THE FUND PROVIDES SPANISH TRANSLATIONS IN CONNECTION WITH THE PUBLIC OFFERING
AND SALE OF ITS SHARES. THE FOLLOWING IS A FAIR AND ACCURATE ENGLISH
TRANSLATION OF A SPANISH LANGUAGE PROSPECTUS FOR THE FUND.
/s/ Julie F. Williams
Julie F. Williams, Secretary
[LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
The Cash Management Trust of America(R)
The U.S. Treasury Money Fund of AmericaSM
The Tax-Exempt Money Fund of AmericaSM
Prospectus
DECEMBER 1, 1997
<PAGE>
THE CASH MANAGEMENT TRUST OF AMERICA
THE U.S. TREASURY MONEY FUND OF AMERICA
THE TAX-EXEMPT MONEY FUND OF AMERICA
333 South Hope Street
Los Angeles, CA 90071
- -----------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
Expenses 3 Investment Results 11
................................ ........................................
Financial Highlights 4 Dividends, Distributions and Taxes 13
................................ ........................................
Investment Policies and Fund Organization and Management 14
Risks 7
................................ ........................................
Securities and Investment Shareholder Services 17
Techniques 8
- -----------------------------------------------------------------------------
</TABLE>
The investment objective of each fund is to provide investors with a way to
earn income on their cash reserves (exempt from federal income tax in the case
of Tax-Exempt Money Fund), while preserving capital and maintaining liquidity.
CASH MANAGEMENT TRUST seeks to achieve its objective by investing in a high-
quality portfolio of money market instruments, which may include commercial
paper, commercial bank obligations, savings association obligations, corporate
bonds and notes, and securities of the U.S. Government, its agencies or
instrumentalities.
U.S. TREASURY MONEY FUND seeks to achieve its objective by investing in a
portfolio consisting entirely of U.S. Treasury securities. These securities are
guaranteed by the direct "full faith and credit" pledge of the United States
Government and therefore are of the highest credit quality.
TAX-EXEMPT MONEY FUND seeks to achieve its objective by investing in a high-
quality portfolio of municipal securities.
This prospectus presents information you should know before investing in the
funds. You should keep it on file for future reference.
WHILE THE FUNDS ATTEMPT TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE, THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL BE ABLE TO DO SO. YOU MAY
LOSE MONEY BY INVESTING IN THE FUNDS. YOUR INVESTMENT IN THESE FUNDS IS NOT A
DEPOSIT OR OBLIGATION OF, OR INSURED OR GUARANTEED BY, ANY ENTITY OR PERSON
INCLUDING THE U.S. GOVERNMENT AND THE FEDERAL DEPOSIT INSURANCE CORPORATION.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
09/39/49-010-1297
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
EXPENSES
The effect of the expenses described below is reflected in each fund's share
price and return.
Fund operating expenses are paid out of the fund's assets.
SHAREHOLDER TRANSACTION EXPENSES
The funds have no sales charges on purchases or reinvested dividends, deferred
sales charges, redemption fees or exchange fees. However, if shares of the
funds are exchanged for shares of another fund in The American Funds Group the
sales charge applicable to the other fund may apply.
FUND OPERATING EXPENSES (after fee waiver)
(as a percentage of average net assets)
<TABLE>
<CAPTION>
U.S. TAX-
CASH TREASURY EXEMPT
MANAGEMENT MONEY MONEY
TRUST FUND FUND
- -----------------------------------------------------------------
<S> <C> <C> <C>
Management fees 0.29% 0.30% 0.35%/1/
.................................................................
12b-1 expenses 0.08%/2/ 0.09%/2/ 0.06%/2/
.................................................................
Other expenses 0.20% 0.14% 0.24%
.................................................................
Total fund operating expenses 0.57% 0.53% 0.65%
</TABLE>
1 The Investment Advisory and Service Agreement provides for fee reductions to
the extent that annual operating expenses exceed 0.75% of the average net
assets. Capital Research and Management Company has been voluntarily waiving
fees to the extent necessary to ensure that the fund's expenses do not exceed
0.65% of the average net assets. Without such a waiver, management fees (as a
percentage of average net assets) would have been 0.44%, and total fund
operating expenses would have been 0.74%. Under certain circumstances, as
described in the statement of additional information, the fund may be
required to repay amounts waived.
2 12b-1 expenses may not exceed 0.15% of the fund's average net assets
annually.
EXAMPLES
Assuming a hypothetical annual return of 5% and shareholder transaction and
operating expenses as described above, for every $1,000 you invested, you would
pay the following total expenses over the following periods:
<TABLE>
<CAPTION>
U.S. TAX-
CASH TREASURY EXEMPT
MANAGEMENT MONEY MONEY
TRUST FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
One year $ 6 $ 5 $ 7
................................................................................
Three years $18 $17 $21
................................................................................
Five years $32 $30 $36
................................................................................
Ten years $71 $66 $81
</TABLE>
THESE EXAMPLES ARE NOT MEANT TO REPRESENT YOUR ACTUAL INVESTMENT RESULTS OR
EXPENSES, WHICH MAY VARY.
3
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following information has been audited by Price Waterhouse LLP, independent
accountants. This table should be read together with the financial statements
which are included in the statement of additional information and annual
report.
PER-SHARE DATA AND RATIOS
CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
.......................
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income .049 .050 .052 .031 .025 .036 .061 .078 .086 .068
......................................................................................................
Total income
from investment
operations .049 .050 .052 .031 .025 .036 .061 .078 .086 .068
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net
investment income (.049) (.050) (.052) (.031) (.025) (.036) (.061) (.078) (.086) (.068)
......................................................................................................
Total distributions (.049) (.050) (.052) (.031) (.025) (.036) (.061) (.078) (.086) (.068)
......................................................................................................
Net asset value,
end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
......................................................................................................
Total return 5.03% 5.06% 5.34% 3.10% 2.57% 3.64% 6.26% 8.10% 8.98% 7.00%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
year (in millions) $3,527 $3,304 $2,996 $2,738 $1,940 $2,090 $2,134 $2,145 $1,432 $1,107
......................................................................................................
Ratio of expenses
to average net assets .57% .60% .60% .68% .65% .63% .61% .57% .54% .50%
......................................................................................................
Ratio of net income
to average net assets 4.93% 4.95% 5.21% 3.14% 2.57% 3.59% 6.12% 7.70% 8.62% 6.79%
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
PER-SHARE DATA AND RATIOS
U.S. TREASURY MONEY FUND
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
........................
1997 1996 1995 1994 1993 1992 1991/1/
-------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income .046 .046 .048 .028 .025 .036 .035
......................................................................
Total income
from investment
operations .046 .046 .048 .028 .025 .036 .035
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from
net investment
income (.046) (.046) (.048) (.028) (.025) (.036) (.035)
......................................................................
Total distributions (.046) (.046) (.048) (.028) (.025) (.036) (.035)
......................................................................
Net asset value,
end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
......................................................................
Total return 4.71% 4.66% 4.89% 2.89% 2.49% 3.61% 3.52%/2/
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
year (in millions) $279 $256 $231 $199 $140 $106 $ 59
......................................................................
Ratio of expenses to
average net assets .53% .65% .67% .67% .61% .68% .68%/3/
......................................................................
Ratio of net income
to average net
assets 4.61% 4.53% 4.79% 2.91% 2.43% 3.51% 4.77%
- ----------------------------------------------------------------------
</TABLE>
1 Represents the initial period of operations from February 1, 1991 to
September 30, 1991.
2 Based on operations for the period shown and, accordingly, not representative
of a full year's operations.
3 Annualized.
5
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- -------------------------------------------------------------------------------
PER-SHARE DATA AND RATIOS
TAX-EXEMPT MONEY FUND
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
.......................
1997 1996 1995 1994 1993 1992 1991 1990/1/
--------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income .029 .029 .031 .020 .019 .029 .045 .049
................................................................................
Total income
from investment
operations .029 .029 .031 .020 .019 .029 .045 .049
- ---------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from
net investment
income (.029) (.029) (.031) (.020) (.019) (.029) (.045) (.049)
................................................................................
Total distributions (.029) (.029) (.031) (.020) (.019) (.029) (.045) (049)
................................................................................
Net asset value,
end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
................................................................................
Total return 2.94% 2.91% 3.14% 1.98% 1.90% 2.96% 4.58% 5.04%/2/
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
year (in millions) $ 160 $ 144 $150 $ 170 $ 121 $ 108 $ 107 $ 61
................................................................................
Ratio of expenses to
average net assets
- -- before fee waiver .74% .77% .75% .73% .79% .77% .74% .87%/3/
................................................................................
Ratio of expenses to
average net assets
- -- after fee waiver .65% .65% .65% .65% .65% .65% .65% .65%/3/
................................................................................
Ratio of net income
to average net assets 2.94% 2.88% 3.09% 1.99% 1.88% 2.95% 4.43% 5.16%
- --------------------------------------------------------------------------------
</TABLE>
1 Represents the initial period of operations from October 24, 1989 to
September 30, 1990.
2 Based on operations for the period shown and, accordingly, not representative
of a full year's operations.
3 Annualized.
6
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
INVESTMENT POLICIES AND RISKS
Each fund aims to provide you with a way to earn income on your cash reserves
(free from federal income tax in the case of Tax-Exempt Money Fund) while
preserving capital and maintaining liquidity.
The investment objective of each fund is to provide investors with a way to
earn income on their cash reserves (exempt from federal income tax in the case
of Tax-Exempt Money Fund), while preserving capital and maintaining liquidity.
Each fund invests only in securities determined, in accordance with procedures
established by its board of trustees, to present minimal credit risks. It is
the current policy of Cash Management Trust and Tax-Exempt Money Fund to invest
only in instruments rated in the highest short-term rating categories by
Moody's Investors Service, Inc. and Standard & Poor's Corporation (for example,
commercial paper rated "Prime-1" and "A-1" by Moody's and S&P, respectively or,
in the case of Tax-Exempt Money Fund, in instruments that do not have short-
term ratings by Moody's or S&P but are determined to be of comparable quality
in accordance with procedures established by the boards) or that are issued,
guaranteed or insured by the U.S. or Canadian governments, their agencies or
instrumentalities as to the payment of principal and interest. MORE INFORMATION
ON EACH FUND'S INVESTMENT POLICIES IS CONTAINED IN THE STATEMENT OF ADDITIONAL
INFORMATION.
CASH MANAGEMENT TRUST
The fund seeks to achieve its objective by investing in a high quality
portfolio of money market instruments, which may include commercial paper,
commercial bank obligations, savings association obligations, corporate bonds
and notes, and securities of the U.S. or Canadian governments, their agencies
or instrumentalities. The fund may also enter into repurchase agreements. See
"Securities and Investment Techniques" below.
U.S. TREASURY MONEY FUND
The fund seeks to achieve its objective by investing in a portfolio consisting
entirely of U.S. Treasury securities. These securities are guaranteed by the
direct "full faith and credit" pledge of the United States Government and
therefore are of the highest credit quality. Since the fund invests solely in
U.S. Treasury securities, its dividends are generally exempt from most state
and local taxes; however, dividends are not exempt from federal income taxes.
See "Dividends, Distributions and Taxes" below.
TAX-EXEMPT MONEY FUND
The fund seeks to achieve its objective by investing in a high-quality
portfolio of municipal securities. Dividends paid by the fund are subject to
most state and
7
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
local taxes. See "Securities and Investment Techniques" below. The fund
generally invests substantially all of its assets in securities the interest on
which is exempt from federal income taxes. However, the fund may invest in
taxable short-term securities to take advantage of unusual investment
opportunities. The fund may also invest up to 20% of its assets in certain
municipal securities, the interest on which would constitute an item of tax
preference subject to federal alternative minimum tax on corporations and
individuals. See "Dividends, Distributions and Taxes" below. When abnormal
market conditions require a temporary defensive position, the fund may invest
substantially all its assets in taxable short-term securities. In any event, as
a matter of fundamental policy, the fund will under normal market conditions
invest at least 80% of its total assets in securities the interest on which is
exempt from federal income taxes (and is not subject to federal alternative
minimum tax).
Each fund's fundamental investment restrictions (described in the statement of
additional information) and objective may not be changed without shareholder
approval. All other investment practices may be changed by each fund's board.
EACH FUND MAY NOT ACHIEVE ITS INVESTMENT OBJECTIVE DUE TO MARKET CONDITIONS AND
OTHER FACTORS. INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT OR ANY OTHER ENTITY OR PERSON. THERE CAN BE NO ASSURANCE
THAT THE FUNDS WILL BE ABLE TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE.
- --------------------------------------------------------------------------------
SECURITIES AND INVESTMENT TECHNIQUES
MONEY MARKET INSTRUMENTS
The funds invest in various high-quality money market instruments that mature,
or may be redeemed or resold, in 13 months or less (25 months or less in the
case of U.S. Government securities). For Cash Management Trust they include:
(1) commercial paper (notes issued by corporations or governmental bodies), (2)
commercial bank obligations such as certificates of deposit, bank notes, and
bankers' acceptances (time drafts on a commercial bank where the bank accepts
an irrevocable obligation to pay at maturity), (3) savings association and
savings bank obligations, (4) securities of the U.S. Government, its agencies
or instrumentalities, and (5) corporate bonds and notes. Cash Management Trust
may invest in securities issued by non-U.S. entities or in securities with
credit and liquidity support features provided by non-U.S. entities. Since
these securities are issued by entities that may have substantial operations
outside the U.S. they may involve additional risks and
8
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
considerations. These securities may be affected by unfavorable political,
economic, or governmental developments that could affect the repayment of
principal or payment of interest. Securities of U.S. issuers with substantial
operations outside the U.S. may also be subject to similar risks.
U.S. Treasury Money Fund may invest in instruments that include U.S. Treasury
bills, notes, and bonds. Tax-Exempt Money Fund invests in money market
instruments that are issued by states, territories, or possessions of the
United States and the District of Columbia and their political subdivisions,
agencies and instrumentalities ("municipalities") to obtain funds for various
public purposes. Tax-Exempt Money Fund may purchase various types of municipal
securities including tax, bond, revenue, and grant anticipation notes,
construction loan notes, municipal commercial paper, general obligation bonds,
revenue bonds and industrial development bonds. In addition, Tax-Exempt Money
Fund may invest in municipal securities that are supported by credit and
liquidity enhancements, which include letters of credit from domestic and non-
U.S. banks and other financial institutions. Changes in the credit quality of
these institutions could cause the fund to experience a loss and may affect its
share price. To the extent that the credit quality of these institutions is
downgraded, investments in such securities could increase the level of
illiquidity of the fund's portfolio for the remaining maturity of the
instruments.
REPURCHASE AGREEMENTS
Cash Management Trust may enter into repurchase agreements, under which it buys
a security and obtains a simultaneous commitment from the seller to repurchase
the security at a specified time and price. The seller must maintain with the
fund's custodian collateral equal to at least 100% of the repurchase price
including accrued interest as monitored daily by Capital Research and
Management Company. The fund only enters into repurchase agreements involving
securities in which it could otherwise invest and with selected banks and
securities dealers whose financial condition is monitored by Capital Research
and Management Company. If the seller under the repurchase agreement defaults,
the fund may incur a loss if the value of the collateral securing the
repurchase agreement has declined and may incur disposition costs in connection
with liquidating the collateral. If bankruptcy proceedings are commenced with
respect to the seller, liquidation of the collateral by the fund may be delayed
or limited.
9
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
VARIABLE AND FLOATING RATE OBLIGATIONS
The funds may invest in variable and floating rate obligations which have
interest rates that are adjusted at designated intervals or whenever interest
rates change. The rate adjustment feature tends to limit the extent to which
the market value of the obligation will fluctuate.
FORWARD COMMITMENTS
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 securities beginning on the date of the agreement.
When the funds agree to sell such securities, they do not participate in
further gains or losses with respect to the securities beginning on 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.
"PUT" SECURITIES
Cash Management Trust and Tax-Exempt Money Fund may purchase securities that
provide for the right to resell them to the issuer, a bank, or a broker-dealer
typically at the par value plus accrued interest within a specified period of
time prior to maturity. This right is commonly known as a "put" or a "demand
feature." The funds may pay a higher price for such securities than would
otherwise be paid for the same security without such a right. The funds will
enter into these transactions only with issuers, banks, or broker-dealers that
are determined by Capital Research and Management Company to present minimal
credit risks. If an issuer, bank, or broker-dealer should default on its
obligation to repurchase, the funds might be unable to recover all or a portion
of any loss sustained. There is no specific limit on the extent to which the
funds may invest in such securities.
MATURITY
Each fund determines net asset value using the penny-rounding method, according
to rules of the Securities and Exchange Commission, which permits it to
maintain a constant net asset value of $1.00 per share under normal conditions.
These rules require, among other things, that each fund limit its investments
to securities that will mature no more than 13 months (25 months in the case of
securities of the U.S. Government, its agencies or instrumentalities) from the
date of purchase, and that the dollar-weighted average portfolio maturity of
its investments be 90 days or less. For this purpose, certain variable and
floating rate obligations and "put" securities which may
10
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
otherwise have stated maturities in excess of 13 months (25 months in the case
of U.S. Government securities) will be deemed to have remaining maturities
equal to the period remaining until the next readjustment of the interest rate
or until the fund is entitled to repayment or repurchase of the security. Cash
Management Trust, U.S. Treasury Money Fund and Tax-Exempt Money Fund currently
intend to maintain dollar-weighted average portfolio maturities of
approximately 35 days or less, 90 days or less and 60 days or less,
respectively.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
The funds may compare investment results to various indices or other mutual
funds. Fund results may be calculated on a total return and/or yield (or
effective yield) basis. Both yield figures are based on historical earnings and
are not intended to indicate future performance. Tax-equivalent yields may be
calculated for Tax-Exempt Money Fund. Total returns assume the reinvestment of
all dividends and any capital gain distributions.
TOTAL RETURN is the change in value of an investment in the fund over a given
period, assuming reinvestment of any dividends and capital gain
distributions.
YIELD is computed, according to a formula mandated by the Securities and
Exchange Commission, by taking the average dividends paid by the fund over a
seven-day period. This income is then "annualized" and shown as a percentage
of the investment. The "effective yield" is calculated similarly but, when
annualized, the income earned by an investment in the fund is assumed to be
reinvested. For current yield information, phone 800/421-8068.
INVESTMENT RESULTS
(FOR PERIODS ENDED SEPTEMBER 30, 1997)
<TABLE>
<CAPTION>
CASH
AVERAGE ANNUAL MANAGEMENT U.S. TREASURY TAX-EXEMPT
TOTAL RETURNS: TRUST MONEY FUND MONEY FUND
- -----------------------------------------------------------
<S> <C> <C> <C>
One year 5.03% 4.71% 2.95%
...........................................................
Five years 4.22% 3.92% 2.57%
...........................................................
Ten years 5.49% -- --
...........................................................
Lifetime 7.61% 4.02%/1/ 3.20%/2/
- -----------------------------------------------------------
7-day Yield/3/: 5.07% 4.45% 3.11%
Effective Yield/3/: 5.20% 4.55% 3.16%
</TABLE>
1 The fund began investment operations February 1, 1991.
2 The fund began investment operations October 24, 1989.
3 These fund results were calculated according to a required standard formula.
11
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
CASH MANAGEMENT TRUST
-------------------------------------------------
Here are the fund's annual total returns which are being supplied on a calendar
year basis.
[begin bar chart]
1987 6.42
1988 7.30
1989 9.05
1990 7.89
1991 5.51
1992 3.14
1993 2.54
1994 3.66
1995 5.50
1996 4.93
[end bar chart]
-------------------------------------------------
U.S. TREASURY MONEY FUND
-------------------------------------------------
Here are the fund's annual total returns which are being supplied on a calendar
year basis.
-------------------------------------------------
[begin bar chart]
1992 3.05
1993 2.48
1994 3.36
1995 5.03
1996 4.59
[end bar chart]
12
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
TAX-EXEMPT MONEY FUND
-------------------------------------------------
Here are the fund's annual total returns which are being supplied on a calendar
year basis.
[begin bar chart]
1990 5.40
1991 4.17
1992 2.51
1993 1.83
1994 2.23
1995 3.21
1996 2.85
[end bar chart]
-------------------------------------------------
Past results are not an indication of future results.
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Each fund declares dividends from net investment income daily and distributes
the accrued dividends, which may fluctuate, to shareholders each month.
Dividends begin accruing one day after payment for shares is received by the
fund or American Funds Service Company.
If a shareholder has elected to receive dividends and/or capital gain
distributions in cash, and the postal or other delivery service is unable to
deliver checks to the shareholder's address of record, or the shareholder does
not respond to mailings from American Funds Service Company with regard to
uncashed distribution checks, the shareholder's distribution option will
automatically be converted to having all dividends and other distributions
reinvested in additional shares.
FEDERAL TAXES
In any fiscal year in which a fund qualifies as a regulated investment company
and distributes to shareholders all net investment income and net capital
gains, the fund itself is relieved of federal income tax.
13
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
- --------------------------------------------------------------------------------
The tax treatment of dividends and any capital gains is the same whether they
are reinvested or received in cash. Dividends distributed by Cash Management
Trust and U.S. Treasury Money Fund are taxable for federal income tax purposes
(unless you are exempt from taxation or entitled to deferral). Dividends
distributed by U.S. Treasury Money Fund will be taxable for federal income tax
purposes but will be tax-exempt for purposes of most states' personal income
tax. Dividends distributed by Tax-Exempt Money Fund generally will be exempt
from federal income tax but generally will be subject to state income tax. This
favorable tax treatment may not apply to Tax-Exempt Money Fund shareholders who
are "substantial users" (or "related persons") of facilities financed by
securities held by Tax-Exempt Money Fund. None of the funds generally realizes
or distributes capital gains; however, if they do, they will be subject to
federal and state income tax. Early each calendar year, you will be notified as
to the amount and federal tax status of all dividends and capital gains paid
during the prior year. You are required by the Internal Revenue Code to report
dividends to the federal government even if they are tax-exempt.
YOU MUST PROVIDE EACH FUND WITH A CERTIFIED CORRECT TAXPAYER IDENTIFICATION
NUMBER (GENERALLY YOUR SOCIAL SECURITY NUMBER) AND CERTIFY THAT YOU ARE NOT
SUBJECT TO BACKUP WITHHOLDING. IF YOU FAIL TO DO SO THE IRS CAN REQUIRE EACH
FUND TO WITHHOLD 31% OF YOUR TAXABLE DISTRIBUTIONS AND REDEMPTIONS. Federal law
also requires the fund to withhold 30% or the applicable tax treaty rate from
dividends paid to certain nonresident alien, non-U.S. partnership and non-U.S.
corporation shareholder accounts.
This is a brief summary of some of the tax laws that affect your investment in
the funds. Please see the statement of additional information and your tax
adviser for further information.
- --------------------------------------------------------------------------------
FUND ORGANIZATION AND MANAGEMENT
FUND ORGANIZATION AND VOTING RIGHTS
Each fund is an open-end, diversified management investment company and was
organized as a Massachusetts business trust (Cash Management Trust in 1976,
Tax-Exempt Money Fund in 1989 and U.S. Treasury Money Fund in 1990). Each
fund's operations are supervised by its board of trustees which meets
periodically and performs duties required by applicable state and federal laws.
Members of the boards who are not employed by Capital Research and Management
Company or its affiliates are paid certain fees for services rendered to the
funds as described in the statement of additional information. They may elect
to defer all or a portion of these fees through a deferred compensation plan
14
<PAGE>
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS / PROSPECTUS
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in effect for each fund. 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
its shares, the applicable fund will hold a meeting at which any member of the
board could be removed by a majority vote. Since the funds use a combined
prospectus, each fund may be liable for misstatements, inaccuracies, or
incomplete disclosure concerning any other fund contained in this prospectus.
THE INVESTMENT ADVISER
Capital Research and Management Company, a large and experienced investment
management organization founded in 1931, is the investment adviser to these
funds and other funds, including those in The American Funds Group. Capital
Research and Management Company, a wholly owned subsidiary of The Capital Group
Companies, Inc., is headquartered at 333 South Hope Street, Los Angeles, CA
90071.
Capital Research and Management Company manages the investment portfolio and
business affairs of the funds and receives an annual fee from each fund that
may not exceed:
Cash Management Trust: 0.32% of the fund's average net assets;
U.S. Treasury Money Fund: 0.30% of the fund's average net assets;
Tax-Exempt Money Fund: 0.44% of the fund's average net assets
and declines at certain asset levels for each fund. These management fee
schedules do not reflect voluntary fee waivers that may be made by Capital
Research and Management Company from time to time or fee waivers that may be
made under a fund's Investment Advisory and Service Agreement with Capital
Research and Management Company. The total management fees paid by the funds,
as a percentage of average net assets for the previous fiscal year, are listed
earlier under "Expenses."
Capital Research and Management Company and its affiliated companies have
adopted a personal investing policy that is consistent with the recommendations
contained in the May 9, 1994 report issued by the Investment Company
Institute's Advisory Group on Personal Investing. This policy has also been
incorporated into each fund's code of ethics.
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MONEY MARKET FUNDS / PROSPECTUS
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PLAN OF DISTRIBUTION
Each fund has a Plan of Distribution or "12b-1 Plan" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by the board. The 12b-1 fees paid by each
fund, as a percentage of average net assets for the previous fiscal year, are
discussed above under "Expenses." Since these fees are paid out of a fund's
assets on an ongoing basis, over time they will increase the cost of an
investment and may cost you more than paying other types of sales loads.
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
American Funds Distributors, Inc. and American Funds Service Company serve as
the principal underwriter and transfer agent for each fund, respectively. They
are headquartered at 333 South Hope Street, Los Angeles, CA 90071 and 135 South
State College Boulevard, Brea, CA 92821, respectively.
AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS
[MAP OF AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS APPEARS HERE]
WESTERN SERVICE CENTER
American Funds Service Company
P.O. Box 2205
Brea, California
92822-2205
Fax: 714/671-7080
WESTERN CENTRAL SERVICE CENTER
American Funds Service Company
P.O. Box 659522
San Antonio, Texas
78265-9522
Fax: 210/530-4050
EASTERN CENTRAL SERVICE CENTER
American Funds Service Company
p.o. Box 6007
Indianapolis, Indiana
46206-6007
Fax: 317/735-6620
EASTERN SERVICE CENTER
American Funds Service Company
P.O. Box 2280
Norfolk, Virginia
23501-2280
Fax: 804/670-4773
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MONEY MARKET FUNDS / PROSPECTUS
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SHAREHOLDER SERVICES
Each fund offers you a valuable array of services you can use to alter your
investment program as your needs and circumstances change. These services,
which are summarized below, are available only in states where they may be
legally offered and may be terminated or modified at any time upon 60 days'
written notice. A COMPLETE DESCRIPTION OF SHAREHOLDER SERVICES AND ACCOUNT
POLICIES IS CONTAINED IN THE FUNDS' STATEMENT OF ADDITIONAL INFORMATION. In
addition, an easy-to-read guide to owning a fund in The American Funds Group
titled "Welcome to the Family" is sent to new shareholders and is available by
writing or calling American Funds Service Company.
THE SERVICES DESCRIBED MAY NOT BE AVAILABLE THROUGH SOME RETIREMENT PLANS OR
ACCOUNTS HELD BY INVESTMENT DEALERS. IF YOU ARE INVESTING IN SUCH A MANNER, YOU
SHOULD CONTACT YOUR PLAN ADMINISTRATOR/TRUSTEE OR DEALER ABOUT WHAT SERVICES
ARE AVAILABLE AND WITH QUESTIONS ABOUT YOUR ACCOUNT.
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PURCHASING SHARES
HOW TO PURCHASE SHARES
Generally, you may open an account by contacting any investment dealer
authorized to sell the funds' shares. You may add to your account through your
dealer or directly through American Funds Service Company by mail, computer,
wire, or bank debit. You may also establish or add to your account by
exchanging shares from any of your other accounts in The American Funds Group.
The funds and American Funds Distributors reserve the right to reject any
purchase order for any reason. This includes exchange purchase orders that may
place an unfair burden on other shareholders due to their frequency.
Various purchase options are available as described below, subject to certain
investment minimums and limitations described in the statement of additional
information and "Welcome to the Family."
Automatic Investment Plan
You may invest monthly or quarterly through automatic withdrawals from your
bank account.
Automatic Reinvestment
You may reinvest your dividends and capital gain distributions into the
funds (with no sales charge). This will be done automatically unless you
elect to have the dividends and/or capital gain distributions paid to you in
cash.
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MONEY MARKET FUNDS / PROSPECTUS
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Cross-Reinvestment
You may invest your dividends and capital gain distributions into any other
fund in The American Funds Group.
Exchange Privilege
You may exchange your shares into other funds in The American Funds Group,
generally with no sales charge. Exchanges of shares from the money market
funds that were initially purchased with no sales charge will generally be
subject to the appropriate sales charge. You may also elect to automatically
exchange shares among any of the funds in The American Funds Group. Exchange
requests may be made in writing, by telephone including American
FundsLine(R), or computer using American FundsLine OnLineSM (see below), or
by fax. EXCHANGES HAVE THE SAME TAX CONSEQUENCES AS ORDINARY SALES AND
PURCHASES.
Retirement Plans
You may invest in Cash Management Trust and U.S. Treasury Money Fund through
various retirement plans. Tax-Exempt Money Fund is not available for
investment by retirement plans. For further information contact your
investment dealer or American Funds Distributors.
SHARE PRICE
Each fund's share price, also called net asset value, is determined as of the
close of trading (normally 4:00 p.m., Eastern time) every day the New York
Stock Exchange is open. Each fund calculates its net asset value per share,
generally using market prices, by dividing the total value of its assets after
subtracting liabilities by the number of its shares outstanding. The net asset
value per share of the money market funds normally will remain constant at
$1.00 based on the funds' current practice of valuing their shares using the
penny-rounding method in accordance with rules of the Securities and Exchange
Commission. Shares are purchased at the offering price next determined after
your investment is received and accepted by American Funds Service Company.
INVESTMENT MINIMUMS
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To establish an account $2,500
For a retirement plan account $1,000
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account $ 25
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MONEY MARKET FUNDS / PROSPECTUS
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SALES CHARGES
The money market funds have no sales charges on purchases of fund shares.
However, if shares of any money market fund are exchanged for shares of another
fund in The American Funds Group, the sales charge applicable to the other fund
may apply.
ADDITIONAL DEALER COMPENSATION
Up to 0.15% of average net assets is paid annually to qualified dealers for
providing certain services pursuant to each fund's Plan of Distribution.
American Funds Distributors currently provides additional compensation to the
top 100 dealers who have sold shares of funds in The American Funds Group based
on the pro rata share of a qualifying dealer's sales.
REDUCING YOUR SALES CHARGE
You and your immediate family may combine investments to reduce your costs. You
must let your investment dealer or American Funds Service Company know if you
qualify for a reduction in your sales charge using one or any combination of
the methods described below.
Aggregation
Investments that may be aggregated include those made by you, your spouse
and your children under the age of 21, if all parties are purchasing shares
for their own account(s), including any business account solely "controlled
by," as well as any retirement plan or trust account solely for the benefit
of, these individuals. Investments made for multiple employee benefit plans
of a single employer or "affiliated" employers may be aggregated provided
they are not also aggregated with individual accounts. Finally, investments
made by a common trust fund or other diversified pooled account not
specifically formed for the purpose of accumulating fund shares may be
aggregated.
Purchases made for nominee or street name accounts will generally not
be aggregated with those made for other accounts unless qualified as
described above.
Concurrent Purchases
You may combine concurrent purchases of two or more funds in The American
Funds Group, except direct purchases of the money market funds. Shares of
the money market funds purchased through an exchange, reinvestment or cross-
reinvestment from a fund having a sales charge do qualify.
19
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MONEY MARKET FUNDS / PROSPECTUS
Right of Accumulation
You may take into account the current value of your existing holdings in The
American Funds Group to determine your sales charge. Direct purchases of the
money market funds are excluded.
Statement of Intention
You may enter into a non-binding commitment to invest a certain amount
(which at your request, may include purchases made during the previous
90 days) in non-money market fund shares over a 13-month period. A portion
of your account may be held in escrow to cover additional sales charges
which may be due if your total investments over the statement period are
insufficient to qualify for the applicable sales charge reduction.
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SELLING SHARES
HOW TO SELL SHARES
You may sell (redeem) shares in your account by contacting your investment
dealer or American Funds Service Company. You may also use American
FundsLine(R) or American FundsLine OnLineSM (see below). In addition, you may
sell shares in amounts of $50 or more automatically. If you sell shares through
your investment dealer you may be charged for this service. Shares held for you
in your dealer's street name must be sold through the dealer.
Shares are sold at the net asset value next determined after your request is
received in good order by American Funds Service Company. Sale requests may be
made in writing, by telephone, including American FundsLine(R), by computer
using American FundsLine OnLineSM (see below), or by fax. Sales by telephone,
computer or fax are limited to $50,000 in accounts registered to individual(s)
(including non-retirement trust accounts). In addition, checks must be made
payable to the registered shareholder(s) and mailed to an address of record
that has been used with the account for at least 10 days.
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 15 calendar
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 Investment Company Act of 1940), 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.
20
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MONEY MARKET FUNDS / PROSPECTUS
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The funds may, with 60 days' written notice, close your account if due to a
sale of shares the account has a value of less than the minimum required
initial investment.
Generally, written requests to sell shares must be signed by you and must
include any shares you wish to sell that are in certificate form. Your
signature must be guaranteed by a member firm of a domestic stock exchange or
the National Association of Securities Dealers, Inc., bank, savings
association, or credit union that is an eligible guarantor institution. A
signature guarantee is not currently required for any sale of $50,000 or less
provided the check is made payable to the registered shareholder(s) and is
mailed to the address of record on the account, and provided the address has
been used with the account for at least 10 days. Additional documentation may
be required for sale of shares held in corporate, partnership or fiduciary
accounts.
In the case of the money market funds, you may establish (use the account
application) telephone redemption privileges (which will enable you to have
redemption proceeds sent to your bank account) and/or check writing privileges.
If you request check writing privileges, you will be provided with checks that
you may use to draw against your account. These checks may be made payable to
anyone you designate and must be signed by the authorized number of registered
shareholders exactly as indicated on your checking account signature card.
You may reinvest proceeds from a redemption or a dividend or capital gain
distribution without a sales charge (any contingent deferred sales charge paid
will be credited to your account) in any fund in The American Funds Group
within 90 days after the date of the redemption or distribution. Redemption
proceeds of shares representing direct purchases in the money market funds are
excluded. Reinvestment will be at the next calculated net asset value after
receipt and acceptance by American Funds Service Company.
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OTHER IMPORTANT THINGS TO REMEMBER
AMERICAN FUNDSLINE(R) AND AMERICAN FUNDSLINE ONLINESM
You may check your share balance, the price of your shares, or your most recent
account transactions, sell shares (up to $50,000 per shareholder each day), or
exchange shares around the clock with American FundsLine(R) or American
FundsLine OnLineSM. To use this service, call 800/325-3590 from a TouchTone(TM)
telephone or access the American Funds Web site on the Internet at
www.americanfunds.com.
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MONEY MARKET FUNDS / PROSPECTUS
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TELEPHONE AND COMPUTER PURCHASES, SALES AND EXCHANGES
Unless you opt out of the telephone or computer (including American
FundsLine(R) or American FundsLine OnLineSM) or fax purchase, sale and/or
exchange options (see below), you agree to hold the 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) which may be incurred in connection with the exercise
of these privileges, provided 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, the fund may be liable for losses due to unauthorized or fraudulent
instructions.
Generally, all shareholders are automatically eligible to use these options.
However, you may elect to opt out of these options by writing American Funds
Service Company. (You may also reinstate them at any time by writing to
American Funds Service Company.)
ACCOUNT STATEMENTS
You will receive regular confirmation statements reflecting transactions in
your account. Dividend and capital gain reinvestments and purchases through
automatic investment plans and certain retirement plans will be confirmed at
least quarterly.
22
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NOTES
23
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FOR SHAREHOLDER SERVICES FOR DEALER SERVICES
American Funds American Funds
Service Company Distributors
800/421-0180 ext. 1 800/421-9900 ext. 11
FOR 24-HOUR INFORMATION
American American Funds
FundsLine(R) Internet Web site
800/325-3590 http://www.americanfunds.com
Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.
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MULTIPLE TRANSLATIONS
This prospectus may be translated into other languages. In
the event of any inconsistency or ambiguity as to the
meaning of any word or phrase in a translation, the English
text will prevail.
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OTHER FUND INFORMATION
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Includes financial statements, detailed performance
information, portfolio holdings, a statement from portfolio
management and the independent accountants' report (in the
annual report).
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Contains more detailed information on all aspects of each
fund, including each fund's financial statements.
A current SAI has been filed with the Securities and
Exchange Commission ("SEC"). It is incorporated by
reference into this prospectus and is available along with
other related materials on the SEC's Internet Web site at
http://www.sec.gov.
CODE OF ETHICS
Includes a description of the funds' personal investing
policy.
To request a free copy of any of the documents above:
Call American Funds or Write to the Secretary
Service Company of the fund
800/421-0180 ext. 1 333 South Hope Street
Los Angeles, CA 90071
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This prospectus has been printed on recycled paper.
[RECYCLING LOGO APPEARS HERE]
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