Mutual Fund Summary Prospectus (497k)
January 31 2014 - 8:37AM
Edgar (US Regulatory)
Waddell & Reed Advisors Core Investment Fund
Summary Prospectus | October 31, 2013, as supplemented January 31, 2014
Share Class (Ticker):
Class A Shares (UNCMX), Class B Shares (UNIBX), Class C Shares (WCCIX), Class Y (UNIYX)
Before you invest, you may want to review the Funds prospectus, which contains more information about the Fund and
its risks. You can find the Funds prospectus and other information about the Fund (including the Funds SAI) online at
www.waddell.com/prospectus
. You can also get this information at no cost by calling 888.WADDELL or by sending an
e-mail request to
IMCompliance@waddell.com
. You can also get this information from your investment provider. The Funds prospectus dated October 31, 2013 and SAI dated January 31, 2014 (as each may be amended or supplemented) are
incorporated herein by reference.
Objective
To seek
to provide capital growth and appreciation.
Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the
future, at least $100,000 in funds within Waddell & Reed Advisors Funds, InvestEd Portfolios and/or Ivy Funds. More information about these and other discounts is available from your financial professional and in the Sales Charge
Reductions section on page 81 of the Funds prospectus and in the Purchase, Redemption and Pricing of Shares section on page 89 of the Funds statement of additional information (SAI). Effective January 1, 2014, the
Funds Class B shares are not available for purchase by new and existing investors. Class B shares will continue to be available for dividend reinvestment and exchanges.
Shareholder Fees
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(fees paid directly from your investment)
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Class A
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Class B
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Class C
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Class Y
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Maximum Sales Charge (Load) Imposed on Purchases
(as a % of offering price)
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5.75%
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None
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None
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None
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Maximum Deferred Sales Charge (Load)
(as a % of lesser of amount invested or redemption value)
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1.00%
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1
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5.00%
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1
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1.00%
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1
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None
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Maximum Account Fee
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$20
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2
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None
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$20
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2
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None
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Annual Fund Operating Expenses
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(expenses that you pay each year as a % of the value of your investment)
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Class A
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Class B
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Class C
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Class Y
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Management Fees
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0.64%
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0.64%
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0.64%
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0.64%
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Distribution and Service (12b-1) Fees
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0.25%
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1.00%
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1.00%
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None
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Other Expenses
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0.22%
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0.72%
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0.45%
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0.18%
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Total Annual Fund Operating Expenses
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1.11%
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2.36%
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2.09%
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0.82%
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1
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For
Class A shares, a 1% contingent deferred sales charge (CDSC) is only imposed on Class A shares that were purchased at net asset value (NAV) for $1 million or more that are subsequently redeemed within 12 months of purchase. For Class B
shares, the CDSC declines from 5% for redemptions within the first year of purchase, to 4% for redemptions within the second year, to 3% for redemptions within the third and fourth years, to 2% for redemptions within the fifth year, to 1% for
redemptions within the sixth year and to 0% for redemptions after the sixth year. For Class C shares, a 1% CDSC applies to redemptions within 12 months of purchase.
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2
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With limited exceptions, for Class A and Class C shares, if your Fund account balance is below $750 at the close of business on September 26, 2014, and
on the Friday prior to the last week of September each year thereafter, the account will be assessed an account fee of $20.
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Example
This example is intended to help you compare the cost of investing in the shares of the
Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the particular class of
shares of the Fund for the time periods indicated and then redeem all your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the
same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
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1 Year
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3 Years
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5 Years
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10 Years
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Class A Shares
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$
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682
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$
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908
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$
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1,151
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$
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1,849
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Class B Shares
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639
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1,036
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1,360
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2,384
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Class C Shares
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212
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655
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1,124
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2,421
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Class Y Shares
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84
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262
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455
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1,014
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You would pay the following expenses if you did not redeem your shares:
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1 Year
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3 Years
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5 Years
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10 Years
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Class A Shares
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$
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682
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$
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908
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$
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1,151
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$
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1,849
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Class B Shares
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239
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736
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1,260
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2,384
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Class C Shares
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212
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655
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1,124
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2,421
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Class Y Shares
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84
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262
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455
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1,014
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Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs
and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year, the
Funds portfolio turnover rate was 68% of the average value of its portfolio.
Principal Investment Strategies
Waddell & Reed Advisors Core Investment Fund seeks to achieve its objective by investing, under normal circumstances, at least 80% of its net assets in equity securities, primarily in common
stocks of large capitalization companies that Waddell & Reed Investment Management Company (WRIMCO), the Funds investment manager, believes have dominant market positions in their industries. Large capitalization companies typically
are companies with market capitalizations of at least $10 billion at the time of acquisition. The Fund invests in securities that have the potential for capital appreciation, or that WRIMCO expects to resist market decline. Although the Fund
typically invests in securities issued by large capitalization companies, it may invest in securities issued by companies of any size. While the Fund typically invests in securities issued by core-oriented companies, it has the ability to invest in
securities of companies across the valuation spectrum, including securities issued by growth and value-oriented companies.
WRIMCO believes
that long-term earnings power relative to market expectations is an important component for stock performance. WRIMCO utilizes both a top-down (assess the market environment) and a bottom-up (research individual issuers) analysis in its
securities-selection process.
From a top-down perspective, WRIMCO seeks to identify current trends or themes which indicate specific
industries that have the potential to experience multi-year growth. WRIMCO considers various thematic factors in its analysis, including major macro-economic and political forces, cyclical inflections, changes in consumer behavior and technology
shifts. Once a trend or theme is identified, WRIMCO seeks to invest for the Fund in what it believes are dominant companies that will benefit from these trends or themes; including companies that WRIMCO believes have long-term earnings potential
greater than market expectations.
Through its bottom-up stock selection, WRIMCO searches for companies for which it believes market
expectations are too low with regard to the companys ability to grow its business. In selecting securities for the Fund, WRIMCO may consider whether a company has new products to introduce, has undergone cost restructuring or a management
change, or has improved its execution, among other factors. The Fund typically holds a limited number of stocks (generally 40 to 50).
Many
U.S. companies have diverse operations, with products or services in foreign markets. Therefore, the Fund will have an indirect exposure to foreign markets through investments in these companies.
Generally, in determining whether to sell a security, WRIMCO uses the same type of analysis that it uses in buying securities. Among other factors, WRIMCO
considers whether, in its opinion, the security has fully appreciated according to WRIMCOs forecast, has ceased to offer the prospect of significant growth potential, has had its competitive barriers diminished, has seen its earnings catalyst
lose its impact, or has performed below WRIMCOs expectations regarding the securitys long-term earnings potential. WRIMCO also may sell a security to reduce the Funds holding in that security if that issuers competitive
advantage has diminished or if the Funds portfolio managers lose conviction in a previously identified trend or theme, to take advantage of what it believes are more attractive investment opportunities or to raise cash.
Principal Investment Risks
As with any mutual
fund, the value of the Funds shares will change, and you could lose money on your investment. The Fund is not intended as a complete investment program. A variety of factors can affect the investment performance of the Fund and prevent it from
achieving its objective. These include:
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Company Risk
. A company may perform worse
than the overall market due to specific factors, such as adverse changes to its business or investor perceptions about the company.
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Foreign Exposure Risk
. The securities of many
companies may have significant exposure to foreign markets as a result of the companys products or services in those foreign markets. As a result, a companys domicile and/or the markets in which the companys securities trade may
not be fully reflective of its sources of revenue. Such securities would be subject to some of the same risks as an investment in foreign securities, including the risk that political and economic events unique to a country or region will adversely
affect those markets in which the companys products or services are sold.
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Growth Stock Risk
. Prices of growth stocks
may be more sensitive to changes in current or expected earnings than the prices of other stocks. Growth stocks may not perform as well as value stocks or the stock market in general.
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Holdings Risk
. The Fund typically holds a
limited number of stocks (generally 40 to 50). As a result, the appreciation or depreciation of any one security held by the Fund will have a greater impact on the Funds NAV than it would if the Fund invested in a larger number of securities.
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Large Company Risk
. Large capitalization
companies may go in and out of favor based on market and economic conditions. Large capitalization companies may be unable to respond quickly to new competitive challenges, such as changes in technology, and also may not be able to attain the high
growth rate of successful smaller companies, especially during extended periods of economic expansion. Although the securities of larger companies may be less volatile than those of companies with smaller market capitalizations, returns on
investments in securities of large capitalization companies could trail the returns on investments in securities of smaller companies.
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Management Risk
. Fund performance is
primarily dependent on WRIMCOs skill in evaluating and managing the Funds portfolio and the Fund may not perform as well as other similar mutual funds.
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Market Risk
. Adverse market conditions,
sometimes in response to general economic or industry news, may cause the prices of the Funds holdings to fall as part of a broad market decline. The financial crisis in the U.S. and foreign economies over the past several years, including the
European sovereign debt crisis, has resulted, and may continue to result, in an unusually high degree of volatility in the financial markets, both U.S. and foreign, and in the NAVs of many mutual funds, including to some extent the Fund. Global
economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region may adversely affect issuers in another country or region, which in turn may adversely affect
securities held by the Fund. These circumstances have also decreased liquidity in some markets and may continue to do so. In addition, certain unanticipated events, such as natural disasters, terrorist attacks, war, and other geopolitical
events, can have a dramatic adverse effect on securities held by the Fund.
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Value Stock Risk
. Value stocks are stocks of
companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor and, in the opinion of WRIMCO, undervalued. The value of a security believed by WRIMCO to
be undervalued may never reach what is believed to be its full value, or such securitys value may decrease.
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Performance
The chart and table below provide some indication of the risks of investing in the Fund. The chart shows how performance has varied from
year to year for Class A shares. The table shows the average annual total returns for each Class of the Fund and also compares the performance with those of a broad-based securities market index and a Lipper peer group (a universe of mutual
funds with investment objectives similar to that of the Fund). The chart does not reflect any sales charges and, if those sales charges were included, returns would be less than those shown.
After-tax returns are calculated using the historical highest individual Federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an
investors tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs), or to shares
held by non-taxable entities. After-tax returns are shown only for Class A shares. After-tax returns for other Classes may vary.
Performance results include the effect of expense reduction arrangements for some or all of the periods shown. If those arrangements had not been in
place, the performance results for those periods would have been lower.
The Funds past performance (before and after taxes) does not
necessarily indicate how it will perform in the future. Current performance may be lower or higher. Please visit
www.waddell.com
or call 888.WADDELL for the Funds updated performance.
Chart of Year-by-Year Returns
as of
December 31 each year
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In the period shown in the chart, the highest quarterly return was 17.25% (the third quarter of 2009) and the lowest quarterly return was -20.25% (the fourth quarter of 2008). The
Class A return for the year through September 30, 2013 was 21.08%.
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Average Annual Total Returns
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as of December 31, 2012
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1 Year
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5 Years
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10 Years
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Class A
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Return Before Taxes
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11.63%
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1.92%
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7.49%
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Return After Taxes on Distributions
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10.54%
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1.49%
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6.83%
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Return After Taxes on Distributions and Sale of Fund Shares
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9.37%
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1.69%
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6.63%
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Class B
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Return Before Taxes
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12.87%
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1.71%
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6.88%
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Class C
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Return Before Taxes
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17.20%
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2.10%
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7.03%
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Class Y
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Return Before Taxes
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18.72%
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3.48%
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8.47%
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Indexes
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1 Year
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5 Years
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10 Years
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S&P 500 Index (reflects no deduction for fees, expenses or taxes)
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16.00%
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1.66%
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7.10%
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Lipper Large-Cap Core Funds Universe Average (net of fees and expenses)
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14.95%
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0.68%
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6.51%
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Investment Adviser
The Fund is managed by Waddell & Reed Investment Management Company (WRIMCO).
Portfolio Managers
Erik R. Becker, Senior Vice President of WRIMCO, and Gustaf C. Zinn, Senior Vice President of WRIMCO, have both managed the Fund since July 2006.
Purchase and Sale of Fund Shares
The Funds shares are redeemable. You may purchase or redeem
shares at the Funds NAV per share next calculated after your order is received in proper form, subject to any applicable sales charge, on any business day through your broker-dealer or financial adviser (all share classes), by writing to
Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Funds servicing agent, P.O. Box 29217, Shawnee Mission, Kansas 66201-9217 (all share classes), or by telephone (Class A, B and C: 888.WADDELL; Class Y:
800.532.2783), fax (800.532.2749), or internet (
www.waddell.com
) (Class A, B and C) if you have completed an Express Transaction Authorization Form. If your individual account is not maintained on the Funds shareholder servicing
system, please contact your selling broker-dealer, plan administrator or third-party record keeper to sell shares of the Fund.
The Funds
initial and subsequent investment minimums generally are as follows, although the Fund and/or Waddell & Reed, Inc. may reduce or waive the minimums in some cases:
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For Class A, Class B and Class C:
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To Open an Account
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$500
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*
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For accounts opened with Automatic Investment Service (AIS)
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$50
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For accounts established through payroll deductions and salary deferrals
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Any amount
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To Add to an Account
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Any amount
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For AIS
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$25
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For Class Y:
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Please check with your selling broker-dealer, plan administrator or third-party record keeper for information about minimum
investment requirements.
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*
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Effective January 1, 2014, for Class A and Class C shares, the minimum amount to open an account will increase to $750 from $500, the minimum amount to open an account
with AIS will increase to $150 from $50, and the minimum amount to add an AIS to an account will increase to $50 from $25.
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Effective January 1, 2014, the Funds Class B shares are not available for purchase by new and existing investors. Class B shares will continue
to be available for dividend reinvestment and exchanges.
Tax Information
The Funds distributions are generally taxable to you as ordinary income, long-term capital gain, or a combination of the two, unless you are investing through a tax-deferred arrangement, such as a
401(k) plan or an IRA.
Payments to Broker-Dealers and other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and/or WRIMCO and/or its affiliates may pay the intermediary for the sale of Fund shares and
related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial
intermediarys web site for more information.
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