SEC. File Nos.  033-80630

811-08576

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________

FORM N-1A

Registration Statement

Under

the Securities Act of 1933

Post-Effective Amendment No. 23

and

Registration Statement

Under

The Investment Company Act of 1940

Amendment No. 25

____________

AMERICAN HIGH-INCOME MUNICIPAL BOND FUND, INC.

(Exact Name of Registrant as Specified in Charter)

333 South Hope Street

Los Angeles, California 90071-1447

(Address of Principal Executive Offices)

Registrant's telephone number, including area code:

(213) 486-9200

____________

KIMBERLY S. VERDICK, Secretary

American High-Income Municipal Bond Fund, Inc.

333 South Hope Street

Los Angeles, California 90071-1447

(Name and Address of Agent for Service)

____________

Copies to:

Michael Glazer

Bingham McCutchen LLP

 355 South Grand Avenue, Suite 4400

Los Angeles, CA 90071-3106

(Counsel for the Registrant)

____________

Approximate date of proposed public offering:

It is proposed that this filing will become effective on November 1, 2009, pursuant to paragraph (b) of rule 485.

...

<PAGE>





[logo - American Funds /(R)/]                The right choice for the long term/(R)/



The Tax-Exempt Bond Fund of America/(R)/
American High-Income Municipal Bond Fund/(R)/
Limited Term Tax-Exempt Bond Fund of America/SM/
The Tax-Exempt Fund of California/(R)/
American Funds Short-Term Tax-Exempt Bond Fund/SM/




                                                  TICKER
                              -------------------------------------------------

                                                                     CLASS F-2
                              CLASS A  CLASS B  CLASS C  CLASS F-1
THE TAX-EXEMPT BOND FUND OF    AFTEX    TEBFX    TEBCX     AFTFX       TEAFX
AMERICA
AMERICAN HIGH-INCOME           AMHIX    ABHMX    AHICX     ABHFX       AHMFX
MUNICIPAL BOND FUND ........
LIMITED TERM TAX-EXEMPT BOND   LTEBX    LTXBX    LTXCX     LTXFX       LTEFX
FUND OF AMERICA.............
THE TAX-EXEMPT FUND OF         TAFTX    TECBX    TECCX     TECFX       TEFEX
CALIFORNIA..................
AMERICAN FUNDS SHORT-TERM      ASTEX     N/A      N/A      FSTTX       ASTFX
TAX-EXEMPT BOND FUND........





 PROSPECTUS







 November 1, 2009







TABLE OF CONTENTS

 1   Summaries
     The Tax-Exempt Bond Fund of America
     American High-Income Municipal Bond Fund
     Limited Term Tax-Exempt Bond Fund of America
     The Tax-Exempt Fund of California
     American Funds Short-Term Tax-Exempt Bond Fund
33   Tax information
33   Payments to broker-dealers and other financial
     intermediaries
34   Investment objectives, strategies and risks
38   Additional investment results
43   Management and organization
48   Shareholder information
49   Choosing a share class
53   Purchase, exchange and sale of shares
58   Sales charges
61   Sales charge reductions and waivers
65   Rollovers from retirement plans to IRAs
66   Plans of distribution
67   Other compensation to dealers
68   How to sell shares
70   Distributions and taxes
72   Financial highlights
81   Appendix



 THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED OF
 THESE SECURITIES. FURTHER, IT HAS NOT DETERMINED THAT THIS PROSPECTUS IS
 ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
 OFFENSE.


<PAGE>

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

<PAGE>

The Tax-Exempt Bond Fund of America

Investment objective

The fund's investment objective is to provide you with a high level of current
income exempt from federal income tax, consistent with the preservation of
capital.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for sales charge discounts if you and your
family invest, or agree to invest in the future, at least $100,000 in American
Funds. More information about these and other discounts is available from your
financial professional and in the "Sales charge reductions and waivers" section
on page 61 of the prospectus and on page 71 of the fund's statement of
additional information.




 SHAREHOLDER FEES
 (fees paid directly from your investment)
                                                       SHARE CLASSES
                                                ------------------------------
                                                                        F-1
                                                  A      B      C     AND F-2
------------------------------------------------------------------------------

 Maximum sales charge (load) imposed on         3.75%   none   none     none
 purchases (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum deferred sales charge (load)                  5.00%  1.00%     none
 (as a percentage of the amount redeemed)        none
------------------------------------------------------------------------------
 Maximum sales charge (load) imposed on          none   none   none     none
 reinvested dividends
------------------------------------------------------------------------------
 Redemption or exchange fees                     none   none   none     none







 ANNUAL FUND OPERATING EXPENSES
 (expenses that you pay each year as a percentage of the value of your
 investment)
-------------------------------------------------SHARE CLASSES-----------------

                                  ---A--------B--------C-------F-1-------F-2---

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

 Management fees                   0.27%    0.27%    0.27%    0.27%     0.27%
-------------------------------------------------------------------------------
 Distribution and/or service       0.25     1.00     1.00     0.24      none
 (12b-1) fees
-------------------------------------------------------------------------------
 Other expenses                    0.04     0.05     0.09     0.14      0.12
-------------------------------------------------------------------------------
 Total annual fund operating       0.56     1.32     1.36     0.65      0.39
 expenses





                                       1

                                           Tax-exempt income funds / Prospectus
<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that all
dividends and capital gain distributions are reinvested, that you pay the
maximum initial or contingent deferred sales charge, and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:





 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 A                                $430    $548     $676      $1,050
---------------------------------------------------------------------
 B                                 634     818      923       1,381
---------------------------------------------------------------------
 C                                 238     431      745       1,635
---------------------------------------------------------------------
 F-1                                66     208      362         810
---------------------------------------------------------------------
 F-2                                40     125      219         493
---------------------------------------------------------------------




For the share classes listed below, you would pay the following if you did not
redeem your shares:




 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 B                                $134    $418     $723      $1,381
---------------------------------------------------------------------
 C                                 138     431      745       1,635
---------------------------------------------------------------------




PORTFOLIO TURNOVER

The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate was 18%
of the average value of its portfolio.

Principal investment strategies

The fund seeks to achieve its objective by investing primarily in municipal
bonds.

Under normal circumstances, the fund will invest at least 80% of its assets in,
or derive at least 80% of its income from, securities that are exempt from
regular federal income tax. The fund will not invest in securities that subject
you to federal alternative minimum tax. The fund invests substantially in debt
securities rated A- or better by Standard & Poor's Corporation or A3 or better
by Moody's Investors Service, or unrated but determined by the fund's investment
adviser to be of equivalent quality. The fund also invests in debt secu-


                                       2

Tax-exempt income funds / Prospectus


<PAGE>


rities rated BBB+ or below and Baa1 or below (including those rated Ba1 or below
and BB+ or below) or unrated but determined by the fund's investment adviser to
be of equivalent quality. Securities rated Ba1 or below and BB+ or below are
sometimes referred to as "junk bonds."

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively priced
securities that, in its opinion, represent above-average, long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is by analyzing various factors, which may include the credit
strength of the issuer, prices of similar securities issued by comparable
issuers, current and anticipated changes in interest rates, general market
conditions and other factors pertinent to the particular security being
evaluated. Securities may be sold when the investment adviser believes that they
no longer represent relatively attractive investment opportunities. The
investment adviser uses a system of multiple portfolio counselors in managing
the fund's assets. Under this approach, the portfolio of the fund is divided
into segments managed by individual counselors who decide how their respective
segments will be invested.

Principal risks

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

The prices of, and the income generated by, the securities held by the fund may
decline in response to certain events taking place around the world, including
those directly involving the issuers whose securities are owned by the fund;
conditions affecting the general economy; overall market changes; local,
regional or global political, social or economic instability; governmental or
governmental agency responses to economic conditions; and currency, interest
rate and commodity price fluctuations.

The values of, and the income generated by, most debt securities held by the
fund may be affected by changing interest rates and by changes in the effective
maturities and credit ratings of these securities. For example, the values of
debt securities in the fund's portfolio generally will decline when interest
rates rise and increase when interest rates fall. In addition, falling interest
rates may cause an issuer to redeem, "call" or refinance a security before its
stated maturity, which may result in the fund having to reinvest the proceeds in
lower yielding securities.

Changes in the credit quality of banks and financial institutions providing
credit and liquidity enhancements could cause the fund to experience a loss and
may affect its share price.


                                       3

                                           Tax-exempt income funds / Prospectus
<PAGE>


Debt securities are also subject to credit risk, which is the possibility that
the credit strength of an issuer will weaken and/or an issuer of a debt security
will fail to make timely payments of principal or interest and the security will
go into default. Lower quality debt securities generally have higher rates of
interest and may be subject to greater price fluctuations than higher quality
debt securities. In addition, longer maturity debt securities generally have
higher rates of interest and may be subject to greater price fluctuations than
shorter maturity debt securities. There may be little trading in the secondary
market for particular debt securities, which may make them more difficult to
value or sell.

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 5 shows how the fund's average annual total
returns for various periods compare with different broad measures of market
performance. This information provides some indication of the risks of investing
in the fund. Past results (before and after taxes) are not predictive of future
results. Updated information on the fund's results can be obtained by visiting
americanfunds.com.




CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999  -2.31%
2000   9.69
2001   5.57
2002   8.44
2003   5.18
2004   4.37
2005   3.35
2006   4.76
2007   1.72
2008  -7.10

[end bar chart]


Highest/Lowest quarterly results during this time period were:




HIGHEST                        4.09%  (quarter ended September 30, 2002)
LOWEST                        -3.66%  (quarter ended September 30, 2008)



The fund's total return for the nine months ended September 30, 2009, was
16.38%.


                                       4

Tax-exempt income funds / Prospectus


<PAGE>




 AVERAGE ANNUAL TOTAL RETURNS
 FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITH MAXIMUM SALES CHARGE):
 SHARE CLASS                INCEPTION DATE      1 YEAR   5 YEARS  10 YEARS   LIFETIME
--------------------------------------------------------------------------------------

 A - Before taxes              10/3/79          -10.60%   0.55%    2.87%      6.57%
 - After taxes on                               -10.60    0.55     2.85        N/A
 distributions
 - After taxes on distributions and sale of      -5.47    1.11     3.10        N/A
 fund shares






 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR   5 YEARS   LIFETIME
--------------------------------------------------------------------------

 B                               3/15/00      -12.24%   0.23%     3.17%
--------------------------------------------------------------------------
 C                               3/15/01       -8.73    0.50      2.14
--------------------------------------------------------------------------
 F-1                             3/15/01       -7.17    1.23      2.87
--------------------------------------------------------------------------






 INDEXES/1/ (before taxes)         1 YEAR   5 YEARS   10 YEARS    LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal Bond   -2.47%    2.71%      4.26%         N/A
Index
 Lipper General Municipal Debt     -9.09     0.60       2.50         6.29%
Funds Average
 Class A annualized 30-day yield at August 31, 2009: 3.47%
 (For current yield information, please call American FundsLine/(R)/ at
800/325-3590.)




1 The Barclays Capital Municipal Bond Index (formerly Lehman Brothers Municipal
 Bond Index) is a gauge of the long-term tax-exempt bond market and reflects a
 portion of the fixed-income securities in which the fund may invest. Lipper
 General Municipal Debt Funds Average includes the fund and other funds that
 disclose investment objectives that are reasonably comparable to the fund's
 objective. See page 38 of this prospectus for more information on the indexes
 listed above.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes. Your actual
after-tax returns depend on your individual tax situation and likely will differ
from the results shown above.


                                       5

                                           Tax-exempt income funds / Prospectus
<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:





 PORTFOLIO COUNSELOR/    PORTFOLIO COUNSELOR   PRIMARY TITLE
 FUND TITLE (if              EXPERIENCE        WITH INVESTMENT ADVISER
 applicable)                IN THIS FUND       (or one of its divisions)
-------------------------------------------------------------------------------

 BRENDA S. ELLERIN            11 years         Senior Vice President - Fixed
 Senior Vice President                         Income,
                                               Capital Research and Management
                                               Company
-------------------------------------------------------------------------------
 NEIL L. LANGBERG             30 years         Senior Vice President - Fixed
 President and Director                        Income,
                                               Capital Research and Management
                                               Company
-------------------------------------------------------------------------------
 KARL J. ZEILE                 6 years         Senior Vice President - Fixed
                                               Income, Capital Research and
                                               Management Company




Purchase and sale of fund shares




 PURCHASE MINIMUMS (for all share classes)
---------------------------------------------------------

 TO ESTABLISH AN ACCOUNT                           $250
 TO ADD TO AN ACCOUNT                                50




You may sell (redeem) shares through your dealer or financial adviser or by
writing to American Funds Service Company at P.O. Box 6007, Indianapolis, IN
46206-6007; telephoning (800/421-0180); faxing (317/735-6636) American Funds
Service Company; or accessing our website (americanfunds.com).

For important information about tax information and financial intermediary
compensation, please turn to the sections titled "Tax information" and "Payments
to broker-dealers and other financial intermediaries" on page 33.


                                       6

Tax-exempt income funds / Prospectus


<PAGE>

American High-Income Municipal Bond Fund

Investment objective

The fund's investment objective is to provide you with a high level of current
income exempt from regular federal income tax.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for sales charge discounts if you and your
family invest, or agree to invest in the future, at least $100,000 in American
Funds. More information about these and other discounts is available from your
financial professional and in the "Sales charge reductions and waivers" section
on page 61 of the prospectus and on page 71 of the fund's statement of
additional information.



 SHAREHOLDER FEES
 (fees paid directly from your investment)
                                                       SHARE CLASSES
                                                ------------------------------
                                                                        F-1
                                                  A      B      C     AND F-2
------------------------------------------------------------------------------

 Maximum sales charge (load) imposed on         3.75%   none   none     none
 purchases (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum deferred sales charge (load)                  5.00%  1.00%     none
 (as a percentage of the amount redeemed)        none
------------------------------------------------------------------------------
 Maximum sales charge (load) imposed on          none   none   none     none
 reinvested dividends
------------------------------------------------------------------------------
 Redemption or exchange fees                     none   none   none     none







 ANNUAL FUND OPERATING EXPENSES
 (expenses that you pay each year as a percentage of the value of your
 investment)
-------------------------------------------------SHARE CLASSES-----------------

                                  ---A--------B--------C-------F-1-------F-2---

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

 Management fees                   0.36%    0.36%    0.36%    0.36%     0.36%
-------------------------------------------------------------------------------
 Distribution and/or service       0.26     1.00     1.00     0.25      none
 (12b-1) fees
-------------------------------------------------------------------------------
 Other expenses                    0.10     0.10     0.15     0.19      0.17*
-------------------------------------------------------------------------------
 Total annual fund operating       0.72     1.46     1.51     0.80      0.53
 expenses





                                       7

                                           Tax-exempt income funds / Prospectus
<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that all
dividends and capital gain distributions are reinvested, that you pay the
maximum initial or contingent deferred sales charge, and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:





 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 A                                $446    $597     $761      $1,236
---------------------------------------------------------------------
 B                                 649     862      997       1,545
---------------------------------------------------------------------
 C                                 254     477      824       1,802
---------------------------------------------------------------------
 F-1                                82     255      444         990
---------------------------------------------------------------------
 F-2*                               54     170      296         665
---------------------------------------------------------------------




For the share classes listed below, you would pay the following if you did not
redeem your shares:




 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 B                                $149    $462     $797      $1,545
---------------------------------------------------------------------
 C                                 154     477      824       1,802
---------------------------------------------------------------------



* Amount is based on annualized expenses for a partial year.

PORTFOLIO TURNOVER

The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate was 29%
of the average value of its portfolio.

Principal investment strategies

In seeking to achieve its objective, the fund may forego opportunities that
would result in capital gains and may accept prudent risks to capital value, in
each case to take advantage of opportunities for higher current income.

Under normal circumstances, the fund will invest at least 80% of its assets in,
or derive at least 80% of its income from, securities that are exempt from
regular federal income tax. The fund may invest, without limitation, in
securities that may subject you to federal alter-


                                       8

Tax-exempt income funds / Prospectus


<PAGE>


native minimum tax. The fund invests a significant portion of its portfolio in
municipal bonds rated BBB+ or below or Baa1 or below or unrated but determined
by the fund's investment adviser to be of equivalent quality. Securities rated
Ba1 or below and BB+ or below are sometimes referred to as "junk bonds."

In addition, the fund may invest significantly in municipal obligations of
issuers in the same state or of similar project type.

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively priced
securities that, in its opinion, represent above-average, long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is by analyzing various factors, which may include the credit
strength of the issuer, prices of similar securities issued by comparable
issuers, current and anticipated changes in interest rates, general market
conditions and other factors pertinent to the particular security being
evaluated. Securities may be sold when the investment adviser believes that they
no longer represent relatively attractive investment opportunities. The
investment adviser uses a system of multiple portfolio counselors in managing
the fund's assets. Under this approach, the portfolio of the fund is divided
into segments managed by individual counselors who decide how their respective
segments will be invested.

Principal risks

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

The prices of, and the income generated by, the securities held by the fund may
decline in response to certain events taking place around the world, including
those directly involving the issuers whose securities are owned by the fund;
conditions affecting the general economy; overall market changes; local,
regional or global political, social or economic instability; governmental or
governmental agency responses to economic conditions; and currency, interest
rate and commodity price fluctuations.

The values of, and the income generated by, most debt securities held by the
fund may be affected by changing interest rates and by changes in the effective
maturities and credit ratings of these securities. For example, the values of
debt securities in the fund's portfolio generally will decline when interest
rates rise and increase when interest rates fall. In addition, falling interest
rates may cause an issuer to redeem, "call" or refinance a security before its
stated maturity, which may result in the fund having to reinvest the proceeds in
lower yielding securities.


                                       9

                                           Tax-exempt income funds / Prospectus
<PAGE>


Changes in the credit quality of banks and financial institutions providing
credit and liquidity enhancements could cause the fund to experience a loss and
may affect its share price.

Debt securities are also subject to credit risk, which is the possibility that
the credit strength of an issuer will weaken and/or an issuer of a debt security
will fail to make timely payments of principal or interest and the security will
go into default. Lower quality debt securities generally have higher rates of
interest and may be subject to greater price fluctuations than higher quality
debt securities. In addition, longer maturity debt securities generally have
higher rates of interest and may be subject to greater price fluctuations than
shorter maturity debt securities. There may be little trading in the secondary
market for particular debt securities, which may make them more difficult to
value or sell.

Investing significantly in municipal obligations of issuers in the same state or
similar project type may make the fund more susceptible to certain economic,
political or regulatory occurrences. As a result, the potential for fluctuations
in the fund's share price may increase.

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

Investment results

The bar chart on page 11 shows how the fund's investment results have varied
from year to year, and the table on page 11 shows how the fund's average annual
total returns for various periods compare with different broad measures of
market performance. This information provides some indication of the risks of
investing in the fund. Past results (before and after taxes) are not predictive
of future results. Updated information on the fund's results can be obtained by
visiting americanfunds.com.


                                       10

Tax-exempt income funds / Prospectus


<PAGE>

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999  -2.31%
2000   7.31
2001   6.22
2002   6.24
2003   6.24
2004   5.66
2005   4.68
2006   6.38
2007  -0.81
2008 -19.40

[end bar chart]


Highest/Lowest quarterly results during this time period were:




HIGHEST                         3.12%  (quarter ended September 30, 2004)
LOWEST                        -13.96%  (quarter ended December 31, 2008)



The fund's total return for the nine months ended September 30, 2009, was
25.30%.





 AVERAGE ANNUAL TOTAL RETURNS
 FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITH MAXIMUM SALES CHARGE):
 SHARE CLASS                INCEPTION DATE      1 YEAR   5 YEARS  10 YEARS   LIFETIME
--------------------------------------------------------------------------------------

 A - Before taxes              9/26/94          -22.40%  -1.97%    1.30%      3.65%
 - After taxes on                               -22.40   -1.97     1.30        N/A
 distributions
 - After taxes on distributions and sale of     -12.94   -0.85     1.90        N/A
 fund shares






 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR   5 YEARS   LIFETIME
--------------------------------------------------------------------------

 B                               3/15/00      -23.81%  -2.23%     1.48%
--------------------------------------------------------------------------
 C                               3/15/01      -20.79   -1.98      0.48
--------------------------------------------------------------------------
 F-1                             3/19/01      -19.44   -1.27      1.18
--------------------------------------------------------------------------






 INDEXES/1/ (before taxes)            1 YEAR   5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal Bond       -2.47%   2.71%    4.26%        5.45%
Index
 Lipper High Yield Municipal Debt     -25.11   -2.38     0.63         2.94
Funds Average
 Class A annualized 30-day yield at July 31, 2009: 5.06%
 (For current yield information, please call American FundsLine at
800/325-3590.)




1 The Barclays Capital Municipal Bond Index (formerly Lehman Brothers Municipal
 Bond Index) is a gauge of the long-term tax-exempt bond market and reflects a
 portion of the fixed-income securities in which the fund may invest. Lipper
 High Yield Municipal Debt Funds Average includes the fund and other funds that
 disclose investment objectives that are reasonably comparable to the fund's
 objective. See page 39 of this prospectus for more information on the indexes
 listed above.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.


                                       11

                                           Tax-exempt income funds / Prospectus
<PAGE>


After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes. Your actual
after-tax returns depend on your individual tax situation and likely will differ
from the results shown above.

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:





 PORTFOLIO COUNSELOR/    PORTFOLIO COUNSELOR   PRIMARY TITLE
 FUND TITLE (if              EXPERIENCE        WITH INVESTMENT ADVISER
 applicable)                IN THIS FUND       (or one of its divisions)
-------------------------------------------------------------------------------

 BRENDA S. ELLERIN            11 years         Senior Vice President - Fixed
 Vice President                                Income,
                                               Capital Research and Management
                                               Company
 NEIL L. LANGBERG             15 years         Senior Vice President - Fixed
 Senior Vice President                         Income,
                                               Capital Research and Management
                                               Company
 KARL J. ZEILE                 5 years         Senior Vice President - Fixed
 President                                     Income, Capital Research and
                                               Management Company





                                       12

Tax-exempt income funds / Prospectus


<PAGE>

Purchase and sale of fund shares



 PURCHASE MINIMUMS (for all share classes)
---------------------------------------------------------

 TO ESTABLISH AN ACCOUNT                           $250
 TO ADD TO AN ACCOUNT                                50



You may sell (redeem) shares through your dealer or financial adviser or by
writing to American Funds Service Company at P.O. Box 6007, Indianapolis, IN
46206-6007; telephoning (800/421-0180); faxing (317/735-6636) American Funds
Service Company; or accessing our website (americanfunds.com).

For important information about tax information and financial intermediary
compensation, please turn to the sections titled "Tax information" and "Payments
to broker-dealers and other financial intermediaries" on page 33.


                                       13

                                           Tax-exempt income funds / Prospectus
<PAGE>

Limited Term Tax-Exempt Bond Fund of America

Investment objective

The fund's investment objective is to provide you with current income that is
exempt from regular federal income tax, consistent with its maturity and quality
standards described in the prospectus, and preservation of capital.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for sales charge discounts if you and your
family invest, or agree to invest in the future, at least $500,000 in American
Funds. More information about these and other discounts is available from your
financial professional and in the "Sales charge reductions and waivers" section
on page 61 of the prospectus and on page 71 of the fund's statement of
additional information.



 SHAREHOLDER FEES
 (fees paid directly from your investment)
                                                       SHARE CLASSES
                                                ------------------------------
                                                                        F-1
                                                  A      B      C     AND F-2
------------------------------------------------------------------------------

 Maximum sales charge (load) imposed on         2.50%   none   none     none
 purchases (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum deferred sales charge (load)                  5.00%  1.00%     none
 (as a percentage of the amount redeemed)        none
------------------------------------------------------------------------------
 Maximum sales charge (load) imposed on          none   none   none     none
 reinvested dividends
------------------------------------------------------------------------------
 Redemption or exchange fees                     none   none   none     none







 ANNUAL FUND OPERATING EXPENSES
 (expenses that you pay each year as a percentage of the value of your
 investment)
-------------------------------------------------SHARE CLASSES-----------------

                                  ---A--------B--------C-------F-1-------F-2---

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

 Management fees                   0.29%    0.29%    0.29%    0.29%     0.29%
-------------------------------------------------------------------------------
 Distribution and/or service       0.30     1.00     1.00     0.25      none
 (12b-1) fees
-------------------------------------------------------------------------------
 Other expenses                    0.05     0.05     0.10     0.12      0.09*
-------------------------------------------------------------------------------
 Total annual fund operating       0.64     1.34     1.39     0.66      0.38
 expenses





                                       14

Tax-exempt income funds / Prospectus


<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that all
dividends and capital gain distributions are reinvested, that you pay the
maximum initial or contingent deferred sales charge, and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:





 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 A                                $314    $450     $598      $1,028
---------------------------------------------------------------------
 B                                 636     825      934       1,420
---------------------------------------------------------------------
 C                                 242     440      761       1,669
---------------------------------------------------------------------
 F-1                                67     211      368         822
---------------------------------------------------------------------
 F-2*                               39     122      213         480
---------------------------------------------------------------------




For the share classes listed below, you would pay the following if you did not
redeem your shares:




 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 B                                $136    $425     $734      $1,420
---------------------------------------------------------------------
 C                                 142     440      761       1,669
---------------------------------------------------------------------


* Amount is based on annualized expenses for a partial year.

PORTFOLIO TURNOVER

The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate was 7% of
the average value of its portfolio.

Principal investment strategies

The fund invests primarily in municipal bonds. Under normal circumstances, the
fund will invest at least 80% of its assets in, or derive at least 80% of its
income from, securities that are exempt from regular federal income tax and that
do not subject you to federal alternative minimum tax. The fund invests
primarily in municipal bonds with quality ratings of A- or better or A3 or
better or unrated but determined by the fund's investment adviser to be of
equivalent quality. The fund may also invest in municipal bonds in the


                                       15

                                           Tax-exempt income funds / Prospectus
<PAGE>


rating categories of BBB and Baa or unrated but determined by the fund's
investment adviser to be of equivalent quality. The dollar-weighted average
maturity of the fund's portfolio is between three and 10 years.

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively priced
securities that, in its opinion, represent above-average, long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is by analyzing various factors, which may include the credit
strength of the issuer, prices of similar securities issued by comparable
issuers, current and anticipated changes in interest rates, general market
conditions and other factors pertinent to the particular security being
evaluated. Securities may be sold when the investment adviser believes that they
no longer represent relatively attractive investment opportunities. The
investment adviser uses a system of multiple portfolio counselors in managing
the fund's assets. Under this approach, the portfolio of the fund is divided
into segments managed by individual counselors who decide how their respective
segments will be invested.

Principal risks

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

The prices of, and the income generated by, the securities held by the fund may
decline in response to certain events taking place around the world, including
those directly involving the issuers whose securities are owned by the fund;
conditions affecting the general economy; overall market changes; local,
regional or global political, social or economic instability; governmental or
governmental agency responses to economic conditions; and currency, interest
rate and commodity price fluctuations.

The values of, and the income generated by, most debt securities held by the
fund may be affected by changing interest rates and by changes in the effective
maturities and credit ratings of these securities. For example, the values of
debt securities in the fund's portfolio generally will decline when interest
rates rise and increase when interest rates fall. In addition, falling interest
rates may cause an issuer to redeem, "call" or refinance a security before its
stated maturity, which may result in the fund having to reinvest the proceeds in
lower yielding securities.

Changes in the credit quality of banks and financial institutions providing
credit and liquidity enhancements could cause the fund to experience a loss and
may affect its share price.

Debt securities are also subject to credit risk, which is the possibility that
the credit strength of an issuer will weaken and/or an issuer of a debt security
will fail to make timely


                                       16

Tax-exempt income funds / Prospectus


<PAGE>


payments of principal or interest and the security will go into default. Lower
quality debt securities generally have higher rates of interest and may be
subject to greater price fluctuations than higher quality debt securities. In
addition, longer maturity debt securities generally have higher rates of
interest and may be subject to greater price fluctuations than shorter maturity
debt securities. There may be little trading in the secondary market for
particular debt securities, which may make them more difficult to value or sell.


Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 18 shows how the fund's average annual total
returns for various periods compare with different broad measures of market
performance. This information provides some indication of the risks of investing
in the fund. Past results (before and after taxes) are not predictive of future
results. Updated information on the fund's results can be obtained by visiting
americanfunds.com.

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999  -0.60%
2000   7.45
2001   5.24
2002   7.81
2003   4.28
2004   2.77
2005   1.57
2006   3.61
2007   3.24
2008  -1.31

[end bar chart]


Highest/Lowest quarterly results during this time period were:




HIGHEST                  3.50%  (quarter ended September 30, 2002)
LOWEST                  -2.06%  (quarter ended June 30, 2004)



The fund's total return for the nine months ended September 30, 2009, was
10.08%.


                                       17

                                           Tax-exempt income funds / Prospectus
<PAGE>




 AVERAGE ANNUAL TOTAL RETURNS
 FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITH MAXIMUM SALES CHARGE):
 SHARE CLASS                INCEPTION DATE      1 YEAR  5 YEARS  10 YEARS   LIFETIME
-------------------------------------------------------------------------------------

 A - Before taxes              10/6/93          -3.77%   1.44%    3.11%      3.98%
 - After taxes on                               -3.77    1.44     3.11        N/A
 distributions
 - After taxes on distributions and sale of     -1.25    1.73     3.19        N/A
 fund shares






 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR  5 YEARS   LIFETIME
-------------------------------------------------------------------------

 B                               3/15/00      -6.76%   0.90%     3.18%
-------------------------------------------------------------------------
 C                               3/15/01      -3.00    1.18      2.33
-------------------------------------------------------------------------
 F-1                             3/15/01      -1.31    1.93      3.06
-------------------------------------------------------------------------






 INDEXES/1/ (before taxes)             1 YEAR  5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal
 Short-Intermediate                     4.76%   3.45%    4.38%        4.72%
 1-10 Years Index
 Barclays Capital (7-Year) Municipal    4.59    3.69     4.80         5.13
Bond Index
 Lipper Intermediate Municipal Debt    -1.79    1.86     3.37         4.10
Funds Average
 Class A annualized 30-day yield at July 31, 2009: 2.94%
 (For current yield information, please call American FundsLine at
800/325-3590.)




1 Barclays Capital Municipal Short-Intermediate 1-10 Years Index and Barclays
 Capital (7-Year) Municipal Bond Index (formerly Lehman Brothers (7-Year)
 Municipal Bond Index) reflect certain market sectors in which the fund may
 invest. The fund has selected Barclays Capital Municipal Short-Intermediate
 1-10 Years Index to replace Barclays Capital (7-Year) Municipal Bond Index as
 its broad-based securities market index. The fund's investment adviser believes
 Barclays Capital Municipal Short-Intermediate 1-10 Years Index better reflects
 the market sectors and securities in which the fund primarily invests. Lipper
 Intermediate Municipal Debt Funds Average includes the fund and other funds
 that disclose investment objectives that are reasonably comparable to the
 fund's primary objective. See page 40 of this prospectus for more information
 on the indexes listed above.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes. Your actual
after-tax returns depend on your individual tax situation and likely will differ
from the results shown above.


                                       18

Tax-exempt income funds / Prospectus


<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:





 PORTFOLIO COUNSELOR/    PORTFOLIO COUNSELOR   PRIMARY TITLE
 FUND TITLE (if              EXPERIENCE        WITH INVESTMENT ADVISER
 applicable)                IN THIS FUND       (or one of its divisions)
-------------------------------------------------------------------------------

 BRENDA S. ELLERIN            13 years         Senior Vice President - Fixed
 President and Trustee                         Income,
                                               Capital Research and Management
                                               Company
 NEIL L. LANGBERG             16 years         Senior Vice President - Fixed
 Senior Vice President                         Income,
                                               Capital Research and Management
                                               Company




Purchase and sale of fund shares





 PURCHASE MINIMUMS (for all share classes)
---------------------------------------------------------

 TO ESTABLISH AN ACCOUNT                           $250
 TO ADD TO AN ACCOUNT                                50




You may sell (redeem) shares through your dealer or financial adviser or by
writing to American Funds Service Company at P.O. Box 6007, Indianapolis, IN
46206-6007; telephoning (800/421-0180); faxing (317/735-6636) American Funds
Service Company; or accessing our website (americanfunds.com).

For important information about tax information and financial intermediary
compensation, please turn to the sections titled "Tax information" and "Payments
to broker-dealers and other financial intermediaries" on page 33.


                                       19

                                           Tax-exempt income funds / Prospectus
<PAGE>

The Tax-Exempt Fund of California

Investment objectives

The fund's primary investment objective is to provide you with a high level of
current income exempt from regular federal and California income taxes. Its
secondary objective is preservation of capital.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for sales charge discounts if you and your
family invest, or agree to invest in the future, at least $100,000 in American
Funds. More information about these and other discounts is available from your
financial professional and in the "Sales charge reductions and waivers" section
on page 61 of the prospectus and on page 71 of the fund's statement of
additional information.



 SHAREHOLDER FEES
 (fees paid directly from your investment)
                                                       SHARE CLASSES
                                                ------------------------------
                                                                        F-1
                                                  A      B      C     AND F-2
------------------------------------------------------------------------------

 Maximum sales charge (load) imposed on         3.75%   none   none     none
 purchases (as a percentage of offering price)
------------------------------------------------------------------------------
 Maximum deferred sales charge (load)                  5.00%  1.00%     none
 (as a percentage of the amount redeemed)        none
------------------------------------------------------------------------------
 Maximum sales charge (load) imposed on          none   none   none     none
 reinvested dividends
------------------------------------------------------------------------------
 Redemption or exchange fees                     none   none   none     none







 ANNUAL FUND OPERATING EXPENSES
 (expenses that you pay each year as a percentage of the value of your
 investment)
-------------------------------------------------SHARE CLASSES-----------------

                                  ---A--------B--------C-------F-1-------F-2---

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

 Management fees                   0.34%    0.34%    0.34%    0.34%     0.34%
-------------------------------------------------------------------------------
 Distribution and/or service       0.25     1.00     1.00     0.25      none
 (12b-1) fees
-------------------------------------------------------------------------------
 Other expenses                    0.04     0.05     0.09     0.12      0.11
-------------------------------------------------------------------------------
 Total annual fund operating       0.63     1.39     1.43     0.71      0.45
 expenses
-------------------------------------------------------------------------------





                                       20

Tax-exempt income funds / Prospectus


<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that all
dividends and capital gain distributions are reinvested, that you pay the
maximum initial or contingent deferred sales charge, and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:





 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 A                                $437    $569     $713      $1,132
---------------------------------------------------------------------
 B                                 642     840      961       1,461
---------------------------------------------------------------------
 C                                 246     452      782       1,713
---------------------------------------------------------------------
 F-1                                73     227      395         883
---------------------------------------------------------------------
 F-2                                46     144      252         567
---------------------------------------------------------------------




For the share classes listed below, you would pay the following if you did not
redeem your shares:




 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 B                                $142    $440     $761      $1,461
---------------------------------------------------------------------
 C                                 146     452      782       1,713
---------------------------------------------------------------------




PORTFOLIO TURNOVER

The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate was 17%
of the average value of its portfolio.

Principal investment strategies

The fund seeks to achieve its objectives by primarily investing in municipal
bonds issued by the state of California and its agencies and municipalities
within the state. Consistent with the fund's objectives, the fund may also
invest in municipal securities that are issued by jurisdictions outside
California.

Under normal circumstances, the fund will invest at least 80% of its assets in,
or derive at least 80% of its income from, securities that are exempt from both
regular federal and California income taxes and that do not subject you to
federal alternative minimum tax.


                                       21

                                           Tax-exempt income funds / Prospectus
<PAGE>


The fund will invest primarily in debt securities rated BBB- or better or Baa3
or better or unrated but determined by the fund's investment adviser to be of
equivalent quality. The fund also invests in debt securities rated BB+ or below
and Ba1 or below or unrated but determined by the fund's investment adviser to
be of equivalent quality. Such securities are sometimes referred to as "junk
bonds."

The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively priced
securities that, in its opinion, represent above-average, long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is by analyzing various factors, which may include the credit
strength of the issuer, prices of similar securities issued by comparable
issuers, current and anticipated changes in interest rates, general market
conditions and other factors pertinent to the particular security being
evaluated. Securities may be sold when the investment adviser believes that they
no longer represent relatively attractive investment opportunities. The
investment adviser uses a system of multiple portfolio counselors in managing
the fund's assets. Under this approach, the portfolio of the fund is divided
into segments managed by individual counselors who decide how their respective
segments will be invested.

Principal risks

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

Because the fund invests in securities of issuers within the state of
California, the fund is more susceptible to factors adversely affecting issuers
of California securities than a comparable municipal bond mutual fund that does
not concentrate in a single state. For example, in the past, California voters
have passed amendments to the state's constitution and other measures that limit
the taxing and spending authority of California governmental entities, and
future voter initiatives may adversely affect California municipal bonds. More
detailed information about the risks of investing in California municipal
securities is contained in the statement of additional information.

The prices of, and the income generated by, the securities held by the fund may
decline in response to certain events taking place around the world, including
those directly involving the issuers whose securities are owned by the fund;
conditions affecting the general economy; overall market changes; local,
regional or global political, social or economic instability; governmental or
governmental agency responses to economic conditions; and currency, interest
rate and commodity price fluctuations.

The values of, and the income generated by, most debt securities held by the
fund may be affected by changing interest rates and by changes in the effective
maturities and credit ratings of these securities. For example, the values of
debt securities in the fund's portfolio


                                       22

Tax-exempt income funds / Prospectus


<PAGE>


generally will decline when interest rates rise and increase when interest rates
fall. In addition, falling interest rates may cause an issuer to redeem, "call"
or refinance a security before its stated maturity, which may result in the fund
having to reinvest the proceeds in lower yielding securities.

Changes in the credit quality of banks and financial institutions providing
credit and liquidity enhancements could cause the fund to experience a loss and
may affect its share price.

Debt securities are also subject to credit risk, which is the possibility that
the credit strength of an issuer will weaken and/or an issuer of a debt security
will fail to make timely payments of principal or interest and the security will
go into default. Lower quality debt securities generally have higher rates of
interest and may be subject to greater price fluctuations than higher quality
debt securities. In addition, longer maturity debt securities generally have
higher rates of interest and may be subject to greater price fluctuations than
shorter maturity debt securities. There may be little trading in the secondary
market for particular debt securities, which may make them more difficult to
value or sell.

Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.

Investment results

The bar chart on page 24 shows how the fund's investment results have varied
from year to year, and the table on page 24 shows how the fund's average annual
total returns for various periods compare with different broad measures of
market performance. This information provides some indication of the risks of
investing in the fund. Past results (before and after taxes) are not predictive
of future results. Updated information on the fund's results can be obtained by
visiting americanfunds.com.


                                       23

                                           Tax-exempt income funds / Prospectus
<PAGE>

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999  -1.97%
2000  11.29
2001   3.83
2002   8.13
2003   4.83
2004   4.62
2005   3.82
2006   4.90
2007   0.35
2008 -12.05

[end bar chart]


Highest/Lowest quarterly results during this time period were:




HIGHEST                        4.85%  (quarter ended September 30, 2002)
LOWEST                        -7.29%  (quarter ended December 31, 2008)



The fund's total return for the nine months ended September 30, 2009, was
22.31%.





 AVERAGE ANNUAL TOTAL RETURNS
 FOR THE PERIODS ENDED DECEMBER 31, 2008 (WITH MAXIMUM SALES CHARGE):
 SHARE CLASS                INCEPTION DATE      1 YEAR   5 YEARS  10 YEARS   LIFETIME
--------------------------------------------------------------------------------------

 A - Before taxes              10/28/86         -15.34%  -0.65%    2.20%      4.88%
 - After taxes on                               -15.34   -0.65     2.17        N/A
 distributions
 - After taxes on distributions and sale of      -8.56    0.12     2.52        N/A
 fund shares






 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR   5 YEARS   LIFETIME
--------------------------------------------------------------------------

 B                               3/15/00      -16.92%  -0.96%     2.33%
--------------------------------------------------------------------------
 C                               3/19/01      -13.59   -0.70      1.12
--------------------------------------------------------------------------
 F-1                             3/20/01      -12.11    0.02      1.86
--------------------------------------------------------------------------






 INDEXES/1/ (before taxes)            1 YEAR   5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal            -4.16%   2.62%    4.08%         N/A
California Index
 Barclays Capital Municipal Bond       -2.47    2.71     4.26         6.21%
Index
 Lipper California Municipal Debt     -11.53    0.35     2.48         5.29
Funds Average
 Class A annualized 30-day yield at August 31, 2009: 4.06%
 (For current yield information, please call American FundsLine at
800/325-3590.)




1 Barclays Capital Municipal California Index and Barclays Capital Municipal
 Bond Index (formerly Lehman Brothers Municipal Bond Index) reflect certain
 market sectors in which the fund may invest. The fund has selected Barclays
 Capital Municipal California Index to replace the Barclays Capital Municipal
 Bond Index as its broad-based securities market index. The fund's investment
 adviser believes the Barclays Capital Municipal California Index better
 reflects the market sectors and securities in which the fund primarily invests.
 Lipper California Municipal Debt Funds Average includes the fund and other
 funds that disclose investment objectives that are reasonably comparable to the
 fund's primary objective. See page 41 of this prospectus for more information
 on the indexes listed above.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.


                                       24

Tax-exempt income funds / Prospectus


<PAGE>


After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes. Your actual
after-tax returns depend on your individual tax situation and likely will differ
from the results shown above.

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:





 PORTFOLIO COUNSELOR/    PORTFOLIO COUNSELOR   PRIMARY TITLE
 FUND TITLE (if              EXPERIENCE        WITH INVESTMENT ADVISER
 applicable)                IN THIS FUND       (or one of its divisions)
-------------------------------------------------------------------------------

 NEIL L. LANGBERG             23 years         Senior Vice President - Fixed
 Senior Vice President                         Income,
                                               Capital Research and Management
                                               Company
 EDWARD B. NAHMIAS            11 years         Senior Vice President - Fixed
 Vice President                                Income, Capital Research Company
 KARL J. ZEILE                 6 years         Senior Vice President - Fixed
                                               Income, Capital Research and
                                               Management Company





                                       25

                                           Tax-exempt income funds / Prospectus
<PAGE>

Purchase and sale of fund shares




 PURCHASE MINIMUMS (for all share classes)
--------------------------------------------------------

 TO ESTABLISH AN ACCOUNT                         $1,000
 TO ADD TO AN ACCOUNT                                50




You may sell (redeem) shares through your dealer or financial adviser or by
writing to American Funds Service Company at P.O. Box 6007, Indianapolis, IN
46206-6007; telephoning (800/421-0180); faxing (317/735-6636) American Funds
Service Company; or accessing our website (americanfunds.com).

For important information about tax information and financial intermediary
compensation, please turn to the sections titled "Tax information" and "Payments
to broker-dealers and other financial intermediaries" on page 33.


                                       26

Tax-exempt income funds / Prospectus


<PAGE>


American Funds Short-Term Tax-Exempt Bond Fund (formerly The Tax-Exempt Money
Fund of America)

Investment objective

The fund's investment objective is to provide you with current income exempt
from regular federal income tax, consistent with its maturity and quality
standards described in the prospectus, and to preserve capital.

Fees and expenses of the fund

This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund. You may qualify for sales charge discounts if you and your
family invest, or agree to invest in the future, at least $500,000 in American
Funds. More information about these and other discounts is available from your
financial professional and in the "Sales charge reductions and waivers" section
on page 61 of the prospectus and on page 71 of the fund's statement of
additional information.

<SHAREHOLDER FEES
 (fees paid directly from your investment)

---------------------------------------------------------SHARE CLASSES---------

                                                   -----------------F-1 AND----
                                                        A             F-2

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

 Maximum sales charge (load) imposed                  2.50%           none
 on purchases (as a percentage of offering price)
-------------------------------------------------------------------------------
 Maximum deferred sales charge (load)                  none           none
 (as a percentage of the amount redeemed)
-------------------------------------------------------------------------------
 Maximum sales charge (load) imposed on                none           none
 reinvested dividends
-------------------------------------------------------------------------------
 Redemption or exchange fees                           none           none







 ANNUAL FUND OPERATING EXPENSES
 (expenses that you pay each year as a percentage of the value of your
 investment)
-----------------------------------------------------SHARE CLASSES-------------

                                           ----A----------F-1----------F-2-----

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

 Management fees                             0.38%       0.38%        0.38%
-------------------------------------------------------------------------------
 Distribution and/or service (12b-1)         0.15        0.25         none
 fees/*/
-------------------------------------------------------------------------------
 Other expenses/*/                           0.07        0.19         0.19
-------------------------------------------------------------------------------
 Total annual fund operating expenses        0.60        0.82         0.57





                                       27

                                           Tax-exempt income funds / Prospectus
<PAGE>

EXAMPLE

This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year, that all
dividends and capital gain distributions are reinvested, that you pay the
maximum initial or contingent deferred sales charge, and that the fund's
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions, your costs would be:



 SHARE CLASSES                   1 YEAR  3 YEARS  5 YEARS   10 YEARS
---------------------------------------------------------------------

 A                                $310    $437     $576      $  981
---------------------------------------------------------------------
 F-1                                84     262      455       1,014
---------------------------------------------------------------------
 F-2                                58     183      318         714
---------------------------------------------------------------------



* Because the fund was previously a money market fund and its expenses are not
 representative of a short-term tax-exempt bond fund, other expenses and 12b-1
 fees are based on estimates for the current fiscal year.

PORTFOLIO TURNOVER

The fund pays transaction costs when it buys and sells securities (or "turns
over" its portfolio). A higher portfolio turnover rate may indicate higher
transaction costs and may result in higher taxes when fund shares are held in a
taxable account. These costs, which are not reflected in annual fund operating
expenses or in the example, affect the fund's investment results. During the
fund's most recent fiscal year it was a money market fund and therefore is not
required to disclose its portfolio turnover rate in this prospectus.

Principal investment strategies

Under normal circumstances, the fund will invest at least 80% of its assets in,
or derive at least 80% of its income from, securities that are exempt from
regular federal income tax and that do not subject you to federal alternative
minimum tax. The fund may, however, invest up to 20% of its assets in securities
that would subject you to federal alternative minimum taxes. Therefore, while
the fund's distributions from tax-exempt securities are not subject to income
tax, a portion of the distributions may be included in determining a
shareholder's federal alternative minimum tax. The fund invests primarily in
municipal bonds with quality ratings of AA- or better or Aa3 or better or
unrated but determined by the fund's investment adviser to be of equivalent
quality. The fund may also invest in municipal bonds in the rating categories of
A- or better or A3 or better or unrated but determined by the fund's investment
adviser to be of equivalent quality. The fund may also invest in municipal
securities that are supported by credit and liquidity enhancements. The fund's
aggregate portfolio will have a dollar-weighted average maturity no greater than
three years.


                                       28

Tax-exempt income funds / Prospectus


<PAGE>


The fund relies on the professional judgment of its investment adviser to make
decisions about the fund's portfolio investments. The basic investment
philosophy of the investment adviser is to seek to invest in attractively priced
securities that, in its opinion, represent above-average, long-term investment
opportunities. The investment adviser believes that an important way to
accomplish this is by analyzing various factors, which may include the credit
strength of the issuer, prices of similar securities issued by comparable
issuers, current and anticipated changes in interest rates, general market
conditions and other factors pertinent to the particular security being
evaluated. Securities may be sold when the investment adviser believes that they
no longer represent relatively attractive investment opportunities. The
investment adviser uses a system of multiple portfolio counselors in managing
the fund's assets. Under this approach, the portfolio of the fund is divided
into segments managed by individual counselors who decide how their respective
segments will be invested.

Principal risks

YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE LIKELIHOOD OF LOSS MAY BE
GREATER IF YOU INVEST FOR A SHORTER PERIOD OF TIME.

The values of, and the income generated by, most debt securities held by the
fund may be affected by changing interest rates and by changes in the effective
maturities and credit ratings of these securities. For example, the values of
debt securities in the fund's portfolio generally will decline when interest
rates rise and increase when interest rates fall. In addition, falling interest
rates may cause an issuer to redeem, "call" or refinance a security before its
stated maturity, which may result in the fund having to reinvest the proceeds in
lower yielding securities.

Changes in the credit quality of banks and financial institutions providing
credit and liquidity enhancements could cause the fund to experience a loss and
may affect its share price.

Debt securities are also subject to credit risk, which is the possibility that
the credit strength of an issuer will weaken and/or an issuer of a debt security
will fail to make timely payments of principal or interest and the security will
go into default. There may be little trading in the secondary market for
particular debt securities, which may make them more difficult to value or sell.

A fund's income and the value of its portfolio holdings may fluctuate in
response to economic, political or social events in the United States or abroad.


Your investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.


                                       29

                                           Tax-exempt income funds / Prospectus
<PAGE>

Investment results

The bar chart below shows how the fund's investment results have varied from
year to year, and the table on page 31 shows how the fund's average annual total
returns for various periods compare with different broad measures of market
performance. This information provides some indication of the risks of investing
in the fund. The results for the years shown reflect the operation of the fund
as a money market fund prior to its conversion to a short-term tax-exempt bond
fund. The fund's expenses were lower as a money market fund than estimated for
the fund as a short-term bond fund. Past results (before and after taxes) are
not predictive of future results. Updated information on the fund's results can
be obtained by visiting americanfunds.com.


CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES*
(Results do not include a sales charge; if a sales charge were included,
results would be lower.)

[begin bar chart]

1999  2.60%
2000  3.50
2001  2.35
2002  0.89
2003  0.46
2004  0.66
2005  1.93
2006  2.95
2007  3.18
2008  1.54

[end bar chart]


* Results shown above reflect the operation of the fund as a money market fund
 prior to its conversion on August 7, 2009 to a short-term tax-exempt bond fund.


Highest/Lowest quarterly results during this time period were:





HIGHEST                       0.93%  (quarter ended December 31, 2000)
LOWEST                        0.10%  (quarter ended March 31, 2004)




The fund's total return for the nine months ended September 30, 2009, was 0.44%.



                                       30

Tax-exempt income funds / Prospectus


<PAGE>



The Investment Results table below reflects the fund's investment results as a
money market fund without any initial or contingent deferred sales charges.
Investment results include the fund's results as a money market fund through the
date of its conversion (August 7, 2009) to a short-term tax-exempt bond fund,
and therefore are not representative of the fund's results if it were operated
as a short-term tax-exempt bond fund during the period shown.



 AVERAGE ANNUAL TOTAL RETURNS
 FOR THE PERIODS ENDED DECEMBER 31, 2008:
 SHARE CLASS               INCEPTION DATE    1 YEAR  5 YEARS  10 YEARS   LIFETIME
----------------------------------------------------------------------------------

 A - Before taxes            10/24/89        1.54%    2.05%    2.00%      2.55%
 - After taxes on                            1.54     2.05     2.00        N/A
 distributions
 - After taxes on distributions and sale of  1.54     2.05     2.00        N/A
 fund shares






 INDEXES/1/ (before taxes)             1 YEAR  5 YEARS  10 YEARS   LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal Short 1-5  5.37%     N/A      N/A          N/A
Years Index
 Lipper Short Municipal Debt Funds     0.12     1.69%    2.86%        3.88%
Average
 Class A annualized 30-day yield at July 31, 2009: 0.00%
 (For current yield information, please call American FundsLine at
800/325-3590.)





1 The Barclays Capital Municipal Short 1-5 Years Index reflects the market
 sectors in which the fund primarily invests. The Lipper Short Municipal Debt
 Funds Average includes other mutual funds that disclose investment objectives
 that are reasonably comparable to those of the fund. See page 42 of this
 prospectus for more information on the indexes listed above.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

After-tax returns are shown only for Class A shares; after-tax returns for other
share classes will vary. After-tax returns are calculated using the highest
individual federal income tax rates in effect during each year of the periods
shown and do not reflect the impact of state and local taxes. Your actual
after-tax returns depend on your individual tax situation and likely will differ
from the results shown above.


                                       31

                                           Tax-exempt income funds / Prospectus
<PAGE>

Management

INVESTMENT ADVISER

Capital Research and Management Company, the investment adviser to the fund,
uses a system of multiple portfolio counselors in managing mutual fund assets.

PORTFOLIO COUNSELORS

The primary individual portfolio counselors for the fund are:





 PORTFOLIO COUNSELOR/    PORTFOLIO COUNSELOR   PRIMARY TITLE
 FUND TITLE (if              EXPERIENCE        WITH INVESTMENT ADVISER
 applicable)                IN THIS FUND       (or one of its divisions)
-------------------------------------------------------------------------------

 BRENDA S. ELLERIN        Less than 1 year     Senior Vice President - Fixed
 President                (since the fund's    Income,
                             conversion)       Capital Research and Management
                                               Company
-------------------------------------------------------------------------------
 NEIL L. LANGBERG         Less than 1 year     Senior Vice President - Fixed
 Senior Vice President    (since the fund's    Income,
                             conversion)       Capital Research and Management
                                               Company
-------------------------------------------------------------------------------




Purchase and sale of fund shares



 PURCHASE MINIMUMS (for all share classes)
---------------------------------------------------------

 TO ESTABLISH AN ACCOUNT                           $250
 TO ADD TO AN ACCOUNT                                50




You may sell (redeem) shares through your dealer or financial adviser or by
writing to American Funds Service Company at P.O. Box 6007, Indianapolis, IN
46206-6007; telephoning (800/421-0180); faxing (317/735-6636) American Funds
Service Company; or accessing our website (americanfunds.com).

For important information about tax information and financial intermediary
compensation, please turn to the sections titled "Tax information" and "Payments
to broker-dealers and other financial intermediaries" on page 33.


                                       32

Tax-exempt income funds / Prospectus


<PAGE>

Tax information

Fund distributions of interest on municipal bonds are generally not subject to
federal income tax. However, the funds may distribute taxable dividends,
including distributions of short-term capital gains, which are subject to
federal taxation as ordinary income. To the extent a fund is permitted to invest
in bonds subject to the federal alternative minimum tax, interest on certain
bonds may be subject to the federal alternative minimum tax. The funds'
distributions of net long-term capital gains are taxable as long-term capital
gains for federal income tax purposes.

Payments to broker-dealers and other financial intermediaries

If you purchase shares of a fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and the fund's distributor or its
affiliates may pay the intermediary for the sale of fund shares and related
services. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your individual financial adviser to
recommend the fund over another investment. Ask your individual financial
adviser or visit your financial intermediary's website for more information.


                                       33

                                           Tax-exempt income funds / Prospectus
<PAGE>

Investment objectives, strategies and risks

THE TAX-EXEMPT BOND FUND OF AMERICA The fund's investment objective is to
provide you with a high level of current income exempt from federal income tax,
consistent with the preservation of capital. The fund is designed for investors
seeking a high level of current income exempt from federal income tax. The fund
seeks to achieve its objective by investing primarily in municipal bonds.

Under normal circumstances, the fund will invest at least 80% of its assets in,
or derive at least 80% of its income from, securities that are exempt from
regular federal income tax. The fund will not invest in securities that subject
you to federal alternative minimum tax. The fund invests substantially in debt
securities rated A- or better by Standard & Poor's Corporation or A3 or better
by Moody's Investors Service, or unrated but determined by the fund's investment
adviser to be of equivalent quality. The fund also invests in debt securities
rated BBB+ or below and Baa1 or below (including those rated Ba1 or below and
BB+ or below) or unrated but determined by the fund's investment adviser to be
of equivalent quality. Securities rated Ba1 or below and BB+ or below are
sometimes referred to as "junk bonds."

AMERICAN HIGH-INCOME MUNICIPAL BOND FUND The fund's investment objective is to
provide you with a high level of current income exempt from regular federal
income tax. The fund is designed for investors who are able to tolerate greater
credit risk and price fluctuations than investors in funds with higher quality
portfolios. In seeking to achieve its objective, the fund may forego
opportunities that would result in capital gains and may accept prudent risks to
capital value, in each case to take advantage of opportunities for higher
current income.

Under normal circumstances, the fund will invest at least 80% of its assets in,
or derive at least 80% of its income from, securities that are exempt from
regular federal income tax. The fund may invest, without limitation, in
securities that may subject you to federal alternative minimum tax. The fund
invests a significant portion of its portfolio in municipal bonds rated BBB+ or
below or Baa1 or below or unrated but determined by the fund's investment
adviser to be of equivalent quality. Securities rated Ba1 or below and BB+ or
below are sometimes referred to as "junk bonds."

In addition, the fund may invest significantly in municipal obligations of
issuers in the same state or of similar project type.

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA The fund's investment objective is
to provide you with current income that is exempt from regular federal income
tax, consistent with its maturity and quality standards described in the
prospectus, and preservation of capital. The fund is designed for investors
seeking current income exempt from federal income tax. Under normal
circumstances, the fund will invest at least 80% of its assets in, or derive at
least 80% of its income from, securities that are exempt from regular federal
income tax and that do not subject you to federal alternative minimum tax. The
fund


                                       34

Tax-exempt income funds / Prospectus


<PAGE>


invests primarily in municipal bonds with quality ratings of A- or better or A3
or better or unrated but determined by the fund's investment adviser to be of
equivalent quality. The fund may also invest in municipal bonds in the rating
categories of BBB and Baa or unrated but determined by the fund's investment
adviser to be of equivalent quality. The dollar-weighted average maturity of the
fund's portfolio is between three and 10 years.

THE TAX-EXEMPT FUND OF CALIFORNIA The fund's primary objective is to provide you
with a high level of current income exempt from regular federal and California
income taxes. Its secondary objective is to preserve your investment. The fund
seeks to achieve these objectives by primarily investing in municipal bonds
issued by the state of California and its agencies and municipalities within the
state. Consistent with the fund's objectives, the fund may also invest in
municipal securities that are issued by jurisdictions outside of California. The
fund is designed for investors seeking income exempt from federal and California
income taxes and capital preservation over the long term, and is intended
primarily for taxable residents of California.

Under normal circumstances, the fund will invest at least 80% of its assets in,
or derive at least 80% of its income from, securities that are exempt from both
regular federal and California income taxes and that do not subject you to
federal alternative minimum tax. The fund will invest primarily in debt
securities rated BBB- or better or Baa3 or better or unrated but determined by
the fund's investment adviser to be of equivalent quality. The fund also invests
in debt securities rated BB+ or below and Ba1 or below or unrated but determined
by the fund's investment adviser to be of equivalent quality. Such securities
are sometimes referred to as "junk bonds."

Because the fund invests in securities issued by California municipalities, the
fund is more susceptible to factors adversely affecting issuers of California
securities than a comparable municipal bond mutual fund that does not
concentrate its investments in a single state. For example, in the past,
California voters have passed amendments to the state's constitution and other
measures that limit the taxing and spending authority of California governmental
entities, and future voter initiatives may adversely affect California municipal
bonds. More detailed information about the risks of investing in California
municipal securities is contained in the statement of additional information.

AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND The fund's investment objective
is to provide you with current income exempt from regular federal income tax,
consistent with its maturity and quality standards described in the prospectus,
and to preserve capital. Under normal circumstances, the fund will invest at
least 80% of its assets in, or derive at least 80% of its income from,
securities that are exempt from regular federal income tax and that do not
subject you to federal alternative minimum tax. The fund may, however, invest up
to 20% of its assets in securities that would subject you to federal alternative
minimum taxes. Therefore, while the fund's distributions from tax-exempt
securities are not subject to income tax, a portion of the distributions may be
included in determining a shareholder's federal alternative minimum tax.


                                       35

                                           Tax-exempt income funds / Prospectus
<PAGE>


The fund invests primarily in municipal bonds with quality ratings of AA- or
better or Aa3 or better or unrated but determined by the fund's investment
adviser to be of equivalent quality. The fund may also invest in municipal bonds
in the rating categories of A- or better or A3 or better or unrated but
determined by the fund's investment adviser to be of equivalent quality. The
fund's aggregate portfolio will have a dollar-weighted average maturity no
greater than three years.

APPLICABLE TO ALL FUNDS

Municipal bonds are debt obligations generally issued to obtain funds for
various public purposes, including the construction of public facilities.

The prices of, and the income generated by, the securities held by the funds may
decline in response to certain events taking place around the world, including
those directly involving the issuers whose securities are owned by the fund;
conditions affecting the general economy; overall market changes; local,
regional or global political, social or economic instability; governmental or
governmental agency responses to economic conditions; and currency, interest
rate and commodity price fluctuations.

The values of, and the income generated by, most debt securities held by the
funds may be affected by changing interest rates and by changes in the effective
maturities and credit ratings of these securities. For example, the values of
debt securities in a fund's portfolio generally will decline when interest rates
rise and increase when interest rates fall. In addition, falling interest rates
may cause an issuer to redeem, "call" or refinance a security before its stated
maturity, which may result in a fund having to reinvest the proceeds in lower
yielding securities.

Changes in the credit quality of banks and financial institutions providing
credit and liquidity enhancements could cause a fund to experience a loss and
may affect its share price.

Debt securities are also subject to credit risk, which is the possibility that
the credit strength of an issuer will weaken and/or an issuer of a debt security
will fail to make timely payments of principal or interest and the security will
go into default. Lower quality debt securities generally have higher rates of
interest and may be subject to greater price fluctuations than higher quality
debt securities. There may be little trading in the secondary market for
particular debt securities, which may make them more difficult to value or sell.

To the extent a fund invests significantly in municipal obligations of issuers
in the same state or project type, the fund may be more susceptible to certain
economic, political or regulatory occurrences. As a result, the potential for
fluctuations in the fund's share price may increase.

A bond's effective maturity is the market's trading assessment of its maturity
and represents an estimate of the most likely time period during which an
investor in that bond will receive payment of principal. For example, as market
interest rates decline, issuers may exercise call provisions that shorten the
bond's effective maturity. Conversely, if


                                       36

Tax-exempt income funds / Prospectus


<PAGE>

interest rates rise, effective maturities tend to lengthen. A portfolio's
dollar-weighted average maturity is the weighted average of all effective
maturities in the portfolio, where more weight is given to larger holdings.

The funds' investment adviser attempts to reduce these risks through
diversification of the portfolio and ongoing credit analysis, as well as by
monitoring economic and legislative developments, but there can be no assurance
that it will be successful at doing so.

The funds may also hold cash or money market instruments. The percentages of the
funds invested in such holdings vary and depend on various factors, including
market conditions and purchases and redemptions of fund shares. For temporary
defensive purposes, a fund may hold a significant portion of its assets in such
securities. A larger percentage of such holdings could moderate a fund's
investment results in a period of rising market prices. A larger percentage of
cash or money market instruments could reduce the magnitude of a fund's loss in
a period of falling market prices and provide liquidity to make additional
investments or to meet redemptions.

Your investment in the funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency, entity or person.


                                       37

                                           Tax-exempt income funds / Prospectus
<PAGE>

Additional investment results

Unlike the tables on page 5, 11, 18, 24 and 31, the tables below reflect each
fund's results calculated without sales charges.

THE TAX-EXEMPT BOND FUND OF AMERICA



 ADDITIONAL INVESTMENT RESULTS (WITHOUT SALES CHARGES)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
 SHARE CLASS                INCEPTION DATE      1 YEAR  5 YEARS  10 YEARS   LIFETIME
------------------------------------------------------------------------------------

 A - Before taxes              10/3/79          -7.10%   1.32%    3.26%      6.71%
 - After taxes on                               -7.10    1.32     3.24        N/A
 distributions
 - After taxes on distributions and sale of     -3.13    1.78     3.45        N/A
 fund shares






 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR  5 YEARS   LIFETIME
-------------------------------------------------------------------------

 B                               3/15/00      -7.79%   0.58%     3.17%
-------------------------------------------------------------------------
 C                               3/15/01      -7.84    0.50      2.14
-------------------------------------------------------------------------
 F-1                             3/15/01      -7.17    1.23      2.87
-------------------------------------------------------------------------








 INDEXES/1/ (before taxes)      1 YEAR    5 YEARS    10 YEARS     LIFETIME/2/
-----------------------------------------------------------------------------

 Barclays Capital Municipal     -2.47%     2.71%      4.26%           N/A
Bond Index
 Lipper General Municipal       -9.09      0.60       2.50           6.29%
Debt Funds Average
-------------------------------------------------------------------------------
 Class A distribution rate at December 31, 2008: 4.66%/3/
 (For current distribution rate information, please call American FundsLine
at 800/325-3590.)




1 The Barclays Capital Municipal Bond Index (formerly Lehman Brothers Municipal
 Bond Index) is a gauge of the long-term tax-exempt bond market and reflects a
 portion of the fixed-income securities in which the fund may invest. Lipper
 General Municipal Debt Funds Average includes the fund and other funds that
 disclose investment objectives that are reasonably comparable to the fund's
 objective.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

3 Reflects a fee waiver (4.63% without the waiver) as described in the Annual
 Fund Operating Expenses table under "Fees and expenses of the fund." The
 distribution rate is based on actual dividends paid to Class A shareholders
 over a 12-month period. Capital gain distributions, if any, are added back to
 net asset value to determine the rate.

The investment results table above and on page 5 show how the fund's average
annual total returns compare with various broad measures of market performance.
Barclays Capital Municipal Bond Index (formerly Lehman Brothers Municipal Bond
Index) is a market-value-weighted index designed to represent the long-term
investment-grade tax-exempt bond market. This index is unmanaged and its results
include reinvested dividends and/or distributions, but do not reflect the effect
of sales charges, commissions, expenses or taxes. This index was not in
existence as of the date the fund's Class A shares became available; therefore,
lifetime results are not shown. Lipper General Municipal Debt Funds Average is
composed of funds that invest in municipal debt issues in the top four credit
rating categories. The results of the underlying funds in the average include
reinvestment of dividends and capital gain distributions, as well as brokerage
commissions paid by the funds for portfolio transactions, but do not reflect the
effect of sales charges or taxes.


                                       38

Tax-exempt income funds / Prospectus


<PAGE>


AMERICAN HIGH-INCOME MUNICIPAL BOND FUND



 ADDITIONAL INVESTMENT RESULTS (WITHOUT SALES CHARGES)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
 SHARE CLASS                INCEPTION DATE      1 YEAR   5 YEARS  10 YEARS   LIFETIME
--------------------------------------------------------------------------------------

 A - Before taxes              9/26/94          -19.40%  -1.21%    1.69%      3.93%
 - After taxes on                               -19.40   -1.21     1.68        N/A
 distributions
 - After taxes on distributions and sale of     -10.92   -0.21     2.24        N/A
 fund shares







 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR   5 YEARS   LIFETIME
--------------------------------------------------------------------------

 B                               3/15/00      -19.99%  -1.91%     1.48%
--------------------------------------------------------------------------
 C                               3/15/01      -20.03   -1.98      0.48
--------------------------------------------------------------------------
 F-1                             3/19/01      -19.44   -1.27      1.18
--------------------------------------------------------------------------







 INDEXES/1/ (before taxes)     1 YEAR     5 YEARS    10 YEARS     LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal     -2.47%     2.71%      4.26%          5.45%
Bond Index
 Lipper High Yield Municipal   -25.11     -2.38       0.63           2.94
Debt Funds Average
-------------------------------------------------------------------------------
 Class A distribution rate at December 31, 2008: 6.17%/3/
 (For current distribution rate information, please call American FundsLine
at 800/325-3590.)




1 The Barclays Capital Municipal Bond Index (formerly Lehman Brothers Municipal
 Bond Index) is a gauge of the long-term tax-exempt bond market and reflects a
 portion of the fixed-income securities in which the fund may invest. Lipper
 High Yield Municipal Debt Funds Average includes the fund and other funds that
 disclose investment objectives that are reasonably comparable to the fund's
 objective.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

3 Reflects a fee waiver (6.12% without the waiver) as described in the Annual
 Fund Operating Expenses table under "Fees and expenses of the fund." The
 distribution rate is based on actual dividends paid to Class A shareholders
 over a 12-month period. Capital gain distributions, if any, are added back to
 net asset value to determine the rate.

The investment results table above and on page 11 show how the fund's average
annual total returns compare with various broad measures of market performance.
Barclays Capital Municipal Bond Index (formerly Lehman Brothers Municipal Bond
Index) is a market-value-weighted index designed to represent the long-term
investment-grade tax-exempt bond market. This index is unmanaged and its results
include reinvested dividends and/or distributions, but do not reflect the effect
of sales charges, commissions, expenses or taxes. Lipper High Yield Municipal
Debt Funds Average is composed of funds that invest at least 50% of their assets
in lower rated municipal debt issues. The results of the underlying funds in the
average include reinvestment of dividends and capital gain distributions, as
well as brokerage commissions paid by the funds for portfolio transactions, but
do not reflect sales charges or taxes.


                                       39

                                           Tax-exempt income funds / Prospectus
<PAGE>

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA



 ADDITIONAL INVESTMENT RESULTS (WITHOUT SALES CHARGES)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
 SHARE CLASS                INCEPTION DATE      1 YEAR  5 YEARS  10 YEARS   LIFETIME
-------------------------------------------------------------------------------------

 A - Before taxes              10/6/93          -1.31%   1.96%    3.37%      4.15%
 - After taxes on                               -1.31    1.96     3.37        N/A
 distributions
 - After taxes on distributions and sale of      0.38    2.18     3.42        N/A
 fund shares






 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR  5 YEARS   LIFETIME
-------------------------------------------------------------------------

 B                               3/15/00      -2.00%   1.26%     3.18%
-------------------------------------------------------------------------
 C                               3/15/01      -2.05    1.18      2.33
-------------------------------------------------------------------------
 F-1                             3/15/01      -1.31    1.93      3.06
-------------------------------------------------------------------------






 INDEXES/1/ (before taxes)         1 YEAR   5 YEARS   10 YEARS    LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal
 Short-Intermediate                 4.76%    3.45%      4.38%        4.72%
 1-10 Years Index
 Barclays Capital (7-Year)          4.59     3.69       4.80         5.13
Municipal Bond Index
 Lipper Intermediate Municipal     -1.79     1.86       3.37         4.10
Debt Funds Average
 Class A distribution rate at December 31, 2008: 3.63%/3/
 (For current distribution rate information, please call American FundsLine
at 800/325-3590.)




1 Barclays Capital Municipal Short-Intermediate 1-10 Years Index and Barclays
 Capital (7-Year) Municipal Bond Index (formerly Lehman Brothers (7-Year)
 Municipal Bond Index) reflect certain market sectors in which the fund may
 invest. The fund has selected Barclays Capital Municipal Short-Intermediate
 1-10 Years Index to replace Barclays Capital (7-Year) Municipal Bond Index as
 its broad-based securities market index. The fund's investment adviser believes
 Barclays Capital Municipal Short-Intermediate 1-10 Years Index better reflects
 the market sectors and securities in which the fund primarily invests. Lipper
 Intermediate Municipal Debt Funds Average includes the fund and other funds
 that disclose investment objectives that are reasonably comparable to the
 fund's primary objective.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

3 Reflects a fee waiver (3.60% without the waiver) as described in the Annual
 Fund Operating Expenses table under "Fees and expenses of the fund." The
 distribution rate is based on actual dividends paid to Class A shareholders
 over a 12-month period. Capital gain distributions, if any, are added back to
 net asset value to determine the rate.

The investment results table above and on page 18 show how the fund's average
annual total returns compare with various broad measures of market performance.
Barclays Capital Municipal Short-Intermediate 1-10 Years Index is a
market-value-weighted index that includes investment-grade tax-exempt bonds with
maturities of one to 10 years. This index is unmanaged and its results include
reinvested dividends and/or distributions, but do not reflect the effect of
sales charges, commissions, expenses or taxes. The Barclays Capital (7-Year)
Municipal Bond Index (formerly Lehman Brothers (7-Year) Municipal Bond Index) is
a market-value-weighted index designed to represent the investment-grade
tax-exempt bond market. This index is unmanaged and its results include
reinvested dividends and/or distributions, but do not reflect the effect of
sales charges, commissions, expenses or taxes. Lipper Intermediate Municipal
Debt Funds Average is composed of funds that invest in municipal debt issues
with dollar-weighted average maturities of five to 10 years. The results of the
underlying funds in the average include reinvestment of dividends and capital
gain distributions, as well as brokerage commissions paid by the funds for
portfolio transactions, but do not reflect the effect of sales charges or taxes.



                                       40

Tax-exempt income funds / Prospectus


<PAGE>

THE TAX-EXEMPT FUND OF CALIFORNIA




 ADDITIONAL INVESTMENT RESULTS (WITHOUT SALES CHARGES)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
 SHARE CLASS                INCEPTION DATE      1 YEAR   5 YEARS  10 YEARS   LIFETIME
--------------------------------------------------------------------------------------

 A - Before taxes              10/28/86         -12.05%   0.11%    2.59%      5.06%
 - After taxes on                               -12.05    0.11     2.56        N/A
 distributions
 - After taxes on distributions and sale of      -6.37    0.77     2.87        N/A
 fund shares







 SHARE CLASS (before taxes)   INCEPTION DATE  1 YEAR   5 YEARS   LIFETIME
--------------------------------------------------------------------------

 B                               3/15/00      -12.71%  -0.63%     2.33%
--------------------------------------------------------------------------
 C                               3/19/01      -12.75   -0.70      1.12
--------------------------------------------------------------------------
 F-1                             3/20/01      -12.11    0.02      1.86







 INDEXES/1/ (before taxes)     1 YEAR     5 YEARS    10 YEARS     LIFETIME/2/
-------------------------------------------------------------------------------

 Barclays Capital Municipal     -4.16%     2.62%      4.08%           N/A
California Index
 Barclays Capital Municipal     -2.47      2.71       4.26           6.21%
Bond Index
 Lipper California Municipal   -11.53      0.35       2.48           5.29
Debt Funds Average
 Class A distribution rate at December 31, 2008: 4.87%/3/
 (For current distribution rate information, please call American FundsLine
at 800/325-3590.)




1 Barclays Capital Municipal California Index and Barclays Capital Municipal
 Bond Index (formerly Lehman Brothers Municipal Bond Index) reflect certain
 market sectors in which the fund may invest. The fund has selected Barclays
 Capital Municipal California Index to replace the Barclays Capital Municipal
 Bond Index as its broad-based securities market index. The fund's investment
 adviser believes the Barclays Capital Municipal California Index better
 reflects the market sectors and securities in which the fund primarily invests.
 Lipper California Municipal Debt Funds Average includes the fund and other
 funds that disclose investment objectives that are reasonably comparable to the
 fund's primary objective.
2 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

3 Reflects a fee waiver (4.83% without the waiver) as described in the Annual
 Fund Operating Expenses table under "Fees and expenses of the fund." The
 distribution rate is based on actual dividends paid to Class A shareholders
 over a 12-month period. Capital gain distributions, if any, are added back to
 net asset value to determine the rate.

The investment results table above and on page 24 show how the fund's average
annual total returns compare with various broad measures of market performance.
Barclays Capital Municipal California Index is a market-value-weighted index
that includes only investment-grade tax-exempt bonds that are issued from
California. This index is unmanaged and its results include reinvested dividends
and/or distributions, but do not reflect the effect of sales charges,
commissions, expenses or taxes. Barclays Capital Municipal Bond Index (formerly
Lehman Brothers Municipal Bond Index) is a market-value-weighted index designed
to represent the long-term investment-grade tax-exempt bond market. This index
is unmanaged and its results include reinvested dividends and/or distributions,
but do not reflect the effect of sales charges, commissions, expenses or taxes.
Lipper California Municipal Debt Funds Average is composed of funds that limit
their assets to those securities that provide income that is exempt from
taxation in California. The results of the underlying funds in the average
include reinvestment of dividends and capital gain distributions, as well as
brokerage commissions paid by the funds for portfolio transactions, but do not
reflect sales charges or taxes.


                                       41

                                           Tax-exempt income funds / Prospectus
<PAGE>


AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND


As on page 31, the results for the years shown reflect the operation of the fund
as a money market fund prior to its conversion to a short-term tax-exempt bond
fund.



 ADDITIONAL INVESTMENT RESULTS/1/ (WITHOUT SALES CHARGES)
 AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2008:
 SHARE CLASS                INCEPTION DATE      1 YEAR  5 YEARS  10 YEARS   LIFETIME
-------------------------------------------------------------------------------------

 A - Before taxes              10/24/89         1.54%    2.05%    2.00%      2.55%
 - After taxes on                               1.54     2.05     2.00        N/A
 distributions
 - After taxes on distributions and sale of     1.54     2.05     2.00        N/A
 fund shares







 INDEXES/2/ (before taxes)             1 YEAR  5 YEARS  10 YEARS   LIFETIME/3/
-------------------------------------------------------------------------------

 Barclays Capital Municipal Short 1-5  5.37%     N/A      N/A          N/A
Years Index
 Lipper Short Municipal Debt Funds     0.12     1.69%    2.86%        3.88%
Average
 Class A distribution rate at December 31, 2008: 1.53%/4/
 (For current yield information, please call American FundsLine(R) at
800/325-3590.)




1 The Investment Results table above reflects the fund's investment results as a
 money market fund without any initial or contingent deferred sales charges.
 Investment results include the fund's results as a money market fund through
 the date of its conversion (August 7, 2009) to a short-term tax-exempt bond
 fund, and therefore are not representative of the fund's results if it were
 operated as a short-term tax-exempt bond fund during the period shown.
2 The Barclays Capital Municipal Short 1-5 Years Index reflects the market
 sectors in which the fund primarily invests. The Lipper Short Municipal Debt
 Funds Average includes other mutual funds that disclose investment objectives
 that are reasonably comparable to those of the fund.
3 Lifetime results for the index(es) shown are measured from the date Class A
 shares were first sold.

4 The distribution rate is based on actual dividends paid to Class A
 shareholders over a 12-month period. Capital gain distributions, if any, are
 added back to net asset value to determine the rate.

The investment results tables above and on page 31 show how the fund's average
annual total returns compare with various broad measures of market performance.
The Barclays Capital Municipal Short 1-5 Years Index is a market-value-weighted
index that includes investment-grade tax-exempt bonds with maturities of one to
five years. This index is unmanaged and its results include reinvested dividends
and/or distributions, but do not reflect the effect of sales charges,
commissions, expenses or taxes. This index began on July 31, 2005; therefore,
results prior to that are not shown. The Lipper Short Municipal Debt Funds
Average is composed of funds that invest in municipal debt issues with
dollar-weighted average maturities of less than three years. The results of the
underlying funds in the average include reinvestment of dividends and capital
gain distributions, as well as brokerage commissions paid by the funds for
portfolio transactions, but do not reflect the effect of sales charges or taxes.

All fund results reflected in the "Investment results" section of this
prospectus and this "Additional investment results" section reflect the
reinvestment of dividends and capital gain distributions, if any. Unless
otherwise noted, fund results reflect any fee waivers and/or expense
reimbursements in effect during the period presented.


                                       42

Tax-exempt income funds / Prospectus


<PAGE>

Management and organization

INVESTMENT ADVISER

Capital Research and Management Company, an experienced investment management
organization founded in 1931, serves as investment adviser to the funds and
other funds, including the American Funds. Capital Research and Management
Company is a wholly owned subsidiary of The Capital Group Companies, Inc. and is
located at 333 South Hope Street, Los Angeles, California 90071, and 6455 Irvine
Center Drive, Irvine, California 92618. Capital Research and Management Company
manages the investment portfolios and business affairs of the funds. The total
management fees paid by the funds, as a percentage of average net assets, for
the previous fiscal year appear in the Annual Fund Operating Expenses tables
under "Fees and expenses of the fund." The management fee for each fund is based
on the daily net assets of the fund and the fund's monthly gross investment
income. Please see the statement of additional information for further details.
A discussion regarding the basis for the approval of the funds' investment
advisory and service agreements by the funds' boards of directors/trustees is
contained in the funds' annual reports to shareholders for the following
periods: The Tax-Exempt Bond Fund of America and The Tax-Exempt Fund of
California -- the fiscal year ended August 31, 2009; American High-Income
Municipal Bond Fund and Limited Term Tax-Exempt Bond Fund of America -- the
fiscal year ended July 31, 2009; and in the annual report for American Funds
Short-Term Tax-Exempt Bond Fund (formerly The Tax-Exempt Money Fund of America)
as of September 30, 2008.

Capital Research and Management Company manages equity assets through two
investment divisions, Capital World Investors and Capital Research Global
Investors, and manages fixed-income assets through its Fixed Income division.
Capital World Investors and Capital Research Global Investors make investment
decisions on an independent basis.

Rather than remain as investment divisions, Capital World Investors and Capital
Research Global Investors may be incorporated into wholly owned subsidiaries of
Capital Research and Management Company. In that event, Capital Research and
Management Company would continue to be the investment adviser, and day-to-day
investment management of equity assets would continue to be carried out through
one or both of these subsidiaries. Although not currently contemplated, Capital
Research and Management Company could incorporate its Fixed Income division in
the future and engage it to provide day-to-day investment management of
fixed-income assets. Capital Research and Management Company and each of the
funds it advises have applied to the U.S. Securities and Exchange Commission for
an exemptive order that would give Capital Research and Management Company the
authority to use, upon approval of the fund's board, its management subsidiaries
and affiliates to provide day-to-day investment management services to the
funds, including making changes to the management subsidiaries and affiliates
providing such services. Approval by a fund's shareholders would be required


                                       43

                                           Tax-exempt income funds / Prospectus
<PAGE>


before any authority granted under an exemptive order could be exercised with
respect to that fund. A meeting of the funds' shareholders of record as of
August 28, 2009, to consider, among other items, approval of this arrangement is
scheduled for November 24, 2009. There is no assurance that Capital Research and
Management Company will incorporate its investment divisions or obtain
shareholders' approval to exercise any authority, if granted, under an exemptive
order.

In addition to voting on approval of the arrangement discussed above,
shareholders are being asked to vote on other proposals at the meeting. These
proposals include electing board members, reorganizing the funds into Delaware
statutory trusts, amending the funds' fundamental policies and amending their
investment advisory and service agreements. More information on these proposals
is contained in a joint proxy statement, which can be found at
americanfunds.com/vote.

EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the funds'
portfolio transactions. In selecting broker-dealers, the investment adviser
strives to obtain "best execution" (the most favorable total price reasonably
attainable under the circumstances) for the funds' portfolio transactions,
taking into account a variety of factors. Subject to best execution, the
investment adviser may consider investment research and/or brokerage services
provided to the adviser in placing orders for the funds' portfolio transactions.
The investment adviser may place orders for the funds' portfolio transactions
with broker-dealers who have sold shares of funds managed by the investment
adviser or its affiliated companies; however, it does not give consideration to
whether a broker-dealer has sold shares of the funds managed by the investment
adviser or its affiliated companies when placing any such orders for the funds'
portfolio transactions. A more detailed description of the investment adviser's
policies is included in the funds' statement of additional information.

PORTFOLIO HOLDINGS

Portfolio holdings information for each of the funds is available on the
American Funds website at americanfunds.com. To reach this information, access
the fund's detailed information page on the website. A link to each fund's
complete list of publicly disclosed portfolio holdings, updated as of each
calendar quarter-end, is generally posted to this page within 45 days after the
end of the applicable quarter. This information is available on the website
until new information for the next quarter is posted. Portfolio holdings
information for the funds is also contained in reports filed with the Securities
and Exchange Commission.

A description of the funds' policies and procedures regarding disclosure of
information about their portfolio holdings is available in the statement of
additional information.


                                       44

Tax-exempt income funds / Prospectus


<PAGE>

MULTIPLE PORTFOLIO COUNSELOR SYSTEM

Capital Research and Management Company uses a system of multiple portfolio
counselors in managing mutual fund assets. Under this approach, the portfolio of
a fund is divided into segments managed by individual counselors who decide how
their respective segments will be invested. In addition, Capital Research and
Management Company's investment analysts may make investment decisions with
respect to a portion of a fund's portfolio. Investment decisions are subject to
a fund's objective(s), policies and restrictions and the oversight of the
appropriate investment-related committees of Capital Research and Management
Company and its investment divisions. The table below shows the investment
experience and role in management of the funds for each of the funds' primary
portfolio counselors.





                                                                         ROLE IN
                         INVESTMENT                   EXPERIENCE         MANAGEMENT
 PORTFOLIO COUNSELOR     EXPERIENCE                  IN THE FUNDS        OF THE FUNDS
------------------------------------------------------------------------------------------------

 BRENDA S. ELLERIN       Investment
                         professional for 20
                         years in total;
                         18 years with Capital
                         Research and
                         Management Company or
                         affiliate
 THE TAX-EXEMPT BOND                                   11 years          Serves as a municipal
 FUND OF AMERICA                                (plus 6 years of prior   bond portfolio
                                                   experience as an      counselor
                                                  investment analyst
                                                    for the fund)
 AMERICAN HIGH-INCOME                                  11 years          Serves as a municipal
 MUNICIPAL BOND FUND                            (plus 4 years of prior   bond portfolio
                                                   experience as an      counselor
                                                  investment analyst
                                                    for the fund)
 LIMITED TERM TAX-                                     13 years          Serves as a municipal
 EXEMPT BOND FUND                                                        bond portfolio
 OF AMERICA                                                              counselor
 AMERICAN FUNDS                                    Less than 1 year      Serves as a municipal
 SHORT-TERM TAX-EXEMPT                            (since the fund's      bond portfolio
 BOND FUND                                           conversion)         counselor
------------------------------------------------------------------------------------------------
 NEIL L. LANGBERG        Investment
                         professional for 31
                         years, all with
                         Capital Research and
                         Management Company or
                         affiliate
 THE TAX-EXEMPT BOND                                   30 years          Serves as a municipal
 FUND OF AMERICA                                                         bond portfolio
                                                                         counselor
 AMERICAN HIGH-INCOME                                  15 years          Serves as a municipal
 MUNICIPAL BOND FUND                                                     bond portfolio
                                                                         counselor
 LIMITED TERM                                          16 years          Serves as a municipal
 TAX-EXEMPT BOND FUND                                                    bond portfolio
 OF AMERICA                                                              counselor
 THE TAX-EXEMPT FUND                                   23 years          Serves as a municipal
 OF CALIFORNIA                                                           bond portfolio
                                                                         counselor
 AMERICAN FUNDS                                    Less than 1 year      Serves as a municipal
 SHORT-TERM TAX-EXEMPT                            (since the fund's      bond portfolio
 BOND FUND                                           conversion)         counselor
------------------------------------------------------------------------------------------------
 EDWARD B. NAHMIAS       Investment
                         professional for 20
                         years in total;
                         13 years with Capital
                         Research and
                         Management Company or
                         affiliate
 THE TAX-EXEMPT FUND                                   11 years          Serves as a municipal
 OF CALIFORNIA                                                           bond portfolio
                                                                         counselor
------------------------------------------------------------------------------------------------
 KARL J. ZEILE           Investment
                         professional for 18
                         years in total;
                         10 years with Capital
                         Research and
                         Management Company or
                         affiliate
 THE TAX-EXEMPT BOND                                   6 years           Serves as a municipal
 FUND OF AMERICA                                (plus 4 years of prior   bond portfolio
                                                   experience as an      counselor
                                                  investment analyst
                                                    for the fund)
 AMERICAN HIGH-INCOME                                  5 years           Serves as a municipal
 MUNICIPAL BOND FUND                            (plus 5 years of prior   bond portfolio
                                                   experience as an      counselor
                                                  investment analyst
                                                     for the fund
 THE TAX-EXEMPT FUND                                   6 years           Serves as a municipal
 OF CALIFORNIA                                                           bond portfolio
                                                                         counselor
------------------------------------------------------------------------------------------------






                                       45

                                           Tax-exempt income funds / Prospectus
<PAGE>

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



                                       46

Tax-exempt income funds / Prospectus


<PAGE>

Information regarding the portfolio counselors' compensation, their ownership of
securities in the funds and other accounts they manage is in the statement of
additional information.


                                       47

                                           Tax-exempt income funds / Prospectus
<PAGE>

Shareholder information

SHAREHOLDER SERVICES

American Funds Service Company/(R)/,the funds' transfer agent, offers a wide
range of services that you can use to alter your investment program should your
needs and circumstances change. These services may be terminated or modified at
any time upon 60 days' written notice.

AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
Call toll-free from anywhere in the United States
(8 a.m. to 8 p.m. ET): 800/421-0180
Access the American Funds website : americanfunds.com


              [map of the United States]





INDIANA                            VIRGINIA
SERVICE CENTER                     SERVICE CENTER
American Funds                     American Funds
Service Company                    Service Company
P.O. Box 6007                      P.O. Box 2280
Indianapolis, Indiana              Norfolk, Virginia
46206-6007                         23501-2280
Fax: 317/735-6636                  Fax: 757/670-4761




A MORE DETAILED DESCRIPTION OF POLICIES AND SERVICES IS INCLUDED IN THE FUNDS'
STATEMENT OF ADDITIONAL INFORMATION AND THE OWNER'S GUIDE SENT TO NEW AMERICAN
FUNDS SHAREHOLDERS ENTITLED WELCOME. These documents are available by writing or
calling American Funds Service Company. Certain privileges and/or services
described on the following pages of this prospectus and in the statement of
additional information may not be available to you depending on your investment
dealer. Please see your financial adviser or investment dealer for more
information.


                                       48

Tax-exempt income funds / Prospectus


<PAGE>

Choosing a share class

Each fund offers different classes of shares through this prospectus. Shares of
each fund are available through various investment programs or accounts.
HOWEVER, TAX-EXEMPT FUNDS SHOULD GENERALLY NOT SERVE AS INVESTMENTS FOR
TAX-DEFERRED RETIREMENT PLANS AND ACCOUNTS. The services or share classes
available to you may vary depending upon how you wish to purchase shares of a
fund. UNLESS OTHERWISE NOTED, REFERENCES IN THIS PROSPECTUS TO CLASS F SHARES
REFER TO BOTH CLASS F-1 AND F-2 SHARES. SINCE SHARES OF AMERICAN FUNDS
SHORT-TERM TAX-EXEMPT BOND FUND ARE ONLY AVAILABLE IN CLASS A, F-1 AND F-2,
REFERENCES TO CLASS B AND C SHARES ARE NOT APPLICABLE TO AMERICAN FUNDS
SHORT-TERM TAX-EXEMPT BOND FUND.

Class B shares are no longer available for purchase. Any investment received by
a fund that is intended for Class B shares will instead be invested in Class A
shares of the fund and subject to any applicable sales charges.

Shareholders with investments in Class B shares may continue to hold such shares
until they convert to Class A shares. However, no additional investments will be
accepted in Class B shares. Dividends and capital gain distributions may
continue to be reinvested in Class B shares until their conversion dates. In
addition, shareholders invested in Class B shares of a fund will be able to
exchange those shares into other funds offering Class B shares until they
convert.

Each share class of a fund represents an investment in the same portfolio of
securities, but each class has its own sales charge and expense structure,
allowing you to choose the class that best fits your situation. WHEN YOU
PURCHASE SHARES OF A FUND, YOU SHOULD CHOOSE A SHARE CLASS. IF NONE IS CHOSEN,
YOUR INVESTMENT WILL BE MADE IN CLASS A SHARES.

Factors you should consider in choosing a class of shares include:

. how long you expect to own the shares;

. how much you intend to invest;

. total expenses associated with owning shares of each class;

. whether you qualify for any reduction or waiver of sales charges (for example,
 Class A shares may be a less expensive option over time if you qualify for a
 sales charge reduction or waiver);

. whether you plan to take any distributions in the near future; and


                                       49

                                           Tax-exempt income funds / Prospectus
<PAGE>

. availability of share classes:

 -- Class B shares may be acquired only by exchanging from Class B shares of
   other American Funds (see "Purchase, exchange and sale of shares" below);

 -- Class C shares of Limited Term Tax-Exempt Bond Fund of America may be
   acquired only by exchanging from Class C shares of other American Funds (see
   "Purchase, exchange and sale of shares" below);

 -- Class C shares are not available to retirement plans that do not currently
   invest in such shares and that are eligible to invest in Class R shares of
   the American Funds, including employer-sponsored retirement plans such as
   defined benefit plans, 401(k) plans, 457 plans, 403(b) plans, and money
   purchase pension and profit-sharing plans; and

 -- Class F shares are generally available only to fee-based programs of
   investment dealers that have special agreements with each fund's distributor
   and to certain registered investment advisers.

EACH INVESTOR'S FINANCIAL CONSIDERATIONS ARE DIFFERENT. YOU SHOULD SPEAK WITH
YOUR FINANCIAL ADVISER TO HELP YOU DECIDE WHICH SHARE CLASS IS BEST FOR YOU.


                                       50

Tax-exempt income funds / Prospectus


<PAGE>





 SUMMARY OF THE PRIMARY DIFFERENCES AMONG SHARE CLASSES

 CLASS A SHARES
 Initial sales charge     up to 3.75% for The Tax-Exempt Bond Fund of America,
                          American High-Income Municipal Bond Fund and The
                          Tax-Exempt Fund of California, and up to 2.50% for
                          Limited Term Tax-Exempt Bond Fund of America  and
                          American Funds Short-Term Tax-Exempt Bond Fund
                          (reduced for purchases of $100,000 or more ($500,000
                          or more for Limited Term Tax-Exempt Bond Fund of
                          America and American Funds Short-Term Tax-Exempt Bond
                          Fund) and eliminated for purchases of $1 million or
                          more)
 Contingent deferred      none (except a charge of 1.00% applies to certain
 sales charge             redemptions made within one year following purchases
                          of $1 million or more made without an initial sales
                          charge)
 12b-1 fees               up to .25% annually for The Tax-Exempt Bond Fund of
                          America and The Tax-Exempt Fund of California, up to
                          .30% annually for American High-Income Municipal Bond
                          Fund and Limited Term Tax-Exempt Bond Fund of
                          America, and up to .15% annually for American Funds
                          Short-Term Tax-Exempt Bond Fund
 Dividends                generally higher than other classes due to lower
                          annual expenses, but may be lower than Class F-1
                          shares, depending on relative expenses, and lower
                          than Class F-2 shares due to 12b-1 fees
 Purchase maximum         none
 Conversion               none
 CLASS B SHARES
 Initial sales charge     none
 Contingent deferred      starts at 5.00%, declining to 0% six years after
 sales charge             purchase
 12b-1 fees               up to 1.00% annually
 Dividends                generally lower than Class A and F shares due to
                          higher 12b-1 fees and other expenses, but higher than
                          Class C shares due to lower other expenses
 Purchase maximum         Class B shares may not be purchased or acquired
                          except by exchange from Class B shares of other
                          American Funds. Class B shares are not offered by
                          American Funds Short-Term Tax-Exempt Bond Fund at
                          this time.
 Conversion               automatic conversion to Class A shares in the month
                          of the eight-year anniversary of the purchase date,
                          reducing future annual expenses
 CLASS C SHARES
 Initial sales charge     none
 Contingent deferred      1.00% if shares are sold within one year after
 sales charge             purchase
 12b-1 fees               up to 1.00% annually
 Dividends                generally lower than other classes due to higher
                          12b-1 fees and other expenses
 Purchase maximum         see the discussion regarding purchase minimums and
                          maximums in "Purchase and exchange of shares." Class
                          C shares are not offered by American Funds Short-Term
                          Tax-Exempt Bond Fund at this time.
 Conversion               automatic conversion to Class F-1 shares in the month
                          of the 10-year anniversary of the purchase date,
                          reducing future annual expenses
 CLASS F-1 SHARES
 Initial sales charge     none
 Contingent deferred      none
 sales charge
 12b-1 fees               currently up to .25% annually (may not exceed .50%
                          annually)
 Dividends                generally higher than Class B and C shares due to
                          lower 12b-1 fees, but may be higher than Class A
                          shares, depending on relative expenses, and lower
                          than Class F-2 shares due to 12b-1 fees
 Purchase maximum         none
 Conversion               none
 CLASS F-2 SHARES
 Initial sales charge     none
 Contingent deferred      none
 sales charge
 12b-1 fees               none
 Dividends                generally higher than other classes due to absence of
                          12b-1 fees
 Purchase maximum         none
 Conversion               none





                                       51

                                           Tax-exempt income funds / Prospectus

FUND EXPENSES

In periods of market volatility, assets of the funds may decline significantly,
causing total annual fund operating expenses to become higher than the numbers
shown in the annual fund operating expenses tables in this prospectus.

The "Other expenses" items in the "Annual fund operating expenses" table for
each fund include custodial, legal, transfer agent and subtransfer
agent/recordkeeping payments and various other expenses. Subtransfer
agent/recordkeeping payments may be made to third parties (including affiliates
of the funds' investment adviser) that provide subtransfer agent, recordkeeping
and/or shareholder services with respect to certain shareholder accounts in lieu
of the transfer agent providing such services. The amount paid for subtransfer
agent/ recordkeeping services varies depending on the share class and services
provided, and typically ranges from $3 to $19 per account.


                                       52

Tax-exempt income funds / Prospectus


<PAGE>

Purchase, exchange and sale of shares

EACH FUND RESERVES THE RIGHT NOT TO MAKE ITS SHARES AVAILABLE TO TAX-DEFERRED
RETIREMENT PLANS AND ACCOUNTS. The Tax-Exempt Fund of California is intended
primarily for taxable residents of California and may not be appropriate for
residents of other states and tax-exempt entities. The Tax-Exempt Fund of
California is qualified for sale only in California and other jurisdictions that
do not require qualification.

THE FUNDS' TRANSFER AGENT, ON BEHALF OF THE FUNDS AND AMERICAN FUNDS
DISTRIBUTORS,/(R)/ THE FUNDS' DISTRIBUTOR, IS REQUIRED BY LAW TO OBTAIN
CERTAIN PERSONAL INFORMATION FROM YOU OR ANY OTHER PERSON(S) ACTING ON YOUR
BEHALF IN ORDER TO VERIFY YOUR OR SUCH PERSON'S IDENTITY. IF YOU DO NOT PROVIDE
THE INFORMATION, THE TRANSFER AGENT MAY NOT BE ABLE TO OPEN YOUR ACCOUNT. IF THE
TRANSFER AGENT IS UNABLE TO VERIFY YOUR IDENTITY OR THAT OF ANY OTHER PERSON(S)
AUTHORIZED TO ACT ON YOUR BEHALF, OR BELIEVES IT HAS IDENTIFIED POTENTIALLY
CRIMINAL ACTIVITY, THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT
TO CLOSE YOUR ACCOUNT OR TAKE SUCH OTHER ACTION THEY DEEM REASONABLE OR REQUIRED
BY LAW.

When purchasing shares, you should designate the fund or funds in which you wish
to invest. If no fund is designated and the amount of your cash investment is
more than $5,000, your money will be held uninvested (without liability to the
transfer agent for loss of income or appreciation pending receipt of proper
instructions) until investment instructions are received, but for no more than
three business days. Your investment will be made at the net asset value (plus
any applicable sales charge in the case of Class A shares) next determined after
investment instructions are received and accepted by the transfer agent. If
investment instructions are not received, your money will be invested in Class A
shares of American Funds Money Market Fund/SM/ on the third business day after
receipt of your investment.

If no fund is designated and the amount of your cash investment is $5,000 or
less, your money will be invested in the same proportion and in the same fund or
funds in which your last cash investment (excluding exchanges) was made,
provided such investment was made within the last 16 months. If no investment
was made within the last 16 months, your money will be held uninvested (without
liability to the transfer agent for loss of income or appreciation pending
receipt of proper instructions) until investment instructions are received, but
for no more than three business days. Your investment will be made at the net
asset value (plus any applicable sales charge in the case of Class A shares)
next determined after investment instructions are received and accepted by the
transfer agent. If investment instructions are not received, your money will be
invested in Class A shares of American Funds Money Market Fund on the third
business day after receipt of your investment.


                                       53

                                           Tax-exempt income funds / Prospectus
<PAGE>


PURCHASE OF CLASS A AND C SHARES<

You may generally open an account and purchase Class A and C shares by
contacting any financial adviser (who may impose transaction charges in addition
to those described in this prospectus) authorized to sell each fund's shares.
You may purchase additional shares in various ways, including through your
financial adviser and by mail, telephone, the Internet and bank wire.

A 403(b) plan may not invest in Class A shares on or after January 1, 2009
unless such plan was invested in Class A shares prior to that date.

Class C shares of Limited Term Tax-Exempt Bond Fund of America may be acquired
only by exchanging from Class C shares of other American Funds. Class C shares
are not offered by American Funds Short-Term Tax-Exempt Bond Fund at this time.


PURCHASE OF CLASS F SHARES

You may generally open an account and purchase Class F shares only through
fee-based programs of investment dealers that have special agreements with the
funds' distributor and through certain registered investment advisers. These
dealers and advisers typically charge ongoing fees for services they provide.
Intermediary fees normally range from .75% to 1.50% of assets annually,
depending on the services offered.

EXCHANGE

Generally, you may exchange your shares into shares of the same class of other
American Funds without a sales charge. Exchanges of shares from American Funds
Money Market Fund initially purchased without a sales charge generally will be
subject to the appropriate sales charge. For purposes of computing the
contingent deferred sales charge on Class B and C shares, the length of time you
have owned your shares will be measured from the date of original purchase and
will not be affected by any permitted exchange.

Exchanges have the same tax consequences as ordinary sales and purchases. For
example, to the extent you exchange shares held in a taxable account that are
worth more now than what you paid for them, the gain will be subject to
taxation. See "Transactions by telephone, fax or the Internet" in this
prospectus for information regarding electronic exchanges.


                                       54

Tax-exempt income funds / Prospectus


<PAGE>

FREQUENT TRADING OF FUND SHARES

The funds and American Funds Distributors reserve the right to reject any
purchase order for any reason. The funds are not designed to serve as vehicles
for frequent trading. Frequent trading of fund shares may lead to increased
costs to the funds and less efficient management of the funds' portfolios,
potentially resulting in dilution of the value of the shares held by long-term
shareholders. Accordingly, purchases, including those that are part of exchange
activity that the funds or American Funds Distributors have determined could
involve actual or potential harm to the funds, may be rejected.

The funds, through their transfer agent, American Funds Service Company,
maintain surveillance procedures that are designed 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 funds 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 funds' broad ability to restrict potentially harmful trading
as described above, the funds' boards of directors/trustees have adopted a
"purchase blocking policy" under which any shareholder redeeming shares having a
value of $5,000 or more from a fund will be precluded from investing in the fund
for 30 calendar days after the redemption transaction. This policy also applies
to redemptions and purchases that are part of exchange transactions. Under the
funds' 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/(R)/; 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 funds reserve the right to waive the purchase blocking policy with respect
to specific shareholder accounts in those instances where American Funds Service
Company deter-


                                       55

                                           Tax-exempt income funds / Prospectus
<PAGE>


mines 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 own procedures, provided that American Funds Service Company
believes the intermediary's procedures are reasonably designed to enforce the
frequent trading policies of the funds. 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 FUNDS' SURVEILLANCE PROCEDURES AND PURCHASE BLOCKING POLICY,
ALL TRANSACTIONS IN FUND SHARES REMAIN SUBJECT TO THE RIGHT OF THE FUNDS AND
AMERICAN FUNDS DISTRIBUTORS 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). SEE THE STATEMENT OF
ADDITIONAL INFORMATION FOR MORE INFORMATION ABOUT HOW AMERICAN FUNDS SERVICE
COMPANY MAY ADDRESS OTHER POTENTIALLY ABUSIVE TRADING ACTIVITY IN THE AMERICAN
FUNDS.

PURCHASE MINIMUMS AND MAXIMUMS


The purchase minimums described on the table on pages 6, 13, 19, 26 and 32 may
be waived in certain cases. See the statement of additional information for
details.

For accounts established with an automatic investment plan, the initial purchase
minimum of $250 (or $1,000 for The Tax-Exempt Fund of California) may be waived
if the purchases (including purchases through exchanges from another fund) made
under the plan are sufficient to reach $250 (or $1,000 for The Tax-Exempt Fund
of California) within five months of account establishment.

If you have significant American Funds holdings, you may not be eligible to
invest in Class C shares of The Tax-Exempt Bond Fund of America, American
High-Income Municipal Bond Fund and The Tax-Exempt Fund of California.
Specifically, you may not purchase Class C shares if you are eligible to
purchase Class A shares at the $1 million sales charge discount rate (that is,
at net asset value). See "Sales charge reductions and waivers" in this
prospectus and the statement of additional information for more information
regarding sales charge discounts.


                                       56

Tax-exempt income funds / Prospectus


<PAGE>

VALUING SHARES

The net asset value of each share class of the funds is the value of a single
share. Each fund calculates the net asset value each day the New York Stock
Exchange is open for trading as of approximately 4 p.m. New York time, the
normal close of regular trading. Assets are valued primarily on the basis of
market quotations. However, each fund has adopted procedures for making "fair
value" determinations if market quotations are not readily available or are not
considered reliable. For example, fair value procedures may be used if an issuer
defaults and there is no market for its securities. Use of these procedures is
intended to result in more appropriate net asset values.

Your shares will be purchased at the net asset value (plus any applicable sales
charge in the case of Class A shares) or sold at the net asset value next
determined after American Funds Service Company receives your request, provided
that your request contains all information and legal documentation necessary to
process the transaction. A contingent deferred sales charge may apply at the
time you sell certain Class A, B and C shares.

MOVING BETWEEN SHARE CLASSES AND ACCOUNTS

Please see the statement of additional information for details and limitations
on moving investments in certain share classes to different share classes and on
moving investments held in certain accounts to different accounts.



                                       57

                                           Tax-exempt income funds / Prospectus
<PAGE>

Sales charges

CLASS A SHARES

The initial sales charge you pay each time you buy Class A shares differs
depending upon the amount you invest and may be reduced or eliminated for larger
purchases as indicated below. Any applicable sales charge will be deducted
directly from your investment.


SALES CHARGES FOR THE TAX-EXEMPT BOND FUND OF AMERICA, AMERICAN HIGH-INCOME
MUNICIPAL BOND FUND AND THE TAX-EXEMPT FUND OF CALIFORNIA


                                        SALES CHARGE AS A
                                          PERCENTAGE OF:
                                                                  DEALER
                                                    NET         COMMISSION
                                        OFFERING   AMOUNT     AS A PERCENTAGE
 INVESTMENT                              PRICE    INVESTED   OF OFFERING PRICE
-------------------------------------------------------------------------------

 Less than $100,000                      3.75%     3.90%           3.00%
-------------------------------------------------------------------------------
 $100,000 but less than $250,000         3.50      3.63            2.75
-------------------------------------------------------------------------------
 $250,000 but less than $500,000         2.50      2.56            2.00
-------------------------------------------------------------------------------
 $500,000 but less than $750,000         2.00      2.04            1.60
-------------------------------------------------------------------------------
 $750,000 but less than $1 million       1.50      1.52            1.20
-------------------------------------------------------------------------------
 $1 million or more and certain other    none      none      see below
 investments described below
-------------------------------------------------------------------------------



SALES CHARGES FOR LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA AND AMERICAN
FUNDS SHORT-TERM TAX-EXEMPT BOND FUND


                                        SALES CHARGE AS A
                                          PERCENTAGE OF:
                                                                  DEALER
                                                    NET         COMMISSION
                                        OFFERING   AMOUNT     AS A PERCENTAGE
 INVESTMENT                              PRICE    INVESTED   OF OFFERING PRICE
-------------------------------------------------------------------------------

 Less than $500,000                      2.50%     2.56%           2.00%
-------------------------------------------------------------------------------
 $500,000 but less than $750,000         2.00      2.04            1.60
-------------------------------------------------------------------------------
 $750,000 but less than $1 million       1.50      1.52            1.20
-------------------------------------------------------------------------------
 $1 million or more and certain other    none      none      see below
 investments described below
-------------------------------------------------------------------------------



The sales charge, expressed as a percentage of the offering price or the net
amount invested, may be higher or lower than the percentages described in the
tables above due to rounding. This is because the dollar amount of the sales
charge is determined by subtracting the net asset value of the shares purchased
from the offering price, which is calculated to two decimal places using
standard rounding criteria. The impact of rounding will vary with the size of
the investment and the net asset value of the shares. Similarly,


                                       58

Tax-exempt income funds / Prospectus


<PAGE>


any contingent deferred sales charge paid by you on investments in Class A
shares may be higher or lower than the 1% charge described below due to
rounding.

EXCEPT AS PROVIDED BELOW, INVESTMENTS IN CLASS A SHARES OF $1 MILLION OR MORE
MAY BE SUBJECT TO A 1% CONTINGENT DEFERRED SALES CHARGE IF THE SHARES ARE SOLD
WITHIN ONE YEAR OF PURCHASE. The contingent deferred sales charge is based on
the original purchase cost or the current market value of the shares being sold,
whichever is less.

CLASS A SHARE PURCHASES NOT SUBJECT TO SALES CHARGE

The following investments are not subject to any initial or contingent deferred
sales charge if American Funds Service Company is properly notified of the
nature of the investment:

. investments in Class A shares made by endowments or foundations with $50
 million or more in assets;

. investments made by accounts that are part of certain qualified fee-based
 programs and that purchased Class A shares before the discontinuation of your
 investment dealer's load-waived Class A share program with the American Funds;
 and

. certain rollover investments from retirement plans to IRAs (see "Rollovers
 from retirement plans to IRAs" in this prospectus for more information).

The distributor may pay dealers up to 1% on investments made in Class A shares
with no initial sales charge. The fund may reimburse the distributor for these
payments through its plans of distribution (see "Plans of distribution" in this
prospectus).

Certain other investors may qualify to purchase shares without a sales charge,
such as employees of investment dealers and registered investment advisers
authorized to sell American Funds, and employees of The Capital Group Companies,
Inc. Please see the statement of additional information for more information.

CLASS B AND C SHARES

Class C shares are sold without any initial sales charge. American Funds
Distributors pays 1% of the amount invested to dealers who sell Class C shares.
Direct purchases of Class C shares of Limited Term Tax-Exempt Bond Fund of
America are not permitted.

For Class B shares, a contingent deferred sales charge may be applied to shares
you sell within six years of purchase, as shown in the table below. The
contingent deferred sales charge is eliminated six years after purchase.



CONTINGENT DEFERRED SALES CHARGE ON CLASS B SHARES

YEAR OF REDEMPTION:                1    2    3    4    5    6     7+
----------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGE:  5%   4%   4%   3%   2%   1%    0%



For Class C shares, a contingent deferred sales charge of 1% applies if shares
are sold within one year of purchase. The contingent deferred sales charge is
eliminated one year after purchase.


                                       59

                                           Tax-exempt income funds / Prospectus
<PAGE>

Any contingent deferred sales charge paid by you on redemptions of Class B or C
shares, expressed as a percentage of the applicable redemption amount, may be
higher or lower than the percentages described above due to rounding.

Shares acquired through reinvestment of dividends or capital gain distributions
are not subject to a contingent deferred sales charge. In addition, the
contingent deferred sales charge may be waived in certain circumstances. See
"Contingent deferred sales charge waivers" in this prospectus. The contingent
deferred sales charge is based on the original purchase cost or the current
market value of the shares being sold, whichever is less. For purposes of
determining the contingent deferred sales charge, if you sell only some of your
shares, shares that are not subject to any contingent deferred sales charge will
be sold first, followed by shares that you have owned the longest.

See "Plans of distribution" in this prospectus for ongoing compensation paid to
your dealer or financial adviser for all share classes.

AUTOMATIC CONVERSION OF CLASS B AND C SHARES

Class B shares automatically convert to Class A shares in the month of the
eight-year anniversary of the purchase date. Class C shares automatically
convert to Class F-1 shares in the month of the 10-year anniversary of the
purchase date. The Internal Revenue Service currently takes the position that
these automatic conversions are not taxable. Should its position change, the
automatic conversion feature may be suspended. If this happens, you would have
the option of converting your Class B or C shares to the respective share
classes at the anniversary dates described above. This exchange would be based
on the relative net asset values of the two classes in question, without the
imposition of a sales charge or fee, but you might face certain tax consequences
as a result.

CLASS F SHARES

Class F shares are sold without any initial or contingent deferred sales charge.


                                       60

Tax-exempt income funds / Prospectus


<PAGE>

Sales charge reductions and waivers

TO RECEIVE A REDUCTION IN YOUR CLASS A INITIAL SALES CHARGE, YOU MUST LET YOUR
FINANCIAL ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW AT THE TIME YOU
PURCHASE SHARES THAT YOU QUALIFY FOR SUCH A REDUCTION. IF YOU DO NOT LET YOUR
ADVISER OR AMERICAN FUNDS SERVICE COMPANY KNOW THAT YOU ARE ELIGIBLE FOR A
REDUCTION, YOU MAY NOT RECEIVE A SALES CHARGE DISCOUNT TO WHICH YOU ARE
OTHERWISE ENTITLED. In order to determine your eligibility to receive a sales
charge discount, it may be necessary for you to provide your adviser or American
Funds Service Company with information and records (including account
statements) of all relevant accounts invested in the American Funds.

IN ADDITION TO THE INFORMATION IN THIS PROSPECTUS, YOU MAY OBTAIN MORE
INFORMATION ABOUT SHARE CLASSES, SALES CHARGES AND SALES CHARGE REDUCTIONS AND
WAIVERS THROUGH A LINK ON THE HOME PAGE OF THE AMERICAN FUNDS WEBSITE AT
AMERICANFUNDS.COM, FROM THE STATEMENT OF ADDITIONAL INFORMATION OR FROM YOUR
FINANCIAL ADVISER.

REDUCING YOUR CLASS A INITIAL SALES CHARGE

Consistent with the policies described in this prospectus, you and your
"immediate family" (your spouse -- or equivalent if recognized under local law
-- and your children under the age of 21) may combine all of your American Funds
investments to reduce your Class A sales charge. Certain investments in the
American Funds Target Date Retirement Series may also be combined for this
purpose. Please see the American Funds Target Date Retirement Series prospectus
for further information. However, for this purpose, investments representing
direct purchases of American Funds Money Market Fund are excluded. Following are
different ways that you may qualify for a reduced Class A sales charge:

 AGGREGATING ACCOUNTS

 To receive a reduced Class A sales charge, investments made by you and your
 immediate family (see above) may be aggregated if made for your own account(s)
 and/or certain other accounts, such as:

 .trust accounts established by the above individuals (please see the statement
  of additional information for details regarding aggregation of trust accounts
  where the person(s) who established the trust is/are deceased);

 . solely controlled business accounts; and

 . single-participant retirement plans.

 CONCURRENT PURCHASES

 You may combine simultaneous purchases (including, upon your request, purchases
 for gifts) of any class of shares of two or more American Funds (excluding
 American Funds Money Market Fund) to qualify for a reduced Class A sales
 charge.


                                       61

                                           Tax-exempt income funds / Prospectus
<PAGE>

 RIGHTS OF ACCUMULATION

 You may take into account your accumulated holdings in all share classes of the
 American Funds (excluding American Funds Money Market Fund) to determine the
 initial sales charge you pay on each purchase of Class A shares. Subject to
 your investment dealer's capabilities, your accumulated holdings will be
 calculated as the higher of (a) the current value of your existing holdings or
 (b) the amount you invested (including reinvested dividends and capital gains,
 but excluding capital appreciation) less any withdrawals. Please see the
 statement of additional information for further details. You should retain any
 records necessary to substantiate the historical amounts you have invested.

 If you make a gift of shares, upon your request you may purchase the shares at
 the sales charge discount allowed under rights of accumulation of all of your
 American Funds accounts.

 STATEMENT OF INTENTION

 You may reduce your Class A sales charge by establishing a statement of
 intention. A statement of intention allows you to combine all purchases of all
 share classes of the American Funds (excluding American Funds Money Market
 Fund) you intend to make over a 13-month period to determine the applicable
 sales charge; however, purchases made under a right of reinvestment,
 appreciation of your holdings, and reinvested dividends and capital gains do
 not count as purchases made during the statement period. The market value of
 your existing holdings eligible to be aggregated as of the day immediately
 before the start of the statement period may be credited toward satisfying the
 statement. A portion of your account may be held in escrow to cover additional
 Class A sales charges that may be due if your total purchases over the
 statement period do not qualify you for the applicable sales charge reduction.

RIGHT OF REINVESTMENT

If you notify American Funds Service Company, you may reinvest proceeds from a
redemption, dividend payment or capital gain distribution without a sales charge
in the same fund or other American Funds, provided that the reinvestment occurs
within 90 days after the date of the redemption or distribution and is made into
the same account from which you redeemed the shares or received the
distribution. If the account has been closed, you may reinvest without a sales
charge if the new receiving account has the same registration as the closed
account.

Proceeds from a Class B share redemption for which a contingent deferred sales
charge was paid will be reinvested in Class A shares without any initial sales
charge. If you redeem Class B shares without paying a contingent deferred sales
charge, you may 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.


                                       62

Tax-exempt income funds / Prospectus


<PAGE>


Proceeds from any other type of redemption and all dividend payments and capital
gain distributions will be reinvested in the same share class from which the
original redemption or distribution was made. Any contingent deferred sales
charge on Class A or C shares will be credited to your account. Redemption
proceeds of Class A shares representing direct purchases in American Funds Money
Market Fund that are reinvested in other American Funds will be subject to a
sales charge.

Proceeds will be reinvested at the next calculated net asset value after your
request is received by American Funds Service Company, provided that your
request contains all information and legal documentation necessary to process
the transaction. For purposes of this "right of reinvestment policy," automatic
transactions (including, for example, automatic purchases, withdrawals and
payroll deductions) and ongoing retirement plan contributions are not eligible
for investment without a sales charge. See the statement of additional
information for further information on the operation of this policy with respect
to required minimum distributions. You may not reinvest proceeds in the American
Funds as described in this paragraph if such proceeds are subject to a purchase
block as described under "Frequent trading of fund shares" in this prospectus.
This paragraph does not apply to certain rollover investments as described under
"Rollovers from retirement plans to IRAs" in this prospectus.

CONTINGENT DEFERRED SALES CHARGE WAIVERS

The contingent deferred sales charge on Class A, B and C shares may be waived in
the following cases:

. permitted exchanges of shares, except if shares acquired by exchange are then
 redeemed within the period during which a contingent deferred sales charge
 would apply to the initial shares purchased;

. tax-free returns of excess contributions to IRAs;

. redemptions due to death or postpurchase disability of the shareholder (this
 generally excludes accounts registered in the names of trusts and other
 entities);

. redemptions due to the complete termination of a trust upon the death of the
 trustor/ grantor or beneficiary, but only if such termination is specifically
 provided for in the trust document; and


                                       63

                                           Tax-exempt income funds / Prospectus
<PAGE>

. the following types of transactions, if together they do not exceed 12% of the
 value of an account annually (see the statement of additional information for
 more information about waivers regarding these types of transactions):

 -- redemptions due to receiving required minimum distributions from retirement
   accounts upon reaching 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); and

 -- if you have established an automatic withdrawal plan, redemptions through
   such a plan (including any dividends and/or capital gain distributions taken
   in cash).

To have your Class A, B or C contingent deferred sales charge waived, you must
inform your adviser or American Funds Service Company at the time you redeem
shares that you qualify for such a waiver.


                                       64

Tax-exempt income funds / Prospectus


<PAGE>

Rollovers from retirement plans to IRAs

EACH FUND RESERVES THE RIGHT NOT TO MAKE ITS SHARES AVAILABLE TO TAX-DEFERRED
RETIREMENT PLANS AND ACCOUNTS.

Assets from retirement plans may be invested in Class A, C or F shares through
an IRA rollover, subject to the other provisions of this prospectus. Rollovers
invested in Class A shares from retirement plans will be subject to applicable
sales charges. The following rollovers to Class A shares will be made without a
sales charge:

. rollovers to IRAs from 403(b) plans with Capital Bank and Trust Company as
 custodian; and

. rollovers to IRAs that are attributable to American Funds investments, if they
 meet the following requirements:

 -- the assets being rolled over were invested in American Funds at the time of
   distribution; and

 -- the rolled over assets are contributed to an American Funds IRA with Capital
   Bank and Trust Company as custodian.

IRA rollover assets that roll over without a sales charge as described above
will not be subject to a contingent deferred sales charge, and investment
dealers will be compensated solely with an annual service fee that begins to
accrue immediately. IRA rollover assets invested in Class A shares that are not
attributable to American Funds investments, as well as future contributions to
the IRA, will be subject to sales charges and the terms and conditions generally
applicable to Class A share investments as described in this prospectus and the
statement of additional information.


                                       65

                                           Tax-exempt income funds / Prospectus
<PAGE>

Plans of distribution

Each fund has plans of distribution or "12b-1 plans" for certain share classes,
under which it may finance activities primarily intended to sell shares,
provided that the categories of expenses are approved in advance by each fund's
board of directors/trustees. The plans provide for payments, based on annualized
percentages of average daily net assets, of up to .25% for The Tax-Exempt Bond
Fund of America and The Tax-Exempt Fund of California, up to .30% for American
High-Income Municipal Bond Fund and Limited Term Tax-Exempt Bond Fund of
America, and up to .15% for American Funds Short-Term Tax-Exempt Bond Fund for
Class A shares, up to 1.00% for Class B shares, up to 1.00% for Class C shares,
and up to .50% for Class F-1 shares. For all share classes indicated above, up
to .25% (.15% for Class A shares of American Funds Short-Term Tax-Exempt Bond
Fund) of these expenses may be used to pay service fees to qualified dealers for
providing certain shareholder services. The amount remaining for each share
class may be used for distribution expenses.

The 12b-1 fees paid by each fund, as a percentage of average net assets for the
previous fiscal year, are indicated in the Annual Fund Operating Expenses table
under "Fees and expenses of the fund" in this prospectus. Since these fees are
paid out of each fund's assets or income on an ongoing basis, over time they
will increase the cost and reduce the return of your investment. The higher fees
for Class B and C shares may cost you more over time than paying the initial
sales charge for Class A shares.


                                       66

Tax-exempt income funds / Prospectus


<PAGE>

Other compensation to dealers

American Funds Distributors, at its expense, currently provides additional
compensation to investment dealers. These payments may be made, at the
discretion of American Funds Distributors, to the top 100 dealers (or their
affiliates) that have sold shares of the American Funds. The level of payments
made to a qualifying firm in any given year will vary and in no case would
exceed the sum of (a) .10% of the previous year's American Funds sales by that
dealer and (b) .02% of American Funds assets attributable to that dealer. For
calendar year 2008, aggregate payments made by American Funds Distributors to
dealers were less than .02% of the average assets of the American Funds.
Aggregate payments may also change from year to year. A number of factors will
be considered in determining payments, including the qualifying dealer's sales,
assets and redemption rates, and the quality of the dealer's relationship with
American Funds Distributors. American Funds Distributors makes these payments to
help defray the costs incurred by qualifying dealers in connection with efforts
to educate financial advisers about the American Funds so that they can make
recommendations and provide services that are suitable and meet shareholder
needs. American Funds Distributors will, on an annual basis, determine the
advisability of continuing these payments. American Funds Distributors may also
pay expenses associated with meetings conducted by dealers outside the top 100
firms to facilitate educating financial advisers and shareholders about the
American Funds. If investment advisers, distributors or other affiliates of
mutual funds pay additional compensation or other incentives in differing
amounts, dealer firms and their advisers may have financial incentives for
recommending a particular mutual fund over other mutual funds. You should
consult with your financial adviser and review carefully any disclosure by your
financial adviser's firm as to compensation received.


                                       67

                                           Tax-exempt income funds / Prospectus
<PAGE>

How to sell shares

You may sell (redeem) shares in any of the following ways:

 THROUGH YOUR DEALER OR FINANCIAL ADVISER (CERTAIN CHARGES MAY APPLY)

 . Shares held for you in your dealer's name must be sold through the dealer.

 . Class F shares must be sold through your dealer or financial adviser.

 WRITING TO AMERICAN FUNDS SERVICE COMPANY

 . Requests must be signed by the registered shareholder(s).

 . A signature guarantee is required if the redemption is:

  -- more than $75,000;

  -- made payable to someone other than the registered shareholder(s); or

  -- sent to an address other than the address of record or to an address of
    record that has been changed within the last 10 days.

 . American Funds Service Company reserves the right to require signature
  guarantee(s) on any redemption.

 . Additional documentation may be required for redemptions of shares held in
  corporate, partnership or fiduciary accounts.

 TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY OR USING THE INTERNET

 . Redemptions by telephone, fax or the Internet (including American FundsLine
  and americanfunds.com) are limited to $75,000 per American Funds shareholder
  each day.

 . Checks must be made payable to the registered shareholder.

 . Checks must be mailed to an address of record that has been used with the
  account for at least 10 days.

If you recently purchased shares and subsequently request a redemption of those
shares, you will receive proceeds from the redemption once a sufficient period
of time has passed to reasonably ensure that checks or drafts (including
certified or cashier's checks) for the shares purchased have cleared (normally
10 business days).


                                       68

Tax-exempt income funds / Prospectus


<PAGE>

TRANSACTIONS BY TELEPHONE, FAX OR THE INTERNET

Generally, you are automatically eligible to redeem or exchange shares by
telephone, fax or the Internet, unless you notify us in writing that you do not
want any or all of these services. You may reinstate these services at any time.

Unless you decide not to have telephone, fax or Internet services on your
account(s), you agree to hold each fund, American Funds Service Company, 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 liabilities (including attorney fees) that may be
incurred in connection with the exercise of these privileges, provided that
American Funds Service Company employs reasonable procedures to confirm that the
instructions received from any person with appropriate account information are
genuine. If reasonable procedures are not employed, American Funds Service
Company and/or the relevant fund may be liable for losses due to unauthorized or
fraudulent instructions.


                                       69

                                           Tax-exempt income funds / Prospectus
<PAGE>

Distributions and taxes

DIVIDENDS AND DISTRIBUTIONS

Each fund declares daily dividends from net investment income and distributes
the accrued dividends, which may fluctuate, to you each month. Dividends begin
accruing one day after payment for shares is received by the funds or American
Funds Service Company.

Capital gains, if any, are usually distributed in November or December. When a
capital gain is distributed, the net asset value per share is reduced by the
amount of the payment.

You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of these funds or other American Funds, or you may
elect to receive them in cash. Most shareholders do not elect to take capital
gain distributions in cash because these distributions reduce principal value.

TAXES ON DIVIDENDS AND DISTRIBUTIONS

Interest on municipal bonds is generally not included in gross income for
federal tax purposes. Subject to certain requirements, each fund is permitted to
pass through to its shareholders the interest earned on municipal bonds as
federally exempt-interest dividends. Taxable dividends, including distributions
of short-term capital gains, however, are subject to federal taxation at the
applicable rates for ordinary income. To the extent a fund is permitted to
invest in bonds subject to the federal alternative minimum tax, interest earned
on certain bonds may be treated as income subject to federal alternative minimum
tax. Each fund's distributions of net long-term capital gains are taxable as
long-term capital gains.

Depending on their state of residence, shareholders of The Tax-Exempt Bond Fund
of America, American High-Income Municipal Bond Fund, Limited Term Tax-Exempt
Bond Fund of America and American Funds Short-Term Tax-Exempt Bond Fund may be
able to exempt from state taxation some or all of the federally tax-exempt
income dividends paid by those funds.

The Tax-Exempt Fund of California anticipates that the federally exempt-interest
dividends paid by the fund and derived from interest on bonds exempt from
California income tax will also be exempt from California state income tax. To
the extent the fund's dividends are derived from interest on debt obligations
that is not exempt from California income tax, however, such dividends will be
subject to state income tax.

Moreover, any federally taxable dividends and capital gains distributions from
The Tax-Exempt Bond Fund of America, American High-Income Municipal Bond Fund,
Limited Term Tax-Exempt Bond Fund of America, The Tax-Exempt Fund of California
and American Funds Short-Term Tax-Exempt Bond Fund may also be subject to state
tax.


                                       70

Tax-exempt income funds / Prospectus


<PAGE>

Any taxable dividends or capital gain distributions you receive from each fund
normally will be taxable to you when made, regardless of whether you reinvest
dividends or capital gain distributions or receive them in cash.

TAXES ON TRANSACTIONS

Your redemptions, including exchanges, may result in a capital gain or loss for
federal tax purposes. A capital gain or loss on your investment is the
difference between the cost of your shares, including any sales charges, and the
amount you receive when you sell them.

SHAREHOLDER FEES

Fees borne directly by a fund normally have the effect of reducing a
shareholder's taxable income on distributions. By contrast, fees paid directly
to advisers by a fund shareholder for ongoing advice are deductible for income
tax purposes only to the extent that they (combined with certain other
qualifying expenses) exceed 2% of such shareholder's adjusted gross income.

PLEASE SEE YOUR TAX ADVISER FOR MORE INFORMATION.


                                       71

                                           Tax-exempt income funds / Prospectus
<PAGE>



Financial highlights

The Financial Highlights tables are intended to help you understand each fund's
results for the past five fiscal years. Certain information reflects financial
results for a single share of a particular class. The information for the
periods provided for American Funds Short-Term Tax-Exempt Bond Fund is prior to
the fund's conversion from a money market fund to a short-term tax-exempt bond
fund, but reflects the 10-for-1 reverse stock split of the shares of the fund,
effective August 7, 2009. The total returns in the tables represent the rate
that an investor would have earned or lost on an investment in each fund
(assuming reinvestment of all dividends and capital gain distributions). Where
indicated, figures in the table reflect the impact, if any, of certain waivers
from Capital Research and Management Company. For more information about these
waivers, see the funds' statement of additional information and annual report.
The information in the Financial Highlights tables for The Tax-Exempt Bond Fund
of America, American High-Income Municipal Bond Fund, Limited Term Tax-Exempt
Bond Fund of America and American Funds Short-Term Tax-Exempt Bond Fund has been
audited by PricewaterhouseCoopers LLP, and the information for The Tax-Exempt
Fund of California has been audited by Deloitte & Touche LLP. The independent
registered public accounting firms' reports, along with each fund's financial
statements, are included in the statement of additional information for the
funds, which is available upon request.

THE TAX-EXEMPT BOND FUND OF AMERICA




                                                   INCOME FROM INVESTMENT OPERATIONS/1/
                                                                   Net
                                                              (losses) gains
                                       Net asset              on securities               Dividends
                                        value,       Net      (both realized  Total from  (from net     Net asset
                                       beginning  investment       and        investment  investment  value, end of
                                       of period    income     unrealized)    operations   income)       period
---------------------------------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 8/31/2009                   $12.03       $.50         $(.21)         $.29       $(.50)       $11.82
 Year ended 8/31/2008                    12.19        .51          (.16)          .35        (.51)        12.03
 Year ended 8/31/2007                    12.49        .50          (.30)          .20        (.50)        12.19
 Year ended 8/31/2006                    12.60        .50          (.11)          .39        (.50)        12.49
 Year ended 8/31/2005                    12.51        .51           .09           .60        (.51)        12.60
---------------------------------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 8/31/2009                   $12.03       $.41         $(.21)         $.20       $(.41)       $11.82
 Year ended 8/31/2008                    12.19        .41          (.16)          .25        (.41)        12.03
 Year ended 8/31/2007                    12.49        .41          (.30)          .11        (.41)        12.19
 Year ended 8/31/2006                    12.60        .41          (.11)          .30        (.41)        12.49
 Year ended 8/31/2005                    12.51        .41           .09           .50        (.41)        12.60
---------------------------------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 8/31/2009                    12.03        .41          (.21)          .20        (.41)        11.82
 Year ended 8/31/2008                    12.19        .41          (.16)          .25        (.41)        12.03
 Year ended 8/31/2007                    12.49        .40          (.30)          .10        (.40)        12.19
 Year ended 8/31/2006                    12.60        .40          (.11)          .29        (.40)        12.49
 Year ended 8/31/2005                    12.51        .40           .09           .49        (.40)        12.60
---------------------------------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 8/31/2009                    12.03        .49          (.21)          .28        (.49)        11.82
 Year ended 8/31/2008                    12.19        .50          (.16)          .34        (.50)        12.03
 Year ended 8/31/2007                    12.49        .49          (.30)          .19        (.49)        12.19
 Year ended 8/31/2006                    12.60        .49          (.11)          .38        (.49)        12.49
 Year ended 8/31/2005                    12.51        .49           .09           .58        (.49)        12.60
---------------------------------------------------------------------------------------------------------------------
 CLASS F-2:
 Year ended 8/31/2009                    12.03        .51          (.21)          .30        (.51)        11.82
 Period from 8/1/2008 to 8/31/2008/4/    11.94        .04           .09           .13        (.04)        12.03


                                                                      Ratio of    Ratio of
                                                                      expenses    expenses
                                                       Net assets,   to average  to average     Ratio of
                                                         end of      net assets  net assets     net income
                                           Total         period        before      after        to average
                                       return/2,3/    (in millions)   waivers    waivers/3/   net assets/3/
------------------------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 8/31/2009                      2.65%         $7,130         .56%        .56%          4.39%
 Year ended 8/31/2008                      2.87           6,319         .56         .53           4.16
 Year ended 8/31/2007                      1.60           5,259         .57         .54           4.02
 Year ended 8/31/2006                      3.18           4,267         .59         .56           4.04
 Year ended 8/31/2005                      4.87           3,581         .60         .57           4.08
------------------------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 8/31/2009                      1.88%         $  107        1.32%       1.31%          3.65%
 Year ended 8/31/2008                      2.10             114        1.31        1.28           3.42
 Year ended 8/31/2007                       .85             117        1.32        1.29           3.28
 Year ended 8/31/2006                      2.42             120        1.34        1.32           3.29
 Year ended 8/31/2005                      4.10             121        1.35        1.33           3.33
------------------------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 8/31/2009                      1.83             399        1.36        1.36           3.58
 Year ended 8/31/2008                      2.05             313        1.36        1.33           3.36
 Year ended 8/31/2007                       .79             244        1.37        1.34           3.22
 Year ended 8/31/2006                      2.37             196        1.40        1.37           3.22
 Year ended 8/31/2005                      3.98             165        1.46        1.44           3.21
------------------------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 8/31/2009                      2.56             976         .65         .64           4.31
 Year ended 8/31/2008                      2.79           1,020         .63         .61           4.07
 Year ended 8/31/2007                      1.52             785         .64         .61           3.93
 Year ended 8/31/2006                      3.11             425         .65         .62           3.96
 Year ended 8/31/2005                      4.74             227         .72         .69           3.95
------------------------------------------------------------------------------------------------------------
 CLASS F-2:
 Year ended 8/31/2009                      2.80             253         .39         .39           4.36
 Period from 8/1/2008 to 8/31/2008/4/      1.10               3         .04         .03            .34






                                       72

Tax-exempt income funds / Prospectus


<PAGE>





                                           YEAR ENDED AUGUST 31
                           2009        2008        2007        2006         2005
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
RATE FOR ALL CLASSES       18%         20%          8%          9%           9%
OF SHARES




1 Based on average shares outstanding.
2 Total returns exclude any applicable sales charges, including contingent
 deferred sales charges.

3 This column reflects the impact, if any, of certain waivers from Capital
 Research and Management Company. During the periods shown, Capital Research and
 Management Company reduced fees for investment advisory services.
4 Based on operations for the period shown and, accordingly, may not be
 representative of a full year.


                                       73

                                           Tax-exempt income funds / Prospectus

<PAGE>




AMERICAN HIGH-INCOME MUNICIPAL BOND FUND




                                                   (LOSS) INCOME FROM INVESTMENT OPERATIONS/1/
                                                                       Net
                                                                  (losses) gains
                                        Net asset                 on securities                  Dividends
                                         value,        Net        (both realized    Total from   (from net     Net asset
                                        beginning   investment         and          investment   investment  value, end of
                                        of period     income       unrealized)      operations    income)       period
----------------------------------------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 7/31/2009                    $14.21        $.68          $(1.52)          $(.84)       $(.68)       $12.69
 Year ended 7/31/2008                     15.54         .72           (1.34)           (.62)        (.71)        14.21
 Year ended 7/31/2007                     15.60         .70            (.06)            .64         (.70)        15.54
 Year ended 7/31/2006                     15.61         .70            (.02)            .68         (.69)        15.60
 Year ended 7/31/2005                     15.23         .68             .37            1.05         (.67)        15.61
----------------------------------------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 7/31/2009                     14.21         .59           (1.52)           (.93)        (.59)        12.69
 Year ended 7/31/2008                     15.54         .61           (1.34)           (.73)        (.60)        14.21
 Year ended 7/31/2007                     15.60         .59            (.06)            .53         (.59)        15.54
 Year ended 7/31/2006                     15.61         .59            (.02)            .57         (.58)        15.60
 Year ended 7/31/2005                     15.23         .58             .37             .95         (.57)        15.61
----------------------------------------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 7/31/2009                     14.21         .58           (1.52)           (.94)        (.58)        12.69
 Year ended 7/31/2008                     15.54         .61           (1.34)           (.73)        (.60)        14.21
 Year ended 7/31/2007                     15.60         .58            (.06)            .52         (.58)        15.54
 Year ended 7/31/2006                     15.61         .58            (.02)            .56         (.57)        15.60
 Year ended 7/31/2005                     15.23         .56             .37             .93         (.55)        15.61
----------------------------------------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 7/31/2009                     14.21         .67           (1.52)           (.85)        (.67)        12.69
 Year ended 7/31/2008                     15.54         .71           (1.34)           (.63)        (.70)        14.21
 Year ended 7/31/2007                     15.60         .69            (.06)            .63         (.69)        15.54
 Year ended 7/31/2006                     15.61         .69            (.02)            .67         (.68)        15.60
 Year ended 7/31/2005                     15.23         .67             .37            1.04         (.66)        15.61
----------------------------------------------------------------------------------------------------------------------------
 CLASS F-2:
 Period from 8/12/2008 to 7/31/2009/4/    14.28         .66           (1.58)           (.92)        (.67)        12.69






                                             Total
                                        return/2,3/
---------------------------------------------------------

 CLASS A:
 Year ended 7/31/2009                       (5.69)%
 Year ended 7/31/2008                       (4.07)
 Year ended 7/31/2007                        4.12
 Year ended 7/31/2006                        4.44
 Year ended 7/31/2005                        7.03
---------------------------------------------------------
 CLASS B:
 Year ended 7/31/2009                       (6.39)
 Year ended 7/31/2008                       (4.76)
 Year ended 7/31/2007                        3.40
 Year ended 7/31/2006                        3.71
 Year ended 7/31/2005                        6.30
---------------------------------------------------------
 CLASS C:
 Year ended 7/31/2009                       (6.44)
 Year ended 7/31/2008                       (4.80)
 Year ended 7/31/2007                        3.35
 Year ended 7/31/2006                        3.66
 Year ended 7/31/2005                        6.17
---------------------------------------------------------
 CLASS F-1:
 Year ended 7/31/2009                       (5.77)
 Year ended 7/31/2008                       (4.12)
 Year ended 7/31/2007                        4.08
 Year ended 7/31/2006                        4.41
 Year ended 7/31/2005                        6.95
---------------------------------------------------------
 CLASS F-2:
 Period from 8/12/2008 to 7/31/2009/4/      (6.19)


                                                        Ratio of     Ratio of
                                                       expenses to  expenses to
                                         Net assets,     average      average       Ratio of
                                           end of      net assets   net assets      net income
                                           period        before        after        to average
                                        (in millions)    waivers    waivers/3/    net assets/3/
------------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 7/31/2009                      $1,738         .72 %        .70 %         5.43 %
 Year ended 7/31/2008                       1,851         .69          .65           4.83
 Year ended 7/31/2007                       1,932         .70          .67           4.44
 Year ended 7/31/2006                       1,597         .69          .66           4.47
 Year ended 7/31/2005                       1,370         .71          .69           4.39
------------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 7/31/2009                          43        1.46         1.45           4.70
 Year ended 7/31/2008                          54        1.41         1.37           4.11
 Year ended 7/31/2007                          66        1.41         1.38           3.74
 Year ended 7/31/2006                          66        1.41         1.38           3.75
 Year ended 7/31/2005                          65        1.42         1.40           3.69
------------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 7/31/2009                         126        1.51         1.50           4.63
 Year ended 7/31/2008                         120        1.45         1.42           4.06
 Year ended 7/31/2007                         120        1.46         1.43           3.68
 Year ended 7/31/2006                         101        1.46         1.43           3.70
 Year ended 7/31/2005                          90        1.54         1.52           3.55
------------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 7/31/2009                         156         .80          .78           5.35
 Year ended 7/31/2008                         168         .74          .70           4.77
 Year ended 7/31/2007                         167         .74          .71           4.39
 Year ended 7/31/2006                         121         .72          .69           4.43
 Year ended 7/31/2005                          86         .78          .76           4.29
------------------------------------------------------------------------------------------------
 CLASS F-2:
 Period from 8/12/2008 to 7/31/2009/4/         32         .53/5/       .53/5/        5.50/5/




                                       74


Tax-exempt income funds / Prospectus


<PAGE>





                                            YEAR ENDED JULY 31
                           2009        2008        2007        2006         2005
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
RATE FOR ALL CLASSES       29%         27%         23%         14%          10%
OF SHARES




1 Based on average shares outstanding.
2 Total returns exclude any applicable sales charges, including contingent
 deferred sales charges.

3 This column reflects the impact, if any, of certain waivers from Capital
 Research and Management Company. During the periods shown, Capital Research and
 Management Company reduced fees for investment advisory services.
4 Based on operations for the period shown and, accordingly, may not be
 representative of a full year.
5 Annualized.

                                       75


                                           Tax-exempt income funds / Prospectus



<PAGE>



LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA




                                                        INCOME FROM INVESTMENT OPERATIONS/1/
                                                                        Net
                                                                   gains (losses)
                                            Net asset              on securities
                                             value,       Net      (both realized  Total from
                                            beginning  investment       and        investment
                                            of period    income     unrealized)    operations
-----------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 7/31/2009                        $15.01       $.50         $ .10          $.60
 Year ended 7/31/2008                         15.11        .54          (.10)          .44
 Year ended 7/31/2007                         15.14        .53          (.03)          .50
 Year ended 7/31/2006                         15.34        .50          (.20)          .30
 Year ended 7/31/2005                         15.33        .51           .01           .52
-----------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 7/31/2009                         15.01        .40           .10           .50
 Year ended 7/31/2008                         15.11        .43          (.10)          .33
 Year ended 7/31/2007                         15.14        .42          (.03)          .39
 Year ended 7/31/2006                         15.34        .40          (.20)          .20
 Year ended 7/31/2005                         15.33        .40           .01           .41
-----------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 7/31/2009                         15.01        .39           .10           .49
 Year ended 7/31/2008                         15.11        .42          (.10)          .32
 Year ended 7/31/2007                         15.14        .42          (.03)          .39
 Year ended 7/31/2006                         15.34        .39          (.20)          .19
 Year ended 7/31/2005                         15.33        .38           .01           .39
-----------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 7/31/2009                         15.01        .50           .10           .60
 Year ended 7/31/2008                         15.11        .53          (.10)          .43
 Year ended 7/31/2007                         15.14        .53          (.03)          .50
 Year ended 7/31/2006                         15.34        .50          (.20)          .30
 Year ended 7/31/2005                         15.33        .50           .01           .51
-----------------------------------------------------------------------------------------------
 CLASS F-2:
 Period from 8/18/2008 to 7/31/2009/4/        15.15        .50          (.04)          .46




                                            Dividends
                                            (from net     Net asset
                                            investment  value, end of     Total
                                             income)       period      return/2,3/
------------------------------------------------------------------------------------

 CLASS A:
 Year ended 7/31/2009                         $(.50)       $15.11         4.12%
 Year ended 7/31/2008                          (.54)        15.01         2.91
 Year ended 7/31/2007                          (.53)        15.11         3.33
 Year ended 7/31/2006                          (.50)        15.14         2.00
 Year ended 7/31/2005                          (.51)        15.34         3.40
------------------------------------------------------------------------------------
 CLASS B:
 Year ended 7/31/2009                          (.40)        15.11         3.40
 Year ended 7/31/2008                          (.43)        15.01         2.18
 Year ended 7/31/2007                          (.42)        15.11         2.62
 Year ended 7/31/2006                          (.40)        15.14         1.30
 Year ended 7/31/2005                          (.40)        15.34         2.69
------------------------------------------------------------------------------------
 CLASS C:
 Year ended 7/31/2009                          (.39)        15.11         3.35
 Year ended 7/31/2008                          (.42)        15.01         2.14
 Year ended 7/31/2007                          (.42)        15.11         2.56
 Year ended 7/31/2006                          (.39)        15.14         1.25
 Year ended 7/31/2005                          (.38)        15.34         2.57
------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 7/31/2009                          (.50)        15.11         4.11
 Year ended 7/31/2008                          (.53)        15.01         2.89
 Year ended 7/31/2007                          (.53)        15.11         3.32
 Year ended 7/31/2006                          (.50)        15.14         2.00
 Year ended 7/31/2005                          (.50)        15.34         3.32
------------------------------------------------------------------------------------
 CLASS F-2:
 Period from 8/18/2008 to 7/31/2009/4/         (.50)        15.11         3.15


                                                            Ratio of     Ratio of
                                                           expenses to  expenses to
                                             Net assets,     average      average       Ratio of
                                               end of      net assets   net assets      net income
                                               period        before        after        to average
                                            (in millions)    waivers    waivers/3/    net assets/3/
----------------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 7/31/2009                          $1,700         .64 %        .63 %         3.36 %
 Year ended 7/31/2008                             971         .66          .63           3.51
 Year ended 7/31/2007                             763         .68          .65           3.47
 Year ended 7/31/2006                             800         .66          .63           3.30
 Year ended 7/31/2005                             857         .66          .64           3.29
----------------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 7/31/2009                              25        1.34         1.33           2.69
 Year ended 7/31/2008                              25        1.37         1.34           2.83
 Year ended 7/31/2007                              30        1.38         1.35           2.78
 Year ended 7/31/2006                              41        1.37         1.33           2.59
 Year ended 7/31/2005                              50        1.37         1.35           2.59
----------------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 7/31/2009                              73        1.39         1.38           2.64
 Year ended 7/31/2008                              60        1.42         1.38           2.77
 Year ended 7/31/2007                              60        1.44         1.41           2.72
 Year ended 7/31/2006                              78        1.41         1.38           2.55
 Year ended 7/31/2005                             100        1.49         1.47           2.46
----------------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 7/31/2009                             108         .66          .64           3.33
 Year ended 7/31/2008                              74         .67          .64           3.49
 Year ended 7/31/2007                              52         .68          .65           3.46
 Year ended 7/31/2006                              46         .66          .63           3.29
 Year ended 7/31/2005                              40         .74          .72           3.20
----------------------------------------------------------------------------------------------------
 CLASS F-2:
 Period from 8/18/2008 to 7/31/2009/4/            204         .38/5/       .38/5/        3.51/5/




                                       76


Tax-exempt income funds / Prospectus


<PAGE>





                                            YEAR ENDED JULY 31
                           2009        2008        2007        2006         2005
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
RATE FOR ALL CLASSES        7%         16%         26%         25%          12%
OF SHARES




1 Based on average shares outstanding.
2 Total returns exclude any applicable sales charges, including contingent
 deferred sales charges.

3 This column reflects the impact, if any, of certain waivers from Capital
 Research and Management Company. During the periods shown, Capital Research and
 Management Company reduced fees for investment advisory services.
4 Based on operations for the period shown and, accordingly, may not be
 representative of a full year.
5 Annualized.


                                       77

                                           Tax-exempt income funds / Prospectus



<PAGE>




THE TAX-EXEMPT FUND OF CALIFORNIA




                                                   INCOME FROM INVESTMENT OPERATIONS/1/
                                                                    Net
                                                                 (losses)
                                                                   gains
                                                               on securities
                                        Net asset                  (both
                                         value,       Net        realized     Total from
                                        beginning  investment       and       investment
                                        of period    income     unrealized)   operations
------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 8/31/2009                    $15.79       $.67        $(.48 )        $.19
 Year ended 8/31/2008                     16.26        .66         (.47 )         .19
 Year ended 8/31/2007                     16.75        .67         (.49 )         .18
 Year ended 8/31/2006                     16.88        .66         (.12 )         .54
 Year ended 8/31/2005                     16.66        .67          .24           .91
------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 8/31/2009                     15.79        .56         (.48 )         .08
 Year ended 8/31/2008                     16.26        .54         (.47 )         .07
 Year ended 8/31/2007                     16.75        .55         (.49 )         .06
 Year ended 8/31/2006                     16.88        .54         (.12 )         .42
 Year ended 8/31/2005                     16.66        .55          .24           .79
------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 8/31/2009                     15.79        .55         (.48 )         .07
 Year ended 8/31/2008                     16.26        .54         (.47 )         .07
 Year ended 8/31/2007                     16.75        .54         (.49 )         .05
 Year ended 8/31/2006                     16.88        .53         (.12 )         .41
 Year ended 8/31/2005                     16.66        .53          .24           .77
------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 8/31/2009                     15.79        .65         (.48 )         .17
 Year ended 8/31/2008                     16.26        .65         (.47 )         .18
 Year ended 8/31/2007                     16.75        .66         (.49 )         .17
 Year ended 8/31/2006                     16.88        .65         (.12 )         .53
 Year ended 8/31/2005                     16.66        .65          .24           .89
------------------------------------------------------------------------------------------
 CLASS F-2:
 Year ended 8/31/2009                     15.79        .69         (.48 )         .21
 Period from 8/22/2008 to 8/31/2008/4/    15.79        .02           --/5/        .02

                                               DIVIDENDS AND DISTRIBUTIONS




                                        Dividends                       Total      Net asset
                                        (from net   Distributions     dividends     value,
                                        investment      (from            and        end of        Total
                                         income)    capital gains)  distributions   period    return/2,3/
-------------------------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 8/31/2009                     $(.67)          --           $(.67)       $15.31        1.49%
 Year ended 8/31/2008                      (.66)          --            (.66)        15.79        1.22
 Year ended 8/31/2007                      (.67)          --            (.67)        16.26        1.05
 Year ended 8/31/2006                      (.66)        (.01)           (.67)        16.75        3.28
 Year ended 8/31/2005                      (.67)        (.02)           (.69)        16.88        5.57
-------------------------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 8/31/2009                      (.56)          --            (.56)        15.31         .73
 Year ended 8/31/2008                      (.54)          --            (.54)        15.79         .46
 Year ended 8/31/2007                      (.55)          --            (.55)        16.26         .31
 Year ended 8/31/2006                      (.54)        (.01)           (.55)        16.75        2.52
 Year ended 8/31/2005                      (.55)        (.02)           (.57)        16.88        4.79
-------------------------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 8/31/2009                      (.55)          --            (.55)        15.31         .68
 Year ended 8/31/2008                      (.54)          --            (.54)        15.79         .41
 Year ended 8/31/2007                      (.54)          --            (.54)        16.26         .26
 Year ended 8/31/2006                      (.53)        (.01)           (.54)        16.75        2.46
 Year ended 8/31/2005                      (.53)        (.02)           (.55)        16.88        4.67
-------------------------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 8/31/2009                      (.65)          --            (.65)        15.31        1.41
 Year ended 8/31/2008                      (.65)          --            (.65)        15.79        1.14
 Year ended 8/31/2007                      (.66)          --            (.66)        16.26         .98
 Year ended 8/31/2006                      (.65)        (.01)           (.66)        16.75        3.22
 Year ended 8/31/2005                      (.65)        (.02)           (.67)        16.88        5.44
-------------------------------------------------------------------------------------------------------------
 CLASS F-2:
 Year ended 8/31/2009                      (.69)          --            (.69)        15.31        1.67
 Period from 8/22/2008 to 8/31/2008/4/     (.02)          --            (.02)        15.79         .09



                                                        Ratio of    Ratio of    Ratio of
                                                        expenses    expenses       net
                                                           to          to        income
                                         Net assets,    average     average         to
                                           end of      net assets  net assets    average
                                           period        before      after         net
                                        (in millions)   waivers    waivers/3/   assets/3/
------------------------------------------------------------------------------------------

 CLASS A:
 Year ended 8/31/2009                      $1,311         .63%        .62%        4.59%
 Year ended 8/31/2008                       1,493         .61         .58         4.16
 Year ended 8/31/2007                       1,366         .62         .59         4.01
 Year ended 8/31/2006                       1,070         .63         .60         4.00
 Year ended 8/31/2005                         838         .65         .62         4.02
------------------------------------------------------------------------------------------
 CLASS B:
 Year ended 8/31/2009                          16        1.39        1.37         3.85
 Year ended 8/31/2008                          21        1.36        1.33         3.41
 Year ended 8/31/2007                          22        1.37        1.34         3.27
 Year ended 8/31/2006                          23        1.39        1.36         3.25
 Year ended 8/31/2005                          23        1.40        1.38         3.28
------------------------------------------------------------------------------------------
 CLASS C:
 Year ended 8/31/2009                         105        1.43        1.42         3.79
 Year ended 8/31/2008                         118        1.41        1.38         3.36
 Year ended 8/31/2007                         116        1.42        1.39         3.20
 Year ended 8/31/2006                          97        1.44        1.41         3.19
 Year ended 8/31/2005                          78        1.52        1.49         3.14
------------------------------------------------------------------------------------------
 CLASS F-1:
 Year ended 8/31/2009                         113         .71         .70         4.52
 Year ended 8/31/2008                         192         .69         .65         4.08
 Year ended 8/31/2007                         180         .69         .66         3.93
 Year ended 8/31/2006                         102         .69         .66         3.91
 Year ended 8/31/2005                          42         .77         .74         3.86
------------------------------------------------------------------------------------------
 CLASS F-2:
 Year ended 8/31/2009                          99         .45         .45         4.61
 Period from 8/22/2008 to 8/31/2008/4/      --/6/         .01         .01          .10




                                       78


Tax-exempt income funds / Prospectus


<PAGE>





                                           YEAR ENDED AUGUST 31
                           2009        2008        2007        2006         2005
------------------------------------------------------------------------------------

 PORTFOLIO TURNOVER
RATE FOR ALL CLASSES       17%         16%          8%         14%          11%
OF SHARES




1 Based on average shares outstanding.
2 Total returns exclude any applicable sales charges, including contingent
 deferred sales charges.

3 This column reflects the impact, if any, of certain waivers from Capital
 Research and Management Company. During the periods shown, Capital Research and
 Management Company reduced fees for investment advisory services.
4 Based on operations for the period shown and, accordingly, may not be
 representative of a full year.
5 Amount less than $.01.
6 Amount less than $1 million.


                                       79

                                           Tax-exempt income funds / Prospectus



<PAGE>





AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND/1/

(FORMERLY THE TAX-EXEMPT MONEY FUND OF AMERICA)









                        Net asset              Dividends   Net asset
                         value,       Net      (from net    value,
                        beginning  investment  investment     end       Total
                        of period  income/2/    income)    of period  return/3/
---------------------------------------------------------------------------------

CLASS A:
Period from 10/1/2008    $10.00       $.03       $(.03)     $10.00       .33%
to 7/31/2009/4,5/
Year ended 9/30/2008      10.00        .20        (.20)      10.00      1.99
Year ended 9/30/2007      10.00        .31        (.31)      10.00      3.19
Year ended 9/30/2006      10.00        .27        (.27)      10.00      2.76
Year ended 9/30/2005      10.00        .16        (.16)      10.00      1.63
Year ended 9/30/2004      10.00        .05        (.05)      10.00       .49


                                         Ratio of       Ratio of
                                        expenses to   expenses to
                                        average net   average net
                         Net assets,   assets before  assets after   Ratio of net
                           end of          reim-         reim-        income to
                           period       bursements/   bursements/    average net
                        (in millions)     waivers      waivers/3/     assets/3/
----------------------------------------------------------------------------------

CLASS A:
Period from 10/1/2008       $501           .52%/6/       .46%/6/         .44%/6/
to 7/31/2009/4,5/
Year ended 9/30/2008         810           .47           .43            1.93
Year ended 9/30/2007         580           .51           .47            3.14
Year ended 9/30/2006         460           .52           .48            2.73
Year ended 9/30/2005         405           .53           .50            1.61
Year ended 9/30/2004         418           .53           .53             .49




1 The table reflects the board of trustees' approval of a 10-for-1 reverse stock
 split of the shares of the fund, effective August 7, 2009.
2 Based on average shares outstanding.

3 This column reflects the impact, if any, of certain reimbursements/waivers
 from Capital Research and Management Company. During the periods shown, Capital
 Research and Management Company reduced fees for investment advisory services.
 In addition, for the 10 months ended July 31, 2009, Capital Research and
 Management Company agreed to pay a portion of fees and expenses due to lower
 short-term interest rates.
4 Based on operations for the period shown and, accordingly, may not be
 representative of a full year.
5 In 2009, the fund changed its fiscal year-end from September to July.
6 Annualized.


                                       80


Tax-exempt income funds / Prospectus


<PAGE>

Appendix

MOODY'S INVESTORS SERVICE
MUNICIPAL LONG-TERM RATING DEFINITIONS

Moody's Investors Service ("Moody's") rates the long-term debt securities issued
by U.S. municipal and tax-exempt entities from Aaa to C. Moody's appends the
numerical modifiers 1, 2 and 3 in each generic rating category from Aa through
Caa. The modifier 1 indicates that the issuer or obligation ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of that generic
rating category. Ratings are described as follows:

Aaa -- Issuers or issues rated Aaa demonstrate the strongest creditworthiness
relative to other U.S. municipal or tax-exempt issuers or issues.

Aa -- Issuers or issues rated Aa demonstrate very strong creditworthiness
relative to other U.S. municipal or tax-exempt issuers or issues.

A -- Issuers or issues rated A present above-average creditworthiness relative
to other U.S. municipal or tax-exempt issuers or issues.

Baa -- Issuers or issues rated Baa represent average creditworthiness relative
to other U.S. municipal or tax-exempt issuers or issues.

Ba -- Issuers or issues rated Ba demonstrate below-average creditworthiness
relative to other U.S. municipal or tax-exempt issuers or issues.

B -- Issuers or issues rated B demonstrate weak creditworthiness relative to
other U.S. municipal or tax-exempt issuers or issues.

Caa -- Issuers or issues rated Caa demonstrate very weak creditworthiness
relative to other U.S. municipal or tax-exempt issuers or issues.

Ca -- Issuers or issues rated Ca demonstrate extremely weak creditworthiness
relative to other U.S. municipal or tax-exempt issuers or issues.

C -- Issuers or issues rated C demonstrate the weakest creditworthiness relative
to other U.S. municipal or tax-exempt issuers or issues.


                                       81

                                           Tax-exempt income funds / Prospectus
<PAGE>

STANDARD & POOR'S CORPORATION
LONG-TERM ISSUE CREDIT RATINGS

Standard & Poor's Corporation ("S&P") rates the long-term debt securities of
various entities in categories ranging from AAA to D according to quality. The
ratings from AA to CCC may be modified by the addition of a plus (+) or minus
(-) sign to show relative standing within the major rating categories. Ratings
are described as follows:

AAA -- An obligation rated AAA has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA -- An obligation rated AA differs from the highest rated obligations only in
a small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A -- An obligation rated A is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB -- An obligation rated BBB 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.

BB, B, CCC, CC and C -- Obligations rated BB, B, CCC, CC, and C are regarded as
having significant speculative characteristics. BB indicates the least degree of
speculation and C the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB -- An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions, which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B -- An obligation rated B is more vulnerable to nonpayment than obligations
rated BB, but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial or economic conditions
will likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC -- An obligation rated CCC is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation.

CC -- An obligation rated CC is currently highly vulnerable to nonpayment.


                                       82

Tax-exempt income funds / Prospectus


<PAGE>

C -- A C rating is assigned to obligations that are currently highly vulnerable
to nonpayment, obligations that have payment arrearages allowed by the terms of
the documents, or obligations of an issuer that is the subject of a bankruptcy
petition or similar action which have not experienced a payment default. Among
others, the C rating may be assigned to subordinated debt, preferred stock or
other obligations on which cash payments have been suspended in accordance with
the instrument's terms.

D -- An obligation rated D is in payment default. The D rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on
an obligation are jeopardized.


                                       83

                                           Tax-exempt income funds / Prospectus
<PAGE>

NOTES


                                       84

Tax-exempt income funds / Prospectus


<PAGE>

NOTES


                                       85

                                           Tax-exempt income funds / Prospectus
<PAGE>



[logo - American Funds /(R)/]                The right choice for the long term/(R)/





          FOR SHAREHOLDER          American Funds Service Company
          SERVICES                 800/421-0180
          FOR RETIREMENT PLAN      Call your employer or plan
          SERVICES                 administrator
          FOR 24                   American FundsLine
          -HOUR INFORMATION        800/325-3590
                                   americanfunds.com

          Telephone calls you have with American Funds may be
          monitored or recorded for quality assurance,
          verification and recordkeeping purposes. By speaking to
          American Funds on the telephone, you consent to such
          monitoring and recording.
-----------------------------------------------------------------------------------



ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS  The shareholder reports contain
additional information about the funds, including financial statements,
investment results, portfolio holdings, a discussion of market conditions and
the funds' investment strategies and the independent registered public
accounting firms' reports (in the annual report).

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The current SAI,
as amended from time to time, contains more detailed information about the
funds, including each fund's financial statements, and is incorporated by
reference into this prospectus. This means that the current SAI, for legal
purposes, is part of this prospecuts. The codes of ethics describe the personal
investing policies adopted by the funds, the funds' investment adviser and its
affiliated companies.

The codes of ethics and current SAI are on file with the U.S. Securities and
Exchange Commission (SEC). These and other related materials about the funds are
available for review or to be copied at the SEC's Public Reference Room in
Washington, D.C. (202/551-8090) or on the EDGAR database on the SEC's website at
sec.gov or, after payment of a duplicating fee, via e-mail request to
publicinfo@sec.gov or by writing to the SEC's Public Reference Section, 100 F
Street, NE, Washington, D.C. 20549-1520. The codes of ethics, current SAI and
shareholder reports are also available, free of charge, on our website,
americanfunds.com.


E-DELIVERY AND HOUSEHOLD MAILINGS  Each year you are automatically sent an
updated summary prospectus and annual and semi-annual reports for the funds. You
may also occasionally receive proxy statements for the funds. In order to reduce
the volume of mail you receive, when possible, only one copy of these documents
will be sent to shareholders who are part of the same family and share the same
household address. You may elect to receive these documents electronically in
lieu of paper form by enrolling in e-delivery on our website, americanfunds.com.

If you would like to opt out of household-based mailings or receive a
complimentary copy of the current SAI, codes of ethics or annual/semi-annual
report to shareholders, please call American Funds Service Company at
800/421-0180 or write to the secretary of the funds at 333 South Hope Street,
Los Angeles, California 90071.

SECURITIES INVESTOR PROTECTION CORPORATION (SIPC)  Shareholders may obtain
information about SIPC/(R)/ on its website at sipc.org or by calling
202/371-8300.







                                          Investment Company File No. 811-02421
                                          Investment Company File No. 811-08576
                                          Investment Company File No. 811-07888
                                          Investment Company File No. 811-04694
                                          Investment Company File No. 811-05750
                                     MFGEPR-965-1109P Litho in USA CGD/RRD/8020
-------------------------------------------------------------------------------
THE CAPITAL GROUP COMPANIES
American Funds      Capital Research and Management      Capital International      Capital Guardian      Capital Bank and Trust





<PAGE>


                   THE TAX-EXEMPT BOND FUND OF AMERICA, INC.
                 AMERICAN HIGH-INCOME MUNICIPAL BOND FUND, INC.
                  LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
                    THE AMERICAN FUNDS TAX-EXEMPT SERIES II
                      (THE TAX-EXEMPT FUND OF CALIFORNIA)
               AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND

                                     Part B
                      Statement of Additional Information
                                November 1, 2009

This document is not a prospectus but should be read in conjunction with the
current prospectus of The Tax-Exempt Bond Fund of America, Inc. ("TEBF"),
American High-Income Municipal Bond Fund, Inc. ("AHIM"), Limited Term Tax-Exempt
Bond Fund of America ("LTEX"), The American Funds Tax-Exempt Series II - The
Tax-Exempt Fund of California ("TEFCA") and American Funds Short-Term Tax-Exempt
Bond Fund ("STEX") dated November 1, 2009. The prospectus may be obtained from
your financial adviser or by writing to the funds at the following address:

                   The Tax-Exempt Bond Fund of America, Inc.
                 American High-Income Municipal Bond Fund, Inc.
                  Limited Term Tax-Exempt Bond Fund of America
                    The American Funds Tax-Exempt Series II
                      (The Tax-Exempt Fund of California)
                 American Funds Short-Term Tax-Exempt Bond Fund
                              Attention: Secretary
                             333 South Hope Street
                         Los Angeles, California 90071
                                213/486-9200




              TEBF         AHIM         LTEX         TEFCA          STEX

CLASS A       AFTEX        AMHIX        LTEBX        TAFTX          ASTEX
CLASS B       TEBFX        ABHMX        LTXBX        TECBX           N/A
CLASS C       TEBCX        AHICX        LTXCX        TECCX           N/A
CLASS F-1     AFTFX        ABHFX        LTXFX        TECFX          FSTTX
CLASS F-2     TEAFX        AHMFX        LTEFX        TEFEX          ASTFX





                               TABLE OF CONTENTS




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

Certain investment limitations and guidelines . . . . . . . . . . .        2
Description of certain securities and investment techniques . . . .        5
Fund policies . . . . . . . . . . . . . . . . . . . . . . . . . . .       13
Management of the funds . . . . . . . . . . . . . . . . . . . . . .       21
Execution of portfolio transactions . . . . . . . . . . . . . . . .       54
Disclosure of portfolio holdings. . . . . . . . . . . . . . . . . .       57
Price of shares . . . . . . . . . . . . . . . . . . . . . . . . . .       59
Taxes and distributions . . . . . . . . . . . . . . . . . . . . . .       61
Purchase and exchange of shares . . . . . . . . . . . . . . . . . .       64
Sales charges . . . . . . . . . . . . . . . . . . . . . . . . . . .       68
Sales charge reductions and waivers . . . . . . . . . . . . . . . .       71
Selling shares. . . . . . . . . . . . . . . . . . . . . . . . . . .       76
Shareholder account services and privileges . . . . . . . . . . . .       77
General information . . . . . . . . . . . . . . . . . . . . . . . .       80
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       85
Investment portfolio
Financial statements






                       Tax-Exempt Income Funds -- Page 1
<PAGE>


                 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 TAX-EXEMPT BOND FUND OF AMERICA
-----------------------------------

.    The fund will invest at least 80% of its assets in, or derive at least 80%
     of its income from, securities exempt from regular federal income tax.

.    The fund will not invest in securities that subject fund shareholders to
     alternative minimum tax.

.    The fund will invest at least 80% of its assets in bonds (for purposes of
     this limit, bonds include any debt instrument and cash equivalents, and may
     include certain preferred securities).

.    The fund will invest at least 65% of its assets in debt securities rated A-
     or better by Standard & Poor's Corporation ("S&P") or A3 or better by
     Moody's Investors Service ("Moody's") or unrated but determined by the
     fund's investment adviser to be of equivalent quality.

.    The fund may invest up to 35% of its assets in debt securities rated BBB+
     or below by S&P and Baa1 or below by Moody's or unrated but determined by
     the fund's investment adviser to be of equivalent quality.

.    The fund may invest up to 10% of its assets in debt securities rated BB+ or
     below by S&P and Ba1 or below by Moody's or unrated but determined by the
     fund's investment adviser to be of equivalent quality.

.    The fund will invest substantially in securities with maturities in excess
     of three years.

AMERICAN HIGH-INCOME MUNICIPAL BOND FUND
----------------------------------------

.    The fund will invest at least 80% of its assets in, or derive at least 80%
     of its income from, securities exempt from regular federal income tax
     (including securities subject to alternative minimum tax).

.    The fund may invest, without limitation, in securities that may subject
     fund shareholders to alternative minimum tax.

.    The fund will invest at least 80% of its assets in bonds (for purposes of
     this limit, bonds include any debt instrument and cash equivalents, and may
     include certain preferred securities).

.    The fund will invest at least 65% of its assets in debt securities rated A+
     or below by S&P or A1 or below by Moody's or unrated but determined by the
     fund's investment adviser to be of equivalent quality.


                       Tax-Exempt Income Funds -- Page 2
<PAGE>


.    The fund will invest at least 50% of its assets in debt securities rated
     BBB+ or below by S&P or Baa1 or below by Moody's or unrated but determined
     by the fund's investment adviser to be of equivalent quality.

.    The fund may invest more than 25% of its assets in municipal obligations of
     issuers located in the same state or in obligations of the same type
     (however, the fund may not invest 25% or more in municipal securities of
     the same project type issued by non-governmental entities).

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
--------------------------------------------

.    The fund will invest at least 80% of its assets in, or derive at least 80%
     of its income from, securities exempt from regular federal income tax and
     that do not subject fund shareholders to alternative minimum tax.

.    The fund may invest up to 20% of its assets in securities that may subject
     fund shareholders to federal alternative minimum tax.

.    The fund will invest at least 80% of its assets in bonds (for purposes of
     this limit, bonds include any debt instrument and cash equivalents, and may
     include certain preferred securities).

.    The fund will invest at least 80% of its assets in debt securities rated A-
     or better by S&P or A3 or better by Moody's or unrated but determined by
     the fund's investment adviser to be of equivalent quality (including money
     market instruments or cash).

.    The fund may invest up to 20% of its assets in debt securities in the
     rating category of BBB by S&P and the rating category of Baa by Moody's or
     unrated but determined by the fund's investment adviser to be of equivalent
     quality. The fund is not normally required to dispose of a security in the
     event its rating is reduced below BBB- or Baa3 (or if unrated, when its
     quality falls below the equivalent of BBB- or Baa3).

.    The dollar-weighted average maturity of the fund's portfolio will be
     between three and 10 years.

THE TAX-EXEMPT FUND OF CALIFORNIA
---------------------------------

.    The fund will invest at least 80% of its assets in, or derive at least 80%
     of its income from, securities that are exempt from both regular federal
     and California income taxes and that do not subject fund shareholders to
     alternative minimum tax.

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

.    The fund will invest at least 65% of its assets in debt securities rated
     BBB- or better by S&P or Baa3 or better by Moody's or unrated but
     determined by the fund's investment adviser to be of equivalent quality
     (including money market instruments or cash).


                       Tax-Exempt Income Funds -- Page 3
<PAGE>


.    The fund may invest up to 10% of its assets in debt securities rated BB+ or
     below by S&P and Ba1 or below by Moody's or unrated but determined by the
     fund's investment adviser to be of equivalent quality.

.    The fund will invest substantially in securities with maturities in excess
     of three years.

AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND
----------------------------------------------

.    The fund will invest at least 80% of its assets in, or derive at least 80%
     of its income from, securities exempt from regular federal income tax.

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

.    The fund will invest at least 80% of its assets in bonds (for purposes of
     this limit, bonds include any debt instrument and cash equivalents, and may
     include certain preferred securities).

.    The fund will invest at least 80% of its assets in debt securities rated
     AA- or Aa3 or better (or in the case of short-term securities, those rated
     in the highest quality category) by a Nationally Recognized Statistical
     Rating Organization ("NRSRO") or that are unrated but determined by the
     fund's investment adviser to be of equivalent quality, including money
     market instruments.

.    The fund may invest up to 20% of its assets in debt securities rated in the
     A rating category by a NRSRO or that are unrated but determined by the
     fund's investment adviser to be of equivalent quality.

.    The fund's dollar-weighted average maturity will be no greater than three
     years. The maturity of a debt instrument is normally its ultimate maturity
     date unless the fund's investment adviser determines it is likely that a
     maturity shortening device (such as a call, put, refunding or redemption
     provision) will cause the debt instrument to be repaid earlier.

                        *     *     *     *     *     *

The funds may experience difficulty liquidating certain portfolio securities
during significant market declines or periods of heavy redemptions.


                       Tax-Exempt Income Funds -- Page 4
<PAGE>


          DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

The descriptions below are intended to supplement the material in the prospectus
under "Investment objectives, strategies and risks."


THE TAX-EXEMPT BOND FUND OF AMERICA, AMERICAN HIGH-INCOME MUNICIPAL BOND FUND,
------------------------------------------------------------------------------
LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA, THE TAX-EXEMPT FUND OF CALIFORNIA
-------------------------------------------------------------------------------
AND AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND
--------------------------------------------------

DEBT SECURITIES -- Debt securities are used by issuers to borrow money.
Generally, issuers pay investors periodic interest and repay the amount borrowed
either periodically during the life of the security and/or at maturity. Some
debt securities, such as zero coupon bonds, do not pay current interest, but are
purchased at a discount from their face values and their values accrete over
time to face value at maturity. The market prices of debt securities fluctuate
depending on such factors as interest rates, credit quality and maturity. In
general, market prices of debt securities decline when interest rates rise and
increase when interest rates fall.


Lower rated debt securities, rated Ba1 or below by Moody's and/or BB+ or below
by S&P or unrated but determined by the funds' investment adviser to be of
equivalent quality, are described by the rating agencies as speculative and
involve greater risk of default or price changes due to changes in the issuer's
creditworthiness than higher rated debt securities, or they may already be in
default. The market prices of these securities may fluctuate more than higher
quality securities and may decline significantly in periods of general economic
difficulty. It may be more difficult to dispose of, and to determine the value
of, lower rated debt securities.


Certain additional risk factors relating to debt securities are discussed below:


     SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES -- Debt securities may be
     sensitive to economic changes, political and corporate developments, and
     interest rate changes. In addition, during an economic downturn or
     substantial period of rising interest rates, issuers that are highly
     leveraged may experience increased financial stress that could adversely
     affect their ability to meet projected business goals, to obtain additional
     financing and to service their principal and interest payment obligations.
     Periods of economic change and uncertainty also can be expected to result
     in increased volatility of market prices and yields of certain debt
     securities. For example, prices of these securities can be affected by
     financial contracts held by the issuer or third parties (such as
     derivatives) relating to the security or other assets or indices.

     PAYMENT EXPECTATIONS -- Debt securities may contain redemption or call
     provisions. If an issuer exercises these provisions in a lower interest
     rate market, the funds would have to replace the security with a lower
     yielding security, resulting in decreased income to investors. If the
     issuer of a debt security defaults on its obligations to pay interest or
     principal or is the subject of bankruptcy proceedings, the funds may incur
     losses or expenses in seeking recovery of amounts owed to them.

     LIQUIDITY AND VALUATION -- There may be little trading in the secondary
     market for particular debt securities, which may affect adversely the
     funds' ability to value accurately or dispose of such debt securities.
     Adverse publicity and investor perceptions, whether or not based on
     fundamental analysis, may decrease the value and/or liquidity of debt
     securities.


                       Tax-Exempt Income Funds -- Page 5
<PAGE>



The investment adviser attempts to reduce the risks described above through
diversification of the funds' portfolios and by credit analysis of each issuer,
as well as by monitoring broad economic trends and corporate and legislative
developments, but there can be no assurance that it will be successful in doing
so.


Credit ratings for debt securities provided by rating agencies reflect an
evaluation of the safety of principal and interest payments, not market value
risk. The rating of an issuer is a rating agency's view of past and future
potential developments related to the issuer and may not necessarily reflect
actual outcomes. There can be a lag between the time of developments relating to
an issuer and the time a rating is assigned and updated.


Bond rating agencies may assign modifiers (such as +/-) to ratings categories to
signify the relative position of a credit within the rating category. Investment
policies that are based on ratings categories should be read to include any
security within that category, without giving consideration to the modifier
except where otherwise provided. See the Appendix for more information about
credit ratings.


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 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


                       Tax-Exempt Income Funds -- Page 6
<PAGE>


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.


MUNICIPAL LEASE OBLIGATIONS -- The funds may invest, without limitation, in
municipal lease revenue obligations that are determined to be liquid by the
investment adviser. In determining whether these securities are liquid, the
investment adviser will consider, among other things, the credit quality and
support, including strengths and weaknesses of the issuers and lessees, the
terms of the lease, the frequency and volume of trading and the number of
dealers trading the securities.


INSURED MUNICIPAL BONDS -- The funds may invest in municipal bonds that are
insured generally as to the timely payment of interest and principal. The
insurance for such bonds may be purchased by the bond issuer, the funds or any
other party, and is usually purchased from private, non-governmental insurance
companies. When assigning a credit rating to an insured municipal bond the
investment adviser considers the higher of the credit rating of the insurer,
based on the insurer's claims-paying ability, and the credit rating of the
issuer (or the equivalent as determined by the investment adviser if the issuer
is not rated by the rating agencies). Insurance that covers a municipal bond
does not guarantee the market value of the bond or the prices of a fund's
shares. If the credit rating of the insurer were reduced, this could have an
adverse effect upon the credit rating of the insured bond and, therefore, its
market value.


U.S. COMMONWEALTH OBLIGATIONS -- The funds may invest in obligations of the
Commonwealths of the United States, such as Puerto Rico, the U.S. Virgin
Islands, Guam and their agencies and authorities, to the extent such obligations
are exempt from federal income taxes. Adverse political and economic conditions
and developments affecting any Commonwealth may, in turn, affect negatively the
value of the funds' holdings in such obligations.


ZERO COUPON BONDS -- Municipalities may issue zero coupon securities which are
debt obligations that do not entitle the holder to any periodic payments of
interest prior to maturity or a specified date when the securities begin paying
current interest. They are issued and traded at a discount from their face
amount or par value, which discount varies depending on the time remaining until
cash payments begin, prevailing interest rates, liquidity of the security, and
the perceived credit quality of the issuer.


PRE-REFUNDED BONDS -- From time to time, a municipality may refund a bond that
it has already issued prior to the original bond's call date by issuing a second
bond, the proceeds of which are used to purchase U.S. government securities. The
securities are placed in an escrow account pursuant to an agreement between the
municipality and an independent escrow agent. The principal and interest
payments on the securities are then used to pay off the original bondholders.
For purposes of diversification, pre-refunded bonds will be treated as
governmental issues.


CASH AND CASH EQUIVALENTS -- The funds may hold cash and invest in cash
equivalents. Cash equivalents include, but are not limited to: (a) tax-exempt
commercial paper (e.g., short-term notes obligations issued by municipalities
that mature, or may be redeemed in 270 days or less), (b) municipal notes (e.g.,
bond anticipation notes, revenue anticipation notes, and tax


                       Tax-Exempt Income Funds -- Page 7
<PAGE>


anticipation notes issued by municipalities that mature, or may be redeemed in
one year or less), (c) municipal obligations backed by letters of credit issued
by banks or other financial institutions or government agencies that mature, or
may be redeemed in one year or less, (d) tax-exempt variable rate debt issued by
municipal conduits for corporate obligors and (e) securities of the U.S.
government, its agencies or instrumentalities that mature, or may be redeemed in
one year or less.


TEMPORARY INVESTMENTS -- The funds may invest in short-term municipal
obligations of up to one year in maturity during periods of using temporary
defensive strategies resulting from abnormal market conditions, or when such
investments are considered advisable for liquidity. Generally, the income from
such short-term municipal obligations is exempt from federal income tax.
Further, a portion of a fund's assets, which will normally be less than 20%, may
be held in cash or invested in high-quality taxable short-term securities of up
to one year in maturity. Such investments may include: (a) obligations of the
U.S. Treasury; (b) obligations of agencies and instrumentalities of the U.S.
government; (c) money market instruments, such as certificates of deposit issued
by domestic banks, corporate commercial paper, and bankers' acceptances and (d)
repurchase agreements.


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 (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.


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.


ADJUSTMENT OF MATURITIES -- The investment adviser seeks to anticipate movements
in interest rates and may adjust the maturity distribution of a fund's portfolio
accordingly, keeping in mind the fund's objectives.


                       Tax-Exempt Income Funds -- Page 8
<PAGE>


ISSUE CLASSIFICATION -- Securities with the same general quality rating and
maturity characteristics, but which vary according to the purpose for which they
were issued, often tend to trade at different yields. Correspondingly,
securities issued for similar purposes and with the same general maturity
characteristics, but which vary according to the creditworthiness of their
respective issuers, tend to trade at different yields. These yield differentials
tend to fluctuate in response to political and economic developments, as well as
temporary imbalances in normal supply/demand relationships. The investment
adviser monitors these fluctuations closely, and will attempt to adjust
portfolio concentrations in various issue classifications according to the value
disparities brought about by these yield relationship fluctuations.


The investment adviser believes that, in general, the market for municipal bonds
is less liquid than that for taxable fixed-income securities. Accordingly, the
ability of the funds to make purchases and sales of securities in the foregoing
manner may, at any particular time and with respect to any particular
securities, be limited (or non-existent).


PRIVATE PLACEMENTS -- Generally, municipal securities acquired in private
placements are subject to contractual restrictions on resale. Accordingly, all
private placements will be considered illiquid unless they have been
specifically determined to be liquid, taking into account factors such as the
frequency and volume of trading and the commitment of dealers to make markets
under procedures adopted by each fund's board of directors/trustees.


RESTRICTED OR ILLIQUID SECURITIES -- The funds may purchase securities subject
to restrictions on resale. Difficulty in selling such securities may result in a
loss or be costly to the funds. Securities (including restricted securities) not
actively traded will be considered illiquid unless they have been specifically
determined to be liquid under procedures adopted by the funds' board of
directors/trustees, taking into account factors such as the frequency and volume
of trading, the commitment of dealers to make markets and the availability of
qualified investors, all of which can change from time to time. The funds may
incur certain additional costs in disposing of illiquid securities.


REPURCHASE AGREEMENTS -- The funds may enter into repurchase agreements under
which the funds buy a security and obtain a simultaneous commitment from the
seller to repurchase the security at a specified time and price. Repurchase
agreements permit the funds to maintain liquidity and earn income over periods
of time as short as overnight. The seller must maintain with the funds'
custodian collateral equal to at least 100% of the repurchase price, including
accrued interest, as monitored daily by the investment adviser. The funds will
only enter into repurchase agreements involving securities in which they 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 funds 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 funds may be delayed or limited. The funds do not currently
intend to engage in this investment practice over the next 12 months.


CONCENTRATION OF INVESTMENTS -- AHIM and TEFCA may invest more than 25% of
its assets in industrial development bonds. In addition, each of TEBF, LTEX and
STEX may on occasion invest more than an aggregate of 25% of its total assets in
industrial development bonds. There could be economic, business or political
developments which might affect all


                       Tax-Exempt Income Funds -- Page 9
<PAGE>



municipal bonds of a similar category or type or issued by issuers within any
particular geographical area or jurisdiction.


AHIM and STEX may invest more than 25% of its assets in municipal obligations of
issuers located in the same state or in municipal obligations of the same type
which pay interest on their obligations from revenue of similar projects. This
may make AHIM and STEX more susceptible to similar economic, political, or
regulatory occurrences such as changes in healthcare regulations, environmental
considerations related to construction, construction cost increases and labor
problems, failure of healthcare facilities to maintain adequate occupancy
levels, and inflation. As the similarity in issuers increases, the potential for
fluctuations in the fund's share price also may increase.


AMERICAN HIGH-INCOME MUNICIPAL BOND FUND, LIMITED TERM TAX-EXEMPT BOND FUND OF
------------------------------------------------------------------------------
AMERICA, THE TAX-EXEMPT FUND OF CALIFORNIA AND AMERICAN FUNDS SHORT-TERM
------------------------------------------------------------------------
TAX-EXEMPT BOND FUND
--------------------

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.


LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
--------------------------------------------

MATURITY -- Under normal market conditions, the dollar-weighted average maturity
of the fund's portfolio will range between three and 10 years. In calculating
the effective maturity or average life of a particular debt security, a put,
call, sinking fund or other feature will be considered to the extent it results
in a security whose market characteristics indicate an effective maturity or
average life that is shorter than its nominal or stated maturity. The investment
adviser will consider the impact on effective maturity of potential changes in
the financial condition of issuers and in market interest rates in making
investment selections for the fund.


THE TAX-EXEMPT FUND OF CALIFORNIA
---------------------------------

RISK FACTORS RELATING TO CALIFORNIA DEBT OBLIGATIONS -- Because the fund invests
primarily in securities issued by the State of California (the "State"), its
agencies and municipalities, the fund is more susceptible to developments
adversely affecting issuers of California securities than a municipal bond fund
that does not concentrate its investments in a single state. The information
below constitutes only a brief summary and does not purport to be a complete
description of risk factors relating to California debt obligations. Certain
information is drawn from official statements relating to securities offerings
of the State and various local agencies in California, available as of the date
of this statement of additional information.


Many factors including both state and national economic, political, regulatory,
social and environmental policies and conditions, which are not within the
control of the issuers of State related bonds, could have an adverse impact on
the financial condition of the State, its various agencies and political
subdivisions, as well as other municipal issuers in California. A variety of
events, such as, tax base erosion, state constitutional limits on tax increases,
budget deficits and other financial difficulties, and changes in the credit
ratings assigned to California's municipal


                       Tax-Exempt Income Funds -- Page 10
<PAGE>



issuers may have an adverse impact on the fund. In addition, natural disasters,
such as earthquakes and droughts, may have an adverse effect on the State's
economy.


California's economy and general financial condition affect the ability of State
and local governments to raise revenues to make timely payments on their
obligations. Events such as budgetary problems at the State level, fiscal
weakness or an overall slowdown in the California economy could adversely impact
the fund. Such events can negatively impact the State's credit rating, make it
more expensive for the State to borrow money, and impact municipal issuers'
ability to pay their obligations. For example, various rating agencies have
recently downgraded their ratings of various bonds related to the State due to
the State's liquidity problems and delay in adopting budget and cash solutions,
and each of these ratings agencies has placed the State on watch for further
possible downgrades. California currently has the lowest credit rating of any
state, and therefore pays higher interest rates than other states when issuing
general obligation bonds. Among other things, future action by the rating
agencies will depend on whether the State is able to address liquidity,
budgetary and other fiscal issues and whether any improvements provide long-term
solutions.


California is the most populous state in the nation with a diverse economy.
Major employers include the agriculture, manufacturing, high technology,
services, trade, entertainment and construction sectors. However, certain of the
State's significant industries are sensitive to economic disruptions in their
export markets. The State's rate of economic growth, therefore, could be
adversely affected by any such disruption. A significant downturn in the housing
market or U.S. stock market prices could adversely affect California's economy
by reducing household spending and business investment, particularly in the high
technology sector. Moreover, a large and increasing share of the State's General
Fund revenue in the form of income and capital gains taxes is directly related
to, and would be adversely affected by a significant downturn in the performance
of, the stock markets.


Future California constitutional amendments, legislative measures, executive
orders, administrative regulations, court decisions and voter initiatives could
have an adverse effect on the debt obligations of California issuers. The
initiative process is used quite often in California, resulting in numerous
initiative items on the ballot for most state and local elections, any of which
could affect the ability of municipal issuers to pay their obligations. For
example, revenue and expenditure limitations adopted by California voters, such
as Propositions 13 (limiting ad valorem taxes on real property and restricting
local taxing entities' ability to raise real property taxes) and 218 (limiting
local governments' ability to impose "property related" fees, assessments and
taxes) have constrained local governments' ability to raise revenue,
consequently raising concerns about whether municipalities have sufficient
revenue to pay their debt obligations.


As of the date of this Statement of Additional Information, the State of
California is in the midst of a severe economic recession. Falling home prices
and consumer spending, reduced credit availability, decreasing investment values
and growing job losses, among other factors, have weighed heavily on the State
economy since 2008. The current fiscal problems facing California are
exacerbated by a national recession and ongoing turmoil in the global financial
and credit markets. Fiscal and policy analysts have projected that the negative
economic outlook for the State will continue through 2009, but emphasize that
market volatility makes any projection highly uncertain.


While the fund's portfolio counselors try to reduce risks by investing in a
diversified portfolio of securities, including State related bonds, it is not
possible to predict the extent to which any or all


                       Tax-Exempt Income Funds -- Page 11
<PAGE>



of the factors described above will affect the ability of the State or other
municipal issuers to pay interest or principal on their bonds or the ability of
such bonds to maintain market value or marketability.

                        *     *     *     *     *     *

PORTFOLIO TURNOVER -- Portfolio changes will be made without regard to the
length of time particular investments may have been held. Short-term trading
profits are not the funds' objective, and changes in their investments are
generally accomplished gradually, though short-term transactions may
occasionally be made. High portfolio turnover involves correspondingly greater
transaction costs in the form of dealer spreads or brokerage commissions, and
may result in the realization of net capital gains, which may be taxable when
distributed to shareholders.


Fixed-income securities are generally traded on a net basis and usually neither
brokerage commissions nor transfer taxes are involved. Transaction costs are
usually reflected in the spread between the bid and asked price.


A fund's portfolio turnover rate would equal 100% if each security in the fund's
portfolio were replaced once per year.




                                             FISCAL YEAR           PORTFOLIO TURNOVER RATE
--------------------------------------------------------------------------------------------

 TEBF                                           2009                         18%
                                                2008                         20
--------------------------------------------------------------------------------------------
 AHIM                                           2009                         29
                                                2008                         27
--------------------------------------------------------------------------------------------
 LTEX                                           2009                          7
                                                2008                         16
--------------------------------------------------------------------------------------------
 TEFCA                                          2009                         17
                                                2008                         16
--------------------------------------------------------------------------------------------




STEX was a money market fund during its 2009 and 2008 fiscal years and,
therefore, is not required to disclose portfolio turnover rates for such
periods. See "Financial highlights" in the prospectus for TEBF's, AHIM's, LTEX's
and TEFCA's annual portfolio turnover rates for each of the last five fiscal
years.


                       Tax-Exempt Income Funds -- Page 12
<PAGE>


                                 FUND POLICIES

All percentage limitations in the following fund policies are considered at the
time securities are purchased and are based on a fund's net assets unless
otherwise indicated. None of the following policies involving a maximum
percentage of assets will be considered violated unless the excess occurs
immediately after, and is caused by, an acquisition by the fund.


FUNDAMENTAL POLICIES -- Each fund has adopted the following fundamental
policies, 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 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.


THE TAX-EXEMPT BOND FUND OF AMERICA
-----------------------------------

These restrictions provide that the fund may not:


1.   With respect to 75% of the fund's total assets, purchase the security of
any issuer (other than securities issued or guaranteed by the U.S. government or
its agencies or instrumentalities) if, as a result, (a) more than 5% of the
fund's total assets would be invested in securities of that issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of that
issuer;

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

3.   Buy or sell real estate in the ordinary course of its business; however,
the fund may invest in securities secured by real estate or interests therein;

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

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

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

7.   Borrow money, except from banks for temporary or emergency purposes, not in
excess of 5% of the value of the fund'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;

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

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


                       Tax-Exempt Income Funds -- Page 13
<PAGE>


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

11.   Write, purchase or sell puts, calls, straddles, spreads or any combination
thereof.

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 the purpose of the fund's investment restrictions, the identification of the
"issuer" of municipal bonds that are not general obligation bonds is made by the
investment adviser on the basis of the characteristics of the bonds as
described, the most significant of which is the ultimate source of funds for the
payment of principal and interest on such bonds.

For purposes of Investment Restriction #10, the term "oil, gas or other mineral
exploration or development programs" includes oil, gas or other mineral
exploration or development leases.

NONFUNDAMENTAL POLICIES -- The following policies may be changed without
shareholder approval:


1.   The fund may not invest 25% or more of its assets in municipal bonds 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
(such as hospitals and health facilities; turnpikes and toll roads; ports and
airports; or colleges and universities). The fund may on occasion invest more
than an aggregate of 25% of its total assets in industrial development bonds.

2.   The fund may not invest more than 15% of its net assets in securities which
are not readily marketable.

3.   The fund may not invest in securities of other investment companies, except
as permitted by the 1940 Act.

4.   The fund may not issue senior securities, except as permitted by the 1940
Act.

AMERICAN HIGH-INCOME MUNICIPAL BOND FUND
----------------------------------------

These restrictions provide that the fund may not:


1.   With respect to 75% of the fund's total assets, purchase the security of
any issuer (other than securities issued or guaranteed by the U.S. government or
its agencies or instrumentalities) if, as a result, (a) more than 5% of the
fund's total assets would be invested in securities of that issuer, or (b) the
fund would hold more than 10% of the outstanding voting securities of that
issuer.

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


                       Tax-Exempt Income Funds -- Page 14
<PAGE>


3.   Purchase or sell real estate (including real estate limited partnerships)
unless acquired as a result of ownership of securities or other instruments (but
this shall not prevent the fund from investing in securities or other
instruments backed by real estate or securities of companies engaged in the real
estate business);

4.   Purchase or sell commodities unless acquired as a result of ownership of
securities or other instruments or engage in futures transactions;

5.   Engage in the business of underwriting securities of other issuers, except
to the extent that the purchase or disposal of an investment position may
technically constitute the fund as an underwriter as that term is defined under
the Securities Act of 1933;

6.   Make loans in an aggregate amount in excess of 33 1/3% of the value of the
fund's total assets, taken at the time any loan is made, provided that the
purchase of debt securities pursuant to the fund's investment objective and
entering into repurchase agreements maturing in seven days or less shall not be
deemed loans for the purposes of this restriction and that loans of portfolio
securities may be made;

7.   Issue senior securities, except as permitted under the Investment Company
Act of 1940;

8.   Borrow money, except from banks for temporary or emergency purposes not to
exceed one-third of the value of the fund's total assets. Moreover, in the event
that the asset coverage for the fund's borrowings falls below 300%, the fund
will reduce, within three days (excluding Sundays and holidays), the amount of
its borrowings in order to provide for 300% asset coverage;

9.   Purchase or sell puts, calls, straddles, or spreads, or combinations
thereof (this restriction does not prevent the fund from investing in securities
with put and call features);

10.  Invest 25% or more of its assets in municipal securities of the same
project type issued by non-governmental entities. However, the fund may invest
more than 25% of its assets in municipal obligations of issuers located in the
same state or in municipal obligations of the same type, including without
limitation the following: general obligations of states and localities; lease
rental obligations of state and local authorities; obligations of state and
local housing finance authorities, municipal utilities systems or public housing
authorities; or industrial development or pollution control bonds issued for
hospitals, electric utility systems, life care facilities or other purposes. As
a result, the fund may be more susceptible to adverse economic, political, or
regulatory occurrences affecting a particular category of issuers. As the
concentration in the securities of a particular category of issuer increases,
the potential for fluctuation in the value of the fund's shares also increases;
nor

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

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. For this purpose, securities subject to
federal alternative minimum tax are considered tax-exempt securities. In the
alternative, the fund will invest its assets so that at least 80% of the income
that the fund distributes is exempt from federal income tax.


                       Tax-Exempt Income Funds -- Page 15
<PAGE>



NONFUNDAMENTAL POLICIES -- The following policies may be changed without
shareholder approval:


1.   The fund does not currently intend (at least for the next 12 months) to
lend portfolio securities. However, if such action is authorized by the board of
directors, loans of portfolio securities shall be made in accordance with the
terms and conditions therein set forth and consistent with fundamental
investment restriction #6;

2.   The fund will not invest more than 15% of the value of its net assets in
illiquid securities;

3.   The fund does not currently intend (at least for the next 12 months) to
invest in the securities of other registered management investment companies,
except in connection with a merger, consolidation, acquisition, reorganization,
or in connection with the implementation of any deferred compensation plan as
adopted by the board of directors;

4.   The fund does not currently intend (at least for the next 12 months) to
purchase securities in the event its borrowings exceed 5% of total assets.

For the purposes of the fund's investment restrictions, the identification of
the "issuer" of municipal bonds that are not general obligation bonds is made by
the investment adviser on the basis of the characteristics of the bonds as
described, the most significant of which is the ultimate source of funds for the
payment of principal and interest on such bonds.

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
--------------------------------------------

These restrictions provide that the fund may not:


 1.  With respect to 75% of the fund's total assets, purchase the securities of
any issuer (other than securities issued or guaranteed by the U.S. government or
any of its agencies or instrumentalities) if, as a result, (a) more than 5% of
the fund's total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting securities of
that issuer;

2.   Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);

 3.  Purchase or sell commodities unless acquired as a result of ownership of
securities or other instruments or engage in futures transactions;

 4.  Invest 25% or more of the fund's total assets in the securities of issuers
in the same industry. Obligations of the U.S. government, its agencies and
instrumentalities are not subject to this 25% limitation on industry
concentration;

 5.  Invest more than 15% of the value of its net assets in securities which are
not readily marketable (including repurchase agreements maturing in more than
seven days) or engage in the business of underwriting securities of other
issuers, except to the extent that the purchase or disposal of an investment
position may technically constitute the fund as an underwriter as that term is
defined under the Securities Act of 1933;


                       Tax-Exempt Income Funds -- Page 16
<PAGE>


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

 7.  Make loans to others except for (a) purchasing debt securities; (b)
entering into repurchase agreements; and (c) loaning portfolio securities;

 8.  Issue senior securities, except as permitted under the Investment Company
Act of 1940;

 9.  Borrow money, except from banks for temporary purposes in an amount not to
exceed one-third of the value of the fund's total assets. Moreover, in the event
that the asset coverage for such borrowing falls below 300%, the fund will
reduce, within three days, the amount of its borrowing in order to provide for
300% asset coverage; nor

10.  Purchase or sell puts, calls, straddles, or spreads, or combinations
thereof (this restriction does not prevent the fund from investing in securities
with put and call features).

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.


NONFUNDAMENTAL POLICIES -- The following policies may be changed without
shareholder approval:


1.    The fund does not currently intend (at least for the next 12 months) to
sell securities short, except to the extent that the fund contemporaneously
owns, or has the right to acquire at no additional cost, securities identical to
those sold short.

2.   The fund does not currently intend (at least for the next 12 months) to
invest in the securities of other investment companies except as permitted by
the 1940 Act, as amended.

3.    The fund does not currently intend (at least for the next 12 months) to
purchase securities in the event its borrowings exceed 5%.

4.   The fund does not currently intend (at least for the next 12 months) to
invest 25% or more of its assets in municipal bonds 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. The fund may on occasion
invest more than an aggregate of 25% of its total assets in industrial
development bonds.

5.   The fund does not currently intend (at least for the next 12 months) to
loan portfolio securities.

For the purpose of the fund's investment restrictions, the identification of the
"issuer" of municipal bonds that are not general obligation bonds is made by the
investment adviser on the basis of the characteristics of the bonds as
described, the most significant of which is the ultimate source of funds for the
payment of principal and interest on such bonds.


                       Tax-Exempt Income Funds -- Page 17
<PAGE>



THE TAX-EXEMPT FUND OF CALIFORNIA
---------------------------------

These restrictions provide that the fund may not:

1.   Invest more than 5% of the value of its total assets in the securities of
any one issuer provided that this limitation shall apply only to 75% of the
value of the fund's total assets and, provided further, that the limitation
shall not apply to obligations issued or guaranteed by the U.S. government or
its agencies or instrumentalities;

2.   Buy or sell real estate in the ordinary course of its business; however,
the fund may invest in securities secured by real estate or interests therein;

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

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

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

6.   Borrow money, except from banks for temporary or emergency purposes, not in
excess of 5% of the value of the fund'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;

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

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

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

10.  Write, purchase or sell puts, calls, straddles, spreads or any combination
thereof;

11.  Invest more than 25% of its assets in securities of any industry, although
for purposes of this limitation, the issuers of municipal securities and U. S.
government obligations are not considered to be part of any industry.

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 and California income tax, or will invest its assets so
that at least 80% of the income that the fund distributes is exempt from federal
and California income tax.


For the purpose of the fund's investment restrictions, the identification of the
issuer of municipal bonds which are not general obligation bonds is made by the
investment adviser on the basis of


                       Tax-Exempt Income Funds -- Page 18
<PAGE>


the characteristics of the obligation as described, the most significant of
which is the ultimate source of funds for the payment of principal of and
interest on such bonds.

For purposes of Investment Restriction #9, the term "oil, gas or other mineral
exploration or development programs" includes oil, gas or other mineral
exploration or development leases.

NONFUNDAMENTAL POLICIES -- The following policies may be changed without
shareholder approval:


The fund may not:


1.   Invest 25% or more of its assets in securities the interest on which is
paid from revenues of similar type projects (such as hospitals and health
facilities; turnpikes and toll roads; ports and airports; or colleges and
universities). The fund may, however, invest more than an aggregate of 25% of
its total assets in industrial development bonds.

2.   Invest more than 15% of its value of its net assets in illiquid securities.

3.   Invest in securities of other investment companies, except as permitted by
the 1940 Act, as amended.

4.   Issue senior securities, except as permitted by the 1940 Act.

AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND
----------------------------------------------

1.   Except as permitted by (i) the 1940 Act and the rules and regulations
thereunder, or other successor law governing the regulation of registered
investment companies, or interpretations or modifications thereof by the SEC,
SEC staff or other authority of competent jurisdiction, or (ii) exemptive or
other relief or permission from the SEC, SEC staff or other authority of
competent jurisdiction, the fund may not:

          a.  Borrow money;

          b.  Issue senior securities;

          c.  Underwrite the securities of other issuers;

          d.  Purchase or sell real estate or commodities;

          e.  Make loans; or

          f. Purchase the securities of any issuer if, as a result of such
          purchase, the fund's investments would be concentrated in any
          particular industry or group of industries.

2.   The fund may not invest in companies for the purpose of exercising control
or management.

3.   The Fund will maintain its status as a tax-exempt fund consistent with (i)
the 1940 Act and the rules and regulations thereunder, or other successor law
governing the regulation of reg-


                       Tax-Exempt Income Funds -- Page 19
<PAGE>


istered investment companies, or interpretations or modifications thereof by the
SEC, SEC staff or other authority of competent jurisdiction, or (ii) exemptive
or other relief or permission from the SEC, SEC staff or other authority of
competent jurisdiction.

ADDITIONAL INFORMATION ABOUT FUNDAMENTAL POLICIES -- The information below is
not part of STEX's fundamental policies. This information is intended to provide
a summary of what is currently required or permitted by the 1940 Act and the
rules and regulations thereunder, or by the interpretive guidance thereof by the
SEC or SEC staff, for particular fundamental policies of the fund.


For purposes of fundamental policy 1a, STEX may borrow money in amounts of up to
33-1/3% of its total assets from banks for any purpose, and may borrow up to 5%
of its total assets from banks or other lenders for temporary purposes.


For purposes of fundamental policy 1e, STEX may not lend more than 33-1/3% of
its total assets, except through the purchase of debt obligations or the use of
repurchase agreements.


For purposes of fundamental policy 1f, STEX may not invest 25% or more of its
total assets in the securities of issuers in the same industry.


For purposes of fundamental policy 3, STEX must, under normal circumstances,
invest at least 80% of its assets in, or derive at least 80% of its income from
securities that are exempt from federal income tax.  Additionally, STEX may only
invest up to 20% of its assets in securities that are subject to the alternative
minimum tax.


                       Tax-Exempt Income Funds -- Page 20
<PAGE>


                            MANAGEMENT OF THE FUNDS

BOARD OF DIRECTORS/TRUSTEES AND OFFICERS


"INDEPENDENT" DIRECTORS/TRUSTEES/1 /




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

 Ambassador Richard G. Capen,        Corporate director and               14          Carnival Corporation
 Jr., 75                             author; former U.S.
 Director/Trustee (1999)             Ambassador to Spain; former
                                     Vice Chairman,
                                     Knight-Ridder, Inc.
                                     (communications company);
                                     former Chairman and
                                     Publisher, The Miami Herald
-----------------------------------------------------------------------------------------------------------------
 H. Frederick Christie, 76           Private investor; former             14          AECOM Technology
 Director/Trustee                    President and CEO, The                           Corporation;
 (TEBF-1979; AHIM-1994;              Mission Group (non-utility                       DineEquity, Inc.;
 LTEX-1993; TEFCA-1986; STEX -       holding company, subsidiary                      Ducommun Incorporated;
 1989)                               of Southern California                           SouthWest Water Company
                                     Edison Company)

-----------------------------------------------------------------------------------------------------------------
 James G. Ellis, 62                  Dean and Professor of                13          Quiksilver, Inc.
 Director/Trustee                    Marketing, Marshall School
 (TEBF - 2006; AHIM - 2006; LTEX     of Business, University of
 - 2006, TEFCA - 2006; STEX -        Southern California
 2009)
-----------------------------------------------------------------------------------------------------------------
 Martin Fenton, 74                   Chairman of the Board,               17          None
 Chairman of the Board               Senior Resource Group LLC
 (Independent and Non-Executive)     (development and management
 and Director/ Trustee               of senior living
 (TEBF-1989; AHIM-1994;              communities)
 LTEX-1993; TEFCA-1989; STEX -
 1989)
-----------------------------------------------------------------------------------------------------------------
 Leonard R. Fuller, 63               President and CEO, Fuller            15          None
 Director/Trustee                    Consulting (financial
 (TEBF - 1994; AHIM - 1994; LTEX     management consulting firm)
 - 1994, TEFCA - 1994; STEX -
 1995)
-----------------------------------------------------------------------------------------------------------------
 R. Clark Hooper, 63                 Private investor; former             17          JPMorgan Value
 Director/Trustee (2005)             President, Dumbarton Group                       Opportunities Fund, Inc.;
                                     LLC (securities industry                         The Swiss Helvetia Fund,
                                     consulting); former                              Inc.
                                     Executive Vice President -
                                     Policy and Oversight, NASD
-----------------------------------------------------------------------------------------------------------------
 Laurel B. Mitchell, Ph.D., 54       Director, Accounting                  5          None
 Trustee (TEFCA - 2009; STEX -       Program, University of
 2009)                               Redlands
-----------------------------------------------------------------------------------------------------------------
 Richard G. Newman,/5/ 74            Chairman of the Board,               13          Sempra Energy;
 Director/Trustee                    AECOM Technology                                 SouthWest Water Company
 (TEBF-1991; AHIM-1994;              Corporation (engineering,
 LTEX-1993; TEFCA-1991; STEX -       consulting and professional
 1991)                               technical services)
-----------------------------------------------------------------------------------------------------------------
 Frank M. Sanchez, 66                Principal, The Sanchez               12          None
 Director/Trustee (1999)             Family Corporation dba
                                     McDonald's Restaurants
                                     (McDonald's licensee)
-----------------------------------------------------------------------------------------------------------------
 Margaret Spellings, 51              President and CEO, Margaret           3          None
 Trustee (STEX - 2009)               Spellings & Company; former
                                     United States Secretary of
                                     Education, United States
                                     Department of Education -
                                     Federal Government Agency;
                                     former Assistant to the
                                     President for Domestic
                                     Policy, The White House -
                                     Federal Government,
                                     Executive Branch - Domestic
                                     Policy

-----------------------------------------------------------------------------------------------------------------
 Steadman Upham, Ph.D., 60           President and Professor of           14          None
 Director/Trustee (TEBF - 2007;      Anthropology, The
 AHIM - 2007; LTEX - 2007; TEFCA     University of Tulsa; former
 - 2007; STEX - 2009)                President and Professor of
                                     Archaeology, Claremont
                                     Graduate University
-----------------------------------------------------------------------------------------------------------------





                       Tax-Exempt Income Funds -- Page 21
<PAGE>

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


                       Tax-Exempt Income Funds -- Page 22
<PAGE>


"INTERESTED" DIRECTORS/TRUSTEES/6,7/




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

 Brenda S. Ellerin, 46                 Senior Vice President -               2          None
 LTEX: President and Trustee           Fixed Income, Capital
 TEBF: Senior Vice President           Research and Management
 AHIM: Vice President                  Company
 STEX: President and Trustee

 (TEBF-1999; AHIM-2001; LTEX-1997;
 STEX - 2009)
--------------------------------------------------------------------------------------------------------------------
 Abner D. Goldstine, 79                Senior Vice President -              11          None
 AHIM, LTEX and TEBF: Vice Chairman    Fixed Income, Capital
 and Director/Trustee                  Research and Management
 TEFCA: President and Trustee          Company; Director, Capital
                                       Research and Management
 (TEBF-1979; AHIM-1994; LTEX-1993;     Company
 TEFCA-1986)
--------------------------------------------------------------------------------------------------------------------
 Paul G. Haaga, Jr., 60                Vice Chairman of the Board,          13          None
 Vice Chairman and Director/Trustee    Capital Research and
 (TEBF-1986; AHIM-1994; LTEX-1993;     Management Company; Senior
 TEFCA-1986; STEX - 1992)              Vice President - Fixed
                                       Income, Capital Research
                                       and Management Company
--------------------------------------------------------------------------------------------------------------------
 Neil L. Langberg, 56                  Senior Vice President -               1          None
 TEBF: President and Director          Fixed Income, Capital
 AHIM, LTEX, TEFCA and STEX: Senior    Research and Management
 Vice President                        Company

 (TEBF-1985; AHIM-1994; LTEX-1993;
 TEFCA-1986; STEX - 1989)
--------------------------------------------------------------------------------------------------------------------
 Mark R. Macdonald, 50                 Senior Vice President -               1          None
 AHIM: Director (AHIM-1996)            Fixed Income, Capital
                                       Research and Management
                                       Company; Director, Capital
                                       Research and Management
                                       Company
--------------------------------------------------------------------------------------------------------------------





                       Tax-Exempt Income Funds -- Page 23
<PAGE>


OTHER OFFICERS/7/



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

 Edward B. Nahmias,      Senior Vice President - Fixed Income, Capital
 57                      Research Company*
 AHIM, TEBF and
 TEFCA: Vice
 President
 (TEBF-2004;
 AHIM-1999;
 TEFCA-2001)
-------------------------------------------------------------------------------
 Kristine M.             Vice President and Senior Counsel - Fund Business
 Nishiyama, 39           Management Group, Capital Research and Management
 Vice President          Company; Vice President and Counsel, Capital Bank and
 (2003)                  Trust Company*
-------------------------------------------------------------------------------
 Karl J. Zeile, 42       Senior Vice President - Fixed Income, Capital
 AHIM: President         Research and Management Company
 (2008)
 LTEX: Vice President
 (2004)
-------------------------------------------------------------------------------
 Kimberly S. Verdick,    Vice President - Fund Business Management Group,
 45                      Capital Research and Management Company
 Secretary (1994)
-------------------------------------------------------------------------------
 M. Susan Gupton, 36     Vice President - Fund Business Management Group,
 Treasurer (2008)        Capital Research and Management Company
-------------------------------------------------------------------------------
 Courtney R. Taylor,     Assistant Vice President - Fund Business Management
 34                      Group, Capital Research and Management Company
 Assistant Secretary
 (2006)
-------------------------------------------------------------------------------
 Ari M. Vinocor, 34      Vice President - Fund Business Management Group,
 Assistant Treasurer     Capital Research and Management Company
 (TEBF - 2007; AHIM -
 2007; LTEX - 2007;
 TEFCA - 2007; STEX -
 2005)
-------------------------------------------------------------------------------



* Company affiliated with Capital Research and Management Company.

1 The term "independent" director/trustee refers to a director/trustee who is
 not an "interested person" of the funds within the meaning of the 1940 Act, as
 amended.
2 Directors/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 composed of 16
 funds and serves as the underlying investment vehicle for certain variable
 insurance contracts; American Funds Target Date Retirement Series,(R)/ /Inc.,
 which is composed of nine funds and is available through tax-deferred
 retirement plans and IRAs; and Endowments, which is composed of two portfolios
 and is available to certain nonprofit organizations.
4 This includes all directorships (other than those in the American Funds or
 other funds managed by Capital Research and Management Company) that are held
 by each director/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 2008 gross revenues.

6 "Interested persons" of the funds within the meaning of the 1940 Act, as
 amended, 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). The listed individual may not be a
 director/trustee of all funds listed for him or her, but rather may be an
 officer of one or more such funds.
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 DIRECTORS/TRUSTEES AND OFFICERS OF THE FUNDS IS 333 SOUTH
HOPE STREET, 55TH FLOOR, LOS ANGELES, CALIFORNIA 90071, ATTENTION: SECRETARY.


                       Tax-Exempt Income Funds -- Page 24
<PAGE>



FUND SHARES OWNED BY DIRECTORS/TRUSTEES AS OF DECEMBER 31, 2008:



                                                                                       AGGREGATE
                                                                                        DOLLAR
                                                                                      RANGE/1/ OF
                                                                                      INDEPENDENT
                                                                                  DIRECTORS/TRUSTEES
                                            AGGREGATE DOLLAR        DOLLAR             DEFERRED
                                                RANGE/1/          RANGE/1 /OF       COMPENSATION/2/
                                                OF SHARES         INDEPENDENT        ALLOCATED TO
                                                OWNED IN          DIRECTORS/           ALL FUNDS
                                                ALL FUNDS          TRUSTEES             WITHIN
                                                 WITHIN            DEFERRED            AMERICAN
                         DOLLAR RANGE/1/      AMERICAN FUNDS    COMPENSATION/2/          FUNDS
                             OF FUND         FAMILY OVERSEEN       ALLOCATED        FAMILY OVERSEEN
         NAME             SHARES OWNED     BY DIRECTOR/TRUSTEE      TO FUND       BY DIRECTOR/TRUSTEE
------------------------------------------------------------------------------------------------------

 "INDEPENDENT" DIRECTORS/TRUSTEES
------------------------------------------------------------------------------------------------------
 Richard G. Capen,            TEBF:           Over $100,000        TEBF: N/A         Over $100,000
 Jr.                      Over $100,000                            AHIM: N/A
                           AHIM: None                              LTEX: N/A
                           LTEX: None                             TEFCA: N/A
                           TEFCA: None                               STEX:
                           STEX: None                              $10,001-
                                                                    $50,000
------------------------------------------------------------------------------------------------------
 H. Frederick                 TEBF:           Over $100,000        TEBF: N/A         Over $100,000
 Christie                 Over $100,000                            AHIM: N/A
                           AHIM: None                              LTEX: N/A
                           LTEX: None                             TEFCA: N/A
                             TEFCA:                                STEX: N/A
                          Over $100,000
                           STEX: None
------------------------------------------------------------------------------------------------------
 James G. Ellis/3/            TEBF:           Over $100,000        TEBF: N/A              N/A
                        $10,001 - $50,000                          AHIM: N/A
                              AHIM:                                LTEX: N/A
                        $10,001 - $50,000                         TEFCA: N/A
                              LTEX:                                STEX: N/A
                        $10,001 - $50,000
                           TEFCA: None
                           STEX: None
------------------------------------------------------------------------------------------------------
 Martin Fenton                TEBF:           Over $100,000        TEBF: N/A         Over $100,000
                        $10,001 - $50,000                          AHIM: N/A
                              AHIM:                                LTEX: N/A
                          $1 - $10,000                            TEFCA: N/A
                              LTEX:                                  STEX:
                        $10,001 - $50,000                          $10,001 -
                             TEFCA:                                 $50,000
                          Over $100,000
                              STEX:
                        $10,001 - $50,000
------------------------------------------------------------------------------------------------------
 Leonard R. Fuller          TEBF: None      $50,001 - $100,000     TEBF: N/A         Over $100,000
                           AHIM: None                              AHIM: N/A
                           LTEX: None                                LTEX:
                           TEFCA: None                           $1 - $10,000
                           STEX: None                            TEFCA: N/A
                                                                     STEX:
                                                                 $1 - $10,000
------------------------------------------------------------------------------------------------------
 R. Clark Hooper              TEBF:           Over $100,000        TEBF: N/A       $50,001 - $100,000
                        $10,001 - $50,000                          AHIM: N/A
                           AHIM: None                              LTEX: N/A
                           LTEX: None                             TEFCA: N/A
                           TEFCA: None                             STEX: N/A
                           STEX: None
------------------------------------------------------------------------------------------------------
 Laurel B.                 STEX: None             None             STEX: N/A              N/A
 Mitchell/3/               TEFCA: None                            TEFCA: None
------------------------------------------------------------------------------------------------------
 Richard G. Newman            TEBF:           Over $100,000        TEBF: N/A              N/A
                        $10,001 - $50,000                          AHIM: N/A
                              AHIM:                                LTEX: N/A
                        $10,001 - $50,000                         TEFCA: N/A
                              LTEX:                                STEX: N/A
                        $10,001 - $50,000
                             TEFCA:
                        $10,001 - $50,000
                              STEX:
                          $1 - $10,000
------------------------------------------------------------------------------------------------------
 Frank M. Sanchez             TEBF:         $10,001 - $50,000      TEBF: N/A              N/A
                          $1 - $10,000                             AHIM: N/A
                              AHIM:                                LTEX: N/A
                          $1 - $10,000                            TEFCA: N/A
                              LTEX:                                STEX: N/A
                          $1 - $10,000
                             TEFCA:
                          $1 - $10,000
                              STEX:
                          $1 - $10,000
------------------------------------------------------------------------------------------------------
 Margaret                   STEX: None            None             STEX: N/A              N/A
 Spellings/4/
------------------------------------------------------------------------------------------------------
 Steadman Upham/3/          TEBF: None        Over $100,000        TEBF: N/A       Over $100,000
                           AHIM: None                              AHIM: N/A
                           LTEX: None                              LTEX: N/A
                           TEFCA: None                            TEFCA: N/A
                            STEX: None                             STEX: N/A
------------------------------------------------------------------------------------------------------




                       Tax-Exempt Income Funds -- Page 25
<PAGE>


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

                       Tax-Exempt Income Funds -- Page 26
<PAGE>






                                                              AGGREGATE DOLLAR RANGE/1/
                                                                      OF SHARES
                                                                 OWNED IN ALL FUNDS
                                DOLLAR RANGE/1/                 WITHIN AMERICAN FUNDS
                                    OF FUND                        FAMILY OVERSEEN
       NAME                       SHARES OWNED                   BY DIRECTOR/TRUSTEE
----------------------------------------------------------------------------------------

 "INTERESTED" DIRECTORS/TRUSTEES
----------------------------------------------------------------------------------------
 Brenda S. Ellerin          TEBF                N/A                 Over $100,000
                            AHIM                N/A
                            LTEX           Over $100,000
                           TEFCA                N/A
                            STEX           Over $100,000
----------------------------------------------------------------------------------------
 Abner D.                   TEBF           Over $100,000            Over $100,000
 Goldstine                  AHIM         $10,001 - $50,000
                            LTEX         $50,001 - $100,000
                           TEFCA         $10,001 - $50,000
                            STEX                N/A
----------------------------------------------------------------------------------------
 Paul G. Haaga,             TEBF           Over $100,000            Over $100,000
 Jr.                        AHIM           Over $100,000
                            LTEX           Over $100,000
                           TEFCA           Over $100,000
                            STEX                None
----------------------------------------------------------------------------------------
 Neil L. Langberg           TEBF           Over $100,000            Over $100,000
                            AHIM                N/A
                            LTEX                N/A
                           TEFCA                N/A
                            STEX                N/A
----------------------------------------------------------------------------------------
 Mark R. Macdonald          TEBF                N/A                 Over $100,000
                            AHIM           Over $100,000
                            LTEX                N/A
                           TEFCA                N/A
                            STEX                N/A
----------------------------------------------------------------------------------------






                       Tax-Exempt Income Funds -- Page 27
<PAGE>


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. N/A indicates that
 the listed individual is not a director/trustee of a particular fund. The
 amounts listed for "interested" directors/trustees include shares owned through
 The Capital Group Companies, Inc. retirement plan and 401(k) plan.
2 Eligible directors/trustees may defer their compensation under a nonqualified
 deferred compensation plan. Deferred amounts accumulate at an earnings rate
 determined by the total return of one or more American Funds as designated by
 the director/trustee.
3 James G. Ellis and Steadman Upham were elected to the STEX board of trustees
 in 2009. Laurel B. Mitchell was elected to the STEX and TEFCA boards of trustees
 in 2009. As of June 30, 2009, Dr. Mitchell owned shares of all funds in the
 American Funds family overseen by her in the range of $10,001 - $50,000.

4 Margaret Spellings was appointed to the board of trustees effective August 7,
 2009.

DIRECTOR/TRUSTEE COMPENSATION -- No compensation is paid by the funds to any
officer or director/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 director/trustee an annual fee, which ranges from $2,606 to $5,276
for TEBF, $604 to $1,226 for AHIM, $548 to $1,110 for LTEX, $536 to $1,086 for
TEFCA and $424 to $860 for STEX, based primarily on the total number of board
clusters on which that independent director/ trustee serves.


In addition, the funds generally pay independent directors/trustees attendance
and other fees for meetings of the board and its committees. Board and committee
chairs receive additional fees for their services.


Independent directors/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 director/trustee each pay an equal portion of
these attendance fees.


No pension or retirement benefits are accrued as part of fund expenses.
Independent directors/ 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
directors/trustees.


                       Tax-Exempt Income Funds -- Page 28
<PAGE>


DIRECTOR/TRUSTEE COMPENSATION EARNED DURING THE FISCAL YEAR ENDED JULY 31 OR
AUGUST 31, 2009/*/




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

 Richard G. Capen,         $ 8,347         TEBF                 $245,638/6/
 Jr./3/                      2,404         AHIM                  248,564/7/
                             1,679         LTEX
                             2,059         TEFCA
                             1,872         STEX
-------------------------------------------------------------------------------------
 H. Frederick                7,553         TEBF                  355,150/6/
 Christie/3/                 2,211         AHIM                  366,509/7/
                             1,609         LTEX
                             1,908         TEFCA
                             1,828         STEX
-------------------------------------------------------------------------------------
 James G. Ellis/4/          10,693         TEBF                  213,421/6/
                             3,633         AHIM                  221,988/7/
                             2,677         LTEX
                             2,954         TEFCA
                              None         STEX
-------------------------------------------------------------------------------------
 Martin Fenton/3/           11,451         TEBF                  433,270/6/
                             3,828         AHIM                  439,940/7/
                             2,808         LTEX
                             3,118         TEFCA
                             1,656         STEX
-------------------------------------------------------------------------------------
 Leonard R. Fuller/3/        7,905         TEBF                  357,303/6/
                             2,276         AHIM                  366,079/7/
                             1,591         LTEX
                              1,948        TEFCA
                             1,760         STEX
-------------------------------------------------------------------------------------
 R. Clark Hooper             7,954         TEBF                  393,002/7/
                             2,325         AHIM                  397,938/7/
                             1,640         LTEX
                             1,997         TEFCA
                             1,809         STEX
-------------------------------------------------------------------------------------
 Laurel B.                     N/A         TEBF                  75,506/6/
 Mitchell/4/                  N/A          AHIM                  80,664/7/
                              N/A          LTEX
                             1,158         TEFCA
                              None         STEX
-------------------------------------------------------------------------------------
 Richard G. Newman          11,140         TEBF                  300,684/6/
                             6,449         AHIM                  316,510/7/
                             4,512         LTEX
                             3,014         TEFCA
                             1,409         STEX
-------------------------------------------------------------------------------------
 Frank M. Sanchez           13,976         TEBF                  153,904/6/
                             4,058         AHIM                  157,683/7/
                             2,972         LTEX
                             3,733         TEFCA
                             1,514         STEX
-------------------------------------------------------------------------------------
 Margaret                      N/A         TEBF                  19,500/6/
 Spellings/5/                 N/A          AHIM
                            N/A            LTEX
                            N/A            TEFCA
                             None          STEX
-------------------------------------------------------------------------------------
 Steadman                    8,254         TEBF                  224,582/6/
 Upham/3,4/                  2,258         AHIM                  227,487/7/
                             1,527         LTEX
                             1,906         TEFCA
                                None       STEX
-------------------------------------------------------------------------------------





                       Tax-Exempt Income Funds -- Page 29
<PAGE>


* The Tax-Exempt Bond Fund of America's and The Tax-Exempt Fund of California's
 fiscal year ends on August 31. American High-Income Municipal Bond Fund's,
 Limited Term Tax-Exempt Bond Fund of America's and American Funds Short-Term
 Tax-Exempt Bond Fund's fiscal year ends on July 31.

1 Amounts may be deferred by eligible directors/trustees under a nonqualified
 deferred compensation plan adopted by the funds in 1993. Deferred amounts
 accumulate at an earnings rate determined by the total return of one or more
 American Funds as designated by the directors/trustees. Compensation shown in
 this table for the fiscal years ended July 31, 2009 and August 31, 2009 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 composed of 16
 funds and serves as the underlying investment vehicle for certain variable
 insurance contracts; American Funds Target Date Retirement Series,(R)/ /Inc.,
 which is composed of nine funds and is available through tax-deferred
 retirement plans and IRAs; and Endowments, which is composed of two portfolios
 and is available 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 2009
 fiscal year for participating directors/trustees is as follows:
  TEBF - Richard G. Capen, Jr. ($10,897), H. Frederick Christie ($17,487),
  Martin Fenton ($52,174), Leonard R. Fuller ($36,038) and Steadman Upham
  ($14,603); and
  AHIM - Richard G. Capen, Jr. ($7,790), H. Frederick Christie ($11,613), Martin
  Fenton ($22,131), Leonard R. Fuller ($11,098) and Steadman Upham ($4,603); and
  LTEX - Richard G. Capen, Jr. ($7,790), H. Frederick Christie ($11,011), Martin
  Fenton ($32,383), Leonard R. Fuller ($15,705) and Steadman Upham ($3,457); and
  TEFCA - Richard G. Capen, Jr. ($7,746), H. Frederick Christie ($9,009), Martin
  Fenton ($35,023), Leonard R. Fuller ($16,313) and Steadman Upham ($4,403), and
  STEX - Martin Fenton ($15,372) and Leonard R. Fuller ($350).
  Amounts deferred and accumulated earnings thereon are not funded and are
  general unsecured liabilities of the funds until paid to the
  directors/trustees.

4 James G. Ellis, Laurel B. Mitchell and Steadman Upham were elected to the
 STEX board of trustees on June 15, 2009, therefore, they did not receive
 any compensation from the fund during fiscal 2008.
5 Margaret Spellings was appointed to the board of trustees effective August 7,
 2009.

6 For the fiscal year ended July 31, 2009.
7 For the fiscal year ended August 31, 2009.

As of October 1, 2009, the officers and directors/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.


                       Tax-Exempt Income Funds -- Page 30
<PAGE>


FUND ORGANIZATION AND THE BOARD OF DIRECTORS/TRUSTEES

Each fund is an open-end, diversified management investment company. The
Tax-Exempt Bond Fund of America and American High-Income Municipal Bond Fund
were each organized as a Maryland corporation on July 20, 1979 and June 14,
1994, respectively. Limited Term Tax-Exempt Bond Fund of America and The
Tax-Exempt Fund of California were each organized as a Massachusetts business
trust on July 12, 1993 and May 30, 1986, respectively. American Funds Short-Term
Tax-Exempt Bond Fund was organized as The Tax-Exempt Money Fund of America, a
Massachusetts business trust on December 5, 1988, and was reorganized as a
Delaware statutory trust on August 7, 2009. All fund operations are supervised
by the funds' board of directors/trustees which meets periodically and performs
duties required by applicable state and federal laws.


Under Maryland law, the business affairs of a fund is managed under the
direction of the board of directors, and all powers of a fund are exercised by
or under the authority of the board except as reserved to the shareholders by
law or a fund's charter or by-laws. Maryland law requires each director to
perform his/her duties as a director, including his/her duties as a member of
any board committee on which he/she serves, in good faith, in a manner he/she
reasonably believes to be in the best interest of a fund, and with the care that
an ordinarily prudent person in a like position would use under similar
circumstances.


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.


Delaware law charges trustees with the duty of managing the business affairs of
the Trust. Trustees are considered to be fiduciaries of the Trust and must act
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters would use to attain the purposes of the Trust.


Independent board members are paid certain fees for services rendered to the
funds as described above. They may elect to defer all or a portion of these fees
through a deferred compensation plan in effect for the funds.


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 directors/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.



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 a


                       Tax-Exempt Income Funds -- Page 31
<PAGE>


fund's shares, a fund will hold a meeting at which any member of the board could
be removed by a majority vote.


SHAREHOLDER AND DIRECTOR/TRUSTEE RESPONSIBILITY -- Under the laws of
Massachusetts, where  LTEX and TEFCA were organized, there is no express
provision relating to the limitation of liability of the beneficial owners of a
Massachusetts business trust. However, under the laws of Massachusetts and
California, where the 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 the trust itself would be unable
to meet its obligations. The Declaration of Trust of each of LTEX and TEFCA
contains an express disclaimer of shareholder liability for acts or obligations
of the trust and provides that notice of the disclaimer may be given in any
agreement, obligation, or instrument which is entered into or executed by the
trust or trustees. The Declaration of Trust provides for indemnification out of
trust property of any shareholder held personally liable for the obligations of
the trust and also provides for the trust to reimburse such shareholder for all
legal and other expenses reasonably incurred in connection with any such claim
or liability.


Massachusetts law does not include an express provision limiting the liability
of the trustees of a Massachusetts business trust. Under each Articles of
Incorporation or Declaration of Trust of the funds, the directors/trustees or
officers are not liable for actions or failure to act; however they 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. Each fund will provide indemnification to its directors/trustees
and officers as authorized by its By-Laws or Declaration of Trust and by the
1940 Act and the rules and regulations thereunder.


COMMITTEES OF THE BOARD OF DIRECTORS/TRUSTEES -- The funds have an audit
committee comprised of James G. Ellis, Martin Fenton, Richard G. Newman, Frank
M. Sanchez and Margaret Spellings (STEX), 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
directors/trustees. Four audit committee meetings were held during the 2009
fiscal year for TEBF,  TEFCA and STEX, and six audit committee meetings were
held during the 2009 fiscal year for AHIM and LTEX.


The funds have a contracts committee comprised of Richard G. Capen, Jr.; H.
Frederick Christie; James G. Ellis; Martin Fenton; Leonard R. Fuller; R. Clark
Hooper; Laurel B. Mitchell (STEX, TEFCA); Richard G. Newman; Frank M. Sanchez;
Margaret Spellings (STEX) and Steadman Upham, 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 fund may enter into, renew or continue,
and to make its recommendations to the full board of directors/trustees on these
matters. Each fund had one contracts committee meeting held during the 2009
fiscal year.


The funds have a nominating and governance committee comprised of Richard G.
Capen, Jr.; H. Frederick Christie; James G. Ellis; Martin Fenton; Leonard R.
Fuller; R. Clark Hooper; Richard G.


                       Tax-Exempt Income Funds -- Page 32
<PAGE>



Newman; Frank M. Sanchez and Steadman Upham, none of whom is an "interested
person" of the funds within the meaning of the 1940 Act. The committee
periodically reviews such issues as each board's composition, responsibilities,
committees, compensation and other relevant issues, and recommends any
appropriate changes to the full board of directors/trustees. The committee also
evaluates, selects and nominates independent director/trustee candidates to each
board of directors/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 boards. 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. Each fund had
four nominating and governance committee meetings held during the 2009 fiscal
year.


PROXY VOTING PROCEDURES AND PRINCIPLES -- The funds' investment adviser, in
consultation with the funds' board, has adopted Proxy Voting Procedures and
Principles (the "Principles") with respect to voting proxies of securities held
by the funds, other American Funds, Endowments and American Funds Insurance
Series. The complete text of these principles is available on the American Funds
website at americanfunds.com. 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
(including the fund) are voted by a committee of the appropriate equity
investment division 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. Proxies for companies outside the U.S. also are
voted, provided there is sufficient time and information available. After a
proxy statement is received, the investment adviser prepares a summary of the
proposals contained in the proxy statement. A discussion of any potential
conflicts of interest also is included in the summary. For proxies of securities
managed by a particular investment division of the investment adviser, the
initial voting recommendation is made by one or more of the division's
investment analysts familiar with the company and industry. A second
recommendation is made by a proxy coordinator (an investment analyst with
experience in corporate governance and proxy voting matters) within the
appropriate investment division, based on knowledge of these Principles and
familiarity with proxy-related issues. The proxy summary and voting
recommendations are made available to the appropriate proxy voting committee for
a 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 Principles, 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 Principles 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


                       Tax-Exempt Income Funds -- Page 33
<PAGE>


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 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 Principles is available upon request, free
of charge, by calling American Funds Service Company or visiting the American
Funds website.

     DIRECTOR MATTERS -- The election of a company's slate of nominees for
     director generally is 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 also may be
     supported.

     GOVERNANCE PROVISIONS -- Typically, proposals to declassify a board (elect
     all directors annually) are supported based on the belief that this
     increases the directors' sense of accountability to shareholders. Proposals
     for cumulative voting generally are supported in order to promote
     management and board accountability and an opportunity for leadership
     change. Proposals designed to make director elections more meaningful,
     either by requiring a majority vote or by requiring any director receiving
     more withhold votes than affirmative votes to tender his or her
     resignation, generally are supported.

     SHAREHOLDER RIGHTS -- Proposals to repeal an existing poison pill generally
     are supported. (There may be certain circumstances, however, when a proxy
     voting committee of a fund or an investment division of the investment
     adviser believes that a company needs to maintain anti-takeover
     protection.) 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 typically are not 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 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 generally are 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 each fund to own beneficially 5% or more of any
class of its shares as of the opening of business on October 1, 2009. Unless
otherwise indicated, the ownership percentages below represent ownership of
record rather than beneficial ownership.


                       Tax-Exempt Income Funds -- Page 34
<PAGE>


THE TAX-EXEMPT BOND FUND OF AMERICA



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

 Edward D. Jones & Co.                   Record      Class A        18.62%
 Omnibus Account                                     Class B        16.16
 Maryland Heights, MO                                Class F-1      23.08
----------------------------------------------------------------------------
 First Clearing, LLC                     Record      Class A        11.17
 Custody Account                                     Class B        12.15
 St. Louis, MO                                       Class C         9.47
----------------------------------------------------------------------------
 Merrill Lynch                           Record      Class B         8.10
 Omnibus Account                                     Class C        15.65
 Jacksonville, FL                                    Class F-2      15.77
----------------------------------------------------------------------------
 Citigroup Global Markets, Inc.          Record      Class C         6.14
 Omnibus Account                                     Class F-1       8.34
 New York, NY
----------------------------------------------------------------------------
 Charles Schwab & Co., Inc.              Record      Class F-1       5.83
 Custody Account
 San Francisco. CA
----------------------------------------------------------------------------
 LPL Financial                           Record      Class F-2       5.03
 Omnibus Account
 San Diego, CA
----------------------------------------------------------------------------



AMERICAN HIGH-INCOME MUNICIPAL BOND FUND



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

 Edward D. Jones & Co.                       Record      Class A        24.47%
 Omnibus Account                                         Class B        21.50
 Maryland Heights, MO                                    Class C         6.41
--------------------------------------------------------------------------------
 First Clearing, LLC                         Record      Class A         9.66
 Custody Account                                         Class B        11.70
 St. Louis, MO                                           Class C        11.96
                                                         Class F-1       6.44
--------------------------------------------------------------------------------
 Citigroup Global Markets, Inc.              Record      Class A         5.03
 Omnibus Account                                         Class C         5.06
 New York, NY
--------------------------------------------------------------------------------
 Merrill Lynch                               Record      Class B         7.72
 Omnibus Account                                         Class C        11.04
 Jacksonville, FL                                        Class F-2      16.28
--------------------------------------------------------------------------------
 Charles Schwab & Co., Inc.                  Record      Class F-1      11.31
 Custody Account                                         Class F-2       5.05
 San Francisco. CA
--------------------------------------------------------------------------------
 Capital Guardian Trust Company              Record      Class F-2      12.18
 Personal Investment Management Account      Beneficial
 #1
 Irvine, CA
--------------------------------------------------------------------------------
 LPL Financial                               Record      Class F-2      10.60
 Omnibus Account
 San Diego, CA
--------------------------------------------------------------------------------
 NFS, LLC FEBO                               Record      Class F-2       8.02
 Commerce National Bank                      Beneficial
 Dallas, TX
--------------------------------------------------------------------------------
 Capital Guardian Trust Company              Record      Class F-2       6.68
 Personal Investment Management Account      Beneficial
 #2
 Irvine, CA
--------------------------------------------------------------------------------




                       Tax-Exempt Income Funds -- Page 35
<PAGE>


LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA



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

 Edward D. Jones & Co.                    Record      Class A        13.33%
 Omnibus Account                                      Class B        10.67
 Maryland Heights, MO
-----------------------------------------------------------------------------
 First Clearing, LLC                      Record      Class A        11.83
 Custody Account                                      Class B        11.13
 St. Louis, MO                                        Class C        10.75
                                                      Class F-1       8.84
-----------------------------------------------------------------------------
 Merrill Lynch                            Record      Class B        16.69
 Omnibus Account                                      Class C        22.47
 Jacksonville, FL                                     Class F-2      11.15
-----------------------------------------------------------------------------
 Citigroup Global Markets, Inc.           Record      Class C         5.65
 Omnibus Account
 New York, NY
-----------------------------------------------------------------------------
 Penson Financial Services, Inc.          Record      Class F-1       8.67
 FBO Individual Investor                  Beneficial
 Bloomfield, MI
-----------------------------------------------------------------------------
 Morgan Stanley & Co., Inc.               Record      Class F-1       5.65
 Omnibus Account
 Jersey City, NJ
-----------------------------------------------------------------------------
 Capital Guardian Trust Company           Record      Class F-2       5.06
 Personal Investment Management           Beneficial
 Account
 Irvine, CA
-----------------------------------------------------------------------------






                       Tax-Exempt Income Funds -- Page 36
<PAGE>


THE TAX-EXEMPT FUND OF CALIFORNIA



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

 Edward D. Jones & Co.                   Record      Class A        13.30%
 Omnibus Account                                     Class B         9.69
 Maryland Heights, MO
----------------------------------------------------------------------------
 First Clearing, LLC                     Record      Class A         8.68
 Custody Account                                     Class B        11.02
 St. Louis, MO                                       Class C        12.57
----------------------------------------------------------------------------
 Citigroup Global Markets, Inc.          Record      Class A         5.72
 Omnibus Account                                     Class C         6.34
 New York, NY                                        Class F-1       5.31
----------------------------------------------------------------------------
 Merrill Lynch                           Record      Class B         9.32
 Omnibus Account                                     Class C        21.08
 Jacksonville, FL                                    Class F-2       6.82
----------------------------------------------------------------------------
 Morgan Stanley & Co., Inc.              Record      Class B         6.04
 Omnibus Account
 Jersey City, NJ
----------------------------------------------------------------------------
 Charles Schwab & Co., Inc.              Record      Class F-1       9.67
 Custody Account                                     Class F-2       8.59
 San Francisco. CA
----------------------------------------------------------------------------
 LPL Financial                           Record      Class F-1       8.33
 Omnibus Account
 San Diego, CA
----------------------------------------------------------------------------



AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND



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

 Trust Account                               Beneficial  Class A         8.97%
 Los Angeles, CA
--------------------------------------------------------------------------------
 First Clearing, LLC                         Record      Class A         6.86
 Custody Account                                         Class F-1      93.83
 St. Louis, MO
--------------------------------------------------------------------------------
 Raymond James & Associates, Inc.            Record      Class F-1       6.17
 FBO Individual Investor                     Beneficial
 Yardley, PA
--------------------------------------------------------------------------------
 Capital Guardian Trust Company              Record      Class F-2      72.36
 Personal Investment Management Account      Beneficial
 #1
 Irvine, CA
--------------------------------------------------------------------------------
 LPL Financial                               Record      Class F-2      15.88
 Omnibus Account
 San Diego, CA
--------------------------------------------------------------------------------
 Capital Guardian Trust Company              Record      Class F-2      11.76
 Personal Investment Management Account      Beneficial
 #2
 Irvine, CA
--------------------------------------------------------------------------------




                       Tax-Exempt Income Funds -- Page 37
<PAGE>


UNLESS OTHERWISE NOTED, REFERENCES IN THIS STATEMENT OF ADDITIONAL INFORMATION
TO CLASS F SHARES REFER TO BOTH CLASS F-1 AND F-2 SHARE CLASSES.

INVESTMENT ADVISER -- Capital Research and Management Company, the funds'
investment adviser, founded in 1931, maintains research facilities in the United
States and abroad (Los 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 6455 Irvine Center Drive, Irvine,
CA 92618. It is a wholly owned subsidiary of The Capital Group Companies, Inc.,
a holding company for several investment management subsidiaries. Capital
Research and Management Company manages equity assets through two investment
divisions, Capital World Investors and Capital Research Global Investors, and
manages fixed-income assets through its Fixed Income division. Capital World
Investors and Capital Research Global Investors make investment decisions on an
independent basis.


The investment adviser has adopted policies and procedures that address issues
that may arise as a result of an investment professional's management of the
funds and other funds and accounts. Potential issues could involve allocation of
investment opportunities and trades among funds and accounts, use of information
regarding the timing of fund trades, investment professional compensation and
voting relating to portfolio securities. The investment adviser believes that
its policies and procedures are reasonably designed to address these issues.


COMPENSATION OF INVESTMENT PROFESSIONALS -- As described in the prospectus, the
investment adviser uses a system of multiple portfolio counselors in managing
fund assets. In addition, Capital Research and Management Company's investment
analysts may make investment decisions with respect to a portion of a fund's
portfolio within their research coverage.


Portfolio counselors and investment analysts are paid competitive salaries by
Capital Research and Management Company. In addition, they may receive bonuses
based on their individual portfolio results. Investment professionals also may
participate in profit-sharing plans. The relative mix of compensation
represented by bonuses, salary and profit-sharing plans will vary depending on
the individual's portfolio results, contributions to the organization and other
factors.


To encourage a long-term focus, bonuses based on investment results are
principally determined by comparing pretax total investment returns to relevant
benchmarks over the most recent year, a four-year rolling average and an
eight-year rolling average with greater weight placed on the four-year and
eight-year rolling averages. For portfolio counselors, benchmarks may include
measures of the marketplaces in which the fund invests and measures of the
results of comparable mutual funds. For investment analysts, benchmarks may
include relevant market measures and appropriate industry or sector indexes
reflecting their areas of expertise. Capital Research and Management Company
makes periodic subjective assessments of analysts' contributions to the
investment process and this is an element of their overall compensation. The
investment results of each of the funds' portfolio counselors may be measured
against one or more of the following benchmarks depending on his or her
investment focus:


                       Tax-Exempt Income Funds -- Page 38
<PAGE>


     The Tax-Exempt Bond Fund of America -- Lipper General Municipal Debt Funds
     Average and Barclays Capital Municipal Bond Index;

     American High-Income Municipal Bond Fund -- Lipper High Yield Municipal
     Debt Funds Average, Barclays Capital Municipal Bond Index and Barclays
     Capital Municipal High Yield Index;

     Limited Term Tax-Exempt Bond Fund of America -- Lipper Intermediate
     Municipal Debt Funds Average and Barclays Capital Municipal
     Intermediate-Short (1-10 Year) Index;

     The Tax-Exempt Fund of California -- Lipper California Municipal Debt Funds
     Average and Barclays Capital California Municipal Bond index; and


     American Funds Short-Term Tax-Exempt Bond Fund -- Barclays Capital
     Municipal Short (1-5 Year) Index and Lipper Short Municipal Debt Funds
     Average.

PORTFOLIO COUNSELOR FUND HOLDINGS AND OTHER MANAGED ACCOUNTS -- As described
below, portfolio counselors may personally own shares of the funds. In addition,
portfolio counselors may manage portions of other mutual funds or accounts
advised by Capital Research and Management Company or its affiliates.


THE FOLLOWING TABLE REFLECTS INFORMATION AS OF JULY 31, 2009 FOR AHIM, LTEX AND
STEX, AND AUGUST 31, 2009 FOR TEBF AND TEFCA:





                                        NUMBER             NUMBER
                                       OF OTHER           OF OTHER           NUMBER
                                      REGISTERED           POOLED           OF OTHER
                                      INVESTMENT         INVESTMENT         ACCOUNTS
                                   COMPANIES (RICS)    VEHICLES (PIVS)      FOR WHICH
                                      FOR WHICH           FOR WHICH         PORTFOLIO
                                      PORTFOLIO           PORTFOLIO         COUNSELOR
                    DOLLAR RANGE      COUNSELOR           COUNSELOR       IS A MANAGER
                      OF FUND        IS A MANAGER       IS A MANAGER       (ASSETS OF
    PORTFOLIO          SHARES      (ASSETS OF RICS     (ASSETS OF PIVS   OTHER ACCOUNTS
    COUNSELOR         OWNED/1/     IN BILLIONS)/2/     IN BILLIONS)/3/   IN BILLIONS)/4/
------------------------------------------------------------------------------------------

 THE TAX-EXEMPT BOND FUND OF AMERICA
------------------------------------------------------------------------------------------
 Brenda S.           $100,001 -       4       $ 5.6         None              None
 Ellerin              $500,000
------------------------------------------------------------------------------------------
 Neil L. Langberg    $100,001 -       4       $ 6.4         None              None
                      $500,000
------------------------------------------------------------------------------------------
 Karl J. Zeile       $500,001 -       2       $ 3.8         None              None
                     $1,000,000
------------------------------------------------------------------------------------------
 AMERICAN HIGH-INCOME MUNICIPAL BOND FUND
------------------------------------------------------------------------------------------
 Brenda S.           $100,001 -       4       $12.3         None              None
 Ellerin              $500,000
------------------------------------------------------------------------------------------
 Neil L. Langberg    $100,001 -       4       $13.1         None              None
                      $500,000
------------------------------------------------------------------------------------------
 Karl J. Zeile       $100,001 -       2       $10.5         None              None
                      $500,000
------------------------------------------------------------------------------------------
 LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
------------------------------------------------------------------------------------------
 Brenda S.           $500,001 -       4       $12.3         None              None
 Ellerin             $1,000,000
------------------------------------------------------------------------------------------
 Neil L. Langberg    $100,001 -       4       $13.1         None              None
                      $500,000
------------------------------------------------------------------------------------------
 THE TAX-EXEMPT FUND OF CALIFORNIA
------------------------------------------------------------------------------------------
 Neil L. Langberg    $100,001 -       4       $13.7         None              None
                      $500,000
------------------------------------------------------------------------------------------
 Edward B.           $500,001 -       1       $ 0.8         None              None
 Nahmias             $1,000,000
------------------------------------------------------------------------------------------
 Karl J. Zeile       $100,001 -       2       $11.1         None              None
                      $500,000
------------------------------------------------------------------------------------------
 AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND
------------------------------------------------------------------------------------------
 Brenda S.            None/5/         4       $14.1         None              None
 Ellerin
------------------------------------------------------------------------------------------
 Neil L. Langberg    $100,001 -       4       $14.9         None              None
                      $500,000
------------------------------------------------------------------------------------------




                       Tax-Exempt Income Funds -- Page 39
<PAGE>


1 Ownership disclosure is made using the following ranges: None; $1 - $10,000;
 $10,001 - $50,000; $50,001 - $100,000; $100,001 - $500,000; $500,001 -
 $1,000,000; and Over $1,000,000.
2 Indicates fund(s) where the portfolio counselor also has significant
 responsibilities for the day to day management of the fund(s). Assets noted are
 the total net assets of the registered investment companies and are not the
 total assets managed by the individual, which is a substantially lower amount.
 No fund has an advisory fee that is based on the performance of the fund.
3 Represents funds advised or sub-advised by Capital Research and Management
 Company and sold outside the United States and/ or fixed-income assets in
 institutional accounts managed by investment adviser subsidiaries of Capital
 Group International, Inc., an affiliate of Capital Research and Management
 Company. Assets noted are the total net assets of the funds or accounts and are
 not the total assets managed by the individual, which is a substantially lower
 amount. No fund or account has an advisory fee that is based on the performance
 of the fund or account.
4 Reflects other professionally managed accounts held at companies affiliated
 with Capital Research and Management Company. Personal brokerage accounts of
 portfolio counselors and their families are not reflected.

5 As of September 30, 2009, Brenda S. Ellerin owned $100,001 - $500,000 shares of
 the fund.


                       Tax-Exempt Income Funds -- Page 40
<PAGE>



INVESTMENT ADVISORY AND SERVICE AGREEMENT -- The Investment Advisory and Service
Agreements (the "Agreements") between the funds and the investment adviser will
continue in effect until May 31, 2010, and between American Funds Short-Term
Tax-Exempt Bond Fund and the investment adviser until October 1, 2010, 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 (a)
the board of directors/trustees, or by the vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of the relevant fund, and (b) the
vote of a majority of directors/trustees who are not parties to the Agreements
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
Agreements provide 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 Agreements. The Agreements also provide that either
party has the right to terminate them, without penalty, upon 60 days' written
notice to the other party, and that the Agreements automatically terminate in
the event of their 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
funds' plans of distribution (described below); legal and auditing expenses;
compensation, fees and expenses paid to independent directors/trustees;
association dues; costs of stationery and forms prepared exclusively for the
funds; and costs of assembling and storing shareholder account data.


THE TAX-EXEMPT BOND FUND OF AMERICA: The investment adviser receives a monthly
fee based on the following annualized rates and net asset levels:


                                Net asset level



          RATE                  IN EXCESS OF                  UP TO
------------------------------------------------------------------------------

         0.30%                $             0            $    60,000,000
------------------------------------------------------------------------------
         0.21                      60,000,000              1,000,000,000
------------------------------------------------------------------------------
         0.18                   1,000,000,000              3,000,000,000
------------------------------------------------------------------------------
         0.15                   3,000,000,000              6,000,000,000
------------------------------------------------------------------------------
         0.13                   6,000,000,000             10,000,000,000
------------------------------------------------------------------------------
         0.12                  10,000,000,000
------------------------------------------------------------------------------




                       Tax-Exempt Income Funds -- Page 41
<PAGE>


The Agreement also provides for fees based on monthly gross investment income at
the following annualized rates:


                        Monthly gross investment income



            RATE                     IN EXCESS OF                  UP TO
-----------------------------------------------------------------------------------

            3.00%                     $        0                 $3,333,333
-----------------------------------------------------------------------------------
            2.50                       3,333,333                  8,333,333
-----------------------------------------------------------------------------------
            2.00                       8,333,333
-----------------------------------------------------------------------------------




For the purposes of such computations under the Agreement, the fund's gross
investment income shall be determined in accordance with generally accepted
accounting principles and does not reflect any net realized gains or losses on
the sale of portfolio securities but does include original-issue discount as
defined for federal income tax purposes.


For the fiscal years ended August 31, 2009, 2008 and 2007, the investment
adviser was entitled to receive from the fund management fees of $21,114,000,
$19,191,000 and $16,175,000, respectively. After giving effect to the management
fee waivers described below, the fund paid the investment adviser management
fees of $20,434,000 (a reduction of $680,000), $17,272,000 (a reduction of
$1,919,000) and $14,557,000 (a reduction of $1,618,000)) for the fiscal years
ended August 31, 2009, 2008 and 2007, respectively.


AMERICAN HIGH-INCOME MUNICIPAL BOND FUND: The investment adviser receives a
monthly fee based on the following annualized rates and net asset levels:


                                Net asset level



          RATE                  IN EXCESS OF                  UP TO
------------------------------------------------------------------------------

         0.30%                 $            0             $   60,000,000
------------------------------------------------------------------------------
         0.21                      60,000,000              1,000,000,000
------------------------------------------------------------------------------
         0.18                   1,000,000,000              3,000,000,000
------------------------------------------------------------------------------
         0.15                   3,000,000,000
------------------------------------------------------------------------------



The Agreement also provides for fees based on monthly gross investment income at
the following annualized rates:


                        Monthly gross investment income



            RATE                     IN EXCESS OF                  UP TO
-----------------------------------------------------------------------------------

            3.00%                     $        0                 $3,333,333
-----------------------------------------------------------------------------------
            2.50                       3,333,333
-----------------------------------------------------------------------------------



For the purposes of such computations under the Agreement, the fund's gross
investment income shall be determined in accordance with generally accepted
accounting principles and


                       Tax-Exempt Income Funds -- Page 42
<PAGE>


does not reflect any net realized gains or losses on the sale of portfolio
securities but does include original issue discount as defined for federal
income tax purposes.


For the fiscal years ended July 31, 2009, 2008 and 2007, the investment adviser
was entitled to receive from the fund management fees of $7,060,000, $7,588,000
and $7,129,000, respectively. After giving effect to the management fee waivers
described below, the fund paid the investment adviser management  fees of
$6,758,000 (a reduction of $302,000), $6,829,000 (a reduction of $759,000) and
$6,416,000 (a reduction of $713,000) for the fiscal years ended July 31, 2009,
2008 and 2007, respectively.


The investment adviser has agreed that in the event the Class A expenses of the
fund (with the exclusion of interest, taxes, brokerage costs, distribution
expenses pursuant to a plan under rule 12b-1 and 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
the Agreement is in effect exceed the expense limitations, if any, applicable to
the fund pursuant to state securities laws or any related regulations, 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 the fund in the amount
of such excess. To the extent the fund's management fee must be waived due to
Class A share expense ratios exceeding the above limit, management fees will be
reduced similarly for all classes of shares of the fund, or other Class A fees
will be waived in lieu of management fees.


LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA: The investment adviser receives a
monthly fee based on the following annualized rates and net asset levels:


                                Net asset level



          RATE                  IN EXCESS OF                  UP TO
------------------------------------------------------------------------------

         0.30%                 $            0             $   60,000,000
------------------------------------------------------------------------------
         0.18                      60,000,000              1,000,000,000
------------------------------------------------------------------------------
         0.15                   1,000,000,000
------------------------------------------------------------------------------



The Agreement also provides for fees based on monthly gross investment income at
the following annualized rates:


                        Monthly gross investment income





          RATE                  IN EXCESS OF                  UP TO
------------------------------------------------------------------------------

         3.00%                   $        0                 $3,333,333
------------------------------------------------------------------------------
         2.50                     3,333,333
------------------------------------------------------------------------------




For the purposes of such computations under the Agreement, the fund's gross
investment income shall be determined in accordance with generally accepted
accounting principles and does not reflect any net realized gains or losses on
the sale of portfolio securities but does include original issue discount as
defined for federal income tax purposes.


                       Tax-Exempt Income Funds -- Page 43
<PAGE>



For the fiscal years ended July 31, 2009, 2008 and 2007, the investment adviser
was entitled to receive from the fund management fees of $4,564,000, $3,254,000
and $3,045,000, respectively. After giving effect to the management fee waivers
described below, the fund paid the investment adviser management  fees of
$4,402,000 (a reduction of $162,000), $2,929,000 (a reduction of $325,000) and
$2,741,000 (a reduction of $304,000) for the fiscal years ended July 31, 2009,
2008 and 2007, respectively.


The investment adviser has agreed that in the event the Class A expenses of the
fund (with the exclusion of interest, taxes, brokerage costs, distribution
expenses pursuant to a plan under rule 12b-1 and 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
the Agreement is in effect exceed the expense limitations, if any, applicable to
the fund pursuant to state securities laws or any related regulations, 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 the fund in the amount
of such excess. To the extent the fund's management fee must be waived due to
Class A share expense ratios exceeding the above limit, management fees will be
reduced similarly for all classes of shares of the fund, or other Class A fees
will be waived in lieu of management fees.


THE TAX-EXEMPT FUND OF CALIFORNIA: The investment adviser receives a monthly fee
based on the following annualized rates and net asset levels:


                                Net asset level



          RATE                  IN EXCESS OF                  UP TO
------------------------------------------------------------------------------

         0.30%                 $            0             $   60,000,000
------------------------------------------------------------------------------
         0.21                      60,000,000              1,000,000,000
------------------------------------------------------------------------------
         0.18                   1,000,000,000
------------------------------------------------------------------------------



The Agreement also provides for fees based on monthly gross investment income at
the following annualized rates:


                        Monthly gross investment income



            RATE                     IN EXCESS OF                  UP TO
-----------------------------------------------------------------------------------

            3.00%                     $        0                 $3,333,333
-----------------------------------------------------------------------------------
            2.50                       3,333,333
-----------------------------------------------------------------------------------



For the fiscal years ended August 31, 2009, 2008 and 2007, the investment
adviser was entitled to receive from the fund management fees of $5,607,000,
$6,069,000 and $5,192,000, respectively. After giving effect to the management
fee waivers described below, the fund paid the investment adviser management
fees of $5,412,000 (a reduction of $195,000), $5,462,000 (a reduction of
$607,000) and $4,673,000 (a reduction of $519,000) for the fiscal years ended
August 31, 2009, 2008 and 2007, respectively.


The investment adviser has agreed that in the event the Class A expenses of the
fund (with the exclusion of interest, taxes, brokerage costs, distribution
expenses pursuant to a plan under rule


                       Tax-Exempt Income Funds -- Page 44
<PAGE>


12b-1 and 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 the Agreement is in effect exceed the
expense limitations, if any, applicable to the fund pursuant to state securities
laws or any related regulations, 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 the fund in the amount of such excess. To the extent the fund's
management fee must be waived due to Class A share expense ratios exceeding the
above limit, management fees will be reduced similarly for all classes of shares
of the fund, or other Class A fees will be waived in lieu of management fees.


AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND: The investment adviser receives
a monthly fee based on the following annualized rates and net asset levels:






          RATE                  IN EXCESS OF                  UP TO
------------------------------------------------------------------------------

         0.39%                 $            0             $  200,000,000
------------------------------------------------------------------------------
         0.37                     200,000,000                600,000,000
------------------------------------------------------------------------------
         0.33                     600,000,000              1,200,000,000
------------------------------------------------------------------------------
         0.29                   1,200,000,000
------------------------------------------------------------------------------




For the fiscal years ended July 31, 2009 and September 30, 2008 and 2007, the
investment adviser was entitled to receive from the fund management fees of
$2,859,000, $2,915,000 and $1,939,000, respectively. After giving effect to the
management fee waivers described below, the fund paid the investment adviser
management fees of $2,763,000 (a reduction of $96,000), $2,623,000 (a reduction
of $292,000) and $1,745,000 (a reduction of $194,000) for the fiscal years ended
July 31, 2009 and September 30, 2008 and 2007, respectively.


The investment adviser has agreed that in the event the expenses of the 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 the fund's Agreement is in effect, exceed the expense limitations,
if any, applicable to the 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 the 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.


FEE WAIVER -- 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 Agreements. From April 1, 2005 through
December 31, 2008, this waiver increased to 10% of the management fees that the
investment adviser was otherwise entitled to receive. The waiver was
discontinued effective January 1, 2009. In addition, the investment adviser
agreed to waive a portion of its management fees that it was otherwise entitled
to receive under the Agreements for AHIM and LTEX during those funds' 2004
fiscal years.


                       Tax-Exempt Income Funds -- Page 45
<PAGE>



ADMINISTRATIVE SERVICES AGREEMENT -- The Administrative Services Agreement (the
"Administrative Agreement") between each fund and the investment adviser
relating to the funds' Class C and F shares will continue in effect until May
31, 2010 (October 31, 2010 for STEX), 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
directors/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. The fund
may terminate the Administrative Agreement at any time by vote of a majority of
the independent directors/trustees. The investment adviser has the right to
terminate the Administrative Agreement upon 60 days' written notice to the
relevant fund. The Administrative Agreement automatically terminates in the
event of its assignment (as defined in the 1940 Act).


Under the Administrative Agreement, the investment adviser provides certain
transfer agent and administrative services for shareholders of the funds' Class
C and F shares. The investment adviser may contract with third parties,
including American Funds Service Company/(R)/, the funds' Transfer Agent, to
provide some of 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, oversees and assists with the activities
performed by third parties.


The investment adviser receives an administrative services fee at the annual
rate of up to 0.15% of the average daily net assets for each applicable share
class 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 funds. Of the remainder, the investment
adviser does not retain more than 0.05% of the average daily net assets for each
applicable share class. 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, based principally on the number of accounts serviced, contained in a
Shareholder Services Agreement between each fund and American Funds Service
Company. A portion of the fees paid to American Funds Service Company for
transfer agent services is also paid directly from the relevant share class.


                       Tax-Exempt Income Funds -- Page 46
<PAGE>



During the 2009 fiscal year, administrative services fees, gross of any payments
made by the investment adviser, were:





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

                                                                    ADMINISTRATIVE
                                                                     SERVICES FEE
-------------------------------------------------------------------------------------------
                 TEBF                            CLASS C            $    259,000
                                                CLASS F-1              1,077,000
                                                CLASS F-2                 78,000
                                                CLASS R-5                102,000
-------------------------------------------------------------------------------------------
                 AHIM                            CLASS C                 106,000
                                                CLASS F-1                194,000
                                                CLASS F-2                 10,000
                                                CLASS R-5                 14,000
-------------------------------------------------------------------------------------------
                 LTEX                            CLASS C                  50,000
                                                CLASS F-1                 89,000
                                                CLASS F-2                 22,000
                                                CLASS R-5                 88,000
-------------------------------------------------------------------------------------------
                 TEFCA                           CLASS C                  74,000
                                                CLASS F-1                139,000
                                                CLASS F-2                 19,000
                                                CLASS R-5                 66,000
-------------------------------------------------------------------------------------------
                 STEX                           CLASS R-5                105,000
-------------------------------------------------------------------------------------------




TEBF, AHIM, LTEX, TEFCA and STEX discontinued sales of Class R-5 shares on June 15,
2009. STEX did not offer Class B, C or F shares in the 2009 fiscal year and is not
currently offering B and C shares.


PRINCIPAL UNDERWRITER AND PLANS OF DISTRIBUTION -- American Funds
Distributors,/(R)/ 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; 6455 Irvine Center Drive, Irvine, CA
92618; 3500 Wiseman 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 relating to sales of the funds'
shares, as follows:


     .    For Class A shares, the Principal Underwriter receives commission
          revenue consisting of the balance of the Class A sales charge
          remaining after the allowances by the Principal Underwriter to
          investment dealers.

     .    For Class B shares sold prior to April 21, 2009, the Principal
          Underwriter sold its rights to the 0.75% distribution-related portion
          of the 12b-1 fees paid by the fund,


                       Tax-Exempt Income Funds -- Page 47
<PAGE>


          as well as any contingent deferred sales charges, to a third party.
          The Principal Underwriter compensated investment dealers for sales of
          Class B shares out of the proceeds of this sale and kept any amounts
          remaining after this compensation was paid.

     .    For Class C shares, the Principal Underwriter receives any contingent
          deferred sales charges that apply during the first year after
          purchase.

In addition, the funds reimburse the Principal Underwriter for advancing
immediate service fees to qualified dealers and advisers upon the sale of Class
C shares. The fund also reimbursed the Principal Underwriter for advancing
immediate service fees to qualified dealers on sales of Class B shares prior to
April 21, 2009. The funds also reimburse the Principal Underwriter for service
fees paid on a quarterly basis to qualified dealers and advisers in connection
with investments in Class F-1 shares.


Commissions, revenue or service fees retained by the Principal Underwriter after
allowances or compensation to dealers were:




                                                              COMMISSIONS,              ALLOWANCE OR
                                                                REVENUE                 COMPENSATION
                                           FISCAL YEAR      OR FEES RETAINED             TO DEALERS
------------------------------------------------------------------------------------------------------------

               CLASS A/1/
                                              2009             TEBF  $2,587,000          TEBF    9,647,000
                                                               AHIM     709,000          AHIM    2,595,000
                                                               LTEX     536,000          LTEX    2,022,000
                                                              TEFCA     350,000         TEFCA    1,264,000

                                              2008             TEBF  $2,871,000          TEBF   10,880,000
                                                               AHIM     835,000          AHIM    3,170,000
                                                               LTEX     276,000          LTEX    1,090,000
                                                              TEFCA     575,000         TEFCA    2,197,000
                                              2007                    2,726,000          TEBF   10,548,000
                                                               TEBF   1,237,000          AHIM    4,779,000
                                                               AHIM     186,000          LTEX      750,000
                                                               LTEX     695,000         TEFCA    2,667,000
                                                              TEFCA
------------------------------------------------------------------------------------------------------------
               CLASS B/2/
                                              2009             TEBF      24,000          TEBF      167,000
                                                               AHIM       8,000          AHIM       67,000
                                                               LTEX       1,000          LTEX        3,000
                                                              TEFCA       1,000         TEFCA       18,000
                                              2008             TEBF      33,000          TEBF      278,000
                                                               AHIM      17,000          AHIM      107,000
                                                               LTEX       1,000          LTEX        1,000
                                                              TEFCA      12,000         TEFCA       75,000
                                              2007             TEBF      44,000          TEBF      298,000
                                                               AHIM      31,000          AHIM      234,000
                                                               LTEX       3,000          LTEX        6,000
                                                              TEFCA      11,000         TEFCA       70,000
------------------------------------------------------------------------------------------------------------
               CLASS C/2/                     2009             TEBF      30,000          TEBF      971,000
                                                               AHIM       2,000          AHIM      295,000
                                                               LTEX      42,000          LTEX           22
                                                              TEFCA      72,000         TEFCA      125,000
                                              2008             TEBF          --          TEBF      939,000
                                                               AHIM          --          AHIM      314,000
                                                               LTEX      18,000          LTEX           --
                                                              TEFCA      56,000         TEFCA      255,000
                                              2007             TEBF          --          TEBF      791,000
                                                               AHIM          --          AHIM      348,000
                                                               LTEX      33,000          LTEX       13,000
                                                              TEFCA          --         TEFCA      337,000
------------------------------------------------------------------------------------------------------------





                       Tax-Exempt Income Funds -- Page 48
<PAGE>



1 STEX was a money market fund during its 2009, 2008 and 2007 fiscal years and,
 therefore, the Principal Underwriter did not have commissions to disclose.
2 STEX does not currently offer Class B and C shares.

Plans of distribution -- Each of the funds has adopted plans of distribution
(the "Plans") pursuant to rule 12b-1 under the 1940 Act. The Plans permit the
funds to expend amounts to finance any activity primarily intended to result in
the sale of fund shares, provided each fund's board of directors/trustees has
approved the category of expenses for which payment is being made.


Each Plan is specific to a particular share class of each fund. As none of the
funds has adopted a Plan for Class F-2, no 12b-1 fees are paid from Class F-2
share assets and the following disclosure is not applicable to these share
classes.


Payments under the Plans may be made for service-related and/or
distribution-related expenses. Service-related expenses include paying service
fees to qualified dealers. Distribution-related expenses include commissions
paid to qualified dealers. The amounts actually paid under the Plans for the
past fiscal year, expressed as a percentage of the fund's average daily net
assets


                       Tax-Exempt Income Funds -- Page 49
<PAGE>


attributable to the applicable share class, are disclosed in the prospectus
under "Fees and expenses of the fund." Further information regarding the amounts
available under each Plan is in the "Plans of Distribution" section of the
prospectus.


Following is a brief description of the Plans:


     CLASS A -- For Class A shares, up to 0.25% of TEBF's, AHIM's, LTEX's and
     TEFCA's average daily net assets and 0.15% of STEX's average daily net
     assets attributable to such shares are reimbursed to the Principal
     Underwriter for paying service-related expenses, and the balance available
     under the applicable Plan may be paid to the Principal Underwriter for
     distribution-related expenses. TEBF and TEFCA may annually expend up to
     0.25%, AHIM and LTEX may annually expend up to 0.30% and STEX may annually
     expend up to 0.15% for Class A shares under the applicable Plan.

     Distribution-related expenses for Class A shares include dealer commissions
     and wholesaler compensation paid on sales of shares of $1 million or more
     purchased without a sales charge. Commissions on these "no load" purchases
     (which are described in further detail under the "Sales Charges" section of
     this statement of additional information document) in excess of the Class A
     Plan limitations and not reimbursed to the Principal Underwriter during the
     most recent fiscal quarter are recoverable for five quarters, provided that
     the reimbursement of such commissions does not cause the fund to exceed the
     annual expense limit. After five quarters, these commissions are not
     recoverable. As of the funds' most recent fiscal year, unreimbursed
     expenses which remained subject to reimbursement under the Plan for Class A
     shares totaled $9,078,000 or 0.13% of Class A net assets for TEBF,
     $2,654,000 or 0.16% of Class A net assets for LTEX and $1,383,000 or 0.11%
     of Class A net assets for TEFCA.

     CLASS B -- The Plans for Class B shares provide for payments to the
     Principal Underwriter of up to 0.25% of each fund's average daily net
     assets attributable to such shares for paying service-related expenses and
     0.75% for distribution-related expenses, which include the financing of
     commissions paid to qualified dealers.

     CLASS C -- The Plans for Class C shares provide for payments to the
     Principal Underwriter of up to 0.25% of each fund's average daily net
     assets attributable to such shares for paying service-related expenses and
     0.75% for distribution-related expenses.

     CLASS F-1 -- The Plans for Class F-1 shares provide for payments to the
     Principal Underwriter of up to 0.25% of each fund's average daily net
     assets attributable to such shares for paying service-related expenses. The
     funds may annually expend up to 0.50% for Class F-1 shares under the
     applicable Plan with the approval of the board of directors/ trustees.


                       Tax-Exempt Income Funds -- Page 50
<PAGE>



During the 2009 fiscal year, 12b-1 expenses, accrued and paid, and if applicable
unpaid, were:




                                                 12B-1 UNPAID LIABILITY
                        12B-1 EXPENSES                 OUTSTANDING
----------------------------------------------------------------------------

    CLASS A             TEBF    $15,847,000          TEBF     $2,900,000
                        AHIM      4,172,000          AHIM        398,000
                        LTEX      3,889,000          LTEX        431,000
                       TEFCA      3,220,000         TEFCA        672,000
                        STEX        378,000          STEX         47,000
----------------------------------------------------------------------------
    CLASS B             TEBF      1,078,000          TEBF        123,000
                        AHIM        449,000          AHIM         43,000
                        LTEX        255,000          LTEX         25,000
                       TEFCA        171,000         TEFCA         19,000

----------------------------------------------------------------------------
    CLASS C             TEBF      3,382,000          TEBF        685,000
                        AHIM      1,094,000          AHIM        164,000
                        LTEX        673,000          LTEX        100,000
                       TEFCA      1,029,000         TEFCA        196,000

----------------------------------------------------------------------------
   CLASS F-1            TEBF      2,190,000          TEBF        517,000
                        AHIM        364,000          AHIM         69,000
                        LTEX        238,000          LTEX         49,000
                       TEFCA        333,000         TEFCA         81,000

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




TEBF, AHIM, LTEX, TEFCA and STEX discontinued sales of Class R-5 shares on
June 15, 2009. STEX did not offer Class B, C or F shares during the 2009 fiscal
year and is not currently offering B and C shares.


Approval of the Plans - As required by rule 12b-1 and the 1940 Act, the Plans
(together with the Principal Underwriting Agreement) have been approved by the
full boards of directors/trustees and separately by a majority of the
independent directors/trustees of the funds who have no direct or indirect
financial interest in the operation of the Plans or the Principal Underwriting
Agreement. In addition, the selection and nomination of independent
directors/trustees of the funds are committed to the discretion of the
independent directors/trustees during the existence of the Plans.


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 Plans may not be
amended to materially increase the amount spent for distribution without
shareholder approval. Plan expenses are reviewed quarterly by the boards of
directors/ trustees and the Plans must be renewed annually by the boards of
directors/trustees.


REIMBURSEMENT OF CERTAIN CLASS-SPECIFIC EXPENSES -- Due to low short-term
interest rates, the investment adviser has reimbursed class-specific expenses
for STEX's Class A and R-5 shares. For the year ended July 31, 2009, the fees
reimbursed by the investment adviser for Class A and R-5 shares was $423,000.



                       Tax-Exempt Income Funds -- Page 51
<PAGE>


OTHER COMPENSATION TO DEALERS -- As of July 2009, the top dealers (or their
affiliates) that American Funds Distributors anticipates will receive additional
compensation (as described in the prospectus) include:

     AIG Advisors Group
              Advantage Capital Corporation
              American General Securities Incorporated
              FSC Securities Corporation
              Royal Alliance Associates, Inc.
              SagePoint Financial, Inc.
     AXA Advisors, LLC
     Cadaret, Grant & Co., Inc
     Cambridge Investment Research, Inc.
     Commonwealth Financial Network
     Cuna Brokerage Services, 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, W. L. Lyons, LLC
     JJB Hilliard/PNC Bank
              PNC Bank, National Association
              PNC Investments LLC
     Lincoln Financial Advisors Corporation
     Lincoln Financial Securities Corporation
     LPL Group
              Associated Securities Corp.
              LPL Financial Corporation
              Mutual Service Corporation
              Uvest Investment Services
              Waterstone Financial Group, Inc.
     Merrill Lynch, Pierce, Fenner & Smith Incorporated
     Metlife Enterprises
              Metlife Securities Inc.
              New England Securities
              Tower Square Securities, Inc.
              Walnut Street Securities, Inc.
     MML Investors Services, Inc.


                       Tax-Exempt Income Funds -- Page 52
<PAGE>


     Morgan Keegan & Company, Inc.
     Morgan Stanley Smith Barney LLC
     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
     Park Avenue Securities LLC
     PFS Investments Inc.
     Raymond James Group
              Raymond James & Associates, Inc.
              Raymond James Financial Services Inc.
     RBC Capital Markets Corporation
     Robert W. Baird & Co. Incorporated
     Securian / C.R.I.
              CRI Securities, LLC
              Securian Financial Services, Inc.
     U.S. Bancorp Investments, Inc.
     UBS Financial Services Inc.
     Wells Fargo Network
              A. G. Edwards, A Division Of Wells Fargo Advisors, LLC
              First Clearing LLC
              H.D. Vest Investment Securities, Inc.
              Wells Fargo Advisors Financial Network, LLC
              Wells Fargo Advisors Investment Services Group
              Wells Fargo Advisors Latin American Channel
              Wells Fargo Advisors Private Client Group
           Wells Fargo Investments, LLC


                       Tax-Exempt Income Funds -- Page 53
<PAGE>


                      EXECUTION OF PORTFOLIO TRANSACTIONS

The investment adviser places orders with broker-dealers for the funds'
portfolio transactions. Purchases and sales of equity securities on a securities
exchange or an over-the-counter market are effected through broker-dealers who
receive commissions for their services. Generally, commissions relating to
securities traded on foreign exchanges will be higher than commissions relating
to securities traded on U.S. exchanges and may not be subject to negotiation.
Equity securities may also be purchased from underwriters at prices that include
underwriting fees. Purchases and sales of fixed-income securities are generally
made with an issuer or a primary market-maker acting as principal with no stated
brokerage commission. The price paid to an underwriter for fixed-income
securities includes underwriting fees. Prices for fixed-income securities in
secondary trades usually include undisclosed compensation to the market-maker
reflecting the spread between the bid and ask prices for the securities.


In selecting broker-dealers, the investment adviser strives to obtain "best
execution" (the most favorable total price reasonably attainable under the
circumstances) for the funds' portfolio transactions, taking into account a
variety of factors. These factors include the size and type of transaction, the
nature and character of the markets for the security to be purchased or sold,
the cost, quality and reliability of the executions and the broker-dealer's
ability to offer liquidity and anonymity. The investment adviser considers these
factors, which involve qualitative judgments, when selecting broker-dealers and
execution venues for fund portfolio transactions. The investment adviser views
best execution as a process that should be evaluated over time as part of an
overall relationship with particular broker-dealer firms rather than on a
trade-by-trade basis. The funds do not consider the investment adviser as having
an obligation to obtain the lowest commission rate available for a portfolio
transaction to the exclusion of price, service and qualitative considerations.


The investment adviser may execute portfolio transactions with broker-dealers
who provide certain brokerage and/or investment research services to it, but
only when in the investment adviser's judgment the broker-dealer is capable of
providing best execution for that transaction. The receipt of these services
permits the investment adviser to supplement its own research and analysis and
makes available the views of, and information from, individuals and the research
staffs of other firms. Such views and information may be provided in the form of
written reports, telephone contacts and meetings with securities analysts. These
services may include, among other things, reports and other communications with
respect to individual companies, industries, countries and regions, economic,
political and legal developments, as well as scheduling meetings with corporate
executives and seminars and conferences related to relevant subject matters. The
investment adviser considers these services to be supplemental to its own
internal research efforts and therefore the receipt of investment research from
broker-dealers does not tend to reduce the expenses involved in the investment
adviser's research efforts. If broker-dealers were to discontinue providing such
services it is unlikely the investment adviser would attempt to replicate them
on its own, in part because they would then no longer provide an independent,
supplemental viewpoint. Nonetheless, if it were to attempt to do so, the
investment adviser would incur substantial additional costs. Research services
that the investment adviser receives from broker-dealers may be used by the
investment adviser in servicing the funds and other funds and accounts that it
advises; however, not all such services will necessarily benefit the funds.


The investment adviser may pay commissions in excess of what other
broker-dealers might have charged - including on an execution-only basis - for
certain portfolio transactions in recognition of


                       Tax-Exempt Income Funds -- Page 54
<PAGE>


brokerage and/or investment research services provided by a broker-dealer. In
this regard, the investment adviser has adopted a brokerage allocation procedure
consistent with the requirements of Section 28(e) of the U.S. Securities
Exchange Act of 1934. Section 28(e) permits an investment adviser to cause an
account to pay a higher commission to a broker-dealer that provides certain
brokerage and/or investment research services to the investment adviser, if the
investment adviser makes a good faith determination that such commissions are
reasonable in relation to the value of the services provided by such
broker-dealer to the investment adviser in terms of that particular transaction
or the investment adviser's overall responsibility to the funds and other
accounts that it advises. Certain brokerage and/or investment research services
may not necessarily benefit all accounts paying commissions to each such
broker-dealer; therefore, the investment adviser assesses the reasonableness of
commissions in light of the total brokerage and investment research services
provided by each particular broker-dealer.


In accordance with its internal brokerage allocation procedure, each equity
investment division of the investment adviser periodically assesses the
brokerage and investment research services provided by each broker-dealer from
which it receives such services. Using its judgment, each equity investment
division of the investment adviser then creates lists with suggested levels of
commissions for particular broker-dealers and provides those lists to its
trading desks. Neither the investment adviser nor the funds incur any obligation
to any broker-dealer to pay for research by generating trading commissions. The
actual level of business received by any broker-dealer may be less than the
suggested level of commissions and can, and often does, exceed the suggested
level in the normal course of business. As part of its ongoing relationships
with broker-dealers, the investment adviser routinely meets with firms,
typically at the firm's request, to discuss the level and quality of the
brokerage and research services provided, as well as the perceived value and
cost of such services. In valuing the brokerage and investment research services
the investment adviser receives from broker-dealers in connection with its good
faith determination of reasonableness, the investment adviser does not attribute
a dollar value to such services, but rather takes various factors into
consideration, including the quantity, quality and usefulness of the services to
the investment adviser.


The investment adviser seeks, on an ongoing basis, to determine what the
reasonable levels of commission rates are in the marketplace. The investment
adviser takes various considerations into account when evaluating such
reasonableness, including, (a) rates quoted by broker-dealers, (b) the size of a
particular transaction in terms of the number of shares and dollar amount, (c)
the complexity of a particular transaction, (d) the nature and character of the
markets on which a particular trade takes place, (e) the ability of a
broker-dealer to provide anonymity while executing trades, (f) the ability of a
broker-dealer to execute large trades while minimizing market impact, (g) the
extent to which a broker-dealer has put its own capital at risk, (h) the level
and type of business done with a particular broker-dealer over a period of time,
(i) historical commission rates, and (j) commission rates that other
institutional investors are paying.


When executing portfolio transactions in the same equity security for the funds
and accounts, or portions of funds and accounts, over which the investment
adviser, through its equity investment divisions, has investment discretion,
each of the investment divisions will normally aggregate its respective
purchases or sales and execute them as part of the same transaction or series of
transactions. When executing portfolio transactions in the same fixed-income
security for the funds and the other funds or accounts over which it or one of
its affiliated companies has investment discretion, the investment adviser will
normally aggregate such purchases or sales and execute them as part of the same
transaction or series of transactions. The objective of aggregating purchases
and sales of a security is to allocate executions in an equitable manner


                       Tax-Exempt Income Funds -- Page 55
<PAGE>


among the funds and other accounts that have concurrently authorized a
transaction in such security.


The investment adviser may place orders for the funds' portfolio transactions
with broker-dealers who have sold shares of the funds managed by the investment
adviser or its affiliated companies; however, it does not consider whether a
broker-dealer has sold shares of the funds managed by the investment adviser or
its affiliated companies when placing any such orders for the funds' portfolio
transactions.


THE TAX-EXEMPT BOND FUND OF AMERICA -- No brokerage commissions were paid on
portfolio transactions for the 2009 and 2007 fiscal years. Brokerage commissions
of less than $1,000 were paid on portfolio transactions for the 2008 fiscal
year.


AMERICAN HIGH-INCOME MUNICIPAL BOND FUND -- No brokerage commissions were paid
on portfolio transactions for the 2009, 2008 and 2007 fiscal years.


LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA -- No brokerage commissions were
paid on portfolio transactions for the 2009, 2008 and 2007 fiscal years.


THE TAX-EXEMPT FUND OF CALIFORNIA -- No brokerage commissions were paid on
portfolio transactions for the 2009, 2008 and 2007 fiscal years.


AMERICAN FUNDS SHORT-TERM TAX-EXEMPT BOND FUND -- No brokerage commissions were
paid on portfolio transactions for the 2009, 2008 and 2007 fiscal years.


                       Tax-Exempt Income Funds -- Page 56
<PAGE>


                        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 directors/trustees and compliance will be periodically assessed by the board
in connection with reporting from the funds' Chief Compliance Officer.


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 funds' custodian,
outside counsel and auditors, each of which requires portfolio holdings
information for legitimate business and fund oversight purposes, may receive the
information earlier.


Affiliated persons of the funds, including officers of the funds and employees
of the investment adviser and its affiliates, 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 not to trade in securities based on confidential and proprietary
investment information, to maintain the confidentiality of such information, and
to preclear securities trades and report securities transactions activity, as
applicable. For more information on these restrictions and limitations, please
see the "Code of Ethics" section in this statement of additional information and
the Code of Ethics. Third party service providers of the funds, as described in
this statement of additional information, 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 will be bound by agreements (including confidentiality agreements)
or fiduciary obligations 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.


                       Tax-Exempt Income Funds -- Page 57
<PAGE>



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.


                       Tax-Exempt Income Funds -- Page 58
<PAGE>


                                PRICE OF SHARES

Shares are purchased at the offering price 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.


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.


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, while 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 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 p.m., the fund's share price
would still be determined as of 4 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. Each share
class of the funds has a separately calculated net asset value (and share
price).


All portfolio securities of funds managed by Capital Research and Management
Company (other than American Funds Money Market Fund) are valued, and the net
asset values per share for each share class are determined, as indicated below.
The funds follow standard industry practice by typically reflecting changes in
its holdings of portfolio securities on the first business day following a
portfolio trade.


Equity securities, including depositary receipts, are valued at the official
closing price of, or the last reported sale price on, the exchange or market on
which such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. Prices for each security are taken from the principal exchange or market
in which the security trades. Fixed-income securities are valued at prices
obtained from one or more independent pricing vendors, when such prices are
available; however, in circumstances where the investment adviser deems it
appropriate to do so, such securities will be valued in good faith at the mean
quoted bid and asked prices that are reasonably and timely available (or bid
prices, if asked prices are not available) or at prices for securities of
comparable maturity, quality and type. The pricing vendors base bond prices on,
among other things, valuation matrices which may incorporate dealer-supplied
valuations, proprietary pricing models and an evaluation of the yield curve as
of approximately 3 p.m. New York time. The funds' investment adviser performs
certain checks on these prices prior to calculation of the funds' net asset
value.


                       Tax-Exempt Income Funds -- Page 59
<PAGE>


Securities with both fixed-income and equity characteristics (e.g., convertible
bonds, preferred stocks, units comprised of more than one type of security,
etc.), or equity securities traded principally among fixed-income dealers, are
valued in the manner described above for either equity or fixed-income
securities, depending on which method is deemed most appropriate by the
investment adviser.

Securities with original maturities of one year or less having 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. Forward currency contracts are valued at the mean of
representative quoted bid and asked prices.


Assets or liabilities initially expressed in terms of currencies other than U.S.
dollars are translated prior to the next determination of the net asset value of
the funds' shares into U.S. dollars at the prevailing market rates.


Securities and assets for which market quotations are not readily available or
are considered unreliable are valued at fair value as determined in good faith
under policies approved by the funds' board. Subject to board oversight, the
funds' board has delegated the obligation to make fair valuation determinations
to a valuation committee established by the funds' investment adviser. The board
receives regular reports describing fair-valued securities and the valuation
methods used.


The valuation committee has adopted guidelines and procedures (consistent with
SEC rules and guidance) to consider certain relevant principles and factors when
making all fair value determinations. As a general principle, securities lacking
readily available market quotations, or that have quotations that are considered
unreliable by the investment adviser, are valued in good faith by the valuation
committee based upon what the funds might reasonably expect to receive upon
their current sale. Fair valuations and valuations of investments that are not
actively trading involve judgment and may differ materially from valuations that
would have been used had greater market activity occurred. The valuation
committee considers relevant indications of value that are reasonably and timely
available to it in determining the fair value to be assigned to a particular
security, such as the type and cost of the security, contractual or legal
restrictions on resale of the security, relevant financial or business
developments of the issuer, actively traded similar or related securities,
conversion or exchange rights on the security, related corporate actions,
significant events occurring after the close of trading in the security and
changes in overall market conditions.


Each class of shares represents interests in the same portfolio of investments
and is identical in all respects to each other class, except for differences
relating to distribution, service and other charges and expenses, certain voting
rights, differences relating to eligible investors, the designation of each
class of shares, conversion features and exchange privileges. Expenses
attributable to the fund, but not to a particular class of shares, are borne by
each class pro rata based on relative aggregate net assets of the classes.
Expenses directly attributable to a class of shares are borne by that class of
shares. Liabilities, including accruals of taxes and other expense items
attributable to particular share classes, are deducted from total assets
attributable to such share classes.


Net assets so obtained for each share class are divided by the total number of
shares outstanding of that share class, and the result, rounded to the nearest
cent, is the net asset value per share for that share class.


                       Tax-Exempt Income Funds -- Page 60
<PAGE>


                            TAXES AND DISTRIBUTIONS

FUND TAXATION -- Each fund intends to qualify each year as a "regulated
investment company" under Subchapter M of the Internal Revenue Code ("Code") so
that it will not be liable for federal tax on income and capital gains
distributed to shareholders. In order to qualify as a regulated investment
company, and avoid being subject to federal income or excise taxes at the fund
level, each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as on a
fiscal year basis, and intends to comply with other tax rules applicable to
regulated investment companies.


To avoid federal excise taxes, the Code requires each fund to distribute by
December 31 of each year, at a minimum, the following amounts: 98% of its
taxable ordinary income earned during the calendar year; 98% of its capital gain
net income earned during the twelve month period ending October 31; and 100% of
any undistributed amounts from the prior year.


Interest on the municipal securities purchased by each fund 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, dividends derived from this interest may be taxable to you,
and you may need to file an amended tax return.


DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

     DIVIDENDS -- By meeting certain requirements of the Code, each fund
     qualifies to pay exempt-interest dividends to shareholders. These dividends
     ("exempt-interest dividends") are derived from interest income exempt from
     regular federal income tax, and are not subject to regular federal income
     tax when they are distributed to fund shareholders. In addition, to the
     extent that exempt-interest dividends are derived from interest on
     obligations of a state or its political subdivisions, or from interest on
     qualifying U.S. territorial obligations (including qualifying obligations
     of Puerto Rico, the U.S. Virgin Islands or Guam), they also may be exempt
     from that state's personal income taxes.

     CAPITAL GAIN DISTRIBUTIONS -- Each fund may derive capital gains and losses
     in connection with sales or other dispositions of its portfolio securities.
     Distributions from net short-term capital gains will be taxable to
     shareholders as ordinary income. Distributions from net long-term capital
     gains will be taxable to shareholders as long-term capital gain, regardless
     of the length of time the shares of a fund have been held by the shareholder.

     A portion of the gain on municipal bonds purchased at market discount after
     April 30, 1993 is taxable to shareholders as ordinary income, not as
     capital gains.


SHAREHOLDER TAXATION -- Distributions by each fund result in a reduction in the
net asset value of each fund's shares. Investors should consider the tax
implications of buying shares just prior to a


                       Tax-Exempt Income Funds -- Page 61
<PAGE>


distribution. The price of shares purchased at that time includes the amount of
the forthcoming distribution. Those purchasing just prior to a distribution will
subsequently receive a partial return of their investment capital upon payment
of the distribution, which will be taxable to them.


Redemptions and exchanges of fund shares are taxable transactions for federal
and state income tax purposes. If a shareholder redeems fund shares, or
exchanges shares for shares of a different fund, the IRS will require the
shareholder to report any gain or loss on the redemption or exchange. The gain
or loss realized will be capital gain or loss and will be long-term or
short-term, depending on how long the shareholder held the shares.


Any loss incurred on the redemption or exchange of shares held for six months or
less will be disallowed to the extent of any exempt-interest dividends
distributed to a shareholder with respect to fund shares and any remaining loss
will be treated as a long-term capital loss to the extent of any long-term
capital gains distributed to the shareholder by each fund on those shares.


If a shareholder exchanges or otherwise disposes of shares of a fund within 90
days of having acquired such shares, and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge for
shares of the fund, or of a different fund, the sales charge previously incurred
in acquiring the fund's shares will not be taken into account (to the extent
such previous sales charges do not exceed the reduction in sales charges) for
the purposes of determining the amount of gain or loss on the exchange, but will
be treated as having been incurred in the acquisition of such other fund(s).


Any loss realized on a redemption or exchange of shares of the fund will be
disallowed to the extent substantially identical shares are reacquired within
the 61-day period beginning 30 days before and ending 30 days after the shares
are disposed of. Any loss disallowed under this rule will be added to the
shareholder's tax basis in the new shares purchased.


Interest on certain private activity bonds, while exempt from regular federal
income tax, is a preference item for taxpayers when determining their
alternative minimum tax under the Code and under the income tax provisions of
several states. Private activity bond interest could subject a shareholder to or
increase liability under federal and state alternative minimum taxes, depending
on a shareholder's individual or corporate tax position. Persons who are defined
in the Code as substantial users (or persons related to such users) of
facilities financed by private activity bonds should consult with their tax
advisors before buying fund shares.


Each fund is not intended to constitute a balanced investment program and is not
designed for investors seeking capital appreciation or maximum tax-exempt income
without fluctuation of principal. Shares of each fund generally would not be
suitable for tax-exempt institutions or tax-deferred retirement plans (e.g.,
plans qualified under Section 401 of the Code, and individual retirement
accounts). Such retirement plans would not gain any benefit from the tax-exempt
nature of each fund's dividends because such dividends would be ultimately
taxable to beneficiaries when distributed to them.


Exempt-interest dividends paid by each fund will be reported to both the IRS and
shareholders of each fund. Individual shareholders are required to report to the
federal government all exempt-interest dividends and all other tax-exempt
interest received. In addition, each fund is required to report all
distributions of investment company taxable income and capital gains as well as
gross proceeds from the redemption or exchange of fund shares, except in the
case of certain exempt shareholders.


                       Tax-Exempt Income Funds -- Page 62
<PAGE>


Under the backup withholding provisions of Section 3406 of the Code,
distributions of investment company taxable income and capital gains and
proceeds from the redemption or exchange of a regulated investment company may
be subject to backup withholding of federal income tax in the case of non-exempt
U.S. shareholders who fail to furnish the fund with their taxpayer
identification numbers and with required certifications regarding their status
under the federal income tax law. In addition, back-up withholding may apply
beginning in 2007 to exempt-interest dividends paid to non-exempt shareholders
for whom a certified taxpayer identification number has not been received.
Withholding may also be required if the fund is notified by the IRS or a broker
that the taxpayer identification number furnished by the shareholder is
incorrect or that the shareholder has previously failed to report interest or
dividend income. If the withholding provisions are applicable, any such
distributions and proceeds, whether taken in cash or reinvested in additional
shares, will be reduced by the amounts required to be withheld.


The foregoing discussion of U.S. federal income tax law relates solely to the
application of that law to U.S. persons, i.e., U.S. citizens and residents and
U.S. corporations, partnerships, trusts and estates. Each shareholder who is not
a U.S. person should consider the U.S. and foreign tax consequences of ownership
of shares of each fund, including the possibility that such a shareholder may be
subject to a U.S. withholding tax at a rate of 30% (or a lower rate under an
applicable income tax treaty) on taxable dividends, excluding long-term capital
gain distributions, received by him or her.


Shareholders should consult their tax advisers about the application of federal,
state and local tax law in light of their particular situation.


                       Tax-Exempt Income Funds -- Page 63
<PAGE>


                        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 FINANCIAL ADVISER -- Deliver or mail a check to your
     financial adviser.

     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 transaction confirmation and mailing the form, along
     with a check made payable to the fund, using the envelope provided with
     your confirmation.

     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 either of the following addresses:

           American Funds
           8332 Woodfield Crossing Blvd.
           Indianapolis, IN 46240-2482

           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 statement of additional
     information for more information regarding this service.

     BY INTERNET -- Using americanfunds.com. Please see the "Shareholder account
     services and privileges" section of this statement of additional
     information for more information regarding this service.

     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)


                       Tax-Exempt Income Funds -- Page 64
<PAGE>


           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.

OTHER PURCHASE INFORMATION -- The Principal Underwriter will not knowingly sell
shares of the funds directly or indirectly to any person or entity, where, after
the sale, such person or entity would own beneficially directly or indirectly
more than 4.5% of the outstanding shares of a fund without the consent of a
majority of the fund's board.


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:


     .    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 this statement of additional information. However, in the case
where the entity maintaining these accounts aggregates the accounts'


                       Tax-Exempt Income Funds -- Page 65
<PAGE>


purchase orders for fund shares, such accounts are not required to meet the
funds' 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 American Funds Money
Market Fund may be made to Class C shares of other American Funds for dollar
cost averaging purposes. Exchanges are not permitted from Class A shares of
American Funds Money Market Fund to Class C shares of Intermediate Bond Fund of
America, Limited Term Tax-Exempt Bond Fund of America or Short-Term Bond Fund of
America. 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 Fund are subject to applicable sales
charges, unless the American Funds 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" in this statement of additional
information. 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" in this
statement of additional information).


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.


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

     If you wish to "move" your investment between share classes (within the
     same fund or between different funds), we generally will process your
     request as an exchange of the shares you currently hold for shares in the
     new class or fund. Below is more information


                       Tax-Exempt Income Funds -- Page 66
<PAGE>



     about how sales charges are handled for various scenarios. Class B and C
     shares are not currently offered by STEX.

     EXCHANGING CLASS B SHARES FOR CLASS A SHARES -- If you exchange Class B
     shares for Class A shares during the contingent deferred sales charge
     period you are responsible for paying any applicable deferred sales charges
     attributable to those Class B shares, but you will not be required to pay a
     Class A sales charge. If, however, you exchange your Class B shares for
     Class A shares after the contingent deferred sales charge period, you are
     responsible for paying any applicable Class A sales charges.

     EXCHANGING CLASS C SHARES FOR CLASS A SHARES -- If you exchange Class C
     shares for Class A shares, you are still responsible for paying any Class C
     contingent deferred sales charges and applicable Class A sales charges.

     EXCHANGING CLASS C SHARES FOR CLASS F SHARES -- If you are part of a
     qualified fee-based program and you wish to exchange your Class C shares
     for Class F shares to be held in the program, you are still responsible for
     paying any applicable Class C contingent deferred sales charges.

     EXCHANGING CLASS F SHARES FOR CLASS A SHARES -- You can exchange Class F
     shares held in a qualified fee-based program for Class A shares without
     paying an initial Class A sales charge if all of the following requirements
     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 of your request. If you have
     already redeemed your Class F shares, the foregoing requirements apply and
     you must purchase Class A shares within 90 days after redeeming your Class
     F shares to receive the Class A shares without paying an initial Class A
     sales charge.

     EXCHANGING CLASS A SHARES FOR CLASS F SHARES -- If you are part of a
     qualified fee-based program and you wish to exchange your Class A shares
     for Class F shares to be held in 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.

     EXCHANGING CLASS F-1 SHARES FOR CLASS F-2 SHARES -- If you are part of a
     qualified fee-based program that offers Class F-2 shares, you may exchange
     your Class F-1 shares for Class F-2 shares to be held in the program.

     MOVING BETWEEN OTHER SHARE CLASSES -- If you desire to move your investment
     between share classes and the particular scenario is not described in this
     statement of additional information, please contact American Funds Service
     Company at 800/421-0180 for more information.

     NON-REPORTABLE TRANSACTIONS -- Automatic conversions described in the
     prospectus 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,
     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.


                       Tax-Exempt Income Funds -- Page 67
<PAGE>


                                 SALES CHARGES

CLASS A PURCHASES


     PURCHASES BY CERTAIN 403(B) PLANS

     Tax-exempt funds in general should not serve as retirement plan
     investments.

     A 403(b) plan may not invest in Class A or C shares unless such plan was
     invested in Class A, or C shares before January 1, 2009.

     Participant accounts of a 403(b) plan that were treated as an
     individual-type plan for sales charge purposes before January 1, 2009, may
     continue to be treated as accounts of an individual-type plan for sales
     charge purposes. Participant accounts of a 403(b) plan that were treated as
     an employer-sponsored plan for sales charge purposes before January 1,
     2009, may continue to be treated as accounts of an employer-sponsored plan
     for sales charge purposes. Participant accounts of a 403(b) plan that is
     established on or after January 1, 2009 are treated as accounts of an
     employer-sponsored plan for sales charge purposes.

     PURCHASES BY SEP PLANS AND SIMPLE IRA PLANS

     Participant accounts in a Simplified Employee Pension (SEP) plan or a
     Savings Incentive Match Plan for Employees of Small Employers IRA (SIMPLE
     IRA) plan will be aggregated together for Class A sales charge purposes if
     the SEP plan or SIMPLE IRA plan was established after November 15, 2004 by
     an employer adopting a prototype plan produced by American Funds
     Distributors, Inc. In the case where the employer adopts any other plan
     (including, but not limited to, an IRS model agreement), each participant's
     account in the plan will be aggregated with the participant's own personal
     investments that qualify under the aggregation policy. A SEP plan or SIMPLE
     IRA plan with a certain method of aggregating participant accounts as of
     November 15, 2004 may continue with that method so long as the employer has
     not modified the plan document since that date.

     OTHER PURCHASES

     Pursuant to a determination of eligibility by a vice president or more
     senior officer of the Capital Research and Management Company Fund
     Administration Unit, or by his or her designee, Class A shares of the
     American Funds stock, stock/bond and bond funds may be sold at net asset
     value to:

     (1)  current or retired directors, trustees, officers and advisory board
          members of, and certain lawyers who provide services to, the funds
          managed by Capital Research and Management Company, current or retired
          employees of Washington Management Corporation, current or retired
          employees and partners of The Capital Group Companies, Inc. and its
          affiliated companies, certain family members of the above persons, and
          trusts or plans primarily for such persons;

     (2)  currently registered representatives and assistants directly employed
          by such representatives, retired registered representatives with
          respect to accounts established while active, or full-time employees
          (collectively, "Eligible Persons") (and their (a) spouses or
          equivalents if recognized under local law, (b) parents


                       Tax-Exempt Income Funds -- Page 68
<PAGE>


          and children, including parents and children in step and adoptive
          relationships, sons-in-law and daughters-in-law, and (c)
          parents-in-law, if the Eligible Persons or the spouses, children or
          parents of the Eligible Persons are listed in the account registration
          with the parents-in-law) of dealers who have sales agreements with the
          Principal Underwriter (or who clear transactions through such
          dealers), plans for the dealers, and plans that include as
          participants only the Eligible Persons, their spouses, parents and/or
          children;

     (3)  currently registered investment advisers ("RIAs") and assistants
          directly employed by such RIAs, retired RIAs with respect to accounts
          established while active, or full-time employees (collectively,
          "Eligible Persons") (and their (a) spouses or equivalents if
          recognized under local law, (b) parents and children, including
          parents and children in step and adoptive relationships, sons-in-law
          and daughters-in-law and (c) parents-in-law, if the Eligible Persons
          or the spouses, children or parents of the Eligible Persons are listed
          in the account registration with the parents-in-law) of RIA firms that
          are authorized to sell shares of the funds, plans for the RIA firms,
          and plans that include as participants only the Eligible Persons,
          their spouses, parents and/or children;

     (4)  companies exchanging securities with the fund through a merger,
          acquisition or exchange offer;

     (5)   insurance company separate accounts;

     (6)   accounts managed by subsidiaries of The Capital Group Companies, Inc.;

     (7)  The Capital Group Companies, Inc., its affiliated companies and
          Washington Management Corporation;

     (8)  an individual or entity with a substantial business relationship with
          The Capital Group Companies, Inc. or its affiliates, or an individual
          or entity related or relating to such individual or entity;

     (9)  wholesalers and full-time employees directly supporting wholesalers
          involved in the distribution of insurance company separate accounts
          whose underlying investments are managed by any affiliate of The
          Capital Group Companies, Inc.; and

     (10) full-time employees of banks that have sales agreements with the
          Principal Underwriter, who are solely dedicated to directly supporting
          the sale of mutual funds.

     Shares are offered at net asset value to these persons and organizations
     due to anticipated economies in sales effort and expense. Once an account
     is established under this net asset value privilege, additional investments
     can be made at net asset value for the life of the account.

MOVING BETWEEN ACCOUNTS -- Investments in certain account types may be moved to
other account types without incurring additional Class A sales charges. These
transactions include, for example:


     .    redemption proceeds from a non-retirement account (for example, a
          joint tenant account) used to purchase fund shares in an IRA or other
          individual-type retirement account;


                       Tax-Exempt Income Funds -- Page 69
<PAGE>


     .    required minimum distributions from an IRA or other individual-type
          retirement account used to purchase fund shares in a non-retirement
          account; and

     .    death distributions paid to a beneficiary's account that are used by
          the beneficiary to purchase fund shares in a different account.

LOAN REPAYMENTS -- Repayments on loans taken from a retirement plan or an
individual-type retirement account are not subject to sales charges if American
Funds Service Company is notified of the repayment.


DEALER COMMISSIONS AND COMPENSATION -- Commissions (up to 1.00%) are paid to
dealers who initiate and are responsible for certain Class A share purchases not
subject to initial sales charges. These purchases consist of purchases of $1
million or more, purchases by employer-sponsored defined contribution-type
retirement plans investing $1 million or more or with 100 or more eligible
employees, and purchases made at net asset value by certain retirement plans,
endowments and foundations with assets of $50 million or more. Commissions on
such investments (other than IRA rollover assets that roll over at no sales
charge under the funds' IRA rollover policy as described in the prospectus) are
paid to dealers at the following rates: 1.00% on amounts of less than $4
million, 0.50% on amounts of at least $4 million but less than $10 million and
0.25% on amounts of at least $10 million. Commissions are based on cumulative
investments over the life of the account with no adjustment for redemptions,
transfers, or market declines. For example, if a shareholder has accumulated
investments in excess of $4 million (but less than $10 million) and subsequently
redeems all or a portion of the account(s), purchases following the redemption
will generate a dealer commission of 0.50%.


A dealer concession of up to 1% may be paid by each fund under its Class A plan
of distribution to reimburse the Principal Underwriter in connection with dealer
and wholesaler compensation paid by it with respect to investments made with no
initial sales charge.


                       Tax-Exempt Income Funds -- Page 70
<PAGE>


                      SALES CHARGE REDUCTIONS AND WAIVERS

REDUCING YOUR CLASS A SALES CHARGE -- As described in the prospectus, there are
various ways to reduce your sales charge when purchasing Class A shares.
Additional information about Class A sales charge reductions is provided below.


     STATEMENT OF INTENTION -- By establishing a statement of intention (the
     "Statement"), you enter into a nonbinding commitment to purchase shares of
     the American Funds (excluding American Funds Money Market Fund) over a
     13-month period and receive the same sales charge (expressed as a
     percentage of your purchases) as if all shares had been purchased at once,
     unless the Statement is upgraded as described below.

     The Statement period starts on the date on which your first purchase made
     toward satisfying the Statement is processed. The market value of your
     existing holdings eligible to be aggregated (see below) as of the day
     immediately before the start of the Statement period may be credited toward
     satisfying the Statement.

     You may revise the commitment you have made in your Statement upward at any
     time during the Statement period. If your prior commitment has not been met
     by the time of the revision, the Statement period during which purchases
     must be made will remain unchanged. Purchases made from the date of the
     revision will receive the reduced sales charge, if any, resulting from the
     revised Statement. If your prior commitment has been met by the time of the
     revision, your original Statement will be considered met and a new
     Statement will be established.

     The Statement will be considered completed if the shareholder dies within
     the 13-month Statement period. Commissions to dealers will not be adjusted
     or paid on the difference between the Statement amount and the amount
     actually invested before the shareholder's death.

     When a shareholder elects to use a Statement, shares equal to 5% of the
     dollar amount specified in the Statement may be held in escrow in the
     shareholder's account out of the initial purchase (or subsequent purchases,
     if necessary) by the Transfer Agent. All dividends and any capital gain
     distributions on shares held in escrow will be credited to the
     shareholder's account in shares (or paid in cash, if requested). If the
     intended investment is not completed within the specified Statement period,
     the purchaser may be required to remit to the Principal Underwriter the
     difference between the sales charge actually paid and the sales charge
     which would have been paid if the total of such purchases had been made at
     a single time. Any dealers assigned to the shareholder's account at the
     time a purchase was made during the Statement period will receive a
     corresponding commission adjustment if appropriate. If the difference is
     not paid by the close of the Statement period, the appropriate number of
     shares held in escrow will be redeemed to pay such difference. If the
     proceeds from this redemption are inadequate, the purchaser may be liable
     to the Principal Underwriter for the balance still outstanding.

     Certain payroll deduction retirement plans purchasing Class A shares under
     a Statement on or before November 12, 2006, may continue to purchase Class
     A shares at the sales charge determined by that particular Statement until
     the plans' values reach the amounts specified in their Statements. Upon
     reaching such amounts, the Statements for these plans will be deemed
     completed and will terminate. In addition, effective May 1, 2009, the


                       Tax-Exempt Income Funds -- Page 71
<PAGE>


     Statements for these plans will expire if they have not been met by the
     next anniversary of the establishment of such Statement. After such
     termination, these plans are eligible for additional sales charge
     reductions by meeting the criteria under the fund's rights of accumulation
     policy.

     In addition, if you currently have individual holdings in American Legacy
     variable annuity contracts or variable life insurance policies that were
     established on or before March 31, 2007, you may continue to apply
     purchases under such contracts and policies to a Statement.

     Shareholders purchasing shares at a reduced sales charge under a Statement
     indicate their acceptance of these terms and those in the prospectus with
     their first purchase.

     AGGREGATION -- Qualifying investments for aggregation include those made by
     you and your "immediate family" as defined in the prospectus, if all
     parties are purchasing shares for their own accounts and/or:

     .    individual-type employee benefit plans, such as an IRA,
          single-participant Keogh-type plan, or a participant account of a
          403(b) plan that is treated as an individual-type plan for sales
          charge purposes (see "Purchases by certain 403(b) plans" under "Sales
          charges" in this statement of additional information);

     .    SEP plans and SIMPLE IRA plans established after November 15, 2004 by
          an employer adopting any plan document other than a prototype plan
          produced by American Funds Distributors, Inc.;

     .    business accounts solely controlled by you or your immediate family
          (for example, you own the entire business);

     .    trust accounts established by you or your immediate family (for trusts
          with only one primary beneficiary, upon the trustor's death the trust
          account may be aggregated with such beneficiary's own accounts; for
          trusts with multiple primary beneficiaries, upon the trustor's death
          the trustees of the trust may instruct American Funds Service Company
          to establish separate trust accounts for each primary beneficiary;
          each primary beneficiary's separate trust account may then be
          aggregated with such beneficiary's own accounts);

     .    endowments or foundations established and controlled by you or your
          immediate family; or

     .    CollegeAmerica/(R)/ accounts invested in American Funds other than the
          funds, which will be aggregated at the account owner level. (Class
          529-E accounts may only be aggregated with an eligible employer plan.
          For more information about CollegeAmerica and Class 529 shares, please
          see the prospectus of American Funds that offer Class 529 shares.)

     Individual purchases by a trustee(s) or other fiduciary(ies) may also be
     aggregated if the investments are:

     .    for a single trust estate or fiduciary account, including employee
          benefit plans other than the individual-type employee benefit plans
          described above;


                       Tax-Exempt Income Funds -- Page 72
<PAGE>


     .    made for two or more employee benefit plans of a single employer or of
          affiliated employers as defined in the 1940 Act, excluding the
          individual-type employee benefit plans described above;

     .    for a diversified common trust fund or other diversified pooled
          account not specifically formed for the purpose of accumulating fund
          shares;

     .    for nonprofit, charitable or educational organizations, or any
          endowments or foundations established and controlled by such
          organizations, or any employer-sponsored retirement plans established
          for the benefit of the employees of such organizations, their
          endowments, or their foundations;

     .    for participant accounts of a 403(b) plan that is treated as an
          employer-sponsored plan for sales charge purposes (see "Purchases by
          certain 403(b) plans" under "Sales charges" in this statement of
          additional information), or made for participant accounts of two or
          more such plans, in each case of a single employer or affiliated
          employers as defined in the 1940 Act; or

     .    for a SEP or SIMPLE IRA plan established after November 15, 2004 by an
          employer adopting a prototype plan produced by American Funds
          Distributors, Inc.

     Purchases made for nominee or street name accounts (securities held in the
     name of an investment dealer or another nominee such as a bank trust
     department instead of the customer) may not be aggregated with those made
     for other accounts and may not be aggregated with other nominee or street
     name accounts unless otherwise qualified as described above.

     CONCURRENT PURCHASES -- As described in the prospectus, you may reduce your
     Class A sales charge by combining purchases of all classes of shares in the
     American Funds, as well as holdings in Endowments and applicable holdings
     in the American Funds Target Date Retirement Series. Shares of money market
     funds purchased through an exchange, reinvestment or cross-reinvestment
     from a fund having a sales charge also qualify. However, direct purchases
     of American Funds Money Market Fund are excluded. If you currently have
     individual holdings in American Legacy variable annuity contracts or
     variable life insurance policies that were established on or before March
     31, 2007, you may continue to combine purchases made under such contracts
     and policies to reduce your Class A sales charge.

     RIGHTS OF ACCUMULATION -- Subject to the limitations described in the
     aggregation policy, you may take into account your accumulated holdings in
     all share classes of the American Funds, as well as your holdings in
     Endowments and applicable holdings in the American Funds Target Date
     Retirement Series, to determine your sales charge on investments in
     accounts eligible to be aggregated. Direct purchases of American Funds
     Money Market Fund are excluded. Subject to your investment dealer's or
     recordkeeper's capabilities, your accumulated holdings will be calculated
     as the higher of (a) the current value of your existing holdings (the
     "market value") as of the day prior to your American Funds investment or
     (b) the amount you invested (including reinvested dividends and capital
     gains, but excluding capital appreciation) less any withdrawals (the "cost
     value"). Depending on the entity on whose books your account is held, the
     value of your holdings in that account may not be eligible for calculation
     at cost value. For example, accounts


                       Tax-Exempt Income Funds -- Page 73
<PAGE>



     held in nominee or street name may not be eligible for calculation at cost
     value and instead may be calculated at market value for purposes of rights
     of accumulation.

     The value of all of your holdings in accounts established in calendar year
     2005 or earlier will be assigned an initial cost value equal to the market
     value of those holdings as of the last business day of 2005. Thereafter,
     the cost value of such accounts will increase or decrease according to
     actual investments or withdrawals. You must contact your financial adviser
     or American Funds Service Company if you have additional information that
     is relevant to the calculation of the value of your holdings.

     When determining your American Funds Class A sales charge, if your
     investment is not in an employer-sponsored retirement plan, you may also
     continue to take into account the market value (as of the day prior to your
     American Funds investment) of your individual holdings in various American
     Legacy variable annuity contracts and variable life insurance policies that
     were established on or before March 31, 2007. An employer-sponsored
     retirement plan may also continue to take into account the market value of
     its investments in American Legacy Retirement Investment Plans that were
     established on or before March 31, 2007.

     You may not purchase Class B shares of The Tax-Exempt Bond Fund of America,
     American High-Income Municipal Bond Fund and The Tax-Exempt Fund of
     California if your combined American Funds and applicable American Legacy
     holdings cause you to be eligible to purchase Class A shares at the
     $100,000 or higher sales charge discount rate. In addition, you may not
     purchase Class C shares of The Tax-Exempt Bond Fund of America, American
     High-Income Municipal Bond Fund and The Tax-Exempt Fund of California if
     such combined holdings cause you to be eligible to purchase Class A shares
     at the $1 million or more sales charge discount rate (i.e. at net asset
     value).

     If you make a gift of American Funds Class A shares, upon your request, you
     may purchase the shares at the sales charge discount allowed under rights
     of accumulation of all of your American Funds and applicable American
     Legacy accounts.

     RIGHT OF REINVESTMENT -- As described in the prospectus, certain
     transactions may be eligible for investment without a sales charge pursuant
     to the funds' right of reinvestment policy. Recent legislation suspended
     required minimum distributions from individual retirement accounts and
     employer-sponsored retirement plan accounts for the 2009 tax year. Given
     this suspension, proceeds from an automatic withdrawal plan to satisfy a
     required minimum distribution may be invested without a sales charge for
     the 2009 tax year, or any subsequent period, to the extent such legislation
     is extended. This policy is subject to any restrictions regarding the
     investment of proceeds from a required minimum distribution that may be
     established by the transfer agent.

CDSC WAIVERS FOR CLASS A, B AND C SHARES -- As noted in the prospectus, a
contingent deferred sales charge ("CDSC") may be waived for redemptions due to
death or post-purchase 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.


                       Tax-Exempt Income Funds -- Page 74
<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 an automatic withdrawal plan ("AWP") (see
          "Automatic withdrawals" under "Shareholder account services and
          privileges" in this statement of additional information). For each AWP
          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 AWP 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 an AWP will also count
          toward the 12% limit. In the case of an AWP, the 12% limit is
          calculated at the time an automatic redemption is first made, and is
          recalculated at the time each additional automatic redemption is made.
          Shareholders who establish an AWP 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 Fund 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.


                       Tax-Exempt Income Funds -- Page 75
<PAGE>


                                 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 Financial
Industry Regulatory Authority, 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 American Funds
Money Market Fund be wired to your bank by writing American Funds Service
Company. A signature guarantee is required on all requests to wire funds.


                       Tax-Exempt Income Funds -- Page 76
<PAGE>


                  SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

The following services and privileges are generally available to all
shareholders. However, certain services and privileges described in the
prospectus and this statement of additional information may not be available if
your account is held with an investment dealer.


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 you would like to invest 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.


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 may be automatically converted to having all dividends and other
distributions reinvested in additional shares.


CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -- You may cross-reinvest
dividends and capital gains (distributions) into other American Funds in the
same class at net asset value, subject to the following conditions:


(a)  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);

(b)  if the value of the account of the fund receiving distributions is below
the minimum initial investment requirement, distributions must be automatically
reinvested; and

(c)  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.


                       Tax-Exempt Income Funds -- Page 77
<PAGE>


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 -- Depending on the type of account, for all share classes
except R shares, you may automatically withdraw shares from any of the American
Funds. You can make automatic withdrawals of $50 or more. 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. You should consult with your adviser or intermediary to determine if
your account is eligible for automatic withdrawals.


Withdrawal payments are not to be considered as dividends, yield or income.
Generally, 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.


Redemption proceeds from an automatic withdrawal plan are not eligible for
reinvestment without a sales charge.


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 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 non-retirement 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,


                       Tax-Exempt Income Funds -- Page 78
<PAGE>


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 liabilities (including attorney
fees) which 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 establish check writing privileges for Class A shares
(but not Class 529-A shares) for American Funds Money Market Fund upon meeting
the fund's initial purchase minimum of $1,000. This can be done by using an
account application. 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 account
application.


REDEMPTION OF SHARES -- The funds' articles of incorporation or declarations of
trust permit the funds to direct the Transfer Agent to redeem the shares of any
shareholder for their then current net asset value per 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 each fund's current registration statement under the 1940 Act, and
subject to such further terms and conditions as the board of directors/trustees
of the funds may from time to time adopt.


While payment of redemptions normally will be in cash, the articles of
incorporation for AHIM and TEBF and the declarations of trust for LTEX, TEFCA
and STEX permit payment of the redemption price wholly or partly with portfolio
securities or other fund assets under conditions and circumstances determined by
the funds' board of directors/trustees. For example, redemptions could be made
in this manner if the board determined that making payments wholly in cash over
a particular period would be unfair and/or harmful to other fund shareholders.


SHARE CERTIFICATES -- Shares are credited to your account and certificates are
not issued unless  you request them by contacting the Transfer Agent. STEX does
not issue share certificates.


                       Tax-Exempt Income Funds -- Page 79
<PAGE>


                              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'
portfolios, are held by JPMorgan Chase Bank, 270 Park Avenue, New York, NY
10017-2070, as Custodian. If a fund holds securities of issuers outside the
U.S., the Custodian may hold these securities pursuant to subcustodial
arrangements in banks outside the U.S. or branches of U.S. banks outside the
U.S.


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 6455 Irvine Center Drive, Irvine, CA 92618. American Funds Service
Company was paid a fee by TEBF, AHIM, LTEX, TEFCA and STEX of $1,580,000,
$714,000, $301,000, $262,000 and $185,000, respectively, for Class A shares, and
$29,000, $21,000, $6,000 and $4,000, for TEBF, AHIM, LTEX and TEFCA,
respectively, for Class B shares for the 2009 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 and from the relevant share class, 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 funds as disclosed in the prospectus.


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -- PricewaterhouseCoopers LLP, 350
South Grand Avenue, Los Angeles, CA 90071, serves as the independent registered
public accounting firm for TEBF, AHIM, LTEX and STEX. Deloitte & Touche LLP, 695
Town Center Drive, Costa Mesa, CA 92626, serves as the independent registered
public accounting firm for TEFCA. Each firm provides 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 reports have been so included in reliance
on the reports of PricewaterhouseCoopers LLP and Deloitte & Touche LLP,
independent registered public accounting firms, given on the authority of said
firms 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 directors/trustees.


INDEPENDENT LEGAL COUNSEL -- Bingham McCutchen LLP, 355 South Grand Avenue,
Suite 4400, Los Angeles, CA 90071, serves as independent legal counsel
("counsel") for the funds and for independent directors/trustees in their
capacities as such. A determination with respect to the independence of the
funds' counsel will be made at least annually by the independent directors/
trustees of the funds, as prescribed by the 1940 Act and related rules.


PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS -- TEBF's and TEFCA's
fiscal year ends on August 31. AHIM's, LTEX's and STEX's fiscal year ends on
July 31. Shareholders are provided updated prospectuses annually and at least
semi-annually with reports showing the


                       Tax-Exempt Income Funds -- Page 80
<PAGE>


funds' investment portfolio or summary investment portfolio, financial
statements and other information. TEBF's, AHIM's, LTEX's and STEX's annual
financial statements are audited by the funds' independent registered public
accounting firm, PricewaterhouseCoopers LLP and TEFCA's annual financial
statements are audited by the fund's independent registered public accounting
firm, Deloitte & Touche 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.


Shareholders may also elect to receive updated summary prospectuses, annual
reports and semi-annual reports electronically by signing up for electronic
delivery on our website, americanfunds.com. Upon electing the electronic
delivery of updated summary prospectuses and other reports, a shareholder will
no longer automatically receive such documents in paper form by mail. A
shareholder who elects electronic delivery is able to cancel this service at any
time and return to receiving updated summary prospectuses and other reports in
paper form by mail.


Summary prospectuses, prospectuses, annual reports and semi-annual reports that
are mailed to shareholders by the American Funds organization are printed with
ink containing soy and/or vegetable oil on paper containing recycled fibers.


CODES OF ETHICS -- The funds and Capital Research and Management Company and its
affiliated companies, including each 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 (now the Financial Industry
Regulatory Authority, or FINRA) 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, a
FINRA Hearing Panel ruled against the Principal Underwriter and imposed a $5
million fine. On April 30, 2008, FINRA's National Adjudicatory Council affirmed
the decision by FINRA's Hearing Panel. The Principal Underwriter has appealed
this decision to the Securities and Exchange Commission.


The investment adviser and Principal Underwriter believe that the likelihood
that this matter could have a material adverse effect on the funds or on the
ability of the investment adviser or Principal Underwriter to perform their
contracts with the funds is remote. In addition, class action lawsuits have been
filed in the U.S. District Court, Central District of California, relating to
this and other matters. The investment adviser believes that these suits are
without merit and will defend itself vigorously.


                       Tax-Exempt Income Funds -- Page 81
<PAGE>


THE TAX-EXEMPT BOND FUND OF AMERICA

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- AUGUST 31, 2009





Net asset value and redemption price per share
  (Net assets divided by shares outstanding). .                     $11.82
Maximum offering price per share
  (100/96.25 of net asset value per share,
  which takes into account the fund's current maximum
  sales charge). . . . . . . . . . . . . . . .                      $12.28




AMERICAN HIGH-INCOME MUNICIPAL BOND FUND


DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- JULY 31, 2009





Net asset value and redemption price per share
  (Net assets divided by shares outstanding). .                     $12.69
Maximum offering price per share
  (100/96.25 of net asset value per share,
  which takes into account the fund's current maximum
  sales charge). . . . . . . . . . . . . . . .                      $13.18




LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- JULY 31, 2009





Net asset value and redemption price per share
  (Net assets divided by shares outstanding). .                     $15.11
Maximum offering price per share
  (100/97.50 of net asset value per share,
  which takes into account the fund's current maximum
  sales charge). . . . . . . . . . . . . . . .                      $15.50




THE TAX-EXEMPT FUND OF CALIFORNIA

DETERMINATION OF NET ASSET VALUE, REDEMPTION PRICE AND MAXIMUM OFFERING PRICE
PER SHARE FOR CLASS A SHARES -- AUGUST 31, 2009





Net asset value and redemption price per share
  (Net assets divided by shares outstanding). .                     $15.31
Maximum offering price per share
  (100/96.25 of net asset value per share,
  which takes into account the fund's current maximum
  sales charge). . . . . . . . . . . . . . . .                      $15.91





                       Tax-Exempt Income Funds -- Page 82
<PAGE>


OTHER INFORMATION -- The funds reserve the right to modify the privileges
described in this statement of additional information at any time.


The financial statements, including the investment portfolio and the reports of
independent registered public accounting firms contained in the annual reports,
are included in this statement of additional information. The following
information is not included in the annual report:


                       Tax-Exempt Income Funds -- Page 83
<PAGE>


FUND NUMBERS -- Here are the fund numbers for use with our automated phone line,
American FundsLine/(R)/, or when making share transactions:




                                         FUND NUMBERS
                        ------------------------------------------------------------
FUND                    CLASS A  CLASS B  CLASS C  CLASS F-1  CLASS F-2   CLASS R-5
------------------------------------------------------------------------------------

STOCK AND STOCK/BOND
FUNDS
AMCAP Fund/(R)/ . . .     02       202      302       402        602        2502
American Balanced
Fund/(R)/ . . . . . .     11       211      311       411        611        2511
American Mutual
Fund/(R)/ . . . . . .     03       203      303       403        603        2503
Capital Income
Builder/(R)/  . . . .     12       212      312       412        612        2512
Capital World Growth
and Income Fund/SM/ .     33       233      333       433        633        2533
EuroPacific Growth
Fund/(R)/ . . . . . .     16       216      316       416        616        2516
Fundamental
Investors/SM/ . . . .     10       210      310       410        610        2510
The Growth Fund of
America/SM/ . . . . .     05       205      305       405        605        2505
The Income Fund of
America/(R)/. . . . .     06       206      306       406        606        2506
International Growth
and Income Fund/SM/ .     34       234      334       434        634        2534
The Investment Company
of America/(R)/ . . .     04       204      304       404        604        2504
The New Economy
Fund/(R)/ . . . . . .     14       214      314       414        614        2514
New Perspective
Fund/(R)/ . . . . . .     07       207      307       407        607        2507
New World Fund/(R)/ .     36       236      336       436        636        2536
SMALLCAP World
Fund/(R)/ . . . . . .     35       235      335       435        635        2535
Washington Mutual
Investors Fund/SM/  .     01       201      301       401        601        2501
BOND FUNDS
American Funds
Short-Term Tax-Exempt
Bond Fund/SM/ . . . .     39       N/A      N/A       439        639         N/A
American High-Income
Municipal Bond
Fund/(R)/ . . . . . .     40       240      340       440        640         N/A
American High-Income
Trust/SM/ . . . . . .     21       221      321       421        621        2521
The Bond Fund of
America/SM/ . . . . .     08       208      308       408        608        2508
Capital World Bond
Fund/(R)/ . . . . . .     31       231      331       431        631        2531
Intermediate Bond Fund
of America/(R)/ . . .     23       223      323       423        623        2523
Limited Term
Tax-Exempt Bond Fund
of America/SM/  . . .     43       243      343       443        643         N/A
Short-Term Bond Fund
of America/SM/. . . .     48       248      348       448        648        2548
The Tax-Exempt Bond
Fund of America/(R)/      19       219      319       419        619         N/A
The Tax-Exempt Fund of
California/(R)/*. . .     20       220      320       420        620         N/A
The Tax-Exempt Fund of
Maryland/(R)/*. . . .     24       224      324       424        624         N/A
The Tax-Exempt Fund of
Virginia/(R)/*. . . .     25       225      325       425        625         N/A
U.S. Government
Securities Fund/SM/ .     22       222      322       422        622        2522
MONEY MARKET FUNDS
American Funds Money
Market Fund/SM/ . . .     59       259      359       459        659        2559
___________
*Qualified for sale only in certain
jurisdictions.





                       Tax-Exempt Income Funds -- Page 84
<PAGE>


                                    APPENDIX

The following descriptions of debt security ratings are based on information
provided by Moody's Investors Service and Standard & Poor's Corporation.


                          DESCRIPTION OF BOND RATINGS

MOODY'S
MUNICIPAL LONG-TERM RATING DEFINITIONS

Aaa
Issuers or issues rated Aaa demonstrate the strongest creditworthiness relative
to other US municipal or tax-exempt issuers or issues.


A
Issuers or issues rated A present above-average creditworthiness relative to
other US municipal or tax-exempt issuers or issues.


Baa
Issuers or issues rated Baa represent average creditworthiness relative to other
US municipal or tax-exempt issuers or issues.


Ba
Issuers or issues rated Ba demonstrate below-average creditworthiness relative
to other US municipal or tax-exempt issuers or issues.


B
Issuers or issues rated B demonstrate weak creditworthiness relative to other US
municipal or tax-exempt issuers or issues.


Caa
Issuers or issues rated Caa demonstrate very weak creditworthiness relative to
other US municipal or tax-exempt issuers or issues.


Ca
Issuers or issues rated Ca demonstrate extremely weak creditworthiness relative
to other US municipal or tax-exempt issuers or issues.


C
Issuers or issues rated C demonstrate the weakest creditworthiness relative to
other US municipal or tax-exempt issuers or issues.


NOTE: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating
category from Aa through Caa. The modifier 1 indicates that the issuer or
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.


                       Tax-Exempt Income Funds -- Page 85
<PAGE>


STANDARD & POOR'S
LONG-TERM ISSUE CREDIT RATINGS

AAA
An obligation rated AAA has the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.


AA
An obligation rated AA differs from the highest-rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.


A
An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.


BBB
An obligation rated BBB 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.


BB, B, CCC, CC, AND C
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.


BB
An obligation rated BB is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.


B
An obligation rated B is more vulnerable to nonpayment than obligations rated
BB, but the obligor currently has the capacity to meet its financial commitment
on the obligation. Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its financial
commitment on the obligation.


CCC
An obligation rated CCC is currently vulnerable to nonpayment and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.


CC
An obligation rated CC is currently highly vulnerable to nonpayment.


                       Tax-Exempt Income Funds -- Page 86
<PAGE>


C
A C rating is assigned to obligations that are currently highly vulnerable to
nonpayment, obligations that have payment arrearages allowed by the terms of the
documents, or obligations of an issuer that is the subject of a bankruptcy
petition or similar action which have not experienced a payment default. Among
others, the C rating may be assigned to subordinated debt, preferred stock or
other obligations on which cash payments have been suspended in accordance with
the instrument's terms.


D
An obligation rated D is in payment default. The D rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless Standard & Poor's believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.


PLUS (+) OR MINUS (-)
The ratings from AA to CCC may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories.


                          DESCRIPTION OF NOTE RATINGS

MOODY'S
MUNICIPAL SHORT-TERM DEBT RATINGS

MIG 1
This designation denotes superior credit quality. Excellent protection is
afforded by established cash flows, highly reliable liquidity support, or
demonstrated broad-based access to the market for refinancing.


MIG 2
This designation denotes strong credit quality. Margins of protection are ample,
although not as large as in the preceding group.


MIG 3
This designation denotes acceptable credit quality. Liquidity and cash-flow
protection may be narrow, and market access for refinancing is likely to be less
well-established.


SG
This designation denotes speculative-grade credit quality. Debt instruments in
this category may lack sufficient margins of protection.


STANDARD & POOR'S
SHORT-TERM ISSUE CREDIT RATINGS

SP-1
Strong capacity to pay principal and interest. An issue determined to possess a
very strong capacity to pay debt service is given a plus (+) designation.


                       Tax-Exempt Income Funds -- Page 87
<PAGE>


SP-2
Satisfactory capacity to pay principal and interest, with some vulnerability to
adverse financial and economic changes over the term of the notes.


SP-3
Speculative capacity to pay principal and interest.


                    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.


                       Tax-Exempt Income Funds -- Page 88

...

[logo – American Funds®]

American High-Income Municipal Bond Fund®

Investment portfolio

July 31, 2009

Bonds & notes — 90.67%	Principal amount (000)		Value (000)
ALABAMA — 0.22%
21st Century Auth., Tobacco Settlement Asset-backed Rev. Bonds, Series 2001, 5.25% 2009	$	2,215	$	2,224
Industrial Dev. Board of the City of Phenix City, Environmental Improvement Rev. Ref. Bonds
(MeadWestvaco-Mead Coated Board Project), Series 2002-A, AMT, 6.35% 2035		3,000		2,351
				4,575
ALASKA — 0.86%
Housing Fin. Corp., Collateralized Bonds (Veterans Mortgage Program), First Series 2006,
Subseries A-2, AMT, 4.60% 2022		9,090		8,794
Housing Fin. Corp., Home Mortgage Rev. Bonds, Series 2006-C, AMT, National insured, 5.50% 2037		840		845
Industrial Dev. and Export Auth., Revolving Fund Ref. Bonds, Series 2002-A, AMT, National insured, 5.50% 2010		1,775		1,810
Northern Tobacco Securitization Corp., Tobacco Settlement Asset-backed Bonds, Series 2000, 6.20% 2022 (preref. 2010)		610		632
Northern Tobacco Securitization Corp., Tobacco Settlement Asset-backed Bonds, Series 2001, 5.375% 2021 (preref. 2011)		4,195		4,427
Student Loan Corp., Education Loan Rev. Bonds, Series 2005-A, AMT, 5.00% 2014		1,500		1,542
				18,050
ARIZONA — 3.77%
Pollution Control Corp. of the County of Cochise, Solid Waste Disposal Rev. Bonds
(Arizona Electric Power Cooperative, Inc. Project), Series 1994-A, AMT, 4.40% 2024		2,000		2,000
Estrella Mountain Ranch Community Facs. Dist. (City of Goodyear), Special Assessment Rev. Bonds
(Montecito Assessment Dist.), Series 2007, 5.70% 2027		468		300
Estrella Mountain Ranch Community Facs. Dist. (City of Goodyear), Special Assessment Rev. Bonds
(Montecito Assessment Dist.), Series 2007, 5.80% 2032		999		601
Health Facs. Auth., Health Care Facs. Rev. Bonds (Beatitudes Campus Project), Series 2006, 4.75% 2010		500		494
Health Facs. Auth., Health Care Facs. Rev. Bonds (Beatitudes Campus Project), Series 2006, 5.10% 2022		10,500		7,768
Health Facs. Auth., Health Care Facs. Rev. Bonds (Beatitudes Campus Project), Series 2006, 5.20% 2037		7,000		4,387
Health Facs. Auth., Hospital Rev. Bonds (Phoenix Children’s Hospital), Series 2007-A, 1.41% 2042 (put 2015)1		6,000		5,181
Health Facs. Auth., Hospital Rev. Bonds (Phoenix Children’s Hospital), Series 2007-B, 1.26% 2042 (put 2015)1		5,000		4,330
Health Facs. Auth., Rev. Bonds (Banner Health), Series 2007-B, 1.21% 20371		5,000		2,777
City of Phoenix Civic Improvement Corp., Airport Rev. Bonds, Series 2008-B, AMT, 5.25% 2018		3,080		3,126
City of Phoenix Civic Improvement Corp., Airport Rev. Bonds, Series 2008-B, AMT, 5.25% 2019		2,000		2,017
City of Phoenix Civic Improvement Corp., Airport Rev. Ref. Bonds, Series 2008-D, AMT, 5.00% 2020		2,000		1,970
Industrial Dev. Auth. of the City of Phoenix and the County of Pima, Single-family Mortgage Rev. Bonds,
Series 2006-3A, AMT, 5.25% 2038		6,913		7,034
Industrial Dev. Auth. of the County of Pima, Water and Wastewater Rev. Bonds (Global Water Resources, LLC Project),
Series 2007, AMT, 6.55% 2037		14,500		10,575
Industrial Dev. Auth. of the County of Pima, Water and Wastewater Rev. Bonds (Global Water Resources, LLC Project),
Series 2008, AMT, 7.50% 2038		10,000		8,213
Industrial Dev. Authorities of the County of Pima and the City of Tucson, Joint Single-family Mortgage Rev. Bonds,
Series 2007-A-1, AMT, 5.10% 2038		2,705		2,691
Quail Creek Community Facs. Dist. (Sahuarita), G.O. Bonds, Series 2006, 5.55% 2030		4,520		2,822
Salt River Project Agricultural Improvement and Power Dist., Salt River Project Electric System Rev. Bonds,
Series 2009-A, 5.00% 2039		5,000		4,992
School Facs. Board, Certs. of Part., Series 2008, 5.25% 2023		1,000		1,046
School Facs. Board, State School Trust Rev. Ref. Bonds, Series 2007, AMBAC insured, 5.00% 2017		2,500		2,569
University Medical Center Corp. (Tucson), Hospital Rev. Bonds, Series 2009, 6.50% 2039		1,000		1,010
Vistancia Community Facs. Dist. (Peoria), G.O. Bonds, Series 2006, 4.55% 2026		1,000		802
Westpark Community Facs. Dist., Dist. G.O. Bonds (Town of Buckeye), Series 2006, 5.25% 2031		725		423
Industrial Dev. Auth. of the County of Yavapai, Solid Waste Disposal Rev. Bonds (Waste Management, Inc. Project),
Series 2003-A-1, AMT, 4.90% 2028		2,200		1,879
				79,007
CALIFORNIA — 8.12%
Antelope Valley Healthcare Dist., Rev. Bonds, Series 2002-A, 5.25% 2017		3,500		3,082
City of Azusa, Community Facs. Dist. No. 2005-1 (Rosedale), Improvement Area No. 1, Special Tax Bonds,
Series 2007, 5.00% 2020		1,010		761
Assn. of Bay Area Governments, Fin. Auth. for Nonprofit Corps., Rev. Bonds (San Diego Hospital Assn.),
Series 2001-A, 6.125% 2020		3,500		3,512
Assn. of Bay Area Governments, Fin. Auth. for Nonprofit Corps., Rev. Bonds (San Diego Hospital Assn.),
Series 2003-C, 5.375% 2021		1,500		1,379
Assn. of Bay Area Governments, Fin. Auth. for Nonprofit Corps., Rev. Ref. Certs. of Part.
(American Baptist Homes of the West Facs. Project), Series 1998-A, 6.10% 2017		1,540		1,493
Assn. of Bay Area Governments, Fin. Auth. for Nonprofit Corps., Rev. Ref. Certs. of Part. (Episcopal Homes Foundation),
Series 1998, 5.125% 2013		3,500		3,516
Assn. of Bay Area Governments, Fin. Auth. for Nonprofit Corps., Rev. Ref. Certs. of Part. (Episcopal Homes Foundation),
Series 1998, 5.125% 2018		1,000		969
Assn. of Bay Area Governments, Fin. Auth. for Nonprofit Corps., Southern California Presbyterian Homes Obligated Group,
Rev. Bonds (Redwood Senior Homes and Services), Series 2002, 6.125% 2032		1,000		847
California County Tobacco Securitization Agcy., Tobacco Settlement Asset-backed Bonds
(Alameda County Tobacco Asset Securitization Corp.), Series 2002, 4.75% 2019		365		344
Cathedral City Public Fncg. Auth., Tax Allocation Rev. Bonds (Cathedral City 2006 Merged Redev. Project Area),
Series 2007-C, 5.00% 2025		1,165		950
City of Chula Vista, Industrial Dev. Rev. Bonds (San Diego Gas & Electric Co.), Series 1992-B, AMT, 5.00% 2027		1,250		1,087
City of Chula Vista, Industrial Dev. Rev. Bonds (San Diego Gas & Electric Co.),
Series 1992-D, AMT, AMBAC insured, 5.00% 2027		2,000		1,739
City of Chula Vista, Industrial Dev. Rev. Bonds (San Diego Gas & Electric Co.), Series 1997-A, AMT, 4.90% 2023		1,000		901
City of Chula Vista, Industrial Dev. Rev. Ref. Bonds (San Diego Gas & Electric Co.), Series 2004-C, 5.875% 2034		1,100		1,120
Community Facs. Dist. No. 2002-1, City of Corona (Dos Lagos), Special Tax Bonds, Series 2005-A, 4.90% 2025		1,250		902
Del Mar Race Track Auth., Rev. Bonds, Series 2005, 5.00% 2015		995		970
Econ. Recovery Bonds, Series 2008-B, 5.00% 2023 (put 2010)1		3,000		3,084
County of El Dorado, Community Facs. Dist. No. 1992-1 (El Dorado Hills Dev.), Special Tax Bonds,
Series 1999, 6.125% 2016		990		938
City of Folsom, Community Facs. Dist. No. 10, Special Tax Bonds, Series 1999, 7.00% 2024 (preref. 2009)		770		789
City of Fontana, Community Facs. Dist. No. 12 (Sierra Lakes), Special Tax Bonds,
Series 1999, 6.50% 2015 (preref. 2009)		1,000		1,014
City of Fontana, Community Facs. Dist. No. 12 (Sierra Lakes), Special Tax Bonds,
Series 1999, 6.625% 2030 (preref. 2009)		1,000		1,015
Various Purpose G.O. Bonds 6.00% 2038		4,000		4,154
Various Purpose G.O. Bonds 6.50% 2033		5,000		5,421
Golden State Tobacco Securitization Corp., Tobacco Settlement Asset-backed Bonds,
Series 2003-A-1, 6.25% 2033 (preref. 2013)		1,425		1,591
Golden State Tobacco Securitization Corp., Tobacco Settlement Asset-backed Bonds, Series 2007-A-1, 5.00% 2033		3,000		1,899
Health Facs. Fncg. Auth., Rev. Bonds (Catholic Healthcare West), Series 2004-H, 4.45% 2026 (preref. 2011)		165		177
Health Facs. Fncg. Auth., Rev. Bonds (Catholic Healthcare West), Series 2004-H, 4.45% 2026 (put 2011)		835		846
Health Facs. Fncg. Auth., Rev. Bonds (Catholic Healthcare West), Series 2008-I, 5.125% 2022		1,500		1,482
Health Facs. Fncg. Auth., Rev. Bonds (Catholic Healthcare West), Series 2008-K, 5.125% 2022		2,000		1,965
Statewide Communities Dev. Auth., Rev. Bonds (Catholic Healthcare West), Series 2008-B, 5.50% 2030		1,000		928
Statewide Communities Dev. Auth., Rev. Bonds (Catholic Healthcare West), Series 2008-D, 5.50% 2031		2,000		1,842
City of Irvine, Assessment Dist. No. 87-8, Limited Obligation Improvement Bonds, Group Seven, 5.00% 2020		370		342
Lee Lake Water Dist., Community Facs. Dist. No. 1 (Sycamore Creek), Special Tax Bonds, Series 2003, 6.00% 2033		1,000		760
City of Loma Linda, Hospital Rev. Bonds (Loma Linda University Medical Center), Series 2005-A, 5.00% 2017		3,000		2,579
City of Los Angeles Harbor Dept., Rev. Ref. Bonds, Series 2006-A, AMT, National insured, 5.00% 2018		4,990		5,196
City of Los Angeles, Multi-family Housing Rev. Bonds (GNMA Collateralized — Ridgecroft Apartments Project),
Series 1997-E, AMT, 6.00% 2017		440		440
Dept. of Airports of the City of Los Angeles, Ontario International Airport Rev. Ref. Bonds,
Series 2006-A, AMT, National insured, 5.00% 2023		2,430		2,338
Metropolitan Water Dist. of Southern California, Water Rev. Bonds, 2008 Authorization, Series A, 5.00% 2034		4,000		4,039
City of Moorpark, Community Facs. Dist. No 2004-1, Special Tax Bonds (Moorpark Highlands), Series 2006, 5.25% 2026		965		682
Morongo Band of Mission Indians, Enterprise Rev. Bonds, Series 2008-B, 5.50% 2018		2,690		2,330
Morongo Band of Mission Indians, Enterprise Rev. Bonds, Series 2008-B, 6.50% 2028		7,250		5,932
Municipal Fin. Auth., Certs. of Part. (Community Hospitals of Central California Obligated Group), 5.25% 2037		2,000		1,501
Municipal Fin. Auth., Education Rev. Bonds (American Heritage Education Foundation Project),
Series 2006-A, 5.25% 2036		2,100		1,534
Municipal Fin. Auth., Educational Fac. Rev. Bonds (High Tech High Projects, Chula Vista),
Series 2008-B, 6.125% 20482		1,000		683
Municipal Fin. Auth., Rev. Bonds (University Students’ Cooperative Assn.), Series 2007, 4.75% 2027		500		382
Municipal Fin. Auth., Rev. Ref. Bonds (Biola University), Series 2008-A, 5.80% 2028		500		486
Municipal Fin. Auth., Rev. Ref. Bonds (Biola University), Series 2008-A, 5.875% 2034		2,000		1,881
City of Palm Desert, Section 29 Assessment Dist. (No. 2004-02), Limited Obligation Improvement Bonds,
Series 2007, 5.05% 2027		2,000		1,301
City of Pasadena, Certs. of Part. (Conference Center Project, Capital Appreciation Certificates),
Series 2006-A, AMBAC insured, 0% 2020		4,815		2,972
City of Pasadena, Certs. of Part. (Conference Center Project, Capital Appreciation Certificates),
Series 2006-A, AMBAC insured, 0% 2021		4,145		2,388
Pollution Control Fncg. Auth., Pollution Control Rev. Ref. Bonds (Pacific Gas and Electric Co.),
Series 2004-A, AMT, FGIC insured, 4.75% 2023		5,575		4,863
Pollution Control Fncg. Auth., Pollution Control Rev. Ref. Bonds (Pacific Gas and Electric Co.),
Series 2004-C, AMT, FGIC insured, 4.75% 2023		1,030		898
Pollution Control Fncg. Auth., Pollution Control Rev. Ref. Bonds (Pacific Gas and Electric Co.),
Series 2004-D, AMT, FGIC insured, 4.75% 2023		5,050		4,405
Pollution Control Fncg. Auth., Rev. Ref. Bonds (Pacific Gas and Electric Co.),
Series 1996-A, AMT, National insured, 5.35% 2016		3,000		3,026
Pollution Control Fncg. Auth., Solid Waste Disposal Rev. Bonds (Browning-Ferris Industries of California, Inc. Project),
BFI Corp. Guarantee, Series 1996-A, AMT, 5.80% 2016		1,000		985
Pollution Control Fncg. Auth., Solid Waste Disposal Rev. Bonds (Waste Management, Inc. Project),
Series 2003-A, AMT, 5.00% 2038 (put 2013)		1,000		1,000
Pollution Control Fncg. Auth., Solid Waste Disposal Rev. Ref. Bonds (Waste Management, Inc. Project),
Series 2002-A, AMT, 5.00% 2022		3,000		2,720
Quechan Indian Tribe, Fort Yuma, Governmental Project Bonds, 6.625% 20172		3,000		2,365
Quechan Indian Tribe, Fort Yuma, Governmental Project Bonds, 7.00% 20272		6,000		4,222
Regional Airports Improvement Corp., Facs. Lease Rev. Ref. Bonds (LAXFUEL Corp., Los Angeles International Airport),
Issue of 2005, AMT, FSA insured, 5.00% 2017		1,120		1,135
Community Facs. Dist. No. 15 (Mission Ranch) of Riverside Unified School Dist.,
Special Tax Bonds (Improvement Area No. 2), Series 2005-A, 5.25% 2035		1,200		860
County of Riverside Community Facs. Dist. No. 04-2 (Lake Hills Crest), Special Tax Bonds, Series 2005, 5.00% 2025		1,000		660
County of Sacramento, Laguna Creek Ranch/Elliott Ranch Community Facs. Dist. No. 1,
Improvement Area No. 2 Special Tax Ref. Bonds (Elliott Ranch), 6.30% 2021		500		500
Sacramento County Water Fncg. Auth., Rev. Bonds (Sacramento County Water Agcy. Zones 40 and 41
2007 Water System Project), Series 2007-B, FGIC-National insured, 0.997% 20341		5,000		3,025
San Bernardino Joint Powers Fncg. Auth., 2002 Tax Allocation Rev. Ref. Bonds, 6.625% 2026		1,000		919
Public Facs. Fncg. Auth. of the City of San Diego, Sewer Rev. Ref. Bonds, Series 2009-B, 5.00% 2022		1,000		1,051
Public Facs. Fncg. Auth. of the City of San Diego, Water Rev. Bonds, Ref. Series 2009-A, 5.00% 2026		1,000		1,015
San Diego Unified School Dist., 2005 G.O. Ref. Bonds (Election of 1998), Series D-2, FSA insured, 4.75% 2026		1,500		1,485
City and County of San Francisco, Certs. of Part. (Multiple Capital Improvement Projects), Series 2009-A, 5.00% 2025		2,500		2,497
San Francisco Airport Auth., Ref. Bonds, Series A, AMT, 6.50% 2019 (put 2010)		1,000		1,035
San Francisco Airport Auth., Ref. Bonds, Series A-3, AMT, 6.75% 2019 (put 2011)		1,000		1,049
San Mateo County Community College Dist. (County of San Mateo), Election of 2005 G.O. Bonds
(Capital Appreciation Bonds), Series 2006-B, National insured, 0% 2035		5,000		957
Community Facs. Dist. No. 99-1 (Talega), Santa Margarita Water Dist., Special Tax Bonds,
Series 1999, 6.10% 2014 (preref. 2009)		325		333
Santa Rosa Rancheria Tachi Yokut Tribe, Enterprise Rev. Bonds (Federally Tax Exempt), Series 2006, 4.50% 20112		400		386
Santa Rosa Rancheria Tachi Yokut Tribe, Enterprise Rev. Bonds (Federally Tax Exempt), Series 2006, 4.875% 20162		3,500		2,973
Santa Rosa Rancheria Tachi Yokut Tribe, Enterprise Rev. Bonds (Federally Tax Exempt), Series 2006, 5.00% 20202		3,200		2,319
Community Facs. Dist. No. 2002-1, Saugus Union School Dist., Special Tax Bonds, Series 2003, 6.00% 2033		1,000		815
Statewide Communities Dev. Auth., Rev. Bonds (Childrens Hospital Los Angeles), Series 2007, 5.00% 2047		4,000		2,613
Statewide Communities Dev. Auth., Rev. Bonds (Daughters of Charity Health System), Series 2005-A, 5.25% 2024		1,440		1,215
Statewide Communities Dev. Auth., Rev. Bonds (Daughters of Charity Health System), Series 2005-H, 5.25% 2025		1,195		999
Statewide Communities Dev. Auth., Rev. Bonds (Inland Regional Center Project), Series 2007, 5.375% 2037		1,000		748
Statewide Communities Dev. Auth., Rev. Bonds (Kaiser Permanente), Series A, 5.00% 2016		2,250		2,471
Statewide Communities Dev. Auth., Rev. Bonds (Kaiser Permanente), Series A, 5.00% 2019		6,950		7,245
Statewide Communities Dev. Auth., Rev. Bonds (Lancer Educational Student Housing Project), Series 2007-A, 5.40% 2017		2,000		1,701
Statewide Communities Dev. Auth., Student Housing Rev. Bonds
(CHF-Irvine, L.L.C.-UCI East Campus Apartments, Phase II), Series 2008, 5.00% 2017		1,000		981
Statewide Communities Dev. Auth., Student Housing Rev. Bonds
(CHF-Irvine, LLC-UCI East Campus Apartments, Phase II), Series 2008, 6.00% 2040		2,250		2,003
Statewide Communities Dev. Auth., Student Housing Rev. Ref. Bonds
(CHF-Irvine, LLC-UCI East Campus Apartments, Phase II), Series 2006, 5.00% 2019		2,830		2,697
Statewide Communities Dev. Auth., Student Housing Rev. Ref. Bonds
(CHF-Irvine, LLC-UCI East Campus Apartments, Phase II), Series 2006, 5.00% 2029		1,000		830
Stockton Public Fncg. Auth., Rev. Bonds (Redev. Projects), Series 2006-A, RADIAN insured, 5.00% 2020		2,640		2,330
City of Temecula, Public Fncg. Auth., Community Facs. Dist. No. 03-03 (Wolf Creek), Special Tax Bonds,
Series 2003, 5.90% 2034		1,500		1,131
Tobacco Securitization Auth., Tobacco Settlement Asset-backed Bonds
(San Diego County Tobacco Asset Securitization Corp.), Series 2001-A, 5.25% 2027 (preref. 2012)		910		1,016
Tuolumne Wind Project Auth., Rev. Bonds (Turlock Irrigation Dist.), Series A, 5.00% 2022		2,000		2,000
Tuolumne Wind Project Auth., Rev. Bonds (Turlock Irrigation Dist.), Series A, 5.625% 2029		3,100		3,126
Dept. of Water Resources, Power Supply Rev. Bonds, Series 2005-F-3, 5.00% 2022		1,000		1,051
				170,138
COLORADO — 4.23%
Arapahoe County, Capital Improvement Trust Fund Highway Rev. Bonds (E-470 Project), Capital Appreciation Bonds,
Series 2000-B, 0% 2034 (preref. 2010)		7,500		1,220
Baptist Road Rural Transportation Auth. (Town of Monument and Unincorporated El Paso County),
Sales and Use Tax Rev. Bonds, Series 2007, 4.80% 2017		1,500		1,128
Baptist Road Rural Transportation Auth. (Town of Monument and Unincorporated El Paso County),
Sales and Use Tax Rev. Bonds, Series 2007, 4.95% 2022		4,110		2,650
Baptist Road Rural Transportation Auth. (Town of Monument and Unincorporated El Paso County),
Sales and Use Tax Rev. Bonds, Series 2007, 5.00% 2026		2,500		1,465
City of Black Hawk, Device Tax Rev. Ref. Bonds, Series 2006-A, 5.00% 2013		595		576
City of Black Hawk, Device Tax Rev. Ref. Bonds, Series 2006-A, 5.00% 2018		600		523
Compark Business Campus Metropolitan Dist., Douglas County, G.O. Ref. and Improvement Bonds,
Series 2007-A, RADIAN insured, 5.60% 2034		3,610		3,059
Cross Creek Metropolitan Dist. No. 2 (City of Aurora), Limited Tax G.O. Ref. Bonds, Series 2006, 6.125% 2037		2,000		1,265
City and County of Denver, Airport System Rev. Bonds, Series 2008-A1-4, Subseries 2008-A1, AMT, 5.00% 2017		2,000		1,975
City and County of Denver, Airport System Rev. Bonds, Series 2008-A1-4, Subseries 2008-A1, AMT, 5.50% 2016		2,210		2,286
City and County of Denver, Airport System Rev. Ref. Bonds, Series 2002-E, AMT, FGIC-National insured, 5.00% 2012		500		524
City and County of Denver, Dept. of Aviation, Special Facs. Airport Rev. Ref. Bonds (United Air Lines Project),
Series 2007-A, AMT, 5.25% 2032		17,000		8,723
City and County of Denver, Dept. of Aviation, Special Facs. Airport Rev. Ref. Bonds (United Air Lines Project),
Series 2007-A, AMT, 5.75% 2032		1,000		551
Denver Health and Hospital Auth., Healthcare Rev. Bonds, Series 2007-B, 1.547% 20331		4,930		2,638
Educational and Cultural Facs. Auth., Charter School Rev. Bonds (Brighton Charter School Project),
Series 2006, 6.00% 2036		1,700		1,077
Educational and Cultural Facs. Auth., Student Housing Rev. Ref. Bonds (Campus Village Apartments Project),
Series 2008, 5.375% 2028		1,000		965
Educational and Cultural Facs. Auth., Student Housing Rev. Ref. Bonds (Campus Village Apartments Project),
Series 2008, 5.50% 2038		1,000		903
Health Facs. Auth., Health Facs. Rev. Bonds (Evangelical Lutheran Good Samaritan Society Project),
Series 2000, 6.60% 2016		385		400
Health Facs. Auth., Health Facs. Rev. Bonds (Evangelical Lutheran Good Samaritan Society Project),
Series 2002, 5.90% 2027		1,830		1,830
Health Facs. Auth., Health Facs. Rev. Bonds (Evangelical Lutheran Good Samaritan Society Project),
Series 2006, 5.25% 2024		3,880		3,669
Health Facs. Auth., Health Facs. Rev. Bonds (Evangelical Lutheran Good Samaritan Society Project),
Series 2009-A, 6.125% 2038		1,000		1,002
Health Facs. Auth., Health Facs. Rev. Bonds (Evangelical Lutheran Good Samaritan Society Project),
Series 2009-B, 5.00% 2039 (put 2014)		1,900		1,919
Health Facs. Auth., Health Facs. Rev. Bonds (Evangelical Lutheran Good Samaritan Society Project),
Series 2000, 6.60% 2016 (preref. 2010)		615		676
Health Facs. Auth., Rev. Bonds (Christian Living Communities Project), Series 2006-A, 5.75% 2026		2,100		1,748
Health Facs. Auth., Rev. Bonds (Christian Living Communities Project), Series 2006-A, 5.75% 2037		2,750		2,002
Health Facs. Auth., Rev. Bonds (Covenant Retirement Communities, Inc.), Series 2002-B, 6.125% 2033		1,000		860
Health Facs. Auth., Rev. Bonds (Covenant Retirement Communities, Inc.), Series 2005, 5.00% 2014		1,320		1,271
Health Facs. Auth., Rev. Bonds (Covenant Retirement Communities, Inc.), Series 2005, 5.00% 2015		1,150		1,095
Health Facs. Auth., Rev. Bonds (Covenant Retirement Communities, Inc.), Series 2005, 5.00% 2017		1,485		1,383
Health Facs. Auth., Rev. Bonds (Covenant Retirement Communities, Inc.), Series 2005, 5.00% 2018		2,095		1,927
Health Facs. Auth., Rev. Bonds (Covenant Retirement Communities, Inc.), Series 2005, 5.00% 2035		12,500		9,043
Housing and Fin. Auth., Single-family Program Bonds, Series 1997-B-2, AMT, 7.00% 2026		5		5
City of Lakewood, Plaza Metropolitan Dist. No. 1, Public Improvement Fee/Tax Increment Supported Rev. Bonds,
Series 2003, 8.00% 2025		7,500		6,571
City of Lakewood, Plaza Metropolitan Dist. No. 1, Public Improvement Fee/Tax Increment Supported Rev. Bonds,
Series 2005, 8.125% 2025		5,000		3,943
Lincoln Park Metropolitan Dist. (Douglas County), G.O. Limited Tax Ref. and Improvement Bonds,
Series 2001, 7.75% 2026 (preref. 2011)		2,750		3,150
North Range Metropolitan Dist. No. 1 (City of Commerce, Adams County), Limited Tax G.O. Bonds,
Series 2001, 7.25% 2031 (preref. 2011)		995		1,122
North Range Metropolitan Dist. No. 2 (Adams County), Limited Tax G.O. Bonds, Series 2007, 5.50% 2027		500		298
North Range Metropolitan Dist. No. 2 (Adams County), Limited Tax G.O. Bonds, Series 2007, 5.50% 2037		1,750		943
Prairie Center Metropolitan Dist. No. 3 (City of Brighton, Adams County),
Limited Property Tax Supported Primary Improvements Rev. Bonds, Series 2006-A, 5.40% 2031		2,750		1,800
Public Auth. for Colorado Energy, Natural Gas Purchase Rev. Bonds, Series 2008, 6.25% 2028		2,000		1,935
Rampart Range Metropolitan Dist. No. 1 (City of Lone Tree), Rev. Bonds (Rampart Range Metropolitan Dist. No. 2 Project),
Series 2001, 7.75% 2026 (preref. 2011)		2,875		3,266
Tallgrass Metropolitan Dist., Arapahoe County, G.O. (Limited Tax Convertible to Unlimited Tax)
Ref. and Improvement Bonds, Series 2007, 5.25% 2037		1,250		727
Tallyn’s Reach Metropolitan Dist. No. 3 (City of Aurora), Limited Tax G.O. Bonds (Convertible to Unlimited Tax),
Series 2007, 5.20% 2036		1,225		888
Traditions Metropolitan Dist. No. 2 (City of Aurora), G.O. (Limited Tax Convertible to Unlimited Tax) Bonds,
Series 2006, 5.75% 2036		1,190		752
Regents of the Univeristy of Colorado, University Enterprise Rev. Bonds, Series 2009-A, 5.375% 2038		1,250		1,287
Vista Ridge Metropolitan Dist. (Weld County), Limited Tax G.O. Ref. Bonds, Series 2006-B, 6.625% 2040		2,250		1,682
				88,722
CONNECTICUT — 0.98%
Dev. Auth., Pollution Control Rev. Ref. Bonds (Connecticut Light and Power Co. Project), Series 1993-A, 5.85% 2028		1,375		1,378
Dev. Auth., Pollution Control Rev. Ref. Bonds (Connecticut Light and Power Co. Project),
Series 1993-B, AMT, 5.95% 2028		1,500		1,456
Higher Education Supplemental Loan Auth., Rev. Bonds (Connecticut Family Education Loan Program),
Series 2005-A, AMT, National insured, 4.25% 2019		740		655
Mashantucket (Western) Pequot Tribe, Special Rev. Bonds, Series 1997-A, 5.50% 20362		1,500		727
Mashantucket (Western) Pequot Tribe, Special Rev. Bonds, Series 1997-B, 5.60% 20092		1,000		998
Mashantucket (Western) Pequot Tribe, Special Rev. Bonds, Series 1997-B, 5.75% 20182		3,000		2,049
Mohegan Tribe of Indians, Gaming Auth. Priority Distribution Payment, Public Improvement Bonds,
Series 2001, 5.375% 2011		525		487
Mohegan Tribe of Indians, Gaming Auth. Priority Distribution Payment, Public Improvement Bonds,
Series 2001, 6.00% 2016		6,100		4,967
Mohegan Tribe of Indians, Gaming Auth. Priority Distribution Payment, Public Improvement Bonds,
Series 2001, 6.25% 2021		3,000		2,260
Mohegan Tribe of Indians, Gaming Auth. Priority Distribution Payment, Public Improvement Bonds,
Series 2001, 6.25% 2031		2,000		1,352
Mohegan Tribe of Indians, Gaming Auth. Priority Distribution Payment, Public Improvement Bonds,
Series 2003, 5.25% 2033		5,000		2,980
Mohegan Tribe of Indians, Gaming Auth. Priority Distribution Payment, Public Improvement Bonds,
Series 2003, 5.50% 2013		1,380		1,172
				20,481
DELAWARE — 0.04%
Housing Auth., Single-family Mortgage Rev. Bonds, Series 2006-C, AMT, 6.25% 2037		805		840
DISTRICT OF COLUMBIA — 0.47%
Dist. of Columbia, Rev. Bonds (Brookings Institution Issue), Series 2009, 5.75% 2039		2,000		2,075
Water and Sewer Auth., Public Utility Rev. Bonds, Series 2009-A, 5.50% 2039		3,300		3,442
Water and Sewer Auth., Public Utility Rev. Bonds, Series 2009-A, 6.00% 2035		4,000		4,340
				9,857
FLORIDA — 13.03%
Alachua County Health Facs. Auth., Health Facs. Rev. Bonds (Shands HealthCare Project), Series 2008-D-2, 6.75% 2030		900		929
Alachua County, Industrial Dev. Rev. Bonds (North Florida Retirement Village, Inc. Project), Series 2007-A, 5.625% 2022		1,000		809
Alachua County, Industrial Dev. Rev. Bonds (North Florida Retirement Village, Inc. Project), Series 2007-A, 5.75% 2026		5,000		3,944
Alachua County, Industrial Dev. Rev. Bonds (North Florida Retirement Village, Inc. Project), Series 2007-A, 5.875% 2042		4,500		3,127
Arborwood Community Dev. Dist. (City of Fort Myers), Capital Improvement Rev. Bonds (Centex Homes Project),
Series 2006-B-2, 5.10% 2016		2,035		1,560
Bartram Park Community Dev. Dist. (Jacksonville), Special Assessment Bonds, Series 2005, 4.875% 2015		1,300		1,068
Bartram Park Community Dev. Dist. (Jacksonville), Special Assessment Bonds, Series 2005, 5.30% 2035		1,715		1,187
Beacon Lakes Community Dev. Dist. (Miami-Dade County), Special Assessment Completion Bonds,
Series 2007-A, 6.00% 2038		1,800		1,143
Beacon Lakes Community Dev. Dist. (Miami-Dade County), Special Assessment Completion Bonds,
Series 2007-B, 6.20% 2038		1,400		871
Beacon Tradeport Community Dev. Dist. (Miami-Dade County), Special Assessment Bonds (Industrial Project),
Series 2002-B, 7.00% 2014		560		546
Beacon Tradeport Community Dev. Dist. (Miami-Dade County), Special Assessment Bonds (Industrial Project),
Series 2002-B, 7.25% 2033		1,960		1,686
Belmont Community Dev. Dist. (Hillsborough County), Capital Improvement Rev. Bonds, Series 2006-B, 5.125% 20143		980		264
Boynton Village Community Dev. Dist. (City of Boynton Beach), Special Assessment Bonds, Series 2007-A-2, 6.00% 2038		1,485		975
Capital Projects Fin. Auth., Continuing Care Retirement Community Rev. Bonds
(Capital Projects Loan Program — Glenridge on Palmer Ranch Project), Series 2002-A, 8.00% 2032 (preref. 2012)		1,400		1,653
Championsgate Community Dev. Dist., Capital Improvement Rev. Bonds, Series 1998-A, 6.25% 2020		3,125		2,708
Citizens Property Insurance Corp., High-Risk Account Secured Bonds, Series 2009-A-1, 6.00% 2017		10,500		10,775
Citizens Property Insurance Corp., High-Risk Account Secured Ref. Bonds, Series 2007-A, National insured, 5.00% 2012		1,000		1,022
City Center Community Dev. Dist., Special Assessment Rev. Bonds (Polk County), Series 2005-A, 6.125% 2036		4,370		2,400
City Center Community Dev. Dist., Special Assessment Rev. Bonds (Polk County), Series 2007-A, 6.00% 2038		5,625		2,926
City of Clearwater, Water and Sewer Rev. Bonds, Series A, 5.25% 2039		2,000		1,965
Concorde Estates Community Dev. Dist. (Osceola County), Capital Improvement Rev. Bonds, Series 2004-B, 5.00% 2011		515		288
Connerton West Community Dev. Dist. (Pasco County), Capital Improvement Rev. Bonds, Series 2007-B, 5.125% 2016		2,290		1,090
Board of Education, Lottery Rev. Bonds, Series 2009-A, 5.00% 2021		3,000		3,130
Escambia County Housing Fin. Auth., Single-family Mortgage Rev. Bonds (Multi-County Program),
Series 2006-A, AMT, 4.80% 2038		6,675		6,493
Escambia County Housing Fin. Auth., Single-family Mortgage Rev. Bonds (Multi-County Program),
Series 2007-B, AMT, 4.70% 2039		2,930		2,781
Fishhawk Community Dev. Dist. II, Special Assessment Rev. Bonds, Series 2004-B, 5.125% 2009		315		285
Fishhawk Community Dev. Dist. II, Special Assessment Rev. Bonds, Series 2007-B, 5.00% 2012		1,735		1,069
Fleming Island Plantation Community Dev. Dist. (Clay County), Series 2000-B, 7.375% 2031 (preref. 2010)		985		1,047
The Crossings at Fleming Island Community Dev. Dist. (Clay County), Special Assessment Ref. Bonds,
Series 2000-C, 7.10% 2030		7,355		6,155
Gramercy Farms Community Dev. Dist. (St. Cloud), Special Assessment Bonds, Series 2007-B, 5.10% 2014		11,500		5,335
Grand Bay at Doral Community Dev. Dist. (Miami-Dade County), Special Assessment Bonds, Series 2007-B, 6.00% 2017		13,000		8,669
Greater Orlando Aviation Auth., Airport Facs. Rev. Ref. Bonds, Series 2008-A, AMT, FSA insured, 5.25% 2018		2,000		2,033
Greater Orlando Aviation Auth., Airport Facs. Rev. Ref. Bonds, Series 2009-A, AMT, 6.00% 2016		2,500		2,661
Greyhawk Landing Community Dev. Dist. (Manatee County), Special Assessment Rev. Bonds, Series 2002-A, 7.00% 2033		895		816
Greyhawk Landing Community Dev. Dist. (Manatee County), Special Assessment Rev. Bonds, Series 2002-B, 7.00% 2012		60		58
Harbor Bay Community Dev. Dist. (Hillsborough County), Capital Improvement Rev. Bonds, Series 2001-B, 6.35% 2010		1,145		880
Harbor Bay Community Dev. Dist. (Hillsborough County), Capital Improvement Rev. Bonds, Series 2002, 6.75% 2034		4,215		2,829
Heritage Harbour Market Place Community Dev. Dist. (Manatee County), Capital Improvement Rev. Bonds,
Series 2005, 5.60% 2036		1,240		751
Highlands County Health Facs. Auth., Hospital Rev. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2002-B, 5.00% 2011 (escrowed to maturity)		2,000		2,187
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2005-B, 5.00% 2016 (preref. 2015)		150		174
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2005-B, 5.00% 2018 (preref. 2015)		250		290
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2006-G, 5.125% 2018 (preref. 2016)		100		117
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2006-G, 5.125% 2023 (preref. 2016)		145		170
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2005-B, 5.00% 2016		1,050		1,094
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2005-B, 5.00% 2018		1,750		1,795
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2006-G, 5.125% 2018		2,900		3,026
Highlands County Health Facs. Auth., Hospital Rev. Ref. Bonds (Adventist Health System/Sunbelt Obligated Group),
Series 2006-G, 5.125% 2023		1,855		1,854
Hillsborough County Industrial Dev. Auth., Hospital Rev. Bonds (H. Lee Moffitt Cancer Center Project),
Series 2007-A, 5.25% 2027		2,000		1,864
City of Tampa, Capital Improvement Hospital Rev. Bonds (H. Lee Moffitt Cancer Center Project),
Series 1999-A, 5.75% 2029		1,000		920
Hillsborough County Industrial Dev. Auth., Hospital Rev. Ref. Bonds (Tampa General Hospital Project),
Series 2003-A, 5.00% 2012		1,000		1,019
Hillsborough County Industrial Dev. Auth., Hospital Rev. Ref. Bonds (Tampa General Hospital Project),
Series 2003-A, 5.00% 2013		1,500		1,524
Hillsborough County Industrial Dev. Auth., Hospital Rev. Ref. Bonds (Tampa General Hospital Project),
Series 2003-A, 5.00% 2018		3,795		3,670
Housing Fin. Corp., Homeowner Mortgage Rev. Bonds, Series 2009-1, 5.375% 2039		1,000		1,060
Hurricane Catastrophe Fund Fin. Corp., Rev. Bonds, Series 2006-A, 5.25% 2012		2,000		2,120
Jacksonville Aviation Auth., Rev. Bonds, Series 2006, AMT, AMBAC insured, 5.00% 2020		3,485		3,320
Jacksonville Econ. Dev. Commission, Health Care Facs. Rev. and Ref. Bonds (Proton Therapy Institute Project),
Series 2007-A, 6.00% 2017		2,515		2,265
Jacksonville Econ. Dev. Commission, Health Care Facs. Rev. and Ref. Bonds (Proton Therapy Institute Project),
Series 2007-A, 6.25% 20272		2,500		2,049
Jacksonville Health Facs. Auth., Hospital Rev. Bonds (Baptist Medical Center Project), Series 2007-A, 5.00% 2024		2,000		1,936
Lake Ashton Community Dev. Dist. (City of Lake Wales, Polk County), Capital Improvement Rev. Bonds,
Series 2001-A, 7.40% 2032		720		714
Lake Ashton Community Dev. Dist. (City of Lake Wales, Polk County), Capital Improvement Rev. Bonds,
Series 2001-B, 6.40% 2011		120		114
Lake Ashton Community Dev. Dist. (City of Lake Wales, Polk County), Capital Improvement Rev. Bonds,
Series 2005-A, 5.60% 2037		905		492
Lake Ashton Community Dev. Dist. (City of Lake Wales, Polk County), Capital Improvement Rev. Bonds,
Series 2005-B, 4.875% 2010		2,730		1,929
Lake Ashton II Community Dev. Dist. (Polk County), Capital Improvement Rev. Bonds, Series 2005-A, 4.875% 2010		900		769
Lake Ashton II Community Dev. Dist. (Polk County), Capital Improvement Rev. Bonds, Series 2005-A, 5.375% 2036		2,640		1,565
Lake Ashton II Community Dev. Dist. (Polk County), Capital Improvement Rev. Bonds, Series 2006-A, 5.30% 2038		1,970		936
Lake Ashton II Community Dev. Dist. (Polk County), Capital Improvement Rev. Bonds, Series 2006-B, 5.00% 2011		7,250		3,835
City of Lakeland, Hospital Rev. Ref. Bonds (Lakeland Regional Health Systems), Series 2006, 5.00% 2022		2,235		2,067
Lakewood Ranch Stewardship Dist., Special Assessment Rev. Bonds (Country Club East Project),
Series 2006, 5.40% 2037		975		578
Lakewood Ranch Stewardship Dist., Special Assessment Rev. Bonds (Lake Club Project), Series 2006, 5.50% 2036		3,155		1,889
Lakewood Ranch Stewardship Dist., Special Assessment Rev. Bonds (Lake Club Project), Series 2006-B, 5.00% 2013		3,135		2,022
Landmark at Doral Community Dev. Dist. (City of Doral), Special Assessment Bonds, Series 2006-A, 5.50% 2038		1,000		351
Landmark at Doral Community Dev. Dist. (City of Doral), Special Assessment Bonds, Series 2006-B, 5.20% 2015		3,000		1,071
Lee County Industrial Dev. Auth., Healthcare Facs. Rev. Bonds (Cypress Cove at Healthpark Florida, Inc. Project),
Series 1997-A, 6.25% 2017		2,315		2,064
Lee County Industrial Dev. Auth., Healthcare Facs. Rev. Bonds (Shell Point/Alliance Obligated Group,
Shell Point Village Project), Series 2006, 5.00% 2032		3,000		1,979
Lee County Industrial Dev. Auth., Healthcare Facs. Rev. Bonds (Shell Point/Alliance Obligated Group,
Shell Point Village Project), Series 2006, 5.125% 2036		2,250		1,400
Lee County Industrial Dev. Auth., Healthcare Facs. Rev. Ref. Bonds (Shell Point/Alliance Obligated Group,
Shell Point Village/Alliance Community Project), Series 2007, 5.00% 2016		2,000		1,725
Lee County Industrial Dev. Auth., Healthcare Facs. Rev. Ref. Bonds (Shell Point/Alliance Obligated Group,
Shell Point Village/Alliance Community Project), Series 2007, 5.00% 2022		3,000		2,262
Lee County Industrial Dev. Auth., Healthcare Facs. Rev. Ref. Bonds (Shell Point/Alliance Obligated Group,
Shell Point Village/Alliance Community Project), Series 2007, 5.00% 2029		12,425		8,575
Lee County, Solid Waste System Rev. Bonds, Series 2006-A, AMT, AMBAC insured, 5.00% 2016		4,535		4,454
Madeira Community Dev. Dist. (City of St. Augustine), Special Assessment Rev. Bonds, Series 2007-A, 5.45% 2039		4,000		1,960
Madeira Community Dev. Dist. (City of St. Augustine), Special Assessment Rev. Bonds, Series 2007-B, 5.25% 2014		2,750		1,385
Magnolia Creek Community Dev. Dist. (City of Freeport), Capital Improvement Rev. Bonds, Series 2007-B, 5.60% 2014		4,255		2,675
Dept. of Management Services, Certs. of Part., Series 2009-A, 5.00% 2018		2,200		2,305
Dept. of Management Services, Certs. of Part., Series 2009-A, 5.00% 2023		3,090		3,163
Dept. of Management Services, Certs. of Part., Series 2009-A, 5.00% 2024		1,255		1,281
Marion County Hospital Dist., Health System Ref. and Improvement Rev. Bonds (Munroe Regional Health System),
Series 2007, 5.00% 2022		1,100		971
Marshall Creek Community Dev. Dist. (St. Johns County), Special Assessment Bonds, Series 2000-A, 7.65% 2032		2,800		2,765
Marshall Creek Community Dev. Dist. (St. Johns County), Special Assessment Bonds, Series 2002, 6.625% 2032		4,580		3,317
Meadow Pointe III, Community Dev. Dist. (Pasco County), Capital Improvement Rev. Bonds, Series 2004-1, 4.80% 2009		600		572
Meadow Pointe IV, Community Dev. Dist. (Pasco County), Capital Improvement Rev. Bonds, Series 2004-A, 6.00% 2036		1,950		1,031
Miami-Dade County Industrial Dev. Auth., Solid Waste Disposal Rev. Bonds (Waste Management, Inc. Project),
Series 2004, AMT, 4.00% 2018 (put 2009)		1,000		1,000
Miami-Dade County, Miami International Airport (Hub of the Americas), Aviation Rev. Ref. Bonds,
Series 2003-E, AMT, National insured, 5.375% 2017		1,000		1,009
Miami-Dade County, Miami International Airport (Hub of the Americas), Aviation Rev. Ref. Bonds,
Series 2005-B, AMT, XLCA insured, 5.00% 2018		4,000		3,877
Miami-Dade County, Miami International Airport (Hub of the Americas), Aviation Rev. Bonds, Series 2009-A, 5.50% 2036		2,000		1,972
Miami-Dade County, Miami International Airport (Hub of the Americas), Aviation Rev. Bonds, Series 2009-A, 5.75% 2022		3,000		3,157
Miami-Dade County Educational Facs. Auth., Rev. Ref. Bonds (University of Miami Issue),
Series 2007-B, AMBAC insured, 5.25% 2024		1,000		1,043
Midtown Miami Community Dev. Dist. (Miami-Dade County), Special Assessment Bonds (Infrastructure Project),
Series 2004-B, 6.50% 2037		1,950		1,370
Municipal Power Agcy., All-Requirements Power Supply Project Rev. Bonds, Series 2009-A, 5.50% 2024		3,000		3,157
Naturewalk Community Dev. Dist. (Walton County), Capital Improvement Rev. Bonds, Series 2007-A, 5.50% 2038		985		489
Naturewalk Community Dev. Dist. (Walton County), Capital Improvement Rev. Bonds, Series 2007-B, 5.30% 2016		1,970		1,012
New Port Tampa Bay Community Dev. Dist., Special Assessment Bonds (City of Tampa), Series 2006-A, 5.875% 2038		1,480		517
North Springs Improvement Dist. (Broward County), Special Assessment Bonds (Heron Bay Project),
Series 1997, 7.00% 2019		1,990		1,990
North Springs Improvement Dist. (Broward County), Special Assessment Bonds
(Parkland Golf and Country Club Assessment Area), Series 2005-A-1, 5.45% 2026		2,765		1,683
Northern Palm Beach County Improvement Dist., Water Control and Improvement Bonds (Unit of Dev. No. 9B),
Series 1999, 5.85% 2013 (preref. 2009)		475		480
City of Orlando, Special Assessment Rev. Bonds (Conroy Road Interchange Project), Series 1998-A, 5.80% 2026		3,250		2,850
Orlando Utilities Commission, Utility System Rev. Ref. Bonds, Series B, 5.00% 2033		1,000		1,001
Palm Beach County Health Facs. Auth., Retirement Communities Rev. Ref. Bonds
(ACTS Retirement — Life Communities, Inc. Obligated Group), Series 2006-B, 5.00% 2020		3,085		2,934
Solid Waste Auth. of Palm Beach County, Improvement Rev. Bonds, Series 2009, 5.25% 2021		1,000		1,056
Palm Coast Park Community Dev. Dist. (City of Palm Coast, Flagler County), Special Assessment Bonds,
Series 2006, 5.70% 2037		3,675		2,022
Parker Road Community Dev. Dist. (Alachua County), Capital Improvement Rev. Bonds, Series 2007-A, 5.60% 2038		1,480		812
Parker Road Community Dev. Dist. (Alachua County), Capital Improvement Rev. Bonds, Series 2007-B, 5.35% 2015		2,000		1,202
Parklands Lee Community Dev. Dist. (Bonita Springs), Special Assessment Bonds, Series 2005-B, 5.125% 20113		965		490
Paseo Community Dev. Dist., Fort Myers, Capital Improvement Rev. Bonds, Series 2005-B, 4.875% 2010		1,700		1,000
Pine Air Lakes Community Dev. Dist. (Collier County), Special Assessment Rev. Bonds, Series 2002, 7.25% 2033		2,250		2,226
City of St. Cloud, Stevens Plantation Community Dev. Dist., Special Assessment Rev. Bonds, Series 2003-B, 6.375% 2013		1,335		1,060
St. Johns County Industrial Dev. Auth., Health Care Rev. Ref. Bonds (Vicar’s Landing Project), Series 2007, 5.00% 2017		1,625		1,534
St. Johns County Industrial Dev. Auth., Health Care Rev. Ref. Bonds (Vicar’s Landing Project), Series 2007, 5.00% 2027		3,230		2,583
Seminole Tribe of Florida 5.25% 20272		7,000		5,988
Seminole Tribe of Florida 5.50% 20242		2,500		2,238
Seminole Tribe of Florida 5.75% 20222		2,260		2,124
Shingle Creek Community Dev. Dist. (Osceola County), Capital Improvement Rev. Bonds, Series 2006, 6.10% 2025		3,995		2,263
Shingle Creek Community Dev. Dist. (Osceola County), Capital Improvement Rev. Bonds, Series 2006, 6.125% 2037		3,995		1,956
Six Mile Creek Community Dev. Dist. (St. Johns County), Capital Improvement Rev. Bonds, Series 2007, 5.875% 2038		3,350		1,451
South-Dade Venture Community Dev. Dist. (Homestead), Special Assessment Rev. Bonds, Series 2002, 6.90% 2033		3,680		3,577
South Village Community Dev. Dist. (Clay County), Capital Improvement Rev. Bonds, Series 2005-A, 5.70% 2035		950		549
Split Pine Community Dev. Dist. (City of Jacksonville), Special Assessment Bonds, Series 2007-A, 5.25% 2039		3,000		1,671
Stevens Plantation Improvement Project Dependent Special Dist., Rev. Bonds, Series 2003, 6.375% 2013		2,035		1,615
Stoneybrook West Community Dev. Dist. (City of Winter Garden, Orange County), Special Assessment Rev. Bonds,
Series 2000-B, 6.45% 2010		5		5
Stoneybrook South Community Dev. Dist. (Osceola County), Special Assessment Rev. Bonds, Series 2007-B, 5.45% 2015		6,250		2,896
Sweetwater Creek Community Dev. Dist. (St. Johns County), Capital Improvement Rev. Bonds,
Series 2007-B-1, 5.30% 2017		2,000		1,230
Tison’s Landing Community Dev. Dist. (Jacksonville), Special Assessment Bonds, Series 2005-B, 5.00% 20113		1,740		616
Tolomato Community Dev. Dist. (St. Johns County), Special Assessment Bonds, Series 2007, 6.45% 2023		2,000		1,511
Tolomato Community Dev. Dist. (St. Johns County), Special Assessment Bonds, Series 2007, 6.65% 2040		2,000		1,373
Town Center at Palm Coast Community Dev. Dist. (City of Palm Coast, Flagler County), Capital Improvement Rev. Bonds,
Series 2005, 6.00% 2036		2,885		1,719
Turnbull Creek Community Dev. Dist. (St. Johns County), Special Assessment Bonds, Series 2005, 5.80% 2035		945		541
Tuscany Reserve Community Dev. Dist., Collier County, Capital Improvement Rev. Bonds, Series 2005-A, 5.55% 2036		5,790		3,067
Tuscany Reserve Community Dev. Dist., Collier County, Capital Improvement Rev. Bonds, Series 2005-B, 5.25% 2016		1,135		747
Urban Orlando Community Dev. Dist. (City of Orlando), Capital Improvement Rev. Bonds, Series 2004, 6.00% 2020		920		735
Venetian Community Dev. Dist. (Sarasota County), Capital Improvement Rev. Bonds, Series 2002-A, 6.75% 2034		960		750
Venetian Community Dev. Dist. (Sarasota County), Capital Improvement Rev. Bonds, Series 2002-B, 5.95% 2012		40		39
Waterset North Community Dev. Dist. (Hillsborough County), Special Assessment Rev. Bonds, Series 2007-A, 6.60% 2039		1,690		1,017
Waterset North Community Dev. Dist. (Hillsborough County), Special Assessment Rev. Bonds, Series 2007-B, 6.55% 2015		3,910		2,510
West Villages Improvement Dist. (North Port), Special Assessment Bonds (Unit of Dev. No. 2), Series 2005, 5.80% 2036		6,000		3,144
Winter Garden Village at Fowler Groves Community Dev. Dist. (City of Winter Garden), Special Assessment Bonds,
Series 2006, 5.65% 2037		1,945		1,560
				273,016
GEORGIA — 3.48%
Atlanta Dev. Auth., Student Housing Rev. Bonds (ADA/CAU Partners, Inc. Project at Clark Atlanta University),
Series 2004-A, ACA insured, 6.25% 2024		2,240		1,508
City of Atlanta, Tax Allocation Bonds (Atlantic Station Project), Series 2001, 7.75% 2014 (preref. 2011)		715		801
City of Atlanta, Tax Allocation Bonds (Atlantic Station Project), Series 2001, 7.90% 2024 (preref. 2011)		2,000		2,348
City of Atlanta, Tax Allocation Bonds (Eastside Project), Series 2005-A, AMT, 5.625% 2016		2,545		2,517
Dev. Auth. of Burke County, Pollution Control Rev. Bonds (Georgia Power Co. Plant Vogtle Project),
Second Series 2008, 4.95% 2048 (put 2011)		2,300		2,398
Dev. Auth. of Burke County, Pollution Control Rev. Bonds (Oglethorpe Power Corp. Vogtle Project),
Series 2008-C, 5.70% 2043		3,000		2,887
Dev. Auth. of Burke County, Pollution Control Rev. Bonds (Oglethorpe Power Corp. Vogtle Project),
Series 2008-E, 7.00% 2023		2,000		2,279
Clayton County, Tax Allocation Bonds (Ellenwood Project), Series 2008, 7.50% 2033		4,705		4,059
Joint Dev. Auth. of DeKalb County, Newton County and Gwinnett County, Rev. Bonds (GGC Foundation, LLC Project),
Series 2009, 6.00% 2029		1,850		1,916
Joint Dev. Auth. of DeKalb County, Newton County and Gwinnett County, Rev. Bonds (GGC Foundation, LLC Project),
Series 2009, 6.125% 2040		5,000		5,068
Dev. Auth. of Fulton County, Rev. Bonds (TUFF CAUB LLC Project), Series 2007-A, 5.25% 2028		4,500		3,194
Gainesville and Hall County Dev. Auth., Rev. Bonds, Series A-2, 6.375% 2029		710		719
Gainesville and Hall County Dev. Auth., Rev. Bonds, Series A-2, 6.625% 2039		1,350		1,366
Gainesville Redev. Auth., Educational Facs. Rev. Ref. Bonds (Riverside Military Academy Project),
Series 2007, 5.00% 2018		1,500		1,102
Gainesville Redev. Auth., Educational Facs. Rev. Ref. Bonds (Riverside Military Academy Project),
Series 2007, 5.125% 2027		2,000		1,238
Gainesville Redev. Auth., Educational Facs. Rev. Ref. Bonds (Riverside Military Academy Project),
Series 2007, 5.125% 2037		2,500		1,303
Higher Education Facs. Auth., Rev. Bonds (USG Real Estate Foundation I, LLC Project), Series 2008, 6.00% 2034		6,500		6,666
Higher Education Facs. Auth., Rev. Bonds (USG Real Estate Foundation II, LLC Project), Series 2009-A, 5.50% 2039		2,000		1,965
Main Street Natural Gas, Inc., Gas Project Rev. Bonds, Series 2006-B, 5.00% 2018		4,185		3,784
Main Street Natural Gas, Inc., Gas Project Rev. Bonds, Series 2006-B, 5.00% 2019		2,100		1,882
Main Street Natural Gas, Inc., Gas Project Rev. Bonds, Series 2006-B, 5.00% 2022		5,000		4,312
Main Street Natural Gas, Inc., Gas Project Rev. Bonds, Series 2007-A, 5.50% 2023		2,000		1,798
Main Street Natural Gas, Inc., Gas Project Rev. Bonds, Series 2007-A, 5.50% 2026		1,000		891
Main Street Natural Gas, Inc., Gas Project Rev. Bonds, Series 2007-A, 5.50% 2028		1,395		1,236
Medical Center Hospital Auth., Rev. Ref. Bonds (Spring Harbor at Green Island Project), Series 2007, 5.25% 2027		2,750		2,063
Medical Center Hospital Auth., Rev. Ref. Bonds (Spring Harbor at Green Island Project), Series 2007, 5.25% 2037		1,375		955
Dev. Auth. of the City of Milledgeville and Baldwin County, Rev. Bonds
(Georgia College & State University Foundation Property III, LLC Student Housing System Project),
Series 2004, 6.00% 2012 (escrowed to maturity)		40		46
Dev. Auth. of the City of Milledgeville and Baldwin County, Student Housing Rev. Ref. Bonds
(Georgia College & State University Foundation Property V, LLC Project),
Series 2007, AMBAC insured, 1.05% 20331		3,000		1,845
Municipal Electric Auth., Project One Bonds, Series 2008-D, 5.75% 2019		9,500		10,820
				72,966
GUAM — 0.04%
Education Fncg. Foundation, Certs. of Part. (Public School Facs. Project), Series 2006-A, 5.00% 2023		1,000		861
IDAHO — 0.45%
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 1997-H-2, AMT, 5.40% 2010		40		41
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 1997-I-2, AMT, 5.55% 2010		20		20
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 1998-B-2, AMT, 5.20% 2011		40		41
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 1999-B-2, AMT, 5.00% 2013		135		137
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 1999-D-3, AMT, 5.15% 2013		135		137
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 1999-G, AMT, 5.75% 2014		85		88
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2001-B, Class III, AMT, 5.75% 2020		705		728
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2001-E, Class III, AMT, 5.40% 2021		595		598
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2001-F, Class III, AMT, 5.30% 2021		695		696
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2002-C, Class III, AMT, 5.50% 2021		680		694
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2002-E, Class III, AMT, 5.30% 2022		685		696
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2003-B, Class III, AMT, 5.10% 2023		640		641
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2003-C, Class III, AMT, 4.50% 2023		645		604
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2003-E, Class III, AMT, 5.15% 2023		990		990
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2004-A, Class III, AMT, 4.75% 2024		920		872
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2005-C, Class III, AMT, 4.80% 2026		835		772
Housing and Fin. Assn., Single-family Mortgage Bonds, Series 2007-C, Class III, AMT, 4.75% 2028		1,935		1,766
				9,521
ILLINOIS — 6.03%
Village of Bolingbrook, Will and DuPage Counties, Special Service Area No. 2005-1, Special Tax Bonds (Forest City Project),
Series 2005, 5.90% 2027		6,000		4,228
Village of Cary, McHenry County, Special Service Area Number Two, Special Tax Ref. Bonds,
Series 2006, RADIAN insured, 4.40% 2016		813		757
Chicago Transit Auth., Capital Grant Receipts Rev. Bonds (Federal Transit Administration Section 5307
Guideway Modernization Formula Funds), ASSURED GUARANTY insured, 5.00% 2019		2,000		2,126
City of Chicago, Gas Supply Rev. Ref. Bonds (Peoples Gas Light and Coke Co. Project),
Series 2000-B, 4.75% 2030 (put 2014)		1,000		1,016
City of Chicago, O’Hare International Airport, General Airport Rev. Ref. Bonds,
Series 2005-B, National insured, 5.25% 2017		5,000		5,348
City of Chicago, O’Hare International Airport, Passenger Fac. Charge Rev. Bonds,
Series 2001-C, AMT, AMBAC insured, 5.50% 2015		2,030		2,064
City of Chicago, O’Hare International Airport, Passenger Fac. Charge Rev. Bonds,
Series 2001-E, AMT, AMBAC insured, 5.50% 2016		1,170		1,183
City of Chicago, Special Assessment Improvement Bonds (Lakeshore East Project), Series 2002, 6.75% 2032		2,000		1,538
Chicago Housing Auth., Capital Program Rev. Ref. Bonds, Series 2006, FSA insured, 5.00% 2023		5,000		5,104
County of DuPage, Special Service Area Number 31, Special Tax Bonds (Monarch Landing Project),
Series 2006, 5.40% 2016		707		618
County of DuPage, Special Service Area Number 31, Special Tax Bonds (Monarch Landing Project),
Series 2006, 5.625% 2036		3,650		2,243
Fin. Auth., Charter School Rev. Project and Ref. Bonds (Chicago Charter School Foundation Project),
Series 2007-A, 5.00% 2021		1,000		838
Fin. Auth., Charter School Rev. Project and Ref. Bonds (Chicago Charter School Foundation Project),
Series 2007-A, 5.00% 2026		1,000		778
Fin. Auth., Charter School Rev. Project and Ref. Bonds (Chicago Charter School Foundation Project),
Series 2007-A, 5.00% 2036		4,000		2,794
Fin. Auth., Rev. Bonds (Alexian Brothers Health System), Series 2008, 5.50% 2038		4,500		3,988
Health Facs. Auth., Rev. Bonds (Alexian Brothers Health System), Series 1999, FSA insured, 5.125% 2028		295		294
Fin. Auth., Rev. Bonds (Central DuPage Health), 5.00% 2027		2,000		2,030
Fin. Auth., Rev. Bonds (Clare at Water Tower Project), Series 2005-A, 6.00% 2025		2,250		1,353
Fin. Auth., Rev. Bonds (Clare at Water Tower Project), Series 2005-A, 6.125% 2038		4,750		2,385
Fin. Auth., Rev. Bonds (Elmhurst Memorial Healthcare), Series 2008-A, 5.625% 2037		5,500		4,498
Health Facs. Auth., Rev. Bonds (Elmhurst Memorial Healthcare), Series 2002, 6.25% 2017		3,335		3,394
Fin. Auth., Rev. Bonds (Hospital Sisters Services, Inc. — Obligated Group), Series 2007-A, 5.00% 2026		2,000		2,012
Fin. Auth., Rev. Bonds (Monarch Landing, Inc. Fac.), Series 2007-A, 7.00% 2027		1,240		778
Fin. Auth., Rev. Bonds (Monarch Landing, Inc. Fac.), Series 2007-A, 7.00% 2037		1,000		569
Fin. Auth., Rev. Bonds (Monarch Landing, Inc. Fac.), Series 2007-A, 7.00% 2042		5,725		3,172
Fin. Auth., Rev. Bonds (Northwestern Memorial Hospital), Series A, 6.00% 2039		6,000		6,229
Fin. Auth., Rev. Bonds (Provena Health), Series 2009-A, 7.75% 2034		9,800		9,874
Fin. Auth., Rev. Bonds (Sedgebrook, Inc. Fac.), Series 2007-A, 6.00% 2042		2,000		970
Fin. Auth., Rev. Bonds (Sherman Health Systems), Series 2007-A, 5.50% 2037		2,000		1,517
Fin. Auth., Rev. Bonds (Three Crowns Park Project), Series 2006-A, 5.875% 2026		1,500		1,217
Fin. Auth., Rev. Bonds (Three Crowns Park Project), Series 2006-A, 5.875% 2038		2,000		1,465
Fin. Auth., Rev. Bonds (University of Chicago), Series 2008-B, 5.75% 2033		1,250		1,328
Fin. Auth., Rev. Ref. Bonds (Fairview Obligated Group), Series 2004-A, 6.00% 2020 (preref. 2009)		1,000		1,002
Fin. Auth., Rev. Ref. Bonds (Franciscan Communities, Inc.), Series 2007-A, 5.50% 2027		3,000		2,106
Fin. Auth., Rev. Ref. Bonds (Franciscan Communities, Inc.), Series 2007-A, 5.50% 2037		3,500		2,183
Fin. Auth., Rev. Ref. Bonds (Lutheran Hillside Village), Series 2006, 5.00% 2017		1,020		947
Fin. Auth., Rev. Ref. Bonds (Lutheran Hillside Village), Series 2006, 5.125% 2026		1,000		838
Fin. Auth., Rev. Ref. Bonds (Riverside Health System), Series 2006-C, 4.50% 2026		1,500		1,239
Fin. Auth., Student Housing Rev. Ref. Bonds, Educational Advancement Fund, Inc. (University Center),
Series 2006-A, 5.25% 2034		2,985		2,203
Fin. Auth., Student Housing Rev. Ref. Bonds, Educational Advancement Fund, Inc. (University Center),
Series 2006-B, 5.00% 2025		5,000		3,963
Fin. Auth., Student Housing Rev. Ref. Bonds, Educational Advancement Fund, Inc. (University Center),
Series 2006-B, 5.25% 2019		5,500		4,919
Village of Hampshire (Kane County), Special Service Area Number 13, Special Tax Bonds (Tuscany Woods Project),
Series 2007, 5.75% 2037		5,000		2,623
Village of Hampshire (Kane County), Special Service Area Number 16, Special Tax Bonds
(Crown Dev. Projects — Prairie Ridge West), Series 2007-A, 6.00% 2046		3,230		1,647
Village of Hampshire (Kane County), Special Service Area Number 18, Special Tax Bonds
(Crown Dev. Projects — Tamms Farm), Series 2007-A, 6.00% 2044		1,210		611
Village of Hampshire (Kane County), Special Service Area Number 19, Special Tax Bonds
(Crown Dev. Projects — Prairie Ridge East), Series 2007-A, 6.00% 2046		3,000		1,510
Health Facs. Auth., Rev. Bonds (Centegra Health System), Series 1998, 5.25% 2014		1,500		1,511
Health Facs. Auth., Rev. Bonds (Centegra Health System), Series 1998, 5.25% 2018		500		500
Health Facs. Auth., Rev. Bonds (Riverside Health System), Series 2002, 5.75% 2022 (preref. 2012)		1,000		1,147
Housing Dev. Auth., Housing Bonds (Sunrise Apartments), Series 2006-D, AMT, 4.85% 2026		1,820		1,703
Housing Dev. Auth., Housing Bonds (Sunrise Apartments), Series 2006-D, AMT, 5.00% 2042		1,665		1,449
Housing Dev. Auth., Housing Bonds, Series G, 4.20% 2015		1,135		1,184
Housing Dev. Auth., Housing Bonds, Series G, 4.30% 2016		445		459
Housing Dev. Auth., Housing Bonds, Series G, 4.55% 2021		825		827
Housing Dev. Auth., Housing Bonds, Series G, 4.80% 2032		1,000		918
Village of Lakemoor, McHenry and Lake Counties, Special Service Area Number 97-1, Special Tax Ref. Bonds,
Series 2006, RADIAN insured, 4.55% 2016		1,049		973
Village of Lincolnshire, Special Service Area No. 1, Special Tax Bonds (Sedgebrook Project), Series 2004, 6.25% 2034		1,850		1,254
Village of Manhattan (Will County), Special Service Area Number 2007-6, Special Tax Bonds
(Groebe Farm-Stonegate Project), Series 2007, 5.75% 2022		2,450		1,528
Village of Manhattan (Will County), Special Service Area Number 2007-6, Special Tax Bonds
(Groebe Farm-Stonegate Project), Series 2007, 6.125% 2040		5,000		2,413
Village of Montgomery, Kane and Kendall Counties, Special Assessment Improvement Bonds (Lakewood Creek Project),
Series 2001, 7.75% 2030 (preref. 2011)		938		1,029
Village of Montgomery, Kane and Kendall Counties, Special Assessment Improvement Ref. Bonds
(Lakewood Creek Project), Series 2006, RADIAN insured, 4.70% 2030		960		725
State Toll Highway Auth., Toll Highway Rev. Bonds, Series 2008-B, 5.50% 2033		4,000		4,195
Board of Trustees of the University of Illinois, Ref. Certs. of Part., Series 2009-A, 5.00% 2020		1,000		1,029
				126,343
INDIANA — 2.37%
City of Anderson, Econ. Dev. Rev. Ref. and Improvement Bonds (Anderson University Project), Series 2007, 5.00% 2028		2,055		1,555
City of Anderson, Econ. Dev. Rev. Ref. and Improvement Bonds (Anderson University Project), Series 2007, 5.00% 2032		1,000		719
Dev. Fin. Auth., Exempt Facs. Rev. Ref. Bonds (Inland Steel Co. Project No. 15), Series 1997-A, 5.75% 2011		1,000		963
Fin. Auth., Environmental Rev. Ref. Bonds (Duke Energy Indiana, Inc. Project), Series 2009-B, 6.00% 2039		7,000		7,132
Health and Educational Fac. Fncg. Auth., Hospital Rev. Bonds (Clarian Health Obligated Group),
Series 2006-A, 5.00% 2036		1,500		1,290
Health and Educational Fac. Fncg. Auth., Hospital Rev. Bonds (Clarian Health Obligated Group),
Series 2006-A, 5.00% 2039		1,500		1,272
Health and Educational Fac. Fncg. Auth., Hospital Rev. Ref. Bonds (Clarian Health Obligated Group),
Series 2006-B, 5.00% 2023		5,220		4,921
Health and Educational Fac. Fncg. Auth., Hospital Rev. Bonds
(Community Foundation of Northwest Indiana Obligated Group), Series 2007, 5.50% 2027		4,000		3,710
Health and Educational Fac. Fncg. Auth., Hospital Rev. Bonds
(Community Foundation of Northwest Indiana Obligated Group), Series 2007, 5.50% 2037		7,750		6,761
Health Fac. Fin. Auth., Rev. Bonds (Ascension Health Credit Group), Series 2002-F, 5.50% 2015 (preref. 2012)		140		161
Health Fac. Fin. Auth., Rev. Bonds (Ascension Health Credit Group), Series 2002-F, 5.50% 2015		860		917
Indianapolis Airport Auth., Special Fac. Rev. Bonds (United Air Lines, Inc., Indianapolis Maintenance Center Project),
Series 1995-A, AMT, 6.50% 20313		3,500		70
Indianapolis Airport Auth., Special Fac. Rev. Ref. Bonds (Federal Express Corp. Project), Series 2004, AMT, 5.10% 2017		8,000		7,282
Indianapolis Local Public Improvement Bond Bank Bonds (Indianapolis Airport Auth. Project),
Series 2004-I, AMT, National insured, 5.25% 2014		2,000		2,075
Indianapolis Local Public Improvement Bond Bank Bonds (Indianapolis Airport Auth. Project),
Series 2006-F, AMT, AMBAC insured, 5.00% 2015		2,000		2,043
Jasper County, Demand Pollution Control Rev. Ref. Bonds (Northern Indiana Public Service Co. Project),
Series 1988-C, National insured, 5.60% 2016		1,000		1,030
Jasper County, Demand Pollution Control Rev. Ref. Bonds (Northern Indiana Public Service Co. Project),
Series 1988-C, National insured, 5.85% 2019		3,000		3,037
St. Joseph County, Econ. Dev. Rev. Bonds (Holy Cross Village at Notre Dame Project), Series 2006-A, 6.00% 2026		230		186
St. Joseph County, Econ. Dev. Rev. Bonds (Holy Cross Village at Notre Dame Project), Series 2006-A, 6.00% 2038		500		360
Vanderburgh County Redev. Dist., Tax Increment Rev. Bonds of 2006, 5.00% 2021		1,375		1,364
Hospital Auth. of Vigo County, Hospital Rev. Bonds (Union Hospital, Inc.), Series 2007, 5.70% 2037		4,000		2,889
				49,737
IOWA — 0.52%
Coralville, Annual Appropriation Urban Renewal Tax Increment Rev. Bonds, Series 2007-C, 5.00% 2047		2,075		1,602
Fin. Auth., Retirement Community Rev. Bonds (Edgewater, A Wesley Active Life Community, LLC Project),
Series 2007-A, 6.75% 2037		2,500		1,954
Fin. Auth., Retirement Community Rev. Bonds (Edgewater, A Wesley Active Life Community, LLC Project),
Series 2007-A, 6.75% 2042		5,000		3,933
Fin. Auth., Single-family Mortgage Bonds, Series 2006-E, AMT, 5.50% 2036		1,160		1,167
Tobacco Settlement Auth., Asset-backed Bonds, Series 2001-B, 5.50% 2014 (preref. 2011)		2,000		2,171
				10,827
KANSAS — 0.35%
City of Lenexa, Health Care Fac. Rev. Ref. and Improvement Bonds (Lakeview Village, Inc. Project),
Series 2007, 5.125% 2017		1,200		1,072
City of Lenexa, Health Care Fac. Rev. Ref. and Improvement Bonds (Lakeview Village, Inc. Project),
Series 2007, 5.50% 2039		3,250		2,400
City of Manhattan, Health Care Fac. Rev. Bonds (Meadowlark Hills Retirement Community), Series 2007-B, 5.125% 2042		1,000		690
City of Overland Park, Transportation Dev. Dist. Special Assessment Bonds (Tallgrass Creek Project),
Series 2006, 5.125% 2028		2,705		1,768
Unified Government of Wyandotte County/Kansas City, Transportation Dev. Dist. Sales Tax Rev. Bonds
(Legends at Village West Project), Series 2006, 4.60% 2016		1,745		1,485
				7,415
KENTUCKY — 0.94%
Econ. Dev. Fin. Auth., Hospital Rev. Bonds (Baptist Healthcare System Obligated Group), Series 2009-A, 5.375% 2024		3,000		3,170
Econ. Dev. Fin. Auth., Hospital Rev. Bonds (Baptist Healthcare System Obligated Group), Series 2009-A, 5.625% 2027		2,000		2,105
Econ. Dev. Fin. Auth., Hospital System Ref. and Improvement Rev. Bonds (Appalachian Regional Healthcare, Inc. Project),
Series 1997, 5.80% 2012		1,000		936
Econ. Dev. Fin. Auth., Hospital System Ref. and Improvement Rev. Bonds (Appalachian Regional Healthcare, Inc. Project),
Series 1997, 5.85% 2017		7,000		5,678
Econ. Dev. Fin. Auth., Louisville Arena Project Rev. Bonds (Louisville Arena Auth., Inc.),
Series 2008-A-1, ASSURED GUARANTY insured, 5.75% 2028		2,500		2,609
Econ. Dev. Fin. Auth., Louisville Arena Project Rev. Bonds (Louisville Arena Auth., Inc.),
Series 2008-A-1, ASSURED GUARANTY insured, 6.00% 2033		1,000		1,038
Econ. Dev. Fin. Auth., Louisville Arena Project Rev. Bonds (Louisville Arena Auth., Inc.),
Series 2008-A-1, ASSURED GUARANTY insured, 6.00% 2042		2,000		2,056
Louisville/Jefferson County Metro Government, Health Facs. Rev. Bonds
(Jewish Hospital & St. Mary’s HealthCare, Inc. Project), Series 2008, 6.125% 2037		2,005		2,010
				19,602
LOUISIANA — 2.26%
Citizens Property Insurance Corp., Assessment Rev. Bonds, Series 2006-B, AMBAC insured, 5.00% 2020		3,000		2,787
Health Education Auth., Rev. Ref. Bonds (Lambeth House Project), Series 1998-A, 6.20% 2028		5,000		4,052
Public Facs. Auth., Rev. Ref. Bonds (CHRISTUS Health), Series A, 6.00% 2029		2,000		1,971
Local Government Environmental Facs. and Community Dev. Auth., Rev. Bonds (Westlake Chemical Corp. Projects),
Series 2007, 6.75% 2032		13,000		10,899
Public Facs. Auth., Rev. Ref. Bonds, (Tulane University of Louisiana Project),
Series 2007-A-2, National insured, 1.292% 20361		2,000		1,228
Public Facs. Auth., Rev. Bonds (Ochsner Clinic Foundation Project), Series 2007-A, 5.25% 2038		1,000		812
Parish of St. John the Baptist, Rev. Bonds (Marathon Oil Corp. Project), Series 2007-A, 5.125% 2037		10,500		9,067
Tobacco Settlement Auth., Asset-backed Bonds, Series 2001-B, 5.50% 2030		16,835		16,596
				47,412
MAINE — 0.70%
Fin. Auth., Rev. Obligation Securities, Point Lookout Issue, Series 2008, 9.875% 20174		15,000		13,223
Fin. Auth., Solid Waste Disposal Rev. Bonds (Waste Management, Inc. Project), Series 2003, AMT, 4.65% 2016		1,500		1,392
				14,615
MARYLAND — 1.09%
City of Annapolis, Special Obligation Bonds (Park Place Project), Series 2005-A, 5.35% 2034		2,666		1,813
City of Annapolis, Special Obligation Bonds (Park Place Project), Series 2005-B, 4.75% 2034		1,972		1,205
Community Dev. Administration, Dept. of Housing and Community Dev., Residential Rev. Bonds,
Series 2006-F, AMT, 6.00% 2039		1,945		1,969
Econ. Dev. Corp., Student Housing Rev. Bonds (Towson University Project), Series 2007-A, 5.25% 2037		500		395
Econ. Dev. Corp., Student Housing Rev. Bonds (University of Maryland, College Park Projects), Series 2008, 5.80% 2038		1,000		945
Econ. Dev. Corp., Student Housing Rev. Ref. Bonds (University of Maryland, College Park Projects),
Series 2006, CIFG insured, 5.00% 2026		1,000		863
Frederick County, Urbana Community Dev. Auth., Special Obligation Bonds, Series 1998, 6.625% 2025		3,500		3,002
Frederick County, Urbana Community Dev. Auth., Special Obligation Bonds, Series 2004-B, 6.25% 2030		967		736
City of Gaithersburg, Econ. Dev. Rev. Ref. Bonds (Asbury Maryland Obligated Group), Series 2006-A, 5.125% 2036		7,000		5,122
Housing Auth. of Prince George’s County, Mortgage Rev. Bonds
(GNMA Collateralized — Langley Gardens Apartments Project), Series 1997-A, AMT, 5.75% 2029		1,000		1,001
Prince George’s County, Special Obligation Bonds (National Harbor Project), Series 2004, 4.70% 2015		1,900		1,775
Prince George’s County, Special Obligation Bonds (National Harbor Project), Series 2004, 5.20% 2034		2,750		1,947
Prince George’s County, Special Obligation Bonds (Woodview Village Phase II Subdistrict),
Series 2002, 7.00% 2032 (preref. 2012)		1,857		2,145
				22,918
MASSACHUSETTS — 2.17%
Dev. Fin. Agcy., Rev. Bonds (Boston University Issue), Series U-4, 5.60% 2035		1,750		1,773
Dev. Fin. Agcy., Rev. Bonds (Curry College Issue), Series 2006-A, ACA insured, 5.25% 2026		1,400		1,245
Dev. Fin. Agcy., Rev. Bonds (Eastern Nazarene College Issue), Tax-Exempt Series 1999, 5.625% 2019		800		684
Dev. Fin. Agcy., Rev. Bonds (Eastern Nazarene College Issue), Tax-Exempt Series 1999, 5.625% 2029		4,150		2,941
Dev. Fin. Agcy., Rev. Bonds (Linden Ponds, Inc. Fac.), Series 2007-A, 5.25% 2018		1,000		769
Dev. Fin. Agcy., Rev. Bonds (Linden Ponds, Inc. Fac.), Series 2007-A, 5.50% 2027		2,500		1,663
Dev. Fin. Agcy., Rev. Bonds (Linden Ponds, Inc. Fac.), Series 2007-A, 5.75% 2035		3,000		1,874
Dev. Fin. Agcy., Rev. Bonds (Linden Ponds, Inc. Fac.), Series 2007-A, 5.75% 2042		2,000		1,188
Educational Fncg. Auth., Education Loan Rev. Bonds, Issue E, Series 2007, AMT, AMBAC insured, 4.60% 2022		5,000		4,446
Educational Fncg. Auth., Education Loan Rev. Bonds, Issue E, Series 2007, AMT, AMBAC insured, 4.70% 2027		10,000		8,446
Educational Fncg. Auth., Education Loan Rev. Bonds, Issue H,
Series 2008, AMT, ASSURED GUARANTY insured, 6.125% 2022		8,000		8,208
G.O. Bonds, Consolidated Loan of 2008, Series A, 5.00% 2033		3,000		3,068
G.O. Bonds, Consolidated Loan of 2008, Series A, 5.00% 2038		3,000		3,037
Health and Educational Facs. Auth., Rev. Bonds (Harvard University Issue), Series 2009-A, 5.50% 2036		1,000		1,077
Health and Educational Facs. Auth., Rev. Bonds (Partners HealthCare System Issue), Series C, 6.00% 2015		1,000		1,076
Housing Fin. Agcy., Housing Bonds, Series 2006-D, AMT, 4.625% 2026		1,925		1,758
Health and Educational Facs. Auth., Rev. Bonds (Northeastern University Issue), Series T-2, 4.10% 2037 (put 2012)		1,150		1,161
Water Resources Auth., General Rev. Ref. Bonds, Series 2009-B, 5.00% 2039		1,000		1,009
				45,423
MICHIGAN — 2.47%
Econ. Dev. Corp. of the City of Dearborn, Limited Obligation Rev. and Ref. Bonds (Henry Ford Village, Inc. Project),
Series 2008, 7.00% 2038		2,500		2,022
Econ. Dev. Corp. of the City of Dearborn, Limited Obligation Rev. and Ref. Bonds (Henry Ford Village, Inc. Project),
Series 2008, 7.125% 2043		5,000		4,077
City of Flint, Hospital Building Auth., Rev. Rental Bonds (Hurley Medical Center), Series 1998-B, 5.375% 2018		1,380		1,134
City of Flint, Hospital Building Auth., Rev. Rental Bonds (Hurley Medical Center), Series 1998-B, 5.375% 2028		2,750		1,843
Higher Education Facs. Auth., Limited Obligation Rev. Bonds (Alma College Project), Series 2005, 4.00% 2017		460		454
Higher Education Facs. Auth., Limited Obligation Rev. Bonds (Alma College Project), Series 2005, 4.10% 2018		380		371
Higher Education Facs. Auth., Limited Obligation Rev. Bonds (Alma College Project), Series 2005, 4.25% 2014		405		418
Higher Education Facs. Auth., Limited Obligation Rev. Bonds (Alma College Project), Series 2005, 5.00% 2016		445		469
Higher Education Student Loan Auth., Student Loan Rev. Bonds, Series XVII-P, AMT, AMBAC insured, 4.50% 2017		5,000		4,605
Higher Education Student Loan Auth., Student Loan Rev. Bonds, Series XVII-Q, AMT, AMBAC insured, 4.75% 2017		2,000		1,884
Higher Education Student Loan Auth., Student Loan Rev. Bonds, Series XVII-Q, AMT, AMBAC insured, 4.95% 2026		2,500		2,169
Hospital Fin. Auth., Hospital Rev. and Ref. Bonds (Henry Ford Health System), Series 2006-A, 5.00% 2026		2,000		1,698
Hospital Fin. Auth., Hospital Rev. and Ref. Bonds (Henry Ford Health System), Series 2006-A, 5.00% 2038		3,000		2,293
Hospital Fin. Auth., Hospital Rev. Bonds (Detroit Medical Center Obligated Group), Series 1998-A, 5.125% 2018		1,550		1,234
Hospital Fin. Auth., Hospital Rev. Bonds (MidMichigan Obligated Group), Series 2006-A, 5.00% 2026		1,000		923
Hospital Fin. Auth., Hospital Rev. Bonds (MidMichigan Obligated Group), Series 2006-A, 5.00% 2036		4,000		3,419
Hospital Fin. Auth., Hospital Rev. Ref. Bonds (Trinity Health Credit Group), Series 2002-C, 5.375% 2023		1,500		1,511
County of Monroe Hospital Fin. Auth., Hospital Rev. and Ref. Bonds (Mercy Memorial Hospital Corp. Obligated Group),
Series 2006, 5.375% 2026		1,250		991
City of Royal Oak Hospital Fin. Auth., Hospital Rev. and Ref. Bonds (William Beaumont Hospital Obligated Group),
Series 2009-V, 8.25% 2039		4,000		4,530
City of Saginaw Hospital Fin. Auth., Rev. Ref. Bonds (Covenant Medical Center, Inc.), Series 2004-G, 5.00% 2010		1,330		1,348
City of Saginaw Hospital Fin. Auth., Rev. Ref. Bonds (Covenant Medical Center, Inc.), Series 2004-G, 5.00% 2017		2,425		2,383
State Building Auth., Rev. and Rev. Ref. Bonds (Facs. Program), Series 2008-I, 6.00% 2038		1,000		1,031
Strategic Fund, Limited Obligation Rev. Ref. Bonds (Detroit Edison Co. Exempt Facilities Project), 5.25% 2029 (put 2014)		2,750		2,822
Strategic Fund, Limited Obligation Rev. Ref. Bonds (Detroit Edison Co. Exempt Facilities Project), 5.625% 2020		4,000		3,985
Tobacco Settlement Fin. Auth., Tobacco Settlement Asset-backed Bonds, Current Interest Bonds,
Series 2007-A, 5.125% 2022		2,000		1,640
Tobacco Settlement Fin. Auth., Tobacco Settlement Asset-backed Bonds, Current Interest Turbo Term Bonds,
Series 2008-A, 6.875% 2042		3,440		2,585
				51,839
MINNESOTA — 0.06%
Housing and Redev. Auth. of St. Paul and Minneapolis, Health Care Fac. Rev. Bonds
(HealthPartners Obligated Group Project), Series 2003, 5.25% 2009		1,250		1,255
MISSISSIPPI — 0.32%
Hospital Equipment and Facs. Auth., Rev. Bonds (Baptist Memorial Health Care), Series 2004-B-1, 5.00% 2024		2,500		2,526
Hospital Equipment and Facs. Auth., Rev. Bonds (Mississippi Baptist Health Systems, Inc.), Series 2007-A, 5.00% 2026		4,500		4,127
				6,653
MISSOURI — 1.71%
Industrial Dev. Auth. of the County of Cape Girardeau, Health Facs. Rev. Bonds (Southeast Missouri Hospital Assn.),
Series 2007, 5.00% 2019		2,885		2,749
City of Fenton, Tax Increment Rev. Ref. Bonds (Gravois Bluffs Redev. Project), Series 2006, 4.50% 2021		1,505		1,362
Hawk Ridge Transportation Dev. Dist. (Lake St. Louis), Transportation Sales Tax Rev. Bonds, Series 2006-A, 4.65% 2017		1,940		1,631
Health and Educational Facs. Auth., Senior Living Facs. Rev. Bonds (Lutheran Senior Services),
Series 2007-B, 4.875% 2038		3,000		2,061
Housing Dev. Commission, Single Family Mortgage Rev. Bonds (Homeownership Loan Program),
Series 2006-B, AMT, 6.05% 2037		4,615		4,776
Industrial Dev. Auth. of the City of Lee’s Summit, Senior Living Facs. Rev. Bonds (John Knox Village Obligated Group),
Series 2007-A, 5.125% 2026		7,000		5,604
Industrial Dev. Auth. of the City of Lee’s Summit, Senior Living Facs. Rev. Bonds (John Knox Village Obligated Group),
Series 2007-A, 5.125% 2032		3,500		2,613
City of St. Louis, Airport Rev. Ref. Bonds (Lambert-St. Louis International Airport),
Series 2007-B, AMT, FSA insured, 5.00% 2027		5,490		4,965
State Environmental Improvement and Energy Resources Auth., Water Facs. Rev. Ref. Bonds
(Missouri-American Water Co. Project), Series 2006, AMT, AMBAC insured, 4.60% 2036		10,000		7,503
Transportation Dev. Dist. (Hazelwood, St. Louis County), Transportation Rev. Bonds
(Missouri Bottom Road/Taussig Road), Series 2002, 7.20% 2033		3,300		2,639
				35,903
MONTANA — 0.19%
Fac. Fin. Auth., Senior Living Rev. Bonds (St. John’s Lutheran Ministries Project), Series 2006-A, 6.00% 2025		1,250		971
Fac. Fin. Auth., Senior Living Rev. Bonds (St. John’s Lutheran Ministries Project), Series 2006-A, 6.125% 2036		2,100		1,490
Board of Housing, Single-family Mortgage Bonds, Series 2006-B, AMT, 5.50% 2037		1,580		1,606
				4,067
NEBRASKA — 0.56%
Hospital Auth. No. 3 of Douglas County, Health Facs. Rev. and Ref. Bonds (Methodist Health System),
Series 2008, 5.75% 2028		3,500		3,385
Educational Fin. Auth., Rev. and Ref. Bonds (Concordia University Project), Series 2007, 5.00% 2037		1,340		911
Investment Fin. Auth., Single-family Housing Rev. Bonds, Series 2006-C, AMT, 5.50% 2036		4,135		4,225
Investment Fin. Auth., Single-family Housing Rev. Bonds, Series 2006-D, AMT, 5.50% 2036		3,295		3,307
				11,828
NEVADA — 2.87%
Clark County School Dist., G.O. (Limited Tax) Building Bonds, Series 2008-A, 5.00% 2021		4,500		4,601
Clark County Water Reclamation Dist., G.O. (Limited Tax) Water Reclamation Bonds, Series 2009-B, 5.25% 2020		2,500		2,686
Clark County, Highway Rev. (Motor Vehicle Fuel Tax) Improvement and Ref. Bonds,
Series 2007, AMBAC insured, 5.00% 2020		4,000		4,118
Clark County, Special Improvement Dist. No. 121 (Southern Highlands Area), Local Improvement Ref. Bonds,
Series 2006-B, 5.30% 2029		1,000		651
Clark County, Special Improvement Dist. No. 132 (Summerlin South Area (Villages 15A and 18)),
Local Improvement Bonds, Series 2001, 6.125% 2011		945		892
Clark County, Special Improvement Dist. No. 132 (Summerlin South Area (Villages 15A and 18)),
Local Improvement Bonds, Series 2001, 6.40% 2014		1,150		967
Clark County, Special Improvement Dist. No. 132 (Summerlin South Area (Villages 15A and 18)),
Local Improvement Bonds, Series 2001, 6.50% 2015		905		734
Clark County, Special Improvement Dist. No. 132 (Summerlin South Area (Villages 15A and 18)),
Local Improvement Bonds, Series 2001, 6.875% 2021		2,335		1,614
Clark County, Special Improvement Dist. No. 142 (Mountain’s Edge), Local Improvement Bonds,
Series 2003, 5.60% 2013		970		909
Clark County, Special Improvement Dist. No. 142 (Mountain’s Edge), Local Improvement Bonds,
Series 2003, 5.75% 2014		970		898
Clark County, Special Improvement Dist. No. 142 (Mountain’s Edge), Local Improvement Bonds,
Series 2003, 6.375% 2023		3,275		2,586
G.O. (Limited Tax) Capital Improvement and Cultural Affairs Bonds, Series 2008-C, 5.00% 2024		1,000		1,018
City of Henderson, Health Fac. Rev. Bonds (Catholic Healthcare West), Series 1999-A, 6.75% 2020 (preref. 2010)		1,755		1,872
City of Henderson, Health Fac. Rev. Bonds (Catholic Healthcare West), Series 1999-A, 6.75% 2020 (preref. 2010)		245		261
City of Henderson, Health Fac. Rev. Bonds (Catholic Healthcare West), Series 2007-B, 5.25% 2031		2,000		1,818
City of Henderson, Local Improvement Dist. No. T-16 (Falls at Lake Las Vegas),
Limited Obligation Improvement Bonds, 5.00% 2018		1,115		462
City of Henderson, Local Improvement Dist. No. T-16 (Falls at Lake Las Vegas),
Limited Obligation Improvement Bonds, 5.00% 2019		1,395		575
City of Henderson, Local Improvement Dist. No. T-16 (Falls at Lake Las Vegas),
Limited Obligation Improvement Bonds, 5.125% 2025		3,485		1,409
City of Henderson, Local Improvement Dist. No. T-17 (Madeira Canyon),
Limited Obligation Improvement Bonds, 5.00% 2014		715		645
City of Henderson, Local Improvement Dist. No. T-17 (Madeira Canyon),
Limited Obligation Improvement Bonds, 5.00% 2017		985		809
City of Henderson, Local Improvement Dist. No. T-18 (Inspirada), Limited Obligation Improvement Bonds, 5.25% 2026		2,500		958
City of Henderson, Local Improvement Dist. No. T-18 (Inspirada), Limited Obligation Improvement Bonds, 5.30% 2035		8,475		3,052
City of Henderson, Local Improvement Dist. No. T-4C (Green Valley Properties), Limited Obligation Ref. Bonds,
Series 1999-A, 5.75% 2013		1,620		1,595
City of Henderson, Local Improvement Dist. No. T-4C (Green Valley Properties), Limited Obligation Ref. Bonds,
Series 1999-A, 5.90% 2018		950		870
Housing Division, Single-family Mortgage Bonds, Series 1999-B-1, 4.95% 2012		30		30
Housing Division, Single-family Mortgage Bonds, Series 1999-D-2, AMT, 5.90% 2013		25		26
City of Las Vegas Redev. Agcy., Tax Increment Rev. Bonds, Series 2009-A, 8.00% 2030		4,000		4,287
City of Las Vegas, Special Improvement Dist. No. 607 (Providence), Local Improvement Bonds, Series 2004, 5.75% 2016		2,115		1,723
City of Las Vegas, Special Improvement Dist. Nos. 808 and 810 (Summerlin Village 23B),
Local Improvement and Ref. Bonds, Series 2007, 5.875% 2021		1,000		624
City of Reno, Hospital Rev. Bonds (Renown Regional Medical Center Project), Series 2007-A, 5.25% 2037		5,000		4,096
Redev. Agcy. of the City of Reno, Tax Increment Bonds, Series 2007-B, 5.00% 2027		2,000		1,622
Redev. Agcy. of the City of Reno, Tax Increment Bonds, Series 2007-C, 5.40% 2027		2,375		1,567
Rural Housing Auth., Single-family Mortgage Rev. Bonds (Mortgage-backed Securities Program),
Series 2007-B, AMT, 5.70% 2041		5,780		5,979
City of Sparks, Local Improvement Dist. No. 3 (Legends at Sparks Marina),
Limited Obligation Improvement Bonds, 6.50% 2020		2,000		1,680
City of Sparks, Local Improvement Dist. No. 3 (Legends at Sparks Marina),
Limited Obligation Improvement Bonds, 6.75% 2027		1,000		782
City of Sparks, Tourism Improvement Dist. No. 1 (Legends at Sparks Marina), Sales Tax Anticipation Rev. Bonds,
Series A, 6.50% 2020		2,000		1,663
				60,079
NEW HAMPSHIRE — 0.50%
Business Fin. Auth., Pollution Control Rev. Ref. Tax-Exempt Bonds (Public Service Co. of New Hampshire Project),
Series 1992-D, AMT, 6.00% 2021		2,000		2,000
Health and Education Facs. Auth., Rev. Bonds (Exeter Hospital Obligated Group Issue), Series 2001-A, 5.75% 2031		1,000		971
Health and Education Facs. Auth., Rev. Bonds (Southern New Hampshire Medical Center Issue),
Series 2007-A, 5.25% 2028		5,000		4,523
Health and Educational Facs. Auth., Healthcare System Rev. Bonds (Covenant Health Systems Obligated Group Issue),
Series 2007-A, 5.00% 2027		1,715		1,590
Health and Educational Facs. Auth., Healthcare System Rev. Bonds (Covenant Health Systems Obligated Group Issue),
Series 2007-A, 5.25% 2020		1,200		1,225
Housing Fin. Auth., Single-family Mortgage Acquisition Rev. Bonds, Series 1997-D, AMT, 5.60% 2012		70		72
				10,381
NEW JERSEY — 2.69%
Certs. of Part., Series 2009-A, 5.25% 2023		3,000		3,105
Econ. Dev. Auth., Cigarette Tax Rev. Bonds, Series 2004, RADIAN insured, 5.375% 2014		1,500		1,489
Econ. Dev. Auth., Cigarette Tax Rev. Bonds, Series 2004, RADIAN insured, 5.375% 2015		2,000		1,960
Econ. Dev. Auth., Cigarette Tax Rev. Bonds, Series 2004, RADIAN insured, 5.50% 2016		2,750		2,669
Econ. Dev. Auth., Econ. Dev. Bonds (City of Elizabeth — Kapkowski Road Landfill Reclamation Improvement Dist. Project),
Series 1998-A, 6.375% 2031 (preref. 2014)		1,500		1,800
Econ. Dev. Auth., Retirement Community Rev. Ref. Bonds (Seabrook Village, Inc. Fac.), Series 2006, 5.25% 2026		4,060		3,142
Econ. Dev. Auth., Retirement Community Rev. Ref. Bonds (Seabrook Village, Inc. Fac.), Series 2006, 5.25% 2036		115		81
Econ. Dev. Auth., Rev. Ref. Bonds (Crane’s Mill Project), Series 2005-A, 5.00% 2015		580		554
Econ. Dev. Auth., Special Fac. Rev. Bonds (Continental Airlines, Inc. Project), Series 1999, AMT, 6.25% 2019		1,000		775
Econ. Dev. Auth., Special Fac. Rev. Bonds (Continental Airlines, Inc. Project), Series 1999, AMT, 6.25% 2029		11,000		7,588
Econ. Dev. Auth., Special Fac. Rev. Bonds (Continental Airlines, Inc. Project), Series 1999, AMT, 6.40% 2023		2,000		1,484
Educational Facs. Auth., Rev. Ref. Bonds (Kean University Issue), Series 2009-A, 5.00% 2021		500		512
Educational Facs. Auth., Rev. Ref. Bonds (Kean University Issue), Series 2009-A, 5.00% 2024		1,500		1,497
Educational Facs. Auth., Rev. Ref. Bonds (Kean University Issue), Series 2009-A, 5.50% 2036		3,000		2,983
Higher Education Student Assistance Auth., Student Loan Rev. Bonds,
Series 2008-A, AMT, ASSURED GUARANTY insured, 5.875% 2021		3,000		3,093
Higher Education Student Assistance Auth., Student Loan Rev. Bonds, Series 2009-A, 5.00% 2017		2,000		2,103
Higher Education Student Assistance Auth., Student Loan Rev. Bonds, Series 2009-A, 5.00% 2019		2,500		2,576
Housing and Mortgage Fin. Agcy., Multi-family Rev. Bonds, Series 2007-A, AMT, National insured, 4.75% 2033		1,780		1,583
Housing and Mortgage Fin. Agcy., Multi-family Rev. Bonds, Series 2007-A, AMT, National insured, 4.85% 2039		1,335		1,179
Rutgers State University, G.O. Bonds (State University of New Jersey), Series 2009-F, 5.00% 2039		2,000		2,043
Tobacco Settlement Fncg. Corp., Tobacco Settlement Asset-backed Bonds, Series 2007-1A, 4.50% 2023		3,065		2,630
Tobacco Settlement Fncg. Corp., Tobacco Settlement Asset-backed Bonds, Series 2007-1A, 4.625% 2026		12,500		8,660
Transportation Trust Fund Auth., Transportation System Bonds, Current Interest Bonds, Series 2006-A, 5.25% 2019		1,000		1,092
Transportation Trust Fund Auth., Transportation System Bonds, Current Interest Bonds, Series A, 0% 2039		12,000		1,694
				56,292
NEW MEXICO — 0.66%
Dona Ana County, Improvement Dist. Bonds (Santa Teresa Improvement Dist.-Airport Road Business Center, Phase III),
Series 2001-A, 8.375% 2021		1,835		1,688
Dona Ana County, Improvement Dist. Bonds (Santa Teresa Improvement Dist.-Border Industrial Park, Phase I & II),
Series 2001-B, 8.875% 2021		4,655		4,438
Mortgage Fin. Auth., Single-family Mortgage Program Bonds, Series 2002-C, AMT, 5.82% 2033		1,060		1,078
Mortgage Fin. Auth., Single-family Mortgage Program Bonds, Series 2008-C, Class I, AMT, 6.95% 2039		2,695		2,874
Sandoval County, Incentive Payment Rev. Ref. Bonds, Series 2005, 5.00% 2020		3,500		3,646
				13,724
NEW YORK — 3.30%
Dormitory Auth., Third General Resolution Rev. Bonds (State University Educational Facs. Issue),
Series 2002-B, 6.00% 2029 (put 2012)		2,000		2,181
Housing Fin. Agcy., Service Contract Obligation Rev. Ref. Bonds, Series 1997-C, 5.10% 2009		800		804
Long Island Power Auth., Electric System General Rev. Bonds, Series 2003-C, CIFG insured, 5.25% 2029		6,000		6,165
Metropolitan Transportation Auth., Dedicated Tax Fund Bonds, Series 2009-B, 5.25% 2022		1,915		2,068
Metropolitan Transportation Auth., Dedicated Tax Fund Bonds, Series 2009-B, 5.25% 2029		1,000		1,033
Metropolitan Transportation Auth., Dedicated Tax Fund Bonds, Series 2009-B, 5.25% 2030		1,000		1,030
Metropolitan Transportation Auth., Transportation Rev. Bonds, Series 2003-B, FGIC-National insured, 5.25% 2021		3,500		3,671
Mortgage Agcy., Homeowner Mortgage Rev. Bonds, Series 133, AMT, 6.00% 2032		800		822
New York City Housing Dev. Corp., Multi-family Housing Rev. Bonds, Series 2006-C, AMT, 5.00% 2026		1,250		1,199
New York City Housing Dev. Corp., Multi-family Housing Rev. Bonds, Series 2007-B-1, AMT, 5.05% 2022		1,500		1,510
New York City Housing Dev. Corp., Multi-family Housing Rev. Bonds, Series 2007-B-1, AMT, 5.125% 2032		1,000		946
New York City Housing Dev. Corp., Multi-family Housing Rev. Bonds, Series 2007-B-1, AMT, 5.15% 2037		500		474
New York City Industrial Dev. Agcy., Liberty Rev. Bonds (7 World Trade Center, LLC Project), Series A, 6.25% 2015		9,000		7,890
New York City Industrial Dev. Agcy., Liberty Rev. Bonds (7 World Trade Center, LLC Project), Series A, 6.50% 2035		2,000		1,447
New York City Industrial Dev. Agcy., Rev. Bonds (Brooklyn Navy Yard Cogeneration Partners, LP Project),
Series 1997, AMT, 6.20% 2022		2,835		2,317
New York City Industrial Dev. Agcy., Special Fac. Rev. Bonds
(American Airlines, Inc. John F. Kennedy International Airport Project), Series 2005, AMT, 7.625% 2025		8,000		6,325
New York City Industrial Dev. Agcy., Special Fac. Rev. Bonds
(American Airlines, Inc. John F. Kennedy International Airport Project), Series 2005, AMT, 8.00% 2028		2,000		1,604
New York City Industrial Dev. Agcy., Special Fac. Rev. Bonds (Terminal One Group Assn., LP Project),
Series 2005, AMT, 5.00% 2013		3,000		3,029
New York City Industrial Dev. Agcy., Special Fac. Rev. Bonds (Terminal One Group Assn., LP Project),
Series 2005, AMT, 5.50% 2014		1,535		1,558
New York City Industrial Dev. Agcy., Special Fac. Rev. Bonds (Terminal One Group Assn., LP Project),
Series 2005, AMT, 5.50% 2015		4,500		4,538
New York City Industrial Dev. Agcy., Special Fac. Rev. Bonds (Terminal One Group Assn., LP Project),
Series 2005, AMT, 5.50% 2016		2,000		2,012
New York City Industrial Dev. Agcy., Special Fac. Rev. Bonds (Terminal One Group Assn., LP Project),
Series 2005, AMT, 5.50% 2020		2,000		1,958
New York City Municipal Water Fin. Auth., Water and Sewer System General Resolution Rev. Bonds,
Fiscal Series 2009-EE, 5.00% 2018		3,000		3,398
New York City Transitional Fin. Auth., Building Aid Rev. Bonds, Fiscal 2009 Series S-5, 5.25% 2022		2,500		2,666
Seneca Nation of Indians, Rev. Bonds, Series A, 5.00% 20232		2,685		2,011
Suffolk County Industrial Dev. Agcy., Continuing Care Retirement Community Rev. Bonds
(Peconic Landing at Southold, Inc. Project), Series 2000-A, 8.00% 2030		2,000		2,015
Urban Dev. Corp., Service Contract Rev. Ref. Bonds, Series 2008-D, 5.25% 2021		4,190		4,439
				69,110
NORTH CAROLINA — 0.62%
Eastern Municipal Power Agcy., Power System Rev. Ref. Bonds, Series 1993-B, 6.00% 2026		1,000		1,095
Eastern Municipal Power Agcy., Power System Rev. Ref. Bonds, Series 2003-C, 5.125% 2014		2,000		2,100
Eastern Municipal Power Agcy., Power System Rev. Ref. Bonds, Series 2003-C, 5.375% 2017		1,500		1,552
Eastern Municipal Power Agcy., Power System Rev. Ref. Bonds, Series 2003-D, 5.50% 2014		1,750		1,888
Housing Fin. Agcy., Home Ownership Rev. Bonds, Series 23-A, AMT, 5.00% 2036		3,660		3,702
Housing Fin. Agcy., Home Ownership Rev. Bonds, Series 30-A, AMT, 5.50% 2039		975		998
Medical Care Commission, Retirement Facs. First Mortgage Rev. Bonds (Carolina Village Project),
Series 2008-A, 6.00% 2038		2,230		1,593
				12,928
NORTH DAKOTA — 0.01%
Housing Fin. Agcy., Rev. Bonds, Series 1998-A, AMT, 5.25% 2018		140		142
OHIO — 3.52%
Ohio Air Quality Dev. Auth., Pollution Control Rev. Ref. Bonds (FirstEnergy Generation Corp. Project),
Series 2009-A, 5.70% 2014		4,000		4,212
Ohio Air Quality Dev. Auth., Pollution Control Rev. Ref. Bonds (FirstEnergy Generation Corp. Project),
Series 2009-C, 5.625% 2018		8,580		8,770
Ohio Air Quality Dev. Auth., Pollution Control Rev. Ref. Bonds (FirstEnergy Nuclear Generation Corp. Project),
Series 2009-A, 5.75% 2033 (put 2016)		6,100		6,364
Buckeye Tobacco Settlement Fncg. Auth., Tobacco Settlement Asset-backed Bonds, Current Interest Bonds,
Series 2007-A-2, 5.125% 2024		2,730		2,249
Buckeye Tobacco Settlement Fncg. Auth., Tobacco Settlement Asset-Backed Bonds, Current Interest Bonds,
Series 2007-A-2, 5.375% 2024		2,000		1,677
Buckeye Tobacco Settlement Fncg. Auth., Tobacco Settlement Asset-backed Bonds, Current Interest Bonds,
Series 2007-A-2, 5.875% 2030		23,145		16,306
City of Centerville, Health Care Rev. Bonds (Bethany Lutheran Village Continuing Care Fac. Expansion Project),
Series 2007-A, 6.00% 2038		1,000		716
City of Cleveland, Airport Special Rev. Bonds (Continental Airlines, Inc. Project), Series 1999, AMT, 5.70% 2019		1,500		1,030
County of Hamilton, Healthcare Rev. Ref. Bonds (Life Enriching Communities Project), Series 2006-A, 5.00% 2015		1,520		1,430
County of Hamilton, Healthcare Rev. Ref. Bonds (Life Enriching Communities Project), Series 2006-A, 5.00% 2016		1,685		1,565
County of Hamilton, Healthcare Rev. Ref. Bonds (Life Enriching Communities Project), Series 2006-A, 5.00% 2037		4,500		3,201
Hospital Rev. Bonds (University Hospitals Health System, Inc. Project), Series 2007-A, 4.50% 2031		2,000		1,578
Housing Fin. Agcy., Residential Mortgage Rev. Bonds, Series 2005-A, AMT, 4.20% 2014		1,005		1,017
Housing Fin. Agcy., Residential Mortgage Rev. Bonds, Series 2005-A, AMT, 4.30% 2015		1,080		1,083
Housing Fin. Agcy., Residential Mortgage Rev. Bonds, Series 2006-A, AMT, 5.50% 2036		1,920		1,928
Housing Fin. Agcy., Residential Mortgage Rev. Bonds, Series 2006-E, AMT, 5.375% 2037		4,000		4,002
County of Lake, Hospital Facs. Rev. Ref. Bonds (Lake Hospital System, Inc.), Series 2008-C, 5.50% 2024		4,500		4,153
County of Lake, Hospital Facs. Rev. Ref. Bonds (Lake Hospital System, Inc.), Series 2008-C, 5.625% 2029		2,000		1,799
County of Lorain, Hospital Facs. Rev. Bonds (Catholic Healthcare Partners), Series 2002-A, 5.50% 2013		1,075		1,133
County of Miami, Hospital Facs. Rev. Ref. and Improvement Bonds (Upper Valley Medical Center),
Series 2006, 5.25% 2018		1,020		966
County of Montgomery, Hospital Facs. Rev. Bonds (Kettering Medical Center Network Obligated Group),
Series 1999, 6.75% 2022 (preref. 2010)		1,000		1,052
County of Richland, Hospital Facs. Rev. Improvement Bonds (MedCentral Health System Obligated Group),
Series 2000-B, 6.375% 2022		335		341
County of Richland, Hospital Facs. Rev. Improvement Bonds (MedCentral Health System Obligated Group),
Series 2000-B, 6.375% 2030		585		589
County of Richland, Hospital Facs. Rev. Improvement Bonds (MedCentral Health System Obligated Group),
Series 2000-B, 6.375% 2022 (preref. 2010)		665		719
Water Dev. Auth., Solid Waste Disposal Rev. Bonds (Bay Shore Power Project), Series 1998-A, AMT, 5.875% 2020		3,200		2,587
Water Dev. Auth., Solid Waste Rev. Bonds (Allied Waste North America, Inc. Project), Series 2007-A, AMT, 5.15% 2015		3,500		3,369
				73,836
OKLAHOMA — 0.37%
Cherokee Nation, Health Care System Bonds, Series 2006, ACA insured, 4.30% 20162		1,125		1,051
Cherokee Nation, Health Care System Bonds, Series 2006, ACA insured, 4.60% 20212		1,500		1,331
Dev. Fin. Auth., Student Housing Rev. Bonds (Seminole State College Project), Series 2006, 5.125% 2036		650		459
Housing Fin. Agcy., Single-family Mortgage Rev. Bonds (Homeownership Loan Program),
Series 1999-D-2, AMT, 7.10% 2026		905		921
Housing Fin. Agcy., Single-family Mortgage Rev. Bonds (Homeownership Loan Program),
Series 2008-A, AMT, 6.80% 2038		2,000		2,122
Langston Econ. Dev. Auth., Rev. Bonds (Langston University Student Housing/LDF Student Housing, LLC Project),
Series 2006-A, ACA insured, 4.75% 2021		500		413
Tulsa Industrial Auth., Rev. Ref. Bonds (University of Tulsa), Series 2009, 6.00% 2027		1,285		1,365
				7,662
OREGON — 0.48%
Cow Creek Band of Umpqua Tribe of Indians, Tax-Exempt Tax Rev. Bonds, Series 2006-C, 5.625% 2026		8,165		5,566
Gilliam County, Demand Solid Waste Disposal Rev. Bonds (Waste Management, Inc. Project),
Series 2002, AMT, 5.25% 2029		5,000		4,442
				10,008
PENNSYLVANIA — 3.08%
Allegheny County Airport Auth., Airport Rev. Bonds (Pittsburgh International Airport), Ref.
Series 2002-B, AMT, FGIC insured, 5.00% 2017		2,500		2,349
Allegheny County Hospital Dev. Auth., Health System Rev. Bonds (West Penn Allegheny Health System),
Series 2007-A, 5.00% 2012		1,915		1,774
Allegheny County Hospital Dev. Auth., Health System Rev. Bonds (West Penn Allegheny Health System),
Series 2007-A, 5.00% 2013		3,000		2,706
Allegheny County Hospital Dev. Auth., Health System Rev. Bonds (West Penn Allegheny Health System),
Series 2007-A, 5.00% 2017		6,500		5,395
Allegheny County Hospital Dev. Auth., Health System Rev. Bonds (West Penn Allegheny Health System),
Series 2007-A, 5.00% 2028		5,500		3,529
Allegheny County Hospital Dev. Auth., University of Pittsburgh Medical Center Rev. Bonds, 5.00% 2020		3,000		3,005
Bucks County Industrial Dev. Auth., Retirement Community Rev. Bonds (Ann’s Choice, Inc. Fac.),
Series 2005-A, 6.125% 2025		2,815		2,314
Bucks County Industrial Dev. Auth., Retirement Community Rev. Bonds (Ann’s Choice, Inc. Fac.),
Series 2005-A, 6.25% 2035		2,750		2,079
Cumberland County Municipal Auth., Rev Bonds (Presbyterian Homes Obligated Group Project),
Series 2008-A, 5.00% 2012		1,040		1,031
Econ. Dev. Fncg. Auth., Exempt Facs. Rev. Bonds (Allegheny Energy Supply Company, LLC Project),
Series 2009, 7.00% 2039		5,500		5,598
Econ. Dev. Fncg. Auth., Solid Waste Disposal Rev. Bonds (Waste Management, Inc. Project),
Series 2005-A, AMT, 5.10% 2027		1,500		1,324
Harrisburg Auth. (Dauphin County), University Rev. Bonds (Harrisburg University of Science and Technology Project),
Series 2007-A, 5.40% 2016		730		708
Harrisburg Auth. (Dauphin County), University Rev. Bonds (Harrisburg University of Science and Technology Project),
Series 2007-B, 6.00% 2036		3,250		2,587
Higher Educational Facs. Auth., Rev. Bonds (Edinboro University Foundation Student Housing Project),
Series 2008, 5.875% 2038		1,000		863
Higher Educational Facs. Auth., Rev. Bonds (Edinboro University Foundation Student Housing Project),
Series 2008, 6.00% 2042		1,000		868
Higher Educational Facs. Auth., Rev. Bonds (State University System), Series AJ, 5.00% 2020		1,000		1,116
Housing Fin. Agcy., Single-family Mortgage Rev. Bonds, Series 2006-93-A, AMT, 5.75% 2037		2,865		2,906
Lehigh County, General Purpose Auth. Rev. Bonds (KidsPeace Obligated Group), Series 1998, ACA insured, 5.70% 2009		290		288
McKean County Hospital Auth., Hospital Rev. Bonds (Bradford Hospital Project), Series 2005, ACA insured, 5.00% 2016		1,000		834
Montgomery County Industrial Dev. Auth., Mortgage Rev. Bonds
(Whitemarsh Continuing Care Retirement Community Project), Series 2005, 6.00% 2021		1,000		737
Montgomery County Industrial Dev. Auth., Mortgage Rev. Bonds
(Whitemarsh Continuing Care Retirement Community Project), Series 2005, 6.125% 2028		2,000		1,353
Montgomery County Industrial Dev. Auth., Mortgage Rev. Bonds
(Whitemarsh Continuing Care Retirement Community Project), Series 2005, 6.25% 2035		3,000		1,971
Montgomery County Industrial Dev. Auth., Mortgage Rev. Bonds
(Whitemarsh Continuing Care Retirement Community Project), Series 2008, 7.00% 2036		2,000		1,430
Montgomery County Industrial Dev. Auth., Retirement Communities Rev. Ref. Bonds
(ACTS Retirement — Life Communities, Inc. Obligated Group), Series 2006-B, 5.00% 2015		1,000		1,002
Montgomery County Industrial Dev. Auth., Retirement Communities Rev. Ref. Bonds
(ACTS Retirement — Life Communities, Inc. Obligated Group), Series 2006-B, 5.00% 2022		2,610		2,411
Montgomery County Industrial Dev. Auth., Retirement Communities Rev. Ref. Bonds
(ACTS Retirement — Life Communities, Inc. Obligated Group), Series A-1, 6.25% 2029		725		734
City of Philadelphia, Water and Wastewater Rev. Bonds, Series 2009-A, 5.25% 2023		1,000		1,034
City of Philadelphia, Water and Wastewater Rev. Bonds, Series 2009-A, 5.25% 2024		1,500		1,546
City of Philadelphia, Water and Wastewater Rev. Bonds, Series 2009-A, 5.25% 2036		1,000		975
Hospitals and Higher Education Facs. Auth. of Philadelphia, Hospital Rev. Bonds
(Temple University Health System Obligated Group), Series 2005-A, 6.625% 2023		1,000		987
Hospitals and Higher Education Facs. Auth. of Philadelphia, Hospital Rev. Ref. Bonds (Temple University Hospital),
Series 2007-B, 5.00% 2017		4,000		3,736
Philadelphia Auth. for Industrial Dev., Rev. Bonds (Cathedral Village Project), Series 1998, 5.50% 2010		350		350
University of Pittsburgh- of the Commonwealth System of Higher Education, University Capital Project Bonds,
Series 2009-B, 5.00% 2028		1,000		1,039
Redev. Auth. of the County of Washington, Redev. Bonds (Victory Centre Project — Tanger Outlet Dev.),
Series 2006-A, 5.45% 2035		3,070		1,807
Westmoreland County Industrial Dev. Auth., Retirement Community Rev. Bonds
(Redstone Presbyterian SeniorCare Obligated Group), Series 2005-A, 5.50% 2015		1,200		1,108
Westmoreland County Industrial Dev. Auth., Retirement Community Rev. Bonds
(Redstone Presbyterian SeniorCare Obligated Group), Series 2005-A, 5.875% 2032		1,400		1,018
				64,512
PUERTO RICO — 0.41%
Government Dev. Bank, Series 2006-C, AMT, 5.25% 2015		4,025		4,091
Public Buildings Auth., Government Facs. Rev. Ref. Bonds, Series M-2, 5.75% 2034 (put 2017)		1,000		1,037
Public Buildings Auth., Government Facs. Rev. Ref. Bonds, Series N, 5.25% 2016		1,760		1,738
Sales Tax Fncg. Corp., Sales Tax Rev. Bonds, Series 2007-A, AMBAC insured, 0% 2054		20,000		1,037
Sales Tax Fncg. Corp., Sales Tax Rev. Bonds, Series 2007-A, FGIC-National insured, 0% 2040		5,000		689
				8,592
RHODE ISLAND — 0.14%
Health and Educational Building Corp., Hospital Fncg. Rev. Bonds (Lifespan Obligated Group Issue),
Series 2002, 6.375% 2021		130		133
Health and Educational Building Corp., Hospital Fncg. Rev. Bonds (Lifespan Obligated Group Issue),
Series 2002, 6.375% 2021 (preref. 2012)		870		989
Housing and Mortgage Fin. Corp., Homeownership Opportunity Bonds, Series 55-B, AMT, 4.55% 2022		2,000		1,876
				2,998
SOUTH CAROLINA — 1.24%
Jobs-Econ. Dev. Auth., First Mortgage Health Facs. Rev. Ref. Bonds (Wesley Commons Project),
Series 2006, 5.00% 2016		2,765		2,449
Jobs-Econ. Dev. Auth., First Mortgage Health Facs. Rev. Ref. Bonds (Wesley Commons Project),
Series 2006, 5.125% 2026		2,000		1,413
Jobs-Econ. Dev. Auth., First Mortgage Health Facs. Rev. Ref. Bonds (Wesley Commons Project),
Series 2006, 5.30% 2036		2,015		1,303
Jobs-Econ. Dev. Auth., Hospital Rev. Bonds (Georgetown Memorial Hospital), Series 1998, 5.75% 2010		1,345		1,367
City of Myrtle Beach, Tax Increment Bonds (Myrtle Beach Air Force Base Redev. Project Area),
Series 2006-A, 5.25% 2026		2,000		1,287
City of Myrtle Beach, Tax Increment Bonds (Myrtle Beach Air Force Base Redev. Project Area),
Series 2006-A, 5.30% 2035		2,750		1,563
Piedmont Municipal Power Agcy., Electric Rev. Ref. Bonds, Series 1999-A, 5.25% 2015		3,500		3,538
Public Service Auth., Rev. Obligations (Santee Cooper), Series 2008-A, 5.375% 2028		2,850		3,042
Tobacco Settlement Rev. Management Auth., Tobacco Settlement Asset-backed Bonds,
Series 2001-B, 6.00% 2022 (preref. 2012)		1,315		1,384
Tobacco Settlement Rev. Management Auth., Tobacco Settlement Asset-backed Ref. Bonds, Series 2008, 5.00% 2018		2,180		2,180
SCAGO Educational Facs. Corp. for Union School Dist., Installment Purchase Rev. Bonds
(School Dist. of Union County Project), Series 2006, RADIAN insured, 5.00% 2021		2,000		1,891
County of York, Pollution Control Rev. Ref. Bonds (North Carolina Electric Membership Corp. Project),
Series 2000-B-1, 4.00% 2024		4,500		4,468
				25,885
SOUTH DAKOTA — 0.05%
Education Loans Inc., Student Loan Asset-backed Callable Notes, Series 1998-1, AMT, 4.95% 2010		1,065		1,084
TENNESSEE — 1.68%
Health, Educational and Housing Fac. Board of the City of Chattanooga, Rev. Ref. Bonds (CDFI Phase I, LLC Project),
Series 2005-A, 5.00% 2015		2,505		2,337
Natural Gas Acquisition Corp. of the City of Clarksville, Gas Rev. Bonds, Series 2006, 5.00% 2016		2,500		2,310
Natural Gas Acquisition Corp. of the City of Clarksville, Gas Rev. Bonds, Series 2006, 5.00% 2018		1,600		1,443
Natural Gas Acquisition Corp. of the City of Clarksville, Gas Rev. Bonds, Series 2006, 5.00% 2019		2,000		1,778
Housing Dev. Agcy., Homeownership Program Bonds, Issue 2006-1, AMT, 5.75% 2036		2,600		2,638
Knox County Health, Educational and Housing Facs. Board, Fort Sanders Alliance Obligated Group Hospital Rev. Bonds,
Series 1990-A, National insured, 6.25% 2013		1,000		1,053
Health, Educational and Housing Facs. Board of the County of Sullivan, Hospital Rev. Bonds
(Wellmont Health System Project), Series 2002, 6.25% 2022 (preref. 2012)		1,220		1,401
Health, Educational and Housing Facs. Board of the County of Sullivan, Hospital Rev. Bonds
(Wellmont Health System Project), Series 2002, 6.25% 2022 (preref. 2012)		730		838
Health, Educational and Housing Facs. Board of the County of Sullivan, Hospital Rev. Ref. Bonds
(Wellmont Health System Project), Series 2003, RADIAN insured, 5.00% 2013		2,000		1,994
Tennessee Energy Acquisition Corp., Gas Project Rev. Bonds, Series 2006-A, 5.25% 2019		5,000		4,804
Tennessee Energy Acquisition Corp., Gas Project Rev. Bonds, Series 2006-C, 5.00% 2016		5,000		5,050
Tennessee Energy Acquisition Corp., Gas Project Rev. Bonds, Series 2006-C, 5.00% 2019		645		612
Tennessee Energy Acquisition Corp., Gas Project Rev. Bonds, Series 2006-C, 5.00% 2020		790		735
Tennessee Energy Acquisition Corp., Gas Project Rev. Bonds, Series 2006-C, 5.00% 2021		2,500		2,301
Tennessee Energy Acquisition Corp., Gas Project Rev. Bonds, Series 2006-C, 5.00% 2025		2,500		2,197
Tennessee Energy Acquisition Corp., Gas Project Rev. Bonds, Series 2006-C, 5.00% 2027		4,390		3,807
				35,298
TEXAS — 6.88%
Alliance Airport Auth., Inc., Special Facs. Rev. Bonds (American Airlines, Inc. Project), Series 1990, AMT, 7.00% 2011		2,500		1,406
Alliance Airport Auth., Inc., Special Facs. Rev. Ref. Bonds (American Airlines, Inc. Project),
Series 2007, AMT, 5.25% 2029		2,000		684
Dallas-Fort Worth International Airport Fac. Improvement Corp., American Airlines, Inc. Rev. Bonds,
Series 1999, AMT, 6.375% 2035		6,000		2,231
Dallas-Fort Worth International Airport Fac. Improvement Corp., American Airlines, Inc. Rev. Bonds,
Series 2002, AMT, 8.25% 2036		4,580		1,932
Dallas-Fort Worth International Airport Fac. Improvement Corp., American Airlines, Inc. Rev. Ref. Bonds,
Series 2000-A, AMT, 9.125% 2029		5,000		2,310
Dallas-Fort Worth International Airport Fac. Improvement Corp., American Airlines, Inc. Rev. Ref. Bonds,
Series 2000-A, Subseries 2, AMT, 9.00% 2029 (put 2015)		5,655		2,782
Dallas-Fort Worth International Airport Fac. Improvement Corp., American Airlines, Inc. Rev. Ref. Bonds,
Series 2007, AMT, 5.50% 2030		6,000		2,112
Angelina and Neches River Auth., Solid Waste Disposal Rev. Ref. Bonds (International Paper Co. Projects),
Series 2003-A, AMT, 5.375% 2015		5,000		4,684
Brazos River Auth., Pollution Control Rev. Ref. Bonds (TXU Electric Co. Project),
Series 2001-C, AMT, 5.75% 2036 (put 2011)		11,680		9,068
Sabine River Auth., Pollution Control Rev. Ref. Bonds (TXU Electric Co. Project),
Series 2001-B, AMT, 5.75% 2030 (put 2011)		3,745		2,907
Brazos River Auth., Rev. Ref. Bonds (Reliant Energy, Inc. Project), Series 1999-A, 5.375% 2019		3,000		2,952
HFDC of Central Texas, Inc., Retirement Fac. Rev. Bonds (Legacy at Willow Bend Project), Series 2006-A, 5.25% 2014		1,195		1,108
HFDC of Central Texas, Inc., Retirement Fac. Rev. Bonds (Legacy at Willow Bend Project), Series 2006-A, 5.625% 2026		1,000		726
HFDC of Central Texas, Inc., Retirement Fac. Rev. Bonds (Village at Gleannloch Farms, Inc. Project),
Series 2006-A, 5.50% 2027		1,150		876
HFDC of Central Texas, Inc., Retirement Fac. Rev. Bonds (Village at Gleannloch Farms, Inc. Project),
Series 2006-A, 5.50% 2037		1,850		1,242
Cities of Dallas and Fort Worth, Dallas/Fort Worth International Airport, Joint Rev. Improvement and Ref. Bonds,
Series 2001-A, AMT, FGIC-National insured, 5.625% 2011		1,000		1,053
Cities of Dallas and Fort Worth, Dallas/Fort Worth International Airport, Joint Rev. Improvement and Ref. Bonds,
Series 2001-A, AMT, FGIC-National insured, 5.75% 2015		1,185		1,239
G.O. Bonds (Veterans’ Housing Assistance Program), Fund II Series 2001-A-1, AMT, 4.85% 2014		1,460		1,549
Gulf Coast Waste Disposal Auth., Solid Waste Disposal Rev. Bonds,
(Waste Management of Texas, Inc. Brazoria County Project), Series 2003-A, AMT, 5.20% 2028		2,000		1,759
Gulf Coast Waste Disposal Auth., Solid Waste Disposal Rev. Bonds,
(Waste Management of Texas, Inc. Travis County Project), Series 2003-C, AMT, 5.20% 2028		1,500		1,319
Mission Econ. Dev. Corp., Solid Waste Disposal Rev. Bonds (Waste Management, Inc. Project),
Series 2008, AMT, 6.00% 2020 (put 2013)		2,500		2,589
Harris County Health Facs. Dev. Corp., Hospital Rev. Bonds (Memorial Hermann Healthcare System),
Series 2004-A, 5.25% 2015		1,000		1,030
Harris County Health Facs. Dev. Corp., Hospital Rev. Ref. Bonds (Memorial Hermann Healthcare System),
Series 2008-B, 7.25% 2035		3,500		3,796
Harris County Health Facs. Dev. Corp., Rev. Bonds (CHRISTUS Health), Series 2005-A-4, FSA insured, 2.43% 20311		3,100		3,100
Hidalgo County Health Services Corp., Hospital Rev. Bonds (Mission Hospital, Inc. Project), Series 2005, 5.00% 2012		1,315		1,288
Hidalgo County Health Services Corp., Hospital Rev. Bonds (Mission Hospital, Inc. Project), Series 2008, 5.00% 2026		1,000		768
City of Houston, Airport System Rev. Ref. Bonds, Series 2001-A, AMT, FGIC-National insured, 5.50% 2015		2,855		2,925
City of Houston, Airport System Rev. Ref. Bonds, Series A, 5.50% 2034		5,500		5,412
City of Houston, Airport System Rev. Ref. Bonds, Series A, 5.50% 2039		2,000		1,951
City of Houston, Airport System Special Facs. Rev. Bonds (Continental Airlines, Inc. Terminal E Project),
Series 2001, AMT, 6.75% 2029		3,000		2,233
Port of Houston Auth. of Harris County, Unlimited Tax Forward Ref. Bonds,
Series 2006-A, AMT, National insured, 5.00% 2015		1,000		1,071
Lewisville Independent School Dist. (Denton County), Unlimited Tax School Building Bonds, Series 2009, 5.00% 2028		1,000		1,032
Lubbock Educational Facs. Auth., Inc., Ref. and Improvement Rev. Bonds (Lubbock Christian University),
Series 2007, 5.125% 2027		2,500		2,145
Lubbock Educational Facs. Auth., Inc., Ref. and Improvement Rev. Bonds (Lubbock Christian University),
Series 2007, 5.25% 2037		1,000		798
Matagorda County Navigation Dist. Number One, Pollution Control Rev. Ref. Bonds (AEP Texas Central Co. Project),
Series 2005-B, AMT, AMBAC insured, 4.55% 2030		4,000		2,974
Midlothian Dev. Auth., Tax Increment Contract Rev. Ref. Bonds, Series 2007-B, 5.125% 2026		920		644
Mission Econ. Dev. Corp., Solid Waste Disposal Rev. Bonds (Allied Waste North America, Inc. Project),
Series 2007-A, AMT, 5.20% 2018		15,300		14,525
Municipal Gas Acquisition and Supply Corp. I, Gas Supply Rev. Bonds, Series 2006-A, 5.00% 2016		1,000		924
Municipal Gas Acquisition and Supply Corp. I, Gas Supply Rev. Bonds, Series 2006-A, 5.25% 2017		2,500		2,319
Municipal Gas Acquisition and Supply Corp. I, Gas Supply Rev. Bonds, Series 2006-A, 5.25% 2018		2,000		1,838
Municipal Gas Acquisition and Supply Corp. I, Gas Supply Rev. Bonds, Series 2006-A, 5.25% 2020		6,500		5,834
Municipal Gas Acquisition and Supply Corp. I, Gas Supply Rev. Bonds, Series 2006-A, 5.25% 2025		1,000		867
North Texas Tollway Auth. System, Rev. Ref. Bonds, Series 2008-F, 5.75% 2033		4,000		3,880
North Texas Tollway Auth. System, Rev. Ref. Bonds, Series 2008-F, 5.75% 2038		8,000		7,665
North Texas Tollway Auth. System, Rev. Ref. Bonds, Current Interest Bonds, Series 2008-A, 5.625% 2033		4,000		3,921
North Texas Tollway Auth. System, Rev. Ref. Bonds, Current Interest Bonds, Series 2008-A, 6.00% 2021		1,000		1,076
North Texas Tollway Auth. System, Rev. Ref. Bonds, Insured Capital Appreciation Bonds,
Series 2008-D, ASSURED GUARANTY insured, 0% 2028		10,000		3,289
SA Energy Acquisition Public Fac. Corp., Gas Supply Rev. Bonds, Series 2007, 5.25% 2017		485		480
SA Energy Acquisition Public Fac. Corp., Gas Supply Rev. Bonds, Series 2007, 5.50% 2019		3,000		2,942
SA Energy Acquisition Public Fac. Corp., Gas Supply Rev. Bonds, Series 2007, 5.50% 2023		1,485		1,394
Sam Rayburn Municipal Power Agcy., Power Supply System Rev. Ref. Bonds, Series 2002, 6.00% 2021		750		761
Sam Rayburn Municipal Power Agcy., Power Supply System Rev. Ref. Bonds, Series 2002, RADIAN insured, 5.125% 2017		2,000		1,993
City of San Antonio, Airport System Rev. Improvement Bonds, Series 2002, AMT, FGIC-National insured, 5.75% 2016		1,000		1,023
San Leanna Education Facs. Corp., Higher Education Rev. Bonds (Saint Edward’s University Project),
Series 2007, 5.00% 2020		1,000		972
Tarrant County Cultural Education Facs. Fin. Corp., Hospital Rev. Bonds (Scott and White Memorial Hospital and Scott,
Sherwood and Brindley Foundation Project), Series 2008-A, 5.00% 2019		1,370		1,369
Tarrant County Cultural Education Facs. Fin. Corp., Retirement Fac. Rev. Bonds (Buckner Retirement Services, Inc. Project),
Series 2007, 5.25% 2022		1,855		1,733
Tarrant County Cultural Education Facs. Fin. Corp., Retirement Fac. Rev. Bonds (Buckner Retirement Services, Inc. Project),
Series 2007, 5.25% 2027		1,000		883
Tarrant County Cultural Education Facs. Fin. Corp., Retirement Fac. Rev. Bonds
(Northwest Senior Housing Corp. — Edgemere Project), Series 2006-A, 6.00% 2026		2,200		1,893
Tarrant County Cultural Education Facs. Fin. Corp., Retirement Fac. Rev. Bonds
(Northwest Senior Housing Corp. — Edgemere Project), Series 2006-A, 6.00% 2036		1,500		1,190
Board of Regents of the Texas A&M University System, Rev. Fncg. System Bonds, Series B, 5.00% 2039		1,000		1,009
Tomball Hospital Auth., Hospital Rev. Ref. Bonds, Series 2005, 5.00% 2020		1,660		1,391
Travis County Health Facs. Dev. Corp., Retirement Fac. Rev. Bonds (Querencia at Barton Creek Project),
Series 2005-A, 5.65% 2035		2,000		1,324
				144,190
UTAH — 0.69%
Housing Corp., Single-family Mortgage Bonds, Series 2001-E-1, Class III, AMT, 5.20% 2018		940		910
Housing Corp., Single-family Mortgage Bonds, Series 2001-F-1, Class III, AMT, 4.95% 2018		900		904
Housing Corp., Single-family Mortgage Bonds, Series 2002-A-1, Class III, AMT, 5.30% 2018		425		421
Housing Corp., Single-family Mortgage Bonds, Series 2002-C-2, Class III, AMT, 5.25% 2018		1,465		1,447
Housing Corp., Single-family Mortgage Bonds, Series 2002-D-2, Class III, AMT, 5.00% 2018		660		665
Housing Corp., Single-family Mortgage Bonds, Series 2002-E-2, Class III, AMT, 4.95% 2019		1,280		1,221
Housing Corp., Single-family Mortgage Bonds, Series 2002-F-1, Class III, AMT, 4.625% 2019		1,015		970
Housing Corp., Single-family Mortgage Bonds, Series 2002-G-2, Class III, AMT, 4.875% 2019		900		902
Housing Corp., Single-family Mortgage Bonds, Series 2003-B-2, Class III, AMT, 4.85% 2024		1,115		1,072
Housing Corp., Single-family Mortgage Bonds, Series 2003-C, Class III, AMT, 5.00% 2025		615		594
Housing Corp., Single-family Mortgage Bonds, Series 2004-H-1, Class III, AMT, 4.75% 2027		650		599
Housing Corp., Single-family Mortgage Bonds, Series 2007-B-1, Class III, AMT, 4.85% 2027		1,015		956
Housing Fin. Agcy., Single-family Mortgage Bonds (Federally Insured or Guaranteed Mortgage Loans),
1999 Issue D, AMT, 5.60% 2013		10		10
Housing Fin. Agcy., Single-family Mortgage Bonds, Series 1997-G-2, Class III, AMT, 5.60% 2010		5		5
Housing Fin. Agcy., Single-family Mortgage Bonds, Series 1998-G-2, Class III, AMT, 4.90% 2012		30		30
Housing Fin. Agcy., Single-family Mortgage Bonds, Series 1999-B-2, Class III, AMT, 5.10% 2012		30		31
Housing Fin. Agcy., Single-family Mortgage Bonds, Series 1999-C-2, Class III, AMT, 5.60% 2013		45		46
Salt Lake County, College Rev. and Ref. Bonds (Westminster College Project), Series 2007, 5.00% 2024		1,150		1,036
Salt Lake County, College Rev. and Ref. Bonds (Westminster College Project), Series 2007, 5.00% 2027		1,190		1,038
Salt Lake County, College Rev. and Ref. Bonds (Westminster College Project), Series 2007, 5.00% 2029		1,900		1,618
				14,475
VIRGINIA — 0.62%
Celebrate Virginia South Community Dev. Auth., City of Fredericksburg, Special Assessment Rev. Bonds
(Celebrate Virginia South Project), Series 2006, 6.25% 2037		4,800		3,095
Industrial Dev. Auth. of the County of Charles City, Tax-Exempt Solid Waste Disposal Rev. Bonds
(Waste Management, Inc.), Series 2002, AMT, 6.25% 2027 (put 2012)		1,000		1,033
Fairfax County Econ. Dev. Auth., Resource Recovery Rev. Ref. Bonds, Series A, AMT, AMBAC insured, 6.10% 2011		1,500		1,559
Fairfax County Econ. Dev. Auth., Retirement Community Rev. Ref. Bonds (Greenspring Village, Inc. Fac.),
Series 2006-A, 4.75% 2026		1,000		792
Heritage Hunt Commercial Community Dev. Auth. (Prince William County), Special Assessment Bonds,
Series 1999-B, 7.00% 2029		830		702
Community Dev. Auth. of Loudoun County, Special Assessment Bonds (Dulles Town Center Project),
Series 1998, 6.25% 2026		3,820		2,820
Peninsula Town Center Community Dev. Auth., Special Obligation Bonds, Series 2007, 6.45% 2037		2,550		1,866
Rector and Visitors of the University of Virginia, General Rev. Pledge Bonds, Series 2008, 5.00% 2040		1,000		1,022
				12,889
VIRGIN ISLANDS — 0.22%
Public Fin. Auth., Rev. and Ref. Bonds (Matching Fund Loan Notes), Series A, 6.625% 2029		2,500		2,521
Public Fin. Auth., Rev. and Ref. Bonds (Matching Fund Loan Notes), Series A, 6.75% 2019		1,000		1,047
Public Fin. Auth., Rev. Bonds (Matching Fund Loan Notes), Series 2004-A, 5.25% 2015		1,000		1,006
				4,574
WASHINGTON — 1.23%
Various Purpose G.O. Bonds, Series 2009-C, 5.00% 2029		4,000		4,182
Health Care Facs. Auth., Rev. Bonds (Virginia Mason Medical Center), Series 2007-A, 6.125% 2037		8,000		6,679
Housing Fin. Commission, Nonprofit Rev. Bonds (Skyline at First Hill Project), Series 2007-A, 5.625% 2027		5,500		4,000
Housing Fin. Commission, Nonprofit Rev. Bonds (Skyline at First Hill Project), Series 2007-A, 5.625% 2038		3,000		1,920
Housing Fin. Commission, Single-family Program Bonds, Series 2007-2A, AMT, 4.50% 2021		4,730		4,522
Housing Auth. of the City of Seattle, Capital Fund Program Rev. Bonds (High Rise Rehabilitation Program — Phase II),
Series 2006, AMT, FSA insured, 4.55% 2025		3,915		3,456
Port of Seattle, Rev. Bonds, Series 1999-B, AMT, FGIC-National insured, 5.50% 2012		1,000		1,071
				25,830
WEST VIRGINIA — 0.38%
County Commission of Harrison County, Solid Waste Disposal Rev. Ref. Bonds
(Allegheny Energy Supply Co., LLC Harrison Station Project), Series 2007-D, AMT, 5.50% 2037		5,000		4,266
County Commission of Ohio County, Tax-Exempt Commercial Dev. Improvement and Rev. Ref. Bonds
(Wheeling Jesuit University, Inc. Project), Series 2006-A, 5.50% 2036		5,200		3,620
				7,886
WISCONSIN — 1.16%
Badger Tobacco Asset Securitization Corp., Tobacco Settlement Asset-backed Bonds, 5.50% 2010 (escrowed to maturity)		750		780
Badger Tobacco Asset Securitization Corp., Tobacco Settlement Asset-backed Bonds, 5.75% 2012 (escrowed to maturity)		1,500		1,673
Badger Tobacco Asset Securitization Corp., Tobacco Settlement Asset-backed Bonds, 6.125% 2027 (preref. 2012)		9,505		10,339
City of Franklin, Regional Solid Waste Fin. Commission, Demand Solid Waste Disposal Rev. Bonds
(Waste Management of Wisconsin, Inc. Project), Series 2003-A, AMT, 4.95% 2016		2,250		2,115
City of Franklin, Solid Waste Disposal Rev. Bonds (Waste Management of Wisconsin, Inc. Project),
Series 2006-A, AMT, 4.95% 2016 (put 2016)		2,500		2,395
General Fund Annual Appropriation Bonds, Series 2009-A, 5.75% 2033		2,000		2,110
General Fund Annual Appropriation Bonds, Series 2009-A, 6.00% 2036		1,500		1,600
Health and Educational Facs. Auth., Rev. Bonds (Froedtert & Community Health Obligated Group),
Series 2001, 5.625% 2013		90		98
Health and Educational Facs. Auth., Rev. Bonds (Wheaton Franciscan Healthcare System), Series 2006-A, 5.25% 2019		2,500		2,303
Health and Educational Facs. Auth., Rev. Ref. Bonds (Milwaukee Catholic Home, Inc.), Series 2006, 5.00% 2026		1,000		869
				24,282
MULTI-STATE — 0.44%
MuniMae TE Bond Subsidiary, LLC, Series A, AMT, 7.50% cumulative preferred (undated)2		2,000		1,620
MuniMae TE Bond Subsidiary, LLC, Series A-2, AMT, 4.90% cumulative preferred (undated)2		4,000		3,011
MuniMae TE Bond Subsidiary, LLC, Series A-3, AMT, 4.95% cumulative preferred (undated)2		4,000		3,011
MuniMae TE Bond Subsidiary, LLC, Series A-4, AMT, 5.125% cumulative preferred (undated)2		2,000		1,506
				9,148
Total bonds & notes (cost: $2,220,700,000)				1,899,676
Short-term securities — 8.60%
Industrial Dev. Auth. of the County of Pima, Arizona, Industrial Dev. Rev. Bonds (Tucson Electric Power Co. Project),
Series 2008-B, 0.36% 20291		1,400		1,400
Health Facs. Fncg. Auth., Insured Rev. Bonds (Southern California Presbyterian Homes),
Series 1998, National insured, 6.00% 20281		2,935		2,935
Community Redev. Agcy. of the City of Los Angeles, California, Multi-family Housing Rev. Bonds
(Wilshire Station Apartments), Series 2003-A, AMT, 0.43% 20381		3,500		3,500
Santa Clara County, California, Fncg. Auth., Rev. Bonds (El Camino Hospital), Series 2009-A, 0.23% 20441		1,400		1,400
California Statewide Communities Dev. Auth., Multi-family Housing Rev. Bonds (IAC Project),
Series 2001-W-1, AMT, 0.40% 20341		1,300		1,300
State of California, Orange County Sanitation Dist., Ref. Certs. of Part., Series 2000-A, 0.40% 20291		4,000		4,000
Colorado Educational and Cultural Facs. Auth., Demand Rev. Bonds (National Jewish Federation Bond Program),
Series D-3, 0.38% 20371		2,000		2,000
County of Pitkin, Colorado, Industrial Dev. Rev. Ref. Bonds (Aspen Skiing Co. Project),
Series 1994-B, AMT, 0.60% 20141		1,700		1,700
State of Colorado, General Fund Tax and Rev. Anticipation Notes, Series 2009-A, 2.00% 6/25/2010		10,000		10,142
State of Connecticut Health and Educational Facs. Auth., Rev. Bonds (Greater Hartford YMCA Issue),
Series B, 0.34% 20381		2,500		2,500
State of Connecticut, Health and Educational Facs. Auth., Demand Rev. Bonds (Choate Rosemary Hall Issue),
Series D, 0.28% 20371		1,925		1,925
State of Florida, Broward County Educational Facs. Auth., Educational Facs. Rev. Bonds
(Nova Southeastern University Project), Series 2008-A, 0.35% 20381		3,000		3,000
State of Florida, Jacksonville Health Facs. Auth., Hospital Rev. Bonds (Baptist Medical Center Project),
Series 2004, 0.35% 20341		1,300		1,300
State of Florida, Jacksonville Health Facs. Auth., Hospital Rev. Ref. Bonds (Baptist Medical Center Ref.),
Series 2007-D, 0.35% 20271		2,500		2,500
School Board of Orange County, Florida, Certs. of Part., Series 2008-E, 0.35% 20221		1,300		1,300
School Board of Polk County, Florida, Certs. of Part., Series 2009-A, 0.35% 20281		5,000		5,000
Fin. Auth., Environmental Rev. Ref. Bonds (Duke Energy Indiana, Inc. Project), Series 2009-A-1, AMT, 0.50% 20351		2,025		2,025
Fin. Auth., Environmental Rev. Ref. Bonds (Duke Energy Indiana, Inc. Project), Series 2009-A-4, AMT, 0.33% 20391		5,625		5,625
State of Kentucky, Lexington-Fayette Urban County Airport Board, General Airport Rev. and Rev. Ref. Bonds
(Lexington-Fayette Urban County Government G.O.), Series 2008-A, AMT, 0.60% 20381		1,900		1,900
State of Louisiana, Calcasieu Parish Public Trust Auth., Waste Disposal Rev. Bonds (WPT Corp.), AMT, 0.65% 20271		2,000		2,000
Parish of East Baton Rouge, Louisiana, Solid Waste Disposal Rev. Bonds (Exxon Project),
Series 1998, AMT, 0.26% 20281		2,000		2,000
State of Massachusetts, Dev. Fin. Agcy., Solid Waste Disposal Rev. Bonds (Wheelabrator Millbury Inc. Project),
Series 2002, AMT, 0.32% 20271		1,700		1,700
Econ. Dev. Corp. of the Township of Green Lake, Michigan, Demand Rev. and Ref. Bonds
(Interlochen Center For The Arts Project), Series 2004, 0.38% 20341		1,300		1,300
City of Minneapolis, Minnesota, G.O. Library Bonds, Series 2003, 0.39% 20321		1,095		1,095
City of Rochester, Minnesota, Health Care Facs. Rev. Bonds (Mayo Foundation), Series 2002-B, 0.25% 20321		4,000		4,000
Health and Educational Facs. Auth. of the State of Missouri, Demand Educational Facs. Rev. Bonds (Washington University),
Series 2004-B, 0.29% 20341		4,095		4,095
Health and Educational Facs. Auth. of the State of Missouri, Demand Educational Facs. Rev. Bonds (Saint Louis University),
Series 2008-A-2, 0.35% 20351		1,850		1,850
City of Forsyth, Montana, Pollution Control Rev. Ref. Bonds (Avista Corp. Colstrip Project),
Series 2008, AMT, 0.42% 20341		2,000		2,000
University of North Carolina at Chapel Hill Foundation, Inc., Money Market Municipal Certs. of Part.,
Series 1989, 0.30% 10/1/20091		1,000		1,000
Dormitory Auth. of the State of New York, University of Rochester Rev. Bonds, Series 2006-B-1, 0.30% 20241		2,000		2,000
State of New York, New York City Transitional Fin. Auth., Future Tax Secured Bonds, Series 2001-A, 0.25% 20301		2,000		2,000
State of Ohio, Collateralized Air Quality, Dev. Rev. Ref. Bonds (Dayton Power and Light Company Project),
Series 2008-A, 0.46% 20401		7,700		7,700
Kent State University, General Receipts Bonds (State University of Ohio), Series 2008-B, 0.30% 20321		3,000		3,000
State of Oklahoma, Trustees of the Tulsa Airports Improvement Trust, Tulsa International Airport General Rev. Bonds,
Ref. Series 2007-C, AMT, 0.50% 20231		3,600		3,600
State of Oregon, G.O. Veterans’ Welfare Bonds, Series 86, 0.30% 20401		3,900		3,900
State of Oregon, G.O. Veterans’ Welfare Bonds, Series 89-B, AMT, 0.30% 20381		1,500		1,500
State of Oregon, G.O. Veterans’ Welfare Bonds, Series 90-B, 0.52% 20451		9,500		9,500
State of Oregon, Full Faith and Credit Tax Anticipation Notes, Series 2009-A, 2.50% 6/30/2010		5,000		5,094
Lawrence County, South Dakota, Solid Waste Disposal Rev. Bonds (Homestake Mining Co. of California Project),
Series 1997-A, AMT, 0.39% 20321		2,000		2,000
Public Building Auth. of the City of Clarksville, Pooled Fncg. Rev. Bonds (Tennessee Municipal Bond Fund),
Series 1999, 0.40% 20291		885		885
Public Building Auth. of the City of Clarksville, Pooled Fncg. Rev. Bonds (Tennessee Municipal Bond Fund),
Series 2008, 0.35% 20381		4,210		4,210
Public Building Auth. of the City of Clarksville, Tennessee, Fncg. Rev. Bonds
(Metropolitan Government of Nashville and Davidson County Loan), Series 2008, 0.35% 20261		1,250		1,250
Public Building Auth. of the County of Montgomery, Pooled Fncg. Rev. Bonds (Tennessee County Loan Pool),
Series 2004, 0.35% 20341		3,480		3,480
State of Texas, Dallas Performing Arts Cultural Facs. Corp., Cultural Fac. Rev. Bonds
(Dallas Center for the Performing Arts Foundation, Inc. Project), Series 2008-B, 0.33% 20411		625		625
City of Houston, Texas, Tax and Rev. Anticipation Notes, Series 2009, 2.50% 6/30/2010		4,000		4,077
Texas Public Fin. Auth., G.O. Notes, Series 2003, TECP, 0.25% 8/20/2009		2,800		2,800
State of Texas, Tax and Rev. Anticipation Notes, Series 2008, 3.00% 8/28/2009		30,000		30,061
State of Virginia, Norfolk Redev. and Housing Auth., Demand Rev. and Ref. Bonds
(Old Dominion University Real Estate Foundation 45th Street Parking Garage,
LLC University Village Parking Fac. Project), Series 2008, 0.35% 20311		2,500		2,500
Virginia College Building Auth., Educational Facs. Rev. Bonds (21st Century College and Equipment Programs),
Series 2006-B, 0.35% 20261		1,400		1,400
Washington State Housing Fin. Commission, Demand Multi-family Rev. Bonds (Seaport Landing Retirement Project),
Series 2005-A, AMT, 0.50% 20411		2,000		2,000
State of Wisconsin, Operating Notes of 2009, 2.50% 6/15/2010		10,000		10,179
Total short-term securities (cost: $180,218,000)				180,253
Total investment securities (cost: $2,400,918,000)				2,079,929
Other assets less liabilities				15,214
Net assets			$	2,095,143

1Coupon rate may change periodically. For short-term securities, the date of the next scheduled coupon rate change is considered to be the maturity date.

2Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $42,662,000, which represented 2.04% of the net assets of the fund.

3Scheduled interest and/or principal payment was not received.

4Purchased in a transaction exempt from registration under the Securities Act of 1933. This security (acquired 4/18/2008 at a cost of $15,000,000) may be subject to legal or contractual restrictions on resale.

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

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in each fund’s summary prospectus and prospectus, which can be obtained from your financial professional and should be read carefully before investing.

MFGEFP-940-0909O-S21426

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

American High-Income Municipal Bond Fund, Inc.:

We have audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the financial statements of American High-Income Municipal Bond Fund, Inc. (the "Fund") as of July 31, 2009, and for the year then ended and have issued our unqualified report thereon dated September 11, 2009 (which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR). Our audit included an audit of the Fund's investment portfolio (the “Portfolio”) as of July 31, 2009 appearing in Item 6 of this Form N-CSR. The Portfolio is the responsibility of the Fund's management. Our responsibility is to express an opinion on the Portfolio based on our audit.

In our opinion, the Portfolio referred to above, when read in conjunction with the financial statements of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.

PricewaterhouseCoopers LLP

Los Angeles, California

September 11, 2009

Financial statements

Statement of assets and liabilities
at July 31, 2009	(dollars in thousands)
Assets:
Investment securities, at value (cost: $2,400,918)			$	2,079,929
Cash				210
Receivables for:
Sales of fund's shares	$	5,986
Interest		30,143		36,129
				2,116,268
Liabilities:
Payables for:
Purchases of investments		13,531
Repurchases of fund's shares		4,239
Dividends on fund's shares		1,852
Investment advisory services		619
Services provided by affiliates		764
Directors' deferred compensation		76
Other		44		21,125
Net assets at July 31, 2009			$	2,095,143
Net assets consist of:
Capital paid in on shares of capital stock			$	2,511,813
Undistributed net investment income				2,690
Accumulated net realized loss				(98,371	)
Net unrealized depreciation				(320,989	)
Net assets at July 31, 2009			$	2,095,143

(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock - 200,000 shares, $.001 par value (165,105 total shares outstanding)
	Net assets		Shares outstanding		Net asset value per share*
Class A	$	1,738,334		136,987	$	12.69
Class B		42,948		3,385		12.69
Class C		126,277		9,951		12.69
Class F-1		156,115		12,302		12.69
Class F-2		31,469		2,480		12.69
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A, for which the maximum offering price per share was $13.18.
See Notes to Financial Statements

Statement of operations
for the year ended July 31, 2009	(dollars in thousands)
Investment income:
Income:
Interest				$	119,703
Fees and expenses*:
Investment advisory services	$	7,060
Distribution services		6,079
Transfer agent services		735
Administrative services		324
Reports to shareholders		98
Registration statement and prospectus		257
Directors' compensation		11
Auditing and legal		71
Custodian		10
Federal and state incometaxes		522
Other state and local taxes		20
Other		78
Total fees and expenses before waiver		15,265
Less investment advisory services waiver		302
Total fees and expenses after waiver					14,963
Net investment income					104,740
Net realized loss and unrealized depreciation on investments:
Net realized loss on investments					(75,912	)
Net unrealized depreciation on investments					(155,345	)
Net realized loss and unrealized depreciation on investments					(231,257	)
Net decrease in net assets resulting from operations				$	(126,517	)
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.
Statements of changes in net assets		(dollars in thousands)
	Year ended July 31
	2009			2008
Operations:
Net investment income	$	104,740		$	105,740
Net realized loss on investments		(75,912	)		(167	)
Net unrealized depreciation on investments		(155,345	)		(199,600	)
Net decrease in net assets resulting from operations		(126,517	)		(94,027	)
Dividends paid or accrued to shareholders from net investment income		(104,244	)		(104,341	)
Net capital share transactions		104,771			109,936
Total decrease in net assets		(125,990	)		(88,432	)
Net assets:
Beginning of year		2,221,133			2,309,565
End of year (including undistributed net investment income: $2,690 and $1,878, respectively)	$	2,095,143		$	2,221,133
See Notes to Financial Statements

Notes to financial statements

1.   Organization and significant accounting policies

Organization – American High-Income Municipal Bond Fund, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks a high level of current income exempt from regular federal income taxes through a diversified, carefully researched portfolio of higher yielding, lower rated, higher risk municipal bonds. It may invest without limits in bonds subject to the alternative minimum tax.

The fund offers five share classes, some of which are only available to limited categories of investors. In addition, Class R-5 shares were only available through July 31, 2009. The fund’s current share classes are described below:

Share class	Initial sales charge	Contingent deferred sales charge upon redemption	Conversion feature
Class A	Up to 3.75%	None (except 1% for certain redemptions within one year of purchase without an initial sales charge)	None
Class B*	None	Declines from 5% to 0% for redemptions within six years of purchase	Class B converts to Class A after eight years
Class C	None	1% for redemptions within one year of purchase	Class C converts to Class F-1 after 10 years
Classes F-1 and F-2	None	None	None

*Effective April 21, 2009, Class B shares of the fund are no longer available for purchase.

Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds.Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.

Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:

Net asset value – The fund generally determines its net asset value as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open.

Security valuation – Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from one or more independent pricing vendors when such prices are available. However, where the investment adviser deems it appropriate to do so, such securities will be valued in good faith at the mean quoted bid and asked prices that are reasonably and timely available (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Vendors base bond prices on, among other things, valuation matrices that incorporate dealer-supplied valuations, proprietary pricing models and evaluations of the yield curve as of approximately 3:00 p.m. New York time. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity.

Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under guidelines adopted by authority of the fund's board of directors. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations that would have been used had greater market activity occurred.

Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities.In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

Class allocations – Income, fees and expenses (other than class-specific fees and expenses) are allocated daily among the various share classes based on the relative value of their settled shares. Realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.

Dividends and distributions to shareholders –Dividends paid to shareholders are declared daily after the determination of the fund’s net investment income and are paid to shareholders monthly. Distributions paid to shareholders are recorded on the ex-dividend date.

2.   Risk factors

Investing in the fund may involve certain risks including, but not limited to, those described below.

The values of, and the income generated by, most debt securities held by the fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities. For example, the values of debt securities in the fund's portfolio generally will decline when interest rates rise and increase when interest rates fall. In addition, falling interest rates may cause an issuer to redeem, "call" or refinance a security before its stated maturity, which may result in a fund having to reinvest the proceeds in lower yielding securities.

Debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. Lower quality or longer maturity debt securities generally have higher rates of interest and may be subject to greater price fluctuations than higher quality or shorter maturity debt securities. There may be little trading in the secondary market for particular debt securities, which may make them more difficult to value or sell.

 3. Taxation and distributions                                                                                     

Federal income taxation – The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net income and net capital gains each year. The fund is not subject to income taxes to the extent taxable income and net capital gains are distributed.  Generally, income earned by the fund is exempt from federal income taxes; however, the fund may earn taxable income from certain investments.

As of and during the period ended July 31, 2009, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any significant interest or penalties.

The fund is not subject to examination by U.S. federal tax authorities for tax years before 2005 and by state tax authorities for tax years before 2004.

Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gainsfor financial reporting purposes. These differences are due primarily to different treatment for items such as short-term capital gains and losses; net capital losses; and amortization of market discounts. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.

During the year ended July 31, 2009, the fund reclassified $77,000 from accumulated net realized loss to undistributed net investment income and $239,000 from capital paid in on shares of capital stock to undistributed net investment income to align financial reporting with tax reporting.

As of July 31, 2009, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

	(dollars in thousands)
Undistributed tax-exempt income				$	1,831
Capital loss carryforwards*:
Expiring 2012	$	(17,001	)
Expiring 2013		(3,652	)
Expiring 2017		(14,384	)		(35,037	)
Post-October capital loss deferrals (realized during the period November 1, 2008, through July 31, 2009)†					(63,219	)
Gross unrealized appreciation on investment securities					25,271
Gross unrealized depreciation on investment securities					(343,564	)
Net unrealized depreciation on investment securities					(318,293	)
Cost of investment securities					2,398,222
*The capital loss carryforwards will be used to offset any capital gains realized by the fund in future years through the expiration dates. The fund will not make distributions from capital gains while capital loss carryforwards remain.
†These deferrals are considered incurred in the subsequent year.

Tax-exempt income distributions paid or accrued to shareholders were as follows (dollars in thousands):

	Year ended July 31
Share class	2009		2008
Class A	$	88,139	$	88,427
Class B		2,101		2,408
Class C		5,036		4,624
Class F-1		7,798		7,586
Class F-2*		432		-
Class R-5†		738		1,296
Total	$	104,244	$	104,341
*Class F-2 shares were offered beginning August 1, 2008.
†Class R-5 shares were only available through July 31, 2009.

4. Fees and transactions with related parties

Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company® ("AFS"), the fund’s transfer agent, and American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares.

Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.30% on the first $60 million of daily net assets and decreasing to 0.15% on such assets in excess of $3 billion. The agreement also provides for monthly fees, accrued daily, of 3.00% on the first $3,333,333 of the fund's monthly gross income and 2.50% on such income in excess of $3,333,333. CRMC waived a portion of its investment advisory services fee commencing on September 1, 2004, and terminating on December 31, 2008. During the year ended July 31, 2009, total investment advisory services fees waived by CRMC were $302,000. As a result, the fee shown on the accompanying financial statements of $7,060,000, which was equivalent to an annualized rate of 0.362%, was reduced to $6,758,000, or 0.346% of average daily net assets.

Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:

Distribution services – The fund has adopted plans of distribution for all share classes, except Classes F-2 and R-5. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.30% to 1.00% as noted below. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans.All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Class A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. Thisclass reimbursesAFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.30% is not exceeded. As of July 31, 2009, there were no unreimbursed expenses subject to reimbursement for Class A.

Share class	Currently approved limits	Plan limits
Class A	0.30%	0.30%
Class B	1.00	1.00
Class C	1.00	1.00
Class F-1	0.25	0.50

Transfer agent services –The fund hasa transfer agent agreement with AFS for Classes A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described below.

Administrative services – The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Classes A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services.

Expenses under the agreements described on the previous page for the year ended July 31, 2009, were as follows (dollars in thousands):

Share class	Distribution services	Transfer agent services	Administrative services
			CRMC administrative services	Transfer agent services
Class A	$4,172	$714	Not applicable	Not applicable
Class B	449	21	Not applicable	Not applicable
Class C	1,094	Included in administrative services	$97	$9
Class F-1	364		181	13
Class F-2(1)	Not applicable		10	-(2)
Class R-5(3)	Not applicable		13	1
Total	$6,079	$735	$301	$23

(1) Class F-2 shares were offered beginning August 1, 2008.

(2) Amount less than one thousand.

(3) Class R-5 shares were only available through July 31, 2009.

Directors’ deferred compensation – Since the adoption of the deferred compensation plan in 1994, directors who are unaffiliated with CRMCmay elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $11,000, shown on the accompanying financial statements, includes $29,000 in current fees (either paid in cash or deferred) and a net decrease of $18,000 in the value of the deferred amounts.

Affiliated officers and directors – Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.

5. Disclosure of fair value measurements

The fund classifies its assets and liabilities into three levels based on the method used to value the assets or liabilities.Level 1 values are based on quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the fund’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. For example, U.S. government securities are generally high-quality and liquid; however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.At July 31, 2009, all of the fund’s investment securities were classified as Level 2.

The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the year ended July 31, 2009 (dollars in thousands):
	Beginning					Net transfers			Ending
	value		Net unrealized			out of			value
	at 8/1/2008		depreciation (*)			Level 3			at 7/31/2009
Investment securities	$	15,014	$	(1,988	)	$	(13,026	)	$	-
(*) Net unrealized depreciation is included in the related amounts on investments in the statement of operations.

6. Capital share transactions

Capital share transactions in the fund were as follows (dollars and shares in thousands):

Share class	Sales(1)				Reinvestments of dividends				Repurchases(1)						Net increase (decrease)
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended July 31, 2009
Class A	$	561,169		45,233	$	70,558		5,642	$	(550,444	)		(44,135	)	$	81,283			6,740
Class B		10,206		830		1,663		133		(16,914	)		(1,354	)		(5,045	)		(391	)
Class C		52,418		4,196		3,867		309		(37,208	)		(2,980	)		19,077			1,525
Class F-1		83,565		6,672		6,235		498		(84,479	)		(6,684	)		5,321			486
Class F-2(2)		32,896		2,659		255		21		(2,439	)		(200	)		30,712			2,480
Class R-5(3)		7,877		646		482		38		(34,936	)		(2,682	)		(26,577	)		(1,998	)
Total net increase
(decrease)	$	748,131		60,236	$	83,060		6,641	$	(726,420	)		(58,035	)	$	104,771			8,842
Year ended July 31, 2008
Class A	$	501,523		33,739	$	68,599		4,635	$	(484,566	)		(32,444	)	$	85,556			5,930
Class B		5,655		381		1,792		121		(14,259	)		(957	)		(6,812	)		(455	)
Class C		43,030		2,903		3,507		237		(36,175	)		(2,421	)		10,362			719
Class F-1		80,253		5,414		5,991		405		(71,180	)		(4,769	)		15,064			1,050
Class R-5		9,792		656		725		49		(4,751	)		(316	)		5,766			389
Total net increase
(decrease)	$	640,253		43,093	$	80,614		5,447	$	(610,931	)		(40,907	)	$	109,936			7,633
(1) Includes exchanges between share classes of the fund.
(2)Class F-2 shares were offered offered beginning August 1, 2008.
(3)Class R-5 shares were only available through July 31, 2009.

7. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $568,798,000 and $512,042,000, respectively, during the year ended July 31, 2009.

8. Subsequent events

As of September 11, 2009, the date the financial statements were available to be issued, no subsequent events or transactions had occurred that would have materially impacted the financial statements as presented.

Financial highlights(1)

			(Loss) income from investment operations(2)
	Net asset value, beginning of period		Net investment income		Net (losses) gains on securities (both realized and unrealized)			Total from investment operations			Dividends (from net investment income)			Net asset value, end of period		Total return(3) (4)			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(4)			Ratio of net income to average net assets(4)
Class A:
Year ended 7/31/2009	$	14.21	$	.68	$	(1.52	)	$	(.84	)	$	(.68	)	$	12.69		(5.69	)%	$	1,738		.72	%		.70	%		5.43	%
Year ended 7/31/2008		15.54		.72		(1.34	)		(.62	)		(.71	)		14.21		(4.07	)		1,851		.69			.65			4.83
Year ended 7/31/2007		15.60		.70		(.06	)		.64			(.70	)		15.54		4.12			1,932		.70			.67			4.44
Year ended 7/31/2006		15.61		.70		(.02	)		.68			(.69	)		15.60		4.44			1,597		.69			.66			4.47
Year ended 7/31/2005		15.23		.68		.37			1.05			(.67	)		15.61		7.03			1,370		.71			.69			4.39
Class B:
Year ended 7/31/2009		14.21		.59		(1.52	)		(.93	)		(.59	)		12.69		(6.39	)		43		1.46			1,45			4.70
Year ended 7/31/2008		15.54		.61		(1.34	)		(.73	)		(.60	)		14.21		(4.76	)		54		1.41			1.37			4.11
Year ended 7/31/2007		15.60		.59		(.06	)		.53			(.59	)		15.54		3.40			66		1.41			1.38			3.74
Year ended 7/31/2006		15.61		.59		(.02	)		.57			(.58	)		15.60		3.71			66		1.41			1.38			3.75
Year ended 7/31/2005		15.23		.58		.37			.95			(.57	)		15.61		6.30			65		1.42			1.40			3.69
Class C:
Year ended 7/31/2009		14.21		.58		(1.52	)		(.94	)		(.58	)		12.69		(6.44	)		126		1.51			1.50			4.63
Year ended 7/31/2008		15.54		.61		(1.34	)		(.73	)		(.60	)		14.21		(4.80	)		120		1.45			1.42			4.06
Year ended 7/31/2007		15.60		.58		(.06	)		.52			(.58	)		15.54		3.35			120		1.46			1.43			3.68
Year ended 7/31/2006		15.61		.58		(.02	)		.56			(.57	)		15.60		3.66			101		1.46			1.43			3.70
Year ended 7/31/2005		15.23		.56		.37			.93			(.55	)		15.61		6.17			90		1.54			1.52			3.55
Class F-1:
Year ended 7/31/2009		14.21		.67		(1.52	)		(.85	)		(.67	)		12.69		(5.77	)		156		.80			.78			5.35
Year ended 7/31/2008		15.54		.71		(1.34	)		(.63	)		(.70	)		14.21		(4.12	)		168		.74			.70			4.77
Year ended 7/31/2007		15.60		.69		(.06	)		.63			(.69	)		15.54		4.08			167		.74			.71			4.39
Year ended 7/31/2006		15.61		.69		(.02	)		.67			(.68	)		15.60		4.41			121		.72			.69			4.43
Year ended 7/31/2005		15.23		.67		.37			1.04			(.66	)		15.61		6.95			86		.78			.76			4.29
Class F-2:
Period from 8/12/2008 to 7/31/2009		14.28		.66		(1.58	)		(.92	)		(.67	)		12.69		(6.19	)		32		0.53	(5)		0.53	(5)		5.5	(5)
Class R-5:
Year ended 7/31/2009(6)		14.21		.71		(1.52	)		(.81	)		(.71	)		12.69		(5.51	)		-		.52			.50			5.59
Year ended 7/31/2008		15.54		.75		(1.34	)		(.59	)		(.74	)		14.21		(3.86	)		28		.47			.44			5.05
Year ended 7/31/2007		15.60		.73		(.06	)		.67			(.73	)		15.54		4.35			25		.48			.45			4.67
Year ended 7/31/2006		15.61		.73		(.02	)		.71			(.72	)		15.60		4.66			22		.48			.45			4.68
Year ended 7/31/2005		15.23		.72		.37			1.09			(.71	)		15.61		7.27			22		.48			.46			4.62

	Year ended July 31
	2009			2008			2007			2006			2005
Portfolio turnover rate for all classes of shares		29	%		27	%		23	%		14	%		10	%

(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)Total returns exclude any applicable sales charges, including contingent deferred sales charges.

(4)This column reflects the impact, if any, of certain waivers from CRMC. During the periods shown, CRMC reduced fees for investment advisory services.

(5)Annualized.

(6)Class R-5 shares were only available through July 31, 2009.

See Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of American High-Income Municipal Bond Fund, Inc.:

In our opinion, the accompanying statement of assets and liabilities, including the summary investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of American High-Income Municipal Bond Fund, Inc. (the "Fund") at July 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities owned at July 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Los Angeles, California

September 11, 2009

Tax information              

                                                                                                       unaudited

We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amount for the fund’s fiscal year ended July 31, 2009:

Exempt interest dividends 100 %

Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2010, to determine the calendar year amounts to be included on their 2009 tax returns. Shareholders should consult their tax advisers.

...

American High-Income Municipal Bond Fund, Inc.

Part C

Other Information

Item 23.                      Exhibits for Registration Statement (1940 Act No. 811-08576 and 1933 Act. No. 033-80630)

(a) Articles of Incorporation – Articles of Incorporation previously filed (see P/E Amendment No. 5 filed 9/29/97); Articles of Amendment to Articles of Incorporation and Articles Supplementary - previously filed (see P/E Amendment No. 9 filed 3/14/00; No. 11 filed 3/13/01; No. 13 filed 7/15/02 and No. 20 filed 7/1/08)

(b) By-laws – By-laws as amended 9/17/09

(c) Instruments Defining Rights of Security Holders – Form of share certificate - previously filed (see P/E Amendment No. 5 filed 9/29/97; No. 9 filed 3/14/00; and No. 11 filed 3/13/01)

(d) Investment Advisory Contracts – Amended Investment Advisory and Service Agreement dated 4/1/04 - previously filed (see P/E Amendment No. 16 filed 11/1/04)

(e) Underwriting Contracts – Form of Selling Group Agreements – previously filed (see P/E Amendment No. 13 filed 7/15/02); Form of Institutional Selling Group Agreement - previously filed (see P/E Amendment No. 16 filed 11/1/04); Form of Amendment to Selling Group Agreement effective 11/1/06 – previously filed (see P/E Amendment No. 18 filed 10/31/06); Form of Amendment to Selling Group Agreement effective 2/1/07 – previously filed (see P/E Amendment No. 19 filed 10/31/07); Form of Amendment to Institutional Selling Group Agreement effective 2/1/07 – previously filed (see P/E Amendment No. 19 filed 10/31/07); Form of Amended and Restated Principal Underwriting Agreement dated 6/16/08 – previously filed (see P/E Amendment No. 20 filed 7/1/08); Form of Amendment to Selling Group Agreement effective 10/1/08 – previously filed (see P/E Amendment No. 21 filed 10/31/08); Form of Amendment to Institutional Selling Group Agreement effective 10/1/08 – previously filed (see P/E Amendment No. 21 filed 10/31/08); Form of Participation Agreement – previously filed (see P/E Amendment No. 21 filed 10/31/08); Form of Amendment to Participation Agreement effective 8/1/08 – previously filed (see P/E Amendment No. 21 filed 10/31/08); Form of Bank-Trust Participation Agreement – previously filed (see P/E Amendment No. 21 filed 10/31/08); and Form of Amendment to Bank-Trust Participation Agreement effective 8/1/08 – previously filed (see P/E Amendment No. 21 filed 10/31/08)

(f) Bonus or Profit Sharing Contracts – Deferred Compensation Plan as amended 1/1/08 – previously filed (see P/E Amendment No. 20 filed 7/1/08)

(g) Custodian Agreements – Form of Global Custody Agreement dated 12/21/06 – previously filed (see P/E Amendment No. 19 filed 10/31/07)

(h-1) Other Material Contracts – Amended Shareholder Services Agreement as of 4/1/03 - previously filed (see P/E Amendment No. 16 filed 11/1/04) and form of Indemnification Agreement dated 7/1/04 - previously filed (see P/E Amendment No. 16 filed 11/1/04); Form of Amendment to Shareholder Services Agreement dated 11/1/06 – previously filed (see P/E Amendment No. 19 filed 10/31/07); and Form of Amended and Restated Administrative Services Agreement dated 6/16/08 – previously filed (see P/E Amendment No. 20 filed 7/1/08)

(h-2) Form of Amendment of Amended Shareholder Services Agreement dated 11/1/08

(i) Legal Opinion – Legal Opinion – previously filed (see P/E Amendment No. 5 filed 9/29/97; No. 9 filed 3/14/00; No. 11 filed 3/13/01; No. 13 filed 7/15/02; and No. 20 filed 7/1/08)

(j) Other Opinions – Consent of Independent Registered Public Accounting Firm

(k) Omitted financial statements – None

(l) Initial capital agreements - previously filed (see P/E Amendment No. 5 filed 9/29/97)

(m) Rule 12b-1 Plan – Forms of Plans of Distribution - Class A, B, C and F – previously filed (see P/E Amendment No. 19 filed 10/31/07); and Form of Amendment to Plan of Distribution – Class F-1 dated 6/16/08 – previously filed (see P/E Amendment No. 20 filed 7/1/08)

(n) Rule 18f-3 Plan – Form of Amended and Restated Multiple Class Plan dated 6/16/08 – previously filed (see P/E Amendment No. 20 filed 7/1/08)

(o) Reserved

(p) Code of Ethics – Code of Ethics for The Capital Group Companies dated June 2009; and Code of Ethics for Registrant dated December 2005

Item 24.                      Persons Controlled by or Under Common Control with the Fund

None

Item 25.                      Indemnification

The Registrant is a joint-insured under Investment Advisor/Mutual Fund Errors and Omissions Policies, which insure its officers and directors against certain liabilities.  However, in no event will Registrant maintain insurance to indemnify any such person for any act for which Registrant itself is not permitted to indemnify the individual.

Subsection (b) of Section 2-418 of the General Corporation Law of Maryland empowers a corporation to indemnify any person who was or is party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason  of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against reasonable expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually incurred by him in connection with such action, suit or proceeding unless it is established that:  (i) the act or omission of the person was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the person actually received an improper personal benefit of money, property or services; or (iii) with respect to any criminal action or proceeding, the person had reasonable cause to believe his act or omission was unlawful.

Indemnification under subsection (b) of Section 2-418 may not be made by a corporation unless authorized for a specific proceeding after a determination has been made that indemnification is permissible in the circumstances because the party to be indemnified has met the standard of conduct set forth in subsection (b).  This determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors not, at the time, parties to the proceeding, or, if such quorum cannot be obtained, then by a majority vote of a committee of the Board consisting solely of two or more directors not, at the time, parties to such proceeding and who were duly designated to act in the matter by a majority vote of the full Board in which the designated directors who are parties may participate; (ii) by special legal counsel selected by the Board of Directors of a committee of the Board by vote as set forth in subparagraph (i), or, if the requisite quorum of the full Board cannot be obtained therefor and the committee cannot be established, by a majority vote of the full Board in which any director who is a party may participate; or (iii) by the stockholders (except that shares held by any party to the specific proceeding may not be voted).  A court of appropriate jurisdiction may also order indemnification if the court determines that a person seeking indemnification is entitled to reimbursement under subsection (b).

Section 2-418 further provides that indemnification provided for by Section 2-418 shall not be deemed exclusive of any rights to which the indemnified party may be entitled; that the scope of indemnification extends to directors, officers, employees or agents of a constituent  corporation absorbed in a consolidation or merger and persons serving in that capacity at the request of the constituent corporation for another; and empowers the corporation to purchase and maintain insurance on behalf of a director, officer, employee or agent of the corporation against any liability asserted against or incurred by such person in any such capacity or arising out of such person's status as such whether or not the corporation would have the power to indemnify such person against such liabilities under Section 2-418.

Article VIII of the Registrant's Articles of Incorporation and Article V of the Registrant’s By-Laws as well as the indemnification agreements that the Registrant has entered into with each of its directors who is not an “interested person” of the Registrant (as defined under the Investment Company Act of 1940, as amended), provide in effect that the Registrant will indemnify its officers and directors against any liability or expenses actually and reasonably incurred by such person in any proceeding arising out of or in connection with his or her service to the Registrant, to the fullest extent permitted by applicable law, subject to certain conditions.  In accordance with Section 17(h) and 17(i) of the Investment Company Act of 1940, as amended, and their respective terms, these provisions do not protect any person against any liability to the Registrant or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Registrant will comply with the indemnification requirements contained in the Investment Company Act of 1940, as amended, and Release Nos. 7221 (June 9, 1972) and 11330 (September 4, 1980).

Item 26.                      Business and Other Connections of the Investment Adviser

None

Item 27.                      Principal Underwriters

(a)           American Funds Distributors, Inc. is the Principal Underwriter of shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds Income Series, American Funds Money Market Fund, American Funds Short-Term Tax-Exempt Bond Fund, American Funds Target Date Retirement Series, Inc., The American Funds Tax-Exempt Series I, The American Funds Tax-Exempt Series II, American High-Income Municipal Bond Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc., Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World Growth and Income Fund, Inc., Endowments, EuroPacific Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc., Intermediate Bond Fund of America, International Growth and Income Fund, Inc., The Investment Company of America, Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund, Inc., New World Fund, Inc., Short-Term Bond Fund of America, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc. and Washington Mutual Investors Fund, Inc.

(b)

	(1) Name and Principal Business Address	(2) Positions and Offices with Underwriter	(3) Positions and Offices with Registrant
LAO	David L. Abzug	Vice President	None
IRV	Laurie M. Allen	Senior Vice President	None
LAO	William C. Anderson	Vice President	None
LAO	Robert B. Aprison	Senior Vice President	None
LAO	T. Patrick Bardsley	Regional Vice President	None
LAO	Shakeel A. Barkat	Vice President	None
LAO	Thomas M. Bartow	Senior Vice President	None
IRV	Carl R. Bauer	Vice President	None
LAO	Michelle A. Bergeron	Senior Vice President	None
LAO	J. Walter Best, Jr.	Senior Vice President	None
LAO	Roger J. Bianco, Jr.	Regional Vice President	None
LAO	John A. Blanchard	Senior Vice President	None
LAO	Randall L. Blanchetti	Regional Vice President	None
LAO	Gerard M. Bockstie, Jr.	Regional Vice President	None
LAO	Jonathan W. Botts	Regional Vice President	None
LAO	Bill Brady	Director, Senior Vice President	None
LAO	Mick L. Brethower	Senior Vice President	None
LAO	C. Alan Brown	Vice President	None
IRV	William H. Bryan	Regional Vice President	None
LAO	Sheryl M. Burford	Assistant Vice President	None
LAO	Steven Calabria	Vice President	None
LAO	Thomas E. Callahan	Regional Vice President	None
SNO	Kathleen D. Campbell	Vice President	None
LAO	Damian F. Carroll	Director, Vice President	None
LAO	James D. Carter	Regional Vice President	None
LAO	Brian C. Casey	Senior Vice President	None
LAO	Victor C. Cassato	Senior Vice President	None
LAO	Christopher J. Cassin	Senior Vice President	None
LAO	Denise M. Cassin	Director, Senior Vice President and Director of AFIG and Dealer Relations	None
LAO	David D. Charlton	Director, Senior Vice President and Director Individual Investor and Advisory Business	None
LAO	Thomas M. Charon	Vice President	None
LAO	Wellington Choi	Vice President	None
LAO	Paul A. Cieslik	Vice President	None
LAO	Kevin G. Clifford	Director, President and Chief Executive Officer	None
LAO	Ruth M. Collier	Senior Vice President	None
LAO	Charles H. Cote	Regional Vice President	None
LAO	Michael D. Cravotta	Assistant Vice President	None
LAO	Joseph G. Cronin	Vice President	None
LAO	D. Erick Crowdus	Regional Vice President	None
LAO	William F. Daugherty	Vice President	None
LAO	Peter J. Deavan	Regional Vice President	None
LAO	Daniel J. Delianedis	Senior Vice President	None
LAO	James W. DeLouise	Assistant Vice President	None
LAO	James A. DePerno, Jr.	Senior Vice President	None
LAO	Bruce L. DePriester	Director, Senior Vice President, Treasurer and Controller	None
LAO	Dianne M. Dexter	Assistant Vice President	None
LAO	Thomas J. Dickson	Vice President	None
NYO	Dean M. Dolan	Vice President	None
LAO	Hedy B. Donahue	Assistant Vice President	None
LAO	Michael J. Downer	Director	None
LAO	Craig A. Duglin	Regional Vice President	None
IND	Lloyd G. Edwards	Senior Vice President	None
LAO	Timothy L. Ellis	Senior Vice President	None
LAO	Lorna Fitzgerald	Vice President	None
LAO	William F. Flannery	Vice President	None
LAO	John R. Fodor	Director, Executive Vice President	None
SNO	Michael J. Franchella	Assistant Vice President	None
LAO	Charles L. Freadhoff	Vice President	None
LAO	Daniel B. Frick	Vice President	None
LAO	J. Christopher Gies	Senior Vice President	None
LAO	David M. Givner	Secretary	None
LAO	Jack E. Goldin	Regional Vice President	None
LAO	Earl C. Gottschalk	Vice President	None
LAO	Jeffrey J. Greiner	Director, Senior Vice President	None
LAO	Eric M. Grey	Vice President	None
NYO	Maura S. Griffin	Assistant Vice President	None
LAO	Christopher M. Guarino	Senior Vice President	None
IRV	Steven Guida	Director, Senior Vice President	None
LAO	Derek S. Hansen	Vice President	None
LAO	Calvin L. Harrelson, III	Vice President	None
LAO	Robert J. Hartig, Jr.	Vice President	None
LAO	Craig W. Hartigan	Regional Vice President	None
LAO	Linda M. Hines	Vice President	None
LAO	Russell K. Holliday	Vice President	None
LAO	Heidi Horwitz-Marcus	Regional Vice President	None
LAO	Kevin B. Hughes	Vice President	None
LAO	Marc Ialeggio	Vice President	None
HRO	Jill Jackson-Chavis	Vice President	None
IND	David K. Jacocks	Assistant Vice President	None
LAO	Linda Johnson	Vice President	None
GVO-1	Joanna F. Jonsson	Director	None
IRV	Damien M. Jordan	Senior Vice President	None
LAO	Marc J. Kaplan	Vice President	None
LAO	John P. Keating	Senior Vice President	None
LAO	Brian G. Kelly	Regional Vice President	None
LAO	Ryan C. Kidwell	Regional Vice President	None
LAO	Mark Kistler	Regional Vice President	None
NYO	Dorothy Klock	Vice President	None
IRV	Elizabeth K. Koster	Vice President	None
LAO	Christopher F. Lanzafame	Regional Vice President	None
IRV	Laura Lavery	Vice President	None
LAO	R. Andrew LeBlanc	Vice President	None
LAO	Clay M. Leveritt	Regional Vice President	None
LAO	Susan B. Lewis	Assistant Vice President	None
LAO	T. Blake Liberty	Vice President	None
LAO	Lorin E. Liesy	Vice President	None
LAO	Louis K. Linquata	Vice President	None
HRO	Maria M. Lockard	Assistant Vice President	None
LAO	Brendan T. Mahoney	Vice President	None
LAO	Nathan G. Mains	Regional Vice President	None
LAO	Stephen A. Malbasa	Director, Senior Vice President and Director of Retirement Plan Business	None
LAO	Paul R. Mayeda	Assistant Vice President	None
LAO	Eleanor P. Maynard	Vice President	None
LAO	Joseph A. McCreesh, III	Regional Vice President	None
LAO	Will McKenna	Vice President	None
SNO	John V. McLaughlin	Senior Vice President	None
LAO	Scott M. Meade	Senior Vice President	None
LAO	Daniel P. Melehan	Regional Vice President	None
LAO	William T. Mills	Regional Vice President	None
LAO	James R. Mitchell III	Regional Vice President	None
LAO	Charles L. Mitsakos	Regional Vice President	None
LAO	Monty L. Moncrief	Vice President	None
LAO	David H. Morrison	Regional Vice President	None
LAO	Andrew J. Moscardini	Vice President	None
LAO	Brian D. Munson	Regional Vice President	None
LAO	Jon Christian Nicolazzo	Regional Vice President	None
LAO	Jack Nitowitz	Assistant Vice President	None
LAO	William E. Noe	Senior Vice President	None
LAO	Matthew P. O’Connor	Vice President	None
LAO	Jonathan H. O’Flynn	Regional Vice President	None
LAO	Eric P. Olson	Senior Vice President	None
LAO	Jeffrey A. Olson	Vice President	None
LAO	Thomas A. O’Neil	Regional Vice President	None
LAO	Shawn M. O’Sullivan	Regional Vice President	None
LAO	Michael W. Pak	Regional Vice President	None
LAO	W. Burke Patterson, Jr.	Vice President	None
LAO	Gary A. Peace	Senior Vice President	None
LAO	Samuel W. Perry	Vice President	None
LAO	David K. Petzke	Senior Vice President	None
IRV	John H. Phelan, Jr.	Director	None
LAO	John Pinto	Vice President	None
LAO	Carl S. Platou	Senior Vice President	None
LAO	Charles R. Porcher	Regional Vice President	None
LAO	Julie K. Prather	Vice President	None
SNO	Richard P. Prior	Vice President	None
LAO	Steven J. Quagrello	Regional Vice President	None
LAO	Mike Quinn	Vice President	None
SNO	John P. Raney	Assistant Vice President	None
LAO	James P. Rayburn	Regional Vice President	None
LAO	Rene M. Reincke	Vice President	None
LAO	Steven J. Reitman	Senior Vice President	None
LAO	Jeffrey Robinson	Regional Vice President	None
LAO	Suzette M. Rothberg	Regional Vice President	None
LAO	James F. Rothenberg	Non-Executive Chairman and Director	None
LAO	Romolo D. Rottura	Vice President	None
LAO	William M. Ryan	Regional Vice President	None
LAO	Dean B. Rydquist	Director, Senior Vice President, Chief Compliance Officer	None
LAO	Richard A. Sabec, Jr.	Vice President	None
HRO	Diane Sawyer	Senior Vice President	None
LAO	Joseph D. Scarpitti	Senior Vice President	None
IRV	MaryAnn Scarsone	Assistant Vice President	None
LAO	Kim D. Schmidt	Assistant Vice President	None
LAO	Shane D. Schofield	Vice President	None
LAO	David L. Schroeder	Assistant Vice President	None
LAO	Mark A. Seaman	Vice President	None
LAO	James J. Sewell III	Regional Vice President	None
LAO	Arthur M. Sgroi	Vice President	None
LAO	Steven D. Shackelford	Regional Vice President	None
LAO	Michael J. Sheldon	Vice President	None
LAO	Daniel S. Shore	Vice President	None
LAO	Brad Short	Vice President	None
LAO	Nathan W. Simmons	Regional Vice President	None
LAO	Connie F. Sjursen	Vice President	None
LAO	Jerry L. Slater	Senior Vice President	None
SNO	Stacy D. Smolka	Assistant Vice President	None
LAO	J. Eric Snively	Regional Vice President	None
LAO	Therese L. Soullier	Vice President	None
LAO	Kristen J. Spazafumo	Vice President	None
LAO	Mark D. Steburg	Vice President	None
LAO	Michael P. Stern	Regional Vice President	None
LAO	Brad Stillwagon	Vice President	None
LAO	Craig R. Strauser	Senior Vice President	None
LAO	Libby J. Syth	Vice President	None
LAO	Drew W. Taylor	Senior Vice President	None
LAO	Gary J. Thoma	Vice President	None
LAO	Cynthia M. Thompson	Vice President	None
LAO	David R. Therrien	Assistant Vice President	None
LAO	John B. Thomas	Regional Vice President	None
LAO	Mark R. Threlfall	Regional Vice President	None
LAO	David Tippets	Regional Vice President	None
IND	James P. Toomey	Vice President	None
LAO	Luke N. Trammel	Regional Vice President	None
IND	Christopher E. Trede	Vice President	None
LAO	Scott W. Ursin-Smith	Senior Vice President	None
SNO	Cindy Vaquiax	Vice President	None
LAO	Srinkanth Vemuri	Regional Vice President	None
LAO	J. David Viale	Senior Vice President	None
DCO	Bradley J. Vogt	Director	None
LAO	Sherrie S. Walling	Assistant Vice President	None
SNO	Chris L. Wammack	Assistant Vice President	None
LAO	Thomas E. Warren	Senior Vice President	None
LAO	Gregory J. Weimer	Senior Vice President	None
SFO	Gregory W. Wendt	Director	None
LAO	George J. Wenzel	Vice President	None
LAO	Jason M. Weybrecht	Regional Vice President	None
LAO	Brian E. Whalen	Vice President	None
LAO	William C. Whittington	Regional Vice President	None
LAO	N. Dexter Williams, Jr.	Senior Vice President	None
LAO	Andrew L. Wilson	Vice President	None
LAO	Steven C. Wilson	Regional Vice President	None
LAO	Timothy J. Wilson	Director, Senior Vice President	None
LAO	Kurt A. Wuestenberg	Vice President	None
LAO	William R. Yost	Senior Vice President	None
LAO	Jason P. Young	Vice President	None
LAO	Jonathan A. Young	Regional Vice President	None

__________

DCO	Business Address, 3000 K Street N.W., Suite 230, Washington, DC 20007-5140
GVO-1	Business Address, 3 Place des Bergues, 1201 Geneva, Switzerland
HRO	Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
IND	Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
IRV	Business Address, 6455 Irvine Center Drive, Irvine, CA 92618
LAO	Business Address, 333 South Hope Street, Los Angeles, CA  90071
LAO-W	Business Address, 11100 Santa Monica Blvd., 15th Floor, Los Angeles, CA  90025
NYO	Business Address, 630 Fifth Avenue, 36th Floor, New York, NY 10111
SFO	Business Address, One Market, Steuart Tower, Suite 1800, San Francisco, CA 94105
SNO	Business Address, 3500 Wiseman Boulevard, San Antonio, TX  78251

(c)           None

Item 28.                      Location of Accounts and Records

Accounts, books and other records required by Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended, are maintained and held in the offices of the Registrant’s investment adviser, Capital Research and Management Company, 333 South Hope Street, Los Angeles, California 90071; 6455 Irvine Center Drive, Irvine, CA 92618; and/or 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering shareholder accounts are maintained and kept by its transfer agent, American Funds Service Company, 6455 Irvine Center Drive, Irvine, CA 92618; 8332 Woodfield Crossing Boulevard, Indianapolis, Indiana 46240; 10001 North 92nd Street, Suite 100, Scottsdale, Arizona 85258; 3500 Wiseman Boulevard, San Antonio, Texas 78251; and 5300 Robin Hood Road, Norfolk, Virginia 23513.

Registrant's records covering portfolio transactions are maintained and kept by its custodian, JPMorgan Chase Bank, 270 Park Avenue, New York, New York 10017-2070.

Item 29.                      Management Services

None

Item 30.                      Undertakings

n/a

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under Rule 485(b) under the Securities Act of 1933 and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Los Angeles, and State of California, on the 29th day of October, 2009.

American High-Income Municipal Bond Fund, Inc.

By:  /s/ Paul G. Haaga, Jr.____________________________

(Paul G. Haaga, Jr., Vice Chairman of the Board)

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below on October 29, 2009, by the following persons in the capacities indicated.

	Signature	Title
(1)	Principal Executive Officer:
	/s/ Karl J. Zeile	President
	(Karl J. Zeile)
(2)	Principal Financial Officer and Principal Accounting Officer:
	/s/ M. Susan Gupton	Treasurer
	(M. Susan Gupton)
(3)	Directors:
	Richard G. Capen, Jr.*	Director
	H. Frederick Christie*	Director
	James G. Ellis*	Director
	Martin Fenton*	Chairman of the Board (Independent and Non-Executive)
	Leonard R. Fuller*	Director
	/s/ Abner D. Goldstine	Vice Chairman and Director
	(Abner D. Goldstine)
	/s/ Paul G. Haaga, Jr.	Vice Chairman and Director
	(Paul G. Haaga, Jr.)
	R. Clark Hooper*	Director
	/s/ Mark R. Macdonald	Director
	(Mark R. Macdonald)
	Richard G. Newman*	Director
	Frank M. Sanchez*	Director
	Steadman Upham*	Director
	*By: /s/ Kimberly S. Verdick
	(Kimberly S. Verdick, pursuant to a power of attorney filed herewith)

Counsel represents that this amendment does not contain disclosures that would make the amendment ineligible for effectiveness under the provisions of rule 485(b).

/s/ Katherine H. Newhall______________________

(Katherine H. Newhall)

POWER OF ATTORNEY

I, Richard G. Capen, Jr., the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   The New Economy Fund  (File No. 002-83848, File No. 811-03735)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton David A. Pritchett Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Richard G. Capen

Richard G. Capen, Jr., Board member

POWER OF ATTORNEY

I, H. Frederick Christie, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Jeffrey P. Regal Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ H. Frederick Christie

H. Frederick Christie, Board member

POWER OF ATTORNEY

I, James G. Ellis, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 15th day of June, 2009.

     (City, State)

/s/ James G. Ellis

James G. Ellis, Board member

POWER OF ATTORNEY

I, Martin Fenton, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   AMCAP Fund, Inc. (File No. 002-26516, File No. 811-01435)

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   American Funds Target Date Retirement Series, Inc. (File No. 333-138648, File No. 811-21981)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   American Mutual Fund, Inc. (File No. 002-10607, File No. 811-00572)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor Brian D. Bullard Karl C. Grauman M. Susan Gupton David A. Pritchett Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Martin Fenton

Martin Fenton, Board member

POWER OF ATTORNEY

I, Leonard R. Fuller, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Insurance Series (File No. 002-86838, File No. 811-03857)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   American Funds Target Date Retirement Series, Inc. (File No. 333-138648, File No. 811-21981)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor Brian D. Bullard M. Susan Gupton David A. Pritchett Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Leonard R. Fuller

Leonard R. Fuller, Board member

POWER OF ATTORNEY

I, R. Clark Hooper, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   The New Economy Fund  (File No. 002-83848, File No. 811-03735)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   SMALLCAP World Fund, Inc. (File No. 033-32785, File No. 811-05888)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton David A. Pritchett Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ R. Clark Hooper

R. Clark Hooper, Board member

POWER OF ATTORNEY

I, Richard G. Newman, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   The Investment Company of America (File No. 002-10811, File No. 811-00116)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Carmelo Spinella Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Richard G. Newman

Richard G. Newman, Board member

POWER OF ATTORNEY

I, Frank M. Sanchez, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 2nd day of June, 2009.

     (City, State)

/s/ Frank M. Sanchez

Frank M. Sanchez, Board member

POWER OF ATTORNEY

I, Steadman Upham, the undersigned Board member of the following registered investment companies (collectively, the “Funds”):

-   The American Funds Income Series – U.S. Government Securities Fund (File No. 002-98199, File No. 811-04318)

-   American Funds Money Market Fund (File No. 333-157162, File No. 811-22277)

-   American Funds Short-Term Tax-Exempt Bond Fund (File No. 033-26431, File No. 811-05750)

-   The American Funds Tax-Exempt Series II – The Tax-Exempt Fund of California (File No. 033-06180, File No. 811-04694)

-   American High-Income Municipal Bond Fund, Inc. (File No. 033-80630, File No. 811-08576)

-   American High-Income Trust (File No. 033-17917, File No. 811-05364)

-   The Bond Fund of America, Inc. (File No. 002-50700, File No. 811-02444)

-   Capital Income Builder, Inc. (File No. 033-12967, File No. 811-05085)

-   Capital World Bond Fund, Inc. (File No. 033-12447, File No. 811-05104)

-   Capital World Growth and Income Fund, Inc. (File No. 033-54444, File No. 811-07338)

-   The Cash Management Trust of America (File No. 002-47940, File No. 811-02380)

-   Intermediate Bond Fund of America (File No. 033-19514, File No. 811-05446)

-   Limited Term Tax-Exempt Bond Fund of America (File No. 033-66214, File No. 811-07888)

-   Short-Term Bond Fund of America, Inc. (File No. 333-135770, File No. 811-21928)

-   The Tax-Exempt Bond Fund of America, Inc. (File No. 002-49291, File No. 811-02421)

-   The Tax-Exempt Money Fund of America (File No. 033-26431, File No. 811-05750)

-   The U.S. Treasury Money Fund of America (File No. 033-38475, File No. 811-06235)

hereby revoke all previous powers of attorney I have signed and otherwise act in my name and behalf in matters involving the Funds and do hereby constitute and appoint

Vincent P. Corti Chad L. Norton Patrick F. Quan Kimberly S. Verdick Steven I. Koszalka Tanya Schneider Courtney R. Taylor M. Susan Gupton Jeffrey P. Regal Ari M. Vinocor

each of them singularly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacities, all Registration Statements of the Funds on Form N-1A or Form N-14, any and all subsequent Amendments, or Post-Effective Amendments to said Registration Statement on Form N-1A or Form N-14 or any successor thereto, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940 as amended, and all related requirements of the U. S. Securities and Exchange Commission.  I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof.

EXECUTED at Los Angeles, CA, this 15th day of June, 2009.

     (City, State)

/s/ Steadman Upham

Steadman Upham, Board member