Statement of Additional Information - American Funds Mortgage Fund

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Retirement PlanBelmont, CAShasta Technology, Inc.401K PlanCupertino, CAJ C Investment Consulting, Inc.Retirement PlanSan Jose, CAWisconsin Steam CleanersRetirement PlanHartford, WIFaulkner Mackie & Cochran401K PlanEnglewood, COUBS WM USAOmnibus AccountJersey City, NJMcMullan & Associates, Inc.401K PlanChantilly, VAJacob Medinger & Finnegan401K PlanGreenwood Village, COThe Capital Group CompaniesRetirement PlansLos Angeles, CAAmerican Funds 2020 Target DateRetirement FundLos Angeles, CAAmerican Funds 2010 Target DateRetirement FundLos Angeles, CAAmerican Funds 2015 Target DateRetirement FundLos Angeles, CAName and address Ownership Ownership percentageBeneficial Class R-1 19.78RecordBeneficialRecordBeneficialRecordBeneficialRecordBeneficialClass R-1 6.21Class R-1 5.15Class R-2 11.15Class R-3 7.52Record Class R-3 6.70RecordBeneficialRecordBeneficialRecordBeneficialClass R-3 5.72Class R-4 38.68Class R-5 90.39Record Class R-6 38.04Record Class R-6 33.36Record Class R-6 26.69Unless otherwise noted, references in this statement of additional information to Class F shares, Class R shares or Class529 shares refer to both F share classes, all R share classes or all 529 share classes, respectively.Page 28
Investment adviser — Capital Research and Management Company, the fund’s investment adviser, founded in 1931, maintainsresearch facilities in the United States and abroad (Los Angeles, San Francisco, New York, Washington, D.C., London, Geneva, HongKong, Singapore and Tokyo). These facilities are staffed with experienced investment professionals. The investment adviser islocated at 333 South Hope Street, Los Angeles, CA 90071. It is a wholly owned subsidiary of The Capital Group Companies, Inc., aholding company for several investment management subsidiaries. Capital Research and Management Company manages equityassets through three equity investment divisions and fixed-income assets through its fixed-income division. The three equityinvestment divisions make investment decisions on an independent basis and include Capital World Investors, Capital ResearchGlobal Investors and a third equity investment division. Portfolio counselors in the third equity investment division rely on a researchteam that also provides investment services to institutional clients and other accounts advised by affiliates of Capital Research andManagement Company.The investment adviser has adopted policies and procedures that address issues that may arise as a result of an investmentprofessional’s management of the fund and other funds and accounts. Potential issues could involve allocation of investmentopportunities and trades among funds and accounts, use of information regarding the timing of fund trades, investment professionalcompensation and voting relating to portfolio securities. The investment adviser believes that its policies and procedures arereasonably designed to address these issues.Compensation of investment professionals — As described in the prospectus, the investment adviser uses a system of multipleportfolio counselors in managing fund assets. In addition, Capital Research and Management Company’s investment analysts maymake investment decisions with respect to a portion of a fund’s portfolio within their research coverage.Portfolio counselors and investment analysts are paid competitive salaries by Capital Research and Management Company. Inaddition, they may receive bonuses based on their individual portfolio results. Investment professionals also may participate in profitsharingplans. The relative mix of compensation represented by bonuses, salary and profit-sharing plans will vary depending on theindividual’s portfolio results, contributions to the organization and other factors.To encourage a long-term focus, bonuses based on investment results are calculated by comparing pretax total investment returns torelevant benchmarks over the most recent year, a four-year rolling average and an eight-year rolling average with greater weightplaced on the four-year and eight-year rolling averages. For portfolio counselors, benchmarks may include measures of themarketplaces in which the fund invests and measures of the results of comparable mutual funds. For investment analysts,benchmarks may include relevant market measures and appropriate industry or sector indexes reflecting their areas of expertise.Capital Research and Management Company makes periodic subjective assessments of analysts’ contributions to the investmentprocess and this is an element of their overall compensation. The investment results of each of the fund’s portfolio counselors may bemeasured against one or more benchmarks, depending on his or her investment focus, such as: Barclays U.S. Mortgage SecuritiesIndex and Lipper GNMA Funds Average. From time to time, Capital Research and Management Company may adjust or customizethese benchmarks to better reflect the universe of comparably managed funds of competitive investment management firms.Page 29
Page 1 and 2: American Funds Mortgage Fund ®Part
Page 3 and 4: Description of certain securities a
Page 5 and 6: Mortgages underlying most ARMS, how
Page 7 and 8: Certain rights provided to holders
Page 9 and 10: oard of trustees, taking into accou
Page 11 and 12: Fund policiesAll percentage limitat
Page 13 and 14: Management of the fundBoard of trus
Page 15 and 16: Name, age andposition with fund(yea
Page 21 and 22: Dollar range 1of fundshares ownedAg
Page 23 and 24: different transfer agent fees and o
Page 25 and 26: the committee. The nominating and g
Page 27: First Clearing, LLCCustody AccountS
Page 31 and 32: investment adviser may delegate all
Page 33 and 34: During the 2012 fiscal year, admini
Page 35 and 36: Following is a brief description of
Page 37 and 38: Other compensation to dealers — A
Page 39 and 40: Execution of portfolio transactions
Page 41 and 42: among the funds and other accounts
Page 43 and 44: Subject to board policies, the auth
Page 45 and 46: sales, at the last available bid pr
Page 47 and 48: Taxes and distributionsDisclaimer:
Page 49 and 50: countries. The application of the f
Page 51 and 52: Your bank should include the follow
Page 53 and 54: Frequent trading of fund shares —
Page 55 and 56: Sales chargesClass A purchasesPurch
Page 57 and 58: Moving between accounts — Investm
Page 59 and 60: Shareholders purchasing shares at a
Page 61 and 62: life insurance policies that were e
Page 63 and 64: Selling sharesThe methods for selli
Page 65 and 66: Automatic exchanges — For all sha
Page 67 and 68: General informationCustodian of ass
Page 69 and 70: Summary prospectuses, prospectuses,
Page 71 and 72: Fund numbers — Here are the fund
Page 73 and 74: Fund numbersFundClass529-AClass529-
Page 75 and 76: Fund numbersFund Class A ClassR-1Cl
Page 77 and 78: American Funds Tax-ExemptPreservati
Page 79 and 80:
Standard & Poor’sLong-term issue
Page 81 and 82:
Fitch Ratings, Inc.Long-term credit
Page 83 and 84:
Moody’sCommercial paper ratings (
Page 85 and 86:
Fannie Mae 6.00% 2042 3 4,040 4,453
Page 87 and 88:
Tennessee Valley Authority 1.875% 2
Page 89 and 90:
Federal agency mortgage-backed obli
Page 91 and 92:
Net assets consist of:Capital paid
Page 93 and 94:
charge)Classes B and 529-B* None De
Page 95 and 96:
Thinly traded securities — There
Page 97 and 98:
Share classadministrative services
Page 99 and 100:
(1) Includes exchanges between shar
Page 101:
8/31/2012 10.16 .07 .34 .41 (.16) (
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Statement of Additional Information - American Funds Mortgage Fund

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