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InvestEd Balanced Portfolio

  • $12.08 NAV as of 9/21/2017
  • ($-0.01) / -0.08% Daily NAV Change
  • 12.27% YTD (NAV)

Summary

To seek to provide total return through a combination of capital appreciation and current income.

The Portfolio is intended for investors who have a lower tolerance for risk than more aggressive investors and who are seeking both growth and income, who have a longer time horizon, or who are willing to accept moderate short-term price fluctuations in exchange for potential longer-term returns. The Portfolio is also designed for investors who plan to maintain their investments, and who do not expect to incur expenses related to higher education, for at least eight years.

Morningstar Style Box

Growth
Large
LTD
Low
Source: Morningstar

Portfolio Management

Cynthia P. Prince-Fox

  • Ivy Investment Management Company
  • 1 Year with Fund
  • 34 Years in Industry
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Cynthia P. Prince-Fox is a senior vice president of Ivy Investment Management Company and Waddell & Reed Investment Management Company. Ms. Prince-Fox joined the firm in 1983 as an equity investment analyst. In 1991, she assumed the role of assistant portfolio manager. In 1993, she was appointed portfolio manager of Waddell & Reed Advisors Continental Income Fund. In July 2013, Ms. Prince-Fox was named portfolio manager of the Waddell & Reed Advisors Dividend Opportunities Fund. In August 2014, she was appointed portfolio manager of the Ivy Asset Strategy Fund, Ivy VIP Asset Strategy and Waddell & Reed Advisors Asset Strategy Fund, which was renamed with an investment mandate change in May 2017 to Waddell & Reed Advisors Wilshire Global Allocation Fund. She graduated in 1982 from St. Mary's University at San Antonio, Texas with a BBA degree in finance. She earned an MBA with an emphasis in finance from Rockhurst College in 1989.

Chace Brundige, CFA

  • Ivy Investment Management Company
  • 1 Year with Fund
  • 24 Years in Industry
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Chace Brundige, CFA is a senior vice president of Ivy Investment Management Company and Waddell & Reed Investment Management Company. Mr. Brundige began his investment career at UMB Financial Corp. in 1991. In 1996, he joined our firm as an equity investment analyst but left in 1999 to join TCW/WestBridge Ventures LLC in San Francisco as a vice president and limited partner. Mr. Brundige rejoined our firm 2003 as an assistant portfolio manager to the large-cap growth team. He managed the Waddell & Reed Advisors Tax-Managed Equity Fund from February 2006 through December 2008. Mr. Brundige assumed portfolio manager responsibility for the Waddell & Reed Advisors International Growth Fund, Ivy Funds VIP International Growth (formerly W&R Target Funds International Growth Portfolio), and the Ivy International Growth Fund in January 2009. In August 2014, Mr. Brundige was appointed portfolio manager of the Ivy Asset Strategy Fund, Ivy VIP Asset Strategy and Waddell & Reed Advisors Asset Strategy Fund, which was renamed with an investment mandate change in May 2017 to Waddell & Reed Advisors Wilshire Global Allocation Fund. . Mr. Brundige graduated from Kansas State University in 1991 with a BS in finance. He earned an MBA with an emphasis in finance and accounting from the University of Chicago Graduate School of Business in 1996.

Aaron D. Young

  • Ivy Investment Management Company
  • <1 Year with Fund
  • 12 Years in Industry
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Aaron Young is co-portfolio manager of Ivy Managed International Opportunities Fund since 2016. He is a portfolio manager of Ivy VIP Pathfinder Portfolios and InvestEd Portfolios since 2016. Mr. Young joined Waddell & Reed in 2005 as a fixed income investment analyst with an emphasis in credit research and derivative securities. He joined the Asset Strategy team as an investment analyst in 2007. He covered brokers, asset managers and exchanges as an equity investment analyst during 2008. He was named assistant portfolio manager of Ivy and Ivy VIP Asset Strategy Funds in 2012 and continues to serve in that role. He was appointed assistant vice president in 2012 and vice president in 2014. Mr. Young graduated with honors in 2000 with a BA in Philosophy from the University of Missouri. He earned an MBA with a concentration in Finance and Strategy from the Olin School of Business, Washington University in St. Louis in 2005.

Growth of a $10,000 Investment
through 8/31/2017

Assumes an investment over 10 years or life of the share class, reinvestment of dividends and capital gains, and does not include the effect of sales charges or taxes.

Documents

Daily Prices as of 9/21/2017

Net Asset Value (NAV) $12.08
Daily NAV Change ($) ($-0.01) -0.08%
Weekly NAV Change ($) $0.02 0.17%
Public Offering Price (POP) $12.39

Fund Facts

Ticker Symbol WBLAX
CUSIP 46132D303
Fund Code 802
Fund Type InvestEd
Fund Inception 10/1/2001
Class Inception 10/1/2001
Fiscal Year End December
Dividends Paid December
Fund Assets (as of 8/31/2017) $178.4 mil
Portfolio Turnover Rate (as of 6/30/2017) 9%
Lipper Category Mixed-Asset Target Alloc Growth Funds
Benchmark BBgBarc US Universal TR USD
Benchmark MSCI ACWI Ex USA NR USD
Benchmark BBgBarc US Govt/Credit 1-5 Yr TR USD
Benchmark 9% BBgBarc US Govt/Credit 1-5 Yr TR USD; 31% BBgBarc US Universal TR USD; 18% MSCI ACWI Ex USA NR USD; 42% Russell 3000 TR USD
Benchmark Russell 3000 TR USD

Performance

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Performance at NAV does not include the effect of sales charges, if it had, performance shown would be lower. Class A shares, including sales charges, reflects the maximum applicable front-end sales load.

Monthly Rates of Return

Average Annual Total Returns as of 8/31/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund with 2.50% sales charge 4.73% 4.85% 2.55% 6.63% 4.49% 5.59%
Lipper Mixed-Asset Target Alloc Growth Funds 9.46% 10.93% 4.82% 8.69% 5.05% 6.27%
Fund at NAV 11.15% 11.23% 4.60% 7.89% 5.11% 5.99%

Quarterly Rates of Return

Average Annual Total Returns as of 6/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Bloomberg Barclays US Treasury Bill 1-3 Mon TR USD 0.30% 0.45% 0.20% 0.14% 0.50% 1.26%
Fund with 2.50% sales charge 1.49% 4.91% 1.76% 6.51% 4.19% 5.45%
Bloomberg Barclays US Agg Bond TR USD 2.27% -0.31% 2.48% 2.21% 4.48% 4.51%
Lipper Mixed-Asset Target Alloc Growth Funds 7.42% 12.31% 4.49% 8.92% 4.75% 6.22%
Fund at NAV 7.71% 11.31% 3.79% 7.79% 4.81% 5.84%
S&P 500 TR USD 9.34% 17.90% 9.61% 14.63% 7.18% 7.66%

Calendar Year Return

  2012
BBgBarc US Govt/Credit 1-5 Yr TR USD 2.24 0.28 1.42 0.97 1.56
BBgBarc US Universal TR USD 5.53 -1.35 5.56 0.43 3.91
9% BBgBarc US Govt/Credit 1-5 Yr TR USD; 31% BBgBarc US Universal TR USD; 18% MSCI ACWI Ex USA NR USD; 42% Russell 3000 TR USD 12.03 15.64 6.48 -0.26 7.79
Russell 3000 TR USD 16.42 33.55 12.56 0.48 12.74
MSCI ACWI Ex USA NR USD 16.83 15.29 -3.87 -5.66 4.50
Class A 19.11 4.72 0.72 2.17

Morningstar Ratings as of 8/31/2017 Morningstar Logo

Category:
Ratings are based on risk-adjusted returns
Overall out of 723
3 Year out of 723
5 Year out of 652
10 Year out of 452

Lipper Ranking through 8/31/2017 Lipper Logo

Category: Mixed-Asset Target Alloc Growth Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 250/509 50
3 Year 281/457 62
5 Year 332/424 79
10 Year 167/317 53

Expense Ratios as of 9/18/2017

Net 0.96%
Gross 0.96%

5-Year Standard Deviation as of 8/31/2017

BBgBarc US Universal TR USD 2.77
MSCI ACWI Ex USA NR USD 11.62
BBgBarc US Govt/Credit 1-5 Yr TR USD 1.23
9% BBgBarc US Govt/Credit 1-5 Yr TR USD; 31% BBgBarc US Universal TR USD; 18% MSCI ACWI Ex USA NR USD; 42% Russell 3000 TR USD 6.04
Russell 3000 TR USD 9.80

5-Year MPT* Statistics as of 8/31/2017

*Modern Portfolio Theory
Alpha -1.67
Beta 1.16
R-Squared 90.40
Sharpe Ratio 1.05
Capture Ratio Upside: 102.95%
Downside: 117.32%

Distributions

Historical Prices Inception 10/1/2001

9/1/2017 $11.97 NO NO
9/5/2017 $11.93 NO NO
9/6/2017 $11.95 NO NO
9/7/2017 $11.98 NO NO
9/8/2017 $11.96 NO NO
9/11/2017 $12.05 NO NO
9/12/2017 $12.07 NO NO
9/13/2017 $12.07 NO NO
9/14/2017 $12.06 NO NO
9/15/2017 $12.07 NO NO
9/18/2017 $12.10 NO NO
9/19/2017 $12.10 NO NO
9/20/2017 $12.09 NO NO
9/21/2017 $12.08 NO NO

Historical Distributions Inception 10/1/2001

12/13/2016 $0.0976 Long: $0.832 Short: $0.006 $10.86 12/13/2016
12/15/2015 $0.1541 Long: $0.865 Short: $0.005 $11.39 12/15/2015
12/16/2014 $0.2125 Long: $1.069 Short: $0.042 $12.05 12/16/2014
12/17/2013 $0 Long: $0.260 Short: $0.002 $12.83 12/17/2013
12/18/2012 $0.1435 Long: $0.195 Short: $0.074 $11.27 12/18/2012

*Special Dividend
The table includes the daily prices at NAV (net asset value) for the history of this fund's selected share class. NAV is the amount per share you would receive if you sold shares that day.

Portfolio

Total Portfolio Holdings

Updated quarterly, upon availability.

Top 10 Industry Allocation
as a % of Equity Holdings as of 8/31/2017

Internet Software & Services 8.6%
Data Processing & Outsourced Services 8.1%
Biotechnology 4.5%
Systems Software 4.3%
Aerospace & Defense 3.8%
Application Software 3.8%
Semiconductors 3.4%
Technology Hardware, Storage & Peripherals 3.0%
Internet & Direct Marketing Retail 3.0%
Semiconductor Equipment 2.9%

Fixed Income Country Allocation
as a % of bond holdings as of 8/31/2017

United States 67.9%
United Kingdom 3.4%
Argentina 2.9%
Mexico 2.8%
Netherlands 2.6%
Luxembourg 2.2%
Brazil 2.1%
Columbia 2.1%
Chile 2.0%
Canada 1.7%
Singapore 1.3%
Japan 1.0%
Ireland 0.7%
India 0.6%
Indonesia 0.6%
Russia 0.6%
Cayman Islands 0.5%
Qatar 0.5%
South Africa 0.5%
Spain 0.5%
United Arab Emirates 0.4%
Peru 0.4%
France 0.4%
Norway 0.4%
China 0.3%
Austria 0.3%
Hong Kong 0.3%
Turkey 0.2%
Australia 0.2%
British Virgin Islands 0.2%
Saudi Arabia 0.2%
Jamaica 0.1%
Macau 0.1%
Sweden 0.1%
Denmark 0.0%
Guernsey 0.0%
Barbados 0.0%

Underlying Fund Composition
as a % of net assets as of 8/31/2017

Waddell & Reed Advisors Vanguard 20.6 %
Waddell & Reed Advisors Core Investment 20.5 %
Waddell & Reed Advisors Global Growth 18.1 %
Waddell & Reed Advisors Global Bond 14.8 %
Ivy Limited-Term Bond 12.3 %
Waddell & Reed Advisors New Concepts 5.7 %
Waddell & Reed Advisors High Income 2.5 %
Waddell & Reed Advisors Bond 2.5 %
Waddell & Reed Advisors Value 1.9 %
Waddell & Reed Advisors Dividend Opportunities 1.0 %

Portfolio Allocation Ranges
(as of the most recent prospectus)

  Low High
Waddell & Reed Advisors Bond <sup>1</sup> 0.0 % 25.0 %
Ivy ProShares S&P 500 Bond Index 0.0 % 25.0 %
Waddell & Reed Advisors Government Securities <sup>1</sup> 0.0 % 25.0 %
Ivy Large Cap Growth 0.0 % 25.0 %
Ivy Value 0.0 % 25.0 %
Ivy Government Money Market 0.0 % 25.0 %
Ivy Dividend Opportunities 0.0 % 25.0 %
Ivy Limited-Term Bond 0.0 % 25.0 %
Ivy Advantus Bond 0.0 % 25.0 %
Ivy ProShares S&P 500 Dividend Aristocrats Index 0.0 % 25.0 %
Ivy Core Equity 0.0 % 25.0 %
Ivy High Income 0.0 % 20.0 %
Ivy International Core Equity 0.0 % 20.0 %
Ivy Apollo Strategic Income 0.0 % 20.0 %
Ivy ProShares Interest Rate Hedged High Yield Index 0.0 % 20.0 %
Ivy Global Bond 0.0 % 20.0 %
Ivy Global Growth 0.0 % 20.0 %
Ivy Proshares MSCI ACWI Index 0.0 % 20.0 %
Ivy ProShares Russell 2000 Dividend Growers Index 0.0 % 10.0 %
Ivy Small Cap Core 0.0 % 10.0 %
Ivy Mid Cap Growth 0.0 % 10.0 %
Ivy Emerging Markets Equity 0.0 % 10.0 %
Ivy Mid Cap Income Opportunities 0.0 % 10.0 %
Ivy LaSalle Global Real Estate 0.0 % 10.0 %
Ivy Small Cap Growth 0.0 % 10.0 %

Sector Allocation
as a % of equity assets as of 8/31/2017

Information Technology 36.59%
Consumer Discretionary 14.07%
Health Care 13.59%
Financials 11.47%
Industrials 11.35%
Consumer Staples 6.55%
Energy 4.53%
Materials 0.91%
Utilities 0.66%
Real Estate 0.27%
Telecommunication Services 0.01%

Quality
as a % of fixed income assets as of 8/31/2017

Quality: Ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.
Government Bonds 19.40%
NonRated 3.30%
AAA 0.80%
AA 6.00%
A 13.80%
BBB 29.70%
BB 12.50%
B 11.50%
CCC 3.00%
Below CCC 0.00%

Portfolio Composition
as a % of net assets as of 8/31/2017

Domestic Common Stock 57.38%
Corporate Bonds 20.87%
Foreign Common Stock 10.07%
Government Bonds 5.80%
Cash and Cash Equivalents 2.65%
Other Government Securities 2.08%
Senior Loans 0.49%
General Obligation Bonds 0.24%
Asset-Backed Securities 0.21%
Revenue Bonds 0.14%
Mortgage-Backed Securities 0.07%
Preferred Stock 0.00%

Equity Country Allocation
as a % of equity assets as of 8/31/2017

United States 84.3%
China 2.8%
France 2.1%
United Kingdom 1.9%
Japan 1.9%
Germany 1.8%
Netherlands 1.8%
Switzerland 0.7%
Italy 0.7%
Brazil 0.5%
Macau 0.3%
Mexico 0.3%
Canada 0.3%
Spain 0.2%
Panama 0.2%
Chile 0.1%
Israel 0.0%
Finland 0.0%
Ireland 0.0%
Belgium 0.0%

Total Portfolio Holdings

Updated quarterly, upon availability.

Documents

Select a document below to view or download.

Documents

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Past performance is not a guarantee of future results. Investments into a 529 plan, including the Ivy InvestEdSM 529 Plan, are not guaranteed, and all investments involve a certain degree of risk. The value of your Ivy InvestEdSM 529 Plan account will depend upon the performance of the Portfolios in which your account is invested and the Portfolio’s share price will likely change based on the performance of the underlying funds in which it invests.

The equity funds in which the Portfolio invests are subject to market risks, and certain types of stocks, such as stocks of small-capitalization companies and foreign companies may be subject to greater price volatility. Foreign investing involves additional risks, including currency fluctuations, political or economic conditions affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. Fixed income securities in which the Portfolio may invest are subject to interest rate risk and, as such, the net asset value of the Portfolio may fall as interest rates rise. Investing in below investment grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds. These and other risks are more fully described in the Portfolio's prospectus.

You could lose money by investing in the Ivy Government Money Market Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

Before investing, investors should consider the investment objectives, risks, charges and expenses associated with the Ivy InvestEdSM Plan carefully before investing. This and other information is found in the InvestEdSM Portfolios prospectus, and the Ivy Funds prospectus, the Ivy InvestEdSM 529 Plan Program Overview, and the InvestEdSM 529 Plan Account Application. Please encourage your clients to read the prospectus carefully before investing. An investor should also consider, before investing whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's 529 college savings plan.

Non-residents or tax-payers of states other than Arizona should consider participating in the 529 plan(s) available in their state of residence as such plan(s) may offer more favorable state income tax or other benefits than those offered under the Ivy InvestEdSM 529 Plan. Please consult your tax advisor regarding your personal tax situation.

The Ivy InvestEdSM 529 Plan and shares of InvestEdSM Portfolios are offered by Waddell & Reed, Inc. as part of the Arizona Family College Savings Program Trust Fund, a 529 plan administered by the Arizona Commission for Postsecondary Education (the “Program”). Waddell & Reed, Inc. is one of multiple financial Institutions eligible to offer Investments under the Program. Accounts a not insured by the State of Arizona, the Trust, the Arizona Commission for Postsecondary Education, or any other governmental entity, Waddell & Reed, Inc., Ivy Distributors, Inc., or any affiliated or related party, and neither the principal deposited nor the Investment return is guaranteed by any of the referenced parties.

The Bloomberg Barclays U.S. Universal Index represents the union of the U.S. Aggregate Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index, and the non-ERISA portion of the CMBS Index. Municipal debt, private placements, and non-dollar-denominated issues are excluded from the Universal Index. The only constituent of the index that includes floating-rate debt is the Emerging Markets Index. Source: Bloomberg Barclays

The MSCI ACWI ex USA Index captures large and mid-cap representation across 22 of 23 Developed Markets (DM) countries (excluding the U.S.) and 24 Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. It is not possible to invest directly in an index.

The MSCI information may only be used for your internal use, may not be reproduced or repurposed in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, salability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com) Source: MSCI.

The Bloomberg Barclays U.S. 1-5 Year Government/Credit Bond Index is the 1-5 year component of the Bloomberg Barclays U.S. Government/Credit Index, which includes treasuries, agencies, publicly issued U.S. corporate and foreign debentures & secured notes. To be included in the index, securities must have at least one, and up to, but not including five years to maturity. Source: Bloomberg Barclays

The Russell 3000® Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000® Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected. Source: FTSE Russell

Performance results for some funds may include the effect of expense reduction arrangements. If those arrangements had not been in place, the performance results would have been lower.

The Fund's Board of Directors has established target ranges for the allocation of the portfolio's assets. The range of portfolio net assets invested in equity funds will be from 40% to 75%; correspondingly, the range of portfolio net assets invested in bond and income-producing funds will be from 60% to 25%. Subject to these asset allocation ranges, the Board of Directors has established these target ranges for investment of the portfolio's assets in specific underlying funds.

1Waddell & Reed Financial, Inc., parent firm to Waddell & Reed, Inc. and Ivy Distributors, Inc., announced that it intends to seek board approval to merge the funds in its WADDELL & REED ADVISORS FUNDSSM (WRA Funds) family into funds with substantially similar objectives and strategies in the affiliated IVY FUNDS® mutual funds family (Ivy Funds). The first phase will involve nine funds, including Waddell & Reed Advisors Bond Fund and Waddell & Reed Advisors Government Securities Fund, that are targeted to merge in early October. funds with substantially similar objectives and strategies in the affiliated IVY FUNDS® mutual funds family (Ivy Funds). The first phase will involve nine funds, including Waddell & Reed Advisors Bond Fund and Waddell & Reed Advisors Government Securities Fund, that are targeted to merge in early October.

Pricing: All prices and year-to-date returns are based on closing quotes unless noted, as supplied to the NASDAQ by 6:00 p.m. Eastern time. YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

Style Analysis: The Morningstar Style Box reveals a fund's investment style. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth). For fixed-income funds, the vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by the following Nationally Recognized Statistical Rating Organizations (NRSROs): Moody's, Standard & Poor's, Fitch, and Egan-Jones. If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. For example, if NRSRO X rates a security AA-, NRSRO Y rates the same security an A and NRSRO Z rates it a BBB+, the fund company should use the credit rating of 'A' in its reporting to Morningstar. PLEASE NOTE: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO rating on a fixed-income security can change from time-to-time. For credit quality, Morningstar combines the credit rating information provided by the fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of "low", "medium", or "high" based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than "BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; and high are those with a weighted-average credit quality of "AA-" or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar's analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund's interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI's average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive. For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases static breakpoints are utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In addition, for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greater than 6 years.

Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers. The adviser and its affiliates have or may voluntarily waive a portion of their fees (including, but not limited to, distribution and service (12b-1) fees) and reimburse certain expenses. There is no guarantee that the fund will avoid a negative yield. Such undertaking may be amended or withdrawn at any time.

12-Month Trailing Distribution Yield: at NAV refers to the 12-month historical cash flow paid over the past 12 months in dividends, divided by the past months ending NAV.

Alpha, Beta, R-Squared, Standard Deviation, Sharpe Ratio and Capture Ratio are 5 year statistics. Alpha is a measure of a fund's actual returns and expected performance, given its level of risk (as measured by beta). Beta reflects the sensitivity of the fund's return to fluctuations in the market index. R-squared indicates how much of a fund's fluctuations were attributable to movements in the fund's benchmark. Standard deviation is a measure of how volatile a fund's returns are. Sharpe ratio is a measure of a fund's risk-adjusted performance. Capture ratio reflects the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture).

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, and does not include the effects of sales charges. 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.

© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Quality: Ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.

Information is subject to change and is not intended to represent any past or future investment recommendations.

YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

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