The Fund seeks to earn the highest level of interest income, exempt from federal income taxes, as is consistent with prudent investment management, preservation of capital, and the quality and maturity characteristics of the Fund.
Under normal market conditions, at least 80% of the income from the Fund will be exempt from federal income tax. The Fund typically invests at least 65% of its net assets in investment grade debt securities. The Fund may invest in a variety of tax-exempt obligations including tax-supported debt, various types of revenue debt, special tax obligations, qualified private activity bonds, municipal leases, and certificates of participation in such investments. The Advisor looks for securities with strong credit quality that are attractively priced in various maturity ranges. There is no upper or lower limit on the Fund's average maturity or average duration. The Fund seeks to avoid investing in tobacco companies.
Investment in mutual funds involves risk, including possible loss of principal invested. You could lose money on your investment in the Fund or the Fund could underperform because of the following risks: the market prices of bonds held by the Fund may fall; individual investments of the Fund may not perform as expected; and/or the Fund's portfolio management practices may not achieve the desired result. Bond funds are subject to interest rate risk and credit risk. When interest rates rise, the value of fixed-income securities will generally fall. In addition, the credit quality of the securities may deteriorate, which could lead to default or bankruptcy of the issuer where the issuer becomes unable to pay its obligations when due. The prices of long-term bonds are more sensitive to changes in interest rates than the prices of short-term bonds. Therefore, in general, long-term bonds have more interest rate risk than short-term bonds. The Fund is nondiversified and may be more volatile than a diversified fund. Some income may be subject to state and local taxes and to the federal alternative minimum tax.