/2006
Capital World Growth and Income Fund, Inc.	12/26/2006
The Investment Company of America	12/26/2006
Capital Income Builder, Inc.	12/26/2006
The Income Fund of America, Inc.	12/26/2006
American Balanced Fund, Inc.	12/26/2006
American High Income Trust	12/26/2006
The Bond Fund of America, Inc.	12/26/2006
Capital World Bond Fund, Inc.	12/26/2006
Intermediate Bond Fund of America	12/26/2006
U.S. Government Securities Fund	12/26/2006
American High-Income Municipal Bond Fund, Inc.	12/26/2006
Limited Term Tax-Exempt Bond Fund of America	12/26/2006
The Tax-Exempt Bond Fund of America, Inc.	12/26/2006
The Tax-Exempt Fund of California	12/26/2006
The Cash Management Trust of America	12/26/2006
The Tax-Exempt Money Fund of America	12/26/2006
The U.S. Treasury Money Fund of America	12/26/2006
Endowments - Equity Portfolio	12/26/2006
Endowments - Fixed Income Portfolio	12/26/2006
Short-Term Bond Fund of America, Inc.	12/26/2006

IN WITNESS WHEREOF, each of the Customers and Bank have executed this Appendix A as of the date first-written above. Execution of this Appendix A by more than one Customer shall not create a contractual or other obligation between or among such Customers (or between or among their respective Portfolios) and this Appendix shall constitute a separate agreement between Bank and each Customer on behalf of itself or each of its Portfolios.

EACH OF THE CUSTOMERS LISTED ON

APPENDIX A ATTACHED HERETO, ON

BEHALF OF ITSELF OR ITS LISTED PORTFOLIOS

By: CAPITAL RESEARCH AND MANAGEMENT COMPANY

By:____________________________________

Name:

Title:

JPMORGAN CHASE BANK, N.A.

By:________________________________________

Name:

Title:

SCHEDULE A

SUBCUSTODIANS

COUNTRY	SUB-CUSTODIAN	CASH CORRESPONDENT BANK
ARGENTINA	HSBC Bank Argentina S.A. Florida 201, 7th Floor 1005 Buenos Aires ARGENTINA	HSBC Bank Argentina S.A. Buenos Aires
AUSTRALIA	JPMorgan Chase Bank, N.A.** Level 37 AAP Center 259, George Street Sydney NSW 2000 AUSTRALIA	Australia and New Zealand Banking Group Ltd. Melbourne
AUSTRIA	Bank Austria Creditanstalt AG Julius Tandler Platz - 3 A-1090 Vienna AUSTRIA	J.P. Morgan AG Frankfurt
BAHRAIN	HSBC Bank Middle East Limited 1st Floor, Building No 2505, Road No 2832 Al Seef 428 BAHRAIN	National Bank of Bahrain Manama
BANGLADESH	Standard Chartered Bank 18-20 Motijheel C.A Box 536 Dhaka-1000 BANGLADESH	Standard Chartered Bank Dhaka
BELGIUM	Fortis Bank (Nederland) N.V. Rokin 55 1012KK Amsterdam THE NETHERLANDS	J.P. Morgan AG Frankfurt
BERMUDA	The Bank of Bermuda Limited 6 Front Street Hamilton HMDX BERMUDA	The Bank of Bermuda Limited Hamilton
BOTSWANA	Barclays Bank of Botswana Limited Barclays House, Khama Crescent Gaborone BOTSWANA	Barclays Bank of Botswana Limited Gaborone
BRAZIL	HSBC Bank Brasil S.A. Banco Multiplo Avenida Brigadeiro Faria Lima 3064, 2nd Floor Sao Paulo, SP 01451-000 BRAZIL	HSBC Bank Brasil S.A. Banco Multiplo Sao Paulo
BULGARIA	ING Bank N.V. Sofia Branch 12 Emil Bersinski Street Ivan Vazov Region 1408 Sofia BULGARIA	ING Bank N.V. Sofia
CANADA	Canadian Imperial Bank of Commerce Commerce Court West Security Level Toronto, Ontario M5L 1G9 CANADA	Royal Bank of Canada Toronto
	Royal Bank of Canada 200 Bay Street, Suite 1500 15th Floor Royal Bank Plaza, North Tower Toronto Ontario M5J 2J5 CANADA	Royal Bank of Canada Toronto
CHILE	Citibank, N.A. Av. Andres Bello 2687 5th Floor Las Condes Santiago CHILE	Citibank, N.A Santiago
CHINA - SHANGHAI	The Hongkong and Shanghai Banking Corporation Limited 35/F, HSBC Tower 1000 Lujiazui Ring Road Pudong Shanghai 200120 THE PEOPLE'S REPUBLIC OF CHINA	JPMorgan Chase Bank, N.A. New York (for B-Share Market) The Hongkong and Shanghai Banking Corporation Limited Shanghai (for A-Share Market)
CHINA - SHENZHEN	The Hongkong and Shanghai Banking Corporation Limited 35/F, HSBC Tower 1000 Lujiazui Ring Road Pudong Shanghai 200120 THE PEOPLE'S REPUBLIC OF CHINA	JPMorgan Chase Bank, N.A. Hong Kong (for B-Share Market) The Hongkong and Shanghai Banking Corporation Limited Shanghai (for A-Share Market)
COLOMBIA	Santander Investment Trust Colombia S.A. Calle 12, No. 7-32, Piso 3 Bogota COLOMBIA	Santander Investment Trust Colombia S.A. Bogota
CROATIA	Privredna banka Zagreb d.d. Savska c.28 10000 Zagreb CROATIA	Privredna banka Zagreb d.d. Zagreb
CYPRUS	Marfin Popular Bank Public Company Ltd. 154 Limassol Avenue P.O. Box 22032 CY-1598 Nicosia CYPRUS	Marfin Popular Bank Public Company Ltd. Nicosia
CZECH REPUBLIC	HVB Bank Czech Republic a.s. Revolucni 7 110 05 Prague 1 CZECH REPUBLIC	Ceskoslovenska obchodni banka, a.s. Prague
DENMARK	Danske Bank A/S 2-12 Holmens Kanal DK 1092 Copenhagen K DENMARK	Nordea Bank Danmark A/S Copenhagen
EGYPT	Citibank, N.A. 4 Ahmed Pasha Street Garden City Cairo EGYPT	Citibank, N.A. Cairo
ESTONIA	Hansabank Liivalaia 8 EE0001 Tallinn ESTONIA	Esti Uhispank Tallinn
FINLAND	Skandinaviska Enskilda Banken AB (publ) Unioninkatu 30 FIN-00101 Helsinki FINLAND	J.P. Morgan AG Frankfurt
FRANCE	BNP Paribas Securities Services S.A. Ref 256 BP 141 3, Rue D'Antin 75078 Paris Cedex 02 FRANCE	J.P. Morgan AG Frankfurt
	Societe Generale 50 Boulevard Haussman 75009 Paris FRANCE	J.P. Morgan AG Frankfurt
GERMANY	Deutsche Bank AG Alfred-Herrhausen-Allee 16-24 D-65760 Eschborn GERMANY	J.P. Morgan AG Frankfurt
	J.P. Morgan AG#** Junghofstrasse 14 60311 Frankfurt am Main GERMANY # For local German custody clients only.	J.P. Morgan AG Frankfurt
GHANA	Barclays Bank of Ghana Limited Barclays House, High Street Accra GHANA	Barclays Bank of Ghana Limited Accra
GREECE	HSBC Bank plc Messogion 109-111 11526 Athens GREECE	J.P. Morgan AG Frankfurt
HONG KONG	The Hongkong and Shanghai Banking Corporation Limited 36th Floor, Sun Hung Kai Centre 30 Harbour Road Wan Chai HONG KONG	JPMorgan Chase Bank, N.A. Hong Kong
HUNGARY	Deutsche Bank Zrt. Hold utca 27 H-1054 Budapest HUNGARY	ING Bank Rt. Budapest
ICELAND	Glitnir banki hf. Kirkjusandur 2 155 Reykjavik ICELAND	Glitnir banki hf. Reykjavik
INDIA	The Hongkong and Shanghai Banking Corporation Limited Sudam Kalu Ahire Marg, Worli Mumbai 400 030 INDIA	The Hongkong and Shanghai Banking Corporation Limited Mumbai
	Standard Chartered Bank 23-25 Mahatma Ghandi Road Mumbai 400 001 INDIA	Standard Chartered Bank Mumbai
INDONESIA	The Hongkong and Shanghai Banking Corporation Limited Menara Mulia 19th Floor Jalan Jendral Gatot Subroto Kav 9-11 Jakarta 12930 INDONESIA	The Hongkong and Shanghai Banking Corporation Limited Jakarta
IRELAND	Bank of Ireland New Century House Mayor Street Lower International Financial Services Centre Dublin 1 IRELAND	J.P. Morgan AG Frankfurt
ISRAEL	Bank Leumi le-Israel B.M. 35, Yehuda Halevi Street 61000 Tel Aviv ISRAEL	Bank Leumi le-Israel B.M. Tel Aviv
ITALY	Banca Intesa Spa 6, Piazza della Scala 20121 Milan ITALY	J.P. Morgan AG Frankfurt
IVORY COAST	Societe Generale de Banques en Cote d’Ivoire 5 et 7, Avenue J. Anoma - 01 B.P. 1355 Abidjan 01 IVORY COAST	Societe Generale Paris
JAMAICA	FirstCaribbean International Securities Limited 23-27 Knutsford Blvd. Kingston 10 JAMAICA	FirstCaribbean International Securities Limited Kingston
RESTRICTED SERVICE ONLY. PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER INFORMATION.
JAPAN	Mizuho Corporate Bank, Limited 6-7 Nihonbashi-Kabutocho Chuo-Ku Tokyo 103 JAPAN	JPMorgan Chase Bank, N.A. Tokyo
	The Bank of Tokyo-Mitsubishi UFJ, Limited 3-2 Nihombashi Hongkucho 1-chome Chuo-ku Tokyo 103 JAPAN	JPMorgan Chase Bank, N.A. Tokyo
JORDAN	Arab Bank Plc P O Box 950544-5 Amman Shmeisani JORDAN	Arab Bank Plc Amman
KAZAKHSTAN	SB HSBC Bank Kazakhstan JSC 43 Dostyk Avenue Almaty 050010 KAZAKHSTAN	SB HSBC Bank Kazakhstan JSC Almaty
KENYA	Barclays Bank of Kenya Limited c/o Barclaytrust Investment Services & Limited Mezzanine 3, Barclays Plaza, Loita Street Nairobi KENYA	Barclays Bank of Kenya Limited Nairobi
KUWAIT	HSBC Bank Middle East Limited G/1/2 Floors Kharafi Tower, Qibla Area Osama Bin Munkez Street Safat 13017 KUWAIT	HSBC Bank Middle East Limited Safat
LATVIA	Hansabanka Balasta dambis 1a Riga, LV-1048 LATVIA	Hansabanka Riga
LEBANON	HSBC Bank Middle East Limited HSBC Main Building Riad El Solh, P.O. Box 11-1380 1107-2080 Beirut LEBANON	JPMorgan Chase Bank, N.A. New York
LITHUANIA	SEB Vilniaus Bankas 12 Gedimino pr. LT 2600 Vilnius LITHUANIA	SEB Vilniaus Bankas Vilnius
LUXEMBOURG	Fortis Banque Luxembourg S.A. 50 Avenue J.F. Kennedy L-2951 LUXEMBOURG	J.P. Morgan AG Frankfurt
MALAYSIA	HSBC Bank Malaysia Berhad 2 Leboh Ampang 50100 Kuala Lumpur MALAYSIA	HSBC Bank Malaysia Berhad Kuala Lumpur
MALTA	HSBC Bank Malta p.l.c. 233 Republic Street Valletta VLT 05 MALTA	HSBC Bank Malta p.l.c. Valletta
MAURITIUS	The Hongkong and Shanghai Banking Corporation Limited 5/F Les Cascades Building Edith Cavell Street Port Louis MAURITIUS	The Hongkong and Shanghai Banking Corporation Limited Port Louis
MEXICO	Banco Nacional de Mexico, S.A. Act. Roberto Medellin No. 800 3er Piso Norte Colonia Santa Fe 01210 Mexico, D.F. MEXICO	BBVA Bancomer, S.A. Mexico, D.F.
MOROCCO	Attijariwafa Bank S.A. 163 avenue Hassan II Casablanca 20000 MOROCCO	Attijariwafa Bank S.A. Casablanca
NAMIBIA	Standard Bank Namibia Limited Mutual Platz Cnr. Stroebel and Post Streets P.O.Box 3327 Windhoek NAMIBIA	Standard Bank of Namibia Limited Windhoek
NETHERLANDS	KAS Bank N.V. Spuistraat 172 1012 VT Amsterdam NETHERLANDS	J.P. Morgan AG Frankfurt
NEW ZEALAND	National Australia Bank Limited National Nominees Limited Level 2 BNZ Tower 125 Queen Street Auckland NEW ZEALAND	Westpac Banking Corporation Wellington
NIGERIA	Stanbic Bank Nigeria Limited Plot 688 Amodu Tijani Street Victoria Island Lagos NIGERIA	The Standard Bank of South Africa Limited Johannesburg
RESTRICTED SERVICE ONLY. PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER INFORMATION.
NORWAY	DnB NOR Bank ASA Stranden 21 PO Box 1171 Sentrum N-0107 Oslo NORWAY	Nordea Bank Norge ASA Oslo
OMAN	HSBC Bank Middle East Limited Bait Al Falaj Main Office Ruwi PC 112 OMAN	HSBC Bank Middle East Limited Ruwi
PAKISTAN	Citibank, N.A. AWT Plaza I.I. Chundrigar Road Karachi 74200 PAKISTAN	Citibank, N.A. Karachi
	Deutsche Bank AG Unitowers I.I. Chundrigar Road Karachi 74200 PAKISTAN	Deutsche Bank AG Karachi
	Standard Chartered Bank Box 4896 Ismail Ibrahim Chundrigar Road Karachi 74000 PAKISTAN	Standard Chartered Bank Karachi
PANAMA	HSBC Bank (Panama) S.A. Plaza HSBC Building, 9th Floor Aquilino de la Guardia Street and 47th Street Panama City PANAMA	HSBC Bank (Panama) S.A. Panama City
PERU	Citibank del Peru S.A. Camino Real 457 Torre Real - 5th Floor San Isidro, Lima 27 PERU	Banco de Credito del Peru Lima
PHILIPPINES	The Hongkong and Shanghai Banking Corporation Limited 30/F Discovery Suites 25 ADB Avenue Ortigas Center Pasig City, Manila PHILIPPINES	The Hongkong and Shanghai Banking Corporation Limited Manila
POLAND	Bank Handlowy w. Warszawie S.A. ul. Senatorska 16 00-923 Warsaw 55 POLAND	Bank Rozwoju Eksportu S.A. Warsaw
PORTUGAL	Banco Espirito Santo, S.A 7th floor Rua Castilho, 26 1250-069 Lisbon PORTUGAL	J.P. Morgan AG Frankfurt
QATAR	HSBC Bank Middle East Limited 810 Abdulla Bin Jassim Street P. O. Box 57 Doha QATAR	HSBC Bank Middle East Limited Doha
ROMANIA	ING Bank N.V. 13-15 Kiseleff Avenue 011342 Bucharest 1 ROMANIA	ING Bank N.V. Bucharest
RUSSIA	J.P. Morgan Bank International** (Limited Liability Company) Building 2/1, 8th floor Paveletskaya Square 113054 Moscow RUSSIA	JPMorgan Chase Bank, N.A. New York A/C JPMorgan Chase Bank London (USD NOSTRO Account)
	ING Bank (Eurasia) ZAO (Closed Joint Stock Company) 36 Krasnoproletarskaya ulitsa 127473 Moscow RUSSIA	JPMorgan Chase Bank, N.A. New York A/C JPMorgan Chase Bank London (USD NOSTRO Account)
RESTRICTED SERVICE ONLY. PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER INFORMATION.
SAUDI ARABIA	The Saudi British Bank P.O. Box 9084 Riyadh 11413 SAUDIA ARABIA	The Saudi British Bank Riyadh
SERBIA	HVB Bank Serbia a Montenegro a.d. Rajiceva 27-29 11000 Belgrade SERBIA AND MONTENEGRO	HVB Bank Serbia a Montenegro a.d. Belgrade
SINGAPORE	DBS Bank Ltd. 180 Clemenceau Avenue #03-01 Haw Par Centre 239922 SINGAPORE	Oversea-Chinese Banking Corporation Singapore
SLOVAK REPUBLIC	HVB Bank Slovakia a.s. Mostova 6 SK-814 16 Bratislava SLOVAK REPUBLIC	Vseobecno Uverova Banka S.A. Bratislava
SLOVENIA	Bank Austria Creditanstalt d.d. Ljubljana Smartinska 140 SI-1000 Ljubljana SLOVENIA	Bank Austria Creditanstalt d.d. Ljubljana Ljubljana
SOUTH AFRICA	FirstRand Bank Limited 1 Mezzanine Floor, 3 First Place, Bank City Cnr Simmonds and Jeppe Streets Johannesburg 2001 SOUTH AFRICA	The Standard Bank of South Africa Limited Johannesburg
SOUTH KOREA	Standard Chartered First Bank Korea Limited 100 KongPyung-dong ChongRo-Gu Seoul 110-702 SOUTH KOREA	Standard Chartered First Bank Korea Limited Seoul
SPAIN	Santander Investment, S.A. Ciudad Grupo Santander Avenida de Cantabria, s/n Edificio Ecinar, planta baja Boadilla del Monte 28660 Madrid SPAIN	J.P. Morgan AG Frankfurt
SRI LANKA	The Hongkong and Shanghai Banking Corporation Limited 24 Sir Baron Jayatillaka Mawatha Colombo 1 SRI LANKA	The Hongkong and Shanghai Banking Corporation Limited Colombo
SWEDEN	Skandinaviska Enskilda Banken AB (publ) Sergels Torg 2 SE-106 40 Stockholm SWEDEN	Svenska Handelsbanken Stockholm
SWITZERLAND	UBS AG 45 Bahnhofstrasse 8021 Zurich SWITZERLAND	UBS AG Zurich
TAIWAN	JPMorgan Chase Bank, N.A.** 8th Floor, Cathay Xin Yi Trading Building No. 108, Section 5, Hsin Yi Road Taipei 110 TAIWAN	JPMorgan Chase Bank, N.A. Taipei
THAILAND	Standard Chartered Bank (Thai) Public Company Limited 14th Floor, Zone B Sathorn Nakorn Tower 100 North Sathorn Road Bangrak Bangkok 10500 THAILAND	Standard Chartered Bank (Thai) Public Company Limited Bangkok
TUNISIA	Banque Internationale Arabe de Tunisie, S.A. 70-72 Avenue Habib Bourguiba P.O. Box 520 1080 Tunis Cedex TUNISIA	Banque Internationale Arabe de Tunisie, S.A. Tunis
TURKEY	Citibank A.S. Turkiye Main Branch Buyukdere Cad. No:100 80280 Esentepe Istanbul TURKEY	JPMorgan Chase Bank, N.A. Istanbul
UKRAINE	ING Bank Ukraine 30-A Spaska Street 04070 Kiev UKRAINE	JPMorgan Chase Bank, N.A. New York A/C JPMorgan Chase Bank London (USD NOSTRO Account)
RESTRICTED SERVICE ONLY. PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER INFORMATION.
UNITED ARAB EMIRATES	HSBC Bank Middle East Limited P.O. Box 66 312/45 Al Souq Road Bur Dubai Dubai UNITED ARAB EMIRATES	The National Bank of Abu Dhabi Abu Dhabi
UNITED KINGDOM.	JPMorgan Chase Bank, N.A.** 1 Tallis Street London EC4Y 5AJ UNITED KINGDOM	National Westminster Bank London
	Deutsche Bank AG The Depository and Clearing Centre Lower Ground Floor 27 Leadenhall Street London EC3A 1AA UNITED KINGDOM	Varies by currency
UNITED STATES	JPMorgan Chase Bank, N.A.** 4 New York Plaza New York NY 10004 U.S.A.	JPMorgan Chase Bank, N.A. New York
URUGUAY	BankBoston, N.A. Zabala 1463 Montevideo URUGUAY	BankBoston, N.A Montevideo.
VENEZUELA	Citibank, N.A. Centro Comercial El Recreo Torre Norte, Piso 20 Avda. Casanora, Sabana Grande Caracas 1050 D.C. VENEZUELA	Citibank, N.A. Caracas
VIETNAM	The Hongkong and Shanghai Banking Corporation Limited 75 Pham Hong Thai, District 1 Ho Chi Minh City VIETNAM	The Hongkong and Shanghai Banking Corporation Limited Ho Chi Minh City
ZAMBIA	Barclays Bank Zambia Plc Kafue House, Cairo Road Lusaka ZAMBIA	Barclays Bank Zambia Plc Lusaka
ZIMBABWE	Barclays Bank of Zimbabwe Limited Corporate Centre 1st Floor, Eastern Wing Birmingham Road, Cnr. Paisley Road Harare ZIMBABWE	Barclays Bank of Zimbabwe Limited Harare

SCHEDULE B

ELIGIBLE SECURITIES DEPOSITORIES

COUNTRY	DEPOSITORY	INSTRUMENTS
ARGENTINA	CVSA (Caja de Valores S.A.)	Equity, Corporate Debt, Government Debt
	CRYL (Central de Registration y Liquidacion de Instrumentos de Endeudamiento Publico)	Government Debt
AUSTRALIA	Austraclear Limited	Corporate Debt, Money Market, Government Debt and Semi-Government Debt
	CHESS (Clearing House Electronic Sub-register System)	Equity
AUSTRIA	OeKB (Oesterreichische Kontrollbank AG)	Equity, Corporate Debt, Government Debt
BAHRAIN	CSDR (Clearing, Settlement, Central Depository and Registry System)	Equity
BANGLADESH	CDBL (Central Depository Bangladesh Limited)	Equity, Government Debt
BELGIUM	Euroclear Belgium	Equity, Corporate Debt
	NBB (National Bank of Belgium)	Corporate Debt, Government Debt
BERMUDA	BSD (Bermuda Securities Depository)	Equity
BRAZIL	CBLC (Companhia Brasileira de Liquidacao e Custodia)	Equity
	CETIP (Central de Custodia e de Liquidacao Financiera de Titulos Privados)	Corporate Debt
	SELIC (Sistema Especial de Liquidacao e Custodia)	Government Debt
BULGARIA	BNB (Bulgaria National Bank)	Government Debt
	CDAD (Central Depository A.D.)	Equity, Corporate Debt
CANADA	CDS (The Canadian Depository for Securities Limited)	Equity, Corporate, Government Debt
CHILE	DCV (Deposito Central de Valores S.A.)	Equity, Corporate Debt, Government Debt
CHINA, SHANGHAI	CSDCC, Shanghai Branch (China Securities Depository and Clearing Corporation Limited, Shanghai Branch)	Equity
CHINA, SHENZHEN	CSDCC, Shenzhen Branch (China Securities Depository and Clearing Corporation Limited, Shenzhen Branch)	Equity
COLOMBIA	DCV (Deposito Central de Valores)	Government Debt
	DECEVAL (Deposito Centralizado de Valores de Colombia S.A.)	Equity, Corporate Debt, Government Debt
CROATIA	CDA (Central Depository Agency Inc. - Stredisnja depozitarna agencija d.d.)	Equity, Corporate Debt, Government Debt
CYPRUS	CSD (Central Securities Depository)	Equity, Corporate Debt, Government Debt
CZECH REPUBLIC	SCP (Stredisko cennych papiru - Ceska republica)	Equity, Corporate Debt, Government Debt
	CNB (Czech National Bank)	Government Debt
DENMARK	VP (Vaerdipapircentralen A/S)	Equity, Corporate Debt, Government Debt
EGYPT	MCSD (Misr for Clearing, Settlement and Depository)	Equity, Corporate Debt
	CBE (Central Bank of Egypt)	Government Debt
ESTONIA	ECDS (Estonian Central Depository for Securities Limited - Eesti Vaatpaberite Keskdepositoorium)	Equity, Corporate Debt, Government Debt
EUROMARKET	CBL (Clearstream Banking, S.A.)	Internationally Traded Debt, Equity
	Euroclear Bank S.A./N.V.	Internationally Traded Debt, Equity
FINLAND	APK (Finnish Central Securities Depository Limited)	Equity, Corporate Debt, Government Debt
FRANCE	Euroclear France	Equity, Corporate Debt, Government Debt
GERMANY	CBF (Clearstream Banking AG)	Equity, Corporate Debt, Government Debt
GREECE	CSD (Central Securities Depository S.A.)	Equity, Corporate Debt, Government Debt
	BoG (Bank of Greece)	Government Debt
HONG KONG	HKSCC (Hong Kong Securities Clearing Company Limited)	Equity
	CMU (Central Moneymarkets Unit)	Corporate Debt, Government Debt
HUNGARY	KELER Zrt. (Central Clearing House and Depository (Budapest) Zrt. - Kozponti Elszamolohaz es Ertektar (Budapest) Zrt.)	Equity, Corporate Debt, Government Debt
ICELAND	ISD (The Islandic Securities Depository)	Equity, Corporate Debt, Government Debt
INDIA	NSDL (National Securities Depository Limited)	Equity, Corporate Debt, Government Debt
	CDSL (Central Depository Services (India) Limited)	Equity
	RBI (Reserve Bank of India)	Government Debt
INDONESIA	KSEI (PT Kustodian Sentral Efek Indonesia)	Equity, Corporate Debt
	Bank Indonesia	Government Debt
IRELAND	CREST (CRESTCo Limited)	Equity, Corporate Debt
ISRAEL	TECH (Tel Aviv Stock Exchange Clearing House Ltd.)	Equity, Corporate Debt, Government Debt
ITALY	Monte Titoli S.p.A.	Equity, Corporate Debt, Government Debt
IVORY COAST	DC/BR (Le Depositaire Central / Banque de Reglement)	Equity
JAMAICA	JCSD (Jamaica Central Securities Depository)	Equity, Corporate Debt, Government Debt
JAPAN	JASDEC (Japan Securities Depository Center, Incorporated)	Equity, Convertible Debt
	BoJ (Bank of Japan)	Registered Government Debt
	JSSC (Japan Securities Settlement and Custody, Inc.)	Foreign Securities
JORDAN	SDC (Securities Depository Center)	Equity, Corporate Debt
KAZAKHSTAN	CSD (Central Securities Depository CJSC)	Equity
KENYA	CBCD (Central Bank Central Depository)	Government Debt
	CDSC (Central Depository & Settlement Corporation Limited)	Equity, Corporate Debt
KUWAIT	KCC (The Kuwait Clearing Company S.A.K.)	Equity, Corporate Debt
LATVIA	LCD (Latvian Central Depository)	Equity, Corporate Debt, Government Debt
LEBANON	Midclear S.A.L. (Custodian and Clearing Center of Financial Instruments for Lebanon and the Middle East S.A.L.)	Equity
	BDL (Banque du Liban)	Government Debt
LITHUANIA	CSDL (Central Securities Depository of Lithuania)	Equity, Corporate Debt, Government Debt
LUXEMBOURG	CBL (Clearstream Banking, S.A.)	Equity
MALAYSIA	Bursa Depository (Bursa Malaysia Depository Sdn Bhd)	Equity, Corporate Debt
	BNM (Bank Negara Malaysia)	Government Debt
MALTA	CSD (The Central Securities Depository)	Equity, Corporate Debt, Government Debt
MAURITIUS	CDS (Central Depository and Settlement Company Limited)	Equity, Corporate Debt
MEXICO	INDEVAL (S.D. INDEVAL S.A. de C.V.)	Equity, Corporate Debt, Government Debt
MOROCCO	Maroclear	Equity, Corporate Debt, Government Debt
NETHERLANDS	Euroclear Nederland	Equity, Corporate Debt, Government Debt
NEW ZEALAND	NZCSD (New Zealand Central Securities Depository)	Equity, Corporate Debt, Government Debt
NIGERIA	CSCS (Central Securities Clearing System Limited)	Equity, Corporate Debt, Government Debt
NORWAY	VPS (Verdipapirsentralen ASA)	Equity, Corporate Debt, Government Debt
OMAN	MDSRC (The Muscat Depository and Securities Registration Company, S.A.O.C.)	Equity, Corporate Debt
PAKISTAN	CDC (Central Depository Company of Pakistan Limited)	Equity, Corporate Debt
	SBP (State Bank of Pakistan)	Government Debt
PANAMA	LATINCLEAR (Central Latinoamericana de Valores, S.A.)	Equity, Corporate Debt, Government Debt
PERU	CAVALI (CAVALI ICLV S.A.)	Equity, Corporate Debt, Government Debt
PHILIPPINES	PDTC (Philippine Depository and Trust Corp.)	Equity
	RoSS (Bangko Sentral ng Pilipinas / Register of Scripless Securities)	Government Debt
POLAND	NDS (National Depository for Securities S.A.)	Equity, Long-Term Government Debt
	RPW (Registry of Securities)	Short-Term Government Debt
PORTUGAL	INTERBOLSA (Sociedade Gestora de Sistemas de Liquidação e de Sistemas Centralizados de Valores Mobiliários, S.A.)	Equity, Corporate Debt, Government Debt
QATAR	DSM (Doha Securities Market)	Equity
ROMANIA	BSE (Bucharest Stock Exchange)	Equity
	NBR (National Bank of Romania)	Government Debt
RUSSIA	VTB (Vneshtorgbank)	Equity, Corporate Debt, Government Debt (Ministry of Finance Bonds)
	NDC (The National Depository Center)	Equity, Corporate Debt, Government Debt
SAUDI ARABIA	Tadawul	Equity
	SAMA (Saudi Arabian Monetary Authority)	Government Debt
SERBIA	CSD (Central Register and Central Depository for Securities)	Equity, Corporate Debt, Government Debt
SINGAPORE	CDP (The Central Depository (Pte) Limited)	Equity, Corporate Debt
	MAS (Monetary Authority of Singapore)	Government Debt
SLOVAK REPUBLIC	CSD (Centralny depozitar cennych papierov SR, a.s.)	Equity, Corporate Debt, Government Debt
	NBS (National Bank of Slovakia)	Government Debt
SLOVENIA	KDD (Centralna klirinsko depotna druzba d.d.)	Equity, Corporate Debt, Government Debt
SOUTH AFRICA	STRATE (Share Transactions Totally Electronic)	Equity
SOUTH KOREA	KSD (Korea Securities Depository)	Equity, Corporate Debt, Government Debt
SPAIN	IBERCLEAR (Sociedad de Gestion de los Sistemas de Registro, Compensacion y Liquidacion de Valores, S.A.)	Equity, Corporate Debt, Government Debt
SRI LANKA	CDS (Central Depository System (Private) Limited)	Equity, Corporate Debt
SWEDEN	VPC (Vardepapperscentralen AB)	Equity, Corporate Debt, Government Debt
SWITZERLAND	SIS (SIS SegaInterSettle AG)	Equity, Corporate Debt, Government Debt
TAIWAN	TDCC (Taiwan Depository and Clearing Corporation)	Equity, Corporate Debt, Government Debt
THAILAND	TSD (Thailand Securities Depository Company Limited)	Equity, Corporate Debt, Government Debt
TUNISIA	STICODEVAM (Societe Tunisienne Interprofessionnelle pour la Compensation et le Depot des Valeurs Mobilieres)	Equity, Corporate Debt, Government Debt
TURKEY	Central Registry Agency (CRA)	Equity, Corporate Debt
	CBoT (Central Bank of Turkey)	Government Debt
UKRAINE	NBU (National Bank of Ukraine)	Government Debt
	MFS (Interregional Securities Union)	Corporate Debt, Selected Equity
UNITED ARAB EMIRATES	DFM (Dubai Financial Market Clearing House)	Equity, Corporate Debt, Government Debt
	DIFX (Dubai International Financial Exchange Central Securities Depository and Registry)	Equity, Corporate Debt
UNITED KINGDOM	CREST (CRESTCo Limited)	Equity, Corporate Debt, Government Debt
UNITED STATES	DTC (The Depository Trust Company)	Equity, Corporate Debt
	FRB (Federal Reserve Bank)	Government Debt, Mortgage Back Debt
URUGUAY	BCU (Banco Central del Uruguay)	Government Debt
VENEZUELA	BCV (Banco Central de Venezuela)	Government Debt
	CVV (Caja Venezolana de Valores, S.A.)	Equity, Corporate Debt, Money Market
VIETNAM	VSD (Vietnam Securities Depository)	Equity, Corporate Debt, Government Debt
ZAMBIA	CSD (LuSE Central Shares Depository Limited)	Equity, Government Debt
	BoZ (Bank of Zambia)	Government Debt

EX-99.H OTH MAT CONT 6 exhibith.htm EXHIBIT H Unassociated Document

[NAME OF FUND]

AMENDMENT OF [AMENDED] SHAREHOLDER SERVICES AGREEMENT

This Amendment to the [Amended] Shareholder Services Agreement (the "Agreement") by and between American Funds Service Company (hereinafter, "AFS") and [Name of Fund] (hereinafter, the "Fund") is dated as of the 1st day of November, 2006.

WHEREAS, AFS and the Fund entered into the Agreement with regard to certain shareholder services to be performed by AFS; and

WHEREAS, AFS and the Fund desire to amend said Agreement in the manner hereinafter set forth;

NOW THEREFORE, pursuant to Section 9 of the Agreement, AFS and the Fund hereby amend Section 6 of the Agreement to read as follows:

AFS will provide to the participating investment companies the shareholder services referred to herein in return for the following fees:

Annual account maintenance fee (paid monthly):

$0.91 per month for each open account on AFS’ books or in Level 0, 2 or 4

Networking ($10.92 per year).

$0.06 per month for each open account maintained in Street Name or

Level 1 or 3 Networking ($0.72 per year).

No annual fee will be charged for a participant account underlying a 401(k)

or other defined contribution plan where the plan maintains a single

account on AFS’ books and responds to all participant inquiries.

Transaction fees:

$1.55 per non-automated transaction

$0.20 per automated transaction

For this purpose, “transactions” shall include all types of transactions included in an “activity index” as reported to the Review and Advisory Committee at least annually. AFS will bill the Fund monthly, on or shortly after the first of each calendar month, and the Fund will pay AFS within five business days of such billing.

Any revision of the schedule of charges set forth herein shall require the affirmative vote of a majority of the members of the [board of directors/trustees] of the Fund.

[Remainder of page intentionally left blank.]

IN WITNESS THEREOF, AFS and the Fund have caused this Amendment to be executed by their duly authorized officers effective as of the date first written above.

[NAME OF FUND]	AMERICAN FUNDS SERVICE COMPANY
BY:	BY:

Name:	Name:
Title:	Title:
Date:	Date:

EX-99.J OTHER OPININ 7 exhibitj.htm EXHIBIT J Exhibit J

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to use in this Registration Statement on Form N1-A of our reports dated February 7, 2007, relating to the financial statements and financial highlights included in the Annual Report to Shareholders and the investment portfolios included in Item 6 of Form N-CSR of The Investment Company of America, which appear in such Registration Statement. We also consent to the references to us under the headings "Financial highlights", "Independent registered public accounting firm", and "Prospectuses, reports to shareholders and proxy statements" in such Registration Statement.

PricewaterhouseCoopers LLP

Los Angeles, CA

February 26, 2007

EX-99.P CODE ETH 8 exhibitp.htm EXHIBIT P Unassociated Document

[logo - American Funds ®]

The following is representative of the Code of Ethics in effect for each Fund:

CODE OF ETHICS

With respect to non-affiliated Board members and all other access persons to the extent that they are not covered by The Capital Group Companies, Inc. policies:

No Board member shall so use his or her position or knowledge gained therefrom as to create a conflict between his or her personal interest and that of the Fund.

Each non-affiliated Board member shall report to the Secretary of the Fund not later than thirty (30) days after the end of each calendar quarter any transaction in securities which such Board member has effected during the quarter which the Board member then knows to have been effected within fifteen (15) days before or after a date on which the Fund purchased or sold, or considered the purchase or sale of, the same security.

For purposes of this Code of Ethics, transactions involving United States Government securities as defined in the Investment Company Act of 1940, bankers’ acceptances, bank certificates of deposit, commercial paper, or shares of registered open-end investment companies are exempt from reporting as are non-volitional transactions such as dividend reinvestment programs and transactions over which the Board member exercises no control.

* * * *

In addition, the Fund has adopted the following standards in accordance with the requirements of Form N-CSR adopted by the Securities and Exchange Commission pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 for the purpose of deterring wrongdoing and promoting: 1) honest and ethical conduct, including handling of actual or apparent conflicts of interest between personal and professional relationships; 2) full, fair accurate, timely and understandable disclosure in reports and documents that a fund files with or submits to the Commission and in other public communications made by the fund; 3) compliance with applicable governmental laws, rules and regulations; 4) the prompt internal reporting of violations of the Code of Ethics to an appropriate person or persons identified in the Code of Ethics; and 5) accountability for adherence to the Code of Ethics. These provisions shall apply to the principal executive officer or chief executive officer and treasurer (“Covered Officers”) of the Fund.

It is the responsibility of Covered Officers to foster, by their words and actions, a corporate culture that encourages honest and ethical conduct, including the ethical resolution of, and appropriate disclosure of conflicts of interest. Covered Officers should work to assure a working environment that is characterized by respect for law and compliance with applicable rules and regulations.

Each Covered Officer must act in an honest and ethical manner while conducting the affairs of the Fund, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Duties of Covered Officers include:

· Acting with integrity;

· Adhering to a high standard of business ethics; and

· Not using personal influence or personal relationships to improperly influence investment decisions or financial reporting whereby the Covered Officer would benefit personally to the detriment of the Fund.

Each Covered Officer should act to promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with or submits to, the Securities and Exchange Commission and in other public communications made by the Fund.

· Covered Officers should familiarize themselves with disclosure requirements applicable to the Fund and disclosure controls and procedures in place to meet these requirements; and

· Covered Officers must not knowingly misrepresent, or cause others to misrepresent facts about the Fund to others, including the Fund’s auditors, independent directors, governmental regulators and self-regulatory organizations.

Any existing or potential violations of this Code of Ethics should be reported to The Capital Group Companies’ Personal Investing Committee. The Personal Investing Committee is authorized to investigate any such violations and report their findings to the Chairman of the Audit Committee of the Fund. The Chairman of the Audit Committee may report violations of the Code of Ethics to the Board or other appropriate entity including the Audit Committee, if he or she believes such a reporting is appropriate. The Personal Investing Committee may also determine the appropriate sanction for any violations of this Code of Ethics, including removal from office, provided that removal from office shall only be carried out with the approval of the Board.

Application of this Code of Ethics is the responsibility of the Personal Investing Committee, which shall report periodically to the Chairman of the Audit Committee of the Fund.

Material amendments to these provisions must be ratified by a majority vote of the Board. As required by applicable rules, substantive amendments to the Code of Ethics must be filed or appropriately disclosed.

Following is the Code of Ethics for The Capital Group Companies Inc. (Capital), which includes Capital Research and Management Company (CRMC), the investment adviser to the American Funds and those involved in the distribution of the funds, client support and services; and Capital Group International Inc. (CGII), which includes Capital Guardian Trust Company and Capital International Inc. The Code of Ethics applies to all associates.

The Capital Group Companies

Code of Ethics

All of us within the Capital organization are responsible for maintaining the very highest ethical standards when conducting business. In keeping with these standards, we must always place the interests of clients and fund shareholders ahead of our own. Moreover, we should adhere to the spirit as well as the letter of the law and be vigilant in guarding against anything that could color our judgment.

Over the years we have earned a reputation for the highest integrity. Regardless of lesser standards that may be followed through business or community custom, we must observe exemplary standards of openness, integrity, honesty, and trust. Accordingly, we have adopted certain standards as described below for the purpose of deterring wrongdoing and promoting: 1) honest and ethical conduct; 2) full, fair, accurate, timely, and understandable disclosure in reports and documents; 3) compliance with applicable laws (including federal securities laws), rules, and regulations; 4) the prompt internal reporting of violations of our Code of Ethics; and 5) accountability for adherence to our Code of Ethics.

General Guidelines

Although specific Policies are discussed in more detail below, these are general guidelines that all Capital associates should be aware of:

· It is a crime in the U.S. and many other countries to transact in a company’s securities while in possession of material non-public information about the company. If there is any question as to whether you’ve received material information (typically from a company “insider”) you should contact any member of the legal staff to discuss.

· You should not knowingly misrepresent, or cause others to misrepresent, facts about Capital to clients, fund shareholders, regulators, or any other member of the public. Disclosure in reports and documents should be fair and accurate.

· You should not accept extravagant gifts or entertainment from persons or companies who are trying to solicit business from any of the Capital Group companies. Capital’s Gifts and Entertainment Policy is summarized on pages 3-4.

· You may not accept negotiated commission rates or any other terms that you believe may be more favorable than the broker-dealer grants to accounts with similar characteristics. U.S. broker-dealers are subject to certain rules designed to prevent favoritism toward such accounts.

· Safeguarding non-public information - All associates are responsible for safeguarding non-public information about securities recommendations and fund and client holdings (for example, analyst research reports, investment meeting discussions or notes, current fund/client transaction information). If you have access to such information, you will likely be subject to additional personal investing limitations under Capital’s Personal Investing Policy.¹ Even if you are not a “covered person” under the Personal Investing Policy, certain general principles apply to you, and you should not trade based on any Capital company’s confidential, proprietary investment information where fund or client trades are likely to be pending or imminent.

· Other types of information (for example, marketing plans, employment issues, shareholder identities, etc.) may also be confidential and should not be shared with individuals outside the company (except those retained to provide services for the Capital companies).

Excessive trading of Capital-managed Funds

You should not engage in excessive trading of the American Funds or any other Capital-managed investment vehicles worldwide to take advantage of short-term market movements. Excessive activity, such as a frequent pattern of exchanges, could involve actual or potential harm to shareholders or clients. Note that this applies to your spouse and any other immediate family members residing in your household.

Ban on Participation in IPOs

Capital associates and their immediate family members residing in their household may not participate in Initial Public Offerings (IPOs). Although exceptions are rarely granted, they will be considered on a case-by-case basis, for example, where a family member is employed by the IPO Company and IPO shares are considered part of that family member’s compensation. (You may contact the staff of the Personal Investing Committee if you would like to request an exception.)

Limitation on Service on Boards

Associates are discouraged from serving on the board of directors or advisory board of any public or private company (this does not apply to boards of Capital companies or funds). You must receive approval prior to serving on a board, except for boards of charitable organizations or other nonprofit organizations. In addition, certain associates will be sent a form annually and asked to disclose board positions held by the associate or his/her spouse.

Failure to adhere to our Code of Ethics may result in disciplinary action being taken, including termination.

Annual Certification of Code of Ethics

Each associate will receive a copy of the Code of Ethics annually and is responsible for certifying in writing that they have read and understood the Code.

Reporting Violations

You have a responsibility to report any violations of our Code of Ethics, including: (i) fraud or illegal acts involving any aspect of our business; (ii) noncompliance with applicable laws, rules and regulations; (iii) intentional or material misstatements in our regulatory filings, internal books and records or client records or reports; or (iv) activity that is harmful to our clients or fund shareholders. Deviations from controls or procedures that safeguard the company, including the assets of shareholders and clients, should also be reported. Reported violations of the Code of Ethics will be investigated and appropriate actions will be taken.

You can report confidentially to:

· Your manager or department head

· Capital Audit Committee

· Any lawyer employed by the Capital organization

Conflicts of Interest

Gifts and Entertainment Policy

A conflict of interest occurs when the private interests of associates interfere or could potentially interfere with their responsibilities at work. Associates must not place themselves or the company in a position of actual or potential conflict. Associates may not accept (or give) gifts worth more than U.S. $100.00, or accept (or give) excessive business entertainment, loans, or anything else involving personal gain from (or to) those who conduct business with the company. In addition, a business entertainment event exceeding U.S. $250.00 in value should not be accepted (or given) unless the associate receives permission from his/her manager or supervisor and the Gifts and Entertainment Policy Committee.

Gifts or entertainment extended by a CG associate and approved by the associate’s manager for reimbursement do not need to be reported (or precleared). The expenses, however, are subject to the approval of the associate’s manager. When giving a gift or extending entertainment on behalf of Capital, it is important to keep in mind that giving (or receiving) an extravagant gift or entertaining excessively or lavishly may create the appearance of conflict. Associates should also be aware that certain laws or rules may prohibit or limit gifts or entertainment extended to public officials - especially those responsible for investing public funds.

Reporting

The limitations on accepting (or giving) gifts apply to all associates as described on the previous page, and all associates will be asked to fill out quarterly disclosures. You must report any gift exceeding U.S. $50.00 and business entertainment in which an event exceeds U.S. $75.00 (although it is recommended that you report all gifts and entertainment).

Gifts and Entertainment Policy Committee

The Gifts and Entertainment Committee oversees administration of and compliance with the Policy.

Charitable Contributions

In soliciting donations from various people in the business community, associates must never allow the present or anticipated business relationships of Capital or any of its affiliates to be a factor in soliciting such contributions.

Political Contributions Policy

Making Political Contributions

One of the objectives of Capital's Code of Ethics is to ensure that conflicts of interest do not arise as a result of an associate's position at Capital. Contributions (financial or non-financial) made to certain political campaigns may raise potential conflicts of interest because of the ability of certain office holders to direct business to Capital. For example, contributions to any person currently holding a city, county or state treasurer position or any candidate running for these offices may raise concerns. As a result, associates should not make contributions to any person currently holding these positions or running for these positions. Associates are also encouraged to seek guidance for contributions to other political offices that may have the power to influence the choice of a Capital company to manage or the American Funds as an investment option for public funds. These Policies also apply to an associate's spouse.

The Political Contributions Committee will evaluate questions relating to potential political contributions considering, among other things: 1) an associate’s relationship with the candidate (i.e., is the relationship a personal or business one) and 2) the candidate's current or potential relationship with Capital.

As a general matter, contributions to candidates for U.S. President, Senate, House of Representatives and contributions to national political parties are permissible (unless the candidate currently holds an office that may raise potential conflict of interest issues as described above). Likewise, unless you are subject to the special “CollegeAmerica” requirements (described below), contributions to State Governor and State Representative positions and state political parties are permissible.

Special Political Contribution Requirements - CollegeAmerica

Certain associates involved with "CollegeAmerica," the American Funds 529 College Savings Plan sponsored by the Commonwealth of Virginia will receive a special reporting form. These associates are subject to additional restrictions and reporting requirements. For example, these associates generally may not contribute to Virginia political candidates or parties. These associates must also preclear any contributions to political candidates and parties in all states and municipalities and any PAC contribution (Political Action Contribution) other than to IMPAC (the Investment Company Institute’s PAC).

Soliciting Political Contributions

In soliciting political contributions from various people in the business community, you must never allow the present or anticipated business relationships of any Capital company to be a factor in soliciting such contributions.

Other Considerations

Please keep in mind that any political contributions you make or solicit should be viewed as personal. Therefore, you should not use Capital letterhead for correspondence regarding these contributions, and you should not hold fundraising events in Capital offices.

Insider Trading

Antifraud provisions of U.S. securities laws as well as the laws of other countries generally prohibit persons in possession of material non-public information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines, and jail sentences.

While investment research analysts are most likely to come in contact with material non-public information, the rules (and sanctions) in this area apply to all Capital associates and extend to activities both within and outside each associate's duties. Any associate who believes that he or she may have material non-public information should contact any Capital lawyer.

Personal Investing Policy

As an associate of The Capital Group Companies, you may have access to confidential information. This places you in a position of special trust. You are associated with a group of companies that is responsible for the management of many billions of dollars belonging to mutual fund shareholders and other clients. The law, ethics, and our own Policy place a heavy burden on all of us to ensure that the highest standards of honesty and integrity are maintained at all times.

There are several rules that must be followed to avoid possible conflicts of interest in personal investments. Keep in mind, however, that placing the interests of clients and fund shareholders first is the core principle of our Policies and applies even if the matter is not covered by a specific provision. The following is only a summary of the Capital Personal Investing Policy. Please refer to Capital’s Personal Investing Policy for more detailed information about personal investing rules.

Personal investing should be viewed as a privilege, not a right. As such, the Personal Investing Committee may place limitations on the number of preclearances and/or transactions.

The following provisions (pages 6-13) apply only to associates covered under the Personal Investing Policy, including additional rules that apply to investment associates.

Covered Persons

You are a “covered person” if you have access to non-public investment information relating to current or imminent fund/client transactions. If you are a “covered person” you should be receiving quarterly personal investing disclosure forms. For purposes of this Policy, “covered persons” include immediate family members living in the same household.

Covered persons must conduct their personal securities transactions in such a way that they do not conflict with the interests of the funds and client accounts. This Policy also includes securities transactions of family members living in the covered person's household and any trust or custodianship for which the associate or an immediate family member is trustee or custodian. A conflict may occur if you, or a family member in the same household, or a trust or custodianship for which you or an immediate family member are trustee or custodian, have a transaction in a security when the funds or client accounts are considering or concluding a transaction in the same security.

If you have any questions regarding your coverage status, please contact the staff of the Personal Investing Committee.

Investment Associates

“Investment associates” include portfolio counselors/managers, investment counselors, investment analysts and research associates, trading associates including trading assistants, and investment control, portfolio control and fixed income control associates including assistants.

Prohibited Transactions for Covered Persons

The following transactions are prohibited for covered persons:

IPO investments

Short sales of securities that are subject to preclearance

Spread betting on securities

Writing puts and calls on securities that are subject to preclearance

Initial Disclosure of Personal Holdings and Securities Accounts

New Capital associates who are covered by the Policy (and any associate transferring into a “covered” position) must submit a list of their portfolio holdings and accounts (and the holdings/accounts of any immediate family member residing with them) within 10 days of commencing employment (or transferring to a “covered” position.)

Quarterly Reporting of Transactions

Covered persons must submit quarterly disclosure of certain transactions. If you are covered, you will receive reporting forms each quarter that are due no later than 15 calendar days after the end of the quarter². Reports will be reviewed by the staff of the Personal Investing Committee. Transactions of securities (including fixed-income securities) or options must be precleared as described on pages 9-10 and reported except as outlined on pages 11.

Annual Disclosure of Personal Securities Holdings and Securities Accounts

Covered persons are required to disclose annually a list of their portfolio holdings and accounts (and the holdings/accounts of any immediate family members residing with them). Disclosure forms will be supplied for this purpose.

Securities Accounts

Disclosure of Securities Accounts

Accounts that currently hold securities must be disclosed. Examples of accounts that must be disclosed include:

Firm (or bank) accounts holding securities

American Funds (AFS) and Capital Bank and Trust (CB&T) accounts

Firm (or bank) accounts holding American Funds

Capital International Fund and Capital International Emerging Markets Fund accounts with JP Morgan Luxembourg or held with other firms

Accounts holding GIG sub-advised funds and/or other Capital-affiliated funds, and accounts/plan numbers with insurance companies that sell variable annuities or insurance products that hold American Funds Insurance Series (could be through a brokerage account or insurance contract)

Employer-sponsored retirement or stock purchase accounts holding securities (ESPP, ESOP, 401(k), company stock funds, etc.)

Direct investment/purchase accounts (e.g., DRP, transfer agent accounts, or LDO registrar accounts)

PEP and ISA accounts that currently hold securities

Discretionary accounts for which you have completely turned over investment decision-making authority to a professional money manager (other than PIM); i.e., you make no investment decisions regarding your account

Investment clubs

Duplicate Account Statements and Trade Confirmations

Duplicate statements and trade confirmations (or equivalent documentation) are required for accounts currently holding securities that are subject to preclearance and/or reporting. This includes 401(k) and other retirement accounts with previous employers and excludes American Funds accounts where records are held at American Funds Service Company or Capital Bank and Trust. If an LDO associate participates in the LDO Personal Pension Plan with Friends Provident, these accounts are also excluded.

Covered persons should inform their bank, or securities firm, or money management firm that they are employed by an investment management organization. U.S. broker-dealers are subject to certain rules designed to prevent favoritism toward such accounts. Associates may not accept negotiated commission rates or any other terms they believe may be more favorable than the broker-dealer grants to accounts with similar characteristics.

In addition, covered persons must direct their firm or bank to send duplicate trade confirmations and account statements (or other equivalent documentation) for all new or existing accounts, which hold reportable securities, on a timely basis to the appropriate address. If they are not able to send duplicates directly, you should submit copies of all trade confirmations and account statements (or other equivalent documentation) as soon as they become available.

All documents received are kept strictly confidential and are maintained by LAO Legal in accordance with applicable Federal Securities laws.³

If your broker requires a letter requesting duplicate trade confirmations and monthly statements, please contact the staff of the Personal Investing Committee.

Note: If your broker will be sending confirmation statements for an immediate family member with a different last name than yours, please inform the staff of the Personal Investing Committee by calling the preclear line with the name of the family member and that person’s relationship to you.

Professionally Managed (Discretionary) Accounts

If you have accounts where you have completely turned over decision-making authority to a professional money manager (who is not covered by our Policy), you must disclose the existence of these accounts and provide the account information on your personal investing disclosure forms. You do not need to preclear or report securities transactions in these accounts.

Securities Transactions

Preclearance of Securities Transactions

Covered persons must receive approval before buying or selling securities including (but not limited to):

Stocks of companies (public or private, including purchases through private placements)

Bonds (except U.S. government bonds or other sovereign government bonds rated AAA or Aaa or equivalent)

Investments in venture capital partnerships and hedge funds

Options on securities subject to preclearance

Closed-end funds (including investment trust companies)

All Exchange traded Funds (ETFs) or index funds not listed on the approved list (including UCITS, SICAVs, OEICs, FCPs, Unit Trusts, Publikumsfonds, etc.). If the ETF or index fund is listed on the approved list, transactions are only subject to reporting.

Debt instruments including derivative products and structured notes (even if the underlying pool of assets consists of securities that do not require preclearance, such as commodities, broad-based indexes, or currencies).

Note: U.S. government bonds or other sovereign government bonds rated AAA or Aaa or equivalent are not subject to preclearing and reporting

Transactions in securities subject to preclearance in IRAs (or company-sponsored retirement accounts), in Personal Equity Plans (PEPs), and Individual Savings Accounts (ISAs) (available in the U.K. only) over which you have discretion

Gifts of securities to individuals, including family members not covered under the Policy

Note: Gifts of securities to qualified charitable organizations are not subject to preclearance.

Before buying or selling securities, covered persons must check with the staff of the Personal Investing Committee.

Preclear requests will be handled during the hours the New York Stock Exchange (NYSE) is open (generally 6:30am to 1:00pm Pacific Time).

You will generally receive a response within one business day. Unless a different period is specified, clearance is good until the close of the NYSE on the day that you request preclearance. Associates from offices outside the U.S. and/or associates trading on non-U.S. exchanges are usually granted enough time to complete their transaction during the next available trading day. If you do not execute your transaction within this period, you must resubmit your preclearance request. Note that investments in private companies (e.g., private placements) and venture capital partnerships must be precleared and reported and are subject to special review. In addition, opportunities to acquire a stock that is “limited” (i.e., a broker-dealer is only given a certain number of shares to sell and is offering the opportunity to buy) would be subject to the Gifts and Entertainment Policy.

Exception for De Minimis Transactions

The de minimis exception is NOT available for associates who are considered investment associates or for CIKK associates (a CAPITAL company based in Tokyo). “Investment associates” include portfolio counselors/managers, investment counselors, investment analysts and research associates, trading associates including trading assistants, and investment control, portfolio control and fixed income control associates including assistants.

All other covered associates may execute one single transaction (either a buy or a sell) of 100 shares or less per issuer per calendar month without preclearance. You must, however, still report these trades on your quarterly form. If you request preclearance and are denied permission, you may not execute a de minimis transaction in that issuer without preclearance for a period of seven calendar days. Larger or more frequent share transactions must be precleared.

Report Only Transactions (no need to preclear):

You are required to report the following transactions, but you do not have to preclear these transactions:

Purchases and sales of American Funds held outside American Funds Service Company (AFS) or Capital Bank & Trust (CB&T)

Purchases and sales of Capital Affiliated Funds, except the American Funds

Note: The following transactions must be reported:

§ LDO Pension Plan with Skandia

§ Capital International Funds and Capital International Emerging Markets Fund with JP Morgan Luxembourg or held with other firms

Purchases and sales of GIG Advised/Sub-Advised Funds and Insurance Products

Purchases and sales (including options and futures) of index funds or exchange traded funds that are on the pre-approved list of index funds/ETFs

Participation in any CGII private equity fund/partnership

De minimis transactions

Distributions of stock from venture capital partnerships

Capital calls of venture capital partnerships and hedge funds that have been pre-approved

Securities received as a gift or through a bequest

Securities given to charitable organizations or individuals not related to the associate or to the associate’s immediate family

Corporate Actions; for example:

Name changes

Splits and reverse splits

Spin-offs, merger/acquisitions

Tender offers

Expiration of options and bonds matured, redeemed, or called

Do Not Preclear or Report:

You do not need to preclear or report the following transactions:

Investments in Capital’s 401(k) or MRP

LDO Pension Plan investments with Friends Provident

Open-end investment funds except funds advised or sub-advised by any Capital company

§ US & Canada mutual funds

§ EU member states UCITS, whether in the corporate form (e.g., SICAVs, OEICs, etc.) or contractual form (e.g., FCP, Unit Trusts, Publikumsfonds, etc.)

§ Swiss investment funds and investment companies open to the public

§ UK & Singapore Unit Trusts

§ Singapore open-end investment-linked funds other than Great Eastern and NTUC

§ Japanese Investment Trust Funds

§ Japanese Investment Company Funds

(Note: all other funds should be precleared and reported.)

Money market instruments or other short-term debt instruments with maturities (at issuance) of one year or less that are rated in one of the highest two rating categories by a Nationally Recognized Statistical Rating Organization or unrated but of equivalent quality

Direct obligations of the U.S. Government or bonds issued by sovereign governments outside the U.S. that are rated AAA or Aaa or equivalent

Bankers' acceptances, CDs, or other commercial paper

Currencies (including options and futures)

Commodities

Transactions in accounts for which you have completely turned over investment decision-making authority to a professional money manager

Additional Policies for “Investment Associates”

The policies described in this section are specific to investment associates. “Investment associates” include portfolio counselors/managers, personal investment counselors, investment analysts and research associates, trading associates including trading assistants, and investment control, portfolio control and fixed income control associates including assistants.

Disclosure of Personal Ownership of Recommended Securities

Portfolio counselors/managers and analysts will be asked quarterly to disclose securities they own both personally and professionally. Analysts will also be required to disclose securities they hold personally that are within their research coverage or could result in future cross-holdings. This disclosure will be reviewed by the staff of the Personal Investing Committee and may also be reviewed by various Capital committees. In addition, to the extent that disclosure has not already been made to the Personal Investing Committee (by including information on the quarterly form), any associate who is in a position to recommend the purchase or sale of securities by the fund or client accounts that s/he personally owns should first disclose such ownership either in writing (in a company write-up) or verbally (when discussing the company at investment meetings) prior to making a recommendation⁴ .

In addition, portfolio counselors/managers and analysts are encouraged to notify investment control of personal ownership of securities when placing an order (especially with respect to a first-time purchase). If you have any questions, you should contact the staff of the Personal Investing Committee.

Blackout Periods

Investment associates may not buy or sell a security during a period beginning seven calendar days before and ending seven calendar days after a fund or client account transacts in that issuer. The blackout period applies to trades in the same management company with which the associate is affiliated.

If a fund or client account transaction takes place in the seven calendar days following a precleared transaction by an investment associate, the personal transaction may be reviewed by the Personal Investing Committee to determine the appropriate action, if any. For example, the Committee may recommend the associate be subject to a price adjustment to ensure that he or she has not received a better price than the fund or client account.

Ban on short-term trading profits

Investment associates are generally prohibited from profiting from the purchase and sale or sale and purchase of the same (or equivalent) securities within 60 days. This restriction applies to the purchase of an option and the sale of an option, or the purchase of an option and the exercise of the option and sale of shares within 60 days.

Other Considerations

Material outside business interests may give rise to potential conflicts of interest. Associates are asked to report if they are a senior officer of or own more than 5% of any private or public company that is or potentially may be doing business with any Capital company or with the American Funds. This reporting requirement also applies to any immediate family member residing within the associate’s household

Personal Investing Committee

Any questions or hardships that result from these Policies or requests for exceptions should be referred to Capital’s Personal Investing Committee by calling the staff of the Personal Investing Committee.

¹ Note: If you have access to non-public information regarding securities recommendations and holdings but you are not currently considered “covered” under the Personal Investing Policy (i.e., you do not receive a reporting form each quarter), you should contact the staff of the Personal Investing Committee to discuss.

²For compliance purposes, only those signed and dated greater than 30 days past the end of the quarter will be considered “late.”

³Information about particular transactions may be provided to an associate’s supervisor or appropriate Human Resources manager by Personal Investing Committee staff where the transactions are in violation of the Policy, and may impact the associate’s job performance or raise conflict of interest-related issues.

⁴Note: This disclosure requirement is consistent with both AIMR standards as well as the ICI Advisory Group Guidelines.