SPEAKER: Carl Katerndahl, COO - High Yield Municipal Credit Team | First Eagle

TOPIC: Municipal bonds: Poised for Growth in a Favorable Market

Please join us for our high yield municipal lunch presentation featuring Carl Katerndahl, Chief Operating Officer of the First Eagle High Yield Municipal Credit team. With more than 25 years in the municipal bond industry, Carl will provide his perspectives on the municipal bond market and the opportunities we see ahead.

Topics will include:

Fundamentals & Technical Conditions Favor High Yield Muni’s:

• Following a 50-bps cut, cash is losing its appeal. We started the year with $6.2 Trillion in money market accounts
• Muni supply issuance is + 40% YoY
• Revenue streams are strong
• • Property tax collections are up 7% YoY, Income tax collections up 8% YoY
  • Through fiscal stimulus (CARES Act, Inflation Reduction Act, etc.) municipalities received $1.25 trillion in federal government funding.
• Top Holdings: Charter schools, Retirement communities and Brightline Train project.

• Volatility could easily persist with the recent news in the Middle East, as well as the new leadership in US Gov’t. It’s important to note this for two reasons:
• • HY Munis are 89% correlated to IG Munis. Only 47% correlated to equities
  • Since 1970 speculative Muni default rates over a trailing 12-month scale average 0.97% whereas corporate bonds of the same rating average 4%.

Spotlight 2 Strategies:

First Eagle High Yield Municipal Fund (FEHIX)

• FEHIX Distribution Rate (As of 9/30/24): 5.18%
• Current Portfolio NAV Price Discount (Average Price: $94.64 as of 9/30/24)
• • Team— Managed by John Miller – Veteran municipal bond manager.
  • Size—Flexibility to generate alpha.
  • No Legacy Positions—Fresh capital to put to work.  A “best ideas portfolio” immediately.
  • The Opportunity in HY Muni—Yields are amongst the highest since 2008.

Short Duration High Yield Municipal Fund (FDUIX)

• FDUIX Distribution Rate (As of 9/30/24): 5.10%
• Cash off the sideline’s solution—Replacement for Treasuries, CD’s, & Money Market accounts

Members $35
Nonmembers $45
Students $15

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