Low Duration Fund

Overview

Class N Shares Factsheet
Q4 2019 Review

Low Duration Fund

Investment Objective

Current Income

Morningstar Category
Ultrashort Bond

Fund Characteristics

The Low Duration Fund seeks to invest primarily in fixed income securities rated A- or higher. The Fund’s duration tends to be consistent with an ultra-short bond fund.

Investment Approach

The Fund seeks to outperform the total return of the Merrill Lynch 1-Year U.S. Treasury Note Index (the Fund’s “benchmark”) through an actively managed diversified portfolio of securities. The Fund’s Portfolio Managers will emphasize individual security selection, as well as shifts in the Fund’s portfolio among market sectors. In addition, the Managers will also actively manage the Fund’s average duration relative to the Benchmark.

  • Primary emphasis on quality, liquidity and diversification.
  • The broad sectors represented in the portfolio will include corporate debt securities issued by domestic and foreign companies, mortgage-backed securities and asset-backed securities.
  • The Fund will invest exclusively in investment grade securities rated in the highest three categories at time of purchase by at least one of the following three nationally recognized statistical rating organizations: Fitch Ratings, Moody’s Investors Service, Inc. and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

Why Consider This Fund?

  • Seeks to offer higher yields than cash instruments while maintaining a low duration
  • Focuses on outperforming its benchmark through a security selection process that adheres to a time-tested, disciplined approach
  • Managed by a tenured team with significant experience managing low duration strategies

The Fund’s returns will vary, and you could lose money by investing in the Fund.   The Fund’s investments in obligations issued or guaranteed by U.S.  Government agencies or instrumentalities may not be backed by the full faith and credit of the United States and may differ in the degree of support provided by the U.S. Government.  As interest rates rise, bond prices will fall and bond funds become more volatile. The Fund is subject to credit risk. The Fund’s net asset value and total return may be adversely affected by the inability of the issuers of the Fund’s securities to make interest payments or payment at maturity.  International investing involves special risk considerations, including currency fluctuations, lower liquidity, economic and political risk. Investing in emerging markets can increase these risks, including higher volatility and lower liquidity. The Fund’s investments in collateralized mortgage obligations are subject to prepayment and extension risk. Prepayment of high interest rate mortgage-backed securities during times of declining interest rates will tend to lower the return of the Fund and may even result in losses to the Fund if the prepaid securities were acquired at a premium. Slower prepayments during periods of rising interest rates may increase the duration of the Fund’s mortgage-backed securities and asset-backed securities and reduce their value.  This is not a money market fund. Rule 144A securities are not registered for resale in the general securities market and may be classified as illiquid. It may not be possible to sell or otherwise dispose of illiquid securities both at the price and within a time period deemed desirable by the Fund. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested.