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Waddell & Reed Advisors Wilshire Global Allocation Fund

  • $8.90 NAV as of 9/19/2017
  • ($0.01) / 0.11% Daily NAV Change
  • 12.23% YTD (NAV)

Summary

Bringing the world to a single fund

GLOBAL VIEW
A "fund-of-funds" that allocates assets among a diverse group of affiliated equity and fixed income mutual funds with both domestic and foreign investment strategies.
BROAD ALLOCATION
Asset allocation methodology provides diversified exposure to a broad array of asset classes and investment strategies via the underlying funds.
LONG-TERM APPROACH
Investment philosophy focuses on a disciplined, long-term approach to strategic asset allocation.

Morningstar Style Box

Blend
Large
LTD
Low
Source: Morningstar

Portfolio Management

Nathan Palmer, CFA

  • Wilshire Associates, Inc. (Sub-adviser)
  • <1 Year with Fund
  • 20 Years in Industry
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Nathan Palmer is a managing director of Wilshire Associates and heads Wilshire Funds Management's portfolio management group. Mr. Palmer has more than 18 years of industry experience and is responsible for creating multi-asset class, multimanager investment solutions for financial intermediary clients. He is the Chair of Wilshire Funds Management's Retirement Oversight Committee and a voting member of its Investment Committee. Prior to joining Wilshire Associates, Mr. Palmer provided investment advice to endowment, foundation, and family office clients at Convergent Wealth Advisors. Previously, he managed the public market investment portfolios for the endowment at the California Institute of Technology and for the defined benefit and defined contribution retirement assets at Intel Corporation. Mr. Palmer began his career as a securities analyst, where he published equity research on the technology, media, and telecom industries. Mr. Palmer graduated Phi Beta Kappa and cum laude from the University of Washington with a BA in business administration. He holds an MBA with High Distinction from the Stern School of Business, New York University, graduating as an Armando John Garville Memorial Scholar. Mr. Palmer holds the Chartered Financial Analyst designation and is an active member of the CFA Institute and the CFA Society of Los Angeles.

Anthony Wicklund, CAIA , CFA

  • Wilshire Associates, Inc. (Sub-adviser)
  • <1 Year with Fund
  • 16 Years in Industry
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Tony Wicklund is a vice president of Wilshire Associates and a portfolio manager with Wilshire Funds Management. Mr. Wicklund has more than 16 years of industry experience and is a portfolio manager for multi-manager, multi-asset class portfolios, including target-risk, target-date, and alternative investment portfolios for a range of financial intermediary clients. He is also a voting member of the Wilshire Funds Management Investment Committee. Prior to joining Wilshire Associates in 2013, Mr. Wicklund was the Director of Risk Management at Convergent Wealth Advisors, where he led the firm's investment risk management and operational due diligence efforts. Additionally, he served as chairman of the firm's Risk Management Oversight Committee and was a voting member of the Investment Committee. Mr. Wicklund also developed extensive experience researching alternatives investment strategies and investment managers and building customized investment portfolios for Convergent Wealth Advisor clients. Mr. Wicklund earned his BS in business administration, with a concentration in finance from the University of Oregon. He also holds an MBA from the Marshall School of Business, University of Southern California, with a concentration in investments and financial markets. Mr. Wicklund holds the Chartered Financial Analyst and Chartered Alternative Investment Analyst designations, and is a member of the CFA Society of Los Angeles and serves as a chapter executive for CAIA Los Angeles.

Elizabeth Yakes, CFA

  • Wilshire Associates, Inc. (Sub-adviser)
  • <1 Year with Fund
  • 9 Years in Industry
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Liz Yakes is a vice president of Wilshire Associates and a member of Wilshire Funds Management's portfolio management group. Prior to joining Wilshire Associates in 2012, Ms. Yakes worked as a senior consultant at Ernst & Young supporting credit risk regulatory compliance initiatives for banking and capital markets clients. Ms. Yakes earned a BS in industrial engineering and a BS in integrated business and engineering from Lehigh University. She also holds an MBA from the Marshall School of Business, University of Southern California. She holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the CFA Society of Los Angeles.

Cynthia P. Prince-Fox

  • Waddell & Reed Investment Management Company
  • 3 Years 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

  • Waddell & Reed Investment Management Company
  • 3 Years 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.

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

Perspectives

Quarterly Fund Commentary

Daily Prices as of 9/19/2017

Net Asset Value (NAV) $8.90
Daily NAV Change ($) ($0.01) 0.11%
Weekly NAV Change ($) $0.04 0.45%
Public Offering Price (POP) $9.44

Fund Facts

Ticker Symbol UNASX
CUSIP 930057237
Fund Code 684
Fund Type Specialty Funds
Fund Inception 3/9/1995
Class Inception 3/9/1995
Fiscal Year End June
Dividends Paid March, June, September, December
Fund Assets (as of 8/31/2017) $1.7 bil
Portfolio Turnover Rate (as of 6/30/2017) 156%
Lipper Category Flexible Portfolio Funds
Morningstar Category World Allocation
Benchmark MSCI ACWI Index
Benchmark 65% MSCI ACWI / 35% Bloomberg Barclays Multiverse USD Hedged

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 5.75% sales charge 4.16% 2.10% -3.84% 3.57% 4.14% 8.43%
Lipper Flexible Portfolio Funds 7.98% 8.79% 2.51% 5.95% 4.35% 7.92%
Fund at NAV 10.47% 8.28% -1.93% 4.81% 4.76% 8.72%
65% MSCI ACWI / 35% Bloomberg Barclays Multiverse USD Hedged 10.68% 11.15% 4.93% 8.07% 4.69%
MSCI ACWI Index 15.03% 17.11% 5.58% 10.46% 4.23%

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 Multiverse Bond USD Hedged 1.68% 0.24% 3.37% 3.52% 4.63%
Fund with 5.75% sales charge 2.14% 2.02% -4.49% 3.96% 4.27% 8.40%
Lipper Flexible Portfolio Funds 5.95% 9.61% 2.01% 6.04% 4.04% 7.89%
65% MSCI ACWI / 35% Bloomberg Barclays Multiverse USD Hedged 7.96% 11.99% 4.45% 8.15% 4.38%
Fund at NAV 8.32% 8.19% -2.59% 5.20% 4.89% 8.69%
MSCI ACWI Index 11.48% 18.79% 4.82% 10.54% 3.71%

Calendar Year Return

  2012
Class A 18.91 25.25 -5.27 -8.22 -2.70

Morningstar Ratings as of 8/31/2017 Morningstar Logo

Category: World Allocation
Ratings are based on risk-adjusted returns
Overall out of 402
3 Year out of 402
5 Year out of 343
10 Year out of 162

Lipper Ranking through 8/31/2017 Lipper Logo

Category: Flexible Portfolio Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 332/628 53
3 Year 432/464 93
5 Year 259/354 73
10 Year 56/162 35

Expense Ratios as of 5/18/2017

Net 1.21%
Gross 1.14%

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

MSCI ACWI Index N/A
65% MSCI ACWI / 35% Bloomberg Barclays Multiverse USD Hedged N/A

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

*Modern Portfolio Theory
Alpha -5.76
Beta 0.78
R-Squared 66.73
Sharpe Ratio 0.51
Capture Ratio Upside: 61.09%
Downside: 109.28%

Distributions

Historical Prices Inception 3/9/1995

9/1/2017 $8.77 NO NO
9/5/2017 $8.75 NO NO
9/6/2017 $8.76 NO NO
9/7/2017 $8.80 NO NO
9/8/2017 $8.80 NO NO
9/11/2017 $8.85 NO NO
9/12/2017 $8.86 NO NO
9/13/2017 $8.86 NO NO
9/14/2017 $8.86 NO NO
9/15/2017 $8.87 NO NO
9/18/2017 $8.89 NO NO
9/19/2017 $8.90 NO NO

Historical Distributions Inception 3/9/1995

12/11/2014 $0.0798 Long: $2.201 Short: $0.000 $8.96 12/11/2014
12/12/2013 $0.0484 Long: $0.497 Short: $0.000 $11.35 12/12/2013
12/13/2012 $0.2166 Long: $0.000 Short: $0.000 $9.68 12/13/2012
12/8/2011 $0.1019 Long: $0.000 Short: $0.000 $8.64 12/8/2011
12/9/2010 $0.089 Long: $0.000 Short: $0.000 $9.25 12/9/2010

*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.

Market Capitalization
as a % of equity assets as of 7/31/2017

Large 0.0%
Medium 100.0%
Small 0.0%
Median Market Cap (as of )

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

Diversified Banks 7.5%
Internet Software & Services 5.4%
Integrated Oil & Gas 3.2%
Automobile Manufacturers 3.0%
Technology Hardware, Storage & Peripherals 2.5%
Pharmaceuticals 2.5%
Packaged Foods & Meats 2.5%
Biotechnology 2.4%
Semiconductors 2.2%
Data Processing & Outsourced Services 2.2%

Maturity
as a % of fixed income assets as of 4/30/2017

<1 Year 46.9%
1-5 Years 26.7%
5-10 Years 19.4%
10-20 Years 0.0%
>20 Years 7.0%
Average Maturity 4.16 years
Effective Duration 3.06 years

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

United States 77.0%
Germany 2.9%
Canada 1.7%
Mexico 1.3%
United Kingdom 1.1%
Netherlands 1.0%
Luxembourg 0.9%
Brazil 0.8%
Norway 0.8%
Argentina 0.7%
Indonesia 0.7%
Chile 0.7%
Turkey 0.6%
Columbia 0.6%
South Africa 0.5%
Uruguay 0.5%
Thailand 0.5%
Australia 0.5%
Poland 0.5%
Peru 0.5%
France 0.5%
Sweden 0.4%
Italy 0.4%
Hungary 0.4%
Japan 0.4%
Cayman Islands 0.4%
Russia 0.4%
Romania 0.4%
Philippines 0.3%
Czech Republic 0.3%
Malaysia 0.3%
Denmark 0.3%
Ireland 0.2%
India 0.2%
Spain 0.2%
Panama 0.2%
China 0.1%
United Arab Emirates 0.1%
South Korea 0.1%
Qatar 0.1%
Hong Kong 0.1%
Singapore 0.1%
Sri Lanka 0.1%
Bermuda 0.1%
Austria 0.1%
Croatia 0.1%
Cameroon 0.0%
Bahamas 0.0%
Macau 0.0%
Saudi Arabia 0.0%
Venezuela 0.0%
Tunisia 0.0%
Egypt 0.0%
Bahrain 0.0%
Jersey 0.0%
Guernsey 0.0%
Jamaica 0.0%
Belgium 0.0%
British Virgin Islands 0.0%
Euro 0.0%
Israel 0.0%
Saint Lucia 0.0%

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

Ivy International Core Equity 24.1 %
Waddell & Reed Advisors Government Securities 9.4 %
Ivy Emerging Markets Equity 8.1 %
Ivy Advantus Bond 8.0 %
Ivy Large Cap Growth 7.0 %
Ivy Value 6.7 %
Ivy Pictet Targeted Return Bond 4.9 %
Ivy Core Equity 4.5 %
Ivy European Opportunities 4.0 %
Waddell & Reed Advisors Bond 3.5 %
Ivy Apollo Strategic Income 3.5 %
Ivy Pictet Emerging Markets Local Currency Debt 3.0 %
Ivy LaSalle Global Real Estate 2.5 %
Ivy Mid Cap Growth 2.0 %
Ivy PineBridge High Yield 2.0 %
Ivy Mid Cap Income Opportunities 1.9 %
Ivy Small Cap Growth 1.5 %
Ivy Small Cap Core 1.4 %

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

Information Technology 19.11%
Financials 17.78%
Consumer Discretionary 12.71%
Industrials 11.59%
Health Care 9.09%
Consumer Staples 8.65%
Energy 7.48%
Materials 5.04%
Real Estate 5.02%
Telecommunication Services 2.96%
Utilities 0.57%

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 43.50%
NonRated 3.60%
AAA 5.40%
AA 3.20%
A 7.80%
BBB 20.60%
BB 8.80%
B 6.30%
CCC 0.80%
Below CCC 0.00%

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

Foreign Common Stock 36.97%
Domestic Common Stock 25.45%
Government Bonds 14.03%
Corporate Bonds 11.21%
Cash and Cash Equivalents 4.89%
Other Government Securities 4.60%
Asset-Backed Securities 1.05%
Mortgage-Backed Securities 0.65%
Senior Loans 0.53%
Other Financial Instruments 0.41%
Revenue Bonds 0.12%
Preferred Stock 0.07%
General Obligation Bonds 0.02%

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

United States 40.5%
United Kingdom 8.2%
Japan 7.1%
France 6.8%
China 5.6%
Germany 5.6%
Switzerland 3.1%
Netherlands 2.6%
Brazil 2.4%
South Korea 2.2%
India 2.1%
Australia 1.9%
Hong Kong 1.7%
Canada 1.6%
Ireland 1.3%
Taiwan 1.1%
Norway 1.0%
Russia 0.8%
Spain 0.7%
Turkey 0.6%
Sweden 0.6%
Italy 0.5%
Luxembourg 0.4%
Mexico 0.3%
South Africa 0.3%
Indonesia 0.3%
Chile 0.3%
Macau 0.2%
Malaysia 0.2%
Argentina 0.1%
Israel 0.1%
Denmark 0.1%
Singapore 0.0%
Thailand 0.0%
Belgium 0.0%

Total Portfolio Holdings

Updated quarterly, upon availability.

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.

Risk factors: The value of the Fund's shares will change, and you could lose money on your investment. The performance of the Fund will depend on the success of the allocations among the chosen underlying funds, and in general, the Fund is subject to the same risks as those of its underlying funds. International 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 are subject to interest-rate risk and, as such, the net asset value of the Fund may fall as interest rates rise. Investing in high-income securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds.Restricted securities, which include private placements, are securities that are subject to legal or contractual restrictions on resale, and there can be no assurance of a ready market for resale. Privately placed securities and other restricted securities will have the effect of increasing the level of Fund illiquidity to the extent that the Fund finds it difficult to sell these securities when management believes it is desirable to do so, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, and the prices realized could be less than those originally paid or less than the fair market value. These and other risks are more fully described in the fund's prospectus. Not all funds or fund classes may be offered at all broker/ dealers.

Diversification does not guarantee a profit or protect against loss in a declining market. It is a method to manage risk.

Prior to May 18, 2017, the Fund compared its performance to the S&P 500 Index, Bloomberg Barclays U.S. Aggregate Bond Index and Bloomberg Barclays U.S. Treasury Bills: 1-3 Month Index. Effective May 18, 2017, the Fund changed its principal investment strategies to invest in underlying affiliated funds. Underlying affiliated funds consist of WADDELL & REED ADVISORS FUNDSSM mutual funds, or IVY FUNDS® mutual funds, distributed by Ivy Distributors, Inc., an affiliate of Waddell & Reed, Inc. Going forward, the Fund will show its performance compared to other, more applicable benchmark indices as shown and will no longer compare its performance to the three prior indexes.

Index description: The MSCI ACWI Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.The MSCI ACWI consists of 46 country indexes comprising 23 developed and 23 emerging market country indexes. The developed market country indexes included are: Australia,Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,Switzerland, the United Kingdom and the United States. The emerging market country indexes included are: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary,India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey* and United Arab Emirates.

Index description: The Waddell & Reed Advisors Wilshire Global Allocation Fund Custom Benchmark is a blend of 65% MSCI ACWI, a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets and 35% Bloomberg Barclays Multiverse Bond Index (USD Hedged), an index that provides a broad-based measure of the global fixed-income bond market.

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.

Fee Waiver and/or Expense Reimbursement: Through October 31, 2018, Waddell & Reed Investment Management Company (WRIMCO), the Fund's investment manager, Waddell & Reed, Inc., the Fund's distributor, and/or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Fund's transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees, shareholder servicing fees and/or acquired fund fees and expenses to cap the total annual ordinary fund operating expenses (which would exclude interest, taxes, brokerage commissions and extraordinary expenses, if any) for the Fund's Class A shares at 1.14%, Class B at 2.01%, Class C shares at 1.91% and Class Y shares at 0.83%. Prior to that date, the expense limitation may not be terminated without the consent of the Board of Trustees. Certain common expenses applicable to all share classes also may be waived to cap total annual ordinary fund operating expenses, which may serve to reduce the expense ratio of certain share classes below its respective expense cap.

Effective May 18, 2017, the name of the Fund changed from Waddell & Reed Advisors Asset Strategy Fund to Waddell & Reed Advisors Wilshire Global Allocation Fund, and the Fund changed its investment strategy to operate as a “fund of funds.” The Fund’s performance prior to that date reflects the Fund’s former strategy; its performance may have differed if the Fund’s current strategy had been in place.

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.

30-Day SEC Yield: is calculated based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30 day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.

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.

The Fund is sub-advised by Wilshire Associates, Inc., through its Wilshire Funds Management business unit.

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

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