Transamerica High Yield Muni plans launch; Dalton is portfolio manager

By Toni Weeks

San Luis Obispo, Calif., May 16 - Transamerica Funds announced in an N-1A filing with the Securities and Exchange Commission its plans to offer a new municipal fund, the Transamerica High Yield Muni.

The fund will seek to maximize total return through opportunistic investment in a portfolio of medium- and lower-grade municipal securities that are exempt from federal income taxes for individual investors.

Under normal circumstances, the fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in municipal fixed-income securities, the interest from which is exempt from federal income tax and federal alternative minimum tax. The fund invests primarily in general obligation and revenue bonds issued by U.S. municipal issuers and issuers in U.S. territories and possessions.

The fund may invest 25% or more of its total assets in any sector or subsector of the municipal bond market. The fund may also invest up to 15% of its assets in municipal bonds that are considered distressed securities, such as those in the lowest rating categories, in default as to the repayment of principal and/or interest or subject to bankruptcy proceedings. The duration of the fund will generally vary between three and 20 years.

Matthew Dalton is the portfolio manager.

The fund plans to offer class A, class C and class I shares. Ticker symbols have not yet been determined.

Shareholder fees will consist of a 3.25% maximum sales load for class A shares and a 1% maximum deferred sales load for class C shares.

Management fees will be 0.51% for each share class. Including these, as well as the effects of a fee waiver agreement with the investment adviser, the total annual fund operating expenses are expected to be 0.88% for class A, 1.49% for class C and 0.76% for class I shares.

St. Petersburg, Fla.-based Transamerica Asset Management, Inc. will be the investment adviser. Belle Haven Investments, LP will serve as the subadviser.

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