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: May 31, 2014

 

 

 

 

 

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

 

 

 

 

 

 

 

U.S. Government Securities Fund

Investment portfolio

May 31, 2014

 

unaudited

Bonds, notes & other debt instruments  92.70%    
     
U.S. Treasury bonds & notes  55.03% Principal amount Value
U.S. Treasury  45.19% (000) (000)
     
U.S. Treasury 2.625% 2014 $  55,225        $  55,458
U.S. Treasury 0.375% 2015 18,700        18,754
U.S. Treasury 1.875% 2015 11,435        11,651
U.S. Treasury 11.25% 2015 45,265        48,825
U.S. Treasury 0.25% 2016 23,400        23,354
U.S. Treasury 0.625% 2016 8,190        8,221
U.S. Treasury 1.00% 2016 10,750        10,873
U.S. Treasury 1.50% 2016 94,050        96,203
U.S. Treasury 1.50% 20161 76,675        78,421
U.S. Treasury 2.125% 2016 58,100        59,977
U.S. Treasury 2.375% 2016 30,700        31,869
U.S. Treasury 4.50% 2016 14,950        16,028
U.S. Treasury 4.625% 2016 49,175        54,056
U.S. Treasury 5.125% 2016 10,025        10,956
U.S. Treasury 7.50% 2016 26,275        30,736
U.S. Treasury 0.625% 2017 44,250        43,837
U.S. Treasury 0.75% 2017 66,250        66,074
U.S. Treasury 0.875% 2017 43,000        43,249
U.S. Treasury 1.00% 2017 27,000        27,207
U.S. Treasury 2.75% 2017 41,000        43,366
U.S. Treasury 3.25% 2017 15,140        16,213
U.S. Treasury 4.625% 2017 58,475        64,700
U.S. Treasury 8.875% 2017 11,625        14,570
U.S. Treasury 1.25% 2018 22,000        21,893
U.S. Treasury 1.25% 2018 22,000        21,865
U.S. Treasury 1.375% 2018 28,855        28,850
U.S. Treasury 1.375% 2018 7,600        7,613
U.S. Treasury 1.50% 2018 21,750        21,929
U.S. Treasury 2.375% 2018 35,000        36,608
U.S. Treasury 1.50% 2019 44,000        44,077
U.S. Treasury 1.50% 2019 43,750        43,858
U.S. Treasury 1.625% 2019 43,750        44,025
U.S. Treasury 1.125% 2020 56,500        54,406
U.S. Treasury 1.25% 2020 56,500        54,900
U.S. Treasury 1.375% 2020 47,500        46,279
U.S. Treasury 2.00% 2020 4,950        4,976
U.S. Treasury 8.75% 2020 5,255        7,396
U.S. Treasury 2.25% 2021 224,250        227,520
U.S. Treasury 8.00% 2021 350        494
U.S. Treasury 1.625% 2022 80,258        76,051
U.S. Treasury 1.625% 2022 71,479        68,052
U.S. Treasury 2.00% 2023 51,498        50,131
U.S. Treasury 2.50% 2023 259,425        261,778
U.S. Treasury 2.75% 2023 340,900        350,582
Bonds, notes & other debt instruments    
  Principal amount Value
U.S. Treasury bonds & notes  —  U.S. Treasury  (continued) (000) (000)
     
U.S. Treasury 2.75% 2024 $192,700        $     197,745
U.S. Treasury 6.25% 2030 5,250        7,494
U.S. Treasury 4.75% 2037 23,750        29,966
U.S. Treasury 5.00% 2037 8,600        11,207
U.S. Treasury 4.375% 2038 33,500        40,150
U.S. Treasury 2.875% 2043 51,109        46,833
U.S. Treasury 3.125% 2043 21,250        20,519
U.S. Treasury 3.625% 2043 35,100        37,189
U.S. Treasury 3.375% 2044 3,650        3,686
U.S. Treasury 3.625% 2044 3,450        3,653
    2,746,323
U.S. Treasury inflation-protected securities2  9.84%    
     
U.S. Treasury Inflation-Protected Security 2.00% 2014    85,225        85,824
U.S. Treasury Inflation-Protected Security 0.50% 2015    107,203        108,917
U.S. Treasury Inflation-Protected Security 1.625% 2015    27,955        28,497
U.S. Treasury Inflation-Protected Security 0.125% 2016    44,149        45,342
U.S. Treasury Inflation-Protected Security 2.00% 2016    23,806        25,155
U.S. Treasury Inflation-Protected Security 0.125% 2022    7,777        7,832
U.S. Treasury Inflation-Protected Security 0.125% 2023    7,574        7,558
U.S. Treasury Inflation-Protected Security 0.375% 2023    13,816        14,113
U.S. Treasury Inflation-Protected Security 0.625% 2024    105,426        109,397
U.S. Treasury Inflation-Protected Security 2.125% 2041    16,047        20,453
U.S. Treasury Inflation-Protected Security 1.375% 2044    132,471        144,703
    597,791
Total U.S. Treasury bonds & notes   3,344,114
Federal agency mortgage-backed obligations3  22.43%    
     
Fannie Mae 3.307% 20174 3,981        4,223
Fannie Mae 10.50% 2018    339        382
Fannie Mae 5.50% 2023    1,479        1,617
Fannie Mae 6.00% 2024    815        905
Fannie Mae 10.552% 20254     553        622
Fannie Mae 6.00% 2026    46        52
Fannie Mae 2.50% 2027    4,474        4,562
Fannie Mae 2.50% 2027    2,155        2,197
Fannie Mae 3.00% 2027    25,815        26,875
Fannie Mae 3.00% 2027    864        899
Fannie Mae 6.50% 2027    1,668        1,887
Fannie Mae 6.50% 2027    645        729
Fannie Mae 5.00% 2028    798        881
Fannie Mae 4.50% 20295 3,620        3,848
Fannie Mae 8.00% 2031    904        1,067
Fannie Mae 2.224% 20334     798        838
Fannie Mae 2.405% 20354     429        457
Fannie Mae 2.517% 20364     1,069        1,128
Fannie Mae 2.213% 20374     605        644
Fannie Mae 6.50% 2037    669        746
Fannie Mae 6.50% 2037    597        665
Fannie Mae 6.50% 2037    222        248
Fannie Mae 7.00% 2037    792        900
Fannie Mae 7.00% 2037    419        476
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency mortgage-backed obligations3  (continued) (000) (000)
     
Fannie Mae 7.00% 2037    $         12        $         14
Fannie Mae 7.50% 2037    102        118
Fannie Mae 2.348% 20384     3,061        3,270
Fannie Mae 5.50% 2038    9,550        10,636
Fannie Mae 6.00% 2038    502        560
Fannie Mae 7.00% 2038    1,398        1,587
Fannie Mae 3.253% 20404     6,881        7,398
Fannie Mae 3.561% 20404     893        956
Fannie Mae 4.198% 20404     2,256        2,404
Fannie Mae 4.379% 20404     3,676        3,929
Fannie Mae 5.00% 2040    1,015        1,134
Fannie Mae 3.227% 20414     5,970        6,311
Fannie Mae 3.437% 20414     3,050        3,230
Fannie Mae 3.522% 20414     4,389        4,602
Fannie Mae 3.794% 20414     4,649        4,991
Fannie Mae 4.00% 2041    21,338        22,754
Fannie Mae 4.00% 2041    5,993        6,356
Fannie Mae 4.50% 2041    4,278        4,645
Fannie Mae 5.00% 2041    3,065        3,435
Fannie Mae 5.00% 2041    2,369        2,655
Fannie Mae 5.00% 2041    1,568        1,757
Fannie Mae 5.00% 2041    1,064        1,192
Fannie Mae 2.94% 20424     5,394        5,579
Fannie Mae 3.50% 2042    10,659        11,001
Fannie Mae 3.50% 2042    8,525        8,794
Fannie Mae 4.00% 2042    14,947        15,938
Fannie Mae 4.00% 2042    873        931
Fannie Mae 2.514% 20434     4,242        4,278
Fannie Mae 3.00% 2043    25,449        25,208
Fannie Mae 3.00% 2043    22,202        21,991
Fannie Mae 3.00% 2043    14,274        14,139
Fannie Mae 3.00% 2043    11,580        11,470
Fannie Mae 3.00% 2043    11,212        11,147
Fannie Mae 3.00% 2043    7,589        7,517
Fannie Mae 3.00% 2043    7,315        7,246
Fannie Mae 3.00% 2043    5,664        5,610
Fannie Mae 3.00% 2043    4,933        4,886
Fannie Mae 3.00% 2043    4,112        4,088
Fannie Mae 3.00% 2043    3,878        3,841
Fannie Mae 4.00% 2043    43,169        45,961
Fannie Mae 4.00% 2043    6,986        7,446
Fannie Mae 3.50% 20445 322,495        331,046
Fannie Mae 3.50% 20445 90,200        92,916
Fannie Mae 4.00% 2044    13,203        14,061
Fannie Mae 4.00% 20445 11,900        12,607
Fannie Mae 4.00% 2044    6,240        6,653
Fannie Mae 4.50% 20445 83,854        90,667
Fannie Mae 7.029% 20474     390        419
Fannie Mae, Series 2001-4, Class NA, 10.41% 20254 146        162
Fannie Mae, Series 2001-25, Class ZA, 6.50% 2031    453        500
Fannie Mae, Series 2001-20, Class E, 9.557% 20314     19        22
Fannie Mae, Series 2005-29, Class AK, 4.50% 2035    1,026        1,034
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035    6,289        7,107
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency mortgage-backed obligations3  (continued) (000) (000)
     
Fannie Mae, Series 2006-83, Class AO, principal only, 0% 2036    $  2,025        $  1,777
Fannie Mae, Series 2006-56, Class OG, principal only, 0% 2036    1,446        1,315
Fannie Mae, Series 2006-65, Class PF, 0.43% 20364     1,794        1,798
Fannie Mae, Series 2006-49, Class PA, 6.00% 2036    277        306
Fannie Mae, Series 2007-33, Class HE, 5.50% 2037    2,200        2,419
Fannie Mae, Series 2007-40, Class PT, 5.50% 2037    1,015        1,115
Fannie Mae, Series 1999-T2, Class A-1, 7.50% 20394     437        488
Government National Mortgage Assn. 10.00% 2019    210        239
Government National Mortgage Assn. 10.00% 2021    84        96
Government National Mortgage Assn. 3.00% 2026    21,501        22,518
Government National Mortgage Assn. 3.00% 2027    6,269        6,566
Government National Mortgage Assn. 6.50% 2029    1,073        1,227
Government National Mortgage Assn. 6.50% 2032    991        1,137
Government National Mortgage Assn. 6.50% 2037    711        804
Government National Mortgage Assn. 5.50% 2038    1,219        1,360
Government National Mortgage Assn. 5.50% 2038    158        171
Government National Mortgage Assn. 6.00% 2038    1,184        1,338
Government National Mortgage Assn. 6.50% 2038    693        784
Government National Mortgage Assn. 6.50% 2038    660        746
Government National Mortgage Assn. 6.50% 2038    552        625
Government National Mortgage Assn. 6.50% 2038    406        460
Government National Mortgage Assn. 3.50% 20394     3,582        3,759
Government National Mortgage Assn. 4.00% 2039    1,061        1,136
Government National Mortgage Assn. 5.00% 2039    3,365        3,697
Government National Mortgage Assn. 6.00% 2039    7,496        8,523
Government National Mortgage Assn. 6.50% 2039    1,076        1,263
Government National Mortgage Assn. 4.50% 2040    2,489        2,719
Government National Mortgage Assn. 5.00% 2040    1,562        1,715
Government National Mortgage Assn. 5.00% 2040    737        809
Government National Mortgage Assn. 5.50% 2040    10,628        12,060
Government National Mortgage Assn. 3.50% 2041    1,300        1,336
Government National Mortgage Assn. 4.00% 2041    360        374
Government National Mortgage Assn. 4.50% 2041    29,352        32,059
Government National Mortgage Assn. 5.00% 2041    16,671        18,336
Government National Mortgage Assn. 5.00% 2041    235        251
Government National Mortgage Assn. 5.50% 2041    1,098        1,186
Government National Mortgage Assn. 5.50% 2041    543        588
Government National Mortgage Assn. 5.50% 2041    354        383
Government National Mortgage Assn. 6.00% 2041    95        104
Government National Mortgage Assn. 6.50% 2041    6,698        7,372
Government National Mortgage Assn. 3.50% 2042    825        848
Government National Mortgage Assn. 4.00% 2042    6,031        6,374
Government National Mortgage Assn. 4.00% 2042    3,034        3,206
Government National Mortgage Assn. 3.50% 2043    7,396        7,702
Government National Mortgage Assn. 4.00% 2043    14,513        15,520
Government National Mortgage Assn. 5.922% 2058    12,445        13,360
Government National Mortgage Assn. 6.172% 2058    184        196
Government National Mortgage Assn. 6.22% 2058    3,049        3,249
Government National Mortgage Assn., Series 2003-116, Class JD, 5.00% 2032    3,133        3,247
Government National Mortgage Assn., Series 2003-46, 5.00% 2033    4,838        5,255
Government National Mortgage Assn., Series 2003, 6.116% 2058    2,819        3,045
Freddie Mac 10.00% 2025    255        284
Freddie Mac 6.00% 2026    629        701
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency mortgage-backed obligations3  (continued) (000) (000)
     
Freddie Mac 6.00% 2027    $  3,012        $          3,359
Freddie Mac 2.472% 20354 2,466        2,620
Freddie Mac 2.375% 20364     798        847
Freddie Mac 2.064% 20374     339        357
Freddie Mac 5.50% 2037    92        102
Freddie Mac 6.50% 2037    312        348
Freddie Mac 4.858% 20384     734        784
Freddie Mac 5.50% 2038    8,127        9,019
Freddie Mac 5.50% 2038    295        328
Freddie Mac 5.50% 2039    7,680        8,522
Freddie Mac 3.225% 20414     4,357        4,608
Freddie Mac 3.402% 20414     5,662        5,991
Freddie Mac 5.00% 2041    7,426        8,303
Freddie Mac 2.57% 20424     6,620        6,689
Freddie Mac 2.581% 20424     2,928        3,013
Freddie Mac 2.081% 20434     2,556        2,616
Freddie Mac 2.352% 20434     12,594        12,582
Freddie Mac 2.429% 20434     4,802        4,832
Freddie Mac 4.00% 2043    11,459        12,183
Freddie Mac 4.00% 2043    10,297        10,947
Freddie Mac 4.00% 2043    5,415        5,757
Freddie Mac 4.00% 2043    4,361        4,641
Freddie Mac 4.00% 2043    2,717        2,889
Freddie Mac 4.00% 2043    2,036        2,165
Freddie Mac 4.00% 2044    4,586        4,881
Freddie Mac 4.50% 20445 30,475        32,951
Freddie Mac, Series 2356, Class GD, 6.00% 2016    466        486
Freddie Mac, Series 2289, Class NA, 10.236% 20204 66        70
Freddie Mac, Series 2289, Class NB, 9.721% 20224     31        35
Freddie Mac, Series 1567, Class A, 0.551% 20234     18        18
Freddie Mac, Series 2626, Class NG, 3.50% 2023    87        91
Freddie Mac, Series 1617, Class PM, 6.50% 2023    432        488
Freddie Mac, Series 2153, Class GG, 6.00% 2029    803        898
Freddie Mac, Series 3061, Class PN, 5.50% 2035    924        1,011
Freddie Mac, Series 3156, Class PO, principal only, 0% 2036    2,559        2,395
Freddie Mac, Series 3146, Class PO, principal only, 0% 2036    1,246        1,186
Freddie Mac, Series 3213, Class OG, principal only, 0% 2036    1,024        939
Freddie Mac, Series 3156, Class PF, 0.401% 20364     3,039        3,041
Freddie Mac, Series 3257, Class PA, 5.50% 2036    1,679        1,876
Freddie Mac, Series 3233, Class PA, 6.00% 2036    1,969        2,206
Freddie Mac, Series 3272, Class PA, 6.00% 2037    1,862        2,077
Vendee Mortgage Trust, Series 2011-2, Class V, 3.75% 2028    14,011        14,700
Vendee Mortgage Trust, Series 2008-1, Class GD, 5.25% 2032    18,854        21,166
Vendee Mortgage Trust, Series 2011-2, Class DA, 3.75% 2033    15,435        16,247
Vendee Mortgage Trust, Series 2010-1, Class DA, 4.25% 2035    5,805        6,149
National Credit Union Administration, Series 2010-R2, Class 1A, 0.522% 20174 720        722
National Credit Union Administration, Series 2011-R3, Class 1A, 0.55% 20204     1,536        1,542
National Credit Union Administration, Series 2011-R1, Class 1A, 0.602% 20204    912        917
FDIC Structured Sale Guaranteed Notes, Series 2010-S1, Class 1-A, 0.702% 20484,6    689        689
    1,363,276
Bonds, notes & other debt instruments    
  Principal amount Value
Federal agency bonds & notes  15.24% (000) (000)
     
Freddie Mac 1.75% 2015 $33,375        $34,039
Freddie Mac 1.00% 2017 18,525        18,581
Freddie Mac 1.25% 2019 51,820        50,542
Freddie Mac, Series K003, Class A2, multifamily 3.607% 20143 420        420
Freddie Mac, Series K501, Class A1, multifamily 1.337% 20163 3,359        3,391
Freddie Mac, Series K705, Class A2, multifamily 2.303% 20183 2,112        2,169
Freddie Mac, Series K706, Class A2, multifamily 2.323% 20183 3,300        3,390
Freddie Mac, Series K704, Class A2, multifamily 2.412% 20183 3,225        3,329
Freddie Mac, Series K711, Class A2, multifamily 1.73% 20193 4,425        4,399
Freddie Mac, Series K712, Class A2, multifamily 1.869% 20193 3,250        3,235
Freddie Mac, Series K710, Class A2, multifamily 1.883% 20193 2,480        2,490
Freddie Mac, Series K709, Class A2, multifamily 2.086% 20193 1,870        1,898
Freddie Mac, Series KGRP, Class A, multifamily 0.53% 20203,4 3,132        3,139
Freddie Mac, Series KF02, Class A3, multifamily 0.782% 20203,4 2,722        2,732
Freddie Mac, Series K015, Class A1, multifamily 2.257% 20203 3,041        3,133
Freddie Mac, Series K009, Class A1, multifamily 2.757% 20203 1,420        1,478
Freddie Mac, Series K014, Class A1, multifamily 2.788% 20203 3,209        3,361
Freddie Mac, Series K013, Class A1, multifamily 2.902% 20203 3,591        3,747
Freddie Mac, Series K714, Class A2, multifamily 3.034% 20203,4 2,085        2,181
Freddie Mac, Series K010, Class A1, multifamily 3.32% 20203 2,715        2,878
Freddie Mac, Series K019, Class A1, multifamily 1.459% 20213 2,029        2,025
Freddie Mac, Series K017, Class A2, multifamily 2.873% 20213 4,300        4,397
Freddie Mac, Series K023, Class A2, multifamily 2.307% 20223 15,140        14,735
Freddie Mac, Series K022, Class A2, multifamily 2.355% 20223 4,425        4,327
Freddie Mac, Series K020, Class A2, multifamily 2.373% 20223 21,325        20,936
Freddie Mac, Series K021, Class A2, multifamily 2.396% 20223 15,580        15,310
Freddie Mac, Series K024, Class A2, multifamily 2.573% 20223 5,000        4,947
Freddie Mac, Series K031, Class A1, multifamily 2.778% 20223 2,682        2,794
Freddie Mac, Series K030, Class A1, multifamily 2.779% 20223 3,297        3,434
Freddie Mac, Series KS01, Class A2, multifamily 2.522% 20233 6,200        6,102
Freddie Mac, Series K035, Class A1, multifamily 2.615% 20233 3,634        3,724
Freddie Mac, Series K033, Class A1, multifamily 2.871% 20233 16,507        17,197
Freddie Mac, Series K032, Class A1, multifamily 3.016% 20233 4,680        4,921
Freddie Mac, Series K033, Class A2, multifamily 3.06% 20233,4 17,165        17,494
Freddie Mac, Series K028, Class A2, multifamily 3.111% 20233 4,000        4,112
Freddie Mac, Series K030, Class A2, multifamily 3.25% 20233,4 7,305        7,563
Freddie Mac, Series K031, Class A2, multifamily 3.30% 20233,4 15,487        16,081
Freddie Mac, Series K032, Class A2, multifamily 3.31% 20233,4 52,000        53,974
Freddie Mac, Series K029, Class A2, multifamily 3.32% 20233,4 7,200        7,502
Freddie Mac, Series K035, Class A2, multifamily 3.458% 20233,4 79,000        82,702
Freddie Mac, Series K036, Class A2, multifamily 3.527% 20233,4 2,420        2,548
Freddie Mac, Series K034, Class A2, multifamily 3.531% 20233,4 2,415        2,543
Federal Home Loan Bank 0.375% 2015 61,000        61,154
Federal Home Loan Bank 2.75% 2015 8,500        8,670
Federal Home Loan Bank 0.375% 2016 28,875        28,915
Federal Home Loan Bank 0.625% 2016 12,020        12,023
Federal Home Loan Bank 3.375% 2023 14,160        14,821
Federal Home Loan Bank 5.50% 2036 700        894
Federal Home Loan Bank, Series 2816, 1.00% 2017 43,705        43,916
Federal Farm Credit Banks 1.625% 2014 33,225        33,448
Federal Farm Credit Banks 0.201% 20174 10,825        10,827
Federal Farm Credit Banks 0.205% 20174 8,861        8,863
Federal Farm Credit Banks 0.60% 2017 74,292        73,821
Bonds, notes & other debt instruments      
  Principal amount Value
Federal agency bonds & notes  (continued) (000) (000)
     
Tennessee Valley Authority 1.875% 2022 $  18,350        $       17,262
TVA Southaven 3.846% 20333 3,053        3,188
Tennessee Valley Authority 4.65% 2035 3,930        4,336
Tennessee Valley Authority 5.88% 2036 2,750        3,561
Tennessee Valley Authority 5.25% 2039 11,000        13,265
Tennessee Valley Authority, Series A, 3.875% 2021 8,500        9,403
Tennessee Valley Authority, Series B, 3.50% 2042 14,670        13,443
Tennessee Valley Authority, Series 2008, Class A, 4.875% 2048 3,300        3,646
Fannie Mae 7.125% 2030 3,000        4,390
Fannie Mae, Series 2014-M2, Class A-S-Q2, multifamily 0.478% 20153 4,750        4,755
Fannie Mae, Series 2013-M4, multifamily 2.608% 20223 4,225        4,202
Fannie Mae, Series 2012-M2, Class A2, multifamily 2.717% 20223 4,325        4,350
Fannie Mae, Series 2012-M3, Class 1-A2, multifamily 3.044% 20223 3,500        3,589
Fannie Mae, Series 2013-M14, Class A2, multifamily 3.329% 20233,4 3,075        3,170
Fannie Mae, Series 2014-M1, multifamily 3.39% 20233,4 3,600        3,712
Fannie Mae, Series 2014-M2, Class A2, multifamily 3.513% 20233,4 3,720        3,884
Fannie Mae, Series 2014-M3, Class A2, multifamily 3.477% 20243,4 6,525        6,819
Fannie Mae, Series 2003-M2, Class D, multifamily 4.68% 20333,4 5,118        5,711
United States Agency for International Development, Republic of Egypt 4.45% 2015 19,000        19,946
United States Agency for International Development, Ukraine, 1.844% 2019 2,890        2,916
United States Agency for International Development, Jordan (Kingdom of) 2.503% 2020 8,200        8,364
United States Agency for International Development, State of Israel, Class 1-A, 5.50% 2023 5,000        6,016
Private Export Funding Corp. 1.375% 2017 3,750        3,809
Private Export Funding Corp. 1.45% 2019 5,250        5,169
Private Export Funding Corp. 3.55% 2024 8,510        8,938
United States Government-Guaranteed Certificates of Participation, Overseas Private    
Investment Corp, 0% 2016 983        988
United States Government-Guaranteed Certificates of Participation, Overseas Private    
Investment Corp, 3.49% 20293 1,765        1,817
United States Government-Guaranteed Certificates of Participation, Overseas Private    
Investment Corp, 3.82% 20323 1,930        2,017
United States Government-Guaranteed Certificates of Participation, Overseas Private    
Investment Corp, 3.938% 20323 1,522        1,563
Small Business Administration, Series SBIC-PS 2006-10A, Participating Securities, 5.408% 20163 340        353
Small Business Administration, Series 2001-20K, 5.34% 20213 489        530
Small Business Administration, Series 2001-20J, 5.76% 20213 208        226
Small Business Administration, Series 2001-20F, 6.44% 20213 857        941
Small Business Administration, Series 2003-20B, 4.84% 20233 2,462        2,657
    926,188
     
Asset-backed obligations3  0.00%    
     
PE Environmental Funding LLC, Series 2007-A, Class A-1, 4.982% 2016 165        165
Total bonds, notes & other debt instruments  (cost: $5,519,351,000)   5,633,743
     
Short-term securities  14.10%      
     
Federal Home Loan Bank 0.04%–0.165% due 6/6–10/24/2014 487,504        487,450
Freddie Mac 0.08%–0.14% due 6/10–9/16/2014 150,500        150,492
John Deere Capital Corp. 0.08% due 6/12/20146 76,000        75,998
Fannie Mae 0.055%–0.09% due 7/23–9/8/2014 38,200        38,196
IBM Corp. 0.06% due 6/27/20146 33,300        33,298
National Rural Utilities Cooperative Finance Corp. 0.08% due 6/23/2014 25,000        24,999
     
  Principal amount Value
Short-term securities (000) (000)
     
Chevron Corp. 0.05% due 6/16/20146 $22,000        $        22,000
General Electric Co. 0.06% due 6/2/2014 19,200        19,200
Federal Farm Credit Banks 0.10% due 6/16/2014 5,000        5,000
Total short-term securities (cost: $856,600,000)   856,633
Total investment securities (cost: $6,375,951,000)   6,490,376
Other assets less liabilities   (413,290)
Net assets   $6,077,086

 

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 $369,000,000 over the prior seven-month period.

          Unrealized
          appreciation
        Notional (depreciation)
        amount at 5/31/2014
Pay/receive floating rate Floating rate index Fixed rate Expiration date (000) (000)
Pay 3-month USD-LIBOR 0.4975% 1/8/2016  $  50,000  $         88
Receive 3-month USD-LIBOR  1.32125 1/8/2018  30,000  (188)
Receive 3-month USD-LIBOR  1.314 5/20/2018  35,000  (50)
Receive 3-month USD-LIBOR  1.49 11/29/2018  50,000  (72)
Receive 3-month USD-LIBOR  1.619 3/17/2019  14,000  (44)
Receive 3-month USD-LIBOR  2.30773 4/10/2021  38,460  (566)
Receive 3-month USD-LIBOR  2.30769 4/10/2021  92,310  (1,358)
Receive 3-month USD-LIBOR  2.305226 4/10/2021  19,230  (280)
Receive 3-month USD-LIBOR  2.33565 4/11/2021  60,000  (993)
Receive 3-month USD-LIBOR  2.154 5/29/2021  83,000  (253)
Receive 3-month USD-LIBOR  2.7343 11/22/2023  100,000  (1,933)
Receive 3-month USD-LIBOR  2.74125 11/22/2023  79,000  (1,575)
          $(7,224)

 

1 A portion of this security was pledged as collateral. The total value of pledged collateral was $21,550,000, which represented .35% 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 A portion or all of the security purchased on a TBA basis.

6 Acquired in a transaction exempt from registration under Rule 144A or section 4(2) 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 $131,985,000, which represented 2.17% 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 May 31, 2014, all of the fund’s investments were classified as Level 2.

 

Federal income tax information (dollars in thousands)
   
Gross unrealized appreciation on investment securities $   120,438
Gross unrealized depreciation on investment securities (11,213)
Net unrealized appreciation on investment securities 109,225
Cost of investment securities for federal income tax purposes 6,381,151

 

 

 

 

Key to abbreviation

 

TBA = To be announced

 

 

 

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-022-0714O-S42168

 

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: July 29, 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: July 29, 2014

 

 

 

By /s/ Karl C. Grauman

Karl C. Grauman, Treasurer and

Principal Financial Officer

 
Date: July 29, 2014