Fund Description

The fund was incepted in September 1992 and is managed by Waddell & Reed Investment Management Company (WRIMCO). The goal of the fund is to provide a high level of current income consistent with preservation of capital. The fund seeks to achieve its goal by investing primarily in a diversified portfolio of investment-grade, limited-term debt securities (securities with a dollar-weighted average maturity of two to five years) of U.S. issuers, including collateralized mortgage obligations and other asset-backed securities and U.S. Government securities, which are securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Under normal market conditions, the fund invests at least 80% of its net assets in bonds with a limited-term duration. The fund may also own, to a lesser extent, common stocks and convertible securities, including convertible preferred stocks in certain circumstances. The fund declares dividends from net investment income daily and pays them monthly. Capital gains, if any, are paid annually.