Statement of Additional Information - American Funds Mortgage Fund

to the fund’s investments and trading. The board also receives compliance reports from the fund’s and the investment adviser’s chiefcompliance officers addressing certain areas of risk.Committees of the fund’s board, as well as joint committees of independent board members of funds managed by Capital Researchand Management Company, also explore risk management procedures in particular areas and then report back to the full board. Forexample, the fund’s audit committee oversees the processes and certain attendant risks relating to financial reporting, valuation offund assets, and related controls. Similarly, a joint review and advisory committee oversees certain risk controls relating to the fund’stransfer agency services.Not all risks that may affect the fund can be identified or processes and controls developed to eliminate or mitigate their effect.Moreover, it is necessary to bear certain risks (such as investment-related risks) to achieve the fund’s objectives. As a result of theforegoing and other factors, the ability of the fund’s service providers to eliminate or mitigate risks is subject to limitations.Committees of the board of trustees — The fund has an audit committee comprised of William H. Baribault, Leonard R. Fuller, W.Scott Hedrick, Laurel B. Mitchell, Frank M. Sanchez, and Steadman Upham, none of whom is an “interested person” of the fund withinthe meaning of the 1940 Act. The committee provides oversight regarding the fund’s accounting and financial reporting policies andpractices, its internal controls and the internal controls of the fund’s principal service providers. The committee acts as a liaisonbetween the fund’s independent registered public accounting firm and the full board of trustees. The audit committee held sixmeetings during the 2012 fiscal year.The fund has a contracts committee comprised of William H. Baribault, James G. Ellis, Leonard R. Fuller, W. Scott Hedrick, R. ClarkHooper, Merit E. Janow, Laurel B. Mitchell, Frank M. Sanchez, Margaret Spellings, 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 andconsider the information deemed necessary to evaluate the terms of certain agreements between the fund and its investment adviseror 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 mayenter into, renew or continue, and to make its recommendations to the full board of trustees on these matters. The contractscommittee held one meeting during the 2012 fiscal year.The fund has a nominating and governance committee comprised of William H. Baribault, James G. Ellis, R. Clark Hooper, Merit E.Janow, Laurel B. Mitchell, and Margaret Spellings, none of whom is an “interested person” of the fund within the meaning of the 1940Act. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and otherrelevant issues, and recommends any appropriate changes to the full board of trustees. The committee also evaluates, selects andnominates independent trustee candidates to the full board of trustees. While the committee normally is able to identify from its ownand other resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered asnominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committeeof the fund, addressed to the fund’s secretary, and must be accompanied by complete biographical and occupational data on theprospective nominee, along with a written consent of the prospective nominee for consideration of his or her name byPage 24