Fund Description

The fund invests at least 80% of net assets (plus borrowings for investment purposes) in securities whose income is exempt from regular federal individual and, as applicable, state income tax, primarily municipal bonds, municipal notes, interests in municipal leases, and tax-exempt commercial paper. In complying with its 80% investment policy, the fund may invest in derivatives and other instruments that have economic characteristics similar to the investments counted toward that policy. It will not invest in municipal securities subject to the federal AMT and, under normal market conditions, the fund will invest at least 80% of its net assets (plus borrowings for investment purposes) in AMT-free municipal securities and related instruments. Most of the securities the fund buys are investment-grade, although it can invest as much as 25% of its total assets in below-investment-grade securities and may acquire securities that are in default. It may use leverage through inverse floaters, reverse repurchase agreements, and borrowing, and may invest up to 25% each in tobacco settlement and appropriation-backed tobacco bonds.