The Tax-Exempt Money Fund of America

THE CASH MANAGEMENT TRUST OF AMERICA
THE U.S. TREASURY MONEY FUND OF AMERICA
THE TAX-EXEMPT MONEY FUND OF AMERICA

Part B
Statement of Additional Information

December 1, 2006
(as supplemented April 1, 2007)

This document is not a prospectus but should be read in conjunction with the
current prospectus of The Cash Management Trust of America ("CMTA"), The U.S.
Treasury Money Fund of America ("CTRS") and The Tax-Exempt Money Fund of America
("CTEX") dated December 1, 2006. The prospectus may be obtained from your
financial adviser or by writing to the funds at the following address:

The Cash Management Trust of America
The U.S. Treasury Money Fund of America
The Tax-Exempt Money Fund of America
Attention: Secretary
333 South Hope Street
Los Angeles, California 90071
213/486-9200

Shareholders who purchase shares at net asset value through eligible retirement
plans should note that not all of the services or features described below may
be available to them. They should contact their employers for details.

TABLE OF CONTENTS

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

Certain investment limitations and guidelines . . . . . . . . . . . 2
Description of certain securities and investment techniques . . . . 3
Fundamental policies and investment restrictions. . . . . . . . . . 8
Management of the funds . . . . . . . . . . . . . . . . . . . . . . 14
Execution of portfolio transactions . . . . . . . . . . . . . . . . 33
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . . 33
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . . 36
Purchase and exchange of shares . . . . . . . . . . . . . . . . . . 40
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Shareholder account services and privileges . . . . . . . . . . . . 45
General information . . . . . . . . . . . . . . . . . . . . . . . . 48
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Financial statements

Money Market Funds -- Page 1
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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 each fund's net
assets unless otherwise noted. This summary is not intended to reflect all of
the funds' investment limitations.

THE CASH MANAGEMENT TRUST OF AMERICA

DEBT SECURITIES

. The fund will invest substantially all of its assets in securities
rated in the highest short-term rating categories (i.e., Prime-1,
A-1).

MATURITY

. The fund currently intends (over the next twelve months) to maintain a
dollar-weighted average portfolio maturity of approximately 35 days or
less.

THE U.S. TREASURY MONEY FUND OF AMERICA

U.S. TREASURY SECURITIES

. The fund will invest substantially all of its assets in U.S. Treasury
securities.

MATURITY

. The fund currently intends (over the next twelve months) to maintain a
dollar-weighted average portfolio maturity of approximately 86 days or
less.

THE TAX-EXEMPT MONEY FUND OF AMERICA

TAX-EXEMPT SECURITIES

. The fund will invest at least 80% of its assets in securities the
interest on which is exempt from federal income tax.

DEBT SECURITIES

. The fund may invest up to 20% of its assets in securities that are
subject to alternative minimum taxes.

. The fund will invest substantially all of its assets in securities
rated in the highest short-term rating categories (i.e., Prime-1,
A-1).

MATURITY

. The fund currently intends (over the next twelve months) to maintain a
dollar-weighted average portfolio maturity of approximately 60 days or
less.

* * * * * *

Money Market Funds -- Page 2
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The funds 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."

INVESTMENT POLICIES -- CMTA and CTEX may invest in securities that are rated in
the two highest rating categories for debt obligations by at least two
nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated by only one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees ("eligible securities"). The nationally
recognized statistical rating organizations currently rating instruments of the
type each fund may purchase include Moody's Investors Service ("Moody's"),
Standard & Poor's Corporation ("S&P"), Fitch Ratings ("Fitch") and Dominion Bond
Rating Service ("DBRS"). Subsequent to its purchase, an issue of securities may
cease to be rated or its rating may be reduced below the minimum rating required
for its purchase. Neither event requires the elimination of such securities from
a fund's portfolio, but Capital Research and Management Company (the "investment
adviser") will consider such an event in its determination of whether the fund
should continue to hold the securities. Investments in eligible securities not
rated in the highest category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such organization),
and unrated eligible securities not determined by the Board of Trustees to be of
comparable quality to those rated in the highest category, will be limited to 5%
of a fund's total assets, with the investment in any one such issuer being
limited to no more than the greater of 1% of a fund's total assets or
$1,000,000. For CMTA, if instruments are unrated, they must be issued,
guaranteed or insured by the United States or Canadian governments, their
agencies or instrumentalities. CTEX generally invests in instruments that are
issued by states, territories or possessions of the United States (or political
subdivisions, agencies or instrumentalities thereof) and municipal securities
that are supported by credit and liquidity enhancements. CTRS invests
exclusively in U.S. Treasury securities, which are of the highest credit
quality.

THE CASH MANAGEMENT TRUST OF AMERICA
------------------------------------

CMTA may invest in the short-term securities described below:

COMMERCIAL PAPER -- Short-term notes issued by companies, governmental bodies or
bank/ corporation sponsored conduits (asset-backed commercial paper).

SHORT-TERM BANK OBLIGATIONS -- Certificates of deposit (interest-bearing time
deposits), bank notes, bankers' acceptances (time drafts drawn on a commercial
bank where the bank accepts an irrevocable obligation to pay at maturity)
representing direct or contingent obligations of commercial banks. Commercial
banks issuing obligations in which CMTA invests must be on an approved list that
is monitored on a regular basis.

SAVINGS ASSOCIATION OBLIGATIONS -- Bank notes and certificates of deposit
(interest-bearing time deposits) issued by savings banks or savings and loan
associations. Savings associations issuing obligations in which CMTA invests
must be on an approved list that is monitored on a regular basis.

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

CORPORATE BONDS AND NOTES -- Corporate obligations include those that mature, or
may be redeemed by CMTA, in 13 months or less. These obligations may originally
have been issued with maturities in excess of 13 months. CMTA currently may
invest only in corporate bonds or notes of issuers having outstanding short-term
securities rated in the top rating category and long-term ratings of A or
better, in each case by Moody's, S&P, Fitch or DBRS. See the appendix for a
description of high-quality ratings by Moody's, S&P, Fitch and DBRS.

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.

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THE U.S. TREASURY MONEY FUND OF AMERICA AND THE TAX-EXEMPT MONEY FUND OF AMERICA
--------------------------------------------------------------------------------

LOANS OF PORTFOLIO SECURITIES -- Each 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. Each fund may at any
time call a loan of its portfolio securities and obtain the return of the loaned
securities. Each fund will receive any interest paid on the loaned securities
and a fee or a portion of the interest earned on the collateral. Each fund will
limit its loans of portfolio securities to an aggregate of 10% of the value of
its total assets, measured at the time any such loan is made.

REPURCHASE AGREEMENTS -- Although neither CTRS nor CTEX has a current intention
of doing so during the next 12 months, each fund is authorized to enter into
repurchase agreements, subject to the standards applicable to CMTA's repurchase
agreement transactions as described above.

THE TAX-EXEMPT MONEY FUND OF AMERICA
------------------------------------

MUNICIPAL BONDS -- Municipal bonds are debt obligations generally issued to
obtain funds for various public purposes, including the construction of public
facilities. Opinions relating to the validity of municipal bonds, exclusion of
municipal bond interest from an investor's gross income for federal income tax
purposes and, where applicable, state and local income tax, are rendered by bond
counsel to the issuing authorities at the time of issuance.

The two principal classifications of municipal bonds are general obligation
bonds and limited obligation or revenue bonds. General obligation bonds are
secured by the issuer's pledge of its full faith and credit including, if
available, its taxing power for the payment of principal and interest. Issuers
of general obligation bonds include states, counties, cities, towns and various
regional or special districts. The proceeds of these obligations are used to
fund a wide range of public facilities, such as the construction or improvement
of schools, highways and roads, water and sewer systems and facilities for a
variety of other public purposes. Lease revenue bonds or certificates of
participation in leases are payable from annual lease rental payments from a
state or locality. Annual rental payments are payable to the extent such rental
payments are appropriated annually.

Typically, the only security for a limited obligation or revenue bond is the net
revenue derived from a particular facility or class of facilities financed
thereby or, in some cases, from the proceeds of a special tax or other special
revenues. Revenue bonds have been issued to fund a wide variety of
revenue-producing public capital projects including: electric, gas, water and
sewer systems; highways, bridges and tunnels; port and airport facilities;
colleges and universities; hospitals; and convention, recreational, tribal
gaming and housing facilities. Although the security behind these bonds varies
widely, many provide additional security in the form of a debt service reserve
fund which may also be used to make principal and interest payments on the
issuer's obligations. In addition, some revenue obligations (as well as general
obligations) are insured by a bond insurance company or backed by a letter of
credit issued by a banking institution.

Revenue bonds also include, for example, pollution control, health care and
housing bonds, which, although nominally issued by municipal authorities, are
generally not secured by the

Money Market Funds -- Page 5
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taxing power of the municipality but by the revenues of the authority derived
from payments by the private entity which owns or operates the facility financed
with the proceeds of the bonds. Obligations of housing finance authorities have
a wide range of security features, including reserve funds and insured or
subsidized mortgages, as well as the net revenues from housing or other public
projects. Many of these bonds do not generally constitute the pledge of the
credit of the issuer of such bonds. The credit quality of such revenue bonds is
usually directly related to the credit standing of the user of the facility
being financed or of an institution which provides a guarantee, letter of credit
or other credit enhancement for the bond issue.

SECURITIES SUBJECT TO ALTERNATIVE MINIMUM TAX -- The funds may invest in
tax-exempt securities believed to pay interest constituting an item of tax
preference subject to alternative minimum tax. Therefore, while each fund's
distributions from tax-exempt securities are not subject to regular federal
income tax, a portion or all may be included in determining a shareholder's
federal alternative minimum tax.

TEMPORARY TAXABLE INVESTMENTS -- A portion of CTEX's assets, which normally will
be less than 20%, may be invested in high-quality taxable short-term securities.
Such temporary investments may include: (a) obligations of the U.S. Treasury;
(b) obligations of agencies and instrumentalities of the U.S. government; and
(c) money market instruments, such as certificates of deposit issued by domestic
banks, corporate commercial paper and bankers' acceptances. These investments
may be made when deemed advisable for temporary defensive purposes or when the
investment adviser believes there is an unusual disparity between the after-tax
income available on taxable investments and the income available on tax-exempt
securities.

THE CASH MANAGEMENT TRUST OF AMERICA, THE U.S. TREASURY MONEY FUND OF AMERICA
-----------------------------------------------------------------------------
AND THE TAX-EXEMPT MONEY FUND OF AMERICA
----------------------------------------

MONEY MARKET INSTRUMENTS -- The funds invest in various high-quality money
market instruments that mature, or may be redeemed or resold, in 13 months or
less (25 months or less in the case of U.S. government securities). For CMTA,
they include: (a) commercial paper (notes 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, and (e)
corporate bonds and notes. CMTA may invest in securities issued by non-U.S.
entities or in securities with credit and liquidity support features provided by
non-U.S. entities. Since these securities are issued by entities that may have
substantial operations outside the United States, they may involve additional
risks and considerations. These securities may be affected by unfavorable
political, economic or governmental developments that could affect the repayment
of principal or payment of interest. Securities of U.S. issuers with substantial
operations outside the United States may also be subject to similar risks.

CTRS may invest in instruments that include U.S. Treasury bills, notes and
bonds. CTEX invests in money market instruments that are issued by states,
territories or possessions of the United States and the District of Columbia and
their political subdivisions, agencies and instrumentalities ("municipalities")
to obtain funds for various public purposes. CTEX may purchase various types of
municipal securities, including tax, bond, revenue, grant anticipation notes,
construction loan notes, municipal commercial paper, general obligation bonds,
revenue bonds and industrial

Money Market Funds -- Page 6
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development bonds. In addition, CTEX may invest in municipal securities that are
supported by credit and liquidity enhancements, including letters of credit from
domestic and non-U.S. banks and other financial institutions. Changes in the
credit quality of these institutions could cause the fund to experience a loss
and may affect its share price. To the extent that the credit quality of these
institutions is downgraded, investments in such securities could increase the
level of illiquidity of the fund's portfolio for the remaining maturity of the
instruments.

VARIABLE AND FLOATING RATE OBLIGATIONS -- The interest rates payable on certain
securities in which the funds 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.

PUT SECURITIES -- CMTA and CTEX may purchase securities that provide for the
right to resell them to the issuer, a bank or a broker-dealer, typically at the
par value plus accrued interest within a specified period of time prior to
maturity. This right is commonly known as a "put" or a "demand feature." The
funds may pay a higher price for such securities than would otherwise be paid
for the same security without such a right. The funds will enter into these
transactions only with issuers, banks or broker-dealers that are determined by
the investment adviser to present minimal credit risks. If an issuer, bank or
broker-dealer should default on its obligation to repurchase, the funds may be
unable to recover all or a portion of any loss sustained. There is no specific
limit on the extent to which the funds may invest in such securities.

MATURITY -- Each fund determines its net asset value using the penny-rounding
method, according to rules of the Securities and Exchange Commission, which
permits it to maintain a constant net asset value of $1.00 per share under
normal conditions. In accordance with rule 2a-7 under the Investment Company Act
of 1940, as amended, each fund is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less and purchase only instruments having
remaining maturities of 13 months or less (25 months or less in the case of U.S.
government securities) determined in accordance with procedures established by
the Board of Trustees to present minimal credit risks. For this purpose, certain
variable and floating rate obligations and put securities which may otherwise
have stated maturities in excess of 13 months (25 months in the case of U.S.
government securities) will be deemed to have remaining maturities equal to the
period remaining until each next readjustment of the interest rate or until the
fund is entitled to repayment or repurchase of the security. CMTA, CTRS and CTEX
currently intend (over the next twelve months) to maintain dollar-weighted
average portfolio maturities of approximately 35 days or less, 86 days or less
and 60 days or less, respectively.

FORWARD COMMITMENT, WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The funds
may enter into commitments to purchase or sell securities at a future date. When
the funds agree to purchase such securities, they assume 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 funds could
miss a favorable price or yield opportunity, or could experience a loss.

The funds 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 their payment obligations in these transactions. Although
these transactions will not be entered into for leveraging purposes, to the
extent a fund's aggregate commitments in connection with these transactions
exceed its segregated assets, the fund temporarily could be in a leveraged
position

Money Market Funds -- Page 7
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(because it may have an amount greater than its net assets subject to market
risk). Should market values of a 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 funds 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 their obligations. After a transaction is entered into,
the funds may still dispose of or renegotiate the transaction. Additionally,
prior to receiving delivery of securities as part of a transaction, the funds
may sell such securities.

FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES -- Each 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 a 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 funds.

THE CASH MANAGEMENT TRUST OF AMERICA

CMTA may not:
---

1. Invest its assets in issues, other than those of the U.S. government, its
agencies or instrumentalities, obligations of commercial banks and savings
institutions with total assets in excess of $1 billion, commercial paper, and
investment-grade corporate obligations - all maturing in one year or less. CMTA
may, however, invest in obligations issued by commercial banks and savings
institutions with assets of less than $1 billion if the principal amounts of
such obligations are fully insured by the U. S. government;

2. Invest more than 5% of its total assets in the securities of any one
issuer, except the U.S. government, its agencies and instrumentalities. With
respect to 25% of total assets, commercial banks are excluded from this 5%
limitation;

3. Invest more than 25% of total assets in the securities of issuers in the
same industry. Electric, natural gas distribution, natural gas pipeline,
combined electric and natural gas, and telephone utilities are considered
separate industries for purposes of this restriction. Obligations of the U.S.
government, its agencies and instrumentalities are not subject to this 25%
limitation on industry concentration. In addition, CMTA may, if deemed
advisable, invest more than 25% of its assets in the obligations of commercial
banks;

4. Enter into any repurchase agreement if, as a result, more than 10% of total
assets would be subject to repurchase agreements maturing in more than seven
days;

5. Make loans to others except for the purchase of debt securities or entering
into repurchase agreements as listed above;

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6. Borrow money, except from banks for temporary purposes and then in an
amount not in excess of 33-1/3% of total assets. This borrowing power is
reserved to facilitate the orderly sale of portfolio securities to accommodate
unusually heavy redemption requests, if they should occur; it is not included
for investment purposes;

7. Pledge more than 15% of its assets and then only to secure temporary
borrowings from banks;

8. Sell securities short;

9. Invest in puts, calls, straddles, spreads or any combination thereof;

10. Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization), real
estate, or commodities;

11. Engage in the underwriting of securities issued by others.

Notwithstanding Investment Restriction #9, the fund may invest in securities
with put and call features.

NONFUNDAMENTAL POLICIES -- The following policies are nonfundamental and may be
changed by the Board of Trustees without shareholder approval.

For purposes of Investment Restriction #1, CMTA currently invests only in high
quality obligations in accordance with rule 2a-7 under the 1940 Act, as
described in the prospectus. (CMTA will notify shareholders 180 days in advance
in the event it no longer is required to adhere to rule 2a-7 and it intends to
stop relying on the rule.)

For purposes of Investment Restriction #2, the fund may invest more than 5% of
its total assets in the securities of any one issuer only to the extent allowed
under rule 2a-7 of the 1940 Act.

For purposes of Investment Restriction #3, CMTA will not invest 25% or more of
total assets in the securities of issuers in the same industry. Additionally,
for purposes of Investment Restriction #3, the investment adviser currently
interprets the term "commercial banks" to mean domestic branches of U.S. banks.

CMTA may not issue senior securities, except as permitted by the 1940 Act.

THE U.S. TREASURY MONEY FUND OF AMERICA

CTRS may not:
---

1. Purchase any security (other than securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities), if immediately after and
as a result of such investment (a) with respect to 75% of CTRS' total assets,
more than 5% of CTRS' total assets would be invested in securities of the
issuer, or (b) CTRS would hold more than 10% of any class of securities or of
the total securities of the issuer (for this purpose all indebtedness of an
issuer shall be deemed a single class).

Money Market Funds -- Page 9
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2. Buy or sell real estate (including real estate limited partnerships) in the
ordinary course of its business; however, CTRS may invest in securities secured
by real estate or interests therein;

3. Acquire securities for which there is no readily available market or enter
into repurchase agreements or purchase time deposits maturing in more than seven
days, if, immediately after and as a result, the value of such securities would
exceed, in the aggregate, 10% of CTRS' total assets;

4. Make loans to others, except by the purchase of debt securities, entering
into repurchase agreements or making loans of portfolio securities;

5. Sell securities short;

6. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of purchases or sales of securities;

7. Borrow money, except from banks for temporary or emergency purposes, not in
excess of 5% of the value of CTRS' total assets, excluding the amount borrowed.
This borrowing provision is intended to facilitate the orderly sale of portfolio
securities to accommodate unusually heavy redemption requests, if they should
occur; it is not intended for investment purposes. In the event that the asset
coverage for CTRS' borrowings falls below 300%, CTRS will reduce within three
days (excluding Sundays and holidays), the amount of its borrowings in order to
provide for 300% asset coverage, and except that CTRS may enter into reverse
repurchase agreements, provided that reverse repurchase agreements and any other
transactions constituting borrowing by CTRS may not exceed one-third of CTRS'
total assets;

8. Mortgage, pledge, or hypothecate its assets, except in an amount up to 5%
of the value of its total assets, but only to secure borrowings for temporary or
emergency purposes;

9. Underwrite any issue of securities, except to the extent that the purchase
of securities directly from the issuer in accordance with CTRS' investment
objective, policies and restrictions, and later resale, may be deemed to be an
underwriting;

10. Knowingly purchase securities of other managed investment companies, except
in connection with a merger, consolidation, acquisition, or reorganization;

11. Buy or sell commodities or commodity contracts (including futures
contracts) or oil, gas or other mineral exploration or development programs;

12. Write, purchase or sell puts, calls, straddles, spreads or any combination
thereof, except that this shall not prevent the purchase of securities which
have "put" or "stand-by commitment" features;

13. Purchase or retain the securities of any issuer, if, to the knowledge of
CTRS, those individual officers and Board members of CTRS, its Investment
Adviser, or principal underwriter, 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;

14. Invest more than 5% of the value of CTRS' total assets in securities of any
issuer with a record of less than three years continuous operation, including
predecessors;

Money Market Funds -- Page 10
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15. Invest 25% or more of total assets in the securities of issuers in the same
industry. Electric, natural gas distribution, natural gas pipeline, combined
electric and natural gas, and telephone utilities are considered separate
industries for purposes of this restriction. Obligations of the U.S. government,
its agencies and instrumentalities, are not subject to this 25% or more
limitation on industry concentration. In addition, CTRS may, if deemed
advisable, invest 25% or more of its assets in the obligations of commercial
banks.

Notwithstanding Investment Restriction #10, 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 Trustees
pursuant to an exemptive order granted by the Securities and Exchange
Commission.

NONFUNDAMENTAL POLICIES -- The following policies are nonfundamental and may be
changed by the Board of Trustees without shareholder approval.

For purposes of Investment Restriction #11, the term "oil, gas or other mineral
exploration or development programs" includes oil, gas or other mineral
exploration or development leases.

For purposes of Investment Restriction #14, the fund may invest more than 5% of
its total assets in the securities of any one issuer only to the extent allowed
under rule 2a-7 of the 1940 Act.

For purposes of Investment Restriction #15, the investment adviser currently
interprets the term "commercial banks" to mean domestic branches of U.S. banks.
Finally, CTRS will not invest more than 5% of its net assets valued at market at
the time of purchase, in warrants including not more than 2% of such net assets
in warrants that are not listed on either the New York Stock Exchange or the
American Stock Exchange; however, warrants acquired in units or attached to
securities may be deemed to be without value for the purpose of this
restriction.

CTRS may not issue senior securities, except as permitted by the 1940 Act.

THE TAX-EXEMPT MONEY FUND OF AMERICA

CTEX may not:
---

1. Purchase any security (other than securities issued or guaranteed by the
U.S. government or its agencies or instrumentalities), if immediately after and
as a result of such investment (a) with respect to 75% of CTEX's total assets,
more than 5% of CTEX's total assets would be invested in securities of the
issuer, or (b) CTEX would hold more than 10% of any class of securities or of
the total securities of the issuer (for this purpose all indebtedness of an
issuer shall be deemed a single class).

2. Enter into any repurchase agreement if, as a result, more than 10% of the
value of CTEX's total assets would be subject to repurchase agreements maturing
in more than seven days;

3. Buy or sell real estate (including real estate limited partnerships) in the
ordinary course of its business; however, CTEX may invest in securities secured
by real estate or interests therein;

4. Acquire securities subject to restrictions on disposition or securities for
which there is no readily available market (including securities of foreign
issuers not listed on any recognized

Money Market Funds -- Page 11
<PAGE>

foreign or domestic exchange), or enter into repurchase agreements or purchase
time deposits maturing in more than seven days, if, immediately after and as a
result, the value of such securities would exceed, in the aggregate, 10% of
CTEX's total assets;

5. Make loans to others, except for the purchase of debt securities, entering
into repurchase agreements or making loans of portfolio securities;

6. Sell securities short, except to the extent that CTEX contemporaneously
owns or has the right to acquire at no additional cost securities identical to
those sold short;

7. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of purchases or sales of securities;

8. Borrow money, except from banks for temporary or emergency purposes, not in
excess of 5% of the value of CTEX's total assets, excluding the amount borrowed.
This borrowing provision is intended to facilitate the orderly sale of portfolio
securities to accommodate unusually heavy redemption requests, if they should
occur; it is not intended for investment purposes. In the event that the asset
coverage for CTEX's borrowings falls below 300%, CTEX will reduce within three
days (excluding Sundays and holidays), the amount of its borrowings in order to
provide for 300% asset coverage;

9. Mortgage, pledge, or hypothecate its assets, except in an amount up to 5%
of the value of its total assets, but only to secure borrowings for temporary or
emergency purposes;

10. Underwrite any issue of securities, except to the extent that the purchase
of municipal securities directly from the issuer in accordance with CTEX's
investment objective, policies and restrictions, and later resale, may be deemed
to be an underwriting;

11. Invest in companies for the purpose of exercising control or management;

12. Knowingly purchase securities of other managed investment companies, except
in connection with a merger, consolidation, acquisition, or reorganization;

13. Buy or sell commodities or commodity contracts or oil, gas or other mineral
exploration or development programs;

14. Write, purchase or sell puts, calls, straddles, spreads or any combination
thereof, except that this shall not prevent the purchase of municipal securities
which have "put" or "stand-by commitment" features;

15. Purchase or retain the securities of any issuer, if, to the knowledge of
CTEX, those individual officers and Board members of CTEX, its Investment
Adviser, or principal underwriter, 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;

16. Invest more than 5% of the value of CTEX's total assets in securities of
any issuer with a record of less than three years continuous operation,
including predecessors;

17. 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.

Money Market Funds -- Page 12
<PAGE>

These restrictions also provide that the fund will:

Normally invest at least 80% of its assets in securities the income from which
is exempt from federal income tax, or will invest its assets so that at least
80% of the income that the fund distributes is exempt from federal income tax.

For purposes of Investment Restriction #2, the fund will not enter into any
repurchase agreement if, as a result, more than 10% of net assets would be
subject to repurchase agreements maturing in more than seven days.

For the purpose of CTEX's investment restrictions, the identification of the
"issuer" of municipal securities that are not general obligation securities is
made by the Investment Adviser on the basis of the characteristics of the
securities as described, the most significant of which is the ultimate source of
funds for the payment of principal and interest on such securities. For purposes
of investment restriction #13 the term "commodities contract" includes futures
contracts.

Notwithstanding Investment Restriction #12, 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 Trustees
pursuant to an exemptive order granted by the Securities and Exchange
Commission.

For purposes of Investment Restriction #16, the fund may invest more than 5% of
its total assets in the securities of any one issuer only to the extent allowed
under rule 2a-7 of the 1940 Act.

NONFUNDAMENTAL POLICIES -- The following policies are nonfundamental and may be
changed by the Board of Trustees without shareholder approval.

CTEX may not invest 25% or more of its assets in municipal securities the
issuers of which are located in the same state, unless such securities are
guaranteed by the U.S. government, or more than 25% of its total assets in
securities the interest on which is paid from revenues of similar type projects.

CTEX may invest no more than an aggregate of 20% of its total assets in
industrial development securities. There could be economic, business or
political developments which might affect all municipal securities of a similar
category or type or issued by issuers within any particular geographical area or
jurisdiction.

CTEX may not issue senior securities, except as permitted by the 1940 Act.

Finally, CTEX will not invest more than 5% of its net assets valued at market at
the time of purchase, in warrants including not more than 2% of such net assets
in warrants that are not listed on either the New York Stock Exchange or the
American Stock Exchange; however, warrants acquired in units or attached to
securities may be deemed to be without value for the purpose of this
restriction.

Money Market Funds -- Page 13
<PAGE>

MANAGEMENT OF THE FUNDS

BOARDS OF TRUSTEES AND OFFICERS

"INDEPENDENT" TRUSTEES/1/

NAME, AGE AND NUMBER OF
POSITION WITH FUND PORTFOLIOS/3/
(YEAR FIRST ELECTED/2/ AS A PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
TRUSTEE) DURING PAST FIVE YEARS BY TRUSTEE BY TRUSTEE
--------------------------------------------------------------------------------------------------------------

Richard G. Capen, Jr., 72 Corporate director and 15 Carnival Corporation
Trustee (1999) author; former U.S.
Ambassador to Spain; former
Vice Chairman,
Knight-Ridder, Inc.
(communications company);
former Chairman and
Publisher, The Miami Herald

--------------------------------------------------------------------------------------------------------------
H. Frederick Christie, 73 Private investor; former 21 Ducommun
Trustee (CMTA-1976; President and CEO, The Incorporated;
CTRS-1991; CTEX-1989) Mission Group (non-utility IHOP Corporation;
holding company, subsidiary Southwest Water
of Southern California Company
Edison Company)
--------------------------------------------------------------------------------------------------------------
Diane C. Creel, 58 Chairman of the Board, 13 Allegheny
Trustee (1994) President and CEO, Technologies;
Ecovation, Inc. (organic BF Goodrich;
waste management); former Foster Wheeler Ltd.
President and CEO, The Earth
Technology Corporation
(international consulting
engineering)
--------------------------------------------------------------------------------------------------------------
James G. Ellis, 60 Vice Provost, Globalization, 12 Genius Products;
Director (CMTA-2006; University of Southern Professional
CTRS-2006) California; Vice Dean, Business Bank
Marshall School of Business,
University of Southern
California; Professor,
Marshall School of Business,
University of Southern
California
--------------------------------------------------------------------------------------------------------------
Martin Fenton, 71 Chairman of the Board, 18 None
Chairman of the Boards Senior Resource Group LLC
(Independent and (development and management
Non-Executive) (CMTA-1989; of senior living
CTRS-1991; CTEX-1989) communities)
--------------------------------------------------------------------------------------------------------------
Leonard R. Fuller, 60 President and CEO, Fuller 16 None
Trustee (CMTA-1994; Consulting (financial
CTRS-1994; CTEX-1995) management consulting firm)

--------------------------------------------------------------------------------------------------------------
R. Clark Hooper, 60 Private investor; former 18 JPMorgan Value
Trustee (2005) President, Dumbarton Group Opportunities Fund
LLC (consulting); former
Executive Vice President -
Policy and Oversight, NASD

--------------------------------------------------------------------------------------------------------------
Richard G. Newman,/5/ 72 Chairman of the Board, AECOM 14 Sempra Energy;
Trustee (1991) Technology Corporation Southwest Water
(engineering, consulting and Company
professional technical
services)
--------------------------------------------------------------------------------------------------------------
Frank M. Sanchez, 63 Principal, The Sanchez 13 None
Trustee (1999) Family Corporation dba
McDonald's Restaurants
(McDonald's licensee)
--------------------------------------------------------------------------------------------------------------

Money Market Funds -- Page 14
<PAGE>

"INTERESTED" TRUSTEES/6,7/

PRINCIPAL OCCUPATION(S)
DURING PAST FIVE YEARS
NAME, AGE AND AND POSITIONS NUMBER OF
POSITION WITH FUND HELD WITH AFFILIATED ENTITIES PORTFOLIOS/3/
(YEAR FIRST ELECTED/2/ AS A OR THE PRINCIPAL UNDERWRITER OVERSEEN OTHER DIRECTORSHIPS/4/ HELD
TRUSTEE/OFFICER) OF THE FUNDS BY TRUSTEE BY TRUSTEE OR OFFICER
----------------------------------------------------------------------------------------------------------

Paul G. Haaga, Jr., 57 Vice Chairman of the Board, 16 None
Vice Chairman of the Boards Capital Research and
(CMTA-1985; CTRS-1990; Management Company;
CTEX-1992) Director, The Capital Group
Companies, Inc.*
----------------------------------------------------------------------------------------------------------
Abner D. Goldstine, 76 Senior Vice President and 13 None
President Director, Capital Research
and Trustee (CMTA-1976; and Management Company
CTRS-1991; CTEX-1989)
----------------------------------------------------------------------------------------------------------

Money Market Funds -- Page 14
<PAGE>

OTHER OFFICERS/7/

NAME, AGE AND
POSITION WITH FUND PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
(YEAR FIRST ELECTED/2/ AS AND POSITIONS HELD WITH AFFILIATED ENTITIES
AN OFFICER) OR THE PRINCIPAL UNDERWRITER OF THE FUNDS
-------------------------------------------------------------------------------

Teresa S. Cook, 54 Senior Vice President - Investment Management
Senior Vice President Group,
(CMTA and CTRS only) Capital Research and Management Company
(1991)
-------------------------------------------------------------------------------
Neil L. Langberg, 53 Vice President - Investment Management Group,
Senior Vice Capital Research and Management Company
President (CTEX only)
(1989)
-------------------------------------------------------------------------------
Kristine M. Nishiyama, Vice President and Counsel - Fund Business
36 Management Group, Capital Research and Management
Vice President (2003) Company; Vice President and Counsel, Capital Bank
and Trust Company*
-------------------------------------------------------------------------------
Karen F. Hall, 41 Vice President - Investment Management Group,
Assistant Capital Research and Management Company
Vice President
(CMTA and CTRS only)
(1999)
-------------------------------------------------------------------------------
Kimberly S. Verdick, 42 Vice President - Fund Business Management Group,
Secretary (1994) Capital Research and Management Company
-------------------------------------------------------------------------------
Ari M. Vinocor, 32 Vice President - Fund Business Management Group,
Treasurer (2005) Capital Research and Management Company
-------------------------------------------------------------------------------
Courtney R. Taylor, 32 Senior Compliance Specialist - Fund Business
Assistant Secretary Management Group, Capital Research and Management
(2006) Company
-------------------------------------------------------------------------------
Sharon G. Moseley, 39 Vice President - Fund Business Management Group,
Assistant Treasurer Capital Research and Management Company
(2007)
-------------------------------------------------------------------------------

Money Market Funds -- Page 15
<PAGE>

* Company affiliated with Capital Research and Management Company.

1 An "independent" trustee refers to a trustee who is not an "interested person"
within the meaning of the 1940 Act.
2 Trustees and officers of the funds serve until their resignation, removal or
retirement.

3 Funds managed by Capital Research and Management Company, including the
American Funds, American Funds Insurance Series,(R) which is comprised of 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, and Endowments, which is comprised of two portfolios and
whose shareholders are limited to certain nonprofit organizations.
4 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.
5 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.

6 "Interested persons," within the meaning of the 1940 Act, on the basis of
their affiliation with the funds' 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 FUNDS IS 333 SOUTH HOPE STREET,
55TH FLOOR, LOS ANGELES, CALIFORNIA 90071, ATTENTION: SECRETARY.

Money Market Funds -- Page 16
<PAGE>

FUND SHARES OWNED BY TRUSTEES AS OF DECEMBER 31, 2005

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. CMTA: Over $100,000 Over $100,000
CTRS: None
CTEX: $10,001 - $50,000
-------------------------------------------------------------------------------
H. Frederick Christie CMTA: Over $100,000 Over $100,000
CTRS: None
CTEX: None
-------------------------------------------------------------------------------
Diane C. Creel CMTA: $1 - $10,000 $10,001 - $50,000
CTRS: $1 - $10,000
CTEX: $1 - $10,000
-------------------------------------------------------------------------------
Martin Fenton CMTA: $10,001- $50,000 Over $100,000
CTRS: $10,001 - $50,000
CTEX: $50,001 - $100,000
-------------------------------------------------------------------------------
Leonard R. Fuller CMTA: $1 - $10,000 $50,001 - $100,000
CTRS: None
CTEX: None
-------------------------------------------------------------------------------
R. Clark Hooper None $50,001 - $100,000
-------------------------------------------------------------------------------
Richard G. Newman CMTA: $1 - $10,000 Over $100,000
CTRS: $1 - $10,000
CTEX: $1 - $10,000
-------------------------------------------------------------------------------
Frank M. Sanchez CMTA: $1 - $10,000 $10,001 - $50,000
CTRS: $1 - $10,000
CTEX: $1 - $10,000
-------------------------------------------------------------------------------
"INTERESTED" TRUSTEES
-------------------------------------------------------------------------------
Don R. Conlan CMTA: Over $100,000 Over $100,000
CTRS: None
CTEX: None
-------------------------------------------------------------------------------
Abner D. Goldstine CMTA: Over $100,000 Over $100,000
CTRS: Over $100,000
CTEX: $10,001 - $50,000
-------------------------------------------------------------------------------
Paul G. Haaga, Jr. CMTA: Over $100,000 Over $100,000
CTRS: $50,001 - $100,000
CTEX: None
-------------------------------------------------------------------------------

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.

Money Market Funds -- Page 17
<PAGE>

TRUSTEE COMPENSATION -- No compensation is paid by the funds 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 funds typically pay each independent trustee an annual
fee, which ranges from $6,500 TO $13,510 for CMTA, $1,500 to $2,480 for CTRS and
$1,500 to $2,480 for CTEX, based primarily on the total number of
board clusters on which that independent trustee serves.

In addition, the funds generally pay 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 investment adviser. The funds 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 funds. The
funds also reimburse certain expenses of the independent trustees.

Money Market Funds -- Page 18
<PAGE>

TRUSTEE COMPENSATION PAID DURING THE FISCAL YEAR ENDED SEPTEMBER 30, 2006

TOTAL COMPENSATION
AGGREGATE COMPENSATION (INCLUDING
(INCLUDING VOLUNTARILY VOLUNTARILY DEFERRED
DEFERRED COMPENSATION/1/) COMPENSATION/1/)
NAME FROM THE FUNDS FROM ALL FUNDS MANAGED BY
------------------------------------------------------------------------------------------------ CAPITAL RESEARCH AND
MANAGEMENT
COMPANY OR ITS AFFILIATES/2/
----------------------------

Richard G. Capen, Jr./3/ $9,929 CMTA $147,750
4,929 CTRS 4,929 CTEX
-----------------------------------------------------------------------------------------------------------------------------
H. Frederick Christie 9,987 CMTA 381,250
4,987 CTRS
4,987 CTEX
-----------------------------------------------------------------------------------------------------------------------------
Diane C. Creel/3/ 10,654 CMTA 87,985
4,214 CTRS
4,214 CTEX
-----------------------------------------------------------------------------------------------------------------------------
Martin Fenton/3/ 11,023 CMTA 334,390
6,021 CTRS
6,021 CTEX
-----------------------------------------------------------------------------------------------------------------------------
Leonard R. Fuller 10,214 CMTA 223,750
5,214 CTRS
5,214 CTEX
-----------------------------------------------------------------------------------------------------------------------------
R. Clark Hooper 10,338 CMTA 190,583
5,338 CTRS
5,338 CTEX
-----------------------------------------------------------------------------------------------------------------------------
Richard G. Newman 8,969 CMTA 160,810
3,969 CTRS
3,969 CTEX
-----------------------------------------------------------------------------------------------------------------------------
Frank M. Sanchez 10,863 CMTA 90,485
4,423 CTRS
4,423 CTEX
-----------------------------------------------------------------------------------------------------------------------------

1 Amounts may be deferred by eligible trustees under a nonqualified deferred
compensation plan adopted by the funds in 1993/1994. 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 September 30, 2006 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 comprised of 15
funds and serves as the underlying investment vehicle for certain variable
insurance contracts, and Endowments, which is comprised of two portfolios and
whose shareholders are limited to certain nonprofit organizations.
3 Since the deferred compensation plans' adoption, the total amount of deferred
compensation accrued by the funds (plus earnings thereon) through the 2006
fiscal year for participating trustees is as follows: Richard G. Capen ($51,620
- CMTA; $22,936 - CTRS and $24,726 - CTEX), Diane C. Creel ($30,702 - CMTA;
$11,399 - CTRS and $11,285 - CTEX) and Martin Fenton ($20,625 - CMTA; $8,610 -
CTRS and $7,826 - CTEX). Amounts deferred and accumulated earnings thereon are
not funded and are general unsecured liabilities of the funds until paid to the
trustees.

As of November 1, 2006, the officers and trustees of each fund and their
families, as a group, owned beneficially or of record less than 1% of the
outstanding shares of each fund.

Each fund, an open-end, diversified management investment company, was organized
as a Massachusetts business trust (CMTA on March 1, 1976, CTRS on December 19,
1990 and CTEX on December 5, 1988).

Money Market Funds -- Page 19
<PAGE>

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.

The funds have 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
CollegeAmerica/(R)/ account owners invested in Class 529 shares are not
shareholders of CMTA 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
CMTA's Class 529 shares, the Virginia College Savings Plan/SM/ will vote any
proxies relating to CMTA's Class 529 shares.

The funds do 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 funds 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 funds has entered into with independent trustees provide in
effect that, subject to certain conditions, the funds 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.

SHAREHOLDER AND TRUSTEE RESPONSIBILITY -- Under the laws of certain states,
including Massachusetts, where each fund was organized, and California, where
each 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 funds and provides that
notice of the disclaimer may be given in each agreement, obligation, or
instrument which is entered into or executed by the funds or trustees. The
Declaration of Trust provides for indemnification out of fund property of any
shareholder held personally liable for the obligations of each fund and also
provides for each 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
each fund are not liable for actions or failure to act; however, they are not
protected from liability by reason of their

Money Market Funds -- Page 20
<PAGE>

willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of their office.

COMMITTEES OF THE BOARD OF TRUSTEES -- The funds have an audit committee
comprised of Richard G. Capen, Jr.; H. Frederick Christie; Leonard R. Fuller;
and R. Clark Hooper, none of whom is an "interested person" of the funds within
the meaning of the 1940 Act. The committee provides oversight regarding the
funds' accounting and financial reporting policies and practices, their internal
controls and the internal controls of the funds' principal service providers.
The committee acts as a liaison between the funds' independent registered public
accounting firm and the full board of trustees. Four audit committee meetings
were held during the 2006 fiscal year.

The funds have a contracts committee comprised of Richard G. Capen, Jr.; H.
Frederick Christie; Diane C. Creel; Martin Fenton; Leonard R. Fuller; R. Clark
Hooper; Richard G. Newman; and Frank M. Sanchez, none of whom is an "interested
person" of the funds 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 funds and
their 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 funds 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 2006 fiscal year.

The funds have a nominating and governance committee comprised of Richard G.
Capen, Jr.; H. Frederick Christie; Diane C. Creel; Martin Fenton; Leonard R.
Fuller; R. Clark Hooper; Richard G. Newman; and Frank M. Sanchez, none of whom
is an "interested person" of the funds 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 funds, addressed to the funds'
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 2006 fiscal year.

PROXY VOTING PROCEDURES AND GUIDELINES -- The funds and their investment adviser
have adopted Proxy Voting Guidelines (the "Guidelines") with respect to voting
proxies of securities held by the funds, 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 are voted by a committee 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

Money Market Funds -- Page 21
<PAGE>

the proposals in the proxy. A discussion of any potential conflicts of interest
is also included in the summary. After reviewing the summary, one or more
research analysts familiar with the company and industry make a voting
recommendation on the proxy proposals. A second recommendation is made by a
proxy coordinator (a senior investment professional) 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

Money Market Funds -- Page 22
<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 tables identify those investors who
own of record or are known by the funds to own beneficially 5% or more of any
class of their shares as of the opening of business on November 1, 2006. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.

THE CASH MANAGEMENT TRUST

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

Edward D. Jones & Co. Class B 5.24%
201 Progress Parkway
Maryland Heights, MO 63043-3009
----------------------------------------------------------------------------
Citigroup Global Markets, Inc. Class C 9.01
333 W. 34th Street
New York, NY 10001-2402
----------------------------------------------------------------------------
Lloyd Meador Class F 6.65
Boulder, CO 80302
----------------------------------------------------------------------------
CGTC Class R-5 32.77
400 S. Hope Street, Floor 22
Los Angeles, CA 90071-2801
----------------------------------------------------------------------------
Wells Fargo Bank Class R-5 12.00
P.O. Box 1533
Minneapolis, MN 55480-1533
----------------------------------------------------------------------------
CGTC Class R-5 5.70
120 S. State College Boulevard
Brea, CA 92821-5805
----------------------------------------------------------------------------

THE U.S. TREASURY MONEY FUND OF AMERICA

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

The Hildenbrand Family Trust Class A 8.10%
Corona Del Mar, CA 92625-1823
----------------------------------------------------------------------------
Emjayco Class R-1 43.44
P.O. Box 170910
Milwaukee, WI 53217-0909
----------------------------------------------------------------------------
Terrell B. Jones Defined Benefit Plan Class R-1 17.85
Zephyr Cover, NV 89448-4267
----------------------------------------------------------------------------
Mid Atlantic Trust Class R-1 15.52
3336 Fourth Avenue, 5th Floor Class R-4 7.80
The Times Building
Pittsburgh, PA 15222-2004
----------------------------------------------------------------------------
FNB & Co. Class R-1 5.64
P.O. Box 9012
101 W. Sycamore Street
Kokomo, IN 46904-9012
----------------------------------------------------------------------------
Trustlynx Class R-4 19.48
P.O. Box 173736
Denver, CO 80217-3736
----------------------------------------------------------------------------
CGTC Class R-5 52.82
50 W. Liberty Street, Suite 980
Reno, NV 89501-1978
----------------------------------------------------------------------------
CGTC Class R-5 22.08
400 S. Hope Street, Floor 22
Los Angeles, CA 90071-2801
----------------------------------------------------------------------------
CB&T Class R-5 13.32
415 N. State Street
Chicago, IL 60610-4631
----------------------------------------------------------------------------
Wells Fargo Bank Class R-5 9.10
P.O. Box 1533
Minneapolis, MN 55480-1533
----------------------------------------------------------------------------

Money Market Funds -- Page 23
<PAGE>

THE TAX-EXEMPT MONEY FUND

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

CGTC Class R-5 19.07%
50 W. Liberty Street, Suite 980
Reno, NV 89501-1978
----------------------------------------------------------------------------
CGTC Agent Class R-5 18.73
120 S. State College Boulevard
Brea, CA 92821-5805
----------------------------------------------------------------------------
CGTC Class R-5 15.81
50 W. Liberty Street, Suite 980
Reno, NV 89501-1978
----------------------------------------------------------------------------
CGTC Agent Class R-5 7.91
120 S. State College Boulevard
Brea, CA 92821-5805
----------------------------------------------------------------------------
CGTC Agent Class R-5 6.27
120 S. State College Boulevard
Brea, CA 92821-5805
----------------------------------------------------------------------------

INVESTMENT ADVISER -- Capital Research and Management Company, the funds'
investment adviser, founded in 1931, maintains research facilities in the United
States and abroad (Los

Money Market Funds -- Page 24
<PAGE>

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 135 South State College Boulevard, Brea, CA 92821. It is a
wholly owned subsidiary of The Capital Group Companies, Inc., a holding company
for several investment management subsidiaries. The investment adviser manages
equity assets for the American Funds through two divisions. These divisions
generally function separately from each other with respect to investment
research activities and they make investment decisions for the funds on a
separate basis.

INVESTMENT ADVISORY AND SERVICE AGREEMENTS -- Each fund has an Investment
Advisory and Service Agreement (the "Agreement") with the investment adviser
which provides that the investment adviser shall determine which securities
shall be purchased or sold by each fund and provides certain services to each
fund.

The CMTA Agreement will continue in effect until May 31, 2007, unless sooner
terminated. The CTRS Agreement will continue in effect until October 31, 2007,
unless sooner terminated, and the CTEX Agreement will continue in effect until
October 1, 2007, unless sooner terminated. Each Agreement 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
such 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 funds
for its acts or omissions in the performance of its obligations to the funds 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).

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 funds' 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 funds' offices. The funds pay 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 their 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 funds; and costs of
assembling and storing shareholder account data.

Capital Research and Management Company manages the investment portfolios and
business affairs of the funds and receives an annual fee from each fund as
follows:

CMTA: 0.32% on the first $1 billion of average daily net assets; plus 0.29%
on average daily net assets between $1 billion and $2 billion; plus 0.27%
on average daily net assets in excess of $2 billion;

Money Market Funds -- Page 25
<PAGE>

CTRS: 0.30% on the first $800 million of average net assets; plus 0.285% on
average daily net assets in excess of $800 million;

CTEX: 0.39% on the first $200 million of average net assets; plus 0.37% on
average daily net assets between $200 million and $600 million; plus 0.33%
on the portion of average daily net assets between $600 million and $1.2
billion; plus 0.29% on average daily net assets in excess of $1.2 billion.

CMTA. For the fiscal years ended September 30, 2006, 2005 and 2004, the
----
investment adviser was entitled to receive from the fund management fees of
$27,644,000, 24,653,000 and $23,838,000, respectively. After giving effect to
the management fee reimbursement and waiver described below, the fund paid the
investment adviser management fees of $24,880,000 (a reduction of $2,764,000)
and $22,379,000 (a reduction of $1,459,000) for the fiscal years ended September
30, 2006 and 2004, respectively. There were no management fees reimbursed or
waived during the fiscal year ended September 30, 2005.

The Agreement provides that the investment adviser will reimburse CMTA for any
expenses with respect to Class A shares that are incurred by the fund in any
fiscal year, exclusive of interest, taxes, brokerage costs and extraordinary
items such as litigation and acquisitions, to the extent such expenses exceed
the lesser of 25% of gross income for the preceding year or the sum of (a)
1-1/2% of the average daily net assets of the preceding year up to and including
$30 million, and (b) 1% of any excess of average daily net assets of the
preceding year over $30 million. To the extent CMTA's Class A share expenses
exceed these limits, the investment adviser will reduce the management fees
similarly for all classes of shares and/or reimburse other Class A expenses. For
the fiscal year ended September 30, 2005 and 2004, reimbursements made by the
investment adviser totaled $2,183,000 and $20,450,000, respectively;; however,
such reimbursements did not impact the amount of the management fee paid during
the fiscal year ended September 30, 2005.

Beginning October 1, 2005, the investment adviser agreed to waive 10% of the
management fees that it was otherwise entitled to receive under the Agreement.
As a result of this waiver, management fees are reduced similarly for all
classes of shares of the fund.

CTRS. For the fiscal years ended September 30, 2006, 2005 and 2004, the
----
investment adviser was entitled to receive from the fund management fees of
$1,673,000, $1,630,000 and $1,782,000, respectively. After giving effect to the
management fee waivers described below, the fund paid the investment adviser
management fees of $1,506,000 (a reduction of $167,000), $1,508,000 (a reduction
of $122,000) and $1,775,000 (a reduction of $7,000) for the fiscal years ended
September 30, 2006, 2005 and 2004, 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 it is otherwise entitled to receive. As a
result of these waivers, management fees are reduced similarly for all classes
of shares of the fund.

CTEX. For the fiscal years ended September 30, 2006, 2005 and 2004, the
----
investment adviser was entitled to receive from the fund management fees of
$1,693,000, $1,571,000 and $1,494,000, respectively. After giving effect to the
management fee waivers described below, the fund paid the investment adviser
management fees of $1,524,000 (a reduction of $169,000),

Money Market Funds -- Page 26
<PAGE>

$1,453,000 (a reduction of $118,000) and $1,487,000 (a reduction of $7,000) for
the fiscal years ended September 30, 2006, 2005 and 2004, respectively.

For all funds. The investment adviser has agreed that in the event the expenses
-------------
of each fund (with the exclusion of interest, taxes, brokerage costs,
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 such fund's Agreement is in effect, exceed the
expense limitations, if any, applicable to such fund pursuant to state
securities laws or any regulations thereunder, 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 such fund in the amount of such excess.
Expenditures, including costs incurred in connection with the purchase or sale
of portfolio securities, which are capitalized in accordance with generally
accepted accounting principles applicable to investment companies, are accounted
for as capital items and not as expenses.

ADMINISTRATIVE SERVICES AGREEMENTS -- The Administrative Services Agreements
(the "Administrative Agreements") between CMTA and the investment adviser
relating to CMTA's Class C, F, R and 529 shares, between CTRS and the investment
adviser relating to CTRS' Class R shares and between CTEX and the investment
adviser relating to CTEX's Class R-5 shares will continue in effect until May
31, 2007, October 31, 2007 and October 31, 2007 respectively, 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. CMTA,
CTRS and CTEX may terminate the Administrative Agreement at any time by vote of
a majority of the independent trustees. The investment adviser has the right to
terminate each Administrative Agreement upon 60 days' written notice to CMTA,
CTRS or CTEX, as applicable. Each Administrative Agreement automatically
terminates in the event of its assignment (as defined in the 1940 Act).

Under each Administrative Agreement, the investment adviser provides certain
transfer agent and administrative services for shareholders of CMTA's Class C,
F, R, Class 529 shares, CTRS' Class R shares and CTEX's Class R-5 shares. The
investment adviser may contract with third parties, including American Funds
Service Company, CMTA's, CTRS' and CTEX's Transfer Agent, to provide 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 CMTA's Class R-1, R-2 and R-3 shares and CTRS' Class R-1 and
R-2 shares, the investment adviser agreed to pay a portion of these fees. For
the year ended September 30, 2006, the total fees paid by the investment adviser
were $1,498,000 and $64,000, respectively.

Money Market Funds -- Page 27
<PAGE>

The investment adviser receives an administrative services fee at the annual
rate of up to 0.15% of the average daily net assets for CMTA's Class C, F and
529 shares and CMTA's and CTRS' Class R shares (excluding Class R-5 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 applicable fund. Of the remainder, the investment adviser will not retain
more than 0.05% of the average daily net assets for each applicable share class.
For CMTA's, CTRS' and CTEX's 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 funds' applicable share classes. 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 each fund and
American Funds Service Company.

During the 2006 fiscal period, administrative services fees were:

----------------------------------------------------------------------------------------------

CMTA CLASS C $ 174,000
CLASS F 35,000
CLASS 529-A 246,000
CLASS 529-B 5,000
CLASS 529-C 20,000
CLASS 529-E 14,000
CLASS 529-F 7,000
CLASS R-1 38,000
CLASS R-2 3,624,000
CLASS R-3 1,118,000
CLASS R-4 245,000
CLASS R-5 136,000
----------------------------------------------------------------------------------------------
CTRS CLASS R-1 3,000
CLASS R-2 191,000
CLASS R-3 70,000
CLASS R-4 8,000
CLASS R-5 10,000
----------------------------------------------------------------------------------------------
CTEX CLASS R-5 39,000
----------------------------------------------------------------------------------------------

PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds Distributors,
Inc. (the "Principal Underwriter") is the principal underwriter of each fund's
shares. The Principal Underwriter is located at 333 South Hope Street, Los
Angeles, CA 90071; 135 South State College Boulevard, Brea, CA 92821; 15370
Barranca Parkway, Irvine, CA 92618; 3500 Wiseman

Money Market Funds -- Page 28
<PAGE>

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 each fund's shares.
For Class B and 529-B shares of CMTA, the Principal Underwriter sells the
rights to the 12b-1 fees paid by CMTA 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. CMTA 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. CMTA 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 529-E shares, CMTA pays the Principal Underwriter for
advancing the immediate service fees and commissions paid to qualified dealers.
For Class F and 529-F shares, CMTA 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, CMTA 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.

Service fees received by the Principal Underwriter on sales of CMTA were:

FISCAL YEAR SERVICE FEES RECEIVED
------------------------------------------------------------------------------

CLASS B 2006 $ 8,000
2005 7,000
2004 15,000
------------------------------------------------------------------------------
CLASS C 2006 345,000
2005 179,000
2004 76,000
------------------------------------------------------------------------------
CLASS 529-B 2006 225
2005 --
2004 270
------------------------------------------------------------------------------
CLASS 529-C 2006 12,000
2005 5,000
2004 7,000
------------------------------------------------------------------------------

No compensation was paid to dealers.

Each 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 funds 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 funds include quality shareholder services; savings to the funds 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
quarterly and the Plans must be renewed annually by the board of trustees.

Money Market Funds -- Page 29
<PAGE>

Under the Plans, each fund may annually expend the following amounts to finance
any activity which is primarily intended to result in the sale of fund shares,
provided each fund's Board of Trustees has approved the category of expenses for
which payment is being made: (a) for Class A shares, up to 0.15% of the average
daily net assets attributable to Class A shares; (b) for Class 529-A shares
(CMTA only), up to 0.50% of the average daily net assets attributable to Class
529-A shares; (c) for Class B and 529-B shares (CMTA only), up to 0.90% of the
average daily net assets attributable to Class B and 529-B shares, respectively;
(d) for Class C and 529-C shares (CMTA only), 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 (CMTA only), up to 0.75% of the average daily net assets
attributable to Class 529-E shares; and (f) for Class F and 529-F shares (CMTA
only), up to 0.50% of the average daily net assets attributable to Class F and
529-F shares; (g) for Class R-1 shares, up to 1.00% of the average daily net
assets attributable to Class R-1 shares (CMTA and CTRS only); (h) for Class R-2
shares, up to 1.00% of the average daily net assets attributable to Class R-2
shares (CMTA and CTRS only); (i) for Class R-3 shares, up to 0.75% of the
average daily net assets attributable to Class R-3 shares (CMTA and CTRS only);
and (j) for Class R-4 shares, up to 0.50% of the average daily net assets
attributable to Class R-4 shares (CMTA and CTRS only). The funds have not
adopted a plan for Class R-5 shares; accordingly, no 12b-1 fees are paid from
Class R-5 assets.

For Class A (all funds) and 529-A shares (CMTA only): up to 0.15% is reimbursed
to the Principal Underwriter for paying service-related expenses, including
service fees paid to qualified dealers.

For Class B and 529-B shares (CMTA only): (a) up to 0.15% is paid to the
Principal Underwriter for paying service-related expenses, including service
fees paid 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.

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

For Class R-1 shares (CMTA and CTRS only): (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 the financing of
commissions paid to qualified dealers.

For Class R-2 shares (CMTA and CTRS only): 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.

Money Market Funds -- Page 30
<PAGE>

For Class R-3 shares (CMTA and CTRS only): 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 (CMTA and CTRS only): 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.

During the 2006 fiscal year, total 12b-1 expenses and the portion of the expense
that remained unpaid, were:

12B-1 EXPENSES 12B-1 UNPAID LIABILITY

------------------------------- ACCRUED OUTSTANDING
------------------------------------------------------------

CLASS A $6,402,000 CMTA $742,000 CMTA
476,000 CTRS 54,000 CTRS
179,000 CTEX 22,000 CTEX
-------------------------------------------------------------------------------------------
CLASS B 1,186,000 CMTA 120,000 CMTA
-------------------------------------------------------------------------------------------
CLASS C 982,000 CMTA 112,000 CMTA
-------------------------------------------------------------------------------------------
CLASS F 49,000 CMTA 5,000 CMTA
-------------------------------------------------------------------------------------------
CLASS 529-A 153,000 CMTA 16,000 CMTA
-------------------------------------------------------------------------------------------
CLASS 529-B 26,000 CMTA 3,000 CMTA
-------------------------------------------------------------------------------------------
CLASS 529-C 117,000 CMTA 14,000 CMTA
-------------------------------------------------------------------------------------------
CLASS 529-E 46,000 CMTA 5,000 CMTA
-------------------------------------------------------------------------------------------
CLASS 529-F 0 CMTA 0 CMTA
-------------------------------------------------------------------------------------------
CLASS R-1 174,000 CMTA 15,000 CMTA
18,000 CTRS 2,000 CTRS
-------------------------------------------------------------------------------------------
CLASS R-2 4,054,000 CMTA 377,000 CMTA
230,000 CTRS 22,000 CTRS
-------------------------------------------------------------------------------------------
CLASS R-3 1,788,000 CMTA 181,000 CMTA
134,000 CTRS 13,000 CTRS
-------------------------------------------------------------------------------------------
CLASS R-4 386,000 CMTA 36,000 CMTA
13,000 CTRS 1,000 CTRS
-------------------------------------------------------------------------------------------

Money Market Funds -- Page 31
<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
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

Money Market Funds -- Page 32
<PAGE>

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.

EXECUTION OF PORTFOLIO TRANSACTIONS

As described in the prospectus, the investment adviser places orders with
broker-dealers for the funds' portfolio transactions. Portfolio transactions for
the funds may be executed as part of concurrent authorizations to purchase or
sell the same security for other funds served by the investment adviser, or for
trusts or other accounts served by affiliated companies of the investment
adviser. When such concurrent authorizations occur, the objective is to allocate
the executions in an equitable manner.

No brokerage commissions were paid on portfolio transactions, including
investment dealer concessions on underwritings, if applicable, for the fiscal
years ended September 30, 2006, 2005 and 2004. 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 funds are required to disclose information regarding investments in the
securities of their "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. At the end of the funds'
most recent fiscal year, the funds had no investments in securities of their
respective regular broker-dealers.

DISCLOSURE OF PORTFOLIO HOLDINGS

The funds' investment adviser, on behalf of the funds, 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 funds' board
of trustees and compliance will be periodically assessed by the board in
connection with reporting from the funds' Chief Compliance Officer.

Money Market Funds -- Page 33
<PAGE>

Under these policies and procedures, each 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 require portfolio holdings
information for legitimate business and fund oversight purposes, may receive the
information earlier.

Affiliated persons of the funds 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 funds 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 funds (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 funds nor their 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 the funds' portfolio
holdings, and to establish policies with respect to such disclosure, resides
with the appropriate investment-related committees of the funds' investment
adviser. In exercising their authority, the committees determine whether
disclosure of information about the funds' 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 (normally $1.00) or sold at the net
asset value price next determined after the purchase or sell order is received
and accepted by the funds 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.

Money Market Funds -- Page 34
<PAGE>

Orders received by the investment dealer or authorized designee, the Transfer
Agent or the funds 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 funds. For
more information about how to purchase through your intermediary, contact your
intermediary directly.

Orders received by the investment dealer or authorized designee, the Transfer
Agent, or the funds after the time of the determination of the net asset value
will be entered at the next calculated offering price. Prices that appear in the
newspaper do not always indicate prices at which you will be purchasing and
redeeming shares of the funds, since such prices generally reflect the previous
day's closing price whereas 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 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.

The valuation of each fund's portfolio securities and calculation of its net
asset value are based upon the penny-rounding method of pricing pursuant to
Securities and Exchange Commission regulations. Under the Securities and
Exchange Commission regulations permitting the use of the penny-rounding method
of pricing, each fund must maintain a dollar-weighted average portfolio maturity
of 90 days or less, purchase instruments having remaining maturities of 13
months or less only (25 months or less in the case of U.S. government
securities), and invest only in securities determined by the board of trustees
to be of high quality with minimal credit risks. The funds follow standard
industry practice by typically reflecting changes in their holdings of portfolio
securities on the first business day following a portfolio trade.

1. All securities with 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. The maturities
of variable or floating rate instruments, with the right to resell them at an
agreed-upon price to the issuer or dealer, are deemed to be the time remaining
until the later of the next interest adjustment date or until they can be
resold.

Other securities with more than 60 days remaining to maturity are valued at
prices obtained from a pricing service selected by the investment adviser,
except that, where such prices are not available or where the Investment Adviser
has determined that such prices do not reflect current market value, they are
valued at the mean between current bid and ask quotations obtained from one or
more dealers in such securities. 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 funds' investment adviser performs certain checks on these prices
prior to calculation of the funds' net asset value.

Where market prices or market quotations are not readily available or are
considered unreliable, securities are valued at fair value as determined in good
faith by the board of trustees or a committee thereof. The fair value of all
other assets is added to the value of securities to arrive at the total assets;

Money Market Funds -- Page 35
<PAGE>

2. Liabilities, including proper accruals of expense items attributable to
particular share classes, are deducted from total assets attributable to such
share classes; and

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
nearer cent, is the net asset value per share for that share class. The net
asset value of each share will normally remain constant at $1.00.

In case of orders sent directly to a fund or American Funds Service Company, an
investment dealer MUST be indicated. Any purchase order may be rejected by the
Principal Underwriter or by the funds.

TAXES AND DISTRIBUTIONS

FUND TAXATION -- Each 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. Each 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, each 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,
each 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 each 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 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

Money Market Funds -- Page 36
<PAGE>

distributed by each 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 each fund intends to distribute its net
investment income and net capital gains so as to avoid excise tax liability,
each fund may determine that it is in the interest of shareholders to distribute
a lesser amount.

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 -- Dividends on fund shares will be reinvested in shares of the funds
of the same class. Dividends distributed by the funds to a retirement plan
currently are not taxable.

Each fund intends to follow the practice of distributing substantially all of
its investment company taxable income. Investment company taxable income
generally includes dividends, interest and net short-term capital gains, less
expenses.

DAILY DIVIDENDS -- A dividend from net investment income is declared each day on
shares of each fund. This dividend is payable to everyone who was a shareholder
at the close of business the previous day. Accordingly, when shares are
purchased dividends begin to accrue on the day following receipt by the Transfer
Agent of payment for the shares; when shares are redeemed, the shares are
entitled to the dividend declared on the day the redemption request is received
by the Transfer Agent. Dividends are automatically reinvested in shares of the
same class, on the last business day of the month, at net asset value (without
sales charge), unless a shareholder otherwise instructs the Transfer Agent in
writing. Shareholders so requesting will be mailed checks in the amount of the
accumulated dividends.

Under the penny-rounding method of pricing (see "Purchase of Shares"), each fund
rounds its per share net asset value to the nearer cent to maintain a stable net
asset value of $1.00 per share. Accordingly its share price ordinarily would not
reflect realized or unrealized gains or losses unless such gains or losses were
to cause the net asset value to deviate from $1.00 by one half-cent or more.
Pursuant to Securities and Exchange Commission regulations, the Trustees have
undertaken, as a particular responsibility within their overall duty of care
owed to shareholders, to assure to the extent reasonably practicable that each
fund's net asset value per share, rounded to the nearer cent, will not deviate
from $1.00. Among the steps that could be taken to maintain the net asset value
at $1.00 when realized or unrealized gains or losses approach one half-cent per
share would be to reflect all or a portion of such gains or losses in the daily
dividends declared. This would cause the amount of the daily dividends to
fluctuate and to deviate from a fund's net investment income for those days, and
could cause the dividend for a particular day to be negative. In that event a
fund would offset any such amount against the dividends that had been accrued
but not yet paid for that month. Alternatively, each fund has reserved the right
to adjust its total number of shares outstanding, if deemed advisable by the
Trustees, in order to maintain the net asset value of its shares at $1.00. This
would be done either by regarding each shareholder as having contributed to the
capital of the fund the number of full and fractional shares that
proportionately represents the excess, thereby reducing the number of
outstanding shares, or by declaring a stock dividend and increasing the number
of outstanding shares. Each shareholder will be deemed to have agreed to such
procedure by investing in a fund. Such action would not change a shareholder's
pro rata share of net assets, but would reflect the increase or decrease in the
value of the shareholder's holdings which resulted from the change in net asset
value.

Money Market Funds -- Page 37
<PAGE>

The funds do not ordinarily realize short- or long-term capital gains or losses
on sales of securities. If a fund should realize gains or losses, it would
distribute to shareholders all of the excess of net long-term capital gain over
net short-term capital loss on sales of securities. Although each fund generally
maintains a stable net asset value of $1.00 per share, if the net asset value of
shares of a fund should, by reason of a distribution of realized capital gains,
be reduced below a shareholder's cost, such distribution would in effect be a
return of capital to that shareholder even though taxable to the shareholder,
and a sale of shares by a shareholder at net asset value at that time would
establish a capital loss for federal tax purposes. See also "Purchase of Shares"
below.

STATE TAXES -- Information relating to the percentage of CTEX's income derived
from securities issued in a particular state is provided after year end.

Since all of CTRS' dividends are expected to be attributable to income on U.S.
Treasury securities, they are generally exempt from state personal income taxes.
Also, some states do not have personal income taxes. CTRS believes that, as of
the date of this publication, neither the District of Columbia nor any state
imposes an income tax on dividends attributable to income on U.S. Treasury
securities paid by the fund to individuals. However, other taxes may apply to
dividends paid by CTRS to individual shareholders. Further, any distributions of
capital gains may not be exempt from income taxes. Because tax laws vary from
state to state and may change over time, you should consult your tax adviser or
state tax authorities regarding the tax status of distributions from CTRS.
Corporate shareholders may be subject to income tax or other types of tax on
dividends they receive, even in those states that do not impose an income tax on
distributions to individual shareholders of CTRS. Corporate shareholders should
therefore seek advice from their tax adviser regarding the tax treatment of
distributions from CTRS.

CTEX - ADDITIONAL INFORMATION CONCERNING TAXES

The following is only a summary of certain additional federal, state and local
tax considerations generally affecting CTEX and its shareholders. No attempt is
made to present a detailed explanation of the tax treatment of CTEX or its
shareholders, and the discussion here and in the funds' prospectus is not
intended as a substitute for careful tax planning. Investors should consult
their own tax advisers for additional details as to their particular tax
situations.

CTEX is not intended to constitute a balanced investment program and is not
designed for investors seeking capital appreciation or maximum tax-exempt income
irrespective of fluctuations in principal. Shares of CTEX would generally not be
suitable for tax-exempt institutions or tax-deferred retirement plans (e.g.,
employer-sponsored plans and IRAs). Such retirement plans would not gain any
benefit from the tax-exempt nature of CTEX's dividends because such dividends
would be ultimately taxable to beneficiaries when distributed to them.

In addition, CTEX may not be an appropriate investment for entities which are
"substantial users" of facilities financed by private activity bonds or "related
persons" thereof. "Substantial user" is defined under U.S. Treasury Regulations
to include a non-exempt person who regularly uses a part of such facilities in
his trade or business and whose gross revenues derived with respect to the
facilities financed by the issuance of bonds are more than 5% of the total
revenues derived by all users of such facilities, or who occupies more than 5%
of the usable area of such facilities or for whom such facilities or a part
thereof were specifically constructed, reconstructed or acquired. "Related
persons" include certain related natural persons, affiliated corporations,
partnerships and their partners and S Corporations and their shareholders.

Money Market Funds -- Page 38
<PAGE>

Interest on the municipal securities purchased by CTEX is believed to be free
from regular federal income tax based on opinions issued by bond counsel.
However, there is no guarantee that the opinion is correct or that the IRS will
agree with the opinion. In addition, the Code imposes limitations on the use
and investment of the proceeds of state and local governmental bonds and of
other funds of the issuers of such bonds. These limitations must be satisfied on
a continuing basis to maintain the exclusion from gross income of interest on
such bonds. Bond counsel qualify their opinions as to the federal tax status of
new issues of bonds by making such opinions contingent on the issuer's future
compliance with these limitations. Any failure on the part of an issuer to
comply with these limitations, or a determination by the IRS that the securities
do not qualify for tax-exempt treatment, could cause the interest on the bonds
to become taxable to investors retroactive to the date the bonds were issued. If
this were to happen you may need to file an amended tax return.

The percentage of total dividends paid by CTEX with respect to any taxable year
which qualify for exclusion from gross income ("exempt-interest dividends") will
be the same for all shareholders receiving dividends during such year. In order
for CTEX to pay exempt-interest dividends during any taxable year, at the close
of each fiscal quarter at least 50% of the aggregate value of CTEX's assets must
consist of tax-exempt securities. Not later than 60 days after the close of its
taxable year, CTEX will notify each shareholder of the portion of the dividends
paid by CTEX to the shareholder with respect to such taxable year which
constitutes exempt-interest dividends. Shareholders are required by the Code to
report to the federal government all exempt-interest dividends received from the
fund. The aggregate amount of dividends so designated cannot, however, exceed
the excess of the amount of interest excludable from gross income from tax under
Section 103 of the Code received by CTEX during the taxable year over any
amounts disallowed as deductions under Sections 265 and 171(a)(2) of the Code.

Interest on indebtedness incurred by a shareholder to purchase or carry CTEX
shares is not deductible for federal income tax purposes if CTEX distributes
exempt-interest dividends during the shareholder's taxable year. Although CTEX
normally maintains a constant net asset value of $1.00 per share, in the event a
shareholder receives an exempt-interest dividend with respect to any share and
such share is held for six months or less, and is sold or exchanged at a loss,
such loss will be disallowed to the extent of the amount of such exempt-interest
dividend.

Money Market Funds -- Page 39
<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 INVESTMENT DEALER -- Deliver or mail a check to your
investment dealer.

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.

Money Market Funds -- Page 40
<PAGE>

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

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.

CMTA's Class 529 shares may be purchased only through CollegeAmerica by
investors establishing qualified higher education savings accounts. CMTA's Class
529-E shares may be purchased only by investors participating in CollegeAmerica
through an eligible employer plan. CMTA's and CTRS' R share classes are
generally available only to employer-sponsored retirement plans. 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 funds 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:

Money Market Funds -- Page 41
<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. However, in the case where
the entity maintaining these accounts aggregates the accounts' purchase orders
for fund shares, such accounts are not required to meet the minimum amount for
subsequent purchases.

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 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 are not permitted. 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
funds' 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
funds' "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.

The fund, through its transfer agent, American Funds Service Company,
maintains surveillance procedures 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, the fund's board of directors 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 which 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).

Money Market Funds -- Page 42
<PAGE>

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 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 of CMTA 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 of CMTA
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 of
CMTA 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 F TO CLASS A SHARES -- You can redeem Class F shares of
CMTA held in a qualified fee-based program and with the redemption proceeds
purchase Class A shares without paying any applicable 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.

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.

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.

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 or vice
versa, 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.

CDSC WAIVERS FOR CLASS 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 incurring a CDSC. Redemptions made after the Transfer Agent is
notified of the death of a joint tenant will be subject to a CDSC.

Money Market Funds -- Page 43
<PAGE>

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 a systematic withdrawal plan (SWP) (see "Automatic
withdrawals" under "Shareholder account services and privileges"
below). For each SWP 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 SWP 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 a SWP will also count toward the 12% limit. In the
case of a SWP, the 12% limit is calculated at the time a systematic
redemption is first made, and is recalculated at the time each
additional systematic redemption is made. Shareholders who establish a
SWP 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."

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 National
Association of Securities

Money Market Funds -- Page 44
<PAGE>

Dealers, Inc., 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 ($50 minimum
per fund; $25 minimum per fund in the case of employer-sponsored 529 accounts)
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

Money Market Funds -- Page 45
<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 as often as you wish if your
account is worth at least $10,000, or up to four times a year for an account
worth at least $5,000. 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.
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.

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

Money Market Funds -- Page 46
<PAGE>

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 liability (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 write checks for $250 or more against your Class A share
account in the funds. 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 checking account
signature card. When the checks you write are presented to JP Morgan Chase Bank
for payment, the bank will instruct the Transfer Agent to withdraw the
appropriate number of shares from your account (provided payment for the shares
has been collected). The bank's rules and regulations governing such checking
accounts include the right of the bank not to honor checks in amounts exceeding
the value of the account at the time the check is presented for payment. Each
month canceled checks will be returned to you. Generally, you pay no fee for
this check writing service; however, reasonable service charges for "regular or
frequent use" of this service may be assessed in the future. This procedure
enables you to continue earning daily income dividends on your money until your
checks actually clear.

REDEMPTION OF SHARES -- Each fund's Declaration of Trust permits the funds to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per

Money Market Funds -- Page 47
<PAGE>

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 fund's current registration statement under
the 1940 Act, and subject to such further terms and conditions as the board of
trustees of each fund may from time to time adopt.

GENERAL INFORMATION

CUSTODIAN OF ASSETS -- Securities and cash owned by the funds, including
proceeds from the sale of shares of the funds and of securities in the funds'
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 funds' 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 135 South State College Boulevard, Brea, CA 92821-5823. American
Funds Service Company was paid a fee of $11,522,000, $644,000 and $134,000 by
CMTA, CTRS and CTEX for Class A shares, respectively, and $152,000 for CMTA
Class B shares for the 2006 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 -- PricewaterhouseCoopers LLP, 350
South Grand Avenue, Los Angeles, CA 90071, serves as each 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 PricewaterhouseCoopers LLP, independent registered public
accounting firm, given on the authority of said firm as experts in accounting
and auditing. The selection of the funds' 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 funds and for
independent trustees in their capacities as such. Certain legal matters in
connection with certain of the shares of beneficial interest offered by the
prospectus have been passed upon for the funds by Paul, Hastings, Janofsky &
Walker LLP. Counsel does not provide legal services to the funds' investment
adviser or any of its affiliated companies. A determination with respect to the
independence of the funds'

Money Market Funds -- Page 48
<PAGE>

"independent legal counsel" will be made at least annually by the independent
trustees of the funds, as prescribed by the 1940 Act and related rules.

PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- The funds' fiscal
year ends on September 30. Shareholders are provided updated prospectuses
annually and at least semiannually with reports showing the funds' investment
portfolio or summary investment portfolio, financial statements and other
information. The funds' annual financial statements are audited by the funds'
independent registered public accounting firm, PricewaterhouseCoopers LLP. In
addition, shareholders may also receive proxy statements for the funds. In an
effort to reduce the volume of mail shareholders receive from the funds 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.

CODES OF ETHICS -- The funds 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 each 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 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.

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 funds or on the
ability of the investment adviser and Principal Underwriter to perform their
contracts with the funds is remote. The SEC is conducting a related
investigation as of the date of this statement of additional information. The
investment adviser and Principal Underwriter are cooperating fully. 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."

Money Market Funds -- Page 49
<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.

Money Market Funds -- Page 50
<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.

Money Market Funds -- Page 51
<PAGE>

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

Money Market Funds -- Page 52
<PAGE>

APPENDIX

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.

FITCH
COMMERCIAL PAPER RATINGS (HIGHEST THREE RATINGS)

F1
Indicates the strongest capacity for timely payment of financial commitments
relative to other issuers or issues in the same country. Under their national
rating scale, this rating is assigned to the "best" credit risk relative to all
others in the same country and is normally assigned to all financial commitments
issued or guaranteed by the sovereign state. Where the credit risk is
particularly strong, a "+" is added to the assigned rating.

Money Market Funds -- Page 53
<PAGE>

F2
Indicates a satisfactory capacity for timely payment of financial commitments
relative to other issuers or issues in the same country. However, the margin of
safety is not as great as in the case of the higher ratings.

F3
Indicates an adequate capacity for timely payment of financial commitments
relative to other issuers or issues in the same country. However, such capacity
is more susceptible to near-term adverse changes than for financial commitments
in higher rated categories.

DBRS
COMMERCIAL PAPER RATINGS (HIGHEST THREE RATINGS)

R-1 (HIGH)
Short-term debt rated R-1 (high) is of the highest credit quality, and indicates
an entity possessing unquestioned ability to repay current liabilities as they
fall due. Entities rated in this category normally maintain strong liquidity
positions, conservative debt levels, and profitability that is both stable and
above average. Companies achieving an R-1 (high) rating are normally leaders in
structurally sound industry segments with proven track records, sustainable
positive future results, and no substantial qualifying negative factors. Given
the extremely tough definition DBRS has established for an R-1 (high), few
entities are strong enough to achieve this rating.

R-1 (MIDDLE)
Short-term debt rated R-1 (middle) is of superior credit quality and, in most
cases, ratings in this category differ from R-1 (high) credits by only a small
degree. Given the extremely tough definition DBRS has established for the R-1
(high) category, entities rated R-1 (middle) are also considered strong credits,
and typically exemplify above average strength in key areas of consideration for
the timely repayment of short-term liabilities.

R-1 (LOW)
Short-term debt rated R-1 (low) is of satisfactory credit quality. The overall
strength and outlook for key liquidity, debt, and profitability ratios is not
normally as favourable as with higher rating categories, but these
considerations are still respectable. Any qualifying negative factors that exist
are considered manageable, and the entity is normally of sufficient size to have
some influence in its industry.

Money Market Funds -- Page 54

Texas	20.62	%
Florida	13.19
Maryland	5.70
Ohio	4.92
South Carolina	4.65
District of Columbia	4.21
Arizona	4.07
Nevada	3.86
Pennsylvania	3.33
Utah	3.15
Other states	30.51
Other assets less liabilities	1.79

Financial statements

Statement of assets and liabilities
at September 30, 2006	(dollars and shares in thousands, except per-share amounts)

Assets:
Investment securities at market (cost: $480,728)						$	480,762
Cash							1,065
Receivables for:
Sales of fund's shares			$	6,170
Interest				2,425			8,595
							490,422
Liabilities:
Payables for:
Repurchases of fund's shares				579
Dividends on fund's shares				120
Investment advisory services				137
Services provided by affiliates				40
Deferred trustees' compensation				43			919
Net assets at September 30, 2006						$	489,503

Net assets consist of:
Capital paid in on shares of
beneficial interest						$	489,553
Distributions in excess of
net investment income							(84	)
Net unrealized appreciation							34
Net assets at September 30, 2006						$	489,503

Shares of beneficial interest issued and outstanding - unlimited shares authorized (489,561 total shares outstanding)
		Net assets		Shares outstanding			Net asset value per share

Class A	$	459,598		459,652		$	1.00
Class R-5		29,905		29,909			1.00


See Notes to Financial Statements

Statement of operations					(dollar in thousands)
for the year ended September 30, 2006
Investment income:
Income:
Interest						$	14,354
Fees and expenses*:
Investment advisory services			$	1,693
Distribution services				179
Transfer agent services				134
Administrative services				39
Reports to shareholders				20
Registration statement and prospectus				94
Postage, stationery and supplies				31
Trustees' compensation				37
Auditing and legal				46
Custodian				17
State and local taxes				6
Other				25
Total fees and expenses before waivers				2,321
Less waivers of fees and expenses:
Investment advisory services				169
Total fees and expenses after waivers							2,152
Net investment income							12,202


Net unrealized appreciation on investments							70

Net increase in net assets resulting
from operations						$	12,272

* 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 September 30
				2006			2005
Operations:
Net investment income			$	12,202		$	6,680
Net unrealized appreciation (depreciation)
on investments				70			(14	)
Net increase in net assets
resulting from operations				12,272			6,666

Dividends paid or accrued to
shareholders from net investment income				(12,198	)		(6,680	)

Capital share transactions				57,467			(7,085	)

Total increase (decrease) in net assets				57,541			(7,099	)

Net assets:
Beginning of year				431,962			439,061
End of year			$	489,503		$	431,962


See Notes to Financial Statements

		(dollars in thousands)
Undistributed tax-exempt income			$168
Short-term loss carryforwards*:
Expiring 2007	$(18)
Expiring 2008	(39)
Expiring 2009	(27)
Expiring 2010	(2)
Expiring 2011	(3)		(89)
Gross unrealized appreciation on investment securities			48
Gross unrealized depreciation on investment securities			(14)
Net unrealized appreciation on investment securities			34
Cost of investment securities			480,728

* Reflects the expiration of short-term loss carryforwards of $5,000. The short-term loss carryforwards will be used to offset any short-term gains realized by the fund in future years through the expiration dates. The fund will not make distributions from short-term gains while capital loss carryforwards remain.

Share class	Year ended September 30, 2006		Year ended September 30, 2005
Class A	$	11,326	$	6,341
Class R-5		872		339
Total	$	12,198	$	6,680

Share class	Sales*				Reinvestments of dividends				Repurchases*						Net increase (decrease)
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended September 30, 2006
Class A	$	533,241		533,241	$	10,499		10,499	$	(488,773	)		(488,773	)	$	54,967			54,967
Class R-5		118,671		118,671		453		453		(116,624	)		(116,624	)		2,500			2,500
Total net increase
(decrease)	$	651,912		651,912	$	10,952		10,952	$	(605,397	)		(605,397	)	$	57,467			57,467

Year ended September 30, 2005
Class A	$	471,962		471,962	$	5,922		5,922	$	(490,910	)		(490,910	)	$	(13,026	)		(13,026	)
Class R-5		98,533		98,533		199		199		(92,791	)		(92,791	)		5,941			5,941
Total net increase
(decrease)	$	570,495		570,495	$	6,121		6,121	$	(583,701	)		(583,701	)	$	(7,085	)		(7,085	)

* Includes exchanges between share classes of the fund.


	Principal		Market
	amount		value
Short-term securities - 98.21%	(000)		(000)

Alaska - 0.33%
City of Valdez, Marine Terminal Rev. Ref. Bonds (BP Pipelines (Alaska) Inc. Project), Series 2003-A, 3.85% 2037 (1)	$	1,600	$	1,600

Arizona - 4.07%
Salt River Project Agricultural Improvement & Power Dist., TECP:
Series B:
3.53% 10/5/06		3,000		3,000
3.55% 10/13/06		1,000		1,000
3.52% 11/3/06		2,500		2,500
3.52% 11/6/06		5,500		5,500
3.50% 11/9/06		6,900		6,899
Series C, 3.49% 10/12/06		1,000		1,000

Colorado - 2.06%
General Fund Tax and Rev. Anticipation Notes, Series 2006-A, 4.50% 6/27/07		10,000		10,068

Connecticut - 0.61%
Health and Educational Facs. Auth. Rev. Bonds (Yale University Issue), Series S-2, TECP:
3.53% 10/5/06		1,000		1,000
3.55% 10/17/06		2,000		2,000

District of Columbia - 4.21%
Multimodal G.O. Ref. Bonds, Series 2002-D, MBIA insured, 3.75% 2031 (1)		2,200		2,200
Multimodal Rev. Bonds (American National Red Cross Issue), Series 2000, TECP:
3.55% 10/3/06		4,000		4,000
3.50% 10/11/06		3,400		3,400
3.55% 10/17/06		5,000		5,000
3.53% 11/2/06		6,000		6,000

Florida - 13.19%
Indian River County Hospital Dist., Hospital Rev. Bonds, TECP, 3.63% 10/2/06		1,000		1,000
Jacksonville Electric Auth., Rev. Bonds, Series 2001-C, TECP, 3.50% 11/14/06		2,000		2,000
Local Government Fin. Commission, Pooled Notes, Series 1991-A, TECP:
3.54% 10/4/06		6,000		6,000
3.55% 10/31/06		8,200		8,200
Miami-Dade County, Aviation Notes (Miami International Airport), Series A, AMT, TECP, 3.60% 10/2/06		5,000		5,000
Orlando Utilities Commission, Utility System Rev. Ref. Bonds, Series 1992, 5.80% 10/1/06		6,030		6,031
School Dist. of Palm Beach County, Sales Tax Rev. Notes, Series 2005, TECP, 3.53% 10/3/06		4,000		4,000
Pinellas County Educational Facs. Auth., Program Rev. Ref. Bonds, Pooled Independent Higher Education Institutions Loan Program, Series 1985, TECP:
3.58% 10/17/06		4,800		4,800
3.53% 11/6/06		4,000		4,000
Sarasota County Public Hospital Dist., Hospital Rev. Bonds (Sarasota Memorial Hospital Project), Series 1985-C, TECP:
3.60% 10/5/06		2,400		2,400
3.50% 11/3/06		6,250		6,250
Sunshine State Governmental Fncg. Commission, Rev. Notes, Series 2000-D, AMBAC/FGIC/CIFG insured, TECP:
3.53% 10/3/06		1,240		1,240
3.55% 10/16/06		8,500		8,500
3.50% 11/8/06		5,150		5,150

Georgia - 0.41%
City of Atlanta, Water and Wastewater Rev. Notes, Series 2006-1, TECP, 3.62% 10/30/06		2,000		2,000

Idaho - 2.38%
Tax Anticipation Notes, Series 2006, 4.50% 6/29/07		11,560		11,643

Indiana - 1.23%
Indianapolis Airport Auth., AMT, TECP:
3.59% 10/3/06		2,000		2,000
3.53% 11/14/06		4,000		4,000

Kentucky - 2.96%
Regional Airport Auth. of Louisville and Jefferson County, Special Facs. Rev. Bonds, UPS Worldwide Forwarding, Inc. Project, Series 1999-A, AMT, 3.88% 2029 (1)		2,200		2,200
Pendleton County, Money Market Municipal Multi-County Lease Rev. Bonds, Kentucky Assn. of Counties Leasing Trust Program, Series 1989, TECP:
3.60% 10/3/06		6,300		6,300
3.55% 10/6/06		6,000		6,000

Maryland - 5.70%
Baltimore County, Consolidated Public Improvement Bond Anticipation Notes, Series 1995, TECP, 3.58% 10/2/06		1,500		1,500
Health and Educational Facs. Auth., Commercial Paper Rev. Notes (Johns Hopkins University Issue):
Series A:
3.55% 10/3/06		2,800		2,800
3.50% 10/6/06		5,500		5,500
3.50% 11/6/06		3,700		3,700
3.50% 11/13/06		6,000		5,999
Series 2001-B, 3.48% 10/18/06		2,000		2,000
Howard County, Consolidated Public Improvement Bond Anticipation Notes, Series 2006-D, TECP, 3.50% 10/6/06		6,400		6,400

Massachusetts - 1.53%
G.O. Ref. Bonds (Demand Bonds), TECP:
Series 2001-H, 3.50% 10/11/06		2,000		2,000
Series H, 3.51% 10/5/06		3,000		3,000
Health and Educational Facs. Auth., Rev. Notes (Harvard University Issue), Series 2002-EE, TECP, 3.50% 10/12/06		2,500		2,500

Michigan - 0.74%
State Building Auth., Rev. Bonds (Facs. Program), Series 1996-I, AMBAC insured, 6.00% 10/1/06		2,500		2,500
Regents of the University of Michigan, Series F, TECP, 3.55% 10/3/06		1,135		1,135

Minnesota - 1.65%
City of Rochester, Health Care Facs. Rev. Bonds (Mayo Foundation/Mayo Medical Center), TECP:
Series 2000-B, 3.50% 10/10/06		4,500		4,500
Series 2001-A, 3.58% 11/7/06		3,600		3,600

Missouri - 0.29%
Curators of the University of Missouri, Systems Facs. Demand Rev. Bonds, Series 2001-A, 3.89% 2031 (1)		1,400		1,400

Nevada - 3.86%
Las Vegas Valley Water Dist., G.O. Limited Tax Water Notes (SNWA Rev. Supported), Series 2004-A, TECP:
3.50% 11/14/06		5,900		5,899
3.50% 11/16/06		8,400		8,399
3.50% 11/20/06		4,600		4,599

New Mexico - 2.06%
Tax and Rev. Anticipation Notes, Series 2006, 4.50% 6/29/07		10,000		10,070

North Carolina - 2.53%
Capital Facs. Fin. Agcy. (Duke University Issue), TECP:
Series A-1:
3.58% 10/2/06		3,000		3,000
3.52% 11/6/06		3,724		3,724
3.50% 11/8/06		2,212		2,212
Series A-2, 3.53% 11/7/06		1,775		1,775
Halifax County Industrial Facs. and Pollution Control Fncg. Auth., Demand Exempt Fac. Rev. Bonds (Westmoreland-Hadson Partners Roanoke Valley Project), Series 1991, AMT, 3.93% 2019 (1)		1,700		1,700

Ohio - 4.92%
Higher Education Capital Facs. Bonds:
Series II-2001-A, MBIA insured, 5.25% 12/1/06		8,500		8,524
Series II-2002-A, 5.25% 12/1/06		1,250		1,253
Ohio State University, General Receipts Notes, TECP:
Series 2003-C:
3.50% 10/23/06		5,000		5,000
3.50% 10/24/06		5,000		5,000
Series 2003-G:
3.50% 10/10/06		2,825		2,825
3.55% 10/10/06		1,500		1,500

Pennsylvania - 3.33%
Erie City Water Auth. (Erie County), Demand Rev. Bonds, Series 2006-A, FSA insured, 3.78% 2036 (1)		6,620		6,620
Montgomery County Industrial Dev. Auth., Pollution Control Rev. Ref. Bonds (PECO Energy Co. Project), TECP:
Series 1994-A, 3.55% 10/19/06		3,700		3,700
Series 2001-A, AMT, 3.53% 10/4/06		3,000		3,000
Venango Industrial Dev. Auth., Resource Recovery Rev. Bonds (Scrubgrass Project), Series 1990-B, AMT, 3.53% 10/4/06		3,000		3,000

South Carolina - 4.65%
Florence County, Solid Waste Disposal and Wastewater Treatment Facs. Rev. Bonds (Roche Carolina Inc. Project), Series 1997, AMT, 3.91% 2027 (1)		1,300		1,300
Public Service Auth. (Santee Cooper), Rev. Notes, TECP:
3.50% 10/11/06		2,470		2,470
3.50% 10/18/06		4,000		4,000
3.52% 11/3/06		1,108		1,108
3.50% 11/9/06		8,100		8,099
3.50% 11/14/06		5,800		5,799

Texas - 20.62%
City of El Paso, Water and Sewer Notes, Series 1998-A, TECP:
3.52% 10/10/06		5,175		5,175
3.58% 10/10/06		4,750		4,750
Harris County, Unlimited Notes:
Series C, TECP:
3.55% 10/13/06		9,865		9,865
3.50% 10/20/06		4,100		4,100
3.55% 10/20/06		740		740
3.59% 11/7/06		1,800		1,800
Series D, 3.55% 10/13/06		1,860		1,860
City of Houston, TECP:
Airport System Notes, Series A, AMT, 3.50% 10/16/06		5,000		5,000
G.O. Notes:
Series D:
3.50% 10/12/06		2,000		2,000
3.55% 10/17/06		1,500		1,500
3.50% 11/16/06		3,000		3,000
Series E, 3.50% 11/15/06		7,500		7,499
Hotel Occupancy Tax and Parking Rev. Notes, Series A:
3.58% 10/2/06		4,600		4,600
3.50% 11/8/06		2,600		2,600
Public Fin. Auth., G.O. Bonds (Colonia Roadway Projects), Series 2002-A, TECP:
3.50% 11/16/06		3,000		3,000
3.50% 11/20/06		2,700		2,700
City of San Antonio, TECP:
Electric and Gas Systems Notes:
3.53% 10/3/06		3,000		3,000
3.50% 11/16/06		2,050		2,050
Water System Notes:
Series A:
3.50% 10/11/06		2,000		2,000
3.50% 11/14/06		2,000		2,000
3.50% 11/20/06		7,000		6,999
Series 2001:
3.55% 10/13/06		2,000		2,000
3.52% 11/3/06		2,200		2,200
3.50% 11/9/06		4,000		4,000
Unemployment Compensation Obligation Assessment, Rev. Bonds, Series 2003-C-4, TECP, 3.55% 10/11/06		5,500		5,500
Board of Regents of the University of Texas System, Rev. Fncg. System Notes, Series A, TECP:
3.55% 10/17/06		5,000		5,000
3.53% 11/2/06		6,000		6,000

Utah - 3.15%
Intermountain Power Agcy., Power Supply Rev. and Ref. Bonds, Series 1997-B-2, TECP:
3.50% 10/4/06		3,900		3,900
3.50% 10/6/06		1,000		1,000
3.46% 10/12/06		2,500		2,500
3.49% 10/12/06		4,700		4,700
3.55% 10/13/06		1,000		1,000
3.55% 10/16/06		2,300		2,300

Virginia - 2.86%
Metropolitan Washington Airports Auth., Flexible Term PFC Rev. Notes, Series 2005-B, AMT, TECP:
3.53% 10/12/06		5,000		5,000
3.53% 11/13/06		9,000		8,999

Washington - 2.69%
City of Seattle, Municipal Light and Power Improvement and Rev. Ref. Bonds, Series 2003, FSA insured, 5.00% 11/1/06		7,000		7,009
Port of Seattle, Rev. Notes, Series B-1, AMT, TECP:
3.55% 11/1/06		5,000		5,000
3.55% 11/8/06		1,175		1,175

West Virginia - 2.84%
Public Energy Auth., Energy Rev. Bonds (Morgantown Energy Assn. Project), Series 1989-A, AMT, TECP:
3.63% 10/2/06		7,000		7,000
3.55% 11/1/06		2,900		2,900
3.55% 11/7/06		4,000		4,000

Wisconsin - 1.76%
G.O. Notes, Series 2006-A, TECP, 3.53% 10/5/06		6,000		6,000
Transportation Rev. Notes, Series 1997-A, TECP, 3.50% 11/8/06		2,600		2,600

Wyoming - 1.58%
Sweetwater County, Customized Purchase Pollution Control Rev. Ref. Bonds (PacifiCorp. Project), Series 1988-A, TECP:
3.58% 10/2/06		2,500		2,500
3.50% 11/8/06		5,250		5,250



Total investment securities (cost: $480,728,000)				480,762
Other assets less liabilities				8,741

Net assets			$	489,503


(1) Coupon rate may change periodically; the date of the next scheduled coupon rate change is considered to be the maturity date.



Key to Abbreviations

Agcy. = Agency
AMT = Alternative Minimum Tax
Auth. = Authority
Certs. of Part. = Certificates of Participation
Dept. = Department
Dev. = Development
Dist. = District
Econ. = Economic
Fac. = Facility
Facs. = Facilities
Fin. = Finance
Fncg. = Financing
G.O. = General Obligation
Preref. = Prerefunded
Redev. = Redevelopment
Ref. = Refunding
Rev. = Revenue
TECP = Tax-Exempt Commercial Paper


See Notes to Financial Statements

Financial highlights (1)

	Net asset value, beginning of period		Net investment income (2)		Dividends from net investment income			Net asset value, end of period		Total return			Net assets, end of period (in millions)		Ratio of expenses to average net assets before waivers			Ratio of expenses to average net assets after waivers (3)			Ratio of net income to average net assets
Class A:
Year ended 9/30/2006	$	1.00	$	.027	$	(.027	)	$	1.00		2.76	%	$	460		.52	%		.48	%		2.73	%
Year ended 9/30/2005		1.00		.016		(.016	)		1.00		1.63			405		.53			.50			1.61
Year ended 9/30/2004		1.00		.005		(.005	)		1.00		.49			418		.53			.53			.49
Year ended 9/30/2003		1.00		.006		(.006	)		1.00		.57			353		.55			.55			.57
Year ended 9/30/2002		1.00		.010		(.010	)		1.00		1.05			341		.54			.54			1.04
Class R-5:
Year ended 9/30/2006		1.00		.027		(.027	)		1.00		2.72			30		.56			.52			2.69
Year ended 9/30/2005		1.00		.016		(.016	)		1.00		1.59			27		.56			.53			1.63
Year ended 9/30/2004		1.00		.005		(.005	)		1.00		.45			21		.57			.57			.47
Year ended 9/30/2003		1.00		.005		(.005	)		1.00		.54			10		.58			.58			.55
Period from 7/15/2002 to 9/30/2002		1.00		.002		(.002	)		1.00		.17			10		.12			.12			.17



(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) The ratios in this column reflect the impact, if any, of certain waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes.