THE CASH MANAGEMENT TRUST OF AMERICA
THE U.S. TREASURY MONEY FUND OF AMERICA
THE TAX-EXEMPT MONEY FUND OF AMERICA
ANNUAL REPORT
for the year ended September 30, 1995
[The American Funds Group(R)]
THE CASH MANAGEMENT TRUST OF AMERICA,
THE U.S. TREASURY MONEY FUND OF AMERICA
and THE TAX-EXEMPT MONEY FUND OF AMERICA
have much in common. Each gives shareholders a way to earn income on cash
reserves while seeking to preserve capital and maintain liquidity.
THE CASH MANAGEMENT TRUST OF AMERICA(R) seeks to provide income on cash
reserves, while preserving capital and maintaining liquidity, through
high-quality money market instruments.
THE U.S. TREASURY MONEY FUND OF AMERICA(SM)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.
THE TAX-EXEMPT MONEY FUND OF AMERICA(SM) seeks to provide income free from
federal taxes, while preserving capital and maintaining liquidity, through
investments in high-quality municipal securities maturing in one year or less.
FOR CURRENT YIELDS, PLEASE CALL TOLL-FREE 800/421-8068.
ABOUT OUR COVER: Whether the goal is saving for a home, a vacation, a college
education or a secure retirement, many shareholders consider their money market
funds to be part of a diversified investment portfolio that also includes
stocks and bonds.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. THE RETURN ON AN INVESTMENT IN
THESE FUNDS WILL VARY. FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
INSURED OR GUARANTEED BY, THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
THERE CAN BE NO ASSURANCE THAT THE FUNDS' NET ASSET VALUES WILL REMAIN CONSTANT
AT $1.00.
Yields representing the 7 days ending each month, annualized, for the past
fiscal year
<TABLE>
<CAPTION>
The Cash The U.S. The
Management Treasury Money Tax-Exempt
Trust of Fund of America Money Fund of
America America
<S> <C> <C> <C>
10/94 4.40% 4.02% 2.66%
11/94 4.63 4.33 2.96
12/94 5.34 4.78 3.75
1/95 5.35 4.85 2.95
2/95 5.46 4.98 3.45
3/95 5.57 5.15 3.33
4/95 5.54 5.13 3.54
5/95 5.52 5.07 3.48
6/95 5.44 5.03 3.14
7/95 5.31 4.98 2.80
8/95 5.29 4.86 3.00
9/95 5.26 4.86 3.19
</TABLE>
FELLOW SHAREHOLDERS:
As the direction of short-term interest rates shifted dramatically, the
American Funds money market funds saw their yields rise and then fall during
fiscal 1995. The end result, however, was that all three portfolios served as
suitable investments for your cash reserves, offering stability of principal
and annual income returns that outpaced inflation. Later, we will discuss the
environment in which these results were produced.
For the 12 months ended September 30, THE CASH MANAGEMENT TRUST OF AMERICA'S
income return was 5.34% with your monthly dividends reinvested, up from 3.10%
in the previous fiscal year. By comparison, the rate of inflation was 2.54% in
fiscal '95 as measured by the Consumer Price Index. As you can see by the
listing that begins on page 4, 88% of the fund's assets is concentrated in
top-quality commercial paper. Other investments may include federal agency
discount notes, certificates of deposit and bankers' acceptances.
THE U.S. TREASURY MONEY FUND OF AMERICA'S income return for the 12 months
through September 30 came to 4.89% with dividends reinvested. In fiscal '94,
the fund reported an income return of 2.89% for the year. Because 100% of the
fund's earnings is derived from investments in U.S. Treasury securities, all of
the income paid by the fund is exempt from state and local taxes in many
states.
THE TAX-EXEMPT MONEY FUND OF AMERICA produced a federally tax-free income
return of 3.14% with dividends reinvested for the annual reporting period, up
from the 1.98% reported the previous fiscal year. Investors in the maximum
39.6% federal tax bracket would have to earn a taxable return of 5.20% to equal
the fund's 3.14% tax-free return. In the 28% bracket, the taxable equivalent
would be 4.36%. Depending on where you live, a portion of the income you
receive from this fund may also be exempt from state and local taxes.
THE INTEREST RATE ENVIRONMENT
While short-term interest rates and money market yields were on the rise at the
start of fiscal 1995, the bond market began the year on a particularly wary
note. It had just endured eight months of rising rates and plunging prices as
the Federal Reserve tried to cool off a surging economy by steadily tightening
short-term credit. The bond market braced for the possibility of another rate
increase and, indeed, that is what happened. Once in November and then again in
February, the Fed boosted the costs of borrowing for businesses and consumers
by hiking short-term interest rates.
The yields on our money market funds, as you can see in the table on the facing
page, reacted favorably to these moves since they typically mirror short-term
interest rate trends. But, uncharacteristically, longer term bonds shrugged off
the Fed's last two rate hikes and appeared to be positively influenced by other
factors.
The results of last November's congressional elections encouraged bond
investors to believe that the federal budget deficit might be reduced.
Moreover, reports of moderate economic growth, continued low inflation and a
slowdown in consumer spending reduced investors' fears of further interest rate
increases, propelling a long, steady rise in bond prices throughout the spring.
In July, the Federal Reserve cut the federal funds rate (the overnight loan
rate between banks) a quarter of a percentage point in an attempt to stimulate
economic growth - the first such easing in three years. This move reinforced
the gradual descent of taxable money market yields.
CREDIT ANALYSIS
An important part of the responsibility of the funds' investment adviser,
Capital Research and Management Company (CRMC), is the ongoing credit analysis
of the issuers of commercial paper, certificates of deposit and tax-exempt
money market instruments purchased by the funds. In performing this analysis,
CRMC's credit analysts do not rely solely on information provided by the major
credit rating services; rather, they do their own credit research, make their
own judgments of creditworthiness, and present their recommendations for review
and approval by CRMC's fixed-income investment committee. This process helps
ensure an appropriately high level of quality among the holdings of each fund.
As you will see by some of the questions and answers on the pages that follow,
our money market funds remain a convenient alternative for investors seeking
relative safety and stability. We appreciate your continued confidence in us
and look forward to providing you with more information in six months.
Cordially,
Paul G. Haaga, Jr. Abner D. Goldstine
Chairman of the Boards President
November 7, 1995
FREQUENTLY ASKED QUESTIONS ABOUT THE MONEY MARKET FUNDS IN THE AMERICAN FUNDS
GROUP(R)
You already know that a money market fund can help you meet short-term and
emergency needs, but did you know that it can also give a boost to a dollar
cost averaging investment program? Or that it can help diversify a long-term
investment portfolio?
Below, we answer some of the common questions shareholders have about their
money market funds. For further information, you may wish to consult the
following sources:
- - your securities dealer
- - your fund prospectus
- - American Funds Service Company, 800/421-0180
- - American FundsLine(R) (automated telephone response service),
800/325-3590
(The services described here are subject to change or termination.)
Q. WHAT ARE THE CASH MANAGEMENT TRUST OF AMERICA, THE U.S. TREASURY MONEY FUND
OF AMERICA AND THE TAX-EXEMPT MONEY FUND OF AMERICA?
A. They are three money market funds that each invest in different parts of the
short-term securities market, but seek common goals: current income, capital
preservation and liquidity (the ability to access your funds quickly). You can
find a description of each of the funds' characteristics on the inside front
cover of this report. Each of the funds declares dividends daily, and
distributes the dividends once a month.
Q. IN WHAT DO THE FUNDS INVEST?
A. Each fund invests in high-quality, short-term, income-producing securities.
THE CASH MANAGEMENT TRUST OF AMERICA invests in:
- - commercial paper (short-term "IOUs" issued by
corporations)
- - certificates of deposit and bankers' acceptances
- - U.S. government securities
- - corporate bonds and notes
THE U.S. TREASURY MONEY FUND OF AMERICA invests in:
- - U.S. Treasury bills, notes and bonds
THE TAX-EXEMPT MONEY FUND OF AMERICA invests in:
- - money market instruments issued by states or other
public entities
- - municipal securities, including tax anticipation notes,
construction loan notes, municipal commercial paper and
general obligation bonds
Q. HOW SAFE IS MY INVESTMENT?
A. Our policy is to invest in only the highest rated money market instruments.
Since maintaining stability of principal is a key priority, we have never
included so-called "derivative" instruments among any of the funds' holdings.
Each fund endeavors to maintain a net asset value of $1.00 per share, and all
three have suc cessfully done so since they began operations.
Q. HOW - AND HOW OFTEN - MAY I WITHDRAW CASH FROM MY ACCOUNT?
A. You may withdraw all or any part of your investment from your account in any
of the three money market funds at any time by: 1) simply writing a check (see
the following section); 2) calling American FundsLine; 3) contacting your
securities dealer; or 4) contacting American Funds Service Company. You can
also set up an automatic withdrawal program and take out $50 or more four to 12
times a year, depending on your balance.
Q. WHAT IS THE CHECK-WRITING PRIVILEGE AND HOW DOES IT WORK? IS THERE A CHARGE
FOR CHECK WRITING?
A. The funds offer a free service that allows you to write checks for $250 or
more against your account. Your money continues to earn daily interest until
checks clear the funds' bank in New York state. To request this service, please
call American Funds Service Company.
Q. MAY I EXCHANGE MY MONEY MARKET FUND SHARES FOR SHARES OF OTHER FUNDS IN THE
AMERICAN FUNDS GROUP?
A. Yes. Many shareholders use this service to gradually move some of their
holdings into longer term investments in The American Funds Group. When done on
a consistent schedule, this investment technique is known as dollar cost
averaging (see the box below). A sales charge may apply when you purchase other
fund shares.
Automatic exchanges can be made in amounts of $50 or more. You may also have
dividends from any of the three money market funds reinvested (without sales
charge) into any of the other American Funds - or vice versa. For details, and
for certain restrictions that may apply, please call American Funds Service
Company. Exchanges constitute a sale and purchase for tax purposes.
Q. HOW WILL I KNOW HOW MUCH I'M EARNING AT ANY GIVEN TIME?
A. For a current yield quotation, please call toll-free 800/421-8068. Yields
are also listed in the newspaper once a week, typically on Fridays. You may
check your share balance around the clock with American FundsLine.
Q. HOW CAN THE FUNDS PROVIDE DIVERSIFICATION IN MY INVESTMENT PORTFOLIO?
A. Many investment professionals believe that to meet long-term goals it is
necessary to allocate assets among several different types of investments,
including stocks, bonds and short-term savings vehicles such as money market
funds. A money market fund's role in a long-term investment program is to add
stability and balance and to provide a base from which funds can be moved into
other investments.
The services described here are subject to change or termination.
{Side Bar]
Q. WHAT IS DOLLAR COST AVERAGING?
A. Dollar cost averaging is an investment program that lets you use stock or
bond market volatility to your advantage. Here's how it works: You invest a
consistent amount in a stock or bond fund at regular intervals, such as once a
month or every quarter. Many shareholders use funds from their money market
accounts to practice this technique. As the market rises and falls, you may be
able to purchase shares at a lower average cost than the average share price.
Why? Because you purchase more shares when prices are down and fewer when
they're up.
When stock or bond share prices fluctuate...
...use dollar cost averaging to lower your average purchase price.
Total shares acquired: 82.3
Total cost of shares: $1,200
Average share price during period: $15.17
(Share price for each month added together
[$182] and divided by 12 investments)
Dollar cost averaging share price: $14.58
($1,200 divided by 82.3 shares)
Obviously, this example greatly exaggerates the volatility of most investments
- - but it does illustrate why the concept works. You should keep in mind that
dollar cost averaging neither ensures a profit nor protects against loss, and
its success depends largely on your willingness to continue purchases through
periods of declining prices.
[End Side Bar}
The Tax-Exempt Money Fund of America
Investment Portfolio, September 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal Market
Yield at Amount Value
Acquisition (000) (000)
Municipal Securities
- --------------------------------------------------- ----------- ---------- ---------
ALABAMA - 1.93%
The Industrial Development Board of the City of
Montgomery, Pollution Control and Solid Waste
Disposal Revenue Refunding Bonds (General
Electric Company Project), Series 1990, TECP,
3.60% 11/7/95 3.60% $2,000 $2,000
Special Care Facilities Financing Authority of
the City of Montgomery, Hospital Depreciable
Assets Revenue Bonds, Series 1985, FGIC
Insured, VRDN, 4.25% 10/4/95* 4.25 900 900
ALASKA - 5.32%
Housing Finance Corporation General
Purpose Bonds, 1991 Series C, VRDN,
4.35% 10/2/95* 4.35 3,500 3,500
City of Valdez, Marine Terminal Revenue
Refunding Bonds (ARCO Transportation
Alaska, Inc. Project):
1994 Series C, TECP, 3.50% 10/5/95 3.50 1,300 1,300
1994 Series A, TECP, 3.55% 11/10/95 3.55 2,000 2,000
1994 Series A, TECP, 3.70% 11/27/95 3.70 1,200 1,200
ARIZONA - 4.22%
The Industrial Development Authority of the City
of Chandler, Floating Rate Monthly Demand
Industrial Development Revenue Bonds
(Parsons Municipal Services, Inc. Project),
Series 1983, VRDN, 4.00% 10/13/95* 4.00 1,000 1,000
City of Mesa Municipal Development Corporation,
Special Tax Update Bonds, Series 1985,
TECP, 3.55% 10/24/95 3.55 1,000 1,000
Salt River Project Agricultural Improvement
and Power District, Promissory Notes, TECP:
3.50% 11/2/95 3.50 2,350 2,350
3.70% 11/6/95 3.70 2,000 2,000
ARKANSAS - 1.33%
Board of Trustees of the University of Arkansas
Various Facility Revenue Bonds (UAMS
Campus), Series 1994, VRDN, 4.35% 10/2/95* 4.35 2,000 2,000
CALIFORNIA - 4.89%
State 1994 Revenue Anticipation Warrants,
FGIC Insured, 5.75% 4/25/96 3.80 4,000 4,042
County of Los Angeles, 1994-95 Tax and
Revenue Anticipation Notes, 4.50% 7/1/96 3.97 3,300 3,312
FLORIDA - 4.30%
Sunshine State Governmental Financing
Commission Revenue Bonds, Series 1986, TECP,
3.55% 11/6/95 3.55 1,000 1,000
Jacksonville Electric Authority Electric System,
Tax-Exempt Commercial Paper Notes, Series C-1,
TECP, 3.80% 10/18/95 3.80 2,800 2,800
City of Orlando, Waste Water System Refunding
Revenue Bonds, 1993 Series A, 3.80% 10/1/95 3.45 1,465 1,465
Pinellas County Educational Facilities Authority
Refunding Program Revenue Bonds, Series 1985
(Pooled Independent Higher Education Institutions
Loan Program) Adjustable Convertible Extendable
Securities, TECP, 3.65% 11/13/95 3.65 1,200 1,200
GEORGIA - 2.73%
State General Obligation Bond,
1993 Series F, 6.50% 12/1/95 3.76 2,500 2,512
Development Authority of Burke County,
Adjustable Tender Pollution Control Revenue
Bonds (Oglethorpe Power Corporation Vogtle
Project), Series 1992A, TECP, 3.70% 10/25/95 3.70 1,600 1,600
HAWAII - 3.92%
Department of Budget and Finance of the State of
Hawaii, Special Purpose Revenue Bonds (Kuakini
Medical Center Project), Floating Rate Monthly
Demand, Series 1984, VRDN, 3.90% 10/2/95* 3.90 800 800
Housing Finance and Development Corporation,
Affordable Rental Housing Program Revenue
Bonds, 1993 Series A, VRDN, 4.45% 10/2/95* 4.45 1,000 1,000
City and County of Honolulu, General Obligation
Bond Anticipation Notes, TECP:
3.70% 10/4/95 3.70 2,600 2,600
3.55% 10/11/95 3.55 1,500 1,500
ILLINOIS - 6.22%
Health Facilities Authority Revenue Bonds
(Hospital Sisters Services Inc. Obligated
Group Project), Series 1985 E, MBIA Insured,
VRDN, 4.25% 10/4/95* 4.25 1,500 1,500
Health Facilities Authority Unit Priced Demand
Adjustable Revenue Bonds, Alexian Brothers
Health System, Inc. (Alexian Brothers Medical
Center Inc. Project), Series 1985D, MBIA
Insured, TECP:
3.65% 10/6/95 3.65 4,250 4,250
3.55% 10/20/95 3.55 1,100 1,100
City of Chicago General Obligation Tender Notes
Series 1994A, 3.50% Mandatory Put 10/31/95 3.50 2,500 2,500
INDIANA - 3.75%
Jasper County, Variable Rate Demand Pollution
Control Refunding Revenue Bonds (Northern
Indiana Public Service Company Project),
Series 1988C, TECP:
3.75% 10/17/95 3.75 2,000 2,000
3.85% 10/20/95 3.85 1,400 1,400
City of Sullivan, Floating/Fixed Rate Pollution
Control Revenue Bonds (Hoosier Energy Rural
Electric Cooperative, Inc. Project):
Series 1985-L5, TECP, 3.85% 10/23/95 3.85 1,235 1,235
Series 1985-L2, TECP, 3.60% 11/15/95 3.60 1,000 1,000
KANSAS - 2.99%
City of Burlington Pollution Control
Refunding and Improvement Revenue Bonds
(Kansas City Power & Light Company Project):
Series 1985, TECP, 3.60% 10/11/95 3.60 2,000 2,000
TECP, 3.50% 11/1/95 3.50 1,500 1,500
Series 1987B, TECP, 3.75% 11/14/95 3.75 1,000 1,000
KENTUCKY - 2.20%
Pendleton County Multi-County Lease
Revenue Bonds (Kentucky Association of
Counties Leasing Trust Program), Series
1989, Money Market Municipal,
3.60% 10/10/95 3.60 3,300 3,300
LOUISIANA - 2.99%
Jefferson Parish Hospital Service District #2
Hospital Revenue Bonds, Series 1985, FGIC
Insured, VRDN, 4.30% 10/2/95* 4.30 2,100 2,100
Lake Charles Harbor and Terminal District
Flexible Demand Port Facilities Revenue
Bonds (CITGO Petroleum Corp. Project),
Series 1984, VRDN, 4.20% 10/2/95* 4.20 1,400 1,400
Public Facilities Authority Hospital
Revenue and Refunding Bonds (Willis-
Knighton Medical Center Project), Series
1993, VRDN, 4.40% 10/4/95* 4.40 1,000 1,000
MARYLAND - 3.08%
Anne Arundel County Economic Development
Revenue Bonds (Baltimore Gas and Electric
Company Project), Series 1988, TECP:
3.75% 10/3/95 3.75 1,400 1,400
3.95% 10/23/95 3.95 2,240 2,240
Howard County, Adjustable Line Exempt
Securities Consolidated Public Improvement
Bond Anticipation Notes, Series A, TECP,
3.65% 11/14/95 3.65 1,000 1,000
MINNESOTA - 2.55%
Housing Finance Agency Single-Family
Mortgage Bonds, 1993 Series F, 5.25%
Mandatory Put 1/16/96 5.25 840 840
Regents of the University of Minnesota,
Variable Rate Demand Bonds:
Series 1985G, 3.60% Optional Put 2/1/96 3.60 2,000 2,000
Series 1985E, TECP, 4.40% 10/2/95 4.40 1,000 1,000
MISSOURI - 3.72%
State Environmental Improvement and Energy
Resources Authority of the State of Missouri
Unit Priced Demand Adjustable Pollution
Control Revenue Bonds (Union Electric Company
Project) Series 1985A, TECP:
3.65% 10/25/95 3.65 1,000 1,000
3.70% 11/8/95 3.70 1,000 1,000
Higher Education Loan Authority Adjustable
Rate Demand Student Loan Revenue Bonds, VRDN:
Series 1990 B, 4.50% 10/2/95* 4.50 1,000 1,000
Series 1990 A, 4.50% 10/2/95* 4.50 1,600 1,600
City of Columbia, Special Obligation
Insurance Reserve Bonds, Series 1988 A,
VRDN, 4.40% 10/4/95* 4.40 1,000 1,000
MONTANA - 1.38%
State Board of Housing, Single-Family
Mortgage Bonds, 1987 Series B-2,
4.60% Optional Put 10/1/95 4.60 1,070 1,070
City of Forsyth, Flexible Demand Pollution
Control Revenue Bonds (Portland General
Electric Company Colstrip Project),
Series 1983 A, VRDN, 4.25% 10/2/95* 4.25 1,000 1,000
NEVADA - 0.86%
Washoe County Water Facilities Revenue Bonds
(Sierra Pacific Power Company Project),
Series 1990, TECP, 3.60% 11/3/95 3.60 1,300 1,300
NEW MEXICO - 1.26%
Educational Assistance Foundation Student
Loan Revenue Bonds, Series 1992-B, VRDN,
4.50% 10/4/95* 4.50 1,900 1,900
NORTH CAROLINA - 1.66%
Educational Facilities Finance Agency Revenue
Bonds (Duke University Project), VRDN:
Series 1991 D, 4.35% 11/30/95* 4.35 1,500 1,500
Series 1992 A, 4.35% 11/30/95* 4.35 1,000 1,000
PENNSYLVANIA - 3.26%
Delaware County Industrial Development Authority
Pollution Control Revenue Refunding Bonds
(Philadelphia Electric Company Project):
1988 Series B, TECP, 3.70% 10/20/95 3.70 1,100 1,100
Series 1988, TECP, 3.70% 10/26/95 3.70 1,500 1,500
Delaware County Industrial Development Authority
Solid Waste Revenue Bonds (Scott Paper Company
Project), Series 1984 D, VRDN, 4.40% 10/2/95* 4.40 1,000 1,000
Venango Industrial Development Authority
Resource Recovery Revenue Bonds (Scrubgrass
Project), 1990 Series A, TECP, 3.75% 10/16/95 3.75 1,300 1,300
TENNESSEE - 3.99%
State General Obligation Bond Anticipation
Notes, Series 1994A, VRDN, 4.25% 10/2/95* 4.25 2,000 2,000
Health and Educational Facilities Board of the
Metropolitan Government of Nashville and
Davidson County, Hospital Revenue Bonds,
(Baptist Hospital, Inc.), TECP, Series 1992,
3.65% 10/13/95 3.65 4,000 4,000
TEXAS - 7.18%
City of Austin (Travis and Williamson Counties),
Combined Utility Systems Notes, Series A, TECP:
3.75% 10/16/95 3.75 1,200 1,200
3.80% 10/19/95 3.80 1,400 1,400
3.55% 11/9/95 3.55 1,200 1,200
Brazos Higher Education Authority, Inc. Student
Loan Revenue Bonds, Series 1993B-1, VRDN,
4.45% 12/5/95* 4.45 1,000 1,000
Harris County Health Facilities Development
Corporation SCH Health Care System Unit Priced
Demand Adjustable Revenue Bonds (Sisters of
Charity of the Incarnate Word, Houston)
Series 1985, TECP:
3.55% 10/23/95 3.55 1,000 1,000
3.70% 10/26/95 3.70 1,900 1,900
Lower Neches Valley Authority Pollution Control
Revenue Bonds (Chevron U.S.A. Inc. Project),
Series 1987, 3.75% Optional Put 2/15/96 3.75 1,000 999
Municipal Power Agency Bond Anticipation Notes,
TECP, 3.85% 10/24/95 3.85 1,000 1,000
Program of Board of Regents of the Texas A&M
University System Permanent University Fund
Subordinate Lien Notes, Series B, TECP,
3.70% 10/30/95 3.70 1,100 1,100
UTAH - 4.32%
State Board of Regents of the State of
Utah, Student Loan Revenue Bonds, 1988
Series C, VRDN, 4.50% 10/2/95* 4.50 1,100 1,100
Intermountain Power Agency, Variable Rate Power
Supply Revenue Bonds, 1985 Series F, 3.80%
Optional Put 6/15/96 3.80 3,000 2,999
Intermountain Power Agency, Variable Rate
Power Supply Revenue and Refunding Bonds,
1985 Series F2, TECP:
3.65% 10/4/95 3.65 1,000 1,000
3.75% 10/12/95 3.75 1,400 1,400
VIRGINIA - 10.10%
Housing Development Authority, Commonwealth
Mortgage Bonds, 1993 Series F, Subseries F-STEM:
3.70% Mandatory Put 10/12/95 3.70 2,500 2,500
3.55% Mandatory Put 11/16/95 3.55 2,500 2,500
Industrial Development Authority of the City
of Norfolk Hospital Revenue Bonds (Sentara
Hospitals-Norfolk Project), Series 1990A, TECP:
3.85% 10/20/95 3.85 1,200 1,200
3.85% 10/24/95 3.85 1,700 1,700
Industrial Development Authority of the Town of
Louisa Pollution Control Revenue Bonds (Virginia
Electric and Power Company), Series 1984,
Money Market Municipal:
3.85% 10/27/95 3.85 2,000 2,000
3.85% 10/30/95 3.85 1,600 1,600
Alexandria Industrial Development Authority
Resource Recovery, VRDN, 4.65% 10/2/95* 4.65 1,400 1,400
Industrial Development Authority of the County
of Chesterfield, Money Market Municipals
Pollution Control Revenue Bonds (Virginia
Electric and Power Company Project),
Series 1987B, TECP:
3.85% 10/17/95 3.85 1,000 1,000
3.85% 10/19/95 3.85 1,300 1,300
WASHINGTON - 1.60%
Student Loan Finance Association,
Guaranteed Student Loan Program, 1988
Series B, VRDN, 4.05% 12/31/95* 4.05 1,000 1,000
Port of Seattle General Obligation Bonds,
Series 1985, VRDN, 4.25% 10/2/95* 4.25 1,400 1,400
WEST VIRGINIA - 3.62%
The County Commission of Marion County Solid
Waste Disposal Facility Revenue Bonds, 1990
Series A (Grant Town Congeneration Project),
VRDN, 4.50% 10/4/95* 4.50 1,700 1,700
Public Energy Authority Energy Revenue Bonds
(Morgantown Energy Associates Project),
1989 Series A, TECP:
3.55% 10/5/95 3.55 1,750 1,750
3.80% 11/27/95 3.80 2,000 2,000
WISCONSIN - 0.80%
State Operating Notes of 1995, 4.50%
6/17/96 3.80 1,200 1,205
WYOMING - 1.33%
Lincoln County Pollution Control Revenue Bonds
(Exxon Project), VRDN, 4.65% 10/2/95* 4.65 1,400 1,400
Lincoln County Pollution Control Revenue
Refunding Bonds (PacifiCorp Projects),
Series 1991, TECP, 3.65% 11/17/95 3.65 1,000 1,000
Sweetwater County Pollution Control
Revenue Bonds (PacifiCorp Projects),
Series 1990A, VRDN, 4.35% 10/2/95* 4.35 2,000 2,000
---------- ---------
Total Tax-Exempt Securities (cost: $149,076,000) 149,000 149,069
Excess of cash, prepaid expenses, and receivables
over payables 1,353
---------
Net Assets $150,422
=========
*Coupon rates may change periodically; yield at
acquisition reflects current coupon rate.
</TABLE>
See Notes to Financial Statements
THE TAX-EXEMPT MONEY FUND OF AMERICA
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------- ------------ ------------
STATEMENT OF ASSETS AND LIABILITIES
AT SEPTEMBER 30, 1995 (DOLLARS IN THOUSANDS)
- ------------------------------------- ------------ ------------
ASSETS:
INVESTMENT SECURITIES AT MARKET
(COST: $149,076) $149,069
CASH 1,859
RECEIVABLES FOR--
SALES OF FUND'S SHARES $576
ACCRUED INTEREST 950 1,526
------------ ------------
152,454
LIABILITIES:
PAYABLES FOR--
PUCHASES OF INVESTMENTS 1,531
REPURCHASES OF FUND'S SHARES 421
DIVIDENDS PAYABLE 24
MANAGEMENT SERVICES 56 2,032
------------ ------------
NET ASSETS AT SEPTEMBER 30, 1995 --
EQUIVALENT TO $1.00 PER SHARE ON
150,434,168 SHARES OF BENEFICIAL
INTEREST ISSUED AND OUTSTANDING;
UNLIMITED SHARES AUTHORIZED $150,422
=============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995 (DOLLARS IN THOUSANDS)
------------ ------------
INVESTMENT INCOME:
INCOME:
INTEREST $ 5,946
EXPENSES:
MANAGEMENT SERVICES FEE $699
DISTRIBUTION EXPENSES 96
TRANSFER AGENT FEE 152
REPORTS TO SHAREHOLDERS 6
REGISTRATION STATEMENT AND PROSPECTUS 93
POSTAGE, STATIONERY AND SUPPLIES 55
TRUSTEES' FEES 16
AUDITING AND LEGAL FEES 37
CUSTODIAN FEE 8
TAXES OTHER THAN FEDERAL INCOME TAX 4
OTHER EXPENSES 27
------------------
TOTAL EXPENSES BEFORE REIMBURSEMENT 1,193
REIMBURSEMENT OF EXPENSES 161 1,032
------------ ------------
NET INVESTMENT INCOME 4,914
------------
REALIZED LOSS AND UNREALIZED
DEPRECIATION ON INVESTMENTS:
NET REALIZED LOSS (12)
NET UNREALIZED
DEPRECIATION ON INVESTMENTS:
BEGINNING OF YEAR (15)
END OF YEAR (7)
------------
NET CHANGE IN UNREALIZED
DEPRECIATION ON INVESTMENTS 8
------------
NET REALIZED LOSS AND UNREALIZED
DEPRECIATION ON INVESTMENTS (4)
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $4,910
============
STATEMENT OF CHANGES IN NET
ASSETS (DOLLARS IN THOUSANDS)
- ---------------------------------------- ------------- -------------
YEAR ENDED SEPTEMBER 30
1995 1994
OPERATIONS: ------------- -------------
NET INVESTMENT INCOME $ 4,914 $ 2,927
NET REALIZED (LOSS) GAIN (12) 10
NET INCREASE (DECREASE) IN UNREALIZED
APPRECIATION (DEPRECIATION) ON INVESTMENTS 8 (4)
------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 4,910 2,933
------------- -------------
DIVIDENDS PAID TO SHAREHOLDERS (4,914) (2,927)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
PROCEEDS FROM SHARES SOLD:
254,916,915 AND 278,240,320
SHARES, RESPECTIVELY 254,917 278,240
PROCEEDS FROM SHARES ISSUED IN
REINVESTMENT OF NET INVESTMENT INCOME
DIVIDENDS AND DISTRIBUTIONS OF NET
REALIZED GAIN ON INVESTMENTS:
4,518,581 AND 2,735,835 SHARES,
RESPECTIVELY 4,519 2,736
COST OF SHARES REPURCHASED:
279,235,665 AND 231,575,866
SHARES, RESPECTIVELY (279,236) (231,576)
------------- -------------
NET (DECREASE) INCREASE IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS (19,800) 49,400
------------- -------------
TOTAL (DECREASE) INCREASE IN NET ASSETS (19,804) 49,406
NET ASSETS:
BEGINNING OF YEAR 170,226 120,820
------------- -------------
END OF YEAR $150,422 $170,226
============= ==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
Notes to Financial Statements
1. 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 following paragraphs summarize the significant
accounting policies consistently followed by the fund in the preparation of its
financial statements:
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.
Municipal securities with 60 days or less to maturity are valued at
amortized cost, which approximates market value. Municipal securities with
original or remaining maturities in excess of 60 days are valued at prices
obtained from a national municipal bond pricing service. The pricing service
takes into account various factors such as quality, yield and maturity of
municipal securities comparable to those held by the fund, as well as actual
bid and asked prices on a particular day. Other securities with original or
remaining maturities in excess of 60 days, including securities for which
pricing service values are not available, are valued at the mean of their
quoted bid and asked prices. However, in circumstances where the investment
adviser deems it appropriate to do so, securities will be valued at the mean of
their quoted bid and asked prices, or, if such prices are not available, at the
mean of such prices for securities of comparable maturity, quality and type.
The maturities of variable or floating rate instruments are deemed to be the
time remaining until the next interest rate adjustment date. Securities for
which market quotations are not readily available are valued at fair value as
determined in good faith by the Valuation Committee of the Board of Trustees.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Interest income is reported on the accrual basis. Dividends are
declared on a daily basis after the determination of the fund's net investment
income and paid to shareholders on a monthly basis. Discounts and premiums on
securities purchased are amortized over the life of the respective securities.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required.
As of September 30, 1995, unrealized depreciation for book and federal
income tax purposes aggregated $8,000, which related to depreciated securities.
There was no difference between book and tax realized gains on securities
transactions for the year ended September 30, 1995. During the year ended
September 30, 1995, the fund realized, on a tax basis, a net capital loss of
$11,000 on sales of securities. The cost of portfolio securities for book and
federal income tax purposes was $149,076,000 at September 30, 1995.
3. The fee of $699,000 for management services was paid 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 an annual rate of 0.44% of the first $200 million of average net assets;
0.42% of such assets in excess of $200 million but not exceeding $600 million;
0.38% on that portion of net assets in excess of $600 million but not exceeding
$1.2 billion; and 0.34% on that portion of net assets in excess of $1.2
billion.
The Investment Advisory and Service Agreement provides for fee reductions
to the extent that annual operating expenses exceed 0.75% of the average net
assets of the fund during a period which will terminate at the earlier of such
time as no reimbursement has been required for a period of 12 consecutive
months, provided no advances are outstanding, or October 2, 1999. CRMC has
also voluntarily agreed to waive its fees to the extent necessary to ensure
that the Fund's expenses do not exceed 0.65% of the average net assets.
Expenses that are not subject to these limitations are interest, taxes,
brokerage commissions, transaction costs, and extraordinary expenses. There
can be no assurance that this voluntary fee waiver will continue in the future.
Fee reductions amounted to $161,000 for the year ended September 30, 1995.
Pursuant to a Plan of Distribution with American Funds Distributors, Inc.
(AFD), the fund may expend up to 0.15% of its average net assets annually for
any activities primarily intended to result in sales of fund shares, provided
the categories of expenses for which reimbursement is made are approved 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. During the
year ended September 30, 1995, distribution expenses under the plan amounted to
$96,000. As of September 30, 1995, accrued and unpaid distribution expenses
were $7,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $152,000 under the terms of a contract that provides for transfer
agency services to be performed for the fund.
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,
1995, aggregate amounts deferred were $9,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are wholly
owned subsidiaries of CRMC. Certain of the Trustees and officers of the fund
are or may be considered to be affiliated with CRMC, AFS and AFD. No such
persons received any remuneration directly from the fund.
4. As of September 30, 1995, accumulated undistributed net realized loss on
investments was $12,000.
The fund made purchases and sales of investment securities of $761,180,000
and $779,835,000, respectively, during the year ended September 30, 1995.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED SEPTEMBER 30
-------- -------- -------- -------- --------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF YEAR $1.000 $1.000 $1.000 $1.000 $1.000
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
NET INVESTMENT INCOME .031 .020 .019 .029 .045
-------- -------- -------- -------- --------
TOTAL INCOME FROM INVESTMENT OPERATIONS .031 .020 .019 .029 .045
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
DIVIDENDS FROM NET INVESTMENT INCOME (.031) (.020) (.019) (.029) (.045)
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (.031) (.020) (.019) (.029) (.045)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $1.000 $1.000 $1.000 $1.000 $1.000
======== ======== ======== ======== ========
TOTAL RETURN 3.14% 1.98% 1.90% 2.96% 4.58%
RATIOS/SUPPLEMENTAL DATA:
NET ASSETS, END OF YEAR (IN MILLIONS) $150 $170 $121 $108 $107
RATIO OF EXPENSES TO AVERAGE NET ASSETS* 0.65% .65% .65% .65% .65%
RATIO OF NET INCOME TO AVERAGE NET ASSETS 3.09% 1.99% 1.88% 2.95% 4.43%
</TABLE>
*HAD CRMC NOT WAIVED FEES, THE FUND'S RATIO OF EXPENSES TO AVERAGE NET ASSETS
WOULD HAVE BEEN .75%, .73%, .79%, .77% AND .74% FOR THE
YEARS ENDED SEPTEMBER 30, 1995, 1994, 1993, 1992, AND 1991, REPECTIVELY.
Report of Independent Accountants
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, 1995, the results of its operations, the
changes in its net assets and the per-share data and ratios for the periods
indicated, in conformity with generally accepted accounting principles. 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 generally accepted auditing standards, 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, 1995 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
Los Angeles, California
October 27, 1995
1995 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.
Dividends received by retirement plans such as IRAs, Keogh-plans, and
403(b) plans need not be reported as taxable income. However, many retirement
trusts may need this information for their annual information reporting.
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.
SINCE THE AMOUNTS ABOVE ARE REPORTED FOR THE 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 1996 TO DETERMINE THE CALENDAR YEAR
AMOUNTS TO BE INCLUDED ON THEIR RESPECTIVE 1995 TAX RETURNS. SHAREHOLDERS
SHOULD CONSULT THEIR TAX ADVISERS.
THE CASH MANAGEMENT TRUST OF AMERICA
BOARD OF TRUSTEES
H. FREDERICK CHRISTIE
Palos Verdes Estates, California
Private investor; former President and Chief Executive Officer, The Mission
Group; former President, Southern California Edison Company
DIANE C. CREEL
Long Beach, California
Chairwoman, Chief Executive Officer and President, The Earth Technology
Corporation (environmental engineering)
MARTIN FENTON, JR.
San Diego, California
Chairman of the Board, Senior Resource Group, Inc.
(senior living centers management)
LEONARD R. FULLER
Los Angeles, California
President, Fuller & Company, Inc.
(financial management consulting)
ABNER D. GOLDSTINE
Los Angeles, California
President
Senior Vice President and Director,
Capital Research and Management Company
PAUL G. HAAGA, JR.
Los Angeles, California
Chairman of the Boards
Senior Vice President and Director,
Capital Research and Management Company
HERBERT HOOVER III
Pasadena, California
Private investor
RICHARD G. NEWMAN
Los Angeles, California
Chairman of the Board, President and Chief Executive Officer, AECOM Technology
Corporation (architectural engineering)
PETER C. VALLI
Long Beach, California
Chairman of the Board and Chief Executive Officer, BW/IP
International, Inc. (industrial
manufacturing)
THE U.S. TREASURY MONEY FUND OF AMERICA
OTHER OFFICERS
NEIL L. LANGBERG
Los Angeles, California
Senior Vice President,
The Tax-Exempt Money Fund of America
Vice President-Investment Management Group, Capital Research and Management
Company
TERESA S. COOK
Los Angeles, California
Vice President,
The Cash Management Trust of America and
The U.S. Treasury Money Fund of America
Senior Vice President-Investment Management Group, Capital Research and
Management Company
MARY C. CREMIN
Brea, California
Vice President and Treasurer
Senior Vice President-Fund Business Management Group, Capital Research and
Management Company
MICHAEL J. DOWNER
Los Angeles, California
Vice President
Senior Vice President-Fund Business Management Group,
Capital Research and Management Company
SARAH P. LUCAS
Los Angeles, California
Assistant Vice President,
The Cash Management Trust of America and
The U.S. Treasury Money Fund of America
Assistant Vice President-Investment Management Group, Capital Research and
Management Company
JULIE F. WILLIAMS
Los Angeles, California
Secretary
Vice President-Fund Business Management Group,
Capital Research and Management Company
THE TAX-EXEMPT MONEY FUND OF AMERICA
KIMBERLY S. VERDICK
Los Angeles, California
Assistant Secretary
Assistant Vice President-Fund Business Management Group, Capital Research and
Management Company
NYMIA M. CUCUECO
Brea, California
Assistant Treasurer,
The Tax-Exempt Money Fund of America
Vice President-Fund Business Management Group,
Capital Research and Management Company
ANTHONY W. HYNES, JR.
Brea, California
Assistant Treasurer
Vice President-Fund Business Management Group, Capital Research and Management
Company
Leonard Weil retired from the Board effective December 31, 1994. He has
been a member of the Board of Trustees of The Cash Management Trust of America
since December 15, 1987, and of the Boards of The U. S. Treasury Money Fund of
America and The Tax-Exempt Money Fund of America since their inceptions. The
Trustees thank him for his many contributions to the funds.
Diane Creel and Leonard Fuller were elected Trustees effective September
22, 1994.
OFFICES OF THE FUNDS AND OF THE INVESTMENT ADVISER, CAPITAL RESEARCH AND
MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster
345 California Street
San Francisco, California 94104-2675
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
400 South Hope Street
Los Angeles, California 90071-2889
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR SECURITIES DEALER OR FINANCIAL PLANNER, OR CALL THE FUNDS'
TRANSFER AGENT, TOLL-FREE, AT 800/421-0180.
This report is for the information of shareholders of The Cash Management Trust
of America, The U.S. Treasury Money Fund of America and The Tax-Exempt Money
Fund of America, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the funds. If used
as sales material after December 31, 1995, this report must be accompanied by
an American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA W/GRS/2757
Lit. No. MMF-01-1195
[The American Funds Group(R)]
