N-CSR 1 form17931ann.htm EDGAR HTML

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

 

 

 

 

811-2677

 

(Investment Company Act File Number)

 

Federated Hermes Municipal Bond Fund, Inc.

_______________________________________________________________

 

(Exact Name of Registrant as Specified in Charter)

 

 

 

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, Pennsylvania 15086-7561

(Address of Principal Executive Offices)

 

 

(412) 288-1900

(Registrant's Telephone Number)

 

 

Peter J. Germain, Esquire

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

 

 

 

 

 

 

Date of Fiscal Year End: 03/31/21

 

 

Date of Reporting Period: 03/31/21

 

 

 

 

 

 

 

 

 

Item 1.Reports to Stockholders

 

Annual Shareholder Report
March 31, 2021
Share Class | Ticker
A | LMSFX
B | LMSBX
C | LMSCX
 
F | LMFFX
Institutional  | LMBIX
 

Federated Hermes Municipal Bond Fund, Inc.
(formerly, Federated Municipal Bond Fund, Inc.)
Fund Established 1976

Dear Valued Shareholder,
I am pleased to present the Annual Shareholder Report for your fund covering the period from April 1, 2020 through March 31, 2021.
While the pandemic continues to present challenges to our lives, families and businesses, I want you to know that Federated Hermes remains dedicated to helping you successfully navigate the markets ahead. You can count on us for the insights, investment management knowledge and client service that you have come to expect. Please refer to our website, FederatedInvestors.com, for timely updates on this and other economic and market matters.
Thank you for investing with us. I hope you find this information useful and look forward to keeping you informed.
Sincerely,
J. Christopher Donahue, President

Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee

Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes Municipal Bond Fund, Inc. (the “Fund”), based on net asset value for the 12-month reporting period ended March 31, 2021, was 5.95% for the Class A Shares, 5.16% for the Class B Shares, 5.16% for the Class C Shares, 6.06% for the Class F Shares and 6.23% for the Institutional Shares. The 6.23% total return for the Institutional Shares for the reporting period consisted of 2.58% of tax-exempt dividends and reinvestments and 3.65% appreciation in the net asset value of the shares.1 The total return for the S&P Municipal Bond Index (SPMBI),2 the Fund’s broad-based securities market index, was 5.29% during the same period. The total return for the S&P Municipal Bond 3-Year Plus Index (SPMBI3)3 was 6.00% during the reporting period. The total return of the Morningstar Municipal National Long Funds Average (MNLFA),4 a peer group average for the Fund, was 7.30%, during the same period. The Fund’s and MNLFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the SPMBI or SPMBI3.
During the reporting period, the most significant factors affecting the Fund’s performance relative to the SPMBI3 were: (a) the effective duration of its portfolio (which indicates the portfolio’s sensitivity to changes in interest rates);5,6 (b) the allocation of the portfolio among securities of similar issuers (referred to as “sectors”); and (c) the credit quality (which is measured by credit rating) of portfolio securities.7
The following discussion focuses on the performance of the Fund’s Institutional Shares relative to the SPMBI3.
MARKET OVERVIEW
During the reporting period, 10-year Treasury yields increased from a low of 0.51% in August 2020 to a high of 1.74% in March 2021 and averaged 0.872%.
During the reporting period, the Federal Reserve (the “Fed”) had been committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
The pandemic caused tremendous human and economic hardship across the U.S. and around the world. Following a moderation in the pace of the recovery, indicators of economic activity and employment turned up. The sectors most adversely affected by the pandemic remained weak and inflation continued to run below 2 percent. Overall financial conditions remained accommodative, reflecting the Fed’s policy measures to support the economy and the flow of credit to U.S. households and businesses. The path of the U.S. economy will
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depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on economic activity, employment and inflation, and it still poses risks to the economic outlook.
The evolving outlooks for the path of the virus and for fiscal policy were the main drivers of financial markets over the reporting period. Progress on vaccinations had been slower than expected, and the near-term trajectory of the pandemic worsened, weighing on economic activity. However, even with the appearance of new strains of the virus, market confidence in the ultimate efficacy of the vaccination efforts seemed to remain high. The emergence of a narrow Democratic majority in the Senate bolstered investor expectations for additional fiscal stimulus, prompting upward revisions to forecasts for economic growth this year.
Against this backdrop, longer-term Treasury yields rose notably over the reporting period. Longer-dated real yields were lifted by expectations for improved growth and increased Treasury issuance but remained deeply negative. Measures of inflation compensation increased over the period, with the 5-year, 5-year-forward measure rising to a level of around 2 percent. Overall financial conditions eased further, on net, as the recent rally in risk assets continued. Gains in U.S. equities again centered on cyclical sectors and smaller capitalization firms most sensitive to growth. Credit spreads narrowed further, especially for riskier borrowers.
Recent data pointed to a sharp slowing in foreign economic growth. Amid a further intensification of the pandemic, many foreign governments tightened social-distancing restrictions. In a few countries, the emergence of new and more contagious virus strains was accompanied by a surge in cases and deaths. The increased virus spread and restrictions appeared to take a toll on foreign economic activity, particularly in Europe.
While generally acknowledging that the medium-term outlook for real GDP growth and employment had improved, the markets continued to see the uncertainty surrounding that economic outlook as elevated. The pandemic continued to pose considerable risks to the economic outlook, including risks associated with new virus strains, potential public resistance to vaccination and potential difficulties in the production and distribution of vaccines. With regard to upside risks, there remained the possibility that fiscal policy could turn out to be more expansionary than anticipated, that households could display greater willingness to spend out of accumulated savings than expected, or that wide-spread vaccinations and easing of social distancing could result in a more rapid boost to spending and employment than anticipated.
The several fiscal relief packages passed by the federal government over the reporting period provided significant assistance to the municipal market. The $150 billion state and local governments received from the CARES Act’s Coronavirus Relief Fund were meant to be used for coronavirus expense reimbursement rather than as a pure cash flow injection. During the reporting
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period, Municipal issuers also benefited from the $454 billion economic stabilization fundleveraged by the Fedestablished under the CARES Act. Under these provisions, the Fed was allowed, though not required, to purchase municipals directly from issuers, in the secondary market, or to make loans or loan guarantees. It did not provide free, direct funding to municipal issuers. Absent support for the municipal debt market, state and local government budgets would have been further stressed at the most inopportune time, particularly as revenues decline as a result of business closures and rising unemployment.
In our view, the most important and long-awaited development during the reporting period was the passage of the $1.9 trillion American Rescue Plan. It provided an additional boost to the U.S. economy, especially for municipalities. Various municipal sectors received direct financial help, including state and local governments, which received $360 billion. This included $350 billion in direct payments and $10 billion for a Coronavirus Capital Projects Fund. Overall, $300 billion will be allocated for public health, Medicaid, CHIP and schools, $30 billion for transportation and $15 billion for airlines. State and local governments will not be allowed to use the money to lower taxes, nor replenish their pension funds, although with respect to the latter, they might still be able to fund them out of their general accounts. Moreover, from the bondholder point of view, municipalities may use a portion of the funding for pensions, due to their high implied returns (close to 7%), and/or to retire some outstanding debt.
State and local employment, which has been lagging the job recovery in the private sector, also got a much needed boost. Some of the funds will also likely be used for capital expenditure, but municipalities might wait to see if they can get additional federal help in an infrastructure package later this year. Rating agencies have also acknowledged positive credit implications of the American Rescue Plan as issuers with negative credit outlooks, where funding of near-term deficits is a concern, will benefit the most from the package.
The municipal bond market’s technical (supply and demand) position was mostly favorable over the reporting period. The issuance of municipal debt in 2020 had been relatively comparable to previous periods, even though the ability to advance refund existing debt became disallowed. Flows from investors into intermediate, long and high-yield municipal bonds turned significantly negative once the coronavirus and its impact on the world economy became apparent. Municipal fund flows then almost fully recovered as the impacts from the government’s response to the virus were curtailed and federal aid flowed to the municipal market from the U.S. government.
DURATION
As determined at the end of the reporting period, the Fund’s dollar-weighted average duration for the reporting period was 5.09 years. The Fund’s average duration was shorter than the average duration of the SPMBI3 during the
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reporting period. Tax-exempt municipal bond yields decreased moderately over the reporting period. Yields decreased more for bonds with shorter maturities as compared to longer maturity bonds as the yield curve steepened during the reporting period. As a result of the Fund’s favorable yield curve positioning in outperforming maturities of the yield curve relative to the SPMBI3, a modest positive contribution was generated from the yield curve. However, the Fund’s shorter duration position resulted in an overall negative impact on Fund performance from duration over the reporting period.
SeCTOR ALLOCATION
During the reporting period, the Fund’s sector allocations had a negative impact on Fund performance. The Fund’s exposure relative to the SPMBI3 in hospitals and industrial development revenue municipal bonds added positive excess return due to the outperformance of these sectors. The Fund generated negative excess returns due to its overweight position in underperforming sectors such as public power and higher education debt relative to the SPMBI3.
credit QUALITY8
During the reporting period, investor appetite for lower credit quality debt increased as economic realities adjusted to the impact of the U.S. government’s massive fiscal stimulus on employment and GDP. This resulted in outperformance of bonds rated “A,” “BBB” and below investment-grade (or unrated bonds of comparable quality) relative to bonds rated in the higher rating categories (or unrated bonds of comparable quality) of the SPMBI3. The Fund’s exposure to “A,” “BBB” and noninvestment-grade debt added positive excess return as these securities experienced spread narrowing versus higher quality debt over the reporting period. The Fund’s underweight position, relative to the SPMBI3, in “AAA” and “AA” (or unrated comparable quality) debt during the reporting period also had a positive impact on the Fund’s performance as bonds in this rating category underperformed the SPMBI3.
1
Income may be subject to state and local taxes. The investment adviser (“Adviser”) may also invest the Fund’s assets in securities whose interest (while exempt from the federal regular income tax) may be subject to (or may be a specific preference item for purposes of) the federal alternative minimum income tax (AMT) for individuals.
2
Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the SPMBI.
3
Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the SPMBI3.
4
Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the MNLFA.
5
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations. For purposes of this Management’s Discussion of Fund Performance, duration is determined using a third-party analytical system.
6
Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices.
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7
Credit ratings pertain only to the securities in the portfolio and do not protect Fund shares against market risk.
8
Investment-grade securities and noninvestment-grade securities may either be: (a) rated by a nationally recognized statistical ratings organization or rating agency; or (b) unrated securities that the Fund’s Adviser believes are of comparable quality. The rating agencies that provided the ratings for rated securities include Standard and Poor’s, Moody’s Investor Services, Inc. and Fitch Rating Service. When ratings vary, the highest rating is used. Credit ratings of “AA” or better are considered to be high credit quality; credit ratings of “A” are considered high or medium/good quality; credit ratings of “BBB” are considered to be medium/good credit quality and the lowest category of investment-grade securities; credit ratings of “BB” and below are lower-rated, noninvestment-grade securities or junk bonds; and credit ratings of “CCC” or below are noninvestment-grade securities that have high default risk. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund’s investment parameters. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default.
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FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in the Federated Hermes Municipal Bond Fund, Inc. (the “Fund”) from March 31, 2011 to March 31, 2021, compared to the S&P Municipal Bond Index (SPMBI),2 S&P Municipal Bond 3-Year Plus Index (SPMBI3) 3 and the Morningstar Municipal National Long Funds Average (MNLFA).4 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 Investment
Growth of $10,000 as of March 31, 2021
■ Total returns shown for the A Shares include the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550).
■ Total returns shown for the C Shares include the maximum contingent deferred sales charge of 1.00% as applicable.
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Return table below for the returns of additional classes not shown in the line graph above.
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6

Average Annual Total Returns for the Period Ended 3/31/2021
(returns reflect all applicable sales charges and contingent deferred sales charge as specified below in footnote #1)
 
1 Year
5 Years
10 Years
Class A Shares
1.21%
2.30%
4.00%
Class B Shares
-0.34%
2.08%
3.81%
Class C Shares
4.16%
2.45%
3.65%
Class F Shares
3.96%
3.03%
4.37%
Institutional Shares5
6.23%
3.30%
4.51%
SPMBI
5.29%
3.44%
4.60%
SPMBI3
6.00%
3.89%
5.25%
MNLFA
7.30%
3.55%
4.89%
Performance data quoted represents past performance which is no guarantee of future results. 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. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: For Class A Shares, the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550); for Class B Shares, the maximum contingent deferred sales charge is 5.50% on any redemption less than one year from the purchase date; for Class C Shares, a 1.00% contingent deferred sales charge would be applied to any redemption less than one year from the purchase date; for Class F Shares, the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900) and the maximum contingent deferred sales charge is 1.00% on any redemption less than four years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The SPMBI, SPMBI3 and the MNLFA have been adjusted to reflect reinvestment of dividends on securities in the indexes and average.
2
The SPMBI is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to the AMT. Eligibility criteria for inclusion in the SPMBI include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or a local government or a state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor’s Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The SPMBI is rebalanced monthly. The SPMBI is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance. Unlike the Fund, the SPMBI is unmanaged and is not affected by cash flows. It is not possible to invest directly in this index.
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3
The SPMBI3 represents the portion of the SPMBI composed solely of bonds with remaining maturities of three years or more. The SPMBI3 is not adjusted to reflect sales charges, expenses and other fees that the SEC requires to be reflected in the Fund’s performance. Unlike the Fund, the SPMBI3 is unmanaged and is not affected by cash flows. It is not possible to invest directly in this index.
4
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
5
The Fund’s Institutional Shares commenced operations on July 27, 2017. For the period prior to the commencement of operations of Institutional Shares, the performance information shown for the Fund’s Institutional Shares is for the Class A Shares. The performance of the Class A Shares has not been adjusted to reflect the expenses of the Institutional Shares, since the Institutional Shares have a lower expense ratio than the expense ratio of Class A Shares. The performance of Class A has been adjusted to reflect the absence of sales charges and to remove any voluntary waiver of Fund expenses related to Class A Shares that may have occurred during the periods prior to commencement of operations of the Institutional Shares.
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Portfolio of Investments Summary Table (unaudited)
At March 31, 2021, the Fund’s sector composition1 was as follows:
Sector Composition
Percentage of
Total Net Assets
Hospital
15.4%
Toll Road
12.7%
Airport
7.7%
Public Power
6.5%
General ObligationState
6.5%
Water & Sewer
5.8%
Dedicated Tax
5.4%
General ObligationLocal
5.3%
Refunded
5.1%
General ObligationState Appropriation
3.6%
Other2
25.7%
Derivative Contracts3,4
0.0%
Other Assets and LiabilitiesNet5
0.3%
TOTAL
100%
1
Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. For securities that have been enhanced by a third party guarantor, such as bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. Refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2
For purposes of this table, sector classifications constitute 74.0% of the Fund’s total net assets. Remaining sectors have been aggregated under the designation “Other.”
3
Based upon net unrealized appreciation (depreciation) or value of the derivative contracts as applicable. Derivative contracts may consist of futures, forwards, options and swaps. The impact of a derivative contract on the Fund’s performance may be larger than its unrealized appreciation (depreciation) or value may indicate. In many cases, the notional value or amount of a derivative contract may provide a better indication of the contract’s significance to the portfolio. More complete information regarding the Fund’s direct investment in derivative contracts, including unrealized appreciation (depreciation), value and notional values or amounts of such contracts, can be found in the table at the end of the Portfolio of Investments included in this Report.
4
Represents less than 0.1%.
5
Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities.
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Portfolio of Investments
March 31, 2021
Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—96.8%
 
 
 
Arizona—3.7%
 
$3,000,000
 
Arizona Board of Regents (Arizona State University),
(Series 2016B), 5.000%, 7/1/2047
$3,543,814
500,000
 
Arizona State IDA (Phoenix Children’s Hospital), Hospital
Revenue Bonds (Series 2020A), 4.000%, 2/1/2050
569,386
2,000,000
 
Phoenix, AZ Civic Improvement Corp.Airport System, Junior
Line Airport Revenue Bonds (Series 2019A), 4.000%, 7/1/2044
2,266,868
1,740,000
 
Phoenix, AZ IDA (GreatHearts Academies), Education Facility
Revenue Bonds (Series 2014A), 5.000%, 7/1/2044
1,863,325
2,000,000
 
Salt River Project, AZ Agricultural Improvement & Power District,
Electric System Revenue Bonds (Series 2019A), 5.000%, 1/1/2035
2,600,793
1,000,000
 
Salt River Project, AZ Agricultural Improvement & Power District,
Electric System Revenue Refunding Bonds (Series 2017A),
5.000%, 1/1/2038
1,228,751
 
 
TOTAL
12,072,937
 
 
California—6.8%
 
1,500,000
1
Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge
Revenue Bonds (SIFMA Index Rate Bonds Series 2001A) FRNs,
1.300% (SIFMA 7-day +1.250%), Mandatory Tender 4/1/2027
1,560,360
2,000,000
 
California Health Facilities Financing Authority (Providence
St. Joseph Health), Revenue Bonds (Series 2014B),
5.000%, 10/1/2044
2,277,803
1,000,000
 
California Health Facilities Financing Authority (Stanford Health
Care), Revenue Bonds (Series 2015A), 5.000%, 8/15/2054
1,158,096
1,140,000
 
Los Angeles Department of Water & Power (Los Angeles, CA
Department of Water & Power (Electric/Power System)), Power
System Revenue Bonds (Series 2020A), 5.000%, 7/1/2029
1,505,044
2,000,000
 
Los Angeles Department of Water & Power (Los Angeles, CA
Department of Water & Power (Water Works/System)), Water
System Revenue Bonds (Series 2013B), 5.000%, 7/1/2033
2,207,913
1,000,000
 
Los Angeles, CA Department of Airports (Los Angeles
International Airport), Subordinate Revenue Bonds
(Series 2018A), 5.000%, 5/15/2044
1,192,496
3,000,000
 
Roseville, CA Natural Gas Financing Authority, Gas Revenue
Bonds (Series 2007), (Bank of America Corp. GTD),
5.000%, 2/15/2025
3,485,718
2,000,000
 
San Diego, CA Unified School District, UT GO Bonds (Election
2012 Series-I), 5.000%, 7/1/2047
2,459,675
2,000,000
 
San Francisco, CA City & County Airport Commission, Second
Series Revenue Bonds (Series 2019A), 5.000%, 5/1/2035
2,484,460
Annual Shareholder Report
10

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
California—continued
 
$2,000,000
 
San Francisco, CA Public Utilities Commission (Water Enterprise),
Water Revenue Bonds (Series 2017 Sub-Series D),
5.000%, 11/1/2034
$2,493,293
1,000,000
 
Transbay Joint Powers Authority, CA, Senior Tax Allocation Bonds
Green Bonds (Series 2020A), 5.000%, 10/1/2045
1,223,290
 
 
TOTAL
22,048,148
 
 
Colorado—4.8%
 
1,000,000
 
Colorado State Health Facilities Authority Revenue
(CommonSpirit Health), Revenue Bonds (Series 2019A-1),
4.000%, 8/1/2037
1,143,444
1,000,000
 
Colorado State Health Facilities Authority Revenue
(CommonSpirit Health), Revenue Bonds (Series 2019A-1),
5.000%, 8/1/2036
1,241,382
1,000,000
 
Denver, CO City & County Department of Aviation (Denver, CO
City & County Airport Authority), Airport System Revenue Bonds
(Series 2018A), 5.000%, 12/1/2048
1,189,407
2,000,000
 
Denver, CO Convention Center Hotel Authority, Senior Revenue
Refunding Bonds (Series 2016), 5.000%, 12/1/2027
2,359,942
2,800,000
 
E-470 Public Highway Authority, CO, Senior Revenue Bonds
(Series 2020A), 5.000%, 9/1/2040
3,131,841
2,500,000
 
Regional Transportation District, CO (Denver Transit Partners
Eagle P3 Project), Private Activity Bonds (Series 2020A),
4.000%, 7/15/2035
2,950,146
3,250,000
 
University of Colorado Hospital Authority, Revenue Bonds
(Series 2012A), 5.000%, 11/15/2036
3,466,103
 
 
TOTAL
15,482,265
 
 
Connecticut—1.7%
 
3,000,000
 
Connecticut State HEFA (Trinity Healthcare Credit Group),
Revenue Bonds (Series 2016CT), 5.000%, 12/1/2045
3,558,986
1,000,000
 
Connecticut State Special Transportation Fund, Special Tax
Obligation Bonds Transportation Infrastructure Purpose
(Series 2018B), 5.000%, 10/1/2036
1,237,141
750,000
 
Connecticut State Special Transportation Fund, Special Tax
Obligation Bonds Transportation Infrastructure Purposes
(Series 2020A), 4.000%, 5/1/2036
873,613
 
 
TOTAL
5,669,740
 
 
District of Columbia—2.3%
 
2,500,000
 
District of Columbia (KIPP DC), Refunding Revenue Bonds
(Series 2017A), 5.000%, 7/1/2048
2,893,504
1,200,000
 
District of Columbia Revenue (District of Columbia International
School), Revenue Bonds (Series 2019), 5.000%, 7/1/2049
1,367,628
1,800,000
 
District of Columbia Revenue (Friendship Public Charter School,
Inc.), Revenue Bonds (Series 2016A), 5.000%, 6/1/2041
2,042,281
Annual Shareholder Report
11

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
District of Columbia—continued
 
$15,000
 
District of Columbia Revenue (Georgetown University), University
Refunding Revenue Bonds (Series 2017), (United States Treasury
PRF 4/1/2027@100), 5.000%, 4/1/2036
$18,687
985,000
 
District of Columbia Revenue (Georgetown University), University
Refunding Revenue Bonds (Series 2017), 5.000%, 4/1/2036
1,156,475
 
 
TOTAL
7,478,575
 
 
Florida—7.8%
 
1,500,000
 
Broward County, FL Airport System, Airport System Revenue
Bonds (Series 2012Q-1), (United States Treasury PRF
10/1/2022@100), 5.000%, 10/1/2037
1,609,090
1,000,000
 
Central Florida Expressway Authority, Senior Lien Revenue
Refunding Bonds (Series 2017), 5.000%, 7/1/2038
1,219,226
1,000,000
 
Florida State Mid-Bay Authority, First Senior Lien Revenue Bonds
(Series 2015A), 5.000%, 10/1/2035
1,140,350
2,000,000
 
Greater Orlando, FL Aviation Authority, Subordinate Airport
Facilities Revenue Bonds (Series 2017A), 5.000%, 10/1/2036
2,393,801
1,000,000
 
Jacksonville, FL (Brooks Rehabilitation), Health Care Facilities
Revenue Bonds (Series 2020), 5.000%, 11/1/2050
1,196,519
1,000,000
 
Miami-Dade County, FL (Miami-Dade County, FL Seaport),
Seaport Revenue Bonds (Series 2013A), 5.750%, 10/1/2030
1,127,915
1,000,000
 
Miami-Dade County, FL (Miami-Dade County, FL Seaport),
Seaport Revenue Bonds (Series 2013A), 5.750%, 10/1/2032
1,127,915
2,000,000
 
Miami-Dade County, FL Aviation, Aviation Revenue Refunding
Bonds (Series 2015A), 5.000%, 10/1/2038
2,322,170
380,000
 
Miami-Dade County, FL Aviation, Aviation Revenue Refunding
Bonds (Series 2020A), 4.000%, 10/1/2041
442,350
2,000,000
 
Miami-Dade County, FL Expressway Authority, Toll System
Refunding Revenue Bonds (Series 2016A), 5.000%, 7/1/2032
2,398,994
1,250,000
 
Miami-Dade County, FL Expressway Authority, Toll System
Revenue Bonds (Series 2010), (Original Issue Yield: 5.100%),
5.000%, 7/1/2040
1,253,352
1,500,000
 
Miami-Dade County, FL HFA (Nicklaus Children’s Hospital),
Hospital Revenue Refunding Bonds (Series 2017),
5.000%, 8/1/2042
1,776,168
1,000,000
 
Miami-Dade County, FL IDA (Doral Academy), Industrial
Development Revenue Bonds (Series 2017), 5.000%, 1/15/2048
1,118,886
2,875,000
 
Miami-Dade County, FL Transit System, Sales Surtax Revenue
Bonds (Series 2012), (United States Treasury PRF 7/1/2022@100),
5.000%, 7/1/2042
3,049,001
1,500,000
 
Tallahassee, FL Energy System, Revenue Refunding Bonds
(Series 2017), 5.000%, 10/1/2036
1,771,814
Annual Shareholder Report
12

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Florida—continued
 
$1,000,000
 
Tampa, FL (H. Lee Moffitt Cancer Center), Hospital Revenue
Bonds (Series 2020B), 4.000%, 7/1/2045
$1,127,510
 
 
TOTAL
25,075,061
 
 
Georgia—2.1%
 
3,000,000
 
Atlanta, GA Water & Wastewater, Revenue Refunding Bonds
(Series 2015), 5.000%, 11/1/2040
3,485,645
335,000
 
Geo. L. Smith II Georgia World Congress Center Authority,
Convention Center Hotel First Tier Revenue Bonds
(Series 2021A), 4.000%, 1/1/2054
371,481
3,000,000
1
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2018D) FRNs, (Royal Bank of Canada GTD), 0.907%
(1-month USLIBOR x 0.67 +0.830%), Mandatory
Tender 12/1/2023
3,023,773
 
 
TOTAL
6,880,899
 
 
Illinois—4.9%
 
1,000,000
 
Chicago, IL Board of Education, UT GO Bonds (Series 2021A),
5.000%, 12/1/2040
1,207,533
310,000
 
Chicago, IL O’Hare International Airport, General Airport Senior
Lien Revenue Refunding Bonds (Series 2016B), 5.000%, 1/1/2041
359,519
2,000,000
 
Chicago, IL O’Hare International Airport, Passenger Facility
Charge Revenue Refunding Bonds (Series 2012A),
5.000%, 1/1/2031
2,066,784
1,500,000
 
Chicago, IL Sales Tax, Revenue Bonds (Series 2011A), (United
States Treasury PRF 1/1/2022@100), 5.250%, 1/1/2038
1,557,156
750,000
 
Chicago, IL Water Revenue, Second Lien Water Revenue Bonds
(Series 2014), 5.000%, 11/1/2044
845,979
3,000,000
 
Illinois Finance Authority (Northwestern Memorial Healthcare),
Revenue Bonds (Series 2017A), 5.000%, 7/15/2042
3,611,094
890,000
 
Illinois State, GO Bonds (Series 2017D), 5.000%, 11/1/2028
1,050,053
1,110,000
 
Illinois State, UT GO Bonds (Series 2017D), 5.000%, 11/1/2026
1,307,174
2,000,000
 
Illinois State, UT GO Bonds (Series 2020C), (Original Issue Yield:
4.340%), 4.000%, 10/1/2041
2,183,085
1,000,000
 
Illinois State, UT GO Bonds (Series June 2013), (Original Issue
Yield: 5.280%), 5.250%, 7/1/2028
1,080,437
460,000
 
Illinois State, UT GO Refunding Bonds (Series 2021A),
4.000%, 3/1/2041
504,531
 
 
TOTAL
15,773,345
 
 
Indiana—0.8%
 
1,155,000
 
Indiana Municipal Power Agency, Power Supply System
Refunding Revenue Bonds (Series 2012A), 5.000%, 1/1/2028
1,221,057
Annual Shareholder Report
13

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Indiana—continued
 
$1,300,000
 
Indiana Municipal Power Agency, Power Supply System Revenue
Bonds (Series 2013A), (United States Treasury PRF
7/1/2023@100), 5.250%, 1/1/2030
$1,445,956
 
 
TOTAL
2,667,013
 
 
Massachusetts—3.9%
 
3,000,000
 
Commonwealth of Massachusetts, UT GO Bonds (Series 2018C),
5.250%, 9/1/2043
3,795,192
250,000
 
Massachusetts Development Finance Agency (Southcoast Health
System Obligated Group), Revenue Bonds (Series 2021G),
4.000%, 7/1/2046
286,966
3,000,000
 
Massachusetts Port Authority, Revenue Bonds (Series 2015A),
5.000%, 7/1/2045
3,491,471
2,000,000
 
Massachusetts School Building Authority, Subordinated
Dedicated Sales Tax Revenue Bonds (Series 2018A),
5.250%, 2/15/2048
2,454,205
2,000,000
 
Massachusetts Water Resources Authority, General Revenue
Refunding Bonds (Series 2017C), 5.000%, 8/1/2032
2,484,799
 
 
TOTAL
12,512,633
 
 
Michigan—1.5%
 
1,000,000
 
Detroit, MI, UT GO Bonds (Series 2020), 5.500%, 4/1/2045
1,225,285
2,000,000
 
Michigan Strategic Fund (I-75 Improvement Project), Limited
Obligation Revenue Bonds (Series 2018), 5.000%, 12/31/2043
2,388,339
1,000,000
 
Royal Oak, MI Hospital Finance Authority (Beaumont Health
Credit Group), Refunding Revenue Bonds (Series 2014D),
5.000%, 9/1/2039
1,115,182
 
 
TOTAL
4,728,806
 
 
Mississippi—0.3%
 
940,000
 
Warren County, MS Gulf Opportunity Zone (International Paper
Co.), Gulf Opportunity Zone Bonds (Series 2011A),
5.375%, 12/1/2035
966,414
 
 
Nebraska—0.7%
 
2,000,000
 
Central Plains Energy Project, NE, Gas Project Revenue Bonds
(Project No. 3) (Series 2012), (Original Issue Yield: 5.050%),
(Goldman Sachs Group, Inc. GTD), 5.000%, 9/1/2042
2,123,557
 
 
Nevada—0.9%
 
2,000,000
 
Clark County, NV, Limited Tax GO Detention Center Bonds
(Series 2019), 5.000%, 6/1/2032
2,558,326
305,000
2
Director of the State of Nevada Department of Business and
Industry (Doral Academy of Nevada CS), Charter School Revenue
Bonds (Series 2017A), 5.000%, 7/15/2047
328,162
 
 
TOTAL
2,886,488
Annual Shareholder Report
14

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
New Hampshire—0.5%
 
$100,000
 
National Finance Authority, NH (Covanta Energy Corp.), Resource
Recovery Revenue Refunding Bonds (Series 2020B) TOBs,
3.750%, Mandatory Tender 7/2/2040
$103,284
1,500,000
 
National Finance Authority, NH (Springpoint Senior Living),
Senior Living Revenue Refunding Bonds (Series 2021),
4.000%, 1/1/2051
1,629,298
 
 
TOTAL
1,732,582
 
 
New Jersey—7.1%
 
1,500,000
 
New Jersey EDA (New Jersey State), School Construction Bonds
(Series 2021QQQ), 4.000%, 6/15/2046
1,674,218
155,000
 
New Jersey EDA (New Jersey State), School Facilities
Construction Bonds (Series 2015 WW), (United States Treasury
PRF 6/15/2025@100), 5.250%, 6/15/2040
185,807
2,725,000
 
New Jersey EDA (New Jersey State), School Facilities
Construction Bonds (Series 2015 WW), 5.250%, 6/15/2040
3,103,489
665,000
 
New Jersey EDA (Port Newark Container Terminal LLC), Special
Facilities Revenue and Refunding Bonds (Series 2017),
5.000%, 10/1/2047
752,520
1,250,000
 
New Jersey Health Care Facilities Financing Authority
(RWJ Barnabas Health Obligated Group), Revenue Bonds
(Series 2014A), 5.000%, 7/1/2043
1,411,637
1,500,000
 
New Jersey State Transportation Trust Fund Authority (New
Jersey State), Transportation Program Bonds (Series 2020AA),
4.000%, 6/15/2045
1,676,742
1,500,000
 
New Jersey State Transportation Trust Fund Authority (New
Jersey State), Transportation System Bonds (Series 2018A),
5.000%, 12/15/2035
1,823,295
2,000,000
 
New Jersey Turnpike Authority, Turnpike Revenue Bonds
(Series 2015E), 5.000%, 1/1/2034
2,300,796
1,000,000
 
New Jersey Turnpike Authority, Turnpike Revenue Bonds
(Series 2017A), 5.000%, 1/1/2029
1,217,792
2,000,000
 
Rutgers, The State University of New Jersey, GO Refunding
Bonds (Series 2013J), (United States Treasury PRF
5/1/2023@100), 5.000%, 5/1/2030
2,199,737
850,000
 
South Jersey Transportation Authority, Transportation System
Revenue Bonds (Series 2020A), 5.000%, 11/1/2045
1,052,375
4,700,000
 
Tobacco Settlement Financing Corp., NJ, Tobacco Settlement
Asset-Backed Subordinate Refunding Bonds (Series 2018B),
5.000%, 6/1/2046
5,460,670
 
 
TOTAL
22,859,078
 
 
New Mexico—0.8%
 
2,175,000
 
New Mexico State Hospital Equipment Loan Council
(Presbyterian Healthcare Services), Hospital System Revenue
Bonds (Series 2017A), 5.000%, 8/1/2046
2,587,274
Annual Shareholder Report
15

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
New York—9.1%
 
$1,000,000
 
Hudson Yards Infrastructure Corp., NY, Second Indenture
Revenue Bonds (Series 2017A), 5.000%, 2/15/2045
$1,165,676
2,000,000
 
Long Island Power Authority, NY, Electric System General
Revenue Bonds (Series 2014A), 5.000%, 9/1/2044
2,249,893
480,000
 
Long Island Power Authority, NY, Electric System General
Revenue Bonds (Series 2020A), 4.000%, 9/1/2039
564,692
2,000,000
 
Metropolitan Transportation Authority, NY (MTA Transportation
Revenue), Transportation Revenue Green Bonds (Series 2020C-1),
5.250%, 11/15/2055
2,432,872
1,000,000
 
Metropolitan Transportation Authority, NY (MTA Transportation
Revenue), Transportation Revenue Refunding Bonds
(Series 2017B), 5.000%, 11/15/2024
1,151,068
3,000,000
 
New York City, NY, Transitional Finance Authority, Building Aid
Revenue Bonds (Series 2015S-2), 5.000%, 7/15/2041
3,481,497
3,255,000
 
New York City, NY, UT GO Bonds (Fiscal 2016 Series C),
5.000%, 8/1/2033
3,877,137
300,000
 
New York City, NY, UT GO Bonds (Fiscal 2016 Series E),
5.000%, 8/1/2032
362,846
2,470,000
 
New York Liberty Development Corporation (7 World Trade
Center LLC), Revenue Refunding Bonds (Series 2012 Class 2),
5.000%, 9/15/2043
2,555,683
400,000
 
New York Liberty Development Corporation (7 World Trade
Center LLC), Revenue Refunding Bonds (Series 2012 Class 3),
5.000%, 3/15/2044
415,206
2,000,000
 
New York State Dormitory Authority (New York State Personal
Income Tax Revenue Bond Fund), General Purpose Revenue
Bonds (Series 2016A), 5.000%, 2/15/2043
2,374,167
2,000,000
 
New York State Dormitory Authority (New York State Sales Tax
Revenue Bond Fund), Revenue Bonds (Series 2018C),
5.000%, 3/15/2038
2,447,411
1,000,000
 
New York Transportation Development Corporation (Empire State
Thruway Partners LLC), Exempt Facility Revenue Bonds
(Series 2021), 4.000%, 10/31/2046
1,116,888
825,000
 
New York Transportation Development Corporation (JFK
International Air Terminal LLC), Special Facilities Revenue Bonds
(Series 2020A), 4.000%, 12/1/2039
927,840
1,800,000
 
New York Transportation Development Corporation (JFK
International Air Terminal LLC), Special Facilities Revenue Bonds
(Series 2020C), 4.000%, 12/1/2041
2,007,102
1,930,000
 
Port Authority of New York and New Jersey, Revenue Bonds
(194th Series ), 5.000%, 10/15/2041
2,251,477
 
 
TOTAL
29,381,455
Annual Shareholder Report
16

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
North Carolina—0.7%
 
$1,000,000
 
North Carolina Medical Care Commission (United Methodist
Retirement Homes), Revenue Refunding Bonds (Series 2017A),
5.000%, 10/1/2037
$1,083,064
1,000,000
 
North Carolina Medical Care Commission (United Methodist
Retirement Homes), Revenue Refunding Bonds (Series 2017A),
5.000%, 10/1/2047
1,075,223
 
 
TOTAL
2,158,287
 
 
Ohio—5.6%
 
2,000,000
 
Buckeye Tobacco Settlement Financing Authority, OH, Tobacco
Settlement Asset-Backed Refunding Bonds
(Series 2020B-2 Class 2), 5.000%, 6/1/2055
2,253,220
1,000,000
 
Cincinnati, OH, UT GO Various Purpose Improvement Bonds
(Series 2019), 5.000%, 12/1/2032
1,297,350
3,180,000
 
Cuyahoga County, OH Hospital Authority (MetroHealth System),
Hospital Revenue Bonds (Series 2017), (Original Issue Yield:
5.030%), 5.000%, 2/15/2057
3,612,862
1,500,000
 
Ohio Air Quality Development Authority (Pratt Paper, LLC),
Exempt Facilities Revenue Bonds (Series 2017),
4.500%, 1/15/2048
1,665,175
2,000,000
 
Ohio State Higher Educational Facility Commission (Cleveland
Clinic), Revenue Bonds (Series 2012), (United States Treasury
PRF 1/1/2022@100), 5.000%, 1/1/2038
2,072,515
3,000,000
 
Ohio State Treasurer Private Activity (Portsmouth Gateway Group
LLC), Revenue Bonds (Series 2015), 5.000%, 12/31/2039
3,394,960
1,000,000
 
Ohio State University, Special Purpose General Receipts Bonds
(Series 2013A), 5.000%, 6/1/2038
1,092,397
2,000,000
 
Ohio State, Common Schools UT GO Bonds (Series 2019A),
5.000%, 6/15/2036
2,562,673
 
 
TOTAL
17,951,152
 
 
Oklahoma—1.8%
 
2,000,000
 
Oklahoma Development Finance Authority (OU Medicine),
Hospital Revenue Bonds (Series 2018B), 5.500%, 8/15/2057
2,422,149
2,795,000
 
Oklahoma State Turnpike Authority, Second Senior Revenue
Bonds (Series 2017C), 5.000%, 1/1/2047
3,296,776
 
 
TOTAL
5,718,925
 
 
Oregon—0.4%
 
1,000,000
 
Medford, OR Hospital Facilities Authority (Asante Health System),
Revenue and Refunding Bonds (Series 2020A),
5.000%, 8/15/2050
1,247,914
 
 
Pennsylvania—7.9%
 
1,000,000
 
Allegheny County, PA Sanitation Authority, Sewer Revenue
Bonds (Series 2015), 5.000%, 12/1/2040
1,176,976
Annual Shareholder Report
17

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Pennsylvania—continued
 
$450,000
 
Berks County, PA IDA (Highlands at Wyomissing), Healthcare
Facilities Revenue Bonds (Series 2017A), 5.000%, 5/15/2032
$515,023
500,000
 
Berks County, PA IDA (Highlands at Wyomissing), Healthcare
Facilities Revenue Bonds (Series 2017A), 5.000%, 5/15/2042
556,919
1,500,000
 
Delaware River Joint Toll Bridge Commission, Revenue Bonds
(Series 2017), 5.000%, 7/1/2042
1,808,258
2,000,000
 
Delaware River Port Authority, Revenue Bonds (Series 2013),
5.000%, 1/1/2030
2,246,915
2,000,000
 
Geisinger Authority, PA Health System (Geisinger Health System),
Revenue Refunding Bonds (Series 2017A-1), 5.000%, 2/15/2045
2,358,018
2,000,000
 
Northampton County, PA General Purpose Authority (St. Luke’s
University Health Network), Hospital Revenue Bonds
(Series 2018A), (Original Issue Yield: 4.090%), 4.000%, 8/15/2048
2,209,962
2,970,000
 
Pennsylvania Economic Development Financing Authority
(Pennsylvania Rapid Bridge Replacement), Tax-Exempt Private
Activity Revenue Bonds (Series 2015), 5.000%, 12/31/2034
3,459,792
2,000,000
 
Pennsylvania State Higher Education Facilities Authority
(University of Pennsylvania Health System), 4.000%, 8/15/2042
2,257,287
1,000,000
 
Pennsylvania State Higher Education Facilities Authority
(University of Pennsylvania), Revenue Bonds (Series 2018A),
5.000%, 2/15/2048
1,210,993
2,500,000
 
Pennsylvania State Turnpike Commission, Turnpike Subordinate
Revenue Bonds (Series 2021A), 4.000%, 12/1/2050
2,862,419
2,000,000
 
Pennsylvania State University, Revenue Bonds (Series 2020A),
5.000%, 9/1/2045
2,512,840
2,000,000
 
Philadelphia, PA, GO Bonds (Series 2019B), 5.000%, 2/1/2037
2,518,914
 
 
TOTAL
25,694,316
 
 
Puerto Rico—1.7%
 
2,000,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A), (Original Issue Yield: 5.154%),
5.000%, 7/1/2058
2,202,360
1,000,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A-1), 4.750%, 7/1/2053
1,085,904
2,065,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A-2), 4.784%, 7/1/2058
2,234,547
 
 
TOTAL
5,522,811
 
 
South Carolina—1.4%
 
2,000,000
 
Greenville, SC Health System, Hospital Revenue Bonds
(Series 2014B), 5.000%, 5/1/2034
2,208,589
615,000
 
Greenville, SC Health System, Hospital Revenue Bonds
(Series 2014B), 5.000%, 5/1/2039
676,608
Annual Shareholder Report
18

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
South Carolina—continued
 
$1,500,000
 
South Carolina Jobs-EDA (Prisma Health Obligated Group),
Hospital Revenue Bonds (Series 2018A), 5.000%, 5/1/2048
$1,765,246
 
 
TOTAL
4,650,443
 
 
Tennessee—1.6%
 
1,335,000
 
Metropolitan Government of Nashville & Davidson County, TN
Health & Educational Facilities Board (Vanderbilt University
Medical Center), Revenue Bonds (Series 2016A),
5.000%, 7/1/2046
1,561,818
1,000,000
 
Metropolitan Nashville Tennessee Airport Authority, Subordinate
Airport Revenue Bonds (Series 2019A), 5.000%, 7/1/2054
1,232,755
2,000,000
 
Metropolitan Nashville Tennessee Airport Authority, Subordinate
Airport Revenue Bonds (Series 2019B), 4.000%, 7/1/2054
2,233,532
 
 
TOTAL
5,028,105
 
 
Texas—8.2%
 
1,130,000
 
Central Texas Regional Mobility Authority, Senior Lien Revenue
Bonds (Series 2021B), 5.000%, 1/1/2031
1,480,697
2,225,000
 
Dallas, TX Area Rapid Transit, Senior Lien Sales Tax Revenue
Refunding Bonds (Series 2016A), 5.000%, 12/1/2048
2,597,821
1,250,000
 
Dallas-Fort Worth, TX International Airport, Joint Revenue
Refunding Bonds (Series 2020A), 4.000%, 11/1/2035
1,495,623
2,000,000
 
Harris County, TX Cultural Education Facilities Finance Corp.
(Memorial Hermann Health System), Hospital Revenue Bonds
(Series 2014A), (United States Treasury PRF 12/1/2024@100),
5.000%, 12/1/2029
2,335,907
2,000,000
 
Houston, TX Combined Utility System, First Lien Revenue &
Refunding Bonds (Series 2016B), 4.000%, 11/15/2037
2,286,702
1,000,000
 
Lower Colorado River Authority, TX (LCRA Transmission Services
Corp.), Transmission Contract Refunding Revenue Bonds
(Series 2020A), 5.000%, 5/15/2045
1,243,356
1,180,000
 
Port of Houston Authority, TX, UT GO Refunding Bonds
(Series 2018A), 5.000%, 10/1/2031
1,500,944
1,500,000
 
San Antonio, TX Electric & Gas System, Revenue Refunding
Bonds (New Series 2015), 5.000%, 2/1/2032
1,782,424
2,000,000
 
San Antonio, TX Electric & Gas System, Revenue Refunding
Bonds (Series 2016), 4.000%, 2/1/2034
2,293,026
2,030,000
 
Texas Municipal Gas Acquisition & Supply Corp. I, Gas Supply
Senior Lien Revenue Bonds (Series 2006A), (Bank of America
Corp. GTD), 5.250%, 12/15/2026
2,502,663
3,000,000
 
Texas Private Activity Bonds Surface Transportation Corporation
(LBJ Infrastructure Group LLC), Senior Lien Revenue Refunding
Bonds I-635 Managed Lanes Project (Series 2020A),
4.000%, 12/31/2039
3,417,776
Annual Shareholder Report
19

Principal
Amount
or Shares
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Texas—continued
 
$3,000,000
 
Trinity River Authority Texas Regional Wastewater System,
Revenue Refunding Bonds (Series 2016), 5.000%, 8/1/2026
$3,686,220
 
 
TOTAL
26,623,159
 
 
Utah—0.7%
 
2,000,000
 
Salt Lake City, UT Airport Revenue, Airport Revenue Bonds
(Series 2018A), 5.000%, 7/1/2048
2,374,085
 
 
Virginia—1.0%
 
1,200,000
 
Chesapeake Bay Bridge & Tunnel District, VA, First Tier General
Resolution Revenue Bonds (Series 2016), 5.000%, 7/1/2051
1,373,572
1,500,000
 
Hampton Roads, VA Sanitation District, Subordinate Wastewater
Revenue Bonds (Series 2016A), (United States Treasury
PRF 8/1/2026@100), 5.000%, 8/1/2043
1,843,427
 
 
TOTAL
3,216,999
 
 
Washington—4.3%
 
2,000,000
 
Port of Seattle, WA Revenue, Intermediate Lien Revenue Bonds
(Series 2018A), 5.000%, 5/1/2043
2,320,426
1,875,000
1,2
Seattle, WA Municipal Light & Power, Trust Receipts/Certificates
(Series 2019-FG0226A) MUNINVs, 6.401%, 1/1/2046
2,373,710
1,680,000
1,2
Seattle, WA Municipal Light & Power, Trust Receipts/Certificates
(Series 2019-FG0226B) MUNINVs, 6.401%, 1/1/2047
2,123,380
1,250,000
 
Washington State Health Care Facilities Authority (Providence
St. Joseph Health), Health Care Facilities Revenue Bonds
(Series 2014C), 5.000%, 10/1/2044
1,415,793
2,070,000
2
Washington State Housing Finance Commission (Rockwood
Retirement Communities), Nonprofit Housing Revenue &
Refunding Revenue Bonds (Series 2020A), 5.000%, 1/1/2041
2,163,009
3,000,000
 
Washington State, UT GO Bonds (Series 2015A-1),
5.000%, 8/1/2040
3,534,419
 
 
TOTAL
13,930,737
 
 
West Virginia—0.8%
 
2,000,000
 
West Virginia State, GO State Road Bonds (Series 2019A),
5.000%, 12/1/2036
2,556,212
 
 
Wisconsin—1.0%
 
800,000
 
Wisconsin State HEFA (ProHealth Care, Inc.), Revenue Refunding
Bonds (Series 2015), 5.000%, 8/15/2039
893,244
2,000,000
 
Wisconsin State, UT GO Bonds (Series 2018A), 4.000%, 5/1/2034
2,287,110
 
 
TOTAL
3,180,354
 
 
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $293,084,495)
312,779,769
Annual Shareholder Report
20

Principal
Amount
or Shares
 
 
Value
 
1
SHORT-TERM MUNICIPALS—1.9%
 
 
 
Alabama—1.6%
 
$5,000,000
 
West Jefferson, AL IDB Solid Waste Disposal (Alabama Power
Co.), (Series 2008) Daily VRDNs, 0.120%, 4/1/2021
$5,000,000
 
 
Georgia—0.1%
 
250,000
 
Monroe County, GA Development Authority (Florida Power &
Light Co.), (Series 2017) Daily VRDNs, 0.120%, 4/1/2021
250,000
 
 
Michigan—0.1%
 
425,000
 
Michigan State Housing Development Authority: Multi-Family
(Canterbury HouseJackson Limited Dividend Housing
Association Limited Partnership), (Series 2005) Daily VRDNs,
(Federal Home Loan Bank of Indianapolis LOC), 0.090%, 4/1/2021
425,000
 
 
Ohio—0.1%
 
100,000
 
Allen County, OH (Bon Secours Mercy Health), (Series 2010C)
Daily VRDNs, (BMO Harris Bank, N.A. LOC), 0.060%, 4/1/2021
100,000
350,000
 
Ohio State Higher Educational Facility Commission (Cleveland
Clinic), (Series 2008 B-4) Daily VRDNs, (Barclays Bank plc LIQ),
0.050%, 4/1/2021
350,000
 
 
TOTAL
450,000
 
 
TOTAL SHORT-TERM MUNICIPALS
(IDENTIFIED COST $6,125,000)
6,125,000
 
 
EXCHANGE-TRADED FUND—1.0%
 
50,209
 
VanEck Vectors High-Yield Municipal Index ETF
(IDENTIFIED COST $3,012,580)
3,120,490
 
 
TOTAL INVESTMENT IN SECURITIES99.7%
(IDENTIFIED COST $302,222,075)3
322,025,259
 
 
OTHER ASSETS AND LIABILITIES - NET0.3%4
891,056
 
 
TOTAL NET ASSETS100%
$322,916,315
Securities that are subject to the federal alternative minimum tax (AMT) represent 11.1% of the Fund’s portfolio as calculated based upon total market value (unaudited).
At March 31, 2021, the Fund had the following open futures contracts:
Description
Number of
Contracts
Notional
Value
Expiration
Date
Value and
Unrealized
Appreciation
Short Futures
 
 
 
 
5United States Treasury Ultra Long Bond
15
$2,318,906
June 2021
$103,911
Unrealized Appreciation on Futures Contracts is included in “Other Assets and LiabilitiesNet.”
Annual Shareholder Report
21

1
Current rate and current maturity or next reset date shown for floating rate notes and variable rate notes/demand instruments. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.
2
Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or availing of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At March 31, 2021, these restricted securities amounted to $6,988,261, which represented 2.2% of total net assets.
3
The cost of investments for federal tax purposes amounts to $302,219,820.
4
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
5
Non-income-producing security.
Note: The categories of investments are shown as a percentage of total net assets at March 31, 2021.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1quoted prices in active markets for identical securities.
Level 2other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used, as of March 31, 2021, in valuing the Fund’s assets carried at fair value:
Valuation Inputs
 
Level 1
Quoted
Prices
Level 2
Other
Significant
Observable
Inputs
Level 3
Significant
Unobservable
Inputs
Total
Debt Securities:
 
 
 
 
Municipal Bonds
$
$312,779,769
$
$312,779,769
Short-Term Municipals
6,125,000
6,125,000
Exchange-Traded Fund
3,120,490
3,120,490
TOTAL SECURITIES
$3,120,490
$318,904,769
$
$322,025,259
Other Financial Instruments:1
 
 
 
 
Assets
$103,911
$
$
$103,911
TOTAL OTHER
FINANCIAL INSTRUMENTS
$103,911
$
$
$103,911
1
Other financial instruments are futures contracts.
Annual Shareholder Report
22

The following acronym(s) are used throughout this portfolio:
EDA
Economic Development Authority
ETF
Exchange-Traded Fund
FRNs
Floating Rate Notes
GO
General Obligation
GTD
Guaranteed
HEFA
Health and Education Facilities Authority
HFA
Housing Finance Authority
IDA
Industrial Development Authority
IDB
Industrial Development Bond
LIBOR
London Interbank Offered Rate
LIQ
Liquidity Agreement
LOC
Letter of Credit
MUNINVs
Municipal Inverse Floater
PRF
Pre-refunded
SIFMA
Securities Industry and Financial Markets Association
TOBs
Tender Option Bonds
UT
Unlimited Tax
VRDNs
Variable Rate Demand Notes
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
23

Financial HighlightsClass A Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$10.46
$10.45
$10.35
$10.38
$10.68
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.24
0.27
0.29
0.30
0.33
Net realized and unrealized gain (loss)
0.38
0.07
0.15
(0.03)
(0.31)
TOTAL FROM INVESTMENT OPERATIONS
0.62
0.34
0.44
0.27
0.02
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.24)
(0.27)
(0.29)
(0.30)
(0.32)
Distributions from net realized gain
(0.05)
(0.06)
(0.05)
TOTAL DISTRIBUTIONS
(0.29)
(0.33)
(0.34)
(0.30)
(0.32)
Net Asset Value, End of Period
$10.79
$10.46
$10.45
$10.35
$10.38
Total Return2
5.95%
3.22%
4.38%
2.62%
0.13%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.83%4
0.83%4
0.84%4
0.85%
0.87%
Net investment income
2.28%
2.52%
2.84%
2.87%
3.06%
Expense waiver/reimbursement5
0.10%
0.11%
0.12%
0.10%
0.07%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$269,587
$264,084
$276,117
$302,904
$304,271
Portfolio turnover
27%
9%
21%
26%
14%
1
Per share number has been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.83%, 0.83% and 0.84% for the years ended March 31, 2021, 2020 and 2019, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
24

Financial HighlightsClass B Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$10.47
$10.46
$10.36
$10.38
$10.69
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.17
0.19
0.21
0.22
0.24
Net realized and unrealized gain (loss)
0.37
0.07
0.15
(0.02)
(0.32)
TOTAL FROM INVESTMENT OPERATIONS
0.54
0.26
0.36
0.20
(0.08)
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.16)
(0.19)
(0.21)
(0.22)
(0.23)
Distributions from net realized gain
(0.05)
(0.06)
(0.05)
TOTAL DISTRIBUTIONS
(0.21)
(0.25)
(0.26)
(0.22)
(0.23)
Net Asset Value, End of Period
$10.80
$10.47
$10.46
$10.36
$10.38
Total Return2
5.16%
2.45%
3.61%
1.92%
(0.80)%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.58%4
1.58%4
1.59%4
1.62%
1.68%
Net investment income
1.55%
1.78%
2.09%
2.09%
2.25%
Expense waiver/reimbursement5
0.10%
0.11%
0.12%
0.08%
0.01%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$903
$2,303
$3,499
$4,599
$4,061
Portfolio turnover
27%
9%
21%
26%
14%
1
Per share number has been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.58%, 1.58% and 1.59% for the years ended March 31, 2021, 2020 and 2019, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
25

Financial HighlightsClass C Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$10.47
$10.46
$10.35
$10.39
$10.69
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.16
0.19
0.21
0.22
0.24
Net realized and unrealized gain (loss)
0.38
0.07
0.16
(0.04)
(0.31)
TOTAL FROM INVESTMENT OPERATIONS
0.54
0.26
0.37
0.18
(0.07)
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.16)
(0.19)
(0.21)
(0.22)
(0.23)
Distributions from net realized gain
(0.05)
(0.06)
(0.05)
TOTAL DISTRIBUTIONS
(0.21)
(0.25)
(0.26)
(0.22)
(0.23)
Net Asset Value, End of Period
$10.80
$10.47
$10.46
$10.35
$10.39
Total Return2
5.16%
2.45%
3.71%
1.73%
(0.71)%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.58%4
1.58%4
1.59%4
1.62%
1.68%
Net investment income
1.54%
1.77%
2.09%
2.09%
2.25%
Expense waiver/reimbursement5
0.10%
0.11%
0.12%
0.08%
0.01%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$6,103
$8,039
$8,675
$14,188
$17,548
Portfolio turnover
27%
9%
21%
26%
14%
1
Per share number has been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.58%, 1.58% and 1.59% for the years ended March 31, 2021, 2020 and 2019, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
26

Financial HighlightsClass F Shares
(For a Share Outstanding Throughout Each Period)
Year Ended March 31
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$10.45
$10.45
$10.34
$10.37
$10.68
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.24
0.27
0.29
0.30
0.32
Net realized and unrealized gain (loss)
0.39
0.06
0.16
(0.03)
(0.31)
TOTAL FROM INVESTMENT OPERATIONS
0.63
0.33
0.45
0.27
0.01
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.24)
(0.27)
(0.29)
(0.30)
(0.32)
Distributions from net realized gain
(0.05)
(0.06)
(0.05)
TOTAL DISTRIBUTIONS
(0.29)
(0.33)
(0.34)
(0.30)
(0.32)
Net Asset Value, End of Period
$10.79
$10.45
$10.45
$10.34
$10.37
Total Return2
6.06%
3.12%
4.49%
2.62%
0.03%
Ratios to Average Net Assets: