The fund seeks a high level of income and maximum credit protection by investing at least 80% of net assets in GNMA securities backed by the full faith and credit of the U.S. government.
Invests primarily in mortgage-backed certificates issued by the Government National Mortgage Association (GNMA) as well as in other high-quality (AAA or AA) securities. Effective maturity will vary and will be influenced by the level of interest rates and prepayment of mortgage–backed bonds.
Investors who seek higher yields for the fixed-income portion of their portfolio and can meet the fund's $25,000 initial purchase requirement. Appropriate for tax-deferred retirement plans, such as IRAs.
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The Summit GNMA Fund seeks to provide high current income along with maximum credit protection and moderate price fluctuation. The fund's minimum investment of $25,000 helps keep expenses low, thereby increasing total return potential. Mortgage-backed bonds offer higher income than Treasuries without any decrease in credit quality.
Yield and share price will vary with interest rate changes. Investors should note that if interest rates rise significantly from current levels, bond fund total returns will decline and may even turn negative in the short term. The Summit GNMA Fund is also susceptible to prepayment risk, which occurs when homeowners pay off their loans early. An investment in the fund is not guaranteed by the U.S. government.