An investor should consider the Fund’s investment objectives, risks and fees and expenses carefully before investing. This and other important information can be found in the Fund’s prospectus and summary prospectus, which you can obtain by calling 877.628.2583. Please read the prospectus and summary prospectus carefully before making an investment. The prospectus contains a more complete discussion of the risk of investing in the Fund. Investments could result in loss of principal.
The composition, holdings and other characteristics of the Fund are as of the period shown and are subject to change without notice.
Tom O’Reilly has announced his decision to retire on or about December 31, 2019 and will transition his portfolio management responsibilities to the other named senior portfolio managers in Global Non-Investment Grade.
Shares in the Fund may fluctuate, sometimes significantly, based on interest rates, market conditions, credit quality and other factors. In a rising interest rate environment, the value of an income fund is likely to fall. The market’s behavior is unpredictable and there can be no guarantee that the Fund will achieve its goal. To the extent the Fund invests more heavily in particular bond market sectors, its performance will be especially sensitive to developments that significantly affect those sectors. High-yield bonds, also known as “junk bonds,” are considered speculative and carry a greater risk of default than investment-grade bonds. Their market value tends to be more volatile than investment grade bonds. No active trading market may exist for many loans, loans may be difficult to value and many are subject to restrictions on transfer or resale, which may result in extended trade settlement periods and may make certain investments less liquid and also prevent the Fund from obtaining the full value of a loan when sold.
This Fund is the successor to the Lipper High Income Bond Fund (“Lipper Fund”). The total return and data for the periods shown prior to September 6, 2002, are those of the Lipper High Income Bond Fund Premier Class. The data reflects performance of the Lipper Fund for the period April 1, 1996, through September 6, 2002, and the performance of Lipper Fund’s predecessor partnership for the period February 1, 1992 (date of inception), through March 31, 1996, as applicable. The investment policies, objectives, guidelines and restrictions of the Fund are in all material respects equivalent to those of the Lipper Fund which were in all material respects equivalent to those of its predecessor partnership. Had Lipper Fund’s predecessor partnership been subject to the provisions of the 1940 Act, its investment performance may have been adversely affected. Returns would have been lower if the manager of the Lipper Fund had not waived certain of its fees during the periods shown. The Investor Class is closed to new investors. Prior to July 6, 2006, the Fund’s policies limited its ability to invest in bonds rated below “B” and its performance prior to that date may have been different if current policies had been in effect.
The ICE BofA Merrill Lynch U.S. High Yield Constrained Index is an unmanaged market value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities. Qualifying bonds must have at least one year remaining to maturity, a fixed coupon schedule and a minimum amount outstanding of $100 million. Qualifying bonds are capitalization weighted provided the total allocation to an individual issuer does not exceed 2%. Please note that indices do not take into account any fees and expenses of investing in the individual securities that they track, and that individuals cannot invest directly in any index. The Fund may invest in many securities not included in the above-described index.
For Class C, Institutional Class, Investor Class , Class R3 and Class R6, gross expense ratio represents, and for Class A, net expense ratio represents, the total annual operating expenses that shareholders pay (after the effect of fee waivers and/or expense reimbursement). The Fund’s Investment Manager (the “Manager”) contractually caps certain expenses of the Fund (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, dividend and interest expenses relating to short sales, and extraordinary expenses, if any; consequently, the net expense ratio may exceed the contractual cap) through 10/31/2022 for Institutional Class at 0.75%, 1.12% for Class A, 1.87% for Class C, 1.00% for Investor Class, 1.37% for Class R3 and 0.65% for Class R6 (each as a % of average net assets). As of the Fund’s most recent prospectus, the Manager was not required to waive or reimburse any expenses pursuant to this arrangement for Class C, Institutional Class, Investor Class, Class R3, and Class R6. Absent such arrangements, which cannot be changed without Board approval, the returns may have been lower. Information as of the most recent prospectus dated February 28, 2019, as amended.
Information Ratio (average 3-year shown) is a measure of risk adjusted returns. The average excess return (over an appropriate benchmark or risk free rate) is divided by the standard deviation of these excess returns. The higher the measure, the higher the risk adjusted return. The Information Ratio of the benchmark will equal zero.
Sharpe Ratio (average 3-year shown) is a measure of risk-adjusted returns that can be used to compare the performance of managers. The ratio represents the return gained per unit of risk taken. Managers with the same excess return for a period but different levels of risk will have Sharpe ratios that reflect the difference in the level of risk.
Standard Deviation (average 3-year shown) is a statistical measure of portfolio risk that describes the average deviation of portfolio returns from the mean portfolio return over a certain period of time to show how wide this range of returns typically is. The wider the typical range of returns, the higher the Standard Deviation, and the higher the portfolio risk.
Tracking Error (average 3-year shown) is the standard deviation of a portfolio’s relative returns (vs. a benchmark) and measures the volatility of the return differences between the portfolio and benchmark over time. A higher tracking error implies that a portfolio is actively managed vs. its benchmark. A portfolio that mirrors its benchmark would have a very low tracking error.
Upside Capture is a measure of the manager’s performance in up markets relative to the market itself. A value of 110 suggests the manager performs ten percent better than the market when the market is up. During the selected time period, the return for the market for each period is considered an up market period if it is greater than zero. Upside Capture is calculated by dividing the return of the manager during the up market periods by the return of the market during the same periods.
Downside Capture is a measure of the manager’s performance in down markets relative to the market itself. A value of 90 suggests the manager’s loss is only nine tenths of the market’s loss. During the selected time period the return for the market for each period is considered a down market period if it is less than zero. Downside Capture is calculated by dividing the return of the manager during the down periods by the return of the market during the same periods.
Weighted Average Maturity is expected average life to worst or in other words the par-weighted average time (in years) to principal repayment for securitized assets or the time (in years) to probable call/put for non-securitized assets.
Weighted Average Duration is expressed as a number of years from its purchase date. It is a measurement of how long, in years, it takes for the price of a bond to be repaid by its internal cash flows. As bonds with higher durations carry more risk and have higher price volatility than bonds with lower durations. Weighted Average Price is computed by weighting the price of each loan or bond by its relative size in the portfolio. The number reveals whether the fund favors loans or bonds selling at prices above (premium) or below (discount) face value (premium is a value > $100; discount is a value < $100).
A fund’s 30-day SEC yield is similar to a yield to maturity for the entire portfolio. The formula is designated by the Securities and Exchange Commission (SEC). Past performance is no guarantee of future results. Absent any expense cap arrangement noted above, the SEC yields may have been lower. A negative 30-day SEC yield results when a Fund’s accrued expenses exceed its income for the relevant period. Please note, in such instances the 30-day SEC yield may not equal the Fund’s actual rate of income earned and distributed by the fund and therefore, a per share distribution may still be paid to shareholders. The unsubsidized 30-day SEC yields for Class A, Class C, Class R6, Class R3, Institutional Class and Investor Class are 4.16%, 3.35%, 4.62%, 3.84%, 4.51% and 4.35%, respectively.
This material is general in nature and is not directed to any category of investors and should not be regarded as individualized, a recommendation, investment advice or a suggestion to engage in or refrain from any investment-related course of action. Neuberger Berman is not providing this material in a fiduciary capacity had has a financial interest in the sale of its products and services. Investment decisions and the appropriateness of this material should be made based on an investor’s individual objectives and circumstances and in consultation with his or her advisors. Accordingly “retail” retirement investors are not the intended recipient of this material as they are expected to engage the services of an advisor in evaluating this material for any investment decision. If your understanding is different, we ask that you inform us immediately.
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