CASH MANAGEMENT TRUST OF AMERICA, 485BPOS, 2000-11-30

CASH MANAGEMENT TRUST OF AMERICA
485BPOS, 2000-11-30

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SIGNED
SEC. FILE NOS. 2-47940
811-2380

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
Registration Statement
Under
the Securities Act of 1933
Post-Effective Amendment No. 44
and
Registration Statement
Under
The Investment Company Act of 1940
Amendment No. 38

THE CASH MANAGEMENT TRUST OF AMERICA
(Exact Name of Registrant as specified in charter)
333 South Hope Street
Los Angeles, California 90071
(Address of principal executive offices)

Registrant's telephone number, including area code:
(213) 486-9200

JULIE F. WILLIAMS, SECRETARY
THE CASH MANAGEMENT TRUST OF AMERICA
333 SOUTH HOPE STREET
LOS ANGELES, CALIFORNIA 90071
(NAME AND ADDRESS OF AGENT FOR SERVICE)

Copies to:
ROBERT E. CARLSON, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER LLP
555 S. FLOWER STREET LOS ANGELES, CA 90071-2371
(COUNSEL FOR THE REGISTRANT)

Approximate date of proposed public offering:
It is proposed that this filing become effective on December 1, 2000 pursuant
to paragraph (b) of rule 485.

<PAGE>

The Cash Management Trust of America/(R)/
The U.S. Treasury Money Fund of America/SM/
The Tax-Exempt Money Fund of America/SM/

Prospectus
DECEMBER 1, 2000

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>

---------------------------------------------------------
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, California 90071

<TABLE>
<CAPTION>
TICKER NEWSPAPER FUND
FUND SYMBOL ABBREV NO.
------------------------------------------------------------------
<S> <C> <C> <C>
The Cash Management Trust of America
Class A CTAXX CashMgt 09
Class B CTBXX CashMgtB 209
------------------------------------------------------------------
The U.S. Treasury Money Fund of America
Class A UTAXX Us Tr Am 49
------------------------------------------------------------------
The Tax-Exempt Money Fund of America
Class A TEAXX TEMony 39
</TABLE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS
-------------------------------------------------------
<S> <C>
Risk/Return Summary 2
-------------------------------------------------------
Fees and Expenses of the Funds 7
-------------------------------------------------------
Investment Objective, Strategies and Risks 9
-------------------------------------------------------
Management and Organization 10
-------------------------------------------------------
Shareholder Information 11
-------------------------------------------------------
Choosing a Share Class 12
-------------------------------------------------------
Purchase and Exchange of Shares 13
-------------------------------------------------------
Sales Charges 14
-------------------------------------------------------
Sales Charge Waivers 15
-------------------------------------------------------
Plans of Distribution 16
-------------------------------------------------------
How to Sell Shares 17
-------------------------------------------------------
Distributions and Taxes 19
-------------------------------------------------------
Financial Highlights 20
-------------------------------------------------------
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS
MMF-010-1200/RRD

<PAGE>

---------------------------------------------------------
RISK/RETURN SUMMARY

The funds provide you an opportunity to earn income on your cash reserves (free
from federal income tax in the case of Tax-Exempt Money Fund) while preserving
the value of your investment and maintaining liquidity. The Cash Management
Trust seeks to achieve this objective by investing primarily in high quality
money market instruments such as commercial paper and commercial bank
obligations; U.S. Treasury Money Fund by investing exclusively in U.S. Treasury
securities; and Tax-Exempt Money Fund by investing primarily in securities that
are exempt from regular federal income tax (the fund may, however, invest in
securities that would subject you to alternative minimum taxes).

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.

ALTHOUGH THE FUNDS ATTEMPT TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE, THERE CAN BE NO GUARANTEE THAT THE FUNDS WILL BE ABLE TO DO SO, AND YOU
MAY LOSE MONEY BY INVESTING IN THE FUNDS.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

INVESTMENT RESULTS

The following information provides some indication of the risks of investing in
the funds by showing changes in the funds' investment results from year to
year. Past results are not an indication of future results.

CASH MANAGEMENT TRUST

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
[bar chart]
1990 7.89%
1991 5.51%
1992 3.14%
1993 2.54%
1994 3.66%
1995 5.50%
1996 4.93%
1997 5.11%
1998 5.05%
1999 4.68%
[end chart]

The fund's year-to-date return for the nine months ended September 30, 2000
was 4.34%.
-------------------------------------------------------------------------------

The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
<S> <C> <C>
HIGHEST 1.95% (quarter ended June 30, 1990)
LOWEST 0.62% (quarter ended June 30, 1993)
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

U.S. TREASURY MONEY FUND

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
[bar chart]
1992 3.05%
1993 2.48%
1994 3.36%
1995 5.03%
1996 4.59%
1997 4.75%
1998 4.44%
1999 4.11%
[end chart]

The fund's year-to-date return for the nine months ended September 30, 2000
was 3.87%.
-------------------------------------------------------------------------------

The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
<S> <C> <C>
HIGHEST 1.27% (quarter ended June 30, 1995)
LOWEST 0.60% (quarter ended June 30, 1993)
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

TAX-EXEMPT MONEY FUND

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
[bar chart]
1990 5.40%
1991 4.17%
1992 2.51%
1993 1.83%
1994 2.23%
1995 3.21%
1996 2.85%
1997 3.00%
1998 2.83%
1999 2.60%
[end chart]

The fund's year-to-date return for the nine months ended September 30, 2000
was 2.54%.
-------------------------------------------------------------------------------

The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
<S> <C> <C>
HIGHEST 1.37% (quarter ended December 31, 1990)
LOWEST 0.42% (quarter ended March 31, 1994)
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

For periods ended December 31, 1999:

<TABLE>
<CAPTION>
AVERAGE ANNUAL ONE FIVE TEN 7-DAY
TOTAL RETURN YEAR YEARS YEARS LIFETIME YIELD
<S> <C> <C> <C> <C> <C>
CASH MANAGEMENT TRUST
Class A - began 11/3/76
(with no sales charge imposed) 4.68% 5.05% 4.79% 7.34% 5.32%
Class B - began 3/15/00 N/A N/A N/A N/A N/A
--------------------------------------------------------------------------
U.S. TREASURY MONEY FUND
Class A - began 2/1/91 4.11% 4.58% N/A 4.10% 4.47%
(with no sales charge imposed)
--------------------------------------------------------------------------
TAX-EXEMPT MONEY FUND
Class A - began 10/24/89
(with no sales charge imposed) 2.60% 2.90% 3.06% 3.10% 3.42%
</TABLE>

(For current yield information, please call American FundsLine at
1-800-325-3590).

All fund results reflect the reinvestment of dividend and capital gain
distributions. Class B shares are subject to a maximum deferred sales charge of
5.00% if shares are redeemed within the first year of purchasing them. The
deferred sales charge declines thereafter until it reaches 0% after six years.
Class B shares convert to Class A shares after eight years. Since Cash
Management Trust's Class B shares began investment operations on March 15,
2000, no results are available as of the most recent calendar year-end.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
FEES AND EXPENSES OF THE FUNDS

<TABLE>
<CAPTION>
SHAREHOLDER FEES
(fees paid directly from your investment)
----------------------------------------------------------------
<S> <C>
Maximum sales charge imposed on purchases 0%
(as a percentage of offering price)
----------------------------------------------------------------
Maximum sales charge imposed on reinvested dividends 0%
----------------------------------------------------------------
Maximum deferred sales charge 5.00%/1/
----------------------------------------------------------------
Redemption or exchange fees 0%
</TABLE>

1 Applies to only Class B shares of Cash Management Trust. Deferred sales
charges are reduced after 12 months and eliminated after six years. There is
no deferred sales charge for U.S. Treasury Money Fund or Tax-Exempt Money
Fund.

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)
CLASS A CLASS B/1/
------------------------------------------------------------------------
<S> <C> <C>
CASH MANAGEMENT TRUST
------------------------------------------------------------------------
Management Fees 0.28% 0.28%
Distribution and/or Service (12b-1) Fees 0.08%/2//2/ 0.90%
Other Expenses 0.25% 0.25%
Total Annual Fund Operating Expenses 0.61% 1.43%
U.S. TREASURY MONEY FUND

------------------------------------------------------------------------
Management Fees 0.30% N/A
Distribution and/or Service (12b-1) Fees 0.10%/2/ N/A
Other Expenses 0.22% N/A
Total Annual Fund Operating Expenses 0.62% N/A
TAX-EXEMPT MONEY FUND
------------------------------------------------------------------------
Management Fees 0.39% N/A
Distribution and/or Service (12b-1) Fees 0.04%/2/ N/A
Other Expenses 0.21% N/A
Total Annual Fund Operating Expenses 0.64% N/A
</TABLE>

1 Annualized.

2 Class A 12b-1 expenses may not exceed 0.15% of the fund's average net assets
annually.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the funds
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in each fund for the time periods indicated, that your
investment has a 5% return each year and that each fund's operating expenses
remain the same as shown above. The "Class A" example reflects the maximum
initial sales charge in Year One. The "Class B - assuming redemption" example
reflects applicable contingent deferred sales charges through Year Six (after
which time they are eliminated). Both Class B examples reflect Class A expenses
for Years 9 and 10 since Class B shares automatically convert to Class A after
eight years. Although your actual costs may be higher or lower, based on these
assumptions your cumulative expenses would be:

<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR
ONE THREE FIVE TEN
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH MANAGEMENT TRUST
Class A $ 62 $ 195 $340 $ 762
Class B - assuming redemption $646 $ 852 $982 $1,489
assuming no redemption $146 $ 452 $782 $1,489
------------------------------------------------------------------------
U.S. TREASURY MONEY FUND $ 63 $ 199 $346 $ 774
------------------------------------------------------------------------
TAX-EXEMPT MONEY FUND $ 65 $ 205 $357 $ 798
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

The investment objective of each fund is to provide you with a way to earn
income on your cash reserves (exempt from federal income tax in the case of
Tax-Exempt Money Fund) while preserving capital and maintaining liquidity.

CASH MANAGEMENT TRUST

Normally, the fund invests substantially in high quality money market
instruments such as commercial paper, commercial bank obligations, savings
association obligations, U.S. or Canadian government securities, and short-term
corporate bonds and notes. In addition, the fund 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. These securities may be affected by
unfavorable political, economic, or governmental developments that could affect
the repayment of principal or the 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

The fund's portfolio consists entirely of U.S. Treasury securities, which are
guaranteed by the United States government. These securities are generally
affected by changes in the level of interest rates. For example, the value of
U.S. Treasury securities generally will decline when interest rates rise and
vice versa. A security backed by the U.S. Treasury or the full faith and credit
of the United States is guaranteed only as to the timely payment of interest
and principal when held to maturity. Accordingly, the current market prices for
such securities are not guaranteed and will fluctuate.

TAX-EXEMPT MONEY FUND

The fund invests substantially in securities that are exempt from regular
federal income tax. However, the fund may purchase securities that would
subject you to federal alternative minimum tax. The fund may also invest in
municipal securities that are supported by credit and liquidity enhancements.
Changes in the credit quality of banks and financial institutions providing
these enhancements could cause the fund to experience a loss and may affect its
share price. In addition, the fund may invest a substantial portion of its
portfolio in taxable short-term debt securities in response to abnormal market
conditions (which may detract from achievement of the fund's objective over the
short term).

* * * * *

Each fund relies on the professional judgment of its investment adviser,
Capital Research and Management Company, to make decisions about its
investments.

MONEY MARKET 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 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. The total management fee paid by the funds, as a
percentage of average net assets, for the previous fiscal year are discussed
earlier under "Fees and Expenses of the Funds."

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
SHAREHOLDER INFORMATION

SHAREHOLDER SERVICES

American Funds Service Company, the funds' transfer agent, offers you a wide
range of services 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. For your convenience, American Funds
Service Company has four service centers across the country.

AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS

Call toll-Free from anywhere in the U.S.
(8 a.m. to 8 p.m. ET):
800/421-0180

[map of the United States]

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Western Western Central Eastern Central Eastern
Service Center Service Center Service Center Service Center
American Funds American Funds American Funds American Funds
Service Company Service Company Service Company Service Company
P.O. Box 2205 P.O. Box 659522 P.O. Box 6007 P.O. Box 2280
Brea, California San Antonio, Texas Indianapolis, Indiana Norfolk, Virginia
92822-2205 78265-9522 46206-6007 23501-2280
Fax: 714/671-7080 Fax: 210/474-4050 Fax: 317/735-6620 Fax: 757/670-4773
</TABLE>

A COMPLETE DESCRIPTION OF THE SERVICES WE OFFER IS INCLUDED 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.

You may invest in Class A shares of 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). However, some retirement plans
or accounts held by investment dealers may not offer certain services. If you
have any questions, please contact your plan administrator/trustee or dealer.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
CHOOSING A SHARE CLASS

Cash Management Trust offers both Class A and Class B shares. (U.S. Treasury
Money Fund and Tax-Exempt Money Fund only offer Class A shares.) Each share
class has its own sales charge and expense structure, allowing you to choose
the class that best meets your situation. Class B shares of Cash Management
Trust may be acquired only by exchanging from Class B shares of other American
Funds. See "Purchase and Exchange of Shares."

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.

Differences between Class A and Class B shares include:

<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------------------------------------------
<S> <S>
Distribution and service (12b-1) Distribution and service (12b-1) fees
fees of up to 0.15% annually. of 0.90% annually.
------------------------------------------------------------------------------
Higher dividends than Class B Lower dividends than Class A shares due
shares due to lower annual to higher distribution fees and other
expenses. expenses.
------------------------------------------------------------------------------
No contingent deferred sales A contingent deferred sales charge if
charge. you sell shares within six years of
buying them. The charge starts at 5%
and declines thereafter until it
reaches 0% after six years. (See "Sales
Charges - Class B.")
------------------------------------------------------------------------------
No purchase maximum. Direct purchases of Class B shares of
Cash Management Trust are not
permitted. (See above.)
------------------------------------------------------------------------------
Automatic conversion to Class A shares
after eight years, reducing future
annual expenses.
------------------------------------------------------------------------------
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES

PURCHASE

Generally, you may open an account by contacting any investment dealer (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 using
various options described in the statement of additional information and
"Welcome to the Family."

EXCHANGE

You may exchange your shares into shares of the same class of other funds in
The American Funds Group generally without a sales charge. However, exchanges
from Class A shares of Cash Management Trust may be made to Class B shares of
any other American Fund for dollar cost averaging purposes. For purposes of
computing the contingent deferred sales charge on Class B 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 exchange.

Exchanges of shares from the money market funds initially purchased without a
sales charge generally will be subject to the appropriate sales charge.
Exchanges have the same tax consequences as ordinary sales and purchases. See
"Transactions by Telephone..." for information regarding electronic exchanges.

THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS, EACH FUND'S PRINCIPAL UNDERWRITER,
RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER FOR ANY REASON. ALTHOUGH THERE
IS CURRENTLY NO SPECIFIC LIMIT ON THE NUMBER OF EXCHANGES YOU CAN MAKE IN A
PERIOD OF TIME, THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO
REJECT ANY PURCHASE ORDER AND MAY TERMINATE THE EXCHANGE PRIVILEGE OF ANY
INVESTOR WHOSE PATTERN OF EXCHANGE ACTIVITY THEY HAVE DETERMINED INVOLVES
ACTUAL OR POTENTIAL HARM TO THE FUNDS.

<TABLE>
<CAPTION>
PURCHASE MINIMUMS FOR CLASS A SHARES
<S> <C>
To establish an account (including retirement plan accounts) $1,000
For a retirement plan account through payroll deduction $ 25
To add to an account $ 50
For a retirement plan account through payroll deduction $ 25
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

SHARE PRICE

Each fund calculates its share price, also called net asset value, as of
approximately 4:00 p.m. New York time, which is the normal close of trading on
the New York Stock Exchange, every day the Exchange is open. In calculating net
asset value, market prices are used when available. The funds have adopted
procedures to make "fair value" determinations when reliable market prices for
particular securities are not available.

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 and accepts your
request. Sales of certain Class A and B shares may be subject to contingent
deferred sales charges.

---------------------------------------------------------
SALES CHARGES

CLASS A

Class A shares of the money market funds are sold without an initial sales
charge. 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.

CLASS B

Class B shares are sold without any initial sales charge. However, a contingent
deferred sales charge may be applied to the value of the shares you redeem
within six years of purchase, as shown in the table below.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Shares sold within year 1 2 3 4 5 6
----------------------------------------------------------------
Contingent deferred sales charge 5% 4% 4% 3% 2% 1%
</TABLE>

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 for Class B Shares" below. 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 and then shares that you have owned the longest.
American Funds Distributors pays compensation equal to 4% of the amount
invested to dealers who sell Class B shares.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

CLASS B CONVERSION TO A SHARES

Class B shares automatically convert to Class A shares in the month of the
eight-year anniversary of the purchase date. The Internal Revenue Service
currently takes the position that this automatic conversion is not taxable.
Should their position change, shareholders would still have the option of
converting but may face certain tax consequences. Please see the statement of
additional information for more information.

---------------------------------------------------------
SALES CHARGE WAIVERS

You must let your investment dealer or American Funds Service Company know if
you qualify for a waiver of your Class B contingent deferred sales charge using
one or any combination of the methods described below, in the statement of
additional information and "Welcome to the Family."

CONTINGENT DEFERRED SALES CHARGE WAIVERS FOR CLASS B SHARES

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

. when receiving payments through systematic withdrawal plans (up to 12% of
the value of your account);

. when receiving required minimum distributions from retirement accounts upon
reaching age 70 1/2; or

. for redemptions due to death or post-purchase disability of the
shareholder.

For more information, please consult your financial adviser, the statement of
additional information or "Welcome to the Family."

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
PLANS OF DISTRIBUTION

Each fund has Plans of Distribution or "12b-1 Plans" under which it may finance
activities primarily intended to sell shares, provided the categories of
expenses are approved in advance by each fund's board of trustees. The plans
provide for annual expenses of up to 0.15% for Class A shares and for Cash
Management Trust only, 0.90% for Class B shares. Up to 0.15% of these payments
are used to pay service fees to qualified dealers for providing certain
shareholder services. The remaining 0.75% expense for Class B shares is used
for financing commissions paid to your dealer. The 12b-1 fees paid by each
fund, as a percentage of average net assets, for the previous fiscal year is
indicated above under "Fees and Expenses of the Funds." 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 an investment.

OTHER COMPENSATION TO DEALERS

American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
HOW TO SELL SHARES

Once a sufficient period of time has passed to reasonably assure that checks or
drafts (including certified or cashiers' checks) for shares purchased have
cleared (normally 15 calendar days), you may sell (redeem) those shares in any
of the following ways:

THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)

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

WRITING TO AMERICAN FUNDS SERVICE COMPANY

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

. A signature guarantee is required if the redemption is:

-- Over $50,000;

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

-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.

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

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

CHECK WRITING

. Checks must be signed by the authorized number of registered shareholders
exactly as indicated on your checking account signature card.

. Check writing is not available for Class B shares of Cash Management Trust.

TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/:

. Redemptions by telephone, fax, or computer (including American FundsLine
and American FundsLine OnLine) are limited to $50,000 per 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.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE OR FUNDSLINE ONLINE

Generally, you are automatically eligible to use these services for redemptions
and exchanges 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 computer 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) 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, it and/or each fund may
be liable for losses due to unauthorized or fraudulent instructions.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
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.

You may elect to reinvest dividends and/or capital gain distributions to
purchase additional shares of these funds or any other fund in The American
Funds Group 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 DISTRIBUTIONS

Distributions you receive from the funds may be subject to income tax and may
also be subject to state or local taxes - unless you are exempt from taxation.

For federal tax purposes, any taxable dividends and distributions of short-term
capital gains are treated as ordinary income. The funds' distributions of net
long-term capital gains are taxable to you as long-term capital gains. Any
taxable distributions you receive from the funds will normally be taxable to
you when made, regardless of whether you reinvest distributions or receive them
in cash.

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 realize or distribute capital gains; however, if they do, they
will be subject to federal and state income tax.

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 in the funds is
the difference between the cost of your shares, including any sales charges,
and the price you receive when you sell them.

Please see the statement of additional information, the "Welcome to the Family"
guide, and your tax adviser for further information.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each fund's
results for the past five years. Certain information reflects financial results
for a single fund share. The total returns in the table represent the rate that
an investor would have earned or lost on an investment in the funds (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with each fund's
financial statements, is included in the statement of additional information,
which is available upon request.

CASH MANAGEMENT TRUST/1/

<TABLE>
<CAPTION>
Dividends Ratio of Ratio of net
Net asset value, Net (from net Net asset Net assets, expenses to income to
Year ended beginning of investment investment value, end of year average net average net
September 30 year income income) end of year Total return (in millions) assets assets
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A:
2000 $1.00 $.055/2/ $(.055) $1.00 5.66% $5,417 .61% 5.53%
1999 1.00 .045 (.045) 1.00 4.59 5,863 .58 4.52
1998 1.00 .050 (.050) 1.00 5.15 4,604 .58 5.02
1997 1.00 .049 (.049) 1.00 5.03 3,527 .57 4.93
1996 1.00 .050 (.050) 1.00 5.06 3,304 .60 4.95
CLASS B:
2000 1.00 .027/2/ (.027) 1.00 2.73 1 1.43/3/ 5.21/3/
</TABLE>

1 The years 1996 through 2000 represent, for Class A shares, fiscal years ended
September 30. The period ended 2000 represents, for Class B shares, the 199-day
period ended September 30, 2000. Class B shares were not offered before March
15, 2000. Total return for Class B is based on activity during the period and
thus is not representative of a full year. Total returns exclude all sales
charges, including contingent deferred sales charges.

2 Based on average shares outstanding.

3 Annualized.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

U.S. TREASURY MONEY FUND

<TABLE>
<CAPTION>
Dividends Ratio of Ratio of net
Net asset value, Net (from net Net asset Net assets, expenses to income to
Year ended beginning of investment investment value, end of year average net average net
September 30 year income income) end of year Total return (in millions) assets assets
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A:/1/
2000 $1.00 $.049/2/ $(.049) $1.00 5.00% $369 .62% 4.81%
1999 1.00 .039 (.039) 1.00 4.00 467 .59 3.95
1998 1.00 .045 (.045) 1.00 4.63 356 .59 4.49
1997 1.00 .046 (.046) 1.00 4.71 279 .53 4.61
1996 1.00 .046 (.046) 1.00 4.66 256 .65 4.53
</TABLE>

1 The fund offers Class A shares only.

2 Based on average shares outstanding.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

TAX-EXEMPT MONEY FUND

<TABLE>
<CAPTION>
Ratio of Ratio of
Dividends expenses to expenses to
Net asset value, Net (from net Net asset Net assets, average net average net
Year ended beginning of investment investment value, end of year assets - befor assets - after
September 30 year income income) end of year Total return (in millions) fee waiver fee waiver
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A:/1/
2000 $1.00 $.032/2/ $(.032) $1.00 3.29% $276 .64% .64%
1999 1.00 .025 (.025) 1.00 2.51 255 .68 .65
1998 1.00 .029 (.029) 1.00 2.97 198 .71 .65
1997 1.00 .029 (.029) 1.00 2.94 160 .74 .65
1996 1.00 .029 (.029) 1.00 2.91 144 .77 .65
<CAPTION>

Ratio of net
income to
Year ended average net
September 30 assets
----------------------------
<S> <C>
CLASS A:/1/
2000 3.23%
1999 2.33
1998 2.94
1997 2.94
1996 2.88
</TABLE>

1 The fund offers Class A shares only.

2 Based on average shares outstanding.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
FOR SHAREHOLDER SERVICES American Funds Service Company
800/421-0180
FOR RETIREMENT PLAN SERVICES Call your employer or plan administrator
FOR DEALER SERVICES American Funds Distributors
800/421-9900 Ext. 11
FOR 24-HOUR INFORMATION American FundsLine(R)
800/325-3590
American FundsLine OnLine(R)
http://www.americanfunds.com

</TABLE>

Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.

MULTIPLE TRANSLATIONS This prospectus may be translated into other languages.
If there is any inconsistency or ambiguity as to the meaning of any word or
phrase in a translation, the English text will prevail.

ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS Contains additional information
about the funds including financial statements, investment results, portfolio
holdings, a statement from portfolio management discussing market conditions
and the funds' investment strategies, and the independent accountants' report
(in the annual report).

STATEMENT OF ADDITIONAL INFORMATION (SAI) AND CODES OF ETHICS The SAI contains
more detailed information on all aspects of each fund, including each fund's
financial statements and is incorporated by reference into this prospectus.
The Codes of Ethics describe the personal investing policies adopted by each
fund and the funds' investment adviser and its affiliated companies.

The Codes of Ethics and current SAI have been filed with the 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. (202/942-8090) or on the EDGAR database on the SEC's Internet
Web site at http://www.sec.gov, or, after payment of a duplicating fee, via
e-mail request to [email protected] or by writing the SEC's Public Reference
Section, Washington, D.C. 20549-0102.

HOUSEHOLD MAILINGS Each year you are automatically sent an updated
prospectus, annual and semi-annual report 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 that are part of the same family and
share the same residential address.

* * * * *

If you would like to receive individual copies of these documents at no
charge, 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.

Printed on Recycled Paper
Investment Company File No. 811-2380 (The Cash Management Trust of America)
Investment Company File No. 811-6235 (The U.S. Treasury Money Fund of America)
Investment Company File No. 811-5750 (The Tax-Exempt Money Fund of America)

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

<PAGE>

The Cash Management Trust of America/(R)/
The U.S. Treasury Money Fund of America/SM/
The Tax-Exempt Money Fund of America/SM/

Prospectus
DECEMBER 1, 2000

<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, California 90071

MONEY MARKET FUNDS / PROSPECTUS
MMF-010-1200/RRD

<PAGE>

---------------------------------------------------------
RISK/RETURN SUMMARY

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.

ALTHOUGH THE FUNDS ATTEMPT TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE, THERE CAN BE NO GUARANTEE THAT THE FUNDS WILL BE ABLE TO DO SO, AND YOU
MAY LOSE MONEY BY INVESTING IN THE FUNDS.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

INVESTMENT RESULTS

CASH MANAGEMENT TRUST

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
[bar chart]
1990 7.89%
1991 5.51%
1992 3.14%
1993 2.54%
1994 3.66%
1995 5.50%
1996 4.93%
1997 5.11%
1998 5.05%
1999 4.68%
[end chart]

The fund's year-to-date return for the nine months ended September 30, 2000
was 4.34%.
-------------------------------------------------------------------------------

The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
<S> <C> <C>
HIGHEST 1.95% (quarter ended June 30, 1990)
LOWEST 0.62% (quarter ended June 30, 1993)
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

U.S. TREASURY MONEY FUND

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
[bar chart]
1992 3.05%
1993 2.48%
1994 3.36%
1995 5.03%
1996 4.59%
1997 4.75%
1998 4.44%
1999 4.11%
[end chart]

The fund's year-to-date return for the nine months ended September 30, 2000
was 3.87%.
-------------------------------------------------------------------------------

The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
<S> <C> <C>
HIGHEST 1.27% (quarter ended June 30, 1995)
LOWEST 0.60% (quarter ended June 30, 1993)
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

TAX-EXEMPT MONEY FUND

CALENDAR YEAR TOTAL RETURNS FOR CLASS A SHARES
[bar chart]
1990 5.40%
1991 4.17%
1992 2.51%
1993 1.83%
1994 2.23%
1995 3.21%
1996 2.85%
1997 3.00%
1998 2.83%
1999 2.60%
[end chart]

The fund's year-to-date return for the nine months ended September 30, 2000
was 2.54%.
-------------------------------------------------------------------------------

The fund's highest/lowest quarterly results during this time period were:

<TABLE>
<CAPTION>
<S> <C> <C>
HIGHEST 1.37% (quarter ended December 31, 1990)
LOWEST 0.42% (quarter ended March 31, 1994)
</TABLE>

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

For periods ended December 31, 1999:

(For current yield information, please call American FundsLine at
1-800-325-3590).

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
FEES AND EXPENSES OF THE FUNDS

1 Annualized.

2 Class A 12b-1 expenses may not exceed 0.15% of the fund's average net assets
annually.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

EXAMPLE

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

CASH MANAGEMENT TRUST

U.S. TREASURY MONEY FUND

TAX-EXEMPT MONEY FUND

* * * * *

Each fund relies on the professional judgment of its investment adviser,
Capital Research and Management Company, to make decisions about its
investments.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
MANAGEMENT AND ORGANIZATION

INVESTMENT ADVISER

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
SHAREHOLDER INFORMATION

SHAREHOLDER SERVICES

AMERICAN FUNDS SERVICE COMPANY SERVICE AREAS

Call toll-Free from anywhere in the U.S.
(8 a.m. to 8 p.m. ET):
800/421-0180

[map of the United States]

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
CHOOSING A SHARE CLASS

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.

Differences between Class A and Class B shares include:

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
PURCHASE AND EXCHANGE OF SHARES

PURCHASE

EXCHANGE

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

SHARE PRICE

---------------------------------------------------------
SALES CHARGES

CLASS A

CLASS B

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

CLASS B CONVERSION TO A SHARES

---------------------------------------------------------
SALES CHARGE WAIVERS

CONTINGENT DEFERRED SALES CHARGE WAIVERS FOR CLASS B SHARES

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

. when receiving payments through systematic withdrawal plans (up to 12% of
the value of your account);

. when receiving required minimum distributions from retirement accounts upon
reaching age 70 1/2; or

. for redemptions due to death or post-purchase disability of the
shareholder.

For more information, please consult your financial adviser, the statement of
additional information or "Welcome to the Family."

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
PLANS OF DISTRIBUTION

OTHER COMPENSATION TO DEALERS

American Funds Distributors may provide additional compensation to, or sponsor
informational meetings for, dealers as described in the statement of additional
information.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
HOW TO SELL SHARES

THROUGH YOUR DEALER (CERTAIN CHARGES MAY APPLY)

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

WRITING TO AMERICAN FUNDS SERVICE COMPANY

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

. A signature guarantee is required if the redemption is:

-- Over $50,000;

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

-- Sent to an address other than the address of record, or an address of
record which has been changed within the last 10 days.

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

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

CHECK WRITING

. Checks must be signed by the authorized number of registered shareholders
exactly as indicated on your checking account signature card.

. Check writing is not available for Class B shares of Cash Management Trust.

TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/:

. Redemptions by telephone, fax, or computer (including American FundsLine
and American FundsLine OnLine) are limited to $50,000 per 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.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

TRANSACTIONS BY TELEPHONE, FAX, AMERICAN FUNDSLINE OR FUNDSLINE ONLINE

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

---------------------------------------------------------
DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS

TAXES ON DISTRIBUTIONS

Distributions you receive from the funds may be subject to income tax and may
also be subject to state or local taxes - unless you are exempt from taxation.

TAXES ON TRANSACTIONS

Please see the statement of additional information, the "Welcome to the Family"
guide, and your tax adviser for further information.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

FINANCIAL HIGHLIGHTS

CASH MANAGEMENT TRUST/1/

2 Based on average shares outstanding.

3 Annualized.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

U.S. TREASURY MONEY FUND

<TABLE>
<CAPTION>
Dividends Ratio of Ratio of net
Net asset value, Net (from net Net asset Net assets, expenses to income to
Year ended beginning of investment investment value, end of year average net average net
September 30 year income income) end of year Total return (in millions) assets assets
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A:/1/
2000 $1.00 $.049/2/ $(.049) $1.00 5.00% $369 .62% 4.81%
1999 1.00 .039 (.039) 1.00 4.00 467 .59 3.95
1998 1.00 .045 (.045) 1.00 4.63 356 .59 4.49
1997 1.00 .046 (.046) 1.00 4.71 279 .53 4.61
1996 1.00 .046 (.046) 1.00 4.66 256 .65 4.53
</TABLE>

1 The fund offers Class A shares only.

2 Based on average shares outstanding.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

TAX-EXEMPT MONEY FUND

Ratio of net
income to
Year ended average net
September 30 assets
----------------------------
<S> <C>
CLASS A:/1/
2000 3.23%
1999 2.33
1998 2.94
1997 2.94
1996 2.88
</TABLE>

1 The fund offers Class A shares only.

2 Based on average shares outstanding.

MONEY MARKET FUNDS / PROSPECTUS

<PAGE>

</TABLE>

Telephone conversations may be recorded or monitored for
verification, recordkeeping and quality assurance purposes.

* * * * *

<PAGE>

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

Part B
Statement of Additional Information

December 1, 2000

This document is not a prospectus but should be read in conjunction with the
current prospectus of The Cash Management Trust of America ("CMTA"), The U.S.
Treasury Money Fund of America ("CTRS") and The Tax-Exempt Money Fund of America
("CTEX") dated December 1, 2000. The prospectus may be obtained from your
investment dealer or financial planner or by writing to the fund at the
following address:

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

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Item Page No.
---- --------
<S> <C>
Certain Investment Limitations and Guidelines . . . . . . . . . . . 2
Description of Certain Securities and Investment Techniques . . . . 3
Fundamental Policies and Investment Restrictions. . . . . . . . . . 8
Fund Organization and Voting Rights . . . . . . . . . . . . . . . . 13
Fund Trustees and Other Officers. . . . . . . . . . . . . . . . . . 14
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . 21
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . . . . . 24
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Sales Charge Reductions and Waivers . . . . . . . . . . . . . . . . 28
Individual Retirement Account (IRA) Rollovers . . . . . . . . . . . 31
Price of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Selling Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Shareholder Account Services and Privileges . . . . . . . . . . . . 35
Execution of Portfolio Transactions . . . . . . . . . . . . . . . . 37
General Information . . . . . . . . . . . . . . . . . . . . . . . . 38
Class A Share Investment Results and Related Statistics . . . . . . 39
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Financial Statements
</TABLE>

Money Market Funds - Page 1

<PAGE>

CERTAIN INVESTMENT LIMITATIONS AND GUIDELINES

The following limitations and guidelines are considered at the time of purchase,
under normal market conditions, and are based on a percentage of the funds' net
assets unless otherwise noted. This summary is not intended to reflect all of
the funds' investment limitations.

CASH MANAGEMENT TRUST OF AMERICA

DEBT SECURITIES

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

MATURITY

. The fund's dollar-weighted average portfolio maturity will be
approximately 35 days or less.

U.S. TREASURY MONEY FUND

U.S. TREASURY SECURITIES

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

MATURITY

. The fund's dollar-weighted average portfolio maturity will be
approximately 90 days or less.

TAX-EXEMPT MONEY FUND OF AMERICA

TAX-EXEMPT SECURITIES

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

DEBT SECURITIES

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

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

MATURITY

. The fund's dollar-weighted average portfolio maturity will be
approximately 60 days or less.

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

Money Market Funds - Page 2

<PAGE>

DESCRIPTION OF CERTAIN SECURITIES AND INVESTMENT TECHNIQUES

The descriptions below are intended to supplement the material in the prospectus
under "Investment Objective, Strategies and Risks."

INVESTMENT POLICIES - CMTA and CTEX may invest in securities that are rated in
the two highest rating categories for debt obligations by at least two
nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated by only one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees ("eligible securities"). The nationally
recognized statistical rating organizations currently rating instruments of the
type each fund may purchase are Moody's Investors Service, Inc., Standard &
Poor's Corporation, Fitch Investors Service, Inc., and IBCA Limited and IBCA
Inc. Subsequent to its purchase, an issue of securities may cease to be rated
or its rating may be reduced below the minimum rating required for its purchase.
Neither event requires the elimination of such securities from a fund's
portfolio, but Capital Research and Management Company (the "Investment
Adviser") will consider such an event in its determination of whether the fund
should continue to hold the securities. Investments in eligible securities not
rated in the highest category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such organization),
and unrated eligible securities not determined by the Board of Trustees to be
comparable quality to those rated in the highest category, will be limited to 5%
of a fund's total assets, with the investment in any one such issuer being
limited to no more than the greater of 1% of a fund's total assets or
$1,000,000. It is the current policy of CMTA and CTEX to invest only in
instruments rated in the highest short-term rating category by Moody's Investors
Service ("Moody's"), Inc. and Standard & Poor's Corporation ("S&P") or in
instruments that do not have short-term ratings by Moody's or S&P but determined
to be of comparable quality in accordance with U.S. Government, its agencies or
instrumentalities as to the payment of principal and interest. CTRS invests
exclusively in U.S. Treasury securities, which are of the highest credit
quality.

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

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

COMMERCIAL PAPER: Short-term notes (usually maturing in 90 days or less) issued
by companies, governmental bodies, or bank/corporation sponsored conduits
(asset-backed commercial paper).

COMMERCIAL BANK OBLIGATIONS: Certificates of deposit (interest-bearing time
deposits), bank notes, bankers' acceptances (time drafts drawn on a commercial
bank where the bank accepts an irrevocable obligation to pay at maturity)
representing direct or contingent obligations of commercial banks with assets in
excess of $1 billion, based on latest published reports, or obligations issued
by commercial banks with assets of less than $1 billion if the principal amount
of such obligation is fully insured by the U. S. Government. Commercial banks
issuing obligations in which CMTA invests must be on an approved list that is
monitored on a regular basis; currently all approved banks have assets in excess
of $10 billion.

SAVINGS ASSOCIATION OBLIGATIONS: Bank notes and certificates of deposit
(interest-bearing time deposits) issued by savings banks or savings and loan
associations that have assets in excess of $1 billion, based on latest published
reports, or obligations issued by institutions with assets of less than $1
billion if the principal amount of such obligation is fully insured by the U.S.

Money Market Funds - Page 3

<PAGE>

Government. Savings associations issuing obligations in which CMTA invests must
be on an approved list that is monitored on a regular basis; currently all
approved savings associations have assets in excess of $10 billion.

U.S. GOVERNMENT SECURITIES - Securities guaranteed by the U.S. Government
include direct obligations of the U.S. Treasury (such as Treasury bills, notes
and bonds). For these securities, the payment of principal and interest is
unconditionally guaranteed by the U.S. Government, and thus they are of the
highest possible credit quality. Such securities are subject to variations in
market value due to fluctuations in interest rates, but, if held to maturity,
will be paid in full.

Certain securities issued by U.S. Government instrumentalities and certain
federal agencies are neither direct obligations of, nor guaranteed by, the
Treasury. However, they generally involve federal sponsorship in one way or
another; some are backed by specific types of collateral; some are supported by
the issuer's right to borrow from the Treasury; some are supported by the
discretionary authority of the Treasury to purchase certain obligations of the
issuer; and others are supported only by the credit of the issuing government
agency or instrumentality. These agencies and instrumentalities include, but are
not limited to, Farmers Home Administration, Federal Home Loan Bank, Federal
Home Loan Mortgage Corporation, Federal National Mortgage Association, Tennessee
Valley Authority, and Federal Farm Credit Bank System.

CORPORATE BONDS AND NOTES: Corporate obligations that mature, or may be redeemed
by CMTA, in 13 months or less. These obligations may originally have been issued
with maturities in excess of 13 months. CMTA may currently invest only in
corporate bonds or notes of issuers having outstanding short-term securities
rated in the top rating category by Standard & Poor's Corporation or by Moody's
Investors Service, Inc. See "Description of Ratings for Debt Securities" for a
description of high-quality ratings by Standard & Poor's Corporation and Moody's
Investors Service, Inc.

REPURCHASE AGREEMENTS - The funds may enter into repurchase agreements, under
which each fund buys a security and obtains a simultaneous commitment from the
seller to repurchase the security at a specified time and price. Repurchase
agreements permit the 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 upon the
collateral by the funds may be delayed or limited.

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

MUNICIPAL BONDS - Municipal bonds are debt obligations generally issued to
obtain funds for various public purposes, including the construction of public
facilities. Opinions relating to the validity of municipal bonds, their
exclusion from 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.

Money Market Funds - Page 4

<PAGE>

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 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
reserve funds and insured or subsidized mortgages, as well as the net revenues
from housing or other public projects. Most of these bonds do not generally
constitute the pledge of the credit of the issuer of such bonds. The credit
quality of such revenue bonds is usually directly related to the credit standing
of the user of the facility being financed or of an institution which provides a
guarantee, letter of credit, or other credit enhancement for the bond issue.

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

TEMPORARY TAXABLE INVESTMENTS - A portion of CTEX's assets, which will normally
be less than 20%, may be invested in high-quality taxable short-term securities.
Such temporary investments may include: (1) obligations of the U.S. Treasury;
(2) obligations of agencies and instrumentalities of the U.S. Government; and
(3) money market instruments, such as certificates of deposit issued by domestic
banks, corporate commercial paper, and bankers' acceptances. These investments
may be made when deemed advisable for temporary defensive purposes or when the
Investment Adviser believes there is an unusual disparity between the after-tax
income available on taxable investments and the income available on tax-exempt
securities.

Money Market Funds - Page 5

<PAGE>

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

LOANS OF PORTFOLIO SECURITIES - Each fund is authorized to lend portfolio
securities to selected securities dealers or other institutional investors whose
financial condition is monitored by the Investment Adviser. The borrower must
maintain with the fund's custodian collateral consisting of cash, cash
equivalents or U.S. Government securities equal to at least 100% of the value of
the borrowed securities, plus any accrued interest. The Investment Adviser will
monitor the adequacy of the collateral on a daily basis. Each fund may at any
time call a loan of its portfolio securities and obtain the return of the loaned
securities. Each fund will receive any interest paid on the loaned securities
and a fee or a portion of the interest earned on the collateral. The fund will
limit its loans of portfolio securities to an aggregate of 10% of the value of
its total assets, measured at the time any such loan is made.

REPURCHASE AGREEMENTS - Although CTEX or CTRS have no current intention of doing
so during the next 12 months, each fund is authorized to enter into repurchase
agreements, subject to the standards applicable to CMTA's repurchase agreement
transactions as described above.

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

MONEY MARKET INSTRUMENTS - The funds invest in various high-quality money market
instruments that mature, or may be redeemed or resold, in 13 months or less (25
months or less in the case of U.S. Government securities). For CMTA they
include: (1) commercial paper (notes issued by corporations, governmental
bodies, or bank/corporation sponsored conduits (asset-backed commercial paper)),
(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. CMTA may invest in
securities issued by non-U.S. entities or in securities with credit and
liquidity support features provided by non-U.S. entities. Since these securities
are issued by entities that may have substantial operations outside the U.S.
they may involve additional risks and considerations. These securities may be
affected by unfavorable political, economic, or governmental developments that
could affect the repayment of principal or payment of interest. Securities of
U.S. issuers with substantial operations outside the U.S. may also be subject to
similar risks.

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

Money Market Funds - Page 6

<PAGE>

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. Variable and floating rate obligations bear
coupon rates that are adjusted at designated intervals, based on the then
current market rates of interest. Variable and floating rate obligations permit
the funds to "lock in" the current interest rate for only the period until the
next scheduled rate adjustment, but the rate adjustment feature tends to limit
the extent to which the market value of the obligation will fluctuate.

"PUT" SECURITIES - CMTA and CTEX may purchase securities that provide for the
right to resell them to the issuer, a bank, or a broker-dealer typically at the
par value plus accrued interest within a specified period of time prior to
maturity. This right is commonly known as a "put" or a "demand feature." The
funds may pay a higher price for such securities than would otherwise be paid
for the same security without such a right. The funds will enter into these
transactions only with issuers, banks, or broker-dealers that are determined by
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 its net asset value using the penny-rounding
method, according to rules of the Securities and Exchange Commission, which
permits it to maintain a constant net asset value of $1.00 per share under
normal conditions. In accordance with rule 2a-7, each fund is required to
maintain a dollar-weighted average portfolio maturity of 90 days or less and
purchase only instruments having remaining maturities of 13 months or less (25
months or less in the case of U.S. Government securities) determined in
accordance with procedures established by the Board of Trustees to present
minimal credit risks. For this purpose, certain variable and floating rate
obligations and "put" securities which may otherwise have stated maturities in
excess of 13 months (25 months in the case of U.S. Government securities) will
be deemed to have remaining maturities equal to the period remaining until the
next readjustment of the interest rate or until the fund is entitled to
repayment or repurchase of the security. CMTA, CTRS and CTEX currently intend to
maintain dollar-weighted average portfolio maturities of approximately 35 days
or less, 90 days or less and 60 days or less, respectively.

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 security 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.

As the funds' aggregate commitments under these transactions increase, the
opportunity for leverage similarly increases. The funds will not use these
transactions for the purpose of leveraging and will segregate liquid assets
which will be marked to market daily in an amount sufficient to meet its payment
obligations in these transactions. Although these transactions will not be
entered into for leveraging purposes, to the extent the funds' aggregate
commitments under these transactions exceed its segregated assets, the fund
temporarily could be in a leveraged position (because they may have an amount
greater than their net assets subject to market risk). Should market values of
the funds' portfolio securities decline while the funds are in a leveraged
position, greater depreciation of its net assets would likely occur than were it
not in

Money Market Funds - Page 7

<PAGE>

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 its obligations
thereunder.

FUNDAMENTAL POLICIES AND INVESTMENT RESTRICTIONS

FUNDAMENTAL POLICIES - Each fund has adopted the following fundamental policies
and investment restrictions which may not be changed without approval by holders
of a majority of its outstanding shares. Such majority is defined in the
Investment Company Act of 1940 ("1940 Act") as the vote of the lesser of (i) 67%
or more of the outstanding voting securities present at a meeting, if the
holders of more than 50% of the outstanding voting securities are present in
person or by proxy, or (ii) more than 50% of the outstanding voting securities.
All percentage limitations are considered at the time securities are purchased
and are based on the fund's net assets unless otherwise indicated. None of the
following investment restrictions involving a maximum percentage of assets will
be considered violated unless the excess occurs immediately after, and is caused
by, an acquisition by the fund.

CMTA may not:
---

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

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

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

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

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

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

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

Money Market Funds - Page 8

<PAGE>

8. Sell securities short;

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

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

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

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

For purposes of Investment Restriction #1, CMTA currently invests only in high
quality obligations in accordance with rule 2a-7 under the 1940 Act, as
described in the prospectus. (CMTA will notify shareholders 180 days in advance
in the event it no longer is required to adhere to rule 2a-7 and it intends to
stop relying on the rule.) For purposes of Investment Restriction #2, the fund
may invest more than 5% of its total assets in the securities of any one issuer
only to the extent allowed under rule 2a-7 of the Investment Company Act of
1940. For purposes of Investment Restriction #3, CMTA will not invest 25% or
more of total assets in the securities of issuers in the same industry.
Additionally, for purposes of Investment Restriction #3, the Investment Adviser
currently interprets the term "commercial banks" to mean domestic branches of
U.S. banks. These policies are non-fundamental and may be changed by the Board
of Trustees without shareholder approval.

CTRS may not:
---

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

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

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

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

5. Sell securities short;

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

Money Market Funds - Page 9

<PAGE>

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

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

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

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

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

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

13. Purchase or retain the securities of any issuer, if, to the knowledge of
CTRS, those individual officers and Board members of CTRS, its Investment
Adviser, or principal underwriter, each owning beneficially more than 1/2 of 1%
of the securities of such issuer, together own more than 5% of the securities of
such issuer;

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

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

Notwithstanding Investment Restriction #10, the fund may invest in securities of
other investment companies if deemed advisable by its officers in connection
with the administration of a deferred compensation plan adopted by Trustees
pursuant to an exemptive order granted by the Securities and Exchange
Commission.

For purposes of Investment Restriction #11, the term "oil, gas or other mineral
exploration or development programs" includes oil, gas or other mineral
exploration or development leases. For purposes of Investment Restriction #15,
the Investment Adviser currently interprets the term

Money Market Funds - Page 10

<PAGE>

"commercial banks" to mean domestic branches of U.S. banks. Finally, CTRS will
not invest more than 5% of its net assets valued at market at the time of
purchase, in warrants including not more than 2% of such net assets in warrants
that are not listed on either the New York Stock Exchange or the American Stock
Exchange; however, warrants acquired in units or attached to securities may be
deemed to be without value for the purpose of this restriction. These policies
are not deemed fundamental and may be changed by the Board of Trustees without
shareholder approval.

CTEX may not:
---

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

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

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

4. Acquire securities subject to restrictions on disposition or securities for
which there is no readily available market (including securities of foreign
issuers not listed on any recognized foreign or domestic exchange), or enter
into repurchase agreements or purchase time deposits maturing in more than seven
days, if, immediately after and as a result, the value of such securities would
exceed, in the aggregate, 10% of CTEX's total assets;

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

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

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

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

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

Money Market Funds - Page 11

<PAGE>

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

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

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

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

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

15. Purchase or retain the securities of any issuer, if, to the knowledge of
CTEX, those individual officers and Board members of CTEX, its Investment
Adviser, or principal underwriter, each owning beneficially more than 1/2 of 1%
of the securities of such issuer, together own more than 5% of the securities of
such issuer;

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

17. Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry.

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

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

Notwithstanding Investment Restriction #12, the fund may invest in securities of
other investment companies if deemed advisable by its officers in connection
with the administration of a deferred compensation plan adopted by Trustees
pursuant to an exemptive order granted by the Securities and Exchange
Commission.

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

The following policies of CTEX are not deemed fundamental, and thus may be
changed by the Board of Trustees without shareholder approval: CTEX may not
invest 25% or more of its assets in municipal securities the issuers of which
are located in the same state, unless such securities

Money Market Funds - Page 12

<PAGE>

are guaranteed by the U.S. Government, or more than 25% of its total assets in
securities the interest on which is paid from revenues of similar type projects.
CTEX may invest no more than an aggregate of 20% of its total assets in
industrial development securities. There could be economic, business or
political developments which might affect all municipal securities of a similar
category or type or issued by issuers within any particular geographical area or
jurisdiction. Finally, CTEX will not invest more than 5% of its net assets
valued at market at the time of purchase, in warrants including not more than 2%
of such net assets in warrants that are not listed on either the New York Stock
Exchange or the American Stock Exchange; however, warrants acquired in units or
attached to securities may be deemed to be without value for the purpose of this
restriction.

FUND ORGANIZATION AND VOTING RIGHTS

Each fund, an open-end, diversified management investment company, was organized
as a Massachusetts business trust (Cash Management Trust on March 1, 1976,
Tax-Exempt Money Fund on December 5, 1988 and U.S. Treasury Money Fund on
December 19, 1990).

All fund operations are supervised by each fund's Board of Trustees which meets
periodically and performs duties required by applicable state and federal laws.
Members of the board who are not employed by Capital Research and Management
Company or its affiliates are paid certain fees for services rendered to the
fund as described in "Trustees and Trustee Compensation" below. They may elect
to defer all or a portion of these fees through a deferred compensation plan in
effect for each fund.

Cash Management Trust has two classes of shares - Class A and Class B. The
shares of each class represent an interest in the same investment portfolio.
Each class has equal rights as to voting, redemption, dividends and
liquidation, except that each class bears different distribution expenses and
may bear different transfer agent fees and other expenses properly attributable
to the particular class as approved by the Board of Trustees. Class A and Class
B shareholders have exclusive voting rights with respect to the 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 which require shareholder approval, such as certain elections of board
members or a change in a fundamental investment policy, will be presented to
shareholders at a meeting called for such purpose. Shareholders have one vote
per share owned. At the request of the holders of at least 10% of the shares,
the funds will hold a meeting at which any member of the board could be removed
by a majority vote.

Money Market Funds - Page 13

<PAGE>

FUND TRUSTEES AND OFFICERS

Trustees and Trustee Compensation

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
(INCLUDING VOLUNTARILY
DEFERRED
COMPENSATION/1/)
FROM THE FUND
POSITION DURING FISCAL YEAR
WITH PRINCIPAL OCCUPATION(S) DURING ENDED
NAME, ADDRESS AND AGE REGISTRANT PAST 5 YEARS SEPTEMBER 30, 2000
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard G. Capen, Jr. Trustee Corporate Director and author; $ 4,758/ /CMTA
6077 San Elijo, Box 2494 former United States Ambassador to $2,244/3/ CTEX
Rancho Santa Fe, CA 92067 Spain; former Vice Chairman of the $ 2,395/ /CTRS
Age: 66 Board, Knight-Ridder, Inc., former
Chairman and Publisher, The Miami
---------
Herald
------
------------------------------------------------------------------------------------------------------------
H. Frederick Christie Trustee Private Investor. Former President $ 5,568 CMTA
P.O. Box 144 and Chief Executive Officer, The $ 2,188 CTEX
Palos Verdes Estates, CA Mission Group (non-utility holding $ 2,688 CTRS
90274 company, subsidiary of Southern
Age: 67 California Edison Company)
------------------------------------------------------------------------------------------------------------
+Don R. Conlan Trustee President (retired), The Capital none/4/
1630 Milan Avenue Group Companies, Inc.
South Pasadena, CA 91030
Age: 64
------------------------------------------------------------------------------------------------------------
Diane C. Creel Trustee CEO and President, The Earth $ 4,400 CMTA
100 W. Broadway Technology Corporation $ 1,220 CTEX
Suite 5000 (international consulting $ 1,720 CTRS
Long Beach, CA 90802 engineering)
Age: 52
------------------------------------------------------------------------------------------------------------
Martin Fenton Trustee Managing Director, Senior Resource $5,210/3/ CMTA
4660 La Jolla Village Group LLC (development and $1,830/3/ CTEX
Drive management of senior living $2,330/3// /CTRS
Suite 725 communities)
San Diego, CA 92122
Age: 65
------------------------------------------------------------------------------------------------------------
Leonard R. Fuller Trustee President, Fuller Consulting $ 5,641 CMTA
4337 Marina City Drive (financial management consulting $ 2,261 CTEX
Suite 841 ETN firm) $ 2,761 CTRS
Marina del Rey, CA 90292
Age: 54
------------------------------------------------------------------------------------------------------------
+*Abner D. Goldstine President, Senior Vice President and Director, none/4/
Age: 70 PEO Capital Research and Management
and Trustee Company
------------------------------------------------------------------------------------------------------------
+**Paul G. Haaga, Jr. Chairman of Executive Vice President and none/4/
Age: 51 the Board Director, Capital Research and
Management Company
------------------------------------------------------------------------------------------------------------
Richard G. Newman Trustee Chairman and CEO, AECOM Technology $5,241/3/ CMTA
3250 Wilshire Boulevard Corporation (architectural $1,861/3/ CTEX
Los Angeles, CA 90010-1599 engineering) $2,361/3/ CTRS
Age: 66
------------------------------------------------------------------------------------------------------------
Frank M. Sanchez Trustee President, The Sanchez Family $4,383/3//,4// /CMTA
5234 Via San Delarro, #1 Corporation dba McDonald's $1,670/3,//4/ CTEX
Los Angeles, CA 90022 Restaurants (McDonald's licensee) $2,020/3//,4// /CTRS
Age: 57
------------------------------------------------------------------------------------------------------------
<CAPTION>
TOTAL COMPENSATION
(INCLUDING VOLUNTARILY
DEFERRED
COMPENSATION/1/) FROM TOTAL NUMBER
ALL FUNDS MANAGED BY OF FUND
CAPITAL RESEARCH AND BOARDS
MANAGEMENT COMPANY ON WHICH
OR ITS AFFILIATES/2/ FOR THE TRUSTEE
NAME, ADDRESS AND AGE YEAR ENDED SEPTEMBER 30, 2000 SERVES/2/
---------------------------------------------------------------------------
<S> <C> <C>
Richard G. Capen, Jr. $ 94,623 14
6077 San Elijo, Box 2494
Rancho Santa Fe, CA 92067
Age: 66
---------------------------------------------------------------------------
H. Frederick Christie $ 211,373 19
P.O. Box 144
Palos Verdes Estates, CA
90274
Age: 67
---------------------------------------------------------------------------
+Don R. Conlan none/5/ 12
1630 Milan Avenue
South Pasadena, CA 91030
Age: 64
---------------------------------------------------------------------------
Diane C. Creel $ 40,320 12
100 W. Broadway
Suite 5000
Long Beach, CA 90802
Age: 52
---------------------------------------------------------------------------
Martin Fenton $130,673/3/ 16
4660 La Jolla Village
Drive
Suite 725
San Diego, CA 92122
Age: 65
---------------------------------------------------------------------------
Leonard R. Fuller $ 89,873 13
4337 Marina City Drive
Suite 841 ETN
Marina del Rey, CA 90292
Age: 54
---------------------------------------------------------------------------
+*Abner D. Goldstine none/4/ 12
Age: 70

---------------------------------------------------------------------------
+**Paul G. Haaga, Jr. none/4/ 15
Age: 51

---------------------------------------------------------------------------
Richard G. Newman $106,840/3/ 13
3250 Wilshire Boulevard
Los Angeles, CA 90010-1599
Age: 66
---------------------------------------------------------------------------
Frank M. Sanchez $$47,903/3,//4/ 12
5234 Via San Delarro, #1
Los Angeles, CA 90022
Age: 57
---------------------------------------------------------------------------
</TABLE>

Money Market Funds - Page 14

<PAGE>

+ "Interested persons" within the meaning of the 1940 Act on the basis of their
affiliation with the funds' Investment Adviser, Capital Research and
Management Company, or the parent company of the Investment Adviser, The
Capital Group Companies, Inc.

++ May be deemed an "interested person" of the fund due to membership on the
board of directors of the parent company of a registered broker-dealer.

* Address is 11100 Santa Monica Boulevard, Los Angeles, CA 90025
** Address is 333 South Hope Street, Los Angeles, CA 90071

1 Amounts may be deferred by eligible Trustees under a non-qualified deferred
compensation plan adopted by the fund in 1993. Deferred amounts accumulate at
an earnings rate determined by the total return of one or more funds in The
American Funds Group as designated by the Trustees.

2 Capital Research and Management Company manages The American Funds Group
consisting of 29 funds: AMCAP Fund, Inc., American Balanced Fund, Inc.,
American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash
Management Trust of America, Capital Income Builder, Inc., Capital World
Growth and Income Fund, Inc., Capital World Bond Fund, Inc., EuroPacific
Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc.,
The Income Fund of America, Inc., Intermediate Bond Fund of America, 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.,
SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The
Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt
Fund of Virginia, The Tax-Exempt Money Fund of America, The U. S. Treasury
Money Fund of America, U.S. Government Securities Fund and Washington Mutual
Investors Fund, Inc. Capital Research and Management Company also manages
American Variable Insurance Series and Anchor Pathway Fund, which serve as the
underlying investment vehicle for certain variable insurance contracts; and
Endowments, whose shareholders are limited to (i) any entity exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended ("501(c)(3) organization"); (ii) any trust, the present or future
beneficiary of which is a 501(c)(3) organization, and (iii) any other entity
formed for the primary purpose of benefiting a 501(c)(3) organization. An
affiliate of Capital Research and Management Company, Capital International,
Inc., manages Emerging Markets Growth Fund, Inc.

3 Since the deferred compensation plans' adoption, the total amount of deferred
compensation accrued by each fund (plus earnings thereon) through the 2000
fiscal year for participating Trustees is as follows: Richard G. Capen ($1,871
- CTEX), Martin Fenton ($4,824 - CMTA; $446 - CTEX and $1,065 - CTRS), Richard
G. Newman ($22,786 - CMTA; $9,769 - CTEX and $11,191 - CTRS) and Frank M.
Sanchez ($1,397 - CMTA, $416 - CTEX and $313 - CTRS). Amounts deferred and
accumulated earnings thereon are not funded and are general unsecured
liabilities of the fund until paid to the Trustee. Amounts deferred and
accumulated earnings thereon are not funded and are general unsecured
liabilities of the fund until paid to the Trustees.

4 Don R. Conlan, Abner D. Goldstine, and Paul G. Haaga, Jr. are affiliated with
the Investment Adviser and, accordingly, receive no compensation from the
funds.

Money Market Funds - Page 16

<PAGE>

OTHER OFFICERS

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S) DURING
NAME AND ADDRESS AGE WITH REGISTRANT PAST 5 YEARS#
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Neil L. Langberg 47 Senior Vice Vice President - Investment
11100 Santa Monica President (CTEX) Management Group, Capital
Blvd. Research and Management Company
Los Angeles, CA 90025
-------------------------------------------------------------------------------
Teresa S. Cook 48 Vice President Senior Vice President -
333 South Hope Street (CMTA and CTRS Investment Management Group,
Los Angeles, CA 90071 only) Capital Research and Management
Company
-------------------------------------------------------------------------------
Michael J. Downer 45 Vice President Senior Vice President - Fund
333 South Hope Street Business Management Group,
Los Angeles, CA 90071 Capital Research and Management
Company
-------------------------------------------------------------------------------
Karen F. Hall 35 Assistant Assistant Vice President -
333 South Hope Street Vice President Investment Management Group,
Los Angeles, CA 90071 (CMTA and CTRS Capital Research and Management
only) Company
-------------------------------------------------------------------------------
Julie F. Williams 52 Secretary Vice President - Fund Business
333 South Hope Street Management Group, Capital
Los Angeles, CA 90071 Research and Management Company
-------------------------------------------------------------------------------
Anthony W. Hynes, Jr. 38 Treasurer Vice President - Fund Business
135 South State Management Group, Capital
College Blvd. Research and Management Company
Brea, CA 92821
-------------------------------------------------------------------------------
Kimberly S. Verdick 36 Assistant Assistant Vice President - Fund
333 South Hope Street Secretary Business Management Group,
Los Angeles, CA 90071 Capital Research and Management
Company
-------------------------------------------------------------------------------
</TABLE>

# Positions within the organizations listed may have changed during this period.

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.

No compensation is paid by a fund to any officer or Trustee who is a director,
officer or employee of the Investment Adviser or affiliated companies. The funds
pay annual fees to Trustees who are not affiliated with the Investment Adviser
as follows: CMTA - $4,000; CTEX - $400 and CTRS - $900. In addition, each
fund pays $210 for each Board of Trustees meeting attended, and various Trustees
participate with directors and trustees of certain other funds in The American
Funds Group in joint meetings of Contracts Committees, Audit Committees and
Nominating Committees; total fees for attendance at these meetings, which are
prorated among the participants in proportion to the number of funds
represented, are $2,510 for each meeting of the Contracts Committee and $1,000
for each meeting of the Audit and Nominating Committees.

No pension or retirement benefits are accrued as part of fund expenses. The
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 fund also
reimburse certain expenses of the Trustees who are not affiliated with the
Investment Adviser. As of November 1, 2000 the officers and Trustees of each
fund and their families, as a group, owned beneficially or of record less than
1% of the outstanding shares of each fund.

Money Market Funds - Page 17

<PAGE>

MANAGEMENT

INVESTMENT ADVISER - The Investment Adviser, Capital Research and Management
Company, founded in 1931, maintains research facilities in the U.S. and abroad
(Los Angeles, San Francisco, New York, Washington, D.C., London, Geneva, Hong
Kong, Singapore and Tokyo), with a staff of professionals, many of whom have a
number of years of investment experience. The Investment Adviser is located at
333 South Hope Street, Los Angeles, CA 90071, and at 135 South State College
Boulevard, Brea, CA 92821. The Investment Adviser's research professionals
travel several million miles a year, making more than 5,000 research visits in
more than 50 countries around the world. The Investment Adviser believes that it
is able to attract and retain quality personnel. The Investment Adviser is a
wholly owned subsidiary of The Capital Group Companies, Inc.

The Investment Adviser is responsible for managing more than $300 billion of
stocks, bonds and money market instruments and serves over 11 million
shareholder accounts of all types throughout the world. These investors include
privately owned businesses and large corporations as well as schools, colleges,
foundations and other non-profit and tax-exempt organizations.

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

The CMTA Agreement will continue in effect until May 31, 2001, unless sooner
terminated. The CTEX Agreement will continue in effect until October 1, 2001,
unless sooner terminated, and the CTRS Agreement will continue in effect until
October 31, 2001, unless sooner terminated. Each Agreement may be renewed from
year to year thereafter, provided that any such renewal has been specifically
approved at least annually by (i) the Board of Trustees, or by the vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the fund, and (ii) the vote of a majority of 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).

The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of persons
to perform the executive, administrative, clerical and bookkeeping functions of
the funds, and provides suitable office space, necessary small office equipment
and utilities, general purpose accounting forms, supplies, and postage used at
the offices of the funds. 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; costs of the designing, printing and
mailing of reports, prospectuses, proxy statements, and notices to its
shareholders; taxes; expenses of the issuance and redemption of shares of the
funds (including stock certificates, registration and qualification fees and
expenses); expenses pursuant to the fund's Plans of Distribution (described
below); legal and auditing expenses; compensation, fees, and expenses paid to

Money Market Funds - Page 18

<PAGE>

directors unaffiliated with the Investment Adviser; association dues; costs of
stationery and forms prepared exclusively for the funds; and costs of assembling
and storing shareholder account data.

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

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

U.S. Treasury Money Fund: 0.30% on the first $800 million of average net
assets; plus 0.285% on average net assets in excess of $800 million;

Tax-Exempt Money Fund: 0.39% on the first $200 million of average net
assets; plus 0.37% on average net assets between $200 million and $600
million; plus 0.33% on the portion of average net assets between $600
million and $1.2 billion; plus 0.29% on average net assets in excess of
$1.2 billion.

The Investment Adviser has agreed to waive its fees by any amount necessary to
assure that such expenses do not exceed applicable expense limitations in any
state in which the funds' shares are being offered for sale.

CMTA The Agreement provides that the Investment Adviser will reimburse CMTA for
----
any expenses incurred by CMTA in any fiscal year, exclusive of interest, taxes,
brokerage costs and extraordinary items such as litigation and acquisitions, to
the extent such expenses exceed the lesser of 25% of gross income for the
preceding year or the sum of (a) 1-1/2% of the average daily net assets of the
preceding year up to and including $30 million, and (b) 1% of any excess of
average daily net assets of preceding year over $30 million. The Investment
Advisory fee is included as an expense of CMTA and is subject to the expense
limitation described in the preceding sentence.

CTEX 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 ona
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 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.

CTRS The Investment Adviser has agreed to bear any CTRS expenses (with the
----
exception of interest, taxes, brokerage costs and extraordinary expenses such as
litigation and acquisitions) in excess of 0.75% of CTRS's average net assets per
annum, subject to reimbursement by CTRS during a period which will terminate at
the earlier of (i) such time as no reimbursement has been required for a period
of 12 consecutive months, provided no advances are outstanding, or (ii) February
1, 2001. Additionally, the Investment Adviser voluntarily agreed to waive its
fees to the extent necessary to ensure that fund expenses do not exceed 0.675%
of the average daily net assets. There can be no assurance that this voluntary
fee waiver will continue in the future. Each month, to the extent CTRS owes
money to the Investment Adviser pursuant to this provision of the Agreement and
CTRS' annualized expense ratio for the month is below 0.75%,

Money Market Funds - Page 19

<PAGE>

CTRS will reimburse the Investment Adviser until CTRS' annualized expense ratio
equals 0.75% or the debt is repaid, whichever comes first.

Expenses which are not subject to these limitations are interest, taxes, and
extraordinary expenses. 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. To
the extent CMTA's management fee must be waived due to Class A share expense
ratios exceeding this 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.

For the fiscal years ended 2000, 1999, and 1998, the Investment Adviser received
advisory fees from CMTA of $16,005,000, $14,593,000, and $11,113,000,
respectively. For the fiscal years ended 2000, 1999, and 1998, the Investment
Adviser received advisory fees from CTRS of $1,296,000, $1,272,000, and
$875,000, respectively. For the fiscal years ended 2000, 1999, and 1998, the
Investment Adviser received advisory fees from CTEX of $1,055,000, $1,003,000,
and $800,000, respectively.

PRINCIPAL UNDERWRITER - American Funds Distributors, Inc. (the "Principal
Underwriter") is the principal underwriter of the fund's shares. The Principal
Underwriter is located at 333 South Hope Street, Los Angeles, CA 90071, 135
South State College Boulevard, Brea, CA 92821, 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240,
and 5300 Robin Hood Road, Norfolk, VA 23513. The funds have adopted Plans of
Distribution (the "Plans"), pursuant to rule 12b-1 under the 1940 Act. The
Principal Underwriter receives amounts payable pursuant to the Plans (see
below).

As required by rule 12b-1 and the 1940 Act, the Plans (together with the
Principal Underwriting Agreement) have been approved by the full Boards of
Trustees and separately by a majority of the trustees who are not "interested
persons" of the funds and who have no direct or indirect financial interest in
the operation of the Plans or the Principal Underwriting Agreement. The officers
and trustees who are "interested persons" of the funds may be considered to have
a direct or indirect financial interest in the operation of the Plans due to
present or past affiliations with the Investment Adviser and related companies.
Potential benefits of the Plans to the funds include shareholder services,
savings to the fund in transfer agency costs, savings to the funds in advisory
fees and other expenses, benefits to the investment process from growth or
stability of assets and maintenance of a financially healthy management
organization. The selection and nomination of trustees who are not "interested
persons" of the fund are committed to the discretion of the trustees who are not
"interested persons" during the existence of the Plans. The Plans may not be
amended to increase materially the amount spent for distribution without
shareholder approval. Plan expenses are reviewed quarterly and the Plans must be
renewed annually by the Boards of Trustees.

Under the Plans, each fund may expend up to 0.15% of its net assets annually for
Class A shares and for Cash Management Trust only, 0.90% of its net assets
annually for Class B shares to finance any activity which is primarily intended
to result in the sale of fund shares, provided the fund's Board of Trustees has
approved the category of expenses for which payment is being made. For Class A
shares this includes up to 0.15% in service fees for qualified dealers. For
Class B shares these include 0.15% in service fees for qualified dealers and
0.75% in payments to the Principal Underwriter for financing commissions paid to
qualified dealers selling Class B shares.

Money Market Funds - Page 20

<PAGE>

During the fiscal year ended September 30, 2000, CMTA, CTRS and CTEX paid
$4,348,000, $431,000, and $123,000, respectively, to the Principal Underwriter
under the Plan for Class A shares. During the 2000 fiscal year, distribution
expenses under the CMTA Plan of Distribution for Class B were $2,000
(compensation to dealers). As of September 30, 2000, accrued and unpaid
distribution expenses for Class A shares were $296,000, $30,000 and $9,000 for
CMTA, CTRS and CTEX, respectively; accrued and unpaid distribution expenses for
CMTA Class B shares were $1,000.

OTHER COMPENSATION TO DEALERS - The Principal Underwriter, at its expense (from
a designated percentage of its income), currently provides additional
compensation to dealers. Currently these payments are limited to the top 100
dealers who have sold shares of the fund or other funds in The American Funds
Group. These payments will be based principally on a pro rata share of a
qualifying dealer's sales. The Principal Underwriter will, on an annual basis,
determine the advisability of continuing these payments.

DIVIDENDS, DISTRIBUTIONS AND TAXES

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

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

Money Market Funds - Page 21

<PAGE>

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

STATE TAXES - Information relating to the percentage of CTEX's income derived
from securities issued in a particular state is available upon request from the
Transfer Agent at year end.

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

ADDITIONAL INFORMATION CONCERNING TAXES

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

CTEX

GENERAL - CTEX is not intended to constitute a balanced investment program and
is not designed for investors seeking capital appreciation or maximum tax-exempt
income irrespective of fluctuations in principal. Shares of CTEX would generally
not be suitable for tax-exempt institutions or tax-deferred retirement plans
(e.g., corporate-type plans, Keogh-type plans and IRA's). Such retirement plans
would not gain any benefit from the tax-exempt nature of CTEX's dividends
because such dividends would be ultimately taxable to beneficiaries when
distributed to them. In addition, CTEX may not be an appropriate investment for
entities which are "substantial users" of facilities financed by private
activity bonds or "related persons" thereof. "Substantial user" is defined under
U.S. Treasury Regulations to include a non-exempt person who regularly uses a
part of such facilities in his trade or business and whose gross revenues
derived with respect to the facilities financed by the issuance of bonds are
more than 5% of the total revenues derived by all users of such facilities, or
who occupies more than 5% of the usable area of such facilities or for whom such
facilities or a part thereof were specifically constructed,

Money Market Funds - Page 22

<PAGE>

reconstructed or acquired. "Related persons" include certain related natural
persons, affiliated corporations, partnerships and their partners and S
Corporations and their shareholders.

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

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

Money Market Funds - Page 23

<PAGE>

PURCHASE OF SHARES

<TABLE>
<CAPTION>
METHOD INITIAL INVESTMENT ADDITIONAL INVESTMENTS
-------------------------------------------------------------------------------
<S> <C> <C>
See "Purchase $50 minimum (except where a
Minimums" for initial lower minimum is noted under
investment minimums. "Purchase Minimums").
-------------------------------------------------------------------------------
By contacting Visit any investment Mail directly to your
your investment dealer dealer who is investment dealer's address
registered in the printed on your account
state where the statement.
purchase is made and
who has a sales
agreement with
American Funds
Distributors.
-------------------------------------------------------------------------------
By mail Make your check Fill out the account additions
payable to the fund form at the bottom of a recent
and mail to the account statement, make your
address indicated on check payable to the fund,
the account write your account number on
application. Please your check, and mail the check
indicate an investment and form in the envelope
dealer on the account provided with your account
application. statement.
-------------------------------------------------------------------------------
By telephone Please contact your Complete the "Investments by
investment dealer to Phone" section on the account
open account, then application or American
follow the procedures FundsLink Authorization Form.
for additional Once you establish the
investments. privilege, you, your financial
advisor or any person with your
account information can call
American FundsLine(R) and make
investments by telephone
(subject to conditions noted in
"Shareholder Account Services
and Privileges - Telephone and
Computer Purchases, Redemptions
and Exchanges" below).
-------------------------------------------------------------------------------
By computer Please contact your Complete the American FundsLink
investment dealer to Authorization Form. Once you
open account, then established the privilege, you,
follow the procedures your financial advisor or any
for additional person with your account
investments. information may access American
FundsLine OnLine(R) on the
Internet and make investments
by computer (subject to
conditions noted in
"Shareholder Account Services
and Privileges - Telephone and
Computer Purchases, Redemptions
and Exchanges" below).
-------------------------------------------------------------------------------
By wire Call 800/421-0180 to Your bank should wire your
obtain your account additional investments in the
number(s), if same manner as described under
necessary. Please "Initial Investment."
indicate an investment
dealer on the account.
Instruct your bank to
wire funds to:

Wells Fargo Bank
155 Fifth Street,
Sixth Floor
San Francisco, CA
94106
(ABA#121000248)

For credit to the
account of:
American Funds Service
Company a/c#
4600-076178
(fund name)
(your fund acct. no.)
-------------------------------------------------------------------------------
THE FUNDS AND AMERICAN FUNDS DISTRIBUTORS RESERVE THE RIGHT TO REJECT ANY
PURCHASE ORDER.
-------------------------------------------------------------------------------
</TABLE>

PURCHASE MINIMUMS - The minimum initial investment for all funds in The American
Funds Group, except the money market funds and the state tax-exempt funds, is
$250. The minimum initial investment for the money market funds (The Cash
Management Trust of America, The Tax--

Money Market Funds - Page 24

<PAGE>

Exempt Money Fund of America, and The U.S. Treasury Money Fund of America) and
the state tax-exempt funds (The Tax-Exempt Fund of California, The Tax-Exempt
Fund of Maryland, and The Tax-Exempt Fund of Virginia) is $1,000. Purchase
minimums are reduced to $50 for purchases through "Automatic Investment Plans"
(except for the money market funds) or to $25 for purchases by retirement plans
through payroll deductions and may be reduced or waived for shareholders of
other funds in The American Funds Group. TAX-EXEMPT FUNDS SHOULD NOT SERVE AS
RETIREMENT PLAN INVESTMENTS. The minimum is $50 for additional investments
(except as noted above).

PURCHASE MAXIMUM FOR CLASS B SHARES - The maximum purchase order for Class B
shares for all American Funds is $100,000. For investments above $100,000 Class
A shares are generally a less expensive option over time due to sales charge
reductions or waivers.

FUND NUMBERS - Here are the fund numbers for use with our automated phone line,
American FundsLine/(R)/ (see description below):

<TABLE>
<CAPTION>
FUND FUND
NUMBER NUMBER
FUND CLASS A CLASS B
---- ------- -------
<S> <C> <C>
STOCK AND STOCK/BOND FUNDS
AMCAP Fund/(R)/ . . . . . . . . . . . . . . . . . . . . 02 202
American Balanced Fund/(R)/ . . . . . . . . . . . . . . 11 211
American Mutual Fund/(R)/ . . . . . . . . . . . . . . . 03 203
Capital Income Builder/(R)/ . . . . . . . . . . . . . . 12 212
Capital World Growth and Income Fund/SM/ . . . . . . . 33 233
EuroPacific Growth Fund/(R)/ . . . . . . . . . . . . . 16 216
Fundamental Investors/SM/ . . . . . . . . . . . . . . . 10 210
The Growth Fund of America/(R)/ . . . . . . . . . . . . 05 205
The Income Fund of America/(R)/ . . . . . . . . . . . . 06 206
The Investment Company of America/(R)/ . . . . . . . . 04 204
The New Economy Fund/(R)/ . . . . . . . . . . . . . . . 14 214
New Perspective Fund/(R)/ . . . . . . . . . . . . . . . 07 207
New World Fund/SM/ . . . . . . . . . . . . . . . . . . 36 236
SMALLCAP World Fund/(R)/ . . . . . . . . . . . . . . . 35 235
Washington Mutual Investors Fund/SM/ . . . . . . . . . 01 201
BOND FUNDS
American High-Income Municipal Bond Fund/(R)/ . . . . . 40 240
American High-Income Trust/SM/ . . . . . . . . . . . . 21 221
The Bond Fund of America/SM/ . . . . . . . . . . . . . 08 208
Capital World Bond Fund/(R)/ . . . . . . . . . . . . . 31 231
Intermediate Bond Fund of America/SM/ . . . . . . . . . 23 223
Limited Term Tax-Exempt Bond Fund of America/SM/ . . . 43 243
The Tax-Exempt Bond Fund of America/(R)/ . . . . . . . 19 219
The Tax-Exempt Fund of California/(R)/* . . . . . . . . 20 220
The Tax-Exempt Fund of Maryland/(R)/* . . . . . . . . . 24 224
The Tax-Exempt Fund of Virginia/(R)/* . . . . . . . . . 25 225
U.S. Government Securities Fund/SM/ . . . . . . . . . . 22 222

MONEY MARKET FUNDS
The Cash Management Trust of America/(R)/ . . . . . . . 09 209
The Tax-Exempt Money Fund of America/SM/ . . . . . . . 39 N/A
The U.S. Treasury Money Fund of America/SM/ . . . . . . 49 N/A
___________
*Available only in certain states.
</TABLE>

Money Market Funds - Page 25

<PAGE>

SALES CHARGES

CLASS A SALES CHARGES - The sales charges you pay when purchasing Class A shares
of stock, stock/bond, and bond funds of The American Funds Group are set forth
below. The money market funds of The American Funds Group are offered at net
asset value. (See "Fund Numbers" for a listing of the funds.)

<TABLE>
<CAPTION>
DEALER
SALES CHARGE AS CONCESSION
PERCENTAGE OF THE: AS PERCENTAGE
------------------ OF THE
AMOUNT OF PURCHASE
AT THE OFFERING PRICE NET AMOUNT OFFERING OFFERING
-INVESTED- PRICE PRICE
------------------------------------------ -------- ----- -----
<S> <C> <C> <C>
STOCK AND STOCK/BOND FUNDS
Less than $25,000 . . . . . . . . . 6.10% 5.75% 5.00%
$25,000 but less than $50,000 . . . 5.26 5.00 4.25
$50,000 but less than $100,000. . 4.71 4.50 3.75
BOND FUNDS
Less than $100,000 . . . . . . . . 3.90 3.75 3.00
STOCK, STOCK/BOND, AND BOND FUNDS
$100,000 but less than $250,000 . 3.63 3.50 2.75
$250,000 but less than $500,000 . 2.56 2.50 2.00
$500,000 but less than $750,000 . 2.04 2.00 1.60
$750,000 but less than $1 million 1.52 1.50 1.20
$1 million or more . . . . . . . . . . none none (see below)
-----------------------------------------------------------------------------
</TABLE>

CLASS A PURCHASES NOT SUBJECT TO SALES CHARGES - Investments of $1 million or
more are sold with no initial sales charge. HOWEVER, A 1% CONTINGENT DEFERRED
SALES CHARGE (CDSC) MAY BE IMPOSED IF REDEMPTIONS ARE MADE WITHIN ONE YEAR OF
PURCHASE. Employer-sponsored defined contribution-type plans investing $1
million or more, or with 100 or more eligible employees, and Individual
Retirement Account rollovers from retirement plan assets invested in the
American Funds (see "Individual Retirement Account (IRA) Rollovers" below) may
invest with no sales charge and are not subject to a contingent deferred sales
charge. Investments made by

Money Market Funds - Page 26

<PAGE>

investors in certain qualified fee-based programs, and retirement plans,
endowments or foundations with $50 million or more in assets may also be made
with no sales charge and are not subject to a CDSC. A dealer concession of up
to 1% may be paid by the fund under its Plan of Distribution on investments made
with no initial sales charge.

In addition, Class A shares of the 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 and
employees of the above persons, and trusts or plans primarily for such persons;

(2) current registered representatives, retired registered representatives with
respect to accounts established while active, or full-time employees (and their
spouses, parents, and children) of dealers who have sales agreements with the
Principal Underwriter (or who clear transactions through such dealers) and plans
for such persons or the dealers;

(3) companies exchanging securities with the fund through a merger, acquisition
or exchange offer;

(4) trustees or other fiduciaries purchasing shares for certain retirement
plans of organizations with retirement plan assets of $50 million or more;

(5) insurance company separate accounts;

(6) accounts managed by subsidiaries of The Capital Group Companies, Inc.; and

(7) The Capital Group Companies, Inc., its affiliated companies and Washington
Management Corporation.

Shares are offered at net asset value to these persons and organizations due to
anticipated economies in sales effort and expense.

CONTINGENT DEFERRED SALES CHARGE ON CLASS A SHARES - A contingent deferred
sales charge of 1% applies to redemptions made from funds, other than the money
market funds, within 12 months following Class A share purchases of $1 million
or more made without an initial sales charge. The charge is 1% of the lesser of
the value of the shares redeemed (exclusive of reinvested dividends and capital
gain distributions) or the total cost of such shares. Shares held the longest
are assumed to be redeemed first for purposes of calculating this CDSC. The CDSC
may be waived in certain circumstances. See "CDSC Waivers for Class A Shares"
below.

DEALER COMMISSIONS ON CLASS A SHARES - The following commissions (up to 1%) will
be paid to dealers who initiate and are responsible for purchases of $1 million
or more, for purchases by any employer-sponsored defined contribution plan
investing $1 million or more, or with 100 or more eligible employees, IRA
rollover accounts (as described in "Individual Retirement Account (IRA)
Rollovers" below), and for purchases made at net asset value by certain
retirement plans, endowments and foundations with collective assets of $50
million or more: 1.00% on amounts of

Money Market Funds - Page 27

<PAGE>

$1 million to $4 million, 0.50% on amounts over $4 million to $10 million, and
0.25% on amounts over $10 million.

CLASS B SALES CHARGES - Class B shares are sold without any initial sales
charge. However, a CDSC may be applied to shares you sell within six years of
purchase, as shown in the table below:

<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES CHARGE ON
SHARES SOLD WITHIN YEAR AS A % OF SHARES BEING SOLD
------------------------------------------------------------------------------
<S> <C>
1 5.00%
2 4.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
</TABLE>

There is no CDSC on appreciation in share value above the initial purchase price
or on shares acquired through reinvestment of dividends or capital gain
distributions. In addition, the CDSC may be waived in certain circumstances.
See "CDSC Waivers for Class B shares" below. The CDSC is based on the original
purchase cost or the current market value of the shares being sold, whichever is
less. In processing redemptions of Class B shares, shares that are not subject
to any CDSC will be redeemed first and then shares that you have owned the
longest during the six-year period. CLASS B SHARES ARE NOT AVAILABLE TO CERTAIN
RETIREMENT PLANS, INCLUDING GROUP RETIREMENT PLANS SUCH AS 401(K) PLANS,
EMPLOYER-SPONSORED 403(B) PLANS, AND MONEY PURCHASE PENSION AND PROFIT SHARING
PLANS.

Compensation equal to 4% of the amount invested is paid by the Principal
Underwriter to dealers who sell Class B shares.

CONVERSION OF CLASS B SHARES TO CLASS A SHARES - Class B shares automatically
convert to Class A shares in the month of the eight-year anniversary of the
purchase date. The conversion of Class B shares to Class A shares after eight
years is subject to the Internal Revenue Service's continued position that the
conversion of Class B shares is not subject to federal income tax. In the event
the Internal Revenue Service no longer takes this position, the automatic
conversion feature may be suspended, in which event no further conversions of
Class B shares would occur while such suspension remained in effect. At your
option, Class B shares may still be exchanged for Class A shares on the basis of
relative net asset value of the two classes, without the imposition of a sales
charge or fee; however, such an exchange could constitute a taxable event for
you and, absent such an exchange, Class B shares would continue to be subject to
higher expenses for longer than eight years.

SALES CHARGE REDUCTIONS AND WAIVERS

REDUCING YOUR CLASS A SALES CHARGE - You and your "immediate family" (your
spouse and your children under age 21) may combine investments to reduce your
costs. You must let your investment dealer or American Funds Service Company
(the "Transfer Agent") know if you

Money Market Funds - Page 28

<PAGE>

qualify for a reduction in your sales charge using one or any combination of the
methods described below.

STATEMENT OF INTENTION - You may enter into a non-binding commitment to
purchase shares of a fund(s) over a 13-month period and receive the same
sales charge as if all shares had been purchased at once. This includes
purchases made during the previous 90 days, but does not include
appreciation of your investment or reinvested distributions. The reduced
sales charges and offering prices set forth in the Prospectus apply to
purchases of $25,000 or more made within a 13-month period subject to the
following statement of intention (the "Statement"). The Statement is not a
binding obligation to purchase the indicated amount. When a shareholder
elects to use a Statement in order to qualify for a reduced sales charge,
shares equal to 5% of the dollar amount specified in the Statement will 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 13-month period, the purchaser will 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. If the difference is not paid by the close of
the 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 will be liable to the Principal Underwriter for
the balance still outstanding. The Statement may be revised upward at any
time during the 13-month period, and such a revision will be treated as a
new Statement, except that the 13-month period during which the purchase
must be made will remain unchanged. Existing holdings eligible for rights
of accumulation (see below), including Class A shares held in a fee-based
arrangement, as well as purchases of Class B shares, and any individual
investments in American Legacy variable annuities and variable life
insurance policies (American Legacy, American Legacy II and American Legacy
III variable annuities, American Legacy Life, American Legacy Variable
Life, and American Legacy Estate Builder) may be credited toward satisfying
the Statement. During the Statement period reinvested dividends and capital
gain distributions, investments in money market funds, and investments made
under a right of reinstatement will not be credited toward satisfying the
Statement. The Statement will be considered completed if the shareholder
dies within the 13-month Statement period. Commissions will not be adjusted
or paid on the difference between the Statement amount and the amount
actually invested before the shareholder's death.

When the trustees of certain retirement plans purchase shares by payroll
deduction, the sales charge for the investments made during the 13-month
period will be handled as follows: The regular monthly payroll deduction
investment will be multiplied by 13 and then multiplied by 1.5. The current
value of existing American Funds investments (other than money market fund
investments) and any rollovers or transfers reasonably anticipated to be
invested in non-money market American Funds during the 13-month period, and
any individual investments in American Legacy variable annuities and
variable life insurance policies are added to the figure determined above.
The sum is the Statement amount and applicable breakpoint level. On the
first investment and all other investments made pursuant to the Statement,
a sales charge will be assessed according to the sales charge breakpoint
thus determined. There will be no retroactive adjustments in sales charges
on investments made during the 13-month period.

Money Market Funds - Page 29

<PAGE>

Shareholders purchasing shares at a reduced sales charge under a Statement
indicate their acceptance of these terms with their first purchase.

AGGREGATION - Sales charge discounts are available for certain aggregated
investments. Qualifying investments include those by you, your spouse and
your children under the age of 21, if all parties are purchasing shares for
their own accounts and/or:

. employee benefit plan(s), such as an IRA, individual-type 403(b) plan,
or single-participant Keogh-type plan;

. business accounts solely controlled by these individuals (for example,
the individuals own the entire business);

. trust accounts established by the above individuals. However, if the
person(s) who established the trust is deceased, the trust account may
be aggregated with accounts of the person who is the primary
beneficiary of the trust.

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 an employee
benefit plan other than those described above;

. made for two or more employee benefit plans of a single employer or of
affiliated employers as defined in the 1940 Act, again excluding
employee benefit plans described above; or

. for a diversified common trust fund or other diversified pooled
account not specifically formed for the purpose of accumulating fund
shares.

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 - You may combine purchases of Class A and/or B shares
of two or more funds in The American Funds Group, as well as individual
holdings in American Legacy variable annuities and variable life insurance
policies. Direct purchases of the money market funds are excluded. Shares
of money market funds purchased through an exchange, reinvestment or
cross-reinvestment from a fund having a sales charge do qualify.

RIGHTS OF ACCUMULATION - You may take into account the current value (or if
greater, the amount you invested less any withdrawals) of your existing
Class A and B holdings in The American Funds Group, as well as your
holdings in Endowments (shares of which may be owned only by tax-exempt
organizations), to determine your sales charge on investments in accounts
eligible to be aggregated, or when making a gift to an individual or
charity. When determining your sales charge, you may also take into account
the value of your individual holdings, as of the end of the week prior to
your investment, in various American Legacy variable annuities and variable
life insurance policies. Direct purchases of the money market funds are
excluded.

Money Market Funds - Page 30

<PAGE>

CDSC WAIVERS FOR CLASS A SHARES - Any CDSC on Class A shares may be waived in
the following cases:

(1) Exchanges (except if shares acquired by exchange are then redeemed within
12 months of the initial purchase).

(2) Distributions from 403(b) plans or IRAs due to death, post-purchase
disability or attainment of age 59-1/2.

(3) Tax-free returns of excess contributions to IRAs.

(4) Redemptions through systematic withdrawal plans (see "Automatic
Withdrawals" below), not exceeding 12% of the net asset value of the account
each year.

CDSC WAIVERS FOR CLASS B SHARES - Any CDSC on Class B shares may be waived in
the following cases:

(1) Systematic withdrawal plans (SWPs) - investors who set up a SWP (see
"Automatic Withdrawals" below) may withdraw up to 12% of the net asset value of
their account each year without incurring any CDSC. Shares not subject to a
CDSC (such as shares representing reinvestment of distributions) will be
redeemed first and will count toward the 12% limitation. If there are
insufficient shares not subject to a CDSC, shares subject to the lowest CDSC
will be redeemed next until the 12% limit is reached.

The 12% fee from CDSC limit is calculated on a pro rata basis at the time the
first payment is made and is recalculated thereafter on a pro rata basis at the
time of each SWP payment. Shareholders who establish a SWP should be aware that
the amount of that payment not subject to a CDSC may vary over time depending on
fluctuations in net asset value of their account. This privilege may be revised
or terminated at any time.

(2) Required minimum distributions taken from retirement accounts upon the
attainment of age 70-1/2.

(3) Distributions due to death or post-purchase disability of a shareholder. In
the case of joint tenant accounts, if one joint tenant dies, the surviving joint
tenant(s), at the time they notify the Transfer Agent of the decedent's death
and remove his/her name from the account, may redeem shares from the account
without incurring a CDSC. Redemptions subsequent to the notification to the
Transfer Agent of the death of one of the joint owners will be subject to a
CDSC.

INDIVIDUAL RETIREMENT ACCOUNT (IRA) ROLLOVERS

Assets from an employer-sponsored retirement plan (plan assets) may be invested
in any class of shares of the American Funds (except as described below) through
an IRA rollover plan. All such rollover investments will be subject to the terms
and conditions for Class A and B shares contained in the fund's current
prospectus and statement of additional information. In the case of an IRA
rollover involving plan assets from a plan that offered the American Funds, the
assets may only be invested in Class A shares of the American Funds. Such
investments will be at net asset value and will not be subject to a contingent
deferred sales charge. Dealers who initiate and are responsible for such
investments will be compensated pursuant to the schedule

Money Market Funds - Page 31

<PAGE>

applicable to investments of $1 million or more (see "Dealer Commissions on
Class A Shares" above).

PRICE OF SHARES

The price you pay for fund shares (normally $1.00) is the net asset value per
share which is calculated once daily at the normal close of trading (currently
approximately 4:00 p.m., New York time) each day the New York Stock Exchange is
open. For example, if the Exchange closes at 1:00 p.m. on one day and at 4:00
p.m. on the next, the fund's share price would be determined as of 4:00 p.m. New
York time on both days. The New York Stock Exchange is currently closed on
weekends and on the following holidays: New Year's Day, Martin Luther King,
Jr.'s Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas Day.

The valuation of each fund's portfolio securities and calculation of its net
asset value are based upon the penny-rounding method of pricing pursuant to
Securities and Exchange Commission regulations. Under the Securities and
Exchange Commission regulations permitting the use of the penny-rounding method
of pricing, each fund must maintain a dollar-weighted average portfolio maturity
of 90 days or less, purchase instruments having remaining maturities of 13
months or less only (25 months or less in the case of U.S. Government
securities), and invest only in securities determined by the Board of Trustees
to be of high quality with minimal credit risks.

1. All securities with 60 days or less to maturity are amortized to maturity
based on their cost if acquired within 60 days of maturity, or if already held
on the 60th day, based on the value determined on the 61st day. The maturities
of variable or floating rate instruments, with the right to resell them at an
agreed-upon price to the issuer or dealer, are deemed to be the time remaining
until the later of the next interest adjustment date or until they can be
resold.

Other securities with more than 60 days remaining to maturity are valued at
prices obtained from a pricing service selected by the Investment Adviser,
except that, where such prices re not available or where the Investment Adviser
has determined that such prices do not reflect current market value, they are
valued at the mean between current bid and ask quotations obtained from one or
more dealers in such securities.

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

2. There are deducted from the total assets, thus determined, the liabilities,
including proper accruals of expense items; and

3. The net assets so obtained are then divided by the total number of shares
outstanding, and the result, rounded to the nearer cent, is the net asset value
per share. The net asset value of each share will normally remain constant at
$1.00.

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

Money Market Funds - Page 32

<PAGE>

SELLING SHARES

Shares are sold at the net asset value next determined after your request is
received in good order by the Transfer Agent. Sales of certain Class A and B
shares may be subject to deferred sales charges. You may sell (redeem) shares
in your account in any of the following ways:

THROUGH YOUR DEALER (certain charges may apply)

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

WRITING TO AMERICAN FUNDS SERVICE COMPANY

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

- A signature guarantee is required if the redemption is:

- Over $50,000;

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

- Sent to an address other than the address of record, or an
address of record which has been changed within the last
10 days.

Your signature may be guaranteed by a domestic stock exchange or the National
Association of Securities Dealers, Inc., bank, savings association or credit
union that is an eligible guarantor institution. The Transfer Agent reserves the
right to require a signature guarantee on all redemptions.

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

- You must include any shares you wish to sell that are in
certificate form.

TELEPHONING OR FAXING AMERICAN FUNDS SERVICE COMPANY, OR BY USING AMERICAN
FUNDSLINE/(R)/ OR AMERICAN FUNDSLINE ONLINE/(R)/

- Redemptions by telephone or fax (including American FundsLine/(R)/ and
American FundsLine OnLine/(R)/) are limited to $50,000 per shareholder each
day.

- Checks must be made payable to the registered shareholder(s).

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

MONEY MARKET FUNDS

- You may have redemptions of $1,000 or more wired to your bank by writing
American Funds Service Company.

Money Market Funds - Page 33

<PAGE>

- You may establish check writing privileges (use the money market funds
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 or registered shareholders exactly as indicated on
your checking account signature card.

- Check writing is not available for Class B shares of The Cash
Management Trust.

If you sell Class B shares and request a specific dollar amount to be sold, we
will sell sufficient shares so that the sale proceeds, after deducting any
contingent deferred sales charge, 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 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 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 reinvest proceeds from a redemption or a dividend or capital gain
distribution of Class A or Class B shares without a sales charge in the Class A
shares of any fund in The American Funds Group within 90 days after the date of
the redemption or distribution (any contingent deferred sales charge on Class A
shares will be credited to your account). Redemption proceeds of shares
representing direct purchases in the money market funds are excluded. Proceeds
will be reinvested at the next calculated net asset value after your request is
received and accepted by the Transfer Agent.

Money Market Funds - Page 34

<PAGE>

SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES

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 ($50 minimum) 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. For
example, if the date you specified falls on a weekend or holiday, your money
will be invested on the next business day. 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 writing to
the Transfer Agent.

AUTOMATIC REINVESTMENT - Dividends and capital gain distributions are reinvested
in additional shares of the same class at no sales charge 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 will automatically be 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") of the same share class into any
other fund in The American Funds Group 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,

(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.

EXCHANGE PRIVILEGE - You may only exchange shares into other funds in The
American Funds Group within the same class. However, exchanges from Class A
shares of The Cash Management Trust of America may be made to Class B shares of
any other American Fund for dollar cost averaging purposes. Exchange purchases
are subject to the minimum investment requirements of the fund purchased and no
sales charge generally applies. However, exchanges of shares from the money
market funds are subject to applicable sales charges on the fund being
purchased, unless the money market fund shares were acquired by an exchange from
a fund

Money Market Funds - Page 35

<PAGE>

having a sales charge, or by reinvestment or cross-reinvestment of dividends or
capital gain distributions.

You may exchange shares by writing to the Transfer Agent (see "Selling Shares"),
by contacting your investment dealer, by using American FundsLine and American
FundsLine OnLine (see "American FundsLine and American FundsLine OnLine" below),
or by telephoning 800/421-0180 toll-free, faxing (see "American Funds Service
Company Service Areas" -- "Principal Underwriter and Transfer Agent" in the
prospectus for the appropriate fax numbers) or telegraphing the Transfer Agent.
(See "Telephone and Computer Purchases, Redemptions and Exchanges" below.)
Shares held in corporate-type retirement plans for which Capital Bank and Trust
Company serves as trustee may not be exchanged by telephone, computer, fax or
telegraph. Exchange redemptions and purchases are processed simultaneously at
the share prices next determined after the exchange order is received. (See
"Purchase of Shares"--"Price of Shares.") THESE TRANSACTIONS HAVE THE SAME TAX
CONSEQUENCES AS ORDINARY SALES AND PURCHASES.

AUTOMATIC EXCHANGES - You may automatically exchange shares of the same class in
amounts of $50 or more among any of the funds in The American Funds Group on any
day (or preceding business day if the day falls on a non-business day) of each
month you designate.

AUTOMATIC WITHDRAWALS - Withdrawal payments are not to be considered as
dividends, yield or income. Automatic investments may not be made into a
shareholder account from which there are automatic withdrawals. Withdrawals of
amounts exceeding reinvested dividends and distributions and increases in share
value would reduce the aggregate value of the shareholder's account. The
Transfer Agent arranges for the redemption by the fund of sufficient shares,
deposited by the shareholder with the Transfer Agent, to provide the withdrawal
payment specified.

ACCOUNT STATEMENTS - Your account is opened in accordance with your registration
instructions. Transactions in the account, such as additional investments will
be reflected on regular confirmation statements from the Transfer Agent.
Dividend and capital gain reinvestments and purchases through automatic
investment plans and certain retirement plans will be confirmed at least
quarterly.

AMERICAN FUNDSLINE AND AMERICAN FUNDSLINE ONLINE - You may check your share
balance, the price of your shares, or your most recent account transaction,
redeem shares (up to $50,000 per shareholder each day), or exchange shares
around the clock with American FundsLine and American FundsLine OnLine. To use
these services, call 800/325-3590 from a TouchTone(TM) telephone or access the
American Funds Web site on the Internet at www.americanfunds.com. Redemptions
and exchanges through American FundsLine and American FundsLine OnLine are
subject to the conditions noted above and in "Telephone and Computer Purchases,
Redemptions and Exchanges" below. You will need your fund number (see the list
of funds in The American Funds Group under "Purchase of Shares - Purchase
Minimums" and "Purchase of Shares - 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.

TELEPHONE AND COMPUTER PURCHASES, REDEMPTIONS AND EXCHANGES - By using the
telephone (including American FundsLine) or computer (including American
FundsLine OnLine), fax or telegraph purchase, redemption and/or exchange
options, you agree to hold the fund, the Transfer Agent, any of its affiliates
or mutual funds managed by such affiliates, and each of their

Money Market Funds - Page 36

<PAGE>

respective directors, trustees, officers, employees and agents harmless from any
losses, expenses, costs or liability (including attorney fees) which may be
incurred in connection with the exercise of these privileges. Generally, all
shareholders are automatically eligible to use these options. However, you may
elect to opt out of these options 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.

REDEMPTION OF SHARES - The funds' Declaration of Trust permits the funds to
direct the Transfer Agent to redeem the shares of any shareholder for their then
current net asset value per share if at such time the shareholder owns of record
shares having an aggregate net asset value of less than the minimum initial
investment amount required of new shareholders as set forth in the fund's
current registration statement under the 1940 Act, and subject to such further
terms and conditions as the Board of Trustees of the fund may from time to time
adopt.

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

EXECUTION OF PORTFOLIO TRANSACTIONS

The Investment Adviser places orders for the funds' portfolio securities
transactions. The Investment Adviser strives to obtain the best available prices
in its portfolio transactions taking into account the costs and quality of
executions. When, in the opinion of the Investment Adviser, two or more brokers
(either directly or through their correspondent clearing agents) are in a
position to obtain the best price and execution, preference may be given to
brokers who have provided investment research, statistical, or other related
services to the Investment Adviser. The funds do not consider that they have an
obligation to obtain the lowest available commission rate to the exclusion of
price, service and qualitative considerations.

There are occasions on which portfolio transactions for the funds may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either advantageous
or disadvantageous to the funds, they are effected only when the Investment
Adviser believes that to do so is in the interest of the funds. When such
concurrent authorizations occur, the objective is to allocate the executions in
an equitable manner. The funds will not pay a mark-up for research in principal
transactions.

Money Market Funds - Page 37

<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 each fund's portfolio,
are held by The Chase Manhattan Bank, One Chase Manhattan Plaza, New York, NY
10081, as Custodian. If the fund holds non-U.S. securities, the Custodian may
hold these securities pursuant to sub-custodial arrangements in non-U.S. banks
or non-U.S. branches of U.S. banks.

TRANSFER AGENT - American Funds Service Company, a wholly owned subsidiary of
the Investment Adviser, maintains the records of each shareholder's account,
processes purchases and redemptions of the funds' shares, acts as dividend and
capital gain distribution disbursing agent, and performs other related
shareholder service functions. American Funds Service Company was paid a fee of
$9,914,000, $623,000, and $191,000, by CMTA, CTRS and CTEX, for Class A shares,
respectively, and no fee was paid for CMTA Class B shares for the 2000 fiscal
year.

INDEPENDENT ACCOUNTANTS - PricewaterhouseCoopers LLP, 350 South Grand Avenue,
Los Angeles, CA 90071, serves as each funds' independent accountants providing
audit services, preparation of tax returns and review of certain documents to be
filed with the Securities and Exchange Commission. The financial statements
included in this Statement of Additional Information from the Annual Report have
been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing. The selection of the funds' independent accountants is
reviewed and determined annually by the Board of Trustees.

PROSPECTUSES AND REPORTS TO SHAREHOLDERS - The funds' fiscal year ends on
September 30. Shareholders are provided updated prospectuses annually. In
addition, shareholders are provided at least semiannually with reports showing
the investment portfolio, financial statements and other information. The funds'
annual financial statements are audited by the funds' independent accountants,
PricewaterhouseCoopers LLP. In an effort to reduce the volume of mail
shareholders receive from the fund when a household owns more than one account,
the Transfer Agent has taken steps to eliminate duplicate mailings of
prospectuses and shareholder reports. To receive additional copies of a
prospectus or report, shareholders should contact the Transfer Agent.

PERSONAL INVESTING POLICY - The funds, Capital Research and Management Company
and its affiliated companies, including the fund's principal underwriter, have
adopted codes of ethics which allow for personal investments, including
securities in which the funds may invest from time to time. This policy
includes: a ban on acquisitions of securities pursuant to an initial public
offering; restrictions on acquisitions of private placement securities;
pre-clearance 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.

SHAREHOLDER AND TRUSTEE RESPONSIBILITY - Under the laws of certain states,
including Massachusetts where each fund was organized 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

Money Market Funds - Page 38

<PAGE>

circumstances in which a fund itself would be unable to meet its obligations.
The Declaration of Trust contains an express disclaimer of shareholder liability
for acts, omissions, obligations or affairs of the fund and provides that notice
of the disclaimer may be given in each agreement, obligation, or instrument
which is entered into or executed by the fund or Trustees. The Declaration of
Trust provides for indemnification out of fund property of any shareholder held
personally liable for the obligations of each fund and also provides for each
fund to reimburse such shareholder for all legal and other expenses reasonably
incurred in connection with any such claim or liability.

Under the Declaration of Trust, the Trustees, officers, employees or agents of
each fund are not liable for actions or failure to act; however, they are not
protected from liability by reason of their willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
their office.

CLASS A INVESTMENT RESULTS AND RELATED STATISTICS

Each fund may from time to time provide yield information (including CTEX
tax-equivalent yield information) or comparisons of the fund's yield to various
averages in advertisements or in reports furnished to current or prospective
shareholders. Yield will be calculated on a seven-day, tax-equivalent and
effective basis, as appropriate, pursuant to formulas prescribed by the
Securities and Exchange Commission:

Seven-day yield = (net change in account value x /365//\\7\\)

Tax-equivalent yield = tax-exempt portion of seven-day yield/(1-stated
income tax rate) + taxable portion of seven day yield

Effective yield* = ([1 + (net change in account value) /1//\\7\\]/365/) - 1

*The effective yield will assume a year's compounding of the seven-day
yield.

CMTA Class A
------------

The seven-day current and effective yields for the period ended September
30, 2000 are calculated as follows:

ASSUMPTIONS:

Value of hypothetical pre-existing account with exactly one share at the
beginning of the period: $1.0000000

Value of same account* (excluding capital changes) at the end of the
seven-day period ending September 30, 2000: $1.0011629

*Value includes additional shares acquired with dividends paid on the
original share.

Money Market Funds - Page 39

<PAGE>

CALCULATION:

Ending account value: $1.0011629

Less beginning account value: $1.0000000

Net change in account value: $0.0011629

Seven-day yield = (0.0011629 X 365/7) = 6.06%

Effective yield = ([1 + (0.0011629) /1//\\7\\]/365/) - 1 = 6.25%

CTRS
----

The seven-day current and effective yields for the period ended September
30, 2000 are calculated as follows:

ASSUMPTIONS:

Value of hypothetical pre-existing account with exactly one share at the
beginning of the period: $1.0000000

Value of same account* (excluding capital changes) at the end of the
seven-day period ending September 30, 2000: $1.0010816

*Value includes additional shares acquired with dividends paid on the
original share.

CALCULATION:

Ending account value: $1.0010816

Less beginning account value: $1.0000000

Net change in account value: $0.0010816

Seven-day yield = (0.0010816 X 365/7) = 5.64%

Effective yield = ([1 + (0.0010816)/1//\\7\\]/365/) - 1 =
5.80%

Money Market Funds - Page 40

<PAGE>

CTEX
----

The seven-day current, effective and tax-equivalent yields for the period
ended September 30, 2000 are calculated as follows:

ASSUMPTIONS:

Value of hypothetical pre-existing account with exactly one share at the
beginning of the period: $1.0000000

Value of same account* (excluding capital changes) at the end of the
seven-day period ending September 30, 2000: $1.0007345

*Value includes additional shares acquired with dividends paid on the
original share.

CALCULATION:

Ending account value: $1.0007345

Less beginning account value: $1.0000000

Net change in account value: $0.0007345

Tax-exempt portion of net change: $0.0007345

Taxable portion of net change: $ -0-

Seven-day yield = ($0.0007345 X 365/7)
= 3.83%

Seven-day tax equivalent yield = ($0.0007345 X 365/7/(1-0.396)) = 6.34%

Effective yield = ([1 + ($0.0007345)
1/7]/365/)/-1/ = 3.90%

Each fund's investment results may also be calculated for longer periods in
accordance with the following method: by subtracting (a) the net asset value of
one share at the beginning of the period, from (b) the net asset value of all
shares an investor would own at the end of the period for the share held at the
beginning of the period (assuming reinvestment of all dividends and
distributions) and dividing by (c) the net asset value per share at the
beginning of the period. The resulting percentage indicates the positive or
negative rate of return that an investor would have earned from reinvested
dividends and distributions and any changes in share price during the period.
Based on the foregoing formula, the lifetime return of CMTA was 438.2% (for the
period 11/3/76 through 9/30/00), the lifetime return of CTEX was 40.0% (for the
period 10/24/89 through 9/30/00), and the lifetime return of CTRS was 48.6% (for
the period 2/1/91 through 9/30/00).

Money Market Funds - Page 41

<PAGE>

Each fund's investment results will vary from time to time depending upon market
conditions, the composition of the fund's portfolio and operating expenses of
the fund, so that any yield figure should not be considered representative of
what an investment in a fund may earn in any future period. These factors and
possible differences in calculation methods should be considered when comparing
each fund's investment results with those published for other investment
companies, other investment vehicles and averages. Investment results also
should be considered relative to the risks associated with the investment
objective and policies.

Money Market Funds - Page 42

<PAGE>

APPENDIX
Description of Commercial Paper Ratings

MOODY'S employs the designations "Prime-1," "Prime-2" and "Prime-3" to indicate
-------
commercial paper having the highest capacity for timely repayment. Issuers rated
Prime-1 have a superior capacity for repayment of short-term promissory
obligations. Prime-1 repayment capacity will normally be evidenced by the
following characteristics: leading market positions in well-established
industries; high rates of return on funds employed; conservative capitalization
structures with moderate reliance on debt and ample asset protection; broad
margins in earnings coverage of fixed financial charges and high internal cash
generation; and well-established access to a range of financial markets and
assured sources of alternate liquidity.

Issues rated Prime-2 have a strong capacity for repayment of short-term
promissory obligations. This will normally be evidenced by many of the
characteristics cited above, but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

S&P ratings of commercial paper are graded into four categories ranging from "A"
---
for the highest quality obligations to "D" for the lowest.

A - Issues assigned its highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with numbers
1, 2, and 3 to indicate the relative degree of safety.

A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+) sign
designation.

A-2 - Capacity for timely payments on issues with this designation is strong;
however, the relative degree of safety is not as high as for issues designated
"A-1."

Description of Bond Ratings

BOND RATINGS - The ratings of Moody's Investors Service, Inc. (Moody's) and
Standard & Poor's Corporation (S&P) represent their opinions as to the quality
of the municipal bonds which they undertake to rate. It should be emphasized,
however, that ratings are general and are not absolute standards of quality.
Consequently, municipal bonds with the same maturity, coupon and rating may
have different yields, while municipal bonds of the same maturity and coupon
with different ratings may have the same yield.

Moody's rates the long-term debt securities issued by various entities from
-------
"Aaa" to "C." Moody's applies the numerical modifiers 1, 2, and 3 in each
generic rating classification from Aa through B in its corporate bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category. Ratings are described as follows:

Money Market Funds - Page 43

<PAGE>

"Bonds which are rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as 'gilt edge.'
Interest payments are protected by a large or by an exceptionally stable
margin, and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues."

"Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than the Aaa
securities."

"Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future."

"Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well."

"Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class."

"Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small."

"Bonds which are rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest."

"Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings."

"Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing."

S & P rates the long-term securities debt 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:

"Debt rated 'AAA' has the highest rating assigned by S & P. Capacity to pay
interest and repay principal is extremely strong."

Money Market Funds - Page 44

<PAGE>

"Debt rated 'AA' has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in small degree."

"Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."

"Debt rated 'BBB' is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories."

"Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or impled 'BBB-' rating.

"Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating."

"The rating 'CC' is typically applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC' rating."

"The rating 'C' is typically applied to debt subordinated to senior debt which
is assigned an actual or implied 'CCC-' debt rating. The 'C' rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued."

"The rating 'C1' is reserved for income bonds on which no interest is being
paid."

"Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments 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 if debt service payments are jeopardized."

Note Ratings

STANDARD & POOR'S CORPORATION: "SP-1" and "SP-2" are the two highest note rating
categories, and are described as follows:

"SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a plus
(+) designation."

"SP-2 Satisfactory capacity to pay principal and interest."

Money Market Funds - Page 45

<PAGE>

MOODY'S INVESTORS SERVICE, INC.: "MIG-1" and "MIG-2" are the two highest note
rating categories, and are described as follows:

"MIG 1: This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or demonstrated
broad based access to the market for refinancing."

"MIG 2: This designation denotes high quality. Margins of protection are ample
although not as large as in the preceding group."

Money Market Funds - Page 46

<TABLE>
The Cash Management Trust of America
Investment Portfolio
September 30, 2000

Principal Market
Yield at Amount Value
Acquisition (000) (000)
-------- -------- --------
<S> <C> <C> <C>

Certificates of Deposit - 0.46%
National Westminster Bank PLC
October 25, 2000 6.52% $ 25,000 $ 25,000
----------
Total Certificates of Deposit 25,000
----------

Commercial Paper - 71.64%
ABN AMRO North America Finance Inc.
October 10, 2000 6.54 50,000 49,910
A.I. Credit Corp.
October 20, 2000 6.54 50,000 49,820
Alcoa Inc.
October 4, 2000 6.52 45,000 44,968
October 24, 2000 6.53 50,000 49,784
American Express Credit Corp.
October 19, 2000 6.54 50,000 49,828
November 16, 2000 6.54 25,000 24,788
American General Finance Corp.
October 27, 2000 6.53 50,000 49,756
American Honda Finance Corp.
October 12, 2000 6.53 50,000 49,892
October 27, 2000 6.53 25,000 24,878
Anheuser-Busch Cos., Inc.
November 3, 2000 6.52 37,000 36,774
November 9, 2000 6.52 15,000 14,892
ANZ (Delaware) Inc.
October 16, 2000 6.51 50,000 49,856
Asset Securitization Cooperative Corp.
October 19, 2000 (1) 6.54 50,000 49,828
November 16, 2000 (1) 6.55 25,000 24,788
AT&T Corp.
October 30, 2000 6.53 30,000 29,838
November 15, 2000 6.54 45,000 44,627
Avon Capital Corp.
October 11, 2000 (1) 6.51 25,000 24,950
Bank of Nova Scotia
October 3, 2000 6.57 25,000 24,986
November 17, 2000 6.53 25,000 24,784
Barclays U.S. Funding Corp.
October 6, 2000 6.53 50,000 49,946
Bayerische Hypo-Und Vereinsbank AG
October 4, 2000 6.56 25,000 24,982
October 10, 2000 6.54 25,000 24,955
BellSouth Telecommunications, Inc.
October 10, 2000 6.54 50,000 49,910
BMW US Capital Corp.
October 11, 2000 6.54 30,000 29,940
October 12, 2000 6.55 25,000 24,946
Campbell Soup Co.
October 24, 2000 6.52 50,000 49,784
CDC Commercial Paper Corp.
October 18, 2000 (1) 6.52 25,000 24,919
Chevron USA Inc.
October 25, 2000 6.52 50,000 49,775
Ciesco LP
November 2, 2000 6.54 50,000 49,703
CIT Group, Inc.
November 1, 2000 6.54 50,000 49,711
November 6, 2000 6.56 50,000 49,666
Coca-Cola Co.
October 19, 2000 6.53 50,000 49,829
November 3, 2000 6.51 50,000 49,695
Colgate-Palmolive Co.
November 13, 2000 (1) 6.54 32,000 31,747
Den Danske Corp. Inc.
October 12, 2000 6.51 25,000 24,946
October 16, 2000 6.53 25,000 24,928
October 18, 2000 6.51 25,000 24,919
Deutsche Bank Financial Inc.
October 23, 2000 6.52 50,000 49,793
Dresdner U.S. Finance Inc.
October 16, 2000 6.53 50,000 49,856
Duke Energy Corp.
October 3, 2000 6.56 40,000 39,978
E.I. Du Pont de Nemours and Co.
October 13, 2000 6.52 25,000 24,941
October 24, 2000 6.51 25,000 24,892
Eksportfinans ASA
October 10, 2000 6.53 50,000 49,910
Emerson Electric Co.
November 17, 2000 (1) 6.53 50,000 49,568
Equilon Enterprises LLC
October 3, 2000 6.53 21,000 20,989
November 6, 2000 6.54 25,000 24,833
Exxon Imperial U.S. Inc.
October 26, 2000 (1) 6.52 25,000 24,883
Ford Motor Credit Co.
October 6, 2000 6.57 25,000 24,973
October 12, 2000 6.55 50,000 49,891
Gannett Co., Inc.
October 13, 2000 (1) 6.55 50,000 49,882
October 16, 2000 (1) 6.52 50,000 49,856
General Electric Capital Corp.
October 16, 2000 6.54 25,000 24,928
October 19, 2000 6.53 25,000 24,914
October 30, 2000 6.54 25,000 24,865
General Motors Acceptance Corp.
October 6, 2000 6.55 50,000 49,946
October 18, 2000 6.53 50,000 49,838
Gillette Co.
October 5, 2000 (1) 6.56 25,000 24,977
Halifax PLC
October 11, 2000 6.51 50,000 49,901
Hewlett-Packard Co.
October 16, 2000 6.50 25,000 24,928
Household Finance Corp.
October 26, 2000 6.53 100,000 99,531
IBM Credit Corp.
October 3, 2000 6.58 50,000 49,973
October 11, 2000 6.54 50,000 49,901
International Lease Finance Corp.
October 2, 2000 6.57 40,000 39,986
October 6, 2000 6.54 25,000 24,973
John Hancock Capital Corp.
October 2, 2000 (1) 6.50 10,000 9,996
October 6, 2000 (1) 6.50 20,000 19,978
Johnson & Johnson
October 20, 2000 (1) 6.50 25,000 24,910
Kellogg Co.
November 14, 2000 6.53 50,000 49,596
Kimberly-Clark Corp.
October 27, 2000 (1) 6.53 45,000 44,781
Lucent Technologies Inc.
October 5, 2000 6.53 35,000 34,968
Merck & Co., Inc.
October 23, 2000 6.51 50,000 49,793
Minnesota Mining & Manufacturing Co.
October 20, 2000 6.49 25,000 24,910
Monte Rosa Capital Corp.
October 17, 2000 (1) 6.56 50,000 49,846
Motiva Enterprises LLC
October 27, 2000 6.53 25,000 24,878
November 13, 2000 6.54 20,000 19,842
Motorola Credit Corp.
October 6, 2000 6.55 25,000 24,973
October 26, 2000 6.51 25,000 24,883
Panasonic Finance America Inc.
October 2, 2000 (1) 6.58 25,000 24,991
October 11, 2000 (1) 6.53 25,000 24,950
Park Avenue Receivables Corp.
October 3, 2000 (1) 6.56 25,000 24,986
October 6, 2000 (1) 6.54 25,000 24,973
October 11, 2000 (1) 6.55 50,000 49,900
Pharmacia Corp.
October 2, 2000 6.59 25,000 24,991
October 4, 2000 6.51 20,000 19,986
October 17, 2000 6.53 30,000 29,908
Preferred Receivables Funding Corp.
October 13, 2000 (1) 6.54 35,000 34,918
October 18, 2000 (1) 6.55 45,010 44,863
October 26, 2000 (1) 6.55 20,000 19,906
Rio Tinto America, Inc.
November 1, 2000 (1) 6.55 25,000 24,856
November 20, 2000 (1) 6.55 15,000 14,862
Royal Bank of Canada
October 12, 2000 6.52 50,000 49,892
SBC Communications Inc.
October 18, 2000 (1) 6.54 48,000 47,844
November 16, 2000 (1) 6.54 25,000 24,789
Sony Capital Corp.
October 2, 2000 (1) 6.54 50,000 49,982
Svenska Handelsbanken Inc.
October 23, 2000 6.53 50,000 49,792
Texaco Inc.
October 10, 2000 6.54 50,000 49,910
Total Fina Elf SA
November 8, 2000 (1) 6.54 40,000 39,719
Toyota Motor Credit Corp.
October 13, 2000 (1) 6.52 45,000 44,894
Tribune Co.
November 2, 2000 (1) 6.53 50,000 49,698
United Technologies Corp.
October 23, 2000 (1) 6.53 25,000 24,896
USAA Capital Corp.
October 12, 2000 6.51 20,000 19,957
November 9, 2000 6.54 15,000 14,892
November 15, 2000 6.53 20,000 19,835
Verizon Network Funding Co.
October 4, 2000 6.54 50,000 49,964
Wal-Mart Stores, Inc.
October 3, 2000 (1) 6.54 27,000 26,985
October 23, 2000 (1) 6.51 25,000 24,897
Wells Fargo & Co.
October 20, 2000 6.52 25,000 24,910
October 27, 2000 6.53 25,000 24,878
----------
Total Commercial Paper 3,881,332
----------

Federal Agency Discount Notes - 27.41%
Fannie Mae
October 5, 2000 6.56 50,000 49,955
October 20, 2000 6.60 10,000 9,964
October 25, 2000 6.57 50,000 49,777
Federal Home Loan Banks
October 4, 2000 6.55 50,000 49,964
October 18, 2000 6.54 50,000 49,840
October 20, 2000 6.58 100,000 99,643
October 25, 2000 6.58 50,000 49,777
November 17, 2000 6.56 30,000 29,744
November 22, 2000 6.57 105,000 103,997
December 1, 2000 6.58 65,500 64,766
Freddie Mac
October 3, 2000 6.56 85,000 84,955
October 5, 2000 6.57 60,800 60,746
October 10, 2000 6.59 75,000 74,866
October 13, 2000 6.60 84,500 84,303
October 17, 2000 6.59 165,500 164,997
October 24, 2000 6.55 40,000 39,829
October 31, 2000 6.58 50,000 49,724
November 7, 2000 6.57 100,000 99,324
November 14, 2000 6.56 50,000 49,600
November 21, 2000 6.57 95,000 94,109
Sallie Mae
December 21, 2000 (2) 6.71 25,000 24,997
January 18, 2001 (2) 6.63 50,000 49,992
February 15, 2001 (2) 6.53 50,000 49,981
----------
Total Federal Agency Discount Notes 1,484,850
----------
Total Investment Securities (cost:$5,391,232,000) 5,391,182
Excess of cash and receivables over payables 26,816
----------
NET ASSETS $5,417,998
----------

(1) Restricted securities that can be resold only
to institutional investors.
In practice, these securities are as liquid as
unrestricted securities in the portfolio.
(2) Coupon rate changes weekly; description of issue
and yield at acquisition reflect current coupon rate.

See Notes to Financial Statements
</TABLE>

<TABLE>
THE CASH MANAGEMENT TRUST OF AMERICA
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000 (dollars in thousands)
<S> <C> <C>
Assets:
Investment securities at market
(cost: $5,391,232) $5,391,182
Receivables for--
Sales of fund's shares $71,299
Accrued interest 1,566
Other 4 72,869

5,464,051
Liabilities:
Payables for--
Repurchases of fund's shares 41,919
Dividends on fund's shares 1,749
Management services 1,264
Other expenses 1,121 46,053

Net Assets at September 30, 2000 (unlimited shares authorized) $5,417,998

Class A shares
Equivalent to $1.00 per share
Net assets $5,417,201
Shares outstanding 5,417,179,577
Class B shares
Equivalent to $1.00 per share
Net assets $797
Shares outstanding 796,991

STATEMENT OF OPERATIONS
for the year ended September 30, 2000 (dollars in thousands)

Investment Income:
Income:
Interest $345,505

Expenses:
Management services fee $16,005
Distribution expenses- Class A 4,348
Distribution expenses- Class B 2
Transfer agent fee- Class A 9,914
Transfer agent fee- Class B -
Reports to shareholders 356
Registration statement and prospectus 1,030
Postage, stationery and supplies 2,251
Trustees' fees 47
Auditing and legal fees 49
Custodian fee 363
Taxes other than federal income tax 74 34,439
Net investment income 311,066

Change from Unrealized Appreciation to
Unrealized Depreciation on Investments:
Net unrealized appreciation (depreciation)
on investments:
Beginning of year 32
End of year (50)
Net change from unrealized appreciation to unrealized
depreciation on investments (82)

Net Increase in Net Assets
Resulting from Operations $310,984

STATEMENT OF CHANGES IN NET ASSETS (dollars in thousands)

Year Ended September 30

2000 1999

Operations:
Net investment income $311,066 $231,655
Net unrealized appreciation (depreciation)
on investments (82) 16
Net increase in net assets
resulting from operations 310,984 231,671

Dividends Paid to Shareholders:
Class A (310,985) (231,656)
Class B (10) 0
Total dividends paid to shareholders (310,995) (231,656)

Capital Share Transactions:
Proceeds from shares sold 15,732,691 14,382,799
Proceeds from shares issued in reinvestment
of net investment income dividends 285,391 215,273
Cost of shares repurchased (16,463,123) (13,338,942)
Net (decrease) increase in net assets resulting
from capital share transactions (445,041) 1,259,130

Total (Decrease) Increase in Net Assets (445,052) 1,259,145

Net Assets:
Beginning of year 5,863,050 4,603,905

End of year $5,417,998 $5,863,050

See Notes to Financial Statements

</TABLE>

Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION - The Cash Management Trust of America (the "fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks to provide income on cash reserves, while
preserving capital and maintaing liquidity, through investments in high-quality
short-term money market instruments. The fund offers Class A and Class B
shares. Class B shares are sold without an initial sales charge but are subject
to a contingent deferred sales charge paid upon redemption. This charge
declines from 5% to zero over a period of six years. Class B shares have higher
distribution expenses and transfer agent fees than Class A shares. Class B
shares are automatically converted to Class A shares eight years after the date
of purchase. Holders of both classes of shares have equal pro rata rights to
assets and identical voting, dividend, liquidation and other rights, except
that each class bears different distribution and transfer agent expenses, and
each class shall have exclusive rights to vote on matters affecting only their
class.

SIGNIFICANT ACCOUNTING POLICIES - The financial statements have been prepared
in conformity with accounting principles generally accepted in the United
States which require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:

NET ASSET VALUE - The fund uses the penny-rounding method of valuing its
shares, in accordance with Securities and Exchange Commission (SEC) rules. This
method permits the fund to maintain a constant net asset value of $1.00 per
share, provided the market value of the fund's shares does not deviate from
$1.00 by more than one-half of 1% and the fund complies with other restrictions
set forth in the SEC rules.

SECURITY VALUATION - Fixed-income securities are valued at prices obtained from
a pricing service, when such prices are available; however, in circumstances
where the investment adviser deems it appropriate to do so, such securities
will be valued at the mean quoted bid and asked prices or at prices for
securities of comparable maturity, quality and type. Short-term securities
maturing within 60 days are valued at amortized cost, which approximates market
value. Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Trustees. The ability of the issuers of the
fixed-income securities held by the fund to meet their obligations may be
affected by economic developments in a specific industry, state or region.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -
Security transactions are accounted for as of the trade date. 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.

DIVIDENDS TO SHAREHOLDERS - Dividends to shareholders are declared daily after
the determination of the fund's net investment income and are paid to
shareholders monthly.

ALLOCATIONS - Income, expenses (other than class-specific expenses) and
realized and unrealized gains and losses are allocated daily between Class A
and Class B based on their relative net asset values. Distribution expenses,
transfer agent fees and any other class-specific expenses are accrued daily and
charged to the applicable share class.

2. FEDERAL INCOME TAXATION

The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income for the fiscal year. As a regulated investment company, the fund
is not subject to income taxes if such distributions are made. Required
distributions are determined on a tax basis and may differ from net investment
income for financial reporting purposes. In addition, the fiscal year in which
amounts are distributed may differ from the year in which the net investment
income is recorded by the fund.

As of September 30, 2000, net unrealized depreciation on investments for book
and federal income tax purposes aggregated $50,000, of which all related to
depreciated securities. The cost of portfolio securites for book and federal
income tax purposes was $5,391,232,000 at September 30, 2000.

3. FEES AND TRANSACTIONS WITH RELATED PARTIES

INVESTMENT ADVISORY FEE - The fee of $16,005,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Trustees of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees accrued
daily, based on the following rates and net asset levels:

<TABLE>
<CAPTION>
NET ASSET LEVEL

Rate In Up to
Excess
of

<S> <C> <C>
0.32% $0 $1 billion
0.29 1 billion 2 billion
0.27 2 billion
</TABLE>

DISTRIBUTION EXPENSES - The fund has adopted plans of distribution with
American Funds Distributors, Inc. (AFD) under which it may finance activities
primarily intended to sell fund shares, provided the categories of expenses are
approved in advance by the fund's Board of Trustees. The plans provide for
aggregate annual expense limits of 0.15% of net assets for Class A shares, and
0.90% of net assets for Class B shares.

For Class A shares, approved categories of expense include dealer service fees
of up to 0.15% of net assets. For the year ended September 30, 2000, aggregate
distribution expenses were $4,348,000, or 0.08% of net assets attributable to
Class A shares.

For Class B shares, approved categories of expense include fees of 0.75% per
annum payable to AFD. AFD sells the rights to receive such payments (as well as
any contingent deferred sales charges payable in respect of shares sold during
the period) in order to finance the payment of dealer commissions. Also
included are service fees of 0.15% per annum. These fees are paid to AFD to
compensate AFD for paying service fees to qualified dealers. For the year
ended September 30, 2000, aggregate distribution expenses were $2,000, or 0.90%
of net assets attributable to Class B shares.

As of September 30, 2000, accrued and unpaid distribution expenses payable to
AFD for Class A and Class B shares were $296,000 and $1,000, respectively.

TRANSFER AGENT FEE - A fee of $9,914,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund.

DEFERRED TRUSTEES' FEES - Trustees who are unaffiliated with CRMC may elect to
defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of September 30, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Trustees, were $29,000.

AFFILIATED TRUSTEES AND OFFICERS - CRMC is owned by The Capital Group
Companies, Inc. AFS and AFD are both wholly owned subsidiaries of CRMC.
Officers of the fund and certain Trustees are or may be considered to be
affiliated with CRMC, AFS and AFD. No such persons received any remuneration
directly from the fund.

4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES

The fund made purchases and sales of investment securities, including
maturities, of $47,067,597,000 and $47,903,032,000, repectively, during the
year ended September 30, 2000.

Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $363,000
includes $18,000 that was paid by these credits rather than in cash.

Net assets consisted of the following:
<TABLE>
<S> <C>
dollars in thousands
Capital paid in on shares of beneficial interest $5,417,976
Undistributed net Investment Income 72
Net unrealized depreciation (50)
Net Assets $5,417,998

</TABLE>

Capital share transactions in the fund were as follows:
<TABLE>
Year Ended Year ended
September 30, 2000 September 30, 1999
Amount (000) Shares Amount (000) Shares
<S> <C> <C> <C> <C>
Class A Shares:
Sold $15,730,750 15,730,750,102 $ 14,382,799 14,382,799,048
Reinvestment of dividends 285,383 285,383,370 215,273 215,272,362
Repurchased (16,461,971) (16,461,971,145) (13,338,942) (13,338,941,818)
Net (decrease) increase in Class A (445,838) (445,837,673) 1,259,130 1,259,129,592
Class B Shares*:
Sold 1,941 1,940,764 - -
Reinvestment of dividends 8 8,464 - -
Repurchased (1,152) (1,152,237) - -
Net increase in Class B 797 796,991 - -
Total net (decrease) increase in fund $ (445,041) (445,040,682) $ 1,259,130 1,259,129,592

* Class B shares were not offered before March 15, 2000.
</TABLE>

<TABLE>
PER-SHARE DATA AND RATIOS (1)
<S> <C> <C> <C>

Net asset Dividends
value, Net (from net
beginning investment investment
Year ended of year income income)
Class A:
2000 $1.00 $.055 (2) $(.055)
1999 1.00 .045 (.045)
1998 1.00 .050 (.050)
1997 1.00 .049 (.049)
1996 1.00 .050 (.050)

Class B:
2000 1.00 .027 (2) (.027)

Net asset Net assets,
value, end Total end of year
Year ended of year return (in millions)
Class A:
2000 $1.00 5.66% $5,417
1999 1.00 4.59 5,863
1998 1.00 5.15 4,604
1997 1.00 5.03 3,527
1996 1.00 5.06 3,304

Class B:
2000 1.00 2.73 1

Ratio of Ratio of
expenses net income
to average to average
Year ended net assets net assets
Class A:
2000 .61% 5.53%
1999 .58 4.52
1998 .58 5.02
1997 .57 4.93
1996 .60 4.95

Class B:
2000 1.43 (3) 5.21 (3)

(1) The years 1996 through 2000 represent,
for Class A shares, fiscal years ended
September 30. The period ended 2000
represents, for Class B shares, the
199-day period ended September 30,
2000. Class B shares were not
offered before March 15, 2000. Total
return for Class B is based on activity
during the period and
thus is not representative of a full year.
Total returns exclude all sales charges,
including
contingent deferred sales charges.
(2) Based on average shares outstanding.
(3) Annualized.

</TABLE>

Report of Independent Accountants

To the Board of Trustees and Shareholders of The Cash Management Trust of
America:

In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of The Cash Management Trust of
America (the "Fund") at September 30, 2000, the results of its operations, the
changes in its net assets and the per-share data and ratios for the years
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and per-share data and
ratios (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 auditing standards generally accepted
in the United Sates of America, which 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 at September
30, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.

PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
October 31, 2000

2000 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 distributions received by shareholders
during such fiscal year.

Certain states may exempt from income taxation that portion of the dividends
paid from net investment income that was derived from direct U.S. Treasury
obligations. For purposes of computing this exclusion, none of the dividends
paid by the fund from net investment income were derived from interest on
direct U.S. Treasury obligations.

Dividends received by retirement plans such as IRAs, Keogh-type plans and
403(b) plans need not be reported as taxable income. However, many retirement
plan trusts may need this information for their annual information reporting.

SINCE THE INFORMATION ABOVE IS REPORTED FOR THE FUND'S FISCAL YEAR AND NOT THE
CALENDAR YEAR, SHAREHOLDERS SHOULD REFER TO THEIR FORM 1099-DIV OR OTHER TAX
INFORMATION WHICH WILL BE MAILED IN JANUARY 2001 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR 2000 TAX RETURNS. SHAREHOLDERS SHOULD CONSULT
THEIR TAX ADVISERS.

<TABLE>
The U.S. Treasury Money Fund of America
Investment Portfolio
September 30, 2000
<S> <C> <C> <C>
Principal Market
Yield at Amount Value
Acquisition (000) (000)
------------- ------- -------------
U.S. Treasury Securities - 101.95%

U.S. Treasury bills 10/5/00 6.02% - 6.20% $16,635 $ 16,622
U.S. Treasury bills 10/12/00 5.98% - 6.18% 45,400 45,312
U.S. Treasury bills 10/19/00 6.16% 20,000 19,939
U.S. Treasury bills 10/26/00 6.18% 8,920 8,883
U.S. Treasury bills 11/2/00 6.05% - 6.25% 37,910 37,707
U.S. Treasury bills 11/9/00 6.11% - 6.27% 55,990 55,631
U.S. Treasury bills 11/16/00 6.09% 23,900 23,714
U.S. Treasury bills 11/24/00 6.11% - 6.32% 47,215 46,805
U.S. Treasury bills 11/30/00 6.08% - 6.14% 17,050 16,883
U.S. Treasury bills 12/7/00 6.10% - 6.16% 65,720 64,994
U.S. Treasury bills 12/14/00 6.13% - 6.16% 33,530 33,122
U.S. Treasury bills 12/21/00 6.17% - 6.18% 7,050 6,955
-------------
Total Investment Securities (cost: $376,483,000) 376,567
Excess of payables over cash and receivables (7,194)
-------------
Net Assets $369,373
=============

See Notes to Financial Statements

</TABLE>

<TABLE>
The U.S. Treasury Money Fund of America
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000
(dollars in thousands)
<S> <C> <C>
Assets:
Investment securities at market
(cost: $376,483) $376,567
Receivables for --
Sales of fund's shares 1,821

378,388
Liabilities:
Payables for --
Bank overdraft $6,125
Repurchases of fund's shares 2,626
Dividends on fund's shares 85
Management services 91
Other expenses 88 9,015

Net Assets at September 30, 2000 --
Equivalent to $1.00 per share on
369,287,127 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $369,373

STATEMENT OF OPERATIONS
for the year ended September 30, 2000
(dollars in thousands)
Investment Income:
Income:
Interest $23,590

Expenses:
Management services fee $1,296
Distribution expenses 431
Transfer agent fee 623
Reports to shareholders 13
Registration statement and prospectus 113
Postage, stationery and supplies 140
Trustees' fees 17
Auditing and legal fees 33
Custodian fee 37
Taxes other than federal income tax 7 2,710
Net investment income 20,880

Increase in Unrealized Appreciation
on Investments:
Net unrealized appreciation on investments:
Beginning of year 79
End of year 85

Net increase in unrealized appreciation
on investments 6

Net Increase in Net Assets Resulting
from Operations $20,886

STATEMENT OF CHANGES IN NET ASSETS
(dollars in thousands)
Year ended September 30

2000 1999
Operations:
Net investment income $20,880 $16,664
Net unrealized appreciation (depreciation)
on investments 6 (140)
Net increase in net assets
resulting from operations 20,886 16,524

Dividends Paid to Shareholders (20,879) (16,664)

Capital Share Transactions:
Proceeds from shares sold 840,272 774,656
Proceeds from shares issued in
reinvestment of net investment income
dividends 19,527 15,677
Cost of shares repurchased (957,128) (679,108)

Net (decrease) increase net assets resulting
from capital share transactions (97,329) 111,225

Total (Decrease) Increase Net Assets (97,322) 111,085

Net Assets:
Beginning of year 466,695 355,610

End of year $369,373 $466,695

See Notes to Financial Statements
</TABLE>

Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION - The U.S. Treasury Money Fund of America (the "fund") is
registered under the Investment Company Act of 1940 as an open-end, diversified
management investment company. The fund seeks to provide income on cash
reserves, while preserving capital and maintaining liquidity, through
investments in U.S. Treasury securities maturing in one year or less.

NET ASSET VALUE - The fund uses the penny-rounding method of valuing its
shares, in accordance with Securities and Exchange Commission (SEC) rules.
This method permits the fund to maintain a constant net asset value of $1.00
per share, provided the market value of the fund's shares does not deviate from
$1.00 by more than one-half of 1% and the fund complies with other restrictions
set forth in the SEC rules.

Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith by a
committee appointed by the Board of Trustees. The ability of the issuers of the
fixed-income securities held by the fund to meet their obligations may be
affected by economic developments in a specific industry, state or region.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are
accounted for as of the trade date. 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.

DIVIDENDS TO SHAREHOLDERS - Dividends to shareholders are declared daily after
the determination of the fund's net investment income and are paid to
shareholders monthly.

2. FEDERAL INCOME TAXATION

The fund complies with the requirements of the Internal Revenue Code applicable
to regulated investment companies and intends to distribute all of its net
taxable income for the fiscal year. As a regulated investment company, the
fund is not subject to income taxes if such distributions are made. Required
distributions are determined on a tax basis and may differ from net investment
income for financial reporting purposes. In addition, the fiscal year in which
amounts are distributed may differ from the year in which the net investment
income is recorded by the fund.

As of September 30, 2000, net unrealized appreciation on investments for book
and federal income tax purposes aggregated $85,000 of which all related to
appreciated securities. The cost of portfolio securities for book and federal
income tax purposes was $376,483,000 at September 30, 2000.

3. FEES AND TRANSACTIONS WITH RELATED PARTIES

INVESTMENT ADVISORY FEE - The fee of $1,296,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Trustees of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees accrued
daily, based on the following rates and net asset levels:

<TABLE>
<CAPTION>
Net Asset Level

Rate In Excess of Up to

<S> <C> <C>
0.300% $ 0 $800 million

0.285% 800 million

</TABLE>

DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution with American Funds
Distributors, Inc. (AFD), the fund may expend up to 0.15% of net assets
annually for any activities primarily intended to sell fund shares, provided
the categories of expense are approved in advance by the fund's Board of
Trustees. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. For the year ended
September 30, 2000, aggregate distribution expenses under the Plan were
$431,000 or .10% of net assets. As of September 30, 2000, accrued and unpaid
distribution expenses payable to AFD were $30,000.

TRANSFER AGENT FEE - A fee of $623,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund.

DEFERRED TRUSTEES' FEES - Trustees who are unaffiliated with CRMC may elect
to defer part or all of the fees earned for services as members of the Board.
Amounts deferred are not funded and are general unsecured liabilities of the
fund. As of September 30, 2000, aggregate deferred amounts and earnings thereon
since the deferred compensation plan's adoption (1993), net of any payments to
Trustees, were $13,000.

4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES
The fund made purchases and sales of investment securities, including
maturities, of $2,268,973,000 and $2,382,639,000, respectively, during the year
ended September 30, 2000.

Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $37,000 includes
$2,000 that was paid by these credits rather than in cash.

Net assets consisted of the following:
<TABLE>
<S> <C>
dollars in thousands
Capital paid in on shares of beneficial interest $369,287
Undistributed net Investment Income 1
Net unrealized appreciation 85
Net Assets $369,373

</TABLE>

Capital share transactions in the fund were as follows:
<TABLE>
<S> <C> <C>
Year ended September 30, 2000
Amount (000) Shares

Sold $ 840,272 840,272,661
Reinvestment of dividends 19,527 19,526,770
Repurchased (957,128) (957,128,378)
Total Net (Decrease) Increase in Fund $ (97,329) (97,328,947)

Year ended September 30, 1999
Amount (000) Shares

Sold $ 774,656 774,656,722
Reinvestment of dividends 15,677 15,676,872
Repurchased (679,108) (679,107,911)
Total Net (Decrease) Increase in Fund $ 111,225 111,225,683

</TABLE>

<TABLE>
The U. S. Treasury Fund of America
PER-SHARE DATA AND RATIOS
<S> <C> <C> <C>
Net asset Dividends
value, Net (from net
beginning investment investment
Year ended of year income income)
Class A : (1)
2000 $ 1.00 $.049(2) $(.049)
1999 1.00 .039 (.039)
1998 1.00 .045 (.045)
1997 1.00 .046 (.046)
1996 1.00 .046 (.046)

Net asset Net assets,
value, end Total end of year
Year ended of year return (in millions)
Class A : (1)
2000 $ 1.00 5.00% $369
1999 1.00 4.00 467
1998 1.00 4.63 356
1997 1.00 4.71 279
1996 1.00 4.66 256

Ratio of Ratio of
expenses net income
to average to average
Year ended net assets net assets
Class A : (1)
2000 .62% 4.81%
1999 .59 3.95
1998 .59 4.49
1997 .53 4.61
1996 .65 4.53

(1) The fund offers Class A shares only.
(2) Based on average shares outstanding
</TABLE>

Report of Independent Accountants

To the Board of Trustees and Shareholders of The U.S. Treasury Money Fund of
America:

In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of The U.S. Treasury Money Fund of
America (the "Fund") at September 30, 2000, the results of its operations, the
changes in its net assets and the per-share data and ratios for the years
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and per-share data and
ratios (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 auditing standards generally accepted
in the United Sates of America, which 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 at September
30, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.

PRICEWATERHOUSECOOPERS LLP
Los Angeles, California
October 31, 2000

2000 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 distributions received by shareholders
during such fiscal year.

Certain states may exempt from income taxation that portion of the dividends
paid from net investment income that was derived from direct U.S. Treasury
obligations. For purposes of computing this exclusion, all of the dividends
paid by the fund from net investment income were derived from interest on
direct U.S. Treasury obligations.

<TABLE>
The Tax-Exempt Money Fund of America
Investment Portfolio, September 30, 2000

Principal Market
Yield at Amount Value
Municipal Securities Acquisition (000) (000)
-------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Alabama - 1.27%
Industrial Development Board of the City of Montgomery
, Pollution Control and Solid Waste Disposal Revenue
Refunding Bonds (General Electric Company Project), 4.20% $3,500 $ 3,500
Series 1990, 4.20% 10/2/00

Alaska - 1.96%
City of Valdez:
Marine Terminal Revenue Refunding Bonds (ARCO
Transportation Alaska, Inc. Project), TECP:
1994 Series A, 4.15% 10/3/00 4.15 1,700 1,700
1994 Series C, 4.25% 10/6/00 4.25 1,000 1,000
Variable Rate Marine Terminal Revenue Refunding Bonds:
(Exxon Pipeline Company Project), 1993 Series C, 5.50 1,000 1,000
5.50% 10/2/00*
(Mobil Alaska Pipeline Co. Project), 1993 Series A, 5.40 1,700 1,700
5.40% 10/6/00*
Arizona - 3.67%
Salt River Project Agricultural Improvement and Power
District, Promissory Notes, TECP:
Series A:
4.20% 10/4/00 4.20 1,500 1,500
4.10% 10/5/00 4.10 1,100 1,100
4.20% 11/1/00 4.20 2,500 2,500
Series B:
4.10% 10/4/00 4.11 2,000 2,000
4.10% 11/9/00 4.10 2,000 2,000
County of Apache, Industrial Development Revenue Bonds
(Tuscon Electric Power Co. Springerville
Project), 1983 Series A, 5.55% 10/06/00* 5.55 1,000 1,000

Colorado - 1.82%
General Fund Tax and Revenue Anticipation Notes, 4.29 5,000 5,023
Series 2000A, 5.00% 6/27/01

Delaware - 1.09%
Economic Development Authority, Industrial Development
Revenue Bonds (Delaware Clean Power Project),
Series 1997D AMT, 5.85% 10/6/00* 5.85 3,000 3,000

District of Columbia - 3.48%
Multimodal Revenue Bonds (American National Red Cross 4.15 2,100 2,100
Issue), Series 2000, 4.15% 11/7/00
Variable Rate Revenue Bonds (National Academy of
Sciences Project), Series 1999 B, TECP:
4.25% 10/19/00 4.25 2,500 2,500
4.35% 10/23/00 4.35 2,500 2,500
4.20% 11/15/00 4.20 2,500 2,500

Florida - 1.56%
City of Gainesville, Utilities System, Commercial 4.20 2,300 2,300
Paper Notes, Series C, TECP, 4.20% 10/16/00
University of South Florida Foundation, Inc., 5.45 2,000 2,000
Certificates of Participation, Series 1999, 5.45% 10/6/00*

Georgia - 0.91%
Municipal Electric Authority of Georgia Commercial
Paper Program, Project One Bond Anticipation Notes,
Series 1985 A, TECP:
4.25% 10/13/00 4.25 1,500 1,500
4.10% 11/8/00 4.10 1,000 1,000

Illinois - 1.09%
Illinois Development Finance Authority, Variable Rate
Demand Revenue Bonds, Series 1999 (Metropolitan
Family Services Project), 5.70% 10/6/00* 5.70 3,000 3,000

Kentucky - 3.34%
Pendleton County, Multi-County Lease Revenue Bonds
(Kentucky Association of Counties Leasing Trust
Program), Series 1989, Money Market Municipal, TECP:
4.20% 11/6/00 4.20 4,200 4,200
4.10% 11/7/00 4.10 3,000 3,000
4.05% 11/9/00 4.05 2,000 1,999

Louisiana - 0.40%
South Louisiana Port Commission, Port Facility Revenue 5.65 1,100 1,100
Bonds (Holnam Inc. Project), Series 1997, AMT,
5.65% 10/6/00*

Maryland - 10.81%
Health and Higher Education Facilities Authority, Pooled
Loan Program Revenue Notes (The Johns Hopkins Hospital),
Series C, TECP:
4.05% 10/6/00 4.05 1,800 1,800
4.20% 10/6/00 4.20 1,000 1,000
4.20% 10/12/00 4.20 3,500 3,500
4.15% 10/13/00 4.15 1,500 1,500
4.15% 11/3/00 4.15 3,300 3,300
Anne Arundel County, Economic Development Revenue Bonds
(Baltimore Gas and Electric Co. Project), TECP:
Series 1985, 4.30% 10/3/00 4.30 4,000 4,000
Series 1988, AMT:
4.25% 10/5/00 4.25 2,500 2,500
4.25% 11/3/00 4.25 1,300 1,300
4.20% 11/8/00 4.20 2,900 2,900
Baltimore County, Economic Development Revenue Bonds 4.20 1,100 1,100
(Baltimore Gas and Electric Co. Project), Series 1985,
TECP, 4.20% 10/4/00
Montgomery County, Consolidated Commercial Paper Bond
Anticipation Notes, Series 1995, TECP:
4.20% 10/2/00 4.20 3,000 3,000
4.25% 10/12/00 4.25 3,900 3,900

Massachusetts - 3.35%
General Obligation Bond Anticipation Notes, 2000 4.36 3,000 3,017
Series A, 5.00% 9/6/01
Development Finance Agency, First Mortgage Revenue 5.45 4,500 4,500
Variable Rate Bonds (Lassell Village Project), Series
1998C, 5.45% 10/6/00*
Water Resources Authority, Series 1994, TECP, 4.20 1,700 1,700
4.20% 11/6/00

Michigan - 0.73%
Municipal Bond Authority, Revenue Notes, Series 4.35 2,000 2,010
2000C-2, 5.00% 8/23/01

Minnesota - 2.91%
General Obligation State Various Purpose Bonds, 4.27 1,500 1,517
5.70% 8/1/01
City of Rochester, Health Care Facilities Revenue Bonds
(Mayo Foundation/Mayo Medical Center), Adjustable
Tender, TECP:
Series 1992A, 4.25% 11/2/00 4.25 1,900 1,900
Series 1992B, 4.15% 10/11/00 4.15 3,000 3,000
Series 1992C, 4.00% 11/1/00 4.00 1,600 1,600

Missouri - 2.54%
Higher Education Loan Authority, Adjustable Rate Demand 5.50 3,600 3,600
Student Loan Revenue Bonds, AMT, 5.50% 10/6/00*
City of Columbia, Special Obligation Insurance Reserve 5.55 3,400 3,400
Bonds, Series 1998A, 5.55% 10/6/00*

New Mexico - 1.46%
Tax and Revenue Anticipation Notes, Series 2000-2001, 4.31 4,000 4,018
5.00% 6/29/01

New York - 1.65%
State Housing Finance Agency, Revenue Bonds (Saxony 5.55 1,500 1,500
Housing), 1997 Series A, AMT, 5.55% 10/6/00*
Municipal Assistance Corporation For the City of New York:
Series 1997H, 5.00% 7/1/01 4.28 1,860 1,870
Series 1999N, 5.00% 7/1/01 4.28 1,160 1,166

North Carolina - 2.29%
Educational Facilities Finance Agency, Revenue Bonds 5.50 2,800 2,800
(Duke University Project), Series 1992A, 5.50% 10/6/00*
Medical Care Commission Variable Rate Hospital
Revenue Bonds
(Pooled Financing Project), Series 1996A, 5.55% 10/02/00* 5.55 1,005 1,005
Board of Governors of the University of North Carolina
at Chapel Hill, Athletic Facilities Revenue Bonds,
Series 1998, 5.70% 10/6/00* 5.70 2,500 2,500

Ohio - 4.32%
City of Cleveland, Subordinated Income Tax Variable Rate 5.40 4,420 4,420
Refunding Bonds, Series 1994, 5.40% 10/6/00*
County of Hamilton, Hospital Revenue Bonds (Bethesda 5.50 2,000 2,000
Hospital, Inc.), Series 1995, 5.50% 10/6/00*
Ohio State University, Revenue Bonds:
Series 1997, 5.40% 10/6/00* 5.40 3,180 3,180
Series 1999B, 5.40% 10/6/00* 5.40 2,300 2,300

Pennsylvania - 6.03%
Higher Education Assistance Agency, Student Loan 5.70 2,000 2,000
Adjustable Rate Revenue Bonds, 1997 Series A, AMT,
5.70% 10/6/00*
Delaware County Industrial Development Authority:
Pollution Control Revenue Refunding Bonds (Philadelphia 4.10 4,600 4,600
Electric Co. Project), 1998 Series A, FGIC Insured,
TECP, 4.10% 10/6/00
Solid Waste Revenue Bonds (Scott Paper Co. Project), 5.60 1,000 1,000
Series 1998C, 5.60% 10/6/00*
City of Philadelphia, Gas Works Revenue Notes, CP 4.20 2,000 2,000
Series C, 4.20% 10/3/00
Venango Industrial Development Authority, Resource
Recovery Revenue Bonds (Scrubgrass Project), Series
1990A, TECP, AMT:
4.50% 10/20/00 4.50 2,000 2,000
4.50% 10/24/00 4.50 3,500 3,500
4.30% 10/25/00 4.30 1,500 1,500

South Carolina - 5.48%
Public Service Authority (Santee Cooper Hydroelectric
Project), TECP, Series 1983:
4.10% 10/3/00 4.10 4,000 4,000
4.10% 10/10/00 4.10 2,000 2,000
4.20% 11/1/00 4.20 2,000 2,000
4.25% 11/8/00 4.25 3,100 3,100
York County, Pollution Control Facilities Revenue 4.30 4,000 4,000
Refunding Bonds (Duke Power Co. Project), Series
1990, 4.30% 11/14/00

Tennessee - 1.78%
General Obligation Bond Anticipation Notes, Series A, 4.20 1,100 1,100
4.20% 11/20/00
Public Building Authority of the County of Montgomery,
Adjustable Rate Pooled Financing Revenue Bonds
(Tennesse County Loan Pool), Series 1997, 5.70% 10/6/00* 5.70 3,800 3,800

Texas - 19.54%
Tax and Revenue Anticipation Notes, Series 2000, 4.30 3,700 3,729
5.25% 8/31/01
Brazos Higher Education Authority Inc., Student Loan 5.50 1,000 1,000
Revenue Bonds, Series 1993 B-1, AMT, 5.50% 10/6/00*
Brazos River Authority, Collateralized Pollution
Control Revenue Refunding Bonds
Series 1994, TECP, AMT, 4.25% 11/7/00 4.25 3,800 3,800
Series D, MBIA Insured, AMT, 5.70% 10/6/00* 5.70 3,000 3,000
City of Brownsville Utility System, Series A, TECP:
4.05% 10/5/00 4.05 3,500 3,500
4.20% 10/11/00 4.20 1,900 1,900
4.20% 10/11/00 4.20 2,000 2,000
4.20% 11/2/00 4.20 2,000 2,000
4.10% 11/8/00 4.10 1,000 1,000
Harris County General Obligation Notes, TECP:
Series A, 4.20% 11/2/00 4.20 1,800 1,800
Series C, 4.25% 11/13/00 4.25 3,000 3,000
Series D:
4.20% 10/10/00 4.20 1,854 1,854
4.15% 10/12/00 4.15 2,204 2,204
4.10% 11/13/00 4.10 2,650 2,649
City of Houston, General Obligation Commercial Paper
Notes, TECP, Series A:
4.25% 10/10/00 4.25 4,500 4,500
4.20% 11/3/00 4.20 1,600 1,600
4.10% 11/10/00 4.10 1,500 1,500
City of Midlothian Industrial Development Corp.,
Variable Rate Demand Pollution Control Revenue Bonds
(Box-Crow Cement Co. Project), 5.55% 10/6/00* 5.55 4,300 4,300
South Texas Higher Education Authority, Inc. Student
Loan Revenue Bonds, Series 1997, MBIA Insured, AMT:
5.50% 10/6/00* 5.50 4,900 4,900
5.50% 10/6/00* 5.50 3,600 3,600

Utah - 1.60%
Intermountain Power Agency Variable Rate Power Supply
Revenue Bonds, 1985 Series F, AMBAC Insured, TECP:
4.25% 12/04/00 4.25 2,400 2,399
4.25% 12/05/00 4.25 2,000 2,000

Virginia - 0.54%
City of Norfolk, Industrial Development Authority,
Hospital Revenue Bonds (Sentara Hospitals -
Norfolk Project)
Series 1990A, TECP, 4.20% 10/2/00 4.20 1,500 1,500

Washington - 5.18%
Public Power Supply System, Project No. 1 Refunding
Electric Revenue Bonds:
Series 1991A, 6.875% 7/1/17 (Prerefunded 7/1/01) 4.31 3,000 3,113
Series 1993-1A, 5.45% 10/6/00* 5.45 2,240 2,240
Port of Seattle:
Variable Rate General Obligation Bonds, Series 5.55 2,500 2,500
1985, 5.55% 10/6/00*
Subordinate Lien Revenue Notes, Series A, TECP:
4.20% 10/4/00 4.20 4,330 4,330
4.25% 10/13/00 4.25 2,100 2,100

West Virginia - 2.36%
The County Commission of Marion County, Solid Waste
Disposal Facility Revenue Bonds,
1990 Series A (Grant Town Cogeneration Project), 5.65 1,500 1,500
AMT, 5.65% 10/6/00*
The County Commission of Putnam County, Solid Waste
Disposal Revenue Bonds (Toyota Motor Manufacturing
Project),
2000 Series A, AMT, 5.60% 10/6/00* 5.60 5,000 5,000

Wisconsin - 3.56%
General Obligation Bonds, TECP:
Series 1997A:
4.20% 11/6/00 4.20 3,423 3,423
4.10% 11/9/00 4.10 2,000 2,000
Series 1998A, 4.10% 11/10/00 4.10 2,189 2,189
Series 1998B, 4.25% 11/3/00 4.25 1,212 1,212
Transportation Revenue Commercial Paper Notes of 1997, 4.10 1,000 1,000
Series A, TECP, 4.10% 11/2/00

Wyoming - 1.09%
Tax and Revenue Anticipation Notes, Series 2000A, 4.35 3,000 3,013
5.00% 6/27/01
-------
Total Municipal Securities (cost: $269,505,000) 269,480
Excess of cash and receivables over payables 6,022
-------
Net Assets $275,502
-------
*Coupon rate may change periodically; "yield at
acquisition" reflects current coupon rate.

See Notes to Financial Statements
</TABLE>

<TABLE>
The Tax-Exempt Money Fund of America
FINANCIAL STATEMENTS
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
at September 30, 2000 (dollars in thousands)

Assets:
Investment securities at market
(cost: $269,505) $269,480
Cash 742
Receivables for--
Sales of fund's shares $4,955
Accrued interest 1,248 6,203

276,425
Liabilities:
Payables for--
Repurchases of fund's shares 634
Dividends on fund's shares 62
Management services 88
Other expenses 139 923

Net Assets at September 30, 2000 --
Equivalent to $1.00 per share on
275,597,809 shares of beneficial
interest issued and outstanding;
unlimited shares authorized $275,502

STATEMENT OF OPERATIONS
for the year ended September 30, 2000 (dollars in thousands)

Investment Income:
Income:
Interest $10,613

Expenses:
Management services fee $1,055
Distribution expenses 123
Transfer agent fee 191
Reports to shareholders 13
Registration statement and prospectus 122
Postage, stationery and supplies 112
Trustees' fees 14
Auditing and legal fees 53
Custodian fee 56
Taxes other than federal income tax 8 1,747

Net investment income 8,866

Change in Unrealized Depreciation
on Investments:
Net unrealized depreciation
on investments:
Beginning of year (13)
End of year (24)

Net change in unrealized
depreciation on investments (11)

Net Increase in Net Assets Resulting
from Operations $8,855

STATEMENT OF CHANGES IN NET ASSETS (dollars in thousands)

Year ended September 30
2000 1999
Operations:
Net investment income $ 8,866 $ 5,659
Net unrealized
depreciation on investments (11) (59)

Net increase in net assets
resulting from operations 8,855 5,600

Dividends Paid to Shareholders (8,875) (5,698)

Capital Share Transactions:
Proceeds from shares sold 516,723 475,332
Proceeds from shares issued in
reinvestment of net investment
income dividends 8,239 5,249
Cost of shares repurchased (504,880) (423,237)

Net increase in net assets
resulting from capital share
transactions 20,082 57,344

Total Increase in Net Assets 20,062 57,246

Net Assets:
Beginning of year 255,440 198,194

End of year $275,502 $255,440

See Notes to Financial Statements

</TABLE>

Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION - The Tax-Exempt Money Fund of America(the"fund") is registered
under the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks to provide income free from federal taxes,
while preserving capital and maintaining liquidity, through investments in
high-quality municipal securities with effective maturities of one year or
less.

NET ASSET VALUE - The fund uses the penny-rounding method of valuing its
shares, in accordance with Securities and Exchange Commission (SEC) rules.
This method permits the fund to maintain a constant net asset value of $1.00
per share, provided the market value of the fund's shares does not deviate from
$1.00 by more than one-half of 1% and the fund complies with other restrictions
set forth in the SEC rules.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for as of the trade date. Interest income is recognized on the
accrual basis. Market discounts, premiums, and original issue discounts on
fixed-income securities are amortized daily over the expected life of the
security.

DIVIDENDS TO SHAREHOLDERS - Dividends to shareholders are declared daily after
the determination of the fund's net investment income and are paid to
shareholders monthly.

2. FEDERAL INCOME TAXATION

As of September 30, 2000, net unrealized depreciation on investments for book
and federal income tax purposes aggregated $24,000; $1,000 related to
appreciated securities and $25,000 related to depreciated securites. The cost
of portfolio securities for book and federal income tax purposes was
$269,505,000 at September 30, 2000.

3. FEES AND TRANSACTIONS WITH RELATED PARTIES

INVESTMENT ADVISORY FEE - The fee of $1,055,000 for management services was
incurred pursuant to an agreement with Capital Research and Management Company
(CRMC), with which certain officers and Trustees of the fund are affiliated.
The Investment Advisory and Service Agreement provides for monthly fees accrued
daily, based on the following rates and net asset levels:

<TABLE>
<CAPTION>
Net Asset Level

Rate In Excess of Up to

<S> <C> <C>
.39% $ 0 $200 million

.37% 200 million 600 million

.33% 600 million 1.2 billion

.29% 1.2 billion

</TABLE>

DISTRIBUTION EXPENSES - Pursuant to a Plan of Distribution with American Funds
Distributors, Inc. (AFD), the fund may expend up to 0.15% of net assets
annually for any activities primarily intended to sell fund shares, provided
the categories of expense are approved in advance by the fund's Board of
Trustees. Fund expenses under the Plan include payments to dealers to
compensate them for their selling and servicing efforts. For the year ended
September 30, 2000, aggregate distribution expenses under the plan were
$123,000 or .04% of net assets. As of September 30, 2000, accrued and unpaid
distribution expenses payable to AFD were $9,000.

TRANSFER AGENT FEE - A fee of $191,000 was incurred during the year ended
September 30, 2000 pursuant to an agreement with American Funds Service Company
(AFS), the transfer agent for the fund .

4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES

The fund made purchases and sales of investment securities, including
maturities, of $1,331,835,000 and $1,318,742,000, respectively, during the year
ended September 30, 2000.

Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
During the year ended September 30, 2000, the custodian fee of $56,000 includes
$1,000 that was paid by these credits rather than in cash.

Net assets consisted of the following:
<TABLE>
<S> <C>
dollars in thousands
Capital paid in on shares of beneficial interest $275,598
Distributions in excess of net investment income (72)
Net unrealized depreciation (24)
Net Assets $275,502

</TABLE>

Capital share transactions in the fund were as follows:

<TABLE>
<S> <C> <C>
Year ended
September 30, 2000
Amount (000) Shares

Sold $ 516,723 516,723,462
Reinvestment of dividends 8,239 8,238,698
Repurchased (504,880) (504,879,768)
Total Net Increase in Fund $ 20,082 20,082,392

Year ended
September 30, 1999
Amount (000) Shares

Sold $ 475,332 475,331,901
Reinvestment of dividends 5,249 5,248,578
Repurchased (423,237) (423,236,513)
Total Net Increase in Fund $ 57,344 57,343,966

</TABLE>

<TABLE>
The Tax-Exempt Money fund of America
PER-SHARE DATA AND RATIOS
<S> <C> <C> <C>

Net asset Dividends
value, Net (from net
beginning investment investment
Year ended of year income income)
Class A:(1)
2000 $1.00 $.032 (2) $(.032)
1999 1.00 .025 (.025)
1998 1.00 .029 (.029)
1997 1.00 .029 (.029)
1996 1.00 .029 (.029)

Net asset Net assets,
value, end Total end of year
Year ended of year return (in millions)
Class A:(1)
2000 $1.00 3.29% $276
1999 1.00 2.51 255
1998 1.00 2.97 198
1997 1.00 2.94 160
1996 1.00 2.91 144

Ratio of Ratio of
expenses to expenses to
average net average net Ratio of
assets - assets - income
before fee after fee to average
Year ended waiver waiver net assets
Class A:(1)
2000 .64% .64% 3.23%
1999 .68 .65 2.33
1998 .71 .65 2.94
1997 .74 .65 2.94
1996 .77 .65 2.88

(1) The fund offers Class A shares only.
(2) Based on average shares outstanding.

</TABLE>

To the Board of Trustees and Shareholders of The Tax-Exempt Money Fund of
America:

In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the per-share data and ratios present fairly, in all
material respects, the financial position of The Tax-Exempt Money Fund of
America (the "Fund") at September 30, 2000, the results of its operations, the
changes in its net assets and the per-share data and ratios for the years
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and per-share data and
ratios (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 auditing standards generally accepted
in the United Sates of America, which 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 at September
30, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.

PRICEWATERHOUSECOOPERS LLP

Los Angeles, California
October 31, 2000

2000 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 distributions received by shareholders
during such fiscal year.

Shareholders may exclude from federal taxable income any exempt-interest
dividends paid from net investment income. All of the dividends paid from net
investment income qualify as exempt-interest dividends.

ITEM 23. EXHIBITS

(a) Previously filed (see Post-Effective Amendment No. 43 filed 3/13/00)
(b) Previously filed (see Post-Effective Amendment No. 39 filed 11/26/97)
(c) None
(d) Previously filed (see Post-Effective Amendment No. 43 filed 3/13/00)
(e) Previously filed (see Post-Effective Amendment No. 43 filed 3/13/00)
(f) None
(g) Previously filed (see Post-Effective Amendment No. 39 filed 11/26/97)
(h) None
(i) Previously filed (see Post-Effective Amendment No. 43 filed 3/13/00)
(j) Consent of Independent Accountants
(k) None
(l) None
(m) Previously filed (see Post-Effective Amendment No. 43 filed 3/13/00)
(n) Previously filed (see Post-Effective Amendment No. 43 filed 3/13/00)
(o) None
(p) None (the Fund is a Money Market Fund)

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None

ITEM 25. INDEMNIFICATION

Registrant is a joint-insured under investment advisor/mutual fund errors and
omissions policies written by American International Surplus Lines Insurance
Company, Chubb Custom Insurance Company and ICI Mutual Insurance Company which
insures its officers and trustees 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.

ITEM 25. INDEMNIFICATION (CONTINUED)

Article VI of the Trust's By-Laws states:

(a) The Trust shall indemnify any Trustee or officer of the Trust who was or
is a 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 action by or in the right of the Trust) by reason
of the fact that such person is or was such director or officer or an employee
or agent of the Trust, or is or was serving at the request of the Trust as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe such
person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that such person's conduct was unlawful.

(b) The Trust shall indemnify any Trustee or officer of the Trust who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a judgment
in its favor by reason of the fact that such person is or was such director or
officer or an employee or agent of the Trust, or is or was serving at the
request of the Trust as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the Trust, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of such person's duty to the Trust unless and
only to the extent that the court in which such action or suit was brought, or
any other court having jurisdiction in the premises, shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.

(c) To the extent that a Trustee or officer of the Trust has been successful
on the merits in defense of any action, suit or proceeding referred to in
subparagraphs (a) or (b) above or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith, without the necessity for the determination as to the standard of
conduct as provided in subparagraph (d).

ITEM 25. INDEMNIFICATION (CONTINUED)

(d) Any indemnification under subparagraph (a) or (b) (unless ordered by a
court) shall be made by the Trust only as authorized in the specific case upon
a determination that indemnification of the Trustee or officer is proper under
the standard of conduct set forth in subparagraph (a) or (b). Such
determination shall be made (i) by the Board by a majority vote of a quorum
consisting of Trustees who were not parties to such action, suit or proceeding,
or (ii) if such a quorum is not obtainable, or, even if obtainable, such a
quorum of disinterested directors so directs, by independent legal counsel (who
may be regular counsel for the Trust) in a written opinion; and any
determination so made shall be conclusive.

(e) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Trust in advance of the final disposition of such
action, suit or proceeding, as authorized in the particular case, upon receipt
of an undertaking and security by or on behalf of the Trustee or officer to
repay such amount unless it shall ultimately be determined that such person is
entitled to be indemnified by the Trust as authorized herein.

(f) Agents and employees of the Trust who are not Trustees or officers of the
Trust may be indemnified under the same standards and procedures set forth
above, in the discretion of the Board.

(g) Any indemnification pursuant to this Article shall not be deemed exclusive
of any other rights to which those indemnified may be entitled and shall
continue as to a person who has ceased to be Trustee or officer and shall inure
to the benefit of the heirs, executors and administrators of such person.

(h) Nothing in the Declaration of Trust or in these By-Laws shall be deemed
to protect any Trustee or officer of the Trust against any liability to the
Trust or to its shareholders to which such person would otherwise be subject by
reason of willful malfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such person's office.

(i) The Trust shall have power to purchase and maintain insurance on behalf of
any person against any liability asserted against or incurred by such person,
whether or not the Trust would have the power to indemnify such person against
such liability under the provisions of this Article.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to Trustees, 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 SEC 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 Trustee, officer of
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such Trustee, officer of 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.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

None

ITEM 27. PRINCIPAL UNDERWRITERS

(a) American Funds Distributors, Inc. is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds
Income Series, 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., EuroPacific Growth Fund, Fundamental Investors,
Inc., The Growth Fund of America, Inc., The Income Fund of America, Inc., The
Investment Company of America, Intermediate Bond Fund of America, Limited Term
Tax-Exempt Bond Fund of America, The New Economy Fund, New Perspective Fund,
Inc., New World Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund
of America, Inc., The Tax-Exempt Money Fund of America, U.S. Treasury Money
Fund of America and Washington Mutual Investors Fund, Inc.

<TABLE>
<CAPTION>
(B) (1) (2) (3)

NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES

BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT

<S> <C> <C> <C>
David L. Abzug Vice President None

27304 Park Vista Road

Agoura Hills, CA 91301

John A. Agar Vice President None

1501 N. University, Suite 227A

Little Rock, AR 72207

Robert B. Aprison Vice President None

2983 Bryn Wood Drive

Madison, WI 53711

L William W. Bagnard Vice President None

Steven L. Barnes Senior Vice President None

5400 Mount Meeker Road

Suite 1

Boulder, CO 80301-3508

B Carl R. Bauer Vice President None

Michelle A. Bergeron Senior Vice President None

4160 Gateswalk Drive

Smyrna, GA 30080

J. Walter Best, Jr. Regional Vice President None

9013 Brentmeade Blvd.

Brentwood, TN 37027

Joseph T. Blair Senior Vice President None

148 E. Shore Ave.

Groton Long Point, CT 06340

John A. Blanchard Vice President None

6421 Aberdeen Road

Mission Hills, KS 66208

Ian B. Bodell Senior Vice President None

P.O. Box 1665

Brentwood, TN 37024-1665

Mick L. Brethower Senior Vice President None

2320 North Austin Avenue

Georgetown, TX 78626

Alan Brown Vice President None

4129 Laclede Avenue

St. Louis, MO 63108

B J. Peter Burns Vice President None

Brian C. Casey Vice President None

8002 Greentree Road

Bethesda, MD 20817

Victor C. Cassato Senior Vice President None

609 W. Littleton Blvd., Suite 310

Greenwood Village, CO 80120

Christopher J. Cassin Senior Vice President None

19 North Grant Street

Hinsdale, IL 60521

Denise M. Cassin Vice President None

1301 Stoney Creek Drive

San Ramon, CA 94538

L Larry P. Clemmensen Director None

L Kevin G. Clifford Director, President and Co-Chief None

Executive Officer

Ruth M. Collier Senior Vice President None

29 Landsdowne Drive

Larchmont, NY 10538

S David Coolbaugh Assistant Vice President None

H Carlo O. Cordasco Assistant Vice President None

Thomas E. Cournoyer Vice President None

2333 Granada Boulevard

Coral Gables, FL 33134

Douglas A. Critchell Senior Vice President None

3521 Rittenhouse Street, N.W.

Washington, D.C. 20015

L Carl D. Cutting Vice President None

William F. Daugherty Regional Vice President None

1216 Highlander Way

Mechanicsburg, PA 17055

Daniel J. Delianedis Vice President None

8689 Braxton Drive

Eden Prairie, MN 55347

Jay DePerno Regional Vice President None

91 Church Street

East Aurora, NY 14052

Michael A. DiLella Vice President None

P. O. Box 661

Ramsey, NJ 07446

G. Michael Dill Senior Vice President None
505 E. Main Street

Jenks, OK 74037

Kirk D. Dodge Senior Vice President None

2627 Mission Street

San Marino, CA 91108

Peter J. Doran Director, Executive Vice None
President

100 Merrick Road, Suite 216W

Rockville Centre, NY 11570

L Michael J. Downer Secretary Vice President

Robert W. Durbin Vice President None

74 Sunny Lane

Tiffin, OH 44883

I Lloyd G. Edwards Senior Vice President None

John Fodor Senior Vice President None

15 Latisquama Road

Southborough, MA 01772

Daniel B. Frick Regional Vice President None

845 Western Avenue

Glen Ellyn, IL 60137

Clyde E. Gardner Senior Vice President None

Route 2, Box 3162

Osage Beach, MO 65065

B Evelyn K. Glassford Vice President None

Jeffrey J. Greiner Vice President None

12210 Taylor Road

Plain City, OH 43064

L Paul G. Haaga, Jr. Director Chairman and Trustee

B Mariellen Hamann Assistant Vice President None

David E. Harper Senior Vice President None

150 Old Franklin School Road

Pittstown, NJ 08867

H Mary Pat Harris Assistant Vice President None

Ronald R. Hulsey Senior Vice President None

6744 Avalon

Dallas, TX 75214

Robert S. Irish Vice President None

1225 Vista Del Mar Drive

Delray Beach, FL 33483

Michael J. Johnston Director None

630 Fifth Avenue, 36th Floor

New York, NY 10111

B Damien M. Jordan Senior Vice President None

John P. Keating Regional Vice President None

2285 Eagle Harbor Parkway

Orange Park, FL 32073

Dorothy Klock Vice President None

515 East 89th Street, Apt. 4G

New York, NY 10128

H Diane Koske Assistant Vice President

Andrew R. LeBlanc Regional Vice President None

78 Eton Road

Garden City, NY 11530

Arthur J. Levine Senior Vice President None

12558 Highlands Place

Fishers, IN 46038

B Karl A. Lewis Assistant Vice President None

T. Blake Liberty Vice President None

5506 East Mineral Lane

Littleton, CO 80122

Mark J. Lien Regional Vice President None

5570 Beechwood Terrace

West Des Moines, IA 50266

L Lorin E. Liesy Vice President None

Louis Linquata Regional Vice President None

170 South Battin

Wichita, KS 67218

LW Robert W. Lovelace Director None

Stephen A. Malbasa Senior Vice President None

13405 Lake Shore Blvd.

Cleveland, OH 44110

Steven M. Markel Senior Vice President None

5241 South Race Street

Littleton, CO 80121

L J. Clifton Massar Director, Senior Vice None
President

L E. Lee McClennahan Senior Vice President None

James R. McCrary Regional Vice President None

963 1st Street, #1

Hermosa Beach, CA 90254

S John V. McLaughlin Senior Vice President None

Terry W. McNabb Vice President None

2002 Barrett Station Road

St. Louis, MO 63131

William E. Noe Vice President None

304 River Oaks Road

Brentwood, TN 37027

Peter A. Nyhus Vice President None

3084 Wilds Ridge Court

Prior Lake, MN 55372

Eric P. Olson Vice President None

62 Park Drive

Glenview, IL 60025

Jeffrey Olson Regional Vice President None

930 S. Cowley Street, #305

Spokane, WA 99202

Gary A. Peace Regional Vice President None

291 Kaanapali Drive

Napa, CA 94558

Samuel W. Perry Regional Vice President None

4730 East Indian School Road

Suite 120

Phoenix, AZ 85018

David Petzke Regional Vice President None

4016 Saint Lucia Street

Boulder, CO 80301

Fredric Phillips Senior Vice President None

175 Highland Avenue, 4th Floor

Needham, MA 02494

B Candance D. Pilgrim Assistant Vice President None

Carl S. Platou Vice President None

7455 80th Place, S.E.

Mercer Island, WA 98040

L John O. Post Senior Vice President None

S Richard P. Prior Vice President None

Steven J. Reitman Senior Vice President None

212 The Lane

Hinsdale, IL 60521

Brian A. Roberts Vice President None

P.O. Box 388

Glenville, NC 28736

George S. Ross Senior Vice President None

P.O. Box 376

Southport, ME 04576

L Julie D. Roth Vice President None

L James F. Rothenberg Director None

Douglas F. Rowe Vice President None

414 Logan Ranch Road

Georgetown, TX 78628

Christopher S. Rowey Vice President None

10538 Cheviot Drive

Los Angeles, CA 90064

Dean B. Rydquist Senior Vice President None

1080 Bay Pointe Crossing

Alpharetta, GA 30005

Richard R. Samson Senior Vice President None

4604 Glencoe Avenue, #4

Marina del Rey, CA 90292

Joseph D. Scarpitti Vice President None

31465 St. Andrews

Westlake, OH 44145

L R. Michael Shanahan Director None

Brad W. Short Regional Vice President None

1601 Seal Way

Seal Beach, CA 90740

David W. Short Chairman of the Board and None

1000 RIDC Plaza, Suite 212 Co-Chief Executive Officer

Pittsburgh, PA 15238

William P. Simon Senior Vice President None

912 Castlehill Lane

Devon, PA 19333

Rodney G. Smith Senior Vice President None

100 N. Central Expressway

Suite 1214

Richardson, TX 75080

S Sherrie L. Snyder-Senft Assistant Vice President None

Anthony L. Soave Regional Vice President None

8831 Morning Mist Drive

Clarkston, MI 48348

L Therese L. Souiller Assistant Vice President None

Nicholas D. Spadaccini Vice President None

855 Markley Woods Way

Cincinnati, OH 45230

L Kristen J. Spazafumo Assistant Vice President None

Daniel S. Spradling Senior Vice President None

181 Second Avenue

Suite 228

San Mateo, CA 94401

LW Eric H. Stern Director None

B Max D. Stites Vice President None

Thomas A. Stout Vice President None

1004 Ditchley Road

Virginia Beach, VA 23451

Craig R. Strauser Vice President None

3 Dover Way

Lake Oswego, OR 97034

Francis N. Strazzeri Senior Vice President None

3021 Kensington Trace

Tarpon Springs, FL 34689

L Drew W. Taylor Vice President None

Gary J. Thoma Regional Vice President None

604 Thelosen Drive

Kimberly, WI 54136

L James P. Toomey Vice President None

I Christopher E. Trede Vice President None

George F. Truesdail Senior Vice President None

400 Abbotsford Court

Charlotte, NC 28270

Scott W. Ursin-Smith Vice President None

60 Reedland Woods Way

Tiburon, CA 94920

J. David Viale Regional Vice President None

204 Fernleaf Drive

Corona del Mar, CA 92625

Thomas E. Warren Vice President None

119 Faubel Street

Sarasota, FL 34242

L J. Kelly Webb Senior Vice President, None

Treasurer and Controller

Gregory J. Weimer Vice President None

206 Hardwood Drive

Venetia, PA 15367

B Timothy W. Weiss Director None

George J. Wenzel Regional Vice President None

251 Barden Road

Bloomfield, MI 48304

H J. D. Wiedmaier Assistant Vice President None

SF N. Dexter Williams Senior Vice President None

Timothy J. Wilson Vice President None

113 Farmview Place

Venetia, PA 15367

B Laura L. Wimberly Vice President None

H Marshall D. Wingo Director, Senior Vice None
President

L Robert L. Winston Director, Senior Vice None
President

William R. Yost Senior Vice President None

9320 Overlook Trail

Eden Prairie, MN 55347

Janet M. Young Regional Vice President None

1616 Vermont

Houston, TX 77006

Jonathan A. Young Regional Vice President None

329 Downing Drive

Chesapeake, VA 23322

Scott D. Zambon Regional Vice President None

2887 Player Lane

Tustin Ranch, CA 92782

</TABLE>

__________
L Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW Business Address, 11100 Santa Monica Boulevard, 15th Floor, Los Angeles, CA
90025
B Business Address, 135 South State College Boulevard, Brea, CA 92821
S Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251
SF Business Address, One Market, Steuart Tower, Suite 1800, San Francisco, CA
94105-1016
H Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240

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 its investment adviser, Capital Research and Management Company, 333
South Hope Street, Los Angeles, California 90071, and/or 135 South State
College Boulevard, Brea, California 92821.

Registrant's records covering shareholder accounts are maintained and kept by
its transfer agent, American Funds Service Company, 135 South State College
Boulevard, Brea, California 92821, 8332 Woodfield Crossing Boulevard,
Indianapolis, IN 46240, 3500 Wiseman Boulevard, San Antonio, Texas 78251 and
5300 Robin Hood Road, Norfolk, VA 23513.

Registrant's records covering portfolio transactions are maintained and kept
by its custodian, The Chase Manhattan Bank, One Chase Manhattan Plaza, New
York, New York 10081.

ITEM 29. MANAGEMENT SERVICES

None

ITEM 30. UNDERTAKINGS

n/a

SIGNATURE OF REGISTRANT

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 pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this amended
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, and State of California, on the
27/th/ day of November, 2000.

THE CASH MANAGEMENT TRUST OF AMERICA
By /s/ Paul G. Haaga, Jr.
(Paul G. Haaga, Jr., Chairman of the Board)

Pursuant to the requirements of the Securities Act of 1933, this amendment to
registration statement has been signed below on November 27, 2000, by the
following persons in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE

<S> <C> <C>
(1) Principal Executive Officer:

/s/ Abner D. Goldstine President and Trustee

(Abner D. Goldstine)

(2) Principal Financial Officer and
Principal Accounting Officer:

/s/ Anthony W. Hynes, Jr. Treasurer

(Anthony W. Hynes, Jr.)

(3) Trustees:

Richard G. Capen, Jr.* Trustee

H. Frederick Christie* Trustee

Don R. Conlan* Trustee

Diane C. Creel* Trustee

Martin Fenton* Trustee

Leonard R. Fuller* Trustee

/s/ Abner D. Goldstine President and Trustee

(Abner D. Goldstine)

/s/ Paul G. Haaga, Jr. Chairman and Trustee

(Paul G. Haaga, Jr.)

Richard G. Newman* Trustee

Frank M. Sanchez* Trustee

</TABLE>

*By /s/ Julie F. Williams
Julie F. Williams, Attorney-in-Fact

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/ Michael J. Downer
(Michael J. Downer)