First Eagle Investments to Expand Its High Yield Municipal Credit Team as Total Assets Surpass $3.5 Billion
NEW YORK--(BUSINESS WIRE)--Sep 23, 2024--
First Eagle Investments (“First Eagle”) is pleased to announce the upcoming additions of three seasoned research professionals to its High Yield Municipal Credit team, whose strong investment performance has attracted significant inflows and driven total assets in the First Eagle High Yield Municipal Fund (A Shares: FEHAX; I Shares: FEHIX; C Shares: FEHCX; R6 Shares: FEHRX) above $3.5 billion. Douglas Johnston and Ryan Rosberg will join the team as Managing Directors and Senior Credit Analysts, effective November 18, 2024, while Bridget Young joins the firm today as a Director and Senior Credit Analyst. Johnston and Rosberg will be based in First Eagle’s Chicago office, with Young in New York. All three will report directly to John Miller, Head and Chief Investment Officer of the High Yield Municipal Credit team.
Johnston will bring more than 25 years of industry experience to First Eagle, most recently as a Managing Director and Senior Credit Analyst at Nuveen Asset Management where he covered such high yield bond sectors as basic materials, energy, airports and industrial development revenue bonds. He earned a BA in business and economics from Wheaton College and holds the Chartered Financial Analyst designation. Johnston is an active member of the CFA Institute, the CFA Society of Chicago, the National Federation of Municipal Analysts and the Chicago Municipal Analysts Society.
Rosberg will join the firm after a 17-year tenure at Nuveen Asset Management where he, like Johnston, was a Managing Director and Senior Credit Analyst. Rosberg has industry-recognized expertise in land-secured municipal bonds as well as public transportation bonds, including toll roads and the Brightline high-speed-rail projects. Earlier in his career, Rosberg served as a fixed income research analyst at McDonnell Investments. He earned a BA in finance from the University of Iowa and holds the Chartered Financial Analyst designation. Rosberg is a member of the CFA Institute, the National Federation of Municipal Analysts and the Chicago Municipal Analysts Society.
With 17 years of experience, Young most recently was an Associate Portfolio Manager of Leveraged Credit at Lord Abbett, where she previously served as a municipal research analyst covering state and local governments, utilities, charter schools, senior living and tobacco bonds. Before joining Lord Abbett, she was an associate at Morgan Stanley on the municipal lending team. Young holds a master’s in public administration from New York University’s Robert F. Wagner School of Public Service.
“We look forward to welcoming Doug, Ryan and Bridget, whose extensive experience and deep analytical expertise will be invaluable as we continue to enhance the High Yield Municipal Credit team’s ability to meet the evolving needs of our clients,” said Miller. “Their combined strengths in credit analysis will support our efforts to identify underrated and undervalued securities in the large and often inefficient muni bond market, further bolstering our active credit selection process and ability to generate attractive tax-exempt income for our growing client base.”
“I want to congratulate John and the First Eagle High Yield Municipal Credit team for their thoughtful approach to building such a senior, well-known, collaborative group,” said Carl Katerndahl, Chief Operating Officer of the High Yield Municipal Credit team. “The team’s expertise and esprit de corps both have been key factors in the High Yield Municipal Fund’s strong performance and growth to date, and the addition of Doug, Ryan and Bridget will reinforce our capabilities in support of the firm’s strategic objectives.”
The First Eagle High Yield Municipal Fund (I Shares: FEHIX) had a distribution yield of 5.52% as of August 31, 2024, and has outperformed its benchmark by 5.62% on a total-return basis year to date, placing it in the top 1% of the Morningstar High Yield Muni category. The 30-day SEC yield of the Fund (I Shares) was 4.27% as of August 31, 2024.*
First Eagle’s High Yield Municipal Credit platform currently consists of the First Eagle High Yield Municipal Fund (A Shares: FEHAX; I Shares: FEHIX; C Shares: FEHCX; R6 Shares: FEHRX) and the First Eagle Short Duration High Yield Municipal Fund (A Shares: FDUAX; I Shares: FDUIX; R6 Shares: FDURX). Offering long-and short-duration approaches to high yield municipal bond investing, respectively, the two funds provide investors access to tax-exempt income at different parts of the municipal yield curve. They are currently available to mass-affluent and high-net-worth retail investors and institutions in the US through various product structures, including mutual funds and separately managed accounts. First Eagle intends to offer these and potentially other income-focused strategies in additional formats in the future.
First Eagle High Yield Municipal Fund - Average Annual Returns as of Quarter End
Data as of 30-June-2024
| New | 1 | 5 | 10 | Gross | Net | Adjusted | Fund | ||||||||
Class A (FEHAX) w/o load | 8.36% | 13.46% | 4.09% | 3.33% | 1.53% | 1.25% | 0.85% | Jan 3, 2012 | ||||||||
Class A (FEHAX) w/ load | 3.52% | 8.29% | 3.14% | 2.85% | 1.53% | 1.25% | 0.85% | Jan 3, 2012 | ||||||||
Class C (FEHCX) | 6.98% | 11.50% | 3.31% | 2.56% | 2.28% | 2.00% | 1.60% | Jan 3, 2012 | ||||||||
Class I (FEHIX) | 8.48% | 13.57% | 4.36% | 3.61% | 1.28% | 1.00% | 0.60% | Nov 19, 2007 | ||||||||
Class R6 (FEHRX) | 8.78% | 14.06% | 4.44% | - | 1.28% | 1.00% | 0.60% | Mar 1, 2017 | ||||||||
S&P Municipal Yield Index | 3.34% | 7.43% | 2.69% | 4.37% | - | - | - | - |
First Eagle High Yield Municipal Fund - Average Annual Returns as of Month End
Data as of 31-August-2024
| New | 1 | 5 | 10 | Gross | Net | Adjusted | Fund | ||||||||
Class A (FEHAX) w/o load | 11.15% | 14.65% | 4.40% | 3.60% | 1.53% | 1.25% | 0.85% | Jan 3, 2012 | ||||||||
Class A (FEHAX) w/ load | 6.18% | 9.46% | 3.45% | 3.13% | 1.53% | 1.25% | 0.85% | Jan 3, 2012 | ||||||||
Class C (FEHCX) | 9.63% | 12.83% | 3.62% | 2.83% | 2.28% | 2.00% | 1.60% | Jan 3, 2012 | ||||||||
Class I (FEHIX) | 11.32% | 14.91% | 4.67% | 3.88% | 1.28% | 1.00% | 0.60% | Nov 19, 2007 | ||||||||
Class R6 (FEHRX) | 11.62% | 15.26% | 4.75% | - | 1.28% | 1.00% | 0.60% | Mar 1, 2017 | ||||||||
S&P Municipal Yield Index | 5.43% | 10.44% | 2.51% | 4.26% | - | - | - | - |
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. |
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. |
* 30-day SEC Yield is a standard yield calculation developed by the Securities and Exchange Commission (SEC) that allows for fairer comparisons of bond funds. It is based on the most recent 30-day period covered by the fund’s filings with the SEC. The yield figure reflects the dividends and interest earned during the period, after the deduction of the fund’s expenses. This is also referred to as the “standardized yield.” The number is then annualized. This yield does not necessarily reflect income actually earned and distributed by the Fund, and therefore may not be correlated with dividends and distributions paid. Had fees not been waived and or/expenses reimbursed, the SEC Yield would have been lower. |
* 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 [month-end] 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. |
S&P Municipal Yield Index measures the performance of high yield and investment grade municipal bonds. Index constituents are market value-weighted and adjusted for credit rating and concentration limits. Indices are unmanaged and do not incur management fees or other operating expenses. One cannot invest directly in an index. 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. |
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 June 30, 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.
The First Eagle High Yield Municipal Fund was known as the First Eagle High Income Fund prior to December 27, 2023
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.
*High-Yield Muni Category
High yield muni portfolios invest at least 50% of assets in high-income municipal securities that are not rated or that are rated by a major agency such as Standard & Poor's or Moody's at the level of BBB (considered speculative in the municipal industry) and below.
First Eagle High Yield Municipal Fund: The Morningstar percentile ranking for the First Eagle High Yield Municipal Fund was derived using the total return of the performance figure associated with its MTD, QTD, and YTD periods, as of 6/30/2024. Morningstar percentile rankings were: 14% for the Month-to-Date (31/194), 1% for the Quarter-to-Date (3/194), and 1% for the Year-to-Date (2/188) periods when compared against the High Yield Muni Bond category.
The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100.
© 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
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.
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CONTACT: First Eagle Investments
Pholida Barclay
212-698-3208
pholida.barclay@firsteagle.comProsek Partners
Bea Broderick
857-301-6949
pro-firsteagle@prosek.com
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SOURCE: First Eagle Investments
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