Fund Description

The fund was incepted in December 1998 and is managed by Waddell & Reed Investment Management Company (WRIMCO). The primary goal of the fund is to earn a high level of current income. As a secondary goal, the fund seeks capital growth when consistent with its primary goal. The fund seeks to achieve these goals by investing primarily in a diversified portfolio of high-yield, high-risk, fixed-income securities, the risks of which are, in the judgment of WRIMCO, consistent with the fund's goals. The fund invests primarily in lower quality bonds, commonly called junk bonds, which include bonds rated BB and below by Standard & Poor's and Ba and below by Moody's Corporation or, if unrated, deemed by WRIMCO to be of comparable quality. The fund may invest an unlimited amount of its total assets in junk bonds. The fund may invest in bonds of any maturity and in companies of any size. The fund may invest up to 20% of its total assets in common stocks in order to seek capital growth. The fund emphasizes a blend of value and growth in its selection of common stocks. The fund declares dividends from net investment income daily and pays them monthly. Capital gains, if any, are paid annually.