Company: MMU
Filing Date: 2025-07-30
Form Type: N-CSR
Source: 0001133228-25-007762
Chunk: 2

Company: WESTERN ASSET MANAGED MUNICIPALS FUND INC.
Filing Date: 2025-07-30
Form: N-CSR
Chunk 2
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 as well as for hedging or risk management purposes. For credit ratings purposes, pre-refunded bonds are deemed to be unrated. The subadviser determines the credit quality of pre-refunded bonds based on the quality of the escrowed collateral and such other factors as the subadviser deems appropriate. At Western Asset Management Company, LLC (Western Asset), the Fund’s subadviser, we utilize a fixed income team approach, with decisions derived from interaction among various investment management sector specialists. The sector teams are comprised of Western Asset’s senior portfolio management personnel, research analysts and an in-house economist. Under this team approach, management of client fixed income portfolios will reflect a consensus of interdisciplinary views within the Western Asset organization. The individuals responsible for development of investment strategy, day-to-day portfolio management, oversight and coordination of the Fund are Michael Buchanan, Robert E. Amodeo, Ryan Brist, David T. Fare and John Mooney. Q. What were the overall market conditions during the Fund’s reporting period? A. The overall U.S. fixed income market experienced periods of volatility but generated a positive return over the twelve months ended May 31, 2025. The market was driven by several factors, including an overall resilient economy, moderating but “sticky” inflation, shifting U.S. Federal Reserve (Fed) monetary policy, a U.S. trade war, and several geopolitical issues. The Fed lowered interest rates in September 2024 (the first reduction since 2020) and again in November and December 2024. The December 2024 reduction put the federal funds target rate at 4.25%-4.50%, the lowest level since December 2022. However, since that time, the Fed has remained on hold as it weighs the impact of President Trump’s tariffs on the economy and inflation. Municipal (muni) credit fundamentals remained supported by record state and local revenue collections and elevated cash balances during the Fund’s fiscal year. However, relatively weaker supply and demand technicals weighed on relative market performance. The muni market contended with record supply conditions, with calendar year 2024 representing a

Western Asset Managed Municipals Fund Inc. 2025 Annual Report 1

Fund overview (cont’d)

record year of new issuance, and the first five months of 2025 exceeded that pace. Municipal demand continued to rebound from the sizeable outflows observed in 2022 and 2023, but was hampered by tax policy uncertainty, high demand for