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: 811-604
Washington Mutual Investors Fund, Inc.
(Exact Name of Registrant as specified in charter)
1101 Vermont Avenue, NW
Washington, DC 20005
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 842-5665
Date of fiscal year end: April 30, 2004
Date of reporting period: April 30, 2004
Howard L. Kitzmiller
Secretary
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
(name and address of agent for service)
Copies to:
JOHN JUDE O'DONNELL, Esq.
THOMPSON, O'DONNELL, MARKHAM, NORTON & HANNON 1212
New York Avenue, Suite 1000, N.W.
Washington, D.C. 20005
(Counsel for the Registrant)
ITEM 1 - Reports to Stockholders
(logo: American Funds)
The right choice for the long term(R)
Washington Mutual Investors Fund
(picture: Betsy Ross and George Washington)
Annual report for the year ended April 30, 2004
Washington Mutual Investors Fund(SM) seeks to provide income and growth of
principal through investments in quality common stocks.
The Fund is one of the 29 American Funds, the nation's third-largest mutual fund
family. For more than seven decades, 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
Investment adviser's report 2
The value of a long-term perspective 3
Feature story: Most of the Fund's shareholders
invest for retirement or college expenses.
Let's meet some exceptions. 6
Investment portfolio 13
Financial statements 20
Fund Directors, Advisory Board and other officers 32
Here are returns on a $1,000 investment with all distributions reinvested for
periods ended March 31, 2004 (the most recent
calendar quarter):
Class A shares
1 year 5 years 10 years
Reflecting 5.75% maximum sales charge
Average annual total return -- +2.78% +12.63%
Cumulative total return +26.73% +14.68% +228.41%
Results for other share classes can be found on page 31. Please see page 34 for
important information about other share classes.
Figures shown on this page 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 the most current information and month-end results, visit
americanfunds.com. Fund results shown reflect the deduction of the one-time
maximum sales charge of 5.75% at purchase.
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.
Cover: The Birth of Old Glory (detail) by Edward Percy Moran (1917).
Fellow shareholders:
In spite of pessimism about the continuing violence in Iraq and terrorist acts
in other parts of the world, the U.S. economy improved during the Fund's fiscal
year. The 15% maximum tax rate on qualified dividends, which was in effect
throughout the year, helped to stimulate the economy, and it prompted many
companies to increase their dividends. Combined with the lower capital gain tax
rate, these tax benefits to shareowners made equity investments more attractive
and contributed to your Fund's improved performance.
Your Fund has always emphasized the importance of dividends, and it is
gratifying to report that of the 155 companies reflected in Washington Mutual's
portfolio at fiscal year-end, 127 have paid uninterrupted dividends for at least
25 years, 98 have paid uninterrupted dividends for at least 50 years, 55 have
paid uninterrupted dividends for at least 75 years and 25 have paid
uninterrupted dividends for at least 100 years. In addition, 54% of the Fund's
holdings increased their dividends during the year.
During the fiscal period from May 1, 2003 to April 30, 2004, the value of an
investment in Washington Mutual's shares increased by 23.2%, assuming
reinvestment of income dividends of 54 cents a share and the long-term capital
gain distribution of 18.5 cents a share. These results were slightly better than
the 22.9% gain by the unmanaged Standard & Poor's 500 Composite Index measured
on the same basis. For longer periods, your Fund has produced stronger relative
returns, which are as follows:
Average annual total returns
1 year 5 years 10 years Lifetime*
Washington Mutual +23.2% +2.3% +12.9% +12.9%
S&P 500 +22.9% - 2.3% +11.4% +11.4%
*Since the Fund's inception on July 31, 1952.
Since our October 31, 2003 report to you, only three new companies have appeared
in the portfolio: AFLAC, BellSouth and SunTrust Banks. Eight companies have been
eliminated: Cisco Systems, EMC, Interpublic Group of Companies, Motorola, Pall,
Time Warner, Sun Microsystems and Xilinx.
During the past three months, economic growth has accelerated and this
improvement has recently extended to the jobs market, with a large number of new
jobs created in March. There has also been greater ability for companies in many
industries to raise prices -- particularly those related to the production of
energy. As a result, market attention has begun to focus on prospects for
inflation and the probability that there will be an increase in the record low
federal funds rate, currently at 1.0%. Prices of crude oil, metals and
agricultural products have all risen, adding to upward pressure on interest
rates. It is also worth mentioning that the improvement in economic growth has
begun to reduce the projected size of the federal deficit as well as strengthen
the financial position of state and local governments.
Past history has demonstrated that economic improvement is not endangered until
interest rates become very high and suggests that continuation of improved
performance by U.S. industries, which began in 2002, may persist for a
considerable period.
At fiscal year-end, more than half of the Fund's accounts were in savings plans
or some form of retirement accounts, including 401(k) plans, IRA accounts and
CollegeAmerica Section 529 college savings plans, sponsored by the Commonwealth
of Virginia.
We are, as always, very pleased to welcome our new shareholders to the
Washington Mutual Investors Fund family, which now consists of more than 3
million accounts. We will be pleased to hear from you at any time.
Cordially,
(signature) (signature)
James H. Lemon, Jr., Harry J. Lister,
Chairman of the Board Vice Chairman of the Board
(signature)
Jeffrey L. Steele,
President of the Fund June 11, 2004
Figures shown on this page 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.
Fund results shown are at net asset value. If a sales charge (maximum 5.75%) had
been deducted, the results would have been lower. For current information about
the Fund, visit americanfunds.com.
Investment adviser's report
Washington Mutual Investors Fund's highly disciplined approach to investing
focuses on companies with strong balance sheets and consistent records of paying
dividends. While this approach has often moderated gains in more speculative
bull markets, it has served as an important buffer against market declines; in
fact, the Fund has done better than the unmanaged Standard & Poor's 500
Composite Index in each of the 12 major stock market declines since the Fund's
inception in 1952.
A strong stock market recovery - as just experienced - is often led by more
speculative companies, including those that were battered the most in the down
market. In the past, Washington Mutual's portfolio of quality, seasoned
companies has sometimes lagged the S&P 500 during the first year of a stock
market recovery.
However, during the market's rapid run-up in fiscal 2004, the Fund slightly
surpassed the S&P 500. The value of an investment in the Fund, with dividends
reinvested, rose 23.2% compared with the S&P 500's rise of 22.9%. It is worth
noting that Washington Mutual was able to do this with only a very small
exposure to technology companies, which were among the leaders in the market's
recovery. (The unmanaged technology-heavy NASDAQ Composite Index posted a total
return of 31.1% for the 12 months ended April 30, 2004.) Good stock selection
and the fact that the Fund always remains fully invested helped the Fund's
results keep pace with the S&P 500 in the recent fiscal year.
The economic picture and outlook
Fiscal 2004 was a very strong year for the economy as well as the stock market.
U.S. corporations were helped by strong consumer spending, high levels of
productivity and reduced financing costs. Consumers were aided by significant
tax cuts for dividends and capital gains, low interest rates and opportunities
for continued mortgage refinancing. The Federal Reserve Board maintained the
federal funds rate at 1.0%, its lowest rate in 46 years.
In March and April, the last months of the Fund's fiscal year, investor
anxieties began to rise. While earnings of U.S. companies remained strong and
the economy continued to strengthen, concerns about future inflation and rising
interest rates began to dampen enthusiasm for stocks. Upbeat reports about job
growth and employment ignited more concerns that these positive trends might
encourage the Fed to raise the federal funds rate earlier than initially
anticipated.
Since the overall stock market has already recovered dramatically from its low,
we caution investors that the Fund's returns may be substantially more subdued
in the future. That said, economic expansion is continuing (with no end in
sight), and corporate profits should mirror that level of expansion. U.S.
businesses should continue to thrive despite the probable trend of moderately
rising interest rates. However, serious geopolitical risks remain, from the
unsettled situation in Iraq to the threat of terrorism around the world. Other
negatives include high oil and gas prices and the possible overheating of
China's economy. The election in November may also affect the stock market. The
large research staff at Capital Research and Management Company, the Fund's
investment adviser, will be monitoring these developments closely.
The Fund's investments
The Fund's five largest industry positions at fiscal year-end as a percentage of
net assets were: Pharmaceuticals (9.5%), Oil & gas (8.9%), Commercial banks
(8.4%), Diversified telecommunication services (7.7%) and Electric utilities
(6.0%). During the year, the Fund increased its oil and gas holdings to take
advantage of increased demand and rising prices, and trimmed its bank holdings
to mitigate the possible negative impact of rising interest rates.
Although the outlook for the next year is challenging, we believe the Fund's
portfolio is well aligned to meet the opportunities and risks ahead. We believe
our strategy of focusing on quality companies that meet strict standards of
financial soundness, including a consistent record of paying dividends, should
hold us in good stead in the months and years ahead.
- - Capital Research and Management Company
Figures shown on this page 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.
Fund results shown are at net asset value. If a sales charge (maximum 5.75%) had
been deducted, the results would have been lower. For current information about
the Fund, visit americanfunds.com.
The value of a long-term perspective
How a $10,000 investment in Washington Mutual Investors Fund grew
This chart and accompanying table show how a $10,000 investment grew between
July 31, 1952, when the Fund began operations, and April 30, 2004.
Fund figures reflect deduction of the maximum sales charge of 5.75% on the
$10,000 investment.<F1> Thus, the net amount invested was $9,425.<F2>
As you can see, that $10,000 investment in Washington Mutual, with all
distributions reinvested, would have grown to $4,989,599. Over the same period,
that $10,000 would have grown to $2,627,509 in the unmanaged Standard & Poor's
500 Composite Index of U.S. common stocks. According to the Consumer Price
Index, it now requires $70,412 to purchase what $10,000 would have bought on
July 31, 1952. In the average savings institution, $10,000 with interest
compounded would have grown to $132,980.
The year-by-year progress of the $10,000 investment is summarized in the table
below the chart. You can use those figures to estimate how the value of your own
holdings has grown. Let's say, for example, that you have been reinvesting all
your distributions and want to know how your investment has done since April 30,
1994. At that time, according to the table, the value of the investment
illustrated here was $1,479,112. Since then it has gone up more than threefold
to $4,989,599. Thus, in the same 10-year period, the value of your 1994
investment - regardless of its size - has increased more than threefold.
Average annual total returns
(based on a $1,000 investment with all distributions reinvested)
For periods ended April 30, 2004
Class A shares
reflecting 5.75% maximum sales charge<F1>
1 year +16.12%
5 years +1.08%
10 years +12.27%
(Results as of April 30, 2004 shown to right of chart:
$4,989,599<F3> Washington Mutual with dividends reinvested
$2,627,509 S&P 500 with dividends reinvested
$717,050<F4> Washington Mutual with dividends taken in cash
$132,980<F5> Average savings institution
$70,4126 Consumer Price Index(inflation)
$10,000 Original investment)
(graph showing the results of investing $10,000 at the inception of the fund in
Washington Mutual with dividends reinvested, in the S%P 500 with dividends
reinvested, in Washington Mutual with dividends taken in cash, in an average
savings institution, compared with the comsumer price index (inflation.))
Results of a $10,000 investment in WMIF, the S&P500, and the CPI.
July 31, 1952 through April 30, 2004
Year Dividends
ended in Dividends TOTAL
April 30 Cash WMIF Reinvested WMIF RETURN S&P500 CPI
07/31/52 $9,425 $9,425 $10,000 $10,000
1953 $170 9,161 $170 9,330 -6.7% 10,094 9,963
1954 434 10,773 449 11,494 23.2 12,282 10,037
1955 500 14,665 542 16,288 41.7 17,295 10,000
1956 580 17,851 654 20,565 26.3 22,938 10,075
1957 647 18,304 756 21,877 6.4 22,520 10,449
1958 680 16,928 825 21,055 -3.8 22,269 10,824
1959 701 24,125 885 31,071 47.6 30,569 10,861
1960 728 21,871 948 29,041 -6.5 29,850 11,049
1961 815 26,300 1,097 36,167 24.5 37,071 11,161
1962 824 26,592 1,146 37,654 4.1 38,158 11,311
1963 891 28,838 1,279 42,278 12.3 42,296 11,423
1964 923 31,149 1,369 47,109 11.4 49,698 11,573
1965 956 36,940 1,462 57,490 22.0 57,450 11,760
1966 1,048 38,487 1,648 61,603 7.2 60,563 12,097
1967 1,176 39,424 1,906 65,270 6.0 64,731 12,397
1968 1,331 42,481 2,231 72,692 11.4 69,365 12,884
1969 1,516 48,408 2,627 85,576 17.7 75,988 13,596
1970 1,605 39,049 2,874 71,603 -16.3 61,834 14,419
1971 1,711 48,769 3,193 93,387 30.4 81,718 15,019
1972 1,779 47,991 3,455 95,521 2.3 87,267 15,543
1973 1,818 43,290 3,671 89,522 -6.3 89,214 16,330
1974 1,858 40,682 3,907 87,956 -1.7 77,959 17,978
1975 2,185 42,855 4,828 98,315 11.8 79,061 19,813
1976 2,350 53,771 5,498 129,949 32.2 95,785 21,011
1977 2,510 55,449 6,171 140,348 8.0 96,702 22,472
1978 2,658 54,228 6,849 144,340 2.8 100,121 23,933
1979 2,870 58,180 7,785 163,075 13.0 110,959 26,442
1980 3,203 56,032 9,167 165,848 1.7 122,446 30,337
1981 4,784 72,410 14,603 230,424 38.9 160,796 33,371
1982 4,097 69,851 13,327 235,768 2.3 148,977 35,543
1983 4,497 101,855 15,517 362,293 53.7 221,825 36,929
1984 4,840 100,116 17,527 373,509 3.1 225,698 38,614
1985 5,465 115,473 20,783 452,498 21.1 265,541 40,037
1986 6,110 152,209 24,380 623,768 37.9 361,778 40,674
1987 6,781 180,960 28,228 771,949 23.8 457,672 42,210
1988 7,116 167,083 30,815 742,856 -3.8 427,911 43,858
1989 6,183 198,139 27,838 911,609 22.7 525,847 46,105
1990 8,920 202,429 41,689 971,051 6.5 581,168 48,277
1991 9,136 222,016 44,574 1,113,747 14.7 683,361 50,637
1992 8,319 244,607 42,315 1,272,372 14.2 779,015 52,247
1993 8,468 268,131 44,625 1,442,389 13.4 850,855 53,933
1994 8,583 266,513 46,719 1,479,112 2.5 896,027 55,206
1995 9,790 301,054 55,060 1,730,694 17.0 1,052,264 56,891
1996 10,008 381,514 58,187 2,256,894 30.4 1,369,880 58,539
1997 10,506 455,551 62,763 2,763,032 22.4 1,714,024 60,000
1998 11,033 628,864 67,443 3,890,253 40.8 2,417,442 60,861
1999 11,527 707,654 71,812 4,458,483 14.6 2,945,129 62,247
2000 11,935 646,507 75,684 4,148,130 -7.0 3,243,332 64,157
2001 13,153 719,687 85,030 4,709,580 13.5 2,822,817 66,255
2002 13,116 700,823 86,458 4,674,962 -0.7 2,466,687 67,341
2003 13,345 593,597 89,753 4,050,310 -13.4 2,138,513 68,839
2004 13,383 717,050 92,016 4,989,599 23.2 2,627,509 70,412
Fund's lifetime
average annual
compound
return:
12.8%
Capital value<F4> Total value<F3>
Fiscal year ended Dividends Value at Dividends Value at WMIF total
April 30 in cash year-end reinvested year-end return
1953# $ 170 $ 9,161 $ 170 $ 9,330 (6.7)%
1954 434 10,773 449 11,494 23.2
1955 500 14,665 542 16,288 41.7
1956 580 17,851 654 20,565 26.3
1957 647 18,304 756 21,877 6.4
1958 680 16,928 825 21,055 (3.8)
1959 701 24,125 885 31,071 47.6
1960 728 21,871 948 29,041 (6.5)
1961 815 26,300 1,097 36,167 24.5
1962 824 26,592 1,146 37,654 4.1
1963 891 28,838 1,279 42,278 12.3
1964 923 31,149 1,369 47,109 11.4
1965 956 36,940 1,462 57,490 22.0
1966 1,048 38,487 1,648 61,603 7.2
1967 1,176 39,424 1,906 65,270 6.0
1968 1,331 42,481 2,231 72,692 11.4
1969 1,516 48,408 2,627 85,576 17.7
1970 1,605 39,049 2,874 71,603 (16.3)
1971 1,711 48,769 3,193 93,387 30.4
1972 1,779 47,991 3,455 95,521 2.3
1973 1,818 43,290 3,671 89,522 (6.3)
1974 1,858 40,682 3,907 87,956 (1.7)
1975 2,185 42,855 4,828 98,315 11.8
1976 2,350 53,771 5,498 129,949 32.2
1977 2,510 55,449 6,171 140,348 8.0
1978 2,658 54,228 6,849 144,340 2.8
1979 2,870 58,180 7,785 163,075 13.0
1980 3,203 56,032 9,167 165,848 1.7
1981 4,784 72,410 14,603 230,424 38.9
1982 4,097 69,851 13,327 235,768 2.3
1983 4,497 101,855 15,517 362,293 53.7
1984 4,840 100,116 17,527 373,509 3.1
1985 5,465 115,473 20,783 452,498 21.1
1986 6,110 152,209 24,380 623,768 37.9
1987 6,781 180,960 28,228 771,949 23.8
1988 7,116 167,083 30,815 742,856 (3.8)
1989 6,183 198,139 27,838 911,609 22.7
1990 8,920 202,429 41,689 971,051 6.5
1991 9,136 222,016 44,574 1,113,747 14.7
1992 8,319 244,607 42,315 1,272,372 14.2
1993 8,468 268,131 44,625 1,442,389 13.4
1994 8,583 266,513 46,719 1,479,112 2.5
1995 9,790 301,054 55,060 1,730,694 17.0
1996 10,008 381,514 58,187 2,256,894 30.4
1997 10,506 455,551 62,763 2,763,032 22.4
1998 11,033 628,864 67,443 3,890,253 40.8
1999 11,527 707,654 71,812 4,458,483 14.6
2000 11,935 646,507 75,684 4,148,130 (7.0)
2001 13,153 719,687 85,030 4,709,580 13.5
2002 13,116 700,823 86,458 4,674,962 (0.7)
2003 13,345 593,597 89,753 4,050,310 (13.4)
2004 13,383 717,050 92,016 4,989,599 23.2
Fund's lifetime average annual total return: 12.8%
During the period illustrated, stock prices fluctuated and were higher at the
end than at the beginning. These results should not be considered as a
representation of the results that may be realized from an investment made in
the Fund today. The indexes are unmanaged and do not reflect sales charges,
commissions or expenses.
The results shown are before taxes on Fund distributions and sale of Fund
shares.
#Since the Fund's inception on July 31, 1952.
<F1> As outlined in the prospectus, the sales charge is reduced for accounts
(and aggregated investments) of $25,000 or more. There is no sales charge on
dividends or capital gain distributions that are reinvested in additional
shares.
<F2> The maximum initial sales charge was 8.5% prior to July 1, 1988.
<F3> Total value includes reinvested dividends of $1,234,538 and reinvested
capital gain distributions of $1,994,150.
<F4> Capital value includes reinvested capital gain distributions of $362,163
but does not reflect income dividends of $249,561 taken in cash.
<F5> With all interest compounded. Based on figures supplied by the U.S. League
of Savings Institutions and the Federal Reserve Board, which reflect all kinds
of savings deposits, including longer term certificates. Unlike investments in
the Fund, such deposits are insured and, if held to maturity, offer a guaranteed
return of principal and a fixed rate of interest, but no opportunity for capital
growth. Maximum allowable interest rates were imposed by law until 1983.
<F6> Computed from data supplied by the U.S. Department of Labor, Bureau of
Labor Statistics.
Figures shown on these three pages 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 the most current information and month-end
results, visit americanfunds.com.
Most of the Fund's shareholders invest for retirement or college expenses.
Let's meet some exceptions.
(picture of father and son with horses)
Just as there is broad portfolio diversification in Washington Mutual Investors
Fund, there's also a great deal of diversity among its owners. Yet many of the
more than three million shareholder accounts in the Fund share similar
objectives.
Over half are retirement accounts of one type or another - IRAs, 401(k)s,
corporate pension plans and the like. The Fund is among the nation's most
popular choices for mutual fund investors putting money away for their golden
years. In fact, the retirement plan assets invested in Washington Mutual
Investors Fund are large enough, all by themselves, to rank the Fund in the
largest 1% of all equity mutual funds.
Tens of thousands of other shareholders are using the Fund to build assets in
education IRAs, 529 plans or similar accounts to help put their children (or
grandchildren) through college.
A natural choice for trust fund investors
The Fund also serves many investors who have less typical long-term goals. For
example, its unique structure makes it ideal for trust funds - accounts
established to provide income to beneficiaries while the principal can grow.
"Washington Mutual was created with trust fund investors in mind," observes Jeff
Steele, the Fund's president. "Entrepreneurs and others who are interested in
passing their wealth along to family members or charities typically have very
high standards, and they want their investments to have high standards, too."
The Fund's strict investment guidelines evolved from those originally
established in 1937 by the United States District Court for the District of
Columbia as a "Legal List" for high-quality securities suitable for trust funds.
Long dividend histories and healthy balance sheets are among the qualities
emphasized in determining whether a stock is eligible for the Fund's portfolio;
fewer than 3% of all U.S. stocks qualify. This extraordinary screening process
has helped sustain the high quality of the portfolio and has also helped the
managers produce strong and consistent long-term results.
So it's not surprising that there are over 50,000 trust fund accounts invested
in Washington Mutual Investors Fund. Here are two examples:
A disabled woman in her 40s receives regular benefits from a trust set up by her
father, an ophthalmologist who died a decade ago. Because the payments come from
a special needs trust, she continues to qualify for state benefits as well.
An Oregon family has set up a trust to provide regular income for two
generations; ultimately, the principal will go to their favorite charity.
(pictures of fireman , doctor and vet)
Attractive to endowment investors
The same conservative style that makes Washington Mutual Investors Fund
attractive as a trust fund investment makes it appealing to trustees with a
fiduciary responsibility for endowment money. More than 1,000 tax-exempt
charities count on income from the Fund to meet a wide variety of needs. Among
them:
A Missouri humane society uses its investment to help domestic and exotic
animals; recently, it found a reputable sanctuary for a Bengal tiger.
A fire department in Pennsylvania is investing bingo proceeds in the Fund with
the goal of buying a new truck in 2010.
In rural Texas, a youth ranch uses income from Washington Mutual to help provide
a place for underprivileged children to live, learn and play.
In southern California, a research laboratory uses its endowment income from the
Fund to seek cures for eye diseases.
Popular with a wide variety of other investors
Beyond retirement plans, college savings accounts, trust funds and endowments,
there are many thousands of regular, taxable accounts set up for just as many
reasons. Some are small; indeed, it's likely that some investors were attracted
in part by the Fund's unusually low initial minimum investment requirement of
$250. Others represent millions of dollars. Here are just a few:
In Iowa, a high school class of 1955 will celebrate its 50th anniversary reunion
next year - and the reunion committee's long-time investment in Washington
Mutual will help pay for the festivities, just as it did for the 40th and 45th
anniversary celebrations.
A Washington, D.C. area woman whose husband died just a year shy of qualifying
for a full government employee pension invested the life insurance proceeds in
the Fund to help meet the family's ongoing needs - including sending their four
children to college.
A surgeon who lives on the West Coast has monthly checks drawn on his investment
in the Fund and sent to his mother, who lives on the East Coast. The checks,
issued in her name, help cover her living expenses.
An Alaska woman who received a windfall invested it in the Fund, kept her job
and now uses income from the account to supplement her paycheck.
On the following pages, we'll take a more detailed look at four examples of how
investors use Washington Mutual Investors Fund in relatively unusual ways. We
hope you enjoy their stories.
Grandparents use the Fund to encourage their grandchildren to make the grade.
(pictures of kids by trees and grandparents)
When one of their six grandchildren brought home a disappointing report card in
1997, Raye and Rich Swanson decided that an incentive program might help.
The couple opened a special account in Washington Mutual Investors Fund and
announced that each grandchild who graduates from high school with a grade point
average of 2.5 or better would receive $2,000. What's more, they added, whoever
earns the highest GPA will get the balance in the account as a grand prize.
The program has proved to be just the ticket for a group that thrives on
competitive sports ranging from basketball to barrel racing. Most of the
grandchildren are on track to collect $2,000, and there's a healthy race
underway for the grand prize.
"It's been a great motivation," says oldest grandchild Lacey, who graduates this
year and hopes to become a radiology technician. "We're very lucky that they
care so much."
Leah, an aspiring actress who will graduate in 2006, plans to use her $2,000 to
move to New York City and seek fame on Broadway. Early on, she pegged little
sister Lindsey - the youngest grandchild, scheduled to graduate in 2011 - as
the favorite to win the grand prize. So she made a deal, promising to help
Lindsey with homework in exchange for a cut of the grand prize. Lindsey has
ambitious goals for whatever's left: She wants to put it toward a house and a
car.
Kord (class of 2005) and Austin (2008) would use the money to travel, while
Riley (2010) hasn't made up her mind just yet.
When the family gathers on holidays at Raye and Rich's house in Clarkston,
Washington - just across the Snake River from Idaho - Raye updates everyone on
how the Fund is doing. It's not just the grandchildren who are interested:
Kord's parents have Washington Mutual accounts, too. Raye and Rich are long-time
shareholders themselves, who occasionally tapped their account to buy equipment
for their logging business before retiring a few years ago.
"We've seen what the Fund can do," says Raye. "Now we're using it to see what
our grandchildren can do."
(pictures of school group and students)
A school group uses the Fund to learn about investing.
Early each Friday morning throughout the school year, 23 teenage girls and boys
in Montgomery, Alabama, get together to talk about their portfolio. They're the
Sidney Lanier High School Investment Club, and one of their favorite investments
is Washington Mutual Investors Fund.
"The Fund provides a great example of diversification and the potential benefits
of professional money management," says Jackie Washington, an accounting teacher
who serves as the club's faculty adviser.
The club was born four years ago, when a local benefactor began giving several
Montgomery high schools $2,500 a year to teach investing. Club members - who
must maintain strong grades and be recommended by three teachers - discuss
investment possibilities and decide where to put the money. Currently, their
portfolio also includes several mutual funds, a certificate of deposit at a
local bank and an interest in a T-shirt business based at the school.
In addition to learning about investing, club members get a valuable lesson in
philanthropy: 10% of profits go to charity. Recipients have included a sickle
cell anemia research group, a "Toys for Tots" program and an effort to help the
school develop self-sustaining programs.
Sidney Lanier High School consists of four academies, and the club's members are
students in the business academy. Their focus is on succeeding in the business
and financial worlds. Dressing the part is a key lesson, so once a week
professional attire is required.
Celina Rudolph, a senior, observes that shopping has become a different
experience since the club invested in mutual funds. "I'll see something and
realize that we own a piece of the company that makes it," she says. Among
Washington Mutual Investors Fund's 155 holdings are clothing makers, food and
beverage companies, and computer manufacturers, so it would be difficult for a
teenager not to recognize many of the names.
Perhaps the most important lesson that club members learn is the value of a
disciplined approach. Courtney Lewis, a sophomore, says being part of the club
has "helped us learn that rather than just spend money, we can invest and try to
make a profit."
(pictures of library and books)
A library uses the Fund to make an overdue repair.
Many small towns might like a pool in the basement of the community center -
but not Wilton, Maine, where the only community center is the 89-year-old local
library.
"We don't want people swimming in our children's section," says head librarian
Vaughan Gagne, "so I'm arranging to fix a retaining wall that's begun to leak."
Income from Washington Mutual Investors Fund will, literally, help keep the
Wilton Free Public Library above water. Two-thirds of the library's budget comes
from the town, while the remainder - which covers everything from periodicals
to paychecks - comes from grants and endowment income. A significant portion of
the endowment is invested in the Fund.
The library provides crucial services to the 4,200 people of rural Wilton,
located 90 miles northwest of Portland. For example, Gagne estimates that only
one in three local residents owns a computer, so the library's Internet access
facilities are a hit with students doing research and grandparents eager to see
online photos of grandchildren.
New fiction is most popular with the town's readers. Unfortunately, books aren't
as well-made as they once were. "Sometimes brand new bestsellers need a new
binding after just three or four borrowers have read them," Gagne says. Income
from Washington Mutual helps repair bindings or replace books.
The Fund was selected as an endowment investment in 1997, according to David
Olson, chairman of the library's board. "We like the prudent approach and the
policy against investing in alcohol and tobacco companies," Olson says. "We've
even set up a separate account for our campaign to enlarge and improve the
library."
The staff - Gagne, a children's librarian and two part-timers - had no
retirement plan until a few years ago, when the town began contributing to one
on their behalf. That plan is invested in Washington Mutual, as is money Gagne
began investing earlier for her own eventual retirement.
"I did a lot of research," Gagne says (not surprising, for a librarian!), "and
chose Washington Mutual for the same reasons our board did."
(picture of sympony and conductor)
A symphony uses the Fund to hit all the right notes.
After leading the Virginia Symphony through a score from a Harry Potter movie,
conductor Shizuo Kuwahara delights an audience of third-graders with a magic
wand that shoots confetti. The prop is among the more novel things that the
orchestra has purchased using money from its investment in Washington Mutual
Investors Fund.
It's not the most unusual expense, though. That almost certainly would have been
the rental of a gorilla costume when the Symphony accompanied the movie King
Kong at a concert last summer. Inside the ape suit was Brad Kirkpatrick,
Director of Finance and Administration for the Norfolk-based Symphony.
Kirkpatrick says income from the Symphony's endowment - a portion of which is
invested in the Fund - also helps to cover less colorful but more critical
expenses, such as the musicians' salaries, insurance premiums for the
instruments and even the cost of tuning two pianos more than 30 times annually.
Next season will mark the orchestra's 85th year. These days the schedule
includes more than 140 performances at over 60 different venues. The Symphony's
own truck - maintained using income from the endowment - hauls more than two
tons of equipment around to shows with the local ballet and opera companies,
arts festivals, a Masterworks series and a Pops series. There's also a youth
program to educate and entertain more than 30,000 area students each year.
"Our goal is to bring classical music to life for people of all ages,"
Kirkpatrick says.
The effort has paid off. While Norfolk isn't among the nation's largest cities,
the Virginia Symphony was elevated to the big leagues in 2000 when it was
accepted into the International Conference of Symphony and Opera Musicians.
A national tour in the late 1990s, paid for in part by income from the
Washington Mutual investment, helped put the orchestra on the map. Stops in New
York City included Carnegie Hall and Lincoln Center, where the Symphony
attracted new backers. That was especially satisfying, says Kirkpatrick, because
it exemplified use of the endowment to ensure that the music will continue for
many years to come..
Harry J. Lister, retirement plan pioneer, retires
(picture of Harry J. Lister)
In 1999, we received a letter from shareholder Raye Swanson, who described how
she was using Washington Mutual Investors Fund to encourage her grandchildren to
improve their grades.
Harry J. Lister, then the Fund's president, was intrigued. He held onto the
letter, and it was the seed that eventually blossomed into the article on the
previous six pages.
It wasn't surprising that Harry felt unusual uses of the Fund were interesting:
He has a long history of exploring new ground for mutual funds. In the 1960s, he
was instrumental in developing the first use of mutual funds in a retirement
plan for the self-employed. His continuing efforts over the years helped create
Individual Retirement Accounts (IRAs), which have revolutionized most Americans'
abilities to control their financial destinies.
On April 30, Harry retired as president of Washington Management Corporation,
the Fund's business manager. His career spanned 46 years of enormous change and
growth for mutual funds. At the outset, in 1958, there were only 150 funds.
Today there are more than 8,000. What's more, in 1958 there were about 3.6
million shareholder accounts in mutual funds; today the number is over 240
million.
For more than three decades, Harry has been an officer or director of Washington
Mutual Investors Fund. Fortunately for all of us, he will continue as a director
and as vice chairman of the board.
Washington Mutual Investors Fund has been an ideal fund for Harry to serve. It
was conceived with fiduciary responsibilities in mind, a characteristic that has
always made the Fund attractive to people concerned with retirement plans.
Harry's interest in such plans brought him to the attention of Bernie Nees, the
Fund's founder. In 1972, Bernie recruited Harry, who moved from New York City to
Washington, D.C.
Harry immediately began developing retirement programs that could take full
advantage of mutual funds. He consulted with Capital Research and Management
Company - Washington Mutual's investment adviser - and soon the American Funds
family was offering a variety of retirement plans.
Matthew Fink, who just retired as president of the Investment Company Institute
(the national association of the U.S. investment company industry), notes that
in the early 1970s Harry was one of the people in the mutual fund industry who
most helped bring about necessary changes in pension and retirement laws.
Without these changes, IRAs would not have developed, and mutual funds could not
have become the investment of choice for many different types of retirement
accounts. Fink explains, "Harry Lister and several other members worked
tirelessly to help members of Congress write complex legislation, such as the
landmark Employee Retirement Income Security Act of 1974 (ERISA). To this day,
ERISA remains the foundation of U.S. law governing pension and retirement plans.
He helped lay the groundwork for the future growth of all types of self-directed
retirement plans and the now-widespread use of mutual funds by investors saving
for retirement. We're all indebted to him."
Harry served on the Investment Company Institute's Pension Committee for many
years and as its chairman from 1976 to 1981, and today he is chairman of the
Institute's Education Foundation. He was also long active in the College for
Financial Planning and served as chairman of its board of regents from 1981 to
1983. In the mid-1980s, he authored a book entitled Your Guide to IRAs and 14
Other Retirement Plans. He held a number of executive positions at Washington
Management Corporation over the years, including service as president of
Washington Mutual Investors Fund from 1985 to 2001 and as vice chairman of the
Fund's board thereafter.
Those of us who have been fortunate enough to work with Harry over the years
will miss his leadership, his judgment and his strong commitment to the best
interests of shareholders. We thank him for his invaluable contributions and are
grateful that his talents will remain available to the Fund through his
continuing service on our board.
Investment portfolio April 30, 2004
Percent of
Five largest industries net assets
Pharmaceuticals 9.51%
Oil & gas 8.90
Commercial banks 8.44
Diversified telecommunication services 7.73
Electric utilities 6.03
Percent of
Ten largest holdings net assets
ChevronTexaco 3.49%
J.P. Morgan Chase 2.79
Bank of America 2.69
Bristol-Myers Squibb 2.44
Eli Lilly 2.41
General Electric 2.26
Exxon Mobil 2.18
Fannie Mae 2.13
SBC Communications 2.08
Wells Fargo 1.95
Shares or
Market value Percent of
amount (000) net assets
Equity securities (common stocks and convertible securities) - 98.00%
Energy 9.41%
Energy equipment & services .51%
Halliburton Co. 4,300,000 $ 128,140 .19%
Schlumberger Ltd. 3,625,000 212,171 .32
340,311 .51
Oil & gas 8.90%
Apache Corp. 4,000,000 167,480 .25
Ashland Inc.<F1> 3,680,000 176,272 .26
ChevronTexaco Corp. 25,493,500 2,332,655 3.49
ConocoPhillips 11,607,750 827,633 1.24
EOG Resources, Inc. 925,000 45,556 .07
Exxon Mobil Corp. 34,276,600 1,458,469 2.18
Marathon Oil Corp. 13,450,000 451,382 .68
Sunoco, Inc. 2,750,000 172,975 .26
Unocal Corp. 8,696,500 313,422 .47
5,945,844 8.90
6,286,155 9.41
Materials 4.56%
Chemicals .95%
Air Products and Chemicals, Inc. 7,850,000 391,008 .59
Crompton Corp.<F1> 5,800,001 36,076 .05
PPG Industries, Inc. 3,500,000 207,585 .31
634,669 .95
Containers & packaging .14%
Temple-Inland Inc. 1,550,000 95,743 .14
Metals & mining 1.02%
Alcoa Inc. 14,450,000 444,338 .67
Newmont Mining Corp. 6,250,000 233,750 .35
678,088 1.02
Paper & forest products 2.45%
International Paper Co. 20,700,000 834,624 1.25
MeadWestvaco Corp. 7,200,000 188,280 .28
Weyerhaeuser Co. 10,350,000 612,720 .92
1,635,624 2.45
3,044,124 4.56
Capital goods 8.15%
Aerospace & defense 3.48%
Boeing Co. 11,700,000 $ 499,473 .75%
General Dynamics Corp. 2,425,000 227,028 .34
Honeywell International Inc. 2,500,000 86,450 .13
Lockheed Martin Corp. 4,550,000 217,035 .32
Northrop Grumman Corp. 5,350,000 530,988 \
- .82
Northrop Grumman Corp. 7.25% convertible preferred 2004 140,000 units 14,648 /
Raytheon Co. 8,400,000 270,984 .40
United Technologies Corp. 5,550,000 478,743 .72
2,325,349 3.48
Construction & engineering .20%
Fluor Corp. 3,536,500 134,953 .20
Electrical equipment .49%
Emerson Electric Co. 5,450,000 328,199 .49
Industrial conglomerates 2.67%
General Electric Co. 50,450,000 1,510,978 2.26
Tyco International Ltd. 9,825,000 269,696 .41
1,780,674 2.67
Machinery 1.31%
Caterpillar Inc. 1,225,000 95,219 .14
Deere & Co. 4,638,100 315,576 .47
Dover Corp. 2,000,000 80,060 .12
Eaton Corp. 1,200,000 71,256 .11
Illinois Tool Works Inc. 2,353,900 202,930 .30
Ingersoll-Rand Co. Ltd., Class A 1,700,000 109,735 .17
874,776 1.31
5,443,951 8.15
Commercial services & supplies 1.12%
Commercial services & supplies 1.12%
Avery Dennison Corp. 1,850,000 118,825 .18
Deluxe Corp. 2,200,000 90,882 .14
IKON Office Solutions, Inc. 5,400,000 60,102 .09
Pitney Bowes Inc. 8,514,900 372,527 .56
ServiceMaster Co. 8,500,000 103,105 .15
745,441 1.12
Transportation .49%
Airlines .16%
Southwest Airlines Co. 7,500,000 107,100 .16
Road & rail .33%
Burlington Northern Santa Fe Corp. 4,200,000 137,340 .21
Union Pacific Corp. 1,400,000 82,502 .12
219,842 .33
326,942 .49
Automobiles & components 1.91%
Auto components .10%
Dana Corp. 3,200,000 $ 64,512 .10%
Automobiles 1.81%
General Motors Corp. 24,213,400 1,148,199 \
- 1.81
General Motors Corp., Series B, 5.25% convertible debentures 2032 $2,442,000 61,685 /
1,209,884 1.81
1,274,396 1.91
Consumer durables & apparel .93%
Household durables .55%
Newell Rubbermaid Inc. 8,000,000 189,120 .28
Stanley Works<F1> 4,200,000 178,542 .27
367,662 .55
Textiles, apparel & luxury goods .38%
NIKE, Inc., Class B 1,150,000 82,742 .12
VF Corp. 3,800,000 175,408 .26
258,150 .38
625,812 .93
Hotels, restaurants & leisure .88%
Hotels, restaurants & leisure .88%
Carnival Corp., units 8,650,000 369,095 .55
McDonald's Corp. 8,000,000 217,840 .33
586,935 .88
Media .32%
Media .32%
Dow Jones & Co., Inc. 1,287,600 59,345 .09
Gannett Co., Inc. 800,000 69,344 .10
Knight-Ridder, Inc. 1,100,000 85,184 .13
213,873 .32
Retailing 4.65%
Distributors .46%
Genuine Parts Co. 8,625,000 308,775 .46
Multiline retail 1.28%
May Department Stores Co. 10,365,000 319,242 .48
Target Corp. 12,300,000 533,451 .80
852,693 1.28
Specialty retail 2.91%
Gap, Inc. 5.75% convertible notes 2009 $44,500,000 64,358 .10
Limited Brands, Inc. 22,000,000 454,080 .68
Lowe's Companies, Inc. 17,500,000 911,050 1.36
TJX Companies, Inc. 21,000,000 515,970 .77
1,945,458 2.91
3,106,926 4.65
Food & staples retailing 1.53%
Food & staples retailing 1.53%
Albertson's, Inc.<F1> 19,906,750 $ 465,022 .70%
Walgreen Co. 16,125,000 555,990 .83
1,021,012 1.53
Food & beverage 4.95%
Beverages .98%
Coca-Cola Co. 6,075,000 307,213 .46
PepsiCo, Inc. 6,400,000 348,736 .52
655,949 .98
Food products 3.97%
ConAgra Foods, Inc. 14,075,000 406,627 .61
General Mills, Inc. 10,400,000 507,000 .76
H.J. Heinz Co. 14,950,000 570,940 .85
Kellogg Co. 7,200,000 308,880 .46
Sara Lee Corp. 29,300,000 676,244 1.01
Unilever NV (New York registered) 2,800,000 184,604 .28
2,654,295 3.97
3,310,244 4.95
Household & personal products 2.77%
Household products 1.64%
Kimberly-Clark Corp. 13,003,100 851,053 1.27
Procter & Gamble Co. 2,350,000 248,512 .37
1,099,565 1.64
Personal products 1.13%
Avon Products, Inc. 8,950,000 751,800 1.13
1,851,365 2.77
Health care equipment & services 1.61%
Health care equipment & supplies .53%
Applera Corp. - Applied Biosystems Group 8,733,000 162,172 .24
Becton, Dickinson and Co. 3,750,000 189,562 .29
351,734 .53
Health care providers & services 1.08%
Aetna Inc. 1,850,000 153,088 .23
Cardinal Health, Inc. 5,325,000 390,056 .58
CIGNA Corp. 2,775,000 179,015 .27
722,159 1.08
1,073,893 1.61
Pharmaceuticals & biotechnology 9.51%
Pharmaceuticals 9.51%
Abbott Laboratories 5,550,000 244,311 \
- .64
Abbott Laboratories when-issued<F2> 4,500,000 185,715 /
Bristol-Myers Squibb Co. 64,935,000 1,629,869 2.44
Eli Lilly and Co. 21,800,000 1,609,058 2.41
Johnson & Johnson 3,300,000 178,299 .27
Merck & Co., Inc. 13,000,000 611,000 .92
Pfizer Inc 35,225,000 $ 1,259,646 1.89%
Schering-Plough Corp. 4,560,800 76,302 .11
Wyeth 14,600,000 555,822 .83
6,350,022 9.51
Banks 12.24%
Commercial banks 8.44%
Bank of America Corp. (merged with FleetBoston Financial Corp.) 22,331,480 1,797,461 2.69
BANK ONE CORP. 8,593,000 424,236 .64
Comerica Inc. 4,900,000 252,987 .38
HSBC Holdings PLC (ADR) 10,272,000 740,611 1.11
KeyCorp 3,400,000 100,980 .15
National City Corp. 2,800,000 97,076 .15
PNC Financial Services Group, Inc. 7,100,000 377,010 .56
SunTrust Banks, Inc. 1,100,000 74,855 .11
Wachovia Corp. 10,170,000 465,278 .70
Wells Fargo & Co. 23,100,000 1,304,226 1.95
5,634,720 8.44
Thrifts & mortgage finance 3.80%
Fannie Mae 20,700,000 1,422,504 2.13
Freddie Mac 9,990,000 583,416 .87
Washington Mutual, Inc. 13,650,000 537,674 .80
2,543,594 3.80
8,178,314 12.24
Diversified financials 4.66%
Capital markets 3.66%
Bank of New York Co., Inc. 19,950,000 581,343 .87
J.P. Morgan Chase & Co. 49,600,000 1,864,960 2.79
2,446,303 3.66
Consumer finance .23%
American Express Co. 1,500,000 73,425 .11
SLM Corp. 2,100,000 80,451 .12
153,876 .23
Diversified financial services .77%
Citigroup Inc. 10,670,000 513,120 .77
3,113,299 4.66
Insurance 5.78%
Insurance 5.78%
AFLAC Inc. 2,750,000 116,133 .17
Allstate Corp. 13,968,300 641,145 .96
American International Group, Inc. 13,200,000 945,780 1.42
Aon Corp. 9,900,000 257,994 .39
Hartford Financial Services Group, Inc. 3,275,000 200,037 .30
Jefferson-Pilot Corp. 5,925,000 293,821 .44
Lincoln National Corp. 7,850,000 352,308 .53
Marsh & McLennan Companies, Inc. 10,000,000 451,000 .67
St. Paul Travelers Companies, Inc. (formerly St. Paul Companies, Inc.) 9,950,000 404,667 .61
XL Capital Ltd., Class A 2,575,000 196,601 .29
3,859,486 5.78
Software & services 1.83%
IT services .96%
Automated Data Processing, Inc. 6,800,000 $ 297,908 .44%
Electronic Data Systems Corp. 16,050,000 293,555
Electronic Data Systems Corp. 7.625% FELINE PRIDES 2004 3,220,000 units 54,354 .52
645,817 .96
Software .87%
Microsoft Corp. 21,000,000 545,370 .82
Oracle Corp.<F3> 3,000,000 33,660 .05
579,030 .87
1,224,847 1.83
Technology hardware & equipment 2.14%
Computers & peripherals 2.14%
Dell Inc.<F3> 1,600,000 55,536 .08
Hewlett-Packard Co. 34,625,000 682,113 1.02
International Business Machines Corp. 7,845,000 691,694 1.04
1,429,343 2.14
Semiconductors & semiconductor equipment .67%
Semiconductors & semiconductor equipment .67%
Applied Materials, Inc.<F3> 7,000,000 127,610 .19
Intel Corp. 3,000,000 77,190 .12
Linear Technology Corp. 400,000 14,252 .02
Texas Instruments Inc. 9,135,300 229,296 .34
448,348 .67
Telecommunication services 7.73%
Diversified telecommunication services 7.73%
ALLTEL Corp. 6,284,100 316,342 \
- .58
ALLTEL Corp. 7.75% convertible preferred 2005 1,500,000 units 74,775 /
AT&T Corp. 33,325,999 571,541 .86
BellSouth Corp. 34,600,000 893,026 1.34
CenturyTel, Inc. 6.875% ACES 2005 575,000 units 14,162 .02
SBC Communications Inc. 55,700,000 1,386,930 2.08
Sprint Corp. - FON Group 39,783,400 711,725 1.06
Verizon Communications Inc. 31,700,000 1,196,358 1.79
5,164,859 7.73
Utilities 7.63%
Electric utilities 6.03%
Ameren Corp. 2,300,000 100,556
Ameren Corp. 9.75% ACES convertible preferred 2005 760,000 units 20,634 .18
American Electric Power Co., Inc. 16,880,800 513,852 .77
Consolidated Edison, Inc. 6,600,000 271,986 .41
Dominion Resources, Inc. 9,315,000 594,390 .89
DTE Energy Co. 4,150,000 161,933 .24
Exelon Corp. 5,000,000 334,700 .50
FirstEnergy Corp. 9,133,635 357,125 .53
FPL Group, Inc. 6,129,000 389,927 .58
PPL Corp. 2,000,000 $ 85,700 .13%
Progress Energy, Inc. 11,125,418 475,834 .71
Puget Sound Energy, Inc. 3,800,000 83,448 .13
Southern Co. 13,000,000 373,880 .56
TECO Energy, Inc. 1,000,000 12,730 .02
TXU Corp. 8.125% FELINE PRIDES 2006 800,000units 33,592 .05
Xcel Energy Inc. 13,000,000 217,490 .33
4,027,777 6.03
Gas utilities .15%
NiSource Inc. 4,900,000 98,784 .15
Multi-utilities & unregulated power 1.45%
Constellation Energy Group, Inc. 4,600,000 177,008 .26
Duke Energy Corp. 18,440,000 388,346 .58
Public Service Enterprise Group Inc. 7,600,000 326,040 .49
Williams Companies, Inc. 7,500,000 77,250 .12
968,644 1.45
5,095,205 7.63
Miscellaneous 2.53%
Miscellaneous 2.53%
Other equity securities in initial period of acquisition 1,689,129 2.53
Total equity securities (cost: $55,038,342,000) 65,463,921 98.00
U.S. Treasuries and other federal agencies 2.57%
U.S. Treasuries and other federal agencies 2.57%
Federal Home Loan Bank Discount Notes .95% - 1.01% due 5/12 - 7/20/2004 $878,029 876,574 1.31
United States Treasury Bills .91% - .94% due 6/10 - 7/15/2004 842,101 840,806 1.26
Total short-term securities (cost: $1,717,359,000) 1,717,380 2.57
Total investment securities (cost: $56,755,701,000) 67,181,301 100.57
Other assets less liabilities (380,868) (.57)
Net assets $ 66,800,433 100.00%
<FN>
<F1> 1. The Fund owns 5.29%, 5.06%, 5.16% and 5.41% of the outstanding voting
securities of Ashland, Crompton, Stanley Works and Albertson's, respectively,
and thus is considered an affiliate of these companies under the Investment
Company Act of 1940.
<F2> 2. This security has been authorized but has not yet been issued and does
not include the when-issued shares of Hospira.
<F3> 3. Securities did not produce income during the last 12 months.
</FN>
ADR = American Depositary Receipts
See Notes to Financial Statements
Financial statements
Statement of assets and liabilities at April 30, 2004
(dollars and shares in thousands, except per-share amounts)
Assets:
Investment securities at market:
Unaffiliated issuers (cost: $55,675,014) $66,325,389
Affiliated issuers (cost: $1,080,687) 855,912 $67,181,301
Cash 283
Receivables for:
Sales of investments 25,620
Sales of Fund's shares 118,472
Dividends and interest 152,328 296,420
Other assets 5
67,478,009
Liabilities:
Payables for:
Purchases of investments 576,498
Repurchases of Fund's shares 43,766
Management services 15,067
Services provided by affiliates 41,190
Deferred Directors' & Advisory Board compensation 924
Other fees and expenses 131 677,576
Net assets at April 30, 2004 $66,800,433
Net assets consist of:
Capital paid in on shares of capital stock $55,808,293
Undistributed net investment income 201,665
Undistributed net realized gain 364,875
Net unrealized appreciation 10,425,600
Net assets at April 30, 2004 $66,800,433
Total authorized capital stock - 4,000,000 shares, $.001 par value
Shares Net asset value
Net assets outstanding per share/1/
Class A $57,026,479 1,980,666 $28.79
Class B 2,549,321 89,011 28.64
Class C 2,459,559 86,016 28.59
Class F 1,917,422 66,717 28.74
Class 529-A 425,906 14,807 28.76
Class 529-B 110,377 3,849 28.68
Class 529-C 156,186 5,448 28.67
Class 529-E 23,348 814 28.69
Class 529-F 11,466 399 28.74
Class R-1 16,376 571 28.68
Class R-2 370,705 12,960 28.60
Class R-3 1,008,932 35,181 28.68
Class R-4 329,600 11,471 28.73
Class R-5 394,756 13,713 28.79
/1/ Maximum offering price and redemption price per share were equal to the net
asset value per share for all share classes, except for classes A and 529-A, for
which the maximum offering prices per share were $30.55 and $30.51,
respectively.
See Notes to Financial Statements
Statement of operations for the year ended April 30, 2004
(dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. withholding tax of $4,062; also includes
$24,684 from affiliates) $1,611,021
Interest 24,948 $ 1,635,969
Fees and expenses:
Investment advisory services 115,994
Business management services 48,428
Distribution services 178,924
Transfer agent services 50,185
Administrative services 10,869
Reports to shareholders 1,693
Registration statement and prospectus 1,729
Postage, stationery and supplies 5,709
Directors' and Advisory Board compensation 1,027
Auditing and legal 169
Custodian 415
Other 149
Total expenses before reimbursement 415,291
Reimbursement of expenses 549 414,742
Net investment income 1,221,227
Net realized gain and unrealized appreciation on
investments:
Net realized gain on investments 1,391,805
Net unrealized appreciation on investments 9,001,008
Net realized gain and unrealized appreciation on
investments 10,392,813
Net increase in net assets resulting from operations $11,614,040
Statement of changes in net assets
(dollars in thousands)
Year ended April 30
2004 2003
Operations:
Net investment income $ 1,221,227 $ 1,050,002
Net realized gain on investments 1,391,805 38,361
Net unrealized appreciation (depreciation)
on investments 9,001,008 (8,316,036)
Net increase (decrease) in net assets
resulting from operations 11,614,040 (7,227,673)
Dividends and distributions paid to shareholders:
Dividends from net investment income (1,130,674) (1,028,729)
Distributions from net realized gain on
investments (405,371) (75,983)
Total dividends and distributions paid
to shareholders (1,536,045) (1,104,712)
Capital share transactions 8,507,821 3,583,085
Total increase (decrease) in net assets 18,585,816 (4,749,300)
Net assets:
Beginning of year 48,214,617 52,963,917
End of year (including undistributed net
investment income:
$201,665 and $111,130, respectively) $66,800,433 $ 48,214,617
See Notes to Financial Statements
Notes to financial statements
1. Organization and significant accounting policies
Organization - Washington Mutual Investors Fund (the "Fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The Fund's investment objective is to produce current income
and to provide an opportunity for growth of principal consistent with sound
common stock investing.
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) are sponsored by the Commonwealth of Virginia and 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:
Initial
sales Contingent deferred
Share class charge sales charge upon redemption Conversion feature
Classes A and 529-A Up to 5.75% None (except 1% for certain redemptions None
within one year of purchase without an
initial sales charge)
Classes B and 529-B None Declines from 5% to zero for redemptions Classes B and 529-B convert to classes A
within six years of purchase and 529-A, respectively, after eight years
Class C None 1% for redemptions within one year Class C converts to Class F after 10
of purchase
years
Class 529-C None 1% for redemptions within one year None
of purchase
Class 529-E None None None
Classes F and 529-F None None None
Classes 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. 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
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 for securities of comparable maturity, quality and type.
Short-term securities maturing within 60 days are valued at amortized cost,
which approximates market value. 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 are fair valued as determined in good faith 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; significant events occurring after the close of
trading in the security; and changes in overall market conditions.
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.
2. 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.
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
short-term capital gains and losses; capital losses related to sales of
securities within 30 days of purchase; deferred expenses; cost of investments
sold; and amortization of premiums. 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. The Fund may also designate a portion
of the amount paid to redeeming shareholders as a distribution for tax purposes.
As of April 30, 2004, the cost of investment securities, for Federal income tax
purposes, was $56,768,111,000.
During the year ended April 30, 2004, the Fund reclassified $8,000 to
undistributed net investment income from undistributed net realized gains; and
reclassified $26,000 from undistributed net investment income and $52,068,000
from undistributed net realized gains to additional paid-in capital to align
financial reporting with tax reporting.
As of April 30, 2004, the components of distributable earnings on a tax basis
were as follows:
(dollars in thousands)
Undistributed net investment income $ 202,741
Undistributed long-term capital gains 377,133
Gross unrealized appreciation on investment securities 12,844,521
Gross unrealized depreciation on investment securities (2,431,331)
The tax character of distributions paid to shareholders was as follows (dollars
in thousands):
Year ended April 30, 2004
Distributions Distributions from Total
from ordinary fomr long-term distributions
Share class income capital gains paid
Class A $1,023,435 $353,523 $1,376,958
Class B 26,631 14,964 41,595
Class C 22,527 13,551 36,078
Class F 27,287 10,227 37,514
Class 529-A 6,006 2,219 8,225
Class 529-B 904 592 1,496
Class 529-C 1,240 804 2,044
Class 529-E 262 117 379
Class 529-F 127 54 181
Class R-1 152 94 246
Class R-2 2,866 1,661 4,527
Class R-3 8,967 4,233 13,200
Class R-4 3,296 1,130 4,426
Class R-5 6,974 2,202 9,176
Total $1,130,674 $405,371 $1,536,045
Year ended April 30, 2003/1/
Distributions Distributions from Total
from ordinary fomr long-term distributions
Share class income capital gains paid
Class A $969,924 $70,108 $1,040,032
Class B 19,443 2,187 21,630
Class C 13,864 1,631 15,495
Class F 14,299 1,159 15,458
Class 529-A 2,929 238 3,167
Class 529-B 496 62 558
Class 529-C 655 81 736
Class 529-E 103 10 113
Class 529-F 18 1 19
Class R-1 34 3 37
Class R-2 547 56 603
Class R-3 800 72 872
Class R-4 288 28 316
Class R-5 5,329 347 5,676
Total $1,028,729 $75,983 $1,104,712
<F1>Class R-1, R-2, R-3, R-4 and R-5 shares were offered beginning May 15, 2002.
3. Fees and transactions with related parties
Business management services - The Fund has a business management agreement
with Washington Management Corporation (WMC). Under this agreement, WMC provides
services necessary to carry on the Fund's general administrative and corporate
affairs. These services encompass matters relating to general corporate
governance, regulatory compliance and monitoring of the Fund's contractual
service providers, including custodian operations, shareholder services and Fund
share distribution functions. Under the agreement, all expenses chargeable to
the Class A shares of the Fund, including compensation to the business manager,
shall not exceed 1% of the average net assets of the Fund on an annual basis. At
the beginning of the year, the agreement provided for monthly fees, accrued
daily, based on a declining series of annual rates beginning with 0.175% on the
first $3 billion of daily net assets and decreasing to 0.040% of such assets in
excess of $55 billion. The Board of Directors approved an amended agreement
effective February 1, 2004, continuing the series of rates to include a new
reduced annual rate of 0.035% on daily net assets in excess of $67 billion. For
the year ended April 30, 2004, the business management services fee was
$48,428,000, which was equivalent to an annualized rate of 0.082% of average
daily net assets. Johnston, Lemon & Co. Incorporated (JLC), a wholly owned
subsidiary of The Johnston-Lemon Group, Incorporated (JLG), earned $657,000 on
its retail sales of shares and distribution plan of the Fund and received no
brokerage commissions resulting from the purchases and sales of securities for
the investment account of the Fund.
Investment advisory services - Capital Research and Management Company (CRMC),
the Fund's investment adviser, is the parent company of American Funds Service
Company (AFS), the Fund's transfer agent, and American Funds Distributors, Inc.
(AFD), the principal underwriter of the Fund's shares. The Investment Advisory
Agreement with CRMC provides for monthly fees accrued daily. These fees are
based on a declining series of annual rates beginning with 0.225% on the first
$3 billion of daily net assets and decreasing to 0.185% on such assets in excess
of $55 billion. For the year ended April 30, 2004, the investment advisory
services fee was $115,994,000, which was equivalent to an annualized rate of
0.196% 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 for 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. The plans provide for annual expenses, based on a
percentage of average daily net assets, ranging from 0.25% to 1.00% as noted
below. In some cases, the Board of Directors has approved expense amounts lower
than plan limits. 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 for providing certain
shareholder services. Expenses in excess of these amounts, up to approved
limits, may be used to compensate dealers and wholesalers for distribution
expenses.
For classes 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. Each class reimburses AFD for amounts billed
within the prior 15 months but only to the extent that the overall annual
expense limit of 0.25% is not exceeded. As of April 30, 2004, there were no
unreimbursed expenses subject to reimbursement for classes A or 529-A.
Currently
Share class approved limits Plan limits
Class A 0.25% 0.25%
Class 529-A 0.25 0.50
Classes B and 529-B 1.00 1.00
Classes C, 529-C and R-1 1.00 1.00
Class R-2 0.75 1.00
Classes 529-E and R-3 0.50 0.75
Classes F, 529-F and R-4 0.25 0.50
Transfer agent services - The Fund has a transfer agent agreement with AFS
for classes A and B. Under this agreement, these share classes compensate
AFS for transfer agent services including shareholder recordkeeping,
communications and transaction processing. AFS is also compensated for
certain transfer agent services provided to all other share classes from
the administrative services fees paid to CRMC described below.
Administrative services - The Fund has an administrative services agreement
with CRMC to provide transfer agent and other related shareholder services
for all classes of shares other than classes A and B. Each relevant class
pays CRMC annual fees of 0.15% (0.10% for Class R-5) based on its
respective average daily net assets. Each relevant 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.
During the start-up period for classes R-1, R-2, R-3 and R-4, CRMC has
voluntarily agreed to pay a portion of these fees. 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 in
the accompanying financial statements, the Commonwealth of Virginia is not
considered a related party. Administrative services fees are presented
gross of any payments made by CRMC.
Expenses under the agreements described above for the year ended April 30,
2004, were as follows (dollars in thousands):
Administrative services
Commonwealth
CRMC of Virginia
Distribution Transfer agent administrative Transfer agent administrative
Share class services services services services services
Class A $128,076 $48,088 Not applicable Not applicable Not applicable
Class B 21,116 2,097 Not applicable Not applicable Not applicable
Class C 18,659 | $2,799 $ 562 Not applicable
Class F 3,546 | 2,128 275 Not applicable
Class 529-A 472 | 467 46 $311
Class 529-B 826 | 124 41 83
Class 529-C 1,116 Included in 167 44 111
Class 529-E 82 administrative 24 2 16
Class 529-F 17 services 10 1 7
Class R-1 125 | 19 10 Not applicable
Class R-2 1,694 | 339 1,145 Not applicable
Class R-3 2,749 | 825 706 Not applicable
Class R-4 446 | 267 18 Not applicable
Class R-5 Not applicable | 315 7 Not applicable
Total $178,924 $50,185 $7,484 $2,857 $528
Deferred Directors' and Advisory Board compensation - Since the adoption of the
deferred compensation plan in 1994, Independent Directors and Advisory Board
members 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' and Advisory Board
compensation in the accompanying financial statements includes $691,000 in
current fees (either paid in cash or deferred) and a net increase of $336,000 in
the value of the deferred amounts.
Affiliated officers and Directors - WMC and JLC are both wholly owned
subsidiaries of JLG. All officers of the Fund and all of its Directors who are
affiliated with JLG receive no compensation directly from the Fund in such
capacities.
4. Capital share transactions
Capital share transactions in the Fund were as follows (dollars and shares in
thousands):
Year ended April 30, 2004
Reinvestments of
dividends and
Sales<F1> distributions Repurchases<F1> Net increase
Share class Amount Shares Amount Shares Amount Shares Amount Shares
Class A $ 8,658,906 316,038 $1,297,927 46,995 $(5,596,587) (204,091) $4,360,246 158,942
Class B 784,093 28,982 39,955 1,448 (160,096) (5,858) 663,952 24,572
Class C 1,132,018 41,659 34,320 1,244 (212,342) (7,789) 953,996 35,114
Class F 1,021,066 37,267 33,743 1,219 (256,599) (9,291) 798,210 29,195
Class 529-A 183,817 6,679 8,223 297 (12,711) (458) 179,329 6,518
Class 529-B 45,906 1,683 1,496 54 (2,506) (91) 44,896 1,646
Class 529-C 73,740 2,685 2,044 74 (5,645) (204) 70,139 2,555
Class 529-E 11,711 426 379 14 (728) (26) 11,362 414
Class 529-F 7,909 288 181 6 (387) (13) 7,703 281
Class R-1 11,914 436 246 9 (5,604) (203) 6,556 242
Class R-2 293,230 10,725 4,527 163 (53,205) (1,943) 244,552 8,945
Class R-3 911,148 33,444 13,186 474 (108,485) (3,956) 815,849 29,962
Class R-4 275,613 9,872 4,426 159 (42,240) (1,520) 237,799 8,511
Class R-5 139,624 5,078 8,914 322 (35,306) (1,292) 113,232 4,108
Total net increase (decrease) $13,550,695 495,262 $1,449,567 52,478 $(6,492,441) (236,735) $8,507,821 311,005
Year ended April 30, 2003<F2>
Class A $ 7,060,551 291,493 $ 973,429 40,929 $(7,098,673) (296,696) $ 935,307
35,726
Class B 792,895 32,647 20,726 880 (184,797) (7,910) 628,824 25,617
Class C 809,481 33,465 14,733 629 (168,702) (7,234) 655,512 26,860
Class F 696,571 28,917 14,070 599 (180,470) (7,670) 530,171 21,846
Class 529-A 163,103 6,654 3,167 135 (5,308) (228) 160,962 6,561
Class 529-B 45,053 1,846 559 24 (1,178) (50) 44,434 1,820
Class 529-C 59,484 2,427 736 31 (2,082) (90) 58,138 2,368
Class 529-E 9,228 379 113 5 (256) (11) 9,085 373
Class 529-F 2,749 118 19 1 (27) (1) 2,741 118
Class R-1 8,234 354 37 1 (598) (26) 7,673 329
Class R-2 106,862 4,638 603 26 (14,832) (649) 92,633 4,015
Class R-3 139,939 6,051 867 38 (19,854) (870) 120,952 5,219
Class R-4 74,628 3,294 316 14 (7,707) (348) 67,237 2,960
Class R-5 313,165 11,520 5,529 233 (49,278) (2,148) 269,416 9,605
Total net increase (decrease) $10,281,943 423,803 $1,034,904 43,545 $(7,733,762) (323,931) $3,583,085 143,417
<FN>
<F1> Includes exchanges between share classes of the Fund.
<F2>Class R-1, R-2, R-3, R-4 and R-5 shares were offered beginning May 15, 2002.
</FN>
5. Investment transactions and other disclosures
The Fund made purchases and sales of investment securities, excluding short-term
securities, of $15,687,637,000 and $7,025,508,000, respectively, during the year
ended April 30, 2004.
The Fund receives a reduction in its custodian fee equal to the amount of
interest calculated on certain cash balances held at the custodian bank. For the
year ended April 30, 2004, the custodian fee of $415,000 included $8,000 that
was offset by this reduction, rather than paid in cash.
Financial highlights<F1>
Income (loss) from Dividends and
investment operations distributions
Ratio Ratio
Net of ex- of ex- Ratio
gains penses penses of net
(losses) Divi- to aver- to aver- income
Net on secur Total dends Total Net age net age net (loss)
Asset Net ities from (from Distri- divi- Net assets assets assets to
value invest- (both invest- net butions dends asset end of before after aver-
begin- ment realized ment invest- (from and value, Total period reim- reim- age
ning of income and un- oper- ment capital distri- end of return (in burse- burse- net
period (loss) realized) ations income) gains) butions period <F2> millions) ment ment assets
Class A:
Year ended
4/30/2004 $23.99 $ .59 $4.94 $5.53 $(.54) $ (.19) $ (.73) $28.79 23.19% $57,027 .64% .64% 2.14%
Year ended
4/30/2003 28.37 .55 (4.35) (3.80) (.54) (.04) (.58) 23.99 (13.36) 43,701 .67 .67 2.28
Year ended
4/30/2002 29.80 .50 (.75) (.25) (.54) (.64) (1.18) 28.37 (.73) 50,669 .65 .65 1.72
Year ended
4/30/2001 29.14 .57 3.17 3.74 (.58) (2.50) (3.08) 29.80 13.54 48,700 .65 .65 1.95
Year ended
4/30/2000 35.31 .61 (3.09) (2.48) (.58) (3.11) (3.69) 29.14 (6.96) 47,319 .63 .63 1.91
Class B:
Year ended
4/30/2004 23.88 .37 4.92 5.29 (.34) (.19) (.53) 28.64 22.25 2,549 1.40 1.40 1.36
Year ended
4/30/2003 28.25 .36 (4.32) (3.96) (.37) (.04) (.41) 23.88 (14.01) 1,538 1.45 1.45 1.52
Year ended
4/30/2002 29.71 .25 (.72) (.47) (.35) (.64) (.99) 28.25 (1.50) 1,097 1.41 1.41 .88
Year ended
4/30/2001 29.11 .29 3.22 3.51 (.41) (2.50) (2.91) 29.71 12.67 289 1.42 1.42 .99
Period from
3/15/2000
to 4/30/2000 26.93 .02 2.16 2.18 - - - 29.11 8.09 34 .17 .17 .08
Class C:
Year ended
4/30/2004 23.84 .35 4.92 5.27 (.33) (.19) (.52) 28.59 22.19 2,460 1.48 1.48 1.27
Year ended
4/30/2003 28.22 .35 (4.33) (3.98) (.36) (.04) (.40) 23.84 (14.10) 1,214 1.51 1.51 1.46
Year ended
4/30/2002 29.70 .21 (.73) (.52) (.32) (.64) (.96) 28.22 (1.68) 678 1.51 1.51 .72
Period from
3/15/2001
to 4/30/2001 28.32 (.02) 1.40 1.38 - - - 29.70 4.87 36 .23 .23 (.07)
Class F:
Year ended
4/30/2004 23.95 .56 4.94 5.50 (.52) (.19) (.71) 28.74 23.13 1,917 .71 .71 2.04
Year ended
4/30/2003 28.33 .53 (4.34) (3.81) (.53) (.04) (.57) 23.95 (13.42) 899 .74 .74 2.24
Year ended
4/30/2002 29.79 .42 (.72) (.30) (.52) (.64) (1.16) 28.33 (.89) 444 .78 .78 1.46
Period from
3/15/2001
to 4/30/2001 28.37 .01 1.41 1.42 - - - 29.79 5.01 16 .12 .12 .04
Class 529-A:
Year ended
4/30/2004 23.97 .56 4.95 5.51 (.53) (.19) (.72) 28.76 23.07 426 .71 .71 2.03
Year ended
4/30/2003 28.36 .54 (4.35) (3.81) (.54) (.04) (.58) 23.97 (13.38) 199 .70 .70 2.29
Period from
2/15/2002
to 4/30/2002 27.71 .04 .75 .79 (.14) - (.14) 28.36 2.82 49 .16 .16 .14
Class 529-B:
Year ended
4/30/2004 23.91 .32 4.96 5.28 (.32) (.19) (.51) 28.68 22.08 110 1.59 1.59 1.15
Year ended
4/30/2003 28.34 .32 (4.35) (4.03) (.36) (.04) (.40) 23.91 (14.18) 53 1.62 1.62 1.36
Period from
2/19/2002
to 4/30/2002 27.25 (.01) 1.22 1.21 (.12) - (.12) 28.34 4.38 11 .30 .30 (.02)
Class 529-C:
Year ended
4/30/2004 23.91 .32 4.93 5.25 (.30) (.19) (.49) 28.67 22.06 156 1.58 1.58 1.15
Year ended
4/30/2003 28.33 .32 (4.34) (4.02) (.36) (.04) (.40) 23.91 (14.18) 69 1.61 1.61 1.38
Period from
2/15/2002
to 4/30/2002 27.71 (.01) .75 .74 (.12) - (.12) 28.33 2.65 15 .32 .32 (.03)
Class 529-E:
Year ended
4/30/2004 23.92 .46 4.94 5.40 (.44) (.19) (.63) 28.69 22.68 23 1.06 1.06 1.68
Year ended
4/30/2003 28.34 .45 (4.35) (3.90) (.48) (.04) (.52) 23.92 (13.73) 9 1.08 1.08 1.92
Period from
3/1/2002
to 4/30/2002 28.59 .01 (.13) (.12) (.13) - (.13) 28.34 (.44) 1 .17 .17 .04
Class 529-F:
Year ended
4/30/2004 23.96 .53 4.95 5.48 (.51) (.19) (.70) 28.74 23.00 11 .81 .81 1.90
Period from
9/16/2002
to 4/30/2003 23.98 .32 .10 .42 (.40) (.04) (.44) 23.96 1.85 3 .824 .824 2.254
Year ended April 30
2004 2003 2002 2001 2000
Portfolio turnover rate for all
classes of shares 12% 21% 22% 25% 26%
Income (loss) from Dividends and
investment operations distributions
Ratio Ratio
Net of ex- of ex- Ratio
gains penses penses of net
(losses) Divi- to aver- to aver- income
Net on secur Total dends Total Net age net age net (loss)
Asset ities from (from Distri- divi- Net assets assets assets to
value Net (both invest- net butions dends asset end of before after aver-
begin- invest- realized ment invest- (from and value, Total period reim- reim- age
ning of ment and un- oper- ment capital distri- end of return (in burse- burse- net
period income realized) ations income) gains) butions period <F2> millions) ment ment assets
Class R-1:
Year ended
4/30/2004 $23.92 $.35 $4.93 $5.28 $(.33) $(.19) $(.52) $28.68 22.16% $ 16 1.52% 1.49% 1.25%
Period from
5/29/2002
to 4/30/2003 28.52 .32 (4.46) (4.14) (.42) (.04) (.46) 23.92 (14.50) 8 1.714 1.514 1.504
Class R-2:
Year ended
4/30/2004 23.88 .35 4.91 5.26 (.35) (.19) (.54) 28.60 22.12 371 1.69 1.45 1.26
Period from
5/31/2002
to 4/30/2003 28.46 .33 (4.40) (4.07) (.47) (.04) (.51) 23.88 (14.29) 96 1.784 1.474 1.584
Class R-3:
Year ended
4/30/2004 23.93 .46 4.94 5.40 (.46) (.19) (.65) 28.68 22.68 1,009 1.07 1.07 1.63
Period from
6/4/2002
to 4/30/2003 27.81 .41 (3.74) (3.33) (.51) (.04) (.55) 23.93 (11.94) 125 1.114 1.094 1.954
Class R-4:
Year ended
4/30/2004 23.95 .56 4.94 5.50 (.53) (.19) (.72) 28.73 23.11 330 .70 .70 2.01
Period from
5/20/2002
to 4/30/2003 28.78 .51 (4.74) (4.23) (.56) (.04) (.60) 23.95 (14.66) 71 .744 .734 2.324
Class R-5:
Year ended
4/30/2004 23.99 .65 4.94 5.59 (.60) (.19) (.79) 28.79 23.49 395 .39 .39 2.36
Period from
5/15/2002
to 4/30/2003 28.84 .57 (4.78) (4.21) (.60) (.04) (.64) 23.99 (14.57) 230 .414 .414 2.514
<FN>
<F1> 1. Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
<F2> 2. Total returns exclude all sales charges, including contingent deferred
sales charges.
<F3> 3. The ratios in this column reflect the impact, if any, of certain
reimbursements and payments from CRMC. During the start-up period for the
retirement plan share classes (except Class R-5), CRMC voluntarily agreed to pay
a portion of the fees related to transfer agent services.
<F4> 4. Annualized.
</FN>
See Notes to Financial Statements
Report of independent registered public accounting firm
To the Board of Directors and Shareholders of Washington Mutual Investors Fund,
Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the 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 Washington Mutual Investors Fund, Inc. (the
"Fund") at April 30, 2004, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the periods presented, in
conformity with accounting principles generally accepted in the United States of
America. 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), which require that we plan and perform the audits 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 at April 30, 2004 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Los Angeles, California
June 1, 2004
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 information below is provided for the
Fund's fiscal year ending April 30, 2004.
During the fiscal year ended, the Fund paid a long-term capital gain
distribution of $405,371,000. The Fund also designated as a capital gain
distribution a portion of earnings and profits paid to shareholders in
redemption of their shares.
Individual shareholders are eligible for reduced tax rates on qualified dividend
income. For purposes of computing the dividends eligible for reduced tax rates,
all of the dividends paid by the Fund from ordinary income earned during the
fiscal year are considered qualified dividend income.
Corporate shareholders may exclude up to 70% of qualifying dividends. For
purposes of computing this exclusion, all of the dividends paid by the Fund from
ordinary income earned during the fiscal year represent qualifying dividends.
Certain states may exempt from income taxation that portion of dividends paid by
the Fund from ordinary income that was derived from direct U.S. government
obligations. For purposes of computing this exclusion, $19,071,000 of the
dividends paid by the Fund from ordinary income earned during the fiscal year
were derived from interest on direct U.S. government obligations.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans and 403(b) plans need not be reported as taxable income.
However, many retirement plan trusts may need this information for their annual
information reporting.
Since the information above is reported for the Fund's fiscal year and not the
calendar year, shareholders should refer to their Form 1099-DIV or other tax
information which will be mailed in January 2005 to determine the calendar year
amounts to be included on their 2004 tax returns. Shareholders should consult
their tax advisers.
Other share class results (unaudited)
Class B, Class C, Class F and Class 529
Returns for periods ended March 31, 2004 (the most recent calendar quarter):
Life of
1 year class
Class B shares
Reflecting applicable contingent deferred sales charge
(CDSC), maximum of 5%, payable only if shares are sold
within six years of purchase +28.44% +5.79%<F1>
Not reflecting CDSC +33.44% +6.21%<F1>
Class C shares
Reflecting CDSC, maximum of 1%, payable only if shares
are sold within one year of purchase +32.37% +3.03%<F2>
Not reflecting CDSC +33.37% +3.03%<F2>
Class F shares3
Not reflecting annual asset-based fee charged by
sponsoring firm +34.37% +3.85%<F2>
Class 529-A shares
Reflecting 5.75% maximum sales charge +26.61% +2.08%<F4>
Not reflecting maximum sales charge +34.36% +4.97%<F4>
Class 529-B shares
Reflecting applicable CDSC, maximum of 5%, payable
only if shares are sold within six years of purchase +28.17% +3.08%<F5>
Not reflecting CDSC +33.17% +4.90%<F5>
Class 529-C shares
Reflecting CDSC, maximum of 1%, payable only if shares
are sold within one year of purchase +32.20% +4.06%<F4>
Not reflecting CDSC +33.20% +4.06%<F4>
Class 529-E shares<F3> +33.89% +3.11%<F6>
Class 529-F shares<F3>
Not reflecting annual asset-based fee charged by
sponsoring firm +34.23% +16.63%<F7>
Figures shown on this page 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 the
most current information and month-end results, visit americanfunds.com.
<FN>
<F1> 1. Average annual total return from March 15, 2000, when Class B shares
were first sold.
<F2> 2. Average annual total return from March 15, 2001, when Class C and Class
F shares were first sold.
<F3> 3. These shares are sold without any initial or contingent deferred sales
charge.
<F4> 4. Average annual total return from February 15, 2002, when Class 529-A and
Class 529-C shares were first sold.
<F5> 5. Average annual total return from February 19, 2002, when Class 529-B
shares were first sold.
<F6> 6. Average annual total return from March 1, 2002, when Class 529-E shares
were first sold.
<F7> 7. Average annual total return from September 16, 2002, when Class 529-F
shares were first sold.
</FN>
Board of Directors and Directors Emeritus
Independent Directors
Number of
portfolios
within
Year first the Fund
elected a complex<F2>
Director on which
of the Director
Name and age Fund<F1> Principal occupation(s) during past five years serves Other directorships<F3> held
Cyrus A. Ansary, 70 1983 President, Investment Services International Co. LLC 3 JPMorgan Value Opportunities
(private investment company for various operating Fund
entities)
Charles A. Bowsher, 72 2001 Retired Comptroller General of the United States 1 DeVry Inc.; SI International,
Inc.
Daniel J. Callahan III, 71 1997 Vice Chairman and Treasurer, The Morris & Gwendolyn 3 JPMorgan Value Opportunities
Cafritz Foundation Fund; WGL Holdings, Inc.
R. Clark Hooper, 57 2003 President, Dumbarton Group LLC (consulting); 1 None
Former Executive Vice President, NASD
Edward W. Kelley, Jr., 72 2002 Retired Governor, Federal Reserve Board 1 Security Capital Corp.
James C. Miller III, 61 1992 Chairman, The CapAnalysis Group, LLC (economic, 3 Flyi Inc.; JPMorgan
financial and regulatory consulting); Former Counselor, Value Opportunities Fund
Citizens for a Sound Economy
Katherine D. Ortega, 69 2002 Former Treasurer of the United States 3 JPMorgan Value Opportunities
Fund; The Kroger Co.;
Rayonier Inc.
J. Knox Singleton, 55 2001 President and Chief Executive Officer, 3 Healthcare Realty Trust,
INOVA Health System Inc.; JPMorgan Value
Opportunities Fund
T. Eugene Smith, 73 1987 President, T. Eugene Smith, Inc. (real estate 3 JPMorgan Value Opportunities
consulting, planning, and development) Fund
Interested Directors<F4>
Number of
portfolios
Year First within
elected a the Fund
Director complex<F2>
or Officer on which
Name, age, and of the Director
position with Fund Fund<F1> Principal occupation(s) during past five years serves Other directorships<F3> held
Fred J. Brinkman, 75 1997 Senior Financial Consultant, Washington 1 None
Director Management Corporation
James H. Lemon, Jr., 68 1971 Chairman of the Board and Chief Executive Officer, 3 JPMorgan Value Opportunities
Chairman of the Board The Johnston-Lemon Group, Incorporated (financial Fund
services holding company)
Harry J. Lister, 68 1972 Director, Washington Management Corporation 3 JPMorgan Value Opportunities
Vice Chairman of the Board Fund
Jeffrey L. Steele, 58 2000 President and Director, Washington Management 3 JPMorgan Value Opportunities
President Corporation; Former Partner, Dechert Price and Rhoads Fund
Directors Emeritus
Stephen Hartwell, Chairman Emeritus John A. Beck Stephen G. Yeonas
We regret to announce that Leonard P. Steuart, II resigned from the Fund's Board
on January 14, 2004, for health and personal reasons. Mr. Steuart had served the
Fund for 21 years, consisting of 14 years on the Advisory Board and seven years
on the Board of Directors, beginning on January 1, 1997. His wise counsel and
warm friendship will be missed.
Advisory Board and other officers
Advisory Board members
Number of
portfolios
within
the Fund
complex
on which
Year first Advisory
elected to Board
Advisory member
Name and age Board<F1> Principal occupation during past five years serves Other directorships<F3> held
Mary K. Bush, 56 1995 President, Bush International Inc. (international 1 Brady Corporation;
financial advisory services) Millennium Chemicals, Inc.;
Mortgage Guaranty Insurance
Corporation; Pioneer Funds;
R.J. Reynolds Tobacco
Holdings, Inc.
Louise M. Cromwell, 59 2001 Senior Counsel, Shaw Pittman 1 None
C. Richard Pogue, 67 2001 Retired Executive Vice President, Investment 1 FAM Equity-Income Fund;
Company Institute FAM Value Fund
Linda D. Rabbitt, 55 2001 President, Rand Construction Corporation 1 Watson Wyatt & Company
Holdings
William J. Shaw, 58 2001 President and Chief Operating Officer, Marriott 1 Marriott International, Inc.
International, Inc.
Other officers
Year first
elected an
Name, age and officer of Principal occupation(s)
position with Fund the Fund/1/ during past five years
Howard L. Kitzmiller, 73 1983 Director, Senior Vice President,
Senior Vice President, Secretary, and Assistant Treasurer,
Secretary, and Treasurer Washington Management Corporation
Ralph S. Richard, 85 1953 Director, Vice President, and Treasurer,
Vice President Washington Management Corporation
Lois A. Erhard, 51 1983 Vice President, Washington Management
Vice President Corporation
Michael W. Stockton, 37 1995 Director, Vice President, Assistant
Assistant Vice President, Secretary, and Assistant Treasurer,
Assistant Secretary, and Washington Management Corporation
Assistant Treasurer
J. Lanier Frank, 43 1997 Assistant Vice President,
Assistant Vice President Washington Management Corporation
Ashley L. Shaw, 355 2000 Assistant Secretary, Washington
Assistant Secretary Management Corporation;
Former Attorney/Law Clerk
The Statement of Additional Information includes additional information about
the Fund's Directors and is available without charge upon request by calling
American Funds Service Company at 800/421-0180. The address for all Directors,
Advisory Board members, and officers of the Fund is 1101 Vermont Avenue, NW,
Washington, DC 20005, attention: Fund Secretary.
<FN>
<F1> 1. Directors, Advisory Board members and officers of the Fund serve until
their resignation, removal, or retirement.
<F2> 2. In each instance where a Director of the Fund serves on other Funds
affiliated with The American Funds Group, such service is as a Trustee of The
Tax-Exempt Fund of Maryland and The Tax-Exempt Fund of Virginia; both are
portfolios of The American Funds Tax-Exempt Series I.
<F3> 3. This includes all directorships other than those in The American Funds
Group that are held by each Director or Advisory Board member as a director of a
public company or a
registered investment company.
<F4> 4. "Interested persons" within the meaning of the 1940 Act on the basis of
their affiliation with the Fund's Business Manager, Washington Management
Corporation.
<F5> 5. Ashley L. Shaw is the daughter of James H. Lemon, Jr.
</FN>
Offices
Offices of the Fund and of the business manager
Washington Management Corporation
1101 Vermont Avenue, NW
Washington, DC 20005-3521
202/842-5665
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
Transfer agent
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
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Counsel
Thompson, O'Donnell, Markham, Norton & Hannon
1212 New York Avenue, NW
Washington, DC 20005-3987
Independent auditors
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 Washington Mutual Investors 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. 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 0.76 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 0.84
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 0.07 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.
What makes American Funds different?
For more than 70 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 29 carefully conceived, broadly diversified funds has
attracted over 25 million shareholder accounts.
Our unique combination of strengths includes these five factors:
* A long-term, value-oriented approach
Rather than follow fads, we pursue a consistent strategy, focusing on each
investment's long-term potential.
* An unparalleled global research effort
American Funds draws on one of the industry's most globally integrated research
networks.
* The multiple portfolio counselor system
Every American Fund is divided among a number of portfolio counselors. Each
takes responsibility for a portion independently, within each fund's objectives;
in most cases, research analysts manage a portion as well. Over time this method
has contributed to a consistency of results and continuity of management.
* Experienced investment professionals
The recent market decline was not the first for most of the portfolio counselors
who serve the American Funds. Nearly 70% of them were in the investment business
before the sharp market decline of 1987.
* A commitment to low operating expenses
American Funds' operating expenses are among the lowest in the mutual fund
industry. Our portfolio turnover rates are low as well, keeping transaction
costs and tax consequences contained.
Investors should carefully consider the investment objectives, risks, charges
and expenses of the American Funds and CollegeAmerica. 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 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 upon request, free of charge,
by calling American Funds Service Company, visiting the American Funds website
or accessing the U.S. Securities and Exchange Commission website at www.sec.gov.
This report is for the information of shareholders of Washington Mutual
Investors Fund but it may also 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 June 30, 2004, 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(R)
(logo: Washington Mutual Funds)
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
202/842-5665
The Capital Group Companies
American Funds
Capital Research and Management
Capital International
Capital Guardian
Capital Bank and Trustlogo
Lit.No. MFGEAR-901-0604
recycle symbol
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, 1101 Vermont Avenue, NW,
Suite 600, Washington, DC 20005.
ITEM 3 - Audit Committee Financial Expert
The Registrant's Board has determined that Charles A. Bowsher, 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
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
Fees billed by the registrant's auditors for each of the last two fiscal years,
including 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 a description of the nature of the services comprising the
fees, are listed below:
Registrant:
a) Audit Fees:
2003 $94,000
2004 $98,000
b) Audit- Related Fees: 2003 none 2004 none
c) Tax Fees:
2003 $6,000
2004 $6,000
The tax fees consist of professional services relating to the
preparation of the registrant's tax returns.
d) All Other Fees: 2003 none 2004 none
ITEM 4 - Principal Accountant Fees and Services (continued)
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) Audit- Related Fees: 2003 none 2004 none
b) Tax Fees: 2003 none 2004 none
c) All Other Fees: 2003 none 2004 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 business manager, the
investment adviser, and any entity controlling, controlled by, or under common
control with the investment adviser or business manager 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 business manager or
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 services listed above under paragraphs
b, c and d.
Aggregate non-audit fees paid to the registrant's auditors, including fees for
all services billed to the adviser and affiliates were $814,000 for fiscal year
2003 and $6,000 for fiscal year 2004. 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.
ITEM 6 - Reserved
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 - Purchase of Equity Securities by Closed End Management Investment
Company and Affiliated Procedures
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 9 - 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 Governance Committee comprised solely of persons
who are not considered "interested persons" of the registrant within the meaning
of the Investment Company Act of 1940. 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
Governance Committee of the registrant, c/o the registrant's Secretary, and
should 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 Governance Committee.
ITEM 10 - Controls and Procedures
(a) The officers providing the certifications in this report in accordance with
rule 30a-2 under the Investment Company Act of 1940 have concluded, based on
their evaluation of the Registrant's disclosure controls and procedures (as such
term is defined in such rule), 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 last fiscal half-year (the Registrant's
second fiscal half-year in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the Registrant's
internal control over financial reporting.
ITEM 11 - Exhibits
(a) The Code of Ethics that is the subject of the disclosure required by Item 2
is attached as an exhibit hereto.
(b) 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.
Washington Mutual Investors Fund, Inc.
By /S/ Jeffrey L. Steele, President and PEO
Date: July 6, 2004
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/ Jeffrey L. Steele, President and PEO
Date: July 6, 2004
By /S/ Howard L. Kitzmiller, Senior Vice President, Secretary, and Treasurer
Date: July 6, 2004