Transamerica announces launch of Transamerica High Yield Muni

By Toni Weeks

San Luis Obispo, Calif., July 31 - Transamerica Funds announced the launch on Wednesday of its new municipal fund, the Transamerica High Yield Muni, according to an N-1A filing with the Securities and Exchange Commission.

The fund seeks to maximize total return by investing in a portfolio of medium- and lower-grade municipal securities that are exempt from federal income taxes for individual investors.

"Despite recent volatility, we believe there are attractive opportunities in the high-yield municipal bond market for investors who are looking for a tax efficient and relatively robust income stream," Dave Paulsen, chief executive officer of Transamerica Capital, Inc., said in a press release.

The fund normally invests 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 offers class A, class C and class I shares. The ticker symbols are THAYX, THCYX and THYIX, respectively.

Shareholder fees 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 are 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. is the investment adviser. Belle Haven Investments, LP is the subadviser.

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