Portfolio Guidelines

The Fund generally invests at least 80% of its assets in a diversified portfolio of investment grade, fixed income securities and may invest a significant portion or all of its assets in asset-backed, mortgage-related, and mortgage-backed securities. The Fund may invest up to 20% of its assets in non-investment grade securities at the time of purchase and will typically maintain an average portfolio duration of less than three.

Sector Allocation As Of September 30, 2016

Duration Breakdown As Of September 30, 2016

Short Duration
Total Return Fund
Bloomberg Barclays U.S.
1-3 Yr. Gov./Credit Index
Less than one 17.6% 1.1%
1-3 56.9 98.9
3-5 21.4 0.0
5-7 4.0 0.0
7-10 0.1 0.0

Credit Quality3 As Of September 30, 2016

QUALITY RATING Short Duration
Total Return Fund
 
AAA 32.5%  
AA 8.9  
A 21.8  
BBB 22.5  
BB 3.4  
B 1.5  
CCC & Below 0.1  
Not Rated 9.4  

The value of fixed-income securities varies inversely with interest rates; as interest rates rise, the market value of fixed-income securities will decline. Lower quality debt (ie: “High Yield”) securities involve greater risk of default or price changes due to potential changes in the issuer’s credit quality. The value of investments in mortgage-related and asset-backed securities will be influenced by the factors affecting the housing market and the assets underlying such securities. The securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. They are also subject to prepayment risk, which occurs when mortgage holders refinance or otherwise repay their loans sooner than expected, creating an early return of principal to holders of the loans.

Fund holdings, sector allocations, and portfolio statistics subject to change without notice.

1 Residential Mortgage-Backed Securities/Commercial Mortgage-Backed Securities.

2 Cash & Other may include cash and money market funds.

3 Security quality ratings are derived from underlying portfolio securities by using the higher rating between Standard & Poor’s and Moody’s. If only one of Standard and Poor’s or Moody’s rates a security the available rating from Standard and Poor’s or Moody’s is selected. For securities that are not rated by Standard & Poor’s or Moody’s a rating by Fitch, DBSK, Morningstar, or Kroll may be used. Ratings by any agency represent an opinion only, not a recommendation to buy or sell. Securities that are not rated by any rating agencies are reflected as Not Rated “NR”.

4 Distribution yield is the current dividend rate (annualized) received by a shareholder relative to the current value of the investment.

The Bloomberg Barclays U.S. 1-3 Yr. Gov./Credit Index is an unmanaged index of investment grade government and corporate bonds with maturities of one to three years. This index does not incur fees and expenses (which would lower the return) and is not available for direct investment.

Definitions: Effective Duration measures the interest rate risk of the Fund. It is an estimate of the approximate percentage change in the Fund’s net asset value resulting from a one percentage point change in interest rates. Weighted Average Life is the average number of years each dollar of unpaid principal remains outstanding. Convexity is an estimate of the approximate change in the Fund’s effective duration resulting from a one percentage point change in interest rates. Option-Adjusted Spread is the difference between the portfolio yield and the risk-free rate, accounting for embedded options. Source: The Yield Book.