High Yield Opportunities Fund

Overview

The Fund seeks to provide current income. Capital appreciation is a secondary objective. The goal of the Fund is to maximize long-term risk adjusted returns relative to the market with an emphasis on minimizing downside risk. The Fund is diversified and invests principally in high-yield corporate bonds rated below investment grade. The Fund may purchase bonds of any maturity, but will normally have a dollar-weighted average maturity between two and fifteen years. The Fund is managed against the Bloomberg Barclays U.S. High Yield Corporate Bond Index.

Performance

Total Returns (as of 12/18/18) NAV NAV Change Dollars NAV Daily Change (%) YTD (%)
Class I NAV $11.15 ($0.03) -0.27% -0.96%
Class A NAV $11.19 ($0.03) -0.27% -1.35%
MOP $11.45 ($0.03) -0.27% -3.61%
Bloomberg Barclays U.S. High Yield Corporate Bond Index n/a n/a -0.43% -0.63%
ICE BofA Merrill Lynch High Yield Master II n/a n/a -0.39% -0.74%
Total Returns (as of 11/30/18) Prior Mo. YTD 1 Year 3 Years 5 Years Since Inception1
Class I NAV -1.12% -0.40% -0.06% 6.87% 4.71% 8.86%
Class A NAV -1.22% -0.79% -0.41% 6.58% 4.45% 8.60%
MOP -3.41% -3.06% -2.69% 5.79% 3.97% 8.34%
Bloomberg Barclays U.S. High Yield Corporate Bond Index -0.86% 0.06% 0.36% 7.09% 4.39% 11.11%
ICE BofA Merrill Lynch High Yield Master II -0.91% -0.07% 0.22% 7.12% 4.40% 11.08%
Total Returns (as of 09/30/18) Prior Qtr. YTD 1 Year 3 Years 5 Years Since Inception1
Class I NAV 2.02% 2.11% 3.53% 8.23% 5.95% 9.31%
Class A NAV 1.87% 1.74% 3.18% 7.92% 5.67% 9.04%
MOP -0.44% -0.58% 0.82% 7.12% 5.19% 8.78%
Bloomberg Barclays U.S. High Yield Corporate Bond Index 2.40% 2.57% 3.05% 8.15% 5.54% 11.60%
ICE BofA Merrill Lynch High Yield Master II 2.44% 2.52% 2.94% 8.19% 5.54% 11.58%

Expense Ratios*

  Class A Class I
Gross 1.28% 1.03%
Net 0.90% 0.65%

Performance data quoted represents past performance. Past performance is no guarantee of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated.

1The inception date of the Angel Oak High Yield Opportunities Fund I Class (ANHIX) was 3/31/09, while the inception date of the A Class (ANHAX) was 7/31/12. The returns of ANHAX shown for periods prior to the inception date include the returns of ANHIX and are adjusted to reflect any applicable sales charges and the higher annual operating expenses of Class A.

2Returns shown for A Shares at MOP reflect the maximum sales load of 2.25%.

*Gross expense ratios are reported as of the 5/31/18 prospectus. The net expense ratios are reported as of the 1/31/18 Annual Report and are referenced in the 5/31/18 prospectus. The Adviser has contractually agreed to waive fees through 5/31/19.

 

GROWTH OF $10,000 SINCE INCEPTION AS OF 9/30/18

This chart illustrates the performance of a hypothetical $10,000 investment made in Angel Oak High Yield Opportunities Fund (ANHIX), I Shares since inception on 3/31/09. It assumes reinvestment of capital gains and dividends. This chart is not intended to imply any future performance.

Bloomberg Barclays U.S. Corporate High Yield Index: An unmanaged market value-weighted index that covers the universe of fixed-rate, non-investment grade debt.

 

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2018 1/31/2018 12.00 0.05538  –  –
2/27/2018 2/28/2018 11.84 0.04989  –  –
3/28/2018 3/29/2018 11.75 0.05407  –  –
4/29/2018 4/30/2018 11.72 0.05148  –  –
5/30/2018 5/31/2018 11.68 0.05335  –  –
6/28/2018 6/29/2018 11.65 0.05132  –  –
7/30/2018 7/31/2018 11.70 0.05410  –  –
8/30/2018 8/31/2018 11.71 0.05665  –  –
9/27/2018 9/28/2018 11.70 0.05586  –  –
10/30/2018 10/31/2018 11.49 0.05932  –  –
11/29/2018 11/30/2018 11.29 0.05983  –  –
Total 2018     0.60125    

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2017 1/31/2017 11.92 0.02103  –  –
2/27/2017 2/28/2017 11.98 0.04988  –  –
3/30/2017 3/31/2017 11.89 0.05618  –  –
4/27/2017 4/28/2017 11.94 0.05323  –  –
5/30/2017 5/31/2017 11.97 0.05565  –  –
6/29/2017 6/30/2017 11.93 0.05364  –  –
7/30/2017 7/31/2017 12.00 0.05541  –  –
8/30/2017 8/31/2017 11.95 0.05542  –  –
9/28/2017 9/29/2017 11.98 0.05391  –  –
10/30/2017 10/31/2017 12.01 0.05590  –  –
11/29/2017 11/30/2017 11.99 0.05643  –  –
12/29/2017 12/29/2017 11.98 0.05567  –  –
Total 2017     0.62235    

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2016 1/29/2016 10.50 0.04840  –  –
2/26/2016 2/29/2016 10.41 0.05320  –  –
3/30/2016 3/31/2016 10.80 0.05440  –  –
4/28/2016 4/29/2016 11.06 0.05297  –  –
5/27/2016 5/31/2016 11.08 0.06324  –  –
6/29/2016 6/30/2016 11.18 0.04321  –  –
7/28/2016 7/29/2016 11.47 0.04476  –  –
8/30/2016 8/31/2016 11.68 0.04605  –  –
9/29/2016 9/30/2016 11.65 0.04542  –  –
10/30/2016 10/31/2016 11.65 0.04670  –  –
11/29/2016 11/30/2016 11.56 0.06991  –  –
12/27/2016* 12/28/2016* 11.71 0.07210  –  –
12/29/2016 12/30/2016 11.72 0.06867  –  –
Total 2016     0.70903    

*Due to our annual tax review, there was additional earned income that was required to be paid out prior to the calendar year end.

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2015 1/30/2015 11.60 0.04670  –  –
2/26/2015 2/27/2015 11.84 0.04350  –  –
3/30/2015 3/31/2015 11.73 0.05690
4/29/2015 4/30/2015 11.78 0.04900  –  –
5/28/2015 5/29/2015 11.79 0.05250  –  –
6/29/2015 6/30/2015 11.62 0.05210  –  –
7/30/2015 7/31/2015 11.49 0.05310  –  –
8/28/2015 8/31/2015 11.31 0.05630  –  –
9/29/2015 9/30/2015 11.04 0.04620  –  –
10/29/2015 10/30/2015 11.33 0.05390  –  –
11/27/2015 11/30/2015 11.07 0.05320  –  –
12/30/2015 12/31/2015 10.76 0.05932  –  –
Total 2015     0.62272    
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2014 1/31/2014 12.17 0.05630  –  –
2/27/2014 2/28/2014 12.38 0.04880  –  –
3/28/2014 3/31/2014 12.34 0.06110  –  –
4/29/2014 4/30/2014 12.37 0.05410  –  –
5/29/2014 5/30/2014 12.47 0.04960  –  –
6/27/2014 6/30/2014 12.51 0.05410  –  –
7/30/2014 7/31/2014 12.30 0.06040  –  –
8/28/2014 8/29/2014 12.41 0.04850  –  –
9/29/2014 9/30/2014 12.11 0.05130  –  –
10/30/2014 10/31/2014 12.14 0.05440  –
11/27/2014 11/28/2014 11.90 0.04650  –
12/30/2014 12/31/2014 11.53 0.05689 0.02123 0.13845
Total 2014     0.64199  0.02123 0.13845
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
2/27/2013 2/28/2013 12.37 0.05580  –  –
3/27/2013 3/28/2013 12.43 0.06060  –  –
4/29/2013 4/30/2013 12.62 0.05470  –  –
5/30/2013 5/31/2013 12.46 0.06520  –  –
6/27/2013 6/28/2013 12.08 0.05260  –  –
7/30/2013 7/31/2013 12.24 0.06270  –  –
8/29/2013 8/30/2013 12.05 0.05780  –  –
9/27/2013 9/30/2013 12.10 0.05830  –  –
10/30/2013 10/31/2013 12.39 0.06040  –  –
11/28/2013 11/29/2013 12.39 0.05750  –  –
12/30/2013 12/31/2013 12.16 0.05930 0.01900 0.21700
Total 2013     0.64490 0.01900 0.21700
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
8/30/2012 8/31/2012 12.32 0.05990  –  –
9/27/2012 9/28/2012 12.44 0.05170  –  –
10/30/2012 10/31/2012 12.41 0.06630  –  –
11/29/2012 11/30/2012 12.43 0.05910  –  –
12/28/2012 12/31/2012 12.34 0.06610
Total 2012     0.30310 0.04490 0.15000

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2018 1/31/2018 11.95 0.05793  –
2/27/2018 2/28/2018 11.79 0.05244  –
3/28/2018 3/29/2018 11.70 0.05638  –
4/29/2018 4/30/2018 11.67 0.05413  –
5/30/2018 5/31/2018 11.63 0.05580  –
6/28/2018 6/29/2018 11.60 0.05380  –
7/30/2018 7/31/2018 11.65 0.05649  –
8/30/2018 8/31/2018 11.66 0.05913  –
9/27/2018 9/28/2018 11.66 0.05724  –
10/30/2018 10/31/2018 11.44 0.06166  –
11/29/2018 11/30/2018 11.25 0.06227  –
Total 2018     0.62727    

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2017 1/31/2017 11.89 0.02402  –
2/27/2017 2/28/2017 11.94 0.05234  –
3/30/2017 3/31/2017 11.86 0.05809  –
4/27/2017 4/28/2017 11.91 0.05578  –
5/30/2017 5/31/2017 11.94 0.05794  –
6/29/2017 6/30/2017 11.89 0.05617  –
7/30/2017 7/31/2017 11.96 0.05785  –  –
8/30/2017 8/31/2017 11.91 0.05819  –  –
9/28/2017 9/29/2017 11.94 0.05602  –  –
10/30/2017 10/31/2017 11.98 0.05811  –  –
11/29/2017 11/30/2017 11.95 0.05676  –  –
12/26/2017* 12/27/2017* 11.92 0.01312  –  –
12/29/2017 12/29/2017 11.92 0.05814  –  –
Total 2017     0.66253    

*Due to our annual tax review, there was additional earned income that was required to be paid out prior to the calendar year end.

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2016 1/29/2016 10.48 0.05150  –  –
2/26/2016 2/29/2016 10.39 0.05670  –  –
3/30/2016 3/31/2016 10.77 0.05590  –  –
4/28/2016 4/29/2016 11.03 0.05514  –  –
5/27/2016 5/31/2016 11.05 0.06546  –  –
6/29/2016 6/30/2016 11.15 0.04544  –  –
7/28/2016 7/29/2016 11.44 0.04707  –  –
8/30/2016 8/31/2016 11.65 0.04847  –  –
9/29/2016 9/30/2016 11.62 0.04772  –  –
10/30/2016 10/31/2016 11.61 0.04909  –  –
11/29/2016 11/30/2016 11.53 0.07036  –  –
12/27/2016* 12/28/2016* 11.68 0.07279  –  –
12/29/2016 12/30/2016 11.69 0.07103  –  –
Total 2016     0.73667    

*Due to our annual tax review, there was additional earned income that was required to be paid out prior to the calendar year end.

Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2015 1/30/2015 11.58 0.05020  –  –
2/26/2015 2/27/2015 11.82 0.04680  –  –
3/30/2015 3/31/2015 11.71 0.06070
4/29/2015 4/30/2015 11.75 0.05270  –  –
5/28/2015 5/29/2015 11.76 0.05600  –  –
6/29/2015 6/30/2015 11.59 0.05600  –  –
7/30/2015 7/31/2015 11.47 0.05690  –  –
8/28/2015 8/31/2015 11.28 0.06000  –  –
9/29/2015 9/30/2015 11.01 0.04980  –  –
10/29/2015 10/30/2015 11.30 0.05730
11/27/2015 11/30/2015 11.04 0.05680  –  –
12/30/2015 12/31/2015 10.73 0.06358  –  –
Total 2015     0.66678    
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2014 1/31/2014 12.18 0.05930  –  –
2/27/2014 2/28/2014 12.37 0.05330  –  –
3/28/2014 3/31/2014 12.32 0.06300  –  –
4/29/2014 4/30/2014 12.35 0.05620  –  –
5/29/2014 5/30/2014 12.45 0.05240  –  –
6/27/2014 6/30/2014 12.50 0.05700  –  –
7/30/2014 7/31/2014 12.29 0.06130  –  –
8/28/2014 8/29/2014 12.39 0.05120  –  –
9/29/2014 9/30/2014 12.09 0.05640  –  –
10/30/2014 10/31/2014 12.13 0.05830  –  –
11/27/2014 11/28/2014 11.88 0.05000  –  –
12/30/2014 12/31/2014 11.51 0.06091 0.02123 0.13845
Total 2014     0.67931 0.02123 0.13845
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2013 1/31/2013 12.39 0.06000    
2/27/2013 2/28/2013 12.37 0.05810  –  –
3/27/2013 3/28/2013 12.43 0.06290  –  –
4/29/2013 4/30/2013 12.62 0.05710  –  –
5/30/2013 5/31/2013 12.46 0.06780  –  –
6/27/2013 6/28/2013 12.08 0.05490  –  –
7/30/2013 7/31/2013 12.24 0.06550  –  –
8/29/2013 8/30/2013 12.05 0.06030  –  –
9/27/2013 9/30/2013 12.09 0.06120  –  –
10/30/2013 10/31/2013 12.39 0.06260  –  –
11/28/2013 11/29/2013 12.39 0.05790  –  –
12/30/2013 12/31/2013 12.16 0.06220 0.01900 0.21700
Total 2013     0.73050 0.01900 0.21700
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/30/2012 1/31/2012 12.02 0.05520
2/28/2012 2/29/2012 12.22 0.06360
3/29/2012 3/30/2012 12.12 0.06140
4/27/2012 4/30/2012 12.15 0.06580
5/30/2012 5/31/2012 11.92 0.06840
6/28/2012 6/29/2012 12.11 0.05770
7/30/2012 7/31/2012 12.26 0.06600
8/30/2012 8/31/2012 12.32 0.06100  –  –
9/27/2012 9/28/2012 12.44 0.05410  –  –
10/30/2012 10/31/2012 12.40 0.06910  –  –
11/29/2012 11/30/2012 12.43 0.06160  –  –
12/28/2012 12/31/2012 12.33 0.06870 0.04490 0.15000
Total 2012     0.75260 0.04490 0.15000
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2011 1/31/2011 12.06 0.06490
2/25/2011 2/28/2011 12.14 0.06400
3/30/2011 3/31/2011 12.06 0.07810
4/28/2011 4/29/2011 12.17 0.06560
5/30/2011 5/31/2011 12.17 0.07470
6/29/2011 6/30/2011 12.01 0.07090
7/28/2011 7/29/2011 12.11 0.06100
8/30/2011 8/31/2011 11.68 0.07050  –  –
9/29/2011 9/30/2011 11.35 0.06660  –  –
10/28/2011 10/31/2011 11.79 0.07060  –  –
11/29/2011 11/30/2011 11.62 0.04870  –  –
12/29/2011 12/30/2011 11.77 0.07160 0.00770 0.05040
Total 2011     0.80720 0.00770 0.05040
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
1/28/2010 1/29/2010 11.72 0.07180
2/25/2010 2/26/2010 11.64 0.07010
3/30/2010 3/31/2010 11.84 0.09000
4/29/2010 4/30/2010 12.01 0.07310
5/27/2010 5/28/2010 11.59 0.06930
6/29/2010 6/30/2010 11.66 0.07930
7/29/2010 7/30/2010 12.01 0.06330
8/30/2010 8/31/2010 11.96 0.07830  –  –
9/29/2010 9/30/2010 12.24 0.06880  –  –
10/28/2010 10/29/2010 12.50 0.06830  –  –
11/29/2010 11/30/2010 12.22 0.07470  –  –
12/30/2010 12/31/2010 11.92 0.08310 0.37790 0.03550
Total 2010     0.89010 0.37790 0.03550
Record Date  Payable Date Reinvestment Price ($/share) Ordinary Income ($/share) ST Cap Gains ($/share) LT Cap Gains ($/share)
4/29/2009 4/30/2009 10.43 0.02580
5/28/2009 5/29/2009 10.68 0.07060
6/29/2009 6/30/2009 10.79 0.08130
7/30/2009 7/31/2009 11.22 0.07600
8/28/2009 8/31/2009 11.23 0.07660  –  –
9/29/2009 9/30/2009 11.62 0.07890  –  –
10/29/2009 10/30/2009 11.62 0.08040  –  –
11/27/2009 11/30/2009 11.61 0.08030  –  –
12/30/2009 12/31/2009 11.72 0.08550 0.08320
Total 2009     0.65540 0.08320  
  Fund Characteristics
Effective Duration 3.2 years
Average Coupon (%) 6.54
Correlation to Index  0.9

As of 9/30/18.

Average Coupon: The weighted average annual coupon for the securities in the Fund.

Correlation: A statistical measure of how two securities move in relation to another. Index used for comparison is the Bloomberg Barclays U.S. Corporate High Yield Index.

Effective Duration: Measures a portfolio’s sensitivity to changes in interest rates. Generally, the longer the effective duration, the greater the price change relative to interest rate movements.

Portfolio

 
BBB 0.4%
 
BB 36.4%
 
B 48.6%
 
CCC 7.2%
 
Unrated 0.3%
 
Cash 7.1%

As of 9/30/18.

The portfolio is actively managed. Holdings and weightings are subject to change daily and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned. Fund composition is based on net assets. Please scroll down to see important information about the Fund. Ratings determined by S&P. 

Sector Detail Fund Index
Basic Industry 18.5% 7.0%
Consumer Cyclical 15.2% 14.1%
Energy 14.1% 14.7%
Capital Goods 11.2% 8.7%
Consumer Non-Cyclical 5.4% 14.2%
Communications 5.2% 19.3%
Electric 4.2% 2.4%
Brokerage Asset Managers 4.0% 0.5%
Technology 3.3% 7.3%
REITs 1.5% 0.8%

As of 9/30/18.

The portfolio is actively managed. Holdings and weightings are subject to change daily and are provided for informational purposes only and should not be deemed as a recommendation to buy or sell the securities mentioned. Fund composition is based on net assets. Please scroll down to see important information about the Fund. 

Management Team

>

Matt Kennedy

Matt Kennedy, CFA®

Portfolio Manager
Head of Corporate Credit
Investment industry since 1995
Read Bio

 

 
Matt Kennedy

Nichole Hammond, CFA®

Senior Portfolio Manager

Investment industry since 2000
Read Bio

 

 
Sreeni Prabhu

Sreeni Prabhu

Co-CEO and CIO

Investment industry since 1998
Read Bio

 

 
Berkin Kologlu

Berkin Kologlu

Portfolio Manager

Investment industry since 2002
Read Bio

 

 

Fund Facts

Share Class Ticker CUSIP Inception Gross Expense Ratio* Net Expense Ratio*
Class A ANHAX 03463K703 3/31/09  1.28% 0.90%
Class I ANHIX 03463K885 7/31/12 1.03% 0.65%

*Gross expense ratios are reported as of the 5/31/18 prospectus. The net expense ratios are reported as of the 1/31/18 Annual Report and are referenced in the 5/31/18 prospectus. The Adviser has contractually agreed to waive fees through 5/31/19.

Fund Commentary

30-Day SEC Yield: The SEC yield is an annualized yield based on the most recent 30-day period. Subsidized yields reflect fee waivers in effect. Without such waivers, yields would be reduced. Unsubsidized yields do not reflect fee waivers in effect. The SEC yield does not include prepayment income, which could be a significant contribution to yield.

Bloomberg Barclays U.S. Corporate High Yield Index: An unmanaged market value-weighted index that covers the universe of fixed-rate, non-investment grade debt.

ICE Bank of America Merrill Lynch U.S. High Yield Index: Tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market, and includes securities rated below BBB and not in default, with at least 18 months to maturity, a fixed coupon, and at least $250 million outstanding.

Mutual fund investing involves risk; Principal loss is possible. Investments in debt securities typically decreases when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower rated and non-rated securities present a greater risk of loss to principal and interest than higher rated securities. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of including credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Derivatives involve risks different from, and in certain cases, greater than the risks presented by more traditional investments. Derivatives may involve certain costs and risks such as illiquidity, 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. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. For more information on these risks and other risks of the Fund, please see the Prospectus.

**As of 11/30/18, the Angel Oak High Yield Opportunities Fund (ANHIX) received a Morningstar rating based on risk-adjusted returns of 5 stars overall, 4 stars for the three-year period and 5 stars for the five-year period among 607, 607, and 518 high yield bond funds. The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

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Past performance is no guarantee of future results.

Investments in debt securities typically decrease when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower rated and non-rated securities present a greater risk of loss to principal and interest than higher rated securities. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of including credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Derivatives involve risks different from, and in certain cases, greater than the risks presented by more traditional investments. Derivatives may involve certain costs and risks such as illiquidity, 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. The Fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested.