Unassociated Document

ICA The Investment

Company of America®

[photo of rolled hay bales in a field] 

Semi-annual report for the six months ended June 30, 2012

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 more than 40 funds offered by American Funds, which is one of the nation’s largest mutual fund families. For more than 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, 2012:

1 year

5 years

10 years

Class A shares

Reflecting 5.75% maximum sales charge

–3.40

–1.97

4.48

The total annual fund operating expense ratio was 0.61% for Class A shares as of the prospectus dated March 1, 2012.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers, without which results would have been lower. Visit americanfunds.com for more information.

The fund’s 30-day yield for Class A shares as of July 31, 2012, reflecting the 5.75% maximum sales charge and calculated in accordance with the U.S. Securities and Exchange Commission formula, was 1.93%.

Results for other share classes can be found on page 3.

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. Refer to the fund prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the fund.

Fellow investors:

[photo of rolled hay bales in a field] 

The Investment Company of America experienced both strong and weak periods during the first six months of the year. Stock markets were alternately excited or concerned about prospects for fiscal issues in the U.S., the sovereign debt crisis in Europe and growth in China. Early in the year, these concerns were easing and corporate earnings reports were strong, fueling market gains. In the second quarter, the market corrected, as fears about these issues returned, and economic data remained sobering. It was easy to get caught up in short term trends, which we specifically endeavor to avoid.

Despite the challenging market landscape, The Investment Company of America gained 8.4% for the six-month period ended June 30, 2012, with dividends reinvested. In contrast, the unmanaged

Standard & Poor’s 500 Composite Index, a broad measure of the U.S. stock market, returned 9.5% during the same time period.

Portfolio review

During the six months, several industry sectors were key contributors to solid fund returns. Notable among them was consumer staples, highlighted by the fund’s largest holding, Philip Morris International, which advanced 11.2%. Consumer discretionary also helped the fund as the fund’s fifth-largest holding, Home Depot, was up 26.1% and Comcast rose 34.7%.

Telecommunication services also was among the highest returns in absolute terms, exemplified by ICA’s second-largest holding, AT&T, which advanced 17.9%. Double digit gains were also realized in information technology, paced by Microsoft (+17.8%), the fourth-largest holding, and by Apple (+44.2%), which benefited from the projected sale of nearly 17 million iPads in the second quarter.

[Begin Sidebar]

Results at a glance
For the six months ended June 30, 2012, with dividends reinvested

				Standard &			Lipper
	ICA			Poor’s 500			Growth & Income
	(Class A shares)			Composite Index*			Funds Index
Income return		0.96	%		1.16	%		n/a
Capital return		7.42	%		8.32	%		n/a
Total return		8.38	%		9.48	%		7.89	%

*The S&P 500 is unmanaged and, therefore, has no expenses.

[End Sidebar]

Another industry well represented in the portfolio is energy — which was not helpful this period — and ICA continues to hold some major energy companies. Royal Dutch Shell was the fund’s third-largest holding, and it dipped 8.0%; however, the loss may be partially attributable to the company being domiciled in Europe and the association with weakness in that region, compared to other U.S.-domiciled energy companies.

In the long run, international flexibility has been beneficial to ICA; however, this was not the case in the first six months. Holdings of non-U.S. based companies were a relative drag on results. Despite the fiscal issues hanging over Europe, we believe there are still high-quality companies with solid fundamentals in that region.

Other highlights were Dow Chemical (+9.5%), and the health care companies Abbott Laboratories (+14.7%) and Amgen (+13.8%).

Assets held in cash represented 7.6% of total net assets. It’s important to remember that cash holdings serve as a buffer in volatile times, and some of our portfolio counselors feel it is prudent to maintain some cash in this environment.

A look ahead

We are carefully monitoring the macroeconomic issues facing the U.S. and global economies, and we remain moderately constructive about the stock market in the long run. In the near term, we would not be surprised to see volatility as investors continue to grapple with the issues we initially discussed. Add the fact that it’s an election year, and additional trepidation or excitement may be piled on.

We believe this environment emphasizes the need to adhere to our core convictions and maintain a long-term time horizon, and not to try to “time the market.” Our durable approach recognizes that there will be good and bad quarters (and potentially years), but also that a short-term snapshot is a poor substitute for a long-term strategy and approach. ICA has the benefit of history to know that for all the market gyrations, the fund has achieved long-term successful outcomes because of stock-by-stock fundamental research and the Multiple Portfolio Counselor System.®

We remain focused and committed to this disciplined approach and are optimistic about continuing to identify solid companies at good valuations that we believe will prosper in the long run. We thank you for your continued confidence in our long-term philosophy.

Sincerely,

/s/ James B. Lovelace

James B. Lovelace

Vice Chairman

/s/ Donald D. O’Neal

Donald D. O’Neal

President

August 13, 2012

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

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, 2012:

10 years/

1 year

5 years

Life of class1

Class B shares2

Reflecting applicable contingent deferred sales charge

(CDSC), maximum of 5%, payable only if shares are

sold within six years of purchase

–3.30

–1.91

4.44

Not reflecting CDSC

1.70

–1.56

4.44

Class C shares

Reflecting CDSC, maximum of 1%, payable only if shares

are sold within one year of purchase

0.67

–1.60

4.23

Not reflecting CDSC

1.67

–1.60

4.23

Class F-1 shares3

Not reflecting annual asset-based fee charged by

sponsoring firm

2.46

–0.83

5.04

Class F-2 shares3 — first sold 8/1/08

Not reflecting annual asset-based fee charged by

sponsoring firm

2.73

—

3.14

Class 529-A shares4

Reflecting 5.75% maximum sales charge

–3.49

–2.04

4.39

Not reflecting maximum sales charge

2.40

–0.87

5.01

Class 529-B shares2,4

Reflecting applicable CDSC, maximum of 5%, payable

only if shares are sold within six years of purchase

–3.42

–2.02

4.30

Not reflecting CDSC

1.58

–1.67

4.30

Class 529-C shares4

Reflecting CDSC, maximum of 1%, payable only if shares

are sold within one year of purchase

0.57

–1.66

4.15

Not reflecting CDSC

1.57

–1.66

4.15

Class 529-E shares3,4

2.15

–1.16

4.68

Class 529-F-1 shares3,4 — first sold 9/16/02

Not reflecting annual asset-based fee charged by

sponsoring firm

2.63

–0.67

6.12

1Applicable to Class F-2 and 529-F-1 shares only. All other share classes reflect 10-year results.

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 prospectus.

Summary investment portfolio June 30, 2012

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]

	Percent
	of net
Industry sector diversification	assets

Information technology		14.13	%
Energy		12.76
Consumer discretionary		12.47
Consumer staples		11.62
Industrials		11.36
Other industries		28.24
Other securities		1.82
Short-term securities & other assets less liabilities		7.60

[end pie chart]

							Percent
				Value			of net
Common stocks - 90.58%	Shares				(000	)	assets

Energy - 12.76%
Apache Corp.		4,310,000		$	378,806			.67	%
Baker Hughes Inc.		11,915,000			489,706			.87
BP PLC (1)		128,484,340			860,866
BP PLC (ADR)		3,676,953			149,064			1.79
Chevron Corp.		9,480,000			1,000,140			1.77
ConocoPhillips		10,675,000			596,519			1.06
EOG Resources, Inc.		4,232,200			381,364			.67
Royal Dutch Shell PLC, Class A (ADR)		15,357,000			1,035,523
Royal Dutch Shell PLC, Class B (1)		12,365,265			431,550
Royal Dutch Shell PLC, Class B (ADR)		2,975,498			208,077			2.96
Schlumberger Ltd.		15,674,999			1,017,464			1.80
Other securities					659,428			1.17
					7,208,507			12.76

Materials - 3.87%
Dow Chemical Co.		42,502,000			1,338,813			2.37
Other securities					848,664			1.50
					2,187,477			3.87

Industrials - 11.36%
CSX Corp.		31,422,748			702,613			1.24
General Dynamics Corp.		13,059,800			861,424			1.53
General Electric Co.		27,725,000			577,789			1.02
Union Pacific Corp.		6,386,900			762,021			1.35
United Parcel Service, Inc., Class B		4,750,000			374,110			.66
United Technologies Corp.		7,561,852			571,147			1.01
Other securities					2,572,099			4.55
					6,421,203			11.36

Consumer discretionary - 12.47%
Amazon.com, Inc. (2)		3,100,000			707,885			1.26
Comcast Corp., Class A		28,838,400			921,964
Comcast Corp., Class A, special nonvoting shares		7,000,000			219,800			2.02
General Motors Co. (2)		35,490,500			699,873			1.24
Home Depot, Inc.		25,700,000			1,361,843			2.41
News Corp., Class A		31,725,000			707,150			1.25
Time Warner Cable Inc.		4,812,727			395,125			.70
Time Warner Inc.		11,624,000			447,524			.79
Other securities					1,583,617			2.80
					7,044,781			12.47

Consumer staples - 11.62%
Altria Group, Inc.		30,125,000			1,040,819			1.84
Coca-Cola Co.		6,803,300			531,950			.94
CVS/Caremark Corp.		11,000,000			514,030			.91
Kraft Foods Inc., Class A		18,374,168			709,610			1.26
PepsiCo, Inc.		6,097,500			430,849			.76
Philip Morris International Inc.		27,991,072			2,442,501			4.32
Other securities					895,187			1.59
					6,564,946			11.62

Health care - 7.95%
Abbott Laboratories		18,685,000			1,204,622			2.13
Amgen Inc.		14,290,000			1,043,742			1.85
Gilead Sciences, Inc. (2)		10,930,000			560,490			.99
Other securities					1,683,707			2.98
					4,492,561			7.95

Financials - 5.70%
Aon PLC, Class A		8,975,000			419,850			.74
Citigroup Inc.		20,110,455			551,228			.98
JPMorgan Chase & Co.		19,155,000			684,408			1.21
Other securities					1,567,133			2.77
					3,222,619			5.70

Information technology - 14.13%
Apple Inc. (2)		2,155,000			1,258,520			2.23
Intel Corp.		21,254,700			566,438			1.00
Microsoft Corp.		52,650,500			1,610,579			2.85
Oracle Corp.		33,385,000			991,535			1.75
Samsung Electronics Co. Ltd. (1)		375,500			398,114			.70
Texas Instruments Inc.		22,825,000			654,849			1.16
Other securities					2,506,579			4.44
					7,986,614			14.13

Telecommunication services - 5.46%
AT&T Inc.		49,300,000			1,758,038			3.11
Sprint Nextel Corp., Series 1 (2)		143,380,000			467,419			.83
Verizon Communications Inc.		13,944,600			619,698			1.10
Other securities					240,731			.42
					3,085,886			5.46

Utilities - 3.20%
Dominion Resources, Inc.		9,403,824			507,806			.90
GDF SUEZ (1)		18,639,655			444,722			.78
Other securities					857,582			1.52
					1,810,110			3.20

Miscellaneous - 2.06%
Other common stocks in initial period of acquisition					1,162,571			2.06


Total common stocks (cost: $38,608,150,000)					51,187,275			90.58



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

Financials - 0.00%
Other securities					-			.00


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



							Percent
				Value			of net
Convertible securities - 0.59%	Shares				(000	)	assets

Consumer discretionary - 0.50%
General Motors Co., Series B, 4.75% convertible preferred 2013		8,611,850			285,913			.50


Materials - 0.09%
Other securities					50,079			.09


Total convertible securities (cost: $462,252,000)					335,992			.59



	Principal						Percent
	amount			Value			of net
Bonds & notes - 1.23%		(000	)		(000	)	assets

Energy - 0.01%
Chevron Corp. 4.95% 2019	$	5,000			6,038			.01


Materials - 0.01%
Dow Chemical Co. 4.125% 2021		500			538			.00
Other securities					5,178			.01
					5,716			.01

Industrials - 0.06%
CSX Corp. 6.25% 2015		5,000			5,701			.01
Union Pacific Corp. 6.125% 2020		5,000			6,187			.01
United Technologies Corp. 4.50% 2020		5,475			6,360			.01
Other securities					17,734			.03
					35,982			.06

Consumer discretionary - 0.03%
Comcast Corp. 6.30% 2017		5,120			6,166			.01
News America Inc. 6.90% 2019		5,000			6,160			.01
Other securities					4,206			.01
					16,532			.03

Consumer staples - 0.03%
Kraft Foods Inc. 2.625% 2013		2,555			2,594			.01
Other securities					12,361			.02
					14,955			.03

Financials - 0.22%
JPMorgan Chase & Co., Series I, junior subordinated 7.90% (undated) (3)		62,936			69,236			.12
Other securities					55,278			.10
					124,514			.22

Telecommunication services - 0.41%
AT&T Inc. 4.85% 2014		5,000			5,329			.01
Sprint Capital Corp. 6.90% 2019		17,200			16,254
Sprint Nextel Corp. 8.375%-11.50% 2017-2021 (4)		190,475			206,971			.40
Other securities					2,344			.00
					230,898			.41

Mortgage-backed obligations (5) - 0.10%
Fannie Mae 3.00%-6.00% 2025-2042		52,023			56,493			.10


Bonds & notes of U.S. government & government agencies - 0.32%
Federal Home Loan Bank 3.625% 2013		50,000			52,159			.09
Freddie Mac 2.125%-5.00% 2012-2014		20,000			20,975			.04
U.S. Treasury 0.125%-8.00% 2014-2022 (6)		87,718			106,069			.19
					179,203			.32

Other - 0.04%
Other securities					23,042			.04


Total bonds & notes (cost: $636,515,000)					693,373			1.23



	Principal						Percent
	amount			Value			of net
Short-term securities - 7.32%		(000	)		(000	)	assets

Abbott Laboratories 0.14%-0.16% due 7/31-9/10/2012 (4)	$	117,200			117,178			.21
Chariot Funding, LLC 0.18% due 7/19/2012 (4)		50,000			49,995			.09
Coca-Cola Co. 0.17%-0.23% due 8/22-10/15/2012 (4)		83,800			83,770			.15
Fannie Mae 0.07%-0.23% due 7/16/2012-1/7/2013		1,053,707			1,053,281			1.86
Federal Home Loan Bank 0.10%-0.21% due 7/13/2012-6/14/2013		646,162			645,723			1.14
Freddie Mac 0.07%-0.18% due 7/11/2012-1/23/2013		719,442			719,155			1.27
U.S. Treasury Bills 0.082%-0.147% due 7/19-10/25/2012		682,800			682,729			1.21
Other securities					786,942			1.39


Total short-term securities (cost: $4,138,728,000)					4,138,773			7.32


Total investment securities (cost: $43,857,415,000)					56,355,413			99.72
Other assets less liabilities					157,521			.28

Net assets				$	56,512,934			100.00	%

As permitted by U.S. Securities and Exchange Commission ("SEC") 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.

Investments in affiliates
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares. The value of the fund's holdings in affiliated companies is included in "Other securities" under the respective industry sectors in the summary investment portfolio. Further details on these holdings and related transactions during the six months ended June 30, 2012, appear below.

	Beginning shares		Additions		Reductions		Ending shares		Dividend income (000)		Value of affiliates at 6/30/2012 (000)
Masco Corp.		23,258,069		-		-		23,258,069	$	3,489	$	322,589
R.R. Donnelley & Sons Co.		8,935,000		1,200,000		-		10,135,000		5,159		119,289
									$	8,648	$	441,878

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 $3,937,581,000, which represented 6.97% of the net assets of the fund. This entire amount relates to certain securities trading outside the U.S. whose values were adjusted as a result of significant market movements following the close of local trading.

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

(3) Coupon rate may change periodically.

(4) Acquired in a transaction exempt from registration under Rule 144A or section 4(2) of 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 $803,809,000, which represented 1.42% of the net assets of the fund.

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

(6) Index-linked bond whose principal amount moves with a government price index.

Key to abbreviation

ADR = American Depositary Receipts

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities			unaudited
at June 30, 2012	(dollars in thousands)

Assets:
Investment securities, at value:
Unaffiliated issuers (cost: $43,451,487)	$	55,913,535
Affiliated issuers (cost: $405,928)		441,878	$	56,355,413
Cash				15,094
Receivables for:
Sales of investments		215,642
Sales of fund's shares		27,080
Dividends and interest		116,017		358,739
				56,729,246
Liabilities:
Payables for:
Purchases of investments		111,208
Repurchases of fund's shares		66,966
Investment advisory services		10,972
Services provided by related parties		20,669
Trustees' deferred compensation		5,944
Other		553		216,312
Net assets at June 30, 2012			$	56,512,934

Net assets consist of:
Capital paid in on shares of beneficial interest			$	44,398,738
Undistributed net investment income				379,015
Accumulated net realized loss				(762,580	)
Net unrealized appreciation				12,497,761
Net assets at June 30, 2012			$	56,512,934

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

Shares of beneficial interest issued and outstanding (no stated par value) -
unlimited shares authorized (1,943,004 total shares outstanding)
		Net assets		Shares outstanding		Net asset value per share
Class A		$	44,155,547		1,517,416	$	29.10
Class B			668,893		23,064		29.00
Class C			1,700,465		58,829		28.91
Class F-1			1,856,181		63,885		29.06
Class F-2			631,156		21,694		29.09
Class 529-A			1,493,920		51,412		29.06
Class 529-B			96,105		3,312		29.01
Class 529-C			362,568		12,505		28.99
Class 529-E			59,321		2,045		29.00
Class 529-F-1			34,109		1,175		29.04
Class R-1			79,107		2,732		28.96
Class R-2			585,096		20,187		28.98
Class R-3			764,827		26,342		29.03
Class R-4			682,654		23,497		29.05
Class R-5			726,284		24,967		29.09
Class R-6			2,616,701		89,942		29.09


See Notes to Financial Statements

Statement of operations				unaudited
for the six months ended June 30, 2012	(dollars in thousands)

Investment income:
Income:
Dividends (net of non-U.S. taxes of $14,764;
also includes $8,648 from affiliates)	$	749,422
Interest		23,258		$	772,680

Fees and expenses*:
Investment advisory services		68,894
Distribution services		75,711
Transfer agent services		37,119
Administrative services		5,164
Reports to shareholders		1,677
Registration statement and prospectus		419
Trustees' compensation		500
Auditing and legal		38
Custodian		395
State and local taxes		287
Other		1,164			191,368
Net investment income					581,312

Net realized loss and unrealized appreciation
on investments and currency:
Net realized loss on:
Investments		(276,591	)
Currency transactions		(3,061	)		(279,652	)
Net unrealized appreciation on:
Investments		4,247,541
Currency translations		27			4,247,568
Net realized loss and unrealized appreciation
on investments and currency					3,967,916
Net increase in net assets resulting from operations				$	4,549,228

(*) 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,
		2012†			2011
Operations:
Net investment income	$	581,312		$	1,184,346
Net realized (loss) gain on investments and currency transactions		(279,652	)		1,354,309
Net unrealized appreciation (depreciation) on investments and currency translations		4,247,568			(3,588,402	)
Net increase (decrease) in net assets resulting from operations		4,549,228			(1,049,747	)

Dividends paid to shareholders from net investment income		(499,446	)		(1,183,860	)

Net capital share transactions		(2,292,842	)		(5,098,241	)

Total increase (decrease) in net assets		1,756,940			(7,331,848	)

Net assets:
Beginning of period		54,755,994			62,087,842
End of period (including undistributed
net investment income: $379,015 and $297,149, respectively)	$	56,512,934		$	54,755,994

†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 (Classes A, B and C, as well as two F share classes, F-1 and F-2), five 529 college savings plan share classes (Classes 529-A, 529-B, 529-C, 529-E and 529-F-1) and six retirement plan share classes (Classes R-1, R-2, R-3, R-4, R-5 and R-6). The 529 college savings plan share classes can be used to save for college education. The retirement plan share classes 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 supplied by one or more pricing vendors 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

Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by accounting principles generally accepted in the United States of America. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

Methods and inputs – The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s 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 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

When the fund’s 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 ask prices that are reasonably and timely available (or bid prices, if ask 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 fund’s investment adviser are fair valued as determined in good faith under fair value guidelines adopted by authority of the fund’s board of trustees as further described on the following page. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission (“SEC”) rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. In addition, the closing prices of equity securities that trade in markets outside U.S. time zones may be adjusted to reflect significant events that occur after the close of local trading but before the net asset value of each share class of the fund is determined. 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.

Processes and structure – The fund’s board of trustees has delegated authority to the fund’s investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation teams. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees with supplemental information to support the changes. The fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.

The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control self-evaluation program facilitated by the investment adviser’s compliance group.

Classifications – The fund’s investment adviser classifies the fund’s 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. Certain securities trading outside the U.S. may transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’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, 2012 (dollars in thousands):

		Investment securities
		Level 1		Level 2(*)		Level 3		Total
Assets:
Common stocks:
	Energy	$	5,723,125	$	1,485,382	$	-	$	7,208,507
	Materials		2,027,572		159,905		-		2,187,477
	Industrials		6,281,657		139,546		-		6,421,203
	Consumer discretionary		6,908,247		136,534		-		7,044,781
	Consumer staples		6,564,946		-		-		6,564,946
	Health care		4,178,179		314,382		-		4,492,561
	Financials		2,996,550		226,069		-		3,222,619
	Information technology		7,491,420		495,194		-		7,986,614
	Telecommunication services		3,085,886		-		-		3,085,886
	Utilities		1,365,388		444,722		-		1,810,110
	Miscellaneous		626,724		535,847		-		1,162,571
Convertible securities			285,913		50,079		-		335,992
Bonds & notes			-		693,373		-		693,373
Short-term securities			-		4,138,773		-		4,138,773
Total		$	47,535,607	$	8,819,806	$	-	$	56,355,413

(*) Securities with a market value of $3,046,758,000, which represented 5.39% of the net assets of the fund, transferred from Level 1 to Level 2 since the prior fiscal year-end, primarily due to significant market movements following the close of local trading.

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, economic or market developments or instability in the countries or regions in which the issuer operates. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. 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, and may be more difficult to value, 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 investment 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, 2012, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2008 and by 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, 2011, the components of distributable earnings on a tax basis were as follows:

(dollars in thousands)
Undistributed ordinary income	$	313,814
Capital loss carryforward expiring 2017*		(387,836	)
Post-October capital loss deferral†		(94,079	)

*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.
†This deferral is considered incurred in the subsequent year.

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, 2012, the tax basis unrealized appreciation (depreciation) and cost of investment securities were as follows:

(dollars in thousands)
Gross unrealized appreciation on investment securities	$	15,417,856
Gross unrealized depreciation on investment securities		(2,930,650	)
Net unrealized appreciation on investment securities		12,487,206
Cost of investment securities		43,868,207

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

Share class	Six months ended June 30, 2012		Year ended December 31, 2011
Class A	$	398,298	$	945,530
Class B		3,639		13,329
Class C		8,660		24,855
Class F-1		16,420		35,112
Class F-2		6,366		14,859
Class 529-A		12,511		27,601
Class 529-B		441		1,534
Class 529-C		1,663		4,236
Class 529-E		428		983
Class 529-F-1		315		671
Class R-1		416		988
Class R-2		3,058		7,914
Class R-3		5,625		13,622
Class R-4		6,168		13,842
Class R-5		7,825		19,777
Class R-6		27,613		59,007
Total	$	499,446	$	1,183,860

6.	Fees and transactions with related parties

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, 2012, the investment advisory services fee was $68,894,000, which was equivalent to an annualized rate of 0.242% 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 below. 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, 2012, 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 shareholder services agreement with AFS under which the fund compensates AFS for providing transfer agent services to each of the fund’s share classes. These services include recordkeeping, shareholder communications and transaction processing. In addition, the fund reimburses AFS for amounts paid to third parties for performing transfer agent services on behalf of fund shareholders.

Administrative services – The board of trustees approved an amended administrative services agreement with CRMC effective January 1, 2012. Under this agreement, Class A shares pay an annual fee of 0.01% and Class C, F, R and 529 shares pay an annual fee of 0.05% of their respective average daily net assets to compensate CRMC for providing administrative services. These services include, but are not limited to, coordinating, monitoring, assisting and overseeing third parties that provide services to fund shareholders.

529 plan services – Each 529 share class is subject to service fees to compensate 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. The fee is included in other expenses on the accompanying financial statements. The Commonwealth of Virginia is not considered a related party.

Class-specific expenses under the agreements described above for the six months ended June 30, 2012, were as follows (dollars in thousands):

Share class	Distribution services		Transfer agent services		Administrative services		529 plan services
Class A	$	51,343	$	30,641	$	2,216	Not applicable
Class B		3,799		538	Not applicable		Not applicable
Class C		8,796		1,181		442	Not applicable
Class F-1		2,363		1,081		474	Not applicable
Class F-2	Not applicable			316		157	Not applicable
Class 529-A		1,607		763		365	$	726
Class 529-B		521		66		26		52
Class 529-C		1,768		203		89		178
Class 529-E		146		21		15		29
Class 529-F-1		-		17		8		16
Class R-1		396		43		20	Not applicable
Class R-2		2,198		1,049		148	Not applicable
Class R-3		1,918		673		193	Not applicable
Class R-4		856		332		173	Not applicable
Class R-5	Not applicable			193		190	Not applicable
Class R-6	Not applicable			2		648	Not applicable
Total class-specific expenses	$	75,711	$	37,119	$	5,164	$	1,001

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 $500,000, shown on the accompanying financial statements, includes $214,000 in current fees (either paid in cash or deferred) and a net increase of $286,000 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, 2012, 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, 2012, the net asset value of each share class would have been reduced by $0.01 per share. No warrants were exercised during the six months ended June 30, 2012.

8.	Capital share transactions

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

	Sales(*)				Reinvestments of dividends				Repurchases(*)						Net (decrease) increase
Share class	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Six months ended June 30, 2012
Class A	$	1,169,515		40,455	$	380,847		13,111	$	(3,197,341	)		(110,541	)	$	(1,646,979	)		(56,975	)
Class B		4,964		172		3,595		124		(236,960	)		(8,263	)		(228,401	)		(7,967	)
Class C		69,157		2,406		8,392		291		(273,483	)		(9,549	)		(195,934	)		(6,852	)
Class F-1		394,419		13,630		15,985		551		(422,113	)		(14,797	)		(11,709	)		(616	)
Class F-2		49,477		1,706		5,801		200		(72,124	)		(2,496	)		(16,846	)		(590	)
Class 529-A		94,405		3,281		12,508		431		(76,531	)		(2,660	)		30,382			1,052
Class 529-B		848		29		441		15		(24,309	)		(849	)		(23,020	)		(805	)
Class 529-C		23,014		801		1,663		58		(23,422	)		(817	)		1,255			42
Class 529-E		3,199		112		428		15		(3,631	)		(127	)		(4	)	_ (†)
Class 529-F-1		4,161		144		315		11		(3,152	)		(110	)		1,324			45
Class R-1		9,178		319		416		14		(10,283	)		(357	)		(689	)		(24	)
Class R-2		65,282		2,266		3,053		106		(102,460	)		(3,556	)		(34,125	)		(1,184	)
Class R-3		89,898		3,126		5,622		194		(122,531	)		(4,240	)		(27,011	)		(920	)
Class R-4		72,895		2,525		6,165		212		(105,883	)		(3,660	)		(26,823	)		(923	)
Class R-5		41,269		1,431		7,815		269		(139,340	)		(4,826	)		(90,256	)		(3,126	)
Class R-6		217,773		7,514		27,612		951		(269,391	)		(9,223	)		(24,006	)		(758	)
Total net increase
(decrease)	$	2,309,454		79,917	$	480,658		16,553	$	(5,082,954	)		(176,071	)	$	(2,292,842	)		(79,601	)


Year ended December 31, 2011
Class A	$	2,591,052		92,718	$	900,445		32,702	$	(7,911,508	)		(283,675	)	$	(4,420,011	)		(158,255	)
Class B		13,395		481		13,081		475		(580,423	)		(20,926	)		(553,947	)		(19,970	)
Class C		154,710		5,562		23,946		876		(547,074	)		(19,844	)		(368,418	)		(13,406	)
Class F-1		690,634		24,783		33,781		1,233		(469,661	)		(16,930	)		254,754			9,086
Class F-2		123,467		4,385		11,412		417		(175,136	)		(6,287	)		(40,257	)		(1,485	)
Class 529-A		190,204		6,835		27,593		1,005		(163,462	)		(5,894	)		54,335			1,946
Class 529-B		2,120		76		1,530		55		(52,467	)		(1,896	)		(48,817	)		(1,765	)
Class 529-C		45,157		1,625		4,235		154		(51,698	)		(1,871	)		(2,306	)		(92	)
Class 529-E		7,000		253		983		36		(7,539	)		(273	)		444			16
Class 529-F-1		9,630		343		671		25		(5,879	)		(215	)		4,422			153
Class R-1		17,478		629		985		36		(19,456	)		(700	)		(993	)		(35	)
Class R-2		135,837		4,886		7,908		289		(197,884	)		(7,129	)		(54,139	)		(1,954	)
Class R-3		196,980		7,044		13,617		496		(269,855	)		(9,708	)		(59,258	)		(2,168	)
Class R-4		178,597		6,386		13,835		504		(187,204	)		(6,684	)		5,228			206
Class R-5		147,341		5,225		19,748		717		(262,051	)		(9,659	)		(94,962	)		(3,717	)
Class R-6		450,260		15,942		58,995		2,147		(283,571	)		(10,167	)		225,684			7,922
Total net increase
(decrease)	$	4,953,862		177,173	$	1,132,765		41,167	$	(11,184,868	)		(401,858	)	$	(5,098,241	)		(183,518	)


* Includes exchanges between share classes of the fund.
† Amount less than one thousand.

9.	Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $5,003,435,000 and $7,858,933,000, respectively, during the six months ended June 30, 2012.

Financial highlights

				Income (loss) from investment operations(1)								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(2)(3)			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(3)			Ratio of net income to average net assets(3)

Class A:	Six months ended 6/30/2012(4)(5)	$	27.09	$	.30	$	1.97		$	2.27		$	(.26	)	$	-		$	(.26	)	$	29.10		8.38	%	$	44,156		.63	%(6)		.63	%(6)		2.08	%(6)
	Year ended 12/31/2011		28.16		.57		(1.06	)		(.49	)		(.58	)		-			(.58	)		27.09		(1.76	)		42,643		.61			.61			2.05
	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

Class B:	Six months ended 6/30/2012(4)(5)		26.99		.19		1.96			2.15			(.14	)		-			(.14	)		29.00		7.98			669		1.39	(6)		1.39	(6)		1.30	(6)
	Year ended 12/31/2011		28.05		.35		(1.06	)		(.71	)		(.35	)		-			(.35	)		26.99		(2.53	)		838		1.38			1.38			1.27
	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

Class C:	Six months ended 6/30/2012(4)(5)		26.90		.18		1.97			2.15			(.14	)		-			(.14	)		28.91		8.00			1,700		1.43	(6)		1.43	(6)		1.28	(6)
	Year ended 12/31/2011		27.97		.34		(1.06	)		(.72	)		(.35	)		-			(.35	)		26.90		(2.58	)		1,767		1.42			1.42			1.24
	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

Class F-1:	Six months ended 6/30/2012(4)(5)		27.04		.29		1.98			2.27			(.25	)		-			(.25	)		29.06		8.41			1,856		.67	(6)		.67	(6)		2.05	(6)
	Year ended 12/31/2011		28.12		.56		(1.07	)		(.51	)		(.57	)		-			(.57	)		27.04		(1.84	)		1,744		.66			.66			2.01
	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

Class F-2:	Six months ended 6/30/2012(4)(5)		27.08		.33		1.97			2.30			(.29	)		-			(.29	)		29.09		8.51			631		.40	(6)		.40	(6)		2.31	(6)
	Year ended 12/31/2011		28.15		.63		(1.06	)		(.43	)		(.64	)		-			(.64	)		27.08		(1.54	)		604		.40			.40			2.27
	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(4)		28.53		.26		(7.47	)		(7.21	)		(.36	)		-			(.36	)		20.96		(25.39	)		83		.17			.16			1.24

Class 529-A:	Six months ended 6/30/2012(4)(5)		27.05		.29		1.97			2.26			(.25	)		-			(.25	)		29.06		8.34			1,494		.73	(6)		.73	(6)		1.99	(6)
	Year ended 12/31/2011		28.12		.55		(1.06	)		(.51	)		(.56	)		-			(.56	)		27.05		(1.84	)		1,362		.70			.70			1.97
	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

Class 529-B:	Six months ended 6/30/2012(4)(5)		27.00		.17		1.96			2.13			(.12	)		-			(.12	)		29.01		7.91			96		1.53	(6)		1.53	(6)		1.18	(6)
	Year ended 12/31/2011		28.06		.32		(1.05	)		(.73	)		(.33	)		-			(.33	)		27.00		(2.63	)		111		1.50			1.50			1.16
	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

Class 529-C:	Six months ended 6/30/2012(4)(5)		26.99		.17		1.96			2.13			(.13	)		-			(.13	)		28.99		7.91			363		1.51	(6)		1.51	(6)		1.21	(6)
	Year ended 12/31/2011		28.06		.33		(1.06	)		(.73	)		(.34	)		-			(.34	)		26.99		(2.62	)		336		1.49			1.49			1.18
	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

Class 529-E:	Six months ended 6/30/2012(4)(5)	$	26.99	$	.25	$	1.97		$	2.22		$	(.21	)	$	-		$	(.21	)	$	29.00		8.23	%	$	59		.98	%(6)		.98	%(6)		1.74	%(6)
	Year ended 12/31/2011		28.07		.47		(1.07	)		(.60	)		(.48	)		-			(.48	)		26.99		(2.15	)		55		.97			.97			1.70
	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

Class 529-F-1:	Six months ended 6/30/2012(4)(5)		27.03		.32		1.97			2.29			(.28	)		-			(.28	)		29.04		8.47			34		.51	(6)		.51	(6)		2.21	(6)
	Year ended 12/31/2011		28.10		.61		(1.06	)		(.45	)		(.62	)		-			(.62	)		27.03		(1.62	)		31		.49			.49			2.19
	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

Class R-1:	Six months ended 6/30/2012(4)(5)		26.95		.19		1.97			2.16			(.15	)		-			(.15	)		28.96		8.02			79		1.41	(6)		1.41	(6)		1.31	(6)
	Year ended 12/31/2011		28.02		.35		(1.06	)		(.71	)		(.36	)		-			(.36	)		26.95		(2.55	)		74		1.41			1.41			1.25
	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

Class R-2:	Six months ended 6/30/2012(4)(5)		26.98		.19		1.96			2.15			(.15	)		-			(.15	)		28.98		7.96			585		1.40	(6)		1.40	(6)		1.32	(6)
	Year ended 12/31/2011		28.05		.35		(1.06	)		(.71	)		(.36	)		-			(.36	)		26.98		(2.55	)		577		1.41			1.41			1.25
	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

Class R-3:	Six months ended 6/30/2012(4)(5)		27.03		.25		1.96			2.21			(.21	)		-			(.21	)		29.03		8.18			765		.98	(6)		.98	(6)		1.74	(6)
	Year ended 12/31/2011		28.10		.47		(1.06	)		(.59	)		(.48	)		-			(.48	)		27.03		(2.11	)		737		.97			.97			1.70
	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

Class R-4:	Six months ended 6/30/2012(4)(5)		27.04		.30		1.97			2.27			(.26	)		-			(.26	)		29.05		8.39			683		.65	(6)		.65	(6)		2.07	(6)
	Year ended 12/31/2011		28.12		.56		(1.07	)		(.51	)		(.57	)		-			(.57	)		27.04		(1.83	)		660		.65			.65			2.02
	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

Class R-5:	Six months ended 6/30/2012(4)(5)		27.08		.34		1.97			2.31			(.30	)		-			(.30	)		29.09		8.53			726		.35	(6)		.35	(6)		2.35	(6)
	Year ended 12/31/2011		28.15		.65		(1.07	)		(.42	)		(.65	)		-			(.65	)		27.08		(1.50	)		761		.35			.35			2.31
	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

Class R-6:	Six months ended 6/30/2012(4)(5)		27.08		.35		1.97			2.32			(.31	)		-			(.31	)		29.09		8.56			2,617		.30	(6)		.30	(6)		2.41	(6)
	Year ended 12/31/2011		28.15		.66		(1.06	)		(.40	)		(.67	)		-			(.67	)		27.08		(1.45	)		2,456		.30			.30			2.37
	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(4)		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
	2012(4)(5)			2011			2010			2009			2008			2007

Portfolio turnover rate for all share classes		9	%		28	%		23	%		28	%		31	%		22	%

(1)Based on average shares outstanding.

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

(3)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.

(4)Based on operations for the period shown and, accordingly, is not representative of a full year.

(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, 2012, through June 30, 2012).

Actual expenses:

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

Hypothetical example for comparison purposes:

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

Notes:

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

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 1/1/2012		Ending account value 6/30/2012		Expenses paid during period*		Annualized expense ratio

Class A -- actual return	$	1,000.00	$	1,083.83	$	3.26		.63	%
Class A -- assumed 5% return		1,000.00		1,021.73		3.17		.63
Class B -- actual return		1,000.00		1,079.82		7.19		1.39
Class B -- assumed 5% return		1,000.00		1,017.95		6.97		1.39
Class C -- actual return		1,000.00		1,080.05		7.40		1.43
Class C -- assumed 5% return		1,000.00		1,017.75		7.17		1.43
Class F-1 -- actual return		1,000.00		1,084.14		3.47		.67
Class F-1 -- assumed 5% return		1,000.00		1,021.53		3.37		.67
Class F-2 -- actual return		1,000.00		1,085.09		2.07		.40
Class F-2 -- assumed 5% return		1,000.00		1,022.87		2.01		.40
Class 529-A -- actual return		1,000.00		1,083.44		3.78		.73
Class 529-A -- assumed 5% return		1,000.00		1,021.23		3.67		.73
Class 529-B -- actual return		1,000.00		1,079.08		7.91		1.53
Class 529-B -- assumed 5% return		1,000.00		1,017.26		7.67		1.53
Class 529-C -- actual return		1,000.00		1,079.07		7.81		1.51
Class 529-C -- assumed 5% return		1,000.00		1,017.35		7.57		1.51
Class 529-E -- actual return		1,000.00		1,082.31		5.07		.98
Class 529-E -- assumed 5% return		1,000.00		1,019.99		4.92		.98
Class 529-F-1 -- actual return		1,000.00		1,084.67		2.64		.51
Class 529-F-1 -- assumed 5% return		1,000.00		1,022.33		2.56		.51
Class R-1 -- actual return		1,000.00		1,080.15		7.29		1.41
Class R-1 -- assumed 5% return		1,000.00		1,017.85		7.07		1.41
Class R-2 -- actual return		1,000.00		1,079.62		7.24		1.40
Class R-2 -- assumed 5% return		1,000.00		1,017.90		7.02		1.40
Class R-3 -- actual return		1,000.00		1,081.80		5.07		.98
Class R-3 -- assumed 5% return		1,000.00		1,019.99		4.92		.98
Class R-4 -- actual return		1,000.00		1,083.88		3.37		.65
Class R-4 -- assumed 5% return		1,000.00		1,021.63		3.27		.65
Class R-5 -- actual return		1,000.00		1,085.35		1.81		.35
Class R-5 -- assumed 5% return		1,000.00		1,023.12		1.76		.35
Class R-6 -- actual return		1,000.00		1,085.64		1.56		.30
Class R-6 -- assumed 5% return		1,000.00		1,023.37		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 366 (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, 2013. 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 objectives 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.

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 investment objectives, risks, charges and expenses. This and other important information is contained in the fund 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 800/421-4225 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, 2012, 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, 2012, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

Lit. No. MFGESR-904-0812P

Litho in USA BBC/RRD/8087-S33497

Printed on paper containing 10% post-consumer waste

Printed with inks containing soy and/or vegetable oil

(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, 2012

Common stocks — 90.58%	Shares			Value (000)

ENERGY — 12.76%
Apache Corp.		4,310,000		$	378,806
Baker Hughes Inc.		11,915,000			489,706
BP PLC1		128,484,340			860,866
BP PLC (ADR)		3,676,953			149,064
Canadian Natural Resources, Ltd.		5,540,000			148,608
Chevron Corp.		9,480,000			1,000,140
ConocoPhillips		10,675,000			596,519
Devon Energy Corp.		3,155,000			182,958
Diamond Offshore Drilling, Inc.		2,025,000			119,738
Eni SpA1		2,698,000			57,579
EOG Resources, Inc.		4,232,200			381,364
Range Resources Corp.		245,000			15,158
Royal Dutch Shell PLC, Class A (ADR)		15,357,000			1,035,523
Royal Dutch Shell PLC, Class B1		12,365,265			431,550
Royal Dutch Shell PLC, Class B (ADR)		2,975,498			208,077
Schlumberger Ltd.		15,674,999			1,017,464
TOTAL SA1		3,000,000			135,387
					7,208,507

MATERIALS — 3.87%
ArcelorMittal1		7,540,000			116,479
Barrick Gold Corp.		3,325,000			124,920
Dow Chemical Co.		42,502,000			1,338,813
International Flavors & Fragrances Inc.		2,892,898			158,531
POSCO1		136,000			43,426
Praxair, Inc.		2,939,500			319,612
United States Steel Corp.		4,160,000			85,696
					2,187,477

INDUSTRIALS — 11.36%
3M Co.		1,435,000			128,576
CSX Corp.		31,422,748			702,613
Danaher Corp.		4,730,000			246,338
Deere & Co.		2,800,000			226,436
Emerson Electric Co.		2,130,000			99,215
European Aeronautic Defence and Space Co. EADS NV1		3,935,000			139,546
General Dynamics Corp.		13,059,800			861,424
General Electric Co.		27,725,000			577,789
Illinois Tool Works Inc.		6,400,000			338,496
Lockheed Martin Corp.		2,790,820			243,025
Masco Corp.2		23,258,069			322,589
R.R. Donnelley & Sons Co.2		10,135,000			119,289
Republic Services, Inc.		5,500,000			145,530
Southwest Airlines Co.		13,000,000			119,860
Union Pacific Corp.		6,386,900			762,021
United Continental Holdings, Inc.3		4,350,000			105,836
United Parcel Service, Inc., Class B		4,750,000			374,110
United Technologies Corp.		7,561,852			571,147
Waste Management, Inc.		10,100,700			337,363
					6,421,203

CONSUMER DISCRETIONARY — 12.47%
Amazon.com, Inc.3		3,100,000			707,885
Carnival Corp., units		1,000,000			34,270
Comcast Corp., Class A		28,838,400			921,964
Comcast Corp., Class A, special nonvoting shares		7,000,000			219,800
Daimler AG1		2,164,475			97,345
DIRECTV, Class A3		2,500,000			122,050
General Motors Co.3		35,490,500			699,873
Harley-Davidson, Inc.		2,990,000			136,733
Home Depot, Inc.		25,700,000			1,361,843
Honda Motor Co., Ltd.1		1,125,000			39,189
Johnson Controls, Inc.		10,161,150			281,565
Kohl’s Corp.		6,744,000			306,784
McDonald’s Corp.		2,000,000			177,060
News Corp., Class A		31,725,000			707,150
NIKE, Inc., Class B		3,578,100			314,086
Nordstrom, Inc.		1,500,000			74,535
Time Warner Cable Inc.		4,812,727			395,125
Time Warner Inc.		11,624,000			447,524
					7,044,781

CONSUMER STAPLES — 11.62%
Altria Group, Inc.		30,125,000			1,040,819
Avon Products, Inc.		3,083,300			49,980
Coca-Cola Co.		6,803,300			531,950
ConAgra Foods, Inc.		5,521,100			143,162
CVS/Caremark Corp.		11,000,000			514,030
General Mills, Inc.		3,920,000			151,077
H.J. Heinz Co.		2,750,000			149,545
Hillshire Brands Co.		1,000,000			28,990
Kellogg Co.		1,000,000			49,330
Kimberly-Clark Corp.		1,500,000			125,655
Kraft Foods Inc., Class A		18,374,168			709,610
Molson Coors Brewing Co., Class B		3,307,400			137,621
PepsiCo, Inc.		6,097,500			430,849
Philip Morris International Inc.		27,991,072			2,442,501
Reynolds American Inc.		1,333,332			59,827
					6,564,946

HEALTH CARE — 7.95%
Abbott Laboratories		18,685,000			1,204,622
Alexion Pharmaceuticals, Inc.3		2,350,000			233,355
Amgen Inc.		14,290,000			1,043,742
Bayer AG1		1,500,000			108,163
Boston Scientific Corp.3		12,830,000			72,746
Express Scripts Holding Co.3		3,240,000			180,889
Gilead Sciences, Inc.3		10,930,000			560,490
Johnson & Johnson		600,000			40,536
Medtronic, Inc.		3,562,500			137,976
Merck & Co., Inc.		8,175,000			341,306
Novartis AG1		3,697,000			206,219
Novartis AG (ADR)		921,556			51,515
Pfizer Inc		4,025,000			92,575
St. Jude Medical, Inc.		5,473,000			218,427
					4,492,561

FINANCIALS — 5.70%
American Express Co.		2,503,500			145,729
Aon PLC, Class A		8,975,000			419,850
Bank of New York Mellon Corp.		2,664,800			58,492
Capital One Financial Corp.		6,500,000			355,290
Citigroup Inc.		20,110,455			551,228
Credit Suisse Group AG1		6,239,400			113,986
Fifth Third Bancorp		1,357,700			18,193
Genworth Financial, Inc., Class A3		12,844,101			72,698
HSBC Holdings PLC (ADR)		1,529,416			67,493
HSBC Holdings PLC (United Kingdom)1		4,869,240			42,934
JPMorgan Chase & Co.		19,155,000			684,408
Regions Financial Corp.		13,400,000			90,450
Société Générale1,3		2,932,877			69,149
State Street Corp.		5,304,100			236,775
Wells Fargo & Co.		8,850,000			295,944
					3,222,619

INFORMATION TECHNOLOGY — 14.13%
Accenture PLC, Class A		2,250,000			135,203
Adobe Systems Inc.3		5,305,000			171,723
Apple Inc.3		2,155,000			1,258,520
Automatic Data Processing, Inc.		4,023,043			223,923
Cisco Systems, Inc.		4,643,000			79,720
Corning Inc.		5,500,000			71,115
Flextronics International Ltd.3		8,176,500			50,694
Hewlett-Packard Co.		14,000,000			281,540
Intel Corp.		21,254,700			566,438
International Business Machines Corp.		1,624,741			317,767
KLA-Tencor Corp.		6,276,900			309,137
Linear Technology Corp.		4,450,000			139,418
Maxim Integrated Products, Inc.		2,757,700			70,707
Microsoft Corp.		52,650,500			1,610,579
Nokia Corp.1		47,125,000			97,080
Nokia Corp. (ADR)		5,652,400			11,700
Oracle Corp.		33,385,000			991,535
QUALCOMM Inc.		4,951,300			275,688
Samsung Electronics Co. Ltd.1		375,500			398,114
Texas Instruments Inc.		22,825,000			654,849
Xilinx, Inc.		4,254,500			142,824
Yahoo! Inc.3		8,107,420			128,340
					7,986,614

TELECOMMUNICATION SERVICES — 5.46%
AT&T Inc.		49,300,000			1,758,038
CenturyLink, Inc.		6,096,000			240,731
Sprint Nextel Corp., Series 13		143,380,000			467,419
Verizon Communications Inc.		13,944,600			619,698
					3,085,886

UTILITIES — 3.20%
Dominion Resources, Inc.		9,403,824			507,806
Exelon Corp.		5,120,600			192,637
FirstEnergy Corp.		4,443,500			218,576
GDF SUEZ1		18,639,655			444,722
NextEra Energy, Inc.		300,000			20,643
PG&E Corp.		2,225,000			100,726
Public Service Enterprise Group Inc.		10,000,000			325,000
					1,810,110

MISCELLANEOUS — 2.06%
Other common stocks in initial period of acquisition					1,162,571


Total common stocks (cost: $38,608,150,000)					51,187,275



Warrants — 0.00%

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


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


	Shares or
Convertible securities — 0.59%	principal amount

MATERIALS — 0.09%
ArcelorMittal 5.00% convertible debenture 2014	$	48,620,000			50,079


CONSUMER DISCRETIONARY — 0.50%
General Motors Co., Series B, 4.75% convertible preferred 2013		8,611,850			285,913


Total convertible securities (cost: $462,252,000)					335,992


	Principal amount
Bonds & notes — 1.23%		(000	)

ENERGY — 0.01%
Chevron Corp. 4.95% 2019	$	5,000			6,038


MATERIALS — 0.01%
Dow Chemical Co. 4.125% 2021		500			538
Rio Tinto Finance (USA) Ltd. 9.00% 2019		3,780			5,178
					5,716

INDUSTRIALS — 0.06%
Burlington Northern Santa Fe LLC 5.75% 2018		5,000			5,955
CSX Corp. 6.25% 2015		5,000			5,701
Honeywell International Inc. 5.00% 2019		4,090			4,875
Norfolk Southern Corp. 5.75% 2018		2,500			2,971
Raytheon Co. 4.40% 2020		3,055			3,476
Union Pacific Corp. 6.125% 2020		5,000			6,187
United Technologies Corp. 4.50% 2020		5,475			6,360
Waste Management, Inc. 2.60% 2016		445			457
					35,982


CONSUMER DISCRETIONARY — 0.03%
Comcast Corp. 6.30% 2017		5,120			6,166
Kohl’s Corp. 6.25% 2017		3,500			4,206
News America Inc. 6.90% 2019		5,000			6,160
					16,532

CONSUMER STAPLES — 0.03%
British American Tobacco International Finance PLC 9.50% 20184		5,000			6,819
Kraft Foods Inc. 2.625% 2013		2,555			2,594
PepsiCo, Inc. 2.50% 2016		2,500			2,628
Tesco PLC 5.50% 20174		2,506			2,914
					14,955

HEALTH CARE — 0.03%
Boston Scientific Corp. 6.00% 2020		1,250			1,494
Cardinal Health, Inc. 5.80% 2016		2,905			3,367
Novartis Securities Investment Ltd. 5.125% 2019		2,500			2,986
Pfizer Inc 6.20% 2019		2,500			3,140
Roche Holdings Inc. 6.00% 20194		2,500			3,117
WellPoint, Inc. 7.00% 2019		4,200			5,225
					19,329

FINANCIALS — 0.22%
Bank of America Corp. 3.75% 2016		225			227
Bank of America Corp., Series K, junior subordinated 8.00% noncumulative (undated)5		3,335			3,478
Bank of America Corp., Series L, 3.625% 2016		250			252
Bank of America Corp., Series M, junior subordinated 8.125% noncumulative (undated)5		3,335			3,504
Boston Properties, Inc. 5.875% 2019		5,000			5,776
Citigroup Capital XXI 8.30% 20775		687			690
Citigroup Inc. 4.587% 2015		1,387			1,452
JPMorgan Chase & Co., Series I, junior subordinated 7.90% (undated)5		62,936			69,236
Northern Trust Corp. 4.625% 2014		2,650			2,837
Regions Bank, junior subordinated 7.50% 2018		4,350			4,905
Regions Financial Corp. 7.75% 2014		13,082			14,161
Simon Property Group, LP 4.20% 2015		2,600			2,743
SLM Corp., Series A, 5.125% 2012		1,000			1,004
Société Générale, junior subordinated 5.922% (undated)4,5		20,955			14,249
					124,514

INFORMATION TECHNOLOGY — 0.01%
Cisco Systems, Inc. 4.95% 2019		2,500			2,954
Xerox Corp. 2.95% 2017		750			759
					3,713

TELECOMMUNICATION SERVICES — 0.41%
AT&T Inc. 4.85% 2014		5,000			5,329
Sprint Capital Corp. 6.90% 2019		17,200			16,254
Sprint Nextel Corp. 11.50% 20214		101,775			113,734
Sprint Nextel Corp. 8.375% 2017		5,300			5,459
Sprint Nextel Corp. 9.125% 20174		83,400			87,778
Vodafone Group PLC 5.625% 2017		2,000			2,344
					230,898

MORTGAGE-BACKED OBLIGATIONS6 — 0.10%
Fannie Mae 3.00% 2027		5,000			5,241
Fannie Mae 3.50% 2025		4,118			4,357
Fannie Mae 3.50% 2042		3,000			3,172
Fannie Mae 4.00% 2041		13,960			15,073
Fannie Mae 4.50% 2041		9,119			10,041
Fannie Mae 5.00% 2041		9,430			10,470
Fannie Mae 6.00% 2038		333			368
Fannie Mae 6.00% 2038		3,480			3,837
Fannie Mae 6.00% 2038		3,583			3,934
					56,493

BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 0.32%
Federal Home Loan Bank 3.625% 2013		50,000			52,159
Freddie Mac 2.125% 2012		10,000			10,045
Freddie Mac 5.00% 2014		10,000			10,930
U.S. Treasury 0.125% 20167		4,169			4,345
U.S. Treasury 0.125% 20227		3,049			3,232
U.S. Treasury 0.875% 2017		500			504
U.S. Treasury 1.00% 2016		2,500			2,540
U.S. Treasury 1.00% 2017		3,500			3,549
U.S. Treasury 1.125% 2019		3,000			3,006
U.S. Treasury 1.25% 2014		10,000			10,150
U.S. Treasury 1.75% 2022		1,000			1,009
U.S. Treasury 4.00% 2018		10,000			11,842
U.S. Treasury 4.125% 2015		10,000			11,052
U.S. Treasury 4.625% 2016		20,000			23,418
U.S. Treasury 8.00% 2021		20,000			31,422
					179,203


Total bonds & notes (cost: $636,515,000)					693,373



Short-term securities — 7.32%

Abbott Laboratories 0.14%–0.16% due 7/31–9/10/20124		117,200			117,178
Chariot Funding, LLC 0.18% due 7/19/20124		50,000			49,995
Coca-Cola Co. 0.17%–0.23% due 8/22–10/15/20124		83,800			83,770
Fannie Mae 0.07%–0.23% due 7/16/2012–1/7/2013		1,053,707			1,053,281
Federal Farm Credit Banks 0.07%–0.20% due 7/23/2012–4/30/2013		341,000			340,802
Federal Home Loan Bank 0.10%–0.21% due 7/13/2012–6/14/2013		646,162			645,723
Freddie Mac 0.07%–0.18% due 7/11/2012–1/23/2013		719,442			719,155
Google Inc. 0.14% due 8/10/20124		28,000			27,994
Medtronic Inc. 0.11% due 7/5/20124		50,000			49,999
Merck & Co. Inc. 0.13% due 8/22/20124		50,000			49,990
National Rural Utilities Cooperative Finance Corp. 0.14% due 7/19/2012		45,300			45,297
NetJets Inc. 0.12% due 7/24/20124		6,000			6,000
Regents of the University of California 0.22% due 10/22/2012		26,607			26,589
Straight-A Funding LLC 0.16%–0.18% due 7/19–8/8/20124		52,400			52,392
U.S. Bank, N.A. 0.14% due 7/2/2012		50,000			49,999
U.S. Treasury Bills 0.082%–0.147% due 7/19–10/25/2012		682,800			682,729
Variable Funding Capital Company LLC 0.16%–0.19% due 7/16–8/27/20124		113,409			113,382
Wal-Mart Stores, Inc. 0.13% due 7/27/20124		24,500			24,498

Total short-term securities (cost: $4,138,728,000)					4,138,773


Total investment securities (cost: $43,857,415,000)					56,355,413
Other assets less liabilities					157,521

Net assets				$	56,512,934