UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
| Investment Company Act file number | 811-04765 |
| | |
| | BNY Mellon New York AMT-Free Municipal Bond Fund | |
| | (Exact name of Registrant as specified in charter) | |
| | | |
| | c/o BNY Mellon Investment Adviser, Inc. 240 Greenwich Street New York, New York 10286 | |
| | (Address of principal executive offices) (Zip code) | |
| | | |
| | Deirdre Cunnane, Esq. 240 Greenwich Street New York, New York 10286 | |
| | (Name and address of agent for service) | |
| |
| Registrant's telephone number, including area code: | (212) 922-6400 |
| | |
Date of fiscal year end: | 11/30 | |
| Date of reporting period: | 05/31/23 | |
| | | | | | | |
FORM N-CSR
| Item 1. | Reports to Stockholders. |
BNY Mellon New York AMT-Free Municipal Bond Fund
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SEMI-ANNUAL REPORT May 31, 2023 |
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The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
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Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from December 1, 2022, through May 31, 2023, as provided by Thomas Casey and Daniel Rabasco, portfolio managers employed by the fund’s sub-adviser, Insight North America LLC
Market and Fund Performance Overview
For the six-month period ended May 31, 2023, BNY Mellon New York AMT-Free Municipal Bond Fund’s (the “fund”) Class A shares produced a total return of 2.05%, Class C shares returned 1.67%, Class I shares returned 2.18% and Class Y shares returned 2.28%.1 In comparison, the Bloomberg U.S. Municipal Bond Index (the “Index”), the fund’s benchmark index, which is composed of bonds issued nationally and not solely within New York, provided a total return of 1.94% for the same period.2
Municipal bonds posted gains during the reporting period. The fund’s Class A, I and Y shares outperformed the Index, while Class C shares lagged slightly. The fund’s relative performance was mainly due to its longer duration, and its exposure to longer-dated revenue bonds.
The Fund’s Investment Approach
The fund seeks to maximize current income exempt from federal, New York State and New York City income taxes to the extent consistent with the preservation of capital. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in municipal bonds that provide income exempt from federal, New York State and New York City income taxes, and the federal alternative minimum tax. The fund invests at least 70% of its assets in municipal bonds rated, at the time of purchase, investment grade (i.e., Baa/BBB or higher) or the unrated equivalent as determined by the fund’s sub-adviser, Insight North America LLC (“INA”). For additional yield, the fund may invest up to 30% of its assets in municipal bonds rated below investment grade (“high yield” or “junk” bonds) or the unrated equivalent as determined by INA. The dollar-weighted, average maturity of the fund’s portfolio normally exceeds ten years, but the fund may invest without regard to maturity. A bond’s maturity is the length of time until the principal must be fully repaid with interest. Dollar-weighted, average maturity is an average of the stated maturities of the securities held by the fund, based on their dollar-weighted proportions in the fund.
We focus on identifying undervalued sectors and securities. To select municipal bonds for the fund, we estimate and analyze the relative value of various sectors and securities and may actively trade among sectors and securities based on this analysis.
Market Rebounds as Inflation Retreats, Rate Hikes Ease
During the reporting period, the municipal bond market experienced volatility driven by economic uncertainty, rising inflation and geopolitical risk. While employment remained strong, the outcome of the Fed’s tightening policy was uncertain, with investors fearing that an economic slowdown was becoming more likely. Toward the end of the period, inflation began to ease, and investors began to anticipate the end of the Fed’s rate hikes.
Inflation measures began to come down from multidecade highs during the first part of the reporting period. The Fed continued increasing the federal funds rate, raising it four times between December 1, 2022, and May 31, 2023. The Fed’s increases were more moderate
2
than previous hikes, with three of the four amounting to just 25 basis points. By the end of the period, the federal funds target rate was 5.00%–5.25%, up from 3.75%–4.00% at the start of the period.
The economy remained relatively strong during the reporting period, with GDP continuing to bounce back from two negative quarters in the first half of 2022. GDP rose 2.6% in the fourth quarter of 2022 and 1.3% in the first quarter of 2023.
For much of the period, the persistence of inflation, combined with measures from the Fed to combat it, led to significant outflows from municipal bond mutual funds. The need for fund managers to meet redemptions only added to the downward momentum.
While headwinds prevailed over most of the period, credit fundamentals in the municipal market remained strong. In addition, turmoil resulted in more attractive valuations in many segments of the market, creating the potential for outperformance in the future.
Late in 2022, municipal bonds began to rebound as inflation abated; economic indicators suggested a recession was on the horizon; and investors began to anticipate the end of the Fed’s rate-hiking cycle. A perception that the stress on regional banks resulting from the banking crisis would help slow the economy also supported the market.
While Treasury yields during the reporting period remained flat to down, yields in the municipal bond market largely increased. In May 2023, volatility increased, in part due to technical factors, including elevated supply. In addition, uncertainty about the Fed’s interest rate decision at its June 2023 meeting and whether it would begin to cut rates later in the year added to volatility as well. Ongoing concerns about inflation also played a large role in the increase in market volatility. Much of this occurred at the short end of the municipal bond yield curve which underperformed as short-term rates rose to a greater degree than intermediate rate and produced a greater inversion in May. As a result of the market volatility, outflows from municipal bond mutual funds increased which hurt valuations.
Duration, Curve Positioning and Revenue Bonds Supported Performance
The fund’s performance was aided primarily by its exposure to intermediate longer bonds, especially those with 10-year maturities, which outperformed the short end of the curve. In addition, an overweight to revenue bonds was beneficial. Within this sector, the fund’s positions in the airport and transportation segments were especially advantageous. Positioning in industrial development bonds also added to relative returns, as did an underweight to local general obligation bonds. Security selection added to relative performance as well, and New York bonds as a whole also performed well versus the broader market.
On the other hand, the fund’s emphasis on higher-quality essential service sectors was detrimental as they lagged lower-quality sectors. These high-quality sectors included education and special tax. The fund did not use derivatives during the reporting period.
Credit Quality Strong, but Challenges Remain
Looking further ahead, the Fed, having raised rates to 5.25%, has signaled a “hawkish pause” in its rate hiking regime. The central bank however has put the markets on notice that further rate hikes are likely in 2023 barring a major retreat in inflation. If signs emerge that inflation may be easing sooner, the Fed may begin to slow the pace of its interest rate
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
increases and reach the end of its tightening cycle, which should benefit the municipal bond market. Currently, we forecast one more hike in 2023 and then cuts beginning in the middle of 2024.
Fundamentally, New York continues to exhibit strong credit characteristics having benefitted from federal covid relief dollars and economic growth. Recently, tax collections have softened; however, the state had increased its rainy-day reserve fund as a buffer to the fiscal impact of economic slowdown. Also, New York pension funding is strong. New York City has also built up strong reserves to help handle an economic slowdown’s impact on its finances. While the prevalence of hybrid work solutions has impacted ridership on the Metropolitan Transportation Authority (MTA), recent financially supportive moves by both the state and New York City are a credit positive. Additionally, ridership on MTA has rebounded from depressed COVID levels.
June 15, 2023
1 Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Class I and Class Y are not subject to any initial or deferred sales charge. Past performance is no guarantee of future results. Share price, yield and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. Income may be subject to state and local taxes for non-New York residents. Capital gains, if any, are fully taxable.
The fund’s returns reflect the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an agreement in effect through March 31, 2024, at which time it may be extended, modified or terminated. Had these expenses not been absorbed, returns would have been lower.
2 Source: Lipper Inc. — The Bloomberg U.S. Municipal Bond Index covers the U.S. dollar-denominated, long-term, tax-exempt bond market. Investors cannot invest directly in any index.
Bonds are subject generally to interest-rate, credit, liquidity and market risks, to varying degrees, all of which are more fully described in the fund’s prospectus. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes, and rate increases can cause price declines.
The amount of public information available about municipal securities is generally less than that for corporate equities or bonds. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the fund’s investments in municipal securities. Other factors include the general conditions of the municipal securities market, the size of the particular offering, the maturity of the obligation and the rating of the issue. Changes in economic, business or political conditions relating to a particular municipal project, municipality or state in which the fund invests may have an impact on the fund’s share price.
References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations.
4
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon New York AMT-Free Municipal Bond Fund from December 1, 2022 to May 31, 2023. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
| | | | | | | |
Expenses and Value of a $1,000 Investment | |
Assume actual returns for the six months ended May 31, 2023 | |
| | | | | | |
| | Class A | Class C | Class I | Class Y | |
Expenses paid per $1,000† | $4.48 | $8.20 | $3.18 | $3.18 | |
Ending value (after expenses) | $1,020.50 | $1,016.70 | $1,021.80 | $1,022.80 | |
COMPARING YOUR FUND’S EXPENSES WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
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Expenses and Value of a $1,000 Investment | |
Assuming a hypothetical 5% annualized return for the six months ended May 31, 2023 | |
| | | | | | |
| | Class A | Class C | Class I | Class Y | |
Expenses paid per $1,000† | $4.48 | $8.20 | $3.18 | $3.18 | |
Ending value (after expenses) | $1,020.49 | $1,016.80 | $1,021.79 | $1,021.79 | |
† | Expenses are equal to the fund’s annualized expense ratio of .89% for Class A, 1.63% for Class C, .63% for Class I and .63% for Class Y, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). |
5
STATEMENT OF INVESTMENTS
May 31, 2023 (Unaudited)
| | | | | | | | | | |
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Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% | | | | | |
New York - 97.7% | | | | | |
Albany Capital Resource Corp., Revenue Bonds (Equitable School Revolving Fund Obligated Group) Ser. D | | 4.00 | | 11/1/2051 | | 3,125,000 | | 2,742,788 | |
Brookhaven Local Development Corp., Revenue Bonds (Jefferson's Ferry Project) Ser. B | | 4.00 | | 11/1/2045 | | 590,000 | | 477,412 | |
Broome County Local Development Corp., Revenue Bonds, Refunding (Good Shepherd Village at Endwell Obligated Group) | | 4.00 | | 1/1/2047 | | 1,160,000 | | 846,411 | |
Broome County Local Development Corp., Revenue Bonds, Refunding (United Health Services Hospitals Obligated Group) (Insured; Assured Guaranty Municipal Corp.) | | 4.00 | | 4/1/2050 | | 1,000,000 | | 904,318 | |
Build New York City Resource Corp., Revenue Bonds (Classical Charter School Project) | | 4.50 | | 6/15/2043 | | 700,000 | | 661,068 | |
Build New York City Resource Corp., Revenue Bonds (KIPP NYC Public Charter Schools) | | 5.25 | | 7/1/2057 | | 2,000,000 | | 2,028,928 | |
Build New York City Resource Corp., Revenue Bonds (NY Preparatory Charter School Project) Ser. A | | 4.00 | | 6/15/2051 | | 500,000 | a | 371,063 | |
Build New York City Resource Corp., Revenue Bonds (NY Preparatory Charter School Project) Ser. A | | 4.00 | | 6/15/2041 | | 525,000 | a | 427,798 | |
Build New York City Resource Corp., Revenue Bonds, Refunding (New York Methodist Hospital Project) | | 5.00 | | 7/1/2024 | | 400,000 | b | 406,484 | |
Build New York City Resource Corp., Revenue Bonds, Refunding (YMCA of Greater New York Project) | | 5.00 | | 8/1/2025 | | 1,000,000 | b | 1,039,681 | |
Dutchess County Local Development Corp., Revenue Bonds (Health Quest Systems) Ser. B | | 4.00 | | 7/1/2041 | | 2,585,000 | | 2,254,662 | |
Dutchess County Local Development Corp., Revenue Bonds (Health Quest Systems) Ser. B | | 5.00 | | 7/1/2035 | | 2,000,000 | | 2,011,983 | |
Dutchess County Local Development Corp., Revenue Bonds (Health Quest Systems) Ser. B | | 5.00 | | 7/1/2032 | | 1,000,000 | | 1,010,073 | |
6
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
Glen Cove Local Economic Assistance Corp., Revenue Bonds (Garvies Point Public Improvement Project) Ser. B | | 0.00 | | 1/1/2045 | | 5,900,000 | c | 1,499,273 | |
Hempstead Town Local Development Corp., Revenue Bonds, Refunding (Molloy College Project) | | 5.00 | | 7/1/2034 | | 810,000 | | 833,110 | |
Hudson Yards Infrastructure Corp., Revenue Bonds, Refunding, Ser. A | | 5.00 | | 2/15/2039 | | 2,000,000 | | 2,094,304 | |
Long Island Power Authority, Revenue Bonds | | 5.00 | | 9/1/2047 | | 1,000,000 | | 1,055,098 | |
Long Island Power Authority, Revenue Bonds, Refunding, Ser. A | | 4.00 | | 9/1/2039 | | 3,000,000 | | 2,986,388 | |
Long Island Power Authority, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 9/1/2036 | | 1,500,000 | | 1,678,214 | |
Long Island Power Authority, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 9/1/2034 | | 1,500,000 | | 1,522,736 | |
Long Island Power Authority, Revenue Bonds, Refunding, Ser. B | | 5.00 | | 9/1/2036 | | 1,000,000 | | 1,049,843 | |
Long Island Power Authority, Revenue Bonds, Ser. B | | 5.00 | | 9/1/2037 | | 1,700,000 | | 1,736,249 | |
Metropolitan Transportation Authority, Revenue Bonds, Refunding, Ser. B | | 5.00 | | 11/15/2037 | | 1,750,000 | | 1,786,320 | |
Metropolitan Transportation Authority, Revenue Bonds, Refunding, Ser. C1 | | 5.00 | | 11/15/2034 | | 2,260,000 | | 2,309,340 | |
Metropolitan Transportation Authority, Revenue Bonds, Ser. C | | 5.00 | | 11/15/2030 | | 5,000,000 | | 5,048,315 | |
Metropolitan Transportation Authority, Revenue Bonds, Ser. D1 | | 5.25 | | 11/15/2044 | | 2,000,000 | | 2,012,750 | |
Metropolitan Transportation Authority, Revenue Bonds, Ser. E | | 5.00 | | 11/15/2043 | | 6,210,000 | | 6,213,433 | |
Metropolitan Transportation Authority Hudson Rail Yards Trust Obligation, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 11/15/2051 | | 5,000,000 | | 4,999,797 | |
Monroe County Industrial Development Corp., Revenue Bonds (The Rochester General Hospital) | | 5.00 | | 12/1/2034 | | 1,100,000 | | 1,131,111 | |
Monroe County Industrial Development Corp., Revenue Bonds (The Rochester General Hospital) | | 5.00 | | 12/1/2035 | | 1,150,000 | | 1,175,901 | |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
Monroe County Industrial Development Corp., Revenue Bonds, Refunding (Rochester Regional Health Obligated Group) | | 4.00 | | 12/1/2046 | | 555,000 | | 472,073 | |
Monroe County Industrial Development Corp., Revenue Bonds, Refunding (University of Rochester Project) Ser. A | | 4.00 | | 7/1/2050 | | 4,420,000 | | 4,172,293 | |
Monroe County Industrial Development Corp., Revenue Bonds, Refunding (University of Rochester Project) Ser. A | | 5.00 | | 7/1/2036 | | 1,000,000 | | 1,068,226 | |
New York City, GO, Refunding, Ser. A1 | | 4.00 | | 8/1/2034 | | 1,000,000 | | 1,049,520 | |
New York City, GO, Refunding, Ser. C | | 5.00 | | 8/1/2033 | | 1,000,000 | | 1,026,522 | |
New York City, GO, Ser. A1 | | 5.00 | | 8/1/2037 | | 3,500,000 | | 3,664,948 | |
New York City, GO, Ser. C | | 4.00 | | 8/1/2039 | | 3,500,000 | | 3,506,921 | |
New York City, GO, Ser. D1 | | 5.50 | | 5/1/2046 | | 1,250,000 | | 1,418,015 | |
New York City, GO, Ser. E1 | | 4.00 | | 4/1/2045 | | 1,000,000 | | 974,570 | |
New York City, GO, Ser. F1 | | 4.00 | | 3/1/2047 | | 1,000,000 | | 968,399 | |
New York City Housing Development Corp., Revenue Bonds, Ser. C1A | | 4.00 | | 11/1/2053 | | 2,310,000 | | 2,036,437 | |
New York City Industrial Development Agency, Revenue Bonds, Refunding (Queens Baseball Stadium Project) (Insured; Assured Guaranty Municipal Corp.) Ser. A | | 5.00 | | 1/1/2031 | | 1,250,000 | | 1,398,645 | |
New York City Industrial Development Agency, Revenue Bonds, Refunding (Yankee Stadium Project) (Insured; Assured Guaranty Municipal Corp.) | | 4.00 | | 3/1/2045 | | 1,000,000 | | 940,370 | |
New York City Industrial Development Agency, Revenue Bonds, Refunding (Yankee Stadium Project) (Insured; Assured Guaranty Municipal Corp.) | | 4.00 | | 3/1/2032 | | 1,750,000 | | 1,793,926 | |
New York City Municipal Water Finance Authority, Revenue Bonds, Refunding, Ser. CC1 | | 5.00 | | 6/15/2038 | | 3,595,000 | | 3,746,950 | |
New York City Municipal Water Finance Authority, Revenue Bonds, Refunding, Ser. CC2 | | 4.00 | | 6/15/2041 | | 2,000,000 | | 2,005,850 | |
8
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
New York City Municipal Water Finance Authority, Revenue Bonds, Ser. DD1 | | 4.00 | | 6/15/2050 | | 2,500,000 | | 2,436,890 | |
New York City Transitional Finance Authority, Revenue Bonds (Insured; State Aid Withholding) Ser. S1 | | 5.00 | | 7/15/2043 | | 5,000,000 | | 5,088,295 | |
New York City Transitional Finance Authority, Revenue Bonds (Insured; State Aid Withholding) Ser. S2 | | 5.00 | | 7/15/2040 | | 3,000,000 | | 3,082,713 | |
New York City Transitional Finance Authority, Revenue Bonds (Insured; State Aid Withholding) Ser. S3 | | 5.00 | | 7/15/2043 | | 2,000,000 | | 2,123,017 | |
New York City Transitional Finance Authority, Revenue Bonds, Refunding (Insured; State Aid Withholding) Ser. S2A | | 5.00 | | 7/15/2034 | | 3,000,000 | | 3,292,312 | |
New York City Transitional Finance Authority, Revenue Bonds, Ser. E1 | | 5.00 | | 2/1/2040 | | 4,000,000 | | 4,134,384 | |
New York Convention Center Development Corp., Revenue Bonds, Refunding | | 5.00 | | 11/15/2040 | | 1,250,000 | | 1,278,777 | |
New York Convention Center Development Corp., Revenue Bonds, Ser. B | | 0.00 | | 11/15/2046 | | 4,000,000 | c | 1,204,298 | |
New York Liberty Development Corp., Revenue Bonds, Refunding (Bank of America Tower) | | 2.80 | | 9/15/2069 | | 1,000,000 | | 907,837 | |
New York Liberty Development Corp., Revenue Bonds, Refunding (Class 1-3 World Trade Center Project) | | 5.00 | | 11/15/2044 | | 5,000,000 | a | 4,909,524 | |
New York Liberty Development Corp., Revenue Bonds, Refunding (Goldman Sachs Headquarters) | | 5.25 | | 10/1/2035 | | 2,000,000 | | 2,241,675 | |
New York State Dormitory Authority, Revenue Bonds (Fordham University) | | 4.00 | | 7/1/2046 | | 1,000,000 | | 954,305 | |
New York State Dormitory Authority, Revenue Bonds (Rochester Institute of Technology) Ser. A | | 5.00 | | 7/1/2049 | | 1,000,000 | | 1,050,735 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Garnet Health Medical Center Obligated Group) | | 5.00 | | 12/1/2045 | | 1,400,000 | a | 1,312,267 | |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Garnet Health Medical Center Obligated Group) | | 5.00 | | 12/1/2036 | | 3,400,000 | a | 3,356,340 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Icahn School of Medicine at Mount Sinai) Ser. A | | 5.00 | | 7/1/2040 | | 1,000,000 | | 1,014,664 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Insured; Assured Guaranty Municipal Corp.) | | 5.25 | | 10/1/2050 | | 1,000,000 | | 1,092,881 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Insured; Assured Guaranty Municipal Corp.) Ser. A | | 4.00 | | 10/1/2035 | | 900,000 | | 923,853 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Memorial Sloan-Kettering Cancer Center) Ser. 1 | | 5.00 | | 7/1/2042 | | 500,000 | | 525,372 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Montefiore Obligated Group) Ser. A | | 5.00 | | 8/1/2034 | | 1,010,000 | | 999,638 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (Montefiore Obligated Group) Ser. A | | 5.00 | | 8/1/2035 | | 2,800,000 | | 2,738,056 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (New York University) Ser. A | | 5.00 | | 7/1/2045 | | 3,540,000 | | 3,597,102 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (NYU Hospitals Center ) | | 5.00 | | 7/1/2034 | | 2,500,000 | | 2,549,752 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (NYU Hospitals Center) | | 5.00 | | 7/1/2032 | | 500,000 | | 522,542 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (St. John's University) Ser. A | | 4.00 | | 7/1/2048 | | 1,000,000 | | 940,915 | |
New York State Dormitory Authority, Revenue Bonds, Refunding (The New School) Ser. A | | 5.00 | | 7/1/2041 | | 1,000,000 | | 1,048,407 | |
10
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
New York State Dormitory Authority, Revenue Bonds, Refunding (The New School) Ser. A | | 5.00 | | 7/1/2042 | | 750,000 | | 783,392 | |
New York State Dormitory Authority, Revenue Bonds, Refunding, Ser. A | | 4.00 | | 3/15/2049 | | 1,935,000 | | 1,874,407 | |
New York State Dormitory Authority, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 7/1/2041 | | 1,000,000 | | 1,030,185 | |
New York State Dormitory Authority, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 5/1/2043 | | 1,300,000 | | 1,320,795 | |
New York State Dormitory Authority, Revenue Bonds, Refunding, Ser. D | | 4.00 | | 2/15/2038 | | 1,500,000 | | 1,511,416 | |
New York State Dormitory Authority, Revenue Bonds, Ser. A | | 5.00 | | 3/15/2044 | | 5,000,000 | | 5,242,701 | |
New York State Dormitory Authority, Revenue Bonds, Ser. A | | 5.00 | | 3/15/2044 | | 2,000,000 | | 2,018,949 | |
New York State Dormitory Authority, Revenue Bonds, Ser. F | | 5.00 | | 2/15/2039 | | 2,000,000 | | 2,042,477 | |
New York State Mortgage Agency, Revenue Bonds, Ser. 223 | | 3.50 | | 4/1/2049 | | 435,000 | | 426,472 | |
New York State Thruway Authority, Revenue Bonds, Ser. A | | 5.00 | | 1/1/2041 | | 1,000,000 | | 1,027,829 | |
New York State Urban Development Corp., Revenue Bonds (Personal Income Tax) Ser. A | | 5.00 | | 3/15/2037 | | 2,500,000 | | 2,764,889 | |
New York Transportation Development Corp., Revenue Bonds | | 4.00 | | 10/31/2041 | | 1,750,000 | | 1,566,490 | |
New York Transportation Development Corp., Revenue Bonds (Delta Air Lines) | | 4.00 | | 1/1/2036 | | 1,960,000 | | 1,884,127 | |
New York Transportation Development Corp., Revenue Bonds (Delta Air Lines) | | 4.38 | | 10/1/2045 | | 1,240,000 | | 1,176,349 | |
New York Transportation Development Corp., Revenue Bonds (JFK International Air Terminal) | | 5.00 | | 12/1/2041 | | 2,000,000 | | 2,062,772 | |
New York Transportation Development Corp., Revenue Bonds, Refunding (JFK International Air Terminal) | | 4.00 | | 12/1/2042 | | 1,500,000 | | 1,412,723 | |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
New York Transportation Development Corp., Revenue Bonds, Refunding (JFK International Air Terminal) Ser. A | | 5.00 | | 12/1/2033 | | 1,450,000 | | 1,542,430 | |
Niagara Area Development Corp., Revenue Bonds, Refunding (Covanta Holding Project) Ser. B | | 3.50 | | 11/1/2024 | | 3,250,000 | a | 3,182,846 | |
Niagara Tobacco Asset Securitization Corp., Revenue Bonds, Refunding | | 5.25 | | 5/15/2034 | | 2,000,000 | | 2,010,822 | |
Niagara Tobacco Asset Securitization Corp., Revenue Bonds, Refunding | | 5.25 | | 5/15/2040 | | 1,750,000 | | 1,755,390 | |
Oneida County Local Development Corp., Revenue Bonds (Mohawk Valley Health System Obligated Group) (Insured; Assured Guaranty Municipal Corp.) Ser. A | | 4.00 | | 12/1/2051 | | 1,000,000 | | 877,568 | |
Oneida County Local Development Corp., Revenue Bonds, Refunding (Mohawk Valley Health System Obligated Group) (Insured; Assured Guaranty Municipal Corp.) | | 4.00 | | 12/1/2049 | | 1,000,000 | | 885,646 | |
Oyster Bay, GO, Refunding (Insured; Assured Guaranty Municipal Corp.) Ser. B | | 4.00 | | 2/1/2033 | | 3,000,000 | | 3,060,128 | |
Port Authority of New York & New Jersey, Revenue Bonds, Refunding Ser. 237 | | 5.00 | | 1/15/2052 | | 3,000,000 | | 3,233,488 | |
Port Authority of New York & New Jersey, Revenue Bonds, Refunding, Ser. 195th | | 5.00 | | 4/1/2036 | | 4,000,000 | | 4,101,282 | |
Port Authority of New York & New Jersey, Revenue Bonds, Refunding, Ser. 197 | | 5.00 | | 11/15/2033 | | 4,000,000 | | 4,136,586 | |
Port Authority of New York & New Jersey, Revenue Bonds, Ser. 184 | | 5.00 | | 9/1/2039 | | 2,000,000 | | 2,022,757 | |
Port Authority of New York & New Jersey, Revenue Bonds, Ser. 218 | | 4.00 | | 11/1/2047 | | 1,000,000 | | 946,444 | |
Port Authority of New York & New Jersey, Revenue Bonds, Ser. 218 | | 4.00 | | 11/1/2041 | | 1,000,000 | | 963,487 | |
Port Authority of New York & New Jersey, Revenue Bonds, Ser. 221 | | 5.00 | | 7/15/2035 | | 2,000,000 | | 2,175,422 | |
Port Authority of New York & New Jersey, Revenue Bonds, Ser. 93rd | | 6.13 | | 6/1/2094 | | 1,955,000 | | 1,989,291 | |
Suffolk Tobacco Asset Securitization Corp., Revenue Bonds, Refunding | | 4.00 | | 6/1/2050 | | 1,000,000 | | 886,562 | |
12
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
The New York City Trust for Cultural Resources, Revenue Bonds, Refunding (The American Museum of Natural History) Ser. A | | 5.00 | | 7/1/2032 | | 2,210,000 | | 2,237,139 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 11/15/2046 | | 3,500,000 | | 3,564,351 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Refunding, Ser. A | | 5.25 | | 11/15/2045 | | 1,500,000 | | 1,535,707 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Refunding, Ser. C2 | | 5.00 | | 11/15/2042 | | 2,000,000 | | 2,114,261 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Ser. A | | 5.00 | | 11/15/2049 | | 1,000,000 | | 1,066,555 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Ser. A | | 5.00 | | 11/15/2042 | | 3,000,000 | | 3,146,701 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Ser. A | | 5.25 | | 5/15/2057 | | 2,500,000 | | 2,762,810 | |
Triborough Bridge & Tunnel Authority, Revenue Bonds, Ser. C1A | | 4.00 | | 5/15/2046 | | 1,500,000 | | 1,440,152 | |
TSASC, Revenue Bonds, Refunding, Ser. A | | 5.00 | | 6/1/2041 | | 2,500,000 | | 2,542,519 | |
TSASC, Revenue Bonds, Refunding, Ser. B | | 5.00 | | 6/1/2045 | | 1,220,000 | | 1,145,671 | |
Utility Debt Securitization Authority, Revenue Bonds, Refunding | | 5.00 | | 12/15/2035 | | 2,500,000 | | 2,604,916 | |
Westchester County Local Development Corp., Revenue Bonds, Refunding (Miriam Osborn Memorial Home Association Obligated Group) | | 5.00 | | 7/1/2029 | | 250,000 | | 262,847 | |
Westchester County Local Development Corp., Revenue Bonds, Refunding (Miriam Osborn Memorial Home Association Obligated Group) | | 5.00 | | 7/1/2027 | | 270,000 | | 280,642 | |
Westchester County Local Development Corp., Revenue Bonds, Refunding (Purchase Senior Learning Community Obligated Group) | | 5.00 | | 7/1/2046 | | 1,800,000 | a | 1,414,738 | |
Westchester Tobacco Asset Securitization Corp., Revenue Bonds, Refunding, Ser. B | | 5.00 | | 6/1/2041 | | 1,500,000 | | 1,532,494 | |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| | | | | | | | | | |
| |
Description | Coupon
Rate (%) | | Maturity Date | | Principal Amount ($) | | Value ($) | |
Long-Term Municipal Investments - 98.2% (continued) | | | | | |
New York - 97.7% (continued) | | | | | |
Western Nassau County Water Authority, Revenue Bonds (Green Bonds) Ser. A | | 4.00 | | 4/1/2046 | | 1,000,000 | | 969,662 | |
Yonkers Economic Development Corp., Revenue Bonds (Charter School of Educational Excellence Project) Ser. A | | 5.00 | | 10/15/2039 | | 420,000 | | 388,948 | |
| | 228,811,302 | |
U.S. Related - .5% | | | | | |
Puerto Rico, GO, Ser. A1 | | 5.63 | | 7/1/2027 | | 1,000,000 | | 1,046,402 | |
Total Investments (cost $242,292,272) | | 98.2% | 229,857,704 | |
Cash and Receivables (Net) | | 1.8% | 4,319,273 | |
Net Assets | | 100.0% | 234,176,977 | |
a Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At May 31, 2023, these securities were valued at $14,974,576 or 6.39% of net assets.
b These securities are prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded are collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on the municipal issue and to retire the bonds in full at the earliest refunding date.
c Security issued with a zero coupon. Income is recognized through the accretion of discount.
| | |
Portfolio Summary (Unaudited) † | Value (%) |
General | 18.9 |
Transportation | 14.9 |
Medical | 10.7 |
Airport | 10.5 |
Education | 10.3 |
Development | 7.8 |
General Obligation | 7.1 |
Utilities | 4.3 |
Tobacco Settlement | 4.2 |
Water | 3.9 |
Nursing Homes | 1.4 |
Pollution | 1.4 |
Power | 1.1 |
Multifamily Housing | .9 |
Prerefunded | .6 |
Single Family Housing | .2 |
| | 98.2 |
† Based on net assets.
See notes to financial statements.
14
| | | | |
| |
Summary of Abbreviations (Unaudited) |
| |
ABAG | Association of Bay Area Governments | AGC | ACE Guaranty Corporation |
AGIC | Asset Guaranty Insurance Company | AMBAC | American Municipal Bond Assurance Corporation |
BAN | Bond Anticipation Notes | BSBY | Bloomberg Short-Term Bank Yield Index |
CIFG | CDC Ixis Financial Guaranty | COP | Certificate of Participation |
CP | Commercial Paper | DRIVERS | Derivative Inverse Tax-Exempt Receipts |
EFFR | Effective Federal Funds Rate | FGIC | Financial Guaranty Insurance Company |
FHA | Federal Housing Administration | FHLB | Federal Home Loan Bank |
FHLMC | Federal Home Loan Mortgage Corporation | FNMA | Federal National Mortgage Association |
GAN | Grant Anticipation Notes | GIC | Guaranteed Investment Contract |
GNMA | Government National Mortgage Association | GO | General Obligation |
IDC | Industrial Development Corporation | LIBOR | London Interbank Offered Rate |
LOC | Letter of Credit | LR | Lease Revenue |
NAN | Note Anticipation Notes | MFHR | Multi-Family Housing Revenue |
MFMR | Multi-Family Mortgage Revenue | MUNIPSA | Securities Industry and Financial Markets Association Municipal Swap Index Yield |
OBFR | Overnight Bank Funding Rate | PILOT | Payment in Lieu of Taxes |
PRIME | Prime Lending Rate | PUTTERS | Puttable Tax-Exempt Receipts |
RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes |
RIB | Residual Interest Bonds | SFHR | Single Family Housing Revenue |
SFMR | Single Family Mortgage Revenue | SOFR | Secured Overnight Financing Rate |
TAN | Tax Anticipation Notes | TRAN | Tax and Revenue Anticipation Notes |
U.S. T-BILL | U.S. Treasury Bill Money Market Yield | XLCA | XL Capital Assurance |
| | | | |
See notes to financial statements.
15
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2023 (Unaudited)
| | | | | | | |
| | | | | | |
| | | Cost | | Value | |
Assets ($): | | | | |
Investments in securities—See Statement of Investments | 242,292,272 | | 229,857,704 | |
Cash | | | | | 2,977,056 | |
Interest receivable | | 2,911,175 | |
Receivable for shares of Beneficial Interest subscribed | | 5,183 | |
Prepaid expenses | | | | | 38,992 | |
| | | | | 235,790,110 | |
Liabilities ($): | | | | |
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c) | | 143,447 | |
Payable for investment securities purchased | | 1,102,270 | |
Payable for shares of Beneficial Interest redeemed | | 305,544 | |
Trustees’ fees and expenses payable | | 2,140 | |
Other accrued expenses | | | | | 59,732 | |
| | | | | 1,613,133 | |
Net Assets ($) | | | 234,176,977 | |
Composition of Net Assets ($): | | | | |
Paid-in capital | | | | | 249,007,794 | |
Total distributable earnings (loss) | | | | | (14,830,817) | |
Net Assets ($) | | | 234,176,977 | |
| | | | | | |
Net Asset Value Per Share | Class A | Class C | Class I | Class Y | |
Net Assets ($) | 197,011,010 | 3,424,945 | 33,740,105 | 917.48 | |
Shares Outstanding | 14,716,383 | 255,798 | 2,520,596 | 68.49 | |
Net Asset Value Per Share ($) | 13.39 | 13.39 | 13.39 | 13.40 | |
| | | | | |
See notes to financial statements. | | | | | |
16
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2023 (Unaudited)
| | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Investment Income ($): | | | | |
Interest Income | | | 4,070,591 | |
Expenses: | | | | |
Management fee—Note 3(a) | | | 529,478 | |
Shareholder servicing costs—Note 3(c) | | | 304,025 | |
Interest and expense related to inverse
floater notes issued—Note 4 | | | 112,456 | |
Professional fees | | | 49,350 | |
Registration fees | | | 27,187 | |
Distribution fees—Note 3(b) | | | 16,264 | |
Trustees’ fees and expenses—Note 3(d) | | | 13,597 | |
Prospectus and shareholders’ reports | | | 12,896 | |
Chief Compliance Officer fees—Note 3(c) | | | 12,040 | |
Loan commitment fees—Note 2 | | | 2,816 | |
Custodian fees—Note 3(c) | | | 1,522 | |
Miscellaneous | | | 17,292 | |
Total Expenses | | | 1,098,923 | |
Less—reduction in expenses due to undertaking—Note 3(a) | | | (68,722) | |
Less—reduction in fees due to earnings credits—Note 3(c) | | | (14,401) | |
Net Expenses | | | 1,015,800 | |
Net Investment Income | | | 3,054,791 | |
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): | | |
Net realized gain (loss) on investments | (392,645) | |
Net change in unrealized appreciation (depreciation) on investments | 2,079,388 | |
Net Realized and Unrealized Gain (Loss) on Investments | | | 1,686,743 | |
Net Increase in Net Assets Resulting from Operations | | 4,741,534 | |
| | | | | | |
See notes to financial statements. | | | | | |
17
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | | | |
| | | | | | | | | |
| | | | Six Months Ended
May 31, 2023 (Unaudited) | | Year Ended
November 30, 2022 | |
Operations ($): | | | | | | | | |
Net investment income | | | 3,054,791 | | | | 6,463,332 | |
Net realized gain (loss) on investments | | (392,645) | | | | (2,143,418) | |
Net change in unrealized appreciation
(depreciation) on investments | | 2,079,388 | | | | (34,997,671) | |
Net Increase (Decrease) in Net Assets
Resulting from Operations | 4,741,534 | | | | (30,677,757) | |
Distributions ($): | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (2,525,299) | | | | (5,594,903) | |
Class C | | | (39,293) | | | | (105,089) | |
Class I | | | (479,458) | | | | (1,571,741) | |
Class Y | | | (14) | | | | (2,437) | |
Total Distributions | | | (3,044,064) | | | | (7,274,170) | |
Beneficial Interest Transactions ($): | |
Net proceeds from shares sold: | | | | | | | | |
Class A | | | 15,770,618 | | | | 13,735,100 | |
Class C | | | 62,609 | | | | 648,886 | |
Class I | | | 6,571,908 | | | | 14,094,898 | |
Distributions reinvested: | | | | | | | | |
Class A | | | 2,120,683 | | | | 4,655,479 | |
Class C | | | 39,292 | | | | 104,998 | |
Class I | | | 470,821 | | | | 1,560,763 | |
Cost of shares redeemed: | | | | | | | | |
Class A | | | (14,115,578) | | | | (25,358,982) | |
Class C | | | (1,536,849) | | | | (1,273,267) | |
Class I | | | (10,639,171) | | | | (43,919,255) | |
Class Y | | | - | | | | (302,841) | |
Increase (Decrease) in Net Assets
from Beneficial Interest Transactions | (1,255,667) | | | | (36,054,221) | |
Total Increase (Decrease) in Net Assets | 441,803 | | | | (74,006,148) | |
Net Assets ($): | |
Beginning of Period | | | 233,735,174 | | | | 307,741,322 | |
End of Period | | | 234,176,977 | | | | 233,735,174 | |
18
| | | | | | | | | | |
| | | | Six Months Ended
May 31, 2023 (Unaudited) | | Year Ended
November 30, 2022 | |
Capital Share Transactions (Shares): | |
Class A | | | | | | | | |
Shares sold | | | 1,177,091 | | | | 979,990 | |
Shares issued for distributions reinvested | | | 158,007 | | | | 334,753 | |
Shares redeemed | | | (1,051,314) | | | | (1,836,771) | |
Net Increase (Decrease) in Shares Outstanding | 283,784 | | | | (522,028) | |
Class C | | | | | | | | |
Shares sold | | | 4,722 | | | | 47,266 | |
Shares issued for distributions reinvested | | | 2,928 | | | | 7,533 | |
Shares redeemed | | | (114,533) | | | | (91,999) | |
Net Increase (Decrease) in Shares Outstanding | (106,883) | | | | (37,200) | |
Class I | | | | | | | | |
Shares sold | | | 489,769 | | | | 1,009,588 | |
Shares issued for distributions reinvested | | | 35,092 | | | | 111,414 | |
Shares redeemed | | | (794,999) | | | | (3,157,794) | |
Net Increase (Decrease) in Shares Outstanding | (270,138) | | | | (2,036,792) | |
Class Y | | | | | | | | |
Shares redeemed | | | - | | | | (20,743) | |
Net Increase (Decrease) in Shares Outstanding | - | | | | (20,743) | |
| | | | | | | | | |
See notes to financial statements. | | | | | | | | |
19
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.
| | | | | | | | |
| | | | |
| | Six Months Ended | |
Class A Shares | May 31, 2023 | Year Ended November 30, |
(Unaudited) | 2022 | 2021 | 2020 | 2019 | 2018 |
Per Share Data ($): | | | | | | |
Net asset value,
beginning of period | 13.29 | 15.23 | 15.22 | 15.16 | 14.35 | 14.81 |
Investment Operations: | | | | | | |
Net investment incomea | .17 | .34 | .33 | .37 | .38 | .39 |
Net realized and unrealized
gain (loss) on investments | .10 | (1.90) | .12 | .09 | .81 | (.46) |
Total from Investment Operations | .27 | (1.56) | .45 | .46 | 1.19 | (.07) |
Distributions: | | | | | | |
Dividends from
net investment income | (.17) | (.34) | (.33) | (.37) | (.38) | (.39) |
Dividends from net realized
gain on investments | - | (.04) | (.11) | (.03) | - | - |
Total Distributions | (.17) | (.38) | (.44) | (.40) | (.38) | (.39) |
Net asset value, end of period | 13.39 | 13.29 | 15.23 | 15.22 | 15.16 | 14.35 |
Total Return (%)b | 2.05c | (10.33) | 3.03 | 3.09 | 8.37 | (.49) |
Ratios/Supplemental Data (%): | | | | | | |
Ratio of total expenses
to average net assets | .95d | .96 | .94 | .97 | .98 | .98 |
Ratio of net expenses
to average net assets | .89d | .84 | .84 | .87 | .96 | .98 |
Ratio of interest and expense related
to floating rate notes issued
to average net assets | .10d | .05 | .02 | .04 | .07 | .06 |
Ratio of net investment income
to average net assets | 2.57d | 2.43 | 2.18 | 2.46 | 2.56 | 2.67 |
Portfolio Turnover Rate | 5.09c | 7.49 | 7.88 | 13.63 | 9.24 | 15.32 |
Net Assets, end of period ($ x 1,000) | 197,011 | 191,825 | 227,800 | 233,774 | 238,353 | 243,275 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
20
| | | | | | | | |
| | | | |
| | Six Months Ended | |
Class C Shares | May 31, 2023 | Year Ended November 30, |
(Unaudited) | 2022 | 2021 | 2020 | 2019 | 2018 |
Per Share Data ($): | | | | | | |
Net asset value, beginning of period | 13.29 | 15.23 | 15.22 | 15.16 | 14.36 | 14.81 |
Investment Operations: | | | | | | |
Net investment incomea | .12 | .23 | .21 | .26 | .27 | .28 |
Net realized and unrealized
gain (loss) on investments | .10 | (1.90) | .12 | .08 | .80 | (.45) |
Total from Investment Operations | .22 | (1.67) | .33 | .34 | 1.07 | (.17) |
Distributions: | | | | | | |
Dividends from
net investment income | (.12) | (.23) | (.21) | (.25) | (.27) | (.28) |
Dividends from net realized
gain on investments | - | (.04) | (.11) | (.03) | - | - |
Total Distributions | (.12) | (.27) | (.32) | (.28) | (.27) | (.28) |
Net asset value, end of period | 13.39 | 13.29 | 15.23 | 15.22 | 15.16 | 14.36 |
Total Return (%)b | 1.67c | (11.07) | 2.30 | 2.30 | 7.48 | (1.17) |
Ratios/Supplemental Data (%): | | | | | | |
Ratio of total expenses
to average net assets | 1.72d | 1.75 | 1.72 | 1.73 | 1.75 | 1.73 |
Ratio of net expenses
to average net assets | 1.63d | 1.60 | 1.62 | 1.63 | 1.72 | 1.73 |
Ratio of interest and expense related
to floating rate notes issued
to average net assets | .10d | .05 | .02 | .04 | .07 | .06 |
Ratio of net investment income
to average net assets | 1.82d | 1.66 | 1.41 | 1.70 | 1.80 | 1.90 |
Portfolio Turnover Rate | 5.09c | 7.49 | 7.88 | 13.63 | 9.24 | 15.32 |
Net Assets, end of period ($ x 1,000) | 3,425 | 4,821 | 6,092 | 9,745 | 16,217 | 18,960 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
21
FINANCIAL HIGHLIGHTS (continued)
| | | | | | | | |
| | | | |
| | Six Months Ended | |
Class I Shares | May 31, 2023 | Year Ended November 30, |
(Unaudited) | 2022 | 2021 | 2020 | 2019 | 2018 |
Per Share Data ($): | | | | | | |
Net asset value,
beginning of period | 13.29 | 15.23 | 15.22 | 15.16 | 14.35 | 14.81 |
Investment Operations: | | | | | | |
Net investment incomea | .19 | .37 | .37 | .41 | .42 | .43 |
Net realized and unrealized
gain (loss) on investments | .10 | (1.90) | .12 | .09 | .81 | (.47) |
Total from Investment Operations | .29 | (1.53) | .49 | .50 | 1.23 | (.04) |
Distributions: | | | | | | |
Dividends from
net investment income | (.19) | (.37) | (.37) | (.41) | (.42) | (.42) |
Dividends from net realized
gain on investments | - | (.04) | (.11) | (.03) | - | - |
Total Distributions | (.19) | (.41) | (.48) | (.44) | (.42) | (.42) |
Net asset value, end of period | 13.39 | 13.29 | 15.23 | 15.22 | 15.16 | 14.35 |
Total Return (%) | 2.18b | (10.10) | 3.29 | 3.41 | 8.56 | (.25) |
Ratios/Supplemental Data (%): | | | | | | |
Ratio of total expenses
to average net assets | .71c | .73 | .70 | .72 | .75 | .72 |
Ratio of net expenses
to average net assets | .63c | .59 | .60 | .62 | .72 | .72 |
Ratio of interest and expense related
to floating rate notes issued
to average net assets | .10c | .05 | .02 | .04 | .07 | .06 |
Ratio of net investment income
to average net assets | 2.82c | 2.67 | 2.42 | 2.70 | 2.79 | 2.90 |
Portfolio Turnover Rate | 5.09b | 7.49 | 7.88 | 13.63 | 9.24 | 15.32 |
Net Assets, end of period ($ x 1,000) | 33,740 | 37,088 | 73,532 | 61,536 | 61,051 | 61,751 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
22
| | | | | | | | |
| | | | |
| | Six Months Ended | |
Class Y Shares | May 31, 2023 | Year Ended November 30, |
(Unaudited) | 2022 | 2021 | 2020 | 2019 | 2018 |
Per Share Data ($): | | | | | | |
Net asset value,
beginning of period | 13.30 | 15.24 | 15.22 | 15.16 | 14.36 | 14.81 |
Investment Operations: | | | | | | |
Net investment incomea | .20 | .37 | .37 | .41 | .43 | .43 |
Net realized and unrealized
gain (loss) on investments | .10 | (1.94) | .13 | .09 | .78 | (.46) |
Total from Investment Operations | .30 | (1.57) | .50 | .50 | 1.21 | (.03) |
Distributions: | | | | | | |
Dividends from
net investment income | (.20) | (.33) | (.37) | (.41) | (.41) | (.42) |
Dividends from net realized
gain on investments | - | (.04) | (.11) | (.03) | - | - |
Total Distributions | (.20) | (.37) | (.48) | (.44) | (.41) | (.42) |
Net asset value, end of period | 13.40 | 13.30 | 15.24 | 15.22 | 15.16 | 14.36 |
Total Return (%) | 2.28b | (10.38) | 3.38 | 3.37 | 8.48 | (.17) |
Ratios/Supplemental Data (%): | | | | | | |
Ratio of total expenses
to average net assets | .71c | .73 | .67 | .70 | .76 | .71 |
Ratio of net expenses
to average net assets | .63c | .59 | .57 | .60 | .68 | .71 |
Ratio of interest and expense related
to floating rate notes issued
to average net assets | .10c | .05 | .02 | .04 | .07 | .06 |
Ratio of net investment income
to average net assets | 2.94c | 2.68 | 2.45 | 2.74 | 2.90 | 2.94 |
Portfolio Turnover Rate | 5.09b | 7.49 | 7.88 | 13.63 | 9.24 | 15.32 |
Net Assets, end of period ($ x 1,000) | 1 | 1 | 317 | 317 | 316 | 1 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
23
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon New York AMT-Free Municipal Bond Fund (the “fund”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), is a non-diversified open–end management investment company. The fund’s investment objective is to seek to maximize current income exempt from federal, New York state and New York city income taxes to the extent consistent with the preservation of capital. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Insight North America LLC (the “Sub-Adviser”), an indirect wholly-owned subsidiary of BNY Mellon and an affiliate of the Adviser, serves as the fund’s sub-adviser.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Class A, Class C, Class I and Class Y. Class A and Class C shares are sold primarily to retail investors through financial intermediaries and bear Distribution and/or Shareholder Services Plan fees. Class A shares generally are subject to a sales charge imposed at the time of purchase. Class A shares bought without an initial sales charge as part of an investment of $1 million or more may be charged a contingent deferred sales charge (“CDSC”) of 1.00% if redeemed within one year. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares eight years after the date of purchase, without the imposition of a sales charge. Class I shares are sold primarily to bank trust departments and other financial service providers (including BNY Mellon and its affiliates), acting on behalf of customers having a qualified trust or an investment account or relationship at such institution, and bear no Distribution or Shareholder Services Plan fees. Class Y shares are sold at net asset value per share generally to institutional investors, and bear no Distribution or Shareholder Services Plan fees. Class I and Class Y shares are offered without a front-end sales charge or CDSC. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
As of May 31, 2023, MBC Investments Corporation, an indirect subsidiary of BNY Mellon, held all of the outstanding Class Y shares of the fund.
24
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
The fund’s Board of Trustees (the “Board”) has designated the Adviser as the fund’s valuation designee to make all fair value determinations with respect to the fund’s portfolio investments, subject to the Board’s oversight and pursuant to Rule 2a-5 under the Act.
Investments in municipal securities are valued each business day by an independent pricing service (the “Service”) approved by the Board. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Municipal investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of the following: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. The Service is engaged under the general oversight of the Board. All of the preceding securities are generally categorized within Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
26
The following is a summary of the inputs used as of May 31, 2023 in valuing the fund’s investments:
| | | | | | | |
| | Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | | Level 3-Significant Unobservable Inputs | Total | |
Assets ($) | | |
Investments in Securities:† | | |
Municipal Securities | - | 229,857,704 | | - | 229,857,704 | |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Securities purchased or sold on a when-issued or delayed delivery basis may be settled a month or more after the trade date.
The fund follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the fund.
(c) Market Risk: The value of the securities in which the fund invests may be affected by political, regulatory, economic and social developments, and developments that impact specific economic sectors, industries or segments of the market. The value of a security may also decline due to general market conditions that are not specifically related to a particular company or industry, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates, changes to inflation, adverse changes to credit markets or adverse investor sentiment generally. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed-income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies world-wide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments,
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff.
Municipal Securities Risk: The amount of public information available about municipal securities is generally less than that for corporate equities or bonds. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the fund’s investments in municipal securities. Other factors include the general conditions of the municipal securities market, the size of the particular offering, the maturity of the obligation and the rating of the issue. Changes in economic, business or political conditions relating to a particular municipal project, municipality, or state, territory or possession of the United States in which the fund invests may have an impact on the fund’s share price. As an example, elevated costs or shortfalls in revenue associated with the spread of the COVID-19 outbreak could affect the ability of municipal issuers to make payments on debt obligations when due. Any such credit impairment could adversely impact the value of their bonds, which could negatively impact the performance of the fund.
Non-Diversification Risk: The fund is non-diversified, which means that the fund may invest a relatively high percentage of its assets in a limited number of issuers. Therefore, the fund’s performance may be more vulnerable to changes in the market value of a single issuer or group of issuers and more susceptible to risks associated with a single economic, political or regulatory occurrence than a diversified fund.
(d) Dividends and distributions to shareholders: It is the policy of the fund to declare dividends daily from net investment income. Such dividends are paid monthly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, which can distribute tax-exempt dividends, by complying with the applicable provisions of the Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
28
As of and during the period ended May 31, 2023, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended May 31, 2023, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended November 30, 2022 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund is permitted to carry forward capital losses for an unlimited period. Furthermore, capital loss carryovers retain their character as either short-term or long-term capital losses.
The fund has an unused capital loss carryover of $2,158,660 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to November 30, 2022. These short-term losses can be carried forward for an unlimited period.
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2022 was as follows: tax-exempt income $6,482,954 and long-term capital gains $791,216. The tax character of current year distributions will be determined at the end of the current fiscal year.
(f) New accounting pronouncements: In 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.
The objective of the guidance in Topic 848 is to provide temporary relief during the transition period. The FASB included a sunset provision within Topic 848 based on expectations of when the LIBOR would cease being published. At the time that Update 2020-04 was issued, the UK Financial Conduct Authority (FCA) had established its intent that it would no longer be necessary to persuade, or compel, banks to submit to LIBOR after December 31, 2021. As a result, the sunset provision was set for December 31, 2022—12 months after the expected cessation date of all currencies and tenors of LIBOR.
In March 2021, the FCA announced that the intended cessation date of the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR would be June 30, 2023, which is beyond the current sunset date of Topic 848.
29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Because the current relief in Topic 848 may not cover a period of time during which a significant number of modifications may take place, the amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024 (“FASB Sunset Date”), after which entities will no longer be permitted to apply the relief in Topic 848.
Management had evaluated the impact of Topic 848 on the fund’s investments, derivatives, debt and other contracts that will undergo reference rate-related modifications as a result of the Reference Rate Reform. Management has no concerns in adopting Topic 848 by FASB Sunset Date. Management will continue to work with other financial institutions and counterparties to modify contracts as required by applicable regulation and within the regulatory deadlines. As of May 31, 2023, management believes these accounting standards have no impact on the fund and does not have any concerns of adopting the regulations by FASB Sunset Date.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by BNY Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended May 31, 2023, the fund did not borrow under the Facilities.
NOTE 3—Management Fee, Sub-Advisory Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .45% of the value of the fund’s average daily net assets and is payable monthly. The Adviser has contractually agreed, from December 1, 2022 through March 31, 2024, to waive receipt of its fees and/or assume the direct expenses of the fund so that the direct expenses of none of the fund’s share classes (excluding Rule
30
12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, brokerage commissions, interest expense, commitment fees on borrowings and extraordinary expenses) exceed .55% of the value of the fund’s average daily net assets. On or after March 31, 2024, the Adviser may terminate this expense limitation at any time. The reduction in expenses, pursuant to the undertakings, amounted to $68,722 during the period ended May 31, 2023.
Pursuant to a sub-investment advisory agreement between the Adviser and the Sub-Adviser, the Adviser pays the Sub-Adviser a monthly fee at an annual rate of .264% of the value of the fund’s average daily net assets.
During the period ended May 31, 2023, the Distributor retained $27 from commissions earned on sales of the fund’s Class A shares and $221 from CDSC fees on redemptions of the fund’s Class C shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. The Distributor may pay one or more Service Agents in respect of advertising, marketing and other distribution services, and determines the amounts, if any, to be paid to Service Agents and the basis on which such payments are made. During the period ended May 31, 2023, Class C shares were charged $16,264 pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2023, Class A and Class C shares were charged $246,099 and $5,421, respectively, pursuant to the Shareholder Services Plan.
The fund has arrangements with BNY Mellon Transfer, Inc., (the “Transfer Agent”) and The Bank of New York Mellon (the “Custodian”), both a subsidiary of BNY Mellon and an affiliate of the Adviser, whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset Transfer Agent and Custodian fees. For financial reporting purposes, the fund includes transfer agent net
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
earnings credits, if any, and custody net earnings credits, if any, as an expense offset in the Statement of Operations.
The fund compensates the Transfer Agent, under a transfer agency agreement, for providing transfer agency and cash management services for the fund. The majority of Transfer Agent fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended May 31, 2023, the fund was charged $22,936 for transfer agency services. These fees are included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credits of $12,879.
The fund compensates the Custodian, under a custody agreement, for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended May 31, 2023, the fund was charged $1,522 pursuant to the custody agreement. These fees were offset by earnings credits of $1,522.
The fund compensates the Custodian, under a shareholder redemption draft processing agreement, for providing certain services related to the fund’s check writing privilege. During the period ended May 31, 2023, the fund was charged $1,391 pursuant to the agreement, which is included in Shareholder servicing costs in the Statement of Operations. These fees were partially offset by earnings credit of $1,522.
During the period ended May 31, 2023, the fund was charged $12,040 for services performed by the fund’s Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fee of $89,946, Distribution Plan fees of $2,394, Shareholder Services Plan fees of $42,775, Custodian fees of $2,017, Chief Compliance Officer fees of $4,924 and Transfer Agent fees of $11,208, which are offset against an expense reimbursement currently in effect in the amount of $9,817.
(d) Each board member also serves as a board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2023, amounted to $12,327,874 and $11,761,090, respectively.
32
Inverse Floater Securities: The fund participates in secondary inverse floater structures in which fixed-rate, tax-exempt municipal bonds are transferred to a trust (the “Inverse Floater Trust”). The Inverse Floater Trust typically issues two variable rate securities that are collateralized by the cash flows of the fixed-rate, tax-exempt municipal bonds. One of these variable rate securities pays interest based on a short-term floating rate set by a remarketing agent at predetermined intervals (“Trust Certificates”). A residual interest tax-exempt security is also created by the Inverse Floater Trust, which is transferred to the fund, and is paid interest based on the remaining cash flows of the Inverse Floater Trust, after payment of interest on the other securities and various expenses of the Inverse Floater Trust. An Inverse Floater Trust may be collapsed without the consent of the fund due to certain termination events such as bankruptcy, default or other credit event.
The fund accounts for the transfer of bonds to the Inverse Floater Trust as secured borrowings, with the securities transferred remaining in the fund’s investments, and the Trust Certificates reflected as fund liabilities in the Statement of Assets and Liabilities. At May 31, 2023, there were no inverse floater securities outstanding.
The fund may invest in inverse floater securities on either a non-recourse or recourse basis. These securities are typically supported by a liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that allows the holders of the Trust Certificates to tender their certificates in exchange for payment from the Liquidity Provider of par plus accrued interest on any business day prior to a termination event. When the fund invests in inverse floater securities on a non-recourse basis, the Liquidity Provider is required to make a payment under the liquidity facility due to a termination event to the holders of the Trust Certificates. When this occurs, the Liquidity Provider typically liquidates all or a portion of the municipal securities held in the Inverse Floater Trust. A liquidation shortfall occurs if the Trust Certificates exceed the proceeds of the sale of the bonds in the Inverse Floater Trust (“Liquidation Shortfall”). When a fund invests in inverse floater securities on a recourse basis, the fund typically enters into a reimbursement agreement with the Liquidity Provider where the fund is required to repay the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a fund investing in a recourse inverse floater security bears the risk of loss with respect to any Liquidation Shortfall.
The average amount of borrowings outstanding under the inverse floater structure during the period ended May 31, 2023 was approximately
33
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
$6,222,527, with a related weighted average annualized interest rate of 3.62%.
At May 31, 2023, accumulated net unrealized deppreciation on investments was $12,434,568, consisting of $266,735 gross unrealized appreciation and $12,701,303 gross unrealized depreciation.
At May 31, 2023, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
34
LIQUIDITY RISK MANAGEMENT PROGRAM (Unaudited)
The fund adopted a liquidity risk management program (the “Liquidity Risk Management Program”) pursuant to the requirements of Rule 22e-4 under the Investment Company Act of 1940, as amended. Rule 22e-4 requires registered open-end funds, including mutual funds and exchange-traded funds but not money market funds, to establish liquidity risk management programs in order to effectively manage fund liquidity and shareholder redemptions. The rule is designed to mitigate the risk that a fund could not meet redemption requests without significantly diluting the interests of remaining investors.
The rule requires the fund to assess, manage and review their liquidity risk at least annually considering applicable factors such as investment strategy and liquidity during normal and foreseeable stressed conditions, including whether the strategy is appropriate for an open-end fund and whether the fund has a relatively concentrated portfolio or large positions in particular issuers. The fund must also assess its use of borrowings and derivatives, short-term and long-term cash flow projections in normal and stressed conditions, holdings of cash and cash equivalents, and borrowing arrangements and other funding sources.
The rule also requires the fund to classify its investments as highly liquid, moderately liquid, less liquid or illiquid based on the number of days the fund expects it would take to liquidate the investment, and to review these classifications at least monthly or more often under certain conditions. The periods range from three or fewer business days for a highly liquid investment to greater than seven calendar days for settlement of a less liquid investment. Illiquid investments are those a fund does not expect to be able to sell or dispose of within seven calendar days without significantly changing the market value. The fund is prohibited from acquiring an investment if, after the acquisition, its holdings of illiquid assets will exceed 15% of its net assets. In addition, if a fund permits redemptions in-kind, the rule requires the fund to establish redemption in-kind policies and procedures governing how and when it will engage in such redemptions.
Pursuant to the rule’s requirements, the Liquidity Risk Management Program has been reviewed and approved by the Board. Furthermore, the Board has received a written report prepared by the Program’s Administrator that addresses the operation of the Program, assesses its adequacy and effectiveness and describes any material changes made to the Program.
Assessment of Program
In the opinion of the Program Administrator, the Program approved by the Board continues to be adequate for the fund and the Program has been implemented effectively. The Program Administrator has monitored the fund’s liquidity risk and the liquidity classification of the securities held by the fund and has determined that the Program is operating effectively.
During the period from January 1, 2022 to December 31, 2022, there were no material changes to the Program and no material liquidity events that impacted the fund. During the period, the fund held sufficient highly liquid assets to meet fund redemptions.
Under normal expected foreseeable fund redemption forecasts and foreseeable stressed fund redemption forecasts, the Program Administrator believes that the fund maintains sufficient highly liquid assets to meet expected fund redemptions.
35
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36
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37
BNY Mellon New York AMT-Free Municipal Bond Fund
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Sub-Adviser
Insight North America LLC
200 Park Avenue, 7th Floor
New York, NY 10166
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
| | |
Ticker Symbols: | Class A: PSNYX Class C: PNYCX Class I: DNYIX Class Y: DNYYX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@bnymellon.com
Internet Information can be viewed online or downloaded at www.im.bnymellon.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
| | |
© 2023 BNY Mellon Securities Corporation
0021SA0523 | 
|
Not applicable.
| Item 3. | Audit Committee Financial Expert. |
Not applicable.
| Item 4. | Principal Accountant Fees and Services. |
Not applicable.
| Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
(a) 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 Companies and Affiliated Purchasers. |
Not applicable.
| Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures applicable to Item 10.
| Item 11. | Controls and Procedures. |
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
| Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
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.
BNY Mellon New York AMT-Free Municipal Bond Fund
By: /s/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: July 18, 2023
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/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: July 18, 2023
By: /s/ James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: July 18, 2023
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)
