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RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 1, 2 OR 754

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

FIXED INCOME

Seek more from municipal bonds. Here's how.

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OUR APPROACH

For us, full active management means trying to add value in 3 ways:

Potential sources of excess returns (for illustrative purposes only)

Want to learn how you and your clients can seek more from municipal bonds?

Get the lowdown on the market’s striking transformation, portfolio construction and how our tax-exempt bond funds strive to add value.

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EXCESS RETURNS

Our flagship muni fund, The Tax-Exempt Bond Fund of America® (TEAFX) has added value over time.

How does TEAFX compare to the benchmark for the largest municipal bond ETF and the ladder1 benchmark with the most comparable duration?

Growth of a hypothetical $10,000 investment for 10-year period
Class F-2 through December 31, 2020

Exhibit comparing TEAFX  to the benchmark for the largest municipal bond ETF and the ladder (see footnote 1) benchmark with the most comparable duration. Specifically, bar chart shows growth of hypothetical $10,000 investment for 10-year period ended December 31, 2020 in thousands of dollars. The Tax-Exempt Bond Fund of America (F2 shares): $16.0; Bloomberg Barclays Municipal Bond Index: $15.7; Exchange-traded fund benchmark: $15.4; Ladder benchmark: $14.1. See important investment disclosures below.

Sources: Capital Group, Bloomberg Index Services Ltd., Morningstar.

Important note: Compared to managed ladders, fully actively managed funds seek to generate returns in additional ways. The risks entailed are, therefore, potentially broader than investors might be exposed to in a ladder. The Tax-Exempt Bond Fund of America has often shown a somewhat higher duration (sensitivity to prevailing interest rates) than many ladders. Favorable outcomes shown have often been accompanied by relatively higher rate risk. Investors should consult with their financial advisors about the potential tax and risk consequences of different investment vehicles.

Passive funds are not striving to outpace their benchmarks; rather, they seek to replicate the benchmark’s return pattern. Investors should consult with their financial advisor about the different pricing, cost structures and tax implications of mutual funds and ETFs. ETF share prices may significantly exceed the underlying NAV at times of volatility, unlike with mutual funds. And, unlike with ETFs, mutual funds may be subject to sales charges at purchase or redemption — which can detract from returns. Also, ETFs may offer certain tax efficiencies compared to mutual funds. Benchmark for exchange-traded fund is the S&P National AMT-Free Municipal Bond Index. Ladder benchmark is the Bloomberg Barclays Municipal Managed Money 1-12 Year Laddered Maturity Index.

1A ladder involves buying several bonds with a specified range of (staggered) maturities, to offer regular income. When one bond in the ladder matures, proceeds can be used to buy a new bond at the ladder’s longest maturity.

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INSIGHTS

MUNICIPAL BONDS

Municipal Market Update

Quarterly update on the municipal market and our funds

FIXED INCOME

Fixed Income Perspectives

Quarterly insights from Capital's fixed income team

OUTLOOK

2021 Muni Outlook 

Our investment pros see a silver lining to COVID storm clouds

Individual funds not your preference?

No problem.

Returns as of 12/31/20 (Class F-2)
 
  Cumulative total returns Average annual total returns
  1 year 5 years 10 years
The Tax-Exempt Bond Fund of America (Class F-2)
4.91%
3.83%
4.84%
Bloomberg Barclays Municipal Managed Money
1 - 12 Year Laddered Maturity Index
5.04
3.16
3.53
S&P National AMT-Free Muni Index
4.95
3.73
4.46
Bloomberg Barclays Municipal Bond Index
5.21
3.91
4.63

Fixed income solutions

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Fixed income at Capital Group

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Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. View fund expense ratios and returns.

Returns shown at net asset value (NAV) have all distributions reinvested.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Investments are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds.

Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness. If agency ratings differ, the security will be considered to have received the highest of those ratings, consistent with the fund’s investment policies. Securities in the Unrated category have not been rated by a rating agency; however, the investment adviser performs its own credit analysis and assigns comparable ratings that are used for compliance with fund investment policies.

For more information about the risks associated with each investment, go to its detailed information page or read the prospectus, if applicable.

When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower and net expenses higher. This information is provided in detail in the shareholder reports. Read details about how waivers and/or reimbursements affect the results for each fund. View results and yields without fee waiver and/or expense reimbursement

Class F-2 shares were first offered on August 1, 2008. Class F-2 share results prior to the date of first sale are hypothetical based on the results of the original share class of the fund without a sales charge, adjusted for typical estimated expenses. [Results for certain funds with an inception date after August 1, 2008, also include hypothetical returns because those funds' Class F-2 shares sold after the funds' date of first offering.] View dates of first sale and specific expense adjustment information for Class-F2 shares.

Income from municipal bonds may be subject to state or local income taxes. Certain other income, as well as capital gain distributions, may be taxable.

There may have been periods when the results lagged the index(es). Certain market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.

Portfolios are managed, so holdings will change.

Certain fixed income and/or cash and equivalents holdings may be held through mutual funds managed by the investment adviser or its affiliates that are not offered to the public.

Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups. 

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. 

All other company and product names mentioned are the property of their respective companies.

American Funds Distributors, Inc., member FINRA.

Use of this website is intended for U.S. residents only.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.

Bloomberg® is a trademark of Bloomberg Finance L.P. (collectively with its affiliates, “Bloomberg”). Barclays® is a trademark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Neither Bloomberg nor Barclays approves or endorses this material, guarantees the accuracy or completeness of any information herein and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

Bloomberg Barclays Municipal Bond Index is a market value-weighted index designed to represent the long-term investment-grade tax-exempt bond market.

Bloomberg Barclays Municipal Managed Money 1-12 Year Laddered Maturity Index is a component of the Managed Money index — a rules-based, market-value-weighted index of AA-rated tax-exempt bonds; this component is designed to represent a ladder strategy with the specified maturity profile.

The S&P National AMT-Free Municipal Bond Index is a broad market value-weighted index designed to represent the investment-grade tax-exempt U.S. municipal bond market. Bonds issued by U.S. territories, including Puerto Rico, are excluded from this index.

Copyright © 2021 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. 

©2021 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar, nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.