Income Fund

Overview

Class I Shares Factsheet

Income Fund

Investment Objective

Current income generation and relative stability of capital

Morningstar Category
Short-Term Bond

Fund Characteristics

The Income Fund strives to produce consistent risk-adjusted returns with high current income while maintaining a diversified portfolio of investment-grade, liquid fixed-income securities.

Investment Approach

  • Combines macro-economic impacts to determine the expected future path of interest rates and economic cycles with fundamental research to help identify relative value and desirable characteristics
  • Emphasis is on building a diversified portfolio comprised of high quality, liquid securities. Issue selection is on a bottom-up basis with an emphasis on sound fundamentals
  • The broad sectors represented in the portfolio will include high quality corporate bonds, mortgage-backed securities, and asset-backed securities
  • The Fund retains the flexibility to invest up to 10% of the portfolio in BBB rated securities, the lower category of investment grade, in an effort to capitalize on market opportunities

Why Consider This Fund?

  • May offer the potential for higher yields than traditional short-term bond funds
  • Provides exposure to a distinct investment approach with above-market coupon agency mortgage-backed securities that have the potential to produce generous, predictable income
  • Limited interest rate risk may help to protect investors against an unexpected rise in interest rates compared to core duration mandates

The Fund’s returns will vary, and you could lose money by investing in the Fund.  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. 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. The Fund is also subject to interest rate and foreign investments risk. Foreign investments often involve additional risks, including political instability, differences in financial reporting standards and less stringent regulation of securities markets. 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.   Investments with longer maturities, which typically provide higher yields than securities with shorter maturities, may subject the Fund to increased price changes resulting from market yield fluctuations. 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.