N-Q 1 gvt_nq.htm N-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

Quarterly Schedule of Portfolio Holdings of

Registered Management Investment Company

 

Investment Company Act File Number: 811-04318

 

The American Funds Income Series

(Exact Name of Registrant as Specified in Charter)

 

333 South Hope Street

Los Angeles, California 90071

(Address of Principal Executive Offices)

 

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

 

Date of fiscal year end: August 31

 

Date of reporting period: November 30, 2018

 

Steven I. Koszalka

The American Funds Income Series

333 South Hope Street

Los Angeles, California 90071

(Name and Address of Agent for Service)

 

ITEM 1 – Schedule of Investments

 

 

 

IMAGE OMITTED [img332439ca1.jpg]

 

U.S. Government Securities Fund®

Investment portfolio

November 30, 2018

 

 

unaudited

 

 

Bonds, notes & other debt instruments 97.18%
U.S. Treasury bonds & notes 70.03%
U.S. Treasury 64.26%		 Principal amount
(000)		 Value
(000)
U.S. Treasury 1.25% 2019 $40,000 $39,482
U.S. Treasury 1.50% 2019 73,000 72,845
U.S. Treasury 1.50% 2019 70,000 69,237
U.S. Treasury 1.625% 2019 114,800 114,484
U.S. Treasury 1.25% 2020 15,600 15,312
U.S. Treasury 1.375% 2020 36,000 35,305
U.S. Treasury 1.375% 2020 27,000 26,544
U.S. Treasury 1.375% 2020 26,548 25,841
U.S. Treasury 1.625% 2020 7,500 7,357
U.S. Treasury 1.75% 2020 56,150 55,049
U.S. Treasury 2.00% 2020 32,000 31,502
U.S. Treasury 2.25% 2020 70,000 69,523
U.S. Treasury 2.50% 2020 152,000 151,308
U.S. Treasury 2.75% 2020 42,500 42,457
U.S. Treasury 8.75% 2020 5,255 5,771
U.S. Treasury 1.125% 2021 —1 —1
U.S. Treasury 1.75% 2021 195,621 189,684
U.S. Treasury 2.00% 2021 145,000 141,540
U.S. Treasury 2.00% 2021 37,000 36,160
U.S. Treasury 2.00% 2021 31,550 30,875
U.S. Treasury 2.125% 2021 22,000 21,605
U.S. Treasury 2.25% 2021 169,300 166,854
U.S. Treasury 2.375% 2021 225,000 222,779
U.S. Treasury 2.625% 2021 22,000 21,896
U.S. Treasury 2.75% 2021 23,000 22,960
U.S. Treasury 2.875% 2021 31,600 31,646
U.S. Treasury 8.00% 2021 3,400 3,895
U.S. Treasury 1.625% 2022 121,000 115,801
U.S. Treasury 1.625% 2022 680 649
U.S. Treasury 1.75% 2022 371,500 358,197
U.S. Treasury 1.75% 2022 132,600 128,073
U.S. Treasury 1.75% 2022 47,000 45,339
U.S. Treasury 1.75% 2022 38,000 36,611
U.S. Treasury 1.75% 2022 25,000 24,169
U.S. Treasury 1.875% 2022 386,330 374,381
U.S. Treasury 1.875% 2022 152,000 146,940
U.S. Treasury 1.875% 2022 129,030 125,342
U.S. Treasury 1.875% 2022 89,000 86,382
U.S. Treasury 1.875% 2022 69,000 66,599
U.S. Treasury 1.875% 2022 38,000 36,858
U.S. Treasury 2.00% 2022 443,000 429,285
U.S. Treasury 2.00% 2022 95,280 92,271
U.S. Treasury 2.125% 20222 849,127 825,666
U.S. Treasury 1.375% 2023 44,000 41,106
U.S. Treasury 1.375% 2023 11,000 10,303
U.S. Treasury 1.50% 2023 57,820 54,703

 

U.S. Government Securities Fund — Page 1 of 11

 

 

 

unaudited

 

 

Bonds, notes & other debt instruments
U.S. Treasury bonds & notes (continued)
U.S. Treasury (continued)		 Principal amount
(000)		 Value
(000)
U.S. Treasury 1.625% 2023 $152,230 $144,339
U.S. Treasury 1.625% 2023 68,000 64,533
U.S. Treasury 2.125% 2023 157,874 152,428
U.S. Treasury 2.375% 2023 68,000 66,739
U.S. Treasury 2.50% 2023 309,740 305,348
U.S. Treasury 2.50% 2023 40,720 40,081
U.S. Treasury 2.625% 2023 131,950 130,769
U.S. Treasury 2.625% 2023 80,088 79,322
U.S. Treasury 2.75% 2023 332,760 331,409
U.S. Treasury 2.75% 2023 147,900 147,161
U.S. Treasury 2.75% 2023 115,600 115,095
U.S. Treasury 2.75% 2023 293 292
U.S. Treasury 2.875% 2023 455,300 455,778
U.S. Treasury 2.875% 2023 92,300 92,437
U.S. Treasury 2.875% 2023 13,000 13,011
U.S. Treasury 2.125% 2024 315,650 302,642
U.S. Treasury 2.25% 2024 106,700 103,516
U.S. Treasury 2.25% 2024 57,250 55,239
U.S. Treasury 2.50% 2024 96,000 94,147
U.S. Treasury 2.75% 2024 87,700 87,159
U.S. Treasury 2.125% 2025 22,000 20,975
U.S. Treasury 2.75% 2025 5,000 4,955
U.S. Treasury 2.875% 2025 118,500 118,204
U.S. Treasury 2.875% 2025 69,754 69,568
U.S. Treasury 2.875% 2025 20,000 19,957
U.S. Treasury 3.00% 2025 20,000 20,098
U.S. Treasury 3.00% 2025 10,000 10,051
U.S. Treasury 2.25% 2027 3,700 3,508
U.S. Treasury 2.375% 2027 41,000 39,197
U.S. Treasury 2.875% 2028 39,000 38,573
U.S. Treasury 6.25% 2030 5,250 6,875
U.S. Treasury 2.875% 2045 4,750 4,389
U.S. Treasury 3.00% 2045 7,300 6,910
U.S. Treasury 2.75% 20472 8,228 7,381
U.S. Treasury 2.75% 2047 7,250 6,497
U.S. Treasury 3.00% 2048 29,000 27,334
U.S. Treasury 3.00% 2048 19,601 18,473
U.S. Treasury 3.125% 2048 6,200 5,988
U.S. Treasury 3.375% 2048 4,228 4,287
    7,865,251
U.S. Treasury inflation-protected securities 5.77%    
U.S. Treasury Inflation-Protected Security 0.125% 20223 71,713 69,637
U.S. Treasury Inflation-Protected Security 0.625% 20233 171,240 168,074
U.S. Treasury Inflation-Protected Security 0.25% 20253 26,708 25,518
U.S. Treasury Inflation-Protected Security 0.375% 20253 26,611 25,634
U.S. Treasury Inflation-Protected Security 2.125% 20413 3,170 3,719
U.S. Treasury Inflation-Protected Security 0.75% 20422,3 192,584 173,293
U.S. Treasury Inflation-Protected Security 0.625% 20433 23,606 20,521
U.S. Treasury Inflation-Protected Security 1.00% 20463 34,943 32,867

 

U.S. Government Securities Fund — Page 2 of 11

 

 

 

unaudited

 

 

Bonds, notes & other debt instruments
U.S. Treasury bonds & notes (continued)
U.S. Treasury inflation-protected securities (continued)		 Principal amount
(000)		 Value
(000)
U.S. Treasury Inflation-Protected Security 0.875% 20473 $71,527 $65,061
U.S. Treasury Inflation-Protected Security 1.00% 20482,3 161,920 122,197
    706,521
Total U.S. Treasury bonds & notes   8,571,772
Mortgage-backed obligations 25.24%
Federal agency mortgage-backed obligations 25.24%		    
Fannie Mae 5.50% 20234 337 347
Fannie Mae 6.00% 20244 290 312
Fannie Mae 10.433% 20254 2 2
Fannie Mae 6.00% 20264 15 16
Fannie Mae 6.50% 20274 543 589
Fannie Mae 6.50% 20274 215 234
Fannie Mae 8.00% 20314 316 347
Fannie Mae 4.00% 20344,5 149,000 151,616
Fannie Mae 3.00% 20364 26,937 26,178
Fannie Mae 3.00% 20364 14,693 14,279
Fannie Mae 4.00% 20364 19,353 19,712
Fannie Mae 4.00% 20364 12,359 12,604
Fannie Mae 4.00% 20364 9,341 9,525
Fannie Mae 4.00% 20364 4,027 4,106
Fannie Mae 4.00% 20364 1,129 1,150
Fannie Mae 4.00% 20364 29 30
Fannie Mae 3.00% 20374 9,523 9,255
Fannie Mae 6.50% 20374 107 117
Fannie Mae 6.50% 20374 104 112
Fannie Mae 6.50% 20374 38 42
Fannie Mae 7.00% 20374 175 192
Fannie Mae 7.00% 20374 30 33
Fannie Mae 7.50% 20374 28 30
Fannie Mae 6.00% 20384 39 39
Fannie Mae 7.00% 20384 242 266
Fannie Mae 5.00% 20414 1,465 1,558
Fannie Mae 5.00% 20414 979 1,041
Fannie Mae 5.00% 20414 790 841
Fannie Mae 5.00% 20414 577 614
Fannie Mae 3.00% 20464 21,773 20,795
Fannie Mae 3.50% 20474 23,029 22,606
Fannie Mae 3.50% 20474 9,788 9,620
Fannie Mae 3.50% 20474 8,751 8,591
Fannie Mae 3.50% 20474 1,458 1,434
Fannie Mae 4.00% 20474 65,122 65,566
Fannie Mae 4.00% 20474 29,251 29,476
Fannie Mae 4.00% 20474 22,542 22,695
Fannie Mae 3.50% 20484,5 29,000 28,444
Fannie Mae 4.00% 20484,5 244,877 246,321
Fannie Mae 4.50% 20484 176,596 181,946
Fannie Mae 4.50% 20484 97,408 100,359
Fannie Mae 4.50% 20484 60,155 61,977
Fannie Mae 4.50% 20484,5 45,163 46,443
Fannie Mae 4.50% 20484 944 972
Fannie Mae 5.00% 20484 24,750 25,948
Fannie Mae 4.00% 20494,5 43,812 44,024

 

U.S. Government Securities Fund — Page 3 of 11

 

 

 

unaudited

 

 

Bonds, notes & other debt instruments
Mortgage-backed obligations (continued)
Federal agency mortgage-backed obligations (continued)		 Principal amount
(000)		 Value
(000)
Fannie Mae 4.50% 20494,5 $249,557 $255,965
Fannie Mae 4.50% 20494,5 30,656 31,483
Fannie Mae 3.50% 20574 21,050 20,565
Fannie Mae, Series 2001-4, Class NA, 9.101% 20254,6 6 6
Fannie Mae, Series 2001-25, Class ZA, 6.50% 20314 207 216
Fannie Mae, Series 2001-20, Class E, 9.555% 20314,6 2 2
Fannie Mae, Series 2006-65, Class PF, (1-month USD-LIBOR + 0.28%) 2.595% 20364,6 651 647
Fannie Mae, Series 1999-T2, Class A1, 7.50% 20394,6 205 220
Fannie Mae, Series 2012-M2, Class A2, Multi Family, 2.717% 20224 3,774 3,731
Fannie Mae, Series 2012-M3, Class 1A2, Multi Family, 3.044% 20224 3,468 3,459
Fannie Mae, Series 2014-M1, Class A2, Multi Family, 3.316% 20234,6 3,366 3,381
Fannie Mae, Series 2014-M3, Class A2, Multi Family, 3.501% 20244,6 6,525 6,592
Fannie Mae, Series 2006-83, Class AO, principal only, 0% 20364 860 722
Fannie Mae, Series 2006-56, Class OG, principal only, 0% 20364 486 403
Freddie Mac 10.00% 20254 10 10
Freddie Mac 4.00% 20364 190 193
Freddie Mac 4.367% 20364,6 302 319
Freddie Mac 5.00% 20414 3,304 3,517
Freddie Mac 3.00% 20434 19,937 19,184
Freddie Mac 3.162% 20454,6 4,732 4,749
Freddie Mac 3.00% 20464 68,834 66,219
Freddie Mac 3.50% 20464 5,324 5,244
Freddie Mac 3.50% 20474 30,164 29,609
Freddie Mac 3.50% 20474 23,454 23,023
Freddie Mac 3.50% 20474 22,737 22,319
Freddie Mac 3.50% 20474 14,362 14,104
Freddie Mac 3.50% 20474 5,318 5,221
Freddie Mac 3.00% 20484,5 12,300 11,723
Freddie Mac 3.50% 20484 20,001 19,652
Freddie Mac 4.00% 20484,5 108,635 109,286
Freddie Mac 4.50% 20484,5 104,377 107,357
Freddie Mac, Series 2289, Class NB, 9.00% 20224,6 4 4
Freddie Mac, Series 1567, Class A, (1-month USD-LIBOR + 0.40%) 2.707% 20234,6 5 5
Freddie Mac, Series 3156, Class PF, (1-month USD-LIBOR + 0.25%) 2.557% 20364,6 1,182 1,190
Freddie Mac, Series KGRP, Class A, Multi Family, (1-month USD-LIBOR + 0.38%) 2.687% 20204,6 579 579
Freddie Mac, Series K013, Class A1, Multi Family, 2.902% 20204 633 632
Freddie Mac, Series K010, Class A1, Multi Family, 3.32% 20204 132 132
Freddie Mac, Series K031, Class A1, Multi Family, 2.778% 20224 1,441 1,434
Freddie Mac, Series KS01, Class A2, Multi Family, 2.522% 20234 3,185 3,114
Freddie Mac, Series K029, Class A2, Multi Family, 3.32% 20234 1,200 1,204
Freddie Mac, Series K070, Class A2, Multi Family, 3.303% 20274,6 20,965 20,510
Freddie Mac, Series 3156, Class PO, principal only, 0% 20364 996 839
Freddie Mac, Series 3146, Class PO, principal only, 0% 20364 424 353
Freddie Mac, Series 3213, Class OG, principal only, 0% 20364 368 325
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-2, Class HA, 2.50% 20564 38,513 37,327
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-1, Class HA, 2.75% 20564,6 35,076 34,064
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-2, Class MA, 3.00% 20564 36,598 35,238
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-4, Class HT, 2.50% 20574,6 9,217 8,827
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2018-2, Class MT, 3.50% 20574 123,518 119,892
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2017-4, Class MT, 3.50% 20574 7,164 6,957
Freddie Mac Seasoned Credit Risk Transfer Trust, Series 2018-4, Class MT, 3.50% 20574 3,174 3,073
Freddie Mac Seasoned Loan Structured Transaction, Series 2018-1, Class A1, 3.50% 20284 23,675 23,470
Freddie Mac Seasoned Loan Structured Transaction, Series 2018-2, Class A1, 3.50% 20284,6 158,198 156,475
Government National Mortgage Assn. 10.00% 20194 1 1

 

U.S. Government Securities Fund — Page 4 of 11

 

 

 

unaudited

 

 

Bonds, notes & other debt instruments
Mortgage-backed obligations (continued)
Federal agency mortgage-backed obligations (continued)		 Principal amount
(000)		 Value
(000)
Government National Mortgage Assn. 10.00% 20214 $10 $11
Government National Mortgage Assn. 6.50% 20294 294 318
Government National Mortgage Assn. 6.50% 20324 532 578
Government National Mortgage Assn. 6.50% 20374 228 253
Government National Mortgage Assn. 5.50% 20384 239 256
Government National Mortgage Assn. 5.50% 20384 29 30
Government National Mortgage Assn. 6.00% 20384 346 372
Government National Mortgage Assn. 6.50% 20384 244 253
Government National Mortgage Assn. 6.50% 20384 201 209
Government National Mortgage Assn. 6.50% 20384 131 145
Government National Mortgage Assn. 6.50% 20384 47 53
Government National Mortgage Assn. 4.00% 20394 467 474
Government National Mortgage Assn. 4.00% 20394 48 49
Government National Mortgage Assn. 5.00% 20394 936 996
Government National Mortgage Assn. 6.00% 20394 1,877 2,038
Government National Mortgage Assn. 6.50% 20394 662 725
Government National Mortgage Assn. 4.50% 20404 787 823
Government National Mortgage Assn. 5.00% 20404 149 155
Government National Mortgage Assn. 5.00% 20404 120 125
Government National Mortgage Assn. 5.50% 20404 2,944 3,126
Government National Mortgage Assn. 3.50% 20414 695 678
Government National Mortgage Assn. 4.00% 20414 225 222
Government National Mortgage Assn. 4.50% 20414 10,434 10,806
Government National Mortgage Assn. 5.00% 20414 5,390 5,633
Government National Mortgage Assn. 5.00% 20414 90 95
Government National Mortgage Assn. 5.50% 20414 291 298
Government National Mortgage Assn. 5.50% 20414 224 229
Government National Mortgage Assn. 5.50% 20414 73 75
Government National Mortgage Assn. 6.50% 20414 1,089 1,191
Government National Mortgage Assn. 3.50% 20424 526 520
Government National Mortgage Assn. 4.00% 20424 2,716 2,727
Government National Mortgage Assn. 4.00% 20424 1,483 1,489
Government National Mortgage Assn. 3.50% 20434 3,256 3,221
Government National Mortgage Assn. 3.00% 20484 10,802 10,409
Government National Mortgage Assn. 3.50% 20484,5 100,000 98,869
Government National Mortgage Assn. 4.00% 20484,5 78,592 79,571
Government National Mortgage Assn. 4.00% 20484 71,900 72,881
Government National Mortgage Assn. 4.50% 20484,5 179,725 185,396
Government National Mortgage Assn. 4.00% 20494,5 67,408 68,164
Government National Mortgage Assn. 5.00% 20494,5 88,458 92,164
Government National Mortgage Assn. 5.00% 20494,5 12,542 13,050
Government National Mortgage Assn. 6.191% 20584 511 537
Government National Mortgage Assn., Series 2003-46, Class NB, 5.00% 20334 735 758
Government National Mortgage Assn., Series 2010-H23, Class PT, 5.408% 20604,6 10,396 10,485
Government National Mortgage Assn., Series 2011-H02, Class BI, interest only, 0.536% 20614,6 7,280 75
Government National Mortgage Assn., Series 2012-H23, Class FI, interest only, 0.679% 20624,6 12,700 117
National Credit Union Administration, Series 2011-R3, Class 1A,
(1-month USD-LIBOR + 0.40%) 2.715% 20204,6		 458 459
National Credit Union Administration, Series 2011-R1, Class 1A,
(1-month USD-LIBOR + 0.45%) 2.768% 20204,6		 280 281
Vendee Mortgage Trust, Series 2011-2, Class V, 3.75% 20284 10,165 10,007
Vendee Mortgage Trust, Series 2008-1, Class GD, 5.25% 20324 6,375 6,495

 

U.S. Government Securities Fund — Page 5 of 11

 

 

 

unaudited

 

 

Bonds, notes & other debt instruments
Mortgage-backed obligations (continued)
Federal agency mortgage-backed obligations (continued)		 Principal amount
(000)		 Value
(000)
Vendee Mortgage Trust, Series 2011-2, Class DA, 3.75% 20334 $3,471 $3,489
Vendee Mortgage Trust, Series 2010-1, Class DA, 4.25% 20354 1,663 1,679
Total mortgage-backed obligations   3,090,229
Federal agency bonds & notes 1.91%    
Export-Import Bank of the United States-Guaranteed, VCK Lease SA 2.591% 20264 1,362 1,335
Export-Import Bank of the United States-Guaranteed, Ethiopian Leasing 2012 LLC 2.646% 20264 1,304 1,276
Fannie Mae 7.125% 2030 3,000 4,051
Federal Home Loan Bank 3.375% 2023 14,160 14,403
Federal Home Loan Bank 3.25% 2028 50,000 49,835
Federal Home Loan Bank 5.50% 2036 700 877
Private Export Funding Corp. 1.45% 2019 5,250 5,201
Private Export Funding Corp. 2.25% 2020 10,000 9,940
Private Export Funding Corp. 3.55% 2024 11,150 11,424
Small Business Administration, Series 2001-20K, 5.34% 20214 104 105
Small Business Administration, Series 2001-20J, 5.76% 20214 26 27
Small Business Administration, Series 2001-20F, 6.44% 20214 151 155
Small Business Administration, Series 2003-20B, 4.84% 20234 468 478
Tennessee Valley Authority 4.65% 2035 3,930 4,388
Tennessee Valley Authority 5.88% 2036 2,750 3,475
Tennessee Valley Authority, Series A, 3.875% 2021 8,500 8,671
Tennessee Valley Authority, Series 2008, Class A, 4.875% 2048 3,300 3,859
TVA Southaven 3.846% 20334 2,324 2,307
United States Agency for International Development, Iraq (State of), 2.149% 2022 13,330 12,973
United States Agency for International Development, Israel (State of), Class 1-A, 5.50% 2023 5,000 5,553
United States Agency for International Development, Jordan (Kingdom of) 1.945% 2019 31,500 31,372
United States Agency for International Development, Jordan (Kingdom of) 2.503% 2020 8,200 8,135
United States Agency for International Development, Jordan (Kingdom of) 2.578% 2022 6,000 5,938
United States Agency for International Development, Jordan (Kingdom of) 3.00% 2025 2,500 2,468
United States Agency for International Development, Tunisia (Kingdom of) 1.416% 2021 7,000 6,722
United States Agency for International Development, Ukraine, 1.844% 2019 2,890 2,878
United States Agency for International Development, Ukraine, 1.847% 2020 20,000 19,677
United States Agency for International Development, Ukraine 1.471% 2021 11,770 11,276
United States Government-Guaranteed Certificates of Participation, Overseas Private Investment Corp., 3.49% 20294 1,765 1,779
United States Government-Guaranteed Certificates of Participation, Overseas Private Investment Corp., 3.82% 20324 1,680 1,704
United States Government-Guaranteed Certificates of Participation, Overseas Private Investment Corp., 3.938% 20324 1,324 1,354
    233,636
Total bonds, notes & other debt instruments (cost: $12,089,397,000)   11,895,637
Short-term securities 12.12%    
Colgate-Palmolive Co. 2.23% due 12/3/20187 27,300 27,295
Fannie Mae 2.23% due 1/2/2019 30,000 29,943
Federal Home Loan Bank 2.20%–2.37% due 12/7/2018–2/25/2019 1,159,500 1,155,520
Freddie Mac 2.27% due 1/18/2019 100,000 99,705

 

U.S. Government Securities Fund — Page 6 of 11

 

 

 

unaudited

 

 

Short-term securities Principal amount
(000)		 Value
(000)
U.S. Treasury Bills 2.22%–2.29% due 1/3/2019–1/31/2019 $149,400 $148,967
Wal-Mart Stores, Inc. 2.32% due 12/3/20187 21,900 21,896
Total short-term securities (cost: $1,483,173,000)   1,483,326
Total investment securities 109.30% (cost: $13,572,570,000)   13,378,963
Other assets less liabilities (9.30)%   (1,138,337)
Net assets 100.00%   $12,240,626

Futures contracts

 

Contracts Type Number of
contracts		 Expiration Notional
amount8
(000)		 Value at
11/30/20189
(000)		 Unrealized
(depreciation)
appreciation
at 11/30/2018
(000)
30 Day Federal Funds Futures Long 148 January 2019 $61,672 $60,195 $(19)
30 Day Federal Funds Futures Short 144 July 2019 (60,005) (58,442) —1
90 Day Euro Dollar Futures Short 2,120 December 2018 (530,000) (515,173) 197
90 Day Euro Dollar Futures Short 450 March 2019 (112,500) (109,299) (9)
90 Day Euro Dollar Futures Short 4,120 June 2019 (1,030,000) (999,976) (87)
90 Day Euro Dollar Futures Long 2,570 December 2019 642,500 623,064 1,315
90 Day Euro Dollar Futures Long 3,304 December 2021 826,000 801,426 282
2 Year U.S. Treasury Note Futures Long 11,484 April 2019 2,296,800 2,422,945 828
5 Year U.S. Treasury Note Futures Long 42,357 April 2019 4,235,700 4,784,687 9,676
10 Year U.S. Treasury Note Futures Long 8,030 March 2019 803,000 959,209 2,051
10 Year Ultra U.S. Treasury Note Futures Short 578 March 2019 (57,800) (73,117) (291)
20 Year U.S. Treasury Bond Futures Short 615 March 2019 (61,500) (86,042) (366)
30 Year Ultra U.S. Treasury Bond Futures Short 683 March 2019 (68,300) (104,094) (172)
            $13,405

Swap contracts

Interest rate swaps

 

Receive Pay Expiration
date		 Notional
(000)		 Value at
11/30/2018
(000)		 Upfront
payments/
receipts
(000)		 Unrealized
(depreciation)
appreciation
at 11/30/2018
(000)
1.37% U.S. EFFR 6/14/2019 $190,000 $(1,023) $— $(1,023)
1.362% U.S. EFFR 6/21/2019 190,000 (1,079) — (1,079)
3-month USD-LIBOR 1.5445% 6/28/2019 190,000 1,361 — 1,361
1.351% U.S. EFFR 6/28/2019 190,000 (1,138) — (1,138)
3-month USD-LIBOR 1.59851% 8/7/2019 205,000 1,703 — 1,703
2.782% U.S. EFFR 9/18/2019 3,310,666 647 — 647
1.997% U.S. EFFR 2/13/2020 231,000 (1,501) — (1,501)
1.989% U.S. EFFR 2/13/2020 231,000 (1,522) — (1,522)
3-month USD-LIBOR 2.761% 4/27/2020 350,000 834 — 834
3-month USD-LIBOR 2.8025% 8/15/2020 389,465 1,050 — 1,050
3-month USD-LIBOR 2.806% 8/29/2020 138,800 399 — 399
2.5215% U.S. EFFR 8/29/2020 392,780 (692) — (692)
2.5045% U.S. EFFR 8/29/2020 536,220 (1,101) — (1,101)
3-month USD-LIBOR 1.217% 9/22/2021 250,000 11,907 — 11,907
3-month USD-LIBOR 1.225% 9/22/2021 250,000 11,853 — 11,853
3-month USD-LIBOR 1.196% 9/27/2021 90,000 4,354 — 4,354

 

U.S. Government Securities Fund — Page 7 of 11

 

 

 

unaudited

 

 

Receive Pay Expiration
date		 Notional
(000)		 Value at
11/30/2018
(000)		 Upfront
payments/
receipts
(000)		 Unrealized
(depreciation)
appreciation
at 11/30/2018
(000)
3-month USD-LIBOR 2.01215% 2/2/2022 $350,000 $10,304 $— $10,304
3-month USD-LIBOR 1.9665% 2/2/2022 146,000 4,500 — 4,500
2.5775% U.S. EFFR 7/16/2022 694,646 (541) — (541)
3-month USD-LIBOR 1.948% 7/28/2022 360,000 12,805 — 12,805
2.80% 3-month USD-LIBOR 9/2/2022 560,000 (1,964) — (1,964)
2.75% 3-month USD-LIBOR 9/2/2022 560,000 (2,482) — (2,482)
2.009% 3-month USD-LIBOR 10/4/2022 187,000 (6,567) — (6,567)
2.1045% 3-month USD-LIBOR 10/31/2022 76,000 (2,442) — (2,442)
2.2025% 3-month USD-LIBOR 12/4/2022 71,000 (2,094) — (2,094)
2.7435% 3-month USD-LIBOR 2/16/2023 155,000 (1,439) — (1,439)
3-month USD-LIBOR 2.8655% 4/23/2023 200,000 868 — 868
2.5815% U.S. EFFR 5/25/2023 307,000 (722) — (722)
3-month USD-LIBOR 3.09009% 10/31/2023 175,945 (951) — (951)
3-month USD-LIBOR 3.0965% 10/31/2023 174,935 (997) — (997)
3-month USD-LIBOR 1.495% 11/10/2023 115,000 7,846 — 7,846
3-month USD-LIBOR 2.0815% 2/10/2024 86,700 3,761 — 3,761
3-month USD-LIBOR 2.0955% 2/10/2024 43,300 1,849 — 1,849
3-month USD-LIBOR 2.3875% 3/17/2024 290,300 8,454 — 8,454
3-month USD-LIBOR 2.12813% 10/3/2024 225,000 10,355 — 10,355
3-month USD-LIBOR 2.588% 1/26/2025 58,100 1,307 — 1,307
2.905% 3-month USD-LIBOR 6/21/2025 146,860 (763) — (763)
3-month USD-LIBOR 1.7545% 2/5/2026 45,000 3,641 — 3,641
3-month USD-LIBOR 2.24% 12/5/2026 179,000 9,986 — 9,986
3-month USD-LIBOR 2.27% 12/5/2026 146,000 7,831 — 7,831
2.579% 3-month USD-LIBOR 3/14/2027 159,000 (5,188) — (5,188)
2.333% 3-month USD-LIBOR 3/29/2027 130,000 (6,620) — (6,620)
2.925% 3-month USD-LIBOR 2/1/2028 48,600 (346) — (346)
2.91% 3-month USD-LIBOR 2/1/2028 60,800 (470) — (470)
2.908% 3-month USD-LIBOR 2/1/2028 60,700 (475) — (475)
2.92% 3-month USD-LIBOR 2/2/2028 45,900 (336) — (336)
U.S. EFFR 2.5065% 3/22/2028 48,300 777 — 777
U.S. EFFR 2.535% 3/23/2028 37,200 511 — 511
U.S. EFFR 2.471% 3/27/2028 45,200 861 — 861
U.S. EFFR 2.4575% 3/29/2028 53,479 1,079 — 1,079
U.S. EFFR 2.424% 3/30/2028 45,250 1,039 — 1,039
U.S. EFFR 2.412% 4/5/2028 20,571 494 — 494
3-month USD-LIBOR 2.97125% 9/2/2030 124,000 1,481 — 1,481
3-month USD-LIBOR 3.005% 9/2/2030 124,000 1,134 — 1,134
3-month USD-LIBOR 2.9625% 2/1/2038 36,300 800 — 800
3-month USD-LIBOR 2.963% 2/1/2038 36,300 798 — 798
3-month USD-LIBOR 2.986% 2/1/2038 29,200 597 — 597
3-month USD-LIBOR 2.967% 2/2/2038 28,200 613 — 613
3-month USD-LIBOR 3.206% 7/31/2044 22,000 (209) — (209)
3-month USD-LIBOR 3.238% 8/8/2044 28,000 (421) — (421)
3-month USD-LIBOR 2.7045% 1/2/2045 38,500 3,194 — 3,194
3-month USD-LIBOR 2.58245% 11/5/2045 13,000 1,397 — 1,397
3-month USD-LIBOR 2.6485% 11/16/2045 54,375 5,173 — 5,173
3-month USD-LIBOR 2.52822% 11/23/2045 17,800 2,099 — 2,099
3-month USD-LIBOR 2.59125% 12/16/2045 22,500 2,389 — 2,389
U.S. EFFR 2.166% 10/23/2047 35,000 4,345 — 4,345
U.S. EFFR 2.172% 11/8/2047 15,000 1,846 — 1,846
U.S. EFFR 2.145% 11/9/2047 47,500 6,101 — 6,101
U.S. EFFR 2.153% 11/10/2047 47,500 6,025 — 6,025

 

U.S. Government Securities Fund — Page 8 of 11

 

 

 

unaudited

 

 

Receive Pay Expiration
date		 Notional
(000)		 Value at
11/30/2018
(000)		 Upfront
payments/
receipts
(000)		 Unrealized
(depreciation)
appreciation
at 11/30/2018
(000)
U.S. EFFR 2.155% 11/10/2047 $26,680 $3,374 $— $3,374
U.S. EFFR 2.17% 11/13/2047 48,320 5,967 — 5,967
U.S. EFFR 2.5635% 2/12/2048 81,502 3,652 — 3,652
U.S. EFFR 2.4615% 3/15/2048 5,000 326 — 326
U.S. EFFR 2.485% 3/15/2048 5,000 303 — 303
2.98% 3-month USD-LIBOR 3/15/2048 5,000 (169) — (169)
2.9625% 3-month USD-LIBOR 3/15/2048 5,000 (186) — (186)
U.S. EFFR 2.425% 3/16/2048 10,000 725 — 725
2.917% 3-month USD-LIBOR 3/16/2048 10,000 (463) — (463)
U.S. EFFR 2.51375% 3/22/2048 18,400 1,008 — 1,008
U.S. EFFR 2.505% 3/22/2048 16,600 938 — 938
U.S. EFFR 2.625% 5/25/2048 69,000 2,248 — 2,248
U.S. EFFR 2.445% 6/4/2048 25,700 1,769 — 1,769
U.S. EFFR 2.52% 8/24/2048 16,800 910 — 910
3.236% 3-month USD-LIBOR 10/31/2048 40,445 741 — 741
3.22859% 3-month USD-LIBOR 10/31/2048 40,450 681 — 681
          $— $139,109

    

 

1 Amount less than one thousand.
2 All or a portion of this security was pledged as collateral. The total value of pledged collateral was $119,099,000, which represented .97% of the net assets of the fund.
3 Index-linked bond whose principal amount moves with a government price index.
4 Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.
5 Purchased on a TBA basis.
6 Coupon rate may change periodically.
7 Acquired in a transaction exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $49,191,000, which represented .40% of the net assets of the fund.
8 Notional amount is calculated based on the number of contracts and notional contract size.
9 Value is calculated based on the notional amount and current market price.

Valuation disclosures

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

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

 

U.S. Government Securities Fund — Page 9 of 11

 

 

 

unaudited

 

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

 

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

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

Exchange-traded futures are generally valued at the official settlement price of, or the last reported sale price on, the exchange or market on which such instruments are traded, as of the close of business on the day the futures are being valued or, lacking any sales, at the last available bid price. Prices for each future are taken from the exchange or market on which the security trades. The average month-end notional amount of futures contracts while held was $10,741,962,000. Interest rate swaps are generally valued by pricing vendors based on market inputs that include the index and term of index, reset frequency, payer/receiver, currency and pay frequency. The average month-end notional amount of interest rate swaps was $29,346,239,000.

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

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

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

Classifications — The fund’s investment adviser classifies the fund’s assets and liabilities into three levels based on the inputs used to value the assets or liabilities. Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Certain securities trading outside the U.S. may

 

U.S. Government Securities Fund — Page 10 of 11

 

 

 

unaudited

 

transfer between Level 1 and Level 2 due to valuation adjustments resulting from significant market movements following the close of local trading. Level 3 values are based on significant unobservable inputs that reflect the investment adviser’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market. The following tables present the fund’s valuation levels as of November 30, 2018 (dollars in thousands):

 

  Investment securities
  Level 1 Level 2 Level 3 Total
Assets:        
Bonds, notes & other debt instruments:        
U.S. Treasury bonds & notes $— $8,571,772 $— $8,571,772
Mortgage-backed obligations — 3,090,229 — 3,090,229
Federal agency bonds & notes — 233,636 — 233,636
Short-term securities — 1,483,326 — 1,483,326
Total $— $13,378,963 $— $13,378,963

    

 

  Other investments*
  Level 1 Level 2 Level 3 Total
Assets:        
Unrealized appreciation on futures contracts $14,349 $— $— $14,349
Unrealized appreciation on interest rate swaps — 183,010 — 183,010
Liabilities:        
Unrealized depreciation on futures contracts (944) — — (944)
Unrealized depreciation on interest rate swaps — (43,901) — (43,901)
Total $13,405 $139,109 $— $152,514

 

* Futures contracts and interest rate swaps are not included in the investment portfolio.
   

 

Key to abbreviations and symbol
EFFR = Effective Federal Funds Rate
LIBOR = London Interbank Offered Rate
TBA = To-be-announced
USD/$ = U.S. dollars

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

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

All Capital Group trademarks referenced are registered trademarks owned by The Capital Group Companies, Inc. or an affiliated company. All other company and product names mentioned are the trademarks or registered trademarks of their respective companies.

©2019 Capital Group. All rights reserved.

 

 

MFGEFPX-022-0119O-S66099 U.S. Government Securities Fund — Page 11 of 11

 

 

 

ITEM 2 – Controls and Procedures

 

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

 

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

 

ITEM 3 – Exhibits

 

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

 

SIGNATURES

 

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

 

  THE AMERICAN FUNDS INCOME SERIES
   
  By /s/ Kristine M. Nishiyama
 

Kristine M. Nishiyama, Executive Vice President and

Principal Executive Officer

   
  Date: January 28, 2019

 

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

 

 

 

By /s/ Kristine M. Nishiyama

Kristine M. Nishiyama, Executive Vice President and

Principal Executive Officer

 
Date: January 28, 2019

 

 

 

By /s/ Brian C. Janssen

Brian C. Janssen, Treasurer and

Principal Financial Officer

 
Date: January 28, 2019