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Equity Income Fund

Mutual Funds

Equity Income Fund


Fund Managers

Photo of Charles  Wittmann

Charles Wittmann, CFA®

Photo of Jeremy  Lopez

Jeremy Lopez, CFA®

Overview

A
Shares

BAEIX

Inception
Date

06.30.2004

Investment
Min.

$1,000

Subsequent
Investment Min.1

N/A

Max. Up Front
Sales Charge

5.75%

Max. Deferred
Sales Charge

N/A

1If subsequent investments are made as part of an AIP, the minimum is $25.

Philosophy & Process

The fund’s management team utilizes fundamental analysis to construct a portfolio of high-quality, dividend growth equities. They look for the best ideas that include companies with strong balance sheets that are reasonably valued and have shown market/sales gain over time with a credible plan to continue such growth in the future. The fund represents a concentrated portfolio utilizing "best ideas" with the typical number of core holdings between 30 and 35. Dividends matter to the management team and they only purchase companies that have raised their dividends for the last three consecutive years or for six years of the last ten. They target stocks with dividend yields greater than the yield of the S&P 500® Index.

Investment Considerations

The fund invests primarily in dividend-paying securities but also in convertible securities in search of yield. These securities may be undervalued not performing as anticipated and its value could be negatively affected by a rise in interest rates. The fund may engage in writing covered call options. By selling covered call options, the fund limits its opportunity to profit from an increase in the price of the underlying stock above the exercise price, but continues to bear the risk of a decline in the stock. While the fund receives premiums for writing the call options, the price it realizes from the exercise of an option could be substantially below a stock’s current market price.

Fund Facts

Term Class A Shares Class C Shares Class I Shares Class R6 Shares
Ticker BAEIXBCEGXBEGIXSTREX
Inception Date 06.30.200406.30.200406.30.200402.01.2018
Investment Min. $1,000$1,000$1,000,000N/A
Subsequent Investment Min.2 N/AN/AN/AN/A
Max. Up Front Sales Charge 5.75%N/AN/AN/A
Max. Deferred Sales Charge N/A1%N/AN/A

2If subsequent investments are made as part of an AIP, the minimum is $25.

Equity Income Fund

Management

View professional designations disclosures

Photo of Charles  Wittmann

Charles Wittmann, CFA®

Co-Portfolio Manager

Photo of Jeremy  Lopez

Jeremy Lopez, CFA®

Co-Portfolio Manager

Performance

Fund Performance as of 06.30.2024

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 5.75% Sales Charge -8.19% -1.74% 8.09% 5.41% 9.94% 9.30% 9.99%
A Shares without Sales Charge -2.58% 4.26% 14.70% 7.51% 11.25% 9.95% 10.31%
Institutional Shares -2.51% 4.40% 15.00% 7.78% 11.52% 10.22% 10.59%
Lipper Equity Income Median N/A N/A N/A N/A N/A N/A N/A

The total expense ratios for Class A, C and I Shares are 1.04%, 1.79% and 0.79%, respectively. The gross expense ratio for Class R6 Shares is 0.79%. The net expense ratio for Class R6 Shares is 0.69%.

The Fund Administrator, Sterling Capital Management LLC, has contractually agreed to waive its administrative fees, pay Fund operating expenses, and/or reimburse the Fund .10% of the Class R6 average daily net assets for the period February 1, 2021 through January 31, 2022. Performance would have been lower without limitations in effect.

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please visit the performance summary.

The performance of the Equity Income Fund reflects the deduction of fees for value-added services associated with a mutual fund, such as investment management and fund accounting fees. The inception date for Class A Shares is 06.30.2004. The inception date for Class C Shares is 06.30.2004. The inception date for Class Inst'l Shares is 06.30.2004. The inception date for Class R6 Shares is 02.01.2018. The performance shown reflects the reinvestment of all dividend and capital gains distributions.

Characteristics

Top Ten Holdings as of 03.31.2024

# Company Name Value
1 Microsoft Corp. 5.61%
2 Ferguson Plc 4.58%
3 Anthem, Inc. 4.52%
4 Avery Dennison Corp. 4.47%
5 Ameriprise Financial, Inc. 4.34%
6 Hershey Co. (The) 4.31%
7 Charles Schwab Corp. (The) 4.14%
8 Pepsico, Inc. 3.96%
9 Abbvie, Inc. 3.91%
10 Nasdaq Omx Group, Inc. (The) 3.90%

Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.

Sector Allocation as of 03.31.2024

Allocations are based on the current weight to funds in the cited Sector. The composition of the fund's holdings is subject to change.

Growth of $10,000 as of 03.31.2024

The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 03.31.2024. It includes the reinvestment of dividends and capital gains.

Lipper Equity Income Category Based on Total Return as of 03.31.2024

Term 1 Year 3 Years 5 Years 10 Years
Lipper Ranking / Number of Funds in Category 187/462 38/437 49/417 21/319
Lipper Quartile (Percentile) 2nd (41%) 1st (9%) 1st (12%) 1st (7%)

Statistics

Risk/Return Statistics vs. Russell 1000® Value Index 3 as of 03.31.2024

Term Value
Alpha 2.20
Beta 0.94
R-Squared 93.75
Standard Deviation 14.82
Sharpe Ratio 0.64

3The Funds composition is subject to change. Annual Turnover Ratio is 12 month rolling calculation. Alpha, Beta, R-Squared, Standard Deviation, and Sharpe Ratio are based on a 10-year calculation.

View a Glossary of Terms.

Summary Statistics as of 03.31.2024

Term Value
Weighted Median P/E 25.42
Weighted Average P/B 4.44
Weighted Average Market Cap $286.86B
Annual Turnover 41%

Equity Funds

Insights

07.03.2024 • Charles Wittmann, CFA®

The Lead - "Going for Gold"

- Economic indicators such as gross domestic product and the Institute for Supply Management Manufacturing Index recently showed slowing growth, while the Consumer Price Index remains stubbornly above the Federal Reserve’s target rate. Concerns over slowing economic growth amidst higher inflation, also known as stagflation, have emerged. - In such a scenario, we would note that quality and cash deployment (dividends and share buybacks) shine in a slow growth, higher inflation environment. - The problem recently is that the slowing economy has led to a slowdown in cash returned to shareholders in the form of dividends and share buybacks by the market. - We believe in the importance of preparation for potential uphill climbs as well as the value in finding investments that raise their cash returns to shareholders.

07.02.2024

Sterling Capital Management LLC joins Guardian Capital Group Limited

Sterling Capital Management LLC announced today the completion of its acquisition by Guardian Capital LLC, a wholly-owned subsidiary of global asset manager Guardian Capital Group Limited.

07.02.2024

Sterling Capital joins Guardian Capital Group Limited

“We are thrilled to announce the completion of Sterling’s acquisition by Guardian Capital Group, a global asset manager. We are also thankful to join an organization that shares our culture and values in protecting our clients’ assets - and we are truly excited for our bright future together!” – Scott Haenni, Sr. Managing Director & CEO at Sterling Capital Management

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06.27.2024 • Jeffrey Ormsby, CFA®

Fixed Income and Federal Reserve Rate Cuts: How Should We Expect Fixed Income to Perform?

As one would expect, in most historical periods where interest rates were declining, fixed income total return has been good, with investors capturing the coupon income as well as benefiting from the increase in prices as rates fall. Looking at the history of the Bloomberg Aggregate Bond Index since 1988, in the previous five Federal Reserve (Fed) rate-cutting cycles, the index posted annualized returns averaging north of 8%.

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06.13.2024 • Andrew Richman, CTFA

When It Comes to Fed Policy, Follow the Data, Not the Dots

Andy Richman's update on the June Federal Open Market Committee meeting.

06.05.2024 • Charles Wittmann, CFA®

The Lead - "An Indicator of Business Confidence"

- Several notable companies have elected to inaugurate a quarterly dividend this year, while 47 companies in the U.S. stopped paying dividends during the COVID-19 crisis and have yet to reinstitute one. Why? - We would suggest it comes down to the ability to pay an ever-increasing dividend alongside their confidence in their business’s future. - In the current period of fewer dividend initiations, slower dividend growth in the market, and household names cutting their dividends, we believe there are several lessons to learn.

Contact

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