ica497.htm

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THE INVESTMENT COMPANY OF AMERICA

Part B
Statement of Additional Information

May 1, 2009

(as supplemented January 1, 2010)

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

The Investment Company of America
Attention: Secretary
333 South Hope Street
Los Angeles, California 90071
213/486-9200

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

TABLE OF CONTENTS

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

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 3
Fund policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Management of the fund. . . . . . . . . . . . . . . . . . . . . . . 10
Execution of portfolio transactions . . . . . . . . . . . . . . . . 37
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 40
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 45
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 50
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 58
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Shareholder account services and privileges . . . . . . . . . . . . 64
General information . . . . . . . . . . . . . . . . . . . . . . . . 67
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Investment portfolio
Financial statements

The Investment Company of America -- Page 1
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CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

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

GENERAL GUIDELINE

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

DEBT SECURITIES

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

INVESTING OUTSIDE THE U.S.

. The fund may invest up to 15% of its assets in issuers domiciled outside
the United States and not included in the Standard & Poor's 500 Composite
Index. In determining the domicile of an issuer, the fund's investment
adviser will consider the domicile determination of a leading provider of
global indexes, such as Morgan Stanley Capital International, and may also
take into account such factors as where the company is legally organized,
maintains principal corporate offices and/or conducts its principal
operations.

* * * * * *

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

The Investment Company of America -- Page 2
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DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

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

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

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

DEBT SECURITIES -- Debt securities are used by issuers to borrow money.
Generally, issuers pay investors periodic interest and repay the amount borrowed
either periodically during the life of the security and/or at maturity. Some
debt securities, such as zero coupon bonds, do not pay current interest, but are
purchased at a discount from their face values and their values accrete over
time to face value at maturity. The market prices of debt securities fluctuate
depending on such factors as interest rates, credit quality and maturity. In
general, market prices of debt securities decline when interest rates rise and
increase when interest rates fall.

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

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

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

PAYMENT EXPECTATIONS -- Debt securities may contain redemption or call
provisions. If an issuer exercises these provisions in a lower interest
rate market, the fund would have to replace the security with a lower
yielding security, resulting in decreased income to investors. If the
issuer of a debt security defaults on its obligations to pay interest or

The Investment Company of America -- Page 3
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principal or is the subject of bankruptcy proceedings, the fund may incur
losses or expenses in seeking recovery of amounts owed to it.

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

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

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

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

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

These securities may include hybrid securities, which also have equity and debt
characteristics. Such securities are normally at the bottom of an issuer's debt
capital structure. As such, they may be more sensitive to economic changes than
more senior debt securities. These securities may also be viewed as more
equity-like by the market when the issuer or its parent company experience
financial problems.

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

The Investment Company of America -- Page 4
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OBLIGATIONS BACKED BY THE "FULL FAITH AND CREDIT" OF THE U.S. GOVERNMENT -- U.S.
government obligations include the following types of securities:

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

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

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

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

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

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

The Investment Company of America -- Page 5
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Additional costs could be incurred in connection with the fund's investment
activities outside the United States. Brokerage commissions may be higher
outside the United States, and the fund will bear certain expenses in connection
with its currency transactions. Furthermore, increased custodian costs may be
associated with maintaining assets in certain jurisdictions.

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

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

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

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

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

* * * * * *

The Investment Company of America -- Page 6
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PORTFOLIO TURNOVER -- Portfolio changes will be made without regard to the
length of time particular investments may have been held. Short-term trading
profits are not the fund's objective, and changes in its investments are
generally accomplished gradually, though short-term transactions may
occasionally be made. High portfolio turnover involves correspondingly greater
transaction costs in the form of dealer spreads or brokerage commissions, and
may result in the realization of net capital gains, which may be taxable when
distributed to shareholders.

The fund's portfolio turnover rates for the fiscal years ended December 31, 2008
and 2007 were 31% and 22%, respectively. The portfolio turnover rate would equal
100% if each security in a fund's portfolio were replaced once per year. See
"Financial highlights" in the prospectus for the fund's annual portfolio
turnover rate for each of the last five fiscal years.

The Investment Company of America -- Page 7
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FUND POLICIES

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

FUNDAMENTAL POLICIES -- The fund has adopted the following fundamental policies,
which may not be changed without approval by holders of a majority of its
outstanding shares. Such majority is defined in the Investment Company Act of
1940, as amended (the "1940 Act"), as the vote of the lesser of (a) 67% or more
of the voting securities present at a shareholder meeting, if the holders of
more than 50% of the outstanding voting securities are present in person or by
proxy, or (b) more than 50% of the outstanding voting securities.

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

1. Which involves promotion or business management by the fund;

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

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

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

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

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

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

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

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

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

The Investment Company of America -- Page 8
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10. Act as underwriter of securities issued by others, engage in distribution
of securities for others, engage in the purchase and sale of commodities or
commodity contracts, borrow money, invest in real estate, or make investments in
other companies for the purpose of exercising control or management.

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

12. Invest in the securities of other investment companies.

Notwithstanding restriction #9 on making loans, the fund may lend portfolio
securities; however, it does not currently intend to engage in an ongoing or
regular securities lending program.

Notwithstanding restriction #12 on investing in the securities of other
investment companies, the fund may invest in securities of other investment
companies if deemed advisable by its officers in connection with the
administration of a deferred compensation plan adopted by directors pursuant to
an exemptive order granted by the Securities and Exchange Commission.

CHANGES TO FUNDAMENTAL POLICIES - At a meeting of the fund's shareholders on
November 24, 2009, shareholders approved changes to the fundamental policies
listed above. The fund plans to implement the new fundamental policies in 2010
or early 2011; however, the fund reserves the right to delay the implementation.
The new policies are set forth in a joint proxy statement available on the SEC's
website at sec.gov.

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

The fund will not:

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

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

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

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

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

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

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

The Investment Company of America -- Page 9
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MANAGEMENT OF THE FUND

BOARD OF DIRECTORS AND OFFICERS

"INDEPENDENT" DIRECTORS/1/

NAME, AGE AND NUMBER OF
POSITION WITH FUND PORTFOLIOS/3/
(YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
AS A DIRECTOR/2/) DURING PAST FIVE YEARS BY DIRECTOR BY DIRECTOR
-----------------------------------------------------------------------------------------------------------
Louise H. Bryson, 65 Chair of the Board of 6 None
Director (1999) Trustees, J. Paul Getty
Trust; former President,
Distribution, Lifetime
Entertainment Network; former
Executive Vice President and
General Manager, Lifetime
Movie Network
-----------------------------------------------------------------------------------------------------------
Mary Anne Dolan, 62 Founder and President, MAD 9 None
Chairman of the Board Ink (communications company);
(Independent and former Editor-in-Chief, The
Non-Executive) (2000) Los Angeles Herald Examiner
-----------------------------------------------------------------------------------------------------------
James G. Ellis, 62 Dean and Professor of 40 Quiksilver, Inc.
Director (2008) Marketing, Marshall School of
Business, University of
Southern California
-----------------------------------------------------------------------------------------------------------
Martin Fenton, 74 Chairman of the Board, Senior 40 None
Director (2000) Resource Group LLC
(development and management
of senior living communities)
-----------------------------------------------------------------------------------------------------------
Leonard R. Fuller, 63 President and CEO, Fuller 40 None
Director (2002) Consulting (financial
management consulting firm)
-----------------------------------------------------------------------------------------------------------
William D. Jones, 54 Real estate developer/ owner, 6 Sempra Energy;
Director (2010) President and CEO, CityLink SouthWest Water Company
Investment Corporation
(acquires, develops and
manages real estate ventures
in selected urban
communities) and City Scene
Management Company (provides
commercial asset and property
management services)
-----------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 10
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NAME, AGE AND NUMBER OF
POSITION WITH FUND PORTFOLIOS/3/
(YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
AS A DIRECTOR/2/) DURING PAST FIVE YEARS BY DIRECTOR BY DIRECTOR
-----------------------------------------------------------------------------------------------------------
L. Daniel Jorndt, 68 Retired; former Chairman of 3 None
Director (2006) the Board and CEO, Walgreen
Co. (drug store chain)
-----------------------------------------------------------------------------------------------------------
William H. Kling,/5/,/6/ 67 President and CEO, American 9 None
(1985) Public Media Group
-----------------------------------------------------------------------------------------------------------
John G. McDonald, 72 Stanford Investors Professor, 12 iStar Financial, Inc.;
Director (1976) Graduate School of Business, Plum Creek Timber Co.;
Stanford University Scholastic Corporation;
Varian, Inc.
-----------------------------------------------------------------------------------------------------------
Bailey Morris-Eck, 65 Director and Programming 3 None
Director (1993) Chair, WYPR Baltimore/
Washington (public radio
station); Senior Adviser,
Financial News (London);
Senior Fellow, Institute for
International Economics;
former Senior Associate and
head of the Global Policy
Initiative, Reuters
Foundation
-----------------------------------------------------------------------------------------------------------
Richard G. Newman,/7/ 75 Chairman of the Board, AECOM 13 Sempra Energy;
Director (1996) Technology Corporation SouthWest Water Company
(engineering, consulting and
professional technical
services)
-----------------------------------------------------------------------------------------------------------
Olin C. Robison, Ph.D., 73 Fellow, The Oxford Centre for 3 American Shared Hospital
Director (1987) the Study of Christianity and Services
Culture; Director, The Oxford
Project on Religion and
Public Policy; President
Emeritus of the Salzburg
Seminar; President Emeritus,
Middlebury College
-----------------------------------------------------------------------------------------------------------
Steven B. Sample, Ph.D., 69 President, University of 3 Intermec, Inc.
Director (2010) Southern California
-----------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 11
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"INTERESTED" DIRECTORS/8/,/9/

PRINCIPAL OCCUPATION(S)
DURING PAST FIVE YEARS
NAME, AGE AND AND POSITIONS NUMBER OF
POSITION WITH FUND HELD WITH AFFILIATED ENTITIES PORTFOLIOS/3/
(YEAR FIRST ELECTED OR THE PRINCIPAL UNDERWRITER OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
AS A DIRECTOR/OFFICER/2/) OF THE FUND BY DIRECTOR BY DIRECTOR
--------------------------------------------------------------------------------------------------------------
James B. Lovelace, 53 Senior Vice President - Capital 11 None
Vice Chairman of the Board Research Global Investors,
(1994) Capital Research and Management
Company; Director, The Capital
Group Companies, Inc.*
--------------------------------------------------------------------------------------------------------------
Donald D. O'Neal, 49 Senior Vice President - Capital 18 None
President and Director Research Global Investors,
(1994) Capital Research and Management
Company; Director, The Capital
Group Companies, Inc.*
--------------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 12
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OTHER OFFICERS/9/

NAME, AGE AND
POSITION WITH FUND PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
(YEAR FIRST ELECTED AND POSITIONS HELD WITH AFFILIATED ENTITIES
AS AN OFFICER/2/) OR THE PRINCIPAL UNDERWRITER OF THE FUND
-----------------------------------------------------------------------------------------
Paul G. Haaga, Jr., 61 Vice Chairman of the Board, Capital Research and
Executive Vice Management Company; Senior Vice President - Fixed
President (2007) Income, Capital Research and Management Company
-----------------------------------------------------------------------------------------
Joyce E. Gordon, 53 Senior Vice President - Capital Research Global
Senior Vice Investors, Capital Research and Management Company;
President (1998) Director, Capital Research and Management Company
-----------------------------------------------------------------------------------------
Anne M. Llewellyn, 62 Senior Vice President - Fund Business Management Group,
Vice President (1984) Capital Research and Management Company
-----------------------------------------------------------------------------------------
Paul F. Roye, 56 Senior Vice President - Fund Business Management Group,
Vice President Capital Research and Management Company; Director,
(2008) American Funds Service Company*; former Director,
Division of Investment Management, United States
Securities and Exchange Commission
-----------------------------------------------------------------------------------------
Vincent P. Corti, 53 Vice President - Fund Business Management Group,
Secretary (1994) Capital Research and Management Company
-----------------------------------------------------------------------------------------
Carmelo Spinella, 46 Senior Vice President - Fund Business Management Group,
Treasurer (2006) Capital Research and Management Company; Director,
American Funds Service Company*
-----------------------------------------------------------------------------------------
Raymond F. Sullivan, Jr., 52 Vice President - Fund Business Management Group,
Assistant Secretary Capital Research and Management Company
(2008)
-----------------------------------------------------------------------------------------
Brian D. Bullard, 40 Vice President - Fund Business Management Group,
Assistant Treasurer Capital Research and Management Company; former Chief
(2008) Accountant, Division of Investment Management, United
States Securities and Exchange Commission
-----------------------------------------------------------------------------------------

* Company affiliated with Capital Research and Management Company.

1 The term "independent" director refers to a director who is not an "interested
person" of the fund within the meaning of the 1940 Act.
2 Directors and officers of the fund are elected annually and serve until
earlier resignation, removal or retirement.
3 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R) Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
4 This includes all directorships (other than those in the American Funds or
other funds managed by Capital Research and Management Company) that are held
by each director as a director of a public company or a registered investment
company.
5 Gordon Crawford (Senior Vice President, Capital Research Global Investors,
Capital Research and Management Company and Director, The Capital Group
Companies, Inc.) has been a trustee of Southern California Public Radio, where
Mr. Kling formerly served as a trustee and as Second Vice Chair during 2008 and
2009.
6 Mr. Kling is a former director of Irwin Financial Corporation, which filed a
petition for liquidation under Chapter 7 of the federal Bankruptcy Code on
September 21, 2009. This action followed the issuance of consent orders by
relevant federal and state banking authorities and the appointment of the
Federal Deposit Insurance Corporation as receiver for Irwin Financial
Corporation's two banking subsidiaries.
7 The investment adviser and its affiliates use a subsidiary of AECOM, Inc. to
perform architectural and space management services. The investment adviser's
business relationship with the subsidiary preceded its acquisition by AECOM in
1994. The total fees relating to this engagement for the last two years
represent less than 0.1% of AECOM, Inc.'s 2008 gross revenues.
8 "Interested persons" of the fund within the meaning of the 1940 Act, on the
basis of their affiliation with the fund's investment adviser, Capital Research
and Management Company, or affiliated entities (including the fund's principal
underwriter).
9 All of the officers listed, with the exception of Anne M. Llewellyn and
Carmelo Spinella, are officers and/or directors/trustees of one or more of the
other funds for which Capital Research and Management Company serves as
investment adviser.

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

The Investment Company of America -- Page 13
<PAGE>

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

AGGREGATE
DOLLAR
RANGE/1/ OF
INDEPENDENT
AGGREGATE DIRECTORS
DOLLAR RANGE/1/ DOLLAR DEFERRED
OF SHARES RANGE/1 /OF COMPENSATION/2/
OWNED IN INDEPENDENT ALLOCATED TO
ALL FUNDS DIRECTORS ALL FUNDS
IN THE DEFERRED WITHIN
DOLLAR RANGE/1/ AMERICAN FUNDS COMPENSATION/2/ AMERICAN FUNDS
OF FUND FAMILY OVERSEEN ALLOCATED FAMILY OVERSEEN
NAME SHARES OWNED BY DIRECTOR TO FUND BY DIRECTOR
------------------------------------------------------------------------------------------
"INDEPENDENT" DIRECTORS
------------------------------------------------------------------------------------------
Louise H. Bryson Over $100,000 Over $100,000 Over $100,000 Over $100,000
------------------------------------------------------------------------------------------
Mary Anne Dolan $50,001 - Over $100,000 N/A N/A
$100,000
------------------------------------------------------------------------------------------
James G. Ellis/3/ $10,001 - Over $100,000 N/A N/A
$50,000
------------------------------------------------------------------------------------------
Martin Fenton Over $100,000 Over $100,000 Over $100,000 Over $100,000
------------------------------------------------------------------------------------------
Leonard R. Fuller $1 - $10,000 $50,001 - $50,001 - Over $100,000
$100,000 $100,000
------------------------------------------------------------------------------------------
William D. Jones/4/ None Over $100,000 N/A $50,001 -
$100,000
------------------------------------------------------------------------------------------
L. Daniel Jorndt Over $100,000 Over $100,000 N/A N/A
------------------------------------------------------------------------------------------
William H. Kling/4/ None Over $100,000 N/A N/A
------------------------------------------------------------------------------------------
John G. McDonald $50,001 - Over $100,000 N/A N/A
$100,000
------------------------------------------------------------------------------------------
Bailey Morris-Eck $50,001 - $50,001 - N/A Over $100,000
$100,000 $100,000
------------------------------------------------------------------------------------------
Richard G. Newman Over $100,000 Over $100,000 N/A N/A
------------------------------------------------------------------------------------------
Olin C. Robison $50,001 - $50,001 - Over $100,000 Over $100,000
$100,000 $100,000
------------------------------------------------------------------------------------------
Steven B. Sample/4/ None Over $100,000 N/A N/A
------------------------------------------------------------------------------------------

The Investment Company of America -- Page 14
<PAGE>

FUND SHARES OWNED BY DIRECTORS AS OF NOVEMBER 30, 2009:

AGGREGATE
DOLLAR RANGE/1/
OF SHARES
OWNED IN
ALL FUNDS
IN THE
DOLLAR RANGE/1/ AMERICAN FUNDS
OF FUND FAMILY OVERSEEN
NAME SHARES OWNED BY DIRECTOR
-----------------------------------------------------------------------------
"INDEPENDENT" DIRECTORS
-----------------------------------------------------------------------------
Louise H. Bryson Over $100,000 Over $100,000
-----------------------------------------------------------------------------
Mary Anne Dolan $50,001 - $100,000 Over $100,000
-----------------------------------------------------------------------------
James G. Ellis $10,001 - $50,000 Over $100,000
-----------------------------------------------------------------------------
Martin Fenton Over $100,000 Over $100,000
-----------------------------------------------------------------------------
Leonard R. Fuller $10,001 - $50,000 $50,001 - $100,000
-----------------------------------------------------------------------------
William D. Jones None Over $100,000
-----------------------------------------------------------------------------
L. Daniel Jorndt Over $100,000 Over $100,000
-----------------------------------------------------------------------------
William H. Kling $10,001 - $50,000 Over $100,000
-----------------------------------------------------------------------------
John G. McDonald $50,001 - $100,000 Over $100,000
-----------------------------------------------------------------------------
Bailey Morris-Eck $50,001 - $100,000 Over $100,000
-----------------------------------------------------------------------------
Richard G. Newman Over $100,000 Over $100,000
-----------------------------------------------------------------------------
Olin C. Robison Over $100,000 Over $100,000
-----------------------------------------------------------------------------
Steven B. Sample None Over $100,000
-----------------------------------------------------------------------------

The Investment Company of America -- Page 15
<PAGE>

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

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; and Over $100,000. The amounts listed
for "interested" directors include shares owned through The Capital Group
Companies, Inc. retirement plan and 401(k) plan.
2 Eligible directors may defer their compensation under a nonqualified deferred
compensation plan. Deferred amounts accumulate at an earnings rate determined
by the total return of one or more American Funds as designated by the
director.
3 Mr. Ellis was elected a director on December 10, 2008 and invested into the
fund January 15, 2009.
4 Messrs. Jones, Kling and Sample were elected to the board effective January 1,
2010. A separate table has been provided with fund shares owned by independent
directors as of November 30, 2009.

DIRECTOR COMPENSATION -- No compensation is paid by the fund to any officer or
director who is a director, officer or employee of the investment adviser or its
affiliates. The boards of funds advised by the investment adviser typically meet
either individually or jointly with the boards of one or more other such funds
with substantially overlapping board membership (in each case referred to as a
"board cluster"). The fund typically pays each independent director an annual
fee, which ranges from $13,125 to $25,000, based primarily on the total number
of board clusters on which that independent director serves.

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

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

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

The Investment Company of America -- Page 16
<PAGE>

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

TOTAL COMPENSATION (INCLUDING
AGGREGATE COMPENSATION VOLUNTARILY DEFERRED COMPENSATION/1/)
(INCLUDING VOLUNTARILY FROM ALL FUNDS MANAGED BY
DEFERRED COMPENSATION/1/) CAPITAL RESEARCH AND MANAGEMENT
NAME FROM THE FUND COMPANY OR ITS AFFILIATES/2/
------------------------------------------------------------------------------------------
Louise H. Bryson/3/ $109,584 $155,500
------------------------------------------------------------------------------------------
Mary Anne Dolan 103,000 311,666
------------------------------------------------------------------------------------------
James G. Ellis 11,125 132,063
------------------------------------------------------------------------------------------
Martin Fenton/3/ 101,992 418,821
------------------------------------------------------------------------------------------
Leonard R. Fuller/3/ 108,489 338,800
------------------------------------------------------------------------------------------
William D. Jones/4/ None 179,792
------------------------------------------------------------------------------------------
L. Daniel Jorndt/3/ 113,000 113,000
------------------------------------------------------------------------------------------
William H. Kling/4/ 10,000/5/ 349,000
------------------------------------------------------------------------------------------
John G. McDonald/3/ 103,834 398,667
------------------------------------------------------------------------------------------
Bailey Morris-Eck 93,334 185,500
------------------------------------------------------------------------------------------
Richard G. Newman 133,555 272,800
------------------------------------------------------------------------------------------
Olin C. Robison/3/ 109,834 210,000
------------------------------------------------------------------------------------------
Steven B. Sample/4/ None 104,000
------------------------------------------------------------------------------------------

1 Amounts may be deferred by eligible directors under a nonqualified deferred
compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more American Funds
as designated by the directors. Compensation shown in this table for the fiscal
year ended December 31, 2008 does not include earnings on amounts deferred in
previous fiscal years. See footnote 3 to this table for more information.
2 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R) Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
3 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) through the 2008
fiscal year for participating directors is as follows: Louise H. Bryson
($619,693), Martin Fenton ($239,720), Leonard R. Fuller ($20,426), L. Daniel
Jorndt ($179,227), John G. McDonald ($1,733,691) and Olin C. Robison
($639,330). Amounts deferred and accumulated earnings thereon are not funded
and are general unsecured liabilities of the fund until paid to the directors.
4 Messrs. Jones, Kling and Sample were elected to the board effective January 1,
2010.
5 Mr. Kling served on the fund's advisory board through December 31, 2009.

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

FUND ORGANIZATION AND THE BOARD OF DIRECTORS -- The fund, an open-end,
diversified management investment company, was organized as a Delaware
corporation on August 28, 1933. At a meeting of the fund's shareholders on
November 24, 2009, shareholders approved the reorganization of the fund to a
Delaware statutory trust. The reorganization is expected to be completed in 2010
or early 2011; however, the fund reserves the right to delay the implementation.
A summary comparison of the governing documents and state laws affecting the

The Investment Company of America -- Page 17
<PAGE>

Delaware statutory trust and the current form of organization of the fund can be
found in a joint proxy statement available on the SEC's website at sec.gov.
Although the board of directors has delegated day-to-day oversight to the
investment adviser, all fund operations are supervised by the fund's board,
which meets periodically and performs duties required by applicable state and
federal laws.

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

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

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

The fund holds annual meetings of shareholders for the purpose of electing
directors. Significant matters that require shareholder approval, such as a
change in a fundamental investment policy, will be presented to shareholders at
a meeting called for such purpose. Shareholders have one vote per share owned.
At the request of the holders of at least 10% of the shares, the fund will hold
a meeting at which any member of the board could be removed by a majority vote.

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

COMMITTEES OF THE BOARD OF DIRECTORS -- The fund has an audit committee
comprised of Mary Anne Dolan, James G. Ellis, Leonard R. Fuller, William D.
Jones, L. Daniel Jorndt, John G. McDonald, Richard G. Newman and Steven B.
Sample, none of whom is an "interested person" of the fund within the meaning of
the 1940 Act. The committee provides oversight regarding the fund's accounting
and financial reporting policies and practices, its internal controls and the
internal controls of the fund's principal service providers. The committee acts
as a liaison

The Investment Company of America -- Page 18
<PAGE>

between the fund's independent registered public accounting firm and the full
board of directors. Five audit committee meetings were held during the 2008
fiscal year.

The fund has a contracts committee comprised of Louise H. Bryson, Mary Anne
Dolan, James G. Ellis, Martin Fenton, Leonard R. Fuller, William D. Jones, L.
Daniel Jorndt, William H. Kling, John G. McDonald, Bailey Morris-Eck, Richard G.
Newman, Olin C. Robison and Steven B. Sample, none of whom is an "interested
person" of the fund within the meaning of the 1940 Act. The committee's
principal function is to request, review and consider the information deemed
necessary to evaluate the terms of certain agreements between the fund and its
investment adviser or the investment adviser's affiliates, such as the
Investment Advisory and Service Agreement, Principal Underwriting Agreement,
Administrative Services Agreement and Plans of Distribution adopted pursuant to
rule 12b-1 under the 1940 Act, that the fund may enter into, renew or continue,
and to make its recommendations to the full board of directors on these matters.
One contracts committee meeting was held during the 2008 fiscal year.

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

The Investment Company of America -- Page 19
<PAGE>

ADVISORY BOARD MEMBERS

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

NUMBER OF BOARDS/1/
WITHIN THE FUND OTHER
NAME AND AGE PRINCIPAL OCCUPATION(S) COMPLEX ON WHICH DIRECTORSHIPS/2/
(YEAR FIRST ELECTED) DURING PAST FIVE YEARS MEMBER SERVES HELD
------------------------------------------------------------------------------------------------------------------
Thomas M. Crosby, Jr., 71 Partner, Faegre & Benson (law 1 None
(1995) firm)
------------------------------------------------------------------------------------------------------------------
Daniel R. Fung, 56 Chairman of the Board, Des Voeux 1 None
(2008) Chambers (law firm)
------------------------------------------------------------------------------------------------------------------
Ellen H. Goldberg, Ph.D., 64 Consultant; Professor Emeritus, 1 None
(1998) University of New Mexico; former
Interim President, Santa Fe
Institute (former President)
------------------------------------------------------------------------------------------------------------------
Claudio X. Gonzalez Chairman of the Board, 1 General Electric Company;
Laporte, 75 Kimberly-Clark de Mexico, S.A. Grupo Alfa, S.A. de C.V.;
Director (2001) (household products) Grupo Carso, S.A. de
C.V.;
Grupo Financiero Inbursa;
Grupo Industrial
Saltillo, S.A. de C.V.;
Grupo Mexico, S.A. de
C.V.;
Grupo Televisa, S.A.B;
The Mexico Fund
------------------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 20
<PAGE>

NUMBER OF BOARDS/1/
WITHIN THE FUND OTHER
NAME AND AGE PRINCIPAL OCCUPATION(S) COMPLEX ON WHICH DIRECTORSHIPS/2/
(YEAR FIRST ELECTED) DURING PAST FIVE YEARS MEMBER SERVES HELD
------------------------------------------------------------------------------------------------------------------
John C. Mazziotta, M.D., Chair, Department of Neurology, 1 None
Ph.D., 60 University of California at Los
(2007) Angeles; Associate Director,
Semel Institute, UCLA; Director,
Brain Mapping Center, UCLA
------------------------------------------------------------------------------------------------------------------
Robert J. O'Neill, Ph.D., 73 Member of the Board of 4 None
(1988) Directors, The Lowy Institute
for International Policy
Studies, Sydney, Australia;
Chairman, Academic Advisory
Committee, United States Studies
Centre, University of Sydney,
Australia; Chairman of
Directors, Forty Seven
FriendsPty Ltd (a not-for-profit
supporting a local art and craft
center in Australia); former
Planning Director and acting
CEO, United States Studies
Centre, University of Sydney,
Australia; former Deputy
Chairman of the Council and
Chairman of the International
Advisory Panel, Graduate School
of Government, University of
Sydney, Australia; former
Chairman of the Council,
Australian Strategic Policy
Institute; former Chichele
Professor of the History of War
and Fellow, All Souls College,
University of Oxford; former
Chairman of the Council,
International Institute for
Strategic Studies
------------------------------------------------------------------------------------------------------------------

1 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R) Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations. Includes advisory board
and, where applicable, director service.
2 This includes all directorships (other than those of the American Funds or
other funds managed by Capital Research and Management Company) that are held
by each advisory board member as a director of a public company or a registered
investment company.

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

ADVISORY BOARD MEMBER COMPENSATION -- The fund pays fees of $10,000 per annum to
advisory board members who are not affiliated with the investment adviser.

No pension or retirement benefits are accrued as part of fund expenses. The
advisory board members may elect, on a voluntary basis, to defer all or a
portion of their fees through a deferred compensation plan in effect for the
fund. The fund also reimburses certain expenses of the advisory board members
who are not affiliated with the fund.

The Investment Company of America -- Page 21
<PAGE>

ADVISORY BOARD MEMBER COMPENSATION EARNED DURING THE FISCAL YEAR ENDED DECEMBER 31, 2008

1 Amounts may be deferred by eligible advisory board members under a
non-qualified deferred compensation plan adopted by the fund in 1993. Deferred
amounts accumulate at an earnings rate determined by the total return of one or
more American Funds as designated by the advisory board member. Compensation
for the fiscal year ended December 31, 2008 does not include earnings on
amounts deferred in previous years.
2 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R) Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
3 Mr. Gonzalez was elected to the advisory board effective January 1, 2010.
Previous to this election he served as a director of the fund.

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

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

The Investment Company of America -- Page 22
<PAGE>

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

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

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

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

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

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

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

COMPENSATION AND BENEFIT PLANS -- Option plans are complicated, and many
factors are considered in evaluating a plan. Each plan is evaluated based
on protecting shareholder interests and a knowledge of the company and its
management. Considerations include the pricing (or repricing) of options
awarded under the plan and the impact of dilution on existing shareholders
from past and future equity awards. Compensation

The Investment Company of America -- Page 23
<PAGE>

packages should be structured to attract, motivate and retain existing
employees and qualified directors; however, they should not be excessive.

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

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

NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
-------------------------------------------------------------------------------
Edward D. Jones & Co. Record Class A 20.84%
Omnibus Account Class B 12.89
Maryland Heights, MO Class F-1 5.68
-------------------------------------------------------------------------------
First Clearing, LLC Record Class A 7.90
Custody Account Class B 8.50
St. Louis, MO Class C 11.69
Class F-1 13.85
-------------------------------------------------------------------------------
Merrill Lynch Record Class C 13.53
Omnibus Account Class F-2 18.37
Jacksonville, FL
-------------------------------------------------------------------------------
Citigroup Global Markets, Inc. Record Class C 12.61
Omnibus Account Class F-1 5.79
New York, NY
-------------------------------------------------------------------------------
Charles Schwab & Co., Inc. Record Class F-1 6.15
Custody Account Class F-2 5.67
San Francisco, CA
-------------------------------------------------------------------------------
NFS, LLC FEBO Record Class F-2 6.45
US Bank National Association Beneficial
Milwaukee, WI
-------------------------------------------------------------------------------
Hartford Life Insurance Co. Separate Record Class R-1 39.71
Account Beneficial Class R-3 12.92
401K Plan
Hartford, CT
-------------------------------------------------------------------------------
Principal Financial Group Record Class R-1 5.91
Omnibus Account
Des Moines, IA
-------------------------------------------------------------------------------
Lincoln Life Insurance Company Record Class R-4 26.81
Omnibus Account
Fort Wayne, IN
-------------------------------------------------------------------------------
Lockheed Martin Corporation Record Class R-5 49.41
Retirement Plan Beneficial
Quincy, MA
-------------------------------------------------------------------------------
Mercer Trust Company Record Class R-5 9.18
Abbott Laboratories
Retirement Plan Beneficial
Norwood, MA
-------------------------------------------------------------------------------
John Hancock Life Insurance Co. USA Record Class R-5 8.65
Omnibus Account
Boston, MA
-------------------------------------------------------------------------------
American Funds 2020 Target Date Record Class R-6 15.66
Retirement Fund
Norfolk, VA
-------------------------------------------------------------------------------
American Funds 2015 Target Date Record Class R-6 13.10
Retirement Fund
Norfolk, VA
-------------------------------------------------------------------------------
American Funds 2025 Target Date Record Class R-6 12.96
Retirement Fund
Norfolk, VA
-------------------------------------------------------------------------------
American Funds 2030 Target Date Record Class R-6 12.63
Retirement Fund
Norfolk, VA
-------------------------------------------------------------------------------
American Funds 2035 Target Date Record Class R-6 9.46
Retirement Fund
Norfolk, VA
-------------------------------------------------------------------------------
American Funds 2040 Target Date Record Class R-6 8.54
Retirement Fund
Norfolk, VA
-------------------------------------------------------------------------------
American Funds 2010 Target Date Record Class R-6 7.98
Retirement Fund
Norfolk, VA
-------------------------------------------------------------------------------

The Investment Company of America -- Page 24
<PAGE>

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

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

The Investment Company of America -- Page 25
<PAGE>

Rather than remain as investment divisions, Capital World Investors and Capital
Research Global Investors may be incorporated into wholly owned subsidiaries of
Capital Research and Management Company. In that event, Capital Research and
Management Company would continue to be the investment adviser, and day-to-day
investment management of equity assets would continue to be carried out through
one or both of these subsidiaries. Although not currently contemplated, Capital
Research and Management Company could incorporate its Fixed Income division in
the future and engage it to provide day-to-day investment management of
fixed-income assets. Capital Research and Management Company and each of the
funds it advises have applied to the U.S. Securities and Exchange Commission for
an exemptive order that would give Capital Research and Management Company the
authority to use, upon approval of the fund's board, its management subsidiaries
and affiliates to provide day-to-day investment management services to the fund,
including making changes to the management subsidiaries and affiliates providing
such services. The fund's shareholders approved this arrangement at a meeting of
the fund's shareholders on November 24, 2009. There is no assurance that Capital
Research and Management Company will incorporate its investment divisions or
exercise any authority, if granted, under an exemptive order.

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

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

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

To encourage a long-term focus, bonuses based on investment results are
calculated by comparing pretax total investment returns to relevant benchmarks
over the most recent year, a four-year rolling average and an eight-year rolling
average with greater weight placed on the four-year and eight-year rolling
averages. For portfolio counselors, benchmarks may include measures of the
marketplaces in which the fund invests and measures of the results of comparable
mutual funds. For investment analysts, benchmarks may include relevant market
measures and appropriate industry or sector indexes reflecting their areas of
expertise. Capital Research and Management Company makes periodic subjective
assessments of analysts' contributions to the investment process and this is an
element of their overall compensation. The investment results of each of the
fund's portfolio counselors may be measured against one or more of the following
benchmarks, depending on his or her investment focus: S&P 500, the securities
that are eligible to be purchased by the fund; Lipper Growth & Income Funds
Index; Barclays Capital U.S. Aggregate Index and Lipper Corporate Debt Funds A
Rated Average.

The Investment Company of America -- Page 26
<PAGE>

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

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

NUMBER NUMBER
OF OTHER OF OTHER NUMBER
REGISTERED POOLED OF OTHER
INVESTMENT INVESTMENT ACCOUNTS
COMPANIES (RICS) VEHICLES (PIVS) FOR WHICH
FOR WHICH FOR WHICH PORTFOLIO
PORTFOLIO PORTFOLIO COUNSELOR
DOLLAR RANGE COUNSELOR COUNSELOR IS A MANAGER
OF FUND IS A MANAGER IS A MANAGER (ASSETS OF
SHARES (ASSETS OF RICS (ASSETS OF PIVS OTHER ACCOUNTS
OWNED/1/ IN BILLIONS)/2/ IN BILLIONS)/3/ IN BILLIONS)/4/
-------------------------------------------------------------------------------------------
R. Michael Shanahan Over 3 $146.8 None None
$1,000,000
--------------------------------------------------------------------------------------------
James B. Lovelace $100,001 - 4 $162.4 None None
$500,000
--------------------------------------------------------------------------------------------
Donald D. O'Neal $500,001 - 2 $190.8 1 $0.03 None
$1,000,000
--------------------------------------------------------------------------------------------
Joyce E. Gordon Over 4 $156.4 None None
$1,000,000
--------------------------------------------------------------------------------------------
C. Ross Sappenfield $100,001 - 2 $ 88.4 1 $0.03 None
$500,000
--------------------------------------------------------------------------------------------

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

INVESTMENT ADVISORY AND SERVICE AGREEMENT -- The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the investment adviser will
continue in effect until April 30, 2010, unless sooner terminated, and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (a) the board of directors, or by the
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the fund, and (b) the vote of a majority of directors who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at

The Investment Company of America -- Page 27
<PAGE>

a meeting called for the purpose of voting on such approval. The Agreement
provides that the investment adviser has no liability to the fund for its acts
or omissions in the performance of its obligations to the fund not involving
willful misconduct, bad faith, gross negligence or reckless disregard of its
obligations under the Agreement. The Agreement also provides that either party
has the right to terminate it, without penalty, upon 60 days' written notice to
the other party, and that the Agreement automatically terminates in the event of
its assignment (as defined in the 1940 Act). In addition, the Agreement provides
that the investment adviser may delegate all, or a portion of, its investment
management responsibilities to one or more subsidiary advisers that is approved
by the fund's board, pursuant to an agreement between the investment adviser and
such subsidiary. Any such subsidiary adviser will be paid solely by the
investment adviser out of its fees.

In addition to providing investment advisory services, the investment adviser
furnishes the services and pays the compensation and travel expenses of persons
to perform the fund's executive, administrative, clerical and bookkeeping
functions, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies and postage used at
the fund's offices. The fund pays all expenses not assumed by the investment
adviser, including, but not limited to: custodian, stock transfer and dividend
disbursing fees and expenses; shareholder recordkeeping and administrative
expenses; costs of the designing, printing and mailing of reports, prospectuses,
proxy statements and notices to its shareholders; taxes; expenses of the
issuance and redemption of fund shares (including stock certificates,
registration and qualification fees and expenses); expenses pursuant to the
fund's plans of distribution (described below); legal and auditing expenses;
compensation, fees and expenses paid to independent directors and members of the
advisory board; association dues; costs of stationery and forms prepared
exclusively for the fund; and costs of assembling and storing shareholder
account data.

As compensation for its services, the investment adviser receives a monthly fee
that is based on daily net asset levels, calculated at the annual rate of 0.39%
on the first $1 billion of net assets, plus 0.336% on net assets over $1 billion
to $2 billion, plus 0.30% on net assets over $2 billion to $3 billion, plus
0.276% on net assets over $3 billion to $5 billion, plus 0.258% on net assets
over $5 billion to $8 billion, plus 0.246% on net assets over $8 billion to $13
billion, plus 0.24% on net assets over $13 billion to $21 billion, plus 0.234%
on net assets over $21 billion to $34 billion, plus 0.231% on net assets over
$34 billion to $44 billion, plus 0.228% on net assets over $44 billion to $55
billion, plus 0.225% on net assets over $55 billion to $71 billion, plus 0.222%
on net assets over $71 billion to $89 billion, plus 0.219% on net assets in
excess of $89 billion.

For the fiscal years ended December 31, 2008, 2007 and 2006, the investment
adviser's management fee was based on prior month end assets calculated at the
annualized rates set forth above, and the investment adviser was entitled to
receive from the fund management fees of $172,589,000. $215,810,000 and
$198,992,000, respectively. After giving effect to the management fee waiver
described below, the fund paid the investment adviser management fees of
$155,330,000 (a reduction of $17,259,000), $194,229,000 (a reduction of
$21,581,000) and $179,093,000 (a reduction of $19,899,000) for the fiscal years
ended December 31, 2008, 2007 and 2006, respectively.

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

The Investment Company of America -- Page 28
<PAGE>

management fees that the investment adviser was otherwise entitled to receive.
The waiver was discontinued effective January 1, 2009.

ADMINISTRATIVE SERVICES AGREEMENT -- The Administrative Services Agreement (the
"Administrative Agreement") between the fund and the investment adviser relating
to the fund's Class C, F, R and 529 shares will continue in effect until April
30, 2010, unless sooner terminated, and may be renewed from year to year
thereafter, provided that any such renewal has been specifically approved at
least annually by the vote of a majority of directors who are not parties to the
Administrative Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The fund may terminate the Administrative Agreement at any time
by vote of a majority of independent directors. The investment adviser has the
right to terminate the Administrative Agreement upon 60 days' written notice to
the fund. The Administrative Agreement automatically terminates in the event of
its assignment (as defined in the 1940 Act).

Under the Administrative Agreement, the investment adviser provides certain
transfer agent and administrative services for shareholders of the fund's Class
C and F shares, and Class R and 529 shares. The investment adviser may contract
with third parties, including American Funds Service Company,/(R)/ the fund's
Transfer Agent, to provide some of these services. Services include, but are not
limited to, shareholder account maintenance, transaction processing, tax
information reporting and shareholder and fund communications. In addition, the
investment adviser monitors, coordinates, oversees and assists with the
activities performed by third parties providing such services. For Class R-2
shares, the investment adviser has agreed to pay a portion of the fees payable
under the Administrative Agreement that would otherwise have been paid by the
fund. For the year ended December 31, 2008, the total fees paid by the
investment adviser were $97.

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

The Investment Company of America -- Page 29
<PAGE>

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

ADMINISTRATIVE SERVICES FEE
------------------------------------------------------------------------------
CLASS C $4,146,000
------------------------------------------------------------------------------
CLASS F-1 1,775,000
------------------------------------------------------------------------------
CLASS F-2 20,000
------------------------------------------------------------------------------
CLASS 529-A 1,172,000
------------------------------------------------------------------------------
CLASS 529-B 255,000
------------------------------------------------------------------------------
CLASS 529-C 363,000
------------------------------------------------------------------------------
CLASS 529-E 50,000
------------------------------------------------------------------------------
CLASS 529-F-1 18,000
------------------------------------------------------------------------------
CLASS R-1 81,000
------------------------------------------------------------------------------
CLASS R-2 2,870,000
------------------------------------------------------------------------------
CLASS R-3 1,415,000
------------------------------------------------------------------------------
CLASS R-4 550,000
------------------------------------------------------------------------------
CLASS R-5 2,070,000
------------------------------------------------------------------------------

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

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

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

. For Class B and 529-B shares sold prior to April 21, 2009, the
Principal Underwriter sold its rights to the 0.75%
distribution-related portion of the 12b-1 fees paid by the fund, as
well as any contingent deferred sales charges, to a third party. The
Principal Underwriter compensated investment dealers for sales of
Class B and 529-B shares out of the proceeds of this sale and kept any
amounts remaining after this compensation was paid.

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

The Investment Company of America -- Page 30
<PAGE>

In addition, the fund reimburses the Principal Underwriter for advancing
immediate service fees to qualified dealers and advisers upon the sale of Class
C and 529-C shares. The fund also reimbursed the Principal Underwriter for
advancing immediate service fees to qualified dealers on sales of Class B and
529-B shares prior to April 21, 2009. The fund also reimburses the Principal
Underwriter for service fees (and, in the case of Class 529-E shares,
commissions) paid on a quarterly basis to qualified dealers and advisers in
connection with investments in Class F-1, 529-F-1, 529-E, R-1, R-2, R-3 and R-4
shares.

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

COMMISSIONS, ALLOWANCE OR
REVENUE COMPENSATION
FISCAL YEAR/PERIOD OR FEES RETAINED TO DEALERS
-----------------------------------------------------------------------------------------------------
CLASS A 2008 $14,486,000 $65,539,000
2007 19,516,000 87,565,000
2006 21,449,000 97,597,000
-----------------------------------------------------------------------------------------------------
CLASS B 2008 307,000 5,246,000
2007 1,265,000 7,808,000
2006 1,472,000 9,507,000
-----------------------------------------------------------------------------------------------------
CLASS C 2008 557,000 2,590,000
2007 934,000 3,881,000
2006 598,000 4,228,000
-----------------------------------------------------------------------------------------------------
CLASS 529-A 2008 952,000 4,547,000
2007 1,209,000 5,764,000
2006 1,196,000 5,796,000
-----------------------------------------------------------------------------------------------------
CLASS 529-B 2008 43,000 685,000
2007 125,000 833,000
2006 142,000 894,000
-----------------------------------------------------------------------------------------------------
CLASS 529-C 2008 34,000 466,000
2007 9,000 639,000
2006 9,000 582,000
-----------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 31
<PAGE>

Plans of distribution -- The fund has adopted plans of distribution (the
"Plans") pursuant to rule 12b-1 under the 1940 Act. The Plans permit the fund to
expend amounts to finance any activity primarily intended to result in the sale
of fund shares, provided the fund's board of directors has approved the category
of expenses for which payment is being made.

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

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

Following is a brief description of the Plans:

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

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

CLASS B AND 529-B -- The Plans for Class B and 529-B shares provide for
payments to the Principal Underwriter of up to 0.25% of the fund's average
daily net assets attributable to such shares for paying service-related
expenses and 0.75% for distribution-related expenses, which include the
financing of commissions paid to qualified dealers.

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

The Investment Company of America -- Page 32
<PAGE>

TOTAL
SERVICE DISTRIBUTION ALLOWABLE
RELATED RELATED UNDER
SHARE CLASS PAYMENTS/1/ PAYMENTS/1/ THE PLANS/2/
----------------------------------------------------------------------------------
Class C 0.25% 0.75% 1.00%
----------------------------------------------------------------------------------
Class 529-C 0.25 0.75 1.00
----------------------------------------------------------------------------------
Class F-1 0.25 -- 0.50
----------------------------------------------------------------------------------
Class 529-F-1 0.25 -- 0.50
----------------------------------------------------------------------------------
Class 529-E 0.25 0.25 0.75
----------------------------------------------------------------------------------
Class R-1 0.25 0.75 1.00
----------------------------------------------------------------------------------
Class R-2 0.25 0.50 1.00
----------------------------------------------------------------------------------
Class R-3 0.25 0.25 0.75
----------------------------------------------------------------------------------
Class R-4 0.25 -- 0.50
----------------------------------------------------------------------------------

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

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

12B-1 UNPAID LIABILITY
12B-1 EXPENSES OUTSTANDING
------------------------------------------------------------------------------
CLASS A $138,037,000 $7,069,000
------------------------------------------------------------------------------
CLASS B 32,289,000 1,851,000
------------------------------------------------------------------------------
CLASS C 27,507,000 1,690,000
------------------------------------------------------------------------------
CLASS F-1 3,415,000 339,000
------------------------------------------------------------------------------
CLASS 529-A 2,399,000 135,000
------------------------------------------------------------------------------
CLASS 529-B 2,216,000 146,000
------------------------------------------------------------------------------
CLASS 529-C 3,212,000 251,000
------------------------------------------------------------------------------
CLASS 529-E 243,000 16,000
------------------------------------------------------------------------------
CLASS 529-F-1 0 0
------------------------------------------------------------------------------
CLASS R-1 576,000 48,000
------------------------------------------------------------------------------
CLASS R-2 4,449,000 310,000
------------------------------------------------------------------------------
CLASS R-3 4,152,000 250,000
------------------------------------------------------------------------------
CLASS R-4 937,000 65,000
------------------------------------------------------------------------------

The Investment Company of America -- Page 33
<PAGE>

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

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

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

FUND EXPENSES -- In periods of market volatility, assets of the fund may decline
significantly, causing total annual fund operating expenses to become higher
than the numbers shown in the annual fund operating expenses table in the
prospectus.

The Investment Company of America -- Page 34
<PAGE>

OTHER COMPENSATION TO DEALERS -- As of July 2009, the top dealers (or their
affiliates) that American Funds Distributors anticipates will receive additional
compensation (as described in the prospectus) include:

AIG Advisors Group
Advantage Capital Corporation
American General Securities Incorporated
FSC Securities Corporation
Royal Alliance Associates, Inc.
SagePoint Financial, Inc.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc
Cambridge Investment Research, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Edward Jones
Genworth Financial Securities Corporation
Hefren-Tillotson, Inc.
HTK / Janney Montgomery Group
Hornor, Townsend & Kent, Inc.
Janney Montgomery Scott LLC
ING Advisors Network Inc.
Bancnorth Investment Group, Inc.
Financial Network Investment Corporation
Guaranty Brokerage Services, Inc.
ING Financial Partners, Inc.
Multi-Financial Securities Corporation
Primevest Financial Services, Inc.
Intersecurities / Transamerica
InterSecurities, Inc.
Transamerica Financial Advisors, Inc.
J. J. B. Hilliard, W. L. Lyons, LLC
JJB Hilliard/PNC Bank
PNC Bank, National Association
PNC Investments LLC
Lincoln Financial Advisors Corporation
Lincoln Financial Securities Corporation
LPL Group
Associated Securities Corp.
LPL Financial Corporation
Mutual Service Corporation
Uvest Investment Services
Waterstone Financial Group, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Metlife Enterprises
Metlife Securities Inc.
New England Securities
Tower Square Securities, Inc.
Walnut Street Securities, Inc.
MML Investors Services, Inc.

The Investment Company of America -- Page 35
<PAGE>

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

The Investment Company of America -- Page 36
<PAGE>

EXECUTION OF PORTFOLIO TRANSACTIONS

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

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

The investment adviser may execute portfolio transactions with broker-dealers
who provide certain brokerage and/or investment research services to it, but
only when in the investment adviser's judgment the broker-dealer is capable of
providing best execution for that transaction. The receipt of these services
permits the investment adviser to supplement its own research and analysis and
makes available the views of, and information from, individuals and the research
staffs of other firms. Such views and information may be provided in the form of
written reports, telephone contacts and meetings with securities analysts. These
services may include, among other things, reports and other communications with
respect to individual companies, industries, countries and regions, economic,
political and legal developments, as well as scheduling meetings with corporate
executives and seminars and conferences related to relevant subject matters. The
investment adviser considers these services to be supplemental to its own
internal research efforts and therefore the receipt of investment research from
broker-dealers does not tend to reduce the expenses involved in the investment
adviser's research efforts. If broker-dealers were to discontinue providing such
services it is unlikely the investment adviser would attempt to replicate them
on its own, in part because they would then no longer provide an independent,
supplemental viewpoint. Nonetheless, if it were to attempt to do so, the
investment adviser would incur substantial additional costs. Research services
that the investment adviser receives from broker-dealers may be used by the
investment adviser in servicing the fund and other funds and accounts that it
advises; however, not all such services will necessarily benefit the fund.

The Investment Company of America -- Page 37
<PAGE>

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

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

The investment adviser seeks, on an ongoing basis, to determine what the
reasonable levels of commission rates are in the marketplace. The investment
adviser takes various considerations into account when evaluating such
reasonableness, including, (a) rates quoted by broker-dealers, (b) the size of a
particular transaction in terms of the number of shares and dollar amount, (c)
the complexity of a particular transaction, (d) the nature and character of the
markets on which a particular trade takes place, (e) the ability of a
broker-dealer to provide anonymity while executing trades, (f) the ability of a
broker-dealer to execute large trades while minimizing market impact, (g) the
extent to which a broker-dealer has put its own capital at risk, (h) the level
and type of business done with a particular broker-dealer over a period of time,
(i) historical commission rates, and (j) commission rates that other
institutional investors are paying.

When executing portfolio transactions in the same equity security for the funds
and accounts, or portions of funds and accounts, over which the investment
adviser, through its equity investment divisions, has investment discretion,
each of the investment divisions will normally aggregate its respective
purchases or sales and execute them as part of the same transaction or series of
transactions. When executing portfolio transactions in the same fixed-income
security for the fund and the other funds or accounts over which it or one of
its affiliated companies has investment discretion, the investment adviser will
normally aggregate such purchases or sales

The Investment Company of America -- Page 38
<PAGE>

and execute them as part of the same transaction or series of transactions. The
objective of aggregating purchases and sales of a security is to allocate
executions in an equitable manner among the funds and other accounts that have
concurrently authorized a transaction in such security.

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

Brokerage commissions paid on portfolio transactions for the fiscal years ended
December 31, 2008, 2007 and 2006 amounted to $35,314,000, $27,273,000 and
$26,095,000, respectively. The volume of trading activity increased during 2008,
resulting in an increase in brokerage commissions paid on portfolio
transactions.

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

At the end of the fund's most recent fiscal year, the fund's regular
broker-dealers included Citigroup Global Markets Inc. and J.P. Morgan Securities
Inc. As of the fund's most recent fiscal year-end, the fund held equity
securities of Citigroup Inc. in the amount of $449,818,000 and JPMorgan Chase &
Co. in the amount of $501,485,000.

The Investment Company of America -- Page 39
<PAGE>

DISCLOSURE OF PORTFOLIO HOLDINGS

The fund's investment adviser, on behalf of the fund, has adopted policies and
procedures with respect to the disclosure of information about fund portfolio
securities. These policies and procedures have been reviewed by the fund's board
of directors and compliance will be periodically assessed by the board in
connection with reporting from the fund's Chief Compliance Officer.

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

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

The Investment Company of America -- Page 40
<PAGE>

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

The Investment Company of America -- Page 41
<PAGE>

PRICE OF SHARES

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

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

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

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

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

The Investment Company of America -- Page 42
<PAGE>

Securities with both fixed-income and equity characteristics (e.g., convertible
bonds, preferred stocks, units comprised of more than one type of security,
etc.), or equity securities traded principally among fixed-income dealers, are
valued in the manner described above for either equity or fixed-income
securities, depending on which method is deemed most appropriate by the
investment adviser.

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

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

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

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

The Investment Company of America -- Page 43
<PAGE>

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

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

The Investment Company of America -- Page 44
<PAGE>

TAXES AND DISTRIBUTIONS

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

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

Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
generally means the sum of (a) 98% of ordinary income (generally net investment
income) for the calendar year, (b) 98% of capital gain (both long-term and
short-term) for the one-year period ending on October 31 (as though the one-year
period ending on October 31 were the regulated investment company's taxable
year) and (c) the sum of any untaxed, undistributed net investment income and
net capital gains of the regulated investment company for prior periods. The
term "distributed amount" generally means the sum of (a) amounts actually
distributed by the fund from its current year's ordinary income and capital gain
net income and (b) any amount on which the fund pays income tax during the
periods described above. Although the fund intends to distribute its net
investment income and net capital gains so as to avoid excise tax liability, the
fund may determine that it is in the interest of shareholders to distribute a
lesser amount.

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

The Investment Company of America -- Page 45
<PAGE>

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

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

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

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

If the fund invests in stock of certain passive foreign investment
companies, the fund may be subject to U.S. federal income taxation on a
portion of any "excess distribution" with respect to, or gain from the
disposition of, such stock. The tax would be determined by allocating such
distribution or gain ratably to each day of the fund's holding period for
the stock. The distribution or gain so allocated to any taxable year of the
fund, other than the taxable year of the excess distribution or
disposition, would be taxed to the fund at the highest ordinary income rate
in effect for such year, and the tax would be further increased by an
interest charge to reflect the value of the tax deferral deemed to have
resulted from the ownership of the foreign company's stock. Any amount of
distribution or gain allocated to the taxable year of the distribution or
disposition would be included in the fund's investment company taxable
income and, accordingly, would not be taxable to the fund to the extent
distributed by the fund as a dividend to its shareholders.

The Investment Company of America -- Page 46
<PAGE>

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

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

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

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

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

CAPITAL GAIN DISTRIBUTIONS -- The fund also intends to distribute its net
capital gain each year. The fund's net capital gain is the entire excess of
net realized long-term capital gains over net realized short-term capital
losses. Net capital gains for a fiscal year are computed by taking into
account any capital loss carryforward of the fund.

If any net long-term capital gains in excess of net short-term capital
losses are retained by the fund for reinvestment, requiring federal income
taxes to be paid thereon by the fund, the fund intends to elect to treat
such capital gains as having been distributed to shareholders. As a result,
each shareholder will report such capital gains as long-term

The Investment Company of America -- Page 47
<PAGE>

capital gains taxable to individual shareholders at a maximum 15% capital
gains rate will be able to claim a pro rata share of federal income taxes
paid by the fund on such gains as a credit against personal federal income
tax liability, and will be entitled to increase the adjusted tax basis on
fund shares by the difference between a pro rata share of the retained
gains and such shareholder's related tax credit.

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

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

CAPITAL GAINS -- Distributions of net capital gain that the fund properly
designates as "capital gain dividends" generally will be taxable as
long-term capital gain, regardless of the length of time the shares of the
fund have been held by a shareholder. For non-corporate shareholders, a
capital gain distribution by the fund is subject to a maximum tax rate of
15%. Any loss realized upon the redemption of shares held at the time of
redemption for six months or less from the date of their purchase will be
treated as a long-term capital loss to the extent of any amounts treated as
distributions of long-term capital gains (including any undistributed
amounts treated as distributed capital gains, as described above) during
such six-month period.

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

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

If a shareholder exchanges or otherwise disposes of shares of the fund within 90
days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund, the sales charge previously incurred
in acquiring the fund's shares will not be taken into account (to the extent
such previous sales charges do not exceed the reduction in sales charges) for
the purposes of determining the amount of gain or loss on the exchange, but will
be treated as having been incurred in the acquisition of such other fund(s).

The Investment Company of America -- Page 48
<PAGE>

Any loss realized on a redemption or exchange of shares of the fund will be
disallowed to the extent substantially identical shares are reacquired within
the 61-day period beginning 30 days before and ending 30 days after the shares
are disposed of. Any loss disallowed under this rule will be added to the
shareholder's tax basis in the new shares purchased.

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

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

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

The Investment Company of America -- Page 49
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UNLESS OTHERWISE NOTED, ALL REFERENCES IN THE FOLLOWING PAGES TO CLASS A, B, C
OR F-1 SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR
529-F-1 SHARES. CLASS 529 SHAREHOLDERS SHOULD ALSO REFER TO THE APPLICABLE
PROGRAM DESCRIPTION FOR INFORMATION ON POLICIES AND SERVICES SPECIFICALLY
RELATING TO THESE ACCOUNTS. SHAREHOLDERS HOLDING SHARES THROUGH AN ELIGIBLE
RETIREMENT PLAN SHOULD CONTACT THEIR PLAN'S ADMINISTRATOR OR RECORDKEEPER FOR
INFORMATION REGARDING PURCHASES, SALES AND EXCHANGES.

PURCHASE AND EXCHANGE OF SHARES

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

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

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

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

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

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

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

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

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

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

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Your bank should include the following information when wiring funds:

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

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

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

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

Class 529 shares may be purchased only through CollegeAmerica by investors
establishing qualified higher education savings accounts. Class 529-E shares may
be purchased only by investors participating in CollegeAmerica through an
eligible employer plan. The American Funds state tax-exempt funds are qualified
for sale only in certain jurisdictions, and tax-exempt funds in general should
not serve as retirement plan investments. In addition, the fund and the
Principal Underwriter reserve the right to reject any purchase order.

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

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

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

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

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

. Employer-sponsored CollegeAmerica accounts.

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

. Retirement accounts that are funded with employer contributions; and

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

The Investment Company of America -- Page 51
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The following account types may be established without meeting the initial
purchase minimum, but shareholders wishing to invest in two or more funds must
meet the normal initial purchase minimum of each fund:

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

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

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

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

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

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

The Investment Company of America -- Page 52
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FREQUENT TRADING OF FUND SHARES -- As noted in the prospectus, certain
redemptions may trigger a purchase block lasting 30 calendar days under the
fund's "purchase blocking policy." Under this policy, systematic redemptions
will not trigger a purchase block and systematic purchases will not be
prevented. For purposes of this policy, systematic redemptions include, for
example, regular periodic automatic redemptions and statement of intention
escrow share redemptions. Systematic purchases include, for example, regular
periodic automatic purchases and automatic reinvestments of dividends and
capital gain distributions.

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

MOVING BETWEEN SHARE CLASSES

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

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

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

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

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

The Investment Company of America -- Page 53
<PAGE>

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

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

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

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

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

The Investment Company of America -- Page 54
<PAGE>

SALES CHARGES

CLASS A PURCHASES

PURCHASES BY CERTAIN 403(B) PLANS

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

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

PURCHASES BY SEP PLANS AND SIMPLE IRA PLANS

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

OTHER PURCHASES

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

(1) current or retired directors, trustees, officers and advisory board
members of, and certain lawyers who provide services to, the funds
managed by Capital Research and Management Company, current or retired
employees of Washington Management Corporation, current or retired
employees and partners of The Capital Group Companies, Inc. and its
affiliated companies, certain family members of the above persons, and
trusts or plans primarily for such persons;

(2) currently registered representatives and assistants directly employed
by such representatives, retired registered representatives with
respect to accounts established while active, or full-time employees
(collectively, "Eligible Persons") (and their (a) spouses or
equivalents if recognized under local law, (b) parents and children,
including parents and children in step and adoptive relationships,
sons-in-law and daughters-in-law, and (c) parents-in-law, if the
Eligible Persons or the

The Investment Company of America -- Page 55
<PAGE>

spouses, children or parents of the Eligible Persons are listed in the
account registration with the parents-in-law) of dealers who have
sales agreements with the Principal Underwriter (or who clear
transactions through such dealers), plans for the dealers, and plans
that include as participants only the Eligible Persons, their spouses,
parents and/or children;

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

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

(5) insurance company separate accounts;

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

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

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

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

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

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

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

The Investment Company of America -- Page 56
<PAGE>

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

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

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

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

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

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

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

The Investment Company of America -- Page 57
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SALES CHARGE REDUCTIONS AND WAIVERS

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

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

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

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

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

When a shareholder elects to use a Statement, shares equal to 5% of the
dollar amount specified in the Statement may be held in escrow in the
shareholder's account out of the initial purchase (or subsequent purchases,
if necessary) by the Transfer Agent. All dividends and any capital gain
distributions on shares held in escrow will be credited to the
shareholder's account in shares (or paid in cash, if requested). If the
intended investment is not completed within the specified Statement period,
the purchaser may be required to remit to the Principal Underwriter the
difference between the sales charge actually paid and the sales charge
which would have been paid if the total of such purchases had been made at
a single time. Any dealers assigned to the shareholder's account at the
time a purchase was made during the Statement period will receive a
corresponding commission adjustment if appropriate. If the difference is
not paid by the close of the Statement period, the appropriate number of
shares held in escrow will be redeemed to pay such difference. If the
proceeds from this redemption are inadequate, the purchaser may be liable
to the Principal Underwriter for the balance still outstanding.

Certain payroll deduction retirement plans purchasing Class A shares under
a Statement on or before November 12, 2006, may continue to purchase Class
A shares at the sales charge determined by that particular Statement until
the plans' values reach the amounts specified in their Statements. Upon
reaching such amounts, the Statements for these plans will be deemed
completed and will terminate. In addition, effective May 1, 2009, the

The Investment Company of America -- Page 58
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Statements for these plans will expire if they have not been met by the
next anniversary of the establishment of such Statement. After such
termination, these plans are eligible for additional sales charge
reductions by meeting the criteria under the fund's rights of accumulation
policy.

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

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

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

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

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

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

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

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

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

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

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

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

The Investment Company of America -- Page 59
<PAGE>

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

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

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

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

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

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

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

The Investment Company of America -- Page 60
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The value of all of your holdings in accounts established in calendar year
2005 or earlier will be assigned an initial cost value equal to the market
value of those holdings as of the last business day of 2005. Thereafter,
the cost value of such accounts will increase or decrease according to
actual investments or withdrawals. You must contact your financial adviser
or American Funds Service Company if you have additional information that
is relevant to the calculation of the value of your holdings.

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

You may not purchase Class C or 529-C shares if such combined holdings
cause you to be eligible to purchase Class A or 529-A shares at the $1
million or more sales charge discount rate (i.e. at net asset value).

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

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

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

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

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

The Investment Company of America -- Page 61
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. Redemptions through an automatic withdrawal plan ("AWP") (see
"Automatic withdrawals" under "Shareholder account services and
privileges" in this statement of additional information). For each AWP
payment, assets that are not subject to a CDSC, such as appreciation
on shares and shares acquired through reinvestment of dividends and/or
capital gain distributions, will be redeemed first and will count
toward the 12% limit. If there is an insufficient amount of assets not
subject to a CDSC to cover a particular AWP payment, shares subject to
the lowest CDSC will be redeemed next until the 12% limit is reached.
Any dividends and/or capital gain distributions taken in cash by a
shareholder who receives payments through an AWP will also count
toward the 12% limit. In the case of an AWP, the 12% limit is
calculated at the time an automatic redemption is first made, and is
recalculated at the time each additional automatic redemption is made.
Shareholders who establish an AWP should be aware that the amount of a
payment not subject to a CDSC may vary over time depending on
fluctuations in the value of their accounts. This privilege may be
revised or terminated at any time.

For purposes of this paragraph, "account" means:

. in the case of Class A shares, your investment in Class A shares of
all American Funds (investments representing direct purchases of
American Funds Money Market Fund are excluded);

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

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

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

The Investment Company of America -- Page 62
<PAGE>

SELLING SHARES

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

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

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

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

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

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

The Investment Company of America -- Page 63
<PAGE>

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

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

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

AUTOMATIC REINVESTMENT -- Dividends and capital gain distributions are
reinvested in additional shares of the same class and fund at net asset value
unless you indicate otherwise on the account application. You also may elect to
have dividends and/or capital gain distributions paid in cash by informing the
fund, the Transfer Agent or your investment dealer. Dividends and capital gain
distributions paid to retirement plan shareholders or shareholders of the 529
share classes will be automatically reinvested.

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

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

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

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

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

The Investment Company of America -- Page 64
<PAGE>

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

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

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

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

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

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

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

The Investment Company of America -- Page 65
<PAGE>

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

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

REDEMPTION OF SHARES -- The fund's certificate of incorporation permits the fund
to direct the Transfer Agent to redeem the shares of any shareholder for their
then current net asset value per share if at such time the shareholder of record
owns shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in the fund's
current registration statement under the 1940 Act, and subject to such further
terms and conditions as the board of directors of the fund may from time to time
adopt.

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

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

The Investment Company of America -- Page 66
<PAGE>

GENERAL INFORMATION

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

TRANSFER AGENT -- American Funds Service Company, a wholly owned subsidiary of
the investment adviser, maintains the records of shareholder accounts, processes
purchases and redemptions of the fund's shares, acts as dividend and capital
gain distribution disbursing agent, and performs other related shareholder
service functions. The principal office of American Funds Service Company is
located at 6455 Irvine Center Drive, Irvine, CA 92618. American Funds Service
Company was paid a fee of $63,424,000 for Class A shares and $3,437,000 for
Class B shares for the 2008 fiscal year. American Funds Service Company is also
compensated for certain transfer agency services provided to all share classes
from the administrative services fees paid to Capital Research and Management
Company and from the relevant share class, as described under "Administrative
services agreement."

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -- PricewaterhouseCoopers LLP, 350
South Grand Avenue, Los Angeles, CA 90071, serves as the fund's independent
registered public accounting firm, providing audit services, preparation of tax
returns and review of certain documents to be filed with the Securities and
Exchange Commission. The financial statements included in this statement of
additional information from the annual report have been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as
stated in their report appearing herein. Such financial statements have been so
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing. The selection of the fund's independent
registered public accounting firm is reviewed and determined annually by the
board of directors.

Upon the recommendation of the fund's Audit Committee, on December 9, 2009, a
majority of the fund's board of directors, including a majority of the
independent directors, approved the appointment of Deloitte & Touche LLP as the
fund's independent registered public accounting firm for the fund's fiscal 2010
audit subject to the right of the fund, by a majority vote of the shareholders at
any meeting called for that purpose, to terminate the appointment without penalty.
At no point during the current fiscal year have there been any disagreements
between management and PricewaterhouseCoopers LLP, the fund's former independent
registered public accounting firm.

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

PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- The fund's fiscal
year ends on December 31. Shareholders are provided updated summary prospectuses
annually and at least semi-annually with reports showing the fund's investment
portfolio or summary investment

The Investment Company of America -- Page 67
<PAGE>

portfolio, financial statements and other information. Shareholders may request
a copy of the fund's current prospectus at no cost by calling 800/421-0180 or by
sending an e-mail request to prospectus@americanfunds.com. The fund's annual
financial statements are audited by the fund's independent registered public
accounting firm, PricewaterhouseCoopers LLP. In addition, shareholders may also
receive proxy statements for the fund. In an effort to reduce the volume of mail
shareholders receive from the fund when a household owns more than one account,
the Transfer Agent has taken steps to eliminate duplicate mailings of summary
prospectuses, shareholder reports and proxy statements. To receive additional
copies of a summary prospectus, report or proxy statement, shareholders should
contact the Transfer Agent.

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

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

CODES OF ETHICS -- The fund and Capital Research and Management Company and its
affiliated companies, including the fund's Principal Underwriter, have adopted
codes of ethics that allow for personal investments, including securities in
which the fund may invest from time to time. These codes include a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; preclearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; blackout periods on personal
investing for certain investment personnel; ban on short-term trading profits
for investment personnel; limitations on service as a director of publicly
traded companies; and disclosure of personal securities transactions.

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

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

The Investment Company of America -- Page 68
<PAGE>

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

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $20.96
Maximum offering price per share
(100/94.25 of net asset value per share,
which takes into account the fund's current maximum
sales charge). . . . . . . . . . . . . . . . $22.24

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

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

The Investment Company of America -- Page 69
<PAGE>

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

FUND NUMBERS
-------------------------------------------------
FUND CLASS A CLASS B CLASS C CLASS F-1 CLASS F-2
-------------------------------------------------------------------------------
STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . 002 202 302 402 602
American Balanced Fund/(R)/ 011 211 311 411 611
American Mutual Fund/(R)/ . 003 203 303 403 603
Capital Income Builder/(R)/ 012 212 312 412 612
Capital World Growth and
Income Fund/SM/ . . . . . . 033 233 333 433 633
EuroPacific Growth Fund/(R)/ 016 216 316 416 616
Fundamental Investors/SM/ . 010 210 310 410 610
The Growth Fund of
America/(R)/. . . . . . . . 005 205 305 405 605
The Income Fund of
America/(R)/. . . . . . . . 006 206 306 406 606
International Growth and
Income Fund/SM/ . . . . . . 034 234 334 434 634
The Investment Company of
America/(R)/. . . . . . . . 004 204 304 404 604
The New Economy Fund/(R)/ . 014 214 314 414 614
New Perspective Fund/(R)/ . 007 207 307 407 607
New World Fund/(R)/ . . . . 036 236 336 436 636
SMALLCAP World Fund/(R)/ . 035 235 335 435 635
Washington Mutual Investors
Fund/SM/ . . . . . . . . . 001 201 301 401 601
BOND FUNDS
American Funds Short-Term
Tax-Exempt Bond Fund/SM/ . 039 N/A N/A 439 639
American High-Income
Municipal Bond Fund/(R)/ . 040 240 340 440 640
American High-Income
Trust/SM/ . . . . . . . . . 021 221 321 421 621
The Bond Fund of America/SM/ 008 208 308 408 608
Capital World Bond Fund/(R)/ 031 231 331 431 631
Intermediate Bond Fund of
America/SM/ . . . . . . . . 023 223 323 423 623
Limited Term Tax-Exempt Bond
Fund of America/SM/ . . . . 043 243 343 443 643
Short-Term Bond Fund of
America/SM/ . . . . . . . . 048 248 348 448 648
The Tax-Exempt Bond Fund of
America/(R)/. . . . . . . . 019 219 319 419 619
The Tax-Exempt Fund of
California/(R)/*. . . . . . 020 220 320 420 620
The Tax-Exempt Fund of
Maryland/(R)/*. . . . . . . 024 224 324 424 624
The Tax-Exempt Fund of
Virginia/(R)/*. . . . . . . 025 225 325 425 625
U.S. Government Securities
Fund/SM/. . . . . . . . . . 022 222 322 422 622
MONEY MARKET FUNDS
American Funds Money Market
Fund/SM/ . . . . . . . . . 059 259 359 459 659
___________
*Qualified for sale only in certain jurisdictions.

The Investment Company of America -- Page 70
<PAGE>

FUND NUMBERS
----------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND 529-A 529-B 529-C 529-E 529-F-1
-------------------------------------------------------------------------------
STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . 1002 1202 1302 1502 1402
American Balanced Fund . . . . 1011 1211 1311 1511 1411
American Mutual Fund . . . . . 1003 1203 1303 1503 1403
Capital Income Builder . . . . 1012 1212 1312 1512 1412
Capital World Growth and Income
Fund . . . . . . . . . . . . . 1033 1233 1333 1533 1433
EuroPacific Growth Fund . . . 1016 1216 1316 1516 1416
Fundamental Investors . . . . 1010 1210 1310 1510 1410
The Growth Fund of America . . 1005 1205 1305 1505 1405
The Income Fund of America . . 1006 1206 1306 1506 1406
International Growth and Income
Fund . . . . . . . . . . . . . 1034 1234 1334 1534 1434
The Investment Company of
America. . . . . . . . . . . . 1004 1204 1304 1504 1404
The New Economy Fund . . . . . 1014 1214 1314 1514 1414
New Perspective Fund . . . . . 1007 1207 1307 1507 1407
New World Fund . . . . . . . . 1036 1236 1336 1536 1436
SMALLCAP World Fund . . . . . 1035 1235 1335 1535 1435
Washington Mutual Investors
Fund . . . . . . . . . . . . . 1001 1201 1301 1501 1401
BOND FUNDS
American High-Income Trust . . 1021 1221 1321 1521 1421
The Bond Fund of America . . . 1008 1208 1308 1508 1408
Capital World Bond Fund . . . 1031 1231 1331 1531 1431
Intermediate Bond Fund of
America. . . . . . . . . . . . 1023 1223 1323 1523 1423
Short-Term Bond Fund of America 1048 1248 1348 1548 1448
U.S. Government Securities Fund 1022 1222 1322 1522 1422
MONEY MARKET FUND
American Funds Money Market
Fund . . . . . . . . . . . . . 1059 1259 1359 1559 1459

The Investment Company of America -- Page 71
<PAGE>

FUND NUMBERS
------------------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
FUND R-1 R-2 R-3 R-4 R-5 R-6
-------------------------------------------------------------------------------
STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . . . 2102 2202 2302 2402 2502 2602
American Balanced Fund . . . . . . 2111 2211 2311 2411 2511 2611
American Mutual Fund . . . . . . . 2103 2203 2303 2403 2503 2603
Capital Income Builder . . . . . . 2112 2212 2312 2412 2512 2612
Capital World Growth and Income
Fund . . . . . . . . . . . . . . . 2133 2233 2333 2433 2533 2633
EuroPacific Growth Fund . . . . . 2116 2216 2316 2416 2516 2616
Fundamental Investors . . . . . . 2110 2210 2310 2410 2510 2610
The Growth Fund of America . . . . 2105 2205 2305 2405 2505 2605
The Income Fund of America . . . . 2106 2206 2306 2406 2506 2606
International Growth and Income
Fund . . . . . . . . . . . . . . . 2134 2234 2334 2434 2534 2634
The Investment Company of America 2104 2204 2304 2404 2504 2604
The New Economy Fund . . . . . . . 2114 2214 2314 2414 2514 2614
New Perspective Fund . . . . . . . 2107 2207 2307 2407 2507 2607
New World Fund . . . . . . . . . . 2136 2236 2336 2436 2536 2636
SMALLCAP World Fund . . . . . . . 2135 2235 2335 2435 2535 2635
Washington Mutual Investors Fund . 2101 2201 2301 2401 2501 2601
BOND FUNDS
American High-Income Trust . . . . 2121 2221 2321 2421 2521 2621
The Bond Fund of America . . . . . 2108 2208 2308 2408 2508 2608
Capital World Bond Fund . . . . . 2131 2231 2331 2431 2531 2631
Intermediate Bond Fund of America 2123 2223 2323 2423 2523 2623
Short-Term Bond Fund of America. . 2148 2248 2348 2448 2548 2648
U.S. Government Securities Fund . 2122 2222 2322 2422 2522 2622
MONEY MARKET FUNDS
American Funds Money Market Fund . 2159 2259 2359 2459 2559 2659
___________
*Qualified for sale only in certain jurisdictions.

The Investment Company of America -- Page 72
<PAGE>

FUND NUMBERS
---------------------------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
FUND CLASS A R-1 R-2 R-3 R-4 R-5 R-6
-------------------------------------------------------------------------------
AMERICAN FUNDS TARGET DATE RETIREMENT SERIES/(R)/
American Funds 2050 Target
Date Retirement Fund/(R)/ 069 2169 2269 2369 2469 2569 2669
American Funds 2045 Target
Date Retirement Fund/(R)/ 068 2168 2268 2368 2468 2568 2668
American Funds 2040 Target
Date Retirement Fund/(R)/ 067 2167 2267 2367 2467 2567 2667
American Funds 2035 Target
Date Retirement Fund/(R)/ 066 2166 2266 2366 2466 2566 2666
American Funds 2030 Target
Date Retirement Fund/(R)/ 065 2165 2265 2365 2465 2565 2665
American Funds 2025 Target
Date Retirement Fund/(R)/ 064 2164 2264 2364 2464 2564 2664
American Funds 2020 Target
Date Retirement Fund/(R)/ 063 2163 2263 2363 2463 2563 2663
American Funds 2015 Target
Date Retirement Fund/(R)/ 062 2162 2262 2362 2462 2562 2662
American Funds 2010 Target
Date Retirement Fund/(R)/ 061 2161 2261 2361 2461 2561 2661

The Investment Company of America -- Page 73
<PAGE>

APPENDIX

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

DESCRIPTION OF BOND RATINGS

MOODY'S
LONG-TERM RATING DEFINITIONS

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

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

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

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

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

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

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

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

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

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

The Investment Company of America -- Page 74
<PAGE>

STANDARD & POOR'S
LONG-TERM ISSUE CREDIT RATINGS

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

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

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

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

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

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

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

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

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

The Investment Company of America -- Page 75
<PAGE>

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

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

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

The Investment Company of America -- Page 76

....

[logo – American Funds®]

The Investment Company of America®

Investment portfolio

December 31, 2008

Common stocks — 84.32%	Shares			Value (000)

ENERGY — 8.57%
Baker Hughes Inc.		10,275,000		$	329,519
Chevron Corp.		13,572,278			1,003,942
ConocoPhillips		8,911,672			461,625
Eni SpA1		4,225,000			100,364
Eni SpA (ADR)		520,000			24,866
Halliburton Co.		2,550,000			46,359
Hess Corp.		6,341,300			340,147
Marathon Oil Corp.		10,478,300			286,686
Royal Dutch Shell PLC, Class A (ADR)		15,065,000			797,541
Royal Dutch Shell PLC, Class B1		833,265			21,211
Royal Dutch Shell PLC, Class B (ADR)		2,665,498			137,087
Schlumberger Ltd.		18,424,999			779,930
TOTAL SA1		4,040,000			220,798
					4,550,075

MATERIALS — 2.35%
Air Products and Chemicals, Inc.		1,750,000			87,973
Alcoa Inc.		1,676,400			18,876
Barrick Gold Corp.		7,150,000			262,906
Dow Chemical Co.		4,450,000			67,150
MeadWestvaco Corp.		4,085,000			45,711
Monsanto Co.		3,081,000			216,748
Newmont Mining Corp.		4,790,000			194,953
Nucor Corp.		1,447,000			66,851
POSCO1		537,142			158,361
POSCO (ADR)		95,000			7,149
United States Steel Corp.		3,060,000			113,832
Weyerhaeuser Co.		300,000			9,183
					1,249,693

INDUSTRIALS — 9.49%
3M Co.		2,750,800			158,281
Boeing Co.		1,850,000			78,939
Burlington Northern Santa Fe Corp.		4,705,200			356,231
Cummins Inc.		3,000,000			80,190
Deere & Co.		6,050,000			231,836
FedEx Corp.		3,300,000			211,695
General Dynamics Corp.		6,745,800			388,491
General Electric Co.		78,445,000			1,270,809
Illinois Tool Works Inc.		6,400,000			224,320
Lockheed Martin Corp.		3,965,000			333,377
Mitsubishi Corp.1		1,065,000			14,918
Raytheon Co.		2,399,800			122,486
Siemens AG1		1,563,550			117,401
Southwest Airlines Co.		13,000,000			112,060
Textron Inc.2		12,430,000			172,404
Tyco International Ltd.		3,225,000			69,660
Union Pacific Corp.		3,655,200			174,719
United Parcel Service, Inc., Class B		5,800,000			319,928
United Technologies Corp.		11,265,000			603,804
					5,041,549

CONSUMER DISCRETIONARY — 7.01%
Best Buy Co., Inc.		6,472,300			181,936
Carnival Corp., units		9,450,000			229,824
Comcast Corp., Class A		5,000,000			84,400
Harley-Davidson, Inc.		4,575,000			77,638
Honda Motor Co., Ltd.1		3,465,000			74,981
Johnson Controls, Inc.		10,750,000			195,220
Limited Brands, Inc.2		20,309,759			203,910
Lowe’s Companies, Inc.		32,784,900			705,531
Mattel, Inc.		4,509,000			72,144
McDonald’s Corp.		2,250,000			139,927
Target Corp.		20,470,300			706,839
Time Warner Inc.		60,342,000			607,041
TJX Companies, Inc.		3,000,000			61,710
Toyota Motor Corp.1		11,725,000			382,948
					3,724,049

CONSUMER STAPLES — 12.28%
Altria Group, Inc.		29,463,800			443,725
Avon Products, Inc.		13,310,318			319,847
Coca-Cola Co.		5,365,000			242,874
ConAgra Foods, Inc.		5,521,100			91,098
General Mills, Inc.		1,960,000			119,070
H.J. Heinz Co.		2,750,000			103,400
Kellogg Co.		4,549,503			199,496
Kimberly-Clark Corp.		4,000,000			210,960
Kraft Foods Inc., Class A		9,644,168			258,946
Molson Coors Brewing Co., Class B		6,850,000			335,102
PepsiCo, Inc.		19,245,600			1,054,081
Philip Morris International Inc.		38,415,000			1,671,437
Procter & Gamble Co.		6,518,000			402,943
Reynolds American Inc.		2,666,666			107,493
Sara Lee Corp.		16,020,365			156,839
SYSCO Corp.		3,700,000			84,878
UST Inc.		2,000,000			138,760
Walgreen Co.		14,394,800			355,120
Wal-Mart Stores, Inc.		4,100,000			229,846
					6,525,915

HEALTH CARE — 10.93%
Abbott Laboratories		9,888,200			527,733
Aetna Inc.		5,000,000			142,500
Amgen Inc.3		1,840,792			106,306
AstraZeneca PLC (ADR)		2,534,500			103,991
AstraZeneca PLC (Sweden)1		3,709,500			146,792
AstraZeneca PLC (United Kingdom)1		1,435,000			58,809
Bristol-Myers Squibb Co.		18,800,000			437,100
Cardinal Health, Inc.		3,650,000			125,815
Eli Lilly and Co.		10,055,000			404,915
Johnson & Johnson		600,000			35,898
McKesson Corp.		2,500,000			96,825
Medtronic, Inc.		9,512,500			298,883
Merck & Co., Inc.		34,180,000			1,039,072
Novartis AG1		800,000			39,835
Novartis AG (ADR)		256,556			12,766
Pfizer Inc		24,945,000			441,776
Roche Holding AG1		6,180,000			945,403
Schering-Plough Corp.		18,986,300			323,337
UnitedHealth Group Inc.		11,605,200			308,698
WellPoint, Inc.3		5,000,000			210,650
					5,807,104

FINANCIALS — 3.75%
American International Group, Inc.		8,739,100			13,720
Banco Santander, SA1		18,920,000			183,053
Bank of America Corp.		12,000,000			168,960
Berkshire Hathaway Inc., Class A3		2,600			251,160
Capital One Financial Corp.		7,105,576			226,597
Citigroup Inc.		40,000,000			268,400
Fannie Mae		26,105,938			19,840
Hartford Financial Services Group, Inc.		1,003,440			16,476
HSBC Holdings PLC (ADR)		1,079,588			52,544
HSBC Holdings PLC (Hong Kong)1		10,620,000			101,952
HSBC Holdings PLC (United Kingdom)1		14,617,111			141,504
JPMorgan Chase & Co.		15,905,000			501,485
Lincoln National Corp.		1,003,400			18,904
Washington Mutual, Inc.4		1,142,858			25
Washington Mutual, Inc.1,4		24,571,428			—
XL Capital Ltd., Class A		6,700,000			24,790
					1,989,410

INFORMATION TECHNOLOGY — 16.58%
Analog Devices, Inc.		2,300,000			43,746
Applied Materials, Inc.		6,450,000			65,338
Automatic Data Processing, Inc.		10,858,043			427,155
Canon, Inc.1		770,000			24,118
Cisco Systems, Inc.3		33,060,400			538,885
Flextronics International Ltd.3		19,750,000			50,560
Google Inc., Class A3		1,677,480			516,077
Hewlett-Packard Co.		18,000,000			653,220
Intel Corp.		41,615,000			610,076
International Business Machines Corp.		5,585,000			470,034
KLA-Tencor Corp.		7,475,000			162,880
Linear Technology Corp.		7,600,000			168,112
Maxim Integrated Products, Inc.		13,195,000			150,687
Microsoft Corp.		76,753,100			1,492,080
Motorola, Inc.		14,320,800			63,441
Nokia Corp.1		15,500,000			240,892
Nokia Corp. (ADR)		5,652,400			88,177
Oracle Corp.3		65,795,100			1,166,547
QUALCOMM Inc.		2,785,000			99,787
Samsung Electronics Co., Ltd.1		684,000			247,890
SAP AG1		5,122,900			184,056
Taiwan Semiconductor Manufacturing Co. Ltd.1		296,290,470			406,322
Texas Instruments Inc.		24,065,000			373,489
Xilinx, Inc.		7,650,000			136,323
Yahoo! Inc.3		34,932,100			426,172
					8,806,064

TELECOMMUNICATION SERVICES — 6.62%
AT&T Inc.		53,212,200			1,516,548
Deutsche Telekom AG1		5,750,000			87,580
France Télécom SA1		15,745,000			441,500
Qwest Communications International Inc.		73,780,000			268,559
Sprint Nextel Corp., Series 13		63,422,000			116,062
Verizon Communications Inc.		31,999,659			1,084,788
					3,515,037

UTILITIES — 3.77%
Dominion Resources, Inc.		12,263,824			439,536
Exelon Corp.		12,735,600			708,227
FirstEnergy Corp.		2,188,500			106,317
FPL Group, Inc.		300,000			15,099
GDF Suez1		3,086,356			153,237
PPL Corp.		3,698,000			113,492
Public Service Enterprise Group Inc.		10,000,000			291,700
RWE AG1		1,920,000			173,030
					2,000,638

MISCELLANEOUS — 2.97%
Other common stocks in initial period of acquisition					1,578,690


Total common stocks (cost: $49,190,623,000)					44,788,224




Preferred stocks — 0.06%

FINANCIALS — 0.06%
Citigroup Inc., Series E, 8.40%5		41,000			27,123
XL Capital Ltd., Series E, 6.50%5		21,250			4,892
					32,015


MISCELLANEOUS — 0.00%
Other preferred stocks in initial period of acquisition					1,810


Total preferred stocks (cost: $104,530,000)					33,825



				Value
Warrants — 0.00%	Shares				(000	)

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


Total warrants (cost: $11,770,000)					—



	Shares or
Convertible securities — 0.54%	principal amount

CONSUMER DISCRETIONARY — 0.04%
Ford Motor Co. Capital Trust II 6.50% convertible preferred 2032		2,618,300			23,643


FINANCIALS — 0.29%
Citigroup Inc., Series D, 7.00% noncumulative convertible preferred1,4		5,250,000			154,295
Fannie Mae, Series 2004-1, 5.375% convertible preferred1		820			451
					154,746

TELECOMMUNICATION SERVICES — 0.08%
Qwest Communications International Inc. 3.50% convertible debenture 2025	$	50,000,000			42,313


MISCELLANEOUS — 0.13%
Other convertible securities in initial period of acquisition					68,009


Total convertible securities (cost: $912,108,000)					288,711



	Principal amount
Bonds & notes — 0.03%		(000	)

FINANCIALS — 0.01%
National City Corp. 5.80% 2017	$	2,700			2,298
National City Corp. 6.875% 2019		6,100			4,900
					7,198

TELECOMMUNICATION SERVICES — 0.02%
Sprint Capital Corp. 8.375% 2012		10,000			8,005


Total bonds & notes (cost: $15,461,000)					15,203




Short-term securities — 15.00%


3M Co. 1.70% due 1/21/20096		50,000			49,966
AT&T Inc. 0.95% due 2/25/20096		57,800			57,779
CAFCO, LLC 3.05% due 1/7/20096		35,000			34,980
Caterpillar Financial Services Corp. 0.35% due 3/2/2009		46,000			45,972
Chevron Corp. 1.00% due 1/21/2009		30,000			29,980
Chevron Funding Corp. 0.62% due 1/2/2009		25,000			24,999
Ciesco LLC 2.50% due 1/5/20096		11,900			11,895
Coca-Cola Co. 1.25%–2.25% due 1/20–2/2/20096		207,300			207,104
Eaton Corp. 1.50%–2.75% due 1/2–2/2/20096		39,100			39,066
Eli Lilly and Co. 1.40% due 2/12/20096		60,000			59,944
Emerson Electric Co. 1.10% due 2/25/20096		21,200			21,192
Enterprise Funding Co. LLC 1.45% due 1/9/20096		25,000			24,991
Fannie Mae 0.08%–2.55% due 1/12–7/14/2009		962,074			960,846
Federal Farm Credit Banks 0.70%–2.10% due 2/13–12/22/2009		130,400			130,172
Federal Home Loan Bank 0.10%–3.20% due 1/5–12/1/2009		1,990,542			1,988,312
Federal Home Loan Bank 0.925% due 12/22/20095		30,000			30,018
Freddie Mac 0.24%–2.60% due 1/12–7/28/2009		1,773,506			1,770,729
General Dynamics Corp. 2.30% due 1/16/20096		50,000			49,952
General Electric Capital Corp., FDIC insured, 0.45% due 2/23/2009		66,400			66,380
Hewlett-Packard Co. 0.30%–2.10% due 2/3–2/9/20096		82,000			81,925
Honeywell International Inc. 0.30%–1.00% due 2/24–3/19/20096		106,647			106,591
HSBC Finance Corp. 0.05% due 1/2/2009		3,300			3,300
Illinois Tool Works Inc. 1.10%–1.50% due 1/13–2/2/2009		111,350			111,261
International Bank for Reconstruction and Development 0.18%–2.35% due 1/23–4/14/2009		258,400			258,242
John Deere Capital Corp. 2.45% due 1/7/20096		43,800			43,786
Johnson & Johnson 0.75% due 2/27/20096		50,000			49,984
Jupiter Securitization Co., LLC 0.70% due 3/3/20096		76,700			76,521
Medtronic Inc. 0.38% due 2/10/20096		50,000			49,978
Merck & Co. Inc. 1.15% due 1/20–1/21/2009		55,000			54,963
Pfizer Inc 2.17%–2.28% due 1/5–2/26/20096		85,000			84,977
Private Export Funding Corp. 1.25%–2.20% due 1/26–2/3/20096		89,000			88,863
Procter & Gamble International Funding S.C.A. 0.15%–1.80% due 1/7–3/27/20096		217,500			217,354
Ranger Funding Co. LLC 0.40%–1.45% due 1/9–3/20/20096		65,100			65,057
U.S. Treasury Bills 0.68%–1.945% due 1/2–2/26/2009		773,000			772,976
United Parcel Service Inc. 1.05%–1.10% due 1/12–2/25/20096		150,000			149,938
Walgreen & Co. 0.25% due 1/30/20096		25,000			24,995
Walt Disney Co. 1.05%–1.70% due 1/16–1/26/2009		94,300			94,217
Yale University 2.20% due 2/10/2009		26,500			26,445


Total short-term securities (cost: $7,957,881,000)					7,965,650


Total investment securities (cost: $58,192,373,000)					53,091,613
Other assets less liabilities					24,113

Net assets				$	53,115,726

“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 $5,226,242,000, which represented 9.84% of the net assets of the fund.

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

Citigroup Inc., Series D, 7.00% noncumulative convertible preferred	1/15/2008	$	262,500	$	154,295		.29	%
Washington Mutual, Inc.	4/8/2008		10,000		25		.00
Washington Mutual, Inc.	4/8/2008		203,230		—		—
Washington Mutual, Inc., warrants, expire 2013	4/8/2008		11,770		—		—

Total restricted securities		$	487,500	$	154,320		.29	%

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 $1,596,838,000, which represented 3.01% of the net assets of the fund.

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-904-0209O-S15813

Summary investment portfolio, December 31, 2008

	Beginning shares or principal amount		Additions		Reductions		Ending shares or principal amount		Dividend or interest income (000)		Value of affiliates at 12/31/08 (000)
Limited Brands, Inc.		18,289,943		2,019,816		-		20,309,759	$	10,974	$	203,910
Textron Inc.		-		12,430,000		-		12,430,000		2,859		172,404
Countrywide Financial Corp. (5) (6)		12,650,000		17,350,000		30,000,000		-		3,975		-
Countrywide Financial Corp., Series A, 4.50% 2010 (6)	$	910,000	$	-	$	910,000	$	-		6		-
Countrywide Financial Corp., Series B, 5.80% 2012 (6)	$	23,680,000	$	-	$	23,680,000	$	-		128		-
									$	17,942	$	376,314

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

Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $57,702,566)	$	52,715,299
Affiliated issuers (cost: $489,807)		376,314	$	53,091,613
Cash denominated in currencies other than U.S. dollars (cost: $1)				1
Cash				295
Receivables for:
Sales of investments		126,940
Sales of fund's shares		93,781
Dividends and interest		144,727		365,448
				53,457,357
Liabilities:
Payables for:
Purchases of investments		166,523
Repurchases of fund's shares		141,274
Investment advisory services		9,700
Services provided by affiliates		19,085
Directors' and advisory board's deferred compensation		4,479
Other		570		341,631
Net assets at December 31, 2008			$	53,115,726

Net assets consist of:
Capital paid in on shares of capital stock			$	59,573,141
Undistributed net investment income				271,009
Accumulated net realized loss				(1,627,866	)
Net unrealized depreciation				(5,100,558	)
Net assets at December 31, 2008			$	53,115,726

	(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	$	43,244,000		2,063,247		20.96
Class B		250,000		2,191,278		104,996		20.87
Class C		250,000		1,974,031		94,797		20.82
Class F-1		250,000		1,008,555		48,178		20.93
Class F-2		350,000		83,136		3,967		20.96
Class 529-A		325,000		898,008		42,896		20.93
Class 529-B		75,000		168,887		8,086		20.89
Class 529-C		150,000		249,321		11,933		20.89
Class 529-E		75,000		38,370		1,836		20.89
Class 529-F-1		75,000		14,616		699		20.92
Class R-1		75,000		44,678		2,141		20.87
Class R-2		100,000		467,546		22,392		20.88
Class R-3		300,000		567,707		27,140		20.92
Class R-4		75,000		304,290		14,539		20.93
Class R-5		150,000		1,861,303		88,827		20.95
Total		5,000,000	$	53,115,726		2,535,674
(*) 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 $22.24 and $22.21, respectively.

See Notes to Financial Statements

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

Investment income:
Income:
Dividends (net of non-U.S.
taxes of $46,727; also includes
$17,808 from affiliates)	$	1,781,810
Interest (net of non-U.S.
taxes of $1; also includes
$134 from affiliates)		280,264		$	2,062,074

Fees and expenses*:
Investment advisory services		172,589
Distribution services		219,432
Transfer agent services		66,861
Administrative services		16,540
Reports to shareholders		5,389
Registration statement and prospectus		1,559
Postage, stationery and supplies		5,754
Directors' and advisory board's compensation		(629	)
Auditing and legal		258
Custodian		1,885
State and local taxes		761
Other		249
Total fees and expenses before waiver		490,648
Less investment advisory services waiver		17,259
Total fees and expenses after waiver					473,389
Net investment income					1,588,685

Netrealized loss andunrealized
depreciation on investments and currency:
Net realized loss on:
Investments (including $147,502 net loss from affiliates)		(1,619,156	)
Currency transactions		(5,853	)		(1,625,009	)
Net unrealized depreciation on:
Investments		(29,848,748	)
Currency translations		(135	)		(29,848,883	)
Net realized loss and
unrealized depreciation
on investments and currency					(31,473,892	)
Net decrease in net assets resulting
from operations				$	(29,885,207	)

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

See Notes to Financial Statements



Statements of changes in net assets		(dollars in thousands)

	Year ended December 31
	2008			2007
Operations:
Net investment income	$	1,588,685		$	1,802,655
Net realized (loss) gain on investments
and currency transactions		(1,625,009	)		5,106,803
Net unrealized depreciation on investments
and currency translations		(29,848,883	)		(1,688,969	)
Net (decrease) increase in net assets resulting from operations		(29,885,207	)		5,220,489

Dividends and distributions paid to shareholders:
Dividends from net investment income		(1,723,752	)		(1,645,396	)
Distributions from net realized gain on investments		-			(4,764,009	)
Total dividends and distributions paid to shareholders		(1,723,752	)		(6,409,405	)


Net capital share transactions		(4,477,943	)		1,337,443

Total (decrease) increase in net assets		(36,086,902	)		148,527

Net assets:
Beginning of year		89,202,628			89,054,101
End of year (including undistributed net investment
income: $271,009 and $412,451, respectively)	$	53,115,726		$	89,202,628


See Notes to Financial Statements

(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	)
Gross unrealized appreciation on investment securities		7,570,208
Gross unrealized depreciation on investment securities		(12,965,690	)
Net unrealized depreciation on investment securities		(5,395,482	)
Cost of investment securities		58,487,095

*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 future years through the expiration date. The fund will not make distributions from capital gains while a capital loss carryforward remains.

Industry sector diversification (percent of net assets)

Information technology	16.58	%
Consumer staples	12.28
Health care	10.93
Industrials	9.49
Energy	8.57
Other industries	26.53
Convertible securities	.54
Bonds & notes	.03
Short-term securities & other assets less liabilities	15.05

Common stocks - 84.32%	Shares		Value (000)		Percent of net assets

Energy - 8.57%
Baker Hughes Inc.		10,275,000	$	329,519	.62	%
Chevron Corp.		13,572,278		1,003,942	1.89
ConocoPhillips		8,911,672		461,625	.87
Hess Corp.		6,341,300		340,147	.64
Royal Dutch Shell PLC, Class A (ADR)		15,065,000		797,541
Royal Dutch Shell PLC, Class B (1)		833,265		21,211
Royal Dutch Shell PLC, Class B (ADR)		2,665,498		137,087	1.80
Schlumberger Ltd.		18,424,999		779,930	1.47
Other securities				679,073	1.28
				4,550,075	8.57

Materials - 2.35%
Other securities				1,249,693	2.35

Industrials - 9.49%
Burlington Northern Santa Fe Corp.		4,705,200		356,231	.67
General Dynamics Corp.		6,745,800		388,491	.73
General Electric Co.		78,445,000		1,270,809	2.39
Lockheed Martin Corp.		3,965,000		333,377	.63
United Technologies Corp.		11,265,000		603,804	1.14
Other securities				2,088,837	3.93
				5,041,549	9.49

Consumer discretionary - 7.01%
Lowe's Companies, Inc.		32,784,900		705,531	1.33
Target Corp.		20,470,300		706,839	1.33
Time Warner Inc.		60,342,000		607,041	1.14
Toyota Motor Corp. (1)		11,725,000		382,948	.72
Other securities				1,321,690	2.49
				3,724,049	7.01

Consumer staples - 12.28%
Altria Group, Inc.		29,463,800		443,725	.84
Molson Coors Brewing Co., Class B		6,850,000		335,102	.63
PepsiCo, Inc.		19,245,600		1,054,081	1.98
Philip Morris International Inc.		38,415,000		1,671,437	3.15
Procter & Gamble Co.		6,518,000		402,943	.76
Walgreen Co.		14,394,800		355,120	.67
Other securities				2,263,507	4.25
				6,525,915	12.28

Health care - 10.93%
Abbott Laboratories		9,888,200		527,733	.99
Bristol-Myers Squibb Co.		18,800,000		437,100	.82
Eli Lilly and Co.		10,055,000		404,915	.76
Merck & Co., Inc.		34,180,000		1,039,072	1.96
Pfizer Inc		24,945,000		441,776	.83
Roche Holding AG (1)		6,180,000		945,403	1.78
Schering-Plough Corp.		18,986,300		323,337	.61
Other securities				1,687,768	3.18
				5,807,104	10.93

Financials - 3.75%
Fannie Mae		26,105,938		19,840	.04
JPMorgan Chase & Co.		15,905,000		501,485	.95
Other securities				1,468,085	2.76
				1,989,410	3.75

Information technology - 16.58%
Automatic Data Processing, Inc.		10,858,043		427,155	.80
Cisco Systems, Inc. (2)		33,060,400		538,885	1.02
Google Inc., Class A (2)		1,677,480		516,077	.97
Hewlett-Packard Co.		18,000,000		653,220	1.23
Intel Corp.		41,615,000		610,076	1.15
International Business Machines Corp.		5,585,000		470,034	.88
Microsoft Corp.		76,753,100		1,492,080	2.81
Nokia Corp. (1)		15,500,000		240,892
Nokia Corp. (ADR)		5,652,400		88,177	.62
Oracle Corp. (2)		65,795,100		1,166,547	2.20
Taiwan Semiconductor Manufacturing Co. Ltd. (1)		296,290,470		406,322	.77
Texas Instruments Inc.		24,065,000		373,489	.70
Yahoo! Inc. (2)		34,932,100		426,172	.80
Other securities				1,396,938	2.63
				8,806,064	16.58

Telecommunication services - 6.62%
AT&T Inc.		53,212,200		1,516,548	2.86
France Télécom SA (1)		15,745,000		441,500	.83
Verizon Communications Inc.		31,999,659		1,084,788	2.04
Other securities				472,201	.89
				3,515,037	6.62

Utilities - 3.77%
Dominion Resources, Inc.		12,263,824		439,536	.83
Exelon Corp.		12,735,600		708,227	1.33
Other securities				852,875	1.61
				2,000,638	3.77

Miscellaneous - 2.97%
Other common stocks in initial period of acquisition				1,578,690	2.97


Total common stocks (cost: $49,190,623,000)				44,788,224	84.32



Preferred stocks - 0.06%

Financials - 0.06%
Other securities			$	32,015	.06	%

Miscellaneous - 0.00%
Other preferred stocks in initial period of acquisition				1,810	.00


Total preferred stocks (cost: $104,530,000)				33,825	.06



Warrants - 0.00%

Financials - 0.00%
Other securities			$	-	.00	%


Total warrants (cost: $11,770,000)				-	.00



Convertible securities - 0.54%	Shares

Other - 0.41%
Fannie Mae, Series 2004-1, 5.375% convertible preferred (1)		820	$	451	.00	%
Other securities				220,251	.41
				220,702	.41

Miscellaneous - 0.13%
Other convertible securities in initial period of acquisition				68,009	.13


Total convertible securities (cost: $912,108,000)				288,711	.54



Bonds & notes - 0.03%

Other - 0.03%
Other securities			$	15,203	.03	%


Total bonds & notes (cost: $15,461,000)				15,203	.03




Short-term securities - 15.00%	Principal amount (000)		Value (000)		Percent of net assets


AT&T Inc. 0.95% due 2/25/2009 (3)	$	57,800	$	57,779	.11	%
Chevron Corp. 1.00% due 1/21/2009		30,000		29,980
Chevron Funding Corp. 0.62% due 1/2/2009		25,000		24,999	.10
Fannie Mae 0.08%-2.55% due 1/12-7/14/2009		962,074		960,846	1.81
Federal Home Loan Bank 0.10%-3.20% due 1/5-12/22/2009 (4)		2,020,542		2,018,330	3.80
Freddie Mac 0.24%-2.60% due 1/12-7/28/2009		1,773,506		1,770,729	3.33
General Electric Capital Corp., FDIC insured, 0.45% due 2/23/2009		66,400		66,380	.12
Hewlett-Packard Co. 0.30%-2.10% due 2/3-2/9/2009 (3)		82,000		81,925	.15
Jupiter Securitization Co., LLC 0.70% due 3/3/2009 (3)		76,700		76,521	.15
Merck & Co. Inc. 1.15% due 1/20-1/21/2009		55,000		54,963	.10
Procter & Gamble International Funding S.C.A. 0.15%-1.80% due 1/7-3/27/2009 (3)		217,500		217,354	.41
U.S. Treasury Bills 0.68%-1.945% due 1/2-2/26/2009		773,000		772,976	1.46
Other securities				1,832,868	3.46


Total short-term securities (cost: $7,957,881,000)				7,965,650	15.00


Total investment securities (cost: $58,192,373,000)				53,091,613	99.95
Other assets less liabilities				24,113	.05

Net assets			$	53,115,726	100.00	%

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The value of the fund's holdings in affiliated companies is included in "Other securities" under their respective industry sectors in the preceding summary investment portfolio. Further details on these holdings and related transactions during the year ended December 31, 2008, appear below.

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

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

Class A	$	1,457,129	$	-	$	1,457,129	$	1,422,554	$	3,922,272	$	5,344,826
Class B		53,327		-		53,327		47,870		221,887		269,757
Class C		45,028		-		45,028		37,353		183,234		220,587
Class F-1		33,642		-		33,642		30,879		87,716		118,595
Class F-2*		803		-		803		-		-		-
Class 529-A		27,448		-		27,448		22,603		69,337		91,940
Class 529-B		3,525		-		3,525		2,582		13,936		16,518
Class 529-C		5,170		-		5,170		3,644		19,888		23,532
Class 529-E		1,033		-		1,033		805		2,950		3,755
Class 529-F-1		469		-		469		336		984		1,320
Class R-1		992		-		992		617		3,281		3,898
Class R-2		9,472		-		9,472		7,147		36,974		44,121
Class R-3		17,275		-		17,275		15,301		54,847		70,148
Class R-4		9,247		-		9,247		6,957		21,999		28,956
Class R-5		59,192		-		59,192		46,748		124,704		171,452
Total	$	1,723,752	$	-	$	1,723,752	$	1,645,396	$	4,764,009	$	6,409,405


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

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

	Investment securities
Level 1 – Quoted prices	$	39,808,434
Level 2 – Other significant observable inputs		13,282,728	(*)
Level 3 – Significant unobservable inputs		451
Total	$	53,091,613

Beginning value at 1/1/2008	$	-
Net purchases		215,000
Net unrealized depreciation (†)		(215,000	)
Net transfers into Level 3		451
Ending value at 12/31/2008	$	451

Share class	Sales(*)				Reinvestments of dividends and distributions				Repurchases(*)						Net (decrease) increase
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
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-2†		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	)

Year ended December 31, 2007
Class A	$	4,871,575		139,663	$	5,016,468		152,359	$	(9,651,061	)		(275,431	)	$	236,982			16,591
Class B		219,240		6,317		260,146		7,968		(511,605	)		(14,672	)		(32,219	)		(387	)
Class C		411,276		11,870		210,801		6,474		(512,774	)		(14,763	)		109,303			3,581
Class F-1		415,814		11,910		107,417		3,268		(536,777	)		(15,273	)		(13,546	)		(95	)
Class 529-A		224,065		6,441		91,930		2,799		(97,623	)		(2,792	)		218,372			6,448
Class 529-B		27,042		778		16,516		505		(16,070	)		(461	)		27,488			822
Class 529-C		70,845		2,038		23,529		720		(37,718	)		(1,083	)		56,656			1,675
Class 529-E		9,886		285		3,755		114		(4,771	)		(137	)		8,870			262
Class 529-F-1		7,055		203		1,320		41		(1,830	)		(52	)		6,545			192
Class R-1		22,228		640		3,895		120		(12,829	)		(370	)		13,294			390
Class R-2		214,688		6,182		44,084		1,350		(178,235	)		(5,113	)		80,537			2,419
Class R-3		325,007		9,352		70,083		2,138		(254,134	)		(7,302	)		140,956			4,188
Class R-4		184,808		5,296		28,946		882		(107,806	)		(3,078	)		105,948			3,100
Class R-5		544,356		15,474		170,684		5,183		(336,783	)		(9,724	)		378,257			10,933
Total net increase
(decrease)	$	7,547,885		216,449	$	6,049,574		183,921	$	(12,260,016	)		(350,251	)	$	1,337,443			50,119

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

		(Loss) income from investment operations(2)				Dividends and distributions
	Net asset value, beginning of period	Net investment income		Net (losses) gains on securities (both realized and unrealized)	Total from investment operations	Dividends (from net investment income)	Distributions (from capital gains)	Total dividends and distributions	Net asset value, end of period	Total return (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:
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:
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:
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:
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:
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:
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:
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:
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:
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:
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:
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:
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:
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:
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:
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

(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 the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.


See Notes to Financial Statements

Qualified dividend income	$	1,582,440,000
Corporate dividends received deduction	$	1,527,589,000
U.S. government income that may be exempt from state taxation	$	80,500,000