How likely is the class action lawsuit to result in a material settlement or judgment that could affect the fund’s NAV and investor redemption rates?

Likelihood of a material payoff

A class‑action against a municipal‑bond fund is, by definition, a “tail‑risk” event. Most securities‑class actions never generate a payout larger than the administrative costs of the case, and settlements are typically modest (often <$10 million) unless the alleged misconduct is egregious and the fund holds assets in the tens of billions. RMJAX’s balance sheet shows ≈ $1.6 bn in net assets—a settlement that exceeds a few percent of NAV would have to be in the $50‑$80 million range to move the fund’s price. Given the modest size of the claim (investors with “substantial losses”) and the lack of any pending regulatory findings, the probability of a material judgment that meaning‑fully shifts NAV is low (≈10‑15 %).

Potential effect on redemption rates

Even a low‑probability legal outcome can generate short‑term pressure on redemption behaviour. The filing alerts existing investors to the possibility of future cash‑flow needs, which may:

• Prompt a modest uptick in out‑flows over the next 4‑6 weeks as investors with loss‑exposure seek to protect capital.
  
• Trigger heightened redemptions in the fund’s “lead‑security” segment (the securities named in the complaint), squeezing liquidity for those specific holdings and widening the bid‑ask spread on secondary‑market trades.

Trading implications

• Short‑term bias: The negative sentiment (-70) and the legal headline have already pressured RMJAX lower; expect 2‑3 % of the average‑daily volume to be pulled into defensive selling over the next 2‑3 days, especially on the NYSE‑listed ticker.
  
• Risk‑management: Position‑size modestly (≤5 % of risk capital) and consider a tight stop 4‑5 % below the current market price to protect against a sell‑off if redemption‑flow news intensifies.
  
• Long‑run view: If the case proceeds without a substantive judgment, the fund’s NAV will likely revert to its underlying municipal‑bond fundamentals (stable credit‑quality, modest interest‑rate sensitivity). In that scenario, a contrarian buy on dip (≈10‑12 % below 10‑day moving average) could be viable once the initial legal‑risk premium dissipates.
  

In summary, while the lawsuit adds a headline‑risk, the odds of a material settlement that materially dents NAV are limited. The immediate market impact will be a short‑term redemption‑rate uptick and modest sell pressure, but the longer‑term structural fundamentals of the municipal‑bond portfolio remain largely unchanged.