NEW YORK, June 25, 2018 /PRNewswire/ -- Neuberger Berman, a private, independent, employee-owned investment manager, announced changes to introduce the Neuberger Berman Municipal Impact Fund (ticker: NMIIX, NIMAX, NIMCX) ("Fund"). Neuberger Berman is excited about the municipal impact sector space and believes that material environmental, social and governance characteristics can be important drivers of long-term investment returns from both an opportunity and a risk mitigation perspective.
"For many of our clients, making investments that seek a positive social and environmental impact is an important consideration in conjunction with investment performance," said James Iselin, Head of Municipal Fixed Income, Neuberger Berman. "We believe that the municipal space is a natural segment of the market for impact investing, as there are a number of bonds in the municipal market that finance projects that contribute to positive outcomes for underserved populations."
There are currently over 50,000 municipal issuers nationwide, providing plentiful and varied supply for impact investing without compromising on portfolio diversity, credit quality and earnings potential. With a nationwide, investable universe, rather than a single-state universe, there is great opportunity for issuer diversity and to pursue higher yielding credits. Neuberger Berman recently published a white paper on the subject, found here. The Neuberger Berman Municipal Fixed Income team has experience managing municipal impact strategies for institutional clients.
The Fund seeks to invest in municipal securities that finance projects that support positive social and environmental outcomes with a bias to underserved communities. These include projects financing sustainable issuers; socially and environmentally conscious use of proceeds and projects serving communities with higher relative need.
Some examples of impact municipal issues include those that seek to:
- Support low to moderate-income housing to improve access to affordable housing;
- Construct or refurbish public school classrooms;
- Construct or refurbish public hospitals;
- Improve supply and/or quality of water and sanitation;
- Develop mass transit or other green infrastructure, reducing greenhouse gas emissions;
- Upgrade stormwater system to reduce sewage overflow and improve water quality;
- Improve recycling and waste management facilities to reduce environmental footprint; among other issues.
On June 13, 2018, shareholders of the New York Municipal Income Fund approved a change to its fundamental policy to permit the Fund to invest in securities of municipal issuers nationwide. In connection with the change to the fundamental policy, effective as of June 16, 2018, the Fund changed its name to the Neuberger Berman Municipal Impact Fund and the Fund may now invest in a broader universe of securities, including securities that are investment grade or non-investment grade.
In addition, the total annual operating expenses for Institutional Class shares, which is currently 0.92% of average net assets, would be capped at 0.43% of average net assets (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, dividend and interest expenses relating to short sales, and extraordinary expenses, if any) as further described in the Fund's prospectus.
About Neuberger Berman
Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity and hedge funds—on behalf of institutions, advisors and individual investors globally. With offices in 20 countries, Neuberger Berman's team is more than 1,900 professionals. For four consecutive years, the company has been named first or second in Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). Tenured, stable and long-term in focus, the firm fosters an investment culture of fundamental research and independent thinking. It manages $299 billion in client assets as of March 31, 2018. For more information, please visit our website at www.nb.com.
An investor should consider the Neuberger Berman Municipal Impact Fund's investment objectives, risks and fees and expenses carefully before investing. This and other important information can be found in the Fund's prospectus and summary prospectus, which you can obtain by calling 877.628.2583. Please read the prospectus and summary prospectus carefully before making an investment. The prospectus contains a more complete discussion of the risk of investing in the Fund. Investments could result in loss of principal.
Shares in the Fund may fluctuate, sometimes significantly, based on interest rates, market conditions, credit quality and other factors. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund's yield and share price will fluctuate in response to changes in interest rates. The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. Bonds are subject to the credit risk of the issuer. To the extent the Fund invests more heavily in particular bond market sectors, its performance will be especially sensitive to developments that significantly affect those sectors. In a rising interest rate environment, the value of an income fund is likely to fall. The market's behavior is unpredictable and there can be no guarantee that the Fund will achieve its goal.
High-yield bonds, also known as "junk bonds", are considered speculative, involve greater risks, may fluctuate more widely in price and yield, and carry a greater risk of default than investment-grade bonds. The municipal securities market could be significantly affected by adverse political and legislative changes, as well as uncertainties related to taxation or the rights of municipal security holders. Changes in the financial health of a municipality may make it difficult for it to pay interest and principal when due. In addition, changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers can affect the overall municipal securities market. Changes in market conditions may directly impact the liquidity and valuation of municipal securities, which may, in turn, adversely affect the yield and value of the Fund's municipal securities investments. In recent periods an increasing number of municipal issuers have defaulted on obligations, been downgraded, or commenced insolvency proceedings. Financial difficulties of municipal issuers may continue or get worse. Because many municipal securities are issued to finance similar types of projects, especially those related to education, health care, housing, transportation, and utilities, conditions in those sectors can affect the overall municipal securities market. Municipal securities backed by current or anticipated revenues from a specific project or specific asset (so-called "private activity bonds") may be adversely impacted by declines in revenue from the project or asset. Declines in general business activity could affect the economic viability of facilities that are the sole source of revenue to support private activity bonds. To the extent that the Fund invests in private activity bonds, a part of its dividends may be an item of tax preference for purposes of the federal alternative minimum tax. Please see the Fund's prospectus for additional important information about taxation of municipal securities.
The Fund's impact and ESG criteria could cause it to sell or avoid instruments that subsequently perform well. The Fund may underperform funds that do not follow an impact and ESG criteria. Changes in the priorities or policies of the federal government may cause it to reduce or suspend its support for certain types of projects in which the Fund has invested or change laws or regulations from which the projects might benefit, causing such projects to be less viable financially or lessening their positive social or environmental impact.
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