UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
Investment Company Act file number: 811-02671
Deutsche DWS Municipal Trust
(Exact Name of Registrant as Specified in Charter)
875 Third Avenue
New York, NY 10022-6225
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, including Area Code: (212) 454-4500
Diane Kenneally
100 Summer Street
Boston, MA 02110
(Name and Address of Agent for Service)
| Date of fiscal year end: | 10/31 |
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| Date of reporting period: | 10/31/2022 |
| ITEM 1. | REPORT TO STOCKHOLDERS |
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| | (a) |
October 31, 2022
Annual Report
to Shareholders
DWS Short-Term Municipal Bond Fund
This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the Fund’s objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the Fund. Please read the prospectus carefully before you invest.
The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc. which offers investment products or DWS Investment Management Americas, Inc. and RREEF America L.L.C. which offer advisory services.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
| | DWS Short-Term Municipal Bond Fund |
Municipal securities are subject to the risk that litigation, legislation or other political events, local business or economic conditions or the bankruptcy of the issuer could have a significant effect on an issuer’s ability to make payments of principal and/or interest. The market for municipal bonds may be less liquid than for taxable bonds and there may be less information available on the financial condition of issuers of municipal securities than for public corporations. Bond investments are subject to interest-rate, credit, liquidity, and market risks to varying degrees. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investments in lower-quality (“junk bonds” ) and non-rated securities present greater risk of loss than investments in higher-quality securities. Although the fund seeks income that is exempt from federal income taxes, a portion of the fund’s distributions may be subject to federal, state, and local taxes, including the alternative minimum tax. Please read the prospectus for details.
War, terrorism, sanctions, economic uncertainty, trade disputes, public health crises and related geopolitical events have led, and, in the future, may lead to significant disruptions in U.S. and world economies and markets, which may lead to increased market volatility and may have significant adverse effects on the Fund and its investments.
DWS Short-Term Municipal Bond Fund | | |
Letter to Shareholders
Dear Shareholder:
Financial markets experienced several negative impacts which began in late February with the Russia-Ukraine war and have continued through the second quarter due to volatility in energy, a rise in inflation, pressure on supply chains, and slower corporate earnings growth. Global monetary authorities have moved aggressively to tame inflation which in turn has created a swift decline in equity and fixed income markets. The longer-term effects of these headwinds remain uncertain. De-globalization and a desire for energy independence across Europe and North America may continue to push prices upwards, and we expect inflation will remain higher than average over the next decade.
In periods such as this, real capital preservation becomes more challenging. Our portfolio managers continue to assess risks and form opinions on how these headwinds may impact investment portfolios over multiple time horizons. Yields for bonds can be impacted by economic risks, rising inflation, and slowing monetary support. We expect a moderate rise in government bond yields while short term spread widening may offer potential over the next year. For equities, we expect continued volatility in the short-term, however we do have a favorable view on companies with solid balance sheets and business models over a twelve-month horizon. We believe alternatives such as real estate, infrastructure and commodities may help in preserving capital given pricing power and correlation to inflation. Overall, we believe a diversified and balanced portfolio may help mitigate portfolio volatility during this uncertain economic and market cycle.
In our view, the current environment underscores the value add of active portfolio management. We also believe that the strong partnership between our portfolio managers and our CIO Office — which synthesizes the views of more than 900 DWS economists, analysts and investment professionals around the world — makes an important difference in making strategic and tactical decisions for the DWS Funds. Thank you for your trust. We welcome the opportunity to help you navigate these unusual times. For ongoing updates to our market and economic outlook, please visit the “Insights” section of dws.com.
Best regards,
Hepsen Uzcan
President, DWS Funds
Assumptions, estimates and opinions contained in this document constitute our judgment as of the date of the document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results.
| | DWS Short-Term Municipal Bond Fund |
Portfolio Management Review(Unaudited)
Market Overview and Fund Performance
All performance information below is historical and does not guarantee future results. Returns shown are for Class A shares, unadjusted for sales charges. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit dws.com for the most recent month-end performance of all share classes. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had. Please refer to pages 10 through 12 for more complete performance information.
Investment Process
Under normal market conditions, the Fund invests at least 80% of its assets, determined at the time of purchase, in municipal securities that pay interest exempt from regular federal income tax. The Fund invests in securities of varying maturities and intends to maintain a dollar-weighted average effective portfolio maturity of no longer than three years. In making its buy and sell decisions, portfolio management typically weighs a number of factors against each other, from economic outlooks and possible interest rate movements to changes in supply and demand within the municipal bond market. When evaluating any individual security and its issuer, portfolio management may consider a number of factors including the security’s credit quality and terms, such as coupon, maturity date and call date, as well as the issuer’s capital structure, leverage, and ability to meet its current obligations.
DWS Short-Term Municipal Bond Fund posted a total return for the 12 months ended October 31, 2022 of –4.72%. This compared to a return of –2.20% for the unmanaged Bloomberg 1-Year G.O. Index and –5.35% for the unmanaged Bloomberg 3-Year (2–4) Municipal Bond Index.
All major segments of the fixed-income market experienced steeply negative returns over the 12-month period ended October 31, 2022. Inflation, which had already been well above the 2% target of the U.S. Federal Reserve (Fed), spiked following Russia’s late-February invasion of Ukraine, which exacerbated ongoing supply-chain pressures and led to soaring commodity prices. Consumer price inflation rose 7.5% or more on a year-over-year basis in each of the first nine months of 2022, hitting a high of 9.1% in June. The Fed responded by aggressively raising its benchmark overnight lending rate, bringing the fed funds target to a range of 3.0% to 3.25% as of October 31, 2022, versus 0% to 0.25% at
DWS Short-Term Municipal Bond Fund | | |
the start of 2022. As the period drew to a close, the market was anticipating that the fed funds rate would reach at least 4.5% in 2023.
The U.S. Treasury yield curve moved higher in response to the Fed’s policy tightening, with the two-year yield rising from 0.48% to 4.51% over the 12 months. Longer-term Treasury yields, which are less directly influenced by changes in the overnight reference rate, rose to a lesser extent, with the bellwether 10-year note yield climbing from 1.55% to 4.10%. As a result, the yield curve displayed a significant inversion at the end of the period (meaning that short-term yields were higher than long-term yields), heightening concerns that the economy was on the verge of recession. The rise in interest rates and deteriorating economic outlook led to spread widening and weak performance for credit-sensitive sectors of the bond market as investors sought safer assets.
“As the period progressed, municipal market prices were pressured by historically strong outflows from tax-free mutual funds.”
As the period progressed, municipal market prices were pressured by historically strong outflows from tax-free mutual funds. Within the municipal market, lower-quality issues underperformed as investors sought safety and liquidity against an uncertain economic and geopolitical backdrop.
For the full 12 months ended October 31, 2021, the yield curve for AAA-rated municipal bonds flattened between 2 and 10 years. Specifically, the yield on two-year issues rose by 293 basis points from 0.25% to 3.18%, while the 10-year yield rose 218 basis points from 1.21% to 3.39%. (100 basis points equals one percentage point. See the accompanying graph for a depiction of municipal bond yield changes between the beginning and end of the period.) period.
| | DWS Short-Term Municipal Bond Fund |
Municipal Bond Yield Curve (as of 10/31/22 and 10/31/21)
Source: Refinitiv TM3.
Chart is for illustrative purposes only and does not represent any DWS product.
Positive and Negative Contributors to Performance
The Fund’s positioning across bond maturities as the municipal yield curve flattened between 2 and 10 years was the leading positive contributor to relative performance for the 12 months. Specifically, an overweight to maturities beyond 4 years proved additive as rate increases were more modest farther out on the curve.
In an attempt to remain neutrally positioned vs. its peer group with respect to interest rate sensitivity, the Fund maintained an overall portfolio duration shorter than the Bloomberg 3-year (2–4) Municipal Bond Index and longer than the Bloomberg 1-year G.O. Index. As municipal yields rose for the 12 months, this positioning added to performance vs. the 3-year index and detracted from performance vs. the 1-year index.
The Fund’s overweight to issues rated BBB and lower had a negative impact on relative performance as lower quality issues underperformed over the period. In sector terms, overweight exposure to healthcare, including hospitals and continuing care retirement communities, detracted, as did overweights to airport revenue and student loans.
Outlook and Positioning
At the end of October 2022, the two-year municipal yield of 3.18% was 70.8% of the 4.49% yield on the comparable maturity U.S. Treasury as compared to 50.0% twelve months earlier. The five-year municipal yield of 3.24% was 76.6% of the 4.23% yield on the comparable maturity U.S. Treasury vs. 53.8% twelve months earlier. The 10-year municipal bond
DWS Short-Term Municipal Bond Fund | | |
yield of 3.39% was 83.7% of the 4.05% comparable-maturity U.S. Treasury bond yield, as compared to 77.6% 12 months earlier.
Municipal yields remain attractive as credit spreads have widened for lower quality bonds and look compelling in certain sectors when considering that credit fundamentals generally remain sound.
We have been focused on maintaining liquidity in the portfolio to meet redemptions while also taking advantage of new issues, which are coming at much wider spreads.
The municipal curve flattened during the year and is now at below average levels of steepness by historical standards, particularly between two and ten years. As a result, we have been unwinding the Fund’s barbelled position and increasing the allocation in two- and three-year maturities, as with the flat curve there is less incremental yield available in longer maturities compared to historical averages.
Portfolio Management Team
Matthew J. Caggiano, CFA, Head of Investment Strategy Fixed Income
Portfolio Manager of the Fund. Began managing the Fund in 2014.
—Joined DWS in 1989.
—Co-Head of Municipal Bond Department.
—BS, Pennsylvania State University; MS, Boston College.
Patrick Gallagher, Portfolio Manager Fixed Income
Portfolio Manager of the Fund. Began managing the Fund in 2021.
—Joined DWS in 2003. Prior to his current role, he served as an Insurance Reporting Supervisor in the Insurance Asset Management business and as Investment Accountant in the Private Wealth Management Division.
—BA, Colby College.
Allyson McCann, Portfolio Manager Fixed Income.
Portfolio Manager of the Fund. Began managing the Fund in 2022.
—Joined DWS in 2022 with 14 years of industry experience.
—Prior to joining DWS, Allyson served as portfolio manager focused on separately managed accounts at Breckenridge Capital Advisors, Columbia Threadneedle Investments, and BNY Mellon.
—BSBA, Suffolk University; MBA, MsF, Northeastern University.
The views expressed reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team’s views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
| | DWS Short-Term Municipal Bond Fund |
Terms to Know
Bloomberg 1-Year G.O. Index is an unmanaged index including bonds with a minimum credit rating of Baa3, issued as part of a deal of at least $50 million, having an amount outstanding of at least $5 million, a maturity of one to two years, backed by the full faith and credit of an issuer with taxing power.
Bloomberg 3-Year (2–4) Municipal Bond Index is an unmanaged subset of the Bloomberg Barclays Municipal Bond Index. It includes maturities of two to four years.
Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index.
The yield curve is a graphic representation of how yields on bonds of different maturities compare. Normally, yield curves slant upward, as bonds with longer maturities typically offer higher yields than short-term bonds.
Credit quality is the ability of an issuer of fixed-income securities to repay interest and principal in a timely manner. Credit quality is measured using credit ratings, i.e., assessments of the creditworthiness of a borrower such as a corporation, a municipality or a sovereign country by a credit ratings agency. Letter grades of “BBB” and above indicate that the rated borrower is considered “investment grade” by a particular ratings agency.
Overweight means that a fund holds a higher weighting in a given sector or security than its benchmark index. Underweight means that a fund holds a lower weighting.
Duration, which is expressed in years, measures the sensitivity of the price of a bond or bond fund to a change in interest rates.
DWS Short-Term Municipal Bond Fund | | |
Performance SummaryOctober 31, 2022 (Unaudited)
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Average Annual Total Returns as of 10/31/22 |
Unadjusted for Sales Charge | | | |
Adjusted for the Maximum Sales Charge
(max 2.25% load) | | | |
Bloomberg 1-Year G.O. Index† | | | |
Bloomberg 3-Year (2–4) Municipal
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Average Annual Total Returns as of 10/31/22 |
Unadjusted for Sales Charge | | | |
Adjusted for the Maximum Sales Charge
(max 1.00% CDSC) | | | |
Bloomberg 1-Year G.O. Index† | | | |
Bloomberg 3-Year (2–4) Municipal
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Average Annual Total Returns as of 10/31/22 |
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Bloomberg 1-Year G.O. Index† | | | |
Bloomberg 3-Year (2–4) Municipal
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Average Annual Total Returns as of 10/31/22 |
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Bloomberg 1-Year G.O. Index† | | | |
Bloomberg 3-Year (2–4) Municipal
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Performance in the Average Annual Total Returns table above and the Growth of an Assumed $10,000 Investment line graph that follows is historical and does not guarantee future results. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit dws.com for the Fund’s most recent month-end performance. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had.
| | DWS Short-Term Municipal Bond Fund |
The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated February 1, 2022 are 0.79%, 1.55%, 0.60% and 0.56% for Class A, Class C, Class S and Institutional Class shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.
Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index.
Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
A portion of the Fund’s distributions may be subject to federal, state and local tax and the alternative minimum tax.
Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only, and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights.
Growth of an Assumed $10,000 Investment
(Adjusted for Maximum Sales Charge)
Yearly periods ended October 31
The Fund’s growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 2.25%. This results in a net initial investment of $9,775.
The growth of $10,000 is cumulative.
Performance of other share classes will vary based on the sales charges and the fee structure of those classes.
| The Bloomberg 1-Year General Obligation Index is an unmanaged index including bonds with a minimum credit rating of Baa3, issued as part of a deal of at least $50 million, having an amount outstanding of at least $5 million, a maturity of one to two years, backed by the full faith and credit of an issuer with taxing power. |
DWS Short-Term Municipal Bond Fund | | |
| The Bloomberg 3-Year (2–4) Municipal Bond Index is an unmanaged subset of the Bloomberg Municipal Bond Index. It includes maturities of two to four years. |
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Distribution Information as of 10/31/22 |
Income Dividends, Twelve Months | | | | |
Capital Gain Distributions | | | | |
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Current Annualized Distribution Rate‡‡ | | | | |
| The SEC yield is net investment income per share earned over the month ended October 31, 2022, shown as an annualized percentage of the maximum offering price per share on the last day of the period. The SEC yield is computed in accordance with a standardized method prescribed by the Securities and Exchange Commission. The SEC yields would have been 2.38%, 1.76%, 2.66% and 2.68% for Class A, Class C, Class S and Institutional Class shares, respectively, had certain expenses not been reduced. Tax equivalent yield is based on the Fund’s yield and a marginal income tax rate of 40.8%. Current annualized distribution rate is the latest monthly dividend shown as an annualized percentage of net asset value on October 31, 2022. Distribution rate simply measures the level of dividends and is not a complete measure of performance. The current annualized distribution rates would have been 1.90%, 1.22%, 2.12% and 2.15% for Class A, Class C, Class S and Institutional Class shares, respectively, had certain expenses not been reduced. Yields and distribution rates are historical, not guaranteed and will fluctuate. |
| | DWS Short-Term Municipal Bond Fund |
Portfolio Summary(Unaudited)
Asset Allocation (As a % of Investment Portfolio excluding Open-End Investment Companies) | | |
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Escrow to Maturity/Prerefunded Bonds | | |
Variable Rate Demand Notes | | |
Variable Rate Demand Preferred Shares | | |
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Interest Rate Sensitivity | | |
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Effective maturity is the weighted average of the maturity date of bonds held by the Fund taking into consideration any available maturity shortening features.
Modified duration is an approximate measure of a fund’s sensitivity to movements in interest rates based on the current interest rate environment.
Quality (As a % of Investment Portfolio excluding Open-End Investment Companies) | | |
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The quality ratings represent the higher of Moody’s Investors Service, Inc. (“Moody’s” ), Fitch Ratings, Inc. (“Fitch” ) or S&P Global Ratings (“S&P” ) credit ratings. The ratings of Moody’s, Fitch and S&P represent their opinions as to the quality of the securities they rate. Credit quality measures a bond issuer’s ability to repay interest and principal in a timely manner. Ratings are relative and subjective and are not absolute standards of quality. Credit quality does not remove market risk and is subject to change.
Top Five State Allocations (As a % of Investment Portfolio excluding Open-End Investment Companies) | | |
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Portfolio holdings and characteristics are subject to change.
For more complete details about the Fund’s investment portfolio, see page 14. A quarterly Fact Sheet is available on dws.com or upon request. Please see the Account Management Resources section on page 59 for contact information.
DWS Short-Term Municipal Bond Fund | | |
Investment Portfolioas of October 31, 2022
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Municipal Investments 102.3% | |
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Alabama, Black Belt Energy Gas District Prepay Revenue: | | | |
Series A, 4.0%, Mandatory Put 12/1/2023 @ 100, 12/1/2048, GTY: Goldman Sachs Group, Inc. | | | |
Series D-1, 4.0%, Mandatory Put 6/1/2027 @ 100, 7/1/2052, GTY: Royal Bank of Canada | | | |
Series B-1, 4.0%, Mandatory Put 10/1/2027 @ 100, 4/1/2053, GTY: Goldman Sachs Group, Inc. | | | |
Southeast Alabama, Energy Authority Commodity Supply Revenue Project 4, Series B-1, 5.0%, Mandatory Put 8/1/2028 @ 100, 5/1/2053, GTY: Goldman Sachs & Co. | | | |
Southeast Alabama, State Gas Supply District Revenue Project, Series A, 4.0%, Mandatory Put 6/1/2024 @ 100, 6/1/2049, GTY: Morgan Stanley | | | |
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Alaska, Northern Tobacco Securitization Corp. Tobacco Settlement Revenue, “2” , Series B-1, 0.5%, 6/1/2031 | | | |
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Arizona, Industrial Development Authority, Hospital Revenue Bonds, Phoenix Children Hospital: | | | |
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Arizona, Tempe Industrial Development Authority, Tempe Life Care Village Inc., Series C-2, 1.125%, 12/1/2026 | | | |
Coconino County, AZ, Pollution Control Corp. Revenue, Nevada Power Co., Series A, AMT, 1.875%, Mandatory Put 3/31/2023 @ 100, 9/1/2032 | | | |
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California, Bay Area Toll Authority, Toll Bridge Revenue, San Francisco Bay Area: | | | |
Series B-1, MUNIPSA + 1.1%, 3.34% (a), Mandatory Put 4/1/2024 @ 100, 4/1/2045 | | | |
Series A, MUNIPSA + 1.25%, 3.49% (a), Mandatory Put 4/1/2027 @ 100, 4/1/2036 | | | |
California, Community Choice Financing Authority Clean Energy Project Revenue, Series A-1, 4.0%, Mandatory Put 8/1/2028 @ 100,5/1/2053, GTY: Morgan Stanley | | | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
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California, Eastern Municipal Water District, Series B, MUNIPSA + 0.1%, 2.34% (a), Mandatory Put 7/1/2024 @ 100, 7/1/2046 | | | |
California, Metropolitan Water District Revenue, Series E, MUNIPSA + 0.14%, 2.38% (a), Mandatory Put 5/21/2024 @100, 7/1/2037 | | | |
California, Municipal Finance Authority, Waste Disposal Revenue, Series A, AMT, 4.125%, Mandatory Put 10/1/2025 @ 100, 10/1/2041 | | | |
California, Nuveen AMT-Free Municipal Credit Income Fund, Series C, 2.69% (b), 12/1/2031 | | | |
California, Pollution Control Financing Authority, Solid Waste Disposal Revenue, Republic Services, Inc., Series 2017 A-2, 144A, AMT, 3.875%, Mandatory Put 1/17/2023 @ 100, 11/1/2042 | | | |
California, Public Finance Authority Revenue, Enso Village Project, Series B-3, 144A, 2.125%, 11/15/2027 | | | |
California, San Diego Association of Governments, Capital Grant Receipts Revenue, Mid-Coast Corridor Transit Project, Series B, 1.8%, 11/15/2027 | | | |
California, State General Obligation, Series E-REMK, MUNIPSA + 0.43%, 2.67% (a), Mandatory Put 12/1/2023 @ 100, 12/1/2029 | | | |
California, State Infrastructure & Economic Development Bank Revenue: | | | |
1.75%, Mandatory Put 8/1/2026 @ 100, 8/1/2055 | | | |
Series A, MUNIPSA + 0.35%, 2.59% (a), Mandatory Put 8/1/2024 @ 100, 8/1/2047 | | | |
California, State Municipal Finance Authority Revenue, LAX Integrated Express Solutions LLC, APM Project: | | | |
Series A, AMT, 5.0%, 12/31/2025 | | | |
Series A, AMT, 5.0%, 6/30/2026 | | | |
California, Transbay Joint Powers Authority, Series B, 2.4%, 10/1/2049 | | | |
Los Angeles County, CA, Community College District, General Obligation, Series C-1, 5.0%, 8/1/2024 | | | |
Port Oakland, CA, Intermediate Lien Revenue Bonds: | | | |
Series H, AMT, 5.0%, 5/1/2028 | | | |
Series H, AMT, 5.0%, 11/1/2029 | | | |
San Bernardino County, CA, Flood Control District Judgment Obligation, 1.95% (b), 11/7/2022, LOC: Bank of America NA | | | |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
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San Diego Country, CA, Unified School District, General Obligation, Series O-2, 5.0%, 7/1/2024 | | | |
San Francisco City & County, CA, Multi Family Housing Revenue, Eastern Park Apartments, Series K, 1.3%, Mandatory Put 1/1/2023 @ 100, 7/1/2023 | | | |
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Cherry Creek, CO, School District No. 5, Series C, 5.0%, 12/15/2031 | | | |
Denver City & County, CO, Airport System Revenue: | | | |
Series A, AMT, 5.0%, 12/1/2026 | | | |
Series D, 5.0%, Mandatory Put 11/15/2022 @ 100, 11/15/2031 | | | |
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Connecticut, State General Obligation, Series A, 5.0%, 3/15/2029 | | | |
Connecticut, State Housing Finance Authority, Housing Finance Mortgage Program: | | | |
Series E-E3, 1.625%, Mandatory Put 11/15/2022 @ 100, 11/15/2059 | | | |
Series A-4, MUNIPSA + 0.3%, 2.54% (a), Mandatory Put 11/15/2024 @ 100, 11/15/2050 | | | |
Series C-1, 4.0%, 11/15/2047 | | | |
Connecticut, State Housing Finance Program Authority Revenue, Series A-1, 4.0%, 11/15/2047 | | | |
Connecticut, State Special Tax Obligation Revenue, Series B, 5.0%, 7/1/2025 (c) | | | |
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Florida, Capital Projects Finance Authority, Student Housing Revenue, Capital Project Loan Program, Series A-1, 5.0%, 10/1/2026 | | | |
Florida, Development Finance Corp., Brightline Florida Passenger Rail Expansion Project, Series A, 144A, AMT, 7.25%, Mandatory Put 10/3/2023 @ 100, 7/1/2057 | | | |
Florida, Development Finance Corp., The Mayflower Retirement Community Project, Series B, 144A, 1.75%, 6/1/2026 | | | |
Florida, Development Finance Corp., Transportation Facility Revenue, Virgin Trains U.S.A. Passenger Rail Project, Series A, 144A, AMT, 6.375%, Mandatory Put 1/1/2026 @ 100, 1/1/2049 | | | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
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Hillsborough Countey, FL, Solid Waste & Resource Recovery Revenue, Series A, AMT, 5.0%, 9/1/2025 | | | |
Lee County, FL, Industrial Development Authority, Health Care Facilities Revenue, Cypress Cove At Healthpark Florida, Inc., Series B2, 3.25%, 10/1/2026 | | | |
Miami-dade County, FL, Industrial Development Authority, Solid Waste Disposal Revenue, Waste Management Inc., Project: | | | |
0.32%, Mandatory Put 11/1/2022 @ 100, 9/1/2027 | | | |
AMT, 0.4%, Mandatory Put 11/1/2022 @ 100, 11/1/2041 | | | |
Village, FL, Community Development District No. 13, Special Assessment Revenue, 2.625%, 5/1/2024 | | | |
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Burke County, GA, Development Authority, Pollution Control Revenue, Oglethorpe Power Corp., Series E, 3.25%, Mandatory Put 2/3/2025 @ 100, 11/1/2045 | | | |
Georgia, Geo L Smith II Congress Center Authority, Convention Center Hotel First Tier Revenue, Series A, 2.375%, 1/1/2031 | | | |
Georgia, Main Street Natural Gas, Inc., Gas Supply Revenue: | | | |
Series A, 4.0%, Mandatory Put 9/1/2023 @ 100, 4/1/2048, LIQ: Royal Bank of Canada | | | |
Series C, 4.0%, Mandatory Put 12/1/2023 @ 100, 8/1/2048, LIQ: Royal Bank of Canada | | | |
Series B, 5.0%, Mandatory Put 6/1/2029 @ 100,12/1/2052, GTY: Citi Group, Inc. | | | |
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Chicago, O’Hare International Airport Revenue, Series C, AMT, 5.0%, 1/1/2025 | | | |
Illinois, State Development Finance Authority, Solid Waste Disposal Revenue, Waste Management, Inc. Project, Series A, AMT, 0.4%, Mandatory Put 11/1/2022 @ 100, 11/1/2044, GTY: Waste Management Holdings | | | |
Illinois, State General Obligation: | | | |
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The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
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Indiana, Finance Authority Revenue, Deaconess Health System, Series B, MUNIPSA + 0.3%, 2.54% (a), Mandatory Put 3/1/2027 @ 100, 3/1/2039 | | | |
Indiana, State Finance Authority, Economic Development Revenue, Republic Sevices, Inc., Project, AMT, 2.95%, Mandatory Put 12/1/2022 @ 100, 12/1/2037 | | | |
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Manhattan, KS, Health Care Facilities Revenue Bonds, Meadowlark Hills Retirement, Series B-1, 2.875%, 6/1/2028 | | | |
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Boone County, KY, Pollution Control Revenue, Duke Energy Kentucky, Inc., Project, Series A, 3.7%, 8/1/2027 | | | |
Kentucky, Higher Education Student Loan Corp. Revenue, Taxable Asset Back Notes, “A1A” , Series 2021-1, 1.65%, 3/25/2051 | | | |
Kentucky, State Public Energy Authority, Gas Supply Revenue, Series B, 4.0%, Mandatory Put 1/1/2025 @ 100, 1/1/2049, GTY: BP Corp. North America, Inc. | | | |
Louisville & Jefferson County, KY, Metropolitan Government Control Revenue, Louisville Gas & Celectric Co., Series B, AMT, 1.35%, 11/1/2027 | | | |
| | | |
| |
Lake Charles, LA, Harbor & Terminal District Revenue, Big Lake Fuels LLC Project, AMT, 1.0%, Mandatory Put 12/1/2024 @ 100, 12/1/2051 | | | |
Louisiana, Stadium & Exposition District, Bond Anticipation Notes, 5.0%, 7/3/2023 | | | |
| | | |
| |
Maryland, State Health & Higher Educational Facilities Authority Revenue, University of Maryland Medical System Obligated Group, Series B-2, 5.0%, Mandatory Put 7/1/2027 @ 100, 7/1/2045 | | | |
| |
Massachusetts, Educational Financing Authority Education Loan Revenue: | | | |
Series B, AMT, 2.0%, 7/1/2037 | | | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
| | |
Series B, AMT, 2.625%, 7/1/2036 | | | |
Massachusetts, State Health & Higher Educational Facilities Authority Revenue, Series J-2, 2.12% (b), 11/7/2022 | | | |
| | | |
| |
Michigan, State Finance Authority Revenue: | | | |
“A1A", Series A, 1.3%, 7/25/2061 | | | |
Series A-1, 5.0%, 7/20/2023 | | | |
Michigan, State Finance Authority Revenue, Beaumont-Spectrum, MUNIPSA + 0.75%, 2.99% (a), Mandatory Put 4/15/2027 @ 100, 4/15/2047 | | | |
Michigan, State Finance Authority Revenue, Hospital McLaren Health Care Corp., Series D-2, 1.2%, Mandatory Put 4/13/2028 @ 100, 10/15/2038 | | | |
| | | |
| |
Minnesota, Municipal Gas Agency Commodity Supply Revenue, Series A, 4.0%, Mandatory Put 12/1/2027 @ 100,12/1/2052, LIQ: Royal Bank of Canada | | | |
Minnesota, State Housing Finance Agency, Residential Holding Finance, Series H, MUNIPSA + 0.55%, 2.79% (a), Mandatory Put 12/12/2023 @ 100, 7/1/2041 | | | |
| | | |
| |
Lowndes County, MS, Solid Waste Disposal And Pollution Control Refunding Revenue bonds, International Company Project, 2.65%, Mandatory Put 4/1/2027 @ 100,4/1/2037, GTY: International Paper Co. | | | |
| |
Missouri, Higher Education Loan Authority Revenue, Taxable Student Loan Asset Back Notes, “A1A” , Series 2021-1, 1.53%, 1/25/2061 | | | |
Missouri, Plaza At Noah’s Ark Community Improvement District: | | | |
| | | |
| | | |
| | | |
| | | |
| |
Sparks, NV, Tourism Improvement District No. 1 Revenue, Sales Tax Revenue, Series A, 144A, 2.5%, 6/15/2024 | | | |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
| | |
| |
New Jersey, State Economic Development Authority, Motor Vehicle Surcharge Revenue, Series A, 3.125%, 7/1/2029 | | | |
New Jersey, State Transportation Trust Fund Authority, Federal Highway Reimbursement Notes, Series A, 5.0%, 6/15/2024 | | | |
New Jersey, Tobacco Settlement Financing Corp., Series A, 5.0%, 6/1/2025 | | | |
Newark City, NJ, General Obligation, Series C, 3.75%, 2/17/2023 | | | |
| | | |
| |
New Mexico, Mortgage Finance Authority, Single Family Mortgage, “I” , Series A-1, 4.0%, 1/1/2049 | | | |
| |
Chautauqua County, NY, Capital Resource Corp., Exempt Facilities Revenue, NRG Energy, Inc. Project, 1.3%, Mandatory Put 4/3/2023 @ 100, 4/1/2042 | | | |
New York, Amherst Industrial Development Agency, Multi Family Housing Revenue, 3.9%, Mandatory Put 4/1/2025 @ 100, 4/1/2026 | | | |
New York, Long Island Power Authority, Series C, MUNIPSA + 0.45%, 2.69% (a), Mandatory Put 9/1/2025 @ 100, 9/1/2038 | | | |
New York, Metropolitan Transportation Authority, Series F, 5.0%, 11/15/2022 | | | |
New York, Metropolitan Transportation Authority Revenue, Series G-1, 2.21% (b), 11/7/2022, LOC: TD Bank NA | | | |
New York, State Mortgage Agency, Homeowner Mortgage Revenue, Series 195, 4.0%, 10/1/2046 | | | |
New York, State Transportation Development Corp., Special Facility Revenue, Delta Air Lines, Inc., LaGuardia Airport Terminals C&D Redevelopment, AMT, 5.0%, 1/1/2024 | | | |
New York, State Transportation Development Corp., Special Facility Revenue, Terminal 4 John F. Kennedy International Airport Project, AMT, 5.0%, 12/1/2028 | | | |
New York, Triborough Bridge & Tunnel Authority Revenue, Series A, 5.0%, 8/15/2024 | | | |
New York & New Jersey, Port Authority: | | | |
Series 226, AMT, 5.0%, 10/15/2027 | | | |
Series 226, AMT, 5.0%, 10/15/2028 | | | |
New York City, NY, Housing Development Corp., Multi-Family Mortgage Revenue, Series A, 1.125%, Mandatory Put 11/1/2024 @ 100, 5/1/2060 | | | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
| | |
New York, NY, General Obligation: | | | |
Series B-3, 2.53% (b), 11/1/2022 | | | |
Series 3, 2.53% (b), 11/7/2022 | | | |
Oyster Bay, NY, Public Improvement Refunding Bonds, 4.0%, 11/1/2027, INS: BAM | | | |
Troy, NY, Capital Resource Corp. Revenue, Rensselaer Polytechnic Institute: | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
North Carolina, Charlotte-Mecklenburg Hospital Health Care Authorirty Revenue, Series C, 5.0%, Mandatory Put 12/1/2028 @ 100, 1/15/2050 | | | |
North Carolina, State Housing Finance Agency, Home Ownership Revenue, Series 38-B, 4.0%, 7/1/2047 | | | |
| | | |
| |
North Dakota, State Housing Finance Agency, Home Mortgage Housing Finance Program: | | | |
Series B, MUNIPSA + 0.2%, 2.44% (a), Mandatory Put 7/1/2024 @100, 1/1/2043 | | | |
| | | |
| | | |
| |
Akron, OH, Income Tax Revenue, 4.0%, 12/1/2028 | | | |
Allen Country, OH, Hospital Facilities Revenue: | | | |
Series A, 5.0%, 12/1/2022 | | | |
Series A, 5.0%, 12/1/2023 | | | |
Cleveland, OH, Airport System Revenue: | | | |
Series A, 5.0%, 1/1/2023, INS: AGMC | | | |
Series A, AMT, 5.0%, 1/1/2025 | | | |
Ohio, Higher Educational Facilities Commission, University of Dayton: | | | |
| | | |
| | | |
Ohio, Port of Greater Cincinnati Development Authority Revenue, Convention Center Hotel Acquisition And Demolition Project, Series A, 3.0%, 5/1/2023 | | | |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
| | |
Ohio, State Turnpike Commission, Infrastructure Projects: | | | |
Series A, 5.0%, 2/15/2024 (c) | | | |
Series A, 5.0%, 2/15/2029 (c) | | | |
Series A, 5.0%, 2/15/2030 (c) | | | |
| | | |
| |
Oklahoma, State Development Finance Authority, Gilcrease Expressway West Project, Series A, AMT, 1.625%, 7/6/2023 | | | |
Oklahoma, State Municipal Power Authority, SIFMA Index, Series A, MUNIPSA + 0.39%, 2.63% (a), 1/1/2023 | | | |
| | | |
| |
Oregon, State Housing & Community Services Department, Mortgage Revenue, Series A, 3.5%, 7/1/2036 | | | |
Washington Multnomah & Yamhill Counties, OR, Hillsboro School District No. 1J, 5.0%, 6/15/2031 | | | |
| | | |
| |
Geisinger, PA, Authority Health System Revenue, Series B, 5.0%, Mandatory Put 2/15/2027 @ 100, 4/1/2043 | | | |
Pennsylvania, Commonwealth Financing Authority, Tobacco Master Settlement Payment Revenue Bonds, 5.0%, 6/1/2026 | | | |
Pennsylvania, Economic Development Financing Authority, Solid Waste Disposal Revenue, AMT, 2.25%, Mandatory Put 2/1/2023 @ 100, 8/1/2045 | | | |
Pennsylvania, State Housing Finance Agency, Single Family Mortgage Revenue: | | | |
Series 119, AMT, 3.5%, 10/1/2041 | | | |
Series 122, AMT, 4.0%, 10/1/2046 | | | |
Pittsburgh & Allegheny Counties, PA, Sports & Exhibition Authority Revenue, Series B, 5.0%, 2/1/2029, INS: AGMC | | | |
Pittsburgh, PA, Water & Sewer Authority Systems Revenue, Series C, MUNIPSA + 0.65%, 2.89% (a), Mandatory Put 12/1/2023 @ 100, 9/1/2040, INS: AGMC | | | |
| | | |
| |
South Dakota, Housing Development Authority, Homeownership Mortgage, Series B, 4.0%, 11/1/2047 | | | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
| | |
| |
Tennessee, Housing Development Agency, Residential Financing Program Revenue, Series 1C, AMT, 3.0%, 7/1/2038 | | | |
Tennessee, State Energy Acquisition Corp., Gas Revenue, Series A, 4.0%, Mandatory Put 5/1/2023 @ 100, 5/1/2048, GTY: Goldman Sachs Group, Inc. | | | |
| | | |
| |
Austin, TX, Water & Wastewater System Revenue, 5.0%, 11/15/2024 | | | |
Fort Bend, TX, Independent School District Variable Rate, Unlimited Tax Building and Refunding Bonds: | | | |
Series B, 0.875%, Mandatory Put 8/1/2025 @ 100, 8/1/2050 | | | |
Series B, 3.0%, Mandatory Put 8/1/2023 @ 100, 8/1/2052 | | | |
Harris County, TX, Spring Branch Independent School District, 5.0%, 2/1/2025 | | | |
Houston, TX, Airport Systems Revenue: | | | |
Series A, AMT, 5.0%, 7/1/2025 | | | |
Series A, AMT, 5.0%, 7/1/2026 | | | |
Series C, AMT, 5.0%, 7/1/2026 | | | |
Houston, TX, Hotel Occupancy Tax And Special Revenue, Convention and Entertainment Facilities Department, 5.0%, 9/1/2026 | | | |
Houston, TX, Independent School District, 4.0%, Mandatory Put 6/1/2023 @ 100, 6/1/2029 | | | |
New Hope, TX, Cultural Education Facilities Finance Corporation, Retirement Facility Revenue, Outlook at Windhaven Project, Series B3, 4.25%, 10/1/2026 | | | |
North Texas, Tollway Authority Revenue, Series B, 5.0%, 1/1/2025 | | | |
Texas, Grand Parkway Transportation Corp., 5.0%, 2/1/2023 | | | |
Texas, State Municipal Gas Acquisition & Supply Corp., III Gas Supply Revenue, 5.0%, 12/15/2029, GTY: Macquarie Group Ltd. | | | |
Texas, State Water Implementation Revenue, 5.0%, 10/15/2024 | | | |
| | | |
| |
Chesapeake Bay, VA, Bridge & Tunnel District Revenue, First Tier General Resolution, 5.0%, 11/1/2023 | | | |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
| | |
Louisa, VA, Industrial Development Authority, Pollution Control Revenue, Virginia Electric And Power Company Project, Series C, 1.65%, Mandatory Put 5/31/2024 @ 100, 11/1/2035 | | | |
Peninsula, VA, Ports Authority, Coal Terminal Revenue, Dominion Terminal Associates Project, Series 2003, 3.8%, Mandatory Put 10/1/2024 @ 100, 10/1/2033 | | | |
Virginia, Small Business Financing Authority Revenue, Elizabeth River Crossings OpCo., LLC Project, AMT, 4.0%, 7/1/2029 | | | |
| | | |
| |
King County, WA, Industrial Development Authority, Health Care Facilities Revenue, Cypress Cove At Healthpark Florida, Inc., Series A, MUNIPSA + 0.23%, 2.47% (a), Mandatory Put 1/1/2027 @ 100, 1/1/2040 | | | |
Seattle, WA, Municipal Light & Power Revenue: | | | |
Series B, MUNIPSA + 0.25%, 2.49% (a), Mandatory Put 11/1/2026 @ 100, 5/1/2045 | | | |
Series C-1, MUNIPSA + 0.49%, 2.73% (a), Mandatory Put 11/1/2023 @ 100, 11/1/2046 | | | |
Washington, Central Puget Sound Regional Transit Authority Sales & Use Taxes Revenue, Motor Vehicle Excise Tax Improvement, Green Bond, Series 2A, MUNIPSA + 0.2%, 2.44% (a), Mandatory Put 11/1/2026 @ 100, 11/1/2045 | | | |
Washington, Economic Development Finance Authority, Mura Cascade ELP LLC Project, 144A, AMT, 0.33%, Mandatory Put 12/8/2022 @ 100, 12/1/2041 | | | |
| | | |
| |
West Virginia, State Economic Development Authority, Solid Waste Disposal Facilities Revenue, Arch Resources Project, Series A, AMT, 4.125%, Mandatory Put 7/1/2025 @ 100, 7/1/2045 | | | |
| |
Wisconsin, General Obligation, Series 1, 5.0%, Mandatory Put 11/1/2025 @ 100, 5/1/2028 (c) | | | |
Wisconsin, State Health & Educational Facilities Authority Revenue, Advocate Aurora Health Credit Group, Series C-4, MUNIPSA + 0.65%, 2.89% (a), Mandatory Put 7/31/2024 @ 100, 8/15/2054 | | | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
| | |
Wisconsin, State Housing & Economic Development Authority, Series B, 4.0%, Mandatory Put 11/1/2025 @ 100, 11/1/2053 | | | |
Wisconsin, State Housing & Economic Development Authority, Home Ownership Revenue, Series A, AMT, 3.5%, 3/1/2046 | | | |
| | | |
| |
Federal Home Loan Mortgage Corp., Multi-Family Variable Rate Certificates, “A” , Series M-024, AMT, 2.304%, 5/15/2027 | | | |
Total Municipal Investments (Cost $209,037,999) | |
| | |
Open-End Investment Companies 0.3% | |
BlackRock Liquidity Funds MuniCash Portfolio, Institutional Shares, 1.83% (d) (Cost $508,952) | | | |
| | | |
Total Investment Portfolio (Cost $209,546,951) | | |
Other Assets and Liabilities, Net | | |
| | |
| Variable or floating rate security. These securities are shown at their current rate as of October 31, 2022. For securities based on a published reference rate and spread, the reference rate and spread are indicated within the description above. Certain variable rate securities are not based on a published reference rate and spread but adjust periodically based on current market conditions, prepayment of underlying positions and/or other variables. Securities with a floor or ceiling feature are disclosed at the inherent rate, where applicable. |
| Variable rate demand notes and variable rate demand preferred shares are securities whose interest rates are reset periodically (usually daily mode or weekly mode) by remarketing agents based on current market levels, and are not directly set as a fixed spread to a reference rate. These securities may be redeemed at par by the holder through a put or tender feature, and are shown at their current rates as of October 31, 2022. Date shown reflects the earlier of demand date or stated maturity date. |
| |
| Current yield; not a coupon rate. |
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
AGMC: Assured Guaranty Municipal Corp. |
AMT: Subject to alternative minimum tax. |
BAM: Build America Mutual |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
|
|
|
|
MUNIPSA: SIFMA Municipal Swap Index Yield |
SIFMA: Securities Industry and Financial Markets Association |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of October 31, 2022 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.
| | | | |
Municipal Investments (a) | | | | |
Open-End Investment Companies | | | | |
| | | | |
| See Investment Portfolio for additional detailed categorizations. |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
Statement of Assets and Liabilities
as of October 31, 2022
| |
Investment in securities, at value (cost $209,546,951) | |
Receivable for investments sold | |
Receivable for Fund shares sold | |
| |
| |
| |
| |
Payable for investments purchased — when-issued securities | |
Payable for Fund shares redeemed | |
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Other accrued expenses and payables | |
| |
| |
| |
Distributable earnings (loss) | |
| |
| |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
Statement of Assets and Liabilities as of October 31, 2022 (continued)
| |
| |
Net Asset Value and redemption price per share
($88,431,154 ÷ 9,270,863 outstanding shares of beneficial interest,
$.01 par value, unlimited number of shares authorized) | |
Maximum offering price per share (100 ÷ 97.75 of $9.54) | |
| |
Net Asset Value, offering and redemption price
(subject to contingent deferred sales charge) per share
($1,269,979 ÷ 133,209 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | |
| |
Net Asset Value, offering and redemption price per share
($24,333,780 ÷ 2,554,561 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | |
| |
Net Asset Value, offering and redemption price per share
($82,050,491 ÷ 8,599,647 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
Statement of Operations
for the year ended October 31, 2022
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Distribution and service fees | |
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Trustees' fees and expenses | |
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Total expenses before expense reductions | |
| |
Total expenses after expense reductions | |
| |
Realized and Unrealized Gain (Loss) | |
Net realized gain (loss) from investments | |
Change in net unrealized appreciation (depreciation) on investments | |
| |
Net increase (decrease) in net assets resulting from operations | |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
Statements of Changes in Net Assets
| |
Increase (Decrease) in Net Assets | | |
| | |
| | |
| | |
Change in net unrealized appreciation
(depreciation) | | |
Net increase (decrease) in net assets resulting from operations | | |
Distributions to shareholders: | | |
| | |
| | |
| | |
| | |
| | |
| | |
Proceeds from shares sold | | |
Reinvestment of distributions | | |
Payments for shares redeemed | | |
Net increase (decrease) in net assets from Fund share transactions | | |
Increase (decrease) in net assets | | |
Net assets at beginning of period | | |
Net assets at end of period | | |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
Financial Highlights
DWS Short-Term Municipal Bond Fund — Class A |
| |
| | | | | |
|
Net asset value, beginning of period | | | | | |
Income (loss) from investment operations: | | | | | |
| | | | | |
Net realized and unrealized gain (loss) | | | | | |
Total from investment operations | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net asset value, end of period | | | | | |
| | | | | |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions) | | | | | |
Ratio of expenses before expense reductions (%) | | | | | |
Ratio of expenses after expense reductions (%) | | | | | |
Ratio of net investment income (%) | | | | | |
Portfolio turnover rate (%) | | | | | |
| Based on average shares outstanding during the period. |
| Total return does not reflect the effect of any sales charges. |
| Total return would have been lower had certain expenses not been reduced. |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
DWS Short-Term Municipal Bond Fund — Class C |
| |
| | | | | |
|
Net asset value, beginning of period | | | | | |
Income (loss) from investment operations: | | | | | |
| | | | | |
Net realized and unrealized gain (loss) | | | | | |
Total from investment operations | | | | | |
| | | | | |
| | | | | |
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Net asset value, end of period | | | | | |
| | | | | |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions) | | | | | |
Ratio of expenses before expense reductions (%) | | | | | |
Ratio of expenses after expense reductions (%) | | | | | |
Ratio of net investment income (%) | | | | | |
Portfolio turnover rate (%) | | | | | |
| Based on average shares outstanding during the period. |
| Total return does not reflect the effect of any sales charges. |
| Total return would have been lower had certain expenses not been reduced. |
| Amount is less than $.005. |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
DWS Short-Term Municipal Bond Fund — Class S |
| |
| | | | | |
|
Net asset value, beginning of period | | | | | |
Income (loss) from investment operations: | | | | | |
| | | | | |
Net realized and unrealized gain (loss) | | | | | |
Total from investment operations | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net asset value, end of period | | | | | |
| | | | | |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions) | | | | | |
Ratio of expenses before expense reductions (%) | | | | | |
Ratio of expenses after expense reductions (%) | | | | | |
Ratio of net investment income (%) | | | | | |
Portfolio turnover rate (%) | | | | | |
| Based on average shares outstanding during the period. |
| Total return would have been lower had certain expenses not been reduced. |
The accompanying notes are an integral part of the financial statements.
DWS Short-Term Municipal Bond Fund | | |
DWS Short-Term Municipal Bond Fund — Institutional Class |
| |
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|
Net asset value, beginning of period | | | | | |
Income (loss) from investment operations: | | | | | |
| | | | | |
Net realized and unrealized gain (loss) | | | | | |
Total from investment operations | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net asset value, end of period | | | | | |
| | | | | |
Ratios to Average Net Assets and Supplemental Data |
Net assets, end of period ($ millions) | | | | | |
Ratio of expenses before expense reductions (%) | | | | | |
Ratio of expenses after expense reductions (%) | | | | | |
Ratio of net investment income (%) | | | | | |
Portfolio turnover rate (%) | | | | | |
| Based on average shares outstanding during the period. |
| Total return would have been lower had certain expenses not been reduced. |
The accompanying notes are an integral part of the financial statements.
| | DWS Short-Term Municipal Bond Fund |
Notes to Financial Statements
A.
Organization and Significant Accounting Policies
DWS Short-Term Municipal Bond Fund (the “Fund” ) is a diversified series of Deutsche DWS Municipal Trust (the “Trust” ), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act” ), as an open-end management investment company organized as a Massachusetts business trust.
The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are subject to an initial sales charge. Class C shares are not subject to an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Class C shares automatically convert to Class A shares in the same fund after 8 years, provided that the Fund or the financial intermediary through which the shareholder purchased the Class C shares has records verifying that the Class C shares have been held for at least 8 years. Class S shares are not subject to initial or contingent deferred sales charges and are available through certain intermediary relationships with financial services firms, or can be purchased by establishing an account directly with the Fund’s transfer agent. Institutional Class shares are not subject to initial or contingent deferred sales charges and are generally available only to qualified institutions.
Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.
The Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” ) which require the use of management estimates. Actual results could differ from those estimates. The Fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of U.S. GAAP. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading.
DWS Short-Term Municipal Bond Fund | | |
The Fund’s Board has designated DWS Investment Management Americas, Inc. (the “Advisor” ) as the valuation designee for the Fund pursuant to Rule 2a-5 under the 1940 Act. The Advisor’s Pricing Committee (the “Pricing Committee” ) typically values securities using readily available market quotations or prices supplied by independent pricing services (which are considered fair values under Rule 2a-5). The Advisor has adopted fair valuation procedures that provide methodologies for fair valuing securities.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
Municipal debt securities are valued at prices supplied by independent pricing services approved by the Pricing Committee, whose valuations are intended to reflect the mean between the bid and asked prices. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. If the pricing services are unable to provide valuations, the securities are valued at the mean of the most recent bid and asked quotations or evaluated prices, as applicable, obtained from broker-dealers. These securities are generally categorized as Level 2.
Preferred shares of closed-end investment companies held by the Fund are reflected as Level 2 because the securities are valued at amortized cost (which approximates fair value) and, accordingly, the inputs used to determine value are not quoted prices in an active market.
Investments in open-end investment companies are valued at their net asset value each business day and are categorized as Level 1.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Pricing Committee and are generally categorized as Level 3. In accordance with the Fund’s valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security’s disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or
| | DWS Short-Term Municipal Bond Fund |
pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company’s or issuer’s financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.
Disclosure about the classification of fair value measurements is included in a table following the Fund’s Investment Portfolio.
When-Issued/Delayed Delivery Securities. The Fund may purchase or sell securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time the Fund enters into a commitment to purchase or sell a security, the transaction is recorded and the value of the transaction is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations.
Certain risks may arise upon entering into when-issued or delayed delivery transactions from the potential inability of counterparties to meet the terms of their contracts or if the issuer does not issue the securities due to political, economic, or other factors. Additionally, losses may arise due to changes in the value of the underlying securities.
Federal Income Taxes. The Fund’s policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable and tax-exempt income to its shareholders.
At October 31, 2022, the Fund had net tax basis capital loss carryforwards of approximately $1,911,000, including short-term losses ($645,000) and long-term losses ($1,266,000), which may be applied against realized net taxable capital gains indefinitely.
The Fund has reviewed the tax positions for the open tax years as of October 31, 2022 and has determined that no provision for income tax and/or uncertain tax positions is required in the Fund’s financial statements. The Fund’s federal tax returns for the prior three fiscal years remain open subject to examination by the Internal Revenue Service.
Distribution of Income and Gains. Net investment income of the Fund is declared as a daily dividend and distributed to shareholders monthly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually. The Fund may also make additional distributions for tax purposes if necessary.
DWS Short-Term Municipal Bond Fund | | |
The timing and characterization of certain income and capital gain distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to premium amortization on debt securities. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.
At October 31, 2022, the Fund’s components of distributable earnings (accumulated losses) on a net tax basis were as follows:
Undistributed tax-exempt income | |
Capital loss carryforwards | |
Net unrealized appreciation (depreciation) on investments | |
At October 31, 2022, the aggregate cost of investments for federal income tax purposes was $210,143,488. The net unrealized depreciation for all investments based on tax cost was $8,948,317. This consisted of aggregate gross unrealized appreciation for all investments for which there was an excess of value over tax cost of $774,671 and aggregate gross unrealized depreciation for all investments for which there was an excess of tax cost over value of $9,722,988.
In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:
| |
| | |
Distributions from tax-exempt income | | |
Distributions from ordinary income* | | |
Distributions from long-term capital gains | | |
| For tax purposes, short-term capital gain distributions are considered ordinary income distributions. |
Expenses. Expenses of the Trust arising in connection with a specific fund are allocated to that fund. Other Trust expenses which cannot be directly attributed to a fund are apportioned among the funds in the Trust based upon the relative net assets or other appropriate measures.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against
| | DWS Short-Term Municipal Bond Fund |
the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes with the exception of securities in default of principal.
B.
Purchases and Sales of Securities
During the year ended October 31, 2022, purchases and sales of investment securities (excluding short-term investments) aggregated $286,241,699 and $378,646,225, respectively.
Management Agreement. Under the Investment Management Agreement with DWS Investment Management Americas, Inc. (“DIMA” or the “Advisor” ), an indirect, wholly owned subsidiary of DWS Group GmbH & Co. KGaA (“DWS Group” ), the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
Under the Investment Management Agreement with the Advisor, the Fund pays a monthly management fee based on the average daily net assets of the Fund, computed and accrued daily and payable monthly, at the following annual rates:
First $500 million of the Fund’s average daily net assets | |
Next $500 million of such net assets | |
Next $1.0 billion of such net assets | |
Over $2.0 billion of such net assets | |
Accordingly, for the year ended October 31, 2022, the fee pursuant to the Investment Management Agreement was equivalent to an annual rate (exclusive of any applicable waivers/reimbursements) of 0.30% of the Fund’s average daily net assets.
For the period from November 1, 2021 through September 30, 2022, the Advisor had contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the total annual operating expenses (excluding certain expenses
DWS Short-Term Municipal Bond Fund | | |
such as extraordinary expenses, taxes, brokerage and interest expense) of each class as follows:
Effective October 1, 2022 through September 30, 2023, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the total annual operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expense) of each class as follows:
For the year ended October 31, 2022, fees waived and/or expenses reimbursed for each class are as follows:
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee (“Administration Fee” ) of 0.097% of the Fund’s average daily net assets, computed and accrued daily and payable monthly. For the year ended October 31, 2022, the Administration Fee was $239,496, of which $16,630 is unpaid.
Service Provider Fees. DWS Service Company (“DSC” ), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent for the Fund. Pursuant to a sub-transfer agency agreement between DSC and DST Systems, Inc. (“DST” ), DSC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DSC compensates DST out of the shareholder servicing
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fee it receives from the Fund. For the year ended October 31, 2022, the amounts charged to the Fund by DSC were as follows:
| | Unpaid at
October 31, 2022 |
| | |
| | |
| | |
| | |
| | |
In addition, for the year ended October 31, 2022, the amounts charged to the Fund for recordkeeping and other administrative services provided by unaffiliated third parties, included in the Statement of Operations under “Services to shareholders,” were as follows:
Distribution and Service Fees. Under the Fund’s Class C 12b-1 Plan, DWS Distributors, Inc. (“DDI” ), an affiliate of the Advisor, receives a fee (“Distribution Fee” ) of 0.75% of the average daily net assets of Class C shares. In accordance with the Fund’s Underwriting and Distribution Services Agreement, DDI enters into related selling group agreements with various firms at various rates for sales of Class C shares. For the year ended October 31, 2022, the Distribution Fee was as follows:
| | Unpaid at
October 31, 2022 |
| | |
In addition, DDI provides information and administrative services for a fee (“Service Fee” ) to Class A and C shareholders at an annual rate of up to 0.25% of the average daily net assets for each such class. DDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder
DWS Short-Term Municipal Bond Fund | | |
accounts the firms service. For the year ended October 31, 2022, the Service Fee was as follows:
| | Unpaid at
October 31, 2022 | |
| | | |
| | | |
| | | |
Underwriting Agreement and Contingent Deferred Sales Charge. DDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended October 31, 2022 aggregated $70.
In addition, DDI receives any contingent deferred sales charge (“CDSC” ) from Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is 1% of the value of the shares redeemed for Class C. For the year ended October 31, 2022, the CDSC for Class C shares aggregated $30. A deferred sales charge of up to 0.75% is assessed on certain redemptions of Class A shares. For the year ended October 31, 2022, DDI received $10,018 for Class A shares.
Other Service Fees. Under an agreement with the Fund, DIMA is compensated for providing regulatory filing services to the Fund. For the year ended October 31, 2022, the amount charged to the Fund by DIMA included in the Statement of Operations under “Reports to shareholders” aggregated $1,550, of which $380 is unpaid.
Trustees' Fees and Expenses. The Fund paid retainer fees to each Trustee not affiliated with the Advisor, plus specified amounts to the Board Chairperson and to each committee Chairperson.
Transactions with Affiliates. The Fund may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is solely due to having a common investment adviser, common officers or common trustees. During the year ended October 31, 2022, the Fund engaged in securities purchases of $151,585,000 and securities sales of $153,740,000 with a net gain (loss) on securities sales of $0, with affiliated funds in compliance with Rule 17a-7 under the 1940 Act.
The Fund and other affiliated funds (the “Participants” ) share in a $375 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee, which is allocated based on net assets, among each of
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the Participants. Interest is calculated at a daily fluctuating rate per annum equal to the sum of 0.10% plus the higher of the Federal Funds Effective Rate and the Overnight Bank Funding Rate, plus 1.25%. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement. The Fund had no outstanding loans at October 31, 2022.
E.
Fund Share Transactions
The following table summarizes share and dollar activity in the Fund:
| Year Ended
October 31, 2022 | Year Ended
October 31, 2021 |
| | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Shares issued to shareholders in reinvestment of distributions |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
DWS Short-Term Municipal Bond Fund | | |
F.
Other — COVID-19 Pandemic
A novel coronavirus known as COVID-19, declared a pandemic by the World Health Organization, has caused significant uncertainty, market volatility, decreased economic and other activity, increased government activity, including economic stimulus measures, and supply chain interruptions. The full effects, duration and costs of the COVID-19 pandemic are impossible to predict, and the circumstances surrounding the COVID-19 pandemic will continue to evolve, including the risk of future increased rates of infection due to significant portions of the population remaining unvaccinated and/or the lack of effectiveness of current vaccines against new variants. The pandemic has affected and may continue to affect certain countries, industries, economic sectors, companies and investment products more than others, may exacerbate existing economic, political, or social tensions and may increase the probability of an economic recession or depression. The Fund and its investments may be adversely affected by the effects of the COVID-19 pandemic, and the pandemic may result in the Fund and its service providers experiencing operational difficulties in coordinating a remote workforce and implementing their business continuity plans, among others. Management will continue to monitor the impact COVID-19 has on the Fund and reflect the consequences as appropriate in the Fund’s accounting and financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Deutsche DWS Municipal Trust and Shareholders of DWS Short-Term Municipal Bond Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of DWS Short-Term Municipal Bond Fund (the “Fund” ) (one of the funds constituting Deutsche DWS Municipal Trust) (the “Trust” ), including the investment portfolio, as of October 31, 2022, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the four years in the period then ended and the related notes (collectively referred to as the “financial statements” ). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting Deutsche DWS Municipal Trust) at October 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the four years in the period then ended, in conformity with U.S. generally accepted accounting principles.
The financial highlights for the year ended October 31, 2018 were audited by another independent registered public accounting firm whose report, dated December 20, 2018, expressed an unqualified opinion on those financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB” ) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are
DWS Short-Term Municipal Bond Fund | | |
required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2022, by correspondence with the custodian, brokers and others; when replies were not received from brokers and others, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more investment companies in the DWS family of funds since at least 1979, but we are unable to determine the specific year.
Boston, Massachusetts
December 20, 2022
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Information About Your Fund’s Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads) and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses
with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done
so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (May 1, 2022 to October 31, 2022).
The tables illustrate your Fund’s expenses in two ways:
—
Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund’s actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the “Expenses Paid per $1,000” line under the share class you hold.
—
Hypothetical 5% Fund Return. This helps you to compare your Fund’s ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund’s actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The “Expenses Paid per $1,000” line of the tables is useful in comparing ongoing expenses only and will not help you determine the
relative total expense of owning different funds. Subject to certain exceptions, an account maintenance fee of $20.00 assessed once per calendar year for Classes A, C and S shares may apply for accounts with balances less than $10,000. This fee is not included in these tables. If it was, the estimate of expenses paid for Classes A, C and S shares during the period would be higher, and account value during the period would be lower, by this amount.
DWS Short-Term Municipal Bond Fund | | |
Expenses and Value of a $1,000 Investment
For the six months ended October 31, 2022 (Unaudited)
| | | | |
Beginning Account Value 5/1/22 | | | | |
Ending Account Value 10/31/22 | | | | |
Expenses Paid per $1,000* | | | | |
Hypothetical 5% Fund Return | | | | |
Beginning Account Value 5/1/22 | | | | |
Ending Account Value 10/31/22 | | | | |
Expenses Paid per $1,000* | | | | |
| Expenses are equal to the Fund’s annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by 184 (the number of days in the most recent six-month period), then divided by 365. |
Annualized Expense Ratios | | | | |
DWS Short-Term Municipal Bond Fund | | | | |
For more information, please refer to the Fund’s prospectus.
For an analysis of the fees associated with an investment in the Fund or similar funds, please refer to tools.finra.org/fund_analyzer/.
Tax Information (Unaudited)
The Fund paid distributions of $0.01 per share from net long-term capital gains during its year ended October 31, 2022.
Of the dividends paid from net investment income for the taxable year ended October 31, 2022, 98% are designated as exempt interest dividends for federal income tax purposes.
Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 728-3337.
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Advisory Agreement Board Considerations and Fee Evaluation
The Board of Trustees (hereinafter referred to as the “Board” or “Trustees” ) approved the renewal of DWS Short-Term Municipal Bond Fund’s (the “Fund” ) investment management agreement (the “Agreement” ) with DWS Investment Management Americas, Inc. (“DIMA” ) in September 2022.
In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:
—
During the entire process, all of the Fund’s Trustees were independent of DIMA and its affiliates (the “Independent Trustees” ).
—
The Board met frequently during the past year to discuss fund matters and dedicated a substantial amount of time to contract review matters. Over the course of several months, the Board reviewed extensive materials received from DIMA, independent third parties and independent counsel. These materials included an analysis of the Fund’s performance, fees and expenses, and profitability from a fee consultant retained by the Fund’s Independent Trustees (the “Fee Consultant” ).
—
The Board also received extensive information throughout the year regarding performance of the Fund.
—
The Independent Trustees regularly met privately with counsel to discuss contract review and other matters. In addition, the Independent Trustees were advised by the Fee Consultant in the course of their review of the Fund’s contractual arrangements and considered a comprehensive report prepared by the Fee Consultant in connection with their deliberations.
—
In connection with reviewing the Agreement, the Board also reviewed the terms of the Fund’s Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.
In connection with the contract review process, the Board considered the factors discussed below, among others. The Board also considered that DIMA and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DIMA managed the Fund. DIMA is part of DWS Group GmbH & Co. KGaA (“DWS Group” ). DWS Group is a global asset management business that offers a wide range of investing expertise and resources, including research capabilities in many countries throughout the world. In 2018, approximately 20% of DWS Group’s
DWS Short-Term Municipal Bond Fund | | |
shares were sold in an initial public offering, with Deutsche Bank AG owning the remaining shares.
As part of the contract review process, the Board carefully considered the fees and expenses of each DWS fund overseen by the Board in light of the fund’s performance. In many cases, this led to the negotiation and implementation of expense caps.
While shareholders may focus primarily on fund performance and fees, the Fund’s Board considers these and many other factors, including the quality and integrity of DIMA’s personnel and administrative support services provided by DIMA, such as back-office operations, fund valuations, and compliance policies and procedures.
Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DIMA provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DIMA provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel and the resources made available to such personnel. The Board also considered the risks to DIMA in sponsoring or managing the Fund, including financial, operational and reputational risks, the potential economic impact to DIMA from such risks and DIMA’s approach to addressing such risks. The Board reviewed the Fund’s performance over short-term and long-term periods and compared those returns to various agreed-upon performance measures, including market index(es) and a peer universe compiled using information supplied by Morningstar Direct (“Morningstar” ), an independent fund data service. The Board also noted that it has put into place a process of identifying “Funds in Review” (e.g., funds performing poorly relative to a peer universe), and receives additional reporting from DIMA regarding such funds and, where appropriate, DIMA’s plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that, for the one-, three- and five-year periods ended December 31, 2021, the Fund’s performance (Class A shares) was in the 2nd quartile, 2nd quartile and 3rd quartile, respectively, of the applicable Morningstar universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the three- and five-year periods and has underperformed its benchmark in the one-year period ended December 31, 2021.
Fees and Expenses. The Board considered the Fund’s investment management fee schedule, operating expenses and total expense ratios, and comparative information provided by Broadridge Financial Solutions, Inc. (“Broadridge” ) and the Fee Consultant regarding investment
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management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include a 0.097% fee paid to DIMA under the Fund’s administrative services agreement, were equal to the median of the applicable Broadridge peer group (based on Broadridge data provided as of December 31, 2021). The Board noted that the Fund’s Class A shares total (net) operating expenses (excluding 12b-1 fees) were expected to be higher than the median (3rd quartile) of the applicable Broadridge expense universe (based on Broadridge data provided as of December 31, 2021, and analyzing Broadridge expense universe Class A (net) expenses less any applicable 12b-1 fees) (“Broadridge Universe Expenses” ). The Board also reviewed data comparing each other operational share class’s total (net) operating expenses to the applicable Broadridge Universe Expenses. The Board noted that the expense limitations agreed to by DIMA were expected to help the Fund’s total (net) operating expenses remain competitive. The Board considered the Fund’s management fee rate as compared to fees charged by DIMA to comparable DWS U.S. registered funds (“DWS Funds” ) and considered differences between the Fund and the comparable DWS Funds. The information requested by the Board as part of its review of fees and expenses also included information about institutional accounts (including any sub-advised funds and accounts) and funds offered primarily to European investors (“DWS Europe Funds” ) managed by DWS Group. The Board noted that DIMA indicated that DWS Group does not manage any institutional accounts or DWS Europe Funds comparable to the Fund.
On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DIMA.
Profitability. The Board reviewed detailed information regarding revenues received by DIMA under the Agreement. The Board considered the estimated costs to DIMA, and pre-tax profits realized by DIMA, from advising the DWS Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DIMA and its affiliates with respect to all fund services in totality and by fund. The Board and the Fee Consultant reviewed DIMA’s methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DIMA in connection with the management of the Fund were not unreasonable. The Board also reviewed certain publicly available information regarding the profitability of certain similar investment management firms. The Board noted that, while information regarding the profitability of such firms is limited (and in some cases is not necessarily
DWS Short-Term Municipal Bond Fund | | |
prepared on a comparable basis), DIMA and its affiliates’ overall profitability with respect to the DWS Funds (after taking into account distribution and other services provided to the funds by DIMA and its affiliates) was lower than the overall profitability levels of most comparable firms for which such data was available.
Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund’s investment management fee schedule includes fee breakpoints. The Board concluded that the Fund’s fee schedule represents an appropriate sharing between the Fund and DIMA of such economies of scale as may exist in the management of the Fund at current asset levels.
Other Benefits to DIMA and Its Affiliates. The Board also considered the character and amount of other incidental or “fall-out” benefits received by DIMA and its affiliates, including any fees received by DIMA for administrative services provided to the Fund, any fees received by an affiliate of DIMA for transfer agency services provided to the Fund and any fees received by an affiliate of DIMA for distribution services. The Board also considered benefits to DIMA related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities. In addition, the Board considered the incidental public relations benefits to DIMA related to DWS Funds advertising and cross-selling opportunities among DIMA products and services. The Board considered these benefits in reaching its conclusion that the Fund’s management fees were reasonable.
Compliance. The Board considered the significant attention and resources dedicated by DIMA to its compliance processes in recent years. The Board noted in particular (i) the experience, seniority and time commitment of the individuals serving as DIMA’s and the Fund’s chief compliance officers and (ii) the substantial commitment of resources by DIMA and its affiliates to compliance matters, including the retention of compliance personnel.
Based on all of the information considered and the conclusions reached, the Board determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and counsel present. It is possible that individual Independent Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.
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Board Members and Officers
The following table presents certain information regarding the Board Members and Officers of the Trust/Corporation. Each Board Member’s year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Keith R. Fox, DWS Funds Board Chair, c/o Thomas R. Hiller, Ropes & Gray LLP, Prudential Tower, 800 Boylston
Street, Boston, MA 02199-3600. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the Trust/Corporation. Because the Fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period.
The Board Members may also serve in similar capacities with other funds in the fund complex. The number of funds in the DWS fund complex shown in the table below includes all registered open- and closed-end funds (including all of their portfolios) advised by the Advisor and any registered funds that have an investment advisor that is an affiliated person of the Advisor.
Independent Board Members/Independent Advisory Board Members
Name, Year of
Birth, Position
with the Trust/
Corporation
and Length of
| Business Experience and Directorships
During the Past Five Years | Number of
Funds in
DWS Fund
Complex
Overseen | Other
Directorships
Held by Board
Member |
Keith R. Fox, CFA (1954) Chairperson since 2017, and Board Member since 1996 | Managing General Partner, Exeter Capital Partners (a series of private investment funds) (since 1986). Directorships: Progressive International Corporation (kitchen goods designer and distributor); former Chairman, National Association of Small Business Investment Companies; Former Directorships: ICI Mutual Insurance Company; BoxTop Media Inc. (advertising); Sun Capital Advisers Trust (mutual funds) | | |
DWS Short-Term Municipal Bond Fund | | |
Name, Year of Birth, Position with the Trust/ Corporation and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
John W. Ballantine (1946) Board Member since 1999 | Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996–1998); Executive Vice President and Head of International Banking (1995–1996); Not-for-Profit Directorships: Window to the World Communications (public media); Life Director of Harris Theater for Music and Dance (Chicago); Life Director of Hubbard Street Dance Chicago; Former Directorships: Director and Chairman of the Board, Healthways, Inc.2 (population wellbeing and wellness services) (2003–2014); Stockwell Capital Investments PLC (private equity); Enron Corporation; FNB Corporation; Tokheim Corporation; First Oak Brook Bancshares, Inc.; Oak Brook Bank; Portland General Electric2 (utility company (2003–2021); and Prisma Energy International; Former Not-for-Profit Directorships: Public Radio International; Palm Beach Civic Assn. | | |
Dawn-Marie Driscoll (1946) Board Member since 1987 | Advisory Board and former Executive Fellow, Hoffman Center for Business Ethics, Bentley University; formerly: Partner, Palmer & Dodge (law firm) (1988–1990); Vice President of Corporate Affairs and General Counsel, Filene’s (retail) (1978–1988); Directorships: Trustee and former Chairman of the Board, Southwest Florida Community Foundation (charitable organization); Former Directorships: ICI Mutual Insurance Company (2007–2015); Sun Capital Advisers Trust (mutual funds) (2007–2012), Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees) | | |
| | DWS Short-Term Municipal Bond Fund |
Name, Year of Birth, Position with the Trust/ Corporation and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Richard J. Herring (1946) Board Member since 1990 | Jacob Safra Professor of International Banking and Professor of Finance, The Wharton School, University of Pennsylvania (since July 1972); formerly: Director, The Wharton Financial Institutions Center (1994–2020); Vice Dean and Director, Wharton Undergraduate Division (1995–2000) and Director, The Lauder Institute of International Management Studies (2000–2006); Member FDIC Systemic Risk Advisory Committee since 2011, member Systemic Risk Council since 2012 and member of the Advisory Board at the Yale Program on Financial Stability since 2013; Former Directorships: Co-Chair of the Shadow Financial Regulatory Committee (2003–2015), Executive Director of The Financial Economists Roundtable (2008–2015), Director of The Thai Capital Fund (2007–2013), Director of The Aberdeen Singapore Fund (2007–2018), Director, The Aberdeen Japan Fund (2007-2021) and Nonexecutive Director of Barclays Bank DE (2010–2018) | | |
William McClayton (1944) Board Member since 2004 | Private equity investor (since October 2009); formerly: Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001–2009); Senior Partner, Arthur Andersen LLP (accounting) (1966–2001); Former Directorships: Board of Managers, YMCA of Metropolitan Chicago; Trustee, Ravinia Festival | | |
Chad D. Perry (1972) Board Member or Advisory Board Member | Executive Vice President, General Counsel and Secretary, Tanger Factory Outlet Centers, Inc.2 (since 2011); formerly Executive Vice President and Deputy General Counsel, LPL Financial Holdings Inc.2 (2006–2011); Senior Corporate Counsel, EMC Corporation (2005–2006); Associate, Ropes & Gray LLP (1997–2005) | | Director - Great Elm Capital Corp. (business development company) (since 2022) |
DWS Short-Term Municipal Bond Fund | | |
Name, Year of Birth, Position with the Trust/ Corporation and Length of Time Served1 | Business Experience and Directorships During the Past Five Years | Number of Funds in DWS Fund Complex Overseen | Other Directorships Held by Board Member |
Rebecca W. Rimel (1951) Board Member since 1995 | Director, The Bridgespan Group (nonprofit organization) (since October 2020); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983–2004); Board Member, Investor Education (charitable organization) (2004–2005); Former Directorships: Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001–2007); Director, Viasys Health Care2 (January 2007–June 2007); Trustee, Thomas Jefferson Foundation (charitable organization) (1994–2012); President, Chief Executive Officer and Director (1994–2020) and Senior Advisor (2020-2021), The Pew Charitable Trusts (charitable organization); Director, BioTelemetry Inc.2 (acquired by Royal Philips in 2021) (healthcare) (2009–2021); Director, Becton Dickinson and Company2 (medical technology company) (2012-2022) | | |
Catherine Schrand (1964) Board Member or Advisory Board Member | Celia Z. Moh Professor of Accounting (since 2016) and Professor of Accounting (since 1994), The Wharton School, University of Pennsylvania; formerly Vice Dean, Wharton Doctoral Programs (2016–2019) | | |
William N. Searcy, Jr. (1946) Board Member since 1993 | Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989–September 2003); Former Directorships: Trustee, Sun Capital Advisers Trust (mutual funds) (1998–2012) | | |
| | DWS Short-Term Municipal Bond Fund |
Officers5
Name, Year of Birth, Position
with the Trust/Corporation
and Length of Time Served6 | Business Experience and Directorships During the
Past Five Years |
Hepsen Uzcan7 (1974) President and Chief Executive Officer, 2017–present | Fund Administration (Head since 2017), DWS; Secretary, DWS USA Corporation (2018–present); Assistant Secretary, DWS Distributors, Inc. (2018–present); Director and Vice President, DWS Service Company (2018–present); Assistant Secretary, DWS Investment Management Americas, Inc. (2018–present); Director and President, DB Investment Managers, Inc. (2018–present); President and Chief Executive Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2017–present); formerly: Vice President for the Deutsche funds (2016–2017); Assistant Secretary for the DWS funds (2013–2019); Assistant Secretary, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2013–2020); Directorships: Interested Director, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (since June 25, 2020); ICI Mutual Insurance Company (since October 16, 2020); and Episcopalian Charities of New York (2018–present) |
John Millette8 (1962) Vice President and Secretary, 1999–present | Legal (Associate General Counsel), DWS; Chief Legal Officer, DWS Investment Management Americas, Inc. (2015–present); Director and Vice President, DWS Trust Company (2016–present); Secretary, DBX ETF Trust (2020–present); Vice President, DBX Advisors LLC (2021–present); Secretary, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. 2011–present); formerly: Secretary, Deutsche Investment Management Americas Inc. (2015–2017); and Assistant Secretary, DBX ETF Trust (2019–2020) |
Ciara Crawford9 (1984) Assistant Secretary, (2019–present) | Fund Administration (Specialist), DWS (2015–present); formerly, Legal Assistant at Accelerated Tax Solutions |
Diane Kenneally8 (1966) Chief Financial Officer and Treasurer, 2018–present | Fund Administration Treasurer’s Office (Co-Head since 2018), DWS; Treasurer, Chief Financial Officer and Controller, DBX ETF Trust (2019–present); Treasurer and Chief Financial Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018–present); formerly: Assistant Treasurer for the DWS funds (2007–2018) |
Paul Antosca8 (1957) Assistant Treasurer, 2007–present | Fund Administration Tax (Head), DWS; and Assistant Treasurer, DBX ETF Trust (2019–present) |
Sheila Cadogan8 (1966) Assistant Treasurer, 2017–present | Fund Administration Treasurer’s Office (Co-Head since 2018), DWS; Director and Vice President, DWS Trust Company (2018–present); Assistant Treasurer, DBX ETF Trust (2019–present); Assistant Treasurer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018–present) |
Scott D. Hogan8 (1970) Chief Compliance Officer, 2016–present | Anti-Financial Crime & Compliance US (Senior Team Lead), DWS; Chief Compliance Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2016–present) |
DWS Short-Term Municipal Bond Fund | | |
Name, Year of Birth, Position with the Trust/Corporation and Length of Time Served6 | Business Experience and Directorships During the Past Five Years |
Caroline Pearson8 (1962) Chief Legal Officer, 2010–present | Legal (Senior Team Lead), DWS; Assistant Secretary, DBX ETF Trust (2020–present); Chief Legal Officer, DBX Advisors LLC (2020–present); Chief Legal Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2012–present); formerly: Secretary, Deutsche AM Distributors, Inc. (2002–2017); Secretary, Deutsche AM Service Company (2010–2017); and Chief Legal Officer, DBX Strategic Advisors LLC (2020–2021) |
Christian Rijs7 (1980) Anti-Money Laundering
Compliance Officer,
since October 6, 2021 | Senior Team Lead Anti-Financial Crime and Compliance, DWS; AML Officer, DWS Trust Company (since November 2, 2021); AML Officer, DBX ETF Trust (since October 21, 2021); AML Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (since November 12, 2021); formerly: DWS UK & Ireland Head of Anti-Financial Crime and MLRO |
| The length of time served represents the year in which the Board Member joined the board of one or more DWS funds currently overseen by the Board. |
| A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. |
| Mr. Perry and Ms. Schrand are Advisory Board Members of Deutsche DWS Asset Allocation Trust, Deutsche DWS Equity 500 Index Portfolio, Deutsche DWS Global/International Fund, Inc., Deutsche DWS Income Trust, Deutsche DWS Institutional Funds, Deutsche DWS International Fund, Inc., Deutsche DWS Investment Trust, Deutsche DWS Investments VIT Funds, Deutsche DWS Money Market Trust, Deutsche DWS Municipal Trust, Deutsche DWS Portfolio Trust, Deutsche DWS Securities Trust, Deutsche DWS Tax Free Trust, Deutsche DWS Variable Series I and Government Cash Management Portfolio. Mr. Perry and Ms. Schrand are Board Members of each other Trust. |
| Mr. Perry and Ms. Schrand oversee 21 funds in the DWS Fund Complex as Board Members of various Trusts. Mr. Perry and Ms. Schrand are Advisory Board Members of various Trusts/Corporations comprised of 49 funds in the DWS Fund Complex. |
| As a result of their respective positions held with the Advisor or its affiliates, these individuals are considered “interested persons” of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the Fund. |
| The length of time served represents the year in which the officer was first elected in such capacity for one or more DWS funds. |
| Address: 875 Third Avenue, New York, NY 10022. |
| Address: 100 Summer Street, Boston, MA 02110. |
| Address: 5201 Gate Parkway, Jacksonville, FL 32256. |
Certain officers hold similar positions for other investment companies for which DIMA or an affiliate serves as the Advisor.
The Fund’s Statement of Additional Information (“SAI” ) includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 728-3337.
| | DWS Short-Term Municipal Bond Fund |
Account Management Resources
| The automated telephone system allows you to access personalized account information and obtain information on other DWS funds using either your voice or your telephone keypad. Certain account types within Classes A, C and S also have the ability to purchase, exchange or redeem shares using this system. |
For more information, contact your financial representative. You may also access our automated telephone system or speak with a Shareholder Service representative by calling: (800) 728-3337 |
| dws.com View your account transactions and balances, trade shares, monitor your asset allocation, subscribe to fund and account updates by e-mail, and change your address, 24 hours a day. |
Obtain prospectuses and applications, news about DWS funds, insight from DWS economists and investment specialists and access to DWS fund account information. |
| DWS PO Box 219151 Kansas City, MO 64121-9151 |
| The Fund’s policies and procedures for voting proxies for portfolio securities and information about how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 are available on our Web site — dws.com/en-us/resources/proxy-voting — or on the SEC’s Web site — sec.gov. To obtain a written copy of the Fund’s policies and procedures without charge, upon request, call us toll free at (800) 728-3337. |
| Following the Fund’s fiscal first and third quarter-end, a complete portfolio holdings listing is posted on dws.com, and is available free of charge by contacting your financial intermediary, or if you are a direct investor, by calling (800) 728-3337. In addition, the portfolio holdings listing is filed with SEC on the Fund’s Form N-PORT and will be available on the SEC’s Web site at sec.gov. Additional portfolio holdings for the Fund are also posted on dws.com from time to time. Please see the Fund’s current prospectus for more information. |
| If you have questions, comments or complaints, contact: DWS Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148 |
DWS Short-Term Municipal Bond Fund | | |
| DWS Investment Management Americas, Inc. (“DIMA” or the “Advisor” ), which is part of the DWS Group GmbH & Co. KGaA (“DWS Group” ), is the investment advisor for the Fund. DIMA and its predecessors have more than 90 years of experience managing mutual funds and DIMA provides a full range of investment advisory services to both institutional and retail clients. DIMA is an indirect, wholly owned subsidiary of DWS Group. |
| DWS Group is a global organization that offers a wide range of investing expertise and resources, including hundreds of portfolio managers and analysts and an office network that reaches the world’s major investment centers. This well-resourced global investment platform brings together a wide variety of experience and investment insight across industries, regions, asset classes and investing styles. |
| | DWS Short-Term Municipal Bond Fund |
222 South Riverside Plaza
Chicago, IL 60606-5808
DSTMBF-2
(R-024968-12 12/22)
| | |
| | (b) Not applicable |
| | |
| ITEM 2. | CODE OF ETHICS |
| | |
| | As of the end of the period covered by this report, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR that applies to its Principal Executive Officer and Principal Financial Officer. There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2. A copy of the code of ethics is filed as an exhibit to this Form N-CSR. |
| | |
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT |
| | |
| | The fund’s audit committee is comprised solely of trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The fund’s Board of Trustees has determined that there are several "audit committee financial experts" (as such term has been defined by the Regulations) serving on the fund’s audit committee including Mr. William McClayton, the chair of the fund’s audit committee. An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933 and the designation or identification of a person as an “audit committee financial expert” does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. |
| | |
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
| | |
DWS short term municipal bond Fund
form n-csr disclosure re: AUDIT FEES
The following table shows the amount of fees that Ernst & Young LLP (“EY”), the Fund’s Independent Registered Public Accounting Firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that EY provided to the Fund.
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund
Fiscal Year
Ended
October 31, | Audit Fees Billed to Fund | Audit-Related
Fees Billed to Fund | Tax Fees Billed to Fund | All
Other Fees Billed to Fund |
| 2022 | $37,936 | $0 | $7,879 | $0 |
| 2021 | $39,933 | $0 | $7,879 | $0 |
The above “Tax Fees” were billed for professional services rendered for tax preparation.
Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers
The following table shows the amount of fees billed by EY to DWS Investment Management Americas, Inc. (“DIMA” or the “Adviser”), and any entity controlling, controlled by or under common control with DIMA (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.
Fiscal Year
Ended
October 31, | Audit-Related
Fees Billed to Adviser and Affiliated Fund Service Providers | Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All
Other Fees Billed to Adviser and Affiliated Fund Service Providers |
| 2022 | $0 | $32,448 | $0 |
| 2021 | $0 | $487,049 | $0 |
The above “Tax Fees” were billed in connection with tax compliance services and agreed upon procedures.
Non-Audit Services
The following table shows the amount of fees that EY billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that EY provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from EY about any non-audit services that EY rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating EY’s independence.
Fiscal Year
Ended
October 31, | Total
Non-Audit Fees Billed to Fund
(A) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund)
(B) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements)
(C) | Total of
(A), (B) and (C) |
| 2022 | $7,879 | $32,448 | $0 | $40,327 |
| 2021 | $7,879 | $487,049 | $0 | $494,928 |
All other engagement fees were billed for services in connection with agreed upon procedures and tax compliance for DIMA and other related entities.
Audit Committee Pre-Approval Policies and Procedures. Generally, each Fund’s Audit Committee must pre approve (i) all services to be performed for a Fund by a Fund’s Independent Registered Public Accounting Firm and (ii) all non-audit services to be performed by a Fund’s Independent Registered Public Accounting Firm for the DIMA Entities with respect to operations and financial reporting of the Fund, except that the Chairperson or Vice Chairperson of each Fund’s Audit Committee may grant the pre-approval for non-audit services described in items (i) and (ii) above for non-prohibited services for engagements of less than $100,000. All such delegated pre approvals shall be presented to each Fund’s Audit Committee no later than the next Audit Committee meeting.
There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.
According to the registrant’s principal Independent Registered Public Accounting Firm, substantially all of the principal Independent Registered Public Accounting Firm's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal Independent Registered Public Accounting Firm.
***
In connection with the audit of the 2021 and 2022 financial statements, the Fund entered into an engagement letter with EY. The terms of the engagement letter required by EY, and agreed to by the Audit Committee, include a provision mandating the use of mediation and arbitration to resolve any controversy or claim between the parties arising out of or relating to the engagement letter or services provided thereunder.
***
Pursuant to PCAOB Rule 3526, EY is required to describe in writing to the Fund’s Audit Committee, on at least an annual basis, all relationships between EY, or any of its affiliates, and the DWS Funds, including the Fund, or persons in financial reporting oversight roles at the DWS Funds that, as of the date of the communication, may reasonably be thought to bear on EY’s independence. Pursuant to PCAOB Rule 3526, EY has reported the matters set forth below that may reasonably be thought to bear on EY’s independence. With respect to each reported matter in the aggregate, EY advised the Audit Committee that, after careful consideration of the facts and circumstances and the applicable independence rules, it concluded that the matters do not and will not impair EY’s ability to exercise objective and impartial judgement in connection with the audits of the financial statements for the Fund and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY has been and is capable of exercising objective and impartial judgment on all issues encompassed within EY’s audit engagements. EY also confirmed to the Audit Committee that it can continue to act as the Independent Registered Public Accounting Firm for the Fund.
| · | EY advised the Fund’s Audit Committee that various covered persons within EY and EY’s affiliates held investments in, or had other financial relationships with, entities within the DWS Funds “investment company complex” (as defined in Regulation S-X) (the “DWS Funds Complex”). EY informed the Audit Committee that these investments and financial relationships were inconsistent with Rule 2-01(c)(1) of Regulation S-X. EY reported that all breaches have been resolved and that none of the breaches involved any professionals who were part of the audit engagement team for the Fund or in the position to influence the audit engagement team for the Fund. |
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| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS |
| | |
| | Not applicable |
| | |
| ITEM 6. | SCHEDULE OF INVESTMENTS |
| | |
| | Not applicable |
| | |
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
| | |
| | Not applicable |
| | |
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
| | |
| | Not applicable |
| | |
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS |
| | |
| | Not applicable |
| | |
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
| | |
| | There were no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board. The primary function of the Nominating and Governance Committee is to identify and recommend individuals for membership on the Board and oversee the administration of the Board Governance Guidelines. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Keith R. Fox, DWS Funds Board Chair, c/o Thomas R. Hiller, Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston, MA 02199-3600. |
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| ITEM 11. | CONTROLS AND PROCEDURES |
| | |
| | (a) | The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. |
| | |
| | (b) | There have been no changes in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. |
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| ITEM 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies |
| | |
| | Not applicable |
| | |
| ITEM 13. | EXHIBITS |
| | |
| | (a)(1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
| | |
| | (a)(2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
| | |
| | (b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Registrant: | DWS Short-Term Municipal Bond Fund, a series of Deutsche DWS Municipal Trust |
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| | |
| By: | /s/Hepsen Uzcan Hepsen Uzcan President |
| | |
| Date: | 12/29/2022 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/Hepsen Uzcan Hepsen Uzcan President |
| | |
| Date: | 12/29/2022 |
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| | |
| | |
| By: | /s/Diane Kenneally Diane Kenneally Chief Financial Officer and Treasurer |
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| Date: | 12/29/2022 |
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