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Investment Opportunity

The fund seeks current income free from federal and state income taxes by investing in municipal bonds issued in the state of California. The management team focuses on high quality California tax-exempt municipal bonds, gauging the value of a security by issue type, credit quality, and bond structure.

Fund Risks

Credit & Interest: Debt securities are subject to various risks, the most prominent of which are credit and interest rate risk. The issuer of a debt security may fail to make interest and/or principal payments. Values of debt securities may rise or fall in response to changes in interest rates, and this risk may be enhanced with longer-term maturities.

Geographic Concentration: A fund that focuses its investments in a particular geographic location will be highly sensitive to financial, economic, political, and other developments affecting the fiscal stability of that location.

Municipal Market: Events negatively impacting a municipal security, or the municipal bond market in general, may cause the fund to decrease in value.

State & AMT Tax: A portion of income may be subject to some state and/or local taxes and, for certain investors, a portion may be subject to the federal alternative minimum tax.

High Yield-High Risk Fixed Income Securities: There is a greater level of credit risk and price volatility involved with high yield securities than investment grade securities.

Prospectus: For additional information on risks, please see the fund's prospectus.

Key Stats (as of 4/28/2017)

Inception: 5/17/1983
Ticker: CTESX
CUSIP: 92828R503
Fund No: 556
Net Assets by Fund: $27,856,696
Net Assets by Class: $17,796,329

Management Team

Tim Heaney, CFA
Tim Heaney, CFA Newfleet Asset Management, LLC

Industry start date: 1990

Start date with Fund: 1997

Newfleet Asset Management, LLC

Newfleet leverages the knowledge and skill of a team of investment professionals with expertise in every sector of the bond market, including evolving, specialized, and out-of-favor sectors. The team employs active sector rotation and disciplined risk management to portfolio construction.

Morningstar Ratings

Overall Rating

As of 3/31/2017 the Fund was rated 2 stars out of 89 funds, 2 stars out of 74 funds and 3 stars out of 64 funds within the Muni California Long category for the 3-, 5- and 10 year periods, respectively.

Strong ratings are not indicative of positive fund performance.

Average Annual Total Returns

Monthly Performance (%) (as of 4/28/2017)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 1.61 2.47 -0.01 3.59 3.50 4.15 6.00
POP -1.18 -0.34 -2.76 2.63 2.92 3.86 5.92
Quarterly Performance (%) (as of 3/31/2017)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 1.73 1.73 0.09 3.86 3.57 4.11 5.99
POP -1.07 -1.07 -2.66 2.90 3.00 3.82 5.91
Index 1.57 1.57 -0.17 3.62 3.73 4.52 NA

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Sales Charge and Expenses

POP (Public Offering Price) performance reflects the deduction of the maximum sales charge of 2.75%. A contingent deferred sales charge of 0.50% may be imposed on certain redemptions within 18 months on purchases on which a finder’s fee has been paid.

The fund class gross expense ratio is 1.21%. The net expense ratio is 0.85%, which reflects a contractual expense reimbursement in effect through 04/30/2018.

Index: Bloomberg Barclays California Municipal Bond Index
The Bloomberg Barclays California Municipal Bond Index measures long term investment grade, tax-exempt and fixed rate bonds issued in California. The index is calculated on a total return basis. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

Risk Statistics3 (as of 3/31/2017)

  Fund Index
R2 0.99 1.00
Beta 1.04 1.00
Alpha 0.11 0.00
Std Dev 3.43 3.29
Index: Bloomberg Barclays California Municipal Bond Index

Daily Price (as of 4/28/2017)

NAV Change ($)
11.71 0.00
POP Change ($)
12.04 0.00

Yields/Distributions1 (as of 3/31/2017)

Distribution Yield (at NAV) 3.23%
SEC Yield 2.76%
SEC Yield (gross) 2.43%
Distributions Current Month $0.031376
Distributions YTD $0.088774

Distribution History2 (March 2017)

Ex-Date 03/31/2017
Income $0.031376
STCG $0.000000
LTCG $0.000000
Reinvest NAV $11.65

Top Holdings (% Fund)
(as of 3/31/2017)

County of Riverside CA, 7.8% 05/01/2021 4.81
Santa Margarita-Dana Point Authority, 5.13% 08/01/2038 2.37
California State Infrastructure & Economic Development Bank, 5.13% 07/01/2037 2.34
Los Angeles County Metropolitan Transportation Authority, 5.00% 07/01/2029 2.19
California State Public Works Board, 5.75% 10/01/2030 2.17
California Infrastructure & Economic Development Bank, 5.00% 10/01/2033 2.12
San Diego County Water Authority Financing, 5.00% 05/01/2037 2.07
California State Public Works Board, 6.13% 04/01/2029 1.97
California State Public Works Board, 5% 11/01/2032 1.83
Roseville Natural Gas Financing Authority, 5% 02/15/2024 1.83

Top Sectors (% Fund)
(as of 3/31/2017)

Tax Allocation 14.00
Prerefunded / Escrowed to Maturity 12.54
Local General Obligation 10.59
Hospital 8.97
Leasing 8.76

Characteristics4
(as of 3/31/2017)

Duration 6.78 years

Morningstar Ratings

Overall Rating

As of 3/31/2017 the Fund was rated 2 stars out of 89 funds, 2 stars out of 74 funds and 3 stars out of 64 funds within the Muni California Long category for the 3-, 5- and 10 year periods, respectively.

Strong ratings are not indicative of positive fund performance.