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 FundSM 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:
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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.
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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.
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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
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Europe | 43.5 | % | ||
The Americas | 25.8 | % | ||
Asia/Pacific | 20.9 | % | ||
Bonds, cash & equivalents | 8.8 | % | ||
Other | 1.0 | % |
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.
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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 |
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
1 As 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.
2 Includes reinvested dividends of $8,447 and reinvested capital gain distributions of $12,892.
3 Results calculated with capital gains reinvested.
4 The MSCI World Index is unmanaged and includes reinvested dividends, but does not reflect the effects of sales charges, commissions or expenses.
5 Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics.
6 For 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.
Industry diversification | Percent of net | |||
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 | ) | ||||||||
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 | Market value of affiliates | |||||||||||
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 provided for 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 CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. 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 |
1 Directors and officers of the fund serve until their resignation, removal or retirement.
2 Capital 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.
3 This 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).
5 Company 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 FundSM
SMALLCAP World Fund®
• Growth-and-income funds
Emphasis on long-term growth and dividends through stocks
American Mutual Fund®
> Capital World Growth and Income FundSM
Fundamental InvestorsSM
The Investment Company of America®
Washington Mutual Investors FundSM
• 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 TrustSM
The Bond Fund of AmericaSM
Capital World Bond Fund®
Intermediate Bond Fund of America®
Short-Term Bond Fund of AmericaSM
U.S. Government Securities FundSM
• Tax-exempt bond funds
Emphasis on tax-free current income through municipal bonds
American High-Income Municipal Bond Fund®
Limited Term Tax-Exempt Bond Fund of AmericaSM
The Tax-Exempt Bond Fund of America®
State-specific tax-exempt funds
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 AmericaSM
The U.S. Treasury Money Fund of AmericaSM
The Capital Group Companies
American Funds Capital Research and Management Capital International Capital Guardian Capital 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 FundSM
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
1 Valued under fair value procedures adopted by authority of the board of directors.
2 Security did not produce income during the last 12 months.
3 Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $3,024,072,000, which represented 3.78% of the net assets of the fund.
4 Represents an affiliated company as defined under the Investment Company Act of 1940.
5 Scheduled interest and/or principal payment was not received.
6 Coupon 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 |