MFS Municipal Income Trust (MFM) permits VFL to hold up to 100% below‑investment‑grade munis

Rhea-AI Filing Summary

MFS Municipal Income Trust amends its Joint Proxy Statement/Prospectus to update a non‑fundamental investment policy: the abrdn National Municipal Income Fund (VFL) may invest up to 100% of its assets in municipal obligations rated below investment grade or unrated but judged comparable by the manager. The change is effective June 1, 2026 and replaces VFL’s prior 20% limitation; related descriptions comparing VFL and the Fund are revised to reflect that both may hold up to 100% in below‑investment‑grade municipal debt.

The Supplement is dated April 20, 2026.

Insights

Fund Strategist

Policy expands VFL’s capacity to hold high‑yield municipal debt.

The change raises VFL’s permitted allocation to below‑investment‑grade municipal obligations from 20% to 100%, effective June 1, 2026. This permits the manager to pursue a higher yield profile by increasing exposure to lower‑rated issuers.

Broader exposure increases sensitivity to credit cycles and default risk; subsequent portfolio disclosures and quarterly updates will show whether the manager uses the full allowance.

Risk Officer

Investor risk profile may change materially if the manager increases high‑yield exposure.

Allowing up to 100% allocation to below‑investment‑grade municipal obligations raises credit risk and potential volatility relative to the prior 20% policy. The Supplement retains the existing risk warnings that investors could lose some or all of their investment.

Watch fund disclosures after the June 1, 2026 Effective Date for actual portfolio composition and any updates to risk metrics.

Key Figures

Supplement date: April 20, 2026 Effective Date: June 1, 2026 Prior below‑IG limit (VFL): 20% +1 more

4 metrics

Supplement date April 20, 2026 date of this Proxy/Prospectus Supplement

Effective Date June 1, 2026 date new policy becomes effective

Prior below‑IG limit (VFL) 20% previous permitted investment in below‑investment‑grade municipal obligations

New below‑IG limit (VFL and Fund) 100% permitted investment in below‑investment‑grade municipal obligations after Effective Date

Key Terms

below‑investment grade, non‑fundamental investment policy, Proxy/Prospectus Supplement

3 terms

below‑investment grade financial

"may invest up to 100% of its assets in Municipal Obligations that are rated below investment grade"

non‑fundamental investment policy regulatory

"approved a change in VFL’s non‑fundamental investment policy relating to investments in below‑investment grade municipal obligations"

Proxy/Prospectus Supplement regulatory

"This Supplement amends the Fund’s Joint Proxy Statement/Prospectus dated January 29, 2026"

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 04/21/2026 - 01:48 PM Learn about SEC filing dates

Filed Pursuant to Rule 424(b)(3)

Registration Statement No. 333-292203

SUPPLEMENT NO. 1 DATED APRIL 20, 2026

(to Joint Proxy Statement/Prospectus dated January 29, 2026)

MFS MUNICIPAL INCOME TRUST

This Supplement No. 1 (this “Supplement”) amends the Fund’s Joint Proxy Statement/Prospectus dated January 29, 2026 (the “Proxy/Prospectus”). This Supplement updates certain information in the Proxy/Prospectus and is not complete without and may not be delivered or utilized except in combination with, the Proxy/Prospectus, including any amendments or supplements thereto. Certain capitalized terms used and not defined herein have the meanings set forth in the Proxy/Prospectus. This Supplement should be read in conjunction with the Proxy/Prospectus and if there is any inconsistency between the information in the Proxy/Prospectus and this Supplement, you should rely on the information in this Supplement.

On April 15, 2026, the Board of Trustees (the “Board”) of abrdn National Municipal Income Fund (“VFL”) approved a change in VFL’s non-fundamental investment policy relating to investments in below-investment grade municipal obligations as set forth below (the “20% Limitation”). This change will be effective on June 1, 2026 (the “Effective Date”).

Current	New
“The Fund may invest up to 20% of its net assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Investment Manager to be of comparable quality.”	“The Fund may invest up to 100% of its assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Investment Manager to be of comparable quality.”

As of the Effective Date, certain differences between VFL and the Fund described in the Proxy/Prospectus will cease to exist. On the Effective Date, the descriptions of VFL’s 20% Limitation in the Proxy/Prospectus are removed or replaced with the new policy immediately above as the context requires. In addition, the descriptions in the Proxy/Prospectus of the differences between the investment strategies of VFL and the Fund, including in the sections titled “COMPARISON OF THE FUNDS ‒ Comparison of Principal Investment Strategies,” are revised to indicate that both VFL and the Fund may invest up to 100% of their assets in below investment grade quality debt instruments.

Investing in the Fund involves certain risks. You could lose some or all of your investment. See “RISK FACTORS AND SPECIAL CONSIDERATIONS ‒ Comparison of Principal Risks of Investing in the Funds.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Supplement or the accompanying Proxy/Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this Supplement to Proxy/Prospectus is April 20, 2026.