N-Q 1 gvt_nq.htm N-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM N-Q

Quarterly Schedule of Portfolio Holdings of

Registered Management Investment Company

 

Investment Company Act File Number: 811-04318

 

 

 

The American Funds Income Series

(Exact Name of Registrant as Specified in Charter)

 

333 South Hope Street,

Los Angeles, California 90071

(Address of Principal Executive Offices)

 

 

 

 

Registrant's telephone number, including area code: (213) 486-9200

 

Date of fiscal year end: August 31

 

Date of reporting period: November 30, 2013

 

 

 

 

 

Courtney R. Taylor

The American Funds Income Series

333 South Hope Street

Los Angeles, California 90071

(Name and Address of Agent for Service)

 

 

Copies to:

Michael Glazer

Bingham McCutchen LLP

355 South Grand Avenue, Suite 4400

Los Angeles, California 90071

(Counsel for the Registrant)

 
 

 

ITEM 1 – Schedule of Investments

 

 

AF_ColorLogo_Letterhead

 

 

 

 

The American Funds Income Series®

Investment portfolio

November 30, 2013

 

unaudited

Bonds, notes & other debt instruments  96.27%    
     
U.S. Treasury bonds & notes  48.10% Principal amount Value
U.S. Treasury  37.68% (000) (000)
     
U.S. Treasury 2.625% 2014 $110,445        $     112,267
U.S. Treasury 0.25% 2015 55,700        55,717
U.S. Treasury 0.375% 2015 12,250        12,278
U.S. Treasury 1.875% 2015 34,120        35,010
U.S. Treasury 11.25% 2015 90,530        102,577
U.S. Treasury 0.25% 2016 23,400        23,322
U.S. Treasury 0.625% 2016 12,740        12,794
U.S. Treasury 1.50% 2016 94,050        96,648
U.S. Treasury 1.50% 20161 76,675        78,823
U.S. Treasury 2.125% 2016 58,100        60,437
U.S. Treasury 2.375% 2016 40,200        42,094
U.S. Treasury 4.50% 2016 14,950        16,322
U.S. Treasury 4.625% 2016 49,175        55,015
U.S. Treasury 5.125% 2016 20,775        23,181
U.S. Treasury 7.50% 2016 26,275        31,619
U.S. Treasury 3.25% 2017 30,280        32,807
U.S. Treasury 4.625% 2017 60,475        68,065
U.S. Treasury 8.875% 2017 11,625        15,029
U.S. Treasury 1.00% 2018 45,650        45,284
U.S. Treasury 1.375% 2018 44,150        44,212
U.S. Treasury 1.375% 2018 13,700        13,744
U.S. Treasury 3.50% 2018 20,510        22,562
U.S. Treasury 1.375% 2020 46,500        44,878
U.S. Treasury 2.00% 2020 5,350        5,336
U.S. Treasury 8.75% 2020 5,255        7,530
U.S. Treasury 8.00% 2021 350        497
U.S. Treasury 1.625% 2022 195,333        180,263
U.S. Treasury 1.625% 2022 49,004        45,520
U.S. Treasury 1.75% 2023 60,850        56,058
U.S. Treasury 2.00% 2023 65,998        62,585
U.S. Treasury 2.50% 2023 337,075        330,822
U.S. Treasury 2.75% 2023 255,000        255,219
U.S. Treasury 6.00% 2026 8,000        10,446
U.S. Treasury 6.50% 2026 5,500        7,512
U.S. Treasury 6.25% 2030 10,500        14,345
U.S. Treasury 3.875% 2040 17,450        17,865
U.S. Treasury 2.875% 2043 96,309        79,934
U.S. Treasury 3.125% 2043 45,535        39,938
U.S. Treasury 3.625% 2043 107,950        104,385
    2,262,940
U.S. Treasury inflation-protected securities2  10.42%    
     
U.S. Treasury Inflation-Protected Security 2.00% 2014 84,466        86,134
U.S. Treasury Inflation-Protected Security 2.00% 2014 122,155        122,041
Bonds, notes & other debt instruments    
  Principal amount Value
U.S. Treasury bonds & notes  —  U.S. Treasury inflation-protected securities2  (continued) (000) (000)
     
U.S. Treasury Inflation-Protected Security 0.50% 2015 $106,249        $     108,290
U.S. Treasury Inflation-Protected Security 1.625% 2015 27,706        28,488
U.S. Treasury Inflation-Protected Security 1.875% 2015 22,227        23,380
U.S. Treasury Inflation-Protected Security 0.125% 2018 32,823        33,868
U.S. Treasury Inflation-Protected Security 0.125% 2022 15,415        15,042
U.S. Treasury Inflation-Protected Security 0.125% 2023 7,506        7,218
U.S. Treasury Inflation-Protected Security 0.375% 2023 13,693        13,450
U.S. Treasury Inflation-Protected Security 2.125% 2041 15,904        18,295
U.S. Treasury Inflation-Protected Security 0.625% 2043 214,728        169,673
    625,879
Total U.S. Treasury bonds & notes   2,888,819
Federal agency mortgage-backed obligations3  31.87%    
     
Fannie Mae 3.417% 20174 4,013        4,286
Fannie Mae 10.50% 2018 427        469
Fannie Mae 5.50% 2023 10,044        10,873
Fannie Mae 6.00% 2024 901        992
Fannie Mae 10.596% 20254 676        764
Fannie Mae 6.00% 2026 54        59
Fannie Mae 2.50% 2027 4,742        4,751
Fannie Mae 2.50% 2027 2,250        2,255
Fannie Mae 6.50% 2027 1,763        1,960
Fannie Mae 6.50% 2027 1,594        1,772
Fannie Mae 2.50% 2028 73,186        73,080
Fannie Mae 4.50% 2028 3,620        3,852
Fannie Mae 5.00% 2028 941        1,022
Fannie Mae 6.00% 2028 1,813        1,999
Fannie Mae 6.00% 2028 1,053        1,160
Fannie Mae 6.00% 2028 192        211
Fannie Mae 8.00% 2031 970        1,152
Fannie Mae 2.423% 20334 916        969
Fannie Mae 2.50% 20354 469        499
Fannie Mae 2.767% 20364 1,346        1,421
Fannie Mae 2.233% 20374 625        664
Fannie Mae 6.00% 2037 615        679
Fannie Mae 6.00% 2037 424        468
Fannie Mae 6.00% 2037 203        223
Fannie Mae 6.50% 2037 800        869
Fannie Mae 6.50% 2037 694        754
Fannie Mae 6.50% 2037 255        277
Fannie Mae 7.00% 2037 929        1,048
Fannie Mae 7.00% 2037 500        564
Fannie Mae 7.00% 2037 26        29
Fannie Mae 7.50% 2037 104        119
Fannie Mae 2.597% 20384 3,153        3,364
Fannie Mae 3.00% 2038 13,202        12,840
Fannie Mae 3.00% 2038 8,921        8,677
Fannie Mae 5.50% 2038 11,813        12,943
Fannie Mae 6.00% 2038 684        733
Fannie Mae 7.00% 2038 1,808        2,040
Fannie Mae 6.00% 2039 30,150        33,261
Fannie Mae 3.245% 20404 7,612        8,105
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency mortgage-backed obligations3  (continued) (000) (000)
     
Fannie Mae 3.553% 20404 $       964        $    1,028
Fannie Mae 4.194% 20404 2,479        2,634
Fannie Mae 4.394% 20404 4,154        4,422
Fannie Mae 4.50% 2040 1,689        1,807
Fannie Mae 5.00% 2040 1,098        1,205
Fannie Mae 3.231% 20414 6,471        6,774
Fannie Mae 3.426% 20414 3,491        3,682
Fannie Mae 3.51% 20414 4,779        5,001
Fannie Mae 3.771% 20414 5,512        5,878
Fannie Mae 4.00% 2041 12,580        13,213
Fannie Mae 4.00% 2041 11,023        11,509
Fannie Mae 4.50% 2041 9,049        9,687
Fannie Mae 4.50% 2041 5,112        5,471
Fannie Mae 5.00% 2041 3,249        3,578
Fannie Mae 5.00% 2041 2,476        2,727
Fannie Mae 5.00% 2041 1,606        1,770
Fannie Mae 5.00% 2041 1,114        1,228
Fannie Mae 2.951% 20424 5,611        5,760
Fannie Mae 3.00% 2042 44,804        43,351
Fannie Mae 3.50% 2042 15,261        15,418
Fannie Mae 3.50% 2042 10,991        11,104
Fannie Mae 3.50% 2042 8,846        8,946
Fannie Mae 3.50% 2042 1,323        1,317
Fannie Mae 3.50% 2042 755        752
Fannie Mae 3.50% 2042 182        181
Fannie Mae 3.50% 2042 22        22
Fannie Mae 2.515% 20434 4,306        4,300
Fannie Mae 3.00% 2043 73,250        70,875
Fannie Mae 3.00% 2043 61,056        59,077
Fannie Mae 3.00% 2043 43,345        41,940
Fannie Mae 3.00% 2043 30,900        29,898
Fannie Mae 3.00% 2043 11,395        11,009
Fannie Mae 3.00% 2043 8,885        8,469
Fannie Mae 3.00% 2043 7,790        7,538
Fannie Mae 3.00% 2043 7,538        7,294
Fannie Mae 3.00% 2043 5,788        5,600
Fannie Mae 3.00% 2043 5,077        4,912
Fannie Mae 3.00% 2043 4,187        4,045
Fannie Mae 3.00% 2043 4,075        3,943
Fannie Mae 3.00% 2043 3,920        3,737
Fannie Mae 3.50% 2043 19,357        19,556
Fannie Mae 3.50% 2043 5,798        5,777
Fannie Mae 3.50% 2043 2,161        2,152
Fannie Mae 3.50% 2043 1,269        1,264
Fannie Mae 3.50% 2043 699        696
Fannie Mae 3.50% 2043 623        620
Fannie Mae 3.50% 2043 608        606
Fannie Mae 3.50% 2043 521        518
Fannie Mae 3.50% 2043 430        428
Fannie Mae 3.50% 2043 103        103
Fannie Mae 4.00% 2043 43,986        46,104
Fannie Mae 4.50% 2043 186,625        199,229
Fannie Mae 5.50% 2043 15,435        16,888
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency mortgage-backed obligations3  (continued) (000) (000)
     
Fannie Mae 6.00% 2043 $    5,365        $    5,916
Fannie Mae 4.50% 2044 174,484        185,723
Fannie Mae 6.833% 20474 592        639
Fannie Mae, Series 2001-4, Class NA, 10.682% 20254 197        220
Fannie Mae, Series 2001-25, Class ZA, 6.50% 2031 495        549
Fannie Mae, Series 2001-20, Class E, 9.572% 20314 23        26
Fannie Mae, Series 2006-49, Class PA, 6.00% 2036 322        359
Fannie Mae, Series 2005-29, Class AK, 4.50% 2035 2,069        2,096
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035 6,997        7,820
Fannie Mae, Series 2006-83, Class AO, principal only, 0% 2036 2,243        2,016
Fannie Mae, Series 2006-56, Class OG, principal only, 0% 2036 1,665        1,513
Fannie Mae, Series 2006-65, Class PF, 0.446% 20364 2,057        2,060
Fannie Mae, Series 2007-33, Class HE, 5.50% 2037 2,549        2,789
Fannie Mae, Series 2007-40, Class PT, 5.50% 2037 1,242        1,369
Fannie Mae, Series 1999-T2, Class A-1, 7.50% 20394 469        526
Freddie Mac 10.00% 2025 290        326
Freddie Mac 6.00% 2026 1,640        1,809
Freddie Mac 6.00% 2027 3,559        3,927
Freddie Mac 4.50% 2029 2,007        2,162
Freddie Mac 4.50% 2029 256        274
Freddie Mac 4.50% 2029 139        150
Freddie Mac 4.50% 2030 282        302
Freddie Mac 5.50% 2033 135        147
Freddie Mac 2.476% 20354 2,728        2,879
Freddie Mac 3.013% 20364 870        904
Freddie Mac 2.132% 20374 378        399
Freddie Mac 5.50% 2037 132        143
Freddie Mac 5.50% 2037 117        127
Freddie Mac 6.50% 2037 511        555
Freddie Mac 6.50% 2037 66        72
Freddie Mac 4.879% 20384 985        1,048
Freddie Mac 5.50% 2038 33,866        36,760
Freddie Mac 5.50% 2038 20,378        22,119
Freddie Mac 5.50% 2038 12,980        14,067
Freddie Mac 5.50% 2038 9,978        10,831
Freddie Mac 5.50% 2038 440        477
Freddie Mac 5.50% 2038 359        389
Freddie Mac 5.50% 2038 171        186
Freddie Mac 5.50% 2039 13,888        15,077
Freddie Mac 5.50% 2039 1,293        1,406
Freddie Mac 4.50% 2040 308        331
Freddie Mac 5.50% 2040 6,943        7,571
Freddie Mac 3.233% 20414 4,996        5,230
Freddie Mac 3.405% 20414 6,645        7,003
Freddie Mac 4.50% 2041 2,034        2,172
Freddie Mac 4.50% 2041 865        924
Freddie Mac 4.50% 2041 604        645
Freddie Mac 4.50% 2041 11        12
Freddie Mac 5.00% 2041 7,829        8,599
Freddie Mac 2.561% 20424 7,041        7,070
Freddie Mac 2.581% 20424 2,971        3,047
Freddie Mac 3.00% 2042 46,140        44,473
Freddie Mac 3.00% 2042 36,905        35,572
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency mortgage-backed obligations3  (continued) (000) (000)
     
Freddie Mac 3.00% 2042 $  2,778        $  2,678
Freddie Mac 3.50% 2042 987        984
Freddie Mac 2.096% 20434 2,911        2,985
Freddie Mac 2.352% 20434 12,968        12,847
Freddie Mac 2.432% 20434 5,115        5,100
Freddie Mac 3.50% 2043 664        662
Freddie Mac 3.50% 2043 477        476
Freddie Mac 3.50% 2043 449        447
Freddie Mac 4.00% 2043 64,750        67,342
Freddie Mac 4.00% 2043 19,086        19,916
Freddie Mac 4.00% 2043 12,086        12,637
Freddie Mac 4.00% 2043 10,496        10,975
Freddie Mac 4.00% 2043 2,768        2,895
Freddie Mac 4.00% 2043 2,490        2,598
Freddie Mac 4.00% 2043 2,078        2,173
Freddie Mac 4.00% 2043 1,780        1,857
Freddie Mac 4.00% 2043 1,660        1,732
Freddie Mac 4.00% 2043 641        669
Freddie Mac, Series 2356, Class GD, 6.00% 2016 659        692
Freddie Mac, Series 2289, Class NA, 10.519% 20204 87        93
Freddie Mac, Series 2289, Class NB, 10.15% 20224 41        46
Freddie Mac, Series 1567, Class A, 0.568% 20234 20        20
Freddie Mac, Series 2626, Class NG, 3.50% 2023 112        116
Freddie Mac, Series 1617, Class PM, 6.50% 2023 493        549
Freddie Mac, Series 2153, Class GG, 6.00% 2029 923        1,027
Freddie Mac, Series 3061, Class PN, 5.50% 2035 1,064        1,177
Freddie Mac, Series 3156, Class PO, principal only, 0% 2036 2,916        2,707
Freddie Mac, Series 3146, Class PO, principal only, 0% 2036 1,356        1,259
Freddie Mac, Series 3213, Class OG, principal only, 0% 2036 1,159        1,073
Freddie Mac, Series 3156, Class PF, 0.418% 20364 3,463        3,462
Freddie Mac, Series 3257, Class PA, 5.50% 2036 1,825        2,017
Freddie Mac, Series 3233, Class PA, 6.00% 2036 2,255        2,514
Freddie Mac, Series 3272, Class PA, 6.00% 2037 2,198        2,437
Government National Mortgage Assn. 10.00% 2019 243        279
Government National Mortgage Assn. 10.00% 2021 99        109
Government National Mortgage Assn. 3.00% 2026 23,518        24,258
Government National Mortgage Assn. 3.00% 2027 6,779        6,993
Government National Mortgage Assn. 6.50% 2029 1,096        1,253
Government National Mortgage Assn. 6.50% 2032 1,085        1,229
Government National Mortgage Assn. 6.50% 2037 718        812
Government National Mortgage Assn. 5.50% 2038 1,530        1,677
Government National Mortgage Assn. 5.50% 2038 163        174
Government National Mortgage Assn. 6.00% 2038 1,431        1,604
Government National Mortgage Assn. 6.50% 2038 699        787
Government National Mortgage Assn. 6.50% 2038 676        765
Government National Mortgage Assn. 6.50% 2038 667        759
Government National Mortgage Assn. 6.50% 2038 410        467
Government National Mortgage Assn. 3.50% 20394 4,207        4,443
Government National Mortgage Assn. 4.00% 2039 1,078        1,140
Government National Mortgage Assn. 5.00% 2039 3,649        3,974
Government National Mortgage Assn. 6.00% 2039 9,064        10,185
Government National Mortgage Assn. 6.50% 2039 1,088        1,275
Government National Mortgage Assn. 4.50% 2040 2,694        2,922
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency mortgage-backed obligations3  (continued) (000) (000)
     
Government National Mortgage Assn. 5.00% 2040 $  2,932        $         3,199
Government National Mortgage Assn. 5.00% 2040 1,079        1,175
Government National Mortgage Assn. 5.50% 2040 12,321        13,817
Government National Mortgage Assn. 3.50% 2041 1,313        1,325
Government National Mortgage Assn. 4.00% 2041 364        373
Government National Mortgage Assn. 4.50% 2041 32,690        35,433
Government National Mortgage Assn. 4.50% 2041 13,223        14,291
Government National Mortgage Assn. 5.00% 2041 19,473        21,215
Government National Mortgage Assn. 5.00% 2041 328        347
Government National Mortgage Assn. 5.50% 2041 1,106        1,177
Government National Mortgage Assn. 5.50% 2041 547        583
Government National Mortgage Assn. 5.50% 2041 356        379
Government National Mortgage Assn. 6.00% 2041 97        104
Government National Mortgage Assn. 6.50% 2041 7,913        8,583
Government National Mortgage Assn. 3.50% 2042 1,074        1,084
Government National Mortgage Assn. 4.00% 2042 6,324        6,603
Government National Mortgage Assn. 4.00% 2042 3,332        3,479
Government National Mortgage Assn. 3.50% 2043 7,830        8,010
Government National Mortgage Assn. 4.00% 2043 36,440        38,513
Government National Mortgage Assn. 4.50% 2043 20,769        22,456
Government National Mortgage Assn. 4.50% 2043 19,000        20,540
Government National Mortgage Assn. 5.922% 2058 12,949        14,056
Government National Mortgage Assn. 6.172% 2058 264        285
Government National Mortgage Assn. 6.22% 2058 4,043        4,321
Government National Mortgage Assn., Series 2003-116, Class JD, 5.00% 2032 3,990        4,156
Government National Mortgage Assn., Series 2003-46, 5.00% 2033 5,942        6,458
Government National Mortgage Assn., Series 2003, 6.116% 2058 3,119        3,396
Vendee Mortgage Trust, Series 2011-2, Class V, 3.75% 2028 14,400        15,197
Vendee Mortgage Trust, Series 2008-1, Class GD, 5.25% 2032 20,003        22,671
Vendee Mortgage Trust, Series 2011-2, Class DA, 3.75% 2033 16,371        17,371
Vendee Mortgage Trust, Series 2010-1, Class DA, 4.25% 2035 6,101        6,377
National Credit Union Administration, Series 2010-R2, Class 1A, 0.539% 20174 800        802
National Credit Union Administration, Series 2011-R3, Class 1A, 0.569% 20204 1,679        1,687
National Credit Union Administration, Series 2011-R1, Class 1A, 0.619% 20204 978        984
FDIC Structured Sale Guaranteed Notes, Series 2010-S1, Class 1-A, 0.718% 20484,5 819        821
    1,913,587
     
Federal agency bonds & notes  16.29%    
     
Freddie Mac 0.375% 2014 75,250        75,293
Freddie Mac 1.75% 2015 33,375        34,234
Freddie Mac 1.00% 2017 18,525        18,591
Freddie Mac 1.25% 2019 51,820        49,883
Freddie Mac, Series K003, Class A2, multifamily 3.607% 20143 1,946        1,961
Freddie Mac, Series K501, Class A1, multifamily 1.337% 20163 3,895        3,946
Freddie Mac, Series K705, Class A2, multifamily 2.303% 20183 2,112        2,167
Freddie Mac, Series K706, Class A2, multifamily 2.323% 20183 3,300        3,384
Freddie Mac, Series K704, Class A2, multifamily 2.412% 20183 3,225        3,336
Freddie Mac, Series K711, Class A2, multifamily 1.73% 20193 4,425        4,343
Freddie Mac, Series K712, Class A2, multifamily 1.869% 20193 3,250        3,196
Freddie Mac, Series K710, Class A2, multifamily 1.883% 20193 2,480        2,470
Freddie Mac, Series K709, Class A2, multifamily 2.086% 20193 1,870        1,885
Freddie Mac, Series KF02, Class A-3, multifamily 0.83% 20203,4 2,930        2,935
Freddie Mac, Series K015, Class A1, multifamily 2.257% 20203 3,214        3,293
Bonds, notes & other debt instruments      
  Principal amount Value
Federal agency bonds & notes  (continued) (000) (000)
     
Freddie Mac, Series K009, Class A1, multifamily 2.757% 20203 $  1,478        $  1,544
Freddie Mac, Series K014, Class A1, multifamily 2.788% 20203 3,418        3,602
Freddie Mac, Series K013, Class A1, multifamily 2.902% 20203 3,735        3,907
Freddie Mac, Series K010, Class A1, multifamily 3.32% 20203 2,822        3,022
Freddie Mac, Series KGRP, Class A, multifamily 0.546% 20203,4 3,135        3,141
Freddie Mac, Series K019, Class A1, multifamily 1.459% 20213 2,112        2,080
Freddie Mac, Series K017, Class A2, multifamily 2.873% 20213 4,300        4,306
Freddie Mac, Series KS01, Class A1, multifamily 1.693% 20223 902        901
Freddie Mac, Series K023, Class A2, multifamily 2.307% 20223 15,140        14,273
Freddie Mac, Series K022, Class A2, multifamily 2.355% 20223 4,425        4,192
Freddie Mac, Series K020, Class A2, multifamily 2.373% 20223 21,325        20,347
Freddie Mac, Series K021, Class A2, multifamily 2.396% 20223 15,580        14,884
Freddie Mac, Series K024, Class A2, multifamily 2.573% 20223 5,000        4,790
Freddie Mac, Series K031, Class A1, multifamily 2.778% 20223 2,743        2,854
Freddie Mac, Series K030, Class A1, multifamily 2.779% 20223 3,369        3,503
Freddie Mac, Series KS01, Class A2, multifamily 2.522% 20233 6,200        5,933
Freddie Mac, Series K035, Class A1, multifamily 2.615% 20233,6 3,675        3,735
Freddie Mac, Series K033, Class A1, multifamily 2.871% 20233 16,753        17,333
Freddie Mac, Series K032, Class A1, multifamily 3.016% 20233 4,797        5,026
Freddie Mac, Series K033, Class A2, multifamily 3.06% 20233,4 17,165        16,898
Freddie Mac, Series K028, Class A2, multifamily 3.111% 20233 4,000        3,983
Freddie Mac, Series K030, Class A2, multifamily 3.25% 20233,4 7,305        7,336
Freddie Mac, Series K031, Class A2, multifamily 3.30% 20233,4 15,487        15,585
Freddie Mac, Series K032, Class A2, multifamily 3.31% 20233,4 52,000        52,304
Freddie Mac, Series K029, Class A2, multifamily 3.32% 20233,4 7,200        7,288
Freddie Mac, Series K035, Class A2, multifamily 3.458% 20233,4,6 79,000        79,963
Freddie Mac, Series K034, Class A-2, multifamily 3.531% 20233,4 2,415        2,464
Federal Home Loan Bank 0.375% 2015 61,000        61,090
Federal Home Loan Bank 2.75% 2015 8,500        8,762
Federal Home Loan Bank 0.625% 2016 12,020        12,012
Federal Home Loan Bank 3.375% 2023 14,160        14,307
Federal Home Loan Bank 5.50% 2036 700        828
Federal Home Loan Bank, Series 2816, 1.00% 2017 43,705        43,922
Federal Farm Credit Banks 1.625% 2014 33,225        33,661
Federal Farm Credit Banks 0.60% 2017 74,292        73,627
Fannie Mae 0.75% 2013 67,575        67,595
Fannie Mae 3.00% 2014 4,500        4,599
Fannie Mae 7.125% 2030 3,000        4,147
Fannie Mae, Series 2012-M5, Class A1, multifamily 1.787% 20223 1,735        1,743
Fannie Mae, Series 2013-M4, multifamily 2.608% 20223 4,225        4,136
Fannie Mae, Series 2012-M2, Class A2, multifamily 2.717% 20223 4,325        4,266
Fannie Mae, Series 2012-M3, Class 1-A2, multifamily 3.044% 20223 3,500        3,531
Fannie Mae, Series 2013-M14, Class A2, multifamily 3.329% 20233,4 3,075        3,068
Fannie Mae, Series 2003-M2, Class D, multifamily 4.68% 20333,4 6,054        6,389
Tennessee Valley Authority, Series A, 3.875% 2021 8,500        9,170
Tennessee Valley Authority 1.875% 2022 18,350        16,579
TVA Southaven 3.846% 20333 3,125        3,174
Tennessee Valley Authority 4.65% 2035 3,930        4,008
Tennessee Valley Authority 5.88% 2036 2,750        3,238
Tennessee Valley Authority 5.25% 2039 11,000        11,960
Tennessee Valley Authority, Series B, 3.50% 2042 11,570        9,285
Tennessee Valley Authority, Series 2008, Class A, 4.875% 2048 3,300        3,260
United States Agency for International Development, Republic of Egypt 4.45% 2015 19,000        20,359
Bonds, notes & other debt instruments      
  Principal amount Value
Federal agency bonds & notes  (continued) (000) (000)
     
Jordan (Kingdom of) 2.503% 2020 $    8,200        $         8,238
United States Agency for International Development, State of Israel, Class 1-A, 5.50% 2023 5,000        5,945
Private Export Funding Corp. 1.375% 2017 3,750        3,818
Private Export Funding Corp. 1.45% 2019 5,250        5,107
Small Business Administration, Series SBIC-PS 2006-10A, Participating Securities, 5.408% 20163 831        876
Small Business Administration, Series 2001-20K, 5.34% 20213 588        641
Small Business Administration, Series 2001-20J, 5.76% 20213 231        253
Small Business Administration, Series 2001-20F, 6.44% 20213 1,030        1,141
Small Business Administration, Series 2003-20B, 4.84% 20233 2,839        3,085
United States Government-Guaranteed Certificates of Participation,    
Overseas Private Investment Corp, 0% 20166 983        984
United States Government-Guaranteed Certificates of Participation,    
Overseas Private Investment Corp, 3.49% 20293,6 1,765        1,760
United States Government-Guaranteed Certificates of Participation,    
Overseas Private Investment Corp, 3.938% 20323 1,522        1,521
    978,196
     
Asset-backed obligations3  0.01%    
     
PE Environmental Funding LLC, Series 2007-A, Class A-1, 4.982% 2016 337        341
Total bonds, notes & other debt instruments  (cost: $5,769,274,000)   5,780,943
     
Short-term securities  10.80%      
     
Freddie Mac 0.09%–0.14% due 12/10/2013–9/16/2014 321,800        321,622
Federal Home Loan Bank 0.055%–0.165% due 12/11/2013–7/1/2014 221,650        221,570
Fannie Mae 0.08%–0.12% due 12/16/2013–2/3/2014 50,285        50,279
ExxonMobil Corp. 0.05% due 12/3/2013 50,000        50,000
Federal Farm Credit Banks 0.10% due 6/16/2014 5,000        4,996
Total short-term securities (cost: $648,457,000)   648,467
Total investment securities (cost: $6,417,731,000)   6,429,410
Other assets less liabilities   (424,304)
Net assets   $6,005,106

 

Interest rate swaps

 

The fund has entered into interest rate swaps as shown in the following table. The average notional amount of interest rate swaps was $229,000,000 over the prior one-month period.

          Unrealized
          (depreciation)
        Notional appreciation
        amount at 11/30/2013
Pay/receive floating rate Floating rate index Fixed rate Expiration date (000) (000)
Receive 3-month USD-LIBOR 1.49% 11/29/2018  $  50,000  $      (73)
Receive 3-month USD-LIBOR 2.74125 11/22/2023 79,000 574
Receive 3-month USD-LIBOR 2.7343 11/22/2023 100,000 791
          $1,292

 

1 A portion of this security was pledged as collateral for net losses on unsettled interest rate swaps. The total value of pledged collateral was $11,439,000, which represented .19% of the net assets of the fund.

2 Index-linked bond whose principal amount moves with a government price index.

3 Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

4 Coupon rate may change periodically.

5 Acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $821,000, which represented .01% of the net assets of the fund.

6 Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities was $86,442,000, which represented 1.44% of the net assets of the fund.

 

 

Valuation disclosures

 

Capital Research and Management Company (“CRMC”), the fund’s investment adviser, values the fund’s investments at fair value as defined by accounting principles generally accepted in the United States of America. The net asset value of each share class of the fund is generally determined as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open. Security transactions are recorded by the fund as of the date the trades are executed with brokers.

Methods and inputs — The fund’s investment adviser uses the following methods and inputs to establish the fair value of the fund’s assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are generally valued at prices obtained from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.

Fixed-income class Examples of standard inputs
All Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”)
Bonds & notes of governments & government agencies Standard inputs and interest rate volatilities
Mortgage-backed; asset-backed obligations Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information

 

When the fund’s investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income securities will be valued in good faith at the mean quoted bid and ask prices that are reasonably and timely available (or bid prices, if ask prices are not available) or at prices for securities of comparable maturity, quality and type.

Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates fair value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days. Interest rate swaps are generally valued by pricing vendors based on market inputs that include the index and term of index, reset frequency, payer/receiver, currency, and pay frequency.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the fund’s investment adviser are fair valued as determined in good faith under fair valuation guidelines adopted by authority of the fund’s board of trustees as further described. The investment adviser follows fair valuation guidelines, consistent with U.S. Securities and Exchange Commission rules and guidance, to consider relevant principles and factors when making fair value determinations. The investment adviser considers relevant indications of value that are reasonably and timely available to it in determining the fair value to be assigned to a particular security, such as the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.

Processes and structure — The fund’s board of trustees has delegated authority to the fund’s investment adviser to make fair value determinations, subject to board oversight. The investment adviser has established a Joint Fair Valuation Committee (the “Fair Valuation Committee”) to administer, implement and oversee the fair valuation process, and to make fair value decisions. The Fair Valuation Committee regularly reviews its own fair value decisions, as well as decisions made under its standing instructions to the investment adviser’s valuation teams. The Fair Valuation Committee reviews changes in fair value measurements from period to period and may, as deemed appropriate, update the fair valuation guidelines to better reflect the results of back testing and address new or evolving issues. The Fair Valuation Committee reports any changes to the fair valuation guidelines to the board of trustees with supplemental information to support the changes. The fund’s board and audit committee also regularly review reports that describe fair value determinations and methods.

The fund’s investment adviser has also established a Fixed-Income Pricing Review Group to administer and oversee the fixed-income valuation process, including the use of fixed-income pricing vendors. This group regularly reviews pricing vendor information and market data. Pricing decisions, processes and controls over security valuation are also subject to additional internal reviews, including an annual control self-evaluation program facilitated by the investment adviser’s compliance group.

Classifications — The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. At November 30, 2013, all of the fund’s investments were classified as Level 2.

 

Federal income tax information (dollars in thousands)
   
Gross unrealized appreciation on investment securities $     45,749
Gross unrealized depreciation on investment securities (47,143)
Net unrealized depreciation on investment securities (1,394)
Cost of investment securities for federal income tax purposes 6,430,804

 

 

 

 

 

 

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus and summary prospectus, which can be obtained from your financial professional and should be read carefully before investing. You may also call American Funds Service Company (AFS) at (800) 421-4225 or visit the American Funds website at americanfunds.com.

 

 

 

 

 

MFGEFPX-022-0114O-S37684

  

ITEM 2 – Controls and Procedures

 

The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.

 

There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

 

ITEM 3 – Exhibits

 

The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  THE AMERICAN FUNDS INCOME SERIES
   
  By /s/ Thomas H. Høgh
 

Thomas H. Høgh, President and

Principal Executive Officer

   
  Date: January 28, 2014

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

 

By /s/ Thomas H. Høgh

Thomas H. Høgh, President and

Principal Executive Officer

 
Date: January 28, 2014

 

 

 

By /s/ Karl C. Grauman

Karl C. Grauman, Treasurer and

Principal Financial Officer

 
Date: January 28, 2014