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Detailed Fund Information

American Funds Mortgage Fund® (bond fund)

Class F-2 shares

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Daily Prices

Updated April 24, 2014, 3:15PM Pacific time

Net Asset Value (NAV) $10.05
NAV Change $0.01

(All prices are subject to revision.)

Historical Prices & Distributions

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Ticker Symbols & Fund Numbers

Fund Number 642
Ticker/Quotron Symbol MFAFX
CUSIP Number 02630V 50 1

Fund Description

Fund Objective The fund's investment objective is to provide current income and preservation of capital.
Distinguishing Characteristics Focuses on high-quality mortgage-related securities, including residential and commercial mortgage-backed securities.
Types of Investments Primarily mortgage-related securities guaranteed by the U.S. government, mortgage-related securities issued by government-sponsored entities but not backed by the full faith and credit of the U.S. government, and non-government mortgage-related securities rated AAA/Aaa or unrated but determined to be of equivalent quality by the fund's investment adviser. Up to 5% of assets may be invested in securities rated AA/Aa or A, or unrated but of equivalent quality.
Non-U.S. Holdings Up to 10% of assets may be invested in high-quality, U.S. dollar-denominated mortgage-related securities from issuers outside the U.S.
Maturity Not required to maintain any particular maturity.
Portfolio Restrictions Normally, at least 80% of the fund’s assets will be invested in mortgage-related securities.

Fund Facts

Minimum Initial Investment $250
Shareholder Accounts (aggregated for all share classes; updated monthly) 16,404
Regular Dividends Paid Monthly
Capital Gains Paid
Fund Inception November 1, 2010
Fiscal Year-End August

The months indicated for dividends and capital gains paid represent the anticipated current year ex-dividend date schedule for all share classes.

Returns & Expenses

Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Results shown at net asset value have all distributions reinvested. If a sales charge had been deducted, the results would have been lower. Share price and return will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Definitions and other important legal information about these prices and returns are shown below.

Rates of Return*

  Average Annual Total Returns
1 yr 3 yrs 5 yrs 10 yrs Fund Lifetime
March 31, 2014 (most recent month-end)
NAV -0.03% 3.13% 2.26%
March 31, 2014 (most recent quarter-end)
NAV -0.03% 3.13% 2.26%

Expense Ratios

American Funds Mortgage Fund 0.45%
Lipper U.S. Mortgage Funds Average 0.62%

12-Month Distribution Rates

As of March 31, 2014 (updated monthly)

NAV 1.36%

Annualized 30-Day SEC Yield

As of March 31, 2014 (updated monthly)

At net asset value 1.88%


Portfolio Summary

% of net assets as of March 31, 2014 (updated quarterly)

Asset-Backed Obligations 0.2%
Cash & equivalents 9.6%
Federal Agency Obligations Non-Mortgage 10.2%
Mortgage-Backed Securities 64.0%
Municipal Securities 1.2%
U.S. Treasuries 14.8%

Quality Summary

% of net assets as of March 31, 2014 (updated quarterly)

U.S. Treasuries/Agencies 25.0%
AAA/Aaa 65.3%
AA/Aa 0.1%
Unrated 0.0%
Cash & equivalents 9.6%

as of March 31, 2014 (updated quarterly)

Average Life (years) 7.6
Average Duration (years) 5.2

Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor’s, Moody’s and/or Fitch, as an indication of an issuer’s creditworthiness. If agency ratings differ, the security will be considered to have received the highest of those ratings, consistent with the fund’s investment policies. Securities in the Unrated category have not been rated by a rating agency; however, the investment adviser performs its own credit analysis and assigns comparable ratings that are used for compliance with fund investment policies.

Portfolio Holdings

(updated quarterly, upon availability)

Asset Mix

as of March 31, 2014 (updated monthly)

U.S. Bonds 87.7%
Non-U.S. Bonds 2.7%
Cash & Equivalents 9.6%

Assets and Portfolio Turnover (for fiscal years)

Fiscal Year Fund Assets (millions) Portfolio Turnover
2013 $794.7 658%
2012 $627.6 442%
2011 $374.5 240%

Assets shown are for combined share classes.

Portfolio Managers

Number of years with American Funds or affiliates
Fergus N. MacDonald 10
Wesley K.-S. Phoa 14

(as of the prospectus dated November 1, 2013)

The portfolio managers shown are reflected in the fund’s most recent prospectus.

Important Legal Information

Fund shares are not guaranteed by the U.S. government. The return of principal in bond funds is not guaranteed. Bond funds have the same interest rate, inflation and credit risks that are associated with the underlying bonds owned by the fund. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus.

* Investment results assume all distributions are reinvested and reflect applicable fees and expenses.

  When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Read details about how waivers and/or reimbursements affect the results for each fund.

Source for Lipper expense ratio comparison: Lipper, based on institutional load funds, excluding funds of funds, for the most recent fiscal year-ends available as of March 31, 2014. Expenses are as of the fund’s prospectus. The expense ratios do not reflect sales charges or fees charged by financial intermediaries.

The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities, while the distribution rate reflects the fund's past dividends paid to shareholders. Accordingly, the fund's SEC yield and distribution rate may differ.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors® and sold through unaffiliated intermediaries.