Versatile Bond Portfolioprpfx.com/pdf/VBP_Investor_Guide.pdfVersatile Bond Portfolio Class I...

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Benchmark is Bloomberg Barclay’s Capital Global Aggregate (Excluding Securitized) Bond Index, June 1, 2012 through June 30, 2020. Share Classes Versatile Bond Portfolio Seeks to earn high current income In pursuit of its investment objective, under normal market conditions Versatile Bond Portfolio invests at least 80% of its assets in bonds, which may include debt securities of all types and of any maturity. This provides the Portfolio with flexibility to invest in a wide range of bonds, take advantage of opportunities in the bond market, and thus may provide attractive returns to shareholders over the long term. Takes a different approach Flexible management The Portfolio may invest in obligations of U.S. and non-U.S. issuers, including corporate bonds, convertible securities, preferred stock, commercial paper, securities issued or guaranteed by the U.S. government, its agencies or government-sponsored enterprises, similar obligations of non- U.S. government or supranational entities, bank obligations such as certificates of deposit, time deposits, bank notes and repurchase agreements. Such investments may be in “investment grade” or “below investment grade” bonds (“high yield” or “junk” bonds) and may be denominated in U.S. dollars or foreign currencies. Up to 50% of the Portfolio may be invested in bonds rated below investment grade at the time of investment. No fixed duration Versatile Bond Portfolio may invest in bonds with a range of maturities from short- to long-term and does not attempt to maintain any pre-set average portfolio maturity or duration, but rather seeks to manage the Portfolio’s duration based on the investment adviser’s forecast of interest rates and assessment of general market risks. Fund facts Morningstar Category Corporate Bond Net Assets (millions) $7.605 Alpha 3.03 Beta .57 Sharpe Ratio .47 Standard Deviation 6.80 SEC Standardized Yield (%) Class I: Unsubsidized, Subsidized 4.14, 4.71 Class A: Unsubsidized, Subsidized 3.88, 4.45 Class C: Unsubsidized, Subsidized 3.13, 3.70 ü Invests opportunistically ü Flexible duration Focus at all times is on strong credit quality, active spread and duration management, and opportunistic pursuit of undiscovered and undervalued debt securities within well- known industries and sectors. ü Active credit risk management ü 50% investment grade at all times Conservative, Low Current Income & Short Duration Aggressive, High Yield & High Volatility Seeks Capital Preservation, Moderate Risk Versatile Bond Portfolio Versatile Bond Portfolio’s investments in debt securities typically decrease in value when interest rates rise. The risk is usually greater for longer-term debt securities. Investments in below investment grade bonds (also referred to as “high yield” or “junk” bonds) present a greater risk of loss to principal and interest than higher-rated securities. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets. In addition, certain investments may be illiquid and may be difficult to purchase, sell, or value. Low Risk High Risk Class I: PRVBX Class A: PrVDX Class C: PRVHX Standard & Poor’s Credit Quality (%) Versatile Bond Portfolio As of June 30, 2020 B+ to B- A+ to A- BB+ to BB- BBB+ to BBB- 5.95 36.06 3.73 21.21 33.05 Not Rated

Transcript of Versatile Bond Portfolioprpfx.com/pdf/VBP_Investor_Guide.pdfVersatile Bond Portfolio Class I...

Page 1: Versatile Bond Portfolioprpfx.com/pdf/VBP_Investor_Guide.pdfVersatile Bond Portfolio Class I Bloomberg Barclays Capital Global Aggregate (ExcludingSecuritized) Bond Index Data Source:

Benchmark is Bloomberg Barclay’s Capital Global Aggregate (Excluding Securitized)Bond Index, June 1, 2012 through June 30, 2020.

Share Classes

Versatile Bond Portfolio

Seeks to earn high current income

In pursuit of its investment objective, under normal marketconditions Versatile Bond Portfolio invests at least 80% of itsassets in bonds, which may include debt securities of all typesand of any maturity. This provides the Portfolio with flexibilityto invest in a wide range of bonds, take advantage ofopportunities in the bond market, and thus may provideattractive returns to shareholders over the long term.

Takes a different approach

Flexible management

The Portfolio may invest in obligations of U.S. and non-U.S.issuers, including corporate bonds, convertible securities,preferred stock, commercial paper, securities issued orguaranteed by the U.S. government, its agencies orgovernment-sponsored enterprises, similar obligations of non-U.S. government or supranational entities, bank obligationssuch as certificates of deposit, time deposits, bank notes andrepurchase agreements. Such investments may be in“investment grade” or “below investment grade” bonds (“highyield” or “junk” bonds) and may be denominated in U.S.dollars or foreign currencies. Up to 50% of the Portfolio maybe invested in bonds rated below investment grade at the timeof investment.

No fixed duration

Versatile Bond Portfolio may invest in bonds with a range ofmaturities from short- to long-term and does not attempt tomaintain any pre-set average portfolio maturity or duration,but rather seeks to manage the Portfolio’s duration based onthe investment adviser’s forecast of interest rates andassessment of general market risks.

Fund facts

Morningstar Category Corporate Bond

Net Assets (millions) $7.605

Alpha 3.03

Beta .57

Sharpe Ratio .47

Standard Deviation 6.80

SEC Standardized Yield (%)Class I: Unsubsidized, Subsidized 4.14, 4.71Class A: Unsubsidized, Subsidized 3.88, 4.45Class C: Unsubsidized, Subsidized 3.13, 3.70

ü Invests opportunistically

ü Flexible duration

Focus at all times is on strong credit quality, active spread andduration management, and opportunistic pursuit ofundiscovered and undervalued debt securities within well-known industries and sectors.

ü Active credit risk management

ü 50% investment grade at all times

Conservative, Low Current Income & Short Duration

Aggressive, High Yield & High Volatility

Seeks Capital Preservation,

Moderate Risk

Versatile Bond Portfolio

Versatile Bond Portfolio’s investments in debt securities typicallydecrease in value when interest rates rise. The risk is usually greater forlonger-term debt securities. Investments in below investment gradebonds (also referred to as “high yield” or “junk” bonds) present a greaterrisk of loss to principal and interest than higher-rated securities.Investments in foreign securities involve greater volatility and political,economic and currency risks, and differences in accounting methods.These risks are greater in emerging markets. In addition, certaininvestments may be illiquid and may be difficult to purchase, sell, orvalue.

Low Risk

High Risk

Class I: PRVBX

Class A: PrVDX

Class C: PRVHX

Standard & Poor’s Credit Quality (%)

Versatile Bond Portfolio

As of June 30, 2020

B+ to B-

A+ to A-

BB+ to BB-

BBB+ to BBB-5.95

36.06

3.73 21.21

33.05Not Rated

Page 2: Versatile Bond Portfolioprpfx.com/pdf/VBP_Investor_Guide.pdfVersatile Bond Portfolio Class I Bloomberg Barclays Capital Global Aggregate (ExcludingSecuritized) Bond Index Data Source:

A little-known

bond fund

you’ll want to

know more

about

strategies prior to May 30, 2012.Bloomberg Barclays Capital GlobalAggregate (Excluding Securitized) BondIndex commenced on September 30,2002. Returns presented, which includeperiods prior to September 30, 2002, arecalculated using the return data ofBloomberg Barclays Capital GlobalAggregate Bond Index through September29, 2002 and the return data ofBloomberg Barclays Capital GlobalAggregate (Excluding Securitized) BondIndex since September 30, 2002.Bloomberg Barclays Capital GlobalAggregate Bond Index is a market-capitalization weighted, broad-basedsecurities index measuring the globalinvestment grade fixed-rate debt markets.Bloomberg Barclays Capital GlobalAggregate Bond Index measures a widerange of global government-related,treasury, corporate, and securitized fixed-income investments. Bloomberg BarclaysCapital Global Aggregate (ExcludingSecuritized) Bond Index is a sub-index ofBloomberg Barclays Capital GlobalAggregate Bond Index and excludessecuritized fixed-income investments.FTSE BIG Credit AAA/AA 1-3 YearCorporate Bond Index and FTSE BIGCredit A 1-3 Year Corporate Bond Indexare components of FTSE BroadInvestment-Grade (BIG) Bond Index,which is an unmanaged, capitalization-weighted index of investment-grade fixed-income securities and is generallyconsidered representative of the U.S.Bond market. Returns shown for theseindices reflect reinvested interest,dividends and other distributions asapplicable, but do not reflect a deductionfor fees, expenses or taxes. Indices areunmanaged and are not subject to fees andexpenses. You cannot invest directly in anindex.

Average annual total returns (%) As of June 30, 2020

Expense ratios (%)

YTD 1 Year 3 Years 5 Years 10 Years Inception

Class I .57 3.75 4.58 3.95 3.21 3.55

Class A Load -3.58 -.66 2.91 - - 3.39

Class A No Load .44 3.49 4.32 - - 4.43

Class C Load -.95 1.69 3.54 - - 3.65

Class C No Load .05 2.69 3.54 - - 3.65

Bloomberg Barclays Capital Global Aggregate (Excluding Securitized) Bond Index

2.95 4.14 3.85 3.67 2.79 5.29

FTSE BIG Credit AAA/AA 1-3 Year Corporate Bond Index

2.98 4.35 3.06 2.28 1.84 4.35

FTSE BIG Credit A 1-3 Year Corporate Bond Index

3.10 4.81 3.34 2.65 2.43 4.65

Net Expense Ratio Gross Expense Ratio

Class I .66 1.22

Class A .91 1.47

Class C 1.66 2.22

IMPORTANT NOTE: Versatile Bond Portfolio changed its investment objective as ofMay 30, 2012. Average Annual Total Return from June 1, 2012 through June 30, 2020was 3.92%.

Performance data quoted represents past performance and does not guarantee future results. Theinvestment return and principal value of an investment will fluctuate so that an investor’s shares, whenredeemed, may be worth more or less than their original cost. Investment performance, current to themost recent month-end, may be lower or higher than the performance quoted. It can be obtained bycalling (800) 531-5142. Performance data shown with load reflects the Class A shares maximum salescharge of 4.00% and the Class C shares maximum deferred sales charge of 1.00%. Performance datashown as no load does not reflect the current maximum sales charges. Had the sales charge beenincluded, the Portfolio’s returns would be lower. All results are historical and assume the reinvestmentof dividends and capital gains. Inception date for Class I shares was September 27, 1991.Inception date for Class A shares and Class C shares was May 31, 2016. Pursuant to anAdvisory Fee Waiver and Expense Assumption Agreement effective through June 1, 2021,the Portfolio’s investment adviser has contractually agreed to waive a portion of itsManagement Fee payable by the Portfolio so that the Management Fee paid by the Portfoliodoes not exceed an annual rate of .6250% of the Portfolio’s average daily net assets. TheAgreement may be terminated or amended only with the approval of the Fund’s Board ofTrustees. Bloomberg Barclays Capital Global Aggregate (Excluding Securitized) Bond Indexhas characteristics relevant to the Portfolio’s current investment strategies. The FTSE BIGCredit AAA/AA 1-3 Year Corporate Bond Index and the FTSE BIG Credit A 1-3 YearCorporate Bond Index have characteristics relevant to the Portfolio’s investment

Page 3: Versatile Bond Portfolioprpfx.com/pdf/VBP_Investor_Guide.pdfVersatile Bond Portfolio Class I Bloomberg Barclays Capital Global Aggregate (ExcludingSecuritized) Bond Index Data Source:

Versatile Bond

Portfolio has

provided it’s

investors with

competitive

returns

The chart illustrates the performance of$10,000 invested in Versatile BondPortfolio Class I shares five years agocompared to performance of theBloomberg Barclays Capital GlobalAggregate (Excluding Securitized) BondIndex over the same period. It does notreflect the deduction of taxes aninvestor would pay on funddistributions or on the redemption offund shares. Returns for Versatile BondPortfolio Class I reflect reinvestment ofall dividends and distributions anddeduction of all fees and expenses.Past performance does notguarantee future results. SECStandardized Yield is based on a thirty-day (or one month) period and iscomputed by dividing the netinvestment income (i.e. dividends andinterest earned during the period lessexpenses accrued for the period, net ofreimbursements) per share earnedduring the period by the net asset valueper share on the last day of the period,using the average number of sharesoutstanding during the period and thenannualizing the result. Subsidized Yieldreflects voluntary fee waiver. Alpha isthe mean of the excess return of themanager over beta times benchmark.Beta is a measure of systematic risk orthe sensitivity of a manager tomovements in the benchmark. SharpeRatio is a risk-adjusted measure ofreturn, which uses standard deviationto represent risk. Standard Deviationmeasures the average deviations of areturn series from its mean and is oftenused as a measure of risk. A largedeviation implies there have been largeswings in the return series of themanager.

Growth of $10,000 Investment

July 1, 2015 through June 30, 2020

Versatile Bond Portfolio Class I Bloomberg Barclays Capital GlobalAggregate (Excluding Securitized) BondIndex

Data Source: Zephyr StyleADVISOR

$8,500

$9,000

$9,500

$10,000

$10,500

$11,000

$11,500

$12,000

$12,500

Jun-20

15

Dec-20

15

Jun-20

16

Dec-20

16

Jun-20

17

Dec-20

17

Jun-20

18

Dec-20

18

Jun-20

19

Dec-20

19

Jun-20

20

$11,975

$12,134

Page 4: Versatile Bond Portfolioprpfx.com/pdf/VBP_Investor_Guide.pdfVersatile Bond Portfolio Class I Bloomberg Barclays Capital Global Aggregate (ExcludingSecuritized) Bond Index Data Source:

Experienced asset management team

President & Portfolio Manager Versatile Bond Portfolio’s investment objectives,risks, charges and expenses must be consideredcarefully before investing. The statutoryProspectus and Summary Prospectus containthis and other important information. Theymay be obtained by calling (800) 531-5142or by visiting permanentportfoliofunds.com.Read carefully before investing. PacificHeights Asset Management, LLC (“PacificHeights”) is the investment adviser toPermanent Portfolio Family of Funds, aDelaware statutory trust (“Fund”). TheFund is distributed by QuasarDistributors, LLC (“Quasar”), a memberof FINRA. Quasar is not affiliated withPacific Heights. Pacific Heights becamethe Fund’s investment adviser on May 1,2003. Prior to that, an investment adviserunrelated to Pacific Heights managed theFund. Mutual fund investinginvolves risk; loss of principal ispossible. Not FDIC Insured. NoBank Guarantee. May Lose Value.Permanent Portfolio®, The PermanentPortfolio Family of Funds®, A Fund forAll Seasons® and The PermanentPortfolio Family of Funds logo areregistered trademarks of Pacific Heights.This document is Copyright © 2020Permanent Portfolio Family of Funds. Allrights reserved.

For more information

Visit us onlinepermanentportfoliofunds.com

Follow us on LinkedIn

Portfolio Management(415) 398-8000

Institutional Sales(866) 792-6547

Individual Investors (800) 531-5142

Michael J. Cuggino

Mr. Cuggino has served as thePresident and Portfolio Manager ofPermanent Portfolio Family of Fundssince his investment advisory firm,Pacific Heights Asset Management,LLC, began managing the Fund’sfour Portfolios on May 1, 2003. Mr.Cuggino has served as a trustee of theFund since 1998, as its Chairman ofthe Board and President since 2003and as its Secretary since 2006. From1993 through 2007, Mr. Cugginoserved as the Fund’s Treasurer. Mr.Cuggino serves as the manager andsole trustee of the sole member (alsoas the President and Chief ExecutiveOfficer) of Pacific Heights since itsfounding in 2002. Mr. Cugginopreviously served in variousaccounting, auditing and taxationcapacities at Ernst & Young LLP andone of its predecessor firms, ArthurYoung & Company, from 1985through 1991. Mr. Cuggino is aCertified Public Accountant(inactive) and received hisundergraduate degrees inaccountancy and management fromBentley University.

Derek d. hyatt, CFA

Mr. Hyatt has served as a SeniorInvestment Analyst at Pacific HeightsAsset Management, LLC since 2010.Prior to joining Pacific Heights, Mr.Hyatt served as a Senior VicePresident, Fixed Income Sales atJefferies & Company, Inc. from 2009through 2010, as a Vice President,Middle Markets Fixed Income Salesat Merrill Lynch, Pierce, Fenner &Smith, Inc. from 1996 through 2009and as an Associate, InstitutionalSales at R.W. Pressprich &Company, Inc. from 1994 through1996. Prior to that, Mr. Hyatt servedas a Project Engineer at Orth-Rodgers & Associates, Inc., a civilengineering firm. Mr. Hyatt receivedhis undergraduate degree in industrialengineering from Lehigh University.He is a CFA Charterholder and amember of the CFA Society Boston.

Senior Investment Analyst