The Portfolio seeks to maximize long-term income, to the extent consistent with prudent investment management and preservation of capital, through investment in bonds and other income-producing securities.
The Portfolio uses an active strategy, seeking relative value to earn incremental income. The Portfolio typically invests at least 65% of its net assets in investment-grade debt securities, as assessed at the time of purchase. The remaining 35% of Portfolio net assets may be in below-investment grade, high-yield debt securities. These securities involve greater risk of default or price declines than investment grade debt securities. The Portfolio invests principally in bonds issued by U.S. corporations, the U.S. government or its agencies, and U.S. government-sponsored enterprises . The Portfolio may also invest in trust preferred securities, taxable municipal securities, asset-backed securities, including commercial mortgage-backed securities, repurchase agreements, and foreign debt securities. The Portfolio seeks to avoid investing in tobacco companies.
Investment in mutual funds involves risk, including possible loss of principal invested. You could lose money on your investment in the Portfolio or the Portfolio could underperform because of the following risks: the market prices of bonds held by the Portfolio may fall; individual investments of the Portfolio may not perform as expected; and/or the Portfolio’s portfolio management practices may not achieve the desired result. Bond funds are subject to interest rate risk and credit risk. When interest rates rise, the value of fixed-income securities will generally fall. In addition, the credit quality of the securities may deteriorate, which could lead to default or bankruptcy of the issuer where the issuer becomes unable to pay its obligations when due. An active trading style can result in higher turnover (exceeding 100%), may translate to higher transaction costs, may increase your tax liability, and may affect Portfolio performance. The Portfolio is nondiversified and may be more volatile than a diversified fund.