Eagle Tactical Allocation Fund

The Eagle Tactical Allocation Fund seeks long-term capital appreciation. The fund's sub-advisor employs a global tactical asset allocation strategy and adheres to a strict discipline of downside risk management.

Cougar Global Investments Ltd. is the sub-advisor to the Fund and an affiliate of Eagle Asset Management, Inc., the Investment Adviser.

The fund seeks long-term capital appreciation. The fund manager employs a global tactical strategy, analyzing and modeling approximately 30 global exchange traded fund (ETF) categories in an effort to minimize downside risk. The portfolio is constructed using typically fewer than 10 ETFs exclusively.

The manager's approach is based upon its Multiple Economic Scenario outlook (MES), which uses a one-year forecast horizon. The investment process incorporates leading-edge research into the behavior of capital markets and global asset classes in an effort to anticipate how they may perform under various macroeconomic scenarios.

  • Establish probabilities for each scenario, based on its own research, obtained from independent macroeconomic, capital-market and geopolitical research services.
  • Seek “true” probability distributions for the returns of each asset class over the next year. The data is then weighted to measure how these asset classes likely could behave under the forecast scenarios.
  • Enter results into the proprietary portfolio optimizer to generate the optimal asset mix for the fund, for that month. This is when the team incorporates downside-risk-management techniques in an effort to control risk levels for the fund.
  • Portfolio revised monthly and rebalanced if expected returns and downside risk for the current mix have shifted.

A Word about Risk

An investment in Exchange Traded Funds (ETFs) structured as a mutual fund involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks: non-diversified, the risks of price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking error. The fund is a “fund of funds.” Investments are concentrated in underlying funds and fund performance is directly related to the performance of underlying funds. The ability of the fund to achieve its investment objective is directly related to the ability of the underlying funds to meet their investment objectives.

Tactical allocation investing presents specific risks, such as currency fluctuations, differences in financial accounting standards as well as potential political and economic instability. As with all equity investing, there is the risk that an unexpected change in the market or an ETF's holdings may have an adverse effect on its net asset value and total return. The biggest risk of equity investing is that returns can fluctuate and investors can lose money.

Investing in small- and mid-cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. Stocks of smaller or newer or mid-sized companies may be more likely to realize more substantial growth as well as suffer more significant losses than larger or more established issuers. Small- and mid-cap companies generally involve greater risks than investing in larger capitalization companies. They often have narrower commercial markets, more limited managerial and financial resources, and more volatile trading than larger, more established companies.

Specific sector investing such as real estate can be subject to different and greater risks than more diversified investments. Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks to real estate investments.

International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility.

Investing in emerging markets can be riskier than investing in well-established foreign markets. Emerging and developing markets may be less liquid and more volatile because they tend to reflect economic structures that are generally less diverse and mature and political systems that may be less stable than those in more developed countries.

Because the fund normally will hold a focused portfolio of fewer holdings than many other diversified funds, the increase or decrease of the value of a single security may have a greater impact on the fundís net asset value and total return.

There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices generally rise. Bond and bond fund investors should carefully consider risks such as: interest rate risk, credit risk, liquidity risk and inflation risk.

High-yield (below investment grade) bonds are not suitable for all investors and may present greater credit risk than other bonds.

Commodities risk is the risk that investments in commodities, such as gold, or in commodity-linked instruments, will subject an underlying fundís portfolio to volatility that may also deviate from price movements in equity and fixed income securities. Commodities trading is generally considered speculative because of the significant potential for investment loss. Among the factors that could affect the value of the fundís investments in commodities are cyclical economic conditions, sudden political events, changes in sectors affecting a particular industry or commodity, and adverse international monetary policies. Markets for precious metals and other commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising.