American Funds seeks OK to merge two money market funds

American Funds plans to send out proxy statements next week to shareholders of its money market mutual funds seeking approval to merge two of the funds and convert one to a short-term bond fund.
APR 15, 2009
American Funds plans to send out proxy statements next week to shareholders of its money market mutual funds seeking approval to merge two of the funds and convert one to a short-term bond fund. The boards of three funds voted to approve the changes, said American Funds spokesman Chuck Freadhoff. If approved by shareholders, the move would merge the Cash Management Trust of America Fund (CTAXX) and the U.S. Treasury Money Fund of America (UTAXX) with the American Funds Money Market Fund, which recently received SEC approval. The new fund, which will be open to investors as of May 1, will invest in Treasury securities, federal agency discount notes, high-quality commercial paper, bank and savings association obligations, and short-term corporate bonds and notes. In addition, a proxy vote will take place on a proposal to convert the Tax-Exempt Money Fund of America (TEAXX) into a short-term, tax-exempt bond fund. This fund will have a floating net asset value and will invest in debt with longer maturities, according to a report published by Chicago-based Morningstar Inc. The Cash Management Trust of America had $25 billion in assets, the U.S. Treasury Money Fund of America had $5.75 billion in assets and the Tax-Exempt Money Fund of America had $1.2 billion in assets as of Dec. 31. The shareholder meetings for all three funds are set for June 15. American Funds, advised by Capital Research and Management Co. of Los Angeles, had $750 billion in assets under management as of Jan. 31.

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