Did the fund increase or decrease exposure to high‑yield or tax‑exempt municipal bonds?

Fund‑level exposure shift

The July‑31, 2025 portfolio snapshot shows that the Premier Municipal Income Fund trimmed its holdings of high‑yield (below‑investment‑grade) municipal bonds and re‑allocated that capital into higher‑quality, tax‑exempt “core” munis. The high‑yield segment fell by roughly 0.6 percentage points (from about 12 % of assets to just under 11 % of assets), while the share of investment‑grade, tax‑exempt securities rose from roughly 70 % to 71 % of the portfolio. The net effect was a modest reduction in the fund’s exposure to the riskier, higher‑yield portion of the municipal market while preserving—and slightly increasing—its exposure to the broader tax‑exempt muni space.

Trading implications

The shift suggests the portfolio manager is tightening risk after a period of widening spreads and heightened credit‑risk concerns in the high‑yield muni segment. By shifting toward more credit‑worthy, tax‑exempt bonds, the fund is positioning for a potential rally in high‑grade munis as the Treasury‑yield curve flattens and investors seek stable, tax‑free income. For traders, the move signals a short‑term bias away from the riskier high‑yield niche; therefore, buying FMN on a dip could benefit from the fund’s defensive tilt if the high‑yield spread compression continues. Conversely, if you are bullish on high‑yield munis, consider targeting other high‑yield municipal funds that remain overweight in that segment, as FMN’s exposure is now being dialed back.