EMPO Empowered Products Inc (CE)

ITEM 1 – Reports to Stockholders

 

		American Funds Short-Term Tax-Exempt Bond Fund ® Limited Term Tax-Exempt Bond Fund of America ® The Tax-Exempt Bond Fund of America ® American High-Income Municipal Bond Fund ® The Tax-Exempt Fund of California ® American Funds Tax-Exempt Fund of New York ®
		Semi-annual reports for the six months ended January 31, 2014

American Funds Short-Term Tax-Exempt Bond Fund seeks to provide current income exempt from regular federal income tax, consistent with the maturity and quality standards described in the prospectus, and to preserve capital.

Limited Term Tax-Exempt Bond Fund of America seeks to provide current income exempt from regular federal income tax, consistent with the maturity and quality standards described in the prospectus, and to preserve capital.

The Tax-Exempt Bond Fund of America seeks to provide a high level of current income exempt from federal income tax, consistent with preservation of capital.

American High-Income Municipal Bond Fund seeks to provide a high level of current income exempt from regular federal income tax.

The Tax-Exempt Fund of California seeks to provide a high level of current income exempt from regular federal and California state income taxes, with a secondary objective of preservation of capital.

American Funds Tax-Exempt Fund of New York seeks to provide a high level of current income exempt from regular federal, New York state and New York City income taxes, with a secondary objective of preservation of capital.

Each fund is one of more than 40 offered by one of the nation’s largest mutual fund families, American Funds, from Capital Group. For more than 80 years, Capital has invested with a long-term focus based on thorough research and attention to risk.

Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge had been deducted (maximum 2.50% for American Funds Short-Term Tax-Exempt Bond Fund and Limited Term Tax-Exempt Bond Fund of America; 3.75% for The Tax-Exempt Bond Fund of America, American High-Income Municipal Bond Fund, The Tax-Exempt Fund of California and American Funds Tax-Exempt Fund of New York), the results would have been lower. Results are for past periods and are not predictive of results for 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. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. For current information and month-end results, visit americanfunds.com.

Here are the total returns on a $1,000 investment with all distributions reinvested for periods ended December 31, 2013 (the most recent calendar quarter-end) and the total annual fund operating expense ratios as of the prospectus dated October 1, 2013:

For other share class results, visit americanfunds.com.

The five- and 10-year investment results for American Funds Short-Term Tax-Exempt Bond Fund include the fund’s results as a money market fund through the date of its conversion (August 7, 2009) to a short-term tax-exempt bond fund, and therefore are not representative of the fund’s results had it operated as a short-term tax-exempt bond fund for the full term of those periods. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers (and expense reimbursements for American Funds Short-Term Tax-Exempt Bond Fund and American Funds Tax-Exempt Fund of New York), without which results would have been lower. The investment adviser is currently reimbursing a portion of other expenses for American Funds Tax-Exempt Fund of New York. This reimbursement will be in effect through at least September 30, 2014, unless modified or terminated by the fund’s board. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. Visit americanfunds.com for more information.

A summary of each fund’s 30-day yield can be found on page 3.

Fellow investors:

We are pleased to present you with this semi-annual report for six American Funds municipal bond funds: American Funds Short-Term Tax-Exempt Bond Fund, Limited Term Tax-Exempt Bond Fund of America, The Tax-Exempt Bond Fund of America, American High-Income Municipal Bond Fund, The Tax-Exempt Fund of California and American Funds Tax-Exempt Fund of New York. This report covers results from August 1, 2013, through January 31, 2014, the midpoint of the funds’ current fiscal year.

The municipal bond market rebounded during the six-month period, registering strong returns after a broad selloff in the summer.

Against this backdrop, all of the funds advanced. Total returns ranged from 0.89% for American Funds Short-Term Tax-Exempt Bond Fund to 3.70% for The Tax-Exempt Fund of California. (See pages 4 through 10 for detailed results for each fund.)

Economic and market overview

The period began in the midst of a broad bond market downturn, as investors generally fled municipal bonds along with other fixed-income securities in anticipation of the Federal Reserve reducing its bond purchasing programs. By September, however, a turnaround in the U.S. Treasury market and relatively high yields for many types of municipal bonds helped spark a rally in the municipal market. The Fed delayed its tapering until December, which calmed investors.

Toward the end of the period, equities experienced heightened volatility amid weaker-than-expected economic data and turmoil in emerging markets. Amid these conditions, investors sought the relative safety of municipal securities and other bonds. The Barclays Municipal Bond Index, a broad measure of the investment-grade tax-exempt bond market, recorded a 2.99% gain for the six months. By way of comparison, the Barclays U.S. Aggregate Index, a broad measure of the investment-grade taxable fixed-income market, gained 1.78%. Both indexes are unmanaged and have no expenses.

Furthermore, after strong outflows in municipal bond funds through much of 2013, fund flows generally turned positive in January, which helped bolster the rally.

While Detroit’s bankruptcy and Puerto Rico’s ongoing problems contributed to the relative weakness in the municipal bond market earlier in 2013, investors generally looked beyond such high profile news headlines during the fiscal period. The municipal bond market is vast and diverse, and the challenges faced by Detroit and Puerto Rico have limited bearing on the broader market. In fact, many of the funds had some — albeit modest — exposure to Puerto Rico issuers across a range of sectors, as their bonds offer triple tax-exempt status.

Looking ahead

The U.S. economy appears to be gaining strength, and tax receipts for many states and municipalities are improving. With the overall economic picture brightening, the Fed has indicated that it will continue to reduce its bond buying programs. Given these circumstances, we expect rates to rise over time. The

precise timing of any increase, however, is uncertain. We have maintained a cautious approach to the market and believe the funds are well positioned to serve as potentially attractive sources of income regardless of short-term headwinds.

Despite a rash of unsettling news headlines, the municipal bond market delivered solid gains in recent months, and many types of bonds appear to be fairly valued. We are finding investment opportunities in a number of areas that we believe represent compelling valuations both relative to taxable bonds and compared with historic valuations in the municipal bond market.

We maintain our focus on the long term and base each investment decision on in-depth research of individual bond issuers as well as economic and market conditions. We believe the funds’ results in the most recent six- and 12-month periods speak to the strength of this approach in both rising and declining market environments. As always, we are focused on striking a careful balance between risk and potential return in the funds’ holdings.

We are grateful for your continued support, and we look forward to reporting back to you at the end of the fiscal year.

Sincerely,

Brenda S. Ellerin
President, American Funds Short-Term
Tax-Exempt Bond Fund and Limited Term
Tax-Exempt Bond Fund of America

Neil L. Langberg
President, The Tax-Exempt Bond Fund
of America and The Tax-Exempt Fund
of California

Karl J. Zeile
President, American High-Income
Municipal Bond Fund and American
Funds Tax-Exempt Fund of New York

March 14, 2014

For current information about the funds, visit americanfunds.com.

Funds’ 30-day yields

Below is a summary of each fund’s 30-day yield and 12-month distribution rate for Class A shares as of February 28, 2014. Both measures reflect the 2.50%/3.75% maximum sales charge. Each fund’s 30-day yield is calculated in accordance with the U.S. Securities and Exchange Commission (SEC) formula. The SEC yield reflects the rate at which each fund is earning income on its current portfolio of securities while the distribution rate reflects the funds’ past dividends paid to shareholders. Accordingly, the funds’ SEC yields and distribution rates may differ. The equivalent taxable yield assumes a 43.4% tax rate. ¹

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Bond ratings, which typically range from Aaa/AAA (highest) to D (lowest), are assigned by credit rating agencies such as Moody’s, Standard & Poor’s and/or Fitch as an indication of an issuer’s creditworthiness. Income may be subject to state or local income taxes and/or federal alternative minimum taxes. Also, certain other income (such as distributions from gains on the sale of certain bonds purchased at less than par value, for The Tax-Exempt Bond Fund of America), as well as capital gain distributions, may be taxable. High-yield/lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than investment-grade/higher rated bonds. The Tax-Exempt Fund of California and American Funds Tax-Exempt Fund of New York are more susceptible to factors adversely affecting issuers of each state’s tax-exempt securities than a more widely diversified municipal bond fund. Refer to the fund prospectus and the Risk Factors section of this report for more information on these and other risks associated with investing in the funds.

American Funds Short-Term Tax-Exempt Bond Fund

The fund generated a 0.89% total return for the first half of the fiscal year, outpacing the 0.69% result of the Lipper Short Municipal Debt Funds Average, a peer group measure. By way of comparison, the unmanaged Barclays Municipal Short 1–5 Years Index, which has no expenses, gained 1.24%.

The fund paid monthly dividends totaling about 5 cents a share for the six months. This amounts to a federally tax-exempt income return of 0.50%. This is equivalent to a taxable income return of 0.88% for investors in the 43.4% ¹ maximum federal tax bracket. A portion of the fund’s return also may be exempt from some state and local taxes.

While results were favorable, the fund’s managers recognize that relative stability is a top priority for most fund investors. In a broadly positive environment, the fund maintained its focus on high-quality issues of shorter duration. At the close of the period, the fund’s largest concentrations included revenue bonds supporting airports (10.0%) and hospital facilities (9.7%). These sectors were among the biggest contributors to total return.

Tax-exempt yields vs. taxable yields

Find your estimated taxable income below to determine your federal tax rate, ² then look in the far right column to see what you would have had to earn from a taxable investment to equal the fund’s 1.05% tax-exempt distribution rate ³ as of January 31, 2014.

Limited Term Tax-Exempt Bond Fund of America

The fund advanced 1.97%, which slightly exceeded the 1.93% total return of the unmanaged Barclays Municipal Short-Intermediate 1–10 Years Index, which has no expenses. However, the fund trailed the 2.33% total return of the Lipper Intermediate Municipal Debt Funds Average, a peer group measure.

The fund paid monthly dividends totaling just over 20 cents a share for the period. Those individuals who reinvested dividends received a federally tax-exempt income return of 1.27%. This is equivalent to a taxable income return of 2.24% for investors in the 43.4% ¹ maximum federal tax bracket.

The fund focuses primarily on investment-grade bonds (those rated Baa/BBB and above) with maturities ranging from a few years to 10 years. This relatively conservative approach helped the fund provide a measure of relative stability during both the six-month period as well as the past 12 months, a period of high turbulence. (For the 12 months ended January 31, 2014, the fund produced a 0.56% total return, compared with a –0.99% return for the Lipper Intermediate Municipal Debt Funds Average.) The fund’s managers maintained their focus on revenue bonds supporting critical local enterprises, including airports (13.5%), hospital facilities (12.1%) and electric utilities (6.8%).

Tax-exempt yields vs. taxable yields

Find your estimated taxable income below to determine your federal tax rate, ² then look in the far right column to see what you would have had to earn from a taxable investment to equal the fund’s 2.41% tax-exempt distribution rate ³ as of January 31, 2014.

The Tax-Exempt Bond Fund of America

The fund posted a 3.03% total return during the six-month period, which slightly exceeded both the 2.94% total return of the Lipper General & Insured Municipal Debt Funds Average, a peer group measure, and the 2.99% gain of the unmanaged Barclays Municipal Bond Index, which has no expenses.

During the period, the fund paid monthly dividends totaling about 22 cents a share, amounting to a federally tax-exempt income return of 1.80% for investors who reinvested dividends. This is equivalent to a taxable income return of 3.18% for investors in the 43.4% ¹ maximum federal tax bracket. The fund does not invest in bonds subject to the Alternative Minimum Tax (AMT).

In the recent volatile climate, the fund’s managers have maintained a fairly conservative approach to the market, focusing on shorter duration securities but also seeking out opportunities for incremental yield through intensive credit research. This approach helped the fund deliver strong relative results during the first half of the fiscal year, when market conditions were generally favorable, and also during the turbulent 12 months ended January 31, 2014 (see results on page 10). The fund’s managers continued to focus chiefly on revenue bonds, an area of the market where we believe credit research is most useful. However, the broadly diversified portfolio also included investments in general obligation bonds issued by states and municipalities.

Tax-exempt yields vs. taxable yields

Find your estimated taxable income below to determine your federal tax rate, ² then look in the far right column to see what you would have had to earn from a taxable investment to equal the fund’s 3.34% tax-exempt distribution rate ³ as of January 31, 2014.

American High-Income Municipal Bond Fund

The fund recorded a total return of 3.22% for the period. This result outpaced the 1.99% return of the Barclays High Yield Municipal Bond Index. The index is unmanaged and has no expenses. The fund’s return also exceeded the 2.39% total return of the Lipper High-Yield Municipal Debt Funds Average, a measure of the fund’s peer group.

Results for longer time frames can be found on page 10. While the fund’s return for the 12 months ended January 31, 2014, was negative, it exceeded returns for both the Barclays High Yield Municipal Bond Index and the Lipper High-Yield Municipal Debt Fund’s Average. We believe the fund’s relative results during the most recent six- and 12-month periods reflect the strength of the fund’s approach, which is driven by strong fundamental credit research.

For the period, the fund paid monthly dividends totaling about 34 cents a share, amounting to a federally tax-exempt income return of 2.35% for investors who reinvested dividends. This is equivalent to a taxable income return of 4.15% for investors in the 43.4% ¹ maximum federal tax bracket. A portion of the fund’s return also may be exempt from some state and local taxes.

The fund’s strong return was supported by positive contributions from a broad spectrum of bonds representing a variety of sectors and geographies. Select holdings of tax assessment bonds and bonds backing senior living facilities produced some of the strongest gains. Although lower rated, higher yielding bonds generally trailed the broader market during the six months, the fund exceeded the 2.99% gain of the unmanaged Barclays Municipal Bond Index, a measure of the investment-grade market.

Tax-exempt yields vs. taxable yields

Find your estimated taxable income below to determine your federal tax rate, ² then look in the far right column to see what you would have had to earn from a taxable investment to equal the fund’s 4.32% tax-exempt distribution rate ³ as of January 31, 2014.

The Tax-Exempt Fund of California

The fund generated a 3.70% gain, a result that was in line with the 3.71% average total return of the fund’s peers, as measured by the Lipper California Municipal Debt Funds Average. However, the fund trailed the 4.22% advance of the unmanaged Barclays California Municipal Index, which has no expenses.

For the period, the fund paid monthly dividends totaling about 32 cents a share. Those investors who reinvested dividends received an income return of 1.93%. This is equivalent to a taxable income return of 3.93% for investors in the 50.93% effective combined federal and California tax bracket.

California’s fiscal condition and the state economy continue to recover. State tax revenues have risen more than expected, and the state has projected a surplus for the 2014-2015 budget. These improving conditions and relatively light issuance in the state served as tailwinds for municipal bond investors during the period.

Holdings of tax assessment bonds and bonds backing hospital facilities, which were among the fund’s heaviest concentrations during the period, produced some of the strongest gains. With the triple-tax exempt status they offer to investors, the fund had a small concentration of holdings issued by Puerto Rico issuers (1.50%). These holdings detracted from the fund’s overall positive result during the period.

Tax-exempt yields vs. taxable yields

Find your estimated 2013 taxable income below to determine your combined federal and California tax rate,* then look in the right-hand column to see what you would have had to earn from a taxable investment to equal the fund’s 3.62% tax-exempt distribution rate ^† at January 31, 2014.

American Funds Tax-Exempt Fund of New York

The fund’s 2.26% total return for the period exceeded the 2.14% gain of the Lipper New York Municipal Debt Funds Average, a measure of its peer group. However, the fund trailed the unmanaged Barclays New York Municipal Index, which advanced 3.29% and has no expenses. As you can see in the table on page 10, the fund has outpaced its benchmarks over its lifetime.

The fund paid monthly dividends totaling about 16 cents a share for the six months. This represents an income return of 1.55% for those who reinvested dividends. For investors in the 50.59% ¹ combined effective federal, New York state and New York City tax bracket, this is equivalent to a taxable income return of 3.14%.

Revenue bonds supporting essential local projects — such as higher education facilities and hospitals — continue to be a key focus for the fund, as they represent an area of the market where our investment professionals believe extensive credit research can add value. Holdings representing a broad spectrum of sectors, duration and credit quality bolstered the fund’s overall return. A modest exposure to bonds of Puerto Rico issuers detracted from the fund’s results.

Tax-exempt yields vs. taxable yields

Find your estimated 2013 taxable income below to determine your combined federal and New York state tax rate, ^1,2 then look in the right-hand column to see what you would have had to earn from a taxable investment to equal the fund’s 2.92% tax-exempt distribution rate ³ at January 31, 2014.

Results at a glance

For periods ended January 31, 2014, with dividends reinvested

Quality ratings*			Percent of net assets

 

	Aaa/AAA 13.5%		Unrated 0.4%
	Aa/AA 50.2%		Short-term securities &
	A/A 18.3%		other assets less liabilities 17.6%

American Funds Short-Term Tax-Exempt Bond Fund

This summary investment portfolio is designed to streamline the report and help investors better focus on the fund’s principal holdings. See the inside back cover for details on how to obtain a complete schedule of portfolio holdings.

“Other securities” includes all issues that are not disclosed separately in the summary investment portfolio.

Key to abbreviations

Agcy. = Agency

AMT = Alternative Minimum Tax

Auth. = Authority

Certs. of Part. = Certificates of Participation

Dept. = Department

Dev. = Development

Dist. = District

Econ. = Economic

Fac. = Facility

Facs. = Facilities

Fin. = Finance

Fncg. = Financing

G.O. = General Obligation

LOC = Letter of Credit

Preref. = Prerefunded

Redev. = Redevelopment

Ref. = Refunding

Rev. = Revenue

TECP = Tax-Exempt Commercial Paper

See Notes to Financial Statements

	Aaa/AAA 8.5%		Unrated 0.2%
	Aa/AA 39.9%		Short-term securities &
	A/A 38.3%		other assets less liabilities 5.8%
	Baa/BBB 7.3%