American Funds Capital World Growth & Income Fund Class F-1 Shs (CWGFX) N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

Certified Shareholder Report of

Registered Management Investment Companies

Investment Company Act File Number: 811-07338

Capital World Growth and Income Fund, Inc.

(Exact name of registrant as specified in charter)

333 South Hope Street

Los Angeles, California 90071

(Address of principal executive offices)

Registrant's telephone number, including area code: (213) 486-9200

Date of fiscal year end: November 30

Date of reporting period: November 30, 2006

Vincent P. Corti

Capital Research and Management Company

333 South Hope Street

Los Angeles, California 90071

(Name and address of agent for service)

Copies to:

Kathryn A. Sanders

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071

(Counsel for the registrant)

ITEM 1 - Reports to Stockholders

[logo - American Funds^®]

The right choice for the long term^®

Capital World Growth and Income Fund

A time-tested objective

[photo of a man picking grapes off of a vine] 

Annual report for the year ended November 30, 2006

Capital World Growth and Income Fund^SM seeks long-term capital growth while providing current income. It invests on a global basis in a diversified portfolio consisting primarily of common stocks and other equity securities.

This fund is one of the 30 American Funds. The organization ranks among the nation’s three largest mutual fund families. For 75 years, Capital Research and Management Company,^SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.

Contents
Letter to shareholders	1
The value of a long-term perspective	4
Feature article
A time-tested objective	6
Summary investment portfolio	10
Financial statements	14
Board of directors and other officers	30
What makes American Funds different?	back cover

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

Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended December 31, 2006 (the most recent calendar quarter):

	1 year			5 years			10 years
Class A shares
Reflecting 5.75% maximum sales charge		+15.33	%		+15.33	%		+13.12	%

The total annual fund operating expense ratio was 0.73% for Class A shares as of the most recent fiscal year-end. This figure does not reflect a fee waiver that currently is in effect and which causes the actual expense ratio to be lower.

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased it to 10% on April 1, 2005. Fund results shown reflect actual expenses, with the waiver applied. Fund results would have been lower without the waiver. Please see the Financial Highlights table on pages 22 and 23 for details.

The fund’s 30-day yield for Class A shares as of December 31, 2006, reflecting the 5.75% maximum sales charge and calculated in accordance with the Securities and Exchange Commission formula, was 2.26% (2.22% without the fee waiver).

Results for other share classes can be found on page 5. Please see the inside back cover for important information about other share classes.

Investing outside the United States is subject to additional risks, such as currency fluctuations and political instability, which are detailed in the fund’s prospectus.

Fellow shareholders:

[photo of a man picking grapes off of a vine]

Global stocks continued to deliver outstanding returns for a fourth consecutive year. Results from international markets once again outpaced the U.S., and a strengthening of major currencies against the U.S. dollar further boosted returns for our shareholders.

For the 12 months ended November 30, 2006, Capital World Growth and Income Fund posted a total return of 23.4%. Fund results exceeded that of its benchmark, the unmanaged MSCI World Index,^SM which recorded a 20.9% return. In comparison, the Lipper Global Funds Index, a peer group benchmark, returned 20.4%. Over longer time frames, the fund has also consistently done better than either of these measures, as evidenced in the table below.

During the year, shareholders received quarterly dividends totaling 95 cents a share, as well as a capital gain distribution of nearly $1.44 a share paid in December 2005. For the year, shareholders recorded an income return of approximately 2.6%.

A look at global markets

Ongoing strength in global stock markets has been fueled by solid economic growth in developed and developing countries alike. The majority of fund assets are located in developed markets of the world, but strong growth in developing economies feeds into developed markets through imports, exports and foreign capital investments.

At the start of the recent fiscal year, the United States experienced strong economic growth, which helped lift stock prices. By mid-year, however, growth had slowed to a more moderate pace as the economy digested a weaker housing market, rising commodity prices and higher short-term interest rates engineered by the Federal Reserve to help contain inflation. Then in August, the Fed stopped raising the federal funds rate, and the stock market got a second wind that carried it through year-end. Ongoing concerns about inflation and the strength of the economy were largely overshadowed by continued strong corporate profits and a stepped-up pace of mergers and acquisitions. For the year, U.S. stocks, which represent 21% of the fund’s assets, gained 14.0%.*

*Country returns are based on MSCI indices, in U.S. dollars (except where noted) and with gross dividends reinvested.

[Begin Sidebar]

Results at a glance

(as of November 30, 2006, with all distributions reinvested)

			Average annual total returns
	1 year			5 years		10 years		Lifetime (since 3/26/93	)
Capital World Growth and Income Fund	+23.4	%		+16.3	%	+13.5	%	+14.6	%
MSCI World Index*	+20.9			+10.2		+7.7		+9.7
Lipper Global Funds Index†	+20.4			+10.2		+8.0		+9.6

*The MSCI World Index is a market capitalization index that is designed to measure global developed market equity results. The index consists of 23 developed-country indices, including the United States. The index is unmanaged and includes reinvested dividends and/or distributions, but does not reflect the effect of sales charges, commissions, expenses or taxes.

^†Lipper Global Funds Index is an equally weighted index of funds that invest at least 25% of their portfolios in securities traded outside the United States and that may own U.S. securities as well. 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.

[End Sidebar]

Europe enjoyed improved economic growth during the year, creating a welcome environment for its stock markets. A noted strengthening in Germany’s notoriously sluggish economy (the largest in Europe) set the tone for the continent, while the United Kingdom, Spain and the Nordic countries continued to best their neighbors with above-average, sustained growth. Stock market returns were consistently higher than in the United States, totaling 20% or more in most cases when measured in local currencies. A strengthening of the euro, the British pound and other regional currencies against the U.S. dollar lifted returns even further for our shareholders. On a currency-adjusted basis, returns ranged from a low of 28.7% for Switzerland to just over 50% for Portugal and Spain. In aggregate, Europe houses the largest concentration of portfolio assets, 43.5%.

Results from the larger markets of the Asia/Pacific region were also strong, though distinctly varied. Again, solid economic growth underpinned market advances, while strengthening currencies boosted returns in many cases. The return for Japan, up 12.7%, was at the low end for the region, but nonetheless attests to resurgent growth after years of economic weakness. Returns were more robust from Korea, 24.6% and Taiwan, 27.8%, while Australia surged 31.2%.

Returns for developing countries were impressive as well, all the more so for their recovery from a sharp selloff mid-year. Beginning in early May, developing market stocks and bonds suffered an abrupt decline as investors grew concerned about the sustainability of global growth. This selloff also rattled developed markets. By late summer, however, worries subsided and returns improved as evidenced by gains from key markets such as Brazil, 33.4%, China, 64.7%, India, 60.5% and Mexico, 39.8%.

Choosing where we want to be

The widespread strength of global markets and non-U.S. currencies gave a welcome boost to this year’s results, but does not account for return differences between the fund and its benchmark. Fund results are based on the strength (or weakness) of individual holdings that compose the portfolio. Further, our emphasis on individual stock selection differentiates the fund from the index in meaningful ways. One distinction is where the fund’s assets were invested, as shown in the table at right.

Importantly, our selection of portfolio holdings is not intended to replicate any market or industry. Rather, we select the stocks of companies that we believe offer the best long-term values for our shareholders. The table below identifies the fund’s 10 largest holdings, a representation of our highest convictions as of year-end. These holdings are culled from a variety of industries, though most are domiciled in Europe. Each recorded double-digit returns for the fiscal year. Returns for seven of these stocks (Novo Nordisk, Banco Santander Central Hispano, Koninklijke KPN, E.ON, Diageo, Vivendi and Bayer) exceeded the 23.4% return of the fund. While these stocks alone do not account for the fund’s higher return, they do underscore the importance of individual stock selection on fund results.

From a broader market perspective, gains were spread across a number of industries, including banks, utilities, telecommunication services, materials and energy, all of which are represented in the portfolio. Few industries posted weak results, among them semiconductors and health care equipment & services.

Recent and long-term growth

During the year, Capital World Growth and Income Fund continued to benefit from strong investor interest. Net assets of the fund grew 56%, while the number of shareholder accounts increased 46%. In the past year alone, the fund has added more than 1.3 million shareholder accounts. We take this opportunity to welcome our new shareholders.

[Begin Sidebar]

Largest equity holdings
(as of November 30, 2006)
		Percent of	12-month
Company	Country	net assets	return
Royal Dutch Shell	United Kingdom	1.8%	12.5%
Roche Holding	Switzerland	1.5	20.2
Diageo	United Kingdom	1.3	33.0
Altria Group	United States	1.3	15.7
Bayer	Germany	1.3	29.2
E.ON	Germany	1.3	34.8
Vivendi	France	1.1	32.4
Banco Santander Central Hispano	Spain	1.1	42.6
Novo Nordisk	Denmark	1.1	43.6
Koninklijke KPN	Netherlands	1.0	38.3

[End Sidebar]

Finally, we encourage all shareholders to maintain realistic expectations for their investments. The returns of this past year, while welcome, are well above the fund’s lifetime average and may not soon be repeated. Rather, we believe the value of the fund lies in its long-term investment approach and its proven reliability over extended market cycles. To learn more about how the fund has fared over longer time periods, we invite you to read our feature article, “A time-tested objective,” beginning on page 6.

We thank you for making us part of your investment future and look forward to reporting to you again in six months.

Cordially,

/s/ Gina H. Despres

Gina H. Despres

Vice Chairman of the Board

/s/ Stephen E. Bepler

Stephen E. Bepler

President

January 5, 2007

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

[Begin Sidebar]

Where the fund’s assets were invested

[begin pie chart]

Europe	43.5	%
The Americas	25.8	%
Asia/Pacific	20.9	%
Bonds, cash & equivalents	8.8	%
Other	1.0	%

[end pie chart]

	Capital World Growth and Income Fund		MSCI World Index
The Americas	25.8	%	52.9	%
United States	21.1		49.3
Brazil	1.9		—
Canada	1.8		3.6
Mexico	1.0		—
Europe	43.5	%	32.5	%
France	9.2		4.7
United Kingdom	9.1		11.2
Germany	6.4		3.4
Netherlands	3.4		1.6
Switzerland	3.2		3.3
Spain	2.6		2.0
Italy	2.4		1.8
Sweden	1.2		1.2
Denmark	1.1		.4
Belgium	1.0		.6
Greece	1.0		.3
Finland	.9		.7
Austria	.8		.3
Norway	.6		.4
Other Europe	.6		.6
Asia/Pacific	20.9	%	14.6	%
Japan	4.4		10.7
Korea	4.2		—
Taiwan	3.5		—
Australia	2.3		2.6
Hong Kong	1.7		.8
India	1.4		—
China	.8		—
Other Asia/Pacific	2.6		.5
Other	1.0	%	—
Bonds, cash & equivalents	8.8	%	—
Total	100	%	100	%

Percent of net assets by country as of November 30, 2006.

The MSCI World Index is weighted by market capitalization.

[End Sidebar]

The value of a long-term perspective

How a $10,000 investment has grown since March 26, 1993

Figures shown are past results for Class A shares and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com. Fund figures reflect deduction of the maximum sales charge of 5.75% on the $10,000 investment.¹ Thus, the net amount invested was $9,425.

[begin mountain chart]

		Capital World Growth and Income Fund, with dividends reinvested1,2		Capital World Growth and Income Fund, with dividends excluded1,3		MSCl World Index, with dividends reinvested4		U.S. Consumer Price Index (inflation)5
3/26/1993	$	9,425	$	9,425	$	10,000	$	10,000
5/31/1993		9,719		9,719		10,837		10,042
8/31/1993		10,401		10,313		11,475		10,084
11/30/1993		10,782		10,625		10,924		10,153
2/28/1994		11,615		11,388		12,062		10,216
5/31/1994		11,315		11,044		11,936		10,272
8/31/1994		12,038		11,656		12,501		10,376
11/30/1994		11,592		11,131		11,982		10,425
2/28/1995		11,860		11,293		12,097		10,508
5/31/1995		12,788		12,094		13,242		10,599
8/31/1995		13,412		12,557		13,598		10,648
11/30/1995		13,841		12,850		14,260		10,696
2/29/1996		14,700		13,553		15,042		10,787
5/31/1996		15,327		14,031		15,673		10,905
8/31/1996		15,414		13,947		15,379		10,954
11/30/1996		17,118		15,362		17,004		11,045
2/28/1997		17,849		15,936		17,136		11,114
5/31/1997		18,908		16,782		18,427		11,149
8/31/1997		19,755		17,380		18,892		11,198
11/30/1997		19,917		17,414		19,212		11,247
2/28/1998		21,881		19,050		21,351		11,274
5/31/1998		22,801		19,763		22,198		11,337
8/31/1998		19,885		17,104		19,671		11,379
11/30/1998		23,007		19,676		23,138		11,421
2/28/1999		23,904		20,375		24,151		11,455
5/31/1999		25,004		21,214		25,203		11,574
8/31/1999		26,177		22,063		26,263		11,636
11/30/1999		27,396		23,014		28,141		11,720
2/29/2000		29,908		25,027		28,765		11,825
5/31/2000		30,124		25,119		28,718		11,943
8/31/2000		31,516		26,121		29,799		12,033
11/30/2000		29,142		24,016		26,067		12,124
2/28/2001		30,810		25,334		24,728		12,242
5/31/2001		31,113		25,404		24,514		12,375
8/31/2001		29,274		23,786		22,316		12,361
11/30/2001		28,613		23,111		21,975		12,354
2/28/2002		28,826		23,225		21,266		12,382
5/31/2002		30,788		24,700		21,514		12,521
8/31/2002		26,985		21,503		18,550		12,584
11/30/2002		27,405		21,693		18,697		12,625
2/28/2003		25,681		20,237		16,961		12,751
5/31/2003		29,144		22,806		19,487		12,779
8/31/2003		31,622		24,576		20,680		12,855
11/30/2003		35,220		27,230		22,391		12,848
2/29/2004		39,110		30,063		24,603		12,967
5/31/2004		37,996		29,064		24,197		13,169
8/31/2004		38,489		29,275		24,018		13,196
11/30/2004		43,044		32,485		26,414		13,301
2/28/2005		45,627		34,128		27,680		13,357
5/31/2005		44,120		32,857		27,074		13,538
8/31/2005		47,417		35,102		28,507		13,677
11/30/2005		49,405		36,422		29,519		13,760
2/28/2006		53,238		38,938		31,500		13,837
5/31/2006		54,442		39,665		32,097		14,102
8/31/2006		56,740		41,006		33,164		14,199
11/30/2006		60,955		43,831		35,678		14,032

[end mountain chart]

Year ended
November 30		19936		1994		1995		1996	1997	1998	1999
Total value
Dividends reinvested	$	144		295		421		506	488	478	440
Value at year-end1	$	10,782		11,592		13,841		17,118	19,917	23,007	27,396
WGI total return		7.8	%	7.5		19.4		23.7	16.4	15.5	19.1
Year ended
November 30		2000		2001		2002		2003	2004	2005	2006
Total value
Dividends reinvested		577		578		569		679	914	1,043	1,315
Value at year-end1		29,142		28,613		27,405		35,220	43,044	49,405	60,955
WGI total return		6.4		(1.8	)	(4.2	)	28.5	22.2	14.8	23.4

Average annual total return for fund’s lifetime 14.1%²

¹As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares.

²Includes reinvested dividends of $8,447 and reinvested capital gain distributions of $12,892.

³Results calculated with capital gains reinvested.

⁴The MSCI World Index is unmanaged and includes reinvested dividends, but does not reflect the effects of sales charges, commissions or expenses.

⁵Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.

⁶For the period March 26, 1993 (when the fund began operations), through November 30, 1993.

The results shown are before taxes on fund distributions and sale of fund shares.

Average annual total returns based on a $1,000 investment (for periods ended November 30, 2006)*

	1 year		5 years		10 years
Class A shares	+16.28	%	+14.96	%	+12.87	%

*Assumes reinvestment of all distributions and payment of the maximum 5.75% sales charge.

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 22 and 23 for details.

Other share class results

unaudited

Class B, Class C, Class F and Class 529

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

Average annual total returns for periods ended December 31, 2006
(the most recent calendar quarter):
	1 year		5 years		Life of class
Class B shares— first sold 3/15/00
Reflecting applicable contingent deferred sales
charge (CDSC), maximum of 5%, payable only
if shares are sold within six years of purchase	+16.37	%	+15.57	%	+10.52	%
Not reflecting CDSC	+21.37	%	+15.80	%	+10.52	%
Class C shares— first sold 3/15/01
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase	+20.29	%	+15.73	%	+12.82	%
Not reflecting CDSC	+21.29	%	+15.73	%	+12.82	%
Class F shares*— first sold 3/15/01
Not reflecting annual asset-based fee charged
by sponsoring firm	+22.30	%	+16.62	%	+13.71	%
Class 529-A shares†— first sold 2/15/02
Reflecting 5.75% maximum sales charge	+15.21	%	—		+15.84	%
Not reflecting maximum sales charge	+22.25	%	—		+17.26	%
Class 529-B shares†— first sold 2/21/02
Reflecting applicable CDSC, maximum of 5%,
payable only if shares are sold
within six years of purchase	+16.23	%	—		+16.43	%
Not reflecting CDSC	+21.23	%	—		+16.66	%
Class 529-C shares†— first sold 2/22/02
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase	+20.25	%	—		+16.66	%
Not reflecting CDSC	+21.25	%	—		+16.66	%
Class 529-E shares*†— first sold 3/4/02	+21.86	%	—		+16.26	%
Class 529-F shares*†— first sold 9/17/02
Not reflecting annual asset-based fee charged
by sponsoring firm	+22.49	%	—		+22.66	%

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 22 and 23 for details.

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

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

A time-tested objective

[photo of a vineyard in a countryside - buildings on a hill in the background]

For the past four fiscal years, Capital World Growth and Income Fund has delivered exceptional returns aided, in part, by broad advances in global stock markets. That has not always been the case. Earlier this decade when stock prices retreated around the world, the fund experienced modest losses, though its results were better than its benchmark, the MSCI World Index. In fact, Capital World Growth and Income Fund has weathered an assortment of market cycles and events — some of them global in nature, others more regional — since its inception in March 1993.

In this article, we’ll take a look at how the fund has done under a variety of market conditions, some favorable, some not. Our purpose is to demonstrate how the fund’s objective and investment approach have served the long-term goals of shareholders and, in the process, made Capital World Growth and Income Fund one of the largest global funds.

Bullish beginnings

Capital World Growth and Income Fund was launched near the beginning of what proved to be an extended bull market for global stocks. From March 1993 through December 1999, the MSCI World Index (an aggregate of global stock indices) rose more than 200%. Fund results echoed this momentum, posting positive returns — six of them double-digit — in each of the first seven fiscal years (see chart at right).

A closer look at each of those fiscal periods, however, reveals a less unified momentum. During 1994, for example, volatility caused by rising interest rates dampened returns for both the fund and its benchmark; however, a strengthening of major currencies against the dollar helped mitigate some of the weakness and bolstered returns by fiscal year-end. Nonetheless, fund results fell short of the index for the first time in 1994.

Volatility was also prevalent in global markets during the late 1990s, though it is not apparent in the strong returns recorded for those years. In 1997, Asian currencies devalued, sending stock markets lower around the world. Then in 1998, Russia defaulted on its debt. These consecutive events incited a significant, though relatively short-lived, selloff in global markets during the summer of 1998. Fund results, while healthy, lagged the index that year and again in 1999 when technology stocks were driving market valuations to historic highs. The fund’s lagging returns at the end of the ’90s hinted at important differences between the fund and the index — distinctions that served the fund well when the technology bubble finally burst and markets around the world plummeted.

An eye to income and value

The MSCI World Index serves as an impartial gauge of global stock markets, reflecting investor momentum and the market capitalization of industries and corporations worldwide. Capital World Growth and Income Fund, on the other hand, is decidedly partial in its investment approach, which serves the fund’s objective. Portfolio counselor Mark Denning, who has been with the fund since inception, identifies the approach as traditional value investing. “We invest in stocks that have above-average dividend yields and above-average growth potential. Quite often, these are stocks of well-established companies whose longer term prospects have not been fully recognized by the marketplace.” This focus, which is essentially conservative in nature, distinguishes the fund from most of its peers and contrasts with the index, which is a passive reflector of market activity, not a selective investor. This distinction gets at the differences in results over time and at critical points in a market’s cycle.

“In the late ’90s, the fund was overshadowed because of its value orientation,” explains Mark. “The market was riding high on growth stories, fueled by telecom, media and technology companies. Of the three, telecom is the only sector where we had a meaningful participation, because many of those companies were established entities with a history of paying dividends.” While our selective focus limited the fund’s upside during the go-go ’90s, it also helped cushion the downside in the years that followed.

Weathering the worst

The first tremors of a major market correction were felt early in 2000. Over the next two-and-a-half years, the MSCI World Index lost nearly 50% of its value; some local stock exchanges recorded even greater declines. Though Capital World Growth and Income Fund suffered the effects of this correction as well, its decline was nowhere near as severe as that of the index. (See table on page 8.) One of the reasons the fund fared better was its focus on dividends.

[Begin Sidebar]

Figures shown are past results for Class A shares and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com. Fund results shown, unless otherwise indicated, are at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower.

A history of results

This chart shows each of the fund’s fiscal year results compared to its benchmark, the MSCI World Index. Though fund results lagged the index on three occasions in the 1990s, returns were better for all remaining years, providing a higher cumulative return for long-term investors.

[photo of grapes hanging on a vine]

	Fund returns		MSCI World Index returns
1993*	14.4	%	9.2	%
1994	7.5	%	9.7	%
1995	19.4	%	19.0	%
1996	23.7	%	19.2	%
1997	16.4	%	13.0	%
1998	15.5	%	20.4	%
1999	19.1	%	21.6	%
2000	6.4	%	-7.4	%
2001	-1.8	%	-15.7	%
2002	-4.2	%	-14.9	%
2003	28.5	%	19.8	%
2004	22.2	%	18.0	%
2005	14.8	%	11.8	%
2006	23.4	%	20.9	%

*3/26/93 - 11/30/93

Index returns are in U.S. dollars with gross dividends reinvested. The fund’s returns are calculated at net asset value with all distributions reinvested.

[End Sidebar]

“Dividends are a buffer for investors during those inevitable periods of weak growth,” notes portfolio counselor and fund president, Steve Bepler, who also has been with the fund since inception. “Dividends are also a measure of a company’s health. Those that pay dividends typically have a solid market position, reliable cash flows and are, therefore, better equipped to withstand periods of economic weakness.”

The severe global downturn that battered stocks and bruised economies finally gave way to recovery in 2003. Still, it was not until January 2006 that the MSCI World Index managed to fully recover from its market low of October 2002. Capital World Growth and Income Fund, on the other hand, fully retraced its lost ground within a year’s time, by the beginning of September 2003. Since then, the fund has gone on to deliver successive years of double-digit returns, spurred by advances in global markets and enhanced by its value-oriented approach.

[Begin Sidebar]

[photo of a row of grapevines]

Declines of 10% or more in the MSCI World Index

Since the fund’s inception, there have been three major global market corrections as measured by the MSCI World Index. Two of these were relatively brief in duration, but not the decline of 2000 to 2002, which was long, severe and damaging to many investor portfolios.

The table below compares the fund’s results to the index declines during these three periods. During the first two corrections, which were steeper and longer than the third, the fund proved more resilient. While that was not the case during the most recent and briefest correction, the fund nonetheless rebounded smartly to end the fiscal year with a return well above that of the index.

High to Low	MSCI World Index returns		Fund returns
7/20/98 - 10/5/98	-20.24	%	-17.34	%
3/27/00 - 10/9/02	-49.38		-25.88
5/9/06 - 6/13/06	-11.21		-12.78

Decline dates are based on the MSCI World Index and assume 100% recovery. Index returns are in U.S. dollars with gross dividends reinvested. The fund’s returns are calculated with all distributions reinvested.

[End Sidebar]

A measure of endurance

The pattern of results delivered by the fund over time discloses a characteristic prized by conscientious investors. That is: The fund has tended to capture most of the market’s upside when stock prices were rising, yet has typically lost less ground when markets were declining. While this tendency did not prevail in every isolated market move — the brief correction of this past year is one exception — it has been the case over broader market cycles and can be glimpsed in the comparative annual returns on page 7. To quantify this pattern, the fund has captured 110% of the market’s upside (as recorded by the MSCI World Index) and only 62% of its declines over its lifetime. These numbers attest to the fund’s strength over full market cycles.

Both upside and downside measures are important assessments of a fund’s stamina — its ability to thrive and survive over long periods. The downside measure, however, is the key to long-term sustainability. A fund that is less susceptible to market declines retains more of its value for shareholders and is, therefore, in a better position to increase wealth when markets begin to recover. Steve adds, “It’s great to get good returns; it’s more important to keep them. This is one of the lessons that investors learned from the severe downturn of 2000 to 2002.”

Research drives results

Capital World Growth and Income Fund’s long-term success can be traced, in large part, to the investment process that serves the fund’s objective. This process relies on fundamental research to help the fund’s portfolio counselors identify those companies that are well positioned to meet the growth-and-income objective at any given point in a market cycle. Gadi Slade, one of the fund’s research analysts, explains, “We employ a bottom up approach, carefully examining the strengths and weaknesses of each company we cover. We then look for relative values among these companies. In most cases, these are ‘blue chip’ companies with good growth prospects that we believe are undervalued by the market.”

[Begin pull quote]

It’s great to get good returns; it’s more important to keep them. This is one of the lessons that investors learned from the severe downturn of 2000 to 2002.”

— Steve Bepler

[End pull quote]

Gadi also serves as a coordinator for the fund’s research portfolio — the portion of assets (about 25%) that are managed directly by analysts. The research portfolio takes our fundamental analysis a step further by compelling analysts to think like portfolio counselors and to take into account the practicalities of buying and selling stocks. The research portfolio also helps fund counselors better discern the strength of the analysts’ convictions by seeing how analysts structure their portfolios. Befitting its global reach, Capital World Growth and Income Fund had more than 60 analysts from around the world participating in its research portfolio this past year.

The fund’s global scope, coupled with its multiple counselors and analysts, accommodates a wide range of investment perspectives and specializations. These varying views, in turn, foster broad diversification in the fund’s portfolio as a whole, which encompasses more than 380 companies located in 37 different countries. This diversification — across companies, industries and countries — helps to reduce volatility and downside risks to the portfolio because markets seldom move in sync and industries can rotate in or out of favor at differing points in economic and market cycles.

Benefits from a long-term view

The strong returns of the past four years are not a predictor of future returns. At some point, markets around the world will surely correct, whether briefly or for an extended period. Though difficult to stomach, market corrections may also benefit patient, far-sighted investors. Corrections are often a catalyst for identifying the fittest and ablest companies, as it takes good management, a solid business and a strong balance sheet to withstand declines brought about by economic weakness. Also, by repricing the markets lower, excesses can be removed from equity valuations and fresh, attractive entry levels can be established for desirable companies.

Of course, it helps to have a long-term investment outlook when weathering difficult market conditions. It is also important to be well-diversified with a portfolio of companies that have a proven ability to endure and thrive. Long-time holders of Capital World Growth and Income Fund understand this. They have survived the ups and downs of global markets and been rewarded for their patience. The fund’s growth-and-income objective, served by a value orientation and our fundamental research, has established a compelling track record that we strive daily to uphold. This is an investment approach that is not just time-tested, but also timeless.

[Begin Sidebar]

Rolling 10-year periods

[photo of six wine bottles in a crate]

Over longer periods of time, Capital World Growth and Income Fund has demonstrated remarkable consistency and delivered impressive results. This can be seen in the table below, which shows the fund’s average annual total returns over 10-year rolling periods and compares them to its benchmark.

10-year periods	Fund returns		MSCI World Index returns
11/30/93 - 11/30/03	12.6	%	7.4	%
11/30/94 - 11/30/04	14.0		8.2
11/30/95 - 11/30/05	13.6		7.5
11/30/96 - 11/30/06	13.5		7.7

Index returns are in U.S. dollars with gross dividends reinvested. The fund’s returns are calculated with all distributions reinvested.

[End Sidebar]

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 diversification	Percent of net assets
Financials	20.51	%
Consumer discretionary	10.31
Materials	8.64
Telecommunication services	8.33
Energy	8.24
Other industries	34.66
Convertible securities	.48
Bonds & notes	.49
Short-term securities and other assets less liabilities	8.34

[end chart]
 

			Market			Percent
				value			of net
Common stocks - 90.69%	Shares			(000	)		assets
Financials - 20.51%
Banco Santander Central Hispano, SA	48,272,604		$	876,379			1.10	%
UniCredito Italiano SpA (Italy)	77,740,000			670,984
UniCredito Italiano SpA (Germany)	13,500,000			116,377			.98
HSBC Holdings PLC (United Kingdom)	29,384,269			541,878
HSBC Holdings PLC (Hong Kong)	7,854,000			145,904			.86
BNP Paribas	5,595,870			602,808			.75
Citigroup Inc.	12,014,500			595,799			.75
Société Générale	3,423,512			573,477			.72
AXA SA	14,277,722			540,728			.68
Lloyds TSB Group PLC	49,915,000			530,408			.66
ING Groep NV	12,196,834			519,902			.65
Fortis (Netherlands)	12,214,100			497,833
Fortis (Belgium)	300,000			12,232			.64
Shinhan Financial Group Co., Ltd.	10,211,500			497,385			.62
Sun Hung Kai Properties Ltd.	43,445,000			492,068			.62
Banco Itaú Holding Financeira SA, preferred nominative	12,540,100			418,583			.52
Other securities				8,766,806			10.96
				16,399,551			20.51
Consumer discretionary - 10.31%
Vivendi SA	23,052,400			886,780			1.11
Compagnie Générale des Etablissements Michelin, Class B	7,169,000			622,753			.78
Greek Organization of Football Prognostics SA	15,949,410			599,814			.75
Hyundai Motor Co.	6,501,500			492,686			.61
Continental AG	4,164,050			472,884			.59
Other securities				5,170,869			6.47
				8,245,786			10.31
Materials - 8.64%
Bayer AG	19,952,000			1,028,548			1.29
China Steel Corp.	551,485,660			559,157			.70
Barrick Gold Corp.	15,291,000			480,749
Barrick Gold Corp. (CAD denominated)	1,931,540			60,573			.68
Koninklijke DSM NV	10,097,356			481,219			.60
Other securities				4,297,469			5.37
				6,907,715			8.64
Telecommunication services - 8.33%
Koninklijke KPN NV	59,962,620			821,816			1.03
AT&T Inc.	20,196,824			684,874			.86
Vodafone Group PLC	237,518,328			628,063			.78
Telekom Austria AG	18,892,393			500,346			.63
France Télécom SA	17,405,000			451,735			.56
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk, Class B	368,927,000			398,557			.50
Other securities				3,178,097			3.97
				6,663,488			8.33
Energy - 8.24%
Royal Dutch Shell PLC, Class B	20,949,312			748,356
Royal Dutch Shell PLC, Class A (ADR)	5,220,000			370,777
Royal Dutch Shell PLC, Class A	7,850,000			277,130
Royal Dutch Shell PLC, Class B (ADR)	1,142,148			82,098			1.85
TOTAL SA	9,243,000			655,429
TOTAL SA (ADR)	2,250,000			160,785			1.02
Chevron Corp.	9,376,962			678,142			.85
Other securities				3,611,679			4.52
				6,584,396			8.24
Consumer staples - 7.67%
Diageo PLC	55,365,500			1,062,906			1.33
Altria Group, Inc.	12,470,000			1,050,099			1.31
Tesco PLC	77,505,563			596,171			.74
Nestlé SA	1,379,500			486,963			.61
Other securities				2,939,618			3.68
				6,135,757			7.67
Health care - 6.78%
Roche Holding AG	6,484,566			1,171,584			1.47
Novo Nordisk A/S, Class B	11,322,200			874,328			1.09
AstraZeneca PLC (Sweden)	7,416,800			429,438
AstraZeneca PLC (United Kingdom)	3,405,000			197,480			.78
Other securities				2,750,306			3.44
				5,423,136			6.78
Information technology - 6.66%
Microsoft Corp.	26,699,000			783,082			.98
Nokia Corp.	21,521,750			432,901
Nokia Corp. (ADR)	7,250,300			146,601			.72
Taiwan Semiconductor Manufacturing Co. Ltd.	121,306,770			245,613
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)	19,778,888			212,623			.57
International Business Machines Corp.	4,430,000			407,206			.51
Other securities				3,100,244			3.88
				5,328,270			6.66
Utilities - 5.69%
E.ON AG	7,822,214			1,004,329			1.26
Veolia Environnement	10,550,000			698,376			.87
Electricité de France SA	9,369,000			600,471			.75
RWE AG	3,598,403			407,932			.51
Other securities				1,833,871			2.30
				4,544,979			5.69
Industrials - 5.18%
General Electric Co.	16,080,000			567,302			.71
United Parcel Service, Inc., Class B	6,191,700			482,457			.60
Other securities				3,092,502			3.87
				4,142,261			5.18
Miscellaneous - 2.68%
Other common stocks in initial period of acquisition				2,142,423			2.68
Total common stocks (cost: $55,170,729,000)				72,517,762			90.69
Convertible securities - 0.48%
Other - 0.48%
Other securities				385,588			.48
Total convertible securities (cost: $396,778,000)				385,588			.48
Bonds & notes - 0.49%
Other - 0.49%
Other securities				390,567			.49
Total bonds & notes (cost: $358,872,000)				390,567			.49
Short-term securities - 8.27%	Principal amount (000	)
BNP Paribas Finance Inc. 5.24%-5.27% due 12/1/2006-1/18/2007	225,000			224,435			.28
HSBC USA Inc. 5.22%-5.25% due 12/8/2006-3/16/2007	185,000			183,878			.23
Other securities				6,207,223			7.76
Total short-term securities (cost: $6,614,691,000)				6,615,536			8.27
Total investment securities (cost: $62,541,070,000)				79,909,453			99.93
Other assets less liabilities				54,979			.07
Net assets			$	79,964,432			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, including some securities for which resale may be limited to qualified institutional buyers or may require registration. The total value of such restricted securities was $3,024,072,000, which represented 3.78% of the net assets of the fund.

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 market value of the fund's affiliated-company is included in "Other securities" under

their respective industry sectors in the preceding summary investment portfolio. Further details on these holdings

and related transactions during the year ended November 30, 2006, appear below.

Company	Beginning shares	Purchases	Sales	Ending shares		Dividend income (000)		Market value of affiliates at 11/30/06 (000)
Mediceo Paltac Holdings Co., Ltd.*	14,930,500	-	14,930,500	-	$	920	$	-
Asahi Diamond Industrial Co., Ltd.*	3,950,000	-	3,950,000	-		164		-
Spark Infrastructure	-	56,535,632	-	56,535,632		2,229		52,399
					$	3,313	$	52,399
* Unaffiliated issuer at 11/30/2006.

ADR = American Depositary Receipts

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: $62,489,693)	$	79,857,054
Affiliated issuers (cost: $51,377)		52,399	$	79,909,453
Cash denominated in non-U.S. currencies
(cost: $16,553)				16,754
Cash				3,663
Receivables for:
Sales of investments	$	110,886
Sales of fund's shares		202,425
Dividends and interest		145,980		459,291
				80,389,161
Liabilities:
Payables for:
Purchases of investments		295,393
Repurchases of fund's shares		48,842
Investment advisory services		21,786
Services provided by affiliates		48,396
Deferred directors' compensation		1,263
Other		9,049		424,729
Net assets at November 30, 2006			$	79,964,432
Net assets consist of:
Capital paid in on shares of capital stock			$	58,673,646
Undistributed net investment income				541,515
Undistributed net realized gain				3,387,065
Net unrealized appreciation				17,362,206
Net assets at November 30, 2006			$	79,964,432

Total authorized capital stock - 4,000,000 shares, $.01 par value (1,869,761 total shares outstanding)
		Net assets	Shares outstanding		Net asset value per share*
Class A	$	60,265,115	1,407,414	$	42.82
Class B		3,443,259	80,857		42.58
Class C		6,572,438	154,797		42.46
Class F		4,173,588	97,604		42.76
Class 529-A		1,088,497	25,464		42.75
Class 529-B		141,674	3,326		42.59
Class 529-C		303,862	7,135		42.59
Class 529-E		53,266	1,248		42.69
Class 529-F		22,089	516		42.78
Class R-1		86,116	2,024		42.55
Class R-2		793,124	18,679		42.46
Class R-3		1,137,770	26,689		42.63
Class R-4		860,231	20,119		42.76
Class R-5		1,023,403	23,889		42.84
(*) 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 $45.43 and $45.36, respectively.
See Notes to Financial Statements

Statement of operations
for the year ended November 30, 2006		(dollars in thousands)
Investment income:
Income:
IDividends (net of non-U.S. taxes of $163,165; also includes
$3,313 from affiliates)	$	1,700,750
Interest (net of non-U.S. taxes of $608)		357,226		$	2,057,976
Fees and expenses(*):
Investment advisory services		249,061
Distribution services		215,701
Transfer agent services		47,352
Administrative services		20,694
Reports to shareholders		3,211
Registration statement and prospectus		3,600
Postage, stationery and supplies		4,560
Directors' compensation		700
Auditing and legal		116
Custodian		14,839
State and local taxes		550
Other		192
Total fees and expenses before reimbursements/waivers		560,576
Less reimbursements/waivers of fees and expenses:
Investment advisory services		24,906
Administrative services		711
Total fees and expenses after reimbursements/waivers					534,959
Net investment income					1,523,017
Net realized gain and unrealized appreciation on investments and non-U.S. currency:
Net realized gain (loss) on:
Investments (including $71,114 net gain from affiliates)		3,651,558
Non-U.S. currency transactions		(8,071	)		3,643,487
Net unrealized appreciation on:
Investments		8,410,436
Non-U.S. currency translations		2,165			8,412,601
Net realized gain and unrealized appreciation
on investments and non-U.S. currency					12,056,088
Net increase in net assets resulting from operations				$	13,579,105
(*) 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	$	1,523,017		$	933,122
Net realized gain on investments and non-U.S. currency transactions		3,643,487			2,076,338
Net unrealized appreciation on investments and non-U.S. currency translations		8,412,601			2,701,924
Net increase in net assets resulting from operations		13,579,105			5,711,384
Dividends and distributions paid to shareholders:
Dividends from net investment income and non-U.S. currency gain		(1,457,079	)		(831,717	)
Distributions from net realized gain on investments		(2,018,554	)		(736,061	)
Total dividends and distributions paid to shareholders		(3,475,633	)		(1,567,778	)
Capital share transactions		18,681,372			16,167,034
Total increase in net assets		28,784,844			20,310,640
Net assets:
Beginning of year		51,179,588			30,868,948
End of year (including undistributed net investment
income: $541,515 and $411,238, respectively)	$	79,964,432		$	51,179,588
See Notes to Financial Statements

Notes to financial statements     

1.    Organization and significant accounting policies

Organization - Capital World Growth and Income Fund, Inc. (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 while providing current income. It invests on a global basis in a diversified portfolio consisting primarily of common stocks and other equity securities.

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 directors. 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 $4,745,000. As of November 30, 2006, non-U.S. taxes provided on unrealized gains were $7,503,000.

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; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in non-U.S. securities; cost of investments sold; 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. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

During the year ended November 30, 2006, the fund reclassified $64,672,000 from undistributed net realized gain to undistributed net investment income; and reclassified $333,000 from undistributed net investment income and $188,269,000 from undistributed net realized gain to capital paid in on shares of capital stock 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	$	554,544
Post-October non-U.S. currency loss deferrals (realized during the period November 1, 2006, through November 30, 2006)*		(553	)
Undistributed long-term capital gain		3,390,088
Gross unrealized appreciation on investment securities		17,713,512
Gross unrealized depreciation on investment securities		(359,365	)
Net unrealized appreciation on investment securities		17,354,147
Cost of investment securities		62,555,306
*These deferrals are considered incurred in the subsequent year.

The tax character of distributions paid to shareholders was as follows (dollars in thousands):

		Year ended November 30, 2006						Year ended November 30, 2005
		Ordinary income		Long-term capital gains		Total distributions paid		Ordinary income		Long-term capital gains		Total distributions paid
Share class
Class A	$	1,173,972	$	1,566,910	$	2,740,882	$	695,208	$	597,794	$	1,293,002
Class B		44,562		85,725		130,287		24,114		30,413		54,527
Class C		79,181		151,292		230,473		36,850		44,527		81,377
Class F		74,253		96,470		170,723		37,021		29,845		66,866
Class 529-A		18,835		23,467		42,302		8,386		6,540		14,926
Class 529-B		1,627		3,250		4,877		771		1,066		1,837
Class 529-C		3,386		6,522		9,908		1,463		1,924		3,387
Class 529-E		819		1,202		2,021		372		348		720
Class 529-F		411		472		883		173		136		309
Class R-1		950		1,761		2,711		378		417		795
Class R-2		9,296		17,522		26,818		4,127		4,873		9,000
Class R-3		16,829		25,037		41,866		7,637		6,848		14,485
Class R-4		14,171		17,707		31,878		5,766		4,494		10,260
Class R-5		18,787		21,217		40,004		9,451		6,836		16,287
Total	$	1,457,079	$	2,018,554	$	3,475,633	$	831,717	$	736,061	$	1,567,778

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 providedfor monthly fees accrued daily. At the beginning of the period, these fees are based on a declining series of annual rates beginning with 0.600% on the first $500 million of daily net assets and decreasing to 0.360% on such assets in excess of $55 billion. The board of directors approved an amended agreement effective November 1, 2006, continuing the series of rates to include additional annual rates of 0.356% on daily net assets in excess of $71 billion but not exceeding $89 billion; and 0.352% on such assets in excess of $89 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 $24,906,000. As a result, the fee shown on the accompanying financial statements of $249,061,000, which was equivalent to an annualized rate of 0.380%, was reduced to $224,155,000, or 0.342% 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 directors 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 0.30% to 1.00% as noted below. In some cases, the board of directors 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 directors 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 0.30% 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	0.30%	0.30%
Class 529-A	0.30	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 $5,000 and $706,000 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
			CRMC administrative services	Transfer agent services	Commonwealth of Virginia administrative services
Class A	$111,142	$44,371	Not applicable	Not applicable	Not applicable
Class B	28,161	2,981	Not applicable	Not applicable	Not applicable
Class C	51,973	Included in administrative services	$7,132	$1,019	Not applicable
Class F	8,133		2,686	436	Not applicable
Class 529-A	1,455		661	105	$837
Class 529-B	1,115		88	47	112
Class 529-C	2,317		184	74	232
Class 529-E	210		33	5	42
Class 529-F	-		14	2	17
Class R-1	636		84	34	Not applicable
Class R-2	4,608		908	2,347	Not applicable
Class R-3	4,373		1,274	584	Not applicable
Class R-4	1,578		923	35	Not applicable
Class R-5	Not applicable		763	16	Not applicable
Total	$215,701	$47,352	$14,750	$4,704	$1,240

Deferred directors’ compensation - Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMCmay 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. Directors’ compensation of $700,000, shown on the accompanying financial statements, includes $474,000 in current fees (either paid in cash or deferred) and a net increase of $226,000 in the value of the deferred amounts.

Affiliated officers and directors - Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors 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 and distributions			Repurchases*					Net increase
		Amount	Shares		Amount	Shares		Amount		Shares			Amount	Shares
Year ended November 30, 2006
Class A	$	14,421,402	369,802	$	2,627,089	71,294	$	(4,325,381	)	(110,788	)	$	12,723,110	330,308
Class B		943,607	24,326		125,519	3,435		(215,465	)	(5,546	)		853,661	22,215
Class C		2,294,884	59,263		220,045	6,037		(525,031	)	(13,562	)		1,989,898	51,738
Class F		1,570,048	40,122		153,458	4,169		(500,309	)	(12,866	)		1,223,197	31,425
Class 529-A		364,872	9,376		42,297	1,148		(35,371	)	(904	)		371,798	9,620
Class 529-B		42,008	1,083		4,877	134		(3,838	)	(99	)		43,047	1,118
Class 529-C		109,350	2,814		9,908	271		(13,867	)	(356	)		105,391	2,729
Class 529-E		17,366	448		2,021	55		(2,281	)	(58	)		17,106	445
Class 529-F		8,449	217		883	24		(1,622	)	(42	)		7,710	199
Class R-1		40,698	1,045		2,653	73		(11,512	)	(297	)		31,839	821
Class R-2		355,459	9,179		26,793	735		(121,626	)	(3,134	)		260,626	6,780
Class R-3		515,578	13,241		41,837	1,141		(184,147	)	(4,734	)		373,268	9,648
Class R-4		427,872	10,967		31,844	864		(136,093	)	(3,500	)		323,623	8,331
Class R-5		401,305	10,365		37,512	1,015		(81,719	)	(2,098	)		357,098	9,282
Total net increase
(decrease)	$	21,512,898	552,248	$	3,326,736	90,395	$	(6,158,262	)	(157,984	)	$	18,681,372	484,659
Year ended November 30, 2005
Class A	$	12,618,355	365,651	$	1,233,618	37,169	$	(2,402,093	)	(69,476	)	$	11,449,880	333,344
Class B		771,268	22,485		52,649	1,601		(105,101	)	(3,053	)		718,816	21,033
Class C		1,825,841	53,327		77,734	2,368		(252,790	)	(7,366	)		1,650,785	48,329
Class F		1,192,571	34,617		60,518	1,823		(244,123	)	(7,086	)		1,008,966	29,354
Class 529-A		269,162	7,812		14,925	449		(16,248	)	(470	)		267,839	7,791
Class 529-B		30,143	878		1,836	56		(1,444	)	(42	)		30,535	892
Class 529-C		71,464	2,080		3,387	103		(5,354	)	(155	)		69,497	2,028
Class 529-E		12,937	376		720	22		(845	)	(24	)		12,812	374
Class 529-F		5,383	156		309	10		(538	)	(16	)		5,154	150
Class R-1		29,691	862		785	24		(6,536	)	(189	)		23,940	697
Class R-2		245,528	7,163		8,993	273		(52,505	)	(1,525	)		202,016	5,911
Class R-3		387,808	11,277		14,477	437		(107,696	)	(3,135	)		294,589	8,579
Class R-4		276,049	7,971		10,259	308		(65,161	)	(1,888	)		221,147	6,391
Class R-5		257,382	7,460		14,806	445		(61,130	)	(1,783	)		211,058	6,122
Total net increase
(decrease)	$	17,993,582	522,115	$	1,495,016	45,088	$	(3,321,564	)	(96,208	)	$	16,167,034	470,995
* Includes exchanges between share classes of the fund.

6. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities, of $32,411,624,000 and $18,006,495,000, 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		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 to average net assets
Class A:
Year ended 11/30/2006	$	36.99	$	.96	$	7.26		$	8.22		$	(.95	)	$	(1.44	)	$	(2.39	)	$	42.82	23.38	%	$	60,265				.73	%			.69	%			2.44	%
Year ended 11/30/2005		33.80		.84		3.95			4.79			(.80	)		(.80	)		(1.60	)		36.99	14.78			39,841				.76				.73				2.41
Year ended 11/30/2004		28.62		.70		5.50			6.20			(.73	)		(.29	)		(1.02	)		33.80	22.21			25,137				.77				.77				2.28
Year ended 11/30/2003		22.80		.65		5.73			6.38			(.56	)		-			(.56	)		28.62	28.52			14,703				.81				.81				2.70
Year ended 11/30/2002		24.29		.52		(1.53	)		(1.01	)		(.48	)		-			(.48	)		22.80	(4.22	)		10,016				.82				.82				2.22
Class B:
Year ended 11/30/2006		36.79		.64		7.24			7.88			(.65	)		(1.44	)		(2.09	)		42.58	22.40			3,443				1.53				1.49				1.65
Year ended 11/30/2005		33.63		.56		3.93			4.49			(.53	)		(.80	)		(1.33	)		36.79	13.91			2,158				1.55				1.52				1.62
Year ended 11/30/2004		28.50		.46		5.47			5.93			(.51	)		(.29	)		(.80	)		33.63	21.25			1,265				1.55				1.55				1.52
Year ended 11/30/2003		22.72		.45		5.72			6.17			(.39	)		-			(.39	)		28.50	27.52			537				1.58				1.58				1.85
Year ended 11/30/2002		24.21		.27		(1.45	)		(1.18	)		(.31	)		-			(.31	)		22.72	(4.93	)		219				1.59				1.59				1.47
Class C:
Year ended 11/30/2006		36.69		.62		7.22			7.84			(.63	)		(1.44	)		(2.07	)		42.46	22.35			6,572				1.58				1.54				1.60
Year ended 11/30/2005		33.54		.54		3.93			4.47			(.52	)		(.80	)		(1.32	)		36.69	13.83			3,781				1.61				1.57				1.56
Year ended 11/30/2004		28.43		.45		5.45			5.90			(.50	)		(.29	)		(.79	)		33.54	21.17			1,836				1.62				1.61				1.46
Year ended 11/30/2003		22.68		.42		5.71			6.13			(.38	)		-			(.38	)		28.43	27.40			615				1.65				1.65				1.71
Year ended 11/30/2002		24.18		.20		(1.40	)		(1.20	)		(.30	)		-			(.30	)		22.68	(4.95	)		179				1.65				1.65				1.43
Class F:
Year ended 11/30/2006		36.94		.94		7.26			8.20			(.94	)		(1.44	)		(2.38	)		42.76	23.35			4,174				.76				.72				2.41
Year ended 11/30/2005		33.75		.81		3.95			4.76			(.77	)		(.80	)		(1.57	)		36.94	14.72			2,445				.82				.78				2.35
Year ended 11/30/2004		28.59		.68		5.48			6.16			(.71	)		(.29	)		(1.00	)		33.75	22.09			1,243				.86				.85				2.21
Year ended 11/30/2003		22.78		.61		5.75			6.36			(.55	)		-			(.55	)		28.59	28.43			470				.89				.89				2.49
Year ended 11/30/2002		24.27		.31		(1.34	)		(1.03	)		(.46	)		-			(.46	)		22.78	(4.29	)		147				.91				.91				2.17
Class 529-A:
Year ended 11/30/2006		36.93		.93		7.26			8.19			(.93	)		(1.44	)		(2.37	)		42.75	23.33			1,089				.79				.75				2.39
Year ended 11/30/2005		33.75		.81		3.94			4.75			(.77	)		(.80	)		(1.57	)		36.93	14.68			585				.83				.80				2.33
Year ended 11/30/2004		28.59		.68		5.48			6.16			(.71	)		(.29	)		(1.00	)		33.75	22.08			272				.86				.85				2.21
Year ended 11/30/2003		22.78		.63		5.73			6.36			(.55	)		-			(.55	)		28.59	28.43			93				.87				.87				2.55
Period from 2/15/2002 to 11/30/2002		24.29		.36		(1.47	)		(1.11	)		(.40	)		-			(.40	)		22.78	(4.61	)		28				1.03		(5	)	1.03		(5	)	2.08		(5	)
Class 529-B:
Year ended 11/30/2006		36.80		.60		7.23			7.83			(.60	)		(1.44	)		(2.04	)		42.59	22.25			142				1.64				1.60				1.53
Year ended 11/30/2005		33.64		.51		3.93			4.44			(.48	)		(.80	)		(1.28	)		36.80	13.71			81				1.70				1.67				1.46
Year ended 11/30/2004		28.51		.40		5.48			5.88			(.46	)		(.29	)		(.75	)		33.64	21.02			44				1.75				1.74				1.32
Year ended 11/30/2003		22.74		.40		5.73			6.13			(.36	)		-			(.36	)		28.51	27.28			18				1.78				1.78				1.64
Period from 2/21/2002 to 11/30/2002		23.96		.23		(1.13	)		(.90	)		(.32	)		-			(.32	)		22.74	(3.82	)		5				1.79		(5	)	1.79		(5	)	1.31		(5	)
Class 529-C:
Year ended 11/30/2006		36.80		.60		7.24			7.84			(.61	)		(1.44	)		(2.05	)		42.59	22.27			304				1.63				1.59				1.54
Year ended 11/30/2005		33.63		.51		3.94			4.45			(.48	)		(.80	)		(1.28	)		36.80	13.73			162				1.69				1.65				1.47
Year ended 11/30/2004		28.50		.41		5.47			5.88			(.46	)		(.29	)		(.75	)		33.63	21.04			80				1.74				1.73				1.34
Year ended 11/30/2003		22.74		.41		5.71			6.12			(.36	)		-			(.36	)		28.50	27.25			29				1.76				1.76				1.66
Period from 2/22/2002 to 11/30/2002		23.98		.23		(1.15	)		(.92	)		(.32	)		-			(.32	)		22.74	(3.90	)		8				1.77		(5	)	1.77		(5	)	1.33		(5	)
Class 529-E:
Year ended 11/30/2006		36.89		.81		7.23			8.04			(.80	)		(1.44	)		(2.24	)		42.69	22.92			53				1.11				1.08				2.06
Year ended 11/30/2005		33.71		.69		3.94			4.63			(.65	)		(.80	)		(1.45	)		36.89	14.31			30				1.17				1.13				1.99
Year ended 11/30/2004		28.56		.57		5.48			6.05			(.61	)		(.29	)		(.90	)		33.71	21.67			14				1.21				1.20				1.86
Year ended 11/30/2003		22.77		.54		5.73			6.27			(.48	)		-			(.48	)		28.56	27.97			5				1.23				1.23				2.17
Period from 3/4/2002 to 11/30/2002		25.12		.31		(2.28	)		(1.97	)		(.38	)		-			(.38	)		22.77	(7.88	)		1				1.23		(5	)	1.23		(5	)	1.85		(5	)
Class 529-F:
Year ended 11/30/2006		36.95		1.00		7.27			8.27			(1.00	)		(1.44	)		(2.44	)		42.78	23.55			22				.61				.58				2.56
Year ended 11/30/2005		33.75		.83		3.94			4.77			(.77	)		(.80	)		(1.57	)		36.95	14.74			12				.76				.73				2.40
Year ended 11/30/2004		28.59		.65		5.49			6.14			(.69	)		(.29	)		(.98	)		33.75	21.98			6				.96				.95				2.12
Year ended 11/30/2003		22.80		.61		5.72			6.33			(.54	)		-			(.54	)		28.59	28.31			1				.98				.98				2.48
Period from 9/17/2002 to 11/30/2002		21.79		.08		1.07			1.15			(.14	)		-			(.14	)		22.80	5.33			-		(6	)	.20				.20				.39
Class R-1:
Year ended 11/30/2006	$	36.78	$	.62	$	7.21		$	7.83		$	(.62	)	$	(1.44	)	$	(2.06	)	$	42.55	22.31	%	$	86				1.60	%			1.56	%			1.58	%
Year ended 11/30/2005		33.63		.53		3.93			4.46			(.51	)		(.80	)		(1.31	)		36.78	13.78			44				1.63				1.58				1.54
Year ended 11/30/2004		28.50		.44		5.48			5.92			(.50	)		(.29	)		(.79	)		33.63	21.18			17				1.67				1.64				1.44
Year ended 11/30/2003		22.75		.38		5.77			6.15			(.40	)		-			(.40	)		28.50	27.43			5				1.78				1.66				1.48
Period from 6/7/2002 to 11/30/2002		25.08		.14		(2.37	)		(2.23	)		(.10	)		-			(.10	)		22.75	(8.85	)		-		(6	)	1.41				.80				.66
Class R-2:
Year ended 11/30/2006		36.70		.62		7.20			7.82			(.62	)		(1.44	)		(2.06	)		42.46	22.34			793				1.70				1.54				1.59
Year ended 11/30/2005		33.55		.54		3.93			4.47			(.52	)		(.80	)		(1.32	)		36.70	13.83			437				1.79				1.57				1.56
Year ended 11/30/2004		28.45		.45		5.45			5.90			(.51	)		(.29	)		(.80	)		33.55	21.15			201				1.93				1.60				1.47
Year ended 11/30/2003		22.73		.43		5.71			6.14			(.42	)		-			(.42	)		28.45	27.44			57				2.23				1.62				1.72
Period from 6/7/2002 to 11/30/2002		25.08		.13		(2.35	)		(2.22	)		(.13	)		-			(.13	)		22.73	(8.80	)		5				.93				.79				.61
Class R-3:
Year ended 11/30/2006		36.83		.80		7.24			8.04			(.80	)		(1.44	)		(2.24	)		42.63	22.86			1,138				1.13				1.09				2.05
Year ended 11/30/2005		33.67		.69		3.94			4.63			(.67	)		(.80	)		(1.47	)		36.83	14.34			628				1.15				1.12				2.00
Year ended 11/30/2004		28.53		.57		5.47			6.04			(.61	)		(.29	)		(.90	)		33.67	21.67			285				1.20				1.19				1.87
Year ended 11/30/2003		22.77		.50		5.75			6.25			(.49	)		-			(.49	)		28.53	27.90			76				1.29				1.24				1.98
Period from 6/6/2002 to 11/30/2002		25.42		.17		(2.52	)		(2.35	)		(.30	)		-			(.30	)		22.77	(9.25	)		5				.69				.60				.80
Class R-4:
Year ended 11/30/2006		36.94		.92		7.26			8.18			(.92	)		(1.44	)		(2.36	)		42.76	23.28			860				.82				.78				2.35
Year ended 11/30/2005		33.76		.79		3.96			4.75			(.77	)		(.80	)		(1.57	)		36.94	14.68			435				.84				.81				2.29
Year ended 11/30/2004		28.60		.68		5.49			6.17			(.72	)		(.29	)		(1.01	)		33.76	22.10			182				.85				.84				2.22
Year ended 11/30/2003		22.81		.55		5.80			6.35			(.56	)		-			(.56	)		28.60	28.36			25				.90				.89				2.18
Period from 6/27/2002 to 11/30/2002		23.78		.20		(1.02	)		(.82	)		(.15	)		-			(.15	)		22.81	(3.42	)		2				.46				.38				.92
Class R-5:
Year ended 11/30/2006		37.01		1.04		7.26			8.30			(1.03	)		(1.44	)		(2.47	)		42.84	23.63			1,023				.52				.48				2.64
Year ended 11/30/2005		33.81		.91		3.96			4.87			(.87	)		(.80	)		(1.67	)		37.01	15.06			541				.54				.50				2.63
Year ended 11/30/2004		28.63		.76		5.51			6.27			(.80	)		(.29	)		(1.09	)		33.81	22.49			287				.54				.54				2.48
Year ended 11/30/2003		22.81		.70		5.74			6.44			(.62	)		-			(.62	)		28.63	28.82			110				.56				.56				2.88
Period from 5/15/2002 to 11/30/2002		26.11		.30		(3.27	)		(2.97	)		(.33	)		-			(.33	)		22.81	(11.37	)		53				.56		(5	)	.56		(5	)	2.48		(5	)

	Year ended November 30
		2006		2005		2004		2003		2002
Portfolio turnover rate for all classes of shares		30	%	26	%	21	%	27	%	32	%

(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) Annualized.

(6) Amount less than $1 million.

See Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Capital World Growth and Income Fund, Inc.:

In our opinion, the accompanying statement of assets and liabilities, including the summary investment portfolio, and the related statements of operations and changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Capital World Growth and Income Fund, Inc. (the "Fund") at 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 its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements 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 are free of material misstatement. An audit 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, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities owned at November 30, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Los Angeles, California

January 5, 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:

Long-term capital gains	$	2,018,554,000
Foreign taxes		163,906,000
Foreign source income		1,804,781,000
Qualified dividend income		100	%
Corporate dividends received deduction	$	366,935,000
U.S. government income that may be exempt from state taxation		8,265,000

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.

Expense example

unaudited

As a shareholder of the fund, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (June 1, 2006, through November 30, 2006).

Actual expenses:

The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F and 529-F shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.

Hypothetical example for comparison purposes:

The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F and 529-F shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.

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

	Beginning account value 6/1/2006		Ending account value 11/30/2006			Expenses paid during period*		Annualized expense ratio
Class A -- actual return	$	1,000.00	$	1,119.61		$	3.61		.68	%
Class A -- assumed 5% return		1,000.00		1,021.66			3.45		.68
Class B -- actual return		1,000.00		1,115.09	��		7.85		1.48
Class B -- assumed 5% return		1,000.00		1,017.65			7.49		1.48
Class C -- actual return		1,000.00		1,114.91			8.11		1.53
Class C -- assumed 5% return		1,000.00		1,017.40			7.74		1.53
Class F -- actual return		1,000.00		1,119.37			3.77		.71
Class F -- assumed 5% return		1,000.00		1,021.51			3.60		.71
Class 529-A -- actual return		1,000.00		1,119.28			3.93		.74
Class 529-A -- assumed 5% return		1,000.00		1,021.36			3.75		.74
Class 529-B -- actual return		1,000.00		1,114.42			8.43		1.59
Class 529-B -- assumed 5% return		1,000.00		1,017.10			8.04		1.59
Class 529-C -- actual return		1,000.00		1,114.54			8.38		1.58
Class 529-C -- assumed 5% return		1,000.00		1,017.15			7.99		1.58
Class 529-E -- actual return		1,000.00		1,117.84			5.63		1.06
Class 529-E -- assumed 5% return		1,000.00		1,019.75			5.37		1.06
Class 529-F -- actual return		1,000.00		1,120.49			2.98		.56
Class 529-F -- assumed 5% return		1,000.00		1,022.26			2.84		.56
Class R-1 -- actual return		1,000.00		1,114.86			8.16		1.54
Class R-1 -- assumed 5% return		1,000.00		1,017.35			7.79		1.54
Class R-2 -- actual return		1,000.00		1,115.13			8.11		1.53
Class R-2 -- assumed 5% return		1,000.00		1,017.40			7.74		1.53
Class R-3 -- actual return		1,000.00		1,117.33			5.73		1.08
Class R-3 -- assumed 5% return		1,000.00		1,019.65			5.47		1.08
Class R-4 -- actual return		1,000.00		1,119.07			4.09		.77
Class R-4 -- assumed 5% return		1,000.00		1,021.21			3.90		.77
Class R-5 -- actual return		1,000.00		1,120.78			2.50		.47
Class R-5 -- assumed 5% return		1,000.00		1,022.71			2.38		.47
* Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (183), and divided by 365 (to reflect the one-half year period).

Approval of Investment Advisory and Service Agreements

The fund’s board has approved the fund’s Investment Advisory and Service Agreement (the “agreement”) with Capital Research and Management Company (“CRMC”) for an additional one-year term through October 31, 2007. The board approved the agreement following the recommendation of the board’s Contracts Committee (the “committee”), which is composed of all of the fund’s independent board members. The information, material factors and conclusions that formed the basis for the committee’s recommendation and the board’s subsequent approval are described below.

1. Information reviewed

Materials reviewed— During the course of each year, the board members review a wide variety of materials relating to the services provided by CRMC, including reports on the fund’s investment results; portfolio composition; portfolio trading practices; shareholder services; and other information relating to the nature, extent and quality of services provided by CRMC to the fund. In addition, the committee requests and reviews supplementary information that includes extensive materials regarding the fund’s investment results, advisory fee and expense comparisons, financial and profitability information regarding CRMC, descriptions of various functions such as compliance monitoring and portfolio trading practices, and information about the personnel providing investment management and administrative services to the fund.

Review process— The committee received assistance and advice regarding legal and industry standards from independent counsel to the board. The committee discussed the approval of the agreement with CRMC representatives and in a private session with counsel at which no representatives of CRMC were present. In deciding to recommend the approval of the agreement, the committee did not identify any single issue or particular piece of information that, in isolation, was the controlling factor. This summary describes the most important, but not all, of the factors considered by the board and the committee.

2. Nature, extent and quality of services

CRMC, its personnel and its resources— The board and the committee considered the depth and quality of CRMC’s investment management process, including its global research capabilities; the experience, capability and integrity of its senior management and other personnel; the low turnover rates of its key personnel; the overall financial strength and stability of its organization; and the ability of its organizational structure to address the recent growth in assets under management. The board and the committee also considered that CRMC made available to its investment professionals a variety of resources and systems relating to investment management, compliance, trading, investment results and portfolio accounting. They considered CRMC’s commitment to investing in information technology supporting investment management and compliance. They further considered CRMC’s continuing need to attract and retain qualified personnel and to maintain and enhance its resources and systems. The board and the committee also considered the benefits to fund shareholders from investing in a fund that is part of a large family of funds offering a variety of investment objectives.

Other services— The board and the committee considered CRMC’s policies, procedures and systems designed to comply with applicable laws and regulations and its commitment to compliance; its efforts to keep board members informed; and its attention to matters that may involve potential conflicts of interest with the fund. The board and the committee also considered the nature, extent, quality and cost of administrative, distribution and shareholder services provided by CRMC to the fund under the agreement and other agreements, including the administrative, legal and fund accounting and treasury functions.

3. Investment results

The board and the committee considered the fund’s investment results in light of its investment objective to provide long-term growth of capital with current income by investing in established, growing companies all over the world, including the United States. They compared the fund’s total returns with the MSCI World Index, the Lipper Global Funds Index (the Lipper category that includes the fund) and with the other funds in that index as well as funds in the Vanguard 500 Index and the Lipper Global Multi-Cap Value Index (both relevant indexes given the fund’s investment objective and profile). The board and the committee noted that the fund’s investment results significantly exceeded the average and median results of the comparison group and were among the best results in the group, over both short- and longer term periods. In comparison with other funds in the Lipper Global Funds Index with assets over $300 million and 12-month yields over 0.50%, the fund’s investment results ranked 11th among the 36 funds in that group for the six-month period ended April 30, 2006; 6th among 33 funds for the three-year period ended April 30, 2006; 5th among 32 funds for the five-year period ended April 30, 2006; and 1st among 16 funds for the 10-year period ended April 30, 2006. Additionally, the fund also had the 9th highest 12-month yield among all 36 funds in that comparison group for the one-year period ended April 30, 2006.

4. Advisory fees and total expenses

The board and the committee reviewed the advisory fees and total expenses of the fund (each as a percentage of average net assets) and compared such amounts with the average fee and expense levels of other funds in the Lipper Global Funds Index (as well as select other funds in that index with assets over $300 million and 12-month yields over 0.50%). The board and the committee observed that the fund’s advisory fees and total expenses (each as a percentage of average net assets) were well below the median levels, and among the lowest of all 36 funds in that comparison group. The board and the committee also noted the 10% advisory fee waiver that CRMC put into effect on April 1, 2005.

The board and the committee also reviewed information and materials regarding the advisory fees paid by institutional clients of an affiliate of CRMC with similar investment mandates. They noted that, although the fees paid by those clients generally were lower than those paid by the American Funds, these differences reflected the significant investment, operational and regulatory differences between advising mutual funds and institutional clients.

5. Adviser financial information

The board and the committee reviewed information regarding CRMC’s costs of providing services to the American Funds, as well as the resulting level of profits to CRMC, comparing those to the reported results of several large, publicly held investment management companies. The committee also received information during previous periods regarding the structure and manner in which CRMC’s investment professionals were compensated and CRMC’s view of the relationship of such compensation to the attraction and retention of quality personnel. The board and the committee considered CRMC’s willingness to invest in technology, infrastructure and staff to reinforce and offer new services and to accommodate changing regulatory requirements. They further considered that breakpoint discounts in the fund’s advisory fee structure reduce the level of fees charged by CRMC to the fund as fund assets increase. They also considered the impact of the current 10% advisory fee waiver.

6. Ancillary benefits

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

7. Conclusions

Based on their review, including their consideration of each of the factors referred to above, the board and the committee concluded that the agreement is fair and reasonable to the fund and its shareholders and that the fund’s shareholders receive reasonable value in return for the advisory fees and other amounts paid to CRMC by the fund. The board and the committee concluded that the nature, extent and quality of services provided by CRMC, including its investment record, the fund’s cost structure and low level of fees, benefit and are in the best interests of the fund and, along with the consideration of other factors, support approval of the agreement.

Board of directors and other officers

“Independent” directors
	Year first
	elected
	a director
Name and age	of the fund1	Principal occupation(s) during past five years
Joseph C.Berenato, 60	2005	Chairman of the Board, President and CEO, Ducommun Incorporated (aerospace components manufacturer)
H. Frederick Christie, 73	1993	Private investor; former President and CEO, The Mission Group (non-utility holding company, subsidiary of Southern California Edison Company)
Robert J. Denison, 65	2005	Chair, First Security Management (private investments)
Koichi Itoh, 66	2005	Executive Chairman of the Board, Itoh Building Co., Ltd. (building management); former President, Autosplice KK (electronics)
Merit E. Janow, 48	2001	Professor, Columbia University, School of International and Public Affairs
Mary Myers Kauppila, 52	1993	Private investor; Chairman of the Board and CEO,
Chairman of the Board		Ladera Management Company (venture capital and
(Independent and Non-Executive)		agriculture); former owner and President, Energy Investment, Inc.
Gail L. Neale, 71	1993	President, The Lovejoy Consulting Group, Inc. (a pro bono consulting group advising nonprofit organizations)
Robert J.O’Neill, Ph.D., 70	1993	Planning Director and acting CEO of the United States Studies Centre, University of Sydney, Australia; Member of the Board of Directors, The Lowy Institute for International Policy Studies, Sydney, Australia; former Deputy Chairman of the Council and Chairman of the International Advisory Panel, Graduate School of Government, University of Sydney, Australia; former Chairman of the Council, Australian Strategic Policy Institute; former Chichele Professor of the History of War and Fellow, All Souls College, University of Oxford; former Chairman of the Council, International Institute for Strategic Studies
Donald E. Petersen, 80	1993	Retired; former Chairman of the Board and CEO, Ford Motor Company
Stefanie Powers, 64	1993-1996	Actor, Producer; Co-founder and President of The
	1997	William Holden Wildlife Foundation; conservation consultant to Land Rover and Jaguar North America; author of The Jaguar Conservation Trust
Steadman Upham, 57	2001	President and Professor of Anthropology, The University of Tulsa; former President and Professor of Archaeology, Claremont Graduate University
Charles Wolf, Jr., Ph.D., 82	1993	Senior Economic Adviser and Corporate Fellow in International Economics, The RAND Corporation; former Dean, The RAND Graduate School
“Independent” directors
	Number of
	portfolios
	in fund
	complex2
	overseen by
Name and age	director	Other directorships3 held by director
Joseph C. Berenato, 60	6	Ducommun Incorporated
H. Frederick Christie, 73	21	Ducommun Incorporated; IHOP Corporation; Southwest Water Company
Robert J. Denison, 65	5	None
Koichi Itoh, 66	5	None
Merit E. Janow, 48	2	The Nasdaq Stock Market, Inc.
Mary Myers Kauppila, 52	6	None
Chairman of the Board
(Independent and Non-Executive)
Gail L. Neale, 71	5	None
Robert J. O’Neill, Ph.D., 70	3	None
Donald E. Petersen, 80	2	None
Stefanie Powers, 64	2	None
Steadman Upham, 57	2	None
Charles Wolf, Jr., Ph.D., 82	2	None

We note with sadness the death in December 2006 of Frank Stanton, a founding director of the fund in 1993 who served as Founding Director Emeritus since 2003. His wise counsel and friendship will be greatly missed.

“Interested” directors4
	Year first
	elected a
	director or	Principal occupation(s) during past five years and
Name, age and	officer of	positions held with affiliated entities or the principal
position with fund	the fund1	underwriter of the fund
Gina H. Despres, 65	1999	Senior Vice President, Capital Research and
Vice Chairman of the Board		Management Company; Senior Vice President, Capital Strategy Research, Inc.5
Paul G. Haaga, Jr., 58	1993	Vice Chairman of the Board, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5
“Interested” directors4
	Number of
	portfolios
	in fund
	complex2
Name, age and	overseen by
position with fund	director	Other directorships3 held by director
Gina H. Despres, 65	4	None
Vice Chairman of the Board
Paul G. Haaga, Jr., 58	15	None

The statement of additional information includes additional information about fund directors and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all directors and officers of the fund is 333 South Hope Street, Los Angeles, CA 90071, Attention: Fund Secretary.

Other officers

	Year first
	elected	Principal occupation(s) during past five years
Name, age and	an officer	and positions held with affiliated entities or the
position with fund	of the fund1	principal underwriter of the fund
Stephen E. Bepler, 64	1993	Senior Vice President, Capital Research Company5
President
Gregg E. Ireland, 57	1999	Senior Vice President, Capital Research and
Executive Vice President		Management Company
Mark E. Denning, 49	1993	Director, Capital Research and Management
Senior Vice President		Company; Senior Vice President, Capital
		Research Company5
Darcy B. Kopcho, 53	2006	Senior Vice President and Director, Capital
Senior Vice President		Research and Management Company
Jeanne K. Carroll, 58	2001	Senior Vice President, Capital Research Company5
Vice President
Andrew B. Suzman, 39	2003	Executive Vice President and Director, Capital
Vice President		Research Company;5 Director, Capital International Research, Inc.5
Vincent P. Corti, 50	1993	Vice President — Fund Business Management
Secretary		Group, Capital Research and Management Company
Jeffrey P. Regal, 35	2003	Vice President — Fund Business Management
Treasurer		Group, Capital Research and Management Company
Sheryl F. Johnson, 38	2003	Vice President — Fund Business Management
Assistant Treasurer		Group, Capital Research and Management Company

¹Directors and officers of the fund serve until their resignation, removal or retirement.

²Capital Research and Management Company manages the American Funds, consisting of 30 funds. Capital Research and Management Company also manages American Funds Insurance Series,^® which serves as the underlying investment vehicle for certain variable insurance contracts, and Endowments, whose shareholders are limited to certain nonprofit organizations.

³This includes all directorships (other than those in the American Funds) that are held by each director as a director of a public company or a registered investment company.

⁴“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).

⁵Company affiliated with Capital Research and Management Company.

Offices

Offices of the fund and of the investment adviser

Capital Research and Management Company

333 South Hope Street

Los Angeles, CA 90071-1406

135 South State College Boulevard

Brea, CA 92821-5823

Custodian of assets

JPMorgan Chase Bank

270 Park Avenue

New York, NY 10017-2070

Transfer agent for shareholder accounts

American Funds Service Company

(Please write to the address nearest you.)

P.O. Box 25065

Santa Ana, CA 92799-5065

P.O. Box 659522

San Antonio, TX 78265-9522

P.O. Box 6007

Indianapolis, IN 46206-6007

P.O. Box 2280

Norfolk, VA 23501-2280

Counsel

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, CA 90071-2899

Independent registered public accounting firm

PricewaterhouseCoopers LLP

350 South Grand Avenue

Los Angeles, CA 90071-2889

Principal underwriter

American Funds Distributors, Inc.

333 South Hope Street

Los Angeles, CA 90071-1406

There are several ways to invest in Capital World Growth and Income Fund. Class A shares are subject to a 5.75% maximum up-front sales charge that declines for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. Other share classes, which are generally not available for certain employer-sponsored retirement plans, have no up-front sales charges but are subject to additional annual expenses and fees. Annual expenses for Class B shares were 0.80 percentage points higher than for Class A shares; Class B shares convert to Class A shares after eight years of ownership. If redeemed within six years, Class B shares may also be subject to a contingent deferred sales charge (“CDSC”) of up to 5% that declines over time. Class C shares were subject to annual expenses 0.85 percentage points higher than those for Class A shares and a 1% CDSC if redeemed within the first year after purchase. Class C shares convert to Class F shares after 10 years. Class F shares, which are available only through certain fee-based programs offered by broker-dealer firms and registered investment advisers, had higher annual expenses (by 0.03 percentage points) than did Class A shares, and an annual asset-based fee charged by the sponsoring firm. Expenses are deducted from income earned by the fund. As a result, dividends and investment results will differ for each share class.

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

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

A complete November 30, 2006, portfolio of Capital World Growth and Income Fund’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).

Capital World Growth and Income Fund files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. (800/SEC-0330). Additionally, the list of portfolio holdings also is available by calling AFS.

This report is for the information of shareholders of Capital World Growth and Income Fund, but it also may be used as sales literature when preceded or accompanied by the current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after March 31, 2007, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

[logo - American Funds^®]

The right choice for the long term^®

What makes American Funds different?

For 75 years, we have followed a consistent philosophy that we firmly believe is in our investors’ best interests. The range of opportunities offered by our family of just 30 carefully conceived, broadly diversified funds has attracted over 35 million shareholder accounts.

Our unique combination of strengths includes these five factors:

•A long-term, value-oriented approach

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

•An extensive global research effort

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

•The multiple portfolio counselor system

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

•Experienced investment professionals

American Funds portfolio counselors have an average of 23 years of investment experience, providing a wealth of knowledge and experience that few organizations have.

•A commitment to low operating expenses

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

30 mutual funds, consistent philosophy, consistent results

•Growth funds

Emphasis on long-term growth through stocks

AMCAP Fund^®

EuroPacific Growth Fund^®

The Growth Fund of America^®

The New Economy Fund^®

New Perspective Fund^®

New World Fund^SM

SMALLCAP World Fund^®

•Growth-and-income funds

Emphasis on long-term growth and dividends through stocks

American Mutual Fund^®

>Capital World Growth and Income Fund^SM

Fundamental Investors^SM

The Investment Company of America^®

Washington Mutual Investors Fund^SM

•Equity-income funds

Emphasis on above-average income and growth through stocks and/or bonds

Capital Income Builder^®

The Income Fund of America^®

•Balanced fund

Emphasis on long-term growth and current income through stocks and bonds

American Balanced Fund^®

•Bond funds

Emphasis on current income through bonds

American High-Income Trust^SM

The Bond Fund of America^SM

Capital World Bond Fund^®

Intermediate Bond Fund of America^®

Short-Term Bond Fund of America^SM

U.S. Government Securities Fund^SM

•Tax-exempt bond funds

Emphasis on tax-free current income through municipal bonds

American High-Income Municipal Bond Fund^®

Limited Term Tax-Exempt Bond Fund of America^SM

The Tax-Exempt Bond Fund of America^®

State-specific tax-exempt funds

The Tax-Exempt Fund of California^®

The Tax-Exempt Fund of Maryland^®

The Tax-Exempt Fund of Virginia^®

•Money market funds

The Cash Management Trust of America^®

The Tax-Exempt Money Fund of America^SM

The U.S. Treasury Money Fund of America^SM

The Capital Group Companies

American FundsCapital Research and ManagementCapital InternationalCapital GuardianCapital Bank and Trust

Lit. No. MFGEAR-933-0107P

Litho in USA WG/CG/8072-S7497

Printed on recycled paper

ITEM 2 - Code of Ethics

The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made to American Funds Service Company at 800/421-0180 or to the Secretary of the Registrant, 333 South Hope Street, Los Angeles, California 90071.

ITEM 3 - Audit Committee Financial Expert

The Registrant’s board has determined that Steadman Upham, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.

ITEM 4 - Principal Accountant Fees and Services

Registrant:
	a) Audit Fees:
		2005	$91,000
		2006	$101,000
	b) Audit-Related Fees:
		2005	None
		2006	None
	c) Tax Fees:
		2005	$7,000
		2006	$7,000
		The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns.
	d) All Other Fees:
		2005	None
		2006	None

Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below):
	a) Not Applicable
	b) Audit-Related Fees:
		2005	None
		2006	None
	c) Tax Fees:
		2005	$26,000
		2006	$4,000
		The tax fees consist of consulting services relating to the Registrant’s investments.
	d) All Other Fees:
		2005	None
		2006	None

The Registrant’s audit committee will pre-approve all audit and permissible non-audit services that the committee considers compatible with maintaining the auditors’ independence. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser, and affiliates.

Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant and the adviser and affiliates that provide ongoing services to the Registrant were $33,000 for fiscal year 2005 and $11,000 for fiscal year 2006. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence.

ITEM 5 - Audit Committee of Listed Registrants

Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.

ITEM 6 - Schedule of Investments

[logo - American Funds®]

Capital World Growth and Income Fund^SM

Investment portfolio

November 30, 2006

Common stocks — 90.69%	Shares			Market value (000)
FINANCIALS — 20.51%
Banco Santander Central Hispano, SA		48,272,604		$	876,379
UniCredito Italiano SpA (Italy)		77,740,000			670,984
UniCredito Italiano SpA (Germany)		13,500,000			116,377
HSBC Holdings PLC (United Kingdom)		29,384,269			541,878
HSBC Holdings PLC (Hong Kong)		7,854,000			145,904
BNP Paribas		5,595,870			602,808
Citigroup Inc.		12,014,500			595,799
Société Générale		3,423,512			573,477
AXA SA		14,277,722			540,728
Lloyds TSB Group PLC		49,915,000			530,408
ING Groep NV		12,196,834			519,902
Fortis (Netherlands)		12,214,100			497,833
Fortis (Belgium)		300,000			12,232
Shinhan Financial Group Co., Ltd.		10,211,500			497,385
Sun Hung Kai Properties Ltd.		43,445,000			492,068
Banco Itaú Holding Financeira SA, preferred nominative		12,540,100			418,583
Washington Mutual, Inc.		8,085,000			353,153
UBS AG		5,661,622			340,415
Kookmin Bank		4,175,000			325,371
Mizuho Financial Group, Inc.		43,820			322,378
J.P. Morgan Chase & Co.		6,150,000			284,622
FöreningsSparbanken AB, Class A		7,209,000			252,973
Banco Bilbao Vizcaya Argentaria, SA		10,438,500			252,264
Swire Pacific Ltd., Class A		23,725,000			250,719
Banco Bradesco SA, preferred nominative		6,312,800			237,569
Banco Bradesco SA, preferred nominative1,2		140,569			5,290
ICICI Bank Ltd.		12,288,703			240,441
ICICI Bank Ltd. (ADR)		4,000			156
Commerzbank U.S. Finance, Inc.		6,241,000			224,542
Crédit Agricole SA		5,030,000			212,943
Bank of America Corp.		3,653,300			196,730
Sumitomo Mitsui Financial Group, Inc.		18,650			196,468
Credit Suisse Group		2,931,362			193,867
Industrial and Commercial Bank of China Ltd., Class H2		379,000,000			191,975
Mitsui Trust Holdings, Inc.		17,513,000			185,700
Hypo Real Estate Holding AG		3,119,099			181,486
ABN AMRO Holding NV		5,779,286			173,798
Krung Thai Bank PCL		367,628,000			141,395
Krung Thai Bank PCL, non-voting depositary receipt		23,400,000			9,000
Deutsche Börse AG		892,000			149,302
DnB NOR ASA		10,936,100			148,661
NIPPONKOA Insurance Co., Ltd.		16,911,000			145,294
Grupo Financiero Banorte, SA de CV, Series O		36,848,252			137,807
Macquarie Bank Ltd.		2,200,000			126,369
Corporacion Mapfre, CIR, SA		27,550,000			124,038
Commerce Bancorp, Inc.		3,466,000			120,478
Unibanco-União de Bancos Brasileiros SA, units (GDR)		1,410,000			119,385
Allied Capital Corp.		3,798,000			116,751
EFG Eurobank Ergasias SA		3,212,000			114,840
Willis Group Holdings Ltd. (Polynational)		2,750,000			110,715
Royal Bank of Scotland Group PLC		3,031,167			109,770
Hana Financial Holdings		2,028,250			103,705
Freddie Mac		1,485,000			99,733
Woori Finance Holdings Co., Ltd.		4,197,660			94,436
Chinatrust Financial Holding Co., Ltd.		106,175,336			90,585
Allianz SE		460,000			89,512
OTP Bank PLC		1,495,000			57,353
OTP Bank PLC (GDR)		365,000			28,288
QBE Insurance Group Ltd.		4,139,000			84,527
Commonwealth Bank of Australia		2,080,000			77,819
Sompo Japan Insurance Inc.		6,000,000			76,418
St. George Bank Ltd.		2,904,729			74,809
Bank of the Philippine Islands		58,693,075			73,411
Bank of Ireland		3,375,000			72,401
Fannie Mae		1,250,000			71,287
CapitaLand Ltd.		17,000,000			69,016
Wells Fargo & Co.		1,952,000			68,788
Erste Bank der oesterreichischen Sparkassen AG		917,900			66,864
Mitsui Sumitomo Insurance Co., Ltd.		5,394,000			66,511
Cathay Financial Holding Co., Ltd.		28,645,781			64,641
Samsung Fire & Marine Insurance Co., Ltd.		402,030			64,481
Marsh & McLennan Companies, Inc.		2,000,000			62,840
Storebrand ASA		4,895,000			62,804
Developers Diversified Realty Corp.		900,000			58,302
Westpac Banking Corp.		2,778,199			53,471
Millea Holdings, Inc.		1,383,000			49,679
PNC Financial Services Group, Inc.		700,000			49,483
DBS Group Holdings Ltd.		3,620,000			49,380
Mitsui Fudosan Co., Ltd.		2,050,000			48,148
Brookfield Asset Management Inc., Class A		997,500			47,710
Siam Commercial Bank PCL		24,000,000			46,823
Insurance Australia Group Ltd.		9,461,717			43,138
AEON Mall Co., Ltd.		779,700			41,069
Aioi Insurance Co. Ltd.		5,561,000			38,655
iStar Financial, Inc.		715,000			33,455
Kimco Realty Corp.		645,000			29,915
Fairfax Financial Holdings Ltd.		157,600			28,916
Hang Lung Properties Ltd.		12,605,000			28,035
PT Bank Rakyat Indonesia		47,000,000			27,439
Wharf (Holdings) Ltd.		7,800,000			27,326
Skandinaviska Enskilda Banken AB, Class A		810,000			23,805
HBOS PLC		1,100,000			22,513
Kasikornbank PCL, nonvoting depositary receipt		8,578,400			16,856
Hongkong Land Holdings Ltd.		4,350,500			16,619
Bank Hapoalim BM		3,355,000			16,202
Sun Life Financial Inc.		365,000			15,604
XL Capital Ltd., Class A		180,000			12,802
Mitsubishi UFJ Financial Group, Inc.		992			12,677
Hang Lung Group Ltd.		2,660,000			6,764
Suruga Bank Ltd.		370,000			4,904
Security Capital European Realty1,2,3		15,843			222
					16,399,551
CONSUMER DISCRETIONARY — 10.31%
Vivendi SA		23,052,400			886,780
Compagnie Générale des Etablissements Michelin, Class B		7,169,000			622,753
Greek Organization of Football Prognostics SA		15,949,410			599,814
Hyundai Motor Co.		6,501,500			492,686
Hyundai Motor Co., nonvoting preferred, Series 2		1,877,550			81,549
Continental AG		4,164,050			472,884
Toyota Motor Corp.		6,325,300			383,418
Target Corp.		6,464,000			375,494
Lowe’s Companies, Inc.		11,735,000			353,928
Lotte Shopping Co.		765,815			313,663
General Motors Corp.		10,635,900			310,887
Ford Motor Co.		33,000,000			268,290
Mediaset SpA		21,375,000			253,328
British Sky Broadcasting Group PLC		18,655,000			193,831
H & M Hennes & Mauritz AB, Class B		4,152,000			193,658
Carnival Corp., units		3,850,000			188,611
DSG International PLC		42,082,596			161,332
William Hill PLC		12,645,800			155,634
Kingfisher PLC		31,730,197			151,587
Best Buy Co., Inc.		2,598,000			142,812
News Corp., Class A		6,719,458			138,421
Harrah’s Entertainment, Inc.		1,620,000			127,494
Honda Motor Co., Ltd.		3,300,000			116,829
Limited Brands, Inc.		2,960,400			93,815
Yue Yuen Industrial (Holdings) Ltd.		28,465,000			90,024
Volkswagen AG, nonvoting preferred		640,000			44,408
Volkswagen AG		365,816			39,843
Gestevisión Telecinco SA		2,865,000			80,657
KangwonLand Inc.		3,781,280			79,574
Pou Chen Corp.		79,200,864			71,856
Nitori Co., Ltd.		1,526,900			66,186
Daito Trust Construction Co., Ltd.		1,190,000			61,550
NOK Corp.		3,316,900			61,435
LG Electronics Inc.		943,991			56,599
Swatch Group Ltd, non-registered shares		173,750			36,793
Swatch Group Ltd		436,873			18,648
Accor SA		750,000			54,524
VF Corp.		665,000			52,129
Tabcorp Holdings Ltd.		3,665,621			47,159
Carnival PLC		960,000			46,712
Kia Motors Corp.		3,000,000			45,533
Truworths International Ltd.		9,750,000			40,924
Aristocrat Leisure Ltd.		2,667,480			32,698
NTL Inc.		1,300,000			31,317
Canon Marketing Japan Inc.		1,277,600			29,345
HYUNDAI MOBIS		299,070			27,782
Publishing & Broadcasting Ltd.		1,390,000			22,828
Pioneer Corp.		1,141,800			16,554
Idearc Inc.2		369,500			10,176
Kesa Electricals PLC		147,598			1,034
TI Automotive Ltd., Class A1,2		1,068,000			—
					8,245,786
MATERIALS — 8.64%
Bayer AG		19,952,000			1,028,548
China Steel Corp.		551,485,660			559,157
Barrick Gold Corp.		15,291,000			480,749
Barrick Gold Corp. (CAD denominated)		1,931,540			60,573
Koninklijke DSM NV		10,097,356			481,219
Linde AG		3,613,800			355,985
Gold Fields Ltd.		15,250,000			284,306
Dow Chemical Co.		7,000,000			280,070
POSCO		813,030			255,549
Formosa Plastics Corp.		150,695,870			246,890
AngloGold Ashanti Ltd.		4,000,000			192,815
BASF AG		1,920,000			177,159
International Paper Co.		4,720,500			156,249
James Hardie Industries Ltd.		23,136,900			153,668
Impala Platinum Holdings Ltd.		5,619,112			142,725
K+S AG		1,441,600			140,538
Lonza Group Ltd.		1,500,000			125,303
Newcrest Mining Ltd.		6,000,000			122,532
Nitto Denko Corp.		2,518,000			121,541
Israel Chemicals Ltd.		18,812,189			113,233
Potash Corp. of Saskatchewan Inc.		790,000			111,185
Lonmin PLC		1,825,128			110,158
Freeport-McMoRan Copper & Gold Inc., Class B		1,750,000			110,022
UPM-Kymmene Corp.		4,024,000			100,177
E.I. du Pont de Nemours and Co.		1,833,000			86,023
Norske Skogindustrier ASA		5,081,713			84,595
LG Chem, Ltd.		1,720,000			79,427
Boral Ltd.		12,970,960			76,020
Alcan Inc.		1,515,000			72,887
Akzo Nobel NV		1,175,000			67,356
Weyerhaeuser Co.		1,040,000			67,267
Mittal Steel Co. NV		1,610,000			66,261
Taiwan Cement Corp.		60,000,000			54,436
Imperial Chemical Industries PLC		5,485,000			44,859
Sonoco Products Co.		1,200,000			44,388
Alcoa Inc.		1,365,000			42,547
Packaging Corp. of America		1,800,000			40,590
Martin Marietta Materials, Inc.		290,000			28,800
Vulcan Materials Co.		315,000			27,947
Makhteshim-Agan Industries Ltd.		5,235,000			27,902
Yara International ASA		1,131,800			23,574
Sappi Ltd.		1,239,000			20,085
Stora Enso Oyj, Class R (ADR)		1,086,300			16,957
M-real Oyj, Class B		2,369,500			14,057
Smurfit-Stone Container Corp.2		974,200			10,453
Arkema SA2		12,500			622
Arkema SA (ADR)1,2		6,250			311
					6,907,715
TELECOMMUNICATION SERVICES — 8.33%
Koninklijke KPN NV		59,962,620			821,816
AT&T Inc.		20,196,824			684,874
Vodafone Group PLC		237,518,328			628,063
Telekom Austria AG		18,892,393			500,346
France Télécom SA		17,405,000			451,735
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk, Class B		368,927,000			398,557
América Móvil SA de CV, Series L (ADR)		7,809,000			347,266
Olivetti SpA		59,750,000			181,266
Telecom Italia SpA, nonvoting		60,521,000			160,685
Philippine Long Distance Telephone Co.		4,364,420			216,592
Philippine Long Distance Telephone Co. (ADR)		1,650,000			81,031
Verizon Communications Inc.		7,390,000			258,207
Far EasTone Telecommunications Co., Ltd.		192,780,000			218,703
Telefónica, SA		10,780,000			218,263
Telekomunikacja Polska SA		27,224,100			211,773
Chunghwa Telecom Co., Ltd.		64,953,320			118,060
Chunghwa Telecom Co., Ltd. (ADR)		4,814,798			91,481
Sprint Nextel Corp., Series 1		8,015,800			156,388
Tele Norte Leste Participações SA, preferred nominative		9,522,297			140,875
TeliaSonera AB		17,381,700			131,520
Advanced Info Service PCL		47,485,900			109,186
BellSouth Corp.		2,354,000			104,965
Teléfonos de México, SA de CV, Class L (ADR)		3,623,474			94,573
China Netcom Group Corp. Ltd.		35,600,000			70,940
SK Telecom Co., Ltd. (ADR)		2,330,000			60,417
KDDI Corp.		8,970			59,950
China Unicom Ltd.		40,870,000			47,078
COSMOTE Mobile Telecommunications SA		1,650,000			45,884
Maxis Communications Bhd.		10,000,000			27,378
Magyar Telekom Telecommunications PLC2		5,243,600			25,616
					6,663,488
ENERGY — 8.24%
Royal Dutch Shell PLC, Class B		20,949,312			748,356
Royal Dutch Shell PLC, Class A (ADR)		5,220,000			370,777
Royal Dutch Shell PLC, Class A		7,850,000			277,130
Royal Dutch Shell PLC, Class B (ADR)		1,142,148			82,098
TOTAL SA		9,243,000			655,429
TOTAL SA (ADR)		2,250,000			160,785
Chevron Corp.		9,376,962			678,142
Petróleo Brasileiro SA — Petrobras, preferred nominative (ADR)		4,255,000			361,249
Petróleo Brasileiro SA — Petrobras, ordinary nominative (ADR)		2,840,000			267,386
Oil & Natural Gas Corp. Ltd.		20,526,168			396,967
Hess Corp.		5,250,000			263,917
ENI SpA		7,500,000			245,606
ConocoPhillips		3,450,000			232,185
Canadian Natural Resources, Ltd.		4,050,000			219,850
Husky Energy Inc.		3,015,000			207,213
Exxon Mobil Corp.		2,400,000			184,344
Norsk Hydro ASA		7,329,500			181,532
Canadian Oil Sands Trust		4,550,205			119,671
Canadian Oil Sands Trust3		1,100,000			28,930
Reliance Industries Ltd.		4,627,000			129,134
Schlumberger Ltd.		1,420,000			97,242
SK Corp.		1,239,410			91,255
Caltex Australia Ltd.		4,164,181			72,756
Marathon Oil Corp.		670,000			63,235
PTT Exploration and Production PCL		19,620,000			60,150
Transocean Inc.2		695,000			54,175
Williams Companies, Inc.		1,935,000			53,716
Thai Oil PCL		30,800,000			52,793
China National Offshore Oil Corp.		50,999,900			44,979
Technip SA		585,000			40,979
Halliburton Co.		1,200,000			40,488
Sasol Ltd.		1,100,000			38,823
SBM Offshore NV		840,000			27,274
OAO NOVATEK (GDR)		300,000			19,350
Enbridge Inc.		467,477			16,480
					6,584,396
CONSUMER STAPLES — 7.67%
Diageo PLC		55,365,500			1,062,906
Altria Group, Inc.		12,470,000			1,050,099
Tesco PLC		77,505,563			596,171
Nestlé SA		1,379,500			486,963
Seven & I Holdings Co., Ltd.		7,924,000			252,479
InBev		3,664,584			240,448
Coca-Cola Co.		5,050,000			236,492
Foster’s Group Ltd.		43,289,000			228,439
Unilever NV		7,089,000			187,088
Unilever NV (New York registered)		1,500,000			39,735
Koninklijke Ahold NV2		20,756,000			207,787
Fomento Económico Mexicano, SA de CV (ADR)		1,803,700			189,839
Groupe Danone		1,033,000			158,950
Reynolds American Inc.		2,470,282			158,691
Wal-Mart Stores, Inc.		3,168,000			146,045
Kellogg Co.		2,375,000			118,228
Imperial Tobacco Group PLC		3,050,000			112,071
SABMiller PLC		4,732,216			98,897
PepsiCo, Inc.		1,200,000			74,364
Scottish & Newcastle PLC		6,053,900			64,271
Gallaher Group PLC		3,000,000			56,090
METRO AG		840,000			52,335
L’Oréal SA		496,000			49,983
Shoppers Drug Mart Corp.		930,000			40,444
Procter & Gamble Co.		601,700			37,781
UST Inc.		655,900			36,717
Tingyi (Cayman Islands) Holding Corp. (China — Incorporated in the Cayman Islands)		42,564,000			35,787
Woolworths Ltd.		1,929,849			33,490
Bunge Ltd.		465,000			32,782
Avon Products, Inc.		660,000			21,542
Koninklijke Numico NV		310,000			15,981
Coca-Cola Hellenic Bottling Co. SA		352,182			12,862
					6,135,757
HEALTH CARE — 6.78%
Roche Holding AG		6,484,566			1,171,584
Novo Nordisk A/S, Class B		11,322,200			874,328
AstraZeneca PLC (Sweden)		7,416,800			429,438
AstraZeneca PLC (United Kingdom)		3,405,000			197,480
Pfizer Inc		13,361,700			367,313
Abbott Laboratories		7,538,000			351,723
Bristol-Myers Squibb Co.		9,512,700			236,200
Smith & Nephew PLC		20,669,500			195,765
Sanofi-Aventis		2,036,700			178,811
Medtronic, Inc.		3,100,000			161,603
Eli Lilly and Co.		3,000,000			160,770
Merck KGaA		1,324,000			145,256
Schering-Plough Corp.		6,400,000			140,864
Merck & Co., Inc.		3,000,000			133,530
UnitedHealth Group Inc.		2,420,500			118,798
Forest Laboratories, Inc.2		2,130,000			103,731
Wyeth		1,590,000			76,765
Johnson & Johnson		1,130,000			74,478
WellPoint, Inc.2		750,000			56,753
Astellas Pharma Inc.		1,226,000			53,567
Richter Gedeon NYRT		219,500			45,389
UCB NV		665,000			42,180
Chugai Pharmaceutical Co., Ltd.		1,899,300			38,704
Daiichi Sankyo Co., Ltd.		1,179,000			36,243
McKesson Corp.		645,000			31,863
					5,423,136
INFORMATION TECHNOLOGY — 6.66%
Microsoft Corp.		26,699,000			783,082
Nokia Corp.		21,521,750			432,901
Nokia Corp. (ADR)		7,250,300			146,601
Taiwan Semiconductor Manufacturing Co. Ltd.		121,306,770			245,613
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)		19,778,888			212,623
International Business Machines Corp.		4,430,000			407,206
Oracle Corp.2		19,801,800			376,828
Cisco Systems, Inc.2		10,975,000			295,008
Quanta Computer Inc.		167,815,359			292,575
Samsung Electronics Co., Ltd.		379,208			260,425
Intel Corp.		8,000,000			170,800
Hewlett-Packard Co.		4,300,000			169,678
Murata Manufacturing Co., Ltd.		2,232,000			152,256
Delta Electronics, Inc.		49,003,779			150,571
TDK Corp.		1,957,200			149,735
Toshiba Corp.		22,650,000			144,924
Canon, Inc.		2,552,500			134,887
ASML Holding NV (New York registered)2		3,485,000			86,777
ASML Holding NV2		1,000,000			24,842
Powerchip Semiconductor Corp.		162,376,555			105,407
Acer Inc.		37,408,000			80,713
Compal Electronics, Inc.		81,628,076			74,941
Lite-On Technology Corp.		56,567,448			73,354
Seagate Technology		2,400,000			61,824
Hoya Corp.		1,348,000			53,077
Motorola, Inc.		1,874,300			41,553
Mediatek Incorporation		3,059,062			31,300
Microchip Technology Inc.		895,000			30,528
Samsung SDI Co., Ltd.		400,000			28,547
Texas Instruments Inc.		750,000			22,163
livedoor Co., Ltd.1,2		24,137,034			19,800
Analog Devices, Inc.		600,000			19,512
Chi Mei Optoelectronics Corp.		18,046,838			19,163
Corning Inc.2		723,513			15,599
High Tech Computer Corp.		582,000			13,457
					5,328,270
UTILITIES — 5.69%
E.ON AG		7,822,214			1,004,329
Veolia Environnement		10,550,000			698,376
Electricité de France SA		9,369,000			600,471
RWE AG		3,598,403			407,932
NTPC Ltd.		115,168,548			379,547
Suez		6,500,000			312,015
Gas Natural SDG, SA		6,869,500			280,175
Korea Electric Power Corp.		3,823,280			159,475
Tokyo Gas Co., Ltd.		30,025,000			148,816
Electric Power Development Co., Ltd.		1,585,000			66,104
Exelon Corp.		975,000			59,212
Spark Infrastructure4		56,535,632			52,399
Hongkong Electric Holdings Ltd.		10,680,000			50,390
FirstEnergy Corp.		780,000			46,675
Dominion Resources, Inc.		567,811			45,845
Equitable Resources, Inc.		1,050,000			45,549
Scottish Power PLC		2,950,000			43,788
Hong Kong and China Gas Co. Ltd.		19,118,000			42,275
National Grid PLC		1,948,980			26,343
Progress Energy, Inc.		550,000			26,273
Southern Co.		720,000			26,100
MDU Resources Group, Inc.		869,000			22,890
					4,544,979
INDUSTRIALS — 5.18%
General Electric Co.		16,080,000			567,302
United Parcel Service, Inc., Class B		6,191,700			482,457
Qantas Airways Ltd.		81,394,366			317,809
Tyco International Ltd.		9,560,000			289,572
Autostrade SpA		8,716,000			269,846
Siemens AG		2,813,000			267,714
Cintra, Concesiones de Infraestructuras de Transporte, SA		14,172,600			237,032
Cintra, Concesiones de Infraestructuras de Transporte, SA1,2		708,630			11,852
Singapore Technologies Engineering Ltd.		103,500,000			203,033
United Technologies Corp.		2,847,000			183,717
Deutsche Post AG		5,265,000			156,868
Macquarie Airports		54,800,000			153,453
Daewoo Shipbuilding & Marine Engineering Co., Ltd.		3,631,000			115,692
Fraport AG		1,561,100			109,686
Sandvik AB		8,000,000			102,935
ComfortDelGro Corp. Ltd.		95,600,000			97,494
Samsung Heavy Industries Co., Ltd.		3,645,000			92,204
Wienerberger AG		1,440,000			76,693
Nippon Express Co., Ltd.		10,726,800			57,890
Brisa Auto-Estradas de Portugal SA		4,414,700			51,269
Manpower Inc.		700,000			49,700
Wesfarmers Ltd.		1,600,000			44,173
Kubota Corp.		5,000,000			43,994
Mitsubishi Heavy Industries, Ltd.		8,165,300			35,465
SMC Corp.		241,000			33,067
Cie. de Saint-Gobain		345,000			27,525
Travis Perkins PLC		800,000			27,288
Singapore Post Private Ltd.		32,160,000			21,726
Wolseley PLC		565,000			13,218
Contax Participações SA, ordinary nominative		762,130			1,173
Imperial Holdings Ltd.2		20,000			414
					4,142,261
MISCELLANEOUS — 2.68%
Other common stocks in initial period of acquisition					2,142,423
Total common stocks (cost: $55,170,729,000)					72,517,762
Rights — 0.00%
INDUSTRIALS — 0.00%
Autostrade SpA, rights, expire 20061,2		8,716,000			—
Total rights (cost: $0)					—
		Shares or
Convertible securities — 0.48%		principal amount			Market value (000	)
CONSUMER DISCRETIONARY — 0.29%
Ford Motor Co. Capital Trust II 6.50% cumulative convertible trust preferred 2032		6,015,055		$	208,723
Liberty Media Holding Corp. 3.25% exchangeable debentures 2031	$	25,000,000			20,156
					228,879
INFORMATION TECHNOLOGY — 0.06%
ASML Holding NV 5.50% convertible notes 2010		€12,700,000			23,494
Liberty Media Holding Corp. 3.50% exchangeable debentures 2031	$	20,000,000			20,400
					43,894
TELECOMMUNICATION SERVICES — 0.04%
Crown Castle International Corp. 6.25% convertible preferred 20122		635,200			35,285
INDUSTRIALS — 0.04%
Tyco International Ltd., Series B, 3.125% convertible debentures 2023	$	25,000,000			35,281
HEALTH CARE — 0.03%
Amgen Inc. 0% convertible notes 2032	$	25,000,000			18,844
Teva Pharmaceutical Industries Ltd. 1.75% convertible debenture 2026	$	10,000,000			9,437
					28,281
MATERIALS — 0.02%
Freeport-McMoRan Copper & Gold Inc. 5.50% convertible preferred		10,000			13,968
Total convertible securities (cost: $396,778,000)					385,588
Bonds & notes — 0.49%		Principal amount (000	)
CONSUMER DISCRETIONARY — 0.24%
General Motors Corp. 8.25% 2023	$	12,240			11,215
General Motors Corp. 8.375% 2033		137,760			126,223
R.H. Donnelley Corp., Series A-2, 6.875% 2013		20,150			19,394
R.H. Donnelley Corp., Series A-3, 8.875% 2016		17,600			18,568
Delphi Automotive Systems Corp. 6.55% 20065		14,955			15,852
					191,252
NON-U.S. GOVERNMENT BONDS & NOTES — 0.15%
Indonesia (Republic of) 10.00% 2011		IDR 74,000,000			8,008
Indonesia (Republic of) 13.40% 2011		90,000,000			10,884
Indonesia (Republic of) 9.50% 2015		122,825,000			12,613
Indonesia (Republic of) 11.00% 2020		220,000,000			24,330
Turkey (Republic of) Treasury Bill 0% 2007		TRY73,594			45,395
Brazilian Treasury Bill 0% 2007		R$40			17,769
					118,999
FINANCIALS — 0.08%
General Motors Acceptance Corp. 6.125% 2007	$	10,000			10,005
General Motors Acceptance Corp. 6.15% 2007		5,265			5,266
General Motors Acceptance Corp. 6.225% 20076		10,000			10,012
General Motors Acceptance Corp. 6.274% 20076		9,735			9,739
General Motors Acceptance Corp. 6.125% 2008		30,000			29,996
					65,018
ENERGY — 0.02%
El Paso Corp. 7.875% 2012		14,500			15,298
Total bonds & notes (cost: $358,872,000)					390,567
		Principal amount			Market value
Short-term securities — 8.27%		(000	)		(000	)
Bank of Ireland 5.24%-5.255% due 12/5/2006-2/8/20073	$	303,700		$	301,813
Dexia Delaware LLC 5.22%-5.245% due 12/22/2006-2/7/2007		300,000			298,466
Depfa Bank PLC 5.22%-5.26% due 12/1/2006-2/2/20073		298,500			297,316
Stadshypotek Delaware Inc. 5.24%-5.25% due 1/22-2/23/20073		178,200			176,285
Svenska Handelsbanken Inc. 5.23%-5.235% due 1/2-2/28/07		100,000			99,117
BASF AG 5.22%-5.25% due 1/2-2/23/20073		265,900			263,732
HBOS Treasury Services PLC 5.23%-5.25% due 12/27/2006-3/6/2007		263,475			260,842
Amsterdam Funding Corp. 5.22%-5.23% due 12/8/2006-2/9/20073		260,500			259,201
Danske Corp. 5.225%-5.235% due 12/27/2006-1/30/20073		260,900			258,994
Calyon North America Inc. 5.23%-5.25% due 12/14/2006-3/1/2007		261,200			258,929
ING (U.S.) Funding LLC 5.23%-5.24% due 1/22-3/2/2007		259,700			257,508
Old Line Funding, LLC 5.25% due 12/14/2006-1/17/20073		148,097			147,423
Thunder Bay Funding, LLC 5.25% due 1/5-2/15/20073		106,929			106,008
Barclays U.S. Funding Corp. 5.22%-5.245% due 12/20/2006-2/27/2007		252,000			249,927
BNP Paribas Finance Inc. 5.24%-5.27% due 12/1/2006-1/18/2007		225,000			224,435
UBS Finance (Delaware) LLC 5.225%-5.245% due 12/12/2006-1/22/2007		216,100			215,148
Barton Capital LLC 5.24%-5.25% due 1/9-1/26/20073		107,400			106,653
Société Générale North America, Inc. 5.24%-5.245% 12/4/2006-1/19/2007		100,000			99,625
Allied Irish Banks N.A. Inc. 5.225%-5.25% due 12/13/2006-2/28/20073		200,300			198,935
Bank of America Corp. 5.21%-5.25% due 12/11/2006-3/2/2007		200,000			198,823
ANZ National (International) Ltd. 5.23%-5.25% due 12/7/2006-3/1/20073		200,000			198,356
Spintab AB (Swedmortgage) 5.22%-5.26% due 12/5/2006-2/14/2007		196,300			195,370
HSBC USA Inc. 5.22%-5.25% due 12/8/2006-3/16/2007		185,000			183,878
CBA (Delaware) Finance Inc. 5.235%-5.25% due 12/15/2006-2/16/2007		177,885			176,664
Royal Bank of Scotland PLC 5.23%-5.24% due 12/21/2006-1/31/2007		150,000			149,265
Park Avenue Receivables Co., LLC 5.26% due 12/22/20063		101,100			100,775
Jupiter Securitization Co., LLC 5.26% due 12/22/20063		35,300			35,186
Freddie Mac 5.115%-5.15% due 12/29/2006-1/23/2007		130,000			129,225
CAFCO, LLC 5.23% due 1/12/20073		83,500			82,981
Ciesco LLC 5.26% due 12/4/20063		45,700			45,674
Rabobank USA Financial Corp. 5.235%-5.24% due 12/7/2006-1/31/2007		125,000			124,317
Toyota Motor Credit Corp. 5.23%-5.25% due 12/6/2006-2/2/2007		109,100			108,517
IXIS Commercial Paper Corp. 5.245%-5.25% due 12/12-12/28/20063		100,000			99,720
KfW International Finance Inc. 5.20%-5.21% due 12/22/2006-1/3/20073		100,000			99,606
Federal Home Loan Bank 5.085%-5.10% due 1/12-1/22/2007		99,970			99,266
Export Development Canada 5.23% due 12/1/2006		89,200			89,187
Westpac Banking Corp. 5.24%-5.25% due 12/13/2006-1/22/20073		75,000			74,582
Canadian Imperial Holdings Inc. 5.25%-5.26% due 12/11-12/19/2006		50,000			49,891
International Lease Finance Corp. 5.22% due 1/26/2007		50,000			49,604
Lloyds Bank PLC 5.24% due 1/29/2007		50,000			49,571
BP Capital Markets America Inc. 5.20% due 2/8/20073		50,000			49,498
American Honda Finance Corp. 5.22% due 2/9/2007		38,500			38,106
Private Export Funding Corp. 5.23% due 2/2/20073		35,000			34,677
National Australia Funding (Delaware) Inc. 5.225% due 12/22/20063		21,400			21,332
Procter & Gamble Co. 5.23% due 12/22/20063		19,000			18,939
Fannie Mae 5.13% due 12/29/2006		15,000			14,935
Variable Funding Capital Corp. 5.23% due 12/14/20063		8,800			8,782
Toronto-Dominion Holdings USA Inc. 5.245% due 12/22/20063		8,479			8,452
Total short-term securities (cost: $6,614,691,000)					6,615,536
Total investment securities (cost: $62,541,070,000)					79,909,453
Other assets less liabilities					54,979
Net assets				$	79,964,432

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

ADR = American Depositary Receipts

GDR = Global Depositary Receipts

¹Valued under fair value procedures adopted by authority of the board of directors.

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

³Purchased 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 $3,024,072,000, which represented 3.78% of the net assets of the fund.

⁴Represents an affiliated company as defined under the Investment Company Act of 1940.

⁵Scheduled interest and/or principal payment was not received.

⁶Coupon rate may change periodically.

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-933-0107-S6867

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Capital World Growth and Income Fund, Inc.:

We have audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the financial statements of Capital World Growth and Income Fund, Inc (the "Fund") as of November 30, 2006, and for the year then ended and have issued our unqualified report thereon dated January 5, 2007 (which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR). Our audit included an audit of the Fund’s investment portfolio (the “Portfolio”) as of November 30, 2006 appearing in Item 6 of this Form N-CSR. This Portfolio is the responsibility of the Fund's management. Our responsibility is to express an opinion on this portfolio based on our audit.

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

PricewaterhouseCoopers LLP

Los Angeles, CA

January 5, 2007

ITEM 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 8 - Portfolio Managers of Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 9 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.

ITEM 10 - Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of directors since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the Board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of directors. 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 nominating committee of the Registrant, c/o the Registrant’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 nominating committee.

ITEM 11 - Controls and Procedures

(a)	The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.
(b)	There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12 - Exhibits

(a)(1)	The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto.
(a)(2)	The certifications required by Rule 30a-2 of the Investment Company Act of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAPITAL WORLD GROWTH AND INCOME FUND, INC.

By /s/ Stephen E. Bepler

Stephen E. Bepler, President and

Principal Executive Officer

Date: February 7, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By /s/ Stephen E. Bepler

Stephen E. Bepler, President and

Principal Executive Officer

Date: February 7, 2007

By /s/ Jeffrey P. Regal

Jeffrey P. Regal, Treasurer and

Principal Financial Officer

Date: February 7, 2007