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, 2006
Date of reporting period: October 31, 2005
Burton L. Raimi
Secretary
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
(name and address of agent for service)
ITEM 1 - Reports to Stockholders
(logo American funds(R))
The right choice for the long term(R)
Washington Mutual Investors Fund
(picture of George Washington statue)
Semi-annual report for the six months ended October 31, 2005
Washington Mutual Investors Fund(SM) seeks to provide income and growth of
principal through investments in quality common stocks.
This Fund is one of the 29 American Funds. The organization ranks among the
nation's three largest mutual fund families. 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.
Figures shown in this report are past results for Class A shares (unless
otherwise indicated) and are not predictive of results in future periods. Fund
results shown (unless otherwise indicated) are at net asset value. If a sales
charge (maximum 5.75%) had been deducted, the results would have been lower.
Current and future results may be lower or higher than those shown. For the most
current information and month-end results, visit americanfunds.com. Share prices
and returns will vary, so investors may lose money. Investing for short periods
makes losses more likely. Investments are not FDIC-insured, nor are they
deposits of or guaranteed by a bank or any other entity.
Here are the average annual total returns on a $1,000 investment with all
distributions reinvested for periods ended September 30, 2005 (the most recent
calendar quarter):
1 year 5 years 10 years
Class A shares
Reflecting 5.75% maximum sales charge
Average annual total return -- +4.11% +10.11%
Cumulative total return +2.20% +22.32% +162.01%
The Fund's investment adviser and business manager each waived 5% of their
manage-ment fees from September 1, 2004 through March 31, 2005, and increased
the waivers to 10% on April 1, 2005. Fund results shown reflect the waivers,
without which they would have been lower. Please see the Financial Highlights
table on page 22 for details.
Results for other share classes can be found on page 31. Please see the inside
back cover for important information about other share classes.
About the cover: A profile view of the statue of General George Washington in
Boston's Public Garden.
Fellow shareholders:
(picture of George Washington's head from cover photo)
Despite rising interest rates, higher energy prices and Gulf Coast hurricanes in
late summer, the nation's economy -- as represented by its gross domestic
product -- expanded at an annual rate of 4.3% in the third quarter ended
September 30, 2005. This continuing strength reinforced the Federal Reserve
Board's resolve to continue increasing the federal funds rate (now up to 4.0%).
The Federal Reserve Board remains concerned that higher energy costs may soon be
increasingly reflected in higher prices of both goods and services. Thus far,
however, general price increases have been moderate and long-term interest rates
have been relatively stable.
For the past six months, Washington Mutual Investors Fund's total return, with
dividends reinvested, was 2.8%, compared with the unmanaged Standard & Poor's
500 Composite Index's total return of 5.3%. This period was one in which smaller
and more speculative companies showed greater relative returns than large,
mature companies. Over longer periods, your Fund showed the following results:
Average annual total returns for periods ended October 31, 2005
1 year 5 years 10 years Lifetime*
Washington Mutual +6.3% +4.3% +10.7% +12.7%
S&P 500 +8.7% -1.7% +9.3% +11.3%
*Since the Fund's inception on July 31, 1952.
Washington Mutual's concentration of holdings remained almost identical to that
of a year ago, with financials at almost 22% of net assets. The excellent income
stream from the financial sector was an important factor facilitating the
increase in Washington Mutual's quarterly dividend to 15 cents per share in
June. During the six-month period, 46 (or 29%) of the Fund's holdings increased
their dividends.
During the six-month period, six new equity securities have appeared in the
Fund's portfolio: Baker Hughes, Gap, Harley-Davidson Motor, Johnson Controls,
McKesson and R.R. Donnelley & Sons. Meanwhile, 10 companies have been
eliminated: ALLTEL, Burlington Northern Santa Fe, CenturyTel, Comerica, Dow
Jones, Gillette, Honeywell International, IKON Office Solutions, Mylan
Laboratories and Unocal.
We wish to inform you that T. Eugene Smith will be retiring this month after 18
years of dedicated service on the Fund's Board of Directors. We are deeply
appreciative of his advice, support and leadership. The Board of Directors has
elected Barbara Hackman Franklin as an independent Director of the Fund. Ms.
Franklin is president and CEO of Barbara Franklin Enterprises, an international
business consulting firm. She served as the 29th U.S. Secretary of Commerce in
the administration of President George H.W. Bush. Ms. Franklin serves on the
board of several public companies and has been recognized as "Director of the
Year" by The National Association of Corporate Directors (2000) and Board Alert
(2003). She is currently a member of the Public Company Accounting Oversight
Board Advisory Council, a Trustee of the Financial Accounting Foundation and
chairman of the Economic Club of New York. In addition, the Fund's Board has
elected R. Clark Wadlow to serve on the Fund's Advisory Board. Mr. Wadlow is an
attorney with extensive experience in the communications industry.
As always, we are pleased to hear your comments and questions.
Cordially,
(signature) (signature)
James H. Lemon, Jr. Jeffrey L. Steele
Vice Chairman of the Board President of the Fund
December 10, 2005
Cyrus A. Ansary, an independent Director of the Fund since 1983, has been
elected non-executive chairman of the Board. James H. Lemon, Jr., the previous
chairman, has been elected vice chairman. Jeffrey L. Steele continues as
president and principal executive officer. As independent Board chair, Mr.
Ansary will chair Board meetings, including executive sessions of the
independent Directors, and will be responsible for Board agendas, but will not
have other executive or management responsibilities with the Fund. He will
remain unaffiliated with the Fund's investment adviser, business manager and any
of their affiliates.
For current information about the Fund, visit americanfunds.com.
Investment portfolio October 31, 2005 unaudited
Percent of Percent of
Industry sector holdings net assets Ten largest holdings net assets
Financials 21.98% JPMorgan Chase 2.88%
Industrials 12.00 Chevron 2.80
Health care 10.42 General Electric 2.75
Energy 9.89 Exxon Mobil 2.66
Consumer staples 9.00 Citigroup 2.32
Consumer discretionary 8.87 BellSouth 2.08
Utilities 7.26 Bank of America 1.97
Information technology 7.17 SBC Communications 1.88
Telecommunication services 6.97 Bristol-Myers Squibb 1.83
Materials 3.81 Hewlett-Packard 1.69
Miscellaneous .37
Convertible securities .08
Short-term securities and
other assets less liabilities 2.18
Market value Percent of
Common stocks -- 97.74% Shares (000) net assets
Energy -- 9.89%
Apache Corp. 4,000,000 $ 255,320 .34%
Baker Hughes Inc. 3,410,000 187,414 .25
Chevron Corp. 36,879,800 2,104,730 2.80
ConocoPhillips 12,915,500 844,415 1.13
EOG Resources, Inc. 5,300,000 359,234 .48
Exxon Mobil Corp. 35,576,600 1,997,270 2.66
Halliburton Co. 5,925,000 350,168 .47
Marathon Oil Corp. 13,482,612 811,114 1.08
Schlumberger Ltd. 4,540,000 412,096 .55
Sunoco, Inc. 1,350,000 100,575 .13
7,422,336 9.89
Materials -- 3.81%
Air Products and Chemicals, Inc. 4,000,000 228,960 .30
Alcoa Inc. 19,150,000 465,154 .62
Ashland Inc. 1,830,000 97,923 .13
E.I. du Pont de Nemours and Co. 11,300,000 471,097 .63
International Paper Co. 19,133,800 558,324 .74
MeadWestvaco Corp. 4,391,200 115,137 .15
PPG Industries, Inc. 4,100,000 245,877 .33
Temple-Inland Inc. 1,400,000 51,562 .07
Weyerhaeuser Co. 9,950,000 630,233 .84
2,864,267 3.81
Industrials -- 12.00%
3M Co. 4,550,000 $ 345,709 .46%
Avery Dennison Corp. 2,700,000 152,955 .20
Boeing Co. 10,700,000 691,648 .92
Caterpillar Inc. 2,450,000 128,845 .17
Deere & Co. 4,638,100 281,440 .38
Deluxe Corp. 2,200,000 73,326 .10
Dover Corp. 2,000,000 77,960 .10
Eaton Corp. 1,200,000 70,596 .09
Emerson Electric Co. 5,000,000 347,750 .46
Fluor Corp. 536,500 34,121 .05
General Dynamics Corp. 1,475,000 171,543 .23
General Electric Co. 60,950,000 2,066,814 2.75
Illinois Tool Works Inc. 3,350,000 283,946 .38
Ingersoll-Rand Co. Ltd., Class A 3,400,000 128,486 .17
Lockheed Martin Corp. 4,750,000 287,660 .38
Northrop Grumman Corp. 11,650,000 625,023 .83
Pitney Bowes Inc. 8,514,900 358,307 .48
R.R. Donnelley & Sons Co. 6,112,300 214,053 .29
Raytheon Co. 4,000,000 147,800 .20
Southwest Airlines Co. 7,500,000 120,075 .16
Tyco International Ltd. 22,975,000 606,310 .81
Union Pacific Corp. 1,400,000 96,852 .13
United Parcel Service, Inc., Class B 11,044,100 805,557 1.07
United Technologies Corp. 17,400,000 892,272 1.19
9,009,048 12.00
Consumer discretionary -- 8.87%
Best Buy Co., Inc. 10,425,000 461,410 .61
Carnival Corp., units 6,650,000 330,306 .44
Dana Corp. 6,130,000 46,036 .06
Federated Department Stores, Inc. 1,401,750 86,025 .11
Gannett Co., Inc. 1,500,000 93,990 .13
Gap, Inc. 5,710,545 98,678 .13
General Motors Corp. 24,138,400 661,392 .88
Genuine Parts Co. 8,545,000 379,142 .51
Harley-Davidson Motor Co. 6,650,000 329,374 .44
Home Depot, Inc. 4,000,000 164,160 .22
Johnson Controls, Inc. 2,600,000 176,930 .24
Knight-Ridder, Inc. 1,100,000 58,718 .08
Limited Brands, Inc. 19,930,000 398,799 .53
Lowe's Companies, Inc. 20,075,000 1,219,958 1.63
McDonald's Corp. 7,000,000 221,200 .29
Newell Rubbermaid Inc. 3,659,400 84,130 .11
NIKE, Inc., Class B 1,150,000 $ 96,658 .13%
ServiceMaster Co. 8,750,000 110,075 .15
Target Corp. 15,500,000 863,195 1.15
TJX Companies, Inc. 21,750,000 468,278 .62
VF Corp. 3,800,000 198,550 .26
Walt Disney Co. 4,500,000 109,665 .15
6,656,669 8.87
Consumer staples -- 9.00%
Albertson's, Inc. 10,000,000 251,100 .33
Avon Products, Inc. 16,400,000 442,636 .59
Coca-Cola Co. 17,500,000 748,650 1.00
ConAgra Foods, Inc. 8,269,600 192,434 .26
General Mills, Inc. 8,040,000 388,010 .52
H.J. Heinz Co. 16,717,000 593,453 .79
Kellogg Co. 7,200,000 318,024 .42
Kimberly-Clark Corp. 10,250,000 582,610 .78
PepsiCo, Inc. 12,225,000 722,253 .96
Procter & Gamble Co. 3,540,000 198,205 .26
Sara Lee Corp. 24,300,000 433,755 .58
Unilever NV (New York registered) 2,800,000 196,868 .26
Walgreen Co. 15,550,000 706,436 .94
Wal-Mart Stores, Inc. 20,750,000 981,683 1.31
6,756,117 9.00
Health care -- 10.42%
Abbott Laboratories 27,050,000 1,164,502 1.55
Aetna Inc. 1,150,000 101,844 .14
Amgen Inc./1/ 2,750,000 208,340 .28
Applera Corp. 5,593,000 135,742 .18
Becton, Dickinson and Co. 1,650,000 83,738 .11
Bristol-Myers Squibb Co. 64,935,000 1,374,674 1.83
Cardinal Health, Inc. 11,325,000 707,926 .94
CIGNA Corp. 1,000,000 115,870 .15
Eli Lilly and Co. 21,045,000 1,047,831 1.40
Guidant Corp. 1,646,900 103,755 .14
Johnson & Johnson 4,900,000 306,838 .41
McKesson Corp. 2,500,000 113,575 .15
Medtronic, Inc. 5,500,000 311,630 .42
Merck & Co., Inc. 21,000,000 592,620 .79
Pfizer Inc 27,575,000 599,480 .80
Schering-Plough Corp. 13,418,600 272,934 .36
Wyeth 13,000,000 579,280 .77
7,820,579 10.42
Financials -- 21.98%
AFLAC Inc. 2,000,000 $ 95,560 .13%
Allstate Corp. 7,068,300 373,136 .50
American Express Co. 3,450,000 171,707 .23
American International Group, Inc. 14,800,000 959,040 1.28
Aon Corp. 3,150,000 106,627 .14
Bank of America Corp. 33,740,000 1,475,788 1.97
Bank of New York Co., Inc. 29,650,000 927,749 1.24
Citigroup Inc. 38,021,000 1,740,601 2.32
Fannie Mae 25,145,000 1,194,890 1.59
Freddie Mac 11,440,000 701,844 .93
Hartford Financial Services Group, Inc. 3,275,000 261,181 .35
HSBC Holdings PLC (ADR) 10,272,000 809,023 1.08
J.P. Morgan Chase & Co. 58,986,560 2,160,088 2.88
Jefferson-Pilot Corp. 4,243,900 232,905 .31
Lincoln National Corp. 6,950,000 351,739 .47
Marsh & McLennan Companies, Inc. 24,070,000 701,640 .93
National City Corp. 4,250,000 136,977 .18
SLM Corp. 2,100,000 116,613 .15
St. Paul Travelers Companies, Inc. 15,220,000 685,357 .91
SunTrust Banks, Inc. 3,500,000 253,680 .34
U.S. Bancorp 12,675,000 374,927 .50
Wachovia Corp. 6,000,000 303,120 .40
Washington Mutual, Inc. 27,850,000 1,102,860 1.47
Wells Fargo & Co. 20,440,000 1,230,488 1.64
XL Capital Ltd., Class A 520,000 33,311 .04
16,500,851 21.98
Information technology -- 7.17%
Applied Materials, Inc. 11,500,000 188,370 .25
Automatic Data Processing, Inc. 7,450,000 347,617 .46
Dell Inc./1/ 2,500,000 79,700 .11
Electronic Data Systems Corp. 3,000,000 69,930 .09
First Data Corp. 4,350,000 175,957 .23
Hewlett-Packard Co. 45,200,000 1,267,408 1.69
Intel Corp. 12,050,000 283,175 .38
International Business Machines Corp. 12,550,000 1,027,594 1.37
Linear Technology Corp. 5,400,000 179,334 .24
Microsoft Corp. 42,500,000 1,092,250 1.45
Oracle Corp./1/ 13,541,943 171,712 .23
Texas Instruments Inc. 12,835,300 366,448 .49
Xilinx, Inc. 5,500,000 131,725 .18
5,381,220 7.17
Telecommunication services -- 6.97%
AT&T Corp. 29,325,999 $ 580,068 .77%
BellSouth Corp. 60,169,000 1,565,597 2.08
SBC Communications Inc. 59,250,000 1,413,113 1.88
Sprint Nextel Corp. 33,750,000 786,713 1.05
Verizon Communications Inc. 28,270,000 890,788 1.19
5,236,279 6.97
Utilities -- 7.26%
Ameren Corp. 2,707,664 142,423 .19
American Electric Power Co., Inc. 9,500,000 360,620 .48
Cinergy Corp. 1,000,000 39,900 .05
Consolidated Edison, Inc. 3,600,000 163,800 .22
Dominion Resources, Inc. 10,210,000 776,777 1.04
DTE Energy Co. 2,500,000 108,000 .14
Duke Energy Corp. 13,440,000 355,891 .47
Exelon Corp. 13,575,000 706,307 .94
FirstEnergy Corp. 9,133,635 433,848 .58
FPL Group, Inc. 12,258,000 527,829 .70
NiSource Inc. 4,900,000 115,885 .16
Pinnacle West Capital Corp. 3,479,738 145,314 .19
PPL Corp. 4,600,000 144,164 .19
Progress Energy, Inc. 5,879,418 256,284 .34
Public Service Enterprise Group Inc. 9,300,000 584,877 .78
Puget Sound Energy, Inc. 2,800,000 60,032 .08
Southern Co. 13,000,000 454,870 .61
Xcel Energy Inc. 4,000,000 73,320 .10
5,450,141 7.26
Miscellaneous -- 0.37%
Other common stocks in initial period
of acquisition 274,741 .37
Total common stocks
(cost: $59,724,572,000) 73,372,248 97.74
Units or
principal
Convertible Securities -- 0.08% amount
Consumer discretionary -- 0.06%
General Motors Corp., Series B, 5.25%
convertible senior debentures 2032 $2,442,000 40,293 .06
Health care -- 0.02%
Baxter International Inc. 7.00%
convertable preferred 2006 300,000 $ 16,251 .02
Total convertible securities
(cost: $76,850,000) 56,544 .08
Principal amount
Short-term securities -- 1.91% (000)
Bank of America Corp. 3.72%-3.98%
due 11/15-12/7/2005 $ 95,000 94,739 .12
Bank of New York Co., Inc. 3.93%
due 11/30/2005 24,300 24,220 .03
CAFCO, LLC 3.65% due 11/8/2005/2/ 29,400 29,376 .04
Clipper Receivables Co., LLC 3.65%-3.83%
due 11/3-12/2/2005/2/ 67,000 66,882 .09
Coca-Cola Co. 3.58%-3.64% due 11/7/2005 58,275 58,234 .08
DuPont (E.I.) de Nemours & Co. 3.85%
due 12/2/2005 17,700 17,639 .02
Edison Asset Securitization LLC 3.74%
due 11/4/2005/2/ 21,000 20,991 .03
Federal Home Loan Bank 3.61%-3.72%
due 11/14-12/21/2005 82,200 81,967 .11
Gannett Co. 3.74%-3.86%
due 11/9-12/6/2005 /2/ 111,200 110,950 .15
Hershey Co. 3.74%-3.83%
due 11/14-11/16/2005 /2/ 41,800 41,731 .05
International Bank for Reconstruction and
Development 3.65% due 12/19/2005 50,000 49,742 .07
International Lease Finance Corp. 3.73%
due 11/18/2005 39,700 39,626 .05
Medtronic Inc. 3.73% due 11/1/2005 /2/ 12,700 12,699 .02
PepsiCo Inc. 3.71% due 11/4/2005 /2/ 11,200 11,195 .01
Pfizer Inc 3.71%
due 11/17-11/21/2005 /2/ 80,000 79,846 .11
Private Export Funding Corp. 3.65%_3.77%
due 11/9-12/5/2005 /2/ 86,680 86,550 .11
Procter & Gamble Co. 3.63%-4.05%
due 11/30-1/20/2006 /2/ 148,800 147,944 .20
SBC Communications Inc. 3.80%
due 11/16/2005 /2/ 28,800 28,751 .04
SunTrust Banks Inc. 3.78% due 12/2/2005 30,000 29,996 .04
Target Corp. 3.95% due 11/21/2005 25,000 24,942 .03
Tennessee Valley Authority 3.63%
due 12/15/2005 50,000 49,750 .07
Triple-A One Funding Corp. 3.89%-3.95%
due 11/22/2005 /2/ 82,400 82,203 .11
U.S. Treasury Bills 3.415%-3.44%
due 12/1/2005 $ 57,400 $ 57,245 .08%
United Parcel Service Inc. 3.72%
due 12/5/2005 42,900 42,742 .06
Variable Funding Capital Corp.
3.68%-3.77% due 11/4-11/8/2005 /2/ 60,000 59,973 .08
Wal-Mart Stores Inc. 3.71%
due 11/2/2005 /2/ 33,000 32,993 .04
Wells Fargo & Co. 3.93% due 12/2/2005 50,000 50,000 .07
Total short-term securities
(cost: $1,432,954,000) 1,432,926 1.91
Total investment securities
(cost: $61,234,376,000) 74,861,718 99.73
Other assets less liabilities 204,775 .27
Net assets $ 75,066,493 100.00%
"Miscellaneous" securities include holdings in their initial period of
acquisition that have not previously been publicly disclosed.
/1/ Security did not produce income during the last 12 months.
/2/ Restricted securities that can be resold only to institutional investors. In
practice, these securities are typically as liquid as unrestricted securities in
the portfolio. The total value of all restricted securities was $812,084,000,
which represented 1.08% of the net assets of the Fund.
ADR = American Depositary Receipts
See Notes to Financial Statements
Financial statements
Statement of assets and liabilities at October 31, 2005 unaudited
(dollars and shares in thousands, except per-share amounts)
Assets:
Investment securities at market (cost: $61,234,376) $74,861,718
Cash 520
Receivables for:
Sales of investments $170,726
Sales of Fund's shares 64,510
Dividends and interest 143,558 378,794
75,241,032
Liabilities:
Payables for:
Purchases of investments 18,265
Repurchases of Fund's shares 90,142
Management services 15,247
Services provided by affiliates 49,349
Deferred Directors' and Advisory Board compensation 1,285
Other fees and expenses 251 174,539
Net assets at October 31, 2005 $75,066,493
Net assets consist of:
Capital paid in on shares of capital stock $60,313,566
Undistributed net investment income 400,093
Undistributed net realized gain 725,492
Net unrealized appreciation 13,627,342
Net assets at October 31, 2005 $75,066,493
Total authorized capital stock --
4,000,000 shares, $.001 par value (2,472,583 total shares outstanding)
Shares Net asset value
Net assets outstanding per share /1/
Class A $61,281,843 2,016,846 $30.38
Class B 2,913,441 96,436 30.21
Class C 3,014,855 99,967 30.16
Class F 2,556,874 84,307 30.33
Class 529-A 707,643 23,309 30.36
Class 529-B 159,531 5,275 30.24
Class 529-C 252,140 8,340 30.23
Class 529-E 39,839 1,316 30.26
Class 529-F 23,966 790 30.33
Class R-1 39,095 1,293 30.23
Class R-2 707,227 23,454 30.15
Class R-3 1,711,311 56,578 30.25
Class R-4 932,882 30,779 30.31
Class R-5 725,846 23,893 30.38
/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 $32.24 and $32.21,
respectively.
See Notes to Financial Statements
Statement of operations for the six months ended October 31, 2005 unaudited
(dollars in thousands)
Investment income:
Income:
Dividends (net of non-U.S. withholding
tax of $680) $966,329
Interest 34,426 $1,000,755
Fees and expenses: /1/
Investment advisory services 74,720
Business management services 27,745
Distribution services 119,570
Transfer agent services 27,017
Administrative services 10,098
Reports to shareholders 1,458
Registration statement and prospectus 1,233
Postage, stationery and supplies 3,760
Directors' and Advisory Board compensation 472
Auditing and legal 264
Custodian 225
Other 43
Total fees and expenses before
reimbursements/waivers 266,605
Less reimbursement/waiver of fees and expenses:
Investment advisory services 7,472
Business management services 2,775
Administrative services 347
Total fees and expenses after
reimbursements/waivers 256,011
Net investment income 744,744
Net realized gain and change in unrealized
appreciation on investments:
Net realized gain on investments 415,133
Net change in unrealized appreciation on investments 872,375
Net realized gain and change in unrealized
appreciation on investments 1,287,508
Net increase in net assets resulting from operations $2,032,252
/1/ Additional information related to class-specific fees and expenses is
included in the Notes to Financial Statements.
See Notes to Financial Statements
Financial statements
Statements of changes in net assets
(dollars in thousands)
Six months Year ended
ended October 31, April 30,
2005* 2005
Operations:
Net investment income $ 744,744 $ 1,547,614
Net realized gain on investments 415,133 547,062
Net change in unrealized appreciation on
investments 872,375 2,329,367
Net increase in net assets resulting
from operations 2,032,252 4,424,043
Dividends and distributions paid to shareholders:
Dividends from net investment income (715,498) (1,378,347)
Distributions from net realized gain on
investments -- (559,578)
Total dividends and distributions paid
to shareholders (715,498) (1,937,925)
Capital share transactions (706,052) 5,169,240
Total increase in net assets 610,702 7,655,358
Net assets:
Beginning of period 74,455,791 66,800,433
End of period (including undistributed net
investment income: $400,093 and $370,847,
respectively) $75,066,493 $74,455,791
* Unaudited
See Notes to Financial Statements
Notes to financial statements unaudited
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(R) savings plan share classes and five retirement plan share
classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C,
529-E and 529-F) can be utilized to save for college education. The five
retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any
sales charges and do not carry any conversion rights. The Fund's share classes
are described below:
Initial
sales Contingent deferred sales
Share class charge charge upon redemption Conversion feature
Classes A & 529-A Up to None (except 1% for certain None
5.75% redemptions within one year
of purchase without an
initial sales charge)
Classes B and 529-B None Declines from 5% to 0% Classes B and 529-B
for redemptions within convert to classes
six years of purchase A and 529-A,
respectively, after
eight years
Class C None 1% for redemptions within Class C converts to
one year of purchase Class F after 10
years
Class 529-C None 1% for redemptions within None
one year 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
CollegeAmerica is a registered trademark of and sponsored by the Virginia
College Savings Plan.(SM)
Holders of all share classes have equal pro rata rights to assets, dividends and
liquidation proceeds. Each share class has identical voting rights, except for
the exclusive right to vote on matters affecting only its class. Share classes
have different fees and expenses ("class-specific fees and expenses"), primarily
due to different arrangements for distribution, administrative and shareholder
services. Differences in class-specific fees and expenses will result in
differences in net investment income and, therefore, the payment of different
per-share dividends by each class.
Significant accounting policies -- The financial statements have been prepared
to comply with accounting principles generally accepted in the United States of
America. These principles require management to make estimates and assumptions
that affect reported amounts and disclosures. Actual results could differ from
those estimates. The following is a summary of the significant accounting
policies followed by the Fund:
Security valuation -- Equity securities are valued at the official closing
price of, or the last reported sale price on, the exchange or market on
which such securities are traded, as of the close of business on the day
the securities are being valued or, lacking any sales, at the last
available bid price. Prices for each security are taken from the principal
exchange or market in which the security trades. Fixed-income securities,
including short-term securities purchased with more than 60 days left to
maturity, are valued at prices obtained from an independent pricing service
when such prices are available. However, where the investment adviser deems
it appropriate, such securities will be valued at the mean quoted bid and
asked prices (or bid prices, if asked prices are not available) or at
prices for securities of comparable maturity, quality and type. Securities
with both fixed-income and equity characteristics, or equity securities
traded principally among fixed-income dealers, are valued in the manner
described above for either equity or fixed-income securities, depending on
which method is deemed most appropriate by the investment adviser.
Short-term securities purchased within 60 days to maturity are valued at
amortized cost, which approximates market value. The value of short-term
securities originally purchased with maturities greater than 60 days is
determined based on an amortized value to par when they reach 60 days or
less remaining to maturity. The ability of the issuers of the debt
securities held by the Fund to meet their obligations may be affected by
economic developments in a specific industry, state or region. Securities
and other assets for which representative market quotations are not readily
available are fair valued as determined in good faith under procedures
adopted by authority of the Fund's Board of Directors. Various factors may
be reviewed in order to make a good faith determination of a security's
fair value. These factors include, but are not limited to, the type and
cost of the security; contractual or legal restrictions on resale of the
security; relevant financial or business developments of the issuer;
actively traded similar or related securities; conversion or exchange
rights on the security; related corporate actions; 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 certain
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 for financial reporting purposes. The
Fund may also designate a portion of the amount paid to redeeming shareholders
as a distribution for tax purposes. As of October 31, 2005, the cost of
investment securities for Federal income tax purposes was $61,268,430,000.
During the six months ended October 31, 2005, the Fund reclassified $42,000,000
from undistributed net realized gains to capital paid in on shares of capital
stock to align financial reporting with tax reporting.
As of October 31, 2005, the components of distributable earnings on a tax basis
were as follows (dollars in thousands):
Undistributed net investment income $ 401,974
Undistributed long-term capital gains 758,895
Gross unrealized appreciation on investment securities 16,258,231
Gross unrealized depreciation on investment securities (2,664,943)
Net unrealized appreciation on investment securities 13,593,288
During the six months ended October 31, 2005, the Fund realized, on a tax basis,
a net capital gain of $422,776,000.
The tax character of distributions paid to shareholders was as follows (dollars
in thousands):
6 months ended October 31, 2005 Year ended April 30, 2005
Distri- - Distri-
Distri- butions Distri- butions
butions from Total butions from Total
from long-term distri- from long-term distri-
ordinary capital butions ordinary capital butions
Share class income gains paid income gains paid
Class A $610,557 -- $610,557 $1,200,617 $465,497 $1,666,114
Class B 17,916 -- 17,916 34,980 21,983 56,963
Class C 17,593 -- 17,593 33,095 22,268 55,363
Class F 24,678 -- 24,678 44,042 18,476 62,518
Class 529-A 6,389 -- 6,389 10,025 4,223 14,248
Class 529-B 815 -- 815 1,410 1,056 2,466
Class 529-C 1,293 -- 1,293 2,093 1,539 3,632
Class 529-E 300 -- 300 470 238 708
Class 529-F 231 -- 231 306 137 443
Class R-1 208 -- 208 295 197 492
Class R-2 3,965 -- 3,965 6,084 4,018 10,102
Class R-3 15,434 -- 15,434 23,111 11,401 34,512
Class R-4 8,651 -- 8,651 10,400 4,362 14,762
Class R-5 7,468 -- 7,468 11,419 4,183 15,602
Total $715,498 -- $715,498 $1,378,347 $559,578 $1,937,925
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.
The agreement provides 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 0.030% on such assets in excess of $77 billion. WMC
is currently waiving 10% of business management services fees. During the six
months ended October 31, 2005, total business management services fees waived by
WMC were $2,775,000. As a result, the fee shown on the accompanying financial
statements of $27,745,000, which was equivalent to an annualized rate of 0.072%,
was reduced to $24,970,000, or 0.065% of average daily net assets. During the
six months ended October 31, 2005, WMC paid the Fund's investment adviser
$1,165,000 for performing various fund accounting services for the Fund and for
The American Funds Tax-Exempt Series I, another registered investment company
for which WMC serves as business manager. Johnston, Lemon & Co. Incorporated
(JLC), a wholly owned subsidiary of The Johnston-Lemon Group, Incorporated (JLG)
(parent company of WMC), earned $270,000 on its retail sales of shares and
distribution plans of the Fund. JLC 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 0.177% on such assets in excess
of $89 billion. CRMC is currently waiving 10% of investment advisory services
fees. During the six months ended October 31, 2005, total investment advisory
services fees waived by CRMC were $7,472,000. As a result, the fee shown on the
accompanying financial statements of $74,720,000, which was equivalent to an
annualized rate of 0.193%, was reduced to $67,248,000, or 0.174% 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
shareclasses, except Class R-5. Under the plans, the Board of Directors
approves certain categories of expenses that are used to finance activities
primarily intended to sell Fund shares and service existing accounts. The
plans provide for payments, based on an annualized percentage of average
daily net assets, ranging from 0.25% to 1.00% as noted on the following
page. In some cases, the Board of Directors has limited the amounts that
may be paid to less than the maximum allowed by the plans. All share
classes may use up to 0.25% of average daily net assets to pay service
fees, or to compensate AFD for paying service fees, to firms that have
entered into agreements with AFD for providing certain shareholder
services. The remaining amounts available to be paid under each plan are
paid to selling dealers to compensate them for their selling activities.
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. These classes reimburse AFD for amounts
billed within the prior 15 months but only to the extent that the overall annual
expense limit of 0.25% is not exceeded. As of October 31, 2005, there were no
unreimbursed expenses subject to reimbursement for classes A or 529-A.
Share class Currently approved limits Plan limits
Class A 0.25% 0.25%
Class 529-A 0.25 0.50
Classes B and 529-B 1.00 1.00
Classes C, 529-C and R-1 1.00 1.00
Class R-2 0.75 1.00
Classes 529-E and R-3 0.50 0.75
Classes F, 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 share classes other than classes A and B. Each relevant share class pays
CRMC annual fees of up to 0.15% (0.10% for Class R-5) based on its respective
average daily net assets. Each relevant share class also pays AFS additional
amounts for certain transfer agent services. CRMC and AFS may use these fees to
compensate third parties for performing these services. CRMC has agreed to pay
AFS on the Fund's behalf for a portion of the transfer agent services fees for
some of the retirement plan share classes. For the six months ended October 31,
2005, the total administrative services fees paid by CRMC were $2,000 and
$345,000 for classes R-1 and R-2, respectively. Administrative services fees are
presented gross of any payments made by CRMC. Each 529 share class is subject to
an additional annual administrative services fee of 0.10% of its respective
average daily net assets; this fee is payable to the Commonwealth of Virginia
for the maintenance of the CollegeAmerica plan. Although these amounts are
included with administrative services fees on the accompanying financial
statements, the Commonwealth of Virginia is not considered a related party.
Expenses under the agreements described on the previous page for the six months
ended October 31, 2005, were as follows (dollars in thousands):
Administrative services
CRMC Commonwealth
Tansfer admini- Transfer of Virginia
Distribution agent strative agent administrative
Share class services services services services services
Class A $ 74,803 $25,734 Not applicable Not applicable Not applicable
Class B 14,950 1,283 Not applicable Not applicable Not applicable
Class C 15,200 | $2,188 $ 325 Not applicable
Class F 3,275 | 1,431 179 Not applicable
Class 529-A 625 | 352 47 $345
Class 529-B 791 Included 81 31 79
Class 529-C 1,224 in 125 40 123
Class 529-E 97 admini- 20 3 20
Class 529-F 2 strative 12 1 12
Class R-1 188 services 27 12 Not applicable
Class R-2 2,582 | 514 1,266 Not applicable
Class R-3 4,696 | 1,390 423 Not applicable
Class R-4 1,137 | 688 17 Not applicable
Class R-5 Not applicable | 340 7 Not applicable
Total $119,570 $27,017 $7,168 $2,351 $579
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 of $472,000, shown on the accompanying financial statements,
includes $427,000 in current fees (either paid in cash or deferred) and a net
increase of $45,000 in the value of the deferred amounts.
Affiliated officers and Directors -- All officers of the Fund and all of its
Directors who are affiliated with WMC receive no compensation directly from the
Fund in such capacities.
4. Investment transactions
The Fund made purchases and sales of investment securities, excluding short-term
securities, of $4,712,538,000 and $4,940,733,000, respectively, during the six
months ended October 31, 2005.
5. Capital share transactions
Capital share transactions in the Fund were as follows (dollars and shares in
thousands):
Six months ended October 31, 2005
Reinvestments
of dividends Net (decrease)
Sales<F1> and distributions Repurchases<F1> increase
Share class Amount Shares Amount Shares Amount Shares Amount Shares
Class A $2,654,131 86,364 $572,016 18,334 $(4,219,454) (137,362) $(993,307) (32,664)
Class B 103,266 3,381 17,089 551 (160,558) (5,256) (40,203) (1,324)
Class C 221,809 7,273 16,529 533 (267,371) (8,771) (29,033) (965)
Class F 330,532 10,772 21,642 695 (343,608) (11,215) 8,566 252
Class 529-A 78,865 2,568 6,388 205 (20,777) (675) 64,476 2,098
Class 529-B 11,869 388 815 26 (3,714) (121) 8,970 293
Class 529-C 30,517 999 1,293 42 (9,192) (300) 22,618 741
Class 529-E 4,571 149 299 10 (891) (29) 3,979 130
Class 529-F 3,406 111 231 7 (1,034) (34) 2,603 84
Class R-1 9,585 315 207 6 (5,505) (181) 4,287 140
Class R-2 147,323 4,828 3,965 128 (76,370) (2,500) 74,918 2,456
Class R-3 328,155 10,731 15,408 496 (363,845) (12,009) (20,282) (782)
Class R-4 186,425 6,077 8,648 278 (105,056) (3,426) 90,017 2,929
Class R-5 152,305 4,982 7,251 232 (63,217) (2,064) 96,339 3,150
Total net
increase
(decrease) $4,262,759 138,938 $671,781 21,543 $(5,640,592) (183,943) $(706,052) (23,462)
Year ended April 30, 2005
Reinvestments
of dividends
Sales<F1> and distributions Repurchases<F1> Net increase
Share class Amount Shares Amount Shares Amount Shares Amount Shares
Class A $ 7,395,134 249,062 $1,569,990 52,168 $(6,916,372) (232,386) $2,048,752 68,844
Class B 451,234 15,339 54,564 1,818 (248,702) (8,408) 257,096 8,749
Class C 753,447 25,600 52,449 1,750 (367,965) (12,434) 437,931 14,916
Class F 915,300 30,894 55,610 1,850 (459,462) (15,406) 511,448 17,338
Class 529-A 202,543 6,808 14,247 473 (26,138) (877) 190,652 6,404
Class 529-B 35,804 1,212 2,466 82 (4,797) (161) 33,473 1,133
Class 529-C 71,331 2,409 3,631 120 (11,208) (378) 63,754 2,151
Class 529-E 11,939 402 708 24 (1,592) (54) 11,055 372
Class 529-F 9,916 334 442 15 (1,268) (42) 9,090 307
Class R-1 23,143 783 488 16 (6,379) (217) 17,252 582
Class R-2 325,408 11,018 10,099 337 (98,064) (3,317) 237,443 8,038
Class R-3 862,578 29,133 34,456 1,146 (241,511) (8,100) 655,523 22,179
Class R-4 564,507 18,978 14,724 489 (92,164) (3,088) 487,067 16,379
Class R-5 279,665 9,418 15,114 502 (86,075) (2,890) 208,704 7,030
Total net
increase
(decrease) $11,901,949 401,390 $1,828,988 60,790 $(8,561,697) (287,758) $5,169,240 174,422
<FN>
<F1> Includes exchanges between share classes of the Fund.
</FN>
Financial highlights<F1>
Income (loss) from Dividends and
investment operations<F2> distributions
Ratio
Ratio of ex-
of ex- penses
Net penses to aver- Ratio
gains to aver- age net of net
(losses) Divi- age net assets income
Net on secur Total dends Total Net assets after (loss)
Asset Net ities from (from Distri- divi- Net assets before reim- to
value invest- (both invest- net butions dends asset end of reim- burse- aver-
begin- ment realized ment invest- (from and value, Total period burse- ments/ age
ning of income and un- oper- ment capital distri- end of return (in ments/ waivers net
period (loss) realized) ations income) gains) butions period <F3> millions) waivers <F4> assets
Class A:
6 months ended
10/31/2005<F5> $29.85 $ .31 $ .52 $ .83 $(.30) $ -- $ (.30) $30.38 2.79% $61,282 .60%<F6> .58%<F6> 2.01%<F6>
Year ended
4/30/2005 28.79 .67 1.22 1.89 (.60) (.23) (.83) 29.85 6.55 61,185 .61 .60 2.24
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
Class B:
6 months ended
10/31/2005<F5> 29.69 .19 .51 .70 (.18) -- (.18) 30.21 2.35 2,913 1.37<F6> 1.34<F6> 1.25<F6>
Year ended
4/30/2005 28.64 .43 1.22 1.65 (.37) (.23) (.60) 29.69 5.75 2,902 1.38 1.37 1.47
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
Class C:
6 months ended
10/31/2005<F5> 29.64 .18 .51 .69 (.17) -- (.17) 30.16 2.33 3,015 1.43<F6> 1.40<F6> 1.19<F6>
Year ended
4/30/2005 28.59 .41 1.22 1.63 (.35) (.23) (.58) 29.64 5.69 2,991 1.46 1.45 1.39
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:
6 months ended
10/31/2005<F5> 29.80 .30 .52 .82 (.29) -- (.29) 30.33 2.73 2,557 .65<F6> .63<F6> 1.96<F6>
Year ended
4/30/2005 28.74 .64 1.22 1.86 (.57) (.23) (.80) 29.80 6.47 2,505 .69 .68 2.15
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:
6 months ended
10/31/2005<F5> 29.83 .30 .52 .82 (.29) -- (.29) 30.36 2.71 708 .68<F6> .65<F6> 1.93<F6>
Year ended
4/30/2005 28.76 .63 1.23 1.86 (.56) (.23) (.79) 29.83 6.47 633 .71 .70 2.12
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:
6 months ended
10/31/2005<F5> 29.72 .17 .51 .68 (.16) -- (.16) 30.24 2.27 159 1.52<F6> 1.50<F6> 1.09<F6>
Year ended
4/30/2005 28.68 .38 1.21 1.59 (.32) (.23) (.55) 29.72 5.52 148 1.58 1.57 1.26
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:
6 months ended
10/31/2005<F5> 29.71 .17 .51 .68 (.16) -- (.16) 30.23 2.28 252 1.51<F6> 1.49<F6> 1.10<F6>
Year ended
4/30/2005 28.67 .37 1.22 1.59 (.32) (.23) (.55) 29.71 5.54 226 1.57 1.56 1.27
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:
6 months ended
10/31/2005<F5> $29.74 $.25 $ .51 $ .76 $(.24)$ -- $(.24) $30.26 2.53% 40 1.00%<F6> .97%<F6> 1.61%<F6>
Year ended
4/30/2005 28.69 .53 1.22 1.75 (.47) (.23) (.70) 29.74 6.09 35 1.05 1.04 1.79
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:
6 months ended
10/31/2005<F5> 29.79 .33 .52 .85 (.31) -- (.31) 30.33 2.82 24 .51<F6> .49<F6> 2.10<F6>
Year ended
4/30/2005 28.74 .60 1.22 1.82 (.54) (.23) (.77) 29.79 6.35 21 .80 .79 2.03
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 .82<F6> .82<F6> 2.25<F6>
Class R-1:
6 months ended
10/31/2005<F5> 29.71 .17 .52 .69 (.17) -- (.17) 30.23 2.31 39 1.48<F6> 1.45<F6> 1.13<F6>
Year ended
4/30/2005 28.68 .40 1.21 1.61 (.35) (.23) (.58) 29.71 5.62 34 1.50 1.47 1.35
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 1.71<F6> 1.51<F6> 1.50<F6>
Class R-2:
6 months ended
10/31/2005<F5> 29.64 .18 .51 .69 (.18) -- (.18) 30.15 2.30 707 1.54<F6> 1.42<F6> 1.16<F6>
Year ended
4/30/2005 28.60 .41 1.22 1.63 (.36) (.23) (.59) 29.64 5.68 622 1.57 1.44 1.38
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 1.78<F6> 1.47<F6> 1.58<F6>
Class R-3:
6 months ended
10/31/2005<F5> 29.73 .25 .52 .77 (.25) -- (.25) 30.25 2.58 1,711 .97<F6> .95<F6> 1.64<F6>
Year ended
4/30/2005 28.68 .56 1.21 1.77 (.49) (.23) (.72) 29.73 6.17 1,705 .95 .94 1.89
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 1.11<F6> 1.09<F6> 1.95<F6>
Class R-4:
6 months ended
10/31/2005<F5> 29.78 .30 .52 .82 (.29) -- (.29) 30.31 2.73 933 .68<F6> .65<F6> 1.93<F6>
Year ended
4/30/2005 28.73 .64 1.22 1.86 (.58) (.23) (.81) 29.78 6.46 830 .68 .67 2.14
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 .74<F6> .73<F6> 2.32<F6>
Class R-5:
6 months ended
10/31/2005<F5> 29.85 .35 .52 .87 (.34) -- (.34) 30.38 2.88 726 .38<F6> .35<F6> 2.23<F6>
Year ended
4/30/2005 28.79 .73 1.22 1.95 (.66) (.23) (.89) 29.85 6.78 619 .38 .37 2.45
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 .41<F6> .41<F6> 2.51<F6>
Six months Year ended April 30
ended October 31,
2005<F5> 2005 2004 2003 2002 2001
Portfolio turnover rate
for all classes of shares 6% 16% 12% 21% 22% 25%
<FN>
<F1> Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
<F2> Based on average shares outstanding.
<F3> Total returns exclude all sales charges, including contingent deferred
sales charges.
<F4> The ratios in this column reflect the impact, if any, of certain
reimbursements/waivers from CRMC and WMC. During some of the periods shown,
CRMC and WMC reduced fees for investment advisory services and business
management services for all share classes. In addition, during the start-up
period for the retirement plan share classes (except Class R-5), CRMC agreed to
pay a portion of the fees related to transfer agent services.
<F5> Unaudited.
<F6> Annualized.
</FN>
See Notes to Financial Statements
Expense example unaudited
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs such as initial sales charges on purchase payments and contingent deferred
sales charges on redemptions (loads); and (2) ongoing costs, including
management fees; distribution and service (12b-1) fees; and other expenses. This
example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund so you can compare these costs with the ongoing costs of
investing in other mutual funds. The example is based on an investment of $1,000
invested at the beginning of the period and held for the entire period (May 1,
2005 through October 31, 2005).
Actual expenses:
The first line of each share class in the table on the next page provides
information about actual account values and actual expenses. You may use the
information in this line, together with the amount you invested, to estimate the
expenses that you paid over the period. Simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number in the first line under the heading entitled
"Expenses paid during period" to estimate the expenses you paid on your account
during this period. There are some account fees that are charged to certain
types of accounts, such as Individual Retirement Accounts and CollegeAmerica
accounts (generally, a $10 fee is charged to set up the account and an
additional $10 fee is charged to the account annually) that would increase the
amount of expenses paid on your account. In addition, retirement plan
participants may be subject to certain fees charged by the plan sponsor, and
Class F and Class 529-F shareholders may be subject to fees charged by financial
intermediaries, typically ranging from 0.75% to 1.50% of assets annually
depending on services offered. You can estimate the impact of these fees by
adding the amount of the fees to the total estimated expenses you paid on your
account during the period as calculated above. In addition, your ending account
value would also be lower by the amount of these fees.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the next page provides
information about hypothetical account values and hypothetical expenses based on
the actual expense ratio for the share class and an assumed rate of return of
5.00% per year before expenses, which is not the actual return of the share
class. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5.00% hypothetical example with the 5.00%
hypothetical examples that appear in the shareholder reports of the other funds.
There are some account fees that are charged to certain types of accounts, such
as Individual Retirement Accounts and CollegeAmerica accounts (generally, a $10
fee is charged to set up the account and an additional $10 fee is charged to the
account annually) that would increase the amount of expenses paid on your
account. In addition, retirement plan participants may be subject to certain
fees charged by the plan sponsor, and Class F and Class 529-F shareholders may
be subject to fees charged by financial intermediaries, typically ranging from
0.75% to 1.50% of assets annually depending on services offered. You can
estimate the impact of these fees by adding the amount of the fees to the total
estimated expenses you paid on your account during the period as calculated on
the previous page. In addition, your ending account value would also be lower by
the amount of these fees.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of each share class in the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Ending Expenses Annual-
account account paid ized
value value during expense
5/1/2005 10/31/2005 period /1/ ratio
Class A -- actual return $1,000.00 $1,027.91 $2.96 .58%
Class A -- assumed 5% return 1,000.00 1,022.28 2.96 .58
Class B -- actual return 1,000.00 1,023.55 6.83 1.34
Class B -- assumed 5% return 1,000.00 1,018.45 6.82 1.34
Class C -- actual return 1,000.00 1,023.27 7.14 1.40
Class C -- assumed 5% return 1,000.00 1,018.15 7.12 1.40
Class F --actual return 1,000.00 1,027.34 3.22 .63
Class F -- assumed 5% return 1,000.00 1,022.03 3.21 .63
Class 529-A -- actual return 1,000.00 1,027.14 3.32 .65
Class 529-A -- assumed 5% return 1,000.00 1,021.93 3.31 .65
Class 529-B -- actual return 1,000.00 1,022.69 7.65 1.50
Class 529-B -- assumed 5% return 1,000.00 1,017.64 7.63 1.50
Class 529-C -- actual return 1,000.00 1,022.80 7.60 1.49
Class 529-C -- assumed 5% return 1,000.00 1,017.69 7.58 1.49
Class 529-E -- actual return 1,000.00 1,025.33 4.95 .97
Class 529-E -- assumed 5% return 1,000.00 1,020.32 4.94 .97
Class 529-F -- actual return 1,000.00 1,028.16 2.50 .49
Class 529-F -- assumed 5% return 1,000.00 1,022.74 2.50 .49
Class R-1 -- actual return 1,000.00 1,023.10 7.39 1.45
Class R-1 -- assumed 5% return 1,000.00 1,017.90 7.38 1.45
Class R-2 -- actual return 1,000.00 1,023.02 7.24 1.42
Class R-2 -- assumed 5% return 1,000.00 1,018.05 7.22 1.42
Class R-3 -- actual return 1,000.00 1,025.78 4.85 .95
Class R-3 -- assumed 5% return 1,000.00 1,020.42 4.84 .95
Class R-4 -- actual return 1,000.00 1,027.33 3.32 .65
Class R-4 -- assumed 5% return 1,000.00 1,021.93 3.31 .65
Class R-5 -- actual return 1,000.00 1,028.76 1.79 .35
Class R-5 -- assumed 5% return 1,000.00 1,023.44 1.79 .35
/1/ Expenses are equal to the annualized expense ratio, multiplied by the
average account value over the period, multiplied by the number of days in the
period (184), and divided by 365 (to reflect the one-half-year period).
Approval of renewal of Investment Advisory Agreement
On June 16, 2005, the Fund's Board of Directors (the "Board"), including the
Independent Directors, approved the renewal of the Fund's Investment Advisory
Agreement (the "Agreement") with Capital Research and Management Company
("CRMC") for an additional one-year term through August 31, 2006. The Board
approved renewal of the Agreement following the recommendation of the Fund's
Governance Committee (the "Committee"), which is comprised of all of the Fund's
Independent Directors. The information, material factors and conclusions that
formed the basis for the Committee's recommendation and the Board's subsequent
approval are described below.
1. Information received
Materials reviewed -- During the course of each year, the Independent Directors
receive a wide variety of materials relating to the services provided by CRMC,
including reports on the investment results of the Fund; portfolio composition;
portfolio trading practices; shareholder services; and other information
relating to the nature, extent and quality of services provided by CRMC to the
Fund. In addition, supplementary information requested and reviewed by the
Committee included extensive materials regarding the Fund's investment results,
advisory fee and expense comparisons (including comparisons to advisory fees
charged by an affiliate of CRMC to institutional clients), financial and
profitability information regarding CRMC, descriptions of various functions such
as compliance monitoring and portfolio trading practices, and information about
the personnel providing investment management and other services to the Fund.
Review process -- The Committee received assistance and advice regarding legal
and industry standards from independent counsel to the Fund and its Directors.
The Directors also reviewed independent reports providing analysis and
comparative data related to the Fund's fees and operations. The Committee
discussed the renewal of the Agreement with a senior representative of CRMC, as
well as Fund officers, and in a private session with independent legal counsel.
In deciding to recommend the renewal of the Agreement, the Committee did not
identify any single or particular piece of information that, in isolation, was a
controlling factor. This summary describes the more important, but not all, of
the factors considered by the Board and the Committee.
2. Nature, extent and quality of services
CRMC, its personnel and its resources -- The Board and the Committee considered
the depth and quality of CRMC's investment management process, including its
research capabilities; the experience, capability and integrity of its senior
management and other personnel; the low turnover rates of its key personnel; the
overall financial strength and stability of its organization; and the ability of
its organizational structure to address the recent growth in complex-wide assets
under management. The Board and the Committee also considered that CRMC made
available to its investment professionals a variety of resources and systems
relating to investment management, compliance, trading, results and portfolio
accounting. They recognized CRMC's commitment to investing in information
technology supporting investment management and compliance. They recognized
CRMC's continuing need to attract and retain qualified personnel and to maintain
and enhance its resources and systems.
Other services -- The Board and the Committee considered CRMC's (or its
affiliates') policies, procedures and systems to ensure compliance with
applicable laws and regulations and its commitment to these programs; its
efforts to keep the Directors informed; and its attention to matters that may
involve conflicts of interest with the Fund. The Board and the Committee also
considered the nature, extent, quality and cost of distribution and shareholder
services provided by CRMC to the Fund under various agreements with the Fund.
Ultimately, the Board and the Committee concluded that the nature, extent and
quality of the services provided by CRMC have benefited and will continue to
benefit the Fund and its shareholders.
3. Investment results
The Board and the Committee examined both the short-term and long-term
investment results of the Fund in light of its primary objective of providing
income and growth of principal through investments in quality common stocks. In
particular, the Board and the Committee considered analytical data developed by
Lipper that compared the performance of the Fund relative to the Lipper
Large-Cap Value Funds Index, the Lipper Growth & Income Funds Index and the
Standard & Poor's 500 Composite Index. It was noted that although the Fund
underperformed the comparisons in certain one-year periods, its return was
superior over the 10-year period. The Board and the Committee ultimately
concluded that CRMC's record in managing the Fund indicates that its continued
advisory services will benefit the Fund and its shareholders.
4. Advisory fees and total expenses
The Board and the Committee reviewed the advisory fees and total expenses of the
Fund (as a percentage of average net assets) and compared such amounts with the
average fee and expense levels of other similar mutual funds. In particular, the
Board and the Committee reviewed data that compared the median advisory fees of
other large-cap value funds, with the advisory fees of the Fund, noting that the
Fund's advisory fees were lower. The Board and Committee also reviewed data
comparing expense information on the largest 25 actively-managed funds,
regardless of investment classification or objective, and noted that the Fund
ranked 9 out of 25 for lowest total expenses and 6 out of 25 when excluding Rule
12b-1 service fees. They also noted the voluntary fee waiver that CRMC put into
effect complex-wide during the past year. Based on the information presented by
CRMC, members of the Board and the Committee then determined, in their business
judgment, that the relatively low level of the fees charged by CRMC will benefit
the Fund and its shareholders.
5. Adviser costs, level of profits and economies of scale
The Board and the Committee reviewed information regarding CRMC's costs of
providing services to the American Funds as a whole, as well as the resulting
level of profits to CRMC, noting that those results were comparable to the
reported results of several large publicly held investment management companies.
The Committee noted that it had also received information during the past year
regarding the structure and manner in which CRMC's investment professionals were
compensated and CRMC's view of the relationship of such compensation to the
attraction and retention of quality personnel. The Board and the Committee
considered CRMC's willingness to invest in technology, infrastructure and staff
to reinforce and offer new services to accommodate changing regulatory
requirements. They further considered the Fund's advisory fee structure in
relation to the Fund's total assets. The fee structure includes a series of
breakpoints with an additional breakpoint incorporated into the fee structure at
a total Fund asset level of $89 billion. The Board and the Committee concluded
that the Fund's cost structure was reasonable and that CRMC was sharing
economies of scale with the Fund and its shareholders.
6. Ancillary benefits
The Board and the Committee considered a variety of other benefits received by
CRMC and its affiliates as a result of CRMC's relationship with the Fund and
other American Funds, including fees for administrative services provided to
certain share classes; fees paid to CRMC's affiliated transfer agent; sales
charges and distribution fees received and retained by the Fund's principal
underwriter, an affiliate of CRMC; and possible ancillary benefits to CRMC's
institutional management affiliate. The Board and the Committee reviewed CRMC's
portfolio trading practices, noting that, while CRMC receives the benefit of
research provided by broker-dealers executing portfolio transactions on behalf
of the American Funds, it does not obtain third-party research or other services
in return for allocating brokerage to such broker-dealers.
7. Conclusions
Based on their review, including their consideration of each of the factors
referred to above, the Board and the Committee concluded that the nature, extent
and quality of the services rendered to the Fund by CRMC continued to be
excellent and favored renewal of the Agreement. The Board and the Committee
concluded that the Agreement continued to be fair and reasonable to the Fund and
its shareholders, that the Fund's shareholders received reasonable value in
return for the advisory fees and other amounts paid to CRMC by the Fund, and
that the renewal of the Agreement was in the best interests of the Fund and its
shareholders.
Other share class results unaudited
Class B, Class C, Class F and Class 529
Figures shown are past results and are not predictive of results in future
periods. Current and future results may be lower or higher than those shown.
Share prices and returns will vary, so investors may lose money. For the most
current information and month-end results, visit americanfunds.com.
Average annual total returns for periods ended September 30, 2005 (the most
recent calendar quarter):
Life of
1 year 5 years class
Class B shares -- first sold 3/15/00
Reflecting applicable contingent deferred sales
charge (CDSC), maximum of 5%, payable only
if shares are sold within six years of purchase +2.61% +4.20% +5.99%
Not reflecting CDSC +7.61% +4.54% +6.12%
Class C shares -- first sold 3/15/01
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase +6.54% -- +3.94%
Not reflecting CDSC +7.54% -- +3.94%
Class F shares /1/ -- first sold 3/15/01
Not reflecting annual asset-based fee charged by
sponsoring firm +8.35% -- +4.75%
Class 529-A shares /2/ -- first sold 2/15/02
Reflecting 5.75% maximum sales charge +2.08% -- +3.93%
Not reflecting maximum sales charge +8.31% -- +5.64%
Class 529-B shares /2/ -- first sold 2/19/02
Reflecting applicable CDSC, maximum of 5%,
payable only if shares are sold within six
years of purchase +2.44% -- +4.50%
Not reflecting CDSC +7.44% -- +5.24%
Class 529-C shares /2/ -- first sold 2/15/02
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase +6.43% -- +4.74%
Not reflecting CDSC +7.43% -- +4.74%
Class 529-E shares /1/, /2/ -- first sold 3/1/02 +7.96% -- +4.41%
Class 529-F shares /1/, /2/ -- first sold 9/16/02
Not reflecting annual asset-based fee charged by
sponsoring firm +8.34% -- +11.56%
The Fund's investment adviser and business manager each waived 5% of their
management fees from September 1, 2004 through March 31, 2005, and increased
the waivers to 10% on April 1, 2005. Fund results shown reflect the waivers,
without which they would have been lower. Please see the Financial Highlights
table on page 22 for details.
/1/ These shares are sold without any initial or contingent deferred sales
charge.
/2/ Results shown do not reflect the $10 initial account setup fee and an
annual $10 account maintenance fee.
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
Dechert LLP
1775 I Street, NW
Washington, DC 20006-2401
Independent registered public accounting firm
PricewaterhouseCoopers LLP
350 South Grand Avenue
Los Angeles, CA 90071-2889
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
There are several ways to invest in 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 and is eliminated for
purchases of $1 million or more. Other share classes, which are generally not
available for certain employer-sponsored retirement plans, have no up-front
sales charges but are subject to additional annual expenses and fees. Annualized
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 annualized expenses 0.82 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 annualized
expenses (by 0.05 percentage points) than did Class A shares, and an annual
asset-based fee charged by the sponsoring firm. Expenses are deducted from
income earned by the Fund. As a result, dividends and investment results will
differ for each share class.
Investors should carefully consider the investment objectives, risks, charges
and expenses of the American Funds and CollegeAmerica. This and other important
information is contained in the Fund's prospectus and the CollegeAmerica program
description, which can be obtained from your financial adviser and should be
read carefully before investing. You may also call American Funds Service
Company (AFS) at 800/421-0180 or visit the American Funds website at
americanfunds.com. If you reside in a state other than Virginia, there may be an
in-state plan that provides tax and other benefits not available through
CollegeAmerica. Talk to your tax adviser. CollegeAmerica is distributed by
American Funds Distributors and sold through unaffiliated intermediaries.
"American Funds Proxy Voting Guidelines" -- which describes how we vote proxies
relating to portfolio securities -- is available free of charge on the U.S.
Securities and Exchange Commission (SEC) website at www.sec.gov, on the American
Funds website or upon request by calling AFS. The Fund files its proxy voting
record with the SEC for the 12 months ended June 30 by August 31. The report
also is available on the SEC and American Funds websites.
Washington Mutual Investors Fund files a complete list of its portfolio holdings
with the SEC for the first and third quarters of each fiscal year on Form N-Q.
This filing is available free of charge on the SEC website. You may also review
or, for a fee, copy this filing at the SEC's Public Reference Room in
Washington, DC (800/SEC-0330). Additionally, the list of portfolio holdings also
is available by calling AFS.
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 December 31, 2005, this report must be accompanied by an
American Funds statistical update for the most recently completed calendar
quarter.
(logo American Funds(R))
(logo Virginia College Savings Plan(SM))
(logo Washington Mutual Investors Fund)
Washington Mutual Investors Fund, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
202/842-5665
Lit. No. MFGESR-901-1205P (S4913)
(recycle log)
Printed on recycled paper
The Capital Group Companies
American Funds
Capital Research and Management
Capital International
Capital Guardian
Capital Bank and Trust
ITEM 2 - Code of Ethics
Not applicable for filing of Semiannual Reports to Shareholders.
ITEM 3 - Audit Committee Financial Expert
Not applicable for filing of Semiannual Reports to Shareholders.
ITEM 4 - Principal Accountant Fees and Services
Not applicable for filing of Semiannual Reports to Shareholders.
ITEM 5 - Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed
issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 - Schedule of Investments
The full schedule of investments for the Fund is included as part of the report
to shareholders filed under Item 1 of this Form.
ITEM 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 8 - Portfolio Managers of Equity Securities by Closed End Management
Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 10 - Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors since the registrant
last submitted a proxy statement to its shareholders. The procedures are as
follows. The registrant has a 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 11 - Controls and Procedures
(a) The Registrant's Principal Executive Officer and Principal Financial
Officer have concluded, based on their evaluation of the Registrant's
disclosure controls and procedures (as such term is defined in Rule 30a-3
under the Investment Company Act of 1940), that such controls and
procedures are adequate and reasonably designed to achieve the purposes
described in paragraph (c) of such rule.
(b) There were no changes in the Registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of
1940) that occurred during the Registrant's 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 12 - Exhibits
(a) The Code of Ethics - not applicable for filing of Semiannual Reports to
Shareholders.
(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: December 28, 2005
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: December 28, 2005
By /s/ Michael W. Stockton, Vice President and Treasurer
Date: December 28, 2005