N-Q 1 ica_nq.htm N-Q Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM N-Q
Quarterly Schedule of Portfolio Holdings of
Registered Management Investment Company

Investment Company Act File Number: 811-00116



The Investment Company of America
(Exact Name of Registrant as Specified in Charter)

333 South Hope Street,
Los Angeles, California 90071
(Address of Principal Executive Offices)




Registrant's telephone number, including area code:  (213) 486-9200

Date of fiscal year end: December 31

Date of reporting period: September 30, 2009





Vincent P. Corti
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(Name and Address of Agent for Service)


Copies to:
Eric A. S. Richards
O’Melveny & Myers LLP
400 South Hope Street, 10th Floor
Los Angeles, California 90071
(Counsel for the Registrant)

 
 
 

ITEM 1 – Schedule of Investments

[logo – American Funds®]



The Investment Company of America® 
Investment portfolio

September 30, 2009
unaudited 
 
Common stocks — 88.56%
  
Shares
    
Value
(000)
  
             
ENERGY — 9.42%
            
Baker Hughes Inc.
     10,883,400     $ 464,286  
BP PLC
     43,688,567       386,291  
Canadian Natural Resources, Ltd.
     648,200       43,828  
Chevron Corp.
     6,332,278       445,982  
ConocoPhillips
     17,319,140       782,132  
Devon Energy Corp.
     1,585,000       106,718  
Diamond Offshore Drilling, Inc.
     2,250,000       214,920  
Eni SpA
     4,640,000       116,016  
Eni SpA (ADR)
     770,000       38,384  
Halliburton Co.
     800,000       21,696  
Hess Corp.
     3,731,100       199,465  
Marathon Oil Corp.
     5,478,300       174,758  
Royal Dutch Shell PLC, Class A (ADR)
     16,470,000       941,919  
Royal Dutch Shell PLC, Class B
     4,793,265       133,046  
Royal Dutch Shell PLC, Class B (ADR)
     2,925,498       163,155  
Schlumberger Ltd.
     17,692,099       1,054,449  
TOTAL SA
     4,895,000       290,967  
              5,578,012  
                 
MATERIALS — 2.34%
                
Air Products and Chemicals, Inc.
     2,508,600       194,617  
Akzo Nobel NV
     1,500,000       92,961  
Alcoa Inc.
     1,676,400       21,994  
Barrick Gold Corp.
     7,150,000       270,985  
Dow Chemical Co.
     2,450,000       63,872  
MeadWestvaco Corp.
     4,085,000       91,136  
Monsanto Co.
     2,167,400       167,757  
Newmont Mining Corp.
     4,790,000       210,856  
POSCO
     136,000       56,368  
Potash Corp. of Saskatchewan Inc.
     200,000       18,068  
United States Steel Corp.
     4,160,000       184,579  
Weyerhaeuser Co.
     300,000       10,995  
              1,384,188  
                 
INDUSTRIALS — 10.59%
                
3M Co.
     3,942,800       290,979  
Boeing Co.
     19,670,000       1,065,130  
Burlington Northern Santa Fe Corp.
     5,613,700       448,142  
CSX Corp.
     7,181,000       300,597  
Cummins Inc.
     3,000,000       134,430  
Deere & Co.
     7,550,000       324,046  
FedEx Corp.
     1,500,000       112,830  
General Dynamics Corp.
     9,193,100       593,874  
General Electric Co.
     24,145,000       396,461  
Illinois Tool Works Inc.
     6,400,000       273,344  
Lockheed Martin Corp.
     4,565,000       356,435  
Mitsubishi Corp.
     1,065,000       21,564  
Raytheon Co.
     2,399,800       115,118  
Siemens AG
     1,665,000       154,238  
Southwest Airlines Co.
     13,000,000       124,800  
Tyco International Ltd.
     3,237,700       111,636  
Union Pacific Corp.
     7,436,400       433,914  
United Parcel Service, Inc., Class B
     5,000,000       282,350  
United Technologies Corp.
     10,040,000       611,737  
Waste Management, Inc.
     4,000,000       119,280  
              6,270,905  
                 
CONSUMER DISCRETIONARY — 8.40%
                
Best Buy Co., Inc.
     6,472,300       242,841  
Carnival Corp., units
     9,450,000       314,496  
CBS Corp., Class B, nonvoting shares
     16,000,000       192,800  
Comcast Corp., Class A
     12,000,000       202,680  
Daimler AG
     960,000       48,351  
Harley-Davidson, Inc.
     4,825,000       110,975  
Honda Motor Co., Ltd.
     5,810,200       179,119  
Johnson Controls, Inc.
     13,310,300       340,211  
Limited Brands, Inc.1
    16,934,943       287,725  
Lowe’s Companies, Inc.
     19,460,000       407,492  
Mattel, Inc.
     5,459,000       100,773  
McDonald’s Corp.
     6,150,000       350,980  
McGraw-Hill Companies, Inc.
     2,350,000       59,079  
News Corp., Class A
     13,550,000       162,465  
Staples, Inc.
     8,100,000       188,082  
Target Corp.
     16,723,300       780,644  
Time Warner Cable Inc.2
     2,779,585       119,772  
Time Warner Inc.
     17,930,667       516,045  
TJX Companies, Inc.
     3,000,000       111,450  
Toyota Motor Corp.
     6,550,000       260,715  
              4,976,695  
                 
CONSUMER STAPLES — 11.30%
                
Altria Group, Inc.
     23,795,000       423,789  
Avon Products, Inc.
     13,852,000       470,414  
Coca-Cola Co.
     5,365,000       288,101  
ConAgra Foods, Inc.
     5,521,100       119,697  
General Mills, Inc.
     1,960,000       126,185  
H.J. Heinz Co.
     2,750,000       109,313  
Kellogg Co.
     4,549,503       223,972  
Kimberly-Clark Corp.
     1,500,000       88,470  
Kraft Foods Inc., Class A
     13,644,168       358,432  
Molson Coors Brewing Co., Class B
     8,250,000       401,610  
PepsiCo, Inc.
     13,765,000       807,455  
Philip Morris International Inc.
     38,665,000       1,884,532  
Procter & Gamble Co.
     6,980,146       404,290  
Reynolds American Inc.
     2,666,666       118,720  
Sara Lee Corp.
     17,943,100       199,886  
Sysco Corp.
     2,450,000       60,883  
Walgreen Co.
     11,401,100       427,199  
Wal-Mart Stores, Inc.
     3,725,000       182,860  
              6,695,808  
                 
HEALTH CARE — 8.94%
                
Abbott Laboratories
     13,185,000       652,262  
Aetna Inc.
     9,000,000       250,470  
Amgen Inc.2
    1,840,792       110,871  
AstraZeneca PLC (Sweden)
     2,650,000       119,349  
AstraZeneca PLC (United Kingdom)
     1,250,000       56,041  
Bayer AG
     950,000       65,850  
Bristol-Myers Squibb Co.
     1,821,304       41,016  
Eli Lilly and Co.
     8,775,000       289,838  
Johnson & Johnson
     2,600,000       158,314  
Medtronic, Inc.
     15,612,500       574,540  
Merck & Co., Inc.
     35,600,000       1,126,028  
Novartis AG
     800,000       40,046  
Novartis AG (ADR)
     256,556       12,925  
Pfizer Inc
     26,945,000       445,940  
Roche Holding AG
     3,502,500       566,392  
Schering-Plough Corp.
     13,086,300       369,688  
UnitedHealth Group Inc.
     9,000,000       225,360  
WellPoint, Inc.2
     4,000,000       189,440  
              5,294,370  
                 
FINANCIALS — 5.92%
                
American International Group, Inc.2
     141,955       6,262  
AXA SA
     5,095,418       137,995  
Banco Santander, SA
     49,455,000       796,369  
Banco Santander, SA (ADR)
     3,700,000       59,755  
Bank of America Corp.
     33,149,382       560,888  
Bank of New York Mellon Corp.
     9,550,000       276,854  
Berkshire Hathaway Inc., Class A2
    2,600       262,600  
Capital One Financial Corp.
     7,105,576       253,882  
Citigroup Inc.
     62,984,615       304,845  
Credit Suisse Group AG (ADR)
     1,070,000       59,545  
HSBC Holdings PLC (ADR)
     1,529,416       87,712  
HSBC Holdings PLC (United Kingdom)
     4,869,240       55,744  
JPMorgan Chase & Co.
     8,790,000       385,178  
PNC Financial Services Group, Inc.
     1,200,000       58,308  
Société Générale
     829,493       66,786  
State Street Corp.
     1,679,100       88,321  
Washington Mutual, Inc.2,3
     25,714,286       6,300  
Wells Fargo & Co.
     1,500,000       42,270  
              3,509,614  
                 
INFORMATION TECHNOLOGY — 19.64%
                
Analog Devices, Inc.
     2,300,000       63,434  
Applied Materials, Inc.
     6,450,000       86,430  
Automatic Data Processing, Inc.
     7,758,043       304,891  
Canon, Inc.
     770,000       31,164  
Cisco Systems, Inc.2
     21,220,400       499,528  
Corning Inc.
     11,000,000       168,410  
Flextronics International Ltd.2
     18,000,000       134,280  
Google Inc., Class A2
     1,316,480       652,777  
Hewlett-Packard Co.
     23,700,000       1,118,877  
HTC Corp.
     8,550,500       94,382  
Intel Corp.
     36,465,000       713,620  
International Business Machines Corp.
     5,285,000       632,139  
KLA-Tencor Corp.
     7,475,000       268,054  
Linear Technology Corp.
     7,600,000       209,988  
Maxim Integrated Products, Inc.
     6,295,000       114,191  
Microsoft Corp.
     85,560,800       2,215,169  
Nokia Corp.
     21,700,000       319,255  
Nokia Corp. (ADR)
     5,652,400       82,638  
Oracle Corp.
     77,810,100       1,621,562  
QUALCOMM Inc.
     4,385,000       197,237  
SAP AG
     3,200,000       155,900  
Taiwan Semiconductor Manufacturing Co. Ltd.
     212,273,021       428,130  
Telefonaktiebolaget LM Ericsson, Class B
     11,207,745       112,707  
Texas Instruments Inc.
     24,065,000       570,100  
Xerox Corp.
     2,682,965       20,766  
Xilinx, Inc.
     8,650,000       202,583  
Yahoo! Inc.2
     34,803,200       619,845  
              11,638,057  
                 
TELECOMMUNICATION SERVICES — 5.50%
                
AT&T Inc.
     73,206,500       1,977,307  
Deutsche Telekom AG
     750,000       10,244  
France Télécom SA
     6,220,000       165,765  
Qwest Communications International Inc.
     73,780,000       281,102  
Verizon Communications Inc.
     27,190,400       823,053  
              3,257,471  
                 
UTILITIES — 4.03%
                
Dominion Resources, Inc.
     12,263,824       423,102  
Exelon Corp.
     13,360,600       662,953  
FirstEnergy Corp.
     6,343,500       290,025  
FPL Group, Inc.
     300,000       16,569  
GDF Suez
     10,022,324       445,212  
PPL Corp.
     3,698,000       112,197  
Public Service Enterprise Group Inc.
     10,000,000       314,400  
RWE AG
     1,300,000       120,788  
              2,385,246  
                 
MISCELLANEOUS — 2.48%
                
Other common stocks in initial period of acquisition
             1,472,775  
                 
                 
Total common stocks (cost: $46,081,206,000)
             52,463,141  
                 
                 
                 
Preferred stocks — 0.16%
                
                 
FINANCIALS — 0.16%
                
JPMorgan Chase & Co., Series I, 7.90%4
    14,505,000       13,970  
PNC Preferred Funding Trust I 6.517%4,5
    14,900,000       9,331  
PNC Preferred Funding Trust III 8.70%4,5
    34,000,000       32,157  
Wachovia Capital Trust III 5.80%4
    13,305,000       9,380  
Wells Fargo & Co. 7.98%4
     30,187,000       27,621  
                 
                 
Total preferred stocks (cost: $66,965,000)
             92,459  
           
 
  
                 
                 
           
Value
  
Rights & warrants — 0.01%
  
Shares
       (000 )
                 
FINANCIALS — 0.00%
                
Washington Mutual, Inc., warrants, expire 20132,3,6
     3,071,428     $ —  
                 
                 
MISCELLANEOUS — 0.01%
                
Other rights & warrants in initial period of acquisition
             4,333  
                 
                 
Total rights & warrants (cost: $11,770,000)
             4,333  
                 
                 
                 
Convertible securities — 0.20%
  
Shares or principal amount
          
                 
FINANCIALS — 0.09%
                
American International Group, Inc. 8.50% convertible preferred 2011, units
     4,211,826       48,647  
Fannie Mae, Series 2004-1, 5.375% convertible preferred2
     820       4,100  
Fannie Mae, Series 2008-1, 8.75% noncumulative convertible preferred2
     1,218,000       2,923  
              55,670  
                 
                 
TELECOMMUNICATION SERVICES — 0.09%
                
Qwest Communications International Inc. 3.50% convertible debenture 2025
   $ 50,000,000       50,687  
                 
                 
MISCELLANEOUS — 0.02%
                
Other convertible securities in initial period of acquisition
             13,447  
                 
                 
Total convertible securities (cost: $508,258,000)
             119,804  
                 
                 
                 
   
Principal amount
          
Bonds & notes  — 2.80%
     (000 )        
                 
ENERGY — 0.10%
                
Apache Corp. 6.90% 2018
   $ 15,000       17,864  
Chevron Corp. 4.95% 2019
     10,000       10,694  
Williams Companies, Inc. 8.75% 2020
     26,375       30,375  
              58,933  
                 
MATERIALS — 0.10%
                
BHP Billiton Finance (USA) Ltd. 5.50% 2014
     14,660       16,217  
Dow Chemical Co. 8.55% 2019
     25,000       22,521  
Dow Chemical Co. 9.40% 2039
     5,940       7,337  
Rio Tinto Finance (USA) Ltd. 5.875% 2013
     10,000       10,783  
Rio Tinto Finance (USA) Ltd. 9.00% 2019
     3,780       4,648  
              61,506  
                 
INDUSTRIALS — 0.21%
                
Burlington Northern Santa Fe Corp. 5.75% 2018
     15,000       16,321  
CSX Corp. 6.25% 2015
     5,000       5,535  
CSX Corp. 7.375% 2019
     11,480       13,533  
Honeywell International Inc. 3.875% 2014
     5,205       5,420  
Honeywell International Inc. 5.00% 2019
     13,090       13,727  
Lockheed Martin Corp. 7.65% 2016
     1,870       2,259  
Norfolk Southern Corp. 5.75% 2018
     15,000       16,344  
Norfolk Southern Corp. 5.90% 2019
    5,000       5,569  
PACCAR Inc, Series A, 6.875% 2014
     5,000       5,635  
Union Pacific Corp. 5.125% 2014
     11,495       12,334  
Union Pacific Corp. 6.125% 2020
     15,000       16,716  
Waste Management, Inc. 6.375% 2015
     10,000       11,078  
              124,471  
                 
CONSUMER DISCRETIONARY — 0.33%  
                
Comcast Corp. 6.50% 2015
     7,710       8,601  
Comcast Corp. 6.30% 2017
     20,120       22,079  
Comcast Corp. 6.50% 2017
     10,000       10,992  
Hasbro, Inc. 6.125% 2014
     11,250       12,249  
Johnson Controls, Inc. 5.50% 2016
     5,160       5,352  
Kohl’s Corp. 6.25% 2017
     7,500       8,210  
News America Inc. 6.90% 2019
     21,315       23,827  
Staples, Inc. 7.75% 2011
     4,695       5,072  
Staples, Inc. 9.75% 2014
    40,000       48,093  
Time Warner Cable Inc. 8.25% 2019
     15,320       18,549  
Time Warner Inc. 5.875% 2016
     20,000       21,239  
Walt Disney Co. 5.50% 2019
    15,000       16,318  
              200,581  
                 
CONSUMER STAPLES — 0.17%
                
Altria Group, Inc. 9.25% 2019
     13,600       16,647  
British American Tobacco International Finance PLC 9.50% 20185
     15,000       19,487  
Coca-Cola Co. 4.875% 2019
     10,000       10,573  
ConAgra Foods, Inc. 5.875% 2014
     10,000       10,989  
CVS Caremark Corp. 6.60% 2019
    20,335       22,964  
SYSCO Corp. 5.375% 2019
    18,000       19,563  
              100,223  
                 
HEALTH CARE — 0.28%
                
Abbott Laboratories 5.125% 2019
    25,000       26,543  
Aetna Inc. 5.75% 2011
     1,961       2,066  
Aetna Inc. 7.875% 2011
     865       921  
Cardinal Health, Inc. 4.00% 2015
     10,000       9,704  
Cardinal Health, Inc. 5.80% 2016
     14,625       15,281  
Cardinal Health, Inc. 5.85% 2017
     3,715       3,916  
Novartis Securities Investment Ltd. 5.125% 2019
     20,000       21,331  
Pfizer Inc. 6.20% 2019
     20,000       22,584  
Roche Holdings Inc. 5.00% 20145
    10,000       10,814  
Roche Holdings Inc. 6.00% 20195
    20,000       22,258  
WellPoint, Inc. 5.875% 2017
     15,000       15,857  
WellPoint, Inc. 7.00% 2019
     12,200       13,893  
              165,168  
                 
FINANCIALS — 0.31%
                
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013
     15,000       15,979  
American Express Co. 7.00% 2018
     7,660       8,440  
Bank of America Corp. 5.30% 2017
     10,000       9,608  
Capital One Capital III 7.686% 20364
     11,665       9,915  
Capital One Capital IV 6.745% 20374
     14,347       11,119  
Capital One Financial Corp. 5.70% 2011
     9,330       9,752  
Citigroup Inc. 6.125% 2017
     10,000       9,944  
JPMorgan Chase & Co. 4.75% 2013
     10,000       10,596  
JPMorgan Chase & Co. 6.00% 2018
     10,000       10,751  
MetLife Global Funding 5.125% 20145
     7,000       7,320  
Metropolitan Life Global Funding I, 5.125% 20135
     3,335       3,461  
National City Corp. 5.80% 2017
    1,350       1,350  
National City Corp. 6.875% 2019
     3,050       3,317  
Northern Trust Corp. 4.625% 2014
    5,650       6,018  
PNC Funding Corp. 0.688% 20144
     10,000       9,384  
PNC Funding Corp. 5.40% 2014
    10,000       10,754  
PNC Funding Corp., Series II, 6.113% (undated)4,5
     5,000       2,960  
Simon Property Group, LP 6.75% 2014
     3,000       3,221  
Simon Property Group, LP 5.25% 2016
     5,875       5,800  
Simon Property Group, LP 6.10% 2016
     1,625       1,672  
Simon Property Group, LP 6.125% 2018
     1,680       1,696  
SLM Corp., Series A, 5.45% 2011
     4,315       4,071  
SLM Corp., Series A, 5.125% 2012
     1,000       856  
SLM Corp., Series A, 5.00% 2013
     6,686       5,327  
SLM Corp., Series A, 5.375% 2013
     1,905       1,589  
SLM Corp., Series A, 5.375% 2014
     6,965       5,336  
SLM Corp., Series A, 5.00% 2015
     8,521       6,356  
SLM Corp., Series A, 5.00% 2018
     1,740       1,093  
SLM Corp., Series A, 8.45% 2018
     4,090       3,266  
              180,951  
                 
INFORMATION TECHNOLOGY — 0.04%
                
Cisco Systems, Inc. 4.95% 2019
     15,000       15,797  
National Semiconductor Corp. 6.60% 2017
     10,000       9,897  
              25,694  
                 
TELECOMMUNICATION SERVICES — 0.12%
                
AT&T Inc. 4.85% 2014
    15,000       15,971  
AT&T Inc. 5.50% 2018
     15,000       15,677  
France Télécom 8.50% 2031
     1,100       1,525  
Verizon Communications Inc. 5.55% 20145
     20,000       21,634  
Vodafone Group PLC 5.375% 2015
     6,000       6,438  
Vodafone Group PLC 5.625% 2017
     7,500       7,961  
              69,206  
                 
UTILITIES — 0.05%
                
FirstEnergy Solutions Co. 4.80% 20155
    4,000       4,115  
PG&E Corp. 5.75% 2014
     8,000       8,744  
Progress Energy, Inc. 6.05% 2014
     4,000       4,391  
Progress Energy, Inc. 7.05% 2019
     8,800       10,264  
              27,514  
                 
MORTGAGE-BACKED OBLIGATIONS7 — 0.79%
                
Fannie Mae 4.50% 2023  
     16,613       17,251  
Fannie Mae 4.50% 2023  
     41,179       42,734  
Fannie Mae 4.00% 2024  
     19,661       20,038  
Fannie Mae 4.00% 2024  
     24,245       24,710  
Fannie Mae 5.00% 2024  
     37,343       39,238  
Fannie Mae 5.50% 2024  
     19,879       21,081  
Fannie Mae 6.00% 2037  
     100,696       106,556  
Fannie Mae 7.00% 2037  
     22,160       24,186  
Fannie Mae 5.50% 2038  
     20,572       21,571  
Freddie Mac 5.00% 2038  
     42,643       44,122  
Freddie Mac 5.50% 2038  
     101,380       106,299  
              467,786  
                 
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 0.30%
                
Fannie Mae 2.50% 2014
     25,000       25,003  
Federal Home Loan Bank 3.625% 2013
     50,000       52,608  
Freddie Mac 1.50% 2011
     5,000       5,056  
Freddie Mac 2.125% 2012
     10,000       10,128  
U.S. Treasury 0.875% 2011
     10,000       10,043  
U.S. Treasury 1.125% 2011
     24,000       24,027  
U.S. Treasury 4.25% 2012
     15,000       16,256  
U.S. Treasury 1.75% 2014
     10,000       9,876  
U.S. Treasury 1.875% 2014
     5,000       4,941  
U.S. Treasury 4.125% 2015
     10,000       10,830  
U.S. Treasury 4.625% 2017
     10,000       11,074  
              179,842  
                 
Total bonds & notes (cost: $1,532,379,000)
             1,661,875  
                 
                 
                 
                 
Short-term securities — 8.18%
                
                 
Bank of America Corp. 0.30% due 1/12/2010
     40,000       39,999  
Campbell Soup Co. 0.23% due 2/1/20105
     4,300       4,295  
Chevron Corp. 0.22% due 10/2/2009
     50,000       49,999  
Coca-Cola Co. 0.23% due 1/15/20105
    38,700       38,666  
Eli Lilly and Co. 0.14% due 10/2/20095
     25,000       25,000  
Fannie Mae 0.16%–0.54% due 10/7/2009–7/13/2010
     870,600       870,381  
Federal Farm Credit Banks 0.36%–0.70% due 12/22/2009–5/25/2010
     100,400       100,375  
Federal Home Loan Bank 0.14%–0.70% due 10/2/2009–6/8/2010
     476,086       476,006  
Federal Home Loan Bank 0.925% due 12/22/20094
     30,000       29,989  
Freddie Mac 0.165%–0.43% due 10/13/2009–5/18/2010
     2,143,307       2,142,714  
General Electric Capital Corp. 0.25% due 10/6/2009
     98,000       97,996  
International Bank for Reconstruction and Development 0.19% due 12/18/2009
     53,700       53,688  
Jupiter Securitization Co., LLC 0.32% due 10/9/20095
     43,800       43,794  
NetJets Inc. 0.17%–0.19% due 11/18–12/3/20095
     55,600       55,583  
Park Avenue Receivables Co., LLC 0.19% due 10/27/20095
    36,000       35,995  
Pfizer Inc 0.34% due 12/28/20095
     50,000       49,970  
Private Export Funding Corp. 0.19% due 12/7/20095
     75,000       74,969  
Procter & Gamble International Funding S.C.A. 0.225%–0.24% due 11/10/2009–1/13/20105
     165,300       165,232  
Rhode Island Health and Educational Building Corp. (Brown University), Series A, TECP, 0.30% due 12/4/2009
     15,200       15,192  
U.S. Treasury Bills 0.14%–0.532% due 10/8/2009–6/17/2010
     440,070       439,832  
Wal-Mart Stores Inc. 0.15% due 11/16/20095
     33,900       33,888  
                 
                 
Total short-term securities (cost: $4,841,984,000)
             4,843,563  
                 
                 
Total investment securities (cost: $53,042,562,000)
             59,185,175  
Other assets less liabilities
             57,393  
                 
Net assets
           $ 59,242,568  

“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
 
1The fund owns 5% or more of the outstanding voting shares of this company. See the table below for additional information.
2Security did not produce income during the last 12 months.
3Purchased 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
   $ 213,230     $ 6,300       .01 %
 Washington Mutual, Inc., warrants, expire 2013
4/8/2008
     11,770       —       —  
                           
 Total restricted securities       
     $ 225,000     $ 6,300       .01 %

4Coupon rate may change periodically.
5Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $660,929,000, which represented 1.12% of the net assets of the fund.
6Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities represented less than .01% 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 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. Further details on these holdings and related transactions during the nine months ended September 30, 2009, appear below.
 
   
Beginning shares
    
Additions
    
Reductions
    
Ending shares
    
Dividend
 income
(000)
    
Value
of affiliate
at 9/30/09
(000)
  
                                     
Limited Brands, Inc.
     20,309,759       625,184       4,000,000       16,934,943     $ 9,421     $ 287,725  
United States Steel Corp.*
     3,060,000       4,842,000       3,742,000       4,160,000       1,649       —  
Textron Inc.*
     12,430,000       2,325,000       14,755,000       —       488       —  
                                    $ 11,558     $ 287,725  
                                                 
*Unaffiliated issuer at 9/30/2009.
                                                



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. Forward currency contracts are valued at the mean of representative quoted bid and asked prices.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under guidelines adopted by authority of the fund’s board of directors. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. 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.




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 September 30, 2009 (dollars in thousands):  

Investment securities:
  
Level 1
    
Level 2
    
Level 3
    
Total
  
                         
Common stocks:
                        
    Energy
  $ 5,578,012     $ —     $ —     $ 5,578,012  
    Materials
     1,384,188       —       —       1,384,188  
    Industrials
    6,270,905       —       —       6,270,905  
    Consumer discretionary
     4,976,695       —       —       4,976,695  
    Consumer staples
     6,695,808       —       —       6,695,808  
    Health care
     5,294,370       —       —       5,294,370  
    Financials
     3,509,614       —       —       3,509,614  
    Information technology
     11,638,057       —       —       11,638,057  
    Telecommunication services
     3,257,471       —       —       3,257,471  
    Utilities
     2,385,246       —       —       2,385,246  
    Miscellaneous
     1,472,775       —       —       1,472,775  
Preferred stocks
     —       92,459       —       92,459  
Rights & warrants
     4,333       —       —       4,333  
Convertible securities
     65,017       54,787       —       119,804  
Bonds & notes
     —       1,661,875       —       1,661,875  
Short-term securities
     —       4,843,563       —       4,843,563  
Total
   $ 52,532,491     $ 6,652,684     $ —     $ 59,185,175  

 
The following table reconciles the valuation of the fund’s Level 3 investment securities and related transactions for the nine months ended September 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 9/30/2009
  
                               
Investment securities
   $ 451     $ 59,270     $ 114,423     $ (174,144 )   $ —  

 

Federal income tax information
  
(dollars in thousands)
  
       
Gross unrealized appreciation on investment securities
   $ 11,623,549  
Gross unrealized depreciation on investment securities
     (5,493,685 )
Net unrealized appreciation on investment securities
     6,129,864  
Cost of investment securities for federal income tax purposes
     53,055,311  


 

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-904-1109O-S21467
 
 
ITEM 2 – Controls and Procedures

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.

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


ITEM 3 – Exhibits

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
THE INVESTMENT COMPANY OF AMERICA
   
 
By /s/ James B. Lovelace
 
James B. Lovelace, Vice Chairman and
Chief Executive Officer
   
 
Date: November 27, 2009



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


By /s/ James B. Lovelace
James B. Lovelace, Vice Chairman and
Chief Executive Officer
 
Date: November 27, 2009



By /s/ Carmelo Spinella
Carmelo Spinella, Treasurer and
Principal Financial Officer
 
Date: November 27, 2009