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Floating Rate Bank Loans: An Attractive Asset Class for Uncertain Markets Executive Summary This paper outlines the reasons investors may wish to cons...
Author: Archibald Riley
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Floating Rate Bank Loans: An Attractive Asset Class for Uncertain Markets Executive Summary This paper outlines the reasons investors may wish to consider having exposure to floating rate bank loans, particularly in today’s interest rate environment. This high-yielding asset class, also known as senior bank loans or leveraged loans, offers: Protection against rising interest rates: Unlike traditional fixed rate bonds, floating rate bank loans feature coupons that reset as interest rates change. This feature means floating rate bank loans generally hold their value when interest rates change, making them particularly appealing in markets such as today’s, when investors expect rates to eventually increase. Generally, fixed income securities will decrease in value if interest rates rise and vice versa. Debt obligation seniority: Unlike traditional high yield corporate bonds, floating rate bank loans typically have senior positions in the issuer’s capital structure. This means floating rate loans often take precedence over other debt claims if the borrower is unable to meet its obligations. But, it’s important to note there is no guarantee the value of the loan’s underlying collateral will not decline, causing a loan to become substantially unsecured. Loans generally are subject to restrictions on resale. Low correlation to other asset classes: Floating rate bank loans held their value and generated added income in previous periods of rising interest rates when the prices of traditional fixed rate bonds declined. As such, floating rate loans may help enhance portfolio diversification. Investors may wish to access this asset class via professional management. Experienced investment managers who have successfully guided floating rate bank loan portfolios through various interest rate and economic climates may be an ideal way to add this asset class to a well-diversified investment portfolio.

The assertions in this white paper are based on RidgeWorth’s opinion. Performance information regarding floating rate loan strategies reflect historical data and may not be predictive of future performance. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher quality bonds generally offer less risk than longer term bonds and a lower rate of return. Floating rate loans are typically senior and secured, in contrast to other below-investment-grade securities. However, there is no guarantee that the value of the collateral will not decline, causing a loan to be substantially unsecured. Loans generally are subject to restrictions on resale. Generally, fixed income securities will decrease in value if interest rates rise and vice versa.

Floating Rate bank loans: An Attractive Asset Class for Uncertain Markets

August 2013

Contents

W h at a r e f lo at i n g r at e B a n k Lo a n s ?

2 What are floating

Floating rate bank loans represent a subset of the high-yield bond market. They are short-term, variablerate debt securities issued by investment and commercial banks that provide capital to companies with a below-investment-grade credit rating. Companies typically use these loans to finance mergers and acquisitions, leveraged buyouts, recapitalizations and capital expenditures.



rate bank loans?

3 How do floating rate bank loans differ from other bonds? 5 What are the benefits of floating rate bank loans? 6 What are the risks? 6 What is the outlook for the floating rate bank loan market in 2013? 7 What should investors look for in a floating rate bank loan fund?

Ultimately, the loans are sold to investors, who may hold or trade the securities in the secondary market. The floating rate bank loan market is a growing asset class. Total assets in the floating rate loan market equaled $667 billion as of December 31, 2012, according to the Credit Suisse Leverage Loan Index. As Exhibit 1 illustrates, the market included more than 1,422 issuers and dozens of industry sectors. EXHIBIT 1: Composition of Credit Suisse Leveraged Loan Index (as of 12/31/2012) Other: 7.40%*

Media/Telecom: 17.21%

7 Conclusion



Healthcare: 13.32%

Consumer Non-Durables: 2.35% Metals/Minerals: 2.56% Automotive: 2.65% Broadcasting: 2.77% Telecommunications: 2.81% Energy: 3.17% Aerospace: 3.23% Manufacturing: 3.26% Chemicals: 3.43% Cable/Wireless Video: 3.52% Financial: 3.77% Transportation: 4.20% Retail: 4.39%

Service: 11.62% Information Technology: 7.70% Diversified Media: 6.98% Source: Credit Suisse pulled as of 3/13/2013

Utility: 4.60% Food/Tobacco: 4.89% Gaming/Leisure: 5.59%

* OTHER Shipping0.40% Consumer Durables 0.58% Food and Drug 0.79% Wireless Communications 1.13% Land Transportation 1.15% Forest Products 1.61% Housing1.74%

Floating Rate bank loans: An Attractive Asset Class for Uncertain Markets

Page 2

H o w d o f lo at i n g r at e b a n k Lo a n s d i f f e r f r o m ot h e r b o n d s ? Floating rate bank loans differ from traditional fixed income securities, including government, corporate and mortgage-backed bonds, in four important ways: 1. Their interest payments reset with market rates Unlike traditional fixed income securities, which offer investors a fixed interest rate payment that remains unchanged throughout the life of the bond, floating rate bank loans feature interest rate payments that reset at particular intervals. Interest payments on floating rate bank loans typically are tied to a base rate, usually the London Interbank Offered Rate (LIBOR) or another short-term benchmark, plus a fixed spread determined by the issuer’s credit quality and certain market-based technical factors. The base rate adjusts periodically, usually at 30- to 90-day intervals. As such, the coupon payments on these bank loans “float” according to prevailing market interest rates. Many floating rate bank loans also contain a “LIBOR floor,” which offers investors additional income through yield at a stated percentage. For example, if LIBOR is currently at 0.25% and a loan has a coupon of LIBOR+2% and a LIBOR floor of 1.5%, the total yield for the loan would be the sum of the spread and the floor, or 3.5%. And, if the current LIBOR rate increases above the floor, the total yield of the loan will increase, too. This yield-reset feature may be particularly appealing in today’s market environment. Several years of sluggish economic growth and aggressive action by the Federal Reserve (the Fed) have left interest rates at historically low levels, as Exhibit 2 illustrates. But market conditions are changing. The accommodative Fed monetary policy eventually will end, and accompanied by inflationary pressures brought on by several stimulus programs and a strengthening U.S. economy, it would appear rates have nowhere to go but up. EXHIBIT 2: Fed Funds Rate, 10-Year and 30-Year Treasury Yields (as of 12/31/2012) 8 ■ Fed Funds Rate ■ 10-year Treasury Yields ■ 30-year Treasury Yields

Yields (%)

6

4

2

0

Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: FactSet pulled as of 3/11/2013

2. They hold their value when interest rates rise Rising interest rates can mean trouble for traditional fixed rate bonds due to the inverse relationship between interest rates and bond prices. That is, when market interest rates rise, prices on traditional bonds fall. The magnitude of the price decline is indicated by the bond’s duration, or price sensitivity to interest rate changes. Bonds with longer durations will experience greater price declines than bonds with shorter durations. But this interest rate risk does not affect floating rate bank loans, which generally will maintain their value whether interest rates rise, fall or remain constant. As interest rates rise, investor income rises, too, while the ultra-short duration of floating rate bank loans minimizes price depreciation. This ability to keep pace with interest rate changes historically has led to less-volatile performance than other fixed-income securities, as Exhibit 3 demonstrates.

Floating Rate bank loans: An Attractive Asset Class for Uncertain Markets

Page 3

EXHIBIT 3: Performance of Various Fixed4:Income Sectorsof During Previous RisingDuring InterestPrevious Rates (asPeriods of 2/28/2013) EXHIBIT Performance Various Fixed Periods Income of Sectors ■ Periods of Rising Interest Rates

■ CSFB Leveraged Loan ■ Barclays U.S. Corporate - High Yield ■ Barclays U.S. Credit ■ Barclays U.S. Government

12

8

Annualized Returns (%)

4

0

-4

-8

-12

-16 Jan 1992

Jan 1993

Jan 1994

Jan 1995

Jan 1996

Jan 1997

Jan Jan Jan Jan of Rising Interest 1998 1999 2000 Rates 2001

Jan 2002

Jan 2003

Jan 2004

Jan 2005

Jan 2006

Jan 2007

Jan 2008

Jan 2009

Jan 2010

Jan 2011

Jan 2012

Jan 2013

Source: FactSet pulled as of 3/11/2013

3. They are repaid first in the event of default

Floating rate bank loans generally will maintain their value whether interest rates rise, fall or remain constant. Leveraged loans typically have higher credit risk than investment-grade bonds, but to compensate for that risk, they generally offer higher yields and exclusive features.

Leveraged bank loans typically have higher credit risk than investment-grade bonds. But to compensate for that risk, they generally offer higher yields and exclusive features. Specifically, as Exhibit 4 illustrates, floating rate bank loans typically have seniority in the borrower’s capital structure. These loans generally take precedence over other debt claims (such as subordinated debt, unsecured debt, etc.) in the event the borrower defaults or declares bankruptcy. Specifically, floating rate bank loans are normally secured by select collateral or assets of the issuer, so holders of the loans will have a priority claim on those assets in the event the issuer defaults or declares bankruptcy. Nevertheless, the value of the collateral may be insufficient to meet the issuer’s obligations, and access to collateral may be limited by bankruptcy or other insolvency laws. Also, many floating rate bank loans include rules in the credit agreements, called covenants, which contain highly restrictive provisions preventing the companies from issuing additional debt if doing so would push financial ratios over certain predetermined levels. These covenants may help prevent default. EXHIBIT 5: Priority of Bank Loans Across the Capital Spectrum (as of 12/31/2012) Bank Loans

Senior-Secured Debt HIGHEST PRIORITY

Subordinated Debt

Unsecured Debt

Preferred Stock

CAPITAL SPECTRUM

Common Stock LOWEST PRIORITY

Source: RidgeWorth Investments pulled as of 3/14/2013

Furthermore, in the event of a default, floating rate bank loans historically have experienced higher recovery rates than high yield bonds, as illustrated in Exhibit 5. During the Great Recession, when many companies were defaulting on their debt obligations, the floating rate bank loan recovery rate was nearly double that of high yield bonds (62% vs. 34%). This higher recovery rate likely is due to the bank loans’ seniority in the borrower’s capital structure.

Floating Rate bank loans: An Attractive Asset Class for Uncertain Markets

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EXHIBIT 5: Recovery Rates of High Yield Bonds vs. Bank Loans (as of 12/31/2012) 100 90

■ Bank Loans ■ High Yield Bonds

Recovery Rate (%)

74

68

60 61 40

79

75

70 50

88

86

80

69

65

43

46

43

84

59

56

49 42

30

38

71

67

62 55

55

54

52 45

40

34 25

20

71

69

59

57

53 46

84

73

34

30

45

34

22

10 0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Moody’s pulled as of 3/14/2013

4. Performance patterns enhance portfolio diversification Adding floating rate bank loans to a portfolio of stocks and traditional bonds may improve diversification. Throughout the last 10 years, the performance of floating rate bank loans has been largely non-correlated with the performance of stocks and higher-quality and longer-duration bonds, as demonstrated in Exhibit 6. Therefore, diversifying with floating rate bank loans may help overall performance when other asset classes experience a downturn. At the same time, the distinctive yield and performance characteristics of floating rate bank loans may help enhance overall portfolio performance. EXHIBIT 6: Correlation of Various Asset Classes, 10 Years (as of 2/28/2013) Domestic Equity

International Equity

Bank Loans

High Yield Bonds

Corporate Bonds

Government Bonds

Domestic Equity (S&P 500)

1.00

0.90

0.61

0.73

0.30

-0.25

International Equity (MSCI EAFE - Net )

0.90

1.00

0.59

0.74

0.40

-0.21

Bank Loans (CSFB Leveraged Loan)

0.61

0.59

1.00

0.84

0.31

-0.40

High Yield Bonds (Barclays US Corporate - High Yield)

0.73

0.74

0.84

1.00

0.56

-0.18

Corporate Bonds (Barclays US Credit)

0.30

0.40

0.31

0.56

1.00

0.60

-0.25

-0.21

-0.40

-0.18

0.60

1.00

Government Bonds (Barclays US Government) Source: FactSet pulled as of 3/11/2013

What are the benefits of floating rate Bank loans? In summary, the distinct characteristics of floating rate bank loans compared with those of traditional bonds may allow these types of bank loans to deliver several benefits to diversified portfolios, including: n

n

n

n

Current income: Floating rate bank loans generally offer relatively high yields to compensate for their higher degree of credit risk. For many investors, this yield advantage may be particularly appealing in the current low interest rate environment. A defense against rising interest rates: With yields that reset according to prevailing benchmark rates, floating rate bank loans may offer a natural defense against rising interest rates. Unlike fixed rate bonds, income increases and price volatility typically remain subdued when market rates are rising. Favorable capital structure positioning: Floating rate bank loans typically maintain the senior-most position in the borrower’s capital structure. In the event of a default or bankruptcy, investors generally have first claim to the borrower’s assets. Because of this structure, floating rate bank loans typically realize high recovery rates. Enhanced diversification: With a low correlation to other fixed income asset classes, floating rate bank loans may offer diversification benefits in a well-rounded portfolio.

Floating Rate bank loans: An Attractive Asset Class for Uncertain Markets

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W h at a r e t h e r i s k s ? Of course, no asset class is without risk, and capturing higher performance potential often means taking on higher levels of risk. The risks of investing in floating rate bank loans include: n

n

Many people invest in floating rate bank loans via mutual funds. Floating rate funds can vary widely in terms of their risk/return and performance-potential profiles, and investors may wish to evaluate several crucial areas to determine if a particular investment manager meets their needs.

n

Liquidity risk: Given the specialized nature and limited trading of the floating rate bank loan asset class, the market has the potential to become illiquid. As such, investors may not be able to buy and sell securities at certain times and prices. Economic risk: The potential for recession also is a risk for the floating rate bank loan market. A recession would increase defaults within the sector, driving down the value of floating rate bank loans. Historically, floating rate bank loans have performed relatively well during economic downturns, as Exhibit 7 demonstrates, going back to the inception of the CSFB Leveraged Loan Index. As shown below, the sector suffered sharp losses in 2008, the beginning of the Great Recession, primarily due to excess leverage applied to the floating rate bank loan asset class during 2006 and 2007. When the financial crisis hit in the fall of 2008, fear and widespread selling drove down floating rate bank loan values to historic lows. The market quickly recovered, though, demonstrating the resiliency of the asset class, in this instance.

EXHIBIT 7: Performance of Bank Loans During Previous Recessions (as of 2/28/2013) 9 6

Annualized Returns (%)

In this current environment of slow economic growth, floating rate bank loans have the potential to deliver attractive performance potential.

Credit risk: Credit risk is the primary risk facing the floating rate bank loan asset class. Because these loans are issued to companies with below-investment-grade credit ratings, they have a higher likelihood of default than investment-grade companies. If the issuer defaults, investors potentially may lose their principal investment.

■ CSFB Leveraged Loan Index ■ NBER-Specified Recessions

3 0 -3 -6 -9 -12 -15

Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: FactSet pulled as of 3/11/2013 Recessions as specified by the National Bureau of Economic Research (NBER)

W h at i s t h e o u t lo o k f o r t h e f lo at i n g r at e B a n k lo a n m a r k e t i n 2013? In the current environment of slow economic growth, floating rate bank loans should continue to deliver attractive performance potential. Fundamentals generally appear solid, and demand from institutional and retail investors continues to increase, absorbing the market supply. The market is witnessing a transformation in which investors who have not invested in floating rate loans are making dedicated allocations to the asset class for the first time. One potential challenge for the asset class rests with the market value-based default rate, which may move higher during 2013. Certain large issuers must refinance their loans by the end of the year, or they may end up defaulting, pushing the market-based default rate higher. Nevertheless, Ridgeworth Investments believes the issuer-based default rate, which measures the number of companies that default, should remain at +/-2%, similar to last year’s rate.

Floating Rate bank loans: An Attractive Asset Class for Uncertain Markets

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What should investors look for in a floating rate Bank loan fund? Floating rate bank loan funds can vary widely in terms of their risk/return and performance-potential profiles, and investors may wish to evaluate several crucial areas to determine if a particular investment manager meets their needs: n

n

n

Tenure of the management team: Because floating rate bank loans represent a distinct asset class, selecting a fund manager with solid experience in bank loans may be helpful. In particular, investors may want to consider a manager with a strong track record of managing floating rate loan portfolios through various market cycles, including periods of rising and falling interest rates and economic expansions and recessions. No one knows what is in store for the financial markets, but examining a manager’s tenure may provide important insight into how the fund is managed and how it navigated the markets during previous periods of both rising and falling interest rates. A targeted investment universe: The below-investment-grade universe includes securities with varying degrees of risk. Therefore, it is important to understand which segment of the universe is represented in a particular fund and how the portfolio managers research and select securities within that universe. For example, some funds target the healthiest segment of the market, investing only in securities with BB and B credit ratings and large issue sizes, while others will consider the riskiest C-rated securities. Strict, risk-controlled investment process: The nature of below-investment-grade securities underscores the importance of selecting a fund with a stringent risk-management process. Investors may wish to consider a fund that seeks to manage risk by conducting thorough, in-depth independent research and constraining industry weights and individual positions while maintaining a defined sell discipline.

Co n c lu s i o n Floating rate bank loans may represent an important component of well-rounded portfolios. While their higher yields relative to traditional investment-grade fixed income securities may deliver benefits in many different market environments, their floating rates may be particularly appealing in light of today’s interest rate outlook. After several years of historically low interest rates, the next major move in interest rates likely will be upward. And unlike fixed rate bonds, as interest rates increase, floating rate bank loan yields will also increase, while their prices generally remain stable. Meanwhile, floating rate bank loans generally provide downside protection due to their higher positioning in the issuer’s capital structure. Floating rate bank loan funds managed by experienced professionals with a history of navigating various interest rate cycles and economic environments may offer an ideal way for investors to take advantage of this compelling market segment.

About RidgeWorth Investments RidgeWorth serves as a money management holding company with six style-specific institutional investment management boutiques, each with a well-defined, proven approach and all with unwavering commitments to exceptional performance. Through our multiple, style-specific boutiques, we offer a wide range of equity and fixed income investment disciplines. RidgeWorth Investments, an investment adviser registered with the SEC since 1985, is headquartered in Atlanta, Georgia.

Investment Risks Equity securities (stocks) may be more volatile and carry more risk than other forms of investments, including investments in high grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. International investing involves increased risk and volatility due to currency fluctuations, economic and political conditions, and differences in financial reporting standards. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. Generally, a Fund’s fixed income securities will decrease in value if interest rates rise and vice versa. Floating rate loans are typically senior and secured, in contrast to other below-investment-grade securities. However, there is no guarantee that the value of the collateral will not decline, causing a loan to be substantially unsecured. Loans generally are subject to restrictions on resale. Certain types of loans may limit the ability of the Fund to enforce its rights and may involve assuming additional credit risks. This information and general market-related projections are based on information available at the time, are subject to change without notice, are for informational purposes only, are not intended as individual or specific advice, may not represent the opinions of the entire firm, and may not be relied upon for individual investing purposes. Information provided is general and educational in nature, provided as general guidance on the subject covered, and is not intended to be authoritative. All information contained herein is believed to be correct, but accuracy cannot be guaranteed. This information may coincide or conflict with activities of the portfolio managers. It is not intended to be, and should not be construed as investment, legal, estate planning, or tax advice. RidgeWorth Investments does not provide legal, estate planning or tax advice. Investors are advised to consult with their investment processional about their specific financial needs and goals before making any investment decisions. Past performance is not indicative of future results.

Floating Rate bank loans: An Attractive Asset Class for Uncertain Markets

Page 7

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Glossary of Terms

Index Definitions

Below-Investment-Grade Securities: Fixed income securities that carry a rating of ‘BB’ or lower by Standard & Poor’s or ‘Ba’ or lower by Moody’s. These bonds have greater default risk than investment-grade bonds and typically offer higher yields to compensate for that risk. As such, they often are referred to as “high yield” bonds. Capital Structure: The organization of a company’s long- and shortterm debt, common equity and preferred equity. The capital structure outlines how a firm finances its overall operations and growth via different sources of funds. Collateral: Assets pledged by a borrower to secure a loan and subject to seizure if the borrower defaults. Correlation: How securities or assets classes move and perform in relation to each other. Coupon Rate: The stated interest rate on a debt security when it is issued. Credit Ratings: Standard & Poor’s rates securities from AAA (highest quality) to C (lowest quality) with BBB and above being called investment-grade securities. BB and below are considered belowinvestment-grade securities. Credit Risk: The risk that the issuer of a debt security will default on its commitment to pay interest and repay principal. Credit Spreads: The difference between the yields of sector types and/ or maturity ranges. Default Risk: The risk companies will be unable to make required payments on their debt obligations. Duration: The change in the value of a fixed income security that will result from a 1% change in interest rates. Duration is expressed as a number of years. The bigger the duration number, the greater the interest rate risk or reward for bond prices. Fed Funds Rate: The interest rate at which depository institutions actively trade balances held at the Federal Reserve, called federal funds, with each other, usually overnight, on an uncollateralized basis. Floating Rate Security/Senior Leveraged Bank Loan: A debt obligation issued by a bank to a borrower with a below-investmentgrade credit rating. The loan is generally considered senior to other claims against the borrower, which means if the borrower declares bankruptcy, the senior bank loan is generally repaid first, before other pre-petition creditors and stockholders. Interest Rate Risk: The risk that a bond’s price will fall when interest rates rise. Liquidity Risk: The risk an investment’s lack of marketability will prevent it from being bought or sold quickly enough to prevent or minimize a loss. London Interbank Offered Rate (LIBOR): The rate of interest at which banks offer to lend money to one another in the wholesale money markets in London. Recovery Rate: The amount received on a defaulted bond or loan in bankruptcy.

Credit Suisse Leveraged Loan Index is designed to mirror the investable universe of the $US-denominated leveraged loan market. Loan facilities must be rated “5B” or lower. That is, the highest Moody’s/ S&P ratings are Baa1/BB+ or Ba1/BBB+. If unrated, the initial spread level must be LIBOR plus 1.25% or higher. Only fully funded term loan facilities are included. The tenor must be at least one year. Issuers must be domiciled in developed countries; issuers from developing countries are excluded. Barclays U.S. Corporate High Yield Bond Index is an unmanaged market-value-weighted index that covers the universe of fixed rate, non-investment-grade debt. Barclays U.S. Credit Index is an unmanaged index that measures the performance of investment-grade corporate debt and agency bonds that are dollar denominated and have a remaining maturity of greater than one year. Barclays Government Bond Index is composed of the U.S. Treasury and U.S. Agency Indices. The U.S. Government Index includes Treasuries (public obligations of the U.S. Treasury that have remaining maturities of more than one year) and U.S. agency debentures (publicly issued debt of U.S. Government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. Government). The U.S. Government Index is a component of the U.S. Government/Credit Index and the U.S. Aggregate Index. Morgan Stanley Capital International Europe, Australasia and Far East (MSCI EAFE) Index is an unmanaged market-capitalizationweighted equity index comprising 20 of the 48 countries in the MSCI universe and representing the developed world outside of North America. Each MSCI country index is created separately then aggregated, without change, into regional MSCI indices. EAFE performance data is calculated in U.S. dollars and in local currency. Standard & Poor’s 500 Index is an unmanaged index of 500 selected common large capitalization stocks (most of which are listed on the New York Stock Exchange) that is often used as a measure of the U.S. stock market. Investers cannot invest directly in an index.

An investor should consider the fund’s investment objectives, risks, and charges and expenses carefully before investing or sending money. This and other important information about the RidgeWorth Funds can be found in the fund’s prospectus. To obtain a prospectus, please call 1-888-784-3863 or visit www.ridgeworth.com. Please read the prospectus carefully before investing. ©2013 RidgeWorth Investments. RidgeWorth Investments is the trade name for RidgeWorth Capital Management, Inc., an investment advisor registered with the SEC and the adviser to the RidgeWorth Funds. RidgeWorth Funds are distributed by RidgeWorth Distributors LLC, which is not affiliated with the adviser. Collective Strength Individual Insight is a federally registered service mark of RidgeWorth Investments. • Not FDIC Insured • No Bank Guarantee • May Lose Value

RFWP-FRHI-0813r