Fund Description

The fund invests its assets so that normally distributions of annual interest income are exempt from federal regular income tax and, under normal circumstances, seeks to have at least 80% of the income it distributes be federally tax-exempt; this policy may not be changed without shareholder approval. It may invest without limitation in securities whose interest may be subject to, or a preference item for, the federal AMT. It does not limit maturities, targets a dollar-weighted average duration of less than five years, and may adjust duration based on interest-rate outlook. It invests at least a majority in investment-grade securities, may hold up to 49% below investment grade, and has no minimum rating. The securities in which the fund may principally invest include tax-exempt securities such as general obligation bonds, special revenue bonds, private activity bonds, inverse floaters, municipal mortgage-backed securities, variable rate demand instruments and municipal notes; it also may principally invest in derivative contracts (in particular, futures contracts, option contracts and swap contracts) and/or hybrid instruments to implement its strategies, and it also may invest in certain securities or other investments (such as market discount bonds, credit default swaps and other derivative transactions) that will likely cause the fund to realize a limited amount of ordinary income or short-term capital gains.