Waddell & Reed

Fund Detail

Waddell & Reed Advisors Continental Income Fund
Class A Shares

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Fund Facts
Ticker Symbol UNCIX
CUSIP 930057757
Fund Code 627
Fund Type Specialty Funds
Fund Inception 6/9/1970
Class Inception 6/9/1970
Fiscal Year End June
Dividends Paid March, June, September, December
Fund Assets (as of 12/31/2017) $1.4 bil
Total Equity Holdings (as of 12/31/2017) 52
Total Holdings (as of 12/31/2017) 222
Portfolio Turnover Rate (as of 6/30/2017) 52%
Lipper Category Mixed-Asset Target Alloc Growth Funds
Morningstar Category Allocation--50% to 70% Equity
Benchmarks S&P 500 TR USD
Bloomberg Barclays US Govt/Credit TR USD
Daily Prices
as of 1/22/2018
Net Asset Value (NAV) $10.10
NAV Change ($) $0.06
NAV Change (%) 0.60%
Weekly NAV Change ($) $0.13
Weekly NAV Change (%) 1.30%
Public Offering Price (POP) $10.72
Historical Prices & Distributions
Please select a date
Fund Description

Balancing potential risk and reward in a complex world


Straightforward approach
A traditional balanced fund with predictable guardrails that generally invests two-thirds of its assets in U.S. equities and one-third of its assets in fixed-income securities.
Management discipline
Uses fundamental analysis and rigorous screening of stocks and bonds to determine portfolio composition.
Competitive track record
Seeks balanced, consistent growth and current income while managing risk. Manager utilizes a disciplined investment process that is designed to deliver consistent results.
Morningstar Style Box
Source: Morningstar
Returns and Expenses

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Performance at NAV does not include the effect of sales charges, if it had, performance shown would be lower. Class A shares, including sales charges, reflects the maximum applicable front-end sales load.

Monthly Rates of Return
(Returns for periods of less than 1-yr are not annualized)
Average Annual Total Returns
as of 12/31/2017
  YTD 1yr 3yr 5yr 10yr Life
Fund at NAV 11.39% 11.39% 4.20% 8.41% 6.36% 9.22%
Fund with 5.75% sales charge 5.01% 5.01% 2.16% 7.15% 5.73% 9.08%
S&P 500 TR USD 21.83% 21.83% 11.41% 15.79% 8.50% N/A
Bloomberg Barclays US Govt/Credit TR USD 4.00% 4.00% 2.38% 2.13% 4.08% N/A
Lipper Mixed-Asset Target Alloc Growth Funds 15.70% 15.70% 6.81% 9.19% 5.44% 9.22%
Quarterly Rates of Return
(Returns for periods of less than 1-yr are not annualized)
Average Annual Total Returns
as of 12/31/2017
  YTD 1yr 3yr 5yr 10yr Life
Fund at NAV 11.39% 11.39% 4.20% 8.41% 6.36% 9.22%
Fund with 5.75% sales charge 5.01% 5.01% 2.16% 7.15% 5.73% 9.08%
S&P 500 TR USD 21.83% 21.83% 11.41% 15.79% 8.50% N/A
Bloomberg Barclays US Govt/Credit TR USD 4.00% 4.00% 2.38% 2.13% 4.08% N/A
Lipper Mixed-Asset Target Alloc Growth Funds 15.70% 15.70% 6.81% 9.19% 5.44% 9.22%
Expense Ratios
as of 10/31/2017
Net 1.12%
Gross 1.14%
12-Month Trailing Distribution Yield
as of 12/31/2017
NAV 1.85%
With sales charge 1.75%
Annualized 30-Day SEC Yield
as of 12/31/2017
Subsidized 0.89%
Unsubsidized 0.88%
Growth of a $10,000 Investment
through 12/31/2017
 Continental Income A
 S&P 500 TR USD
 Bloomberg Barclays US Govt/Credit TR USD

Assumes an investment over 10 years or life of the share class, reinvestment of dividends and capital gains, and does not include the effect of sales charges or taxes.

Ratings and Rankings
Lipper Rankings
as of 12/31/2017
Category: Mixed-Asset Target Alloc Growth Funds
  Rank Percentile
1 Year 448 / 495 91
3 Year 423 / 445 95
5 Year 321 / 421 77
10 Year 68 / 311 22

Rankings are based on average annual total returns, but do not consider sales charges.

Morningstar Ratings
as of 12/31/2017
Category: Allocation--50% to 70% Equity
Overall (out of 718 Allocation--50% to 70% Equity)
3 Year (out of 718 Allocation--50% to 70% Equity)
5 Year (out of 670 Allocation--50% to 70% Equity)
10 Year (out of 477 Allocation--50% to 70% Equity)

Ratings are based on risk-adjusted returns.

Holdings
Portfolio Composition
(as a % of net assets as of 12/31/2017)
Domestic Common Stock 62.73%
Corporate Bonds 24.25%
Government Bonds 6.88%
Preferred Stock 3.60%
Foreign Common Stock 1.06%
Cash and Cash Equivalents 0.94%
Senior Loans 0.32%
Asset-Backed Securities 0.22%
Sector Allocation
(as a % of equity holdings as of 12/31/2017)
Information Technology 20.9%
Consumer Discretionary 17.2%
Financials 16.9%
Industrials 15.4%
Health Care 13.7%
Energy 7.5%
Materials 6.8%
Consumer Staples 1.6%
Equity Country Allocation
(as a % of equity holdings as of 12/31/2017)
United States 98.4%
Belgium 1.6%
Fixed Income Country Allocation
(as a % of bond holdings as of 12/31/2017)
United States 84.2%
United Kingdom 5.8%
Ireland 1.9%
Japan 1.8%
France 1.3%
Australia 1.2%
Singapore 0.9%
Netherlands 0.7%
Canada 0.7%
Guernsey 0.6%
Sweden 0.5%
Hong Kong 0.4%
Norway 0.2%
Top 10 Equity Holdings
(as a % of net assets as of 12/31/2017)
Autodesk, Inc. supplies PC software and multimedia tools. The company's two-dimensional and three-dimensional products are used across industries and in the home for architectural design, mechanical design, geographic information systems and mapping, and visualization applications. Autodesk's software products are sold worldwide through a network of dealers and distributors.Autodesk, Inc. 2.33%
Union Pacific Corporation owns the largest railroad in the U.S. It's diversified business mix includes agricultural products, automotive, chemicals, energy, industrial products and intermodal.Union Pacific Corp. 2.06%
JPMorgan Chase & Co. (JPMorgan Chase) is a financial holding company.JPMorgan Chase & Co. 2.03%
Carnival Corporation operates as a cruise and vacation company.Carnival Corp. 2.02%
The Company has businesses engaged in retail banking, corporate and institutional banking, asset management, and residential mortgage banking, providing its products and services nationally and others in its markets located in Pennsylvania, Virginia, Missouri, Wisconsin and Georgia. It also provides products and services internationally. PNC Financial Services Group, Inc. (The) 2.02%
Microsoft Corporation is a multinational computer technology corporation that develops, manufactures, licenses and supports a wide range of software products for computing devices.Microsoft Corp. 1.97%
Intel Corporation is a semiconductor chip maker, developing advanced integrated digital technology products, primarily integrated circuits, for industries, such as computing and communications.Intel Corp. 1.97%
Las Vegas Sands Corp. (LVSC), a global developer of destination properties (integrated resorts), features accommodations, gaming, entertainment, retail, convention and exhibition facilities, celebrity chef restaurant, etc. The company operates in 3 geographic areas: Macao, Singapore, United States.Las Vegas Sands, Inc. 1.96%
Twenty-First Century Fox, Inc. 1.95%
UnitedHealth Group is a diversified health and well-being company offering a spectrum of products and services serving consumers, employers, physicians, providers, hospitals and other caregivers.UnitedHealth Group, Inc. 1.87%
Total Portfolio Holdings
(updated quarterly, upon availability)

View | Download (as of 9/30/2017)
Quality
(as a % of bond holdings as of 12/31/2017)
Government Bonds 21.7 %
AAA 0.9 %
AA 4.3 %
A 12.2 %
BBB 50.0 %
BB 6.4 %
B 2.6 %
CCC 1.9 %

Quality: Ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.

Maturity
(as a % of bond holdings as of 12/31/2017)
<1 Year 9.2 %
1-5 Years 34.3 %
5-10 Years 43.8 %
10-20 Years 2.4 %
>20 Years 10.2 %
Average Maturity 7.41 years
Effective Duration 5.67 years

Average maturity and effective duration include bonds, cash and cash equivalents.

Top 10 Industry Allocation
(as a % of equity holdings as of 12/31/2017)
Semiconductors 6.1%
Specialty Chemicals 4.3%
Pharmaceuticals 4.1%
Managed Health Care 4.0%
Diversified Banks 3.9%
Integrated Oil & Gas 3.8%
Application Software 3.5%
Aerospace & Defense 3.3%
Biotechnology 3.3%
Railroads 3.1%
Portfolio Management
Manager Name Company Name Years in Industry Years with Fund
Matthew Hekman is co-portfolio manager of Ivy Balanced Fund, Ivy VIP Balanced and Waddell & Reed Advisors Continental Income Fund. He was named portfolio manager of the funds in 2014 and assumed co-portfolio manager responsibilities in 2017. Mr. Hekman joined Waddell & Reed in 2003 as a performance analyst. He joined the firm's Investment Management Division as an equity investment analyst in 2005. He was a member of the Large Cap Growth team from 2009 to 2011, named assistant portfolio manager in 2010. He was assistant portfolio manager on the Large Cap Value team from 2011 to 2014. He was appointed assistant vice president in 2010 and vice president in 2014. Prior to joining Waddell & Reed, Mr. Hekman was a manager of custody administration and investment accounting with State Street Corporation. He was responsible for five client relationships as well as eight staff members. He oversaw and approved all custody and accounting activities for 26 mutual funds culminating in the submission of a NAV to NASDAQ. In that role, Mr. Hekman acted as a liaison between custody administration, accounting, and investment management personnel. Mr. Hekman graduated from Dordt College in 1998 with a BA in Business Administration. He earned an MBA with an emphasis in Finance from the University of Kansas in 2003. Mr. Hekman is a member of the CFA Society of Kansas City.Matthew A. Hekman Waddell & Reed Investment Management Company 19 3
Rick Perry is portfolio manager of Ivy VIP Bond, Ivy Bond Fund and Ivy Government Securities Fund, managing the funds since 2015. He is portfolio manager of Ivy Crossover Credit Fund since its inception in 2017. He was named co-portfolio manager in 2017 of Ivy Balanced Fund, Ivy VIP Balanced and Waddell & Reed Advisors Continental Income Fund. Mr. Perry joined Waddell & Reed in 2015 as senior vice president and portfolio manager. Prior to joining Waddell & Reed, Mr. Perry was a portfolio manager with Aegon USA Investment Management, where he was head of investment grade credit since 2006. He joined Aegon in 2001 as a high-yield portfolio manager and added the title of director of credit research in 2002. Prior to joining Aegon, Mr. Perry was a high-yield portfolio manager with ING Investment Management and an associate portfolio manager with Equitable Investment Services. He began his career as a Certified Public Accountant with McGladrey & Pullen CPA's. Mr. Perry graduated magna cum laude in 1989 with a BA in Accounting and Business Management from Central College in Pella, Iowa. He earned an MBA with a concentration in Investments, graduating magna cum laude from the University of Iowa in 1992. He earned the Chartered Financial Analyst (CFA) designation in 1998; and the Certified Public Accountant (CPA) designation in 1991. Mr. Perry is a CFA charterholder. He is a member of the CFA Institute.Rick Perry, CFA , CPA Waddell & Reed Investment Management Company 25 <1

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Risk Factors: The value of the Fund's shares will change, and you could lose money on your investment. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. These and other risks are more fully described in the fund's prospectus. Not all funds or fund classes may be offered at all broker/ dealers.

Pricing: All prices and year-to-date returns are based on closing quotes unless noted, as supplied to the NASDAQ by 6:00 p.m. Eastern time. YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

Index Description: S&P 500 - An unmanaged index of common stocks. It is not possible to invest directly in an index.

Index Description: Bloomberg Barclays US Govt/Credit TR USD - The Barclays U.S. Government/Credit Index measures the performance of U.S. dollar-denominated United States Treasuries, government-related, and investment-grade U.S. corporate securities that have a remaining maturity of greater than or equal to one year. In addition, the securities have $250 million or more of outstanding face value and are fixed-rate and non-convertible securities. It is not possible to invest directly in an index.

Performance results for some funds may include the effect of expense reduction arrangements. If those arrangements had not been in place, the performance results would have been lower.

Fee Waiver and/or Expense Reimbursement: Through October 31, 2017, Waddell & Reed Investment Management Company (WRIMCO), the Fund’s investment manager, Waddell & Reed, Inc. (Waddell & Reed), the Fund’s distributor, and / or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Fund’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and / or shareholder servicing fees to cap the total annual ordinary fund operating expenses as follows: Class A shares at 1.12%, Class B shares at 2.29%, Class C shares at 2.01%, Class Y at 0.88%. Prior to that date, the expense limitation may not be terminated by WRIMCO, Waddell & Reed, WISC or the Board of Trustees.

Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers. The adviser and its affiliates have or may voluntarily waive a portion of their fees (including, but not limited to, distribution and service (12b-1) fees) and reimburse certain expenses. There is no guarantee that the fund will avoid a negative yield. Such undertaking may be amended or withdrawn at any time.

30-Day SEC Yield: is calculated based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30 day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.

12-Month Trailing Distribution Yield: at NAV refers to the 12-month historical cash flow paid over the past 12 months in dividends, divided by the past months ending NAV.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance, and does not include the effects of sales charges. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Information is subject to change and is not intended to represent any past or future investment recommendations.

Quality: Ratings obtained from Standard & Poor's. For securities not rated by Standard & Poor's, ratings are obtained from Moody's. We do not evaluate these ratings, but simply assign them to the appropriate credit quality category as determined by the rating agency.

Style Analysis: The Morningstar Style Box reveals a fund's investment style. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth). For fixed-income funds, the vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by the following Nationally Recognized Statistical Rating Organizations (NRSROs): Moody's, Standard & Poor's, Fitch, and Egan-Jones. If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. For example, if NRSRO X rates a security AA-, NRSRO Y rates the same security an A and NRSRO Z rates it a BBB+, the fund company should use the credit rating of 'A' in its reporting to Morningstar. PLEASE NOTE: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO rating on a fixed-income security can change from time-to-time. For credit quality, Morningstar combines the credit rating information provided by the fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of "low", "medium", or "high" based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than "BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; and high are those with a weighted-average credit quality of "AA-" or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar's analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund's interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI's average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive. For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases static breakpoints are utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In addition, for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greater than 6 years.

Please remember that an investment in a mutual fund involves risk. Investment return and principal value of a mutual fund investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

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