The prospectus states the Fund seeks high current income exempt from federal and California income tax, with capital appreciation as a secondary objective. Under a fundamental 80% policy it invests in municipal bonds and other municipal securities whose interest is exempt from federal and California tax, concentrating in California issuers. It may invest without limit below investment grade (generally expecting no more than 40%), and invests in and originates municipal-related loans, including housing development loans. It uses leverage through Remarketable Variable Rate MuniFund Term Preferred Shares and may add tender option bonds, reverse repurchase agreements and borrowings. Derivatives may be used for hedging and duration management.