Sterling Capital Introduces the Diversified Income Fund

Jul 28, 2015, 05:00 ET from Sterling Capital Funds

CHARLOTTE, N.C., July 28, 2015 /PRNewswire/ -- Sterling Capital Funds today announced the launch of the Sterling Capital Diversified Income Fund. Formerly known as the Sterling Capital Strategic Allocation Conservative Fund, the fund is part of a lineup of 22 mutual funds offering investors access to virtually every asset class and sector.

Focusing on income and capital appreciation by allocating capital across a diverse mix of income-generating asset classes and strategies, the Diversified Income Fund represents a unique addition to the Sterling Capital lineup as well as to the investment marketplace as a whole. The renamed mutual fund is a solutions-based strategy, which may allow investors to achieve income and proper diversification in one fund rather than allocating to multiple investments. The Diversified Income Fund seeks to gain a competitive advantage in the marketplace by utilizing an open architecture approach that enables portfolio managers to pinpoint seasoned management teams across all asset classes.

In order to achieve its stated objectives, portfolio managers Shane A. Burke and Will G. Gholston, CFA, have expanded the opportunity set beyond traditional equity and fixed income investments to include nontraditional investments. Investments such as insurance-linked securities and option strategies offer opportunities for additional income, diversification, and return. 

"With rates remaining near long-term historical lows, we recognize the increasing challenge in satisfying investors' income needs," said Burke, who is based in Raleigh, N.C. "Leveraging our experience and expertise in the areas of asset allocation, manager selection, and portfolio construction, we believe we have identified a complementary mix of strategies that can provide a steady stream of income with moderate volatility."

The strategy employs a global approach to asset allocation, and uses a cost-effective blend of active and passive management to achieve its objectives. The fund will be structured as a "fund-of-funds," which will allow capital to be efficiently allocated and rebalanced as needed.

In addition to generating current income, the fund is also expected to generate capital appreciation over the course of a complete market cycle.

"We seek to provide a combination of current income and capital appreciation that meets or exceeds our shareholders' long-term total return objectives," said Gholston. "An analysis of historical performance illustrates that an income-oriented approach to investing has consistently delivered attractive total returns on both an absolute and risk-adjusted basis."

The fund will offer Class A, C and Institutional shares.

Gholston, who has 15 years of investment experience, has been a co-portfolio manager of the Sterling Capital Strategic Allocation Funds since 2006. He is a graduate of the University of North Carolina at Chapel Hill with a bachelor's degree in economics and is a CFA charter holder. 

Burke, who has 13 years of investment experience, earned his bachelor's degree in finance from the University of North Carolina at Wilmington and MBA from San Francisco-Golden Gate University.

Sterling Capital Management LLC

Sterling Capital Management LLC is a registered investment advisor founded in 1970. Sterling is an independently operated subsidiary of BB&T Corporation, one of the nation's largest financial services holding companies. Headquartered in Charlotte, N.C., with offices in Raleigh, N.C.; Atlanta; Washington, D.C.; Richmond, Va.; Virginia Beach, Va.; and San Francisco, Sterling has more than $50 billion* in assets under management overseen by more than 100 investment and client services professionals as of June 30, 2015. Sterling provides investment management services to a diverse group of clients, including corporate, public, health care, private clients, endowment, foundation, insurance, sub-advisory, and managed investment pools.

Risk Considerations

The fund is primarily concentrated in underlying funds and is therefore subject to the same risks the funds are invested in and may entail higher expenses. The fund is also subject to valuation risk which is the risk the fund has valued certain securities that won't appreciate as anticipated or remain undervalued for a long period of time.

The underlying funds may be invested in equity securities including more aggressive investments that engage in short selling, options, exchange-traded funds (ETFs), Master Limited Partnerships (MLPs - affected by the natural resources sector of the economy and regulation) and real estate investment trusts (REITs - affected by economic factors related to the real estate industry). The fund's volatility may be amplified by its use of short sales and derivatives. Investments in fixed income and debt type securities are subject to credit risk, call risk, prepayment and interest rate risk so that as interest rates rise the value of bond prices will decline. Investing in high-yield debt (junk) securities involve greater risks and less liquidity than investment grade bonds.

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Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the fund, please call 888-228-1872 or visit our web site at SterlingCapitalFunds.com. Read the prospectus carefully before investing.

This information does not constitute a solicitation or an offer to buy or sell any investment security, or provide investment advice.

The funds are distributed by Sterling Capital Distributors, LLC. Sterling Capital Management LLC, a separate subsidiary of BB&T Corporation, serves as investment adviser to the Sterling Capital Funds and is paid a fee for its services. Shares of the Sterling Capital Funds are not deposits or obligations of, or guaranteed or endorsed by, Branch Banking and Trust Company or its affiliates. The funds are not insured by the FDIC or any other government agency. The funds are distributed by Sterling Capital Distributors, LLC, which is not affiliated with Branch Banking and Trust Company or its affiliates.

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