**Pioneer AMT-Free Municipal Fund: Navigating Shifting Market Conditions**
As the US economy experienced a slowdown in the second quarter, the Federal Reserve maintained a hawkish tone, leading investors to reassess their expectations. Despite this, investment-grade fixed income markets remained relatively flat, with the Bloomberg US Aggregate Index returning 0.07%. Municipal bonds, as measured by the Bloomberg Municipal Bond Index, returned -0.02% in the second quarter.
The Pioneer AMT-Free Municipal Fund, managed by Amundi US, seeks to provide investors with a diversified portfolio of municipal bonds, focusing on high-quality issuers and sectors vital to the US economy. The Fund’s long-duration bias and overweight allocations to hospital bonds, public/private universities, and transportation obligors contributed to its relative performance.
In the current market environment, the Fund’s managers believe that credit conditions remain stable across the municipal bond space, with low odds of a wholesale rise in default risk. They anticipate that the shifting interest-rate outlook will continue to impact near-term market performance, but see opportunities in the high-yield municipal market and the compelling yields in the investment-grade municipal bond space.
**Performance Highlights**
* 1-Year Return: 3.68%
* 3-Year Return: -3.35%
* 5-Year Return: 0.15%
* 10-Year Return: 2.24%
**Key Holdings and Strategies**
* High-quality municipal bonds, with a focus on AA and AAA-rated issuers
* Overweight allocations to hospital bonds, public/private universities, and transportation obligors
* Long-duration bias, with a focus on the long end of the yield curve
* Underweight to state general obligation issues, due to potential political and fiscal risks
**Market Outlook**
* Slowing consumer spending and decelerating activity in the housing market may indicate that the Fed is moving closer to the point at which it can conclude its monetary tightening cycle
* Opportunities in the high-yield municipal market, driven by its current low default rate and declining new-issue supply
* Compelling yields in the investment-grade municipal bond space, supported by stable credit conditions and a strong economy
**Important Disclosures**
Please see the prospectus and financial statements for more information. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers, fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information.
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