The Fund will seek to provide high current income which is exempt from regular Federal and California income tax. The Fund will invest at least 80% of its total assets in municipal bonds paying interest that is exempt from regular federal and California income tax. Normally the Fund will invest at least 75% of its net assets in investment grade municipal bonds or comparable quality unrated municipal bonds. The Fund may invest up to 25% of its net assets in municipal bonds rated below investment grade. The Fund has issued preferred shares representing 40% of the Funds capital immediately after the issuance. The trust may utilise certain derivatives for hedging purposes.