American Funds Tax-Exempt Preservation Portfolio Class C is an open-end municipal bond mutual fund designed to provide current income exempt from regular federal income tax while prioritizing preservation of capital. The portfolio primarily invests in short- to intermediate-maturity U.S. municipal securities, emphasizing high-quality revenue bonds and general obligation bonds, with a heavy allocation to U.S. bonds and a modest cash position to support liquidity and stability. Managed using a multi-manager approach, it blends underlying strategies focused on limited-term and short-term municipal income, seeking low interest-rate sensitivity and consistent tax-exempt distributions paid monthly. Key characteristics include a short effective duration profile, a diversified issuer base across essential-service and infrastructure-linked municipalities, and an objective aligned with the Bloomberg Municipal Bond 1–7 Year Blend Index as a benchmark reference for risk and return context. The fund plays a role in fixed income allocations for investors seeking tax-efficient income and principal preservation, offering exposure to a broad, laddered municipal bond universe with regular income and measured turnover to maintain its capital-preservation mandate.
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