Overview

Scout Investments, Inc. is the subadviser to the Carillon Reams Core Bond Fund and an affiliate of Carillon Tower Advisers, Inc. the Investment Adviser.

The Carillon Reams Core Bond Fund normally pursues its objective of seeking a high level of total return consistent with the preservation of capital by investing its assets in bonds of varying maturities, including mortgage- and asset-backed securities. The Fund primarily invests in investment grade bonds.

Investment Process

The Fund’s investment process combines active duration management with bottom-up security selection, focusing on undervalued sectors of the fixed income market while structuring the Fund so that the overall portfolio has an average portfolio duration of between two to seven years. Duration strategy is based on a model in which current inflation-adjusted interest rates are evaluated relative to historical norms. Bottom-up security selection is based on a scenario analysis to identify which bonds might perform best under possible interest rate and credit scenarios. The investment team then compares investment opportunities and the portfolio is assembled from the best values.

A Word about Risk

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. Mortgage- and Asset-Backed Securities are subject to prepayment risk and the risk of default on the underlying mortgages or other assets.

Foreign investments present additional risks due to currency fluctuations, economic and political factors, government regulations, differences in accounting standards and other factors.

Derivatives such as credit default swap agreements and futures contracts 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 and derivatives investments 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.

(1) Credit quality. Credit quality is a measure of creditworthiness of the issuing organization that reflects the likelihood that it will be able to pay its debt (credit risk). Investment grade refers to securities rated [BBB-] or better by Standard & Poor’s Rating Services or an equivalent rating by at least one other nationally recognized statistical rating organization or, for unrated securities, those that are determined to be of equivalent quality by the fund’s portfolio managers.

(2) Duration. Duration is the most commonly used measure of risk in bond investing. Duration incorporates a bond’s yield, coupon, final maturity and call features into one number, expressed in years, that indicates how price-sensitive a bond or portfolio is to changes in interest rates. Bonds with higher durations carry more risk and have higher price volatility than bonds with lower durations.