Fund reaches key milestone less than five
months after its conversion to a high yield municipal bond
strategy
First Eagle Investments (“First Eagle”) is pleased to announce
that the First Eagle High Yield Municipal Fund (A Shares: FEHAX; I
Shares: FEHIX; C Shares: FEHCX; R6 Shares: FEHRX) (the “Fund”)
recently surpassed $1 billion in total assets. The Fund seeks to
provide high current income exempt from regular federal income
taxes; capital appreciation is a secondary objective when
consistent with the Fund’s primary objective. The Fund had a
distribution yield of 5.70%* as of April 30, 2024, and outperformed
its benchmark by 3.09% on a total return basis year to date,
placing it in the top 1% of the Morningstar High Yield Muni
category.
“We believe the Fund’s popularity with investors is attributable
to our disciplined investment approach, rigorous credit analysis
and attractive income profile,” said John Miller, Head and Chief
Investment Officer of the High Yield Municipal Credit team. “Our
fundamentally driven, value-oriented philosophy seeks underrated
and undervalued credits across what is a vast and fragmented
municipal bond market, often leading us to areas where value can be
more challenging to discern. Base rates continue to be elevated,
and we believe there remain ample opportunities to target bonds
offering attractive yields at compelling valuations.”
“We are thrilled to reach this milestone. This achievement
reinforces our dedication to offering financial professionals and
their clients access to a wide range of compelling investment
solutions, including municipal bonds,” said Frank Riccio, Head of
Sales and Strategic Relationships—US Wealth Solutions. “Surpassing
the $1 billion mark in such a short period of time underscores the
confidence investors have in the team and the Fund’s strategy, and
its potential to access active, long-term tax-advantaged income
streams at levels not seen in many years.”
Miller joined First Eagle on January 2, 2024, to lead its High
Yield Municipal Credit team. The team’s membership today comprises
Carl Katerndahl, Chief Operating Officer; Bryce Pickering, Head of
Municipal Trading; John Suh and Andrew Belsky, Credit Analysts; and
Matthew Tanzer, Trading Analyst. The Fund (which formerly was the
First Eagle High Income Fund) and the First Eagle Short Duration
High Yield Municipal Fund (A Shares: FDUAX; I Shares: FDUIX; R6
Shares: FDURX) are the first products in the two strategies managed
by the team to date. These strategies are currently available to
mass-affluent and high-net-worth retail investors and institutions
in the US through a variety of product structures, including mutual
funds and separately managed accounts. First Eagle plans to make
these and potentially other strategies available in other
structures, including closed end funds, in the future.
Average Annual Returns
Data as of 31-Mar-2024
New Strategy (YTD)¹
1 Year
5 Years
10 Years
Gross Expense Ratio²
Net Expense Ratio
Adjusted Expense
Ratio³
Fund Inception Date4
Class A (FEHAX) w/o load
4.20%
10.38%
3.68%
3.12%
1.53%
1.25%
0.85%
Jan 3, 2012
Class A (FEHAX) w/ load
-0.46%
5.36%
2.72%
2.65%
1.53%
1.25%
0.85%
Jan 3, 2012
Class C (FEHCX)
3.15%
8.57%
2.93%
2.37%
2.28%
2.00%
1.60%
Jan 3, 2012
Class I (FEHIX)
4.37%
10.62%
3.97%
3.42%
1.28%
1.00%
0.60%
Nov 19, 2007
Class R6 (FEHRX)
4.54%
10.80%
4.03%
-
1.28%
1.00%
0.60%
Mar 1, 2017
S&P Municipal Yield Index
1.95%
7.80%
3.00%
4.48%
-
-
-
-
The performance data quoted herein represents past
performance and does not guarantee future results. Market
volatility can dramatically impact the fund’s short term
performance. Current performance may be lower or higher than
figures shown. The investment return and principal value will
fluctuate so that an investor’s shares, when redeemed, may be worth
more or less than their original cost. Past performance data
through the most recent month end is available at
www.firsteagle.com or by calling 800-334-2143. The average annual
returns are historical and reflect changes in share price,
reinvested dividends and are net of expenses. “With sales charge”
performance for class A shares gives effect to the deduction of the
maximum sales charge of 2.50%. The average annual returns for Class
C shares reflect a CDSC (contingent deferred sales charge) of 1.00%
in the year-to-date and first year only. Class I shares require
$1MM minimum investment and are offered without sales charge. Class
R6 shares are offered without sales charge. Operating expenses
reflect the Fund’s total annual operating expenses for the share
class of the Fund’s most current prospectus, including management
fees and other expenses.
1. John Miller started as lead portfolio manager of the Fund
beginning 2-Jan-2024.
2. First Eagle Investment Management, LLC (the ‘‘Adviser’’) has
contractually agreed to waive and/ or reimburse certain fees and
expenses of Classes A, C, I, and R6 so that the total annual
operating expenses (excluding interest charges on any borrowings,
taxes, brokerage commissions and other expenses incurred in placing
orders for the purchase and sale of securities and other investment
instruments, acquired fund fees and expenses, dividend and other
expenses relating to short sales, and extraordinary expenses, if
any) (‘‘annual operating expenses’’) of each class are limited to
0.85%, 1.60%, 0.60%, and 0.60% of average net assets, respectively.
Each of these undertakings lasts until 28-Feb-2025 and may not be
terminated during its term without the consent of the Board of
Trustees. The Fund has agreed that each of Classes A, C, I, and R6
will repay the Adviser for fees and expenses waived or reimbursed
for the class provided that repayment does not cause annual
operating expenses (after the repayment is taken into account) to
exceed the lesser of: (1) 0.85%, 1.60%, 0.60%, and 0.60% of the
class’ average net assets, respectively; or (2) if applicable, the
then-current expense limitations. Any such repayment must be made
within three years after the year in which the Adviser incurred the
expense. The Adviser has contractually agreed to waive its
management fee for the period from 1-Nov-2023 through 30-Apr-2024.
This waiver has the effect of reducing the management fee shown in
the table for the term of the waiver from 0.45% to 0.00%. Any
waiver that is directly attributable to the management fee for the
period from 1-Nov-2023 through 30-Apr-2024 will not be repaid to
the Adviser.
3. The Adjusted Expense Ratio excludes certain fees and
expenses, such as interest expense and fees paid on Fund borrowings
and/or interest and related expenses from inverse floaters. The
Fund is currently in a “ramp-up” period, during which it may not be
fully invested, and certain of these expenses may change over
time.
4. Effective 27-Dec-2023, the Fund changed its name and
principal investment strategy. Performance for the periods prior to
27-Dec-2023 is based on the investment strategy utilized by the
Fund at those times.
* The distribution yield is calculated by multiplying the most
recent monthly distribution by 12 to get an annualized total and
then dividing the result by the Fund’s NAV. It is the Fund’s policy
to make periodic distributions of tax-exempt income, net investment
income and net realized capital gains, if any. Unless you elect
otherwise, such distributions to you will be reinvested in
additional shares of the same share class of the Fund at net asset
value calculated as of the payment date.
About First Eagle Investments
First Eagle Investments is an independent, privately owned
investment management firm headquartered in New York with
approximately $138 billion in assets under management as of March
31, 2024.* Dedicated to providing prudent stewardship of client
assets, the firm focuses on active, fundamental and
benchmark-agnostic investing, with a strong emphasis on downside
mitigation. With a heritage dating back to 1864, First Eagle
strives to help clients avoid permanent impairment of capital and
earn attractive returns through widely varied economic cycles. The
firm’s investment capabilities include equity, fixed income,
alternative credit and multi-asset strategies. For more
information, please visit www.firsteagle.com.
* The total AUM represents the combined AUM of (i) First Eagle
Investment Management, LLC, (ii) its subsidiary investment
advisers, First Eagle Separate Account Management, LLC, First Eagle
Alternative Credit (“FEAC”) and Napier Park Global Capital (“Napier
Park”), and (iii) Regatta Loan Management LLC, an advisory
affiliate of Napier Park. The total AUM includes $1.7 billion of
committed and other non-fee-paying capital from FEAC, and $1.8
billion of committed and other non-fee-paying capital from Napier
Park.
Risk Disclosures:
First Eagle High Yield Municipal Fund
The transition of the First Eagle High Yield Municipal Fund (the
“Fund”) from the First Eagle High Income Fund was effected on or
about December 27, 2023. There continues to be increased
operational risks associated with the transition, during which the
Fund has acquired new and additional trading and counterparty
relationships, new and additional borrowing and leverage
arrangements, and new and additional capabilities for the
management of derivatives, and may require more. Beyond the
inherent risks of transition and associated complexity, because
some, but not all of the required or desirable operational
capabilities and investment and counterparty arrangements were
fully implemented prior to the effective date of the transition,
until such time as that occurs, the Fund’s flexibility to fully
implement its new objective and strategies may continue to be
limited during the transition period.
During the transition period, it is expected that the Fund will
not be as invested in income-producing securities that are exempt
from regular federal income taxes as will be the case once the
transition is complete. As a result, a higher percentage of the
Fund’s dividends are expected to be ordinary dividends rather than
“exempt-interest dividends” during the transitional phase.
Funds that invest in bonds are subject to interest-rate risk and
can lose principal value when interest rates rise, while they
typically increase their principal values when interest rates
decline. Bonds are also subject to credit risk, in which the bond
issuer may fail to pay interest and principal in a timely manner,
or that negative perception of the issuer’s ability to make such
payments may cause the price of that bond to decline.
The Fund may invest in high yield, fixed income securities that,
at the time of purchase, are non-investment grade. High yield,
lower rated securities involve greater price volatility and present
greater risks than high rated fixed income securities. High yield
securities are rated lower than investment-grade securities because
there is a greater possibility that the issuer may be unable to
make interest and principal payments on those securities. High
yield securities involve greater risk than higher rated securities
and portfolios that invest in them may be subject to greater levels
of credit and liquidity risk than portfolios that do not.
Municipal bonds are subject to credit risk, interest rate risk,
liquidity risk, and call risk. However, the obligations of some
municipal issuers may not be enforceable through the exercise of
traditional creditors’ rights. The reorganization under federal
bankruptcy laws of a municipal bond issuer may result in the bonds
being cancelled without payment or repaid only in part, or in
delays in collecting principal and interest.
All investments involve the risk of loss of principal.
Diversification does not guarantee investment returns and does
not eliminate the risk of loss.
First Eagle Short Duration High Yield Municipal Fund
Risks:
The First Eagle Short Duration High Yield Municipal Fund (“The
Fund”) is new and may not be successful under all future market
conditions. The Fund may not attract sufficient assets to achieve
investment, trading or other efficiencies.
Funds that invest in bonds are subject to interest-rate risk and
can lose principal value when interest rates rise, while they
typically increase their principal values when interest rates
decline. Bonds are also subject to credit risk, in which the bond
issuer may fail to pay interest and principal in a timely manner,
or that negative perception of the issuer’s ability to make such
payments may cause the price of that bond to decline.
The Fund may invest in high yield, fixed income securities that,
at the time of purchase, are non-investment grade. High yield,
lower rated securities involve greater price volatility and present
greater risks than high rated fixed income securities. High yield
securities are rated lower than investment-grade securities because
there is a greater possibility that the issuer may be unable to
make interest and principal payments on those securities. High
yield securities involve greater risk than higher rated securities
and portfolios that invest in them may be subject to greater levels
of credit and liquidity risk than portfolios that do not.
Municipal bonds are subject to credit risk, interest rate risk,
liquidity risk, and call risk. However, the obligations of some
municipal issuers may not be enforceable through the exercise of
traditional creditors’ rights. The reorganization under federal
bankruptcy laws of a municipal bond issuer may result in the bonds
being cancelled without payment or repaid only in part, or in
delays in collecting principal and interest.
The information is not intended to provide and should not be
relied on for accounting or tax advice. Any tax information
presented is not intended to constitute an analysis of all tax
considerations.
The Fund intends to declare income dividends daily and
distribute them monthly at rates intended to maintain a more stable
level of distributions than would result from paying out amounts
solely based on current net investment income by paying out less
than all of its net investment income or paying out undistributed
income from prior months (with any potential remaining deficiencies
characterized as a return of capital at year end). To date, the
distribution yield has only been derived from the Fund’s net
investment income and has not included borrowed funds or a return
of capital. The distributions might not be made in equal amounts,
and one month’s distribution may be larger than another.
Distribution yield presented excludes any special dividends and
indicates the annual yield received if the most recent monthly
distribution paid (for each class) was the same for an entire year.
The yield represents a distribution and does not represent the
total return of the Fund. Because the Distribution Yield is
annualized from a single month’s distribution, investors would not
necessarily receive this yield amount in a given year. The yield is
calculated by annualizing the most recent monthly distribution paid
for each class and dividing it by that class’s NAV on the last day
of the month.
Investors should consider investment objectives, risks,
charges and expenses carefully before investing. The prospectus and
summary prospectus contain this and other information about the
Funds and may be viewed at www.firsteagle.com. You may also request
printed copies by calling us at 800-747-2008. Please read our
prospectus carefully before investing.
Investments are not FDIC insured or bank guaranteed and may
lose value.
FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose
broker-dealer, distributes certain First Eagle products. FEFD does
not provide services to any investor, but rather provides services
to its First Eagle affiliates. As such, when FEFD presents a fund,
strategy, or other product to a prospective investor, FEFD and its
representatives do not determine whether an investment in the fund,
strategy or other product is in the best interests of, or is
otherwise beneficial or suitable for, the investor. No statement by
FEFD should be construed as a recommendation. Investors should
exercise their own judgment and/or consult with a financial
professional to determine whether it is advisable for the investor
to invest in any First Eagle fund, strategy, or product.
First Eagle Investments is the brand name for First Eagle
Investment Management, LLC and its subsidiary investment
advisers.
The First Eagle Funds are offered by FEF Distributors,
LLC, a subsidiary of First Eagle Investment Management, LLC,
which provides advisory services.
© 2024 First Eagle Investment Management, LLC. All rights
reserved.
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Media Contacts First Eagle Investments Pholida Barclay
212-698-3208 pholida.barclay@firsteagle.com
Prosek Partners Bea Broderick 732-245-0204
pro-firsteagle@prosek.com