gvt485b.htm

<PAGE>

[Logo - American Funds/(R)/] The right choice for the long term/(R)/

U.S. Government
Securities Fund/SM/

CLASS TICKER F-1.... UGSFX 529-C.. CGTCX
A...... AMUSX F-2.... GVTFX 529-E.. CGTEX
B...... UGSBX 529-A.. CGTAX 529-F-1 CGTFX
C...... UGSCX 529-B.. CGTBX

PROSPECTUS

November 1, 2009

TABLE OF CONTENTS

1 Investment objective
1 Fees and expenses of the fund
3 Principal investment strategies
3 Principal risks
4 Investment results
6 Management
6 Purchase and sale of fund shares
7 Tax information
7 Payments to broker-dealers and other financial
intermediaries
8 Investment objective, strategies and risks
10 Additional investment results
11 Management and organization
14 Shareholder information
15 Choosing a share class
18 Purchase, exchange and sale of shares
23 Sales charges
26 Sales charge reductions and waivers
30 Rollovers from retirement plans to IRAs
31 Plans of distribution
32 Other compensation to dealers
32 How to sell shares
34 Distributions and taxes
35 Financial highlights

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>

Investment objective

The fund's investment objective is to provide a high level of current income
consistent with prudent investment risk and preservation of capital.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for sales charge discounts if you and your
family invest, or agree to invest in the future, at least $100,000 in American
Funds. More information about these and other discounts is available from your
financial professional and in the "Sales charge reductions and waivers" section
on page 26 of the prospectus and on page 51 of the fund's statement of
additional information.

<SHAREHOLDER FEES
(fees paid directly from your
investment)
- ----------------------------------------------------SHARE CLASSES--------------

-----------------------------F-1, F-2-
A AND B AND C AND AND
529-A 529-B 529-C 529-E 529-F-1

- -------------------------------------------------------------------------------

Maximum sales charge (load) imposed on 3.75% none none none none
purchases (as a percentage of offering
price)
- -------------------------------------------------------------------------------
Maximum deferred sales charge (load) none 5.00% 1.00% none none
(as a percentage of the amount
redeemed)
- -------------------------------------------------------------------------------
Maximum sales charge (load) imposed on none none none none none
reinvested dividends
- -------------------------------------------------------------------------------
Redemption or exchange fees none none none none none
Maximum annual account fee $10 $10 $10 $10 $10
(529 share classes only)

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment)
- --------------------------------------------------SHARE CLASSES----------------

--A-------B-------C------F-1-------F-2----

- -------------------------------------------------------------------------------

Management fees 0.25% 0.25% 0.25% 0.25% 0.25%
- -------------------------------------------------------------------------------
Distribution and/or service 0.24 1.00 1.00 0.25 none
(12b-1) fees
- -------------------------------------------------------------------------------
Other expenses 0.15 0.14 0.18 0.15 0.16
- -------------------------------------------------------------------------------
Total annual fund operating 0.64 1.39 1.43 0.65 0.41
expenses
529-A 529-B 529-C 529-E 529-F-1
- -------------------------------------------------------------------------------
Management fees 0.25% 0.25% 0.25% 0.25% 0.25%
- -------------------------------------------------------------------------------
Distribution and/or service 0.20 1.00 1.00 0.49 0.00
(12b-1) fees
- -------------------------------------------------------------------------------
Other expenses 0.25 0.26 0.25 0.25 0.25
- -------------------------------------------------------------------------------
Total annual fund operating 0.70 1.51 1.50 0.99 0.50
expenses

U.S. Government Securities Fund / Prospectus

<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that all
dividends and capital gain distributions are reinvested, that you pay the
maximum initial or contingent deferred sales charge, and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------

A $438 $572 $ 718 $1,143
- ---------------------------------------------------------------------
B 642 840 961 1,463
- ---------------------------------------------------------------------
C 246 452 782 1,713
- ---------------------------------------------------------------------
F-1 66 208 362 810
- ---------------------------------------------------------------------
F-2 42 132 230 518
- ---------------------------------------------------------------------
529-A 464 630 809 1,318
- ---------------------------------------------------------------------
529-B 673 916 1,081 1,684
- ---------------------------------------------------------------------
529-C 272 513 876 1,890
- ---------------------------------------------------------------------
529-E 121 354 605 1,316
- ---------------------------------------------------------------------
529-F-1 71 200 339 735

For the share classes listed below, you would pay the following if you did not
redeem your shares:

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------

B $142 $440 $761 $1,463
- ---------------------------------------------------------------------
C 146 452 782 1,713
- ---------------------------------------------------------------------
529-B 173 516 881 1,684
- ---------------------------------------------------------------------
529-C 172 513 876 1,890
- ---------------------------------------------------------------------

PORTFOLIO TURNOVER

The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate was 166%
of the average value of its portfolio.

U.S. Government Securities Fund / Prospectus
<PAGE>

Principal investment strategies

Normally, at least 80% of the fund's assets will be invested in securities that
are guaranteed or sponsored by the U.S. government, including debt securities
and mortgage-backed securities issued by federal agencies and instrumentalities
that are not backed by the full faith and credit of the U.S. government.

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively valued
securities that, in its opinion, represent above-average, long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is by analyzing various factors, which may include the credit
strength of the issuer, prices of similar securities issued by comparable
issuers and anticipated changes in interest rates, general market conditions and
other factors pertinent to the particular security being evaluated. Securities
may be sold when the investment adviser believes that they no longer represent
relatively attractive investment opportunities. The investment adviser uses a
system of multiple portfolio counselors in managing the fund's assets. Under
this approach, the portfolio of the fund is divided into segments managed by
individual counselors who decide how their respective segments will be invested.

Principal risks

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

Your investment in the fund is subject to risks, including the possibility that
the fund's income and the value of its portfolio holdings may fluctuate in
response to economic, political or social events in the United States or abroad.

The prices of, and the income generated by, the securities held by the fund may
decline in response to certain events taking place around the world, including
those directly involving the issuers whose securities are owned by the fund;
conditions affecting the general economy; overall market changes; local,
regional or global political, social or economic instability; governmental or
governmental agency responses to economic conditions; and currency, interest
rate and commodity price fluctuations.

While the fund invests primarily in securities that are guaranteed or sponsored
by the U.S. government, these securities are subject to interest rate and
prepayment risks. Interest rate risk is the risk that the market value of the
fixed-income securities owned by the fund will fluctuate as interest rates go up
or down.

For example, as with other debt securities, the value of U.S. government
securities generally will decline when interest rates rise and increase when
interest rates fall. Longer

U.S. Government Securities Fund / Prospectus

<PAGE>

maturity securities generally have higher rates of interest but may be subject
to greater price fluctuations than shorter maturity securities.

In addition, falling interest rates may cause an issuer to redeem or "call" a
security before its stated maturity, which may result in the fund having to
reinvest the proceeds in lower yielding securities. This is known as prepayment
risk. Many types of debt securities, including mortgage-related securities, are
subject to prepayment risk. For example, when interest rates fall, homeowners
are more likely to refinance their home mortgages and "prepay" their principal
earlier than expected. The fund must then reinvest the prepaid principal in new
securities when interest rates on new mortgage investments are falling, thus
reducing the fund's income.

A security backed by the U.S. Treasury or the full faith and credit of the U.S.
government is guaranteed only as to the timely payment of interest and principal
when held to maturity. Accordingly, the current market values for these
securities will fluctuate with changes in interest rates.

It is important to note that neither your investment in the fund nor the fund's
yield is guaranteed by the U.S. government.

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.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 5 shows how the fund's average annual total
returns for various periods compare with different broad measures of market
performance. This information provides some indication of the risks of investing
in the fund. Past results (before and after taxes) are not predictive of future
results. Updated information on the fund's results can be obtained by visiting
americanfunds.com.

Calendar year total returns for Class A shares
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999 -1.59%
2000 11.93
2001 6.41
2002 9.02
2003 1.91
2004 2.88
2005 2.27
2006 3.15
2007 6.67
2008 7.73
[end bar chart]

U.S. Government Securities Fund / Prospectus
<PAGE>

Highest/Lowest quarterly results during this time period were:

HIGHEST 5.34% (quarter ended December 31, 2008)
LOWEST -2.00% (quarter ended June 30, 2004)

The fund's total return for the nine months ended September 30, 2009, was 2.59%.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITH MAXIMUM SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -------------------------------------------------------------------------------------

A - Before taxes 10/17/85 3.69% 3.73% 4.57% 6.57%
- After taxes on 2.36 2.36 2.91 N/A
distributions
- After taxes on distributions and sale of 2.35 2.36 2.87 N/A
fund shares

SHARE CLASS (before taxes) INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------------

B 3/15/00 1.99% 3.43% 5.01%
- -------------------------------------------------------------------------
C 3/15/01 5.94 3.73 3.96
- -------------------------------------------------------------------------
F-1 3/15/01 7.78 4.55 4.77
- -------------------------------------------------------------------------
529-A 2/20/02 3.68 3.67 4.05
- -------------------------------------------------------------------------
529-B 2/20/02 1.85 3.28 3.75
- -------------------------------------------------------------------------
529-C 2/19/02 5.86 3.64 3.76
- -------------------------------------------------------------------------
529-E 3/7/02 7.41 4.17 4.48
- -------------------------------------------------------------------------
529-F-1 10/11/02 7.93 4.61 4.20
- -------------------------------------------------------------------------

INDEXES/1/ (before taxes) 1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

Citigroup Treasury/Govt 10.54% 5.87% 6.12% 7.90%
Sponsored/Mortgage Index
Lipper General U.S. Government Funds 7.27 4.27 4.74 6.56
Average
Consumer Price Index 0.09 2.67 2.52 2.88
Class A annualized 30-day yield at August 31, 2009: 2.71%
(For current yield information, please call American FundsLine/(R)/ at
800/325-3590.)

1 The Citigroup Treasury/Government Sponsored/Mortgage Index reflects the market
sectors in which the fund primarily invests. The Lipper General U.S. Government
Funds Average includes the fund and other mutual funds that disclose investment
objectives that are reasonably comparable to those of the fund. The Consumer
Price Index provides a comparison of the fund's results to inflation. See page
10 of this prospectus for more information on the indexes listed above.
2 Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold.

After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes. Your actual
after-tax returns depend on your individual tax situation and likely will differ
from the results shown above. In addition, after-tax returns are not relevant if
you hold your fund shares through a tax-deferred arrangement, such as a 401(k)
plan, individual retirement account (IRA) or 529 college savings plan.

U.S. Government Securities Fund / Prospectus

<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:

PORTFOLIO COUNSELOR/ PORTFOLIO COUNSELOR PRIMARY TITLE
FUND TITLE (if EXPERIENCE WITH INVESTMENT ADVISER
applicable) IN THIS FUND (or one of its divisions)
- -------------------------------------------------------------------------------

JOHN H. SMET 23 years Senior Vice President - Fixed
President and Trustee Income,
Capital Research and Management
Company
- -------------------------------------------------------------------------------
THOMAS H. HOGH 13 years Senior Vice President - Fixed
Vice President Income,
Capital Research Company
- -------------------------------------------------------------------------------
MARK R. MACDONALD 3 years Senior Vice President - Fixed
Income,
Capital Research and Management
Company
- -------------------------------------------------------------------------------

Purchase and sale of fund shares

PURCHASE MINIMUMS (for all share classes)
- ------------------------------------------------------------------------------

TO ESTABLISH AN ACCOUNT (including retirement plan and 529 accounts) $250
For a payroll deduction retirement plan account, payroll deduction 25
savings plan account or employer-sponsored 529 account
TO ADD TO AN ACCOUNT 50
For a payroll deduction retirement plan account, payroll deduction 25
savings plan account or employer-sponsored 529 account
- ------------------------------------------------------------------------------

You may sell (redeem) shares through your dealer or financial adviser or by
writing to American Funds Service Company at P.O. Box 6007, Indianapolis, IN
46206-6007; telephoning (800/421-0180); faxing (317/735-6636) American Funds
Service Company; or accessing our website (americanfunds.com).

U.S. Government Securities Fund / Prospectus
<PAGE>

Tax information

Dividends and capital gain distributions you receive from the fund are subject
to federal income taxes and may also be subject to state and local taxes.

Payments to broker-dealers and other financial intermediaries

If you purchase shares of the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and the fund's distributor or its
affiliates may pay the intermediary for the sale of fund shares and related
services. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your individual financial adviser to
recommend the fund over another investment. Ask your individual financial
adviser or visit your financial intermediary's website for more information.

U.S. Government Securities Fund / Prospectus

<PAGE>

Investment objective, strategies and risks

The fund's investment objective is to provide a high level of current income
consistent with prudent investment risk and preservation of capital.

For example, as with other debt securities, the value of U.S. government
securities generally will decline when interest rates rise and increase when
interest rates fall. Longer maturity securities generally have higher rates of
interest but may be subject to greater price fluctuations than shorter maturity
securities.

It is important to note that neither your investment in the fund nor the fund's
yield is guaranteed by the U.S. government.

U.S. Government Securities Fund / Prospectus
<PAGE>

The fund may also hold cash or money market instruments. The percentage of the
fund invested in such holdings varies and depends on various factors, including
market conditions. For temporary defensive purposes, the fund may hold a
significant portion of its assets in such securities. A larger percentage of
such holdings could moderate the fund's investment results in a period of rising
market prices. Consistent with the fund's preservation of capital objective, a
larger percentage of cash or money market instruments could reduce the magnitude
of the fund's loss in a period of falling market prices and provide liquidity to
make additional investments or to meet redemptions.

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.

U.S. Government Securities Fund / Prospectus

<PAGE>

Additional investment results

Unlike the table on page 5, the table below reflects the fund's results
calculated without sales charges.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITHOUT SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -------------------------------------------------------------------------------------

A - Before taxes 10/17/85 7.73% 4.52% 4.97% 6.74%
- After taxes on 6.34 3.14 3.30 N/A
distributions
- After taxes on distributions and sale of 4.98 3.03 3.22 N/A
fund shares

SHARE CLASS (before taxes) INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------------

B 3/15/00 6.99% 3.78% 5.01%
- -------------------------------------------------------------------------
C 3/15/01 6.94 3.73 3.96
- -------------------------------------------------------------------------
F-1 3/15/01 7.78 4.55 4.77
- -------------------------------------------------------------------------
529-A 2/20/02 7.71 4.46 4.63
- -------------------------------------------------------------------------
529-B 2/20/02 6.85 3.63 3.75
- -------------------------------------------------------------------------
529-C 2/19/02 6.86 3.64 3.76
- -------------------------------------------------------------------------
529-E 3/7/02 7.41 4.17 4.48
- -------------------------------------------------------------------------
529-F-1 10/11/02 7.93 4.61 4.20

INDEXES/1/ (before taxes) 1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

Citigroup Treasury/Govt 10.54% 5.87% 6.12% 7.90%
Sponsored/Mortgage Index
Lipper General U.S. Government 7.27 4.27 4.74 6.56
Funds Average
Consumer Price Index 0.09 2.67 2.52 2.88
Class A distribution rate at December 31, 2008: 3.57%/3/
(For current distribution rate information, please call American FundsLine
at 800/325-3590.)

1 The Citigroup Treasury/Government Sponsored/Mortgage Index reflects the market
sectors in which the fund primarily invests. The Lipper General U.S. Government
Funds Average includes the fund and other mutual funds that disclose investment
objectives that are reasonably comparable to those of the fund. The Consumer
Price Index provides a comparison of the fund's results to inflation.
2 Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold.

3 Reflects a fee waiver (3.55% without the waiver) as described in the financial
highlights table and the statement of additional information. The distribution
rate is based on actual dividends paid to Class A shareholders over a 12-month
period. Capital gain distributions, if any, are added back to net asset value
to determine the rate.

The investment results tables above and on page 5 show how the fund's average
annual total returns compare with various broad measures of market performance.
Citigroup Treasury/Government Sponsored/Mortgage Index is a market-weighted
index that includes U.S. Treasury and agency securities, as well as securities
issued by the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation and the Government National Mortgage Association. This
index is unmanaged and its results include reinvested dividends and/or
distributions, but do not reflect the effect of sales charges, commissions,
expenses or taxes. The Lipper General U.S. Government Funds Average is composed
of funds that invest primarily in U.S. government and agency issues. The results
of the underlying funds in the average include the reinvestment of dividends and
capital gain distributions, as well as brokerage commissions paid by the fund
for portfolio transactions,

U.S. Government Securities Fund / Prospectus
<PAGE>

but do not reflect the effect of sales charges or taxes. Consumer Price Index
(CPI) is a measure of the average change over time in the prices paid by urban
consumers for a market basket of consumer goods and services. Widely used as a
measure of inflation, the CPI is computed by the U.S. Department of Labor,
Bureau of Labor Statistics.

All fund results reflected in the "Investment results" section of this
prospectus and this "Additional investment results" section reflect the
reinvestment of dividends and capital gain distributions, if any. Unless
otherwise noted, fund results reflect any fee waivers and/or expense
reimbursements in effect during the period presented.

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 the American Funds. Capital Research and Management Company is
a wholly owned subsidiary of The Capital Group Companies, Inc. and is located at
333 South Hope Street, Los Angeles, California 90071, and 6455 Irvine Center
Drive, Irvine, California 92618. 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 in the Annual Fund Operating Expenses table under "Fees and
expenses of the fund." The management fee is based on the daily net assets of
the fund and the fund's monthly gross investment income. See the statement of
additional information for further details. A discussion regarding the basis for
the approval of the fund's investment advisory and service agreement by the
fund's board of trustees is contained in the fund's annual report to
shareholders for the fiscal year ended August 31, 2009.

Capital Research and Management Company manages equity assets through two
investment divisions, Capital World Investors and Capital Research Global
Investors, and manages fixed-income assets through its Fixed Income division.
Capital World Investors and Capital Research Global Investors make investment
decisions on an independent basis.

Rather than remain as investment divisions, Capital World Investors and Capital
Research Global Investors may be incorporated into wholly owned subsidiaries of
Capital Research and Management Company. In that event, Capital Research and
Management Company would continue to be the investment adviser, and day-to-day
investment management of equity assets would continue to be carried out through
one or both of these subsidiaries. Although not currently contemplated, Capital
Research and Management Company could incorporate its Fixed Income division in
the future and engage it to provide day-to-day investment management of
fixed-income assets. Capital Research and Management Company and each of the
funds it advises have applied to the U.S. Securities and Exchange Commission for
an exemptive order that would give Capital Research and

U.S. Government Securities Fund / Prospectus

<PAGE>

Management Company the authority to use, upon approval of the fund's board, its
management subsidiaries and affiliates to provide day-to-day investment
management services to the fund, including making changes to the management
subsidiaries and affiliates providing such services. Approval by the fund's
shareholders would be required before any authority granted under an exemptive
order could be exercised. A meeting of the fund's shareholders of record as of
August 28, 2009, to consider, among other items, approval of this arrangement is
scheduled for November 24, 2009. There is no assurance that Capital Research and
Management Company will incorporate its investment divisions or obtain
shareholders' approval to exercise any authority, if granted, under an exemptive
order.

In addition to voting on approval of the arrangement discussed above,
shareholders are being asked to vote on other proposals at the meeting. These
proposals include electing board members, reorganizing the fund into a Delaware
statutory trust, amending the fund's fundamental policies and amending its
investment advisory and service agreement. More information on these proposals
is contained in a joint proxy statement, which can be found at
americanfunds.com/vote.

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. In selecting broker-dealers, the investment adviser
strives to obtain "best execution" (the most favorable total price reasonably
attainable under the circumstances) for the fund's portfolio transactions,
taking into account a variety of factors. Subject to best execution, the
investment adviser may consider investment research and/or brokerage services
provided to the adviser in placing orders for the fund's portfolio transactions.
The investment adviser may place orders for the fund's portfolio transactions
with broker-dealers who have sold shares of funds managed by the investment
adviser or its affiliated companies; however, it does not give consideration to
whether a broker-dealer has sold shares of the funds managed by the investment
adviser or its affiliated companies when placing any such orders for the fund's
portfolio transactions. A more detailed description of the investment adviser's
policies is included in the fund's statement of additional information.

PORTFOLIO HOLDINGS

Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the fund's
detailed information page on the website. A link to the fund's complete list of
publicly disclosed portfolio holdings, updated as of each calendar quarter-end,
is generally posted to this page within 45 days after the end of the applicable
quarter. This information is available on the website until new information for
the next quarter is posted. Portfolio holdings information for the fund is also
contained in reports filed with the Securities and Exchange Commission.

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

U.S. Government Securities Fund / Prospectus
<PAGE>

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 who decide how
their respective segments will be invested. In addition, Capital Research and
Management Company's investment analysts may make investment decisions with
respect to a portion of a fund's portfolio. Investment decisions are subject to
a fund's objective(s), policies and restrictions and the oversight of the
appropriate investment-related committees of Capital Research and Management
Company and its investment divisions. The table below shows the investment
experience and role in management of the fund for each of the fund's primary
portfolio counselors.

ROLE IN
INVESTMENT EXPERIENCE MANAGEMENT
PORTFOLIO COUNSELOR EXPERIENCE IN THIS FUND OF THE FUND
- ------------------------------------------------------------------------------------

JOHN H. SMET Investment 23 years Serves as a
professional for 27 fixed-income portfolio
years in total; counselor
26 years with Capital
Research and
Management Company or
affiliate
- ------------------------------------------------------------------------------------
THOMAS H. HOGH Investment 13 years Serves as a
professional for 23 fixed-income portfolio
years in total; counselor
19 years with Capital
Research and
Management Company or
affiliate
- ------------------------------------------------------------------------------------
MARK R. MACDONALD Investment 3 years Serves as a
professional for 24 fixed-income portfolio
years in total; counselor
15 years with Capital
Research and
Management Company or
affiliate
- ------------------------------------------------------------------------------------

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage is in the statement of
additional information.

U.S. Government Securities Fund / Prospectus

<PAGE>

Shareholder information

SHAREHOLDER SERVICES

American Funds Service Company/(R)/,the fund's transfer agent, offers a wide
range of services that 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.

AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
Call toll-free from anywhere in the United States
(8 a.m. to 8 p.m. ET): 800/421-0180
Access the American Funds website : americanfunds.com

[map of the United States]

INDIANA VIRGINIA
SERVICE CENTER SERVICE CENTER
American Funds American Funds
Service Company Service Company
P.O. Box 6007 P.O. Box 2280
Indianapolis, Indiana Norfolk, Virginia
46206-6007 23501-2280
Fax: 317/735-6636 Fax: 757/670-4761

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 ENTITLED WELCOME. CLASS 529 SHAREHOLDERS SHOULD ALSO REFER TO
THE APPLICABLE PROGRAM DESCRIPTION FOR INFORMATION ON POLICIES AND SERVICES
SPECIFICALLY RELATING TO THEIR ACCOUNT(S). These documents are available by
writing or calling American Funds Service Company. Certain privileges and/or
services described on the following pages of this prospectus and in the
statement of additional information may not be available to you depending on
your investment dealer. Please see your financial adviser or investment dealer
for more information.

U.S. Government Securities Fund / Prospectus
<PAGE>

Choosing a share class

The fund offers different classes of shares through this prospectus. Class A, C,
F-1 and F-2 shares are available through various investment programs or
accounts, including certain types of retirement plans (see limitations below).
The services or share classes available to you may vary depending upon how you
wish to purchase shares of the fund. Unless otherwise noted, references in this
prospectus to Class F shares refer to both Class F-1 and F-2 shares.

Class B and 529-B shares may no longer be purchased or acquired except by
exchange from Class B or 529-B shares of another American Fund. Any investment
received by the fund that is intended for Class B or 529-B shares will instead
be invested in Class A or 529-A shares and be subject to any applicable sales
charges.

Shareholders with investments in Class B and 529-B shares may continue to hold
such shares until they convert to Class A or 529-A shares. However, no
additional investments will be accepted in Class B or 529-B shares. Dividends
and capital gain distributions may continue to be reinvested in Class B or 529-B
shares until their conversion dates. In addition, shareholders invested in Class
B or 529-B shares will be able to exchange those shares for Class B or 529-B
shares of other American Funds offering Class B or 529-B shares until they
convert.

Investors residing in any state may purchase Class 529 shares through an account
established with a 529 college savings plan managed by the American Funds
organization. Class 529-A, 529-B, 529-C and 529-F-1 shares are structured
similarly to the corresponding Class A, B, C and F-1 shares. For example, the
same initial sales charges apply to Class 529-A shares as to Class A shares.
Class 529-E shares are available only to investors participating through an
eligible employer plan.

Each share class represents an investment 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 fits your situation. WHEN YOU PURCHASE SHARES OF THE
FUND, YOU SHOULD CHOOSE A SHARE CLASS. IF NONE IS CHOSEN, YOUR INVESTMENT WILL
BE MADE IN CLASS A SHARES OR, IN THE CASE OF A 529 PLAN INVESTMENT, CLASS 529-A
SHARES.

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 or 529-A shares may be a less expensive option over time,
particularly if you qualify for a sales charge reduction or waiver);

.. whether you plan to take any distributions in the near future (for example,
the contingent deferred sales charge will not be waived if you sell your Class
529-B or 529-C shares to cover higher education expenses); and

U.S. Government Securities Fund / Prospectus

<PAGE>

.. availability of share classes:

-- Class C shares are not available to retirement plans that do not currently
invest in such shares and that are eligible to invest in Class R shares,
including employer-sponsored retirement plans such as defined benefit plans,
401(k) plans, 457 plans, 403(b) plans, and money purchase pension and
profit-sharing plans; and

-- Class F and 529-F-1 shares are generally available only to fee-based
programs of investment dealers that have special agreements with the fund's
distributor and to certain registered investment advisers.

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.

UNLESS OTHERWISE NOTED, REFERENCES IN THE FOLLOWING PAGES TO CLASS A, B, C OR
F-1 SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR 529-F-1
SHARES.

U.S. Government Securities Fund / Prospectus
<PAGE>

SUMMARY OF THE PRIMARY DIFFERENCES AMONG SHARE CLASSES

CLASS A SHARES
Initial sales charge up to 3.75% (reduced for purchases of $100,000 or more
and eliminated for purchases of $1 million or more)
Contingent deferred none (except that a charge of 1.00% applies to certain
sales charge redemptions made within one year following purchases
of $1 million or more without an initial sales charge)
12b-1 fees up to .30% annually (for Class 529-A shares, may not
exceed .50% annually)
Dividends generally higher than other classes due to lower
annual expenses, but may be lower than Class F-1
shares, depending on relative expenses, and lower than
Class F-2 shares due to 12b-1 fees
Purchase maximum none
Conversion none

CLASS B SHARES
Initial sales charge none
Contingent deferred starts at 5.00%, declining to 0% six years after
sales charge purchase
12b-1 fees up to 1.00% annually
Dividends generally lower than Class A and F shares due to
higher 12b-1 fees and other expenses, but higher than
Class C shares due to lower other expenses
Purchase maximum Class B shares may not be purchased or acquired except
by exchange from Class B shares of other American
Funds
Conversion automatic conversion to Class A or 529-A shares in the
month of the eight-year anniversary of the purchase
date, reducing future annual expenses

CLASS C SHARES
Initial sales charge none
Contingent deferred 1.00% if shares are sold within one year after
sales charge purchase
12b-1 fees up to 1.00% annually
Dividends generally lower than other classes due to higher 12b-1
fees and other expenses
Purchase maximum see the discussion regarding purchase minimums and
maximums in "Purchase and exchange of shares"
Conversion automatic conversion to Class F-1 shares in the month
of the 10-year anniversary of the purchase date,
reducing future annual expenses (Class 529-C shares
will not convert to Class 529-F-1 shares)

CLASS 529-E SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees currently up to .50% annually (may not exceed .75%
annually)
Dividends generally higher than Class 529-B and 529-C shares due
to lower 12b-1 fees, but lower than Class 529-A and
529-F-1 shares due to higher 12b-1 fees
Purchase maximum none
Conversion none

CLASS F-1 SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees currently up to .25% annually (may not exceed .50%
annually)
Dividends generally higher than Class B and C shares due to
lower 12b-1 fees, but may be higher than Class A
shares, depending on relative expenses, and lower than
Class F-2 shares due to 12b-1 fees
Purchase maximum none
Conversion none

CLASS F-2 SHARES
Initial sales charge none
Contingent deferred none
sales charge
12b-1 fees none
Dividends generally higher than other classes due to absence of
12b-1 fees
Purchase maximum none
Conversion none

U.S. Government Securities Fund / Prospectus

<PAGE>

FUND EXPENSES

In periods of market volatility, assets of the fund may decline significantly,
causing total annual fund operating expenses (as a percentage of the value of
your investment) to become higher than the numbers shown in the annual fund
operating expenses table in this prospectus.

The "Other expenses" items in the table on page 1 include custodial, legal,
transfer agent and subtransfer agent/recordkeeping payments and various other
expenses. Subtransfer agent/recordkeeping payments may be made to third parties
(including affiliates of the fund's investment adviser) that provide subtransfer
agent, recordkeeping and/or shareholder services with respect to certain
shareholder accounts in lieu of the transfer agent providing such services. The
amount paid for subtransfer agent/recordkeeping services varies depending on the
share class and services provided, and typically ranges from $3 to $19 per
account. For Class 529 shares, an expense of up to a maximum of .10% paid to a
state or states for oversight and administrative services is included as an
"Other expenses" item.

Purchase, exchange and sale of shares

THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND AND AMERICAN FUNDS
DISTRIBUTORS,/(R)/ THE FUND'S DISTRIBUTOR, IS REQUIRED BY LAW TO OBTAIN CERTAIN
PERSONAL INFORMATION FROM YOU OR ANY OTHER PERSON(S) ACTING ON YOUR BEHALF IN
ORDER TO VERIFY YOUR OR SUCH PERSON'S IDENTITY. IF YOU DO NOT PROVIDE THE
INFORMATION, THE TRANSFER AGENT MAY NOT BE ABLE TO OPEN YOUR ACCOUNT. IF THE
TRANSFER AGENT IS UNABLE TO VERIFY YOUR IDENTITY OR THAT OF ANY OTHER PERSON(S)
AUTHORIZED TO ACT ON YOUR BEHALF, OR BELIEVES IT HAS IDENTIFIED POTENTIALLY
CRIMINAL

U.S. Government Securities Fund / Prospectus
<PAGE>

ACTIVITY, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO CLOSE
YOUR ACCOUNT OR TAKE SUCH OTHER ACTION THEY DEEM REASONABLE OR REQUIRED BY LAW.

When purchasing shares, you should designate the fund or funds in which you wish
to invest. If no fund is designated and the amount of your cash investment is
more than $5,000, your money will be held uninvested (without liability to the
transfer agent for loss of income or appreciation pending receipt of proper
instructions) until investment instructions are received, but for no more than
three business days. Your investment will be made at the net asset value (plus
any applicable sales charge in the case of Class A shares) next determined after
investment instructions are received and accepted by the transfer agent. If
investment instructions are not received, your money will be invested in Class A
shares of American Funds Money Market Fund/SM/ on the third business day after
receipt of your investment.

If no fund is designated and the amount of your cash investment is $5,000 or
less, your money will be invested in the same proportion and in the same fund or
funds in which your last cash investment (excluding exchanges) was made,
provided such investment was made within the last 16 months. If no investment
was made within the last 16 months, your money will be held uninvested (without
liability to the transfer agent for loss of income or appreciation pending
receipt of proper instructions) until investment instructions are received, but
for no more than three business days. Your investment will be made at the net
asset value (plus any applicable sales charge in the case of Class A shares)
next determined after investment instructions are received and accepted by the
transfer agent. If investment instructions are not received, your money will be
invested in Class A shares of American Funds Money Market Fund on the third
business day after receipt of your investment.

PURCHASE OF CLASS A AND C SHARES

You may generally open an account and purchase Class A and C shares by
contacting any financial adviser (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 financial
adviser and by mail, telephone, the Internet and bank wire.

PURCHASE OF CLASS F SHARES

You may generally open an account and purchase Class F shares only through
fee-based programs of investment dealers that have special agreements with the
fund's distributor and through certain registered investment advisers. These
dealers and advisers typically charge ongoing fees for services they provide.
Intermediary fees normally range from .75% to 1.50% of assets annually,
depending on the services offered.

U.S. Government Securities Fund / Prospectus

<PAGE>

PURCHASE OF CLASS 529 SHARES

Class 529 shares may be purchased only through an account established with a 529
college savings plan managed by the American Funds organization. You may open
this type of account and purchase Class 529 shares by contacting any financial
adviser (who may impose transaction charges in addition to those described in
this prospectus) authorized to sell such an account. You may purchase additional
shares in various ways, including through your financial adviser and by mail,
telephone, the Internet and bank wire.

Class 529-E shares may be purchased only by employees participating through an
eligible employer plan.

Accounts holding Class 529 shares are subject to a $10 account setup fee and an
annual $10 account maintenance fee.

EXCHANGE

Generally, you may exchange your shares into shares of the same class of other
American Funds without a sales charge. Class A, C or F-1 shares may generally be
exchanged into the corresponding 529 share class without a sales charge. Class B
shares may not be exchanged into Class 529-B shares. EXCHANGES FROM CLASS A, C
OR F-1 SHARES TO THE CORRESPONDING 529 SHARE CLASS, PARTICULARLY IN THE CASE OF
UNIFORM GIFTS TO MINORS ACT OR UNIFORM TRANSFERS TO MINORS ACT CUSTODIAL
ACCOUNTS, MAY RESULT IN SIGNIFICANT LEGAL AND TAX CONSEQUENCES AS DESCRIBED IN
THE APPLICABLE PROGRAM DESCRIPTION. PLEASE CONSULT YOUR FINANCIAL ADVISER BEFORE
MAKING SUCH AN EXCHANGE.

Exchanges of shares from American Funds Money Market Fund initially purchased
without a sales charge generally will be subject to the appropriate 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 permitted
exchange.

Exchanges have the same tax consequences as ordinary sales and purchases. For
example, to the extent you exchange shares held in a taxable account that are
worth more now than what you paid for them, the gain will be subject to
taxation. See "Transactions by telephone, fax or the Internet" in this
prospectus for information regarding electronic exchanges.

FREQUENT TRADING OF FUND SHARES

The fund and American Funds Distributors reserve the right to reject any
purchase order for any reason. The fund is not designed to serve as a vehicle
for frequent trading. Frequent trading of fund shares may lead to increased
costs to the fund and less efficient management of the fund's portfolio,
potentially resulting in dilution of the value of the shares held by long-term
shareholders. Accordingly, purchases, including those that are part of exchange
activity that the fund or American Funds Distributors has determined could
involve actual or potential harm to the fund, may be rejected.

U.S. Government Securities Fund / Prospectus
<PAGE>

The fund, through its transfer agent, American Funds Service Company, maintains
surveillance procedures that are designed to detect frequent trading in fund
shares. Under these procedures, various analytics are used to evaluate factors
that may be indicative of frequent trading. For example, transactions in fund
shares that exceed certain monetary thresholds may be scrutinized. American
Funds Service Company also may review transactions that occur close in time to
other transactions in the same account or in multiple accounts under common
ownership or influence. Trading activity that is identified through these
procedures or as a result of any other information available to the fund will be
evaluated to determine whether such activity might constitute frequent trading.
These procedures may be modified from time to time as appropriate to improve the
detection of frequent trading, to facilitate monitoring for frequent trading in
particular retirement plans or other accounts, and to comply with applicable
laws.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of trustees has adopted a "purchase
blocking policy" under which any shareholder redeeming shares having a value of
$5,000 or more from the fund will be precluded from investing in the fund for 30
calendar days after the redemption transaction. This policy also applies to
redemptions and purchases that are part of exchange transactions. Under the
fund's purchase blocking policy, certain purchases will not be prevented and
certain redemptions will not trigger a purchase block, such as systematic
redemptions and purchases, where the entity maintaining the shareholder account
is able to identify the transaction as a systematic redemption or purchase;
purchases and redemptions of shares having a value of less than $5,000;
transactions in Class 529 shares; purchases and redemptions resulting from
reallocations by American Funds Target Date Retirement Series/(R)/; retirement
plan contributions, loans and distributions (including hardship withdrawals)
identified as such on the retirement plan recordkeeper's system; and purchase
transactions involving transfers of assets, rollovers, Roth IRA conversions and
IRA recharacterizations, where the entity maintaining the shareholder account is
able to identify the transaction as one of these types of transactions.

The fund reserves the right to waive the purchase blocking policy with respect
to specific shareholder accounts in those instances where American Funds Service
Company determines that its surveillance procedures are adequate to detect
frequent trading in fund shares.

American Funds Service Company will work with certain intermediaries (such as
investment dealers holding shareholder accounts in street name, retirement plan
recordkeepers, insurance company separate accounts and bank trust companies) to
apply their own procedures, provided that American Funds Service Company
believes the intermediary's procedures are reasonably designed to enforce the
frequent trading policies of the fund. You should refer to disclosures provided
by the intermediaries with which you have an account to determine the specific
trading restrictions that apply to you.

U.S. Government Securities Fund / Prospectus

<PAGE>

If American Funds Service Company identifies any activity that may constitute
frequent trading, it reserves the right to contact the intermediary and request
that the intermediary either provide information regarding an account owner's
transactions or restrict the account owner's trading. If American Funds Service
Company is not satisfied that the intermediary has taken appropriate action,
American Funds Service Company may terminate the intermediary's ability to
transact in fund shares.

There is no guarantee that all instances of frequent trading in fund shares will
be prevented.

NOTWITHSTANDING THE FUND'S SURVEILLANCE PROCEDURES AND PURCHASE BLOCKING POLICY,
ALL TRANSACTIONS IN FUND SHARES REMAIN SUBJECT TO THE RIGHT OF THE FUND AND
AMERICAN FUNDS DISTRIBUTORS TO RESTRICT POTENTIALLY ABUSIVE TRADING GENERALLY
(INCLUDING THE TYPES OF TRANSACTIONS DESCRIBED ABOVE THAT WILL NOT BE PREVENTED
OR TRIGGER A BLOCK UNDER THE PURCHASE BLOCKING POLICY). SEE THE STATEMENT OF
ADDITIONAL INFORMATION FOR MORE INFORMATION ABOUT HOW AMERICAN FUNDS SERVICE
COMPANY MAY ADDRESS OTHER POTENTIALLY ABUSIVE TRADING ACTIVITY IN THE AMERICAN
FUNDS.

PURCHASE MINIMUMS AND MAXIMUMS

The purchase minimums described on the table on page 6 may be waived in certain
cases. See the statement of additional information for details.

For accounts established with an automatic investment plan, the initial purchase
minimum of $250 may be waived if the purchases (including purchases through
exchanges from another fund) made under the plan are sufficient to reach $250
within five months of account establishment.

The effective purchase maximums for Class 529-A, 529-C, 529-E and 529-F-1 shares
will reflect the maximum applicable contribution limits under state law. See the
applicable program description for more information.

The purchase maximum for Class C shares is $500,000 per transaction. In
addition, if you have significant American Funds holdings, you may not be
eligible to invest in Class C or 529-C shares. Specifically, you may not
purchase Class C or 529-C shares if you are eligible to purchase Class A or
529-A shares at the $1 million or more sales charge discount rate (that is, at
net asset value). See "Sales charge reductions and waivers" in this prospectus
and the statement of additional information for more information regarding sales
charge discounts.

VALUING SHARES

U.S. Government Securities Fund / Prospectus
<PAGE>

are not considered reliable. For example, fair value procedures may be used if
an issuer defaults and there is no market for its securities. Use of these
procedures is intended to result in more appropriate net asset values.

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 your request, provided
that your request contains all information and legal documentation necessary to
process the transaction. A contingent deferred sales charge may apply at the
time you sell certain Class A, B and C shares.

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

Please see the statement of additional information for details and limitations
on moving investments in certain share classes to different share classes and on
moving investments held in certain accounts to different accounts.

Sales charges

CLASS A SHARES

The initial sales charge you pay each time you buy Class A shares differs
depending upon the amount you invest and may be reduced or eliminated for larger
purchases as indicated below. Any applicable sales charge will be deducted
directly from your investment.

SALES CHARGE AS A
PERCENTAGE OF:
DEALER
NET COMMISSION
OFFERING AMOUNT AS A PERCENTAGE
INVESTMENT PRICE INVESTED OF OFFERING PRICE
- -------------------------------------------------------------------------------

Less than $100,000 3.75% 3.90% 3.00%
- -------------------------------------------------------------------------------
$100,000 but less than $250,000 3.50 3.63 2.75
- -------------------------------------------------------------------------------
$250,000 but less than $500,000 2.50 2.56 2.00
- -------------------------------------------------------------------------------
$500,000 but less than $750,000 2.00 2.04 1.60
- -------------------------------------------------------------------------------
$750,000 but less than $1 million 1.50 1.52 1.20
- -------------------------------------------------------------------------------
$1 million or more and certain other none none see below
investments described below
- -------------------------------------------------------------------------------

The sales charge, expressed as a percentage of the offering price or the net
amount invested, may be higher or lower than the percentages described in the
table above due to rounding. This is because the dollar amount of the sales
charge is determined by subtracting the net asset value of the shares purchased
from the offering price, which is calculated to two decimal places using
standard rounding criteria. The impact of rounding will vary with the size of
the investment and the net asset value of the shares. Similarly, any contingent
deferred sales charge paid by you on investments in Class A shares may be higher
or lower than the 1% charge described below due to rounding.

U.S. Government Securities Fund / Prospectus

<PAGE>

EXCEPT AS PROVIDED BELOW, INVESTMENTS IN CLASS A SHARES OF $1 MILLION OR MORE
MAY BE SUBJECT TO A 1% CONTINGENT DEFERRED SALES CHARGE IF THE SHARES ARE SOLD
WITHIN ONE YEAR OF PURCHASE. 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.

CLASS A SHARE PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:

.. investments in Class A shares made by endowments or foundations with $50
million or more in assets;

.. investments made by accounts that are part of certain qualified fee-based
programs and that purchased Class A shares before the discontinuation of your
investment dealer's load-waived Class A share program with the American Funds;
and

.. certain rollover investments from retirement plans to IRAs (see "Rollovers
from retirement plans to IRAs" in this prospectus for more information).

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 plans of distribution (see "Plans of distribution" in this
prospectus).

Transfers from certain 529 plans to plans managed by the American Funds
organization will be made with no sales charge. No commission will be paid to
the dealer on such a transfer. Please see the statement of additional
information for more information.

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell American Funds and employees of The Capital Group Companies,
Inc. Please see the statement of additional information for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS

Many employer-sponsored retirement plans are eligible to purchase Class R
shares. Such eligible plans and Class R shares are described in more detail in
the fund's retirement plan prospectus.

Employer-sponsored retirement plans that are eligible to purchase Class R
shares may instead purchase Class A shares and pay the applicable Class A sales
charge, provided their recordkeepers can properly apply a sales charge on plan
investments. These plans are not eligible to make initial purchases of $1
million or more in Class A shares and thereby invest in Class A shares without
a sales charge, nor are they eligible to establish a statement of intention
that qualifies them to purchase Class A shares without a sales charge. More
information about statements of intention can be found under "Sales charge
reductions and waivers" in this prospectus. Plans investing in

U.S. Government Securities Fund / Prospectus
<PAGE>

Class A shares with a sales charge may purchase additional Class A shares in
accordance with the sales charge table in this prospectus.

Employer-sponsored retirement plans that invested in Class A shares without any
sales charge before April 1, 2004, and that continue to meet the eligibility
requirements in effect as of that date for purchasing Class A shares at net
asset value, may continue to purchase Class A shares without any initial or
contingent deferred sales charge.

A 403(b) plan may not invest in Class A or C shares unless it was invested in
Class A or C shares prior to January 1, 2009.

CLASS B AND C SHARES

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

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. The
contingent deferred sales charge is eliminated six years after purchase.

CONTINGENT DEFERRED SALES CHARGE ON CLASS B SHARES

YEAR OF REDEMPTION: 1 2 3 4 5 6 7+
- ----------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGE: 5% 4% 4% 3% 2% 1% 0%

For Class C shares, a contingent deferred sales charge of 1% applies if shares
are sold within one year of purchase. The contingent deferred sales charge is
eliminated one year after purchase.

Any contingent deferred sales charge paid by you on redemptions of Class B or C
shares, expressed as a percentage of the applicable redemption amount, may be
higher or lower than the percentages described above due to rounding.

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" in this prospectus. 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, followed by shares that you have owned the longest.

See "Plans of distribution" in this prospectus for ongoing compensation paid to
your dealer or financial adviser for all share classes.

U.S. Government Securities Fund / Prospectus

<PAGE>

AUTOMATIC 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-1 shares in the month of the 10-year anniversary of the
purchase date; however, Class 529-C shares will not convert to Class 529-F-1
shares. The Internal Revenue Service currently takes the position that these
automatic conversions are not taxable. Should its position change, the automatic
conversion feature may be suspended. If this happens, you would have the option
of converting your Class B, 529-B or C shares to the respective share classes at
the anniversary dates described above. This exchange would be based on the
relative net asset values of the two classes in question, without the imposition
of a sales charge or fee, but you might face certain tax consequences as a
result.

CLASS 529-E AND CLASS F SHARES

Class 529-E and Class F shares are sold without any initial or contingent
deferred sales charge.

Sales charge reductions and waivers

TO RECEIVE A REDUCTION IN YOUR CLASS A INITIAL SALES CHARGE, YOU MUST LET YOUR
FINANCIAL ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW AT THE TIME YOU
PURCHASE SHARES THAT YOU QUALIFY FOR SUCH A REDUCTION. IF YOU DO NOT LET YOUR
ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW THAT YOU ARE ELIGIBLE FOR A
REDUCTION, YOU MAY NOT RECEIVE A SALES CHARGE DISCOUNT TO WHICH YOU ARE
OTHERWISE ENTITLED. In order to determine your eligibility to receive a sales
charge discount, it may be necessary for you to provide your adviser or American
Funds Service Company with information and records (including account
statements) of all relevant accounts invested in the American Funds.

IN ADDITION TO THE INFORMATION IN THIS PROSPECTUS, YOU MAY OBTAIN MORE
INFORMATION ABOUT SHARE CLASSES, SALES CHARGES AND SALES CHARGE REDUCTIONS AND
WAIVERS THROUGH A LINK ON THE HOME PAGE OF THE AMERICAN FUNDS WEBSITE AT
AMERICANFUNDS.COM, FROM THE STATEMENT OF ADDITIONAL INFORMATION OR FROM YOUR
FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE

Consistent with the policies described in this prospectus, you and your
"immediate family" (your spouse -- or equivalent if recognized under local law
- -- and your children under the age of 21) may combine all of your American Funds
investments to reduce your Class A sales charge. Certain investments in the
American Funds Target Date Retirement Series may also be combined for this
purpose. Please see the American Funds Target Date Retirement Series prospectus
for further information. However, for this purpose, investments representing
direct purchases of American Funds Money Market Fund are

U.S. Government Securities Fund / Prospectus
<PAGE>

excluded. Following are different ways that you may qualify for a reduced 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 certain other accounts, such as:

. trust accounts established by the above individuals (please see the statement
of additional information for details regarding aggregation of trust accounts
where the person(s) who established the trust is/are deceased);

. solely controlled business accounts; and

. single-participant retirement plans.

CONCURRENT PURCHASES

You may combine simultaneous purchases (including, upon your request, purchases
for gifts) of any class of shares of two or more American Funds (excluding
American Funds Money Market Fund) to qualify for a reduced Class A sales
charge.

RIGHTS OF ACCUMULATION

You may take into account your accumulated holdings in all share classes of the
American Funds (excluding American Funds Money Market Fund) to determine the
initial sales charge you pay on each purchase of Class A shares. Subject to
your investment dealer's capabilities, your accumulated holdings will be
calculated as the higher of (a) the current value of your existing holdings or
(b) the amount you invested (including reinvested dividends and capital gains,
but excluding capital appreciation) less any withdrawals. Please see the
statement of additional information for further details. You should retain any
records necessary to substantiate the historical amounts you have invested.

If you make a gift of shares, upon your request you may purchase the shares at
the sales charge discount allowed under rights of accumulation of all of your
American Funds accounts.

STATEMENT OF INTENTION

U.S. Government Securities Fund / Prospectus

<PAGE>

the statement. A portion of your account may be held in escrow to cover
additional Class A sales charges that may be due if your total purchases over
the statement period do not qualify you for the applicable sales charge
reduction. Employer-sponsored retirement plans may be restricted from
establishing statements of intention. See "Sales charges" in this prospectus
for more information.

RIGHT OF REINVESTMENT

Proceeds from a Class B share redemption for which a contingent deferred sales
charge was paid will be reinvested in Class A shares without any initial sales
charge. If you redeem Class B shares without paying a contingent deferred sales
charge, you may reinvest the proceeds in Class B shares or purchase Class A
shares; if you purchase Class A shares, you are responsible for paying any
applicable Class A sales charges. Proceeds from any other type of redemption and
all dividend payments and capital gain distributions will be reinvested in the
same share class from which the original redemption or distribution was made.
Any contingent deferred sales charge on Class A or C shares will be credited to
your account. Redemption proceeds of Class A shares representing direct
purchases in American Funds Money Market Fund that are reinvested in other
American Funds will be subject to a sales charge.

Proceeds will be reinvested at the next calculated net asset value after your
request is received by American Funds Service Company, provided that your
request contains all information and legal documentation necessary to process
the transaction. For purposes of this "right of reinvestment policy," automatic
transactions (including, for example, automatic purchases, withdrawals and
payroll deductions) and ongoing retirement plan contributions are not eligible
for investment without a sales charge. See the statement of additional
information for further information on the operation of this policy with respect
to required minimum distributions. You may not reinvest proceeds in the American
Funds as described in this paragraph if such proceeds are subject to a purchase
block as described under "Frequent trading of fund shares" in this prospectus.
This paragraph does not apply to certain rollover investments as described under
"Rollovers from retirement plans to IRAs" in this prospectus.

U.S. Government Securities Fund / Prospectus
<PAGE>

CONTINGENT DEFERRED SALES CHARGE WAIVERS

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

.. permitted exchanges of shares, except if shares acquired by exchange are then
redeemed within the period during which a contingent deferred sales charge
would apply to the initial shares purchased;

.. tax-free returns of excess contributions to IRAs;

.. redemptions due to death or postpurchase disability of the shareholder (this
generally excludes accounts registered in the names of trusts and other
entities);

.. for 529 share classes only, redemptions due to a beneficiary's death,
postpurchase disability or receipt of a scholarship (to the extent of the
scholarship award);

.. redemptions due to the complete termination of a trust upon the death of the
trustor/ grantor or beneficiary, but only if such termination is specifically
provided for in the trust document; and

.. the following types of transactions, if together they do not exceed 12% of the
value of an account annually (see the statement of additional information for
more information about waivers regarding these types of transactions):

-- redemptions due to receiving required minimum distributions from retirement
accounts upon reaching age 70 1/2 (required minimum distributions that
continue to be taken by the beneficiary(ies) after the account owner is
deceased also qualify for a waiver); and

-- if you have established an automatic withdrawal plan, redemptions through
such a plan (including any dividends and/or capital gain distributions taken
in cash).

To have your Class A, B or C contingent deferred sales charge waived, you must
inform your adviser or American Funds Service Company at the time you redeem
shares that you qualify for such a waiver.

U.S. Government Securities Fund / Prospectus

<PAGE>

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, C or F shares through
an IRA rollover, subject to the other provisions of this prospectus. Rollovers
invested in Class A shares from retirement plans will be subject to applicable
sales charges. The following rollovers to Class A shares will be made without a
sales charge:

.. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
custodian; and

.. rollovers to IRAs that are attributable to American Funds investments, if they
meet the following requirements:

-- the assets being rolled over were invested in American Funds at the time of
distribution; and

-- the rolled over assets are contributed to an American Funds IRA with Capital
Bank and Trust Company as custodian.

IRA rollover assets that roll over without a sales charge as described above
will not be subject to a contingent deferred sales charge, and investment
dealers will be compensated solely with an annual service fee that begins to
accrue immediately. IRA rollover assets invested in Class A shares that are not
attributable to American Funds investments, as well as future contributions to
the IRA, will be subject to sales charges and the terms and conditions generally
applicable to Class A share investments as described in this prospectus and the
statement of additional information.

U.S. Government Securities Fund / Prospectus
<PAGE>

Plans of distribution

The fund has plans of distribution or "12b-1 plans" for certain share classes,
under which it may finance activities primarily intended to sell shares,
provided that the categories of expenses are approved in advance by the fund's
board of trustees. The plans provide for payments, based on annualized
percentages of average daily net assets, of up to .30% for Class A shares; up to
..50% for Class 529-A shares; up to 1.00% for Class B and 529-B shares; up to
1.00% for Class C and 529-C shares; up to .75% for Class 529-E shares; and up to
..50% for Class F-1 and 529-F-1 shares. For all share classes indicated above, up
to .25% of these expenses may be used to pay service fees to qualified dealers
for providing certain shareholder services. The amount remaining 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 in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund" in this prospectus. 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 your 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.

U.S. Government Securities Fund / Prospectus

<PAGE>

Other compensation to dealers

American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 100 dealers (or their
affiliates) that have sold shares of the American Funds. The level of payments
made to a qualifying firm in any given year will vary and in no case would
exceed the sum of (a) .10% of the previous year's American Funds sales by that
dealer and (b) .02% of American Funds assets attributable to that dealer. For
calendar year 2008, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the average assets of the American Funds.
Aggregate payments may also change from year to year. A number of factors will
be considered in determining payments, including the qualifying dealer's sales,
assets and redemption rates, and the quality of the dealer's relationship with
American Funds Distributors. American Funds Distributors makes these payments to
help defray the costs incurred by qualifying dealers in connection with efforts
to educate financial advisers about the American Funds so that they can make
recommendations and provide services that are suitable and meet shareholder
needs. American Funds Distributors will, on an annual basis, determine the
advisability of continuing these payments. American Funds Distributors may also
pay expenses associated with meetings conducted by dealers outside the top 100
firms to facilitate educating financial advisers and shareholders about the
American Funds. If investment advisers, distributors or other affiliates of
mutual funds pay additional compensation or other incentives in differing
amounts, dealer firms and their advisers may have financial incentives for
recommending a particular mutual fund over other mutual funds. You should
consult with your financial adviser and review carefully any disclosure by your
financial adviser's firm as to compensation received.

How to sell shares

You may sell (redeem) 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:

-- more than $75,000;

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

-- sent to an address other than the address of record or to an address of
record that has been changed within the last 10 days.

U.S. Government Securities Fund / Prospectus
<PAGE>

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

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

TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY OR USING THE INTERNET

. Redemptions by telephone, fax or the Internet (including American FundsLine
and americanfunds.com) are limited to $75,000 per American Funds 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.

If you recently purchased shares and subsequently request a redemption of those
shares, you will receive proceeds from the redemption once a sufficient period
of time has passed to reasonably ensure that checks or drafts (including
certified or cashier's checks) for the shares purchased have cleared (normally
10 business days).

TRANSACTIONS BY TELEPHONE, FAX OR THE INTERNET

Generally, you are automatically eligible to redeem or exchange shares by
telephone, fax or the Internet, 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 Internet 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) that may be
incurred in connection with the exercise of these privileges, provided that
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, American Funds Service
Company and/or the fund may be liable for losses due to unauthorized or
fraudulent instructions.

U.S. Government Securities Fund / Prospectus

<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

The fund declares daily dividends from net investment income and distributes the
accrued dividends, which may fluctuate, to you each month. Dividends begin
accruing one day after payment for shares is received by the fund or American
Funds Service Company.

Capital gains, if any, are usually distributed in December. When a 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 other American Funds, 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.
Dividends and capital gain distributions for 529 share classes will be
automatically reinvested.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

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

SHAREHOLDER FEES

Fees borne directly by the fund normally have the effect of reducing a
shareholder's taxable income on distributions. By contrast, fees paid directly
to advisers by a fund shareholder for ongoing advice are deductible for income
tax purposes only to the extent that they (combined with certain other
qualifying expenses) exceed 2% of such shareholder's adjusted gross income.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION. HOLDERS OF CLASS 529 SHARES
SHOULD REFER TO THE APPLICABLE PROGRAM DESCRIPTION FOR MORE INFORMATION
REGARDING THE TAX CONSEQUENCES OF SELLING CLASS 529 SHARES.

U.S. Government Securities Fund / Prospectus
<PAGE>

Financial highlights

The Financial Highlights table is intended to help you understand the fund's
results for the past five fiscal years. Certain information reflects financial
results for a single share of a particular class. 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 capital gain
distributions). Where indicated, figures in the table reflect the impact, if
any, of certain reimbursements/waivers from Capital Research and Management
Company. For more information about these reimbursements/waivers, see the fund's
statement of additional information and annual report. The information in the
Financial Highlights table has been audited by Deloitte & Touche LLP, whose
report, along with the fund's financial statements, is included in the statement
of additional information, which is available upon request.

INCOME FROM INVESTMENT OPERATIONS/1/
Net
gains
(losses) on
securities
Net asset (both Dividends
value, Net realized Total from (from net Net asset
beginning investment and investment investment value, end of Total
of period income unrealized) operations income) period return/2,3/
- -----------------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 8/31/2009 $13.56 $.42 $ .57 $ .99 $(.44) $14.11 7.43%
Year ended 8/31/2008 13.35 .54 .22 .76 (.55) 13.56 5.73
Year ended 8/31/2007 13.32 .59 .03 .62 (.59) 13.35 4.72
Year ended 8/31/2006 13.72 .52 (.39 ) .13 (.53) 13.32 1.04
Year ended 8/31/2005 13.74 .44 --/4/ .44 (.46) 13.72 3.23
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B:
Year ended 8/31/2009 13.56 .32 .57 .89 (.34) 14.11 6.64
Year ended 8/31/2008 13.35 .44 .22 .66 (.45) 13.56 4.99
Year ended 8/31/2007 13.32 .49 .03 .52 (.49) 13.35 3.99
Year ended 8/31/2006 13.72 .43 (.39 ) .04 (.44) 13.32 .32
Year ended 8/31/2005 13.74 .34 --/4/ .34 (.36) 13.72 2.51
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C:
Year ended 8/31/2009 $13.56 $.31 $ .57 $ .88 $(.33) $14.11 6.59%
Year ended 8/31/2008 13.35 .43 .22 .65 (.44) 13.56 4.95
Year ended 8/31/2007 13.32 .49 .03 .52 (.49) 13.35 3.94
Year ended 8/31/2006 13.72 .42 (.39 ) .03 (.43) 13.32 .27
Year ended 8/31/2005 13.74 .33 --/4/ .33 (.35) 13.72 2.45
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS F-1:
Year ended 8/31/2009 13.56 .42 .57 .99 (.44) 14.11 7.42
Year ended 8/31/2008 13.35 .54 .22 .76 (.55) 13.56 5.79
Year ended 8/31/2007 13.32 .60 .03 .63 (.60) 13.35 4.80
Year ended 8/31/2006 13.72 .53 (.39 ) .14 (.54) 13.32 1.10
Year ended 8/31/2005 13.74 .44 --/4/ .44 (.46) 13.72 3.24
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS F-2:
Year ended 8/31/2009 13.56 .46 .57 1.03 (.48) 14.11 7.67
Period from 8/7/2008 to 8/31/2008/5/ 13.48 .03 .08 .11 (.03) 13.56 .85
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 8/31/2009 13.56 .42 .57 .99 (.44) 14.11 7.37
Year ended 8/31/2008 13.35 .53 .22 .75 (.54) 13.56 5.70
Year ended 8/31/2007 13.32 .58 .03 .61 (.58) 13.35 4.66
Year ended 8/31/2006 13.72 .52 (.39 ) .13 (.53) 13.32 1.00
Year ended 8/31/2005 13.74 .43 --/4/ .43 (.45) 13.72 3.18
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 8/31/2009 13.56 .30 .57 .87 (.32) 14.11 6.51
Year ended 8/31/2008 13.35 .42 .22 .64 (.43) 13.56 4.85
Year ended 8/31/2007 13.32 .48 .03 .51 (.48) 13.35 3.85
Year ended 8/31/2006 13.72 .41 (.39 ) .02 (.42) 13.32 .19
Year ended 8/31/2005 13.74 .32 --/4/ .32 (.34) 13.72 2.34
- -----------------------------------------------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
CLASS 529-C:
Year ended 8/31/2009 $13.56 $.31 $ .57 $ .88 $(.33) $14.11 6.52%
Year ended 8/31/2008 13.35 .42 .22 .64 (.43) 13.56 4.87
Year ended 8/31/2007 13.32 .48 .03 .51 (.48) 13.35 3.86
Year ended 8/31/2006 13.72 .41 (.39 ) .02 (.42) 13.32 .20
Year ended 8/31/2005 13.74 .32 --/4/ .32 (.34) 13.72 2.35
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 8/31/2009 13.56 .38 .57 .95 (.40) 14.11 7.07
Year ended 8/31/2008 13.35 .49 .22 .71 (.50) 13.56 5.40
Year ended 8/31/2007 13.32 .54 .03 .57 (.54) 13.35 4.38
Year ended 8/31/2006 13.72 .48 (.39 ) .09 (.49) 13.32 .73
Year ended 8/31/2005 13.74 .39 --/4/ .39 (.41) 13.72 2.88
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS 529-F-1:
Year ended 8/31/2009 13.56 .45 .57 1.02 (.47) 14.11 7.59
Year ended 8/31/2008 13.35 .56 .22 .78 (.57) 13.56 5.93
Year ended 8/31/2007 13.32 .61 .03 .64 (.61) 13.35 4.90
Year ended 8/31/2006 13.72 .54 (.39 ) .15 (.55) 13.32 1.20
Year ended 8/31/2005 13.74 .43 --/4/ .43 (.45) 13.72 3.20
- -----------------------------------------------------------------------------------------------------------------------------------

Ratio of Ratio of
expenses expenses
to average to average
net assets net assets
Net assets, before after Ratio of net
end of reim- reim- income
period bursements/ bursements/ to average
(in millions) waivers waivers/3/ net assets/3/
- ----------------------------------------------------------------------------------------------

CLASS A:
Year ended 8/31/2009 $4,745 .64% .63% 3.05%
Year ended 8/31/2008 2,602 .77 .74 3.95
Year ended 8/31/2007 1,758 .79 .76 4.38
Year ended 8/31/2006 1,685 .77 .74 3.89
Year ended 8/31/2005 1,801 .76 .74 3.17
- ----------------------------------------------------------------------------------------------
CLASS B:
Year ended 8/31/2009 356 1.39 1.38 2.31
Year ended 8/31/2008 203 1.46 1.44 3.27
Year ended 8/31/2007 158 1.51 1.47 3.66
Year ended 8/31/2006 169 1.49 1.46 3.17
Year ended 8/31/2005 196 1.48 1.46 2.45
- ----------------------------------------------------------------------------------------------
CLASS C:
Year ended 8/31/2009 $ 686 1.43% 1.42% 2.24%
Year ended 8/31/2008 244 1.50 1.47 3.19
Year ended 8/31/2007 125 1.55 1.52 3.62
Year ended 8/31/2006 109 1.55 1.52 3.11
Year ended 8/31/2005 120 1.53 1.51 2.40
- ----------------------------------------------------------------------------------------------
CLASS F-1:
Year ended 8/31/2009 185 .65 .65 3.05
Year ended 8/31/2008 142 .70 .67 4.01
Year ended 8/31/2007 99 .72 .69 4.44
Year ended 8/31/2006 76 .71 .68 3.98
Year ended 8/31/2005 54 .75 .73 3.18
- ----------------------------------------------------------------------------------------------
CLASS F-2:
Year ended 8/31/2009 57 .41 .41 3.24
Period from 8/7/2008 to 8/31/2008/5/ 1 .03 .03 .25
- ----------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 8/31/2009 145 .70 .69 2.99
Year ended 8/31/2008 68 .79 .76 3.93
Year ended 8/31/2007 44 .84 .81 4.33
Year ended 8/31/2006 39 .81 .78 3.86
Year ended 8/31/2005 38 .81 .79 3.13
- ----------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 8/31/2009 25 1.51 1.50 2.19
Year ended 8/31/2008 16 1.60 1.57 3.14
Year ended 8/31/2007 13 1.64 1.60 3.53
Year ended 8/31/2006 13 1.63 1.60 3.03
Year ended 8/31/2005 14 1.65 1.63 2.29
- ----------------------------------------------------------------------------------------------
(The Financial Highlights table continues on the following page.)
CLASS 529-C:
Year ended 8/31/2009 $ 78 1.50% 1.49% 2.19%
Year ended 8/31/2008 40 1.58 1.55 3.14
Year ended 8/31/2007 27 1.63 1.60 3.54
Year ended 8/31/2006 24 1.62 1.59 3.06
Year ended 8/31/2005 23 1.64 1.61 2.30
- ----------------------------------------------------------------------------------------------
CLASS 529-E:
Year ended 8/31/2009 9 .99 .98 2.71
Year ended 8/31/2008 5 1.07 1.04 3.66
Year ended 8/31/2007 4 1.12 1.09 4.05
Year ended 8/31/2006 3 1.09 1.06 3.60
Year ended 8/31/2005 3 1.11 1.09 2.83
- ----------------------------------------------------------------------------------------------
CLASS 529-F-1:
Year ended 8/31/2009 9 .50 .49 3.21
Year ended 8/31/2008 5 .57 .54 4.15
Year ended 8/31/2007 3 .62 .59 4.56
Year ended 8/31/2006 2 .60 .57 4.09
Year ended 8/31/2005 2 .78 .75 3.18
- ----------------------------------------------------------------------------------------------

U.S. Government Securities Fund / Prospectus

<PAGE>

YEAR ENDED AUGUST 31
2009 2008 2007 2006 2005
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 166% 92% 110% 146% 104%
OF SHARES

1 Based on average shares outstanding.
2 Total returns exclude any applicable sales charges, including contingent
deferred sales charges.
3 This column reflects the impact, if any, of certain reimbursements/waivers
from Capital Research and Management Company. During some of the periods shown,
Capital Research and Management Company reduced fees for investment advisory
services.
4 Amount less than $.01.

5 Based on operations for the period shown and, accordingly, may not be
representative of a full year.

U.S. Government Securities Fund / Prospectus

<PAGE>

NOTES

U.S. Government Securities Fund / Prospectus
<PAGE>

[Logo - American Funds/(R)/] The right choice for the long term/(R)/

FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180

FOR RETIREMENT PLAN SERVICES Call your employer or plan
administrator

FOR 529 PLANS American Funds Service Company
800 /421-0180, ext. 529

American FundsLine
FOR 24-HOUR INFORMATION 800/325-3590
americanfunds.com

Telephone calls you have with American Funds may be monitored or
recorded for quality assurance, verification and recordkeeping
purposes. By speaking to American Funds on the telephone, you
consent to such monitoring and recording.
- -----------------------------------------------------------------------------------

ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS The shareholder reports contain
additional information about the fund, including financial statements,
investment results, portfolio holdings, a discussion of market conditions and
the fund's investment strategies and the independent registered public
accounting firm's report (in the annual report).

PROGRAM DESCRIPTION The program description for the CollegeAmerica/(R)/ 529
program contains additional information about the policies and services related
to 529 plan accounts.

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information about the fund,
including the fund's financial statements, and is incorporated by reference into
this prospectus. This means that the current SAI, for legal purposes, is part of
this prospectus. The codes of ethics describe the personal investing policies
adopted by the fund, the fund's investment adviser and its affiliated companies.

The codes of ethics and current SAI are on file with the U.S. 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. (202/551-8090) or on the EDGAR database on the SEC's website at
sec.gov or, after payment of a duplicating fee, via e-mail request to
publicinfo@sec.gov or by writing to the SEC's Public Reference Section, 100 F
Street, NE, Washington, D.C. 20549-1520. The codes of ethics, current SAI and
shareholder reports are also available, free of charge, on our website
americanfunds.com.

E-DELIVERY AND HOUSEHOLD MAILINGS Each year you are automatically sent an
updated summary prospectus and annual and semi-annual reports 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 who are part of the same family and share the same
household address. You may elect to receive these documents electronically in
lieu of paper form by enrolling in e-delivery on our website, americanfunds.com.

If you would like to opt out of household-based mailings or receive a
complimentary copy of the current SAI, codes of ethics, annual/semi-annual
report to shareholders or applicable program description, 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.

SECURITIES INVESTOR PROTECTION CORPORATION (SIPC) Shareholders may obtain
information about SIPC/(R)/ on its website at sipc.org or by calling
202/371-8300.

Investment Company File No. 811-04318
MFGEPR-922-1109P Litho in USA CGD/B/8010
- ---------------------------------------------------------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust

<PAGE>

[Logo - American Funds/(R)/] The right choice for the long term/(R)/

U.S. Government
Securities Fund/SM/

CLASS TICKER R-3......... RGVCX
A........... AMUSX R-4......... RGVEX
R-1......... RGVAX R-5......... RGVFX
R-2......... RGVBX R-6......... RGVGX

RETIREMENT PLAN
PROSPECTUS

November 1, 2009

TABLE OF CONTENTS

1 Investment objective
1 Fees and expenses of the fund
3 Principal investment strategies
3 Principal risks
4 Investment results
6 Management
6 Purchase and sale of fund shares
7 Tax information
7 Payments to broker-dealers and other financial
intermediaries
8 Investment objective, strategies and risks
10 Additional investment results
11 Management and organization
14 Purchase, exchange and sale of shares
18 Sales charges
20 Sales charge reductions
22 Rollovers from retirement plans to IRAs
23 Plans of distribution
24 Other compensation to dealers
25 Distributions and taxes
26 Financial highlights

<PAGE>

[This page intentionally left blank for this filing]

<PAGE>

The fund's investment objective is to provide a high level of current income
consistent with prudent investment risk and preservation of capital.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for a Class A sales charge discount if you
and your family invest, or agree to invest in the future, at least $100,000 in
American Funds. More information about these and other discounts is available
from your financial professional and in the "Sales charge reductions" section on
page 20 of the retirement plan prospectus and in the "Sales charge reductions
and waivers" section on page 51 of the fund's statement of additional
information.

SHAREHOLDER FEES
(fees paid directly from your investment)
- ------------------------------------------------------------------------------
CLASS A ALL R SHARE CLASSES
------------------------------

Maximum sales charge (load) imposed on 3.75% none
purchases (as a percentage of offering price)
- ------------------------------------------------------------------------------
Maximum deferred sales charge (load) none none
(as a percentage of the amount redeemed)
- ------------------------------------------------------------------------------
Maximum sales charge (load) imposed none none
on reinvested dividends
- ------------------------------------------------------------------------------
Redemption or exchange fees none none

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment)
- ----------------------------------------------SHARE CLASSES--------------------

--A-----R-1----R-2----R-3----R-4----R-5------R-6---

---------------------------------------------------

Management fees 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
- -------------------------------------------------------------------------------
Distribution and/or 0.24 1.00 0.75 0.50 0.25 none none
service (12b-1) fees
- -------------------------------------------------------------------------------
Other expenses 0.15 0.20 0.49 0.28 0.19 0.13 0.08/*/
- -------------------------------------------------------------------------------
Total annual fund 0.64 1.45 1.49 1.03 0.69 0.38 0.33
operating expenses
- -------------------------------------------------------------------------------

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------

A $438 $572 $718 $1,143
- --------------------------------------------------------------------
R-1 148 459 792 1,735
- --------------------------------------------------------------------
R-2 152 471 813 1,779
- --------------------------------------------------------------------
R-3 105 328 569 1,259
- --------------------------------------------------------------------
R-4 70 221 384 859
- --------------------------------------------------------------------
R-5 39 122 213 480
- --------------------------------------------------------------------
R-6/*/ 34 106 185 418
- --------------------------------------------------------------------

* Based on estimated amounts for the current fiscal year.

PORTFOLIO TURNOVER

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Principal investment strategies

Principal risks

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

For example, as with other debt securities, the value of U.S. government
securities generally will decline when interest rates rise and increase when
interest rates fall. Longer

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

maturity securities generally have higher rates of interest but may be subject
to greater price fluctuations than shorter maturity securities.

It is important to note that neither your investment in the fund nor the fund's
yield is guaranteed by the U.S. government.

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.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 5 shows how the fund's average annual total
returns for various periods compare with different broad measures of market
performance. This information provides some indication of the risks of investing
in the fund. Past results are not predictive of future results. Updated
information on the fund's results can be obtained by visiting americanfunds.com.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Calendar year total returns for Class A shares
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999 -1.59%
2000 11.93
2001 6.41
2002 9.02
2003 1.91
2004 2.88
2005 2.27
2006 3.15
2007 6.67
2008 7.73
[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 5.34% (quarter ended December 31, 2008)
LOWEST -2.00% (quarter ended June 30, 2004)

The fund's total return for the nine months ended September 30, 2009, was 2.59%.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITH MAXIMUM SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -----------------------------------------------------------------------------

A 10/17/85 3.69% 3.73% 4.57% 6.57%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------

R-1 6/13/02 6.89% 3.71% 3.82%
- -------------------------------------------------------------------
R-2 5/31/02 6.95 3.77 3.92
- -------------------------------------------------------------------
R-3 6/6/02 7.40 4.17 4.33
- -------------------------------------------------------------------
R-4 5/28/02 7.76 4.54 4.73
- -------------------------------------------------------------------
R-5 5/15/02 8.09 4.85 5.14

INDEXES/1/ 1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

Citigroup Treasury/Govt 10.54% 5.87% 6.12% 7.90%
Sponsored/Mortgage Index
Lipper General U.S. Government Funds 7.27 4.27 4.74 6.56
Average
Consumer Price Index 0.09 2.67 2.52 2.88
Class A 30-day annualized yield at August 31, 2009: 2.71%
(For current yield information, please call American FundsLine/(R)/ at
800/325-3590.)

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:

Purchase and sale of fund shares

Please contact your plan administrator or recordkeeper in order to sell (redeem)
shares from your retirement plan.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Tax information

Dividends and capital gains distributed by the fund to tax-deferred retirement
plan accounts are not currently taxable.

Payments to broker-dealers and other financial intermediaries

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Investment objective, strategies and risks

The fund's investment objective is to provide a high level of current income
consistent with prudent investment risk and preservation of capital.

It is important to note that neither your investment in the fund nor the fund's
yield is guaranteed by the U.S. government.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

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.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Additional investment results

Unlike the table on page 5, the table below reflects the fund's results
calculated without a sales charge.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITHOUT SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -----------------------------------------------------------------------------

A 10/17/85 7.73% 4.52% 4.97% 6.74%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------

INDEXES/1/ 1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

1 The Citigroup Treasury/Government Sponsored/Mortgage Index reflects the market
sectors in which the fund primarily invests. The Lipper General U.S. Government
Funds Average includes the fund and other mutual funds that disclose investment
objectives that are reasonably comparable to those of the fund. The Consumer
Price Index provides a comparison of the fund's results to inflation.
2 Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Management and organization

INVESTMENT ADVISER

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

before any authority granted under an exemptive order could be exercised. A
meeting of the fund's shareholders of record as of August 28, 2009, to consider,
among other items, approval of this arrangement is scheduled for November 24,
2009. There is no assurance that Capital Research and Management Company will
incorporate its investment divisions or obtain shareholders' approval to
exercise any authority, if granted, under an exemptive order.

EXECUTION OF PORTFOLIO TRANSACTIONS

PORTFOLIO HOLDINGS

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

ROLE IN
INVESTMENT EXPERIENCE MANAGEMENT
PORTFOLIO COUNSELOR EXPERIENCE IN THIS FUND OF THE FUND
- ------------------------------------------------------------------------------------

JOHN H. SMET Investment 23 years Serves as a
professional for 27 fixed-income portfolio
years in total; counselor
26 years with Capital
Research and
Management Company or
affiliate
- ------------------------------------------------------------------------------------
THOMAS H. HOGH Investment 13 years Serves as a
professional for 23 fixed-income portfolio
years in total; counselor
19 years with Capital
Research and
Management Company or
affiliate
- ------------------------------------------------------------------------------------
MARK R. MACDONALD Investment 3 years Serves as a
professional for 24 fixed-income portfolio
years in total; counselor
15 years with Capital
Research and
Management Company or
affiliate
affiliate
- ------------------------------------------------------------------------------------

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage is in the statement of
additional information.

CERTAIN PRIVILEGES AND/OR SERVICES DESCRIBED ON THE FOLLOWING PAGES OF THIS
PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION MAY NOT BE AVAILABLE
TO YOU, DEPENDING ON YOUR INVESTMENT DEALER OR RETIREMENT PLAN RECORDKEEPER.
PLEASE SEE YOUR FINANCIAL ADVISER, INVESTMENT DEALER OR RETIREMENT PLAN
RECORDKEEPER FOR MORE INFORMATION.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Purchase, exchange and sale of shares

AMERICAN FUNDS SERVICE COMPANY, THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND
AND AMERICAN FUNDS DISTRIBUTORS,/(R)/ THE FUND'S DISTRIBUTOR, IS REQUIRED BY LAW
TO OBTAIN CERTAIN PERSONAL INFORMATION FROM YOU OR ANY OTHER PERSON(S) ACTING ON
YOUR BEHALF IN ORDER TO VERIFY YOUR OR SUCH PERSON'S IDENTITY. IF YOU DO NOT
PROVIDE THE INFORMATION, THE TRANSFER AGENT MAY NOT BE ABLE TO OPEN YOUR
ACCOUNT. IF THE TRANSFER AGENT IS UNABLE TO VERIFY YOUR IDENTITY OR THAT OF ANY
OTHER PERSON(S) AUTHORIZED TO ACT ON YOUR BEHALF, OR BELIEVES IT HAS IDENTIFIED
POTENTIALLY CRIMINAL ACTIVITY, THE FUND AND AMERICAN FUNDS DISTRIBUTORS RESERVE
THE RIGHT TO CLOSE YOUR ACCOUNT OR TAKE SUCH OTHER ACTION THEY DEEM REASONABLE
OR REQUIRED BY LAW.

PURCHASES AND EXCHANGES

Eligible retirement plans generally may open an account and purchase Class A or
R shares by contacting any investment dealer (who may impose transaction charges
in addition to those described in this prospectus) authorized to sell these
classes of the fund's shares. Some or all R share classes may not be available
through certain investment dealers. Additional shares may be purchased through a
plan's administrator or recordkeeper.

Class A shares are generally not available for retirement plans using the
PlanPremier or Recordkeeper Direct recordkeeping programs.

Class R shares are generally available only to 401(k) plans, 457 plans, 403(b)
plans, profit-sharing and money purchase pension plans, defined benefit plans
and nonqualified deferred compensation plans. Class R shares also are generally
available only to retirement plans where plan level or omnibus accounts are held
on the books of the fund. Class R-5 and R-6 shares are generally available only
to fee-based programs or through retirement plan intermediaries. In addition,
Class R-6 shares are available for investment by American Funds Target Date
Retirement Series/(R)/,and Class R-5 shares are available to other registered
investment companies approved by the fund. Class R shares generally are not
available to retail nonretirement accounts, traditional and Roth individual
retirement accounts (IRAs), Coverdell Education Savings Accounts, SEPs, SARSEPs,
SIMPLE IRAs and 529 college savings plans.

Shares of the fund offered through this prospectus generally may be exchanged
into shares of the same class of other American Funds. Exchanges of Class A
shares from American Funds Money Market Fund/SM/ purchased without a sales
charge generally will be subject to the appropriate sales charge.

FREQUENT TRADING OF FUND SHARES

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

exchange activity that the fund or American Funds Distributors has determined
could involve actual or potential harm to the fund, may be rejected.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of trustees has adopted a "purchase
blocking policy" under which any shareholder redeeming shares having a value of
$5,000 or more from the fund will be precluded from investing in the fund for 30
calendar days after the redemption transaction. This policy also applies to
redemptions and purchases that are part of exchange transactions. Under the
fund's purchase blocking policy, certain purchases will not be prevented and
certain redemptions will not trigger a purchase block, such as systematic
redemptions and purchases, where the entity maintaining the shareholder account
is able to identify the transaction as a systematic redemption or purchase;
purchases and redemptions of shares having a value of less than $5,000;
transactions in Class 529 shares; purchases and redemptions resulting from
reallocations by American Funds Target Date Retirement Series; retirement plan
contributions, loans and distributions (including hardship withdrawals)
identified as such on the retirement plan recordkeeper's system; and purchase
transactions involving transfers of assets, rollovers, Roth IRA conversions and
IRA recharacterizations, where the entity maintaining the shareholder account is
able to identify the transaction as one of these types of transactions.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

the fund. You should refer to disclosures provided by the intermediaries with
which you have an account to determine the specific trading restrictions that
apply to you.

There is no guarantee that all instances of frequent trading in fund shares will
be prevented.

VALUING SHARES

The net asset value of each share class of the fund is the value of a single
share. The fund calculates the net asset value each day the New York Stock
Exchange is open for trading as of approximately 4 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, the fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, fair value procedures may be used if an issuer
defaults and there is no market for its securities. Use of these procedures is
intended to result in more appropriate net asset values.

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

FUND EXPENSES

The "Other expenses" items in the table on page 1 include custodial, legal,
transfer agent and subtransfer agent/recordkeeping payments, as well as various
other expenses. Subtransfer agent/recordkeeping payments may be made to the
fund's investment adviser, affiliates of the adviser and unaffiliated third
parties for providing recordkeeping and other administrative services to
retirement plans invested in the fund in lieu of the transfer agent providing
such services. The amount paid for subtransfer agent/recordkeeping services will
vary depending on the share class selected and the entity receiving the
payments. The table below shows the maximum payments to entities providing
services to retirement plans.

PAYMENTS TO AFFILIATED ENTITIES PAYMENTS TO UNAFFILIATED
ENTITIES
- -------------------------------------------------------------------------------

Class A .05% of assets or .05% of assets or
$12 per participant position/1/ $12 per participant position/1/
- -------------------------------------------------------------------------------
Class R-1 .10% of assets .10% of assets
- -------------------------------------------------------------------------------
Class R-2 .15% of assets plus $27 per .25% of assets
participant position/2/ or .35%
of assets/3/
- -------------------------------------------------------------------------------
Class R-3 .10% of assets plus $12 per .15% of assets
participant position/2/ or .19%
of assets/3/
Class R-4 .10% of assets .10% of assets
- -------------------------------------------------------------------------------
Class R-5 .05% of assets .05% of assets
- -------------------------------------------------------------------------------
Class R-6 none none
- -------------------------------------------------------------------------------

1 Payment amount depends on the date upon which services commenced.
2 Payment with respect to Recordkeeper Direct/(R)/ program.
3 Payment with respect to PlanPremier/(R)/ program.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Sales charges

CLASS A SHARES

CLASS A SHARE PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:

.. certain rollover investments from retirement plans to IRAs (see "Rollovers
from retirement plans to IRAs" in this prospectus for more information).

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

American Funds and employees of The Capital Group Companies, Inc. Please see the
statement of additional information for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS

Employer-sponsored retirement plans that are eligible to purchase Class R
shares may instead purchase Class A shares and pay the applicable Class A sales
charge, provided their recordkeepers can properly apply a sales charge on plan
investments. These plans are not eligible to make initial purchases of $1
million or more in Class A shares and thereby invest in Class A shares without
a sales charge, nor are they eligible to establish a statement of intention
that qualifies them to purchase Class A shares without a sales charge. More
information about statements of intention can be found under "Sales charge
reductions" in this prospectus. Plans investing in Class A shares with a sales
charge may purchase additional Class A shares in accordance with the sales
charge table in this prospectus.

A 403(b) plan may not invest in Class A or C shares, unless it was invested in
Class A or C shares before January 1, 2009.

CLASS R SHARES

Class R shares are sold without any initial or contingent deferred sales charge.
The distributor will pay dealers annually asset-based compensation of up to
1.00% for sales of Class R-1 shares, up to .75% for Class R-2 shares, up to .50%
for Class R-3 shares and up to .25% for Class R-4 shares. No dealer compensation
is paid from fund assets on sales of Class R-5 or R-6 shares. The fund may
reimburse the distributor for these payments through its plans of distribution
(see "Plans of distribution" in this prospectus).

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Sales charge reductions

IN ADDITION TO THE INFORMATION IN THIS PROSPECTUS, YOU MAY OBTAIN MORE
INFORMATION ABOUT SHARE CLASSES, SALES CHARGES AND SALES CHARGE REDUCTIONS
THROUGH A LINK ON THE HOME PAGE OF THE AMERICAN FUNDS WEBSITE AT
AMERICANFUNDS.COM, FROM THE STATEMENT OF ADDITIONAL INFORMATION OR FROM YOUR
FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE

Consistent with the policies described in this prospectus, two or more
retirement plans of an employer or employer's affiliates may combine all of
their American Funds investments to reduce their Class A sales charge. Certain
investments in the American Funds Target Date Retirement Series may also be
combined for this purpose. Please see the American Funds Target Date Retirement
Series prospectus for further information. However, for this purpose,
investments representing direct purchases of American Funds Money Market Fund
are excluded. Following are different ways that you may qualify for a reduced
Class A sales charge:

CONCURRENT PURCHASES

Simultaneous purchases of any class of shares of two or more American Funds
(excluding American Funds Money Market Fund) may be combined to qualify for a
reduced Class A sales charge.

RIGHTS OF ACCUMULATION

You may take into account your accumulated holdings in all share classes of the
American Funds (excluding American Funds Money Market Fund) to determine the
initial sales charge you pay on each purchase of Class A shares. Subject to
your investment dealer's or recordkeeper's capabilities, your accumulated
holdings will be calculated as the higher of (a) the current value of your
existing holdings or (b) the amount you invested (including reinvested
dividends and capital gains, but excluding capital appreciation) less any
withdrawals. Please see the statement of additional information for further
details. You should retain any records necessary to substantiate the historical
amounts you have invested.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

STATEMENT OF INTENTION

You may reduce your Class A sales charge by establishing a statement of
intention. A statement of intention allows you to combine all purchases of all
share classes of the American Funds (excluding American Funds Money Market
Fund) you intend to make over a 13-month period to determine the applicable
sales charge; however, purchases made under a right of reinvestment,
appreciation of your holdings, and reinvested dividends and capital gains do
not count as purchases made during the statement period. The market value of
your existing holdings eligible to be aggregated as of the day immediately
before the start of the statement period may be credited toward satisfying the
statement. A portion of your account may be held in escrow to cover additional
Class A sales charges that may be due if your total purchases over the
statement period do not qualify you for the applicable sales charge reduction.
Employer-sponsored retirement plans may be restricted from establishing
statements of intention. See "Sales charges" in this prospectus for more
information.

RIGHT OF REINVESTMENT

If you notify American Funds Service Company, you may reinvest proceeds from a
redemption, dividend payment or capital gain distribution without a sales charge
in the same fund or other American Funds, provided that the reinvestment occurs
within 90 days after the date of the redemption or distribution and is made into
the same account from which you redeemed the shares or received the
distribution. If the account has been closed, you may reinvest without a sales
charge if the new receiving account has the same registration as the closed
account. Proceeds will be reinvested in the same share class from which the
original redemption or distribution was made. Redemption proceeds of Class A
shares representing direct purchases in American Funds Money Market Fund that
are reinvested in other American Funds will be subject to a sales charge.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, C or F shares through
an IRA rollover, subject to the other provisions of this prospectus and the
prospectus for nonretirement plan shareholders. More information on Class C and
F shares can be found in the fund's prospectus for nonretirement plan
shareholders. Rollovers invested in Class A shares from retirement plans will be
subject to applicable sales charges. The following rollovers to Class A shares
will be made without a sales charge:

.. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
custodian; and

.. rollovers to IRAs that are attributable to American Funds investments, if they
meet the following requirements:

-- the assets being rolled over were invested in American Funds at the time of
distribution; and

-- the rolled over assets are contributed to an American Funds IRA with Capital
Bank and Trust Company as custodian.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Plans of distribution

The fund has plans of distribution or "12b-1 plans" for certain share classes,
under which it may finance activities primarily intended to sell shares,
provided that the categories of expenses are approved in advance by the fund's
board of trustees. The plans provide for payments, based on annualized
percentages of average daily net assets, of up to .30% for Class A shares, up to
1.00% for Class R-1 and R-2 shares, up to .75% for Class R-3 shares and up to
..50% for Class R-4 shares. For all share classes indicated above, up to .25% of
these expenses may be used to pay service fees to qualified dealers for
providing certain shareholder services. The amount remaining for each share
class may be used for distribution expenses.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Other compensation to dealers

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

The fund declares daily dividends from net investment income and distributes the
accrued dividends, which may fluctuate, to shareholders each month. Dividends
begin accruing one day after payment for shares is received by the fund or
American Funds Service Company.

Capital gains, if any, are usually distributed in December. When a capital gain
is distributed, the net asset value per share is reduced by the amount of the
payment.

All dividends and capital gain distributions paid to retirement plan
shareholders will be automatically reinvested.

TAXES ON TRANSACTIONS

Exchanges within a tax-deferred retirement plan account will not result in a
capital gain or loss for federal or state income tax purposes. With limited
exceptions, distributions from a retirement plan account are taxable as ordinary
income.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Financial highlights

INCOME FROM INVESTMENT OPERATIONS/1/
Net gains
(losses) on
securities
Net asset (both Dividends
value, Net realized Total from (from net Net asset
beginning investment and investment investment value, end of
of period income unrealized) operations income) period
- --------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 8/31/2009 $13.56 $.42 $ .57 $ .99 $(.44) $14.11
Year ended 8/31/2008 13.35 .54 .22 .76 (.55) 13.56
Year ended 8/31/2007 13.32 .59 .03 .62 (.59) 13.35
Year ended 8/31/2006 13.72 .52 (.39 ) .13 (.53) 13.32
Year ended 8/31/2005 13.74 .44 --/4/ .44 (.46) 13.72
- --------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 8/31/2009 13.56 .31 .57 .88 (.33) 14.11
Year ended 8/31/2008 13.35 .43 .22 .65 (.44) 13.56
Year ended 8/31/2007 13.32 .48 .03 .51 (.48) 13.35
Year ended 8/31/2006 13.72 .42 (.39 ) .03 (.43) 13.32
Year ended 8/31/2005 13.74 .33 --/4/ .33 (.35) 13.72
- --------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 8/31/2009 13.56 .31 .57 .88 (.33) 14.11
Year ended 8/31/2008 13.35 .44 .22 .66 (.45) 13.56
Year ended 8/31/2007 13.32 .49 .03 .52 (.49) 13.35
Year ended 8/31/2006 13.72 .43 (.39 ) .04 (.44) 13.32
Year ended 8/31/2005 13.74 .34 --/4/ .34 (.36) 13.72
- --------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 8/31/2009 $13.56 $.37 $ .57 $ .94 $(.39) $14.11
Year ended 8/31/2008 13.35 .49 .22 .71 (.50) 13.56
Year ended 8/31/2007 13.32 .54 .03 .57 (.54) 13.35
Year ended 8/31/2006 13.72 .48 (.39 ) .09 (.49) 13.32
Year ended 8/31/2005 13.74 .39 --/4/ .39 (.41) 13.72
- --------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 8/31/2009 13.56 .42 .57 .99 (.44) 14.11
Year ended 8/31/2008 13.35 .54 .22 .76 (.55) 13.56
Year ended 8/31/2007 13.32 .59 .03 .62 (.59) 13.35
Year ended 8/31/2006 13.72 .53 (.39 ) .14 (.54) 13.32
Year ended 8/31/2005 13.74 .44 --/4/ .44 (.46) 13.72
- --------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 8/31/2009 13.56 .46 .57 1.03 (.48) 14.11
Year ended 8/31/2008 13.35 .58 .22 .80 (.59) 13.56
Year ended 8/31/2007 13.32 .63 .03 .66 (.63) 13.35
Year ended 8/31/2006 13.72 .56 (.39 ) .17 (.57) 13.32
Year ended 8/31/2005 13.74 .48 --/4/ .48 (.50) 13.72
- --------------------------------------------------------------------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 8/31/2009/5/ 14.07 .15 .05 .20 (.16) 14.11

Ratio of Ratio of
expenses to expenses to
average net average net
Net assets, assets assets Ratio of net
end of before reim- after reim- income
Total period bursements/ bursements/ to average
return/2,3/ (in millions) waivers waivers/3/ net assets/3/
- ----------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 8/31/2009 7.43% $4,745 .64% .63% 3.05%
Year ended 8/31/2008 5.73 2,602 .77 .74 3.95
Year ended 8/31/2007 4.72 1,758 .79 .76 4.38
Year ended 8/31/2006 1.04 1,685 .77 .74 3.89
Year ended 8/31/2005 3.23 1,801 .76 .74 3.17
- ----------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 8/31/2009 6.57 14 1.45 1.45 2.24
Year ended 8/31/2008 4.89 9 1.56 1.53 3.16
Year ended 8/31/2007 3.89 5 1.65 1.57 3.57
Year ended 8/31/2006 .30 4 1.63 1.49 3.17
Year ended 8/31/2005 2.46 3 1.66 1.50 2.43
- ----------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 8/31/2009 6.58 204 1.49 1.44 2.26
Year ended 8/31/2008 4.97 136 1.61 1.46 3.24
Year ended 8/31/2007 3.98 103 1.73 1.48 3.66
Year ended 8/31/2006 .32 94 1.93 1.47 3.18
Year ended 8/31/2005 2.50 85 1.94 1.47 2.46
- ----------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 8/31/2009 7.02% $ 174 1.03% 1.02% 2.68%
Year ended 8/31/2008 5.40 118 1.07 1.04 3.67
Year ended 8/31/2007 4.39 88 1.11 1.08 4.05
Year ended 8/31/2006 .69 107 1.20 1.09 3.56
Year ended 8/31/2005 2.88 91 1.20 1.08 2.84
- ----------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 8/31/2009 7.39 159 .69 .68 3.02
Year ended 8/31/2008 5.77 91 .72 .69 4.02
Year ended 8/31/2007 4.79 75 .72 .69 4.50
Year ended 8/31/2006 1.06 21 .75 .72 3.96
Year ended 8/31/2005 3.25 13 .74 .72 3.21
- ----------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 8/31/2009 7.71 51 .38 .37 3.37
Year ended 8/31/2008 6.10 281 .41 .38 4.26
Year ended 8/31/2007 5.07 68 .45 .41 4.79
Year ended 8/31/2006 1.36 10 .45 .42 4.24
Year ended 8/31/2005 3.56 8 .43 .41 3.50
- ----------------------------------------------------------------------------------------------------------------
CLASS R-6:
Period from 5/1/2009 to 8/31/2009/5/ 1.41 404 .11 .11 1.10

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

YEAR ENDED AUGUST 31
2009 2008 2007 2006 2005
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 166% 92% 110% 146% 104%
OF SHARES

1 Based on average shares outstanding.
2 Total returns exclude any applicable sales charges.
3 This column reflects the impact, if any, of certain reimbursements/waivers
from Capital Research and Management Company. During some of the periods shown,
Capital Research and Management Company reduced fees for investment advisory
services. In addition, during some of the periods shown, Capital Research and
Management Company paid a portion of the fund's transfer agent fees for certain
retirement plan share classes.
4 Amount less than $.01.

5 Based on operations for the period shown and, accordingly, may not be
representative of a full year.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

NOTES

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

NOTES

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

[Logo - American Funds/(R)/] The right choice for the long term/(R)/

FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180

FOR RETIREMENT PLAN SERVICES Call your employer or plan
administrator

americanfunds.com
FOR 24-HOUR INFORMATION For Class R share information,
visit AmericanFundsRetirement.com

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

If you would like to opt out of household-based mailings or receive a
complimentary copy of the current SAI, codes of ethics or annual/semi-annual
report to shareholders, 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.

SECURITIES INVESTOR PROTECTION CORPORATION (SIPC) Shareholders may obtain
information about SIPC/(R)/ on its website at sipc.org or by calling
202/371-8300.

Investment Company File No. 811-04318
RPGEPR-922-1109P Litho in USA CGD/B/8034
- ----------------------------------------------------------------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust

THE FUND PROVIDES SPANISH TRANSLATION IN CONNECTION WITH THE
PUBLIC OFFERING AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR
AND ACCURATE ENGLISH TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS
FOR THE FUND.

/s/ KIMBERLY S. VERDICK
KIMBERLY S. VERDICK
SECRETARY

<PAGE>

[Logo - American Funds/(R)/] The right choice for the long term/(R)/

U.S. Government
Securities Fund/SM/

CLASS TICKER R-3......... RGVCX
A........... AMUSX R-4......... RGVEX
R-1......... RGVAX R-5......... RGVFX
R-2......... RGVBX R-6......... RGVGX

RETIREMENT PLAN
PROSPECTUS

November 1, 2009

TABLE OF CONTENTS

1 Investment objective
1 Fees and expenses of the fund
3 Principal investment strategies
3 Principal risks
4 Investment results
6 Management
6 Purchase and sale of fund shares
7 Tax information
7 Payments to broker-dealers and other financial
intermediaries
8 Investment objective, strategies and risks
10 Additional investment results
11 Management and organization
14 Purchase, exchange and sale of shares
18 Sales charges
20 Sales charge reductions
22 Rollovers from retirement plans to IRAs
23 Plans of distribution
24 Other compensation to dealers
25 Distributions and taxes
26 Financial highlights

<PAGE>

[This page intentionally left blank for this filing]

<PAGE>

The fund's investment objective is to provide a high level of current income
consistent with prudent investment risk and preservation of capital.

Fees and expenses of the fund

SHAREHOLDER FEES
(fees paid directly from your investment)
- ------------------------------------------------------------------------------
CLASS A ALL R SHARE CLASSES
------------------------------

ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment)
- ----------------------------------------------SHARE CLASSES--------------------

--A-----R-1----R-2----R-3----R-4----R-5------R-6---

---------------------------------------------------

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

SHARE CLASSES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------

* Based on estimated amounts for the current fiscal year.

PORTFOLIO TURNOVER

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Principal investment strategies

Principal risks

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

For example, as with other debt securities, the value of U.S. government
securities generally will decline when interest rates rise and increase when
interest rates fall. Longer

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

maturity securities generally have higher rates of interest but may be subject
to greater price fluctuations than shorter maturity securities.

It is important to note that neither your investment in the fund nor the fund's
yield is guaranteed by the U.S. government.

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.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 5 shows how the fund's average annual total
returns for various periods compare with different broad measures of market
performance. This information provides some indication of the risks of investing
in the fund. Past results are not predictive of future results. Updated
information on the fund's results can be obtained by visiting americanfunds.com.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Calendar year total returns for Class A shares
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999 -1.59%
2000 11.93
2001 6.41
2002 9.02
2003 1.91
2004 2.88
2005 2.27
2006 3.15
2007 6.67
2008 7.73
[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 5.34% (quarter ended December 31, 2008)
LOWEST -2.00% (quarter ended June 30, 2004)

The fund's total return for the nine months ended September 30, 2009, was 2.59%.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITH MAXIMUM SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -----------------------------------------------------------------------------

A 10/17/85 3.69% 3.73% 4.57% 6.57%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------

INDEXES/1/ 1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

Citigroup Treasury/Govt 10.54% 5.87% 6.12% 7.90%
Sponsored/Mortgage Index
Lipper General U.S. Government Funds 7.27 4.27 4.74 6.56
Average
Consumer Price Index 0.09 2.67 2.52 2.88
Class A 30-day annualized yield at August 31, 2009: 2.71%
(For current yield information, please call American FundsLine/(R)/ at
800/325-3590.)

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:

Purchase and sale of fund shares

Please contact your plan administrator or recordkeeper in order to sell (redeem)
shares from your retirement plan.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Tax information

Dividends and capital gains distributed by the fund to tax-deferred retirement
plan accounts are not currently taxable.

Payments to broker-dealers and other financial intermediaries

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Investment objective, strategies and risks

The fund's investment objective is to provide a high level of current income
consistent with prudent investment risk and preservation of capital.

It is important to note that neither your investment in the fund nor the fund's
yield is guaranteed by the U.S. government.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

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.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Additional investment results

Unlike the table on page 5, the table below reflects the fund's results
calculated without a sales charge.

AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITHOUT SALES CHARGE):

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS 10 YEARS LIFETIME
- -----------------------------------------------------------------------------

A 10/17/85 7.73% 4.52% 4.97% 6.74%

SHARE CLASS INCEPTION DATE 1 YEAR 5 YEARS LIFETIME
- -------------------------------------------------------------------

INDEXES/1/ 1 YEAR 5 YEARS 10 YEARS LIFETIME/2/
- -------------------------------------------------------------------------------

1 The Citigroup Treasury/Government Sponsored/Mortgage Index reflects the market
sectors in which the fund primarily invests. The Lipper General U.S. Government
Funds Average includes the fund and other mutual funds that disclose investment
objectives that are reasonably comparable to those of the fund. The Consumer
Price Index provides a comparison of the fund's results to inflation.
2 Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Management and organization

INVESTMENT ADVISER

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

EXECUTION OF PORTFOLIO TRANSACTIONS

PORTFOLIO HOLDINGS

A description of the fund's policies and procedures regarding disclosure of
information about its portfolio holdings is available in the statement of
additional information.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

ROLE IN
INVESTMENT EXPERIENCE MANAGEMENT
PORTFOLIO COUNSELOR EXPERIENCE IN THIS FUND OF THE FUND
- ------------------------------------------------------------------------------------

JOHN H. SMET Investment 23 years Serves as a
professional for 27 fixed-income portfolio
years in total; counselor
26 years with Capital
Research and
Management Company or
affiliate
- ------------------------------------------------------------------------------------
THOMAS H. HOGH Investment 13 years Serves as a
professional for 23 fixed-income portfolio
years in total; counselor
19 years with Capital
Research and
Management Company or
affiliate
- ------------------------------------------------------------------------------------
MARK R. MACDONALD Investment 3 years Serves as a
professional for 24 fixed-income portfolio
years in total; counselor
15 years with Capital
Research and
Management Company or
affiliate
affiliate
- ------------------------------------------------------------------------------------

Information regarding the portfolio counselors' compensation, their ownership of
securities in the fund and other accounts they manage is in the statement of
additional information.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Purchase, exchange and sale of shares

PURCHASES AND EXCHANGES

Class A shares are generally not available for retirement plans using the
PlanPremier or Recordkeeper Direct recordkeeping programs.

FREQUENT TRADING OF FUND SHARES

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

exchange activity that the fund or American Funds Distributors has determined
could involve actual or potential harm to the fund, may be rejected.

In addition to the fund's broad ability to restrict potentially harmful trading
as described above, the fund's board of trustees has adopted a "purchase
blocking policy" under which any shareholder redeeming shares having a value of
$5,000 or more from the fund will be precluded from investing in the fund for 30
calendar days after the redemption transaction. This policy also applies to
redemptions and purchases that are part of exchange transactions. Under the
fund's purchase blocking policy, certain purchases will not be prevented and
certain redemptions will not trigger a purchase block, such as systematic
redemptions and purchases, where the entity maintaining the shareholder account
is able to identify the transaction as a systematic redemption or purchase;
purchases and redemptions of shares having a value of less than $5,000;
transactions in Class 529 shares; purchases and redemptions resulting from
reallocations by American Funds Target Date Retirement Series; retirement plan
contributions, loans and distributions (including hardship withdrawals)
identified as such on the retirement plan recordkeeper's system; and purchase
transactions involving transfers of assets, rollovers, Roth IRA conversions and
IRA recharacterizations, where the entity maintaining the shareholder account is
able to identify the transaction as one of these types of transactions.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

the fund. You should refer to disclosures provided by the intermediaries with
which you have an account to determine the specific trading restrictions that
apply to you.

There is no guarantee that all instances of frequent trading in fund shares will
be prevented.

VALUING SHARES

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

FUND EXPENSES

PAYMENTS TO AFFILIATED ENTITIES PAYMENTS TO UNAFFILIATED
ENTITIES
- -------------------------------------------------------------------------------

1 Payment amount depends on the date upon which services commenced.
2 Payment with respect to Recordkeeper Direct/(R)/ program.
3 Payment with respect to PlanPremier/(R)/ program.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Sales charges

CLASS A SHARES

CLASS A SHARE PURCHASES NOT SUBJECT TO SALES CHARGES

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:

.. certain rollover investments from retirement plans to IRAs (see "Rollovers
from retirement plans to IRAs" in this prospectus for more information).

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

American Funds and employees of The Capital Group Companies, Inc. Please see the
statement of additional information for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS

Employer-sponsored retirement plans that are eligible to purchase Class R
shares may instead purchase Class A shares and pay the applicable Class A sales
charge, provided their recordkeepers can properly apply a sales charge on plan
investments. These plans are not eligible to make initial purchases of $1
million or more in Class A shares and thereby invest in Class A shares without
a sales charge, nor are they eligible to establish a statement of intention
that qualifies them to purchase Class A shares without a sales charge. More
information about statements of intention can be found under "Sales charge
reductions" in this prospectus. Plans investing in Class A shares with a sales
charge may purchase additional Class A shares in accordance with the sales
charge table in this prospectus.

A 403(b) plan may not invest in Class A or C shares, unless it was invested in
Class A or C shares before January 1, 2009.

CLASS R SHARES

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Sales charge reductions

REDUCING YOUR CLASS A INITIAL SALES CHARGE

CONCURRENT PURCHASES

Simultaneous purchases of any class of shares of two or more American Funds
(excluding American Funds Money Market Fund) may be combined to qualify for a
reduced Class A sales charge.

RIGHTS OF ACCUMULATION

You may take into account your accumulated holdings in all share classes of the
American Funds (excluding American Funds Money Market Fund) to determine the
initial sales charge you pay on each purchase of Class A shares. Subject to
your investment dealer's or recordkeeper's capabilities, your accumulated
holdings will be calculated as the higher of (a) the current value of your
existing holdings or (b) the amount you invested (including reinvested
dividends and capital gains, but excluding capital appreciation) less any
withdrawals. Please see the statement of additional information for further
details. You should retain any records necessary to substantiate the historical
amounts you have invested.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

STATEMENT OF INTENTION

RIGHT OF REINVESTMENT

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Rollovers from retirement plans to IRAs

.. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
custodian; and

.. rollovers to IRAs that are attributable to American Funds investments, if they
meet the following requirements:

-- the assets being rolled over were invested in American Funds at the time of
distribution; and

-- the rolled over assets are contributed to an American Funds IRA with Capital
Bank and Trust Company as custodian.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Plans of distribution

The fund has plans of distribution or "12b-1 plans" for certain share classes,
under which it may finance activities primarily intended to sell shares,
provided that the categories of expenses are approved in advance by the fund's
board of trustees. The plans provide for payments, based on annualized
percentages of average daily net assets, of up to .30% for Class A shares, up to
1.00% for Class R-1 and R-2 shares, up to .75% for Class R-3 shares and up to
..50% for Class R-4 shares. For all share classes indicated above, up to .25% of
these expenses may be used to pay service fees to qualified dealers for
providing certain shareholder services. The amount remaining for each share
class may be used for distribution expenses.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Other compensation to dealers

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

Capital gains, if any, are usually distributed in December. When a capital gain
is distributed, the net asset value per share is reduced by the amount of the
payment.

All dividends and capital gain distributions paid to retirement plan
shareholders will be automatically reinvested.

TAXES ON TRANSACTIONS

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

Financial highlights

INCOME FROM INVESTMENT OPERATIONS/1/
Net gains
(losses) on
securities
Net asset (both Dividends
value, Net realized Total from (from net Net asset
beginning investment and investment investment value, end of
of period income unrealized) operations income) period
- --------------------------------------------------------------------------------------------------------------------

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

YEAR ENDED AUGUST 31
2009 2008 2007 2006 2005
- ------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 166% 92% 110% 146% 104%
OF SHARES

5 Based on operations for the period shown and, accordingly, may not be
representative of a full year.

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

NOTES

U.S. Government Securities Fund / Retirement plan prospectus

<PAGE>

NOTES

U.S. Government Securities Fund / Retirement plan prospectus
<PAGE>

[Logo - American Funds/(R)/] The right choice for the long term/(R)/

FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180

FOR RETIREMENT PLAN SERVICES Call your employer or plan
administrator

americanfunds.com
FOR 24-HOUR INFORMATION For Class R share information,
visit AmericanFundsRetirement.com

SECURITIES INVESTOR PROTECTION CORPORATION (SIPC) Shareholders may obtain
information about SIPC/(R)/ on its website at sipc.org or by calling
202/371-8300.

<PAGE>

THE AMERICAN FUNDS INCOME SERIES
(U.S. GOVERNMENT SECURITIES FUND)

Part B
Statement of Additional Information

November 1, 2009

This document is not a prospectus but should be read in conjunction with the
current prospectus or retirement plan prospectus of U.S. Government Securities
Fund (the "fund" or "GVT") dated November 1, 2009. You may obtain a prospectus
from your financial adviser or by writing to the fund at the following address:

The American Funds Income Series
(U.S. Government Securities Fund)
Attention: Secretary
333 South Hope Street
Los Angeles, California 90071
213/486-9200

Certain privileges and/or services described below may not be available to all
shareholders (including shareholders who purchase shares at net asset value
through eligible retirement plans) depending on the shareholder's investment
dealer or retirement plan recordkeeper. Please see your financial adviser,
investment dealer, plan recordkeeper or employer for more information.

Class A AMUSX Class 529-A CGTAX Class R-1 RGVAX
Class B UGSBX Class 529-B CGTBX Class R-2 RGVBX
Class C UGSCX Class 529-C CGTCX Class R-3 RGVCX
Class F-1 UGSFX Class 529-E CGTEX Class R-4 RGVEX
Class F-2 GVTFX Class 529-F-1 CGTFX Class R-5 RGVFX
Class R-6 RGVGX

TABLE OF CONTENTS

Item Page no.
- ---- --------

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 3
Fund policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Management of the fund . . . . . . . . . . . . . . . . . . . . . . 11
Execution of portfolio transactions . . . . . . . . . . . . . . . . 33
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 36
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 39
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 43
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 51
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Shareholder account services and privileges . . . . . . . . . . . . 57
General information . . . . . . . . . . . . . . . . . . . . . . . . 60
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Investment portfolio
Financial statements

U.S. Government Securities Fund -- Page 1
<PAGE>

CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

The following limitations and guidelines are considered at the time of purchase,
under normal circumstances, 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.

.. The fund will invest at least 80% of its assets in securities guaranteed or
sponsored by the U.S. government.

.. The fund may invest up to 20% of its assets in non-government securities
rated AAA or Aaa by a nationally recognized statistical ratings
organization or unrated securities determined to be of equivalent quality
by the fund's investment adviser.

* * * * * *

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

U.S. Government Securities Fund -- Page 2
<PAGE>

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."

OBLIGATIONS BACKED BY THE "FULL FAITH AND CREDIT" OF THE U.S. GOVERNMENT -- U.S.
government obligations include the following types of securities:

U.S. TREASURY SECURITIES -- U.S. Treasury securities 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.

FEDERAL AGENCY SECURITIES -- The securities of certain U.S. government
agencies and government-sponsored entities are guaranteed as to the timely
payment of principal and interest by the full faith and credit of the U.S.
government. Such agencies and entities include the Government National
Mortgage Association (Ginnie Mae), the Veterans Administration (VA), the
Federal Housing Administration (FHA), the Export-Import Bank (Exim Bank),
the Overseas Private Investment Corporation (OPIC), the Commodity Credit
Corporation (CCC) and the Small Business Administration (SBA).

OTHER FEDERAL AGENCY OBLIGATIONS -- Additional federal agency securities are
neither direct obligations of, nor guaranteed by, the U.S. government. These
obligations include securities issued by certain U.S. government agencies and
government-sponsored entities. However, they generally involve some form of
federal sponsorship: some operate under a government charter; some are backed by
specific types of collateral; some are supported by the issuer's right to borrow
from the Treasury; and others are supported only by the credit of the issuing
government agency or entity. These agencies and entities include, but are not
limited to: Federal Home Loan Bank, Federal Home Loan Mortgage Corporation
(Freddie Mac), Federal National Mortgage Association (Fannie Mae), Tennessee
Valley Authority and Federal Farm Credit Bank System.

On September 7, 2008, Freddie Mac and Fannie Mae were placed into
conservatorship by their new regulator, the Federal Housing Finance Agency.
Simultaneously, the U.S. Treasury made a commitment of indefinite duration to
maintain the positive net worth of both firms.

These securities will be rated AAA by Standard & Poor's Corporation or Aaa by
Moody's Investors Service or unrated but determined to be of equivalent quality.

DEBT SECURITIES -- Debt securities are used by issuers to borrow money.
Generally, issuers pay investors periodic interest and repay the amount borrowed
either periodically during the life of the security and/or 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 and their values accrete over
time to face value at maturity. The market prices of debt securities fluctuate
depending on such factors as interest rates, credit quality and maturity. In
general, market prices of debt securities decline when interest rates rise and
increase when interest rates fall.

U.S. Government Securities Fund -- Page 3
<PAGE>

Certain additional risk factors relating to debt securities are discussed below:

SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES -- Debt securities may be
sensitive to economic changes, political and corporate developments, and
interest rate changes. In addition, during an economic downturn or
substantial period of rising interest rates, issuers that are highly
leveraged may experience increased financial stress that could adversely
affect their ability to meet projected business goals, to obtain additional
financing and to service their principal and interest payment obligations.
Periods of economic change and uncertainty also can be expected to result
in increased volatility of market prices and yields of certain debt
securities. For example, prices of these securities can be affected by
financial contracts held by the issuer or third parties (such as
derivatives) relating to the security or other assets or indices.

PAYMENT EXPECTATIONS -- Debt securities may contain redemption or call
provisions. If an issuer exercises these provisions in a lower interest
rate market, the fund would have to replace the security with a lower
yielding security, resulting in decreased income to investors. If the
issuer of a debt security defaults on its obligations to pay interest or
principal or is the subject of bankruptcy proceedings, the fund may incur
losses or expenses in seeking recovery of amounts owed to it.

LIQUIDITY AND VALUATION -- There may be little trading in the secondary
market for particular debt securities, which may affect adversely the
fund's ability to value accurately or dispose of such debt securities.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the value and/or liquidity of debt
securities.

Credit ratings for debt securities provided by rating agencies reflect an
evaluation of the safety of principal and interest payments, not market value
risk. The rating of an issuer is a rating agency's view of past and future
potential developments related to the issuer and may not necessarily reflect
actual outcomes. There can be a lag between the time of developments relating to
an issuer and the time a rating is assigned and updated.

Bond rating agencies may assign modifiers (such as +/-) to ratings categories to
signify the relative position of a credit within the rating category. Investment
policies that are based on ratings categories should be read to include any
security within that category, without giving consideration to the modifier
except where otherwise provided. See the Appendix for more information about
credit ratings.

PASS-THROUGH SECURITIES -- The fund may invest in various debt obligations
backed by pools of mortgages. Principal and interest payments made on the
underlying asset pools backing these obligations are typically passed through to
investors, net of any fees paid to any insurer or any guarantor of the
securities. Pass-through securities may have either fixed or adjustable coupons.
These securities include:

MORTGAGE-BACKED SECURITIES -- These securities may be issued by U.S.
government agencies and government-sponsored entities, such as Ginnie Mae,
Fannie Mae and Freddie Mac. The payment of interest and principal on
mortgage-backed obligations issued by U.S. government agencies may be
guaranteed by the full faith and credit of the U.S. government (in the case
of Ginnie Mae), or may be guaranteed by the issuer (in the

U.S. Government Securities Fund -- Page 4
<PAGE>

case of Fannie Mae and Freddie Mac). However, these guarantees do not apply
to the market prices and yields of these securities, which vary with
changes in interest rates.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) -- CMOs are also backed by a
pool of mortgages or mortgage loans, which are divided into two or more
separate bond issues. CMOs issued by U.S. government agencies are backed by
agency mortgages. Payments of principal and interest are passed through to
each bond issue at varying schedules resulting in bonds with different
coupons, effective maturities and sensitivities to interest rates. Some
CMOs may be structured in a way that when interest rates change, the impact
of changing prepayment rates on the effective maturities of certain issues
of these securities is magnified. CMOs may be less liquid or may exhibit
greater price volatility than other types of mortgage or asset-backed
securities.

COMMERCIAL MORTGAGE-BACKED SECURITIES -- These securities are backed by
mortgages on commercial property, such as hotels, office buildings, retail
stores, hospitals and other commercial buildings. These securities may have
a lower prepayment uncertainty than other mortgage-related securities
because commercial mortgage loans generally prohibit or impose penalties on
prepayments of principal. In addition, commercial mortgage-related
securities often are structured with some form of credit enhancement to
protect against potential losses on the underlying mortgage loans. Many of
the risks of investing in commercial mortgage-backed securities reflect the
risks of investing in the real estate securing the underlying mortgage
loans, including the effects of local and other economic conditions on real
estate markets, the ability of tenants to make rental payments and the
ability of a property to attract and retain tenants. Commercial
mortgage-backed securities may be less liquid or exhibit greater price
volatility than other types of mortgage or asset-backed securities.

ASSET-BACKED SECURITIES -- These securities are backed by other assets such
as credit card, automobile or consumer loan receivables, retail installment
loans or participations in pools of leases. Credit support for these
securities may be based on the underlying assets and/or provided through
credit enhancements by a third party. The values of these securities are
sensitive to changes in the credit quality of the underlying collateral,
the credit strength of the credit enhancement, changes in interest rates
and at times the financial condition of the issuer. Some asset-backed
securities also may receive prepayments that can change their effective
maturities.

INFLATION-INDEXED BONDS -- The fund may invest in inflation-indexed bonds issued
by governments, their agencies or instrumentalities and corporations. The fund
has no current intention of investing in inflation-index bonds issued by
corporations.

The principal amount of an inflation-indexed bond is adjusted in response to
changes in the level of the consumer price index. Repayment of the original bond
principal upon maturity (as adjusted for inflation) is guaranteed in the case of
U.S. Treasury inflation-indexed bonds, and therefore the principal amount of
such bonds cannot be reduced below par even during a period of deflation.
However, the current market value of these bonds is not guaranteed and will
fluctuate, reflecting the rise and fall of yields. In certain jurisdictions
outside the United States the repayment of the original bond principal upon the
maturity of an inflation-indexed bond is not guaranteed, allowing for the amount
of the bond repaid at maturity to be less than par.

U.S. Government Securities Fund -- Page 5
<PAGE>

The interest rate for inflation-indexed bonds is fixed at issuance as a
percentage of this adjustable principal. Accordingly, the actual interest income
may both rise and fall as the principal amount of the bonds adjusts in response
to movements of the consumer price index. For example, typically interest income
would rise during a period of inflation and fall during a period of deflation.

REPURCHASE AGREEMENTS -- The fund may enter into repurchase agreements under
which the fund buys a security and obtains a simultaneous commitment from the
seller to repurchase the security at a specified time and price. Repurchase
agreements permit the fund to maintain liquidity and earn income over periods of
time as short as overnight. The seller must maintain with the fund's custodian
collateral equal to at least 100% of the repurchase price, including accrued
interest, as monitored daily by the investment adviser. The fund will only enter
into repurchase agreements involving securities in which it could otherwise
invest and with selected banks and securities dealers whose financial condition
is monitored by the investment adviser. If the seller under the repurchase
agreement defaults, the fund may incur a loss if the value of the collateral
securing the repurchase agreement has declined and may incur disposition costs
in connection with liquidating the collateral. If bankruptcy proceedings are
commenced with respect to the seller, realization of the collateral by the fund
may be delayed or limited.

FORWARD COMMITMENT, WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The fund
may enter into commitments to purchase or sell securities at a future date. When
the fund agrees to purchase such securities, it assumes the risk of any decline
in value of the security from the date of the agreement. If the other party to
such a transaction fails to deliver or pay for the securities, the fund could
miss a favorable price or yield opportunity, or could experience a loss.

The fund will not use these transactions for the purpose of leveraging and will
segregate liquid assets that will be marked to market daily in an amount
sufficient to meet its payment obligations in these transactions. Although these
transactions will not be entered into for leveraging purposes, to the extent the
fund's aggregate commitments in connection with these transactions exceed its
segregated assets, the fund temporarily could be in a leveraged position
(because it may have an amount greater than its net assets subject to market
risk). Should market values of the fund's portfolio securities decline while the
fund is in a leveraged position, greater depreciation of its net assets would
likely occur than if it were not in such a position. The fund will not borrow
money to settle these transactions and, therefore, will liquidate other
portfolio securities in advance of settlement if necessary to generate
additional cash to meet its obligations. After a transaction is entered into,
the fund may still dispose of or renegotiate the transaction. Additionally,
prior to receiving delivery of securities as part of a transaction, the fund may
sell such securities.

The fund may also enter into reverse repurchase agreements and "roll"
transactions. A reverse repurchase agreement involves the sale of a security by
a fund and its agreement to repurchase the security at a specified time and
price. A "roll" transaction involves the sale of mortgage-backed or other
securities together with a commitment to purchase similar, but not identical,
securities at a later date. The fund assumes the risk of price and yield
fluctuations during the time of the commitment. The fund will segregate liquid
assets that will be marked to market daily in an amount sufficient to meet its
payment obligations under "roll" transactions and reverse repurchase agreements
with broker-dealers (no collateral is required for reverse repurchase agreements
with banks).

U.S. Government Securities Fund -- Page 6
<PAGE>

RESTRICTED OR ILLIQUID SECURITIES -- The fund may purchase securities subject to
restrictions on resale. Restricted securities may only be sold pursuant to an
exemption from registration under the Securities Act of 1933 (the "1933 Act"),
or in a registered public offering. Where registration is required, the holder
of a registered security may be obligated to pay all or part of the registration
expense and a considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under an
effective registration statement. Difficulty in selling such securities may
result in a loss to the fund or cause it to incur additional administrative
costs.

Securities (including restricted securities) not actively traded will be
considered illiquid unless they have been specifically determined to be liquid
under procedures adopted by the fund's board of trustees, taking into account
factors such as the frequency and volume of trading, the commitment of dealers
to make markets and the availability of qualified investors, all of which can
change from time to time. The fund may incur certain additional costs in
disposing of illiquid securities.

CASH AND CASH EQUIVALENTS -- The fund may hold cash or invest in cash
equivalents. Cash equivalents include (a) commercial paper (for example,
short-term notes with maturities typically up to 12 months in length issued by
corporations, governmental bodies or bank/corporation sponsored conduits
(asset-backed commercial paper)) (b) short-term bank obligations (for example,
certificates of deposit, bankers' acceptances (time drafts on a commercial bank
where the bank accepts an irrevocable obligation to pay at maturity)) or bank
notes, (c) savings association and savings bank obligations (for example, bank
notes and certificates of deposit issued by savings banks or savings
associations), (d) securities of the U.S. government, its agencies or
instrumentalities that mature, or may be redeemed, in one year or less, and (e)
corporate bonds and notes that mature, or that may be redeemed, in one year or
less. Investments in these securities are subject to the fund's ratings
guidelines.

VARIABLE AND FLOATING RATE OBLIGATIONS -- The interest rates payable on certain
securities in which the fund may invest may not be fixed but may fluctuate based
upon changes in market rates or credit ratings. Variable and floating rate
obligations bear coupon rates that are adjusted at designated intervals, based
on the then current market rates of interest or credit ratings. The rate
adjustment features tend to limit the extent to which the market value of the
obligations will fluctuate.

ADJUSTMENT OF MATURITIES -- The investment adviser seeks to anticipate movements
in interest rates and may adjust the maturity distribution of the portfolio
accordingly, keeping in mind the fund's objectives.

LOANS OF PORTFOLIO SECURITIES -- The fund is authorized to lend portfolio
securities to selected securities dealers or other institutional investors whose
financial condition is monitored by the investment adviser. The borrower must
maintain with the fund's custodian collateral consisting of cash, cash
equivalents or U.S. government securities equal to at least 100% of the value of
the borrowed securities, plus any accrued interest. The investment adviser will
monitor the adequacy of the collateral on a daily basis. The fund may at any
time call a loan of its portfolio securities and obtain the return of the loaned
securities. The fund will receive any interest paid on the loaned securities and
a fee or a portion of the interest earned on the collateral. The fund will limit
its loans of portfolio securities to an aggregate of 33-1/3% of the value of its
total assets, measured at the time any such loan is made.

U.S. Government Securities Fund -- Page 7
<PAGE>

The fund does not currently intend to engage in this investment practice over
the next 12 months.

* * * * * *

PORTFOLIO TURNOVER -- Portfolio changes will be made without regard to the
length of time particular investments may have been held. Short-term trading
profits are not the fund's objective, and changes in its investments are
generally accomplished gradually, though short-term transactions may
occasionally be made. High portfolio turnover involves correspondingly greater
transaction costs in the form of dealer spreads or brokerage commissions, and
may result in the realization of net capital gains, which may be taxable when
distributed to shareholders.

Fixed-income securities are generally traded on a net basis and usually neither
brokerage commissions nor transfer taxes are involved. Transaction costs are
usually reflected in the spread between the bid and asked price.

The fund's portfolio turnover rates for the fiscal years ended August 31, 2009
and 2008 were 166% and 92%, respectively. The portfolio turnover rate would
equal 100% if each security in a fund's portfolio were replaced once per year.
See "Financial highlights" in the prospectus for the fund's annual portfolio
turnover rate for each of the last five fiscal years.

U.S. Government Securities Fund -- Page 8
<PAGE>

FUND POLICIES

All percentage limitations in the following fund policies are considered at the
time securities are purchased and are based on the fund's net assets unless
otherwise indicated. None of the following policies 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.

FUNDAMENTAL POLICIES -- The fund has adopted the following fundamental policies,
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, as amended (the "1940 Act"), as the vote of the lesser of (a) 67% or more
of the voting securities present at a shareholder meeting, if the holders of
more than 50% of the outstanding voting securities are present in person or by
proxy, or (b) more than 50% of the outstanding voting securities.

These restrictions provided that the fund may not:

1. Purchase any security (other than securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities ("U.S. government
securities") if, immediately after and as a result of such investment, more than
5% of the value of the fund's total assets would be invested in securities of
the issuer;

2. Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to U.S. government securities;

3. Invest in companies for the purpose of exercising control or management;

4. Knowingly purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition, or reorganization;

5. Buy or sell real estate or commodities or commodity contracts in the
ordinary course of its business; however, the fund may purchase or sell readily
marketable debt securities secured by real estate or interests therein or issued
by companies which invest in real estate or interests therein, including real
estate investment trusts;

6. Acquire securities subject to restrictions on disposition imposed by the
Securities Act of 1933, if, immediately after and as a result of such
acquisition, the value of such restricted securities and all other illiquid
securities held by the fund would exceed 10% of the value of the fund's total
assets;

7. Engage in the business of underwriting securities of other issuers, except
to the extent that the disposal of an investment position may technically cause
it to be considered an underwriter as that term is defined under the Securities
Act of 1933;

8. Make loans, except that the fund may purchase readily marketable debt
securities and invest in repurchase agreements and make loans of portfolio
securities. The fund will not invest in repurchase agreements maturing in more
than seven days (unless subject to a demand feature) if any such investment,
together with any illiquid securities (including securities which are subject to
legal or contractual restrictions on resale) held by the fund, exceeds 10% of
the value of its total assets;

U.S. Government Securities Fund -- Page 9
<PAGE>

9. Sell securities short, except to the extent that the fund contemporaneously
owns or has the right to acquire at no additional cost securities identical to
those sold short;

10. Purchase securities on margin, except that the fund may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities;

11. Borrow money, except from banks for temporary or emergency purposes not in
excess of 5% of the value of the fund's total assets, except that the fund may
enter into reverse repurchase agreements, provided that the fund will limit its
aggregate borrowings to no more than one-third of its total assets;

12. Mortgage, pledge, or hypothecate any of its assets, provided that this
restriction shall not apply to the sale of securities pursuant to a reverse
repurchase agreement;

13. Purchase or retain the securities of any issuer, if those individual
officers and Trustees of the Trust, its investment adviser, or distributor, each
owning beneficially more than 1/2 of 1% of the securities of such issuer,
together own more than 5% of the securities of such issuer;

14. Invest in interests in oil, gas, or other mineral exploration or
development programs;

15. Invest more than 5% of its total assets in warrants which are unattached to
securities;

16. Write, purchase or sell puts, calls or combinations thereof.

Notwithstanding Investment Restriction #4, 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 the Trustees
pursuant to an exemptive order granted by the Securities and Exchange
Commission. For purposes of Investment Restriction #6, the fund will not invest
more than 15% of its net assets in illiquid securities.

NONFUNDAMENTAL POLICIES -- The fund has adopted the following nonfundamental
investment policies, which may be changed by action of the board of trustees
without shareholder approval:

1. The fund may not issue senior securities, except as permitted by the 1940
Act.

2. The fund may not acquire securities of open-end investment companies or
unit investment trusts registered under the 1940 Act in reliance on Sections
12(d)(1)(F) or 12(d)(1)(G) of the 1940 Act.

U.S. Government Securities Fund -- Page 10
<PAGE>

MANAGEMENT OF THE FUND

"INDEPENDENT" TRUSTEES/1/

NAME, AGE AND NUMBER OF
POSITION WITH FUND PORTFOLIOS/3/
(YEAR FIRST ELECTED AS A PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
TRUSTEE/2/) DURING PAST FIVE YEARS BY TRUSTEE BY TRUSTEE
- --------------------------------------------------------------------------------------------------------

Ambassador Richard G. Corporate director and 14 Carnival Corporation
Capen, Jr., 75 author; former U.S.
Trustee (1999) Ambassador to Spain; former
Vice Chairman,
Knight-Ridder, Inc.
(communications company);
former Chairman and
Publisher, The Miami Herald
- --------------------------------------------------------------------------------------------------------
H. Frederick Christie, Private investor; former 14 AECOM Technology
76 President and CEO, The Corporation;
Trustee (1985) Mission Group (non-utility DineEquity, Inc.;
holding company, subsidiary Ducommun Incorporated;
of Southern California SouthWest Water Company
Edison Company)
- --------------------------------------------------------------------------------------------------------
James G. Ellis, 62 Dean and Professor of 13 Quiksilver, Inc.
Trustee (2006) Marketing, Marshall School
of Business, University of
Southern California
- --------------------------------------------------------------------------------------------------------
Martin Fenton, 74 Chairman of the Board, 17 None
Chairman of the Board Senior Resource Group LLC
(Independent and Non- (development and management
Executive) (1989) of senior living
communities)
- --------------------------------------------------------------------------------------------------------
Leonard R. Fuller, 63 President and CEO, Fuller 15 None
Trustee (1994) Consulting (financial
management consulting firm)
- --------------------------------------------------------------------------------------------------------
R. Clark Hooper, 63 Private investor; former 17 JPMorgan Value Opportunities
Trustee (2005) President, Dumbarton Group Fund, Inc.;
LLC (securities industry The Swiss Helvetia Fund,
consulting); former Inc.
Executive Vice President -
Policy and Oversight, NASD
- --------------------------------------------------------------------------------------------------------
Richard G. Newman, 74 Chairman of the Board, AECOM 13 Sempra Energy;
Trustee (1991) Technology Corporation SouthWest Water Company
(engineering, consulting and
professional technical
services)
- --------------------------------------------------------------------------------------------------------
Frank M. Sanchez, 66 Principal, The Sanchez 12 None
Trustee (1999) Family Corporation dba
McDonald's Restaurants
(McDonald's licensee)
- --------------------------------------------------------------------------------------------------------
Steadman Upham, Ph.D., President and Professor of 14 None
60 Anthropology, The University
Trustee (2007) of Tulsa; former President
and Professor of
Archaeology, Claremont
Graduate University
- --------------------------------------------------------------------------------------------------------

U.S. Government Securities Fund -- Page 11
<PAGE>

"INTERESTED" TRUSTEES/6,7/

PRINCIPAL OCCUPATION(S)
DURING PAST FIVE YEARS
NAME, AGE AND AND POSITIONS HELD WITH NUMBER OF
POSITION WITH FUND AFFILIATED ENTITIES OR THE PORTFOLIOS/3/
(YEAR FIRST ELECTED AS A PRINCIPAL UNDERWRITER OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
TRUSTEE/OFFICER/2/) OF THE FUND BY TRUSTEE BY TRUSTEE
- --------------------------------------------------------------------------------------------------------

Abner D. Goldstine, 79 Senior Vice President - 11 None
Vice Chairman of the Board Fixed Income, Capital
(1985) Research and Management
Company; Director, Capital
Research and Management
Company
- --------------------------------------------------------------------------------------------------------
Paul G. Haaga, Jr., 60 Vice Chairman of the 13 None
Vice Chairman of the Board Board, Capital Research
(1985) and Management Company;
Senior Vice President -
Fixed Income, Capital
Research and Management
Company
- --------------------------------------------------------------------------------------------------------
John H. Smet, 53 Senior Vice President - 2 None
President (1993) Fixed Income, Capital
Research and Management
Company; Director,
American Funds
Distributors, Inc.*
- --------------------------------------------------------------------------------------------------------

U.S. Government Securities Fund -- Page 12
<PAGE>

OTHER OFFICERS/7/

NAME, AGE AND
POSITION WITH FUND PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
(YEAR FIRST ELECTED AS AND POSITIONS HELD WITH AFFILIATED ENTITIES
AN OFFICER/2/) OR THE PRINCIPAL UNDERWRITER OF THE FUND
- -------------------------------------------------------------------------------

Thomas H. Hogh, 46 Senior Vice President - Fixed Income, Capital Research
Vice President (2004) Company*
- -------------------------------------------------------------------------------
Kristine M. Vice President and Senior Counsel - Fund Business
Nishiyama, 39 Management Group, Capital Research and Management
Vice President (2003) Company; Vice President and Counsel, Capital Bank and
Trust Company*
- -------------------------------------------------------------------------------
Kimberly S. Verdick, Vice President - Fund Business Management Group,
45 Capital Research and Management Company
Secretary (1994)
- -------------------------------------------------------------------------------
Ari M. Vinocor, 34 Vice President - Fund Business Management Group,
Treasurer (2007) Capital Research and Management Company
- -------------------------------------------------------------------------------
Courtney R. Taylor, Assistant Vice President - Fund Business Management
34 Group, Capital Research and Management Company
Assistant Secretary
(2006)
- -------------------------------------------------------------------------------
M. Susan Gupton, 36 Vice President - Fund Business Management Group,
Assistant Treasurer Capital Research and Management Company
(2008)
- -------------------------------------------------------------------------------

* Company affiliated with Capital Research and Management Company.

1 Trustees and officers of the fund serve until their resignation, removal or
retirement.
2 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,(R)/ /Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.
3 This includes all directorships (other than those in the American Funds or
other funds managed by Capital Research and Management Company) that are held
by each trustee as a director of a public company or a registered investment
company.
4 The investment adviser and its affiliates use a subsidiary of AECOM, Inc. to
perform architectural and space management services. The investment adviser's
business relationship with the subsidiary preceded its acquisition by AECOM in
1994. The total fees relating to this engagement for the last two years
represent less than 0.1% of AECOM, Inc.'s 2008 gross revenues.

5 The term "independent" trustee refers to a trustee who is not an "interested
person" of the fund within the meaning of the 1940 Act, as amended.
6 "Interested persons" of the fund within the meaning of the 1940 Act, as
amended, on the basis of their affiliation with the fund's investment adviser,
Capital Research and Management Company, or affiliated entities (including the
fund's principal underwriter).
7 All of the officers listed 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.

THE ADDRESS FOR ALL TRUSTEES AND OFFICERS OF THE FUND IS 333 SOUTH HOPE STREET,
55TH FLOOR, LOS ANGELES, CALIFORNIA 90071, ATTENTION: SECRETARY.

U.S. Government Securities Fund -- Page 13
<PAGE>

FUND SHARES OWNED BY TRUSTEES AS OF DECEMBER 31, 2008:

AGGREGATE
DOLLAR
RANGE/1/ OF
INDEPENDENT
AGGREGATE TRUSTEES
DOLLAR RANGE/1/ DOLLAR DEFERRED
OF SHARES RANGE/1 /OF COMPENSATION/2/
OWNED IN INDEPENDENT ALLOCATED TO
ALL FUNDS TRUSTEES ALL FUNDS
IN THE DEFERRED WITHIN
DOLLAR RANGE/1/ AMERICAN FUNDS COMPENSATION/2/ AMERICAN FUNDS
OF FUND FAMILY OVERSEEN ALLOCATED FAMILY OVERSEEN
NAME SHARES OWNED BY TRUSTEE TO FUND BY TRUSTEE
- --------------------------------------------------------------------------------------------

"INDEPENDENT" TRUSTEES
- --------------------------------------------------------------------------------------------
Richard G. Capen, None Over $100,000 N/A Over $100,000
Jr.
- --------------------------------------------------------------------------------------------
H. Frederick None Over $100,000 N/A Over $100,000
Christie
- --------------------------------------------------------------------------------------------
James G. Ellis None Over $100,000 N/A N/A
- --------------------------------------------------------------------------------------------
Martin Fenton $10,001 - Over $100,000 N/A Over $100,000
$50,000
- --------------------------------------------------------------------------------------------
Leonard R. Fuller None $50,001 - N/A Over $100,000
$100,000
- --------------------------------------------------------------------------------------------
R. Clark Hooper None Over $100,000 N/A $50,001 -
$100,000
- --------------------------------------------------------------------------------------------
Richard G. Newman Over $100,000 Over $100,000 N/A N/A
- --------------------------------------------------------------------------------------------
Frank M. Sanchez $1 - $10,000 $10,001 - N/A N/A
$50,000
- --------------------------------------------------------------------------------------------
Steadman Upham None Over $100,000 N/A Over $100,000
- --------------------------------------------------------------------------------------------

U.S. Government Securities Fund -- Page 14
<PAGE>

AGGREGATE
DOLLAR RANGE/1/
OF SHARES
OWNED IN
ALL FUNDS
IN THE
DOLLAR RANGE/1/ AMERICAN FUNDS
OF FUND FAMILY OVERSEEN
NAME SHARES OWNED BY TRUSTEE
- -----------------------------------------------------------------------------

"INTERESTED" TRUSTEES
- -----------------------------------------------------------------------------
Abner D. Over $100,000 Over $100,000
Goldstine
- -----------------------------------------------------------------------------
Paul G. Haaga, $10,001 - $50,000 Over $100,000
Jr.
- -----------------------------------------------------------------------------
John H. Smet Over $100,000 Over $100,000
- -----------------------------------------------------------------------------

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; and Over $100,000. The amounts listed
for "interested" trustees include shares owned through The Capital Group
Companies, Inc. retirement plan and 401(k) plan.
2 Eligible trustees may defer their compensation under a nonqualified deferred
compensation plan. Deferred amounts accumulate at an earnings rate determined
by the total return of one or more American Funds as designated by the trustee.

TRUSTEE COMPENSATION -- No compensation is paid by the fund to any officer or
trustee who is a director, officer or employee of the investment adviser or its
affiliates. The boards of funds advised by the investment adviser typically meet
either individually or jointly with the boards of one or more other such funds
with substantially overlapping board membership (in each case referred to as a
"board cluster"). The fund typically pays each independent trustee an annual
fee, which ranges from $2,768 to $5,604, based primarily on the total number of
board clusters on which that independent trustee serves.

In addition, the fund generally pays independent trustees attendance and other
fees for meetings of the board and its committees. Board and committee chairs
receive additional fees for their services.

Independent trustees also receive attendance fees for certain special joint
meetings and information sessions with directors and trustees of other groupings
of funds advised by the investment adviser. The fund and the other funds served
by each independent trustee each pay an equal portion of these attendance fees.

No pension or retirement benefits are accrued as part of fund expenses.
Independent trustees 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 independent trustees.

U.S. Government Securities Fund -- Page 15
<PAGE>

TRUSTEE COMPENSATION EARNED DURING THE FISCAL YEAR ENDED AUGUST 31, 2009

TOTAL COMPENSATION (INCLUDING
VOLUNTARILY DEFERRED
COMPENSATION/1/)
AGGREGATE COMPENSATION FROM ALL FUNDS MANAGED BY
(INCLUDING VOLUNTARILY CAPITAL RESEARCH AND
DEFERRED COMPENSATION/1/) MANAGEMENT
NAME FROM THE FUND COMPANY OR ITS AFFILIATES/2/
- ------------------------------------------------------------------------------------------------------------------------------------

Richard G. Capen, Jr. $ 6,184 $248,564
- ------------------------------------------------------------------------------------------------------------------------------------
H. Frederick Christie/3/ 5,828 366,509
- ------------------------------------------------------------------------------------------------------------------------------------
James G. Ellis 7,881 221,988
- ------------------------------------------------------------------------------------------------------------------------------------
Martin Fenton/3/ 8,493 439,940
- ------------------------------------------------------------------------------------------------------------------------------------
Leonard R. Fuller/3/ 5,855 366,079
- ------------------------------------------------------------------------------------------------------------------------------------
R. Clark Hooper 5,904 397,938
- ------------------------------------------------------------------------------------------------------------------------------------
Richard G. Newman 8,261 316,510
- ------------------------------------------------------------------------------------------------------------------------------------
Frank M. Sanchez 10,276 157,683
- ------------------------------------------------------------------------------------------------------------------------------------
Steadman Upham/3/ 6,077 227,487
- ------------------------------------------------------------------------------------------------------------------------------------

1 Amounts may be deferred by eligible trustees under a nonqualified 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 American Funds
as designated by the trustees. Compensation shown in this table for the fiscal
year ended August 31, 2009 does not include earnings on amounts deferred in
previous fiscal years. See footnote 3 to this table for more information.
2 Funds managed by Capital Research and Management Company, including the
American Funds; American Funds Insurance Series,(R) which is composed of 16
funds and serves as the underlying investment vehicle for certain variable
insurance contracts; American Funds Target Date Retirement Series,/(R)/ Inc.,
which is composed of nine funds and is available through tax-deferred
retirement plans and IRAs; and Endowments, which is composed of two portfolios
and is available to certain nonprofit organizations.

3 Since the deferred compensation plan's adoption, the total amount of deferred
compensation accrued by the fund (plus earnings thereon) through the 2009
fiscal year for participating trustees is as follows: H. Frederick Christie
($17,487), Martin Fenton ($51,754), Leonard R. Fuller, ($35,494) and Steadman
Upham ($10,909). Amounts deferred and accumulated earnings thereon are not
funded and are general unsecured liabilities of the fund until paid to the
trustees.

As of October 1, 2009, the officers and trustees of the fund and their families,
as a group, owned beneficially or of record less than 1% of the outstanding
shares of the fund.

FUND ORGANIZATION AND THE BOARD OF TRUSTEES -- The fund, an open-end,
diversified management investment company, was organized as a Massachusetts
business trust on May 8, 1985. Although the board of trustees has delegated
day-to-day oversight to the investment adviser, all fund operations are
supervised by the fund's board, which meets periodically and performs duties
required by applicable state and federal laws.

Massachusetts common law provides that a trustee of a Massachusetts business
trust owes a fiduciary duty to the trust and must carry out his or her
responsibilities as a trustee in accordance with that fiduciary duty. Generally,
a trustee will satisfy his or her duties if he or she acts in good faith and
uses ordinary prudence.

U.S. Government Securities Fund -- Page 16
<PAGE>

Independent board members are paid certain fees for services rendered to the
fund as described above. They may elect to defer all or a portion of these fees
through a deferred compensation plan in effect for the fund.

The fund has several different classes of shares. Shares of each class represent
an interest in the same investment portfolio. Each class has pro rata 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 trustees and set forth in the fund's rule 18f-3 Plan. Each class'
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. Note that 529 college savings
plan account owners invested in Class 529 shares are not shareholders of the
fund and, accordingly, do not have the rights of a shareholder, such as the
right to vote proxies relating to fund shares. As the legal owner of the fund's
Class 529 shares, the Virginia College Savings Plan/SM/ will vote any proxies
relating to such fund shares.

The fund does not hold annual meetings of shareholders. However, significant
matters that 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.

The fund's declaration of trust and by-laws as well as separate indemnification
agreements that the fund has entered into with independent trustees provide in
effect that, subject to certain conditions, the fund will indemnify its officers
and trustees against liabilities or expenses actually and reasonably incurred by
them relating to their service to the fund. However, trustees are not protected
from liability by reason of their willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of their
office.

REMOVAL OF TRUSTEES BY SHAREHOLDERS -- At any meeting of shareholders, duly
called and at which a quorum is present, shareholders may, by the affirmative
vote of the holders of a majority of the votes entitled to be cast, remove any
trustee from office and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of removed trustees. The fund has
agreed, at the request of the staff of the Securities and Exchange Commission,
to apply the provisions of section 16(c) of the 1940 Act with respect to the
removal of trustees, as though the fund were a common-law trust. Accordingly,
the trustees of the fund will promptly call a meeting of shareholders for the
purpose of voting upon the removal of any trustees when requested in writing to
do so by the record holders of at least 10% of the outstanding shares.

COMMITTEES OF THE BOARD OF TRUSTEES -- The fund has an audit committee comprised
of James G. Ellis, Martin Fenton, Richard G. Newman and Frank M. Sanchez, none
of whom is an "interested person" of the fund within the meaning of the 1940
Act. The committee provides oversight regarding the fund's accounting and
financial reporting policies and practices, its internal controls and the
internal controls of the fund's principal service providers. The committee acts
as a liaison between the fund's independent registered public accounting firm
and the full board of trustees. Four audit committee meetings were held during
the 2009 fiscal year.

U.S. Government Securities Fund -- Page 17
<PAGE>

The fund has a contracts committee comprised of Richard G. Capen, Jr.; H.
Frederick Christie; James G. Ellis; Martin Fenton; Leonard R. Fuller; R. Clark
Hooper; Richard G. Newman; Frank M. Sanchez; and Steadman Upham, none of whom is
an "interested person" of the fund within the meaning of the 1940 Act. The
committee's principal function is to request, review and consider the
information deemed necessary to evaluate the terms of certain agreements between
the fund and its investment adviser or the investment adviser's affiliates, such
as the Investment Advisory and Service Agreement, Principal Underwriting
Agreement, Administrative Services Agreement and Plans of Distribution adopted
pursuant to rule 12b-1 under the 1940 Act, that the fund may enter into, renew
or continue, and to make its recommendations to the full board of trustees on
these matters. One contracts committee meeting was held during the 2009 fiscal
year.

The fund has a nominating and governance committee comprised of Richard G.
Capen, Jr.; H. Frederick Christie; James G. Ellis; Martin Fenton; Leonard R.
Fuller; R. Clark Hooper; Richard G. Newman; Frank M. Sanchez; and Steadman
Upham, none of whom is an "interested person" of the fund within the meaning of
the 1940 Act. The committee periodically reviews such issues as the board's
composition, responsibilities, committees, compensation and other relevant
issues, and recommends any appropriate changes to the full board of trustees.
The committee also evaluates, selects and nominates independent trustee
candidates to the full board of trustees. While the committee normally is able
to identify from its own and other resources an ample number of qualified
candidates, it will consider shareholder suggestions of persons to be considered
as nominees to fill future vacancies on the board. Such suggestions must be sent
in writing to the nominating and governance committee of the fund, addressed to
the fund's secretary, and must be accompanied by complete biographical and
occupational data on the prospective nominee, along with a written consent of
the prospective nominee for consideration of his or her name by the committee.
Four nominating and governance committee meetings were held during the 2009
fiscal year.

PROXY VOTING PROCEDURES AND PRINCIPLES -- The fund's investment adviser, in
consultation with the fund's board, has adopted Proxy Voting Procedures and
Principles (the "Principles") with respect to voting proxies of securities held
by the fund, other American Funds, Endowments and American Funds Insurance
Series. The complete text of these principles is available on the American Funds
website at americanfunds.com. Certain American Funds have established separate
proxy voting committees that vote proxies or delegate to a voting officer the
authority to vote on behalf of those funds. Proxies for all other funds
(including the fund) are voted by a committee of the appropriate equity
investment division of the investment adviser under authority delegated by those
funds' boards. Therefore, if more than one fund invests in the same company,
they may vote differently on the same proposal.

All U.S. proxies are voted. Proxies for companies outside the U.S. also are
voted, provided there is sufficient time and information available. After a
proxy statement is received, the investment adviser prepares a summary of the
proposals contained in the proxy statement. A discussion of any potential
conflicts of interest also is included in the summary. For proxies of securities
managed by a particular investment division of the investment adviser, the
initial voting recommendation is made by one or more of the division's
investment analysts familiar with the company and industry. A second
recommendation is made by a proxy coordinator (an investment analyst with
experience in corporate governance and proxy voting matters) within the
appropriate investment division, based on knowledge of these Principles and
familiarity with proxy-related issues. The proxy summary and voting
recommendations are made available to the appropriate proxy voting committee for
a final voting decision.

U.S. Government Securities Fund -- Page 18
<PAGE>

The analyst and proxy coordinator making voting recommendations are responsible
for noting any potential material conflicts of interest. One example might be
where a director of one or more American Funds is also a director of a company
whose proxy is being voted. In such instances, proxy voting committee members
are alerted to the potential conflict. The proxy voting committee may then elect
to vote the proxy or seek a third-party recommendation or vote of an ad hoc
group of committee members.

The Principles, which have been in effect in substantially their current form
for many years, provide an important framework for analysis and decision-making
by all funds. However, they are not exhaustive and do not address all potential
issues. The Principles provide a certain amount of flexibility so that all
relevant facts and circumstances can be considered in connection with every
vote. As a result, each proxy received is voted on a case-by-case basis
considering the specific circumstances of each proposal. The voting process
reflects the funds' understanding of the company's business, its management and
its relationship with shareholders over time.

Information regarding how the fund voted proxies relating to portfolio
securities during the 12-month period ended June 30 of each year will be
available on or about September 1 of each year (a) without charge, upon request
by calling American Funds Service Company at 800/421-0180, (b) on the American
Funds website and (c) on the SEC's website at sec.gov.

The following summary sets forth the general positions of the American Funds,
Endowments, American Funds Insurance Series and the investment adviser on
various proposals. A copy of the full Principles is available upon request, free
of charge, by calling American Funds Service Company or visiting the American
Funds website.

DIRECTOR MATTERS -- The election of a company's slate of nominees for
director generally is supported. Votes may be withheld for some or all of
the nominees if this is determined to be in the best interest of
shareholders. Separation of the chairman and CEO positions also may be
supported.

GOVERNANCE PROVISIONS -- Typically, proposals to declassify a board (elect
all directors annually) are supported based on the belief that this
increases the directors' sense of accountability to shareholders. Proposals
for cumulative voting generally are supported in order to promote
management and board accountability and an opportunity for leadership
change. Proposals designed to make director elections more meaningful,
either by requiring a majority vote or by requiring any director receiving
more withhold votes than affirmative votes to tender his or her
resignation, generally are supported.

SHAREHOLDER RIGHTS -- Proposals to repeal an existing poison pill generally
are supported. (There may be certain circumstances, however, when a proxy
voting committee of a fund or an investment division of the investment
adviser believes that a company needs to maintain anti-takeover
protection.) Proposals to eliminate the right of shareholders to act by
written consent or to take away a shareholder's right to call a special
meeting typically are not supported.

COMPENSATION AND BENEFIT PLANS -- Option plans are complicated, and many
factors are considered in evaluating a plan. Each plan is evaluated based
on protecting shareholder interests and a knowledge of the company and its
management. Considerations include the pricing (or repricing) of options
awarded under the plan and the impact of dilution on existing shareholders
from past and future equity awards. Compensation

U.S. Government Securities Fund -- Page 19
<PAGE>

packages should be structured to attract, motivate and retain existing
employees and qualified directors; however, they should not be excessive.

ROUTINE MATTERS -- The ratification of auditors, procedural matters
relating to the annual meeting and changes to company name are examples of
items considered routine. Such items generally are voted in favor of
management's recommendations unless circumstances indicate otherwise.

PRINCIPAL FUND SHAREHOLDERS -- The following table identifies those investors
who own of record or are known by the fund to own beneficially 5% or more of any
class of its shares as of the opening of business on October 1, 2009. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.

NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
- --------------------------------------------------------------------------------

Edward D. Jones & Co. Record Class A 15.54%
Omnibus Account Class B 8.95
Maryland Heights, MO
- --------------------------------------------------------------------------------
First Clearing, LLC Record Class A 6.21
Custody Account Class B 6.55
St. Louis, MO Class C 6.09
Class F-1 6.20
- --------------------------------------------------------------------------------
Merrill Lynch Record Class B 9.40
Omnibus Account Class C 20.13
Jacksonville, FL Class F-2 27.62
Class R-3 5.32
Class R-5 9.52
- --------------------------------------------------------------------------------
LPL Financial Record Class F-1 5.92
Omnibus Account
San Diego, CA
- --------------------------------------------------------------------------------
Capital Guardian Trust Company Record Class F-2 5.63
Personal Investment Management Account Beneficial
Irvine, CA
- --------------------------------------------------------------------------------
Trader Joe's Company Record Class R-4 26.49
Retirement Plan Beneficial
Englewood, CO
- --------------------------------------------------------------------------------
John Hancock Life Insurance Co. USA Record Class R-4 17.23
Omnibus Account
Boston, MA
- --------------------------------------------------------------------------------
The Capital Group Companies Record Class R-5 23.48
Retirement Plans Beneficial
Los Angeles, CA
- --------------------------------------------------------------------------------
Edward D. Jones & Co. Record Class R-5 11.09
Retirement Plan Beneficial
Norwood, MA
- --------------------------------------------------------------------------------
UBS Financial Services, Inc. Record Class R-5 8.53
Chicago, IL
- --------------------------------------------------------------------------------
American Funds 2020 Target Date Record Class R-6 23.41
Retirement Fund
Norfolk, VA
- --------------------------------------------------------------------------------
American Funds 2015 Target Date Record Class R-6 19.85
Retirement Fund
Norfolk, VA
- --------------------------------------------------------------------------------
American Funds 2025 Target Date Record Class R-6 17.06
Retirement Fund
Norfolk, VA
- --------------------------------------------------------------------------------
American Funds 2010 Target Date Record Class R-6 14.09
Retirement Fund
Norfolk, VA
- --------------------------------------------------------------------------------
American Funds 2030 Target Date Record Class R-6 9.27
Retirement Fund
Norfolk, VA
- --------------------------------------------------------------------------------
American Funds 2035 Target Date Record Class R-6 6.14
Retirement Fund
Norfolk, VA
- --------------------------------------------------------------------------------
American Funds 2040 Target Date Record Class R-6 5.01
Retirement Fund
Norfolk, VA
- --------------------------------------------------------------------------------

U.S. Government Securities Fund -- Page 20
<PAGE>

UNLESS OTHERWISE NOTED, REFERENCES IN THIS STATEMENT OF ADDITIONAL INFORMATION
TO CLASS F SHARES, CLASS R SHARES OR CLASS 529 SHARES REFER TO BOTH F SHARE
CLASSES, ALL R SHARE CLASSES OR ALL 529 SHARE CLASSES, RESPECTIVELY.

INVESTMENT ADVISER -- Capital Research and Management Company, the fund's
investment adviser, founded in 1931, maintains research facilities in the United
States and abroad (Los Angeles, San Francisco, New York, Washington, DC, London,
Geneva, Hong Kong, Singapore and Tokyo). These facilities are staffed with
experienced investment professionals. The investment adviser is located at 333
South Hope Street, Los Angeles, CA 90071 and 6455 Irvine Center Drive, Irvine,
CA 92618. It is a wholly owned subsidiary of The Capital Group Companies, Inc.,
a holding company for several investment management subsidiaries. Capital
Research and Management Company manages equity assets through two investment
divisions, Capital World Investors and Capital Research Global Investors, and
manages fixed-income assets through its Fixed Income division. Capital World
Investors and Capital Research Global Investors make investment decisions on an
independent basis.

The investment adviser has adopted policies and procedures that address issues
that may arise as a result of an investment professional's management of the
fund and other funds and accounts. Potential issues could involve allocation of
investment opportunities and trades among funds and accounts, use of information
regarding the timing of fund trades, investment professional compensation and
voting relating to portfolio securities. The investment adviser believes that
its policies and procedures are reasonably designed to address these issues.

U.S. Government Securities Fund -- Page 21
<PAGE>

COMPENSATION OF INVESTMENT PROFESSIONALS -- As described in the prospectus, the
investment adviser uses a system of multiple portfolio counselors in managing
fund assets. In addition, Capital Research and Management Company's investment
analysts may make investment decisions with respect to a portion of a fund's
portfolio within their research coverage.

Portfolio counselors and investment analysts are paid competitive salaries by
Capital Research and Management Company. In addition, they may receive bonuses
based on their individual portfolio results. Investment professionals also may
participate in profit-sharing plans. The relative mix of compensation
represented by bonuses, salary and profit-sharing plans will vary depending on
the individual's portfolio results, contributions to the organization and other
factors.

To encourage a long-term focus, bonuses based on investment results are
calculated by comparing pretax total investment returns to relevant benchmarks
over the most recent year, a four-year rolling average and an eight-year rolling
average with greater weight placed on the four-year and eight-year rolling
averages. For portfolio counselors, benchmarks may include measures of the
marketplaces in which the fund invests and measures of the results of comparable
mutual funds. For investment analysts, benchmarks may include relevant market
measures and appropriate industry or sector indexes reflecting their areas of
expertise. Capital Research and Management Company makes periodic subjective
assessments of analysts' contributions to the investment process and this is an
element of their overall compensation. The investment results of each of the
fund's portfolio counselors are measured against the following benchmark:
Citigroup Treasury/Government Sponsored/Mortgage Index and Lipper General U.S.
Government Funds Average.

PORTFOLIO COUNSELOR FUND HOLDINGS AND OTHER MANAGED ACCOUNTS -- As described
below, portfolio counselors may personally own shares of the fund. In addition,
portfolio counselors may manage portions of other mutual funds or accounts
advised by Capital Research and Management Company or its affiliates.

U.S. Government Securities Fund -- Page 22
<PAGE>

THE FOLLOWING TABLE REFLECTS INFORMATION AS OF AUGUST 31, 2009:

NUMBER NUMBER
OF OTHER OF OTHER NUMBER
REGISTERED POOLED OF OTHER
INVESTMENT INVESTMENT ACCOUNTS
COMPANIES (RICS) VEHICLES (PIVS) FOR WHICH
FOR WHICH FOR WHICH PORTFOLIO
PORTFOLIO PORTFOLIO COUNSELOR
DOLLAR RANGE COUNSELOR COUNSELOR IS A MANAGER
OF FUND IS A MANAGER IS A MANAGER (ASSETS OF
PORTFOLIO SHARES (ASSETS OF RICS (ASSETS OF PIVS OTHER ACCOUNTS
COUNSELOR OWNED/1/ IN BILLIONS)/2/ IN BILLIONS)/3/ IN BILLIONS)/4/
- ------------------------------------------------------------------------------------------

John H. Smet $100,001 - 7 $249.8 None None
$500,000
- ------------------------------------------------------------------------------------------
Thomas H. Hogh None/5/ 3 $107.8 1 $0.15 3 $0.26
- ------------------------------------------------------------------------------------------
Mark R. $100,001 - 4 $209.5 None None
Macdonald $500,000
- ------------------------------------------------------------------------------------------

1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
$10,001 - $50,000; $50,001 - $100,000; $100,001 - $500,000; $500,001 -
$1,000,000; and Over $1,000,000. The amounts listed include shares owned
through The Capital Group Companies, Inc. retirement plan and 401(k) plan.
2 Indicates fund(s) where the portfolio counselor also has significant
responsibilities for the day to day management of the fund(s). Assets noted are
the total net assets of the registered investment companies and are not the
total assets managed by the individual, which is a substantially lower amount.
No fund has an advisory fee that is based on the performance of the fund.
3 Represents funds advised or sub-advised by Capital Research and Management
Company and sold outside the United States and/ or fixed-income assets in
institutional accounts managed by investment adviser subsidiaries of Capital
Group International, Inc., an affiliate of Capital Research and Management
Company. Assets noted are the total net assets of the funds or accounts and are
not the total assets managed by the individual, which is a substantially lower
amount. No fund or account has an advisory fee that is based on the performance
of the fund or account.
4 Reflects other professionally managed accounts held at companies affiliated
with Capital Research and Management Company. Personal brokerage accounts of
portfolio counselors and their families are not reflected.
5 Portfolio counselor resides outside the United States. As such, tax
considerations may adversely influence his or her ability to own shares of the
fund.

U.S. Government Securities Fund -- Page 23
<PAGE>

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 May 31, 2010, 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 (a) the board of trustees, or by the
vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the fund, and (b) the vote of a majority of trustees 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).

In addition to providing investment advisory services, the investment adviser
furnishes the services and pays the compensation and travel expenses of persons
to perform the fund's executive, administrative, clerical and bookkeeping
functions, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies and postage used at
the fund's offices. 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
expenses; 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 fund shares (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 independent trustees; association dues;
costs of stationery and forms prepared exclusively for the fund; and costs of
assembling and storing shareholder account data.

The management fee is based upon the daily net assets of the fund and monthly
gross investment income. Gross investment income is determined in accordance
with generally accepted accounting principles and does not include gains or
losses from sales of capital assets.

The management fee is based on the following annualized rates and daily net
asset levels:

Net asset level

RATE IN EXCESS OF UP TO
- ------------------------------------------------------------------------------

0.30% $ 0 $ 60,000,000
- ------------------------------------------------------------------------------
0.21 60,000,000 1,000,000,000
- ------------------------------------------------------------------------------
0.18 1,000,000,000 3,000,000,000
- ------------------------------------------------------------------------------
0.15 3,000,000,000
- ------------------------------------------------------------------------------

The Agreement also provides for fees based on monthly gross investment income at
the following annualized rates:

U.S. Government Securities Fund -- Page 24
<PAGE>

Monthly gross investment income

RATE IN EXCESS OF UP TO
- -----------------------------------------------------------------------------------

3.00% $ 0 $3,333,333
- -----------------------------------------------------------------------------------
2.25 3,333,333 8,333,333
- -----------------------------------------------------------------------------------
2.00 8,333,333
- -----------------------------------------------------------------------------------

The investment adviser has agreed that in the event the Class A expenses of the
fund (with the exclusion of interest, taxes, brokerage costs, distribution
expenses pursuant to a plan under rule 12b-1 and extraordinary expenses such as
litigation and acquisitions or other expenses excludable under applicable state
securities laws or regulations) for any fiscal year ending on a date on which
the Agreement is in effect exceed the expense limitations, if any, applicable to
the fund pursuant to state securities laws or any related regulations, it will
reduce its fee by the extent of such excess and, if required pursuant to any
such laws or any regulations thereunder, will reimburse the fund in the amount
of such excess. To the extent the fund's management fee must be waived due to
Class A share expense ratios exceeding the above 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 August 31, 2009, 2008 and 2007, the investment
adviser was entitled to receive from the fund management fees of $18,125,000,
$9,781,000 and $7,659,000, respectively. After giving effect to the management
fee waivers/expense reimbursements described below, the fund paid the investment
adviser management fees of $17,597,000 (a reduction of $528,000), $8,803,000 (a
reduction of $978,000) and $6,893,000 (a reduction of $766,000) for the fiscal
years ended August 31, 2009, 2008 and 2007, respectively.

For the period from September 1, 2004 through March 31, 2005, the investment
adviser agreed to waive 5% of the management fees that it was otherwise entitled
to receive under the Agreement. From April 1, 2005 through December 31, 2008,
this waiver increased to 10% of the management fees that the investment adviser
was otherwise entitled to receive. The waiver was discontinued effective January
1, 2009.

ADMINISTRATIVE SERVICES AGREEMENT -- The Administrative Services Agreement (the
"Administrative Agreement") between the fund and the investment adviser relating
to the fund's Class C, F, R and 529 shares will continue in effect until May 31,
2010, 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 trustees 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 fund may terminate the Administrative Agreement at any time by vote of a
majority of independent trustees. 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, and Class R and 529 shares. The investment adviser may contract
with third parties, including American Funds

U.S. Government Securities Fund -- Page 25
<PAGE>

Service Company,/(R)/ the fund's Transfer Agent, to provide some of these
services. Services include, but are not limited to, shareholder account
maintenance, transaction processing, tax information reporting and shareholder
and fund communications. In addition, the investment adviser monitors,
coordinates, oversees and assists with the activities performed by third parties
providing such services. For Class R-2 shares, the investment adviser has agreed
to pay a portion of the fees payable under the Administrative Agreement that
would otherwise have been paid by the fund. For the year ended August 31, 2009,
the total fees paid by the investment adviser were $78,000.

The investment adviser receives an administrative services fee at the annual
rate of up to 0.15% of the average daily net assets for Class C, F, R (excluding
Class R-5 and R-6 shares) and 529 shares for administrative services provided to
these share classes. Administrative services fees are paid monthly and accrued
daily. The investment adviser uses a portion of this fee to compensate third
parties for administrative services provided to the fund. Of the remainder, the
investment adviser does not retain more than 0.05% of the average daily net
assets for each applicable share class. For Class R-5 and R-6 shares, the
administrative services fee is calculated at the annual rate of up to 0.10% and
0.05%, respectively, of the average daily net assets of such class. The
administrative services fee includes compensation for transfer agent and
shareholder services provided to the fund's Class C, F, R and 529 shares. In
addition to making administrative service fee payments to unaffiliated third
parties, the investment adviser also makes payments from the administrative
services fee to American Funds Service Company according to a fee schedule,
based principally on the number of accounts serviced, contained in a Shareholder
Services Agreement between the fund and American Funds Service Company. A
portion of the fees paid to American Funds Service Company for transfer agent
services is also paid directly from the relevant share class.

During the 2009 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:

ADMINISTRATIVE SERVICES FEE
- --------------------------------------------------------------------------------

CLASS C $968,000
- --------------------------------------------------------------------------------
CLASS F-1 294,000
- --------------------------------------------------------------------------------
CLASS F-2 29,000
- --------------------------------------------------------------------------------
CLASS 529-A 140,000
- --------------------------------------------------------------------------------
CLASS 529-B 30,000
- --------------------------------------------------------------------------------
CLASS 529-C 77,000
- --------------------------------------------------------------------------------
CLASS 529-E 8,000
- --------------------------------------------------------------------------------
CLASS 529-F-1 8,000
- --------------------------------------------------------------------------------
CLASS R-1 24,000
- --------------------------------------------------------------------------------
CLASS R-2 840,000
- --------------------------------------------------------------------------------
CLASS R-3 401,000
- --------------------------------------------------------------------------------
CLASS R-4 197,000
- --------------------------------------------------------------------------------
CLASS R-5 244,000
- --------------------------------------------------------------------------------
CLASS R-6 57,000
- --------------------------------------------------------------------------------

U.S. Government Securities Fund -- Page 26
<PAGE>

PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds
Distributors,/(R)/ 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; 6455 Irvine Center Drive, Irvine, CA
92618; 3500 Wiseman Boulevard, San Antonio, TX 78251; 8332 Woodfield Crossing
Boulevard, Indianapolis, IN 46240; and 5300 Robin Hood Road, Norfolk, VA 23513.

The Principal Underwriter receives revenues relating to sales of the fund's
shares, as follows:

. For Class A and 529-A shares, the Principal Underwriter receives
commission revenue consisting of the balance of the Class A and 529-A
sales charge remaining after the allowances by the Principal
Underwriter to investment dealers.

. For Class B and 529-B shares sold prior to April 21, 2009, the
Principal Underwriter sold its rights to the 0.75%
distribution-related portion of the 12b-1 fees paid by the fund, as
well as any contingent deferred sales charges, to a third party. The
Principal Underwriter compensated investment dealers for sales of
Class B and 529-B shares out of the proceeds of this sale and kept any
amounts remaining after this compensation was paid.

. For Class C and 529-C shares, the Principal Underwriter receives any
contingent deferred sales charges that apply during the first year
after purchase.

In addition, the fund reimburses the Principal Underwriter for advancing
immediate service fees to qualified dealers and advisers upon the sale of Class
C and 529-C shares. The fund also reimbursed the Principal Underwriter for
advancing immediate service fees to qualified dealers on sales of Class B and
529-B shares prior to April 21, 2009. The fund also reimburses the Principal
Underwriter for service fees (and, in the case of Class 529-E shares,
commissions) paid on a quarterly basis to qualified dealers and advisers in
connection with investments in Class F-1, 529-F-1, 529-E, R-1, R-2, R-3 and R-4
shares.

U.S. Government Securities Fund -- Page 27
<PAGE>

Commissions, revenue or service fees retained by the Principal Underwriter after
allowances or compensation to dealers were:

COMMISSIONS, ALLOWANCE OR
REVENUE COMPENSATION
FISCAL YEAR/PERIOD OR FEES RETAINED TO DEALERS
- -----------------------------------------------------------------------------------------------------

CLASS A 2009 $4,326,000 $16,437,000
2008 1,717,000 6,572,000
2007 767,000 2,997,000
- -----------------------------------------------------------------------------------------------------
CLASS B 2009 136,000 1,528,000
2008 67,000 574,000
2007 40,000 886,000
- -----------------------------------------------------------------------------------------------------
CLASS C 2009 0 2,577,000
2008 0 751,000
2007 0 292,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-A 2009 184,000 678,000
2008 65,000 250,000
2007 39,000 148,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-B 2009 8,000 62,000
2008 4,000 34,000
2007 4,000 28,000
- -----------------------------------------------------------------------------------------------------
CLASS 529-C 2009 0 259,000
2008 0 106,000
2007 0 55,000
- -----------------------------------------------------------------------------------------------------

Plans of distribution -- The fund has adopted plans of distribution (the
"Plans") pursuant to rule 12b-1 under the 1940 Act. The Plans permit the fund to
expend amounts to finance any activity primarily intended to result in the sale
of fund shares, provided the fund's board of trustees has approved the category
of expenses for which payment is being made.

U.S. Government Securities Fund -- Page 28
<PAGE>

Each Plan is specific to a particular share class of the fund. As the fund has
not adopted a Plan for Class F-2, Class R-5 or Class R-6, no 12b-1 fees are paid
from Class F-2, Class R-5 or Class R-6 share assets and the following disclosure
is not applicable to these share classes.

Payments under the Plans may be made for service-related and/or
distribution-related expenses. Service-related expenses include paying service
fees to qualified dealers. Distribution-related expenses include commissions
paid to qualified dealers. The amounts actually paid under the Plans for the
past fiscal year, expressed as a percentage of the fund's average daily net
assets attributable to the applicable share class, are disclosed in the
prospectus under "Fees and expenses of the fund." Further information regarding
the amounts available under each Plan is in the "Plans of Distribution" section
of the prospectus.

Following is a brief description of the Plans:

CLASS A AND 529-A -- For Class A and 529-A shares, up to 0.25% of the
fund's average daily net assets attributable to such shares is reimbursed
to the Principal Underwriter for paying service-related expenses, and the
balance available under the applicable Plan may be paid to the Principal
Underwriter for distribution-related expenses. The fund may annually expend
up to 0.30% for Class A shares and up to 0.50% for Class 529-A shares under
the applicable Plan.

Distribution-related expenses for Class A and 529-A shares include dealer
commissions and wholesaler compensation paid on sales of shares of $1
million or more purchased without a sales charge. Commissions on these "no
load" purchases (which are described in further detail under the "Sales
Charges" section of this statement of additional information) in excess of
the Class A and 529-A Plan limitations and not reimbursed to the Principal
Underwriter during the most recent fiscal quarter are recoverable for five
quarters, provided that the reimbursement of such commissions does not
cause the fund to exceed the annual expense limit. After five quarters,
these commissions are not recoverable.

CLASS B AND 529-B -- The Plans for Class B and 529-B shares provide for
payments to the Principal Underwriter of up to 0.25% of the fund's average
daily net assets attributable to such shares for paying service-related
expenses and 0.75% for distribution-related expenses, which include the
financing of commissions paid to qualified dealers.

OTHER SHARE CLASSES (CLASS C, 529-C, F-1, 529-F-1, 529-E, R-1, R-2, R-3 AND
R-4) -- The Plans for each of the other share classes that have adopted
Plans provide for payments to the Principal Underwriter for paying
service-related and distribution-related expenses of up to the following
amounts of the fund's average daily net assets attributable to such shares:

U.S. Government Securities Fund -- Page 29
<PAGE>

TOTAL
SERVICE DISTRIBUTION ALLOWABLE
RELATED RELATED UNDER
SHARE CLASS PAYMENTS/1/ PAYMENTS/1/ THE PLANS/2/
- ----------------------------------------------------------------------------------

Class C 0.25% 0.75% 1.00%
- ----------------------------------------------------------------------------------
Class 529-C 0.25 0.75 1.00
- ----------------------------------------------------------------------------------
Class F-1 0.25 -- 0.50
- ----------------------------------------------------------------------------------
Class 529-F-1 0.25 -- 0.50
- ----------------------------------------------------------------------------------
Class 529-E 0.25 0.25 0.75
- ----------------------------------------------------------------------------------
Class R-1 0.25 0.75 1.00
- ----------------------------------------------------------------------------------
Class R-2 0.25 0.50 1.00
- ----------------------------------------------------------------------------------
Class R-3 0.25 0.25 0.75
- ----------------------------------------------------------------------------------
Class R-4 0.25 -- 0.50
- ----------------------------------------------------------------------------------

1 Amounts in these columns represent the amounts approved by the board of
trustees under the applicable Plan.
2 The fund may annually expend the amounts set forth in this column under
the current Plans with the approval of the board of trustees.

During the 2009 fiscal year, 12b-1 expenses accrued and paid, and if applicable,
unpaid, were:

12B-1 UNPAID LIABILITY
12B-1 EXPENSES OUTSTANDING
- ------------------------------------------------------------------------------

CLASS A $12,049,000 $2,075,000
- ------------------------------------------------------------------------------
CLASS B 3,676,000 423,000
- ------------------------------------------------------------------------------
CLASS C 6,542,000 1,235,000
- ------------------------------------------------------------------------------
CLASS F-1 586,000 120,000
- ------------------------------------------------------------------------------
CLASS 529-A 257,000 65,000
- ------------------------------------------------------------------------------
CLASS 529-B 237,000 32,000
- ------------------------------------------------------------------------------
CLASS 529-C 664,000 153,000
- ------------------------------------------------------------------------------
CLASS 529-E 38,000 11,000
- ------------------------------------------------------------------------------
CLASS 529-F-1 -- --
- ------------------------------------------------------------------------------
CLASS R-1 142,000 34,000
- ------------------------------------------------------------------------------
CLASS R-2 1,369,000 346,000
- ------------------------------------------------------------------------------
CLASS R-3 810,000 195,000
- ------------------------------------------------------------------------------
CLASS R-4 318,000 94,000
- ------------------------------------------------------------------------------

Approval of the Plans -- 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 trustees and separately by a majority of the independent trustees
of the fund who have no direct or indirect

U.S. Government Securities Fund -- Page 30
<PAGE>

financial interest in the operation of the Plans or the Principal Underwriting
Agreement. In addition, the selection and nomination of independent trustees of
the fund are committed to the discretion of the independent trustees during the
existence of the Plans.

Potential benefits of the Plans to the fund include quality shareholder
services, savings to the fund in transfer agency costs, and benefits to the
investment process from growth or stability of assets. The Plans may not be
amended to materially increase the amount spent for distribution without
shareholder approval. Plan expenses are reviewed quarterly by the board of
trustees and the Plans must be renewed annually by the board of trustees.

FEE TO VIRGINIA COLLEGE SAVINGS PLAN -- With respect to Class 529 shares, as
compensation for its oversight and administration, Virginia College Savings Plan
receives a quarterly fee accrued daily and calculated at the annual rate of
0.10% on the first $30 billion of the net assets invested in Class 529 shares of
the American Funds, 0.09% on net assets between $30 billion and $60 billion,
0.08% on net assets between $60 billion and $90 billion, 0.07% on net assets
between $90 billion and $120 billion, and 0.06% on net assets between $120
billion and $150 billion. The fee for any given calendar quarter is accrued and
calculated on the basis of average net assets of Class 529 shares of the
American Funds for the last month of the prior calendar quarter.

OTHER COMPENSATION TO DEALERS -- As of July 2009, the top dealers (or their
affiliates) that American Funds Distributors anticipates will receive additional
compensation (as described in the prospectus) include:

AIG Advisors Group
Advantage Capital Corporation
American General Securities Incorporated
FSC Securities Corporation
Royal Alliance Associates, Inc.
SagePoint Financial, Inc.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc
Cambridge Investment Research, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Edward Jones
Genworth Financial Securities Corporation
Hefren-Tillotson, Inc.
HTK / Janney Montgomery Group
Hornor, Townsend & Kent, Inc.
Janney Montgomery Scott LLC
ING Advisors Network Inc.
Bancnorth Investment Group, Inc.
Financial Network Investment Corporation
Guaranty Brokerage Services, Inc.
ING Financial Partners, Inc.
Multi-Financial Securities Corporation
Primevest Financial Services, Inc.
Intersecurities / Transamerica
InterSecurities, Inc.
Transamerica Financial Advisors, Inc.
J. J. B. Hilliard, W. L. Lyons, LLC

U.S. Government Securities Fund -- Page 31
<PAGE>

JJB Hilliard/PNC Bank
PNC Bank, National Association
PNC Investments LLC
Lincoln Financial Advisors Corporation
Lincoln Financial Securities Corporation
LPL Group
Associated Securities Corp.
LPL Financial Corporation
Mutual Service Corporation
Uvest Investment Services
Waterstone Financial Group, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Metlife Enterprises
Metlife Securities Inc.
New England Securities
Tower Square Securities, Inc.
Walnut Street Securities, Inc.
MML Investors Services, Inc.
Morgan Keegan & Company, Inc.
Morgan Stanley Smith Barney LLC
National Planning Holdings Inc.
Invest Financial Corporation
Investment Centers of America, Inc.
National Planning Corporation
SII Investments, Inc.
NFP Securities, Inc.
Northwestern Mutual Investment Services, LLC
Park Avenue Securities LLC
PFS Investments Inc.
Raymond James Group
Raymond James & Associates, Inc.
Raymond James Financial Services Inc.
RBC Capital Markets Corporation
Robert W. Baird & Co. Incorporated
Securian / C.R.I.
CRI Securities, LLC
Securian Financial Services, Inc.
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
Wells Fargo Network
A. G. Edwards, A Division Of Wells Fargo Advisors, LLC
First Clearing LLC
H.D. Vest Investment Securities, Inc.
Wells Fargo Advisors Financial Network, LLC
Wells Fargo Advisors Investment Services Group
Wells Fargo Advisors Latin American Channel
Wells Fargo Advisors Private Client Group
Wells Fargo Investments, LLC

U.S. Government Securities Fund -- Page 32
<PAGE>

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the fund's
portfolio transactions. Purchases and sales of equity securities on a securities
exchange or an over-the-counter market are effected through broker-dealers who
receive commissions for their services. Generally, commissions relating to
securities traded on foreign exchanges will be higher than commissions relating
to securities traded on U.S. exchanges and may not be subject to negotiation.
Equity securities may also be purchased from underwriters at prices that include
underwriting fees. Purchases and sales of fixed-income securities are generally
made with an issuer or a primary market-maker acting as principal with no stated
brokerage commission. The price paid to an underwriter for fixed-income
securities includes underwriting fees. Prices for fixed-income securities in
secondary trades usually include undisclosed compensation to the market-maker
reflecting the spread between the bid and ask prices for the securities.

In selecting broker-dealers, the investment adviser strives to obtain "best
execution" (the most favorable total price reasonably attainable under the
circumstances) for the fund's portfolio transactions, taking into account a
variety of factors. These factors include the size and type of transaction, the
nature and character of the markets for the security to be purchased or sold,
the cost, quality and reliability of the executions and the broker-dealer's
ability to offer liquidity and anonymity. The investment adviser considers these
factors, which involve qualitative judgments, when selecting broker-dealers and
execution venues for fund portfolio transactions. The investment adviser views
best execution as a process that should be evaluated over time as part of an
overall relationship with particular broker-dealer firms rather than on a
trade-by-trade basis. The fund does not consider the investment adviser as
having an obligation to obtain the lowest commission rate available for a
portfolio transaction to the exclusion of price, service and qualitative
considerations.

The investment adviser may execute portfolio transactions with broker-dealers
who provide certain brokerage and/or investment research services to it, but
only when in the investment adviser's judgment the broker-dealer is capable of
providing best execution for that transaction. The receipt of these services
permits the investment adviser to supplement its own research and analysis and
makes available the views of, and information from, individuals and the research
staffs of other firms. Such views and information may be provided in the form of
written reports, telephone contacts and meetings with securities analysts. These
services may include, among other things, reports and other communications with
respect to individual companies, industries, countries and regions, economic,
political and legal developments, as well as scheduling meetings with corporate
executives and seminars and conferences related to relevant subject matters. The
investment adviser considers these services to be supplemental to its own
internal research efforts and therefore the receipt of investment research from
broker-dealers does not tend to reduce the expenses involved in the investment
adviser's research efforts. If broker-dealers were to discontinue providing such
services it is unlikely the investment adviser would attempt to replicate them
on its own, in part because they would then no longer provide an independent,
supplemental viewpoint. Nonetheless, if it were to attempt to do so, the
investment adviser would incur substantial additional costs. Research services
that the investment adviser receives from broker-dealers may be used by the
investment adviser in servicing the fund and other funds and accounts that it
advises; however, not all such services will necessarily benefit the fund.

The investment adviser may pay commissions in excess of what other
broker-dealers might have charged - including on an execution-only basis - for
certain portfolio transactions in recognition of

U.S. Government Securities Fund -- Page 33
<PAGE>

brokerage and/or investment research services provided by a broker-dealer. In
this regard, the investment adviser has adopted a brokerage allocation procedure
consistent with the requirements of Section 28(e) of the U.S. Securities
Exchange Act of 1934. Section 28(e) permits an investment adviser to cause an
account to pay a higher commission to a broker-dealer that provides certain
brokerage and/or investment research services to the investment adviser, if the
investment adviser makes a good faith determination that such commissions are
reasonable in relation to the value of the services provided by such
broker-dealer to the investment adviser in terms of that particular transaction
or the investment adviser's overall responsibility to the fund and other
accounts that it advises. Certain brokerage and/or investment research services
may not necessarily benefit all accounts paying commissions to each such
broker-dealer; therefore, the investment adviser assesses the reasonableness of
commissions in light of the total brokerage and investment research services
provided by each particular broker-dealer.

In accordance with its internal brokerage allocation procedure, each equity
investment division of the investment adviser periodically assesses the
brokerage and investment research services provided by each broker-dealer from
which it receives such services. Using its judgment, each equity investment
division of the investment adviser then creates lists with suggested levels of
commissions for particular broker-dealers and provides those lists to its
trading desks. Neither the investment adviser nor the fund incurs any obligation
to any broker-dealer to pay for research by generating trading commissions. The
actual level of business received by any broker-dealer may be less than the
suggested level of commissions and can, and often does, exceed the suggested
level in the normal course of business. As part of its ongoing relationships
with broker-dealers, the investment adviser routinely meets with firms,
typically at the firm's request, to discuss the level and quality of the
brokerage and research services provided, as well as the perceived value and
cost of such services. In valuing the brokerage and investment research services
the investment adviser receives from broker-dealers in connection with its good
faith determination of reasonableness, the investment adviser does not attribute
a dollar value to such services, but rather takes various factors into
consideration, including the quantity, quality and usefulness of the services to
the investment adviser.

The investment adviser seeks, on an ongoing basis, to determine what the
reasonable levels of commission rates are in the marketplace. The investment
adviser takes various considerations into account when evaluating such
reasonableness, including, (a) rates quoted by broker-dealers, (b) the size of a
particular transaction in terms of the number of shares and dollar amount, (c)
the complexity of a particular transaction, (d) the nature and character of the
markets on which a particular trade takes place, (e) the ability of a
broker-dealer to provide anonymity while executing trades, (f) the ability of a
broker-dealer to execute large trades while minimizing market impact, (g) the
extent to which a broker-dealer has put its own capital at risk, (h) the level
and type of business done with a particular broker-dealer over a period of time,
(i) historical commission rates, and (j) commission rates that other
institutional investors are paying.

When executing portfolio transactions in the same equity security for the funds
and accounts, or portions of funds and accounts, over which the investment
adviser, through its equity investment divisions, has investment discretion,
each of the investment divisions will normally aggregate its respective
purchases or sales and execute them as part of the same transaction or series of
transactions. When executing portfolio transactions in the same fixed-income
security for the fund and the other funds or accounts over which it or one of
its affiliated companies has investment discretion, the investment adviser will
normally aggregate such purchases or sales and execute them as part of the same
transaction or series of transactions. The objective of aggregating purchases
and sales of a security is to allocate executions in an equitable manner

U.S. Government Securities Fund -- Page 34
<PAGE>

among the funds and other accounts that have concurrently authorized a
transaction in such security.

The investment adviser may place orders for the fund's portfolio transactions
with broker-dealers who have sold shares of the funds managed by the investment
adviser or its affiliated companies; however, it does not consider whether a
broker-dealer has sold shares of the funds managed by the investment adviser or
its affiliated companies when placing any such orders for the fund's portfolio
transactions.

No brokerage commissions were paid by the fund on portfolio transactions for the
fiscal years ended August 31, 2009, 2008 and 2007.

The fund is required to disclose information regarding investments in the
securities of its "regular" broker-dealers (or parent companies of its regular
broker-dealers) that derive more than 15% of their revenue from broker-dealer,
underwriter or investment adviser activities. A regular broker-dealer is (a) one
of the 10 broker-dealers that received from the fund the largest amount of
brokerage commissions by participating, directly or indirectly, in the fund's
portfolio transactions during the fund's most recent fiscal year; (b) one of the
10 broker-dealers that engaged as principal in the largest dollar amount of
portfolio transactions of the fund during the fund's most recent fiscal year; or
(c) one of the 10 broker-dealers that sold the largest amount of securities of
the fund during the fund's most recent fiscal year.

At the end of the fund's most recent fiscal year, the fund's regular
broker-dealers included Citigroup Global Markets Inc. and Morgan Stanley. As of
the fund's most recent fiscal year-end, the fund held debt securities of
Citigroup, Inc. in the amount of $9,092,000 and Morgan Stanley in the amount of
$10,154,000.

U.S. Government Securities Fund -- Page 35
<PAGE>

DISCLOSURE OF PORTFOLIO HOLDINGS

The fund's investment adviser, on behalf of the fund, has adopted policies and
procedures with respect to the disclosure of information about fund portfolio
securities. These policies and procedures have been reviewed by the fund's board
of trustees and compliance will be periodically assessed by the board in
connection with reporting from the fund's Chief Compliance Officer.

Under these policies and procedures, the fund's complete list of portfolio
holdings available for public disclosure, dated as of the end of each calendar
quarter, is permitted to be posted on the American Funds website no earlier than
the tenth day after such calendar quarter. In practice, the public portfolio
typically is posted on the website approximately 45 days after the end of the
calendar quarter. Such portfolio holdings information may then be disclosed to
any person pursuant to an ongoing arrangement to disclose portfolio holdings
information to such person no earlier than one day after the day on which the
information is posted on the American Funds website. The fund's custodian,
outside counsel and auditor, each of which requires portfolio holdings
information for legitimate business and fund oversight purposes, may receive the
information earlier.

Affiliated persons of the fund, including officers of the fund and employees of
the investment adviser and its affiliates, who receive portfolio holdings
information are subject to restrictions and limitations on the use and handling
of such information pursuant to applicable codes of ethics, including
requirements not to trade in securities based on confidential and proprietary
investment information, to maintain the confidentiality of such information, and
to preclear securities trades and report securities transactions activity, as
applicable. For more information on these restrictions and limitations, please
see the "Code of Ethics" section in this statement of additional information and
the Code of Ethics. Third party service providers of the fund, as described in
this statement of additional information, receiving such information are subject
to confidentiality obligations. When portfolio holdings information is disclosed
other than through the American Funds website to persons not affiliated with the
fund (which, as described above, would typically occur no earlier than one day
after the day on which the information is posted on the American Funds website),
such persons will be bound by agreements (including confidentiality agreements)
or fiduciary obligations that restrict and limit their use of the information to
legitimate business uses only. Neither the fund nor its investment adviser or
any affiliate thereof receives compensation or other consideration in connection
with the disclosure of information about portfolio securities.

Subject to board policies, the authority to disclose a fund's portfolio
holdings, and to establish policies with respect to such disclosure, resides
with the appropriate investment-related committees of the fund's investment
adviser. In exercising their authority, the committees determine whether
disclosure of information about the fund's portfolio securities is appropriate
and in the best interest of fund shareholders. The investment adviser has
implemented policies and procedures to address conflicts of interest that may
arise from the disclosure of fund holdings. For example, the investment
adviser's code of ethics specifically requires, among other things, the
safeguarding of information about fund holdings and contains prohibitions
designed to prevent the personal use of confidential, proprietary investment
information in a way that would conflict with fund transactions. In addition,
the investment adviser believes that its current policy of not selling portfolio
holdings information and not disclosing such information to unaffiliated third
parties until such holdings have been made public on the American Funds website
(other than to certain fund service providers for legitimate business and fund
oversight purposes) helps reduce potential conflicts of interest between fund
shareholders and the investment adviser and its affiliates.

U.S. Government Securities Fund -- Page 36
<PAGE>

PRICE OF SHARES

Shares are purchased at the offering price or sold at the net asset value price
next determined after the purchase or sell order is received and accepted by the
fund or the Transfer Agent; the offering or net asset value 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 or their authorized designees,
accepted by the Principal Underwriter, the Transfer Agent, a dealer or any of
their designees. In the case of orders sent directly to the fund or the Transfer
Agent, an investment dealer should be indicated. The dealer is responsible for
promptly transmitting purchase and sell orders to the Principal Underwriter.

Orders received by the investment dealer or authorized designee, 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. Note that investment
dealers or other intermediaries may have their own rules about share
transactions and may have earlier cut-off times than those of the fund. For more
information about how to purchase through your intermediary, contact your
intermediary directly.

Prices that 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, while 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 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 p.m., the fund's share price would still be determined
as of 4 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. Each share class of the fund has a separately
calculated net asset value (and share price).

All portfolio securities of funds managed by Capital Research and Management
Company (other than American Funds Money Market Fund) are valued, and the net
asset values per share for each share class are determined, as indicated below.
The fund follows standard industry practice by typically reflecting changes in
its holdings of portfolio securities on the first business day following a
portfolio trade.

Equity securities, including depositary receipts, are valued at the official
closing price of, or the last reported sale price on, the exchange or market on
which such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. Prices for each security are taken from the principal exchange or market
in which the security trades. Fixed-income securities are valued at prices
obtained from one or more independent pricing vendors, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued in good faith at the mean
quoted bid and asked prices that are reasonably and timely available (or bid
prices, if asked prices are not available) or at prices for securities of
comparable maturity, quality and type. The pricing vendors base bond prices on,
among other things, valuation matrices which may incorporate dealer-supplied
valuations, proprietary pricing models and an evaluation of the yield curve as
of approximately 3 p.m. New York time. The fund's investment adviser performs
certain checks on these prices prior to calculation of the fund's net asset
value.

U.S. Government Securities Fund -- Page 37
<PAGE>

Securities with both fixed-income and equity characteristics (e.g., convertible
bonds, preferred stocks, units comprised of more than one type of security,
etc.), or equity securities traded principally among fixed-income dealers, are
valued in the manner described above for either equity or fixed-income
securities, depending on which method is deemed most appropriate by the
investment adviser.

Securities with original maturities of one year or less having 60 days or less
to maturity are amortized to maturity based on their cost if acquired within 60
days of maturity, or if already held on the 60th day, based on the value
determined on the 61st day. Forward currency contracts are valued at the mean of
representative quoted bid and asked prices.

Assets or liabilities initially expressed in terms of currencies other than U.S.
dollars 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 market quotations are not readily available or
are considered unreliable are valued at fair value as determined in good faith
under policies approved by the fund's board. Subject to board oversight, the
fund's board has delegated the obligation to make fair valuation determinations
to a valuation committee established by the fund's investment adviser. The board
receives regular reports describing fair-valued securities and the valuation
methods used.

The valuation committee has adopted guidelines and procedures (consistent with
SEC rules and guidance) to consider certain relevant principles and factors when
making all fair value determinations. As a general principle, securities lacking
readily available market quotations, or that have quotations that are considered
unreliable by the investment adviser, are valued in good faith by the valuation
committee based upon what the fund might reasonably expect to receive upon their
current sale. 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. The valuation
committee 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.

Each class of shares represents interests in the same portfolio of investments
and is identical in all respects to each other class, except for differences
relating to distribution, service and other charges and expenses, certain voting
rights, differences relating to eligible investors, the designation of each
class of shares, conversion features and exchange privileges. Expenses
attributable to the fund, but not to a particular class of shares, are borne by
each class pro rata based on relative aggregate net assets of the classes.
Expenses directly attributable to a class of shares are borne by that class of
shares. Liabilities, including accruals of taxes and other expense items
attributable to particular share classes, are deducted from total assets
attributable to such share classes.

Net assets so obtained for each share class are divided by the total number of
shares outstanding of that share class, and the result, rounded to the nearest
cent, is the net asset value per share for that share class.

U.S. Government Securities Fund -- Page 38
<PAGE>

TAXES AND DISTRIBUTIONS

FUND TAXATION -- The fund has elected to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code (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, net income from certain
publicly traded partnerships 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), two or more issuers which the fund
controls and which are determined to be engaged in the same or similar trades or
businesses or the securities of certain publicly traded partnerships.

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"
generally means the sum of (a) 98% of ordinary income (generally net investment
income) for the calendar year, (b) 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 (c) 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 (a) amounts actually
distributed by the fund from its current year's ordinary income and capital gain
net income and (b) 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 in the interest of shareholders to distribute a
lesser amount. The fund may pass through the income earned on certain U.S.
government bonds free of various states' income taxes. However, a few states
require the fund to hold more than 50% of its assets in these types of
government bonds at the end of every fiscal quarter in order to qualify for the
tax exemption. The fund does not currently intend to actively meet the 50%
threshold in order to qualify for the tax exemption in those few states.

U.S. Government Securities Fund -- Page 39
<PAGE>

The following information may not apply to you if you hold fund shares in a
tax-deferred account, such as a retirement plan or education savings account.
Please see your tax adviser for more information.

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. Dividends and capital gain distributions by 529 share classes
will be automatically reinvested.

Distributions of investment company taxable income and net realized capital
gains to shareholders will be taxable whether received in shares or in cash,
unless such shareholders are exempt from taxation. Shareholders electing to
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 and capital gain
distributions by the fund to a tax-deferred retirement plan account are not
taxable currently.

DIVIDENDS -- The fund intends to follow the practice of distributing
substantially all of its investment company taxable income. 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.

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 that 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.

The price of a bond purchased after its original issuance may reflect
market discount which, depending on the particular circumstances, may
affect the tax character and amount of income required to be recognized by
a fund holding the bond. In determining whether a bond is purchased with
market discount, certain de minimis rules apply.

CAPITAL GAIN DISTRIBUTIONS -- The fund also intends to distribute its net
capital gain each year. The fund's net capital gain is 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 carryforward of the fund.

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 15% 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
such shareholder's related tax credit.

U.S. Government Securities Fund -- Page 40
<PAGE>

SHAREHOLDER TAXATION -- In January of each year, individual shareholders holding
fund shares in taxable accounts 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.

DIVIDENDS -- Fund dividends are taxable to shareholders as ordinary income.
All or a portion of a fund's dividend distribution may be a "qualified
dividend." If the fund meets the applicable holding period requirement, it
will distribute dividends derived from qualified corporation dividends to
shareholders as qualified dividends. Interest income from bonds and money
market instruments and nonqualified foreign dividends will be distributed
to shareholders as nonqualified fund dividends. The fund will report on
Form 1099-DIV the amount of each shareholder's dividend that may be treated
as a qualified dividend. If a shareholder other than a corporation meets
the requisite holding period requirement, qualified dividends are taxable
at a maximum rate of 15%.

CAPITAL GAINS -- Distributions of net capital gain that the fund properly
designates as "capital gain dividends" generally will be taxable as
long-term capital gain, regardless of the length of time the shares of the
fund have been held by a shareholder. For non-corporate shareholders, a
capital gain distribution by the fund is subject to a maximum tax rate of
15%. 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 gains (including any undistributed
amounts treated as distributed capital gains, as described above) during
such six-month period.

Distributions by the fund result in a reduction in the net asset value of the
fund's shares. 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 subsequently receive a partial return of their investment
capital upon payment of the distribution, which will be taxable to them.

Redemptions of shares, including exchanges for shares of other American Funds,
may result in federal, state and local tax consequences (gain or loss) to the
shareholder.

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 fund(s).

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. Any loss disallowed under this rule will be added to the
shareholder's tax basis in the new shares purchased.

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

U.S. Government Securities Fund -- Page 41
<PAGE>

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 backup withholding of federal
income tax in the case of non-exempt U.S. shareholders who fail to furnish the
fund 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.

U.S. Government Securities Fund -- Page 42
<PAGE>

UNLESS OTHERWISE NOTED, ALL REFERENCES IN THE FOLLOWING PAGES TO CLASS A, B, C
OR F-1 SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR
529-F-1 SHARES. CLASS 529 SHAREHOLDERS SHOULD ALSO REFER TO THE APPLICABLE
PROGRAM DESCRIPTION FOR INFORMATION ON POLICIES AND SERVICES SPECIFICALLY
RELATING TO THESE ACCOUNTS. SHAREHOLDERS HOLDING SHARES THROUGH AN ELIGIBLE
RETIREMENT PLAN SHOULD CONTACT THEIR PLAN'S ADMINISTRATOR OR RECORDKEEPER FOR
INFORMATION REGARDING PURCHASES, SALES AND EXCHANGES.

PURCHASE AND EXCHANGE OF SHARES

PURCHASES BY INDIVIDUALS -- As described in the prospectus, you may generally
open an account and purchase fund shares by contacting a financial adviser or
investment dealer authorized to sell the fund's shares. You may make investments
by any of the following means:

CONTACTING YOUR FINANCIAL ADVISER -- Deliver or mail a check to your
financial adviser.

BY MAIL -- For initial investments, you may mail a check, made payable to
the fund, directly to the address indicated on the account application.
Please indicate an investment dealer on the account application. You may
make additional investments by filling out the "Account Additions" form at
the bottom of a recent transaction confirmation and mailing the form, along
with a check made payable to the fund, using the envelope provided with
your confirmation.

The amount of time it takes for us to receive regular U.S. postal mail may
vary and there is no assurance that we will receive such mail on the day
you expect. Mailing addresses for regular U.S. postal mail can be found in
the prospectus. To send investments or correspondence to us via overnight
mail or courier service, use either of the following addresses:

American Funds
8332 Woodfield Crossing Blvd.
Indianapolis, IN 46240-2482

American Funds
5300 Robin Hood Rd.
Norfolk, VA 23513-2407

BY TELEPHONE -- Using the American FundsLine. Please see the "Shareholder
account services and privileges" section of this statement of additional
information for more information regarding this service.

BY INTERNET -- Using americanfunds.com. Please see the "Shareholder account
services and privileges" section of this statement of additional
information for more information regarding this service.

BY WIRE -- If you are making a wire transfer, instruct your bank to wire
funds to:

Wells Fargo Bank
ABA Routing No. 121000248
Account No. 4600-076178

U.S. Government Securities Fund -- Page 43
<PAGE>

Your bank should include the following information when wiring funds:

For credit to the account of:
American Funds Service Company
(fund's name)

For further credit to:
(shareholder's fund account number)
(shareholder's name)

You may contact American Funds Service Company at 800/421-0180 if you have
questions about making wire transfers.

OTHER PURCHASE INFORMATION -- 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 4.5% of the outstanding shares of the fund without the consent of a
majority of the fund's board.

Class 529 shares may be purchased only through CollegeAmerica by investors
establishing qualified higher education savings accounts. Class 529-E shares may
be purchased only by investors participating in CollegeAmerica through an
eligible employer plan. The American Funds state tax-exempt funds are qualified
for sale only in certain jurisdictions, and tax-exempt funds in general should
not serve as retirement plan investments. In addition, the fund and the
Principal Underwriter reserve the right to reject any purchase order.

Class R-5 and R-6 shares may be made available to certain charitable foundations
organized and maintained by The Capital Group Companies, Inc. or its affiliates.

Class R-5 and R-6 shares may also be made available to the Virginia College
Savings Plan for use in the Virginia Education Savings Trust and the Virginia
Prepaid Education Program.

PURCHASE MINIMUMS AND MAXIMUMS -- All investments are subject to the purchase
minimums and maximums described in the prospectus. As noted in the prospectus,
purchase minimums may be waived or reduced in certain cases.

In the case of American Funds non-tax-exempt funds, the initial purchase minimum
of $25 may be waived for the following account types:

. Payroll deduction retirement plan accounts (such as, but not limited
to, 403(b), 401(k), SIMPLE IRA, SARSEP and deferred compensation plan
accounts); and

. Employer-sponsored CollegeAmerica accounts.

The following account types may be established without meeting the initial
purchase minimum:

. Retirement accounts that are funded with employer contributions; and

. Accounts that are funded with monies set by court decree.

U.S. Government Securities Fund -- Page 44
<PAGE>

The following account types may be established without meeting the initial
purchase minimum, but shareholders wishing to invest in two or more funds must
meet the normal initial purchase minimum of each fund:

. Accounts that are funded with (a) transfers of assets, (b) rollovers
from retirement plans, (c) rollovers from 529 college savings plans or
(d) required minimum distribution automatic exchanges; and

. American Funds money market fund accounts registered in the name of
clients of Capital Guardian Trust Company's Personal Investment
Management group.

Certain accounts held on the fund's books, known as omnibus accounts, contain
multiple underlying accounts that are invested in shares of the fund. These
underlying accounts are maintained by entities such as financial intermediaries
and are subject to the applicable initial purchase minimums as described in the
prospectus and this statement of additional information. However, in the case
where the entity maintaining these accounts aggregates the accounts' purchase
orders for fund shares, such accounts are not required to meet the fund's
minimum amount for subsequent purchases.

EXCHANGES -- You may only exchange shares into other American Funds within the
same share class. However, exchanges from Class A shares of American Funds Money
Market Fund may be made to Class C shares of other American Funds for dollar
cost averaging purposes. Exchanges are not permitted from Class A shares of
American Funds Money Market Fund to Class C shares of Intermediate Bond Fund of
America, Limited Term Tax-Exempt Bond Fund of America or Short-Term Bond Fund of
America. Exchange purchases are subject to the minimum investment requirements
of the fund purchased and no sales charge generally applies. However, exchanges
of shares from American Funds Money Market Fund are subject to applicable sales
charges, unless the American Funds 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. Exchanges of
Class F shares generally may only be made through fee-based programs of
investment firms that have special agreements with the fund's distributor and
certain registered investment advisers.

You may exchange shares of other classes by contacting the Transfer Agent, by
contacting your investment dealer or financial adviser, by using American
FundsLine or americanfunds.com, or by telephoning 800/421-0180 toll-free, or
faxing (see "American Funds Service Company service areas" in the prospectus for
the appropriate fax numbers) the Transfer Agent. For more information, see
"Shareholder account services and privileges" in this statement of additional
information. THESE TRANSACTIONS HAVE THE SAME TAX CONSEQUENCES AS ORDINARY SALES
AND PURCHASES.

Shares held in employer-sponsored retirement plans may be exchanged into other
American Funds by contacting your plan administrator or recordkeeper. Exchange
redemptions and purchases are processed simultaneously at the share prices next
determined after the exchange order is received (see "Price of shares" in this
statement of additional information).

FREQUENT TRADING OF FUND SHARES -- As noted in the prospectus, certain
redemptions may trigger a purchase block lasting 30 calendar days under the
fund's "purchase blocking policy." Under this policy, systematic redemptions
will not trigger a purchase block and systematic purchases will not be
prevented. For purposes of this policy, systematic redemptions include, for

U.S. Government Securities Fund -- Page 45
<PAGE>

example, regular periodic automatic redemptions and statement of intention
escrow share redemptions. Systematic purchases include, for example, regular
periodic automatic purchases and automatic reinvestments of dividends and
capital gain distributions.

OTHER POTENTIALLY ABUSIVE ACTIVITY -- In addition to implementing purchase
blocks, American Funds Service Company will monitor for other types of activity
that could potentially be harmful to the American Funds - for example,
short-term trading activity in multiple funds. When identified, American Funds
Service Company will request that the shareholder discontinue the activity. If
the activity continues, American Funds Service Company will freeze the
shareholder account to prevent all activity other than redemptions of fund
shares.

MOVING BETWEEN SHARE CLASSES

If you wish to "move" your investment between share classes (within the
same fund or between different funds), we generally will process your
request as an exchange of the shares you currently hold for shares in the
new class or fund. Below is more information about how sales charges are
handled for various scenarios.

EXCHANGING CLASS B SHARES FOR CLASS A SHARES -- If you exchange Class B
shares for Class A shares during the contingent deferred sales charge
period you are responsible for paying any applicable deferred sales charges
attributable to those Class B shares, but you will not be required to pay a
Class A sales charge. If, however, you exchange your Class B shares for
Class A shares after the contingent deferred sales charge period, you are
responsible for paying any applicable Class A sales charges.

EXCHANGING CLASS C SHARES FOR CLASS A SHARES -- If you exchange Class C
shares for Class A shares, you are still responsible for paying any Class C
contingent deferred sales charges and applicable Class A sales charges.

EXCHANGING CLASS C SHARES FOR CLASS F SHARES -- If you are part of a
qualified fee-based program and you wish to exchange your Class C shares
for Class F shares to be held in the program, you are still responsible for
paying any applicable Class C contingent deferred sales charges.

EXCHANGING CLASS F SHARES FOR CLASS A SHARES -- You can exchange Class F
shares held in a qualified fee-based program for Class A shares without
paying an initial Class A sales charge if all of the following requirements
are met: (a) you are leaving or have left the fee-based program, (b) you
have held the Class F shares in the program for at least one year, and (c)
you notify American Funds Service Company of your request. If you have
already redeemed your Class F shares, the foregoing requirements apply and
you must purchase Class A shares within 90 days after redeeming your Class
F shares to receive the Class A shares without paying an initial Class A
sales charge.

EXCHANGING CLASS A SHARES FOR CLASS F SHARES -- If you are part of a
qualified fee-based program and you wish to exchange your Class A shares
for Class F shares to be held in the program, any Class A sales charges
(including contingent deferred sales charges) that you paid or are payable
will not be credited back to your account.

U.S. Government Securities Fund -- Page 46
<PAGE>

EXCHANGING CLASS A SHARES FOR CLASS R SHARES -- Provided it is eligible to
invest in Class R shares, a retirement plan currently invested in Class A
shares may exchange its shares for Class R shares. Any Class A sales
charges that the retirement plan previously paid will not be credited back
to the plan's account.

EXCHANGING CLASS F-1 SHARES FOR CLASS F-2 SHARES -- If you are part of a
qualified fee-based program that offers Class F-2 shares, you may exchange
your Class F-1 shares for Class F-2 shares to be held in the program.

MOVING BETWEEN OTHER SHARE CLASSES -- If you desire to move your investment
between share classes and the particular scenario is not described in this
statement of additional information, please contact American Funds Service
Company at 800/421-0180 for more information.

NON-REPORTABLE TRANSACTIONS -- Automatic conversions described in the
prospectus will be non-reportable for tax purposes. In addition, except in
the case of a movement between a 529 share class and a non-529 share class,
an exchange of shares from one share class of a fund to another share class
of the same fund will be treated as a non-reportable exchange for tax
purposes, provided that the exchange request is received in writing by
American Funds Service Company and processed as a single transaction.

U.S. Government Securities Fund -- Page 47
<PAGE>

SALES CHARGES

CLASS A PURCHASES

PURCHASES BY CERTAIN 403(B) PLANS

A 403(b) plan may not invest in Class A or C shares unless such plan was
invested in Class A or C shares before January 1, 2009.

Participant accounts of a 403(b) plan that were treated as an
individual-type plan for sales charge purposes before January 1, 2009, may
continue to be treated as accounts of an individual-type plan for sales
charge purposes. Participant accounts of a 403(b) plan that were treated as
an employer-sponsored plan for sales charge purposes before January 1,
2009, may continue to be treated as accounts of an employer-sponsored plan
for sales charge purposes. Participant accounts of a 403(b) plan that is
established on or after January 1, 2009 are treated as accounts of an
employer-sponsored plan for sales charge purposes.

PURCHASES BY SEP PLANS AND SIMPLE IRA PLANS

Participant accounts in a Simplified Employee Pension (SEP) plan or a
Savings Incentive Match Plan for Employees of Small Employers IRA (SIMPLE
IRA) plan will be aggregated together for Class A sales charge purposes if
the SEP plan or SIMPLE IRA plan was established after November 15, 2004 by
an employer adopting a prototype plan produced by American Funds
Distributors, Inc. In the case where the employer adopts any other plan
(including, but not limited to, an IRS model agreement), each participant's
account in the plan will be aggregated with the participant's own personal
investments that qualify under the aggregation policy. A SEP plan or SIMPLE
IRA plan with a certain method of aggregating participant accounts as of
November 15, 2004 may continue with that method so long as the employer has
not modified the plan document since that date.

OTHER PURCHASES

Pursuant to a determination of eligibility by a vice president or more
senior officer of the Capital Research and Management Company Fund
Administration Unit, or by his or her designee, Class A shares of the
American Funds 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 of the above persons, and
trusts or plans primarily for such persons;

(2) currently registered representatives and assistants directly employed
by such representatives, retired registered representatives with
respect to accounts established while active, or full-time employees
(collectively, "Eligible Persons") (and their (a) spouses or
equivalents if recognized under local law, (b) parents and children,
including parents and children in step and adoptive relationships,
sons-in-law and daughters-in-law, and (c) parents-in-law, if the
Eligible Persons or the

U.S. Government Securities Fund -- Page 48
<PAGE>

spouses, children or parents of the Eligible Persons are listed in the
account registration with the parents-in-law) of dealers who have
sales agreements with the Principal Underwriter (or who clear
transactions through such dealers), plans for the dealers, and plans
that include as participants only the Eligible Persons, their spouses,
parents and/or children;

(3) currently registered investment advisers ("RIAs") and assistants
directly employed by such RIAs, retired RIAs with respect to accounts
established while active, or full-time employees (collectively,
"Eligible Persons") (and their (a) spouses or equivalents if
recognized under local law, (b) parents and children, including
parents and children in step and adoptive relationships, sons-in-law
and daughters-in-law and (c) parents-in-law, if the Eligible Persons
or the spouses, children or parents of the Eligible Persons are listed
in the account registration with the parents-in-law) of RIA firms that
are authorized to sell shares of the funds, plans for the RIA firms,
and plans that include as participants only the Eligible Persons,
their spouses, parents and/or children;

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

(5) insurance company separate accounts;

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

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

(8) an individual or entity with a substantial business relationship with
The Capital Group Companies, Inc. or its affiliates, or an individual
or entity related or relating to such individual or entity;

(9) 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.; and

(10) full-time employees of banks that have sales agreements with the
Principal Underwriter, who are solely dedicated to directly supporting
the sale of mutual funds.

Shares are offered at net asset value to these persons and organizations
due to anticipated economies in sales effort and expense. Once an account
is established under this net asset value privilege, additional investments
can be made at net asset value for the life of the account.

TRANSFERS TO COLLEGEAMERICA -- A transfer from the Virginia Prepaid
Education Program/SM/ or the Virginia Education Savings Trust/SM/ to a
CollegeAmerica account will be made with no sales charge. No commission
will be paid to the dealer on such a transfer.

MOVING BETWEEN ACCOUNTS -- Investments in certain account types may be moved to
other account types without incurring additional Class A sales charges. These
transactions include, for example:

U.S. Government Securities Fund -- Page 49
<PAGE>

. redemption proceeds from a non-retirement account (for example, a
joint tenant account) used to purchase fund shares in an IRA or other
individual-type retirement account;

. required minimum distributions from an IRA or other individual-type
retirement account used to purchase fund shares in a non-retirement
account; and

. death distributions paid to a beneficiary's account that are used by
the beneficiary to purchase fund shares in a different account.

LOAN REPAYMENTS -- Repayments on loans taken from a retirement plan or an
individual-type retirement account are not subject to sales charges if American
Funds Service Company is notified of the repayment.

DEALER COMMISSIONS AND COMPENSATION -- Commissions (up to 1.00%) are paid to
dealers who initiate and are responsible for certain Class A share purchases not
subject to initial sales charges. These purchases consist of purchases of $1
million or more, purchases by employer-sponsored defined contribution-type
retirement plans investing $1 million or more or with 100 or more eligible
employees, and purchases made at net asset value by certain retirement plans,
endowments and foundations with assets of $50 million or more. Commissions on
such investments (other than IRA rollover assets that roll over at no sales
charge under the fund's IRA rollover policy as described in the prospectus) are
paid to dealers at the following rates: 1.00% on amounts of less than $4
million, 0.50% on amounts of at least $4 million but less than $10 million and
0.25% on amounts of at least $10 million. Commissions are based on cumulative
investments over the life of the account with no adjustment for redemptions,
transfers, or market declines. For example, if a shareholder has accumulated
investments in excess of $4 million (but less than $10 million) and subsequently
redeems all or a portion of the account(s), purchases following the redemption
will generate a dealer commission of 0.50%.

A dealer concession of up to 1% may be paid by the fund under its Class A plan
of distribution to reimburse the Principal Underwriter in connection with dealer
and wholesaler compensation paid by it with respect to investments made with no
initial sales charge.

U.S. Government Securities Fund -- Page 50
<PAGE>

SALES CHARGE REDUCTIONS AND WAIVERS

REDUCING YOUR CLASS A SALES CHARGE -- As described in the prospectus, there are
various ways to reduce your sales charge when purchasing Class A shares.
Additional information about Class A sales charge reductions is provided below.

STATEMENT OF INTENTION -- By establishing a statement of intention (the
"Statement"), you enter into a nonbinding commitment to purchase shares of
the American Funds (excluding American Funds Money Market Fund) over a
13-month period and receive the same sales charge (expressed as a
percentage of your purchases) as if all shares had been purchased at once,
unless the Statement is upgraded as described below.

The Statement period starts on the date on which your first purchase made
toward satisfying the Statement is processed. The market value of your
existing holdings eligible to be aggregated (see below) as of the day
immediately before the start of the Statement period may be credited toward
satisfying the Statement.

You may revise the commitment you have made in your Statement upward at any
time during the Statement period. If your prior commitment has not been met
by the time of the revision, the Statement period during which purchases
must be made will remain unchanged. Purchases made from the date of the
revision will receive the reduced sales charge, if any, resulting from the
revised Statement. If your prior commitment has been met by the time of the
revision, your original Statement will be considered met and a new
Statement will be established.

The Statement will be considered completed if the shareholder dies within
the 13-month Statement period. Commissions to dealers will not be adjusted
or paid on the difference between the Statement amount and the amount
actually invested before the shareholder's death.

When a shareholder elects to use a Statement, shares equal to 5% of the
dollar amount specified in the Statement may 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 Statement period,
the purchaser may be required to 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. Any dealers assigned to the shareholder's account at the
time a purchase was made during the Statement period will receive a
corresponding commission adjustment if appropriate. 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 may be liable
to the Principal Underwriter for the balance still outstanding.

Certain payroll deduction retirement plans purchasing Class A shares under
a Statement on or before November 12, 2006, may continue to purchase Class
A shares at the sales charge determined by that particular Statement until
the plans' values reach the amounts specified in their Statements. Upon
reaching such amounts, the Statements for these plans will be deemed
completed and will terminate. In addition, effective May 1, 2009, the

U.S. Government Securities Fund -- Page 51
<PAGE>

Statements for these plans will expire if they have not been met by the
next anniversary of the establishment of such Statement. After such
termination, these plans are eligible for additional sales charge
reductions by meeting the criteria under the fund's rights of accumulation
policy.

In addition, if you currently have individual holdings in American Legacy
variable annuity contracts or variable life insurance policies that were
established on or before March 31, 2007, you may continue to apply
purchases under such contracts and policies to a Statement.

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

AGGREGATION -- Qualifying investments for aggregation include those made by
you and your "immediate family" as defined in the prospectus, if all
parties are purchasing shares for their own accounts and/or:

. individual-type employee benefit plans, such as an IRA,
single-participant Keogh-type plan, or a participant account of a
403(b) plan that is treated as an individual-type plan for sales
charge purposes (see "Purchases by certain 403(b) plans" under "Sales
charges" in this statement of additional information);

. SEP plans and SIMPLE IRA plans established after November 15, 2004 by
an employer adopting any plan document other than a prototype plan
produced by American Funds Distributors, Inc.;

. 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 (for trusts
with only one primary beneficiary, upon the trustor's death the trust
account may be aggregated with such beneficiary's own accounts; for
trusts with multiple primary beneficiaries, upon the trustor's death
the trustees of the trust may instruct American Funds Service Company
to establish separate trust accounts for each primary beneficiary;
each primary beneficiary's separate trust account may then be
aggregated with such beneficiary's own accounts);

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

. 529 accounts, which will be aggregated at the account owner level
(Class 529-E accounts may only be aggregated with an eligible employer
plan).

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, including employee
benefit plans other than the 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, excluding the
individual-type employee benefit plans described above;

U.S. Government Securities Fund -- Page 52
<PAGE>

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

. for nonprofit, charitable or educational organizations, or any
endowments or foundations established and controlled by such
organizations, or any employer-sponsored retirement plans established
for the benefit of the employees of such organizations, their
endowments, or their foundations;

. for participant accounts of a 403(b) plan that is treated as an
employer-sponsored plan for sales charge purposes (see "Purchases by
certain 403(b) plans" under "Sales charges" in this statement of
additional information), or made for participant accounts of two or
more such plans, in each case of a single employer or affiliated
employers as defined in the 1940 Act; or

. for a SEP or SIMPLE IRA plan established after November 15, 2004 by an
employer adopting a prototype plan produced by American Funds
Distributors, Inc.

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 -- As described in the prospectus, you may reduce your
Class A sales charge by combining purchases of all classes of shares in the
American Funds, as well as holdings in Endowments and applicable holdings
in the American Funds Target Date Retirement Series. 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 American Funds Money Market Fund are excluded. If you currently have
individual holdings in American Legacy variable annuity contracts or
variable life insurance policies that were established on or before March
31, 2007, you may continue to combine purchases made under such contracts
and policies to reduce your Class A sales charge.

RIGHTS OF ACCUMULATION -- Subject to the limitations described in the
aggregation policy, you may take into account your accumulated holdings in
all share classes of the American Funds, as well as your holdings in
Endowments and applicable holdings in the American Funds Target Date
Retirement Series, to determine your sales charge on investments in
accounts eligible to be aggregated. Direct purchases of American Funds
Money Market Fund are excluded. Subject to your investment dealer's or
recordkeeper's capabilities, your accumulated holdings will be calculated
as the higher of (a) the current value of your existing holdings (the
"market value") as of the day prior to your American Funds investment or
(b) the amount you invested (including reinvested dividends and capital
gains, but excluding capital appreciation) less any withdrawals (the "cost
value"). Depending on the entity on whose books your account is held, the
value of your holdings in that account may not be eligible for calculation
at cost value. For example, accounts held in nominee or street name may not
be eligible for calculation at cost value and instead may be calculated at
market value for purposes of rights of accumulation.

U.S. Government Securities Fund -- Page 53
<PAGE>

The value of all of your holdings in accounts established in calendar year
2005 or earlier will be assigned an initial cost value equal to the market
value of those holdings as of the last business day of 2005. Thereafter,
the cost value of such accounts will increase or decrease according to
actual investments or withdrawals. You must contact your financial adviser
or American Funds Service Company if you have additional information that
is relevant to the calculation of the value of your holdings.

When determining your American Funds Class A sales charge, if your
investment is not in an employer-sponsored retirement plan, you may also
continue to take into account the market value (as of the day prior to your
American Funds investment) of your individual holdings in various American
Legacy variable annuity contracts and variable life insurance policies that
were established on or before March 31, 2007. An employer-sponsored
retirement plan may also continue to take into account the market value of
its investments in American Legacy Retirement Investment Plans that were
established on or before March 31, 2007.

You may not purchase Class C or 529-C shares if such combined holdings
cause you to be eligible to purchase Class A or 529-A shares at the $1
million or more sales charge discount rate (i.e. at net asset value).

If you make a gift of American Funds Class A shares, upon your request, you
may purchase the shares at the sales charge discount allowed under rights
of accumulation of all of your American Funds and applicable American
Legacy accounts.

RIGHT OF REINVESTMENT -- As described in the prospectus, certain
transactions may be eligible for investment without a sales charge pursuant
to the fund's right of reinvestment policy. Recent legislation suspended
required minimum distributions from individual retirement accounts and
employer-sponsored retirement plan accounts for the 2009 tax year. Given
this suspension, proceeds from an automatic withdrawal plan to satisfy a
required minimum distribution may be invested without a sales charge for
the 2009 tax year, or any subsequent period, to the extent such legislation
is extended. This policy is subject to any restrictions regarding the
investment of proceeds from a required minimum distribution that may be
established by the transfer agent.

CDSC WAIVERS FOR CLASS A, B AND C SHARES -- As noted in the prospectus, a
contingent deferred sales charge ("CDSC") may be waived for redemptions due to
death or post-purchase disability of a shareholder (this generally excludes
accounts registered in the names of trusts and other entities). In the case of
joint tenant accounts, if one joint tenant dies, a surviving joint tenant, at
the time he or she notifies the Transfer Agent of the other joint tenant's death
and removes the decedent's name from the account, may redeem shares from the
account without incurring a CDSC. Redemptions made after the Transfer Agent is
notified of the death of a joint tenant will be subject to a CDSC.

In addition, a CDSC may be waived for the following types of transactions, if
together they do not exceed 12% of the value of an "account" (defined below)
annually (the "12% limit"):

. Required minimum distributions taken from retirement accounts upon the
shareholder's attainment of age 70-1/2 (required minimum distributions
that continue to be taken by the beneficiary(ies) after the account
owner is deceased also qualify for a waiver).

U.S. Government Securities Fund -- Page 54
<PAGE>

. Redemptions through an automatic withdrawal plan ("AWP") (see
"Automatic withdrawals" under "Shareholder account services and
privileges" in this statement of additional information). For each AWP
payment, assets that are not subject to a CDSC, such as appreciation
on shares and shares acquired through reinvestment of dividends and/or
capital gain distributions, will be redeemed first and will count
toward the 12% limit. If there is an insufficient amount of assets not
subject to a CDSC to cover a particular AWP payment, shares subject to
the lowest CDSC will be redeemed next until the 12% limit is reached.
Any dividends and/or capital gain distributions taken in cash by a
shareholder who receives payments through an AWP will also count
toward the 12% limit. In the case of an AWP, the 12% limit is
calculated at the time an automatic redemption is first made, and is
recalculated at the time each additional automatic redemption is made.
Shareholders who establish an AWP should be aware that the amount of a
payment not subject to a CDSC may vary over time depending on
fluctuations in the value of their accounts. This privilege may be
revised or terminated at any time.

For purposes of this paragraph, "account" means:

. in the case of Class A shares, your investment in Class A shares of
all American Funds (investments representing direct purchases of
American Funds Money Market Fund are excluded);

. in the case of Class B shares, your investment in Class B shares of
the particular fund from which you are making the redemption; and

. in the case of Class C shares, your investment in Class C shares of
the particular fund from which you are making the redemption.

CDSC waivers are allowed only in the cases listed here and in the prospectus.
For example, CDSC waivers will not be allowed on redemptions of Class 529-B and
529-C shares due to termination of CollegeAmerica; a determination by the
Internal Revenue Service that CollegeAmerica does not qualify as a qualified
tuition program under the Code; proposal or enactment of law that eliminates or
limits the tax-favored status of CollegeAmerica; or elimination of the fund by
the Virginia College Savings Plan as an option for additional investment within
CollegeAmerica.

U.S. Government Securities Fund -- Page 55
<PAGE>

SELLING SHARES

The methods for selling (redeeming) shares are described more fully in the
prospectus. If you wish to sell your shares by contacting American Funds Service
Company directly, any such request must be signed by the registered
shareholders. To contact American Funds Service Company via overnight mail or
courier service, see "Purchase and exchange of shares."

A signature guarantee may be required for certain redemptions. In such an event,
your signature may be guaranteed by a domestic stock exchange or the Financial
Industry Regulatory Authority, 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 with your written request
any shares you wish to sell that are in certificate form.

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 10
business 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 request that redemption proceeds of $1,000 or more from American Funds
Money Market Fund be wired to your bank by writing American Funds Service
Company. A signature guarantee is required on all requests to wire funds.

U.S. Government Securities Fund -- Page 56
<PAGE>

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders. However, certain services and privileges described in the
prospectus and this statement of additional information may not be available for
Class 529 shareholders or if your account is held with an investment dealer or
through an employer-sponsored retirement plan.

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 that you would like to invest 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. If the date you
specified falls on a weekend or holiday, your money will be invested on the
following business day. However, if the following business day falls in the next
month, your money will be invested on the business day immediately preceding the
weekend or holiday. 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 contacting 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. Dividends and capital gain
distributions paid to retirement plan shareholders or shareholders of the 529
share classes will be automatically reinvested.

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 may be automatically converted to having all dividends and other
distributions reinvested in additional shares.

CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -- For all share classes,
except the 529 classes of shares, you may cross-reinvest dividends and capital
gains (distributions) into other American Funds in the same share class at net
asset value, subject to the following conditions:

(1) 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);

(2) if the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested; and

(3) 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.

U.S. Government Securities Fund -- Page 57
<PAGE>

AUTOMATIC EXCHANGES -- For all share classes, you may automatically exchange
shares of the same class in amounts of $50 or more among any of the American
Funds on any day (or preceding business day if the day falls on a nonbusiness
day) of each month you designate.

AUTOMATIC WITHDRAWALS -- Depending on the type of account, for all share classes
except R shares, you may automatically withdraw shares from any of the American
Funds. You can make automatic withdrawals of $50 or more. You can designate the
day of each period for withdrawals and request that checks be sent to you or
someone else. Withdrawals may also be electronically deposited to your bank
account. The Transfer Agent will withdraw your money from the fund you specify
on or around the date you specify. If the date you specified falls on a weekend
or holiday, the redemption will take place on the previous business day.
However, if the previous business day falls in the preceding month, the
redemption will take place on the following business day after the weekend or
holiday. You should consult with your adviser or intermediary to determine if
your account is eligible for automatic withdrawals.

Withdrawal payments are not to be considered as dividends, yield or income.
Generally, 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.

Redemption proceeds from an automatic withdrawal plan are not eligible for
reinvestment without a sales charge.

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 AMERICANFUNDS.COM -- You may check your share balance,
the price of your shares or your most recent account transaction; redeem shares
(up to $75,000 per American Funds shareholder each day) from nonretirement plan
accounts; or exchange shares around the clock with American FundsLine or using
americanfunds.com. To use American FundsLine, call 800/325-3590 from a
TouchTone(TM) telephone. Redemptions and exchanges through American FundsLine
and americanfunds.com are subject to the conditions noted above and in
"Telephone and Internet purchases, redemptions and exchanges" below. You will
need your fund number (see the list of the American Funds under "General
information -- 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.

Generally, all shareholders are automatically eligible to use these services.
However, if you are not currently authorized to do so, you may complete an
American FundsLink Authorization Form. Once you establish this privilege, you,
your financial adviser or any person with your account information may use these
services.

U.S. Government Securities Fund -- Page 58
<PAGE>

TELEPHONE AND INTERNET PURCHASES, REDEMPTIONS AND EXCHANGES -- By using the
telephone (including American FundsLine) or the Internet (including
americanfunds.com), or fax 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 respective directors,
trustees, officers, employees and agents harmless from any losses, expenses,
costs or liabilities (including attorney fees) that may be incurred in
connection with the exercise of these privileges. Generally, all shareholders
are automatically eligible to use these services. However, you may elect to opt
out of these services 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.

CHECKWRITING -- You may establish check writing privileges for Class A shares
(but not Class 529-A shares) of American Funds Money Market Fund upon meeting
the fund's initial purchase minimum of $1,000. This can be done by using an
account 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 account
application.

REDEMPTION OF SHARES -- The fund's declaration of trust 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 trustees of the fund may from time to time
adopt.

While payment of redemptions normally will be in cash, the fund's declaration of
trust permits payment of the redemption price wholly or partly with portfolio
securities or other fund assets under conditions and circumstances determined by
the fund's board of trustees. For example, redemptions could be made in this
manner if the board determined that making payments wholly in cash over a
particular period would be unfair and/or harmful to other fund shareholders.

SHARE CERTIFICATES -- Shares are credited to your account and certificates are
not issued unless you request them by contacting the Transfer Agent.
Certificates are not available for the 529 or R share classes.

U.S. Government Securities Fund -- Page 59
<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 JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017-2070, as
Custodian. If the fund holds securities of issuers outside the U.S., the
Custodian may hold these securities pursuant to subcustodial arrangements in
banks outside the U.S. or branches of U.S. banks outside the U.S.

TRANSFER AGENT -- American Funds Service Company, a wholly owned subsidiary of
the investment adviser, maintains the records of shareholder accounts, 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. The principal office of American Funds Service Company is
located at 6455 Irvine Center Drive, Irvine, CA 92618. American Funds Service
Company was paid a fee of $5,491,000 for Class A shares and $375,000 for Class
B shares for the 2009 fiscal year. American Funds Service Company is also
compensated for certain transfer agency services provided to all other share
classes from the administrative services fees paid to Capital Research and
Management Company and from the relevant share class, as described under
"Administrative services agreement."

In the case of certain shareholder accounts, third parties who may be
unaffiliated with the investment adviser provide transfer agency and shareholder
services in place of American Funds Service Company. These services are rendered
under agreements with American Funds Service Company or its affiliates and the
third parties receive compensation according to such agreements. Compensation
for transfer agency and shareholder services, whether paid to American Funds
Service Company or such third parties, is ultimately paid from fund assets and
is reflected in the expenses of the fund as disclosed in the prospectus.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -- Deloitte & Touche LLP, 695 Town
Center Drive, Costa Mesa, California 92626, serves as the fund's independent
registered public accounting firm, 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 audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated in their
report appearing herein. Such financial statements have been so included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing. The selection of the fund's independent registered
public accounting firm is reviewed and determined annually by the board of
trustees.

INDEPENDENT LEGAL COUNSEL -- Bingham McCutchen LLP, 355 South Grand Avenue,
Suite 4400, Los Angeles, CA 90071, serves as independent legal counsel
("counsel") for the fund and for independent trustees in their capacities as
such. A determination with respect to the independence of the fund's counsel
will be made at least annually by the independent trustees of the fund, as
prescribed by the 1940 Act and related rules.

PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- The fund's fiscal
year ends on August 31. Shareholders are provided updated summary prospectuses
annually and at least semi-annually with reports showing the fund's investment
portfolio or summary investment portfolio, financial statements and other
information. Shareholders may request a copy of the fund's current prospectus at
no cost by calling 800/421-0180 or by sending an e-mail request to
prospectus@americanfunds.com. The fund's annual financial statements are audited
by the

U.S. Government Securities Fund -- Page 60
<PAGE>

fund's independent registered public accounting firm, 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 summary prospectuses, shareholder reports and
proxy statements. To receive additional copies of a summary prospectus, report
or proxy statement, shareholders should contact the Transfer Agent.

Shareholders may also elect to receive updated summary prospectuses, annual
reports and semi-annual reports electronically by signing up for electronic
delivery on our website, americanfunds.com. Upon electing the electronic
delivery of updated summary prospectuses and other reports, a shareholder will
no longer automatically receive such documents in paper form by mail. A
shareholder who elects electronic delivery is able to cancel this service at any
time and return to receiving updated summary prospectuses and other reports in
paper form by mail.

Summary prospectuses, prospectuses, annual reports and semi-annual reports that
are mailed to shareholders by the American Funds organization are printed with
ink containing soy and/or vegetable oil on paper containing recycled fibers.

SHAREHOLDER AND TRUSTEE RESPONSIBILITY -- Under the laws of Massachusetts, where
the fund was organized, there is no express provision relating to the limitation
of liability of the beneficial owners of a Massachusetts business trust.
However, under the laws of Massachusetts and California, where the fund's
principal office is located, shareholders of a Massachusetts business trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the fund. However, the risk of a shareholder incurring any
financial loss on account of shareholder liability is limited to circumstances
in which a fund itself would be unable to meet its obligations. The Declaration
of Trust contains an express disclaimer of shareholder liability for acts,
omissions, obligations or affairs of the fund and provides that notice of the
disclaimer may be given in each agreement, obligation, or instrument which is
entered into or executed by the fund or trustees. The Declaration of Trust
provides for indemnification out of fund property of any shareholder held
personally liable for the obligations of the fund and also provides for the fund
to reimburse such shareholder for all legal and other expenses reasonably
incurred in connection with any such claim or liability.

Massachusetts law does not include an express provision limiting the liability
of the trustees of a Massachusetts business trust. Under the Declaration of
Trust, the trustees, officers, employees or agents of the fund are not liable
for actions or failure to act; however, they are not protected from liability by
reason of their willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.

CODES OF ETHICS -- The fund and Capital Research and Management Company and its
affiliated companies, including the fund's Principal Underwriter, have adopted
codes of ethics that allow for personal investments, including securities in
which the fund may invest from time to time. These codes include a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; preclearance 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.

U.S. Government Securities Fund -- Page 61
<PAGE>

LEGAL PROCEEDINGS -- On February 16, 2005, the NASD (now the Financial Industry
Regulatory Authority, or FINRA) filed an administrative complaint against the
Principal Underwriter. The complaint alleges violations of certain NASD rules by
the Principal Underwriter with respect to the selection of broker-dealer firms
that buy and sell securities for mutual fund investment portfolios. The
complaint seeks sanctions, restitution and disgorgement. On August 30, 2006, a
FINRA Hearing Panel ruled against the Principal Underwriter and imposed a $5
million fine. On April 30, 2008, FINRA's National Adjudicatory Council affirmed
the decision by FINRA's Hearing Panel. The Principal Underwriter has appealed
this decision to the Securities and Exchange Commission.

The investment adviser and Principal Underwriter believe that the likelihood
that this matter could have a material adverse effect on the fund or on the
ability of the investment adviser or Principal Underwriter to perform their
contracts with the fund is remote. In addition, class action lawsuits have been
filed in the U.S. District Court, Central District of California, relating to
this and other matters. The investment adviser believes that these suits are
without merit and will defend itself vigorously.

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- AUGUST 31, 2009

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $14.11
Maximum offering price per share
(100/96.25 of net asset value per share,
which takes into account the fund's current maximum
sales charge). . . . . . . . . . . . . . . . $14.66

OTHER INFORMATION -- The fund reserves the right to modify the privileges
described in this statement of additional information at any time.

INVESTMENT MIX BY SECURITY TYPE AS OF AUGUST 31, 2009 PERCENT OF
NET ASSETS
- -----------------------------------------------------------------------------

U.S. Treasury bonds & notes 47.2%
- -----------------------------------------------------------------------------
Mortgage-backed obligations 43.2
- -----------------------------------------------------------------------------
Federal agency bonds & notes 7.9
- -----------------------------------------------------------------------------
Asset-backed obligations 0.8
- -----------------------------------------------------------------------------
Short-term securities & other assets less liabilities 0.9
- -----------------------------------------------------------------------------

PERCENT OF
QUALITY BREAKDOWN AS OF AUGUST 31, 2009 NET ASSETS
- -------------------------------------------------------------------------------

U.S. government obligations* 54.6%
- -------------------------------------------------------------------------------
Federal agencies 42.2
- -------------------------------------------------------------------------------
Aaa/AAA 2.3
- -------------------------------------------------------------------------------
Short-term securities & other assets less liabilities 0.9
- -------------------------------------------------------------------------------

* These securities are guaranteed by the full faith and credit of the U.S.
government.

U.S. Government Securities Fund -- Page 62
<PAGE>

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

For updated information on the fund's portfolio holdings, please visit us at
americanfunds.com.

The financial statements, including the investment portfolio and the report of
the fund's independent registered public accounting firm contained in the annual
report, are included in this statement of additional information. The following
information on fund numbers is not included in the annual report:

U.S. Government Securities Fund -- Page 63
<PAGE>

FUND NUMBERS -- Here are the fund numbers for use with our automated telephone
line, American FundsLine/(R)/, or when making share transactions:

FUND NUMBERS
-------------------------------------------------
FUND CLASS A CLASS B CLASS C CLASS F-1 CLASS F-2
- -------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . 002 202 302 402 602
American Balanced Fund/(R)/ 011 211 311 411 611
American Mutual Fund/(R)/ . 003 203 303 403 603
Capital Income Builder/(R)/ 012 212 312 412 612
Capital World Growth and
Income Fund/SM/ . . . . . . 033 233 333 433 633
EuroPacific Growth Fund/(R)/ 016 216 316 416 616
Fundamental Investors/SM/ . 010 210 310 410 610
The Growth Fund of
America/(R)/. . . . . . . . 005 205 305 405 605
The Income Fund of
America/(R)/. . . . . . . . 006 206 306 406 606
International Growth and
Income Fund/SM/ . . . . . . 034 234 334 434 634
The Investment Company of
America/(R)/. . . . . . . . 004 204 304 404 604
The New Economy Fund/(R)/ . 014 214 314 414 614
New Perspective Fund/(R)/ . 007 207 307 407 607
New World Fund/(R)/ . . . . 036 236 336 436 636
SMALLCAP World Fund/(R)/ . 035 235 335 435 635
Washington Mutual Investors
Fund/SM/ . . . . . . . . . 001 201 301 401 601
BOND FUNDS
American Funds Short-Term
Tax-Exempt Bond Fund/SM/ . 039 N/A N/A 439 639
American High-Income
Municipal Bond Fund/(R)/ . 040 240 340 440 640
American High-Income
Trust/SM/ . . . . . . . . . 021 221 321 421 621
The Bond Fund of America/SM/ 008 208 308 408 608
Capital World Bond Fund/(R)/ 031 231 331 431 631
Intermediate Bond Fund of
America/SM/ . . . . . . . . 023 223 323 423 623
Limited Term Tax-Exempt Bond
Fund of America/SM/ . . . . 043 243 343 443 643
Short-Term Bond Fund of
America/SM/ . . . . . . . . 048 248 348 448 648
The Tax-Exempt Bond Fund of
America/(R)/. . . . . . . . 019 219 319 419 619
The Tax-Exempt Fund of
California/(R)/*. . . . . . 020 220 320 420 620
The Tax-Exempt Fund of
Maryland/(R)/*. . . . . . . 024 224 324 424 624
The Tax-Exempt Fund of
Virginia/(R)/*. . . . . . . 025 225 325 425 625
U.S. Government Securities
Fund/SM/. . . . . . . . . . 022 222 322 422 622
MONEY MARKET FUNDS
American Funds Money Market
Fund/SM/ . . . . . . . . . 059 259 359 459 659
___________
*Qualified for sale only in certain jurisdictions.

U.S. Government Securities Fund -- Page 64
<PAGE>

FUND NUMBERS
----------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND 529-A 529-B 529-C 529-E 529-F-1
- -------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . 1002 1202 1302 1502 1402
American Balanced Fund . . . . 1011 1211 1311 1511 1411
American Mutual Fund . . . . . 1003 1203 1303 1503 1403
Capital Income Builder . . . . 1012 1212 1312 1512 1412
Capital World Growth and Income
Fund . . . . . . . . . . . . . 1033 1233 1333 1533 1433
EuroPacific Growth Fund . . . 1016 1216 1316 1516 1416
Fundamental Investors . . . . 1010 1210 1310 1510 1410
The Growth Fund of America . . 1005 1205 1305 1505 1405
The Income Fund of America . . 1006 1206 1306 1506 1406
International Growth and Income
Fund . . . . . . . . . . . . . 1034 1234 1334 1534 1434
The Investment Company of
America. . . . . . . . . . . . 1004 1204 1304 1504 1404
The New Economy Fund . . . . . 1014 1214 1314 1514 1414
New Perspective Fund . . . . . 1007 1207 1307 1507 1407
New World Fund . . . . . . . . 1036 1236 1336 1536 1436
SMALLCAP World Fund . . . . . 1035 1235 1335 1535 1435
Washington Mutual Investors
Fund . . . . . . . . . . . . . 1001 1201 1301 1501 1401
BOND FUNDS
American High-Income Trust . . 1021 1221 1321 1521 1421
The Bond Fund of America . . . 1008 1208 1308 1508 1408
Capital World Bond Fund . . . 1031 1231 1331 1531 1431
Intermediate Bond Fund of
America. . . . . . . . . . . . 1023 1223 1323 1523 1423
Short-Term Bond Fund of America 1048 1248 1348 1548 1448
U.S. Government Securities Fund 1022 1222 1322 1522 1422
MONEY MARKET FUND
American Funds Money Market
Fund . . . . . . . . . . . . . 1059 1259 1359 1559 1459

U.S. Government Securities Fund -- Page 65
<PAGE>

FUND NUMBERS
------------------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
FUND R-1 R-2 R-3 R-4 R-5 R-6
- -------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . . . 2102 2202 2302 2402 2502 2602
American Balanced Fund . . . . . . 2111 2211 2311 2411 2511 2611
American Mutual Fund . . . . . . . 2103 2203 2303 2403 2503 2603
Capital Income Builder . . . . . . 2112 2212 2312 2412 2512 2612
Capital World Growth and Income
Fund . . . . . . . . . . . . . . . 2133 2233 2333 2433 2533 2633
EuroPacific Growth Fund . . . . . 2116 2216 2316 2416 2516 2616
Fundamental Investors . . . . . . 2110 2210 2310 2410 2510 2610
The Growth Fund of America . . . . 2105 2205 2305 2405 2505 2605
The Income Fund of America . . . . 2106 2206 2306 2406 2506 2606
International Growth and Income
Fund . . . . . . . . . . . . . . . 2134 2234 2334 2434 2534 2634
The Investment Company of America 2104 2204 2304 2404 2504 2604
The New Economy Fund . . . . . . . 2114 2214 2314 2414 2514 2614
New Perspective Fund . . . . . . . 2107 2207 2307 2407 2507 2607
New World Fund . . . . . . . . . . 2136 2236 2336 2436 2536 2636
SMALLCAP World Fund . . . . . . . 2135 2235 2335 2435 2535 2635
Washington Mutual Investors Fund . 2101 2201 2301 2401 2501 2601
BOND FUNDS
American High-Income Trust . . . . 2121 2221 2321 2421 2521 2621
The Bond Fund of America . . . . . 2108 2208 2308 2408 2508 2608
Capital World Bond Fund . . . . . 2131 2231 2331 2431 2531 2631
Intermediate Bond Fund of America 2123 2223 2323 2423 2523 2623
Short-Term Bond Fund of America. . 2148 2248 2348 2448 2548 2648
U.S. Government Securities Fund . 2122 2222 2322 2422 2522 2622
MONEY MARKET FUNDS
American Funds Money Market Fund . 2159 2259 2359 2459 2559 2659
___________
*Qualified for sale only in certain
jurisdictions.

U.S. Government Securities Fund -- Page 66
<PAGE>

FUND NUMBERS
---------------------------------------------------
CLASS CLASS CLASS CLASS CLASS CLASS
FUND CLASS A R-1 R-2 R-3 R-4 R-5 R-6
- -------------------------------------------------------------------------------

AMERICAN FUNDS TARGET DATE RETIREMENT SERIES/(R)/
American Funds 2050 Target
Date Retirement Fund/(R)/ 069 2169 2269 2369 2469 2569 2669
American Funds 2045 Target
Date Retirement Fund/(R)/ 068 2168 2268 2368 2468 2568 2668
American Funds 2040 Target
Date Retirement Fund/(R)/ 067 2167 2267 2367 2467 2567 2667
American Funds 2035 Target
Date Retirement Fund/(R)/ 066 2166 2266 2366 2466 2566 2666
American Funds 2030 Target
Date Retirement Fund/(R)/ 065 2165 2265 2365 2465 2565 2665
American Funds 2025 Target
Date Retirement Fund/(R)/ 064 2164 2264 2364 2464 2564 2664
American Funds 2020 Target
Date Retirement Fund/(R)/ 063 2163 2263 2363 2463 2563 2663
American Funds 2015 Target
Date Retirement Fund/(R)/ 062 2162 2262 2362 2462 2562 2662
American Funds 2010 Target
Date Retirement Fund/(R)/ 061 2161 2261 2361 2461 2561 2661

U.S. Government Securities Fund -- Page 67
<PAGE>

APPENDIX

The following descriptions of debt security ratings are based on information
provided by Moody's Investors Service and Standard & Poor's Corporation.

DESCRIPTION OF BOND RATINGS

MOODY'S
LONG-TERM RATING DEFINITIONS

Aaa
Obligations rated Aaa are judged to be of the highest quality, with minimal
credit risk.

Aa
Obligations rated Aa are judged to be of high quality and are subject to very
low credit risk.

A
Obligations rated A are considered upper-medium grade and are subject to low
credit risk.

Baa
Obligations rated Baa are subject to moderate credit risk. They are considered
medium-grade and as such may possess certain speculative characteristics.

Ba
Obligations rated Ba are judged to have speculative elements and are subject to
substantial credit risk.

B
Obligations rated B are considered speculative and are subject to high credit
risk.

Caa
Obligations rated Caa are judged to be of poor standing and are subject to very
high credit risk.

Ca
Obligations rated Ca are highly speculative and are likely in, or very near,
default, with some prospect of recovery of principal and interest.

C
Obligations rated C are the lowest rated class of bonds and are typically in
default, with little prospect for recovery of principal or interest.

NOTE: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

U.S. Government Securities Fund -- Page 68
<PAGE>

STANDARD & POOR'S
LONG-TERM ISSUE CREDIT RATINGS

AAA
An obligation rated AAA has the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA
An obligation rated AA differs from the highest-rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A
An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB
An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

BB, B, CCC, CC, AND C
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.

BB
An obligation rated BB is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B
An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC
An obligation rated CCC is currently vulnerable to nonpayment and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.

CC
An obligation rated CC is currently highly vulnerable to nonpayment.

U.S. Government Securities Fund -- Page 69
<PAGE>

C
A C rating is assigned to obligations that are currently highly vulnerable to
nonpayment, obligations that have payment arrearages allowed by the terms of the
documents, or obligations of an issuer that is the subject of a bankruptcy
petition or similar action which have not experienced a payment default. Among
others, the C rating may be assigned to subordinated debt, preferred stock or
other obligations on which cash payments have been suspended in accordance with
the instrument's terms.

D
An obligation rated D is in payment default. The D rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless Standard & Poor's 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 or the taking of a similar action if
payments on an obligation are jeopardized.

PLUS (+) OR MINUS (-)
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.

FITCH
LONG-TERM CREDIT RATINGS

AAA
Highest credit quality. 'AAA' ratings denote the lowest expectation of credit
risk. They are assigned only in case of exceptionally strong capacity for
payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA
Very high credit quality. 'AA' ratings denote expectations of very low credit
risk. They indicate very strong capacity for payment of financial commitments.
This capacity is not significantly vulnerable to foreseeable events.

A
High credit quality. 'A' ratings denote expectations of low credit risk. The
capacity for payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB
Good credit quality. 'BBB' ratings indicate that there is currently expectations
of low credit risk. The capacity for payment of financial commitments is
considered adequate but adverse changes in circumstances and economic conditions
are more likely to impair this capacity. This is the lowest investment grade
category.

BB
Speculative. 'BB' ratings indicate that there is a possibility of credit risk
developing, particularly as the result of adverse economic change over time;
however, business or financial alternatives may be available to allow financial
commitments to be met. Securities rated in this category are not investment
grade.

U.S. Government Securities Fund -- Page 70
<PAGE>

B
Highly speculative.

. For issuers and performing obligations, 'B' ratings indicate that
significant credit risk is present, but a limited margin of safety
remains. Financial commitments are currently being met; however,
capacity for continued payment is contingent upon a sustained,
favorable business and economic environment.

. For individual obligations, may indicate distressed or defaulted
obligations with potential for extremely high recoveries. Such
obligations would possess a Recovery Rating of 'R1' (outstanding).

CCC

. For issuers and performing obligations, default is a real possibility.
Capacity for meeting financial commitments is solely reliant upon
sustained, favorable business or economic conditions.

. For individual obligations, may indicate distressed or defaulted
obligations with potential for average to superior levels of recovery.
Differences in credit quality may be denoted by plus/minus
distinctions. Such obligations typically would possess a Recovery
Rating of 'R2' (superior), or 'R3' (good) or 'R4' (average).

. For issuers and performing obligations, default of some kind appears
probable.

. For individual obligations, may indicate distressed or defaulted
obligations with a Recovery Rating of 'R4' (average) or 'R5' (below
average).

. For issuers and performing obligations, default is imminent.

. For individual obligations, may indicate distressed or defaulted
obligations with potential for below-average to poor recoveries. Such
obligations would possess a Recovery Rating of 'R6' (poor).

RD
Indicates an entity that has failed to make due payments (within the applicable
grace period) on some but not all material financial obligations, but continues
to honor other classes of obligations.

D
Indicates an entity or sovereign that has defaulted on all of its financial
obligations. Default generally is defined as the following:

The modifiers "+" or "-" may be appended to a rating to denote relative
status within major rating categories. Such suffixes are not added to the
'AAA' Long-term rating category, to categories below 'CCC', or to
Short-term ratings other than 'F1'. (The +/- modifiers are only used to
denote issues within the CCC category, whereas issuers are only rated CCC
without the use of modifiers.

U.S. Government Securities Fund -- Page 71
<PAGE>

DESCRIPTION OF COMMERCIAL PAPER RATINGS

MOODY'S
COMMERCIAL PAPER RATINGS (HIGHEST THREE RATINGS)

P-1
Issuers (or supporting institutions) rated Prime-1 have a superior ability to
repay short-term debt obligations.

P-2
Issuers (or supporting institutions) rated Prime-2 have a strong ability to
repay short-term debt obligations.

P-3
Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to
repay short-term obligations.

STANDARD & POOR'S
COMMERCIAL PAPER RATINGS (HIGHEST THREE RATINGS)

A-1
A short-term obligation rated A-1 is rated in the highest category by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is strong. Within this category, certain obligations are designated
with a plus sign (+). This indicates that the obligor's capacity to meet its
financial commitment on these obligations is extremely strong.

A-2
A short-term obligation rated A-2 is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.

A-3
A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

U.S. Government Securities Fund -- Page 72

Statement of assets and liabilities
at August 31, 2009		(dollars in thousands)

Assets:
Investment securities, at value (cost: $7,148,456)		$7,369,031
Cash		202
Receivables for:
Sales of investments	$76,772
Sales of fund's shares	24,380
Interest	34,613	135,765
		7,504,998
Liabilities:
Payables for:
Purchases of investments	168,326
Repurchases of fund's shares	24,329
Dividends on fund's shares	3,001
Investment advisory services	1,546
Services provided by affiliates	5,680
Trustees' deferred compensation	145
Other	566	203,593
Net assets at August 31, 2009		$7,301,405

Net assets consist of:
Capital paid in on shares of beneficial interest		$7,081,275
Distributions in excess of net investment income		(319)
Distributions in excess of net realized gain		(126)
Net unrealized appreciation		220,575
Net assets at August 31, 2009		$7,301,405

(dollars and shares in thousands, except per-share amounts)
Shares of beneficial interest issued and outstanding (no stated par value) - unlimited shares authorized (517,631 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*
Class A	$	4,745,077		336,401	$	14.11
Class B		356,303		25,260		14.11
Class C		685,685		48,611		14.11
Class F-1		185,496		13,151		14.11
Class F-2		56,806		4,027		14.11
Class 529-A		145,156		10,291		14.11
Class 529-B		25,553		1,811		14.11
Class 529-C		78,352		5,555		14.11
Class 529-E		8,813		625		14.11
Class 529-F-1		8,812		625		14.11
Class R-1		14,121		1,001		14.11
Class R-2		203,873		14,453		14.11
Class R-3		173,828		12,323		14.11
Class R-4		158,558		11,241		14.11
Class R-5		51,267		3,635		14.11
Class R-6		403,705		28,621		14.11

(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Classes A and 529-A, for which the maximum offering prices per share were $14.66 each.

See Notes to Financial Statements

Statement of operations
for the year ended August 31, 2009	(dollars in thousands)

Investment income:
Income:
Interest				$	268,889

Fees and expenses*:
Investment advisory services	$	18,125
Distribution services		26,688
Transfer agent services		5,866
Administrative services		3,550
Reports to shareholders		362
Registration statement and prospectus		1,602
Trustees' compensation		46
Auditing and legal		107
Custodian		38
State and local taxes		40
Other		403
Total fees and expenses before reimbursements/waivers		56,827
Less reimbursements/waivers of fees and expenses:
Investment advisory services		528
Administrative services		78
Total fees and expenses after reimbursements/waivers					56,221
Net investment income					212,668

Netrealized gain andunrealized appreciation on investments:
Net realized gain on investments					40,528
Net unrealized appreciation on investments					226,988
Net realized gain and unrealized appreciation on investments					267,516
Net increase in net assets resulting from operations				$	480,184

(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.

See Notes to Financial Statements



Statements of changes in net assets		(dollars in thousands)

	Year ended August 31
	2009			2008
Operations:
Net investment income	$	212,668		$	126,323
Net realized gain on investments		40,528			24,821
Net unrealized appreciation on investments		226,988			715
Net increase in net assets resulting from operations		480,184			151,859

Dividends paid or accrued to shareholders from net investment income		(220,836	)		(127,252	)

Net capital share transactions		3,081,256			1,366,130

Total increase in net assets		3,340,604			1,390,737

Net assets:
Beginning of year		3,960,801			2,570,064
End of year (including distributions in excess of
net investment income: $(319) and $(170), respectively)	$	7,301,405		$	3,960,801


See Notes to Financial Statements

(dollars in thousands)
Undistributed ordinary income	$	18,716
Post-October capital loss deferrals (realized during the period November 1, 2008, through August 31, 2009)*		(10,425	)
Gross unrealized appreciation on investment securities		217,849
Gross unrealized depreciation on investment securities		(2,864	)
Net unrealized appreciation on investment securities		214,985
Cost of investment securities		7,154,046
*These deferrals are considered incurred in the subsequent year.

	Year ended August 31
Share class	2009		2008
Class A	$	156,462	$	87,199
Class B		8,902		5,959
Class C		15,415		5,823
Class F-1		7,423		5,126
Class F-2*		728		2
Class 529-A		3,915		2,227
Class 529-B		552		469
Class 529-C		1,532		1,053
Class 529-E		218		152
Class 529-F-1		267		176
Class R-1		334		205
Class R-2		4,333		3,865
Class R-3		4,529		3,946
Class R-4		3,979		3,385
Class R-5		8,415		7,665
Class R-6†		3,832		-
Total	$	220,836	$	127,252


*Class F-2 was offered beginning August 1, 2008.
†Class R-6 was offered beginning May 1, 2009.

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Classes A and 529-A	Up to 3.75%	None (except 1% for certain redemptions within one year of purchase without an initial sales charge)	None
Classes B and 529-B*	None	Declines from 5% to 0% for redemptions within six years of purchase	Classes B and 529-B convert to Classes A and 529-A, respectively, after eight years
Class C	None	1% for redemptions within one year of purchase	Class C converts to Class F-1 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Classes F-1, F-2 and 529-F-1	None	None	None
Classes R-1, R-2, R-3, R-4, R-5 and R-6	None	None	None

Share class	Currently approved limits	Plan limits
Class A	0.30%	0.30%
Class 529-A	0.30	0.50
Classes B and 529-B	1.00	1.00
Classes C, 529-C and R-1	1.00	1.00
Class R-2	0.75	1.00
Classes 529-E and R-3	0.50	0.75
Classes F-1, 529-F-1 and R-4	0.25	0.50

Investment securities:	Level 1		Level 2		Level 3		Total
Bonds & notes:
U.S. Treasury bonds & notes	$	-	$	3,446,059	$	-	$	3,446,059
Mortgage-backed obligations		-		3,105,960		49,572		3,155,532
Federal agency bonds & notes		-		574,494		-		574,494
Asset-backed obligations		-		58,755		-		58,755
Short-term securities		-		134,191		-		134,191
Total	$	-	$	7,319,459	$	49,572	$	7,369,031

The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the year ended August 31, 2009 (dollars in thousands):

	Beginning						Net transfers		Ending
	value		Net		Net unrealized		into		value
	at 9/1/2008		purchases		appreciation(*)		Level 3		at 8/31/2009
Investment securities	$	-	$	22,676	$	620	$	26,276	$	49,572

Net unrealized appreciation during the period on Level 3 investment securities held at August 31, 2009 (dollars in thousands)(*):									$	620

(*)Net unrealized appreciation is included in the related amounts on investments in the statement of operations.

Share class	Sales(1)				Reinvestments of dividends				Repurchases(1)						Net increase (decrease)
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended August 31, 2009
Class A	$	5,297,274		383,500	$	144,606		10,378	$	(3,475,366	)		(249,425	)	$	1,966,514			144,453
Class B		327,707		23,746		8,159		586		(195,600	)		(14,039	)		140,266			10,293
Class C		835,237		60,392		13,936		999		(428,802	)		(30,752	)		420,371			30,639
Class F-1		292,639		21,225		6,137		441		(264,696	)		(18,993	)		34,080			2,673
Class F-2		80,015		5,766		587		42		(25,738	)		(1,838	)		54,864			3,970
Class 529-A		109,813		7,922		3,869		278		(40,830	)		(2,924	)		72,852			5,276
Class 529-B		14,116		1,017		547		39		(5,991	)		(429	)		8,672			627
Class 529-C		58,672		4,223		1,516		109		(23,710	)		(1,698	)		36,478			2,634
Class 529-E		6,582		474		216		16		(2,944	)		(211	)		3,854			279
Class 529-F-1		6,051		438		262		19		(2,764	)		(198	)		3,549			259
Class R-1		15,892		1,146		325		23		(11,254	)		(804	)		4,963			365
Class R-2		154,432		11,107		4,270		307		(97,606	)		(7,016	)		61,096			4,398
Class R-3		142,827		10,272		4,483		322		(97,415	)		(6,994	)		49,895			3,600
Class R-4		122,042		8,748		3,957		284		(63,003	)		(4,511	)		62,996			4,521
Class R-5		185,632		13,344		8,203		590		(435,023	)		(31,039	)		(241,188	)		(17,105	)
Class R-6(2)		399,827		28,466		3,752		268		(1,585	)		(113	)		401,994			28,621
Total net increase
(decrease)	$	8,048,758		581,786	$	204,825		14,701	$	(5,172,327	)		(370,984	)	$	3,081,256			225,503

Year ended August 31, 2008
Class A	$	1,499,821		109,722	$	79,245		5,830	$	(751,724	)		(55,277	)	$	827,342			60,275
Class B		89,751		6,554		5,436		400		(51,555	)		(3,792	)		43,632			3,162
Class C		188,535		13,792		5,285		389		(75,769	)		(5,576	)		118,051			8,605
Class F-1		114,287		8,367		3,926		289		(76,162	)		(5,606	)		42,051			3,050
Class F-2(3)		775		57		1		-		-			-			776			57
Class 529-A		30,432		2,231		2,215		163		(9,664	)		(711	)		22,983			1,683
Class 529-B		3,974		291		467		34		(1,888	)		(139	)		2,553			186
Class 529-C		18,428		1,353		1,048		77		(7,576	)		(558	)		11,900			872
Class 529-E		1,591		116		151		11		(616	)		(45	)		1,126			82
Class 529-F-1		1,982		145		175		13		(476	)		(35	)		1,681			123
Class R-1		6,897		506		199		15		(3,311	)		(242	)		3,785			279
Class R-2		74,308		5,440		3,826		281		(45,644	)		(3,356	)		32,490			2,365
Class R-3		79,304		5,818		3,918		288		(53,806	)		(3,954	)		29,416			2,152
Class R-4		42,799		3,126		3,379		248		(30,448	)		(2,238	)		15,730			1,136
Class R-5		231,550		16,999		7,555		556		(26,491	)		(1,944	)		212,614			15,611
Total net increase
(decrease)	$	2,384,434		174,517	$	116,826		8,594	$	(1,135,130	)		(83,473	)	$	1,366,130			99,638


(1)Includes exchanges between share classes of the fund.
(2)Class R-6 was offered beginning May 1, 2009.
(3)Class F-2 was offered beginning August 1, 2008.

			Income from investment operations(2)
	Net asset value, beginning of period		Net investment income		Net gains (losses) on securities (both realized and unrealized)			Total from investment operations		Dividends (from net investment income)			Net asset value, end of period		Total return(3) (4)			Net assets, end of period (in millions)		Ratio of expenses to average net assets before reimbursements/ waivers			Ratio of expenses to average net assets after reimbursements/ waivers(4)			Ratio of net income to average net assets(4)
Class A:
Year ended 8/31/2009	$	13.56	$	.42	$	.57		$	.99	$	(.44	)	$	14.11		7.43	%	$	4,745		.64	%		.63	%		3.05	%
Year ended 8/31/2008		13.35		.54		.22			.76		(.55	)		13.56		5.73			2,602		.77			.74			3.95
Year ended 8/31/2007		13.32		.59		.03			.62		(.59	)		13.35		4.72			1,758		.79			.76			4.38
Year ended 8/31/2006		13.72		.52		(.39	)		.13		(.53	)		13.32		1.04			1,685		.77			.74			3.89
Year ended 8/31/2005		13.74		.44		-	(5)		.44		(.46	)		13.72		3.23			1,801		.76			.74			3.17
Class B:
Year ended 8/31/2009		13.56		.32		.57			.89		(.34	)		14.11		6.64			356		1.39			1.38			2.31
Year ended 8/31/2008		13.35		.44		.22			.66		(.45	)		13.56		4.99			203		1.46			1.44			3.27
Year ended 8/31/2007		13.32		.49		.03			.52		(.49	)		13.35		3.99			158		1.51			1.47			3.66
Year ended 8/31/2006		13.72		.43		(.39	)		.04		(.44	)		13.32		.32			169		1.49			1.46			3.17
Year ended 8/31/2005		13.74		.34		-	(5)		.34		(.36	)		13.72		2.51			196		1.48			1.46			2.45
Class C:
Year ended 8/31/2009		13.56		.31		.57			.88		(.33	)		14.11		6.59			686		1.43			1.42			2.24
Year ended 8/31/2008		13.35		.43		.22			.65		(.44	)		13.56		4.95			244		1.50			1.47			3.19
Year ended 8/31/2007		13.32		.49		.03			.52		(.49	)		13.35		3.94			125		1.55			1.52			3.62
Year ended 8/31/2006		13.72		.42		(.39	)		.03		(.43	)		13.32		.27			109		1.55			1.52			3.11
Year ended 8/31/2005		13.74		.33		-	(5)		.33		(.35	)		13.72		2.45			120		1.53			1.51			2.40
Class F-1:
Year ended 8/31/2009		13.56		.42		.57			.99		(.44	)		14.11		7.42			185		.65			.65			3.05
Year ended 8/31/2008		13.35		.54		.22			.76		(.55	)		13.56		5.79			142		.70			.67			4.01
Year ended 8/31/2007		13.32		.60		.03			.63		(.60	)		13.35		4.80			99		.72			.69			4.44
Year ended 8/31/2006		13.72		.53		(.39	)		.14		(.54	)		13.32		1.10			76		.71			.68			3.98
Year ended 8/31/2005		13.74		.44		-	(5)		.44		(.46	)		13.72		3.24			54		.75			.73			3.18
Class F-2:
Year ended 8/31/2009		13.56		.46		.57			1.03		(.48	)		14.11		7.67			57		.41			.41			3.24
Period from 8/7/2008 to 8/31/2008		13.48		.03		.08			.11		(.03	)		13.56		.85			1		.03			.03			.25
Class 529-A:
Year ended 8/31/2009		13.56		.42		.57			.99		(.44	)		14.11		7.37			145		.70			.69			2.99
Year ended 8/31/2008		13.35		.53		.22			.75		(.54	)		13.56		5.70			68		.79			.76			3.93
Year ended 8/31/2007		13.32		.58		.03			.61		(.58	)		13.35		4.66			44		.84			.81			4.33
Year ended 8/31/2006		13.72		.52		(.39	)		.13		(.53	)		13.32		1.00			39		.81			.78			3.86
Year ended 8/31/2005		13.74		.43		-	(5)		.43		(.45	)		13.72		3.18			38		.81			.79			3.13
Class 529-B:
Year ended 8/31/2009		13.56		.30		.57			.87		(.32	)		14.11		6.51			25		1.51			1.50			2.19
Year ended 8/31/2008		13.35		.42		.22			.64		(.43	)		13.56		4.85			16		1.60			1.57			3.14
Year ended 8/31/2007		13.32		.48		.03			.51		(.48	)		13.35		3.85			13		1.64			1.60			3.53
Year ended 8/31/2006		13.72		.41		(.39	)		.02		(.42	)		13.32		.19			13		1.63			1.60			3.03
Year ended 8/31/2005		13.74		.32		-	(5)		.32		(.34	)		13.72		2.34			14		1.65			1.63			2.29
Class 529-C:
Year ended 8/31/2009		13.56		.31		.57			.88		(.33	)		14.11		6.52			78		1.50			1.49			2.19
Year ended 8/31/2008		13.35		.42		.22			.64		(.43	)		13.56		4.87			40		1.58			1.55			3.14
Year ended 8/31/2007		13.32		.48		.03			.51		(.48	)		13.35		3.86			27		1.63			1.60			3.54
Year ended 8/31/2006		13.72		.41		(.39	)		.02		(.42	)		13.32		.20			24		1.62			1.59			3.06
Year ended 8/31/2005		13.74		.32		-	(5)		.32		(.34	)		13.72		2.35			23		1.64			1.61			2.30
Class 529-E:
Year ended 8/31/2009		13.56		.38		.57			.95		(.40	)		14.11		7.07			9		.99			.98			2.71
Year ended 8/31/2008		13.35		.49		.22			.71		(.50	)		13.56		5.40			5		1.07			1.04			3.66
Year ended 8/31/2007		13.32		.54		.03			.57		(.54	)		13.35		4.38			4		1.12			1.09			4.05
Year ended 8/31/2006		13.72		.48		(.39	)		.09		(.49	)		13.32		.73			3		1.09			1.06			3.60
Year ended 8/31/2005		13.74		.39		-	(5)		.39		(.41	)		13.72		2.88			3		1.11			1.09			2.83

Class 529-F-1:
Year ended 8/31/2009	$	13.56	$	.45	$	.57		$	1.02	$	(.47	)	$	14.11		7.59	%	$	9		.50	%		.49	%		3.21	%
Year ended 8/31/2008		13.35		.56		.22			.78		(.57	)		13.56		5.93			5		.57			.54			4.15
Year ended 8/31/2007		13.32		.61		.03			.64		(.61	)		13.35		4.90			3		.62			.59			4.56
Year ended 8/31/2006		13.72		.54		(.39	)		.15		(.55	)		13.32		1.20			2		.60			.57			4.09
Year ended 8/31/2005		13.74		.43		-	(5)		.43		(.45	)		13.72		3.20			2		.78			.75			3.18
Class R-1:
Year ended 8/31/2009		13.56		.31		.57			.88		(.33	)		14.11		6.57			14		1.45			1.45			2.24
Year ended 8/31/2008		13.35		.43		.22			.65		(.44	)		13.56		4.89			9		1.56			1.53			3.16
Year ended 8/31/2007		13.32		.48		.03			.51		(.48	)		13.35		3.89			5		1.65			1.57			3.57
Year ended 8/31/2006		13.72		.42		(.39	)		.03		(.43	)		13.32		.30			4		1.63			1.49			3.17
Year ended 8/31/2005		13.74		.33		-	(5)		.33		(.35	)		13.72		2.46			3		1.66			1.50			2.43
Class R-2:
Year ended 8/31/2009		13.56		.31		.57			.88		(.33	)		14.11		6.58			204		1.49			1.44			2.26
Year ended 8/31/2008		13.35		.44		.22			.66		(.45	)		13.56		4.97			136		1.61			1.46			3.24
Year ended 8/31/2007		13.32		.49		.03			.52		(.49	)		13.35		3.98			103		1.73			1.48			3.66
Year ended 8/31/2006		13.72		.43		(.39	)		.04		(.44	)		13.32		.32			94		1.93			1.47			3.18
Year ended 8/31/2005		13.74		.34		-	(5)		.34		(.36	)		13.72		2.50			85		1.94			1.47			2.46
Class R-3:
Year ended 8/31/2009		13.56		.37		.57			.94		(.39	)		14.11		7.02			174		1.03			1.02			2.68
Year ended 8/31/2008		13.35		.49		.22			.71		(.50	)		13.56		5.40			118		1.07			1.04			3.67
Year ended 8/31/2007		13.32		.54		.03			.57		(.54	)		13.35		4.39			88		1.11			1.08			4.05
Year ended 8/31/2006		13.72		.48		(.39	)		.09		(.49	)		13.32		.69			107		1.20			1.09			3.56
Year ended 8/31/2005		13.74		.39		-	(5)		.39		(.41	)		13.72		2.88			91		1.20			1.08			2.84
Class R-4:
Year ended 8/31/2009		13.56		.42		.57			.99		(.44	)		14.11		7.39			159		.69			.68			3.02
Year ended 8/31/2008		13.35		.54		.22			.76		(.55	)		13.56		5.77			91		.72			.69			4.02
Year ended 8/31/2007		13.32		.59		.03			.62		(.59	)		13.35		4.79			75		.72			.69			4.50
Year ended 8/31/2006		13.72		.53		(.39	)		.14		(.54	)		13.32		1.06			21		.75			.72			3.96
Year ended 8/31/2005		13.74		.44		-	(5)		.44		(.46	)		13.72		3.25			13		.74			.72			3.21
Class R-5:
Year ended 8/31/2009		13.56		.46		.57			1.03		(.48	)		14.11		7.71			51		.38			.37			3.37
Year ended 8/31/2008		13.35		.58		.22			.80		(.59	)		13.56		6.10			281		.41			.38			4.26
Year ended 8/31/2007		13.32		.63		.03			.66		(.63	)		13.35		5.07			68		.45			.41			4.79
Year ended 8/31/2006		13.72		.56		(.39	)		.17		(.57	)		13.32		1.36			10		.45			.42			4.24
Year ended 8/31/2005		13.74		.48		-	(5)		.48		(.50	)		13.72		3.56			8		.43			.41			3.50
Class R-6:
Period from 5/1/2009 to 8/31/2009		14.07		.15		.05			.20		(.16	)		14.11		1.41			404		.11			.11			1.10

(1)Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.
(2)Based on average shares outstanding.
(3)Total returns exclude any applicable sales charges, including contingent deferred sales charges.
(4)This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services. In addition, during some of the periods shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes.
(5)Amount less than $.01.

See Notes to Financial Statements

	(1) Name and Principal Business Address	(2) Positions and Offices with Underwriter	(3) Positions and Offices with Registrant
LAO	David L. Abzug	Vice President	None
IRV	Laurie M. Allen	Senior Vice President	None
LAO	William C. Anderson	Vice President	None
LAO	Robert B. Aprison	Senior Vice President	None
LAO	T. Patrick Bardsley	Regional Vice President	None
LAO	Shakeel A. Barkat	Vice President	None
LAO	Thomas M. Bartow	Senior Vice President	None
IRV	Carl R. Bauer	Vice President	None
LAO	Michelle A. Bergeron	Senior Vice President	None
LAO	J. Walter Best, Jr.	Senior Vice President	None
LAO	Roger J. Bianco, Jr.	Regional Vice President	None
LAO	John A. Blanchard	Senior Vice President	None
LAO	Randall L. Blanchetti	Regional Vice President	None
LAO	Gerard M. Bockstie, Jr.	Regional Vice President	None
LAO	Jonathan W. Botts	Regional Vice President	None
LAO	Bill Brady	Director, Senior Vice President	None
LAO	Mick L. Brethower	Senior Vice President	None
LAO	C. Alan Brown	Vice President	None
IRV	William H. Bryan	Regional Vice President	None
LAO	Sheryl M. Burford	Assistant Vice President	None
LAO	Steven Calabria	Vice President	None
LAO	Thomas E. Callahan	Regional Vice President	None
SNO	Kathleen D. Campbell	Vice President	None
LAO	Damian F. Carroll	Director, Vice President	None
LAO	James D. Carter	Regional Vice President	None
LAO	Brian C. Casey	Senior Vice President	None
LAO	Victor C. Cassato	Senior Vice President	None
LAO	Christopher J. Cassin	Senior Vice President	None
LAO	Denise M. Cassin	Director, Senior Vice President and Director of AFIG and Dealer Relations	None
LAO	David D. Charlton	Director, Senior Vice President and Director Individual Investor and Advisory Business	None
LAO	Thomas M. Charon	Vice President	None
LAO	Wellington Choi	Vice President	None
LAO	Paul A. Cieslik	Vice President	None
LAO	Kevin G. Clifford	Director, President and Chief Executive Officer	None
LAO	Ruth M. Collier	Senior Vice President	None
LAO	Charles H. Cote	Regional Vice President	None
LAO	Michael D. Cravotta	Assistant Vice President	None
LAO	Joseph G. Cronin	Vice President	None
LAO	D. Erick Crowdus	Regional Vice President	None
LAO	William F. Daugherty	Vice President	None
LAO	Peter J. Deavan	Regional Vice President	None
LAO	Daniel J. Delianedis	Senior Vice President	None
LAO	James W. DeLouise	Assistant Vice President	None
LAO	James A. DePerno, Jr.	Senior Vice President	None
LAO	Bruce L. DePriester	Director, Senior Vice President, Treasurer and Controller	None
LAO	Dianne M. Dexter	Assistant Vice President	None
LAO	Thomas J. Dickson	Vice President	None
NYO	Dean M. Dolan	Vice President	None
LAO	Hedy B. Donahue	Assistant Vice President	None
LAO	Michael J. Downer	Director	None
LAO	Craig A. Duglin	Regional Vice President	None
IND	Lloyd G. Edwards	Senior Vice President	None
LAO	Timothy L. Ellis	Senior Vice President	None
LAO	Lorna Fitzgerald	Vice President	None
LAO	William F. Flannery	Vice President	None
LAO	John R. Fodor	Director, Executive Vice President	None
SNO	Michael J. Franchella	Assistant Vice President	None
LAO	Charles L. Freadhoff	Vice President	None
LAO	Daniel B. Frick	Vice President	None
LAO	J. Christopher Gies	Senior Vice President	None
LAO	David M. Givner	Secretary	None
LAO	Jack E. Goldin	Regional Vice President	None
LAO	Earl C. Gottschalk	Vice President	None
LAO	Jeffrey J. Greiner	Director, Senior Vice President	None
LAO	Eric M. Grey	Vice President	None
NYO	Maura S. Griffin	Assistant Vice President	None
LAO	Christopher M. Guarino	Senior Vice President	None
IRV	Steven Guida	Director, Senior Vice President	None
LAO	Derek S. Hansen	Vice President	None
LAO	Calvin L. Harrelson, III	Vice President	None
LAO	Robert J. Hartig, Jr.	Vice President	None
LAO	Craig W. Hartigan	Regional Vice President	None
LAO	Linda M. Hines	Vice President	None
LAO	Russell K. Holliday	Vice President	None
LAO	Heidi Horwitz-Marcus	Regional Vice President	None
LAO	Kevin B. Hughes	Vice President	None
LAO	Marc Ialeggio	Vice President	None
HRO	Jill Jackson-Chavis	Vice President	None
IND	David K. Jacocks	Assistant Vice President	None
LAO	Linda Johnson	Vice President	None
GVO-1	Joanna F. Jonsson	Director	None
IRV	Damien M. Jordan	Senior Vice President	None
LAO	Marc J. Kaplan	Vice President	None
LAO	John P. Keating	Senior Vice President	None
LAO	Brian G. Kelly	Regional Vice President	None
LAO	Ryan C. Kidwell	Regional Vice President	None
LAO	Mark Kistler	Regional Vice President	None
NYO	Dorothy Klock	Vice President	None
IRV	Elizabeth K. Koster	Vice President	None
LAO	Christopher F. Lanzafame	Regional Vice President	None
IRV	Laura Lavery	Vice President	None
LAO	R. Andrew LeBlanc	Vice President	None
LAO	Clay M. Leveritt	Regional Vice President	None
LAO	Susan B. Lewis	Assistant Vice President	None
LAO	T. Blake Liberty	Vice President	None
LAO	Lorin E. Liesy	Vice President	None
LAO	Louis K. Linquata	Vice President	None
HRO	Maria M. Lockard	Assistant Vice President	None
LAO	Brendan T. Mahoney	Vice President	None
LAO	Nathan G. Mains	Regional Vice President	None
LAO	Stephen A. Malbasa	Director, Senior Vice President and Director of Retirement Plan Business	None
LAO	Paul R. Mayeda	Assistant Vice President	None
LAO	Eleanor P. Maynard	Vice President	None
LAO	Joseph A. McCreesh, III	Regional Vice President	None
LAO	Will McKenna	Vice President	None
SNO	John V. McLaughlin	Senior Vice President	None
LAO	Scott M. Meade	Senior Vice President	None
LAO	Daniel P. Melehan	Regional Vice President	None
LAO	William T. Mills	Regional Vice President	None
LAO	James R. Mitchell III	Regional Vice President	None
LAO	Charles L. Mitsakos	Regional Vice President	None
LAO	Monty L. Moncrief	Vice President	None
LAO	David H. Morrison	Regional Vice President	None
LAO	Andrew J. Moscardini	Vice President	None
LAO	Brian D. Munson	Regional Vice President	None
LAO	Jon Christian Nicolazzo	Regional Vice President	None
LAO	Jack Nitowitz	Assistant Vice President	None
LAO	William E. Noe	Senior Vice President	None
LAO	Matthew P. O’Connor	Vice President	None
LAO	Jonathan H. O’Flynn	Regional Vice President	None
LAO	Eric P. Olson	Senior Vice President	None
LAO	Jeffrey A. Olson	Vice President	None
LAO	Thomas A. O’Neil	Regional Vice President	None
LAO	Shawn M. O’Sullivan	Regional Vice President	None
LAO	Michael W. Pak	Regional Vice President	None
LAO	W. Burke Patterson, Jr.	Vice President	None
LAO	Gary A. Peace	Senior Vice President	None
LAO	Samuel W. Perry	Vice President	None
LAO	David K. Petzke	Senior Vice President	None
IRV	John H. Phelan, Jr.	Director	None
LAO	John Pinto	Vice President	None
LAO	Carl S. Platou	Senior Vice President	None
LAO	Charles R. Porcher	Regional Vice President	None
LAO	Julie K. Prather	Vice President	None
SNO	Richard P. Prior	Vice President	None
LAO	Steven J. Quagrello	Regional Vice President	None
LAO	Mike Quinn	Vice President	None
SNO	John P. Raney	Assistant Vice President	None
LAO	James P. Rayburn	Regional Vice President	None
LAO	Rene M. Reincke	Vice President	None
LAO	Steven J. Reitman	Senior Vice President	None
LAO	Jeffrey Robinson	Regional Vice President	None
LAO	Suzette M. Rothberg	Regional Vice President	None
LAO	James F. Rothenberg	Non-Executive Chairman and Director	None
LAO	Romolo D. Rottura	Vice President	None
LAO	William M. Ryan	Regional Vice President	None
LAO	Dean B. Rydquist	Director, Senior Vice President, Chief Compliance Officer	None
LAO	Richard A. Sabec, Jr.	Vice President	None
HRO	Diane Sawyer	Senior Vice President	None
LAO	Joseph D. Scarpitti	Senior Vice President	None
IRV	MaryAnn Scarsone	Assistant Vice President	None
LAO	Kim D. Schmidt	Assistant Vice President	None
LAO	Shane D. Schofield	Vice President	None
LAO	David L. Schroeder	Assistant Vice President	None
LAO	Mark A. Seaman	Vice President	None
LAO	James J. Sewell III	Regional Vice President	None
LAO	Arthur M. Sgroi	Vice President	None
LAO	Steven D. Shackelford	Regional Vice President	None
LAO	Michael J. Sheldon	Vice President	None
LAO	Daniel S. Shore	Vice President	None
LAO	Brad Short	Vice President	None
LAO	Nathan W. Simmons	Regional Vice President	None
LAO	Connie F. Sjursen	Vice President	None
LAO	Jerry L. Slater	Senior Vice President	None
SNO	Stacy D. Smolka	Assistant Vice President	None
LAO	J. Eric Snively	Regional Vice President	None
LAO	Therese L. Soullier	Vice President	None
LAO	Kristen J. Spazafumo	Vice President	None
LAO	Mark D. Steburg	Vice President	None
LAO	Michael P. Stern	Regional Vice President	None
LAO	Brad Stillwagon	Vice President	None
LAO	Craig R. Strauser	Senior Vice President	None
LAO	Libby J. Syth	Vice President	None
LAO	Drew W. Taylor	Senior Vice President	None
LAO	Gary J. Thoma	Vice President	None
LAO	Cynthia M. Thompson	Vice President	None
LAO	David R. Therrien	Assistant Vice President	None
LAO	John B. Thomas	Regional Vice President	None
LAO	Mark R. Threlfall	Regional Vice President	None
LAO	David Tippets	Regional Vice President	None
IND	James P. Toomey	Vice President	None
LAO	Luke N. Trammel	Regional Vice President	None
IND	Christopher E. Trede	Vice President	None
LAO	Scott W. Ursin-Smith	Senior Vice President	None
SNO	Cindy Vaquiax	Vice President	None
LAO	Srinkanth Vemuri	Regional Vice President	None
LAO	J. David Viale	Senior Vice President	None
DCO	Bradley J. Vogt	Director	None
LAO	Sherrie S. Walling	Assistant Vice President	None
SNO	Chris L. Wammack	Assistant Vice President	None
LAO	Thomas E. Warren	Senior Vice President	None
LAO	Gregory J. Weimer	Senior Vice President	None
SFO	Gregory W. Wendt	Director	None
LAO	George J. Wenzel	Vice President	None
LAO	Jason M. Weybrecht	Regional Vice President	None
LAO	Brian E. Whalen	Vice President	None
LAO	William C. Whittington	Regional Vice President	None
LAO	N. Dexter Williams, Jr.	Senior Vice President	None
LAO	Andrew L. Wilson	Vice President	None
LAO	Steven C. Wilson	Regional Vice President	None
LAO	Timothy J. Wilson	Director, Senior Vice President	None
LAO	Kurt A. Wuestenberg	Vice President	None
LAO	William R. Yost	Senior Vice President	None
LAO	Jason P. Young	Vice President	None
LAO	Jonathan A. Young	Regional Vice President	None

DCO	Business Address, 3000 K Street N.W., Suite 230, Washington, DC 20007-5140
GVO-1	Business Address, 3 Place des Bergues, 1201 Geneva, Switzerland
HRO	Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
IND	Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
IRV	Business Address, 6455 Irvine Center Drive, Irvine, CA 92618
LAO	Business Address, 333 South Hope Street, Los Angeles, CA 90071
LAO-W	Business Address, 11100 Santa Monica Blvd., 15th Floor, Los Angeles, CA 90025
NYO	Business Address, 630 Fifth Avenue, 36th Floor, New York, NY 10111
SFO	Business Address, One Market, Steuart Tower, Suite 1800, San Francisco, CA 94105
SNO	Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251

	Signature	Title
(1)	Principal Executive Officer:
	/s/ John H. Smet________________________	President and Trustee
	(John H. Smet)

(2)	Principal Financial Officer and Principal Accounting Officer:
	/s/ Ari M. Vinocor _______________________	Treasurer
	(Ari M. Vinocor)

(3)	Trustees:
	Richard G. Capen, Jr.*	Trustee
	H. Frederick Christie*	Trustee
	James G. Ellis*	Trustee
	Martin Fenton*	Chairman of the Board (Independent and Non-Executive)
	Leonard R. Fuller*	Trustee
	/s/ Abner D. Goldstine_________________ __	Vice Chairman and Trustee
	(Abner D. Goldstine)
	/s/ Paul G. Haaga, Jr. ______________ _____	Vice Chairman and Trustee
	(Paul G. Haaga, Jr.)
	R. Clark Hooper*	Trustee
	Richard G. Newman*	Trustee
	Frank M. Sanchez*	Trustee
	/s/ John H. Smet __________ _________	President and Trustee
	(John H. Smet)
	Steadman Upham*	Trustee
	*By: /s/ Kimberly S. Verdick____ _____ _____
	(Kimberly S. Verdick, pursuant to a power of attorney filed herewith)

Bonds & notes — 99.09%	Principal amount (000)		Value (000)

U.S. TREASURY BONDS & NOTES — 47.20%
U.S. Treasury 1.25% 2010	$	10,000	$	10,090
U.S. Treasury 2.00% 2010		26,650		26,882
U.S. Treasury 2.00% 2010		25,000		25,415
U.S. Treasury 5.75% 2010		14,435		15,165
U.S. Treasury 6.50% 2010		10,000		10,283
U.S. Treasury 0.875% 2011		20,000		20,069
U.S. Treasury 1.125% 2011		20,000		19,978
U.S. Treasury 1.125% 2011		7,500		7,534
U.S. Treasury 2.375% 20111,2		27,486		28,167
U.S. Treasury 4.50% 2011		15,625		16,517
U.S. Treasury 4.625% 2011		20,500		22,117
U.S. Treasury 4.875% 2011		51,750		55,381
U.S. Treasury 1.50% 2012		100,840		101,049
U.S. Treasury 1.75% 2012		61,000		61,484
U.S. Treasury 3.00% 20121,2		38,378		40,401
U.S. Treasury 4.25% 2012		29,825		32,305
U.S. Treasury 4.875% 2012		8,825		9,609
U.S. Treasury 1.875% 20131,2		17,611		17,952
U.S. Treasury 3.125% 2013		81,500		85,139
U.S. Treasury 3.125% 2013		23,000		24,018
U.S. Treasury 3.375% 2013		15,000		15,838
U.S. Treasury 3.50% 2013		28,890		30,646
U.S. Treasury 3.625% 2013		20,000		21,298
U.S. Treasury 3.875% 2013		33,720		36,201
U.S. Treasury 1.75% 2014		53,250		52,339
U.S. Treasury 1.875% 2014		8,425		8,310
U.S. Treasury 2.25% 2014		310,200		309,474
U.S. Treasury 2.00% 20141,2		41,254		42,109
U.S. Treasury 2.00% 20141,2		17,160		17,535
U.S. Treasury 2.625% 2014		250,000		253,290
U.S. Treasury 2.625% 2014		62,000		62,738
U.S. Treasury 4.00% 2014		56,750		61,210
U.S. Treasury 4.25% 2014		31,225		33,973
U.S. Treasury 4.25% 2014		20,000		21,772
U.S. Treasury 1.875% 20151,2		43,679		44,323
U.S. Treasury 4.25% 2015		10,000		10,844
U.S. Treasury 9.875% 2015		7,000		9,828