NEF 485BPOS Filing

SEC. File Nos. 002-83848

811-03735

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM N-1A

Registration Statement

Under

the Securities Act of 1933

Post-Effective Amendment No. 33

and

Registration Statement

Under

The Investment Company Act of 1940

Amendment No. 30

__________________

THE NEW ECONOMY FUND

(Exact Name of Registrant as Specified in Charter)

333 South Hope Street

Los Angeles, California 90071-1447

(Address of Principal Executive Offices)

Registrant's telephone number, including area code:

(213) 486-9200

__________________

Chad L. Norton

Capital Research and Management Company

333 South Hope Street

Los Angeles, California 90071-1447

(Name and Address of Agent for Service)

__________________

Copies to:

Michael Glazer

Paul, Hastings, Janofsky & Walker LLP

515 South Flower Street, 25th Floor

Los Angeles, California 90071-2228

(Counsel for the Registrant)

__________________

Approximate date of proposed public offering:

It is proposed that this filing become effective on February 1, 2007, pursuant to paragraph (b) of rule 485.

<PAGE>

[Logo - American Funds/R/] The right choice for the long term/(R)/

The New Economy Fund/(R)/

PROSPECTUS

February 1, 2007

TABLE OF CONTENTS

1 Risk/Return summary
5 Fees and expenses of the fund
7 Investment objective, strategies and risks
11 Management and organization
14 Shareholder information
15 Choosing a share class
17 Purchase and exchange of shares
21 Sales charges
25 Sales charge reductions and waivers
28 Rollovers from retirement plans to IRAs
29 Plans of distribution
29 Other compensation to dealers
30 How to sell shares
32 Distributions and taxes
33 Financial highlights

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

<PAGE>

Risk/Return summary

The fund seeks to make your investment grow over time by investing primarily in
stocks of companies in the services and information areas of the global economy.

The fund is designed for investors seeking greater capital appreciation through
investments in stocks of issuers based around the world. Investors in the fund
should have a long-term perspective and be able to tolerate potentially wide
price fluctuations.
Your investment in the fund is subject to risks, including the possibility that
the value of the fund's portfolio holdings may fluctuate in response to events
specific to the companies or markets in which the fund invests, as well as
economic, political or social events in the United States or abroad. The fund
may be subject to additional risks because it invests in a more limited group of
sectors and industries than the broad market.

Although all securities in the fund's portfolio may be adversely affected by
currency fluctuations or global economic, political or social instability,
securities issued by entities based outside the United States may be affected to
a greater extent.

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

The New Economy Fund / Prospectus

<PAGE>

HISTORICAL INVESTMENT RESULTS
The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 4 shows how the fund's
average annual total returns for various periods compare with different broad
measures of market performance. This information provides some indication of the
risks of investing in the fund. All fund results reflect the reinvestment of
dividends and capital gain distributions, if any. Unless otherwise noted, fund
results reflect any fee waivers and/or expense reimbursements in effect during
the period presented. Past results (before and after taxes) are not predictive
of future results.

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

'97 28.85%
'98 28.84
'99 45.88
'00 -16.20
'01 -17.34
'02 -26.01
'03 38.71
'04 12.45
'05 12.17
'06 14.73

[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 27.14% (quarter ended December 31, 1999)
LOWEST -25.23% (quarter ended September 30, 2001)

The New Economy Fund / Prospectus
<PAGE>

Unlike the bar chart on the previous page, the Investment Results table on the
following page reflects, as required by Securities and Exchange Commission
rules, the fund's investment results with the following maximum initial or
contingent deferred sales charges imposed:

. Class A share results reflect the maximum initial sales charge of 5.75%. This
charge is reduced for purchases of $25,000 or more and eliminated for
purchases of $1 million or more.

. Class B share results reflect the applicable contingent deferred sales
charge. For example, results for the one-year period shown reflect a
contingent deferred sales charge of 5%. These charges begin to decline one
year after purchase and are eliminated six years after purchase.

. Class C share results for the one-year period shown reflect a contingent
deferred sales charge of 1%, which only applies if shares are sold within one
year of purchase.

. Class 529-E and Class F shares are sold without any initial or contingent
deferred sales charge.

Results would be higher if calculated without sales charges. The references
above to Class A, B, C or F sales charges also refer to the corresponding Class
529-A, 529-B, 529-C or 529-F sales charges.

The Investment Results table shows the fund's results on both a pretax and
after-tax basis, as required by Securities and Exchange Commission rules.
After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. Total returns shown "after taxes on distributions"
reflect the effect of taxes on distributions (for example, dividends or capital
gain distributions) by the fund. Total returns shown "after taxes on
distributions and sale of fund shares" assume that you sold your fund shares at
the end of the particular time period and, as a result, reflect the effect of
both taxes on distributions by the fund and taxes on any gain or loss realized
upon the sale of the shares. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes.
YOUR ACTUAL AFTER-TAX RETURNS DEPEND ON YOUR INDIVIDUAL TAX SITUATION AND LIKELY
WILL DIFFER FROM THE RESULTS SHOWN BELOW. IN ADDITION, AFTER-TAX RETURNS MAY NOT
BE RELEVANT IF YOU HOLD YOUR FUND SHARES THROUGH A TAX-DEFERRED ARRANGEMENT,
SUCH AS A 401(K) PLAN, INDIVIDUAL RETIREMENT ACCOUNT (IRA) OR 529 COLLEGE
SAVINGS PLAN.

Unlike the Investment Results table on page 4, the Additional Investment Results
table on page 8 reflects the fund's results calculated without sales charges.

The New Economy Fund / Prospectus

<PAGE>

INVESTMENT RESULTS (WITH MAXIMUM SALES CHARGES)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
-------------------------------------------------------------------------------

CLASS A -- FIRST SOLD 12/1/83
Before taxes 8.13% 6.95% 8.91% 12.24%
After taxes on distributions 8.02 6.90 7.89 N/A
After taxes on distributions and 5.44 6.02 7.45 N/A
sale of fund shares

1 YEAR 5 YEARS LIFETIME/1/
-------------------------------------------------------------------

CLASS B -- FIRST SOLD 3/15/00
Before taxes 8.80% 7.08% -1.06%
CLASS C -- FIRST SOLD 3/15/01
Before taxes 12.77 7.35 4.60
CLASS F -- FIRST SOLD 3/15/01
Before taxes 14.71 8.19 5.44
CLASS 529-A -- FIRST SOLD 2/15/02
Before taxes 8.09 N/A 8.56
CLASS 529-B -- FIRST SOLD 2/19/02
Before taxes 8.66 N/A 9.14
CLASS 529-C -- FIRST SOLD 2/21/02
Before taxes 12.70 N/A 9.75
CLASS 529-E -- FIRST SOLD 3/15/02
Before taxes 14.29 N/A 8.25
CLASS 529-F -- FIRST SOLD 10/11/02
Before taxes 14.90 N/A 20.63

1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
-------------------------------------------------------------------------------

INDEXES (BEFORE TAXES)
S&P 500/3/ 15.78% 6.19% 8.42% 12.56%
Lipper Multi-Cap Growth Funds 9.21 4.73 6.41 10.63
Index/4/
Global Service and Information 17.32 7.74 8.13 N/A
Index/5/
Russell 2500/TM/ Index/6/ 16.17 12.19 11.26 12.38

/1/ Lifetime results for each share class are measured from the date the share
class was first sold.
/2/ Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold. In prior years, each index may have included different
funds or securities from those that constitute the current year's index.
/3/ Standard & Poor's 500 Composite Index is a market capitalization-weighted
index based on the average weighted performance of 500 widely held common
stocks. This index is unmanaged and includes reinvested dividends and/or
distributions, but does not reflect sales charges, commissions, expenses or
taxes.
/4/ Lipper Multi-Cap Growth Funds Index is an equally weighted index of funds that
invest in a variety of market capitalization ranges without concentrating 75%
of their equity assets in any one market capitalization range over an extended
period of time. Multi-cap growth funds typically have an above-average
price-to-earnings ratio, price-to-book ratio and three-year sales-per-share
growth value, compared to the S&P SuperComposite 1500 Index. The results of the
underlying funds in the index include the reinvestment of dividends and capital
gain distributions, as well as brokerage commissions paid by the funds for
portfolio transactions, but do not reflect sales charges or taxes.
/5/ Global Service and Information Index is a subset of the unmanaged MSCI World
Index, which is a market-capitalization-weighted index that measures the
returns of companies in 23 developed countries. This subset is 70%
U.S.-weighted and consists specifically of companies in the service and
information industries that together represent approximately 60% of the MSCI
World Index. The index is compiled by Capital Research and Management Company,
is unmanaged, and includes reinvested dividends and/or distributions, but does
not reflect sales charges, commissions, expenses or taxes.
/6/ Russell 2500 Index tracks U.S. small and medium capitalization stocks. This
index is unmanaged and includes reinvested dividends and/or distributions, but
does not reflect sales charges, commissions, expenses or taxes.

The New Economy Fund / Prospectus
<PAGE>

Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS A/1/ CLASS B/1/ CLASS C/1/ CLASS 529-E/2/ CLASS F/1,3/
--------------------------------------------------------------------------------------------

Maximum initial sales
charge on purchases 5.75%/4/ none none none none
(as a percentage of
offering price)
--------------------------------------------------------------------------------------------
Maximum sales charge none none none none none
on reinvested
dividends
--------------------------------------------------------------------------------------------
Maximum contingent none/5/ 5.00%/6/ 1.00%/7/ none none
deferred sales charge
--------------------------------------------------------------------------------------------
Redemption or none none none none none
exchange fees

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
CLASS A CLASS B CLASS C CLASS F
-------------------------------------------------------------------------------

Management fees/8/ 0.41% 0.41% 0.41% 0.41%
-------------------------------------------------------------------------------
Distribution and/or service 0.24 1.00 1.00 0.25
(12b-1) fees/9/
-------------------------------------------------------------------------------
Other expenses/10/ 0.17 0.18 0.23 0.17
-------------------------------------------------------------------------------
Total annual fund operating 0.82 1.59 1.64 0.83
expenses/8/

CLASS CLASS CLASS CLASS CLASS
529-A 529-B 529-C 529-E 529-F
-------------------------------------------------------------------------------
Management fees/8/ 0.41% 0.41% 0.41% 0.41% 0.41%
-------------------------------------------------------------------------------
Distribution and/or service 0.16 1.00 0.99 0.50 --
(12b-1) fees/11/
-------------------------------------------------------------------------------
Other expenses/10,12/ 0.28 0.31 0.31 0.27 0.27
-------------------------------------------------------------------------------
Total annual fund operating 0.85 1.72 1.71 1.18 0.68
expenses/8/

/1/ Includes corresponding 529 share class. Accounts holding these 529 shares are
subject to a $10 account setup fee and an annual $10 account maintenance fee,
which are not reflected in this table.
/2/ Available only to employer-sponsored 529 plans. Accounts holding these shares
are subject to a $10 account setup fee and an annual $10 account maintenance
fee, which are not reflected in this table.
/3/ Class F and 529-F shares are generally available only to fee-based programs of
investment dealers that have special agreements with the fund's distributor and
to certain registered investment advisers.
/4/ The initial sales charge is reduced for purchases of $25,000 or more and
eliminated for purchases of $1 million or more.
/5/ A contingent deferred sales charge of 1.00% applies on certain redemptions
made within one year following purchases of $1 million or more made without an
initial sales charge.
/6/ The contingent deferred sales charge is reduced one year after purchase and
eliminated six years after purchase.
/7/ The contingent deferred sales charge is eliminated one year after purchase.
/8/ The fund's investment adviser is currently waiving 10% of its management fee.
The waiver may be discontinued at any time in consultation with the fund's
board, but it is expected to continue at this level until further review. The
fund's investment adviser and board intend to review the waiver as
circumstances warrant. Expenses shown above do not reflect any waiver.
Information regarding the effect of any waiver on total annual fund operating
expenses can be found in the Financial Highlights table in this prospectus and
in the fund's annual report.
/9/ Class A and F 12b-1 fees may not exceed .25% and .50%, respectively, of each
class' average net assets annually. Class B and C 12b-1 fees may not exceed
1.00% of each class' average net assets annually.
/10/ Includes custodial, legal, transfer agent and subtransfer agent/recordkeeping
payments and various other expenses. Subtransfer agent/recordkeeping payments
may be made to third parties (including affiliates of the fund's investment
adviser) that provide subtransfer agent, recordkeeping and/or shareholder
services with respect to certain shareholder accounts in lieu of the transfer
agent providing such services. The amount paid for subtransfer
agent/recordkeeping services will vary depending on the share class and
services provided, and typically ranges from $3 to $19 per account.
/11/ Class 529-A and 529-F 12b-1 fees may not exceed .50% of each class' average
net assets annually. Class 529-B and 529-C 12b-1 fees may not exceed 1.00% of
each class' average net assets annually. Class 529-E 12b-1 fees may not exceed
.75% of the class' average net assets annually.
/12/ Includes .10% paid to a state or states for oversight and administrative
services.

The New Economy Fund / Prospectus

<PAGE>

EXAMPLES

The examples below are intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The examples do not reflect the impact of any fee waivers
or expense reimbursements. The examples assuming redemption do not reflect the
effect of any taxable gain or loss at the time of the redemption.

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------------------------

Class A/1/ $654 $822 $1,004 $1,530
-------------------------------------------------------------------------------
Class B -- assuming redemption/2/ 662 902 1,066 1,683
-------------------------------------------------------------------------------
Class B -- assuming no redemption/3/ 162 502 866 1,683
-------------------------------------------------------------------------------
Class C -- assuming redemption/4/ 267 517 892 1,944
-------------------------------------------------------------------------------
Class C -- assuming no redemption 167 517 892 1,944
-------------------------------------------------------------------------------
Class F -- excluding intermediary 85 265 460 1,025
fees/5/
-------------------------------------------------------------------------------
Class 529-A/1,6/ 677 870 1,078 1,668
-------------------------------------------------------------------------------
Class 529-B -- assuming 695 981 1,190 1,900
redemption/2,6/
-------------------------------------------------------------------------------
Class 529-B -- assuming no 195 581 990 1,900
redemption/3,6/
-------------------------------------------------------------------------------
Class 529-C -- assuming 294 577 985 2,118
redemption/4,6/
-------------------------------------------------------------------------------
Class 529-C -- assuming no redemption/6/ 194 577 985 2,118
-------------------------------------------------------------------------------
Class 529-E/6/ 140 414 707 1,534
-------------------------------------------------------------------------------
Class 529-F -- excluding intermediary 89 257 437 952
fees/5,6/

/1/ Reflects the maximum initial sales charge in the first year.
/2/ Reflects applicable contingent deferred sales charges through year six and
Class A or 529-A expenses for years nine and 10 because Class B and 529-B
shares automatically convert to Class A and 529-A shares, respectively, after
eight years.
/3/ Reflects Class A or 529-A expenses for years nine and 10 because Class B and
529-B shares automatically convert to Class A and 529-A shares, respectively,
after eight years.
/4/ Reflects a contingent deferred sales charge in the first year.
/5/ Does not include fees charged by financial intermediaries, which are
independent of fund expenses and will increase the overall cost of your
investment. Intermediary fees typically range from .75% to 1.50% of assets
annually depending on the services offered.
/6/ Reflects an initial $10 account setup fee and an annual $10 account
maintenance fee.

The New Economy Fund / Prospectus
<PAGE>

Investment objective, strategies and risks

The fund seeks to provide you with long-term growth of capital. It invests
primarily in stocks of companies in the services and information areas of the
global economy, although a portion of its assets may be invested outside these
areas. Companies in the services and information areas include, for example,
those involved in the fields of telecommunications, computer systems and
software, the Internet, broadcasting and publishing, health care, advertising,
leisure, tourism, financial services, distribution and transportation. Providing
you with current income is a secondary consideration.
The prices of securities held by the fund may decline in response to certain
events, including those directly involving the companies whose securities are
owned by the fund; conditions affecting the general economy; overall market
changes; local, regional or global political, social or economic instability;
and currency, interest rate and commodity price fluctuations. The
growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss, particularly in the case of
smaller capitalization stocks. Because the fund generally invests in securities
of issuers in the services and information areas, it may be more susceptible to
factors adversely affecting these issuers than funds that do not focus on these
areas.

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent and may also be
affected by currency controls; different accounting, auditing, financial
reporting, and legal standards and practices in some countries; expropriation;
changes in tax policy; greater market volatility; differing securities market
structures; higher transaction costs; and various administrative difficulties,
such as delays in clearing and settling portfolio transactions or in receiving
payment of dividends. These risks may be heightened in connection with
investments in developing countries.

The fund may also hold cash or money market instruments. The percentage of the
fund invested in such holdings varies and depends on various factors, including
market conditions and purchases and redemptions of fund shares. A larger
percentage of such holdings could moderate the fund's investment results in a
period of rising market prices.

A larger percentage of cash or money market instruments could reduce the
magnitude of the fund's loss in the event of falling market prices and provide
liquidity to make additional investments or to meet redemptions.

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively valued
companies that, in its opinion, represent above-average long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is through fundamental analysis, which may include meeting with
company executives and employees, suppliers, customers and competitors.
Securities may be sold when the investment adviser believes that they no longer
represent relatively attractive investment opportunities.

The New Economy Fund / Prospectus

<PAGE>

ADDITIONAL INVESTMENT RESULTS
Unlike the Investment Results table on page 4, the table below reflects the
fund's results calculated without sales charges.

ADDITIONAL INVESTMENT RESULTS (WITHOUT SALES CHARGES)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
-------------------------------------------------------------------------------

CLASS A -- FIRST SOLD 12/1/83
Before taxes 14.73% 8.23% 9.56% 12.53%
After taxes on distributions 14.61 8.17 8.53 N/A
After taxes on distributions and 9.74 7.14 8.05 N/A
sale of fund shares
-------------------------------------------------------------------------------

1 YEAR 5 YEARS LIFETIME/1/
-------------------------------------------------------------------

CLASS B -- FIRST SOLD 3/15/00
Before taxes 13.80% 7.38% -1.06%
-------------------------------------------------------------------
CLASS C -- FIRST SOLD 3/15/01
Before taxes 13.77 7.35 4.60
-------------------------------------------------------------------
CLASS F -- FIRST SOLD 3/15/01
Before taxes 14.71 8.19 5.44
-------------------------------------------------------------------
CLASS 529-A -- FIRST SOLD 2/15/02
Before taxes 14.70 N/A 9.89
CLASS 529-B -- FIRST SOLD 2/19/02
Before taxes 13.66 N/A 9.43
CLASS 529-C -- FIRST SOLD 2/21/02
Before taxes 13.70 N/A 9.75
CLASS 529-E -- FIRST SOLD 3/15/02
Before taxes 14.29 N/A 8.25
CLASS 529-F -- FIRST SOLD 10/11/02
Before taxes 14.90 N/A 20.63

1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
-------------------------------------------------------------------------------

The New Economy Fund / Prospectus
<PAGE>

The New Economy Fund / Prospectus

<PAGE>

[pie chart]

INDUSTRY GROUP DIVERSIFICATION AS OF NOVEMBER 30, 2006 (percent of net assets)

13.87% Banks
12.70 Software & services
8.55 Retailing
6.52 Semiconductors & semiconductor equipment
6.51 Health care equipment & services
46.98 Other industries
4.87 Short-term securities & other assets less liabilities

[end pie chart]

Because the fund is actively managed, its holdings will change over time.

For updated information on the fund's portfolio holdings, please visit us at
americanfunds.com.

The New Economy Fund / Prospectus
<PAGE>

Management and organization

INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including the American Funds. Capital Research and Management Company is
a wholly owned subsidiary of The Capital Group Companies, Inc. and is located at
333 South Hope Street, Los Angeles, California 90071, and 135 South State
College Boulevard, Brea, California 92821. Capital Research and Management
Company manages the investment portfolio and business affairs of the fund. The
total management fee paid by the fund, as a percentage of average net assets,
for the previous fiscal year appears in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." A discussion regarding the basis for the
approval of the fund's investment advisory and service agreement by the fund's
board of trustees is contained in the fund's annual report to shareholders for
the fiscal year ended November 30, 2006.

EXECUTION OF PORTFOLIO TRANSACTIONS
The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. The investment adviser strives to obtain best execution
for the fund's portfolio transactions, taking into account a variety of factors
to produce the most favorable total price reasonably attainable under the
circumstances. These factors include the size and type of transaction, the cost
and quality of executions, and the broker-dealer's ability to offer liquidity
and anonymity. For example, with respect to equity transactions, the fund does
not consider the investment adviser as having an obligation to obtain the lowest
available commission rate to the exclusion of price, service and qualitative
considerations. Subject to the considerations outlined above, the investment
adviser may place orders for the fund's portfolio transactions with
broker-dealers who have sold shares of funds managed by the investment adviser,
or who have provided investment research, statistical or other related services
to the investment adviser. In placing orders for the fund's portfolio
transactions, the investment adviser does not commit to any specific amount of
business with any particular broker-dealer. Subject to best execution, the
investment adviser may consider investment research, statistical or other
related services provided to the adviser in placing orders for the fund's
portfolio transactions. However, when the investment adviser places orders for
the fund's portfolio transactions, it does not give any consideration to whether
a broker-dealer has sold shares of the funds managed by the investment adviser.

PORTFOLIO HOLDINGS
Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the lower
portion of the fund's details page on the website. A list of the fund's top 10
equity holdings, updated as of each month-end, is generally posted to this page
within 14 days after the end of the applicable month.

The New Economy Fund / Prospectus

<PAGE>

A link to the fund's complete list of publicly disclosed portfolio holdings,
updated as of each calendar quarter-end, is generally posted to this page within
45 days after the end of the applicable quarter. Both lists remain available on
the website until new information for the next month or quarter is posted.
Portfolio holdings information for the fund is also contained in reports filed
with the Securities and Exchange Commission.

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
decide how their respective segments will be invested. In addition, Capital
Research and Management Company's investment analysts may make investment
decisions with respect to a portion of a fund's portfolio. Investment decisions
are subject to a fund's objective(s), policies and restrictions and the
oversight of the appropriate investment-related committees of Capital Research
and Management Company.

The primary individual portfolio counselors for The New Economy Fund are:

PRIMARY TITLE WITH PORTFOLIO
PORTFOLIO INVESTMENT ADVISER COUNSELOR'S
PORTFOLIO COUNSELOR/ COUNSELOR (OR AFFILIATE) ROLE IN
FUND TITLE EXPERIENCE AND INVESTMENT MANAGEMENT
(IF APPLICABLE) IN THIS FUND EXPERIENCE OF THE FUND

GORDON CRAWFORD 13 years Senior Vice President, Capital Serves as a global
Vice Chairman of (plus 5 years of Research and Management Company equity portfolio
the Board prior experience counselor
as an Investment professional for 36
investment analyst years, all with Capital
for the fund) Research and Management Company
or affiliate

TIMOTHY D. ARMOUR 16 years President and Director, Capital Serves as a global
President and Trustee (plus 5 years of Research and Management Company equity portfolio
prior experience counselor
as an Investment professional for 24
investment analyst years, all with Capital
for the fund) Research and Management Company
or affiliate

MARK E. DENNING 5 years Director, Capital Research and Serves as a global
Senior Vice President (plus 9 years of Management Company equity portfolio
prior experience counselor
as an Investment professional for 25
investment analyst years, all with Capital
for the fund) Research and Management Company
or affiliate
CLAUDIA P. HUNTINGTON 12 years Senior Vice President, Capital Serves as a global
Senior Vice President (plus 11 years of Research and Management Company equity portfolio
prior experience counselor
as an Investment professional for 34
investment analyst years in total; 32 years with
for the fund) Capital Research and Management
Company or affiliate

The New Economy Fund / Prospectus
<PAGE>

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage can be found in the
statement of additional information.

The New Economy Fund / Prospectus

<PAGE>

Shareholder information

SHAREHOLDER SERVICES

American Funds Service Company, the fund's transfer agent, offers a wide range
of services that you can use to alter your investment program should your needs
and circumstances change. These services may be terminated or modified at any
time upon 60 days' written notice. For your convenience, American Funds Service
Company has four service centers across the country.

AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
Call toll-free from anywhere in the United States
(8 a.m. to 8 p.m. ET): 800/421-0180
Access the American Funds website : americanfunds.com

[map of the United States]

Western Western Central Eastern Central Eastern
service center service center service center service center
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 25065 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Santa Ana, San Antonio, Texas Indianapolis, Indiana Norfolk, Virginia
California 78265-9522 46206-6007 23501-2280
92799-5065 Fax: 210/474-4352 Fax: 317/735-6636 Fax: 757/670-4761
Fax: 714/671-7133

A MORE DETAILED DESCRIPTION OF POLICIES AND SERVICES IS INCLUDED IN THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION AND THE OWNER'S GUIDE SENT TO NEW AMERICAN
FUNDS SHAREHOLDERS ENTITLED WELCOME. CLASS 529 SHAREHOLDERS SHOULD ALSO REFER TO
THE APPLICABLE PROGRAM DESCRIPTION FOR INFORMATION ON POLICIES AND SERVICES
SPECIFICALLY RELATING TO THEIR ACCOUNT(S). These documents are available by
writing or calling American Funds Service Company. Certain privileges and/or
services described on the following pages of this prospectus and in the
statement of additional information may not be available to you depending on
your investment dealer. Please see your financial adviser or investment dealer
for more information.

The New Economy Fund / Prospectus
<PAGE>

Choosing a share class
The fund offers different classes of shares through this prospectus. Class A, B,
C and F shares are available through various investment programs or accounts,
including certain types of retirement plans (see limitations below). The
services or share classes available to you may vary depending upon how you wish
to purchase shares of the fund.

Investors residing in any state may purchase Class 529 shares through an account
established with a 529 college savings plan managed by the American Funds
organization. Class 529-A, 529-B, 529-C and 529-F shares are structured
similarly to the corresponding Class A, B, C and F shares. For example, the same
initial sales charges apply to Class 529-A shares as to Class A shares. Class
529-E shares are available only to investors participating through an eligible
employer plan.

Each share class represents investment in the same portfolio of securities, but
each class has its own sales charge and expense structure, allowing you to
choose the class that best fits your situation. WHEN YOU PURCHASE SHARES OF THE
FUND, YOU SHOULD CHOOSE A SHARE CLASS. IF NONE IS CHOSEN, YOUR INVESTMENT WILL
BE MADE IN CLASS A SHARES OR, IN THE CASE OF A 529 PLAN INVESTMENT, CLASS 529-A
SHARES.

Factors you should consider in choosing a class of shares include:

. how long you expect to own the shares;

. how much you intend to invest;

. total expenses associated with owning shares of each class;

. whether you qualify for any reduction or waiver of sales charges (for
example, Class A or 529-A shares may be a less expensive option over time,
particularly if you qualify for a sales charge reduction or waiver);

. whether you plan to take any distributions in the near future (for example,
the contingent deferred sales charge will not be waived if you sell your Class
529-B or 529-C shares to cover higher education expenses);

. availability of share classes:
-- Class B and C shares are not available to retirement plans that do not
currently invest in such shares and that are eligible to invest in Class R
shares, including employer-sponsored retirement plans such as defined benefit
plans, 401(k) plans, 457 plans, employer-sponsored 403(b) plans, and money
purchase pension and profit-sharing plans; and

-- Class F and 529-F shares are generally available only to fee-based programs
of investment dealers that have special agreements with the fund's
distributor and to certain registered investment advisers.

EACH INVESTOR'S FINANCIAL CONSIDERATIONS ARE DIFFERENT. YOU SHOULD SPEAK WITH
YOUR FINANCIAL ADVISER TO HELP YOU DECIDE WHICH SHARE CLASS IS BEST FOR YOU.

UNLESS OTHERWISE NOTED, REFERENCES IN THE FOLLOWING PAGES TO CLASS A, B, C OR F
SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR 529-F
SHARES.

The New Economy Fund / Prospectus

<PAGE>

SUMMARY OF THE PRIMARY DIFFERENCES AMONG SHARE CLASSES

CLASS A SHARES
Initial sales charge up to 5.75% (reduced for purchases of $25,000 or more
and eliminated for purchases of $1 million or more)
Contingent deferred none (except that a charge of 1.00% applies to certain
sales charge redemptions made within one year following purchases
of $1 million or more without an initial sales charge)
12b-1 fees up to .25% annually (for 529-A shares, may not exceed
.50% annually)
Dividends generally higher than other classes due to lower
annual expenses, but may be lower than F shares,
depending on relative expenses
Purchase maximum none
Conversion none

CLASS B SHARES
Initial sales charge none
Contingent deferred starts at 5.00%, declining to 0% six years after
sales charge purchase
12b-1 fees up to 1.00% annually
Dividends generally lower than A and F shares due to higher
12b-1 fees and other expenses, but higher than C
shares due to lower other expenses
Purchase maximum see the discussion regarding purchase minimums and
maximums in "Purchase and exchange of shares"
Conversion automatic conversion to A or 529-A shares after eight
years, reducing future annual expenses

CLASS C SHARES
Initial sales charge none
Contingent deferred 1.00% if shares are sold within one year after
sales charge purchase
12b-1 fees up to 1.00% annually
Dividends generally lower than other classes due to higher 12b-1
fees and other expenses
Purchase maximum see the discussion regarding purchase minimums and
maximums in "Purchase and exchange of shares"
Conversion automatic conversion to F shares after 10 years,
reducing future annual expenses (529-C shares will not
convert to 529-F shares)

CLASS 529-E SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees currently up to .50% annually (may not exceed .75%
annually)
Dividends generally higher than 529-B and 529-C shares due to
lower 12b-1 fees, but lower than 529-A and 529-F
shares due to higher 12b-1 fees
Purchase maximum none
Conversion none

CLASS F SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees currently up to .25% annually (may not exceed .50%
annually)
Dividends generally higher than B and C shares due to lower
12b-1 fees, and may be higher than A shares, depending
on relative expenses
Purchase maximum none
Conversion none

The New Economy Fund / Prospectus
<PAGE>

Purchase and exchange of shares
THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND AND AMERICAN FUNDS
DISTRIBUTORS, THE FUND'S DISTRIBUTOR, IS REQUIRED BY LAW TO OBTAIN CERTAIN
PERSONAL INFORMATION FROM YOU OR ANY OTHER PERSON(S) ACTING ON YOUR BEHALF IN
ORDER TO VERIFY YOUR OR SUCH PERSON'S IDENTITY. IF YOU DO NOT PROVIDE THE
INFORMATION, THE TRANSFER AGENT MAY NOT BE ABLE TO OPEN YOUR ACCOUNT. IF THE
TRANSFER AGENT IS UNABLE TO VERIFY YOUR IDENTITY OR THAT OF ANY OTHER PERSON(S)
AUTHORIZED TO ACT ON YOUR BEHALF, OR BELIEVES IT HAS IDENTIFIED POTENTIALLY
CRIMINAL ACTIVITY, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO
CLOSE YOUR ACCOUNT OR TAKE SUCH OTHER ACTION THEY DEEM REASONABLE OR REQUIRED BY
LAW.

PURCHASE OF CLASS A, B AND C SHARES
You may generally open an account and purchase Class A, B and C shares by
contacting any financial adviser (who may impose transaction charges in addition
to those described in this prospectus) authorized to sell the fund's shares. You
may purchase additional shares in various ways, including through your financial
adviser and by mail, telephone, the Internet and bank wire.

PURCHASE OF CLASS F SHARES

You may generally open an account and purchase Class F shares only through
fee-based programs of investment dealers that have special agreements with the
fund's distributor and through certain registered investment advisers. These
dealers and advisers typically charge ongoing fees for services they provide.

PURCHASE OF CLASS 529 SHARES
Class 529 shares may be purchased only through an account established with a 529
college savings plan managed by the American Funds organization. You may open
this type of account and purchase 529 shares by contacting any financial adviser
(who may impose transaction charges in addition to those described in this
prospectus) authorized to sell such an account. You may purchase additional
shares in various ways, including through your financial adviser and by mail,
telephone, the Internet and bank wire.

Class 529-E shares may be purchased only by employees participating through an
eligible employer plan.

EXCHANGE
Generally, you may exchange your shares into shares of the same class of other
American Funds without a sales charge. Class A, C or F shares may generally be
exchanged into the corresponding 529 share class without a sales charge. Class B
shares may not be exchanged into Class 529-B shares. EXCHANGES FROM CLASS A, C
OR F SHARES TO THE CORRESPONDING 529 SHARE CLASS, PARTICULARLY IN THE CASE OF
UNIFORM GIFTS TO MINORS ACT OR

The New Economy Fund / Prospectus

<PAGE>

UNIFORM TRANSFERS TO MINORS ACT CUSTODIAL ACCOUNTS, MAY RESULT IN SIGNIFICANT
LEGAL AND TAX CONSEQUENCES AS DESCRIBED IN THE APPLICABLE PROGRAM DESCRIPTION.
PLEASE CONSULT YOUR FINANCIAL ADVISER BEFORE MAKING SUCH AN EXCHANGE.

Exchanges of shares from American Funds money market funds initially purchased
without a sales charge generally will be subject to the appropriate sales
charge. For purposes of computing the contingent deferred sales charge on Class
B and C shares, the length of time you have owned your shares will be measured
from the date of original purchase and will not be affected by any permitted
exchange.

Exchanges have the same tax consequences as ordinary sales and purchases. For
example, to the extent you exchange shares held in a taxable account that are
worth more now than what you paid for them, the gain will be subject to
taxation. See "Transactions by telephone, fax or the Internet" for information
regarding electronic exchanges.

FREQUENT TRADING OF FUND SHARES
The fund and American Funds Distributors reserve the right to reject any
purchase order for any reason. The fund is not designed to serve as a vehicle
for frequent trading. Frequent trading of fund shares may lead to increased
costs to the fund and less efficient management of the fund's portfolio,
resulting in dilution of the value of the shares held by long-term shareholders.
Accordingly, purchases, including those that are part of exchange activity, that
the fund or American Funds Distributors has determined could involve actual or
potential harm to the fund may be rejected.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of trustees has also adopted certain
policies and procedures with respect to frequent purchases and redemptions of
fund shares. Under the fund's "purchase blocking policy," any shareholder
redeeming shares (including redemptions that are part of an exchange
transaction) having a value of $5,000 or more from the fund will be precluded
from investing in the fund (including investments that are part of an exchange
transaction) for 30 calendar days after the redemption transaction. This
prohibition will not apply to redemptions by shareholders whose shares are held
on the books of third-party intermediaries (such as investment dealers holding
shareholder accounts in street name, retirement plan recordkeepers, insurance
company separate accounts and bank trust companies) that have not adopted
procedures to implement this policy. American Funds Service Company will work
with intermediaries to develop such procedures or other procedures that American
Funds Service Company determines are reasonably designed to achieve the
objective of the purchase blocking policy. At the time the intermediaries adopt
these procedures, shareholders whose accounts are on the books of such
intermediaries will be subject to this purchase blocking policy or another
frequent trading policy that is reasonably designed to achieve the objective of
the purchase blocking policy. Shareholders should refer to disclosures provided
by the intermediaries with which they have an account to determine the specific
trading restrictions that apply to the shareholder. There is no guarantee that
all instances of frequent trading in fund shares will be prevented.

The New Economy Fund / Prospectus
<PAGE>

Under the fund's purchase blocking policy, certain purchases will not be
prevented and certain redemptions will not trigger a purchase block, such as:
systematic redemptions and purchases where the entity maintaining the
shareholder account is able to identify the transaction as a systematic
redemption or purchase; purchases and redemptions of shares having a value of
less than $5,000; transactions in Class 529 shares; purchases and redemptions
resulting from reallocations by American Funds Target Date Retirement Series;
retirement plan contributions, loans and distributions (including hardship
withdrawals) identified as such on the retirement plan recordkeeper's system;
and purchase transactions involving transfers of assets, rollovers, Roth IRA
conversions and IRA recharacterizations, where the entity maintaining the
shareholder account is able to identify the transaction as one of these types of
transactions.

NOTWITHSTANDING THE FUND'S PURCHASE BLOCKING POLICY, ALL TRANSACTIONS IN FUND
SHARES REMAIN SUBJECT TO THE FUND'S AND AMERICAN FUNDS DISTRIBUTORS' RIGHT TO
RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY (INCLUDING THE TYPES OF
TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED OR TRIGGER A PURCHASE
BLOCK UNDER THE POLICY). SEE THE STATEMENT OF ADDITIONAL INFORMATION FOR MORE
INFORMATION ABOUT HOW AMERICAN FUNDS SERVICE COMPANY MAY ADDRESS OTHER
POTENTIALLY ABUSIVE TRADING ACTIVITY IN THE AMERICAN FUNDS.

PURCHASE MINIMUMS AND MAXIMUMS

PURCHASE MINIMUMS FOR ALL CLASSES OF SHARES/1/
-------------------------------------------------------------------------------

To establish an account (including retirement plan and 529 $ 250/2/
accounts)
For a payroll deduction retirement plan account, payroll
deduction 25
savings plan account or employer-sponsored 529 account
To add to an account 50
For a payroll deduction retirement plan account, payroll 25
deduction
savings plan account or employer-sponsored 529 account
-------------------------------------------------------------------------------
PURCHASE MAXIMUM PER TRANSACTION FOR CLASS B SHARES 50,000
-------------------------------------------------------------------------------
PURCHASE MAXIMUM PER TRANSACTION FOR CLASS C SHARES 500,000

/1/ Purchase minimums may be waived in certain cases. Please see the statement of
additional information for details.
/2/ For accounts established with an automatic investment plan, the initial
purchase minimum of $250 may be waived if the purchases (including purchases
through exchanges from another fund) made under the plan are sufficient to
reach $250 within five months of account establishment.

The effective purchase maximums for Class 529-A, 529-C, 529-E and 529-F shares
will reflect the maximum applicable contribution limits under state law. See the
applicable program description for more information.

If you have significant American Funds or American Legacy/(R)/ holdings, you may
not be eligible to invest in Class B or C shares (or their corresponding 529
share classes). Specifically, you may not purchase Class B or 529-B shares if
you are eligible to purchase Class A or 529-A shares at the $100,000 or higher
sales charge discount rate, and you may not purchase Class C or 529-C shares if
you are eligible to purchase Class A or 529-A shares at the $1 million or more
sales charge discount rate (i.e., at net asset value). See "Sales charge
reductions and waivers" below and the statement of additional information for
more information regarding sales charge discounts.

The New Economy Fund / Prospectus

<PAGE>

VALUING SHARES
The net asset value of each share class of the fund is the value of a single
share. The fund calculates the net asset value each day the New York Stock
Exchange is open for trading as of approximately 4:00 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, if events occur between the close of markets
outside the United States and the close of regular trading on the New York Stock
Exchange that, in the opinion of the investment adviser, materially affect the
value of any of the fund's securities that principally trade in those
international markets, those securities will be valued in accordance with fair
value procedures. Use of these procedures is intended to result in more
appropriate net asset values. In addition, such use will reduce, if not
eliminate, potential arbitrage opportunities otherwise available to short-term
investors.

Because the fund may hold securities that are primarily listed on foreign
exchanges that trade on weekends or days when the fund does not price its
shares, the value of securities held in the fund may change on days when you
will not be able to purchase or redeem fund shares.

Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request. A contingent deferred sales charge may apply at the time you sell
certain Class A, B and C shares.
MOVING BETWEEN SHARE CLASSES

Please see the statement of additional information for details and limitations
on moving investments in certain share classes to different share classes.

The New Economy Fund / Prospectus
<PAGE>

Sales charges

CLASS A SHARES

The initial sales charge you pay each time you buy Class A shares differs
depending upon the amount you invest and may be reduced or eliminated for larger
purchases as indicated below. The "offering price," the price you pay to buy
shares, includes any applicable sales charge, which will be deducted directly
from your investment. Shares acquired through reinvestment of dividends or
capital gain distributions are not subject to an initial sales charge.

SALES CHARGE AS A
PERCENTAGE OF:
DEALER
NET COMMISSION
OFFERING AMOUNT AS A PERCENTAGE
INVESTMENT PRICE INVESTED OF OFFERING PRICE
------------------------------------------------------------------------------

Less than $25,000 5.75% 6.10% 5.00%
------------------------------------------------------------------------------
$25,000 but less than $50,000 5.00 5.26 4.25
------------------------------------------------------------------------------
$50,000 but less than $100,000 4.50 4.71 3.75
------------------------------------------------------------------------------
$100,000 but less than $250,000 3.50 3.63 2.75
------------------------------------------------------------------------------
$250,000 but less than $500,000 2.50 2.56 2.00
------------------------------------------------------------------------------
$500,000 but less than $750,000 2.00 2.04 1.60
------------------------------------------------------------------------------
$750,000 but less than $1 million 1.50 1.52 1.20
------------------------------------------------------------------------------
$1 million or more and certain other none none see below
investments described below
------------------------------------------------------------------------------

The sales charge, expressed as a percentage of the offering price or the net
amount invested, may be higher or lower than the percentages described in the
table above due to rounding. This is because the dollar amount of the sales
charge is determined by subtracting the net asset value of the shares purchased
from the offering price, which is calculated to two decimal places using
standard rounding criteria. The impact of rounding will vary with the size of
the investment and the net asset value of the shares. Similarly, any contingent
deferred sales charge paid by you on investments in Class A shares may be higher
or lower than the 1% charge described below due to rounding.

EXCEPT AS PROVIDED BELOW, INVESTMENTS IN CLASS A SHARES OF $1 MILLION OR MORE
MAY BE SUBJECT TO A 1% CONTINGENT DEFERRED SALES CHARGE IF THE SHARES ARE SOLD
WITHIN ONE YEAR OF PURCHASE. The contingent deferred sales charge is based on
the original purchase cost or the current market value of the shares being sold,
whichever is less.

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:

The New Economy Fund / Prospectus

<PAGE>

. investments in Class A shares made by endowments or foundations with $50
million or more in assets;
. investments made by accounts that are part of certain qualified fee-based
programs and that purchased Class A shares before the discontinuation of your
investment dealer's load-waived A share program with the American Funds; and

. certain rollover investments from retirement plans to IRAs (see "Rollovers
from retirement plans to IRAs" below for more information).

The distributor may pay dealers up to 1% on investments made in Class A shares
with no initial sales charge. The fund may reimburse the distributor for these
payments through its plans of distribution (see "Plans of distribution" below).
Transfers from certain 529 plans to plans managed by the American Funds
organization will be made with no sales charge. No commission will be paid to
the dealer on such a transfer. Please see the statement of additional
information for more information.

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell American Funds, and employees of The Capital Group Companies.
Please see the statement of additional information for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS
Many employer-sponsored retirement plans are eligible to purchase Class R
shares. Eligible plans and Class R shares are described in more detail in the
fund's retirement plan prospectus.

Employer-sponsored retirement plans that are eligible to purchase Class R
shares may instead purchase Class A shares and pay the applicable Class A sales
charge, provided their recordkeepers can properly apply a sales charge on plan
investments. These plans are not eligible to make initial purchases of $1
million or more in Class A shares and thereby invest in Class A shares without
a sales charge, nor are they eligible to establish a statement of intention
that qualifies them to purchase Class A shares without a sales charge. More
information about statements of intention can be found under "Sales charge
reductions and waivers." Plans investing in Class A shares with a sales charge
may purchase additional Class A shares in accordance with the sales charge
table above.

Employer-sponsored retirement plans that invested in Class A shares without any
sales charge on or before March 31, 2004, and that continue to meet the
eligibility requirements in effect as of that date for purchasing Class A
shares at net asset value, may continue to purchase Class A shares without any
initial or contingent deferred sales charge.

The New Economy Fund / Prospectus
<PAGE>

CLASS B AND C SHARES

Class B and C shares are sold without any initial sales charge. American Funds
Distributors pays 4% of the amount invested to dealers who sell Class B shares
and 1% to dealers who sell Class C shares.

For Class B shares, a contingent deferred sales charge may be applied to shares
you sell within six years of purchase, as shown in the table below.

CONTINGENT DEFERRED SALES CHARGE ON CLASS B SHARES

YEAR OF REDEMPTION: 1 2 3 4 5 6 7+
----------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGE: 5% 4% 4% 3% 2% 1% 0%

For Class C shares, a contingent deferred sales charge of 1% applies if shares
are sold within one year of purchase.

Any contingent deferred sales charge paid by you on investments in Class B or C
shares, expressed as a percentage of the applicable redemption amount, may be
higher or lower than the percentages described above due to rounding.

Shares acquired through reinvestment of dividends or capital gain distributions
are not subject to a contingent deferred sales charge. In addition, the
contingent deferred sales charge may be waived in certain circumstances. See
"Contingent deferred sales charge waivers" below. The contingent deferred sales
charge is based on the original purchase cost or the current market value of the
shares being sold, whichever is less. For purposes of determining the contingent
deferred sales charge, if you sell only some of your shares, shares that are not
subject to any contingent deferred sales charge will be sold first, followed by
shares that you have owned the longest.

See "Plans of distribution" below for ongoing compensation paid to your dealer
or financial adviser for all share classes.
AUTOMATIC CONVERSION OF CLASS B AND C SHARES

Class B shares automatically convert to Class A shares in the month of the
eight-year anniversary of the purchase date. Class C shares automatically
convert to Class F shares in the month of the 10-year anniversary of the
purchase date; however, Class 529-C shares will not convert to Class 529-F
shares. The Internal Revenue Service currently takes the position that these
automatic conversions are not taxable. Should its position change, the automatic
conversion feature may be suspended. If this happens, you would have the option
of converting your Class B, 529-B or C shares to the respective share classes at
the anniversary dates described above. This exchange would be based on the
relative net asset values of the two classes in question, without the imposition
of a sales charge or fee, but you might face certain tax consequences as a
result.

The New Economy Fund / Prospectus

<PAGE>

CLASS 529-E AND CLASS F SHARES

Class 529-E and Class F shares are sold without any initial or contingent
deferred sales charge.

The New Economy Fund / Prospectus
<PAGE>

Sales charge reductions and waivers

TO RECEIVE A REDUCTION IN YOUR CLASS A INITIAL SALES CHARGE, YOU MUST LET YOUR
FINANCIAL ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW AT THE TIME YOU
PURCHASE SHARES THAT YOU QUALIFY FOR SUCH A REDUCTION. IF YOU DO NOT LET YOUR
ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW THAT YOU ARE ELIGIBLE FOR A
REDUCTION, YOU MAY NOT RECEIVE A SALES CHARGE DISCOUNT TO WHICH YOU ARE
OTHERWISE ENTITLED. In order to determine your eligibility to receive a sales
charge discount, it may be necessary for you to provide your adviser or American
Funds Service Company with information and records (including account
statements) of all relevant accounts invested in the American Funds. To have
your Class A, B or C contingent deferred sales charge waived, you must let your
adviser or American Funds Service Company know at the time you redeem shares
that you qualify for such a waiver.
IN ADDITION TO THE INFORMATION BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
SALES CHARGE REDUCTIONS AND WAIVERS THROUGH A LINK ON THE HOME PAGE OF THE
AMERICAN FUNDS WEBSITE AT AMERICANFUNDS.COM, FROM THE STATEMENT OF ADDITIONAL
INFORMATION OR FROM YOUR FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE
Consistent with the policies described in this prospectus, you and your
"immediate family" (your spouse -- or equivalent if recognized under local law
-- and your children under the age of 21) may combine all of your American Funds
and American Legacy investments to reduce your Class A sales charge. However,
for this purpose, investments representing direct purchases of American Funds
money market funds are excluded. Following are different ways that you may
qualify for a reduced Class A sales charge:

AGGREGATING ACCOUNTS

To receive a reduced Class A sales charge, investments made by you and your
immediate family (see above) may be aggregated if made for your own account(s)
and/or certain other accounts, such as:
. trust accounts established by the above individuals (please see the statement
of additional information for details regarding aggregation of trust accounts
where the person(s) who established the trust is/are deceased);

. solely controlled business accounts; and

. single-participant retirement plans.

CONCURRENT PURCHASES

You may combine simultaneous purchases (including, upon your request, purchases
for gifts) of any class of shares of two or more American Funds, as well as
individual holdings in various American Legacy variable annuity contracts and
variable life insurance policies, to qualify for a reduced Class A sales
charge.

The New Economy Fund / Prospectus

<PAGE>

RIGHTS OF ACCUMULATION

You may take into account your accumulated holdings in all share classes of the
American Funds to determine the initial sales charge you pay on each purchase
of Class A shares. Subject to your investment dealer's capabilities, your
accumulated holdings will be calculated as the higher of (a) the current value
of your existing holdings or (b) the amount you invested (excluding capital
appreciation) less any withdrawals. Please see the statement of additional
information for details. You should retain any records necessary to
substantiate the historical amounts you have invested.

In addition, you may also take into account the current value of your
individual holdings in various American Legacy variable annuity contracts and
variable life insurance policies to determine your Class A sales charge. If you
make a gift of shares, upon your request, you may purchase the shares at the
sales charge discount allowed under rights of accumulation of all of your
American Funds and American Legacy accounts.

STATEMENT OF INTENTION
You may reduce your Class A sales charge by establishing a statement of
intention. A statement of intention allows you to combine all purchases of all
share classes of American Funds non-money market funds you intend to make over
a 13-month period (including purchases of various American Legacy individual
variable annuity contracts and variable life insurance policies) to determine
the applicable sales charge; however, purchases made under a right of
reinvestment, appreciation of your holdings, and reinvested dividends and
capital gains do not count as purchases made during the statement period. The
market value of your existing holdings eligible to be aggregated as of the day
immediately before the start of the statement period may be credited toward
satisfying the statement. A portion of your account may be held in escrow to
cover additional Class A sales charges that may be due if your total purchases
over the statement period do not qualify you for the applicable sales charge
reduction. Employer-sponsored retirement plans may be restricted from
establishing statements of intention. See "Sales charges" above for more
information.

RIGHT OF REINVESTMENT

Please see "How to sell shares" below for information on how to reinvest
proceeds from a redemption, dividend payment or capital gain distribution
without a sales charge.

CONTINGENT DEFERRED SALES CHARGE WAIVERS

The contingent deferred sales charge on Class A, B and C shares may be waived in
the following cases:

. permitted exchanges of shares, except if shares acquired by exchange are then
redeemed within the period during which a contingent deferred sales charge
would apply to the initial shares purchased;

. tax-free returns of excess contributions to IRAs;

The New Economy Fund / Prospectus
<PAGE>

. redemptions due to death or postpurchase disability of the shareholder (this
generally excludes accounts registered in the names of trusts and other
entities);

. for 529 share classes only, redemptions due to a beneficiary's death,
postpurchase disability or receipt of a scholarship (to the extent of the
scholarship award);

. redemptions due to the complete termination of a trust upon the death of the
trustor/ grantor or beneficiary, but only if such termination is specifically
provided for in the trust document;

. the following types of transactions, if together they do not exceed 12% of the
value of an account annually (see the statement of additional information for
more information about waivers regarding these types of transactions):

-- redemptions due to receiving required minimum distributions from retirement
accounts upon reaching age 70 1/2 (required minimum distributions that
continue to be taken by the beneficiary(ies) after the account owner is
deceased also qualify for a waiver); and
-- if you have established a systematic withdrawal plan, redemptions through
such a plan (including any dividends and/or capital gain distributions taken
in cash).

The New Economy Fund / Prospectus

<PAGE>

Rollovers from retirement plans to IRAs
Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover. Rollovers invested in Class A shares from retirement
plans will be subject to applicable sales charges. The following rollovers to
Class A shares will be made without a sales charge:

. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
custodian; and
. rollovers to IRAs that are attributable to American Funds investments, if they
meet the following requirements:

-- the assets being rolled over were invested in American Funds at the time of
distribution; and

-- the rolled over assets are contributed to an American Funds IRA with Capital
Bank and Trust Company as custodian.

IRA rollover assets that roll over without a sales charge as described above
will not be subject to a contingent deferred sales charge and investment dealers
will be compensated solely with an annual service fee that begins to accrue
immediately. IRA rollover assets invested in Class A shares that are not
attributable to American Funds investments, as well as future contributions to
the IRA, will be subject to sales charges and the terms and conditions generally
applicable to Class A share investments as described in the prospectus and
statement of additional information.

The New Economy Fund / Prospectus
<PAGE>

Plans of distribution
The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of trustees. The plans
provide for payments, based on annualized percentages of average daily net
assets, of up to .25% for Class A shares; up to .50% for Class 529-A shares; up
to 1.00% for Class B, 529-B, C and 529-C shares; up to .75% for Class 529-E
shares; and up to .50% for Class F and 529-F shares. For all share classes, up
to .25% of these expenses may be used to pay service fees to qualified dealers
for providing certain shareholder services. The amount remaining for each share
class may be used for distribution expenses.

The 12b-1 fees paid by the fund, as a percentage of average net assets, for the
previous fiscal year are indicated in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." Since these fees are paid out of the
fund's assets or income on an ongoing basis, over time they will increase the
cost and reduce the return of your investment. The higher fees for Class B and C
shares may cost you more over time than paying the initial sales charge for
Class A shares.

Other compensation to dealers
American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 75 dealers (or their
affiliates) who have sold shares of the American Funds. The level of payments
made to a qualifying firm in any given year will vary and in no case would
exceed the sum of (a) .10% of the previous year's American Funds sales by that
dealer and (b) .02% of American Funds assets attributable to that dealer. For
calendar year 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the assets of the American Funds. Aggregate
payments may also change from year to year. A number of factors will be
considered in determining payments, including the qualifying dealer's sales,
assets and redemption rates, and the quality of the dealer's relationship with
American Funds Distributors. American Funds Distributors makes these payments to
help defray the costs incurred by qualifying dealers in connection with efforts
to educate financial advisers about the American Funds so that they can make
recommendations and provide services that are suitable and meet shareholder
needs. American Funds Distributors will, on an annual basis, determine the
advisability of continuing these payments. American Funds Distributors may also
pay expenses associated with meetings conducted by dealers outside the top 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.

The New Economy Fund / Prospectus

<PAGE>

How to sell shares

You may sell (redeem) shares in any of the following ways:

THROUGH YOUR DEALER OR FINANCIAL ADVISER (CERTAIN CHARGES MAY APPLY)

. Shares held for you in your dealer's name must be sold through the dealer.
. Class F shares must be sold through your dealer or financial adviser.

WRITING TO AMERICAN FUNDS SERVICE COMPANY

. Requests must be signed by the registered shareholder(s).

. A signature guarantee is required if the redemption is:

-- over $75,000;

-- made payable to someone other than the registered shareholder(s); or
-- sent to an address other than the address of record or to an address of
record that has been changed within the last 10 days.

. American Funds Service Company reserves the right to require signature
guarantee(s) on any redemptions.

. Additional documentation may be required for sales of shares held in
corporate, partnership or fiduciary accounts.

TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY OR USING THE INTERNET

. Redemptions by telephone, fax or the Internet (including American
FundsLine/(R)/ and americanfunds.com) are limited to $75,000 per American
Funds shareholder each day.

. Checks must be made payable to the registered shareholder.

. Checks must be mailed to an address of record that has been used with the
account for at least 10 days.
If you recently purchased shares and subsequently request a redemption of those
shares, you will receive proceeds from the redemption once a sufficient period
of time has passed to reasonably assure that checks or drafts (including
certified or cashier's checks) for the shares purchased have cleared (normally
10 business days).

If you notify American Funds Service Company, you may reinvest proceeds from a
redemption, dividend payment or capital gain distribution without a sales charge
in the same fund or other American Funds within 90 days after the date of the
redemption or distribution. Proceeds from a Class B share redemption made during
the contingent deferred sales charge period will be reinvested in Class A
shares. Proceeds from any other type of redemption and all dividend payments and
capital gain distributions will be reinvested in the same share class from which
the original redemption or distribution was made. Any contingent deferred sales
charge on Class A or C shares will be credited to your account. Redemption
proceeds of Class A shares representing direct purchases in American Funds money
market funds that are reinvested in non-money market American Funds will be
subject to a sales charge. Proceeds will be reinvested at the next calculated

The New Economy Fund / Prospectus
<PAGE>

net asset value after your request is received and accepted by American Funds
Service Company. You may not reinvest proceeds in the American Funds as
described in this paragraph if such proceeds are subject to a purchase block as
described under "Frequent trading of fund shares." This paragraph does not apply
to rollover investments as described under "Rollovers from retirement plans to
IRAs."

TRANSACTIONS BY TELEPHONE, FAX OR THE INTERNET
Generally, you are automatically eligible to redeem or exchange shares by
telephone, fax or the Internet, unless you notify us in writing that you do not
want any or all of these services. You may reinstate these services at any time.

Unless you decide not to have telephone, fax or Internet services on your
account(s), you agree to hold the fund, American Funds Service Company, any of
its affiliates or mutual funds managed by such affiliates, and each of their
respective directors, trustees, officers, employees and agents harmless from any
losses, expenses, costs or liabilities (including attorney fees) that may be
incurred in connection with the exercise of these privileges, provided American
Funds Service Company employs reasonable procedures to confirm that the
instructions received from any person with appropriate account information are
genuine. If reasonable procedures are not employed, American Funds Service
Company and/or the fund may be liable for losses due to unauthorized or
fraudulent instructions.

The New Economy Fund / Prospectus

<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS
The fund intends to distribute dividends to you, usually in December.

Capital gains, if any, are usually distributed in December. When a dividend or
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.

You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of this fund or other American Funds, or you may
elect to receive them in cash. Most shareholders do not elect to take capital
gain distributions in cash because these distributions reduce principal value.
Dividends and capital gain distributions for 529 share classes will be
automatically reinvested.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

Dividends and capital gain distributions you receive from the fund will be
subject to federal income tax and may also be subject to state or local taxes --
unless you are exempt from taxation.
For federal tax purposes, dividends and distributions of short-term capital
gains are taxable as ordinary income. Some or all of your dividends may be
eligible for a reduced tax rate if you meet a holding period requirement. The
fund's distributions of net long-term capital gains are taxable as long-term
capital gains. Any dividends or capital gain distributions you receive from the
fund will normally be taxable to you when made, regardless of whether you
reinvest dividends or capital gain distributions or receive them in cash.

TAXES ON TRANSACTIONS
Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment is the
difference between the cost of your shares, including any sales charges, and the
amount you receive when you sell them.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION. HOLDERS OF 529 SHARES SHOULD
REFER TO THE APPLICABLE PROGRAM DESCRIPTION FOR MORE INFORMATION REGARDING THE
TAX CONSEQUENCES OF SELLING 529 SHARES.

The New Economy Fund / Prospectus
<PAGE>

Financial highlights/1/
The Financial Highlights table is intended to help you understand the fund's
results for the past five fiscal years. Certain information reflects financial
results for a single share of a particular class. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the fund (assuming reinvestment of all dividends and capital gain
distributions). This information has been audited by Deloitte & Touche LLP,
whose report, along with the fund's financial statements, is included in the
statement of additional information, which is available upon request.

INCOME (LOSS) FROM INVESTMENT OPERATIONS/2/
Net
gains
(losses)
Net on securities Net
asset Net (both Dividends asset
value, investment realized Total from (from net value,
beginning income and investment investment end of Total
of period (loss) unrealized) operations income) period return/3/
---------------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 11/30/2006 $22.98 $ .20 $ 3.38 $ 3.58 $(.15) $26.41 15.65%
Year ended 11/30/2005 20.27 .15 2.63 2.78 (.07) 22.98 13.79
Year ended 11/30/2004 18.11 .06 2.11 2.17 (.01) 20.27 12.00
Year ended 11/30/2003 14.94 .01 3.16 3.17 -- 18.11 21.22
Year ended 11/30/2002 18.01 --/5/ (3.07) (3.07) -- 14.94 (17.05)
---------------------------------------------------------------------------------------------------------------------------------
CLASS B:
Year ended 11/30/2006 22.05 .01 3.24 3.25 -- 25.30 14.74
Year ended 11/30/2005 19.52 (.01 ) 2.54 2.53 -- 22.05 12.96
Year ended 11/30/2004 17.57 (.08 ) 2.03 1.95 -- 19.52 11.10
Year ended 11/30/2003 14.61 (.11 ) 3.07 2.96 -- 17.57 20.26
Year ended 11/30/2002 17.75 (.12 ) (3.02) (3.14) -- 14.61 (17.69)
---------------------------------------------------------------------------------------------------------------------------------
CLASS C:
Year ended 11/30/2006 21.96 --/5/ 3.23 3.23 (.01) 25.18 14.70
Year ended 11/30/2005 19.46 (.02 ) 2.52 2.50 -- 21.96 12.85
Year ended 11/30/2004 17.52 (.09 ) 2.03 1.94 -- 19.46 11.07
Year ended 11/30/2003 14.57 (.11 ) 3.06 2.95 -- 17.52 20.25
Year ended 11/30/2002 17.70 (.12 ) (3.01) (3.13) -- 14.57 (17.68)
---------------------------------------------------------------------------------------------------------------------------------
CLASS F:
Year ended 11/30/2006 22.88 .19 3.37 3.56 (.16) 26.28 15.63
Year ended 11/30/2005 20.19 .15 2.62 2.77 (.08) 22.88 13.77
Year ended 11/30/2004 18.07 .06 2.09 2.15 (.03) 20.19 11.89
Year ended 11/30/2003 14.91 .01 3.15 3.16 -- 18.07 21.19
Year ended 11/30/2002 17.98 --/5/ (3.07) (3.07) -- 14.91 (17.08)
---------------------------------------------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 11/30/2006 $22.93 $ .19 $ 3.37 $ 3.56 $(.15) $26.34 15.61%
Year ended 11/30/2005 20.24 .14 2.63 2.77 (.08) 22.93 13.74
Year ended 11/30/2004 18.11 .06 2.10 2.16 (.03) 20.24 11.96
Year ended 11/30/2003 14.93 .02 3.16 3.18 -- 18.11 21.30
Period from 2/15/2002 to 11/30/2002 17.14 --/5/ (2.21) (2.21) -- 14.93 (12.89)
---------------------------------------------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 11/30/2006 22.28 (.02 ) 3.28 3.26 -- 25.54 14.63
Year ended 11/30/2005 19.76 (.04 ) 2.56 2.52 -- 22.28 12.75
Year ended 11/30/2004 17.82 (.11 ) 2.05 1.94 -- 19.76 10.89
Year ended 11/30/2003 14.83 (.13 ) 3.12 2.99 -- 17.82 20.16
Period from 2/19/2002 to 11/30/2002 16.76 (.09 ) (1.84) (1.93) -- 14.83 (11.52)
---------------------------------------------------------------------------------------------------------------------------------
CLASS 529-C:
Year ended 11/30/2006 22.30 (.01 ) 3.26 3.25 -- 25.55 14.57
Year ended 11/30/2005 19.77 (.04 ) 2.57 2.53 -- 22.30 12.80
Year ended 11/30/2004 17.83 (.11 ) 2.05 1.94 -- 19.77 10.88
Year ended 11/30/2003 14.84 (.13 ) 3.12 2.99 -- 17.83 20.15
Period from 2/21/2002 to 11/30/2002 16.55 (.09 ) (1.62) (1.71) -- 14.84 (10.33)
---------------------------------------------------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 11/30/2006 22.75 .11 3.34 3.45 (.09) 26.11 15.22
Year ended 11/30/2005 20.09 .07 2.61 2.68 (.02) 22.75 13.37
Year ended 11/30/2004 18.01 (.01 ) 2.09 2.08 -- 20.09 11.55
Year ended 11/30/2003 14.91 (.05 ) 3.15 3.10 -- 18.01 20.79
Period from 3/15/2002 to 11/30/2002 18.26 (.02 ) (3.33) (3.35) -- 14.91 (18.35)
---------------------------------------------------------------------------------------------------------------------------------
CLASS 529-F:
Year ended 11/30/2006 22.92 .23 3.36 3.59 (.17) 26.34 15.77
Year ended 11/30/2005 20.20 .16 2.63 2.79 (.07) 22.92 13.84
Year ended 11/30/2004 18.09 .04 2.09 2.13 (.02) 20.20 11.79
Year ended 11/30/2003 14.94 (.01 ) 3.16 3.15 -- 18.09 21.08
Period from 10/11/2002 to 11/30/2002 12.30 --/5/ 2.64 2.64 -- 14.94 21.46

Ratio of Ratio of Ratio
expenses expenses of net
to average to average income
Net net assets net assets (loss)
assets, before after to
end of reim- reim- average
period (in bursements/ bursements/ net
millions) waivers waivers/4/ assets
---------------------------------------------------------------------------------------

CLASS A:
Year ended 11/30/2006 $7,654 .82 % .78 % .83 %
Year ended 11/30/2005 7,061 .83 .79 .73
Year ended 11/30/2004 6,938 .84 .84 .32
Year ended 11/30/2003 6,671 .89 .89 .09
Year ended 11/30/2002 5,883 .89 .89 (.01 )
---------------------------------------------------------------------------------------
CLASS B:
Year ended 11/30/2006 207 1.59 1.55 .06
Year ended 11/30/2005 185 1.60 1.57 (.05 )
Year ended 11/30/2004 172 1.62 1.62 (.45 )
Year ended 11/30/2003 144 1.68 1.68 (.70 )
Year ended 11/30/2002 104 1.69 1.69 (.79 )
---------------------------------------------------------------------------------------
CLASS C:
Year ended 11/30/2006 136 1.64 1.60 .01
Year ended 11/30/2005 96 1.65 1.61 (.09 )
Year ended 11/30/2004 76 1.66 1.65 (.47 )
Year ended 11/30/2003 51 1.69 1.69 (.73 )
Year ended 11/30/2002 26 1.70 1.70 (.77 )
---------------------------------------------------------------------------------------
CLASS F:
Year ended 11/30/2006 248 .83 .79 .81
Year ended 11/30/2005 114 .86 .83 .70
Year ended 11/30/2004 72 .89 .88 .32
Year ended 11/30/2003 40 .91 .91 .04
Year ended 11/30/2002 15 .95 .95 (.02 )
---------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 11/30/2006 $ 75 .85 % .81 % .80 %
Year ended 11/30/2005 51 .87 .84 .69
Year ended 11/30/2004 35 .87 .86 .33
Year ended 11/30/2003 20 .85 .85 .11
Period from 2/15/2002 to 11/30/2002 8 1.00/6/ 1.00/6/ .02/6/
---------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 11/30/2006 13 1.72 1.68 (.07 )
Year ended 11/30/2005 10 1.76 1.72 (.20 )
Year ended 11/30/2004 7 1.78 1.78 (.58 )
Year ended 11/30/2003 4 1.81 1.81 (.86 )
Period from 2/19/2002 to 11/30/2002 1 1.84/6/ 1.84/6/ (.82 )/6/
---------------------------------------------------------------------------------------
CLASS 529-C:
Year ended 11/30/2006 24 1.71 1.67 (.06 )
Year ended 11/30/2005 15 1.75 1.71 (.18 )
Year ended 11/30/2004 10 1.77 1.76 (.57 )
Year ended 11/30/2003 5 1.80 1.80 (.84 )
Period from 2/21/2002 to 11/30/2002 2 1.80/6/ 1.80/6/ (.78 )/6/
---------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 11/30/2006 4 1.18 1.14 .47
Year ended 11/30/2005 3 1.22 1.18 .35
Year ended 11/30/2004 2 1.23 1.23 (.03 )
Year ended 11/30/2003 1 1.25 1.25 (.30 )
Period from 3/15/2002 to 11/30/2002 --/7/ 1.25/6/ 1.25/6/ (.23 )/6/
---------------------------------------------------------------------------------------
CLASS 529-F:
Year ended 11/30/2006 2 .68 .64 .97
Year ended 11/30/2005 1 .81 .77 .76
Year ended 11/30/2004 1 .98 .98 .23
Year ended 11/30/2003 --/7/ 1.00 1.00 (.04 )
Period from 10/11/2002 to 11/30/2002 --/7/ .14 .14 (.03 )

The New Economy Fund / Prospectus

<PAGE>

(The Financial Highlights table continues on the following page.)

The New Economy Fund / Prospectus

<PAGE>

YEAR ENDED NOVEMBER 30
2006 2005 2004 2003 2002
------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 41% 32% 35% 38% 37%
OF SHARES

/1/ Based on operations for the periods shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
/2/ Based on average shares outstanding.
/3/ Total returns exclude all sales charges, including contingent deferred sales
charges.
/4/ The ratios in this column reflect the impact, if any, of certain
reimbursements/waivers from Capital Research and Management Company. See the
Annual Fund Operating Expenses table under "Fees and expenses of the fund" in
this prospectus and the fund's annual report for more information.
/5/ Amount less than $.01.
/6/ Annualized.
/7/ Amount less than $1 million.

The New Economy Fund / Prospectus

<PAGE>

NOTES

The New Economy Fund / Prospectus
<PAGE>

[Logo - American Funds/R/] The right choice for the long term/(R)/

FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180
FOR RETIREMENT PLAN SERVICES Call your employer or plan administrator
FOR DEALER SERVICES American Funds Distributors
800/421-9900
FOR 529 PLANS American Funds Service Company
800 /421-0180, ext. 529
FOR 24-HOUR INFORMATION American FundsLine
800/325-3590
americanfunds.com

Telephone calls you have with the American Funds organization may be monitored or
recorded for quality assurance, verification and/or recordkeeping purposes. By speaking
with us on the telephone, you are giving your consent to such monitoring and recording.
-----------------------------------------------------------------------------------------

MULTIPLE TRANSLATIONS This prospectus may be translated into other languages.
If there is any inconsistency or ambiguity as to the meaning of any word or
phrase in a translation, the English text will prevail.

ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS The shareholder reports contain
additional information about the fund, including financial statements,
investment results, portfolio holdings, a discussion of market conditions and
the fund's investment strategies, and the independent registered public
accounting firm's report (in the annual report).
PROGRAM DESCRIPTIONS Program descriptions for 529 programs managed by the
American Funds organization contain additional information about the policies
and services related to 529 plan accounts.

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information on all aspects
of the fund, including the fund's financial statements, and is incorporated by
reference into this prospectus. This means that the current SAI, for legal
purposes, is part of this prospectus. The codes of ethics describe the personal
investing policies adopted by the fund, the fund's investment adviser and its
affiliated companies.

The codes of ethics and current SAI are on file with the Securities and Exchange
Commission (SEC). These and other related materials about the fund are available
for review or to be copied at the SEC's Public Reference Room in Washington, DC
(202/551-8090) or on the EDGAR database on the SEC's website at sec.gov or,
after payment of a duplicating fee, via e-mail request to publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, 100 F Street, NE, Washington,
DC 20549. The current SAI and shareholder reports are also available, free of
charge, on americanfunds.com.

HOUSEHOLD MAILINGS Each year you are automatically sent an updated prospectus
and annual and semi-annual reports for the fund. You may also occasionally
receive proxy statements for the fund. In order to reduce the volume of mail you
receive, when possible, only one copy of these documents will be sent to
shareholders who are part of the same family and share the same household address.

If you would like to opt out of household-based mailings or receive a
complimentary copy of the current SAI, codes of ethics, annual/semi-annual
report to shareholders or applicable program description, please call American
Funds Service Company at 800/421-0180 or write to the Secretary of the fund at
333 South Hope Street, Los Angeles, California 90071.

[Logo - recycle bug]

Printed on recycled paper
MFGEPR-914-0207P Litho in USA CGD/B/8015 Investment Company File No. 811-03735

---------------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds Capital Research and Management Capital International
Capital Guardian Capital Bank and Trust

<PAGE>

[Logo - American Funds/R/] The right choice for the long term/(R)/

The New Economy Fund/(R)/

PROSPECTUS
ADDENDUM

February 1, 2007

<PAGE>

Class R-5 shares of The New Economy Fund are available to certain clients of the
Personal Investment Management group of Capital Guardian Trust Company./SM/ Accordingly,
for these shareholders, the following information should be read in conjunction with the
prospectus for this fund.

Fees and expenses of the fund -- pages 5-6

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS R-5
-------------------------------------------------------------------------------

Maximum initial sales charge on purchases (as a percentage of none
offering price)
-------------------------------------------------------------------------------
Maximum sales charge on reinvested dividends none
-------------------------------------------------------------------------------
Maximum contingent deferred sales charge none
-------------------------------------------------------------------------------
Redemption or exchange fees none

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
CLASS R-5
--------------------------------------------------------------

Management fees/1/ 0.41%
--------------------------------------------------------------
Distribution and/or service (12b-1) fees none
--------------------------------------------------------------
Other expenses/2/ 0.14
--------------------------------------------------------------
Total annual fund operating expenses/1/ 0.55

/1/ The fund's investment adviser is currently waiving 10% of its management fee.
The waiver may be discontinued at any time in consultation with the fund's
board, but it is expected to continue at this level until further review. The
fund's investment adviser and board intend to review the waiver as
circumstances warrant. Expenses shown above do not reflect any waiver.
Information regarding the effect of any waiver on total annual fund operating
expenses can be found in the Financial Highlights table in this prospectus
addendum and in the fund's annual report.
/2/ A portion of the fund's expenses may be used to pay third parties (including
affiliates of the fund's investment adviser) that provide recordkeeping
services to retirement plans invested in the fund.

EXAMPLE

The example below is intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The example assumes that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The example does not reflect the impact of any fee waivers
or expense reimbursements.

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------

Class R-5 $56 $176 $307 $689
-------------------------------------------------------------

<PAGE>

Purchase and exchange of shares -- pages 17-20

PURCHASE OF CLASS R-5 SHARES

Class R-5 shares of the fund are available to certain clients of the Personal
Investment Management group of Capital Guardian Trust Company. Please contact
Capital Guardian Trust Company if you wish to purchase Class R-5 shares of the
fund.

Sales charges -- pages 21-24

CLASS R-5 SHARES

Class R-5 shares are sold without any initial or contingent deferred sales
charge. In addition, no compensation is paid to investment dealers on sales of
Class R-5 shares.

<PAGE>

Financial highlights/1/ -- pages 33-35

The Financial Highlights table is intended to help you understand the fund's
results. Certain information reflects financial results for a single share. The
total returns in the table represent the rate that an investor would have earned
or lost on an investment in the fund (assuming reinvestment of all dividends and
capital gain distributions). This information has been audited by Deloitte &
Touche LLP, whose report, along with the fund's financial statements, is
included in the statement of additional information, which is available upon
request.

INCOME (LOSS) FROM INVESTMENT OPERATIONS/2/

Net gains
(losses)
Net on securities Net
asset (both Dividends asset
value, Net realized Total from (from net value,
beginning investment and investment investment end of Total
of period income unrealized) operations income) period return
------------------------------------------------------------------------------------------------------------------------------

CLASS R-5:
Year ended 11/30/2006 $23.10 $.27 $ 3.38 $ 3.65 $(.21) $26.54 15.94%
Year ended 11/30/2005 20.37 .21 2.65 2.86 (.13) 23.10 14.14
Year ended 11/30/2004 18.21 .12 2.10 2.22 (.06) 20.37 12.26
Year ended 11/30/2003 14.97 .06 3.18 3.24 -- 18.21 21.64
Period from 5/15/2002 to 11/30/2002 17.58 .03 (2.64) (2.61) -- 14.97 (14.85)

Ratio of Ratio of
expenses expenses Ratio
to average to average of net
Net net assets net assets income
assets, before after to
end of reim- reim- average
period (in bursements/ bursements/ net
millions) waivers waivers/3/ assets
-------------------------------------------------------------------------------------

CLASS R-5:
Year ended 11/30/2006 $109 .55 % .51 % 1.10 %
Year ended 11/30/2005 76 .55 .52 1.02
Year ended 11/30/2004 51 .55 .55 .62
Year ended 11/30/2003 44 .56 .56 .41
Period from 5/15/2002 to 11/30/2002 31 .56/4/ .56/4/ .44/4/

YEAR ENDED NOVEMBER 30
2006 2005 2004 2003 2002
------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 41% 32% 35% 38% 37%
OF SHARES

/1/ Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
/2/ Based on average shares outstanding.
/3/ The ratios in this column reflect the impact, if any, of certain
reimbursements/waivers from Capital Research and Management Company. See the
Annual Fund Operating Expenses table under "Fees and expenses of the fund" in
this prospectus addendum and the fund's annual report for more information.
/4/ Annualized.

<PAGE>

THE NEW ECONOMY FUND

Part B
Statement of Additional Information
February 1, 2007

This document is not a prospectus but should be read in conjunction with the
current prospectus or retirement plan prospectus of The New Economy Fund (the
"fund" or "NEF") dated February 1, 2007. You may obtain a prospectus from your
financial adviser or by writing to the fund at the following address:

The New Economy Fund
Attention: Secretary
333 South Hope Street
Los Angeles, California 90071
213/486-9200
Certain privileges and/or services described below may not be available to all
shareholders (including shareholders who purchase shares at net asset value
through eligible retirement plans) depending on the shareholder's investment
dealer or retirement plan recordkeeper. Please see your financial adviser,
investment dealer, plan recordkeeper or employer for more information.

TABLE OF CONTENTS

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

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 2
Fundamental policies and investment restrictions. . . . . . . . . . 6
Management of the fund . . . . . . . . . . . . . . . . . . . . . . 9
Execution of portfolio transactions . . . . . . . . . . . . . . . . 28
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 28
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 31
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 37
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 42
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Shareholder account services and privileges . . . . . . . . . . . . 47
General information . . . . . . . . . . . . . . . . . . . . . . . . 50
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Financial statements

The New Economy Fund -- Page 1
<PAGE>

CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

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

INVESTMENT STRATEGIES

. Generally, the fund invests primarily in equity securities of companies
that derive their revenues primarily from operations in the services and
information areas of the global economy. These could include, for example,
companies involved in the areas of telecommunications, computer systems and
software, the Internet, broadcasting and publishing, health care,
advertising, leisure, tourism, financial services, distribution and
transportation.

. Up to 25% of the fund's investments in equity securities may consist of
companies outside the services and information area.

DEBT SECURITIES

. The fund may invest up to 10% of its assets in nonconvertible securities
rated Baa or below by Moody's Investors Service ("Moody's") and BBB or
below by Standard & Poor's Corporation ("S&P") or unrated but determined to
be of equivalent quality.

NON-U.S. SECURITIES

. The fund may invest up to 40% of its assets in securities of issuers
domiciled outside the United States and not included in the S&P 500 Index,
including securities denominated in currencies other than the U.S. dollar.

* * * * * *

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

DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

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

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

There may be little trading in the secondary market for particular equity
securities, which may adversely affect the fund's ability to value accurately or
dispose of such equity securities.

The New Economy Fund -- Page 2
<PAGE>

Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the value and/or liquidity of equity securities.

The growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss, particularly in the case of
smaller capitalization stocks.

INVESTING IN SMALLER CAPITALIZATION STOCKS -- The fund may invest in the stocks
of smaller capitalization companies (typically companies with market
capitalizations of less than $3.5 billion at the time of purchase). The
investment adviser believes that the issuers of smaller capitalization stocks
often provide attractive investment opportunities. However, investing in smaller
capitalization stocks can involve greater risk than is customarily associated
with investing in stocks of larger, more established companies. For example,
smaller companies often have limited product lines, limited markets or financial
resources, may be dependent for management on one or a few key persons and can
be more susceptible to losses. Also, their securities may be thinly traded (and
therefore have to be sold at a discount from current prices or sold in small
lots over an extended period of time), may be followed by fewer investment
research analysts and may be subject to wider price swings, thus creating a
greater chance of loss than securities of larger capitalization companies.

INVESTING IN PRIVATE COMPANIES -- The fund may invest in companies that have not
publicly offered their securities. Investing in private companies can involve
greater risks than those associated with investing in publicly traded companies.
For example, the securities of a private company may be subject to the risk that
market conditions, developments within the company, investor perception, or
regulatory decisions may delay or prevent the company from ultimately offering
its securities to the public. Furthermore, these investments are generally
considered to be illiquid until a company's public offering and are often
subject to additional contractual restrictions on resale that would prevent the
fund from selling its company shares for a period of time following the public
offering.

Investments in private companies can offer the fund significant growth
opportunities at attractive prices. However these investments can pose greater
risk, and, consequently, there is no guarantee that positive results can be
achieved in the future.

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

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

Additional costs could be incurred in connection with the fund's investment
activities outside the United States. Brokerage commissions may be higher
outside the United States, and the fund will

The New Economy Fund -- Page 3
<PAGE>

bear certain expenses in connection with its currency transactions. Furthermore,
increased custodian costs may be associated with maintaining assets in certain
jurisdictions.

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

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

DEBT SECURITIES -- Although the fund will primarily invest in equity securities,
it may invest in debt securities as well. Debt securities are used by issuers to
borrow money. Generally, issuers pay investors periodic interest and repay the
amount borrowed either periodically during the life of the security and/or at
maturity. Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values and accrue
interest at the applicable coupon rate over a specified time period. The market
prices of debt securities fluctuate depending on such factors as interest rates,
credit quality and maturity. In general, market prices of debt securities
decline when interest rates rise and increase when interest rates fall. The
prices of these securities can be adversely affected by the outcome of financial
contracts (such as derivatives) held by third parties relating to various assets
or indices.

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

SECURITIES WITH EQUITY AND DEBT CHARACTERISTICS -- The fund may invest in
securities that have a combination of equity and debt characteristics. These
securities may at times behave more like equity than debt and vice versa. Some
types of convertible bonds or preferred stocks automatically convert into common
stocks and some may be subject to redemption at the option of the issuer at a
predetermined price. The prices and yields of nonconvertible preferred stocks
generally move with changes in interest rates and the issuer's credit quality,
similar to the factors affecting debt securities. These securities may be
treated as debt for fund investment limit purposes.

Convertible bonds, convertible preferred stocks and other securities may
sometimes be converted, or may automatically convert, into common stocks or
other securities at a stated

The New Economy Fund -- Page 4
<PAGE>

conversion ratio. These securities, prior to conversion, may pay a fixed rate of
interest or a dividend. Because convertible securities have both debt and equity
characteristics, their value varies in response to many factors, including the
value of the underlying assets, general market and economic conditions, and
convertible market valuations, as well as changes in interest rates, credit
spreads and the credit quality of the issuer.

U.S. GOVERNMENT OBLIGATIONS -- U.S. government obligations are securities backed
by the full faith and credit of the U.S. government. U.S. government obligations
include the following types of securities:

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

FEDERAL AGENCY SECURITIES BACKED BY "FULL FAITH AND CREDIT" -- The
securities of certain U.S. government agencies and government-sponsored
entities are guaranteed as to the timely payment of principal and interest
by the full faith and credit of the U.S. government. Such agencies and
entities include the Government National Mortgage Association (Ginnie Mae),
the Veterans Administration (VA), the Federal Housing Administration (FHA),
the Export-Import Bank (Exim Bank), the Overseas Private Investment
Corporation (OPIC), the Commodity Credit Corporation (CCC) and the Small
Business Administration (SBA).
OTHER FEDERAL AGENCY OBLIGATIONS -- Additional federal agency securities are
neither direct obligations of, nor guaranteed by, the U.S. government. These
obligations include securities issued by certain U.S. government agencies and
government-sponsored entities. However, they generally involve some form of
federal sponsorship: some operate under a government charter; some are backed by
specific types of collateral; some are supported by the issuer's right to borrow
from the Treasury; and others are supported only by the credit of the issuing
government agency or entity. These agencies and entities include, but are not
limited to: Federal Home Loan Bank, Federal Home Loan Mortgage Corporation
(Freddie Mac), Federal National Mortgage Association (Fannie Mae), Tennessee
Valley Authority and Federal Farm Credit Bank System.

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

REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements under
which the fund buys a security and obtains a simultaneous commitment from the
seller to repurchase the security at a specified time and price. Repurchase
agreements permit the fund to maintain liquidity and earn income over periods of
time as short as overnight. The seller must maintain

The New Economy Fund -- Page 5
<PAGE>

with the fund's custodian collateral equal to at least 100% of the repurchase
price, including accrued interest, as monitored daily by the investment adviser.
The fund will only enter into repurchase agreements involving securities in
which it could otherwise invest and with selected banks and securities dealers
whose financial condition is monitored by the investment adviser. If the seller
under the repurchase agreement defaults, the fund may incur a loss if the value
of the collateral securing the repurchase agreement has declined and may incur
disposition costs in connection with liquidating the collateral. If bankruptcy
proceedings are commenced with respect to the seller, realization of the
collateral by the fund may be delayed or limited.

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

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

* * * * * *

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

A fund's portfolio turnover rate would equal 100% if each security in the fund's
portfolio were replaced once per year. The fund's portfolio turnover rates for
the fiscal years ended November 30, 2006 and 2005 were 41% and 32%,
respectively. See "Financial highlights" in the prospectus for the fund's annual
portfolio turnover rate for each of the last five fiscal years.

FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS
FUNDAMENTAL POLICIES -- The fund has adopted the following fundamental policies
and investment restrictions, which may not be changed without approval by
holders of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), as the vote of the
lesser of (a) 67% or more of the outstanding voting securities present at a
shareholder meeting, if the holders of more than 50% of the outstanding voting
securities are present in person or by proxy, or (b) more than 50% of the
outstanding voting securities. All percentage limitations are considered at the
time securities are purchased and are based on the fund's net assets unless
otherwise indicated. None of the following

The New Economy Fund -- Page 6
<PAGE>

investment restrictions involving a maximum percentage of assets will be
considered violated unless the excess occurs immediately after, and is caused
by, an acquisition by the fund.

The fund may not:

1. Invest in securities of another issuer (other than the U.S. or its agencies
or instrumentalities), if immediately after and as a result of such investment
more than 5% of the value of the total assets of the fund would be invested in
the securities of such other issuer, or more than 10% of the outstanding voting
securities of such issuer would be owned by the fund;

2. Invest in companies for the purpose of exercising control or management;

3. Purchase the securities of companies in a particular industry (other than
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities) if thereafter 25% or more of the value of its total assets
would consist of securities issued by companies in that industry;

4. Buy or sell real estate in the ordinary course of its business; however,
the fund may invest in securities secured by real estate or interests therein or
issued by companies, including real estate investment trusts, which invest in
real estate or interests therein;

5. Buy or sell commodities or commodity contracts in the ordinary course of
its business provided, however, that entering into a forward currency contract
shall not be prohibited by this restriction;

6. Lend any security or make any other loan if, as a result, more than 15% or
its total assets would be lent to third parties, but this limitation does not
apply to purchases of debt securities or to repurchase agreements;

7. Sell securities short, except to the extent that the fund contemporaneously
owns or has the right to acquire at no additional cost, securities identical to
those sold short;

8. Purchase securities on margin;

9. Enter into any repurchase agreement if, as a result, more than 10% of the
fund's total assets would be subject to repurchase agreements maturing in more
than seven days (see above);

10. Borrow amounts in excess of 5% of the value of its total assets or issue
senior securities; in any event, the fund may borrow only as a temporary measure
for extraordinary or emergency purposes and not for investment in securities; or

11. Invest in puts, calls, straddles or spreads, or combinations thereof.

For purposes of investment restriction number 6, the fund does not currently
intend to lend portfolio securities.

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

The New Economy Fund -- Page 7
<PAGE>

1. The fund may not invest in securities of other investment companies, except
as permitted by the 1940 Act.

2. The fund may not invest more than 15% of the value of its net assets in
illiquid securities.

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

The New Economy Fund -- Page 8
<PAGE>

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES AND OFFICERS

"INDEPENDENT" TRUSTEES/1/

NAME, AGE AND NUMBER OF
POSITION WITH FUND PORTFOLIOS/3/
(YEAR FIRST ELECTED AS A PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
TRUSTEE/2/) DURING PAST FIVE YEARS BY TRUSTEE BY TRUSTEE
----------------------------------------------------------------------------------------------------------

Joseph C. Berenato, 60 Chairman of the Board, 6 Ducommun Incorporated
Trustee (2000) President and CEO, Ducommun
Incorporated (aerospace
components manufacturer)

----------------------------------------------------------------------------------------------------------
Richard G. Capen, Jr., 72 Corporate director and 15 Carnival Corporation
Trustee (1993) author; former U.S.
Ambassador to Spain; former
Vice Chairman,
Knight-Ridder, Inc.
(communications company);
former Chairman and
Publisher, The Miami Herald

----------------------------------------------------------------------------------------------------------
H. Frederick Christie, 73 Private investor; former 21 Ducommun Incorporated;
Trustee (1983) President and CEO, The IHOP Corporation;
Mission Group (non-utility Southwest Water Company
holding company, subsidiary
of Southern California
Edison Company)
----------------------------------------------------------------------------------------------------------
John G. Freund, 53 Founder and Managing 2 XenoPort, Inc.
Trustee (2000) Director, Skyline Ventures
(venture capital investor in
health care companies);
former Managing Director -
Alternative Asset Management
Group, Chancellor Capital
Management

----------------------------------------------------------------------------------------------------------
R. Clark Hooper, 60 President, Dumbarton Group 18 JPMorgan Value Opportunities
Trustee (2006) LLC (consulting); former Fund
Executive Vice President -
Policy and Oversight, NASD

----------------------------------------------------------------------------------------------------------
Leonade D. Jones, 59 Co-founder, VentureThink LLC 6 None
Trustee (1995) (developed and managed
e-commerce businesses) and
Versura Inc. (education loan
exchange); former Treasurer,
The Washington Post Company

----------------------------------------------------------------------------------------------------------
William H. Kling, 64 President, American Public 8 Irwin Financial Corporation
Chairman of the Board Media Group
(Independent and
Non-Executive) (1987)
----------------------------------------------------------------------------------------------------------
Patricia K. Woolf, 72 Private investor; corporate 6 None
Trustee (1984) director; former Lecturer,
Department of Molecular
Biology, Princeton
University
----------------------------------------------------------------------------------------------------------

The New Economy Fund -- Page 9
<PAGE>

"INTERESTED" TRUSTEES/5,6/

PRINCIPAL OCCUPATION(S)
DURING PAST FIVE YEARS
NAME, AGE AND AND POSITIONS NUMBER OF
POSITION WITH FUND HELD WITH AFFILIATED ENTITIES PORTFOLIOS/3/
(YEAR FIRST ELECTED AS A OR THE PRINCIPAL UNDERWRITER OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
TRUSTEE/OFFICER/2/) OF THE FUND BY TRUSTEE BY TRUSTEE
------------------------------------------------------------------------------------------------------------

Gordon Crawford, 60 Senior Vice President, Capital 2 None
Vice Chairman of the Board Research and Management
(1999) Company; Director, The Capital
Group Companies, Inc.*

------------------------------------------------------------------------------------------------------------
Timothy D. Armour, 46 President and Director, 1 None
President (1991) Capital Research and
Management Company; Director,
The Capital Group Companies,
Inc.*
------------------------------------------------------------------------------------------------------------

OTHER OFFICERS/6/

NAME, AGE AND
POSITION WITH FUND PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
(YEAR FIRST ELECTED AS AND POSITIONS HELD WITH AFFILIATED ENTITIES
AN OFFICER/2/) OR THE PRINCIPAL UNDERWRITER OF THE FUND
-------------------------------------------------------------------------------

Mark E. Denning, 49 Director, Capital Research and Management Company;
Senior Vice President Senior Vice President, Capital Research Company*
(2006)
-------------------------------------------------------------------------------
Claudia P. Senior Vice President, Capital Research and
Huntington, 54 Management Company; Director, The Capital Group
Senior Vice President Companies, Inc.*
(1996)
-------------------------------------------------------------------------------
Harold H. La, 36 Vice President, Capital Research Company*
Vice President (2006)
-------------------------------------------------------------------------------
David M. Riley, 39 Senior Vice President, Capital Research Company*
Vice President (2004)
-------------------------------------------------------------------------------
Dylan J. Yolles, 37 Vice President, Capital Research Company*
Vice President (2006)
-------------------------------------------------------------------------------
Chad L. Norton, 46 Vice President - Fund Business Management Group,
Secretary (1991) Capital Research and Management Company
-------------------------------------------------------------------------------
David A. Pritchett, Vice President - Fund Business Management Group,
40 Capital Research and Management Company
Treasurer (1999)
-------------------------------------------------------------------------------
Steven I. Koszalka, Assistant Vice President - Fund Business Management
42 Group, Capital Research and Management Company
Assistant Secretary
(2005)
-------------------------------------------------------------------------------
Sheryl F. Johnson, 38 Vice President - Fund Business Management Group,
Assistant Treasurer Capital Research and Management Company
(1998)
-------------------------------------------------------------------------------

The New Economy Fund -- Page 10
<PAGE>

* Company affiliated with Capital Research and Management Company.
/1/ An "independent" trustee refers to a trustee who is not an "interested person"
within the meaning of the 1940 Act.
/2/ Trustees and officers of the fund serve until their resignation, removal or
retirement.
/3/ Funds managed by Capital Research and Management Company, including the
American Funds, American Funds Insurance Series,(R) which is comprised of 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, American Funds Target Date Retirement Series, Inc., which
is comprised of nine funds and is available to investors in tax-deferred
retirement plans and IRAs, and Endowments, which is comprised of two portfolios
and whose shareholders are limited to certain nonprofit organizations.
/4/ This includes all directorships (other than those in the American Funds) that
are held by each trustee as a director of a public company or a registered
investment company.
/5/ "Interested persons," within the meaning of the 1940 Act, on the basis of
their affiliation with the fund's investment adviser, Capital Research and
Management Company, or affiliated entities (including the fund's principal
underwriter).
/6/ All of the officers listed are officers and/or directors/trustees of one or
more of the other funds for which Capital Research and Management Company
serves as investment adviser.
THE ADDRESS FOR ALL TRUSTEES AND OFFICERS OF THE FUND IS 333 SOUTH HOPE STREET,
55TH FLOOR, LOS ANGELES, CALIFORNIA 90071, ATTENTION: SECRETARY.

The New Economy Fund -- Page 11
<PAGE>

FUND SHARES OWNED BY TRUSTEES AS OF DECEMBER 31, 2006:

AGGREGATE DOLLAR RANGE/1/
OF SHARES
OWNED IN ALL FUNDS
IN THE AMERICAN FUNDS
DOLLAR RANGE/1/ OF FUND FAMILY OVERSEEN
NAME SHARES OWNED BY TRUSTEE
-------------------------------------------------------------------------------

"INDEPENDENT" TRUSTEES
-------------------------------------------------------------------------------
Joseph C. Berenato $10,001 - $50,000 Over $100,000
-------------------------------------------------------------------------------
Richard G. Capen, Jr. $50,001 - $100,000 Over $100,000
-------------------------------------------------------------------------------
H. Frederick Christie Over $100,000 Over $100,000
-------------------------------------------------------------------------------
John G. Freund Over $100,000 Over $100,000
-------------------------------------------------------------------------------
R. Clark Hooper $10,001 - $50,000 $50,001 - $100,000
-------------------------------------------------------------------------------
Leonade D. Jones $50,001 - $100,000 Over $100,000
-------------------------------------------------------------------------------
William H. Kling Over $100,000 Over $100,000
-------------------------------------------------------------------------------
Patricia K. Woolf $50,001 - $100,000 Over $100,000
-------------------------------------------------------------------------------
"INTERESTED" TRUSTEES
-------------------------------------------------------------------------------
Timothy D. Armour Over $100,000 Over $100,000
-------------------------------------------------------------------------------
Gordon Crawford Over $100,000 Over $100,000
-------------------------------------------------------------------------------

/1/ Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; and Over $100,000. The amounts listed
for "interested" trustees include shares owned through The Capital Group
Companies, Inc. retirement plan and 401(k) plan.
TRUSTEE COMPENSATION -- No compensation is paid by the fund to any officer or
trustee who is a director, officer or employee of the investment adviser or its
affiliates. The boards of funds advised by the investment adviser typically meet
either individually or jointly with the boards of one or more other such funds
with substantially overlapping board membership (in each case referred to as a
"board cluster"). The fund typically pays each independent trustee an annual
fee, which ranges from $14,000 to $34,000, based primarily on the total number
of board clusters on which that independent trustee serves.

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

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

No pension or retirement benefits are accrued as part of fund expenses.
Independent trustees may elect, on a voluntary basis, to defer all or a portion
of their fees through a deferred

The New Economy Fund -- Page 12
<PAGE>

compensation plan in effect for the fund. The fund also reimburses certain
expenses of the independent trustees.

TRUSTEE COMPENSATION PAID DURING THE FISCAL YEAR ENDED NOVEMBER 30, 2006

TOTAL COMPENSATION
(INCLUDING
VOLUNTARILY DEFERRED
AGGREGATE COMPENSATION COMPENSATION/1/)
(INCLUDING VOLUNTARILY FROM ALL FUNDS MANAGED BY
DEFERRED COMPENSATION/1/) CAPITAL RESEARCH AND
NAME FROM THE FUND MANAGEMENT
------------------------------------------------------------------------------------------------------- COMPANY OR ITS AFFILIATES/2/
-----------------------------

Joseph C. Berenato/3/ $38,084 $215,000
------------------------------------------------------------------------------------------------------------------------------------
Richard G. Capen, Jr. 37,220 152,430
------------------------------------------------------------------------------------------------------------------------------------
H. Frederick Christie/3/ 36,989 385,930
------------------------------------------------------------------------------------------------------------------------------------
John G. Freund/3/ 37,250 77,500
------------------------------------------------------------------------------------------------------------------------------------
R. Clark Hooper 7,869 206,263
------------------------------------------------------------------------------------------------------------------------------------
Leonade D. Jones/3/ 37,916 256,500
------------------------------------------------------------------------------------------------------------------------------------
William H. Kling 45,957 246,333
------------------------------------------------------------------------------------------------------------------------------------
Patricia K. Woolf/3/ 31,457 218,500
------------------------------------------------------------------------------------------------------------------------------------

/1/ Amounts may be deferred by eligible trustees under a nonqualified deferred
compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more American Funds
as designated by the trustees. Compensation shown in this table for the fiscal
year ended November 30, 2006 does not include earnings on amounts deferred in
previous fiscal years. See footnote 3 to this table for more information.
/2/ Funds managed by Capital Research and Management Company, including the
American Funds, American Funds Insurance Series,(R) which is comprised of 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, American Funds Target Date Retirement Series, Inc., which
is comprised of nine funds and is available to investors in tax-deferred
retirement plans and IRAs, and Endowments, which is comprised of two portfolios
and whose shareholders are limited to certain nonprofit organizations.
/3/ Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) through the 2006
fiscal year for participating trustees is as follows: Joseph C. Berenato
($193,542), H. Frederick Christie ($194,362), John G. Freund ($221,587),
Leonade D. Jones ($268,835) and Patricia K. Woolf ($160,633). Amounts deferred
and accumulated earnings thereon are not funded and are general unsecured
liabilities of the fund until paid to the trustees.

As of January 1, 2007, the officers and trustees of the fund and their families,
as a group, owned beneficially or of record less than 1% of the outstanding
shares of the fund.

FUND ORGANIZATION AND THE BOARD OF TRUSTEES -- The fund, an open-end,
diversified management investment company, was organized as a Massachusetts
business trust on May 17, 1983. Although the board of trustees has delegated
day-to-day oversight to the investment adviser, all fund operations are
supervised by the fund's board, which meets periodically and performs duties
required by applicable state and federal laws.

Massachusetts common law provides that a trustee of a Massachusetts business
trust owes a fiduciary duty to the trust and must carry out his or her
responsibilities as a trustee in accordance with that fiduciary duty. Generally,
a trustee will satisfy his or her duties if he or she acts in good faith and
uses ordinary prudence.

The New Economy Fund -- Page 13
<PAGE>

Members of the board who are not employed by the investment adviser or its
affiliates are paid certain fees for services rendered to the fund as described
above. They may elect to defer all or a portion of these fees through a deferred
compensation plan in effect for the fund.

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

The fund does not hold annual meetings of shareholders. However, significant
matters that require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. At the request of the holders of at least 10% of the shares,
the fund will hold a meeting at which any member of the board could be removed
by a majority vote.

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

COMMITTEES OF THE BOARD OF TRUSTEES -- The fund has an audit committee comprised
of Joseph C. Berenato; Richard G. Capen, Jr.; H. Frederick Christie; R. Clark
Hooper; and Leonade D. Jones, none of whom is an "interested person" of the fund
within the meaning of the 1940 Act. The committee provides oversight regarding
the fund's accounting and financial reporting policies and practices, its
internal controls and the internal controls of the fund's principal service
providers. The committee acts as a liaison between the fund's independent
registered public accounting firm and the full board of trustees. Six audit
committee meetings were held during the 2006 fiscal year.

The fund has a contracts committee comprised of Joseph C. Berenato; Richard G.
Capen, Jr.; H. Frederick Christie; John G. Freund; R. Clark Hooper; Leonade D.
Jones; William H. Kling; and Patricia K. Woolf, none of whom is an "interested
person" of the fund within the meaning of the 1940 Act. The committee's
principal function is to request, review and consider the information deemed
necessary to evaluate the terms of certain agreements between the fund and its
investment adviser or the investment adviser's affiliates, such as the
Investment Advisory and Service Agreement, Principal Underwriting Agreement,
Administrative Services Agreement and Plans of Distribution adopted pursuant to
rule 12b-1 under the 1940 Act, that the fund may enter

The New Economy Fund -- Page 14
<PAGE>

into, renew or continue, and to make its recommendations to the full board of
trustees on these matters. Two contracts committee meetings were held during the
2006 fiscal year.

The fund has a committee on governance comprised of Joseph C. Berenato; Richard
G. Capen, Jr.; H. Frederick Christie; John G. Freund; R. Clark Hooper; Leonade
D. Jones; William H. Kling; and Patricia K. Woolf, none of whom is considered an
"interested person" of the fund within the meaning of the 1940 Act. The
committee periodically reviews such issues as the board's composition,
responsibilities, committees and compensation and other relevant issues, and
recommends any appropriate changes to the full board of trustees. The committee
also evaluates, selects and nominates independent trustee candidates to the full
board of trustees. While the committee normally is able to identify from its own
resources an ample number of qualified candidates, it will consider shareholder
suggestions of persons to be considered as nominees to fill future vacancies on
the board. Such suggestions must be sent in writing to the committee on
governance, c/o the fund's secretary, and must be accompanied by complete
biographical and occupational data on the prospective nominee, along with a
written consent of the prospective nominee for consideration of his or her name
by the committee. Three committee on governance meetings were held during the
2006 fiscal year.

PROXY VOTING PROCEDURES AND GUIDELINES -- The fund and its investment adviser
have adopted Proxy Voting Guidelines (the "Guidelines") with respect to voting
proxies of securities held by the fund, other American Funds, Endowments and
American Funds Insurance Series. Certain American Funds have established
separate proxy voting committees that vote proxies or delegate to a voting
officer the authority to vote on behalf of those funds. Proxies for all other
funds are voted by a committee of the investment adviser under authority
delegated by those funds' boards. Therefore, if more than one fund invests in
the same company, they may vote differently on the same proposal.

All U.S. proxies are voted. Non-U.S. proxies also are voted, provided there is
sufficient time and information available. After a proxy is received, the
investment adviser prepares a summary of the proposals in the proxy. A
discussion of any potential conflicts of interest is also included in the
summary. After reviewing the summary, one or more research analysts familiar
with the company and industry make a voting recommendation on the proxy
proposals. A second recommendation is made by a proxy coordinator (a senior
investment professional) based on the individual's knowledge of the Guidelines
and familiarity with proxy-related issues. The proxy summary and voting
recommendations are then sent to the appropriate proxy voting committee for the
final voting decision.

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

The Guidelines, which have been in effect in substantially their current form
for many years, provide an important framework for analysis and decision-making
by all funds. However, they are not exhaustive and do not address all potential
issues. The Guidelines provide a certain amount of flexibility so that all
relevant facts and circumstances can be considered in connection with every
vote. As a result, each proxy received is voted on a case-by-case basis
considering the

The New Economy Fund -- Page 15
<PAGE>

specific circumstances of each proposal. The voting process reflects the funds'
understanding of the company's business, its management and its relationship
with shareholders over time.

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

The following summary sets forth the general positions of the American Funds,
Endowments, American Funds Insurance Series and the investment adviser on
various proposals. A copy of the full Guidelines is available upon request, free
of charge, by calling American Funds Service Company at 800/421-0180 or visiting
the American Funds website.

DIRECTOR MATTERS -- The election of a company's slate of nominees for
director is generally supported. Votes may be withheld for some or all of
the nominees if this is determined to be in the best interest of
shareholders. Separation of the chairman and CEO positions may also be
supported. Typically, proposals to declassify the board (elect all
directors annually) are supported based on the belief that this increases
the directors' sense of accountability to shareholders.

SHAREHOLDER RIGHTS -- Proposals to repeal an existing poison pill, to
provide for confidential voting and to provide for cumulative voting are
usually supported. Proposals to eliminate the right of shareholders to act
by written consent or to take away a shareholder's right to call a special
meeting are not typically supported.

COMPENSATION AND BENEFIT PLANS -- Option plans are complicated, and many
factors are considered in evaluating a plan. Each plan is evaluated based
on protecting shareholder interests and a knowledge of the company and its
management. Considerations include the pricing (or repricing) of options
awarded under the plan and the impact of dilution on existing shareholders
from past and future equity awards. Compensation packages should be
structured to attract, motivate and retain existing employees and qualified
directors; however, they should not be excessive.
ROUTINE MATTERS -- The ratification of auditors, procedural matters
relating to the annual meeting and changes to company name are examples of
items considered routine. Such items are generally voted in favor of
management's recommendations unless circumstances indicate otherwise.

PRINCIPAL FUND SHAREHOLDERS -- The following table identifies those investors
who own of record or are known by the fund to own beneficially 5% or more of any
class of its shares as of the opening of business on January 1, 2007. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.

The New Economy Fund -- Page 16
<PAGE>

NAME AND ADDRESS OWNERSHIP PERCENTAGE
----------------------------------------------------------------------------

Edward D. Jones & Co. Class A 11.07%
201 Progress Parkway Class B 5.21
Maryland Heights, MO 63043-3009
----------------------------------------------------------------------------
Citigroup Global Markets, Inc. Class C 10.89
333 W. 34th Street
New York, NY 10001-2402
----------------------------------------------------------------------------
MLPF&S Class C 5.88
4800 Deer Lake Drive E., Floor 2
Jacksonville, FL 32246-6484
----------------------------------------------------------------------------
FTC & Co. Class F 10.66
P.O. Box 173736
Denver, CO 80217-3736
----------------------------------------------------------------------------
Hartford Life Insurance Co. Class R-1 26.91
P.O. Box 2999 Class R-3 7.79
Hartford, CT 06104-2999
----------------------------------------------------------------------------
Raymond James & Associates, Inc. Class R-1 7.83
880 Carillon Parkway
St. Petersburg, FL 33716-1100
----------------------------------------------------------------------------
Louis A. Rigali & Robert Liptak Class R-1 6.03
805 S. Wheatley Street, Suite 600
Ridgeland, MS 39157-5005
----------------------------------------------------------------------------
CB&T Class R-4 9.97
8515 E. Orchard Road, #2T2
Greenwood Village, CO 80111-5002
----------------------------------------------------------------------------
CB&T Class R-4 7.50
8515 E. Orchard Road, #2T2
Greenwood Village, CO 80111-5002
----------------------------------------------------------------------------
CB&T Class R-4 6.49
8515 E. Orchard Road, #2T2
Greenwood Village, CO 80111-5002
----------------------------------------------------------------------------
CGTC TR Class R-5 46.33
400 S. Hope Street, Floor 22
Los Angeles, CA 90071-2801
----------------------------------------------------------------------------
Saxon & Co. Class R-5 11.37
P.O. Box 7780-1888
Philadelphia, PA 19182-0001
----------------------------------------------------------------------------
Nationwide Trust Company Class R-5 6.91
P.O. Box 182029
Columbus, OH 43218-2029
----------------------------------------------------------------------------
The Northern Trust Class R-5 5.27
P.O. Box 92994
Chicago, IL 60675-2994
----------------------------------------------------------------------------

The New Economy Fund -- Page 17
<PAGE>

INVESTMENT ADVISER -- Capital Research and Management Company, the fund's
investment adviser, founded in 1931, maintains research facilities in the United
States and abroad (Los Angeles, San Francisco, New York, Washington, DC, London,
Geneva, Hong Kong, Singapore and Tokyo). These facilities are staffed with
experienced investment professionals. The investment adviser is located at 333
South Hope Street, Los Angeles, CA 90071 and 135 South State College Boulevard,
Brea, CA 92821. It is a wholly owned subsidiary of The Capital Group Companies,
Inc., a holding company for several investment management subsidiaries. The
investment adviser manages equity assets for the American Funds through two
divisions. These divisions generally function separately from each other with
respect to investment research activities and they make investment decisions for
the funds on a separate basis.

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

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

Portfolio counselors and investment analysts are paid competitive salaries by
Capital Research and Management Company. In addition, they may receive bonuses
based on their individual portfolio results. Investment professionals also may
participate in profit-sharing plans. The relative mix of compensation
represented by bonuses, salary and profit-sharing will vary depending on the
individual's portfolio results, contributions to the organization and other
factors. In order to encourage a long-term focus, bonuses based on investment
results are calculated by comparing pretax total returns to relevant benchmarks
over both the most recent year and a four-year rolling average, with the greater
weight placed on the four-year rolling average. For portfolio counselors,
benchmarks may include measures of the marketplaces in which the relevant fund
invests and measures of the results of comparable mutual funds. For investment
analysts, benchmarks may include relevant market measures and appropriate
industry or sector indexes reflecting their areas of expertise. Capital Research
and Management Company also separately compensates analysts for the quality of
their research efforts. The benchmarks against which The New Economy Fund
portfolio counselors are measured include: Lipper Multi-Cap Growth Funds Index,
Global Services and Information Index and Non-U.S. Services Information.

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

The New Economy Fund -- Page 18
<PAGE>

THE FOLLOWING TABLE REFLECTS INFORMATION AS OF NOVEMBER 30, 2006:

NUMBER NUMBER
OF OTHER OF OTHER NUMBER
REGISTERED POOLED OF OTHER
INVESTMENT INVESTMENT ACCOUNTS
COMPANIES (RICS) VEHICLES (PIVS) THAT
THAT THAT PORTFOLIO
PORTFOLIO PORTFOLIO COUNSELOR
DOLLAR RANGE COUNSELOR COUNSELOR MANAGES
OF FUND MANAGES MANAGES (ASSETS OF
PORTFOLIO SHARES (ASSETS OF RICS (ASSETS OF PIVS OTHER ACCOUNTS
COUNSELOR OWNED/1/ IN BILLIONS)/2/ IN BILLIONS)/3/ IN BILLIONS)/4/
------------------------------------------------------------------------------------------------

Gordon Crawford Over 3 $270.2 1 $0.01 None
$1,000,000
-------------------------------------------------------------------------------------------------
Timothy D. Armour Over 3 $190.1 None None
$1,000,000
-------------------------------------------------------------------------------------------------
Mark E. Denning None/5/ 6 $347.7 2 $0.08 None
-------------------------------------------------------------------------------------------------
Claudia P. $100,001 - 3 $134.2 1 $0.01 None
Huntington $500,000
-------------------------------------------------------------------------------------------------

/1/ Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; $100,001 - $500,000; $500,001 -
$1,000,000; and Over $1,000,000. The amounts listed include shares owned
through The Capital Group Companies, Inc. retirement plan and 401(k) plan.
/2/ Indicates fund(s) where the portfolio counselor also has significant
responsibilities for the day to day management of the fund(s). Assets noted are
the total net assets of the registered investment companies and are not
indicative of the total assets managed by the individual, which is a
substantially lower amount. No fund has an advisory fee that is based on the
performance of the fund.
/3/ Represents funds advised or sub-advised by Capital Research and Management
Company and sold outside the United States and/ or fixed-income assets in
institutional accounts managed by investment adviser subsidiaries of Capital
Group International, Inc., an affiliate of Capital Research and Management
Company. Assets noted are the total net assets of the funds or accounts and are
not indicative of the total assets managed by the individual, which is a
substantially lower amount. No fund or account has an advisory fee that is
based on the performance of the fund or account.
/4/ Reflects other professionally managed accounts held at companies affiliated
with Capital Research and Management Company. Personal brokerage accounts of
portfolio counselors and their families are not reflected.
/5/ Portfolio counselor resides outside the United States. As such, tax
considerations may adversely influence his or her ability to own shares of the fund.
INVESTMENT ADVISORY AND SERVICE AGREEMENT -- The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the investment adviser will
continue in effect until November 30, 2007, unless sooner terminated, and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (a) the board of trustees, or by the
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the fund, and (b) the vote of a majority of trustees who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement provides that the investment adviser has no
liability to the fund for its acts or omissions in the performance of its
obligations to the fund not involving willful misconduct, bad faith, gross
negligence or reckless disregard of its obligations under the Agreement. The
Agreement also provides that either party has the right to terminate it, without
penalty, upon 60 days' written notice to the other party, and that the Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).

The New Economy Fund -- Page 19
<PAGE>

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

As compensation for its services, the investment adviser receives a monthly fee
that is accrued daily, calculated at the annualized rates of:

Net asset level

RATE IN EXCESS OF UP TO
------------------------------------------------------------------------------

0.580% $ 0 $ 500,000,000
------------------------------------------------------------------------------
0.480 500,000,000 1,000,000,000
------------------------------------------------------------------------------
0.440 1,000,000,000 1,500,000,000
------------------------------------------------------------------------------
0.410 1,500,000,000 2,500,000,000
------------------------------------------------------------------------------
0.390 2,500,000,000 4,000,000,000
------------------------------------------------------------------------------
0.380 4,000,000,000 6,500,000,000
------------------------------------------------------------------------------
0.370 6,500,000,000 10,500,000,000
------------------------------------------------------------------------------
0.365 10,500,000,000 13,000,000,000
------------------------------------------------------------------------------
0.360 13,000,000,000 17,000,000,000
------------------------------------------------------------------------------
0.355 17,000,000,000 21,000,000,000
------------------------------------------------------------------------------
0.350 21,000,000,000 27,000,000,000
------------------------------------------------------------------------------
0.345 27,000,000,000
------------------------------------------------------------------------------

If net assets fall below $3 billion, the Agreement provides for lower fees
calculated at the annual rates of 0.60% on the first $300 million of the fund's
net assets, 0.48% on assets over $300 million to $750 million, 0.45% on assets
over $750 million to $1.25 billion, and 0.42% on assets over $1.25 billion.

The investment adviser has agreed that in the event the Class A expenses of the
fund (with the exclusion of interest, taxes, brokerage costs, distribution
expenses pursuant to a plan under rule 12b-1 and extraordinary expenses such as
litigation and acquisitions or other expenses excludable under applicable state
securities laws or regulations) for any fiscal year ending on a date on which
the Agreement is in effect exceed the expense limitations, if any, applicable to
the

The New Economy Fund -- Page 20
<PAGE>

fund pursuant to state securities laws or any related regulations, it will
reduce its fee by the extent of such excess and, if required pursuant to any
such laws or any regulations thereunder, will reimburse the fund in the amount
of such excess. To the extent the fund's management fee must be waived due to
Class A share expense ratios exceeding the above limit, management fees will be
reduced similarly for all classes of shares of the fund, or other Class A fees
will be waived in lieu of management fees.

Expenses which are not subject to these limitations are interest, taxes and
extraordinary expenses. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and not as expenses. To
the extent the fund's management fee must be waived due to Class A share expense
ratios exceeding the expense limitations described above, management fees will
be reduced similarly for all classes of shares of the fund, or other Class A
fees will be waived in lieu of management fees.

For the fiscal years ended November 30, 2006, 2005 and 2004, the investment
adviser was entitled to receive from the fund management fees of $32,745,000,
$30,080,000 and $29,763,000, respectively. After giving effect to the management
fee waivers/expense reimbursements described below, the fund paid the investment
adviser management fees of $29,470,000 (a reduction of $3,275,000), $27,575,000
(a reduction of $2,505,000) and $29,398,000 (a reduction of $365,000) for the
fiscal years ended November 30, 2006, 2005 and 2004, respectively.

For the period from September 1, 2004 through March 31, 2005, the investment
adviser agreed to waive 5% of the management fees that it was otherwise entitled
to receive under the Agreement. Beginning April 1, 2005, this waiver increased
to 10% of the management fees that the investment adviser is otherwise entitled
to receive. As a result of this waiver, management fees are reduced similarly
for all classes of shares of the fund.

ADMINISTRATIVE SERVICES AGREEMENT -- The Administrative Services Agreement (the
"Administrative Agreement") between the fund and the investment adviser relating
to the fund's Class C, F, R and 529 shares will continue in effect until
November 30, 2007, unless sooner terminated, and may be renewed from year to
year thereafter, provided that any such renewal has been specifically approved
at least annually by the vote of a majority of trustees who are not parties to
the Administrative Agreement or interested persons (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such approval. The fund may terminate the Administrative Agreement at any
time by vote of a majority of independent trustees. The investment adviser has
the right to terminate the Administrative Agreement upon 60 days' written notice
to the fund. The Administrative Agreement automatically terminates in the event
of its assignment (as defined in the 1940 Act).

Under the Administrative Agreement, the investment adviser provides certain
transfer agent and administrative services for shareholders of the fund's Class
C and F shares, and Class R and 529 shares. The investment adviser may contract
with third parties, including American Funds Service Company, the fund's
Transfer Agent, to provide these services. Services include, but are not limited
to, shareholder account maintenance, transaction processing, tax information
reporting and shareholder and fund communications. In addition, the investment
adviser monitors, coordinates and oversees the activities performed by third
parties providing such services. For Class R-1 and R-2 shares, the investment
adviser has agreed to pay a portion of

The New Economy Fund -- Page 21
<PAGE>

the fees payable under the Administrative Agreement that would otherwise have
been paid by the fund. For the year ended November 30, 2006, the total fees paid
by the investment adviser were $140,000.

As compensation for its services, the investment adviser receives transfer agent
fees for transfer agent services provided to the fund's Class C, F, R and 529
shares. Transfer agent fees are paid monthly according to a fee schedule
contained in a Shareholder Services Agreement between the fund and American
Funds Service Company. The investment adviser also receives an administrative
services fee at the annual rate of up to 0.15% of the average daily net assets
for Class C, F, R (excluding Class R-5 shares) and 529 shares for administrative
services provided to these share classes. Administrative services fees are paid
monthly and accrued daily. The investment adviser uses a portion of this fee to
compensate third parties for administrative services provided to the fund. Of
the remainder, the investment adviser does not retain more than 0.05% of the
average daily net assets for each applicable share class. For Class R-5 shares,
the administrative services fee is calculated at the annual rate of up to 0.10%
of the average daily net assets. This fee is subject to the same uses and
limitations described above.

During the 2006 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:

ADMINISTRATIVE SERVICES FEE
--------------------------------------------------------------------------------

CLASS C $214,000
--------------------------------------------------------------------------------
CLASS F 203,000
--------------------------------------------------------------------------------
CLASS 529-A 79,000
--------------------------------------------------------------------------------
CLASS 529-B 18,000
--------------------------------------------------------------------------------
CLASS 529-C 30,000
--------------------------------------------------------------------------------
CLASS 529-E 5,000
--------------------------------------------------------------------------------
CLASS 529-F 2,000
--------------------------------------------------------------------------------
CLASS R-1 10,000
--------------------------------------------------------------------------------
CLASS R-2 438,000
--------------------------------------------------------------------------------
CLASS R-3 165,000
--------------------------------------------------------------------------------
CLASS R-4 56,000
--------------------------------------------------------------------------------
CLASS R-5 90,000
--------------------------------------------------------------------------------

PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds Distributors,
Inc. (the "Principal Underwriter") is the principal underwriter of the fund's
shares. The Principal Underwriter is located at 333 South Hope Street, Los
Angeles, CA 90071; 135 South State College Boulevard, Brea, CA 92821; 15370
Barranca Parkway, Irvine, CA 92618; 3500 Wiseman Boulevard, San Antonio, TX
78251; 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240; and 5300 Robin
Hood Road, Norfolk, VA 23513.

The Principal Underwriter receives revenues from sales of the fund's shares. For
Class A and 529-A shares, the Principal Underwriter receives commission revenue
consisting of that portion

The New Economy Fund -- Page 22
<PAGE>

of the Class A and 529-A sales charge remaining after the allowances by the
Principal Underwriter to investment dealers. For Class B and 529-B shares, the
Principal Underwriter sells the rights to the 12b-1 fees paid by the fund for
distribution expenses to a third party and receives the revenue remaining after
compensating investment dealers for sales of Class B and 529-B shares. The fund
also pays the Principal Underwriter for advancing the immediate service fees
paid to qualified dealers of Class B and 529-B shares. For Class C and 529-C
shares, the Principal Underwriter receives any contingent deferred sales charges
that apply during the first year after purchase. The fund pays the Principal
Underwriter for advancing the immediate service fees and commissions paid to
qualified dealers of Class C and 529-C shares. For Class 529-E shares, the fund
pays the Principal Underwriter for advancing the immediate service fees and
commissions paid to qualified dealers. For Class F and 529-F shares, the fund
pays the Principal Underwriter for advancing the immediate service fees paid to
qualified dealers and advisers who sell Class F and 529-F shares. For Class R-1,
R-2, R-3 and R-4 shares, the fund pays the Principal Underwriter for advancing
the immediate service fees paid to qualified dealers and advisers who sell Class
R-1, R-2, R-3 and R-4 shares.

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

COMMISSIONS, ALLOWANCE OR
REVENUE COMPENSATION
FISCAL YEAR/PERIOD OR FEES RETAINED TO DEALERS
-----------------------------------------------------------------------------------------------------

CLASS A 2006 $1,824,000 $7,983,000
2005 1,420,000 6,387,000
2004 1,730,000 7,885,000
-----------------------------------------------------------------------------------------------------
CLASS B 2006 79,000 575,000
2005 104,000 483,000
2004 142,000 1,021,000
-----------------------------------------------------------------------------------------------------
CLASS C 2006 -- 347,000
2005 5,000 212,000
2004 48,000 257,000
-----------------------------------------------------------------------------------------------------
CLASS 529-A 2006 93,000 438,000
2005 73,000 340,000
2004 72,000 346,000
-----------------------------------------------------------------------------------------------------
CLASS 529-B 2006 9,000 59,000
2005 12,000 111,000
2004 20,000 113,000
-----------------------------------------------------------------------------------------------------
CLASS 529-C 2006 -- 60,000
2005 2,000 37,000
2004 -- 43,000
-----------------------------------------------------------------------------------------------------

The New Economy Fund -- Page 23
<PAGE>

The fund has adopted plans of distribution (the "Plans") pursuant to rule 12b-1
under the 1940 Act. The Principal Underwriter receives amounts payable pursuant
to the Plans (see below). As required by rule 12b-1 and the 1940 Act, the Plans
(together with the Principal Underwriting Agreement) have been approved by the
full board of trustees and separately by a majority of the independent trustees
of the fund who have no direct or indirect financial interest in the operation
of the Plans or the Principal Underwriting Agreement. Potential benefits of the
Plans to the fund include quality shareholder services; savings to the fund in
transfer agency costs; and benefits to the investment process from growth or
stability of assets. The selection and nomination of independent trustees are
committed to the discretion of the independent trustees during the existence of
the Plans. The Plans may not be amended to increase materially the amount spent
for distribution without shareholder approval. Plan expenses are reviewed
quarterly and the Plans must be renewed annually by the board of trustees.

Under the Plans, the fund may annually expend the following amounts to finance
any activity primarily intended to result in the sale of fund shares, provided
the fund's board of trustees has approved the category of expenses for which
payment is being made: (a) for Class A shares, up to 0.25% of the average daily
net assets attributable to Class A shares; (b) for Class 529-A shares, up to
0.50% of the average daily net assets attributable to Class 529-A shares; (c)
for Class B and 529-B shares, up to 1.00% of the average daily net assets
attributable to Class B and 529-B shares, respectively; (d) for Class C and
529-C shares, up to 1.00% of the average daily net assets attributable to Class
C and 529-C shares, respectively; (e) for Class 529-E shares, up to 0.75% of the
average daily net assets attributable to Class 529-E shares; (f) for Class F and
529-F shares, up to 0.50% of the average daily net assets attributable to Class
F and 529-F shares, respectively; (g) for Class R-1 shares, up to 1.00% of the
average daily net assets attributable to Class R-1 shares; (h) for Class R-2
shares, up to 1.00% of the average daily net assets attributable to Class R-2
shares; (i) for Class R-3 shares, up to 0.75% of the average daily net assets
attributable to Class R-3 shares; and (j) for Class R-4 shares, up to 0.50% of
the average daily net assets attributable to Class R-4 shares. The fund has not
adopted a Plan for Class R-5 shares; accordingly, no 12b-1 fees are paid from
Class R-5 share assets.

For Class A and 529-A shares: (a) up to 0.25% is reimbursed to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to the amount allowable under the fund's Class
A and 529-A 12b-1 limit, after reimbursement for

The New Economy Fund -- Page 24
<PAGE>

paying service-related expenses, is reimbursed to the Principal Underwriter for
paying distribution-related expenses, including dealer commissions and
wholesaler compensation paid on sales of shares of $1 million or more purchased
without a sales charge (including purchases by employer-sponsored defined
contribution-type retirement plans investing $1 million or more or with 100 or
more eligible employees, and retirement plans, endowments and foundations with
$50 million or more in assets -- "no load purchases"). Commissions on no load
purchases of Class A and 529-A shares in excess of the Class A and 529-A plan
limitations not reimbursed to the Principal Underwriter during the most recent
fiscal quarter are recoverable for five quarters, provided the amount recovered
does not cause the fund to exceed the annual expense limit. After five quarters,
these commissions are not recoverable.

For Class B and 529-B shares: (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) 0.75% is paid to the Principal Underwriter for
distribution-related expenses, including the financing of commissions paid to
qualified dealers.

For Class C and 529-C shares: (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.75% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class 529-E shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.25% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class F and 529-F shares: currently up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers or advisers.

For Class R-1 shares: (a) up to 0.25% is paid to the Principal Underwriter for
paying service-related expenses, including paying service fees to qualified
dealers, and (b) up to 0.75% is paid to the Principal Underwriter for
distribution-related expenses, including commissions paid to qualified dealers.

For Class R-2 shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.50% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class R-3 shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.25% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class R-4 shares: currently up to 0.25% is paid to the Principal Underwriter
for paying service-related expenses, including paying service fees to qualified
dealers or advisers.

The New Economy Fund -- Page 25
<PAGE>

As of the end of the 2006 fiscal year, total 12b-1 expenses, and the portion of
the expenses that remained unpaid, were:

12B-1 UNPAID LIABILITY
12B-1 EXPENSES OUTSTANDING
------------------------------------------------------------------------------------------------

CLASS A $17,395,000 $3,389,000
------------------------------------------------------------------------------------------------
CLASS B 1,930,000 237,000
------------------------------------------------------------------------------------------------
CLASS C 1,141,000 250,000
------------------------------------------------------------------------------------------------
CLASS F 383,000 117,000
------------------------------------------------------------------------------------------------
CLASS 529-A 104,000 24,000
------------------------------------------------------------------------------------------------
CLASS 529-B 113,000 15,000
------------------------------------------------------------------------------------------------
CLASS 529-C 190,000 43,000
------------------------------------------------------------------------------------------------
CLASS 529-E 18,000 5,000
------------------------------------------------------------------------------------------------
CLASS 529-F 0 0
------------------------------------------------------------------------------------------------
CLASS R-1 57,000 19,000
------------------------------------------------------------------------------------------------
CLASS R-2 539,000 144,000
------------------------------------------------------------------------------------------------
CLASS R-3 311,000 83,000
------------------------------------------------------------------------------------------------
CLASS R-4 88,000 23,000
------------------------------------------------------------------------------------------------

OTHER COMPENSATION TO DEALERS -- As of January 2007, the top dealers (or their
affiliates) that American Funds Distributors anticipates will receive additional
compensation (as described in the prospectus) include:

A. G. Edwards & Sons, Inc.
AIG Advisors Group:
Advantage Capital Corporation
AIG Financial Advisors, Inc.
American General Securities Incorporated
FSC Securities Corporation
Royal Alliance Associates, Inc.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc.
Cambridge Investment Research, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Deutsche Bank Securities Inc.
Edward Jones
Genworth Financial Securities Corporation
Hefren-Tillotson, Inc.
HTK/Janney Montgomery Group:
Hornor, Townsend & Kent, Inc.
Janney Montgomery Scott LLC

The New Economy Fund -- Page 26
<PAGE>

ING Advisors Network Inc.:
Bancnorth Investment Group, Inc.
Financial Network Investment Corporation
Guaranty Brokerage Services, Inc.
ING Financial Partners, Inc.
Multi-Financial Securities Corporation
Primevest Financial Services, Inc.
InterSecurities/Transamerica:
InterSecurities, Inc.
Transamerica Financial Advisors, Inc.
J.J.B. Hilliard/PNC Bank:
J.J.B. Hilliard, W.L. Lyons, Inc.
PNC Bank, National Association
PNC Brokerage Corp.
PNC Investments LLC
Lincoln Financial Advisors Corporation:
Lincoln Financial Advisors Corporation
Jefferson Pilot Securities Corporation
LPL Financial Services:
Linsco/Private Ledger Corp.
Uvest Investment Services
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Metlife Enterprises:
Metlife Securities Inc.
Tower Square Securities
New England Securities
Walnut Street Securities, Inc.
MML Investors Services, Inc.
Morgan Keegan & Company, Inc.
Morgan Stanley DW Inc.
National Planning Holdings Inc.:
Invest Financial Corporation
Investment Centers of America, Inc.
National Planning Corporation
SII Investments, Inc.
NFP Securities, Inc.
Northwestern Mutual Investment Services, LLC
Pacific Select Distributors Inc.:
Associated Securities Corp.
Contemporary Financial Solutions, Inc.
M.L. Stern & Co., LLC
Mutual Service Corporation
Sorrento Pacific Financial, LLC
United Planners' Financial Services of America
Waterstone Financial Group, Inc.
Park Avenue Securities LLC
Princor Financial Services Corporation
Raymond James Group:
Raymond James & Associates, Inc.
Raymond James Financial Services Inc.

The New Economy Fund -- Page 27
<PAGE>

RBC Dain Rauscher Inc.
Robert W. Baird & Co. Incorporated
Securian/C.R.I.:
CRI Securities, LLC
Securian Financial Services, Inc.
Smith Barney
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
First Clearing LLC
Wells Fargo Investments, L.L.C.

EXECUTION OF PORTFOLIO TRANSACTIONS

As described in the prospectus, the investment adviser places orders with
broker-dealers for the fund's portfolio transactions. Portfolio transactions for
the fund may be executed as part of concurrent authorizations to purchase or
sell the same security for other funds served by the investment adviser, or for
trusts or other accounts served by affiliated companies of the investment
adviser. When such concurrent authorizations occur, the objective is to allocate
the executions in an equitable manner.

Brokerage commissions paid on portfolio transactions, including investment
dealer concessions on underwritings, if applicable, for the fiscal years ended
November 30, 2006, 2005 and 2004 amounted to $8,394,000, $7,322,000 and
$11,176,000, respectively. With respect to fixed-income securities, brokerage
commissions include explicit investment dealer concessions and may exclude other
transaction costs which may be reflected in the spread between the bid and asked
price. The increase in brokerage commissions paid in 2006 is attributable to
increase in brokerage transactions and in the number of shares transacted.

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

At the end of the fund's most recent fiscal year, the fund's regular
broker-dealers included Citigroup Global Markets Inc., J.P. Morgan Securities
Inc. and UBS Financial Services Inc. As of the fund's most recent fiscal
year-end, the fund held equity securities of Citigroup Inc. in the amount of
$49,590,000, J.P. Morgan Chase & Co. in the amount of $25,454,000 and UBS AG in
the amount of $4,930,000. The fund held debt securities of J.P. Morgan Chase &
Co. in the amount of $16,231,000.

DISCLOSURE OF PORTFOLIO HOLDINGS

The fund's investment adviser, on behalf of the fund, has adopted policies and
procedures with respect to the disclosure of information about fund portfolio
securities. These policies and procedures have been reviewed by the fund's board
of trustees and compliance will be

The New Economy Fund -- Page 28
<PAGE>

periodically assessed by the board in connection with reporting from the fund's
Chief Compliance Officer.

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

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

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

PRICE OF SHARES
Shares are purchased at the offering price or sold at the net asset value price
next determined after the purchase or sell order is received and accepted by the
fund or the Transfer Agent; the offering or net asset value price is effective
for orders received prior to the time of determination

The New Economy Fund -- Page 29
<PAGE>

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

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

Prices that appear in the newspaper do not always indicate prices at which you
will be purchasing and redeeming shares of the fund, since such prices generally
reflect the previous day's closing price, while purchases and redemptions are
made at the next calculated price. The price you pay for shares, the offering
price, is based on the net asset value per share, which is calculated once daily
as of approximately 4:00 p.m. New York time, which is the normal close of
trading on the New York Stock Exchange, each day the Exchange is open. If, for
example, the Exchange closes at 1:00 p.m., the fund's share price would still be
determined as of 4:00 p.m. New York time. The New York Stock Exchange is
currently closed on weekends and on the following holidays: New Year's Day;
Martin Luther King, Jr. Day; Presidents' Day; Good Friday; Memorial Day;
Independence Day; Labor Day; Thanksgiving; and Christmas Day. Each share class
of the fund has a separately calculated net asset value (and share price).

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

1. Equity securities, including depositary receipts, are valued at the
official closing price of, or the last reported sale price on, the exchange or
market on which such securities are traded, as of the close of business on the
day the securities are being valued or, lacking any sales, at the last available
bid price. Prices for each security are taken from the principal exchange or
market in which the security trades. Fixed-income securities are valued at
prices obtained from an independent pricing service, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued at the mean quoted bid and
asked prices (or bid prices, if asked prices are not available) or at prices for
securities of comparable maturity, quality and type. The pricing services base
bond prices on, among other things, an evaluation of the yield curve as of
approximately 3:00 p.m. New York time. The fund's investment adviser performs
certain checks on these prices prior to calculation of the fund's net asset
value.

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

The New Economy Fund -- Page 30
<PAGE>

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

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

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

The valuation committee has adopted guidelines and procedures (consistent with
SEC rules and guidance) to ensure that certain basic principles and factors are
considered when making all fair value determinations. As a general principle,
securities lacking readily available market quotations, or that have quotations
that are considered unreliable by the investment adviser, are valued in good
faith by the valuation committee based upon what the fund might reasonably
expect to receive upon their current sale. The valuation committee considers all
indications of value available to it in determining the fair value to be
assigned to a particular security, including, without limitation, the type and
cost of the security, contractual or legal restrictions on resale of the
security, relevant financial or business developments of the issuer, actively
traded similar or related securities, conversion or exchange rights on the
security, related corporate actions, significant events occurring after the
close of trading in the security and changes in overall market conditions. The
valuation committee employs additional fair value procedures to address issues
related to investing substantial portions of applicable fund portfolios outside
the United States. Securities owned by these funds trade in markets that open
and close at different times, reflecting time zone differences. If significant
events occur after the close of a market (and before these fund's net asset
values are next determined) which affect the value of portfolio securities,
appropriate adjustments from closing market prices may be made to reflect these
events. Events of this type could include, for example, earthquakes and other
natural disasters or significant price changes in other markets (e.g., U.S.
stock markets).

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

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

The New Economy Fund -- Page 31
<PAGE>

TAXES AND DISTRIBUTIONS

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

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

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

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

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

The New Economy Fund -- Page 32
<PAGE>

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

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

DIVIDENDS -- The fund intends to follow the practice of distributing
substantially all of its investment company taxable income. Investment
company taxable income generally includes dividends, interest, net
short-term capital gains in excess of net long-term capital losses, and
certain foreign currency gains, if any, less expenses and certain foreign
currency losses. To the extent the fund invests in stock of domestic and
certain foreign corporations and meets the applicable holding period
requirement, it may receive "qualified dividends". The fund will designate
the amount of "qualified dividends" to its shareholders in a notice sent
within 60 days of the close of its fiscal year and will report "qualified
dividends" to shareholders on Form 1099-DIV.
Under the Code, gains or losses attributable to fluctuations in exchange
rates that occur between the time the fund accrues receivables or
liabilities denominated in a foreign currency and the time the fund
actually collects such receivables, or pays such liabilities, generally are
treated as ordinary income or ordinary loss. Similarly, on disposition of
debt securities denominated in a foreign currency and on disposition of
certain futures contracts, forward contracts and options, gains or losses
attributable to fluctuations in the value of foreign currency between the
date of acquisition of the security or contract and the date of disposition
are also treated as ordinary gain or loss. These gains or losses, referred
to under the Code as Section 988 gains or losses, may increase or decrease
the amount of the fund's investment company taxable income to be
distributed to its shareholders as ordinary income.

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

To avoid such tax and interest, the fund intends to elect to treat these
securities as sold on the last day of its fiscal year and recognize any
gains for tax purposes at that time. Under this election, deductions for
losses are allowable only to the extent of any prior recognized gains, and
both gains and losses will be treated as ordinary income or loss.

The New Economy Fund -- Page 33
<PAGE>

The fund will be required to distribute any resulting income, even though
it has not sold the security and received cash to pay such distributions.
Upon disposition of these securities, any gain recognized is treated as
ordinary income and loss is treated as ordinary loss to the extent of any
prior recognized gain.

Dividends from domestic corporations are expected to comprise some portion
of the fund's gross income. To the extent that such dividends constitute
any of the fund's gross income, a portion of the income distributions of
the fund may be eligible for the deduction for dividends received by
corporations. Corporate shareholders will be informed of the portion of
dividends that so qualifies. The dividends-received deduction is reduced to
the extent that either the fund shares, or the underlying shares of stock
held by the fund, with respect to which dividends are received, are treated
as debt-financed under federal income tax law, and is eliminated if the
shares are deemed to have been held by the shareholder or the fund, as the
case may be, for less than 46 days during the 90-day period beginning on
the date that is 45 days before the date on which the shares become
ex-dividend. Capital gain distributions are not eligible for the
dividends-received deduction.

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

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

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

CAPITAL GAIN DISTRIBUTIONS -- The fund also intends to follow the practice
of distributing the entire excess of net realized long-term capital gains
over net realized short-term capital losses. Net capital gains for a fiscal
year are computed by taking into account any capital loss carry forward of
the fund.
If any net long-term capital gains in excess of net short-term capital
losses are retained by the fund for reinvestment, requiring federal income
taxes to be paid thereon by the fund, the fund intends to elect to treat
such capital gains as having been distributed to shareholders. As a result,
each shareholder will report such capital gains as long-term capital gains
taxable to individual shareholders at a maximum 15% capital gains rate,
will be able to claim a pro rata share of federal income taxes paid by the
fund on such gains as a credit against personal federal income tax
liability, and will be entitled to increase the

The New Economy Fund -- Page 34
<PAGE>

adjusted tax basis on fund shares by the difference between a pro rata
share of the retained gains and such shareholder's related tax credit.

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

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

CAPITAL GAINS -- Distributions of the excess of net long-term capital gains
over net short-term capital losses that the fund properly designates as
"capital gain dividends" generally will be taxable as long-term capital
gain. Regardless of the length of time the shares of the fund have been
held by a shareholder, a capital gain distribution by the fund is subject
to a maximum tax rate of 15%. Any loss realized upon the redemption of
shares held at the time of redemption for six months or less from the date
of their purchase will be treated as a long-term capital loss to the extent
of any amounts treated as distributions of long-term capital gains during
such six-month period.

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

Redemptions of shares, including exchanges for shares of other American Funds,
may result in federal, state and local tax consequences (gain or loss) to the
shareholder. However, conversion from one class to another class in the same
fund should not be a taxable event.

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

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

The New Economy Fund -- Page 35
<PAGE>

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

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

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

The New Economy Fund -- Page 36
<PAGE>

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

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

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

BY MAIL -- for initial investments, you may mail a check, made payable to
the fund, directly to the address indicated on the account application.
Please indicate an investment dealer on the account application. You may
make additional investments by filling out the "Account Additions" form at
the bottom of a recent account statement and mailing the form, along with a
check made payable to the fund, using the envelope provided with your
account statement.
The amount of time it takes for us to receive regular U.S. postal mail may
vary and there is no assurance that we will receive such mail on the day
you expect. Mailing addresses for regular U.S. postal mail can be found in
the prospectus. To send investments or correspondence to us via overnight
mail or courier service, use any of the following addresses:

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

American Funds
3500 Wiseman Blvd.
San Antonio, TX 78251-4321

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

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

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

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

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

The New Economy Fund -- Page 37
<PAGE>

Your bank should include the following information when wiring funds:

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

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

You may contact American Funds Service Company at 800/421-0180 if you have
questions about making wire transfers.
OTHER PURCHASE INFORMATION -- The Principal Underwriter will not knowingly sell
shares of the fund directly or indirectly to any person or entity, where, after
the sale, such person or entity would own beneficially directly or indirectly
more than 4.5% of the outstanding shares of the fund without the consent of a
majority of the fund's board.

Class 529 shares may be purchased only through CollegeAmerica by investors
establishing qualified higher education savings accounts. Class 529-E shares may
be purchased only by investors participating in CollegeAmerica through an
eligible employer plan. Class R-5 shares are also available to clients of the
Personal Investment Management group of Capital Guardian Trust Company who do
not have an intermediary associated with their accounts and without regard to
the $1 million purchase minimum. In addition, the American Funds state
tax-exempt funds are qualified for sale only in certain jurisdictions, and
tax-exempt funds in general should not serve as retirement plan investments. The
fund and the Principal Underwriter reserve the right to reject any purchase
order.

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

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

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

. Employer-sponsored CollegeAmerica accounts.

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

. Retirement accounts that are funded with employer contributions; and

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

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

The New Economy Fund -- Page 38
<PAGE>

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

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

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

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

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

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

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

The New Economy Fund -- Page 39
<PAGE>

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

MOVING BETWEEN SHARE CLASSES

AUTOMATIC CONVERSIONS -- As described more fully in the prospectus, Class
B, 529-B and C shares automatically convert to Class A, 529-A and F shares,
respectively, after a certain period from the purchase date.

MOVING FROM CLASS B TO CLASS A SHARES -- Under the right of reinvestment
policy as described in the prospectus, if you redeem Class B shares during
the contingent deferred sales charge period, you may reinvest the proceeds
in Class A shares without paying a Class A sales charge if you notify
American Funds Service Company and the reinvestment occurs within 90 days
after the date of redemption. If you redeem your Class B shares after the
contingent deferred sales charge period, you may either reinvest the
proceeds in Class B shares or purchase Class A shares. If you purchase
Class A shares, you are responsible for paying any applicable Class A sales
charges.

MOVING FROM CLASS C TO CLASS A SHARES -- If you redeem Class C shares and
with the redemption proceeds purchase Class A shares, you are still
responsible for paying any Class C contingent deferred sales charges and
applicable Class A sales charges.

MOVING FROM CLASS F TO CLASS A SHARES -- You can redeem Class F shares held
in a qualified fee-based program and with the redemption proceeds purchase
Class A shares without paying an initial Class A sales charge if all of the
following are met: (a) you are leaving or have left the fee-based program,
(b) you have held the Class F shares in the program for at least one year,
and (c) you notify American Funds Service Company and purchase the Class A
shares within 90 days after redeeming the Class F shares.

MOVING FROM CLASS A TO CLASS F SHARES -- If you are part of a qualified
fee-based program and you wish to redeem your Class A shares and with the
redemption proceeds purchase Class F shares for the program, any Class A
sales charges (including contingent deferred sales charges) that you paid
or are payable will not be credited back to your account.

MOVING FROM CLASS A TO CLASS R SHARES -- Provided it is eligible to invest
in Class R shares, a retirement plan currently invested in Class A shares
may redeem its shares and purchase Class R shares with the redemption
proceeds. Any Class A sales charges that the retirement plan previously
paid will not be credited back to the plan's account.

The New Economy Fund -- Page 40
<PAGE>

SALES CHARGES

CLASS A PURCHASES

PURCHASES BY CERTAIN 403(B) PLANS

Individual 403(b) plans may be treated similarly to employer-sponsored
plans for Class A sales charge purposes (i.e., individual participant
accounts are eligible to be aggregated together) if: (a) the American Funds
are principal investment options; (b) the employer facilitates the
enrollment process by, for example, allowing for onsite group enrollment
meetings held during working hours; and (c) there is only one dealer firm
assigned to the plans.

OTHER PURCHASES

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

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

(2) currently registered representatives and assistants directly employed
by such representatives, retired registered representatives with
respect to accounts established while active, or full-time employees
(collectively, "Eligible Persons") (and their (a) spouses or
equivalents if recognized under local law, (b) parents and children,
including parents and children in step and adoptive relationships,
sons-in-law and daughters-in-law, and (c) parents-in-law, if the
Eligible Persons or the spouses, children or parents of the Eligible
Persons are listed in the account registration with the
parents-in-law) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such
dealers), plans for the dealers, and plans that include as
participants only the Eligible Persons, their spouses, parents and/or
children;

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

The New Economy Fund -- Page 41
<PAGE>

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

(5) insurance company separate accounts;

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

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

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

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

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

Shares are offered at net asset value to these persons and organizations
due to anticipated economies in sales effort and expense. Once an account
is established under this net asset value privilege, additional investments
can be made at net asset value for the life of the account.
TRANSFERS TO COLLEGEAMERICA -- A transfer from the Virginia Prepaid
Education Program/SM/ or the Virginia Education Savings Trust/SM/ to a
CollegeAmerica account will be made with no sales charge. No commission
will be paid to the dealer on such a transfer.

DEALER COMMISSIONS AND COMPENSATION -- Commissions (up to 1.00%) are paid to
dealers who initiate and are responsible for certain Class A share purchases not
subject to sales charges. These purchases consist of purchases of $1 million or
more, purchases by employer-sponsored defined contribution-type retirement plans
investing $1 million or more or with 100 or more eligible employees, and
purchases made at net asset value by certain retirement plans, endowments and
foundations with assets of $50 million or more. Commissions on such investments
(other than IRA rollover assets that roll over at no sales charge under the
fund's IRA rollover policy as described in the prospectus) are paid to dealers
at the following rates: 1.00% on amounts to $4 million, 0.50% on amounts over $4
million to $10 million and 0.25% on amounts over $10 million. Commissions are
based on cumulative investments and are not annually reset.

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

SALES CHARGE REDUCTIONS AND WAIVERS

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

The New Economy Fund -- Page 42
<PAGE>

STATEMENT OF INTENTION -- By establishing a statement of intention (the
"Statement"), you enter into a nonbinding commitment to purchase shares of
American Funds non-money market funds over a 13-month period and receive
the same sales charge (expressed as a percentage of your purchases) as if
all shares had been purchased at once.

The market value of your existing holdings eligible to be aggregated (see
below) as of the day immediately before the start of the Statement period
may be credited toward satisfying the Statement.

The Statement may be revised upward at any time during the Statement
period, and such a revision will be treated as a new Statement, except that
the Statement period during which the purchases must be made will remain
unchanged. Purchases made from the date of revision will receive the
reduced sales charge, if any, resulting from the revised Statement.

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

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

Certain payroll deduction retirement plans purchasing Class A shares under
a Statement on or before November 12, 2006, may continue to purchase Class
A shares at the sales charge determined by that particular Statement until
the plans' values reach the amounts specified in their Statements. Upon
reaching such amounts, the Statements for these plans will be deemed
completed and will terminate at that time. After such termination, these
plans are eligible for additional sales charge reductions by meeting the
criteria under the fund's rights of accumulation policy.

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

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

The New Economy Fund -- Page 43
<PAGE>

. individual-type employee benefit plans, such as an IRA, individual
403(b) plan (see exception in "Purchases by certain 403(b) plans"
under "Sales charges") or single-participant Keogh-type plan;

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

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

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

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

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

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

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

. for nonprofit, charitable or educational organizations, or any
endowments or foundations established and controlled by such
organizations, or any employer-sponsored retirement plans established
for the benefit of the employees of such organizations, their
endowments, or their foundations; or
. for individually established participant accounts of a 403(b) plan
that is treated similarly to an employer-sponsored plan for sales
charge purposes (see "Purchases by certain 403(b) plans" under "Sales
charges" above), or made for two or more such 403(b) plans that are
treated similarly to employer-sponsored plans for sales charge
purposes, in each case of a single employer or affiliated employers as
defined in the 1940 Act.

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

CONCURRENT PURCHASES -- As described in the prospectus, you may reduce your
Class A sales charge by combining purchases of all classes of shares in the
American Funds, as

The New Economy Fund -- Page 44
<PAGE>

well as individual holdings in Endowments, American Legacy variable annuity
contracts and variable life insurance policies. Shares of money market
funds purchased through an exchange, reinvestment or cross-reinvestment
from a fund having a sales charge also qualify. However, direct purchases
of American Funds money market funds are excluded.
RIGHTS OF ACCUMULATION -- Subject to the limitations described in the
aggregation policy, you may take into account your accumulated holdings in
all share classes of the American Funds, as well as your holdings in
Endowments, to determine your sales charge on investments in accounts
eligible to be aggregated. Subject to your investment dealer's or
recordkeeper's capabilities, your accumulated holdings will be calculated
as the higher of (a) the current value of your existing holdings (the
"market value") or (b) the amount you invested (including reinvested
dividends and capital gains, but excluding capital appreciation) less any
withdrawals (the "cost value"). Depending on the entity on whose books your
account is held, the value of your holdings in that account may not be
eligible for calculation at cost value. For example, accounts held in
nominee or street name are not eligible for calculation at cost value and
instead will be calculated at market value for purposes of rights of
accumulation.

The value of all of your holdings in accounts established in calendar year
2005 or earlier will be assigned an initial cost value equal to the market
value of those holdings as of the last business day of 2005. Thereafter,
the cost value of such accounts will increase or decrease according to
actual investments or withdrawals. You must contact your financial adviser
or American Funds Service Company if you have additional information that
is relevant to the calculation of the value of your holdings.
When determining your American Funds Class A sales charge, if your
investment is not in an employer-sponsored retirement plan, you may also
take into account the market value (as of the end of the week prior to your
American Funds investment) of your individual holdings in various American
Legacy variable annuity contracts and variable life insurance policies. An
employer-sponsored retirement plan may also take into account the market
value of its investments in American Legacy Retirement Investment Plans.
Direct purchases of American Funds money market funds are excluded. If you
make a gift of American Funds Class A shares, upon your request, you may
purchase the shares at the sales charge discount allowed under rights of
accumulation of all of your American Funds and American Legacy accounts.

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

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

. Required minimum distributions taken from retirement accounts upon the
shareholder's attainment of age 70-1/2 (required minimum distributions
that

The New Economy Fund -- Page 45
<PAGE>

continue to be taken by the beneficiary(ies) after the account owner
is deceased also qualify for a waiver).

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

For purposes of this paragraph, "account" means:

. in the case of Class A shares, your investment in Class A shares of
all American Funds (investments representing direct purchases of
American Funds money market funds are excluded);

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

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

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

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

The New Economy Fund -- Page 46
<PAGE>

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

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

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

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

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

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

AUTOMATIC INVESTMENT PLAN -- An automatic investment plan enables you to make
monthly or quarterly investments in the American Funds through automatic debits
from your bank account. To set up a plan, you must fill out an account
application and specify the amount that you would like to invest ($50 minimum
per fund; $25 minimum per fund in the case of employer-sponsored 529 accounts)
and the date on which you would like your investments to occur. The plan will
begin within 30 days after your account application is received. Your bank
account will be debited on the day or a few days before your investment is made,
depending on the bank's capabilities. The Transfer Agent will then invest your
money into the fund you specified on or around the date you specified. If the
date you specified falls on a weekend or holiday, your money will be invested on
the following business day. However, if the following business day falls in the
next month, your money will be invested on the business day immediately
preceding the weekend or holiday. If your bank account cannot be debited due to
insufficient funds, a stop-payment or the closing of the account, the plan may
be terminated and the related investment reversed. You may change the amount of
the investment or discontinue the plan at any time by contacting the Transfer
Agent.

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

The New Economy Fund -- Page 47
<PAGE>

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

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

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

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

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

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

AUTOMATIC WITHDRAWALS -- For all share classes, except the R and 529 classes of
shares, you may automatically withdraw shares from any of the American Funds.
You can make automatic withdrawals of $50 or more. You can designate the day of
each period for withdrawals and request that checks be sent to you or someone
else. Withdrawals may also be electronically deposited to your bank account. The
Transfer Agent will withdraw your money from the fund you specify on or around
the date you specify. If the date you specified falls on a weekend or holiday,
the redemption will take place on the previous business day. However, if the
previous business day falls in the preceding month, the redemption will take
place on the following business day after the weekend or holiday.

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

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

The New Economy Fund -- Page 48
<PAGE>

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

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

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

CHECKWRITING -- You may establish check writing privileges for Class A shares
(but not Class 529-A shares) of American Funds money market funds. This can be
done by using an account application. If you request check writing privileges,
you will be provided with checks that you may use to draw against your account.
These checks may be made payable to anyone you designate and must be signed by
the authorized number of registered shareholders exactly as indicated on your
account application.

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

While payment of redemptions normally will be in cash, the fund's Declaration of
Trust permits payment of the redemption price wholly or partly in securities or
other property included in the assets belonging to the fund when in the opinion
of the fund's board of trustees, which shall be conclusive, conditions exist
which make payment wholly in cash unwise or undesirable.

The New Economy Fund -- Page 49
<PAGE>

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

GENERAL INFORMATION

CUSTODIAN OF ASSETS -- Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by State Street Bank and Trust Company, One Lincoln Street, Boston, MA
02111, as Custodian. If the fund holds non-U.S. securities, the Custodian may
hold these securities pursuant to subcustodial arrangements in non-U.S. banks or
non-U.S. branches of U.S. banks.

TRANSFER AGENT -- American Funds Service Company, a wholly owned subsidiary of
the investment adviser, maintains the records of shareholder accounts, processes
purchases and redemptions of the fund's shares, acts as dividend and capital
gain distribution disbursing agent, and performs other related shareholder
service functions. The principal office of American Funds Service Company is
located at 135 South State College Boulevard, Brea, CA 92821-5823. American
Funds Service Company was paid a fee of $8,612,000 for Class A shares and
$258,000 for Class B shares for the 2006 fiscal year. American Funds Service
Company is also compensated for certain transfer agency services provided to all
other share classes from the administrative services fees paid to Capital
Research and Management Company, as described under "Administrative services
agreement."

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -- Deloitte & Touche LLP, 695 Town
Center Drive, Costa Mesa, California 92626, serves as the fund's independent
registered public accounting firm, providing audit services, preparation of tax
returns and review of certain documents to be filed with the Securities and
Exchange Commission. The financial statements included in this statement of
additional information from the annual report have been so included in reliance
on the report of Deloitte & Touche LLP, independent registered public accounting
firm, given on the authority of said firm as experts in accounting and auditing.
The selection of the fund's independent registered public accounting firm is
reviewed and determined annually by the board of trustees.

INDEPENDENT LEGAL COUNSEL -- Paul, Hastings, Janofsky & Walker LLP, 515 S.
Flower Street, Los Angeles, CA 90071, serves as counsel for the fund and for
independent trustees in their capacities as such. Certain legal matters in
connection with certain shares of beneficial interest offered by the prospectus
have been passed upon for the fund by Paul, Hastings, Janofsky & Walker LLP.
Counsel does not provide legal services to the fund's investment adviser or any
of its affiliated companies or control persons. A determination with respect to
the independence of the fund's "independent legal counsel" will be made at least
annually by the independent trustees of the fund, as prescribed by the 1940 Act
and related rules.

The New Economy Fund -- Page 50
<PAGE>

PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- The fund's fiscal
year ends on November 30. Shareholders are provided updated prospectuses
annually and at least semiannually with reports showing the fund's investment
portfolio or summary investment portfolio, financial statements and other
information. The fund's annual financial statements are audited by the fund's
independent registered public accounting firm, Deloitte & Touche LLP. In
addition, shareholders may also receive proxy statements for the fund. In an
effort to reduce the volume of mail shareholders receive from the fund when a
household owns more than one account, the Transfer Agent has taken steps to
eliminate duplicate mailings of prospectuses, shareholder reports and proxy
statements. To receive additional copies of a prospectus, report or proxy
statement, shareholders should contact the Transfer Agent.

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

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

On March 24, 2005, the investment adviser and Principal Underwriter filed a
complaint against the Attorney General of the State of California in Los Angeles
County Superior Court. The complaint alleged that the Attorney General
threatened to take enforcement actions against the investment adviser and
Principal Underwriter that are without merit and preempted by federal law. On
the same day, following the filing of the investment adviser's and Principal
Underwriter's complaint, the Attorney General of the State of California filed a
complaint against the Principal Underwriter and investment adviser. Filed in Los
Angeles County Superior Court, the Attorney General's complaint alleged
violations of certain sections of the California Corporations Code with respect
to so-called "revenue sharing" disclosures in mutual fund prospectuses and
statements of additional information. On November 22, 2005, the Los Angeles
Superior Court dismissed the Attorney General's complaint. The Attorney General
subsequently appealed the Superior Court's decision to California's Court of
Appeal for the Second Appellate District. On January 26, 2007, the Court of
Appeal issued a ruling allowing the California Attorney General to proceed with
his civil action.

The investment adviser and Principal Underwriter believe that the likelihood
that these matters could have a material adverse effect on the fund or on the
ability of the investment adviser or Principal Underwriter to perform their
contracts with the fund is remote. The SEC is conducting a related investigation
as of the date of this statement of additional information. The investment
adviser and Principal Underwriter are cooperating fully. In addition, two class
action lawsuits have been filed in the U.S. District Court, Central District of
California, relating to these matters. The investment adviser believes that
these suits are without merit and will defend itself

The New Economy Fund -- Page 51
<PAGE>

vigorously. Further updates on these issues will be available on the American
Funds website (americanfunds.com) under "American Funds regulatory matters."

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

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- NOVEMBER 30, 2006

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $26.41
Maximum offering price per share
(100/94.25 of net asset value per share,
which takes into account the fund's current maximum
sales charge). . . . . . . . . . . . . . . . $28.02

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

FUND NUMBERS
------------------------------------
FUND CLASS A CLASS B CLASS C CLASS F
-----------------------------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . . . . . . . . . . 002 202 302 402
American Balanced Fund/(R)/ . . . . . . . . . . . . . . . . . 011 211 311 411
American Mutual Fund/(R)/ . . . . . . . . . . . . . . . . . . 003 203 303 403
Capital Income Builder/(R)/ . . . . . . . . . . . . . . . . . 012 212 312 412
Capital World Growth and Income Fund/SM/ . . . . . . . . . . . 033 233 333 433
EuroPacific Growth Fund/(R)/ . . . . . . . . . . . . . . . . . 016 216 316 416
Fundamental Investors/SM/ . . . . . . . . . . . . . . . . . . 010 210 310 410
The Growth Fund of America/(R)/ . . . . . . . . . . . . . . . 005 205 305 405
The Income Fund of America/(R)/ . . . . . . . . . . . . . . . 006 206 306 406
The Investment Company of America/(R)/ . . . . . . . . . . . . 004 204 304 404
The New Economy Fund/(R)/ . . . . . . . . . . . . . . . . . . 014 214 314 414
New Perspective Fund/(R)/ . . . . . . . . . . . . . . . . . . 007 207 307 407
New World Fund/SM/ . . . . . . . . . . . . . . . . . . . . . . 036 236 336 436
SMALLCAP World Fund/(R)/ . . . . . . . . . . . . . . . . . . . 035 235 335 435
Washington Mutual Investors Fund/SM/ . . . . . . . . . . . . . 001 201 301 401
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/ . . . . . . . . 040 240 340 440
American High-Income Trust/SM/ . . . . . . . . . . . . . . . . 021 221 321 421
The Bond Fund of America/SM/ . . . . . . . . . . . . . . . . . 008 208 308 408
Capital World Bond Fund/(R)/ . . . . . . . . . . . . . . . . . 031 231 331 431
Intermediate Bond Fund of America/SM/ . . . . . . . . . . . . 023 223 323 423
Limited Term Tax-Exempt Bond Fund of America/SM/ . . . . . . . 043 243 343 443
Short-Term Bond Fund of America/SM/ . . . . . . . . . . . . . 048 248 348 448
The Tax-Exempt Bond Fund of America/(R)/ . . . . . . . . . . . 019 219 319 419
The Tax-Exempt Fund of California/(R)/* . . . . . . . . . . . 020 220 320 420
The Tax-Exempt Fund of Maryland/(R)/* . . . . . . . . . . . . 024 224 324 424
The Tax-Exempt Fund of Virginia/(R)/* . . . . . . . . . . . . 025 225 325 425
U.S. Government Securities Fund/SM/ . . . . . . . . . . . . . 022 222 322 422
MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . . . . . . . . . . 009 209 309 409
The Tax-Exempt Money Fund of America/SM/ . . . . . . . . . . . 039 N/A N/A N/A
The U.S. Treasury Money Fund of America/SM/ . . . . . . . . . 049 N/A N/A N/A
___________
*Qualified for sale only in certain jurisdictions.

The New Economy Fund -- Page 52
<PAGE>

FUND NUMBERS
---------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND 529-A 529-B 529-C 529-E 529-F
-------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . 1002 1202 1302 1502 1402
American Balanced Fund . . . . 1011 1211 1311 1511 1411
American Mutual Fund . . . . . 1003 1203 1303 1503 1403
Capital Income Builder . . . . 1012 1212 1312 1512 1412
Capital World Growth and Income
Fund . . . . . . . . . . . . . 1033 1233 1333 1533 1433
EuroPacific Growth Fund . . . . 1016 1216 1316 1516 1416
Fundamental Investors . . . . . 1010 1210 1310 1510 1410
The Growth Fund of America . . 1005 1205 1305 1505 1405
The Income Fund of America . . 1006 1206 1306 1506 1406
The Investment Company of
America . . . . . . . . . . . . 1004 1204 1304 1504 1404
The New Economy Fund . . . . . 1014 1214 1314 1514 1414
New Perspective Fund . . . . . 1007 1207 1307 1507 1407
New World Fund . . . . . . . . 1036 1236 1336 1536 1436
SMALLCAP World Fund . . . . . . 1035 1235 1335 1535 1435
Washington Mutual Investors Fund
. . . . . . . . . . . . . . . 1001 1201 1301 1501 1401
BOND FUNDS
American High-Income Trust . . 1021 1221 1321 1521 1421
The Bond Fund of America . . . 1008 1208 1308 1508 1408
Capital World Bond Fund . . . . 1031 1231 1331 1531 1431
Intermediate Bond Fund of
America . . . . . . . . . . . . 1023 1223 1323 1523 1423
Short-Term Bond Fund of America 1048 1248 1348 1548 1448
U.S. Government Securities Fund 1022 1222 1322 1522 1422
MONEY MARKET FUND
The Cash Management Trust of
America . . . . . . . . . . . . 1009 1209 1309 1509 1409

The New Economy Fund -- Page 53
<PAGE>

FUND NUMBERS
----------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND R-1 R-2 R-3 R-4 R-5
-------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . . . . 2102 2202 2302 2402 2502
American Balanced Fund . . . . . . . 2111 2211 2311 2411 2511
American Mutual Fund . . . . . . . . 2103 2203 2303 2403 2503
Capital Income Builder . . . . . . . 2112 2212 2312 2412 2512
Capital World Growth and Income Fund 2133 2233 2333 2433 2533
EuroPacific Growth Fund . . . . . . 2116 2216 2316 2416 2516
Fundamental Investors . . . . . . . 2110 2210 2310 2410 2510
The Growth Fund of America . . . . . 2105 2205 2305 2405 2505
The Income Fund of America . . . . . 2106 2206 2306 2406 2506
The Investment Company of America . 2104 2204 2304 2404 2504
The New Economy Fund . . . . . . . . 2114 2214 2314 2414 2514
New Perspective Fund . . . . . . . . 2107 2207 2307 2407 2507
New World Fund . . . . . . . . . . . 2136 2236 2336 2436 2536
SMALLCAP World Fund . . . . . . . . 2135 2235 2335 2435 2535
Washington Mutual Investors Fund . . 2101 2201 2301 2401 2501
BOND FUNDS
American High-Income Municipal Bond
Fund . . . . . . . . . . . . . . . . N/A N/A N/A N/A 2540
American High-Income Trust . . . . . 2121 2221 2321 2421 2521
The Bond Fund of America . . . . . . 2108 2208 2308 2408 2508
Capital World Bond Fund . . . . . . 2131 2231 2331 2431 2531
Intermediate Bond Fund of America . 2123 2223 2323 2423 2523
Limited Term Tax-Exempt Bond Fund of
America. . . . . . . . . . . . . . . N/A N/A N/A N/A 2543
Short-Term Bond Fund of America. . . 2148 2248 2348 2448 2548
The Tax-Exempt Bond Fund of America N/A N/A N/A N/A 2519
The Tax-Exempt Fund of California* . N/A N/A N/A N/A 2520
The Tax-Exempt Fund of Maryland* . . N/A N/A N/A N/A 2524
The Tax-Exempt Fund of Virginia* . . N/A N/A N/A N/A 2525
U.S. Government Securities Fund . . 2122 2222 2322 2422 2522
MONEY MARKET FUNDS
The Cash Management Trust of America 2109 2209 2309 2409 2509
The Tax-Exempt Money Fund of America N/A N/A N/A N/A 2539
The U.S. Treasury Money Fund of
America . . . . . . . . . . . . . . 2149 2249 2349 2449 2549
___________
*Qualified for sale only in certain
jurisdictions.

The New Economy Fund -- Page 54
<PAGE>

FUND NUMBERS
-------------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND CLASS A R-1 R-2 R-3 R-4 R-5
-------------------------------------------------------------------------------

AMERICAN FUNDS TARGET DATE RETIREMENT SERIES
American Funds 2050 Target
Date Retirement Fund . . . 069 2169 2269 2369 2469 2569
American Funds 2045 Target
Date Retirement Fund . . . 068 2168 2268 2368 2468 2568
American Funds 2040 Target
Date Retirement Fund . . . 067 2167 2267 2367 2467 2567
American Funds 2035 Target
Date Retirement Fund . . . 066 2166 2266 2366 2466 2566
American Funds 2030 Target
Date Retirement Fund . . . 065 2165 2265 2365 2465 2565
American Funds 2025 Target
Date Retirement Fund . . . 064 2164 2264 2364 2464 2564
American Funds 2020 Target
Date Retirement Fund . . . 063 2163 2263 2363 2463 2563
American Funds 2015 Target
Date Retirement Fund . . . 062 2162 2262 2362 2462 2562
American Funds 2010 Target
Date Retirement Fund . . . 061 2161 2261 2361 2461 2561

The New Economy Fund -- Page 55
<PAGE>

APPENDIX

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

DESCRIPTION OF BOND RATINGS

MOODY'S
LONG-TERM RATING DEFINITIONS

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

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

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

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

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

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

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

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

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

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

The New Economy Fund -- Page 56
<PAGE>

STANDARD & POOR'S
LONG-TERM ISSUE CREDIT RATINGS

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

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

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

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

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

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

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

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

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

The New Economy Fund -- Page 57
<PAGE>

C
The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

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

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

The New Economy Fund -- Page 58

[logo - American Funds®]

The New Economy Fund^®

Investment portfolio

November 30, 2006

Common stocks — 94.64%	Shares			Market value (000)

BANKS — 13.87%
Freddie Mac		1,830,000		$	122,903
UniCredito Italiano SpA (Italy)		7,140,000			61,626
UniCredito Italiano SpA (Germany)		6,750,000			58,189
Société Générale		709,275			118,812
Erste Bank der oesterreichischen Sparkassen AG		1,583,500			115,349
ICICI Bank Ltd.		4,660,000			91,178
ICICI Bank Ltd. (ADR)		400,000			15,564
HDFC Bank Ltd.		3,746,000			94,242
Wells Fargo & Co.		2,200,000			77,528
Pusan Bank		5,160,000			63,875
Mitsui Trust Holdings, Inc.		4,050,000			42,944
SinoPac Financial Holdings Co. Ltd.		61,440,000			32,951
Grupo Financiero Banorte, SA de CV, Series O		8,800,000			32,911
Raiffeisen International Bank Holding AG		254,500			29,926
Kookmin Bank		369,200			28,773
BNP Paribas		262,550			28,283
Banco Santander Central Hispano, SA		1,369,523			24,863
Shinhan Financial Group Co., Ltd.		502,000			24,452
Banco Bradesco SA, preferred nominative		515,000			19,381
Banco Bradesco SA, preferred nominative^1,2		11,467			432
Daegu Bank, Ltd.		1,192,800			19,773
City National Corp.		275,000			18,650
HSBC Holdings PLC		930,624			17,162
Sberbank (Savings Bank of the Russian Federation) (GDR)		50,000			14,200
Unibanco-União de Bancos Brasileiros SA, units (GDR)		167,000			14,140
South Financial Group, Inc.		425,000			11,046
Mitsubishi UFJ Financial Group, Inc.		682			8,716
Bayerische Hypo- und Vereinsbank AG		175,000			7,427
Siam City Bank PCL		10,300,000			5,942
Hypo Real Estate Holding AG		48,265			2,808
					1,204,046


SOFTWARE & SERVICES — 12.70%
Google Inc., Class A¹		594,000			288,043
Microsoft Corp.		5,080,000			148,996
eBay Inc.¹		3,510,000			113,549
Symantec Corp.¹		5,000,000			106,000
Oracle Corp.¹		4,870,000			92,676
Affiliated Computer Services, Inc., Class A¹		1,673,000			84,570
Yahoo! Inc.¹		1,666,000			44,965
Paychex, Inc.		1,125,000			44,336
CNET Networks, Inc.¹		4,080,000			36,965
NAVTEQ Corp.¹		964,000			34,482
Intuit Inc.¹		1,000,000			31,480
First Data Corp.		1,035,000			26,134
Automatic Data Processing, Inc.		465,000			22,427
Iron Mountain Inc.¹		400,000			17,240
Novell, Inc.¹		1,760,000			11,053
					1,102,916


RETAILING — 8.55%
Target Corp.		3,150,000			182,984
Lowe’s Companies, Inc.		3,550,000			107,068
Stockmann Oyj, Class B		1,600,000			77,545
Liberty Media Holding Corp., Liberty Interactive, Series A¹		2,065,000			46,999
Limited Brands, Inc.		1,373,800			43,536
Best Buy Co., Inc.		750,000			41,227
Li & Fung Ltd.		12,000,000			34,866
Amazon.com, Inc.¹		850,000			34,289
IAC/InterActiveCorp¹		925,000			33,753
Expedia, Inc.¹		1,665,000			30,253
Lotte Shopping Co.		70,000			28,671
Industria de Diseno Textil, SA		500,000			25,339
DSG International PLC		3,556,600			13,635
Kingfisher PLC		2,500,000			11,943
Williams-Sonoma, Inc.		369,800			11,730
KOMERI Co., Ltd.		217,600			6,877
Takashimaya Co., Ltd.		352,000			5,058
Yamada Denki Co., Ltd.		40,000			3,789
GOME Electrical Appliances Holding Ltd.		4,100,000			3,152
					742,714


SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 6.52%
Intel Corp.		5,400,000			115,290
Hynix Semiconductor Inc.¹		2,691,820			102,283
Maxim Integrated Products, Inc.		2,100,000			66,108
Texas Instruments Inc.		2,050,000			60,578
Novellus Systems, Inc.¹		1,400,000			43,708
Altera Corp.¹		1,750,000			34,808
Siliconware Precision Industries Co., Ltd.		16,859,140			27,360
Applied Materials, Inc.		1,400,000			25,172
Samsung Electronics Co., Ltd.		33,500			23,006
Linear Technology Corp.		600,000			19,284
Taiwan Semiconductor Manufacturing Co. Ltd.		8,428,163			17,065
Microchip Technology Inc.		500,000			17,055
Advanced Micro Devices, Inc.¹		501,600			10,820
Sunplus Technology Co., Ltd.		3,421,376			3,511
					566,048


HEALTH CARE EQUIPMENT & SERVICES — 6.51%
Medtronic, Inc.		1,555,000			81,062
Zimmer Holdings, Inc.¹		900,000			65,664
C. R. Bard, Inc.		750,000			61,718
Smith & Nephew PLC		6,196,500			58,688
Apria Healthcare Group Inc.^1,3		2,200,000			54,934
St. Jude Medical, Inc.¹		1,200,000			44,724
Kyphon Inc.¹		1,230,000			41,537
Aetna Inc.		1,000,000			41,310
CIGNA Corp.		250,000			31,513
Express Scripts, Inc.¹		350,000			23,870
Advanced Medical Optics, Inc.¹		660,000			23,107
FoxHollow Technologies, Inc.¹		750,000			19,867
Cardinal Health, Inc.		260,000			16,801
					564,795


TELECOMMUNICATION SERVICES — 6.33%
Telephone and Data Systems, Inc.		931,100			48,101
Telephone and Data Systems, Inc., Special Common Shares		931,100			44,832
Sprint Nextel Corp., Series 1		4,730,000			92,282
Bharti Airtel Ltd.¹		5,000,000			70,722
DiGi.Com Bhd.		13,974,400			52,172
Qwest Communications International Inc.¹		6,700,000			51,523
Koninklijke KPN NV		3,228,300			44,245
Philippine Long Distance Telephone Co.		465,040			23,078
Philippine Long Distance Telephone Co. (ADR)		299,500			14,709
Millicom International Cellular SA¹		630,000			36,074
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk, Class B		28,559,000			30,853
OJSC Mobile TeleSystems (ADR)		427,300			20,553
LG Telecom Ltd.¹		1,260,253			14,583
América Móvil SA de CV, Series L (ADR)		139,500			6,204
					549,931


MEDIA — 6.23%
Time Warner Inc.		5,000,000			100,700
News Corp., Class A		3,502,815			72,158
XM Satellite Radio Holdings Inc., Class A¹		3,100,000			44,764
Walt Disney Co.		1,300,000			42,965
Vivendi SA		1,100,000			42,315
Comcast Corp., Class A¹		1,000,000			40,460
British Sky Broadcasting Group PLC		3,335,000			34,652
Liberty Media Holding Corp., Liberty Capital, Series A¹		351,600			30,913
Arbitron Inc.		670,520			29,577
E.W. Scripps Co., Class A		600,000			29,316
Discovery Holding Co., Class A¹		1,328,000			20,371
Grupo Televisa, SA, ordinary participation certificates (ADR)		690,000			18,133
Schibsted ASA		525,000			17,905
Mediaset SpA		566,000			6,708
Next Media Ltd.		13,136,000			5,286
SET India Ltd.^1,2,4		79,866			4,687
					540,910


PHARMACEUTICALS, BIOTECHNOLOGY & LIFE SCIENCES — 6.04%
Bayer AG		2,124,000			109,495
Roche Holding AG		525,000			94,853
Amgen Inc.¹		1,010,000			71,710
SCHWARZ PHARMA AG		574,654			69,460
Novo Nordisk A/S, Class B		520,000			40,156
Forest Laboratories, Inc.¹		750,000			36,525
Millennium Pharmaceuticals, Inc.¹		3,200,000			36,000
Bristol-Myers Squibb Co.		1,400,000			34,762
Merck KGaA		284,000			31,157
					524,118


TECHNOLOGY HARDWARE & EQUIPMENT — 5.15%
Cisco Systems, Inc.¹		5,929,200			159,377
Nokia Corp.		1,900,000			38,218
Advantech Co., Ltd.		11,422,860			35,275
Nidec Corp.		450,000			35,165
Seagate Technology		1,200,000			30,912
International Business Machines Corp.		315,000			28,955
High Tech Computer Corp.		1,200,000			27,746
EMC Corp.¹		1,750,000			22,943
Acer Inc.		8,499,660			18,339
Corning Inc.¹		750,000			16,170
Wintek Corp.		12,035,965			12,092
Flextronics International Ltd.¹		1,031,534			11,605
LG.Philips LCD Co., Ltd.¹		323,000			10,083
					446,880


TRANSPORTATION — 2.71%
Nippon Express Co., Ltd.		9,760,000			52,672
Cintra, Concesiones de Infraestructuras de Transporte, SA		2,500,000			41,812
Cintra, Concesiones de Infraestructuras de Transporte, SA^1,2		125,000			2,091
Ryanair Holdings PLC (ADR)¹		488,200			37,391
United Parcel Service, Inc., Class B		375,000			29,220
JetBlue Airways Corp.¹		2,100,000			28,686
Singapore Post Private Ltd.		41,974,000			28,355
Qantas Airways Ltd.		3,777,247			14,749
					234,976


DIVERSIFIED FINANCIALS — 2.63%
Capital One Financial Corp.		750,000			58,410
Citigroup Inc.		1,000,000			49,590
Deutsche Börse AG		235,000			39,334
Bank of New York Co., Inc.		775,000			27,544
J.P. Morgan Chase & Co.		550,000			25,454
ING Groep NV		531,910			22,673
UBS AG		82,000			4,930
					227,935


ENERGY — 2.25%
Schlumberger Ltd.		2,200,000			150,656
FMC Technologies, Inc.¹		741,900			44,521
					195,177


CONSUMER SERVICES — 2.23%
Carnival Corp., units		1,100,000			53,889
Shangri-La Asia Ltd.		19,000,000			48,853
William Hill PLC		3,891,740			47,896
OSI Restaurant Partners, Inc.		900,000			35,190
Greek Organization of Football Prognostics SA		198,710			7,473
					193,301


UTILITIES — 1.95%
Veolia Environnement		1,083,200			71,704
Electric Power Development Co., Ltd.		647,400			27,001
Electricity Generating PCL, nonvoting depositary receipt		7,780,902			19,626
Electricity Generating PCL		1,230,098			3,103
Hong Kong and China Gas Co. Ltd.		10,042,000			22,205
E.ON AG		113,000			14,508
Reliance Energy Ltd.		510,002			6,045
NTPC Ltd.		1,619,000			5,336
					169,528


FOOD & STAPLES RETAILING — 1.91%
Wal-Mart de México, SA de CV, Series V		12,400,000		$	46,476
Walgreen Co.		1,000,000			40,490
Costco Wholesale Corp.		560,000			29,266
Koninklijke Ahold NV¹		2,200,000			22,024
Seven & I Holdings Co., Ltd.		534,800			17,040
Tesco PLC		1,350,000			10,384
					165,680


COMMERCIAL SERVICES & SUPPLIES — 1.90%
Monster Worldwide, Inc.¹		1,250,000			54,562
Rentokil Initial PLC		12,000,000			35,388
Buhrmann NV		2,000,000			28,126
Robert Half International Inc.		700,000			27,013
United Stationers Inc.¹		431,300			20,004
					165,093


INSURANCE — 1.38%
American International Group, Inc.		813,985			57,239
Admiral Group PLC		2,512,922			44,612
XL Capital Ltd., Class A		250,000			17,780
					119,631


CONSUMER DURABLES & APPAREL — 0.53%
Cyrela Brazil Realty SA, ordinary nominative		1,350,000			26,026
SEGA SAMMY HOLDINGS INC.		786,000			19,784
					45,810


MATERIALS — 0.40%
Nitto Denko Corp.		718,000			34,657


CAPITAL GOODS — 0.05%
Hi-P International Ltd.		7,770,000			4,568


REAL ESTATE — 0.04%
AEON Mall Co., Ltd.		74,000			3,898


MISCELLANEOUS — 4.76%
Other common stocks in initial period of acquisition					413,592


Total common stocks (cost: $6,258,861,000)					8,216,204



Convertible securities — 0.49%		Shares or principal amount

TECHNOLOGY HARDWARE & EQUIPMENT — 0.40%
Lucent Technologies Inc. 8.00% convertible notes 2031	$	35,000,000			35,219


SOFTWARE & SERVICES — 0.00%
ProAct Technologies Corp., Series C, convertible preferred^1,2,4		3,500,000			7



MISCELLANEOUS — 0.09%
Other convertible securities in initial period of acquisition				$	7,664


Total convertible securities (cost: $42,314,000)					42,890



Short-term securities — 5.34%		Principal amount (000	)

Procter & Gamble Co. 5.21%-5.24% due 12/1-12/18/2006⁴	$	100,000			99,873
Wal-Mart Stores Inc. 5.21% due 12/11-12/19/2006⁴		60,000			59,877
Freddie Mac 5.155%-5.17% due 12/19/2006-1/25/2007		57,140			56,812
CAFCO, LLC 5.25% due 1/9-1/29/2007⁴		40,100			39,821
J.P. Morgan Chase & Co. 5.23% due 12/29/2006		16,300			16,231
Jupiter Securitization Co., LLC 5.25% due 1/24/2007⁴		11,100			11,011
General Electric Co. 5.24% due 12/28/2006		25,000			24,903
General Electric Capital Corp. 5.30% due 12/1/2006		2,000			2,000
AIG Funding, Inc. 5.22% due 1/12/2007		25,000			24,844
Concentrate Manufacturing Co. of Ireland 5.18% due 12/14/2006⁴		24,300			24,251
Clipper Receivables Co., LLC 5.25% due 12/7/2006⁴		20,200			20,179
NetJets Inc. 5.20% due 1/10/2007⁴		19,000			18,887
Emerson Electric Co. 5.20% due 12/11/2006⁴		15,200			15,176
Abbott Laboratories 5.20% due 1/2/2007⁴		14,300			14,232
Fannie Mae 5.155% due 12/6/2006		10,600			10,591
Harley-Davidson Funding Corp. 5.21% due 1/31/2007⁴		10,000			9,911
Federal Home Loan Bank 5.15% due 12/15/2006		8,800			8,781
HSBC Finance Corp. 5.21% due 2/12/2007		5,400			5,342
International Bank for Reconstruction and Development 5.15% due 1/29/2007		700			694

Total short-term securities (cost: $463,408,000)					463,416


Total investment securities (cost: $6,764,583,000)					8,722,510
Other assets less liabilities					(41,027	)

Net assets				$	8,681,483

“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.

¹ Security did not produce income during the last 12 months.

² Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities, including those in “Miscellaneous,” was $14,132,000.

³ Represents an affiliated company as defined under the Investment Company Act of 1940.

⁴ Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $317,912,000, which represented 3.66% of the net assets of the fund.

ADR = American Depositary Receipts

GDR = Global Depositary Receipts

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

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s prospectus, which can be obtained from a financial adviser and should be read carefully before investing.

MFGEFP-914-0107-S6871

Summary investment portfolio, November 30, 2006

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

[begin pie chart]

Industry group diversification	Percent of net assets

Banks	13.87	%
Software & services	12.70
Retailing	8.55
Semiconductors & semiconductor equipment	6.52
Health care equipment & services	6.51
Other industries	46.98
Short-term securities & other assets less liabilities	4.87

[end chart]

		Shares			Market		Percent
					value		of net
Common stocks - 94.64%					(000	)	assets

Banks - 13.87%
Freddie Mac		1,830,000		$	122,903		1.42	%
UniCredito Italiano SpA (Italy)		7,140,000			61,626
UniCredito Italiano SpA (Germany)		6,750,000			58,189		1.38
Société Générale		709,275			118,812		1.37
Erste Bank der oesterreichischen Sparkassen AG		1,583,500			115,349		1.33
ICICI Bank Ltd.		4,660,000			91,178
ICICI Bank Ltd. (ADR)		400,000			15,564		1.23
HDFC Bank Ltd.		3,746,000			94,242		1.08
Wells Fargo & Co.		2,200,000			77,528		.89
Pusan Bank		5,160,000			63,875		.74
Other securities					384,780		4.43
					1,204,046		13.87

Software & services - 12.70%
Google Inc., Class A (1)		594,000			288,043		3.32
Microsoft Corp.		5,080,000			148,996		1.71
eBay Inc. (1)		3,510,000			113,549		1.31
Symantec Corp. (1)		5,000,000			106,000		1.22
Oracle Corp. (1)		4,870,000			92,676		1.07
Affiliated Computer Services, Inc., Class A (1)		1,673,000			84,570		.97
Other securities					269,082		3.10
					1,102,916		12.70

Retailing - 8.55%
Target Corp.		3,150,000			182,984		2.11
Lowe's Companies, Inc.		3,550,000			107,068		1.23
Stockmann Oyj, Class B		1,600,000			77,545		.89
Other securities					375,117		4.32
					742,714		8.55

Semiconductors & semiconductor equipment - 6.52%
Intel Corp.		5,400,000			115,290		1.33
Hynix Semiconductor Inc. (1)		2,691,820			102,283		1.18
Maxim Integrated Products, Inc.		2,100,000			66,108		.76
Texas Instruments Inc.		2,050,000			60,578		.70
Other securities					221,789		2.55
					566,048		6.52

Health care equipment & services - 6.51%
Medtronic, Inc.		1,555,000			81,062		.93
Zimmer Holdings, Inc. (1)		900,000			65,664		.76
C. R. Bard, Inc.		750,000			61,718		.71
Smith & Nephew PLC		6,196,500			58,688		.68
Apria Healthcare Group Inc. (1)		2,200,000			54,934		.63
Other securities					242,729		2.80
					564,795		6.51

Telecommunication services - 6.33%
Telephone and Data Systems, Inc.		931,100			48,101
Telephone and Data Systems, Inc., Special Common Shares		931,100			44,832		1.07
Sprint Nextel Corp., Series 1		4,730,000			92,282		1.06
Bharti Airtel Ltd. (1)		5,000,000			70,722		.82
DiGi.Com Bhd.		13,974,400			52,172		.60
Qwest Communications International Inc. (1)		6,700,000			51,523		.59
Other securities					190,299		2.19
					549,931		6.33

Media - 6.23%
Time Warner Inc.		5,000,000			100,700		1.16
News Corp., Class A		3,502,815			72,158		.83
Other securities					368,052		4.24
					540,910		6.23

Pharmaceuticals, biotechnology & life sciences - 6.04%
Bayer AG		2,124,000			109,495		1.26
Roche Holding AG		525,000			94,853		1.09
Amgen Inc. (1)		1,010,000			71,710		.83
SCHWARZ PHARMA AG		574,654			69,460		.80
Other securities					178,600		2.06
					524,118		6.04

Technology hardware & equipment - 5.15%
Cisco Systems, Inc. (1)		5,929,200			159,377		1.84
Other securities					287,503		3.31
					446,880		5.15

Transportation - 2.71%
Nippon Express Co., Ltd.		9,760,000			52,672		.61
Other securities					182,304		2.10
					234,976		2.71

Diversified financials - 2.63%
Capital One Financial Corp.		750,000			58,410		.68
Citigroup Inc.		1,000,000			49,590		.57
Other securities					119,935		1.38
					227,935		2.63

Energy - 2.25%
Schlumberger Ltd.		2,200,000			150,656		1.74
Other securities					44,521		.51
					195,177		2.25

Consumer services - 2.23%
Carnival Corp., units		1,100,000			53,889		.62
Shangri-La Asia Ltd.		19,000,000			48,853		.57
William Hill PLC		3,891,740			47,896		.55
Other securities					42,663		.49
					193,301		2.23

Utilities - 1.95%
Veolia Environnement		1,083,200			71,704		.82
Other securities					97,824		1.13
					169,528		1.95

Food & staples retailing - 1.91%
Other securities					165,680		1.91


Commercial services & supplies - 1.90%
Monster Worldwide, Inc. (1)		1,250,000			54,562		.63
Other securities					110,531		1.27
					165,093		1.90

Insurance - 1.38%
American International Group, Inc.		813,985			57,239		.66
Other securities					62,392		.72
					119,631		1.38


Other - 1.02%
Other securities					88,933		1.02


Miscellaneous - 4.76%
Other common stocks in initial period of acquisition					413,592		4.76


Total common stocks (cost: $6,258,861,000)					8,216,204		94.64




Convertible securities - 0.49%

Other - 0.40%
Other securities					35,226		.40


Miscellaneous - 0.09%
Other convertible securities in initial period of acquisition					7,664		.09


Total convertible securities (cost: $42,314,000)					42,890		.49




Short-term securities - 5.34%		Principal amount (000	)


Procter & Gamble Co. 5.21%-5.24% due 12/1-12/18/2006 (2)	$	100,000			99,873		1.15
Wal-Mart Stores Inc. 5.21% due 12/11-12/19/2006 (2)		60,000			59,877		.69
Freddie Mac 5.155%-5.17% due 12/19-1/25/2007		57,140			56,812		.65
CAFCO, LLC 5.25% due 1/9-1/29/2007 (2)		40,100			39,821		.46
Other securities					207,033		2.39
					463,416		5.34


Total short-term securities (cost: $463,408,000)					463,416		5.34


Total investment securities (cost: $6,764,583,000)					8,722,510		100.47
Other assets less liabilities					(41,027	)	(.47	)

Net assets				$	8,681,483		100.00	%

"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.

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

"Miscellaneous" and "Other securities" include six securities (with aggregate value of $14,132,000) which were valued under fair value

procedures adopted by authority of the board of trustees.

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The fund's affiliated holding listed below is also among the fund's largest holdings and is shown in the preceding summary investment portfolio. Further details on this holding and related transactions during the year ended November 30, 2006, appear below.

Company	Beginning shares	Purchases	Sales	Ending shares	Dividend income (000	)		Market value of affiliate at 11/30/06 (000	)

Apria Healthcare Group Inc. (1)	-	2,200,000	-	2,200,000	-		$	54,934

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

(2) Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public

may require registration. The total value of all such restricted securities, including those in "Other securities" in the

summary investment portfolio, was $317,912,000, which represented 3.66% of the net assets of the fund.

ADR = American Depositary Receipts

The descriptions of the companies shown in the summary investment portfolio are supplemental. These descriptions and the industry

classifications were obtained from published reports and other sources believed to be reliable, and are not covered by the

Report of Independent Registered Public Accounting Firm.

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities
at November 30, 2006		(dollars and shares in thousands, except per-share amounts)

Assets:
Investment securities at market:
Unaffiliated issuers (cost: $6,717,934)	$	8,667,576
Affiliated issuer (cost: $46,649)		54,934	$	8,722,510
Cash denominated in non-U.S. currencies
(cost: $10,513)				10,577
Cash				134
Receivables for:
Sales of investments		5,404
Sales of fund's shares		9,724
Dividends and interest		7,818		22,946
				8,756,167
Liabilities:
Payables for:
Purchases of investments		57,239
Repurchases of fund's shares		8,035
Investment advisory services		2,552
Services provided by affiliates		5,310
Deferred trustees' compensation		1,012
Other fees and expenses		536		74,684
Net assets at November 30, 2006			$	8,681,483

Net assets consist of:
Capital paid in on shares of beneficial interest			$	6,820,299
Undistributed net investment income				55,000
Accumulated net realized loss				(151,448	)
Net unrealized appreciation				1,957,632
Net assets at November 30, 2006			$	8,681,483

Shares of beneficial interest issued and outstanding - unlimited shares authorized (329,532 total shares outstanding)
		Net assets	Shares outstanding		Net asset value per share*

Class A	$	7,654,037	289,826	$	26.41
Class B		206,568	8,165		25.30
Class C		136,528	5,421		25.18
Class F		247,819	9,429		26.28
Class 529-A		74,894	2,844		26.34
Class 529-B		13,076	512		25.54
Class 529-C		23,783	931		25.55
Class 529-E		4,225	162		26.11
Class 529-F		1,876	71		26.34
Class R-1		8,316	323		25.74
Class R-2		85,157	3,305		25.77
Class R-3		76,015	2,911		26.11
Class R-4		39,914	1,515		26.34
Class R-5		109,275	4,117		26.54
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A and 529-A, for which the maximum offering prices per share were $28.02 and $27.95, respectively.

See Notes to Financial Statements

Statement of operations
for the year ended November 30, 2006		(dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. taxes of $7,393)	$	96,022
Interest		33,955		$	129,977

Fees and expenses(*):
Investment advisory services		32,745
Distribution services		22,269
Transfer agent services		8,870
Administrative services		1,408
Reports to shareholders		448
Registration statement and prospectus		290
Postage, stationery and supplies		999
Trustees' compensation		470
Auditing and legal		155
Custodian		1,646
State and local taxes		100
Other		109
Total fees and expenses before reimbursements/waivers		69,509
Less reimbursements/waivers of fees and expenses:
Investment advisory services		3,275
Administrative services		140
Total fees and expenses after reimbursements/waivers					66,094
Net investment income					63,883


Net realized gain and unrealized appreciation on investments and non-U.S. currency:
Net realized gain (loss) on:
Investments		476,414
Non-U.S. currency transactions		(1,782	)		474,632
Net unrealized appreciation on:
Investments		637,892
Non-U.S. currency translations		227			638,119
Net realized gain and
unrealized appreciation
on investments and non-U.S. currency					1,112,751
Net increase in net assets resulting from operations				$	1,176,634

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

See Notes to Financial Statements





Statements of changes in net assets		(dollars in thousands)

		Year ended November 30
		2006			2005
Operations:
Net investment income	$	63,883		$	50,636
Net realized gain on investments and
non-U.S. currency transactions		474,632			216,642
Net unrealized appreciation
on investments and non-U.S. currency translations		638,119			689,272
Net increase in net assets
resulting from operations		1,176,634			956,550


Dividends paid to shareholders from net investment income		(47,995	)		(26,323	)

Capital share transactions		(205,365	)		(634,052	)

Total increase in net assets		923,274			296,175

Net assets:
Beginning of year		7,758,209			7,462,034
End of year (including undistributed
net investment income: $55,000 and $41,784, respectively)	$	8,681,483		$	7,758,209


See Notes to Financial Statements

Notes to financial statements

1.	Organization and significant accounting policies

Organization - The New Economy Fund (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.

The fund offers 14 share classes consisting of four retail share classes, five CollegeAmerica® savings plan share classes and five retirement plan share classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F) can be utilized to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry any conversion rights. The fund’s share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Class 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
Class B and 529-B	None	Declines from 5% to 0% for redemptions within six years of purchase	Class B and 529-B convert to Class 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 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Class F and 529-F	None	None	None
Class R-1, R-2, R-3, R-4 and R-5	None	None	None

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.

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 following is a summary of the significant accounting policies followed by the fund:

Security valuation - Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the fund to meet their obligations may be affected by economic developments in a specific industry, state or region. Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under procedures adopted by authority of the fund's board of trustees. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; and changes in overall market conditions. If events occur that materially affect the value of securities (particularly non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities are fair valued.

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. 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.

Non-U.S. currency translation - Assets and liabilities, including investment securities, denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. In the accompanying financial statements, the effects of changes in non-U.S. 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 non-U.S. currencies are disclosed separately.

2.	Non-U.S. investments

Investment risk - The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.

Taxation - Dividend and interest income is recorded net of non-U.S. taxes paid. Gains realized by the fund on the sale of securities in certain countries are subject to non-U.S. taxes. The fund records a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities. For the year ended November 30, 2006, non-U.S. taxes paid on realized gains were $867,000. As of November 30, 2006, non-U.S. taxes provided on unrealized gains were $430,000.

3. Federal income taxation and distributions

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.

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 differing treatment for items such as non-U.S. currency gains and losses; short-term capital gains and losses; net capital losses; and non-U.S. taxes on capital gains. 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.

During the year ended November 30, 2006, the fund reclassified $2,649,000 from undistributed net investment income to accumulated net realized loss; and reclassified $23,000 from undistributed net investment income to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.

As of November 30, 2006, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investments were as follows:

(dollars in thousands)
Undistributed ordinary income	$	56,012
Capital loss carryforward expiring 2011*:		(151,404	)
Gross unrealized appreciation on investment securities		2,197,133
Gross unrealized depreciation on investment securities		(239,249	)
Net unrealized appreciation on investment securities		1.957,884
Cost of investment securities		6,764,626
*Reflects the utilization of capital loss carryforwards of $463,382,000. The capital loss carryforward will be used to offset any capital gains realized by the fund in future years through the expiration date. The fund will not make distributions from capital gains while capital loss carryforwards remain.

Ordinary income distributions paid to shareholders from net investment income were as follows (dollars in thousands):

	Year ended November 30
Share class		2006		2005
Class A	$	45,629	$	25,438
Class B		-		-
Class C		36		-
Class F		807		288
Class 529-A		344		141
Class 529-B		-		-
Class 529-C		-		-
Class 529-E		12		2
Class 529-F		7		2
Class R-1		6		-
Class R-2		32		-
Class R-3		188		52
Class R-4		218		69
Class R-5		716		331
Total	$	47,995	$	26,323

4. Fees and transactions with related parties

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

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.580% on the first $500 million of daily net assets and decreasing to 0.345% on such assets in excess of $27 billion. CRMC is currently waiving 10% of investment advisory services fees. During the year ended November 30, 2006, total investment advisory services fees waived by CRMC were $3,275,000. As a result, the fee shown on the accompanying financial statements of $32,745,000, which was equivalent to an annualized rate of 0.406%, was reduced to $29,470,000, or 0.365% 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 adopted plans of distribution for all share classes, except Class R-5. 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 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 Class A and 529-A, the board of trustees has also approved 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 November 30, 2006, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A.

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

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

Administrative services - The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Class A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. CRMC has agreed to pay AFS on the fund's behalf for a portion of the transfer agent services fees for some of the retirement plan share classes. For the year ended November 30, 2006, the total administrative services fees paid by CRMC were $1,000 and $139,000 for Class R-1 and R-2, respectively. Administrative services fees are presented gross of any payments made by CRMC. Each 529 share class is subject to an additional annual administrative services fee of 0.10% of its respective average daily net assets; this fee is payable to the Commonwealth of Virginia for the maintenance of the CollegeAmerica plan. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described on the previous page for the year ended November 30, 2006, were as follows (dollars in thousands):

Share class	Distribution services	Transfer agent services	Administrative services
Share class	Distribution services	Transfer agent services	CRMC administrative services	Transfer agent services	Commonwealth of Virginia administrative services
Class A	$17,395	$8,612	Not applicable	Not applicable	Not applicable
Class B	1,930	258	Not applicable	Not applicable	Not applicable
Class C	1,141	Included in administrative services	$172	$42	Not applicable
Class F	383		150	53	Not applicable
Class 529-A	104		65	14	$ 62
Class 529-B	113		12	6	11
Class 529-C	190		20	10	19
Class 529-E	18		4	1	4
Class 529-F	-		2	-*	2
Class R-1	57		6	4	Not applicable
Class R-2	539		107	331	Not applicable
Class R-3	311		90	75	Not applicable
Class R-4	88		52	4	Not applicable
Class R-5	Not applicable		88	2	Not applicable
Total	$22,269	$8,870	$768	$542	$98

* Amount less than one thousand.

Deferred trustees’ compensation - Since the adoption of the deferred compensation plan in 1993, 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 $470,000, shown on the accompanying financial statements, includes $315,000 in current fees (either paid in cash or deferred) and a net increase of $155,000 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.

5. Capital share transactions

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

Share class	Sales(*)			Reinvestments of dividends			Repurchases(*)					Net (decrease) increase
		Amount	Shares		Amount	Shares		Amount		Shares			Amount		Shares
Year ended November 30, 2006
Class A	$	653,097	26,937	$	43,554	1,851	$	(1,114,532	)	(46,210	)	$	(417,881	)	(17,422	)
Class B		22,735	975		-	-		(28,150	)	(1,212	)		(5,415	)	(237	)
Class C		44,990	1,934		35	2		(20,711	)	(901	)		24,314		1,035
Class F		138,188	5,583		755	32		(28,310	)	(1,169	)		110,633		4,446
Class 529-A		18,635	772		344	15		(4,216	)	(176	)		14,763		611
Class 529-B		2,231	95		-	-		(467	)	(20	)		1,764		75
Class 529-C		7,053	299		-	-		(1,282	)	(54	)		5,771		245
Class 529-E		1,066	45		12	-†		(287	)	(12	)		791		33
Class 529-F		854	36		7	-†		(119	)	(5	)		742		31
Class R-1		4,939	210		6	-†		(1,525	)	(64	)		3,420		146
Class R-2		31,792	1,344		32	2		(17,631	)	(747	)		14,193		599
Class R-3		36,225	1,507		188	8		(19,033	)	(788	)		17,380		727
Class R-4		16,534	686		218	9		(12,638	)	(524	)		4,114		171
Class R-5		31,564	1,285		670	29		(12,188	)	(504	)		20,046		810

Total net increase (decrease)	$	1,009,903	41,708	$	45,821	1,948	$	(1,261,089	)	(52,386	)	$	(205,365	)	(8,730	)

Year ended November 30, 2005
Class A	$	489,359	23,401	$	24,304	1,194	$	(1,244,541	)	(59,702	)	$	(730,878	)	(35,107	)
Class B		17,024	844		-	-		(24,991	)	(1,246	)		(7,967	)	(402	)
Class C		25,476	1,267		-	-		(15,776	)	(792	)		9,700		475
Class F		47,144	2,253		271	14		(17,771	)	(855	)		29,644		1,412
Class 529-A		13,163	632		141	7		(3,061	)	(146	)		10,243		493
Class 529-B		1,832	90		-	-		(442	)	(22	)		1,390		68
Class 529-C		4,134	202		-	-		(855	)	(41	)		3,279		161
Class 529-E		789	38		2	-†		(108	)	(4	)		683		34
Class 529-F		366	17		2	-†		(30	)	(1	)		338		16
Class R-1		2,343	114		-	-		(634	)	(31	)		1,709		83
Class R-2		22,858	1,114		-	-		(12,217	)	(597	)		10,641		517
Class R-3		18,462	892		52	2		(9,781	)	(474	)		8,733		420
Class R-4		14,696	703		69	3		(3,761	)	(179	)		11,004		527
Class R-5		24,754	1,155		319	16		(7,644	)	(364	)		17,429		807

Total net increase (decrease)	$	682,400	32,722	$	25,160	1,236	$	(1,341,612	)	(64,454	)	$	(634,052	)	(30,496	)

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

6. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities, of $3,176,183,000 and $3,037,005,000, respectively, during the year ended November 30, 2006.

Financial highlights⁽¹⁾

			Income (loss) from investment operations(2)											Dividends and distributions

		Net asset value, beginning of period		Net investment income (loss	)				Net gains (losses) on securities (both realized and unrealized	)		Total from investment operations			Dividends (from net investment income	)	Distributions (from capital gains	)		Total dividends and distributions			Net asset value, end of period	Total return(3	)		Net assets, end of period (in millions	)			Ratio of expenses to average net assets before reimbursements/ waivers				Ratio of expenses to average net assets after reimbursements/ waivers		(4	)	Ratio of net income (loss to average net assets
Class A:
Year ended 11/30/2006	$	22.98	$	.20				$	3.38		$	3.58		$	(.15	)	-		$	(.15	)	$	26.41	15.65	%	$	7,654				.82	%			.78	%			.83	%
Year ended 11/30/2005		20.27		.15					2.63			2.78			(.07	)	-			(.07	)		22.98	13.79			7,061				.83				.79				.73
Year ended 11/30/2004		18.11		.06					2.11			2.17			(.01	)	-			(.01	)		20.27	12.00			6,938				.84				.84				.32
Year ended 11/30/2003		14.94		.01					3.16			3.17			-		-			-			18.11	21.22			6,671				.89				.89				.09
Year ended 11/30/2002		18.01		-		(5	)		(3.07	)		(3.07	)		-		-			-			14.94	(17.05	)		5,883				.89				.89				(.01	)
Class B:
Year ended 11/30/2006		22.05		.01					3.24			3.25			-		-			-			25.30	14.74			207				1.59				1.55				.06
Year ended 11/30/2005		19.52		(.01	)				2.54			2.53			-		-			-			22.05	12.96			185				1.60				1.57				(.05	)
Year ended 11/30/2004		17.57		(.08	)				2.03			1.95			-		-			-			19.52	11.10			172				1.62				1.62				(.45	)
Year ended 11/30/2003		14.61		(.11	)				3.07			2.96			-		-			-			17.57	20.26			144				1.68				1.68				(.70	)
Year ended 11/30/2002		17.75		(.12	)				(3.02	)		(3.14	)		-		-			-			14.61	(17.69	)		104				1.69				1.69				(.79	)
Class C:
Year ended 11/30/2006		21.96		-		(5	)		3.23			3.23			(.01	)	-			(.01	)		25.18	14.70			136				1.64				1.60				.01
Year ended 11/30/2005		19.46		(.02	)				2.52			2.50			-		-			-			21.96	12.85			96				1.65				1.61				(.09	)
Year ended 11/30/2004		17.52		(.09	)				2.03			1.94			-		-			-			19.46	11.07			76				1.66				1.65				(.47	)
Year ended 11/30/2003		14.57		(.11	)				3.06			2.95			-		-			-			17.52	20.25			51				1.69				1.69				(.73	)
Year ended 11/30/2002		17.70		(.12	)				(3.01	)		(3.13	)		-		-			-			14.57	(17.68	)		26				1.70				1.70				(.77	)
Class F:
Year ended 11/30/2006		22.88		.19					3.37			3.56			(.16	)	-			(.16	)		26.28	15.63			248				.83				.79				.81
Year ended 11/30/2005		20.19		.15					2.62			2.77			(.08	)	-			(.08	)		22.88	13.77			114				.86				.83				.70
Year ended 11/30/2004		18.07		.06					2.09			2.15			(.03	)	-			(.03	)		20.19	11.89			72				.89				.88				.32
Year ended 11/30/2003		14.91		.01					3.15			3.16			-		-			-			18.07	21.19			40				.91				.91				.04
Year ended 11/30/2002		17.98		-		(5	)		(3.07	)		(3.07	)		-		-			-			14.91	(17.08	)		15				.95				.95				(.02	)
Class 529-A:
Year ended 11/30/2006		22.93		.19					3.37			3.56			(.15	)	-			(.15	)		26.34	15.61			75				.85				.81				.80
Year ended 11/30/2005		20.24		.14					2.63			2.77			(.08	)	-			(.08	)		22.93	13.74			51				.87				.84				.69
Year ended 11/30/2004		18.11		.06					2.10			2.16			(.03	)	-			(.03	)		20.24	11.96			35				.87				.86				.33
Year ended 11/30/2003		14.93		.02					3.16			3.18			-		-			-			18.11	21.30			20				.85				.85				.11
Period from 2/15/2002 to 11/30/2002		17.14		-		(5	)		(2.21	)		(2.21	)		-		-			-			14.93	(12.89	)		8				1.00		(6	)	1.00		(6	)	.02		(6	)
Class 529-B:
Year ended 11/30/2006		22.28		(.02	)				3.28			3.26			-		-			-			25.54	14.63			13				1.72				1.68				(.07	)
Year ended 11/30/2005		19.76		(.04	)				2.56			2.52			-		-			-			22.28	12.75			10				1.76				1.72				(.20	)
Year ended 11/30/2004		17.82		(.11	)				2.05			1.94			-		-			-			19.76	10.89			7				1.78				1.78				(.58	)
Year ended 11/30/2003		14.83		(.13	)				3.12			2.99			-		-			-			17.82	20.16			4				1.81				1.81				(.86	)
Period from 2/19/2002 to 11/30/2002		16.76		(.09	)				(1.84	)		(1.93	)		-		-			-			14.83	(11.52	)		1				1.84		(6	)	1.84		(6	)	(.82	)	(6	)
Class 529-C:
Year ended 11/30/2006		22.30		(.01	)				3.26			3.25			-		-			-			25.55	14.57			24				1.71				1.67				(.06	)
Year ended 11/30/2005		19.77		(.04	)				2.57			2.53			-		-			-			22.30	12.80			15				1.75				1.71				(.18	)
Year ended 11/30/2004		17.83		(.11	)				2.05			1.94			-		-			-			19.77	10.88			10				1.77				1.76				(.57	)
Year ended 11/30/2003		14.84		(.13	)				3.12			2.99			-		-			-			17.83	20.15			5				1.80				1.80				(.84	)
Period from 2/21/2002 to 11/30/2002		16.55		(.09	)				(1.62	)		(1.71	)		-		-			-			14.84	(10.33	)		2				1.80		(6	)	1.80		(6	)	(.78	)	(6	)
Class 529-E:
Year ended 11/30/2006		22.75		.11					3.34			3.45			(.09	)	-			(.09	)		26.11	15.22			4				1.18				1.14				.47
Year ended 11/30/2005		20.09		.07					2.61			2.68			(.02	)	-			(.02	)		22.75	13.37			3				1.22				1.18				.35
Year ended 11/30/2004		18.01		(.01	)				2.09			2.08			-		-			-			20.09	11.55			2				1.23				1.23				(.03	)
Year ended 11/30/2003		14.91		(.05	)				3.15			3.10			-		-			-			18.01	20.79			1				1.25				1.25				(.30	)
Period from 3/15/2002 to 11/30/2002		18.26		(.02	)				(3.33	)		(3.35	)		-		-			-			14.91	(18.35	)		-		(7	)	1.25		(6	)	1.25		(6	)	(.23	)	(6	)
Class 529-F:
Year ended 11/30/2006		22.92		.23					3.36			3.59			(.17	)	-			(.17	)		26.34	15.77			2				.68				.64				.97
Year ended 11/30/2005		20.20		.16					2.63			2.79			(.07	)	-			(.07	)		22.92	13.84			1				.81				.77				.76
Year ended 11/30/2004		18.09		.04					2.09			2.13			(.02	)	-			(.02	)		20.20	11.79			1				.98				.98				.23
Year ended 11/30/2003		14.94		(.01	)				3.16			3.15			-		-			-			18.09	21.08			-		(7	)	1.00				1.00				(.04	)
Period from 10/11/2002 to 11/30/2002		12.30		-		(5	)		2.64			2.64			-		-			-			14.94	21.46			-		(7	)	.14				.14				(.03	)



Class R-1:
Year ended 11/30/2006	$	22.47	$	-		(5	)	$	3.30		$	3.30		$	(.03	)	-		$	(.03	)	$	25.74	14.72	%	$	8				1.64	%			1.58	%			.01	%
Year ended 11/30/2005		19.90		(.02	)				2.59			2.57			-		-			-			22.47	12.91			4				1.70				1.61				(.09	)
Year ended 11/30/2004		17.92		(.08	)				2.06			1.98			-		-			-			19.90	11.05			2				1.76				1.65				(.44	)
Year ended 11/30/2003		14.90		(.11	)				3.13			3.02			-		-			-			17.92	20.27			1				1.96				1.66				(.69	)
Period from 6/21/2002 to 11/30/2002		15.45		(.04	)				(.51	)		(.55	)		-		-			-			14.90	(3.56	)		-		(7	)	1.43				.73				(.28	)
Class R-2:
Year ended 11/30/2006		22.47		.01					3.30			3.31			(.01	)	-			(.01	)		25.77	14.74			85				1.81				1.58				.04
Year ended 11/30/2005		19.90		(.01	)				2.58			2.57			-		-			-			22.47	12.91			61				1.91				1.58				(.05	)
Year ended 11/30/2004		17.92		(.08	)				2.06			1.98			-		-			-			19.90	11.05			44				2.03				1.61				(.40	)
Year ended 11/30/2003		14.88		(.11	)				3.15			3.04			-		-			-			17.92	20.43			21				2.35				1.62				(.68	)
Period from 5/31/2002 to 11/30/2002		17.02		(.05	)				(2.09	)		(2.14	)		-		-			-			14.88	(12.57	)		3				2.00		(6	)	1.63		(6	)	(.78	)	(6	)
Class R-3:
Year ended 11/30/2006		22.75		.10					3.34			3.44			(.08	)	-			(.08	)		26.11	15.18			76				1.22				1.18				.44
Year ended 11/30/2005		20.10		.07					2.61			2.68			(.03	)	-			(.03	)		22.75	13.35			50				1.24				1.19				.33
Year ended 11/30/2004		18.03		-		(5	)		2.07			2.07			-		-			-			20.10	11.48			35				1.26				1.23				(.02	)
Year ended 11/30/2003		14.92		(.05	)				3.16			3.11			-		-			-			18.03	20.84			17				1.37				1.24				(.29	)
Period from 6/25/2002 to 11/30/2002		15.26		(.02	)				(.32	)		(.34	)		-		-			-			14.92	(2.23	)		2				.61				.54				(.12	)
Class R-4:
Year ended 11/30/2006		22.94		.19					3.37			3.56			(.16	)	-			(.16	)		26.34	15.61			40				.86				.82				.79
Year ended 11/30/2005		20.25		.15					2.63			2.78			(.09	)	-			(.09	)		22.94	13.76			31				.86				.82				.70
Year ended 11/30/2004		18.12		.07					2.09			2.16			(.03	)	-			(.03	)		20.25	11.92			17				.86				.85				.34
Year ended 11/30/2003		14.94		.01					3.17			3.18			-		-			-			18.12	21.28			10				.88				.88				.09
Period from 7/25/2002 to 11/30/2002		12.85		(.01	)				2.10			2.09			-		-			-			14.94	16.26			4				.33				.31				(.03	)
Class R-5:
Year ended 11/30/2006		23.10		.27					3.38			3.65			(.21	)	-			(.21	)		26.54	15.94			109				.55				.51				1.10
Year ended 11/30/2005		20.37		.21					2.65			2.86			(.13	)	-			(.13	)		23.10	14.14			76				.55				.52				1.02
Year ended 11/30/2004		18.21		.12					2.10			2.22			(.06	)	-			(.06	)		20.37	12.26			51				.55				.55				.62
Year ended 11/30/2003		14.97		.06					3.18			3.24			-		-			-			18.21	21.64			44				.56				.56				.41
Period from 5/15/2002 to 11/30/2002		17.58		.03					(2.64	)		(2.61	)		-		-			-			14.97	(14.85	)		31				.56		(6	)	.56		(6	)	.44		(6	)

	Year ended November 30
		2006		2005		2004		2003		2002

Portfolio turnover rate for all classes of shares		41	%	32	%	35	%	38	%	37	%

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

(2) Based on average shares outstanding.

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

(4) The ratios in this column reflect the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes. In addition, during the start-up period for the retirement plan share classes (except Class R-5), CRMC agreed to pay a portion of the fees related to transfer agent services.

(5) Amount less than $.01.

(6) Annualized.

(7) Amount less than $1 million.

See Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of The New Economy Fund:

We have audited the accompanying statement of assets and liabilities of The New Economy Fund (the “Fund”), including the investment portfolio, as of November 30, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2006, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The New Economy Fund as of November 30, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Costa Mesa, California

January 11, 2007

Tax information unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended November 30, 2006:

Qualified dividend income		100	%
Corporate dividends received deduction	$	32,613,000
U.S. government income that may be exempt from state taxation		2,148,000

Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2007, to determine the calendar year amounts to be included on their 2006 tax returns. Shareholders should consult their tax advisers.

<PAGE>





[Logo - American Funds/R/]                The right choice for the long term/(R)/




 The New Economy Fund/(R)/



 RETIREMENT PLAN
 PROSPECTUS




 February 1, 2007










TABLE OF CONTENTS

 1    Risk/Return summary
 4    Fees and expenses of the fund
 6    Investment objective, strategies and risks
 9    Management and organization
12    Purchase, exchange and sale of shares
15    Sales charges
17    Sales charge reductions
19    Rollovers from retirement plans to IRAs
20    Plans of distribution
20    Other compensation to dealers
21    Distributions and taxes
22    Financial highlights





 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
 THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS
 ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
 OFFENSE.


<PAGE>


[This page intentionally left blank for this filing.]


<PAGE>

Risk/Return summary

The fund seeks to make your investment grow over time by investing primarily in
stocks of companies in the services and information areas of the global economy.

The fund is designed for investors seeking greater capital appreciation through
investments in stocks of issuers based around the world.  Investors in the fund
should have a long-term perspective and be able to tolerate potentially wide
price fluctuations.
Your investment in the fund is subject to risks, including the possibility that
the value of the fund's portfolio holdings may fluctuate in response to events
specific to the companies or markets in which the fund invests, as well as
economic, political or social events in the United States or abroad. The fund
may be subject to additional risks because it invests in a more limited group of
sectors and industries than the broad market.

Although all securities in the fund's portfolio may be adversely affected by
currency fluctuations or global economic, political or social instability,
securities issued by entities based outside the United States may be affected to
a greater extent.

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.


                                       1

                                              The New Economy Fund / Prospectus
<PAGE>

HISTORICAL INVESTMENT RESULTS
The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 3 shows how the fund's
average annual total returns for various periods compare with different broad
measures of market performance. This information provides some indication of the
risks of investing in the fund. All fund results reflect the reinvestment of
dividends and capital gain distributions, if any. Unless otherwise noted, fund
results reflect any fee waivers and/or expense reimbursements in effect during
the period presented. Past results are not predictive of future results.


CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

'97  28.85%
'98  28.84
'99  45.88
'00 -16.20
'01 -17.34
'02 -26.01
'03  38.71
'04  12.45
'05  12.17
'06  14.73

[end bar chart]




Highest/Lowest quarterly results during this time period were:




HIGHEST                   27.14%  (quarter ended December 31, 1999)
LOWEST                   -25.23%  (quarter ended September 30, 2001)






                                       2

The New Economy Fund / Prospectus


<PAGE>



Unlike the bar chart on the previous page, the Investment Results table below
reflects, as required by Securities and Exchange Commission rules, the fund's
investment results with the following maximum initial sales charge imposed:

 . Class A share results reflect the maximum initial sales charge of 5.75%. This
   charge is reduced for purchases of $25,000 or more and eliminated for
   purchases of $1 million or more.

 . Class R shares are sold without any initial sales charge.

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 7 reflects the fund's results calculated without a sales charge.
 INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                 1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
-------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 12/1/83   8.13%    6.95%    8.91%       12.24%



                                  1 YEAR   LIFETIME/1/
-------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/21/02  13.79%     12.40%
 CLASS R-2 -- FIRST SOLD 5/31/02  13.80       9.89
 CLASS R-3 -- FIRST SOLD 6/25/02  14.26      13.19
 CLASS R-4 -- FIRST SOLD 7/25/02  14.66      18.38
 CLASS R-5 -- FIRST SOLD 5/15/02  15.03      10.19



                                       1 YEAR  5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 INDEXES
 S&P 500/3/                            15.78%   6.19%     8.42%      12.56%
 Lipper Multi-Cap Growth Funds          9.21    4.73      6.41       10.63
 Index/4/
 Global Service and Information        17.32    7.74      8.13         N/A
 Index/5/
 Russell 2500/TM/ Index/6/             16.17   12.19     11.26       12.38



/1/ Lifetime results for each share class are measured from the date the share
    class was first sold.
/2/ Lifetime results for the index(es) shown are measured from the date Class A
    shares were first sold. In prior years, each index may have included different
    funds or securities from those that constitute the current year's index.
/3/ Standard & Poor's 500 Composite Index is a market capitalization-weighted
    index based on the average weighted performance of 500 widely held common
    stocks. This index is unmanaged and includes reinvested dividends and/or
    distributions, but does not reflect sales charges, commissions, expenses or
    taxes.
/4/ Lipper Multi-Cap Growth Funds Index is an equally weighted index of funds that
    invest in a variety of market capitalization ranges without concentrating 75%
    of their equity assets in any one market capitalization range over an extended
    period of time. Multi-cap growth funds typically have an above-average
    price-to-earnings ratio, price-to-book ratio and three-year sales-per-share
    growth value, compared to the S&P SuperComposite 1500 Index. The results of the
    underlying funds in the index include the reinvestment of dividends and capital
    gain distributions, as well as brokerage commissions paid by the funds for
    portfolio transactions, but do not reflect sales charges or taxes.
/5/ Global Service and Information Index is a subset of the unmanaged MSCI World
    Index, which is a market-capitalization-weighted index that measures the
    returns of companies in 23 developed countries. This subset is 70%
    U.S.-weighted and consists specifically of companies in the service and
    information industries that together represent approximately 60% of the MSCI
    World Index. The index is compiled by Capital Research and Management Company,
    is unmanaged, and includes reinvested dividends and/or distributions, but does
    not reflect sales charges, commissions, expenses or taxes.
/6/ Russell 2500 Index tracks U.S. small and medium capitalization stocks. This
    index is unmanaged and includes reinvested dividends and/or distributions, but
    does not reflect sales charges, commissions, expenses or taxes.


                                       3

                                              The New Economy Fund / Prospectus
<PAGE>

Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.



 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
                                               CLASS A    ALL R SHARE CLASSES
------------------------------------------------------------------------------

 Maximum initial sales charge on purchases      5.75%/*/         none
 (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum sales charge on reinvested dividends    none            none
------------------------------------------------------------------------------
 Maximum contingent deferred sales charge        none            none
------------------------------------------------------------------------------
 Redemption or exchange fees                     none            none



* The initial sales charge is reduced for purchases of $25,000 or more and
 eliminated for purchases of $1 million or more.




 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
                                            CLASS  CLASS  CLASS  CLASS   CLASS
                                   CLASS A   R-1    R-2    R-3    R-4     R-5
-------------------------------------------------------------------------------

 Management fees/1/                 0.41%   0.41%  0.41%  0.41%  0.41%   0.41%
-------------------------------------------------------------------------------
 Distribution and/or service        0.24    1.00   0.75   0.50   0.25    none
 (12b-1) fees/2/
-------------------------------------------------------------------------------
 Other expenses                     0.17    0.23   0.65   0.31   0.20    0.14
-------------------------------------------------------------------------------
 Total annual fund operating        0.82    1.64   1.81   1.22   0.86    0.55
 expenses/1/
-------------------------------------------------------------------------------


/1/ The fund's investment adviser is currently waiving 10% of its management fee.
    The waiver may be discontinued at any time in consultation with the fund's
    board, but it is expected to continue at this level until further review. The
    fund's investment adviser and board intend to review the waiver as
    circumstances warrant. In addition, the investment adviser paid a portion of
    the fund's transfer agent fees for certain R share classes. Expenses shown
    above do not reflect any waiver or reimbursement. Information regarding the
    effect of any waiver/reimbursement on total annual fund operating expenses can
    be found in the Financial Highlights table in this prospectus and in the fund's
    annual report.
/2/ Class A, R-1, R-2, R-3 and R-4 12b-1 fees may not exceed .25%, 1.00%, 1.00%,
    .75% and .50%, respectively, of the class' average net assets annually.


                                       4

The New Economy Fund / Prospectus


<PAGE>

OTHER EXPENSES
The "Other expenses" items in the table above include custodial, legal, transfer
agent and subtransfer agent/recordkeeping payments, as well as various other
expenses. Subtransfer agent/recordkeeping payments may be made to the fund's
investment adviser, affiliates of the adviser and unaffiliated third parties for
providing recordkeeping and other administrative services to retirement plans
invested in the fund in lieu of the transfer agent providing such services. The
amount paid for subtransfer agent/recordkeeping services will vary depending on
the share class selected and the entity receiving the payments. The table below
shows the maximum payments to entities providing services to retirement plans.


             PAYMENTS TO AFFILIATED ENTITIES       PAYMENTS TO UNAFFILIATED
-----------------------------------------------            ENTITIES
                                               --------------------------------

 Class A            .05% of assets or                  .05% of assets or
             $12 per participant position/1/    $12 per participant position/1/
-------------------------------------------------------------------------------
 Class R-1           .10% of assets                     .10% of assets
-------------------------------------------------------------------------------
 Class R-2     .15% of assets plus $27 per              .25% of assets
             participant position/2/ or .35%
                      of assets/3/
-------------------------------------------------------------------------------
 Class R-3     .10% of assets plus $12 per              .15% of assets
             participant position/2/ or .19%
                      of assets/3/
 Class R-4           .10% of assets                     .10% of assets
-------------------------------------------------------------------------------
 Class R-5           .05% of assets                     .05% of assets
-------------------------------------------------------------------------------




/1/ Payment amount depends on the date upon which services commenced.
/2/ Payment with respect to Recordkeeper Direct/(R)/ program.
/3/ Payment with respect to PlanPremier/(R)/ program.

EXAMPLES

The examples below are intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The examples do not reflect the impact of any fee waivers
or expense reimbursements.

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:




                               1 YEAR  3 YEARS  5 YEARS   10 YEARS
-------------------------------------------------------------------

 Class A*                       $654    $822    $1,004     $1,530
-------------------------------------------------------------------
 Class R-1                       167     517       892      1,944
-------------------------------------------------------------------
 Class R-2                       184     569       980      2,127
-------------------------------------------------------------------
 Class R-3                       124     387       670      1,477
-------------------------------------------------------------------
 Class R-4                        88     274       477      1,061
-------------------------------------------------------------------
 Class R-5                        56     176       307        689
-------------------------------------------------------------------



* Reflects the maximum initial sales charge in the first year.


                                       5

                                              The New Economy Fund / Prospectus
<PAGE>

Investment objective, strategies and risks

The fund seeks to provide you with long-term growth of capital. It invests
primarily in stocks of companies in the services and information areas of the
global economy, although a portion of its assets may be invested outside these
areas. Companies in the services and information areas include, for example,
those involved in the fields of telecommunications, computer systems and
software, the Internet, broadcasting and publishing, health care, advertising,
leisure, tourism, financial services, distribution and transportation. Providing
you with current income is a secondary consideration.
The prices of securities held by the fund may decline in response to certain
events, including those directly involving the companies whose securities are
owned by the fund; conditions affecting the general economy; overall market
changes; local, regional or global political, social or economic instability;
and currency, interest rate and commodity price fluctuations. The
growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss, particularly in the case of
smaller capitalization stocks. Because the fund generally invests in securities
of issuers in the services and information areas, it may be more susceptible to
factors adversely affecting these issuers than funds that do not focus on these
areas.

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent and may also be
affected by currency controls; different accounting, auditing, financial
reporting, and legal standards and practices in some countries; expropriation;
changes in tax policy; greater market volatility; differing securities market
structures; higher transaction costs; and various administrative difficulties,
such as delays in clearing and settling portfolio transactions or in receiving
payment of dividends. These risks may be heightened in connection with
investments in developing countries.

The fund may also hold cash or money market instruments. The percentage of the
fund invested in such holdings varies and depends on various factors, including
market conditions and purchases and redemptions of fund shares. A larger
percentage of such holdings could moderate the fund's investment results in a
period of rising market prices.

A larger percentage of cash or money market instruments could reduce the
magnitude of the fund's loss in the event of falling market prices and provide
liquidity to make additional investments or to meet redemptions.

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively valued
companies that, in its opinion, represent above-average long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is through fundamental analysis, which may include meeting with
company executives and employees, suppliers, customers and competitors.
Securities may be sold when the investment adviser believes that they no longer
represent relatively attractive investment opportunities.


                                       6

The New Economy Fund / Prospectus


<PAGE>

ADDITIONAL INVESTMENT RESULTS
Unlike the Investment Results table on page 3, the table below reflects the
fund's results calculated without a sales charge.
 ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                 1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
-------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 12/1/83   14.73%   8.23%    9.56%       12.53%



                                  1 YEAR   LIFETIME/1/
-------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/21/02  13.79%     12.40%
 CLASS R-2 -- FIRST SOLD 5/31/02  13.80       9.89
 CLASS R-3 -- FIRST SOLD 6/25/02  14.26      13.19
 CLASS R-4 -- FIRST SOLD 7/25/02  14.66      18.38
 CLASS R-5 -- FIRST SOLD 5/15/02  15.03      10.19



                                       1 YEAR  5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 INDEXES
 S&P 500/3/                            15.78%   6.19%     8.42%      12.56%
 Lipper Multi-Cap Growth Funds          9.21    4.73      6.41       10.63
 Index/4/
 Global Service and Information        17.32    7.74      8.13         N/A
 Index/5/
 Russell 2500 Index/6/                 16.17   12.19     11.26       12.38



/1/ Lifetime results for each share class are measured from the date the share
    class was first sold.
/2/ Lifetime results for the index(es) shown are measured from the date Class A
    shares were first sold. In prior years, each index may have included different
    funds or securities from those that constitute the current year's index.
/3/ Standard & Poor's 500 Composite Index is a market capitalization-weighted
    index based on the average weighted performance of 500 widely held common
    stocks. This index is unmanaged and includes reinvested dividends and/or
    distributions, but does not reflect sales charges, commissions, expenses or
    taxes.
/4/ Lipper Multi-Cap Growth Funds Index is an equally weighted index of funds that
    invest in a variety of market capitalization ranges without concentrating 75%
    of their equity assets in any one market capitalization range over an extended
    period of time. Multi-cap growth funds typically have an above-average
    price-to-earnings ratio, price-to-book ratio and three-year sales-per-share
    growth value, compared to the S&P SuperComposite 1500 Index. The results of the
    underlying funds in the index include the reinvestment of dividends and capital
    gain distributions, as well as brokerage commissions paid by the funds for
    portfolio transactions, but do not reflect sales charges or taxes.
/5/ Global Service and Information Index is a subset of the unmanaged MSCI World
    Index, which is a market-capitalization-weighted index that measures the
    returns of companies in 23 developed countries. This subset is 70%
    U.S.-weighted and consists specifically of companies in the service and
    information industries that together represent approximately 60% of the MSCI
    World Index. The index is compiled by Capital Research and Management Company,
    is unmanaged, and includes reinvested dividends and/or distributions, but does
    not reflect sales charges, commissions, expenses or taxes.
/6/ Russell 2500 Index tracks U.S. small and medium capitalization stocks. This
    index is unmanaged and includes reinvested dividends and/or distributions, but
    does not reflect sales charges, commissions, expenses or taxes.


                                       7

                                              The New Economy Fund / Prospectus
<PAGE>
[pie chart]

INDUSTRY GROUP DIVERSIFICATION AS OF NOVEMBER 30, 2006 (percent of net assets)


13.87%  Banks
12.70   Software & services
 8.55   Retailing
 6.52   Semiconductors & semiconductor equipment
 6.51   Health care equipment & services
46.98   Other industries
 4.87   Short-term securities & other assets less liabilities

[end pie chart]




Because the fund is actively managed, its holdings will change over time.

For updated information on the fund's portfolio holdings, please visit us at
americanfunds.com.




                                       8

The New Economy Fund / Prospectus


<PAGE>

Management and organization

INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including the American Funds. Capital Research and Management Company is
a wholly owned subsidiary of The Capital Group Companies, Inc. and is located at
333 South Hope Street, Los Angeles, California 90071, and 135 South State
College Boulevard, Brea, California 92821. Capital Research and Management
Company manages the investment portfolio and business affairs of the fund. The
total management fee paid by the fund, as a percentage of average net assets,
for the previous fiscal year appears in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." A discussion regarding the basis for the
approval of the fund's investment advisory and service agreement by the fund's
board of trustees is contained in the fund's annual report to shareholders for
the fiscal year ended November 30, 2006.

EXECUTION OF PORTFOLIO TRANSACTIONS
The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. The investment adviser strives to obtain best execution
for the fund's portfolio transactions, taking into account a variety of factors
to produce the most favorable total price reasonably attainable under the
circumstances. These factors include the size and type of transaction, the cost
and quality of executions, and the broker-dealer's ability to offer liquidity
and anonymity. For example, with respect to equity transactions, the fund does
not consider the investment adviser as having an obligation to obtain the lowest
available commission rate to the exclusion of price, service and qualitative
considerations. Subject to the considerations outlined above, the investment
adviser may place orders for the fund's portfolio transactions with
broker-dealers who have sold shares of funds managed by the investment adviser,
or who have provided investment research, statistical or other related services
to the investment adviser. In placing orders for the fund's portfolio
transactions, the investment adviser does not commit to any specific amount of
business with any particular broker-dealer. Subject to best execution, the
investment adviser may consider investment research, statistical or other
related services provided to the adviser in placing orders for the fund's
portfolio transactions. However, when the investment adviser places orders for
the fund's portfolio transactions, it does not give any consideration to whether
a broker-dealer has sold shares of the funds managed by the investment adviser.


PORTFOLIO HOLDINGS
Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the lower
portion of the fund's details page on the website. A list of the fund's top 10
equity holdings, updated as of each month-end, is generally posted to this page
within 14 days after the end of the applicable month.


                                       9

                                              The New Economy Fund / Prospectus
<PAGE>

A link to the fund's complete list of publicly disclosed portfolio holdings,
updated as of each calendar quarter-end, is generally posted to this page within
45 days after the end of the applicable quarter. Both lists remain available on
the website until new information for the next month or quarter is posted.
Portfolio holdings information for the fund is also contained in reports filed
with the Securities and Exchange Commission.

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
decide how their respective segments will be invested. In addition, Capital
Research and Management Company's investment analysts may make investment
decisions with respect to a portion of a fund's portfolio. Investment decisions
are subject to a fund's objective(s), policies and restrictions and the
oversight of the appropriate investment-related committees of Capital Research
and Management Company.

The primary individual portfolio counselors for The New Economy Fund are:

                                             PRIMARY TITLE WITH                PORTFOLIO
                            PORTFOLIO        INVESTMENT ADVISER                COUNSELOR'S
 PORTFOLIO COUNSELOR/       COUNSELOR        (OR AFFILIATE)                    ROLE IN
 FUND TITLE                 EXPERIENCE       AND INVESTMENT                    MANAGEMENT
 (IF APPLICABLE)           IN THIS FUND      EXPERIENCE                        OF THE FUND

 GORDON CRAWFORD             13 years        Senior Vice President, Capital    Serves as a global
 Vice Chairman of        (plus 5 years of    Research and Management Company   equity portfolio
 the Board               prior experience                                      counselor
                              as an          Investment professional for 36
                        investment analyst   years, all with Capital
                          for the fund)      Research and Management Company
                                             or affiliate

 TIMOTHY D. ARMOUR           16 years        President and Director, Capital   Serves as a global
 President and Trustee   (plus 5 years of    Research and Management Company   equity portfolio
                         prior experience                                      counselor
                              as an          Investment professional for 24
                        investment analyst   years, all with Capital
                          for the fund)      Research and Management Company
                                             or affiliate

 MARK E. DENNING             5 years         Director, Capital Research and    Serves as a global
 Senior Vice President   (plus 9 years of    Management Company                equity portfolio
                         prior experience                                      counselor
                              as an          Investment professional for 25
                        investment analyst   years, all with Capital
                          for the fund)      Research and Management Company
                                             or affiliate
 CLAUDIA P. HUNTINGTON       12 years        Senior Vice President, Capital    Serves as a global
 Senior Vice President  (plus 11 years of    Research and Management Company   equity portfolio
                         prior experience                                      counselor
                              as an          Investment professional for 34
                        investment analyst   years in total; 32 years with
                          for the fund)      Capital Research and Management
                                             Company or affiliate







                                       10

The New Economy Fund / Prospectus


<PAGE>

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage can be found in the
statement of additional information.

CERTAIN PRIVILEGES AND/OR SERVICES DESCRIBED ON THE FOLLOWING PAGES OF THIS
PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION MAY NOT BE AVAILABLE
TO YOU DEPENDING ON YOUR INVESTMENT DEALER OR RETIREMENT PLAN RECORDKEEPER.
PLEASE SEE YOUR FINANCIAL ADVISER, INVESTMENT DEALER OR PLAN RECORDKEEPER FOR
MORE INFORMATION.


                                       11

                                              The New Economy Fund / Prospectus
<PAGE>

Purchase, exchange and sale of shares

AMERICAN FUNDS SERVICE COMPANY, THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND
AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S DISTRIBUTOR, IS REQUIRED BY LAW TO
OBTAIN CERTAIN PERSONAL INFORMATION FROM YOU OR ANY OTHER PERSON(S) ACTING ON
YOUR BEHALF IN ORDER TO VERIFY YOUR OR SUCH PERSON'S IDENTITY. IF YOU DO NOT
PROVIDE THE INFORMATION, THE TRANSFER AGENT MAY NOT BE ABLE TO OPEN YOUR
ACCOUNT. IF THE TRANSFER AGENT IS UNABLE TO VERIFY YOUR IDENTITY OR THAT OF ANY
OTHER PERSON(S) AUTHORIZED TO ACT ON YOUR BEHALF, OR BELIEVES IT HAS IDENTIFIED
POTENTIALLY CRIMINAL ACTIVITY, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE
THE RIGHT TO CLOSE YOUR ACCOUNT OR TAKE SUCH OTHER ACTION THEY DEEM REASONABLE
OR REQUIRED BY LAW.

PURCHASES AND EXCHANGES

Eligible retirement plans generally may open an account and purchase Class A or
R shares by contacting any investment dealer (who may impose transaction charges
in addition to those described in this prospectus) authorized to sell the fund's
shares. Some or all R share classes may not be available through certain
investment dealers. Additional shares may be purchased through a plan's
administrator or recordkeeper.

Class A shares are generally not available for retirement plans using the
PlanPremier or Recordkeeper Direct recordkeeping programs.
Class R shares generally are available only to 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit-sharing and money purchase pension
plans, defined benefit plans and nonqualified deferred compensation plans. Class
R shares also are generally available only to retirement plans where plan level
or omnibus accounts are held on the books of the fund. Class R-5 shares
generally are available only to retirement plans with $1 million or more in plan
assets. In addition, Class R-5 shares are available for investment by American
Funds Target Date Retirement Series. Class R shares generally are not available
to retail nonretirement accounts, traditional and Roth Individual Retirement
Accounts (IRAs), Coverdell Education Savings Accounts, SEPs, SARSEPs, SIMPLE
IRAs, individual 403(b) plans and 529 college savings plans.

Shares of the fund offered through this prospectus generally may be exchanged
into shares of the same class of other American Funds. Exchanges of Class A
shares from American Funds money market funds purchased without a sales charge
generally will be subject to the appropriate sales charge.

FREQUENT TRADING OF FUND SHARES
The fund and American Funds Distributors reserve the right to reject any
purchase order for any reason. The fund is not designed to serve as a vehicle
for frequent trading. Frequent trading of fund shares may lead to increased
costs to the fund and less efficient management of the fund's portfolio,
resulting in dilution of the value of the shares held by long-term shareholders.
Accordingly, purchases, including those that are part of exchange


                                       12

The New Economy Fund / Prospectus


<PAGE>

activity, that the fund or American Funds Distributors has determined could
involve actual or potential harm to the fund may be rejected.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of trustees has also adopted certain
policies and procedures with respect to frequent purchases and redemptions of
fund shares. Under the fund's "purchase blocking policy," any shareholder
redeeming shares (including redemptions that are part of an exchange
transaction) having a value of $5,000 or more from the fund will be precluded
from investing in the fund (including investments that are part of an exchange
transaction) for 30 calendar days after the redemption transaction. This
prohibition will not apply to redemptions by shareholders whose shares are held
on the books of third-party intermediaries (such as investment dealers holding
shareholder accounts in street name, retirement plan recordkeepers, insurance
company separate accounts and bank trust companies) that have not adopted
procedures to implement this policy. American Funds Service Company will work
with intermediaries to develop such procedures or other procedures that American
Funds Service Company determines are reasonably designed to achieve the
objective of the purchase blocking policy. At the time the intermediaries adopt
these procedures, shareholders whose accounts are on the books of such
intermediaries will be subject to this purchase blocking policy or another
frequent trading policy that is reasonably designed to achieve the objective of
the purchase blocking policy. Shareholders should refer to disclosures provided
by the intermediaries with which they have an account to determine the specific
trading restrictions that apply to the shareholder. There is no guarantee that
all instances of frequent trading in fund shares will be prevented.

Under the fund's purchase blocking policy, certain purchases will not be
prevented and certain redemptions will not trigger a purchase block, such as:
systematic redemptions and purchases where the entity maintaining the
shareholder account is able to identify the transaction as a systematic
redemption or purchase; purchases and redemptions of shares having a value of
less than $5,000; transactions in Class 529 shares; purchases and redemptions
resulting from reallocations by American Funds Target Date Retirement Series;
retirement plan contributions, loans and distributions (including hardship
withdrawals) identified as such on the retirement plan recordkeeper's system;
and purchase transactions involving transfers of assets, rollovers, Roth IRA
conversions and IRA recharacterizations, where the entity maintaining the
shareholder account is able to identify the transaction as one of these types of
transactions.

NOTWITHSTANDING THE FUND'S PURCHASE BLOCKING POLICY, ALL TRANSACTIONS IN FUND
SHARES REMAIN SUBJECT TO THE FUND'S AND AMERICAN FUNDS DISTRIBUTORS' RIGHT TO
RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY (INCLUDING THE TYPES OF
TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED OR TRIGGER A PURCHASE
BLOCK UNDER THE POLICY). SEE THE STATEMENT OF ADDITIONAL INFORMATION FOR MORE
INFORMATION ABOUT HOW AMERICAN FUNDS SERVICE COMPANY MAY ADDRESS OTHER
POTENTIALLY ABUSIVE TRADING ACTIVITY IN THE AMERICAN FUNDS.


                                       13

                                              The New Economy Fund / Prospectus
<PAGE>

SALES

Please contact your plan administrator or recordkeeper in order to sell shares
from your retirement plan.

If you notify American Funds Service Company, you may reinvest proceeds from a
redemption, dividend payment or capital gain distribution without a sales charge
in the same fund or other American Funds within 90 days after the date of the
redemption or distribution. Proceeds will be reinvested in the same share class
from which the original redemption or distribution was made. Redemption proceeds
of Class A shares representing direct purchases in American Funds money market
funds that are reinvested in non-money market American Funds will be subject to
a sales charge. Proceeds will be reinvested at the next calculated net asset
value after your request is received and accepted by American Funds Service
Company. You may not reinvest proceeds in the American Funds as described in
this paragraph if such proceeds are subject to a purchase block as described
under "Frequent trading of fund shares." This paragraph does not apply to
rollover investments as described under "Rollovers from retirement plans to
IRAs."

VALUING SHARES
The net asset value of each share class of the fund is the value of a single
share. The fund calculates the net asset value each day the New York Stock
Exchange is open for trading as of approximately 4:00 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, if events occur between the close of markets
outside the United States and the close of regular trading on the New York Stock
Exchange that, in the opinion of the investment adviser, materially affect the
value of any of the fund's securities that principally trade in those
international markets, those securities will be valued in accordance with fair
value procedures. Use of these procedures is intended to result in more
appropriate net asset values. In addition, such use will reduce, if not
eliminate, potential arbitrage opportunities otherwise available to short-term
investors.

Because the fund may hold securities that are primarily listed on foreign
exchanges that trade on weekends or days when the fund does not price its
shares, the value of securities held in the fund may change on days when you
will not be able to purchase or redeem fund shares.

Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request.


                                       14

The New Economy Fund / Prospectus


<PAGE>

Sales charges

CLASS A SHARES

The initial sales charge you pay each time you buy Class A shares differs
depending upon the amount you invest and may be reduced or eliminated for larger
purchases as indicated below. The "offering price," the price you pay to buy
shares, includes any applicable sales charge, which will be deducted directly
from your investment. Shares acquired through reinvestment of dividends or
capital gain distributions are not subject to an initial sales charge.



                              SALES CHARGE AS A
                                         PERCENTAGE OF:
                                                                 DEALER
                                                   NET         COMMISSION
                                       OFFERING   AMOUNT     AS A PERCENTAGE
 INVESTMENT                             PRICE    INVESTED   OF OFFERING PRICE
------------------------------------------------------------------------------

 Less than $25,000                      5.75%     6.10%           5.00%
------------------------------------------------------------------------------
 $25,000 but less than $50,000          5.00      5.26            4.25
------------------------------------------------------------------------------
 $50,000 but less than $100,000         4.50      4.71            3.75
------------------------------------------------------------------------------
 $100,000 but less than $250,000        3.50      3.63            2.75
------------------------------------------------------------------------------
 $250,000 but less than $500,000        2.50      2.56            2.00
------------------------------------------------------------------------------
 $500,000 but less than $750,000        2.00      2.04            1.60
------------------------------------------------------------------------------
 $750,000 but less than $1 million      1.50      1.52            1.20
------------------------------------------------------------------------------
 $1 million or more and certain other   none      none      see below
 investments described below
------------------------------------------------------------------------------



The sales charge, expressed as a percentage of the offering price or the net
amount invested, may be higher or lower than the percentages described in the
table above due to rounding. This is because the dollar amount of the sales
charge is determined by subtracting the net asset value of the shares purchased
from the offering price, which is calculated to two decimal places using
standard rounding criteria. The impact of rounding will vary with the size of
the investment and the net asset value of the shares.

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:
. investments made by accounts that are part of certain qualified fee-based
  programs and that purchased Class A shares before the discontinuation of your
  investment dealer's load-waived A share program with the American Funds; and


. certain rollover investments from retirement plans to IRAs (see "Rollovers
  from retirement plans to IRAs" below for more information).


                                       15

                                              The New Economy Fund / Prospectus
<PAGE>

The distributor may pay dealers up to 1% on investments made in Class A shares
with no initial sales charge. The fund may reimburse the distributor for these
payments through its plans of distribution (see "Plans of distribution" below).

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell American Funds, and employees of The Capital Group Companies.
Please see the statement of additional information for more information.

 EMPLOYER-SPONSORED RETIREMENT PLANS
 Employer-sponsored retirement plans that are eligible to purchase Class R
 shares may instead purchase Class A shares and pay the applicable Class A sales
 charge, provided their recordkeepers can properly apply a sales charge on plan
 investments. These plans are not eligible to make initial purchases of $1
 million or more in Class A shares and thereby invest in Class A shares without
 a sales charge, nor are they eligible to establish a statement of intention
 that qualifies them to purchase Class A shares without a sales charge. More
 information about statements of intention can be found under "Sales charge
 reductions." Plans investing in Class A shares with a sales charge may purchase
 additional Class A shares in accordance with the sales charge table above.

 Employer-sponsored retirement plans that invested in Class A shares without any
 sales charge on or before March 31, 2004, and that continue to meet the
 eligibility requirements in effect as of that date for purchasing Class A
 shares at net asset value, may continue to purchase Class A shares without any
 initial or contingent deferred sales charge.

CLASS R SHARES
Class R shares are sold without any initial or contingent deferred sales charge.
The distributor will pay dealers annually an asset-based compensation of up to
1.00% for sales of Class R-1 shares, up to .75% for Class R-2 shares, up to .50%
for Class R-3 shares and up to .25% for Class R-4 shares. No dealer compensation
is paid on sales of Class R-5 shares. The fund may reimburse the distributor for
these payments through its plans of distribution (see "Plans of distribution"
below).


                                       16

The New Economy Fund / Prospectus


<PAGE>

Sales charge reductions

TO RECEIVE A REDUCTION IN YOUR CLASS A INITIAL SALES CHARGE, YOU MUST LET YOUR
FINANCIAL ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW AT THE TIME YOU
PURCHASE SHARES THAT YOU QUALIFY FOR SUCH A REDUCTION. IF YOU DO NOT LET YOUR
ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW THAT YOU ARE ELIGIBLE FOR A
REDUCTION, YOU MAY NOT RECEIVE A SALES CHARGE DISCOUNT TO WHICH YOU ARE
OTHERWISE ENTITLED. In order to determine your eligibility to receive a sales
charge discount, it may be necessary for you to provide your adviser or American
Funds Service Company with information and records (including account
statements) of all relevant accounts invested in the American Funds.
IN ADDITION TO THE INFORMATION BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
SALES CHARGE REDUCTIONS THROUGH A LINK ON THE HOME PAGE OF THE AMERICAN FUNDS
WEBSITE AT AMERICANFUNDS.COM, FROM THE STATEMENT OF ADDITIONAL INFORMATION OR
FROM YOUR FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE
Consistent with the policies described in this prospectus, two or more
retirement plans of an employer or employer's affiliates may combine all of
their American Funds investments to reduce their Class A sales charge. However,
for this purpose, investments representing direct purchases of American Funds
money market funds are excluded. Following are different ways that you may
qualify for a reduced Class A sales charge:

 CONCURRENT PURCHASES

 Simultaneous purchases of any class of shares of two or more American Funds may
 be combined to qualify for a reduced Class A sales charge.

 RIGHTS OF ACCUMULATION

 You may take into account your accumulated holdings in all share classes of the
 American Funds to determine the initial sales charge you pay on each purchase
 of Class A shares. Subject to your investment dealer's or recordkeeper's
 capabilities, your accumulated holdings will be calculated as the higher of (a)
 the current value of your existing holdings or (b) the amount you invested
 (excluding capital appreciation) less any withdrawals. Please see the statement
 of additional information for details. You should retain any records necessary
 to substantiate the historical amounts you have invested. The current value of
 existing investments in an American Legacy/(R)/ Retirement Investment Plan may
 also be taken into account to determine your Class A sales charge.

 STATEMENT OF INTENTION
 You may reduce your Class A sales charge by establishing a statement of
 intention. A statement of intention allows you to combine all purchases of all
 share classes of American Funds non-money market funds you intend to make over
 a 13-month period to determine the applicable sales charge; however, purchases
 made under a right of


                                       17

                                              The New Economy Fund / Prospectus
<PAGE>

 reinvestment, appreciation of your holdings, and reinvested dividends and
 capital gains do not count as purchases made during the statement period. The
 market value of your existing holdings eligible to be aggregated as of the day
 immediately before the start of the statement period may be credited toward
 satisfying the statement. A portion of your account may be held in escrow to
 cover additional Class A sales charges that may be due if your total purchases
 over the statement period do not qualify you for the applicable sales charge
 reduction. Employer-sponsored retirement plans may be restricted from
 establishing statements of intention. See "Sales charges" above for more
 information.

RIGHT OF REINVESTMENT
Please see the "Sales" section of "Purchase, exchange and sale of shares" above
for information on how to reinvest proceeds from a redemption, dividend payment
or capital gain distribution without a sales charge.


                                       18

The New Economy Fund / Prospectus


<PAGE>

Rollovers from retirement plans to IRAs
Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover. More information on Class B, C and F shares can be
found in the fund's prospectus for nonretirement plan shareholders. Rollovers
invested in Class A shares from retirement plans will be subject to applicable
sales charges. The following rollovers to Class A shares will be made without a
sales charge:

. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
  custodian; and
. rollovers to IRAs that are attributable to American Funds investments, if they
  meet the following requirements:

 -- the assets being rolled over were invested in American Funds at the time of
    distribution; and

 -- the rolled over assets are contributed to an American Funds IRA with Capital
    Bank and Trust Company as custodian.

IRA rollover assets that roll over without a sales charge as described above
will not be subject to a contingent deferred sales charge and investment dealers
will be compensated solely with an annual service fee that begins to accrue
immediately. IRA rollover assets invested in Class A shares that are not
attributable to American Funds investments, as well as future contributions to
the IRA, will be subject to sales charges and the terms and conditions generally
applicable to Class A share investments as described in the prospectus and
statement of additional information.





                                       19

                                              The New Economy Fund / Prospectus
<PAGE>

Plans of distribution
The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of trustees. The plans
provide for payments, based on annualized percentages of average daily net
assets, of up to .25% for Class A shares, up to 1.00% for Class R-1 and R-2
shares, up to .75% for Class R-3 shares and up to .50% for Class R-4 shares. For
all share classes, up to .25% of these expenses may be used to pay service fees
to qualified dealers for providing certain shareholder services. The amount
remaining for each share class may be used for distribution expenses.

The 12b-1 fees paid by the fund, as a percentage of average net assets, for the
previous fiscal year are indicated in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." Since these fees are paid out of the
fund's assets or income on an ongoing basis, over time they will increase the
cost and reduce the return of your investment.

Other compensation to dealers
American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 75 dealers (or their
affiliates) who have sold shares of the American Funds. The level of payments
made to a qualifying firm in any given year will vary and in no case would
exceed the sum of (a) .10% of the previous year's American Funds sales by that
dealer and (b) .02% of American Funds assets attributable to that dealer. For
calendar year 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the assets of the American Funds. Aggregate
payments may also change from year to year. A number of factors will be
considered in determining payments, including the qualifying dealer's sales,
assets and redemption rates, and the quality of the dealer's relationship with
American Funds Distributors. American Funds Distributors makes these payments to
help defray the costs incurred by qualifying dealers in connection with efforts
to educate financial advisers about the American Funds so that they can make
recommendations and provide services that are suitable and meet shareholder
needs. American Funds Distributors will, on an annual basis, determine the
advisability of continuing these payments. American Funds Distributors may also
pay expenses associated with meetings conducted by dealers outside the top 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.


                                       20

The New Economy Fund / Prospectus


<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS
The fund intends to distribute dividends to shareholders, usually in December.


Capital gains, if any, are usually distributed in December. When a dividend or
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.

All dividends and capital gain distributions paid to retirement plan
shareholders will be automatically reinvested.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

Dividends and capital gains distributed by the fund to tax-deferred retirement
plan accounts are not taxable currently.

TAXES ON TRANSACTIONS
Exchanges within a tax-deferred retirement plan account will not result in a
capital gain or loss for federal or state income tax purposes. With limited
exceptions, distributions from a retirement plan account are taxable as ordinary
income.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.


                                       21

                                              The New Economy Fund / Prospectus
<PAGE>


Financial highlights/1/

The Financial Highlights table is intended to help you understand the fund's
results for the past five fiscal years. Certain information reflects financial
results for a single share of a particular class. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the fund (assuming reinvestment of all dividends and capital gain
distributions). This information has been audited by Deloitte & Touche LLP,
whose report, along with the fund's financial statements, is included in the
statement of additional information, which is available upon request.


                                                  INCOME (LOSS) FROM INVESTMENT OPERATIONS/2/
                                                                      Net
                                                                     gains
                                                                    (losses)
                                         Net                     on securities                                Net
                                        asset         Net            (both                       Dividends   asset
                                       value,     investment        realized       Total from    (from net   value,
                                      beginning     income            and          investment    investment  end of    Total
                                      of period     (loss)        unrealized)      operations     income)    period  return/3/
--------------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 11/30/2006                  $22.98       $ .20           $ 3.38           $ 3.58        $(.15)    $26.41    15.65%
Year ended 11/30/2005                   20.27         .15             2.63             2.78         (.07)     22.98    13.79
Year ended 11/30/2004                   18.11         .06             2.11             2.17         (.01)     20.27    12.00
Year ended 11/30/2003                   14.94         .01             3.16             3.17           --      18.11    21.22
Year ended 11/30/2002                   18.01          --/5/         (3.07)           (3.07)          --      14.94   (17.05)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 11/30/2006                   22.47          --/5/          3.30             3.30         (.03)     25.74    14.72
Year ended 11/30/2005                   19.90        (.02 )           2.59             2.57           --      22.47    12.91
Year ended 11/30/2004                   17.92        (.08 )           2.06             1.98           --      19.90    11.05
Year ended 11/30/2003                   14.90        (.11 )           3.13             3.02           --      17.92    20.27
Period from 6/21/2002 to 11/30/2002     15.45        (.04 )           (.51)            (.55)          --      14.90    (3.56)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 11/30/2006                   22.47         .01             3.30             3.31         (.01)     25.77    14.74
Year ended 11/30/2005                   19.90        (.01 )           2.58             2.57           --      22.47    12.91
Year ended 11/30/2004                   17.92        (.08 )           2.06             1.98           --      19.90    11.05
Year ended 11/30/2003                   14.88        (.11 )           3.15             3.04           --      17.92    20.43
 Period from 5/31/2002 to 11/30/2002    17.02        (.05 )          (2.09)           (2.14)          --      14.88   (12.57)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 11/30/2006                  $22.75       $ .10           $ 3.34           $ 3.44        $(.08)    $26.11    15.18%
Year ended 11/30/2005                   20.10         .07             2.61             2.68         (.03)     22.75    13.35
Year ended 11/30/2004                   18.03          --/5/          2.07             2.07           --      20.10    11.48
Year ended 11/30/2003                   14.92        (.05 )           3.16             3.11           --      18.03    20.84
 Period from 6/25/2002 to 11/30/2002    15.26        (.02 )           (.32)            (.34)          --      14.92    (2.23)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 11/30/2006                   22.94         .19             3.37             3.56         (.16)     26.34    15.61
Year ended 11/30/2005                   20.25         .15             2.63             2.78         (.09)     22.94    13.76
Year ended 11/30/2004                   18.12         .07             2.09             2.16         (.03)     20.25    11.92
Year ended 11/30/2003                   14.94         .01             3.17             3.18           --      18.12    21.28
 Period from 7/25/2002 to 11/30/2002    12.85        (.01 )           2.10             2.09           --      14.94    16.26
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 11/30/2006                   23.10         .27             3.38             3.65         (.21)     26.54    15.94
Year ended 11/30/2005                   20.37         .21             2.65             2.86         (.13)     23.10    14.14
Year ended 11/30/2004                   18.21         .12             2.10             2.22         (.06)     20.37    12.26
Year ended 11/30/2003                   14.97         .06             3.18             3.24           --      18.21    21.64
 Period from 5/15/2002 to 11/30/2002    17.58         .03            (2.64)           (2.61)          --      14.97   (14.85)


                                                   Ratio of     Ratio of      Ratio
                                                   expenses     expenses      of net
                                                  to average   to average     income
                                         Net      net assets   net assets     (loss)
                                       assets,      before        after         to
                                        end of       reim-        reim-      average
                                      period (in  bursements/  bursements/     net
                                      millions)     waivers    waivers/4/     assets
--------------------------------------------------------------------------------------

CLASS A:
Year ended 11/30/2006                  $7,654        .82 %        .78 %       .83 %
Year ended 11/30/2005                   7,061        .83          .79         .73
Year ended 11/30/2004                   6,938        .84          .84         .32
Year ended 11/30/2003                   6,671        .89          .89         .09
Year ended 11/30/2002                   5,883        .89          .89        (.01 )
--------------------------------------------------------------------------------------
CLASS R-1:
Year ended 11/30/2006                       8       1.64         1.58         .01
Year ended 11/30/2005                       4       1.70         1.61        (.09 )
Year ended 11/30/2004                       2       1.76         1.65        (.44 )
Year ended 11/30/2003                       1       1.96         1.66        (.69 )
Period from 6/21/2002 to 11/30/2002        --/6/    1.43          .73        (.28 )
--------------------------------------------------------------------------------------
CLASS R-2:
Year ended 11/30/2006                      85       1.81         1.58         .04
Year ended 11/30/2005                      61       1.91         1.58        (.05 )
Year ended 11/30/2004                      44       2.03         1.61        (.40 )
Year ended 11/30/2003                      21       2.35         1.62        (.68 )
 Period from 5/31/2002 to 11/30/2002        3       2.00/7/      1.63/7/     (.78 )/7/
--------------------------------------------------------------------------------------
CLASS R-3:
Year ended 11/30/2006                  $   76       1.22 %       1.18 %       .44 %
Year ended 11/30/2005                      50       1.24         1.19         .33
Year ended 11/30/2004                      35       1.26         1.23        (.02 )
Year ended 11/30/2003                      17       1.37         1.24        (.29 )
 Period from 6/25/2002 to 11/30/2002        2        .61          .54        (.12 )
--------------------------------------------------------------------------------------
CLASS R-4:
Year ended 11/30/2006                      40        .86          .82         .79
Year ended 11/30/2005                      31        .86          .82         .70
Year ended 11/30/2004                      17        .86          .85         .34
Year ended 11/30/2003                      10        .88          .88         .09
 Period from 7/25/2002 to 11/30/2002        4        .33          .31        (.03 )
--------------------------------------------------------------------------------------
CLASS R-5:
Year ended 11/30/2006                     109        .55          .51        1.10
Year ended 11/30/2005                      76        .55          .52        1.02
Year ended 11/30/2004                      51        .55          .55         .62
Year ended 11/30/2003                      44        .56          .56         .41
 Period from 5/15/2002 to 11/30/2002       31        .56/7/       .56/7/      .44/7/






                                       22


The New Economy Fund / Prospectus


<PAGE>


                                          YEAR ENDED NOVEMBER 30
                           2006        2005        2004        2003         2002
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
RATE FOR ALL CLASSES       41%         32%         35%         38%          37%
OF SHARES



/1/ Based on operations for the periods shown (unless otherwise noted) and,
    accordingly, may not be representative of a full year.
/2/ Based on average shares outstanding.
/3/ Total returns exclude all sales charges.
/4/ The ratios in this column reflect the impact, if any, of certain
    reimbursements/waivers from Capital Research and Management Company. See the
    Annual Fund Operating Expenses table under "Fees and expenses of the fund" in
    this prospectus and the fund's annual report for more information.
/5/ Amount less than $.01.
/6/ Amount less than $1 million.
/7/ Annualized.
                                              The New Economy Fund / Prospectus


                                       23

<PAGE>

NOTES


                                       24

The New Economy Fund / Prospectus


<PAGE>

NOTES


                                       25

                                              The New Economy Fund / Prospectus
<PAGE>

NOTES


                                       26

The New Economy Fund / Prospectus


<PAGE>

NOTES


                                       27

                                              The New Economy Fund / Prospectus
<PAGE>



[Logo - American Funds/R/]                The right choice for the long term/(R)/





FOR SHAREHOLDER SERVICES          American Funds Service Company
                                  800/421-0180
FOR RETIREMENT PLAN SERVICES      Call your employer or plan administrator
FOR DEALER SERVICES               American Funds Distributors
                                  800/421-9900
                                  americanfunds.com
FOR 24-HOUR INFORMATION           For Class R share information,visit
                                  AmericanFundsRetirement.com

Telephone calls you have with the American Funds organization may be monitored or
recorded for quality assurance, verification and/or recordkeeping purposes. By speaking
with us on the telephone, you are giving your consent to such monitoring and recording.
------------------------------------------------------------------------------------------



MULTIPLE TRANSLATIONS  This prospectus may be translated into other languages.
If there is any inconsistency or ambiguity as to the meaning of any word or
phrase in a translation, the English text will prevail.

ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS  The shareholder reports contain
additional information about the fund, including financial statements,
investment results, portfolio holdings, a discussion of market conditions and
the fund's investment strategies, and the independent registered public
accounting firm's report (in the annual report).

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information on all aspects
of the fund, including the fund's financial statements, and is incorporated by
reference into this prospectus. This means that the current SAI, for legal
purposes, is part of this prospectus. The codes of ethics describe the personal
investing policies adopted by the fund, the fund's investment adviser and its
affiliated companies.
The codes of ethics and current SAI are on file with the Securities and Exchange
Commission (SEC). These and other related materials about the fund are available
for review or to be copied at the SEC's Public Reference Room in Washington, DC
(202/551-8090) or on the EDGAR database on the SEC's website at sec.gov or,
after payment of a duplicating fee, via e-mail request to publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, 100 F Street, NE, Washington,
DC 20549. The current SAI and shareholder reports are also available, free of
charge, on americanfunds.com.

HOUSEHOLD MAILINGS Each year you are automatically sent an updated prospectus
and annual and semi-annual reports for the fund. You may also occasionally
receive proxy statements for the fund. In order to reduce the volume of mail you
receive, when possible, only one copy of these documents will be sent to
shareholders who are part of the same family and share the same household
address.

If you would like to opt out of household-based mailings or receive a
complimentary copy of the current SAI, codes of ethics or annual/semi-annual
report to shareholders, please call American Funds Service Company at
800/421-0180 or write to the Secretary of the fund at 333 South Hope Street, Los
Angeles, California 90071.


[Logo - recycle bug]







Printed on recycled paper
RPGEPR-914-0207P Litho in USA CGD/B/8039            Investment Company File No. 811-03735
--------------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds        Capital Research and Management       Capital International
           Capital Guardian                  Capital Bank and Trust





<PAGE>









THE FUND PROVIDES SPANISH TRANSLATION IN CONNECTION WITH THE
PUBLIC OFFERING AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR
AND ACCURATE ENGLISH TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS
FOR THE FUND.

/s/ CHAD L. NORTON
    CHAD L. NORTON
    SECRETARY







<PAGE>





[Logo - American Funds/R/]                The right choice for the long term/(R)/




 The New Economy Fund/(R)/



 RETIREMENT PLAN
 PROSPECTUS




 February 1, 2007










TABLE OF CONTENTS

 1    Risk/Return summary
 4    Fees and expenses of the fund
 6    Investment objective, strategies and risks
 9    Management and organization
12    Purchase, exchange and sale of shares
15    Sales charges
17    Sales charge reductions
19    Rollovers from retirement plans to IRAs
20    Plans of distribution
20    Other compensation to dealers
21    Distributions and taxes
22    Financial highlights





 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
 THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS
 ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
 OFFENSE.


<PAGE>


[This page intentionally left blank for this filing.]


<PAGE>

Risk/Return summary

The fund seeks to make your investment grow over time by investing primarily in
stocks of companies in the services and information areas of the global economy.

The fund is designed for investors seeking greater capital appreciation through
investments in stocks of issuers based around the world.  Investors in the fund
should have a long-term perspective and be able to tolerate potentially wide
price fluctuations.
Your investment in the fund is subject to risks, including the possibility that
the value of the fund's portfolio holdings may fluctuate in response to events
specific to the companies or markets in which the fund invests, as well as
economic, political or social events in the United States or abroad. The fund
may be subject to additional risks because it invests in a more limited group of
sectors and industries than the broad market.

Although all securities in the fund's portfolio may be adversely affected by
currency fluctuations or global economic, political or social instability,
securities issued by entities based outside the United States may be affected to
a greater extent.

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.


                                       1

                                              The New Economy Fund / Prospectus
<PAGE>

HISTORICAL INVESTMENT RESULTS
The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 3 shows how the fund's
average annual total returns for various periods compare with different broad
measures of market performance. This information provides some indication of the
risks of investing in the fund. All fund results reflect the reinvestment of
dividends and capital gain distributions, if any. Unless otherwise noted, fund
results reflect any fee waivers and/or expense reimbursements in effect during
the period presented. Past results are not predictive of future results.


CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

'97  28.85%
'98  28.84
'99  45.88
'00 -16.20
'01 -17.34
'02 -26.01
'03  38.71
'04  12.45
'05  12.17
'06  14.73

[end bar chart]




Highest/Lowest quarterly results during this time period were:




HIGHEST                   27.14%  (quarter ended December 31, 1999)
LOWEST                   -25.23%  (quarter ended September 30, 2001)






                                       2

The New Economy Fund / Prospectus


<PAGE>



Unlike the bar chart on the previous page, the Investment Results table below
reflects, as required by Securities and Exchange Commission rules, the fund's
investment results with the following maximum initial sales charge imposed:

 . Class A share results reflect the maximum initial sales charge of 5.75%. This
   charge is reduced for purchases of $25,000 or more and eliminated for
   purchases of $1 million or more.

 . Class R shares are sold without any initial sales charge.

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 7 reflects the fund's results calculated without a sales charge.
 INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                 1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
-------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 12/1/83   8.13%    6.95%    8.91%       12.24%



                                  1 YEAR   LIFETIME/1/
-------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/21/02  13.79%     12.40%
 CLASS R-2 -- FIRST SOLD 5/31/02  13.80       9.89
 CLASS R-3 -- FIRST SOLD 6/25/02  14.26      13.19
 CLASS R-4 -- FIRST SOLD 7/25/02  14.66      18.38
 CLASS R-5 -- FIRST SOLD 5/15/02  15.03      10.19



                                       1 YEAR  5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 INDEXES
 S&P 500/3/                            15.78%   6.19%     8.42%      12.56%
 Lipper Multi-Cap Growth Funds          9.21    4.73      6.41       10.63
 Index/4/
 Global Service and Information        17.32    7.74      8.13         N/A
 Index/5/
 Russell 2500/TM/ Index/6/             16.17   12.19     11.26       12.38



/1/ Lifetime results for each share class are measured from the date the share
    class was first sold.
/2/ Lifetime results for the index(es) shown are measured from the date Class A
    shares were first sold. In prior years, each index may have included different
    funds or securities from those that constitute the current year's index.
/3/ Standard & Poor's 500 Composite Index is a market capitalization-weighted
    index based on the average weighted performance of 500 widely held common
    stocks. This index is unmanaged and includes reinvested dividends and/or
    distributions, but does not reflect sales charges, commissions, expenses or
    taxes.
/4/ Lipper Multi-Cap Growth Funds Index is an equally weighted index of funds that
    invest in a variety of market capitalization ranges without concentrating 75%
    of their equity assets in any one market capitalization range over an extended
    period of time. Multi-cap growth funds typically have an above-average
    price-to-earnings ratio, price-to-book ratio and three-year sales-per-share
    growth value, compared to the S&P SuperComposite 1500 Index. The results of the
    underlying funds in the index include the reinvestment of dividends and capital
    gain distributions, as well as brokerage commissions paid by the funds for
    portfolio transactions, but do not reflect sales charges or taxes.
/5/ Global Service and Information Index is a subset of the unmanaged MSCI World
    Index, which is a market-capitalization-weighted index that measures the
    returns of companies in 23 developed countries. This subset is 70%
    U.S.-weighted and consists specifically of companies in the service and
    information industries that together represent approximately 60% of the MSCI
    World Index. The index is compiled by Capital Research and Management Company,
    is unmanaged, and includes reinvested dividends and/or distributions, but does
    not reflect sales charges, commissions, expenses or taxes.
/6/ Russell 2500 Index tracks U.S. small and medium capitalization stocks. This
    index is unmanaged and includes reinvested dividends and/or distributions, but
    does not reflect sales charges, commissions, expenses or taxes.


                                       3

                                              The New Economy Fund / Prospectus
<PAGE>

Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.



 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
                                               CLASS A    ALL R SHARE CLASSES
------------------------------------------------------------------------------

 Maximum initial sales charge on purchases      5.75%/*/         none
 (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum sales charge on reinvested dividends    none            none
------------------------------------------------------------------------------
 Maximum contingent deferred sales charge        none            none
------------------------------------------------------------------------------
 Redemption or exchange fees                     none            none



* The initial sales charge is reduced for purchases of $25,000 or more and
 eliminated for purchases of $1 million or more.




 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
                                            CLASS  CLASS  CLASS  CLASS   CLASS
                                   CLASS A   R-1    R-2    R-3    R-4     R-5
-------------------------------------------------------------------------------

 Management fees/1/                 0.41%   0.41%  0.41%  0.41%  0.41%   0.41%
-------------------------------------------------------------------------------
 Distribution and/or service        0.24    1.00   0.75   0.50   0.25    none
 (12b-1) fees/2/
-------------------------------------------------------------------------------
 Other expenses                     0.17    0.23   0.65   0.31   0.20    0.14
-------------------------------------------------------------------------------
 Total annual fund operating        0.82    1.64   1.81   1.22   0.86    0.55
 expenses/1/
-------------------------------------------------------------------------------


/1/ The fund's investment adviser is currently waiving 10% of its management fee.
    The waiver may be discontinued at any time in consultation with the fund's
    board, but it is expected to continue at this level until further review. The
    fund's investment adviser and board intend to review the waiver as
    circumstances warrant. In addition, the investment adviser paid a portion of
    the fund's transfer agent fees for certain R share classes. Expenses shown
    above do not reflect any waiver or reimbursement. Information regarding the
    effect of any waiver/reimbursement on total annual fund operating expenses can
    be found in the Financial Highlights table in this prospectus and in the fund's
    annual report.
/2/ Class A, R-1, R-2, R-3 and R-4 12b-1 fees may not exceed .25%, 1.00%, 1.00%,
    .75% and .50%, respectively, of the class' average net assets annually.


                                       4

The New Economy Fund / Prospectus


<PAGE>

OTHER EXPENSES
The "Other expenses" items in the table above include custodial, legal, transfer
agent and subtransfer agent/recordkeeping payments, as well as various other
expenses. Subtransfer agent/recordkeeping payments may be made to the fund's
investment adviser, affiliates of the adviser and unaffiliated third parties for
providing recordkeeping and other administrative services to retirement plans
invested in the fund in lieu of the transfer agent providing such services. The
amount paid for subtransfer agent/recordkeeping services will vary depending on
the share class selected and the entity receiving the payments. The table below
shows the maximum payments to entities providing services to retirement plans.


             PAYMENTS TO AFFILIATED ENTITIES       PAYMENTS TO UNAFFILIATED
-----------------------------------------------            ENTITIES
                                               --------------------------------

 Class A            .05% of assets or                  .05% of assets or
             $12 per participant position/1/    $12 per participant position/1/
-------------------------------------------------------------------------------
 Class R-1           .10% of assets                     .10% of assets
-------------------------------------------------------------------------------
 Class R-2     .15% of assets plus $27 per              .25% of assets
             participant position/2/ or .35%
                      of assets/3/
-------------------------------------------------------------------------------
 Class R-3     .10% of assets plus $12 per              .15% of assets
             participant position/2/ or .19%
                      of assets/3/
 Class R-4           .10% of assets                     .10% of assets
-------------------------------------------------------------------------------
 Class R-5           .05% of assets                     .05% of assets
-------------------------------------------------------------------------------




/1/ Payment amount depends on the date upon which services commenced.
/2/ Payment with respect to Recordkeeper Direct/(R)/ program.
/3/ Payment with respect to PlanPremier/(R)/ program.

EXAMPLES

The examples below are intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The examples do not reflect the impact of any fee waivers
or expense reimbursements.

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:




                               1 YEAR  3 YEARS  5 YEARS   10 YEARS
-------------------------------------------------------------------

 Class A*                       $654    $822    $1,004     $1,530
-------------------------------------------------------------------
 Class R-1                       167     517       892      1,944
-------------------------------------------------------------------
 Class R-2                       184     569       980      2,127
-------------------------------------------------------------------
 Class R-3                       124     387       670      1,477
-------------------------------------------------------------------
 Class R-4                        88     274       477      1,061
-------------------------------------------------------------------
 Class R-5                        56     176       307        689
-------------------------------------------------------------------



* Reflects the maximum initial sales charge in the first year.


                                       5

                                              The New Economy Fund / Prospectus
<PAGE>

Investment objective, strategies and risks

The fund seeks to provide you with long-term growth of capital. It invests
primarily in stocks of companies in the services and information areas of the
global economy, although a portion of its assets may be invested outside these
areas. Companies in the services and information areas include, for example,
those involved in the fields of telecommunications, computer systems and
software, the Internet, broadcasting and publishing, health care, advertising,
leisure, tourism, financial services, distribution and transportation. Providing
you with current income is a secondary consideration.
The prices of securities held by the fund may decline in response to certain
events, including those directly involving the companies whose securities are
owned by the fund; conditions affecting the general economy; overall market
changes; local, regional or global political, social or economic instability;
and currency, interest rate and commodity price fluctuations. The
growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss, particularly in the case of
smaller capitalization stocks. Because the fund generally invests in securities
of issuers in the services and information areas, it may be more susceptible to
factors adversely affecting these issuers than funds that do not focus on these
areas.

Investments in securities issued by entities based outside the United States may
be subject to the risks described above to a greater extent and may also be
affected by currency controls; different accounting, auditing, financial
reporting, and legal standards and practices in some countries; expropriation;
changes in tax policy; greater market volatility; differing securities market
structures; higher transaction costs; and various administrative difficulties,
such as delays in clearing and settling portfolio transactions or in receiving
payment of dividends. These risks may be heightened in connection with
investments in developing countries.

The fund may also hold cash or money market instruments. The percentage of the
fund invested in such holdings varies and depends on various factors, including
market conditions and purchases and redemptions of fund shares. A larger
percentage of such holdings could moderate the fund's investment results in a
period of rising market prices.

A larger percentage of cash or money market instruments could reduce the
magnitude of the fund's loss in the event of falling market prices and provide
liquidity to make additional investments or to meet redemptions.

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively valued
companies that, in its opinion, represent above-average long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is through fundamental analysis, which may include meeting with
company executives and employees, suppliers, customers and competitors.
Securities may be sold when the investment adviser believes that they no longer
represent relatively attractive investment opportunities.


                                       6

The New Economy Fund / Prospectus


<PAGE>

ADDITIONAL INVESTMENT RESULTS
Unlike the Investment Results table on page 3, the table below reflects the
fund's results calculated without a sales charge.
 ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                 1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
-------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 12/1/83   14.73%   8.23%    9.56%       12.53%



                                  1 YEAR   LIFETIME/1/
-------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/21/02  13.79%     12.40%
 CLASS R-2 -- FIRST SOLD 5/31/02  13.80       9.89
 CLASS R-3 -- FIRST SOLD 6/25/02  14.26      13.19
 CLASS R-4 -- FIRST SOLD 7/25/02  14.66      18.38
 CLASS R-5 -- FIRST SOLD 5/15/02  15.03      10.19



                                       1 YEAR  5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 INDEXES
 S&P 500/3/                            15.78%   6.19%     8.42%      12.56%
 Lipper Multi-Cap Growth Funds          9.21    4.73      6.41       10.63
 Index/4/
 Global Service and Information        17.32    7.74      8.13         N/A
 Index/5/
 Russell 2500 Index/6/                 16.17   12.19     11.26       12.38



/1/ Lifetime results for each share class are measured from the date the share
    class was first sold.
/2/ Lifetime results for the index(es) shown are measured from the date Class A
    shares were first sold. In prior years, each index may have included different
    funds or securities from those that constitute the current year's index.
/3/ Standard & Poor's 500 Composite Index is a market capitalization-weighted
    index based on the average weighted performance of 500 widely held common
    stocks. This index is unmanaged and includes reinvested dividends and/or
    distributions, but does not reflect sales charges, commissions, expenses or
    taxes.
/4/ Lipper Multi-Cap Growth Funds Index is an equally weighted index of funds that
    invest in a variety of market capitalization ranges without concentrating 75%
    of their equity assets in any one market capitalization range over an extended
    period of time. Multi-cap growth funds typically have an above-average
    price-to-earnings ratio, price-to-book ratio and three-year sales-per-share
    growth value, compared to the S&P SuperComposite 1500 Index. The results of the
    underlying funds in the index include the reinvestment of dividends and capital
    gain distributions, as well as brokerage commissions paid by the funds for
    portfolio transactions, but do not reflect sales charges or taxes.
/5/ Global Service and Information Index is a subset of the unmanaged MSCI World
    Index, which is a market-capitalization-weighted index that measures the
    returns of companies in 23 developed countries. This subset is 70%
    U.S.-weighted and consists specifically of companies in the service and
    information industries that together represent approximately 60% of the MSCI
    World Index. The index is compiled by Capital Research and Management Company,
    is unmanaged, and includes reinvested dividends and/or distributions, but does
    not reflect sales charges, commissions, expenses or taxes.
/6/ Russell 2500 Index tracks U.S. small and medium capitalization stocks. This
    index is unmanaged and includes reinvested dividends and/or distributions, but
    does not reflect sales charges, commissions, expenses or taxes.


                                       7

                                              The New Economy Fund / Prospectus
<PAGE>
[pie chart]

INDUSTRY GROUP DIVERSIFICATION AS OF NOVEMBER 30, 2006 (percent of net assets)


13.87%  Banks
12.70   Software & services
 8.55   Retailing
 6.52   Semiconductors & semiconductor equipment
 6.51   Health care equipment & services
46.98   Other industries
 4.87   Short-term securities & other assets less liabilities

[end pie chart]




Because the fund is actively managed, its holdings will change over time.

For updated information on the fund's portfolio holdings, please visit us at
americanfunds.com.




                                       8

The New Economy Fund / Prospectus


<PAGE>

Management and organization

INVESTMENT ADVISER
Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including the American Funds. Capital Research and Management Company is
a wholly owned subsidiary of The Capital Group Companies, Inc. and is located at
333 South Hope Street, Los Angeles, California 90071, and 135 South State
College Boulevard, Brea, California 92821. Capital Research and Management
Company manages the investment portfolio and business affairs of the fund. The
total management fee paid by the fund, as a percentage of average net assets,
for the previous fiscal year appears in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." A discussion regarding the basis for the
approval of the fund's investment advisory and service agreement by the fund's
board of trustees is contained in the fund's annual report to shareholders for
the fiscal year ended November 30, 2006.

EXECUTION OF PORTFOLIO TRANSACTIONS
The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. The investment adviser strives to obtain best execution
for the fund's portfolio transactions, taking into account a variety of factors
to produce the most favorable total price reasonably attainable under the
circumstances. These factors include the size and type of transaction, the cost
and quality of executions, and the broker-dealer's ability to offer liquidity
and anonymity. For example, with respect to equity transactions, the fund does
not consider the investment adviser as having an obligation to obtain the lowest
available commission rate to the exclusion of price, service and qualitative
considerations. Subject to the considerations outlined above, the investment
adviser may place orders for the fund's portfolio transactions with
broker-dealers who have sold shares of funds managed by the investment adviser,
or who have provided investment research, statistical or other related services
to the investment adviser. In placing orders for the fund's portfolio
transactions, the investment adviser does not commit to any specific amount of
business with any particular broker-dealer. Subject to best execution, the
investment adviser may consider investment research, statistical or other
related services provided to the adviser in placing orders for the fund's
portfolio transactions. However, when the investment adviser places orders for
the fund's portfolio transactions, it does not give any consideration to whether
a broker-dealer has sold shares of the funds managed by the investment adviser.


PORTFOLIO HOLDINGS
Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the lower
portion of the fund's details page on the website. A list of the fund's top 10
equity holdings, updated as of each month-end, is generally posted to this page
within 14 days after the end of the applicable month.


                                       9

                                              The New Economy Fund / Prospectus
<PAGE>

A link to the fund's complete list of publicly disclosed portfolio holdings,
updated as of each calendar quarter-end, is generally posted to this page within
45 days after the end of the applicable quarter. Both lists remain available on
the website until new information for the next month or quarter is posted.
Portfolio holdings information for the fund is also contained in reports filed
with the Securities and Exchange Commission.

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM
Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
decide how their respective segments will be invested. In addition, Capital
Research and Management Company's investment analysts may make investment
decisions with respect to a portion of a fund's portfolio. Investment decisions
are subject to a fund's objective(s), policies and restrictions and the
oversight of the appropriate investment-related committees of Capital Research
and Management Company.

The primary individual portfolio counselors for The New Economy Fund are:

                                             PRIMARY TITLE WITH                PORTFOLIO
                            PORTFOLIO        INVESTMENT ADVISER                COUNSELOR'S
 PORTFOLIO COUNSELOR/       COUNSELOR        (OR AFFILIATE)                    ROLE IN
 FUND TITLE                 EXPERIENCE       AND INVESTMENT                    MANAGEMENT
 (IF APPLICABLE)           IN THIS FUND      EXPERIENCE                        OF THE FUND

 GORDON CRAWFORD             13 years        Senior Vice President, Capital    Serves as a global
 Vice Chairman of        (plus 5 years of    Research and Management Company   equity portfolio
 the Board               prior experience                                      counselor
                              as an          Investment professional for 36
                        investment analyst   years, all with Capital
                          for the fund)      Research and Management Company
                                             or affiliate

 TIMOTHY D. ARMOUR           16 years        President and Director, Capital   Serves as a global
 President and Trustee   (plus 5 years of    Research and Management Company   equity portfolio
                         prior experience                                      counselor
                              as an          Investment professional for 24
                        investment analyst   years, all with Capital
                          for the fund)      Research and Management Company
                                             or affiliate

 MARK E. DENNING             5 years         Director, Capital Research and    Serves as a global
 Senior Vice President   (plus 9 years of    Management Company                equity portfolio
                         prior experience                                      counselor
                              as an          Investment professional for 25
                        investment analyst   years, all with Capital
                          for the fund)      Research and Management Company
                                             or affiliate
 CLAUDIA P. HUNTINGTON       12 years        Senior Vice President, Capital    Serves as a global
 Senior Vice President  (plus 11 years of    Research and Management Company   equity portfolio
                         prior experience                                      counselor
                              as an          Investment professional for 34
                        investment analyst   years in total; 32 years with
                          for the fund)      Capital Research and Management
                                             Company or affiliate







                                       10

The New Economy Fund / Prospectus


<PAGE>

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage can be found in the
statement of additional information.

CERTAIN PRIVILEGES AND/OR SERVICES DESCRIBED ON THE FOLLOWING PAGES OF THIS
PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION MAY NOT BE AVAILABLE
TO YOU DEPENDING ON YOUR INVESTMENT DEALER OR RETIREMENT PLAN RECORDKEEPER.
PLEASE SEE YOUR FINANCIAL ADVISER, INVESTMENT DEALER OR PLAN RECORDKEEPER FOR
MORE INFORMATION.


                                       11

                                              The New Economy Fund / Prospectus
<PAGE>

Purchase, exchange and sale of shares

AMERICAN FUNDS SERVICE COMPANY, THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND
AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S DISTRIBUTOR, IS REQUIRED BY LAW TO
OBTAIN CERTAIN PERSONAL INFORMATION FROM YOU OR ANY OTHER PERSON(S) ACTING ON
YOUR BEHALF IN ORDER TO VERIFY YOUR OR SUCH PERSON'S IDENTITY. IF YOU DO NOT
PROVIDE THE INFORMATION, THE TRANSFER AGENT MAY NOT BE ABLE TO OPEN YOUR
ACCOUNT. IF THE TRANSFER AGENT IS UNABLE TO VERIFY YOUR IDENTITY OR THAT OF ANY
OTHER PERSON(S) AUTHORIZED TO ACT ON YOUR BEHALF, OR BELIEVES IT HAS IDENTIFIED
POTENTIALLY CRIMINAL ACTIVITY, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE
THE RIGHT TO CLOSE YOUR ACCOUNT OR TAKE SUCH OTHER ACTION THEY DEEM REASONABLE
OR REQUIRED BY LAW.

PURCHASES AND EXCHANGES

Eligible retirement plans generally may open an account and purchase Class A or
R shares by contacting any investment dealer (who may impose transaction charges
in addition to those described in this prospectus) authorized to sell the fund's
shares. Some or all R share classes may not be available through certain
investment dealers. Additional shares may be purchased through a plan's
administrator or recordkeeper.

Class A shares are generally not available for retirement plans using the
PlanPremier or Recordkeeper Direct recordkeeping programs.
Class R shares generally are available only to 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit-sharing and money purchase pension
plans, defined benefit plans and nonqualified deferred compensation plans. Class
R shares also are generally available only to retirement plans where plan level
or omnibus accounts are held on the books of the fund. Class R-5 shares
generally are available only to retirement plans with $1 million or more in plan
assets. In addition, Class R-5 shares are available for investment by American
Funds Target Date Retirement Series. Class R shares generally are not available
to retail nonretirement accounts, traditional and Roth Individual Retirement
Accounts (IRAs), Coverdell Education Savings Accounts, SEPs, SARSEPs, SIMPLE
IRAs, individual 403(b) plans and 529 college savings plans.

Shares of the fund offered through this prospectus generally may be exchanged
into shares of the same class of other American Funds. Exchanges of Class A
shares from American Funds money market funds purchased without a sales charge
generally will be subject to the appropriate sales charge.

FREQUENT TRADING OF FUND SHARES
The fund and American Funds Distributors reserve the right to reject any
purchase order for any reason. The fund is not designed to serve as a vehicle
for frequent trading. Frequent trading of fund shares may lead to increased
costs to the fund and less efficient management of the fund's portfolio,
resulting in dilution of the value of the shares held by long-term shareholders.
Accordingly, purchases, including those that are part of exchange


                                       12

The New Economy Fund / Prospectus


<PAGE>

activity, that the fund or American Funds Distributors has determined could
involve actual or potential harm to the fund may be rejected.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of trustees has also adopted certain
policies and procedures with respect to frequent purchases and redemptions of
fund shares. Under the fund's "purchase blocking policy," any shareholder
redeeming shares (including redemptions that are part of an exchange
transaction) having a value of $5,000 or more from the fund will be precluded
from investing in the fund (including investments that are part of an exchange
transaction) for 30 calendar days after the redemption transaction. This
prohibition will not apply to redemptions by shareholders whose shares are held
on the books of third-party intermediaries (such as investment dealers holding
shareholder accounts in street name, retirement plan recordkeepers, insurance
company separate accounts and bank trust companies) that have not adopted
procedures to implement this policy. American Funds Service Company will work
with intermediaries to develop such procedures or other procedures that American
Funds Service Company determines are reasonably designed to achieve the
objective of the purchase blocking policy. At the time the intermediaries adopt
these procedures, shareholders whose accounts are on the books of such
intermediaries will be subject to this purchase blocking policy or another
frequent trading policy that is reasonably designed to achieve the objective of
the purchase blocking policy. Shareholders should refer to disclosures provided
by the intermediaries with which they have an account to determine the specific
trading restrictions that apply to the shareholder. There is no guarantee that
all instances of frequent trading in fund shares will be prevented.

Under the fund's purchase blocking policy, certain purchases will not be
prevented and certain redemptions will not trigger a purchase block, such as:
systematic redemptions and purchases where the entity maintaining the
shareholder account is able to identify the transaction as a systematic
redemption or purchase; purchases and redemptions of shares having a value of
less than $5,000; transactions in Class 529 shares; purchases and redemptions
resulting from reallocations by American Funds Target Date Retirement Series;
retirement plan contributions, loans and distributions (including hardship
withdrawals) identified as such on the retirement plan recordkeeper's system;
and purchase transactions involving transfers of assets, rollovers, Roth IRA
conversions and IRA recharacterizations, where the entity maintaining the
shareholder account is able to identify the transaction as one of these types of
transactions.

NOTWITHSTANDING THE FUND'S PURCHASE BLOCKING POLICY, ALL TRANSACTIONS IN FUND
SHARES REMAIN SUBJECT TO THE FUND'S AND AMERICAN FUNDS DISTRIBUTORS' RIGHT TO
RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY (INCLUDING THE TYPES OF
TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED OR TRIGGER A PURCHASE
BLOCK UNDER THE POLICY). SEE THE STATEMENT OF ADDITIONAL INFORMATION FOR MORE
INFORMATION ABOUT HOW AMERICAN FUNDS SERVICE COMPANY MAY ADDRESS OTHER
POTENTIALLY ABUSIVE TRADING ACTIVITY IN THE AMERICAN FUNDS.


                                       13

                                              The New Economy Fund / Prospectus
<PAGE>

SALES

Please contact your plan administrator or recordkeeper in order to sell shares
from your retirement plan.

If you notify American Funds Service Company, you may reinvest proceeds from a
redemption, dividend payment or capital gain distribution without a sales charge
in the same fund or other American Funds within 90 days after the date of the
redemption or distribution. Proceeds will be reinvested in the same share class
from which the original redemption or distribution was made. Redemption proceeds
of Class A shares representing direct purchases in American Funds money market
funds that are reinvested in non-money market American Funds will be subject to
a sales charge. Proceeds will be reinvested at the next calculated net asset
value after your request is received and accepted by American Funds Service
Company. You may not reinvest proceeds in the American Funds as described in
this paragraph if such proceeds are subject to a purchase block as described
under "Frequent trading of fund shares." This paragraph does not apply to
rollover investments as described under "Rollovers from retirement plans to
IRAs."

VALUING SHARES
The net asset value of each share class of the fund is the value of a single
share. The fund calculates the net asset value each day the New York Stock
Exchange is open for trading as of approximately 4:00 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, if events occur between the close of markets
outside the United States and the close of regular trading on the New York Stock
Exchange that, in the opinion of the investment adviser, materially affect the
value of any of the fund's securities that principally trade in those
international markets, those securities will be valued in accordance with fair
value procedures. Use of these procedures is intended to result in more
appropriate net asset values. In addition, such use will reduce, if not
eliminate, potential arbitrage opportunities otherwise available to short-term
investors.

Because the fund may hold securities that are primarily listed on foreign
exchanges that trade on weekends or days when the fund does not price its
shares, the value of securities held in the fund may change on days when you
will not be able to purchase or redeem fund shares.

Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request.


                                       14

The New Economy Fund / Prospectus


<PAGE>

Sales charges

CLASS A SHARES

The initial sales charge you pay each time you buy Class A shares differs
depending upon the amount you invest and may be reduced or eliminated for larger
purchases as indicated below. The "offering price," the price you pay to buy
shares, includes any applicable sales charge, which will be deducted directly
from your investment. Shares acquired through reinvestment of dividends or
capital gain distributions are not subject to an initial sales charge.



                              SALES CHARGE AS A
                                         PERCENTAGE OF:
                                                                 DEALER
                                                   NET         COMMISSION
                                       OFFERING   AMOUNT     AS A PERCENTAGE
 INVESTMENT                             PRICE    INVESTED   OF OFFERING PRICE
------------------------------------------------------------------------------

 Less than $25,000                      5.75%     6.10%           5.00%
------------------------------------------------------------------------------
 $25,000 but less than $50,000          5.00      5.26            4.25
------------------------------------------------------------------------------
 $50,000 but less than $100,000         4.50      4.71            3.75
------------------------------------------------------------------------------
 $100,000 but less than $250,000        3.50      3.63            2.75
------------------------------------------------------------------------------
 $250,000 but less than $500,000        2.50      2.56            2.00
------------------------------------------------------------------------------
 $500,000 but less than $750,000        2.00      2.04            1.60
------------------------------------------------------------------------------
 $750,000 but less than $1 million      1.50      1.52            1.20
------------------------------------------------------------------------------
 $1 million or more and certain other   none      none      see below
 investments described below
------------------------------------------------------------------------------



The sales charge, expressed as a percentage of the offering price or the net
amount invested, may be higher or lower than the percentages described in the
table above due to rounding. This is because the dollar amount of the sales
charge is determined by subtracting the net asset value of the shares purchased
from the offering price, which is calculated to two decimal places using
standard rounding criteria. The impact of rounding will vary with the size of
the investment and the net asset value of the shares.

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:
. investments made by accounts that are part of certain qualified fee-based
  programs and that purchased Class A shares before the discontinuation of your
  investment dealer's load-waived A share program with the American Funds; and


. certain rollover investments from retirement plans to IRAs (see "Rollovers
  from retirement plans to IRAs" below for more information).


                                       15

                                              The New Economy Fund / Prospectus
<PAGE>

The distributor may pay dealers up to 1% on investments made in Class A shares
with no initial sales charge. The fund may reimburse the distributor for these
payments through its plans of distribution (see "Plans of distribution" below).

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell American Funds, and employees of The Capital Group Companies.
Please see the statement of additional information for more information.

 EMPLOYER-SPONSORED RETIREMENT PLANS
 Employer-sponsored retirement plans that are eligible to purchase Class R
 shares may instead purchase Class A shares and pay the applicable Class A sales
 charge, provided their recordkeepers can properly apply a sales charge on plan
 investments. These plans are not eligible to make initial purchases of $1
 million or more in Class A shares and thereby invest in Class A shares without
 a sales charge, nor are they eligible to establish a statement of intention
 that qualifies them to purchase Class A shares without a sales charge. More
 information about statements of intention can be found under "Sales charge
 reductions." Plans investing in Class A shares with a sales charge may purchase
 additional Class A shares in accordance with the sales charge table above.

 Employer-sponsored retirement plans that invested in Class A shares without any
 sales charge on or before March 31, 2004, and that continue to meet the
 eligibility requirements in effect as of that date for purchasing Class A
 shares at net asset value, may continue to purchase Class A shares without any
 initial or contingent deferred sales charge.

CLASS R SHARES
Class R shares are sold without any initial or contingent deferred sales charge.
The distributor will pay dealers annually an asset-based compensation of up to
1.00% for sales of Class R-1 shares, up to .75% for Class R-2 shares, up to .50%
for Class R-3 shares and up to .25% for Class R-4 shares. No dealer compensation
is paid on sales of Class R-5 shares. The fund may reimburse the distributor for
these payments through its plans of distribution (see "Plans of distribution"
below).


                                       16

The New Economy Fund / Prospectus


<PAGE>

Sales charge reductions

TO RECEIVE A REDUCTION IN YOUR CLASS A INITIAL SALES CHARGE, YOU MUST LET YOUR
FINANCIAL ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW AT THE TIME YOU
PURCHASE SHARES THAT YOU QUALIFY FOR SUCH A REDUCTION. IF YOU DO NOT LET YOUR
ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW THAT YOU ARE ELIGIBLE FOR A
REDUCTION, YOU MAY NOT RECEIVE A SALES CHARGE DISCOUNT TO WHICH YOU ARE
OTHERWISE ENTITLED. In order to determine your eligibility to receive a sales
charge discount, it may be necessary for you to provide your adviser or American
Funds Service Company with information and records (including account
statements) of all relevant accounts invested in the American Funds.
IN ADDITION TO THE INFORMATION BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
SALES CHARGE REDUCTIONS THROUGH A LINK ON THE HOME PAGE OF THE AMERICAN FUNDS
WEBSITE AT AMERICANFUNDS.COM, FROM THE STATEMENT OF ADDITIONAL INFORMATION OR
FROM YOUR FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE
Consistent with the policies described in this prospectus, two or more
retirement plans of an employer or employer's affiliates may combine all of
their American Funds investments to reduce their Class A sales charge. However,
for this purpose, investments representing direct purchases of American Funds
money market funds are excluded. Following are different ways that you may
qualify for a reduced Class A sales charge:

 CONCURRENT PURCHASES

 Simultaneous purchases of any class of shares of two or more American Funds may
 be combined to qualify for a reduced Class A sales charge.

 RIGHTS OF ACCUMULATION

 You may take into account your accumulated holdings in all share classes of the
 American Funds to determine the initial sales charge you pay on each purchase
 of Class A shares. Subject to your investment dealer's or recordkeeper's
 capabilities, your accumulated holdings will be calculated as the higher of (a)
 the current value of your existing holdings or (b) the amount you invested
 (excluding capital appreciation) less any withdrawals. Please see the statement
 of additional information for details. You should retain any records necessary
 to substantiate the historical amounts you have invested. The current value of
 existing investments in an American Legacy/(R)/ Retirement Investment Plan may
 also be taken into account to determine your Class A sales charge.

 STATEMENT OF INTENTION
 You may reduce your Class A sales charge by establishing a statement of
 intention. A statement of intention allows you to combine all purchases of all
 share classes of American Funds non-money market funds you intend to make over
 a 13-month period to determine the applicable sales charge; however, purchases
 made under a right of


                                       17

                                              The New Economy Fund / Prospectus
<PAGE>

 reinvestment, appreciation of your holdings, and reinvested dividends and
 capital gains do not count as purchases made during the statement period. The
 market value of your existing holdings eligible to be aggregated as of the day
 immediately before the start of the statement period may be credited toward
 satisfying the statement. A portion of your account may be held in escrow to
 cover additional Class A sales charges that may be due if your total purchases
 over the statement period do not qualify you for the applicable sales charge
 reduction. Employer-sponsored retirement plans may be restricted from
 establishing statements of intention. See "Sales charges" above for more
 information.

RIGHT OF REINVESTMENT
Please see the "Sales" section of "Purchase, exchange and sale of shares" above
for information on how to reinvest proceeds from a redemption, dividend payment
or capital gain distribution without a sales charge.


                                       18

The New Economy Fund / Prospectus


<PAGE>

Rollovers from retirement plans to IRAs
Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover. More information on Class B, C and F shares can be
found in the fund's prospectus for nonretirement plan shareholders. Rollovers
invested in Class A shares from retirement plans will be subject to applicable
sales charges. The following rollovers to Class A shares will be made without a
sales charge:

. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
  custodian; and
. rollovers to IRAs that are attributable to American Funds investments, if they
  meet the following requirements:

 -- the assets being rolled over were invested in American Funds at the time of
    distribution; and

 -- the rolled over assets are contributed to an American Funds IRA with Capital
    Bank and Trust Company as custodian.

IRA rollover assets that roll over without a sales charge as described above
will not be subject to a contingent deferred sales charge and investment dealers
will be compensated solely with an annual service fee that begins to accrue
immediately. IRA rollover assets invested in Class A shares that are not
attributable to American Funds investments, as well as future contributions to
the IRA, will be subject to sales charges and the terms and conditions generally
applicable to Class A share investments as described in the prospectus and
statement of additional information.





                                       19

                                              The New Economy Fund / Prospectus
<PAGE>

Plans of distribution
The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of trustees. The plans
provide for payments, based on annualized percentages of average daily net
assets, of up to .25% for Class A shares, up to 1.00% for Class R-1 and R-2
shares, up to .75% for Class R-3 shares and up to .50% for Class R-4 shares. For
all share classes, up to .25% of these expenses may be used to pay service fees
to qualified dealers for providing certain shareholder services. The amount
remaining for each share class may be used for distribution expenses.

The 12b-1 fees paid by the fund, as a percentage of average net assets, for the
previous fiscal year are indicated in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund." Since these fees are paid out of the
fund's assets or income on an ongoing basis, over time they will increase the
cost and reduce the return of your investment.

Other compensation to dealers
American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 75 dealers (or their
affiliates) who have sold shares of the American Funds. The level of payments
made to a qualifying firm in any given year will vary and in no case would
exceed the sum of (a) .10% of the previous year's American Funds sales by that
dealer and (b) .02% of American Funds assets attributable to that dealer. For
calendar year 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the assets of the American Funds. Aggregate
payments may also change from year to year. A number of factors will be
considered in determining payments, including the qualifying dealer's sales,
assets and redemption rates, and the quality of the dealer's relationship with
American Funds Distributors. American Funds Distributors makes these payments to
help defray the costs incurred by qualifying dealers in connection with efforts
to educate financial advisers about the American Funds so that they can make
recommendations and provide services that are suitable and meet shareholder
needs. American Funds Distributors will, on an annual basis, determine the
advisability of continuing these payments. American Funds Distributors may also
pay expenses associated with meetings conducted by dealers outside the top 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.


                                       20

The New Economy Fund / Prospectus


<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS
The fund intends to distribute dividends to shareholders, usually in December.


Capital gains, if any, are usually distributed in December. When a dividend or
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.

All dividends and capital gain distributions paid to retirement plan
shareholders will be automatically reinvested.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

Dividends and capital gains distributed by the fund to tax-deferred retirement
plan accounts are not taxable currently.

TAXES ON TRANSACTIONS
Exchanges within a tax-deferred retirement plan account will not result in a
capital gain or loss for federal or state income tax purposes. With limited
exceptions, distributions from a retirement plan account are taxable as ordinary
income.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.


                                       21

                                              The New Economy Fund / Prospectus
<PAGE>


Financial highlights/1/

The Financial Highlights table is intended to help you understand the fund's
results for the past five fiscal years. Certain information reflects financial
results for a single share of a particular class. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the fund (assuming reinvestment of all dividends and capital gain
distributions). This information has been audited by Deloitte & Touche LLP,
whose report, along with the fund's financial statements, is included in the
statement of additional information, which is available upon request.


                                                  INCOME (LOSS) FROM INVESTMENT OPERATIONS/2/
                                                                      Net
                                                                     gains
                                                                    (losses)
                                         Net                     on securities                                Net
                                        asset         Net            (both                       Dividends   asset
                                       value,     investment        realized       Total from    (from net   value,
                                      beginning     income            and          investment    investment  end of    Total
                                      of period     (loss)        unrealized)      operations     income)    period  return/3/
--------------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 11/30/2006                  $22.98       $ .20           $ 3.38           $ 3.58        $(.15)    $26.41    15.65%
Year ended 11/30/2005                   20.27         .15             2.63             2.78         (.07)     22.98    13.79
Year ended 11/30/2004                   18.11         .06             2.11             2.17         (.01)     20.27    12.00
Year ended 11/30/2003                   14.94         .01             3.16             3.17           --      18.11    21.22
Year ended 11/30/2002                   18.01          --/5/         (3.07)           (3.07)          --      14.94   (17.05)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 11/30/2006                   22.47          --/5/          3.30             3.30         (.03)     25.74    14.72
Year ended 11/30/2005                   19.90        (.02 )           2.59             2.57           --      22.47    12.91
Year ended 11/30/2004                   17.92        (.08 )           2.06             1.98           --      19.90    11.05
Year ended 11/30/2003                   14.90        (.11 )           3.13             3.02           --      17.92    20.27
Period from 6/21/2002 to 11/30/2002     15.45        (.04 )           (.51)            (.55)          --      14.90    (3.56)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 11/30/2006                   22.47         .01             3.30             3.31         (.01)     25.77    14.74
Year ended 11/30/2005                   19.90        (.01 )           2.58             2.57           --      22.47    12.91
Year ended 11/30/2004                   17.92        (.08 )           2.06             1.98           --      19.90    11.05
Year ended 11/30/2003                   14.88        (.11 )           3.15             3.04           --      17.92    20.43
 Period from 5/31/2002 to 11/30/2002    17.02        (.05 )          (2.09)           (2.14)          --      14.88   (12.57)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 11/30/2006                  $22.75       $ .10           $ 3.34           $ 3.44        $(.08)    $26.11    15.18%
Year ended 11/30/2005                   20.10         .07             2.61             2.68         (.03)     22.75    13.35
Year ended 11/30/2004                   18.03          --/5/          2.07             2.07           --      20.10    11.48
Year ended 11/30/2003                   14.92        (.05 )           3.16             3.11           --      18.03    20.84
 Period from 6/25/2002 to 11/30/2002    15.26        (.02 )           (.32)            (.34)          --      14.92    (2.23)
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 11/30/2006                   22.94         .19             3.37             3.56         (.16)     26.34    15.61
Year ended 11/30/2005                   20.25         .15             2.63             2.78         (.09)     22.94    13.76
Year ended 11/30/2004                   18.12         .07             2.09             2.16         (.03)     20.25    11.92
Year ended 11/30/2003                   14.94         .01             3.17             3.18           --      18.12    21.28
 Period from 7/25/2002 to 11/30/2002    12.85        (.01 )           2.10             2.09           --      14.94    16.26
--------------------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 11/30/2006                   23.10         .27             3.38             3.65         (.21)     26.54    15.94
Year ended 11/30/2005                   20.37         .21             2.65             2.86         (.13)     23.10    14.14
Year ended 11/30/2004                   18.21         .12             2.10             2.22         (.06)     20.37    12.26
Year ended 11/30/2003                   14.97         .06             3.18             3.24           --      18.21    21.64
 Period from 5/15/2002 to 11/30/2002    17.58         .03            (2.64)           (2.61)          --      14.97   (14.85)


                                                   Ratio of     Ratio of      Ratio
                                                   expenses     expenses      of net
                                                  to average   to average     income
                                         Net      net assets   net assets     (loss)
                                       assets,      before        after         to
                                        end of       reim-        reim-      average
                                      period (in  bursements/  bursements/     net
                                      millions)     waivers    waivers/4/     assets
--------------------------------------------------------------------------------------

CLASS A:
Year ended 11/30/2006                  $7,654        .82 %        .78 %       .83 %
Year ended 11/30/2005                   7,061        .83          .79         .73
Year ended 11/30/2004                   6,938        .84          .84         .32
Year ended 11/30/2003                   6,671        .89          .89         .09
Year ended 11/30/2002                   5,883        .89          .89        (.01 )
--------------------------------------------------------------------------------------
CLASS R-1:
Year ended 11/30/2006                       8       1.64         1.58         .01
Year ended 11/30/2005                       4       1.70         1.61        (.09 )
Year ended 11/30/2004                       2       1.76         1.65        (.44 )
Year ended 11/30/2003                       1       1.96         1.66        (.69 )
Period from 6/21/2002 to 11/30/2002        --/6/    1.43          .73        (.28 )
--------------------------------------------------------------------------------------
CLASS R-2:
Year ended 11/30/2006                      85       1.81         1.58         .04
Year ended 11/30/2005                      61       1.91         1.58        (.05 )
Year ended 11/30/2004                      44       2.03         1.61        (.40 )
Year ended 11/30/2003                      21       2.35         1.62        (.68 )
 Period from 5/31/2002 to 11/30/2002        3       2.00/7/      1.63/7/     (.78 )/7/
--------------------------------------------------------------------------------------
CLASS R-3:
Year ended 11/30/2006                  $   76       1.22 %       1.18 %       .44 %
Year ended 11/30/2005                      50       1.24         1.19         .33
Year ended 11/30/2004                      35       1.26         1.23        (.02 )
Year ended 11/30/2003                      17       1.37         1.24        (.29 )
 Period from 6/25/2002 to 11/30/2002        2        .61          .54        (.12 )
--------------------------------------------------------------------------------------
CLASS R-4:
Year ended 11/30/2006                      40        .86          .82         .79
Year ended 11/30/2005                      31        .86          .82         .70
Year ended 11/30/2004                      17        .86          .85         .34
Year ended 11/30/2003                      10        .88          .88         .09
 Period from 7/25/2002 to 11/30/2002        4        .33          .31        (.03 )
--------------------------------------------------------------------------------------
CLASS R-5:
Year ended 11/30/2006                     109        .55          .51        1.10
Year ended 11/30/2005                      76        .55          .52        1.02
Year ended 11/30/2004                      51        .55          .55         .62
Year ended 11/30/2003                      44        .56          .56         .41
 Period from 5/15/2002 to 11/30/2002       31        .56/7/       .56/7/      .44/7/






                                       22


The New Economy Fund / Prospectus


<PAGE>


                                          YEAR ENDED NOVEMBER 30
                           2006        2005        2004        2003         2002
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
RATE FOR ALL CLASSES       41%         32%         35%         38%          37%
OF SHARES



/1/ Based on operations for the periods shown (unless otherwise noted) and,
    accordingly, may not be representative of a full year.
/2/ Based on average shares outstanding.
/3/ Total returns exclude all sales charges.
/4/ The ratios in this column reflect the impact, if any, of certain
    reimbursements/waivers from Capital Research and Management Company. See the
    Annual Fund Operating Expenses table under "Fees and expenses of the fund" in
    this prospectus and the fund's annual report for more information.
/5/ Amount less than $.01.
/6/ Amount less than $1 million.
/7/ Annualized.
                                              The New Economy Fund / Prospectus


                                       23

<PAGE>

NOTES


                                       24

The New Economy Fund / Prospectus


<PAGE>

NOTES


                                       25

                                              The New Economy Fund / Prospectus
<PAGE>

NOTES


                                       26

The New Economy Fund / Prospectus


<PAGE>

NOTES


                                       27

                                              The New Economy Fund / Prospectus
<PAGE>



[Logo - American Funds/R/]                The right choice for the long term/(R)/





FOR SHAREHOLDER SERVICES          American Funds Service Company
                                  800/421-0180
FOR RETIREMENT PLAN SERVICES      Call your employer or plan administrator
FOR DEALER SERVICES               American Funds Distributors
                                  800/421-9900
                                  americanfunds.com
FOR 24-HOUR INFORMATION           For Class R share information,visit
                                  AmericanFundsRetirement.com

Telephone calls you have with the American Funds organization may be monitored or
recorded for quality assurance, verification and/or recordkeeping purposes. By speaking
with us on the telephone, you are giving your consent to such monitoring and recording.
------------------------------------------------------------------------------------------



MULTIPLE TRANSLATIONS  This prospectus may be translated into other languages.
If there is any inconsistency or ambiguity as to the meaning of any word or
phrase in a translation, the English text will prevail.

ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS  The shareholder reports contain
additional information about the fund, including financial statements,
investment results, portfolio holdings, a discussion of market conditions and
the fund's investment strategies, and the independent registered public
accounting firm's report (in the annual report).

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information on all aspects
of the fund, including the fund's financial statements, and is incorporated by
reference into this prospectus. This means that the current SAI, for legal
purposes, is part of this prospectus. The codes of ethics describe the personal
investing policies adopted by the fund, the fund's investment adviser and its
affiliated companies.
The codes of ethics and current SAI are on file with the Securities and Exchange
Commission (SEC). These and other related materials about the fund are available
for review or to be copied at the SEC's Public Reference Room in Washington, DC
(202/551-8090) or on the EDGAR database on the SEC's website at sec.gov or,
after payment of a duplicating fee, via e-mail request to publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, 100 F Street, NE, Washington,
DC 20549. The current SAI and shareholder reports are also available, free of
charge, on americanfunds.com.

HOUSEHOLD MAILINGS Each year you are automatically sent an updated prospectus
and annual and semi-annual reports for the fund. You may also occasionally
receive proxy statements for the fund. In order to reduce the volume of mail you
receive, when possible, only one copy of these documents will be sent to
shareholders who are part of the same family and share the same household
address.

If you would like to opt out of household-based mailings or receive a
complimentary copy of the current SAI, codes of ethics or annual/semi-annual
report to shareholders, please call American Funds Service Company at
800/421-0180 or write to the Secretary of the fund at 333 South Hope Street, Los
Angeles, California 90071.


[Logo - recycle bug]







Printed on recycled paper
RPGEPR-914-0207P Litho in USA CGD/B/8039            Investment Company File No. 811-03735
--------------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds        Capital Research and Management       Capital International
           Capital Guardian                  Capital Bank and Trust

The New Economy Fund

Part C

Other Information

Item 23. Exhibits for Registration Statement (1940 Act No. 811-03735 and 1933 Act No. 002-83848)

(a)	Establishment and Designation of Additional Classes of Shares of Beneficial Interest Without Par Value dated 12/12/01 - previously filed (see P/E Amendment No. 27 filed 2/14/02)

(b)	By-laws - By-laws as amended 3/15/06

(c)	Instruments Defining Rights of Security Holders - Form of share certificate - previously filed (see P/E Amendment No. 25 filed 12/29/00)

(d)	Investment Advisory Contracts - Amended Investment Advisory and Service Agreement dated 6/1/04 - previously filed (see P/E Amendment No. 31 filed 1/28/05)

(e)

Underwriting Contracts - Form of Amended and Restated Principal Underwriting Agreement - previously filed (see P/E Amendment No. 27 filed 2/14/02); and Form of Selling Group Agreement; form of Banking Selling Group Agreement; form of Omnibus addendum to the Selling Group Agreement (for retirement plan share classes -- R shares only); form of Institutional Selling Group Agreement (see P/E Amendment No. 31 filed 1/28/05)

(e-2)

Form of Amendment to Selling Group Agreement effective 11/1/06; Form of Amendment to Selling Group Agreement effective 2/1/07

(f)	Bonus or Profit Sharing Contracts - Deferred Compensation Plan amended 1/1/05

(g)	Custodian Agreements - Form of Global Custody Agreement - previously filed (see P/E Amendment No. 24 filed 3/8/00 and No. 28 filed 5/10/02); Form of Global Custody Agreement dated 12/14/06

(h-1)

Other Material Contracts - Form of Amended and Restated Administrative Services Agreement - previously filed (see P/E Amendment No. 32 filed 1/31/06); and Form of Amended Shareholder Services Agreement as of 4/1/03 and Form of Indemnification Agreement - previously filed (see P/E Amendment No. 31 filed 1/28/05)

(h-2)

Form of Amendment to Shareholder Services Agreement dated 11/1/06

(i)	Legal Opinion - Legal Opinion - previously filed (see P/E Amendment No. 24 filed 3/8/00; No. 26 filed 3/20/01; No. 27 filed 2/14/02; and No. 28 filed 5/10/02)

(j)	Other Opinions - Consent of Independent Registered Public Accounting Firm

(k)	Omitted Financial Statements - None

(l)

None

(m)

Forms of Plans of Distribution - Class A Plan of Distribution - previously filed (see P/E Amendment No. 24 filed 3/8/00); Class 529-A - previously filed (see P/E Amendment No. 27 filed 2/14/02); and Amended Plans of Distribution for Classes B, C, F, 529-B, 529-C, 529-E, 529-F and R-1, R-2, R-3 and R-4 - previously filed (see P/E Amendment No. 32 filed 1/31/06)

(n)	Form of Amended and Restated Multiple Class Plan - previously filed (see P/E Amendment No. 27 filed 2/14/02)

(o)

Reserved

(p)	Code of Ethics - for Registrant dated December 2005; for The Capital Group Companies dated September 2006

Item 24. Persons Controlled by or Under Common Control with the Fund

None

Item 25. Indemnification

The Registrant is a joint-insured under Investment Adviser/Mutual Fund Errors and Omissions Policies, which insure its officers and trustees against certain liabilities. However, in no event will Registrant maintain insurance to indemnify any such person for any act for which Registrant itself is not permitted to indemnify the individual.

Article V of the Registrant's Declaration of Trust and Article VI of the Registrant’s By-Laws as well as the indemnification agreements that the Registrant has entered into with each of its trustees who is not an “interested person” of the Registrant (as defined under the Investment Company Act of 1940 as amended), provide in effect that the Registrant will indemnify its officers and trustees against any liability or expenses actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the Registrant, to the fullest extent permitted by applicable law, subject to certain conditions. In accordance with Section 17(h) and 17(i) of the Investment Company Act of 1940 and their respective terms, these provisions do not protect any person against any liability to the Registrant or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Registrant will comply with the indemnification requirements contained in the Investment Company Act of 1940, as amended, and Release Nos. 7221 (June 9, 1972) and 11330 (September 4, 1980).

Item 26. Business and Other Connections of the Investment Adviser

None

Item 27. Principal Underwriters

(a) American Funds Distributors, Inc. is the Principal Underwriter of shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds Income Series, The American Funds Tax-Exempt Series I, The American Funds Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc., Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World Growth and Income Fund, Inc., The Cash Management Trust of America, EuroPacific Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc., The Investment Company of America, Intermediate Bond Fund of America, Limited Term Tax-Exempt Bond Fund of America, New Perspective Fund, Inc., New World Fund, Inc., Short-Term Bond Fund of America, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Money Fund of America, U.S. Treasury Money Fund of America and Washington Mutual Investors Fund, Inc.

(b)

	(1) Name and Principal Business Address	(2) Positions and Offices with Underwriter	(3) Positions and Offices with Registrant
L	E. Grant Abramson	Vice President	None
	David L. Abzug P.O. Box 2248 Agoura Hills, CA 91376	Vice President	None
	William C. Anderson 7780 Boylston Court Dublin, OH 43016	Regional Vice President	None
	Robert B. Aprison 2983 Bryn Wood Drive Madison, WI 53711	Senior Vice President	None
	T. Patrick Bardsley 36 East Woodward Blvd. Tulsa, OK 74114	Regional Vice President	None
	Shakeel A. Barkat 982 Wayson Way Davidsonville, MD 21035	Vice President	None
	Steven L. Barnes 7490 Clubhouse Road Suite 100 Boulder, CO 80301	Senior Vice President	None
	Thomas M. Bartow 20 Cerchio Alto Henderson, NV 89011	Vice President	None
B	Carl R. Bauer	Vice President	None
	Michelle A. Bergeron 4160 Gateswalk Drive Smyrna, GA 30080	Senior Vice President	None
	J. Walter Best, Jr. 7003 Chadwick Drive, Suite 355 Brentwood, TN 37027	Vice President	None
	John A. Blanchard 576 Somerset Lane Northfield, IL 60093	Senior Vice President	None
	Ian B. Bodell 7003 Chadwick Drive, Suite 355 Brentwood, TN 37027	Senior Vice President	None
	Jonathan W. Botts 2231 Garden View Lane Weddington, NC 28104	Regional Vice President	None
	Bill Brady 646 Somerset Drive Indianapolis, IN 46260	Regional Vice President	None
	Mick L. Brethower 510 Cimmaron Hills Trail W. Georgetown, TX 78628	Senior Vice President	None
	C. Alan Brown 7424 Somerset Avenue St. Louis, MO 63105	Vice President	None
L	Sheryl M. Burford	Assistant Vice President	None
B	J. Peter Burns	Vice President	None
	Steven Calabria 161 Bay Avenue Huntington Bay, NY 11743	Regional Vice President	None
S	Kathleen D. Campbell	Assistant Vice President	None
	Matthew C. Carlisle 100 Oakmont Lane, #409 Belleair, FL 33756	Vice President	None
	Damian F. Carroll 40 Ten Acre Road New Britain, CT 06052	Vice President	None
	James D. Carter 560 Valley Hill Lane Knoxville, TN 37922	Regional Vice President	None
	Brian C. Casey 8002 Greentree Road Bethesda, MD 20817	Senior Vice President	None
	Victor C. Cassato 999 Green Oaks Drive Greenwood Village, CO 80121	Senior Vice President	None
	Christopher J. Cassin 120 E. Ogden Ave., Suite 106 Hinsdale, IL 60521	Senior Vice President	None
L	Denise M. Cassin	Director, Senior Vice President	None
L	David D. Charlton	Director, Senior Vice President	None
	Thomas M. Charon 262 Mulberry Drive Delafield, WI 53018	Regional Vice President	None
L	Wellington Choi	Vice President	None
	Paul A. Cieslik 90 Northington Drive Avon, CT 06001	Regional Vice President	None
L	Larry P. Clemmensen	Director	None
L	Kevin G. Clifford	Director, President and Co-Chief Executive Officer	None
H	Cheri Coleman	Vice President	None
	Ruth M. Collier 106 Central Park South, #10K New York, NY 10019	Senior Vice President	None
S	David Coolbaugh	Vice President	None
	Carlo O. Cordasco 4036 Ambassador Circle Williamsburg, VA 23188	Regional Vice President	None
B	Josie Cortez	Assistant Vice President	None
	Charles H. Cote 305 Edgeworth Lane Sewickley, PA 15143	Regional Vice President	None
	Thomas E. Cournoyer 2333 Granada Blvd. Coral Gables, FL 33134	Vice President	None
L	Michael D. Cravotta	Assistant Vice President	None
	Joseph G. Cronin 1281 Fiore Drive Lake Forest, IL 60045	Vice President	None
	William F. Daugherty 1213 Redwood Hills Circle Carlisle, PA 17015	Vice President	None
	Guy E. Decker 2990 Topaz Lane Carmel, IN 46032	Vice President	None
	Daniel J. Delianedis Edina Executive Plaza 5200 Willson Road, Suite 150 Edina, MN 55424	Senior Vice President	None
L	James W. DeLouise	Assistant Vice President	None
	James A. DePerno, Jr. 1 Nehercrest Lane Orchard Park, NY 14127	Vice President	None
L	Bruce L. DePriester	Director, Senior Vice President, Treasurer and Controller	None
	Lori A. Deuberry 130 Aurora Street Hudson, OH 44236	Regional Vice President	None
L	Dianne M. Dexter	Assistant Vice President	None
	Thomas J. Dickson 108 Wilmington Court Southlake, TX 76092	Vice President	None
	Michael A. DiLella 22 Turner’s Lake Drive Mahwah, NJ 07430	Senior Vice President	None
	G. Michael Dill 505 E. Main Street Jenks, OK 74037	Senior Vice President	None
N	Dean M. Dolan	Vice President	None
L	Hedy B. Donahue	Assistant Vice President	None
L	Michael J. Downer	Director	None
	Craig A. Duglin 4170 Vanetta Drive Studio City, CA 91604	Regional Vice President	None
	Michael J. Dullaghan 5040 Plantation Grove Lane Roanoke, VA 24012	Vice President	None
I	Lloyd G. Edwards	Senior Vice President	None
	Timothy L. Ellis 1700 Lelia Drive, Suite 105 Jackson, MS 39216	Senior Vice President	None
	Kristopher A. Feldmeyer 787 Jackson Road Greenwood, IN 46142	Regional Vice President	None
L	Lorna Fitzgerald	Vice President	None
	William F. Flannery 29 Overlook Road Hopkinton, MA 01748	Regional Vice President	None
	John R. Fodor 15 Latisquama Road Southborough, MA 01772	Senior Vice President	None
L	Charles L. Freadhoff	Vice President	None
	Daniel B. Frick 845 Western Avenue Glen Ellyn, IL 60137	Vice President	None
L	Linda S. Gardner	Vice President	None
	Keith R. George 3835 East Turtle Hatch Road Springfield, MO 65809	Regional Vice President	None
L	J. Christopher Gies	Senior Vice President	None
B	Lori A. Giacomini	Assistant Vice President	None
L	David M. Givner	Secretary	None
B	Evelyn K. Glassford	Vice President	None
	Jack E. Goldin 3424 Belmont Terrace Davie, FL 33328	Regional Vice President	None
L	Earl C. Gottschalk	Vice President	None
	Jeffrey J. Greiner 8250-A Estates Parkway Plain City, OH 43064	Senior Vice President	None
	Eric M. Grey 601 Fisher Road N. Dartmouth, MA 02747	Regional Vice President	None
B	Steven Guida	Senior Vice President	None
B	Mariellen Hamann	Vice President	None
	Derek S. Hansen 13033 Ridgedale Drive, #147 Minnetonka, MN 55305	Vice President	None
	David E. Harper 5400 Russell Cave Road Lexington, KY 40511	Senior Vice President	None
	Calvin L. Harrelson, III 2048 Kings Manor Drive Weddington, NC 28104	Vice President	None
	Robert J. Hartig, Jr. 13563 Marjac Way McCordsville, IN 46055	Vice President	None
L	Linda M. Hines	Vice President	None
	Steven J. Hipsley 44 Tyler Drive Saratoga Springs, NY 12866	Regional Vice President	None
L	Russell K. Holliday	Vice President	None
	Heidi Horwitz 5 Christopher Hill Road Weston, CT 06883	Regional Vice President	None
L	Kevin B. Hughes	Vice President	None
	Ronald R. Hulsey 6202 Llano Dallas, TX 75214	Senior Vice President	None
	Marc Ialeggio 13 Prince Royal Passage Corte Madera, CA 94925	Regional Vice President	None
	Robert S. Irish 1225 Vista Del Mar Drive Delray Beach, FL 33483	Senior Vice President	None
L	Linda Johnson	Assistant Vice President	None
G1	Joanna F. Jonsson	Director	None
B	Damien M. Jordan	Senior Vice President	None
L	Marc J. Kaplan	Vice President	None
	John P. Keating 1576 Sandy Springs Dr. Orange Park, FL 32003	Senior Vice President	None
	Brian G. Kelly 76 Daybreak Road Southport, CT 06890	Regional Vice President	None
	Andrew J. Kilbride 3080 Tuscany Court Ann Arbor, MI 48103	Regional Vice President	None
N	Dorothy Klock	Vice President	None
	Dianne L. Koske 6 Black Oak Court Poquoson, VA 23662	Assistant Vice President	None
B	Elizabeth K. Koster	Vice President	None
	Christopher F. Lanzafame 19365 Lovall Valley Court Sonoma, CA 95476	Regional Vice President	None
	Patricia D. Lathrop 822 Monterey Blvd., NE St. Petersburg, FL 33704	Regional Vice President	None
	R. Andrew LeBlanc 78 Eton Road Garden City, NY 11530	Vice President	None
	T. Blake Liberty 5506 East Mineral Lane Littleton, CO 80122	Vice President	None
	Mark J. Lien 1103 Tulip Tree Lane West Des Moines, IA 50266	Vice President	None
L	Lorin E. Liesy	Vice President	None
I	Kelle Lindenberg	Assistant Vice President	None
	Louis K. Linquata 5214 Cass Street Omaha, NE 68132	Vice President	None
	Brendan T. Mahoney 1 Union Avenue, Suite One Sudbury, MA 01776	Vice President	None
	Nathan G. Mains 7711 S. Columbine Street Centennial, CO 80122	Regional Vice President	None
	Stephen A. Malbasa 13405 Lake Shore Blvd. Cleveland, OH 44110	Director, Senior Vice President	None
	Steven M. Markel 5241 South Race Street Greenwood Village, CO 80121	Senior Vice President	None
L	Paul R. Mayeda	Assistant Vice President	None
L	Eleanor P. Maynard	Vice President	None
L	Christopher McCarthy	Vice President	None
	James R. McCrary 28812 Crestridge Rancho Palos Verdes, CA 90275	Vice President	None
L	Will McKenna	Vice President	None
S	John V. McLaughlin	Senior Vice President	None
	Terry W. McNabb 2002 Barrett Station Road St. Louis, MO 63131	Senior Vice President	None
L	Katharine McRoskey	Vice President	None
	Scott M. Meade 41 South Road Rye Beach, NH 03871	Vice President	None
	Charles L. Mitsakos 3017 11^th Avenue West Seattle, WA 98119	Regional Vice President	None
	Monty L. Moncrief 55 Chandler Creek Court The Woodlands, TX 77381	Vice President	None
	David H. Morrison 7021 North Stratton Court Peoria, IL 61615	Regional Vice President	None
	Andrew J. Moscardini 832 Coldwater Creek Circle Niceville, FL 32578	Regional Vice President	None
L	Jack Nitowitz	Assistant Vice President	None
	William E. Noe 3600 Knollwood Road Nashville, TN 37215	Senior Vice President	None
L	Heidi J. Novaes	Vice President	None
	Eric P. Olson 27 Main Street, Suite 200 Topsfield, MA 01983	Senior Vice President	None
	Jeffrey A. Olson 2708 88^th St. Court, NW Gig Harbor, WA 98332	Regional Vice President	None
	Thomas A. O’Neil 4 Hillcrest Avenue Eastborough, KS 67208	Regional Vice President	None
	Michael W. Pak 13929 SE 92^nd Street Newcastle, WA 98059	Regional Vice President	None
	W. Burke Patterson, Jr. 1643 Richland Avenue Baton Rouge, LA 70808	Regional Vice President	None
	Gary A. Peace 291 Kaanapali Drive Napa, CA 94558	Vice President	None
	Samuel W. Perry 4340 East Indian School Road Suite 21 Phoenix, AZ 85018	Vice President	None
	Raleigh G. Peters 1439 Byrd Drive Berwyn, PA 19312	Regional Vice President	None
	David K. Petzke 4016 Saint Lucia Street Boulder, CO 80301	Senior Vice President	None
	Fredric Phillips 175 Highland Avenue, 4th Floor Needham, MA 02494	Senior Vice President	None
	John Pinto 226 Country Club Drive Lansdale, PA 19446	Regional Vice President	None
	Carl S. Platou 7455 80th Place, S.E. Mercer Island, WA 98040	Senior Vice President	None
	Charles R. Porcher One Glenlake Pkwy., Suite 700 Atlanta, GA 30328	Regional Vice President	None
S	Richard P. Prior	Vice President	None
	Mike Quinn 1035 Vintage Club Drive Duluth, GA 30097	Regional Vice President	None
	John W. Rankin 1725 Centennial Club Drive Conway, AR 72034	Regional Vice President	None
	Jennifer D. Rasner 11940 Baypoint Drive Burnsville, MN 55337	Regional Vice President	None
	James P. Rayburn 3108 Roxbury Road Homewood, AL 35209	Regional Vice President	None
	Mark S. Reischmann 4125 Hermitage Drive Colorado Springs, CO 80906	Regional Vice President	None
	Steven J. Reitman 212 The Lane Hinsdale, IL 60521	Senior Vice President	None
	Brian A. Roberts 209-A 60^th Street Virginia Beach, VA 23451	Vice President	None
	Jeffrey Robinson 7 Waterville Lane Shrewsbury, MA 01545	Regional Vice President	None
	Suzette M. Rothberg 4508 Shady Beach Circle Independence, MN 55359	Regional Vice President	None
L	James F. Rothenberg	Director	None
	Romolo D. Rottura 233 Glenhaven Court Swedesboro, NJ 08085	Vice President	None
	Douglas F. Rowe 414 Logan Ranch Road Georgetown, TX 78628	Senior Vice President	None
	William M. Ryan 1408 Cortland Drive Manasquan, NJ 08736	Regional Vice President	None
L	Dean B. Rydquist	Director, Senior Vice President, Chief Compliance Officer	None
	Richard A. Sabec, Jr. 6868 Meadow Glen Drive Westerville, OH 43082	Regional Vice President	None
	Richard R. Samson 4604 Glencoe Avenue, #4 Marina del Rey, CA 90292	Senior Vice President	None
	Paul V. Santoro 28 State Street, Suite 1100 Boston, MA 02109	Vice President	None
H	Diane Sawyer	Senior Vice President	None
	Joseph D. Scarpitti 31465 St. Andrews Westlake, OH 44145	Senior Vice President	None
	Shane D. Schofield 201 McIver Street Greenville, SC 29601	Vice President	None
L	David L. Schroeder	Assistant Vice President	None
	Mark A. Seaman 645 Baltimore Annapolis Blvd Suite 220 Severna Park, MD 21146	Vice President	None
S	Sherrie L. Senft	Vice President	None
	James J. Sewell III 415 East Holyoke Place Claremont, CA 91711	Regional Vice President	None
	Arthur M. Sgroi 76 Fields End Drive Glenmont, NY 12077	Regional Vice President	None
L	R. Michael Shanahan	Director	None
L	Michael J. Sheldon	Vice President	None
	Frederic J. Shipp 1352 Sanjo Farms Drive Chesapeake, VA 23320	Regional Vice President	None
	Daniel S. Shore 3734 North Greenview Avenue Chicago, IL 60613	Vice President	None
	Brad Short 1601 Seal Way Seal Beach, CA 90740	Vice President	None
	David W. Short 1000 RIDC Plaza, Suite 212 Pittsburgh, PA 15238	Chairman of the Board and Co-Chief Executive Officer	None
	Nathan W. Simmons 496 Dogwood Trail Quincy, FL 32352	Regional Vice President	None
	William P. Simon, Jr. 237 Lancaster Avenue, Suite 207 Devon, PA 19333	Director, Senior Vice President	None
L	Connie F. Sjursen	Vice President	None
	Jerry L. Slater 2216 38^th Place E. Seattle, WA 98112	Senior Vice President	None
LW	John H. Smet	Director	None
	Rodney G. Smith 15851 Dallas Parkway, Suite 500 Addison, TX 75001-6016	Senior Vice President	None
	J. Eric Snively 2548 Violet Street Glenview, IL 60025	Regional Vice President	None
	Anthony L. Soave 3780 Foxglove Court NE Grand Rapids, MI 49525	Vice President	None
L	Therese L. Soullier	Vice President	None
	Nicholas D. Spadaccini 855 Markley Woods Way Cincinnati, OH 45230	Senior Vice President	None
L	Kristen J. Spazafumo	Vice President	None
	Mark D. Steburg 12508 160^th Avenue Southeast Renton, WA 98059	Regional Vice President	None
	Michael P. Stern 213 Aptos Place Danville, CA 94526	Regional Vice President	None
	Brad Stillwagon 2438 Broadmeade Road Louisville, KY 40205	Vice President	None
	Thomas A. Stout 1004 Ditchley Road Virginia Beach, VA 23451	Vice President	None
	Craig R. Strauser 175 Berwick Lake Oswego, OR 97034	Senior Vice President	None
L	Libby J. Syth	Vice President	None
L	Drew W. Taylor	Assistant Vice President	None
L	Larry I. Thatt	Assistant Vice President	None
	Gary J. Thoma 401 Desnoyer Kaukauna, WI 54130	Vice President	None
	Cynthia M. Thompson 4 Franklin Way Ladera Ranch, CA 92694	Vice President	None
	David Tippets 15 Player Green Place The Woodlands, TX 77382	Regional Vice President	None
L	James P. Toomey	Vice President	None
I	Christopher E. Trede	Vice President	None
	George F. Truesdail 400 Abbotsford Court Charlotte, NC 28270	Senior Vice President	None
	Scott W. Ursin-Smith 103 E. Blithedale Avenue, Suite 1 Mill Valley, CA 94941	Senior Vice President	None
S	Cindy Vaquiax	Assistant Vice President	None
	J. David Viale 39 Old Course Drive Newport Beach, CA 92660	Senior Vice President	None
D	Bradley J. Vogt	Director	None
L	A. Jordan Wallens 1501 Maple Avenue, #602 Evanston, IL 60201	Regional Vice President	None
	Thomas E. Warren 119 Faubel St. Sarasota, FL 34242	Vice President	None
L	J. Kelly Webb	Senior Vice President	None
	Gregory J. Weimer 206 Hardwood Drive Venetia, PA 15367	Director, Senior Vice President	None
B	Timothy W. Weiss	Director	None
SF	Gregory W. Wendt	Director	None
	George J. Wenzel 261 Barden Road Bloomfield Hills, MI 48304	Vice President	None
	Brian E. Whalen 4072 Yellow Ginger Glen Norcross, GA 30092	Regional Vice President	None
	William C. Whittington 11928 Sheldon Road Tampa, FL 33626	Regional Vice President	None
L	N. Dexter Williams, Jr.	Senior Vice President	None
L	Alan J. Wilson	Director	None
	Andrew L. Wilson 11163 Rich Meadow Drive Great Falls, VA 22066	Vice President	None
	Steven C. Wilson 7529 Summit Ridge Road Middleton, WI 53562	Regional Vice President	None
	Timothy J. Wilson 501 Valley Brook Road, Suite 204 McMurray, PA 15317	Senior Vice President	None
B	Laura L. Wimberly	Vice President	None
	Marshall D. Wingo Promenade Two, 25^th Floor 1230 Peachtree Street, N.E. Atlanta, GA 30309	Director, Senior Vice President	None
	Kurt A. Wuestenberg 975 Arboretum Drive Saline, MI 48176	Vice President	None
	William R. Yost 9463 Olympia Drive Eden Prairie, MN 55347	Senior Vice President	None
	Jason P. Young 11141 Whitetail Lane Olathe, KS 66061	Vice President	None
	Jonathan A. Young 2145 Hickory Forrest Chesapeake, VA 23322	Regional Vice President	None
	Scott D. Zambon 2178 Pieper Lane Tustin, CA 92782	Regional Vice President	None

__________

L	Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW	Business Address, 11100 Santa Monica Blvd., 15th Floor, Los Angeles, CA 90025
B	Business Address, 135 South State College Boulevard, Brea, CA 92821
S	Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251
SF	Business Address, One Market, Steuart Tower, Suite 1800, San Francisco, CA 94105-1016
H	Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I	Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
N	Business Address, 630 Fifth Avenue, 36^th Floor, New York, NY10111
D	Business Address, 3000 K Street N.W., Suite 230, Washington, DC 20007-5140
G1	Business Address, 3 Place des Bergues, 1201 Geneva, Switzerland

Item 28. Location of Accounts and Records

Accounts, books and other records required by Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended, are maintained and held in the offices of the Registrant’s investment adviser, Capital Research and Management Company, 333 South Hope Street, Los Angeles, California 90071; 135 South State College Boulevard, Brea, California 92821; and/or 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering shareholder accounts are maintained and kept by its transfer agent, American Funds Service Company, 135 South State College Boulevard, Brea, California 92821; 8332 Woodfield Crossing Boulevard, Indianapolis, Indiana 46240; 10001 North 92^nd Street, Suite 100, Scottsdale, Arizona 85258; 3500 Wiseman Boulevard, San Antonio, Texas 78251; and 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering portfolio transactions are maintained and kept by its custodian, State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111.

Item 29. Management Services

None

Item 30. Undertakings

n/a

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under Rule 485(b) under the Securities Act of 1933 and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Los Angeles, and State of California on the 25^th day of January, 2007.

The New Economy Fund

By: /s/ Timothy D. Armour

(Timothy D. Armour, President)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below on January 25, 2007, by the following persons in the capacities indicated.

	Signature	Title
(1)	Principal Executive Officer:
	/s/ Timothy D. Armour	President/PEO
	(Timothy D. Armour)

(2)	Principal Financial Officer and Principal Accounting Officer:
	/s/ David A. Pritchett	Treasurer
	(David A. Pritchett)

(3)	Trustees:
	/s/ Timothy D. Armour	President/PEO and Trustee
	(Timothy D. Armour)
	Joseph C. Berenato*	Trustee
	Richard G. Capen, Jr.*	Trustee
	H. Frederick Christie*	Trustee
	/s/ Gordon Crawford	Vice Chairman and Trustee
	(Gordon Crawford)
	John G. Freund*	Trustee
	R. Clark Hooper*	Trustee
	Leonade D. Jones*	Trustee
	William H. Kling*	Chairman of the Board (Independent and Non-Executive)
	Patricia K. Woolf*	Trustee
	*By: /s/ Chad L. Norton
	(Chad L. Norton, pursuant to a power of attorney filed herewith)

Counsel represents that this amendment does not contain disclosures that would make the amendment ineligible for effectiveness under the provisions of rule 485(b).

/s/ Walter R. Burkley

(Walter R. Burkley)

POWER OF ATTORNEY

I, Joseph C. Berenato, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-	Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Sheryl F. Johnson

David A. Pritchett

Jeffrey P. Regal

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Rolling Hills, CA, this 5th day of July, 2006.

(City, State)

/s/ Joseph C. Berenato

Joseph C. Berenato, Board member

POWER OF ATTORNEY

I, Richard G. Capen, Jr., the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series - U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II - The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Sharon G. Moseley

David A. Pritchett

Susi M. Silverman

Ari M. Vinocor

EXECUTED at Los Angeles, CA this 21^st day of September, 2006.

(City, State)

/s/ Richard G. Capen, Jr.

Richard G. Capen, Jr., Board member

POWER OF ATTORNEY

I, H. Frederick Christie, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	The American Funds Income Series - U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-	The American Funds Tax-Exempt Series II - The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Karl C. Grauman

Sheryl F. Johnson

Sharon G. Moseley

David A. Pritchett

Jeffrey P. Regal

Susi M. Silverman

Ari M. Vinocor

EXECUTED at Los Angeles, CA this 21^st day of September, 2006.

(City, State)

/s/ H. Frederick Christie

H. Frederick Christie, Board member

POWER OF ATTORNEY

I, John G. Freund, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

David A. Pritchett

EXECUTED at Palo Alto, CA, this 10th day of July, 2006.

(City, State)

/s/ John G. Freund

John G. Freund, Board member

POWER OF ATTORNEY

I, R. Clark Hooper, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series - U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II - The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Sharon G. Moseley

David A. Pritchett

Susi M. Silverman

Ari M. Vinocor

EXECUTED at Los Angeles, CA this 21^st day of September, 2006.

(City, State)

/s/ R. Clark Hooper

R. Clark Hooper, Board member

POWER OF ATTORNEY

I, Leonade D. Jones, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Jennifer M. Buchheim

Sheryl F. Johnson

David A. Pritchett

EXECUTED at Washington, DC, this 11th day of July, 2006.

(City, State)

/s/ Leonade D. Jones

Leonade D. Jones, Board member

POWER OF ATTORNEY

I, William H. Kling, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	EuroPacific Growth Fund (File No. 002-83847, File No. 811-03734)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	New Perspective Fund, Inc. (File No. 002-47749, File No. 811-02333)

-	New World Fund, Inc. (File No. 333-67455, File No. 811-09105)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

R. Marcia Gould

Karl C. Grauman

David A. Pritchett

EXECUTED at St. Paul, MN, this 11th day of July, 2006.

(City, State)

/s/ William H. Kling

William H. Kling, Board member

POWER OF ATTORNEY

I, Patricia K. Woolf, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	American Balanced Fund, Inc. (File No. 002-10758, File No. 811-00066)

-	Fundamental Investors, Inc. (File No. 002-10760, File No. 811-00032)

-	The Growth Fund of America, Inc. (File No. 002-14728, File No. 811-00862)

-	The Income Fund of America, Inc. (File No. 002-33371, File No. 811-01880)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Jennifer M. Buchheim

Sheryl F. Johnson

David A. Pritchett

EXECUTED at Los Angeles, CA this 20^th day of September, 2006.

(City, State)

/s/ Patricia K. Woolf

Patricia K. Woolf, Board member