The Enduring Allure of Tax-Advantaged Income: Assessing Neuberger Berman Municipal Fund's Dividend Resilience

In an era where income-generating assets face relentless scrutiny, the Neuberger Berman Municipal Fund (NBH) stands out as a paragon of stability. For income-focused investors, particularly those in higher tax brackets, the fund's combination of consistent monthly dividends and tax-advantaged yields offers a compelling case. As of September 2025, NBH's latest declared dividend of $0.05417 per share, payable on October 15, underscores its unwavering commitment to shareholder returnsNEUBERGER BERMAN MUNICIPAL FUND ANNOUNCES …^[3]. Over the past year, the fund has maintained a disciplined monthly payout schedule, with an annualized dividend of $0.65 per share as of August 2025, translating to a yield of 6.23%NBH Neuberger Berman Municipal, closed-end fund summary^[2]. This reliability, paired with the fund's focus on federal tax-exempt municipal securities, positions NBH as a cornerstone for portfolios seeking predictable income.

The Mechanics of Stability: Dividend Consistency and Tax Efficiency

NBH's dividend track record is nothing short of exemplary. Historical data reveals an average monthly payout of $0.06 per share over the past 17 yearsNeuberger Berman Municipal Fund Inc. (NBH) Dividend History^[4], with only minor adjustments to align with market conditions. For instance, the fund's annual dividend was reported at $0.75 per share in 2023, yielding 7.74%Neuberger Berman Municipal Fund (NBH) Dividend Yield 2025^[1], before moderating to $0.65 in 2025NBH Neuberger Berman Municipal, closed-end fund summary^[2]. This evolution reflects a strategic recalibration to preserve long-term sustainability rather than chasing short-term yield.

The fund's tax-advantaged structure further amplifies its appeal. By investing at least 80% of assets in municipal securities, NBH generates income exempt from federal income taxNEUBERGER BERMAN MUNICIPAL FUND ANNOUNCES …^[3]. As of August 2025, its average portfolio coupon stood at 5.03%NEUBERGER BERMAN MUNICIPAL FUND ANNOUNCES …^[3], a critical metric that underpins its ability to sustain distributions. For investors in high-tax states, this structure effectively boosts after-tax returns, making NBH a superior alternative to taxable fixed-income vehicles.

Leverage and Risk Management: Balancing Growth and Security

A nuanced understanding of NBH's strategy requires examining its leverage profile. The fund employs effective leverage of 41.69%NEUBERGER BERMAN MUNICIPAL FUND ANNOUNCES …^[3], a level that enhances returns without compromising stability. This approach allows NBH to amplify its exposure to municipal bonds while maintaining a buffer against interest rate fluctuations. Unlike high-yield corporate debt, municipal securities typically exhibit lower volatility, reducing the risk of distribution cuts. This balance between leverage and asset quality is a testament to the fund's management team's expertise.

A Cautionary Note: Yield vs. Long-Term Viability

While NBH's current yield of 6.23% is attractive, investors must contextualize this within broader market dynamics. The decline from 7.74% in 2023Neuberger Berman Municipal Fund (NBH) Dividend Yield 2025^[1] to 6.23% in 2025NBH Neuberger Berman Municipal, closed-end fund summary^[2] signals a recalibration in response to shifting municipal bond yields and redemption pressures. However, the fund's consistent payout history—spanning decades—suggests that these adjustments are tactical rather than indicative of systemic weakness.

Conclusion: A Pillar of Income Strategy

For investors prioritizing income stability and tax efficiency, NBH represents a rare convergence of attributes. Its disciplined payout history, tax-advantaged structure, and prudent leverage strategy create a resilient framework for long-term returns. While yields may fluctuate, the fund's operational consistency and alignment with market realities reinforce its role as a reliable income generator. In a landscape where uncertainty reigns, NBH's track record offers a beacon of predictability—a quality that remains invaluable.