Scout Investments



Morningstar Category

Nontraditional Bond

Total Net Assets
as of 9/30/2016




Inception Date


Fund Summary

The Scout Unconstrained Bond Fund pursues its objective of maximizing total return consistent with the preservation of capital by investing its assets in fixed income obligations of varying maturities, including bonds, mortgage- and asset-backed securities, and derivatives. The Fund also may invest in high yield securities, non-investment grade securities, derivative instruments (e.g. swap agreements), securities denominated in foreign currencies, and in U.S. dollar-denominated securities of foreign issuers.


Overall Morningstar Rating

1(based on risk-adjusted performance against 252 Nontraditional Bond Funds as of October 31, 2016)

Morningstar Bronze
2 On March 4, 2016, after a thorough evaluation of its process, performance, people, parent and price, Morningstar bestowed a Bronze rating upon the Scout Unconstrained Bond Fund; Morningstar’s analysts’ third highest level of conviction.

Lipper Leader Rating

3(among 48 Alternative Credit Focus Funds as of October 31, 2016)

Portfolio Managers

The Overall Morningstar Rating™ for a fund is derived from the weighted-average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.

For each fund with at least a 3-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variations in a fund's monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in a broad asset class receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.)

As of Oct. 31, 2016, the Scout Unconstrained Bond Fund - Institutional Class received the following star ratings among U.S. domiciled Nontraditional Bond Funds for the following time periods: 2 stars (among 252 funds) for the 3 year and 5 stars (among 176 funds) for the 5 year periods.The Fund may have experienced negative performance during one or more of the time periods represented by the Morningstar Analyst rating shown.

© 2016 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Rating may differ among share classes of a mutual fund as a result of different sales loads and/or expense structures. It may be based, in part, on the performance of a predecessor Fund.

The Morningstar Analyst Rating is not a credit or risk rating. It is a subjective evaluation performed by the mutual fund analysts of Morningstar, Inc. Morningstar evaluates funds based on five key pillars, which are process, performance, people, parent and price, which are not weighted equally in Morningstar's evaluation of the Fund. Morningstar's analysts use this five pillar evaluation to identify funds they believe are more likely to outperform over the long term on a risk-adjusted basis. Analysts consider quantitative and qualitative factors in their research, but the assessment of each pillar and how they are combined is driven by the analyst's overall assessment and overseen by Morningstar's Analyst Rating Committee. The approach serves not as a formula but as a framework to ensure consistency across Morningstar's global coverage universe. The Analyst Rating scale ranges from Gold to Negative, with Gold being the highest rating and Negative being the lowest rating. A fund with a "Gold" rating distinguishes itself across the five pillars and has garnered the analysts' highest level of conviction. A fund with a ‘Silver' rating has notable advantages across several, but perhaps not all, of the five pillars-strengths that give the analysts a high level of conviction. A "Bronze" rated fund has advantages that outweigh the disadvantages across the five pillars, with sufficient level of analyst conviction to warrant a positive rating. A fund with a "Neutral" rating isn't seriously flawed across the five pillars, nor does it distinguish itself very positively. A "Negative" rated fund is flawed in at least one, if not more pillars and is considered an inferior offering to its peers. Analyst Ratings are reevaluated every 14 months. For more detailed information about Morningstar's Analyst Rating, including its methodology, please click here. The Morningstar Analyst Rating should not be used as the sole basis in evaluating a mutual fund. Morningstar Analyst Ratings are based on Morningstar's current expectations about future events; therefore, in no way does Morningstar represent ratings as a guarantee nor should they be viewed by an investor as such. Morningstar Analyst Ratings involve unknown risks and uncertainties which may cause Morningstar's expectations not to occur or to differ significantly from what we expected.

3Lipper Ratings

Lipper ratings for Expense reflect funds' expense minimization relative to peers with similar load structures as of October 31, 2016. The Scout Unconstrained Bond Fund - Institutional Class, in Lipper's Alternative Credit Focus Funds classification, received the following ratings for the 3- and 5-year periods, respectively: a Lipper Leader rating (among 48 funds) and a Lipper Leader rating (among 35 funds).

The Fund may have experienced negative performance during one or more of the time periods represented by the Lipper rating shown.

Unconstrained risk considerations: The Fund employs an unconstrained investment approach, which creates considerable exposure to certain types of securities that present significant volatility in the Fund’s performance, particularly over short periods of time. The return of principal in a fixed income fund is not guaranteed. Fixed income funds have the same interest rate, inflation, issuer, maturity and credit risks that are associated with underlying fixed income securities owned by the Fund. Foreign investments present additional risks due to currency fluctuations, economic and political factors, government regulations, differences in accounting standards and other factors. Mortgage- and Asset-Backed Securities are subject to prepayment risk and the risk of default on the underlying mortgages or other assets. High yield securities involve greater risk than investment grade securities and tend to be more sensitive to economic conditions and credit risk. Investments in emerging markets involve even greater risks.

Derivatives such as options, futures contracts, currency forwards or swap agreements may involve greater risks than if the Fund invested in the referenced obligation directly. Derivatives are subject to risks such as market risk, liquidity risk, interest rate risk,  credit risk and management risk. Derivative investments could lose more than the principal amount invested. The Fund may use derivatives for hedging purposes or as part of its investment strategy. The use of leverage, derivatives and short sales could accelerate losses to the Fund. These losses could exceed the amount originally invested.

The Fund may, at times, experience higher-than-average portfolio turnover, which may generate significant taxable gains and increased trading expenses, which, in turn, may lower the Fund’s return.

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