Fund Goal and Approach
The fund seeks to maximize total return through capital appreciation and income. To pursue its goal, the fund normally invests at least 80% of its net assets in fixed income securities. The fund's portfolio managers normally allocate 0% to 70% of the fund's net assets in each of these four categories of market sectors: (1) the below investment grade (high yield) sector; (2) the U.S. government, investment grade corporate, mortgage and asset-backed sectors; (3) the foreign debt securities of developed markets sector, and; (4) the foreign debt securities of emerging markets sector. The fund is not managed to a benchmark index. Rather than managing to track a benchmark index, the fund seeks to provide returns that are largely independent of market moves. The average effective duration of the fund's portfolio typically will range between negative three (-3) and seven (7) years.
Bond Risk: Bonds are subject generally to interest rate, credit, liquidity, call and market risks, to varying degrees. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes and rate increases can cause price declines.
Credit Risk: High yield bonds are subject to increased credit risk and are considered speculative in terms of the issuer's perceived ability to continue making interest payments on a timely basis and to repay principal upon maturity.
Derivatives Risk: A small investment in derivatives could have a potentially large impact on the fund's performance. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value.
Foreign Currency Risk: Investments in foreign currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged.
Foreign Investment Risk: To the extent the fund invests in foreign securities, its performance will be influenced by political, social and economic factors affecting investments in foreign companies. These special risks include exposure to currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability, and differing auditing and legal standards.
Negative Duration Risk: The fund may use derivatives such as futures to target a negative duration exposure. Negative duration is a situation in which the price of a bond (or portfolio) moves in the same direction as interest rates. The fund may pursue this strategy to reduce interest rate risk, for hedging purposes, or to enhance returns, based on interest rate expectations. Duration is not a complete measure of bond risk and there is no guarantee that such a strategy will be successful.
Investors should consider the investment objectives, risks, charges, and expenses of the fund carefully before investing. Download a prospectus, or a summary prospectus, if available, that contains this and other information about the fund, and read it carefully before investing.