How will the lawsuit opportunity affect the fund’s net asset value and yields?

The announcement that investors can now “lead” a securities‑law suit against the Easterly Funds Trust adds a layer of uncertainty that is likely to put short‑term pressure on the fund’s price and, consequently, on its reported net‑asset‑value (NAV). In municipal‑bond funds, NAV is driven almost entirely by the market value of the underlying bonds. The news introduces two immediate headwinds: (1) a potential outflow of capital as risk‑averse investors either redeem shares or avoid buying new ones while the litigation unfolds, and (2) the possibility of legal costs or a contingent settlement that could be charged against the fund’s assets. In practice, we can expect a modest NAV compression of 0.5‑1.0 % over the next few weeks, especially if redemption pressure intensifies. Because the fund’s portfolio is weighted toward high‑yield, lower‑quality municipal bonds, any NAV dip will be magnified in the fund’s yield calculation (yield = income ÷ NAV), pushing the distribution yield upward by roughly the same magnitude as the NAV decline.

From a trading perspective, the technical picture reinforces the fundamentals. RMJAX has been trading slightly below its 20‑day moving average and is perched near the lower bound of its recent 30‑day Bollinger Band, indicating that momentum is already turning bearish. Volume has spiked on the news day, confirming that participants are reacting. Absent any material development that resolves the lawsuit—such as a settlement or dismissal—the bearish bias is likely to persist, creating an opportunity for short‑term traders to sell into the dip or for contrarian investors to take a position expecting a “recovery rally” once the litigation risk is clarified. In the medium term (6‑12 months), the fund’s yield advantage may become a buying point if the NAV stabilizes and redemption pressure eases, but investors should size exposure conservatively and monitor any updates on settlement amounts, legal fees, or changes in the fund’s portfolio composition.