The First Trust Tax Exempt Municipal Mutual Fund is a unit investment trust designed to provide investors with a stream of income that is exempt from federal—and in many cases, state and local—income taxes. Its primary purpose is to help investors preserve capital while seeking tax-advantaged income by investing in a diversified portfolio of investment grade municipal bonds. The fund typically holds bonds issued by a range of states and municipalities across the United States, including sectors such as housing, healthcare, and essential public projects. As a regulated investment company, the fund emphasizes monthly income distribution, aiming for predictable cash flow. Its structure appeals to individuals in higher tax brackets or those prioritizing tax-efficiency in their fixed-income holdings. By focusing on high-credit-quality municipal securities, the fund seeks to balance yield and risk, although it is subject to interest rate, market, and credit risks inherent to municipal bonds. Overall, the First Trust Tax Exempt Municipal Mutual Fund serves a significant role for investors seeking federally tax-free income and diversification through municipal bond exposure within the broader fixed-income market.
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