gvt485b.htm

SEC. File Nos. 002-98199

811-04318

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________

FORM N-1A

Registration Statement

Under

the Securities Act of 1933

Post-Effective Amendment No. 35

and

Registration Statement

Under

The Investment Company Act of 1940

Amendment No. 34

____________

THE AMERICAN FUNDS INCOME SERIES

(Exact Name of Registrant as Specified in Charter)

333 South Hope Street

Los Angeles, California 90071-1447

(Address of Principal Executive Offices)

Registrant's telephone number, including area code:

(213) 486-9200

____________

KIMBERLY S. VERDICK, Secretary

The American Funds Income Series

333 South Hope Street

Los Angeles, California 90071-1447

(Name and Address of Agent for Service)

____________

Copies to:

Michael Glazer

PAUL, HASTINGS, JANOFSKY & WALKER LLP

555 S. Flower Street

Los Angeles, California 90071-2371

(Counsel for the Registrant)

____________

Approximate date of proposed public offering:

It is proposed that this filing become effective on November 1, 2007 pursuant to paragraph (b) of rule 485.

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<PAGE>

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

U.S. Government
Securities Fund/SM/

PROSPECTUS

November 1, 2007

TABLE OF CONTENTS

1 Risk/Return summary
5 Fees and expenses of the fund
7 Investment objective, strategies and risks
11 Management and organization
14 Shareholder information
15 Choosing a share class
17 Purchase and exchange of shares
21 Sales charges
24 Sales charge reductions and waivers
27 Rollovers from retirement plans to IRAs
28 Plans of distribution
28 Other compensation to dealers
29 How to sell shares
31 Distributions and taxes
32 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>

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

<PAGE>

Risk/Return summary

The fund seeks to provide you with a high level of current income as well as to
preserve your investment by investing primarily in securities that are
guaranteed or sponsored by the U.S. government. All securities held by the fund
will be rated AAA/Aaa or equivalent.

The fund is designed for investors seeking income, higher credit quality and
capital preservation over the long term. 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.

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. Examples of
such securities are mortgage-backed securities issued by the Federal National
Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage
Corporation ("Freddie Mac"). The fund may invest up to 20% of its assets in
non-government securities rated AAA or Aaa (or in unrated securities determined
to be of equivalent quality by the fund's investment adviser).

While the fund invests in the highest quality debt securities, 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. Prepayment risk is the risk that the
issuers of fixed-income securities owned by the fund will prepay them at a time
when interest rates have declined, which may require the fund to reinvest the
proceeds in lower yielding securities. It is important to note that neither the
fund nor its 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.

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.

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

HISTORICAL INVESTMENT RESULTS

The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 4 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. All fund results 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. Past results (before and after taxes) are not predictive
of future results.

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]
1997 8.39
1998 7.87
1999 -1.59
2000 11.93
2001 6.41
2002 9.02
2003 1.91
2004 2.88
2005 2.27
2006 3.15
[end bar chart]

Highest/Lowest quarterly results during this time period were:

HIGHEST 4.59% (quarter ended September 30, 1998)
LOWEST -2.00% (quarter ended June 30, 2004)

The fund's total return for the nine months ended September 30, 2007, was 3.71%.

U.S. Government Securities Fund / Prospectus

<PAGE>

Unlike the bar chart on the previous page, the Investment Results table on the
following page reflects, as required by Securities and Exchange Commission
rules, the fund's investment results with the following maximum initial or
contingent deferred sales charges imposed:

. Class A share results reflect the maximum initial sales charge of 3.75%. This
charge is reduced for purchases of $100,000 or more and eliminated for
purchases of $1 million or more.

. Class B share results reflect the applicable contingent deferred sales
charge. For example, results for the one-year period shown reflect a
contingent deferred sales charge of 5%. These charges begin to decline one
year after purchase and are eliminated six years after purchase.

. Class C share results for the one-year period shown reflect a contingent
deferred sales charge of 1%, which only applies if shares are sold within one
year of purchase.

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

Results would be higher if calculated without sales charges. The references
above to Class A, B, C or F sales charges also refer to the corresponding Class
529-A, 529-B, 529-C or 529-F sales charges.

The Investment Results table shows the fund's results on both a pretax and
after-tax basis, as required by Securities and Exchange Commission rules.
After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. Total returns shown "after taxes on distributions"
reflect the effect of taxes on distributions (for example, dividends or capital
gain distributions) by the fund. Total returns shown "after taxes on
distributions and sale of fund shares" assume that you sold your fund shares at
the end of the particular time period and, as a result, reflect the effect of
both taxes on distributions by the fund and taxes on any gain or loss realized
upon the sale of the shares. 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 BELOW. IN ADDITION, AFTER-TAX RETURNS MAY NOT
BE 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.

Unlike the Investment Results table on page 4, the Additional Investment Results
table on page 9 reflects the fund's results calculated without sales charges.

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

INVESTMENT RESULTS (WITH MAXIMUM SALES CHARGES)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
-------------------------------------------------------------------------------

CLASS A -- FIRST SOLD 10/17/85
Before taxes -0.75% 3.02% 4.75% 6.51%
After taxes on distributions -2.18 1.69 2.86 N/A
After taxes on distributions and -0.51 1.78 2.87 N/A
sale of fund shares

1 YEAR 5 YEAR LIFETIME/1/
------------------------------------------------------------------

CLASS B -- FIRST SOLD 3/15/00
Before taxes -2.52% 2.72% 4.51%
------------------------------------------------------------------
CLASS C -- FIRST SOLD 3/15/01
Before taxes 1.38 3.01 3.13
------------------------------------------------------------------
CLASS F -- FIRST SOLD 3/15/01
Before taxes 3.22 3.82 3.92
------------------------------------------------------------------
CLASS 529-A -- FIRST SOLD 2/20/02
Before taxes -0.78 N/A 2.79
------------------------------------------------------------------
CLASS 529-B -- FIRST SOLD 2/20/02
Before taxes -2.65 N/A 2.34
------------------------------------------------------------------
CLASS 529-C -- FIRST SOLD 2/19/02
Before taxes 1.32 N/A 2.73
------------------------------------------------------------------
CLASS 529-E -- FIRST SOLD 3/7/02
Before taxes 2.84 N/A 3.50
------------------------------------------------------------------
CLASS 529-F -- FIRST SOLD 10/11/02
Before taxes 3.33 N/A 2.72

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

INDEXES (BEFORE TAXES)
Citigroup Treasury/Govt 4.26% 4.78% 6.10% 7.78%
Sponsored/Mortgage Index/3/
Lipper General U.S. Government Funds 2.71 3.85 5.10 6.69
Average/4/
Consumer Price Index/5/ 2.54 2.69 2.44 2.96
-------------------------------------------------------------------------------
Class A annualized 30-day yield at August 31, 2007: 4.33%/6/
(For current yield information, please call American FundsLine/(R)/ at 800/325-3590.)

/1/ Lifetime results for each share class are measured from the date the share
class was first sold.
/2/ Lifetime results for the index(es) shown are measured from the date Class A
shares were first sold. The funds or securities that compose each index may
vary over time.

/3/ Citigroup Treasury/Government Sponsored/Mortgage Index (formerly Salomon Smith
Barney Treasury/Government Sponsored/Mortgage Index) is a market-weighted index
that includes U.S. Treasury and agency securities, as well as FNMAs, FHLMCs and
GNMAs. This index is unmanaged and includes reinvested dividends and/or
distributions, but does not reflect sales charges, commissions, expenses or
taxes.
/4/ Lipper General U.S. Government Funds Average is comprised of funds that invest
at least 65% of their assets 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, but do not reflect sales charges or taxes.
/5/ 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.
/6/ Reflects a fee waiver (4.30% without the waiver) as described in the Annual
Fund Operating Expenses table under "Fees and expenses of the fund."

U.S. Government Securities Fund / Prospectus

<PAGE>

Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS A/1/ CLASS B/1/ CLASS C/1/ CLASS 529-E/2/ CLASS F/1/,/3/
--------------------------------------------------------------------------------------------

Maximum initial sales
charge on purchases 3.75%/4/ none none none none
(as a percentage of
offering price)
--------------------------------------------------------------------------------------------
Maximum sales charge none none none none none
on reinvested
dividends
--------------------------------------------------------------------------------------------
Maximum contingent none/5/ 5.00%/6/ 1.00%/7/ none none
deferred sales charge
--------------------------------------------------------------------------------------------
Redemption or none none none none none
exchange fees

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
CLASS A CLASS B CLASS C CLASS F
-------------------------------------------------------------------------------

Management fees/8/ 0.32% 0.32% 0.32% 0.32%
-------------------------------------------------------------------------------
Distribution and/or service 0.26 1.00 1.00 0.25
(12b-1) fees/9/
-------------------------------------------------------------------------------
Other expenses/10/ 0.21 0.19 0.23 0.15
-------------------------------------------------------------------------------
Total annual fund operating 0.79 1.51 1.55 0.72
expenses/8/

CLASS CLASS CLASS CLASS CLASS
529-A 529-B 529-C 529-E 529-F
-------------------------------------------------------------------------------
Management fees/8/ 0.32% 0.32% 0.32% 0.32% 0.32%
-------------------------------------------------------------------------------
Distribution and/or service 0.22 1.00 1.00 0.50 --
(12b-1) fees/11/
-------------------------------------------------------------------------------
Other expenses/10/,/12/ 0.30 0.32 0.31 0.30 0.30
-------------------------------------------------------------------------------
Total annual fund operating 0.84 1.64 1.63 1.12 0.62
expenses/8/

/1/ Includes corresponding 529 share class. Accounts holding these 529 shares are
subject to a $10 account setup fee and an annual $10 account maintenance fee,
which are not reflected in this table.
/2/ Available only to employer-sponsored 529 plans. Accounts holding these shares
are subject to a $10 account setup fee and an annual $10 account maintenance
fee, which are not reflected in this table.
/3/ Class F and 529-F 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.
/4/ The initial sales charge is reduced for purchases of $100,000 or more and
eliminated for purchases of $1 million or more.
/5/ A contingent deferred sales charge of 1.00% applies on certain redemptions
made within one year following purchases of $1 million or more made without an
initial sales charge.
/6/ The contingent deferred sales charge is reduced one year after purchase and
eliminated six years after purchase.
/7/ The contingent deferred sales charge is eliminated one year after purchase.

/8/ The fund's investment adviser is currently waiving 10% of its management fee.
The waiver may be discontinued at any time, in consultation with the fund's
board, but it is expected to continue at this level until further review. The
fund's investment adviser and board intend to review the waiver as
circumstances warrant. Management fees and total expenses in the table do not
reflect any waiver. Information regarding the effect of any waiver on total
annual fund operating expenses can be found in the Financial Highlights table
in this prospectus and in the fund's annual report.

/9/ Class A and F 12b-1 fees may not exceed .30% and .50%, respectively, of each
class' average net assets annually. Class B and C 12b-1 fees may not exceed
1.00% of each class' average net assets annually.
/10/ Includes 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 will vary depending on the share class and
services provided, and typically ranges from $3 to $19 per account.
/11/ Class 529-A and 529-F 12b-1 fees may not exceed .50% of each class' average
net assets annually. Class 529-B and 529-C 12b-1 fees may not exceed 1.00% of
each class' average net assets annually. Class 529-E 12b-1 fees may not exceed
.75% of the class' average net assets annually.
/12/ Includes .10% paid to a state or states for oversight and administrative
services.

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

EXAMPLES

The examples below are intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The examples do not reflect the impact of any fee waivers
or expense reimbursements. The examples assuming redemption do not reflect the
effect of any taxable gain or loss at the time of the redemption.

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------------------------

Class A/1/ $453 $618 $ 797 $1,316
-------------------------------------------------------------------------------
Class B -- assuming redemption/2/ 654 877 1,024 1,607
-------------------------------------------------------------------------------
Class B -- assuming no redemption/3/ 154 477 824 1,607
-------------------------------------------------------------------------------
Class C -- assuming redemption/4/ 258 490 845 1,845
-------------------------------------------------------------------------------
Class C -- assuming no redemption 158 490 845 1,845
-------------------------------------------------------------------------------
Class F -- excluding intermediary fees/5/ 74 230 401 894
-------------------------------------------------------------------------------
Class 529-A/1/,/6/ 477 672 882 1,477
-------------------------------------------------------------------------------
Class 529-B -- assuming redemption/2/,/6/ 687 956 1,149 1,831
-------------------------------------------------------------------------------
Class 529-B -- assuming no 187 556 949 1,831
redemption/3/,/6/
-------------------------------------------------------------------------------
Class 529-C -- assuming redemption/4/,/6/ 285 553 943 2,032
-------------------------------------------------------------------------------
Class 529-C -- assuming no redemption/6/ 185 553 943 2,032
-------------------------------------------------------------------------------
Class 529-E/6/ 134 395 675 1,466
-------------------------------------------------------------------------------
Class 529-F -- excluding intermediary 83 238 405 880
fees/5/,/6/

/1/ Reflects the maximum initial sales charge.

/2/ Reflects applicable contingent deferred sales charges through year six and
Class A or 529-A expenses for years nine and 10 because Class B and 529-B
shares automatically convert to Class A and 529-A shares, respectively, after
eight years.
/3/ Reflects Class A or 529-A expenses for years nine and 10 because Class B and
529-B shares automatically convert to Class A and 529-A shares, respectively,
after eight years.
/4/ Reflects a contingent deferred sales charge in the first year.
/5/ Does not include fees charged by financial intermediaries, which are
independent of fund expenses and will increase the overall cost of your
investment. Intermediary fees typically range from .75% to 1.50% of assets
annually depending on the services offered.
/6/ Reflects an initial $10 account setup fee and an annual $10 account
maintenance fee.

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. Normally,
the fund will invest at least 80% of its assets in securities guaranteed or
sponsored by the U.S. government, including securities issued by U.S.
governmental agencies or instrumentalities that are not guaranteed by the U.S.
government. In addition, the fund may invest up to 20% of its assets in
non-government securities that are rated AAA or Aaa or that are unrated but
determined to be of equivalent quality by the fund's investment adviser. Such
investments may include securities backed by pools of mortgages, also called
"mortgage-backed securities" or other asset-backed securities.

The values of most debt securities held by the fund may be affected by changing
interest rates and prepayment risk. 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.

In addition, falling interest rates may cause an issuer to redeem or "call" a
security before its stated maturity. 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 prices for these
securities will fluctuate with changes in interest rates.

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. 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.

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

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.

ADDITIONAL INVESTMENT RESULTS

Unlike the Investment Results table on page 4, the table below reflects the
fund's results calculated without sales charges.

U.S. Government Securities Fund / Prospectus

<PAGE>

ADDITIONAL INVESTMENT RESULTS (WITHOUT SALES CHARGES)
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
1 YEAR 5 YEARS 10 YEARS LIFETIME/1/
-------------------------------------------------------------------------------

CLASS A -- FROM 10/17/85
Before taxes 3.15% 3.81% 5.15% 6.70%
After taxes on distributions 1.67 2.47 3.26 N/A
After taxes on distributions and 2.03 2.46 3.23 N/A
sale of fund shares

1 YEAR 5 YEARS LIFETIME/1/
-------------------------------------------------------------------

CLASS B -- FIRST SOLD 3/15/00
Before taxes 2.43% 3.07% 4.51%
-------------------------------------------------------------------
CLASS C -- FIRST SOLD 3/15/01
Before taxes 2.37 3.01 3.13
-------------------------------------------------------------------
CLASS F -- FIRST SOLD 3/15/01
Before taxes 3.22 3.82 3.92
-------------------------------------------------------------------
CLASS 529-A -- FIRST SOLD 2/20/02
Before taxes 3.12 N/A 3.61
-------------------------------------------------------------------
CLASS 529-B -- FIRST SOLD 2/20/02
Before taxes 2.29 N/A 2.72
-------------------------------------------------------------------
CLASS 529-C -- FIRST SOLD 2/19/02
Before taxes 2.31 N/A 2.73
-------------------------------------------------------------------
CLASS 529-E -- FIRST SOLD 3/7/02
Before taxes 2.84 N/A 3.50
-------------------------------------------------------------------
CLASS 529-F -- FIRST SOLD 10/11/02
Before taxes 3.33 N/A 2.72

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

INDEXES (BEFORE TAXES)
Citigroup Treasury/Govt 4.26% 4.78% 6.10% 7.78%
Sponsored/Mortgage Index/3/
Lipper General U.S. Government 2.71 3.85 5.10 6.69
Funds Average/4/
Consumer Price Index/5/ 2.54 2.69 2.44 2.96
Class A distribution rate at December 31, 2006: 4.49%/6/
(For current distribution rate information, please call American FundsLine at 800/325-3590.)

/6/ Reflects a fee waiver (4.45% without the waiver) as described in the Annual
Fund Operating Expenses table under "Fees and expenses of the fund." Calculated
by annualizing dividends paid by the fund over one month plus any special
dividends paid during the month, and dividing this amount by the fund's average
net asset value for the month.

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

[begin pie chart]

Holdings by type of investment as of August 31, 2007

Mortgage-backed obligations 52.7%
U.S. Treasury bonds & notes 26.9%
Federal agency bonds & notes 9.7%
Asset-backed obligations 5.3%
Short-term securities & other assets less liabilities 5.4%
[end pie chart]

QUALITY BREAKDOWN AS OF AUGUST 31, 2007
PERCENT OF NET ASSETS

U.S. government obligations* 31.8%
-------------------------------------------------------------------------------
Federal agencies 45.5
-------------------------------------------------------------------------------
Aaa/AAA 17.3
-------------------------------------------------------------------------------
Short-term securities and other assets less liabilities 5.4

* These securities are guaranteed by the full faith and credit of the U.S.
government.

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.

U.S. Government Securities Fund / Prospectus

<PAGE>

Management and organization

INVESTMENT ADVISER

Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including 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." As described more fully in the fund's statement of
additional information, the management fee is based on the daily net assets of
the fund and the fund's monthly gross investment income. 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, 2007.

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 generally function
separately from each other with respect to investment research activities and
make investment and proxy voting decisions on a separate basis.

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.

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

PORTFOLIO HOLDINGS

Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the lower
portion of the fund's details 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.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
decide how their respective segments will be invested. 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.

U.S. Government Securities Fund / Prospectus

<PAGE>

The primary individual portfolio counselors for U.S. Government Securities Fund
are:

PRIMARY TITLE WITH PORTFOLIO
PORTFOLIO INVESTMENT ADVISER COUNSELOR'S
PORTFOLIO COUNSELOR/ COUNSELOR (OR AFFILIATE) ROLE IN
FUND TITLE EXPERIENCE AND INVESTMENT MANAGEMENT
(IF APPLICABLE) IN THIS FUND EXPERIENCE OF THE FUND
--------------------------------------------------------------------------------------

JOHN H. SMET 21 years Senior Vice President Serves as a
President and Trustee - Fixed Income, fixed-income portfolio
Capital Research and counselor
Management Company

Investment
professional for 25
years in total;
24 years with Capital
Research and
Management Company or
affiliate
--------------------------------------------------------------------------------------
THOMAS H. HOGH 11 years Senior Vice President Serves as a
Vice President - Fixed Income, fixed-income portfolio
Capital Research counselor
Company

Investment
professional for 21
years in total;
18 years with Capital
Research and
Management Company or
affiliate
--------------------------------------------------------------------------------------
MARK R. MACDONALD 1 year Senior Vice President Serves as a
- Fixed Income, and fixed-income portfolio
Director, Capital counselor
Research and
Management Company

Investment
professional for 22
years in total;
13 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 can be found in the
statement of additional information.

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

Shareholder information

SHAREHOLDER SERVICES

American Funds Service Company, 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. For your convenience, American Funds Service
Company has four service centers across the country.

AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
Call toll-free from anywhere in the 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]

Western Western Central Eastern Central Eastern
service center service center service center service center
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 25065 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Santa Ana, San Antonio, Texas Indianapolis, Indiana Norfolk, Virginia
California 78265-9522 46206-6007 23501-2280
92799-5065 Fax: 210/474-4352 Fax: 317/735-6636 Fax: 757/670-4761
Fax: 714/671-7133

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, B,
C and F 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.

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 shares are structured
similarly to the corresponding Class A, B, C and F 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

. availability of share classes:

-- Class B and 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, employer-sponsored 403(b) plans, and money
purchase pension and profit-sharing plans; and

-- Class F and 529-F 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
SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR 529-F
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 529-A shares, may not exceed
.50% annually)
Dividends generally higher than other classes due to lower
annual expenses, but may be lower than F shares,
depending on relative expenses
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 A and F shares due to higher
12b-1 fees and other expenses, but higher than C
shares due to lower other expenses
Purchase maximum see the discussion regarding purchase minimums and
maximums in "Purchase and exchange of shares"
Conversion automatic conversion to A or 529-A shares after eight
years, 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 F shares after 10 years,
reducing future annual expenses (529-C shares will not
convert to 529-F 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 529-B and 529-C shares due to
lower 12b-1 fees, but lower than 529-A and 529-F
shares due to higher 12b-1 fees
Purchase maximum none
Conversion none
CLASS F 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 B and C shares due to lower
12b-1 fees, and may be higher than A shares, depending
on relative expenses
Purchase maximum none
Conversion none

U.S. Government Securities Fund / Prospectus

<PAGE>

Purchase and exchange of shares

THE FUND'S TRANSFER AGENT, ON BEHALF OF THE FUND AND AMERICAN FUNDS
DISTRIBUTORS, 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.

PURCHASE OF CLASS A, B AND C SHARES

You may generally open an account and purchase Class A, B 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.

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 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.

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 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 SHARES TO THE CORRESPONDING 529 SHARE CLASS, PARTICULARLY IN THE CASE OF
UNIFORM GIFTS TO MINORS ACT OR

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

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 funds 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" 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.

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 (including
redemptions that are part of an exchange transaction) having a value of $5,000
or more from the fund will be precluded from investing in the fund (including
investments that are part of an exchange transaction) for 30 calendar days after
the redemption transaction. Under the fund's purchase blocking policy, certain
purchases will not be prevented and certain redemptions will not trigger a

U.S. Government Securities Fund / Prospectus

<PAGE>

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 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 procedures that American Funds Service Company believes 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.

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 FUND'S AND AMERICAN FUNDS
DISTRIBUTORS' RIGHT 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.

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

PURCHASE MINIMUMS AND MAXIMUMS

PURCHASE MINIMUMS FOR ALL CLASSES OF SHARES/1/
-------------------------------------------------------------------------------

To establish an account (including retirement plan and 529 $ 250/2/
accounts)
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 25
deduction
savings plan account or employer-sponsored 529 account
-------------------------------------------------------------------------------
PURCHASE MAXIMUM PER TRANSACTION FOR CLASS B SHARES 50,000
-------------------------------------------------------------------------------
PURCHASE MAXIMUM PER TRANSACTION FOR CLASS C SHARES 500,000

/1/ Purchase minimums may be waived in certain cases. Please see the statement of
additional information for details.
/2/ 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 shares
will reflect the maximum applicable contribution limits under state law. See the
applicable program description for more information.

If you have significant American Funds holdings, you may not be eligible to
invest in Class B or C shares (or their corresponding 529 share classes).
Specifically, you may not purchase Class B or 529-B shares if you are eligible
to purchase Class A or 529-A shares at the $100,000 or higher sales charge
discount rate, and 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 (i.e., at net asset value). See "Sales charge reductions
and waivers" below and the statement of additional information for more
information regarding sales charge discounts.

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.

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

U.S. Government Securities Fund / Prospectus

<PAGE>

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. The "offering price," the price you pay to buy
shares, includes any applicable sales charge, which will be deducted directly
from your investment. Shares acquired through reinvestment of dividends or
capital gain distributions are not subject to an initial sales charge.

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.

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.

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

CLASS A 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" below 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" below).

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.
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." Plans investing in Class A shares with a sales charge
may purchase additional Class A shares in accordance with the sales charge
table above.

Employer-sponsored retirement plans that invested in Class A shares without any
sales charge on or before March 31, 2004, and that continue to meet the
eligibility requirements in effect as of that date for purchasing Class A
shares at net asset value,

U.S. Government Securities Fund / Prospectus

<PAGE>

may continue to purchase Class A shares without any initial or contingent
deferred sales charge.

CLASS B AND C SHARES

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

For Class 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.

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.

Any contingent deferred sales charge paid by you on investments in 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" below. The contingent deferred sales
charge is based on the original purchase cost or the current market value of the
shares being sold, whichever is less. For purposes of determining the contingent
deferred sales charge, if you sell only some of your shares, shares that are not
subject to any contingent deferred sales charge will be sold first, followed by
shares that you have owned the longest.

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

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 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
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

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

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

IN ADDITION TO THE INFORMATION BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
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 these
purposes. 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 funds are 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:

U.S. Government Securities Fund / Prospectus

<PAGE>

. 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 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 direct purchases of American Funds money market
funds) 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 (excluding capital
appreciation) less any withdrawals. Please see the statement of additional
information for 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

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 American Funds non-money market funds 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" above
for more information.

RIGHT OF REINVESTMENT

Please see "How to sell shares" below for information on how to reinvest
proceeds from a redemption, dividend payment or capital gain distribution
without a sales charge.

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;

. 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).

U.S. Government Securities Fund / Prospectus

<PAGE>

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover. 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 the prospectus and
statement of additional information.

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

Plans of distribution

The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of 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, 529-B, C and 529-C shares; up to .75% for Class 529-E
shares; and up to .50% for Class F and 529-F shares. For all share classes, 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." 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.

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 75 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 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the 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 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.

U.S. Government Securities Fund / Prospectus

<PAGE>

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.

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

. 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).

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 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, reinvestment can be made without a sales charge if
the new receiving account has the same registration as the closed account.
Proceeds from a Class B share redemption made during the contingent deferred
sales charge period will be reinvested in Class A shares. 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

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

credited to your account. Redemption proceeds of Class A shares representing
direct purchases in American Funds money market funds that are reinvested in
non-money market 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 and accepted by American Funds Service Company. 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. 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." This paragraph does not apply to certain rollover
investments as described under "Rollovers from retirement plans to IRAs."

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 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

Dividends and capital gain distributions you receive from the fund will be
subject to federal income tax and may also be subject to state or local taxes --
unless you are exempt from taxation.

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.

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

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

Financial highlights/1/

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
footnotes to the Annual Fund Operating Expenses table under "Fees and expenses
of the fund" in this prospectus and the fund's 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 (LOSS) FROM INVESTMENT OPERATIONS/2/
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 8/31/2007 $13.32 $.59 $ .03 $.61 $(.59) $13.35
Year ended 8/31/2006 13.72 .52 (.39) .13 (.53) 13.32
Year ended 8/31/2005 13.74 .44 --/5/ .44 (.46) 13.72
Year ended 8/31/2004 13.59 .43 .17 .60 (.45) 13.74
Year ended 8/31/2003 13.73 .42 (.10) .32 (.46) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS B:
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 --/5/ .34 (.36) 13.72
Year ended 8/31/2004 13.59 .33 .17 .50 (.35) 13.74
Year ended 8/31/2003 13.73 .32 (.10) .22 (.36) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS C:
Year ended 8/31/2007 13.32 .49 .03 .51 (.49) 13.35
Year ended 8/31/2006 13.72 .42 (.39) .03 (.43) 13.32
Year ended 8/31/2005 13.74 .33 --/5/ .33 (.35) 13.72
Year ended 8/31/2004 13.59 .32 .17 .49 (.34) 13.74
Year ended 8/31/2003 13.73 .31 (.10) .21 (.35) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS F:
Year ended 8/31/2007 $13.32 $.60 $ .03 $.62 $(.60) $13.35
Year ended 8/31/2006 13.72 .53 (.39) .14 (.54) 13.32
Year ended 8/31/2005 13.74 .44 --/5/ .44 (.46) 13.72
Year ended 8/31/2004 13.59 .43 .17 .60 (.45) 13.74
Year ended 8/31/2003 13.73 .42 (.10) .32 (.46) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS 529-A:
Year ended 8/31/2007 13.32 .58 .03 .61 (.58) 13.35
Year ended 8/31/2006 13.72 .52 (.39) .13 (.53) 13.32
Year ended 8/31/2005 13.74 .43 --/5/ .43 (.45) 13.72
Year ended 8/31/2004 13.59 .42 .17 .59 (.44) 13.74
Year ended 8/31/2003 13.73 .42 (.10) .32 (.46) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS 529-B:
Year ended 8/31/2007 13.32 .48 .03 .50 (.48) 13.35
Year ended 8/31/2006 13.72 .41 (.39) .02 (.42) 13.32
Year ended 8/31/2005 13.74 .32 --/5/ .32 (.34) 13.72
Year ended 8/31/2004 13.59 .31 .17 .48 (.33) 13.74
Year ended 8/31/2003 13.73 .29 (.10) .19 (.33) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS 529-C:
Year ended 8/31/2007 13.32 .48 .03 .50 (.48) 13.35
Year ended 8/31/2006 13.72 .41 (.39) .02 (.42) 13.32
Year ended 8/31/2005 13.74 .32 --/5/ .32 (.34) 13.72
Year ended 8/31/2004 13.59 .31 .17 .48 (.33) 13.74
Year ended 8/31/2003 13.73 .29 (.10) .19 (.33) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS 529-E:
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 --/5/ .39 (.41) 13.72
Year ended 8/31/2004 13.59 .38 .17 .55 (.40) 13.74
Year ended 8/31/2003 13.73 .37 (.10) .27 (.41) 13.59
-------------------------------------------------------------------------------------------------------------------------
CLASS 529-F:
Year ended 8/31/2007 13.32 .61 .03 .64 (.61) 13.35
Year ended 8/31/2006 13.72 .54 (.39) .15 (.55) 13.32
Year ended 8/31/2005 13.74 .43 --/5/ .43 (.45) 13.72
Year ended 8/31/2004 13.59 .41 .17 .58 (.43) 13.74
Period from 10/11/2002 to 8/31/2003 13.83 .30 (.15) .15 (.39) 13.59
(The Financial Highlights table continues on the following page.)

Total
return/3/,/4/
----------------------------------------------------

CLASS A:
Year ended 8/31/2007 4.72%
Year ended 8/31/2006 1.04
Year ended 8/31/2005 3.23
Year ended 8/31/2004 4.49
Year ended 8/31/2003 2.29
----------------------------------------------------
CLASS B:
Year ended 8/31/2007 3.99
Year ended 8/31/2006 .32
Year ended 8/31/2005 2.51
Year ended 8/31/2004 3.72
Year ended 8/31/2003 1.58
----------------------------------------------------
CLASS C:
Year ended 8/31/2007 3.94
Year ended 8/31/2006 .27
Year ended 8/31/2005 2.45
Year ended 8/31/2004 3.65
Year ended 8/31/2003 1.51
----------------------------------------------------
CLASS F:
Year ended 8/31/2007 4.80%
Year ended 8/31/2006 1.10
Year ended 8/31/2005 3.24
Year ended 8/31/2004 4.45
Year ended 8/31/2003 2.29
----------------------------------------------------
CLASS 529-A:
Year ended 8/31/2007 4.66
Year ended 8/31/2006 1.00
Year ended 8/31/2005 3.18
Year ended 8/31/2004 4.40
Year ended 8/31/2003 2.31
----------------------------------------------------
CLASS 529-B:
Year ended 8/31/2007 3.85
Year ended 8/31/2006 .19
Year ended 8/31/2005 2.34
Year ended 8/31/2004 3.54
Year ended 8/31/2003 1.38
----------------------------------------------------
CLASS 529-C:
Year ended 8/31/2007 3.86
Year ended 8/31/2006 .20
Year ended 8/31/2005 2.35
Year ended 8/31/2004 3.55
Year ended 8/31/2003 1.39
----------------------------------------------------
CLASS 529-E:
Year ended 8/31/2007 4.38%
Year ended 8/31/2006 .73
Year ended 8/31/2005 2.88
Year ended 8/31/2004 4.08
Year ended 8/31/2003 1.92
----------------------------------------------------
CLASS 529-F:
Year ended 8/31/2007 4.90
Year ended 8/31/2006 1.20
Year ended 8/31/2005 3.20
Year ended 8/31/2004 4.33
Period from 10/11/2002 to 8/31/2003 1.04
(The Financial Highlights table continues on the following page.)

U.S. Government Securities Fund / Prospectus

<PAGE>

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 net
(in millions) waivers waivers/4/ assets/4/
----------------------------------------------------------------------------------------------

CLASS A:
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
Year ended 8/31/2004 1,900 .71 .71 3.14
Year ended 8/31/2003 2,374 .76 .76 3.01
----------------------------------------------------------------------------------------------
CLASS B:
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
Year ended 8/31/2004 221 1.47 1.47 2.38
Year ended 8/31/2003 291 1.46 1.46 2.23
----------------------------------------------------------------------------------------------
CLASS C:
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
Year ended 8/31/2004 122 1.53 1.53 2.32
Year ended 8/31/2003 170 1.54 1.54 2.19
----------------------------------------------------------------------------------------------
CLASS F:
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
Year ended 8/31/2004 33 .75 .75 3.04
Year ended 8/31/2003 23 .75 .75 3.00
----------------------------------------------------------------------------------------------
CLASS 529-A:
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
Year ended 8/31/2004 34 .80 .80 3.02
Year ended 8/31/2003 31 .68 .68 2.91
----------------------------------------------------------------------------------------------
CLASS 529-B:
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
Year ended 8/31/2004 13 1.64 1.64 2.20
Year ended 8/31/2003 14 1.63 1.63 1.92
----------------------------------------------------------------------------------------------
CLASS 529-C:
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
Year ended 8/31/2004 21 1.63 1.63 2.20
Year ended 8/31/2003 20 1.62 1.62 1.99
----------------------------------------------------------------------------------------------
CLASS 529-E:
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
Year ended 8/31/2004 2 1.11 1.11 2.71
Year ended 8/31/2003 2 1.10 1.10 2.48
----------------------------------------------------------------------------------------------
CLASS 529-F:
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
Year ended 8/31/2004 1 .86 .86 2.94
Period from 10/11/2002 to 8/31/2003 1 .84/6/ .84/6/ 2.49/6/
(The Financial Highlights table continues on the following page.)

U.S. Government Securities Fund / Prospectus

<PAGE>

YEAR ENDED AUGUST 31
2007 2006 2005 2004 2003
------------------------------------------------------------------------------------

PORTFOLIO TURNOVER
RATE FOR ALL CLASSES 110% 146% 104% 72% 82%
OF SHARES

/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 all sales charges, including contingent deferred sales
charges.

/4/ 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.

/5/ Amount less than $.01.
/6/ Annualized.

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 ADVISER MARKETING American Funds Distributors
800/421-9900
FOR 529 PLANS American Funds Service Company
800 /421-0180, ext. 529
FOR 24-HOUR INFORMATION American FundsLine
800/325-3590
americanfunds.com

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

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.

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 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 on all aspects
of 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 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, DC
(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,
DC 20549-0102. The current SAI and shareholder reports are also available, free
of charge, on americanfunds.com.

HOUSEHOLD MAILINGS Each year you are automatically sent an updated 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.

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 on its website at sipc.org or by calling 202/371-8300.

[logo - recycled bug]
Printed on recycled paper

Printed on recycled paper
MFGEPR-922-1107P Litho in USA CGD/B/8010 Investment Company File No. 811-04318
----------------------------------------------------------------------------------
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/

PROSPECTUS
ADDENDUM

November 1, 2007

<PAGE>

Class R-5 shares of U.S. Government Securities Fund are available to certain
clients of the Personal Investment Management group of Capital Guardian Trust
Company./SM/ Accordingly, for these shareholders, the following information
should be read in conjunction with the prospectus for this fund.

Risk/Return summary -- pages 1-4

INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
1 YEAR LIFETIME/*/
---------------------------------------------------------------------

CLASS R-5 -- FIRST SOLD 5/15/02
Before taxes 3.49% 4.11%

* Lifetime results are measured from the date the share class was first sold.

Fees and expenses of the fund -- pages 5-6

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.

SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS R-5
-------------------------------------------------------------------------------

Maximum initial sales charge on purchases (as a percentage of none
offering price)
-------------------------------------------------------------------------------
Maximum sales charge on reinvested dividends none
-------------------------------------------------------------------------------
Maximum contingent deferred sales charge none
-------------------------------------------------------------------------------
Redemption or exchange fees none

ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
CLASS R-5
--------------------------------------------------------------

Management fees/1/ 0.32%
--------------------------------------------------------------
Distribution and/or service (12b-1) fees none
--------------------------------------------------------------
Other expenses/2/ 0.13
--------------------------------------------------------------
Total annual fund operating expenses/1/ 0.45

/1/ The fund's investment adviser is currently waiving 10% of its management fee.
The waiver may be discontinued at any time, in consultation with the fund's
board, but it is expected to continue at this level until further review. The
fund's investment adviser and board intend to review the waiver as
circumstances warrant. Management fees and total expenses in the table do not
reflect any waiver. Information regarding the effect of any waiver on total
annual fund operating expenses can be found in the Financial Highlights table
in this prospectus addendum and in the fund's annual report.

/2/ A portion of the fund's expenses may be used to pay third parties (including
affiliates of the fund's investment adviser) that provide recordkeeping
services to retirement plans invested in the fund.

<PAGE>

EXAMPLE

The example below 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, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The example does not reflect the impact of any fee waivers
or expense reimbursements.

Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------------------------------------------------------------

Class R-5 $46 $144 $252 $567
-------------------------------------------------------------

Purchase and exchange of shares -- pages 17-20

PURCHASE OF CLASS R-5 SHARES

Class R-5 shares of the fund are available to certain clients of the Personal
Investment Management group of Capital Guardian Trust Company. Please contact
Capital Guardian Trust Company if you wish to purchase Class R-5 shares of the
fund.

Sales charges -- pages 21-23

CLASS R-5 SHARES

Class R-5 shares are sold without any initial or contingent deferred sales
charge. In addition, no compensation is paid to investment dealers on sales of
Class R-5 shares.

<PAGE>

Financial highlights -- pages 32-34

The Financial Highlights table is intended to help you understand the fund's
results. Certain information reflects financial results for a single share. The
total returns in the table represent the rate that an investor would have earned
or lost on an investment in the fund (assuming reinvestment of all dividends and
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 footnotes to the Annual Fund Operating Expenses table under "Fees and
expenses of the fund" in this prospectus addendum and the fund's 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 (LOSS) FROM INVESTMENT OPERATIONS/1/
Net
gains
(losses) on
Net securities
asset (both Dividends Net asset
value, Net realized Total from (from net value,
beginning investment and investment investment end of Total
of year income unrealized) operations income) year return/2/
-----------------------------------------------------------------------------------------------------------------------

CLASS R-5:
Year ended 8/31/2007 $13.32 $.63 $ .03 $.66 $(.63) $13.35 5.07%
Year ended 8/31/2006 13.72 .56 (.39) .17 (.57) 13.32 1.36
Year ended 8/31/2005 13.74 .48 --/3/ .48 (.50) 13.72 3.56
Year ended 8/31/2004 13.59 .47 .17 .64 (.49) 13.74 4.78
Year ended 8/31/2003 13.73 .46 (.10) .36 (.50) 13.59 2.63

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

CLASS R-5:
Year ended 8/31/2007 $68 .45% .41% 4.79%
Year ended 8/31/2006 10 .45 .42 4.24
Year ended 8/31/2005 8 .43 .41 3.50
Year ended 8/31/2004 7 .42 .42 3.39
Year ended 8/31/2003 9 .43 .43 3.31

YEAR ENDED AUGUST 31
2007 2006 2005 2004 2003
-------------------------------------------------------------------------------

PORTFOLIO TURNOVER RATE
FOR ALL CLASSES OF 110% 146% 104% 72% 82%
SHARES

/1/ Based on average shares outstanding.

/2/ 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.

/3/ Amount less than $.01.

<PAGE>

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

Part B
Statement of Additional Information

November 1, 2007

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, 2007. 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.

TABLE OF CONTENTS

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

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 2
Fundamental policies and investment restrictions. . . . . . . . . . 7
Management of the fund . . . . . . . . . . . . . . . . . . . . . . 10
Execution of portfolio transactions . . . . . . . . . . . . . . . . 29
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 31
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 34
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 38
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Sales charge reductions and waivers . . . . . . . . . . . . . . . . 44
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Shareholder account services and privileges . . . . . . . . . . . . 49
General information . . . . . . . . . . . . . . . . . . . . . . . . 52
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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.

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."

U.S. GOVERNMENT OBLIGATIONS -- U.S. government obligations are securities 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 BACKED BY "FULL FAITH AND CREDIT" -- 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

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

Bank, Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National
Mortgage Association (Fannie Mae), Tennessee Valley Authority and Federal Farm
Credit Bank System.

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 accrue interest at the
applicable coupon rate over a specified time period. 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.

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 would 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, the 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 evaluate 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 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

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

ratings categories should be read to include any security within that category,
without giving consideration to the modifier. 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 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.

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

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 non-U.S.
jurisdictions the repayment of the original bond principal upon the maturity of
an inflation-indexed bond is not guaranteed, and the amount repaid at maturity
of the bond to be less than par.

The interest rate for these 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.

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

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).

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.

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

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.

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 are 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.

A fund's portfolio turnover rate would equal 100% if each security in the fund's
portfolio were replaced once per year. The fund's portfolio turnover rates for
the fiscal years ended August 31, 2007 and 2006 were 110% and 146%,
respectively. Portfolio turnover increased in 2007 as the fund sought to protect
shareholder principal and seek attractive investment opportunities during a
period of rising interest rates. See "Financial highlights" in the prospectus
for the fund's annual portfolio turnover rate for each of the last five fiscal
years.

FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

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

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

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

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;

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;

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

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 9
<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 15 Carnival Corporation
Capen, Jr., 73 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, 74 Private investor; former 21 AECOM Technology
Trustee (1985) President and CEO, The Corporation;
Mission Group (non-utility Ducommun Incorporated;
holding company, subsidiary IHOP Corporation;
of Southern California Southwest Water Company
Edison Company)
--------------------------------------------------------------------------------------------------------
James G. Ellis, 60 Vice Provost, Globalization, 12 Genius Products;
Trustee (2006) University of Southern Professional Business Bank
California; Dean and
Professor, Marshall School
of Business, University of
Southern California
--------------------------------------------------------------------------------------------------------
Martin Fenton, 72 Chairman of the Board, 18 None
Chairman of the Board Senior Resource Group LLC
(Independent and Non- (development and management
Executive) (1989) of senior living
communities)
--------------------------------------------------------------------------------------------------------
Leonard R. Fuller, 61 President and CEO, Fuller 16 None
Trustee (1994) Consulting (financial
management consulting firm)
--------------------------------------------------------------------------------------------------------
R. Clark Hooper, 61 Private investor; former 18 JPMorgan Value Opportunities
Trustee (2005) President, Dumbarton Group Fund; The Swiss Helvetia
LLC (securities industry Fund Inc.
consulting); former
Executive Vice President -
Policy and Oversight, NASD
--------------------------------------------------------------------------------------------------------
Richard G. Newman, 72 Chairman of the Board, AECOM 14 Sempra Energy;
Trustee (1991) Technology Corporation Southwest Water Company
(engineering, consulting and
professional technical
services)
--------------------------------------------------------------------------------------------------------
Frank M. Sanchez, 64 Principal, The Sanchez 13 None
Trustee (1999) Family Corporation dba
McDonald's Restaurants
(McDonald's licensee)
--------------------------------------------------------------------------------------------------------
Steadman Upham, 58 President and Professor of 14 None
Trustee (2007) Anthropology, The University
of Tulsa; former President
and Professor of
Archaeology, Claremont
Graduate University
--------------------------------------------------------------------------------------------------------

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

"INTERESTED" TRUSTEES/5/,/6/

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, 77 Senior Vice President - 13 None
Vice Chairman of the Fixed Income, Capital
Board (1985) Research and Management
Company; Director, Capital
Research and Management
Company
-------------------------------------------------------------------------------------------------------
Paul G. Haaga, Jr., 58 Vice Chairman of the Board, 14 None
Vice Chairman of the Capital Research and
Board (1985) Management Company; Senior
Vice President - Fixed
Income, Capital Research
and Management Company;
Director, The Capital Group
Companies, Inc.*
-------------------------------------------------------------------------------------------------------
John H. Smet, 51 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 11
<PAGE>

OTHER OFFICERS/6/

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, 44 Senior Vice President - Fixed Income, Capital Research
Vice President (2004) Company*
-------------------------------------------------------------------------------
Kristine M. Vice President and Senior Counsel - Fund Business
Nishiyama, 37 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,
43 Capital Research and Management Company
Secretary (1994)
-------------------------------------------------------------------------------
Ari M. Vinocor, 33 Vice President - Fund Business Management Group,
Treasurer (2007) Capital Research and Management Company
-------------------------------------------------------------------------------
Courtney R. Taylor, Assistant Vice President - Fund Business Management
32 Group, Capital Research and Management Company
Assistant Secretary
(2006)
-------------------------------------------------------------------------------
Sharon G. Moseley, 39 Vice President - Fund Business Management Group,
Assistant Treasurer Capital Research and Management Company
(2002)
-------------------------------------------------------------------------------

* 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 15
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 to investors in 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) 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 2005 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.
/6/ "Interested persons" of the fund within the meaning of the 1940 Act, on the
basis of their affiliation with the fund's investment adviser, Capital Research
and Management Company, or 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 12
<PAGE>

FUND SHARES OWNED BY TRUSTEES AS OF DECEMBER 31, 2006

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

"INDEPENDENT" TRUSTEES
-------------------------------------------------------------------------------
Richard G. Capen, Jr. None Over $100,000
-------------------------------------------------------------------------------
H. Frederick Christie None Over $100,000
-------------------------------------------------------------------------------
James G. Ellis None None
-------------------------------------------------------------------------------
Martin Fenton $10,001 - $50,000 Over $100,000
-------------------------------------------------------------------------------
Leonard R. Fuller None $50,001 - $100,000
-------------------------------------------------------------------------------
R. Clark Hooper None $50,001 - $100,000
-------------------------------------------------------------------------------
Richard G. Newman $1 - $10,000 Over $100,000
-------------------------------------------------------------------------------
Frank M. Sanchez $1 - $10,000 $10,001 - $50,000
-------------------------------------------------------------------------------
Steadman Upham None/2/ Over $100,000
-------------------------------------------------------------------------------
"INTERESTED" TRUSTEES
-------------------------------------------------------------------------------
Abner D. Goldstine $50,001 - $100,000 Over $100,000
-------------------------------------------------------------------------------
Paul G. Haaga, Jr. $10,001 - $50,000 Over $100,000
-------------------------------------------------------------------------------
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/ Dr. Upham was elected trustee on August 9, 2007.

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 $3,000 to $5,240, 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

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

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.

TRUSTEE COMPENSATION PAID DURING THE FISCAL YEAR ENDED AUGUST 31, 2007

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./3/ $6,510 $201,712
-----------------------------------------------------------------------------------------------------
H. Frederick Christie/3/ 6,016 414,860
-----------------------------------------------------------------------------------------------------
James G. Ellis 5,605 87,104
-----------------------------------------------------------------------------------------------------
Martin Fenton/3/ 9,036 373,942
-----------------------------------------------------------------------------------------------------
Leonard R. Fuller/3/ 6,353 302,634
-----------------------------------------------------------------------------------------------------
R. Clark Hooper 6,386 306,135
-----------------------------------------------------------------------------------------------------
Richard G. Newman 7,972 215,386
-----------------------------------------------------------------------------------------------------
Frank M. Sanchez 9,604 118,811
-----------------------------------------------------------------------------------------------------
Steadman Upham None/4/ 112,184
-----------------------------------------------------------------------------------------------------

/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, 2007 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 15
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 to investors in 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 2007
fiscal year for participating trustees is as follows: Richard G. Capen, Jr.
($12,842), H. Frederick Christie ($21,382), Martin Fenton, ($46,014) and
Leonard R. Fuller ($42,856). Amounts deferred and accumulated earnings thereon
are not funded and are general unsecured liabilities of the fund until paid to
the trustees.
/4/ Dr. Upham was elected trustee on August 9, 2007.

As of October 1, 2007, 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

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

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.

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.

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

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 2007 fiscal year.

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 2007 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 2007
fiscal year.

PROXY VOTING PROCEDURES AND GUIDELINES -- The fund and its investment adviser
have adopted Proxy Voting Guidelines (the "Guidelines") with respect to voting
proxies of securities held by the fund,other American Funds, Endowments and
American Funds Insurance Series. 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. Non-U.S. proxies also are voted, provided there is
sufficient time and information available. After a proxy is received, the
investment adviser prepares a summary of the proposals in the proxy. A
discussion of any potential conflicts of interest is also included in the
summary. For proxies of securities managed by a particular investment division
of the investment

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

adviser, the initial voting recommendation is made by one or more research
analysts in that investment division familiar with the company and industry. A
second recommendation is made by a proxy coordinator (a senior investment
professional) within the appropriate investment division based on the
individual's knowledge of the Guidelines and familiarity with proxy-related
issues. The proxy summary and voting recommendations are then sent to the
appropriate proxy voting committee for the final voting decision.

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 Guidelines, 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 Guidelines 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 at americanfunds.com 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 Guidelines is available upon request,
free of charge, by calling American Funds Service Company at 800/421-0180 or
visiting the American Funds website.

DIRECTOR MATTERS -- The election of a company's slate of nominees for
director is generally 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 may also be
supported. Typically, proposals to declassify the board (elect all
directors annually) are supported based on the belief that this increases
the directors' sense of accountability to shareholders.

SHAREHOLDER RIGHTS -- Proposals to repeal an existing poison pill, to
provide for confidential voting and to provide for cumulative voting are
usually supported. 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 are not typically 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

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

dilution on existing shareholders from past and future equity awards.
Compensation 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 are generally 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, 2007. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.

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

Edward D. Jones & Co. Class A 7.49%
201 Progress Parkway
Maryland Heights, MO 63043-3009
----------------------------------------------------------------------------
Merrill Lynch, Pierce, Fenner & Smith Class C 8.99
4800 Deer Lake Drive, E., Floor 2 Class R-3 6.15
Jacksonville, FL 32246-6484
----------------------------------------------------------------------------
Capital Bank and Trust Class R-4 57.31
8515 E. Orchard Road, #2T2
Greenwood Village, CO 80111-5002
----------------------------------------------------------------------------
Capital Bank and Trust Class R-4 5.97
8515 E. Orchard Road, #2T2
Greenwood Village, CO 80111-5002
----------------------------------------------------------------------------
American Funds 2020 Target Date Retirement Fund Class R-5 24.27
P.O. Box 1570
Norfolk, VA 23501-1570
----------------------------------------------------------------------------
American Funds 2015 Target Date Retirement Fund Class R-5 22.21
P.O. Box 1570
Norfolk, VA 23501-1570
----------------------------------------------------------------------------
American Funds 2010 Target Date Retirement Fund Class R-5 10.22
P.O. Box 1570
Norfolk, VA 23501-1570
----------------------------------------------------------------------------
American Funds 2025 Target Date Retirement Fund Class R-5 8.80
P.O. Box 1570
Norfolk, VA 23501-1570
----------------------------------------------------------------------------
American Funds 2030 Target Date Retirement Fund Class R-5 6.81
P.O. Box 1570
Norfolk, VA 23501-1570
----------------------------------------------------------------------------

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

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 generally function separately
from each other with respect to investment research activities and make
investment and proxy voting decisions on a separate 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.

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 may also make investment decisions for other mutual funds advised by
Capital Research and Management Company.

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 will vary depending on the
individual's portfolio results, contributions to the organization and other
factors. In order to encourage a long-term focus, bonuses based on investment
results are calculated by comparing pretax total returns to relevant benchmarks
over both the most recent year and a four-year rolling average, with the greater
weight placed on the four-year rolling average. For portfolio counselors,
benchmarks may include measures of the marketplaces in which the relevant 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 also separately compensates analysts for the quality of
their research efforts. The benchmarks against which U.S. Government Securities
Fund portfolio counselors are measured include: Citigroup Treasury/ Government
Sponsored/Mortgage Index.

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 19
<PAGE>

THE FOLLOWING TABLE REFLECTS INFORMATION AS OF AUGUST 31, 2007:

NUMBER NUMBER
OF OTHER OF OTHER NUMBER
REGISTERED POOLED OF OTHER
INVESTMENT INVESTMENT ACCOUNTS
COMPANIES (RICS) VEHICLES (PIVS) THAT
THAT THAT PORTFOLIO
PORTFOLIO PORTFOLIO COUNSELOR
DOLLAR RANGE COUNSELOR COUNSELOR MANAGES
OF FUND MANAGES MANAGES (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 $290.0 None 3 $2.47
$500,000
------------------------------------------------------------------------------------------
Thomas H. Hogh None/5/ 3 $113.1 5 $0.75 10 $1.32
------------------------------------------------------------------------------------------
Mark R. $100,001 - 4 $239.8 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
indicative of 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 indicative of 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.
/6/ Holdings shown for Mark R. Macdonald are as of September 30, 2006.

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, 2008, 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).

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

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:

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

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

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, 2007, 2006 and 2005, the investment
adviser was entitled to receive from the fund management fees of $7,659,000,
$7,351,000 and $7,212,000, respectively. After giving effect to the management
fee waivers/expense reimbursements described below, the fund paid the investment
adviser management fees of $6,893,000 (a reduction of $766,000), $6,616,000 (a
reduction of $735,000) and $6,699,000 (a reduction of $513,000) for the fiscal
years ended August 31, 2007, 2006 and 2005, 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. Beginning April 1, 2005, this waiver increased
to 10% of the management fees that the investment adviser is otherwise entitled
to receive and this waiver is expected to continue at this level until further
review. As a result of this waiver, management fees are reduced similarly for
all classes of shares of the fund.

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,
2008, 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 Service Company, 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 and oversees the activities performed
by third parties providing such services. For Class R-1, Class R-2 and Class R-3
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, 2007, the total fees paid by the investment
adviser were $216,000.

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 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

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

does not retain more than 0.05% of the average daily net assets for each
applicable share class. For Class R-5 shares, the administrative services fee is
calculated at the annual rate of up to 0.10% of the average daily net assets.
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
contained in a Shareholder Services Agreement between the fund and American
Funds Service Company.

During the 2007 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:

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

CLASS C $211,000
-----------------------------------------------------------------
CLASS F 98,000
-----------------------------------------------------------------
CLASS 529-A 65,000
-----------------------------------------------------------------
CLASS 529-B 23,000
-----------------------------------------------------------------
CLASS 529-C 42,000
-----------------------------------------------------------------
CLASS 529-E 6,000
-----------------------------------------------------------------
CLASS 529-F 4,000
-----------------------------------------------------------------
CLASS R-1 12,000
-----------------------------------------------------------------
CLASS R-2 609,000
-----------------------------------------------------------------
CLASS R-3 269,000
-----------------------------------------------------------------
CLASS R-4 51,000
-----------------------------------------------------------------
CLASS R-5 24,000
-----------------------------------------------------------------

PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds Distributors,
Inc. (the "Principal Underwriter") is the principal underwriter of the fund's
shares. The Principal Underwriter is located at 333 South Hope Street, Los
Angeles, CA 90071; 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 from sales of the fund's shares. For
Class A and 529-A shares, the Principal Underwriter receives commission revenue
consisting of that portion 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, the Principal Underwriter sells the rights to the 12b-1 fees
paid by the fund for distribution expenses to a third party and receives the
revenue remaining after compensating investment dealers for sales of Class B and
529-B shares. The fund also pays the Principal Underwriter for advancing the
immediate service fees paid to qualified dealers of Class B and 529-B shares.
For Class C and 529-C shares, the Principal Underwriter receives any contingent
deferred sales charges that apply during the first year after purchase. The fund
pays the Principal Underwriter for advancing the immediate service fees and
commissions paid to qualified dealers of Class C and 529-C shares. For Class

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

529-E shares, the fund pays the Principal Underwriter for advancing the
immediate service fees and commissions paid to qualified dealers. For Class F
and 529-F shares, the fund pays the Principal Underwriter for advancing the
immediate service fees paid to qualified dealers and advisers who sell Class F
and 529-F shares. For Class R-1, R-2, R-3 and R-4 shares, the fund pays the
Principal Underwriter for advancing the immediate service fees paid to qualified
dealers and advisers who sell Class R-1, R-2, R-3 and R-4 shares.

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 2007 $767,000 $2,997,000
2006 814,000 3,121,000
2005 914,000 3,487,000
-------------------------------------------------------------------------------------
CLASS B 2007 40,000 886,000
2006 52,000 357,000
2005 80,000 550,000
-------------------------------------------------------------------------------------
CLASS C 2007 -- 292,000
2006 8,000 259,000
2005 -- 254,000
-------------------------------------------------------------------------------------
CLASS 529-A 2007 39,000 148,000
2006 41,000 155,000
2005 47,000 179,000
-------------------------------------------------------------------------------------
CLASS 529-B 2007 4,000 28,000
2006 6,000 36,000
2005 11,100 72,000
-------------------------------------------------------------------------------------
CLASS 529-C 2007 -- 55,000
2006 113 41,000
2005 1,000 49,000
-------------------------------------------------------------------------------------

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

The fund has adopted plans of distribution (the "Plans") pursuant to rule 12b-1
under the 1940 Act. The Principal Underwriter receives amounts payable pursuant
to the Plans (see below). 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 financial interest in the operation
of the Plans or the Principal Underwriting Agreement. 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 selection and nomination of independent trustees are
committed to the discretion of the independent trustees during the existence of
the Plans. The Plans may not be amended to increase materially the amount spent
for distribution without shareholder approval. Plan expenses are reviewed by the
board of trustees quarterly and the Plans must be renewed annually by the board
of trustees.

Under the Plans, the fund may annually expend the following 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: (a) for Class A shares, up to 0.30% of the average daily
net assets attributable to Class A shares; (b) for Class 529-A shares, up to
0.50% of the average daily net assets attributable to Class 529-A shares; (c)
for Class B and 529-B shares, up to 1.00% of the average daily net assets
attributable to Class B and 529-B shares, respectively; (d) for Class C and
529-C shares, up to 1.00% of the average daily net assets attributable to Class
C and 529-C shares, respectively; (e) for Class 529-E shares, up to 0.75% of the
average daily net assets attributable to Class 529-E shares; (f) for Class F and
529-F shares, up to 0.50% of the average daily net assets attributable to Class
F and 529-F shares, respectively; (g) for Class R-1 shares, up to 1.00% of the
average daily net assets attributable to Class R-1 shares; (h) for Class R-2
shares, up to 1.00% of the average daily net assets attributable to Class R-2
shares; (i) for Class R-3 shares, up to 0.75% of the average daily net assets
attributable to Class R-3 shares; and (j) for Class R-4 shares, up to 0.50% of
the average daily net assets attributable to Class R-4 shares. The fund has not
adopted a Plan for Class R-5 shares; accordingly, no 12b-1 fees are paid from
Class R-5 share assets.

For Class A and 529-A shares: (a) up to 0.25% is reimbursed to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to the amount allowable under the fund's Class
A and 529-A 12b-1 limit, after reimbursement for paying service-related
expenses, is reimbursed to the Principal Underwriter for paying
distribution-related expenses, including dealer commissions and wholesaler
compensation paid on sales of shares of $1 million or more purchased without a
sales charge (including purchases by employer-sponsored defined
contribution-type retirement plans investing $1 million or more or with 100 or
more eligible employees, and retirement plans, endowments and foundations with
$50 million or more in assets -- "no load purchases"). Commissions on no load
purchases of Class A and 529-A shares in excess of the Class A and 529-A plan
limitations not reimbursed to the Principal Underwriter during the most recent
fiscal quarter are recoverable for five quarters, provided the amount recovered
does not cause the fund to exceed the annual expense limit. After five quarters,
these commissions are not recoverable.

For Class B and 529-B shares: (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) 0.75% is paid to the Principal Underwriter for
distribution-related expenses, including the financing of commissions paid to
qualified dealers.

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

For Class C and 529-C shares: (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.75% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class 529-E shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.25% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class F and 529-F shares: currently up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers or advisers.

For Class R-1 shares: (a) up to 0.25% is paid to the Principal Underwriter for
paying service-related expenses, including paying service fees to qualified
dealers, and (b) up to 0.75% is paid to the Principal Underwriter for
distribution-related expenses, including commissions paid to qualified dealers.

For Class R-2 shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.50% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class R-3 shares: currently (a) up to 0.25% is paid to the Principal
Underwriter for paying service-related expenses, including paying service fees
to qualified dealers, and (b) up to 0.25% is paid to the Principal Underwriter
for paying distribution-related expenses, including commissions paid to
qualified dealers.

For Class R-4 shares: currently up to 0.25% is paid to the Principal Underwriter
for paying service-related expenses, including paying service fees to qualified
dealers or advisers.

As of the end of the 2007 fiscal year, total 12b-1 expenses, and the portion of
the expenses that remained unpaid, were:

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

CLASS A $4,321,000 $831,000
------------------------------------------------------------------------------------
CLASS B 1,596,000 189,000
------------------------------------------------------------------------------------
CLASS C 1,124,000 236,000
------------------------------------------------------------------------------------
CLASS F 205,000 56,000
------------------------------------------------------------------------------------
CLASS 529-A 92,000 21,000
------------------------------------------------------------------------------------
CLASS 529-B 132,000 16,000
------------------------------------------------------------------------------------
CLASS 529-C 254,000 56,000
------------------------------------------------------------------------------------
CLASS 529-E 18,000 5,000
------------------------------------------------------------------------------------
CLASS 529-F 0 0
------------------------------------------------------------------------------------
CLASS R-1 41,000 11,000
------------------------------------------------------------------------------------
CLASS R-2 730,000 172,000
------------------------------------------------------------------------------------
CLASS R-3 511,000 96,000
------------------------------------------------------------------------------------
CLASS R-4 103,000 58,000
------------------------------------------------------------------------------------

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

OTHER COMPENSATION TO DEALERS -- As of January 2007, the top dealers (or their
affiliates) that American Funds Distributors anticipates will receive additional
compensation (as described in the prospectus) include:

A. G. Edwards & Sons, Inc.
AIG Advisors Group:
Advantage Capital Corporation
AIG Financial Advisors, Inc.
American General Securities Incorporated
FSC Securities Corporation
Royal Alliance Associates, Inc.
AXA Advisors, LLC
Cadaret, Grant & Co., Inc.
Cambridge Investment Research, Inc.
Commonwealth Financial Network
Cuna Brokerage Services, Inc.
Deutsche Bank Securities 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/PNC Bank:
J.J.B. Hilliard, W.L. Lyons, Inc.
PNC Bank, National Association
PNC Brokerage Corp.
PNC Investments LLC

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

Lincoln Financial Advisors Corporation:
Lincoln Financial Advisors Corporation
Jefferson Pilot Securities Corporation
LPL Financial Services:
Linsco/Private Ledger Corp.
Uvest Investment Services
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Metlife Enterprises:
Metlife Securities Inc.
Tower Square Securities
New England Securities
Walnut Street Securities, Inc.
MML Investors Services, Inc.
Morgan Keegan & Company, Inc.
Morgan Stanley DW Inc.
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
Pacific Select Distributors Inc.:
Associated Securities Corp.
Contemporary Financial Solutions, Inc.
M.L. Stern & Co., LLC
Mutual Service Corporation
Sorrento Pacific Financial, LLC
United Planners' Financial Services of America
Waterstone Financial Group, Inc.
Park Avenue Securities LLC
Princor Financial Services Corporation
Raymond James Group:
Raymond James & Associates, Inc.
Raymond James Financial Services Inc.
RBC Dain Rauscher Inc.
Robert W. Baird & Co. Incorporated
Securian/C.R.I.:
CRI Securities, LLC
Securian Financial Services, Inc.
Smith Barney
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
First Clearing LLC
Wells Fargo Investments, L.L.C.

U.S. Government Securities Fund -- Page 28
<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 setting up 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.

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

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 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, the investment
adviser periodically assesses the brokerage and investment research services
provided by each broker-dealer from whom it receives such services. Using its
judgment, 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 then 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 for 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 their 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 30
<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 in the 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.

Brokerage commissions paid on portfolio transactions, including investment
dealer concessions on underwritings, if applicable, for the fiscal years ended
August 31, 2007, 2006 and 2005 amounted to $322,000, $227,000 and $11,000,
respectively. With respect to fixed-income securities, brokerage commissions
include explicit investment dealer concessions and may exclude other transaction
costs which may be reflected in the spread between the bid and asked price. The
volume of securities purchased by the fund in underwritten offerings increased
from the previous year, resulting in an increase in underwriting concessions
paid on portfolio transactions.

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.

As of the fund's most recent fiscal year-end, the fund did not hold securities
of its regular broker-dealers.

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.

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

Affiliated persons of the fund as described above 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 to maintain the confidentiality of such information, preclear
securities trades and report securities transactions activity, as applicable.
Third party service providers of the fund 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 may be bound by agreements (including confidentiality agreements)
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.

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

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

calculated once daily as of approximately 4:00 p.m. New York time, which is the
normal close of trading on the New York Stock Exchange, each day the Exchange is
open. If, for example, the Exchange closes at 1:00 p.m., the fund's share price
would still be determined as of 4:00 p.m. New York time. The New York Stock
Exchange is currently closed on weekends and on the following holidays: New
Year's Day; Martin Luther King, Jr. Day; Presidents' Day; Good Friday; Memorial
Day; Independence Day; Labor Day; Thanksgiving; and Christmas Day. 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 money market funds) 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.

1. 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 an independent pricing service, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued at the mean quoted bid and
asked prices (or bid prices, if asked prices are not available) or at prices for
securities of comparable maturity, quality and type. The pricing services base
bond prices on, among other things, an evaluation of the yield curve as of
approximately 3:00 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.

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 non-U.S. currencies are
translated prior to the next determination of the net asset value of the fund's
shares into U.S. dollars at the prevailing market rates.

Securities and assets for which 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.

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

The valuation committee has adopted guidelines and procedures (consistent with
SEC rules and guidance) to ensure that certain basic principles and factors are
considered 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. The valuation committee considers all
indications of value available to it in determining the fair value to be
assigned to a particular security, including, without limitation, 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.

2. 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.

3. Net assets so obtained for each share class are then 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.

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

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

outstanding voting securities of such issuer) and (ii) not more than 25% of the
value of its assets is invested in the securities of (other than U.S. government
securities or the securities of other regulated investment companies) any one
issuer; 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"
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.

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,

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

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 follow the practice
of distributing the entire excess of net realized long-term capital gains
over net realized short-term capital losses. Net capital gains for a fiscal
year are computed by taking into account any capital loss 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.

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 the excess of net long-term capital gains
over net short-term capital losses 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, 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 during
such six-month period.

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

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

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

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

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

UNLESS OTHERWISE NOTED, ALL REFERENCES IN THE FOLLOWING PAGES TO CLASS A, B, C
OR F SHARES ALSO REFER TO THE CORRESPONDING CLASS 529-A, 529-B, 529-C OR 529-F
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 account statement and mailing the form, along with a
check made payable to the fund, using the envelope provided with your
account statement.

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 any of the following addresses:

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

American Funds
3500 Wiseman Blvd.
San Antonio, TX 78251-4321

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 document for more
information regarding this service.

BY INTERNET -- using americanfunds.com. Please see the "Shareholder account
services and privileges" section of this document 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 38
<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. Class R-5 shares are also available to clients of the
Personal Investment Management group of Capital Guardian Trust Company who do
not have an intermediary associated with their accounts and without regard to
the $1 million purchase minimum. In addition, 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. The
fund and the Principal Underwriter reserve the right to reject any purchase
order.

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.

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:

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

. 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 statement of additional information.

EXCHANGES -- You may only exchange shares into other American Funds within the
same share class. However, exchanges from Class A shares of The Cash Management
Trust of America may be made to Class B or C shares of other American Funds for
dollar cost averaging purposes. Exchanges are not permitted from Class A shares
of The Cash Management Trust of America to Class B or C shares of Intermediate
Bond Fund of America, Limited Term Tax-Exempt Bond Fund of America and
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 funds are
subject to applicable sales charges on the fund being purchased, unless the
money market fund shares were acquired by an exchange from a fund having a sales
charge, or by reinvestment or cross-reinvestment of dividends or capital gain
distributions. 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" below. 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" above).

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
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

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

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

AUTOMATIC CONVERSIONS -- As described more fully in the prospectus, Class
B, 529-B and C shares automatically convert to Class A, 529-A and F shares,
respectively, after a certain period from the purchase date.

MOVING FROM CLASS B TO CLASS A SHARES -- Under the right of reinvestment
policy as described in the prospectus, if you redeem Class B shares during
the contingent deferred sales charge period, you may reinvest the proceeds
in Class A shares without paying a Class A sales charge if you notify
American Funds Service Company and the reinvestment occurs within 90 days
after the date of redemption and is made into the same account from which
you redeemed the shares. If you redeem your Class B shares after the
contingent deferred sales charge period, you may either 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.

MOVING FROM CLASS C TO CLASS A SHARES -- If you redeem Class C shares and
with the redemption proceeds purchase Class A shares, you are still
responsible for paying any Class C contingent deferred sales charges and
applicable Class A sales charges.

MOVING FROM CLASS C TO CLASS F SHARES -- If you are part of a qualified
fee-based program and you wish to redeem your Class C shares and with the
redemption proceeds purchase Class F shares for the program, you are still
responsible for paying any applicable Class C contingent deferred sales
charge.

MOVING FROM CLASS F TO CLASS A SHARES -- You can redeem Class F shares held
in a qualified fee-based program and with the redemption proceeds purchase
Class A shares without paying an initial Class A sales charge if all of the
following 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 and purchase the Class A
shares within 90 days after redeeming the Class F shares.

In addition, you may redeem Class F shares held in a fee-based brokerage
account/ program for less than one year and with the redemption proceeds
purchase Class A shares without a sales charge if the redemption is
necessary to comply with the repeal of SEC Rule 202 under the Investment
Advisers Act of 1940 and the transaction occurs prior to October 1, 2007,
or such other date as determined by rule, regulation or court order.

MOVING FROM CLASS A TO CLASS F SHARES -- If you are part of a qualified
fee-based program and you wish to redeem your Class A shares and with the
redemption proceeds purchase Class F shares for 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 41
<PAGE>

MOVING FROM CLASS A TO CLASS R SHARES -- Provided it is eligible to invest
in Class R shares, a retirement plan currently invested in Class A shares
may redeem its shares and purchase Class R shares with the redemption
proceeds. Any Class A sales charges that the retirement plan previously
paid will not be credited back to the plan's account.

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

NON-REPORTABLE TRANSACTIONS -- As described above, automatic conversions
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.

SALES CHARGES

CLASS A PURCHASES

PURCHASES BY CERTAIN 403(B) PLANS

Individual 403(b) plans may be treated similarly to employer-sponsored
plans for Class A sales charge purposes (i.e., individual participant
accounts are eligible to be aggregated together) if: (a) the American Funds
are principal investment options; (b) the employer facilitates the
enrollment process by, for example, allowing for onsite group enrollment
meetings held during working hours; and (c) there is only one dealer firm
assigned to the plans.

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 and employees 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 42
<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 43
<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 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.

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
American Funds non-money market funds 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.

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.

The Statement may be revised upward at any time during the Statement
period, and such a revision will be treated as a new Statement, except that
the Statement period during

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

which the purchases must be made will remain unchanged. Purchases made from
the date of revision will receive the reduced sales charge, if any,
resulting from the revised Statement.

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. 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, individual
403(b) plan (see exception in "Purchases by certain 403(b) plans"
under "Sales charges") or single-participant Keogh-type plan;

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

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

. 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;

. 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; or

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

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

CONCURRENT PURCHASES -- 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 individual holdings in Endowments. 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 funds 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

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

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, to determine your sales charge on investments in accounts
eligible to be aggregated. Direct purchases of American Funds money market
funds 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") 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.

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 B or 529-B shares if your combined American
Funds and applicable American Legacy holdings cause you to be eligible to
purchase Class A or 529-A shares at the $100,000 or higher sales charge
discount rate, and 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.

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 postpurchase 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

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

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).

. Redemptions through an automatic withdrawal plan (AWP) (see "Automatic
withdrawals" under "Shareholder account services and privileges"
below). 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 funds 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.

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."

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

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 money market
funds be wired to your bank by writing American Funds Service Company. A
signature guarantee is required on all requests to wire funds.

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders. However, certain services and privileges may not be available 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

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

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 will automatically be 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.

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 -- For all share classes, except the R and 529 classes of
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.

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.

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

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.

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 funds 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

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

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.

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.

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 non-U.S. securities, the Custodian may hold these
securities pursuant to subcustodial arrangements in non-U.S. banks or non-U.S.
branches of U.S. banks.

TRANSFER AGENT -- American Funds Service Company, a wholly owned subsidiary of
the investment adviser, maintains the records of 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 $2,894,000 for Class A shares and $228,000 for Class
B shares for the 2007 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, 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 so included in reliance
on the report of Deloitte & Touche LLP, independent registered public accounting
firm, given on the authority of said firm 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 -- Paul, Hastings, Janofsky & Walker LLP, 515 South
Flower Street, Los Angeles, CA 90071, serves as counsel for the fund and for
independent trustees in their capacities as such. Certain legal matters in
connection with certain shares of beneficial interest offered by the prospectus
have been passed upon for the fund by Paul, Hastings, Janofsky & Walker LLP.
Counsel does not provide legal services to the fund's investment adviser or any
of its affiliated companies. A determination with respect to the independence of
the fund's

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

"independent legal 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 prospectuses annually
and at least semiannually with reports showing the fund's investment portfolio
or summary investment portfolio, financial statements and other information. The
fund's annual financial statements are audited by the 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 prospectuses, shareholder reports and proxy statements. To
receive additional copies of a prospectus, report or proxy statement,
shareholders should contact the Transfer Agent.

SHAREHOLDER AND TRUSTEE RESPONSIBILITY -- Under the laws of certain states,
including Massachusetts, where the fund was organized, 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.

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.

LEGAL PROCEEDINGS -- On February 16, 2005, the NASD (now the Financial Industry
Regulatory Authority) 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, the NASD
Hearing Panel ruled against the Principal Underwriter and imposed a $5 million
fine. The Principal Underwriter has appealed this decision to the NASD's
National Adjudicatory Council.

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

On March 24, 2005, the investment adviser and Principal Underwriter filed a
complaint against the Attorney General of the State of California in Los Angeles
County Superior Court. The complaint alleged that the Attorney General
threatened to take enforcement actions against the investment adviser and
Principal Underwriter that are without merit and preempted by federal law. On
the same day, following the filing of the investment adviser's and Principal
Underwriter's complaint, the Attorney General of the State of California filed a
complaint against the Principal Underwriter and investment adviser. Filed in Los
Angeles County Superior Court, the Attorney General's complaint alleged
violations of certain sections of the California Corporations Code with respect
to so-called "revenue sharing" disclosures in mutual fund prospectuses and
statements of additional information. On November 22, 2005, the Los Angeles
Superior Court dismissed the Attorney General's complaint. The Attorney General
subsequently appealed the Superior Court's decision to California's Court of
Appeal for the Second Appellate District. On January 26, 2007, the Court of
Appeal issued a ruling allowing the California Attorney General to proceed with
his civil action.

The investment adviser and Principal Underwriter believe that the likelihood
that these matters 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
these matters. The investment adviser believes that these suits are without
merit and will defend itself vigorously. Further updates on these issues will be
available on the American Funds website (americanfunds.com) under "American
Funds regulatory matters."

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- AUGUST 31, 2007

Net asset value and redemption price per share
(Net assets divided by shares outstanding). . $13.35
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). . . . . . . . . . . . . . . . $13.87

OTHER INFORMATION -- The fund reserves the right to modify the privileges
described in this statement of additional information at any time.

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 54
<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
-----------------------------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . . . . . . . . . . 002 202 302 402
American Balanced Fund/(R)/ . . . . . . . . . . . . . . . . . 011 211 311 411
American Mutual Fund/(R)/ . . . . . . . . . . . . . . . . . . 003 203 303 403
Capital Income Builder/(R)/ . . . . . . . . . . . . . . . . . 012 212 312 412
Capital World Growth and Income Fund/SM/ . . . . . . . . . . . 033 233 333 433
EuroPacific Growth Fund/(R)/ . . . . . . . . . . . . . . . . . 016 216 316 416
Fundamental Investors/SM/ . . . . . . . . . . . . . . . . . . 010 210 310 410
The Growth Fund of America/(R)/ . . . . . . . . . . . . . . . 005 205 305 405
The Income Fund of America/(R)/ . . . . . . . . . . . . . . . 006 206 306 406
The Investment Company of America/(R)/ . . . . . . . . . . . . 004 204 304 404
The New Economy Fund/(R)/ . . . . . . . . . . . . . . . . . . 014 214 314 414
New Perspective Fund/(R)/ . . . . . . . . . . . . . . . . . . 007 207 307 407
New World Fund/SM/ . . . . . . . . . . . . . . . . . . . . . . 036 236 336 436
SMALLCAP World Fund/(R)/ . . . . . . . . . . . . . . . . . . . 035 235 335 435
Washington Mutual Investors Fund/SM/ . . . . . . . . . . . . . 001 201 301 401
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/ . . . . . . . . 040 240 340 440
American High-Income Trust/SM/ . . . . . . . . . . . . . . . . 021 221 321 421
The Bond Fund of America/SM/ . . . . . . . . . . . . . . . . . 008 208 308 408
Capital World Bond Fund/(R)/ . . . . . . . . . . . . . . . . . 031 231 331 431
Intermediate Bond Fund of America/SM/ . . . . . . . . . . . . 023 223 323 423
Limited Term Tax-Exempt Bond Fund of America/SM/ . . . . . . . 043 243 343 443
Short-Term Bond Fund of America/SM/ . . . . . . . . . . . . . 048 248 348 448
The Tax-Exempt Bond Fund of America/(R)/ . . . . . . . . . . . 019 219 319 419
The Tax-Exempt Fund of California/(R)/* . . . . . . . . . . . 020 220 320 420
The Tax-Exempt Fund of Maryland/(R)/* . . . . . . . . . . . . 024 224 324 424
The Tax-Exempt Fund of Virginia/(R)/* . . . . . . . . . . . . 025 225 325 425
U.S. Government Securities Fund/SM/ . . . . . . . . . . . . . 022 222 322 422
MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . . . . . . . . . . 009 209 309 409
The Tax-Exempt Money Fund of America/SM/ . . . . . . . . . . . 039 N/A N/A N/A
The U.S. Treasury Money Fund of America/SM/ . . . . . . . . . 049 N/A N/A N/A
___________
*Qualified for sale only in certain jurisdictions.

U.S. Government Securities Fund -- Page 55
<PAGE>

FUND NUMBERS
---------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND 529-A 529-B 529-C 529-E 529-F
-------------------------------------------------------------------------------

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
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
The Cash Management Trust of
America . . . . . . . . . . . . 1009 1209 1309 1509 1409

FUND NUMBERS
----------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND R-1 R-2 R-3 R-4 R-5
-------------------------------------------------------------------------------

STOCK AND STOCK/BOND FUNDS
AMCAP Fund . . . . . . . . . . . . . 2102 2202 2302 2402 2502
American Balanced Fund . . . . . . . 2111 2211 2311 2411 2511
American Mutual Fund . . . . . . . . 2103 2203 2303 2403 2503
Capital Income Builder . . . . . . . 2112 2212 2312 2412 2512
Capital World Growth and Income Fund 2133 2233 2333 2433 2533
EuroPacific Growth Fund . . . . . . 2116 2216 2316 2416 2516
Fundamental Investors . . . . . . . 2110 2210 2310 2410 2510
The Growth Fund of America . . . . . 2105 2205 2305 2405 2505
The Income Fund of America . . . . . 2106 2206 2306 2406 2506
The Investment Company of America . 2104 2204 2304 2404 2504
The New Economy Fund . . . . . . . . 2114 2214 2314 2414 2514
New Perspective Fund . . . . . . . . 2107 2207 2307 2407 2507
New World Fund . . . . . . . . . . . 2136 2236 2336 2436 2536
SMALLCAP World Fund . . . . . . . . 2135 2235 2335 2435 2535
Washington Mutual Investors Fund . . 2101 2201 2301 2401 2501
BOND FUNDS
American High-Income Municipal Bond
Fund . . . . . . . . . . . . . . . . N/A N/A N/A N/A 2540
American High-Income Trust . . . . . 2121 2221 2321 2421 2521
The Bond Fund of America . . . . . . 2108 2208 2308 2408 2508
Capital World Bond Fund . . . . . . 2131 2231 2331 2431 2531
Intermediate Bond Fund of America . 2123 2223 2323 2423 2523
Limited Term Tax-Exempt Bond Fund of
America. . . . . . . . . . . . . . . N/A N/A N/A N/A 2543
Short-Term Bond Fund of America. . . 2148 2248 2348 2448 2548
The Tax-Exempt Bond Fund of America N/A N/A N/A N/A 2519
The Tax-Exempt Fund of California* . N/A N/A N/A N/A 2520
The Tax-Exempt Fund of Maryland* . . N/A N/A N/A N/A 2524
The Tax-Exempt Fund of Virginia* . . N/A N/A N/A N/A 2525
U.S. Government Securities Fund . . 2122 2222 2322 2422 2522
MONEY MARKET FUNDS
The Cash Management Trust of America 2109 2209 2309 2409 2509
The Tax-Exempt Money Fund of America N/A N/A N/A N/A 2539
The U.S. Treasury Money Fund of
America . . . . . . . . . . . . . . 2149 2249 2349 2449 2549
___________
*Qualified for sale only in certain
jurisdictions.

U.S. Government Securities Fund -- Page 56
<PAGE>

FUND NUMBERS
-------------------------------------------------
CLASS CLASS CLASS CLASS CLASS
FUND CLASS A R-1 R-2 R-3 R-4 R-5
-------------------------------------------------------------------------------

AMERICAN FUNDS TARGET DATE RETIREMENT SERIES/(R)/
American Funds 2050 Target
Date Retirement Fund . . . 069 2169 2269 2369 2469 2569
American Funds 2045 Target
Date Retirement Fund . . . 068 2168 2268 2368 2468 2568
American Funds 2040 Target
Date Retirement Fund . . . 067 2167 2267 2367 2467 2567
American Funds 2035 Target
Date Retirement Fund . . . 066 2166 2266 2366 2466 2566
American Funds 2030 Target
Date Retirement Fund . . . 065 2165 2265 2365 2465 2565
American Funds 2025 Target
Date Retirement Fund . . . 064 2164 2264 2364 2464 2564
American Funds 2020 Target
Date Retirement Fund . . . 063 2163 2263 2363 2463 2563
American Funds 2015 Target
Date Retirement Fund . . . 062 2162 2262 2362 2462 2562
American Funds 2010 Target
Date Retirement Fund . . . 061 2161 2261 2361 2461 2561

U.S. Government Securities Fund -- Page 57
<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 58
<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 59
<PAGE>

C
The C rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

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 60
<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 61
<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 62

html

financials

[logo – American Funds®]

U.S. Government Securities FundSM

Investment portfolio

August 31, 2007

Bonds & notes — 94.58%	Principal amount (000)		Market value (000)

MORTGAGE-BACKED OBLIGATIONS¹— 52.67%
Fannie Mae 8.50% 2008	$	—	$	—
Fannie Mae 7.00% 2009		15		15
Fannie Mae 7.00% 2009		10		10
Fannie Mae 9.00% 2009		9		9
Fannie Mae 7.00% 2010		167		168
Fannie Mae 8.50% 2010		13		13
Fannie Mae 7.00% 2011		18		18
Fannie Mae 9.50% 2011		14		14
Fannie Mae 8.50% 2013		3		3
Fannie Mae 8.50% 2014		2		2
Fannie Mae 7.00% 2017		182		189
Fannie Mae 10.50% 2018		1,520		1,748
Fannie Mae 12.00% 2019		551		628
Fannie Mae 4.50% 2020		10,472		10,069
Fannie Mae 5.00% 2020		28,240		27,718
Fannie Mae 6.00% 2021		583		589
Fannie Mae 6.00% 2021		439		444
Fannie Mae 6.00% 2021		431		436
Fannie Mae 9.50% 2022		49		54
Fannie Mae 6.00% 2024		40,028		40,203
Fannie Mae 11.029% 2025²		3,915		4,503
Fannie Mae 6.00% 2026		2,669		2,680
Fannie Mae 9.50% 2026		284		323
Fannie Mae 6.00% 2027		22,060		22,156
Fannie Mae 8.50% 2027		22		24
Fannie Mae 7.50% 2029		363		385
Fannie Mae 7.50% 2030		43		45
Fannie Mae 7.50% 2030		27		28
Fannie Mae 7.50% 2031		248		261
Fannie Mae 7.50% 2031		89		95
Fannie Mae 7.50% 2031		87		91
Fannie Mae 7.50% 2031		49		52
Fannie Mae 8.00% 2031		3,135		3,341
Fannie Mae 4.381% 2033²		3,630		3,603
Fannie Mae 5.50% 2033		15,110		14,807
Fannie Mae 4.469% 2035²		4,355		4,297
Fannie Mae 4.50% 2035		35,570		32,905
Fannie Mae 4.50% 2035		5,812		5,379
Fannie Mae 4.50% 2035		3,473		3,213
Fannie Mae 4.50% 2035²		2,497		2,464
Fannie Mae 4.50% 2035		1,686		1,562
Fannie Mae 4.555% 2035²		3,773		3,726
Fannie Mae 5.50% 2035		10,249		10,025
Fannie Mae 5.50% 2035		5,496		5,381
Fannie Mae 6.50% 2035		53,209		54,290
Fannie Mae 4.50% 2036		2,120		1,963
Fannie Mae 5.424% 2036²		7,578		7,558
Fannie Mae 5.50% 2036		11,764		11,487
Fannie Mae 5.50% 2036		365		356
Fannie Mae 5.547% 2036²		8,951		8,948
Fannie Mae 6.00% 2036		5,560		5,555
Fannie Mae 6.00% 2036		790		790
Fannie Mae 6.00% 2036		386		386
Fannie Mae 6.50% 2036		36,404		37,212
Fannie Mae 5.50% 2037		10,920		10,662
Fannie Mae 5.50% 2037		10,251		10,008
Fannie Mae 5.50% 2037		6,875		6,635
Fannie Mae 5.50% 2037		4,686		4,523
Fannie Mae 5.50% 2037		3,076		2,971
Fannie Mae 5.888% 2037²		5,501		5,545
Fannie Mae 5.90% 2037²		7,650		7,713
Fannie Mae 6.00% 2037		14,412		14,396
Fannie Mae 6.00% 2037		10,000		9,989
Fannie Mae 6.00% 2037		5,644		5,638
Fannie Mae 6.00% 2037³		2,998		2,939
Fannie Mae 6.00% 2037		1,736		1,734
Fannie Mae 6.50% 2037		16,242		16,344
Fannie Mae 6.50% 2037		11,591		11,664
Fannie Mae 6.50% 2037		9,924		9,987
Fannie Mae 6.50% 2037		7,000		7,120
Fannie Mae 6.50% 2037		6,838		6,885
Fannie Mae 6.50% 2037		2,983		3,034
Fannie Mae 6.836% 2037²		2,486		2,543
Fannie Mae 7.00% 2037³		15,500		15,794
Fannie Mae 7.00% 2037		9,791		10,006
Fannie Mae 7.00% 2037		6,096		6,287
Fannie Mae 7.00% 2037		4,430		4,555
Fannie Mae 7.00% 2037		2,747		2,807
Fannie Mae 7.00% 2037³		2,685		2,727
Fannie Mae 7.00% 2037		1,732		1,770
Fannie Mae 7.00% 2037		861		880
Fannie Mae 7.50% 2037		2,500		2,581
Fannie Mae 7.50% 2037		1,415		1,462
Fannie Mae, Series 1998-M6, Class A-2, 6.32% 2008		400		401
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012		27,750		27,102
Fannie Mae, Series 35, Class 2, 12.00% 2018		21		25
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022		6,466		6,258
Fannie Mae, Series 1992-119, Class Z, 8.00% 2022		244		259
Fannie Mae, Series 2001-4, Class NA, 11.889% 2025²		3,410		3,806
Fannie Mae, Series 1997-M6, Class ZA, 6.85% 2026		2,669		2,665
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2028		820		852
Fannie Mae, Series 2002-W7, Class A-5, 7.50% 2029		3,073		3,214
Fannie Mae, Series 2001-25, Class ZA, 6.50% 2031		1,472		1,521
Fannie Mae, Series 2001-20, Class E, 9.619% 2031²		103		113
Fannie Mae, Series 2001-20, Class C, 11.927% 2031²		439		490
Fannie Mae, Series 2003-M2, Class D, 4.68% 2033^2,3		11,000		9,402
Fannie Mae, Series 2005-29, Class AK, 4.50% 2035		11,659		11,259
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035		18,750		18,785
Fannie Mae, Series 2006-56, Class OG, principal only, 0% 2036		7,112		5,369
Fannie Mae, Series 2006-83, Class AO, principal only, 0% 2036³		5,502		3,845
Fannie Mae, Series 2006-65, Class PF, 5.785% 2036²		7,825		7,776
Fannie Mae, Series 2006-49, Class PA, 6.00% 2036		1,294		1,319
Fannie Mae, Series 2007-33, Class HE, 5.50% 2037		7,846		7,794
Fannie Mae, Series 2007-40, Class PT, 5.50% 2037		4,932		4,885
Fannie Mae, Series 2007-24, Class P, 6.00% 2037		35,279		35,795
Fannie Mae, Series 1999-T2, Class A-1, 7.50% 2039		1,096		1,152
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042		808		841
Freddie Mac 8.25% 2007		—		—
Freddie Mac 7.00% 2008		9		9
Freddie Mac 8.75% 2008		2		2
Freddie Mac 8.50% 2009		14		15
Freddie Mac 8.00% 2012		15		15
Freddie Mac 6.00% 2014		208		211
Freddie Mac 4.00% 2015		2,171		2,045
Freddie Mac 6.00% 2017		694		702
Freddie Mac 8.00% 2017		238		250
Freddie Mac 8.50% 2018		3		3
Freddie Mac 8.50% 2020		192		206
Freddie Mac 8.50% 2021		62		66
Freddie Mac 10.00% 2025		1,430		1,626
Freddie Mac 6.00% 2026		15,115		15,188
Freddie Mac 6.00% 2027		28,465		28,603
Freddie Mac 4.645% 2035²		10,753		10,596
Freddie Mac 5.00% 2035		12,640		12,027
Freddie Mac 5.00% 2035		6,718		6,390
Freddie Mac 5.50% 2035		3,035		2,966
Freddie Mac 5.50% 2035		3,001		2,932
Freddie Mac 5.50% 2037		9,939		9,702
Freddie Mac 5.50% 2037		9,727		9,497
Freddie Mac 5.50% 2037		2,170		2,119
Freddie Mac 6.00% 2037		75,750		75,667
Freddie Mac 6.00% 2037		10,000		9,995
Freddie Mac 6.00% 2037		6,000		5,997
Freddie Mac 6.00% 2037		5,750		5,744
Freddie Mac 6.00% 2037		3,600		3,595
Freddie Mac 6.012% 2037²		11,828		11,905
Freddie Mac 6.405% 2037²		4,464		4,517
Freddie Mac 6.472% 2037²		5,311		5,375
Freddie Mac 6.50% 2037		2,886		2,903
Freddie Mac, Series 2356, Class GD, 6.00% 2016		6,362		6,466
Freddie Mac, Series 2289, Class NA, 11.943% 2020²		1,971		2,181
Freddie Mac, Series 178, Class Z, 9.25% 2021		64		64
Freddie Mac, Series 2289, Class NB, 11.418% 2022²		402		450
Freddie Mac, Series 2626, Class NG, 3.50% 2023		1,647		1,491
Freddie Mac, Series 1567, Class A, 4.441% 2023²		66		61
Freddie Mac, Series 1617, Class PM, 6.50% 2023		2,117		2,177
Freddie Mac, Series 2153, Class GG, 6.00% 2029		4,034		4,103
Freddie Mac, Series T-041, Class 3-A, 7.50% 2032		682		708
Freddie Mac, Series 3061, Class PN, 5.50% 2035		4,820		4,819
Freddie Mac, Series 3156, Class PO, principal only, 0% 2036		10,288		7,553
Freddie Mac, Series 3171, Class MO, principal only, 0% 2036		5,409		4,012
Freddie Mac, Series 3146, Class PO, principal only, 0% 2036		4,834		3,454
Freddie Mac, Series 3213, Class OG, principal only, 0% 2036		3,124		2,345
Freddie Mac, Series 3257, Class PA, 5.50% 2036		5,494		5,483
Freddie Mac, Series 3156, Class PF, 5.861% 2036²		12,217		12,121
Freddie Mac, Series 3233, Class PA, 6.00% 2036		7,482		7,604
Freddie Mac, Series 3272, Class PA, 6.00% 2037		9,764		9,922
Government National Mortgage Assn. 7.50% 2009		19		19
Government National Mortgage Assn. 7.50% 2009		11		11
Government National Mortgage Assn. 9.00% 2009		67		67
Government National Mortgage Assn. 9.50% 2009		18		19
Government National Mortgage Assn. 7.50% 2011		56		58
Government National Mortgage Assn. 7.50% 2011		8		8
Government National Mortgage Assn. 5.50% 2013		43		43
Government National Mortgage Assn. 6.00% 2013		458		465
Government National Mortgage Assn. 6.00% 2014		341		346
Government National Mortgage Assn. 6.00% 2014		204		207
Government National Mortgage Assn. 6.00% 2014		98		99
Government National Mortgage Assn. 6.50% 2014		176		180
Government National Mortgage Assn. 6.50% 2014		169		172
Government National Mortgage Assn. 6.50% 2014		150		154
Government National Mortgage Assn. 6.50% 2014		126		128
Government National Mortgage Assn. 6.50% 2014		118		121
Government National Mortgage Assn. 6.50% 2014		113		116
Government National Mortgage Assn. 6.50% 2014		109		111
Government National Mortgage Assn. 6.50% 2014		85		86
Government National Mortgage Assn. 6.50% 2014		83		85
Government National Mortgage Assn. 6.50% 2014		81		83
Government National Mortgage Assn. 6.50% 2014		13		14
Government National Mortgage Assn. 6.50% 2014		13		13
Government National Mortgage Assn. 5.50% 2016		715		712
Government National Mortgage Assn. 5.50% 2016		452		450
Government National Mortgage Assn. 5.50% 2016		441		439
Government National Mortgage Assn. 5.50% 2016		408		406
Government National Mortgage Assn. 5.50% 2016		377		376
Government National Mortgage Assn. 5.50% 2016		342		341
Government National Mortgage Assn. 5.50% 2016		330		329
Government National Mortgage Assn. 5.50% 2016		307		305
Government National Mortgage Assn. 5.50% 2016		247		246
Government National Mortgage Assn. 5.50% 2016		205		204
Government National Mortgage Assn. 5.50% 2016		185		184
Government National Mortgage Assn. 5.50% 2016		177		176
Government National Mortgage Assn. 5.50% 2016		140		140
Government National Mortgage Assn. 5.50% 2016		117		117
Government National Mortgage Assn. 5.50% 2016		77		77
Government National Mortgage Assn. 6.00% 2016		879		890
Government National Mortgage Assn. 6.50% 2016		434		443
Government National Mortgage Assn. 6.50% 2016		395		403
Government National Mortgage Assn. 9.00% 2016		57		63
Government National Mortgage Assn. 5.50% 2017		4,025		4,007
Government National Mortgage Assn. 5.50% 2017		3,184		3,170
Government National Mortgage Assn. 10.00% 2019		1,049		1,191
Government National Mortgage Assn. 8.50% 2021		58		63
Government National Mortgage Assn. 8.50% 2021		12		13
Government National Mortgage Assn. 10.00% 2021		359		411
Government National Mortgage Assn. 8.50% 2022		20		21
Government National Mortgage Assn. 8.50% 2022		18		20
Government National Mortgage Assn. 8.50% 2022		6		7
Government National Mortgage Assn. 6.00% 2035		31		31
Government National Mortgage Assn. 5.50% 2036		11,744		11,508
Government National Mortgage Assn., Series 2004-19, 5.00% 2031		13,911		13,672
Government National Mortgage Assn., Series 2003-116, Class JD, 5.00% 2032		10,000		9,599
Government National Mortgage Assn., Series 2003-46, 5.00% 2033		10,000		9,633
Banc of America Mortgage Securities, Inc., Series 2003-8, Class 2-A-4, 4.75% 2018		11,352		10,907
Banc of America Mortgage Securities, Inc., Series 2003-7, Class A-3, 5.00% 2018		8,852		8,579
Banc of America Mortgage Securities, Inc., Series 2003-8, Class 2-A-5, 5.00% 2018		8,757		8,487
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-2, 4.183% 2037		1,335		1,298
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-4, 4.686% 2037		2,250		2,095
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037		3,000		3,067
CS First Boston Mortgage Securities Corp., Series 2007-5, Class 1-A-9, 7.00% 2037³		9,956		9,904
CS First Boston Mortgage Securities Corp., Series 2005-C5, Class A-AB, 5.10% 2038²		5,000		4,854
CS First Boston Mortgage Securities Corp., Series 2006-C1, Class A-AB, 5.681% 2039²		4,800		4,790
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-CIBC10, Class A-3, 4.184% 2037		5,000		4,868
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC11, Class A-2, 5.016% 2037		3,000		2,964
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A-3, 4.545% 2042		5,000		4,811
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class A-4, 4.738% 2042		2,000		1,870
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP3, Class A-4A, 4.936% 2042²		5,000		4,743
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CIBC14, Class A-4, 5.481% 2044²		3,000		2,951
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A-4, 6.066% 2045²		2,000		2,029
Wachovia Bank Commercial Mortgage Trust, Series 2005-C16, Class A-PB, 4.692% 2041		5,500		5,314
Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class A-PB, 4.807% 2042		5,500		5,281
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-4, 5.083% 2042²		2,700		2,591
Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class A-7, 5.118% 2042²		5,000		4,796
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A-PB, 5.446% 2045		3,000		2,973
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class II-A-4, 6.00% 2037		3,250		3,147
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class V-A-1, 7.00% 2037³		17,661		17,569
GE Commercial Mortgage Corp., Series 2005-C2, Class A-4, 4.978% 2043		8,000		7,632
GE Commercial Mortgage Corp., Series 2006-C1, Class A-4, 5.518% 2044²		6,750		6,611
GE Commercial Mortgage Corp., Series 2006-C1, Class A-AB, 5.518% 2044²		5,000		4,920
Chase Mortgage Finance Trust, Series 2003-S10, Class A-1, 4.75% 2018		8,398		8,069
Chase Mortgage Finance Trust, Series 2004-S1, Class A-1, 5.00% 2019		9,126		8,845
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-S8, Class A-2, 5.00% 2018		9,054		8,775
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-S12, Class A-3, 5.00% 2018		1,921		1,861
WaMu Mortgage Pass-Through Certificates Trust, Series 2006-AR18, Class 1-A1, 5.35% 2037²		3,208		3,153
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY5, Class 3-A1, 5.826% 2037²		2,897		2,827
Countrywide Alternative Loan Trust, Series 2005-23CB, Class A-15, 5.50% 2035		3,524		3,392
Countrywide Alternative Loan Trust, Series 2007-8CB, Class A-1, 5.50% 2037³		2,083		2,084
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 3-A-1, 5.886% 2047²		5,646		5,578
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 4-A-1, 5.989% 2047²		4,788		4,689
Citigroup Mortgage Loan Trust, Inc., Series 2003-1, Class I-A1, 4.75% 2018		10,031		9,661
Citigroup Mortgage Loan Trust, Inc., Series 2003-UST1, Class A-3, 5.00% 2018		2,488		2,417
CHL Mortgage Pass-Through Trust, Series 2004-J7, Class 3-A-1, 5.00% 2019		11,130		10,788
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 2037⁴		10,750		10,634
Structured Asset Securities Corp., Series 2003-29, Class 1-A-1, 4.75% 2018		8,122		7,803
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.374% 2042²		5,000		4,948
Morgan Stanley Capital I Trust, Series 2006-IQ11, Class A-4, 5.944% 2042²		2,455		2,468
MASTR Asset Securitization Trust, Series 2003-5, Class 2-A-1, 5.00% 2018		5,990		5,805
Cendant Mortgage Capital LLC, Series 2003-4, Class II-A-1, 5.00% 2033		5,747		5,565
Bear Stearns Commercial Mortgage Securities Trust, Series 2006-PWR13, Class A-4, 5.54% 2041		5,500		5,421
Banc of America Mortgage Securities Trust, Series 2003-10, Class 3-A-1, 5.00% 2019		5,559		5,388
Merrill Lynch Mortgage Investors, Inc., Series 2006-A1, Class II-A-1, 6.153% 2036²		5,179		5,225
J.P. Morgan Mortgage Trust, Series 2004-S1, Class 1-A-7, 5.00% 2019		5,004		4,846
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-8, Class 2-A3, 6.00% 2037^2,3		4,750		4,679
IndyMac IMSC Mortgage Loan Trust, Series 2007-F3, Class 3-A-1, 7.00% 2037³		4,665		4,641
GSR Mortgage Loan Trust, Series 2004-10F, Class 1-A-5, 4.50% 2019		4,818		4,589
Banc of America Commercial Mortgage Inc., Series 2006-2, Class A-3, 5.902% 2045²		3,000		3,000
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-4-1, 5.243% 2037²		3,000		2,963
Merrill Lynch Mortgage Trust, Series 2005-LC1, Class A-3, 5.289% 2044²		3,000		2,951
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038		3,000		2,794
Wells Fargo Mortgage-backed Securities Trust, Series 2003-16, Class II-A-1, 4.50% 2018		2,875		2,738
Lehman Mortgage Trust, Series 2007-7, Class 6-A4, 7.00% 2037		1,978		2,024
CHL Mortgage Pass-Through Trust, Series 2007-HY4, Class 1-A-1, 6.125% 2047^2,3		2,000		2,002
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-6, Class 3-A-1, 5.944% 2037^2,3		1,987		1,937
GMAC Commercial Mortgage Securities, Inc., Series 2005-C1, Class A-M, 4.754% 2043		2,000		1,880
Citicorp Mortgage Securities, Inc., Series 2003-10, Class A-1, 4.50% 2018		1,594		1,518
MASTR Alternative Loan Trust, Series 2004-10, Class 2-A-1, 5.50% 2019		1,030		1,016
LB-UBS Commercial Mortgage Trust, Series 2004-C8, Class A-2, 4.201% 2029		840		817
Paine Webber CMO, Series O, Class 5, 9.50% 2019		226		246
				1,353,570


U.S. TREASURY BONDS & NOTES — 26.92%
U.S. Treasury 3.00% 2007		15,425		15,392
U.S. Treasury 3.625% 2008^3,5		2,070		2,064
U.S. Treasury 4.75% 2008		18,150		18,261
U.S. Treasury 3.625% 2009		18,185		17,998
U.S. Treasury 3.625% 2010		8,030		7,922
U.S. Treasury 4.00% 2010		49,000		48,774
U.S. Treasury 5.75% 2010		11,435		11,929
U.S. Treasury 6.50% 2010		10,000		10,523
U.S. Treasury 2.375% 2011^3,5		2,073		2,069
U.S. Treasury 4.50% 2011		24,750		24,988
U.S. Treasury 4.50% 2011		10,200		10,300
U.S. Treasury 4.625% 2011		24,000		24,337
U.S. Treasury 4.875% 2011		12,000		12,275
U.S. Treasury 4.875% 2011		11,245		11,492
U.S. Treasury 3.625% 2013		43,250		41,790
U.S. Treasury 3.875% 2013		17,250		16,910
U.S. Treasury 4.25% 2013		92,500		92,225
U.S. Treasury 12.00% 2013		4,000		4,283
U.S. Treasury 2.00% 2014^3,5		6,342		6,191
U.S. Treasury 4.00% 2014		5,560		5,455
U.S. Treasury 4.25% 2014		22,500		22,335
U.S. Treasury 4.25% 2014		11,025		10,912
U.S. Treasury 11.25% 2015		17,500		24,950
U.S. Treasury 5.125% 2016		26,000		27,113
U.S. Treasury 2.375% 2017^3,5		6,224		6,219
U.S. Treasury 4.625% 2017		12,925		13,000
U.S. Treasury 8.125% 2019		21,100		27,522
U.S. Treasury 8.50% 2020		31,250		42,075
U.S. Treasury 7.875% 2021⁶		15,250		19,827
U.S. Treasury 8.00% 2021		400		529
U.S. Treasury 6.25% 2023		8,665		9,980
U.S. Treasury 7.125% 2023⁶		17,500		21,782
U.S. Treasury 6.50% 2026		1,230		1,476
U.S. Treasury 6.25% 2030		6,000		7,134
U.S. Treasury 5.375% 2031		5,000		5,354
U.S. Treasury 3.375% 2032^3,5		3,504		4,192
U.S. Treasury 4.50% 2036		39,950		37,828
U.S. Treasury 5.00% 2037		15,660		16,059
U.S. Treasury Principal Strip 0% 2019		2,000		1,154
U.S. Treasury Principal Strip 0% 2037		30,000		7,273
				691,892


FEDERAL AGENCY BONDS & NOTES — 9.74%
Freddie Mac 5.25% 2011		99,680		101,415
Freddie Mac 4.50% 2014		5,000		4,890
Freddie Mac 5.25% 2016		9,000		9,114
Freddie Mac 5.50% 2017		9,000		9,274
Small Business Administration, Series SBIC-PS 2006-10A, Participating Securities, 5.408% 2016		12,587		12,541
Small Business Administration, Series 2001-20K, 5.34% 2021¹		2,782		2,807
Small Business Administration, Series 2001-20J, 5.76% 2021¹		1,472		1,498
Small Business Administration, Series 2001-20F, 6.44% 2021¹		4,551		4,699
Small Business Administration, Series 2003-20B, 4.84% 2023¹		8,612		8,464
Federal Agricultural Mortgage Corp. 4.875% 2011⁴		6,750		6,767
Federal Agricultural Mortgage Corp. 5.125% 2011		3,500		3,538
Federal Agricultural Mortgage Corp. 5.50% 2011⁴		6,450		6,622
Federal Agricultural Mortgage Corp. 5.125% 2017⁴		10,225		10,138
United States Agency for International Development, Republic of Egypt 4.45% 2015		19,000		18,358
United States Agency for International Development, State of Israel, Class 1-A, 5.50% 2023		5,000		5,146
Fannie Mae 6.00% 2011		7,550		7,865
Fannie Mae 6.125% 2012		13,750		14,493
Federal Home Loan Bank 5.04% 2008²		13,405		13,408
United States Government-Guaranteed Certificates of Participation, Overseas Private Investment Corp.,
Series 2000-044-A, 3.74% 2015¹		5,644		5,498
United States Government-Guaranteed, Perforadora Centrale SA de CV (Title XI) 4.92% 2018¹		2,301		2,319
United States Government-Guaranteed Ship Financing Obligations, Rowan Companies, Inc. (Title XI) 5.88% 2012¹		1,591		1,629
				250,483


ASSET-BACKED OBLIGATIONS¹ — 5.25%
CPS Auto Receivables Trust, Series 2007-A, Class A-4, MBIA insured, 5.05% 2013^3,4		5,000		4,745
CPS Auto Receivables Trust, Series 2006-D, Class A-4, FSA insured, 5.115% 2013⁴		2,000		1,996
CPS Auto Receivables Trust, Series 2007-B, Class A-4, FSA insured, 5.60% 2014⁴		5,500		5,564
Drive Auto Receivables Trust, Series 2006-1, Class A-4, FSA insured, 5.54% 2013⁴		10,000		10,070
Hyundai Auto Receivables Trust, Series 2006-B, Class A-4, 5.15% 2013		10,000		9,989
Long Beach Acceptance Auto Receivables Trust, Series 2007-A, Class A-4, FSA insured, 5.025% 2014		10,000		9,959
Drivetime Auto Owner Trust, Series 2005-A, Class A-3, MBIA insured, 4.302% 2009⁴		2,611		2,597
Drivetime Auto Owner Trust, Series 2006-B, Class A-3, MBIA insured, 5.227% 2012^2,4		5,083		5,085
Irwin Home Equity, Series 2006-P1, Class 2-A4, AMBAC insured, 5.80% 2037^2,3,4		6,578		6,475
Residential Funding Mortgage Securities II, Inc., Series 2007-HSA3, Class A-I-3, MBIA insured, 6.03% 2037²		4,000		3,834
Residential Funding Mortgage Securities II, Inc., Series 2007-HSA2, Class A-1F, MBIA insured, 8.47% 2037^2,3		2,560		2,432
CWHEQ Home Equity Loan Trust, Series 2007-9, Class 2-A-3, 5.685% 2047^2,4		5,965		5,698
Prestige Auto Receivables Trust, Series 2007-1, Class A-3, FSA insured, 5.58% 2014^3,4		5,500		5,495
AmeriCredit Automobile Receivables Trust, Series 2006-B-G, Class A-4, FGIC insured, 5.21% 2013		2,500		2,498
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-A, MBIA insured, 5.55% 2014		2,812		2,832
AEP Texas Central Transitioning Funding II LLC, Senior Secured Transition Bonds, Series A, Class A-3, 5.09% 2015		5,450		5,330
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-3, FGIC insured, 6.193% 2037^2,3		5,500		5,280
Capital One Auto Finance Trust, Series 2007-A, Class A-3-A, AMBAC insured, 5.25% 2011		5,000		4,991
PSE&G Transition Funding II LLC, Series 2005-1, Class A-2, 4.34% 2014		4,990		4,883
West Penn Funding LLC, Transition Bonds, Series 2005-A, Class A-1, 4.46% 2010⁴		4,830		4,772
PG&E Energy Recovery Funding LLC, Series 2005-2, Class A-2, 5.03% 2014		4,600		4,601
Chase Issuance Trust, Series 2006-8, Class A, 5.671% 2016²		4,500		4,406
J.P. Morgan Mortgage Acquisition Trust, Series 2007-CH1, Class A-F-6, 5.501% 2036²		4,000		3,807
Capital One Multi-asset Execution Trust, Series 2005-11, Class A, 5.651% 2013²		1,670		1,659
Capital One Multi-asset Execution Trust, Series 2006-3, Class A, 5.05% 2018³		2,000		1,977
MBNA Master Credit Card Trust II, Series 2000-H, Class A, 5.861% 2013²		3,250		3,251
Susquehanna Auto Lease Trust, Series 2007-1, Class A-3, 5.25% 2010⁴		3,000		2,993
Santander Drive Auto Receivables Trust, Series 2007-1, Class A-3, FGIC insured, 5.05% 2011		3,000		2,991
UPFC Auto Receivables Trust, Series 2006-B, Class A-3, AMBAC insured, 5.01% 2012		2,000		1,993
Argent Securities Trust, Series 2006-W3, Class A-2C, 5.685% 2036²		2,000		1,915
Oncor Electric Delivery Transition Bond Co. LLC, Series 2003-1, Class A-3, 4.95% 2015		395		392
Reliant Energy Transition Bond Company LLC, Series 2001-1, Class A-4, 5.63% 2015		200		202
Triad Automobile Receivables Trust, Series 2006-C, Class A-2, AMBAC insured, 5.40% 2010		158		158
				134,870

Total bonds & notes (cost: $2,437,943,000)				2,430,815



Short-term securities — 5.79%

Federal Home Loan Bank 4.20%–5.02% due 9/4–9/27/2007		67,300		67,107
Federal Farm Credit Banks 4.50%–5.13% due 9/4–9/18/2007		40,000		39,945
International Bank for Reconstruction and Development 4.60% due 9/12/2007		30,750		30,703
Tennessee Valley Authority 5.12% due 9/13/2007		11,000		10,980


Total short-term securities (cost: $148,735,000)				148,735


Total investment securities (cost: $2,586,678,000)				2,579,550
Other assets less liabilities				(9,486	)

Net assets			$	2,570,064

¹Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date.

²Coupon rate may change periodically.

³Valued under fair value procedures adopted by authority of the board of trustees. The total value of all such securities was $124,662,000.

⁴Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $89,651,000, which represented 3.49% of the net assets of the fund.

⁵Index-linked bond whose principal amount moves with a government retail price index.

⁶This security, or a portion of this security, has been segregated to cover funding requirements on investment transactions settling in the future.

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

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information

is contained in each fund’s prospectus, which can be obtained from a financial adviser and should be read carefully before investing.

MFGEFP-922-1007O-S10927

Financial statements

Statement of assets and liabilities
at August 31, 2007	(dollars and shares in thousands, except per-share amounts)

Assets:
Investment securities at market (cost: $2,586,678)			$	2,579,550
Cash				334
Receivables for:
Sales of investments	$	18,732
Sales of fund's shares		10,103
Interest		13,840		42,675
				2,622,559
Liabilities:
Payables for:
Purchases of investments		44,970
Repurchases of fund's shares		3,876
Dividends on fund's shares		578
Investment advisory services		612
Services provided by affiliates		2,199
Deferred trustees' compensation		164
Other		96		52,495
Net assets at August 31, 2007			$	2,570,064

Net assets consist of:
Capital paid in on shares of beneficial interest			$	2,626,545
Distributions in excess of net investment income				(166	)
Accumulated net realized loss				(49,187	)
Net unrealized depreciation				(7,128	)
Net assets at August 31, 2007			$	2,570,064

Shares of beneficial interest issued and outstanding - unlimited shares authorized (192,490 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*

Class A	$	1,758,062		131,673	$	13.35
Class B		157,611		11,805		13.35
Class C		125,060		9,367		13.35
Class F		99,187		7,428		13.35
Class 529-A		44,491		3,332		13.35
Class 529-B		13,320		998		13.35
Class 529-C		27,360		2,049		13.35
Class 529-E		3,527		264		13.35
Class 529-F		3,245		243		13.35
Class R-1		4,772		357		13.35
Class R-2		102,667		7,690		13.35
Class R-3		87,731		6,571		13.35
Class R-4		74,549		5,584		13.35
Class R-5		68,482		5,129		13.35
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A and 529-A, for which the maximum offering prices per share were $13.87 each.

See Notes to Financial Statements

Statement of operations
for the year ended August 31, 2007	(dollars in thousands)

Investment income:
Income:
Interest				$	122,713

Fees and expenses(*):
Investment advisory services	$	7,659
Distribution services		9,127
Transfer agent services		3,122
Administrative services		1,500
Reports to shareholders		190
Registration statement and prospectus		152
Postage, stationery and supplies		331
Trustees' compensation		95
Auditing and legal		102
Custodian		12
State and local taxes		25
Other		39
Total fees and expenses before reimbursements/waivers		22,354
Less reimbursements/waivers of fees and expenses:
Investment advisory services		766
Administrative services		216
Total fees and expenses after reimbursements/waivers					21,372
Net investment income					101,341

Net realized loss and unrealized appreciation on investments:
Net realized loss on investments					(5,616	)
Net unrealized appreciation on investments					11,729
Net realized loss and unrealized appreciation on investments					6,113

Net increase in net assets resulting from operations				$	107,454

(*) 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
	2007			2006
Operations:
Net investment income	$	101,341		$	88,645
Net realized loss on investments		(5,616	)		(26,761	)
Net unrealized appreciation (depreciation) on investments		11,729			(42,460	)
Net increase in net assets resulting from operations		107,454			19,424

Dividends paid or accrued to shareholders from net investment income		(101,883	)		(90,920	)

Net capital share transactions		208,991			(24,146	)

Total increase (decrease) in net assets		214,562			(95,642	)

Net assets:
Beginning of year		2,355,502			2,451,144
End of year (including distributions in excess of
net investment income: $(166) and $(99), respectively)	$	2,570,064		$	2,355,502

See Notes to Financial Statements

Notes to financial statements

1.	Organization and significant accounting policies

Organization – The American Funds Income Series (the "trust") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company and has initially issued one series of shares, U.S. Government Securities Fund (the "fund"). The fund seeks a high level of current income, consistent with prudent investment risk and preservation of capital, by investing primarily in obligations guaranteed or sponsored by the United States government. The fund may also invest in nongovernment issues rated Aaa/AAA or equivalent.

The fund offers 14 share classes consisting of four retail share classes, five 529 college savings plan share classes and five retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F) can be utilized to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry any conversion rights. The fund’s share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Class 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
Class B and 529-B	None	Declines from 5% to 0% for redemptions within six years of purchase	Class B and 529-B convert to Class 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 after 10 years
Class 529-C	None	1% for redemptions within one year of purchase	None
Class 529-E	None	None	None
Class F and 529-F	None	None	None
Class R-1, R-2, R-3, R-4 and R-5	None	None	None

Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.

Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:

Security valuation – Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the fund to meet their obligations may be affected by economic developments in a specific industry, state or region.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under procedures adopted by authority of the fund's board of trustees. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, 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.

Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

Class allocations – Income, fees and expenses (other than class-specific fees and expenses) are allocated daily among the various share classes based on the relative value of their settled shares. Realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.

Dividends and distributions to shareholders – Dividends paid to shareholders are declared daily after the determination of the fund’s net investment income and are paid to shareholders monthly. Distributions paid to shareholders are recorded on the ex-dividend date.

Mortgage dollar rolls – The fund may enter into mortgage dollar roll transactions in which the fund sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Each mortgage dollar roll is treated as a financing transaction; therefore, any gain or loss is considered unrealized until the roll reaches completion. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Income is generated as consideration for entering into these transactions and is included in interest income on the accompanying financial statements.

2. Federal income taxation and distributions

The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.

The fund adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, on June 29, 2007. The implementation of FIN 48 resulted in no material liability for unrecognized tax benefits and no material change to the beginning net asset value of the fund.

As of and during the period ended August 31, 2007, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2003 and by state tax authorities for tax years before 2002.

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; paydowns on fixed-income securities; and net capital losses. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.

During the year ended August 31, 2007, the fund reclassified $477,000 from accumulated net realized loss to undistributed net investment income, and $2,000 from undistributed net investment income to capital paid in on shares of beneficial interest to align financial reporting with tax reporting.

As of August 31, 2007, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

	(dollars in thousands)
Undistributed ordinary income				$	577
Capital loss carryforwards*:
Expiring 2008	$	(5,664	)
Expiring 2009		(8,375	)
Expiring 2014		(472	)
Expiring 2015		(28,573	)		(43,084	)
Post-October capital loss deferrals (realized during the period November 1, 2006, through August 31, 2007)†					(5,924	)
Gross unrealized appreciation on investment securities					12,647
Gross unrealized depreciation on investment securities					(19,954	)
Net unrealized depreciation on investment securities					(7,307	)
Cost of investment securities					2,586,857

*The capital loss carryforwards will be used to offset any capital gains realized by the fund in future years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.
†These deferrals are considered incurred in the subsequent year.

Ordinary income distributions paid or accrued to shareholders from net investment income were as follows (dollars in thousands):

	Year ended August 31
Share class	2007		2006
Class A	$	73,884	$	68,319
Class B		5,895		5,894
Class C		4,098		3,628
Class F		3,660		2,577
Class 529-A		1,788		1,509
Class 529-B		472		419
Class 529-C		908		729
Class 529-E		145		118
Class 529-F		126		80
Class R-1		148		116
Class R-2		3,593		2,863
Class R-3		4,163		3,579
Class R-4		1,856		671
Class R-5		1,147		418
Total	$	101,883	$	90,920

3. Fees and transactions with related parties

Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company SM ("AFS"), the fund’s transfer agent, and American Funds Distributors, SM Inc. ("AFD"), the principal underwriter of the fund’s shares.

Investment advisory services – The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.30% on the first $60 million of daily net assets and decreasing to 0.15% on such assets in excess of $3 billion. The agreement also provides for monthly fees, accrued daily, based on a declining series of rates beginning with 3.00% on the first $3,333,333 of the fund's monthly gross income and decreasing to 2.00% on such income in excess of $8,333,333. CRMC is currently waiving 10% of investment advisory services fees. During the year ended August 31, 2007, total investment advisory services fees waived by CRMC were $766,000. As a result, the fee shown on the accompanying financial statements of $7,659,000, which was equivalent to an annualized rate of 0.321%, was reduced to $6,893,000, or 0.289% of average daily net assets.

Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:

Distribution services – The fund has adopted plans of distribution for all share classes, except Class R-5. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.30% to 1.00% as noted below. In some cases, the board of trustees has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Class A and 529-A, the board of trustees has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.30% is not exceeded. As of August 31, 2007, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A.

Share class	Currently approved limits	Plan limits
Class A	0.30%	0.30%
Class 529-A	0.30	0.50
Class B and 529-B	1.00	1.00
Class C, 529-C and R-1	1.00	1.00
Class R-2	0.75	1.00
Class 529-E and R-3	0.50	0.75
Class F, 529-F and R-4	0.25	0.50

Transfer agent services – The fund has a transfer agent agreement with AFS for Class A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described below.

Administrative services – The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Class A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. CRMC has agreed to pay AFS on the fund's behalf for a portion of the transfer agent services fees for some of the retirement plan share classes. For the year ended August 31, 2007, the total administrative services fees paid by CRMC were $2,000, $210,000 and $4,000 for Class R-1, R-2 and R-3, respectively. Administrative services fees are presented gross of any payments made by CRMC. Each 529 share class is subject to an additional annual administrative services fee of 0.10% of its respective average daily net assets; this fee is payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.

Expenses under the agreements described above for the year ended August 31, 2007, were as follows (dollars in thousands):

Share class	Distribution services	Transfer agent services	Administrative services
Share class	Distribution services	Transfer agent services	CRMC administrative services	Transfer agent services	Commonwealth of Virginia administrative services
Class A	$4,321	$2,894	Not applicable	Not applicable	Not applicable
Class B	1,596	228	Not applicable	Not applicable	Not applicable
Class C	1,124	Included in administrative services	$167	$44	Not applicable
Class F	205		74	24	Not applicable
Class 529-A	92		52	13	$41
Class 529-B	132		17	6	13
Class 529-C	254		32	10	25
Class 529-E	18		5	1	4
Class 529-F	-		3	1	3
Class R-1	41		5	7	Not applicable
Class R-2	730		139	470	Not applicable
Class R-3	511		128	141	Not applicable
Class R-4	103		46	5	Not applicable
Class R-5	Not applicable		22	2	Not applicable
Total	$9,127	$3,122	$690	$724	$86

Deferred trustees’ compensation – Since the adoption of the deferred compensation plan in 1993, trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Trustees’ compensation of $95,000, shown on the accompanying financial statements, includes $65,000 in current fees (either paid in cash or deferred) and a net increase of $30,000 in the value of the deferred amounts.

Affiliated officers and trustees – Officers and certain trustees of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the fund.

4. Capital share transactions

Capital share transactions in the fund were as follows (dollars and shares in thousands):

Share class	Sales(*)				Reinvestments of dividends				Repurchases(*)						Net increase (decrease)
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended August 31, 2007
Class A	$	449,880		33,761	$	65,732		4,930	$	(446,653	)		(33,525	)	$	68,959			5,166
Class B		22,141		1,661		5,311		398		(39,127	)		(2,936	)		(11,675	)		(877	)
Class C		49,217		3,690		3,649		274		(37,215	)		(2,793	)		15,651			1,171
Class F		46,916		3,524		2,404		180		(26,057	)		(1,959	)		23,263			1,745
Class 529-A		10,677		800		1,779		134		(6,703	)		(503	)		5,753			431
Class 529-B		1,420		107		470		35		(1,692	)		(127	)		198			15
Class 529-C		8,131		609		904		68		(5,258	)		(395	)		3,777			282
Class 529-E		871		65		144		11		(923	)		(69	)		92			7
Class 529-F		1,135		85		125		9		(266	)		(20	)		994			74
Class R-1		2,414		181		146		11		(1,785	)		(134	)		775			58
Class R-2		38,659		2,899		3,559		267		(33,202	)		(2,492	)		9,016			674
Class R-3		49,007		3,675		4,121		309		(72,684	)		(5,443	)		(19,556	)		(1,459	)
Class R-4		64,729		4,847		1,836		138		(12,595	)		(947	)		53,970			4,038
Class R-5		60,531		4,562		1,040		78		(3,797	)		(285	)		57,774			4,355
Total net increase
(decrease)	$	805,728		60,466	$	91,220		6,842	$	(687,957	)		(51,628	)	$	208,991			15,680

Year ended August 31, 2006
Class A	$	389,815		29,260	$	61,956		4,652	$	(515,216	)		(38,681	)	$	(63,445	)		(4,769	)
Class B		18,492		1,389		5,398		405		(45,487	)		(3,415	)		(21,597	)		(1,621	)
Class C		33,065		2,480		3,279		246		(43,575	)		(3,270	)		(7,231	)		(544	)
Class F		48,817		3,677		1,918		144		(27,197	)		(2,049	)		23,538			1,772
Class 529-A		8,621		647		1,530		115		(8,194	)		(616	)		1,957			146
Class 529-B		1,410		106		426		32		(2,064	)		(155	)		(228	)		(17	)
Class 529-C		5,511		414		740		56		(4,905	)		(369	)		1,346			101
Class 529-E		815		61		120		9		(453	)		(34	)		482			36
Class 529-F		773		58		82		6		(202	)		(15	)		653			49
Class R-1		2,075		156		117		9		(1,232	)		(93	)		960			72
Class R-2		35,720		2,681		2,893		218		(27,845	)		(2,090	)		10,768			809
Class R-3		44,435		3,329		3,626		272		(29,540	)		(2,217	)		18,521			1,384
Class R-4		12,422		932		677		51		(5,561	)		(417	)		7,538			566
Class R-5		5,557		415		373		28		(3,338	)		(252	)		2,592			191
Total net increase
(decrease)	$	607,528		45,605	$	83,135		6,243	$	(714,809	)		(53,673	)	$	(24,146	)		(1,825	)

(*) Includes exchanges between share classes of the fund.

5. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities, of $2,678,275,000 and $2,503,606,000, respectively, during the year ended August 31, 2007.

Financial highlights (1)

			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 8/31/2007	$	13.32	$	.59	$	.03				$	.61	$	(.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
Year ended 8/31/2004		13.59		.43		.17					.60		(.45	)		13.74		4.49			1,900		.71					.71					3.14
Year ended 8/31/2003		13.73		.42		(.10	)				.32		(.46	)		13.59		2.29			2,374		.76					.76					3.01
Class B:
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
Year ended 8/31/2004		13.59		.33		.17					.50		(.35	)		13.74		3.72			221		1.47					1.47					2.38
Year ended 8/31/2003		13.73		.32		(.10	)				.22		(.36	)		13.59		1.58			291		1.46					1.46					2.23
Class C:
Year ended 8/31/2007		13.32		.49		.03					.51		(.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
Year ended 8/31/2004		13.59		.32		.17					.49		(.34	)		13.74		3.65			122		1.53					1.53					2.32
Year ended 8/31/2003		13.73		.31		(.10	)				.21		(.35	)		13.59		1.51			170		1.54					1.54					2.19
Class F:
Year ended 8/31/2007		13.32		.60		.03					.62		(.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
Year ended 8/31/2004		13.59		.43		.17					.60		(.45	)		13.74		4.45			33		.75					.75					3.04
Year ended 8/31/2003		13.73		.42		(.10	)				.32		(.46	)		13.59		2.29			23		.75					.75					3.00
Class 529-A:
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
Year ended 8/31/2004		13.59		.42		.17					.59		(.44	)		13.74		4.40			34		.80					.80					3.02
Year ended 8/31/2003		13.73		.42		(.10	)				.32		(.46	)		13.59		2.31			31		.68					.68					2.91
Class 529-B:
Year ended 8/31/2007		13.32		.48		.03					.50		(.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
Year ended 8/31/2004		13.59		.31		.17					.48		(.33	)		13.74		3.54			13		1.64					1.64					2.20
Year ended 8/31/2003		13.73		.29		(.10	)				.19		(.33	)		13.59		1.38			14		1.63					1.63					1.92
Class 529-C:
Year ended 8/31/2007		13.32		.48		.03					.50		(.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
Year ended 8/31/2004		13.59		.31		.17					.48		(.33	)		13.74		3.55			21		1.63					1.63					2.20
Year ended 8/31/2003		13.73		.29		(.10	)				.19		(.33	)		13.59		1.39			20		1.62					1.62					1.99
Class 529-E:
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
Year ended 8/31/2004		13.59		.38		.17					.55		(.40	)		13.74		4.08			2		1.11					1.11					2.71
Year ended 8/31/2003		13.73		.37		(.10	)				.27		(.41	)		13.59		1.92			2		1.10					1.10					2.48
Class 529-F:
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
Year ended 8/31/2004		13.59		.41		.17					.58		(.43	)		13.74		4.33			1		.86					.86					2.94
Period from 10/11/2002 to 8/31/2003		13.83		.30		(.15	)				.15		(.39	)		13.59		1.04			1		.84		(6	)		.84		(6	)		2.49		(6	)
Class R-1:
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
Year ended 8/31/2004		13.59		.32		.17					.49		(.34	)		13.74		3.66			2		1.74					1.52					2.26
Year ended 8/31/2003		13.73		.31		(.10	)				.21		(.35	)		13.59		1.49			1		2.02					1.52					1.86
Class R-2:
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
Year ended 8/31/2004		13.59		.33		.17					.50		(.35	)		13.74		3.70			68		2.02					1.48					2.32
Year ended 8/31/2003		13.73		.31		(.10	)				.21		(.35	)		13.59		1.53			43		2.05					1.47					1.81
Class R-3:
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
Year ended 8/31/2004		13.59		.38		.17					.55		(.40	)		13.74		4.09			73		1.23					1.10					2.71
Year ended 8/31/2003		13.73		.37		(.10	)				.27		(.41	)		13.59		1.93			50		1.16					1.08					1.80
Class R-4:
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
Year ended 8/31/2004		13.59		.43		.17					.60		(.45	)		13.74		4.45			8		.74					.74					3.05
Year ended 8/31/2003		13.73		.42		(.10	)				.32		(.46	)		13.59		2.30			5		.75					.73					2.58
Class R-5:
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
Year ended 8/31/2004		13.59		.47		.17					.64		(.49	)		13.74		4.78			7		.42					.42					3.39
Year ended 8/31/2003		13.73		.46		(.10	)				.36		(.50	)		13.59		2.63			9		.43					.43					3.31

	Year ended August 31
	2007			2006			2005			2004			2003

Portfolio turnover rate for all classes of shares		110	%		146	%		104	%		72	%		82	%

(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 all 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.

(6) Annualized.

See Notes to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of

The American Funds Income Series - U.S. Government Securities Fund:

We have audited the accompanying statement of assets and liabilities of The American Funds Income Series - U.S. Government Securities Fund, (the “Fund”), including the investment portfolio, as of August 31, 2007, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The American Funds Income Series - U.S. Government Securities Fund as of August 31, 2007, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Costa Mesa, California

October 11, 2007

Tax information

unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amount for the fund’s fiscal year ended August 31, 2007:

U.S. government income that may be exempt from state taxation

39,694,000

Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2008, to determine the calendar year amounts to be included on their 2007 tax returns. Shareholders should consult their tax advisers.

financials

html

<PAGE>





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




U.S. Government
Securities Fund/SM/




 RETIREMENT PLAN
 PROSPECTUS





 November 1, 2007







TABLE OF CONTENTS

 1    Risk/Return summary
 4    Fees and expenses of the fund
 6    Investment objective, strategies and risks
10    Management and organization
13    Purchase, exchange and sale of shares
17    Sales charges
19    Sales charge reductions
20   Rollovers from retirement plans to IRAs
21   Plans of distribution
22   Other compensation to dealers
23    Distributions and taxes
24    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>

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



<PAGE>

Risk/Return summary

The fund seeks to provide you with a high level of current income as well as to
preserve your investment by investing primarily in securities that are
guaranteed or sponsored by the U.S. government. All securities held by the fund
will be rated AAA/Aaa or equivalent.

The fund is designed for investors seeking income, higher credit quality and
capital preservation over the long term.  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.

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. Examples of
such securities are mortgage-backed securities issued by the Federal National
Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage
Corporation ("Freddie Mac"). The fund may invest up to 20% of its assets in
non-government securities rated AAA or Aaa (or in unrated securities determined
to be of equivalent quality by the fund's investment adviser).

While the fund invests in the highest quality debt securities, 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. Prepayment risk is the risk that the
issuers of fixed-income securities owned by the fund will prepay them at a time
when interest rates have declined, which may require the fund to reinvest the
proceeds in lower yielding securities. It is important to note that neither the
fund nor its 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.

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.


                                       1

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

HISTORICAL INVESTMENT RESULTS

The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 3 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. All fund results 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. Past results are not predictive of future results.


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]
1997          8.39
1998          7.87
1999         -1.59
2000         11.93
2001          6.41
2002          9.02
2003          1.91
2004          2.88
2005          2.27
2006          3.15
[end bar chart]



Highest/Lowest quarterly results during this time period were:




HIGHEST            4.59%  (quarter ended September 30, 1998)
LOWEST            -2.00%  (quarter ended June 30, 2004)


The fund's total return for the nine months ended September 30, 2007, was 3.71%.



                                       2

U.S. Government Securities Fund / Prospectus


<PAGE>



Unlike the bar chart on the previous page, the Investment Results table below
reflects, as required by Securities and Exchange Commission rules, the fund's
investment results with the following maximum initial sales charge imposed:

 . Class A share results reflect the maximum initial sales charge of 3.75%. This
   charge is reduced for purchases of $100,000 or more and eliminated for
   purchases of $1 million or more.

 . Class R shares are sold without any initial sales charge.

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 8 reflects the fund's results calculated without a sales charge.

 INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                  1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
--------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 10/17/85   -0.75%   3.02%    4.75%        6.51%




                                  1 YEAR   LIFETIME/1/
-------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/13/02  2.41%       2.74%
 CLASS R-2 -- FIRST SOLD 5/31/02  2.43        2.84
 CLASS R-3 -- FIRST SOLD 6/6/02   2.82        3.25
 CLASS R-4 -- FIRST SOLD 5/28/02  3.18        3.66
 CLASS R-5 -- FIRST SOLD 5/15/02  3.49        4.11




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

 INDEXES
 Citigroup Treasury/Govt               4.26%    4.78%    6.10%        7.78%
 Sponsored/Mortgage Index/3/
 Lipper General U.S. Government Funds  2.71     3.85     5.10         6.69
 Average/4/
 Consumer Price Index/5/               2.54     2.69     2.44         2.96
Class A 30-day annualized yield at August 31, 2007: 4.33%/6/
(For current yield information, please call American FundsLine/(R)/ at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.
/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The funds or securities that compose each index may
     vary over time.

/3/  Citigroup Treasury/Government Sponsored/Mortgage Index (formerly Salomon Smith
     Barney Treasury/Government Sponsored/Mortgage Index) is a market-weighted index
     that includes U.S. Treasury and agency securities, as well as FNMAs, FHLMCs and
     GNMAs. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper General U.S. Government Funds Average is comprised of funds that invest
     at least 65% of their assets 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, but do not reflect sales charges or taxes.
/5/  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.
/6/  Reflects a fee waiver (4.30% without the waiver) as described in the Annual
     Fund Operating Expenses table under "Fees and expenses of the fund."


                                       3

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

Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.



 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
                                               CLASS A    ALL R SHARE CLASSES
------------------------------------------------------------------------------

 Maximum initial sales charge on purchases      3.75%/*/         none
 (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum sales charge on reinvested dividends    none            none
------------------------------------------------------------------------------
 Maximum contingent deferred sales charge        none            none
------------------------------------------------------------------------------
 Redemption or exchange fees                     none            none



* The initial sales charge is reduced for purchases of $100,000 or more and
 eliminated for purchases of $1 million or more.


 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
                                            CLASS  CLASS  CLASS  CLASS   CLASS
                                   CLASS A   R-1    R-2    R-3    R-4     R-5
-------------------------------------------------------------------------------

 Management fees/1/                 0.32%   0.32%  0.32%  0.32%  0.32%   0.32%
-------------------------------------------------------------------------------
 Distribution and/or service        0.26    1.00   0.75   0.50   0.25    none
 (12b-1) fees/2/
-------------------------------------------------------------------------------
 Other expenses                     0.21    0.33   0.66   0.29   0.15    0.13
-------------------------------------------------------------------------------
 Total annual fund operating        0.79    1.65   1.73   1.11   0.72    0.45
 expenses/1/
-------------------------------------------------------------------------------




/1/  The fund's investment adviser is currently waiving 10% of its management fee.
     The waiver may be discontinued at any time, in consultation with the fund's
     board, but it is expected to continue at this level until further review. The
     fund's investment adviser and board intend to review the waiver as
     circumstances warrant. In addition, the investment adviser paid a portion of
     the fund's transfer agent fees for certain R share classes. Management fees and
     total expenses in the table do not reflect any waiver or reimbursement.
     Information regarding the effect of any waiver/reimbursement on total annual
     fund operating expenses can be found in the Financial Highlights table in this
     prospectus and in the fund's annual report.

/2/  Class A, R-1, R-2, R-3 and R-4 12b-1 fees may not exceed .30%, 1.00%, 1.00%,
     .75% and .50%, respectively, of the class' average net assets annually.


                                       4

U.S. Government Securities Fund / Prospectus


<PAGE>

OTHER EXPENSES

The "Other expenses" items in the table above 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
-------------------------------------------------------------------------------




/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.

EXAMPLES

The examples below are intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The examples do not reflect the impact of any fee waivers
or expense reimbursements.


Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

                                1 YEAR  3 YEARS  5 YEARS   10 YEARS
--------------------------------------------------------------------

 Class A*                        $453    $618     $797      $1,316
--------------------------------------------------------------------
 Class R-1                        168     520      897       1,955
--------------------------------------------------------------------
 Class R-2                        176     545      939       2,041
--------------------------------------------------------------------
 Class R-3                        113     353      612       1,352
--------------------------------------------------------------------
 Class R-4                         74     230      401         894
--------------------------------------------------------------------
 Class R-5                         46     144      252         567
--------------------------------------------------------------------




* Reflects the maximum initial sales charge.


                                       5

                                   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. Normally,
the fund will invest at least 80% of its assets in securities guaranteed or
sponsored by the U.S. government, including securities issued by U.S.
governmental agencies or instrumentalities that are not guaranteed by the U.S.
government. In addition, the fund may invest up to 20% of its assets in
non-government securities that are rated AAA or Aaa or that are unrated but
determined to be of equivalent quality by the fund's investment adviser. Such
investments may include securities backed by pools of mortgages, also called
"mortgage-backed securities" or other asset-backed securities.

The values of most debt securities held by the fund may be affected by changing
interest rates and prepayment risk. 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.

In addition, falling interest rates may cause an issuer to redeem or "call" a
security before its stated maturity. 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 prices for these
securities will fluctuate with changes in interest rates.

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. 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.


                                       6

U.S. Government Securities Fund / Prospectus


<PAGE>

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.


                                       7

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

ADDITIONAL INVESTMENT RESULTS

Unlike the Investment Results table on page 3, the table below reflects the
fund's results calculated without a sales charge.

 ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                   1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
---------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 10/17/85    3.15%    3.81%    5.15%        6.70%




                                   1 YEAR   LIFETIME/1/
--------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/13/02   2.41%       2.74%
 CLASS R-2 -- FIRST SOLD 5/31/02   2.43        2.84
 CLASS R-3 -- FIRST SOLD 6/6/02    2.82        3.25
 CLASS R-4 -- FIRST SOLD 5/28/02   3.18        3.66
 CLASS R-5 -- FIRST SOLD 5/15/02   3.49        4.11




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

 INDEXES
 Citigroup Treasury/Govt            4.26%    4.78%      6.10%        7.78%
 Sponsored/Mortgage Index/3/
 Lipper General U.S. Government     2.71     3.85       5.10         6.69
 Funds Average/4/
 Consumer Price Index/5/            2.54     2.69       2.44         2.96
Class A distribution rate at December 31, 2006: 4.49%/6/
(For current distribution rate information, please call American FundsLine at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.
/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The funds or securities that compose each index may
     vary over time.

/3/  Citigroup Treasury/Government Sponsored/Mortgage Index (formerly Salomon Smith
     Barney Treasury/Government Sponsored/Mortgage Index) is a market-weighted index
     that includes U.S. Treasury and agency securities, as well as FNMAs, FHLMCs and
     GNMAs. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper General U.S. Government Funds Average is comprised of funds that invest
     at least 65% of their assets 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, but do not reflect sales charges or taxes.
/5/  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.

/6/  Reflects a fee waiver (4.45% without the waiver) as described in the Annual
     Fund Operating Expenses table under "Fees and expenses of the fund." Calculated
     by annualizing dividends paid by the fund over one month plus any special
     dividends paid during the month, and dividing this amount by the fund's average
     net asset value for the month.


                                       8

U.S. Government Securities Fund / Prospectus


<PAGE>

[begin pie chart]

Holdings by type of investment as of August 31, 2007

Mortgage-backed obligations                              52.7%
U.S. Treasury bonds & notes                              26.9%
Federal agency bonds & notes                              9.7%
Asset-backed obligations                                  5.3%
Short-term securities & other assets less liabilities     5.4%
[end pie chart]



 QUALITY BREAKDOWN AS OF AUGUST 31, 2007
                                                         PERCENT OF NET ASSETS

 U.S. government obligations*                                    31.8%
-------------------------------------------------------------------------------
 Federal agencies                                                45.5
-------------------------------------------------------------------------------
 Aaa/AAA                                                         17.3
-------------------------------------------------------------------------------
 Short-term securities and other assets less                      5.4
liabilities




* These securities are guaranteed by the full faith and credit of the U.S.
  government.

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.


                                       9

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

Management and organization

INVESTMENT ADVISER

Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including 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." As described more fully in the fund's statement of
additional information, the management fee is based on the daily net assets of
the fund and the fund's monthly gross investment income. 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, 2007.

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 generally function
separately from each other with respect to investment research activities and
make investment and proxy voting decisions on a separate basis.


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.


                                       10

U.S. Government Securities Fund / Prospectus


<PAGE>

PORTFOLIO HOLDINGS

Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the lower
portion of the fund's details 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.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
decide how their respective segments will be invested. 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.


                                       11

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

The primary individual portfolio counselors for U.S. Government Securities Fund
are:


                                       PRIMARY TITLE WITH      PORTFOLIO
                         PORTFOLIO     INVESTMENT ADVISER      COUNSELOR'S
 PORTFOLIO COUNSELOR/    COUNSELOR     (OR AFFILIATE)          ROLE IN
 FUND TITLE              EXPERIENCE    AND INVESTMENT          MANAGEMENT
 (IF APPLICABLE)        IN THIS FUND   EXPERIENCE              OF THE FUND
--------------------------------------------------------------------------------------

 JOHN H. SMET             21 years     Senior Vice President   Serves as a
 President and Trustee                 - Fixed Income,         fixed-income portfolio
                                       Capital Research and    counselor
                                       Management Company

                                       Investment
                                       professional for 25
                                       years in total;
                                       24 years with Capital
                                       Research and
                                       Management Company or
                                       affiliate
--------------------------------------------------------------------------------------
 THOMAS H. HOGH           11 years     Senior Vice President   Serves as a
 Vice President                        - Fixed Income,         fixed-income portfolio
                                       Capital Research        counselor
                                       Company

                                       Investment
                                       professional for 21
                                       years in total;
                                       18 years with Capital
                                       Research and
                                       Management Company or
                                       affiliate
--------------------------------------------------------------------------------------
 MARK R. MACDONALD         1 year      Senior Vice President   Serves as a
                                       - Fixed Income, and     fixed-income portfolio
                                       Director, Capital       counselor
                                       Research and
                                       Management Company

                                       Investment
                                       professional for 22
                                       years in total;
                                       13 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 can be found 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 PLAN RECORDKEEPER FOR
MORE INFORMATION.


                                       12

U.S. Government Securities Fund / 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, 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 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 generally are available only to 401(k) plans, 457 plans,
employer-sponsored 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 shares
generally are available only to retirement plans with $1 million or more in plan
assets. In addition, Class R-5 shares are available for investment by American
Funds Target Date Retirement Series./(R)/ 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, individual 403(b) plans 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 funds purchased without a sales charge
generally will be subject to the appropriate sales charge.

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


                                       13

                                   U.S. Government Securities Fund / 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.

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 (including
redemptions that are part of an exchange transaction) having a value of $5,000
or more from the fund will be precluded from investing in the fund (including
investments that are part of an exchange transaction) for 30 calendar days after
the redemption transaction. 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.

The fund reserves the right to waive the purchase blocking policy 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 procedures that American Funds Service Company believes are
reasonably designed to enforce the frequent trading policies of the fund. You
should refer to disclosures provided


                                       14

U.S. Government Securities Fund / Prospectus


<PAGE>

by the intermediaries with which you have an account to determine the specific
trading restrictions that apply to you.

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 FUND'S AND AMERICAN FUNDS
DISTRIBUTORS' RIGHT 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.


SALES

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

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 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, reinvestment can be made 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 funds that are
reinvested in non-money market 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 and accepted by American Funds Service Company. 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. 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." This paragraph does not apply to certain
rollover investments as described under "Rollovers from retirement plans to
IRAs."


                                       15

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

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.


Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request.

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.


                                       16

U.S. Government Securities Fund / Prospectus


<PAGE>

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. The "offering price," the price you pay to buy
shares, includes any applicable sales charge, which will be deducted directly
from your investment. Shares acquired through reinvestment of dividends or
capital gain distributions are not subject to an initial sales charge.



                               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.

CLASS A 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 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" below 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" below).


                                       17

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

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.
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." Plans investing in Class A shares with a sales charge may purchase
 additional Class A shares in accordance with the sales charge table above.


 Employer-sponsored retirement plans that invested in Class A shares without any
 sales charge on or before March 31, 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.

CLASS R SHARES

Class R shares are sold without any initial or contingent deferred sales charge.
The distributor will pay dealers annually an 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 on sales of Class R-5 shares. The fund may reimburse the distributor for
these payments through its plans of distribution (see "Plans of distribution"
below).


                                       18

U.S. Government Securities Fund / Prospectus


<PAGE>

Sales charge reductions

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 BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
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 these purposes. 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 funds
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 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 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
 (excluding capital appreciation) less any withdrawals. Please see the statement
 of additional information for details. You should retain any records necessary
 to substantiate the historical amounts you have invested.


 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


                                       19

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

 American Funds non-money market funds 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" above for more
 information.


RIGHT OF REINVESTMENT

Please see the "Sales" section of "Purchase, exchange and sale of shares" above
for information on how to reinvest proceeds from a redemption, dividend payment
or capital gain distribution without a sales charge.

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover. More information on Class B, 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.

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 the prospectus and
statement of additional information.


                                       20

U.S. Government Securities Fund / Prospectus


<PAGE>

Plans of distribution

The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of 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, 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." 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.


                                       21

                                   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 75 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 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the 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 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.


                                       22

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 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 DIVIDENDS AND DISTRIBUTIONS

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

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.


                                       23

                                   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
footnotes to the Annual Fund Operating Expenses table under "Fees and expenses
of the fund" in this prospectus and the fund's 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 (LOSS) 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 year      income       unrealized)     operations     income)        year         return/2/,/3/
---------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 8/31/2007   $13.32        $.59          $ .03            $.61         $(.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
Year ended 8/31/2004    13.59         .43            .17             .60          (.45)        13.74           4.49
Year ended 8/31/2003    13.73         .42           (.10)            .32          (.46)        13.59           2.29
---------------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 8/31/2007    13.32         .48            .03             .51          (.48)        13.35           3.89
Year ended 8/31/2006    13.72         .42           (.39)            .03          (.43)        13.32            .30
Year ended 8/31/2005    13.74         .33             --/4/          .33          (.35)        13.72           2.46
Year ended 8/31/2004    13.59         .32            .17             .49          (.34)        13.74           3.66
Year ended 8/31/2003    13.73         .31           (.10)            .21          (.35)        13.59           1.49
---------------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 8/31/2007    13.32         .49            .03             .52          (.49)        13.35           3.98
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           2.50
Year ended 8/31/2004    13.59         .33            .17             .50          (.35)        13.74           3.70
Year ended 8/31/2003    13.73         .31           (.10)            .21          (.35)        13.59           1.53
---------------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 8/31/2007   $13.32        $.54          $ .03            $.57         $(.54)       $13.35           4.39%
Year ended 8/31/2006    13.72         .48           (.39)            .09          (.49)        13.32            .69
Year ended 8/31/2005    13.74         .39             --/4/          .39          (.41)        13.72           2.88
Year ended 8/31/2004    13.59         .38            .17             .55          (.40)        13.74           4.09
Year ended 8/31/2003    13.73         .37           (.10)            .27          (.41)        13.59           1.93
---------------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 8/31/2007    13.32         .59            .03             .62          (.59)        13.35           4.79
Year ended 8/31/2006    13.72         .53           (.39)            .14          (.54)        13.32           1.06
Year ended 8/31/2005    13.74         .44             --/4/          .44          (.46)        13.72           3.25
Year ended 8/31/2004    13.59         .43            .17             .60          (.45)        13.74           4.45
Year ended 8/31/2003    13.73         .42           (.10)            .32          (.46)        13.59           2.30
---------------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 8/31/2007    13.32         .63            .03             .66          (.63)        13.35           5.07
Year ended 8/31/2006    13.72         .56           (.39)            .17          (.57)        13.32           1.36
Year ended 8/31/2005    13.74         .48             --/4/          .48          (.50)        13.72           3.56
Year ended 8/31/2004    13.59         .47            .17             .64          (.49)        13.74           4.78
Year ended 8/31/2003    13.73         .46           (.10)            .36          (.50)        13.59           2.63





                                       24

U.S. Government Securities Fund / Prospectus


<PAGE>


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

CLASS A:
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
Year ended 8/31/2004      1,900          .71          .71           3.14
Year ended 8/31/2003      2,374          .76          .76           3.01
------------------------------------------------------------------------------
CLASS R-1:
Year ended 8/31/2007          5         1.65         1.57           3.57
Year ended 8/31/2006          4         1.63         1.49           3.17
Year ended 8/31/2005          3         1.66         1.50           2.43
Year ended 8/31/2004          2         1.74         1.52           2.26
Year ended 8/31/2003          1         2.02         1.52           1.86
------------------------------------------------------------------------------
CLASS R-2:
Year ended 8/31/2007        103         1.73         1.48           3.66
Year ended 8/31/2006         94         1.93         1.47           3.18
Year ended 8/31/2005         85         1.94         1.47           2.46
Year ended 8/31/2004         68         2.02         1.48           2.32
Year ended 8/31/2003         43         2.05         1.47           1.81
------------------------------------------------------------------------------
CLASS R-3:
Year ended 8/31/2007     $   88         1.11%        1.08%          4.05%
Year ended 8/31/2006        107         1.20         1.09           3.56
Year ended 8/31/2005         91         1.20         1.08           2.84
Year ended 8/31/2004         73         1.23         1.10           2.71
Year ended 8/31/2003         50         1.16         1.08           1.80
------------------------------------------------------------------------------
CLASS R-4:
Year ended 8/31/2007         75          .72          .69           4.50
Year ended 8/31/2006         21          .75          .72           3.96
Year ended 8/31/2005         13          .74          .72           3.21
Year ended 8/31/2004          8          .74          .74           3.05
Year ended 8/31/2003          5          .75          .73           2.58
------------------------------------------------------------------------------
CLASS R-5:
Year ended 8/31/2007         68          .45          .41           4.79
Year ended 8/31/2006         10          .45          .42           4.24
Year ended 8/31/2005          8          .43          .41           3.50
Year ended 8/31/2004          7          .42          .42           3.39
Year ended 8/31/2003          9          .43          .43           3.31




                                           YEAR ENDED AUGUST 31
                           2007        2006        2005        2004         2003
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
 RATE FOR ALL CLASSES      110%        146%        104%         72%          82%
 OF SHARES




/1/  Based on average shares outstanding.

/2/  Total returns exclude all 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.


                                       25

                                   U.S. Government Securities Fund / Prospectus

<PAGE>

NOTES


                                       26

U.S. Government Securities Fund / Prospectus


<PAGE>

NOTES


                                       27

                                   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 ADVISER MARKETING                 American Funds Distributors
                                       800/421-9900
 FOR 24-HOUR INFORMATION               americanfunds.com
                                       For Class R share information, visit
                                       AmericanFundsRetirement.com


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


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.

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).


STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information on all aspects
of 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 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, DC
(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,
DC 20549-0102. The current SAI and shareholder reports are also available, free
of charge, on americanfunds.com.


HOUSEHOLD MAILINGS Each year you are automatically sent an updated 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.

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 on its website at sipc.org or by calling 202/371-8300.



[logo - recycled bug]
Printed on recycled paper





Printed on recycled paper
RPGEPR-922-1107P Litho in USA CGD/B/8034    Investment Company File No. 811-04318
---------------------------------------------------------------------------------
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/




 RETIREMENT PLAN
 PROSPECTUS





 November 1, 2007







TABLE OF CONTENTS

 1    Risk/Return summary
 4    Fees and expenses of the fund
 6    Investment objective, strategies and risks
10    Management and organization
13    Purchase, exchange and sale of shares
17    Sales charges
19    Sales charge reductions
20   Rollovers from retirement plans to IRAs
21   Plans of distribution
22   Other compensation to dealers
23    Distributions and taxes
24    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>

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



<PAGE>

Risk/Return summary

The fund seeks to provide you with a high level of current income as well as to
preserve your investment by investing primarily in securities that are
guaranteed or sponsored by the U.S. government. All securities held by the fund
will be rated AAA/Aaa or equivalent.

The fund is designed for investors seeking income, higher credit quality and
capital preservation over the long term.  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.

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. Examples of
such securities are mortgage-backed securities issued by the Federal National
Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage
Corporation ("Freddie Mac"). The fund may invest up to 20% of its assets in
non-government securities rated AAA or Aaa (or in unrated securities determined
to be of equivalent quality by the fund's investment adviser).

While the fund invests in the highest quality debt securities, 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. Prepayment risk is the risk that the
issuers of fixed-income securities owned by the fund will prepay them at a time
when interest rates have declined, which may require the fund to reinvest the
proceeds in lower yielding securities. It is important to note that neither the
fund nor its 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.

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.


                                       1

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

HISTORICAL INVESTMENT RESULTS

The bar chart below shows how the fund's investment results have varied from
year to year, and the Investment Results table on page 3 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. All fund results 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. Past results are not predictive of future results.


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]
1997          8.39
1998          7.87
1999         -1.59
2000         11.93
2001          6.41
2002          9.02
2003          1.91
2004          2.88
2005          2.27
2006          3.15
[end bar chart]



Highest/Lowest quarterly results during this time period were:




HIGHEST            4.59%  (quarter ended September 30, 1998)
LOWEST            -2.00%  (quarter ended June 30, 2004)


The fund's total return for the nine months ended September 30, 2007, was 3.71%.



                                       2

U.S. Government Securities Fund / Prospectus


<PAGE>



Unlike the bar chart on the previous page, the Investment Results table below
reflects, as required by Securities and Exchange Commission rules, the fund's
investment results with the following maximum initial sales charge imposed:

 . Class A share results reflect the maximum initial sales charge of 3.75%. This
   charge is reduced for purchases of $100,000 or more and eliminated for
   purchases of $1 million or more.

 . Class R shares are sold without any initial sales charge.

Results would be higher if calculated without a sales charge.

Unlike the Investment Results table below, the Additional Investment Results
table on page 8 reflects the fund's results calculated without a sales charge.

 INVESTMENT RESULTS (WITH A MAXIMUM SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                  1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
--------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 10/17/85   -0.75%   3.02%    4.75%        6.51%




                                  1 YEAR   LIFETIME/1/
-------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/13/02  2.41%       2.74%
 CLASS R-2 -- FIRST SOLD 5/31/02  2.43        2.84
 CLASS R-3 -- FIRST SOLD 6/6/02   2.82        3.25
 CLASS R-4 -- FIRST SOLD 5/28/02  3.18        3.66
 CLASS R-5 -- FIRST SOLD 5/15/02  3.49        4.11




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

 INDEXES
 Citigroup Treasury/Govt               4.26%    4.78%    6.10%        7.78%
 Sponsored/Mortgage Index/3/
 Lipper General U.S. Government Funds  2.71     3.85     5.10         6.69
 Average/4/
 Consumer Price Index/5/               2.54     2.69     2.44         2.96
Class A 30-day annualized yield at August 31, 2007: 4.33%/6/
(For current yield information, please call American FundsLine/(R)/ at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.
/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The funds or securities that compose each index may
     vary over time.

/3/  Citigroup Treasury/Government Sponsored/Mortgage Index (formerly Salomon Smith
     Barney Treasury/Government Sponsored/Mortgage Index) is a market-weighted index
     that includes U.S. Treasury and agency securities, as well as FNMAs, FHLMCs and
     GNMAs. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper General U.S. Government Funds Average is comprised of funds that invest
     at least 65% of their assets 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, but do not reflect sales charges or taxes.
/5/  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.
/6/  Reflects a fee waiver (4.30% without the waiver) as described in the Annual
     Fund Operating Expenses table under "Fees and expenses of the fund."


                                       3

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

Fees and expenses of the fund

These tables describe the fees and expenses that you may pay if you buy and hold
shares of the fund.



 SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
                                               CLASS A    ALL R SHARE CLASSES
------------------------------------------------------------------------------

 Maximum initial sales charge on purchases      3.75%/*/         none
 (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum sales charge on reinvested dividends    none            none
------------------------------------------------------------------------------
 Maximum contingent deferred sales charge        none            none
------------------------------------------------------------------------------
 Redemption or exchange fees                     none            none



* The initial sales charge is reduced for purchases of $100,000 or more and
 eliminated for purchases of $1 million or more.


 ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
                                            CLASS  CLASS  CLASS  CLASS   CLASS
                                   CLASS A   R-1    R-2    R-3    R-4     R-5
-------------------------------------------------------------------------------

 Management fees/1/                 0.32%   0.32%  0.32%  0.32%  0.32%   0.32%
-------------------------------------------------------------------------------
 Distribution and/or service        0.26    1.00   0.75   0.50   0.25    none
 (12b-1) fees/2/
-------------------------------------------------------------------------------
 Other expenses                     0.21    0.33   0.66   0.29   0.15    0.13
-------------------------------------------------------------------------------
 Total annual fund operating        0.79    1.65   1.73   1.11   0.72    0.45
 expenses/1/
-------------------------------------------------------------------------------




/1/  The fund's investment adviser is currently waiving 10% of its management fee.
     The waiver may be discontinued at any time, in consultation with the fund's
     board, but it is expected to continue at this level until further review. The
     fund's investment adviser and board intend to review the waiver as
     circumstances warrant. In addition, the investment adviser paid a portion of
     the fund's transfer agent fees for certain R share classes. Management fees and
     total expenses in the table do not reflect any waiver or reimbursement.
     Information regarding the effect of any waiver/reimbursement on total annual
     fund operating expenses can be found in the Financial Highlights table in this
     prospectus and in the fund's annual report.

/2/  Class A, R-1, R-2, R-3 and R-4 12b-1 fees may not exceed .30%, 1.00%, 1.00%,
     .75% and .50%, respectively, of the class' average net assets annually.


                                       4

U.S. Government Securities Fund / Prospectus


<PAGE>

OTHER EXPENSES

The "Other expenses" items in the table above 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
-------------------------------------------------------------------------------




/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.

EXAMPLES

The examples below are intended to help you compare the cost of investing in the
fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in the fund for the time periods indicated, that your
investment has a 5% return each year, that all dividends and capital gain
distributions are reinvested, and that the fund's operating expenses remain the
same as shown above. The examples do not reflect the impact of any fee waivers
or expense reimbursements.


Although your actual costs may be higher or lower, based on these assumptions,
your cumulative estimated expenses would be:

                                1 YEAR  3 YEARS  5 YEARS   10 YEARS
--------------------------------------------------------------------

 Class A*                        $453    $618     $797      $1,316
--------------------------------------------------------------------
 Class R-1                        168     520      897       1,955
--------------------------------------------------------------------
 Class R-2                        176     545      939       2,041
--------------------------------------------------------------------
 Class R-3                        113     353      612       1,352
--------------------------------------------------------------------
 Class R-4                         74     230      401         894
--------------------------------------------------------------------
 Class R-5                         46     144      252         567
--------------------------------------------------------------------




* Reflects the maximum initial sales charge.


                                       5

                                   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. Normally,
the fund will invest at least 80% of its assets in securities guaranteed or
sponsored by the U.S. government, including securities issued by U.S.
governmental agencies or instrumentalities that are not guaranteed by the U.S.
government. In addition, the fund may invest up to 20% of its assets in
non-government securities that are rated AAA or Aaa or that are unrated but
determined to be of equivalent quality by the fund's investment adviser. Such
investments may include securities backed by pools of mortgages, also called
"mortgage-backed securities" or other asset-backed securities.

The values of most debt securities held by the fund may be affected by changing
interest rates and prepayment risk. 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.

In addition, falling interest rates may cause an issuer to redeem or "call" a
security before its stated maturity. 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 prices for these
securities will fluctuate with changes in interest rates.

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. 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.


                                       6

U.S. Government Securities Fund / Prospectus


<PAGE>

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.


                                       7

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

ADDITIONAL INVESTMENT RESULTS

Unlike the Investment Results table on page 3, the table below reflects the
fund's results calculated without a sales charge.

 ADDITIONAL INVESTMENT RESULTS (WITHOUT A SALES CHARGE)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2006:
                                   1 YEAR  5 YEARS  10 YEARS   LIFETIME/1/
---------------------------------------------------------------------------

 CLASS A -- FIRST SOLD 10/17/85    3.15%    3.81%    5.15%        6.70%




                                   1 YEAR   LIFETIME/1/
--------------------------------------------------------

 CLASS R-1 -- FIRST SOLD 6/13/02   2.41%       2.74%
 CLASS R-2 -- FIRST SOLD 5/31/02   2.43        2.84
 CLASS R-3 -- FIRST SOLD 6/6/02    2.82        3.25
 CLASS R-4 -- FIRST SOLD 5/28/02   3.18        3.66
 CLASS R-5 -- FIRST SOLD 5/15/02   3.49        4.11




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

 INDEXES
 Citigroup Treasury/Govt            4.26%    4.78%      6.10%        7.78%
 Sponsored/Mortgage Index/3/
 Lipper General U.S. Government     2.71     3.85       5.10         6.69
 Funds Average/4/
 Consumer Price Index/5/            2.54     2.69       2.44         2.96
Class A distribution rate at December 31, 2006: 4.49%/6/
(For current distribution rate information, please call American FundsLine at 800/325-3590.)




/1/  Lifetime results for each share class are measured from the date the share
     class was first sold.
/2/  Lifetime results for the index(es) shown are measured from the date Class A
     shares were first sold. The funds or securities that compose each index may
     vary over time.

/3/  Citigroup Treasury/Government Sponsored/Mortgage Index (formerly Salomon Smith
     Barney Treasury/Government Sponsored/Mortgage Index) is a market-weighted index
     that includes U.S. Treasury and agency securities, as well as FNMAs, FHLMCs and
     GNMAs. This index is unmanaged and includes reinvested dividends and/or
     distributions, but does not reflect sales charges, commissions, expenses or
     taxes.
/4/  Lipper General U.S. Government Funds Average is comprised of funds that invest
     at least 65% of their assets 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, but do not reflect sales charges or taxes.
/5/  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.

/6/  Reflects a fee waiver (4.45% without the waiver) as described in the Annual
     Fund Operating Expenses table under "Fees and expenses of the fund." Calculated
     by annualizing dividends paid by the fund over one month plus any special
     dividends paid during the month, and dividing this amount by the fund's average
     net asset value for the month.


                                       8

U.S. Government Securities Fund / Prospectus


<PAGE>

[begin pie chart]

Holdings by type of investment as of August 31, 2007

Mortgage-backed obligations                              52.7%
U.S. Treasury bonds & notes                              26.9%
Federal agency bonds & notes                              9.7%
Asset-backed obligations                                  5.3%
Short-term securities & other assets less liabilities     5.4%
[end pie chart]



 QUALITY BREAKDOWN AS OF AUGUST 31, 2007
                                                         PERCENT OF NET ASSETS

 U.S. government obligations*                                    31.8%
-------------------------------------------------------------------------------
 Federal agencies                                                45.5
-------------------------------------------------------------------------------
 Aaa/AAA                                                         17.3
-------------------------------------------------------------------------------
 Short-term securities and other assets less                      5.4
liabilities




* These securities are guaranteed by the full faith and credit of the U.S.
  government.

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.


                                       9

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

Management and organization

INVESTMENT ADVISER

Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the fund and other
funds, including 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." As described more fully in the fund's statement of
additional information, the management fee is based on the daily net assets of
the fund and the fund's monthly gross investment income. 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, 2007.

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 generally function
separately from each other with respect to investment research activities and
make investment and proxy voting decisions on a separate basis.


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.


                                       10

U.S. Government Securities Fund / Prospectus


<PAGE>

PORTFOLIO HOLDINGS

Portfolio holdings information for the fund is available on the American Funds
website at americanfunds.com. To reach this information, access the lower
portion of the fund's details 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.

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors. Counselors
decide how their respective segments will be invested. 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.


                                       11

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

The primary individual portfolio counselors for U.S. Government Securities Fund
are:


                                       PRIMARY TITLE WITH      PORTFOLIO
                         PORTFOLIO     INVESTMENT ADVISER      COUNSELOR'S
 PORTFOLIO COUNSELOR/    COUNSELOR     (OR AFFILIATE)          ROLE IN
 FUND TITLE              EXPERIENCE    AND INVESTMENT          MANAGEMENT
 (IF APPLICABLE)        IN THIS FUND   EXPERIENCE              OF THE FUND
--------------------------------------------------------------------------------------

 JOHN H. SMET             21 years     Senior Vice President   Serves as a
 President and Trustee                 - Fixed Income,         fixed-income portfolio
                                       Capital Research and    counselor
                                       Management Company

                                       Investment
                                       professional for 25
                                       years in total;
                                       24 years with Capital
                                       Research and
                                       Management Company or
                                       affiliate
--------------------------------------------------------------------------------------
 THOMAS H. HOGH           11 years     Senior Vice President   Serves as a
 Vice President                        - Fixed Income,         fixed-income portfolio
                                       Capital Research        counselor
                                       Company

                                       Investment
                                       professional for 21
                                       years in total;
                                       18 years with Capital
                                       Research and
                                       Management Company or
                                       affiliate
--------------------------------------------------------------------------------------
 MARK R. MACDONALD         1 year      Senior Vice President   Serves as a
                                       - Fixed Income, and     fixed-income portfolio
                                       Director, Capital       counselor
                                       Research and
                                       Management Company

                                       Investment
                                       professional for 22
                                       years in total;
                                       13 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 can be found 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 PLAN RECORDKEEPER FOR
MORE INFORMATION.


                                       12

U.S. Government Securities Fund / 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, 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 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 generally are available only to 401(k) plans, 457 plans,
employer-sponsored 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 shares
generally are available only to retirement plans with $1 million or more in plan
assets. In addition, Class R-5 shares are available for investment by American
Funds Target Date Retirement Series./(R)/ 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, individual 403(b) plans 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 funds purchased without a sales charge
generally will be subject to the appropriate sales charge.

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


                                       13

                                   U.S. Government Securities Fund / 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.

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 (including
redemptions that are part of an exchange transaction) having a value of $5,000
or more from the fund will be precluded from investing in the fund (including
investments that are part of an exchange transaction) for 30 calendar days after
the redemption transaction. 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.

The fund reserves the right to waive the purchase blocking policy 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 procedures that American Funds Service Company believes are
reasonably designed to enforce the frequent trading policies of the fund. You
should refer to disclosures provided


                                       14

U.S. Government Securities Fund / Prospectus


<PAGE>

by the intermediaries with which you have an account to determine the specific
trading restrictions that apply to you.

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 FUND'S AND AMERICAN FUNDS
DISTRIBUTORS' RIGHT 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.


SALES

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

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 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, reinvestment can be made 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 funds that are
reinvested in non-money market 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 and accepted by American Funds Service Company. 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. 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." This paragraph does not apply to certain
rollover investments as described under "Rollovers from retirement plans to
IRAs."


                                       15

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

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.


Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives and accepts your
request.

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.


                                       16

U.S. Government Securities Fund / Prospectus


<PAGE>

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. The "offering price," the price you pay to buy
shares, includes any applicable sales charge, which will be deducted directly
from your investment. Shares acquired through reinvestment of dividends or
capital gain distributions are not subject to an initial sales charge.



                               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.

CLASS A 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 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" below 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" below).


                                       17

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

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.
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." Plans investing in Class A shares with a sales charge may purchase
 additional Class A shares in accordance with the sales charge table above.


 Employer-sponsored retirement plans that invested in Class A shares without any
 sales charge on or before March 31, 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.

CLASS R SHARES

Class R shares are sold without any initial or contingent deferred sales charge.
The distributor will pay dealers annually an 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 on sales of Class R-5 shares. The fund may reimburse the distributor for
these payments through its plans of distribution (see "Plans of distribution"
below).


                                       18

U.S. Government Securities Fund / Prospectus


<PAGE>

Sales charge reductions

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 BELOW, YOU MAY OBTAIN MORE INFORMATION ABOUT
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 these purposes. 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 funds
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 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 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
 (excluding capital appreciation) less any withdrawals. Please see the statement
 of additional information for details. You should retain any records necessary
 to substantiate the historical amounts you have invested.


 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


                                       19

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

 American Funds non-money market funds 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" above for more
 information.


RIGHT OF REINVESTMENT

Please see the "Sales" section of "Purchase, exchange and sale of shares" above
for information on how to reinvest proceeds from a redemption, dividend payment
or capital gain distribution without a sales charge.

Rollovers from retirement plans to IRAs

Assets from retirement plans may be invested in Class A, B, C or F shares
through an IRA rollover. More information on Class B, 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.

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 the prospectus and
statement of additional information.


                                       20

U.S. Government Securities Fund / Prospectus


<PAGE>

Plans of distribution

The fund has plans of distribution or "12b-1 plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the fund's board of 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, 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." 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.


                                       21

                                   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 75 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 2006, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the 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 75
firms to facilitate educating financial advisers and shareholders about the
American Funds.


                                       22

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 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 DIVIDENDS AND DISTRIBUTIONS

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

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.


                                       23

                                   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
footnotes to the Annual Fund Operating Expenses table under "Fees and expenses
of the fund" in this prospectus and the fund's 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 (LOSS) 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 year      income       unrealized)     operations     income)        year         return/2/,/3/
---------------------------------------------------------------------------------------------------------------------------

CLASS A:
Year ended 8/31/2007   $13.32        $.59          $ .03            $.61         $(.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
Year ended 8/31/2004    13.59         .43            .17             .60          (.45)        13.74           4.49
Year ended 8/31/2003    13.73         .42           (.10)            .32          (.46)        13.59           2.29
---------------------------------------------------------------------------------------------------------------------------
CLASS R-1:
Year ended 8/31/2007    13.32         .48            .03             .51          (.48)        13.35           3.89
Year ended 8/31/2006    13.72         .42           (.39)            .03          (.43)        13.32            .30
Year ended 8/31/2005    13.74         .33             --/4/          .33          (.35)        13.72           2.46
Year ended 8/31/2004    13.59         .32            .17             .49          (.34)        13.74           3.66
Year ended 8/31/2003    13.73         .31           (.10)            .21          (.35)        13.59           1.49
---------------------------------------------------------------------------------------------------------------------------
CLASS R-2:
Year ended 8/31/2007    13.32         .49            .03             .52          (.49)        13.35           3.98
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           2.50
Year ended 8/31/2004    13.59         .33            .17             .50          (.35)        13.74           3.70
Year ended 8/31/2003    13.73         .31           (.10)            .21          (.35)        13.59           1.53
---------------------------------------------------------------------------------------------------------------------------
CLASS R-3:
Year ended 8/31/2007   $13.32        $.54          $ .03            $.57         $(.54)       $13.35           4.39%
Year ended 8/31/2006    13.72         .48           (.39)            .09          (.49)        13.32            .69
Year ended 8/31/2005    13.74         .39             --/4/          .39          (.41)        13.72           2.88
Year ended 8/31/2004    13.59         .38            .17             .55          (.40)        13.74           4.09
Year ended 8/31/2003    13.73         .37           (.10)            .27          (.41)        13.59           1.93
---------------------------------------------------------------------------------------------------------------------------
CLASS R-4:
Year ended 8/31/2007    13.32         .59            .03             .62          (.59)        13.35           4.79
Year ended 8/31/2006    13.72         .53           (.39)            .14          (.54)        13.32           1.06
Year ended 8/31/2005    13.74         .44             --/4/          .44          (.46)        13.72           3.25
Year ended 8/31/2004    13.59         .43            .17             .60          (.45)        13.74           4.45
Year ended 8/31/2003    13.73         .42           (.10)            .32          (.46)        13.59           2.30
---------------------------------------------------------------------------------------------------------------------------
CLASS R-5:
Year ended 8/31/2007    13.32         .63            .03             .66          (.63)        13.35           5.07
Year ended 8/31/2006    13.72         .56           (.39)            .17          (.57)        13.32           1.36
Year ended 8/31/2005    13.74         .48             --/4/          .48          (.50)        13.72           3.56
Year ended 8/31/2004    13.59         .47            .17             .64          (.49)        13.74           4.78
Year ended 8/31/2003    13.73         .46           (.10)            .36          (.50)        13.59           2.63





                                       24

U.S. Government Securities Fund / Prospectus


<PAGE>


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

CLASS A:
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
Year ended 8/31/2004      1,900          .71          .71           3.14
Year ended 8/31/2003      2,374          .76          .76           3.01
------------------------------------------------------------------------------
CLASS R-1:
Year ended 8/31/2007          5         1.65         1.57           3.57
Year ended 8/31/2006          4         1.63         1.49           3.17
Year ended 8/31/2005          3         1.66         1.50           2.43
Year ended 8/31/2004          2         1.74         1.52           2.26
Year ended 8/31/2003          1         2.02         1.52           1.86
------------------------------------------------------------------------------
CLASS R-2:
Year ended 8/31/2007        103         1.73         1.48           3.66
Year ended 8/31/2006         94         1.93         1.47           3.18
Year ended 8/31/2005         85         1.94         1.47           2.46
Year ended 8/31/2004         68         2.02         1.48           2.32
Year ended 8/31/2003         43         2.05         1.47           1.81
------------------------------------------------------------------------------
CLASS R-3:
Year ended 8/31/2007     $   88         1.11%        1.08%          4.05%
Year ended 8/31/2006        107         1.20         1.09           3.56
Year ended 8/31/2005         91         1.20         1.08           2.84
Year ended 8/31/2004         73         1.23         1.10           2.71
Year ended 8/31/2003         50         1.16         1.08           1.80
------------------------------------------------------------------------------
CLASS R-4:
Year ended 8/31/2007         75          .72          .69           4.50
Year ended 8/31/2006         21          .75          .72           3.96
Year ended 8/31/2005         13          .74          .72           3.21
Year ended 8/31/2004          8          .74          .74           3.05
Year ended 8/31/2003          5          .75          .73           2.58
------------------------------------------------------------------------------
CLASS R-5:
Year ended 8/31/2007         68          .45          .41           4.79
Year ended 8/31/2006         10          .45          .42           4.24
Year ended 8/31/2005          8          .43          .41           3.50
Year ended 8/31/2004          7          .42          .42           3.39
Year ended 8/31/2003          9          .43          .43           3.31




                                           YEAR ENDED AUGUST 31
                           2007        2006        2005        2004         2003
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
 RATE FOR ALL CLASSES      110%        146%        104%         72%          82%
 OF SHARES




/1/  Based on average shares outstanding.

/2/  Total returns exclude all 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.


                                       25

                                   U.S. Government Securities Fund / Prospectus

<PAGE>

NOTES


                                       26

U.S. Government Securities Fund / Prospectus


<PAGE>

NOTES


                                       27

                                   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 ADVISER MARKETING                 American Funds Distributors
                                       800/421-9900
 FOR 24-HOUR INFORMATION               americanfunds.com
                                       For Class R share information, visit
                                       AmericanFundsRetirement.com


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


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.

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).


STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information on all aspects
of 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 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, DC
(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,
DC 20549-0102. The current SAI and shareholder reports are also available, free
of charge, on americanfunds.com.


HOUSEHOLD MAILINGS Each year you are automatically sent an updated 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.

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 on its website at sipc.org or by calling 202/371-8300.



[logo - recycled bug]
Printed on recycled paper





Printed on recycled paper
RPGEPR-922-1107P Litho in USA CGD/B/8034    Investment Company File No. 811-04318
---------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds     Capital Research and Management     Capital International
         Capital Guardian      Capital Bank and Trust

html

The American Funds Income Series

(U.S. Government Securities Fund)

Part C

Other Information

Item 23. Exhibits for Registration Statement (1940 Act No. 811-04318 and 1933 Act No. 002-98199)

(a)

Declaration of Trust and Amendment to and Restatement of Declaration of Trust - previously filed (see P/E Amendment No. 19 filed 10/29/97; Establishment and Designation of Additional Classes of Shares of Beneficial Interest Without Par Value - previously filed (see P/E Amendment No. 23 filed 3/10/00; No. 25 filed 3/8/01; and No. 27 filed 2/13/02)

(b)	By-laws– By-laws as amended 9/20/07

(c)	Instruments Defining Rights of Security Holders– Form of share certificate – previously filed (see P/E Amendment No. 25 filed 3/18/01)

(d)	Investment Advisory Contracts– Amended Investment Advisory and Service Agreement dated 6/1/04 - previously filed (see P/E Amendment No. 31 filed 11/1/04)

(e-1)

Underwriting Contracts– Form of Amended and Restated Principal Underwriting Agreement - previously filed (see P/E Amendment No. 27 filed 2/13/02) Form of Selling Group Agreements – previously filed (see P/E Amendment No. 28 filed 5/13/02) and Form of Institutional Selling Group Agreement - previously filed (see P/E Amendment No. 31 filed 11/1/04); and Form of Amendment to Selling Group Agreement – effective 11/1/06 – previously filed (see P/E Amendment No. 34 filed 10/31/06)

(e-2)

Form of Amendment to Selling Group Agreement effective 2/1/07 and Form of Amendment to Institutional Selling Group Agreement effective 2/1/07

(f)	Bonus or Profit Sharing Contracts– Deferred Compensation Plan as amended 1/1/05

(g)	Custodian Agreements– Form of Global Custody Agreement dated 12/21/06

(h-1)

Other Material Contracts – Form of Amended and Restated Administrative Services Agreement dated 10/1/05 – previously filed (see P/E Amendment No. 32 filed 10/31/05); Amended Shareholder Services Agreement as of 4/1/03 - previously filed (see P/E Amendment No. 31 filed 11/1/04) and form of Indemnification Agreement dated 7/1/04 - previously filed (see P/E Amendment No. 31 filed 11/1/04)

(h-2) Form of Amendment to Shareholder Services Agreement dated 11/1/06

(i)	Legal Opinion– Legal Opinion - previously filed (see P/E Amendment filed in 1985; P/E Amendment No. 23 filed 3/10/00; No. 25 filed 3/8/01; No. 27 filed 2/13/02; and No. 28 filed 5/13/02)

(j)	Other Opinions – Consent of Independent Registered Public Accounting Firm

(k) Omitted Financial Statements - None

(l)	Initial capital agreements - previously filed (see P/E Amendment No.19 filed 10/29/97)

(m)	Rule 12b-1 Plan– Forms of Plans of Distribution - Class A, B, C, F, 529-A, 529-B, 529-C, 529-E, 529-F and R-1, R-2, R-3 and R-4

(n)	Rule 18f-3 Plan– Form of Amended and Restated Multiple Class Plan - previously filed (see P/E Amendment No. 27 filed 2/13/02)

(o) Reserved

(p-1)

Code of Ethics– Code of Ethics for The Capital Group Companies dated September 2007

(p-2)

Code of Ethics for Registrant dated December 2005 – previously filed (see P/E Amendment No. 34 filed 10/31/06)

Item 24. Persons Controlled by or Under Common Control with the Fund

None

Item 25. Indemnification

The Registrant is a joint-insured under Investment Advisor/Mutual Fund Errors and Omissions Policies, which insure its officers and trustees against certain liabilities. However, in no event will Registrant maintain insurance to indemnify any such person for any act for which Registrant itself is not permitted to indemnify the individual.

Article V of the Registrant's Declaration of Trust and Article VI of the Registrant’s By-Laws as well as the indemnification agreements that the Registrant has entered into with each of its trustees who is not an “interested person” of the Registrant (as defined under the Investment Company Act of 1940, as amended), provide in effect that the Registrant will indemnify its officers and trustees against any liability or expenses actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the Registrant, to the fullest extent permitted by applicable law, subject to certain conditions. In accordance with Section 17(h) and 17(i) of the Investment Company Act of 1940, as amended, and their respective terms, these provisions do not protect any person against any liability to the Registrant or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Registrant will comply with the indemnification requirements contained in the Investment Company Act of 1940, as amended, and Release Nos. 7221 (June 9, 1972) and 11330 (September 4, 1980).

Item 26. Business and Other Connections of the Investment Adviser

None

Item 27. Principal Underwriters

(a) American Funds Distributors, Inc. is the Principal Underwriter of shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., American Funds Target Date Retirement Series, Inc., The American Funds Tax-Exempt Series I, The American Funds Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc., Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World Growth and Income Fund, Inc., The Cash Management Trust of America, Endowments, EuroPacific Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc., Intermediate Bond Fund of America, The Investment Company of America, Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc., Short-Term Bond Fund of America, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Money Fund of America, The U.S. Treasury Money Fund of America and Washington Mutual Investors Fund, Inc.

(b)

	(1) Name and Principal Business Address	(2) Positions and Offices with Underwriter	(3) Positions and Offices with Registrant
LAO	E. Grant Abramson	Vice President	None
LAO	David L. Abzug	Vice President	None
LAO	William C. Anderson	Regional 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	Steven L. Barnes	Senior 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.	Vice President	None
LAO	John A. Blanchard	Senior Vice President	None
LAO	Randall L. Blanchetti	Regional Vice President	None
LAO	Bockstie, Jr., Gerard M.	Regional Vice President	None
LAO	Ian B. Bodell	Senior Vice President	None
LAO	Jonathan W. Botts	Regional Vice President	None
	Bill Brady 646 Somerset Drive Indianapolis, IN 46260	Regional 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
IRV	J. Peter Burns	Vice President	None
LAO	Steven Calabria	Regional Vice President	None
SNO	Kathleen D. Campbell	Vice President	None
LAO	Matthew C. Carlisle	Vice President	None
LAO	Damian F. Carroll	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	None
LAO	David D. Charlton	Director, Senior Vice President	None
LAO	Thomas M. Charon	Regional Vice President	None
LAO	Wellington Choi	Vice President	None
LAO	Paul A. Cieslik	Vice President	None
LAO	Kevin G. Clifford	Director, President and Co-Chief Executive Officer	None
HRO	Cheri Coleman	Vice President	None
LAO	Ruth M. Collier	Director, Senior Vice President	None
SNO	David Coolbaugh	Vice President	None
LAO	Carlo O. Cordasco	Regional Vice President	None
IRV	Josie Cortez	Assistant Vice President	None
LAO	Charles H. Cote	Regional Vice President	None
LAO	Thomas E. Cournoyer	Vice President	None
LAO	Michael D. Cravotta	Assistant Vice President	None
LAO	Joseph G. Cronin	Vice President	None
LAO	William F. Daugherty	Vice President	None
LAO	Peter J. Deavan	Regional Vice President	None
LAO	Guy E. Decker	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	Lori A. Deuberry	Regional Vice President	None
LAO	Dianne M. Dexter	Assistant Vice President	None
LAO	Thomas J. Dickson	Vice President	None
LAO	Michael A. DiLella	Senior 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
LAO	Michael J. Dullaghan	Vice President	None
IND	Lloyd G. Edwards	Senior Vice President	None
LAO	Timothy L. Ellis	Senior Vice President	None
LAO	Kristopher A. Feldmeyer	Regional Vice President	None
LAO	Lorna Fitzgerald	Vice President	None
LAO	William F. Flannery	Regional Vice President	None
LAO	John R. Fodor	Senior Vice President	None
LAO	Charles L. Freadhoff	Vice President	None
LAO	Daniel B. Frick	Vice President	None
LAO	Linda S. Gardner	Vice President	None
LAO	Keith R. George	Regional Vice President	None
IRV	Lori A. Giacomini	Assistant Vice President	None
LAO	J. Christopher Gies	Senior Vice President	None
LAO	David M. Givner	Secretary	None
IRV	Evelyn K. Glassford	Vice President	None
LAO	Jack E. Goldin	Regional Vice President	None
LAO	Earl C. Gottschalk	Vice President	None
LAO	Jeffrey J. Greiner	Senior Vice President	None
LAO	Eric M. Grey	Regional Vice President	None
IRV	Steven Guida	Senior Vice President	None
IRV	Mariellen Hamann	Vice President	None
LAO	Derek S. Hansen	Vice President	None
LAO	David E. Harper	Senior Vice President	None
LAO	Calvin L. Harrelson, III	Vice President	None
LAO	Robert J. Hartig, Jr.	Vice President	None
LAO	Linda M. Hines	Vice President	None
LAO	Steven J. Hipsley	Regional Vice President	None
LAO	Russell K. Holliday	Vice President	None
LAO	Heidi Horwitz	Regional Vice President	None
LAO	Kevin B. Hughes	Vice President	None
LAO	Ronald R. Hulsey	Senior Vice President	None
LAO	Marc Ialeggio	Vice President	None
LAO	Robert S. Irish	Senior Vice President	None
IND	David K. Jacocks	Assistant Vice President	None
LAO	Linda Johnson	Assistant 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	Kidwell, Ryan C.	Regional Vice President	None
LAO	Andrew J. Kilbride	Vice President	None
NYO	Dorothy Klock	Vice President	None
LAO	Dianne L. Koske	Vice President	None
IRV	Elizabeth K. Koster	Vice President	None
LAO	Christopher F. Lanzafame	Regional Vice President	None
LAO	Patricia D. Lathrop	Regional Vice President	None
LAO	R. Andrew LeBlanc	Vice President	None
LAO	T. Blake Liberty	Vice President	None
LAO	Mark J. Lien	Vice President	None
LAO	Lorin E. Liesy	Vice President	None
IND	Kelle Lindenberg	Assistant Vice President	None
LAO	Louis K. Linquata	Vice President	None
LAO	Brendan T. Mahoney	Vice President	None
LAO	Nathan G. Mains	Regional Vice President	None
	Stephen A. Malbasa 13405 Lake Shore Blvd. Cleveland, OH 44110	Director, Senior Vice President	None
LAO	Paul R. Mayeda	Assistant Vice President	None
LAO	Eleanor P. Maynard	Vice President	None
LAO	Christopher McCarthy	Vice President	None
LAO	James R. McCrary	Vice President	None
LAO	Will McKenna	Vice President	None
SNO	John V. McLaughlin	Senior Vice President	None
LAO	Terry W. McNabb	Senior Vice President	None
LAO	Katharine McRoskey	Vice President	None
LAO	Scott M. Meade	Vice President	None
LAO	Mills, William T.	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	Regional Vice President	None
LAO	Munson, Brian D.	Regional Vice President	None
LAO	Jack Nitowitz	Assistant Vice President	None
LAO	William E. Noe	Senior Vice President	None
LAO	Heidi J. Novaes	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	Michael W. Pak	Regional Vice President	None
LAO	W. Burke Patterson, Jr.	Regional Vice President	None
LAO	Gary A. Peace	Vice President	None
LAO	Samuel W. Perry	Vice President	None
LAO	Raleigh G. Peters	Regional Vice President	None
LAO	David K. Petzke	Senior Vice President	None
IRV	John H. Phelan, Jr.	Director	None
LAO	Fredric Phillips	Senior Vice President	None
LAO	John Pinto	Regional Vice President	None
LAO	Carl S. Platou	Senior Vice President	None
LAO	Charles R. Porcher	Regional Vice President	None
SNO	Richard P. Prior	Vice President	None
LAO	Mike Quinn	Regional Vice President	None
LAO	John W. Rankin	Regional Vice President	None
LAO	Jennifer D. Rasner	Regional Vice President	None
LAO	James P. Rayburn	Regional Vice President	None
LAO	Rene M. Reincke	Vice President	None
LAO	Mark S. Reischmann	Regional 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	Director	None
LAO	Romolo D. Rottura	Vice President	None
LAO	Douglas F. Rowe	Senior 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.	Regional Vice President	None
LAO	Richard R. Samson	Senior Vice President	None
HRO	Diane Sawyer	Senior Vice President	None
LAO	Joseph D. Scarpitti	Senior 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
SNO	Sherrie L. Senft	Vice President	None
LAO	James J. Sewell III	Regional Vice President	None
LAO	Arthur M. Sgroi	Vice President	None
LAO	R. Michael Shanahan	Director	None
LAO	Michael J. Sheldon	Vice President	None
LAO	Frederic J. Shipp	Regional Vice President	None
LAO	Daniel S. Shore	Vice President	None
LAO	Brad Short	Vice President	None
LAO	David W. Short	Chairman of the Board and Co-Chief Executive Officer	None
LAO	Nathan W. Simmons	Regional Vice President	None
LAO	William P. Simon, Jr.	Director, Senior Vice President	None
LAO	Connie F. Sjursen	Vice President	None
LAO	Jerry L. Slater	Senior Vice President	None
LAO-W	John H. Smet	Director	President and Trustee
LAO	Rodney G. Smith	Senior Vice President	None
LAO	J. Eric Snively	Regional Vice President	None
LAO	Anthony L. Soave	Vice President	None
LAO	Therese L. Soullier	Vice President	None
LAO	Nicholas D. Spadaccini	Senior Vice President	None
LAO	Kristen J. Spazafumo	Vice President	None
LAO	Mark D. Steburg	Regional Vice President	None
LAO	Michael P. Stern	Regional Vice President	None
LAO	Brad Stillwagon	Vice President	None
LAO	Thomas A. Stout	Vice President	None
LAO	Craig R. Strauser	Senior Vice President	None
LAO	Libby J. Syth	Vice President	None
LAO	Drew W. Taylor	Vice President	None
LAO	Larry I. Thatt	Assistant Vice President	None
LAO	Gary J. Thoma	Vice President	None
LAO	Cynthia M. Thompson	Vice President	None
LAO	David Tippets	Regional Vice President	None
LAO	James P. Toomey	Vice President	None
IND	Christopher E. Trede	Vice President	None
LAO	George F. Truesdail	Senior 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	Vice President	None
LAO	J. Kelly Webb	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	Brian E. Whalen	Regional Vice President	None
LAO	William C. Whittington	Regional Vice President	None
LAO	N. Dexter Williams, Jr.	Senior Vice President	None
LAO	Alan J. Wilson	Director	None
LAO	Andrew L. Wilson	Vice President	None
LAO	Steven C. Wilson	Regional Vice President	None
LAO	Timothy J. Wilson	Senior Vice President	None
LAO	Kurt A. Wuestenberg	Vice President	None
	William R. Yost 9463 Olympia Drive Eden Prairie, MN 55347	Senior Vice President	None
LAO	Jason P. Young	Vice President	None
LAO	Jonathan A. Young	Regional Vice President	None
LAO	Scott D. Zambon	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, 36^th Floor, New York, NY10111
SFO	Business Address, One Market, Steuart Tower, Suite 1800, San Francisco, CA 94105-1016
SNO	Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251

Item 28. Location of Accounts and Records

Accounts, books and other records required by Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended, are maintained and held in the offices of the Registrant’s investment adviser, Capital Research and Management Company, 333 South Hope Street, Los Angeles, California 90071; 6455 Irvine Center Drive, Irvine, CA 92618; and/or 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering shareholder accounts are maintained and kept by its transfer agent, American Funds Service Company, 6455 Irvine Center Drive, Irvine, CA 92618, 8332 Woodfield Crossing Boulevard, Indianapolis, Indiana 46240, 10001 North 92^nd Street, Suite 100, Scottsdale, Arizona 85258; 3500 Wiseman Boulevard, San Antonio, Texas 78251 and 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering portfolio transactions are maintained and kept by its custodian, JPMorgan Chase Bank, 270 Park Avenue, New York, New York 10017-2070.

Item 29. Management Services

None

Item 30. Undertakings

n/a

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under rule 485(b) under the Securities Act of 1933 and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Los Angeles, and State of California, on the 30^th day of October, 2007.

THE AMERICAN FUNDS INSURANCE SERIES

(U.S. GOVERNMENT SECURITIES FUND)

By: /s/ Paul G. Haaga, Jr.

(Paul G. Haaga, Jr., Vice Chairman of the Board)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below on October 30, 2007, by the following persons in the capacities indicated.

	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)

Counsel represents that this amendment does not contain disclosures that would make the amendment ineligible for effectiveness under the provisions of rule 485(b).

/s/ Timothy W. McHale

(Timothy W. McHale)

POWER OF ATTORNEY

I, Richard G.Capen, Jr., the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Sharon G. Moseley

David A. Pritchett

Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Rancho Santa Fe, CA, this 3^rd day of July, 2007.

(City, State)

/s/ Richard G. Capen, Jr.

Richard G. Capen, Jr., Board member

POWER OF ATTORNEY

I, H. FrederickChristie, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-	American Funds Target Date Retirement Series, Inc. (File No. 333-138648, File No. 811-21981)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Karl C. Grauman

Sheryl F. Johnson

Sharon G. Moseley

David A. Pritchett

Jeffrey P. Regal

Ari M. Vinocor

EXECUTED at Palos Verdes, CA, this 1^st day of July, 2007.

(City, State)

/s/ H. Frederick Christie

H. Frederick Christie, Board member

POWER OF ATTORNEY

I, James G.Ellis, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Sharon G. Moseley

Ari M. Vinocor

EXECUTED at Pasadena, CA, this 14^th day of July, 2007.

(City, State)

/s/ James G. Ellis

James G. Ellis, Board member

POWER OF ATTORNEY

I, MartinFenton, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-	American Funds Target Date Retirement Series, Inc. (File No. 333-138648, File No. 811-21981)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Karl C. Grauman

Sheryl F. Johnson

Sharon G. Moseley

David A. Pritchett

Carmelo Spinella

Ari M. Vinocor

EXECUTED at Bridgehampton, NY, this 7^th day of July, 2007.

(City, State)

/s/ Martin Fenton

Martin Fenton, Board member

POWER OF ATTORNEY

I, Leonard R.Fuller, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-	American Funds Target Date Retirement Series, Inc. (File No. 333-138648, File No. 811-21981)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Sheryl F. Johnson

Sharon G. Moseley

David A. Pritchett

Carmelo Spinella

Ari M. Vinocor

EXECUTED at Rolling Hills, CA, this 3^rd day of July, 2007.

(City, State)

/s/ Leonard R. Fuller

Leonard R. Fuller, Board member

POWER OF ATTORNEY

I, R. ClarkHooper, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	The New Economy Fund (File No. 002-83848, File No. 811-03735)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Sharon G. Moseley

David A. Pritchett

Ari M. Vinocor

EXECUTED at Moultonborough, NH, this 15^th day of July, 2007.

(City, State)

/s/ R. Clark Hooper

R. Clark Hooper, Board member

POWER OF ATTORNEY

I, Richard G.Newman, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	The Investment Company of America (File No. 002-10811, File No. 811-00116)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Sharon G. Moseley

Carmelo Spinella

Ari M. Vinocor

EXECUTED at Los Angeles, CA, this 16^th day of July, 2007.

(City, State)

/s/ Richard G. Newman

Richard G. Newman, Board member

POWER OF ATTORNEY

I, Frank M.Sanchez, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Sharon G. Moseley

Ari M. Vinocor

EXECUTED at Los Angeles, CA, this 5^th day of July, 2007.

(City, State)

/s/ Frank M. Sanchez

Frank M. Sanchez, Board member

POWER OF ATTORNEY

I, SteadmanUpham, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-	The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-	The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-	American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-	American High-Income Trust (File No. 033-17917, File No. 811-05364)

-	The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-	Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-	Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-	Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-	The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-	Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-	Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-	Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-	The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-	The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti

Chad L. Norton

Patrick F. Quan

Kimberly S. Verdick

Steven I. Koszalka

Tanya Schneider

Courtney R. Taylor

Sheryl F. Johnson

Sharon G. Moseley

Jeffrey P. Regal

Ari M. Vinocor

EXECUTED at Tulsa, OK, this 4^th day of September, 2007.

(City, State)

/s/ Steadman Upham

Steadman Upham, Board member