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Previous: GUARDIAN SEPARATE ACCOUNT B, 497J, 1996-05-03 |
Next: NEW ENGLAND FUNDS TRUST I, 497, 1996-05-03 |
U.S. GOVERNMENT SECURITIES FUND
SEMI-ANNUAL REPORT
for the six months ended February 29, 1996
[The American Funds Group(R)]
U.S. GOVERNMENT SECURITIES FUND(SM) seeks high current income, consistent with
prudent investment risk and preservation of capital, by investing primarily in
obligations backed by the full faith and credit of the United States
government.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are the total returns and average annual compound
returns with all distributions reinvested for periods ended March 31, 1996 (the
most recent calendar quarter) assuming payment of the 4.75% maximum sales
charge at the beginning of the stated periods:
10 YEARS 5 YEARS 12 MONTHS
+99.76% +36.67% +3.60%
(+7.16% a year) (+6.45% a year)
Sales charges are lower for accounts of $25,000 or more. The fund's 30-day
yield as of March 31, 1996, calculated in accordance with the Securities and
Exchange Commission formula, was 5.37%. The fund's distribution rate as of that
date was 6.95%. The SEC yield reflects income the fund expects to earn based on
its current portfolio of securities, while the distribution rate is based
solely on the fund's past dividends. Accordingly, the fund's SEC yield and
distribution rate may differ.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
FELLOW SHAREHOLDERS:
U.S. Government Securities Fund continued to make solid progress during the
first half of fiscal 1996.
The value of your investment rose 3.9% in the six months ended February 29
if, like most shareholders, you reinvested your monthly dividends totaling 48
cents a share. Over the same period, the unmanaged Lehman Brothers
Government/Mortgage-Backed Securities Index rose 4.1% with income reinvested.
If you took dividends in cash, your income return was 3.6% (7.2% on an
annualized basis), while the share price gained 0.3%.
These results bring the fund's total return over the past 12 months to
10.2% and its lifetime total return (since October 17, 1985) to 129.7%, an
average compound return of 8.3% a year.
A SIX-MONTH SEESAW
Fixed-income markets continued to rally through the end of 1995. Moderate
economic growth, low inflation and cautious consumer spending convinced the
Federal Reserve Board to maintain the course it began last July, when it
lowered interest rates after seven successive increases beginning in 1994.
Following cuts in the federal funds rate in December and January, economic
winds shifted amid evidence of a pickup in the pace of economic activity,
speculation about whether the Fed would continue to cut rates and uncertainty
regarding a federal budget resolution. Bond yields and home mortgage rates have
risen somewhat, and hopes of additional rate cuts have been dampened by reports
that job creation may be growing faster than anticipated.
Although yields have generally declined in the last year, this sudden rise
in interest rates may offer an attractive opportunity to move the fund's
relatively short maturities into higher yielding issues. Moreover, a slowdown
in mortgage refinancing should make existing mortgage-backed securities more
attractive as well.
As you can see by the chart on the right, most of the fund's assets were
invested in U.S. Treasury issues at the close of the period. Nearly a third was
invested in Government National Mortgage Association (GNMA) and other
mortgage-backed securities. The fund typically buys "seasoned" mortgages -
those five years and older - which tend to carry a lower risk of prepayment and
therefore are more resistant to short-term swings in interest rates.
We believe the current low-inflation environment could continue for some
time. However, these last few months are a reminder that price fluctuations are
inevitable in the securities markets. With the economy at a critical juncture
and the nation heading toward a presidential election, we will continue to
monitor developments that could affect the government securities markets.
We look forward to reporting to you again in six months.
Cordially,
Paul G. Haaga, Jr. Abner D. Goldstine
Chairman of the Board President
April 12, 1996
RESULTS AT A GLANCE as of February 29, 1996
Total Returns (with all distributions reinvested)
6 months +3.9%
12 months +10.2
Lifetime +8.3
(average annual compound return since October 17, 1985)
Effective with the April payment, U.S. Government Securities Fund's monthly
dividend was lowered from eight cents a share (excluding special dividends) to
seven cents. The eight-cent-per-share rate had been in effect for the previous
eight months.
THE FUND'S INVESTMENT PORTFOLIO
FEBRUARY 29, 1996
U.S. Treasuries 59%
GNMAs and Other Mortgage-Backed Securities 31%
Other Federal Obligations 6%
Development Authorities 2%
Cash Equivalents 2%
The AMERICAN FUNDS INCOME SERIES
U.S. GOVERNMENT SECURITIES FUND
INVESTMENT PORTFOLIO - UNAUDITED
February 29, 1996
<TABLE>
<CAPTION>
Principal Market Percent
Amount Value of Net
(000) (000) Assets
<S> <C> <C> <C>
FEDERAL AGENCY OBLIGATIONS -
MORTGAGE PASS-THROUGHS /1/ - 26.67%
Federal Home Loan Mortgage Corp.:
8.25% 2007 $866 $896 4.30%
8.50% 2009-2021 20,623 21,534
8.75% 2008 799 840
9.00% 2010-2021 8,474 8,950
10.50% 2006-2016 1,171 1,276
10.75% 2009-2010 418 458
11.00% 2011-2016 864 955
11.50% 2011-2015 556 622
11.75% 2011-2014 669 746
12.00% 2000-2016 6,654 7,466
12.25% 2011-2015 652 734
12.50% 2009-2019 8,151 9,386
13.00% 2010-2014 1,202 1,400
13.50% 2010-2015 359 423
13.75% 2014 47 55
14.00% 2011-2014 199 235
14.50% 2010-2011 37 44
14.75% 2010 74 87
15.00% 2011 69 81
15.50% 2011 86 102
16.00% 2012 57 67
16.25% 2011 120 143
Federal National Mortgage Assn.:
7.00% 2009 2,009 2,029 2.84
8.00% 2005-2023 5,792 5,974
8.50% 2007-2023 13,046 13,718
9.00% 2009-2025 4,731 5,023
9.50% 2011 885 960
10.00% 2021 778 862
11.00% 1999-2015 2,320 2,598
12.00% 2000-2019 2,447 2,780
12.25% 2013-2014 311 355
12.50% 2001-2015 1,466 1,695
12.75% 2012 86 100
13.25% 2011-2014 1,017 1,190
14.00% 2013 111 133
14.50% 2014 13 16
15.00% 2013 18 21
15.50% 2012 45 54
16.00% 2012 28 34
Government National Mortgage Assn.:
5.50% 2024-2025 /2/ 37,866 38,358 19.53%
6.00% 2024 /2/ 2,236 2,283
6.50% 2023-2024 /2/ 15,664 15,307
7.00% 2008-2025 37,938 37,716
7.50% 2009-2025 34,508 34,949
8.00% 2022-2023 10,174 10,530
8.50% 2020-2025 43,661 45,635
9.00% 2011-2022 17,523 18,778
9.50% 2009-2020 11,063 12,070
9.75% 1999-2011 2,985 3,138
10.00% 2016-2019 3,233 3,576
10.25% 2012 338 351
10.50% 2015-2019 3,813 4,226
11.00% 2009-2020 7,147 8,063
11.25% 2001-2016 3,921 4,117
11.50% 2000-2014 1,708 1,939
11.75% 2000-2015 446 473
12.00% 1999-2019 4,005 4,601
12.25% 2013-2015 574 663
12.50% 2010-2015 2,746 3,222
12.75% 2013-2015 706 821
13.00% 2011-2015 2,362 2,792
13.25% 2013-2015 399 465
13.50% 2010-2015 1,372 1,645
14.00% 2011-2014 301 365
14.50% 2012-2014 409 500
15.00% 2011-2013 684 836
16.00% 2011-2012 44 53
------ ------
351,514 26.67
------ ------
FEDERAL AGENCY OBLIGATIONS - OTHER - 5.01%
FNSM Callable Principal STRIPS:
0%/8.25% 2022 /3/ 2,000 1,645 .42
0%/8.62% 2022 /3/ 4,500 3,901
Federal Home Loan Bank Notes 6.41% 2003 5,000 4,906 .37
Federal Home Loan Mortgage Notes:
6.19% 2004 13,915 13,461 4.11
6.27% 2004 7,000 6,821
6.555% 2006 5,000 4,899
6.59% 2003 5,000 4,947
6.60% 2003 4,000 3,962
6.945% 2005 10,000 9,991
7.01% 2005 10,000 10,019
Federal National Mortgage Assn. Notes 6.40%
2004 1,500 1,467 .11
------ --------------------------
66,019 5.01
------ ------
U. S. GUARANTEED OBLIGATIONS - OTHER - 1.02%
Big Rivers Electrical Corp. 10.70% 2017 12,000 13,418 1.02
------ ------
COLLATERALIZED MORTGAGE OBLIGATIONS/1/ - 4.32%
Federal Home Loan Mortgage Corp.:
Series 1716, Class A, 6.50% 2009 10,586 10,084 1.23
Series 76, Class F, 9.125% 2020 3,063 3,154
Series 83-A, Class 3, 11.875% 2013 266 288
Series 83-B, Class 3, 12.50% 2013 2,377 2,624
Federal National Mortgage Assn.:
Trust 35, Class 2, 12.00% 2018 756 851 3.09
Trust 90-93, Class G, 5.50% 2020 3,600 3,383
Trust 91-50, Class H, 7.75% 2006 4,000 4,080
Trust 91-65, Class X, 6.50% 2019 26,888 26,005
Trust 91-146, Class Z, 8.00% 2006 6,357 6,456
------ ------
56,925 4.32
------ ------
DEVELOPMENT AUTHORITIES - 1.92%
International Bank for Reconstruction and
Development:
14.90% May 1997 5,000 5,550 .43
12.25% December 2008 2,000 2,944 .22
8.875% June 2009 14,000 16,778 1.27
------ ------
25,272 1.92
------ ------
U. S. TREASURY OBLIGATIONS - 58.74%
9.375% April 1996 50,000 50,250 3.81
8.00% January 1997 53,000 54,209 4.11
7.875% April 1998 8,000 8,382 .64
9.00% May 1998 10,000 10,722 .82
7.00% April 1999 19,000 19,742 1.50
9.125% May 1999 6,500 7,158 .54
8.50% November 2000 17,000 18,905 1.43
8.00% May 2001 5,500 6,043 .46
13.125% May 2001 39,000 51,821 3.93
13.375% August 2001 22,500 30,516 2.32
15.75% November 2001 5,500 8,162 .62
14.25% February 2002 39,000 55,429 4.21
11.625% November 2002 38,000 49,792 3.78
5.875% February 2004 2,750 2,716 .21
7.25% May 2004 21,000 22,529 1.71
11.625% November 2004 11,500 15,732 1.19
7.50% February 2005 45,000 49,113 3.73
10.75% August 2005 10,000 13,239 1.00
10.375% November 2009 22,500 28,698 2.18
12.75% November 2010 10,000 14,667 1.11
13.875% May 2011 8,000 12,535 .95
10.375% November 2012 33,000 43,642 3.31
12.00% August 2013 12,000 17,683 1.34
12.50% August 2014 12,000 18,478 1.40
11.25% February 2015 3,500 5,282 .40
0% May 2015 40,000 10,972 .83
7.25% May 2016 10,000 10,708 .81
8.875% August 2017 98,750 124,116 9.42
8.125% August 2019 5,000 5,873 .45
8.125% May 2021 6,000 7,076 .53
------ ------
774,190 58.74
------ ------
TOTAL BONDS AND NOTES (COST:$1,274,696,000) 1,287,338 97.68
------ ------
SHORT-TERM SECURITIES
COMMERCIAL PAPER - 1.26%
General Electric Capital Corp. 5.44% due 3/1/96 16,580 16,578 1.26
------ ------
16,578 1.26
------ ------
TOTAL SHORT-TERM SECURITIES (COST:$16,578,000) 16,578 1.26
------ ------
TOTAL INVESTMENT SECURITIES (COST:$1,291,274,000) 1,303,916 98.94
Excess of cash and receivables over payable 13,979 1.06
------ ------
NET ASSETS 1,317,895 100.00%
------ ------
</TABLE>
/1/ Pass-through security backed by a pool of mortgages or other loans on which
principal payments are periodically made. Therefore the effective maturity of
this security is shorter than the stated maturity.
/2/ Coupon rate changes periodically.
/3/ Zero coupon bond which will convert to a coupon-bearing security at a later
date.
See Notes to Financial Statements
The American Funds Income Series
U.S. Government Securities Fund
Financial Statements Unaudited
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
at February 29, 1996 (dollars in thousands)
- ---------------------------------------- ------------- ------------
<S> <C> <C>
ASSETS:
Investment securities at market
(cost: $1,291,274) $1,303,916
Cash 9
Receivables for-
Sales of investments $ 5,017
Sales of fund's shares 3,467
Accrued interest 16,601 25,085
------------- ------------
1,329,010
LIABILITIES:
Payables for-
Purchases of investments 5,172
Repurchases of fund's shares 2,202
Dividends payable 2,455
Management services 433
Accrued expenses 853 11,115
------------- ------------
NET ASSETS AT FEBRUARY 29, 1996-
Equivalent to $13.28 per share on
99,233,372 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $1,317,895
============
STATEMENT OF OPERATIONS
for the six months ended February 29, 1996 (dollars in thousands)
------------- ------------
INVESTMENT INCOME:
Income:
Interest $ 53,099
Expenses:
Management services fee 2,723
Distribution expenses 1,739
Transfer agent fee 503
Reports to shareholders 98
Registration statement and prospectus 40
Postage, stationery and supplies 135
Trustees' fees 12
Auditing and legal fees 43
Custodian fee 28
Taxes other than federal income tax 19
Other expenses 198 5,538
------------- ------------
Net investment income 47,561
------------
REALIZED LOSS AND UNREALIZED
APPRECIATION ON INVESTMENTS:
Net realized loss (9,640)
Net unrealized (depreciation)
appreciation on investments:
Beginning of period (1,756)
End of period 12,642
-------------
Net change from unrealized depreciation to
unrealized appreciation on investments 14,398
------------
Net realized loss and
unrealized appreciation on investments 4,758
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $52,319
============
Statement of Changes in Net
Assets (dollars in thousands)
- ---------------------------------------- ------------- ------------
Six months Year ended
ended
2/29/96* 8/31/95
OPERATIONS: ------------- ------------
Net investment income $ 47,561 $ 103,171
Net realized loss on investments (9,640) (27,960)
Net unrealized appreciation
on investments 14,398 33,688
------------- ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 52,319 108,899
------------- ------------
DIVIDENDS PAID TO SHAREHOLDERS (47,728) (103,274)
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
8,718,809 and 20,239,785
shares, respectively 117,066 262,458
Proceeds from shares issued in
reinvestment of net investment income
dividends: 2,537,185 and 5,562,854
shares respectively 34,033 72,131
Cost of shares repurchased:
13,038,260 and 28,920,071
shares, respectively (175,251) (375,402)
------------- ------------
Net decrease in net assets resulting
from capital share transactions (24,152) (40,813)
------------- ------------
TOTAL DECREASE IN NET ASSETS (19,561) (35,188)
NET ASSETS:
Beginning of period 1,337,456 1,372,644
------------- ------------
End of period (including undistributed
net investment income of $2,335 and
$2,502, respectively) $1,317,895 $1,337,456
============= ============
</TABLE>
*Unaudited
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
1. 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 high current income,
consistent with prudent risk and preservation of capital, bu investing
primarily in obligations backed by the full faith and credit of the United
States government. The following paragraphs summarize the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
Bonds and notes are valued at prices obtained from a bond-pricing service
provided by a major dealer in bonds, 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 of their representative quoted bid
and asked prices or, if such prices are not available, at the mean of such
prices for securities of comparable maturity, quality and type. Short-term
securities with original or remaining maturities in excess of 60 days are
valued at the mean of their quoted bid and asked prices. Short-term securities
with 60 days or less to maturity are valued at amortized cost, which
approximates market value. The maturities of variable or floating rate
instruments are deemed to be the time remaining until the next interest rate
adjustment date. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by the Valuation
Committee of the Board of Trustees.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed delivery or "when-issued" basis, it
will segregate with its custodian liquid assets in an amount sufficient to meet
its payment obligations in these transactions. Realized gains and losses from
securities transactions are reported on an identified cost basis. Interest
income is reported on the accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective securities. Dividends
are declared daily after determination of the fund's net asset value and are
paid to shareholders monthly.
Pursuant to the custodian agreement, the fund receives credit against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $28,000 includes $20,000 paid by these credits rather
than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments not offset by loss carryforwards, to its shareholders. Therefore,
no federal income tax provision is required.
As of February 29, 1996, net unrealized appreciation on investments for
book and federal income tax purposes aggregated $12,642,000, of which
$25,395,000 related to appreciated securities and $12,753,000 related to
depreciated securities. During the six months ended February 29, 1996, the fund
realized, on a tax basis, a net capital loss of $9,640,000 on securities
transactions. The fund has available at February 29, 1996 a net capital loss
carryforward totaling $55,673,000 which may be used to offset capital gains
realized during subsequent years through 2002 and thereby relieve the fund and
its shareholders of any federal income tax liability with respect to the
capital gains that are so offset. It is the intention of the fund not to make
distributions from capital gains while there is a capital loss carryforward.
The cost of portfolio securities for book and federal income tax purposes was
$1,291,274,000 at February 29, 1996.
3. The fee of $2,723,0000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Trustees of the trust are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.30% of the first $60 million of average net assets;
0.21% of such assets in excess of $60 million but not exceeding $1 billion;
0.18% of such assets in excess of $1 billion but not exceeding $3 billion; and
0.16% of such assets in excess of $3 billion; plus 3.00% on the first
$3,333,333 of the fund's monthly gross investment income; 2.25% of the next
$5,000,000 of such income; and 2.00% of such income in excess of $8,333,333.
Pursuant to a Plan of Distribution, the fund may expend up to 0.30% of the
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the trust=s Board of Trustees. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended February 29,
1996, distribution expenses under the Plan were $1,739,000. As of February 29,
1996, accrued and unpaid distribution expenses were $689,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $503,000. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $342,000 (after allowances to
dealers) as its portion of the sales charges paid by purchasers of the fund's
shares. Such sales charges are not an expense of the fund and, hence, are not
reflected in the accompanying statement of operations.
Trustees who are unaffiliated with CRMC may elect to defer part or all of
the fees earned for services as members of the board. Amounts deferred are not
funded and are general unsecured liabilities of the fund. As of February 29,
1996, aggregate amounts deferred and earning there on were $29,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain of the Trustees and officers of the
trust are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
4. As of February 29, 1996, accumulated undistributed net realized loss on
investments was $89,554,000 and paid-in capital was $1,392,472,000.
The fund made purchases and sales of investment securities, excluding
short-term securities, of $266,745,000 and $269,452,000, respectively, during
the six months ended February 29, 1996.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six months Year Ended August 31
ended ----- ----- ------ ------
2/28/1996/1/
1996 1995 1994 1993 1992 1991
--------- ----- ----- ----- ------ ------
Net Asset Value, Beginning
of Period $13.24 $13.18 $14.73 $14.13 $13.57 $13.25
--------- ----- ----- ----- ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .47 1.01 1.03 1.07 1.18 1.22
Net realized and unrealized
gain (loss) on investments. 0.04 0.06 (1.56) .61 .53 .37
Total income from --------- ----- ----- ----- ------ ------
investment operations 0.51 1.07 (0.53) 1.68 1.71 1.59
--------- ----- ----- ----- ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.47) (1.01) (1.02) (1.08) (1.15) (1.27)
--------- ----- ----- ----- ------ ------
Net Asset Value, End of Period $13.28 $13.24 $13.18 $14.73 $14.13 $13.57
========= ===== ===== ===== ====== ======
Total Return/2/ 3.94%/3/ 8.60% (3.72%) 12.44% 13.05% 12.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions) $1,318 $1,337 $1,373 $1,581 $1,328 $1,018
Ratio of expenses to average
net assets .41%/3/ .79% .78% .83% .88% .95%
Ratio of net income to
average net assets 3.53%/3/ 7.79% 7.35% 7.54% 8.63% 9.07%
Portfolio turnover rate 20.68%/3/ 46.77% 71.58% 35.24% 44.81% 53.40%
</TABLE>
/1/ Unaudited
/2/ Calculated without deducting a sales charge. The maximum sales charge is
4.75% of the fund's offering price
/3/ Based on operations for the period shown and, accordingly, not
representative of a full year's operations.
THE AMERICAN FUNDS INCOME SERIES
U.S. GOVERNMENT SECURITIES FUND
BOARD OF TRUSTEES
H. FREDERICK CHRISTIE
Rolling Hills Estates, California
Private investor; former President and
Chief Executive Officer, The Mission Group;
former President, Southern California
Edison Company
DIANE C. CREEL
Long Beach, California
Chairwoman, Chief Executive Officer and
President, The Earth Technology Corporation
(environmental engineering)
MARTIN FENTON, Jr.
San Diego, California
Chairman of the Board,
Senior Resource Group, Inc.
(senior living centers management)
LEONARD R. FULLER
Marina del Rey, California
President, Fuller & Company, Inc.
(financial management consulting)
ABNER D. GOLDSTINE
Los Angeles, California
President of the fund
Senior Vice President and Director,
Capital Research and Management Company
PAUL G. HAAGA, JR.
Los Angeles, California
Chairman of the Board of the fund
Senior Vice President and Director,
Capital Research and Management Company
HERBERT HOOVER III
Pasadena, California
Private investor
RICHARD G. NEWMAN
Los Angeles, California
Chairman of the Board, President
and Chief Executive Officer,
AECOM Technology Corporation
(architectural engineering)
PETER C. VALLI
Long Beach, California
Chairman of the Board,
BW/IP International, Inc.
(industrial manufacturing)
OTHER OFFICERS
MICHAEL J. DOWNER
Los Angeles, California
Vice President of the fund
Senior Vice President -
Fund Business Management Group,
Capital Research and Management Company
MARY C. HALL
Brea, California
Vice President and Treasurer of the fund
Senior Vice President -
Fund Business Management Group,
Capital Research and Management Company
JOHN H. SMET
Los Angeles, California
Vice President of the fund
Vice President,
Capital Research and Management Company
JULIE F. WILLIAMS
Los Angeles, California
Secretary of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
KIMBERLY S. VERDICK
Los Angeles, California
Assistant Secretary of the fund
Assistant Vice President -
Fund Business Management Group,
Capital Research and Management Company
ANTHONY W. HYNES, JR.
Brea, California
Assistant Treasurer of the fund
Vice President -
Fund Business Management Group,
Capital Research and Management Company
OFFICES OF THE FUND AND OF THE INVESTMENT ADVISER,
CAPITAL RESEARCH AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster LLP
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR SECURITIES DEALER OR FINANCIAL PLANNER, OR CALL THE FUND'S
TRANSFER AGENT, TOLL-FREE, AT 800/421-0180.
This report is for the information of shareholders of U.S. Government
Securities Fund, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after June 30, 1996, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA AGD/AL/2940
Lit. No. GVT-013-0496
Printed on recycled paper
[The American Funds Group (R)]
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