Programs » Strategic Income Plan (SIP) Plus
Characteristics of Bond Funds
The capital markets contain a wide variety of bonds that may act in very different ways depending on the current market and credit cycles. Bonds can be differentiated by several defining characteristics, such as the following:- Length to Maturity
- Issuing Company or Government
- Yield (Interest Rate)
- Special Provisions, e.g. Inflation Protection or Convertibility
Rotation within the Bond Universe
Rotation within the bond market can offer the benefits of growth potential when market and credit conditions are positive as well as current income during market downturns. Strategic Income Plan Plus seeks to achieve positive return from the global debt market regardless of market conditions. The SIP Plus portfolios are structured to efficiently move from debt class to debt class, from the short end of the yield curve out to the long end, and may employ inverse bond funds to help counter rising rates and an inflationary environment. The Plan is for the investor seeking current income and the potential for long-term capital growth.Inverse Treasury Funds Available
In times when rising interest rates presents a lack of attractive alternative investments, an inverse Treasury fund may be used. When inverse bond funds are used, gains and losses may be magnified due to the use of leverage.Bond Fund Categories Used in SIP Plus
The SIP Plus program utilizes several different bond fund categories, including:- Bank Loan
- Inverse Treasury Bond
- Emerging Markets Debt
- World Bonds (Sovereign Debt)
- Money Market
- High Yield Bond
- Convertible Bond
- Government Bond
- Ultrashort Bond
- Treasury Inflation-Protected Securities (TIPS)
Fact Sheet
High yield bond funds invest in securities that are considered speculative and are susceptible to default or decline in value due to adverse economic and business developments.
An investment in a Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Mutual funds investing in small and medium sized companies, high-yield securities, foreign securities, as well as funds that concentrate their investments in one sector of the market may increase the risk and volatility of those funds.
Mutual funds which invest in government securities are not guaranteed; mortgage-backed securities are subject to pre-payment risk; bond fund shares are not guaranteed and will fluctuate with market conditions and interest rates, and redemption values may be more or less than original cost; and fixed income funds may be subject to a loss in value due to interest rate fluctuations.
Diversification neither ensures a profit nor protects against investment losses.
Investing in sector funds is more volatile than investing in broadly diversified funds, as there is a greater risk due to the concentration of the funds’ holdings in issuers of the same or similar offerings Inverse Funds involve certain risks, which include increased volatility due to the Funds’ possible use of short sales of securities and derivatives, such as options and futures.
An investment in a Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Mutual funds investing in small and medium sized companies, high-yield securities, foreign securities, as well as funds that concentrate their investments in one sector of the market may increase the risk and volatility of those funds.
Mutual funds which invest in government securities are not guaranteed; mortgage-backed securities are subject to pre-payment risk; bond fund shares are not guaranteed and will fluctuate with market conditions and interest rates, and redemption values may be more or less than original cost; and fixed income funds may be subject to a loss in value due to interest rate fluctuations.
Diversification neither ensures a profit nor protects against investment losses.
Investing in sector funds is more volatile than investing in broadly diversified funds, as there is a greater risk due to the concentration of the funds’ holdings in issuers of the same or similar offerings Inverse Funds involve certain risks, which include increased volatility due to the Funds’ possible use of short sales of securities and derivatives, such as options and futures.