American Funds Tax-Exempt Preservation Portfolio F-3 is an open-end mutual fund designed to deliver current income that is exempt from regular federal income tax while emphasizing preservation of capital. The portfolio invests primarily in high-quality, short- to intermediate-maturity municipal bonds through a mix of underlying American Funds strategies, resulting in a predominantly U.S. bond allocation and minimal equity exposure. Its holdings are largely revenue bonds, supplemented by general obligation bonds, seeking diversified exposure across municipal sectors. The fund maintains a relatively short effective duration—around three years—aimed at limiting interest-rate sensitivity while providing stable, tax-exempt income. It distributes dividends monthly and historically targets a distribution rate in the mid-2% range, reflecting its income-oriented mandate. With hundreds of issuers represented and a measured turnover profile, the portfolio functions as a core short-duration municipal allocation for investors prioritizing tax efficiency and capital steadiness within fixed income. Operated by Capital Group, it is benchmarked to short/intermediate municipal indices and is positioned within the Muni National Short category for risk and peer comparisons.
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