<PAGE>


                                AMCAP Fund/(R)/

                                   Prospectus

<TABLE>
<CAPTION>
         TABLE OF CONTENTS
-----------------------------------------------------
<S>      <S>
  1       Risk/Return Summary
-----------------------------------------------------
  4       Fees and Expenses of the Fund
-----------------------------------------------------
  5       Investment Objective, Strategies and Risks
-----------------------------------------------------
  8       Management and Organization
-----------------------------------------------------
  9       Shareholder Information
-----------------------------------------------------
10        Choosing a Share Class
-----------------------------------------------------
12        Purchase and Exchange of Shares
-----------------------------------------------------
13        Sales Charges
-----------------------------------------------------
15        Sales Charge Reductions and Waivers
-----------------------------------------------------
16        Plans of Distribution
-----------------------------------------------------
17        How to Sell Shares
-----------------------------------------------------
18        Distributions and Taxes
-----------------------------------------------------
19        Financial Highlights
-----------------------------------------------------
</TABLE>


                                 MARCH 15, 2001


 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
 OR DISAPPROVED OF THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS
 PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
 A CRIMINAL OFFENSE.

<PAGE>



<PAGE>

 RISK/RETURN SUMMARY

 The fund seeks to make your investment grow over time by investing primarily in
 stocks of U.S. companies with a record of above average long-term growth.

 The fund is designed for investors seeking capital appreciation through
 investments in stocks.  Investors in the fund should have a long-term
 perspective and be able to tolerate potentially wide price fluctuations. An
 investment in the fund is subject to risks, including the possibility that the
 fund's income and the value of its investments may fluctuate in response to
 economic, political or social events in the U.S. or abroad. The values of
 equity securities owned by the fund may be affected by events specifically
 involving the companies issuing those securities.

 Your investment in the fund is not a bank deposit and is not insured or
 guaranteed by the Federal Deposit Insurance Corporation or any other government
 agency, entity or person.

 YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS IS GREATER
 IF YOU INVEST FOR A SHORTER PERIOD OF TIME.


                                       1

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 HISTORICAL INVESTMENT RESULTS

 The following information provides some indication of the risks of investing in
 the fund by showing changes in the fund's investment results from year to year
 and by showing how the fund's average annual returns for various periods
 compare with those of a broad measure of market performance. Past results are
 not an indication of future results.



                 CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
   (Results do not include a sales charge; if one were included, results would
                                   be lower.)
  [bar chart]
 1991   36.88%
 1992    7.19%
 1993   11.01%
 1994   -0.24%
 1995   28.71%
 1996   14.16%
 1997   30.55%
 1998   30.02%
 1999   21.78%
 2000    7.50%
 [end bar chart]


    The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
        <S>                  <C>     <C>
        HIGHEST              22.00%  (quarter ended December 31, 1998)
        LOWEST               -8.62%  (quarter ended September 30, 1998)
</TABLE>


                                       2

AMCAP FUND / PROSPECTUS



<PAGE>



 Unlike the bar chart on the previous page, the table below reflects the fund's
 results with the maximum initial or deferred sales charge imposed, as required
 by Securities and Exchange Commission rules. Class A share results reflect the
 maximum initial sales charge of 5.75%. Sales charges are reduced for purchases
 of $25,000 or more. Results would be higher if calculated without a sales
 charge. All fund results reflect the reinvestment of dividend and capital gain
 distributions.

 Since the fund's Class B shares began investment operations on March 15, 2000
 and Class C and F shares began investment operations on March 15, 2001,
 comparable results for those classes are not available for the 2000 calendar
 year.
<TABLE>
<CAPTION>
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING DECEMBER 31, 2000:
 ------------------------------------------------------------------------------
                                    ONE YEAR  FIVE YEARS  TEN YEARS   LIFETIME
 <S>                                <C>       <C>         <C>        <C>
 Class A - began 5/1/67
 (with the maximum sales charge       1.29%     19.05%     17.46%      13.67%
 imposed)
 ------------------------------------------------------------------------------
 S&P 500/1/                          -9.11%     18.29%     17.41%      12.02%
 ------------------------------------------------------------------------------
 Consumer Price Index/2/              3.39%      2.54%      2.66%       5.05%
 ------------------------------------------------------------------------------
</TABLE>


 1 The Standard & Poor's 500 Composite Index is a market capitalization-weighted
  measurement of changes in stock market conditions based on the average
  weighted performance of 500 widely held common stocks. This index is unmanaged
  and does not reflect sales charges, commissions or expenses.
 2 The Consumer Price Index is a measure of inflation and is computed from data
  supplied by the U.S. Department of Labor, Bureau of Labor Statistics.


                                       3

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 FEES AND EXPENSES OF THE FUND

 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)

<TABLE>
<CAPTION>
                                                      CLASS A   CLASS B   CLASS C    CLASS F
 --------------------------------------------------------------------------------------------
 <S>                                                  <C>       <C>       <C>       <C>
 Maximum sales charge imposed on purchases (as a       5.75%/1/  none      none       none
 percentage of offering price)
 --------------------------------------------------------------------------------------------
 Maximum sales charge imposed on reinvested            none      none      none       none
 dividends
 --------------------------------------------------------------------------------------------
 Maximum deferred sales charge                        none/2/    5.00%/3/  1.00%/4/   none
 --------------------------------------------------------------------------------------------
 Redemption or exchange fees                           none      none      none       none
 --------------------------------------------------------------------------------------------
</TABLE>
 1 Sales charges are reduced or eliminated for purchases of $25,000 or more.
 2 A contingent deferred sales charge of 1% applies on certain redemptions made
  within 12 months following purchases of $1 million or more made without a
  sales charge.
 3 Deferred sales charges are reduced after 12 months and eliminated after six
  years.
 4 Deferred sales charge is eliminated after 12 months.

 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)

<TABLE>
<CAPTION>
                                                           CLASS A  CLASS B/1/  CLASS C/1/   CLASS F/1/
 -------------------------------------------------------------------------------------------------------
 <S>                                                       <C>      <C>         <C>         <C>
 Management Fees                                            0.37%     0.37%       0.37%        0.37%
 -------------------------------------------------------------------------------------------------------
 Distribution and/or Service (12b-1) Fees/2/                0.23%     1.00%       1.00%        0.25%
 -------------------------------------------------------------------------------------------------------
 Other Expenses                                             0.08%     0.08%       0.18%        0.17%
 -------------------------------------------------------------------------------------------------------
 Total Annual Fund Operating Expenses                       0.68%     1.45%       1.55%        0.79%
 -------------------------------------------------------------------------------------------------------
</TABLE>

 1 Based on estimated amounts for the current fiscal year.
 2 Class A and F 12b-1 fees may not exceed 0.25% and 0.50%, respectively, of the
  class' average net assets annually.

 EXAMPLE

 The examples below are intended to help you compare the cost of investing in
 the fund with the cost of investing in other mutual funds. The examples assume
 that you invest $10,000 in the fund for the time periods indicated, that your
 investment has a 5% return each year and that the fund's operating expenses
 remain the same as shown above.  The "Class A" example reflects the maximum
 initial sales charge in the first year. The "Class B- and Class C-assuming
 redemption" examples reflect applicable contingent deferred sales charges
 through six years and one year, respectively (after which times they are
 eliminated). The examples do not include fees charged by financial
 intermediaries, typically applicable mainly to Class F shares. Both Class B
 examples reflect Class A expenses for years 9 and 10 since Class B shares
 automatically convert to Class A after eight years. Although your actual costs
 may be higher or lower, based on these assumptions, your cumulative expenses
 would be:

<TABLE>
<CAPTION>
                                             ONE YEAR         THREE YEARS         FIVE YEARS         TEN YEARS
 <S>                                      <C>              <C>                 <C>                <C>
 Class A                                       $640               $780               $932              $1,373
 ----------------------------------------------------------------------------------------------------------------------------------
 Class B - assuming redemption                 $648               $859               $992              $1,526
 -------------------------------------------------------------------------------------------------------------------
 Class B - assuming no redemption              $148               $459               $792              $1,526
 -------------------------------------------------------------------------------------------------------------------
 Class C - assuming redemption                 $258               $490               $845              $1,845
 -------------------------------------------------------------------------------------------------------------------
 Class C - assuming no redemption              $158               $490               $845              $1,845
 -------------------------------------------------------------------------------------------------------------------
 Class F - excludes intermediary fees/*/       $ 81               $252               $439              $  978
 -------------------------------------------------------------------------------------------------------------------
 *Fees charged by financial intermediaries are independent of fund expenses and will increase the overall cost of
  your investment.  Intermediary fees typically range from 0.50% to 3.00% of assets annually depending on services
  offered.
</TABLE>



                                       4

AMCAP FUND / PROSPECTUS



<PAGE>

 INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

 The fund's investment objective is to provide you with long-term growth of
 capital.  It invests primarily in common stocks of issuers located in the U.S.

 The values of equity securities held by the fund may decline in response to
 certain events, including those directly involving the companies whose
 securities are owned in the fund, adverse conditions affecting the general
 economy, overall market declines, world political, social and economic
 instability, and currency and interest rate fluctuations. The growth-oriented,
 equity-type securities generally purchased by the fund may involve large price
 swings and potential for loss.

 The fund may also hold cash or money market instruments. The size of the fund's
 cash position will vary and will depend on various factors, including market
 conditions and purchases and redemptions of fund shares. A larger cash position
 could detract from the achievement of the fund's objective, but it also would
 reduce the fund's exposure in the event of a market downturn and provide
 liquidity to make additional investments or to meet redemptions.

 The fund relies on the professional judgment of its investment adviser, Capital
 Research and Management Company, to make decisions about the fund's portfolio
 investments. The basic investment philosophy of the investment adviser is to
 seek undervalued securities that represent good long-term investment
 opportunities. Securities may be sold when the investment adviser believes they
 no longer represent good long-term value.


                                       5

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 ADDITIONAL INVESTMENT RESULTS

 Unlike the investment results table shown on an earlier page, the table below
 reflects the fund's results calculated without a sales charge.


<TABLE>
<CAPTION>
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2000:
                                    ONE YEAR  FIVE YEARS  TEN YEARS   LIFETIME
 <S>                                <C>       <C>         <C>        <C>
 Class A - began 5/1/67               7.50%     20.46%     18.16%      13.87%
 (with no sales charge imposed)
 ------------------------------------------------------------------------------
 S&P 500/1/                          -9.11%     18.29%     17.41%      12.02%
 ------------------------------------------------------------------------------
 Lipper Multi-Cap Core Funds         -2.96%     16.23%     16.63%      11.41%
 Average/2/
 ------------------------------------------------------------------------------
 S&P MidCap 400 Index/3/             17.50%     20.41%     19.86%        N/A
 ------------------------------------------------------------------------------
</TABLE>


 1 The Standard & Poor's 500 Composite Index is a market capitalization-weighted
  measurement of changes in stock market conditions based on the average
  weighted performance of 500 widely held common stocks. This index is unmanaged
  and does not reflect sales charges, commissions or expenses.
 2 The Lipper Multi-Cap Core Funds Average consists of funds which, by portfolio
  practice, invest in a variety of market capitalization ranges. Multi-Cap Core
  Funds have wide latitude in the companies in which they invest. These funds
  will normally have an average price-to-earnings ratio when compared to the
  U.S. diversified multi-cap equity funds universe. The results of the
  underlying funds in the average include the reinvestment of dividend and
  capital gain distributions and brokerage commissions paid by the funds for
  portfolio transactions but do not reflect sales charges.
 3 The Standard & Poor's MidCap 400 Index consists of 400 domestic stocks chosen
  for market size, liquidity, and industry group representation.  MidCap
  companies represented in this index typically have market capitalizations
  between $1-$5 billion. It is a market-value weighted index (stock price times
  shares outstanding), with each stock affecting the index in proportion to its
  market value. This index is unmanaged and does not reflect sales charges,
  commissions or expenses. This index was not in existence as of the date the
  fund's Class A shares began investment operations; therefore, lifetime results
  are not available.


                                       6

AMCAP FUND / PROSPECTUS



<PAGE>



 HOLDINGS BY INDUSTRY AS OF FEBRUARY 29, 2000

 [pie chart]
 Data Processing & Reproduction 12.42%
 Electronic Components 10.94%
 Broadcasting & Publishing 10.12%
 Business Services 9.48%
 Health & Personal Care 7.90%
 Other Industries 32.89%
 Cash & Cash Equivalents 16.25%
 [end pie chart]

<TABLE>
<CAPTION>
                                                              PERCENT OF
 LARGEST INDIVIDUAL EQUITY HOLDINGS AS OF FEBRUARY 29, 2000   NET ASSETS
 -------------------------------------------------------------------------
 <S>                                                         <C>
 Medtronic                                                       3.41%
 -------------------------------------------------------------------------
 Time Warner                                                     2.94
 -------------------------------------------------------------------------
 Texas Instruments                                               2.75
 -------------------------------------------------------------------------
 Robert Half International                                       2.54
 -------------------------------------------------------------------------
 Viacom                                                          2.47
 -------------------------------------------------------------------------
 Cisco Systems                                                   2.00
 -------------------------------------------------------------------------
 AT&T Liberty Media Group                                        1.96
 -------------------------------------------------------------------------
 Computer Associates International                               1.90
 -------------------------------------------------------------------------
 Lexmark International Group                                     1.89
 -------------------------------------------------------------------------
 Analog Devices                                                  1.78
</TABLE>



 Because the fund is actively managed, its holdings will change from time to
 time.


                                       7

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 MANAGEMENT AND ORGANIZATION

 INVESTMENT ADVISER

 Capital Research and Management Company, an experienced investment management
 organization founded in 1931, serves as investment adviser to the fund and
 other funds, including those in The American Funds Group. Capital Research and
 Management Company, a wholly owned subsidiary of The Capital Group Companies,
 Inc., is headquartered at 333 South Hope Street, Los Angeles, CA 90071. Capital
 Research and Management Company manages the investment portfolio and business
 affairs of the fund. The total management fee paid by the fund, as a percentage
 of average net assets, for the previous fiscal year appears earlier under "Fees
 and Expenses of the Fund."

 MULTIPLE PORTFOLIO COUNSELOR SYSTEM

 Capital Research and Management Company uses a system of multiple portfolio
 counselors in managing mutual fund assets. Under this approach the portfolio of
 a fund is divided into segments managed by individual counselors. Counselors
 decide how their respective segments will be invested, within the limits
 provided by a fund's objective(s) and policies and by Capital Research and
 Management Company's investment committee. In addition, Capital Research and
 Management Company's research professionals may make investment decisions with
 respect to a portion of a fund's portfolio. The primary individual portfolio
 counselors for AMCAP Fund are:



<TABLE>
<CAPTION>
 PORTFOLIO COUNSELOR/ FUND                             PRIMARY TITLE WITH INVESTMENT ADVISER
 TITLE (IF APPLICABLE)           COUNSELOR SINCE       (OR AFFILIATE) AND INVESTMENT EXPERIENCE
 ------------------------------------------------------------------------------------------------------
 <S>                          <C>                     <C>
 R. MICHAEL SHANAHAN                   1986            Chairman of the Board and Principal Executive
 Chairman of the Board and                             Officer, Capital Research and Management Company
 Principal Executive Officer                           Investment professional with Capital Research
                                                       and Management Company or affiliate since 1965

 ------------------------------------------------------------------------------------------------------
 CLAUDIA P. HUNTINGTON         1996 (14 years as a     Senior Vice President, Capital Research and
 President and Director       research professional    Management Company
                                  for the fund)        Capital Research and Management Company or
                                                       affiliate since 1975
 ------------------------------------------------------------------------------------------------------
 TIMOTHY D. ARMOUR              1996 (8 years as a     Chairman and Chief Executive Officer, Capital
 Senior Vice President        research professional    Research Company
                                   for the fund)       Investment professional with Capital Research
                                                       and Management Company or affiliate since 1983
 ------------------------------------------------------------------------------------------------------
 C. ROSS SAPPENFIELD            1999 (6 years as a     Vice President, Capital Research Company
 Vice President               research professional    Investment professional with Capital Research
                                  for the fund)        and Management Company or affiliate since 1992
 ------------------------------------------------------------------------------------------------------
</TABLE>




                                       8

AMCAP FUND / PROSPECTUS



<PAGE>

 SHAREHOLDER INFORMATION

 SHAREHOLDER SERVICES

 American Funds Service Company, the fund's transfer agent, offers you a wide
 range of services you can use to alter your investment program should your
 needs and circumstances change. These services may be terminated or modified at
 any time upon 60 days written notice. For your convenience, American Funds
 Service Company has four service centers across the country.

                  AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS

                     Call toll-Free from anywhere in the U.S.
                               (8 a.m. to 8 p.m. ET):
                                   800/421-0180

                             [map of the United States]

<TABLE>
<CAPTION>
<S>                <C>                 <C>                    <C>
Western            Western Central     Eastern Central        Eastern
Service Center     Service Center      Service Center         Service Center
American Funds     American Funds      American Funds         American Funds
Service Company    Service Company     Service Company        Service Company
P.O. Box 2205      P.O. Box 659522     P.O. Box 6007          P.O. Box 2280
Brea, California   San Antonio, Texas  Indianapolis, Indiana  Norfolk, Virginia
92822-2205         78265-9522          46206-6007             23501-2280
Fax: 714/671-7080  Fax: 210/474-4050   Fax: 317/735-6620      Fax: 757/670-4773
</TABLE>


 A MORE DETAILED DESCRIPTION OF POLICIES AND SERVICES IS INCLUDED IN THE FUND'S
 STATEMENT OF ADDITIONAL INFORMATION AND THE OWNER'S GUIDE SENT TO NEW AMERICAN
 FUNDS SHAREHOLDERS TITLED "WELCOME TO THE FAMILY." Both are available by
 writing or calling American Funds Service Company.


                                       9

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 CHOOSING A SHARE CLASS

 The fund offers four different classes of shares.  Each share class represents
 investments in the same portfolio of securities, but each class has its own
 sales charge and expense structure, allowing you to choose the class that best
 meets your situation. WHEN YOU PURCHASE SHARES OF THE FUND, YOU MUST CHOOSE A
 SHARE CLASS.  IF NONE IS CHOSEN, YOUR INVESTMENT WILL BE MADE IN CLASS A
 SHARES.

 Shares of the fund may be purchased through various investment programs or
 accounts, including many types of retirement plans.  The services or share
 classes available to you may vary depending upon how you wish to purchase
 shares of the fund.

 Factors you should consider in choosing a class of shares include:

 . How long you expect to own the shares

 . How much you intend to invest

 . Total expenses associated with owning shares of each class

 . Whether you qualify for any reduction or waiver of sales charges (for
  example, Class A shares may be a less expensive option over time if you
  qualify for a sales charge reduction or waiver)

 . Class B and C shares generally are not available to certain retirement plans,
  including employer-sponsored retirement plans such as 401(k) plans,
  employer-sponsored 403(b) plans, and money purchase pension and profit sharing
  plans

 . Class F shares are generally only available to fee-based programs of
  investment firms and registered investment advisers that have special
  agreements with the fund's distributor

 EACH INVESTOR'S FINANCIAL CONSIDERATIONS ARE DIFFERENT.  YOU SHOULD SPEAK WITH
 YOUR FINANCIAL ADVISER TO HELP YOU DECIDE WHICH SHARE CLASS IS BEST FOR YOU.


                                       10

AMCAP FUND / PROSPECTUS



<PAGE>

 SUMMARY OF THE PRIMARY DIFFERENCES AMONG SHARE CLASSES

<TABLE>
<CAPTION>
  CLASS A SHARES
 ------------------------------------------------------------------------------
 <S>                         <S>
  Initial sales charge        up to 5.75% (reduced or eliminated for purchases
                              of $25,000 or more)
  Contingent deferred sales   none (except on certain redemptions on purchases
  charge                      of $1 million or more bought without an initial
                              sales charge)
  12b-1 fees                  up to 0.25% annually
  Dividends                   higher than other classes due to lower annual
                              expenses
  Purchase maximum            none
  Conversion                  none
  CLASS B SHARES
 ------------------------------------------------------------------------------
  Initial sales charge        none
  Contingent deferred sales   starts at 5.00% and declines each year until it
  charge                      reaches 0% after six years
  12b-1 fees                  1.00% annually
  Dividends                   lower than Class A and F shares due to higher
                              distribution fees and other expenses
  Purchase maximum            $100,000
  Conversion                  automatic conversion to Class A shares after
                              eight years, reducing future annual expenses
  CLASS C SHARES
 ------------------------------------------------------------------------------
  Initial sales charge        none
  Contingent deferred sales   1.00% if shares are sold within one year after
  charge                      being purchased
  12b-1 fees                  1.00% annually
  Dividends                   lower than Class A and F shares due to higher
                              distribution fees and other expenses
  Purchase maximum            $500,000
  Conversion                  automatic conversion to Class F shares after ten
                              years, reducing future annual expenses
  CLASS F SHARES
 ------------------------------------------------------------------------------
  Initial sales charge        none
  Contingent deferred sales   none
  charge
  12b-1 fees                  currently 0.25% annually (may not exceed 0.50%
                              annually)
  Dividends                   higher than Class B and C shares due to lower
                              distribution fees, but typically lower than Class
                              A shares due to higher other expenses
  Purchase maximum            none
  Conversion                  none
 ------------------------------------------------------------------------------
</TABLE>



                                       11

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 PURCHASE AND EXCHANGE OF SHARES

 PURCHASE OF CLASS A, B AND C SHARES

 Generally, you may open an account and purchase Class A, B and C shares by
 contacting any investment dealer (who may impose transaction charges in
 addition to those described in this prospectus) authorized to sell the fund's
 shares. You may purchase additional shares in various ways, including through
 your investment dealer and by mail, telephone, the Internet and bank wire.

 PURCHASE OF CLASS F SHARES

 Generally, you may only open an account and purchase Class F shares through
 fee-based programs of investment firms and registered investment advisers with
 special agreements with the fund's distributor. These firms and advisers
 typically charge ongoing fees for services they provide.

 EXCHANGE

 Generally, you may exchange your shares into shares of the same class of other
 funds in The American Funds Group without a sales charge. For purposes of
 computing the contingent deferred sales charge on Class B and C shares, the
 length of time you have owned your shares will be measured from the date of
 original purchase and will not be affected by any exchange.

 Exchanges of shares from the money market funds initially purchased without a
 sales charge generally will be subject to the appropriate sales charge.
 Exchanges have the same tax consequences as ordinary sales and purchases. See
 "Transactions by Telephone..." for information regarding electronic exchanges.

 THE FUND AND AMERICAN FUNDS DISTRIBUTORS, THE FUND'S DISTRIBUTOR, RESERVE THE
 RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON, INCLUDING PURCHASES WHICH
 ARE PART OF EXCHANGE ACTIVITY THAT COULD INVOLVE ACTUAL OR POTENTIAL HARM TO
 THE FUND.


<TABLE>
<CAPTION>
 PURCHASE MINIMUMS FOR ALL CLASSES OF SHARES
 <S>                                                           <C>
 To establish an account (including retirement plan accounts)   $    250
   For a retirement plan account through payroll deduction      $     25
 To add to an account                                           $     50
   For a retirement plan account through payroll deduction      $     25
 ------------------------------------------------------------------------
 PURCHASE MAXIMUM FOR CLASS B SHARES                            $100,000
 ------------------------------------------------------------------------
 PURCHASE MAXIMUM FOR CLASS C SHARES                            $500,000
 ------------------------------------------------------------------------
</TABLE>



                                       12

AMCAP FUND / PROSPECTUS



<PAGE>

 SHARE PRICE

 The fund calculates its share price, also called net asset value, as of
 approximately 4:00 p.m. New York time, which is the normal close of trading on
 the New York Stock Exchange, every day the Exchange is open. In calculating net
 asset value, market prices are used when available. The fund has adopted
 procedures to make "fair value" determinations when reliable market prices for
 particular securities are not available.

 Your shares will be purchased at the net asset value (plus any applicable sales
 charge in the case of Class A shares), or sold at the net asset value next
 determined after American Funds Service Company receives and accepts your
 request. A contingent deferred sales charge may apply at the time you sell
 certain Class A, B and C shares.

 SALES CHARGES

 CLASS A

 The initial sales charge you pay when you buy Class A shares differs depending
 upon the amount you invest and may be reduced or eliminated for larger
 purchases as indicated below.


<TABLE>
<CAPTION>
                             SALES CHARGE AS A PERCENTAGE OF
                             ----------------------------------
                                                                    DEALER
                                                    NET           COMMISSION
                                OFFERING          AMOUNT           AS % OF
 INVESTMENT                       PRICE          INVESTED       OFFERING PRICE
 ------------------------------------------------------------------------------
 <S>                         <C>              <C>              <C>
 Less than $25,000                5.75%            6.10%            5.00%
 ------------------------------------------------------------------------------
 $25,000 but less than            5.00%            5.26%            4.25%
 $50,000
 ------------------------------------------------------------------------------
 $50,000 but less than            4.50%            4.71%            3.75%
 $100,000
 ------------------------------------------------------------------------------
 $100,000 but less than           3.50%            3.63%            2.75%
 $250,000
 ------------------------------------------------------------------------------
 $250,000 but less than           2.50%            2.56%            2.00%
 $500,000
 ------------------------------------------------------------------------------
 $500,000 but less than           2.00%            2.04%            1.60%
 $750,000
 ------------------------------------------------------------------------------
 $750,000 but less than $1        1.50%            1.52%            1.20%
 million
 ------------------------------------------------------------------------------
 $1 million or more and
 certain other investments        none             none             none
 described below
 ------------------------------------------------------------------------------
</TABLE>


 CLASS A PURCHASES NOT SUBJECT TO SALES CHARGE

 INVESTMENTS OF $1 MILLION OR MORE MAY BE SUBJECT TO A 1% CONTINGENT DEFERRED
 SALES CHARGE IF SHARES ARE SOLD WITHIN ONE YEAR OF PURCHASE.
  Employer-sponsored defined contribution-type plans investing $1 million or
 more, or with 100 or more eligible employees, and Individual Retirement Account
 rollovers involving retirement plan assets invested in the American Funds, may
 invest with no sales charge and are not subject to a contingent deferred sales
 charge.  Also exempt are investments made through retirement plans, endowments
 or


                                       13

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 foundations with $50 million or more in assets, and investments made through
 accounts that purchased fund shares before March 15, 2001 and are part of
 certain qualified fee-based programs. The distributor may pay dealers up to 1%
 on investments made in Class A shares with no initial sales charge. The fund
 may reimburse the distributor for these payments through its Plan of
 Distribution (see below).

 CLASS B AND C

 Class B and C shares are sold without any initial sales charge.  American Funds
 Distributors pays 4% of the amount invested to dealers who sell Class B shares
 and 1% to dealers who sell Class C shares.

 For Class C shares, a contingent deferred sales charge of 1% applies if shares
 are sold within one year of purchase.  For Class B shares, a contingent
 deferred sales charge may be applied to shares you sell within six years of
 purchase, as shown in the table below.

<TABLE>
<CAPTION>
 <S>                                   <C>  <C>  <C>  <C>  <C>  <C>
 CLASS B SHARES SOLD WITHIN YEAR       1    2    3    4    5     6
 --------------------------------------------------------------------
 CONTINGENT DEFERRED SALES CHARGE      5%   4%   4%   3%   2%    1%
</TABLE>


 Shares acquired through reinvestment of dividends or capital gain distributions
 are not subject to a contingent deferred sales charge.  In addition, the
 contingent deferred sales charge may be waived in certain circumstances.  See
 "Contingent Deferred Sales Charge Waivers for Class B and C Shares" below.  The
 contingent deferred sales charge is based on the original purchase cost or the
 current market value of the shares being sold, whichever is less.  For purposes
 of determining the contingent deferred sales charge, if you sell only some of
 your shares, shares that are not subject to any contingent deferred sales
 charge will be sold first and then shares that you have owned the longest.

 See "Plans of Distribution" below for ongoing compensation paid to your dealer
 or financial adviser for all share classes.

 CONVERSION OF CLASS B AND C SHARES

 Class B shares automatically convert to Class A shares in the month of the
 eight-year anniversary of the purchase date.  Class C shares automatically
 convert to Class F shares in the month of the ten-year anniversary of the
 purchase date.  The Internal Revenue Service currently takes the position that
 these automatic conversions are not taxable. Should their position change,
 shareholders would still have the option of converting but may face certain tax
 consequences.


                                       14

AMCAP FUND / PROSPECTUS



<PAGE>

 SALES CHARGE REDUCTIONS AND WAIVERS

 You must let your investment dealer or American Funds Service Company know if
 you qualify for a reduction in your Class A sales charge or waiver of your
 Class B or C contingent deferred sales charge.

 REDUCING YOUR CLASS A SALES CHARGE

 You and your "immediate family" (your spouse and your children under the age of
 21) may combine investments to reduce your Class A sales charge.

 AGGREGATING ACCOUNTS

 To receive a reduced Class A sales charge, investments made by you and your
 immediate family (see above) may be aggregated if made for your own account(s)
 and/or, for instance:

 . trust accounts established by the above individuals. However, if the
  person(s) who established the trust is deceased, the trust account may be
  aggregated with accounts of the person who is the primary beneficiary of the
  trust.

 . solely controlled business accounts.

 . single-participant retirement plans.

 CONCURRENT PURCHASES

 You may combine simultaneous purchases of any class of shares of two or more
 American Funds, as well as individual holdings in various American Legacy
 variable annuities or variable life insurance policies, to qualify for a
 reduced Class A sales charge.  Direct purchases of money market funds are
 excluded.

 RIGHTS OF ACCUMULATION

 You may take into account the current value (or if greater, the amount you
 invested less any withdrawals) of your existing holdings in any class of shares
 of the American Funds, as well as individual holdings in various American
 Legacy variable annuities or variable life insurance policies, to determine
 your Class A sales charge. Direct purchases of money market funds are excluded.

 STATEMENT OF INTENTION

 You can reduce the sales charge you pay on your Class A share purchases by
 establishing a Statement of Intention. A Statement of Intention allows you to
 combine all non-money market fund purchases of all share classes, as well as
 individual American Legacy variable annuity and life insurance policies you
 intend to make over a 13-month period, to determine the applicable sales
 charge. At your request, purchases made during the previous 90 days may be
 included; however, capital appreciation and reinvested dividends and capital
 gains do not apply toward these combined purchases. A portion of your account
 may be held in escrow to cover additional Class A sales charges which may be
 due if your total investments over the 13-month period do not qualify for the
 applicable sales charge reduction.


                                       15

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 CONTINGENT DEFERRED SALES CHARGE WAIVERS FOR CLASS B AND C SHARES

 The contingent deferred sales charge on Class B and C shares may be waived in
 the following cases:

 . when receiving payments through systematic withdrawal plans (up to 12% of the
  value of each fund account);

 . when receiving required minimum distributions from retirement accounts upon
  reaching age 70 1/2; or

 . for redemptions due to death or post-purchase disability of the shareholder.

 PLANS OF DISTRIBUTION

 The fund has Plans of Distribution or "12b-1 Plans" under which it may finance
 activities primarily intended to sell shares, provided the categories of
 expenses are approved in advance by the fund's board of directors. The plans
 provide for annual expenses of up to 0.25% for Class A shares, 1.00% for Class
 B and C shares, and up to 0.50% for Class F shares. For all share classes, up
 to 0.25% of these expenses may be used to pay service fees to qualified dealers
 for providing certain shareholder services.  The remaining expense for each
 share class may be used for distribution expenses.

 The 12b-1 fees paid by the fund, as a percentage of average net assets, for the
 previous fiscal year are indicated earlier under "Fees and Expenses of the
 Fund." Since these fees are paid out of the fund's assets or income on an
 ongoing basis, over time they will increase the cost and reduce the return of
 an investment. The higher fees for Class B and C shares may cost you more over
 time than paying the initial sales charge for Class A shares.

 OTHER COMPENSATION TO DEALERS

 American Funds Distributors may pay, or sponsor informational meetings for,
 dealers as described in the statement of additional information.


                                       16

AMCAP FUND / PROSPECTUS



<PAGE>

 HOW TO SELL SHARES

 Once a sufficient period of time has passed to reasonably assure that checks or
 drafts (including certified or cashiers' checks) for shares purchased have
 cleared (normally 15 calendar days), you may sell (redeem) those shares in any
 of the following ways:

 THROUGH YOUR DEALER OR FINANCIAL ADVISER (CERTAIN CHARGES MAY APPLY)

 . Shares held for you in your dealer's name must be sold through the dealer.

 . Class F shares must be sold through your dealer or financial adviser.

 WRITING TO AMERICAN FUNDS SERVICE COMPANY

 . Requests must be signed by the registered shareholder(s).

 . A signature guarantee is required if the redemption is:

     -- Over $50,000;

     -- Made payable to someone other than the registered shareholder(s); or

     -- Sent to an address other than the address of record, or an address of
      record which has been changed within the last 10 days.

 . American Funds Service Company reserves the right to require signature
  guarantee(s) on any redemptions.

 . Additional documentation may be required for sales of shares held in
  corporate, partnership or fiduciary accounts.

 TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
 FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/:

 . Redemptions by telephone, fax, or computer (including American FundsLine and
  American FundsLine OnLine) are limited to $50,000 per shareholder each day.

 . Checks must be made payable to the registered shareholder.

 . Checks must be mailed to an address of record that has been used with the
  account for at least 10 days.

 TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE OR FUNDSLINE ONLINE

 Generally, you are automatically eligible to use these services for redemptions
 and exchanges unless you notify us in writing that you do not want any or all
 of these services. You may reinstate these services at any time.

 Unless you decide not to have telephone, fax, or computer services on your
 account(s), you agree to hold the fund, American Funds Service Company, any of
 its affiliates or mutual funds managed by such affiliates, and each of their
 respective directors, trustees, officers, employees and agents harmless from
 any losses, expenses, costs or liabilities (including attorney fees) which may
 be incurred in connection with the exercise of these privileges, provided
 American Funds Service Company employs reasonable procedures to confirm that
 the instructions received from any person with appropriate account information
 are genuine. If reasonable procedures are not employed, it and/or the fund may
 be liable for losses due to unauthorized or fraudulent instructions.


                                       17

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 DISTRIBUTIONS AND TAXES

 DIVIDENDS AND DISTRIBUTIONS

 The fund intends to distribute dividends to you, usually twice a year. Capital
 gains, if any, are usually distributed twice a year. When a dividend or capital
 gain is distributed, the net asset value per share is reduced by the amount of
 the payment.

 You may elect to reinvest dividends and/or capital gain distributions to
 purchase additional shares of this fund or any other American Fund, or you may
 elect to receive them in cash. Most shareholders do not elect to take capital
 gain distributions in cash because these distributions reduce principal value.

 TAXES ON DISTRIBUTIONS

 Distributions you receive from the fund may be subject to income tax and may
 also be subject to state or local taxes - unless you are exempt from taxation.

 For federal tax purposes, any taxable dividends and distributions of short-term
 capital gains are treated as ordinary income. The fund's distributions of net
 long-term capital gains are taxable to you as long-term capital gains. Any
 taxable distributions you receive from the fund will normally be taxable to you
 when made, regardless of whether you reinvest distributions or receive them in
 cash.

 TAXES ON TRANSACTIONS

 Your redemptions, including exchanges, may result in a capital gain or loss for
 federal tax purposes. A capital gain or loss on your investment is the
 difference between the cost of your shares, including any sales charges, and
 the price you receive when you sell them.

 Please see your tax adviser for further information.


                                       18

AMCAP FUND / PROSPECTUS



<PAGE>

FINANCIAL HIGHLIGHTS/1/

The financial highlights table is intended to help you understand the fund's
results for the past five years and is currently only shown for Class A and B
shares.  A similar table will be shown for Class C and F shares beginning with
the fund's 2002 fiscal year end. Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information, for Class A
shares, has been audited by Deloitte & Touche LLP, except for the period ended
August 31, 2000, whose report, along with the fund's financial statements, is
included in the statement of additional information, which is available upon
request.

<TABLE>
<CAPTION>
                                         Net gains on
               Net asset                  securities                Dividends
                 value,        Net      (both realized  Total from  (from net   Distributions                   Net asset
              beginning of  investment       and        investment  investment  (from capital      Total      value, end of
Period ended     period       income     unrealized)    operations   income)       gains)      distributions     period
-----------------------------------------------------------------------------------------------------------------------------
<S>           <C>           <C>         <C>             <C>         <C>         <C>            <C>            <C>
  CLASS A:
8/31/2000/2/     $19.00       $.10/3/       $1.62/3/      $1.72        -           $(1.05)        $(1.05)        $19.67
    2000          17.84        .13           3.61          3.74       $(.10)        (2.48)         (2.58)         19.00
    1999          16.93        .12           3.21          3.33        (.13)        (2.29)         (2.42)         17.84
    1998          14.60        .10           4.80          4.90        (.10)        (2.47)         (2.57)         16.93
    1997          14.40        .12           1.51          1.63        (.12)        (1.31)         (1.43)         14.60
    1996          12.28        .16           3.32          3.48        (.17)        (1.19)         (1.36)         14.40

  CLASS B:
8/31/2000/2/      19.06        .03/3/        1.55/3/       1.58        -            (1.05)         (1.05)         19.59
<CAPTION>

                                            Ratio of     Ratio of
                             Net assets,   expenses to   income to
                            end of period  average net  average net     Portfolio
Period ended  Total return  (in millions)    assets       assets      turnover rate
------------------------------------------------------------------------------------
<S>           <C>           <C>            <C>          <C>          <C>
  CLASS A:
8/31/2000/2/      9.35%        $7,787         .68%/4/     1.03%/4/       16.67%/5/
    2000         22.30          7,270         .68          .72           34.36
    1999         21.07          5,939         .67          .70           36.46
    1998         36.97          4,891         .68          .62           31.42
    1997         11.74          3,807         .69          .81           24.14
    1996         29.29          3,693         .71         1.16           35.16

  CLASS B:
8/31/2000/2/      8.58             15        1.47/4/       .24/4/        16.67/5/
</TABLE>


1 The periods 1996 through 2000 represent fiscal years ended February 28 or 29.
 The periods ended August 31, 2000 represent, for Class A shares, the six-month
 period ended August 31, 2000, and, for Class B shares, the 169-day period ended
 August 31, 2000. Class B shares were not offered before March 15, 2000.  Total
 return for Class B is based on activity during the period and thus is not
 representative of a full year.  Total returns exclude all sales charges,
 including contingent deferred sales charges.

2 Unaudited

3 Based on average shares outstanding

4 Annualized

5 Represents portfolio turnover rate (equivalent for all share clsses) for the
 six months ended August 31, 2000.



                                       19

                                                         AMCAP FUND / PROSPECTUS

<PAGE>

 ---------------------------------------------------------
 NOTES


                                       20

AMCAP FUND / PROSPECTUS



<PAGE>

 ---------------------------------------------------------
 NOTES


                                       21

                                                         AMCAP FUND / PROSPECTUS

<PAGE>


<TABLE>
<CAPTION>
 <S>                           <C>
 FOR SHAREHOLDER SERVICES                  American Funds Service Company
                                                             800/421-0180
 FOR RETIREMENT PLAN SERVICES    Call your employer or plan administrator
 FOR DEALER SERVICES                          American Funds Distributors
                                                     800/421-9900 Ext. 11
 FOR 24-HOUR INFORMATION                            American FundsLine(R)
                                                             800/325-3590
                                             American FundsLine OnLine(R)
                                             http://www.americanfunds.com

</TABLE>

            Telephone conversations may be recorded or monitored for
          verification, recordkeeping and quality assurance purposes.

                            *     *     *     *     *

 MULTIPLE TRANSLATIONS  This prospectus may be translated into other languages.
 If there is any inconsistency or ambiguity as to the meaning of any word or
 phrase in a translation, the English text will prevail.

 ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS  Contains additional information
 about the fund including financial statements, investment results, portfolio
 holdings, a statement from portfolio management discussing market conditions
 and the fund's investment strategies, and the independent accountants' report
 (in the annual report).

 STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The SAI contains
 more detailed information on all aspects of the fund, including the fund's
 financial statements and is incorporated by reference into this prospectus.
 The Codes of Ethics describe the personal investing policies adopted by the
 fund and the fund's investment adviser and its affiliated companies.

 The Codes of Ethics and current SAI have been filed with the Securities and
 Exchange Commission ("SEC"). These and other related materials about the fund
 are available for review or to be copied at the SEC's Public Reference Room in
 Washington, D.C. (202/942-8090) or on the EDGAR database on the SEC's Internet
 Web site at http://www.sec.gov, or, after payment of a duplicating fee, via
 e-mail request to publicinfo@sec.gov or by writing the SEC's Public Reference
 Section, Washington, D.C. 20549-0102.

 HOUSEHOLD MAILINGS  Each year you are automatically sent an updated
 prospectus, annual and semi-annual report for the fund. You may also
 occasionally receive proxy statements for the fund. In order to reduce the
 volume of mail you receive, when possible, only one copy of these documents
 will be sent to shareholders that are part of the same family and share the
 same residential address.

 If you would like to receive individual copies of these documents, or a free
 copy of the SAI or Codes of Ethics, please call American Funds Service Company
 at 800/421-0180 or write to the Secretary of the fund at 333 South Hope
 Street, Los Angeles, California 90071.
 Investment Company File No. 811-1435
                                                       Printed on recycled paper
                                                                AMCAP-010-0301/B


                                AMCAP FUND, INC.

                                     Part B
                      Statement of Additional Information

                                 March 15, 2001


This document is not a prospectus but should be read in conjunction with the
current prospectus of AMCAP Fund (the "fund" or "AMCAP") dated March 15, 2001.
The prospectus may be obtained from your investment dealer or financial planner
or by writing to the fund at the following address:

                                AMCAP Fund, Inc.
                              Attention: Secretary
                              333 South Hope Street
                          Los Angeles, California 90071
                                 (213) 486-9200

Shareholders who purchase shares at net asset value through eligible retirement
plans should note that not all of the services or features described below may
be available to them, and they should contact their employer for details.


                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
Item                                                                  Page No.
----                                                                  --------
<S>                                                                   <C>
Certain Investment Limitations and Guidelines . . . . . . . . . . .        2
Description of Certain Securities and Investment Techniques . . . .        2
Fundamental Policies and Investment Restrictions. . . . . . . . . .        4
Fund Organization and Voting Rights . . . . . . . . . . . . . . . .        5
Fund Directors and Other Officers . . . . . . . . . . . . . . . . .        7
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . .       10
Taxes and Distributions . . . . . . . . . . . . . . . . . . . . . .       15
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . . . . .       19
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . .       21
Sales Charge Reductions and Waivers . . . . . . . . . . . . . . . .       24
Individual Retirement Account (IRA) Rollovers . . . . . . . . . . .       27
Price of Shares . . . . . . . . . . . . . . . . . . . . . . . . . .       28
Selling Shares. . . . . . . . . . . . . . . . . . . . . . . . . . .       29
Shareholder Account Services and Privileges . . . . . . . . . . . .       30
Execution of Portfolio Transactions . . . . . . . . . . . . . . . .       33
General Information . . . . . . . . . . . . . . . . . . . . . . . .       33
Class A Share Investment Results and Related Statistics . . . . . .       35
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       37
Financial Statements
</TABLE>




                              AMCAP Fund - Page 1

<PAGE>


                 CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

The following limitations and guidelines are considered at the time of purchase,
under normal market conditions, and are based on a percentage of the fund's net
assets unless otherwise noted. This summary is not intended to reflect all of
the fund's investment limitations.


GENERAL GUIDELINES

 .    The fund will invest primarily in common stocks of companies domiciled in
     the U.S. In determining whether a company is domiciled in the U.S., the
     fund's investment adviser will consider the domicile determination of a
     leading securities index and may also take into account such factors as
     where the company is legally organized and/or maintains principal corporate
     offices and/or conducts its principal operations. The fund will generally
     only invest in U.S. securities that are traded in U.S. markets.

 .    The fund may also invest in securities convertible into common stocks,
     straight (nonconvertible) debt securities, cash or cash equivalents, U.S.
     Government securities or nonconvertible preferred stocks.

DEBT SECURITIES

 .    The fund may invest in debt securities rated A or better by Standard &
     Poor's Corporation or Moody's Investors Services, Inc. (or unrated but
     considered to be of equivalent quality).

The fund may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.


          DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

The descriptions below are intended to supplement the material in the prospectus
under "Investment Objective, Strategies and Risks."


EQUITY SECURITIES - Equity securities represent an ownership position in a
company. These securities may include common stocks and securities with equity
conversion or purchase rights. The prices of equity securities fluctuate based
on changes in the financial condition of their issuers and on market and
economic conditions. The fund's results will be related to the overall markets
for these securities.


The growth-oriented, equity-type securities generally purchased by the fund may
involve large price swings and potential for loss.


DEBT SECURITIES - Bonds and other debt securities are used by issuers to borrow
money. Issuers pay investors interest and generally must repay the amount
borrowed at maturity. Some debt securities, such as zero coupon bonds, do not
pay current interest, but are purchased at a discount from their face values.
The prices of debt securities fluctuate depending on such factors as interest
rates, credit quality, and maturity. In general, their prices decline when
interest rates rise and vice versa.


SECURITIES WITH EQUITY AND DEBT CHARACTERISTICS - The fund may invest in
securities that have a combination of equity and debt characteristics. These
securities may at times behave more like


                              AMCAP Fund - Page 2

<PAGE>


equity than debt and vice versa. Some types of convertible bonds or preferred
stock automatically convert into common stock. The prices and yields of
non-convertible preferred stock generally move with changes in interest rates
and the issuer's credit quality, similar to the factors affecting debt
securities.


Convertible bonds, convertible preferred stock, and other securities may
sometimes be converted into common stock or other securities at a stated
conversion ratio. These securities, prior to conversion, pay a fixed rate of
interest or a dividend. Because convertible securities have both debt and equity
characteristics, their value varies in response to many factors, including the
value of the underlying equity, general market and economic conditions,
convertible market valuations, as well as changes in interest rates, credit
spreads, and the credit quality of the issuer.


U.S. GOVERNMENT SECURITIES - Securities guaranteed by the U.S. Government
include direct obligations of the U.S. Treasury, such as Treasury bills, notes
and bonds. For these securities, the payment of principal and interest is
unconditionally guaranteed by the U.S. Government, and thus they are of the
highest possible credit quality. Such securities are subject to variations in
market value due to fluctuations in interest rates, but, if held to maturity,
will be paid in full.


Certain securities issued by U.S. Government instrumentalities and certain
federal agencies are neither direct obligations of, nor guaranteed by, the
Treasury. However, they generally involve federal sponsorship in one way or
another; some are backed by specific types of collateral; some are supported by
the issuer's right to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase certain obligations of the
issuer; and others are supported only by the credit of the issuing government
agency or instrumentality. These agencies and instrumentalities include, but are
not limited to: Federal Home Loan Bank, Federal Home Loan Mortgage Corporation,
Federal National Mortgage Association, Tennessee Valley Authority, and Federal
Farm Credit Bank System.


INVESTING IN SMALLER CAPITALIZATION STOCKS - The fund may invest in the stocks
of smaller capitalization companies (typically companies with market
capitalizations of less than $1.5 billion at the time of purchase). The
Investment Adviser believes that the issuers of smaller capitalization stocks
often provide attractive investment opportunities. However, investing in smaller
capitalization stocks can involve greater risk than is customarily associated
with investing in stocks of larger, more established companies. For example,
smaller companies often have limited product lines, markets, or financial
resources, may be dependent for management on one or a few key persons, and can
be more susceptible to losses. Also, their securities may be thinly traded (and
therefore have to be sold at a discount from current prices or sold in small
lots over an extended period of time), may be followed by fewer investment
research analysts, and may be subject to wider price swings, thus creating a
greater chance of loss than securities of larger capitalization companies.


CASH AND CASH EQUIVALENTS - These securities include: (i) commercial paper
(e.g., short-term notes up to 9 months in maturity issued by corporations,
governmental bodies or bank/ corporation sponsored conduits (asset-backed
commercial paper)), (ii) commercial bank obligations (e.g., certificates of
deposit, bankers' acceptances (time drafts on a commercial bank where the bank
accepts an irrevocable obligation to pay at maturity)), (iii) savings
association and savings bank obligations (e.g., bank notes and certificates of
deposit issued by savings banks or savings associations), (iv) securities of the
U.S. Government, its agencies or


                              AMCAP Fund - Page 3

<PAGE>


instrumentalities that mature, or may be redeemed, in one year or less, and (v)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less.


                FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES - The fund has adopted the following fundamental policies
and investment restrictions which may not be changed without approval by holders
of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940 ("1940 Act") as the vote of the lesser of (i) 67%
or more of the outstanding voting securities present at a meeting, if the
holders of more than 50% of the outstanding voting securities are present in
person or by proxy, or (ii) more than 50% of the outstanding voting securities.
All percentage limitations are considered at the time securities are purchased
and are based on the fund's net assets unless otherwise indicated. None of the
following investment restrictions involving a maximum percentage of assets will
be considered violated unless the excess occurs immediately after, and is caused
by, an acquisition by the fund.


1.   The fund may not invest in:

     (a)
     real estate (although it has not been the practice of the fund to make such
     investments, the fund may invest in the securities of real estate
     investment trusts);

     (b)   commodities or commodity contracts;

     (c)   companies for the purpose of exercising control or management;

     (d)
     the securities of companies which, with their predecessors, have a record
     of less than three years' continuing operation, if such purchase at the
     time thereof would cause more than 5% of the value of the fund's total
     assets to be invested in the securities of such companies;

     (e)
     securities which would subject the fund to unlimited liability (such as
     assessable shares or partnership interests);

     (f)
     any securities of another issuer if immediately after and as a result of
     such purchase (1) the market value of the securities of such other issuer
     shall exceed 5% of the market value of the total assets of the fund or (2)
     the fund shall own more than 10% of any class of securities or of the
     outstanding voting securities of such issuer; or

     (g)
     any securities if immediately after and as a result of such purchase more
     than 25% of the market value of the total assets of the fund are invested
     in securities of companies in any one industry.

2.   The fund may not engage in short sales or margin purchases.

3.   The fund may not lend money or securities. The making of deposits with
banks and the purchase of a portion of the issue of bonds, debentures, or other
debt securities which are publicly distributed or of a type generally purchased
by institutional investors, are not regarded as loans.


                              AMCAP Fund - Page 4

<PAGE>


4.   The fund may not invest more than 10% of the value of its total assets in
securities that are illiquid, nor may it engage in the business of underwriting
securities of other issuers.

5.   The fund may not borrow in excess of 10% of its total assets taken at cost
or pledge its assets taken at market value to an extent greater than 15% of
total assets taken at cost. Asset coverage of at least 300% taken at market
value must be maintained. No borrowing may be undertaken except as a temporary
measure for extraordinary or emergency purposes. (The fund may borrow only from
banks. The fund, however, has never borrowed and does not currently anticipate
borrowing.)

The following policies are non-fundamental policies which may be changed by
action of the Board of Directors, without shareholder approval.


Investment restriction #1 does not apply to deposits in banks or to the purchase
of securities issued or fully guaranteed by the U.S. Government (or its agencies
or instrumentalities). For purposes of investment restriction #1(g), the fund
will not invest 25% or more (rather than "more than 25%") of its total assets in
the securities of issuers in the same industry.


Notwithstanding investment restriction #5, the fund has no current intention (at
least during the next 12 months) to leverage its assets.


In addition to the foregoing policies, it is also the policy of the fund not to
invest in securities of open-end investment companies except in connection with
a merger, consolidation or acquisition of assets, but the fund may invest in
securities of closed-end investment companies within the limitations imposed by
the 1940 Act. (Notwithstanding this restriction, the fund may invest in
securities of other investment companies if deemed advisable by its officers in
connection with the administration of a deferred compensation plan adopted by
Directors pursuant to an exemptive order granted by the Securities and Exchange
Commission.) In general, this means (i) that the fund will not own more than 3%
of the outstanding voting stock of a closed-end investment company, (ii) that
the fund will not invest more than an aggregate of 5% of its total assets in
securities issued by closed-end investment companies, and (iii) that the fund,
together with all other investment companies served by the Investment Adviser,
will not own more than 10% of the outstanding voting stock of a closed-end
investment company. Any such purchases will be made only in the open market or
as a part of a merger, consolidation, or acquisition of assets, and will not
involve commissions or profits to a sponsor or dealer other than customary
brokerage commissions.


                      FUND ORGANIZATION AND VOTING RIGHTS

The fund, an open-end, diversified management investment company, was organized
as a Delaware corporation on 1966 and reorganized as a Maryland corporation on
May 10, 1990.


All fund operations are supervised by the fund's Board of Directors which meets
periodically and performs duties required by applicable state and federal laws.
Members of the board who are not employed by Capital Research and Management
Company or its affiliates are paid certain fees for services rendered to the
fund as described in "Directors and Director Compensation" below. They may elect
to defer all or a portion of these fees through a deferred compensation plan in
effect for the fund.


                              AMCAP Fund - Page 5

<PAGE>


The fund has four classes of shares - Class A, B, C and F. The shares of each
class represent an interest in the same investment portfolio.  Each class has
equal rights as to voting, redemption, dividends and liquidation, except that
each class bears different distribution expenses and may bear different transfer
agent fees and other expenses properly attributable to the particular class as
approved by the Board of Directors and set forth in the fund's rule 18f-3 Plan.
Class A, B, C and F shareholders have exclusive voting rights with respect to
the respective class' rule 12b-1 Plans adopted in connection with the
distribution of shares and on other matters in which the interests of one class
are different from interests in another class.  Shares of all classes of the
fund vote together on matters that affect all classes in substantially the same
manner. Each class votes as a class on matters that affect that class alone.


The fund does not hold annual meetings of shareholders. However, significant
matters which require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. At the request of the holders of at least 10% of the shares,
the fund will hold a meeting at which any member of the board could be removed
by a majority vote.


                              AMCAP Fund - Page 6

<PAGE>



                          FUND DIRECTORS AND OFFICERS

                      Directors and Director Compensation


<TABLE>
<CAPTION>
                                                                                               AGGREGATE
                                                                                              COMPENSATION
                                                                                         (INCLUDING VOLUNTARILY
                                                                                                DEFERRED
                                                                                            COMPENSATION/1/)
                                                                                             FROM THE FUND
                                  POSITION                                                 DURING FISCAL YEAR
                                    WITH             PRINCIPAL OCCUPATION(S) DURING              ENDED
   NAME, ADDRESS AND AGE         REGISTRANT                   PAST 5 YEARS                 FEBRUARY 29, 2000
-----------------------------------------------------------------------------------------------------------------
<S>                           <C>                <C>                                     <C>
 H. Frederick Christie         Director           Private Investor.  Former President          $17,000/3/
 P.O. Box 144                                     and Chief Executive Officer, The
 Palos Verdes Estates, CA                         Mission Group (non-utility holding
 90274                                            company, subsidiary of Southern
 Age: 67                                          California Edison Company)
-----------------------------------------------------------------------------------------------------------------
 Mary Anne Dolan               Director           Founder and President, M.A.D., Inc.          $  17,500
 1033 Gayley Avenue                               (a communications company)
 Los Angeles, CA 90024
 Age: 53
-----------------------------------------------------------------------------------------------------------------
 Martin Fenton                 Director           Managing Director, Senior Resource           $18,000/3/
 4660 La Jolla Village                            Group LLC (development and
 Drive                                            management of senior living
 Suite 725                                        communities)
 San Diego, CA 92121
 Age: 65
-----------------------------------------------------------------------------------------------------------------
 + Claudia P. Huntington       President and      Senior Vice President, Capital                 none/4/
 333 South Hope Street         Director           Research and Management Company
 Los Angeles, CA 90071
 Age: 49
-----------------------------------------------------------------------------------------------------------------
 Mary Myers Kauppila           Director           President, Ladera Management Company         $16,500/3/
 29 Commonwealth Avenue                           (venture capital and agriculture)
 Suite 906
 Boston, MA 02116
 Age: 46
-----------------------------------------------------------------------------------------------------------------
 Bailey Morris-Eck             Director           Senior Associate, Reuters                    $1,500/3,5/
 Reuters America, Inc.                            Foundation; Senior Fellow, Institute
 1333 H Street, NW                                for International Economics;
 Washington, DC 20005                             Consultant, The Independent of
 Age: 56                                          London
-----------------------------------------------------------------------------------------------------------------
 Kirk P. Pendleton             Director           Chairman/Chief Executive Officer,            $17,500/3/
 1800 Byberry Road                                Cairnwood, Inc. (venture capital
 Huntingdon, PA 19006                             investment)
 Age: 61
-----------------------------------------------------------------------------------------------------------------
 Olin C. Robison               Director           President of the Salzburg Seminar;           $16,000/3/
 The Marble Works                                 President Emeritus, Middlebury
 P.O. Box 886                                     College
 Middlebury, VT 05753
 Age: 64
-----------------------------------------------------------------------------------------------------------------
 Steven B. Sample              Director           President, University of Southern            $1,500/5/
 University of Southern                           California
 California
 Bovard Administration 110
 Los Angeles, CA 90089
 Age: 60
-----------------------------------------------------------------------------------------------------------------
 + R. Michael Shanahan         Chairman of the    Chairman of the Board and Principal            none/4/
 333 South Hope Street         Board and          Executive Officer, Capital Research
 Los Angeles, CA 90071         Principal          and Management Company
 Age: 62                       Executive
                               Officer
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
                                   TOTAL COMPENSATION
                                 (INCLUDING VOLUNTARILY
                                        DEFERRED
                                  COMPENSATION/1/) FROM      TOTAL NUMBER
                                  ALL FUNDS MANAGED BY         OF FUND
                                  CAPITAL RESEARCH AND          BOARDS
                                   MANAGEMENT COMPANY          ON WHICH
                              OR ITS AFFILIATES/2/ FOR THE     DIRECTOR
   NAME, ADDRESS AND AGE      YEAR ENDED FEBRUARY 29, 2000    SERVES/2/
--------------------------------------------------------------------------
<S>                           <C>                           <C>
 H. Frederick Christie                 $208,800/3/                19
 P.O. Box 144
 Palos Verdes Estates, CA
 90274
 Age: 67
--------------------------------------------------------------------------
 Mary Anne Dolan                       $  40,000                   2
 1033 Gayley Avenue
 Los Angeles, CA 90024
 Age: 53
--------------------------------------------------------------------------
 Martin Fenton                         $124,800/3/                15
 4660 La Jolla Village
 Drive
 Suite 725
 San Diego, CA 92121
 Age: 65
--------------------------------------------------------------------------
 + Claudia P. Huntington                 none/4/                   1
 333 South Hope Street
 Los Angeles, CA 90071
 Age: 49
--------------------------------------------------------------------------
 Mary Myers Kauppila                   $121,000/3/                 5
 29 Commonwealth Avenue
 Suite 906
 Boston, MA 02116
 Age: 46
--------------------------------------------------------------------------
 Bailey Morris-Eck                     $64,000/3/                  3
 Reuters America, Inc.
 1333 H Street, NW
 Washington, DC 20005
 Age: 56
--------------------------------------------------------------------------
 Kirk P. Pendleton                     $140,500/3/                 6
 1800 Byberry Road
 Huntingdon, PA 19006
 Age: 61
--------------------------------------------------------------------------
 Olin C. Robison                       $95,000/3/                  3
 The Marble Works
 P.O. Box 886
 Middlebury, VT 05753
 Age: 64
--------------------------------------------------------------------------
 Steven B. Sample                      $11,000/5/                  2
 University of Southern
 California
 Bovard Administration 110
 Los Angeles, CA 90089
 Age: 60
--------------------------------------------------------------------------
 + R. Michael Shanahan                   none/4/                   2
 333 South Hope Street
 Los Angeles, CA 90071        ------------------------------
 Age: 62
------------------------------                              --------------
</TABLE>




                              AMCAP Fund - Page 7


<PAGE>

 [This page is deliberately left blank for this filing.]

                              AMCAP Fund - Page 8


<PAGE>

+ "Interested persons" within the meaning of the 1940 Act on the basis of their
  affiliation with the fund's Investment Adviser, Capital Research and
  Management Company, or the parent company of the Investment Adviser, The
  Capital Group Companies, Inc.

1  Amounts may be deferred by eligible Directors under a non-qualified deferred
  compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
  an earnings rate determined by the total return of one or more funds in The
  American Funds Group as designated by the Directors.

2 Capital Research and Management Company manages The American Funds Group
  consisting of 29 funds: AMCAP Fund, Inc., American Balanced Fund, Inc.,
  American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
  American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash
  Management Trust of America, Capital Income Builder, Inc., Capital World
  Growth and Income Fund, Inc., Capital World Bond Fund, Inc., EuroPacific
  Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc.,
  The Income Fund of America, Inc., Intermediate Bond Fund of America, The
  Investment Company of America, Limited Term Tax-Exempt Bond Fund of America,
  The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc.,
  SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The
  Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt
  Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S. Treasury
  Money Fund of America, U.S. Government Securities Fund and Washington Mutual
  Investors Fund, Inc. Capital Research and Management Company also manages
  American Variable Insurance Series and Anchor Pathway Fund, which serve as the
  underlying investment vehicle for certain variable insurance contracts; and
  Endowments, whose shareholders are limited to (i) any entity exempt from
  taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
  amended ("501(c)(3) organization");      (ii) any trust, the present or future
  beneficiary of which is a 501(c)(3) organization, and (iii) any other entity
  formed for the primary purpose of benefiting a 501(c)(3) organization. An
  affiliate of Capital Research and Management Company, Capital International,
  Inc., manages Emerging Markets Growth Fund, Inc.

3 Since the deferred compensation plan's adoption, the total amount of deferred
  compensation accrued by the fund (plus earnings thereon) through the 2000
  fiscal year for participating Directors is as follows: Frederick Christie
  ($45,553), Martin Fenton ($87,163), Mary Myers Kauppila ($39,834), Bailey
  Morris-Eck ($1,618), Kirk P. Pendleton ($175,125) and Olin C. Robison
  ($39,703). Amounts deferred and accumulated earnings thereon are not funded
  and are general unsecured liabilities of the fund until paid to the Directors.

4 Claudia P. Huntington and R. Michael Shanahan are affiliated with the
  Investment Adviser and, accordingly, receive no compensation from the fund.

5 Bailey Morris-Eck and Steven B. Sample were elected to the Board of
  Directors effective November 17, 1999 and, therefore, received partial
  compensation from the fund during the fiscal year ended February 29, 2000.


                              AMCAP Fund - Page 9


<PAGE>



                                 OTHER OFFICERS


<TABLE>
<CAPTION>
                                POSITION(S)     PRINCIPAL OCCUPATION(S) DURING
   NAME AND ADDRESS     AGE   WITH REGISTRANT            PAST 5 YEARS
-------------------------------------------------------------------------------
<S>                     <C>  <C>                <C>
Timothy D. Armour       39   Senior Vice        Chairman and Chief Executive
333 South Hope Street        President          Officer, Capital Research
Los Angeles, CA 90071                           Company*
-------------------------------------------------------------------------------
Paul G. Haaga, Jr.      52   Senior Vice        Executive Vice President and
333 South Hope Street        President          Director,
Los Angeles, CA 90071                           Capital Research and Management
                                                Company
-------------------------------------------------------------------------------
Joanna F. Jonsson       37   Vice President     Executive Vice President and
P.O. Box 7650                                   Director,
San Francisco, CA                               Capital Research Company*
94120
-------------------------------------------------------------------------------
C. Ross Sappenfield     35   Vice President     Vice President, Capital
630 Fifth Avenue                                Research Company*
New York, NY 10111
-------------------------------------------------------------------------------
Julie F. Williams       52   Secretary          Vice President - Fund Business
333 South Hope Street                           Management Group, Capital
Los Angeles, CA 90071                           Research
                                                and Management Company
-------------------------------------------------------------------------------
Sheryl F. Johnson       32   Treasurer          Vice President - Fund Business
5300 Robin Hood Road                            Management Group, Capital
Norfolk, VA 23513                               Research
                                                and Management Company
-------------------------------------------------------------------------------
Robert P. Simmer        40   Assistant          Vice President - Fund Business
5300 Robin Hood Road         Treasurer          Management Group, Capital
Norfolk, VA 23513                               Research
                                                and Management Company
-------------------------------------------------------------------------------
</TABLE>
 </r.

* Company affiliated with Capital Research and Management Company.

All of the officers listed, except C. Ross Sappenfield, are officers and/or
directors/trustees of one or more of the other funds for which Capital Research
and Management Company serves as Investment Adviser.


No compensation is paid by the fund to any officer or Director who is a
director, officer or employee of the Investment Adviser or affiliated companies.
The fund pays annual fees of $10,000 to Directors who are not affiliated with
the Investment Adviser, plus $1,000 for each Board of Directors meeting
attended, plus $500 for each meeting attended as a member of a committee of the
Board of Directors. No pension or retirement benefits are accrued as part of
fund expenses. The Directors may elect, on a voluntary basis, to defer all or a
portion of their fees through a deferred compensation plan in effect for the
fund. The fund also reimburses certain expenses of the Directors who are not
affiliated with the Investment Adviser. As of February 15, 2001 the officers and
Directors of the fund and their families, as a group, owned beneficially or of
record less than 1% of the outstanding shares of the fund.


                                   MANAGEMENT

INVESTMENT ADVISER - The Investment Adviser, Capital Research and Management
Company, founded in 1931, maintains research facilities in the U.S. and abroad
(Los Angeles, San Francisco, New York, Washington, D.C., London, Geneva, Hong
Kong, Singapore and Tokyo), with a staff of professionals, many of whom have a
number of years of investment experience.


                              AMCAP Fund - Page 10

<PAGE>


The Investment Adviser is located at 333 South Hope Street, Los Angeles, CA
90071, and at 135 South State College Boulevard, Brea, CA 92821. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world. The
Investment Adviser believes that it is able to attract and retain quality
personnel. The Investment Adviser is a wholly owned subsidiary of The Capital
Group Companies, Inc.


The Investment Adviser is responsible for managing more than $300 billion of
stocks, bonds and money market instruments and serves over 11 million
shareholder accounts of all types throughout the world. These investors include
privately owned businesses and large corporations as well as schools, colleges,
foundations and other non-profit and tax-exempt organizations.


INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and Service
Agreement (the "Agreement") between the fund and the Investment Adviser will
continue in effect until March 31, 2002, unless sooner terminated, and may be
renewed from year to year thereafter, provided that any such renewal has been
specifically approved at least annually by (i) the Board of Directors, or by the
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the fund, and (ii) the vote of a majority of Directors who are not
parties to the Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreement provides that the Investment Adviser has no
liability to the fund for its acts or omissions in the performance of its
obligations to the fund not involving willful misconduct, bad faith, gross
negligence or reckless disregard of its obligations under the Agreement. The
Agreement also provides that either party has the right to terminate it, without
penalty, upon 60 days' written notice to the other party, and that the Agreement
automatically terminates in the event of its assignment (as defined in the 1940
Act).


The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of persons
to perform the executive, administrative, clerical and bookkeeping functions of
the fund, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies, and postage used at
the offices of the fund. The fund pays all expenses not assumed by the
Investment Adviser, including, but not limited to, custodian, stock transfer and
dividend disbursing fees and expenses; shareholder recordkeeping and
administrative services; costs of the designing, printing and mailing of
reports, prospectuses, proxy statements, and notices to its shareholders; taxes;
expenses of the issuance and redemption of shares of the fund (including stock
certificates, registration and qualification fees and expenses); expenses
pursuant to the fund's Plans of Distribution (described below); legal and
auditing expenses; compensation, fees, and expenses paid to directors
unaffiliated with the Investment Adviser; association dues; costs of stationery
and forms prepared exclusively for the fund; and costs of assembling and storing
shareholder account data.


                              AMCAP Fund - Page 11

<PAGE>


The Agreement provides for monthly fees, accrued daily, based on the following
rates and net asset levels:


                                NET ASSET LEVEL

<TABLE>
<CAPTION>
          RATE                  IN EXCESS OF                  UP TO
------------------------------------------------------------------------------
<S>                       <S>                       <S>
0.485%                    $0                        $1,000,000,000
------------------------------------------------------------------------------
0.385                     1,000,000,000             2,000,000,000
------------------------------------------------------------------------------
0.355                     2,000,000,000             3,000,000,000
------------------------------------------------------------------------------
0.335                     3,000,000,000             5,000,000,000
------------------------------------------------------------------------------
0.32                      5,000,000,000             8,000,000,000
------------------------------------------------------------------------------
0.31                      8,000,000,000
------------------------------------------------------------------------------
</TABLE>


The Agreement provides for a management fee reduction to the extent that the
annual ordinary operating expenses of the fund's Class A shares exceed 1% of the
average net assets in excess thereof.


Expenses which are not subject to these limitations are interest, taxes, and
extraordinary expenses. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies are accounted for as capital items and not as expenses. To
the extent the fund's management fee must be waived due to Class A share expense
ratios exceeding this limit, management fees will be reduced similarly for all
classes of shares of the fund or other Class A fees will be waived in lieu of
management fees. For the fiscal years ended 2000, 1999, and 1998, the Investment
Adviser received advisory fees of $23,853,000, $19,703,000, and $16,324,000,
respectively.


ADMINISTRATIVE SERVICES AGREEMENT - The Administrative Services Agreement (the
"Administrative Agreement") between the fund and the Investment Adviser,
relating to the fund's Class C and F shares, will continue in effect until March
31, 2002, unless sooner terminated, and may be renewed from year to year
thereafter, provided that any such renewal has been specifically approved at
least annually by the vote of a majority of Directors who are not parties to the
Administrative Agreement or interested persons (as defined in the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such approval.  The Administrative Agreement provides that the fund may
terminate the agreement at any time by vote of a majority of Directors who are
not interested persons of the fund.  The Investment Adviser has the right to
terminate the Administrative Agreement upon 60 days' written notice to the fund.
 The Administrative Agreement automatically terminates in the event of its
assignment (as defined in the 1940 Act).


Under the Administrative Agreement, the Investment Adviser provides certain
transfer agent and administrative services for shareholders of the fund's Class
C and F shares.  The Investment Adviser contracts with third parties, including
American Funds Service Company, the fund's Transfer Agent, to provide these
services.  Services include, but are not limited to, shareholder account
maintenance, transaction processing, tax information reporting, and shareholder
and


                              AMCAP Fund - Page 12

<PAGE>


fund communications. In addition, the Investment Adviser monitors, coordinates
and oversees the activities performed by third parties.


As compensation for its services, the Investment Adviser receives transfer agent
fees for transfer agent services provided to the fund's Class C and F shares.
 Transfer agent fees are paid monthly according to a fee schedule contained in a
Shareholder Services Agreement between the fund and American Funds Service
Company.  The fund's Class C and F shares pay only those transfer agent fees
that are attributed to accounts and activities generated by their respective
share class.  The Investment Adviser also receives an administrative services
fee for administrative services provided to the fund's Class C and F shares.
 Administrative services fees are paid monthly, accrued daily and calculated at
the annual rate of 0.15% of the average net assets of the fund's Class C and F
shares.


PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION - American Funds Distributors,
Inc. (the "Principal Underwriter") is the principal underwriter of the fund's
shares. The Principal Underwriter is located at 333 South Hope Street, Los
Angeles, CA 90071, 135 South State College Boulevard, Brea, CA 92821, 3500
Wiseman Boulevard, San Antonio, TX 78251, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, and 5300 Robin Hood Road, Norfolk, VA 23513.


The fund has adopted Plans of Distribution (the "Plans"), pursuant to rule 12b-1
under the 1940 Act. The Principal Underwriter receives amounts payable pursuant
to the Plans (see below). In addition, the Principal Underwriter receives
revenues from sales of the fund's shares. For Class A shares, the Principal
Underwriter receives commission revenue consisting of that portion of the Class
A sales charge remaining after the allowances by the Principal Underwriter to
investment dealers. For Class B shares, the Principal Underwriter sells the
rights to Class B 12b-1 fees paid by the fund for distribution expenses to a
third party and receives the revenue remaining after compensating investment
dealers for sales of Class B shares. The fund also pays the Principal
Underwriter for advancing the immediate service fees paid to qualified dealers
of Class B shares. For Class C shares, the Principal Underwriter receives any
contingent deferred sales charges that apply to Class C shares during the first
year after purchase. The fund pays the Principal Underwriter for advancing the
immediate service fees and commissions paid to qualified dealers of Class C
shares. For Class F shares, the fund pays the Principal Underwriter for
advancing the immediate service fees paid to qualified dealers and advisers of
Class F shares.


Commissions retained by the Principal Underwriter on sales of Class A shares
during the 2000 fiscal year amounted to $2,191,000 after an allowance of
$10,261,000 to dealers. During the fiscal years ended 1999 and 1998, the
Principal Underwriter retained $1,596,000 and $671,000, respectively, on sales
of Class A shares after an allowance of $7,571,000 and $3,213,000 to dealers,
respectively.


As required by rule 12b-1 and the 1940 Act, the Plans (together with the
Principal Underwriting Agreement) have been approved by the full Board of
Directors and separately by a majority of the directors who are not "interested
persons" of the fund and who have no direct or indirect financial interest in
the operation of the Plans or the Principal Underwriting Agreement. Potential
benefits of the Plans to the fund include shareholder services, savings to the
fund in transfer agency costs, savings to the fund in advisory fees and other
expenses, benefits to the investment process from growth or stability of assets
and maintenance of a financially healthy management organization. The selection
and nomination of directors who are not "interested persons" of the fund are
committed to the discretion of the directors who are not "interested


                              AMCAP Fund - Page 13

<PAGE>


persons" during the existence of the Plans. The Plans may not be amended to
increase materially the amount spent for distribution without shareholder
approval. Plan expenses are reviewed quarterly and the Plans must be renewed
annually by the Board of Directors.


Under the Plans, the fund may annually expend (i) for Class A shares, up to
0.25% of its net assets attributable to Class A shares, (ii) for Class B shares,
1.00% of its net assets attributable to Class B shares, (iii) for Class C
shares, 1.00% of its net assets attributable to Class C shares, and (iv) for
Class F shares, up to 0.50% of its net assets attributable to Class F shares, to
finance any activity which is primarily intended to result in the sale of fund
shares, provided the fund's Board of Directors has approved the category of
expenses for which payment is being made.


For Class A shares, (i) up to 0.25% is reimbursed to the Principal Underwriter
for paying service-related expenses, including service fees paid to qualified
dealers, and (ii) up to the amount allowable under the fund's Class A 12b-1
limit is reimbursed to the Principal Underwriter for paying distribution-related
expenses, including dealer commissions and wholesaler compensation paid on sales
of shares of $1 million or more purchased without a sales charge (including
purchases by employer-sponsored defined contribution-type retirement plans
investing $1 million or more or with 100 or more eligible employees, and
retirement plans, endowments and foundations with $50 million or more in assets)
("no load purchases"). Commissions on no load purchases of Class A shares in
excess of the Class A Plan limitation not reimbursed to the Principal
Underwriter during the most recent fiscal quarter are recoverable for five
quarters, provided that such commissions do not exceed the annual expense limit.
 After five quarters these commissions are not recoverable.


For Class B shares, (i) 0.25% is paid to the Principal Underwriter for paying
service-related expenses, including service fees paid to qualified dealers, and
(ii) 0.75% is paid to the Principal Underwriter for distribution-related
expenses, including the financing of commissions paid to qualified dealers.


For Class C shares, (i) 0.25% is paid to the Principal Underwriter for paying
service-related expenses, including service fees paid to qualified dealers, and
(ii) 0.75% is paid to the Principal Underwriter for paying distribution-related
expenses, including commissions paid to qualfied dealers.


For Class F shares, 0.25% is paid to the Principal Underwriter for paying
service-related expenses, including service fees paid to qualified dealers or
advisers.  Currently, no compensation is paid under the fund's Class F Plan for
distribution-related expenses.


During the 2000 fiscal year, the fund paid or accrued $14,744,000 for
compensation to dealers or the Principal Underwriter under the Plan for Class A
shares. As of February 29, 2000, accrued and unpaid distribution expenses were
$3,456,000.


OTHER COMPENSATION TO DEALERS - The Principal Underwriter, at its expense (from
a designated percentage of its income), currently provides additional
compensation to dealers. Currently these payments are limited to the top 100
dealers who have sold shares of the fund or other funds in The American Funds
Group. These payments will be based principally on a pro rata share of a
qualifying dealer's sales. The Principal Underwriter will, on an annual basis,
determine the advisability of continuing these payments.


                              AMCAP Fund - Page 14

<PAGE>


                            TAXES AND DISTRIBUTIONS

FUND TAXATION - The fund has elected to be treated as a regulated investment
company under Subchapter M of the Code. A regulated investment company
qualifying under Subchapter M of the Code is required to distribute to its
shareholders at least 90% of its investment company taxable income (including
the excess of net short-term capital gain over net long-term capital losses) and
generally is not subject to federal income tax to the extent that it distributes
annually 100% of its investment company taxable income and net realized capital
gains in the manner required under the Code. The fund intends to distribute
annually all of its investment company taxable income and net realized capital
gains and therefore does not expect to pay federal income tax, although in
certain circumstances the fund may determine that it is in the interest of
shareholders to distribute less than that amount.


To be treated as a regulated investment company under Subchapter M of the Code,
the fund must also (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of securities or foreign currencies, or other income
(including, but not limited to, gains from options, futures or forward
contracts) derived with respect to the business of investing in such securities
or currencies, and (b) diversify its holdings so that, at the end of each fiscal
quarter, (i) at least 50% of the market value of the fund's assets is
represented by cash, U.S. Government securities and securities of other
regulated investment companies, and other securities (for purposes of this
calculation generally limited, in respect of any one issuer, to an amount not
greater than 5% of the market value of the fund's assets and 10% of the
outstanding voting securities of such issuer) and (ii) not more than 25% of the
value of its assets is invested in the securities of any one issuer (other than
U.S. Government securities or the securities of other regulated investment
companies), or two or more issuers which the fund controls and which are
determined to be engaged in the same or similar trades or businesses.


Under the Code, a nondeductible excise tax of 4% is imposed on the excess of a
regulated investment company's "required distribution" for the calendar year
ending within the regulated investment company's taxable year over the
"distributed amount" for such calendar year. The term "required distribution"
means the sum of (i) 98% of ordinary income (generally net investment income)
for the calendar year, (ii) 98% of capital gain (both long-term and short-term)
for the one-year period ending on October 31 (as though the one-year period
ending on October 31 were the regulated investment company's taxable year), and
(iii) the sum of any untaxed, undistributed net investment income and net
capital gains of the regulated investment company for prior periods. The term
"distributed amount" generally means the sum of (i) amounts actually distributed
by the fund from its current year's ordinary income and capital gain net income
and (ii) any amount on which the fund pays income tax during the periods
described above. Although the fund intends to distribute its net investment
income and net capital gains so as to avoid excise tax liability, the fund may
determine that it is the interest of shareholders to distribute a lesser amount.


DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS - Dividends and capital gain
distributions on fund shares will be reinvested in shares of the fund of the
same class, unless shareholders indicate in writing that they wish to receive
them in cash or in shares of the same class of other American Funds, as provided
in the prospectus.


Distributions of investment company taxable income and net realized capital
gains to individual shareholders will be taxable whether received in shares or
in cash. Shareholders electing to


                              AMCAP Fund - Page 15

<PAGE>


receive distributions in the form of additional shares will have a cost basis
for federal income tax purposes in each share so received equal to the net asset
value of that share on the reinvestment date.


     DIVIDENDS - The fund intends to follow the practice of distributing
     substantially all of its investment company taxable income, which includes
     any excess of net realized short-term gains over net realized long-term
     capital losses.  Investment company taxable income generally includes
     dividends, interest, net short-term capital gains in excess of net
     long-term capital losses, and certain foreign currency gains, if any, less
     expenses and certain foreign currency losses.

     Dividends from domestic corporations are expected to comprise some portion
     of the fund's gross income. To the extent that such dividends constitute
     any of the fund's gross income, a portion of the income distributions of
     the fund will be eligible for the deduction for dividends received by
     corporations. Shareholders will be informed of the portion of dividends
     which so qualify. The dividends-received deduction is reduced to the extent
     that either the fund shares, or the underlying shares of stock held by the
     fund, with respect to which dividends are received, are treated as
     debt-financed under federal income tax law and is eliminated if the shares
     are deemed to have been held by the shareholder or the fund, as the case
     may be, for less than 46 days during the 90-day period beginning on the
     date which is 45 days before the date on which the shares become
     ex-dividend. Capital gain distributions are not eligible for the
     dividends-received deduction.


     A portion of the difference between the issue price of zero coupon
     securities and their face value ("original issue discount") is considered
     to be income to the fund each year, even though the fund will not receive
     cash interest payments from these securities.  This original issue discount
     (imputed income) will comprise a part of the investment company taxable
     income of the fund which must be distributed to shareholders in order to
     maintain the qualification of the fund as a regulated investment company
     and to avoid federal income taxation at the level of the fund.


     In addition, some of the bonds may be purchased by a fund at a discount
     that exceeds the original issue discount on such bonds, if any.  This
     additional discount represents market discount for federal income tax
     purposes.  The gain realized on the disposition of any bond having market
     discount generally will be treated as taxable ordinary income to the extent
     it does not exceed the accrued market discount on such bond (unless a fund
     elects to include market discount in income in tax years to which it is
     attributable).  Generally, market discount accrues on a daily basis for
     each day the bond is held by a fund on a straight-line basis over the time
     remaining to the bond's maturity.  In the case of any debt security having
     a fixed maturity date of not more than one year from its date of issue, the
     gain realized on disposition generally will be treated as short-term
     capital gain. In general, any gain realized on disposition of a security
     held less than one year is treated as short-term capital gain.


     CAPITAL GAIN DISTRIBUTIONS - The fund also intends to follow the practice
     of distributing the entire excess of net realized    long-term capital
     gains over net realized short-term capital losses. Net capital gains for a
     fiscal year are computed by taking into account any capital loss
     carry-forward of the fund.


                              AMCAP Fund - Page 16

<PAGE>


     If any net long-term capital gains in excess of net short-term capital
     losses are retained by the fund for reinvestment, requiring federal income
     taxes to be paid thereon by the fund, the fund intends to elect to treat
     such capital gains as having been distributed to shareholders. As a result,
     each shareholder will report such capital gains as long-term capital gains
     taxable to individual shareholders at a maximum 20% capital gains rate,
     will be able to claim a pro rata share of federal income taxes paid by the
     fund on such gains as a credit against personal federal income tax
     liability, and will be entitled to increase the adjusted tax basis on fund
     shares by the difference between a pro rata share of the retained gains and
     their related tax credit.


SHAREHOLDER TAXATION - In January of each year individual shareholders of the
fund will receive a statement of the federal income tax status of all
distributions. Shareholders of the fund also may be subject to state and local
taxes on distributions received from the fund. Distributions of the excess of
net long-term capital gains over net short-term capital losses which the fund
properly designates as "capital gain dividends" generally will be taxable to
individual shareholders at a maximum 20% capital gains rate, regardless of the
length of time the shares of the fund have been held by such shareholders. Any
loss realized upon the redemption of shares held at the time of redemption for
six months or less from the date of their purchase will be treated as a
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gain during such six-month period.


Distributions by the fund result in a reduction in the net asset value of the
fund's shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution would nevertheless be taxable to the
shareholder as ordinary income or capital gain as described above, even though,
from an investment standpoint, it may constitute a partial return of investment
capital.  For this reason, investors should consider the tax implications of
buying shares just prior to a distribution. The price of shares purchased at
that time includes the amount of the forthcoming distribution. Those purchasing
just prior to a distribution will then receive a partial return of investment
capital upon the distribution, which will nevertheless be taxable to them.


Redemptions of shares, including exchanges for shares of another American Fund,
may result in federal, state and local tax consequences (gain or loss) to the
shareholder.  However, conversion from one class to another class in the same
fund should not be a taxable event.If a shareholder exchanges or otherwise
disposes of shares of the fund within 90 days of having acquired such shares,
and if, as a result of having acquired those shares, the shareholder
subsequently pays a reduced sales charge for shares of the fund, or of a
different fund, the sales charge previously incurred in acquiring the fund's
shares will not be taken into account (to the extent such previous sales charges
do not exceed the reduction in sales charges) for the purposes of determining
the amount of gain or loss on the exchange, but will be treated as having been
incurred in the acquisition of such other funds. Also, any loss realized on a
redemption or exchange of shares of the fund will be disallowed to the extent
substantially identical shares are reacquired within the 61-day period beginning
30 days before and ending 30 days after the shares are disposed of.


The fund will be required to report to the IRS all distributions of investment
company taxable income and capital gains as well as gross proceeds from the
redemption or exchange of fund shares, except in the case of certain exempt
shareholders. Under the backup withholding provisions of Section 3406 of the
Code, distributions of investment company taxable income and capital gains and
proceeds from the redemption or exchange of a regulated investment company may
be subject to withholding of federal income tax at the rate of 31% in the case
of non-exempt


                              AMCAP Fund - Page 17

<PAGE>


U.S. shareholders who fail to furnish the investment company with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. Withholding may also be required if the fund
is notified by the IRS or a broker that the taxpayer identification number
furnished by the shareholder is incorrect or that the shareholder has previously
failed to report interest or dividend income. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld.


The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. persons, i.e., U.S. citizens and residents and
U.S. corporations, partnerships, trusts and estates. Each shareholder who is not
a U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of the fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30% (or a lower rate under an
applicable income tax treaty) on dividend income received by the shareholder.


Shareholders should consult their tax advisers about the application of federal,
state and local tax law in light of their particular situation.


                              AMCAP Fund - Page 18

<PAGE>


                               PURCHASE OF SHARES


<TABLE>
<CAPTION>
        METHOD            INITIAL INVESTMENT        ADDITIONAL INVESTMENTS
-------------------------------------------------------------------------------
<S>                     <C>                     <C>
                        See "Purchase           $50 minimum (except where a
                        Minimums" for initial   lower minimum is noted under
                        investment minimums.    "Purchase Minimums").
-------------------------------------------------------------------------------
By contacting           Visit any investment    Mail directly to your
your investment dealer  dealer who is           investment dealer's address
                        registered in the       printed on your account
                        state where the         statement.
                        purchase is made and
                        who has a sales
                        agreement with
                        American Funds
                        Distributors.
-------------------------------------------------------------------------------
By mail                 Make your check         Fill out the account additions
                        payable to the fund     form at the bottom of a recent
                        and mail to the         account statement, make your
                        address indicated on    check payable to the fund,
                        the account             write your account number on
                        application. Please     your check, and mail the check
                        indicate an investment  and form in the envelope
                        dealer on the account   provided with your account
                        application.            statement.
-------------------------------------------------------------------------------
By telephone            Please contact your     Complete the "Investments by
                        investment dealer to    Phone" section on the account
                        open account, then      application or American
                        follow the procedures   FundsLink Authorization Form.
                        for additional          Once you establish the
                        investments.            privilege, you, your financial
                                                advisor or any person with your
                                                account information can call
                                                American FundsLine(R) and make
                                                investments by telephone
                                                (subject to conditions noted in
                                                "Shareholder Account Services
                                                and Privileges - Telephone and
                                                Computer Purchases, Redemptions
                                                and Exchanges" below).
-------------------------------------------------------------------------------
By computer             Please contact your     Complete the American FundsLink
                        investment dealer to    Authorization Form. Once you
                        open account, then      established the privilege, you,
                        follow the procedures   your financial advisor or any
                        for additional          person with your account
                        investments.            information may access American
                                                FundsLine OnLine(R) on the
                                                Internet and make investments
                                                by computer (subject to
                                                conditions noted in
                                                "Shareholder Account Services
                                                and Privileges - Telephone and
                                                Computer Purchases, Redemptions
                                                and Exchanges" below).
-------------------------------------------------------------------------------
By wire                 Call 800/421-0180 to    Your bank should wire your
                        obtain your account     additional investments in the
                        number(s), if           same manner as described under
                        necessary. Please       "Initial Investment."
                        indicate an investment
                        dealer on the account.
                        Instruct your bank to
                        wire funds to:

                        Wells Fargo Bank
                        155 Fifth Street,
                        Sixth Floor
                        San Francisco, CA
                        94106
                        (ABA#121000248)

                        For credit to the
                        account of:
                        American Funds Service
                        Company a/c#
                        4600-076178
                        (fund name)
                        (your fund acct. no.)
-------------------------------------------------------------------------------
</TABLE>


The funds and the Principal Underwriter reserve the right to reject any purchase
order.  Generally, Class F shares may only be purchased through fee-based
programs of investment firms and registered investment advisers who have special
agreements with the fund's distributor.  Class B and C shares are generally not
available to certain employer-sponsored retirement plans, such as 401(k) plans,
employer-sponsored 403(b) plans, and money purchase


                              AMCAP Fund - Page 19

<PAGE>


pension and profit sharing plans.  In addition, the state tax-exempt funds are
only offered in certain states and tax-exempt funds in general should not serve
as retirement plan investments.


PURCHASE MINIMUMS - The minimum initial investment for all funds in The American
Funds Group, except the money market funds and the state tax-exempt funds, is
$250.  The minimum initial investment for the money market funds (The Cash
Management Trust of America, The Tax-Exempt Money Fund of America, and The U.S.
Treasury Money Fund of America) and the state tax-exempt funds (The Tax-Exempt
Fund of California, The Tax-Exempt Fund of Maryland, and The Tax-Exempt Fund of
Virginia) is $1,000. Purchase minimums are reduced to $50 for purchases through
"Automatic Investment Plans" (except for the money market funds) or to $25 for
purchases by retirement plans through payroll deductions and may be reduced or
waived for shareholders of other funds in The American Funds Group. The minimum
is $50 for additional investments (except for retirement plan payroll deductions
as noted above).


PURCHASE MAXIMUM FOR CLASS B SHARES - The maximum purchase order for Class B
shares for all American Funds is $100,000. For investments above $100,000, Class
A shares are generally a less expensive option over time due to sales charge
reductions or waivers.


PURCHASE MAXIMUM FOR CLASS C SHARES - The maximum purchase order for Class C
shares for all American Funds is $500,000.


FUND NUMBERS - Here are the fund numbers for use with our automated phone line,
American FundsLine/(R)/ (see description below):

<TABLE>
<CAPTION>
                                                  FUND      FUND      FUND       FUND
                                                 NUMBER    NUMBER    NUMBER     NUMBER
FUND                                            CLASS A   CLASS B   CLASS C    CLASS F
----------------------------------------------------------------------------------------
<S>                                             <C>       <C>       <C>       <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . .      02       202       302        402
American Balanced Fund/(R)/ . . . . . . . . .      11       211       311        411
American Mutual Fund/(R)/ . . . . . . . . . .      03       203       303        403
Capital Income Builder/(R)/ . . . . . . . . .      12       212       312        412
Capital World Growth and Income Fund/SM/  . .      33       233       333        433
EuroPacific Growth Fund/(R)/  . . . . . . . .      16       216       316        416
Fundamental Investors/SM/ . . . . . . . . . .      10       210       310        410
The Growth Fund of America/(R)/ . . . . . . .      05       205       305        405
The Income Fund of America/(R)/ . . . . . . .      06       206       306        406
The Investment Company of America/(R)/  . . .      04       204       304        404
The New Economy Fund/(R)/ . . . . . . . . . .      14       214       314        414
New Perspective Fund/(R)/ . . . . . . . . . .      07       207       307        407
New World Fund/SM/  . . . . . . . . . . . . .      36       236       336        436
SMALLCAP World Fund/(R)/  . . . . . . . . . .      35       235       335        435
Washington Mutual Investors Fund/SM/  . . . .      01       201       301        401
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/      40       240       340        440
American High-Income Trust/SM/  . . . . . . .      21       221       321        421
The Bond Fund of America/SM/  . . . . . . . .      08       208       308        408
Capital World Bond Fund/(R)/  . . . . . . . .      31       231       331        431
Intermediate Bond Fund of America/SM/ . . . .      23       223       323        423
Limited Term Tax-Exempt Bond Fund of
America/SM/ . . . . . . . . . . . . . . . . .      43       243       343        443
The Tax-Exempt Bond Fund of America/(R)/  . .      19       219       319        419
The Tax-Exempt Fund of California/(R)/* . . .      20       220       320        420
The Tax-Exempt Fund of Maryland/(R)/* . . . .      24       224       324        424
The Tax-Exempt Fund of Virginia/(R)/* . . . .      25       225       325        425
U.S. Government Securities Fund/SM/ . . . . .      22       222       322        422
MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . .      09       209       309        409
The Tax-Exempt Money Fund of America/SM/  . .      39       N/A       N/A        N/A
The U.S. Treasury Money Fund of America/SM/ .      49       N/A       N/A        N/A
___________
*Available only in certain states.
</TABLE>



                              AMCAP Fund - Page 20

<PAGE>


                                 SALES CHARGES

CLASS A SALES CHARGES - The sales charges you pay when purchasing Class A shares
of stock, stock/bond, and bond funds of The American Funds Group are set forth
below. The money market funds of The American Funds Group are offered at net
asset value. (See "Fund Numbers" for a listing of the funds.)

<TABLE>
<CAPTION>
                                                                                       DEALER
                                                               SALES CHARGE AS       CONCESSION
                                                              PERCENTAGE OF THE:    AS PERCENTAGE
                                                              ------------------       OF THE
AMOUNT OF PURCHASE
AT THE OFFERING PRICE                                        NET AMOUNT  OFFERING     OFFERING
                                                             -INVESTED-   PRICE         PRICE
------------------------------------------------------------- --------    -----         -----
<S>                                                          <C>         <C>       <C>
STOCK AND STOCK/BOND FUNDS
Less than $25,000  . . . . . . . . . . . . . . . . . . . .     6.10%      5.75%         5.00%
$25,000 but less than $50,000  . . . . . . . . . . . . . .     5.26       5.00          4.25
$50,000 but less than $100,000. .                              4.71       4.50          3.75
BOND FUNDS
Less than $100,000 . . . . . . . .                             3.90       3.75          3.00
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000 .                              3.63       3.50          2.75
$250,000 but less than $500,000 .                              2.56       2.50          2.00
$500,000 but less than $750,000 .                              2.04       2.00          1.60
$750,000 but less than $1 million                              1.52       1.50          1.20
$1 million or more . . . . . . . . . .        none     none    (see below)
-----------------------------------------------------------------------------
</TABLE>


CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES - Investments of $1 million or
more are sold with no initial sales charge.  HOWEVER, A 1% CONTINGENT DEFERRED
SALES CHARGE (CDSC) MAY BE


                              AMCAP Fund - Page 21

<PAGE>


IMPOSED IF REDEMPTIONS ARE MADE WITHIN ONE YEAR OF PURCHASE. Employer-sponsored
defined contribution-type plans investing $1 million or more, or with 100 or
more eligible employees, and Individual Retirement Account rollovers from
retirement plans with assets invested in the American Funds (see "Individual
Retirement Account (IRA) Rollovers" below) may invest with no sales charge and
are not subject to a CDSC.  403(b) plans may be treated as employer-sponsored
plans for sales charge purposes if: (i) the American Funds are principal
investment options; (ii) the employer facilitates the enrollment process by, for
example, allowing for onsite group enrollment meetings held during working
hours; and (iii) there is only one dealer firm assigned to the plans.  403(b)
plans meeting these criteria may invest with no sales charge and are not subject
to a CDSC if investing $1 million or more or having 100 or more eligible
employees.


Investments made through accounts that purchased Class A shares of the fund
before March 15, 2001 and are part of certain qualified fee-based programs, and
retirement plans, endowments or foundations with $50 million or more in assets,
may also be made with no sales charge and are not subject to a CDSC.  A dealer
concession of up to 1% may be paid by the fund under its Class A Plan of
Distribution on investments made with no initial sales charge.


In addition, Class A shares of the stock, stock/bond and bond funds may be sold
at net asset value to:


(1)  current or retired directors, trustees, officers and advisory board members
of, and certain lawyers who provide services to, the funds managed by Capital
Research and Management Company, current or retired employees of Washington
Management Corporation, current or retired employees and partners of The Capital
Group Companies, Inc. and its affiliated companies, certain family members and
employees of the above persons, and trusts or plans primarily for such persons;

(2)  current registered representatives, retired registered representatives with
respect to accounts established while active, or full-time employees (and their
spouses, parents, and children) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such dealers) and plans
for such persons or the dealers;

(3)  companies exchanging securities with the fund through a merger, acquisition
or exchange offer;

(4)  insurance company separate accounts;

(5)  accounts managed by subsidiaries of The Capital Group Companies, Inc.;

(6)  The Capital Group Companies, Inc., its affiliated companies and Washington
Management Corporation; and

(7)	wholesalers and full-time employees directly supporting wholesalers
involved in the distribution of insurance company separate accounts whose
underlying investments are managed by any affiliate of The Capital Group
Companies, Inc.


Shares are offered at net asset value to these persons and organizations due to
anticipated economies in sales effort and expense.


                              AMCAP Fund - Page 22

<PAGE>


CONTINGENT DEFERRED SALES CHARGE ON CLASS A AND C SHARES -  Except as described
above, a CDSC of 1% applies to redemptions of Class A shares of the American
Funds, other than the money market funds, made within 12 months following the
purchase of Class A shares of $1 million or more made without an initial sales
charge.  A CDSC of 1% also applies to redemptions of Class C shares of the
American Funds made within 12 months following the purchase of the Class C
shares. The charge is 1% of the lesser of the value of the shares redeemed
(exclusive of reinvested dividends and capital gain distributions) or the total
cost of such shares.  Shares held the longest are assumed to be redeemed first
for purposes of calculating this CDSC. The CDSC may be waived in certain
circumstances.  See "CDSC Waivers for Class A and C Shares" below.


CLASS B SALES CHARGES - Class B shares are sold without any initial sales
charge.  However, a CDSC may be applied to shares you sell within six years of
purchase, as shown in the table below:



<TABLE>
<CAPTION>
 CONTINGENT DEFERRED SALES CHARGE ON
       SHARES SOLD WITHIN YEAR               AS A % OF SHARES BEING SOLD
 ------------------------------------------------------------------------------
 <S>                                  <C>
                  1                                     5.00%
                  2                                     4.00%
                  3                                     4.00%
                  4                                     3.00%
                  5                                     2.00%
                  6                                     1.00%
</TABLE>



There is no CDSC on appreciation in share value above the initial purchase price
or on shares acquired through reinvestment of dividends or capital gain
distributions.  In addition, the CDSC may be waived in certain circumstances.
 See "CDSC Waivers for Class B shares" below.  The CDSC is based on the original
purchase cost or the current market value of the shares being sold, whichever is
less.  In processing redemptions of Class B shares, shares that are not subject
to any CDSC will be redeemed first followed by shares that you have owned the
longest during the six-year period.


CLASS F SALES CHARGE - Class F shares are sold with no initial or contingent
deferred sales charge.


DEALER COMMISSIONS AND COMPENSATION - For Class A shares, commissions (up to 1%)
are paid to dealers who initiate and are responsible for purchases of $1 million
or more, for purchases by any employer-sponsored defined contribution-type plan
investing $1 million or more or with 100 or more eligible employees, IRA
rollover accounts (as described in "Individual Retirement Account (IRA)
Rollovers" below), and for purchases made at net asset value by certain
retirement plans, endowments and foundations with assets of $50 million or more.
 Commissions on investments in Class A shares are paid at the following rates:
1.00% on amounts of $1 million to $4 million, 0.50% on amounts over $4 million
to $10 million, and 0.25% on amounts over $10 million. Commissions are based on
cumulative investments and are not annually reset.


For Class B shares, compensation equal to 4.00% of the amount invested is paid
by the Principal Underwriter to dealers who sell Class B shares.


                              AMCAP Fund - Page 23

<PAGE>


For Class C shares, compensation equal to 1.00% of the amount invested is paid
by the Principal Underwriter to dealers who sell Class C shares.


CONVERSION OF CLASS B AND C SHARES - Class B shares automatically convert to
Class A shares in the month of the eight-year anniversary of the purchase date.
 Class C shares automatically convert to Class F shares in the month of the
ten-year anniversary of the purchase date. The conversion of shares is subject
to the Internal Revenue Service's continued position that the conversions are
not subject to federal income tax.  In the event the Internal Revenue Service no
longer takes this position, the automatic conversion feature may be suspended,
in which event no further conversions of Class B or C shares would occur while
such suspension remained in effect.  In that event, at your option, Class B
shares could be exchanged for Class A shares and Class C shares for Class F
shares on the basis of the relative net asset values of the two classes, without
the imposition of a sales charge or fee; however, such an exchange could
constitute a taxable event for you. Absent such an exchange, Class B and C
shares would continue to be subject to higher expenses for longer than eight
years and ten years, respectively.


                      SALES CHARGE REDUCTIONS AND WAIVERS

REDUCING YOUR CLASS A SALES CHARGE - You and your "immediate family" (your
spouse and your children under age 21) may combine investments to reduce your
costs. You must let your investment dealer or American Funds Service Company
(the "Transfer Agent") know if you qualify for a reduction in your sales charge
using one or any combination of the methods described below.


     STATEMENT OF INTENTION - You may enter into a non-binding commitment to
     purchase shares of a fund(s) over a 13-month period and receive the same
     sales charge as if all shares had been purchased at once. This includes
     purchases made during the previous 90 days, but does not include future
     appreciation of your investment or reinvested distributions. The reduced
     sales charges and offering prices set forth in the Prospectus apply to
     purchases of $25,000 or more for equity funds and $100,000 or more for bond
     funds made within a 13-month period subject to the following statement of
     intention (the "Statement"). The Statement is not a binding obligation to
     purchase the indicated amount.

     When a shareholder elects to use a Statement in order to qualify for a
     reduced sales charge, shares equal to 5% of the dollar amount specified
     in the Statement will be held in escrow in the shareholder's account
     out of the initial purchase (or subsequent purchases, if necessary)
     by the Transfer Agent. All dividends and any capital gain distributions
     on shares held in escrow will be credited to the shareholder's account
     in shares (or paid in cash, if requested). If the intended investment
     is not completed within the specified 13-month period, the purchaser
     will remit to the Principal Underwriter the difference between the
     sales charge actually paid and the sales charge which would have been
     paid if the total of such purchases had been made at a single time.
     The dealer assigned to the account at the end of the period will
     receive an appropriate commission adjustment. If the difference is not
     paid by the close of the Statement period, the appropriate number of
     shares held in escrow will be redeemed to pay such difference. If the
     proceeds from this redemption are inadequate, the purchaser will be
     liable to the Principal Underwriter for the balance still outstanding.

     The Statement may be revised upward at any time during the 13-month period,
     and such a revision will be treated as a new Statement, except that the
     13-month period during which the purchase must be made will remain
     unchanged. Accordingly, upon your


                              AMCAP Fund - Page 24

<PAGE>


     request, the sales charge paid on investments made 90 days prior to the
     Statement revision will be adjusted to reflect the revised Statement.

     Existing holdings eligible for rights of accumulation (see below),
     including Class A shares held in a fee-based arrangement, other classes of
     shares of the American Funds, and any individual investments in American
     Legacy variable annuities and variable life insurance policies (American
     Legacy, American Legacy II and American Legacy III variable annuities,
     American Legacy Life, American Legacy Variable Life, and American Legacy
     Estate Builder) may be credited toward satisfying the Statement.

     During the Statement period reinvested dividends and capital gain
     distributions, investments in money market funds, and investments made
     under a right of reinstatement will not be credited toward satisfying the
     Statement. The Statement will be considered completed if the shareholder
     dies within the 13-month Statement period. Commissions will not be adjusted
     or paid on the difference between the Statement amount and the amount
     actually invested before the shareholder's death.

     When the trustees of certain retirement plans purchase shares by payroll
     deduction, the sales charge for the investments made during the 13-month
     period will be handled as follows: the regular monthly payroll deduction
     investment will be multiplied by 13 and then multiplied by 1.5. The current
     value of existing American Funds investments (other than money market fund
     investments) and any rollovers or transfers reasonably anticipated to be
     invested in non-money market American Funds during the 13-month period, and
     any individual investments in American Legacy variable annuities and
     variable life insurance policies are added to the figure determined above.
     The sum is the Statement amount and applicable breakpoint level. On the
     first investment and all other investments made pursuant to the Statement,
     a sales charge will be assessed according to the sales charge breakpoint
     thus determined. There will be no retroactive adjustments in sales charges
     on investments made during the 13-month period.

     Shareholders purchasing shares at a reduced sales charge under a Statement
     indicate their acceptance of these terms with their first purchase.

     AGGREGATION - Sales charge discounts are available for certain aggregated
     investments. Qualifying investments include those made by you and your
     immediate family (your spouse and your children under the age of 21), if
     all parties are purchasing shares for their own accounts and/or:

     .    individual-type employee benefit plan(s), such as an IRA, 403(b) plan
          (see exception below), or single-participant Keogh-type plan;

     .    business accounts solely controlled by you or your immediate family
          (for example, you own the entire business);

     .    trust accounts established by you or your immediate family.  However,
          if the person(s) who established the trust is deceased, the trust
          account may be aggregated with accounts of the person who is the
          primary beneficiary of the trust; or

     .    endowments or foundations established and controlled by you or your
          immediate family.


                              AMCAP Fund - Page 25

<PAGE>


     Individual purchases by a trustee(s) or other fiduciary(ies) may also be
     aggregated if the investments are:

     .    for a single trust estate or fiduciary account, excluding
          individual-type employee benefit plans described above;

     .    made for two or more employee benefit plans of a single employer or of
          affiliated employers as defined in the 1940 Act, again excluding
          individual-type employee benefit plans described above;

     .    for a diversified common trust fund or other diversified pooled
          account not specifically formed for the purpose of accumulating fund
          shares;

     .    for non-profit, charitable or educational organizations (or any
          employer-sponsored retirement plan for such an endowment or
          foundation) or any endowments or foundations established and
          controlled by the organization; or

     .    for participant accounts of a 403(b) plan that is treated as an
          employer-sponsored plan (see "Class A Purchases Not Subject to Sales
          Charges" above), or made for two or more 403(b) plans that are treated
          as employer-sponsored plans of a single employer or affiliated
          employers as defined in the 1940 Act.

     Purchases made for nominee or street name accounts (securities held in the
     name of an investment dealer or another nominee such as a bank trust
     department instead of the customer) may not be aggregated with those made
     for other accounts and may not be aggregated with other nominee or street
     name accounts unless otherwise qualified as described above.

     CONCURRENT PURCHASES - You may combine purchases of all classes of shares
     of two or more funds in The American Funds Group, as well as individual
     holdings in American Legacy variable annuities and variable life insurance
     policies.  Shares of money market funds purchased through an exchange,
     reinvestment or cross-reinvestment from a fund having a sales charge also
     qualify. However, direct purchases of the money market funds are excluded.

     RIGHTS OF ACCUMULATION - You may take into account the current value (or if
     greater, the amount you invested less any withdrawals) of your existing
     holdings in all share classes of The American Funds Group, as well as your
     holdings in Endowments (shares of which may be owned only by tax-exempt
     organizations), to determine your sales charge on investments in accounts
     eligible to be aggregated, or when making a gift to an individual or
     charity. When determining your sales charge, you may also take into account
     the value of your individual holdings, as of the end of the week prior to
     your investment, in various American Legacy variable annuities and variable
     life insurance policies. Direct purchases of the money market funds are
     excluded.

CDSC WAIVERS FOR CLASS A AND C SHARES -  Any CDSC on Class A and C shares may be
waived in the following cases:


(1)  Exchanges (except if shares acquired by exchange are then redeemed within
12 months of the initial purchase).


                              AMCAP Fund - Page 26

<PAGE>


(2)  Distributions from 403(b) plans or IRAs due to death, post-purchase
disability or attainment of age 59-1/2.

(3)  Tax-free returns of excess contributions to IRAs.

(4)  Redemptions through systematic withdrawal plans (see "Automatic
Withdrawals" below), not exceeding 12% each year of the lesser of the original
purchase cost or the current market value of the shares being sold that would
otherwise be subject to a CDSC.

CDSC WAIVERS FOR CLASS B SHARES - Any CDSC on Class B shares may be waived in
the following cases:


(1)  Redemptions through systematic withdrawal plans ("SWPs") (see "Automatic
Withdrawals" below) not exceeding 12% each year of the lesser of the original
purchase cost or the current market value of the shares being sold that would
otherwise be subject to a CDSC. Shares not subject to a CDSC (such as shares
representing reinvestment of distributions) will be redeemed first and will
count toward the 12% limitation.  If there are insufficient shares not subject
to a CDSC, shares subject to the lowest CDSC will be redeemed next until the 12%
limit is reached.

The 12% fee from CDSC limit is calculated on a pro rata basis at the time the
first payment is made and is recalculated thereafter on a pro rata basis at the
time of each SWP payment.  Shareholders who establish a SWP should be aware that
the amount of that payment not subject to a CDSC may vary over time depending on
fluctuations in net asset value of their account.  This privilege may be revised
or terminated at any time.


(2)  Required minimum distributions taken from retirement accounts upon the
attainment of age 70-1/2.

(3)  Distributions due to death or post-purchase disability of a shareholder. In
the case of joint tenant accounts, if one joint tenant dies, the surviving joint
tenant(s), at the time they notify the Transfer Agent of the decedent's death
and remove his/her name from the account, may redeem shares from the account
without incurring a CDSC. Redemptions subsequent to the notification to the
Transfer Agent of the death of one of the joint owners will be subject to a
CDSC.

                 INDIVIDUAL RETIREMENT ACCOUNT (IRA) ROLLOVERS

Assets from a retirement plan (plan assets) may be invested in any class of
shares of the American Funds (except as described below) through an IRA
rollover plan. All such rollover investments will be subject to the terms
and conditions for Class A, B, C and F shares contained in the fund's
current prospectus and statement of additional information. An IRA rollover
involving plan assets that offered an investment option managed by any
affiliate of The Capital Group Companies, Inc., including any of the
American Funds, may be invested in Class A shares at net asset value and
will not be subject to a contingent deferred sales charge.  Dealers who
initiate and are responsible for such investments will be compensated
pursuant to the schedule applicable to Class A share investments of
$1 million or more (see "Dealers Commissions and Compensation" above).



                              AMCAP Fund - Page 27

<PAGE>


                                PRICE OF SHARES

Shares are purchased at the offering price next determined after the purchase
order is received and accepted by the fund or the Transfer Agent; this offering
price is effective for orders received prior to the time of determination of the
net asset value and, in the case of orders placed with dealers, accepted by the
Principal Underwriter, the Transfer Agent or either of their designees. In the
case of orders sent directly to the fund or the Transfer Agent, an investment
dealer MUST be indicated. The dealer is responsible for promptly transmitting
purchase orders to the Principal Underwriter.

Orders received by the investment dealer, the Transfer Agent, or the fund after
the time of the determination of the net asset value will be entered at the next
calculated offering price. Prices which appear in the newspaper do not always
indicate prices at which you will be purchasing and redeeming shares of the
fund, since such prices generally reflect the previous day's closing price
whereas purchases and redemptions are made at the next calculated price. The
price you pay for shares, the offering price, is based on the net asset value
per share which is calculated once daily as of approximately 4:00 p.m. New York
time, which is the normal close of trading on the New York Stock Exchange each
day the Exchange is open. If, for example, the Exchange closes at 1:00 p.m., the
fund's share price would still be determined as of 4:00 p.m. New York time. The
New York Stock Exchange is currently closed on weekends and on the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas
Day.


All portfolio securities of funds managed by Capital Research and Management
Company (other than money market funds) are valued, and the net asset value per
share is determined as follows:


1.    Equity securities, including depositary receipts, are valued at 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. In cases where equity
securities are traded on more than one exchange, the securities are valued on
the exchange or market determined by the Investment Adviser to be the broadest
and most representative market, which may be either a securities exchange or the
over-the-counter market. Fixed-income securities are valued at prices obtained
from a pricing service, when such prices are available; however, in
circumstances where the Investment Adviser deems it appropriate to do so, such
securities will be valued at the mean quoted bid and asked prices or at prices
for securities of comparable maturity, quality and type.

Short-term securities maturing within 60 days are valued at amortized cost which
approximates market value.


Assets or liabilities initially expressed in terms of non-U.S. currencies are
translated prior to the next determination of the net asset value of the fund's
shares into U.S. dollars at the prevailing market rates.


Securities and assets for which representative market quotations are not readily
available are valued at fair value as determined in good faith under policies
approved by the fund's Board. The fair value of all other assets is added to the
value of securities to arrive at the total assets;


2.   Liabilities, including accruals of taxes and other expense items, are
deducted from total assets; and


                              AMCAP Fund - Page 28

<PAGE>


3.   Net assets so obtained are then divided by the total number of shares
outstanding, and the result, rounded to the nearer cent, is the net asset value
per share.

Any purchase order may be rejected by the Principal Underwriter or by the fund.
The Principal Underwriter will not knowingly sell shares of the fund directly or
indirectly to any person or entity, where, after the sale, such person or entity
would own beneficially directly or indirectly more than 3.0% of the outstanding
shares of the fund without the consent of a majority of the fund's Board of
Directors.


                                 SELLING SHARES

Shares are sold at the net asset value next determined after your request is
received in good order by the Transfer Agent. Sales of certain Class A, B and C
shares may be subject to a CDSC.  Generally, Class F shares may only be sold
through fee-based programs of investment firms and registered investment
advisers with special agreements with the fund's distributor.


You may sell (redeem) other classes of shares in your account in any of the
following ways:


     THROUGH YOUR DEALER (certain charges may apply)

     -     Shares held for you in your dealer's street name must be sold
           through the dealer.

     WRITING TO AMERICAN FUNDS SERVICE COMPANY

     -     Requests must be signed by the registered shareholder(s).

     -     A signature guarantee is required if the redemption is:

          -  Over $50,000;

          -  Made payable to someone other than the registered
             shareholder(s); or

          -  Sent to an address other than the address of record, or an address
            of record which has been changed within the last 10 days.

          Your signature may be guaranteed by a domestic stock exchange or the
          National Association of Securities Dealers, Inc., bank, savings
          association or credit union that is an eligible guarantor institution.
          The Transfer Agent reserves the right to require a signature guarantee
          on any redemptions.


     -    Additional documentation may be required for sales of shares held in
          corporate, partnership or fiduciary accounts.

     -    You must include any shares you wish to sell that are in
          certificate form.

     TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
     FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/

     -    Redemptions by telephone or fax (including American FundsLine/(R)/ and
          American FundsLine OnLine/(R)/) are limited to $50,000 per shareholder
          each day.


                              AMCAP Fund - Page 29

<PAGE>


     -     Checks must be made payable to the registered shareholder(s).

     -    Checks must be mailed to an address of record that has been used with
          the account for at least 10 days.

     MONEY MARKET FUNDS

     -  You may have redemptions of $1,000 or more wired to your bank by
          writing American Funds Service Company.

     -  You may establish check writing privileges (use the money market funds
          application).

          -  If you request check writing privileges, you will be provided with
            checks that you may use to draw against your account. These checks
            may be made payable to anyone you designate and must be signed by
            the authorized number of registered shareholders exactly as
            indicated on your checking account signature card.

          -  Check writing is not available for Class B, C or F shares of The
            Cash Management Trust.

If you sell Class A, B or C shares and request a specific dollar amount to be
sold, we will sell sufficient shares so that the sale proceeds, after deducting
any applicable CDSC, equals the dollar amount requested.


Redemption proceeds will not be mailed until sufficient time has passed to
provide reasonable assurance that checks or drafts (including certified or
cashier's checks) for shares purchased have cleared (which may take up to 15
calendar days from the purchase date). Except for delays relating to clearance
of checks for share purchases or in extraordinary circumstances (and as
permissible under the 1940 Act), sale proceeds will be paid on or before the
seventh day following receipt and acceptance of an order. Interest will not
accrue or be paid on amounts that represent uncashed distribution or redemption
checks.


You may reinvest proceeds from a redemption or a dividend or capital gain
distribution of Class A, B, C or F shares without a sales charge in the Class A
shares of any fund in The American Funds Group within 90 days after the date of
the redemption or distribution (any CDSC on Class A or C shares will be credited
to your account). In addition, proceeds from a redemption or a dividend or
capital gain distribution of Class C shares may be reinvested in Class C shares.
Redemption proceeds of shares representing direct purchases in the money market
funds that are reinvested in non-money market funds will be subject to a sales
charge. Proceeds will be reinvested at the next calculated net asset value after
your request is received and accepted by the Transfer Agent.


                  SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders.  However, certain services and privileges may not be available if
your account is held with an investment dealer.


                              AMCAP Fund - Page 30

<PAGE>


AUTOMATIC INVESTMENT PLAN - An automatic investment plan enables you to make
monthly or quarterly investments in The American Funds through automatic debits
from your bank account. To set up a plan you must fill out an account
application and specify the amount you would like to invest ($50 minimum) and
the date on which you would like your investments to occur. The plan will begin
within 30 days after your account application is received. Your bank account
will be debited on the day or a few days before your investment is made,
depending on the bank's capabilities. The Transfer Agent will then invest your
money into the fund you specified on or around the date you specified.  For
example, if the date you specified falls on a weekend or holiday, your money
will be invested on the next business day.  If your bank account cannot be
debited due to insufficient funds, a stop-payment or the closing of the account,
the plan may be terminated and the related investment reversed. You may change
the amount of the investment or discontinue the plan at any time by writing to
the Transfer Agent.


AUTOMATIC REINVESTMENT - Dividends and capital gain distributions are reinvested
in additional shares of the same class and fund at net asset value unless you
indicate otherwise on the account application. You also may elect to have
dividends and/or capital gain distributions paid in cash by informing the fund,
the Transfer Agent or your investment dealer.


If you have elected to receive dividends and/or capital gain distributions in
cash, and the postal or other delivery service is unable to deliver checks to
your address of record, or you do not respond to mailings from American Funds
Service Company with regard to uncashed distribution checks, your distribution
option will automatically be converted to having all dividends and other
distributions reinvested in additional shares.


CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS - You may cross-reinvest
dividends and capital gains ("distributions") of the same share class into any
other fund in The American Funds Group at net asset value, subject to the
following conditions:


(a)  The aggregate value of your account(s) in the fund(s) paying distributions
equals or exceeds $5,000 (this is waived if the value of the account in the fund
receiving the distributions equals or exceeds that fund's minimum initial
investment requirement),

(b)  If the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested,

(c)  If you discontinue the cross-reinvestment of distributions, the value of
the account of the fund receiving distributions must equal or exceed the minimum
initial investment requirement. If you do not meet this requirement within 90
days of notification, the fund has the right to automatically redeem the
account.

EXCHANGE PRIVILEGE - You may only exchange shares into other funds in The
American Funds Group within the same class. However, exchanges from Class A
shares of The Cash Management Trust of America may be made to Class B or C
shares of any other American Fund for dollar cost averaging purposes. Exchange
purchases are subject to the minimum investment requirements of the fund
purchased and no sales charge generally applies. However, exchanges of shares
from the money market funds are subject to applicable sales charges on the fund
being purchased, unless the money market fund shares were acquired by an
exchange from a fund having a sales charge, or by reinvestment or
cross-reinvestment of dividends or capital gain distributions.


                              AMCAP Fund - Page 31

<PAGE>


Exchanges of Class F shares generally may only be done through fee-based
programs of investment firms and registered investment advisers with special
agreements with the fund's distributor. You may exchange shares of other classes
by writing to the Transfer Agent (see "Selling Shares"), by contacting your
investment dealer, by using American FundsLine and American FundsLine OnLine
(see "American FundsLine and American FundsLine OnLine" below), or by
telephoning 800/421-0180 toll-free, faxing (see "American Funds Service Company
Service Areas" -- "Principal Underwriter and Transfer Agent" in the prospectus
for the appropriate fax numbers) or telegraphing the Transfer Agent. (See
"Telephone and Computer Purchases, Redemptions and Exchanges" below.) Shares
held in corporate-type retirement plans for which Capital Bank and Trust Company
serves as trustee may not be exchanged by telephone, computer, fax or telegraph.
Exchange redemptions and purchases are processed simultaneously at the share
prices next determined after the exchange order is received. (See "Purchase of
Shares"--"Price of Shares.") THESE TRANSACTIONS HAVE THE SAME TAX CONSEQUENCES
AS ORDINARY SALES AND PURCHASES.


AUTOMATIC EXCHANGES - You may automatically exchange shares of the same class in
amounts of $50 or more among any of the funds in The American Funds Group on any
day (or preceding business day if the day falls on a non-business day) of each
month you designate.


AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.


ACCOUNT STATEMENTS - Your account is opened in accordance with your registration
instructions. Transactions in the account, such as additional investments will
be reflected on regular confirmation statements from the Transfer Agent.
Dividend and capital gain reinvestments, purchases through automatic investment
plans and certain retirement plans, as well as automatic exchanges and
withdrawals will be confirmed at least quarterly.


AMERICAN FUNDSLINE AND AMERICAN FUNDSLINE ONLINE - You may check your share
balance, the price of your shares, or your most recent account transaction,
redeem shares (up to $50,000 per shareholder each day) from non-retirement plan
accounts, or exchange shares around the clock with American FundsLine and
American FundsLine OnLine. To use these services, call 800/325-3590 from a
TouchTone(TM) telephone or access the American Funds Web site on the Internet at
www.americanfunds.com. Redemptions and exchanges through American FundsLine and
American FundsLine OnLine are subject to the conditions noted above and in
"Telephone and Computer Purchases, Redemptions and Exchanges" below. You will
need your fund number (see the list of funds in The American Funds Group under
"Purchase of Shares - Purchase Minimums" and "Purchase of Shares - Fund
Numbers"), personal identification number (generally the last four digits of
your Social Security number or other tax identification number associated with
your account) and account number.


TELEPHONE AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES - By using the
telephone (including American FundsLine) or computer (including American
FundsLine OnLine), fax or telegraph purchase, redemption and/or exchange
options, you agree to hold the fund, the Transfer Agent, any of its affiliates
or mutual funds managed by such affiliates, and each of their


                              AMCAP Fund - Page 32

<PAGE>


respective directors, trustees, officers, employees and agents harmless from any
losses, expenses, costs or liability (including attorney fees) which may be
incurred in connection with the exercise of these privileges. Generally, all
shareholders are automatically eligible to use these options. However, you may
elect to opt out of these options by writing the Transfer Agent (you may also
reinstate them at any time by writing the Transfer Agent). If the Transfer Agent
does not employ reasonable procedures to confirm that the instructions received
from any person with appropriate account information are genuine, it and/or the
fund may be liable for losses due to unauthorized or fraudulent instructions. In
the event that shareholders are unable to reach the fund by telephone because of
technical difficulties, market conditions, or a natural disaster, redemption and
exchange requests may be made in writing only.


REDEMPTION OF SHARES - The fund's Articles of Incorporation permits the fund to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per share if at such time the shareholder of record owns
shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in the fund's
current registration statement under the 1940 Act, and subject to such further
terms and conditions as the Board of Directors of the fund may from time to time
adopt.


SHARE CERTIFICATES - Shares are credited to your account and certificates are
not issued unless you request them by writing to the Transfer Agent.


                      EXECUTION OF PORTFOLIO TRANSACTIONS

The Investment Adviser places orders for the fund's portfolio securities
transactions. The Investment Adviser strives to obtain the best available prices
in its portfolio transactions taking into account the costs and quality of
executions. When, in the opinion of the Investment Adviser, two or more brokers
(either directly or through their correspondent clearing agents) are in a
position to obtain the best price and execution, preference may be given to
brokers who have sold shares of the fund or who have provided investment
research, statistical, or other related services to the Investment Adviser. The
fund does not consider that it has an obligation to obtain the lowest available
commission rate to the exclusion of price, service and qualitative
considerations.


There are occasions on which portfolio transactions for the fund may be executed
as part of concurrent authorizations to purchase or sell the same security for
other funds served by the Investment Adviser, or for trusts or other accounts
served by affiliated companies of the Investment Adviser. Although such
concurrent authorizations potentially could be either advantageous or
disadvantageous to the fund, they are effected only when the Investment Adviser
believes that to do so is in the interest of the fund. When such concurrent
authorizations occur, the objective is to allocate the executions in an
equitable manner. The fund will not pay a mark-up for research in principal
transactions.


Brokerage commissions paid on portfolio transactions for the fiscal years ended
2000, 1999 and 1998, amounted to $3,244,000, $3,054,000 and $1,744,000,
respectively.


                              AMCAP Fund - Page 33

<PAGE>


                              GENERAL INFORMATION

CUSTODIAN OF ASSETS - Securities and cash owned by the fund, including proceeds
from the sale of shares of the fund and of securities in the fund's portfolio,
are held by The Chase Manhattan Bank, One Chase Manhattan Plaza, New York, NY
 10081, as Custodian. If the fund holds non-U.S. securities, the Custodian may
hold these securities pursuant to sub-custodial arrangements in non-U.S. banks
or non-U.S. branches of U.S. banks.


TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the records of each shareholder's account,
processes purchases and redemptions of the fund's shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee of
$4,024,000 for Class A shares for the 2000 fiscal year.


INDEPENDENT AUDITORS - Deloitte & Touche LLP, 350 South Grand Avenue, Los
Angeles, CA 90071, serves as the fund's independent auditors providing audit
services, preparation of tax returns and review of certain documents to be filed
with the Securities and Exchange Commission. The financial statements included
in this Statement of Additional Information from the Annual Report have been so
included in reliance on the report of Deloitte & Touche LLP, independent
auditors, given on the authority of said firm as experts in accounting and
auditing. The selection of the fund's independent auditors is reviewed and
determined annually by the Board of Directors.


PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS - The fund's fiscal
year ends on February 28 or 29. Shareholders are provided updated prospectuses
annually and at least semiannually with reports showing the investment
portfolio, financial statements and other information. The fund's annual
financial statements are audited by the fund's independent auditors, Deloitte &
Touche LLP. In addition, shareholders may also receive proxy statements for the
fund. In an effort to reduce the volume of mail shareholders receive from the
fund when a household owns more than one account, the Transfer Agent has taken
steps to eliminate duplicate mailings of prospectuses, shareholder reports and
proxy statements. To receive additional copies of a prospectus, report or proxy
statement, shareholders should contact the Transfer Agent.


PERSONAL INVESTING POLICY - The fund, Capital Research and Management Company
and its affiliated companies, including the fund's principal underwriter, have
adopted codes of ethics which allow for personal investments, including
securities in which the fund may invest from time to time. This policy includes:
a ban on acquisitions of securities pursuant to an initial public offering;
restrictions on acquisitions of private placement securities; pre-clearance and
reporting requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; blackout periods on personal
investing for certain investment personnel; ban on short-term trading profits
for investment personnel; limitations on service as a director of publicly
traded companies; and disclosure of personal securities transactions.


OTHER INFORMATION - The financial statements including the investment portfolio
and the report of Independent Auditors contained in the Annual Report are
included in this Statement of Additional Information. The following information
is not included in the Annual Report:


                              AMCAP Fund - Page 34

<PAGE>


             DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND
    MAXIMUM OFFERING PRICE PER SHARE FOR CLASS A SHARES -- FEBRUARY 29, 2000

<TABLE>
<CAPTION>
<S>                                                               <C>
Net asset value and redemption price per share
  (Net assets divided by shares outstanding) . . . . . . . . .      $19.00
Maximum offering price per share
  (100/94.25 of net asset value per share,
  which takes into account the fund's current maximum
  sales charge). . . . . . . . . . . . . . . . . . . . . . . .      $20.16
</TABLE>


            CLASS A SHARE INVESTMENT RESULTS AND RELATED STATISTICS

The fund's yield was 0.67% based on a 30-day (or one month) period ended
February 29, 2000, computed by dividing the net investment income per share
earned during the period by the maximum offering price per share on the last day
of the period, according to the following formula:


     YIELD = 2[( a-b/cd + 1)/6/ -1]

     Where:  a   = dividends and interest earned during the period.

             b   = expenses accrued for the period (net of reimbursements).

             c   = the average daily number of shares outstanding during the
                   period that were entitled to receive dividends.

             d   = the maximum offering price per share on the last day of the
                   period.

The fund may also calculate a distribution rate on a taxable and tax equivalent
basis. The distribution rate is computed by dividing the dividends paid by the
fund over the last 12 months by the sum of the month-end net asset value or
maximum offering price and the capital gains paid over the last 12 months. The
distribution rate may differ from the yield.


The fund's one year total return and average annual total returns at the maximum
offering price for the five- and ten-year periods ended February 29, 2000 were
15.26%, 22.53% and 16.83%, respectively.  The fund's one year total return and
average annual total returns at net asset value for the five- and ten-year
periods ended on February 29, 2000 were 22.30%, 23.99% and 17.52%, respectively.


The average total return ("T") is computed by equating the value at the end of
the period ("ERV") with a hypothetical initial investment of $1,000 ("P") over a
period of years ("n") according to the following formula as required by the
Securities and Exchange Commission: P(1+T)/n/ = ERV.


In calculating average annual total return at the maximum offering price, the
fund assumes: (1) deduction of the maximum sales load of 5.75% from the $1,000
initial investment; (2) reinvestment of dividends and distributions at net asset
value on the reinvestment date determined by the Board; and (3) a complete
redemption at the end of any period illustrated. In addition, the fund will
provide lifetime average total return figures. From time to time, the fund may
calculate investment results for Class B, C and F shares.


                              AMCAP Fund - Page 35

<PAGE>


The fund may also, at times, calculate total return based on net asset value per
share (rather than the offering price), in which case the figure would not
reflect the effect of any sales charges which would have been paid if shares
were purchased during the period reflected in the computation. Consequently,
total return calculated in this manner will be higher. These total returns may
be calculated over periods in addition to those described above. Total return
for the unmanaged indices will be calculated assuming reinvestment of dividends
and interest, but will not reflect any deductions for advisory fees, brokerage
costs or administrative expenses.


The fund may include information on its investment results and/or comparisons of
its investment results to various unmanaged indices (such as the Dow Jones
Average of 30 Industrial Stocks and the Standard and Poor's 500 Composite Stock
Index) or results of other mutual funds or investment or savings vehicles in
advertisements or in reports furnished to present or prospective shareholders.
The fund may also, from time to time, combine its results with those of other
funds in The American Funds Group for purposes of illustrating investment
strategies involving multiple funds.


The fund may refer to results and surveys compiled by organizations such as CDA/
Wiesenberger, Ibbotson Associates, Lipper Analytical Services, Morningstar,
Inc., and by the U.S. Department of Commerce. Additionally, the fund may refer
to results published in various newspapers and periodicals, including Barron's,
Forbes, Fortune, Institutional Investor, Kiplinger's Personal Finance Magazine,
Money, U.S. News and World Report and The Wall Street Journal.


The fund may illustrate the benefits of tax-deferral by comparing taxable
investments to investments made through tax-deferred retirement plans.


The fund may compare its investment results with the Consumer Price Index, which
is a measure of the average change in prices over time in a fixed market basket
of goods and services (e.g. food, clothing, and fuels, transportation, and other
goods and services that people buy for day-to-day living).


                              AMCAP Fund - Page 36

<PAGE>




                                    APPENDIX
                          Description of Bond Ratings

BOND RATINGS - The ratings of Moody's Investors Service, Inc. (Moody's) and
Standard & Poor's Corporation (S&P) represent their opinions as to the quality
of the municipal bonds which they undertake to rate.  It should be emphasized,
however, that ratings are general and are not absolute standards of quality.
 Consequently, municipal bonds with the same maturity, coupon and rating may
have different yields, while municipal bonds of the same maturity and coupon
with different ratings may have the same yield.


Moody's rates the long-term debt securities issued by various entities from
-------
"Aaa" to "C."  Moody's applies the numerical modifiers 1, 2, and 3 in each
generic rating classification from Aa through B in its corporate bond rating
system.  The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.  Ratings are described as follows:


"Bonds which are rated Aaa are judged to be of the best quality.  They carry the
smallest degree of investment risk and are generally referred to as 'gilt edge.'
 Interest payments are protected by a large or by an exceptionally stable
margin, and principal is secure.  While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues."


"Bonds which are rated Aa are judged to be of high quality by all standards.
 Together with the Aaa group, they comprise what are generally known as
high-grade bonds.  They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities."


"Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations.  Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future."


"Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured.  Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time.  Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well."


"Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well assured.  Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future.  Uncertainty of position characterizes
bonds in this class."


"Bonds which are rated B generally lack characteristics of the desirable
investment.  Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small."


                              AMCAP Fund - Page 37

<PAGE>


"Bonds which are rated Caa are of poor standing.  Such issues may be in default
or there may be present elements of danger with respect to principal or
interest."


"Bonds which are rated Ca represent obligations which are speculative in a high
degree.  Such issues are often in default or have other marked shortcomings."


"Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing."


S & P rates the long-term securities debt of various entities in categories
-----
ranging from "AAA" to "D" according to quality.  The ratings from "AA" to "CCC"
may be modified by the addition of a plus (+) or minus (-) sign to show relative
standing within the major rating categories.  Ratings are described as follows:


"Debt rated 'AAA' has the highest rating assigned by S & P.  Capacity to pay
interest and repay principal is extremely strong."


"Debt rated 'AA' has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree."


"Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."


"Debt rated 'BBB' is regarded as having an adequate capacity to pay interest and
repay principal.  Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories."


"Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues.  However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.  The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'BBB-' rating.


"Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments.  Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.  The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating."


"The rating 'CC' is typically applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC' rating."


"The rating 'C' is typically applied to debt subordinated to senior debt which
is assigned an actual or implied 'CCC-' debt rating.  The 'C' rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued."


"The rating 'C1' is reserved for income bonds on which no interest is being
paid."


                              AMCAP Fund - Page 38

<PAGE>


"Debt rated 'D' is in payment default.  The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period.  The 'D' rating also will be used upon
the filing of a bankruptcy petition if debt service payments are jeopardized."


                              AMCAP Fund - Page 39

<TABLE>
Amcap Fund, Inc.                                             Percent
Investment Portfolio, February 29, 2000                        of Net
                                                               Assets
Largest Industry Holdings
<S>                                                          <C>      <C>       <C>
Data Processing & Reproduction                                  12.42%
Electronic Components                                           10.94%
Broadcasting & Publishing                                       10.12%
Business Services                                                9.48%
Health & Personal Care                                           7.90%
Other Industries                                                32.89%
Cash & Equivalents                                              16.25%

Largest Equity Holdings

Medtronic                                                        3.41%
Time Warner                                                      2.94%
Texas Instruments                                                2.75%
Robert Half International                                        2.54%
Viacom                                                           2.47%
Cisco Systems                                                    2.00%
AT&T Liberty Media Group                                         1.96%
Computer Associates International                                1.90%
Lexmark International Group                                      1.89%
Analog Devices                                                   1.78%


                                                             Number of   Market  Percent
                                                               Shares     Value   of Net
Equity Securitites   (common stocks)                                       (000)  Assets
--------------------------------------------                 --------  -------- --------

DATA PROCESSING & REPRODUCTION  -  12.42%
Computer Associates International, Inc.                      2,150,000  $138,272     1.90
Lexmark International Group, Inc., Class A(1)                1,150,000   137,138     1.89
Microsoft Corp.(1)                                           1,330,000   118,869     1.64
Oracle Corp.(1)                                              1,600,000   118,800     1.63
HNC Software Inc.(1)                                           850,000    83,619     1.15
3Com Corp.(1)                                                  700,000    68,600      .94
PeopleSoft, Inc.(1)                                          2,600,000    53,787      .74
Cadence Design Systems, Inc.(1)                              1,600,000    31,900      .44
Intuit Inc.(1)                                                 600,000    31,500      .43
International Business Machines Corp.                          250,000    25,500      .35
Gateway, Inc.(1)                                               365,200    25,107      .35
Hewlett-Packard Co.                                            150,000    20,175      .28
Silicon Graphics, Inc.(1)                                    1,850,000    18,153      .25
Dell Computer Corp.(1)                                         384,200    15,680      .22
Synopsys, Inc.(1)                                              200,000     7,988      .11
Compaq Computer Corp.                                          300,000     7,462      .10
ELECTRONIC COMPONENTS  -  10.94%
Texas Instruments Inc.                                       1,200,000   199,800     2.75
Analog Devices, Inc.(1)                                        825,000   129,525     1.78
Intel Corp.                                                  1,000,000   113,000     1.55
Sanmina Corp.(1)                                               775,000    90,723     1.25
SCI Systems, Inc.(1)                                         1,400,000    56,350      .78
Linear Technology Corp.                                        533,600    55,995      .77
Power Integrations, Inc.(1)                                    775,000    40,252      .55
Dallas Semiconductor Corp.                                     950,000    38,356      .53
Solectron Corp.(1)                                             400,000    26,200      .36
Jabil Circuit, Inc.(1)                                         350,000    24,303      .34
Adaptec, Inc.(1)                                               500,000    20,500      .28
BROADCASTING & PUBLISHING  -  10.12%
Time Warner Inc.                                             2,500,000   213,750     2.94
Viacom Inc., Class B(1)                                      3,224,400   179,760     2.47
AT&T Corp. Liberty Media Group, Class A(1)                   2,726,400   142,454     1.96
Infinity Broadcasting Corp., Class A(1)                      1,840,400    58,778      .81
Clear Channel Communications, Inc.(1)                          850,000    56,631      .78
Harte-Hanks, Inc.                                            2,051,200    44,742      .61
MediaOne Group, Inc.(1)                                        425,000    33,363      .46
Comcast Corp., Class A, special stock                          150,000     6,375      .09
BUSINESS SERVICES  -  9.48%
Robert Half International Inc.(1)                            4,375,000   184,844     2.54
Snyder Communications, Inc.(1)                               3,700,000    89,725
Snyder Communications, Inc.-Circle.com(1)                      625,000     5,898     1.31
Concord EFS, Inc.(1)                                         4,326,750    84,642     1.16
Paychex, Inc.                                                1,200,000    60,075      .83
Interpublic Group of Companies, Inc.                         1,265,800    50,869      .70
Avery Dennison Corp.                                           600,000    36,413      .50
Galileo International, Inc.                                  2,050,000    34,850      .48
ServiceMaster Co.                                            3,045,700    33,503      .46
Young & Rubicam Inc.                                           600,000    30,300      .42
MSC Industrial Direct Co., Inc., Class A(1)                  1,675,000    26,172      .36
Cendant Corp.(1)                                             1,039,696    18,520      .25
Sabre Holdings Corp., Class A(1)                               250,000    10,031      .14
Ventiv Health, Inc.(1)(2)                                    1,233,333     9,866      .14
IKON Office Solutions, Inc.                                  1,000,000     7,000      .10
Equifax Inc.                                                   300,000     6,356      .09
HEALTH & PERSONAL CARE  -  7.90%
Medtronic, Inc.                                              5,120,000   248,000     3.41
Guidant Corp.(1)                                             1,765,000   118,917     1.64
Pfizer Inc                                                   1,200,000    38,550      .53
Avon Products, Inc.                                          1,360,000    36,805      .51
Sybron International Corp.(1)                                  950,000    26,600      .37
Becton, Dickinson and Co.                                      800,000    24,850      .34
Gillette Co.                                                   500,000    17,625      .24
Genentech, Inc.(1)                                              90,400    17,436      .24
Stryker Corp.                                                  240,000    14,040      .19
Watson Pharmaceuticals, Inc.(1)                                300,000    12,000      .16
Cardinal Health, Inc.                                          244,589    10,089      .14
Bergen Brunswig Corp., Class A                               1,000,000     4,938      .07
ALZA Corp.(1)                                                  125,000     4,586      .06
MERCHANDISING  -  4.70%
Kohl's Corp.(1)                                                950,000    72,022      .99
Dollar General Corp.                                         3,353,200    70,207      .97
Albertson's, Inc.                                            2,500,000    61,250      .84
AutoZone, Inc.(1)                                            2,000,000    49,125      .68
Lowe's Companies, Inc.                                         995,000    47,387      .65
Consolidated Stores Corp.(1)                                 3,145,312    35,385      .49
Gap, Inc.                                                      125,000     6,039      .08
FINANCIAL SERVICES  -  3.97%
Fannie Mae                                                   2,051,000   108,703     1.50
SLM Holding Corp.                                            2,450,000    76,716     1.05
Providian Financial Corp.                                      524,200    33,975      .47
Capital One Financial Corp.                                    750,000    27,609      .38
Freddie Mac                                                    630,000    26,302      .36
Associates First Capital Corp., Class A                        400,000     7,950      .11
MBNA Corp.                                                     332,700     7,569      .10
HEALTH CARE PROVIDERS & SERVICES  -  2.92%
Medicis Pharmaceutical Corp., Class A(1)                     1,400,000    70,613      .97
Quintiles Transnational Corp.(1)                             1,884,000    55,931      .77
First Health Group Corp.(1)                                  1,400,000    33,775      .46
Stewart Enterprises, Inc., Class A                           5,200,000    22,100      .30
Cintas Corp.                                                   250,000     9,984      .14
Universal Health Services, Inc., Class B(1)                    250,000     9,719      .13
Columbia/HCA Healthcare Corp.                                  500,000     9,656      .13
Triad Hospitals, Inc.(1)                                        26,315       421      .01
LifePoint Hospitals, Inc.(1)                                    26,315       396      .01
BANKING  -  2.68%
Wells Fargo & Co.                                            2,700,000    89,269     1.22
Northern Trust Corp.                                           900,000    50,850      .70
M&T Bank Corp.                                                  85,923    31,706      .44
Bank of America Corp.                                          500,000    23,031      .32
DIVERSIFIED TELECOMMUNICATION SERVICES  -  2.58%
CenturyTel, Inc.                                             2,110,000    70,949      .98
Citizens Utilities Co., Series B(1)                          4,287,300    65,381      .90
MCI WorldCom, Inc.(1)                                        1,150,000    51,319      .70
ELECTRICAL & ELECTRONICS  -  2.25%
Cisco Systems, Inc.(1)                                       1,100,000   145,406     2.00
Lucent Technologies Inc.                                       300,000    17,850      .25
BEVERAGES & TOBACCO  -  2.14%
Philip Morris Companies Inc.                                 4,000,000    80,250     1.10
PepsiCo, Inc.                                                1,519,800    49,014      .67
Robert Mondavi Corp., Class A(1)                               366,700    13,430      .19
Beringer Wine Estates Holdings, Inc., Class B(1)               365,000    13,163      .18
CHEMICALS  -  1.61%
Cambrex Corp.                                                1,130,000    45,341      .62
RPM, Inc.                                                    3,158,000    31,580      .44
Ionics, Inc.(1)                                                700,000    19,950      .28
Praxair, Inc.                                                  350,000    11,812      .16
Airgas, Inc.(1)                                                600,000     4,163      .06
Monsanto Co.                                                   100,000     3,881      .05
WIRELESS TELECOMMUNICATION SERVICES  -  1.33%
Western Wireless Corp., Class A(1)                           1,997,900    96,898     1.33
INSURANCE  -  1.11%
American International Group, Inc.                             734,375    64,946      .89
Mercury General Corp.                                          700,000    15,881      .22
LEISURE & TOURISM  -  1.03%
Brinker International, Inc.(1)                               2,950,000    64,163      .88
Papa John's International, Inc.(1)                             450,000    10,800      .15
MACHINERY & ENGINEERING  -  1.03%
Millipore Corp.                                                900,000    48,094      .66
IDEX Corp.                                                     977,000    24,181      .34
Thermo Electron Corp.(1)                                       143,600     2,243      .03
ELECTRONIC INSTRUMENTS  -  1.01%
Applied Materials, Inc.(1)                                     400,000    73,175     1.01
ENERGY EQUIPMENT  -  0.63%
Schlumberger Ltd.                                              624,232    46,115      .63
INDUSTRIAL COMPONENTS  -  0.53%
Tower Automotive, Inc.(1)                                    1,750,000    20,781      .28
Illinois Tool Works Inc.                                       350,000    18,091      .25
IT CONSULTING & SERVICES  -  0.49%
Acxiom Corp.(1)                                                550,000    15,881      .22
Metamor Worldwide Inc.(1)                                      675,000    13,837      .19
Shared Medical Systems Corp.                                   150,000     5,841      .08
TRANSPORTATION: AIRLINES  -  0.45%
Southwest Airlines Co.                                       1,790,000    33,003      .45
BUILDING MATERIALS & COMPONENTS  -  0.45%
Elcor Corp.                                                    975,000    32,663      .45
TEXTILES & APPAREL  -  0.44%
NIKE, Inc., Class B                                          1,127,000    32,049      .44
FOOD & HOUSEHOLD PRODUCTS  -  0.29%
Colgate-Palmolive Co.                                          400,000    20,875      .29
WHOLESALE & INTERNATIONAL TRADE  -  0.27%
Tech Data Corp.(1)                                             900,000    19,519      .27
MULTI-INDUSTRY  -  0.16%
Dover Corp.                                                    300,000    11,569      .16
TRANSPORTATION: RAIL & ROAD  -  0.12%
Wisconsin Central Transportation Corp.(1)                      675,000     8,353      .12
RECREATION & OTHER CONSUMER PRODUCTS  -  0.08%
Mattel, Inc.                                                   600,000     5,775      .08

Miscellaneous  -  0.62%
Other equity securities in initial period of acquisition                  45,558      .62


                                                                      --------------------
Total Equity Securities   (cost: $3,724,191,000)                       6,088,377    83.75


                                                             Principal   Market  Percent
                                                               Amount     Value   of Net
Short-Term Securities                                            (000)     (000)  Assets
--------------------------------------------                 --------  -------- --------
Corporate Short-Term Notes  -  13.56%

Bell Atlantic Financial Services, Inc. 5.68%-5.82% due 3/6-4/  $65,400    65,196      .90
Procter & Gamble Co. 5.71%-5.83% due 3/24-4/17/2000             64,900    64,508      .89
Ford Motor Credit Co. 5.70%-5.71% due 3/17-3/22/2000            63,300    63,107      .87
Eastman Kodak Co. 5.75%-5.89% due 3/6-5/15/2000                 62,350    61,827      .85
CIT Group Holdings, Inc 5.75%-5.86% due 3/27-4/11/2000          60,350    60,056      .83
General Motors Acceptance Corp. 5.71%-5.81% due 3/9-3/21/2000   57,600    57,487      .79
H.J. Heinz Co. 5.72%-5.82% due 3/13-4/7/2000                    55,500    55,231      .76
National Rural Utilities Cooperative Finance Corp.
!5.85%-5.87% due 3/13-3/14/2000                                 55,200    55,083      .76
IBM Credit Corp. 5.71%-5.83% due 3/15-4/24/2000                 55,000    54,672      .75
Ciesco LP 5.70%-5.82% due 3/8-3/14/2000                         52,500    52,409      .72
E.I. du Pont de Nemours and Co. 5.77%-5.81% due 4/19/2000       49,600    49,199      .68
Coca-Cola Co. 5.70%-5.73% due 3/20-4/14/2000                    48,800    48,527      .67
Campbell Soup Co. 5.84% due 4/26-5/4/2000                       47,000    46,531      .64
American Express Credit Corp. 5.65% due 3/3/2000                41,800    41,780      .57
AT&T Corp. 5.75%-5.80% due 3/16-4/10/2000                       41,000    40,793      .56
USAA Capital Corp. 5.73%-5.84% due 3/1-4/27/2000                38,460    38,289      .53
Motorola, Inc. 5.72%-5.78% due 3/30-4/6/2000                    36,600    36,397      .50
Associates First Capital Corp. 5.72% due 3/29/2000              30,000    29,860      .41
Lucent Technologies Inc. 5.87% due 3/10/2000                    25,000    24,960      .34
Motorola Credit Corp. 5.78% due 4/12/2000                       20,200    20,059      .27
Associates Corp. of North America 5.92% due 3/1/2000            20,000    19,997      .27

Federal Agency Discount Notes  -  2.94%

Fannie Mae 5.67%-5.78% due 3/2-4/20/2000                       133,661   133,066     1.83
Freddie Mac 5.66%-5.79% due 3/7-6/15/2000                       80,748    80,348     1.11

                                                                      --------------------
Total Short-Term Securities   (cost: $1,199,399,000)                   1,199,382    16.50
                                                                      --------------------
Total Investment Securities   (cost:$4,923,590,000)                    7,287,759   100.25
Excess of payables over cash and receivables                              18,143      .25
                                                                      --------------------
NET ASSETS                                                             7,269,616   100.00
                                                                      --------------------
(1)  Non-income-producing securities.
(2)  The fund owns 5.09% of the outstanding voting securities of
     Ventiv Health, Inc., and thus should be considered an
     affiliate as defined by the Investment Company Act of 1940.

See Notes to Financial Statements
</TABLE>

<TABLE>
AMCAP FUND Financial Statements
-------------------------------------------       ---------------- ----------------
Statement of Assets and Liabilities
at February 29, 2000 (dollars in thousands)
-------------------------------------------       ---------------- ----------------
<S>                                               <C>              <C>
Assets:
Investment securities at market
 (cost: $4,923,590)                                                     $7,287,759
Cash                                                                           215
Receivables for--
 Sales of investments                                      $14,073
 Sales of fund's shares                                      6,903
 Dividends                                                   2,067          23,043
                                                  ----------------------------------
                                                                         7,311,017
Liabilities:
Payables for--
 Purchases of investments                                   29,320
 Repurchases of fund's shares                                5,728
 Management services                                         2,075
 Other expenses                                              4,278          41,401
                                                  ----------------------------------
Net Assets at February 29, 2000--
 Equivalent to $19.00 per share on
 382,652,230 shares of $1 par value
capital stock outstanding (authorized
capital stock--500,000,000 shares)                                      $7,269,616
                                                                   =================
Statement of Operations for the year
ended February 29, 2000 (dollars in thousands)
                                                  ----------------------------------
Investment Income:
Income:
 Dividends                                             $    32,742
 Interest                                                   58,515        $ 91,257
                                                  ------------------
Expenses:
 Management services fee                                    23,853
 Distribution expenses                                      14,744
 Transfer agent fee                                          4,024
 Reports to shareholders                                       231
 Registration statement and prospectus                         394
 Postage, stationery and supplies                              582
 Directors' fees                                               126
 Auditing and legal fees                                        53
 Custodian fee                                                 111
 Taxes other than federal income tax                            88
 Other expenses                                                217          44,423
                                                  ----------------------------------
Net investment income                                                       46,834
                                                                   -----------------
Realized Gain and Unrealized
 Appreciation on Investments:
Net realized gain                                                          999,592
Net increase in unrealized
 appreciation on investments:
 Beginning of year                                       2,082,157
 End of year                                             2,364,169
                                                  ------------------
  Net unrealized appreciation
    on investments                                                         282,012
                                                                   -----------------
 Net realized gain and unrealized
  appreciation on investments                                            1,281,604
                                                                   -----------------
Net Increase in Net Assets Resulting
 From Operations                                                        $1,328,438
                                                                   =================
See Notes to Financial Statements

Statement of Changes in Net
 Assets (dollars in thousands)
---------------------------------------------     ----------------------------------
                                                        Year ended      Year ended
                                                  February 29, 2000February 28, 1999
Operations:                                       ----------------------------------
Net investment income                                   $   46,834      $   36,888
Net realized gain on investments                           999,592         849,757
Net unrealized appreciation
 on investments                                            282,012         136,197
                                                  ----------------------------------
  Net increase in net assets
   resulting from operations                             1,328,438       1,022,842
                                                  ----------------------------------
Dividends and Distributions
  Paid to Shareholders:
Dividends from net investment income                       (34,644)        (38,213)
Distributions from net realized
 gain on investments                                      (856,319)       (673,768)
                                                  ----------------------------------
  Total dividends and distributions                       (890,963)       (711,981)
                                                  ----------------------------------
Capital Share Transactions:
Proceeds from shares sold:
 48,563,421 and 46,252,114
 shares, respectively                                      894,848         807,601
Proceeds from shares issued in
 reinvestment of net investment income
 dividends and distributions of net
 realized gain on investments:
 46,748,655 and 39,917,389 shares,
 respectively                                              836,603         663,119
Cost of shares repurchased:
 45,493,929 and 42,252,652
 shares, respectively                                     (838,228)       (733,197)
                                                  ----------------------------------
  Net increase in net assets
   resulting from capital share transactions               893,223         737,523
                                                  ----------------------------------
Total Increase in Net Assets                             1,330,698       1,048,384

Net Assets:
Beginning of year                                        5,938,918       4,890,534
                                                  ----------------------------------
End of year (including distributions in excess of
 net investment income and undistributed net
 investment income of $(807) and $3,813, respectiv      $7,269,616      $5,938,918
                                                  ==================================

See Notes to Financial Statements

</TABLE>

                         NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION - AMCAP 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 by investing in
growing, profitable companies.

     SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements.  Actual results could
differ from those estimates.  The following is a summary of the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:

     SECURITY VALUATION - Equity securities, including depositary receipts, are
valued at 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.  In
cases where equity securities are traded on more than one exchange, the
securities are valued on the exchange or market determined by the investment
adviser to be the broadest and most representative market, which may be either
a securities exchange or the over-the-counter market.  Short-term securities
maturing within 60 days are valued at amortized cost, which approximates market
value.  Securities and assets for which representative market quotations are
not readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Directors.

     SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -  Security
transactions are accounted for as of the trade date.  Realized gains and losses
from securities transactions are determined based on specific identified cost.
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 securities purchased are amortized daily over the expected life of
the security.

     DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions
paid to shareholders are recorded on the ex-dividend date.

2. FEDERAL INCOME TAXATION

The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income and net capital gains for the fiscal year.  As a regulated
investment company, the fund is not subject to income taxes if such
distributions are made.  Required distributions are determined on a tax basis
and may differ from net investment income and net realized gains for financial
reporting purposes. In addition, 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 February 29, 2000, net unrealized appreciation on investments for
book and federal income tax purposes aggregated $2,364,169,000; $2,902,246,000
related to appreciated securities and $538,077,000 related to depreciated
securities. There was no difference between book and tax realized gains on
securities transactions for the year ended February 29, 2000. The cost of
portfolio securities for book and federal income tax purposes was
$4,923,590,000 at February 29, 2000.

3. FEES AND TRANSACTIONS WITH RELATED PARTIES

   INVESTMENT ADVISORY FEE - The fee of $23,853,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Directors of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees,
accrued daily, based on an annual rate of 0.485% of the first $1 billion of
average net assets; 0.385% of such assets in excess of $1 billion but not
exceeding $2 billion; 0.355% of such assets in excess of $2 billion but not
exceeding $3 billion; 0.335% of such assets in excess of $3 billion but not
exceeding $5 billion; 0.32% of such assets in excess of $5 billion but not
exceeding $8 billion; and 0.31% of such assets in excess of $8 billion.

    DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution, the fund may
expend up to 0.25% of its average net assets annually for any activities
primarily intended to result in sales of fund shares, provided the categories
of expenses for which reimbursement is made are approved by the fund's Board of
Directors. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. During the year ended
February 29, 2000, distribution expenses under the Plan were $14,744,000. As of
February 29, 2000, accrued and unpaid distribution expenses were $3,456,000.
American Funds Distributors, Inc. (AFD), the principal underwriter of the
fund's shares, received $2,191,000 (after allowances to dealers) as its portion
of the sales charges paid by purchasers of the fund's shares. Such sales
charges are not an expense of the fund and, hence, are not reflected in the
accompanying statement of operations.

  TRANSFER AGENT FEE - American Funds Service Company (AFS), the transfer agent
for the fund, was paid a fee of $4,024,000.

  DEFERRED DIRECTORS' FEES - Directors who are unaffiliated with CRMC may elect
to defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of February 29, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Directors, were $850,000.

  CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS, and AFD. No such
persons received any remuneration directly from the fund.

4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES

   The fund made purchases and sales of investment securities, excluding
short-term securities, of $1,861,896,000 and $1,998,549,000, respectively,
during the year ended February 29, 2000.

   As of February 29, 2000, accumulated undistributed net realized gain on
investments was $399,132,000 and additional paid-in capital was $4,124,470,000.
The fund reclassified $16,810,000 and $17,870,000 from undistributed net
investment income and undistributed net realized gains, respectively, to
paid-in capital, for the year ended February 29, 2000.

   Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $111,000 includes $32,000 that was paid by these credits
rather than in cash.



<TABLE>
AMCAP FUND
Per-Share Data and Ratios
--------------------------------- ------   ------    ------   ------  ------
<S>                              <C>     <C>      <C>       <C>      <C>
                                                  Year endedFebruary 28 or 29
                                  ------   ------    ------   ------  ------
                                     2000     1999      1998     1997    1996
                                  ------   ------    ------   ------  ------
Net Asset Value, Beginning
 of Year                          $ 17.84 $  16.93 $   14.60 $ 14.40 $  12.28
                                  ------   ------    ------   ------  ------

 Income from Investment
  Operations:
   Net investment income             .13      .12       .10      .12     .16
   Net gains on securities (both
  realized and unrealized)          3.61     3.21      4.80     1.51     3.32
                                  ------   ------    ------   ------  ------
    Total from investment operati   3.74     3.33      4.90     1.63     3.48
                                  ------   ------    ------   ------  ------
 Less Distributions:
  Dividends (from net investment
   income)                          (.10)    (.13)     (.10)    (.12)   (.17)
  Distributions (from capital gai  (2.48)   (2.29)    (2.47)   (1.31)  (1.19)
                                  ------   ------    ------   ------  ------
   Total distributions             (2.58)   (2.42)    (2.57)   (1.43)  (1.36)
                                  ------   ------    ------   ------  ------
Net Asset Value, End of Year      $ 19.00 $  17.84 $   16.93 $  14.60 $ 14.40
                                  ======   ======    ======   ======  ======
Total Return/1/                    22.30%   21.07%    36.97%   11.74%  29.29%

Ratios/Supplemental Data:
 Net assets, end of year (in
  millions)                       $7,270   $5,939    $4,891   $3,807  $3,693
 Ratio of expenses to average
  net assets                         .68%     .67%      .68%     .69%    .71%
 Ratio of net income to
  average net assets                 .72%     .70%      .62%     .81%   1.16%

 Portfolio turnover rate           34.36%   36.46%    31.42%   24.14%  35.16%


/1/Excludes maximum sales charge
 of 5.75%.
</TABLE>

Independent Auditors' Report
To the Board of Directors and Shareholders of AMCAP Fund, Inc.:

 We have audited the accompanying statement of assets and liabilities of AMCAP
Fund, Inc.(the "fund"), including the investment portfolio as of February 29,
2000, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the per-share data and ratios for each of the five years in the
period then ended. These financial statements and per-share data and ratios are
the responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and per-share data and ratios based on
our audits.

 We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per-share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures include confirmation of securities owned as of
February 29, 2000, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

 In our opinion, the financial statements and per-share data and ratios
referred to above present fairly, in all material respects, the financial
position of AMCAP Fund, Inc. as of February 29, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the per-share data and ratios for
each of the five years in the period then ended, in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP

Los Angeles, California
March 30, 2000

2000 Tax Information (Unaudited)

We are required to advise you within 60 days of the fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year.  The distributions made during the fiscal year by the
fund were earned from the following sources:

<TABLE>
<CAPTION>
                                                   Dividends and Distributions per Share

To Shareholders          Payment Date              From Net                   From Net Realized
of Record                                          Investment Income          Long-Term Gains

<S>                      <C>                       <C>                        <C>
June 18, 1999            June 21, 1999             $0.03                      $0.820

December 9, 1999         December 10, 1999         0.07                       1.655

</TABLE>


Corporate shareholders may exclude up to 70% of qualifying dividends received
during the year.  For purposes of computing this exclusion, 68% of the
dividends paid by the fund from net investment income represent qualifying
dividends.

Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans and 403(b) plans need not be reported as taxable income.
However, many retirement plan trusts may need this information for their annual
information reporting.

The fund also designates as a capital gain distribution a portion of earnings
and profits paid to shareholders in redemption of their shares.

SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER TAX
INFORMATION, WHICH WAS MAILED IN JANUARY 2000, TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 1999 TAX RETURNS.  SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.