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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"First Eagle's Short Duration High Yield Municipal Fund delivered 2.48% in Q2 2026, outperforming its benchmark by capitalizing on attractive tax-equivalent yields in high yield munis. Healthcare bonds drove consistent returns on improving fundamentals while infrastructure bonds rebounded on financing progress."
The First Eagle Short Duration High Yield Municipal Fund returned 2.48% in Q2 2026, outperforming its benchmark as municipal bonds demonstrated resilience amid interest rate volatility and record new issuance. The S&P Municipal Bond High Yield Index gained 3.3% during the quarter, supported by strong investor demand across vehicle types despite $299 billion in first-half issuance putting the market on track for another annual record. Healthcare bonds were consistent contributors to performance, benefiting from improved hospital operational metrics, moderating labor costs, and renegotiated reimbursement rates that better reflect rising costs. Infrastructure bonds related to Brightline West high-speed rail rebounded after a challenging first quarter as the company made progress on financing and construction. The manager continues to find opportunities in higher education bonds backed by solid collateral despite sector headwinds. Municipal fundamentals remain supportive with state revenues exceeding estimates and improved pension funding ratios. Tax-equivalent yields for high yield munis remain near the top quartile of their 10-year range, offering compelling value despite uncertainty around Fed policy under new Chair Kevin Warsh.
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