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: 811-5888
SMALLCAP World Fund, Inc.
(Exact Name of Registrant as specified in charter)
333 South Hope Street
Los Angeles, California 90071
(Address of principal executive offices)
Registrant's telephone number, including area code: (213) 486-9200
Date of fiscal year end: September 30, 2005
Date of reporting period: March 31, 2005
Chad L. Norton
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(name and address of agent for service)
Copies to:
Julie Allecta, Esq.
Paul, Hastings, Janofsky & Walker LLP
55 Second Street
Twenty-Fourth Floor
San Francisco, CA 94105
(Counsel for the Registrant)
ITEM 1 - Reports to Stockholders
[logo - American Funds(R)]
The right choice for the long term(R)
SMALLCAP WORLD FUND
[close-up photo of a globe]
Semi-annual report for the six months ended March 31, 2005
SMALLCAP World Fund(R) seeks long-term growth of capital through investments in
smaller companies in the United States and around the world.
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 ARE PAST RESULTS FOR CLASS A SHARES AND ARE NOT PREDICTIVE OF
RESULTS IN FUTURE PERIODS. CURRENT AND FUTURE RESULTS MAY BE LOWER OR HIGHER
THAN THOSE SHOWN. SHARE PRICES AND RETURNS WILL VARY, SO INVESTORS MAY LOSE
MONEY. INVESTING FOR SHORT PERIODS MAKES LOSSES MORE LIKELY. INVESTMENTS ARE NOT
FDIC-INSURED, NOR ARE THEY DEPOSITS OF OR GUARANTEED BY A BANK OR ANY OTHER
ENTITY. FOR THE MOST CURRENT INFORMATION AND MONTH-END RESULTS, VISIT
AMERICANFUNDS.COM. FUND RESULTS SHOWN, UNLESS OTHERWISE INDICATED, ARE AT NET
ASSET VALUE. IF A SALES CHARGE (MAXIMUM 5.75%) HAD BEEN DEDUCTED, THE RESULTS
WOULD HAVE BEEN LOWER.
Here are the average annual total returns on a $1,000 investment with all
distributions reinvested for periods ended March 31, 2005:
Class A shares 1 year 5 years 10 years
Reflecting 5.75% maximum sales charge +3.33% - 4.87% +9.02%
The fund's investment adviser is waiving a portion of its management fees.
Results shown reflect the waiver, without which they would have been lower.
Please see the Financial Highlights table on page 26 for details.
Results for other share classes can be found on page 4. Please see the inside
back cover for important information about other share classes.
RESULTS AT A GLANCE
For periods ended March 31, 2005 (with all distributions reinvested)
Total returns Average annual total returns
6 months 1 year 5 years 10 years Lifetime(1)
SMALLCAP World Fund +13.2% +9.6% -3.7% +9.7% +10.5%
S&P/Citigroup Global Smallcap Index +15.4 +14.7 +8.0 +9.5 +9.3
Global small-company mutual funds average +15.0 +13.4 +1.0 +10.6 +10.8
(1)Since April 30, 1990
All market indexes cited in this report are unmanaged and include reinvestment
of all distributions. The S&P/Citigroup Global Smallcap Index tracks more than
6,000 publicly traded stocks around the world with market capitalizations
between $100 million and $2 billion. From 1/1/00 to 4/30/04, the index only
included stocks in developed countries with market capitalizations between $100
million and $1.5 billion; prior to 1/1/00, the index included market
capitalizations between $100 million and $1.2 billion. The global small-company
mutual funds average is computed by Lipper.
Investing outside the United States is subject to additional risks, such as
currency fluctuations and political instability, which are detailed in the
fund's prospectus. Investing in small-capitalization stocks can involve greater
risk than is customarily associated with investing in stocks of larger, more
established companies.
[close-up photo of a globe]
FELLOW SHAREHOLDERS:
SMALLCAP World Fund recorded solid gains for the six-month period ended March
31, 2005, as equity markets around the world continued to strengthen and small
cap stocks generally outperformed the stocks of larger companies.
As detailed in the Results at a Glance table on the facing page, the fund rose
13.2%, which included the reinvestment of the 31-cents-a-share dividend that was
paid last December. SMALLCAP World Fund's return appears strong when compared
against indexes that track large cap stocks, such as Standard & Poor's 500
Composite Index (+6.9%) and the MSCI World Index (+10.9%). The fund also fared
well relative to U.S. small cap stocks, as measured by the Russell 2000 Index
(+8.0%). All the preceding indexes are unmanaged.
[Begin Sidebar]
Where are SMALLCAP's holdings located?
Percent of
As of March 31, 2005 net assets
[begin pie chart]
o United States 43.5%
o Asia & Pacific Basin 29.7
o Europe 13.4
o Other (including Canada
& Latin America) 5.7
o Cash & equivalents 7.7
[end pie chart]
As of Percent of
September 30, 2004 net assets
[begin pie chart]
o United States 47.7%
o Asia & Pacific Basin 27.4
o Europe 13.6
o Other (including Canada
& Latin America) 5.2
o Cash & equivalents 6.1
[end pie chart]
[End Sidebar]
But the fund's investment results did not exceed the 15.4% return of its main
benchmark, the S&P/Citigroup Global Smallcap Index. This unmanaged index tracks
more than 6,000 publicly traded stocks around the world with market
capitalizations between $100 million and $2 billion. The fund's results also
lagged the 15.0% return of the average global small-company mutual fund tracked
by Lipper.
GROWTH AROUND THE WORLD
SMALLCAP World Fund's objective is to seek long-term growth of capital through
investments in smaller companies in the United States and around the world. This
broad global mandate has been beneficial to shareholders as the stocks of
companies based outside the United States have outperformed their U.S.
counterparts for two years. This trend has been fueled by particularly strong
gains in developing countries, as well as by the relative strength of non-U.S.
currencies against the U.S. dollar.
Small companies in emerging markets, such as Asia, Eastern Europe and Latin
America, have benefited from the exceptionally strong economic growth in these
areas. The fund is well positioned to identify companies in these regions
through its focus on intensive fundamental research. In addition to a number of
industry investment analysts, the fund is supported by a dedicated network of 14
small company analysts who travel to companies in every corner of the globe from
their home bases in the United States, Europe and Asia. For example, numerous
research visits have formed the foundation of our long-held and continuing
optimism about the developing economies in Asia and the Pacific region.
Accordingly, the fund's largest country positions outside of the United States
are in Korea (8.4%), Japan (4.9%) and India (4.6%). Returns in these markets all
exceeded returns in the U.S. market during the period.
Although the fund's exposure to U.S. stocks (43.5%) is near a historic low, the
fund is overweighted in the United States relative to its global small cap
index. In this period of rising equity markets outside the United States, this
position had a dampening effect on the fund's total returns, as did the fund's
cash holdings (7.7%).
A LOOK INSIDE THE PORTFOLIO
The global economic recovery in developing markets continued to drive the
returns of industrial, energy, and metals and mining stocks, as exemplified by
Daelim Industrial (+23.3%), Quicksilver Resources (+49.2%) and First Quantum
Minerals (+40.5%). The fund's largest holding, Michaels Stores, also did well,
rising 22.6%.
The past six months were more difficult for stocks within the technology and
pharmaceutical sectors. Semiconductor and semiconductor equipment manufacturers,
such as Semtech (-6.8%), continued to hinder the fund's results. Also,
pharmaceutical and biotech stocks declined in an environment marked by several
high-profile drug withdrawals, a number of important patent expirations and a
relatively low pipeline of new medications. For example, Amylin Pharmaceuticals,
a developer of drug therapies for treating diabetes, declined 14.8%, and Valeant
Pharmaceuticals International declined 6.7%.
SOME WARNING SIGNS AHEAD
We are pleased that SMALLCAP World Fund has continued to benefit from the broad
rebound in global stocks that began in March 2003. Over the past two years, the
fund has recorded a cumulative return of 86.3%, assuming the reinvestment of all
dividends. While we hope that our global research effort continues to generate
such positive gains for the fund, our optimism is tempered by several economic
developments that dictate some caution. First, we are in a rising interest rate
environment, as evidenced by the eight consecutive increases in the federal
funds rate that have been imposed by the Federal Open Market Committee since
June 2004. Inflation is also on the rise, driven by rising energy and commodity
prices. These developments could have a dampening effect on global economic
growth. Although we remain optimistic about the long-term prospects for this
fund, we intend to keep these shorter term concerns in mind as we choose
investments for the portfolio.
We appreciate the trust you have placed in us to manage your money, and we will
continue to honor that trust by adhering to our long-term focus on thorough
research and attention to risk. We look forward to reporting to you again in
November.
Cordially,
/s/ Gordon Crawford /s/ Gregory W.Wendt
Gordon Crawford Gregory W. Wendt
Chairman of the Board President
May 12, 2005
For current information about the fund, visit americanfunds.com.
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 March 31, 2005 1 year 5 years Life of 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 +3.81% -4.79% -5.28%(1)
Not reflecting CDSC +8.81% -4.47% -5.12%(1)
Class C shares
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase +7.75% -- +6.93%(2)
Not reflecting CDSC +8.75% -- +6.93%(2)
Class F shares(3)
Not reflecting annual asset-based fee charged
by sponsoring firm +9.60% -- +7.79%(2)
Class 529-A shares
Reflecting 5.75% maximum sales charge +3.28% -- +10.67%(4)
Not reflecting maximum sales charge +9.57% -- +12.79%(4)
Class 529-B shares
Reflecting applicable CDSC, maximum of 5%,
payable only if shares are sold within
six years of purchase +3.61% -- +10.77%(5)
Not reflecting CDSC +8.61% -- +11.55%(5)
Class 529-C shares
Reflecting applicable CDSC, maximum of 1%,
payable only if shares are sold within
one year of purchase +7.60% -- +11.57%(5)
Not reflecting CDSC +8.60% -- +11.57%(5)
Class 529-E shares(3) +9.22% -- +10.18%(6)
Class 529-F shares(3)
Not reflecting annual asset-based fee charged
by sponsoring firm +9.47% -- +23.97%(7)
The fund's investment adviser is waiving a portion of its management fees.
Results shown reflect the waiver, without which they would have been lower.
Please see the Financial Highlights table on page 26 for details.
(1) From March 15, 2000, when Class B shares were first sold.
(2) From March 15, 2001, when Class C and Class F shares were first sold.
(3) These shares are sold without any initial or contingent deferred sales
charge.
(4) From February 19, 2002, when Class 529-A shares were first sold.
(5) From February 20, 2002, when Class 529-B and Class 529-C shares were first
sold.
(6) From March 15, 2002, when Class 529-E shares were first sold.
(7) From September 17, 2002, when Class 529-F shares were first sold.
SUMMARY INVESTMENT PORTFOLIO, March 31, 2005 unaudited
The following summary investment portfolio is designed to streamline the report
and help investors better focus on a fund's principal holdings. For details on
how to obtain a complete schedule of portfolio holdings, please see the inside
back cover.
[begin pie chart]
INDUSTRY SECTOR DIVERSIFICATION
Percent of
net assets
Consumer discretionary 20.3 %
Information technology 15.0
Industrials 13.9
Financials 9.2
Energy 8.8
Other industries 25.1
Cash & equivalents 7.7
[end pie chart]
Shares Market Percent
value of net
Common stocks - 92.22% (000) assets
Consumer discretionary - 20.28%
Michaels Stores, Inc. 5,300,000 $ 192,390 1.49%
Aristocrat Leisure Ltd. 13,195,000 103,860 .81
SBS Broadcasting SA (1) 1,860,000 83,068 .64
Lions Gate Entertainment Corp., USD denominated (1) 3,050,000 33,702
Lions Gate Entertainment Corp. (1) 2,728,500 30,239 .50
Reader's Digest Assn., Inc., Class A 3,650,000 63,181 .49
Schibsted ASA 2,370,000 62,248 .48
Orient-Express Hotels Ltd., Class A 2,326,000 60,709 .47
CarMax, Inc. (1) 1,800,000 56,700 .44
Big Lots, Inc. (1) 4,271,400 51,342 .40
Tupperware Corp. 2,500,000 50,900 .40
UnitedGlobalCom, Inc., Class A (1) 5,000,000 47,300 .37
Vail Resorts, Inc. (1) 1,700,000 42,925 .33
Other securities 1,732,176 13.46
2,610,740 20.28
Information technology - 14.99%
Kingboard Chemical Holdings Ltd. 42,846,000 128,002 1.00
Ask Jeeves, Inc. (1) 3,785,000 106,283 .83
Integrated Circuit Systems, Inc. (1) 4,745,000 90,724 .71
CNET Networks, Inc. (1) 9,300,000 87,792 .68
Semtech Corp. (1) 3,800,000 67,906 .53
Mentor Graphics Corp. (1) 4,870,000 66,719 .52
ACTIVISION, Inc. (1) 3,600,000 53,280 .41
Venture Corp. Ltd. 5,969,600 48,101 .37
Power Integrations, Inc. (1) 2,300,000 48,047 .37
GOME Electrical Appliances Holding Ltd. (1) 40,056,000 42,885 .33
NHN Corp. (1) 484,652 42,306 .33
Other securities 1,146,954 8.91
1,928,999 14.99
Industrials - 13.94%
Daelim Industrial Co., Ltd. 2,390,190 126,692 .98
United Stationers Inc. (1) 1,702,200 77,025 .60
Downer EDI Ltd. 18,701,412 75,336 .58
Vedior NV 2,973,550 52,881 .41
Hyundai Mipo Dockyard Co., Ltd. 867,350 48,708 .38
Container Corp. of India Ltd. 2,641,794 48,475 .38
Hyundai Development Co. 2,600,000 47,389 .37
Hughes Supply, Inc. 1,550,000 46,112 .36
Laureate Education, Inc. (1) 1,070,000 45,785 .36
SembCorp Logistics Ltd. 43,652,200 43,107 .33
Other securities 1,182,906 9.19
1,794,416 13.94
Financials - 9.18%
HDFC Bank Ltd. 9,859,340 123,151 .96
Pusan Bank 9,520,500 75,414 .59
Daegu Bank, Ltd. 8,587,500 63,370 .49
Converium Holding AG 6,500,000 61,131 .47
UTI Bank Ltd. 10,020,000 54,579 .42
ICICI Bank Ltd. 5,584,503 50,289 .39
Cathay General Bancorp, Inc. 1,330,000 41,895 .33
Other securities 711,286 5.53
1,181,115 9.18
Energy - 8.79%
Quicksilver Resources Inc. (1) 2,881,300 140,406 1.09
First Calgary Petroleums Ltd., GBP denominated (1) 4,800,000 71,970
First Calgary Petroleums Ltd. (1) 2,146,000 29,996 .79
OPTI Canada Inc. (1) 3,873,000 83,924 .65
Helmerich & Payne, Inc. 2,034,800 80,761 .63
Spinnaker Exploration Co. (1) 1,885,450 66,990 .52
Cabot Oil & Gas Corp., Class A 1,167,300 64,377 .50
Hydril Co. (1) 1,017,500 59,432 .46
Delta Petroleum Corp. (1) 3,267,500 47,509 .37
Other securities 486,108 3.78
1,131,473 8.79
Health care - 7.80%
Alfresa Holdings Corp. 1,707,000 70,554 .55
Advanced Medical Optics, Inc. (1) 1,825,000 66,083 .51
Medicis Pharmaceutical Corp., Class A 2,150,000 64,457 .50
Valeant Pharmaceuticals International 2,500,000 56,300 .44
Amylin Pharmaceuticals, Inc. (1) 2,556,000 44,704 .35
IDEXX Laboratories, Inc. (1) 820,000 44,411 .35
Other securities 656,880 5.10
1,003,389 7.80
Materials - 5.87%
Hanwha Chemical Corp. 6,492,000 85,707 .67
Dongkuk Steel Mill Co., Ltd. 3,355,000 63,464 .49
INI Steel Co. 2,645,000 42,476 .33
Other securities 564,145 4.38
755,792 5.87
Consumer staples - 4.33%
Nestle India Ltd. 3,344,250 48,922 .38
Other securities 508,372 3.95
557,294 4.33
Other - 2.15% 276,904 2.15
Miscellaneous - 4.89%
Other common stocks in initial period of acquisition 629,412 4.89
Total common stocks (cost: $9,382,292,000) 11,869,534 92.22
Market Percent
value of net
Rights & warrants - 0.07% (000) assets
Information technology - 0.02%
Kingboard Chemical Holdings Ltd., warrants, expire 2006 (1) 3,988,200 3,247 .02
Other - 0.05% 6,155 .05
Total rights & warrants (cost: $102,000) 9,402 .07
Market Percent
value of net
Convertible securities - 0.00% (000) assets
Total convertible securities (cost: $22,175,000) 368 .00
Market Percent
value of net
Bonds & notes - 0.04% (000) assets
Total bonds & notes (cost: $9,060,000) 5,558 .04
Market Percent
Principal amount value of net
Short-term securities - 7.28% (000) (000) assets
Sheffield Receivables Corp. 2.66%-2.69% due 4/4-4/11/2005 (2) $ 50,000 $ 49,972
Barclays U.S. Funding LLC 2.63%-2.83% due 4/15-5/16/2005 41,500 41,392 .71
Amsterdam Funding Corp. 2.64%-2.79% due 4/7-4/26/2005 (2) 71,400 71,301 .55
Freddie Mac 2.61%-2.70% due 4/27-5/2/2005 70,600 70,440 .55
American Honda Finance Corp. 2.65%-2.80% due 4/18-5/12/2005 68,100 67,939 .53
Mont Blanc Capital Corp. 2.78% due 4/18/2005 (2) 47,200 47,134
ING (U.S.) Funding LLC 2.77% due 5/4/2005 12,500 12,467 .46
DaimlerChrysler Revolving Auto Conduit LLC II 2.675%-2.735% due 4/11-4/22/2005 51,900 51,835 .40
Barton Capital LLC 2.65%-2.80% due 4/6-5/6/2005 (2) 51,800 51,700 .40
Siemens Capital Co. LLC 2.56%-2.58% due 4/5-4/7/2005 49,300 49,279 .38
BNP Paribas Finance Inc. 2.86% due 5/24/2005 48,400 48,192 .38
U.S. Treasury Bills 2.552% due 4/7/2005 42,000 41,979 .33
Other securities 333,338 2.59
Total short-term securities (cost: $936,967,000) 936,968 7.28
Total investment securities (cost: $10,350,596,000) 12,821,830 99.61
Other assets less liabilities 49,406 .39
Net assets $12,871,236 100.00%
"Miscellaneous" securities include holdings in their initial period of
acquisition that have not previously been publicly disclosed.
"Other securities" includes all issues that are not disclosed separately in the
summary investment portfolio.
INVESTMENT IN AFFILIATES
A company is considered to be an affiliate of the fund under the Investment
Company Act of 1940 if the fund's holdings in that company represent 5% or more
of the outstanding voting shares of that company. Some of the fund's affiliated
holdings listed below are also among the fund's largest holdings and are shown
in the preceding summary investment portfolio. The market value of the
affiliated companies which are not among the fund's largest holdings is included
in "Other securities" under their respective industry sectors. Further details
on these holdings and related transactions during the six months ended March 31,
2005, appear below.
Beginning
Company shares Purchases Sales
Quicksilver Resources Inc. (1) 1,992,300 923,800 34,800
Kingboard Chemical Holdings Ltd. 39,882,000 2,964,000 -
Kingboard Chemical Holdings Ltd., warrants, expire 2006 (1) 3,988,200 - -
Daelim Industrial Co., Ltd. 2,448,660 - 58,470
Ask Jeeves, Inc. (1) 3,700,000 85,000 -
Integrated Circuit Systems, Inc. (1) 4,110,000 635,000 -
CNET Networks, Inc. (1) 8,000,000 1,300,000 -
Hanwha Chemical Corp. - 6,492,000 -
OPTI Canada Inc. (1) 3,834,000 39,000 -
SBS Broadcasting SA (1) 1,855,000 5,000 -
United Stationers Inc. (1) - 1,702,200 -
Pusan Bank 9,520,500 - -
Downer EDI Ltd. 18,231,412 470,000 -
Semtech Corp. (1) 3,100,000 700,000 -
Spinnaker Exploration Co. (1) 2,200,000 - 314,550
Mentor Graphics Corp. (1) 4,530,000 340,000 -
Lions Gate Entertainment Corp., USD denominated (1) 3,050,000 - -
Lions Gate Entertainment Corp. (1) 2,728,500 - -
Daegu Bank, Ltd. 6,907,500 1,680,000 -
Power Integrations, Inc. (1) 2,000,000 300,000 -
Delta Petroleum Corp. (1) 545,000 2,722,500 -
SembCorp Logistics Ltd. 43,652,200 - -
Sohu.com Inc. (1) 2,350,000 - -
Manhattan Associates, Inc. (1) 1,300,000 650,000 -
Sterling Bancshares, Inc. 2,700,000 - -
Conexant Systems, Inc. (1) 19,926,000 4,074,000 -
Korea Kumho Petrochemical Co., Ltd. 1,292,160 481,990 -
LS Industrial Systems Co., Ltd. 1,950,000 - -
Expro International Group PLC 4,250,000 - -
Shipbuilding Co., Ltd. - 1,493,000 -
WD-40 Co. 1,020,900 - -
SIRVA, Inc. (1) 2,700,000 1,800,000 -
Restaurant Group PLC 12,629,000 - -
GSI Commerce, Inc. (1) 2,294,491 - -
Toho Pharmaceutical Co., Ltd. - 2,615,000 -
Hanil Cement Co., Ltd. 491,700 - -
O'Charley's Inc. (1) 1,350,000 - -
Centennial Bank Holdings, Inc. (1) (2) (3) - 2,700,000 -
Harvest Natural Resources, Inc. (1) 1,910,900 461,500 -
Fourlis (1) 2,960,700 349,300 -
O2Micro International Ltd. (1) 2,495,000 - -
Veeco Instruments Inc. (1) 1,700,000 - 101,477
Samsung Engineering Co., Ltd. - 2,587,640 -
Hudson Highland Group, Inc. (1) 410,000 834,000 -
LG Insurance Co., Ltd. 3,240,000 - -
Ichia Technologies, Inc. 14,789,617 - -
Spark Networks PLC (1) (2) (3) 1,103,000 - -
Spark Networks PLC (GDR) (1) 384,600 362,400 -
Tecan Group Ltd., Mannedorf 598,083 76,134 -
Capital Lease Funding, Inc. 1,630,000 - -
Leitch Technology Corp. (1) 2,240,000 282,000 -
Silicon Graphics, Inc. (1) 14,000,000 - -
Sanctuary Group PLC 21,490,000 - -
Kenmare Resources PLC (1) 28,200,000 2,638,000 -
Kenmare Resources PLC (1) (2) 2,500,000 - -
Kenmare Resources PLC, warrants, expire 2009 (1) 5,250,000 525,000 -
Kenmare Resources PLC, warrants, expire 2005 (1) (2) (3) 1,250,000 - -
Sharper Image Corp. (1) 950,000 - -
Interflex Co., Ltd. 799,000 - -
Kourakuen Corp. - 827,600 -
KEC Corp. 523,540 - -
Knot, Inc. (1) (2) 1,200,000 - -
Knot, Inc. (1) 140,800 - -
BKN International AG (1) 513,857 - -
BKN International AG (1) (2) 451,143 - -
Gladstone Commercial Corp. 493,000 - 97,338
Lumenis Ltd. (1) 2,270,000 - -
LTG Technologies PLC (1) 17,785,714 - -
Infoteria Corp. (1) (2) (3) 2,672 - -
ZOOTS (1) (2) (3) 12,586,913 - -
Anoto Group AB (1) (4) 7,156,244 - 2,607,000
Atheros Communications, Inc. (1) (4) 3,040,000 - 1,540,000
Baycorp Advantage Ltd. (4) 13,160,383 - 13,160,383
California Pizza Kitchen, Inc. (1) (4) 1,230,000 - 908,829
Charles Vogele Holding AG (4) 516,684 - 364,684
Chung Hwa Pulp Corp. (4) 38,898,300 - 12,658,000
Clear Media Ltd. (1) (4) 32,579,000 - 10,575,000
Converium Holding AG (4) 2,020,000 4,480,000 -
Converium Holding AG, rights, expire 2005 (4) - 2,020,000 2,020,000
Creo Inc., USD denominated (1) (4) 3,134,000 - 2,634,000
Creo Inc. (1) (4) 430,000 - 430,000
Energem Resources Inc. (1) (4) 4,055,000 360,000 -
Energem Resources Inc., warrants, expire 2005 (1) (3) (4) 2,027,500 - -
Energem Resources Inc., warrants, expire 2007 (1) (2) (3) (4) - 360,000 -
Eyetech Pharmaceuticals, Inc. (4) 2,624,000 75,000 2,699,000
Golden Meditech Co. Ltd. (4) 61,394,000 - -
Magnum Hunter Resources, Inc. (4) 4,600,000 - 4,600,000
Micronic Laser Systems AB (4) 2,403,002 - 2,403,002
School Specialty, Inc. (1) (4) 1,210,000 - 587,365
Valora Holding AG (4) 222,000 - 222,000
Wilson Greatbatch Technologies, Inc. (1) (4) 1,386,800 - 773,000
Market
value of
Ending Dividend affiliates
Company shares income at 3/31/05
(000) (000)
Quicksilver Resources Inc. (1) 2,881,300 - $140,406
Kingboard Chemical Holdings Ltd. 42,846,000 - 128,002
Kingboard Chemical Holdings Ltd., warrants, expire 2006 (1) 3,988,200 - 3,247
Daelim Industrial Co., Ltd. 2,390,190 $4,812 126,692
Ask Jeeves, Inc. (1) 3,785,000 - 106,283
Integrated Circuit Systems, Inc. (1) 4,745,000 - 90,724
CNET Networks, Inc. (1) 9,300,000 - 87,792
Hanwha Chemical Corp. 6,492,000 706 85,707
OPTI Canada Inc. (1) 3,873,000 - 83,924
SBS Broadcasting SA (1) 1,860,000 - 83,068
United Stationers Inc. (1) 1,702,200 - 77,025
Pusan Bank 9,520,500 2,289 75,414
Downer EDI Ltd. 18,701,412 816 75,336
Semtech Corp. (1) 3,800,000 - 67,906
Spinnaker Exploration Co. (1) 1,885,450 - 66,990
Mentor Graphics Corp. (1) 4,870,000 - 66,719
Lions Gate Entertainment Corp., USD denominated (1) 3,050,000 - 33,702
Lions Gate Entertainment Corp. (1) 2,728,500 - 30,239
Daegu Bank, Ltd. 8,587,500 1,873 63,370
Power Integrations, Inc. (1) 2,300,000 - 48,047
Delta Petroleum Corp. (1) 3,267,500 - 47,509
SembCorp Logistics Ltd. 43,652,200 22,979 43,107
Sohu.com Inc. (1) 2,350,000 - 41,313
Manhattan Associates, Inc. (1) 1,950,000 - 39,721
Sterling Bancshares, Inc. 2,700,000 297 38,340
Conexant Systems, Inc. (1) 24,000,000 - 36,000
Korea Kumho Petrochemical Co., Ltd. 1,774,150 604 35,133
LS Industrial Systems Co., Ltd. 1,950,000 782 34,869
Expro International Group PLC 4,250,000 312 34,557
Shipbuilding Co., Ltd. 1,493,000 - 34,346
WD-40 Co. 1,020,900 408 33,169
SIRVA, Inc. (1) 4,500,000 - 31,995
Restaurant Group PLC 12,629,000 - 31,470
GSI Commerce, Inc. (1) 2,294,491 - 31,044
Toho Pharmaceutical Co., Ltd. 2,615,000 229 30,083
Hanil Cement Co., Ltd. 491,700 592 29,357
O'Charley's Inc. (1) 1,350,000 - 29,349
Centennial Bank Holdings, Inc. (1) (2) (3) 2,700,000 - 28,350
Harvest Natural Resources, Inc. (1) 2,372,400 - 28,208
Fourlis (1) 3,310,000 - 27,030
O2Micro International Ltd. (1) 2,495,000 - 25,674
Veeco Instruments Inc. (1) 1,598,523 - 24,058
Samsung Engineering Co., Ltd. 2,587,640 489 21,389
Hudson Highland Group, Inc. (1) 1,244,000 - 21,260
LG Insurance Co., Ltd. 3,240,000 531 21,036
Ichia Technologies, Inc. 14,789,617 - 19,790
Spark Networks PLC (1) (2) (3) 1,103,000 - 10,423
Spark Networks PLC (GDR) (1) 747,000 - 7,843
Tecan Group Ltd., Mannedorf 674,217 - 18,093
Capital Lease Funding, Inc. 1,630,000 538 18,012
Leitch Technology Corp. (1) 2,522,000 - 16,916
Silicon Graphics, Inc. (1) 14,000,000 - 16,660
Sanctuary Group PLC 21,490,000 186 16,633
Kenmare Resources PLC (1) 30,838,000 - 14,117
Kenmare Resources PLC (1) (2) 2,500,000 - 1,144
Kenmare Resources PLC, warrants, expire 2009 (1) 5,775,000 - 1,079
Kenmare Resources PLC, warrants, expire 2005 (1) (2) (3) 1,250,000 - 166
Sharper Image Corp. (1) 950,000 - 15,779
Interflex Co., Ltd. 799,000 96 13,461
Kourakuen Corp. 827,600 174 11,150
KEC Corp. 523,540 210 10,187
Knot, Inc. (1) (2) 1,200,000 - 8,640
Knot, Inc. (1) 140,800 - 1,014
BKN International AG (1) 513,857 - 4,130
BKN International AG (1) (2) 451,143 - 3,626
Gladstone Commercial Corp. 395,662 136 6,505
Lumenis Ltd. (1) 2,270,000 - 5,403
LTG Technologies PLC (1) 17,785,714 - 4,264
Infoteria Corp. (1) (2) (3) 2,672 - 748
ZOOTS (1) (2) (3) 12,586,913 - 234
Anoto Group AB (1) (4) 4,549,244 - -
Atheros Communications, Inc. (1) (4) 1,500,000 - -
Baycorp Advantage Ltd. (4) - - -
California Pizza Kitchen, Inc. (1) (4) 321,171 - -
Charles Vogele Holding AG (4) 152,000 - -
Chung Hwa Pulp Corp. (4) 26,240,300 - -
Clear Media Ltd. (1) (4) 22,004,000 - -
Converium Holding AG (4) 6,500,000 - -
Converium Holding AG, rights, expire 2005 (4) - - -
Creo Inc., USD denominated (1) (4) 500,000 - -
Creo Inc. (1) (4) - - -
Energem Resources Inc. (1) (4) 4,415,000 - -
Energem Resources Inc., warrants, expire 2005 (1) (3) (4) 2,027,500 - -
Energem Resources Inc., warrants, expire 2007 (1) (2) (3) (4) 360,000 - -
Eyetech Pharmaceuticals, Inc. (4) - - -
Golden Meditech Co. Ltd. (4) 61,394,000 - -
Magnum Hunter Resources, Inc. (4) - - -
Micronic Laser Systems AB (4) - - -
School Specialty, Inc. (1) (4) 622,635 - -
Valora Holding AG (4) - - -
Wilson Greatbatch Technologies, Inc. (1) (4) 613,800 - -
$39,059 $2,564,977
(1) Security did not produce income during the last 12 months.
(2) Purchased in a private placement transaction; resale may be limited to
qualified institutional buyers; resale to the public may require
registration. The total value of all such restricted securities, including
those included in "Other securities" in the summary investment portfolio,
was $453,582,000, which represented 3.52% of the net assets of the fund.
(3) Valued under fair value procedures adopted by authority of the Board of
Directors.
(4) Unaffiliated issuer at 3/31/2005.
See Notes to Financial Statements
FINANCIAL STATEMENTS
Statement of assets and liabilities unaudited
at March 31, 2005 (dollars and shares in thousands,
except per-share amounts)
Assets:
Investment securities at market:
Unaffiliated issuers (cost: $8,145,964) $10,256,853
Affiliated issuers (cost: $2,204,632) 2,564,977 $12,821,830
Cash denominated in non-U.S. currencies
(cost: $5,827) 6,234
Cash 2,788
Receivables for:
Sales of investments 74,181
Sales of fund's shares 24,594
Dividends 30,978 129,753
12,960,605
Liabilities:
Payables for:
Purchases of investments 57,266
Repurchases of fund's shares 15,008
Investment advisory services 6,903
Services provided by affiliates 4,476
Deferred Directors' compensation 1,090
Other fees and expenses 4,626 89,369
Net assets at March 31, 2005 $12,871,236
Net assets consist of:
Capital paid in on shares of capital stock $11,110,259
Distributions in excess of net investment income (95,156)
Accumulated net realized loss (611,719)
Net unrealized appreciation 2,467,852
Net assets at March 31, 2005 $12,871,236
Total authorized capital stock - 800,000 shares, $0.01 par value
(414,115 total shares outstanding)
Net asset value
Net assets Shares outstanding per share (1)
Class A $11,176,960 358,704 $31.16
Class B 396,586 13,121 30.23
Class C 364,386 12,105 30.10
Class F 185,132 5,972 31.00
Class 529-A 137,575 4,425 31.09
Class 529-B 28,078 919 30.55
Class 529-C 59,766 1,956 30.56
Class 529-E 8,732 283 30.91
Class 529-F 9,917 320 31.04
Class R-1 8,193 267 30.66
Class R-2 193,699 6,315 30.67
Class R-3 136,347 4,415 30.88
Class R-4 45,146 1,452 31.09
Class R-5 120,719 3,861 31.26
(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 $33.06 and $32.99,
respectively.
See Notes to Financial Statements
STATEMENT OF OPERATIONS unaudited
for the six months ended March 31, 2005 (dollars in thousands)
Investment income:
Income:
Interest $9,500
Dividends (net of non-U.S. withholding
tax of $8,594; includes
$39,059 from affiliates) 96,928 $106,428
Fees and expenses:
Investment advisory services 40,056
Distribution services 18,152
Transfer agent services 7,554
Administrative services 1,612
Reports to shareholders 362
Registration statement and prospectus 282
Postage, stationery and supplies 993
Directors' compensation 306
Auditing and legal 48
Custodian 1,902
State and local taxes 255
Other 120
Total expenses before reimbursements/waivers 71,642
Reimbursement/waiver of expenses 2,259 69,383
Net investment income 37,045
Net realized gain and unrealized
appreciation on investments
and non-U.S. currency:
Net realized gain on:
Investments (including $24,759 net gain from affiliates) 480,489
Non-U.S. currency transactions 237 480,726
Net unrealized appreciation (depreciation) on:
Investments 940,141
Non-U.S. currency translations (126) 940,015
Net realized gain and
unrealized appreciation
on investments and non-U.S. currency 1,420,741
Net increase in net assets resulting
from operations $1,457,786
See Notes to Financial Statements
Statement of changes in net assets (dollars in thousands)
Six months Year ended
ended March 31, September 30,
2005* 2004
Operations:
Net investment income $37,045 $916
Net realized gain on investments and
non-U.S. currency transactions 480,726 1,342,453
Net unrealized appreciation
on investments and non-U.S. currency translations 940,015 358,032
Net increase in net assets
resulting from operations 1,457,786 1,701,401
Dividends paid to shareholders from
net investment income and currency gains (119,377) (10,989)
Capital share transactions 509,105 880,345
Total increase in net assets 1,847,514 2,570,757
Net assets:
Beginning of period 11,023,722 8,452,965
End of period (including
distributions in excess of
net investment income: $95,156 and $12,824, respectively) $12,871,236 $11,023,722
*Unaudited.
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS unaudited
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - SMALLCAP World Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940 as an open-end, diversified management investment
company. The fund seeks long-term growth of capital through investments in
smaller companies in the U.S. and around the world.
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) 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:
- ---------------------------------------------------------------------------------------------------------
Share class Initial sales charge Contingent deferred sales Conversion feature
charge upon redemption
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Classes A and 529-A Up to 5.75% None (except 1% for None
certain redemptions
within one year of
purchase without an
initial sales charge)
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Classes B and 529-B None Declines from 5% to zero Classes B and 529-B convert to
for redemptions within classes A and 529-A,
six years of purchase respectively, after eight years
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Class C None 1% for redemptions within Class C converts to Class F
one year of purchase 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, None None None
R-4 and R-5
- ---------------------------------------------------------------------------------------------------------
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.
CollegeAmerica is a registered trademark of the Virginia College Savings
Plan.(sm)
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 (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 purchased with greater than 60 days to
maturity with 60 days or less remaining to maturity is determined
based on the market value on the 61st day. 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. Forward currency contracts are valued at the mean of
representative quoted bid and asked prices. 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; and changes in overall market conditions. If events occur
that materially affect the value of securities (particularly non-U.S.
securities) between the close of trading in those securities and the
close of regular trading on the New York Stock Exchange, the
securities are fair valued.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security
transactions are recorded by the fund as of the date the trades are
executed with brokers. Realized gains and losses from security
transactions are determined based on the specific identified cost of
the securities. Dividend income is recognized on the ex-dividend date
and interest income is recognized on an accrual basis. Market
discounts, premiums and original issue discounts on fixed-income
securities are amortized daily over the expected life of the security.
CLASS ALLOCATIONS - Income, fees and expenses (other than
class-specific fees and expenses) and realized and unrealized gains
and losses are allocated daily among the various share classes based
on their relative net assets. Class-specific fees and expenses, such
as distribution, administrative and shareholder services, are charged
directly to the respective share class.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and
distributions paid to shareholders are recorded on the ex-dividend
date.
NON-U.S. CURRENCY TRANSLATION - Assets and liabilities, including
investment securities, denominated in non-U.S. currencies are
translated into U.S. dollars at the exchange rates in effect at the
end of the reporting period. Purchases and sales of investment
securities and income and expenses are translated into U.S. dollars at
the exchange rates on the dates of such transactions. In the
accompanying financial statements, the effects of changes in non-U.S.
exchange rates on investment securities are included with the net
realized gain or loss and net unrealized appreciation or depreciation
on investments. The realized gain or loss and net unrealized
appreciation or depreciation resulting from all other transactions
denominated in non-U.S. currencies are disclosed separately.
FORWARD CURRENCY CONTRACTS - The fund may enter into forward currency
contracts, which represent agreements to exchange non-U.S. currencies
on specific future dates at predetermined rates. The fund enters into
these contracts to manage its exposure to changes in non-U.S. exchange
rates arising from investments denominated in non-U.S. currencies.
Upon entering into these contracts, risks may arise from the potential
inability of counterparties to meet the terms of their contracts and
from possible movements in non-U.S. exchange rates. Due to these
risks, the fund could incur losses up to the entire contract amount,
which may exceed the net unrealized value shown in the accompanying
financial statements. On a daily basis, the fund values forward
currency contracts based on the applicable exchange rates and records
unrealized gains or losses. The fund records realized gains or losses
at the time the forward contract is closed or offset by another
contract with the same broker for the same settlement date and
currency.
2. NON-U.S. INVESTMENTS
INVESTMENT RISK - The risks of investing in securities of non-U.S. issuers may
include, but are not limited to, investment and repatriation restrictions;
revaluation of currencies; adverse political, social and economic developments;
government involvement in the private sector; limited and less reliable investor
information; lack of liquidity; certain local tax law considerations; and
limited regulation of the securities markets.
TAXATION - Dividend and interest income is recorded net of non-U.S. taxes paid.
Gains realized by the fund on the sale of securities in certain countries are
subject to non-U.S. taxes. The fund records a liability based on unrealized
gains to provide for potential non-U.S. taxes payable upon the sale of these
securities. For the six months ended March 31, 2005, there were no non-U.S.
taxes paid on realized gains. As of March 31, 2005, non-U.S. taxes provided on
unrealized gains were $4,208,000.
3. FEDERAL INCOME TAXATION AND DISTRIBUTIONS
The fund complies with the requirements under Subchapter M of the Internal
Revenue Code applicable to mutual funds and intends to distribute substantially
all of its net taxable income and net capital gains each year. The fund is not
subject to income taxes to the extent such distributions are made.
DISTRIBUTIONS - Distributions paid to shareholders are based on net investment
income and net realized gains determined on a tax basis, which may differ from
net investment income and net realized gains for financial reporting purposes.
These differences are due primarily to differing treatment for items such as
non-U.S. currency gains and losses; short-term capital gains and losses; capital
losses related to sales of certain securities within 30 days of purchase;
unrealized appreciation of certain investments in non-U.S. securities; deferred
expenses; cost of investments sold; net capital losses; and net operating
losses. 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. As of March 31, 2005, the cost of investment securities for federal
income tax purposes was $10,468,146,000.
As of March 31, 2005, the components of distributable earnings on a tax basis
were as follows (dollars in thousands):
Undistributed net investment income and currency gains $ 23,269
Accumulated short-term capital losses (1,023,277)
Undistributed long-term capital gains 411,758
Gross unrealized appreciation on investment securities 3,151,387
Gross unrealized depreciation on investment securities (797,703)
Net unrealized appreciation on investment securities 2,353,684
Accumulated short-term capital losses above include a capital loss carryforward
of $1,086,001,000 expiring in 2011. The capital loss carryforward will be used
to offset any capital gains realized by the fund in the current year or
subsequent years through the expiration date. The fund will not make
distributions from capital gains while a capital loss carryforward remains.
During the six months ended March 31, 2005, the fund realized, on a tax basis, a
net capital gain of $474,482,000.
Ordinary income distributions paid to shareholders from net investment income
and currency gains were as follows (dollars in thousands):
Share class Six months ended March 31, 2005 Year ended September 30, 2004
Class A $ 109,685 $ 10,144
Class B 1,283 -
Class C 1,395 -
Class F 1,691 202
Class 529-A 1,252 148
Class 529-B 73 -
Class 529-C 159 -
Class 529-E 57 2
Class 529-F 83 12
Class R-1 34 2
Class R-2 841 50
Class R-3 925 80
Class R-4 307 25
Class R-5 1,592 324
Total $ 119,377 $ 10,989
4. FEES AND TRANSACTIONS WITH RELATED PARTIES
Capital Research and Management Company ("CRMC"), the fund's investment adviser,
is the parent company of American Funds Service Company ("AFS"), the fund's
transfer agent, and American Funds Distributors, Inc. ("AFD"), the principal
underwriter of the fund's shares.
INVESTMENT ADVISORY SERVICES - The Investment Advisory and Service Agreement
with CRMC provides for monthly fees accrued daily. These fees are based on a
declining series of annual rates beginning with 0.800% on the first billion of
daily net assets and decreasing to 0.595% on such assets in excess of $27
billion. During the six months ended March 31, 2005, CRMC reduced investment
advisory services fees by $2,003,000. As a result, the fee shown on the
accompanying financial statements of $40,056,000, which was equivalent to an
annualized rate of 0.656%, was reduced to $38,053,000, or 0.623% of average
daily net assets.
CLASS-SPECIFIC FEES AND EXPENSES - Expenses that are specific to individual
share classes are accrued directly to the respective share class. The principal
class-specific fees and expenses are described below:
DISTRIBUTION SERVICES - The fund has adopted plans of distribution for
all share classes, except Class R-5. Under the plans, the Board of
Directors approves certain categories of expenses that are used to
finance activities primarily intended to sell fund shares. The plans
provide for annual expenses, based on a percentage of average daily
net assets, ranging from 0.30% to 1.00% as noted on the following
page. 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 shares sold.
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 0.30% is not exceeded. As of
March 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 0.30% 0.30%
------------------------------------------------ ----------------------------- -----------------------------
------------------------------------------------ ----------------------------- -----------------------------
Class 529-A 0.30 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 six months ended
March 31, 2005, CRMC agreed to pay a portion of these fees for classes
R-1, R-2, and R-3. For the six months ended March 31, 2005, the total
fees paid by CRMC were $2,000, $242,000, and $12,000 for classes R-1,
R-2, and R-3, 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 in 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 March 31, 2005, were as follows (dollars in
thousands):
--------------------------------------------------------------------------------------------------------------
Share class Distribution Transfer agent Administrative services
services services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
CRMC Transfer agent Commonwealth of
administrative services Virginia
services administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class A $12,989 $7,273 Not applicable Not applicable Not applicable
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class B 1,859 281 Not applicable Not applicable Not applicable
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class C 1,626 Included $244 $65 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class F 199 Included 119 28 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-A 91 Included 89 15 $60
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-B 127 Included 19 8 13
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-C 262 Included 39 15 26
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-E 19 Included 6 1 4
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class 529-F 11 Included 7 1 4
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-1 34 Included 5 4 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-2 610 Included 122 460 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-3 283 Included 85 87 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-4 42 Included 25 2 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Class R-5 Not applicable Included 58 1 Not applicable
in
administrative
services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Total $18,152 $7,554 $818 $687 $107
--------------------------------------------------------------------------------------------------------------
DEFERRED DIRECTORS' COMPENSATION - Since the adoption of the deferred
compensation plan in 1993, Directors who are unaffiliated with CRMC may elect to
defer the cash payment of part or all of their compensation. These deferred
amounts, which remain as liabilities of the fund, are treated as if invested in
shares of the fund or other American Funds. These amounts represent general,
unsecured liabilities of the fund and vary according to the total returns of the
selected funds. Directors' compensation of $306,000, shown on the accompanying
financial statements, includes $141,000 in current fees (either paid in cash or
deferred) and a net increase of $165,000 in the value of the deferred amounts.
AFFILIATED OFFICERS AND DIRECTORS - Officers and certain Directors of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated
officers or Directors received any compensation directly from the fund.
5. CAPITAL SHARE TRANSACTIONS
Capital share transactions in the fund were as follows (dollars and shares in
thousands):
Share class Sales(1) Reinvestments of dividends
Amount Shares Amount Shares
Six months ended March 31, 2005
Class A $ 915,851 30,132 $ 104,783 3,514
Class B 44,889 1,528 1,249 43
Class C 80,075 2,729 1,347 47
Class F 58,847 1,944 1,525 51
Class 529-A 29,784 980 1,252 42
Class 529-B 4,253 143 73 2
Class 529-C 11,966 401 159 6
Class 529-E 2,062 69 57 2
Class 529-F 2,005 66 82 3
Class R-1 2,548 85 34 1
Class R-2 64,290 2,143 841 29
Class R-3 52,670 1,760 925 31
Class R-4 25,689 848 307 10
Class R-5 11,734 384 1,405 47
Total net increase
(decrease) $ 1,306,663 43,212 $ 114,039 3,828
Year ended September 30, 2004
Class A $ 1,812,353 66,943 $ 9,695 376
Class B 121,394 4,620 - -
Class C 159,066 6,069 - -
Class F 96,511 3,572 184 7
Class 529-A 48,055 1,777 148 6
Class 529-B 9,482 357 - -
Class 529-C 21,568 810 - -
Class 529-E 2,989 111 2 -*
Class 529-F 4,757 178 12 -*
Class R-1 4,372 164 2 -*
Class R-2 98,778 3,680 50 2
Class R-3 64,095 2,376 80 3
Class R-4 16,354 606 25 1
Class R-5 33,209 1,221 284 11
Total net increase
(decrease) $ 2,492,983 92,484 $ 10,482 406
Share class Repurchases(1) Net increase
Amount Shares Amount Shares
Six months ended March 31, 2005
Class A $ (793,949) (26,186) $ 226,685 7,460
Class B (19,866) (674) 26,272 897
Class C (25,754) (875) 55,668 1,901
Class F (19,544) (647) 40,828 1,348
Class 529-A (3,136) (102) 27,900 920
Class 529-B (490) (16) 3,836 129
Class 529-C (1,401) (47) 10,724 360
Class 529-E (155) (5) 1,964 66
Class 529-F (199) (6) 1,888 63
Class R-1 (542) (19) 2,040 67
Class R-2 (19,343) (647) 45,788 1,525
Class R-3 (13,486) (451) 40,109 1,340
Class R-4 (4,070) (134) 21,926 724
Class R-5 (9,662) (316) 3,477 115
Total net increase
(decrease) $ (911,597) (30,125) $ 509,105 16,915
Year ended September 30, 2004
Class A $ (1,443,662) (53,445) $ 378,386 13,874
Class B (34,047) (1,301) 87,347 3,319
Class C (36,076) (1,382) 122,990 4,687
Class F (38,184) (1,414) 58,511 2,165
Class 529-A (2,869) (105) 45,334 1,678
Class 529-B (352) (13) 9,130 344
Class 529-C (1,731) (65) 19,837 745
Class 529-E (219) (8) 2,772 103
Class 529-F (1,179) (44) 3,590 134
Class R-1 (1,364) (52) 3,010 112
Class R-2 (23,685) (887) 75,143 2,795
Class R-3 (16,637) (619) 47,538 1,760
Class R-4 (7,980) (310) 8,399 297
Class R-5 (15,135) (560) 18,358 672
Total net increase
(decrease) $ (1,623,120) (60,205) $ 880,345 32,685
* Amount less than one thousand.
(1) Includes exchanges between share classes of the fund.
6. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, excluding short-term
securities, of $2,409,602,000 and $2,310,042,000, respectively, during the six
months ended March 31, 2005.
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
six months ended March 31, 2005, the custodian fee of $1,902,000, shown on the
accompanying financial statements, includes $27,000 that was offset by this
reduction, rather than paid in cash.
Financial highlights (1)
Income (loss) from investment operations(2)
Net
Net asset gains (losses)
value, Net on securities Total from
beginning investment (both realized investment
of period income (loss) and unrealized) operations
Class A:
Six months ended 3/31/2005 (5) $27.82 $.10 $3.55 $3.65
Year ended 9/30/2004 23.22 .02 4.61 4.63
Year ended 9/30/2003 17.53 (.01) 5.70 5.69
Year ended 9/30/2002 18.62 (.07) (.98) (1.05)
Year ended 9/30/2001 40.24 - (7) (16.33) (16.33)
Year ended 9/30/2000 29.57 - (7) 11.29 11.29
Class B:
Six months ended 3/31/2005 (5) 26.90 (.02) 3.45 3.43
Year ended 9/30/2004 22.60 (.18) 4.48 4.30
Year ended 9/30/2003 17.20 (.16) 5.56 5.40
Year ended 9/30/2002 18.38 (.23) (.95) (1.18)
Year ended 9/30/2001 40.08 (.21) (16.20) (16.41)
Period from 3/15/2000 to 9/30/2000 47.11 (.12) (6.91) (7.03)
Class C:
Six months ended 3/31/2005 (5) 26.82 (.02) 3.43 3.41
Year ended 9/30/2004 22.54 (.19) 4.47 4.28
Year ended 9/30/2003 17.15 (.16) 5.55 5.39
Year ended 9/30/2002 18.33 (.22) (.95) (1.17)
Period from 3/15/2001 to 9/30/2001 23.06 (.16) (4.57) (4.73)
Class F:
Six months ended 3/31/2005 (5) 27.70 .10 3.53 3.63
Year ended 9/30/2004 23.16 .02 4.58 4.60
Year ended 9/30/2003 17.48 (.01) 5.69 5.68
Year ended 9/30/2002 18.60 (.07) (.98) (1.05)
Period from 3/15/2001 to 9/30/2001 23.27 (.03) (4.64) (4.67)
Class 529-A:
Six months ended 3/31/2005 (5) 27.79 .09 3.54 3.63
Year ended 9/30/2004 23.24 .02 4.60 4.62
Year ended 9/30/2003 17.53 .01 5.70 5.71
Period from 2/19/2002 to 9/30/2002 21.68 (.03) (4.12) (4.15)
Class 529-B:
Six months ended 3/31/2005 (5) 27.20 (.04) 3.48 3.44
Year ended 9/30/2004 22.88 (.23) 4.55 4.32
Year ended 9/30/2003 17.43 (.19) 5.64 5.45
Period from 2/20/2002 to 9/30/2002 21.82 (.14) (4.25) (4.39)
Class 529-C:
Six months ended 3/31/2005 (5) 27.21 (.04) 3.48 3.44
Year ended 9/30/2004 22.89 (.22) 4.54 4.32
Year ended 9/30/2003 17.44 (.18) 5.63 5.45
Period from 2/20/2002 to 9/30/2002 21.82 (.14) (4.24) (4.38)
Class 529-E:
Six months ended 3/31/2005 (5) 27.58 .04 3.53 3.57
Year ended 9/30/2004 23.09 (.08) 4.59 4.51
Year ended 9/30/2003 17.50 (.07) 5.66 5.59
Period from 3/15/2002 to 9/30/2002 23.21 (.06) (5.65) (5.71)
Class 529-F:
Six months ended 3/31/2005 (5) 27.72 .08 3.54 3.62
Year ended 9/30/2004 23.20 (.01) 4.60 4.59
Year ended 9/30/2003 17.53 (.02) 5.69 5.67
Period from 9/17/2002 to 9/30/2002 18.24 - (7) (.71) (.71)
Financial highlights (1) (continued)
Income (loss) from investment operations(2)
Net
Net asset gains(losses)
value, Net on securities Total from
beginning investment (both realized investment
of period income (loss) and unrealized) operations
Class R-1:
Six months ended 3/31/2005 (5) $27.34 $(.02) $3.50 $3.48
Year ended 9/30/2004 23.00 (.19) 4.55 4.36
Year ended 9/30/2003 17.49 (.16) 5.67 5.51
Period from 6/19/2002 to 9/30/2002 21.60 (.04) (4.07) (4.11)
Class R-2:
Six months ended 3/31/2005 (5) 27.36 (.02) 3.49 3.47
Year ended 9/30/2004 23.00 (.18) 4.56 4.38
Year ended 9/30/2003 17.49 (.15) 5.66 5.51
Period from 5/31/2002 to 9/30/2002 22.62 (.05) (5.08) (5.13)
Class R-3:
Six months ended 3/31/2005 (5) 27.58 .04 3.52 3.56
Year ended 9/30/2004 23.12 (.08) 4.59 4.51
Year ended 9/30/2003 17.51 (.07) 5.68 5.61
Period from 6/20/2002 to 9/30/2002 21.43 (.02) (3.90) (3.92)
Class R-4:
Six months ended 3/31/2005 (5) 27.79 .10 3.55 3.65
Year ended 9/30/2004 23.22 .02 4.61 4.63
Year ended 9/30/2003 17.53 - (7) 5.69 5.69
Period from 7/24/2002 to 9/30/2002 18.55 (.01) (1.01) (1.02)
Class R-5:
Six months ended 3/31/2005 (5) 27.97 .15 3.56 3.71
Year ended 9/30/2004 23.33 .10 4.64 4.74
Year ended 9/30/2003 17.55 .05 5.73 5.78
Period from 5/15/2002 to 9/30/2002 23.36 - (7) (5.81) (5.81)
Financial highlights (1)
Dividends and distributions
Dividends
(from net Distributions Total Net asset
investment (from capital dividends and value, end
income) gains) distributions of period
Class A:
Six months ended 3/31/2005 (5) $(.31) $- $(.31) $31.16
Year ended 9/30/2004 (.03) - (.03) 27.82
Year ended 9/30/2003 - - - 23.22
Year ended 9/30/2002 (.04) - (.04) 17.53
Year ended 9/30/2001 - (5.29) (5.29) 18.62
Year ended 9/30/2000 (.02) (.60) (.62) 40.24
Class B:
Six months ended 3/31/2005 (5) (.10) - (.10) 30.23
Year ended 9/30/2004 - - - 26.90
Year ended 9/30/2003 - - - 22.60
Year ended 9/30/2002 - - - 17.20
Year ended 9/30/2001 - (5.29) (5.29) 18.38
Period from 3/15/2000 to 9/30/2000 - - - 40.08
Class C:
Six months ended 3/31/2005 (5) (.13) - (.13) 30.10
Year ended 9/30/2004 - - - 26.82
Year ended 9/30/2003 - - - 22.54
Year ended 9/30/2002 (.01) - (.01) 17.15
Period from 3/15/2001 to 9/30/2001 - - - 18.33
Class F:
Six months ended 3/31/2005 (5) (.33) - (.33) 31.00
Year ended 9/30/2004 (.06) - (.06) 27.70
Year ended 9/30/2003 - - - 23.16
Year ended 9/30/2002 (.07) - (.07) 17.48
Period from 3/15/2001 to 9/30/2001 - - - 18.60
Class 529-A:
Six months ended 3/31/2005 (5) (.33) - (.33) 31.09
Year ended 9/30/2004 (.07) - (.07) 27.79
Year ended 9/30/2003 - - - 23.24
Period from 2/19/2002 to 9/30/2002 - - - 17.53
Class 529-B:
Six months ended 3/31/2005 (5) (.09) - (.09) 30.55
Year ended 9/30/2004 - - - 27.20
Year ended 9/30/2003 - - - 22.88
Period from 2/20/2002 to 9/30/2002 - - - 17.43
Class 529-C:
Six months ended 3/31/2005 (5) (.09) - (.09) 30.56
Year ended 9/30/2004 - - - 27.21
Year ended 9/30/2003 - - - 22.89
Period from 2/20/2002 to 9/30/2002 - - - 17.44
Class 529-E:
Six months ended 3/31/2005 (5) (.24) - (.24) 30.91
Year ended 9/30/2004 (.02) - (.02) 27.58
Year ended 9/30/2003 - - - 23.09
Period from 3/15/2002 to 9/30/2002 - - - 17.50
Class 529-F:
Six months ended 3/31/2005 (5) (.30) - (.30) 31.04
Year ended 9/30/2004 (.07) - (.07) 27.72
Year ended 9/30/2003 - - - 23.20
Period from 9/17/2002 to 9/30/2002 - - - 17.53
Financial highlights (1) (continued)
Dividends and distributions
Dividends
(from net Distributions Total Net asset
investment (from capital dividends and value, end
income) gains) distributions of period
Class R-1:
Six months ended 3/31/2005 (5) $(.16) - $(.16) $30.66
Year ended 9/30/2004 (.02) - (.02) 27.34
Year ended 9/30/2003 - - - 23.00
Period from 6/19/2002 to 9/30/2002 - - - 17.49
Class R-2:
Six months ended 3/31/2005 (5) (.16) - (.16) 30.67
Year ended 9/30/2004 (.02) - (.02) 27.36
Year ended 9/30/2003 - - - 23.00
Period from 5/31/2002 to 9/30/2002 - - - 17.49
Class R-3:
Six months ended 3/31/2005 (5) (.26) - (.26) 30.88
Year ended 9/30/2004 (.05) - (.05) 27.58
Year ended 9/30/2003 - - - 23.12
Period from 6/20/2002 to 9/30/2002 - - - 17.51
Class R-4:
Six months ended 3/31/2005 (5) (.35) - (.35) 31.09
Year ended 9/30/2004 (.06) - (.06) 27.79
Year ended 9/30/2003 - - - 23.22
Period from 7/24/2002 to 9/30/2002 - - - 17.53
Class R-5:
Six months ended 3/31/2005 (5) (.42) - (.42) 31.26
Year ended 9/30/2004 (.10) - (.10) 27.97
Year ended 9/30/2003 - - - 23.33
Period from 5/15/2002 to 9/30/2002 - - - 17.55
Financial highlights (1)
Ratio of expenses Ratios of expenses
to average net to average net Ratio of net
Net assets, assets before assets after income (loss)
Total end of period reimbursements/ reimbursements/ to average
return (3) (in millions) waivers waivers (4) net assets
Class A:
Six months ended 3/31/2005 (5) 13.17% $11,177 1.10% (6) 1.07% (6) .67% (6)
Year ended 9/30/2004 19.95 9,771 1.12 1.12 .06
Year ended 9/30/2003 32.46 7,833 1.19 1.19 (.07)
Year ended 9/30/2002 (5.69) 6,283 1.17 1.17 (.32)
Year ended 9/30/2001 (44.95) 7,265 1.09 1.09 (.01)
Year ended 9/30/2000 38.42 14,098 1.10 1.10 - (8)
Class B:
Six months ended 3/31/2005 (5) 12.77 397 1.88 (6) 1.84 (6) (.10)(6)
Year ended 9/30/2004 19.03 329 1.88 1.88 (.69)
Year ended 9/30/2003 31.40 201 1.97 1.97 (.85)
Year ended 9/30/2002 (6.42) 118 1.95 1.95 (1.09)
Year ended 9/30/2001 (45.38) 86 1.89 1.89 (.81)
Period from 3/15/2000 to 9/30/2000 (14.92) 73 1.84 (6) 1.84 (6) (.57)(6)
Class C:
Six months ended 3/31/2005 (5) 12.73 364 1.92 (6) 1.88 (6) (.14)(6)
Year ended 9/30/2004 18.99 274 1.92 1.91 (.71)
Year ended 9/30/2003 31.43 124 1.97 1.97 (.85)
Year ended 9/30/2002 (6.42) 56 1.96 1.96 (1.08)
Period from 3/15/2001 to 9/30/2001 (20.51) 17 2.11 (6) 2.11 (6) (1.11)(6)
Class F:
Six months ended 3/31/2005 (5) 13.16 185 1.15 (6) 1.12 (6) .64 (6)
Year ended 9/30/2004 19.90 128 1.15 1.14 .06
Year ended 9/30/2003 32.49 57 1.18 1.18 (.06)
Year ended 9/30/2002 (5.73) 24 1.20 1.20 (.32)
Period from 3/15/2001 to 9/30/2001 (20.07) 7 1.23 (6) 1.23 (6) (.21)(6)
Class 529-A:
Six months ended 3/31/2005 (5) 13.12 137 1.16 (6) 1.12 (6) .62 (6)
Year ended 9/30/2004 19.90 97 1.14 1.14 .06
Year ended 9/30/2003 32.57 42 1.11 1.11 .03
Period from 2/19/2002 to 9/30/2002 (19.14) 15 1.18 (6) 1.18 (6) (.25)(6)
Class 529-B:
Six months ended 3/31/2005 (5) 12.65 28 2.04 (6) 2.01 (6) (.26)(6)
Year ended 9/30/2004 18.88 22 2.04 2.04 (.84)
Year ended 9/30/2003 31.27 10 2.09 2.09 (.95)
Period from 2/20/2002 to 9/30/2002 (20.12) 3 2.08 (6) 2.08 (6) (1.15)(6)
Class 529-C:
Six months ended 3/31/2005 (5) 12.67 60 2.03 (6) 2.00 (6) (.25)(6)
Year ended 9/30/2004 18.87 43 2.03 2.03 (.83)
Year ended 9/30/2003 31.25 20 2.07 2.07 (.94)
Period from 2/20/2002 to 9/30/2002 (20.07) 7 2.05 (6) 2.05 (6) (1.12)(6)
Class 529-E:
Six months ended 3/31/2005 (5) 12.98 9 1.50 (6) 1.47 (6) .28 (6)
Year ended 9/30/2004 19.52 6 1.50 1.49 (.29)
Year ended 9/30/2003 31.94 3 1.53 1.53 (.38)
Period from 3/15/2002 to 9/30/2002 (24.60) 1 1.51 (6) 1.51 (6) (.60)(6)
Class 529-F:
Six months ended 3/31/2005 (5) 13.10 10 1.25 (6) 1.22 (6) .53 (6)
Year ended 9/30/2004 19.81 7 1.25 1.24 (.04)
Year ended 9/30/2003 32.34 3 1.27 1.27 (.10)
Period from 9/17/2002 to 9/30/2002 (3.89) - (9) .04 .04 .01
Financial highlights (1) (continued)
Ratio of expenses Ratios of expenses
to average net to average net Ratio of net
Net assets, assets before assets after income (loss)
Total end of period reimbursements/ reimbursements/ to average
return (3) (in millions) waivers waivers (4) net assets
Class R-1:
Six months ended 3/31/2005 (5) 12.73% $8 1.99% (6) 1.89% (6) (.13)(6)
Year ended 9/30/2004 18.98 6 2.01 1.91 (.71)
Year ended 9/30/2003 31.50 2 2.43 1.93 (.78)
Period from 6/19/2002 to 9/30/2002 (19.03) - (9) 7.56 .54 (.22)
Class R-2:
Six months ended 3/31/2005 (5) 12.71 194 2.18 (6) 1.85 (6) (.11)(6)
Year ended 9/30/2004 19.05 131 2.30 1.88 (.67)
Year ended 9/30/2003 31.50 46 2.59 1.89 (.75)
Period from 5/31/2002 to 9/30/2002 (22.68) 2 .85 .63 (.29)
Class R-3:
Six months ended 3/31/2005 (5) 12.95 136 1.52 (6) 1.47 (6) .28 (6)
Year ended 9/30/2004 19.52 85 1.55 1.49 (.28)
Year ended 9/30/2003 32.04 30 1.67 1.51 (.37)
Period from 6/20/2002 to 9/30/2002 (18.29) 2 .52 .42 (.11)
Class R-4:
Six months ended 3/31/2005 (5) 13.18 45 1.13 (6) 1.10 (6) .67 (6)
Year ended 9/30/2004 19.95 20 1.13 1.13 .07
Year ended 9/30/2003 32.46 10 1.17 1.16 (.02)
Period from 7/24/2002 to 9/30/2002 (5.50) - (9) .70 .21 (.03)
Class R-5:
Six months ended 3/31/2005 (5) 13.31 121 .82 (6) .78 (6) .96 (6)
Year ended 9/30/2004 20.34 105 .82 .81 .36
Year ended 9/30/2003 32.93 72 .83 .83 .28
Period from 5/15/2002 to 9/30/2002 (24.87) 53 .31 .31 .01
Six months ended
March 31, Year ended September 30
2005(5) 2004 2003 2002 2001 2000
Portfolio turnover rate for all classes of shares 20% 48% 49% 51% 60% 63%
(1) Based on operations for the period shown (unless otherwise noted) and,
accordingly, may not be representative of a full year.
(2) Based on average shares outstanding.
(3) Total returns exclude all sales charges, including contingent deferred
sales charges.
(4) The ratios in this column reflect the impact, if any, of certain
reimbursements/waivers from CRMC. During some of the periods shown, CRMC
reduced fees for investment advisory services for all share classes. In
addition, during the start-up period for the retirement plan share classes
(except Class R-5), CRMC agreed to pay a portion of the fees related to
transfer agent services.
(5) Unaudited.
(6) Annualized.
(7) Amount less than one cent.
(8) Amount less than .01 percent.
(9) Amount less than $1 million.
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 (October
1, 2004 through March 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 shareholders, 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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of each share class in the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning account Ending account Expenses paid Annualized
value 10/1/2004 value 3/31/2005 during period(1) expense ratio
Class A -- actual return $ 1,000.00 $1,131.73 $5.69 1.07%
Class A -- assumed 5% return 1,000.00 1,019.60 5.39 1.07
Class B -- actual return 1,000.00 1,127.73 9.76 1.84
Class B -- assumed 5% return 1,000.00 1,015.76 9.25 1.84
Class C -- actual return 1,000.00 1,127.28 9.97 1.88
Class C -- assumed 5% return 1,000.00 1,015.56 9.45 1.88
Class F -- actual return 1,000.00 1,131.62 5.95 1.12
Class F -- assumed 5% return 1,000.00 1,019.35 5.64 1.12
Class 529-A -- actual return 1,000.00 1,131.24 5.95 1.12
Class 529-A -- assumed 5% return 1,000.00 1,019.35 5.64 1.12
Class 529-B -- actual return 1,000.00 1,126.50 10.66 2.01
Class 529-B -- assumed 5% return 1,000.00 1,014.91 10.10 2.01
Class 529-C -- actual return 1,000.00 1,126.69 10.60 2.00
Class 529-C -- assumed 5% return 1,000.00 1,014.96 10.05 2.00
Class 529-E -- actual return 1,000.00 1,129.82 7.81 1.47
Class 529-E -- assumed 5% return 1,000.00 1,017.60 7.39 1.47
Class 529-F -- actual return 1,000.00 1,131.04 6.48 1.22
Class 529-F -- assumed 5% return 1,000.00 1,018.85 6.14 1.22
Class R-1 -- actual return 1,000.00 1,127.34 10.02 1.89
Class R-1 -- assumed 5% return 1,000.00 1,015.51 9.50 1.89
Class R-2 -- actual return 1,000.00 1,127.12 9.81 1.85
Class R-2 -- assumed 5% return 1,000.00 1,015.71 9.30 1.85
Class R-3 -- actual return 1,000.00 1,129.47 7.80 1.47
Class R-3 -- assumed 5% return 1,000.00 1,017.60 7.39 1.47
Class R-4 -- actual return 1,000.00 1,131.83 5.85 1.10
Class R-4 -- assumed 5% return 1,000.00 1,019.45 5.54 1.10
Class R-5 -- actual return 1,000.00 1,133.14 4.15 0.78
Class R-5 -- assumed 5% return 1,000.00 1,021.04 3.93 0.78
(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 (182), and divided by 365 (to reflect the one-half year period).
OFFICES OF THE FUND AND OF
THE INVESTMENT ADVISER
Capital Research and Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
135 South State College Boulevard
Brea, CA 92821-5823
TRANSFER AGENT FOR
SHAREHOLDER ACCOUNTS
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 25065
Santa Ana, CA 92799-5065
P.O. Box 659522
San Antonio, TX 78265-9522
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
CUSTODIAN OF ASSETS
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02105-1713
COUNSEL
Paul, Hastings, Janofsky & Walker LLP
55 Second Street
San Francisco, CA 94105-3441
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
Two California Plaza
350 South Grand Avenue
Los Angeles, CA 90071-3462
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
There are several ways to invest in SMALLCAP World 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 0.77 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 0.81 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) as 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.
"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's proxy voting record for
the 12 months ended June 30, 2004, is also available on the SEC and American
Funds websites.
A complete March 31, 2005, portfolio of SMALLCAP World Fund's investments is
available free of charge on the SEC website or upon request by calling AFS.
SMALLCAP World 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 form is
available free of charge on the SEC website or upon request by calling AFS. You
may also review or, for a fee, copy the form at the SEC's Public Reference Room
in Washington, D.C. (800/SEC-0330).
This report is for the information of shareholders of SMALLCAP World 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, 2005, this report must be accompanied by an American Funds statistical
update for the most recently completed calendar quarter.
[logo - American Funds(R)]
The right choice for the long term(R)
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 30 million shareholder accounts.
OUR UNIQUE COMBINATION OF STRENGTHS INCLUDES THESE FIVE FACTORS:
o A LONG-TERM, VALUE-ORIENTED APPROACH
Rather than follow fads, we pursue a consistent strategy, focusing on each
investment's long-term potential.
o AN UNPARALLELED GLOBAL RESEARCH EFFORT
American Funds draws on one of the industry's most globally integrated
research networks.
o 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.
o EXPERIENCED INVESTMENT PROFESSIONALS
The recent market decline was not the first for most of the portfolio
counselors who serve the American Funds. More than half of them were in the
investment business before the sharp market decline of 1987.
o 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.
29 MUTUAL FUNDS, CONSISTENT PHILOSOPHY, CONSISTENT RESULTS
o GROWTH FUNDS
AMCAP Fund(R)
EuroPacific Growth Fund(R)
The Growth Fund of America(R)
The New Economy Fund(R)
New Perspective Fund(R)
New World Fund(SM)
> SMALLCAP World Fund(R)
o GROWTH-AND-INCOME FUNDS
American Mutual Fund(R)
Capital World Growth and Income Fund(SM)
Fundamental Investors(SM)
The Investment Company of America(R)
Washington Mutual Investors Fund(SM)
o EQUITY-INCOME FUNDS
Capital Income Builder(R)
The Income Fund of America(R)
o BALANCED FUND
American Balanced Fund(R)
o BOND FUNDS
American High-Income Trust(SM)
The Bond Fund of America(SM)
Capital World Bond Fund(R)
Intermediate Bond Fund of America(R)
U.S. Government Securities Fund(SM)
o TAX-EXEMPT BOND FUNDS
American High-Income Municipal Bond Fund(R)
Limited Term Tax-Exempt Bond Fund of America(SM)
The Tax-Exempt Bond Fund of America(R)
STATE-SPECIFIC TAX-EXEMPT FUNDS
The Tax-Exempt Fund of California(R)
The Tax-Exempt Fund of Maryland(R)
The Tax-Exempt Fund of Virginia(R)
o MONEY MARKET FUNDS
The Cash Management Trust of America(R)
The Tax-Exempt Money Fund of America(SM)
The U.S. Treasury Money Fund of America(SM)
THE CAPITAL GROUP COMPANIES
American Funds
Capital Research and Management
Capital International
Capital Guardian
Capital Bank and Trust
Lit. No. MFGESR-935-0505P
Litho in USA BBC/LI/8094-S1946
Printed on recycled paper
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.
ITEM 6 - Schedule of Investments
[logo - American Funds (r)]
SMALLCAP World Fund
Investment portfolio
March 31, 2005
unaudited
Market value
Common stocks -- 92.22% Shares (000)
CONSUMER DISCRETIONARY -- 20.28%
Michaels Stores, Inc. 5,300,000 $192,390
Aristocrat Leisure Ltd. 13,195,000 103,860
SBS Broadcasting SA(1,2) 1,860,000 83,068
Lions Gate Entertainment Corp., USD denominated(1,2) 3,050,000 33,702
Lions Gate Entertainment Corp.(1,2) 2,728,500 30,239
Reader's Digest Assn., Inc., Class A 3,650,000 63,181
Schibsted ASA 2,370,000 62,248
Orient-Express Hotels Ltd., Class A 2,326,000 60,709
CarMax, Inc.(1) 1,800,000 56,700
Big Lots, Inc.(1) 4,271,400 51,342
Tupperware Corp. 2,500,000 50,900
UnitedGlobalCom, Inc., Class A(1) 5,000,000 47,300
Vail Resorts, Inc.(1) 1,700,000 42,925
Blyth, Inc. 1,275,000 40,596
Gigas K's Denki Corp. 1,565,520 40,387
Triarc Companies, Inc., Class B 1,900,000 26,277
Triarc Companies, Inc., Class A 950,000 13,490
Ekornes ASA 1,775,598 38,513
Alma Media Oyj, Series 2(1) 2,213,530 36,467
Korea Kumho Petrochemical Co., Ltd.(2) 1,774,150 35,133
Valassis Communications, Inc.(1) 1,000,000 34,960
Sonic Corp.(1) 1,035,000 34,569
Cheng Shin Rubber (Xiamen) Ind., Ltd. 27,319,992 32,953
Gemstar-TV Guide International, Inc.(1) 7,410,600 32,236
Arbitron Inc. 751,060 32,220
Restaurant Group PLC(2) 12,629,000 31,470
GSI Commerce, Inc.(1,2) 2,294,491 31,044
Photo-Me International PLC 15,000,000 29,945
Central European Media Enterprises Ltd., Class A(1) 600,000 29,676
O'Charley's Inc.(1,2) 1,350,000 29,349
Children's Place Retail Stores, Inc.(1) 600,000 28,650
CKE Restaurants, Inc.(1) 1,800,000 28,530
Linens 'n Things, Inc.(1) 1,125,000 27,934
Fisher & Paykel Appliances Holdings Ltd. 13,080,000 27,694
Paddy Power PLC 1,617,700 27,679
Williams-Sonoma, Inc.(1) 750,000 27,562
Catalina Marketing Corp. 1,050,000 27,195
Cafe de Coral Holdings Ltd. 23,750,000 27,102
Fourlis(1,2) 3,310,000 27,030
Nokian Renkaat Oyj 167,000 26,907
Zale Corp.(1) 900,000 26,748
Nitori Co., Ltd. 404,200 26,097
Phoenix Satellite Television Holdings Ltd.(1) 129,889,000 25,314
Furniture Brands International, Inc. 1,125,000 24,536
Halfords Group PLC 4,200,000 23,747
Nobia AB 1,255,000 23,710
Pinnacle Entertainment, Inc.(1) 1,400,000 23,380
J D Wetherspoon PLC 4,753,975 23,132
ValueVision Media, Inc., Class A(1) 1,800,000 22,266
Ameristar Casinos, Inc. 400,000 21,872
Stanley Leisure PLC 2,740,000 21,777
Bloomsbury Publishing PLC 3,365,000 21,217
Cheil Industries Inc. 1,300,000 21,133
Astral Media Inc., Class A 750,000 21,034
Impact 21 Co., Ltd. 890,000 20,344
Reins International Inc. 3,744 20,121
Journal Communications, Inc., Class A 1,203,500 19,918
Clear Media Ltd.(1) 22,004,000 19,326
Salem Communications Corp., Class A(1) 930,000 19,158
P.F. Chang's China Bistro, Inc.(1) 312,000 18,658
Hyatt Regency SA 1,559,330 18,474
Spark Networks PLC(1)(,2,3,4) 1,103,000 10,423
Spark Networks PLC (GDR)(1,2) 747,000 7,843
La-Z-Boy Inc. 1,300,000 18,109
JJB Sports PLC 4,390,500 17,406
KOMERI Co., Ltd. 648,100 17,143
Nishimatsuya Chain Co., Ltd. 600,000 17,074
Sanctuary Group PLC(2) 21,490,000 16,633
Sharper Image Corp.(1,2) 950,000 15,779
Rational AG 137,600 15,392
Modern Times Group MTG AB, Class B(1) 500,000 15,142
Next Media Ltd.(1) 34,418,000 14,673
Kumho Industrial Co., Ltd. 900,000 13,478
Culture Convenience Club Co., Ltd. 843,000 13,371
Columbia Sportswear Co.(1) 250,000 13,307
GEOX SpA(1) 1,483,000 12,894
BEC World PCL 31,500,000 11,840
Kuoni Reisen Holding AG, Class B 26,000 11,498
Kourakuen Corp.(2) 827,600 11,150
Palm Harbor Homes, Inc.(1) 663,906 10,795
Corus Entertainment Inc., Class B, nonvoting 405,000 9,798
Levitt Corp., Class A 377,100 9,669
Repco Corp. Ltd. 3,660,000 9,310
Charles Vogele Holding AG 152,000 9,085
Zee Telefilms Ltd. 2,700,000 8,598
Bilia AB, Class A 430,000 8,458
JB Hi-Fi Ltd. 2,850,000 8,374
Applebee's International, Inc. 300,000 8,268
BKN International AG(1,2) 513,857 4,130
BKN International AG(1,2,4) 451,143 3,626
California Pizza Kitchen, Inc.(1) 321,171 7,528
Can Do Co., Ltd. 6,600 7,328
Maruti Udyog Ltd. 750,000 7,244
Cedar Fair, L.P. 230,000 7,238
Nien Hsing Textile Co., Ltd. 7,861,000 7,096
Build-A-Bear Workshop, Inc.(1) 203,500 6,237
Haseko Corp.(1) 2,830,000 6,231
Yellow Pages (Singapore) Ltd.(1) 5,202,000 6,114
Submarino SA, ordinary nominative (GDR)(1,3,4) 312,000 5,051
Submarino SA, ordinary nominative(1) 100,000 809
Rinnai Corp. 230,000 5,837
Carpetright PLC 307,213 5,753
TECMO, Ltd. 585,000 5,649
Toei Animation Co., Ltd. 140,000 5,408
House of Fraser PLC 2,250,000 4,736
MEDION AG 276,100 4,474
Restoration Hardware, Inc.(1) 713,000 4,064
Zhejiang Glass Co. Ltd., Class H 11,499,400 3,244
Compass East Industry (Thailand) PCL 8,514,100 1,339
2,610,740
INFORMATION TECHNOLOGY -- 14.99%
Kingboard Chemical Holdings Ltd.(2) 42,846,000 128,002
Ask Jeeves, Inc.(1,2) 3,785,000 106,283
Integrated Circuit Systems, Inc.(1,2) 4,745,000 90,724
CNET Networks, Inc.(1,2) 9,300,000 87,792
Semtech Corp.(1,2) 3,800,000 67,906
Mentor Graphics Corp.(1,2) 4,870,000 66,719
ACTIVISION, Inc.(1) 3,600,000 53,280
Venture Corp. Ltd. 5,969,600 48,101
Power Integrations, Inc.(1,2) 2,300,000 48,047
GOME Electrical Appliances Holding Ltd.(1) 40,056,000 42,885
NHN Corp.(1) 484,652 42,306
Vanguard International Semiconductor Corp.(1) 55,005,026 41,433
Sohu.com Inc.(1,2) 2,350,000 41,313
Manhattan Associates, Inc.(1,2) 1,950,000 39,721
Cymer, Inc.(1) 1,460,000 39,084
Cypress Semiconductor Corp.(1) 3,000,000 37,800
National Instruments Corp. 1,385,174 37,469
Conexant Systems, Inc.(1,2) 24,000,000 36,000
PMC-Sierra, Inc.(1) 4,000,000 35,200
lastminute.com PLC(1) 15,050,000 32,957
Brooks Automation, Inc.(1) 1,975,000 29,980
Brocade Communications Systems, Inc.(1) 5,000,000 29,600
Littelfuse, Inc.(1) 1,031,221 29,544
Fairchild Semiconductor International, Inc.(1) 1,775,000 27,211
O2Micro International Ltd.(1,2) 2,495,000 25,674
Digital River, Inc.(1) 800,000 24,928
Veeco Instruments, Inc.(1,2) 1,598,523 24,058
Rogers Corp.(1) 600,000 24,000
Andrew Corp.(1) 2,000,000 23,420
Vaisala Oyj, Class A 848,095 21,436
Sanken Electric Co., Ltd. 1,625,000 21,287
NAVTEQ Corp.(1) 459,500 19,919
Ichia Technologies, Inc.(2) 14,789,617 19,790
Orbotech Ltd.(1) 887,000 19,425
Intersil Corp., Class A 1,107,105 19,175
Moser Baer India Ltd. 3,750,000 17,993
BOWE SYSTEC AG 294,000 17,454
Leitch Technology Corp.(1,2) 2,522,000 16,916
MKS Instruments, Inc.(1) 1,050,000 16,674
Silicon Graphics, Inc.(1,2) 14,000,000 16,660
Atheros Communications, Inc.(1) 1,500,000 15,405
PDF Solutions, Inc.(1) 1,100,000 15,400
YOU EAL Electronics Co., Ltd. 564,600 15,019
Citizen Electronics Co., Ltd. 300,000 14,667
Uniden Corp. 704,000 14,615
Advanced Energy Industries, Inc.(1) 1,500,000 14,505
King Yuan Electronics Co., Ltd. 18,723,000 13,865
Echelon Corp.(1) 2,000,000 13,680
Interflex Co., Ltd.(2) 799,000 13,461
E.piphany, Inc.(1) 3,550,000 12,603
Lawson Software, Inc.(1) 2,000,000 11,800
Hana Microelectronics PCL 20,675,000 11,683
SINA Corp.(1) 360,000 11,182
Faraday Technology Corp. 5,656,852 10,967
Aspen Technology, Inc.(1) 1,900,000 10,792
Fair Isaac Corp. 307,300 10,583
Kakaku.com, Inc. 1,250 10,473
KEC Corp.(2) 523,540 10,187
Agile Software Corp.(1) 1,350,000 9,828
SkillSoft PLC (ADR)(1) 2,655,346 9,772
Knot, Inc.(1,2,4) 1,200,000 8,640
Knot, Inc.(1,2) 140,800 1,014
MatrixOne, Inc.(1) 2,000,000 9,540
Micronas Semiconductor Holding AG(1) 205,449 8,570
Creo Inc., USD denominated(1) 500,000 8,030
Parametric Technology Corp.(1) 1,381,200 7,721
Anoto Group AB(1) 4,549,244 7,178
Optimax Technology Corp. 2,500,000 7,040
GSI Lumonics Inc.(1) 777,200 7,026
Rotork PLC 797,581 7,016
Vishay Intertechnology, Inc.(1) 497,200 6,180
Jahwa Electronics Co., Ltd. 620,000 6,084
Pinnacle Systems, Inc.(1) 1,084,353 6,062
Renishaw PLC 384,108 5,315
Open Solutions Inc.(1) 250,000 4,958
CIENA Corp.(1) 2,613,800 4,496
Taiflex Scientific Co., Ltd. 3,043,200 4,401
Infoteria Corp.(1,2,3,4) 2,672 748
ClearSpeed Technology Ltd.(1,3,4) 2,300,000 198
MMC AS(1,3,4) 4,150,000 65
Orbiscom Ltd.(1,3,4) 3,905,874 59
VIA Technologies, Inc.(1) 8,721 5
diCarta(1,3,4) 103,135 --
1,928,999
INDUSTRIALS -- 13.94%
Daelim Industrial Co., Ltd.(2) 2,390,190 126,692
United Stationers Inc.(1,2) 1,702,200 77,025
Downer EDI Ltd.(2) 18,701,412 75,336
Vedior NV 2,973,550 52,881
Hyundai Mipo Dockyard Co., Ltd. 867,350 48,708
Container Corp. of India Ltd. 2,641,794 48,475
Hyundai Development Co. 2,600,000 47,389
Hughes Supply, Inc. 1,550,000 46,112
Laureate Education, Inc.(1) 1,070,000 45,785
SembCorp Logistics Ltd.(2) 43,652,200 43,107
Zhejiang Expressway Co. Ltd., Class H 58,000,000 40,902
Heijmans NV 971,115 39,890
MSC Industrial Direct Co., Inc., Class A 1,300,000 39,728
LG Cable Ltd. 1,598,250 38,893
Sumitomo Heavy Industries, Ltd. 9,240,000 36,381
United Rentals, Inc.(1) 1,800,000 36,378
Noritz Corp. 2,060,000 35,326
Uponor Oyj 1,665,200 34,967
LS Industrial Systems Co., Ltd.(2) 1,950,000 34,869
Shipbuilding Co., Ltd.(2) 1,493,000 34,346
Lincoln Electric Holdings, Inc. 1,080,000 32,486
SIRVA, Inc.(1,2) 4,500,000 31,995
Transurban Group(1) 5,830,303 31,826
LG Engineering & Construction Co., Ltd. 1,100,000 30,345
Corrections Corporation of America(1) 775,000 29,915
Royal Group Technologies Ltd.(1) 2,500,000 26,466
Geberit AG 35,500 25,997
Federal Signal Corp. 1,676,100 25,426
Royal Boskalis Westminster NV 638,620 24,999
School Specialty, Inc.(1) 622,635 24,382
Koninklijke BAM Groep NV 389,522 22,973
Cummins India Ltd. 8,775,000 22,491
EnerSys(1) 1,700,000 22,270
Samsung Engineering Co., Ltd.(2) 2,587,640 21,389
Hudson Highland Group, Inc.(1,2) 1,244,000 21,260
Kelly Services, Inc., Class A 725,000 20,873
Seco Tools AB, Class B 445,000 20,813
Wilh. Wilhelmsen ASA , Class A 799,600 20,560
AGCO Corp.(1) 1,060,000 19,345
Tetra Tech, Inc.(1) 1,500,000 18,930
Hagemeyer NV(1) 7,370,000 18,724
ChoicePoint Inc.(1) 450,000 18,050
G&K Services, Inc., Class A 400,000 16,116
John H. Harland Co. 468,500 16,098
Hi-P International Ltd. 16,886,000 15,652
ZENON Environmental Inc.(1) 815,700 14,161
Education Management Corp.(1) 500,000 13,975
Masonite International Corp.(1) 396,900 13,836
GOL Linhas Aereas Inteligentes SA, preferred nominative (ADR)(1) 540,500 13,583
Spirax-Sarco Engineering PLC 1,000,000 13,507
Oslo B0rs Holding ASA 245,000 11,595
CoStar Group, Inc.(1) 300,000 11,055
Permasteelisa SpA 615,000 10,443
Michael Page International PLC 2,837,000 10,390
Taeyoung Corp. 250,000 10,099
KCI Konecranes International Corp. 225,000 9,292
Northgate PLC 535,000 9,065
Curtiss-Wright Corp. 134,300 7,655
Hyundai Engineering & Construction Co., Ltd.(1) 420,000 7,262
Companhia de Concessoes Rodoviarias, ordinary nominative 364,000 7,249
Shenzhen Expressway Co., Ltd. 19,422,000 7,159
Anhui Expressway Co. Ltd., Class H(1) 12,000,000 6,847
Imagistics International Inc.(1) 190,400 6,651
Krones AG 55,000 6,630
Singapore Post Private Ltd. 12,765,000 6,612
Techem AG(1) 145,600 6,360
Kaulin Manufacturing Co. Ltd. 6,011,050 6,238
Chudenko Corp. 328,000 5,616
Korea Electric Terminal Co., Ltd. 350,000 4,828
LTG Technologies PLC(1,2) 17,785,714 4,264
Ultraframe PLC 3,545,000 3,915
Moatech Co., Ltd. 266,000 1,816
Bharat Heavy Electricals Ltd. 85,836 1,508
ZOOTS(1,2,3,4) 12,586,913 234
1,794,416
FINANCIALS -- 9.18%
HDFC Bank Ltd. 9,859,340 123,151
Pusan Bank(2) 9,520,500 75,414
Daegu Bank, Ltd.(2) 8,587,500 63,370
Converium Holding AG 6,500,000 61,131
UTI Bank Ltd. 10,020,000 54,579
ICICI Bank Ltd. 5,584,503 50,289
Cathay General Bancorp, Inc. 1,330,000 41,895
First Niagara Financial Group, Inc. 3,130,000 41,347
Sterling Bancshares, Inc.(2) 2,700,000 38,340
Housing Development Finance Corp. Ltd. 2,212,480 36,976
Sumitomo Real Estate Sales Co., Ltd. 700,000 36,509
Fulton Financial Corp. 1,617,367 35,242
Saxon Capital, Inc. 2,010,000 34,572
IndyMac Bancorp, Inc. 1,000,000 34,000
Aareal Bank AG(1) 890,000 31,378
Siam City Bank PCL, nonvoting depositary receipt 34,618,026 22,129
Siam City Bank PCL 10,816,974 6,914
Ascendas Real Estate Investment Trust 23,121,000 26,334
Ascendas Real Estate Investment Trust(1) 1,881,000 2,142
Centennial Bank Holdings, Inc.(1,2,3,4) 2,700,000 28,350
Unibail Holding 222,000 26,315
LG Insurance Co., Ltd.(2) 3,240,000 21,036
Central Pattana PCL 82,067,000 18,256
Capital Lease Funding, Inc.(2) 1,630,000 18,012
Able Inc. 565,000 16,447
Dongbu Insurance Co., Ltd. 1,850,000 15,128
CapitaMall Trust Management Ltd. 12,210,000 15,091
United Mizrahi Bank Ltd. 3,150,000 14,724
Silicon Valley Bancshares(1) 300,000 13,218
Kotak Mahindra Bank Ltd. 1,658,000 12,903
Banco de Oro Universal Bank 26,000,000 12,824
Bursa Malaysia Bhd.(1) 12,250,000 12,572
LaSalle Partners, Inc.(1) 250,000 11,663
Federal Agricultural Mortgage Corp., Class C 630,000 11,019
First Community Bancorp 245,000 10,854
South Financial Group, Inc. 350,000 10,689
Umpqua Holdings Corp. 450,000 10,508
Topdanmark A/S(1) 137,700 10,262
First Regional Bancorp(1,4) 139,200 8,768
First Regional Bancorp(1) 15,800 995
Southwest Bancorporation of Texas, Inc. 530,000 9,726
Advance America, Cash Advance Centers, Inc. 620,000 9,598
Hong Kong Exchanges and Clearing Ltd. 3,714,000 9,595
JCG Holdings Ltd. 7,937,000 7,480
Franklin Bank Corp.(1) 390,000 6,728
Gladstone Commercial Corp.(2) 395,662 6,505
GB&T Bancshares, Inc. 300,000 6,498
Ace Cash Express, Inc. (USD)(1) 236,000 5,369
Golden Land Property Development PLC(1) 10,647,495 2,273
Golden Land Property Development PLC, nonvoting depositary receipt(1) 9,352,505 1,997
1,181,115
ENERGY -- 8.79%
Quicksilver Resources Inc.(1,2) 2,881,300 140,406
First Calgary Petroleums Ltd., GBP denominated(1) 4,800,000 71,970
First Calgary Petroleums Ltd.(1) 2,146,000 29,996
OPTI Canada Inc.(1,2) 3,873,000 83,924
Helmerich & Payne, Inc. 2,034,800 80,761
Spinnaker Exploration Co.(1,2) 1,885,450 66,990
Cabot Oil & Gas Corp., Class A 1,167,300 64,377
Hydril Co.(1) 1,017,500 59,432
Delta Petroleum Corp.(1,2) 3,267,500 47,509
Encore Acquisition Co.(1) 935,000 38,616
WorleyParsons Ltd. 7,092,000 37,397
TODCO, Class A(1) 1,395,000 36,047
CARBO Ceramics Inc. 500,000 35,075
Bill Barrett Corp.(1) 1,200,000 34,692
Expro International Group PLC(2) 4,250,000 34,557
China Oilfield Services Ltd., Class H 99,037,100 34,286
San Juan Basin Royalty Trust 869,600 31,340
Harvest Natural Resources, Inc.(1,2) 2,372,400 28,208
Regal Petroleum PLC(1) 3,000,000 24,700
Patina Oil & Gas Corp. 600,000 24,000
Southwestern Energy Co.(1) 396,400 22,500
National Oilwell Varco Inc.(1) 418,150 19,528
Thai Oil PCL(1) 9,466,300 15,249
Penn West Petroleum Ltd. 225,000 14,906
Newpark Resources, Inc.(1) 2,500,000 14,725
FMC Technologies, Inc.(1) 350,000 11,613
Rowan Companies, Inc.(1) 385,600 11,541
John Wood Group PLC 3,500,000 10,010
Enerflex Systems Ltd. 325,000 7,118
1,131,473
HEALTH CARE -- 7.80%
Alfresa Holdings Corp. 1,707,000 70,554
Advanced Medical Optics, Inc.(1) 1,825,000 66,083
Medicis Pharmaceutical Corp., Class A 2,150,000 64,457
Valeant Pharmaceuticals International 2,500,000 56,300
Amylin Pharmaceuticals, Inc.(1) 2,556,000 44,704
IDEXX Laboratories, Inc.(1) 820,000 44,411
Nobel Biocare Holding AG 156,000 32,831
Cochlear Ltd. 1,287,000 32,640
Sonic Healthcare Ltd. 3,266,600 30,435
MGI PHARMA, Inc.(1) 1,200,000 30,324
Transkaryotic Therapies, Inc.(1) 1,208,300 30,165
Toho Pharmaceutical Co., Ltd.(2) 2,615,000 30,083
Service Corp. International(1) 4,000,000 29,920
ResMed Inc(1) 451,000 25,436
ResMed Inc, AUD denominated(1) 750,000 4,204
Par Pharmaceutical Companies, Inc.(1) 825,000 27,588
Fisher & Paykel Healthcare Corp. Ltd. 12,600,000 26,858
LifePoint Hospitals, Inc.(1) 550,000 24,112
Rhon-Klinikum AG 226,800 14,376
Rhon-Klinikum AG, nonvoting preferred 125,800 7,835
Kobayashi Pharmaceutical Co., Ltd. 807,300 22,032
CONMED Corp.(1) 700,000 21,084
Diagnosticos da America SA(1) 1,900,000 19,206
American Healthways, Inc.(1) 550,000 18,161
Tecan Group Ltd., Mannedorf(2) 674,217 18,093
Straumann Holding AG 74,000 16,022
Vicuron Pharmaceuticals Inc.(1) 1,000,000 15,760
Coloplast A/S, Class B 274,000 14,266
CTI Molecular Imaging, Inc.(1) 650,000 13,176
Golden Meditech Co. Ltd. 61,394,000 12,752
Triad Hospitals, Inc.(1) 250,000 12,525
Alkermes, Inc.(1) 1,200,000 12,456
OSI Pharmaceuticals, Inc.(1) 287,000 11,865
NPS Pharmaceuticals, Inc.(1) 905,900 11,432
Wilson Greatbatch Technologies, Inc.(1) 613,800 11,196
United Therapeutics Corp.(1) 200,000 9,139
NitroMed, Inc.(1) 500,000 8,655
Rigel Pharmaceuticals, Inc.(1) 500,000 8,020
Pharmion Corp.(1) 250,000 7,250
Incyte Corp.(1) 1,000,000 6,830
Discovery Laboratories, Inc.(1) 1,200,000 6,756
TriPath Imaging, Inc.(1) 886,242 6,239
Penwest Pharmaceuticals Co.(1) 500,000 6,180
Cytokinetics, Inc.(1) 853,500 5,599
Lumenis Ltd.(1,2) 2,270,000 5,403
Vision-Sciences, Inc.(1) 1,543,400 4,292
Animas Corp.(1) 211,814 4,281
NexMed, Inc.(1) 1,100,000 1,232
NexMed, Inc.(1,4) 152,355 171
1,003,389
MATERIALS -- 5.87%
Hanwha Chemical Corp.(2) 6,492,000 85,707
Dongkuk Steel Mill Co., Ltd. 3,355,000 63,464
INI Steel Co. 2,645,000 42,476
Owens-Illinois, Inc.(1) 1,650,000 41,481
Associated Cement Companies Ltd. 4,920,000 40,667
Cleveland-Cliffs Inc. 500,000 36,435
Asian Paints (India) Ltd. 3,312,500 29,765
Hanil Cement Co., Ltd.(2) 491,700 29,357
Peter Hambro Mining PLC(1) 2,390,000 28,199
Cambrex Corp. 1,300,000 27,690
Fuji Seal International, Inc. 741,360 25,869
James Hardie Industries Ltd. 5,582,000 25,853
First Quantum Minerals Ltd.(1) 1,177,700 21,925
Sungshin Cement Co., Ltd. 956,500 18,470
Sino-Forest Corp., Class A(1) 6,022,800 17,783
M-real Oyj, Class B 2,610,000 15,427
Kenmare Resources PLC(1,2) 30,838,000 14,117
Kenmare Resources PLC(1,2,4) 2,500,000 1,144
Hindalco Industries Ltd. 500,000 14,850
Energem Resources Inc.(1) 4,415,000 13,474
Ferro Corp. 700,000 13,174
Yanzhou Coal Mining Co. Ltd., Class H 9,500,000 12,912
Hung Hing Printing Group Ltd. 17,199,000 12,460
Chung Hwa Pulp Corp. 26,240,300 11,551
Northern Orion Resources Inc.(1,4) 2,800,000 8,128
Northern Orion Resources Inc.(1) 1,100,000 3,193
PT Indocement Tunggal Prakarsa(1) 37,750,000 11,167
Cementerie del Tirreno S.p.A. 1,600,000 9,368
PT Semen Gresik 5,000,000 8,743
Arch Coal, Inc. 200,000 8,602
Grasim Industries Ltd. 301,284 8,388
Minara Resources Ltd. 5,073,334 7,885
Anhui Conch Cement Co. Ltd., Class H 7,900,000 7,496
Titan Cement Co. SA 200,000 6,631
PT Bumi Resources Tbk.(1) 78,000,000 6,428
Caspian Energy Inc., GBP denominated(1) 3,450,000 5,503
Caspian Energy Inc.(1) 450,000 711
Banpu PCL 1,480,400 6,132
Oriel Resources PLC(1,4) 5,000,000 4,106
Adastra Minerals Inc.(1,4) 2,625,000 4,016
Ivanhoe Mines Ltd.(1) 282,700 2,128
Aricom PLC(1) 2,593,134 1,438
Gabriel Resources Ltd.(1) 900,000 1,340
Thistle Mining Inc., GBP denominated(1) 4,525,000 122
Thistle Mining Inc.(1,3) 6,000,000 17
755,792
CONSUMER STAPLES -- 4.33%
Lindt & Sprungli AG, participation certificate 19,166 28,296
Lindt & Sprungli AG 1,694 25,703
Nestle India Ltd. 3,344,250 48,922
Anadolu Efes Biracylyk ve Malt Sanayii AS(2) 2,130,000 41,478
AMOREPACIFIC Corp. 165,000 39,502
Fresh Del Monte Produce Inc. 1,100,000 33,572
WD-40 Co.(2) 1,020,900 33,169
BJ's Wholesale Club, Inc.(1) 948,000 29,445
Efes Breweries International NV (GDR)(1,4) 700,000 21,210
Efes Breweries Internatio NV (GDR)(1) 152,155 4,610
Performance Food Group Co.(1) 800,000 22,144
Delta and Pine Land Co. 800,000 21,600
Whole Foods Market, Inc. 200,000 20,426
IOI Corp. Bhd. 8,500,000 20,020
Cawachi Ltd. 470,000 19,952
Universal Corp. 400,000 18,308
CP Seven Eleven PCL 11,792,100 17,186
Coca-Cola West Japan Co. Ltd. 684,000 16,082
American Italian Pasta Co., Class A 550,000 15,070
IAWS Group PLC 850,000 12,858
Mandom Corp. 470,000 12,783
DyDo Drinco 350,000 11,560
Ralcorp Holdings, Inc.(1) 225,000 10,654
Natura Cosmeticos SA 364,000 9,894
Nutreco Holding NV 199,025 6,676
China Mengniu Dairy Co.(1) 7,466,000 5,074
Binggrae Co., Ltd. 119,350 4,445
Wumart Stores, Inc., Class H 2,040,000 3,400
Winn-Dixie Stores, Inc.(1) 3,500,000 3,255
557,294
TELECOMMUNICATION SERVICES -- 1.43%
MobileOne Ltd 31,740,900 38,460
TIM Participacoes SA, preferred nominative (ADR) 2,326,428 34,920
TIM Participacoes SA, ordinary nominative 2,293,595,332 3,306
Nextel Partners, Inc., Class A(1) 1,400,000 30,744
LG Telecom Ltd. (Korea)(1) 4,220,000 16,589
Partner Communications Co. Ltd.(1) 1,515,000 13,982
Partner Communications Co. Ltd. (ADR)(1) 125,000 1,139
PT Indosat Tbk (ADR) 564,000 14,579
GLOBE TELECOM, Inc. 841,867 13,534
Eircom Group PLC 4,170,000 10,972
Unwired Group Ltd.(1,4) 8,900,000 3,991
Unwired Group Ltd.(1) 3,500,000 1,570
183,786
UTILITIES -- 0.72%
Reliance Energy Ltd. 2,259,500 27,449
Xinao Gas Holdings Ltd.(1) 43,066,000 23,192
Tata Power Co. Ltd. 2,108,047 17,330
E1 Corp. 240,000 7,519
Northumbrian Water Group PLC 2,000,000 6,655
Cia. Saneamento Basico de Estado de Sao Paulo - SABESP (ADR) 540,200 6,650
Electricity Generating PCL, nonvoting depositary receipt 2,285,000 4,323
93,118
MISCELLANEOUS -- 4.89%
Other common stocks in initial period of acquisition 629,412
Total common stocks (cost: $9,382,292,000) 11,869,534
Market value
Rights & warrants -- 0.07% Shares (000)
MATERIALS -- 0.05%
Energem Resources Inc., warrants, expire 2005(1,3) 2,027,500 $2,353
Energem Resources Inc., warrants, expire 2007(1,3,4) 360,000 489
Northern Orion Resources Inc., warrants, expires 2008(1,4) 1,400,000 1,911
Kenmare Resources PLC, warrants, expire 2009(1,2) 5,775,000 1,079
Kenmare Resources PLC, warrants, expire 2005(1,2,3,4) 1,250,000 166
Oriel Resources PLC, warrants, expire 2010(1,3,4) 2,500,000 143
Thistle Mining Inc., warrants, expire 2009(1,3,4) 3,000,000 --
6,141
INFORMATION TECHNOLOGY -- 0.02%
Kingboard Chemical Holdings Ltd., warrants, expire 2006(1,2) 3,988,200 3,247
TELECOMMUNICATION SERVICES -- 0.00%
TIM Participacoes SA, ordinary nominative, rights, expire 2005(1) 52,777,279 14
HEALTH CARE -- 0.00%
Generex Biotechnology Corp., warrants, expire 2005(1,3,4) 164,467 --
Total rights & warrants (cost: $102,000) 9,402
Convertible securities -- 0.00%
HEALTH CARE -- 0.00%
Control Delivery Systems Inc., Series A, convertible preferred(1,3,4) 55,824 300
TELECOMMUNICATION SERVICES -- 0.00%
Multiplex, Inc., Series C, convertible preferred(1,3,4) 1,358,696 68
INFORMATION TECHNOLOGY -- 0.00%
Meet World Trade, Series C, convertible preferred(1,3,4) 389,416 --
Socratic Technologies, Inc., Series A, convertible preferred(1,3,4) 375,000 --
--
Total convertible secuities (cost: $22,175,000) 368
Principal amount
Bonds & notes -- 0.04% (000)
CONSUMER STAPLES -- 0.04%
Winn-Dixie Stores, Inc. 8.875% 2008(5) $9,925 5,558
Total bonds & notes (cost: $9,060,000) 5,558
Principal amount Market value
Short-term securities -- 7.28% (000) (000)
Sheffield Receivables Corp. 2.66%-2.69% due 4/4-4/11/2005(4) $50,000 $ 49,972
Barclays U.S. Funding LLC 2.63%-2.83% due 4/15-5/16/2005 41,500 41,392
Amsterdam Funding Corp. 2.64%-2.79% due 4/7-4/26/2005(4) 71,400 71,301
Freddie Mac 2.61%-2.70% due 4/27-5/2/2005 70,600 70,440
American Honda Finance Corp. 2.65%-2.80% due 4/18-5/12/2005 68,100 67,939
Mont Blanc Capital Corp. 2.78% due 4/18/2005(4) 47,200 47,134
ING (U.S.) Funding LLC 2.77% due 5/4/2005 12,500 12,467
DaimlerChrysler Revolving Auto Conduit LLC II 2.675%-2.735% due 4/11-4/22/2005 51,900 51,835
Barton Capital LLC 2.65%-2.80% due 4/6-5/6/2005(4) 51,800 51,700
Siemens Capital Co. LLC 2.56%-2.58% due 4/5-4/7/2005 49,300 49,279
BNP Paribas Finance Inc. 2.86% due 5/24/2005 48,400 48,192
U.S. Treasury Bills 2.552% due 4/7/2005 42,000 41,979
BMW U.S. Capital Corp. 2.58% due 4/8/2005(4) 41,000 40,976
Toyota Credit de Puerto Rico Corp. 2.75% due 5/9/2005 40,000 39,882
UBS Finance (Delaware) LLC 2.775% due 4/28/2005 37,600 37,519
Bank of Ireland 2.59%-2.60% due 4/8-4/14/2005(4) 36,400 36,377
Lloyds Bank PLC 2.61% due 4/1/2005 26,700 26,698
Shell Finance (U.K.) PLC 2.83% due 5/20/2005 25,700 25,599
Statoil ASA 2.77% due 4/21/2005(4) 25,000 24,960
HSBC USA Inc. 2.87% due 6/6/2005 25,000 24,865
Dexia Delaware LLC 2.70% due 4/25/2005 22,200 22,158
Danske Corp., Series A 2.71% due 4/11/2005 20,200 20,183
Old Line Funding, LLC 2.78%-2.79% due 4/26-5/5/2005(4) 19,200 19,157
Federal Home Loan Bank 2.54% due 4/15/2005 10,000 9,989
ANZ (Delaware) Inc. 2.90% due 5/31/2005 5,000 4,975
Total short-term securities (cost: $936,967,000) 936,968
Total investment securities (cost: $10,350,596,000) 12,821,830
Other assets less liabilities 49,406
Net assets $12,871,236
"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) Represents an affiliated company as defined under the Investment Company
Act of 1940.
(3) Valued under fair value procedures adopted by authority of the Board of
Trustees.
(4) Purchased in a private placement transaction; resale may be limited to
qualified institutional buyers; resale to the public may require
registration. The total value of all such restricted securities was
$453,582,000, which represented 3.52% of the net assets of the fund.
(5) Company not making scheduled interest payments; bankruptcy proceedings
pending.
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
ITEM 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 8 - Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end
management investment company.
ITEM 10 - Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Registrant's Board of Directors since the Registrant
last submitted a proxy statement to its shareholders. The procedures are as
follows. The Registrant has a Committee on Governance comprised solely of
persons who are not considered "interested persons" of the Registrant within the
meaning of the Investment Company Act of 1940, as amended. The committee
periodically reviews such issues as the Board's composition, responsibilities,
committees, compensation and other relevant issues, and recommends any
appropriate changes to the full Board of Directors. While the committee normally
is able to identify from its own resources an ample number of qualified
candidates, it will consider shareholder suggestions of persons to be considered
as nominees to fill future vacancies on the Board. Such suggestions must be sent
in writing to the Committee on Governance of the Registrant, c/o the
Registrant's Secretary, and must be accompanied by complete biographical and
occupational data on the prospective nominee, along with a written consent of
the prospective nominee for consideration of his or her name by the Committee on
Governance.
ITEM 11 - Controls and Procedures
(a) The Registrant's Principal Executive Officer and Principal Financial
Officer have concluded, based on their evaluation of the Registrant's
disclosure controls and procedures (as such term is defined in Rule 30a-3
under the Investment Company Act of 1940), that such controls and
procedures are adequate and reasonably designed to achieve the purposes
described in paragraph (c) of such rule.
(b) There were no changes in the Registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of
1940) that occurred during the Registrant's second fiscal quarter of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the Registrant's internal control
over financial reporting.
ITEM 12 - Exhibits
(a) (1) The Code of Ethics - not applicable for filing of Semiannual Reports to
Shareholders.
(a) (2) The certifications required by Rule 30a-2 of the Investment Company Act
of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of
2002 are attached as exhibits hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SMALLCAP WORLD FUND, INC.
By /s/ Gordon Crawford
- ---------------------------------
Gordon Crawford, Chairman and PEO
Date: June 8, 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/ Gordon Crawford
- ---------------------------------
Gordon Crawford, Chairman and PEO
Date: June 8, 2005
By /s/ David A. Pritchett
- -------------------------------------
David A. Pritchett, Treasurer and PFO
Date: June 8, 2005