PROSPECTUS SUMMARY
The Fund	XFT Municipal Income Fund Inc. is a newly organized, diversified closed-end management investment company.
The Offering	The Fund is offering [ ] shares of common stock, with a par value of [.0001] per share, at $[15.00] per share through a group of underwriters led by ___________. Minimum purchase is 100 Common Shares ($1,500). The Fund has given the Underwriters an option to purchase up to [ ] additional Common Shares. XFT Management has agreed to pay organizational expenses and offering costs exceeding $[.03] per Common Share.
Investment Objective and Policies	The Fund aims to provide high current income exempt from federal income tax. It invests primarily in investment grade municipal debt securities with maturities under 15 years. Under normal conditions, at least 80% of assets will be in such municipal bonds. The Fund maintains a dollar-weighted average duration of 3-7 years.
Investment Manager	XFT Management serves as investment manager, receiving a monthly fee up to [.55]% annually of Managed Assets. XFT Management has agreed to waive [.25]% of fees for roughly the first five years through [2007] with declining waivers through 2011.
Distributions	The Fund intends to pay regular monthly cash dividends. Initial dividend expected approximately 45 days after offering completion. Automatic dividend reinvestment plan available.
Taxation	Most dividends expected to be exempt from federal income tax but may be subject to state/local taxes and alternative minimum tax (AMT). Capital gains distributions are taxable.
Listing	Common Shares expected to list on American Stock Exchange under symbol "[ ]".
Key Risks	- No operating history - Market discount risk - Interest rate risk - Credit risk - Municipal bond market risk - High yield risk - Leverage risk - Liquidity risk - Management risk