Important update on the dividend policy for this fund: The Trustees of the Putnam Funds have approved an amendment to the dividend policy for the Putnam closed-end funds to establish targeted distribution rates for common shares. Read more here.


Managed Municipal Income Trust (Class A)  (NYSE: PMM)

A closed-end fund seeking high current tax-free income by investing primarily in levered portfolio of municipal bonds.

Webcast | Update on Putnam tax-exempt closed-end funds: PMO and PMM | September 25, 2019

Highlights

A closed-end fund seeking high current tax-free income by investing primarily in levered portfolio of municipal bonds.

The fund seeks to provide high current income free from federal income tax. The fund pursues its goal by investing in a diversified portfolio of tax-exempt municipal securities. The fund currently uses investment leverage by issuing preferred shares. Leverage offers the potential for higher returns, but also involves increased risk.

Strategy and process

  • Tax-advantaged income: The fund pursues above-average income free from federal income tax by investing in higher-yielding, lower-rated municipal bonds.
  • Focus on performance: The portfolio managers select bonds that offer attractive return potential relative to risk and position the portfolio based on Putnam's fundamental research and risk management.
  • Leading research: Members of Putnam's fixed-income organization have a range of skills to analyze the credit risk of below-investment grade bonds and help build a well-diversified portfolio of tax-exempt bonds.

Daily pricing as of 10/14/19

Ticker NYSE: PMM
Net asset value $8.20
Net asset value change 0.01
Market price $7.92
Market price change 0.01
Discount/Premium -3.41%
Dividend rate at net asset value 4.68%
Dividend rate at market price 4.85%

Fund facts as of 06/30/19

Inception date
02/24/89
Total net assets
$497.02M
Dividend frequency
Monthly
Number of holdings
411
Product status
Trades on secondary market
Common share CUSIP
746823103
Ticker
NYSE: PMM
Fiscal year-end
October
Category
Closed End
Turnover (fiscal year end)
28%
Number of common share accounts
--
Outstanding common shares
-
AMT
13.78%

Management team

Portfolio Manager
Portfolio Manager


Literature

Fund documents

Annual Report (PDF)
Semiannual Report (PDF)
Fact Sheet (PDF)

Munis feel knock-on effects of tax reform
The municipal bond market will likely see a reduction in supply in 2018 because of certain provisions in the new tax reform law.

Performance

  • Performance as of 09/30/19

  • Annual performance as of 09/30/19

Last month Last quarter Year to date 1 yr. 3 yrs. 5 yrs. 10 yrs.
Net asset value -0.58% 2.43% 9.71% 10.57% 4.71% 6.01% 7.12%
Market price -2.82% 3.86% 20.97% 19.01% 4.74% 7.76% 7.71%
Comparative index: Bloomberg Barclays Municipal Bond Index†
Net asset value -0.80%1.58%6.75%8.55%3.19%3.66%4.16%

Data is historical. Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Investment return at both net asset value and market price as well as principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Performance at net asset value reflects the deduction of all management and administrative fees. 12b-1 (distribution) fees are not applicable to this fund.

Performance snapshot

  Net asset value Market price
1 mt. -0.58% -2.82%
as of 09/30/19
YTD 9.98% -
as of 10/14/19

Lipper rankings as of 06/30/19

Time period Rank/Funds in category Percentile ranking
1 yr. 3/11 25%
3 yrs. 5/11 42%
5 yrs. 4/11 34%
10 yrs. 7/11 59%
Lipper category: High Yield Municipal Debt Funds

Distribution history (past 12 mts.)

Ex-distribution date Distribution amount
per common share
09/24/19 $00.032
08/23/19 $00.032
07/24/19 $00.032
06/24/19 $00.032
05/24/19 $00.032
04/24/19 $00.032
03/22/19 $00.032
02/22/19 $00.032
01/24/19 $00.032
12/21/18 $00.032
11/23/18 $00.0289
10/24/18 $00.0289

Distributions are sourced entirely from net investment income, unless noted otherwise. Distribution rates represent the latest declared regular distribution, annualized, relative to the most recent market price and NAV. Special distributions, including special capital gains distributions, are not included in the calculation.

Risk characteristics 

Average effective maturity 5.39
Average stated maturity 19.57
Average effective duration
without leverage
6.95
Average effective duration
with leverage
8.68
Average yield to maturity 4.25
Average coupon 5.21

Data is historical. Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results. Investment return at both net asset value and market price as well as principal value will fluctuate, and you may have a gain or a loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Performance at net asset value reflects the deduction of all management and administrative fees. 12b-1 (distribution) fees are not applicable to this fund.

Lipper rankings are based on total return without sales charge relative to all share classes of funds with similar objectives as determined by Lipper. Past performance is not indicative of future results.

The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. The ratio is calculated by dividing the manager’s returns by the returns of the index during the up-market, and multiplying that factor by 100. The down-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has dropped. The ratio is calculated by dividing the manager’s returns by the returns of the index during the down-market and multiplying that factor by 100.


Holdings

Top 10 holdings as of 06/30/19

Mmd Aaa R Sp 0.0 08/13/19 Ci08/13/2019 1.45%
Nthrn Tob Asset Bkd-A 05.0000 06/01/2046 1.28%
Buckeye Tob Cab-Sr-A3 06.2500 06/01/2037 1.19%
Ms Business Fin-Ref 02.5000 04/01/2022 1.13%
South Carolina Job-A 05.0000 05/01/2043 1.06%
Centrl Plains Energy 05.0000 03/01/2050 1.04%
Ky Pub Energy-C-1 04.0000 12/01/2049 1.03%
Golden St Tobacco Sec 05.0000 06/01/2047 1.01%
Mmd Aaa P Sp 0.0 07/02/19 Ms 1.01%
Tndr Opt-Resdlxf0571 P/P 12.6100 03/15/2042 0.97%
Top 10 holdings, percent of portfolio 11.17%

Maturity detail

0 - 1 yr. 12.71%
1 - 5 yrs. 35.54%
5 - 10 yrs. 47.42%
10 - 15 yrs. 2.22%
Over 15 yrs. 2.11%

Quality rating

AAA 1.89%
AA 9.66%
A 26.56%
BBB 25.53%
BB 10.85%
B 4.91%
Not Rated 18.80%
Cash and net other assets 1.80%

Fund characteristics will vary over time.

Due to rounding, percentages may not equal 100%.

Consider these risks before investing: Lower-rated bonds may offer higher yields in return for more risk. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings.  You can lose money by investing in the fund. The fund's shares trade on a stock exchange at market prices, which may be lower than the fund's net asset value.

Top industry sectors as of 06/30/19

Health care 23.04%
Education 12.53%
Transportation 11.64%
Utilities 10.73%
State Debt 6.93%
Tobacco 6.81%
Land 5.12%
Other 4.74%
Special Tax 4.28%
 
Other
14.18%
Financials 4.11%
Local Debt 4.07%
Prerefunded 2.72%
Cash and net other assets 1.80%
Industrials 1.48%

Sectors will vary over time.

†The Bloomberg Barclays Municipal Bond Index is an unmanaged index of long-term fixed-rate investment-grade tax-exempt bonds. You cannot invest directly in an index.

Consider these risks before investing: Lower-rated bonds may offer higher yields in return for more risk. Bond investments are subject to interest-rate risk (the risk of bond prices falling if interest rates rise) and credit risk (the risk of an issuer defaulting on interest or principal payments). Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds. Unlike bonds, funds that invest in bonds have fees and expenses. The value of investments in the fund’s portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general economic, political or financial market conditions, investor sentiment and market perceptions, government actions, geopolitical events or changes, and factors related to a specific issuer, geography, industry or sector. These and other factors may lead to increased volatility and reduced liquidity in the fund’s portfolio holdings.  You can lose money by investing in the fund. The fund's shares trade on a stock exchange at market prices, which may be lower than the fund's net asset value.