ica497.htm

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THE INVESTMENT COMPANY OF AMERICA

Part B
Statement of Additional Information

March 1, 2010

(as supplemented May 27, 2010)

This document is not a prospectus but should be read in conjunction with the
current prospectus or retirement plan prospectus of The Investment Company of
America (the "fund" or "ICA") dated March 1, 2010. 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.

Class A AIVSX Class 529-A CICAX Class R-1 RICAX
Class B AICBX Class 529-B CICBX Class R-2 RICBX
Class C AICCX Class 529-C CICCX Class R-3 RICCX
Class F-1 AICFX Class 529-E CICEX Class R-4 RICEX
Class F-2 ICAFX Class 529-F-1 CICFX Class R-5 RICFX
Class R-6 RICGX

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 . . . . . . . . . . . . . . . . 36
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 39
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 44
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 49
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 57
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Shareholder account services and privileges . . . . . . . . . . . . 63
General information . . . . . . . . . . . . . . . . . . . . . . . . 66
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
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. Investment grade bonds in the ratings
categories A or Baa (Moody's) and A or BBB (S&P) may be more susceptible to
changes in market or economic conditions than bonds rated in the highest rating
categories.

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.

The Investment Company of America -- Page 3
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PAYMENT EXPECTATIONS -- Debt securities may contain redemption or call
provisions. If an issuer exercises these provisions in a lower interest
rate market, the fund would have to replace the security with a lower
yielding security, resulting in decreased income to investors. If the
issuer of a debt security defaults on its obligations to pay interest or
principal or is the subject of bankruptcy proceedings, the fund may incur
losses or expenses in seeking recovery of amounts owed to it.

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

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

Credit ratings for debt securities provided by rating agencies 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 Investment Company of America -- Page 4
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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.

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

The Investment Company of America -- Page 5
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markets of developing countries have been more volatile than the markets of
developed countries. The fund may invest in securities of issuers in developing
countries only to a limited extent.

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

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's securities are listed, where the company is
legally organized, maintains principal corporate offices and/or conducts its
principal operations.

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 trustees, taking into account
factors such as the frequency and volume of trading, the commitment of dealers
to make markets and the availability of qualified investors, all of which can
change from time to time. The fund may incur certain additional costs in
disposing of illiquid securities.

The Investment Company of America -- Page 6
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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.

* * * * * *

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. It may
also result in the realization of net capital gains, which are taxable when
distributed to shareholders, unless the shareholder is exempt from taxation.

The fund's portfolio turnover rates for the fiscal years ended December 31, 2009
and 2008 were 28% and 31%, 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. In managing the
fund, the fund's investment adviser may apply more restrictive policies than
those listed below.

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

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

a. Borrow money;

b. Issue senior securities;

c. Underwrite the securities of other issuers;

d. Purchase or sell real estate or commodities;

e. Make loans; or

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

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

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

The fund may not acquire securities of open-end investment companies or unit
investment trusts registered under the 1940 Act in reliance on Sections
12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.

The Investment Company of America -- Page 8
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ADDITIONAL INFORMATION ABOUT FUNDAMENTAL POLICIES -- The information below is
not part of the fund's fundamental policies. This information is intended to
provide a summary of what is currently required or permitted by the 1940 Act and
the rules and regulations thereunder, or by the interpretive guidance thereof by
the SEC or SEC staff, for particular fundamental policies of the fund.

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

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

For purposes of fundamental policy 1f, the fund may not invest 25% or more of
its total assets in the securities of issuers in the same industry, unless the
fund has adopted a policy allowing for such investments.

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

BOARD OF TRUSTEES AND OFFICERS

"INDEPENDENT" TRUSTEES/1/

NAME, AGE AND NUMBER OF
POSITION WITH FUND PORTFOLIOS/3/
(YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
AS A TRUSTEE/2/) DURING PAST FIVE YEARS BY TRUSTEE BY TRUSTEE
- -----------------------------------------------------------------------------------------------------------
Louise H. Bryson, 66 Chair of the Board of 6 None
Trustee (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, 63 Founder and President, MAD 9 None
Chairman of the Board Ink (communications company)
(Independent and
Non-Executive) (2000)
- -----------------------------------------------------------------------------------------------------------
James G. Ellis, 63 Dean and Professor of 41 Quiksilver, Inc.
Trustee (2008) Marketing, Marshall School of
Business, University of
Southern California
- -----------------------------------------------------------------------------------------------------------
Martin Fenton, 74 Chairman of the Board, Senior 41 Capital Private Client
Trustee (2000) Resource Group LLC Services Funds
(development and management
of senior living communities)
- -----------------------------------------------------------------------------------------------------------
Leonard R. Fuller, 63 President and CEO, Fuller 41 None
Trustee (2002) Consulting (financial
management consulting firm)
- -----------------------------------------------------------------------------------------------------------
William D. Jones, 54 Real estate developer/ owner, 6 Sempra Energy;
Trustee (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 TRUSTEE/2/) DURING PAST FIVE YEARS BY TRUSTEE BY TRUSTEE
- -----------------------------------------------------------------------------------------------------------
L. Daniel Jorndt, 68 Retired; former Chairman of 3 None
Trustee (2006) the Board and CEO, Walgreen
Co. (drug store chain)
- -----------------------------------------------------------------------------------------------------------
William H. Kling,/5/,/6/ President and CEO, American 9 None
68 Public Media Group
Trustee (2010)
- -----------------------------------------------------------------------------------------------------------
John G. McDonald, 73 Stanford Investors Professor, 12 iStar Financial, Inc.;
Trustee (1976) Graduate School of Business, Plum Creek Timber Co.;
Stanford University QuinStreet, Inc.;
Scholastic Corporation
- -----------------------------------------------------------------------------------------------------------
Bailey Morris-Eck, 65 Director and Programming 3 None
Trustee (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 Capital Private Client
Trustee (1996) Technology Corporation Services Funds;
(engineering, consulting and Sempra Energy;
professional technical SouthWest Water Company
services)
- -----------------------------------------------------------------------------------------------------------
Olin C. Robison, Ph.D., 74 Fellow, The Oxford Centre for 3 American Shared Hospital
Trustee (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., President, University of 3 Intermec, Inc.
69 Southern California
Trustee (2010)
- -----------------------------------------------------------------------------------------------------------

The Investment Company of America -- Page 11
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"INTERESTED" TRUSTEES/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 TRUSTEE/OFFICER/2/) OF THE FUND BY TRUSTEE BY TRUSTEE
- -------------------------------------------------------------------------------------------------------------
James B. Lovelace, 54 Senior Vice President - Capital 12 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 (1994) Research Global Investors,
Capital Research and Management
Company; Director, The Capital
Group Companies, Inc.*
- -------------------------------------------------------------------------------------------------------------

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., Vice Chairman of the Board, Capital Research and
61 Management Company; Senior Vice President - Fixed
Executive Vice Income, Capital Research and Management Company
President (2007)
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
Christopher D. Senior Vice President - Capital Research Global
Buchbinder, 38 Investors, Capital Research Company*; Director, Capital
Vice President Research Company*
(2010)
- -------------------------------------------------------------------------------
Anne M. Llewellyn, Senior Vice President - Fund Business Management Group,
62 Capital Research and Management Company
Vice President
(1984)
- -------------------------------------------------------------------------------
William L. Robbins, Senior Vice President - Capital Research Global
41 Investors, Capital Research Company*; Director and
Vice President Co-President, Capital Research Company*
(2010)
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------

The Investment Company of America -- Page 12
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* Company affiliated with Capital Research and Management Company.

1 The term "independent" trustee refers to a trustee who is not an "interested
person" of the fund within the meaning of the 1940 Act.
2 Trustees and officers of the fund 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 10 funds and is available through tax-deferred retirement
plans and IRAs; and Endowments, which is available to certain nonprofit
organizations.
4 This includes all directorships (other than those in the American Funds or
other funds managed by Capital Research and Management Company) that are held
by each trustee 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 Irwin Financial Corporation 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. Mr. Kling is a
former director of Irwin Financial Corporation.
7 The investment adviser received architectural and space management services
from a company which was a subsidiary of AECOM, Inc. from 1994 to 2008. The
total fees relating to this engagement for 2008 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
Raymond F. Sullivan, Jr., 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 TRUSTEES 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
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FUND SHARES OWNED BY TRUSTEE AS OF DECEMBER 31, 2009:

AGGREGATE
DOLLAR
RANGE/1/ OF
INDEPENDENT
AGGREGATE TRUSTEES
DOLLAR RANGE/1/ DOLLAR DEFERRED
OF SHARES RANGE/1 /OF COMPENSATION/2/
OWNED IN INDEPENDENT ALLOCATED TO
ALL FUNDS TRUSTEES 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 TRUSTEE TO FUND BY TRUSTEE
- ------------------------------------------------------------------------------------------
"INDEPENDENT" TRUSTEES
- ------------------------------------------------------------------------------------------
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 $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 $10,001 - $50,001 - Over $100,000 Over $100,000
$50,000 $100,000
- ------------------------------------------------------------------------------------------
William D. None Over $100,000 N/A Over $100,000
Jones/3/
- ------------------------------------------------------------------------------------------
L. Daniel Jorndt Over $100,000 Over $100,000 N/A N/A
- ------------------------------------------------------------------------------------------
William H. $50,001 - Over $100,000 N/A N/A
Kling/3/ $100,000
- ------------------------------------------------------------------------------------------
John G. McDonald $50,001 - Over $100,000 N/A N/A
$100,000
- ------------------------------------------------------------------------------------------
Bailey Morris-Eck $50,001 - Over $100,000 N/A Over $100,000
$100,000
- ------------------------------------------------------------------------------------------
Richard G. Newman Over $100,000 Over $100,000 N/A N/A
- ------------------------------------------------------------------------------------------
Olin C. Robison Over $100,000 Over $100,000 Over $100,000 Over $100,000
- ------------------------------------------------------------------------------------------
Steven B. None Over $100,000 N/A N/A
Sample/3/
- ------------------------------------------------------------------------------------------

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

AGGREGATE
DOLLAR RANGE/1/
OF SHARES
OWNED IN
ALL FUNDS
IN THE
DOLLAR RANGE/1/ AMERICAN FUNDS
OF FUND FAMILY OVERSEEN
NAME SHARES OWNED BY TRUSTEE
- -----------------------------------------------------------------------------
"INTERESTED" TRUSTEES
- -----------------------------------------------------------------------------
James B. Lovelace Over $100,000 Over $100,000
- -----------------------------------------------------------------------------
Donald D. O'Neal Over $100,000 Over $100,000
- -----------------------------------------------------------------------------

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; and Over $100,000. The amounts listed
for "interested" trustees include shares owned through The Capital Group
Companies, Inc. retirement plan and 401(k) plan.
2 Eligible trustees 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 trustee.
3 Messrs. Jones, Kling and Sample were newly elected to the board effective
January 1, 2010.

TRUSTEE COMPENSATION -- No compensation is paid by the fund to any officer or
trustee 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 trustee an annual
fee, which ranges from $13,125 to $25,000, based primarily on the total number
of board clusters on which that independent trustee serves.

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

Independent trustees 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 trustee each pay an equal portion of these attendance fees.

No pension or retirement benefits are accrued as part of fund expenses.
Independent trustees 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 trustees.

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

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

TOTAL COMPENSATION (INCLUDING
AGGREGATE COMPENSATION VOLUNTARILY DEFERRED COMPENSATION/1/)
(INCLUDING VOLUNTARILY FROM ALL FUNDS MANAGED BY
DEFERRED COMPENSATION/1/) CAPITAL RESEARCH AND MANAGEMENT
NAME FROM THE FUND COMPANY OR ITS AFFILIATES/2/
- ------------------------------------------------------------------------------------------
Louise H. Bryson/3/ $104,334 $206,500
- ------------------------------------------------------------------------------------------
Mary Anne Dolan 98,500 317,500
- ------------------------------------------------------------------------------------------
James G. Ellis 97,048 222,278
- ------------------------------------------------------------------------------------------
Martin Fenton/3/ 106,605 422,629
- ------------------------------------------------------------------------------------------
Leonard R. Fuller/3/ 108,547 354,152
- ------------------------------------------------------------------------------------------
William D. Jones/4/ None 216,000
- ------------------------------------------------------------------------------------------
L. Daniel Jorndt/3/ 115,500 115,500
- ------------------------------------------------------------------------------------------
William H. Kling/4/ 10,000/5/ 333,896
- ------------------------------------------------------------------------------------------
John G. McDonald/3/ 101,834 400,250
- ------------------------------------------------------------------------------------------
Bailey Morris-Eck 100,334 198,500
- ------------------------------------------------------------------------------------------
Richard G. Newman 133,355 278,169
- ------------------------------------------------------------------------------------------
Olin C. Robison/3/ 108,334 206,500
- ------------------------------------------------------------------------------------------
Steven B. Sample/4/ None 115,500
- ------------------------------------------------------------------------------------------

1 Amounts may be deferred by eligible trustees 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 trustees. Compensation shown in this table for the fiscal
year ended December 31, 2009 does not include earnings on amounts deferred in
previous fiscal years. See footnote 3 to this table for more information.
2 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R) Inc.,
which is composed of 10 funds and is available through tax-deferred retirement
plans and IRAs; and Endowments, which is available to certain nonprofit
organizations.
3 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) through the 2009
fiscal year for participating trustees is as follows: Louise H. Bryson
($910,401), Martin Fenton ($411,888), Leonard R. Fuller ($44,642), L. Daniel
Jorndt ($379,915), John G. McDonald ($1,988,098) and Olin C. Robison
($946,330). Amounts deferred and accumulated earnings thereon are not funded
and are general unsecured liabilities of the fund until paid to the trustees.
4 Messrs. Jones, Kling and Sample were newly elected to the board effective
January 1, 2010.
5 Mr. Kling served on the fund's advisory board through December 31, 2009.

As of May 1, 2010, the officers and trustees 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 TRUSTEES -- The fund, an open-end,
diversified management investment company, was organized as a Delaware
corporation on August 28, 1933 and was reorganized as a Delaware statutory trust
on March 1, 2010. All fund operations are supervised by the fund's board of
trustees which meets periodically and performs duties required by applicable
state and federal laws.


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


Delaware law charges trustees with the duty of managing the business affairs of
the trust. Trustees are considered to be fiduciaries of the trust and owe duties
of care and loyalty to the trust and its shareholders.


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 trustees and set forth in the fund's rule 18f-3 Plan. Each class'
shareholders have exclusive voting rights with respect to the respective class'
rule 12b-1 plans adopted in connection with the distribution of shares and on
other matters in which the interests of one class are different from interests
in another class. Shares of all classes of the fund vote together on matters
that affect all classes in substantially the same manner. Each class votes as a
class on matters that affect that class alone. Note that 529 college savings
plan account owners invested in Class 529 shares are not shareholders of the
fund and, accordingly, do not have the rights of a shareholder, such as the
right to vote proxies relating to fund shares. As the legal owner of the fund's
Class 529 shares, the Virginia College Savings Plan/SM/ will vote any proxies
relating to the fund's Class 529 shares. In addition, the trustees have the
authority to establish new series and classes of shares, and to split or combine
outstanding shares into a greater or lesser number, without shareholder
approval.


The fund does not hold annual meetings of shareholders. However, significant
matters that require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned.


The fund's declaration of trust and by-laws as well as separate indemnification
agreements that the fund has entered into with independent trustees provide in
effect that, subject to certain conditions, the fund will indemnify its officers
and trustees against liabilities or expenses actually and reasonably incurred by
them relating to their service to the fund. However, trustees 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.


REMOVAL OF TRUSTEES BY SHAREHOLDERS -- At any meeting of shareholders, duly
called and at which a quorum is present, shareholders may, by the affirmative
vote of the holders of two-thirds of the votes entitled to be cast, remove any
trustee from office and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of removed trustees. In addition,
the trustees of the fund will promptly call a meeting of shareholders for the
purpose of voting upon the removal of any trustees when requested in writing to
do so by the record holders of at least 10% of the outstanding shares.


COMMITTEES OF THE BOARD OF TRUSTEES -- 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


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


and the internal controls of the fund's principal service providers. The
committee acts as a liaison between the fund's independent registered public
accounting firm and the full board of trustees. Five audit committee meetings
were held during the 2009 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 trustees on these matters.
One contracts committee meeting was held during the 2009 fiscal year.


The fund has a nominating and governance committee comprised of Louise H. Bryson,
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 trustees. The committee
also evaluates, selects and nominates independent trustee and advisory board
member candidates to the full board of trustees. While the committee normally is
able to identify from its own and other resources an ample number of qualified
candidates, it will consider shareholder suggestions of persons to be considered
as nominees to fill future vacancies on the board. Such suggestions must be sent
in writing to the nominating and governance committee of the fund, addressed to
the fund's secretary, and must be accompanied by complete biographical and
occupational data on the prospective nominee, along with a written consent of
the prospective nominee for consideration of his or her name by the committee.
Two nominating and governance committee meetings were held during the 2009
fiscal year.



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


ADVISORY BOARD MEMBERS

The board of trustees has established an advisory board whose members are, in
the judgment of the trustees, highly knowledgeable about world political and
economic matters. In addition to holding meetings with the board of trustees,
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      Attorney (self-employed); former            1            None
 (1995)                         Partner, Faegre & Benson (law
                                firm)
- ------------------------------------------------------------------------------------------------------------------
 Daniel R. Fung, 56             Chairman of the Board, Des Voeux            1            Guangdong Investment
 (2008)                         Chambers (law firm)                                      Limited
- ------------------------------------------------------------------------------------------------------------------
 Ellen H. Goldberg, Ph.D.,      Consultant; Interim President,              1            None
 65                             Santa Fe Institute (former
 (1998)                         President); Professor Emeritus,
                                University of New Mexico
- ------------------------------------------------------------------------------------------------------------------
 Claudio X. Gonzalez            Chairman of the Board,                      1            Grupo Alfa, S.A. de C.V.;
 Laporte, 76                    Kimberly-Clark de Mexico, S.A.                           Grupo Carso, S.A. de
 (2010)                         (household products)                                     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
- ------------------------------------------------------------------------------------------------------------------
 John C. Mazziotta, M.D.,       Chair, Department of Neurology,             1            None
 Ph.D., 61                      University of California at Los
 (2007)                         Angeles; Associate Director,
                                Semel Institute, UCLA; Director,
                                Brain Mapping Center, UCLA
- ------------------------------------------------------------------------------------------------------------------




                  The Investment Company of America -- Page 19
<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
- ------------------------------------------------------------------------------------------------------------------
 Robert J. O'Neill, Ph.D.,      Member of the Board of                      4            None
 73                             Directors, The Lowy Institute
 (1988)                         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 10 funds and is available through tax-deferred retirement
   plans and IRAs; and Endowments, which is available to certain nonprofit
   organizations. Includes advisory board and, where applicable, director/trustee
   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 20
<PAGE>

ADVISORY BOARD MEMBER COMPENSATION EARNED DURING THE FISCAL YEAR ENDED DECEMBER 31, 2009

                                                        TOTAL COMPENSATION (INCLUDING
                         AGGREGATE COMPENSATION     VOLUNTARILY DEFERRED COMPENSATION/1/)
                         (INCLUDING VOLUNTARILY           FROM ALL FUNDS MANAGED BY
                        DEFERRED COMPENSATION/1/)      CAPITAL RESEARCH AND MANAGEMENT
         NAME                 FROM THE FUND             COMPANY OR ITS AFFILIATES/2/
- ------------------------------------------------------------------------------------------
 Thomas M. Crosby,              $ 10,000                          $ 10,000
 Jr.
- ------------------------------------------------------------------------------------------
 Daniel R. Fung                   10,000                            10,000
- ------------------------------------------------------------------------------------------
 Ellen H. Goldberg                10,000                            10,000
- ------------------------------------------------------------------------------------------
 Claudio X. Gonzalez             106,500                           106,500
 Laporte/3/
- ------------------------------------------------------------------------------------------
 John C. Mazziotta                10,000                            10,000
- ------------------------------------------------------------------------------------------
 Robert J. O'Neill                10,000                           133,500
- ------------------------------------------------------------------------------------------


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, 2009 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 10 funds and is available through tax-deferred retirement
   plans and IRAs; and Endowments, which is available to certain nonprofit
   organizations.
3  Mr. Gonzalez Laporte was elected to the advisory board effective January 1,
   2010. Previous to this election he served as a trustee 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 21
<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 22
<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 May 1, 2010. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.



            NAME AND ADDRESS                OWNERSHIP   OWNERSHIP PERCENTAGE
- -------------------------------------------------------------------------------
 Edward D. Jones & Co.                      Record      Class A        20.82%
 Omnibus Account                                        Class B        12.96
 Maryland Heights, MO                                   Class F-1      16.61
- -------------------------------------------------------------------------------
 First Clearing, LLC                        Record      Class A         7.87
 Custody Account                                        Class B         8.08
 St. Louis, MO                                          Class C        11.69
                                                        Class F-1      13.32
- -------------------------------------------------------------------------------
 Pershing, LLC                              Record      Class B         6.86
 Jersey City, NJ                                        Class C         5.74
                                                        Class F-1      11.36
                                                        Class F-2       6.69
- -------------------------------------------------------------------------------
 Merrill Lynch                              Record      Class C        13.43
 Omnibus Account                                        Class F-2      17.64
 Jacksonville, FL
- -------------------------------------------------------------------------------
 Citigroup Global Markets, Inc.             Record      Class C        11.75
 Omnibus Account                                        Class F-1       5.43
 New York, NY
- -------------------------------------------------------------------------------
 Charles Schwab & Co., Inc.                 Record      Class F-1       5.36
 Custody Account                                        Class F-2       6.42
 San Francisco, CA
- -------------------------------------------------------------------------------
 NFS, LLC FEBO                              Record      Class F-2       6.69
 US Bank National Association               Beneficial
 Milwaukee, WI
- -------------------------------------------------------------------------------
 Capital Guardian Trust Company             Record      Class F-2       5.21
 Capital Group Private Client Services      Beneficial
 Account
 Los Angeles, CA
- -------------------------------------------------------------------------------
 Hartford Life Insurance Co. Separate       Record      Class R-1      43.43
 Account                                    Beneficial  Class R-3      12.73
 401K Plan
 Hartford, CT
- -------------------------------------------------------------------------------
 Principal Financial Group                  Record      Class R-1       5.53
 Omnibus Account
 Des Moines, IA
- -------------------------------------------------------------------------------




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

            NAME AND ADDRESS                OWNERSHIP   OWNERSHIP PERCENTAGE
- -------------------------------------------------------------------------------
 Lincoln Life Insurance Company             Record      Class R-4      24.82
 Omnibus Account
 Fort Wayne, IN
- -------------------------------------------------------------------------------
 John Hancock Life Insurance Co. USA        Record      Class R-5      22.09
 Omnibus Account
 Boston, MA
- -------------------------------------------------------------------------------
 Mac & Co.                                  Record      Class R-5       9.79
 Retirement Plan                            Beneficial
 Pittsburgh, PA
- -------------------------------------------------------------------------------
 Oak Ridge                                  Record      Class R-5       7.68
 401K Plan                                  Beneficial
 Phoenix, AZ
- -------------------------------------------------------------------------------
 NFS, LLC FEBO                              Record      Class R-5       7.66
 401K Plans                                 Beneficial
 Covington, KY
- -------------------------------------------------------------------------------
 Edward D. Jones & Co.                      Record      Class R-5       7.10
 Retirement Plan                            Beneficial
 Norwood, MA
- -------------------------------------------------------------------------------
 Hanford Operations & Engineering           Record      Class R-5       6.67
 Retirement Plan                            Beneficial
 Valley Forge, PA
- -------------------------------------------------------------------------------
 Lockheed Martin Corporation                Record      Class R-6      56.54
 Retirement Plan                            Beneficial
 Quincy, MA
- -------------------------------------------------------------------------------
 Mercer Trust Company                       Record      Class R-6      10.63
 Abbott Laboratories
 Retirement Plan                            Beneficial
 Norwood, MA
- -------------------------------------------------------------------------------


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 24
<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 and Lipper Growth & Income Funds
Index.


                  The Investment Company of America -- Page 25
<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, 2009:

                                             NUMBER             NUMBER
                                            OF OTHER           OF OTHER          NUMBER
                                           REGISTERED           POOLED          OF OTHER
                                           INVESTMENT         INVESTMENT        ACCOUNTS
                                        COMPANIES (RICS)   VEHICLES (PIVS)      FOR WHICH
                                            FOR WHICH         FOR WHICH         PORTFOLIO
                                            PORTFOLIO         PORTFOLIO         COUNSELOR
                        DOLLAR RANGE        COUNSELOR         COUNSELOR       IS A MANAGER
                          OF FUND         IS A MANAGER       IS A MANAGER      (ASSETS OF
     PORTFOLIO             SHARES        (ASSETS OF RICS   (ASSETS OF PIVS   OTHER ACCOUNTS
     COUNSELOR            OWNED/1/       IN BILLIONS)/2/   IN BILLIONS)/3/   IN BILLIONS)/4/
- ----------------------------------------------------------------------------------------------
 James B . Lovelace      $100,001 -        4      $201.6         None              None
                          $500,000
- -----------------------------------------------------------------------------------------------
 Donald D. O'Neal           Over           2      $256.3      1      $0.10         None
                         $1,000,000
- -----------------------------------------------------------------------------------------------
 Joyce E. Gordon            Over           4      $183.5         None              None
                         $1,000,000
- -----------------------------------------------------------------------------------------------
 William L. Robbins      $100,001 -        1      $ 15.8         None              None
                          $500,000
- -----------------------------------------------------------------------------------------------
 C. Ross                 $100,001 -        2      $120.0      1      $0.10         None
 Sappenfield              $500,000
- -----------------------------------------------------------------------------------------------
 R. Michael                 Over           2      $ 35.7         None              None
 Shanahan                $1,000,000
- -----------------------------------------------------------------------------------------------


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 March 31, 2011, 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 trustees, 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 trustees who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement


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


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


In addition to providing investment advisory services, the investment adviser
furnishes the services and pays the compensation and travel expenses of persons
to perform the fund's executive, administrative, clerical and bookkeeping
functions, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies and postage used at
the fund's offices. The fund pays all expenses not assumed by the investment
adviser, including, but not limited to: custodian, stock transfer and dividend
disbursing fees and expenses; shareholder recordkeeping and administrative
expenses; costs of the designing, printing and mailing of reports, prospectuses,
proxy statements and notices to its shareholders; taxes; expenses of the
issuance and redemption of fund shares (including stock certificates,
registration and qualification fees and expenses); expenses pursuant to the
fund's plans of distribution (described below); legal and auditing expenses;
compensation, fees and expenses paid to independent trustees 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, 2009, 2008 and 2007, 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 $131,908,000, $172,589,000 and
$215,810,000, 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) and $194,229,000 (a reduction of
$21,581,000) for the fiscal years ended December 31, 2008 and 2007,
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 management fees that the investment adviser
was otherwise entitled to receive. The waiver was discontinued effective January
1, 2009.


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


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 March
31, 2011, 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 trustees 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 trustees. The investment adviser has the
right to terminate the Administrative Agreement upon 60 days' written notice to
the fund. The Administrative Agreement automatically terminates in the event of
its assignment (as defined in the 1940 Act).


Under the Administrative Agreement, the investment adviser provides certain
transfer agent and administrative services for shareholders of the fund's Class
C and F shares, and Class R and 529 shares. The investment adviser may contract
with third parties, including American Funds Service Company,/(R)/ the fund's
Transfer Agent, to provide some of these services. Services include, but are not
limited to, shareholder account maintenance, transaction processing, tax
information reporting and shareholder and fund communications. In addition, the
investment adviser monitors, coordinates, oversees and assists with the
activities performed by third parties providing such services.


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


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

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


                                             ADMINISTRATIVE SERVICES FEE
- ------------------------------------------------------------------------------
               CLASS C                               $3,468,000
- ------------------------------------------------------------------------------
              CLASS F-1                               1,628,000
- ------------------------------------------------------------------------------
              CLASS F-2                                 359,000
- ------------------------------------------------------------------------------
             CLASS 529-A                              1,314,000
- ------------------------------------------------------------------------------
             CLASS 529-B                                266,000
- ------------------------------------------------------------------------------
             CLASS 529-C                                397,000
- ------------------------------------------------------------------------------
             CLASS 529-E                                 57,000
- ------------------------------------------------------------------------------
            CLASS 529-F-1                                23,000
- ------------------------------------------------------------------------------
              CLASS R-1                                  92,000
- ------------------------------------------------------------------------------
              CLASS R-2                               2,554,000
- ------------------------------------------------------------------------------
              CLASS R-3                               1,408,000
- ------------------------------------------------------------------------------
              CLASS R-4                                 787,000
- ------------------------------------------------------------------------------
              CLASS R-5                               1,782,000
- ------------------------------------------------------------------------------
             CLASS R-6*                                 139,000
- ------------------------------------------------------------------------------

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


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


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


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

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

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


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


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


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

                                                                 COMMISSIONS,        ALLOWANCE OR
                                                                    REVENUE          COMPENSATION
                                           FISCAL YEAR/PERIOD  OR FEES RETAINED       TO DEALERS
- -----------------------------------------------------------------------------------------------------
                 CLASS A                          2009            $ 9,869,000         $45,725,000
                                                  2008             14,486,000          65,539,000
                                                  2007             19,516,000          87,565,000
- -----------------------------------------------------------------------------------------------------
                 CLASS B                          2009                217,000           1,090,000
                                                  2008                307,000           5,246,000
                                                  2007              1,265,000           7,808,000
- -----------------------------------------------------------------------------------------------------
                 CLASS C                          2009                297,000           1,727,000
                                                  2008                557,000           2,590,000
                                                  2007                934,000           3,881,000
- -----------------------------------------------------------------------------------------------------
               CLASS 529-A                        2009                753,000           3,697,000
                                                  2008                952,000           4,547,000
                                                  2007              1,209,000           5,764,000
- -----------------------------------------------------------------------------------------------------
               CLASS 529-B                        2009                 33,000             148,000
                                                  2008                 43,000             685,000
                                                  2007                125,000             833,000
- -----------------------------------------------------------------------------------------------------
               CLASS 529-C                        2009                     --             382,000
                                                  2008                 34,000             466,000
                                                  2007                  9,000             639,000
- -----------------------------------------------------------------------------------------------------




                  The Investment Company of America -- Page 30
<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 trustees 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 31
<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
       trustees 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 trustees.


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

                                                      12B-1 UNPAID LIABILITY
                               12B-1 EXPENSES              OUTSTANDING
- ------------------------------------------------------------------------------
        CLASS A                 $101,925,000                $9,358,000
- ------------------------------------------------------------------------------
        CLASS B                   19,987,000                 1,753,000
- ------------------------------------------------------------------------------
        CLASS C                   19,849,000                 1,952,000
- ------------------------------------------------------------------------------
       CLASS F-1                   2,499,000                   324,000
- ------------------------------------------------------------------------------
      CLASS 529-A                  2,089,000                   203,000
- ------------------------------------------------------------------------------
      CLASS 529-B                  1,765,000                   177,000
- ------------------------------------------------------------------------------
      CLASS 529-C                  2,694,000                   318,000
- ------------------------------------------------------------------------------
      CLASS 529-E                    211,000                    22,000
- ------------------------------------------------------------------------------
     CLASS 529-F-1                        --                        --
- ------------------------------------------------------------------------------
       CLASS R-1                     527,000                    62,000
- ------------------------------------------------------------------------------
       CLASS R-2                   3,867,000                   409,000
- ------------------------------------------------------------------------------
       CLASS R-3                   3,197,000                   342,000
- ------------------------------------------------------------------------------
       CLASS R-4                   1,301,000                   135,000
- ------------------------------------------------------------------------------




                  The Investment Company of America -- Page 32
<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 trustees and separately by a majority of the independent trustees
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 trustees of the fund are committed to the
discretion of the independent trustees 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
trustees and the Plans must be renewed annually by the board of trustees.


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.


                  The Investment Company of America -- Page 33
<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 34
<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 35
<PAGE>


                      EXECUTION OF PORTFOLIO TRANSACTIONS

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


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


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


The investment adviser may pay commissions in excess of what other
broker-dealers might have charged - including on an execution-only basis - for
certain portfolio transactions in recognition of


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


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


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


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


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


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


among the funds and other accounts that have concurrently authorized a
transaction in such security.


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


Brokerage commissions paid on portfolio transactions for the fiscal years ended
December 31, 2009, 2008 and 2007 amounted to $22,608,000, $35,314,000 and
$27,273,000, respectively. The volume of trading activity decreased during the
year, resulting in a decrease in brokerage commissions paid on portfolio
transactions.


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


At the end of the fund's most recent fiscal year, the fund's regular
broker-dealers included Citigroup Global Markets Inc. and State Street Bank &
Trust Company. As of the fund's most recent fiscal year-end, the fund held
equity securities of Citigroup Inc. in the amount of $208,479,000 and State
Street Corp. in the amount of $73,108,000. The fund held debt securities of
Citigroup Inc. in the amount of $10,095,000.


                  The Investment Company of America -- Page 38
<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 trustees 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 39
<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 40
<PAGE>


                                PRICE OF SHARES

Shares are purchased at the offering price or sold at the net asset value price
next determined after the purchase or sell order is received by the fund or the
Transfer Agent provided that your request contains all information and legal
documentation necessary to process the transaction. The Transfer Agent may
accept written orders for the sale of fund shares on a future date. These orders
are subject to the Transfer Agent's policies, which generally allow shareholders
to provide a written request to sell shares at the net asset value on a
specified date no more than five business days after receipt of the order by the
Transfer Agent. Any request to sell shares on a future date will be rejected if
the request is not in writing, if the requested transaction date is more than
five business days after the Transfer Agent receives the request or if the
request does not contain all information and legal documentation necessary to
process the transaction.


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


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


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

All portfolio securities of funds managed by Capital Research and Management
Company (other than American Funds Money Market Fund/(R)/) 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 generally 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.


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


Fixed-income securities, including short-term securities purchased with more
than 60 days left to maturity, are generally valued at prices obtained as of
approximately 3 p.m. from one or more independent pricing vendors. The pricing
vendors base bond prices on, among other things, benchmark yields, transactions,
bids, offers, quotations from dealers and trading systems, new issues,
underlying equity of the issuer, interest rate volatilities, spreads and other
relationships observed in the markets among comparable securities and
proprietary pricing models such as yield measures calculated using factors such
as cash flows, prepayment information, default rates, delinquency and loss
assumptions, financial or collateral characteristics or performance, credit
enhancements, liquidation value calculations, specific deal information and
other reference data. The fund's investment adviser performs certain checks on
these prices prior to calculation of the fund's net asset value. 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.


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
generally 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 other assets for which representative market quotations are not
readily available or are considered unreliable by the investment adviser 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


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


overall market conditions. The valuation committee employs additional fair value
procedures to address issues related to equity holdings of applicable fund
portfolios outside the United States. Securities owned by these funds trade in
markets that open and close at different times, reflecting time zone
differences. If significant events occur after the close of a market (and before
these fund's net asset values are next determined) which affect the value of
portfolio securities, appropriate adjustments from closing market prices may be
made to reflect these events. Events of this type could include, for example,
earthquakes and other natural disasters or significant price changes in other
markets (e.g., U.S. stock markets).


Each class of shares represents interests in the same portfolio of investments
and is identical in all respects to each other class, except for differences
relating to distribution, service and other charges and expenses, certain voting
rights, differences relating to eligible investors, the designation of each
class of shares, conversion features and exchange privileges. Expenses
attributable to the fund, but not to a particular class of shares, are borne by
each class pro rata based on relative aggregate net assets of the classes.
Expenses directly attributable to a class of 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 43
<PAGE>


                            TAXES AND DISTRIBUTIONS

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


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


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


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


DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS -- Dividends and capital gain
distributions on fund shares will be reinvested in shares of the fund of the
same class, unless shareholders indicate in


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


writing that they wish to receive them in cash or in shares of the same class of
other American Funds, as provided in the prospectus. Dividends and capital gain
distributions by 529 share classes will be automatically reinvested.


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


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

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


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


     To avoid such tax and interest, the fund intends to elect to treat these
     securities as sold on the last day of its fiscal year and recognize any
     gains for tax purposes at that time.


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


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


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


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


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


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


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

     If any net long-term capital gains in excess of net short-term capital
     losses are retained by the fund for reinvestment, requiring federal income
     taxes to be paid thereon by the fund, the fund intends to elect to treat
     such capital gains as having been distributed to shareholders. As a result,
     each shareholder will report such capital gains as long-term capital gains
     taxable to individual shareholders at a maximum 15% capital gains rate will
     be able to claim a pro rata share of federal income taxes paid by the fund
     on such gains


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


     as a credit against personal federal income tax liability, and will be
     entitled to increase the adjusted tax basis on fund shares by the
     difference between a pro rata share of the retained gains and such
     shareholder's related tax credit.


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


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

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

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


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


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


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


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


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


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


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


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


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

                        PURCHASE AND EXCHANGE OF SHARES

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


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

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

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

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

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

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

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

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

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


                  The Investment Company of America -- Page 49
<PAGE>


           Your bank should include the following information when wiring funds:

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

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

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

OTHER PURCHASE INFORMATION -- 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 and other registered investment companies approved by
the fund.


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 50
<PAGE>


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 Capital Group Private
          Client Services division.

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).


CONVERSION -- Currently, Class C shares of the fund automatically convert to
Class F-1 shares in the month of the 10-year anniversary of the purchase date.
The board of trustees of the fund reserves the right at any time, without
shareholder approval, to amend the conversion feature of the Class C shares,
including without limitation, converting into a different share class or not


                  The Investment Company of America -- Page 51
<PAGE>


converting. In making its decision, the board of trustees will consider, among
other things, the effect of any such amendment on shareholders.

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


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. Notwithstanding
     the previous sentence, you can exchange Class F shares received in a con-



                  The Investment Company of America -- Page 52
<PAGE>


     version from Class C shares for Class A shares at any time without paying
     an initial Class A sales charge if you notify American Funds Service
     Company of the conversion when you make your request. If you have already
     redeemed your Class F shares, the foregoing requirements apply and you must
     purchase Class A shares within 90 days after redeeming your Class F shares
     to receive the Class A shares without paying an initial Class A sales
     charge.

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

     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 53
<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 Investment Company of America -- Page 54
<PAGE>


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

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

     (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 55
<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 56
<PAGE>


                      SALES CHARGE REDUCTIONS AND WAIVERS

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


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

     The Statement period starts on the date on which your first purchase made
     toward satisfying the Statement is processed. Your accumulated holdings (as
     described in the paragraph titled "Rights of accumulation") eligible to be
     aggregated 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


                  The Investment Company of America -- Page 57
<PAGE>


     plans will be deemed completed and will terminate. In addition, effective
     May 1, 2009, the 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 58
<PAGE>


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

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

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

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

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

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

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


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


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

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

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

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

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


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


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

     .    Redemptions through an automatic withdrawal plan ("AWP") (see
          "Automatic withdrawals" under "Shareholder account services and
          privileges" in this statement of additional information). For each AWP
          payment, assets that are not subject to a CDSC, such as appreciation
          on shares and shares acquired through reinvestment of dividends and/or
          capital gain distributions, will be redeemed first and will count
          toward the 12% limit. If there is an insufficient amount of assets not
          subject to a CDSC to cover a particular AWP payment, shares subject to
          the lowest CDSC will be redeemed next until the 12% limit is reached.
          Any dividends and/or capital gain distributions taken in cash by a
          shareholder who receives


                  The Investment Company of America -- Page 60
<PAGE>


          payments through an AWP will also count toward the 12% limit. In the
          case of an AWP, the 12% limit is calculated at the time an automatic
          redemption is first made, and is recalculated at the time each
          additional automatic redemption is made. Shareholders who establish an
          AWP should be aware that the amount of a payment not subject to a CDSC
          may vary over time depending on fluctuations in the value of their
          accounts. This privilege may be revised or terminated at any time.


For purposes of this paragraph, "account" means your investment in the applicable
class of 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 61
<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 62
<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 63
<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 64
<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 declaration of trust 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 trustees of the fund may from time to time
adopt.


While payment of redemptions normally will be in cash, the fund's declaration of
trust 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 trustees. 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. The fund's board may
determine if the fund issues share certificates.


                  The Investment Company of America -- Page 65
<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 $63,362,000 for Class A shares and $2,935,000 for
Class B shares for the 2009 fiscal year. American Funds Service Company is also
compensated for certain transfer agency services provided to all share classes
from the administrative services fees paid to Capital Research and Management
Company and from the relevant share class, as described under "Administrative
services agreement."


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


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -- Deloitte & Touche LLP, 695 Town
Center Drive, Suite 1200, Costa Mesa, CA 92626, serves as the fund's independent
registered public accounting firm, providing audit services, preparation of tax
returns and review of certain documents to be filed with the Securities and
Exchange Commission. Prior to the fund's 2010 fiscal year,
PricewaterhouseCoopers LLP served in that capacity. 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.


Upon the recommendation of the fund's Audit Committee, on December 9, 2009, a
majority of the fund's board of trustees, including a majority of the
independent trustees, 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.


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


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


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 trustees in their capacities as such. 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 trustees
of the fund, as prescribed by the 1940 Act and related rules.

PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- The fund's fiscal
year ends on December 31. Shareholders are provided updated summary prospectuses
annually and at least semi-annually with reports showing the fund's investment
portfolio or summary investment portfolio, financial statements and other
information. Shareholders may request a copy of the fund's current prospectus at
no cost by calling 800/421-0180 or by sending an e-mail request to
prospectus@americanfunds.com. Shareholders may also access the fund's current
summary prospectus, prospectus, statement of additional information and
shareholder reports at americanfunds.com/prospectus. The fund's annual financial
statements are audited by the fund's independent registered public accounting
firm. 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


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


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.


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




Net asset value and redemption price per share
  (Net assets divided by shares outstanding). .                     $25.95
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). . . . . . . . . . . . . . . .                      $27.53



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 Investment Company of America -- Page 68
<PAGE>

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

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




                  The Investment Company of America -- Page 69
<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 70
<PAGE>

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





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

                                           FUND NUMBERS
                            ---------------------------------------------------
                                     CLASS  CLASS  CLASS  CLASS  CLASS   CLASS
FUND                        CLASS A   R-1    R-2    R-3    R-4    R-5     R-6
- -------------------------------------------------------------------------------
AMERICAN FUNDS TARGET DATE RETIREMENT SERIES/(R)/
American Funds 2055 Target
Date Retirement Fund/SM/      082    2182   2282   2382   2482   2582    2682
American Funds 2050 Target
Date Retirement Fund/(R)/     069    2169   2269   2369   2469   2569    2669
American Funds 2045 Target
Date Retirement Fund/(R)/     068    2168   2268   2368   2468   2568    2668
American Funds 2040 Target
Date Retirement Fund/(R)/     067    2167   2267   2367   2467   2567    2667
American Funds 2035 Target
Date Retirement Fund/(R)/     066    2166   2266   2366   2466   2566    2666
American Funds 2030 Target
Date Retirement Fund/(R)/     065    2165   2265   2365   2465   2565    2665
American Funds 2025 Target
Date Retirement Fund/(R)/     064    2164   2264   2364   2464   2564    2664
American Funds 2020 Target
Date Retirement Fund/(R)/     063    2163   2263   2363   2463   2563    2663
American Funds 2015 Target
Date Retirement Fund/(R)/     062    2162   2262   2362   2462   2562    2662
American Funds 2010 Target
Date Retirement Fund/(R)/     061    2161   2261   2361   2461   2561    2661





                  The Investment Company of America -- Page 72
<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 73
<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 74
<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 75

....

[logo – American Funds®]

The Investment Company of America®

Investment portfolio

December 31, 2009

Common stocks — 90.33%	Shares			Value (000)

ENERGY — 10.04%
Baker Hughes Inc.		10,945,000		$	443,054
BP PLC1		43,688,567			423,069
Canadian Natural Resources, Ltd.		648,200			47,065
Chevron Corp.		6,332,278			487,522
ConocoPhillips		21,425,840			1,094,218
Devon Energy Corp.		2,865,000			210,577
Diamond Offshore Drilling, Inc.		2,500,000			246,050
Eni SpA1		4,640,000			118,044
Eni SpA (ADR)		770,000			38,970
Halliburton Co.		800,000			24,072
Hess Corp.		3,228,100			195,300
Marathon Oil Corp.		4,478,300			139,813
Royal Dutch Shell PLC, Class A (ADR)		16,470,000			990,012
Royal Dutch Shell PLC, Class B1		4,793,265			139,857
Royal Dutch Shell PLC, Class B (ADR)		2,925,498			170,059
Schlumberger Ltd.		17,174,999			1,117,921
TOTAL SA1		4,740,000			303,524
					6,189,127

MATERIALS — 2.60%
Air Products and Chemicals, Inc.		2,508,600			203,347
Akzo Nobel NV1		1,500,000			98,797
Alcoa Inc.		1,676,400			27,024
Barrick Gold Corp.		7,150,000			281,567
Dow Chemical Co.		2,450,000			67,693
E.I. du Pont de Nemours and Co.		2,700,000			90,909
MeadWestvaco Corp.		4,085,000			116,953
Monsanto Co.		2,167,400			177,185
Newmont Mining Corp.		4,790,000			226,615
POSCO1		136,000			71,646
United States Steel Corp.		4,160,000			229,299
Weyerhaeuser Co.		300,000			12,942
					1,603,977

INDUSTRIALS — 10.38%
3M Co.		4,368,700			361,160
Boeing Co.		21,085,000			1,141,331
CSX Corp.		10,831,000			525,195
Cummins Inc.		3,000,000			137,580
Deere & Co.		2,800,000			151,452
FedEx Corp.		1,500,000			125,175
General Dynamics Corp.		9,685,800			660,281
General Electric Co.		24,145,000			365,314
Illinois Tool Works Inc.		6,400,000			307,136
Lockheed Martin Corp.		4,990,000			375,997
Norfolk Southern Corp.		2,201,600			115,408
Raytheon Co.		2,399,800			123,638
Siemens AG1		1,665,000			152,607
Southwest Airlines Co.		13,000,000			148,590
Tyco International Ltd.		2,115,000			75,463
Union Pacific Corp.		10,319,800			659,435
United Parcel Service, Inc., Class B		2,500,000			143,425
United Technologies Corp.		10,040,000			696,876
Waste Management, Inc.		4,000,000			135,240
					6,401,303

CONSUMER DISCRETIONARY — 8.49%
Best Buy Co., Inc.		6,472,300			255,397
Carnival Corp., units2		9,450,000			299,471
CBS Corp., Class B, nonvoting shares		15,200,000			213,560
Comcast Corp., Class A		12,000,000			202,320
Daimler AG1		960,000			51,252
Harley-Davidson, Inc.		4,825,000			121,590
Honda Motor Co., Ltd.1		6,310,200			213,487
Johnson Controls, Inc.		13,310,300			362,573
Limited Brands, Inc.		15,687,743			301,832
Lowe’s Companies, Inc.		19,460,000			455,169
Mattel, Inc.		2,512,075			50,191
McDonald’s Corp.		6,150,000			384,006
McGraw-Hill Companies, Inc.		2,350,000			78,749
News Corp., Class A		7,000,000			95,830
Omnicom Group Inc.		3,000,000			117,450
Staples, Inc.		9,525,000			234,220
Target Corp.		16,040,800			775,893
Time Warner Cable Inc.		2,779,585			115,047
Time Warner Inc.		17,930,667			522,500
TJX Companies, Inc.		3,000,000			109,650
Toyota Motor Corp.1		6,550,000			275,366
					5,235,553

CONSUMER STAPLES — 11.09%
Altria Group, Inc.		23,795,000			467,096
Avon Products, Inc.		13,852,000			436,338
Coca-Cola Co.		5,365,000			305,805
ConAgra Foods, Inc.		5,521,100			127,261
CVS/Caremark Corp.		8,000,000			257,680
General Mills, Inc.		1,960,000			138,788
H.J. Heinz Co.		2,750,000			117,590
Kellogg Co.		4,549,503			242,034
Kimberly-Clark Corp.		1,500,000			95,565
Kraft Foods Inc., Class A		17,429,168			473,725
Molson Coors Brewing Co., Class B		8,250,000			372,570
PepsiCo, Inc.		14,165,000			861,232
Philip Morris International Inc.		37,305,000			1,797,728
Procter & Gamble Co.		2,635,000			159,760
Reynolds American Inc.		666,666			35,313
Sara Lee Corp.		17,943,100			218,547
Sysco Corp.		2,450,000			68,453
Walgreen Co.		11,401,100			418,648
Wal-Mart Stores, Inc.		4,527,000			241,968
					6,836,101

HEALTH CARE — 8.77%
Abbott Laboratories		13,435,000			725,356
Aetna Inc.		7,500,000			237,750
Amgen Inc.2		1,840,792			104,134
Bayer AG1		950,000			75,873
Bristol-Myers Squibb Co.		1,900,000			47,975
Eli Lilly and Co.		8,775,000			313,355
Johnson & Johnson		2,850,000			183,568
Medtronic, Inc.		13,862,500			609,673
Merck & Co., Inc.		43,146,869			1,576,587
Novartis AG1		800,000			43,537
Novartis AG (ADR)		256,556			13,964
Pfizer Inc		26,945,000			490,130
Roche Holding AG1		3,502,500			595,170
UnitedHealth Group Inc.		8,500,000			259,080
WellPoint, Inc.2		2,193,100			127,836
					5,403,988

FINANCIALS — 6.01%
American International Group, Inc.2		141,955			4,256
AXA SA1		5,345,418			126,328
Banco Santander, SA1		49,785,274			817,368
Banco Santander, SA (ADR)		3,700,000			60,828
Bank of America Corp.		33,149,382			499,230
Bank of New York Mellon Corp.		9,700,000			271,309
Berkshire Hathaway Inc., Class A2		2,600			257,920
BNP Paribas SA1		2,200,000			173,483
Capital One Financial Corp.		7,105,576			272,428
Citigroup Inc.		62,984,615			208,479
HSBC Holdings PLC (ADR)		1,529,416			87,314
HSBC Holdings PLC (United Kingdom)1		4,869,240			55,641
JPMorgan Chase & Co.		9,830,000			409,616
PNC Financial Services Group, Inc.		1,200,000			63,348
Société Générale1		1,013,823			70,098
State Street Corp.		1,679,100			73,108
Washington Mutual, Inc.2		24,000,000			3,348
Wells Fargo & Co.		9,274,600			250,321
					3,704,423

INFORMATION TECHNOLOGY — 21.56%
Accenture PLC, Class A		11,636,000			482,894
Analog Devices, Inc.		2,300,000			72,634
Applied Materials, Inc.		3,525,000			49,139
Automatic Data Processing, Inc.		7,758,043			332,199
Canon, Inc.1		770,000			32,571
Cisco Systems, Inc.2		19,920,400			476,894
Corning Inc.		15,000,000			289,650
Flextronics International Ltd.2		17,000,000			124,270
Google Inc., Class A2		1,281,480			794,492
Hewlett-Packard Co.		25,440,000			1,310,414
HTC Corp.1		7,000,000			79,754
Intel Corp.		34,129,700			696,246
International Business Machines Corp.		5,285,000			691,807
KLA-Tencor Corp.		6,726,900			243,245
Linear Technology Corp.		8,320,000			254,093
Maxim Integrated Products, Inc.		6,547,700			132,918
Microsoft Corp.		85,560,800			2,608,749
Nokia Corp.1		24,200,000			310,448
Nokia Corp. (ADR)		5,652,400			72,633
Oracle Corp.		79,910,100			1,960,994
QUALCOMM Inc.		4,035,000			186,659
SAP AG1		3,200,000			150,814
Taiwan Semiconductor Manufacturing Co. Ltd.1		95,036,325			190,846
Telefonaktiebolaget LM Ericsson, Class B1		19,750,000			181,793
Texas Instruments Inc.		28,065,000			731,374
Xerox Corp.		2,682,965			22,698
Xilinx, Inc.		8,345,500			209,138
Yahoo! Inc.2		35,743,200			599,771
					13,289,137

TELECOMMUNICATION SERVICES — 5.59%
América Móvil, SAB de CV, Series L (ADR)		950,000			44,631
AT&T Inc.		77,306,500			2,166,901
Deutsche Telekom AG1		750,000			11,069
France Télécom SA1		6,220,000			155,183
Qwest Communications International Inc.		73,780,000			310,614
Verizon Communications Inc.		22,891,000			758,379
					3,446,777

UTILITIES — 3.95%
Dominion Resources, Inc.		12,263,824			477,308
Exelon Corp.		13,360,600			652,932
FirstEnergy Corp.		6,443,500			299,301
FPL Group, Inc.		300,000			15,846
GDF Suez1		10,860,324			470,817
PPL Corp.		1,798,000			58,093
Public Service Enterprise Group Inc.		10,000,000			332,500
RWE AG1		1,300,000			126,238
					2,433,035

MISCELLANEOUS — 1.85%
Other common stocks in initial period of acquisition					1,139,717


Total common stocks (cost: $46,676,182,000)					55,683,138



Preferred stocks — 0.17%

FINANCIALS — 0.17%
JPMorgan Chase & Co., Series I, 7.90%3		14,505,000			15,010
PNC Preferred Funding Trust I 6.517%3,4		14,900,000			11,169
PNC Preferred Funding Trust III 8.70%3,4		34,000,000			34,917
Wachovia Capital Trust III 5.80%3		13,305,000			10,311
Wells Fargo & Co. 7.98%3		30,187,000			30,414


Total preferred stocks (cost: $66,965,000)					101,821


				Value
Warrants — 0.00%	Shares				(000	)

FINANCIALS — 0.00%
Washington Mutual, Inc., warrants, expire 20131,2,4		3,071,428		$	—


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



	Shares or
Convertible securities — 0.43%	principal amount

FINANCIALS — 0.09%
American International Group, Inc. 8.50% convertible preferred 2011, units		4,211,826			47,720
Fannie Mae, Series 2004-1, 5.375% convertible preferred2		820			1,845
Fannie Mae, Series 2008-1, 8.75% noncumulative convertible preferred2		1,218,000			2,168
					51,733

TELECOMMUNICATION SERVICES — 0.08%
Qwest Communications International Inc. 3.50% convertible debenture 2025	$	50,000,000			52,125


MISCELLANEOUS — 0.26%
Other convertible securities in initial period of acquisition					158,238


Total convertible securities (cost: $654,041,000)					262,096



	Principal amount
Bonds & notes — 2.66%		(000	)

ENERGY — 0.10%
Apache Corp. 6.90% 2018	$	15,000			17,606
Chevron Corp. 4.95% 2019		10,000			10,553
Williams Companies, Inc. 8.75% 2020		26,375			31,520
					59,679

MATERIALS — 0.10%
BHP Billiton Finance (USA) Ltd. 5.50% 2014		14,660			16,095
Dow Chemical Co. 8.55% 2019		20,000			23,903
Dow Chemical Co. 9.40% 2039		5,940			7,877
Rio Tinto Finance (USA) Ltd. 5.875% 2013		10,000			10,799
Rio Tinto Finance (USA) Ltd. 9.00% 2019		3,780			4,792
					63,466

INDUSTRIALS — 0.22%
Burlington Northern Santa Fe Corp. 5.75% 2018		15,000			15,960
CSX Corp. 6.25% 2015		5,000			5,513
CSX Corp. 7.375% 2019		11,480			13,137
Honeywell International Inc. 3.875% 2014		5,205			5,434
Honeywell International Inc. 5.00% 2019		13,090			13,640
Lockheed Martin Corp. 7.65% 2016		1,870			2,226
Lockheed Martin Corp. 4.25% 2019		7,000			6,770
Norfolk Southern Corp. 5.75% 2018		15,000			15,893
Norfolk Southern Corp. 5.90% 2019		5,000			5,349
PACCAR Inc, Series A, 6.875% 2014		5,000			5,645
Raytheon Co. 4.40% 2020		6,055			5,976
Union Pacific Corp. 5.125% 2014		11,495			12,255
Union Pacific Corp. 6.125% 2020		15,000			16,341
Waste Management, Inc. 6.375% 2015		10,000			11,094
					135,233

CONSUMER DISCRETIONARY — 0.33%
Comcast Corp. 6.50% 2015		7,710			8,647
Comcast Corp. 6.30% 2017		20,120			22,050
Comcast Corp. 6.50% 2017		10,000			11,086
Hasbro, Inc. 6.125% 2014		11,250			12,260
Johnson Controls, Inc. 5.50% 2016		5,160			5,255
Kohl’s Corp. 6.25% 2017		7,500			8,312
News America Inc. 6.90% 2019		21,315			24,059
Staples, Inc. 7.75% 2011		4,695			5,047
Staples, Inc. 9.75% 2014		40,000			48,780
Time Warner Cable Inc. 6.20% 2013		2,845			3,128
Time Warner Cable Inc. 8.25% 2019		15,320			18,278
Time Warner Inc. 5.875% 2016		20,000			21,621
Walt Disney Co. 5.50% 2019		15,000			16,100
					204,623

CONSUMER STAPLES — 0.16%
Altria Group, Inc. 9.25% 2019		10,000			12,207
British American Tobacco International Finance PLC 9.50% 20184		15,000			19,078
Coca-Cola Co. 4.875% 2019		10,000			10,436
ConAgra Foods, Inc. 5.875% 2014		10,000			10,908
CVS Caremark Corp. 6.60% 2019		20,335			22,291
Sysco Corp. 5.375% 2019		10,000			10,639
Tesco PLC 5.50% 20174		10,506			11,075
					96,634

HEALTH CARE — 0.24%
Abbott Laboratories 5.125% 2019		25,000			26,197
Aetna Inc. 5.75% 2011		1,961			2,057
Aetna Inc. 7.875% 2011		865			921
Cardinal Health, Inc. 4.00% 2015		10,000			9,823
Cardinal Health, Inc. 5.80% 2016		14,625			14,731
Cardinal Health, Inc. 5.85% 2017		3,715			3,758
Novartis Securities Investment Ltd. 5.125% 2019		20,000			21,049
Pfizer Inc. 6.20% 2019		10,000			11,136
Roche Holdings Inc. 5.00% 20144		10,000			10,740
Roche Holdings Inc. 6.00% 20194		20,000			22,094
WellPoint, Inc. 5.875% 2017		15,000			15,477
WellPoint, Inc. 7.00% 2019		12,200			13,668
					151,651

FINANCIALS — 0.28%
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		15,000			16,024
American Express Co. 7.00% 2018		7,660			8,449
Bank of America Corp. 5.75% 2017		10,000			10,256
Boston Properties, Inc. 5.875% 2019		15,000			15,075
Capital One Capital III 7.686% 20363		11,665			10,673
Capital One Capital IV 6.745% 20373		14,347			12,052
Citigroup Inc. 6.125% 2017		10,000			10,095
JPMorgan Chase & Co. 4.75% 2013		10,000			10,563
JPMorgan Chase & Co. 6.00% 2018		10,000			10,767
MetLife Global Funding 5.125% 20144		7,000			7,415
Metropolitan Life Global Funding I, 5.125% 20134		3,335			3,536
National City Corp. 5.80% 2017		1,350			1,352
National City Corp. 6.875% 2019		3,050			3,234
Northern Trust Corp. 4.625% 2014		5,650			6,027
PNC Funding Corp. 0.481% 20143		10,000			9,494
PNC Funding Corp. 5.40% 2014		10,000			10,705
PNC Funding Corp., Series II, 6.113% (undated)3,4		5,000			3,526
Simon Property Group, LP 6.75% 2014		3,000			3,200
Simon Property Group, LP 5.25% 2016		5,875			5,722
Simon Property Group, LP 6.10% 2016		1,625			1,661
Simon Property Group, LP 6.125% 2018		1,680			1,710
SLM Corp., Series A, 5.125% 2012		1,000			938
SLM Corp., Series A, 5.00% 2013		3,005			2,767
SLM Corp., Series A, 5.375% 2013		1,905			1,798
SLM Corp., Series A, 8.45% 2018		4,090			4,042
					171,081

INFORMATION TECHNOLOGY — 0.04%
Cisco Systems, Inc. 4.95% 2019		15,000			15,403
National Semiconductor Corp. 6.60% 2017		10,000			10,259
					25,662

TELECOMMUNICATION SERVICES — 0.11%
AT&T Inc. 4.85% 2014		15,000			15,964
AT&T Inc. 5.50% 2018		15,000			15,677
Verizon Communications Inc. 5.55% 2014		20,000			21,725
Vodafone Group PLC 5.375% 2015		6,000			6,455
Vodafone Group PLC 5.625% 2017		7,500			7,978
					67,799

UTILITIES — 0.05%
FirstEnergy Solutions Corp. 4.80% 2015		4,000			4,088
PG&E Corp. 5.75% 2014		8,000			8,631
Progress Energy, Inc. 6.05% 2014		5,650			6,191
Progress Energy, Inc. 7.05% 2019		8,800			9,862
					28,772

MORTGAGE-BACKED OBLIGATIONS5 — 0.73%
Fannie Mae 4.50% 2023		15,799			16,295
Fannie Mae 4.50% 2023		37,872			39,038
Fannie Mae 4.00% 2024		14,902			15,016
Fannie Mae 4.00% 2024		19,286			19,433
Fannie Mae 4.00% 2024		23,722			23,902
Fannie Mae 5.00% 2024		34,534			36,181
Fannie Mae 5.50% 2024		18,078			19,177
Fannie Mae 6.00% 2037		93,646			99,385
Fannie Mae 5.50% 2038		19,378			20,317
Fannie Mae 4.50% 2039		14,969			14,961
Freddie Mac 5.00% 2038		41,535			42,646
Freddie Mac 5.50% 2038		96,921			101,691
					448,042

BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 0.30%
Fannie Mae 2.50% 2014		25,000			24,884
Federal Home Loan Bank 3.625% 2013		50,000			52,306
Freddie Mac 1.50% 2011		5,000			5,043
Freddie Mac 2.125% 2012		10,000			10,088
U.S. Treasury 0.875% 2011		10,000			10,032
U.S. Treasury 1.125% 2011		24,000			24,011
U.S. Treasury 4.25% 2012		15,000			16,099
U.S. Treasury 1.75% 2014		10,000			9,812
U.S. Treasury 1.875% 2014		5,000			4,898
U.S. Treasury 4.125% 2015		10,000			10,665
U.S. Treasury 4.625% 2017		10,000			10,802
U.S. Treasury 4.50% 2039		10,000			9,778
					188,418

Total bonds & notes (cost: $1,521,748,000)					1,641,060



Short-term securities — 6.49%

Abbott Laboratories 0.11% due 2/22/20104		35,000			34,991
Bank of America Corp. 0.25%–0.30% due 1/12–2/8/2010		91,500			91,489
Campbell Soup Co. 0.23% due 2/1/20104		4,300			4,299
Coca-Cola Co. 0.23% due 1/15–5/11/20104		88,700			88,652
Fannie Mae 0.09%–0.54% due 1/5–12/1/2010		836,600			835,971
Federal Farm Credit Banks 0.11%–0.36% due 3/18–8/16/2010		240,000			239,802
Federal Home Loan Bank 0.10%–0.58% due 2/1–10/8/2010		331,600			331,328
Freddie Mac 0.05%–0.43% due 1/4–8/6/2010		1,613,355			1,612,747
General Electric Capital Corp. 0.19%–0.20% due 1/19–1/26/2010		63,200			63,191
Hewlett-Packard Co. 0.11% due 1/22/20104		25,000			24,998
Johnson & Johnson 0.10%–0.20% due 3/1–5/25/20104		19,600			19,589
JPMorgan Chase Funding Inc. 0.18% due 1/19/20104		54,500			54,493
Jupiter Securitization Co., LLC 0.16%–0.18% due 1/11–1/19/20104		90,000			89,994
Paccar Financial Corp. 0.18% due 2/2–2/12/2010		36,175			36,167
Private Export Funding Corp. 0.24% due 3/16/20104		25,000			24,992
Procter & Gamble International Funding S.C.A. 0.23% due 1/13/20104		17,300			17,299
Straight-A Funding LLC 0.18% due 3/16/20104		28,600			28,591
U.S. Treasury Bills 0.161%–0.532% due 2/4–8/26/2010		353,300			352,954
Variable Funding Capital Company LLC 0.16%–0.21% due 1/7–1/14/20104		49,100			49,095


Total short-term securities (cost: $3,999,743,000)					4,000,642

Total investment securities (cost: $52,930,449,000)					61,688,757
Other assets less liabilities					(47,141	)

Net assets				$	61,641,616

"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 $5,789,052,000, which represented 9.39% of the net assets of the fund. This entire amount relates to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

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

3Coupon rate may change periodically.

4Purchased 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 $560,543,000, which represented .91% of the net assets of the fund.

5Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

Key to abbreviation

ADR = American Depositary Receipts

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

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

MFGEFP-904-0210O-S21492

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

The Investment Company of America:

We have audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the financial statements of The Investment Company of America (the "Fund") as of December 31, 2009, and for the year then ended and have issued our unqualified report thereon dated February 8, 2010 (which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR). Our audit included an audit of the Fund's investment portfolio (the “Portfolio”) as of December 31, 2009 appearing in Item 6 of this Form N-CSR. The Portfolio is the responsibility of the Fund's management. Our responsibility is to express an opinion on the Portfolio based on our audit.

In our opinion, the Portfolio referred to above, when read in conjunction with the financial statements of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.

PricewaterhouseCoopers LLP

Los Angeles, California

February 8, 2010

									Dividend			Value of affiliates
									income			at 12/31/09
	Beginning shares		Additions		Reductions		Ending shares			(000	)		(000	)
Limited Brands, Inc. (5)		20,309,759		625,184		5,247,200		15,687,743	$	11,774		$	-
Textron Inc. (5)		12,430,000		2,325,000		14,755,000		-		488			-
United States Steel Corp. (5)		3,060,000		4,842,000		3,742,000		4,160,000		1,858			-
									$	14,120		$	-

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

Assets:
Investment securities, at value (cost: $52,930,449)			$	61,688,757
Cash				139
Receivables for:
Sales of investments	$	93,004
Sales of fund's shares		51,494
Dividends and interest		118,719		263,217
				61,952,113
Liabilities:
Payables for:
Purchases of investments		144,988
Repurchases of fund's shares		118,729
Investment advisory services		12,383
Services provided by affiliates		22,761
Directors' and advisory board's deferred compensation		6,047
Other		5,589		310,497
Net assets at December 31, 2009			$	61,641,616

Net assets consist of:
Capital paid in on shares of capital stock			$	56,176,728
Undistributed net investment income				153,405
Accumulated net realized loss				(3,447,556	)
Net unrealized appreciation				8,759,039
Net assets at December 31, 2009			$	61,641,616

	(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	$	49,136,383		1,893,396		25.95
Class B		250,000		2,016,792		78,035		25.84
Class C		250,000		2,242,970		87,000		25.78
Class F-1		250,000		1,209,401		46,665		25.92
Class F-2		350,000		532,693		20,530		25.95
Class 529-A		325,000		1,173,180		45,257		25.92
Class 529-B		75,000		201,165		7,779		25.86
Class 529-C		150,000		320,760		12,401		25.86
Class 529-E		75,000		50,736		1,961		25.87
Class 529-F-1		75,000		21,793		841		25.90
Class R-1		75,000		65,912		2,552		25.83
Class R-2		100,000		621,141		24,025		25.85
Class R-3		150,000		768,256		29,666		25.90
Class R-4		75,000		623,941		24,079		25.91
Class R-5		150,000		2,122,808		81,826		25.94
Class R-6		150,000		533,685		20,568		25.95
Total		5,000,000	$	61,641,616		2,376,581

(*) 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 $27.53 and $27.50, respectively.

See Notes to Financial Statements

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

Investment income:
Income:
Dividend (net of non-U.S.
taxes of $42,034; also includes
$14,120 from affiliates)	$	1,512,449
Interest		108,283		$	1,620,732

Fees and expenses*:
Investment advisory services		131,908
Distribution services		159,911
Transfer agent services		66,297
Administrative services		15,763
Reports to shareholders		3,601
Registration statement and prospectus		10,743
Directors' and advisory board's compensation		2,280
Auditing and legal		277
Custodian		1,538
State and local taxes		559
Other		3,553			396,430
Net investment income					1,224,302

Net realized loss and unrealized
appreciation on investments and currency:
Net realized (loss) gain on:
Investments (including $80,115 net gain from affiliates)		(1,816,102	)
Currency transactions		1,873			(1,814,229	)
Net unrealized appreciation on:
Investments		13,859,068
Currency translations		529			13,859,597
Net realized loss and unrealized appreciation on
investments and currency					12,045,368
Net increase in net assets resulting from operations				$	13,269,670

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

See Notes to Financial Statements



Statements of changes in net assets				(dollars in thousands)


	Year ended December 31
		2009			2008
Operations:
Net investment income	$	1,224,302		$	1,588,685
Net realized loss on investments and currency transactions		(1,814,229	)		(1,625,009	)
Net unrealized appreciation (depreciation) on investments and currency translations		13,859,597			(29,848,883	)
Net increase (decrease) in net assets resulting from operations		13,269,670			(29,885,207	)


Dividends paid to shareholders from net investment income		(1,346,554	)		(1,723,752	)


Net capital share transactions		(3,397,226	)		(4,477,943	)

Total increase (decrease) in net assets		8,525,890			(36,086,902	)

Net assets:
Beginning of year		53,115,726			89,202,628
End of year (including undistributed
net investment income: $153,405 and $271,009, respectively)	$	61,641,616		$	53,115,726


See Notes to Financial Statements

	(dollars in thousands)
Undistributed ordinary income				$	308,383
Capital loss carryforwards*:
Expiring 2016	$	(657,170	)
Expiring 2017		(2,957,332	)		(3,614,502	)
Gross unrealized appreciation on investment securities					13,703,318
Gross unrealized depreciation on investment securities					(4,925,803	)
Net unrealized appreciation on investment securities					8,777,515
Cost of investment securities					52,911,242

*The capital loss carryforwards will be used to offset any capital gains realized by the fund in future years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.

Industry sector diversification (percent of net assets)

Information technology	21.56	%
Industrials	10.38
Energy	10.04
Consumer staples	11.09
Health care	8.77
Other industries	28.66
Convertible securities	0.43
Bonds & notes	2.66
Short-term securities & other assets less liabilities	6.41

							Percent
				Value			of net
Common stocks - 90.33%	Shares				(000	)	assets

Energy - 10.04%
Baker Hughes Inc.		10,945,000		$	443,054			.72	%
BP PLC (1)		43,688,567			423,069			.69
Chevron Corp.		6,332,278			487,522			.79
ConocoPhillips		21,425,840			1,094,218			1.78
Royal Dutch Shell PLC, Class A (ADR)		16,470,000			990,012
Royal Dutch Shell PLC, Class B (1)		4,793,265			139,857
Royal Dutch Shell PLC, Class B (ADR)		2,925,498			170,059			2.11
Schlumberger Ltd.		17,174,999			1,117,921			1.81
Other securities					1,323,415			2.14
					6,189,127			10.04

Materials - 2.60%
Other securities					1,603,977			2.60


Industrials - 10.38%
Boeing Co.		21,085,000			1,141,331			1.85
CSX Corp.		10,831,000			525,195			.85
General Dynamics Corp.		9,685,800			660,281			1.07
General Electric Co.		24,145,000			365,314			.59
Lockheed Martin Corp.		4,990,000			375,997			.61
Union Pacific Corp.		10,319,800			659,435			1.07
United Technologies Corp.		10,040,000			696,876			1.13
Other securities					1,976,874			3.21
					6,401,303			10.38

Consumer discretionary - 8.49%
Lowe's Companies, Inc.		19,460,000			455,169			.74
McDonald's Corp.		6,150,000			384,006			.62
Target Corp.		16,040,800			775,893			1.26
Time Warner Inc.		17,930,667			522,500			.85
Other securities					3,097,985			5.02
					5,235,553			8.49

Consumer staples - 11.09%
Altria Group, Inc.		23,795,000			467,096			.76
Avon Products, Inc.		13,852,000			436,338			.71
Kraft Foods Inc., Class A		17,429,168			473,725			.77
Molson Coors Brewing Co., Class B		8,250,000			372,570			.60
PepsiCo, Inc.		14,165,000			861,232			1.40
Philip Morris International Inc.		37,305,000			1,797,728			2.92
Walgreen Co.		11,401,100			418,648			.68
Other securities					2,008,764			3.25
					6,836,101			11.09

Health care - 8.77%
Abbott Laboratories		13,435,000			725,356			1.18
Medtronic, Inc.		13,862,500			609,673			.99
Merck & Co., Inc.		43,146,869			1,576,587			2.56
Pfizer Inc		26,945,000			490,130			.79
Roche Holding AG (1)		3,502,500			595,170			.96
Other securities					1,407,072			2.29
					5,403,988			8.77

Financials - 6.01%
Banco Santander, SA (1)		49,785,274			817,368
Banco Santander, SA (ADR)		3,700,000			60,828			1.42
Bank of America Corp.		33,149,382			499,230			.81
JPMorgan Chase & Co.		9,830,000			409,616			.66
Other securities					1,917,381			3.12
					3,704,423			6.01

Information technology - 21.56%
Accenture PLC, Class A		11,636,000			482,894			.78
Cisco Systems, Inc. (2)		19,920,400			476,894			.77
Google Inc., Class A (2)		1,281,480			794,492			1.29
Hewlett-Packard Co.		25,440,000			1,310,414			2.13
Intel Corp.		34,129,700			696,246			1.13
International Business Machines Corp.		5,285,000			691,807			1.12
Microsoft Corp.		85,560,800			2,608,749			4.23
Nokia Corp. (1)		24,200,000			310,448
Nokia Corp. (ADR)		5,652,400			72,633			.62
Oracle Corp.		79,910,100			1,960,994			3.18
Texas Instruments Inc.		28,065,000			731,374			1.19
Yahoo! Inc. (2)		35,743,200			599,771			.97
Other securities					2,552,421			4.15
					13,289,137			21.56

Telecommunication services - 5.59%
AT&T Inc.		77,306,500			2,166,901			3.51
Verizon Communications Inc.		22,891,000			758,379			1.23
Other securities					521,497			.85
					3,446,777			5.59

Utilities - 3.95%
Dominion Resources, Inc.		12,263,824			477,308			.77
Exelon Corp.		13,360,600			652,932			1.06
GDF Suez (1)		10,860,324			470,817			.76
Other securities					831,978			1.36
					2,433,035			3.95

Miscellaneous - 1.85%
Other common stocks in initial period of acquisition					1,139,717			1.85


Total common stocks (cost: $46,676,182,000)					55,683,138			90.33





Preferred stocks - 0.17%

Financials - 0.17%
Other securities					101,821			.17


Total preferred stocks (cost: $66,965,000)					101,821			.17





Warrants - 0.00%

Financials - 0.00%
Other securities					-			.00


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




Convertible securities - 0.43%

Other - 0.17%
Fannie Mae, Series 2004-1, 5.375% convertible preferred (2)		820			1,845
Fannie Mae, Series 2008-1, 8.75% noncumulative convertible preferred (2)		1,218,000			2,168			.01
Other securities					99,845			.16
					103,858			.17

Miscellaneous - 0.26%
Other convertible securities in initial period of acquisition					158,238			.26


Total convertible securities (cost: $654,041,000)					262,096			.43



	Principal
	amount
Bonds & notes - 2.66%		(000	)

Industrials - 0.22%
Union Pacific Corp. 5.125%-6.125% 2014-2020	$	26,495			28,596			.05
Other securities					106,637			.17
					135,233			.22

Health care - 0.24%
Abbott Laboratories 5.125% 2019		25,000			26,197			.04
Roche Holdings Inc. 5.00%-6.00% 2014-2019 (3)		30,000			32,834			.05
Other securities					92,620			.15
					151,651			.24

Financials - 0.28%
Bank of America Corp. 5.75% 2017		10,000			10,256			.02
Other securities					160,825			.26
					171,081			.28

Telecommunication services - 0.11%
AT&T Inc. 4.85%-5.50% 2014-2018		30,000			31,641			.05
Verizon Communications Inc. 5.55% 2014		20,000			21,725			.04
Other securities					14,433			.02
					67,799			.11

Mortgage-backed obligations (4) - 0.73%
Fannie Mae 4.00%-6.00% 2023-2039		292,186			303,705			.49
Freddie Mac 5.00%-5.50% 2038		138,456			144,337			.24
					448,042			.73

Bonds & notes of U.S. government & government agencies - 0.30%
Fannie Mae 2.50% 2014		25,000			24,884			.04
Freddie Mac 1.50%-2.125% 2011-2012		15,000			15,131			.02
Other securities					148,403			.24
					188,418			.30

Other - 0.78%
Other securities					478,836			.78


Total bonds & notes (cost: $1,521,748,000)					1,641,060			2.66



Short-term securities - 6.49%

Abbott Laboratories 0.11% due 2/22/2010 (3)		35,000			34,991			.06
Bank of America Corp. 0.25%-0.30% due 1/12-2/8/2010		91,500			91,489			.15
Fannie Mae 0.09%-0.54% due 1/5-12/1/2010		836,600			835,971			1.35
Freddie Mac 0.05%-0.43% due 1/4-8/6/2010		1,613,355			1,612,747			2.62
Hewlett-Packard Co. 0.11% due 1/22/2010 (3)		25,000			24,998			.04
Other securities					1,400,446			2.27


Total short-term securities (cost: $3,999,743,000)					4,000,642			6.49


Total investment securities (cost: $52,930,449,000)					61,688,757			100.08
Other assets less liabilities					(47,141	)		(0.08	)

Net assets				$	61,641,616			100.00	%

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

Share class	Year ended December 31, 2009		Year ended December 31, 2008

Class A	$	1,112,521	$	1,457,129
Class B		35,814		53,327
Class C		35,279		45,028
Class F-1		26,295		33,642
Class F-2*		6,735		803
Class 529-A		24,270		27,448
Class 529-B		3,003		3,525
Class 529-C		4,644		5,170
Class 529-E		934		1,033
Class 529-F-1		471		469
Class R-1		956		992
Class R-2		8,796		9,472
Class R-3		14,242		17,275
Class R-4		12,685		9,247
Class R-5		51,696		59,192
Class R-6†		8,213		-
Total	$	1,346,554	$	1,723,752

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

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

Investment securities:		Level 1		Level 2			Level 3		Total
Common stocks:
	Energy	$	5,204,633	$	984,494	*	$	-	$	6,189,127
	Materials		1,433,534		170,443	*		-		1,603,977
	Industrials		6,248,696		152,607	*		-		6,401,303
	Consumer discretionary		4,695,448		540,105	*		-		5,235,553
	Consumer staples		6,836,101		-			-		6,836,101
	Health care		4,689,408		714,580	*		-		5,403,988
	Financials		2,461,505		1,242,918	*		-		3,704,423
	Information technology		12,342,911		946,226	*		-		13,289,137
	Telecommunication services		3,280,525		166,252	*		-		3,446,777
	Utilities		1,835,980		597,055	*		-		2,433,035
	Miscellaneous		865,345		274,372	*		-		1,139,717
Preferred stocks			-		101,821			-		101,821
Convertible securities			193,367		68,729			-		262,096
Bonds & notes			-		1,641,060			-		1,641,060
Short-term securities			-		4,000,642			-		4,000,642
Total		$	50,087,453	$	11,601,304		$	-	$	61,688,757

Share class	Sales(1)				Reinvestments of dividends				Repurchases(1)						Net (decrease) increase
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended December 31, 2009
Class A	$	3,518,129		160,970	$	1,039,709		49,310	$	(8,226,013	)		(380,131	)	$	(3,668,175	)		(169,851	)
Class B		61,574		3,016		34,638		1,696		(687,861	)		(31,673	)		(591,649	)		(26,961	)
Class C		225,665		10,369		33,440		1,623		(421,934	)		(19,789	)		(162,829	)		(7,797	)
Class F-1		373,135		16,530		23,244		1,103		(419,203	)		(19,146	)		(22,824	)		(1,513	)
Class F-2		436,097		19,106		4,659		206		(61,811	)		(2,749	)		378,945			16,563
Class 529-A		147,182		6,639		24,250		1,147		(119,449	)		(5,425	)		51,983			2,361
Class 529-B		7,435		361		3,001		145		(17,814	)		(813	)		(7,378	)		(307	)
Class 529-C		46,212		2,105		4,640		224		(41,148	)		(1,861	)		9,704			468
Class 529-E		7,228		329		933		44		(5,476	)		(248	)		2,685			125
Class 529-F-1		6,264		284		470		22		(3,669	)		(164	)		3,065			142
Class R-1		19,533		891		954		46		(11,671	)		(526	)		8,816			411
Class R-2		159,857		7,330		8,788		421		(133,396	)		(6,118	)		35,249			1,633
Class R-3		219,289		9,963		14,229		675		(179,973	)		(8,112	)		53,545			2,526
Class R-4		495,247		22,370		12,679		580		(317,249	)		(13,410	)		190,677			9,540
Class R-5		603,306		26,788		51,354		2,450		(777,329	)		(36,239	)		(122,669	)		(7,001	)
Class R-62		457,079		21,079		8,212		342		(21,662	)		(853	)		443,629			20,568
Total net increase
(decrease)	$	6,783,232		308,130	$	1,265,200		60,034	$	(11,445,658	)		(527,257	)	$	(3,397,226	)		(159,093	)

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

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

			Income (loss) from investment operations(2)								Dividends and distributions
	Net asset value, beginning of period		Net investment income		Net gains (losses) on securities (both realized and unrealized)			Total from investment operations			Dividends (from net investment income)			Distributions (from capital gains)			Total dividends and distributions			Net asset value, end of period		Total return(3) (4)			Net assets, end of period (in millions)		Ratio of expenses to average net assets before reimbursements/ waivers			Ratio of expenses to average net assets after reimbursements/ waivers(4)			Ratio of net income to average net assets(4)
Class A:
Year ended 12/31/2009	$	20.96	$	.52	$	5.04		$	5.56		$	(.57	)	$	-		$	(.57	)	$	25.95		27.18	%	$	49,136		.66	%		.66	%		2.32	%
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
Class B:
Year ended 12/31/2009		20.87		.35		5.02			5.37			(.40	)		-			(.40	)		25.84		26.19			2,017		1.43			1.43			1.57
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
Class C:
Year ended 12/31/2009		20.82		.34		5.01			5.35			(.39	)		-			(.39	)		25.78		26.20			2,243		1.46			1.46			1.53
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
Class F-1:
Year ended 12/31/2009		20.93		.51		5.05			5.56			(.57	)		-			(.57	)		25.92		27.21			1,209		.68			.68			2.31
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
Class F-2:
Year ended 12/31/2009		20.96		.56		5.06			5.62			(.63	)		-			(.63	)		25.95		27.50			533		.42			.42			2.37
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 12/31/2009		20.93		.50		5.04			5.54			(.55	)		-			(.55	)		25.92		27.12			1,173		.73			.73			2.24
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
Class 529-B:
Year ended 12/31/2009		20.89		.32		5.03			5.35			(.38	)		-			(.38	)		25.86		26.07			201		1.53			1.53			1.45
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
Class 529-C:
Year ended 12/31/2009		20.89		.32		5.03			5.35			(.38	)		-			(.38	)		25.86		26.09			321		1.52			1.52			1.45
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
Class 529-E:
Year ended 12/31/2009		20.89		.43		5.04			5.47			(.49	)		-			(.49	)		25.87		26.77			51		1.02			1.02			1.96
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

Class 529-F-1:
Year ended 12/31/2009	$	20.92	$	.55	$	5.03		$	5.58		$	(.60	)	$	-		$	(.60	)	$	25.90		27.37	%	$	22		.52	%		.52	%		2.44	%
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
Class R-1:
Year ended 12/31/2009		20.87		.34		5.02			5.36			(.40	)		-			(.40	)		25.83		26.18			66		1.44			1.44			1.52
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
Class R-2:
Year ended 12/31/2009		20.88		.32		5.03			5.35			(.38	)		-			(.38	)		25.85		26.08			621		1.52			1.52			1.45
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
Class R-3:
Year ended 12/31/2009		20.92		.44		5.04			5.48			(.50	)		-			(.50	)		25.90		26.76			768		1.00			1.00			1.97
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
Class R-4:
Year ended 12/31/2009		20.93		.50		5.05			5.55			(.57	)		-			(.57	)		25.91		27.16			624		.68			.68			2.21
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
Class R-5:
Year ended 12/31/2009		20.95		.58		5.04			5.62			(.63	)		-			(.63	)		25.94		27.57			2,123		.38			.38			2.62
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
Class R-6:
Period from 5/1/2009 to 12/31/2009		20.70		.40		5.30			5.70			(.45	)		-			(.45	)		25.95		27.76			534		.33	(5)		.33	(5)		2.52	(5)