A High-Quality Municipal Bond Portfolio with Low Interest-Rate Exposure

Thornburg Low Duration Municipal Fund is a portfolio of short-term, high-quality municipal bonds, with low interest-rate exposure. The portfolio provides a home to municipal bond investors who may have a limited time horizon.

Working Photo“The fund offers two great advantages: it aims for a very stable net asset value, making it attractive for those with a short investment horizon, and it’s positioned to quickly take advantage of any increases in short-term interest rates.”

– Nicholos Venditti

A Short-Term Ladder

Active laddering is one means by which we mitigate some of the forms of risk inherent in bond investing. This portfolio invests in maturities on the short end of the yield curve.

Investing in each year of the ladder gives us a predictable source of organic cash flows for reinvestment in every environment.

Stable Net Asset Value

The fund is designed to have a relatively stable net asset value (NAV), for investors with a shorter time horizon.

It’s an investment-grade portfolio, so that credit risk (and the risk of higher price fluctuations that may accompany lower-quality bonds) is kept to a moderate level. Of course, many factors contribute to price fluctuation, including market forces and a fund’s structure.

Any potential price fluctuation due to higher short-term rates should—given the short term of Low Duration Municipal Fund’s laddered structure—be mitigated quickly as bonds mature and are replaced.

Positioned to Take Advantage of Short-Term Rate Increases

The municipal bond markets typically have a large supply of floating-rate bonds whose rates reset at relatively short intervals. As the Federal Reserve gradually raises short-term rates, these bonds will reflect the higher rates almost immediately, and because they are floating-rate instruments, without a price decline.

This should be the first Thornburg municipal portfolio to capture the benefits of higher short rates.

It’s important for investors to match their investment horizon to the duration of the strategy in which they’re invested, and to diversify tax-exempt assets across the yield curve.

This is why Thornburg offers a range of strategies—from Low Duration Municipal Fund on the short end to Strategic Municipal Income Fund on the long end—to provide a home to match every time horizon.

Important Information
Before investing, carefully consider the Fund’s investment goals, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, contact your financial advisor or visit our literature center. Read them carefully before investing.

Investments carry risks, including possible loss of principal. Portfolios investing in bonds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds. The value of bonds will fluctuate relative to changes in interest rates, decreasing when interest rates rise. Unlike bonds, bond funds have ongoing fees and expenses. Investments in the Fund are not FDIC insured, nor are they bank deposits or guaranteed by a bank or any other entity.

Credit quality ratings for Thornburg’s municipal portfolios used the highest rating available from either S&P Global Ratings or Moody’s Investors Service.

A bond credit rating assesses the financial ability of a debt issuer to make timely payments of principal and interest. Ratings of AAA (the highest), AA, A, and BBB are investment-grade quality. Ratings of BB, B, CCC, CC, C and D (the lowest) are considered below investment grade, speculative grade, or junk bonds.

Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Income earned from municipal bonds is exempt from regular federal and in some cases, state and local income tax. Income may be subject to the alternative minimum tax (AMT).

The laddering strategy does not assure or guarantee better performance than a non-laddered portfolio and cannot eliminate the risk of investment losses.

Class I shares may not be available to all investors. Minimum investments for the I share class may be higher than those for other classes.

There is no guarantee that the Fund will meet its investment objectives.

Please see our glossary for a definition of terms.

Thornburg mutual funds are distributed by Thornburg Securities Corporation.

Thornburg Investment Management, Inc. mutual funds are sold through investment professionals including investment advisors, brokerage firms, bank trust departments, trust companies and certain other financial intermediaries. Thornburg Securities Corporation (TSC) does not act as broker of record for investors.