The team at a publicly traded bank's $2-trillion-AUM (as of December 31) asset management arm is preparing to merge a 37-year-old closed-end fund into a 31-year-old open-end one, late this spring.

On March 7, the BNY Mellon [profile] team revealed that they plan to reorganize BNY Mellon Municipal Income, Inc. (DMF on the NYSE) into the BNY Mellon AMT-Free Municipal Bond Fund. BNY Mellon Investment Adviser, Inc. serves as investment advisor to both funds, and Insight North American LLC (a fixed income BNY unit) serves as subadvisor.

DMF is scheduled to stop trading on June 18, and the merger into the BNY Mellon AMT-Free Municipal Bond Fund is scheduled for June 20. DMF had $189 million in net assets as of February 28, while the acquiring fund had $1.877 billion in AUM as of yesterday (March 17).

The acquiring fund (which has acquired before) comes in five flavors: A shares (DMUAX) with a maximum load of 450 basis points and a 68bps expense ratio; C shares (DMUCX) with a maximum deferred load of 100bps and a 145bps expense ratio (which bakes in a 3bps fee waiver promised through December 31, 2025); I shares (DMBIX), with an expense ratio of 43bps; Y shares (DMUYX), with an expense ratio of 41bps; and Z shares (DRMBX), with an expense ratio of 49bps. In contrast, DMF has a net expense ratio of 329bps.

The minimum initial investment for the BNY Mellon AMT-Free Municipal Bond Fund's Y shares is $1 million, while the minimium innitial investment for the other share classes is $1,000.

Daniel Rabasco, head of municipal bonds at Insight North America, serves as a portfolio manager to both funds. Senior PM Jeffrey Burger also serves on DMF's PM team, while senior PM Thomas Casey serves on the BNY Mellon AMT-Free Municipal Bond Fund's PM team.

Though the two funds have mostly the same service providers, there are some differences. BNY Mellon Transfer, Inc. serves as dividend disbursing agent and transfer agent for the acquiring fund, while Computershare Inc. does so for DMF. The Bank of New York Mellon Corporation (BNY) serves as securities lending agent for the acquiring fund, BNY Mellon Securities Corporation (BNYMSC) serves as distributor, Ernst & Young LLP serves as independent accounting firm, and Stradley Ronon Stevens & Young LLP serves as counsel. The Bank of New York Mellon serves as custodian to both funds. 

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