UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM N-CSR

Investment Company Act file number: 811-02671

Deutsche Municipal Trust

(Exact Name of Registrant as Specified in Charter)

345 Park Avenue

New York, NY 10154-0004

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, including Area Code: (212) 250-3220

Paul Schubert

60 Wall Street

New York, NY 10005

(Name and Address of Agent for Service)

Date of fiscal year end:	5/31
Date of reporting period:	5/31/2016

ITEM 1. REPORT TO STOCKHOLDERS

May 31, 2016

Annual Report
to Shareholders

Deutsche Strategic High Yield Tax-Free Fund

Contents

3 Letter to Shareholders

5 Portfolio Management Review

11 Performance Summary

13 Investment Portfolio

37 Statement of Assets and Liabilities

39 Statement of Operations

40 Statement of Cash Flows

41 Statement of Changes in Net Assets

42 Financial Highlights

46 Notes to Financial Statements

58 Report of Independent Registered Public Accounting Firm

59 Information About Your Fund's Expenses

60 Tax Information

61 Advisory Agreement Board Considerations and Fee Evaluation

66 Board Members and Officers

71 Account Management Resources

This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.

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. Investments in lower-quality ("junk bonds") and non-rated securities present greater risk of loss than investments in higher-quality securities. The fund invests in inverse floaters, which are derivatives that involve leverage and could magnify the fund's 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. See the prospectus for details.

Deutsche Asset Management represents the asset management activities conducted by Deutsche Bank AG or any of its subsidiaries.

NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE  NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

Letter to Shareholders

Dear Shareholder:

Seven years into our economic recovery, you might be wondering "where’s the proof?" The strong U.S. dollar and sluggish growth have hampered exports and manufacturing. Low oil prices are raising concerns about the energy sector. A steep sell-off in the first quarter, plus a contentious U.S. election campaign and ongoing geopolitical issues, have led many to question what lies ahead.

Our analysts see a case for continued, albeit modest, growth in the U.S. economy. Households have reduced debt and are seeing gains in real income thanks to improving labor markets and lower energy prices. Businesses remain reasonably well positioned financially, with an added boost to purchasing power from lower energy prices. Lastly, while the Federal Reserve Board has initiated the process of raising short-term interest rates, we are confident that "low and slow" will continue to be the watchwords for a while.

The later stages of an economic recovery tend to bring increased volatility and more challenges to achieving positive investment returns. We believe that active management — careful sector allocation and security selection driven by deep research — can make a difference in this environment.

In the end, it is important to remember the core reason for investing: long- term goals and a desire for growth tempered by reasonable risk management. We appreciate your trust and welcome the opportunity to put our resources, experience and expertise to work in helping you meet your goals.

Best regards,

Brian Binder

President, Deutsche Funds

Please note: Deutsche Asset & Wealth Management is now two distinct businesses: Deutsche Asset Management and Deutsche Bank Wealth Management. As a result, our key service providers were renamed Deutsche AM Service Company; Deutsche AM Distributors, Inc. and Deutsche AM Trust Company, effective May 9, 2016.

Assumptions, estimates and opinions contained in this document constitute our judgment as of the date of the document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results.

Portfolio Management Review (Unaudited)

Overview of Market and Fund Performance

All performance information below is historical and does not guarantee future results. Returns shown are for Class A shares, unadjusted for sales charges. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit deutschefunds.com for the most recent month-end performance of all share classes. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had. Please refer to pages 11 through 12 for more complete performance information.

Investment Strategy

The fund invests in a wide variety of municipal bonds. These include general obligation bonds, for which payments of principal and interest are secured by the full faith and credit of the issuer and usually supported by the issuer's taxing power. In addition, securities held may include revenue bonds, for which principal and interest are secured by revenues from tolls, rents or other fees gained from the facility that was built with the bond issue proceeds.

The fund's management team seeks to hold municipal bonds that appear to offer the best opportunity to meet the fund's objective of providing a high level of income exempt from regular federal income tax. In selecting securities, the managers weigh a number of factors against each other, from economic outlooks and possible interest rate movements to characteristics of specific securities such as coupon, maturity date and call date, and changes in supply and demand within the municipal bond market. Although portfolio management may adjust the fund's duration (a measure of sensitivity to interest rates) over a wider range, they generally intend to keep it similar to that of the Barclays Municipal Bond Index, generally between five and nine years.

Deutsche Strategic High Yield Tax-Free Fund posted a return of 6.27% for the period ended May 31, 2016. The overall municipal bond market, as measured by the unmanaged Barclays Municipal Bond Index, delivered a total return of 5.87% for the same period. The average fund in the Morningstar High Yield Muni category returned 7.08% for the 12 months ended May 31, 2016.

The 12-month period ended May 31, 2016 saw the U.S. economy continue on a moderate upward trend. While corporate profits were challenged by a strong dollar, key indicators in areas such as employment and housing strengthened notably. In December of 2015, the U.S. Federal Reserve Board (the Fed) implemented a modest 25 basis point hike in its benchmark short-term rate, the first such increase in nine years. However, as the period progressed, with inflation remaining in check and weak growth overseas, the Fed pushed back its timetable for further steps towards normalizing rates, helping to support sentiment for U.S. fixed income markets broadly.

"Against a backdrop of extraordinarily low global interest rates, the municipal market was the beneficiary of strong demand from yield-seeking investors."

Against a backdrop of a generally benign credit outlook and extraordinarily low global interest rates, the municipal market was the beneficiary of strong demand from yield-seeking investors. New municipal issues were heavily oversubscribed, and tax-free mutual funds experienced ongoing positive weekly inflows beginning in November of 2015.

The municipal yield curve flattened over the 12 months ended May 31, 2016, as yields declined along most of the curve. Specifically, the two-year bond yield rose from 0.62% to 0.72%, while the five-year yield fell from 1.41% to 1.09%, the 20-year fell from 2.93% to 2.25%, and the 30-year fell from 3.16% to 2.45%. (See the graph below for municipal bond yield changes from the beginning to the end of the period.) For the 12 months, municipal market credit spreads — the incremental yield offered by lower-quality issues vs. AAA-rated issues — generally tightened.

Municipal Bond Yield Curve (as of 5/31/16 and 5/31/15)

Source: Municipal Market Data, AAA-rated universe, as of 5/31/16.

Chart is for illustrative purposes only and does not represent any Deutsche AM product.

Positive and Negative Contributors to Fund Performance

With a reasonably steep yield curve as the period began, we had a tilt in the portfolio towards longer-term issues in the 20-to-30-year maturity range. This exposure was a positive contributor to relative performance, as the fund was able to earn incremental income and benefit from the decline in yields and corresponding price strength among issues on the longer end of the curve.

The fund's holdings of BBB-rated issues and issues rated below-investment-grade helped performance relative to the benchmark, as credit spreads tightened over the 12 months ended May 31, 2016. That said, we had significantly less exposure to lower-rated, high-yield issues than many of the funds in our peer group. In particular, we had moderately light relative exposure to the volatile tobacco sector, which strongly outperformed during the period. The fund had a small position in Puerto Rico issues, which suffered as the territory's debt crisis worsened over the period. We remain comfortable with our more conservative approach on the fund's credit and maturity profile given the narrowing of credit spreads that has occurred along with a weakening of covenants on many new issues.

Overall positioning with respect to credit quality within the investment-grade portion of the fund was a modest contributor to performance vs. the benchmark. Specifically, during the period we maintained significant exposure to issues in the single A and BBB quality ranges. In particular, our holdings of health care, transportation and airport bonds added to relative performance.

The fund has had a preference for callable issues with coupons in the 5% range, well above current rates. Such bonds are typically priced at significant premiums over par value, and are less sensitive to changes in market interest rates.  As rates remained low, issuers were able to attract investors by offering bonds with 4% coupons at lower premiums (and therefore less market protection) and higher yields. The Fund was underweight the higher-yielding 4% coupon structure vs. the index, which detracted slightly from performance during the period.

The fund used inverse floaters, whose coupon rates move in the opposite direction of short-term interest rates, adding additional income in the steep yield curve environment.

Outlook and Positioning

At the end of the period, municipal yields were at low levels by historical standards, but remained reasonably attractive relative to U.S. Treasuries. As of the end of May 2016, the 10-year municipal bond yield of 1.66% was 89.7% of the comparable-maturity U.S. Treasury bond yield before taking into account the tax advantage of municipals. The 30-year municipal yield of 2.45% was 92.4% of the comparable U.S. Treasury yield.

While the curve has continued to flatten, longer-term issues still carry a meaningful yield advantage. We continue to evaluate premium coupon issues in the 20-to-25-year range that can provide a degree of protection against rising interest rates.

Credit spreads have continued to narrow in the wake of the ongoing global search for yield. With respect to the fund's credit exposure, we view spreads for issues rated BBB as relatively tight and see valuations among bonds in the A and AA quality ranges as more attractive overall. The decline in oil prices has helped bolster transportation-related credits overall, but has negatively impacted fundamentals and ratings in a handful of states.

In recent months, new municipal issues have been subscribed several times over and covenants have become less favorable to investors. We continue to be highly selective as we look for opportunities to add incremental yield, while maintaining a strong focus on liquidity.

Portfolio Management Team

Rebecca L. Flinn, Director

Co-Lead Portfolio Manager of the fund. Began managing the fund in 1998.

— Joined Deutsche Asset Management in 1986.

— BA, University of Redlands, California.

A. Gene Caponi, CFA, Managing Director

Co-Lead Portfolio Manager of the fund. Began managing the fund in 2009.

— Joined Deutsche Asset Management in 1998.

— BS, State University of New York, Oswego; MBA, State University of New York at Albany.

Ashton P. Goodfield, CFA, Managing Director

Co-Lead Portfolio Manager of the fund. Began managing the fund in 2014.

— Joined Deutsche Asset Management in 1986.

— Co-Head of Municipal Bonds.

— BA, Duke University.

Carol L. Flynn, CFA, Managing Director

Co-Lead Portfolio Manager of the fund. Began managing the fund in 2014.

— Joined Deutsche Asset Management in 1994.

— Co-Head of Municipal Bonds.

— BS from Duke University; MBA from University of Connecticut.

The views expressed reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.

Terms to Know

The Barclays Municipal Bond Index is an unmanaged, market-value-weighted measure of municipal bonds issued across the United States. Index issues have a credit rating of at least Baa and a maturity of at least two years. Index returns do not reflect fees or expenses and it is not possible to invest directly into an index.

The Morningstar High Yield Muni category consists of funds that invest at least 50% of their assets in high-income municipal securities that are not rated or that are rated at a level of BBB and below.

Credit quality measures a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations, such as AAA, AA and so forth. The lower the rating the higher the probability of default. Credit quality does not remove market risk and is subject to change.

The yield curve is a graph with a left-to-right line that shows how high or low yields are, from the shortest to the longest maturities. Typically (and when the yield curve is characterized as "steep," this is especially true), the line rises from left to right as investors who are willing to tie up their money for a longer period are rewarded with higher yields.

Credit spread is the additional yield provided by municipal bonds rated AA and below vs. municipals rated AAA with comparable effective maturity.

Duration, which is expressed in years, measures the sensitivity of the price of a bond or bond fund to a change in interest rates.

Performance Summary May 31, 2016 (Unaudited)

Class A	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/16
Unadjusted for Sales Charge	6.27%	6.05%	4.78%
Adjusted for the Maximum Sales Charge (max 2.75% load)	3.35%	5.46%	4.49%
Barclays Municipal Bond Index†	5.87%	5.07%	4.93%
Class C	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/16
Unadjusted for Sales Charge	5.40%	5.24%	4.00%
Adjusted for the Maximum Sales Charge (max 1.00% CDSC)	5.40%	5.24%	4.00%
Barclays Municipal Bond Index†	5.87%	5.07%	4.93%
Class S	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/16
No Sales Charges	6.54%	6.31%	5.04%
Barclays Municipal Bond Index†	5.87%	5.07%	4.93%
Institutional Class	1-Year	5-Year	10-Year
Average Annual Total Returns as of 5/31/16
No Sales Charges	6.51%	6.31%	5.06%
Barclays Municipal Bond Index†	5.87%	5.07%	4.93%

Performance in the Average Annual Total Returns table(s) above and the Growth of an Assumed $10,000 Investment line graph that follows is historical and does not guarantee future results. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit deutschefunds.com for the Fund's most recent month-end performance. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had.

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated October 1, 2015 are 1.00%, 1.76%, 0.83% and 0.75% for Class A, Class C, Class S and Institutional Class shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

A portion of the Fund's distributions may be subject to federal, state and local taxes and the alternative minimum tax.

Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge)

■ Deutsche Strategic High Yield Tax-Free Fund — Class A

■ Barclays Municipal Bond Index^†

Yearly periods ended May 31

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 2.75%. This results in a net initial investment of $9,725.

The growth of $10,000 is cumulative.

Performance of other share classes will vary based on the sales charges and the fee structure of those classes.

^† The Barclays Municipal Bond Index is an unmanaged, market-value-weighted measure of municipal bonds issued across the United States. Index issues have a credit rating of at least Baa and a maturity of at least two years.

	Class A	Class C	Class S	Institutional Class
Net Asset Value
5/31/16	$ 12.59	$ 12.59	$ 12.60	$ 12.60
5/31/15	$ 12.39	$ 12.40	$ 12.40	$ 12.40
Distribution Information as of 5/31/16
Income Dividends, Twelve Months	$ .55	$ .46	$ .58	$ .58
Capital Gain Distributions, Twelve Months	$ .01	$ .01	$ .01	$ .01
May Income Dividend	$ .0441	$ .0361	$ .0468	$ .0468
SEC 30-day Yield‡‡	1.88%	1.19%	2.18%	2.18%
Tax Equivalent Yield‡‡	3.32%	2.10%	3.85%	3.85%
Current Annualized Distribution Rate‡‡	4.20%	3.44%	4.46%	4.46%

^‡‡ The SEC yield is net investment income per share earned over the month ended May 31, 2016 shown as an annualized percentage of the maximum offering price per share on the last day of the period. The SEC yield is computed in accordance with a standardized method prescribed by the Securities and Exchange Commission. The SEC yield would have been 1.82%, 1.10%, 2.04% and 2.09% for Classes A, C, S and Institutional shares, respectively, had certain expenses not been reduced. Tax equivalent yield is based on the Fund's yield and a marginal federal income rate of 43.40%. Current annualized distribution rate is the latest monthly dividend shown as an annualized percentage of net asset value on May 31, 2016. Distribution rate simply measures the level of dividends and is not a complete measure of performance. The current annualized distribution rate would have been 4.14%, 3.35%, 4.32% and 4.37% for Classes A, C, S and Institutional shares, respectively, had certain expenses not been reduced. Yields and distribution rates are historical, not guaranteed and will fluctuate.

Investment Portfolio as of May 31, 2016

		Principal Amount ($)	Value ($)
Municipal Bonds and Notes 96.7%
Arizona 1.6%
Arizona, Salt River Pima-Maricopa, Indian Community, 0.13%**, 10/1/2025		11,945,000	11,945,000
Arizona, Salt Verde Financial Corp., Gas Revenue, 5.25%, 12/1/2025, GTY: Citigroup, Inc.		4,000,000	4,816,600
Maricopa County, AZ, Pollution Control Corp. Revenue, El Paso Electric Co. Project, Series B, 7.25%, 4/1/2040		3,930,000	4,563,123
Tempe, AZ, Industrial Development Authority Revenue, Tempe Life Care Village, Inc.:
	Series A, 6.25%, 12/1/2042	1,535,000	1,682,590
	Series A, 6.25%, 12/1/2046	1,400,000	1,532,300
			24,539,613
California 10.4%
California, Golden State Tobacco Securitization Corp., Tobacco Settlement, Series A-1, 5.75%, 6/1/2047		10,000,000	10,115,900
California, M-S-R Energy Authority, Series B, 7.0%, 11/1/2034, GTY: Citigroup, Inc.		8,750,000	13,128,325
California, Metropolitan Water District of Southern California, Series D, 0.36%**, 7/1/2035		3,000,000	3,000,000
California, Morongo Band of Mission Indians, Enterprise Casino Revenue, Series B, 144A, 6.5%, 3/1/2028		5,000,000	5,417,700
California, State General Obligation:
	5.0%, 8/1/2034	5,185,000	5,624,844
	5.5%, 3/1/2040	5,130,000	5,985,735
California, State General Obligation, Various Purposes:
	5.0%, 11/1/2032	10,000,000	10,600,600
	5.75%, 4/1/2031	23,360,000	26,557,283
California, State Public Works Board, Lease Revenue, Series B, 5.0%, 10/1/2039		5,500,000	6,574,095
California, State Public Works Board, Lease Revenue, Capital Projects:
	Series A-1, 6.0%, 3/1/2035	10,175,000	12,008,433
	Series I-1, 6.375%, 11/1/2034	5,000,000	5,972,800
California, Statewide Communities Development Authority Revenue, Loma Linda University Medical Center:
	Series A, 5.25%, 12/1/2044	1,305,000	1,465,541
	Series A, 144A, 5.25%, 12/1/2056	5,515,000	6,224,119
	Series A, 5.5%, 12/1/2054	1,305,000	1,479,048
California, Statewide Communities Development Authority Revenue, Terraces At San Joaquin Gardens Project:
	Series A, 5.625%, 10/1/2032	500,000	540,890
	Series A, 6.0%, 10/1/2042	1,000,000	1,091,570
	Series A, 6.0%, 10/1/2047	1,000,000	1,089,590
Long Beach, CA, Bond Finance Authority, Natural Gas Purchase Revenue, Series A, 5.25%, 11/15/2023, GTY: Merrill Lynch & Co., Inc.		620,000	742,301
Los Angeles, CA, Department of Airports Revenue, Series A, AMT, 5.0%, 5/15/2042 (a)		1,875,000	2,218,688
Riverside County, CA, Transportation Commission Toll Revenue Senior Lien, Series A, 5.75%, 6/1/2048		2,850,000	3,345,586
San Buenaventura, CA, Community Memorial Health Systems, 7.5%, 12/1/2041		3,250,000	4,018,950
San Diego, CA, Community College District, Election of 2006, 5.0%, 8/1/2036		2,050,000	2,389,111
San Francisco City & County, CA, Airports Commission, International Airport Revenue, Series A, AMT, 5.0%, 5/1/2044		11,000,000	12,564,750
San Francisco City & County, CA, Redevelopment Agency, Series C, AMT, 0.41%**, 6/15/2034, LIQ: Fannie Mae		50,000	50,000
San Francisco, CA, City & County Public Utilities Commission, Water Revenue, Series A, 5.125%, 11/1/2039		10,400,000	11,784,136
San Francisco, CA, City & County Redevelopment Financing Authority, Tax Allocation, Mission Bay South Redevelopment, Series D, Prerefunded, 7.0%, 8/1/2041		1,400,000	1,771,406
San Joaquin Hills, CA, Transportation Corridor Agency, Toll Road Revenue, Series A, 5.0%, 1/15/2050		3,555,000	4,005,170
Vernon, CA, Electric Systems Revenue, Series A, 5.5%, 8/1/2041		2,240,000	2,591,254
			162,357,825
Colorado 1.9%
Colorado, E-470 Public Highway Authority Revenue, Series C, 5.375%, 9/1/2026		2,000,000	2,256,080
Colorado, Health Facilities Authority Revenue, Christian Living Communities Project, Series A, 5.75%, 1/1/2037		1,000,000	1,010,130
Colorado, Health Facilities Authority Revenue, Valley View Hospital Association, 5.75%, 5/15/2036		2,000,000	2,159,760
Colorado, Park Creek Metropolitan District Revenue, Senior Ltd. Property Tax Supported, Series A, 5.0%, 12/1/2045		1,765,000	2,015,718
Colorado, Public Energy Authority, Natural Gas Purchased Revenue, 6.25%, 11/15/2028, GTY: Merrill Lynch & Co.,Inc.		6,365,000	8,224,471
Colorado, Regional Transportation District, Private Activity Revenue, Denver Transit Partners, 6.0%, 1/15/2041		2,000,000	2,317,140
Colorado, State Health Facilities Authority Revenue, Christian Living Community, 6.375%, 1/1/2041		1,615,000	1,765,292
Colorado, State Health Facilities Authority Revenue, Covenant Retirement Communities:
	Series A, 5.0%, 12/1/2033	4,835,000	5,364,529
	Series A, 5.0%, 12/1/2035	2,500,000	2,833,800
Montrose, CO, Memorial Hospital Revenue, 6.375%, 12/1/2023		2,355,000	2,365,739
			30,312,659
Connecticut 2.0%
Connecticut, Harbor Point Infrastructure Improvement District, Special Obligation Revenue, Harbor Point Project, Series A, 7.875%, 4/1/2039		20,000,000	23,634,400
Connecticut, Mashantucket Western Pequot Tribe Bond, 6.05%, 7/1/2031 (PIK)*		16,664,460	999,868
Connecticut, Mohegan Tribe Indians Gaming Authority, Priority Distribution, 144A, 5.25%, 1/1/2033		3,000,000	2,900,250
Connecticut, State Health & Educational Facility Authority Revenue, Church Home of Hartford, Inc. Project:
	Series A, 144A, 5.0%, 9/1/2046	1,000,000	1,077,100
	Series A, 144A, 5.0%, 9/1/2053	1,500,000	1,599,015
Hamden, CT, Facility Revenue, Whitney Center Project, Series A, 7.625%, 1/1/2030		1,115,000	1,183,416
			31,394,049
District of Columbia 0.6%
District of Columbia, Center for Internships & Academic Revenue, 0.38%**, 7/1/2036, LOC: Branch Banking & Trust		1,600,000	1,600,000
Metropolitan Washington, DC, Airport Authority Dulles Toll Road Revenue, Dulles Metrorail & Capital Important Project, Series A, 5.0%, 10/1/2053		7,000,000	7,691,950
			9,291,950
Florida 7.3%
Collier County, FL, Industrial Development Authority, Continuing Care Community Revenue, Arlington of Naples Project, Series A, 8.125%, 5/15/2044		4,000,000	4,791,720
Florida, Capital Region Community Development District, Capital Improvement Revenue, Series A, 7.0%, 5/1/2039		5,790,000	5,885,130
Florida, Halifax Hospital Medical Center, 5.0%, 6/1/2036		890,000	1,049,969
Florida, Middle Village Community Development District, Special Assessment, Series A, 6.0%, 5/1/2035		7,905,000	6,823,833
Florida, State Higher Educational Facilities Financial Authority Revenue, Nova Southeastern University Project, 5.0%, 4/1/2035		1,500,000	1,779,060
Florida, State Mid-Bay Bridge Authority, Series A, 5.0%, 10/1/2035		1,030,000	1,185,705
Florida, Village Community Development District No. 9, Special Assessment Revenue:
	5.5%, 5/1/2042	1,380,000	1,591,775
	7.0%, 5/1/2041	1,630,000	1,990,279
Greater Orlando, FL, Aviation Authority Airport Facilities Revenue, Jetblue Airways Corp. Project, AMT, 5.0%, 11/15/2026		1,500,000	1,624,335
Highlands County, FL, Health Facilities Authority Revenue, Adventist Health System:
	Series G, Prerefunded, 5.125%, 11/15/2020	1,000,000	1,020,480
	Series G, Prerefunded, 5.125%, 11/15/2021	70,000	71,434
	Series G, Prerefunded, 5.125%, 11/15/2022	75,000	76,536
	Series G, Prerefunded, 5.125%, 11/15/2023	180,000	183,686
Lee County, FL, Airport Revenue, Series A, AMT, 5.375%, 10/1/2032		1,750,000	2,015,335
Martin County, FL, Health Facilities Authority, Martin Memorial Medical Center, 5.5%, 11/15/2042		3,040,000	3,433,680
Miami Beach, FL, Health Facilities Authority, Mount Sinai Medical Center:
	5.0%, 11/15/2029	1,000,000	1,147,210
	5.0%, 11/15/2044	2,500,000	2,851,900
Miami-Dade County, FL, Aviation Revenue, Miami International Airport:
	Series A, AMT, 5.25%, 10/1/2033, INS: AGC	10,000,000	10,874,600
	Series A-1, 5.5%, 10/1/2041	5,000,000	5,748,550
Miami-Dade County, FL, Double Barreled Aviation, 5.0%, 7/1/2041		5,000,000	5,675,700
Miami-Dade County, FL, Expressway Authority, Toll Systems Revenue, Series A, 5.0%, 7/1/2044		2,500,000	2,870,000
Miami-Dade County, FL, Water & Sewer Systems Revenue, 5.0%, 10/1/2034		3,650,000	4,181,476
Orange County, FL, Health Facilities Authority Revenue, Orlando Health, Inc., Series A, 5.0%, 10/1/2034		2,500,000	3,031,700
Orange County, FL, Health Facilities Authority Revenue, Orlando Regional Healthcare, Series C, Prerefunded, 5.25%, 10/1/2035		5,000,000	5,504,050
Orange County, FL, School Board, Certificates of Participation, Series C, 5.0%, 8/1/2033		5,535,000	6,687,387
Palm Beach County, FL, Health Facilities Authority, Retirement Community Revenue, Acts Retirement-Life Communities, Inc., 5.5%, 11/15/2033		9,000,000	10,182,330
Port St. Lucie, FL, Special Assessment Revenue, Southwest Annexation District 1, Series B, 5.0%, 7/1/2027, INS: NATL		2,500,000	2,604,425
Seminole Tribe, FL, Special Obligation Revenue:
	Series A, 144A, 5.5%, 10/1/2024	8,000,000	8,346,880
	Series A, 144A, 5.75%, 10/1/2022	9,500,000	9,903,275
Tallahassee, FL, Health Facilities Revenue, Memorial Healthcare, Inc. Project, Series A, 5.0%, 12/1/2055		1,120,000	1,276,643
			114,409,083
Georgia 3.1%
Americus-Sumter County, GA, Hospital Authority, Magnolia Manor Obligated Group, Series A, 6.375%, 5/15/2043		4,000,000	4,447,360
Atlanta, GA, Tax Allocation, Beltline Project, Series B, 7.375%, 1/1/2031		4,915,000	5,582,113
Atlanta, GA, Water & Wastewater Revenue, Series B, 5.375%, 11/1/2039, INS: AGMC		10,000,000	11,270,800
De Kalb County, GA, Hospital Authority Revenue, Anticipation Certificates, Dekalb Medical Center, Inc. Project, 6.125%, 9/1/2040		7,500,000	8,581,275
De Kalb County, GA, Water & Sewer Revenue, Series A, 5.25%, 10/1/2032		820,000	967,346
Gainesville & Hall County, GA, Hospital Authority, Northeast Georgia Health System, Inc. Project:
	Series A, 5.25%, 8/15/2049	500,000	595,700
	Series A, 5.5%, 8/15/2054	1,820,000	2,217,524
Georgia, Glynn-Brunswick Memorial Hospital Authority, Anticipation Certificates, Southeast Georgia Health System Obligated Group, Series A, 5.625%, 8/1/2034		550,000	596,882
Georgia, Main Street Natural Gas, Inc., Gas Project Revenue:
	Series A, 5.0%, 3/15/2019, GTY: JPMorgan Chase & Co. (b)	10,000,000	10,940,800
	Series A, 5.5%, 9/15/2024, GTY: Merrill Lynch & Co., Inc.	2,440,000	2,988,951
			48,188,751
Guam 1.1%
Government of Guam, General Obligation, Series A, Prerefunded, 7.0%, 11/15/2039		10,155,000	12,245,407
Guam, International Airport Authority, Series C, AMT, 6.375%, 10/1/2043		1,610,000	1,959,305
Guam, Power Authority Revenue, Series A, 5.5%, 10/1/2030		3,000,000	3,383,790
			17,588,502
Hawaii 1.1%
Hawaii, State Department of Budget & Finance, Special Purpose Revenue, 15 Craigside Project, Series A, 9.0%, 11/15/2044		2,000,000	2,445,860
Hawaii, State Department of Budget & Finance, Special Purpose Revenue, Hawaiian Electric Co., Inc.:
	Series B, AMT, 4.6%, 5/1/2026, INS: FGIC	11,790,000	12,039,476
	6.5%, 7/1/2039	2,500,000	2,845,500
			17,330,836
Illinois 5.4%
Chicago, IL, General Obligation, Series A, 5.25%, 1/1/2029, INS: AGMC		175,000	175,683
Chicago, IL, O'Hare International Airport Revenue, Third Lien:
	Series A, 5.75%, 1/1/2039	9,955,000	11,615,295
	Series B, 6.0%, 1/1/2041	12,095,000	14,402,242
Cook County, IL, Forest Preservation District, Series C, 5.0%, 12/15/2037		1,845,000	2,044,186
Illinois, Finance Authority Revenue, Elmhurst Memorial Healthcare, Series A, 5.625%, 1/1/2037		5,500,000	5,838,855
Illinois, Finance Authority Revenue, Friendship Village of Schaumburg:
	Series A, 5.625%, 2/15/2037	5,000,000	5,001,200
	7.25%, 2/15/2045	4,000,000	4,296,400
Illinois, Finance Authority Revenue, Rush University Medical Center, Series B, Prerefunded, 5.75%, 11/1/2028, INS: NATL		1,250,000	1,396,875
Illinois, Finance Authority Revenue, Swedish Covenant Hospital, Series A, 6.0%, 8/15/2038		7,830,000	8,765,763
Illinois, Finance Authority Revenue, The Admiral at Lake Project:
	Series A, 7.75%, 5/15/2030	1,675,000	1,932,113
	Series A, 8.0%, 5/15/2040	1,000,000	1,156,660
	Series A, 8.0%, 5/15/2046	3,500,000	4,034,380
Illinois, Finance Authority Revenue, Three Crowns Park Plaza:
	Series A, 5.875%, 2/15/2026	1,225,000	1,226,874
	Series A, 5.875%, 2/15/2038	500,000	500,545
Illinois, Railsplitter Tobacco Settlement Authority, 6.0%, 6/1/2028		6,405,000	7,636,233
Illinois, State Finance Authority Revenue, OSF Healthcare Systems, Series A, 5.0%, 5/15/2041		5,265,000	5,873,318
Illinois, State Finance Authority Revenue, Park Place of Elmhurst Project:
	Series C, 2.0%, 5/15/2055	900,000	112,392
	Series A, 6.33%, 5/15/2048	5,100,000	5,132,385
Illinois, State Finance Authority Revenue, Trinity Health Corp., Series L, 5.0%, 12/1/2030		1,500,000	1,718,190
Springfield, IL, Electric Revenue, Senior Lien, 5.0%, 3/1/2040, INS: AGMC		1,935,000	2,240,479
			85,100,068
Indiana 1.4%
Indiana, State Finance Authority Revenue, Greencroft Obligation Group, Series A, 7.0%, 11/15/2043		2,290,000	2,693,544
Indiana, State Finance Authority Revenue, I-69 Development Partners LLC, AMT, 5.25%, 9/1/2034		2,275,000	2,564,971
Indiana, State Health & Educational Financing Authority, Hospital Revenue, Community Foundation of Northwest State:
	5.5%, 3/1/2037	850,000	874,140
	Prerefunded, 5.5%, 3/1/2037	900,000	932,031
North Manchester, IN, Economic Development Revenue, Peabody Retirement Community Project:
	Series B, 1.0%, 12/1/2045*	1,295,050	25,202
	Series A, 6.05%, 12/1/2045	1,557,576	1,421,600
Valparaiso, IN, Exempt Facilities Revenue, Pratt Paper LLC Project, AMT, 7.0%, 1/1/2044, GTY: Pratt Industries (U.S.A.)		6,220,000	7,710,187
Vigo County, IN, Hospital Authority Revenue, Union Hospital, Inc.:
	144A, 5.5%, 9/1/2027	1,000,000	1,028,870
	8.0%, 9/1/2041	4,000,000	4,792,440
			22,042,985
Iowa 0.6%
Altoona, IA, Urban Renewal Tax Increment Revenue, Annual Appropriation:
	6.0%, 6/1/2034	1,000,000	1,074,970
	6.0%, 6/1/2039	2,000,000	2,143,440
Iowa, Finance Authority Retirement Community Revenue, Edgewater LLC Project, Prerefunded, 6.5%, 11/15/2027		5,000,000	5,418,650
			8,637,060
Kansas 0.5%
Lenexa, KS, Health Care Facility Revenue, 5.5%, 5/15/2039		6,340,000	6,415,066
Lenexa, KS, Health Care Facility Revenue, Lakeview Village, Inc. Project, 7.25%, 5/15/2039		1,200,000	1,323,684
			7,738,750
Kentucky 2.0%
Kentucky, Economic Development Finance Authority, Hospital Facilities Revenue, Owensboro Medical Health Systems, Series A, 6.5%, 3/1/2045		15,000,000	17,360,250
Kentucky, Economic Development Finance Authority, Louisville Arena Project Revenue, Series A-1, 6.0%, 12/1/2033, INS: AGC		3,635,000	3,924,273
Kentucky, Public Transportation Infrastructure Authority Toll Revenue, 1st Tier-Downtown Crossing, Series A, 6.0%, 7/1/2053		7,195,000	8,502,332
Louisville & Jefferson County, KY, Metropolitan Government Health Systems Revenue, Norton Healthcare, Inc., 5.0%, 10/1/2030		1,000,000	1,011,210
			30,798,065
Louisiana 2.0%
DeSoto Parish, LA, Environmental Improvement Revenue, International Paper Co. Project, Series A, AMT, 5.75%, 9/1/2031		5,000,000	5,201,050
Louisiana, Local Government Environmental Facilities & Community Development, Westlake Chemical Corp., Series A, 6.5%, 8/1/2029		6,055,000	7,187,164
Louisiana, Local Government Environmental Facilities, Community Development Authority Revenue, 6.75%, 11/1/2032		6,000,000	6,480,480
Louisiana, Public Facilities Authority Revenue, Ochsner Clinic Foundation Project, Prerefunded, 6.75%, 5/15/2041		2,500,000	3,158,775
Louisiana, Public Facilities Authority, Hospital Revenue, Lafayette General Medical Center, 5.5%, 11/1/2040		5,000,000	5,475,000
Louisiana, State Public Facilities Authority Revenue, Ochsner Clinic Foundation Project, 5.0%, 5/15/2047		1,000,000	1,162,950
Louisiana, Tobacco Settlement Financing Corp. Revenue, Series A, 5.25%, 5/15/2035		1,820,000	2,085,156
			30,750,575
Maine 0.7%
Maine, Health & Higher Educational Facilities Authority Revenue, Maine General Medical Center, 6.75%, 7/1/2036		9,000,000	10,261,080
Maryland 1.0%
Anne Arundel County, MD, Special Obligation, National Business Park North Project, 6.1%, 7/1/2040		2,200,000	2,328,722
Maryland, State Health & Higher Educational Facilities Authority Revenue, Adventist Healthcare, Series A, 6.125%, 1/1/2036		3,250,000	3,820,473
Maryland, State Health & Higher Educational Facilities Authority Revenue, Doctors Community Hospital, Inc., 5.75%, 7/1/2038		6,250,000	6,957,875
Maryland, State Health & Higher Educational Facilities Authority Revenue, Mercy Medical Center, 6.25%, 7/1/2031		2,500,000	2,952,050
			16,059,120
Massachusetts 2.2%
Massachusetts, State Development Finance Agency Revenue, Linden Ponds, Inc. Facility:
	Series B, 11/15/2056*	430,598	2,446
	Series A-2, 5.5%, 11/15/2046	86,572	80,149
	Series A-1, 6.25%, 11/15/2039	1,621,881	1,638,181
Massachusetts, State Development Finance Agency Revenue, South Shore Hospital, Series I, 5.0%, 7/1/2041		675,000	792,018
Massachusetts, State Development Finance Agency Revenue, Tufts Medical Center, Inc., Series I, 7.25%, 1/1/2032		2,250,000	2,731,253
Massachusetts, State Health & Educational Facilities Authority Revenue, Boston College, Series M2, 5.5%, 6/1/2035		8,600,000	12,240,294
Massachusetts, State Health & Educational Facilities Authority Revenue, Caregroup Healthcare System:
	Series E-1, Prerefunded, 5.0%, 7/1/2028	1,500,000	1,628,760
	Series E-1, Prerefunded, 5.125%, 7/1/2038	1,500,000	1,632,615
Massachusetts, State Health & Educational Facilities Authority Revenue, South Shore Hospital:
	Series F, 5.625%, 7/1/2019	135,000	135,363
	Series F, 5.75%, 7/1/2029	1,480,000	1,484,070
Massachusetts, State Health & Educational Facilities Authority Revenue, Suffolk University, Series A, 5.75%, 7/1/2039		7,145,000	7,966,103
Massachusetts, State Port Authority Special Facilities Revenue, Delta Air Lines, Inc. Project, Series A, AMT, 5.5%, 1/1/2018, INS: AMBAC		4,000,000	4,015,880
			34,347,132
Michigan 3.4%
Dearborn, MI, Economic Development Corp. Revenue, Limited Obligation, Henry Ford Village:
	7.0%, 11/15/2038	4,500,000	4,581,675
	7.125%, 11/15/2043	1,500,000	1,529,895
Detroit, MI, Water & Sewerage Department, Sewerage Disposal System Revenue, Series A, 5.25%, 7/1/2039		2,100,000	2,348,514
Detroit, MI, Water Supply Systems Revenue, Series A, 5.75%, 7/1/2037		7,590,000	8,605,390
Kalamazoo, MI, Economic Development Corp. Revenue, Limited Obligation, Heritage Community:
	5.375%, 5/15/2027	1,000,000	1,011,950
	5.5%, 5/15/2036	1,000,000	1,010,160
Kentwood, MI, Economic Development Corp., Limited Obligation, Holland Home, 5.625%, 11/15/2041		3,750,000	4,071,038
Michigan, State Finance Authority Revenue, Detroit Water & Sewer, Series C-3, 5.0%, 7/1/2033, INS: AGMC		1,820,000	2,116,387
Michigan, State Finance Authority Revenue, Detroit Water & Sewer Department, Series C, 5.0%, 7/1/2035		910,000	1,052,961
Michigan, State Finance Authority Revenue, Trinity Health Corp.:
	5.0%, 12/1/2031	10,910,000	12,836,706
	5.0%, 12/1/2038	5,525,000	6,369,993
Michigan, State Hospital Finance Authority Revenue, Henry Ford Health Hospital, 5.75%, 11/15/2039		6,315,000	7,187,986
			52,722,655
Mississippi 1.3%
Lowndes County, MS, Solid Waste Disposal & Pollution Control Revenue, Weyerhaeuser Co. Project, Series A, 6.8%, 4/1/2022		5,500,000	6,869,225
Warren County, MS, Gulf Opportunity Zone, International Paper Co.:
	Series A, 5.375%, 12/1/2035	1,000,000	1,119,060
	Series A, 5.5%, 9/1/2031	4,250,000	4,465,603
	Series A, 5.8%, 5/1/2034, GTY: International Paper Co.	4,000,000	4,651,000
	Series A, 6.5%, 9/1/2032	2,620,000	2,923,920
			20,028,808
Missouri 1.2%
Cass County, MO, Hospital Revenue, 5.5%, 5/1/2027		2,000,000	2,024,640
Kansas City, MO, Industrial Development Authority, Health Facilities Revenue, First Mortgage, Bishop Spencer, Series A, 6.5%, 1/1/2035		1,000,000	1,001,840
Kirkwood, MO, Industrial Development Authority, Retirement Community Revenue, Aberdeen Heights:
	Series A, 8.25%, 5/15/2039	1,000,000	1,133,500
	Series A, 8.25%, 5/15/2045	2,850,000	3,219,018
Missouri, State Health & Educational Facilities Authority Revenue, Medical Research, Lutheran Senior Services, Series A, 5.0%, 2/1/2046		665,000	755,234
Missouri, State Health & Educational Facilities Authority, Lutheran Senior Services, 6.0%, 2/1/2041		2,250,000	2,515,275
St. Louis County, MO, Industrial Development Authority, Senior Living Facilities, St. Andrews Resources for Seniors Obligated Group, Series A, 5.125%, 12/1/2045		3,635,000	3,834,961
St. Louis, MO, Lambert-St. Louis International Airport Revenue, Series A-1, 6.625%, 7/1/2034		4,085,000	4,680,838
			19,165,306
Nebraska 0.4%
Douglas County, NE, Hospital Authority No. 002 Revenue, Health Facilities, Immanuel Obligation Group, 5.625%, 1/1/2040		1,500,000	1,655,610
Douglas County, NE, Hospital Authority No. 3, Health Facilities Revenue, State Methodist Health System, 5.0%, 11/1/2045		1,850,000	2,129,406
Lancaster County, NE, Hospital Authority No.1, Health Facilities Revenue, Immanuel Obligation Group, 5.625%, 1/1/2040		2,500,000	2,818,300
			6,603,316
Nevada 0.1%
Sparks, NV, Local Improvement Districts, Limited Obligation District No. 3, 6.75%, 9/1/2027		1,395,000	1,471,418
New Hampshire 1.1%
New Hampshire, Health & Education Facilities Authority Revenue, Havenwood-Heritage Heights:
	Series A, 5.35%, 1/1/2026	1,035,000	1,035,911
	Series A, 5.4%, 1/1/2030	550,000	550,357
New Hampshire, Health & Education Facilities Authority Revenue, Wentworth-Douglas Hospital, Series A, 7.0%, 1/1/2038		5,325,000	6,347,560
New Hampshire, State Business Finance Authority Revenue, Elliot Hospital Obligation Group, Series A, 6.125%, 10/1/2039		5,000,000	5,633,250
New Hampshire, State Health & Education Facilities Authority Revenue, Rivermead Retirement Community:
	Series A, 6.625%, 7/1/2031	700,000	798,931
	Series A, 6.875%, 7/1/2041	2,825,000	3,244,258
			17,610,267
New Jersey 3.4%
New Jersey, Health Care Facilities Financing Authority Revenue, St. Joseph's Health Care System, 6.625%, 7/1/2038		5,785,000	6,338,740
New Jersey, State Economic Development Authority Revenue, 5.0%, 6/15/2028		450,000	492,412
New Jersey, State Economic Development Authority, Special Facilities Revenue, Continental Airlines, Inc. Project, Series B, AMT, 5.625%, 11/15/2030		2,500,000	2,880,950
New Jersey, State Health Care Facilities Financing Authority Revenue, Saint Barnabas Health, Series A, 5.625%, 7/1/2032		3,500,000	4,127,900
New Jersey, State Health Care Facilities Financing Authority Revenue, University Hospital, Series A, 5.0%, 7/1/2046, INS: AGMC		1,820,000	2,097,332
New Jersey, Tobacco Settlement Financing Corp.:
	Series 1A, 4.75%, 6/1/2034	16,240,000	15,765,630
	Series 1-A, 5.0%, 6/1/2029	15,965,000	16,127,683
	Series 1A, 5.0%, 6/1/2041	5,000,000	4,869,150
			52,699,797
New Mexico 0.5%
Farmington, NM, Pollution Control Revenue, Public Service Co. of New Mexico, Series C, 5.9%, 6/1/2040		7,500,000	8,533,875
New York 7.3%
Albany, NY, Industrial Development Agency, Civic Facility Revenue, St. Peter's Hospital Project, Series A, Prerefunded, 5.75%, 11/15/2022		1,500,000	1,609,965
Hudson, NY, Yards Infrastructure Corp. Revenue:
	Series A, 5.25%, 2/15/2047	5,000,000	5,721,350
	Series A, 5.75%, 2/15/2047	7,000,000	8,235,080
New York, General Obligation, Series A-4, 0.4%**, 8/1/2038, LOC: Bank of Tokyo-Mitsubishi UFJ		1,000,000	1,000,000
New York, Metropolitan Transportation Authority, Dedicated Tax Fund, Green Bonds, Series B-1, 5.0%, 11/15/2036		10,000,000	12,308,300
New York, State Dormitory Authority Revenues, Non-State Supported Debt, Orange Regional Medical Center, 5.0%, 12/1/2045		1,000,000	1,095,540
New York, State Dormitory Authority Revenues, NYU Hospital Center, Series B, Prerefunded, 5.25%, 7/1/2024		660,000	686,677
New York, State Dormitory Authority Revenues, Orange Regional Medical Center, 6.125%, 12/1/2029		2,000,000	2,185,340
New York, State Housing Finance Agency Revenue, 205 E 92nd Street Housing, Series A, 0.4%**, 11/1/2047, LOC: Wells Fargo Bank NA		1,500,000	1,500,000
New York, State Liberty Development Corp. Revenue, World Trade Center Project, Class 1-3, 5.0%, 11/15/2044		10,000,000	11,268,900
New York, State Thruway Authority, General Revenue, Junior Indebtedness Obligation, Junior Lien, Series A, 5.0%, 1/1/2051		2,250,000	2,630,497
New York, State Transportation Development Corp., Special Facilities Revenue, Laguardia Gateway Partners LLC, Series A, AMT, 5.0%, 7/1/2046 (a)		3,500,000	3,942,855
New York & New Jersey Port Authority, AMT, 5.0%, 10/1/2035		6,825,000	8,238,799
New York & New Jersey Port Authority, Special Obligation Revenue, JFK International Air Terminal LLC, 6.0%, 12/1/2042		5,795,000	6,806,923
New York City, NY, Housing Development Corp., 90 Washington Street, Series A, 0.41%**, 2/15/2035, LIQ: Fannie Mae		1,800,000	1,800,000
New York City, NY, Industrial Development Agency, Special Facility Revenue, American Airlines, JFK International Airport, AMT, 8.0%, 8/1/2028, GTY: American Airlines Group		6,100,000	6,235,481
New York City, NY, Municipal Water Finance Authority, Water & Sewer Systems Revenue:
	Series AA-1, 0.36%**, 6/15/2046, SPA: PNC Bank NA	2,000,000	2,000,000
	Series FF, 5.0%, 6/15/2039	7,500,000	8,995,050
	Series EE, 5.0%, 6/15/2047	11,000,000	12,958,990
New York City, NY, Transitional Finance Authority Revenue, Future Tax Secured, Series B-1, 5.0%, 8/1/2039		11,595,000	13,875,273
Orange County, NY, Senior Care Revenue, Industrial Development Agency, The Glen Arden Project, 5.7%, 1/1/2028		1,250,000	1,130,038
			114,225,058
North Carolina 0.5%
Charlotte, NC, Airport Revenue, Series A, 5.0%, 7/1/2039		1,450,000	1,637,369
North Carolina, Medical Care Commission, Retirement Facilities Revenue, First Mortgage, Southminster Project, Series A, 5.625%, 10/1/2027		2,500,000	2,569,150
North Carolina, Medical Care Commission, Retirement Facilities Revenue, First Mortgage-Aldersgate, 5.0%, 7/1/2045		3,320,000	3,572,254
			7,778,773
North Dakota 0.2%
Burleigh County, ND, Health Care Revenue, St. Alexius Medical Center Project, Series A, Prerefunded, 5.0%, 7/1/2035		1,200,000	1,419,984
Grand Forks, ND, Health Care System Revenue, Altru Health System, 5.0%, 12/1/2032		2,000,000	2,225,540
			3,645,524
Ohio 0.8%
Cleveland, OH, Airport Systems Revenue, Series A, 5.0%, 1/1/2030		1,000,000	1,135,080
Hamilton County, OH, Health Care Facilities Revenue, Christ Hospital Project, 5.5%, 6/1/2042		3,100,000	3,563,946
Hamilton County, OH, Health Care Revenue, Life Enriching Communities Project:
	6.125%, 1/1/2031	1,870,000	2,151,229
	6.625%, 1/1/2046	2,500,000	2,899,225
Ohio, State Higher Educational Facility Commission Revenue, Summa Health Systems Project, Series 2010, 5.75%, 11/15/2040		3,000,000	3,370,410
			13,119,890
Oklahoma 0.5%
Tulsa County, OK, Industrial Authority, Senior Living Community Revenue, Montereau, Inc. Project, Series A, 7.25%, 11/1/2045		6,500,000	7,139,925
Pennsylvania 5.0%
Centre County, PA, Hospital Authority, Mount Nittany Medical Center, Series A, 5.0%, 11/15/2041		1,000,000	1,171,220
Cumberland County, PA, Municipal Authority Revenue, Asbury Obligation Group, 6.125%, 1/1/2045		4,350,000	4,663,809
Lancaster County, PA, Hospital Authority Revenue, Brethren Village Project, Series A, 6.375%, 7/1/2030		1,000,000	1,027,950
Lancaster County, PA, Hospital Authority Revenue, University of Pennsylvania Health System Obligated Group, 5.0%, 8/15/2042		900,000	1,065,888
Northampton County, PA, Hospital Authority Revenue, St. Luke's Hospital Project:
	Series A, 5.375%, 8/15/2028	3,500,000	3,786,335
	Series A, 5.5%, 8/15/2035	6,500,000	7,024,940
Pennsylvania, Commonwealth Financing Authority, Series A, 5.0%, 6/1/2035		3,125,000	3,606,781
Pennsylvania, Economic Development Finance Authority, U.S. Airways Group, Series B, 8.0%, 5/1/2029, GTY: American Airlines, Inc.		985,000	1,155,927
Pennsylvania, Economic Development Financing Authority, Sewer Sludge Disposal Revenue, Philadelphia Biosolids Facility, 6.25%, 1/1/2032		1,500,000	1,659,570
Pennsylvania, State Economic Development Financing Authority Revenue, Bridges Finco LP, AMT, 5.0%, 12/31/2038		4,785,000	5,460,116
Pennsylvania, State Economic Development Financing Authority, Exempt Facilities Revenue, PPL Energy Supply, Series A, 6.4%, 12/1/2038		1,115,000	1,098,810
Pennsylvania, State Turnpike Commission Revenue:
	Series A-1, 5.0%, 12/1/2041	4,355,000	5,000,498
	Series C, 5.0%, 12/1/2043	7,000,000	8,096,760
	Series C, 5.0%, 12/1/2044	1,615,000	1,884,770
	Series A, Prerefunded, 6.5%, 12/1/2036	6,385,000	7,890,072
Pennsylvania, State Turnpike Commission Revenue, Turnpike Subordinate Revenue Refunding Bonds, 5.0%, 6/1/2036 (a)		10,000,000	11,695,500
Philadelphia, PA, Airport Revenue, Series A, 5.0%, 6/15/2035		7,085,000	7,975,018
Philadelphia, PA, Gas Works Revenue, 5.25%, 8/1/2040		3,000,000	3,375,780
			77,639,744
Puerto Rico 0.9%
Commonwealth of Puerto Rico, Public Improvement, Series B, 6.5%, 7/1/2037		5,000,000	3,095,600
Puerto Rico, Sales Tax Financing Corp., Sales Tax Revenue:
	Series C, 5.25%, 8/1/2041	3,065,000	1,228,881
	Series A, 5.5%, 8/1/2042	7,650,000	3,066,579
	Series A, 5.75%, 8/1/2037	2,130,000	859,285
	Series A, 6.0%, 8/1/2042	4,570,000	1,854,597
	Series A, 6.375%, 8/1/2039	2,295,000	939,871
Puerto Rico, Sales Tax Financing Corp., Sales Tax Revenue, Convertible Capital Appreciation, Series A, Step-up Coupon, 0% to 8/1/2016, 6.75% to 8/1/2032		10,000,000	3,819,900
			14,864,713
Rhode Island 0.2%
Rhode Island, Tobacco Settlement Financing Corp., Series A, 5.0%, 6/1/2040		2,345,000	2,595,469
South Carolina 2.7%
Greenwood County, SC, Hospital Revenue, Self Regional Healthcare, Series B, 5.0%, 10/1/2031		1,000,000	1,134,010
Hardeeville, SC, Assessment Revenue, Anderson Tract Municipal Improvement District, Series A, 7.75%, 11/1/2039		4,469,000	4,640,207
South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Palmetto Health Alliance, 5.75%, 8/1/2039		3,595,000	3,914,667
South Carolina, State Public Service Authority Revenue:
	Series C, 5.0%, 12/1/2046	7,500,000	8,660,700
	Series E, 5.25%, 12/1/2055	10,360,000	12,274,425
South Carolina, State Public Service Authority Revenue, Santee Cooper, Series A, 5.75%, 12/1/2043		8,890,000	10,991,774
			41,615,783
South Dakota 0.5%
South Dakota, State Health & Educational Facilities Authority Revenue, Avera Health:
	Series B, 5.25%, 7/1/2038	3,000,000	3,193,500
	Series B, 5.5%, 7/1/2035	5,000,000	5,400,050
			8,593,550
Tennessee 1.0%
Jackson, TN, Hospital Revenue, Jackson-Madison Project:
	5.625%, 4/1/2038	810,000	871,868
	Prerefunded, 5.625%, 4/1/2038	2,190,000	2,382,545
Johnson City, TN, Health & Educational Facilities, Board Hospital Revenue, Mountain States Health Alliance, 6.5%, 7/1/2038		3,570,000	4,136,773
Tennessee, Energy Acquisition Corp., Gas Revenue, Series C, 5.0%, 2/1/2027, GTY: The Goldman Sachs Group, Inc.		6,435,000	7,758,808
			15,149,994
Texas 15.8%
Bexar County, TX, Health Facilities Development Corp. Revenue, Army Retirement Residence Project, 6.2%, 7/1/2045		6,000,000	6,825,300
Brazos River, TX, Harbor Navigation District, Brazoria County Environmental Health, Dow Chemical Co. Project:
	Series B-2, 4.95%, 5/15/2033	4,000,000	4,210,840
	Series A-3, AMT, 5.125%, 5/15/2033	9,000,000	9,444,960
Brazos River, TX, Pollution Control Authority Revenue, Series D-1, 144A, AMT, 8.25%, 5/1/2033*		7,000,000	122,430
Cass County, TX, Industrial Development Corp., Environmental Improvement Revenue, International Paper Co. Projects, Series A, 9.25%, 3/1/2024		2,000,000	2,422,620
Central Texas, Regional Mobility Authority Revenue, 5.0%, 1/1/2046 (a)		2,665,000	3,106,004
Central Texas, Regional Mobility Authority Revenue, Capital Appreciation:
	Zero Coupon, 1/1/2030	5,000,000	3,073,400
	Zero Coupon, 1/1/2032	3,500,000	2,004,975
Central Texas, Regional Mobility Authority Revenue, Senior Lien:
	Series A, 5.0%, 1/1/2040	1,385,000	1,612,154
	Series A, 5.0%, 1/1/2043	1,000,000	1,117,380
	Prerefunded, 6.0%, 1/1/2041	5,455,000	6,617,897
Harris County, TX, Cultural Education Facilities Finance Corp. Revenue, 1st Mortgage-Brazos Presbyterian Homes, Inc. Project:
	Series B, 7.0%, 1/1/2043	3,000,000	3,586,410
	Series B, 7.0%, 1/1/2048	4,000,000	4,751,480
Houston, TX, Airport System Revenue, United Airlines, Inc., Terminal E Project, AMT, 4.75%, 7/1/2024		3,385,000	3,846,342
Houston, TX, Airport Systems Revenue, Special Facilities Continental Airlines, Inc. Terminal Projects, AMT, 6.625%, 7/15/2038		2,000,000	2,326,300
La Vernia, TX, Higher Education Finance Corp. Revenue, Lifeschools of Dallas:
	Series A, Prerefunded, 7.25%, 8/15/2031	1,275,000	1,522,299
	Series A, Prerefunded, 7.5%, 8/15/2041	1,785,000	2,145,231
Lewisville, TX, Combination Contract Revenue, 6.75%, 10/1/2032		13,520,000	14,283,339
Matagorda County, TX, Navigation District No. 1, Pollution Control Revenue, AEP Texas Central Co. Project, Series A, 4.4%, 5/1/2030, INS: AMBAC		11,000,000	12,629,650
Matagorda County, TX, Navigation District No. 1, Pollution Control Revenue, Central Power & Light Co. Project, Series A, 6.3%, 11/1/2029		3,000,000	3,407,820
Mission, TX, Economic Development Corp. Revenue, Senior Lien, Natgasoline Project, Series B, AMT, 144A, 5.75%, 10/1/2031		750,000	792,758
North Texas, Tollway Authority Revenue:
	Series A, 5.0%, 1/1/2034	4,285,000	5,053,429
	Series A, 5.0%, 1/1/2039 (a)	11,770,000	14,020,189
	Series B, 5.0%, 1/1/2045	3,335,000	3,860,963
	First Tier, Series A, 5.625%, 1/1/2033	545,000	581,461
	First Tier, Series A, Prerefunded, 5.625%, 1/1/2033	455,000	489,357
	First Tier, 6.0%, 1/1/2043	5,000,000	5,907,700
	First Tier, Series A, 6.25%, 1/1/2039	9,525,000	10,692,955
Red River, TX, Health Facilities Development Corp., Retirement Facilities Revenue, MRC Crossings Project, Series A, 8.0%, 11/15/2049		1,715,000	2,062,253
San Antonio, TX, Convention Center Hotel Finance Corp., Contract Revenue, Empowerment Zone, Series A, AMT, 5.0%, 7/15/2039, INS: AMBAC		8,000,000	8,028,400
San Antonio, TX, Electric & Gas Revenue, 5.0%, 2/1/2024		15,000,000	16,009,050
Tarrant County, TX, Cultural Education Facilities Finance Corp. Revenue, Trinity Terrace Project, The Cumberland Rest, Inc., Series A-1, 5.0%, 10/1/2044		1,575,000	1,768,000
Tarrant County, TX, Cultural Education Facilities Finance Corp., Hospital Revenue, Baylor Health Care System Project, Series C, 0.41%**, 11/15/2050, LOC: Northern Trust Co.		1,270,000	1,270,000
Tarrant County, TX, Cultural Education Facilities Finance Corp., Retirement Facility, Mirador Project:
	Series A, 8.125%, 11/15/2039	1,000,000	844,980
	Series A, 8.25%, 11/15/2044	3,430,000	2,898,556
Texas, Dallas/Fort Worth International Airport Revenue:
	Series D, 5.0%, 11/1/2035	2,715,000	3,107,453
	Series A, 5.25%, 11/1/2038	15,000,000	17,244,600
Texas, Love Field Airport Modernization Corp., Special Facilities Revenue, Southwest Airlines Co. Project, 5.25%, 11/1/2040		7,445,000	8,346,292
Texas, Municipal Gas Acquisition & Supply Corp. I, Gas Supply Revenue, Series D, 6.25%, 12/15/2026, GTY: Merrill Lynch & Co., Inc.		16,875,000	21,224,194
Texas, SA Energy Acquisition Public Facility Corp., Gas Supply Revenue, 5.5%, 8/1/2020, GTY: The Goldman Sachs Group, Inc.		10,000,000	11,662,500
Texas, State Municipal Gas Acquisition & Supply Corp. III Gas Supply Revenue, 5.0%, 12/15/2030, GTY: Macquarie Group Ltd.		1,670,000	1,889,187
Texas, State Private Activity Bond, Surface Transportation Corp. Revenue, Senior Lien, North Tarrant Express Mobility Partners Segments LLC, AMT, 6.75%, 6/30/2043		2,220,000	2,757,062
Texas, State Transportation Commission, Turnpike Systems Revenue, Series C, 5.0%, 8/15/2034		8,235,000	9,646,808
Texas, Uptown Development Authority, Tax Increment Contract Revenue, Infrastructure Improvement Facilities, 5.5%, 9/1/2029		1,000,000	1,102,700
Travis County, TX, Health Facilities Development Corp. Revenue, Westminster Manor Health:
	7.0%, 11/1/2030	1,530,000	1,768,328
	7.125%, 11/1/2040	3,580,000	4,109,196
			246,195,202
Virginia 0.9%
Stafford County, VA, Economic Development Authority, Hospital Facilities Revenue, Mary Washington Healthcare, 5.0%, 6/15/2036		600,000	709,914
Virginia, Marquis Community Development Authority Revenue:
	Series C, Zero Coupon, 9/1/2041	7,906,000	1,084,229
	Series B, 5.625%, 9/1/2041	5,332,000	4,318,973
Virginia, Marquis Community Development Authority Revenue, Convertible Cabs, Step-up Coupon, 0% to 9/1/2021, 7.5% to 9/1/2045		1,640,000	1,073,659
Virginia, Mosaic District Community Development Authority Revenue, Series A, 6.875%, 3/1/2036		2,000,000	2,307,140
Virginia, Peninsula Ports Authority, Residential Care Facility Revenue, Virginia Baptist Homes, Series C, 5.4%, 12/1/2033		2,600,000	2,589,522
Virginia, State Small Business Financing Authority Revenue, Elizabeth River Crossings LLC Project, AMT, 6.0%, 1/1/2037		2,000,000	2,380,280
			14,463,717
Washington 2.1%
Klickitat County, WA, Public Hospital District No. 2 Revenue, Skyline Hospital, 6.5%, 12/1/2038		3,205,000	3,235,864
Washington, Port of Seattle, Industrial Development Corp., Special Facilities- Delta Airlines, AMT, 5.0%, 4/1/2030		2,000,000	2,154,380
Washington, State Health Care Facilities Authority Revenue, Series C, 5.375%, 8/15/2028, INS: AGC		2,970,000	3,084,315
Washington, State Health Care Facilities Authority Revenue, Virginia Mason Medical Center, Series A, 6.125%, 8/15/2037		16,000,000	16,893,280
Washington, State Housing Finance Commission, Rockwood Retirement Communities Project, Series A, 7.375%, 1/1/2044		6,000,000	7,007,340
			32,375,179
West Virginia 0.9%
West Virginia, State Hospital Finance Authority Revenue, Charleston Medical Center, Series A, 5.625%, 9/1/2032		3,080,000	3,421,295
West Virginia, State Hospital Finance Authority Revenue, Thomas Health Systems:
	6.5%, 10/1/2028	7,000,000	7,406,490
	6.5%, 10/1/2038	3,000,000	3,166,650
			13,994,435
Wisconsin 1.0%
Wisconsin, Public Finance Authority, Apartment Facilities Revenue, Senior Obligation Group, AMT, 5.0%, 7/1/2042		3,500,000	3,737,860
Wisconsin, State Health & Educational Facilities Authority Revenue, Aurora Health Care, Inc., Series A, 5.625%, 4/15/2039		8,160,000	9,162,700
Wisconsin, State Health & Educational Facilities Authority Revenue, St. John's Communities, Inc.:
	Series B, 5.0%, 9/15/2045	1,000,000	1,088,970
	Series A, Prerefunded, 7.625%, 9/15/2039	1,000,000	1,208,160
			15,197,690
Other Territories 0.1%
Non-Profit Preferred Funding Trust I, Series A1, 144A, 4.22%, 9/15/2037		904,701	916,733
Total Municipal Bonds and Notes (Cost $1,372,310,223)			1,509,494,924
Underlying Municipal Bonds of Inverse Floaters (c) 10.0%
Hawaii 0.7%
Hawaii, State General Obligation, Series 2015-DK, Prerefunded , 5.0%, 5/1/2027 (d)		8,340,000	9,011,287
Hawaii, State General Obligation, Series DK, Prerefunded, 5.0%, 5/1/2027 (d)		1,465,000	1,582,918
Hawaii, State General Obligation, Series DK, 5.0%, 5/1/2027 (d)		195,000	210,695
	Trust: Hawaii, State General Obligation, Series 2867, 144A, 17.06%, 11/1/2017, Leverage Factor at purchase date: 4 to 1
			10,804,900
Louisiana 0.7%
Louisiana, State Gas & Fuels Tax Revenue, Series B, 5.0%, 5/1/2033 (d)		3,026,513	3,455,357
Louisiana, State Gas & Fuels Tax Revenue, Series B, 5.0%, 5/1/2034 (d)		3,304,152	3,772,335
Louisiana, State Gas & Fuels Tax Revenue, Series B, 5.0%, 5/1/2035 (d)		3,666,834	4,186,407
	Trust: Louisiana, State Gas & Fuels Tax Revenue, Series 3806, 144A, 9.048%, 5/1/2018, Leverage Factor at purchase date: 2 to 1
			11,414,099
Massachusetts 1.2%
Massachusetts, State School Building Authority, Sales Tax Revenue, Series C, 5.0%, 8/15/2037 (d)		15,000,000	18,189,750
	Trust: Massachusetts, Tender Option Bond Trust Receipts/Certificates of Various States, Series 2016-XM0239, 144A, 16.985%, 8/15/2037, Leverage Factor at purchase date: 4 to 1
Michigan 0.8%
Michigan, State Building Authority Revenue, Facilities Program, Series I, 5.0%, 4/15/2034 (d)		10,000,000	12,049,182
	Trust: State Building Authority Revenue, Series 2015-XM0123, 144A, 13.002%, 10/15/2023, Leverage Factor at purchase date: 3 to 1
New York 2.4%
New York, State Dormitory Authority Revenues, Personal Income Tax Revenue, Series A, 5.0%, 3/15/2023 (d)		5,095,207	5,270,274
	Trust: New York, State Dormitory Authority Revenues, Secondary Issues, Series 1955-2, 144A, 17.135%, 9/15/2016, Leverage Factor at purchase date: 4 to 1
New York, State Dormitory Authority, Personal Income Tax Revenue, Series F, 5.0%, 2/15/2035 (d)		10,000,000	11,311,900
	Trust: New York, State Dormitory Authority Revenues, Series 4688, 144A, 9.14%, 3/15/2024, Leverage Factor at purchase date: 2 to 1
New York, State Environmental Facilities Corp., Clean Drinking Water, Series A, 5.0%, 6/15/2025 (d)		4,000,000	4,342,067
New York, State Environmental Facilities Corp., Clean Drinking Water, Series A, 5.0%, 6/15/2026 (d)		3,000,000	3,256,551
New York, State Environmental Facilities Corp., Clean Drinking Water, Series A, 5.0%, 6/15/2027 (d)		3,000,000	3,256,550
	Trust: New York, State Environmental Facilities Corp., Clean Drinking Water, Series 2870, 144A, 15.598%, 6/15/2017, Leverage Factor at purchase date: 3.6 to 1
New York City, NY, Transitional Finance Authority Revenue, Series C-1, 5.0%, 11/1/2027 (d)		3,185,000	3,375,743
New York City, NY, Transitional Finance Authority Revenue, Series C-1, Prerefunded, 5.0%, 11/1/2027 (d)		6,815,000	7,223,137
	Trust: New York City, NY, Transitional Finance Authority Revenue, Series 2072, 144A, 10.88%, 11/1/2027, Leverage Factor at purchase date: 2.5 to 1
			38,036,222
Ohio 0.8%
Ohio, State Higher Educational Facilities Commission Revenue, Cleveland Clinic Health, Series A, 5.125%, 1/1/2028 (d)		4,522,767	4,849,595
Ohio, State Higher Educational Facilities Commission Revenue, Cleveland Clinic Health, Series A, 5.25%, 1/1/2033 (d)		7,712,913	8,270,272
	Trust: Ohio, State Higher Educational Revenue, Series 3139, 144A, 13.9%, 1/1/2028, Leverage Factor at purchase date: 3 to 1
			13,119,867
Tennessee 1.0%
Nashville & Davidson County, TN, Metropolitan Government, 5.0%, 1/1/2024 (d)		14,996,415	15,996,353
	Trust: Nashville & Davidson County, TN, Metropolitan Government, Series 2631-1, 144A, 17.146%, 7/1/2017, Leverage Factor at purchase date: 4 to 1
Texas 1.2%
Harris County, TX, Flood Control District, Series A, 5.0%, 10/1/2034 (d)		5,500,000	6,300,855
	Trust: Harris County, TX, Flood Control District, Series 4692, 144A, 9.24%, 10/11/2018, Leverage Factor at purchase date: 2 to 1
Texas, State Transportation Commission Revenue, 5.0%, 4/1/2026 (d)		12,500,000	12,958,000
	Trust: Texas, State Transportation Commission Revenue, Series 2563, 144A, 21.08%, 10/1/2016, Leverage Factor at purchase date: 5 to 1
			19,258,855
Washington 1.2%
Washington, State General Obligation, Series A-1, 5.0%, 8/1/2037 (d)		15,000,000	18,122,850
	Trust: State General Obligation, Series XM0127, 144A, 16.985%, 8/1/2023, Leverage Factor at purchase date: 4 to 1
Total Underlying Municipal Bonds of Inverse Floaters (Cost $148,299,029)			156,992,078

	% of Net Assets	Value ($)
Total Investment Portfolio (Cost $1,520,609,252)†	106.7	1,666,487,002
Floating Rate Notes (c)	(6.1)	(95,759,629)
Other Assets and Liabilities, Net	(0.6)	(9,517,889)
Net Assets	100.0	1,561,209,484

The following table represents bonds that are in default:

Security	Coupon	Maturity Date	Principal Amount ($)	Cost ($)	Value ($)
Brazos River, TX, Pollution Control Authority Revenue, Series D-1, 144A, AMT*	8.25%	5/1/2033	7,000,000	7,000,000	122,430
Connecticut, Mashantucket Western Pequot Tribe Bond*	6.05%	7/1/2031	16,664,460	11,711,381	999,868
				18,711,381	1,122,298

* Non-income producing security.

** Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of May 31, 2016.

^† The cost for federal income tax purposes was $1,419,712,364. At May 31, 2016, net unrealized appreciation for all securities based on tax cost was $151,015,009. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $187,820,207 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $36,805,198.

(a) When-issued security.

(b) At May 31, 2016, this security has been pledged, in whole or in part, as collateral for tender option bond trust.

(c) Securities represent the underlying municipal obligations of inverse floating rate obligations held by the Fund. The Floating Rate Notes represent leverage to the Fund and is the amount owed to the floating rate note holders.

(d) 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.

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.

AGC: Assured Guaranty Corp.

AGMC: Assured Guaranty Municipal Corp.

AMBAC: Ambac Financial Group, Inc.

AMT: Subject to alternative minimum tax.

FGIC: Financial Guaranty Insurance Co.

GTY: Guaranty Agreement

LIQ: Liquidity Facility

LOC: Letter of Credit

INS: Insured

NATL: National Public Finance Guarantee Corp.

PIK: Denotes that all or a portion of the income is paid in-kind in the form of additional principal.

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.

SPA: Standby Bond Purchase Agreement

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, 2016 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 (e)	$ —	$ 1,666,487,002	$ —	$ 1,666,487,002
Total	$ —	$ 1,666,487,002	$ —	$ 1,666,487,002

There have been no transfers between fair value measurement levels during the period ended May 31, 2016.

(e) See Investment Portfolio for additional detailed categorizations.

The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

as of May 31, 2016
Assets
Investments in non-affiliated securities, at value (cost $1,520,609,252)	$ 1,666,487,002
Cash	2,001,876
Receivable for Fund shares sold	5,746,257
Interest receivable	22,637,365
Other assets	47,168
Total assets	1,696,919,668
Liabilities
Payable for investments purchased	1,000,313
Payable for investments purchased — when-issued security	34,887,998
Payable for Fund shares redeemed	962,203
Payable for floating rate notes issued	95,759,629
Distributions payable	1,246,366
Accrued management fee	443,289
Accrued Trustees' fees	28,917
Other accrued expenses and payables	1,381,469
Total liabilities	135,710,184
Net assets, at value	$ 1,561,209,484
Net Assets Consist of
Undistributed net investment income	2,697,874
Net unrealized appreciation (depreciation) on investments	145,877,750
Accumulated net realized gain (loss)	(122,111,945)
Paid-in capital	1,534,745,805
Net assets, at value	$ 1,561,209,484

The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities as of May 31, 2016 (continued)
Net Asset Value
Class A Net Asset Value and redemption price per share ($361,252,465 ÷ 28,703,029 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 12.59
Maximum offering price per share (100 ÷ 97.25 of $12.59)	$ 12.95
Class C Net Asset Value offering and redemption price (subject to contingent deferred sales charge) per share ($138,024,845 ÷ 10,960,081 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 12.59
Class S Net Asset Value offering and redemption price per share ($873,427,362 ÷ 69,334,984 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 12.60
Institutional Class Net Asset Value offering and redemption price per share ($188,504,812 ÷ 14,959,340 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$ 12.60

The accompanying notes are an integral part of the financial statements.

Statement of Operations

for the year ended May 31, 2016
Investment Income
Income: Interest	$ 82,342,271
Expenses: Management fee	6,820,825
Administration fee	1,510,911
Services to shareholders	2,033,682
Distribution and service fees	2,277,465
Custodian fee	20,501
Professional fees	129,000
Reports to shareholders	80,027
Registration fees	92,135
Trustees' fees and expenses	62,949
Interest expense and fees on floating rate notes issued	572,029
Other	115,231
Total expenses before expense reductions	13,714,755
Expense reductions	(1,420,719)
Total expenses after expense reductions	12,294,036
Net investment income	70,048,235
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from investments	20,385,005
Change in net unrealized appreciation (depreciation) on investments	1,229,038
Net gain (loss)	21,614,043
Net increase (decrease) in net assets resulting from operations	$ 91,662,278

The accompanying notes are an integral part of the financial statements.

Statement of Cash Flows

for the year ended May 31, 2016
Increase (Decrease) in Cash: Cash Flows from Operating Activities
Net increase (decrease) in net assets resulting from operations	$ 91,662,278
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided (used) by operating activities: Purchases of long-term investments	(572,752,739)
Net amortization of premium/(accretion of discount)	1,052,205
Proceeds from sales and maturities of long-term investments	688,882,219
(Increase) decrease in interest receivable	3,093,122
(Increase) decrease in other assets	3,719
(Increase) decrease in payable for investments purchased	1,000,313
Increase (decrease) in payable for investments purchased — when-issued securities	33,780,645
Increase (decrease) in other accrued expenses and payables	(162,420)
Change in unrealized (appreciation) depreciation on investments	(1,229,038)
Net realized (gain) loss from investments	(20,385,005)
Cash provided (used) by operating activities	224,945,299
Cash Flows from Financing Activities
Proceeds from shares sold	347,320,715
Payments for shares redeemed	(521,177,429)
Distributions paid (net of reinvestment of distributions)	(8,836,315)
Increase (decrease) in payable for floating rate notes issued	(40,579,941)
Cash provided (used) by financing activities	(223,272,970)
Increase (decrease) in cash	1,672,329
Cash at beginning of period	329,547
Cash at end of period	$ 2,001,876
Supplemental Disclosure of Non-Cash Activities
Reinvestment of distributions	$ 60,571,116
Interest expense and fees on floating rate notes issued	$ (572,029)

The accompanying notes are an integral part of the financial statements.

Statement of Changes in Net Assets

Increase (Decrease) in Net Assets	Years Ended May 31,
	2016	2015
Operations: Net investment income	$ 70,048,235	$ 82,056,615
Net realized gain (loss)	20,385,005	(11,702,648)
Change in net unrealized appreciation (depreciation)	1,229,038	(2,674,223)
Net increase (decrease) in net assets resulting from operations	91,662,278	67,679,744
Distributions to shareholders from: Net investment income: Class A	(16,036,470)	(17,520,360)
Class B	(13,570)*	(74,803)
Class C	(5,154,327)	(5,394,549)
Class S	(37,933,145)	(42,040,320)
Institutional Class	(9,443,121)	(15,073,278)
Net realized gains: Class A	(204,668)	—
Class B	(146)*	—
Class C	(79,382)	—
Class S	(453,899)	—
Institutional Class	(102,412)	—
Total distributions	(69,421,140)	(80,103,310)
Fund share transactions: Proceeds from shares sold	352,035,642	340,917,065
Reinvestment of distributions	60,571,116	70,628,607
Payments for shares redeemed	(520,235,067)	(549,187,103)
Net increase (decrease) in net assets from Fund share transactions	(107,628,309)	(137,641,431)
Increase (decrease) in net assets	(85,387,171)	(150,064,997)
Net assets at beginning of year	1,646,596,655	1,796,661,652
Net assets at end of year (including undistributed net investment income of $2,697,874 and $1,992,688, respectively)	$ 1,561,209,484	$ 1,646,596,655

^* For the period from June 1, 2015 to February 10, 2016 (see Note A).

The accompanying notes are an integral part of the financial statements.

Financial Highlights

Class A	Years Ended May 31,
	2016	2015	2014	2013	2012
Selected Per Share Data
Net asset value, beginning of period	$ 12.39	$ 12.49	$ 12.95	$ 12.78	$ 11.78
Income from investment operations: Net investment income	.56	.56	.60	.55	.59
Net realized and unrealized gain (loss)	.20	(.11)	(.47)	.16	1.00
Total from investment operations	.76	.45	.13	.71	1.59
Less distributions from: Net investment income	(.55)	(.55)	(.59)	(.54)	(.59)
Net realized gains	(.01)	—	—	—	(.00)*
Total distributions	(.56)	(.55)	(.59)	(.54)	(.59)
Net asset value, end of period	$ 12.59	$ 12.39	$ 12.49	$ 12.95	$ 12.78
Total Return (%)a,b	6.27	3.65	1.27	5.57	13.88
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	361	378	447	618	569
Ratio of expenses before expense reductions (including interest expense) (%)c	.97	1.00	1.05	1.03	1.03
Ratio of expenses after expense reductions (including interest expense) (%)c	.91	.93	.95	.97	.99
Ratio of expenses after expense reductions (excluding interest expense) (%)	.87	.87	.88	.91	.92
Ratio of net investment income (%)	4.54	4.51	4.94	4.18	4.92
Portfolio turnover rate (%)	36	29	24	21	29
a Total return does not reflect the effect of any sales charges. b Total return would have been lower had certain expenses not been reduced. c Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

Class C	Years Ended May 31,
	2016	2015	2014	2013	2012
Selected Per Share Data
Net asset value, beginning of period	$ 12.40	$ 12.50	$ 12.96	$ 12.79	$ 11.79
Income from investment operations: Net investment income	.47	.47	.51	.45	.50
Net realized and unrealized gain (loss)	.19	(.12)	(.47)	.16	1.00
Total from investment operations	.66	.35	.04	.61	1.50
Less distributions from: Net investment income	(.46)	(.45)	(.50)	(.44)	(.50)
Net realized gains	(.01)	—	—	—	(.00)*
Total distributions	(.47)	(.45)	(.50)	(.44)	(.50)
Net asset value, end of period	$ 12.59	$ 12.40	$ 12.50	$ 12.96	$ 12.79
Total Return (%)a,b	5.40	2.88	.52	4.78	13.03
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	138	144	148	202	188
Ratio of expenses before expense reductions (including interest expense) (%)c	1.73	1.76	1.80	1.78	1.77
Ratio of expenses after expense reductions (including interest expense) (%)c	1.66	1.68	1.70	1.72	1.74
Ratio of expenses after expense reductions (excluding interest expense) (%)	1.62	1.62	1.63	1.66	1.67
Ratio of net investment income (%)	3.79	3.76	4.19	3.43	4.16
Portfolio turnover rate (%)	36	29	24	21	29
a Total return does not reflect the effect of any sales charges. b Total return would have been lower had certain expenses not been reduced. c Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

Class S	Years Ended May 31,
	2016	2015	2014	2013	2012
Selected Per Share Data
Net asset value, beginning of period	$ 12.40	$ 12.50	$ 12.96	$ 12.79	$ 11.79
Income from investment operations: Net investment income	.59	.59	.63	.58	.62
Net realized and unrealized gain (loss)	.20	(.11)	(.47)	.16	1.00
Total from investment operations	.79	.48	.16	.74	1.62
Less distributions from: Net investment income	(.58)	(.58)	(.62)	(.57)	(.62)
Net realized gains	(.01)	—	—	—	(.00)*
Total distributions	(.59)	(.58)	(.62)	(.57)	(.62)
Net asset value, end of period	$ 12.60	$ 12.40	$ 12.50	$ 12.96	$ 12.79
Total Return (%)a	6.54	3.91	1.53	5.83	14.15
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	873	824	884	1,128	1,023
Ratio of expenses before expense reductions (including interest expense) (%)b	.78	.83	.92	.89	.90
Ratio of expenses after expense reductions (including interest expense) (%)b	.66	.68	.70	.72	.74
Ratio of expenses after expense reductions (excluding interest expense) (%)	.62	.62	.63	.66	.67
Ratio of net investment income (%)	4.79	4.76	5.20	4.43	5.17
Portfolio turnover rate (%)	36	29	24	21	29
a Total return would have been lower had certain expenses not been reduced. b Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

Institutional Class	Years Ended May 31,
	2016	2015	2014	2013	2012
Selected Per Share Data
Net asset value, beginning of period	$ 12.40	$ 12.50	$ 12.97	$ 12.79	$ 11.79
Income from investment operations: Net investment income	.59	.59	.63	.58	.63
Net realized and unrealized gain (loss)	.20	(.11)	(.48)	.17	1.00
Total from investment operations	.79	.48	.15	.75	1.63
Less distributions from: Net investment income	(.58)	(.58)	(.62)	(.57)	(.63)
Net realized gains	(.01)	—	—	—	(.00)*
Total distributions	(.59)	(.58)	(.62)	(.57)	(.63)
Net asset value, end of period	$ 12.60	$ 12.40	$ 12.50	$ 12.97	$ 12.79
Total Return (%)a	6.51	3.91	1.45	5.93	14.17
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)	189	298	315	301	220
Ratio of expenses before expense reductions (including interest expense) (%)b	.75	.75	.81	.79	.79
Ratio of expenses after expense reductions (including interest expense) (%)b	.66	.68	.70	.71	.74
Ratio of expenses after expense reductions (excluding interest expense) (%)	.62	.62	.63	.65	.67
Ratio of net investment income (%)	4.80	4.76	5.20	4.44	5.16
Portfolio turnover rate (%)	36	29	24	21	29
a Total return would have been lower had certain expenses not been reduced. b Interest expense represents interest and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Amount is less than $.005.

Notes to Financial Statements

A. Organization and Significant Accounting Policies

Deutsche Strategic High Yield Tax-Free Fund (the "Fund") is a diversified series of Deutsche Municipal Trust (the "Series"), which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.

The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are subject to an initial sales charge. Class B shares automatically converted to Class A shares on February 10, 2016 and are no longer offered. Class B shares were not subject to an initial sales charge and were subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class C shares are not subject to an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Class C shares do not automatically convert into another class. Class S shares are not subject to initial or contingent deferred sales charges and are only available to a limited group of investors. Institutional Class shares are not subject to initial or contingent deferred sales charges and are generally available only to qualified institutions.

Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as distribution and service fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.

The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. 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.

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 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 Offer 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 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" in the Statement of Operations. The weighted average outstanding daily balance of the floating rate notes issued during the year ended May 31, 2016 was approximately $89,792,000, with a weighted average interest rate of 0.64%.

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.

The final rules implementing Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Volcker Rule") preclude banking entities from sponsoring and/or providing services to TOB Trusts. In response to these rules, investment market participants have developed and are developing new TOB Trust structures that are designed to ensure that banking entities do not sponsor TOB Trusts in violation of the Volcker Rule. The Fund currently participates in a number of pre-2014 TOB Trusts (each, a "Legacy TOB Trust") that will need to be restructured to conform to Volcker Rule requirements by the applicable compliance date, currently expected to be July 17, 2017, or unwound. Any new TOB Trust structures must currently comply with the Volcker Rule. Accordingly, to the extent the Fund wishes to restructure a Legacy TOB Trust or create a new TOB Trust, it must do so in a Volcker-compliant manner. A Volcker-compliant TOB Trust structure is substantially similar to traditional TOB Trust structures. The ultimate impact of the new rules on the inverse floater market and the municipal market generally is not yet certain. Such changes could make early unwinds of TOB Trusts more likely in adverse market scenarios, may make the use of TOB Trusts more expensive, and may make it more difficult to use TOB Trusts in general. The new rules may also expose the Fund to additional risks, including, but not limited to, compliance, securities law and operational risks.

When-Issued/Delayed Delivery Securities. The Fund may purchase securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded and the value of the transaction is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations. At the time the Fund enters into a purchase transaction, it is required to segregate cash or other liquid assets at least equal to the amount of the commitment.

Certain risks may arise upon entering into when-issued or delayed delivery transaction from the potential inability of counterparties to meet the terms of their contracts or if the issuer does not issue the securities due to political, economic, or other factors. Additionally, losses may arise due to changes in the value of the underlying securities.

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.

Under the Regulated Investment Company Modernization Act of 2010, net capital losses incurred post-enactment may be carried forward indefinitely, and their character is retained as short-term and/or long-term. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

At May 31, 2016, the Fund had net tax basis capital loss carryforwards of approximately $128,449,000, including $26,412,000 of pre-enactment losses, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until May 31, 2017 ($3,436,000), May 31, 2018 ($19,508,000) and May 31, 2019 ($3,468,000), the respective expiration dates, whichever occurs first; and approximately $102,037,000 of post-enactment losses, which may be applied against realized net taxable capital gains indefinitely, including short-term losses ($69,585,000) and long-term losses ($32,452,000).

The Fund has reviewed the tax positions for the open tax years as of May 31, 2016 and has determined that no provision for income tax and/or uncertain tax provisions 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.

Distribution of Income and Gains. Net investment income of the Fund is declared as a daily dividend and is 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 investments in inverse floaters transactions, certain securities sold at a loss 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.

At May 31, 2016, the Fund's components of distributable earnings (accumulated losses) on a tax basis were as follows:

Undistributed tax-exempt income	$ 3,448,243
Undistributed ordinary income*	$ 976,346
Capital loss carryforwards	$ (128,449,000)
Net unrealized appreciation (depreciation) on investments	$ 151,015,009

In addition, the tax character of distributions paid to shareholders by the Fund is summarized as follows:

	Years Ended May 31,
	2016	2015
Distributions from tax-exempt income	$ 68,580,633	$ 80,103,310
Distributions from ordinary income*	$ 840,507	$ —

* For tax purposes, short-term capital gain distributions are considered ordinary income distributions.

Expenses. Expenses of the Series arising in connection with a specific fund are allocated to that fund. Other Series expenses which cannot be directly attributed to a fund are apportioned among the funds in the Series based upon the relative net assets or other appropriate measures.

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.

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, 2016.

B. Purchases and Sales of Securities

During the year ended May 31, 2016, purchases and sales of investment securities (excluding short-term investments) aggregated $572,752,739 and $688,882,219, respectively.

C. Related Parties

Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, 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.

Under the Investment Management Agreement with the Advisor, the Fund pays a monthly management fee based on the Fund's average daily net assets, computed and accrued daily and payable monthly, at the following annual rates:

First $300 million of the Fund's average daily net assets	.515%
Next $200 million of such net assets	.465%
Next $500 million of such net assets	.440%
Next $1 billion of such net assets	.420%
Over $2 billion of such net assets	.400%

Accordingly, for the year ended May 31, 2016, the fee pursuant to the Investment Management Agreement was equivalent to an annual rate (exclusive of any applicable waivers/reimbursements) of 0.45% of the Fund's average daily net assets.

For the period from June 1, 2015 through September 30, 2015, the Advisor had contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the total annual operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of each class as follows:

Class A	.88%
Class B	1.63%
Class C	1.63%
Class S	.63%
Institutional Class	.63%

Effective October 1, 2015 through September 30, 2016 (through February 10, 2016 for Class B shares), the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the total annual operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of certain classes as follows:

Class A	.87%
Class B	1.62%
Class C	1.62%
Class S	.62%
Institutional Class	.62%

For the year ended May 31, 2016 (through February 10, 2016 for Class B shares), fees waived and/or expenses reimbursed for each class are as follows:

Class A	$ 192,656
Class B	415
Class C	93,578
Class S	970,171
Institutional Class	163,899
	$ 1,420,719

Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the year ended May 31, 2016, the Administration Fee was $1,510,911, of which $130,394 is unpaid.

Service Provider Fees. Deutsche AM 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 year ended May 31, 2016 (through February 10, 2016 for Class B shares), the amounts charged to the Fund by DSC were as follows:

Services to Shareholders	Total Aggregated	Unpaid at May 31, 2016
Class A	$ 19,093	$ 4,705
Class B	232	27
Class C	6,380	1,582
Class S	98,476	24,302
Institutional Class	5,623	1,356
	$ 129,804	$ 31,972

Distribution and Service Fees. Under the Fund's Class B and Class C 12b-1 Plans, Deutsche AM Distributors, Inc. ("DDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of each of Class B and C shares. In accordance with the Fund's Underwriting and Distribution Services Agreement, DDI enters into related selling group agreements with various firms at various rates for sales of Class B and C shares. For the year ended May 31, 2016 (through February 10, 2016 for Class B shares), the Distribution Fee was as follows:

Distribution Fee	Total Aggregated	Unpaid at May 31, 2016
Class B	$ 2,698	$ —
Class C	1,047,239	87,955
	$ 1,049,937	$ 87,955

In addition, DDI provides information and administrative services for a fee ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. DDI in turn has various agreements with financial services firms that provide these services and pay these fees based upon the assets of shareholder accounts the firms service. For the year ended May 31, 2016 (through February 10, 2016 for Class B shares), the Service Fee was as follows:

Service Fee	Total Aggregated	Unpaid at May 31, 2016	Annual Rate
Class A	$ 877,677	$ 227,442	.24%
Class B	888	20	.25%
Class C	348,963	88,222	.25%
	$ 1,227,528	$ 315,684

Underwriting Agreement and Contingent Deferred Sales Charge. DDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A shares for the year ended May 31, 2016 aggregated $18,492.

In addition, DDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates, ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the year ended May 31, 2016 (through February 10, 2016 for Class B shares), the CDSC for Class B and Class C shares aggregated $902 and $10,180, respectively. A deferred sales charge of up to 0.50% is assessed on certain redemptions of Class A shares. For the year ended May 31, 2016, DDI received $4,868 for Class A shares.

Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the year ended May 31, 2016, the amount charged to the Fund by DIMA included in the Statement of Operations under "Reports to shareholders" aggregated $22,182, of which $10,461 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 Vice 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 year ended May 31, 2016, the Fund engaged in securities purchases of $244,350,000 and securities sales of $163,695,000 with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act.

D. Investing in High-Yield Debt Securities

High-yield debt securities or junk bonds are generally regarded as speculative with respect to the issuer’s continuing ability to meet principal and interest payments. The Fund’s performance could be hurt if an issuer of a debt security suffers an adverse change in financial condition that results in the issuer not making timely payments of interest or principal, a security downgrade or an inability to meet a financial obligation. High-yield debt securities’ total return and yield may generally be expected to fluctuate more than the total return and yield of investment-grade debt securities. A real or perceived economic downturn or an increase in market interest rates could cause a decline in the value of high-yield debt securities, result in increased redemptions and/or result in increased portfolio turnover, which could result in a decline in net asset value of the fund, reduce liquidity for certain investments and/or increase costs. High-yield debt securities are often thinly traded and can be more difficult to sell and value accurately than investment-grade debt securities as there may be no established secondary market. Investments in high yield debt securities could increase liquidity risk for the fund. In addition, the market for high-yield debt securities can experience sudden and sharp volatility which is generally associated more with investments in stocks.

E. Line of Credit

The Fund and other affiliated funds (the "Participants") share in a $400 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus if the one-month LIBOR exceeds the Federal Funds Rate, the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement. The Fund had no outstanding loans at May 31, 2016.

F. Share Transactions

The following table summarizes share and dollar activity in the Fund:

	Year Ended May 31, 2016		Year Ended May 31, 2015
	Shares	Dollars	Shares	Dollars
Shares sold
Class A	3,657,933	$ 45,347,761	5,450,595	$ 68,035,164
Class B	3*	37*	308	3,893
Class C	1,132,728	14,055,512	1,549,563	19,337,710
Class S	15,645,737	194,795,022	16,656,926	207,692,529
Institutional Class	7,925,912	97,837,310	3,686,605	45,847,769
		$ 352,035,642		$ 340,917,065
Shares issued to shareholders in reinvestment of distributions
Class A	1,170,071	$ 14,495,074	1,238,090	$ 15,453,986
Class B	991*	12,209*	5,089	63,521
Class C	326,286	4,043,935	337,277	4,212,983
Class S	2,619,769	32,484,030	2,873,260	35,911,247
Institutional Class	769,321	9,535,868	1,198,718	14,986,870
		$ 60,571,116		$ 70,628,607
Shares redeemed
Class A	(6,659,391)	$ (82,343,541)	(11,973,473)	$ (148,899,579)
Class B	(92,736)*	(1,141,917)*	(135,943)	(1,696,087)
Class C	(2,153,347)	(26,702,865)	(2,057,779)	(25,697,628)
Class S	(15,399,994)	(190,700,564)	(23,750,264)	(297,697,648)
Institutional Class	(17,790,179)	(219,346,180)	(6,016,844)	(75,196,161)
		$ (520,235,067)		$ (549,187,103)
Net increase (decrease)
Class A	(1,831,387)	$ (22,500,706)	(5,284,788)	$ (65,410,429)
Class B	(91,742)*	(1,129,671)*	(130,546)	(1,628,673)
Class C	(694,333)	(8,603,418)	(170,939)	(2,146,935)
Class S	2,865,512	36,578,488	(4,220,078)	(54,093,872)
Institutional Class	(9,094,946)	(111,973,002)	(1,131,521)	(14,361,522)
		$ (107,628,309)		$ (137,641,431)

* For the period from June 1, 2015 to February 10, 2016 (see Note A).

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Deutsche Municipal Trust and the Shareholders of Deutsche Strategic High Yield Tax-Free Fund:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations, of cash flows and of changes in net assets and the financial highlights, present fairly, in all material respects, the financial position of Deutsche Strategic High Yield Tax-Free Fund (the "Fund") at May 31, 2016, and the results of its operations and its cash flows, the changes in its net assets and the financial highlights for each of the periods therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2016 by correspondence with the custodian and brokers and the application of alternative auditing procedures where such confirmations had not been received, provide a reasonable basis for our opinion.

Boston, Massachusetts
July 26, 2016 PricewaterhouseCoopers LLP

Information About Your Fund's Expenses

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads) and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (December 1, 2015 to May 31, 2016).

The tables illustrate your Fund's expenses in two ways:

—Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.

—Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. Subject to certain exceptions, an account maintenance fee of $20.00 assessed once per calendar year for Classes A, C and S shares may apply for accounts with balances less than $10,000. This fee is not included in these tables. If it was, the estimate of expenses paid for Classes A, C and S shares during the period would be higher, and account value during the period would be lower, by this amount.

Expenses and Value of a $1,000 Investment for the six months ended May 31, 2016 (Unaudited)
Actual Fund Return	Class A	Class C	Class S	Institutional Class
Beginning Account Value 12/1/15	$ 1,000.00	$ 1,000.00	$ 1,000.00	$ 1,000.00
Ending Account Value 5/31/16	$ 1,042.40	$ 1,038.50	$ 1,043.73	$ 1,043.70
Expenses Paid per $1,000*	$ 4.65	$ 8.46	$ 3.37	$ 3.37
Hypothetical 5% Fund Return	Class A	Class C	Class S	Institutional Class
Beginning Account Value 12/1/15	$ 1,000.00	$ 1,000.00	$ 1,000.00	$ 1,000.00
Ending Account Value 5/31/16	$ 1,020.45	$ 1,016.70	$ 1,021.70	$ 1,021.70
Expenses Paid per $1,000*	$ 4.60	$ 8.37	$ 3.34	$ 3.34

* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by 183 (the number of days in the most recent six-month period), then divided by 366.

Annualized Expense Ratios	Class A	Class C	Class S	Institutional Class
Deutsche Strategic High Yield Tax-Free Fund†	.91%	1.66%	.66%	.66%

^† Includes interest expense and fees on short-term floating rate notes issued in conjunction with inverse floating rate securities of 0.04% for each class.

For more information, please refer to the Fund's prospectus.

For an analysis of the fees associated with an investment in the Fund or similar funds, please refer to http://apps.finra.org/fundanalyzer/1/fa.aspx.

Tax Information (Unaudited)

Of the dividends paid from net investment income for the taxable year ended May 31, 2016, 100% are designated as exempt interest dividends for federal income tax purposes.

Please consult a tax advisor if you have questions about federal or state income tax laws, or on how to prepare your tax returns. If you have specific questions about your account, please call (800) 728-3337.

Advisory Agreement Board Considerations and Fee Evaluation

The Board of Trustees approved the renewal of Deutsche Strategic High Yield Tax-Free Fund’s investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA") in September 2015.

In terms of the process that the Board followed prior to approving the Agreement, shareholders should know that:

— In September 2015, all of the Fund’s Trustees were independent of DIMA and its affiliates.

— The Trustees met frequently during the past year to discuss fund matters and dedicated a substantial amount of time to contract review matters. Over the course of several months, the Board’s Contract Committee reviewed comprehensive materials received from DIMA, independent third parties and independent counsel. These materials included an analysis of the Fund’s performance, fees and expenses, and profitability from a fee consultant retained by the Fund’s Independent Trustees (the "Fee Consultant"). The Board also received extensive information throughout the year regarding performance of the Fund.

— The Independent Trustees regularly meet privately with counsel to discuss contract review and other matters. In addition, the Independent Trustees were advised by the Fee Consultant in the course of their review of the Fund’s contractual arrangements and considered a comprehensive report prepared by the Fee Consultant in connection with their deliberations.

— In connection with reviewing the Agreement, the Board also reviewed the terms of the Fund’s Rule 12b-1 plan, distribution agreement, administrative services agreement, transfer agency agreement and other material service agreements.

— Based on its evaluation of the information provided, the Contract Committee presented its findings and recommendations to the Board. The Board then reviewed the Contract Committee’s findings and recommendations.

In connection with the contract review process, the Contract Committee and the Board considered the factors discussed below, among others. The Board also considered that DIMA and its predecessors have managed the Fund since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Fund. The Board considered, generally, that shareholders chose to invest or remain invested in the Fund knowing that DIMA managed the Fund, and that the Agreement was approved by the Fund's shareholders. DIMA is part of Deutsche Bank AG’s ("Deutsche Bank") Asset and Wealth Management ("Deutsche AWM") division. Deutsche AWM is a global asset management business that offers a wide range of investing expertise and resources, including research capabilities in many countries throughout the world. Deutsche Bank has advised the Independent Trustees that the U.S. asset management business continues to be a critical and integral part of Deutsche Bank, and that Deutsche Bank will continue to make significant investments in Deutsche AWM, including ongoing enhancements to Deutsche AWM’s investment platform. Deutsche Bank also has confirmed its commitment to maintaining strong legal and compliance groups within the Deutsche AWM division.

As part of the contract review process, the Board carefully considered the fees and expenses of each Deutsche fund overseen by the Board in light of the fund’s performance. In many cases, this led to the negotiation and implementation of expense caps. As part of these negotiations, the Board indicated that it would consider relaxing these caps in future years following sustained improvements in performance, among other considerations.

While shareholders may focus primarily on fund performance and fees, the Fund’s Board considers these and many other factors, including the quality and integrity of DIMA’s personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.

Nature, Quality and Extent of Services. The Board considered the terms of the Agreement, including the scope of advisory services provided under the Agreement. The Board noted that, under the Agreement, DIMA provides portfolio management services to the Fund and that, pursuant to a separate administrative services agreement, DIMA provides administrative services to the Fund. The Board considered the experience and skills of senior management and investment personnel, the resources made available to such personnel, the ability of DIMA to attract and retain high-quality personnel, and the organizational depth and stability of DIMA. The Board reviewed the Fund’s performance over short-term and long-term periods and compared those returns to various agreed-upon performance measures, including market index(es) and a peer universe compiled using information supplied by Morningstar Direct ("Morningstar"), an independent fund data service. The Board also noted that it has put into place a process of identifying "Focus Funds" (e.g., funds performing poorly relative to a peer universe), and receives additional reporting from DIMA regarding such funds and, where appropriate, DIMA’s plans to address underperformance. The Board believes this process is an effective manner of identifying and addressing underperforming funds. Based on the information provided, the Board noted that for the one-, three- and five-year periods ended December 31, 2014, the Fund’s performance (Class A shares) was in the 4th quartile of the applicable Morningstar universe (the 1st quartile being the best performers and the 4th quartile being the worst performers). The Board also observed that the Fund has outperformed its benchmark in the one-, three- and five-year periods ended December 31, 2014. The Board noted the disappointing investment performance of the Fund in recent periods and continued to discuss with senior management of DIMA the factors contributing to such underperformance and actions being taken to improve performance. The Board recognized the efforts by DIMA in recent years to enhance its investment platform and improve long-term performance across the Deutsche fund complex.

Fees and Expenses. The Board considered the Fund’s investment management fee schedule, operating expenses and total expense ratios, and comparative information provided by Lipper Inc. ("Lipper") and the Fee Consultant regarding investment management fee rates paid to other investment advisors by similar funds (1st quartile being the most favorable and 4th quartile being the least favorable). With respect to management fees paid to other investment advisors by similar funds, the Board noted that the contractual fee rates paid by the Fund, which include a 0.10% fee paid to DIMA under the Fund’s administrative services agreement, were higher than the median (4th quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2014). The Board noted that the Fund’s Class A shares total (net) operating expenses (excluding 12b-1 fees) were expected to be lower than the median (2nd quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2014, and analyzing Lipper expense universe Class A (net) expenses less any applicable 12b-1 fees) ("Lipper Universe Expenses"). The Board also reviewed data comparing each share class’s total (net) operating expenses to the applicable Lipper Universe Expenses. The Board noted that the expense limitations agreed to by DIMA were expected to help the Fund’s total (net) operating expenses remain competitive. The Board noted that, in connection with the 2014 contract renewal process, DIMA agreed to reduce the Fund’s contractual management fee rate by 0.05% and make corresponding adjustments to each management fee breakpoint. The Board considered the Fund’s management fee rate as compared to fees charged by DIMA to comparable Deutsche U.S. registered funds ("Deutsche Funds") and considered differences between the Fund and the comparable Deutsche Funds. The information requested by the Board as part of its review of fees and expenses also included information about institutional accounts (including any sub-advised funds and accounts) and funds offered primarily to European investors ("Deutsche Europe funds") managed by Deutsche AWM. The Board noted that DIMA indicated that Deutsche AWM does not manage any institutional accounts or Deutsche Europe funds comparable to the Fund.

On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by DIMA.

Profitability. The Board reviewed detailed information regarding revenues received by DIMA under the Agreement. The Board considered the estimated costs and pre-tax profits realized by DIMA from advising the Deutsche Funds, as well as estimates of the pre-tax profits attributable to managing the Fund in particular. The Board also received information regarding the estimated enterprise-wide profitability of DIMA and its affiliates with respect to all fund services in totality and by fund. The Board and the Fee Consultant reviewed DIMA’s methodology in allocating its costs to the management of the Fund. Based on the information provided, the Board concluded that the pre-tax profits realized by DIMA in connection with the management of the Fund were not unreasonable. The Board also reviewed certain publicly available information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DIMA and its affiliates’ overall profitability with respect to the Deutsche Funds (after taking into account distribution and other services provided to the funds by DIMA and its affiliates) was lower than the overall profitability levels of most comparable firms for which such data was available.

Economies of Scale. The Board considered whether there are economies of scale with respect to the management of the Fund and whether the Fund benefits from any economies of scale. The Board noted that the Fund’s investment management fee schedule includes fee breakpoints. The Board concluded that the Fund’s fee schedule represents an appropriate sharing between the Fund and DIMA of such economies of scale as may exist in the management of the Fund at current asset levels.

Other Benefits to DIMA and Its Affiliates. The Board also considered the character and amount of other incidental benefits received by DIMA and its affiliates, including any fees received by DIMA for administrative services provided to the Fund and any fees received by an affiliate of DIMA for distribution services. The Board also considered benefits to DIMA related to brokerage and soft-dollar allocations, including allocating brokerage to pay for research generated by parties other than the executing broker dealers, which pertain primarily to funds investing in equity securities, along with the incidental public relations benefits to DIMA related to Deutsche Funds advertising and cross-selling opportunities among DIMA products and services. The Board considered these benefits in reaching its conclusion that the Fund’s management fees were reasonable.

Compliance. The Board considered the significant attention and resources dedicated by DIMA to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of the individual serving as DIMA’s and the Fund’s chief compliance officer; (ii) the large number of DIMA compliance personnel; and (iii) the substantial commitment of resources by DIMA and its affiliates to compliance matters.

Based on all of the information considered and the conclusions reached, the Board unanimously determined that the continuation of the Agreement is in the best interests of the Fund. In making this determination, the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, certain of which were in executive session with only the Independent Trustees and counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the Agreement.

Board Members and Officers

The following table presents certain information regarding the Board Members and Officers of the fund. Each Board Member's year of birth is set forth in parentheses after his or her name. Unless otherwise noted, (i) each Board Member has engaged in the principal occupation(s) noted in the table for at least the most recent five years, although not necessarily in the same capacity; and (ii) the address of each Independent Board Member is c/o Kenneth C. Froewiss, Chairman, Deutsche Mutual Funds, P.O. Box 390601, Cambridge, MA 02139. Except as otherwise noted below, the term of office for each Board Member is until the election and qualification of a successor, or until such Board Member sooner dies, resigns, is removed or as otherwise provided in the governing documents of the fund. Because the fund does not hold an annual meeting of shareholders, each Board Member will hold office for an indeterminate period. The Board Members may also serve in similar capacities with other funds in the fund complex.

Independent Board Members
Name, Year of Birth, Position with the Fund and Length of Time Served1	Business Experience and Directorships During the Past Five Years	Number of Funds in Deutsche Fund Complex Overseen	Other Directorships Held by Board Member
Kenneth C. Froewiss (1945) Chairperson since 2013, and Board Member since 2001	Retired Clinical Professor of Finance, NYU Stern School of Business (1997–2014); Member, Finance Committee, Association for Asian Studies (2002–present); Director, Mitsui Sumitomo Insurance Group (US) (2004–present); prior thereto, Managing Director, J.P. Morgan (investment banking firm) (until 1996)	103	—
William McClayton (1944) Vice Chairperson since 2013, and Board Member since 2004	Private equity investor (since October 2009); previously, Managing Director, Diamond Management & Technology Consultants, Inc. (global consulting firm) (2001–2009); Directorship: Board of Managers, YMCA of Metropolitan Chicago; formerly: Senior Partner, Arthur Andersen LLP (accounting) (1966–2001); Trustee, Ravinia Festival	103	—
John W. Ballantine (1946) Board Member since 1999	Retired; formerly, Executive Vice President and Chief Risk Management Officer, First Chicago NBD Corporation/The First National Bank of Chicago (1996–1998); Executive Vice President and Head of International Banking (1995–1996); former Directorships: Director and former Chairman of the Board, Healthways, Inc.2 (population well-being and wellness services) (2003–2014); Stockwell Capital Investments PLC (private equity); First Oak Brook Bancshares, Inc. and Oak Brook Bank; Prisma Energy International	103	Portland General Electric2 (utility company) (2003– present)
Henry P. Becton, Jr. (1943) Board Member since 1990	Vice Chair and former President, WGBH Educational Foundation. Directorships: Public Radio International; Public Radio Exchange (PRX); former Directorships: Becton Dickinson and Company2 (medical technology company); Belo Corporation2 (media company); The PBS Foundation; Association of Public Television Stations; Boston Museum of Science; American Public Television; Concord Academy; New England Aquarium; Mass. Corporation for Educational Telecommunications; Committee for Economic Development; Public Broadcasting Service; Connecticut College; North Bennett Street School (Boston)	103	—
Dawn-Marie Driscoll (1946) Board Member since 1987	Emeritus Executive Fellow, Center for Business Ethics, Bentley University; formerly: President, Driscoll Associates (consulting firm); Partner, Palmer & Dodge (law firm) (1988–1990); Vice President of Corporate Affairs and General Counsel, Filene's (retail) (1978–1988). Directorships: Advisory Board, Center for Business Ethics, Bentley University; Trustee and former Chairman of the Board, Southwest Florida Community Foundation (charitable organization); former Directorships: ICI Mutual Insurance Company (2007–2015); Sun Capital Advisers Trust (mutual funds) (2007–2012), Investment Company Institute (audit, executive, nominating committees) and Independent Directors Council (governance, executive committees)	103	—
Keith R. Fox, CFA (1954) Board Member since 1996	Managing General Partner, Exeter Capital Partners (a series of private investment funds) (since 1986). Directorships: Progressive International Corporation (kitchen goods importer and distributor); The Kennel Shop (retailer); former Chairman, National Association of Small Business Investment Companies; former Directorships: BoxTop Media Inc. (advertising); Sun Capital Advisers Trust (mutual funds) (2011–2012)	103	—
Paul K. Freeman (1950) Board Member since 1993	Consultant, World Bank/Inter-American Development Bank; Chair, Independent Directors Council; Investment Company Institute (executive and nominating committees); formerly, Chairman of Education Committee of Independent Directors Council; Project Leader, International Institute for Applied Systems Analysis (1998–2001); Chief Executive Officer, The Eric Group, Inc. (environmental insurance) (1986–1998); Directorships: Denver Zoo Foundation (December 2012–present); former Directorships: Prisma Energy International	103	—
Richard J. Herring (1946) Board Member since 1990	Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania (since July 1972); Co-Director, Wharton Financial Institutions Center; formerly: Vice Dean and Director, Wharton Undergraduate Division (July 1995–June 2000); Director, Lauder Institute of International Management Studies (July 2000–June 2006)	103	Director, Aberdeen Singapore and Japan Funds (since 2007); Independent Director of Barclays Bank Delaware (since September 2010)
Rebecca W. Rimel (1951) Board Member since 1995	President, Chief Executive Officer and Director, The Pew Charitable Trusts (charitable organization) (1994 to present); formerly: Executive Vice President, The Glenmede Trust Company (investment trust and wealth management) (1983–2004); Board Member, Investor Education (charitable organization) (2004–2005); Trustee, Executive Committee, Philadelphia Chamber of Commerce (2001–2007); Director, Viasys Health Care2 (January 2007–June 2007); Trustee, Thomas Jefferson Foundation (charitable organization) (1994–2012)	103	Director, Becton Dickinson and Company2 (medical technology company) (2012– present); Director, BioTelemetry Inc.2 (health care) (2009– present)
William N. Searcy, Jr. (1946) Board Member since 1993	Private investor since October 2003; formerly: Pension & Savings Trust Officer, Sprint Corporation2 (telecommunications) (November 1989–September 2003); Trustee, Sun Capital Advisers Trust (mutual funds) (1998–2012)	103	—
Jean Gleason Stromberg (1943) Board Member since 1997	Retired. Formerly, Consultant (1997–2001); Director, Financial Markets U.S. Government Accountability Office (1996–1997); Partner, Norton Rose Fulbright, L.L.P. (law firm) (1978–1996); former Directorships: The William and Flora Hewlett Foundation (charitable organization) (2000–2015); Service Source, Inc. (nonprofit), Mutual Fund Directors Forum (2002–2004), American Bar Retirement Association (funding vehicle for retirement plans) (1987–1990 and 1994–1996)	103	—

Officers4
Name, Year of Birth, Position with the Fund and Length of Time Served5	Business Experience and Directorships During the Past Five Years
Brian E. Binder8 (1972) President and Chief Executive Officer, 2013–present	Managing Director3 and Head of US Product and Fund Administration, Deutsche Asset Management (2013–present); Director and President, Deutsche AM Service Company (since 2016); Director and President, DB Investment Managers, Inc. (since 2016); formerly, Head of Business Management and Consulting at Invesco, Ltd. (2010–2012)
John Millette7 (1962) Vice President and Secretary, 1999–present	Director,3 Deutsche Asset Management; Chief Legal Officer and Secretary, Deutsche Investment Management Americas Inc. (2015–present); and Director and Vice President, Deutsche AM Trust Company (since 2016)
Hepsen Uzcan6 (1974) Vice President, since 20169 Assistant Secretary, 2013–present	Director,3 Deutsche Asset Management
Paul H. Schubert6 (1963) Chief Financial Officer, 2004–present Treasurer, 2005–present	Managing Director,3 Deutsche Asset Management, and Chairman, Director and President, Deutsche AM Trust Company (since 2013); formerly, Director, Deutsche AM Trust Company (2004–2013)
Caroline Pearson7 (1962) Chief Legal Officer, 2010–present	Managing Director,3 Deutsche Asset Management; Secretary, Deutsche AM Distributors, Inc.; and Secretary, Deutsche AM Service Company
Scott D. Hogan7 (1970) Chief Compliance Officer, since 201610	Director,3 Deutsche Asset Management
Wayne Salit6 (1967) Anti-Money Laundering Compliance Officer, 2014–present	Director,3 Deutsche Asset Management; formerly: Managing Director, AML Compliance Officer at BNY Mellon (2011–2014); and Director, AML Compliance Officer at Deutsche Bank (2004–2011)
Paul Antosca7 (1957) Assistant Treasurer, 2007–present	Director,3 Deutsche Asset Management
Jack Clark7 (1967) Assistant Treasurer, 2007–present	Director,3 Deutsche Asset Management
Diane Kenneally7 (1966) Assistant Treasurer, 2007–present	Director,3 Deutsche Asset Management

¹ The length of time served represents the year in which the Board Member joined the board of one or more Deutsche funds currently overseen by the Board.

² A publicly held company with securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

³ Executive title, not a board directorship.

⁴ As a result of their respective positions held with the Advisor, these individuals are considered "interested persons" of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the fund.

⁵ The length of time served represents the year in which the officer was first elected in such capacity for one or more Deutsche funds.

⁶ Address: 60 Wall Street, New York, NY 10005.

⁷ Address: One Beacon Street, Boston, MA 02108.

⁸ Address: 222 South Riverside Plaza, Chicago, IL 60606.

⁹ Effective as of May 11, 2016.

¹⁰ Mr. Hogan became Chief Compliance Officer effective June 1, 2016.

The fund's Statement of Additional Information ("SAI") includes additional information about the Board Members. The SAI is available, without charge, upon request. If you would like to request a copy of the SAI, you may do so by calling the following toll-free number: (800) 728-3337.

Account Management Resources

For More Information	The automated telephone system allows you to access personalized account information and obtain information on other Deutsche funds using either your voice or your telephone keypad. Certain account types within Classes A, C and S also have the ability to purchase, exchange or redeem shares using this system. For more information, contact your financial advisor. You may also access our automated telephone system or speak with a Shareholder Service representative by calling: (800) 728-3337
Web Site	deutschefunds.com View your account transactions and balances, trade shares, monitor your asset allocation, subscribe to fund and account updates by e-mail, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about Deutsche funds, retirement planning information, and more.
Written Correspondence	Deutsche Asset Management PO Box 219151 Kansas City, MO 64121-9151
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 12-month period ended June 30 are available on our Web site — deutschefunds.com (click on "proxy voting"at the bottom of the page) — 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 filed with the SEC on Form N-Q. This form will be available on the SEC's Web site at sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The fund's portfolio holdings are also posted on deutschefunds.com from time to time. Please see the fund's current prospectus for more information.
Principal Underwriter	If you have questions, comments or complaints, contact: Deutsche AM Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148
Investment Management	Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), which is part of Deutsche Asset Management, is the investment advisor for the fund. DIMA and its predecessors have more than 80 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 Deutsche Bank AG. Deutsche Bank AG is a major global banking institution engaged in a wide variety of financial services, including investment management, retail, private and commercial banking, investment banking and insurance. Deutsche Asset Management is the retail brand name in the U.S. for the asset management activities of Deutsche Bank AG and DIMA. Deutsche Asset Management is committed to delivering the investing expertise, insight and resources of this global investment platform to American investors.

	Class A	Class C	Class S	Institutional Class
Nasdaq Symbol	NOTAX	NOTCX	SHYTX	NOTIX
CUSIP Number	25158T 103	25158T 301	25158T 400	25158T 509
Fund Number	152	352	2008	512

Notes

Notes

Notes

ITEM 2.	CODE OF ETHICS
	As of the end of the period covered by this report, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Principal Executive Officer and Principal Financial Officer. There have been no amendments to, or waivers from, a provision of the code of ethics during the period covered by this report that would require disclosure under Item 2. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT
	The fund’s audit committee is comprised solely of trustees who are "independent" (as such term has been defined by the Securities and Exchange Commission ("SEC") in regulations implementing Section 407 of the Sarbanes-Oxley Act (the "Regulations")). The fund’s Board of Trustees has determined that there are several "audit committee financial experts" (as such term has been defined by the Regulations) serving on the fund’s audit committee including Mr. Paul K. Freeman, the chair of the fund’s audit committee. An “audit committee financial expert” is not an “expert” for any purpose, including for purposes of Section 11 of the Securities Act of 1933 and the designation or identification of a person as an “audit committee financial expert” does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.
ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

deutsche Strategic High Yield Tax Free Fund
form n-csr disclosure re: AUDIT FEES

The following table shows the amount of fees that PricewaterhouseCoopers, LLP (“PWC”), the Fund’s independent registered public accounting firm, billed to the Fund during the Fund’s last two fiscal years. The Audit Committee approved in advance all audit services and non-audit services that PWC provided to the Fund.

Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Fund

Fiscal Year Ended May 31,	Audit Fees Billed to Fund	Audit-Related Fees Billed to Fund	Tax Fees Billed to Fund	All Other Fees Billed to Fund
2016	$94,381	$0	$0	$0
2015	$89,191	$0	$0	$0

Services that the Fund’s Independent Registered Public Accounting Firm Billed to the Adviser and Affiliated Fund Service Providers

The following table shows the amount of fees billed by PWC to Deutsche Investment Management Americas Inc. (“DIMA” or the “Adviser”), and any entity controlling, controlled by or under common control with DIMA (“Control Affiliate”) that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years.

Fiscal Year Ended May 31,	Audit-Related Fees Billed to Adviser and Affiliated Fund Service Providers	Tax Fees Billed to Adviser and Affiliated Fund Service Providers	All Other Fees Billed to Adviser and Affiliated Fund Service Providers
2016	$0	$30,661	$0
2015	$0	$63,439	$0

The “Tax Fees Billed to the Advisor” were billed for services associated with foreign tax filings.

Non-Audit Services

The following table shows the amount of fees that PWC billed during the Fund’s last two fiscal years for non-audit services. The Audit Committee pre-approved all non-audit services that PWC provided to the Adviser and any Affiliated Fund Service Provider that related directly to the Fund’s operations and financial reporting. The Audit Committee requested and received information from PWC about any non-audit services that PWC rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating PWC’s independence.

Fiscal Year Ended May31,	Total Non-Audit Fees Billed to Fund (A)	Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) (B)	Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) (C)	Total of (A), (B) and (C)
2016	$0	$30,661	$0	$30,661
2015	$0	$63,439	$0	$63,439

Audit Committee Pre-Approval Policies and Procedures. Generally, each Fund’s Audit Committee must pre approve (i) all services to be performed for a Fund by a Fund’s Independent Registered Public Accounting Firm and (ii) all non-audit services to be performed by a Fund’s Independent Registered Public Accounting Firm for the DIMA Entities with respect to operations and financial reporting of the Fund, except that the Chairperson or Vice Chairperson of each Fund’s Audit Committee may grant the pre-approval for non-audit services described in items (i) and (ii) above for non-prohibited services for engagements of less than $100,000. All such delegated pre approvals shall be presented to each Fund’s Audit Committee no later than the next Audit Committee meeting.

There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.

According to the registrant’s principal Independent Registered Public Accounting Firm, substantially all of the principal Independent Registered Public Accounting Firm's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal Independent Registered Public Accounting Firm.

***

In connection with the audit of the 2015 and 2016 financial statements, the Fund entered into an engagement letter with PwC. The terms of the 2016 engagement letter required by PwC, and agreed to by the Fund’s Audit Committee, include a provision mandating the use of mediation and arbitration to resolve any controversy or claim between the parties arising out of or relating to the engagement letter or the services provided there-under.

***

In a letter provided to the Audit Committee pursuant to PCAOB Rule 3526 and dated July 19, 2016, PwC informed the Audit Committee that PwC had identified circumstances where PwC maintains lending relationships with owners of greater than 10% of the shares of certain investment companies within the “investment company complex” as defined under Rule 2-01(f)(14) of Regulation S-X. PwC informed the Audit Committee that these lending relationships are inconsistent with the SEC Staff’s interpretation of Rule 2-01(c)(l)(ii)(A) of Regulation S-X (referred to as the “Loan Rule”).

The Loan Rule specifically provides that an accounting firm would not be independent if it receives a loan from a lender that is a record or beneficial owner of more than ten percent of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the Fund as well as all registered investment companies advised by Deutsche Investment Management Americas Inc. (the “Adviser”), the Fund’s investment adviser, and its affiliates, including other subsidiaries of the Adviser’s parent company, Deutsche Bank AG (collectively, the “Deutsche Funds Complex”). PwC’s lending relationships effect PwC’s independence under the SEC Staff’s interpretation of the Loan Rule with respect to all investment companies in the Deutsche Funds Complex.

In its July 19, 2016 letter, PwC affirmed to the Audit Committee that, as of the date of the letter, PwC is an independent accountant with respect to the Fund, within the meaning of PCAOB Rule 3520. In its letter, PwC also informed the Audit Committee that, after evaluating the facts and circumstances and the applicable independence rules, PwC has concluded that with regard to its compliance with the independence criteria set forth in the rules and regulations of the SEC related to the Loan Rule, it believes that it remains objective and impartial despite matters that may ultimately be determined to be inconsistent with these criteria and therefore it can continue to serve as the Fund’s registered public accounting firm. PwC informed the Audit Committee that its conclusion was based on a number of factors, including, among others, PwC’s belief that the lenders are not able to impact the impartiality of PwC or assert any influence over the investment companies in the Deutsche Funds Complex whose shares the lenders own or the applicable investment company’s investment adviser; and the lenders receive no direct benefit from their ownership of the investment companies in the Deutsche Funds Complex in separate accounts maintained on behalf of their insurance contract holders. In addition, the individuals at PwC who arranged PwC’s lending relationships have no oversight of, or ability to influence, the individuals at PwC who conducted the audits of the Fund’s financial statements.

On June 20, 2016, the SEC Staff issued a “no-action” letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to similar Loan Rule issues as those described above. In that letter, the SEC Staff confirmed that it would not recommend enforcement action against an investment company that relied on the audit services performed by an audit firm that was not in compliance with the Loan Rule in certain specified circumstances. The circumstances described in the no-action letter appear to be substantially similar to the circumstances that effected PwC’s independence under the Loan Rule with respect to the Fund. PwC confirmed to the Audit Committee that it meets the conditions of the no-action letter. In the no-action letter, the SEC Staff stated that the relief under the letter is temporary and will expire 18 months after the issuance of the letter.

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
	Not applicable
ITEM 9.	PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
	Not applicable
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 Kenneth C. Froewiss, Independent Chairman, Deutsche Mutual Funds, P.O. Box 390601, Cambridge, MA 02139.
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.	EXHIBITS
	(a)(1)	Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH.
	(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:	Deutsche Strategic High Yield Tax-Free Fund, a series of Deutsche Municipal Trust
By:	/s/Brian E. Binder Brian E. Binder President
Date:	7/29/2016

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/Brian E. Binder Brian E. Binder President
Date:	7/29/2016
By:	/s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer
Date:	7/29/2016