(Bloomberg) — First Eagle Investments plans to launch its third municipal-bond fund under John Miller, the head of its high-yield municipal credit team, according to a filing with US securities regulators.
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First Eagle’s Core Plus Municipal Fund will invest mainly in in higher-quality state and local-government debt but will be permitted to invest as much as 30% of its net assets in junk or unrated securities, according to a Dec. 27 prospectus filed with the Securities and Exchange Commission.
The fund, which may employ leverage, will invest at least 80% of net assets in tax-exempt munis and generally maintain a weighted average maturity of from three to 10 years. It won’t have limits on investing in securities that generate income taxable to shareholders subject to the federal alternative minimum tax.
Pholida Barclay, a First Eagle spokeswoman, declined to comment.
Miller joined First Eagle Investments in January after nearly three decades at Nuveen. Investors plowed almost $4.4 billion into his First Eagle High Yield Municipal Fund this year through November, or almost a third of the cash that they added to riskier muni-bond funds, according to Morningstar Direct data.
The high-yield fund, which has returned 11.5% year-to-date, first among high-yield muni funds, currently has about $5 billion in assets, data compiled by Bloomberg show.
First Eagle also has a short-duration high-yield muni fund with about $333 million of assets.
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