BEIIX OverviewInvestment Objective of the Brandes Institutional Enhanced Income Fund (the "Fund") (BEIIX) The Fund seeks to maximize total return, consisting of both current income and capital appreciation. Principal Investment Strategies of the Fund The Fund actively manages a diversified portfolio comprised approximately 70% of debt securities and 30% of equity securities. Its debt obligations include, but are not limited to, debt securities issued by U.S. and foreign companies, debt obligations issued or guaranteed by the U.S. Government and foreign governments and their agencies and instrumentalities, and U.S. and foreign mortgage-backed securities, collateralized mortgage obligations and asset-backed debt securities. Its equity securities include common and preferred stocks of U.S. and foreign companies and securities convertible into such stocks. Brandes Investment Partners, L.P. is the investment advisor to the Fund (the "Advisor"). The Advisor generally uses the principles of value investing to analyze and select debt securities for the Fund's investment portfolio. The Fund invests in debt securities that can be purchased at a price or yield premium over U.S. Treasury securities (or other risk-free securities) which the Advisor believes to be attractive based on the Advisor's assessment of each debt security's intrinsic value. The Advisor's assessment of intrinsic value is based upon an analysis of the issuers' ability to repay, the quality of the collateral (if any), liquidity, and other factors. The Advisor may also employ other types of analysis in assessing the attractiveness of a debt security, relying on present day pricing information, roll-down analysis, comparisons of a debt security's yield with yields offered by other debt securities of similar quality and average life, and scenario analysis. The Fund invests in both investment-grade debt securities and non-investment grade debt securities (also known as "high-yield bonds" or "junk bonds"). The Advisor deems any debt security rated at least BBB- (or its equivalent) by one or more of Moody's, Standard & Poor's, or Fitch, or any debt security that has been determined by the Advisor to be of comparable quality, to be investment grade. At least 75% of the Fund's total assets must be investment grade, measured at the time of purchase. Non-investment grade debt securities may be rated as low as D, may be in default of payment of principal and/or interest, or may not be rated. Although the Fund invests in debt securities of any maturity, under normal market conditions the Advisor seeks to maintain the duration of the Fund's portfolio within 10% (above or below) the duration of the Lehman Brothers U.S. Aggregate Index. The Fund’s equity investments are generally issued by U.S. and foreign companies whose market capitalizations (market value of publicly traded securities) rank in the top 250 companies worldwide. The Advisor generally uses the principles of value investing in selecting equity securities for the Fund's portfolio. Applying this philosophy, the Advisor views stocks as small pieces of businesses for sale. It seeks to purchase a diversified group of these businesses when they are undervalued -- at prices its research indicates are well below their true long-term, or intrinsic, values. By purchasing equity securities whose current prices it believes are considerably below their intrinsic values, the Advisor believes it can buy not only a possible margin-of-safety against price declines, but also an attractive opportunity for profit over the business cycle. The Fund's portfolio is not subject to any specific geographic diversification requirements. Countries in which the Fund may invest include the United States and the nations of Europe, North and South America, Australia, Africa and Asia. Generally no more than 10% of the value of the Fund's total equity assets, measured at the time of purchase, may be invested in equity securities of companies located in emerging securities markets throughout the world. The Fund may invest up to 25% of its total fixed income assets measured at the time of purchase in non-U.S. dollar securities, and may engage in currency hedging. The Fund may use derivative instruments, such as options contracts, futures contracts and swap agreements, for risk management purposes or otherwise as part of its investment strategies. Principal Risks of Investing in the Fund Because the values of the Fund's investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The income on and values of the Fund's fixed income investments will fluctuate along with interest rates. When interest rates rise, the market prices of the debt securities the Fund owns usually decline. When interest rates fall, the prices of these securities usually increase. Generally, the longer the average portfolio maturity of the Fund's fixed income portfolio and the lower the average quality of its portfolio, the greater the price fluctuation. The price of any fixed income security owned by the Fund may also fall in response to events affecting the issuer of the security, such as its ability to continue to make principal and interest payments or its credit rating. Below investment grade debt securities are speculative and involve a greater risk of default and price change due to changes in the issuer's creditworthiness. The market prices of these debt securities may fluctuate more than the market prices of investment grade debt securities and may decline significantly in periods of general economic difficulty. The values of the Fund's equity investments will fluctuate in response to the activities of individual companies and general stock market and economic conditions. The values of the Fund's convertible securities are also affected by interest rates; if rates rise, the values of convertible securities may fall. Investing in foreign securities poses additional risks. The performance of foreign securities can be adversely affected by the different political, regulatory and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies may experience substantial fluctuations or steady devaluation relative to the U.S. dollar. The Fund's use of derivative instruments, such as options contracts, futures contracts or swap agreements, involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other more traditional investments. Investments in Asset-Backed and Mortgage-Backed Securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. Please see the Definitions page for an explanation between rating risks. Fees and Expenses The Funds have three classes of shares – Class I shares for institutional investors, Class E shares which pay service fees to intermediaries providing non-distribution services to their clients who own shares of the Funds, and Class S shares which pay intermediaries fees for providing distribution and non-distribution services to their clients who own shares of the Funds. Class S shares are not currently being sold. As an investor in a Fund, you will pay the following fees and expenses based on an estimate of the Fund's first fiscal period. Annual Fund operating expenses are paid out of Fund assets and are reflected in its share price. If you purchase shares though a bank, broker or other investment representative, they may charge you an account-level fee for additional services provided to you in connection with your investment in the Fund. This table describes the fees and expenses that you may pay if you buy and hold shares of the Enhanced Income Fund.
1 The Advisor has contractually agreed with Brandes Investment Trust to limit each Fund's Class I, Class E and Class S annual operating expenses, including repayment of previous waivers, to the following percentages of the Fund's average daily net assets attributable to such Classes through the Fund's fiscal year ended January 30, 2010: Enhanced Income Fund – 0.55%, 0.75%, and 0.75%, respectively. Please refer to the Prospectus for important information about the investment company including investment objectives, risks, charges and expenses. To obtain a hard copy Prospectus, please call the Mutual Fund Group at 800.395.3807. The Brandes Funds are distributed by Quasar Distributors, LLC. |
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