The fund seeks to provide, consistent with prudent portfolio management, the highest level of income exempt from federal and California state income taxes by investing primarily in investment-grade California municipal bonds.

The fund invests at least 80% of its net assets in California municipals. While the fund may buy securities of any maturity, the fund generally seeks longer-term securities.

All investments are subject to market risk, including possible loss of principal. The fund is subject to the risks of fixed-income investing, including interest rate risk and credit risk. Interest rate risk is the decline in bond prices that accompanies a rise in the overall level of interest rates. Credit risk is the chance that any of the fund’s holdings will have their credit ratings downgraded or will default (fail to make scheduled interest or principal payments), potentially reducing the fund’s income level and share price. Long-term bonds are subject to the greatest price swings because the longer the maturity, the greater the price decline when rates rise and the greater the price increase when rates fall. The fund is less diversified than one investing nationally. Some income may be subject to state and local taxes and the federal alternative minimum tax.