Example. The following Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in a class of shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment
has a 5% return each year and that the Fund’s operating expenses remain the same. Any applicable fee waivers and/or expense reimbursements are reflected in the below examples for the first year only. Although
your actual costs may be higher or lower, based on these assumptions your expenses would be as follows, whether or not you redeemed your shares:
| 1 Year
| 3 Years
| 5 Years
| 10 Years
|
|
Class A
| $591
| $1,390
| $2,206
| $4,325
|
|
...
|
Class Y
| $96
| $574
| $1,079
| $2,471
|
|
...
|
Class I
| $77
| $442
| $832
| $1,925
|
|
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A
higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating
expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 23% of the average value of its portfolio.
Principal Investment
Strategies. Under normal circumstances, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in preferred and
other income producing securities. These securities include traditional preferred securities, hybrid preferred securities that have investment and economic characteristics of both preferred stock and debt securities,
floating rate preferred securities, corporate debt securities, convertible securities, and contingent capital securities (“CoCos”).
The Fund may also invest in
certain restricted securities including securities that are only eligible for resale pursuant to Rule 144A under the Securities Act of 1933 (the “Securities Act”) (referred to as Rule 144A Securities) and
securities of U.S. and non-U.S. issuers that are issued through private offerings without registration with the Securities and Exchange Commission (the “SEC”) pursuant to Regulation S under the Securities
Act.
The Fund may invest in debt
securities of any maturity or credit rating, including investment-grade securities, below investment grade securities and unrated securities. Although not required to do so, the Fund will generally invest in issuers
whose senior debt is rated at least BBB- or higher, which the Fund considers to be investment grade. Although a company’s senior debt rating may be BBB-, an underlying security issued by such company in which
the Fund invests may have a lower rating than BBB-.
The Fund also will invest at
least 25% of its assets in the financials sector, generally comprised of the bank, diversified financials (which may include asset management, brokerage services, specialized finance, and mortgage real estate
investment trusts) and insurance industries worldwide.
The Fund may invest without
limit in derivatives, including any derivatives contract or option on a derivatives contract, transaction or instrument, such as various futures contracts, interest rate and currency swaps, options, and other similar
strategic transactions. The Fund’s primary use of derivatives contracts will be to enter into interest rate and currency hedging transactions in order to manage the Fund’s interest rate risk and reduce
foreign currency risk associated with certain of the Fund’s investments.
The portfolio manager analyzes
the overall investment opportunities and risks associated with building a portfolio of preferred and other income producing securities and identifies opportunities that may be mispriced by the market. Such
opportunities will typically be identified through a rigorous analysis of an individual security’s structure, its sensitivity to interest rates as well as the fundamental characteristics of its company issuer.
Security selection and overall portfolio construction is further guided by the portfolio manager’s interest rate and sector outlook.
Principal Risks. The price of the Fund’s shares can go up and down substantially. The value of the Fund’s investments may fall due to adverse
changes in the markets in which the Fund invests or because of poor investment selection, which could cause the Fund to underperform other funds with similar investment objectives. There is no assurance that the Fund
will achieve its investment objective. When you redeem your shares, they may be worth less than what you paid for them. These risks mean that you can lose money by investing in the Fund.
Preferred Security Risk. Preferred securities generally are subordinated to bonds and other debt instruments in a company’s capital structure and, as such, have a lower priority claim on assets or earnings
than more senior debt instruments. As a result, preferred securities are subject to greater credit and liquidity risk than those instruments. In addition, preferred securities are subject to other risks, such as
having no or limited voting rights, being subject to special redemption rights, having distributions deferred or skipped, having floating interest rates or dividends, which may result in a decline in value in a
falling interest rate environment, changing tax treatments and possibly being issued by companies in heavily regulated industries.
Contingent Capital Security
Risk. CoCos are hybrid securities, issued primarily by non-U.S. financial institutions with loss absorption mechanisms benefitting the issuer built into their terms. Upon the occurrence of
specific triggers, such as the issuer’s capital ratio falling below a certain level, CoCos may be subject to automatic conversion into the issuer’s common stock, which likely will have declined in value
and which will be subordinate to the issuer’s other classes of securities, or to