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The High Income Fund invests at least 65% of assets in lower-quality, high yielding bonds that the managers believe offer the potential for both generous yields and capital appreciation.
Portfolio Management
Matt Eagan, CFA Kathleen Gaffney, CFA Elaine Stokes
Total Fund Assets (as of 10/31/2011): $142.8 million
Lipper Category: High Current Yield Funds
Morningstar Category: High Yield Bond
Primary Benchmark: Barclays Capital US Corporate High Yield Bond Index
Goal: Seeks high current income and capital appreciation
- Value driven, bottom up, opportunistic approach
- Allocations to out of benchmark securities provide value and diversification
- Long term investment horizon
- Invests at least 65% of its assets in lower-quality fixed income securities
- Normally invests at least 65% of its assets in US corporate or US dollar denominated foreign fixed income securities
- May invest up to 20% of its assets in foreign currency-denominated securities, including those in emerging markets and related currency hedging transactions
- Mutual funds that invest in bonds can lose their value as interest rates rise and bond prices usually fall; investor can lose principal
- High yield securities are subject to a high degree of market and credit risk. In addition, the secondary market for these securities may lack liquidity, which in turn may adversely affect the value of these securities and that of the Fund
- Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets
- Securities issued by US Government agencies are not insured, and may not be guaranteed by the US Government
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FUND FACTS as of 10/31/2011
| Ticker |
| Fund Inception |
| Class Inception |
| CUSIP |
| Minimum Initial Investment1 |
| Gross Expense Ratio2 |
| Net Expense Ratio2 |
| Net Asset Value as of 10/31/2011 |
| 30-Day SEC Yield as of 10/31/2011 | | Unsubsidized 30-Day SEC Yield as of 10/31/2011 |
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| Ticker |
| Fund Inception |
| Class Inception |
| CUSIP |
| Minimum Initial Investment1 |
| Gross Expense Ratio2 |
| Net Expense Ratio2 |
| Net Asset Value as of 10/31/2011 |
| 30-Day SEC Yield as of 10/31/2011 | | Unsubsidized 30-Day SEC Yield as of 10/31/2011 |
|
| Ticker |
| Fund Inception |
| Class Inception |
| CUSIP |
| Minimum Initial Investment1 |
| Gross Expense Ratio2 |
| Net Expense Ratio2 |
| Net Asset Value as of 10/31/2011 |
| 30-Day SEC Yield as of 10/31/2011 | | Unsubsidized 30-Day SEC Yield as of 10/31/2011 |
| Ticker |
| Fund Inception |
| Class Inception |
| CUSIP |
| Minimum Initial Investment1 |
| Gross Expense Ratio2 |
| Net Expense Ratio2 |
| Net Asset Value as of 10/31/2011 |
| 30-Day SEC Yield as of 10/31/2011 | | Unsubsidized 30-Day SEC Yield as of 10/31/2011 |
| Ticker |
| Fund Inception |
| Class Inception |
| CUSIP |
| Minimum Initial Investment1 |
| Gross Expense Ratio2 |
| Net Expense Ratio2 |
| Net Asset Value as of 10/31/2011 |
| 30-Day SEC Yield as of 10/31/2011 | | Unsubsidized 30-Day SEC Yield as of 10/31/2011 |
| Fact Sheet | | Commentary | | Fund Application | |
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Unsubsidized 30-day SEC yield is calculated using the gross expenses of the fund. Gross expenses do not include any fee waivers or reimbursement.
Investment return and principal value may fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
Performance data quoted represents past performance and current returns may be higher or lower.
Past performance is no guarantee of future results.
Unlike net expense ratio, gross expense ratio does not reflect any potential reimbursement/waiver of expenses, if any, as stated in the most recent Fund prospectus.
Fund expenses and expense reductions are subject to change. Expense reductions are contractual and are set to expire 4/30/2012. Investors should consult the most
recent prospectus for more detailed information.
Frequent portfolio turnover may result in increased tax liabilities, which will reduce your overall return from the Fund.
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1 For further detail regarding Minimum Initial Investment, please see the fund prospectus. 2 Unlike net expense ratio, gross expense ratio does not reflect any potential reimbursement/waiver of expenses, if any, as stated in the most recent Fund prospectus. Fund expenses and expense reductions are subject to change. Expense reductions are contractual and are set to expire 1/31/2012. Investors should consult the most recent prospectus for more detailed information. The Barclays Capital US Corporate High Yield Bond Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g. Argentina, Brazil, Venezuela, etc.) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-emerging market countries are included. Original issue zeroes, step-up coupon structures and 144As are also included. Indexes are unmanaged, do not incur fees and it is not possible to invest directly in an index. Before investing, consider the fund's investment objectives, risks, charges, and expenses. You may obtain a prospectus or a summary prospectus, if available, containing this and other information on this web site. Read it carefully.
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Monthly as of 10/31/2011
| Characteristics |
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| Number of Issues |
198 |
| Average Maturity |
9.85 |
| Weighted Average Duration |
5.12 |
| Annual Turnover (9/30/2011) |
67% |
| Currency Distribution |
|
| U S Dollars |
86.93% |
| Indonesian Rupiah |
2.77% |
| Philippine Peso |
2.11% |
| Brazilian Real |
1.91% |
| Mexican Peso |
1.88% |
| South Korean Won |
1.86% |
| Canadian Dollar |
1.70% |
| Australian Dollar |
0.67% |
| Euro |
0.17% |
| Duration Distribution |
|
| Less than 1 Yr. |
5.57% |
| 1 to 3 Yrs. |
8.95% |
| 3 to 5 Yrs. |
20.96% |
| 5 to 7 Yrs. |
19.24% |
| 7 to 10 Yrs. |
14.55% |
| 10 Yrs. or more |
13.98% |
| Other |
0.00% |
| Cash & Equiv |
16.76% |
Top Ten Holdings as of 10/31/2011 |
% Assets |
| INTEL CORP CVT |
2.3% |
| CIENA CORP CVT |
2.2% |
| SPRINT CAP CORP COMP GUAR |
2.0% |
| PHILIPPINES(REP) PHP |
2.0% |
| MEXICAN BONOS M 20 MXN |
1.9% |
| FORD MOTOR COMPANY CVT |
1.9% |
| CANADIAN GOVERNMENT CAD |
1.7% |
| USG CORP |
1.7% |
| NEWELL FINL TR I CONV PFD 5.25 1/23/2043 |
1.6% |
| KB HOME |
1.6% |
| Total |
18.8% |
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| Sector Distribution |
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| High Yield Credit |
38.20% |
| Convertibles |
15.60% |
| Non-US Dollar (Ex CAD) |
13.65% |
| MBS |
6.02% |
| Preferred/Equity |
3.76% |
| Investment Grade Credit |
2.30% |
| Canadian Dollar |
1.70% |
| CMBS |
1.00% |
| Bank Loans |
0.61% |
| ABS |
0.25% |
| Emerging Markets Debt |
0.14% |
| Cash & Equivalents |
16.76% |
| Country Distribution |
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| United States |
81.92% |
| Canada |
4.42% |
| Mexico |
2.35% |
| Philippines |
2.17% |
| United Kingdom |
1.45% |
| Brazil |
1.24% |
| Ireland |
1.21% |
| Netherlands |
1.01% |
| Greece |
0.85% |
| Other |
3.37% |
| Maturity Distribution |
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| Less than 1 Yr. |
0.85% |
| 1 to 3 Yrs. |
8.34% |
| 3 to 5 Yrs. |
11.68% |
| 5 to 7 Yrs. |
20.28% |
| 7 to 10 Yrs. |
9.33% |
| 10 Yrs. or more |
32.76% |
| Other |
0.00% |
| Cash & Equiv |
16.76% |
| Credit Quality |
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| Govt/Agency |
0.00% |
| Aaa |
4.58% |
| Aa |
2.77% |
| A |
6.04% |
| Baa |
6.37% |
| Ba |
23.80% |
| B |
27.47% |
| Caa & Lower |
7.95% |
| Not Rated |
4.26% |
| Cash & Equiv |
16.76% |
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Credit Quality reflects the highest credit rating assigned to individual holdings of the fund among Moody's, S&P or Fitch; ratings are subject to change. The Fund's shares are not rated by any rating agency and no credit rating for Fund shares is implied. Cash & Equivalents reflects unsettled trades, fees and derivatives. Negative Cash & Equivalents reflects the market value of future trade commitments for the fund. In the Sector, Duration and Maturity distributions, the calculations are based on the specific traits of each security related to that distribution, which can result in variations of the Cash & Equivalents weightings. Due to rounding, quality, maturity, sector, currency, country and duration totals may not equal 100.00%. Before investing, consider the fund's investment objectives, risks, charges, and expenses. You may obtain a prospectus or a summary prospectus, if available, containing this and other information on this web site. Read it carefully.
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Quarterly as of 9/30/2011
| Characteristics |
Fund |
Index |
| Number of Issues |
194 |
1885 |
| Average Maturity |
11.29 |
6.21 |
| Weighted Average Duration |
5.92 |
4.49 |
| Annual Turnover (9/30/2011) |
67% |
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| Currency Distribution |
Fund |
Index |
| U S Dollars |
84.42% |
100.00% |
| Indonesian Rupiah |
3.44% |
0.00% |
| Philippine Peso |
2.53% |
0.00% |
| South Korean Won |
2.21% |
0.00% |
| Mexican Peso |
2.18% |
0.00% |
| Brazilian Real |
2.12% |
0.00% |
| Canadian Dollar |
2.05% |
0.00% |
| Australian Dollar |
0.80% |
0.00% |
| Euro |
0.25% |
0.00% |
| Duration Distribution |
Fund |
Index |
| Less than 1 Yr. |
8.28% |
1.74% |
| 1 to 3 Yrs. |
11.11% |
20.25% |
| 3 to 5 Yrs. |
23.56% |
41.94% |
| 5 to 7 Yrs. |
19.27% |
29.16% |
| 7 to 10 Yrs. |
18.37% |
4.73% |
| 10 Yrs. or more |
15.90% |
2.18% |
| Other |
0.00% |
0.00% |
| Cash & Equiv |
3.52% |
0.00% |
Top Ten Holdings as of 9/30/2011 |
% Assets |
| INTEL CORP CVT |
3.6% |
| CIENA CORP CVT |
2.7% |
| SPRINT CAP CORP COMP GUAR |
2.6% |
| PHILIPPINES(REP) PHP |
2.3% |
| MEXICAN BONOS M 20 MXN |
2.2% |
| CANADIAN GOVERNMENT CAD |
2.0% |
| NEWELL FINL TR I CONV PFD 5.25 1/23/2043 |
2.0% |
| FORD MOTOR COMPANY CVT |
2.0% |
| USG CORP |
2.0% |
| PULTE HOMES INC |
1.9% |
| Total |
23.3% |
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| Sector Distribution |
Fund |
Index |
| High Yield Credit |
40.99% |
99.67% |
| Convertibles |
20.74% |
0.00% |
| Non-US Dollar (Ex CAD) |
16.32% |
0.00% |
| MBS |
7.76% |
0.00% |
| Preferred/Equity |
4.08% |
0.00% |
| Investment Grade Credit |
2.13% |
0.00% |
| Canadian Dollar |
2.05% |
0.00% |
| CMBS |
1.19% |
0.00% |
| Bank Loans |
0.74% |
0.00% |
| ABS |
0.32% |
0.00% |
| Emerging Markets Debt |
0.16% |
0.33% |
| Cash & Equivalents |
3.52% |
0.00% |
| Country Distribution |
Fund |
Index |
| United States |
79.45% |
87.91% |
| Canada |
5.37% |
2.37% |
| Philippines |
2.61% |
0.00% |
| Mexico |
2.34% |
0.00% |
| United Kingdom |
1.73% |
1.56% |
| Ireland |
1.53% |
0.37% |
| Brazil |
1.36% |
0.00% |
| Greece |
1.00% |
0.02% |
| United Arab Emirates |
0.76% |
0.50% |
| Other |
3.84% |
7.26% |
| Maturity Distribution |
Fund |
Index |
| Less than 1 Yr. |
2.17% |
0.30% |
| 1 to 3 Yrs. |
11.65% |
8.81% |
| 3 to 5 Yrs. |
11.46% |
23.99% |
| 5 to 7 Yrs. |
21.54% |
29.28% |
| 7 to 10 Yrs. |
10.64% |
30.67% |
| 10 Yrs. or more |
39.02% |
6.95% |
| Other |
0.00% |
0.00% |
| Cash & Equiv |
3.52% |
0.00% |
| Credit Quality |
Fund |
Index |
| Govt/Agency |
0.00% |
0.00% |
| Aaa |
5.64% |
0.00% |
| Aa |
3.61% |
0.00% |
| A |
8.39% |
0.00% |
| Baa |
7.46% |
1.36% |
| Ba |
25.64% |
39.37% |
| B |
31.63% |
41.91% |
| Caa & Lower |
9.41% |
17.21% |
| Not Rated |
4.71% |
0.14% |
| Cash & Equiv |
3.52% |
0.00% |
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Credit Quality reflects the highest credit rating assigned to individual holdings of the fund among Moody's, S&P or Fitch; ratings are subject to change. The Fund's shares are not rated by any rating agency and no credit rating for Fund shares is implied. Cash & Equivalents reflects unsettled trades, fees and derivatives. Negative Cash & Equivalents reflects the market value of future trade commitments for the fund. In the Sector, Duration and Maturity distributions, the calculations are based on the specific traits of each security related to that distribution, which can result in variations of the Cash & Equivalents weightings. Due to rounding, quality, maturity, sector, currency, country and duration totals may not equal 100.00%. Before investing, consider the fund's investment objectives, risks, charges, and expenses. You may obtain a prospectus or a summary prospectus, if available, containing this and other information on this web site. Read it carefully.
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