DJIA: The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. DJIA covers all industries with the exception of transportation and utilities.
S&P 500 Index: The S&P 500 Index is an unmanaged market capitalization-weighted index used to measure 500 companies chosen for market size, liquidity and industry grouping, among other factors.
Dividend-Paying vs. Non-Dividend-Paying Stocks: Each stock’s dividend policy is determined by its indicated annual dividend. Ned Davis Research classifies a stock as a dividend- paying stock if the company indicates that it is going to be paying a dividend within the year. A stock is classified as a non-payer if the stock’s indicated annual dividend is zero.
The index returns are calculated using monthly equal-weighted geometric averages of the total returns of all dividend-paying (or non-paying) stocks. A stock’s return is only included during the period it is a component of the S&P 500 Index. The dividend figure used to categorize the stock is the company’s indicated annual dividend, which may be different from the actual dividends paid in a particular month.Dividend-Growing, No-Change-In-Dividend, and Dividend-Cutting: Dividend Growers and Initiators include stocks that increased their dividend anytime in the last 12 months. Once an increase occurs, it remains classified as a Grower for 12 months or until another change in dividend policy. No-Change stocks are those that maintained their existing indicated annual dividend for the last 12 months (i.e., companies that have a static, non-zero dividend). Dividend Cutters and Eliminators are companies that have lowered or eliminated their dividend anytime in the last 12 months. Once a decrease occurs, it remains classified as a Cutter for 12 months or until another change in dividend policy.
You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Fund before investing. The Fund's prospectus and summary prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a current copy of the Fund's prospectus and summary prospectus by calling 888.966.9661.
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisers.
Unless otherwise stated, all information and opinions were produced by sources we believe to be accurate and are subject to change. Additional information may be required to make an informed investment decision. AAM may make a market in or have other financial interests in any given security with which this analysis suggests may be benefited from its conclusions. AAM does not offer tax advice. Past performance does not guarantee future results. Any forward looking statements are not to be considered as forecasts but rather are presented for your consideration.
Not FDIC Insured. Not Bank Guaranteed. May Lose Value.
Distributed by IMST Distributors, LLC | (866) 966-9661 | www.aamlive.com
Advisors Asset Management, Inc. (AAM) is an SEC-registered investment advisor and member FINRA/SIPC.
The performance data quoted represents past performance and is not a guarantee of future results. It is not possible to investin an index.
Dividend Payment Risk: An issuer of a security may be unwilling or unable to pay income on a security. Common stocks do not assure dividend payments and are paid only when declared by an issuer’s board of directors. The amount of any dividend may vary over time.
An investment in the Fund is subject to risks and you could lose money on your investment in the Fund. The principal risks of investing in the Fund include, but are not limited to, investing in foreign securities, investing in small-and mid-cap companies, and focused risk. The prices of foreign securities may be more volatile than the securities of U.S. issuers because of economic conditions abroad, political developments, and changes in the regulatory environment of foreign countries. Investments in small and mid-cap companies involve greater risks including increased price volatility compared to the market or larger companies. Although the Fund is diversified, the Sub-advisor intends to focus its investments in the securities of a comparatively small number of issuers. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers. More information about these risks may be found in the Fund’s prospectus.
1 Source: Ned Davis Research. The return of the price index is referred to as capital appreciation. Income return is assumed to be the Index’s total return minus its capital appreciation. Total Return = Capital appreciation plus reinvested dividends during the time period. Time period from stats above = 12/31/1929–3/31/2018
2 Source: Ned Davis Research. Based on equal-weighted geometric average of total returns (including dividends) of dividend-paying and non-dividend-paying historical S&P 500 Stocks. Uses Indicated Annual Dividends to identify dividend- paying stocks on a rolling 12-month basis.
[Source]
Definitions:
IMPORTANT INFORMATION:
Sources and Disclosures
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For more information on the AAM/Insight Select Income Fund, please contact your Financial Advisor or complete the form below and we will be in touch shortly.
About insight investment
High Yield in Rising Rate Environments
The Power of
Fixed Income Diversification
Presentation
Power of Dividend Growth
Presentation
Fact Card
Fact Card
Resources
Resources
Minimum Investment (Class I)
$25,000 initial/$5,000 subsequent
Minimum Investment (Class A/C)
$2,500 initial/$500 subsequent
Inception Date
April 19, 2013
Investment Style
Intermediate-Term Bond
Benchmark
Bloomberg Barclays U.S. Credit Bond Index
Strategy Overview
Opportunistic, income-oriented approach that seeks to identify opportunities with the overall goal of maintaining and increasing income for investors.
Investment Objective
Current Income
Ticker Symbols
Fund Facts
Class A: CPUAX / Class C: CPUCX / Class I: CPUIX
May work as a standalone investment or as a complement to other active and passive fixed income strategies
6/6
%
6
Sub-advised by Insight Investment, a global specialist asset manager with deep experience and resources in fixed income management
5/6
$
minimum
1B
Aims to achieve the most attractive
risk-adjusted yields
3/6
%
>2
Aims to add value through a credit-focused security selection process, and active management of duration, yield curve, and market allocations
2/6
Actively managed, diversified bond fund focused on total return and income generation by opportunistically blending all sectors of the fixed income universe
1/6
Highlights of the Fund's Investment Approach
tactical trades
with
income generation
Insight looks to achieve its goals
by complementing
Highlights
Bring back the INCOME in fixed income
1, 2
Dividend-paying stocks declined, on average, about half as much as
non-dividend payers in bear markets from 1/31/1972-3/31/2018.
1
Dividends represented 100% of the S&P 500’s 2011 total return.
1
The 2000s (12/31/1999-12/31/2009) encompassed the bursting of the “technology-media-telecom” bubble as well as the beginning of the financial crisis. During this period, the index’s income return was positive, while its price and total return were both negative.
1
During the 1930s, which included the Great Depression, dividends represented 1,693% of the S&P 500’s total return.
1972 - 2018
2011
2000s
1930s
Historically, dividends have provided a cushion against volatility and market downturns with dividend-paying stocks tending to weather ups and downs better than non-dividend-payers.
Passively managed fixed income funds may be prone to forced selling
2
Dividend-paying stocks averaged an almost 3%
higher return per year than
non-dividend payers during
bull markets.
Higher Yearly
%
3
1
The S&P 500’s annualized
return with dividends
reinvested – compared to
5.6% without dividends
Annual return
%
9.7
1
Amount of the S&P 500
Index’s total returns
driven by dividends
%
42.0
Dividend payments can provide a strong foundation for a stock’s total return, through bull and bear markets. Dividend payments have been crucial to the S&P 500’s total return:
Market-weighted allocations often lead to concentrated portfolios
Dividends are a powerful tool
in communicating financial health to the capital markets.
Financial Strength
The ability to pay a dividend is an important indicator to investors that the company has
a proven and sustainable business model.
Business Stability
The ability to pay cash from reported earnings points to the inherent quality of those earnings.
Earnings Quality
Regular dividends that follow a defined payout ratio are a
useful proxy for management’s confidence in the business.
Earnings power
Market-cap weighted indices, by definition, grant the largest index weights to the issuers and sectors with the most debt outstanding.
Select indices may be structurally-biased toward the most indebted issuers
Passively managed fixed income funds may be prone to forced selling
Market-weighted allocations often lead to concentrated portfolios
Select indices may be structurally-biased toward the most indebted issuers
Explore three main reasons to rethink your core fixed income solution.
As the Federal Reserve Board raises interest rates and actively works to reduce its balance sheet, fixed income markets now face potential headwinds and we believe many investors may be unknowingly exposed to areas that can be considerably impacted by Fed policy normalization.
Fixed income is a critical allocation in many investors’ portfolios and we believe that flexible, active management is always a critical component of effective fixed income investing.
However, following thirty-plus years of a secular decline in interest rates, fixed income markets have been volatile, with yields moving in tandem with economic data, geopolitical concerns and the Federal Reserve Board’s monetary policy. In this environment, we believe many investors may be unknowingly exposed to areas that can be significantly impacted by such volatility.
Consider focusing on funds that construct their portfolio outside the more traditional benchmarks and remember that it is not possible to invest directly in an index.
The Fix for Fixed Income
See how
Insight Investment’s process aims to take advantage of opportunities today, while positioning for tomorrow.
select
income
fund
AAM/INSIGHT
Ticker symbols Class A: cpuax / Class C: cpucx / Class I: cpuix
CRN: 2018-0702-6743 R
Select indices may be structurally-biased toward the most indebted issuers
Market-weighted allocations often lead to concentrated portfolios
Passively managed fixed income funds may be prone to forced selling
Select indices may be structurally-biased toward the most indebted issuers
Market-cap weighted indices, by definition, grant the largest index weights to the issuers and sectors with the most debt outstanding.
Market-weighted allocations often lead to concentrated portfolios
The Bloomberg Barclays US Aggregate Bond Index, which is often used as representative of the broad fixed income market, is heavily concentrated in Treasuries and Agency securities.
70
%
Approximate allocation to US
government-related sectors as of 12/31/2020.*
9.7
%
excludes
The index excludes high yield bonds, leveraged loans, municipal bonds, inflation-indexed bonds and foreign currency bonds, among others, which we view as missed opportunities given their potential to deliver a high level of income and potentially aid in improving total return.
* Source: Insight Investment.
Passively managed fixed income funds may be prone to forced selling
Let’s start with some background information:
Most individual bonds are assigned a credit rating by one or more of several major rating agencies, such as Standard & Poor’s and Moody’s. Rating agencies grade bonds on a letter scale that indicates credit worthiness and risk. In simplest terms, the lower the letter scale, the lower the quality and the higher risk potential. Investment grade bonds (those rated BBB/Baa or higher) are considered to have a relatively low risk of default. Those rated below BB/Ba) or lower are considered high yield or “junk” and typically offer investors higher yields than investment grade bonds, given their higher risk of default.
The 2000s (12/31/1999-12/31/2009) encompassed the bursting of the “technology-media-telecom” bubble as well as the beginning of the financial crisis. During this period, the index’s income return was positive, while its price and total return were both negative.
1
Dividend-paying stocks declined, on average, about half as much as
non-dividend payers in bear markets from 1/31/1972-3/31/2018.
1, 2
When a rating agency raises a bond’s rating, it is an “upgrade” while a lowered rating is called a “downgrade.” Upgrades and downgrades can be key drivers of bond performance, particularly if/when the security is downgraded to high yield.
Background Information
Let’s start with some background information:
A downgrade to high yield status is where passively managed fixed income funds may run into obstacles since investment-grade-focused passive funds may be forced to sell these securities. Most often, the market anticipates the downgrade and the bond sells off (price drops) prior to the ratings move. Depending on each fund’s requirements and investment process, a passively managed investment-grade focused fund may have no choice but to sell into these difficult market conditions. The end result? A possible permanent impairment of capital.
On the other end of the spectrum, active managers such as Insight Investment , the Sub-Advisor to the AAM/Insight Select Income Fund, may find opportunity to generate alpha by investing in “fallen angels” (bonds that were initially investment grade but have been downgraded to junk status). An analysis by Barclays shows that on average, bond prices have recovered in the months after a bond has been downgraded to high yield, and careful credit analysis may help analysts pinpoint companies that can deleverage and return to investment grade.
And now for the important part:
1
2
About the AAM/Insight
Select Income Fund
Insight believes a more benchmark-agnostic approach that combines “smart” income generation with an active total return credit strategy may maximize the earnings potential of an investment grade credit portfolio over time.
Insight puts this belief into action when managing the AAM/Insight Select Income Fund. The fund is intentionally not tied to benchmark weights in an effort to provide the flexibility to potentially exploit security mispricings and market inefficiencies across global credit markets. The process combines fundamental, bottom-up credit analysis with macroeconomic perspectives to arrive at sector weighting decisions. In short, Insight looks to achieve its goals by complementing income generation with tactical trades.
Highlights
4/6
Launched in 2013, supported by a 15-year institutional strategy track record, tested through a full market cycle against the Bloomberg Barclays U.S. Credit Index.
15
-year
Sources and Disclosures
1“Insight” or “Insight Investment”, is the corporate brand for certain companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited, Insight Investment International Limited and Insight North America LLC, each of which provides asset management services.
2 Source: Bloomberg Barclays Indices, Barclays Research as of July 2018.
Important Disclosures
View the AAM/Insight Select Income Fund’s prospectus.
Past performance and is not a guarantee of future results. Diversification does not assure a profit or protect against a loss in a declining market.
Investment Risks: All investments are subject to risks including the potential loss of principal. The Fund’s principal risks are outlined below. More information about these risks may be found in the Fund’s prospectus.
Fixed income securities decrease in value if interest rates rise. The Fund may not be able to sell some or all of the investments that it holds or may only be able to sell those investments at less than desired prices. High yield bonds (“junk bonds”) involve greater risks of default, downgrade, or price declines. Convertible securities and warrants are subject to potentially greater volatility than the general market. Foreign securities may be more volatile than the securities of U.S. issuers because of economic and other conditions. These risks are heightened in emerging markets. Investments denominated in foreign currencies are subject to changes in value relative to the U.S. dollar. Real Estate Investment Trusts (REITs) are subject to risks similar to those associated with direct ownership of real estate, including losses from casualty or condemnation, and changes in local and general economic conditions, supply and demand, interest rates, zoning laws, regulatory limitations on rents, property taxes and operating expenses. Master Limited Partnership Units (MLPs) risk includes the risks associated with a similar investment in equity securities. An outbreak of an infectious respiratory illness caused by a novel coronavirus known as COVID-19 has negatively affected the worldwide economy, as well as the economies of individual countries, the financial health of individual companies and the market in general in significant and unforeseen ways. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund. Any such impact could affect the Fund’s performance, the performance of the securities in which the Fund invests and may lead to significant gains or losses on your investment in the Fund.
Additional risks include cash flow risk, tax risk, risk associated with a potential conflict of interest between unit holders and the MLP’s general partner, and capital markets risk. Securities lending involves certain potential risks, primarily counterparty, market, liquidity and reinvestment risks. Additionally, the Fund may employ hedging techniques that involve a variety of derivative transactions, including futures contracts, swaps, exchange-listed and over-the-counter put and call options on securities or on financial indices, and various interest rate and foreign-exchange transactions (collectively, “Hedging Instruments”). Hedging Instrument Risks involves certain potential risks, primarily counterparty, market, liquidity and reinvestment risks. Investing in an ETF will provide the Fund with exposure to the securities comprising the index on which the ETF is based and will expose the Fund to risks similar to those of investing directly in those securities.
Interest rate risk is the risk that the value of securities will fall if interest rates increase. Securities typically fall in value when interest rates rise and rise in value when interest rates fall. Additionally, securities held with longer periods before maturity are often more sensitive to interest rate changes.
A bond rating is a grade typically given by a private independent rating service that indicates a security’s credit quality, which is intended to evaluate a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. AAA, AA, A, and BBB are considered investment grade ratings; BB, B, CCC/CC/C and D are below-investment grade ratings. U.S. Government or agency securities are generally considered to be of the highest quality. Below investment-grade or high-yield bonds involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not.
The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged, broad based index composed of U.S. dollar denominated, investment grade, fixed-rate taxable bonds with at least $250 million par amount outstanding and at least one year to final maturity.
Bloomberg Barclays U.S. Credit Bond Index measures the performance of investment grade corporate debt and agency bonds that are dollar denominated and have a remaining maturity of greater than one year. It is not possible to invest directly in an index.
Alpha measures the excess return of an investment relative to a benchmark index.
Link to third-party website is included as a convenience to the user. AAM assumes no responsibility for the content of any linked site. The fact that such links exist does not indicate approval or endorsement of any material contained on any linked site.
Not FDIC Insured - Not Bank Guaranteed - May Lose Value.
Distributed by IMST Distributors, LLC. Advisors Asset Management, Inc. (AAM) is an SEC-registered investment advisor and member FINRA / SIPC. SEC registration does not imply a certain level of skill or training; nor does it imply that the SEC has sponsored, recommended or otherwise approved of AAM.
CRN: 2021-0514-9184 R Link 7302
And now for the important part:
Background Information
Background Information
Background Information
90% of the total return of government, investment grade and high yield debt have been generated by coupon income through multiple credit cycles. This leads us to believe that a focus on generating a high level of income should be supportive to a fixed income fund’s total return.
Source: Insight Investment as of 12/31/17. Past performance does not guarantee future results. It is not possible to invest directly in an index.
90
%
This form is for use by financial professionals only who reside in the U.S. We're unable to act on any requests to buy, sell or exchange securities included in the submission of this form. AAM will never share your contact information outside of AAM. By completing this form, you're agreeing to be contacted via email.
A global specialist asset manager with deep experience and resources in fixed income management. Insight Investment is the largest autonomous subsidiary of Bank of New York Mellon.
As of 12/31/2022
1/4
Extensive, highly experienced, specialized resources across all aspects of fixed income investing; research, portfolio management and operations
2/4
Aims to add value through a credit-focused security selection process, and active management of duration, yield curve, and market allocations
Investment Professionals
290+
3/4
Aims to add value through a credit-focused security selection process, and active management of duration, yield curve, and market allocations
Strong team of global specialists spanning all major sub-sectors of the fixed income markets (NY, Boston, San Francisco & London)
168+
4/4
May work as a standalone investment or as a complement to other active and passive fixed income strategies
employees
1
1,000+
Meet the investment team
Gautam Khanna, CFA, CPA, Co-Head of US Multi Sector Fixed Income
James DiChiaro,
Senior Portfolio Manager
Eleanor K. Moffat
Vice President
and Principal
