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Mark Simendstad
Chief Investment Strategist

FUND COMMENTARY

Thrivent Multidimensional Income Fund looks beyond bonds for higher yields

11/24/2020
By John Doe, Author | 06/10/2020

In this era of historically low interest rates, the Thrivent Multidimensional Income Fund (TMLDX) seeks to bolster returns for income investors through a portfolio comprised of traditional and non-traditional income-producing securities.

While income is the primary focus, the Fund may also experience some capital appreciation over time. However, it may also face the possibility of declining asset value due to risks associated with the overall market, certain asset classes, certain investment styles, specific issuers, or incorrect assessments of investments by its investment adviser.

About 30% of the Fund’s assets are invested in high yield corporate bonds. In addition, the Fund holds positions in a variety of other income-producing securities, including U.S. treasuries, emerging market bonds and a broad variety of other sectors and asset classes.

We also look for flexible income-oriented securities that offer the potential for increased yields and diversification as compared to corporate bonds. That includes preferred stocks, master limited partnerships, convertible bonds, business development companies, and closed-end funds that are trading at a discount to net asset value.

The Fund invests a portion of assets in real estate investment trusts and dividend-paying stocks, as well as companies that operate cash flow-generating assets, such as pipelines, toll roads and seaports.

Yield flexibility

One advantage of many non-traditional income investments is that they may adjust their income payouts as economic or market conditions change. For instance, as market interest rates increase, these investments may be able to increase their yield to remain competitive. However, in a declining interest rate environment, these investments may reduce their yield.

By contrast, traditional fixed-income investments, such as bonds, cannot raise their coupon payment once the security is issued. While market yields and prices on existing bonds may change as market yields fluctuate, that would not affect the pay-out to the current bondholder. The market price of traditional bonds generally falls as interest rates rise and it increases as interest rates fall.

Thrivent Multidimensional Income Fund may be appropriate for investors who:

  • Seek a high level of income
  • Have a medium- to-long-term time horizon and a moderate risk tolerance
  • Are able to withstand the volatility of high yielding securities in pursuit of high current income.

The Fund may also be appropriate for investors who want to diversify their core fixed income holdings and reduce the sensitivity of their bond portfolio to changes in interest rates. The asset classes typically represented in the Fund may be viewed as a complement to a core fixed income portfolio because of their expected low correlation to investment grade bonds.

For additional information on fund holdings, performance, expenses, and more, please visit the Thrivent Multidimensional Income Fund page.


The Fund allocates its assets across multiple income and growth producing asset classes and strategies. The Fund is also subject to volatility risk, or the risk that the value of the Fund’s shares may fluctuate significantly in the short term. Credit risk is the risk that an issuer of a debt security may not pay its debt, and high yield securities are subject to increased credit risk as well as liquidity risk. Leveraged loans, closed-end funds, BDCs, MLPs, REITs, preferred securities, convertible securities, sovereign debt, and mortgage-related and other asset-backed securities are subject to additional risks. The Fund may engage in active and frequent trading of portfolio securities in implementing its principal investment strategies, which may result in higher transaction costs and higher taxes. These and other risks are described in the Fund's prospectus.

All information and representations herein are as of 11/24/2020, unless otherwise noted.

The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Thrivent Asset Management, LLC associates. Actual investment decisions made by Thrivent Asset Management, LLC will not necessarily reflect the views expressed. This information should not be considered investment advice or a recommendation of any particular security, strategy or product. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon, and risk tolerance.

Related Reading

11/24/2020

Opportunities in the high yield bond market

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In a year when bond yields have fallen dramatically after the Federal Reserve (Fed) cut the Fed funds rate to a range of 0 – 0.25% – the lowest rate in U.S. history – high yield bonds still offer some relatively attractive rates for investors.

In a year when bond yields have fallen dramatically after the Federal Reserve (Fed) cut the Fed funds rate to a range of 0 – 0.25% – the lowest rate in U.S. history – high yield bonds still offer some relatively attractive rates for investors.

11/24/2020

10/20/2020

Thrivent Limited Maturity Bond Fund seeks higher yields with lower risk

Thrivent Limited Maturity Bond Fund seeks higher yields with lower risk

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Investors seeking income have had some limited choices in recent years, with bond rates at historically low levels. But for investors in search of income, the Thrivent Limited Maturity Bond Fund (THLIX) may be an intriguing option.

Investors seeking income have had some limited choices in recent years, with bond rates at historically low levels. But for investors in search of income, the Thrivent Limited Maturity Bond Fund (THLIX) may be an intriguing option.

10/20/2020

08/25/2020

Helping your clients with this alternative to money market funds

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In this era of historically low interest rates, most money market funds offer no yield to investors. Yet money market funds have traditionally been a popular place for investors to park their assets before moving them into stock or bond investments.

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08/25/2020

08/04/2020

Remembering Darren Bagwell

Remembering Darren Bagwell

Remembering Darren Bagwell

Darren Bagwell, the Thrivent Chief Equity Strategist, recently passed away after battling a long-term medical condition. Darren was respected as a daring investment professional who pushed us all to deliver the best possible returns for our investors. Even as his illness persisted over the past few months, he elected the most aggressive treatment course. He refused to give up or give in.

Darren Bagwell, the Thrivent Chief Equity Strategist, recently passed away after battling a long-term medical condition. Darren was respected as a daring investment professional who pushed us all to deliver the best possible returns for our investors. Even as his illness persisted over the past few months, he elected the most aggressive treatment course. He refused to give up or give in.

08/04/2020