First Eagle High Yield Municipal Fund Surpasses $1 Billion in Total Assets

Fund reaches key milestone less than five months after its conversion to a high yield municipal bond strategy

NEW YORK–(BUSINESS WIRE)–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.

Contacts

Media Contacts

First Eagle Investments

Pholida Barclay

212-698-3208

pholida.barclay@firsteagle.com

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