Fund Evaluator:

American Funds Shrt-Term Tx-Exmpt Bd F-1 Overview

American Funds Shrt-Term Tx-Exmpt Bd F-1 (FSTTX) is an actively managed Municipal Bond Muni National Short fund. Capital Group launched the fund in 2009.

The investment seeks current income exempt from regular federal income tax, consistent with the maturity and quality standards, and to preserve capital. The fund will invest at least 80% of its assets in, or derive at least 80% of its income from, securities that are exempt from regular federal income tax and that do not subject the investors to federal alternative minimum tax. The fund invests primarily in debt securities rated AA- or better or Aa3 or better, or unrated but determined by the fund's investment adviser to be of equivalent quality. Its aggregate portfolio will have a dollar-weighted average effective maturity no greater than three years.

About American Funds Shrt-Term Tx-Exmpt Bd F-1 (FSTTX)

There are 2 members of the management team with an average tenure of 6.33 years: Mark Marinella (2019), Vikas Malhotra (2021). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: Bloomberg Municipal TR USD index with a weighting of 100% and Bloomberg Municipal 1-5 Yr TR USD index with a weighting of 100%. American Funds Shrt-Term Tx-Exmpt Bd F-1 has 1265 securities in its portfolio. The top 10 holdings constitute 6.7% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

American Funds Shrt-Term Tx-Exmpt Bd F-1 is part of the Fixed Income global asset class and is within the Municipal Bond fund group. American Funds Shrt-Term Tx-Exmpt Bd F-1 has 0.1% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0%. There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 98.5% (98.4% domestic bond, 0.1% foreign bond and 0.0% convertible bond). American Funds Shrt-Term Tx-Exmpt Bd F-1 has 1.5% of the portfolio in cash.

Assets Under Management

The fund has $3 million in total assets, which is below the $633 million average for the Muni National Short category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

FSTTX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The American Funds Shrt-Term Tx-Exmpt Bd F-1 expense ratio is above average compared to funds in the Muni National Short category. American Funds Shrt-Term Tx-Exmpt Bd F-1 has an expense ratio of 0.62%, which is 7% higher than its category average, making the fund expense ratio grade a D. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. American Funds Shrt-Term Tx-Exmpt Bd F-1 has a portfolio turnover rate of 56%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 51% for the Muni National Short category.

Recently, in the month of July 2026, American Funds Shrt-Term Tx-Exmpt Bd F-1 returned -0.4%, which earned it a grade of C, as the Muni National Short category had an average return of -0.5%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

American Funds Shrt-Term Tx-Exmpt Bd F-1 has a trailing yield of 2.56%, which is below the 2.78% category average. The fund normally distributes its income monthly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

American Funds Shrt-Term Tx-Exmpt Bd F-1 Grades

Year to date, the fund has returned 0.7%, 0.1 percentage points worse than the category, which translates into a grade of D. The fund has returned 2.4% over the past year (grade of D), 3.1% over the past three years (grade of D) and 1.3% per year over the past five years (grade of D) and 1.3% per year over the past 10 years (grade of D).

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