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.
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.