ica_ncsr.htm

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The right choice for the long term®

ICA The Investment Company of America

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Semi-annual report for the six months ended June 30, 2009

ICASM seeks long-term growth of capital and income, placing greater emphasis on future dividends than on current income.

The Investment Company of America® is one of the 30 American Funds. American Funds is one of the nation’s largest mutual fund families. For nearly 80 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.

Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.

Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2009:

1 year

5 years

10 years

Class A shares

Reflecting 5.75% maximum sales charge

–26.62

–1.71

0.40

The total annual fund operating expense ratio was 0.64% for Class A shares for the 12 months ended June 30, 2009. Please note that the expense ratio shown above differs from those shown in the Financial Highlights table on pages 24 to 29 and the Expense Example on pages 30 and 31, which are annualized for the six-month period ended June 30, 2009.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 24 to 29 for details.

The fund’s 30-day yield for Class A shares as of July 31, 2009, reflecting the 5.75% maximum sales charge and calculated in accordance with the Securities and Exchange Commission formula, was 2.18%.

Results for other share classes can be found on page 35.

Equity investments are subject to market fluctuations. Investments outside the United States may be subject to additional risks such as currency fluctuations, political instability, differing securities regulations and periods of illiquidity. Global diversification can help reduce these risks. See the prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.

Fellow shareholders:

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Amid another six months of historic market volatility, The Investment Company of America recorded a total return of 5.6% for the period ended June 30, 2009, with dividends reinvested. This compares favorably with the 3.2% return for the period by the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of the U.S. stock market. But the way to that return was not straightforward. From already-distressed levels at the outset of the year, equity markets slid sharply to new lows in March, then recovered just as sharply over the ensuing three months as the U.S. banking system stabilized and some fears receded.

ICA has surpassed the S&P 500 over longer periods of time as well. Over the past 10 years, for example, which proved to be an extraordinarily difficult investment environment, the S&P 500 cumulatively lost 20.1% of its value while ICA gained 10.4%.

Volatile markets

Early in 2009, the market was anticipating dire conditions for the economy and for company earnings, a sentiment that forced down stock prices. Later, those scenarios did not prove quite as calamitous as feared, which reversed expectations and acted to lift stock prices after the low in early March. It is important to remember that the market factors in future expectations, so it can improve even when the economy does not yet show signs of better health and vice versa. As expectations for a recovery remain mixed and the economy remains vulnerable, the market might continue to go up and down sharply in the near term.

[Begin Sidebar]

Results at a glance
For the six months ended June 30, 2009, with dividends reinvested

	ICA (Class A shares)			Standard & Poor’s 500 Composite Index*			Lipper Growth & Income Funds Index†

Income return		1.44	%		1.27	%		n/a
Capital return		4.20	%		1.92	%		n/a
Total return		5.64	%		3.19	%		5.34	%

*The S&P 500 is unmanaged and its results do not reflect the effect of sales charges, commissions or expenses.
† Lipper index does not reflect the effect of sales charges.

[End Sidebar]

The U.S. economy remained in recession during the period. In the first quarter, on the way down, the weak economy was influenced by active reductions in inventories throughout the supply chains of businesses. Later, in the second quarter, there were indications pointing to a moderation of this sharp contraction. These improvements could stem in part from the beginning effects of the potentially $1-trillion government stimulus efforts. The hope is that eventually businesses and consumers will work through their depleted inventories and restock.

Unemployment rose to 9.5% — a 26-year high — from 7.6% in January, but the pace moderated slightly in June. Housing starts remained weak, although home sales data started to look more promising, a possible effect of the tax rebate for first-time homebuyers as part of the stimulus package. The financial markets appeared to be calming, with the credit markets slowly thawing.

The Federal Reserve left the federal funds rate unchanged during the period, after lowering it seven times between January and December 2008 — from 4.25% to a range of zero to 0.25% in December 2008. The Fed has pledged to keep interest rates exceptionally low for “an extended period,” in an effort to instill calm and stability. The Fed is also seeking to encourage spending by businesses and consumers and to foster more liquidity in the system.

Portfolio review

Information technology remained the portfolio’s largest sector, making up 19.0% of the fund, up from 16.6% six months ago, and this category as a whole was strong. The fund’s largest holding, software maker Microsoft, was up 22.3%, and enterprise software company Oracle, the fourth-largest holding, was up 20.8%. As thrifty consumers flocked to discounters, retailer Target (ninth-largest holding) gained 14.3% and Walgreens was up 19.2%.

Other of the fund’s top holdings did not fare quite as well. The beverages and tobacco industry was largely flat: second-largest holding tobacco giant Philip Morris International was up 0.3% and soft drink maker PepsiCo, the 10th-largest holding, was up 0.4%. Telecom was weak in the period: third-largest holding AT&T fell 12.8% and Verizon Communications, the eighth-largest holding, was down 9.4%. (See pages 4 to 9 for more detailed information about ICA’s holdings.)

ICA invests primarily in equities but can also invest in convertible issues and bonds. Portfolio managers took advantage of opportunities in fixed income during the period, raising that portion of the fund invested in bonds and notes to 3.06%, from 0.03% six months ago.

Looking ahead

We remain in a period of extremes, and we expect to see continued volatility. We are cautious in our approach, keeping in mind the fragility of the economy and the several scenarios — with varying levels of optimism — that could play out in the U.S. and world. We recognize the risks that exist, but with volatility also comes opportunity. It is our strength to thoroughly analyze companies and use this research as well as our long-term perspective to make the best possible judgments for the shareholders of The Investment Company of America.

We appreciate your continued trust in us and your commitment to long-term investing, particularly during these times of heightened market turbulence and uncertainty.

Sincerely,

/s/ R. Michael Shanahan

R. Michael Shanahan

Vice Chairman

/s/ James B. Lovelace

James B. Lovelace

President

August 6, 2009

For current information about the fund, visit americanfunds.com.

Summary investment portfolio, June 30, 2009

unaudited

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	18.99	%
Consumer staples	11.17
Industrials	9.98
Health care	9.77
Energy	8.82
Other industries	26.87
Convertible securities	0.72
Bonds & notes	3.06
Short-term securities & other assets less liabilities	10.62

[end pie chart]

				Value			Percent of
Common stocks - 85.39%	Shares				(000	)	net assets

Energy - 8.82%
Baker Hughes Inc.		10,425,000		$	379,887			.71	%
Chevron Corp.		6,332,278			419,513			.78
ConocoPhillips		16,819,140			707,413			1.32
Royal Dutch Shell PLC, Class A (ADR)		16,470,000			826,629
Royal Dutch Shell PLC, Class B (1)		2,533,265			63,925
Royal Dutch Shell PLC, Class B (ADR)		2,925,498			148,791			1.94
Schlumberger Ltd.		18,174,999			983,449			1.84
Other securities					1,190,337			2.23
					4,719,944			8.82

Materials - 1.99%
Other securities					1,066,612			1.99


Industrials - 9.98%
Boeing Co.		17,271,200			734,026			1.37
Burlington Northern Santa Fe Corp.		4,778,600			351,418			.66
General Dynamics Corp.		8,395,800			465,043			.87
General Electric Co.		38,145,000			447,059			.84
Lockheed Martin Corp.		4,345,000			350,424			.65
United Technologies Corp.		10,040,000			521,679			.97
Other securities					2,469,475			4.62
					5,339,124			9.98

Consumer discretionary - 7.85%
Lowe's Companies, Inc.		20,731,000			402,389			.75
Target Corp.		21,173,300			835,710			1.56
Time Warner Inc.		20,926,933			527,149			.99
Toyota Motor Corp. (1)		11,725,000			443,232			.83
Other securities					1,991,729			3.72
					4,200,209			7.85

Consumer staples - 11.17%
Altria Group, Inc.		23,795,000			390,000			.73
Avon Products, Inc.		13,852,000			357,105			.67
Kraft Foods Inc., Class A		13,644,168			345,743			.65
Molson Coors Brewing Co., Class B		8,250,000			349,223			.65
PepsiCo, Inc.		13,765,000			756,524			1.41
Philip Morris International Inc.		38,665,000			1,686,567			3.15
Procter & Gamble Co.		6,980,146			356,686			.67
Walgreen Co.		11,401,100			335,192			.63
Other securities					1,401,029			2.61
					5,978,069			11.17

Health care - 9.77%
Abbott Laboratories		9,310,000			437,942			.82
Medtronic, Inc.		14,987,500			522,914			.98
Merck & Co., Inc.		35,600,000			995,376			1.86
Pfizer Inc		26,945,000			404,175			.75
Roche Holding AG (1)		4,702,500			640,093			1.20
Schering-Plough Corp.		13,086,300			328,728			.61
Other securities					1,898,775			3.55
					5,228,003			9.77

Financials - 4.35%
Banco Santander, SA (1)		49,455,000			596,630
Banco Santander, SA (ADR)		3,300,000			39,930			1.19
Bank of America Corp.		32,799,382			432,952			.81
Other securities					1,257,519			2.35
					2,327,031			4.35

Information technology - 18.99%
Cisco Systems, Inc. (2)		21,220,400			395,548			.74
Google Inc., Class A (2)		1,316,480			555,015			1.04
Hewlett-Packard Co.		18,900,000			730,485			1.36
Intel Corp.		38,265,000			633,286			1.18
International Business Machines Corp.		5,535,000			577,965			1.08
Microsoft Corp.		82,348,100			1,957,414			3.66
Nokia Corp. (1)		18,000,000			262,602
Nokia Corp. (ADR)		5,652,400			82,412			.64
Oracle Corp.		64,695,100			1,385,769			2.59
Taiwan Semiconductor Manufacturing Co. Ltd. (1)		286,216,974			476,026			.89
Texas Instruments Inc.		24,065,000			512,584			.96
Yahoo! Inc. (2)		35,732,100			559,565			1.05
Other securities					2,030,996			3.80
					10,159,667			18.99

Telecommunication services - 6.04%
AT&T Inc.		66,695,900			1,656,726			3.09
Verizon Communications Inc.		29,770,400			914,844			1.71
Other securities					661,451			1.24
					3,233,021			6.04

Utilities - 4.13%
Dominion Resources, Inc.		12,263,824			409,857			.77
Exelon Corp.		13,360,600			684,196			1.28
Other securities					1,113,842			2.08
					2,207,895			4.13

Miscellaneous - 2.30%
Other common stocks in initial period of acquisition					1,235,105			2.30


Total common stocks (cost: $46,698,990,000)					45,694,680			85.39




Preferred stocks - 0.20%

Financials - 0.20%
Other securities					106,571			.20


Miscellaneous - 0.00%
Other preferred stocks in initial period of acquisition					152			.00


Total preferred stocks (cost: $97,154,000)					106,723			.20



Rights & warrants - 0.01%

Miscellaneous - 0.01%
Other rights & warrants in initial period of acquisition					6,026			.01

Total rights & warrants (cost: $19,505,000)					6,026			.01



Convertible securities - 0.72%

Other - 0.65%
Fannie Mae, Series 2004-1, 5.375% convertible preferred		820			820			.00
Fannie Mae, Series 2008-1, 8.75% noncumulative convertible preferred		1,218,000			1,084			.00
Other securities					349,112			.65
					351,016			.65

Miscellaneous - 0.07%
Other convertible securities in initial period of acquisition					31,699			.07


Total convertible securities (cost: $861,494,000)					382,715			.72



	Principal amount
Bonds & notes - 3.06%		(000	)

Consumer discretionary - 0.38%
Time Warner Inc. 5.875% 2016	$	20,000			19,739			.04
Other securities					181,723			.34
					201,462			.38

Health care - 0.31%
Pfizer Inc. 6.20% 2019		20,000			21,913			.04
Roche Holdings Inc. 5.00%-6.00% 2014-2019 (3)		30,000			31,925			.06
Other securities					114,721			.21
					168,559			.31

Telecommunication services - 0.16%
AT&T Inc. 4.85%-5.50% 2014-2018		30,000			30,577			.06
Verizon Communications Inc. 5.55% 2014 (3)		20,000			21,254			.04
Other securities					35,388			.06
					87,219			.16

Mortgage-backed obligations (4) - 0.88%
Fannie Mae 4.00%-7.00% 2023-2038		303,712			315,699			.59
Freddie Mac 5.00%-5.50% 2038		153,172			157,653			.29
					473,352			.88

Bonds & notes of U.S. government & government agencies - 0.27%
Fannie Mae 2.50% 2014		25,000			24,538			.05
Federal Home Loan Bank 3.625% 2013		50,000			51,746			.10
Freddie Mac 1.50% 2011		5,000			5,044			.01
U.S. Treasury 0.875%-4.625% 2011-2017		60,000			61,060			.11
					142,388			.27

Other - 1.06%
Other securities					566,771			1.06


Total bonds & notes (cost: $1,563,346,000)					1,639,751			3.06



Short-term securities - 10.69%

Fannie Mae 0.15%-0.40% due 7/1-12/29/2009		885,200			884,700			1.65
Federal Home Loan Bank 0.16%-0.925% due 7/1/2009-6/8/2010 (5)		1,211,412			1,210,774			2.26
Freddie Mac 0.17%-0.75% due 7/6-12/7/2009		1,593,798			1,592,523			2.98
Medtronic Inc. 0.19% due 7/22/2009 (3)		20,700			20,698			.04
Pfizer Inc 0.20%-0.34% due 7/8-12/28/2009 (3)		256,400			256,256			.48
U.S. Treasury Bills 0.133%-0.532% due 7/2/2009-5/6/2010		1,207,770			1,207,165			2.26
Other securities					546,510			1.02


Total short-term securities (cost: $5,718,744,000)					5,718,626			10.69


Total investment securities (cost: $54,959,233,000)					53,548,521			100.07
Other assets less liabilities					(35,681	)		(0.07	)

Net assets				$	53,512,840			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. Some of these securities (with aggregate value of $2,474,000, which represented less than .01% of the net assets of the fund) may be subject to legal or contractual restrictions on resale.

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The value of the fund's holdings in affiliated companies is included in "Other securities" under their respective industry sectors in the preceding summary investment portfolio. Further details on these holdings and related transactions during the six months ended June 30, 2009, appear below.

	Beginning shares		Additions		Reductions		Ending shares			Dividend income (000	)		Value of affiliate at 6/30/09 (000	)
Limited Brands, Inc.		20,309,759		625,184		-		20,934,943	$	6,280		$	250,591
United States Steel Corp. (6)		3,060,000		4,842,000		970,408		6,931,592		1,313			-
Textron Inc. (6)		12,430,000		2,325,000		1,733,684		13,021,316		488			-
									$	8,081		$	250,591

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

(1) Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Miscellaneous" and "Other securities," was $5,351,279,000, which represented 10.00% of the net assets of the fund. This amount includes $5,134,679,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

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

(3) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $763,916,000, which represented 1.43% of the net assets of the fund.

(4) Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

(5) Coupon rate may change periodically.

(6) Unaffiliated issuer at 6/30/2009.

Key to abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities			unaudited
at June 30, 2009	(dollars in thousands)

Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $54,727,926)	$	53,297,930
Affiliated issuer (cost: $231,307)		250,591	$	53,548,521
Cash denominated in currencies other than U.S. dollars
(cost: $15,015)				15,015
Cash				151
Receivables for:
Sales of investments		107,112
Sales of fund's shares		34,174
Dividends and interest		119,369		260,655
				53,824,342
Liabilities:
Payables for:
Purchases of investments		212,067
Repurchases of fund's shares		62,351
Investment advisory services		10,852
Services provided by affiliates		20,726
Directors' and advisory board's deferred compensation		5,006
Other		500		311,502
Net assets at June 30, 2009			$	53,512,840

Net assets consist of:
Capital paid in on shares of capital stock			$	58,129,231
Undistributed net investment income				186,204
Accumulated net realized loss				(3,392,602	)
Net unrealized depreciation				(1,409,993	)
Net assets at June 30, 2009			$	53,512,840

(dollars and shares in thousands, except per-share amounts)

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

Class A		2,500,000	$	43,007,521		1,973,463	$	21.79
Class B		250,000		1,983,518		91,389		21.70
Class C		250,000		1,952,792		90,183		21.65
Class F-1		250,000		1,002,887		46,078		21.76
Class F-2		350,000		277,933		12,756		21.79
Class 529-A		325,000		965,917		44,376		21.77
Class 529-B		75,000		174,888		8,053		21.72
Class 529-C		150,000		268,955		12,381		21.72
Class 529-E		75,000		41,583		1,914		21.73
Class 529-F-1		75,000		17,094		786		21.75
Class R-1		75,000		52,167		2,404		21.70
Class R-2		100,000		507,299		23,362		21.71
Class R-3		150,000		633,537		29,129		21.75
Class R-4		75,000		645,030		29,647		21.76
Class R-5		150,000		1,632,421		74,930		21.79
Class R-6		150,000		349,298		16,031		21.79
Total		5,000,000	$	53,512,840		2,456,882

(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Classes A and 529-A, for which the maximum offering prices per share were $23.12 and $23.10, respectively.

See Notes to Financial Statements

Statement of operations				unaudited
for the six months ended June 30, 2009	(dollars in thousands)

Investment income:
Income:
Dividend (net of non-U.S.
taxes of $23,707; also includes
$8,081 from affiliates)	$	763,626
Interest		55,014		$	818,640


Fees and expenses*:
Investment advisory services		60,560
Distribution services		74,075
Transfer agent services		34,424
Administrative services		7,173
Reports to shareholders		2,046
Registration statement and prospectus		1,437
Directors' and advisory board's compensation		958
Auditing and legal		84
Custodian		802
State and local taxes		543
Other		2,166			184,268
Net investment income					634,372

Net realized loss and unrealized
appreciation on investments and currency:
Net realized (loss) gain on:
Investments (including $9,993 net gain from affiliates)		(1,766,328	)
Currency transactions		1,592			(1,764,736	)
Net unrealized appreciation on:
Investments		3,690,048
Currency translations		517			3,690,565
Net realized loss and unrealized appreciation
on investments and currency					1,925,829
Net increase in net assets resulting
from operations				$	2,560,201

(*) 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)

	Six months			Year ended
	ended June 30, 2009*			December 31, 2008
Operations:
Net investment income	$	634,372		$	1,588,685
Net realized loss on investments and currency transactions		(1,764,736	)		(1,625,009	)
Net unrealized appreciation (depreciation) on investments and currency translations		3,690,565			(29,848,883	)
Net increase (decrease) in net assets resulting from operations		2,560,201			(29,885,207	)


Dividends paid to shareholders from net investment income		(719,177	)		(1,723,752	)


Net capital share transactions		(1,443,910	)		(4,477,943	)

Total increase (decrease) in net assets		397,114			(36,086,902	)

Net assets:
Beginning of period		53,115,726			89,202,628
End of period (including undistributed
net investment income: $186,204 and $271,009, respectively)	$	53,512,840		$	53,115,726

*Unaudited.

See Notes to Financial Statements

Notes to financial statements

unaudited

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 has 16 share classes consisting of five retail share classes, five 529 college savings plan share classes and six retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The six retirement plan share classes (R-1, R-2, R-3, R-4, R-5 and R-6) are generally offered only through eligible employer-sponsored retirement plans. The fund’s share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Classes A and 529-A	Up to 5.75%	None (except 1% for certain redemptions within one year of purchase without an initial sales charge)	None
Classes B and 529-B*	None	Declines from 5% to 0% for redemptions within six years of purchase	Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years
Class C	None	1% for redemptions within one year of purchase	Class C converts to Class F-1 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Classes F-1, F-2 and 529-F-1	None	None	None
Classes R-1, R-2, R-3, R-4, R-5 and R-6	None	None	None

*Effective April 21, 2009, Class B and 529-B shares of the fund are no longer available for purchase.

On May 1, 2009, the fund made an additional retirement plan share class (Class R-6) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”). Refer to the fund’s retirement plan prospectus for more details.

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

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

Net asset value – The fund generally determines its net asset value as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

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 one or more independent pricing vendors when such prices are available. However, where the investment adviser deems it appropriate to do so, such securities will be valued in good faith at the mean quoted bid and asked prices that are reasonably and timely available (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Vendors base bond prices on, among other things, valuation matrices that incorporate dealer-supplied valuations, proprietary pricing models and evaluations of the yield curve as of approximately 3:00 p.m. New York time. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity.

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

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

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

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

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

2. Risk factors

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

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

Investments in securities issued by entities based outside the U.S. 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. Investments in securities issued by entities domiciled in the U.S. may also be subject to many of these risks.

3. Taxation and distributions

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

As of and during the period ended June 30, 2009, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

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

Non-U.S. taxation – Dividend and interest income is recorded net of non-U.S. taxes paid.

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; net capital losses; 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 components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2008, the components of distributable earnings on a tax basis were as follows:

(dollars in thousands)
Undistributed ordinary income	$	289,123
Post-October currency loss deferrals (realized during the period November 1, 2008, through December 31, 2008)*		(737	)
Capital loss carryforward expiring 2016†		(657,170	)
Post-October capital loss deferrals (realized during the period November 1, 2008, through December 31, 2008)*		(687,649	)

*These deferrals are considered incurred in the subsequent year.
†The capital loss carryforward will be used to offset any capital gains realized by the fund in the current year or in subsequent years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains.

As of June 30, 2009, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

(dollars in thousands)
Gross unrealized appreciation on investment securities	$	8,216,489
Gross unrealized depreciation on investment securities		(9,640,977	)
Net unrealized depreciation on investment securities		(1,424,488	)
Cost of investment securities		54,973,009

Ordinary income distributions paid to shareholders from net investment income were as follows (dollars in thousands):

Share class	Six months ended June 30, 2009		Year ended December 31, 2008

Class A	$	595,270	$	1,457,129
Class B		21,516		53,327
Class C		20,208		45,028
Class F-1		14,031		33,642
Class F-2*		1,657		803
Class 529-A		12,736		27,448
Class 529-B		1,722		3,525
Class 529-C		2,609		5,170
Class 529-E		494		1,033
Class 529-F-1		232		469
Class R-1		516		992
Class R-2		4,781		9,472
Class R-3		7,542		17,275
Class R-4		5,596		9,247
Class R-5		28,063		59,192
Class R-6†		2,204		-
Total	$	719,177	$	1,723,752


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

4. Fees and transactions with related parties

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

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.390% on the first $1 billion of month-end net assets and decreasing to 0.219% on such assets in excess of $89 billion. For the six months ended June 30, 2009, the investment advisory services fee was $60,560,000, which was equivalent to an annualized rate of 0.244% of average 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 Classes F-2, R-5 and R-6. 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 with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Classes A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of June 30, 2009, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.

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

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

Administrative services – The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Classes A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5 and 0.05% for Class R-6) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. The quarterly fee is based on a declining series of annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described on the previous page for the six months ended June 30, 2009, 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	$47,364	$32,832	Not applicable	Not applicable	Not applicable
Class B	9,712	1,592	Not applicable	Not applicable	Not applicable
Class C	9,091	Included in administrative services	$1,366	$243	Not applicable
Class F-1	1,134		705	68	Not applicable
Class F-2	Not applicable		77	5	Not applicable
Class 529-A	931		558	87	$434
Class 529-B	803		103	31	81
Class 529-C	1,197		155	41	121
Class 529-E	93		24	4	19
Class 529-F-1	-		9	1	7
Class R-1	225		30	11	Not applicable
Class R-2	1,699		337	882	Not applicable
Class R-3	1,397		411	214	Not applicable
Class R-4	429		252	11	Not applicable
Class R-5	Not applicable		855	4	Not applicable
Class R-6*	Not applicable		27	-†	Not applicable
Total	$74,075	$34,424	$4,909	$1,602	$662

* Class R-6 was offered beginning May 1, 2009.

† Amount less than one thousand.

Directors’ and advisory board’s deferred 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’s compensation of $958,000, shown on the accompanying financial statements, includes $683,000 in current fees (either paid in cash or deferred) and a net increase of $275,000 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 June 30, 2009, 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 June 30, 2009, the net asset value of Class A shares would have been reduced by $0.01 per share.

6. Disclosure of fair value measurements

The fund classifies its assets and liabilities into three levels based on the method used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are generally high-quality and liquid; however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of June 30, 2009 (dollars in thousands):

	Level 1		Level 2			Level 3		Total
Investment securities:
Common stocks:
Energy	$	4,119,147	$	600,797	*	$	-	$	4,719,944
Materials		1,021,520		45,092	*		-		1,066,612
Industrials		5,204,334		134,790	*		-		5,339,124
Consumer discretionary		3,624,776		575,433	*		-		4,200,209
Consumer staples		5,978,069		-			-		5,978,069
Health care		4,298,763		929,240	*		-		5,228,003
Financials		1,547,752		778,575	*		704		2,327,031
Information technology		9,049,174		1,110,493	*		-		10,159,667
Telecommunication services		2,957,396		275,625	*		-		3,233,021
Utilities		1,781,858		426,037	*		-		2,207,895
Miscellaneous		982,534		252,571	*		-		1,235,105
Preferred stocks		152		106,571			-		106,723
Rights & warrants		-		6,026	*		-		6,026
Convertible securities		96,348		286,367			-		382,715
Bonds & notes		-		1,639,751			-		1,639,751
Short-term securities		-		5,718,626			-		5,718,626
Total	$	40,661,823	$	12,885,994		$	704	$	53,548,521

(*) Includes certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading; therefore, $5,134,679,000 of investment securities were classified as Level 2 instead of Level 1.

The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the six months ended June 30, 2009 (dollars in thousands):
	Beginning value at 1/1/2009		Net purchases and sales		Net unrealized appreciation (†)	Net transfers out of Level 3			Ending value at 6/30/2009
Investment securities	$	451	$	127,013	47,384	$	(174,144	)	$	704

Net unrealized appreciation during the period on Level 3 investment securities held at June 30, 2009 (dollars in thousands) (†):									$	704

(†) Net unrealized appreciation is included in the related amounts on investments in the statement of operations.

7. Capital share transactions

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

Share class	Sales(1)				Reinvestments of dividends				Repurchases(1)						Net (decrease) increase
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Six months ended June 30, 2009
Class A	$	1,879,264		93,482	$	555,771		29,748	$	(4,152,699	)		(213,014	)	$	(1,717,664	)		(89,784	)
Class B		47,557		2,434		20,796		1,132		(337,493	)		(17,173	)		(269,140	)		(13,607	)
Class C		119,643		5,973		19,159		1,041		(224,472	)		(11,628	)		(85,670	)		(4,614	)
Class F-1		150,074		7,491		12,418		666		(201,707	)		(10,257	)		(39,215	)		(2,100	)
Class F-2		212,576		9,905		1,387		74		(23,868	)		(1,190	)		190,095			8,789
Class 529-A		67,811		3,380		12,720		681		(50,237	)		(2,581	)		30,294			1,480
Class 529-B		5,488		282		1,721		93		(7,989	)		(408	)		(780	)		(33	)
Class 529-C		22,981		1,148		2,605		142		(16,410	)		(842	)		9,176			448
Class 529-E		3,369		169		493		27		(2,328	)		(118	)		1,534			78
Class 529-F-1		2,969		149		235		12		(1,494	)		(74	)		1,710			87
Class R-1		9,615		480		515		28		(4,778	)		(245	)		5,352			263
Class R-2		79,839		4,013		4,776		259		(65,002	)		(3,302	)		19,613			970
Class R-3		107,036		5,339		7,533		404		(73,632	)		(3,754	)		40,937			1,989
Class R-4		380,290		17,577		5,591		291		(54,222	)		(2,760	)		331,659			15,108
Class R-5		305,784		14,737		27,797		1,499		(628,758	)		(30,133	)		(295,177	)		(13,897	)
Class R-62		331,340		15,939		2,204		100		(178	)		(8	)		333,366			16,031
Total net increase
(decrease)	$	3,725,636		182,498	$	675,721		36,197	$	(5,845,267	)		(297,487	)	$	(1,443,910	)		(78,792	)

Year ended December 31, 2008
Class A	$	4,959,770		190,181	$	1,361,338		51,340	$	(10,650,133	)		(408,280	)	$	(4,329,025	)		(166,759	)
Class B		174,733		6,561		51,473		1,956		(792,349	)		(29,644	)		(566,143	)		(21,127	)
Class C		365,037		14,160		42,819		1,639		(654,285	)		(25,145	)		(246,429	)		(9,346	)
Class F-1		520,534		19,727		29,884		1,129		(565,214	)		(22,575	)		(14,796	)		(1,719	)
Class F-23		99,882		4,697		696		33		(15,463	)		(763	)		85,115			3,967
Class 529-A		176,758		6,469		27,443		1,044		(119,106	)		(4,460	)		85,095			3,053
Class 529-B		20,173		737		3,525		136		(19,589	)		(738	)		4,109			135
Class 529-C		53,477		1,956		5,168		199		(42,855	)		(1,611	)		15,790			544
Class 529-E		8,178		302		1,033		39		(5,341	)		(201	)		3,870			140
Class 529-F-1		5,392		193		469		18		(2,199	)		(84	)		3,662			127
Class R-1		26,927		971		990		38		(18,795	)		(732	)		9,122			277
Class R-2		186,202		6,843		9,469		364		(162,465	)		(5,943	)		33,206			1,264
Class R-3		268,308		9,711		17,262		649		(403,488	)		(14,597	)		(117,918	)		(4,237	)
Class R-4		181,143		6,600		9,244		353		(139,977	)		(5,160	)		50,410			1,793
Class R-5		737,339		27,269		58,764		2,249		(290,114	)		(10,712	)		505,989			18,806
Total net increase
(decrease)	$	7,783,853		296,377	$	1,619,577		61,186	$	(13,881,373	)		(530,645	)	$	(4,477,943	)		(173,082	)

1Includes exchanges between share classes of the fund.
2Class R-6 was offered beginning May 1, 2009.
3Class F-2 was offered beginning August 1, 2008.

8. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $7,229,636,000 and $6,443,495,000, respectively, during the six months ended June 30, 2009.

9. Subsequent events

As of August 6, 2009, the date the financial statements were available to be issued, no subsequent events or transactions had occurred that would have materially impacted the financial statements as presented.

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)(4)			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(4)

Class A:	Six months ended 6/30/2009(5)	$	20.96	$	.26	$	.87		$	1.13		$	(.30	)	$	-		$	(.30	)	$	21.79		5.64	%	$	43,008		.68	%(6)		.68	%(6)		2.63	%(6)
	Year ended 12/31/2008		32.95		.63		(11.94	)		(11.31	)		(.68	)		-			(.68	)		20.96		(34.74	)		43,244		.59			.57			2.25
	Year ended 12/31/2007		33.51		.72		1.24			1.96			(.66	)		(1.86	)		(2.52	)		32.95		5.94			73,480		.56			.54			2.05
	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

Class B:	Six months ended 6/30/2009(5)		20.87		.19		.86			1.05			(.22	)		-			(.22	)		21.70		5.23			1,983		.1.44	(6)		1.44	(6)		1.87	(6)
	Year ended 12/31/2008		32.81		.41		(11.89	)		(11.48	)		(.46	)		-			(.46	)		20.87		(35.25	)		2,191		1.36			1.34			1.48
	Year ended 12/31/2007		33.37		.45		1.24			1.69			(.39	)		(1.86	)		(2.25	)		32.81		5.15			4,138		1.33			1.31			1.28
	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

Class C:	Six months ended 6/30/2009(5)		20.82		.18		.87			1.05			(.22	)		-			(.22	)		21.65		5.25			1,953		1.45	(6)		1.45	(6)		1.85	(6)
	Year ended 12/31/2008		32.74		.40		(11.86	)		(11.46	)		(.46	)		-			(.46	)		20.82		(35.29	)		1,974		1.41			1.38			1.44
	Year ended 12/31/2007		33.31		.43		1.23			1.66			(.37	)		(1.86	)		(2.23	)		32.74		5.08			3,409		1.38			1.36			1.23
	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

Class F-1:	Six months ended 6/30/2009(5)		20.93		.26		.87			1.13			(.30	)		-			(.30	)		21.76		5.65			1,003		.67	(6)		.67	(6)		2.63	(6)
	Year ended 12/31/2008		32.91		.62		(11.93	)		(11.31	)		(.67	)		-			(.67	)		20.93		(34.77	)		1,009		.62			.60			2.23
	Year ended 12/31/2007		33.48		.70		1.24			1.94			(.65	)		(1.86	)		(2.51	)		32.91		5.87			1,642		.60			.58			2.01
	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

Class F-2:	Six months ended 6/30/2009(5)		20.96		.28		.88			1.16			(.33	)		-			(.33	)		21.79		5.79			278		.42	(6)		.42	(6)		2.77	(6)
	Period from 8/1/2008 to 12/31/2008		28.53		.26		(7.47	)		(7.21	)		(.36	)		-			(.36	)		20.96		(25.39	)		83		.17			.16			1.24

Class 529-A:	Six months ended 6/30/2009(5)		20.93		.26		.87			1.13			(.29	)		-			(.29	)		21.77		5.66			966		.74	(6)		.74	(6)		2.57	(6)
	Year ended 12/31/2008		32.91		.60		(11.92	)		(11.32	)		(.66	)		-			(.66	)		20.93		(34.79	)		898		.67			.65			2.19
	Year ended 12/31/2007		33.48		.68		1.24			1.92			(.63	)		(1.86	)		(2.49	)		32.91		5.83			1,311		.65			.63			1.95
	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

Class 529-B:	Six months ended 6/30/2009(5)		20.89		.18		.86			1.04			(.21	)		-			(.21	)		21.72		5.19			175		1.54	(6)		1.54	(6)		1.76	(6)
	Year ended 12/31/2008		32.83		.38		(11.88	)		(11.50	)		(.44	)		-			(.44	)		20.89		(35.29	)		169		1.47			1.45			1.38
	Year ended 12/31/2007		33.40		.40		1.24			1.64			(.35	)		(1.86	)		(2.21	)		32.83		4.99			261		1.46			1.43			1.15
	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

Class 529-C:	Six months ended 6/30/2009(5)		20.89		.18		.87			1.05			(.22	)		-			(.22	)		21.72		5.20			269		1.53	(6)		1.53	(6)		1.77	(6)
	Year ended 12/31/2008		32.84		.38		(11.89	)		(11.51	)		(.44	)		-			(.44	)		20.89		(35.31	)		249		1.46			1.44			1.39
	Year ended 12/31/2007		33.41		.40		1.24			1.64			(.35	)		(1.86	)		(2.21	)		32.84		4.99			374		1.45			1.43			1.15
	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

Class 529-E:	Six months ended 6/30/2009(5)	$	20.89	$	.23	$	.87		$	1.10		$	(.26	)	$	-		$	(.26	)	$	21.73		5.51	%	$	42		1.03	%(6)		1.03	%(6)		2.28	%(6)
	Year ended 12/31/2008		32.85		.52		(11.90	)		(11.38	)		(.58	)		-			(.58	)		20.89		(34.98	)		38		.96			.94			1.90
	Year ended 12/31/2007		33.42		.58		1.24			1.82			(.53	)		(1.86	)		(2.39	)		32.85		5.52			56		.95			.92			1.66
	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

Class 529-F-1:	Six months ended 6/30/2009(5)		20.92		.28		.86			1.14			(.31	)		-			(.31	)		21.75		5.72			17		.53	(6)		.53	(6)		2.78	(6)
	Year ended 12/31/2008		32.90		.66		(11.92	)		(11.26	)		(.72	)		-			(.72	)		20.92		(34.66	)		15		.46			.44			2.40
	Year ended 12/31/2007		33.47		.75		1.24			1.99			(.70	)		(1.86	)		(2.56	)		32.90		6.05			19		.45			.42			2.15
	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

Class R-1:	Six months ended 6/30/2009(5)		20.87		.19		.87			1.06			(.23	)		-			(.23	)		21.70		5.26			52		1.44	(6)		1.44	(6)		1.87	(6)
	Year ended 12/31/2008		32.81		.40		(11.88	)		(11.48	)		(.46	)		-			(.46	)		20.87		(35.25	)		45		1.39			1.36			1.48
	Year ended 12/31/2007		33.39		.42		1.23			1.65			(.37	)		(1.86	)		(2.23	)		32.81		5.06			61		1.40			1.38			1.20
	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

Class R-2:	Six months ended 6/30/2009(5)		20.88		.17		.87			1.04			(.21	)		-			(.21	)		21.71		5.17			507		1.56	(6)		1.56	(6)		1.75	(6)
	Year ended 12/31/2008		32.83		.38		(11.89	)		(11.51	)		(.44	)		-			(.44	)		20.88		(35.33	)		468		1.48			1.46			1.37
	Year ended 12/31/2007		33.40		.42		1.23			1.65			(.36	)		(1.86	)		(2.22	)		32.83		5.04			694		1.44			1.39			1.19
	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

Class R-3:	Six months ended 6/30/2009(5)		20.92		.23		.87			1.10			(.27	)		-			(.27	)		21.75		5.48			634		.99	(6)		.99	(6)		2.31	(6)
	Year ended 12/31/2008		32.88		.53		(11.90	)		(11.37	)		(.59	)		-			(.59	)		20.92		(34.94	)		568		.92			.90			1.91
	Year ended 12/31/2007		33.45		.58		1.24			1.82			(.53	)		(1.86	)		(2.39	)		32.88		5.52			1,032		.94			.92			1.66
	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

Class R-4:	Six months ended 6/30/2009(5)		20.93		.26		.88			1.14			(.31	)		-			(.31	)		21.76		5.67			645		.67	(6)		.67	(6)		2.56	(6)
	Year ended 12/31/2008		32.90		.61		(11.91	)		(11.30	)		(.67	)		-			(.67	)		20.93		(34.78	)		304		.65			.62			2.21
	Year ended 12/31/2007		33.48		.68		1.23			1.91			(.63	)		(1.86	)		(2.49	)		32.90		5.85			419		.65			.63			1.95
	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

Class R-5:	Six months ended 6/30/2009(5)		20.95		.29		.88			1.17			(.33	)		-			(.33	)		21.79		5.86			1,632		.37	(6)		.37	(6)		2.93	(6)
	Year ended 12/31/2008		32.95		.69		(11.94	)		(11.25	)		(.75	)		-			(.75	)		20.95		(34.60	)		1,861		.35			.33			2.52
	Year ended 12/31/2007		33.51		.79		1.25			2.04			(.74	)		(1.86	)		(2.60	)		32.95		6.18			2,307		.35			.33			2.25
	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

Class R-6:	Period from 5/1/2009 to 6/30/2009(5)		21.24		.11		.58			.69			(.14	)		-			(.14	)		21.79		5.95			349		.05			.05			.53

	Six months ended June 30,			Year ended June 30
	2009(5)			2008			2007			2006			2005			2004

Portfolio turnover rate for all classes of shares		15	%		31	%		22	%		20	%		19	%		19	%

(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 any applicable sales charges, including contingent deferred sales charges.

(4)This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.

(5)Unaudited.

(6)Annualized.

See Notes to Financial Statements

Expense example

unaudited

As a shareholder of the fund, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2009, through June 30, 2009).

Actual expenses:

The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes:

The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Notes:

There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually), that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1, F-2 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would be lower by the amount of these fees.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning account value 1/1/2009		Ending account value 6/30/2009		Expenses paid during period*		Annualized expense ratio

Class A -- actual return	$	1,000.00	$	1,056.36	$	3.47		.68	%
Class A -- assumed 5% return		1,000.00		1,021.42		3.41		.68
Class B -- actual return		1,000.00		1,052.34		7.33		1.44
Class B -- assumed 5% return		1,000.00		1,017.65		7.20		1.44
Class C -- actual return		1,000.00		1,052.49		7.38		1.45
Class C -- assumed 5% return		1,000.00		1,017.60		7.25		1.45
Class F-1 -- actual return		1,000.00		1,056.49		3.42		.67
Class F-1 -- assumed 5% return		1,000.00		1,021.47		3.36		.67
Class F-2 -- actual return		1,000.00		1,057.86		2.14		.42
Class F-2 -- assumed 5% return		1,000.00		1,022.71		2.11		.42
Class 529-A -- actual return		1,000.00		1,056.59		3.77		.74
Class 529-A -- assumed 5% return		1,000.00		1,021.12		3.71		.74
Class 529-B -- actual return		1,000.00		1,051.88		7.83		1.54
Class 529-B -- assumed 5% return		1,000.00		1,017.16		7.70		1.54
Class 529-C -- actual return		1,000.00		1,051.99		7.78		1.53
Class 529-C -- assumed 5% return		1,000.00		1,017.21		7.65		1.53
Class 529-E -- actual return		1,000.00		1,055.08		5.25		1.03
Class 529-E -- assumed 5% return		1,000.00		1,019.69		5.16		1.03
Class 529-F-1 -- actual return		1,000.00		1,057.25		2.70		.53
Class 529-F-1 -- assumed 5% return		1,000.00		1,022.17		2.66		.53
Class R-1 -- actual return		1,000.00		1,052.60		7.33		1.44
Class R-1 -- assumed 5% return		1,000.00		1,017.65		7.20		1.44
Class R-2 -- actual return		1,000.00		1,051.72		7.94		1.56
Class R-2 -- assumed 5% return		1,000.00		1,017.06		7.80		1.56
Class R-3 -- actual return		1,000.00		1,054.79		5.04		.99
Class R-3 -- assumed 5% return		1,000.00		1,019.89		4.96		.99
Class R-4 -- actual return		1,000.00		1,056.69		3.42		.67
Class R-4 -- assumed 5% return		1,000.00		1,021.47		3.36		.67
Class R-5 -- actual return		1,000.00		1,058.58		1.89		.37
Class R-5 -- assumed 5% return		1,000.00		1,022.96		1.86		.37
Class R-6 -- actual return †		1,000.00		1,059.47		.52		.31
Class R-6 -- assumed 5% return †		1,000.00		1,023.26		1.56		.31

*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period, and divided by 365 (to reflect the one-half year period).

† The period for the “annualized expense ratio” and “actual return” line is based on the number of days from May 1, 2009 (the initial sale of the share class), through June 30, 2009, and accordingly, is not representative of a full period. The “assumed 5% return” line is based on 181 days.

Approval of Investment Advisory and Service Agreement

The fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through April 30, 2010. The board approved the agreement following the recommendation of the fund’s Governance and Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided and that approving the agreement was in the best interests of the fund and its shareholders.

In reaching this decision, the board and the committee took into account information furnished to them throughout the year, as well as information prepared specifically in connection with their review of the agreement and were advised by their independent counsel. They considered the factors discussed below, among others, but did not identify any single issue or particular piece of information that, in isolation, was the controlling factor.

1. Nature, extent and quality of services

The board and the committee considered the depth and quality of CRMC’s investment management process, including its global research capabilities; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of its organization; and the ongoing evolution of CRMC’s organizational structure designed to maintain and strengthen these qualities. The board and the committee considered, among other things, the impact of current market conditions on the fund and CRMC. The board and the committee also considered the nature, extent and quality of administrative, compliance and shareholder services provided by CRMC to the fund under the agreement and other agreements as well as the benefits to fund shareholders from investing in a fund that is part of a large family of funds. The board and the committee concluded that the nature, extent and quality of the services provided by CRMC have benefited and should continue to benefit the fund and its shareholders.

2. Investment results

The board and the committee considered the investment results of the fund in light of its objective of pursuing long-term growth of capital and income. They compared the fund’s total returns with those of other relevant funds (including the other funds that are the basis of the Lipper index for the category in which the fund is included) and market data such as relevant market indices, in each case as available at the time of the related meetings. In addition to the information reviewed by the board and the committee, this report, including the letter to shareholders and related disclosures, contains certain information about the fund’s investment results. The board and the committee concluded that the fund’s long-term results have been satisfactory and that CRMC’s record in managing the fund indicated that its continued management should benefit the fund and its shareholders.

3. Advisory fees and total expenses

The board and the committee compared the advisory fees and total expense levels of the fund to those of other relevant funds. They observed that the fund’s advisory fees and expenses remain significantly below those of most other relevant funds. The board and the committee also noted the breakpoint discounts in the fund’s advisory fee structure that reduce the level of fees charged by CRMC to the fund as fund assets increase. In addition, they reviewed information regarding the advisory fees paid by institutional clients of an affiliate of CRMC with investment mandates similar to those of the fund. They noted that, although the fees paid by those clients generally were lower than those paid by the fund, the differences appropriately reflected the significant investment, operational and regulatory differences between advising mutual funds and institutional clients. The board and the committee concluded that the fund’s cost structure was fair and reasonable in relation to the services provided, and that the shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund.

4. Ancillary benefits

The board and the committee considered a variety of other benefits received by CRMC and its affiliates as a result of CRMC’s relationship with the fund and the other American Funds, including fees for administrative services provided to certain share classes; fees paid to CRMC’s affiliated transfer agent; sales charges and distribution fees received and retained by the fund’s principal underwriter, an affiliate of CRMC; and possible ancillary benefits to CRMC’s institutional management affiliates. The board and the committee reviewed CRMC’s portfolio trading practices, noting that while CRMC receives the benefit of research provided by broker-dealers executing portfolio transactions on behalf of the fund, it does not obtain third-party research or other services in return for allocating brokerage to such broker-dealers. The board and the committee took these ancillary benefits into account in evaluating the reasonableness of the advisory fees and other amounts paid to CRMC by the fund.

5. Adviser financial information

The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, including personnel, systems and resources of investment, compliance, trading, accounting and other administrative operations. They considered CRMC’s costs and willingness to invest in technology, infrastructure and staff to maintain and expand services and capabilities, respond to industry and regulatory developments and attract and retain qualified personnel. They noted information previously received regarding the compensation structure for CRMC’s investment professionals. The board and the committee also compared CRMC’s profitability to the reported results of several large, publicly held investment management companies. The board and the committee noted the competitiveness and cyclicality of both the mutual fund industry and the capital markets, and the importance in that environment of CRMC’s long-term profitability for maintaining its independence, company culture and management continuity. They further considered the breakpoint discounts in the fund’s advisory fee structure and the impact of the termination of CRMC’s 10% advisory fee waiver effective December 31, 2008. The board and the committee concluded that the fund’s advisory fee structure reflected a reasonable sharing of benefits between CRMC and the fund’s shareholders.

Other share class results

unaudited

Classes B, C, F and 529

Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.

Average annual total returns for periods ended June 30, 2009:

1 year

5 years

Life of class

Class B shares1— first sold 3/15/00

Reflecting applicable contingent deferred sales

charge (CDSC), maximum of 5%, payable only

if shares are sold within six years of purchase

–26.53

–1.63

0.27

Not reflecting CDSC

–22.75

–1.31

0.27

Class C shares — first sold 3/15/01

Reflecting CDSC, maximum of 1%, payable only

if shares are sold within one year of purchase

–23.54

–1.36

0.07

Not reflecting CDSC

–22.78

–1.36

0.07

Class F-1 shares2 — first sold 3/15/01

Not reflecting annual asset-based fee charged

by sponsoring firm

–22.17

–0.59

0.86

Class F-2 shares2 — first sold 8/1/08

Not reflecting annual asset-based fee charged

by sponsoring firm

—

–21.08

Class 529-A shares4 — first sold 2/15/02

Reflecting 5.75% maximum sales charge

–26.66

–1.80

0.38

Not reflecting maximum sales charge

–22.18

–0.63

1.19

Class 529-B shares1,4 — first sold 2/15/02

Reflecting applicable CDSC, maximum of 5%, payable

only if shares are sold within six years of purchase

–26.58

–1.76

0.34

Not reflecting CDSC

–22.80

–1.44

0.34

Class 529-C shares4 — first sold 2/19/02

Reflecting CDSC, maximum of 1%, payable only

if shares are sold within one year of purchase

–23.58

–1.43

0.55

Not reflecting CDSC

–22.82

–1.43

0.55

Class 529-E shares2,4 — first sold 3/1/02

–22.42

–0.93

0.57

Class 529-F-1 shares2,4 — first sold 9/16/02

Not reflecting annual asset-based fee charged

by sponsoring firm

–22.03

–0.48

3.39

1These shares are no longer available for purchase.

2These shares are sold without any initial or contingent deferred sales charge.

3Results are cumulative total returns; they are not annualized.

4Results shown do not reflect the $10 account setup fee and an annual $10 account maintenance fee.

For information regarding the differences among the various share classes, please refer to the fund’s prospectus.

Offices

Offices of the fund and of the investment adviser

Capital Research and Management Company

333 South Hope Street

Los Angeles, CA 90071-1406

6455 Irvine Center Drive

Irvine, CA 92618

Transfer agent for shareholder accounts

American Funds Service Company

(Please write to the address near you.)

P.O. Box 6007

Indianapolis, IN 46206-6007

P.O. Box 2280

Norfolk, VA 23501-2280

Custodian of assets

JPMorgan Chase Bank

270 Park Avenue

New York, NY 10017-2070

Counsel

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, CA 90071-2899

Independent registered public accounting firm

PricewaterhouseCoopers LLP

350 South Grand Avenue

Los Angeles, CA 90071-2889

Principal underwriter

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, CA 90071-1406

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.

“American Funds Proxy Voting Procedures and Principles” — which describes how we vote proxies relating to portfolio securities — is available on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the U.S. Securities and Exchange Commission (SEC) for the 12 months ended June 30 by August 31. The proxy voting record is available free of charge on the SEC website at sec.gov and on the American Funds website.

A complete June 30, 2009, portfolio of The Investment Company of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).

The Investment Company of America files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. Additional information regarding the operation of the Public Reference Room may be obtained by calling the SEC’s Office of Investor Education and Advocacy at 800/SEC-0330. Additionally, the list of portfolio holdings is available by calling AFS.

This report is for the information of shareholders of The Investment Company of America, but it also may be used as sales literature when preceded or accompanied by the current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after September 30, 2009, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

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The right choice for the long term®

What makes American Funds different?

For nearly 80 years, we have followed a consistent philosophy to benefit our investors. Our 30 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 million shareholder accounts.

Our unique combination of strengths includes these five factors:

•	A long-term, value-oriented approach

We seek to buy securities at reasonable prices relative to their prospects and hold them for the long term.

•	An extensive global research effort

Our investment professionals travel the world to find the best investment opportunities and gain a comprehensive understanding of companies and markets.

•	The multiple portfolio counselor system

Our unique approach to portfolio management, developed 50 years ago, blends teamwork with individual accountability and has provided American Funds with a sustainable method of achieving fund objectives.

•	Experienced investment professionals

American Funds portfolio counselors have an average of 25 years of investment experience, providing a depth of knowledge and broad perspective that few organizations have.

•	A commitment to low management fees

The American Funds provide exceptional value for shareholders, with management fees that are among the lowest in the mutual fund industry.

American Funds span a range of investment objectives

• Growth funds

AMCAP Fund®

EuroPacific Growth Fund®

The Growth Fund of America®

The New Economy Fund®

New Perspective Fund®

New World Fund®

SMALLCAP World Fund®

• Growth-and-income funds

American Mutual Fund®

Capital World Growth and Income FundSM

Fundamental InvestorsSM

International Growth and Income FundSM

>The Investment Company of America®

Washington Mutual Investors FundSM

• Equity-income funds

Capital Income Builder®

The Income Fund of America®

• Balanced fund

American Balanced Fund®

• Bond funds

American High-Income TrustSM

The Bond Fund of AmericaSM

Capital World Bond Fund®

Intermediate Bond Fund of America®

Short-Term Bond Fund of AmericaSM

U.S. Government Securities FundSM

• Tax-exempt bond funds

American Funds Short-Term Tax-Exempt Bond FundSM

American High-Income Municipal Bond Fund®

Limited Term Tax-Exempt Bond Fund of AmericaSM

The Tax-Exempt Bond Fund of America®

State-specific tax-exempt funds

The Tax-Exempt Fund of California®

The Tax-Exempt Fund of Maryland®

The Tax-Exempt Fund of Virginia®

• Money market fund

American Funds Money Market FundSM

• American Funds Target Date Retirement Series®

The Capital Group Companies

American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust

Lit. No. MFGESR-904-0809P

Litho in USA BBC/B/8087-S20701

Printed on paper containing 10% post-consumer waste

Printed with inks containing soy and/or vegetable oil

ITEM 2 – Code of Ethics

[logo – American Funds®]

The Investment Company of America®

Investment portfolio

June 30, 2009

unaudited

Common stocks — 85.39%	Shares			Value (000)

ENERGY — 8.82%
Baker Hughes Inc.		10,425,000		$	379,887
BP PLC1		27,553,567			217,930
Canadian Natural Resources, Ltd.		430,000			22,634
Chevron Corp.		6,332,278			419,513
ConocoPhillips		16,819,140			707,413
Diamond Offshore Drilling, Inc.		2,118,400			175,933
Eni SpA1		4,225,000			100,197
Eni SpA (ADR)		770,000			36,506
Halliburton Co.		2,550,000			52,785
Hess Corp.		3,731,100			200,546
Marathon Oil Corp.		5,478,300			165,061
Royal Dutch Shell PLC, Class A (ADR)		16,470,000			826,629
Royal Dutch Shell PLC, Class B1		2,533,265			63,925
Royal Dutch Shell PLC, Class B (ADR)		2,925,498			148,791
Schlumberger Ltd.		18,174,999			983,449
TOTAL SA1		4,040,000			218,745
					4,719,944

MATERIALS — 1.99%
Air Products and Chemicals, Inc.		1,750,000			113,033
Alcoa Inc.		1,676,400			17,317
Barrick Gold Corp.		7,150,000			239,883
Dow Chemical Co.		2,450,000			39,543
MeadWestvaco Corp.		4,085,000			67,035
Monsanto Co.		440,200			32,724
Newmont Mining Corp.		4,790,000			195,767
Nucor Corp.		1,335,900			59,354
POSCO1		136,000			45,092
United States Steel Corp.		6,931,592			247,735
Weyerhaeuser Co.		300,000			9,129
					1,066,612

INDUSTRIALS — 9.98%
3M Co.		2,513,400			151,055
Boeing Co.		17,271,200			734,026
Burlington Northern Santa Fe Corp.		4,778,600			351,418
CSX Corp.		7,181,000			248,678
Cummins Inc.		3,880,000			136,615
Deere & Co.		7,550,000			301,623
FedEx Corp.		3,300,000			183,546
General Dynamics Corp.		8,395,800			465,043
General Electric Co.		38,145,000			447,059
Illinois Tool Works Inc.		6,400,000			238,976
Lockheed Martin Corp.		4,345,000			350,424
Mitsubishi Corp.1		1,065,000			19,558
Raytheon Co.		2,399,800			106,623
Siemens AG1		1,665,000			115,232
Southwest Airlines Co.		13,000,000			87,490
Textron Inc.		13,021,316			125,786
Tyco International Ltd.		4,347,700			112,953
Union Pacific Corp.		4,586,200			238,758
United Parcel Service, Inc., Class B		5,800,000			289,942
United Technologies Corp.		10,040,000			521,679
Waste Management, Inc.		4,000,000			112,640
					5,339,124

CONSUMER DISCRETIONARY — 7.85%
Best Buy Co., Inc.		6,472,300			216,757
Carnival Corp., units		9,450,000			243,527
Comcast Corp., Class A		11,000,000			159,390
Daimler AG1		960,000			34,724
Harley-Davidson, Inc.		4,825,000			78,213
Honda Motor Co., Ltd.1		3,560,200			97,477
Johnson Controls, Inc.		13,540,300			294,095
Limited Brands, Inc.2		20,934,943			250,591
Lowe’s Companies, Inc.		20,731,000			402,389
Mattel, Inc.		5,459,000			87,617
McDonald’s Corp.		2,250,000			129,353
McGraw-Hill Companies, Inc.		1,800,000			54,198
Staples, Inc.		8,100,000			163,377
Target Corp.		21,173,300			835,710
Time Warner Cable Inc.3		2,779,585			88,030
Time Warner Inc.		20,926,933			527,149
TJX Companies, Inc.		3,000,000			94,380
Toyota Motor Corp.1		11,725,000			443,232
					4,200,209

CONSUMER STAPLES — 11.17%
Altria Group, Inc.		23,795,000			390,000
Avon Products, Inc.		13,852,000			357,105
Coca-Cola Co.		5,365,000			257,466
ConAgra Foods, Inc.		5,521,100			105,232
General Mills, Inc.		1,960,000			109,799
H.J. Heinz Co.		2,750,000			98,175
Kellogg Co.		4,549,503			211,870
Kimberly-Clark Corp.		2,000,000			104,860
Kraft Foods Inc., Class A		13,644,168			345,743
Molson Coors Brewing Co., Class B		8,250,000			349,223
PepsiCo, Inc.		13,765,000			756,524
Philip Morris International Inc.		38,665,000			1,686,567
Procter & Gamble Co.		6,980,146			356,686
Reynolds American Inc.		2,666,666			102,987
Sara Lee Corp.		17,943,100			175,125
SYSCO Corp.		2,450,000			55,076
Walgreen Co.		11,401,100			335,192
Wal-Mart Stores, Inc.		3,725,000			180,439
					5,978,069

HEALTH CARE — 9.77%
Abbott Laboratories		9,310,000			437,942
Aetna Inc.		9,000,000			225,450
Amgen Inc.3		1,840,792			97,452
AstraZeneca PLC (ADR)		2,534,500			111,873
AstraZeneca PLC (Sweden)1		3,209,500			142,470
AstraZeneca PLC (United Kingdom)1		1,435,000			63,163
Bayer AG, non-registered shares1		950,000			50,995
Bristol-Myers Squibb Co.		8,515,000			172,940
Cardinal Health, Inc.		1,550,000			47,352
Eli Lilly and Co.		8,775,000			303,966
Johnson & Johnson		1,850,000			105,080
McKesson Corp.		700,000			30,800
Medtronic, Inc.		14,987,500			522,914
Merck & Co., Inc.		35,600,000			995,376
Novartis AG1		800,000			32,519
Novartis AG (ADR)		256,556			10,465
Pfizer Inc		26,945,000			404,175
Roche Holding AG1		4,702,500			640,093
Schering-Plough Corp.		13,086,300			328,728
UnitedHealth Group Inc.		10,000,000			249,800
WellPoint, Inc.3		5,000,000			254,450
					5,228,003

FINANCIALS — 4.35%
American International Group, Inc.		2,839,100			3,293
AXA SA1		5,095,418			96,300
Banco Santander, SA1		49,455,000			596,630
Banco Santander, SA (ADR)		3,300,000			39,930
Bank of America Corp.		32,799,382			432,952
Berkshire Hathaway Inc., Class A3		2,600			234,000
Capital One Financial Corp.		7,105,576			155,470
Citigroup Inc.		40,000,000			118,800
Credit Suisse Group AG (ADR)		1,070,000			48,931
Fifth Third Bancorp		3,022,358			21,459
HSBC Holdings PLC (ADR)		1,529,416			63,884
HSBC Holdings PLC (United Kingdom)1		4,869,240			40,403
JPMorgan Chase & Co.		8,590,000			293,005
PNC Financial Services Group, Inc.		1,200,000			46,572
Société Générale1		829,493			45,242
State Street Corp.		419,100			19,781
Washington Mutual, Inc.4		17,523,811			1,770
Washington Mutual, Inc.1,4		8,190,475			704
Wells Fargo & Co.		1,500,000			36,390
XL Capital Ltd, Class A		2,750,000			31,515
					2,327,031

INFORMATION TECHNOLOGY — 18.99%
Analog Devices, Inc.		2,300,000			56,994
Applied Materials, Inc.		6,450,000			70,756
Automatic Data Processing, Inc.		7,758,043			274,945
Canon, Inc.1		770,000			25,060
Cisco Systems, Inc.3		21,220,400			395,548
Corning Inc.		11,000,000			176,660
Flextronics International Ltd.3		19,750,000			81,172
Google Inc., Class A3		1,316,480			555,015
Hewlett-Packard Co.		18,900,000			730,485
HTC Corp.1		9,400,500			132,346
Intel Corp.		38,265,000			633,286
International Business Machines Corp.		5,535,000			577,965
KLA-Tencor Corp.		7,475,000			188,744
Linear Technology Corp.		7,600,000			177,460
Maxim Integrated Products, Inc.		6,295,000			98,768
Microsoft Corp.		82,348,100			1,957,414
Motorola, Inc.		14,320,800			94,947
Nokia Corp.1		18,000,000			262,602
Nokia Corp. (ADR)		5,652,400			82,412
Oracle Corp.		64,695,100			1,385,769
QUALCOMM Inc.		4,385,000			198,202
Samsung Electronics Co., Ltd.1		33,307			15,443
SAP AG1		4,192,900			168,986
Taiwan Semiconductor Manufacturing Co. Ltd.1		286,216,974			476,026
Telefonaktiebolaget LM Ericsson, Class B1		3,070,571			30,030
Texas Instruments Inc.		24,065,000			512,584
Xerox Corp.		9,800,000			63,504
Xilinx, Inc.		8,650,000			176,979
Yahoo! Inc.3		35,732,100			559,565
					10,159,667

TELECOMMUNICATION SERVICES — 6.04%
AT&T Inc.		66,695,900			1,656,726
Deutsche Telekom AG1		750,000			8,861
France Télécom SA1		11,745,000			266,764
Qwest Communications International Inc.		73,780,000			306,187
Sprint Nextel Corp., Series 13		16,557,000			79,639
Verizon Communications Inc.		29,770,400			914,844
					3,233,021

UTILITIES — 4.13%
Dominion Resources, Inc.		12,263,824			409,857
Exelon Corp.		13,360,600			684,196
FirstEnergy Corp.		5,743,500			222,561
FPL Group, Inc.		300,000			17,058
GDF Suez1		5,871,324			219,269
PPL Corp.		3,698,000			121,886
Public Service Enterprise Group Inc.		10,000,000			326,300
RWE AG1		2,620,000			206,768
					2,207,895

MISCELLANEOUS — 2.30%
Other common stocks in initial period of acquisition					1,235,105


Total common stocks (cost: $46,698,990,000)					45,694,680




Preferred stocks — 0.20%

FINANCIALS — 0.20%
BAC Capital Trust XIII 1.029%5		16,405,000			7,342
Citigroup Inc., Series E, 8.40%5		41,000,000			30,804
JPMorgan Chase & Co., Series I, 7.90%5		13,785,000			12,097
PNC Preferred Funding Trust I 6.517%5,6		14,900,000			8,044
PNC Preferred Funding Trust III 8.70%5,6		34,000,000			27,946
Wachovia Capital Trust III 5.80%5		13,305,000			7,986
Wells Fargo Capital XV 9.75%5		1,990,000			1,927
XL Capital Ltd., Series E, 6.50%5		21,250,000			10,425
					106,571

MISCELLANEOUS — 0.00%
Other preferred stocks in initial period of acquisition					152


Total preferred stocks (cost: $97,154,000)					106,723




Rights & warrants — 0.01%

FINANCIALS — 0.00%
Washington Mutual, Inc., warrants, expire 20131,3,4		3,071,428			—


MISCELLANEOUS — 0.01%
Other rights & warrants in initial period of acquisition					6,026


Total rights & warrants (cost: $19,505,000)					6,026



	Shares or
Convertible securities — 0.72%	principal amount

CONSUMER DISCRETIONARY — 0.08%
Ford Motor Co. Capital Trust II 6.50% convertible preferred 2032		1,980,000			43,619


FINANCIALS — 0.48%
American International Group, Inc. 8.50% convertible preferred 2011, units		4,211,826			40,097
Citigroup Inc., Series D-1, 7.00% noncumulative convertible preferred1		5,250,000			215,896
Fannie Mae, Series 2004-1, 5.375% convertible preferred		820			820
Fannie Mae, Series 2008-1, 8.75% noncumulative convertible preferred		1,218,000			1,084
					257,897


TELECOMMUNICATION SERVICES — 0.09%
Qwest Communications International Inc. 3.50% convertible debenture 2025	$	50,000,000			49,500


MISCELLANEOUS — 0.07%
Other convertible securities in initial period of acquisition					31,699


Total convertible securities (cost: $861,494,000)					382,715


	Principal amount			Value
Bonds & notes — 3.06%		(000	)		(000	)

ENERGY — 0.08%
Apache Corp. 6.90% 2018	$	15,000		$	17,203
Chevron Corp. 4.95% 2019		10,000			10,353
Williams Companies, Inc. 8.75% 20206		14,375			15,012
					42,568

MATERIALS — 0.11%
BHP Billiton Finance (USA) Ltd. 5.50% 2014		14,660			15,743
Dow Chemical Co. 8.55% 2019		25,000			25,086
Dow Chemical Co. 9.40% 2039		9,940			10,258
Rio Tinto Finance (USA) Ltd. 5.875% 2013		10,000			10,071
					61,158

INDUSTRIALS — 0.22%
Burlington Northern Santa Fe Corp. 5.75% 2018		15,000			15,375
CSX Corp. 6.25% 2015		5,000			5,175
CSX Corp. 7.375% 2019		11,480			12,489
Honeywell International Inc. 3.875% 2014		5,205			5,310
Honeywell International Inc. 5.00% 2019		13,090			13,365
Lockheed Martin Corp. 7.65% 2016		1,870			2,196
Norfolk Southern Corp. 5.75% 2018		15,000			15,363
Norfolk Southern Corp. 5.90% 2019		5,000			5,192
PACCAR Inc, Series A, 6.875% 2014		5,000			5,481
Union Pacific Corp. 5.125% 2014		11,495			11,697
Union Pacific Corp. 6.125% 2020		15,000			15,590
Waste Management, Inc. 6.375% 2015		10,000			10,373
					117,606

CONSUMER DISCRETIONARY — 0.38%
Comcast Corp. 6.50% 2015		7,710			8,187
Comcast Corp. 6.30% 2017		20,120			21,329
Comcast Corp. 6.50% 2017		10,000			10,625
Hasbro, Inc. 6.125% 2014		11,250			11,577
Johnson Controls, Inc. 5.50% 2016		5,160			4,791
Kohl’s Corp. 6.25% 2017		7,500			7,725
Kohl’s Corp. 6.00% 2033		9,518			8,543
News America Inc. 6.90% 20196		25,000			26,096
Staples, Inc. 7.75% 2011		4,695			4,967
Staples, Inc. 9.75% 2014		40,000			44,719
Time Warner Cable Inc. 8.25% 2019		15,320			17,412
Time Warner Inc. 5.875% 2016		20,000			19,739
Walt Disney Co. 5.50% 2019		15,000			15,752
					201,462

CONSUMER STAPLES — 0.18%
Altria Group, Inc. 9.25% 2019		13,600			15,297
British American Tobacco International Finance PLC 9.50% 20186		15,000			17,659
Coca-Cola Co. 4.875% 2019		10,000			10,295
ConAgra Foods, Inc. 5.875% 2014		10,000			10,613
CVS Caremark Corp. 6.60% 2019		20,335			21,767
SYSCO Corp. 5.375% 2019		18,000			18,523
					94,154

HEALTH CARE — 0.31%
Abbott Laboratories 5.125% 2019		25,000			25,790
Aetna Inc. 5.75% 2011		1,961			2,051
Aetna Inc. 7.875% 2011		865			924
Cardinal Health, Inc. 6.75% 2011		7,020			7,393
Cardinal Health, Inc. 4.00% 2015		10,000			8,720
Cardinal Health, Inc. 5.80% 2016		14,625			14,177
Cardinal Health, Inc. 5.85% 2017		8,355			7,828
Novartis Securities Investment Ltd. 5.125% 2019		20,000			20,500
Pfizer Inc. 6.20% 2019		20,000			21,913
Roche Holdings Inc. 5.00% 20146		10,000			10,529
Roche Holdings Inc. 6.00% 20196		20,000			21,396
WellPoint, Inc. 5.875% 2017		15,000			14,704
WellPoint, Inc. 7.00% 2019		12,200			12,634
					168,559

FINANCIALS — 0.37%
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		15,000			15,523
American Express Co. 7.00% 2018		7,660			7,450
Bank of America Corp. 5.30% 2017		10,000			8,497
BNP Paribas 4.80% 20156		100			80
Capital One Capital III 7.686% 20365		11,665			8,341
Capital One Capital IV 6.745% 20375		14,347			9,625
Capital One Financial Corp. 5.70% 2011		10,590			10,642
Capital One Financial Corp. 6.25% 2013		1,470			1,452
Capital One Financial Corp. 5.50% 2015		385			356
Capital One Financial Corp. 6.15% 2016		1,272			1,127
Capital One Financial Corp. 6.75% 2017		1,600			1,533
Citigroup Inc. 6.125% 2017		10,000			8,781
JPMorgan Chase & Co. 4.75% 2013		10,000			10,136
JPMorgan Chase & Co. 6.00% 2018		10,000			9,950
MetLife Global Funding 5.125% 20146		7,000			6,953
Metropolitan Life Global Funding I, 5.125% 20136		3,335			3,395
National City Corp. 5.80% 2017		1,350			1,287
National City Corp. 6.875% 2019		3,050			2,932
National City Preferred Capital Trust I 12.00% (undated)5		1,380			1,442
Northern Trust Corp. 4.625% 2014		5,650			5,812
PNC Funding Corp. 1.239% 20145		10,000			9,036
PNC Funding Corp. 5.40% 2014		10,000			10,114
PNC Funding Corp., Series II, 6.113% (undated)5,6		5,000			2,599
Simon Property Group, LP 5.25% 2016		5,875			5,226
Simon Property Group, LP 6.10% 2016		1,625			1,519
Simon Property Group, LP 6.125% 2018		1,680			1,565
SLM Corp., Series A, 5.45% 2011		4,315			3,971
SLM Corp., Series A, 5.125% 2012		1,000			856
SLM Corp., Series A, 5.00% 2013		6,686			5,413
SLM Corp., Series A, 5.375% 2013		1,905			1,593
SLM Corp., Series A, 5.375% 2014		6,965			5,604
SLM Corp., Series A, 5.00% 2015		8,521			6,499
SLM Corp., Series A, 5.00% 2018		1,740			1,156
SLM Corp., Series A, 8.45% 2018		4,090			3,504
Wells Fargo & Co. 7.98% (undated)5		27,202			22,611
Wells Fargo Capital XIII 7.70% (undated)5		995			827
					197,407

INFORMATION TECHNOLOGY — 0.04%
Cisco Systems, Inc. 4.95% 2019		15,000			15,028
National Semiconductor Corp. 6.60% 2017		10,000			8,759
					23,787


TELECOMMUNICATION SERVICES — 0.16%
AT&T Inc. 4.85% 2014		15,000			15,574
AT&T Inc. 5.50% 2018		15,000			15,003
France Télécom 8.50% 2031		1,100			1,417
Nextel Communications, Inc., Series F, 5.95% 2014		17,075			13,532
Verizon Communications Inc. 5.55% 20146		20,000			21,254
Vodafone Group PLC 5.375% 2015		6,000			6,128
Vodafone Group PLC 5.75% 2016		6,500			6,682
Vodafone Group PLC 5.625% 2017		7,500			7,629
					87,219

UTILITIES — 0.06%
FirstEnergy Corp., Series C, 7.375% 2031		7,995			7,566
PG&E Corp. 5.75% 2014		8,000			8,533
Progress Energy, Inc. 6.05% 2014		4,000			4,211
Progress Energy, Inc. 7.05% 2019		8,800			9,781
					30,091

MORTGAGE-BACKED OBLIGATIONS7 — 0.88%
Fannie Mae 4.50% 2023		17,105			17,493
Fannie Mae 4.50% 2023		44,310			45,288
Fannie Mae 4.00% 2024		24,719			24,768
Fannie Mae 5.00% 2024		40,663			42,148
Fannie Mae 5.50% 2024		22,161			23,248
Fannie Mae 6.00% 2037		109,051			114,218
Fannie Mae 7.00% 2037		23,512			25,571
Fannie Mae 5.50% 2038		22,191			22,965
Freddie Mac 5.00% 2038		44,462			45,279
Freddie Mac 5.50% 2038		108,710			112,374
					473,352

BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 0.27%
Fannie Mae 2.50% 2014		25,000			24,538
Federal Home Loan Bank 3.625% 2013		50,000			51,746
Freddie Mac 1.50% 2011		5,000			5,044
U.S. Treasury 0.875% 2011		10,000			10,006
U.S. Treasury 1.125% 2011		15,000			14,927
U.S. Treasury 1.75% 2014		10,000			9,720
U.S. Treasury 1.875% 2014		5,000			4,853
U.S. Treasury 4.125% 2015		10,000			10,670
U.S. Treasury 4.625% 2017		10,000			10,884
					142,388

Total bonds & notes (cost: $1,563,346,000)					1,639,751




Short-term securities — 10.69%

Abbott Laboratories 0.20%–0.23% due 7/13–8/12/20096		65,500			65,493
Chevron Corp. 0.24% due 8/7/2009		50,000			49,987
Chevron Funding Corp. 0.22% due 7/10/2009		25,000			24,998
Citigroup Funding Inc., FDIC insured, 0.25%–0.27% due 7/27–8/11/2009		50,200			50,189
Coca-Cola Co. 0.25%–0.30% due 7/13–9/22/20096		66,800			66,779
Fannie Mae 0.15%–0.40% due 7/1–12/29/2009		885,200			884,700
Federal Farm Credit Banks 0.18%-0.70% due 7/1–12/22/2009		62,900			62,838
Federal Home Loan Bank 0.16%–0.85% due 7/1/2009–6/8/2010		1,181,412			1,180,817
Federal Home Loan Bank 0.925% due 12/22/20095		30,000			29,957
Freddie Mac 0.17%–0.75% due 7/6–12/7/2009		1,593,798			1,592,523
Johnson & Johnson 0.25% due 9/30/20096		60,300			60,255
Jupiter Securitization Co., LLC 0.28% due 7/24/20096		50,000			49,991
Medtronic Inc. 0.19% due 7/22/20096		20,700			20,698
NetJets Inc. 0.22% due 8/20/20096		15,700			15,695
Pfizer Inc 0.20%–0.34% due 7/8–12/28/20096		256,400			256,256
Private Export Funding Corp. 0.35% due 7/16–7/23/20096		55,000			54,994
Procter & Gamble International Funding S.C.A. 0.20% due 9/1–9/22/20096		12,800			12,792
U.S. Treasury Bills 0.133%–0.532% due 7/2/2009–5/6/2010		1,207,770			1,207,165
Yale University 0.50% due 7/1/2009		32,500			32,499


Total short-term securities (cost: $5,718,744,000)					5,718,626


Total investment securities (cost: $54,959,233,000)					53,548,521
Other assets less liabilities					(35,681	)

Net assets				$	53,512,840

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

1Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in “Miscellaneous," was $5,351,279,000, which represented 10.00% of the net assets of the fund. This amount includes $5,134,679,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

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

3Security did not produce income during the last 12 months.

4Purchased in a transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale.

Further details on these holdings appear below.

	Acquisition date	Cost (000)		Value (000)		Percent of net assets

Washington Mutual, Inc.	4/8/2008	$	145,487	$	1,770		—	%
Washington Mutual, Inc.	4/8/2008		67,743		704		—
Washington Mutual, Inc., warrants, expire 2013	4/8/2008		11,770		—		—

Total restricted securities		$	225,000	$	2,474		—	%

5Coupon rate may change periodically.

6Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $763,916,000, which represented 1.43% of the net assets of the fund.

7Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

Key to abbreviation

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 your financial professional and should be read carefully before investing.

MFGEFP-904-0809O-S21439

ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

(a)	The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.

(b)	There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

(a)(1)	Not applicable for filing of semi-annual reports to shareholders.

(a)(2)	The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.

	THE INVESTMENT COMPANY OF AMERICA

	By /s/ James B. Lovelace
	James B. Lovelace, Vice Chairman and Chief Executive Officer

	Date: September 4, 2009