UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSRS
Investment Company Act file number: 811-05767
DWS Strategic Municipal Income 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: | 11/30 |
| | |
| Date of reporting period: | 5/31/2021 |
| ITEM 1. | REPORT TO STOCKHOLDERS |
| | |
| | (a) |
| | |
May 31, 2021
Semiannual Report
to Shareholders
DWS Strategic Municipal Income Trust
Ticker Symbol: KSM
The Fund’s investment objective is to provide a high level of current income exempt from federal income tax.
Closed-end funds, unlike open-end funds, are not continuously offered. There is a one time public offering and once issued, shares of closed-end funds are sold in the open market through a stock exchange. Shares of closed-end funds frequently trade at a discount to net asset value. The price of the Fund’s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value.
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. 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. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Leverage results in additional risks and can magnify the effect of any gains or losses. 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.
War, terrorism, economic uncertainty, trade disputes, public health crises (including the recent pandemic spread of the novel coronavirus) and related geopolitical events could lead to increased market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on the Fund and its investments.
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
| 2 | | DWS Strategic Municipal Income Trust |
| Performance Summary | May 31, 2021 (Unaudited) |
Performance is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when sold, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please visit dws.com for the Fund’s most recent month-end performance.
Fund specific data and performance are provided for informational purposes only and are not intended for trading purposes.
| Average Annual Total Returns as of 5/31/21 |
| DWS Strategic Municipal Income Trust | 6-Months ‡ | 1-Year | 5-Year | 10-Year |
| Based on Net Asset Value(a) | 5.49% | 15.80% | 5.04% | 7.06 |
| Based on Market Price(a) | 11.64% | 24.66% | 3.34% | 6.24 |
Bloomberg Barclays Municipal
Bond Index(b) | 1.40% | 4.74% | 3.52% | 4.29 |
| Morningstar Closed-End High-Yield Municipal Funds Category(c) | 6.41% | 16.13% | 4.90% | 7.20 |
| ‡ | Total returns shown for periods less than one year are not annualized. |
| (a) | Total return based on net asset value reflects changes in the Fund’s net asset value during each period. Total return based on market price reflects changes in market price. Each figure assumes that dividend and capital gain distributions, if any, were reinvested. These figures will differ depending upon the level of any discount from or premium to net asset value at which the Fund’s shares traded during the period. Expenses of the Fund include management fee, interest expense and other fund expenses. Total returns shown take into account these fees and expenses. The expense ratio of the Fund for the six months ended May 31, 2021 was 1.91% (1.15% excluding interest expense). |
| (b) | The unmanaged, unleveraged Bloomberg Barclays Municipal Bond Index covers the U.S. dollar-denominated long-term tax exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and pre-refunded bonds. Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index. |
| (c) | Morningstar’s Closed-End High-Yield Municipal Funds category represents high-yield muni portfolios that typically invest at least 50% of assets in high-income municipal securities that are not rated or that are rated by a major agency such as Standard & Poor’s or Moody’s at the level of BBB and below (considered part of the high-yield universe within the municipal industry). Morningstar figures represent the average of the total returns based on net asset value reported by all of the closed-end funds designated by Morningstar, Inc. as falling into the Closed-End High-Yield Municipal Funds category. Category returns assume reinvestment of all distributions. It is not possible to invest directly in a Morningstar category. |
| DWS Strategic Municipal Income Trust | | 3 |
| Net Asset Value and Market Price | | |
| | As of 5/31/21 | As of 11/30/20 |
| Net Asset Value | $ 12.95 | $ 12.59 |
| Market Price | $ 12.29 | $ 11.29 |
| Premium (discount) | (5.10%) | (10.33%) |
Prices and net asset value fluctuate and are not guaranteed.
| Distribution Information | |
Six Months as of 5/31/21:
Income Dividends (common shareholders) | $ .27 |
| Capital Gain Dividend (common shareholders) | $ .0314 |
| May Income Dividend (common shareholders) | $ .045 |
Current Annualized Distribution Rate (based on Net Asset Value)
as of 5/31/21† | 4.17% |
Current Annualized Distribution Rate (based on Market Price)
as of 5/31/21† | 4.39% |
Tax Equivalent Distribution Rate (based on Net Asset Value)
as of 5/31/21† | 7.04% |
Tax Equivalent Distribution Rate (based on Market Price)
as of 5/31/21† | 7.42% |
| † | Current annualized distribution rate is the latest monthly dividend shown as an annualized percentage of net asset value/market price on May 31, 2021. Distribution rate simply measures the level of dividends and is not a complete measure of performance. Tax equivalent distribution rate is based on the Fund’s distribution rate and a marginal income tax rate of 40.8%. Distribution rates are historical, not guaranteed and will fluctuate. Distributions do not include return of capital or other non-income sources. |
| 4 | | DWS Strategic Municipal Income Trust |
Portfolio Management Team
Ashton P. Goodfield, CFA, Head of Investment Strategy Fixed Income
Portfolio Manager of the Fund through September 30, 2021. Began managing the Fund in 2014.
—
Joined DWS in 1986.
—
Head of Municipal Bond Department; Portfolio Manager, Municipal Bond Mutual Funds: Boston.
—
BA, Duke University.
Chad H. Farrington, CFA, Senior Portfolio Manager Fixed Income
Portfolio Manager of the Fund. Began managing the Fund in 2018.
—
Joined DWS in 2018 with 20 years of industry experience; previously, worked as Portfolio Manager, Head of Municipal Research, and Senior Credit Analyst at Columbia Threadneedle.
—
Effective October 1, 2021, Co-Head of Municipal Bond Department.
—
BS, Montana State University.
Michael J. Generazo, Senior Portfolio Manager Fixed Income
Portfolio Manager of the Fund. Began managing the Fund in 2018.
—
Joined DWS in 1999.
—
BS, Bryant College; MBA, Suffolk University.
Peter Aloisi, CFA, Portfolio Manager Fixed Income
Portfolio Manager of the Fund starting October 1, 2021.
—
Joined DWS in 2010 with five years of industry experience; previously, served as an Associate at Banc of America Securities.
—
BA and MBA, Boston College.
| DWS Strategic Municipal Income Trust | | 5 |
| Portfolio Summary | (Unaudited) |
| Asset Allocation (As a % of Investment Portfolio excluding Open-End Investment Companies) | 5/31/21 | 11/30/20 |
| Revenue Bonds | 75% | 74% |
| Escrow to Maturity/Prerefunded Bonds | 10% | 10% |
| Lease Obligations | 8% | 8% |
| General Obligation Bonds | 7% | 8% |
| | 100% | 100% |
| Quality (As a % of Investment Portfolio excluding Open-End Investment Companies) | 5/31/21 | 11/30/20 |
| AAA | 2% | 2% |
| AA | 20% | 19% |
| A | 37% | 39% |
| BBB | 21% | 20% |
| BB | 5% | 6% |
| B | 0% | 0% |
| Not Rated | 15% | 14% |
| | 100% | 100% |
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/Territory Allocations (As a % of Investment Portfolio excluding Open-End Investment Companies) | 5/31/21 | 11/30/20 |
| New York | 10% | 10% |
| Texas | 10% | 11% |
| Illinois | 10% | 10% |
| Florida | 10% | 10% |
| Washington | 6% | 6% |
| Interest Rate Sensitivity | 5/31/21 | 11/30/20 |
| Effective Maturity | 5.6 years | 6.1 years |
| Modified Duration | 5.2 years | 5.4 years |
| Leverage (As a % of Total Assets) | 5/31/21 | 11/30/20 |
| | 37% | 38% |
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.
Leverage results in additional risks and can magnify the effect of any gains or losses to a greater extent than if leverage were not used.
Portfolio holdings and characteristics are subject to change.
For more complete details about the Fund’s investment portfolio, see page 7. A quarterly Fact Sheet is available on dws.com or upon request. Please see the Additional Information section on page 46 for contact information.
| 6 | | DWS Strategic Municipal Income Trust |
| Investment Portfolio | as of May 31, 2021 (Unaudited) |
| | Principal
Amount ($) | Value ($) |
| Municipal Bonds and Notes 140.1% | |
| Alabama 0.3% | |
| Alabama, UAB Medicine Finance Authority Revenue, Series B2, 5.0%, 9/1/2041 | | 325,000 | 393,687 |
| Alaska 1.6% | |
| Alaska, Industrial Development & Export Authority Revenue, Tanana Chiefs Conference Project, Series A, 4.0%, 10/1/2049 | | 2,000,000 | 2,254,141 |
| Arizona 3.2% | |
| Arizona, State Industrial Development Authority, Education Facility Revenue, Odyssey Preparatory Academy Project, 144A, 5.0%, 7/1/2049 | | 175,000 | 194,626 |
| Arizona, State University, Green Bond, Series A, 5.0%, 7/1/2043 | | 2,000,000 | 2,547,987 |
| Maricopa County, AZ, Industrial Development Authority, Education Revenue, Legacy Traditional Schools Project, Series B, 144A, 5.0%, 7/1/2049 | | 150,000 | 173,127 |
| Phoenix, AZ, Civic Improvement Corp., Rental Car Facility Revenue, Series A, 4.0%, 7/1/2045 | | 500,000 | 543,787 |
| Phoenix, AZ, Industrial Development Authority, Education Facility Revenue, Leman Academy of Excellence, ORO Valley Project: | | | |
| Series A, 144A, 5.0%, 7/1/2038 | | 195,000 | 201,190 |
| Series A, 144A, 5.25%, 7/1/2048 | | 250,000 | 257,837 |
| Yavapai County, AZ, Industrial Development Authority, Hospital Facility, Regional Medical Center, 4.0%, 8/1/2043 | | 675,000 | 779,281 |
| | | | 4,697,835 |
| California 9.2% | |
| California, County Tobacco Securitization Agency, Tobacco Settle Revenue, Series B-2, Zero Coupon, 6/1/2055 | | 4,000,000 | 794,625 |
| California, Golden State Tobacco Securitization Corp., Tobacco Settlement Revenue: | | | |
| Series A-1, 5.0%, 6/1/2047 | | 100,000 | 103,563 |
| Series A-2, 5.0%, 6/1/2047 | | 400,000 | 414,251 |
| California, Morongo Band of Mission Indians Revenue, Series B, 144A, 5.0%, 10/1/2042 | | 115,000 | 134,144 |
| California, M-S-R Energy Authority, Series B, 7.0%, 11/1/2034, GTY: Citigroup Global Markets | | 1,310,000 | 2,072,667 |
| California, State General Obligation: | | | |
| 5.0%, 11/1/2043 | | 1,300,000 | 1,442,525 |
| 5.25%, 4/1/2035 | | 1,230,000 | 1,281,799 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 7 |
| | Principal
Amount ($) | Value ($) |
| California, State Municipal Finance Authority Revenue, LAX Integrated Express Solutions LLC, LINXS Apartment Project: | | | |
| Series A, AMT, 5.0%, 12/31/2043 | | 300,000 | 365,163 |
| Series A, AMT, 5.0%, 12/31/2047 | | 160,000 | 194,169 |
| Series A, AMT, 5.0%, 6/1/2048 | | 60,000 | 72,699 |
| California, State Public Finance Authority Revenue, ENSO Village Project: | | | |
| Series A, 144A, 5.0%, 11/15/2046 (a) | | 55,000 | 61,499 |
| Series A, 144A, 5.0%, 11/15/2051 (a) | | 25,000 | 27,857 |
| California, Statewide Communities Development Authority Revenue, Loma Linda University Medical Center: | | | |
| Series A, 5.25%, 12/1/2044 | | 195,000 | 221,431 |
| Series A, 144A, 5.25%, 12/1/2056 | | 735,000 | 829,549 |
| Series A, 5.5%, 12/1/2054 | | 195,000 | 221,686 |
| Series A, 144A, 5.5%, 12/1/2058 | | 105,000 | 124,766 |
| California, Tobacco Securitization Authority of Northern California, Tobacco Settlement Revenue, Series B-2, Zero Coupon, 6/1/2060 | | 1,725,000 | 422,078 |
| Riverside County, CA, Transportation Commission Toll Revenue Senior Lien, Series A, 5.75%, 6/1/2048 | | 1,000,000 | 1,088,685 |
| San Buenaventura, CA, Community Memorial Health Systems, Prerefunded, 7.5%, 12/1/2041 | | 500,000 | 517,925 |
| San Francisco, CA, City & County Airports Commission, International Airport Revenue: | | | |
| Series A, AMT, 5.0%, 5/1/2044 | | 1,000,000 | 1,118,490 |
| Series A, AMT, 5.0%, 5/1/2049 | | 1,110,000 | 1,361,972 |
| San Joaquin Hills, CA, Transportation Corridor Agency, Toll Road Revenue, Series A, 5.0%, 1/15/2050 | | 445,000 | 500,864 |
| | | | 13,372,407 |
| Colorado 4.3% | |
| Colorado, High Performance Transportation Enterprise Revenue, C-470 Express Lanes, 5.0%, 12/31/2056 | | 225,000 | 258,349 |
| Colorado, Park Creek Metropolitan District Revenue, Senior Ltd. Property Tax Supported, Series A, 5.0%, 12/1/2045 | | 235,000 | 269,622 |
| Colorado, Public Energy Authority, Natural Gas Purchased Revenue, 6.25%, 11/15/2028, GTY: Merrill Lynch & Co. | | 635,000 | 801,765 |
| Colorado, State Health Facilities Authority Revenue, CommonSpirit Health, Series A-2, 5.0%, 8/1/2044 | | 1,000,000 | 1,236,436 |
| Colorado, State Health Facilities Authority Revenue, School Health Systems, Series A, 5.5%, 1/1/2035 | | 1,000,000 | 1,127,561 |
| Colorado, State Health Facilities Authority, Hospital Revenue, Covenant Retirement Communities Obligated Group: | | | |
| Series A, 5.0%, 12/1/2043 | | 165,000 | 194,137 |
The accompanying notes are an integral part of the financial statements.
| 8 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| Series A, 5.0%, 12/1/2048 | | 260,000 | 304,635 |
| Denver City & County, CO, Special Facilities Airport Revenue, United Airlines, Inc. Project, AMT, 5.0%, 10/1/2032 | | 200,000 | 213,770 |
| Denver, CO, City & County Airport Revenue: | | | |
| Series A, AMT, 5.0%, 12/1/2048 | | 585,000 | 713,010 |
| Series A, AMT, 5.25%, 11/15/2043 | | 600,000 | 660,491 |
| Denver, CO, Health & Hospital Authority, Certificate of Participations, 5.0%, 12/1/2048 | | 140,000 | 169,219 |
| Denver, CO, Health & Hospital Authority, Healthcare Revenue, Series A, 4.0%, 12/1/2040 | | 300,000 | 347,981 |
| | | | 6,296,976 |
| Connecticut 0.1% | |
| Connecticut, State Health & Educational Facilities Authority Revenue, Covenant Home, Inc., Series B, 5.0%, 12/1/2040 | | 85,000 | 100,085 |
| District of Columbia 2.0% | |
| District of Columbia, Latin American Montessori Bilingual Public Charter School, 5.0%, 6/1/2050 | | 1,220,000 | 1,433,225 |
| District of Columbia, Metropolitan Airport Authority Systems Revenue: | | | |
| Series A, AMT, 5.0%, 10/1/2038 | | 200,000 | 219,596 |
| Series A, AMT, 5.0%, 10/1/2043 | | 850,000 | 934,113 |
| District of Columbia, Metropolitan Airport Authority, Dulles Toll Road Revenue, Dulles Metrorail & Capital Improvement Project, Series B, 4.0%, 10/1/2049 | | 320,000 | 366,401 |
| | | | 2,953,335 |
| Florida 10.9% | |
| Broward County, FL, Airport Systems Revenue: | | | |
| Series A, AMT, 4.0%, 10/1/2044 | | 145,000 | 166,794 |
| Series A, AMT, 4.0%, 10/1/2049 | | 230,000 | 262,972 |
| Collier County, FL, Industrial Development Authority, Continuing Care Community Revenue, Arlington of Naples Project, Series A, 144A, 8.125%, 5/15/2044* (b) | | 290,000 | 197,200 |
| Davie, FL, Educational Facilities Revenue, Nova Southeastern University Project, 5.0%, 4/1/2048 | | 335,000 | 394,909 |
| Florida, Capital Trust Agency, Educational Facilities Authority, Charter Educational Foundation Project, Series A, 144A, 5.375%, 6/15/2048 | | 230,000 | 257,600 |
| Florida, Capital Trust Agency, Educational Growth Fund LLC, Charter School Portfolio Project, Series A-1, 144A, 5.0%, 7/1/2056 | | 240,000 | 282,251 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 9 |
| | Principal
Amount ($) | Value ($) |
| Florida, Development Finance Corp., Educational Facilities Revenue, Mater Academy Projects: | | | |
| Series A, 5.0%, 6/15/2050 | | 140,000 | 159,204 |
| Series A, 5.0%, 6/15/2055 | | 125,000 | 141,312 |
| Florida, Development Finance Corp., Surface Transportation Facilities Revenue, Brightline Passenger Rail Project, Series B, 144A, AMT, 7.375%, 1/1/2049 | | 750,000 | 814,303 |
| Florida, Development Finance Corp., Surface Transportation Facilities Revenue, Virgin Trains USA Passenger Rail Project: | | | |
| Series A, 144A, AMT, 6.375% (c), 1/1/2049 | | 155,000 | 157,810 |
| Series A, 144A, AMT, 6.5% (c), 1/1/2049 | | 170,000 | 172,773 |
| Florida, State Atlantic University Finance Corp., Capital Improvements Revenue, Student Housing Project, Series B, 4.0%, 7/1/2044 | | 1,685,000 | 1,944,594 |
| Florida, State Higher Educational Facilities Financial Authority Revenue, Florida Institution of Technology, 4.0%, 10/1/2049 | | 1,000,000 | 1,094,810 |
| Florida, Tolomato Community Development District, Special Assessment: | | | |
| Series 2015-1, Step-up Coupon, 0.0% to 11/1/2021, 6.61% to 5/1/2040 | | 250,000 | 241,844 |
| Series 2015-2, Step-up Coupon, 0.0% to 11/1/2024, 6.61% to 5/1/2040 | | 150,000 | 113,501 |
| Series A-4, Step-up Coupon, 0.0% to 5/1/2022, 6.61% to 5/1/2040 | | 55,000 | 48,622 |
| Series 3, 6.55%, 5/1/2027* (b) | | 130,000 | 1 |
| Series 2015-3, 6.61%, 5/1/2040* (b) | | 165,000 | 2 |
| Florida, Village Community Development District No. 12, Special Assessment Revenue: | | | |
| 144A, 4.25%, 5/1/2043 | | 385,000 | 429,600 |
| 144A, 4.375%, 5/1/2050 | | 290,000 | 323,543 |
| Florida, Village Community Development District No. 9, Special Assessment Revenue, 5.5%, 5/1/2042 | | 140,000 | 144,064 |
| Greater Orlando, FL, Aviation Authority Airport Facilities Revenue, Series A, AMT, 5.0%, 10/1/2047 | | 400,000 | 484,709 |
| Hillsborough County, FL, Aviation Authority, Tampa International Airport, Series A, AMT, 5.0%, 10/1/2048 | | 500,000 | 617,659 |
| Martin County, FL, Health Facilities Authority, Martin Memorial Medical Center, Prerefunded, 5.5%, 11/15/2042 | | 335,000 | 343,171 |
| Miami Beach, FL, Health Facilities Authority, Mount Sinai Medical Center, 5.0%, 11/15/2044 | | 500,000 | 553,440 |
| Miami-Dade County, FL, Aviation Revenue, Series B, AMT, 5.0%, 10/1/2040 | | 470,000 | 571,747 |
The accompanying notes are an integral part of the financial statements.
| 10 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| Miami-Dade County, FL, Health Facilities Authority Hospital Revenue, Nicklaus Children’s Hospital, 5.0%, 8/1/2047 | | 665,000 | 801,068 |
| Seminole County, FL, Industrial Development Authority, Legacy Pointe At UCF Project, Series A, 5.5%, 11/15/2049 | | 365,000 | 377,700 |
| Tallahassee, FL, Health Facilities Revenue, Memorial Healthcare, Inc. Project, Series A, 5.0%, 12/1/2055 | | 1,150,000 | 1,288,679 |
| Tampa, FL, The University of Tampa Project, Series A, 4.0%, 4/1/2050 | | 160,000 | 182,560 |
| Tampa-Hillsborough County, FL, Expressway Authority: | | | |
| Series A, Prerefunded, 5.0%, 7/1/2031 | | 1,500,000 | 1,578,684 |
| Series A, Prerefunded, 5.0%, 7/1/2037 | | 1,590,000 | 1,673,405 |
| | | | 15,820,531 |
| Georgia 3.7% | |
| Americus-Sumter County, GA, Hospital Authority, Magnolia Manor Obligated Group, Series A, Prerefunded, 6.25%, 5/15/2033 | | 1,000,000 | 1,117,016 |
| Atlanta, GA, Airport Revenue, Series C, AMT, 5.0%, 1/1/2037 | | 375,000 | 384,918 |
| Atlanta, GA, Development Authority Revenue Bonds, Series A-1, 5.0%, 7/1/2027 | | 70,000 | 81,044 |
| Cobb County, GA, Kennestone Hospital Authority, Revenue Anticipation Certificates, Wellstar Health System, Series A, 5.0%, 4/1/2047 | | 175,000 | 209,000 |
| DeKalb County, GA, Water & Sewer Revenue, Series A, 5.25%, 10/1/2036 | | 1,000,000 | 1,016,191 |
| Fulton County, GA, Development Authority Hospital Revenue, Revenue Anticipation Certificates, Wellstar Health System, Series A, 5.0%, 4/1/2042 | | 210,000 | 250,677 |
| Gainesville & Hall County, GA, Hospital Authority, Northeast Georgia Health System, Inc. Project, Series A, 5.5%, 8/15/2054 | | 180,000 | 206,585 |
| George L Smith II, GA, Congress Center Authority, Convention Center Hotel Second Tier, Series B, 144A, 5.0%, 1/1/2054 | | 620,000 | 734,951 |
| Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 5.5%, 9/15/2024, GTY: Merrill Lynch & Co. | | 1,220,000 | 1,413,393 |
| | | | 5,413,775 |
| Hawaii 1.1% | |
| Hawaii, State Airports Systems Revenue, Series A, AMT, 5.0%, 7/1/2041 | | 695,000 | 797,803 |
| Hawaii, State Department of Budget & Finance, Special Purpose Revenue, 3.2%, 7/1/2039 | | 745,000 | 812,566 |
| | | | 1,610,369 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 11 |
| | Principal
Amount ($) | Value ($) |
| Illinois 15.1% | |
| Chicago, IL, Board of Education: | | | |
| Series A, 5.0%, 12/1/2032 | | 105,000 | 130,044 |
| Series A, 5.0%, 12/1/2033 | | 100,000 | 123,454 |
| Series H, 5.0%, 12/1/2036 | | 245,000 | 293,499 |
| Series H, 5.0%, 12/1/2046 | | 140,000 | 164,917 |
| Chicago, IL, General Obligation: | | | |
| Series A, 5.0%, 1/1/2036 | | 500,000 | 539,790 |
| Series A, 5.0%, 1/1/2044 | | 200,000 | 238,040 |
| Series D, 5.5%, 1/1/2037 | | 750,000 | 843,340 |
| Series A, 5.5%, 1/1/2049 | | 115,000 | 140,000 |
| Series A, 6.0%, 1/1/2038 | | 555,000 | 675,592 |
| Chicago, IL, O’Hare International Airport Revenue: | | | |
| Series A, AMT, 5.0%, 1/1/2037 | | 1,500,000 | 1,858,355 |
| Series C, AMT, 5.0%, 1/1/2046 | | 1,000,000 | 1,132,533 |
| Chicago, IL, O’Hare International Airport Revenue, Senior Lien: | | | |
| Series D, AMT, 5.0%, 1/1/2047 | | 415,000 | 495,097 |
| Series D, AMT, 5.0%, 1/1/2052 | | 560,000 | 668,123 |
| Chicago, IL, O’Hare International Airport, Special Facility Revenue, AMT, 5.0%, 7/1/2048 | | 130,000 | 154,662 |
| Chicago, IL, Transit Authority, Sales Tax Receipts Revenue: | | | |
| Series A, 4.0%, 12/1/2050 | | 95,000 | 108,503 |
| Series A, 4.0%, 12/1/2055 | | 90,000 | 102,411 |
| Illinois, Metropolitan Pier & Exposition Authority Revenue, McCormick Place Expansion Project: | | | |
| Series B, 5.0%, 6/15/2052 | | 520,000 | 536,838 |
| Series A, 5.0%, 6/15/2057 | | 390,000 | 461,603 |
| Illinois, Metropolitan Pier & Exposition Authority, Dedicated State Tax Revenue, Capital Appreciation-McCormick, Series A, Zero Coupon, 6/15/2036, INS: NATL | | 3,000,000 | 2,075,802 |
| Illinois, Railsplitter Tobacco Settlement Authority, Prerefunded, 6.0%, 6/1/2028 | | 365,000 | 365,000 |
| Illinois, State Finance Authority Revenue, Friendship Village of Schaumburg, 5.0%, 2/15/2037 | | 1,000,000 | 737,851 |
| Illinois, State Finance Authority Revenue, OSF Healthcare Systems, Series A, 5.0%, 11/15/2045 | | 525,000 | 605,131 |
| Illinois, State Finance Authority Revenue, Trinity Health Corp., Series L, Prerefunded, 5.0%, 12/1/2030 | | 1,000,000 | 1,024,555 |
| Illinois, State Finance Authority, Health Services Facilities Lease Revenue, University of Health Services Facility Project, 4.0%, 10/1/2050 | | 1,400,000 | 1,593,989 |
| Illinois, State General Obligation: | | | |
| Series D, 5.0%, 11/1/2027 | | 500,000 | 615,908 |
The accompanying notes are an integral part of the financial statements.
| 12 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| 5.0%, 2/1/2029 | | 495,000 | 590,551 |
| Series A, 5.0%, 10/1/2033 | | 620,000 | 755,325 |
| Series B, 5.0%, 10/1/2033 | | 395,000 | 481,215 |
| 5.0%, 2/1/2039 | | 2,000,000 | 2,174,416 |
| 5.0%, 5/1/2039 | | 315,000 | 343,861 |
| Series A, 5.0%, 12/1/2042 | | 435,000 | 510,724 |
| Series A, 5.0%, 3/1/2046 | | 135,000 | 167,861 |
| 5.75%, 5/1/2045 | | 590,000 | 762,001 |
| Springfield, IL, Electric Revenue, Senior Lien, 5.0%, 3/1/2040, INS: AGMC | | 385,000 | 443,215 |
| | | | 21,914,206 |
| Indiana 2.4% | |
| Indiana, State Finance Authority Revenue, Community Foundation of Northwest Indiana, Prerefunded, 5.0%, 3/1/2041 | | 1,000,000 | 1,036,821 |
| Indiana, State Finance Authority Revenue, Greencroft Obligation Group, Series A, 7.0%, 11/15/2043 | | 460,000 | 500,002 |
| Indiana, State Finance Authority, Health Facilities Revenue, Baptist Healthcare System, Series A, 5.0%, 8/15/2051 | | 1,560,000 | 1,867,078 |
| | | | 3,403,901 |
| Iowa 0.9% | |
| Iowa, Finance Authority, Educational Facility Revenue, Holy Family Catholic School Project, 0.02% (d), 6/1/2021, LOC: U.S. Bank NA | | 55,000 | 55,000 |
| Iowa, State Higher Education Loan Authority Revenue, Private College Facility, Des Moines University Project: | | | |
| 4.0%, 10/1/2045 | | 230,000 | 261,301 |
| 4.0%, 10/1/2050 | | 770,000 | 871,863 |
| Iowa, Tobacco Settlement Authority Revenue, “1” , Series A-2, 4.0%, 6/1/2049 | | 130,000 | 150,897 |
| | | | 1,339,061 |
| Kansas 0.2% | |
| Wyandotte County, KS, Unified Government, Legends Apartments Garage & West Lawn Project, 4.5%, 6/1/2040 | | 275,000 | 288,223 |
| Kentucky 1.7% | |
| Columbia, KY, Educational Development Revenue, Lindsey Wilson College Project, 5.0%, 12/1/2033 | | 440,000 | 501,562 |
| Kentucky, Public Transportation Infrastructure Authority Toll Revenue, 1st Tier-Downtown Crossing, Series A, 6.0%, 7/1/2053 | | 1,440,000 | 1,596,085 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 13 |
| | Principal
Amount ($) | Value ($) |
| Kentucky, State Economic Development Finance Authority, Owensboro Health, Inc., Obligated Group: | | | |
| Series A, 5.0%, 6/1/2045 | | 130,000 | 148,690 |
| Series A, 5.25%, 6/1/2041 | | 190,000 | 222,791 |
| | | | 2,469,128 |
| Louisiana 2.1% | |
| Calcasieu Parish, LA, Memorial Hospital Service, District Hospital Revenue, 5.0%, 12/1/2039 | | 500,000 | 545,138 |
| Louisiana, New Orleans Aviation Board, General Airport North Terminal, Series B, AMT, 5.0%, 1/1/2048 | | 140,000 | 167,000 |
| Louisiana, Public Facilities Authority Revenue, Ochsner Clinic Foundation Project, 5.0%, 5/15/2046 | | 1,000,000 | 1,197,049 |
| Louisiana, State Local Government Environmental Facilities & Community Development Authority Revenue, Westlake Chemical Corp. Project, 3.5%, 11/1/2032 | | 1,010,000 | 1,123,918 |
| | | | 3,033,105 |
| Maine 0.7% | |
| Maine, Health & Higher Educational Facilities Authority Revenue, Maine General Medical Center, Prerefunded, 6.75%, 7/1/2036 | | 1,000,000 | 1,005,363 |
| Maryland 1.3% | |
| Maryland, State Economic Development Corp., Port Covington Project, 4.0%, 9/1/2050 | | 100,000 | 114,581 |
| Maryland, State Economic Development Corp., Student Housing Revenue, Morgan State University Project: | | | |
| 5.0%, 7/1/2050 | | 60,000 | 73,870 |
| 5.0%, 7/1/2056 | | 110,000 | 134,819 |
| Maryland, State Health & Higher Educational Facilities Authority Revenue, Adventist Healthcare, Obligated Group, Series A, 5.5%, 1/1/2046 | | 375,000 | 443,120 |
| Maryland, State Health & Higher Educational Facilities Authority Revenue, Meritus Medical Center Obligated Group, 5.0%, 7/1/2040 | | 1,000,000 | 1,138,698 |
| | | | 1,905,088 |
| Massachusetts 4.2% | |
| Massachusetts, State Development Finance Agency Revenue, Partners Healthcare System, Inc., Series Q, 5.0%, 7/1/2035 | | 5,000,000 | 6,029,971 |
| Massachusetts, State Health & Educational Facilities Authority Revenue, Baystate Medical Center, Series K-1, 0.01% (d), 6/1/2021, LOC: TD Bank NA | | 100,000 | 100,000 |
| | | | 6,129,971 |
The accompanying notes are an integral part of the financial statements.
| 14 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| Michigan 2.7% | |
| Detroit, MI, Water & Sewerage Department, Sewerage Disposal System Revenue, Series A, Prerefunded, 5.25%, 7/1/2039 | | 280,000 | 295,601 |
| Detroit, MI, Water Supply Systems Revenue, Series A, Prerefunded, 5.75%, 7/1/2037 | | 1,000,000 | 1,004,582 |
| Michigan, State Building Authority Revenue, Facilities Program, Series I-A, Prerefunded, 5.5%, 10/15/2045 | | 2,000,000 | 2,040,183 |
| Michigan, State Finance Authority Revenue, Detroit Water & Sewer Department: | | | |
| Series C-3, 5.0%, 7/1/2033, INS: AGMC | | 180,000 | 204,360 |
| Series C, 5.0%, 7/1/2035 | | 90,000 | 105,111 |
| Tawas City, MI, Hospital Finance Authority, St. Joseph Health Services, Series A, ETM, 5.75%, 2/15/2023 | | 320,000 | 321,260 |
| | | | 3,971,097 |
| Minnesota 1.2% | |
| Duluth, MN, Economic Development Authority, Health Care Facilities Revenue, Essentia Health Obligated Group: | | | |
| Series A, 5.0%, 2/15/2048 | | 200,000 | 239,718 |
| Series A, 5.0%, 2/15/2053 | | 565,000 | 674,605 |
| Minneapolis, MN, Health Care Systems Revenue, Fairview Health Services, Series A, 5.0%, 11/15/2049 | | 205,000 | 247,293 |
| Minnesota, State Housing Finance Agency, Series E, 3.5%, 7/1/2050 | | 250,000 | 276,481 |
| Minnesota, State Office of Higher Education Revenue, AMT, 2.65%, 11/1/2038 | | 265,000 | 270,782 |
| | | | 1,708,879 |
| Mississippi 0.6% | |
| Lowndes County, MS, Solid Waste Disposal & Pollution Control Revenue, Weyerhaeuser Co. Project, Series A, 6.8%, 4/1/2022 | | 250,000 | 262,683 |
| West Rankin, MS, Utility Authority Revenue, 5.0%, 1/1/2048, INS: AGMC | | 500,000 | 611,171 |
| | | | 873,854 |
| Missouri 1.5% | |
| Kansas City, MO, Industrial Development Authority, Airport Special Obligation, International Airport Terminal Modernization Project, Series B, AMT, 5.0%, 3/1/2046 | | 1,000,000 | 1,225,415 |
| Kansas City, MO, Land Clearance Redevelopment Authority Project Revenue, Convention Center Hotel Project: | | | |
| Series B, 144A, 5.0%, 2/1/2040 | | 200,000 | 217,066 |
| Series B, 144A, 5.0%, 2/1/2050 | | 220,000 | 237,283 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 15 |
| | Principal
Amount ($) | Value ($) |
| Missouri, State Health & Educational Facilities Authority Revenue, Medical Research, Lutheran Senior Services, Series A, 5.0%, 2/1/2046 | | 65,000 | 73,146 |
| Missouri, State Health & Educational Facilities Authority, Health Facilities Revenue, Lester E Cox Medical Centers, Series A, 5.0%, 11/15/2048 | | 150,000 | 163,911 |
| St. Louis, MO, Industrial Development Authority Financing Revenue, Ballpark Village Development Project, Series A, 4.75%, 11/15/2047 | | 225,000 | 230,695 |
| | | | 2,147,516 |
| Nebraska 0.5% | |
| Douglas County, NE, Hospital Authority No.2, Health Facilities, Children’s Hospital Obligated Group, 5.0%, 11/15/2047 | | 535,000 | 641,111 |
| Nebraska, Central Plains Energy Project, Gas Project Revenue, Series A, 5.0%, 9/1/2029, GTY: Goldman Sachs Group, Inc. | | 70,000 | 89,204 |
| | | | 730,315 |
| Nevada 1.2% | |
| Las Vegas Valley, NV, Water District, Series B, 5.0%, 6/1/2037 | | 1,565,000 | 1,636,676 |
| Reno, NV, Sales Tax Revenue, Transportation Rail Access, Series C, 144A, Zero Coupon, 7/1/2058 | | 500,000 | 83,798 |
| | | | 1,720,474 |
| New Hampshire 0.1% | |
| New Hampshire, State Health & Educational Facilities Authority Revenue, Hillside Village: | | | |
| Series A, 144A, 6.125%, 7/1/2037* (b) | | 100,000 | 75,000 |
| Series A, 144A, 6.25%, 7/1/2042* (b) | | 125,000 | 93,750 |
| | | | 168,750 |
| New Jersey 7.6% | |
| Atlantic County, NJ, Improvement Authority Lease Revenue, Atlantic City Compus Phase II Project, Series A, 4.0%, 7/1/2053, INS: AGMC | | 125,000 | 147,010 |
| Atlantic County, NJ, Improvement Authority Lease Revenue, General Obligation Bonds, Atlantic City Compus Phase II Project, Series A, 4.0%, 7/1/2047, INS: AGMC | | 95,000 | 112,460 |
| Essex County, NJ, Improvement Authority Network LLC, Student Housing Project, Series A, 4.0%, 8/1/2060, INS: BAM | | 315,000 | 369,642 |
| New Jersey, Economic Development Authority, Self Designated Social Bonds: | | | |
| Series QQQ, 4.0%, 6/15/2046 | | 40,000 | 45,885 |
| Series QQQ, 4.0%, 6/15/2050 | | 40,000 | 45,689 |
The accompanying notes are an integral part of the financial statements.
| 16 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| New Jersey, State Covid-19 General Obligation Emergency Bonds: | | | |
| Series A, 4.0%, 6/1/2030 | | 85,000 | 105,075 |
| Series A, 4.0%, 6/1/2031 | | 85,000 | 106,619 |
| Series A, 4.0%, 6/1/2032 | | 40,000 | 50,940 |
| New Jersey, State Economic Development Authority Revenue, Series BBB, 5.5%, 6/15/2030 | | 895,000 | 1,098,428 |
| New Jersey, State Economic Development Authority Revenue, Black Horse EHT Urban Renewal LLC Project, Series A, 144A, 5.0%, 10/1/2039 | | 605,000 | 614,850 |
| New Jersey, State Economic Development Authority Revenue, White Horse HMT Urban Renewal LLC Project, 144A, 5.0%, 1/1/2040 | | 270,000 | 273,487 |
| New Jersey, State Economic Development Authority, Special Facilities Revenue, Continental Airlines, Inc. Project, Series B, AMT, 5.625%, 11/15/2030 | | 500,000 | 561,261 |
| New Jersey, State Economic Development Authority, State Government Buildings Project: | | | |
| Series A, 5.0%, 6/15/2042 | | 115,000 | 138,396 |
| Series A, 5.0%, 6/15/2047 | | 130,000 | 155,379 |
| New Jersey, State Health Care Facilities Financing Authority Revenue, University Hospital, Series A, 5.0%, 7/1/2046, INS: AGMC | | 180,000 | 206,675 |
| New Jersey, State Higher Education Assistance Authority, Student Loan Revenue: | | | |
| Series B, AMT, 2.5%, 12/1/2040 | | 205,000 | 208,172 |
| Series B, AMT, 3.5%, 12/1/2039 | | 200,000 | 220,287 |
| New Jersey, State Transportation Trust Fund Authority: | | | |
| Series AA, 4.0%, 6/15/2045 | | 175,000 | 200,973 |
| Series AA, 4.0%, 6/15/2050 | | 190,000 | 216,289 |
| Series B, 5.5%, 6/15/2031 | | 1,500,000 | 1,502,890 |
| New Jersey, State Transportation Trust Fund Authority, Transportation Program, Series AA, 5.0%, 6/15/2046 | | 1,400,000 | 1,708,405 |
| New Jersey, State Turnpike Authority Revenue, Series A, 4.0%, 1/1/2051 | | 2,000,000 | 2,360,309 |
| New Jersey, Tobacco Settlement Financing Corp.: | | | |
| Series A, 5.0%, 6/1/2046 | | 350,000 | 418,244 |
| Series A, 5.25%, 6/1/2046 | | 175,000 | 213,242 |
| | | | 11,080,607 |
| New Mexico 0.3% | |
| New Mexico, State Mortgage Finance Authority, “I” , Series D, 3.25%, 7/1/2044 | | 470,000 | 498,825 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 17 |
| | Principal
Amount ($) | Value ($) |
| New York 8.0% | |
| Monroe County, NY, Industrial Development Corp. Revenue, St. Ann’s Community Project, 5.0%, 1/1/2050 | | 750,000 | 820,100 |
| New York, Brooklyn Arena Local Development Corp., Pilot Revenue, Barclays Center Project, Series A, 4.0%, 7/15/2035, INS: AGMC | | 45,000 | 49,483 |
| New York, Buffalo & Fort Erie Public Bridge Authority, 5.0%, 1/1/2047 | | 1,000,000 | 1,186,505 |
| New York, Metropolitan Transportation Authority Revenue: | | | |
| Series D, 5.0%, 11/15/2033 | | 500,000 | 618,246 |
| Series D, 5.0%, 11/15/2038 | | 275,000 | 300,065 |
| Series E-1, 5.0%, 11/15/2042 | | 70,000 | 74,226 |
| Series E-1, Prerefunded, 5.0%, 11/15/2042 | | 235,000 | 251,784 |
| Series C-1, 5.0%, 11/15/2050 | | 1,845,000 | 2,267,589 |
| Series C-1, 5.25%, 11/15/2055 | | 210,000 | 261,947 |
| New York, Metropolitan Transportation Authority Revenue, Green Bond, Series D-3, 4.0%, 11/15/2049 | | 500,000 | 573,197 |
| New York, Metropolitan Transportation Authority, Dedicated Tax Fund, Series A-1, 0.02% (d), 6/1/2021, LOC: TD Bank NA | | 600,000 | 600,000 |
| New York, State Liberty Development Corp. Revenue, World Trade Center, “1-3” , 144A, 5.0%, 11/15/2044 | | 415,000 | 459,260 |
| New York, State Transportation Development Corp., Special Facilities Revenue, American Airlines, Inc., John F. Kennedy International Airport Project, AMT, 5.0%, 8/1/2031, GTY: American Airlines Group | | 445,000 | 448,148 |
| New York, State Transportation Development Corp., Special Facilities Revenue, Delta Air Lines, Inc., LaGuardia Airport C&D Redevelopment, AMT, 5.0%, 1/1/2033 | | 100,000 | 121,624 |
| New York, State Transportation Development Corp., Special Facilities Revenue, Laguardia Gateway Partners LLC, Redevelopment Project, Series A, AMT, 5.0%, 7/1/2041 | | 1,200,000 | 1,359,779 |
| New York, Triborough Bridge & Tunnel Authority Revenue, Series F, 0.01% (d), 6/1/2021, LOC: Citibank NA | | 100,000 | 100,000 |
| New York, TSASC, Inc.: | | | |
| Series A, 5.0%, 6/1/2041 | | 60,000 | 70,162 |
| Series B, 5.0%, 6/1/2048 | | 1,040,000 | 1,136,670 |
| New York, NY, General Obligation, Series G-6, 0.01% (d), 6/1/2021, LOC: Mizuho Bank Ltd. | | 150,000 | 150,000 |
| Port Authority of New York & New Jersey, Series 207, AMT, 5.0%, 9/15/2048 | | 625,000 | 751,948 |
| | | | 11,600,733 |
The accompanying notes are an integral part of the financial statements.
| 18 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| North Carolina 0.4% | |
| New Hanover County, NC, Hospital Revenue, New Hanover Regional Medical Centre: | | | |
| Prerefunded, 5.0%, 10/1/2042 | | 260,000 | 326,179 |
| Prerefunded, 5.0%, 10/1/2047 | | 240,000 | 301,088 |
| | | | 627,267 |
| Ohio 6.0% | |
| Buckeye, OH, Tobacco Settlement Financing Authority, “2” , Series B-2, 5.0%, 6/1/2055 | | 2,450,000 | 2,840,133 |
| Centerville, OH, Health Care Revenue, Graceworks Lutheran Services, 5.25%, 11/1/2047 | | 220,000 | 232,862 |
| Chillicothe, OH, Hospital Facilities Revenue, Adena Health System Obligated Group Project, 5.0%, 12/1/2047 | | 445,000 | 532,110 |
| Cleveland-Cuyahoga County, OH, Port Authority Cultural Facility Revenue, Playhouse Square Foundation Project, 5.5%, 12/1/2053 | | 270,000 | 314,821 |
| Cleveland-Cuyahoga County, OH, Port Authority, Cultural Facility Revenue, PlayHouse Square Foundation Project, 5.5%, 12/1/2043 | | 1,290,000 | 1,504,145 |
| Ohio, Akron, Bath & Copley Joint Township Hospital District Revenue, 5.25%, 11/15/2046 | | 615,000 | 725,726 |
| Ohio, American Municipal Power, Inc. Revenue, Fremont Energy Center Project, Series B, 5.0%, 2/15/2037 | | 1,575,000 | 1,629,392 |
| Ohio, State Air Quality Development Authority, Exempt Facilities Revenue, Pratt Paper LLC Project: | | | |
| AMT, 144A, 4.25%, 1/15/2038, GTY: Pratt Industries, Inc. | | 70,000 | 79,024 |
| AMT, 144A, 4.5%, 1/15/2048, GTY: Pratt Industries, Inc. | | 225,000 | 255,672 |
| Ohio, State Hospital Revenue, Aultman Health Foundation, 144A, 5.0%, 12/1/2048 | | 500,000 | 530,463 |
| | | | 8,644,348 |
| Oklahoma 0.9% | |
| Oklahoma, State Development Finance Authority, Health System Revenue, OU Medicine Project: | | | |
| Series B, 5.5%, 8/15/2052 | | 180,000 | 222,222 |
| Series B, 5.5%, 8/15/2057 | | 880,000 | 1,083,903 |
| | | | 1,306,125 |
| Oregon 0.6% | |
| Clackamas County, OR, Hospital Facilities Authority Revenue, Mary’s Woods at Marylhurst, Inc. Project, Series A, 5.0%, 5/15/2038 | | 25,000 | 27,275 |
| Oregon, Portland Airport Revenue, Series 25B, AMT, 5.0%, 7/1/2049 | | 665,000 | 817,626 |
| | | | 844,901 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 19 |
| | Principal
Amount ($) | Value ($) |
| Pennsylvania 6.8% | |
| Franklin County, PA, Industrial Development Authority Revenue, Menno Haven, Inc. Project: | | | |
| 5.0%, 12/1/2043 | | 60,000 | 64,783 |
| 5.0%, 12/1/2054 | | 175,000 | 187,434 |
| Lancaster County, PA, Hospital Authority, Brethren Village Project: | | | |
| 5.125%, 7/1/2037 | | 100,000 | 110,966 |
| 5.25%, 7/1/2041 | | 100,000 | 110,719 |
| Pennsylvania, Certificate of Participations, Series A, 5.0%, 7/1/2043 | | 155,000 | 187,064 |
| Pennsylvania, Commonwealth Financing Authority, Series A, 5.0%, 6/1/2035 | | 315,000 | 366,945 |
| Pennsylvania, Commonwealth Financing Authority, Tobacco Master Settlement Payment Revenue Bonds: | | | |
| 5.0%, 6/1/2034 | | 250,000 | 306,924 |
| 5.0%, 6/1/2035 | | 125,000 | 153,255 |
| Pennsylvania, Geisinger Authority Health System Revenue, Series A-1, 5.0%, 2/15/2045 | | 740,000 | 882,300 |
| Pennsylvania, Higher Education Assistance Agency Education Loan Revenue, Series A, AMT, 2.625%, 6/1/2042 (a) | | 200,000 | 200,527 |
| Pennsylvania, State Economic Development Financing Authority Revenue, Bridges Finco LP: | | | |
| 5.0%, 12/31/2034 | | 1,000,000 | 1,173,372 |
| AMT, 5.0%, 12/31/2038 | | 1,000,000 | 1,167,617 |
| Pennsylvania, State Turnpike Commission Revenue: | | | |
| Series A, 4.0%, 12/1/2043 | | 750,000 | 891,008 |
| Series A, 4.0%, 12/1/2044 | | 90,000 | 106,482 |
| Series A, 4.0%, 12/1/2045 | | 30,000 | 35,428 |
| Series A, 4.0%, 12/1/2046 | | 60,000 | 70,777 |
| Series A-1, 5.0%, 12/1/2040 | | 2,500,000 | 2,913,490 |
| Series C, 5.0%, 12/1/2044 | | 240,000 | 274,383 |
| Philadelphia, PA, School District, Series B, 5.0%, 9/1/2043 | | 500,000 | 616,398 |
| | | | 9,819,872 |
| South Carolina 3.1% | |
| South Carolina, State Ports Authority Revenue, Series B, AMT, 4.0%, 7/1/2059 | | 2,000,000 | 2,267,380 |
| South Carolina, State Public Service Authority Revenue, Series E, 5.25%, 12/1/2055 | | 1,070,000 | 1,263,751 |
| South Carolina, State Public Service Authority Revenue, Santee Cooper, Series A, Prerefunded, 5.75%, 12/1/2043 | | 890,000 | 1,012,982 |
| | | | 4,544,113 |
The accompanying notes are an integral part of the financial statements.
| 20 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| South Dakota 0.3% | |
| Lincon County, SD, Economic Development Revenue, Augustana Collage Assocition Project: | | | |
| Series A, 4.0%, 8/1/2051 | | 125,000 | 139,619 |
| Series A, 4.0%, 8/1/2056 | | 125,000 | 138,233 |
| Series A, 4.0%, 8/1/2061 | | 165,000 | 180,479 |
| | | | 458,331 |
| Tennessee 1.0% | |
| Greeneville, TN, Health & Educational Facilities Board Hospital Revenue, Ballad Health Obligation Group: | | | |
| Series A, 5.0%, 7/1/2037 | | 300,000 | 368,804 |
| Series A, 5.0%, 7/1/2044 | | 400,000 | 485,280 |
| Nashville & Davidson County, TN, Metropolitan Government Health & Education Facilities Board Revenue, Blakeford At Green Hills Corp., Series A, 4.0%, 11/1/2055 | | 500,000 | 534,017 |
| | | | 1,388,101 |
| Texas 15.4% | |
| Central Texas, Regional Mobility Authority Revenue, Senior Lien: | | | |
| Series A, 5.0%, 1/1/2040 | | 230,000 | 264,092 |
| Series A, Prerefunded, 5.0%, 1/1/2043 | | 1,500,000 | 1,616,049 |
| Dallas-Fort Worth, International Airport Revenue, Series D, AMT, Prerefunded, 5.0%, 11/1/2038 | | 2,000,000 | 2,040,032 |
| Houston, TX, Airport System Revenue, Series A, AMT, 5.0%, 7/1/2041 | | 750,000 | 930,320 |
| Matagorda County, TX, Navigation District No. 1, Pollution Control Revenue, AEP Texas Central Co. Project, Series A, 4.4%, 5/1/2030, INS: AMBAC | | 1,250,000 | 1,524,417 |
| Newark, TX, Higher Education Finance Corp., Education Revenue, Austin Achieve Public School, Inc., 5.0%, 6/15/2048 | | 60,000 | 61,717 |
| North Texas, Tollway Authority Revenue: | | | |
| Series B, 5.0%, 1/1/2045 | | 665,000 | 757,402 |
| 5.0%, 1/1/2048 | | 1,355,000 | 1,630,799 |
| San Antonio, TX, Convention Center Hotel Finance Corp., Contract Revenue, Empowerment Zone, Series A, AMT, 5.0%, 7/15/2039, INS: AMBAC | | 1,000,000 | 1,000,724 |
| Tarrant County, TX, Cultural Education Facilities Finance Corp. Revenue, Christus Health Obligated Group, Series B, 5.0%, 7/1/2048 | | 1,000,000 | 1,219,295 |
| Tarrant County, TX, Cultural Education Facilities Finance Corp. Revenue, Trinity Terrace Project, The Cumberland Rest, Inc., Series A-1, 5.0%, 10/1/2044 | | 175,000 | 191,120 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 21 |
| | Principal
Amount ($) | Value ($) |
| Tarrant County, TX, Cultural Education Facilities Finance Corp., Buckner Retirement Services Revenue, 5.0%, 11/15/2046 | | 1,000,000 | 1,170,762 |
| Tarrant County, TX, Cultural Education Facilities Finance Corp., Hospital Revenue, Scott & White Healthcare, Prerefunded, 5.0%, 8/15/2043 | | 2,100,000 | 2,322,418 |
| Temple, TX, Tax Increment, Reinvestment Zone No. 1, Series A, 144A, 5.0%, 8/1/2038 | | 300,000 | 330,723 |
| Temple, TX, Tax Increment, Reinvestment Zone No. One: | | | |
| Series A, 4.0%, 8/1/2039, INS: BAM (a) | | 75,000 | 87,509 |
| Series A, 4.0%, 8/1/2041, INS: BAM (a) | | 90,000 | 104,766 |
| Texas, Grand Parkway Transportation Corp., System Toll Revenue: | | | |
| First Tier, Series C, 4.0%, 10/1/2049 | | 600,000 | 702,837 |
| Series B, Prerefunded, 5.0%, 4/1/2053 | | 500,000 | 556,644 |
| Texas, Love Field Airport Modernization Corp., Special Facilities Revenue, Southwest Airlines Co. Project, 5.25%, 11/1/2040 | | 1,055,000 | 1,076,219 |
| Texas, New Hope Cultural Education Facilities Finance Corp., Educational Revenue, Cumberland Academy Project, Series A, 144A, 5.0%, 8/15/2050 | | 700,000 | 758,895 |
| Texas, New Hope Cultural Education Facilities Finance Corp., Retirement Facilities Revenue, Presbyterian Village North Project: | | | |
| 5.0%, 10/1/2039 | | 180,000 | 193,430 |
| Series A, 5.25%, 10/1/2055 | | 2,000,000 | 2,171,041 |
| Texas, New Hope Cultural Education Facilities Finance Corp., Senior Living Revenue, Bridgemoor Plano Project, Series A, 7.25%, 12/1/2053 | | 460,000 | 416,456 |
| Texas, State Private Activity Bond, Surface Transportation Corp. Revenue, Senior Lien, North Tarrant Express Mobility Partners Segments LLC, AMT, 6.75%, 6/30/2043 | | 280,000 | 317,903 |
| Texas, State Transportation Commission, Turnpike Systems Revenue, Series C, 5.0%, 8/15/2034 | | 825,000 | 926,029 |
| | | | 22,371,599 |
| Utah 1.7% | |
| Salt Lake City, UT, Airport Revenue: | | | |
| Series A, AMT, 5.0%, 7/1/2043 | | 190,000 | 230,225 |
| Series A, AMT, 5.0%, 7/1/2047 | | 595,000 | 717,135 |
| Series A, AMT, 5.0%, 7/1/2048 | | 115,000 | 139,257 |
| Utah, Infrastructure Agency Telecommunication Revenue: | | | |
| 4.0%, 10/15/2041 | | 100,000 | 116,281 |
| Series 2019, 4.0%, 10/15/2042 | | 650,000 | 744,751 |
The accompanying notes are an integral part of the financial statements.
| 22 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| Utah, State Charter School Finance Authority, St. George Campus Project, Series A, 144A, 5.0%, 6/15/2052 | | 170,000 | 193,738 |
| Utah, State Charter School Financing Authority Revenue, Freedom Academy Foundation Project, 144A, 5.375%, 6/15/2048 | | 320,000 | 357,924 |
| | | | 2,499,311 |
| Virginia 1.6% | |
| Roanoke County, VA, Economic Development Authority, RSDL Care Facilities Revenue, Richfield Living: | | | |
| Series 2020, 5.0%, 9/1/2050 | | 220,000 | 214,698 |
| Series A, 5.375%, 9/1/2054 | | 500,000 | 505,765 |
| Virginia, Peninsula Town Center, Community Development Authority Revenue, Special Obligation: | | | |
| 144A, 5.0%, 9/1/2037 | | 100,000 | 109,883 |
| 144A, 5.0%, 9/1/2045 | | 400,000 | 438,312 |
| Virginia, Small Business Financing Authority, Private Activity Revenue, Transform 66 P3 Project, AMT, 5.0%, 12/31/2056 | | 865,000 | 1,038,003 |
| | | | 2,306,661 |
| Washington 5.9% | |
| Klickitat County, WA, Public Hospital District No. 2 Revenue, Skyline Hospital: | | | |
| 5.0%, 12/1/2037 | | 100,000 | 105,213 |
| 5.0%, 12/1/2046 | | 500,000 | 519,314 |
| Pierce County, WA, Bethel School District No. 403, 4.0%, 12/1/2037 | | 1,000,000 | 1,202,050 |
| Washington, Port of Seattle Revenue: | | | |
| Series A, AMT, 5.0%, 5/1/2043 | | 415,000 | 489,259 |
| AMT, 5.0%, 4/1/2044 | | 1,000,000 | 1,222,601 |
| Washington, State Convention Center Public Facilities District, 5.0%, 7/1/2043 | | 600,000 | 713,847 |
| Washington, State Higher Educational Facilities Authority, Seattle University Project: | | | |
| 4.0%, 5/1/2045 | | 610,000 | 700,643 |
| 4.0%, 5/1/2050 | | 1,180,000 | 1,347,676 |
| Washington, State Housing Finance Commission Municipal Certificates, “A” , Series A-1, 3.5%, 12/20/2035 | | 245,000 | 285,188 |
| Washington, State Housing Finance Commission, Non-Profit Housing Revenue, Rockwood Retirement Communities Project: | | | |
| Series A, 144A, 5.0%, 1/1/2051 | | 500,000 | 559,718 |
| Series A, 144A, 7.375%, 1/1/2044 | | 1,000,000 | 1,090,130 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | ���| 23 |
| | Principal
Amount ($) | Value ($) |
| Washington, State Housing Finance Commission, The Hearthstone Project: | | | |
| Series A, 144A, 5.0%, 7/1/2038 | | 50,000 | 54,154 |
| Series A, 144A, 5.0%, 7/1/2048 | | 115,000 | 122,997 |
| Series A, 144A, 5.0%, 7/1/2053 | | 75,000 | 80,035 |
| | | | 8,492,825 |
| West Virginia 0.7% | |
| West Virginia, State Hospital Finance Authority, State University Health System Obligated Group, Series A, 5.0%, 6/1/2047 | | 805,000 | 964,554 |
| Wisconsin 3.6% | |
| Wisconsin, Health Educational Facilities Authority, Covenant Communities, Inc. Project: | | | |
| Series A-1, 5.0%, 7/1/2043 | | 500,000 | 544,802 |
| Series B, 5.0%, 7/1/2048 | | 90,000 | 93,804 |
| Wisconsin, Public Finance Authority, Education Revenue, Mountain Island Charter School Ltd.: | | | |
| 5.0%, 7/1/2047 | | 200,000 | 213,630 |
| 5.0%, 7/1/2052 | | 90,000 | 95,949 |
| Wisconsin, Public Finance Authority, Hospital Revenue, Series A, 5.0%, 10/1/2044 | | 730,000 | 895,729 |
| Wisconsin, Public Finance Authority, Senior Living Community First Mortgage Revenue, Cedars Obligated Group: | | | |
| 144A, 5.5%, 5/1/2039 | | 520,000 | 533,380 |
| 144A, 5.75%, 5/1/2054 | | 515,000 | 526,456 |
| Wisconsin, Public Finance Authority, Senior Living Revenue, Mary’s Woods at Marylhurst Project, Series A, 144A, 5.25%, 5/15/2052 | | 1,000,000 | 1,098,281 |
| Wisconsin, Public Financing Authority, Retirement Facilities Revenue, Southminster, Inc.: | | | |
| 144A, 5.0%, 10/1/2043 | | 65,000 | 71,870 |
| 144A, 5.0%, 10/1/2053 | | 535,000 | 588,310 |
| Wisconsin, State Health & Educational Facilities Authority Revenue, Agnesian Healthcare, Inc., Series B, Prerefunded, 5.0%, 7/1/2036 | | 500,000 | 550,024 |
| | | | 5,212,235 |
| Guam 0.3% | |
| Guam, Government Waterworks Authority, Water & Wastewater System Revenue, Series A, 5.0%, 1/1/2050 | | 70,000 | 85,487 |
The accompanying notes are an integral part of the financial statements.
| 24 | | DWS Strategic Municipal Income Trust |
| | Principal
Amount ($) | Value ($) |
| Guam, International Airport Authority Revenue, Series C, AMT, 6.375%, 10/1/2043 | | 215,000 | 232,523 |
| Guam, Port Authority Revenue, Series A, 5.0%, 7/1/2048 | | 65,000 | 76,629 |
| | | | 394,639 |
| Puerto Rico 3.1% | |
| Puerto Rico, Sales Tax Financing Corp., Sales Tax Revenue: | | | |
| Series A-1, Zero Coupon, 7/1/2046 | | 3,226,000 | 1,050,289 |
| Series A-1, Zero Coupon, 7/1/2051 | | 2,670,000 | 631,410 |
| Series A-1, 4.75%, 7/1/2053 | | 2,500,000 | 2,810,410 |
| | | | 4,492,109 |
| Total Municipal Bonds and Notes (Cost $184,363,240) | 203,269,228 |
| Underlying Municipal Bonds of Inverse Floaters (e) 16.7% | |
| Florida 4.2% | |
| Orange County, FL, School Board, Certificate of Participations, Series C, 5.0%, 8/1/2034 (f) | | 5,000,000 | 5,998,237 |
| Trust: Orange County, FL, School Board, Series 2016-XM0183, 144A, 17.75%, 2/1/2024, Leverage Factor at purchase date: 4 to 1 | | | |
| New York 8.3% | |
| New York, State Urban Development Corp. Revenue, Personal Income Tax, Series C-3, 5.0%, 3/15/2040 (f) | | 5,000,000 | 6,118,914 |
| Trust: New York, State Urban Development Corp. Revenue, Personal Income Tax, Series 2018-XM0581, 144A, 18.305%, 9/15/2025, Leverage Factor at purchase date: 4 to 1 | | | |
| New York City, NY, Transitional Finance Authority, Building AID Revenue, Series S-1, 5.0%, 7/15/2037 (f) | | 5,000,000 | 5,919,832 |
| Trust: New York, Transitional Finance Authority Building AID Revenue, Series 2018-XM0619, 144A, 18.215%, 1/15/2024, Leverage Factor at purchase date: 4 to 1 | | | |
| | | | 12,038,746 |
| Washington 4.2% | |
| Washington, State General Obligation, Series D, 5.0%, 2/1/2035 (f) | | 5,000,000 | 6,116,385 |
| Trust: Washington, State General Obligation, Series 2017-XM0478, 144A, 17.87%, 8/1/2024, Leverage Factor at purchase date: 4 to 1 | | | |
| Total Underlying Municipal Bonds of Inverse Floaters (Cost $22,266,175) | 24,153,368 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 25 |
| | Shares | Value ($) |
| Open-End Investment Companies 0.1% | |
| BlackRock Liquidity Funds MuniCash Portfolio, Institutional Shares, 0.01% (g) (Cost $183,456) | | 183,266 | 183,303 |
| | | % of Net
Assets | Value ($) |
| Total Investment Portfolio (Cost $206,812,871) | 156.9 | 227,605,899 |
| Floating Rate Notes (e) | (10.3) | (15,000,000) |
| Series 2020-1 VMTPS, net of deferred offering costs | (48.1) | (69,800,678) |
| Other Assets and Liabilities, Net | 1.5 | 2,253,632 |
| Net Assets Applicable to Common Shareholders | 100.0 | 145,058,853 |
| * | Non-income producing security. |
| (a) | When-issued security. |
| (b) | Defaulted security or security for which income has been deemed uncollectible. |
| (c) | Variable or floating rate security. These securities are shown at their current rate as of May 31, 2021. 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. |
| (d) | Variable rate demand notes 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 at any time, and are shown at their current rates as of May 31, 2021. Date shown reflects the earlier of demand date or stated maturity date. |
| (e) | Securities represent the underlying municipal obligations of inverse floating rate obligations held by the Fund. The Floating Rate Notes represents leverage to the Fund and is the amount owed to the floating rate note holders. |
| (f) | Security forms part of the below inverse floater. The Fund accounts for these inverse floaters as a form of secured borrowing, by reflecting the value of the underlying bond in the investments of the Fund and the amount owed to the floating rate note holder as a liability. |
| (g) | 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. |
| AMBAC: Ambac Financial Group, Inc. |
| AMT: Subject to alternative minimum tax. |
| BAM: Build America Mutual |
| ETM: Bonds bearing the description ETM (escrow to maturity) are collateralized usually by U.S. Treasury securities which are held in escrow and used to pay principal and interest on bonds so designated. |
| GTY: Guaranty Agreement |
The accompanying notes are an integral part of the financial statements.
| 26 | | DWS Strategic Municipal Income Trust |
| INS: Insured |
| LOC: Letter of Credit |
| NATL: National Public Finance Guarantee Corp. |
| Prerefunded: Bonds which are prerefunded are collateralized usually by U.S. Treasury securities which are held in escrow and used to pay principal and interest on tax-exempt issues and to retire the bonds in full at the earliest refunding date. |
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 May 31, 2021 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.
| Assets | Level 1 | Level 2 | Level 3 | Total |
| Municipal Investments (a) | $ — | $227,422,596 | $— | $227,422,596 |
| Open-End Investment Companies | 183,303 | — | — | 183,303 |
| Total | $183,303 | $227,422,596 | $ — | $227,605,899 |
| (a) | See Investment Portfolio for additional detailed categorizations. |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 27 |
Statement of Assets and Liabilities
as of May 31, 2021 (Unaudited)
| Assets | |
| Investment in securities, at value (cost $206,812,871) | $ 227,605,899 |
| Receivable for investments sold | 15,000 |
| Interest receivable | 2,997,327 |
| Other assets | 1,557 |
| Total assets | 230,619,783 |
| Liabilities | |
| Payable for investments purchased — when-issued securities | 477,106 |
| Payable for floating rate notes issued | 15,000,000 |
| Interest expense payable on preferred shares | 90,520 |
| Accrued management fee | 107,162 |
| Accrued Trustees' fees | 3,116 |
| Other accrued expenses and payables | 82,348 |
| Series 2020-1 VMTPS, net of deferred offering costs (liquidation value $70,000,000, see page 38 for more details) | 69,800,678 |
| Total liabilities | 85,560,930 |
| Net assets applicable to common shareholders, at value | $ 145,058,853 |
| Net Assets Applicable to Common Shareholders Consist of | |
| Distributable earnings (loss) | 18,002,207 |
| Paid-in capital | 127,056,646 |
| Net assets applicable to common shareholders, at value | $ 145,058,853 |
| Net Asset Value | |
Net Asset Value per common share
($145,058,853 ÷ 11,203,941 outstanding shares of beneficial interest,
$.01 par value, unlimited number of common shares authorized) | $ 12.95 |
The accompanying notes are an integral part of the financial statements.
| 28 | | DWS Strategic Municipal Income Trust |
Statement of Operations
for the six months ended May 31, 2021 (Unaudited)
| Investment Income | |
| Income: | |
| Interest | $ 4,321,752 |
| Expenses: | |
| Management fee | 637,637 |
| Services to shareholders | 4,611 |
| Custodian fee | 2,489 |
| Professional fees | 51,378 |
| Reports to shareholders | 12,425 |
| Trustees' fees and expenses | 5,762 |
| Interest expense and amortization of deferred cost on Series 2020-1 VMTPS | 569,496 |
| Interest expense on floating rate notes | 55,454 |
| Stock Exchange listing fees | 11,843 |
| Other | 55,887 |
| Total expenses | 1,406,982 |
| Net investment income | 2,914,770 |
| Realized and Unrealized Gain (Loss) | |
| Net realized gain (loss) from investments | (2,113,346) |
| Change in net unrealized appreciation (depreciation) on investments | 6,524,533 |
| Net gain (loss) | 4,411,187 |
| Net increase (decrease) in net assets resulting from operations | $ 7,325,957 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 29 |
Statement of Cash Flows
for the six months ended May 31, 2021 (Unaudited)
Increase (Decrease) in Cash:
Cash Flows from Operating Activities | |
| Net increase (decrease) in net assets resulting from operations | $ 7,325,957 |
Adjustments to reconcile net increase (decrease) in net assets resulting
from operations to net cash provided by (used in) operating activities: | |
| Purchases of long-term investments | (25,033,688) |
| Net amortization of premium/(accretion of discount) | 516,810 |
| Proceeds from sales and maturities of long-term investments | 24,580,915 |
| Amortization of deferred offering cost on Series 2020-1 VMTPS | 37,475 |
| (Increase) decrease in interest receivable | 16,885 |
| (Increase) decrease in other assets | (1,515) |
| (Increase) decrease in receivable for investments sold | (10,000) |
| (Increase) decrease in receivable for investments sold - when issued securities | 112,444 |
| Increase (decrease) in payable for investments purchased - when issued securities | 366,090 |
| Increase (decrease) in other accrued expenses and payables | (148,167) |
| Change in unrealized (appreciation) depreciation on investments | (6,524,533) |
| Net realized (gain) loss from investments | 2,113,346 |
| Cash provided by (used in) operating activities | $ 3,352,019 |
| Cash Flows from Financing Activities | |
| (Increase) decrease in deferred offering cost on Series 2020-1 VMTPS | (39,284) |
| Distributions paid (net of reinvestment of distributions) | (3,316,567) |
| Cash provided by (used in) financing activities | (3,355,851) |
| Increase (decrease) in cash | (3,832) |
| Cash at beginning of period | 3,832 |
| Cash at end of period | $ — |
| Supplemental disclosure | |
| Interest expense paid on preferred shares | $ (494,127) |
| Interest expense paid and fees on floating rate notes issued | $ (55,454) |
The accompanying notes are an integral part of the financial statements.
| 30 | | DWS Strategic Municipal Income Trust |
Statements of Changes in Net Assets
| | Six Months
Ended
May 31, 2021 | Year Ended
November 30, |
| Increase (Decrease) in Net Assets | (Unaudited) | 2020 |
| Operations: | | |
| Net investment income | $ 2,914,770 | $ 5,855,339 |
| Net realized gain (loss) | (2,113,346) | (660,015) |
Change in net unrealized appreciation
(depreciation) | 6,524,533 | (493,224) |
| Net increase (decrease) in net assets applicable to common shareholders | 7,325,957 | 4,702,100 |
| Distributions to common shareholders | (3,354,461) | (5,819,333) |
| Increase (decrease) in net assets | 3,971,496 | (1,117,233) |
| Net assets at beginning of period applicable to common shareholders | 141,087,357 | 142,204,590 |
| Net assets at end of period applicable to common shareholders | $145,058,853 | $141,087,357 |
| Other Information: | | |
| Common shares outstanding at beginning of period | 11,203,941 | 11,203,941 |
| Common shares outstanding at end of period | 11,203,941 | 11,203,941 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 31 |
Financial Highlights
| | Six Months
Ended 5/31/21 | Years Ended November 30, |
| | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 |
| Selected Per Share Data Applicable to Common Shareholders |
| Net asset value, beginning of period | $12.59 | $12.69 | $11.76 | $12.39 | $12.15 | $12.90 |
| Income (loss) from investment operations: | | | | | | |
| Net investment incomea | .26 | .52 | .53 | .61 | .70 | .80 |
| Net realized and unrealized gain (loss) | .40 | (.10) | 1.00 | (.64) | .24 | (.76) |
| Total from investment operations | .66 | .42 | 1.53 | (.03) | .94 | .04 |
| Less distributions applicable to common shareholders from: | | | | | | |
| Net investment income | (.27) | (.50) | (.57) | (.60) | (.67) | (.79) |
| Net realized gains | (.03) | (.02) | (.03) | (.00)* | (.03) | — |
| Total distributions | (.30) | (.52) | (.60) | (.60) | (.70) | (.79) |
| Net asset value, end of period | $12.95 | $12.59 | $12.69 | $11.76 | $12.39 | $12.15 |
| Market price, end of period | $12.29 | $11.29 | $12.32 | $10.30 | $11.91 | $12.08 |
| Total Return | | | | | | |
Based on net asset
value (%)b | 5.49 ** | 3.98 c | 13.68 | .31 | 7.93 | (.07) |
| Based on market price (%)b | 11.64 ** | (3.95) c | 26.01 | (8.60) | 4.35 | (1.63) |
The accompanying notes are an integral part of the financial statements.
| 32 | | DWS Strategic Municipal Income Trust |
Financial Highlights (continued)
| | Six Months
Ended 5/31/21 | Years Ended November 30, |
| | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 |
| Ratios to Average Net Assets Applicable to Common Shareholders and Supplemental Data |
| Net assets, end of period ($ millions) | 145 | 141 | 142 | 132 | 139 | 136 |
Ratio of expenses before expense
reductions (%)
(including interest expense)d,e | 1.91 *** | 2.33 | 2.89 | 2.75 | 2.37 | 1.88 |
Ratio of expenses after expense
reductions (%)
(including interest expense)d,f | 1.91 *** | 2.23 | 2.89 | 2.75 | 2.37 | 1.88 |
Ratio of expenses after expense
reductions (%)
(excluding interest expense)g | 1.15 *** | 1.05 | 1.12 | 1.13 | 1.11 | 1.12 |
| Ratio of net investment income (%) | 4.15 *** | 4.25 | 4.26 | 5.05 | 5.63 | 6.09 |
| Portfolio turnover rate (%) | 11 ** | 35 | 28 | 39 | 27 | 37 |
| Senior Securities | | | | | | |
| Preferred Shares information at period end, aggregate amount outstanding: | | | | | | |
| Series 2018 MTPS ($ millions) | — | — | 70 | 70 | 70 | 70 |
| Series 2020-1 VMTPS ($ millions) | 70 | 70 | — | — | — | — |
Asset coverage per
share ($)h | 307,227 | 301,553 | 75,787 | 72,050 | 74,572 | 73,568 |
| Liquidation and market price per share ($) | 100,000 | 100,000 | 25,000 | 25,000 | 25,000 | 25,000 |
The accompanying notes are an integral part of the financial statements.
| DWS Strategic Municipal Income Trust | | 33 |
Financial Highlights (continued)
| a | Based on average common shares outstanding during the period. |
| b | Total return based on net asset value reflects changes in the Fund’s net asset value during each period. Total return based on market price reflects changes in market price. Each figure assumes that dividend and capital gain distributions, if any, were reinvested. These figures will differ depending upon the level of any discount from or premium to net asset value at which the Fund’s shares traded during the period. |
| c | Total return would have been lower had certain expenses not been reduced. |
| d | Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities and interest paid to shareholders of Series 2018 MTPS and Series 2020-1 VMTPS. |
| e | The ratio of expenses before expense reductions (based on net assets of common and Preferred Shares, including interest expense) was 1.28%, 1.54%, 1.92%, 1.81% 1.58% and 1.27% for the periods ended May 31, 2021, November 30, 2020, 2019, 2018, 2017 and 2016, respectively. |
| f | The ratio of expenses after expense reductions (based on net assets of common and Preferred Shares, including interest expense) was 1.28%, 1.48%, 1.92%, 1.81% 1.58% and 1.27% for the periods ended May 31, 2021, November 30, 2020, 2019, 2018, 2017 and 2016, respectively. |
| g | The ratio of expenses after expense reductions (based on net assets of common and Preferred Shares, excluding interest expense) was 0.77%, 0.70%, 0.74%, 0.74% 0.74% and 0.76% for the periods ended May 31, 2021, November 30, 2020, 2019, 2018, 2017 and 2016, respectively. |
| h | Asset coverage per share equals net assets of common shares plus the liquidation value of the Preferred Shares divided by the total number of Preferred Shares outstanding at the end of the period. |
| * | Amount is less than $.005. |
| ** | Not annualized |
| *** | Annualized |
The accompanying notes are an integral part of the financial statements.
| 34 | | DWS Strategic Municipal Income Trust |
| Notes to Financial Statements | (Unaudited) |
| A. | Organization and Significant Accounting Policies |
DWS Strategic Municipal Income Trust (the “Fund” ) is registered under the Investment Company Act of 1940, as amended (the “1940 Act” ), as a closed-end, diversified management investment company organized as a Massachusetts business trust.
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.
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 Fund’s Board, 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 one or more broker-dealers. These securities are generally categorized as Level 2.
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 Board and are generally categorized as Level 3. In accordance with the
| DWS Strategic Municipal Income Trust | | 35 |
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 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.
Inverse Floaters. The Fund invests in inverse floaters. Inverse floaters are debt instruments with a weekly floating rate of interest that bears an inverse relationship to changes in the short-term interest rate market. Inverse floaters are created by depositing a fixed-rate long-term municipal bond into a special purpose Tender Option Bond trust (the “TOB Trust” ). In turn the TOB Trust issues a short-term floating rate note and an inverse floater. The short-term floating rate note is issued in a face amount equal to some fraction of the underlying bond’s par amount and is sold to a third party, usually a tax-exempt money market fund. The Fund receives the proceeds from the sale of the short-term floating rate note and uses the cash proceeds to make additional investments. The short-term floating rate note represents leverage to the Fund. The Fund, as the holder of the inverse floater, has full exposure to any increase or decrease in the value of the underlying bond. The income stream from the underlying bond in the TOB Trust is divided between the floating rate note and the inverse floater. The inverse floater earns all of the interest from the underlying long-term fixed-rate bond less the amount of interest paid on the floating rate note and the expenses of the TOB Trust. The floating rate notes issued by the TOB Trust are valued at cost, which approximates fair value.
By holding the inverse floater, the Fund has the right to collapse the TOB Trust by causing the holders of the floating rate instrument to tender their notes at par and have the broker transfer the underlying bond to the Fund. The floating rate note holder can also elect to tender the note for redemption at par at each reset date. The Fund accounts for these transactions as a form of secured borrowing, by reflecting the value of the underlying bond in the investments of the Fund and the amount owed to the floating rate note holder as a liability under the caption “Payable for
| 36 | | DWS Strategic Municipal Income Trust |
floating rate notes issued” in the Statement of Assets and Liabilities. Income earned on the underlying bond is included in interest income, and interest paid on the floaters and the expenses of the TOB Trust are included in “Interest expense on floating rate notes” in the Statement of Operations. For the six months ended May 31, 2021, interest expense related to floaters amounted to $55,454. The weighted average outstanding daily balance of the floating rate notes issued during the six months ended May 31, 2021 was approximately $15,000,000, with a weighted average interest rate of 0.74%.
The Fund may enter into shortfall and forbearance agreements by which the Fund agrees to reimburse the TOB Trust, in certain circumstances, for the difference between the liquidation value of the underlying bond held by the TOB Trust and the liquidation value of the floating rate notes plus any shortfalls in interest cash flows. This could potentially expose the Fund to losses in excess of the value of the Fund’s inverse floater investments. In addition, the value of inverse floaters may decrease significantly when interest rates increase. The market for inverse floaters may be more volatile and less liquid than other municipal bonds of comparable maturity. The TOB Trust could be terminated outside of the Fund’s control, resulting in a reduction of leverage and disposal of portfolio investments at inopportune times and prices. Investments in inverse floaters generally involve greater risk than in an investment in fixed-rate bonds.
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 November 30, 2020, the Fund had net tax basis capital loss carryforwards of approximately $882,000, including short-term losses ($604,000) and long-term losses ($278,000), which may be applied against realized net taxable capital gains indefinitely.
At May 31, 2021, the aggregate cost of investments for federal income tax purposes was $192,034,763. The net unrealized appreciation for all investments based on tax cost was $20,571,136. This consisted of aggregate gross unrealized appreciation for all investments for which there was an excess of value over tax cost of $21,405,282 and aggregate gross unrealized depreciation for all investments for which there was an excess of tax cost over value of $834,146.
The Fund has reviewed the tax positions for the open tax years as of November 30, 2020 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.
| DWS Strategic Municipal Income Trust | | 37 |
Distribution of Income and Gains. Distributions from net investment income of the Fund are declared 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.
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 certain securities sold at a loss, reclassification of distributions and accretion of market discount 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.
The tax character of current year distributions will be determined at the end of the current fiscal year.
Preferred Shares. On May 31, 2021, the Fund had issued and outstanding 700 Variable Rate MuniFund Term Preferred Shares, Series 2020-1 (“Series 2020-1 VMTPS” ) with an aggregate liquidation preference of $70,000,000 ($100,000 per share). The Series 2020-1 VMTPS were issued on November 10, 2020 in a private offering and are variable rate preferred shares with a stated maturity of November 10, 2049 and an early termination date six months following a rate period termination date (the “Rate Period Termination Date” ), which Rate Period Termination Date initially will be 36 months from the date of original issuance. Subject to an election by the holder(s) of the Series 2020-1 VMTPS to retain the Series 2020-1 VMTPS, the Series 2020-1 VMTPS are subject to mandatory tender beginning twenty business days prior to the early termination date, during which time such shares may be remarketed. At its option, the Fund may redeem in whole or in part the Series 2020-1 VMTPS from time to time at a redemption price equal to the liquidation preference of the Series 2020-1 VMTPS to be redeemed and all accumulated but unpaid dividends thereon to, but excluding, the redemption date, plus a redemption premium if such redemption occurs prior to November 10, 2022. The dividend rate for Series 2020-1 VMTPS is set weekly at a spread (dependent on the then current ratings of the Series 2020-1 VMTPS) over the Securities Industry and Financial Markets Association (“SIFMA” ) Municipal Swap Index. The average annualized dividend rate on the Series 2020-1 VMTPS for the period December 1, 2020 through May 31, 2021 was 1.37%. In the Fund’s Statement of Assets and Liabilities, the Series 2020-1 VMTPS’ aggregate liquidation preference is shown as a
| 38 | | DWS Strategic Municipal Income Trust |
liability since the Series 2020-1 VMTPS have a stated mandatory redemption date. Dividends paid on the Series 2020-1 VMTPS are treated as interest expense and recorded as incurred. For the period December 1, 2020 through May 31, 2021, interest expense related to Series 2020-1 VMTPS amounted to $532,021. Costs directly related to the issuance of Series 2020-1 VMTPS have been deferred and are being amortized over 36 months based on the initial Rate Period Termination Date. For the period from December 1, 2020 through May 31, 2021, the Fund amortized $37,475 of Series 2020-1 VMTPS deferred costs, which are included in the Statement of Operations under the line item “Interest expense and amortization of deferred cost on Series 2020-1 VMTPS” . The Series 2020-1 VMTPS are senior in priority to the Fund’s outstanding common shares as to payments of dividends and distributions upon liquidation.
Prior to November 10, 2020, the Fund had issued and outstanding 2,800 shares of Floating Rate Municipal Term Preferred Shares ("Series 2018 MTPS") with an aggregate liquidation preference of $70,000,000 ($25,000 per share). The Series 2018 MTPS were floating rate preferred shares with a mandatory term redemption date, as amended, of June 1, 2021. The Fund used the proceeds from the sale of its Series 2020-1 VMTPS to fund the redemption on November 10, 2020 of all of its outstanding Series 2018 MTPS.
As a result of the Series 2020-1 VMTPS issuance and the redemption of the outstanding Series 2018 MTPS the Fund’s leverage attributable to preferred shares remains unchanged.
Under the terms of a purchase agreement between the Fund and the initial purchaser of the Series 2020-1 VMTPS, the Fund is subject to various investment restrictions, coverage ratios and covenants. These restrictions are, in certain respects, more restrictive than those to which the Fund is otherwise subject in accordance with its investment objective and policies. Such restrictions may limit the investment flexibility that might otherwise be pursued by the Fund if the Series 2020-1 VMTPS were not outstanding. In addition, the Fund is subject to certain restrictions on its investments imposed by guidelines of the rating agency that rates the Series 2020-1 VMTPS, which guidelines may be changed by the rating agency, in its sole discretion, from time to time. These guidelines may be more stringent than requirements imposed on the Fund by the 1940 Act or its policies. Moreover, the Fund is required to maintain various asset coverage ratios with respect to the Series 2020-1 VMTPS in accordance with the Fund’s charter documents and the 1940 Act.
The 1940 Act requires that the preferred shareholders of the Fund, voting as a separate class, have the right to: a) elect at least two trustees at all times, and b) elect a majority of the trustees at any time when dividends on the preferred shares are unpaid for two full years. Unless otherwise
| DWS Strategic Municipal Income Trust | | 39 |
required by law or under the terms of the preferred shares, each preferred share is entitled to one vote and preferred shareholders will vote together with common shareholders as a single class.
Leverage involves risks and special considerations for the Fund’s common shareholders, including the likelihood of greater volatility of net asset value and market price of, and dividends on, the Fund’s common shares than a comparable portfolio without leverage; the risk that fluctuations in the Fund’s preferred stock dividend rates or interest rates will reduce the return to common shareholders; and the effect of leverage in a declining market, which is likely to cause a greater decline in the net asset value of the Fund’s common shares than if the Fund were not leveraged, which may result in a greater decline in the market price of the Fund’s common shares. Changes in the value of the Fund’s portfolio will be borne entirely by the common shareholders. If there is a net decrease (or increase) in the value of the Fund’s investment portfolio, leverage will decrease (or increase) the net asset value per share to a greater extent than if leverage were not used. It is also possible that the Fund will be required to sell assets at a time when it would otherwise not do so, possibly at a loss, in order to redeem preferred shares to comply with asset coverage or other restrictions imposed under the terms of the preferred shares. There is no assurance that the Fund’s leveraging strategy will be successful.
Statement of Cash Flows. Information on financial transactions which have been settled through the receipt and disbursement of cash is presented in the Statement of Cash Flows. The cash amount shown in the Statement of Cash Flows represents the cash position at the Fund’s custodian bank at May 31, 2021.
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 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 financial reporting purposes, with the exception of securities in default of principal.
| B. | Purchases and Sales of Securities |
During the six months ended May 31, 2021, purchases and sales of investment securities (excluding short-term investments) aggregated $25,033,688 and $24,580,915, respectively.
| 40 | | DWS Strategic Municipal Income Trust |
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. In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Investment Management Agreement. The management fee payable under the Investment Management Agreement is equal to an annual rate of 0.60% of the Fund’s average weekly net assets, computed and accrued daily and payable monthly. Average weekly net assets, for purposes of determining the management fee, means the average weekly value of the total assets of the Fund, minus the sum of accrued liabilities of the Fund (other than the liquidation value of the Series 2020-1 VMTPS).
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 fee it receives from the Fund. For the six months ended May 31, 2021, amount charged to the Fund by DSC aggregated $2,669, of which $958 is unpaid.
Other Service Fees. Under an agreement with the Fund, DIMA is compensated for providing regulatory filing services to the Fund. For the six months ended May 31, 2021, the amount charged to the Fund by DIMA included in the Statement of Operations under “Reports to shareholders” aggregated $790, of which $220 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 six months ended May 31, 2021, the Fund engaged in securities purchases of $7,350,000 and securities sales of $8,385,000 with a net gain (loss) on securities sales of $0, with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act.
| DWS Strategic Municipal Income Trust | | 41 |
| D. | Concentration of Ownership |
From time to time, the Fund may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund. At May 31, 2021, there was one shareholder account that held approximately 14% of the outstanding shares of the Fund.
The Board has authorized the Fund to effect periodic repurchases of its outstanding shares in the open market from time to time when the Fund’s shares trade at a discount to their net asset value. During the six months ended May 31, 2021 and the year ended November 30, 2020, the Fund did not repurchase shares in the open market.
On September 25, 2020, the Fund announced that the Fund’s Board of Trustees had extended the Fund’s existing open market share repurchase program for an additional 12-month period. The Fund may continue to purchase outstanding shares of common stock in open-market transactions over the period from December 1, 2020 until November 30, 2021, when the Fund’s shares trade at a discount to net asset value. The Board’s authorization of the repurchase program extension follows the previous repurchase program, which commenced on December 1, 2019 and ran until November 30, 2020.
| 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 low vaccination rates 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.
| 42 | | DWS Strategic Municipal Income Trust |
Dividend Reinvestment and Cash Purchase Plan
The Board of Trustees of the Fund has established a Dividend Reinvestment and Cash Purchase Plan (the “Plan” ) for shareholders that elect to have all dividends and distributions automatically reinvested in shares of the Fund (each a “Participant” ). DST Systems, Inc. (the “Plan Agent” ) has been appointed by the Fund’s Board of Trustees to act as agent for each Participant.
A summary of the Plan is set forth below. Shareholders may obtain a copy of the entire Dividend Reinvestment and Cash Purchase Plan by visiting the Fund’s Web site at dws.com or by calling (800) 294-4366.
If you wish to participate in the Plan and your shares are held in your own name, contact DWS Service Company (the “Transfer Agent” ) at P.O. Box 219066, Kansas City, Missouri 64121-9066 or (800) 294-4366 for the appropriate form. Current shareholders may join the Plan by either enrolling their shares with the Transfer Agent or making an initial cash deposit of at least $250 with the Transfer Agent. First-time investors in the Fund may join the Plan by making an initial cash deposit of at least $250 with the Transfer Agent. Initial cash deposits will be invested within approximately 30 days. If your shares are held in the name of a broker or other nominee, you should contact the broker or nominee in whose name your shares are held to determine whether and how you may participate in the Plan.
The Transfer Agent will establish a Dividend Investment Account (the “Account” ) for each Participant in the Plan. The Transfer Agent will credit to the Account of each Participant any cash dividends and capital gains distributions (collectively, “Distributions” ) paid on shares of the Fund (the “Shares” ) and any voluntary cash contributions made pursuant to the Plan. Shares in a Participant’s Account are transferable upon proper written instructions to the Transfer Agent.
If, on the valuation date for a Distribution, Shares are trading at a discount from net asset value per Share, the Plan Agent shall apply the amount of such Distribution payable to a Participant (less a Participant’s pro rata share of brokerage commissions incurred with respect to open-market purchases in connection with the reinvestment of such Distribution) to the purchase on the open market of Shares for a Participant’s Account. If, on the valuation date for a Distribution, Shares are trading at a premium over net asset value per Share, the Fund will issue on the payment date, Shares valued at net asset value per Share on the valuation date to the Transfer Agent in the aggregate amount of the funds credited to a Participant’s Account. The Fund will increase the price at which Shares may be issued under the Plan to 95% of the fair market value of the
| DWS Strategic Municipal Income Trust | | 43 |
Shares on the valuation date if the net asset value per Share of the Shares on the valuation date is less than 95% of the fair market value of the Shares on the valuation date. The valuation date will be the payment date for Distributions. Open-market purchases will be made on or shortly after the valuation date for Distributions, and in no event more than 30 days after such date except where temporary curtailment or suspension of purchase is necessary to comply with applicable provisions of federal securities law.
A Participant may from time to time make voluntary cash contributions to his or her Account in a minimum amount of $100 in any month (with a $36,000 annual limit) for the purchase on the open market of Shares for the Participant’s Account. Such voluntary contributions will be invested by the Plan Agent on or shortly after the 15th of each month and in no event more than 30 days after such dates, except where temporary curtailment or suspension of purchase is necessary to comply with applicable provisions of federal securities law. Voluntary cash contributions received from a Participant on or prior to the fifth day preceding the 15th of each month will be applied by the Plan Agent to the purchase of additional Shares as of that investment date. No interest will be paid on voluntary cash contributions held until investment. Consequently, Participants are strongly urged to ensure that their payments are received by the Transfer Agent on or prior to the fifth day preceding the 15th of any month. Voluntary cash contributions should be made in U.S. dollars and be sent by first-class mail, postage prepaid only to the following address (deliveries to any other address do not constitute valid delivery):
DWS Strategic Municipal Income Trust
Dividend Reinvestment and Cash Purchase Plan
c/o DWS Service Company
P.O. Box 219066
Kansas City, MO 64121-9066
(800) 294-4366
Participants may withdraw their entire voluntary cash contribution by written notice received by the Transfer Agent not less than 48 hours before such payment is to be invested.
The cost of Shares acquired for each Participant’s Account in connection with the Plan shall be determined by the average cost per Share, including brokerage commissions, of the Shares acquired. There will be no brokerage charges with respect to Shares issued directly by the Fund as a result of Distributions. However, each Participant will pay a pro rata share of brokerage commissions incurred with respect to open market purchases.
The reinvestment of Distributions does not relieve the Participant of any tax that many be payable on the Distributions. The Transfer Agent will
| 44 | | DWS Strategic Municipal Income Trust |
report to each Participant the taxable amount of Distributions credited to his or her Account. Participants will be treated for federal income tax purposes as receiving the amount of the Distributions made by the Fund, which amount generally will be either equal to the amount of the cash distribution the Participant would have received if the Participant had elected to receive cash or, for Shares issued by the Fund, the fair market value of the Shares issued to the Participant.
The Fund may amend the Plan at any time or times but, only by mailing to each Participant appropriate written notice at least 90 days prior to the effective date thereof except when necessary or appropriate to comply with applicable law or the rules or policies of the Securities and Exchange Commission or any other regulatory authority in which case such amendment shall be effective as soon as practicable. The Plan also may be terminated by the Fund.
Shareholders may withdraw from the Plan at any time by giving the Transfer Agent a written notice. A notice of withdrawal will be effective immediately following receipt of the notice by the Transfer Agent provided the notice is received by the Transfer Agent at least ten calendar days prior to the record date for the Distribution; otherwise such withdrawal will be effective after the investment of the current Distribution. When a Participant withdraws from the Plan, or when the Plan is terminated by the Fund, the Participant will receive a certificate for full Shares in the Account, plus a check for any fractional Shares based on market price; or, if a Participant so desires, the Transfer Agent will notify the Plan Agent to sell his or her Shares in the Plan and send the proceeds to the Participant, less brokerage commissions.
All correspondence and inquiries concerning the Plan, and requests for additional information about the Plan, should be directed to DWS Service Company at P.O. Box 219066, Kansas City, Missouri 64121-9066 or (800) 294-4366.
| DWS Strategic Municipal Income Trust | | 45 |
Additional Information
Automated
Information Line | DWS Closed-End Fund Info Line
(800) 349-4281 |
| Web Site | dws.com
Obtain fact sheets, financial reports, press releases and webcasts when available. |
| Written Correspondence | DWSAttn: Secretary of the DWS Funds
100 Summer Street
Boston, MA 02110 |
| Legal Counsel | Vedder Price P.C.
222 North LaSalle Street
Chicago, IL 60601 |
Dividend Reinvestment
Plan Agent | DST Systems, Inc.
333 W. 11th Street, 5th Floor
Kansas City, MO 64105 |
Shareholder
Service Agent and
Transfer Agent | DWS Service Company
P.O. Box 219066
Kansas City, MO 64121-9066
(800) 294-4366 |
| Custodian | State Street Bank and Trust Company
State Street Financial Center
One Lincoln Street
Boston, MA 02111 |
Independent
Registered Public
Accounting Firm | Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116 |
| Proxy Voting | 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. |
| Portfolio Holdings | 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. |
| 46 | | DWS Strategic Municipal Income Trust |
| Investment Management | 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. |
| NYSE Symbol | KSM |
| CUSIP Number | Common Shares 23342Q 101 |
| DWS Strategic Municipal Income Trust | | 47 |
Privacy Statement
| FACTS | What Does DWS Do With Your Personal Information? |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share and protect your personal information. Please read this notice carefully to understand what we do. |
| What? | The types of personal information we collect and share can include:
— Social Security number
— Account balances
— Purchase and transaction history
— Bank account information
— Contact information such as mailing address, e-mail address and telephone number |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information, the reasons DWS chooses to share and whether you can limit this sharing. |
| Reasons we can share your personal information | Does DWS share? | Can you limit
this sharing? |
| For our everyday business purposes —such as to process your transactions, maintain your account(s), respond to court orders or legal investigations | Yes | No |
| For our marketing purposes — to offer our products and services to you | Yes | No |
| For joint marketing with other financial companies | No | We do not share |
| For our affiliates’ everyday business purposes — information about your transactions and experiences | No | We do not share |
| For our affiliates’ everyday business purposes — information about your creditworthiness | No | We do not share |
| For non-affiliates to market to you | No | We do not share |
| Questions? | Call (800) 728-3337 or e-mail us at service@dws.com |
| 48 | | DWS Strategic Municipal Income Trust |
| Who we are |
| Who is providing this notice? | DWS Distributors, Inc; DWS Investment Management Americas,
Inc.; DWS Trust Company; the DWS Funds |
| What we do |
| How does DWS protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards, secured files, and secured buildings. |
| How does DWS collect my personal information? | We collect your personal information, for example, when you:
— open an account
— give us your contact information
— provide bank account information for ACH or wire transactions
— tell us where to send money
— seek advice about your investments |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only
— sharing for affiliates’ everyday business purposes
— information about your creditworthiness
— affiliates from using your information to market to you
— sharing for non-affiliates to market to you
State laws and individual companies may give you additional rights to limit sharing. |
| Definitions |
| Affiliates | Companies related by common ownership or control. They can be
financial or non-financial companies. Our affiliates include financial
companies with the DWS or Deutsche Bank (“DB” ) name, such as
DB AG Frankfurt. |
| Non-affiliates | Companies not related by common ownership or control. They can
be financial and non-financial companies.
Non-affiliates we share with include account service providers,
service quality monitoring services, mailing service providers and
verification services to help in the fight against money laundering
and fraud. |
| Joint marketing | A formal agreement between non-affiliated financial companies that
together market financial products or services to you. DWS does not
jointly market. |
California residents may go to https://fundsus.dws.com/us/en-us/legal-resources/privacy-policy.html to obtain additional information relating to their rights under California state law.
Rev. 12/2020
| DWS Strategic Municipal Income Trust | | 49 |
222 South Riverside Plaza
Chicago, IL 60606-5808
DSMIT-3
(R-027926-10 7/21)
| | |
| | (b) Not applicable |
| | |
| ITEM 2. | CODE OF ETHICS |
| | |
| | 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 |
| | |
| 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 |
| | |
Portfolio Manager Team Disclosure:
As of the date of this report the Fund is managed by a Team of investment professionals who collaborate to develop and implement the Fund’s investment strategy. Each Portfolio Manager on the Team has authority over all aspects of the Fund's investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment, and the management of daily cash flows in accordance with portfolio holdings.
The following individuals handle the day-to-day management of the Fund.
Ashton P. Goodfield*, CFA, Head of Investment Strategy Fixed Income and Portfolio Manager of the Fund.
- Joined DWS in 1986 and the Fund in 2014.
- Head of Municipal Bonds.
- BA, Duke University.
Chad Farrington, CFA, Senior Portfolio Manager Fixed Income and Portfolio Manager of the Fund.
- Joined DWS and the Fund in 2018 with 20 years of industry experience; previously, worked as Portfolio Manager, Head of Municipal Research & Senior Credit Analyst at Columbia Threadneedle.
- Effective October 1, 2021, Co-Head of Municipal Bond Department.
- BS, Montana State University.
Michael J. Generazo, Senior Portfolio Manager Fixed Income and Portfolio Manager of the Fund.
- Joined DWS in 1999 and the Fund in 2010.
- BS, Bryant College; MBA, Suffolk University
Peter Aloisi**, CFA, Portfolio Manager Fixed Income and Portfolio Manager of the Fund.
- Joined DWS in 2010 with 5 years industry experience; previously, served as an Associate at Banc of America Securities. Joined the Fund in 2021.
- BA and MBA, Boston College.
*Ashton P. Goodfield will leave the portfolio management team effective October 1, 2021.
** Peter Aloisi will join the portfolio management team effective October 1, 2021.
Compensation of Portfolio Managers
The Advisor and its affiliates are part of DWS. The brand DWS represents DWS Group GmbH & KGaA (“DWS Group”) and any of its subsidiaries such as DWS Investment Management Americas, Inc. and RREEF America L.L.C. which offer advisory services. DWS seeks to offer its investment professionals competitive short-term and long-term compensation based on continuous, above average, fund performance relative to the market. This includes measurement of short and long-term performance against industry and portfolio benchmarks. As employees of DWS, portfolio managers are paid on a total compensation basis, which includes Fixed Pay (base salary) and Variable Compensation, as set forth below. The compensation information below is provided as of the Fund’s most recent semiannual report dated May 31, 2021.
| · | Fixed Pay (FP) is the key and primary element of compensation for the majority of DWS employees and reflects the value of the individual’s role and function within the organization. It rewards factors that an employee brings to the organization such as skills and experience, while reflecting regional and divisional (i.e. DWS) specifics. FP levels play a significant role in ensuring competitiveness of the Advisor and its affiliates in the labor market, thus benchmarking provides a valuable input when determining FP levels. |
| · | Variable Compensation (VC) is a discretionary compensation element that enables the Advisor and its affiliates to provide additional reward to employees for their performance and behaviors, while reflecting DWS affordability and the financial situation of Deutsche Bank AG (the “Bank”) and DWS. VC aims to: |
| o | Recognize that every employee contributes to the DWS Group’s success through the DWS Group and/or Bank component of VC (Group Component), |
| o | Reflect individual performance, investment performance, behaviours and culture through discretionary individual VC (Individual Component), and |
| o | Reward outstanding contributions at the junior levels through the discretionary Recognition Award. |
Employee seniority as well as divisional and regional specifics determine which VC elements are applicable for a given employee and the conditions under which they apply. Both Group and Individual Components may be awarded in shares or other share-based instruments and other deferral arrangements.
| · | VC can be delivered via cash, restricted equity awards, and/or restricted incentive awards or restricted compensation. Restricted compensation may include: |
| o | notional fund investments |
| o | restricted equity, notional equity, |
| o | or such other form as DWS may decide in its sole discretion |
| · | VC comprises a greater proportion of total compensation as an employee’s seniority and total compensation level increase. Proportion of VC delivered via a long-term incentive award, which is subject to performance conditions and forfeiture provisions, will increase significantly as the amount of the VC increases. |
| · | Additional forfeiture and claw back provisions, including complete forfeiture and claw back of VC may apply in certain events if an employee is an InstVV [CRD IV EU Directive4] Material Risk Taker. |
| · | For key investment professionals, in particular, a portion of any long-term incentives will be in the form of notional investments aligned, where possible, to the funds they manage. |
In general, each of the Advisor and its advisory affiliates seek to offer their investment professionals competitive short-term and long-term compensation based on continuous, above average, fund performance relative to the market. This includes measurement of short and long-term performance against industry and portfolio benchmarks. To evaluate their investment professionals in light of and consistent with the compensation principles set forth above, the Advisor and its affiliates review investment performance for all accounts managed in relation to the appropriate Morningstar peer group universe with respect to a fund, iMoneyNet peer group with respect to a money market fund or relevant benchmark index(es) set forth in the governing documents with respect to each other account type. The ultimate goal of this process is to evaluate the degree to which investment professionals deliver investment performance that meets or exceeds their clients’ risk and return objectives. When determining total compensation, the Advisor and its affiliates consider a number of quantitative, qualitative and other factors:
| - | Quantitative measures (e.g. one-, three- and five-year pre-tax returns versus the appropriate Morningstar peer group universe for a fund, or versus the appropriate iMoneyNet peer group for a money market fund or relevant benchmark index(es) set forth in the governing documents with respect to each other account type, taking risk targets into account) are utilized to measure performance. |
| - | Qualitative measures (e.g. adherence to, as well as contributions to, the enhancement of the investment process) are included in the performance review. |
| - | Other factors (e.g. non-investment related performance, teamwork, adherence to compliance rules, risk management and "living the values" of the Advisor and its affiliates) are included as part of a discretionary component of the review process, giving management the ability to consider additional markers of performance on a subjective basis. |
| - | Furthermore, it is important to note that DWS Group functions within a controlled environment based upon the risk limits established by DWS Group’s Risk division, in conjunction with DWS Group management. Because risk consideration is inherent in all business activities, performance assessment factors in an employee’s ability to assess and manage risk. |
Fund Ownership of Portfolio Managers
The following table shows the dollar range of Fund shares owned beneficially and of record by each member of the Fund’s portfolio management team as well as in all US registered DWS Funds advised by DWS Investment Management Americas, Inc.
(Advisor) as a group, including investments by their immediate family members sharing the same household and amounts invested through retirement and deferred compensation plans. This information is provided as of the Fund’s most recent semiannual report dated May 31, 2021.
Name of
Portfolio Manager | Dollar Range of Fund Shares Owned | Dollar Range of All DWS Fund Shares Owned |
| Ashton P. Goodfield | - | Over $1,000,000 |
| Chad Farrington | - | $100,001-$500,000 |
| Michael J. Generazo | - | $10,001-$50,000 |
| Peter Aloisi | - | $50,001-$100,000 |
Conflicts of Interest
In addition to managing the assets of the Fund, the Fund’s portfolio managers may have responsibility for managing other client accounts of the Advisor or its affiliates. The tables below show, for each portfolio manager, the number and asset size of (1) SEC registered investment companies (or series thereof) other than the Fund, (2) pooled investment vehicles that are not registered investment companies and (3) other accounts (e.g., accounts managed for individuals or organizations) managed by each portfolio manager. Total assets attributed to each portfolio manager in the tables below include total assets of each account managed by them, although the manager may only manage a portion of such account’s assets. For Funds subadvised by subadvisors unaffiliated with the Advisor, total assets of Funds managed may only include assets allocated to the portfolio manager and not the total assets of each Fund managed. The tables also show the number of performance-based fee accounts, as well as the total assets of the accounts for which the advisory fee is based on the performance of the account. This information is provided as of the Fund’s most recent semiannual report dated May 31, 2021.
Other SEC Registered Investment Companies Managed:
| Name of Portfolio Manager | Number of Registered Investment Companies | Total Assets of Registered Investment Companies | Number of Investment Company Accounts with Performance Based Fee | Total Assets of Performance- Based Fee Accounts |
| Ashton P. Goodfield | 8 | $7,905,567,640 | - | - |
| Chad Farrington | 2 | $4,810,412,683 | - | - |
| Michael J. Generazo | 5 | $6,345,449,750 | - | - |
| Peter Aloisi | 4 | $2,067,200,576 | - | - |
Other Pooled Investment Vehicles Managed:
| Name of Portfolio Manager | Number of Pooled Investment Vehicles | Total Assets of Pooled Investment Vehicles | Number of Pooled Investment Vehicle Accounts with Performance-Based Fee | Total Assets of Performance- Based Fee Accounts |
| Ashton P. Goodfield | - | - | - | - |
| Michael J. Generazo | - | - | - | - |
| Michael J. Generazo | - | - | - | - |
| Peter Aloisi | - | - | - | - |
Other Accounts Managed:
| Name of Portfolio Manager | Number of Other Accounts | Total Assets of Other Accounts | Number of Other Accounts with Performance- Based Fee | Total Assets of Performance- Based Fee Accounts |
| Ashton P. Goodfield | - | - | - | - |
| Chad Farrington | - | - | - | - |
| Michael J. Generazo | 3 | $33,194,527 | - | - |
| Peter Aloisi | 6 | $114,235,416 | - | - |
In addition to the accounts above, an investment professional may manage accounts in a personal capacity that may include holdings that are similar to, or the same as, those of the Funds. The Advisor or Subadvisor, as applicable, has in place a Code of Ethics that is designed to address conflicts of interest and that, among other things, imposes restrictions on the ability of portfolio managers and other “access persons” to invest in securities that may be recommended or traded in the Funds and other client accounts.
Real, potential or apparent conflicts of interest may arise when a portfolio manager has day-to-day portfolio management responsibilities with respect to more than one fund or account, including the following:
| · | Certain investments may be appropriate for the Fund and also for other clients advised by the Advisor and their affiliates, including other client accounts managed by the Fund’s portfolio management team. Investment decisions for the Fund and other clients are made with a view to achieving their respective investment objectives and after consideration of such factors as their current holdings, availability of cash for investment and the size of their investments generally. A particular security may be bought or sold for only one client or in different amounts and at different times for more than one but less than all clients. Likewise, because clients of the Advisor and their affiliates may have differing investment strategies, a particular security may be bought for one or more clients when one or more other clients are selling the security. The investment results achieved for the Fund may differ from the results achieved for other clients of the Advisor and their affiliates. In addition, purchases or sales of the same security may be made for two or more clients on the same day. In such event, such transactions will be allocated among the clients in a manner believed by the Advisor and their affiliates to be most equitable to each client, generally utilizing a pro rata allocation methodology. In some cases, the allocation procedure could potentially have an adverse effect or positive effect on the price or amount of the securities purchased or sold by the Fund. Purchase and sale orders for the Fund may be combined with those of other clients of the Advisor and their affiliates in the interest of achieving the most favorable net results to the Fund and the other clients. |
| · | To the extent that a portfolio manager has responsibilities for managing multiple client accounts, a portfolio manager will need to divide time and attention among relevant accounts. The Advisor and their affilates attempt to minimize these conflicts by aligning its portfolio management teams by investment strategy and by employing similar investment models across multiple client accounts. |
| · | In some cases, an apparent conflict may arise where the Advisor has an incentive, such as a performance-based fee, in managing one account and not with respect to other accounts it manages. The Advisor and their affiliates will not determine allocations based on whether it receives a performance-based fee from the client. Additionally, the Advisor has in place supervisory oversight processes to periodically monitor performance deviations for accounts with like strategies. |
| · | The Advisor and its affiliates and the investment team of each Fund may manage other mutual funds and separate accounts on a long only or a long-short basis. The simultaneous management of long and short portfolios creates potential conflicts of interest including the risk that short sale activity could adversely affect the market value of the long positions (and vice versa), the risk arising from sequential orders in long and short positions, and the risks associated with receiving opposing orders at the same time. The Advisor has adopted procedures that it believes are reasonably designed to mitigate these and other potential conflicts of interest. Included in these procedures are specific guidelines developed to provide fair and equitable treatment for all clients whose accounts are managed by each Fund’s portfolio management team. The Advisor and the portfolio management team have established monitoring procedures, a protocol for supervisory reviews, as well as compliance oversight to ensure that potential conflicts of interest relating to this type of activity are properly addressed. |
The Advisor is owned by the DWS Group, a multinational global financial services firm that is a majority owned subsidiary of Deutsche Bank AG. Therefore, the Advisor is affiliated with a variety of entities that provide, and/or engage in commercial banking, insurance, brokerage, investment banking, financial advisory, broker-dealer activities (including sales and trading), hedge funds, real estate and private equity investing, in addition to the provision of investment management services to institutional and individual investors. Since Deutsche Bank AG, its affiliates, directors, officers and employees (the “Firm”) are engaged in businesses and have interests in addition to managing asset management accounts, such wide ranging activities involve real, potential or apparent conflicts of interest. These interests and activities include potential advisory, transactional and financial activities and other interests in securities and companies that may be directly or indirectly purchased or sold by the Firm for its clients’ advisory accounts. The Advisor and their affiliates may take investment positions in securities in which other clients or related persons within the Firm have different investment positions. There may be instances in which the Advisor is purchasing or selling for their client accounts, or pursuing an outcome in the context of a workout or restructuring with respect to, securities in which the Firm is undertaking the same or differing strategy in other businesses or other client accounts. These are considerations of which advisory clients should be aware and which will cause conflicts that could be to the disadvantage of the Advisor’s advisory clients, including the Fund. The Advisor and their affiliates have instituted business and compliance policies, procedures and disclosures that are designed to identify, monitor and mitigate conflicts of interest and, as appropriate, to report them to a Fund’s Board.
| | |
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS |
| | |
| | (a) | (b) | (c) | (d) |
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
| | | | | |
| December 1 through December 31 | - | n/a | n/a | n/a |
| January 1 through January 31 | - | n/a | n/a | n/a |
| February 1 through February 29 | - | n/a | n/a | n/a |
| March 1 through March 31 | - | n/a | n/a | n/a |
| April 1 through April 30 | - | n/a | n/a | n/a |
| May 1 through May 31 | - | n/a | n/a | n/a |
| | | | | |
| Total | - | n/a | n/a | n/a |
| | | | | |
| The Fund may from time to time repurchase shares in the open market. |
| | | | | |
| On September 25, 2020, the Fund announced that the Fund's Board of Trustees extended the Fund's existing open market share repurchase program for an additional 12 month period. The Fund may continue to purchase outstanding shares of common stock in open-market transactions over the period December 1, 2020 until November 30, 2021, when the Fund's shares trade at a discount to net asset value. The Board's authorization of the repurchase program extension follows the previous repurchase program, which commenced on December 1, 2019 and ran until November 30, 2020. |
| | |
| 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. |
| | |
| 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 second fiscal quarter of 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. |
| | |
| ITEM 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
| | |
| | Not applicable |
| | |
| ITEM 13. | EXHIBITS |
| | |
| | (a)(1) | Not applicable |
| | |
| | (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 Strategic Municipal Income Trust |
| | |
| | |
| By: | /s/Hepsen Uzcan Hepsen Uzcan President |
| | |
| Date: | 7/30/2021 |
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: | 7/30/2021 |
| | |
| | |
| | |
| By: | /s/Diane Kenneally Diane Kenneally Chief Financial Officer and Treasurer |
| | |
| Date: | 7/30/2021 |
