1. | Comment: You have asked whether there is a percentage limitation on the investment by the RidgeWorth Intermediate Bond Fund and RidgeWorth Total Return Bond Fund (Funds) in foreign securities or whether the amount of investment is in the discretion of the adviser. | ||
Response: Generally the Funds are permitted by their investment policies to invest in foreign securities and have no specific limitation on the percentage of assets that may be invested in such securities. The Investment Strategy section of the prospectus discloses that the Funds investment in non-U.S. issuers may be significant. | |||
2. | Comment: You have asked whether there is a percentage limitation on the investment by the Funds in derivatives. | ||
Response: Generally the Funds are permitted by their investment policies to invest in derivative instruments and no specific limitation on the percentage of assets that may be committed to derivatives has been imposed on the Funds. | |||
3. | Comment: You have asked RidgeWorth whether it will continue to enter into credit default swaps, whether these will be used for hedging purposes or speculation and to disclose counterparty risk related to investing in such instruments. | ||
Response: The Subadviser currently expects to continue to enter into and use credit default swaps as disclosed in the prospectus, which may be used for hedging or speculative purposes. RidgeWorth will add disclosure regarding counterparty risk associated with credit default swaps. |
4. | Comment: You questioned the disclosure regarding the conflict of interest risk as it relates to floating rate loan risk, noting that the same risk could be true for any investment. | ||
Response: The purpose of the disclosure is to address the potential conflict of interest that exists when Seix Structured Products, LLC (SSP) is purchasing bank loans for the purpose of creating collateralized loan obligations (CLOs). This conflict of interest risk applies primarily to bank loans because bank loans comprise the vast majority (at least 90%) of the assets held by CLOs. The Subadviser developed trade allocation procedures to address potential conflicts of interest. | |||
5. | Comment: You have asked RidgeWorth to revise the risk disclosure regarding asset-backed and mortgage-backed securities to enhance the disclosure regarding credit and liquidity risks and the difficulty of valuing such instruments. | ||
Response: RidgeWorth will enhance the risk disclosure as requested. |
/s/ Cynthia Surprise
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