Certain fees were waived; if the fee waivers were not in effect, the yield would have been lower for class I of the High Yield Bond Fund. Contractual fee waivers are not deducted from the expenses shown.
The Barclays U.S Corporate High-Yield Index, an unmanaged index representative of the U.S. corporate high-yield fixed income markets, is not available for direct investment. Unlike a mutual fund, the performance of an index assumes no taxes, transaction costs, management fees, or other expenses.
An investment in the Fund is subject to interest rate risk, which is the possibility that a Fund's yield will decline due to falling interest rates and the potential for bond prices to fall as interest rates rise. The value of debt securities may be affected by the ability of issuers to make principal and interest payments and even the possibility that the issuer will default completely. If a bond is sold before its maturity date, it may be worth more or less than the face value depending on interest rate movements. The value of assets may decline as inflation shrinks the value of a country's currency. A bond may be difficult to sell in a thin trading market or if it is relatively unknown. High yield bond investing includes special risks. Investments in lower rated and unrated debt securities are subject to a greater loss of principal and interest than investments in higher rated securities. The values of mortgage-backed securities depend on the credit quality and adequacy of the underlying assets or collateral and may be highly volatile. International investments are subject to special risks not ordinarily associated with domestic investments, including currency fluctuations, economic and political change and differing accounting standards that may adversely affect portfolio securities. These risks may be heightened in emerging markets. The Fund may invest a portion of its assets in derivatives. Derivative instruments include options, futures and options on futures. A small investment in derivatives could have a potentially large impact on the Fund’s performance. The Fund may be unable to terminate or sell a derivatives position. Derivative counterparties may suffer financial difficulties and may not fulfill their contractual obligations.
Net operating expenses reflect contractual waivers and expense reimbursements that, if not renewed, will expire at the end of September 2012. For more information on fee waivers or expense reimbursements please see the expense table in the prospectus. Expenses listed above reflect those of the most recent prospectus.
1As of most recent quarter-end. The Morningstar Style Box reveals the Fund’s investment strategy. For fixed-income funds, the vertical axis shows the average credit quality of the bonds owned and the horizontal axis shows interest-rate sensitivity as measured by a bond’s duration (short, intermediate or long). Credit quality ratings are subject to change. For more complete information about how fixed income style boxes are categorized, please click here to view the Morningstar.com style box analysis.