Unassociated Document

ICA The Investment Company of America®

[photo of trees in a forest] 

Semi-annual report for the six months ended June 30, 2011

ICA seeks long-term growth of capital and income, placing greater emphasis on the potential for capital appreciation and future dividends than on current yield.

The Investment Company of America is one of the 33 American Funds. American Funds is one of the nation’s largest mutual fund families. For 80 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.

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

Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2011:
	1 year			5 years			10 years
Class A shares
Reflecting 5.75% maximum sales charge		18.90	%		0.92	%		3.10	%

The total annual fund operating expense ratio was 0.61% for Class A shares as of the most recent fiscal year-end.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The fund’s investment adviser waived a portion of its management fees from September 1, 2004, through December 31, 2008. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 20 to 23 for details.

The fund’s 30-day yield for Class A shares as of July 31, 2011, reflecting the 5.75% maximum sales charge and calculated in accordance with the U.S. Securities and Exchange Commission formula, was 1.97%.

Results for other share classes can be found on page 28.

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

Fellow shareholders:

[photo of trees in a forest] 

The U.S. economy displayed muted growth during the first six months of the year. Markets were affected by the slowdown, as well as worries over U.S. government deficit issues, still-high unemployment rates, European sovereign debt crises and decreasing growth in China. These macroeconomic concerns kept stock markets in a period of turbulence, at times lifted by general conﬁdence and at times retreating sharply.

The Investment Company of America gained 3.9% for the six-month period ended June 30, 2011, with dividends reinvested. In contrast, the unmanaged Standard & Poor’s 500 Composite Index, a broad measure of the U.S. stock market, returned 6.0% during the same time period.

In June, the Federal Reserve decided to hold interest rates at historic low levels of near zero because of the weak recovery, and it hinted that more government relief could come if growth were to stall. Unemployment remained a thorny problem, with the jobless rate increasing to 9.2% in June from 8.8% in March, and consumer confidence measures indicated shoppers were wary.

Portfolio review

During the six months, many large capitalization stocks did not do as well as some medium- and small-cap companies. ICA’s portfolio has tended to focus on some of the largest U.S. companies and thus during the period it lagged the S&P 500, which has a broader mixture of company sizes. In particular, ICA held many of the largest U.S. financial companies, which hurt the fund. JPMorgan Chase, the fund’s ninth-largest holding, fell 3.5%. Other big U.S. banks detracted from ICA’s result, including Wells Fargo (–9.5%), Bank of America (–17.8%) and Citigroup (–12.0%). Some of the recently beleaguered European banks, however, contributed to the fund’s positive return, with Spain-based Banco Santander up 8.8% and France-based Société Générale up 10.3% during the period.

[Begin Sidebar]

Results at a glance
For the six months ended June 30, 2011, with dividends reinvested

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

Income return		0.93	%		1.01	%		n/a
Capital return		2.96	%		5.00	%		n/a
Total return		3.89	%		6.01	%		5.29	%

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

[End Sidebar]

Large information technology companies were a significant portion of the fund, and some fared poorly during the half-year, although not all. Microsoft, the fund’s second-largest holding, fell 6.9%. Tenth-largest Oracle, however, rose 5.1%. Internet search conglomerate Google fell 14.8% and Internet router maker Cisco Systems was down 22.8%.

Another of ICA’s significant industry concentrations was energy, a relative bright spot. Royal Dutch Shell, the fourth-largest holding, was up 7.0%; ConocoPhillips, the fifth-largest holding, rose 10.4%.

Industrial and materials companies in general helped the fund, including CSX (+21.8%), Union Pacific (+12.7%), United Technologies (+12.4%) and Siemens (+10.8%). Several large media companies such as Comcast (+15.5%) and Time Warner (+13.1%) also helped the fund’s result. Consumer staples companies, often considered “defensive stocks” in a recession, buoyed the fund, such as third-largest holding Philip Morris International (+14.1%), Kraft Foods (+11.8%) and PepsiCo (+7.8%).

Most of the fund, 82.0% of net assets, was invested in U.S. stocks as of the end of the period, roughly the same as the 82.1% six months ago. Portfolio counselors may invest up to 15% in companies domiciled outside the U.S., and they held 11.7% as of the end of the period. ICA had a total of 93.7% of its investments in equity securities (including convertibles), with 0.6% in fixed income and 5.7% in cash and short-term securities.

A look ahead

We remain in an uncertain period, and we are carefully monitoring the difficult macroeconomic issues facing the U.S. and global economies. Stock prices have been swinging dramatically and we expect the market to stay volatile for some time. However, we keep our eyes on individual companies’ long-term business prospects and believe that stock prices will reflect those prospects over time. Despite the market’s gyrations, we think the companies ICA invests in have solid underlying fundamentals, with strong balance sheets and attractive valuations.

We thank you for your continued conﬁdence in our long-term investment philosophy.

Sincerely,

/s/ James B. Lovelace

James B. Lovelace

Vice Chairman

/s/ Donald D. O’Neal

Donald D. O’Neal

President

August 11, 2011

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

Summary investment portfolio June 30, 2011

unaudited

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

[begin pie chart]

Industry sector diversification	(percent of net assets)

Information technology		19.06	%
Energy		12.12
Industrials		11.19
Consumer discretionary		10.94
Consumer staples		10.72
Other industries		28.80
Other securities		1.50
Short-term securities & other assets less liabilities		5.67

[begin pie chart]

							Percent
				Value			of net
Common stocks - 92.83%	Shares				(000	)	assets

Energy - 12.12%
BP PLC (1)		57,790,850		$	425,803
BP PLC (ADR)		3,146,953			139,379			.92	%
Chevron Corp.		6,480,000			666,403			1.08
ConocoPhillips		18,129,140			1,363,130			2.21
EOG Resources, Inc.		3,932,200			411,112			.67
Royal Dutch Shell PLC, Class A (ADR)		16,470,000			1,171,511
Royal Dutch Shell PLC, Class B (1)		13,068,265			466,488
Royal Dutch Shell PLC, Class B (ADR)		2,925,498			209,904			3.00
Schlumberger Ltd.		12,724,999			1,099,440			1.78
Other securities					1,518,966			2.46
					7,472,136			12.12

Materials - 3.54%
Dow Chemical Co.		32,642,500			1,175,130			1.91
Other securities					1,009,505			1.63
					2,184,635			3.54

Industrials - 11.19%
3M Co.		4,834,265			458,530			.74
CSX Corp.		29,493,000			773,306			1.25
General Dynamics Corp.		11,438,300			852,382			1.38
Siemens AG (1)		3,370,000			462,718			.75
Union Pacific Corp.		9,357,500			976,923			1.59
United Technologies Corp.		9,401,852			832,158			1.35
Other securities					2,542,542			4.13
					6,898,559			11.19

Consumer discretionary - 10.94%
Comcast Corp., Class A		23,175,271			587,261
Comcast Corp., Class A, special nonvoting shares		3,000,000			72,690			1.07
General Motors Co. (2)		18,309,900			555,889			.90
Home Depot, Inc.		25,300,000			916,366			1.49
McDonald's Corp.		7,465,000			629,449			1.02
Time Warner Inc.		12,799,000			465,500			.76
Other securities					3,515,720			5.70
					6,742,875			10.94

Consumer staples - 10.72%
Altria Group, Inc.		19,925,000			526,219			.85
CVS/Caremark Corp.		11,000,000			413,380			.67
Kraft Foods Inc., Class A		22,415,868			789,711			1.28
PepsiCo, Inc.		10,641,500			749,481			1.22
Philip Morris International Inc.		32,831,000			2,192,126			3.56
Other securities					1,937,772			3.14
					6,608,689			10.72

Health care - 6.60%
Abbott Laboratories		17,335,000			912,168			1.48
Amgen Inc. (2)		7,870,792			459,261			.75
Merck & Co., Inc.		36,771,429			1,297,664			2.10
Other securities					1,400,434			2.27
					4,069,527			6.60

Financials - 7.46%
Bank of America Corp.		66,440,935			728,193			1.18
Citigroup Inc.		13,880,000			577,963			.94
JPMorgan Chase & Co.		26,065,000			1,067,101			1.73
Wells Fargo & Co.		23,910,000			670,915			1.09
Other securities					1,555,074			2.52
					4,599,246			7.46

Information technology - 19.06%
Apple Inc. (2)		2,080,000			698,194			1.13
Corning Inc.		25,944,820			470,898			.76
Google Inc., Class A (2)		1,107,030			560,578			.91
Hewlett-Packard Co.		22,040,000			802,256			1.30
Intel Corp.		38,629,399			856,027			1.39
International Business Machines Corp.		3,235,000			554,964			.90
Microsoft Corp.		91,435,800			2,377,331			3.86
Nokia Corp. (1)		63,233,329			408,399
Nokia Corp. (ADR)		5,652,400			36,288			.72
Oracle Corp.		30,315,000			997,667			1.62
QUALCOMM Inc.		9,612,000			545,865			.89
Texas Instruments Inc.		22,825,000			749,345			1.22
Yahoo! Inc. (2)		28,491,520			428,512			.70
Other securities					2,262,940			3.66
					11,749,264			19.06

Telecommunication services - 5.43%
AT&T Inc.		90,216,900			2,833,713			4.60
Other securities					513,890			.83
					3,347,603			5.43

Utilities - 3.22%
Dominion Resources, Inc.		10,623,824			512,812			.83
GDF SUEZ (1)		16,595,324			607,337			.99
Other securities					865,857			1.40
					1,986,006			3.22

Miscellaneous - 2.55%
Other common stocks in initial period of acquisition					1,573,290			2.55


Total common stocks (cost: $45,096,335,000)					57,231,830			92.83



	Principal						Percent
	amount			Value			of net
Preferred securities - 0.19%		(000	)		(000	)	assets

Financials - 0.19%
JPMorgan Chase & Co., Series I, 7.90% (3)	$	62,936		$	67,829			.11
Wells Fargo & Co., Series K, 7.98% (3)		23,667			25,679			.04
Other securities					21,611			.04


Total preferred securities (cost: $100,197,000)					115,119			.19



							Percent
				Value			of net
Warrants - 0.00%					(000	)	assets

Financials - 0.00%
Other securities					-			.00

Miscellaneous - 0.00%
Other warrants in initial period of acquisition					773			.00


Total warrants (cost: $13,004,000)					773			.00



							Percent
				Value			of net
Convertible securities - 0.68%	Shares				(000	)	assets

Consumer discretionary - 0.42%
General Motors Co., Series B, 4.75% convertible preferred 2013		5,188,150			252,870			.41
Other securities					7,083			.01
					259,953			.42

Financials - 0.02%
Fannie Mae 5.375% convertible preferred 2032 (2)		820			5,740			.01
Other securities					7,329			.01
					13,069			.02

Other - 0.24%
Other securities					149,092			.24


Total convertible securities (cost: $595,424,000)					422,114			.68



	Principal						Percent
	amount			Value			of net
Bonds & notes - 0.63%		(000	)		(000	)	assets

Energy - 0.01%
Chevron Corp. 4.95% 2019	$	5,000		$	5,596			.01

Industrials - 0.06%
CSX Corp. 6.25% 2015		5,000			5,730			.01
Union Pacific Corp. 6.125% 2020		5,000			5,867			.01
United Technologies Corp. 4.50% 2020		5,475			5,807			.01
Other securities					16,182			.03
					33,586			.06

Consumer discretionary - 0.03%
Comcast Corp. 6.30% 2017		5,120			5,943			.01
Other securities					9,940			.02
					15,883			.03

Consumer staples - 0.02%
Kraft Foods Inc. 2.625% 2013		2,555			2,630			.00
PepsiCo, Inc. 2.50% 2016		2,500			2,529			.00
Other securities					9,537			.02
					14,696			.02

Health care - 0.03%
Abbott Laboratories 5.125% 2019		2,500			2,755			.00
Other securities					18,506			.03
					21,261			.03

Financials - 0.09%
Citigroup Inc. 4.587% 2015		1,387			1,460			.00
Other securities					54,658			.09
					56,118			.09

Telecommunication services - 0.01%
AT&T Inc. 4.85% 2014		5,000			5,434			.01
Other securities					2,805			.00
					8,239			.01

Mortgage-backed obligations (4) - 0.08%
Fannie Mae 3.50%-6.00% 2025-2041		45,776			47,441			.08

Bonds & notes of U.S. government & government agencies - 0.28%
Freddie Mac 2.125%-5.00% 2012-2014		20,000			21,384			.03
Other securities					151,197			.25
					172,581			.28

Other - 0.02%
Other securities					10,454			.02


Total bonds & notes (cost: $363,278,000)					385,855			.63



	Principal						Percent
	amount			Value			of net
Short-term securities - 5.80%		(000	)		(000	)	assets


Abbott Laboratories 0.13% due 8/9/2011 (5)	$	40,000		$	39,996			.06
Ciesco LLC 0.19%-0.20% due 8/15-8/23/2011		52,800			52,791			.09
Fannie Mae 0.102%-0.321% due 8/1/2011-1/9/2012		772,886			772,713			1.25
Federal Home Loan Bank 0.045%-0.331% due 8/4/2011-2/23/2012		500,900			500,687			.81
Freddie Mac 0.10%-0.301% due 7/19-12/19/2011		663,493			663,360			1.08
Hewlett-Packard Co. 0.09% due 7/18/2011 (5)		50,000			49,998			.08
Jupiter Securitization Co., LLC 0.13%-0.20% due 7/8-7/28/2011 (5)		139,100			139,091			.23
PepsiCo Inc. 0.09%-0.11% due 7/18-9/2/2011 (5)		52,000			51,995			.08
U.S. Treasury Bills 0.153%-0.278% due 7/7/2011-1/12/2012		456,500			456,452			.74
Variable Funding Capital Company LLC 0.15% due 7/22/2011 (5)		30,000			29,997			.05
Other securities					818,829			1.33


Total short-term securities (cost: $3,575,150,000)					3,575,909			5.80


Total investment securities (cost: $49,743,388,000)					61,731,600			100.13
Other assets less liabilities					(78,260	)		(.13	)

Net assets				$	61,653,340			100.00	%

As permitted by U.S. Securities and Exchange Commission regulations, "Miscellaneous" securities include holdings in their first year of acquisition that have not previously been publicly disclosed.

"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio.

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

(1) Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in "Miscellaneous" and "Other securities," was $5,068,257,000, which represented 8.22% of the net assets of the fund. This amount includes $5,061,174,000 related to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

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

(3) Coupon rate may change periodically.

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

(5) Acquired 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, including those in "Other securities," was $898,174,000, which represented 1.46% of the net assets of the fund.

Key to abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities			unaudited
at June 30, 2011	(dollars in thousands)

Assets:
Investment securities, at value (cost: $49,743,388)			$	61,731,600
Cash denominated in currencies other than U.S. dollars
(cost: $78)				78
Cash				135
Receivables for:
Sales of investments	$	214,969
Sales of fund's shares		35,814
Dividends and interest		116,409		367,192
				62,099,005
Liabilities:
Payables for:
Purchases of investments		250,409
Repurchases of fund's shares		155,597
Investment advisory services		12,000
Services provided by related parties		20,835
Trustees' deferred compensation		6,246
Other		578		445,665
Net assets at June 30, 2011			$	61,653,340

Net assets consist of:
Capital paid in on shares of beneficial interest			$	49,512,217
Undistributed net investment income				229,648
Accumulated net realized loss				(76,935	)
Net unrealized appreciation				11,988,410
Net assets at June 30, 2011			$	61,653,340

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

Shares of beneficial interest issued and outstanding (no stated par value) -
unlimited shares authorized (2,127,845 total shares outstanding)
		Net assets		Shares outstanding		Net asset value per share
Class A		$	48,030,997		1,656,827	$	28.99
Class B			1,160,308		40,180		28.88
Class C			2,113,751		73,407		28.80
Class F-1			1,788,117		61,772		28.95
Class F-2			693,838		23,939		28.98
Class 529-A			1,445,851		49,943		28.95
Class 529-B			144,665		5,007		28.89
Class 529-C			365,842		12,665		28.89
Class 529-E			59,126		2,046		28.89
Class 529-F-1			32,112		1,110		28.93
Class R-1			80,082		2,776		28.85
Class R-2			650,997		22,545		28.88
Class R-3			837,665		28,959		28.93
Class R-4			706,470		24,408		28.94
Class R-5			936,796		32,325		28.98
Class R-6			2,606,723		89,936		28.98

See Notes to Financial Statements

Statement of operations				unaudited
for the six months ended June 30, 2011	(dollars in thousands)

Investment income:
Income:
Dividends (net of non-U.S. taxes of $24,460)	$	807,246
Interest		22,082		$	829,328

Fees and expenses*:
Investment advisory services		75,052
Distribution services		86,190
Transfer agent services		29,307
Administrative services		9,759
Reports to shareholders		1,158
Registration statement and prospectus		417
Trustees' compensation		921
Auditing and legal		31
Custodian		464
State and local taxes		441
Other		1,404			205,144
Net investment income					624,184

Net realized gain and unrealized appreciation
on investments and currency:
Net realized gain (loss) on:
Investments		1,614,339
Currency transactions		(3,528	)		1,610,811
Net unrealized appreciation (depreciation) on:
Investments		150,235
Currency translations		(420	)		149,815
Net realized gain and unrealized appreciation
on investments and currency					1,760,626
Net increase in net assets resulting
from operations				$	2,384,810

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

See Notes to Financial Statements



Statements of changes in net assets
		(dollars in thousands)
	Six months			Year ended
	ended June 30,			December 31,
		2011†			2010
Operations:
Net investment income	$	624,184		$	1,228,129
Net realized gain on investments and currency transactions		1,610,811			1,762,196
Net unrealized appreciation on investments and currency translations		149,815			3,079,556
Net increase in net assets resulting from operations		2,384,810			6,069,881

Dividends paid to shareholders from net investment income		(544,781	)		(1,235,556	)

Net capital share transactions		(2,274,531	)		(4,388,099	)

Total (decrease) increase in net assets		(434,502	)		446,226

Net assets:
Beginning of period		62,087,842			61,641,616
End of period (including undistributed
net investment income: $229,648 and $150,245, respectively)	$	61,653,340		$	62,087,842

†Unaudited.

See Notes to Financial Statements

Notes to financial statements

unaudited

1.	Organization

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

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

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

*Class B and 529-B shares of the fund are not available for purchase.

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

2.	Significant accounting policies

The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The fund follows the significant accounting policies described below, as well as the valuation policies described in the next section on valuation.

Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

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

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

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

Valuation

The fund’s investments are reported at fair value as defined by accounting principles generally accepted in the United States of America. The fund generally determines the net asset value of each share class as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

Methods and inputs – The fund uses the following methods and inputs to establish the fair value of its assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

Equity securities 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 on which the security trades.

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 3:00 p.m. New York time, or relevant local time for securities trading outside U.S. time zones, from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.

Fixed-income class	Examples of standard inputs
All	Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, 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, financial or collateral performance and other reference data (collectively referred to as “standard inputs”)
Corporate bonds & notes; convertible securities	Standard inputs and underlying equity of the issuer
Bonds & notes of governments & government agencies	Standard inputs and interest rate volatilities
Mortgage-backed; asset-backed obligations	Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information

Where the investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income 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, 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. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates fair value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days.

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

Classifications - The fund classifies its assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following table presents the fund’s valuation levels as of June 30, 2011 (dollars in thousands):

Investment securities:	Level 1		Level 2			Level 3		Total
Common stocks:
Energy	$	6,254,352	$	1,217,784	*	$	-	$	7,472,136
Materials		1,836,381		348,254	*		-		2,184,635
Industrials		6,435,841		462,718	*		-		6,898,559
Consumer discretionary		6,425,131		317,744	*		-		6,742,875
Consumer staples		6,608,689		-			-		6,608,689
Health care		3,825,390		244,137	*		-		4,069,527
Financials		4,100,079		499,167	*		-		4,599,246
Information technology		11,120,769		628,495	*		-		11,749,264
Telecommunication services		3,215,283		132,320	*		-		3,347,603
Utilites		1,378,669		607,337	*		-		1,986,006
Miscellaneous		970,072		603,218	*		-		1,573,290
Preferred stocks		-		115,119			-		115,119
Warrants		773		-			-		773
Convertible securities		341,891		80,223			-		422,114
Bonds & notes		-		385,855			-		385,855
Short-term securities		-		3,575,909			-		3,575,909
Total	$	52,513,320	$	9,218,280		$	-	$	61,731,600

(*) Includes certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading; therefore, $5,061,174,000 of investment securities were classified as Level 2 instead of Level 1.

4.	Risk factors

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

Market conditions — The prices of, and the income generated by, the common stocks and other securities held by the fund may decline due to market conditions and other factors, including those directly involving the issuers of securities held by the fund.

Investing in income-oriented stocks — Income provided by the fund may be reduced by changes in the dividend policies of, and the capital resources available at, the companies in which the fund invests.

Investing in growth-oriented stocks — Growth-oriented stocks may involve larger price swings and greater potential for loss than other types of investments.

Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations outside the U.S., may lose value because of political, social or economic developments in the country or region in which the issuer operates. These securities may also lose value due to changes in the exchange rate of the country’s currency against the U.S. dollar. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different settlement and accounting practices and different regulatory, legal and reporting standards than those in the U.S.

Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the methods and analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.

5.	Taxation and distributions

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

As of and during the period ended June 30, 2011, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities or state tax authorities for tax years before 2007.

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

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to different treatment for items such as currency gains and losses; short-term capital gains and losses; deferred expenses; cost of investments sold; net capital losses; and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.

The components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2010, the components of distributable earnings on a tax basis were as follows:

(dollars in thousands)
Undistributed ordinary income	$	307,318
Post-October currency loss deferrals (realized during the period November 1, 2010, through December 31, 2010)*		(378	)
Capital loss carryforward expiring 2017†		(1,855,257	)

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

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after December 31, 2010, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

As of June 30, 2011, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

(dollars in thousands)
Gross unrealized appreciation on investment securities	$	15,879,149
Gross unrealized depreciation on investment securities		(3,907,119	)
Net unrealized appreciation on investment securities		11,972,030
Cost of investment securities		49,759,570

Tax-basis distributions paid to shareholders from ordinary income were as follows (dollars in thousands):

Share class	Six months ended June 30, 2011		Year ended December 31, 2010
Class A	$	438,081	$	1,005,853
Class B		6,606		21,001
Class C		10,902		28,562
Class F-1		14,904		28,517
Class F-2		6,942		13,921
Class 529-A		12,281		25,697
Class 529-B		717		2,163
Class 529-C		1,745		4,217
Class 529-E		427		934
Class 529-F-1		297		554
Class R-1		405		982
Class R-2		3,386		8,218
Class R-3		6,149		13,829
Class R-4		6,175		13,162
Class R-5		9,569		20,363
Class R-6		26,195		47,583
Total	$	544,781	$	1,235,556

6.	Fees and transactions with related parties

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

Investment advisory services – The fund has an investment advisory and service agreement with CRMC that provides for monthly fees accrued daily. These fees are based on a series of decreasing annual rates beginning with 0.390% on the first $1 billion of daily net assets and decreasing to 0.219% on such assets in excess of $89 billion. For the six months ended June 30, 2011, the investment advisory services fee was $75,052,000, which was equivalent to an annualized rate of 0.241% of average daily net assets.

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

Distribution services – The fund has plans of distribution for all share classes, except Classes F-2, R-5 and R-6. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted on the following page. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Classes A and 529-A, distribution-related expenses include the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of June 30, 2011, there were no unreimbursed expenses subject to reimbursement for Classes A or 529-A.

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

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

Administrative services – The fund has an administrative services agreement with CRMC for all share classes, except Classes A and B, to provide certain services, including transfer agent and recordkeeping services; coordinating, monitoring, assisting and overseeing third-party service providers; and educating advisers and shareholders about the impact of market-related events, tax laws affecting investments, retirement plan restrictions, exchange limitations and other related matters. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5 and 0.05% for Class R-6) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services.

Each 529 share class is subject to an additional administrative services fee payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. The quarterly fee is based on a series of decreasing annual rates beginning with 0.10% on the first $30 billion of the net assets invested in Class 529 shares of the American Funds and decreasing to 0.06% on such assets between $120 billion and $150 billion. The fee for any given calendar quarter is accrued and calculated on the basis of the average net assets of Class 529 shares of the American Funds for the last month of the prior calendar quarter. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described on the previous page for the six months ended June 30, 2011, were as follows (dollars in thousands):

					Administrative services
Share class	Distribution services		Transfer agent services		CRMC administrative services		Transfer agent services		Commonwealth of Virginia administrative services
Class A	$	56,569	$	28,530	Not applicable		Not applicable		Not applicable
Class B		6,490		777	Not applicable		Not applicable		Not applicable
Class C		10,925	Included in administrative services		$	1,603	$	237	Not applicable
Class F-1		2,083				1,253		63	Not applicable
Class F-2	Not applicable					518		11	Not applicable
Class 529-A		1,549				702		114	$	707
Class 529-B		772				76		24		77
Class 529-C		1,801				179		46		181
Class 529-E		146				28		5		29
Class 529-F-1		-				15		2		15
Class R-1		396				53		9	Not applicable
Class R-2		2,473				486		837	Not applicable
Class R-3		2,113				615		271	Not applicable
Class R-4		873				506		11	Not applicable
Class R-5	Not applicable					456		4	Not applicable
Class R-6	Not applicable					625		1	Not applicable
Total	$	86,190	$	29,307	$	7,115	$	1,635	$	1,009

Trustees’ deferred compensation – Trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation of $921,000, shown on the accompanying financial statements, includes $275,000 in current fees (either paid in cash or deferred) and a net increase of $646,000 in the value of the deferred amounts.

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

Warrants

As of June 30, 2011, the fund had warrants outstanding which may be exercised at any time for the purchase of 818,780 Class A shares at approximately $5.24 per share. If these warrants had been exercised as of June 30, 2011, the net asset value of each share class would have been reduced by less than $0.01 per share. No warrants were exercised during the six months ended June 30, 2011.

8.	Capital share transactions

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

	Sales(*)				Reinvestments of dividends and distributions				Repurchases(*)						Net (decrease) increase
Share class	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Six months ended June 30, 2011
Class A	$	1,502,197		51,859	$	415,981		14,555	$	(4,123,146	)		(142,233	)	$	(2,204,968	)		(75,819	)
Class B		8,019		278		6,447		226		(326,270	)		(11,325	)		(311,804	)		(10,821	)
Class C		92,802		3,223		10,455		368		(266,815	)		(9,271	)		(163,558	)		(5,680	)
Class F-1		391,651		13,515		14,130		495		(221,686	)		(7,653	)		184,095			6,357
Class F-2		80,613		2,782		4,356		153		(79,877	)		(2,765	)		5,092			170
Class 529-A		103,205		3,571		12,278		430		(71,529	)		(2,472	)		43,954			1,529
Class 529-B		1,195		41		714		25		(27,070	)		(941	)		(25,161	)		(875	)
Class 529-C		24,557		851		1,744		61		(23,138	)		(802	)		3,163			110
Class 529-E		3,580		124		427		15		(3,516	)		(122	)		491			17
Class 529-F-1		5,662		194		297		11		(2,091	)		(72	)		3,868			133
Class R-1		10,152		353		403		14		(10,993	)		(382	)		(438	)		(15	)
Class R-2		75,062		2,598		3,384		119		(100,977	)		(3,497	)		(22,531	)		(780	)
Class R-3		114,899		3,971		6,147		215		(135,228	)		(4,657	)		(14,182	)		(471	)
Class R-4		107,641		3,720		6,171		216		(108,502	)		(3,742	)		5,310			194
Class R-5		94,871		3,278		9,556		335		(89,778	)		(3,098	)		14,649			515
Class R-6		319,586		11,008		26,186		917		(138,283	)		(4,767	)		207,489			7,158
Total net increase (decrease)	$	2,935,692		101,366	$	518,676		18,155	$	(5,728,899	)		(197,799	)	$	(2,274,531	)		(78,278	)

Year ended December 31, 2010
Class A	$	3,024,163		115,953	$	950,500		36,358	$	(8,132,665	)		(313,061	)	$	(4,158,002	)		(160,750	)
Class B		20,991		810		20,489		787		(742,985	)		(28,631	)		(701,505	)		(27,034	)
Class C		194,001		7,500		27,267		1,047		(423,553	)		(16,460	)		(202,285	)		(7,913	)
Class F-1		645,213		24,850		26,422		1,009		(440,996	)		(17,109	)		230,639			8,750
Class F-2		188,724		7,288		8,483		324		(114,003	)		(4,373	)		83,204			3,239
Class 529-A		190,625		7,307		25,691		982		(133,020	)		(5,132	)		83,296			3,157
Class 529-B		3,130		121		2,162		83		(54,629	)		(2,101	)		(49,337	)		(1,897	)
Class 529-C		43,489		1,673		4,216		162		(43,434	)		(1,681	)		4,271			154
Class 529-E		6,922		267		934		36		(6,078	)		(235	)		1,778			68
Class 529-F-1		6,732		259		553		21		(3,786	)		(144	)		3,499			136
Class R-1		21,944		847		980		37		(16,667	)		(645	)		6,257			239
Class R-2		151,069		5,829		8,213		314		(176,798	)		(6,843	)		(17,516	)		(700	)
Class R-3		204,939		7,917		13,825		529		(224,863	)		(8,682	)		(6,099	)		(236	)
Class R-4		179,309		7,037		13,153		503		(190,929	)		(7,405	)		1,533			135
Class R-5		135,775		5,217		20,244		775		(1,463,855	)		(56,008	)		(1,307,836	)		(50,016	)
Class R-6		1,764,498		67,113		47,582		1,820		(172,076	)		(6,723	)		1,640,004			62,210
Total net increase (decrease)	$	6,781,524		259,988	$	1,170,714		44,787	$	(12,340,337	)		(475,233	)	$	(4,388,099	)		(170,458	)

* Includes exchanges between share classes of the fund.

9.	Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $7,751,312,000 and $10,100,111,000, respectively, during the six months ended June 30, 2011.

Financial highlights(1)

				Income (loss) from investment operations(2)								Dividends and distributions
		Net asset value, beginning of period		Net investment income		Net gains (losses) on securities (both realized and unrealized)			Total from investment operations			Dividends (from net investment income)			Distributions (from capital gains)			Total dividends and distributions			Net asset value, end of period		Total return(3)(4)			Net assets, end of period (in millions)		Ratio of expenses to average net assets before reimbursements/ waivers			Ratio of expenses to average net assets after reimbursements/ waivers(4)			Ratio of net income to average net assets(4)

Class A:	Six months ended 6/30/2011(5)	$	28.16	$	.30	$	.79		$	1.09		$	(.26	)	$	-		$	(.26	)	$	28.99		3.89	%	$	48,031		.61	%(6)		.61	%(6)		2.05	%(6)
	Year ended 12/31/2010		25.95		.55		2.22			2.77			(.56	)		-			(.56	)		28.16		10.86			48,789		.61			.61			2.12
	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

Class B:	Six months ended 6/30/2011(5)		28.05		.18		.80			.98			(.15	)		-			(.15	)		28.88		3.50			1,160		1.38	(6)		1.38	(6)		1.26	(6)
	Year ended 12/31/2010		25.84		.35		2.21			2.56			(.35	)		-			(.35	)		28.05		10.03			1,431		1.38			1.38			1.36
	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

Class C:	Six months ended 6/30/2011(5)		27.97		.17		.80			.97			(.14	)		-			(.14	)		28.80		3.49			2,114		1.42	(6)		1.42	(6)		1.23	(6)
	Year ended 12/31/2010		25.78		.34		2.20			2.54			(.35	)		-			(.35	)		27.97		9.95			2,212		1.43			1.43			1.31
	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

Class F-1:	Six months ended 6/30/2011(5)		28.12		.29		.79			1.08			(.25	)		-			(.25	)		28.95		3.87			1,788		.66	(6)		.66	(6)		2.01	(6)
	Year ended 12/31/2010		25.92		.54		2.21			2.75			(.55	)		-			(.55	)		28.12		10.78			1,558		.66			.66			2.07
	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

Class F-2:	Six months ended 6/30/2011(5)		28.15		.33		.79			1.12			(.29	)		-			(.29	)		28.98		3.99			694		.41	(6)		.41	(6)		2.26	(6)
	Year ended 12/31/2010		25.95		.61		2.21			2.82			(.62	)		-			(.62	)		28.15		11.07			669		.39			.39			2.34
	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:	Six months ended 6/30/2011(5)		28.12		.28		.80			1.08			(.25	)		-			(.25	)		28.95		3.85			1,446		.69	(6)		.69	(6)		1.98	(6)
	Year ended 12/31/2010		25.92		.53		2.22			2.75			(.55	)		-			(.55	)		28.12		10.77			1,362		.68			.68			2.05
	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

Class 529-B:	Six months ended 6/30/2011(5)		28.06		.16		.80			.96			(.13	)		-			(.13	)		28.89		3.45			145		1.48	(6)		1.48	(6)		1.16	(6)
	Year ended 12/31/2010		25.86		.33		2.20			2.53			(.33	)		-			(.33	)		28.06		9.87			165		1.48			1.48			1.26
	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

Class 529-C:	Six months ended 6/30/2011(5)		28.06		.17		.80			.97			(.14	)		-			(.14	)		28.89		3.46			366		1.48	(6)		1.48	(6)		1.19	(6)
	Year ended 12/31/2010		25.86		.33		2.21			2.54			(.34	)		-			(.34	)		28.06		9.91			352		1.47			1.47			1.26
	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

Class 529-E:	Six months ended 6/30/2011(5)	$	28.07	$	.24	$	.79		$	1.03		$	(.21	)	$	-		$	(.21	)	$	28.89		3.68	%	$	59		.97	%(6)		.97	%(6)		1.70	%(6)
	Year ended 12/31/2010		25.87		.46		2.21			2.67			(.47	)		-			(.47	)		28.07		10.46			57		.97			.97			1.76
	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

Class 529-F-1:	Six months ended 6/30/2011(5)		28.10		.32		.79			1.11			(.28	)		-			(.28	)		28.93		3.97			32		.47	(6)		.47	(6)		2.21	(6)
	Year ended 12/31/2010		25.90		.59		2.21			2.80			(.60	)		-			(.60	)		28.10		11.00			28		.47			.47			2.26
	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

Class R-1:	Six months ended 6/30/2011(5)		28.02		.18		.80			.98			(.15	)		-			(.15	)		28.85		3.49			80		1.41	(6)		1.41	(6)		1.25	(6)
	Year ended 12/31/2010		25.83		.35		2.20			2.55			(.36	)		-			(.36	)		28.02		9.96			78		1.41			1.41			1.32
	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

Class R-2:	Six months ended 6/30/2011(5)		28.05		.18		.80			.98			(.15	)		-			(.15	)		28.88		3.49			651		1.40	(6)		1.40	(6)		1.26	(6)
	Year ended 12/31/2010		25.85		.34		2.21			2.55			(.35	)		-			(.35	)		28.05		9.96			654		1.44			1.44			1.30
	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

Class R-3:	Six months ended 6/30/2011(5)		28.10		.24		.80			1.04			(.21	)		-			(.21	)		28.93		3.71			837		.96	(6)		.96	(6)		1.70	(6)
	Year ended 12/31/2010		25.90		.46		2.21			2.67			(.47	)		-			(.47	)		28.10		10.45			827		.97			.97			1.77
	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

Class R-4:	Six months ended 6/30/2011(5)		28.12		.28		.79			1.07			(.25	)		-			(.25	)		28.94		3.84			706		.65	(6)		.65	(6)		2.01	(6)
	Year ended 12/31/2010		25.91		.54		2.22			2.76			(.55	)		-			(.55	)		28.12		10.82			681		.65			.65			2.08
	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

Class R-5:	Six months ended 6/30/2011(5)		28.15		.34		.79			1.13			(.30	)		-			(.30	)		28.98		4.02			937		.35	(6)		.35	(6)		2.31	(6)
	Year ended 12/31/2010		25.94		.61		2.23			2.84			(.63	)		-			(.63	)		28.15		11.14			895		.35			.35			2.33
	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

Class R-6:	Six months ended 6/30/2011(5)		28.15		.34		.79			1.13			(.30	)		-			(.30	)		28.98		4.05			2,607		.30	(6)		.30	(6)		2.37	(6)
	Year ended 12/31/2010		25.95		.63		2.21			2.84			(.64	)		-			(.64	)		28.15		11.16			2,330		.30			.30			2.45
	Period from 5/1/2009 to 12/31/2009		20.70		.40		5.30			5.70			(.45	)		-			(.45	)		25.95		27.76			534		.33	(6)		.33	(6)		2.52	(6)

	Six months ended June 30,			Year ended December 31
	2011(5)			2010			2009			2008			2007			2006

Portfolio turnover rate for all share classes		13	%		23	%		28	%		31	%		22	%		20	%

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

(2)Based on average shares outstanding.

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

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

(5)Unaudited.

(6)Annualized.

See Notes to Financial Statements

Expense example

unaudited

As a shareholder of the fund, you incur two types of costs: (1) transaction costs, such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads), and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period (January 1, 2011, through June 30, 2011).

Actual expenses:

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

Hypothetical example for comparison purposes:

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

Notes:

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

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

	Beginning account value 1/1/2011		Ending account value 6/30/2011		Expenses paid during period*		Annualized expense ratio

Class A -- actual return	$	1,000.00	$	1,038.86	$	3.08		.61	%
Class A -- assumed 5% return		1,000.00		1,021.77		3.06		.61
Class B -- actual return		1,000.00		1,034.97		6.96		1.38
Class B -- assumed 5% return		1,000.00		1,017.95		6.90		1.38
Class C -- actual return		1,000.00		1,034.90		7.16		1.42
Class C -- assumed 5% return		1,000.00		1,017.75		7.10		1.42
Class F-1 -- actual return		1,000.00		1,038.67		3.34		.66
Class F-1 -- assumed 5% return		1,000.00		1,021.52		3.31		.66
Class F-2 -- actual return		1,000.00		1,039.95		2.07		.41
Class F-2 -- assumed 5% return		1,000.00		1,022.76		2.06		.41
Class 529-A -- actual return		1,000.00		1,038.52		3.49		.69
Class 529-A -- assumed 5% return		1,000.00		1,021.37		3.46		.69
Class 529-B -- actual return		1,000.00		1,034.46		7.47		1.48
Class 529-B -- assumed 5% return		1,000.00		1,017.46		7.40		1.48
Class 529-C -- actual return		1,000.00		1,034.55		7.47		1.48
Class 529-C -- assumed 5% return		1,000.00		1,017.46		7.40		1.48
Class 529-E -- actual return		1,000.00		1,036.78		4.90		.97
Class 529-E -- assumed 5% return		1,000.00		1,019.98		4.86		.97
Class 529-F-1 -- actual return		1,000.00		1,039.72		2.38		.47
Class 529-F-1 -- assumed 5% return		1,000.00		1,022.46		2.36		.47
Class R-1 -- actual return		1,000.00		1,034.91		7.11		1.41
Class R-1 -- assumed 5% return		1,000.00		1,017.80		7.05		1.41
Class R-2 -- actual return		1,000.00		1,034.94		7.06		1.40
Class R-2 -- assumed 5% return		1,000.00		1,017.85		7.00		1.40
Class R-3 -- actual return		1,000.00		1,037.11		4.85		.96
Class R-3 -- assumed 5% return		1,000.00		1,020.03		4.81		.96
Class R-4 -- actual return		1,000.00		1,038.37		3.29		.65
Class R-4 -- assumed 5% return		1,000.00		1,021.57		3.26		.65
Class R-5 -- actual return		1,000.00		1,040.18		1.77		.35
Class R-5 -- assumed 5% return		1,000.00		1,023.06		1.76		.35
Class R-6 -- actual return		1,000.00		1,040.47		1.52		.30
Class R-6 -- assumed 5% return		1,000.00		1,023.31		1.51		.30

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

Approval of Investment Advisory and Service Agreement

The fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through March 31, 2012. The board approved the agreement following the recommendation of the fund’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The board and the committee determined that the fund’s advisory fee structure was fair and reasonable in relation to the services provided and that approving the agreement was in the best interests of the fund and its shareholders.

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

1. Nature, extent and quality of services

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

2. Investment results

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

3. Advisory fees and total expenses

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

4. Ancillary benefits

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

5. Adviser financial information

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

Other share class results

unaudited

Classes B, C, F and 529

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

Average annual total returns for periods ended June 30, 2011:

	1 year			5 years			10 years1/ Life of class

Class B shares2
Reflecting applicable contingent deferred sales charge
(CDSC), maximum of 5%, payable only if shares
are sold within six years of purchase		20.23	%		1.00	%		3.07	%
Not reflecting CDSC		25.23			1.33			3.07

Class C shares
Reflecting CDSC, maximum of 1%, payable only if shares
are sold within one year of purchase		24.18			1.29			2.85
Not reflecting CDSC		25.18			1.29			2.85

Class F-1 shares3
Not reflecting annual asset-based fee charged by
sponsoring firm		26.14			2.09			3.65


Class F-2 shares3 — first sold 8/1/08
Not reflecting annual asset-based fee charged by
sponsoring firm		26.42			—			3.28

Class 529-A shares4 — first sold 2/15/02
Reflecting 5.75% maximum sales charge		18.79			0.84			3.84
Not reflecting maximum sales charge		26.04			2.04			4.50

Class 529-B shares2,4 — first sold 2/15/02
Reflecting applicable CDSC, maximum of 5%, payable
only if shares are sold within six years of purchase		20.03			0.88			3.75
Not reflecting CDSC		25.03			1.22			3.75

Class 529-C shares4 — first sold 2/19/02
Reflecting CDSC, maximum of 1%, payable only if shares
are sold within one year of purchase		24.08			1.23			3.81
Not reflecting CDSC		25.08			1.23			3.81

Class 529-E shares3,4 — first sold 3/1/02		25.71			1.74			3.94

Class 529-F-1 shares3,4 — first sold 9/16/02
Not reflecting annual asset-based fee charged by
sponsoring firm		26.34			2.25			6.53

1Applicable to Classes B, C and F-1 shares only. All other share classes reflect results for the life of the class.

2These shares are not available for purchase.

3These shares are sold without any initial or contingent deferred sales charge.

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

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

Offices

Offices of the fund and of the investment adviser

Capital Research and Management Company

333 South Hope Street

Los Angeles, CA 90071-1406

6455 Irvine Center Drive

Irvine, CA 92618

Transfer agent for shareholder accounts

American Funds Service Company

(Write to the address near you.)

P.O. Box 6007

Indianapolis, IN 46206-6007

P.O. Box 2280

Norfolk, VA 23501-2280

Custodian of assets

JPMorgan Chase Bank

270 Park Avenue

New York, NY 10017-2070

Counsel

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, CA 90071-2899

Independent registered public accounting firm

Deloitte & Touche LLP

695 Town Center Drive

Suite 1200

Costa Mesa, CA 92626-7188

Principal underwriter

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, CA 90071-1406

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

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

A complete June 30, 2011, portfolio of The Investment Company of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).

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

This report is for the information of shareholders of The Investment Company of America, but it also may be used as sales literature when preceded or accompanied by the current prospectus or summary prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after September 30, 2011, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

What makes American Funds different?

For 80 years, we have followed a consistent philosophy to benefit our investors. Our 33 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 million shareholder accounts.

Our unique combination of strengths includes these five factors:

•A long-term, value-oriented approach

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

•An extensive global research effort

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

•The multiple portfolio counselor system

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

•Experienced investment professionals

American Funds portfolio counselors have an average of 27 years of investment experience, providing a depth of knowledge and broad perspective that few organizations have.

•A commitment to low management fees

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

American Funds span a range of investment objectives

•Growth funds

AMCAP Fund®

EuroPacific Growth Fund®

The Growth Fund of America®

The New Economy Fund®

New Perspective Fund®

New World Fund®

SMALLCAP World Fund®

•Growth-and-income funds

American Mutual Fund®

Capital World Growth and Income FundSM

Fundamental InvestorsSM

International Growth and Income FundSM

>The Investment Company of America®

Washington Mutual Investors FundSM

•Equity-income funds

Capital Income Builder®

The Income Fund of America®

•Balanced funds

American Balanced Fund®

American Funds Global Balanced FundSM

•Bond funds

American Funds Mortgage FundSM

American High-Income TrustSM

The Bond Fund of AmericaSM

Capital World Bond Fund®

Intermediate Bond Fund of America®

Short-Term Bond Fund of AmericaSM

U.S. Government Securities FundSM

•Tax-exempt bond funds

American Funds Short-Term Tax-Exempt Bond FundSM

American High-Income Municipal Bond Fund®

Limited Term Tax-Exempt Bond Fund of AmericaSM

The Tax-Exempt Bond Fund of America®

State-specific tax-exempt funds

American Funds Tax-Exempt Fund of New YorkSM

The Tax-Exempt Fund of California®

The Tax-Exempt Fund of Maryland®

The Tax-Exempt Fund of Virginia®

•Money market fund

American Funds Money Market Fund®

•American Funds Target Date Retirement Series®

The Capital Group Companies

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

Lit. No. MFGESR-904-0811P

Litho in USA BBC/RRD/8087-S28725

Printed on paper containing 10% post-consumer waste

Printed with inks containing soy and/or vegetable oil

ITEM 2 – Code of Ethics

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

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

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

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

	THE INVESTMENT COMPANY OF AMERICA

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

	Date: August 31, 2011

Common stocks — 92.83%	Shares			Value (000)

ENERGY — 12.12%
Apache Corp.		2,740,000		$	338,089
Baker Hughes Inc.		5,135,000			372,596
BG Group PLC1		1,850,000			41,987
BP PLC1		57,790,850			425,803
BP PLC (ADR)		3,146,953			139,379
Canadian Natural Resources, Ltd.		2,185,000			91,596
Chevron Corp.		6,480,000			666,403
ConocoPhillips		18,129,140			1,363,130
Devon Energy Corp.		2,690,000			211,999
Diamond Offshore Drilling, Inc.		2,025,000			142,580
Eni SpA1		4,640,000			109,998
Eni SpA (ADR)		770,000			36,613
EOG Resources, Inc.		3,932,200			411,112
Royal Dutch Shell PLC, Class A (ADR)		16,470,000			1,171,511
Royal Dutch Shell PLC, Class B1		13,068,265			466,488
Royal Dutch Shell PLC, Class B (ADR)		2,925,498			209,904
Schlumberger Ltd.		12,724,999			1,099,440
TOTAL SA1		3,000,000			173,508
					7,472,136

MATERIALS — 3.54%
Akzo Nobel NV1		425,000			26,810
ArcelorMittal1		7,540,000			262,371
Barrick Gold Corp.		4,975,000			225,318
Dow Chemical Co.		32,642,500			1,175,130
MeadWestvaco Corp.		4,085,000			136,071
POSCO1		136,000			59,073
Praxair, Inc.		999,500			108,336
United States Steel Corp.		4,160,000			191,526
					2,184,635

INDUSTRIALS — 11.19%
3M Co.		4,834,265			458,530
CSX Corp.		29,493,000			773,306
Danaher Corp.		1,730,000			91,673
Deere & Co.		2,800,000			230,860
General Dynamics Corp.		11,438,300			852,382
General Electric Co.		13,875,000			261,683
Illinois Tool Works Inc.		6,400,000			361,536
Lockheed Martin Corp.		2,790,820			225,973
Masco Corp.		14,358,069			172,728
Norfolk Southern Corp.		580,000			43,459
Pitney Bowes Inc.		350,551			8,059
R.R. Donnelley & Sons Co.		6,100,000			119,621
Raytheon Co.		2,399,800			119,630
Republic Services, Inc.		5,500,000			169,675
Siemens AG1		3,370,000			462,718
Southwest Airlines Co.		13,000,000			148,460
Tyco International Ltd.		2,115,000			104,544
Union Pacific Corp.		9,357,500			976,923
United Parcel Service, Inc., Class B		2,250,000			164,093
United Technologies Corp.		9,401,852			832,158
Waste Management, Inc.		8,600,700			320,548
					6,898,559

CONSUMER DISCRETIONARY — 10.94%
Best Buy Co., Inc.		4,500,000			141,345
Carnival Corp., units		3,600,000			135,468
Comcast Corp., Class A		23,175,271			587,261
Comcast Corp., Class A, special nonvoting shares		3,000,000			72,690
Daimler AG1		960,000			72,250
DIRECTV, Class A2		6,500,000			330,330
General Motors Co.2		18,309,900			555,889
Harley-Davidson, Inc.		3,620,000			148,311
Home Depot, Inc.		25,300,000			916,366
Honda Motor Co., Ltd.1		5,550,000			213,917
Johnson Controls, Inc.		7,422,400			309,217
Kohl’s Corp.		6,744,000			337,267
Limited Brands, Inc.		5,042,743			193,893
Lowe’s Companies, Inc.		10,500,000			244,755
McDonald’s Corp.		7,465,000			629,449
News Corp., Class A		14,440,000			255,588
NIKE, Inc., Class B		3,578,100			321,957
Staples, Inc.		17,272,900			272,912
Target Corp.		2,800,000			131,348
Time Warner Cable Inc.		4,812,727			375,585
Time Warner Inc.		12,799,000			465,500
Toyota Motor Corp.1		750,000			31,577
					6,742,875

CONSUMER STAPLES — 10.72%
Altria Group, Inc.		19,925,000			526,219
Avon Products, Inc.		14,082,000			394,296
Coca-Cola Co.		5,303,300			356,859
Colgate-Palmolive Co.		1,500,000			131,115
ConAgra Foods, Inc.		5,521,100			142,500
CVS/Caremark Corp.		11,000,000			413,380
General Mills, Inc.		3,920,000			145,902
H.J. Heinz Co.		2,750,000			146,520
Kellogg Co.		1,000,000			55,320
Kimberly-Clark Corp.		1,500,000			99,840
Kraft Foods Inc., Class A		22,415,868			789,711
Molson Coors Brewing Co., Class B		7,176,344			321,070
PepsiCo, Inc.		10,641,500			749,481
Philip Morris International Inc.		32,831,000			2,192,126
Reynolds American Inc.		1,333,332			49,400
Sara Lee Corp.		5,000,000			94,950
					6,608,689

HEALTH CARE — 6.60%
Abbott Laboratories		17,335,000			912,168
Amgen Inc.2		7,870,792			459,261
Bayer AG1		950,000			76,376
Boston Scientific Corp.2		47,632,724			329,142
Eli Lilly and Co.		5,070,000			190,277
Johnson & Johnson		600,000			39,912
Medco Health Solutions, Inc.2		3,250,000			183,690
Medtronic, Inc.		7,112,500			274,045
Merck & Co., Inc.		36,771,429			1,297,664
Novartis AG1		663,000			40,614
Novartis AG (ADR)		921,556			56,316
Pfizer Inc		4,025,000			82,915
Roche Holding AG1		760,000			127,147
					4,069,527

FINANCIALS — 7.46%
American International Group, Inc.2		316,998			9,294
Banco Santander, SA1		25,549,941			294,807
Banco Santander, SA (ADR)		3,805,087			43,797
Bank of America Corp.		66,440,935			728,193
Bank of New York Mellon Corp.		8,275,012			212,006
BB&T Corp.		4,825,000			129,503
Capital One Financial Corp.		6,000,000			310,020
Citigroup Inc.		13,880,000			577,963
Discover Financial Services		1,973,400			52,788
Genworth Financial, Inc., Class A2		12,844,101			132,037
HSBC Holdings PLC (ADR)		1,529,416			75,890
HSBC Holdings PLC (United Kingdom)1		4,869,240			48,305
JPMorgan Chase & Co.		26,065,000			1,067,101
Société Générale1		2,632,877			156,055
State Street Corp.		2,008,700			90,572
Wells Fargo & Co.		23,910,000			670,915
					4,599,246

INFORMATION TECHNOLOGY — 19.06%
Accenture PLC, Class A		3,381,200			204,292
Analog Devices, Inc.		3,846,100			150,536
Apple Inc.2		2,080,000			698,194
Applied Materials, Inc.		12,495,000			162,560
Automatic Data Processing, Inc.		4,023,043			211,934
Canon, Inc.1		770,000			36,719
Cisco Systems, Inc.		11,420,400			178,272
Corning Inc.		25,944,820			470,898
Flextronics International Ltd.2		14,000,000			89,880
Google Inc., Class A2		1,107,030			560,578
Hewlett-Packard Co.		22,040,000			802,256
Intel Corp.		38,629,399			856,027
International Business Machines Corp.		3,235,000			554,964
KLA-Tencor Corp.		6,726,900			272,305
Linear Technology Corp.		8,320,000			274,726
MasterCard Inc., Class A		783,900			236,220
Maxim Integrated Products, Inc.		2,757,700			70,487
Microsoft Corp.		91,435,800			2,377,331
Nokia Corp.1		63,233,329			408,399
Nokia Corp. (ADR)		5,652,400			36,288
Oracle Corp.		30,315,000			997,667
QUALCOMM Inc.		9,612,000			545,865
Telefonaktiebolaget LM Ericsson, Class B1		12,750,000			183,377
Texas Instruments Inc.		22,825,000			749,345
Xilinx, Inc.		5,254,500			191,632
Yahoo! Inc.2		28,491,520			428,512
					11,749,264

TELECOMMUNICATION SERVICES — 5.43%
AT&T Inc.		90,216,900			2,833,713
CenturyLink, Inc.		8,286,720			335,032
France Télécom SA1		6,220,000			132,320
Verizon Communications Inc.		1,250,000			46,538
					3,347,603

UTILITIES — 3.22%
Dominion Resources, Inc.		10,623,824			512,812
Exelon Corp.		7,610,600			326,038
FirstEnergy Corp.		4,443,500			196,181
GDF SUEZ1		16,595,324			607,337
NextEra Energy, Inc.		300,000			17,238
Public Service Enterprise Group Inc.		10,000,000			326,400
					1,986,006

MISCELLANEOUS — 2.55%
Other common stocks in initial period of acquisition					1,573,290


Total common stocks (cost: $45,096,335,000)					57,231,830


	Principal amount
Preferred securities — 0.19%		(000	)

FINANCIALS — 0.19%
JPMorgan Chase & Co., Series I, 7.90%3	$	62,936			67,829
Société Générale 5.922%3,4		24,955			21,611
Wells Fargo & Co., Series K, 7.98%3		23,667			25,679

Total preferred securities (cost: $100,197,000)					115,119



Warrants — 0.00%	Shares

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


MISCELLANEOUS — 0.00%
Other warrants in initial period of acquisition					773


Total warrants (cost: $13,004,000)					773


	Shares or
Convertible securities — 0.68%	principal amount

MATERIALS — 0.11%
ArcelorMittal 5.00% convertible debenture 2014	$	48,620,000			67,400


CONSUMER DISCRETIONARY — 0.42%
General Motors Co., Series B, 4.75% convertible preferred 2013		5,188,150			252,870
Johnson Controls, Inc. 11.50% convertible preferred 2012, units1		35,000			7,083
					259,953

FINANCIALS — 0.02%
American International Group, Inc. 8.50% convertible preferred 2011, units		4,211,826			7,329
Fannie Mae 5.375% convertible preferred 20322		820			5,740
					13,069

UTILITIES — 0.13%
PPL Corp. 9.50% convertible preferred 2013, units		1,461,400			81,692


Total convertible securities (cost: $595,424,000)					422,114


	Principal amount
Bonds & notes — 0.63%		(000	)

ENERGY — 0.01%
Chevron Corp. 4.95% 2019	$	5,000			5,596


MATERIALS — 0.01%
Rio Tinto Finance (USA) Ltd. 9.00% 2019		3,780			5,016


INDUSTRIALS — 0.06%
Burlington Northern Santa Fe LLC 5.75% 2018		5,000			5,677
CSX Corp. 6.25% 2015		5,000			5,730
Honeywell International Inc. 5.00% 2019		4,090			4,504
Norfolk Southern Corp. 5.75% 2018		2,500			2,834
Raytheon Co. 4.40% 2020		3,055			3,167
Union Pacific Corp. 6.125% 2020		5,000			5,867
United Technologies Corp. 4.50% 2020		5,475			5,807
					33,586

CONSUMER DISCRETIONARY — 0.03%
Comcast Corp. 6.30% 2017		5,120			5,943
Kohl’s Corp. 6.25% 2017		3,500			4,112
News America Inc. 6.90% 2019		5,000			5,828
					15,883

CONSUMER STAPLES — 0.02%
British American Tobacco International Finance PLC 9.50% 20184		5,000			6,699
Kraft Foods Inc. 2.625% 2013		2,555			2,630
PepsiCo, Inc. 2.50% 2016		2,500			2,529
Tesco PLC 5.50% 20174		2,506			2,838
					14,696

HEALTH CARE — 0.03%
Abbott Laboratories 5.125% 2019		2,500			2,755
Boston Scientific Corp. 5.125% 2017		1,250			1,323
Boston Scientific Corp. 6.00% 2020		250			271
Cardinal Health, Inc. 5.80% 2016		2,905			3,293
Novartis Securities Investment Ltd. 5.125% 2019		2,500			2,781
Pfizer Inc 6.20% 2019		2,500			2,929
Roche Holdings Inc. 6.00% 20194		2,500			2,885
WellPoint, Inc. 7.00% 2019		4,200			5,024
					21,261

FINANCIALS — 0.09%
Boston Properties, Inc. 5.875% 2019		5,000			5,487
Citigroup Inc. 4.587% 2015		1,387			1,460
Northern Trust Corp. 4.625% 2014		2,650			2,896
Regions Bank 7.50% 2018		4,350			4,555
Regions Financial Corp. 6.375% 2012		23,540			24,055
Regions Financial Corp. 7.75% 2014		13,082			13,871
Simon Property Group, LP 4.20% 2015		2,600			2,768
SLM Corp., Series A, 5.125% 2012		1,000			1,026
					56,118

INFORMATION TECHNOLOGY — 0.01%
Cisco Systems, Inc. 4.95% 2019		5,000			5,438


TELECOMMUNICATION SERVICES — 0.01%
AT&T Inc. 4.85% 2014		5,000			5,434
Vodafone Group PLC 5.625% 2017		2,500			2,805
					8,239

MORTGAGE-BACKED OBLIGATIONS5 — 0.08%
Fannie Mae 3.50% 2025		5,679			5,793
Fannie Mae 4.00% 2041		14,797			14,837
Fannie Mae 4.50% 2041		10,076			10,444
Fannie Mae 5.00% 2041		10,000			10,627
Fannie Mae 6.00% 2038		5,224			5,740
					47,441

BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 0.28%
Federal Home Loan Bank 3.625% 2013		50,000			53,330
Freddie Mac 2.125% 2012		10,000			10,199
Freddie Mac 5.00% 2014		10,000			11,185
U.S. Treasury 1.25% 2014		10,000			10,148
U.S. Treasury 1.25% 2015		8,000			7,949
U.S. Treasury 4.00% 2018		10,000			11,021
U.S. Treasury 4.125% 2015		10,000			11,098
U.S. Treasury 4.625% 2016		20,000			22,829
U.S. Treasury 6.125% 2027		5,000			6,324
U.S. Treasury 8.00% 2021		20,000			28,498
					172,581


Total bonds & notes (cost: $363,278,000)					385,855



Short-term securities — 5.80%

Abbott Laboratories 0.13% due 8/9/20114		40,000			39,996
Ciesco LLC 0.19%–0.20% due 8/15–8/23/2011		52,800			52,791
Coca-Cola Co. 0.12%–0.24% due 7/8–9/14/20114		242,786			242,759
Fannie Mae 0.102%–0.321% due 8/1/2011–1/9/2012		772,886			772,713
Federal Farm Credit Banks 0.11%–0.24% due 8/18–11/8/2011		84,500			84,485
Federal Home Loan Bank 0.045%–0.331% due 8/4/2011–2/23/2012		500,900			500,687
Freddie Mac 0.10%–0.301% due 7/19–12/19/2011		663,493			663,360
General Electric Capital Corp. 0.13% due 7/13/2011		57,500			57,497
General Electric Capital Services, Inc. 0.16% due 8/10/2011		123,800			123,783
Hewlett-Packard Co. 0.09% due 7/18/20114		50,000			49,998
Johnson & Johnson 0.19% due 7/14/20114		46,000			45,997
Jupiter Securitization Co., LLC 0.13%–0.20% due 7/8–7/28/20114		139,100			139,091
NetJets Inc. 0.15% due 7/12/20114		54,800			54,797
PepsiCo Inc. 0.09%–0.11% due 7/18–9/2/20114		52,000			51,995
Private Export Funding Corp. 0.13%–0.18% due 8/15–11/15/20114		80,000			79,972
Procter & Gamble International Funding S.C.A. 0.08% due 7/15/20114		33,250			33,249
Straight-A Funding LLC 0.18% due 8/3/20114		50,000			49,993
U.S. Treasury Bills 0.153%–0.278% due 7/7/2011–1/12/2012		456,500			456,452
Variable Funding Capital Company LLC 0.15% due 7/22/20114		30,000			29,997
Wal-Mart Stores, Inc. 0.08% due 7/26/20114		46,300			46,297

Total short-term securities (cost: $3,575,150,000)					3,575,909


Total investment securities (cost: $49,743,388,000)					61,731,600
Other assets less liabilities					(78,260	)

Net assets				$	61,653,340