Fund Description

The fund normally invests at least 80% of net assets (plus borrowings) in income-producing securities such as U.S. government and agency obligations, mortgage- and asset-backed securities, corporate bonds, foreign bonds, and TIPS; qualifying derivatives count toward this policy. Over the long term, the fund seeks to achieve its objective by investing primarily in income-producing securities that it believes have favorable total return (income plus increases in principal value) characteristics. Generally, 80% of debt purchases are investment grade; up to 15% may be split-rated and net exposure to below-investment-grade instruments may be up to 5%. Up to 20% may be in non-U.S. dollar debt with currency positions. The fund has no maturity restrictions and may use derivatives such as futures, forwards, and swaps for exposure or hedging; it uses interest rate futures and interest rate swaps primarily to manage exposure to interest rate changes by adjusting duration, uses CDX primarily to hedge overall credit risk or gain sector exposure, and may transact in TBA mortgage-backed securities and dollar rolls and engage in short sales of TBA mortgages to potentially enhance returns or manage risk.