Payden & Rygel Investment Group

485BPOS 1 d111157d485bpos.htm PAYDEN & RYGEL INVESTMENT GROUP Payden & Rygel Investment Group

As filed with the Securities and Exchange Commission on February 29, 2016

Securities Act File No. 33-46973

Investment Company Act File No. 811-6625

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

Registration Statement

Under


		*the Securities Act of 1933*		þ
		Pre-Effective Amendment No.		¨
		Post-Effective Amendment No. 97		þ

and

Registration Statement

Under

the Investment Company Act of 1940


		Amendment No. 98		þ

THE PAYDEN & RYGEL INVESTMENT GROUP

(formerly P & R Investment Trust)

(Exact Name of Registrant as Specified in Charter)

333 South Grand Avenue, 32nd Floor

Los Angeles, California 90071

(Address of Principal Executive Offices)

(213) 625-1900

(Registrant’s Telephone Number, Including Area Code)

Edward S. Garlock, Esq.

333 South Grand Avenue, 32nd Floor

Los Angeles, California 90071

(213) 625-1900

(Name and Address of Agent for Service)

Copy to:

Arthur L. Zwickel, Esq.

Paul Hastings LLP

515 S. Flower St., Los Angeles, California 90071

Approximate Date of Proposed Public Offering:

As soon as practicable following effective date.

It is proposed that this filing will become effective:

Immediately upon filing pursuant to paragraph (b)

On (date) pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a)(1)

On (date) pursuant to paragraph (a)(1)

75 days after filing pursuant to paragraph (a)(2)

On (date) pursuant to paragraph (a)(2), of Rule 485.

This post-effective amendment designates a new effective Date for a previously filed post-effective amendment.

Title of Securities being registered: Shares of Beneficial Interest

LOGO

PROSPECTUS

FEBRUARY 29, 2016

» MONEY MARKET FUND

Payden Cash Reserves Money Market Fund (Investor Class — Ticker Symbol PBHXX)

» U.S. BOND FUNDS

Payden Limited Maturity Fund (Investor Class — Ticker Symbol PYLMX)

Payden Low Duration Fund (Investor Class — Ticker Symbol PYSBX)

Payden U.S. Government Fund (Investor Class — Ticker Symbol PYUSX)

Payden GNMA Fund (Investor Class — Ticker Symbol PYGNX)

Payden Core Bond Fund (Investor Class — Ticker Symbol PYCBX)

Payden Strategic Income Fund (Investor Class — Ticker Symbol PYSGX)

Payden Absolute Return Bond Fund (Investor Class — Ticker Symbol PYARX)

Payden Corporate Bond Fund (Investor Class — Ticker Symbol PYACX)

Payden High Income Fund (Investor Class — Ticker Symbol PYHRX)

» U.S. LOAN FUND

Payden Floating Rate Fund (Investor Class — Ticker Symbol PYFRX)

» TAX EXEMPT BOND FUND

Payden California Municipal Income Fund (Investor Class — Ticker Symbol PYCRX)

» GLOBAL BOND FUNDS

Payden Global Low Duration Fund (Investor Class — Ticker Symbol PYGSX)

Payden Global Fixed Income Fund (Investor Class — Ticker Symbol PYGFX)

Payden Emerging Markets Bond Fund (Investor Class — Ticker Symbol PYEMX)

Payden Emerging Markets Local Bond Fund (Investor Class — Ticker Symbol PYELX)

Payden Emerging Markets Corporate Bond Fund (Investor Class — Ticker Symbol PYCEX)

» U.S. EQUITY FUND

Payden Equity Income Fund (Investor Class — Ticker Symbol PYVLX)

The U.S. Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

LOGO

table of contents



» Fund Summaries		4
› MONEY MARKET FUND
Payden Cash Reserves Money Market Fund		4

› U.S. BOND FUNDS
Payden Limited Maturity Fund		6
Payden Low Duration Fund		10
Payden U.S. Government Fund		14
Payden GNMA Fund		17
Payden Core Bond Fund		21
Payden Strategic Income Fund		25
Payden Absolute Return Bond Fund		29
Payden Corporate Bond Fund		34
Payden High Income Fund		38

› U.S. LOAN FUND
Payden Floating Rate Fund		42

› TAX EXEMPT BOND FUND
Payden California Municipal Income Fund		47

› GLOBAL BOND FUNDS
Payden Global Low Duration Fund		50
Payden Global Fixed Income Fund		55
Payden Emerging Markets Bond Fund		59
Payden Emerging Markets Local Bond Fund		63
Payden Emerging Markets Corporate Bond Fund		67

› U.S. EQUITY FUND
Payden Equity Income Fund		71

» More About Investment Strategies, Related Risks and Disclosure of Portfolio Holdings		74

» Management of the Funds		79

» Shareholder Information		81
Pricing of Fund Shares: Net Asset Value		81
How to Purchase Shares		82
How to Redeem Shares		85
Cost Basis Reporting		85
Market Timing Activities		86
Dividends and Distributions		86
Tax Information		86
General Information		87

Appendix A: Description of Ratings		88
Appendix B: Privacy Notice		92
Appendix C: Financial Highlights		93


4		FUND SUMMARIES – MONEY MARKET FUND		Payden Mutual Funds

PAYDEN CASH RESERVES MONEY MARKET FUND

INVESTMENT OBJECTIVE:

The Fund seeks to provide investors with liquidity, a stable share price, and as high a level of current income as is consistent with preservation of principal and liquidity.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.15	%
Other Expenses	0.24	%
Total Annual Fund Operating Expenses	0.39	%
Fee Waiver or Expense Reimbursement¹	0.14	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.25	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.25%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (taking into account the contractual fee waiver or expense reimbursement for the first year). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$26	$	111	$	205	$	479

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests at least 99.5% of its total assets in cash, Government Securities, and repurchase agreements collateralized by cash or Government Securities. “Government Securities” generally means any security issued or guaranteed as to principal or interest by the U.S. Government or certain of its agencies or instrumentalities; or any certificate of deposit for any of the foregoing.

The Fund intends to be a “government money market fund,” as defined by Rule 2a-7 under the Investment Company Act of 1940, as amended, that seeks to maintain a stable price of $1.00 per share by using the amortized cost method to value portfolio securities and rounding the share value to the nearest cent. The Fund does not currently intend to impose liquidity fees or redemption gates on Fund redemptions; however, the Fund’s Board of Trustees may reserve the ability to subject the Fund to a liquidity fee and/or redemption gate in the future, after providing prior notice to Fund shareholders.

The Fund maintains a dollar-weighted average portfolio maturity of 60 days or less, and a dollar-weighted average portfolio life (portfolio maturity measured without reference to any maturity shortening provisions of adjustable rate securities by reference to their interest rate reset date) of 120 days or less. In addition, the Fund only purchases securities that mature within 397 days of the date of purchase (with certain exemptions permitted by applicable regulations).

PRINCIPAL INVESTMENT RISKS:

You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

The primary risks of the debt securities in which the Fund invests are interest rate risk and credit risk.

Interest Rates. Interest rate risk is the risk that the value of the Fund’s debt securities will fluctuate with changes in interest rates. For example, a decline in short-term interest rates would lower the Fund’s yield and the return on your investment.

Credit Risk. Credit risk is the risk that the issuer of a debt security will be unable to make interest or principal payments on time and the related risk that the value of a debt security may decline because of concerns about the issuer’s ability or willingness to make such payments. Generally, credit risk is often higher for bank, corporate, mortgage-backed, asset-backed and foreign government debt securities than for Government securities.


Prospectus		FUND SUMMARIES – MONEY MARKET FUND		5

PAYDEN CASH RESERVES MONEY MARKET FUND (continued)

Low Yields. Recently, money market funds have experienced historically low yields on securities they can hold. Therefore, it is possible that the Fund may not be able to maintain a positive yield. In addition, inflation may outpace and diminish investment returns over time.

Repurchase Agreement Risk. If the seller of a repurchase agreement defaults or otherwise does not fulfill its obligations, the Fund may incur delays and losses arising from selling the underlying securities, enforcing its rights, or declining collateral value.

Government Securities Risk. Obligations of U.S. Government agencies and authorities receive varying levels of support and may not be backed by the full faith and credit of the U.S. Government, which could affect the Fund’s ability to recover should they default. No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

No Government Guarantee. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

PAST FUND PERFORMANCE:

The information in the bar chart and table below provides some indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual returns over time compare with those of a broad measure of market performance, the Lipper Government Money Market Average.

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 4thQ 2006 (1.29%), and the worst quarter was 1stQ 2010 (0.00%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Cash Reserves Money Market Fund		0.01	%		0.01	%		1.25	%

Lipper Government Money Market Average		0.01	%		0.01	%		1.04	%

Call 1-800-572-9336 between 8:00 a.m. and 5:00 p.m. (Pacific Time) for the Fund’s current 7-day yield.

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	5,000	$	250

Tax-Sheltered	$	2,000	$	250

Electronic Investment

Set schedule	$	2,000	$	250

No set schedule	$	5,000	$	250

Automatic Exchange		NA	$	250

You may redeem shares by contacting the Fund in writing, at Payden Mutual Funds, P.O. Box 1611, Milwaukee, WI 53201-1611, by calling 1-800-572-9336, via the Fund’s Internet site at payden.com, or through a financial intermediary. Purchases and redemptions by telephone are only permitted if you previously established these options on your account.


6		FUND SUMMARIES – MONEY MARKET FUND		Payden Mutual Funds

PAYDEN CASH RESERVES MONEY MARKET FUND (continued)

TAX INFORMATION:

The Fund’s distributions are taxable, and will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Tax-deferred amounts may be subject to tax later.

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Internet site for more information.

U.S. BOND FUNDS

PAYDEN LIMITED MATURITY FUND

INVESTMENT OBJECTIVE:

The Fund seeks a total return that, over time, is greater than returns of money market funds and is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.28	%
Other Expenses	0.29	%
Total Annual Fund Operating Expenses	0.57	%
Fee Waiver or Expense Reimbursement¹	0.32	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.25	%


1 Year	3 Years		5 Years		10 Years
$26	$	150	$	286	$	683

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 39% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		7

PAYDEN LIMITED MATURITY FUND (continued)

by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; and (5) convertible bonds and preferred stock.

The Fund invests at least 90% of its total assets in investment grade debt securities, but may invest up to 10% of its total assets in debt securities rated below investment grade (commonly called “junk bonds”). The overall average credit quality of the Fund will remain investment grade. Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

The Fund invests in debt securities of any maturity, although under normal market conditions the Fund’s maximum average portfolio maturity (on a dollar-weighted basis) is two and one-half years. Maturity is the date when each bond or other debt security pays back its principal.

To gain exposure to various markets consistent with the investment strategies of the Fund, the Fund may invest in exchange-traded funds (“ETFs”) and other investment companies, including for example, other open-end or closed-end investment companies, and including investment companies for which the Adviser provides investment management services (affiliated funds).

The Fund may invest in many different types of derivatives, such as futures, forwards, swaps and options. These positions may be used for the purposes of either hedging current exposure in the portfolio or to obtain exposure to various market sectors. Currency positions may be employed for the purposes of hedging non-dollar denominated bonds or to take an active position in a currency, both long or short.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Depending on the circumstances, there is always the risk that you could lose all or a portion of your investment in the Fund. The following risks could also affect the value of your investment in the Fund:

Interest Rates. As with most bond funds, the income on and value of your shares in the Fund 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 market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

Credit Risk. Debt securities are also subject to credit risk. Credit risk is the risk that the issuer of a debt security will be unable to make interest or principal payments on time and the related risk that the value of a debt security may decline because of concerns about the issuer’s ability or willingness to make such payments. A debt security’s credit rating reflects the credit risk associated with the debt obligation. Generally, higher-rated debt securities involve lower credit risk than lower-rated debt securities. Credit risk is often higher for corporate, mortgage-backed, asset-backed and foreign government debt securities than for U.S. Government debt securities.

Market Events Risk. Over the past several years, financial markets, such as those in the United States, Europe, Asia and elsewhere, have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. Governmental and non-governmental issuers have defaulted on, or been forced to restructure, their debts. These conditions may continue, recur, worsen or spread. The U.S. Government and the Federal Reserve, as well as certain foreign governments and central banks, have taken steps to support financial markets, including by keeping interest rates at historically low levels. This and other government intervention may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. The Federal Reserve recently has reduced its market support activities. Further reduction or withdrawal of Federal Reserve or other U.S. or non-U.S. governmental or central bank support, including interest rate increases, could negatively affect the financial markets generally, increase market volatility and reduce the value and liquidity of certain securities held by the Fund.

Liquidity Risk. Some investments may be difficult to purchase or sell, particularly during times of market instability. In addition, the Fund may not receive proceeds from the sale of certain securities for an extended period of time, which in some cases could exceed several weeks or longer. The Fund will not receive sales proceeds until settlement occurs, which may constrain the Fund’s ability to meet redemption requests or other obligations. Illiquid assets may also be difficult to value. If the Fund must sell illiquid assets to meet redemption requests or other cash needs, the Fund may be unable to sell such assets at an advantageous time or price or achieve its desired level of exposure to certain market segments. Liquidity risk may result from the lack of an active market, as well as the reduced number and capacity of traditional market participants to make a market in fixed income securities. Liquidity risk is likely to be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed income mutual funds are higher than normal.


8		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN LIMITED MATURITY FUND (continued)

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 more significantly in periods of general economic difficulty.

Mortgage-Backed/Asset-Backed Securities. Investing in mortgage-backed and asset-backed securities poses additional risks, principally with respect to increased prepayment risk. Many mortgage-backed securities and asset-backed securities may be prepaid prior to maturity. During periods of falling interest rates, prepayments may accelerate, which would require an investing Fund to reinvest the proceeds at a lower interest rate.

Foreign Investments. Investing in foreign securities poses additional risks. The performance of foreign securities can be adversely affected by the different political, regulatory and economic environments in countries where the Fund invests, and fluctuations in foreign currency exchange rates may also adversely affect the value of foreign securities. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. Lack of information may also affect the value, volatility and liquidity of these securities.

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and to the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.

Investment Company and Exchange-Traded Fund Risk. Investing in an investment company or ETF presents the risk that the investment company or ETF in which the Fund invests will not achieve its investment objective or execute its investment strategies effectively or that significant purchase or redemption activity by shareholders of such an investment company might negatively affect the value of the investment company’s shares.

Affiliated Fund Risk. When the Adviser invests Fund assets in an investment company that is also managed by the Adviser, the risk presented is that, due to its own financial interest or other business considerations, the Adviser may have had an incentive to make that investment in lieu of investments by the Fund directly in portfolio securities, or in lieu of investment in investment companies sponsored or managed by others.

Redemption Risk. The Fund may experience heavy redemptions that could cause the Fund to liquidate its assets at inopportune times or at a loss or depressed value, particularly during periods of declining or illiquid markets. Redemption risk is greater to the extent that the Fund has investors with large shareholdings, short investment horizons, or unpredictable cash flow needs. In addition, redemption risk is heightened during periods of overall market turmoil. The redemption by one or more large shareholders of their holdings in the Fund could adversely affect the Fund’s performance. If the Fund is forced to liquidate its assets under unfavorable conditions or at inopportune times, the value of the Fund’s shares may decline.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

Non-Diversification. The Fund is “non-diversified,” which means that compared with diversified funds, the Fund may invest a greater percentage of its assets in a particular issuer. Accordingly, events that affect a few — or even one — of the Fund’s investments may have a greater impact on the value of the Fund’s shares than they would if the Fund were diversified.

PAST FUND PERFORMANCE:

After-tax returns for the Fund are calculated using the highest individual Federal marginal income tax rates for each year and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. They also may not be relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The returns “After Taxes on Distributions and Sale of Fund Shares” may be higher than the other return figures because they include the effect of a tax benefit an investor may receive from the capital losses that may have been incurred by an investor in connection with the sale of Fund shares.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		9

PAYDEN LIMITED MATURITY FUND (continued)

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 3rdQ 2009 (1.42%), and the worst quarter was 4thQ 2008 (–2.66%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Limited Maturity Fund

Before Taxes		0.30	%		0.73	%		1.39	%

After Taxes on Distributions		–0.01	%		0.43	%		0.73	%

After Taxes on Distributions and Sale of Fund Shares		0.17	%		0.44	%		0.84	%
Bank of America Merrill Lynch Three Month U.S. Treasury Bill Index		0.05	%		0.07	%		1.24	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Mary Beth Syal, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Ms. Syal has been with Payden since 1991. Eric Hovey, CFA, is a Senior Vice President and portfolio manager. Mr. Hovey has been with Payden since 2006.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	5,000	$	250

Tax-Sheltered	$	2,000	$	250

Electronic Investment

Set schedule	$	2,000	$	250

No set schedule	$	5,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:


10		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN LOW DURATION FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.28	%
Other Expenses	0.29	%
Total Annual Fund Operating Expenses	0.57	%
Fee Waiver or Expense Reimbursement¹	0.12	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.45	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.45%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


1 Year	3 Years		5 Years		10 Years
$46	$	171	$	306	$	702

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in a wide variety of debt instruments and income-producing securities payable primarily in U.S. dollars. These include (1) debt securities issued or guaranteed by the U.S. Government and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (2) debt securities, loans and commercial paper issued by U.S. and foreign companies; (3) U.S. and foreign mortgage-backed and asset-backed debt securities; (4) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; and (5) convertible bonds and preferred stock.

The Fund invests at least 75% of its total assets in investment grade debt securities, but may invest up to 25% of its total assets in debt securities rated below investment grade (commonly called “junk bonds”). The overall average credit quality of the Fund will remain investment grade. Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

The Fund invests in debt securities of any maturity, although under normal market conditions the Fund’s maximum average portfolio maturity (on a dollar-weighted basis) is four years. Maturity is the date when each bond or other debt security pays back its principal.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		11

PAYDEN LOW DURATION FUND (continued)

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


12		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN LOW DURATION FUND (continued)

unsuccessful government actions, reduction of government or central bank support and political or financial instability. Lack of information may also affect the value, volatility and liquidity of these securities.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 3rdQ 2009 (2.44%), and the worst quarter was 3rdQ 2011 (–1.17%).


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		13

PAYDEN LOW DURATION FUND (continued)


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Low Duration Fund (formerly Payden Short Bond Fund)

Before Taxes		0.43	%		1.39	%		2.82	%

After Taxes on Distributions		–0.06	%		0.76	%		1.84	%

After Taxes on Distributions and Sale of Fund Shares		0.25	%		0.82	%		1.83	%
Bank of America Merrill Lynch 1-3 Year Treasury Index		0.54	%		0.70	%		2.42	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	5,000	$	250

Tax-Sheltered	$	2,000	$	250

Electronic Investment

Set schedule	$	2,000	$	250

No set schedule	$	5,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:


14		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN U.S. GOVERNMENT FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.28	%
Other Expenses	0.31	%
Total Annual Fund Operating Expenses	0.59	%
Fee Waiver or Expense Reimbursement¹	0.14	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.45	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.45%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


1 Year	3 Years		5 Years		10 Years
$46	$	175	$	315	$	725

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests 100% of its total assets in “U.S. Government Obligations,” which are defined as U.S. Treasury bills, notes and bonds, and other bonds and obligations issued or guaranteed by the U.S. Government, or in Government National Mortgage Association (GNMA) mortgage-backed securities, which are debt securities representing part ownership in a pool of mortgage loans backed by the full faith and credit of the U.S. Government, or in Government-sponsored enterprises (such as the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal National Mortgage Association (FNMA)). In addition, the Fund may also invest in collateralized mortgage obligations and repurchase agreements collateralized by U.S. Government Obligations.

Except for mortgage-backed U.S. Government Obligations, the Fund invests in debt securities with a maximum maturity of ten years. Under normal market conditions, the Fund’s average portfolio maturity (on a dollar-weighted basis) is generally less than five years. The Fund invests in mortgage-backed U.S. Government Obligations with a maximum effective duration of ten years. Duration is a mathematical concept which uses anticipated cash flows to measure the price volatility of a security and is calculated in terms of years. For example, when interest rates move up or down, the price of a security with a duration of four years will move roughly twice as much as a security with a duration of two years.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		15

PAYDEN U.S. GOVERNMENT FUND (continued)

PRINCIPAL INVESTMENT RISKS:

Extension Risk. Rising interest rates can cause the average maturity of the Fund’s holdings of mortgage-backed securities to lengthen unexpectedly due to a drop in prepayments. This would increase the sensitivity of the Fund to rising rates, and could cause certain of the Fund’s investments to decline in value more than they would have declined due to the rise in interest rates alone.

U.S. Treasury and Agency Obligations. Debt obligations issued by the U.S. Treasury, which include U.S. Treasury bills, notes and bonds, are backed by the full faith and credit of the U.S. Government. Debt obligations issued by agencies chartered by the U.S. Government, which are classified as Government sponsored enterprises, may or may not be backed by the full faith and credit of the U.S. Government. For example, principal and interest payments of GNMA mortgage-backed securities are backed by the full faith and credit of the U.S. Government. On the other hand, FNMA and FHLMC mortgage-backed securities are not guaranteed by the U.S. Government. However, currently, each of the FNMA and FHLMC benefits from the Senior Preferred Stock Purchase Agreement it has with the U.S. Treasury which is expected to provide them with the necessary cash resources to meet their obligations. Although the U.S. Government has provided financial support to FNMA and FHLMC in the past (including as part of the Senior Preferred Stock Purchase Agreements), no assurance can be given that the U.S. Government will provide financial support in the future to these or other U.S. Government agencies, authorities or instrumentalities that are not supported by the full faith and credit of the United States.

Prepayment Risk. The Fund is subject to the prepayment risk applicable to mortgages underlying the GNMA mortgage-backed securities and other mortgage-backed U.S. Government Obligations. Prepayment risk is the chance that the mortgage-backed bonds will be paid off early due to homeowners refinancing their mortgages during periods of falling interest rates. Forced to reinvest the unanticipated proceeds at lower rates, the Fund would experience a decline in income and lose the opportunity for additional price appreciation associated with falling rates. Prepayment risk is high for the Fund. In addition, the Fund is subject to the credit risk associated with these securities, including the market’s perception of the creditworthiness of the issuing Federal agency, as well as the credit quality of the underlying assets.

Market Events Risk. Over the past several years, financial markets, such as those in the United States, Europe, Asia and elsewhere, have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. Governmental and non-governmental issuers have defaulted on, or been forced to restructure, their debts. These conditions may continue, recur, worsen or spread. The U.S. Government and the Federal Reserve, as well as certain foreign governments and central banks, have taken steps to support financial markets, including by keeping interest rates at historically low levels. This and other government intervention may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. The Federal Reserve recently has reduced its market support activities. Further reduction or withdrawal of Federal Reserve or other U.S. or non-U.S. governmental or central bank support, including interest rate increases, could negatively affect the financial markets generally, increase market volatility and reduce the value and liquidity of certain securities held by the Fund.


16		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN U.S. GOVERNMENT FUND (continued)

causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 1stQ 2008 (3.70%), and the worst quarter was 2ndQ 2013 (–1.42%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden U.S. Government Fund

Before Taxes		0.46	%		1.21	%		3.03	%

After Taxes on Distributions		–0.19	%		0.50	%		2.03	%

After Taxes on Distributions and Sale of Fund Shares		0.26	%		0.70	%		2.02	%
Bank of America Merrill Lynch 1-5 Year Treasury Index		0.98	%		1.25	%		3.04	%

(The returns for the index are before any deduction for taxes, fees or expenses.)


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		17

PAYDEN U.S. GOVERNMENT FUND (continued)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. David Ballantine, Chartered Financial Analyst (“CFA”), is a Principal and portfolio manager. Mr. Ballantine has been with Payden since 1991. Gary Greenberg, CFA, is a Senior Vice President and portfolio manager. Mr. Greenberg has been with Payden since 1995.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are shown below, although the Fund or the Fund’s distributor may in its discretion lower or waive these amounts for certain categories of investors.


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN GNMA FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.27	%
Other Expenses	0.40	%
Total Annual Fund Operating Expenses	0.67	%
Fee Waiver or Expense Reimbursement¹	0.17	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.50	%

Payden & Rygel (“Payden”) has contractually agreed that for so long as it is the investment adviser to the Fund, the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) will not exceed 0.50%.


18		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN GNMA FUND (continued)

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (taking into account the guaranteed fee waiver or expense reimbursement for all time periods). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$51	$	160	$	280	$	628

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 15% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests at least 80% of its total assets in Government National Mortgage Association mortgage-backed securities (GNMA Securities), which are debt securities representing part ownership in a pool of mortgage loans backed by the full faith and credit of the U.S. Government. The Fund invests the balance of its assets primarily in other “U.S. Government Obligations,” which are defined as U.S. Treasury bills, notes and bonds, and other bonds and mortgage-backed securities issued or guaranteed by the U.S. Government, or by Government sponsored enterprises (such as the Federal Home Loan Mortgage Corporation (FHLMC) or Federal National Mortgage Association (FNMA)). However, the Fund may also invest in collateralized mortgage obligations and repurchase agreements collateralized by U.S. Government Obligations or GNMA Securities.

The Fund invests in debt securities of any maturity, and there is no limit on the Fund’s minimum or maximum average portfolio maturity.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Interest Rates. As with most bond funds, the income on and value of your shares in the Fund 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. However, falling interest rates may not affect the prices of GNMA Securities as much as the prices of comparable debt securities because the markets may discount GNMA Security prices for prepayment risk when interest rates fall. Further, the market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

Prepayment Risk. The Fund is subject to the prepayment risk applicable to mortgages underlying the GNMA Securities and other mortgage-backed U.S. Government Obligations. Prepayment risk is the chance that the mortgage-backed bonds will be paid off early due to homeowners refinancing their mortgages during periods of falling interest rates. Forced to reinvest the unanticipated proceeds at lower rates, the Fund would experience a decline in income and lose the opportunity for additional price appreciation associated with falling rates. Prepayment risk is high for the Fund. In addition, the Fund is subject to the credit risk associated with these securities, including the market’s perception of the creditworthiness of the issuing Federal agency, as well as the credit quality of the underlying assets.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		19

PAYDEN GNMA FUND (continued)

U.S. Treasury and Agency Obligations. Debt obligations issued by the U.S. Treasury, which include U.S. Treasury bills, notes and bonds, are backed by the full faith and credit of the U.S. Government. Debt obligations issued by agencies chartered by the U.S. Government, which are classified as Government sponsored enterprises, may or may not be backed by the full faith and credit of the U.S. Government. For example, principal and interest payments of GNMA Securities are backed by the full faith and credit of the U.S. Government. On the other hand, FNMA and FHLMC mortgage-backed securities are not guaranteed by the U.S. Government. However, currently, each of the FNMA and FHLMC benefits from the Senior Preferred Stock Purchase Agreement it has with the U.S. Treasury which is expected to provide them with the necessary cash resources to meet their obligations. Although the U.S. Government has provided financial support to FNMA and FHLMC in the past (including as part of the Senior Preferred Stock Purchase Agreements), no assurance can be given that the U.S. Government will provide financial support in the future to these or other U.S. Government agencies, authorities or instrumentalities that are not supported by the full faith and credit of the United States.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.


20		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN GNMA FUND (continued)

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 4thQ 2008 (3.83%), and the worst quarter was 2ndQ 2013 (–2.95%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden GNMA Fund

Before Taxes		1.20	%		3.06	%		4.66	%

After Taxes on Distributions		–0.34	%		1.36	%		2.87	%

After Taxes on Distributions and Sale of Fund Shares		0.68	%		1.66	%		2.92	%
Bank of America Merrill Lynch GNMA Master Index		1.31	%		3.03	%		4.63	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		21

PAYDEN GNMA FUND (continued)

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN CORE BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.28	%
Other Expenses	0.26	%
Acquired Fund Fees and Expenses	0.05	%
Total Annual Fund Operating Expenses¹	0.59	%

The Total Annual Fund Operating Expenses in this fee table do not correlate to the ratio of expenses to average net assets given in the Financial Highlights in this Prospectus and in the Fund’s financial statements, which reflect the Fund’s operating expenses but not Acquired Fund Fees and Expenses.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (inclusive of Acquired Fund Fees and Expenses). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$60	$	189	$	329	$	738

PRINCIPAL INVESTMENT STRATEGIES:


22		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN CORE BOND FUND (continued)

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		23

PAYDEN CORE BOND FUND (continued)

as the reduced number and capacity of traditional market participants to make a market in fixed income securities. Liquidity risk is likely to be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed income mutual funds are higher than normal.

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 fluctuate more than the market prices of investment grade debt securities and may decline more significantly in periods of general economic difficulty.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:


24		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN CORE BOND FUND (continued)

those shown. They also may not be relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The returns “After Taxes on Distributions and Sale of Fund Shares” may be higher than the other return figures because they include the effect of a tax benefit an investor may receive from the capital losses that may have been incurred by an investor in connection with the sale of Fund shares.

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 3rdQ 2009 (4.66%), and the worst quarter was 2ndQ 2013 (–3.02%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Core Bond Fund

Before Taxes		0.82	%		3.80	%		4.33	%

After Taxes on Distributions		–0.38	%		2.37	%		2.80	%

After Taxes on Distributions and Sale of Fund Shares		0.48	%		2.35	%		2.77	%
Barclays Capital Aggregate Bond Index		0.55	%		3.25	%		4.51	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Michael Salvay, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Mr. Salvay has been with Payden since 1997. Brad Boyd, CFA, is a Senior Vice President and portfolio manager. Mr. Boyd has been with Payden since 2002.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		25

PAYDEN CORE BOND FUND (continued)

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN STRATEGIC INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return combined with income generation that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.55	%
Other Expenses	0.35	%
Total Annual Fund Operating Expenses	0.90	%
Fee Waiver or Expense Reimbursement¹	0.10	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.80	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.80%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that operating expenses remain the same (taking into account the contractual fee waiver or expense reimbursement for the first year). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$82	$	277	$	489	$	1,099

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in a wide variety of securities across many asset classes in an unconstrained fashion. It seeks opportunities by employing a flexible approach that evaluates security attractiveness on a global basis and across currencies.

The Fund will invest in income-producing securities and equity related securities payable in U.S. dollars and other currencies. These include (1) debt securities issued or guaranteed by the U.S. Government, and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (2) debt securities, loans and commercial paper issued by U.S. and foreign companies; (3) U.S. and foreign mortgage-backed and asset-backed debt securities; (4) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; (5) convertible bonds and preferred stock; and (6) equity securities and equity related securities such as common stock and master limited partnerships.


26		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN STRATEGIC INCOME FUND (continued)

The Fund will invest in both developed and emerging markets.

The Fund invests in both investment grade debt securities and securities rated below investment grade (commonly called “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

In evaluating preferred stocks, convertible bonds, equity securities and equity-related securities such as common equity and master limited partnerships, Payden seeks instruments consistent with the income generating focus of the Fund.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Interest Rates. As with most funds that invest in debt securities, the income on and value of your shares in the Fund 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 market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

Credit Risk. Debt instruments are also subject to credit risk. Credit risk is the risk that the issuer of a debt security will be unable to make interest or principal payments on time and the related risk that the value of a debt security may decline because of concerns about the issuer’s ability or willingness to make such payments. A debt security’s credit rating reflects the credit risk associated with the debt obligation. Generally, higher-rated debt securities involve lower credit risk than lower-rated debt securities. Credit risk is often higher for corporate, mortgage-backed, asset-backed and foreign government debt securities than for U.S. Government debt securities.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		27

PAYDEN STRATEGIC INCOME FUND (continued)

likely to be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed income mutual funds are higher than normal.

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 fluctuate more than the market prices of investment grade debt securities and may decline more significantly in periods of general economic difficulty.

Emerging Markets. The risks of foreign investing are heightened for securities of issuers in emerging market countries. Emerging market countries tend to have economic structures that are less diverse and mature, and political systems that are less stable, than those of developed countries. In addition to all of the risks of investing in foreign developed markets, emerging markets are more susceptible to governmental interference, local taxes being imposed on foreign investments, restrictions on gaining access to sales proceeds, and less liquid and efficient trading markets.

Equity Securities. Investing in equity securities poses certain risks, including a sudden decline in a holding’s share price, or an overall decline in the stock market. The value of the Fund’s investment in any such securities will fluctuate on a day-to-day basis with movements in the stock market, as well as in response to the activities of individual companies whose equity securities the Fund owns. Moreover, purchasing stocks perceived to be undervalued brings additional risks. For example, the issuing company’s condition may worsen instead of improve, or the pace and extent of any improvement may be less than expected.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.


28		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN STRATEGIC INCOME FUND (continued)

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the one-year period, the Fund’s best quarter was 1stQ 2015 (2.19%), and the worst quarter was 2ndQ 2015 (–0.54%).


Average Annual Returns Through 12/31/15	1 Year			Since Inception (5/8/14)
Payden Strategic Income Fund
Before Taxes		1.78	%		1.45	%
After Taxes on Distributions		0.83	%		0.49	%

After Taxes on Distributions and Sale of Fund Shares		1.06	%		0.70	%
Barclays Capital Aggregate Bond Index		0.55	%		1.98	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		29

PAYDEN STRATEGIC INCOME FUND (continued)

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN ABSOLUTE RETURN BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.50	%
Other Expenses	0.67	%
Total Annual Fund Operating Expenses	1.17	%
Fee Waiver or Expense Reimbursement¹	0.47	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.70	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.70%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that operating expenses remain the same (taking into account the contractual fee waiver or expense reimbursement for the first year). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$72	$	325	$	598	$	1,379

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. The Fund began operations on November 6, 2014. For the period from November 6, 2014 through October 31, 2015, the Fund’s portfolio turnover rate was 64% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:


30		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN ABSOLUTE RETURN BOND FUND (continued)

combination of both. It seeks opportunities by employing a flexible approach that evaluates security attractiveness globally, both inside and outside the U.S. Downside risk protection is a part of the strategy, but there is no guarantee or implication that negative returns will be avoided. The reference benchmark for the Fund’s absolute return strategy is the one-month London Inter-Bank Offered Rate (“LIBOR”).

Under normal market conditions, the Fund will invest at least 80% of its investable assets (net assets plus borrowing for investment purposes, if any) in bonds or investments that provide exposure to bonds. Investments in “bonds” may include, but are not limited to (1) debt securities issued or guaranteed by the U.S. Government, and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (2) debt securities and commercial paper issued by U.S. and foreign companies; (3) U.S. and foreign mortgage-related securities, including collateralized mortgage-backed obligations and commercial mortgage-backed obligations; (4) U.S. and foreign asset-backed debt securities, including collateralized debt obligations and collateralized loan obligations; (5) loans, including floating rate loans; and (6) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax.

The Fund may also invest in (1) convertible bonds and preferred stock; (2) real estate investment trusts; and (3) equity securities and equity-related securities and master limited partnerships. In evaluating these types of investments, Payden seeks instruments consistent with the income generating focus of the Fund.

The Fund will invest in both developed and emerging markets. In making these investments, the Fund invests in securities payable in U.S. dollars and foreign currencies. The Fund may hedge this foreign currency exposure to the U.S. dollar. However, the Fund may also choose to have currency exposure through outright currency purchases unrelated to a foreign currency-denominated security.

The Fund may invest in many different types of derivatives, such as futures, forwards, swaps and options. However, the Fund expects to focus on the following types of derivatives. Futures transactions will be actively employed to manage interest rate sensitivity. Similarly, currency forwards will be actively employed to manage the Fund’s currency exposure. In addition but to a lesser extent, the Fund expects to use options, interest rate swaps and credit default swaps for portfolio hedging purposes or to gain more efficient exposure to a market. Such derivative positions may be taken with the primary purpose of establishing a view on market volatility.

The Fund invests in debt securities of any maturity, and there is no limit on the Fund’s minimum or maximum average portfolio maturity. Maturity is the date when each bond or other debt security pays back its principal. In addition, there may be circumstances when the duration of the Fund is negative to protect against rising interest rates. Duration is an analytic measure of the Fund’s sensitivity to interest rate movements. The absolute return nature of the Fund, combined with its emphasis on tracking against the one-month LIBOR, will generally lead to durations that are between 5 years and negative 2 years.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Interest Rates. As with most funds that invest in debt securities, the income on and value of your shares in the Fund 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. The impact of interest rate changes on floating rate investments is typically mitigated by the periodic interest rate reset of the instruments. Generally, the market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		31

PAYDEN ABSOLUTE RETURN BOND FUND (continued)

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 fluctuate more than the market prices of investment grade debt securities and may decline more significantly in periods of general economic difficulty.


32		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN ABSOLUTE RETURN BOND FUND (continued)

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the one-year period, the Fund’s best quarter was 1stQ 2015 (0.80%), and the worst quarter was 4thQ 2015 (–0.05%).


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		33

PAYDEN ABSOLUTE RETURN BOND FUND (continued)


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/6/14)
Payden Absolute Return Bond Fund

Before Taxes		0.93	%		0.64	%

After Taxes on Distributions		0.00	%	–	0.21	%

After Taxes on Distributions and Sale of Fund Shares		0.53	%		0.11	%
Merrill Lynch 1 Month LIBOR		0.18	%		0.18	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Brian Matthews, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Mr. Matthews has been with Payden since 1986. Brad Boyd, CFA, is a Senior Vice President and portfolio manager. Mr. Boyd has been with Payden since 2002.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:


34		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN CORPORATE BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.35	%
Other Expenses	0.43	%
Total Annual Fund Operating Expenses	0.78	%
Fee Waiver or Expense Reimbursement¹	0.13	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.65	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.65%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (inclusive of Acquired Fund Fees and Expenses and taking into account the contractual fee waiver or expense reimbursement for the first year). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$66	$	236	$	420	$	954

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 112% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in a wide variety of debt instruments and income-producing securities. These include (1) debt securities, loans and commercial paper issued by U.S. and foreign companies; (2) debt securities issued or guaranteed by the U.S. Government and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (3) U.S. and foreign mortgage-backed and asset-backed securities; (4) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; and (5) convertible bonds and preferred stock.

Under normal market conditions, the Fund invests at least 80% of its total assets in corporate bonds or similar corporate debt instruments. In addition, in order to gain exposure to corporate debt markets, the Fund may use derivatives to a significant extent, including in particular, credit default swaps with respect to individual corporate names and with respect to various credit indices.

Under normal market conditions, the Fund invests at least 65% of its total assets in securities rated investment grade at the time of purchase, and may invest up to 35% of its total assets in securities rated below investment grade (commonly called “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

The Fund may invest up to 25% of its total assets in securities of issuers organized or headquartered in emerging market countries.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers, and may use derivatives to gain exposure to such equity markets.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		35

PAYDEN CORPORATE BOND FUND (continued)

The Fund invests in debt securities payable in U.S. dollars and in foreign currencies. The Fund may hedge this foreign currency exposure to the U.S. dollar.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


36		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN CORPORATE BOND FUND (continued)

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		37

PAYDEN CORPORATE BOND FUND (continued)

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the six-year period, the Fund’s best quarter was 3rdQ 2010 (5.15%), and the worst quarter was 2ndQ 2013 (–3.78%).


Average Annual Returns through 12/31/15	1 Year			5 Years			Since Inception (3/12/09)
Payden Corporate Bond Fund

Before Taxes		1.14	%		5.41	%		7.55	%

After Taxes on Distributions		–0.56	%		3.33	%		5.35	%

After Taxes on Distributions and Sale of Fund Shares		0.80	%		3.50	%		5.19	%
Barclays Capital U.S. Corporate Investment Grade Index		–0.68	%		4.53	%		7.78	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Michael Salvay, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Mr. Salvay has been with Payden since 1997. James Wong, CFA, is a Managing Principal and portfolio manager. Mr. Wong has been with Payden since 1995. Natalie Trevithick, CFA, is a Senior Vice President and portfolio manager. Ms. Trevithick has been with Payden since 2012.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	5,000	$	250

Tax-Sheltered	$	2,000	$	250

Electronic Investment

Set schedule	$	2,000	$	250

No set schedule	$	5,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:


38		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN CORPORATE BOND FUND (continued)

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN HIGH INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks high current income while providing for capital appreciation by investing primarily in a diversified portfolio of below investment grade bonds.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.35	%
Other Expenses	0.32	%
Acquired Fund Fees and Expenses	0.02	%
Total Annual Fund Operating Expenses¹	0.69	%

The Total Annual Fund Operating Expenses in this fee table do not correlate to the ratio of expenses to average net assets given in the Financial Highights in this Prospectus and in the Fund’s financial statements, which reflect the Fund’s operating expenses but not Acquired Fund Fees and Expenses.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (inclusive of Acquired Fund Fees and Expenses). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$70	$	221	$	384	$	859

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in a wide variety of debt instruments and income-producing securities. These include (1) debt securities, loans and commercial paper issued by U.S. and foreign companies; (2) debt securities issued or guaranteed by the U.S. Government and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (3) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; and (4) convertible bonds and preferred stock.

Under normal market conditions, the Fund invests at least 80% of its total assets in corporate debt securities rated below investment grade (commonly called “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that the Fund’s adviser, Payden & Rygel (“Payden”), determines to be of comparable quality.

The Fund emphasizes investments in debt securities of (1) issuers with credit ratings at the mid to high quality end of the high yield bond spectrum, which Payden believes have stable to improving business prospects; (2) issuers Payden believes are in the growth stage of development and have reasonable prospects for improved operating results and improved credit ratings; and (3) issuers that have undergone leveraged buyouts or recapitalizations.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		39

PAYDEN HIGH INCOME FUND (continued)

The Fund may invest up to 30% of its total assets in securities of issuers organized or headquartered in emerging market countries.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers.

The Fund primarily invests in debt securities payable in U.S. dollars and may invest in foreign currencies. The Fund may hedge this foreign currency exposure to the U.S. dollar.

PRINCIPAL INVESTMENT RISKS:


40		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN HIGH INCOME FUND (continued)

decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. Lack of information may also affect the value, volatility and liquidity of these securities.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		41

PAYDEN HIGH INCOME FUND (continued)

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 3rdQ 2009 (9.54%), and the worst quarter was 4thQ 2008 (–14.20%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden High Income Fund

Before Taxes		–1.54	%		4.70	%		5.17	%

After Taxes on Distributions		–3.73	%		1.86	%		2.39	%

After Taxes on Distributions and Sale of Fund Shares		–0.83	%		2.66	%		2.99	%
Bank of America Merrill Lynch BB-B High Yield Cash Pay Constrained Index		–2.82	%		5.24	%		6.42	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Sabur Moini is a Principal and portfolio manager. Mr. Moini has been with Payden since 2000. Jordan Lopez, Chartered Financial Analyst, is a Senior Vice President and portfolio manager. Mr. Lopez has been with Payden since 2004.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:


42		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN HIGH INCOME FUND (continued)

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

U.S. LOAN FUND

PAYDEN FLOATING RATE FUND

INVESTMENT OBJECTIVE:

The Fund’s investment objective is to seek a high level of current income through floating rate debt instruments, with a secondary objective of long-term capital appreciation.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.55	%
Other Expenses	0.29	%
Total Annual Fund Operating Expenses	0.84	%
Fee Waiver or Expense Reimbursement¹	0.09	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.75	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.75%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


1 Year	3 Years		5 Years		10 Years
$77	$	259	$	457	$	1,029

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year the Fund’s portfolio turnover rate was 39% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

Under normal market conditions the Fund invests at least 80% of its total assets in income producing floating rate loans and other floating rate debt instruments. Floating rate loans are typically debt obligations with interest rates that adjust or “float” periodically, often on a daily, monthly, quarterly, or semiannual basis by reference to a base lending rate plus a premium.

The Fund invests primarily in senior floating rate loans of domestic and foreign borrowers. The reason these loans are called “senior” is because loans are considered senior in a borrower’s capital structure in that no debt is ahead of the loans in terms of priority of payment. Where an instrument ranks in priority of payment is referred to as seniority. Based on this ranking, a corporate issuer in the event of a default will direct payments such that the senior most creditors are paid first, while the most junior equity holders are paid last. In a typical structure, senior secured and unsecured creditors will be first in right of payment, followed by subordinate bond holders, junior bondholders, preferred shareholders and common shareholders. Loans are typically senior, secured debt instruments and rank highest in the capital structure of corporations. Thus, throughout this discussion, the floating rate loans in which the Fund invests are referred to as “Senior Loans.”


Prospectus		FUND SUMMARIES – U.S. LOAN FUND		43

PAYDEN FLOATING RATE FUND (continued)

The Fund invests in Senior Loans that are syndicated loans. These loans are structured by a syndicator, such as a bank or other lender, which also markets the loans to potential investors, such as the Fund. The Fund may invest in Senior Loans in one of three ways. First, much like an initial public offering of equity securities, the Fund could be one of the initial investors in the Senior Loan and thus would invest directly as a signatory to the original loan agreement. Second, the Fund could also invest directly in the Senior Loan by assignment from an original lender. Third, the Fund may invest indirectly in the Senior Loan through a loan participation agreement.

Under normal market conditions, the Fund invests a substantial portion of its total assets in Senior Loans and other debt instruments that are rated below investment grade (commonly called “junk bonds”). Investment grade debt instruments are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are instruments that Payden determines to be of comparable quality.

Payden seeks to maintain broad borrower and industry diversification among the Fund’s Senior Loans. When selecting Senior Loans, Payden seeks to implement a systematic risk-weighted approach that utilizes fundamental analysis of risk/return characteristics. Senior Loans may be sold if, in Payden’s opinion, the risk-return profile deteriorates or to pursue more attractive investment opportunities.

The Fund may also invest in secured and unsecured subordinated loans, second lien loans and subordinated bridge loans, other floating rate debt securities, fixed income debt obligations and money market instruments. Money market holdings with a remaining maturity of less than 60 days are deemed floating rate assets.

To the extent the Fund invests in assets that are denominated in a currency other than the U.S. dollar, the Fund may engage in foreign currency exchange contracts and other currency strategies to convert such foreign currencies into U.S. dollars to hedge against fluctuations in currency exchange rates.

To the extent the Fund invests in fixed rate Senior Loans, other fixed rate loans or other fixed rate debt instruments, the Fund may engage in interest rate swaps in which it pays a fixed rate of interest to a counterparty and receives a floating rate of interest from the counterparty to hedge against fluctuations in interest rates. In addition, the notional amount of the Fund’s investments in interest rate swaps will be the amount that is counted toward satisfaction of the Fund’s policy of investing 80% of its total assets in floating rate loans or other floating rate debt instruments.

The Fund may invest up to 20% of its assets in fixed rate fixed income securities in which the Fund has not entered into any interest rate swaps. Such fixed rate fixed income securities include, but are not limited to, corporate bonds, preferred securities, convertible securities, asset-backed securities, mortgage-backed securities and U.S. Government debt securities.

The Fund’s investments in any floating rate and fixed income securities may be of any maturity.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers.

The Fund may invest up to 30% of its total assets in collateralized loan obligations (“CLOs”). CLOs are asset-backed securities that are formed to hold and manage diversified pools of Senior Loans. These asset-backed structures issue several debt tranches that typically include at least a AAA-rated tranche, a AA-rated tranche and a BBB-rated tranche and that have rights to the collateral and payment stream, in descending order. The proceeds from the debt tranches are used to purchase the corporate loans. CLOs are usually rated by two of the three major ratings agencies and impose a series of covenant tests on the respective collateral managers, including minimum rating and industry diversification. The Fund would potentially invest in these rated debt tranches issued by the CLOs.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Credit Risk. Debt instruments are also subject to credit risk. Credit risk is the risk that the issuer of a debt instrument will be unable to make interest or principal payments on time and the related risk that the value of a debt security may decline because of concerns about the issuer’s ability or willingness to make such payments. A debt instrument’s credit rating reflects the credit risk associated with the debt obligation. Generally, higher-rated debt instruments involve lower credit risk than lower-rated debt instruments. Credit risk is often higher for corporate, mortgage-backed, asset-backed and foreign government debt instruments than for U.S. Government debt instruments.


44		FUND SUMMARIES – U.S. LOAN FUND		Payden Mutual Funds

PAYDEN FLOATING RATE FUND (continued)

which would adversely affect the Senior Loan’s value. No active trading market may exist for certain Senior Loans, which may impair the ability of the Fund to realize full value in the event of the need to sell a Senior Loan and which may make it difficult to value Senior Loans. Also, because Payden relies mainly on its own evaluation of the creditworthiness of borrowers, the Fund is particularly dependent on portfolio management’s analytical abilities. Although Senior Loans in which the Fund will invest generally will be secured by specific collateral, there can be no assurance that liquidation of such collateral would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal or that such collateral could be readily liquidated. Transactions in Senior Loans and other loans may settle on a delayed basis (which in some cases may be several weeks or longer). As a result, the proceeds from the sale of a loan may not be immediately available to make additional investments or to meet the Fund’s redemption obligations. Senior Loans and other loans may not be considered “securities” for certain purposes, and purchasers (such as the Fund) therefore may not be entitled to rely on the anti-fraud protections and other safeguards provided by U.S. federal securities laws.

Below Investment Grade Credit. Below investment grade instruments (commonly called “junk bonds”) 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 instruments may fluctuate more than the market prices of investment grade debt instruments and may decline more significantly in periods of general economic difficulty.

Interest Rates. As interest rates rise, the value of fixed income investments is likely to decline. Conversely, when interest rates decline, the value of fixed income investments is likely to rise. The impact of interest rate changes on floating rate investments is typically mitigated by the periodic interest rate reset of the investments. Investments with longer maturities typically offer higher yields, but are more sensitive to changes in interest rates than investments with shorter maturities, making them more volatile. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. In a declining interest rate environment, prepayment of loans may increase. In such circumstances, the Fund may have to reinvest the repayment proceeds at lower yields. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

Collateralized Loan Obligations Risk. In addition to the normal interest rate, liquidity, credit, default and other risks of debt instruments, collateralized loan obligations carry additional risks, including the possibility that distributions from collateral securities will not be adequate to make interest or other payments, the quality of the collateral may decline in value or default, the Fund may invest in collateralized loan obligations that are subordinate to other classes, values may be volatile, and disputes with the issuer may produce unexpected investment results.


Prospectus		FUND SUMMARIES – U.S. LOAN FUND		45

PAYDEN FLOATING RATE FUND (continued)

maturity. During periods of falling interest rates, prepayments may accelerate, which would require the Fund to reinvest the proceeds at a lower interest rate.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the two-year period, the Fund’s best quarter was 1stQ 2015 (2.27%), and the worst quarter was 4thQ 2015 (–0.62%).


46		FUND SUMMARIES – U.S. LOAN FUND		Payden Mutual Funds

PAYDEN FLOATING RATE FUND (continued)


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/11/13)
Payden Floating Rate Fund

Before Taxes		2.11	%		1.88	%

After Taxes on Distributions		0.74	%		0.41	%

After Taxes on Distributions and Sale of Fund Shares		1.20	%		0.73	%
Credit Suisse BB-B Loan Index		2.65	%		2.24	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:


Prospectus		FUND SUMMARIES – TAX EXEMPT BOND FUND		47

PAYDEN CALIFORNIA MUNICIPAL INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks income that is exempt from Federal and California income tax and is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.32	%
Other Expenses	0.38	%
Total Annual Fund Operating Expenses	0.70	%
Fee Waiver or Expense Reimbursement¹	0.15	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.55	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.55%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


1 Year	3 Years		5 Years		10 Years
$56	$	209	$	375	$	856

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 45% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

Under normal market circumstances, the Fund invests at least 80% of its total assets in “California Municipal Securities,” which are defined as debt obligations issued by the State of California, local governments and other authorities in California, and their agencies and instrumentalities, or by other issuers, all of which pay interest income exempt from California personal income tax.

The Fund may invest up to 20% of its total assets in “Municipal Securities,” which are defined as debt obligations issued by state and local governments, territories, and possessions of the United States, regional government authorities, and their agencies and instrumentalities, and which pay interest income either exempt from Federal income tax or exempt from Federal income tax, but subject to the Federal alternative minimum tax.

Under normal market circumstances, the Fund invests at least 75% of its total assets in investment grade bonds, but may invest up to 25% of its total assets in debt securities rated below investment grade (commonly called “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

The Fund invests in debt securities of any maturity and there is no limit on the Fund’s minimum or maximum average portfolio maturity. Maturity is the date when each bond or other debt security pays back its principal. However, the Fund’s average portfolio maturity (on a dollar-weighted basis) is generally five to ten years.

As a temporary measure, the Fund may also invest up to 20% of its total assets in debt securities that pay interest income subject to Federal or state income tax.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.


48		FUND SUMMARIES – TAX EXEMPT BOND FUND		Payden Mutual Funds

PAYDEN CALIFORNIA MUNICIPAL INCOME FUND (continued)

PRINCIPAL INVESTMENT RISKS:

Municipal Securities. Investing in the Municipal Securities market involves certain risks. The amount of public information available about Municipal Securities is generally less than that for corporate equities or bonds, and the Fund’s investment performance may therefore be more dependent on Payden’s analytical abilities than if the Fund were to invest in stocks or taxable bonds. The secondary market for Municipal Securities also tends to be less well-developed and less liquid than many other securities markets, which may adversely affect the Fund’s ability to sell its bonds at attractive prices or at prices approximating those at which the Fund currently values them.

California Municipal Securities. Because the Fund invests primarily in California Municipal Securities, its performance is subject to economic and political developments in the State of California. California Municipal Securities may be adversely affected by political and economic conditions and developments within California and the nation as a whole. Since the end of the recession, California and the U.S. have been in the midst of a modest, drawn-out recovery. While economists have indicated that the State’s economic recovery should continue its steady progress, they believe that there is still considerable risk to California’s economic outlook due to, among other factors, California’s unfunded budget obligations, the uncertainty surrounding federal fiscal policy and the volatility in the U.S. and global stock and credit markets. As of February 9, 2016, California’s general obligation bonds were rated Aa3 by Moody’s, AA- by Standard & Poor’s, and A+ by Fitch Ratings. Although bonds issued by California are “investment grade” according to each ratings agency and were upgraded in 2015 due to the state’s improved fiscal condition and balanced budget, California currently has one of the lowest credit rating of any state, and the agencies continue to monitor California’s budget outlook closely to determine whether to alter the ratings.

Securities Subject to Federal Income Tax. As a temporary measure, the Fund may invest up to 20% of its total assets in debt securities that pay interest income subject to Federal income tax.


Prospectus		FUND SUMMARIES – TAX EXEMPT BOND FUND		49

PAYDEN CALIFORNIA MUNICIPAL INCOME FUND (continued)

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 3rdQ 2009 (5.31%), and the worst quarter was 4thQ 2010 (–3.86%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
California Municipal Income Fund
Before Taxes		2.38	%		4.30	%		3.91	%
After Taxes on Distributions		1.85	%		4.08	%		3.75	%
After Taxes on Distributions and Sale of Fund Shares		2.28	%		3.84	%		3.68	%
Barclays Capital 7-Year Municipal Index		3.27	%		4.47	%		4.82	%
Barclays Capital California Intermediate Index		3.28	%		5.10	%		4.98	%

(The returns for each index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Michael Salvay, Chartered Financial Analyst, is a Managing Principal and portfolio manager. He has been with Payden since 1997.


50		FUND SUMMARIES – TAX EXEMPT BOND FUND		Payden Mutual Funds

PAYDEN CALIFORNIA MUNICIPAL INCOME FUND (continued)

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT
Regular	$	5,000	$	250
Tax-Sheltered	$	2,000	$	250
Electronic Investment
Set schedule	$	2,000	$	250
No set schedule	$	5,000	$	250
Automatic Exchange		NA	$	250

TAX INFORMATION:

Substantially all dividends paid by the Fund will be exempt from Federal income taxes; however, a portion of the dividends may be a tax preference for purposes of the alternative minimum tax. Dividends from the Fund may also be subject to state and local taxes. The Fund anticipates that the federally exempt interest dividends paid by the Fund and derived from interest on bonds exempt from California income tax will be exempt from California state income tax. To the extent the Fund’s dividends are derived from interest on debt obligations that is not exempt from California income tax, however, such dividends will be subject to state income tax. In addition, the amount of such dividends may be included in the measure of income tax on other items, including but not limited to social security benefits.

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

GLOBAL BOND FUNDS

PAYDEN GLOBAL LOW DURATION FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.30	%
Other Expenses	0.39	%
Total Annual Fund Operating Expenses	0.69	%
Fee Waiver or Expense Reimbursement¹	0.14	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.55	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.55%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		51

PAYDEN GLOBAL LOW DURATION FUND (continued)

operating expenses remain the same (taking into account the contractual fee waiver or expense reimbursement for the first year). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$56	$	207	$	370	$	845

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in a wide variety of debt instruments and income-producing securities. These include (1) debt securities issued or guaranteed by the U.S. Government and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (2) debt securities, loans and commercial paper issued by U.S. and foreign companies; (3) U.S. and foreign mortgage-backed and asset-backed debt securities; (4) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; and (5) convertible bonds and preferred stock.

The Fund invests at least 65% of its total assets in investment grade debt securities. However, the Fund may invest up to 35% of its total assets in debt securities rated below investment grade (commonly called “junk bonds”). The overall average credit quality of the Fund will remain investment grade. Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

Under normal market conditions, the Fund invests at least 65% of its total assets in debt securities of issuers organized or headquartered in at least three countries, one of which may be the United States. The Fund may invest in debt securities of issuers organized or headquartered in emerging market countries.

The Fund invests in debt securities payable in U.S. dollars and in foreign currencies, and the Fund generally hedges most of its foreign currency exposure to the U.S. dollar.

The Fund invests in debt securities of any maturity. Maturity is the date when each bond or other debt security pays back its principal. Under normal market conditions, the Fund’s maximum average portfolio maturity (on a dollar-weighted basis) is four years.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Interest Rates. Because the Fund invests principally in debt securities, the income on and value of your shares in the Fund 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 market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.


52		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN GLOBAL LOW DURATION FUND (continued)

Liquidity Risk. Some investments may be difficult to purchase or sell, particularly during times of market instability. In addition, the Fund may not receive proceeds from the sale of certain securities for an extended period of time, which in some cases could exceed several weeks or longer. The Fund will not receive sales proceeds until settlement occurs, which may constrain the Fund’s ability to meet redemption requests or other obligations. Illiquid assets may also be difficult to value. If the Fund must sell illiquid assets to meet redemption requests or other cash needs, the Fund may be unable to sell such assets at an advantageous time or price or achieve its desired level of exposure to certain market segments. Liquidity risk may result from the lack of an active market, as well as the reduced number and capacity of traditional market participants to make a market in fixed income securities. Liquidity risk is likely to be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed income mutual funds are higher than normal.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		53

PAYDEN GLOBAL LOW DURATION FUND (continued)

of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.

Redemption Risk. The Fund may experience heavy redemptions that could cause the Fund to liquidate its assets at inopportune times or at a loss or depressed value, particularly during periods of declining or illiquid markets. Redemption risk is greater to the extent that the Fund has investors with large shareholdings, short investment horizons, or unpredictable cash flow needs. In addition, redemption risk is heightened during periods of overall market turmoil. The redemption by one or more large shareholders of their holdings in the Fund could adversely affect the Fund’s performance. If the Fund is forced to liquidate its assets under unfavorable conditions or at inopportune times, the value of the Fund’s shares may decline.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 2ndQ 2009 (3.54%), and the worst quarter was 3rdQ 2011 (–1.94%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Global Low Duration Fund
(formerly Payden Global Short Bond Fund)

Before Taxes		0.29	%		1.69	%		2.65	%

After Taxes on Distributions		–0.17	%		0.97	%		1.74	%

After Taxes on Distributions and Sale of Fund Shares		0.22	%		1.02	%		1.79	%
BofA Merrill Lynch 1-3 Year US Corporate & Government Index		0.67	%		1.04	%		2.75	%

(The returns for the index are before any deduction for taxes, fees or expenses.)


54		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN GLOBAL LOW DURATION FUND (continued)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	5,000	$	250

Tax-Sheltered	$	2,000	$	250

Electronic Investment

Set schedule	$	2,000	$	250

No set schedule	$	5,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		55

PAYDEN GLOBAL FIXED INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.30	%
Other Expenses	0.51	%
Acquired Fund Fees and Expenses	0.11	%
Total Annual Fund Operating Expenses¹	0.92	%
Fee Waiver or Expense Reimbursement²	0.11	%
Total Annual Fund Operating Expenses After Guaranteed Fee Waiver or Expense Reimbursement	0.81	%
One-year Fee Waiver or Expense Reimbursement³	0.05	%
Total Annual Fund Operating Expenses After Further One-Year Fee Waiver or Expense Reimbursement	0.76	%

Payden & Rygel (“Payden”) has contractually agreed that for so long as it is the investment adviser to the Fund, the Total Annual Fund Operating Expenses (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) will not exceed 0.70%.

Payden has contractually agreed to further waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Further One-Year Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.65%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (inclusive of Acquired Fund Fees and Expenses) (taking into account the one-year contractual fee waiver or expense reimbursement for the first year, and the guaranteed contractual fee waiver or expense reimbursement for the remaining time periods). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$78	$	254	$	445	$	997

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 44% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:


56		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN GLOBAL FIXED INCOME FUND (continued)

the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

The Fund invests in debt securities payable in U.S. dollars and in foreign currencies, and the Fund generally hedges most of its foreign currency exposure to the U.S. dollar.

The Fund invests in debt securities of any maturity, and there is no limit on the Fund’s minimum or maximum average portfolio maturity. Maturity is the date when each bond or other debt security pays back its principal. However, under normal market conditions, the Fund’s average portfolio maturity (on a dollar-weighted basis) will not exceed ten years.

The Fund may invest up to 10% of its total assets in equity securities of U.S. or foreign issuers.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		57

PAYDEN GLOBAL FIXED INCOME FUND (continued)

meet redemption requests or other cash needs, the Fund may be unable to sell illiquid securities at an advantageous time or price or achieve its desired level of exposure to certain market segments. Liquidity risk may result from the lack of an active market, as well as the reduced number and capacity of traditional market participants to make a market in fixed income securities. Liquidity risk is likely to be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed income mutual funds are higher than normal.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.


58		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN GLOBAL FIXED INCOME FUND (continued)

PAST FUND PERFORMANCE:

After-tax returns for the Fund are calculated using the highest individual Federal marginal income tax rates for each year and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. They also may not be relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plan or individual retirement accounts. The returns “After Taxes on Distributions and Sale of Fund Shares” may be higher than the other return figures because they include the effect of a tax benefit an investor may receive from the capital losses that may have been incurred by an investor in connection with the sale of Fund shares.

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 4thQ 2008 (4.42%), and the worst quarter was 2ndQ 2013 (–3.20%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Global Fixed Income Fund

Before Taxes		1.49	%		3.79	%		4.05	%

After Taxes on Distributions		0.43	%		2.25	%		2.65	%

After Taxes on Distributions and Sale of Fund Shares		1.07	%		2.31	%		2.76	%
Barclays Capital Global Aggregate Index Hedged		1.02	%		3.87	%		4.36	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Nigel Jenkins is a Managing Principal and portfolio manager. Mr. Jenkins has been with Payden since 2006. Natalie Trevithick, Chartered Financial Analyst (“CFA”), is a Senior Vice President and portfolio manager, Ms. Trevithick has been with Payden since 2012. Kristin Ceva, CFA, is a Managing Principal and portfolio manager. Ms. Ceva has been with Payden since 1998.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and additional investment amounts for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	5,000	$	250

Tax-Sheltered	$	2,000	$	250

Electronic Investment

Set schedule	$	2,000	$	250

No set schedule	$	5,000	$	250

Automatic Exchange		NA	$	250


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		59

PAYDEN GLOBAL FIXED INCOME FUND (continued)

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN EMERGING MARKETS BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.45	%
Other Expenses	0.31	%
Total Annual Fund Operating Expenses	0.76	%


1 Year	3 Years		5 Years		10 Years
$78	$	243	$	422	$	942

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 54% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

Under normal market conditions, the Fund invests at least 80% of its total assets in debt securities and similar debt instruments issued by governments, agencies and instrumentalities of emerging market countries (or economically linked with such securities), and other issuers organized, headquartered or principally located in emerging market countries. Generally, an “emerging market country” is any country which the International Monetary Fund, the World Bank, the International Finance Corporation, the United Nations or another third party organization defines as having an emerging or developing economy.

The Fund may invest up to 20% of its total assets in other debt securities and similar debt instruments, including those of issuers located in countries with developed securities markets.


60		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS BOND FUND (continued)

Under normal market conditions, the Fund may invest a substantial portion of its total assets in debt securities of issuers whose securities are rated below investment grade (commonly called “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that the Fund’s adviser, Payden & Rygel (“Payden”), determines to be of comparable quality.

The Fund invests a majority of its assets in debt securities payable in U.S. dollars, but will also invest in debt securities payable in foreign currencies.

Permitted investments also include currencies and derivative instruments (including, but not limited to, spot and currency contracts, futures, options and swaps) use to hedge or gain exposure to the securities markets of emerging market countries or currencies.

The Fund may invest up to 10% of its total assets in equity securities of U.S. or foreign issuers, and may use derivatives to gain exposure to such equity markets.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		61

PAYDEN EMERGING MARKETS BOND FUND (continued)

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.

Equity Securities. Investing in equity securities poses certain risks, including a sudden decline in a holding’s share price, or an overall decline in the stock market. The value of the Fund’s investment in any such securities will fluctuate on a day-to-day basis with movements in the stock market, as well as in response to the activities of individual companies whose equity securities the Fund owns. Moreover, purchasing stocks perceived to be undervalued brings additional risks. For example, the issuing company’s condition may worsen instead of improve, or the pace and extent of any improvement may be less than expected.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:


62		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS BOND FUND (continued)

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 3rdQ 2009 (12.39%), and the worst quarter was 2ndQ 2013 (–7.30%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Emerging Markets Bond Fund

Before Taxes		–0.84	%		4.12	%		6.10	%

After Taxes on Distributions		–2.98	%		1.80	%		4.02	%

After Taxes on Distributions and Sale of Fund Shares		–0.45	%		2.38	%		4.09	%
J.P. Morgan EMBI Global Diversified Index		1.18	%		5.36	%		6.85	%
(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Kristin Ceva, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Ms. Ceva has been with Payden since 1998. Arthur Hovsepian, CFA, is a Principal and portfolio manager. Mr. Hovsepian has been with Payden since 2004. Vladimir Milev, CFA, is a Senior Vice President and portfolio manager. Mr. Milev has been with Payden since 2003.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		63

PAYDEN EMERGING MARKETS BOND FUND (continued)

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN EMERGING MARKETS LOCAL BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.60	%
Other Expenses	0.38	%
Acquired Fund Fees and Expenses	0.02	%
Total Annual Fund Operating Expenses	1.00	%

Example of Fund Expenses. This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$102	$	318	$	552	$	1,225

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 106% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

Under normal market conditions, the Fund invests at least 80% of its total assets in a wide variety of Bonds. “Bonds” include (1) debt securities issued or guaranteed by the U.S. Government and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank), or credit-linked notes issued with respect to such securities and (2) debt securities and commercial paper issued by U.S. and foreign companies, or credit-linked notes issued with respect to such securities.

Under normal market conditions, the Fund invests at least 80% of its total assets in Emerging Market Investments. “Emerging Market Investments” include Bonds and other debt instruments and income-producing securities that are issued by governments, agencies and instrumentalities of emerging market countries and other issuers organized, headquartered or principally located in emerging market countries, or that are denominated in the local currency of an emerging market country (“Emerging Market Currency”), or whose performance is linked to an emerging market country’s currency, markets, economy or ability to repay loans. Generally, an “emerging market country” is any country which the International Monetary Fund, the World Bank, the International Finance Corporation, the United Nations or another third party organization defines as having an emerging or developing economy.

Emerging Market Investments also include Emerging Market Currencies and derivative instruments (including, but not limited to, spot and currency contracts, futures, options and swaps) used to hedge or gain exposure to the securities markets of emerging market countries or Emerging Market Currencies. The Fund may use derivatives to a significant extent, including in particular, currency contracts, futures, interest rate swaps and credit-linked notes.


64		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS LOCAL BOND FUND (continued)

Under normal market conditions, a significant portion of the Fund’s investments will be denominated in Emerging Market Currencies. However, Emerging Market Investments may be denominated in non-Emerging Market Currencies, including the U.S. dollar.

The Fund may invest up to 20% of its total assets in debt instruments and income-producing securities that are not Bonds, including for example loans made by U.S. and foreign companies.

The Fund may invest up to 20% of its total assets in Bonds and other debt instruments and income-producing securities other than Emerging Market Investments, including those of issuers located in countries with developed securities markets.

Under normal market conditions, the average portfolio duration of the Fund varies within two years (plus or minus) of the duration of the JPMorgan Government Bond Index-Emerging Markets Global Diversified Index (Unhedged), which as of February 19, 2016 was 4.78 years. Duration is a measure of the expected life of a fixed income security that is used to determine the sensitivity of a security’s price to changes in interest rates. For example, the impact of either an increase or a decrease in interest rates will be greater for a fund that has a longer duration than for a fund that has a shorter duration.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Interest Rates. As with most bond funds, the income on and value of your shares in the Fund 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 market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

Foreign Investments. Investing in foreign securities poses additional risks. The performance of foreign securities can be adversely affected by the different political, regulatory and economic environments in countries where the Fund invests, and fluctuations in foreign currency exchange rates may also adversely affect the value of foreign securities. The value of the Fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable or unsuccessful government actions, reduction of government or central bank support and political or financial instability. Lack of information may also affect the value, volatility and liquidity of these securities.

Emerging Markets. The risks of foreign investing are heightened for securities of issuers in emerging market countries. Emerging market countries tend to have economic structures that are less diverse and mature, and political systems that are less stable, than those of developed countries. In addition to all of the risks of investing in foreign developed markets, emerging markets are more susceptible to governmental interference, local taxes being imposed on foreign investments, restrictions on gaining access to sales proceeds, and less liquid and efficient trading markets.

Local Currency. Because the Fund’s emphasis will be on investing in securities denominated in the currencies of emerging market countries, the Fund is subject to the significant risk that it could experience losses based solely on the weakness of foreign currencies versus the U.S. dollar and changes in the exchange rates between such currencies and the U.S. dollar.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		65

PAYDEN EMERGING MARKETS LOCAL BOND FUND (continued)

worsen or spread. The U.S. Government and the Federal Reserve, as well as certain foreign governments and central banks, have taken steps to support financial markets, including by keeping interest rates at historically low levels. This and other government intervention may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. The Federal Reserve recently has reduced its market support activities. Further reduction or withdrawal of Federal Reserve or other U.S. or non-U.S. governmental or central bank support, including interest rate increases, could negatively affect the financial markets generally, increase market volatility and reduce the value and liquidity of certain securities held by the Fund.

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment. As noted above in the Principal Investment Strategies discussion, the Fund expects in particular to use interest rate swaps. A principal risk of interest rate swaps is that the Fund’s investment adviser could incorrectly forecast interest rates.

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 more significantly in periods of general economic difficulty.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

Non-Diversification. The Fund is “non-diversified,” which means that compared with diversified funds, the Fund may invest a greater percentage of its assets in a particular issuer. Accordingly, events that affect a few — or even one — of the Fund’s investments may have a greater impact on the value of the Fund’s shares than they would if the Fund were diversified.


66		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS LOCAL BOND FUND (continued)

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the four-year period, the Fund’s best quarter was 1stQ 2012 (8.01%), and the worst quarter was 3rdQ 2013 (–9.98%).


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/2/11)
Payden Emerging Markets Local Bond Fund

Before Taxes		–14.79	%		–5.56	%

After Taxes on Distributions		–14.79	%		–6.32	%

After Taxes on Distributions and Sale of Fund Shares		–6.47	%		–3.74	%
J.P. Morgan GBI-EM Diversified Index		–14.92	%		–4.63	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Kristin Ceva, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Ms. Ceva has been with Payden since 1998. Arthur Hovsepian, CFA, is a Principal and portfolio manager. Mr. Hovsepian has been with Payden since 2004. Darren Capeloto is a Senior Vice President and portfolio manager. Mr. Capeloto has been with Payden since 2001.

PURCHASE AND SALE OF FUND SHARES:


Account Type	Initial Investment		Additional Investment

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		67

PAYDEN EMERGING MARKETS LOCAL BOND FUND (continued)

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

PAYDEN EMERGING MARKETS CORPORATE BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.80	%
Other Expenses	0.53	%
Total Annual Fund Operating Expenses	1.33	%
Fee Waiver or Expense Reimbursement¹	0.38	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.95	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.95%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


1 Year	3 Years		5 Years		10 Years
$97	$	384	$	692	$	1,568

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 93% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:


68		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)

Under normal market conditions, the Fund invests at least 80% of its total assets in corporate bonds issued by Corporate issuers (as defined below) organized or headquartered in emerging market countries, or whose business operations are principally located in emerging market countries. Generally, an “emerging market country” is any country which the International Monetary Fund, the World Bank, the International Finance Corporation, the United Nations or another third party organization defines as having an emerging or developing economy. A Corporate issuer is an issuer located in an emerging market country or an issuer deriving at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed in one or more emerging markets countries or that has at least 50% of its assets in one or more emerging market countries. For these purposes, Corporate issuers may include corporate or other business entities in which a sovereign or governmental agency or entity may have, indirectly or directly, an interest, including a majority or greater ownership interest.

The Fund may invest up to 20% of its total assets in other debt securities and similar debt instruments, including those of issuers located in countries with developed securities markets.

Under normal market conditions, the Fund invests a substantial portion of its total assets in debt securities of issuers whose securities are rated below investment grade (commonly called “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are securities that Payden determines to be of comparable quality.

The Fund invests a majority of its assets in debt securities payable in U.S. dollars, but will also invest in debt securities payable in foreign currencies. The Fund may hedge this foreign currency exposure to the U.S. dollar.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers, and may use derivatives to gain exposure to such equity markets.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		69

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)

susceptible to governmental interference, local taxes being imposed on foreign investments, restrictions on gaining access to sales proceeds, and less liquid and efficient trading markets.

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.


70		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the two-year period, the Fund’s best quarter was 2ndQ 2014 (3.69%), and the worst quarter was 3rdQ 2015 (–3.21%).


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/11/13)
Payden Emerging Markets Corporate Fund

Before Taxes		–0.86	%		2.27	%

After Taxes on Distributions		–2.70	%		0.03	%

After Taxes on Distributions and Sale of Fund Shares		–0.47	%		0.71	%

JP Morgan CEMBI Diversified Index		1.30	%		–3.30	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Kristin Ceva, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Ms. Ceva has been with Payden since 1998. Natalie Trevithick, CFA, is a Senior Vice President and portfolio manager. Ms. Trevithick has been with Payden since 2012. Vladimir Milev, CFA, is a Senior Vice President and portfolio manager. Mr. Milev has been with Payden since 2003.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		71

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

U.S. EQUITY FUND

PAYDEN EQUITY INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks growth of capital and some current income.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.50	%
Other Expenses	0.30	%
Total Annual Fund Operating Expenses	0.80	%


1 Year	3 Years		5 Years		10 Years
$82	$	255	$	444	$	990


72		FUND SUMMARIES – U.S. EQUITY FUND		Payden Mutual Funds

PAYDEN EQUITY INCOME FUND (continued)

These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 48% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests primarily in large capitalization value stocks, defined as stocks with above average dividend yields and large market capitalizations, and other income producing equity securities, including by way of example, exchange-traded common and preferred stocks, real estate investment trusts and master limited partnerships. Payden uses quantitative techniques to identify large capitalization stocks with above average dividend yields. Fundamental analysis is then performed to identify individual companies capable of maintaining or increasing their dividend. The Fund’s benchmark is the Russell 1000 Value Index. However, the Fund’s investments include only a limited portion of the common stocks included in the benchmark and also include income producing equity securities that are not included in the benchmark. In addition, the Fund will seek to provide a higher level of current income than the benchmark.

The Fund invests principally in U.S. securities, but may invest up to 30% of its total assets in foreign securities, including companies organized or headquartered in emerging markets. The Fund may invest in foreign securities either directly or through American Depositary Receipts on U.S. exchanges.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Fund versus Index Fund. The Fund is not an index fund, as indicated above, and is managed in ways that diverge from the benchmark. Thus, changes in the Fund’s net asset value per share will not track changes in the general stock market or the Fund’s benchmark.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:


Prospectus		FUND SUMMARIES – U.S. EQUITY FUND		73

PAYDEN EQUITY INCOME FUND (continued)

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the ten-year period, the Fund’s best quarter was 3rdQ 2009 (16.02%), and the worst quarter was 4thQ 2008 (–22.56%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			10 Years
Payden Equity Income Fund

Before Taxes		1.75	%		12.43	%		5.92	%

After Taxes on Distributions		1.14	%		11.18	%		5.10	%

After Taxes on Distributions and Sale of Fund Shares		1.47	%		9.68	%		4.63	%

Russell 1000 Value Index		–3.82	%		11.26	%		6.15	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. James Wong, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Mr. Wong has been with Payden since 1995. Frank Lee, CFA, is a Senior Vice President and portfolio manager. Mr. Lee has been with Payden since 2004.

PURCHASE AND SALE OF FUND SHARES:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT

Regular	$	100,000	$	250

Tax-Sheltered	$	100,000	$	250

Electronic Investment

Set schedule	$	100,000	$	250

No set schedule	$	100,000	$	250

Automatic Exchange		NA	$	250

TAX INFORMATION:

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:


74		MORE ABOUT INVESTMENT STRATEGIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS		Payden Mutual Funds

You have just read the Fund Summary for each Fund. Each Fund Summary sets forth the Fund’s Investment Objective, as well as its Principal Investment Strategies and Principal Investment Risks, and discusses the types of securities and investment techniques used in implementing the Fund’s Principal Investment Strategies.

This section of the Prospectus provides further discussion on some of those securities and investment techniques, as well as discussing other securities and investment techniques that may be applicable to some or all of the Funds.

In addition, this section discusses the policies on the disclosure of each Fund’s portfolio holdings.

Finally, neither the Fund Summaries, this section of the Prospectus nor the Statement of Additional Information is intended to give rise to any contract rights or other rights in any shareholder, other than any rights conferred explicitly by federal or state securities laws that may not be waived.

INFLATION-INDEXED SECURITIES

Each U.S. Bond Fund, the Payden Floating Rate Fund, the Tax Exempt Bond Fund and each Global Bond Fund may invest in inflation-indexed securities. Unlike a conventional bond, on which the issuer makes regular fixed interest payments and repays the face value of the bond at maturity, an inflation-indexed security provides principal and interest payments that are adjusted over time to reflect inflation — a rise in the general price level. Inflation-indexed securities are designed to provide a “real rate of return” — a return after adjusting for the impact of inflation, which erodes the purchasing power of an investor’s portfolio. This adjustment is a key feature, although during a period of deflation principal and interest payments on inflation-indexed securities will be adjusted downward, and an investing Fund will be subject to deflation risk with respect to these investments. The price of inflation-indexed securities is affected by fluctuations in “real” interest rates (the component of interest rates not tied to investor expectations of future inflation). A rise in real interest rates will generally cause the price of an inflation-indexed security to fall, while a decline in real interest rates will generally increase the price of an inflation-indexed security.

MORTGAGE-BACKED SECURITIES

Each U.S. Bond Fund, the Payden Floating Rate Fund, the Tax Exempt Bond Fund and each Global Bond Fund may invest in obligations issued to provide financing for U.S. residential housing and commercial mortgages. Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), the Payden Floating Rate Fund and each Global Bond Fund may also invest in foreign mortgage-related securities. On the credit side, the market’s perception of the creditworthiness of the Federal agency or private entity issuing the obligation, or of the credit quality of the underlying assets, for example the sub-prime segment of the mortgage-backed securities market, may have a negative impact on the value of the obligation. Further, certain commercial mortgage-backed securities are issued in several classes with different levels of yield and credit protection. An investment in the lower classes of a commercial mortgage-backed security with several classes will have greater risks than an investment in the higher classes, including greater interest rate, credit and prepayment risks. With respect to prepayment risk, payments made on the underlying mortgages and passed through to an investing Fund represent both regularly scheduled principal and interest payments, as well as prepayments of principal. Mortgage-backed securities may be prepaid prior to maturity, and hence the actual life of the security cannot be accurately predicted. During periods of falling interest rates, prepayments may accelerate, which would require an investing Fund to reinvest the proceeds at a lower interest rate. During periods of rising interest rates, prepayments may occur more slowly than anticipated, extending the effective duration of these assets at below market interest rates and causing their market prices to decline more than they would have declined due to the rise in interest rates alone. Although generally rated investment grade, the securities could become illiquid or experience losses if the mortgages default or if guarantors or insurers default.

ASSET-BACKED SECURITIES

Each U.S. Bond Fund, the Payden Floating Rate Fund, the Tax Exempt Bond Fund and each Global Bond Fund may invest in U.S. asset-backed securities, which represent undivided fractional interests in trusts with assets consisting of a pool of loans such as motor vehicle retail installment sales contracts or credit card receivables. Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), the Payden Floating Rate Fund and each Global Bond Fund may also invest in foreign asset-backed securities. The credit quality of most asset-backed securities depends primarily on the credit quality of the assets underlying such securities, how well the entity issuing the security is insulated from the credit risk of the originator of the debt obligations or any other affiliated entities and the amount and quality of any credit support provided to the securities. In addition, certain asset-backed securities are based on loans that are unsecured, which means that there is no collateral to seize if the underlying borrower defaults. With respect to prepayment risk, payments by these securities are typically made monthly, consisting of both principal and interest payments. Asset-backed securities may be prepaid prior to maturity, and hence the actual life of the security cannot be accurately predicted. During periods of falling interest rates, prepayments may accelerate, which would require an investing Fund to reinvest the proceeds at a lower interest rate. During periods of rising interest rates, prepayments may occur more slowly than anticipated, extending the effective duration of these assets at below market interest rates and causing their market prices to decline more than they would have declined due to the rise in interest rates alone. Although generally rated investment grade, the securities could become illiquid or experience losses if the loans default or if guarantors or insurers default.


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U.S. GOVERNMENT AND AGENCY SECURITIES

Most of the Funds purchase debt obligations issued by the U.S. Treasury, which are backed by the full faith and credit of the U.S. Government. These securities include U.S. Treasury bills, notes and bonds. In addition, many of the Funds purchase debt obligations, commonly called U.S. Government agency securities, which are issued by agencies chartered by the U.S. Government. These issuers are generally classified as government-sponsored enterprises and are often referred to as “GSEs.” Securities issued by GSEs receive various levels of support from the U.S. Government, which may affect a Fund’s ability to recover should such securities default. The Funds primarily invest in securities issued by one or more of the following GSEs:

The Government National Mortgage Association (GNMA) issues mortgage-backed securities that are collateralized by home loans. Principal and interest payments of GNMA securities are backed by the full faith and credit of the U.S. Government; however, this support does not apply to losses resulting from declines in the market value of GNMA securities.

Each of the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) issue debt obligations in order to purchase home mortgages. Both agencies package a portion of these mortgages into mortgage-backed securities that are sold to investors such as the Funds. These securities are not backed by the full faith and credit of the U.S. Government. However, both FNMA and FHLMC benefit from a contractual agreement with the U.S. Treasury (the Senior Preferred Stock Purchase Agreement), as discussed below.

On September 6, 2008, the Federal Housing Finance Agency (FHFA) placed FNMA and FHLMC into conservatorship. As the conservator, FHFA succeeded to all rights, titles, powers and privileges of FNMA and FHLMC and of any stockholder, officer or director of FNMA and FHLMC with respect to FNMA and FHLMC and the assets of FNMA and FHLMC.

In connection with the conservatorship, the U.S. Treasury entered into a Senior Preferred Stock Purchase Agreement with each of FNMA and FHLMC. The Senior Preferred Stock Purchase Agreement is expected to provide FNMA and FHLMC with the necessary cash resources to meet their obligations.

FNMA and FHLMC are continuing to operate as going concerns while in conservatorship and each remain liable for all of its obligations, including its guaranty obligations, associated with its mortgage-backed securities. Although the U.S. Government has provided financial support to FNMA and FHLMC in the past (including as part of the Senior Preferred Stock Purchase Agreements), no assurance can be given that the U.S. Government will provide financial support in the future to these or other U.S. Government agencies, authorities or instrumentalities that are not supported by the full faith and credit of the United States.

The FHFA’s continuing conservatorship of FNMA and FHLMC and its ultimate resolution may adversely affect the real estate market, the value of real estate-related assets generally and markets generally. In addition, there may be proposals from the U.S. Congress or other branches of the U.S. Government regarding the conservatorship, including regarding reforming FNMA and FHLMC or winding down their operations, which may or may not come to fruition. There can be no assurance that such proposals, even those that are not adopted, will not adversely affect the values of the Funds’ assets.

The Federal Home Loan Bank System (FHLB) is comprised of twelve regional banks that provide liquidity and credit to thrift institutions, credit unions and commercial banks. FHLB issues debt obligations to fund its operations. These debt obligations are not backed by the full faith and credit of the U.S. Government.

The Federal Farm Credit Bank System (FFCB) is comprised of cooperatively owned lending institutions that provide credit to farmers and farm-affiliated businesses. FFCB issues debt obligations to fund its operations. These debt obligations are not backed by the full faith and credit of the U.S. Government, nor can FFCB borrow from the U.S. Treasury.

SENIOR LOANS

Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), each Global Bond Fund and, in particular, the Payden Floating Rate Fund may invest in senior floating rate loans of domestic and foreign borrowers (“Senior Loans”). There is less readily available, reliable information about most Senior Loans than is the case for many other types of securities. Due to restrictions on transfers in loan agreements and the nature of the private syndication of Senior Loans including, for example, the lack of publicly-available information, some Senior Loans are not as easily purchased or sold as publicly-traded securities. Opportunities to invest in loans or certain types of loans, such as Senior Loans, may be limited. In addition, there is no minimum rating or other independent evaluation of a borrower or its securities limiting a Fund’s investments, and Payden relies primarily on its own evaluation of a borrower’s credit quality rather than on any available independent sources. As a result, each Fund is particularly dependent on the analytical abilities of Payden.

Leading financial institutions often act as agent for a broader group of lenders, generally referred to as a syndicate. The syndicate’s agent arranges the Senior Loans and other corporate loans, holds collateral and accepts payments of principal and interest. If the agent develops financial problems, a Fund may not recover its investment or recovery may be delayed. By investing in Senior Loans and other corporate loans, a Fund may become a member of the syndicate. The Senior Loans and other corporate loans in which a Fund invests are subject to the risk of loss of principal and income.


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Loan do not require the borrower to pledge additional collateral in the event of a decline in the value of the already pledged collateral, a Fund will be exposed to the risk that the value of the collateral will not at all times equal or exceed the amount of the borrower’s obligations under the Senior Loans. To the extent that a Senior Loan is collateralized by stock in the borrower or its subsidiaries, such stock may lose all of its value in the event of the bankruptcy of the borrower. Uncollateralized Senior Loans involve a greater risk of loss. Some Senior Loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate the Senior Loans to presently existing or future indebtedness of the borrower or take other action detrimental to lenders, including a Fund. Such court action could under certain circumstances include invalidation of Senior Loans. Transactions in Senior Loans and other loans in which a Fund may invest may settle on a delayed basis (which in some cases may be several weeks or longer). As a result, the proceeds from the sale of a loan may not be immediately available to make additional investments or to meet a Fund’s redemption obligations. Senior Loans and other loans may not be considered “securities” for certain purposes, and purchasers (such as the Fund) therefore may not be entitled to rely on the anti-fraud protections and other safeguards provided by U.S. federal securities laws.

LOAN PARTICIPATIONS AND ASSIGNMENTS

Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), the Payden Floating Rate Fund and each Global Bond Fund may invest in fixed-rate and floating-rate loans, which investments generally will be in the form of loan participations and assignments of portions of such loans. Participations and assignments involve special types of risk, including credit risk, interest rate risk, liquidity risk and risks of being a lender. If an investing Fund purchases a participation, it may only be able to enforce its rights through the lender, and may assume the credit risk of the lender in addition to the borrower.

EXCHANGE-TRADED FUNDS

Each Fund, other than the Payden Cash Reserves Money Market Fund, may invest in exchange-traded funds (“ETFs”) and other broad market derivative instruments, subject to limitations in amount set forth in regulations under the Investment Company Act of 1940, as amended. These limitations are described under “Investments in Exchange-Traded Funds” in the section on “Investment Strategies/Techniques and Related Risks” in the Statement of Additional Information, a copy of which is available, free of charge, on the Funds’ Internet site at payden.com.

ETFs are shares of a portfolio designed to track closely the performance of any one or an array of market indexes. Examples include the S&P 500 Index and the MSCI Europe Index. ETFs trade on the Chicago Board Options Exchange, Nasdaq and the New York Stock Exchange in the same way shares of publicly held companies trade on such exchanges. They may be traded any time during normal trading hours, using all of the portfolio management approaches associated with stocks, e.g., market orders, limit orders, or stop orders. They are also subject to the risks of trading halts due to market conditions or other reasons. In addition, investment in an ETF by a Fund will involve duplication of expenses, as it will require payment by the Fund of its pro rata share of advisory and administrative fees charged by the ETF.

BELOW INVESTMENT GRADE DEBT OBLIGATIONS

Each Global Bond Fund and each of the Payden Limited Maturity, Payden Low Duration, Payden Corporate Bond, Payden Floating Rate, and in particular, the Payden High Income Funds may invest in below investment grade debt obligations (commonly called “high yield bonds” or “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB–), Moody’s (at least Baa3) or Fitch (at least BBB–), or are securities determined by Payden to be of comparable quality. Further information regarding investment ratings is in Appendix A.

High yield bonds are generally more speculative, more volatile and less liquid than investment grade debt securities. Changes in economic conditions or developments regarding the individual issuer are more likely to cause price volatility and weaken the capacity of such securities to make principal and interest payments than is the case for higher grade debt securities. The value of lower-quality debt securities often fluctuates in response to company, political, or economic developments and can decline significantly over short as well as long periods of time or during periods of general or regional economic difficulty. In particular, lower quality debt securities may decline significantly in periods of general economic difficulty or rising interest rates. High Yield bonds may also be less liquid than investment grade debt securities, which means a Fund may have difficulty selling such securities and may have to apply a greater degree of judgment in establishing a price for purposes of valuing an investing Fund’s shares. High yield bonds generally are issued by less creditworthy issuers, who may have a larger amount of outstanding debt relative to their assets than issuers of investment grade bonds. In the event of an issuer’s bankruptcy, claims of other creditors may have priority over the claims of high yield bond holders, leaving few or no assets available to repay high yield bond holders. A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting issuer. High yield bonds frequently have redemption features that permit an issuer to repurchase the security from its holder before it matures. If the issuer redeems high yield bonds, an investing Fund may have to invest the proceeds in bonds with lower yields.

FOREIGN INVESTMENTS

Each U.S. Bond Fund (except the Payden GNMA and Payden U.S. Government Funds), the Payden Floating Rate Fund, each Global Bond Fund and the Payden Equity Income Fund may invest in securities of foreign issuers (“foreign securities”). Investing in foreign securities involves certain risks and considerations not typically associated with investing in U.S. securities, including less publicly available information and less governmental regulation and supervision of foreign stock exchanges, brokers and issuers.


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Foreign issuers are not usually subject to uniform accounting, auditing and financial reporting standards, practices and requirements. Foreign issuers are subject to the possibility of expropriation, nationalization, confiscatory taxation, adverse changes in investment or exchange control regulation, political instability and restrictions in the flow of international capital. Some foreign securities are less liquid and have more volatile prices than U.S. securities. In addition, settling transactions in foreign securities may take longer than U.S. securities. Obtaining and enforcing judgments against foreign entities may be more difficult than obtaining and enforcing judgments against domestic entities.

Changes in foreign exchange rates may adversely affect the value of a Fund’s securities. Fluctuations in foreign currency exchange rates will also affect the value of dividends and interest earned, gains and losses realized on the sale of securities and any net investment income and gains distributed to shareholders. Some foreign fixed income markets offering attractive returns may be denominated in currencies which are relatively weak or potentially volatile compared to the U.S. dollar.

FOREIGN CURRENCY TRANSACTIONS

Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), the Payden Floating Rate Fund, each Global Bond Fund and the Payden Equity Income Fund normally conducts its foreign currency exchange transactions either on a spot (cash) basis at the spot rate prevailing in the foreign currencies, or on a forward basis (contracts to purchase or sell a specified currency at a specified future date and price). None of these Funds will generally enter into a forward contract with a term of greater than one year. Although forward contracts are used primarily to protect a Fund from adverse currency movements, they may also be used to increase exposure to a currency, and involve the risk that anticipated currency movements will not be accurately predicted and a Fund’s total return will be adversely affected as a result. Open positions in forward contracts are covered by the segregation with the Fund’s custodian of cash, U.S. Government securities or other debt obligations and are marked-to-market daily.

EMERGING MARKETS

Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), each Global Bond Fund and the Payden Equity Income Fund may invest in securities of issuers organized or headquartered in emerging market countries. Foreign investment risks, including those described above, are generally greater for securities of such companies. These countries may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities, making trades difficult. Brokerage commissions, custodial services and other similar investment costs are generally more expensive than in the United States. In addition, securities of issuers located in these countries tend to have volatile prices and may offer significant potential for loss as well as gain. Rising interest rates could negatively impact the value of emerging market debt and increase funding costs for foreign issuers. In such a scenario, foreign issuers might not be able to service their debt obligations and the market for emerging market debt could suffer from reduced liquidity.

DEPOSITARY RECEIPTS

The Payden Equity Income Fund may invest in depositary receipts. American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”) and Global Depositary Receipts (“GDRs”) are used to invest in foreign issuers. Generally, an ADR is a dollar-denominated security issued by a U.S. bank or trust company, which represents, and may be converted into, the underlying security that is issued by a foreign company. Generally, EDRs and GDRs represent similar securities, but are issued by European banks and depositories, respectively. ADRs, EDRs and GDRs may be denominated in a currency different from that of the underlying securities into which they may be converted. Typically, ADRs, in registered form, are designed for issuance in U.S. securities markets, and EDRs, in bearer form, are designed for issuance in European securities markets. ADRs may be sponsored by the foreign issuer or may be unsponsored. Unsponsored ADRs are organized independently and without the cooperation of the foreign issuer of the underlying securities. As a result, available information regarding the issuer may not be as current as for sponsored ADRs, and the prices of unsponsored ADRs may be more volatile than if they were sponsored by the issuers of the underlying securities.

DELAYED DELIVERY TRANSACTIONS

Each Fund may engage in delayed delivery transactions. These transactions involve a Fund’s commitment to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place more than seven days in the future, or after a period longer than the customary settlement period for that type of security. When delayed delivery purchases are outstanding, a Fund will set aside and maintain until the settlement date in a segregated account cash, U.S. Government securities or high grade debt obligations in an amount sufficient to meet the purchase price. When purchasing a security on a delayed delivery basis, a Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its net asset value, but does not accrue income on the security until delivery. When a Fund sells a security on a delayed delivery basis, it does not participate in future gains or losses with respect to the security. If the other party to a delayed delivery transaction fails to deliver or pay for the securities, a Fund could miss a favorable price or yield opportunity or could suffer a loss. As a matter of operating policy, a Fund will not invest more than 50% of its total assets in when-issued and delayed delivery transactions.


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DERIVATIVE INSTRUMENTS

Each U.S. Bond Fund, the Payden Floating Rate Fund, the Tax Exempt Bond Fund, each Global Bond Fund and the Payden Equity Income Fund may use derivative instruments for risk management purposes or otherwise as part of its investment strategies. Generally, derivatives are financial contracts whose values depend on, or are derived from, the value of an underlying asset, reference rate or index, and may relate to stocks, bonds, interest rates, currencies or currency exchange rates, commodities, and related indexes. Examples of derivative instruments include options contracts, futures contracts, options on futures contracts and swap agreements (including, but not limited to, interest rate, total return and credit default swaps). Each such Fund may invest some or all of its assets in derivative instruments. Such Funds typically use derivatives as a substitute for taking a position in the underlying asset or as part of a strategy designed to reduce exposure to other risks, such as interest rate risk or currency risk. Such Funds may also use derivatives for leverage, in which case their use would involve leverage risk. A portfolio manager may decide not to employ any of these strategies and there is no assurance that any derivatives strategy used by such a Fund will succeed. A description of these and other derivative instruments that the Funds may use are described under “Derivative Instruments” in the section on “Investment Strategies/Techniques and Related Risks” in the Statement of Additional Information, a copy of which is available, free of charge, on the Funds’ Internet site at payden.com.

A Fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other more traditional investments. A description of various risks associated with particular derivative instruments is included in the Statement of Additional Information. The following provides a more general discussion of important risk factors relating to all derivative instruments that may be used by the Funds.

Management Risk. Derivative products are highly specialized instruments that require investment techniques and risk analyses different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument, but also of the derivative itself, without the benefit of observing the performance of the derivative under all possible market conditions.

Credit Risk. The use of a derivative instrument involves the risk that a loss may be sustained as a result of the failure of another party to the contract (usually referred to as a “counterparty”) to make required payments or otherwise comply with the contract’s terms. In addition, credit default swaps could result in losses if a Fund does not correctly evaluate the creditworthiness of the company on which the credit default swap is based. If a Fund sells credit default swaps, it will maintain sufficient liquidity to cover the entire notional amount of such swaps.

Liquidity Risk. Liquidity risk exists when a particular derivative instrument is difficult to purchase or sell. If a derivative transaction is particularly large or if the relevant market is illiquid (as is the case with many privately negotiated derivatives), it may not be possible to initiate a transaction or liquidate a position at an advantageous time or price.

Leverage Risk. Because many derivatives have a leverage component, adverse changes in the value or level of the underlying asset, reference rate or index can result in a loss substantially greater than the amount invested in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When a Fund uses derivatives for leverage, investments in that Fund will tend to be more volatile, resulting in larger gains or losses in response to market changes. To limit leverage risk, each Fund will segregate assets determined to be liquid by Payden in accordance with established procedures, or, as permitted by applicable regulation, enter into certain offsetting positions, to cover its obligations under derivative instruments.

Lack of Availability. Because the markets for certain derivative instruments (including markets located in foreign countries) are relatively new and still developing, suitable derivatives transactions may not be available in all circumstances for risk management or other purposes. Upon the expiration of a particular contract, the portfolio manager may wish to retain the Fund’s position in the derivative instrument by entering into a similar contract, but may be unable to do so if the counterparty to the original contract is unwilling to enter into the new contract and no other suitable counterparty can be found. A Fund’s ability to use derivatives may also be limited by certain regulatory and tax considerations.

Market and Other Risks. Like most other investments, derivative instruments are subject to the risk that the market value of the instrument will change in a way detrimental to a Fund’s interest. If a portfolio manager incorrectly forecasts the values of securities, currencies or interest rates or other economic factors in using derivatives for a Fund, the Fund might have been in a better position if it had not entered into the transaction at all. While some strategies involving derivative instruments can reduce the risk of loss, they can also reduce the opportunity for gain or even result in losses by offsetting favorable price movements in other Fund investments. A Fund may also have to buy or sell a security at a disadvantageous time or price because the Fund is legally required to maintain offsetting positions or asset coverage in connection with certain derivatives transactions.

Regulatory Risks. The U.S. Government and foreign governments are in the process of adopting and implementing regulations governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting requirements. The ultimate impact of the regulations remains unclear. Additional regulation of derivatives may make derivatives more costly, limit their availability or utility, otherwise adversely affect their performance or disrupt markets. Any such adverse future developments could impair the effectiveness of a Fund’s derivative transactions and cause the Fund to lose value.


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counterparties or a loss of value to a Fund. Also, the value of derivatives may not correlate perfectly, or at all, with the value of the assets, reference rates or indexes they are designed to closely track. In addition, a Fund’s use of derivatives may cause the Fund to realize higher amounts of short-term capital gains (taxed at ordinary income tax rates) than if the Fund had not used such instruments.

TEMPORARY DEFENSIVE MEASURES

During times when Payden believes that a temporary defensive posture is warranted, each Fund may hold part or all of its assets in cash, U.S. Government and Government agency securities, money market obligations, short-term corporate debt securities and money market funds, or may use futures to hedge the entire portfolio. This may help a Fund minimize or avoid losses during adverse market, economic or political conditions. However, during such a period, a Fund may not achieve its investment objective.

PORTFOLIO TURNOVER

A Fund’s annual turnover rate indicates changes in its portfolio investments. Payden will sell a security when appropriate and consistent with a Fund’s investment objective and policies, regardless of the effect on the Fund’s portfolio turnover rate. Buying and selling securities generally involves some expense to the Funds, such as broker commissions and other transaction costs, and a high turnover rate in any year will result in payment by a Fund of above-average transaction costs and could result in the payment by shareholders of above-average amounts of taxes on realized investment gains. No Fund can accurately predict its future annual portfolio turnover rate. It can vary substantially from year to year since portfolio adjustments are made when conditions affecting relevant markets, particular industries or individual issues warrant such action. In addition, portfolio turnover may also be affected by sales of portfolio securities necessary to meet cash requirements for redemptions of shares. Each Fund’s annual portfolio turnover rates are noted in the Financial Highlights for that Fund in Appendix C.

DISCLOSURE OF FUND PORTFOLIO HOLDINGS

Each Fund makes available listings of its portfolio holdings pursuant to policies and procedures set forth under the heading “Disclosure of Fund Portfolio Holdings” in the Statement of Additional Information for the Funds, a copy of which is available, free of charge, on the Funds’ Internet site at payden.com.

OTHER INVESTMENTS AND TECHNIQUES

The Funds may invest in other types of securities and use a variety of investment techniques and strategies that are not described in this Prospectus. These securities and techniques may subject the Funds to additional risks. Please see the Statement of Additional Information for more information about the securities and investment techniques described in this Prospectus and about additional securities and techniques that may be used by the Funds.

MANAGEMENT OF THE FUNDS

Payden, located at 333 South Grand Avenue, Los Angeles, California 90071, serves as investment adviser to each of the seventeen Funds pursuant to an Investment Advisory Agreement. Payden is an investment counseling firm founded in 1983, and has approximately $95 billion of assets under management as of February 29, 2016.

Kristin Ceva is a Managing Principal who joined Payden in 1998 and has 24 years experience in the investment management business. Nigel Jenkins is a Managing Principal. He joined Payden in 2006 and has 27 years experience in the investment management business. Asha Joshi is a Managing Principal. She joined Payden in 1994 and has 31 years experience in the investment management business. Brian Matthews is a Managing Principal who joined Payden in 1986 and has 34 years experience in the investment management business. Joan Payden is the President, CEO and founder of Payden. She has over 40 years experience in the investment management business. Michael Salvay is a Managing Principal who joined Payden in 1997 and has 31 years experience in the investment management business. James Sarni is a Managing Principal. He joined Payden in 1991 and has 33 years experience in the investment management business. Mary Beth Syal is a Managing Principal who joined Payden in 1991 and has 31 years experience in the investment management business. Scott Weiner is a Managing Principal. He joined Payden in 1993 and has 32 years experience in the investment management business. Mr. Wong is a Managing Principal who joined Payden in 1995 and has 24 years experience in the investment management business.


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investment professionals who provide research support, make securities recommendations and generally support the portfolio managers in all activities. Members of a team may change from time to time, and the team leaders and senior investment personnel who are identified as the portfolio manager or managers for a Fund may also change from time to time. The current portfolio managers for each of the Funds are as follows:

Limited Maturity Fund, Low Duration Fund and Global Low Duration Fund. Mary Beth Syal, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. She has overall responsibility over the broad aspects of the Funds’ investments, and she and Eric Hovey, CFA, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Hovey has been with Payden since 2006 and in the investment management business for 14 years.

U.S. Government Fund and GNMA Fund. David Ballantine, CFA, a Principal and portfolio manager, and Gary Greenberg, CFA, a Senior Vice President and portfolio manager, have overall responsibility for the Funds’ investments, including portfolio construction, broad security selection and risk assessment. Mr. Ballantine has been with Payden since 1991 and in the investment management business for 27 years. Mr. Greenberg has been with Payden and in the investment management business for 21 years.

Core Bond Fund. Michael Salvay, CFA, is a Managing Principal and portfolio manager. He has overall responsibility over the broad aspects of the Fund’s investments, and he and Brad Boyd, CFA, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Boyd has been with Payden since 2002 and in the investment management business for 16 years.

Strategic Income Fund. Michael Salvay has overall responsibility over the broad aspects of the Fund’s investments, and he and Brad Boyd deal with portfolio construction, broad security selection and risk assessment.

Absolute Return Bond Fund. Brian Matthews, CFA, is a Managing Principal and portfolio manager. He has overall responsibility over the broad aspects of the Fund’s investments, and he and Brad Boyd deal with portfolio construction, broad security selection and risk assessment.

Corporate Bond Fund. Michael Salvay has overall responsibility over the broad aspects of the Fund’s investments, and he, James Wong, CFA, Managing Principal and portfolio manager, and Natalie Trevithick, CFA, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Ms. Trevithick has been with Payden since 2012 and in the investment management business for 15 years.

High Income Fund and Floating Rate Fund. Sabur Moini, a Principal and portfolio manager, has been with Payden since 2000 and in the investment management business for 23 years. He has overall responsibility over the broad aspects of the Fund’s investments, and he and Jordan Lopez, CFA, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Lopez has been with Payden and in the investment management business since 2004.

California Municipal Income Fund. Michael Salvay has overall responsibility over the broad aspects of the Fund’s investments, and supervises team members on portfolio construction, broad security selection and risk assessment.

Global Fixed Income Fund. Nigel Jenkins, a Managing Principal and portfolio manager, has overall responsibility for the Fund’s investments, and he, together with Kristen Ceva, CFA, a Managing Principal and portfolio manager, and Natalie Trevithick deal with portfolio construction, broad security selection and risk assessment.

Emerging Markets Bond Fund. Kristin Ceva has overall responsibility over the broad aspects of the Fund’s investments, and she, together with Arthur Hovsepian, CFA, Principal and portfolio manager, and Vladimir Milev, CFA, Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Hovsepian has been with Payden since 2004 and in the investment management business for 21 years. Mr. Milev has been with Payden and in the investment management business since 2003.

Emerging Markets Local Bond Fund. Kristin Ceva has overall responsibility over the broad aspects of the Fund’s investments, and she, together with Arthur Hovsepian and Darren Capeloto, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Capeloto has been with Payden since 2001 and in the investment management business for 20 years.

Emerging Markets Corporate Bond Fund. Kristin Ceva has overall responsibility over the broad aspects of the Fund’s investments, and she, together with Natalie Trevithick and Vladimir Milev, deal with portfolio construction, broad security selection and risk assessment.

Equity Income Fund. James Wong has overall responsibility over the broad aspects of the Fund’s investments, and he and Frank Lee, CFA, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Lee has been with Payden since 2004 and in the investment management business for 17 years.

With respect to the portfolio managers listed, the Statement of Additional Information under the section entitled “Portfolio Managers” provides additional information about the portfolio managers’ compensation structure, other accounts managed by the portfolio managers, and the ownership by the portfolio managers of shares in the Funds.

As indicated under the “Fees and Expenses” section of certain Fund presentations above, Payden has contractually agreed that, for so long as it acts as investment adviser to those particular Funds, the Total Annual Fund Operating Expenses (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) of each of those Funds will not exceed the percentage indicated of the particular Fund’s average daily net assets on an annualized basis. In addition, as indicated under the “Fees and Expenses” section of certain Fund presentations above, Payden has also contractually agreed to temporarily limit the Fund’s Total


Prospectus		MANAGEMENT OF THE FUNDS		81

Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) of each of those Funds to the percentage indicated of the Fund’s average daily net assets on an annualized basis. This Agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Board of Trustees of The Payden & Rygel Investment Group (the ‘‘P&R Trust’’). Each Fund remains liable to Payden for expenses subsidized in any fiscal year up to a maximum of three years from the end of the period in which the expenses were subsidized. However, for any Fund in any given year, the level of reimbursement cannot cause the Fund’s annual expense ratio to exceed the contractual expense limits discussed above.

For the fiscal year ended October 31, 2015, Payden earned a fee as a percentage of each Fund’s average net assets, net of expense reimbursements or fee waivers, from each Fund as follows: Payden Cash Reserves Money Market Fund, 0.00%; Payden Limited Maturity Fund, 0.00%; Payden Low Duration Fund, 0.18%; Payden U.S. Government Fund, 0.14%; Payden GNMA Fund, 0.10%; Payden Core Bond Fund, 0.28%; Payden Strategic Income Fund, 0.45%; Payden Absolute Return Bond Fund, 0.03%; Payden Corporate Bond Fund, 0.22%; Payden High Income Fund, 0.35%; Payden Floating Rate Fund, 0.46%; Payden California Municipal Income Fund, 0.17%; Payden Global Low Duration Fund, 0.16%; Payden Global Fixed Income Fund, 0.25%; Payden Emerging Markets Bond Fund, 0.45%; Payden Emerging Markets Local Bond Fund, 0.59%; Payden Emerging Markets Corporate Bond Fund, 0.42%, and Payden Equity Income Fund, 0.50%.

A discussion regarding the basis for the approval by the P&R Trust’s Board of Trustees of the Investment Advisory Agreement for each Fund is available in the Funds’ Annual Report for the fiscal year ended October 31, 2015, under the heading “Approval of Investment Advisory Agreement.” The Annual Report is available, free of charge, on the Funds’ Internet site at payden.com.

SHAREHOLDER INFORMATION

PRICING OF FUND SHARES: NET ASSET VALUE

The net asset value per share of each Fund, other than the Payden Cash Reserves Money Market Fund, is determined each day the New York Stock Exchange is open for trading as of the close of regular trading (normally 4:00 p.m. Eastern Time) by dividing the difference between the value of assets and liabilities of the Fund by the number of shares outstanding and rounding to the nearest penny.

Debt Securities. Domestic and foreign debt securities and other assets for which market quotations are readily available (other than obligations with original maturities of 60 days or less) are valued at market on the basis of quotes obtained from pricing services. If a Fund’s investment adviser determines that a pricing service does not provide accurate pricing for a fixed income security, the adviser may provide pricing information for that security. Such pricing information takes into account appropriate factors such as quotes obtained by brokers and dealers, institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Debt securities with original maturities of 60 days or less and securities in the Payden Cash Reserves Money Market Fund are valued at amortized cost, which approximates fair value.

Equity Securities. Publicly traded equity securities, whether in the United States or outside the United States, for which market quotations are readily available generally will be valued at the official closing price or the last sale price on the exchange or market where they are principally traded, or if there have been no sales during the day, at the last quote or last bid price. Securities traded only on the over-the-counter market are valued at the latest sale price.

Investment Company Securities. In valuing a Fund’s investment in another company that is (1) an investment company, or (2) would be an investment company but for the exceptions provided in the Investment Company Act (an “Acquired Fund”), the Fund uses the net asset value per share of the Acquired Fund.

Derivatives. Options, futures, swaps and other similar investments are valued at the official closing price in the case of exchange traded derivatives or on the basis of information provided by the institution with which a Fund entered into the transaction in the case of other securities.

Fair Value Pricing. Debt or equity securities for which market quotations are not readily available will be priced at their fair value as determined in good faith using procedures established pursuant to the Valuation and Liquidity Guidelines adopted by the Board of Trustees of the P&R Trust that are applicable to each of the Funds. In considering the fair value of a security, one or more factors are taken into consideration depending on the circumstances at the time, including for example: the cost of the security or the last reported sales price of the security as a starting point; changes in interest rates; changes in yield spreads of similarly rated or structured securities; fundamental analytical information relating to the security (such as price to earnings ratios for equity securities or yield to maturity ratio for debt securities); the value of other similar securities traded on other markets or among dealers; the general financial condition of the issuer; recent developments affecting the issuer; information, including price quotations, from other financial institutions or analysts; or government actions or pronouncements and other significant events affecting the economy, the markets, the fundamental value of the issuer or of the issuer’s industry.


82		SHAREHOLDER INFORMATION		Payden Mutual Funds

Fair value pricing may occur when (1) developments occur that will affect the value of a Fund’s holdings (“significant events”), and (2) those significant events occur after the close of the markets on which the securities trade, but before the time when the net asset value is computed for the Fund. A significant event may relate to a single issuer or an entire market. Examples include: inter-day market halts when no further trading in the securities occurs that day; other developments related to a particular issuer; or significant market fluctuations, natural disasters, armed conflicts or significant governmental actions.

With respect to events affecting individual issuers, the Valuation and Liquidity Guidelines provide that the analysts and portfolio managers for the Funds monitor the news for significant events on issuers whose securities exceed a certain weight in the Fund in question. If an issuer-specific event occurs that the analysts and portfolio managers believe will affect the Fund’s net asset value by more than a prescribed threshold, designated members of the Pricing Committee of the Board of Trustees of the P&R Trust determine based on the facts available (1) if the issuer’s securities will be subject to fair value pricing, and (2) if so, the fair value price of the securities based on one or more of the factors described above.

With respect to events affecting securities markets as a whole, the Valuation and Liquidity Guidelines provide that the analysts and portfolio managers for the Funds monitor the news for significant events related to U.S. securities markets that may generally affect foreign securities markets. If the broad-based U.S. benchmark moves by more than the designated amount between its close on the previous day and the day in question, then the designated members of the Pricing Committee of the Board of Trustees of the P&R Trust determine based on the facts available (1) whether one or more securities in a particular Fund portfolio will be subject to fair value pricing, and (2) if so, the fair value price of such securities.

Fair value pricing involves greater reliance on judgment than valuation of securities based on readily available market quotations. If a Fund uses fair value pricing to price securities it may value those securities higher or lower than another fund using market quotations or fair value to price the same securities. There can be no assurance that the Fund could obtain the fair value assigned to a security if it were to sell the security at approximately the time at which the Fund determines its net asset value.

Payden Cash Reserves Money Market Fund. The net asset value per share of the Payden Cash Reserves Money Market Fund is determined as of noon (Eastern Time), immediately after the daily declaration of dividends, by dividing the difference between the value of assets and liabilities of the Fund by the number of shares outstanding and rounding to the nearest penny. The securities in the Fund are valued on an amortized-cost basis. Under this method of valuation, a security is initially valued at its acquisition cost, and thereafter, amortization of any discount or premium is assumed each day, regardless of the impact of fluctuating interest rates on the market value of the instrument. Under most conditions, management believes it will be possible to maintain the net asset value of the Fund at $1.00 per share. Calculations are periodically made to compare the value of the Fund’s portfolio valued at amortized cost with market values. If a deviation of one-half of 1% or more were to occur between the net asset value calculated by reference to market values and the Fund’s $1.00 per share net asset value, or if there were any other deviation that the P&R Trust Board of Trustees believed would result in a material dilution to shareholders or purchasers, the Board of Trustees would promptly consider what action, if any, should be initiated.

HOW TO PURCHASE SHARES

You may purchase shares of each Fund based on the net asset value per share without a sales charge. You may open an account by completing a New Account Application and mailing it to the Funds’ address provided below. You cannot purchase shares until the Fund has received a completed application in which all required information has been provided. The Fund’s transfer agent (the “Transfer Agent”) is required by law to obtain certain personal information from you (or a person authorized to act on your behalf) in order to verify your (or such person’s) identity. If this information is not provided, the Transfer Agent may not be able to open your account. If the Transfer Agent is unable to verify your identity (or that of another person authorized to act on your behalf), or believes it has identified potentially criminal activity, the Fund and the Transfer Agent each reserves the right to decline to open your account, to close any existing account you may have, or to take such other action as they deem reasonable or required by law. Finally, the Fund does not accept cash, money orders, third party checks, traveler’s checks, credit card checks, checks drawn on banks outside the United States, or other checks deemed to be high risk.

To open a tax-sheltered retirement plan, such as an individual retirement account (“IRA”), you must complete special application forms. Please be sure to ask for an IRA information kit.

By Check

1. Complete the New Account Application.

2. Make the check payable to the “Payden Funds” and mail the check, along with the application, to:

Payden Mutual Funds

P.O. Box 1611

Milwaukee, WI 53201-1611


Prospectus		SHAREHOLDER INFORMATION		83

By Federal Funds Wire

1. Complete the New Account Application and mail it to:

Payden Mutual Funds

P.O. Box 1611

Milwaukee, WI 53201-1611

2. Wire funds to the Transfer Agent as follows when the application has been processed:

UMB Bank, N.A.

1010 Grand Blvd.

Kansas City, MO 64106

ABA 101000695

DDA 9871063062

Credit to: Payden Funds

For further credit to: Investor Mutual Fund Account Number

Name or Account Registration

Identify which Fund or Funds to Purchase

3. Please call 1-800-572-9336, to advise of any purchases by wire.

Your purchase will be based on the net asset value per share next determined after the Fund receives your order. It will accept purchase orders only on days on which the Fund is open for business.

All Funds are “open for business” on each day the New York Stock Exchange is open for trading. The New York Stock Exchange is closed on the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value of shares of a Fund with portfolio securities primarily listed on foreign exchanges may change on days when you cannot purchase or redeem such shares if the foreign exchange trades on weekends or other days when the Fund is not open for business.

Additional Investments. You may make additional investments at any time (1) by check; (2) by use of the Automated Clearing House System (“ACH”) (by calling 1-800-572-9336 or via the Funds’ Internet site at payden.com using the Account Access function (user registration required)); or (3) by calling 1-800-572-9336, and wiring Federal funds to the Transfer Agent as described above.

Purchases Through Brokers. The Funds have authorized one or more brokers to accept purchase orders on behalf of the Funds, and such brokers are authorized to designate intermediaries to accept purchase orders on behalf of the Funds. A Fund will be deemed to have received a purchase order when an authorized broker or broker-authorized designee accepts the order. A shareholder’s purchase order will be priced based on the Fund’s net asset value per share next computed after the order is accepted by an authorized broker or broker-authorized designee. The authorized broker or broker-authorized designee may charge the customer a transaction-based or other fee for handling the purchase or sale of shares, and additional conditions may apply.

Shareholder Servicing Plan. The P&R Trust has adopted a Shareholder Servicing Plan with respect to each Fund (other than the Payden Cash Reserves Money Market Fund), which provides for a fee payable to broker-dealers and other financial intermediaries for shareholder services provided to Fund shareholders who invest in that particular Fund through the intermediary. The fee is payable at an annual rate not to exceed 0.25% of the Fund’s average daily net assets invested through the intermediary. Because these fees are paid out of the particular Fund’s assets, over time these fees will increase the cost of your investment in that Fund.

Tax-sheltered Retirement Plans. Each of the Funds accepts purchases of shares by tax-sheltered retirement plans, such as IRAs, rollover IRAs, Roth IRAs, Keogh or corporate profit sharing plans, Simplified Employee Pension plans and 401(k) plans and Coverdell Education Savings Plans. Please call 1-800-572-9336 to receive a retirement package which includes a special application for tax-sheltered accounts. The Funds do not provide fiduciary administration or custody for such plans. The Funds charge an Annual IRA Maintenance Fee of $12.50 per Fund. The fee is capped at $25.00 per social security number, per account type. A maintenance fee of $12.50 will be charged on all Fund accounts where a full liquidation is made, unless you have already paid the Annual IRA Maintenance Fee for the year.

Exchange Privilege. Shares of any Fund may be exchanged for shares of any other Fund of the P&R Trust, provided that the minimum initial investment amount for the specific share class of the Fund has been met. Otherwise, the minimum amount for any exchange is $250. Because an exchange is considered a redemption and purchase of shares, you may realize a gain or loss for Federal income tax purposes.

In general, a Fund must receive written exchange instructions signed by all account owners. If you complete the telephone privilege authorization portion of the applicable New Account Application or applicable Account Privileges Change Form, you may make exchanges by calling 1-800-572-9336. You may also make exchanges via the Funds’ Internet site, at payden.com, using the Account Access function (user registration required). Finally, you may participate in the Automatic Exchange Program, described below under “Automated Investment Programs,” to automatically redeem a fixed amount from any Fund for investment in another


84		SHAREHOLDER INFORMATION		Payden Mutual Funds

Fund on a regular basis. Each Fund may modify or discontinue this exchange privilege at any time on 60 days notice. Each Fund also reserves the right to limit the number of exchanges you may make in any year to avoid excessive Fund expense.

Telephone Privilege. You may exchange or redeem shares by calling 1-800-572-9336, if you have elected this option on the applicable New Account Application, or if you complete the applicable Account Privileges Change Form. If you call on a business day before the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time), the exchange or redemption will be based on the net asset value per share determined that day; if you call on a business day after the close of regular trading on the New York Stock Exchange, the exchange or redemption will be based on the net asset value per share determined on the next business day. During periods of drastic economic or market changes, it may be hard to reach the Funds by telephone. If so, you should follow the other exchange and redemption procedures discussed in this Prospectus.

By electing the telephone privilege, you may be giving up some security. However, the Funds employ procedures designed to provide reasonable assurance that instructions communicated by telephone are genuine. Each Fund reserves the right to refuse a telephone exchange or redemption request if the Fund or its agents believes that the person making the request is not properly authorized. Neither the Funds nor their agents will be liable for any loss, liability or cost which results from acting upon instructions of a person reasonably believed to be a shareholder.

Automated Investment Programs. You may use two programs for automated investments in the Funds.

Electronic Investment Program. You may elect to make investments in any Fund using the ACH, which transfers money directly from your account at your financial institution to the Fund for investment. You have two investment options under this program. For either investment option, you must first meet the minimum initial investment amount, which may be made by check or wire; thereafter, additional investments through the ACH must be at least $250.

Under the first option, you may elect to make investments on a set schedule, either monthly or quarterly. Under this option, your financial institution will deduct a set amount that you authorize, which will normally be credited to the Fund on your choice of either the 1st or 15th day of the month (or next business day if the day you chose falls on a holiday or weekend day). Your financial institution will typically debit your account the prior business day.

Under the second option, you may also elect to authorize transfers through the ACH by calling 1-800-572-9336, or via the Funds’ Internet site at payden.com using the Account Access function (user registration required). Money will be withdrawn from your account at your financial institution only when you authorize it. If the Fund receives your telephone request or Internet request before the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time), the investment will be based on the net asset value per share determined that day. For telephonic requests or Internet requests received after the close of regular trading on the New York Stock Exchange, the investment will be based on the net asset value per share determined on the next business day.

Please note the following guidelines:

Your financial institution must be a member of the ACH.

You must complete and return an Account Privileges Change Form along with a voided check or deposit slip, and it must be received by the Fund at least 15 days before the initial transaction.

You must establish an account with the Fund before the Electronic Investment Plan goes into effect.

The Electronic Investment Plan will automatically terminate if all your shares are redeemed, or if your financial institution rejects the transfer for any reason, e.g., insufficient funds.

You can terminate your participation in the Electronic Investment Plan by writing to Payden Mutual Funds, P.O. Box 1611, Milwaukee, WI 53201-1611, or by phone, at 1-800-572-9336, and it will become effective the month following receipt.

Automatic Exchange Program. With respect to any Fund offered in this Prospectus, you may participate in the Automatic Exchange Plan to automatically redeem a fixed amount from one Fund for investment in another Fund on a regular basis. You can elect this option by completing the appropriate Automated Investment Programs form to determine the periodic schedule (monthly or quarterly) and exchange amount (minimum amount of $1,000, provided that the minimum initial investment amount has been met) and to identify the Funds. The automatic transfer is effected on your choice of either the 1st or 15th day of the month (or the next business day if the day you chose falls on a holiday or on a weekend).

Other Purchase Information. Each of the Funds issues full and fractional shares, but does not issue certificates. Some Funds may not be available in all jurisdictions. Each Fund reserves the right, in its sole discretion, to suspend the offering of its shares; to reject purchase orders when, in the judgment of its management, such suspension or rejection is in the best interest of the Fund; and to redeem shares if information provided in the New Account Application proves to be incorrect in any material manner.


Prospectus		SHAREHOLDER INFORMATION		85

Medallion Signature Guarantee — Account Changes and Redemptions. A Medallion Signature Guarantee assures a Fund that a signature is genuine. It is intended to protect shareholders and the Fund against fraudulent transactions by unauthorized persons. Medallion Signature Guarantees are required by each of the Funds in the following cases:

Account Changes (You must use the Account Privileges Change Form).

To add bank information to an existing account.

To change your existing bank account of record.

To add telephone privileges.

To change account name due to marriage or divorce (you can also provide a copy of the certified legal documents).

To change registered account holders.

Account Redemptions.

To request a redemption in excess of $100,000, which must be in writing.

To request a wire transfer of redemption proceeds to a bank account other than the bank account of record.

To request redemption proceeds to be mailed to an address other than the address of record.

To request redemption proceeds to be mailed to a person other than the record owner of the shares.

To request a redemption within 30 days of an address change.

On the IRA Transfer Form, if you are transferring your Payden Mutual Funds IRA to another fund family.

Certain transactions on accounts involving executors, administrators, trustees or guardians.

Each of the Funds reserves the right to require a Medallion Signature Guarantee under other circumstances.

How to Obtain a Medallion Signature Guarantee. Medallion Signature Guarantees must be obtained from a participant in a Medallion program endorsed by the Securities Transfer Association. Participants are typically commercial banks or trust companies in the United States, brokerage firms that are members of Financial Industry Regulatory Authority or members of the New York Stock Exchange. The Fund may reject a signature guarantee if it believes it is not genuine or if it believes the transaction is improper.

HOW TO REDEEM SHARES

Redemption requests by telephone or via the Internet may not exceed $100,000 per day. The Funds generally do not charge for redemptions. Fund shares you redeem may be worth more or less than your purchase price, depending on the market value of the investment securities held by the Fund at the time of redemption.

Send your redemption requests (1) in writing to Payden Mutual Funds, P.O. Box 1611, Milwaukee, WI 53201-1611, or if you have selected either of these options on your New Account Application; (2) by calling 1-800-572-9336; or (3) via the Funds’ Internet site at payden.com. The Fund will delay payment for redemption of recently purchased shares until the purchase check has been honored, which may take up to 15 days after receipt of the check. The redemption price will ordinarily be wired to your financial institution or mailed to your address of record one business day after we receive the request. The Fund may charge a $16.00 fee for any wire transfer, and payment by mail may take up to seven to ten days. During periods of drastic economic or market changes, it may be hard to reach the Fund by telephone. If so, you should follow the other exchange and redemption procedures discussed in this Prospectus.

One or more brokers have been authorized to accept redemption orders on behalf of the Funds, and such brokers are authorized to designate intermediaries to accept redemption orders on behalf of the Funds. A Fund will be deemed to have received a redemption order when an authorized broker or broker-authorized designee accepts the order. A shareholder’s redemption order will be priced based on the Fund’s net asset value per share next computed after the order is accepted by an authorized broker or broker-authorized designee. The authorized broker or broker-authorized designee may charge the customer a fee for handling the redemption order.

Each Fund reserves the right to pay any redemption price in whole or in part by a distribution in kind of securities held by the Fund in lieu of cash. While it is unlikely that shares would ever be redeemed in kind, if that does occur, the redeeming shareholder would incur transaction costs upon the disposition of the securities that the shareholder received in the distribution. In addition, under certain circumstances set forth in the Statement of Additional Information, each Fund reserves the right to fully redeem shares in any account, the value of which falls below $5,000 due to shareholder redemptions.

A Fund may suspend the right of redemption or postpone the payment date at times when the New York Stock Exchange is closed or during certain other periods as permitted under the Federal securities laws.

COST BASIS REPORTING

Federal tax law requires that regulated investment companies, such as the Fund, report their shareholders’ cost basis, gain/loss, and holding period to the IRS on the shareholders’ Consolidated Form 1099s when “covered” shares of the regulated investment companies are sold. Covered shares are any shares acquired (including pursuant to a dividend reinvestment plan) on or after January 1, 2012.


86		SHAREHOLDER INFORMATION		Payden Mutual Funds

The Fund has chosen “first-in, first-out” (“FIFO”) as its standing (default) tax lot identification method for all shareholders, which means this is the method the Fund will use to determine which specific shares are deemed to be sold when there are multiple purchases on different dates at differing net asset values and the entire position is not sold at one time. The Fund’s standing tax lot identification method is the method it will use to report the sale of covered shares on your Consolidated Form 1099 if you do not select a specific tax lot identification method.

Subject to certain limitations, you may choose a method other than the Fund’s standing method at the time of your purchase or upon the sale of covered shares. For all methods, except Specific Lot Identification, the Fund redeems noncovered shares first until they are depleted and then applies your elected method to your covered shares. Please refer to the appropriate Treasury regulations or consult your tax advisor with regard to your personal circumstances.

MARKET TIMING ACTIVITIES

Frequent purchases and redemptions of shares of any Fund by one or more Fund shareholders present various risks for other shareholders of the Fund, including dilution in the value of Fund shares held by long-term shareholders, disruption of the long-term focus of the Fund’s investment program and increased operating expenses, particularly brokerage and other administrative costs. In addition, there are risks specific to particular Funds. For those Funds that invest in overseas markets, there may be risks associated with time-zone arbitrage. For the Payden Equity Income Fund or certain fixed income Funds, such as the Payden High Income Fund or Payden Emerging Markets Bond Fund, with greater volatility, there may be risks associated with short-term trading designed to capitalize on significant changes in the Fund’s net asset value over short periods of time.

As a result, the Board of Trustees of the P&R Trust has adopted policies and procedures designed to discourage frequent trading of shares of any of the Funds by Fund shareholders. For each Fund, the Fund’s administrator (the “Administrator”) identifies frequent trading by examining the number of “round trips,” i.e., purchases and redemptions, which occur within a specific time period. The number of round trips and the length of the time period to be scanned to identify such frequent trading may differ by Fund based on Fund experience and expectations based on Fund investment guidelines. If a pattern of frequent trading is thus identified in your account, the Administrator then determines if the value of the trades is of a size sufficient to affect the level of the Fund’s operating expenses. If that is the case, you will then be sent a notice that future trading in your account may be restricted if the pattern of frequent trading persists. If the frequent trading pattern persists in your account without explanation or justification, the Fund will refuse any further purchase or exchange requests by you and will so notify you. It should be noted, however, that in certain circumstances it may not be practicable for the Fund to identify such market timing activities, such as redemptions of shares held in certain omnibus accounts or retirement plans since the Fund does not have the information on the individual transactions within the omnibus account or retirement plan.

None of the Funds has any arrangement with any Fund shareholder to accommodate frequent purchases and redemptions of the Fund’s shares. Finally, because it is not possible to identify and list all market timing abuses that may arise, you should know that each Fund reserves the right to reject a purchase or exchange request for any reason.

DIVIDENDS AND DISTRIBUTIONS

The Funds declare and distribute dividends to shareholders as follows: (1) monthly, for each of the Payden Core Bond, Payden Strategic Income, Payden Absolute Return Bond, Payden Corporate Bond, Payden High Income, Payden Floating Rate, Payden Global Low Duration, Payden Global Fixed Income, Payden Emerging Markets Bond, Payden Emerging Markets Local Bond and Payden Emerging Markets Corporate Bond Funds; (2) quarterly, for the Payden Equity Income Fund; and (3) each of the Payden Cash Reserves Money Market, Payden Limited Maturity, Payden Low Duration, Payden U.S. Government, Payden GNMA and Payden California Municipal Income Funds accrues and declares dividends daily and distributes them to shareholders monthly.

Each Fund distributes any net realized capital gains from the sale of portfolio securities at least once yearly. Each Fund pays dividend and capital gain distributions in the form of additional shares of the Fund at the net asset value per share on the ex-dividend date, unless you elect to receive them in cash by so indicating on the applicable New Account Application, or in writing to the Payden Mutual Funds, P.O. Box 1611, Milwaukee, WI 53201-1611, or by calling 1-800-572-9336.

TAX INFORMATION

Substantially all dividends paid by the Payden California Municipal Income Fund will be exempt from Federal income taxes; however, a portion of the dividends may be a tax preference for purposes of the alternative minimum tax. Dividends from the Payden California Municipal Income Fund may also be subject to state and local taxes. The Payden California Municipal Income Fund anticipates that the federally exempt interest dividends paid by the Fund and derived from interest on bonds exempt from California income tax will be exempt from California state income tax. To the extent the Payden California Municipal Income Fund’s dividends are derived from interest on debt obligations that is not exempt from California income tax, however, such dividends will be subject to state income tax. In addition, the amount of such dividends may be included in the measure of income tax on other items, including but not limited to social security benefits. Dividends are taxable to you whether received in cash or reinvested as additional shares. Dividends paid by the other Funds, and distributions paid by all Funds from long-term capital gains, are taxable to you. Any short-term capital gains or taxable interest income, therefore, will be taxable to you as ordinary income. The Funds may incur foreign income


Prospectus		SHAREHOLDER INFORMATION		87

taxes in connection with some of their foreign investments, and may credit certain of these taxes to you. Your exchange or sale of any Fund’s shares is a taxable event and may result in a capital gain or loss.

Before purchasing shares of a Fund, you should carefully consider the impact of the dividends or capital gains distributions which the Fund expects to announce, or has announced. If you purchase shares shortly before the record date for a dividend or distribution, you will receive some portion of your purchase price back as a taxable dividend or distribution.

Distributions may be subject to additional state and local taxes, depending on your particular situation. Consult your tax adviser with respect to the tax consequences to you of an investment in a Fund.

GENERAL INFORMATION

Household Delivery of Prospectus and Annual and Semi-Annual Reports. To reduce expenses, we may mail only one copy of the Prospectus and of each Annual and Semi-Annual Report to the address shared by two or more accounts. If you wish to receive individual copies of these documents, please call 1-800-572-9336, or write to Payden Mutual Funds, P.O. Box 1611, Milwaukee, WI 53201-1611. We will begin sending you individual copies 30 days after receiving your request.

Privacy Notice. Each of the Funds respects the right of privacy of each of their shareholders. The Funds also believe that each shareholder expects the Funds to conduct and process shareholder business in an accurate and efficient manner, and at all times in compliance with applicable legal and regulatory requirements concerning the privacy of shareholder information. Please see Appendix B for the Funds’ Privacy Notice directed to their shareholders.

Shareholder Inquiries. For information, call 1-800-572-9336, e-mail the Funds at payden@umb.com, visit the Funds’ Internet site at payden.com, or write to Payden Mutual Funds, P.O. Box 1611, Milwaukee, WI 53201-1611.


88		APPENDIX A		Payden Mutual Funds

Description of Ratings

The following summarizes the descriptions for some of the general ratings referred to in the Prospectus and Statement of Additional Information. Ratings represent only the opinions of the rating organizations about the safety of principal and interest payments, not market value. The rating of an issuer is heavily influenced by past developments and does not necessarily reflect probable future conditions. A lag frequently occurs between the time a rating is assigned and the time it is updated. Ratings are therefore general and are not absolute standards of quality.

CREDIT RATINGS — BONDS

Moody’s Investors Service, Inc.

The purpose of Moody’s ratings is to provide investors with a single system of gradation by which the relative investment qualities of bonds may be rated.

Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edged.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities.

A: Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future.

Baa: Bonds which are rated Baa are considered as medium grade obligations. They are neither highly protected nor poorly secured. Interest payments and security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often, the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this asset class.

B: Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Ca: Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings.

C: Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.

Rating Refinements: Moody’s may apply numerical modifiers, 1, 2, and 3 in each generic rating classification from Aa through B in its bond rating system. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and modifier 3 indicates that the issue ranks in the lower end of its generic rating category.

Standard & Poor’s Corporation

A Standard & Poor’s debt rating is a current assessment of the creditworthiness of an obligor with respect to a specific obligation. This assessment may take into consideration obligors such as guarantors, insurers, or lessees. The ratings are based on current information furnished by the issuer or obtained by Standard & Poor’s from other sources it considers reliable. Standard & Poor’s does not perform any audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings are based, in varying degrees, on the following considerations: (a) likelihood of default-capacity and willingness of the obligor as to the timely payment of interest and repayment of principal in accordance with the terms of the obligation; (b) nature of and provisions of the obligation; and (c) protection afforded by, and relative position of, the obligation in the event of bankruptcy and other laws affecting creditors’ rights.

AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation (i.e., pay interest and repay principal) is extremely strong.

AA: Bonds rated AA differ from the highest-rated obligations only in a small degree. The obligor’s capacity to meet its financial commitment on the obligation (i.e., pay interest and repay principal) is very strong.


Prospectus		APPENDIX A		89

Description of Ratings (continued)

A: Bonds rated A are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation (i.e., pay interest and repay principal) is still strong.

BBB: Bonds rated BBB exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation (i.e., pay interest and repay principal).

BB: Bonds rated BB are less vulnerable to nonpayment than other speculative issues. However, they face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation (i.e., pay interest and repay principal).

B: Bonds rated B are more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation (i.e., pay interest and repay principal). Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation.

CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated CC is currently highly vulnerable to nonpayment.

C: The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been taken, but payments on this obligation are being continued.

D: An obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor’s believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

The Standard & Poor’s ratings may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

r: This symbol is attached to the ratings of instruments with significant noncredit risks. It highlights risks to principal or volatility of expected returns which are not addressed in the credit rating. Examples include: obligations linked or indexed to equities, currencies, or commodities; obligations exposed to severe prepayment risk-such as interest-only or principal-only mortgage securities; and obligations with unusually risky interest terms, such as inverse floaters.

Fitch Ratings

Fitch investment grade bond ratings provide a guide to investors in determining the credit risk associated with a particular security. The ratings represent Fitch’s assessment of the issuer’s ability to meet the obligations of a specific debt issue or class of debt in a timely manner. The rating takes into consideration special features of the issue, its relationship to other obligations of the issuer, the current and prospective financial condition and operating performance of the issuer and any guarantor, as well as the economic and political environment that might affect the issuer’s future financial strength and credit quality. Fitch ratings do not reflect any credit enhancement that may be provided by insurance policies or financial guarantees unless otherwise indicated.

AAA: Bonds considered to be investment grade and of the highest credit quality. The obligor has an exceptionally strong ability to pay interest and repay principal, which is unlikely to be affected by reasonably foreseeable events.

AA: Bonds considered to be investment grade and of very high credit quality. The obligor’s ability to pay interest and repay principal is very strong, although not quite as strong as bonds rated “AAA.” Because bonds rated in the “AAA” and “AA” categories are not significantly vulnerable to foreseeable future developments, short-term debt of these issuers is generally rated “F-1+”.

A: Bonds considered to be investment grade and of high credit quality. The obligor’s ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to adverse changes in economic conditions and circumstances than bonds with higher ratings.

BBB: Bonds are considered to be of satisfactory credit quality. Ability to pay interest and principal is adequate. Adverse changes in economic conditions and circumstances are more likely to impair timely payment than higher rated bonds.

BB: Bonds are considered speculative. The obligor’s ability to pay interest and repay principal may be affected over time by adverse economic changes. However, business and financial alternatives can be identified, which could assist in the obligor satisfying its debt service requirements.

B: Bonds are considered highly speculative. While bonds in this class are currently meeting debt service requirements, the probability of continued timely payment of principal and interest reflects the obligor’s limited margin of safety and the need for reasonable business and economic activity throughout the life of the issue.

CCC: Bonds have certain identifiable characteristics that, if not remedied, may lead to default. The ability to meet obligations requires an advantageous business and economic environment.

CC: Bonds are minimally protected. Default in payment of interest and/or principal seems probable over time.


90		APPENDIX A		Payden Mutual Funds

Description of Ratings (continued)

C: Bonds are in imminent default in payment of interest or principal.

DDD, DD, and D: Bonds are in default on interest and/or principal payments. Such bonds are extremely speculative and should be valued on the basis of their ultimate recovery value in liquidation or reorganization of the obligor. “DDD” represents the highest potential for recovery on these bonds, and “D” represents the lowest potential for recovery. Plus (+) and minus (-) signs are used with a rating symbol to indicate the relative position of a credit within the rating category. Plus and minus signs, however, are not used in the “DDD,” “DD,” or “D” categories.

CREDIT RATINGS — MUNICIPAL SECURITIES AND COMMERCIAL PAPER

Moody’s Investors Service, Inc.

The purpose of Moody’s ratings is to provide investors with a single system of gradation by which the relative investment qualities of bonds may be rated.

U.S. TAX-EXEMPT MUNICIPALS

Moody’s ratings for U.S. Tax-Exempt Municipals range from Aaa to B and utilize the same definitional elements as are set forth in the Prospectus under the “Bonds” section of the Moody’s descriptions.

Advance refunded issues: Advance refunded issues that are secured by escrowed funds held in cash, held in trust, reinvested in direct non-callable U.S. Government obligations or non-callable obligations unconditionally guaranteed by the U.S. Government are identified with a # (hatchmark) symbol, e.g., # Aaa.

MUNICIPAL NOTE RATINGS

Moody’s ratings for state and municipal notes and other short-term loans are designated Moody’s Investment Grade (MIG), and for variable rate demand obligations are designated Variable Moody’s Investment Grade (VMIG). This distinction recognizes the differences between short-term credit risk and long-term risk. Loans bearing the designation MIG 1/VMIG 1 are of the best quality, enjoying strong protection from established cash flows for their servicing or from established and broad-based access to the market for refinancing, or both. Loans bearing the designation MIG2/VMIG 2 are of high quality, with ample margins of protection, although not as large as the preceding group.

COMMERCIAL PAPER

Moody’s short-term debt ratings are opinions of the ability of issuers to repay punctually senior debt obligations. These obligations have an original maturity not exceeding one year, unless explicitly noted. Moody’s employs the following three designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers:

Prime-1: Issuers rated Prime-1 (or related supporting institutions) have a superior ability for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: (a) leading market positions in well established industries; (b) high rates of return on funds employed; (c) conservative capitalization structures with moderate reliance on debt and ample asset protection; (d) broad margins in earnings coverage of fixed financial charges and high internal cash generation; and (e) well-established access to a range of financial markets and assured sources of alternate liquidity.

Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong ability for repayment of senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.

Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.

Standard & Poor’s Corporation


Prospectus		APPENDIX A		91

Description of Ratings (continued)

MUNICIPAL BOND RATINGS

AAA — Prime Grade: These are obligations of the highest quality. They have the strongest capacity for timely payment of debt service.

General Obligations Bonds: In a period of economic stress, the issuers will suffer the smallest declines in income and will be least susceptible to autonomous decline. Debt burden is moderate. A strong revenue structure appears more than adequate to meet future expenditure requirements. Quality of management appears superior.

Revenue Bonds: Debt service coverage has been, and is expected to remain, substantial, stability of the pledged revenues is also exceptionally strong due to the competitive position of the municipal enterprise or to the nature of the revenues. Basic security provisions (including rate covenant, earnings test for issuance of additional bonds and debt service reserve requirements) are rigorous. There is evidence of superior management.

AA — High Grade: The investment characteristics of bonds in this group are only slightly less marked than those of the prime quality issues. Bonds rated AA have the second strongest capacity for payment of debt service.

A — Good Grade: Principal and interest payments on bonds in this category are regarded as safe although the bonds are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories. This rating describes the third strongest capacity for payment of debt service. Regarding municipal bonds, the rating differs from the two higher ratings because:

General Obligation Bonds: There is some weakness, either in the local economic base, in debt burden, in the balance between revenues and expenditures, or in quality of management. Under certain adverse circumstances, any one such weakness might impair the ability of the issuer to meet debt obligations at some future date.

Revenue Bonds: Debt service coverage is good, but not exceptional. Stability of the pledged revenues could show some variations because of increased competition or economic influences on revenues. Basic security provisions, while satisfactory, are less stringent. Management performance appearance appears adequate.

Rating Refinements: Standard & Poor’s letter ratings may be modified by the addition of a plus (+) or a minus (-) sign, which is used to show relative standing within the major rating categories, except in the AAA rating category.

MUNICIPAL NOTE RATINGS

Municipal notes with maturities of three years or less are usually given note ratings (designated SP-1, or SP-2) to distinguish more clearly the credit quality of notes as compared to bonds. Notes rated SP-1 have a very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics are given the designation of SP-1. Notes rated SP-2 have a satisfactory capacity to pay principal and interest.

COMMERCIAL PAPER

A-1: A short-term obligation rated A-1 is rated in the highest category by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated A-2 is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory.

Fitch Ratings

COMMERCIAL PAPER

F-1: Very Strong Credit Quality. Issues assigned this rating reflect an assurance of timely payment. Those issues regarded as having the strongest degree of assurance of repayment are denoted with a plus (+) sign designation.


92		APPENDIX B		Payden Mutual Funds

Privacy Notice

The Funds respect your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner and in compliance with applicable legal and regulatory requirements.

Collection of Information

To meet those expectations, we must collect and maintain certain personal information that is required by state and federal agencies, such as name, address and tax ID. We may collect or capture nonpublic information about you from the following sources:

The Fund application, or other forms;

Oral conversations or written correspondence between you and our representatives;

Your transactions with us; and

Electronic sources, such as our Web site, or E-Mails.

We do not make personal information available on line. To change your personal information, call Paydenfund Shareholder Services at 800-572-9366 and request the forms necessary to make any such changes.

Internal Access to Information and Safeguards

We limit access to your personal and account information to those employees who need to know that information so that we can provide products and services to you. We also maintain physical, electronic and procedural safeguards to protect your nonpublic personal and account information. Finally, when we dispose of such information, we have in place policies and procedures to assure that such information is properly stored and shredded in the case of documentary material and erased in the case of electronic media so that in either case the information cannot be practicably read or reconstructed.

Disclosure of Information

We do not disclose any nonpublic personal and account information about our customers, or former customers, to anyone, except as permitted by law.

In this regard, we may disclose such information to our affiliates, including the Funds’ investment adviser, Payden & Rygel; administrator, Treasury Plus, Inc.; and distributor, Payden & Rygel Distributors. We also may disclose such information to unaffiliated third parties who are service providers to you or to the Funds, such as broker-dealers, transfer agents, custodians, or our mail processing firm. In each case, such disclosure is permitted by law, and the recipients are permitted to use it only as needed to provide agreed services to you. Finally, we may also disclose information to appropriate government agencies, and to others, as required by law or to prevent fraud.


Prospectus		APPENDIX C		93

Fund Financial Highlights

This financial highlights table is intended to help you understand the financial performance of each of the Funds for the past five years, or if shorter, the period of the Fund’s operations through October 31, 2015. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions). The information for the periods indicated has been derived from financial statements audited by Deloitte & Touche LLP whose report, along with each Fund’s financial statements, is included in the Annual Report to Shareholders dated October 31, 2015 and is incorporated by reference in the Funds’ Statement of Additional Information, which is available upon request.

PAYDEN CASH RESERVES MONEY MARKET FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Income from investment activities:
Net investment income		0.00	⁽¹⁾		0.00	⁽¹⁾		0.00	⁽¹⁾		0.00	⁽¹⁾		0.00	⁽¹⁾
Net realized and unrealized gains (losses)		0.00	⁽¹⁾		0.00	⁽¹⁾		0.00	⁽¹⁾		0.00	⁽¹⁾		0.00	⁽¹⁾

Total from investment activities		0.00			0.00			0.00			0.00			0.00

Distributions to shareholders:
From net investment income		0.00	⁽¹⁾		0.00	⁽¹⁾		0.00	⁽¹⁾		(0.00	)⁽¹⁾		(0.00	)⁽¹⁾
Return of capital		—			0.00	⁽¹⁾		0.00	⁽¹⁾		—			—

Total distributions to shareholders		0.00			0.00			0.00			0.00			0.00

Net asset value – end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.01	%		0.01	%		0.01	%		0.02	%		0.02	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	392,391		$	490,666		$	498,417		$	525,480		$	746,719
Ratio of gross expense to average net assets		0.39	%		0.37	%		0.37	%		0.38	%		0.37	%
Ratio of net expense to average net assets		0.09	%		0.08	%		0.10	%		0.15	%		0.14	%
Ratio of investment income less gross expenses to average net assets		(0.29	)%		(0.28	)%		(0.26	)%		(0.21	)%		(0.20	)%
Ratio of net investment income to average net assets		0.01	%		0.01	%		0.01	%		0.02	%		0.02	%
Portfolio turnover rate		n/a			n/a			n/a			n/a			n/a

The Fund commenced operations on December 17, 1997.

PAYDEN LIMITED MATURITY FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	9.47		$	9.47		$	9.48		$	9.39		$	9.45

Income (loss) from investment activities:
Net investment income		0.06			0.07			0.05			0.06			0.08
Net realized and unrealized gains (losses)		(0.04	)		(0.00	)⁽¹⁾		(0.00	)⁽¹⁾		0.10			(0.05	)

Total from investment activities		0.02			0.07			0.05			0.16			0.03

Distributions to shareholders:
From net investment income		(0.04	)		(0.07	)		(0.04	)		(0.07	)		(0.09	)
Return of capital		(0.03	)		—			(0.02	)		—			—

Total distributions to shareholders		(0.07	)		(0.07	)		(0.06	)		(0.07	)		(0.09	)

Net asset value – end of period	$	9.42		$	9.47		$	9.47		$	9.48		$	9.39

Total return		0.20	%		0.78	%		0.56	%		1.66	%		0.27	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	422,996		$	318,671		$	258,282		$	242,013		$	216,493
Ratio of gross expense to average net assets		0.57	%		0.57	%		0.55	%		0.56	%		0.57	%
Ratio of net expense to average net assets		0.31	%		0.35	%		0.40	%		0.50	%		0.50	%
Ratio of investment income less gross expenses to average net assets		0.31	%		0.59	%		0.44	%		0.56	%		0.72	%
Ratio of net investment income to average net assets		0.57	%		0.81	%		0.59	%		0.62	%		0.79	%
Portfolio turnover rate		39	%		59	%		124	%		98	%		75	%

The Fund commenced operations on April 29, 1994.

(1)	Amount is less than $0.005


94		APPENDIX C		Payden Mutual Funds

Fund Financial Highlights (continued)

PAYDEN LOW DURATION FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	10.15		$	10.15		$	10.23		$	10.01		$	10.23

Income (loss) from investment activities:
Net investment income		0.11			0.12			0.14			0.18			0.24
Net realized and unrealized gains (losses)		(0.06	)		(0.00	)⁽¹⁾		(0.07	)		0.23			(0.20	)

Total from investment activities		0.05			0.12			0.07			0.41			0.04

Distributions to shareholders:
From net investment income		(0.11	)		(0.12	)		(0.13	)		(0.19	)		(0.24	)
From net realized gains		(0.04	)					—			—			(0.02	)
Return of capital		(0.00	)⁽¹⁾		—			(0.02	)		—			—

Total distributions to shareholders		(0.15	)		(0.12	)		(0.15	)		(0.19	)		(0.26	)

Net asset value – end of period	$	10.05		$	10.15		$	10.15		$	10.23		$	10.01

Total return		0.50	%		1.14	%		0.68	%		4.13	%		0.46	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	820,662		$	833,205		$	848,866		$	541,809		$	462,491
Ratio of gross expense to average net assets		0.57	%		0.55	%		0.55	%		0.55	%		0.56	%
Ratio of net expense to average net assets		0.47	%		0.48	%		0.51	%		0.54	%		0.53	%
Ratio of investment income less gross expenses to average net assets		1.02	%		1.06	%		1.22	%		1.74	%		2.34	%
Ratio of net investment income to average net assets		1.12	%		1.13	%		1.26	%		1.75	%		2.37	%
Portfolio turnover rate		31	%		45	%		90	%		97	%		74	%

The Fund commenced operations on December 31, 1993.

PAYDEN U.S. GOVERNMENT FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	10.68		$	10.67		$	10.98		$	11.12		$	11.29

Income (loss) from investment activities:
Net investment income		0.09	⁽²⁾		0.08	⁽²⁾		0.08			0.12			0.15
Net realized and unrealized gains (losses)		0.02			0.08			(0.15	)		0.13			(0.04	)

Total from investment activities		0.11			0.16			(0.07	)		0.25			0.11

Distributions to shareholders:
From net investment income		(0.16	)		(0.15	)		(0.19	)		(0.18	)		(0.18	)
From net realized gains		—			—			(0.05	)		(0.21	)		(0.10	)
Return of capital		—			—			(0.00	)⁽¹⁾		—			—

Total distributions to shareholders		(0.16	)		(0.15	)		(0.24	)		(0.39	)		(0.28	)

Net asset value – end of period	$	10.63		$	10.68		$	10.67		$	10.98		$	11.12

Total return		1.01	%		1.52	%		(0.67	)%		2.32	%		(0.99	)%

Ratios/supplemental data:
Net assets, end of period (000s)	$	133,420		$	130,508		$	130,624		$	110,026		$	63,988
Ratio of gross expense to average net assets		0.59	%		0.59	%		0.58	%		0.64	%		0.63	%
Ratio of net expense to average net assets		0.45	%		0.45	%		0.45	%		0.61	%		0.60	%
Ratio of investment income less gross expenses to average net assets		0.69	%		0.60	%		0.66	%		0.90	%		1.41	%
Ratio of net investment income to average net assets		0.82	%		0.74	%		0.79	%		0.93	%		1.44	%
Portfolio turnover rate		32	%		27	%		43	%		79	%		76	%

The Fund commenced operations on January 3, 1995.

(1)	Amount is less than $0.005

(2)	Based on average shares outstanding


Prospectus		APPENDIX C		95

Fund Financial Highlights (continued)

PAYDEN GNMA FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	9.95		$	10.00		$	10.80		$	10.67		$	10.56

Income (loss) from investment activities:
Net investment income		0.14			0.15			0.05			0.17			0.26
Net realized and unrealized gains (losses)		0.06			0.22			(0.24	)		0.32			0.35

Total from investment activities		0.20			0.37			(0.19	)		0.49			0.61

Distributions to shareholders:
From net investment income		(0.36	)		(0.42	)		(0.37	)		(0.36	)		(0.45	)
From net realized gains		—			—			(0.24	)		—			(0.05	)

Total distributions to shareholders		(0.36	)		(0.42	)		(0.61	)		(0.36	)		(0.50	)

Net asset value – end of period	$	9.79		$	9.95		$	10.00		$	10.80		$	10.67

Total return		2.06	%		3.79	%		(1.80	)%		4.77	%		5.99	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	255,273		$	281,473		$	371,593		$	886,109		$	776,547
Ratio of gross expense to average net assets		0.67	%		0.61	%		0.68	%		0.63	%		0.62	%
Ratio of net expense to average net assets		0.50	%		0.50	%		0.50	%		0.50	%		0.50	%
Ratio of investment income less gross expenses to average net assets		1.36	%		1.58	%		1.38	%		1.50	%		2.17	%
Ratio of net investment income to average net assets		1.53	%		1.68	%		1.56	%		1.63	%		2.29	%
Portfolio turnover rate		15	%		12	%		19	%		27	%		23	%

The Fund commenced operations on August 27, 1999.

PAYDEN CORE BOND FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	10.82		$	10.67		$	11.06		$	10.54		$	10.68

Income (loss) from investment activities:
Net investment income		0.25	⁽¹⁾		0.28	⁽¹⁾		0.29	⁽¹⁾		0.33			0.38
Net realized and unrealized gains (losses)		(0.07	)		0.28			(0.32	)		0.60			(0.13	)

Total from investment activities		0.18			0.56			(0.03	)		0.93			0.25

Distributions to shareholders:
From net investment income		(0.28	)		(0.32	)		(0.35	)		(0.41	)		(0.39	)
From net realized gains		(0.08	)		(0.09	)		(0.01	)		—			—

Total distributions to shareholders		(0.36	)		(0.41	)		(0.36	)		(0.41	)		(0.39	)

Net asset value – end of period	$	10.64		$	10.82		$	10.67		$	11.06		$	10.54

Total return		1.73	%		5.34	%		(0.28	)%		9.06	%		2.45	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	660,835		$	593,724		$	587,658		$	645,700		$	580,774
Ratio of gross expense to average net assets		0.54	%		0.53	%		0.52	%		0.53	%		0.53	%
Ratio of net expense to average net assets		0.54	%		0.53	%		0.52	%		0.53	%		0.53	%
Ratio of investment income less gross expenses to average net assets		2.30	%		2.65	%		2.66	%		3.13	%		3.64	%
Ratio of net investment income to average net assets		2.30	%		2.65	%		2.66	%		3.13	%		3.64	%
Portfolio turnover rate		31	%		49	%		511	%⁽¹⁾		464	%⁽²⁾		118	%

The Fund commenced operations on December 31, 1993.

(1)	Includes U.S. Treasury securities purchased and sold prior to their settlement date; excluding these transactions, portfolio turnover would have been 101%.

(2)	Includes U.S. Treasury securities purchased and sold prior to their settlement date; excluding these transactions, portfolio turnover would have been 105%.


96		APPENDIX C		Payden Mutual Funds

Fund Financial Highlights (continued)

PAYDEN STRATEGIC INCOME FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014
Net asset value – beginning of period	$	10.00		$	10.00

Income from investment activities:
Net investment income		0.22			0.09
Net realized and unrealized gains (losses)		(0.01	)		(0.00	)⁽¹⁾

Total from investment activities		0.21			0.09

Distributions to shareholders:
From net investment income		(0.22	)		(0.09	)
From net realized gains		(0.02	)		—
Return of capital		(0.01	)		—

Total distributions to shareholders		(0.25	)		(0.09	)

Net asset value – end of period	$	9.96		$	10.00

Total return		2.08	%		0.94	%⁽²⁾

Ratios/supplemental data:
Net assets, end of period (000s)	$	108,789		$	55,453
Ratio of gross expense to average net assets		0.90	%		1.20	%⁽³⁾
Ratio of net expense to average net assets		0.80	%		0.80	%⁽³⁾
Ratio of investment income less gross expenses to average net assets		2.06	%		1.79	%⁽³⁾
Ratio of net investment income to average net assets		2.17	%		2.19	%⁽³⁾
Portfolio turnover rate		30	%		17	%⁽²⁾

The Fund commenced operations on May 8, 2014.

PAYDEN ABSOLUTE RETURN BOND FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015
Net asset value – beginning of period	$	10.00

Income (loss) from investment activities:
Net investment income		0.17	⁽⁴⁾
Net realized and unrealized losses		(0.07	)

Total from investment activities		0.10

Distributions to shareholders:
From net investment income		(0.18	)

Total distributions to shareholders		(0.18	)

Net asset value – end of period	$	9.92

Total return		0.97	%⁽²⁾

Ratios/supplemental data:
Net assets, end of period (000s)	$	42,121
Ratio of gross expense to average net assets		1.17	%⁽³⁾
Ratio of net expense to average net assets		0.70	%⁽³⁾
Ratio of investment income less gross expenses to average net assets		1.45	%⁽³⁾
Ratio of net investment income to average net assets		1.92	%⁽³⁾
Portfolio turnover rate		64	%⁽²⁾

The Fund commenced operations on November 6, 2014.

(1)	Amount is less than $0.005

(2)	Not annualized

(3)	Annualized

(4)	Based on average shares outstanding


Prospectus		APPENDIX C		97

Fund Financial Highlights (continued)

PAYDEN CORPORATE BOND FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	11.37		$	11.05		$	11.60		$	11.33		$	11.85

Income (loss) from investment activities:
Net investment income		0.35			0.39			0.38			0.45			0.51
Net realized and unrealized gains (losses)		(0.11	)		0.50			(0.36	)		0.75			(0.12	)

Total from investment activities		0.24			0.89			0.02			1.20			0.39

Distributions to shareholders:
From net investment income		(0.34	)		(0.41	)		(0.37	)		(0.45	)		(0.51	)
From net realized gains		(0.30	)		(0.16	)		(0.20	)		(0.48	)		(0.40	)

Total distributions to shareholders		(0.64	)		(0.57	)		(0.57	)		(0.93	)		(0.91	)

Net asset value – end of period	$	10.97		$	11.37		$	11.05		$	11.60		$	11.33

Total return		2.26	%		8.31	%		0.17	%		11.39	%		3.71	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	71,542		$	69,646		$	66,279		$	43,259		$	38,559
Ratio of gross expense to average net assets		0.78	%		0.79	%		0.82	%		0.91	%		0.96	%
Ratio of net expense to average net assets		0.65	%		0.65	%		0.65	%		0.65	%		0.65	%
Ratio of investment income less gross expenses to average net assets		3.08	%		3.42	%		3.29	%		3.77	%		4.21	%
Ratio of net investment income to average net assets		3.21	%		3.56	%		3.46	%		4.03	%		4.52	%
Portfolio turnover rate		112	%		104	%		273	%⁽¹⁾		487	%⁽²⁾		87	%

The Fund commenced operations on March 12, 2009.

PAYDEN HIGH INCOME FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	7.08		$	7.28		$	7.29		$	7.05		$	7.31

Income (loss) from investment activities:
Net investment income		0.36			0.40			0.44			0.48			0.52
Net realized and unrealized gains (losses)		(0.42	)		(0.00	)⁽³⁾		(0.03	)		0.37			(0.24	)

Total from investment activities		(0.06	)		0.40			0.41			0.85			0.28

Distributions to shareholders:
From net investment income		(0.36	)		(0.40	)		(0.42	)		(0.49	)		(0.53	)
From net realized gains		(0.26	)		(0.20	)		—			(0.09	)		(0.01	)
Return of capital		—			—			—			(0.03	)		—

Total distributions to shareholders		(0.62	)		(0.60	)		(0.42	)		(0.61	)		(0.54	)

Proceeds from redemption fees		—			—			—			—			0.00	⁽³⁾

Net asset value – end of period	$	6.40		$	7.08		$	7.28		$	7.29		$	7.05

Total return		(0.79	)%		5.75	%		5.82	%		12.69	%		3.89	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	603,937		$	734,666		$	892,360		$	1,123,179		$	1,024,553
Ratio of gross expense to average net assets		0.67	%		0.66	%		0.66	%		0.64	%		0.66	%
Ratio of net expense to average net assets		0.67	%		0.66	%		0.66	%		0.64	%		0.66	%
Ratio of investment income less gross expenses to average net assets		5.29	%		5.54	%		6.05	%		6.70	%		7.20	%
Ratio of net investment income to average net assets		5.29	%		5.54	%		6.05	%		6.70	%		7.20	%
Portfolio turnover rate		32	%		42	%		25	%		24	%		38	%

The Fund commenced operations on December 30, 1997.

(1)	Includes U.S. Treasury securities purchased and sold prior to their settlement date; excluding these transactions, portfolio turnover would have been 123%.

(2)	Includes U.S. Treasury securities purchased and sold prior to their settlement date; excluding these transactions, portfolio turnover would have been 56%.

(3)	Amount is less than $0.005


98		APPENDIX C		Payden Mutual Funds

Fund Financial Highlights (continued)

PAYDEN FLOATING RATE FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014
Net asset value – beginning of period	$	9.97		$	10.00

Income from investment activities:
Net investment income		0.32			0.27
Net realized and unrealized gains (losses)		(0.06	)		(0.03	)

Total from investment activities		0.26			0.24

Distributions to shareholders:
From net investment income		(0.31	)		(0.27	)
From net realized gains		(0.03	)		—

Total distributions to shareholders		(0.34	)		(0.27	)

Net asset value – end of period	$	9.89		$	9.97

Total return		2.64	%		2.39	%⁽¹⁾

Ratios/supplemental data:
Net assets, end of period (000s)	$	42,478		$	46,586
Ratio of gross expense to average net assets		0.84	%		0.90	%⁽²⁾
Ratio of net expense to average net assets		0.75	%		0.75	%⁽²⁾
Ratio of investment income less gross expenses to average net assets		3.00	%		3.03	%⁽²⁾
Ratio of net investment income to average net assets		3.09	%		3.17	%⁽²⁾
Portfolio turnover rate		39	%		18	%⁽¹⁾

The Fund commenced operations on November 11, 2013.

PAYDEN CALIFORNIA MUNICIPAL INCOME FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	10.50		$	10.27		$	10.63		$	10.11		$	10.36

Income (loss) from investment activities:
Net investment income		0.23			0.24			0.25			0.26			0.28
Net realized and unrealized gains (losses)		(0.03	)		0.29			(0.24	)		0.52			(0.05	)

Total from investment activities		0.20			0.53			0.01			0.78			0.23

Distributions to shareholders:
From net investment income		(0.23	)		(0.24	)		(0.25	)		(0.26	)		(0.28	)
From net realized gains		(0.08	)		(0.06	)		(0.12	)		—			(0.20	)

Total distributions to shareholders		(0.31	)		(0.30	)		(0.37	)		(0.26	)		(0.48	)

Net asset value – end of period	$	10.39		$	10.50		$	10.27		$	10.63		$	10.11

Total return		1.87	%		5.27	%		0.02	%		7.73	%		2.41	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	45,938		$	46,729		$	43,305		$	49,811		$	44,265
Ratio of gross expense to average net assets		0.70	%		0.70	%		0.66	%		0.67	%		0.67	%
Ratio of net expense to average net assets		0.55	%		0.55	%		0.55	%		0.56	%		0.55	%
Ratio of investment income less gross expenses to average net assets		2.03	%		2.18	%		2.26	%		2.32	%		2.64	%
Ratio of net investment income to average net assets		2.17	%		2.33	%		2.37	%		2.43	%		2.76	%
Portfolio turnover rate		45	%		48	%		24	%		25	%		30	%

The Fund commenced operations on December 17, 1998.

(1)	Not annualized

(2)	Annualized


Prospectus		APPENDIX C		99

Fund Financial Highlights (continued)

PAYDEN GLOBAL LOW DURATION FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	10.10		$	10.08		$	10.10		$	9.88		$	10.16

Income (loss) from investment activities:
Net investment income		0.12			0.12			0.14			0.21			0.19
Net realized and unrealized gains (losses)		(0.09	)		0.02			(0.02	)		0.33			(0.20	)

Total from investment activities		0.03			0.14			0.12			0.54			(0.01	)

Distributions to shareholders:
From net investment income		(0.02	)		(0.12	)		(0.13	)		(0.32	)		(0.27	)
Return of capital		(0.10	)		—			(0.01	)		—			—

Total distributions to shareholders		(0.12	)		(0.12	)		(0.14	)		(0.32	)		(0.27	)

Net asset value – end of period	$	10.01		$	10.10		$	10.08		$	10.10		$	9.88

Total return		0.32	%		1.43	%		1.19	%		5.59	%		(0.10	)%

Ratios/supplemental data:
Net assets, end of period (000s)	$	130,344		$	139,965		$	113,046		$	70,544		$	73,021
Ratio of gross expense to average net assets		0.69	%		0.69	%		0.71	%		0.76	%		0.70	%
Ratio of net expense to average net assets		0.55	%		0.55	%		0.60	%		0.71	%		0.70	%
Ratio of investment income less gross expenses to average net assets		1.05	%		1.11	%		1.29	%		2.00	%		2.04	%
Ratio of net investment income to average net assets		1.18	%		1.25	%		1.41	%		2.05	%		2.04	%
Portfolio turnover rate		35	%		54	%		84	%		79	%		142	%

The Fund commenced operations on September 18, 1996.

PAYDEN GLOBAL FIXED INCOME FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	8.84		$	8.53		$	8.70		$	8.71		$	9.02

Income (loss) from investment activities:
Net investment income		0.15			0.21			0.25			0.45			0.36
Net realized and unrealized gains (losses)		0.05			0.31			(0.19	)		0.25			(0.30	)

Total from investment activities		0.20			0.52			0.06			0.70			0.06

Distributions to shareholders:
From net investment income		(0.17	)		(0.18	)		(0.08	)		(0.71	)		(0.37	)
Return of capital		—			(0.03	)		(0.15	)		—			—

Total distributions to shareholders		(0.17	)		(0.21	)		(0.23	)		(0.71	)		(0.37	)

Net asset value – end of period	$	8.87		$	8.84		$	8.53		$	8.70		$	8.71

Total return		2.27	%		6.20	%		0.69	%		8.54	%		0.71	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	80,293		$	50,679		$	39,921		$	48,221		$	66,592
Ratio of gross expense to average net assets		0.81	%		0.90	%		0.94	%		0.92	%		0.84	%
Ratio of net expense to average net assets		0.66	%		0.70	%		0.71	%		0.72	%		0.70	%
Ratio of investment income less gross expenses to average net assets		1.63	%		2.30	%		2.57	%		3.45	%		3.91	%
Ratio of net investment income to average net assets		1.78	%		2.50	%		2.81	%		3.65	%		4.05	%
Portfolio turnover rate		44	%		55	%		75	%		100	%		82	%

The Fund commenced operations on September 1, 1992.


100		APPENDIX C		Payden Mutual Funds

Fund Financial Highlights (continued)

PAYDEN EMERGING MARKETS BOND FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	14.11		$	13.88		$	15.42		$	14.42		$	14.85

Income (loss) from investment activities:
Net investment income		0.67			0.75			0.79			0.82			0.86
Net realized and unrealized gains (losses)		(1.04	)		0.26			(1.26	)		1.33			(0.45	)

Total from investment activities		(0.37	)		1.01			(0.47	)		2.15			0.41

Distributions to shareholders:
From net investment income		(0.66	)		(0.63	)		(0.82	)		(0.86	)		(0.83	)
From net realized gains		—			(0.05	)		(0.25	)		(0.29	)		(0.01	)
Return of capital		—			(0.10	)		—			—			—

Total distributions to shareholders		(0.66	)		(0.78	)		(1.07	)		(1.15	)		(0.84	)

Proceeds from redemption fees		—			—			—			—			0.00	⁽¹⁾

Net asset value – end of period	$	13.08		$	14.11		$	13.88		$	15.42		$	14.42

Total return		(2.65	)%		7.53	%		(3.25	)%		15.80	%		2.95	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	416,408		$	379,923		$	463,873		$	575,777		$	620,106
Ratio of gross expense to average net assets		0.76	%		0.78	%		0.76	%		0.78	%		0.85	%
Ratio of net expense to average net assets		0.76	%		0.78	%		0.76	%		0.78	%		0.85	%
Ratio of investment income less gross expenses to average net assets		4.98	%		5.29	%		5.39	%		5.62	%		6.07	%
Ratio of net investment income to average net assets		4.98	%		5.29	%		5.39	%		5.62	%		6.07	%
Portfolio turnover rate		54	%		73	%		95	%		74	%		85	%

The Fund commenced operations on December 17, 1998.

PAYDEN EMERGING MARKETS LOCAL BOND FUND

(For the Share Outstanding for the Period Ended October 31st)


	2015			2014			2013			2012
Net asset value – beginning of period	$	8.48		$	9.33		$	10.24		$	10.00

Income from investment activities:
Net investment income		0.40			0.51			0.52			0.49
Net realized and unrealized gains (losses)		(1.83	)		(0.86	)		(0.92	)		0.24

Total from investment activities		(1.43	)		(0.35	)		(0.40	)		0.73

Distributions to shareholders:
From net investment income		—			—			(0.32	)		(0.40	)
Return of capital		(0.39	)		(0.50	)		(0.19	)		(0.09	)

Total distributions to shareholders		(0.39	)		(0.50	)		(0.51	)		(0.49	)

Net asset value – end of period	$	6.66		$	8.48		$	9.33		$	10.24

Total return		(17.16	)%		(3.84	)%		(4.12	)%		7.58	%⁽²⁾

Ratios/supplemental data:
Net assets, end of period (000s)	$	125,970		$	174,827		$	248,377		$	118,921
Ratio of gross expense to average net assets		0.98	%		0.96	%		0.91	%		1.07	%⁽³⁾
Ratio of net expense to average net assets		0.97	%		0.96	%		0.91	%		0.99	%⁽³⁾
Ratio of investment income less gross expenses to average net assets		5.26	%		5.59	%		5.27	%		5.14	%⁽³⁾
Ratio of net investment income to average net assets		5.28	%		5.59	%		5.27	%		5.22	%⁽³⁾
Portfolio turnover rate		106	%		99	%		114	%		91	%⁽²⁾

The Fund commenced operations on November 2, 2011.

(1)	Amount is less than $0.005

(2)	Not annualized

(3)	Annualized


Prospectus		APPENDIX C		101

Fund Financial Highlights (continued)

PAYDEN EMERGING MARKETS CORPORATE BOND FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014
Net asset value – beginning of period	$	10.39		$	10.00

Income from investment activities:
Net investment income		0.43			0.64
Net realized and unrealized gains (losses)		(0.59	)		0.18

Total from investment activities		(0.16	)		0.82

Distributions to shareholders:
From net investment income		(0.43	)		(0.43	)
From net realized gains		(0.18	)		—

Total distributions to shareholders		(0.61	)		(0.43	)

Net asset value – end of period	$	9.62		$	10.39

Total return		(1.55	)%		8.31	%⁽¹⁾

Ratios/supplemental data:
Net assets, end of period (000s)	$	1,401		$	1,522
Ratio of gross expense to average net assets		1.33	%		1.42	%⁽²⁾
Ratio of net expense to average net assets		0.95	%		0.94	%⁽²⁾
Ratio of investment income less gross expenses to average net assets		4.00	%		3.90	%⁽²⁾
Ratio of net investment income to average net assets		4.39	%		4.37	%⁽²⁾
Portfolio turnover rate		93	%		100	%⁽¹⁾

The Fund commenced operations on November 11, 2013.

PAYDEN EQUITY INCOME FUND

(For the Share Outstanding for the Periods Ended October 31st)


	2015			2014			2013			2012			2011
Net asset value – beginning of period	$	14.39		$	12.64		$	11.12		$	10.11		$	8.91

Income from investment activities:
Net investment income		0.35			0.38			0.48			0.48			0.38
Net realized and unrealized gains		0.05			1.72			1.54			1.05			1.25

Total from investment activities		0.40			2.10			2.02			1.53			1.63

Distributions to shareholders:
From net investment income		(0.39	)		(0.24	)		(0.50	)		(0.52	)		(0.43	)
From net realized gains		(0.43	)		(0.11	)		—			—			—

Total distributions to shareholders		(0.82	)		(0.35	)		(0.50	)		(0.52	)		(0.43	)

Net asset value – end of period	$	13.97		$	14.39		$	12.64		$	11.12		$	10.11

Total return		2.90	%		16.88	%		18.51	%		15.40	%		18.46	%

Ratios/supplemental data:
Net assets, end of period (000s)	$	281,163		$	275,222		$	211,644		$	168,572		$	63,832
Ratio of gross expense to average net assets		0.80	%		0.83	%		0.87	%		0.93	%		0.95	%
Ratio of net expense to average net assets		0.80	%		0.80	%		0.80	%		0.80	%		0.80	%
Ratio of investment income less gross expenses to average net assets		2.54	%		2.74	%		3.91	%		4.48	%		4.03	%
Ratio of net investment income to average net assets		2.53	%		2.77	%		3.99	%		4.61	%		4.18	%
Portfolio turnover rate		48	%		51	%		86	%		182	%		167	%

The Fund commenced operations on November 1, 1996.

(1)	Not annualized

(2)	Annualized

INVESTMENT ADVISER

Payden & Rygel

333 South Grand Avenue

Los Angeles, California 90071

ADMINISTRATOR

Treasury Plus, Inc.

333 South Grand Avenue

Los Angeles, California 90071

DISTRIBUTOR

Payden & Rygel Distributors

333 South Grand Avenue

Los Angeles, California 90071

CUSTODIAN

The Bank of New York Mellon

One Boston Place

Boston, Massachusetts 02109

TRANSFER AGENT

UMB Fund Services, Inc.

235 Galena Street

Milwaukee, Wisconsin 53212

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Deloitte & Touche LLP

111 South Wacker Drive

Chicago, Illinois 60606

COUNSEL

Paul Hastings LLP

515 South Flower Street, 25th Floor

Los Angeles, California 90071

LOGO

FOR MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING DOCUMENTS ARE AVAILABLE FREE UPON REQUEST:

ANNUAL/SEMI-ANNUAL REPORTS:

Annual and Semi-Annual Reports to shareholders for the Funds contain detailed information on each Fund’s investments. The Annual Report includes a discussion of the market conditions and investment strategies that significantly affected each Fund’s performance during its last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI):

The SAI provides more detailed information about each of the Funds, including operations and investment policies. It is incorporated by reference in this Prospectus and is legally considered a part of the Prospectus.

You may obtain copies, free of charge, of each of the Annual and Semi-Annual Reports for the Funds and the SAI, or request other information and discuss your questions about any of the Funds, by calling toll-free (800) 572-9336, or by writing:

Payden Mutual Funds P.O. Box 1611 Milwaukee, WI 53201-1611

The SAI and Annual and Semi-Annual Reports are available, free of charge, on the Funds’ Internet site at payden.com.

Information about the Funds, including the SAI, can be reviewed and copied at the Public Reference Room of the U.S. Securities and Exchange Commission (“SEC”) in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090. Reports and other information about the Funds are available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov. Copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address, publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, Washington, D.C. 20549-1520.

The Payden & Rygel Investment Group: Investment Company Act File 811-6625

LOGO

PROSPECTUS

FEBRUARY 29, 2016

» U.S. BOND FUNDS

Payden U.S. Government Fund (Adviser Class — Ticker Symbol PYUWX)

Payden GNMA Fund (Adviser Class — Ticker Symbol PYGWX)

Payden Core Bond Fund (Adviser Class — Ticker Symbol PYCWX)

Payden Strategic Income Fund (Adviser Class — Ticker Symbol PYSWX)

Payden Absolute Return Bond Fund (Adviser Class — Ticker Symbol PYAWX)

Payden High Income Fund (Adviser Class — Ticker Symbol PYHWX)

» U.S. LOAN FUND

Payden Floating Rate Fund (Adviser Class – Ticker Symbol PYFAX)

» GLOBAL BOND FUNDS

Payden Emerging Markets Bond Fund (Adviser Class — Ticker Symbol PYEWX)

Payden Emerging Markets Local Bond Fund (Adviser Class — Ticker Symbol PYEAX)

Payden Emerging Markets Corporate Bond Fund (Adviser Class – Ticker Symbol PYCAX)

» U.S. EQUITY FUND

Payden Equity Income Fund (Adviser Class —Ticker Symbol PYVAX)

The U.S. Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

LOGO

table of contents



» Fund Summaries
› U.S. Bond Funds
Payden U.S. Government Fund		4
Payden GNMA Fund		7
Payden Core Bond Fund		10
Payden Strategic Income Fund		14
Payden Absolute Return Bond Fund		17
Payden High Income Fund		21

› U.S. Loan Fund
Payden Floating Rate Fund		25

› Global Bond Funds
Payden Emerging Markets Bond Fund		29
Payden Emerging Markets Local Bond Fund		33
Payden Emerging Markets Corporate Bond Fund		36

› U.S. Equity Fund
Payden Equity Income Fund		40

› Additional Information

» More About Investment Strategies, Related Risks and Disclosure of Portfolio Holdings		43

» Management of the Funds		48

» Shareholder Information
Pricing of Fund Shares: Net Asset Value		50
How to Purchase Shares		51
How to Redeem Shares		54
Cost Basis Reporting		54
Market Timing Activities		54
Dividends and Distributions		55
Tax Information		55
General Information		55

Appendix A: Description of Ratings		56
Appendix B: Privacy Notice		60
Appendix C: Financial Highlights		61


4		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN U.S. GOVERNMENT FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.28	%
Other Expenses	0.31	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	0.84	%
Fee Waiver or Expense Reimbursement¹	0.14	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.70	%

¹ Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding 12b-1 Distributions Fees, Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.45%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


1 Year	3 Years		5 Years		10 Years
$72	$	254	$	452	$	1,024

PRINCIPAL INVESTMENT STRATEGIES:

Except for mortgage-backed U.S. Government Obligations, the Fund invests in debt securities with a maximum maturity of ten years. Under normal market conditions, the Fund’s average portfolio maturity (on a dollar-weighted basis) is generally less than five years. The Fund invests in mortgage-backed U.S. Government Obligations with a maximum effective duration of five years. Duration is a mathematical concept which uses anticipated cash flows to measure the price volatility of a security and is calculated in terms of years. For example, when interest rates move up or down, the price of a security with a duration of four years will move roughly twice as much as a security with a duration of two years.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		5

PAYDEN U.S. GOVERNMENT FUND (continued)

The Fund is ‘‘non-diversified,’’ which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Extension Risk. Rising interest rates can cause the average maturity of the Fund’s holdings of mortgage-backed securities to lengthen unexpectedly due to a drop in prepayments. This would increase the sensitivity of the Fund to rising rates, and could cause certain of the Fund’s investments to decline in value more than they would have declined due to the rise in interest rates alone.


6		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN U.S. GOVERNMENT FUND (continued)

economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and to the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.

Affiliated Fund Risk. When the Adviser invests Fund assets in an investment company that is also managed by the Adviser, the risk presented is that, due to its own financial interest or other business considerations, the Adviser may have had an incentive to make that investment in lieu of investments by the Fund directly in portfolio securities, or in lieu of investment in investment companies sponsored or managed by others.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the six-year period, the Fund’s best quarter was 2ndQ 2010 (1.67%), and the worst quarter was 2ndQ 2013 (–1.39%).


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		7

PAYDEN U.S. GOVERNMENT FUND (continued)


Average Annual Returns Through 12/31/15	1 Year			5 Years			Since Inception (11/2/09)
Payden U.S. Government Fund

Before Taxes		0.21	%		0.96	%		1.11	%

After Taxes on Distributions		–0.33	%		0.35	%		0.44	%

After Taxes on Distributions and Sale of Fund Shares		0.12	%		0.55	%		0.66	%
Bank of America Merrill Lynch 1-5 Year Treasury Index		0.98	%		1.25	%		1.55	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

For important information about the purchase and sale of Fund shares, tax information, and financial intermediary compensation, please turn to the “Purchase and Sale of Fund Shares,” “Tax Information,” and “Payments to Broker-Dealers and Other Financial Intermediaries,” sections of this Prospectus at page 42.

PAYDEN GNMA FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.27	%
Other Expenses	0.40	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	0.92	%
Fee Waiver or Expense Reimbursement¹	0.17	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.75	%

Payden & Rygel (“Payden”) has contractually agreed that for so long as it is the investment adviser to the Fund, the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding 12b-1 Distribution Fees, interest, taxes and extraordinary expenses) will not exceed 0.50%.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (taking into account the guaranteed fee waiver or expense reimbursement for all time periods). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$77	$	240	$	417	$	930

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 15% of the average value of its long-term holdings.


8		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN GNMA FUND (continued)

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in debt securities of any maturity, and there is no limit on the Fund’s minimum or maximum average portfolio maturity.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Interest Rates. As with most bond funds, the income on and value of your shares in the Fund 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. However, falling interest rates may not affect the prices of GNMA Securities as much as the prices of comparable debt securities because the markets may discount GNMA Security prices for prepayment risk when interest rates fall. Further, the market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

U.S. Treasury and Agency Obligations. Debt obligations issued by the U.S. Treasury, which include U.S. Treasury bills, notes and bonds, are backed by the full faith and credit of the U.S. Government. Debt obligations issued by agencies chartered by the U.S. Government, which are classified as Government sponsored enterprises, may or may not be backed by the full faith and credit of the U.S. Government. For example, principal and interest payments of GNMA Securities are backed by the full faith and credit of the U.S. Government. On the other hand, FNMA and FHLMC mortgage-backed securities are not guaranteed by the U.S. Government. However, currently, each of the FNMA and FHLMC benefits from the Senior Preferred Stock Purchase Agreement it has with the U.S. Treasury which is expected to provide them with the necessary cash resources to meet their obligations. Although the U.S. Government has provided financial support to FNMA and FHLMC in the past (including as part of the Senior Preferred Stock Purchase Agreements), no assurance can be given that the U.S. Government will provide financial support in the future to these or other U.S. Government agencies, authorities or instrumentalities that are not supported by the full faith and credit of the United States.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		9

PAYDEN GNMA FUND (continued)

non-governmental issuers have defaulted on, or been forced to restructure, their debts. These conditions may continue, recur, worsen or spread. The U.S. Government and the Federal Reserve, as well as certain foreign governments and central banks, have taken steps to support financial markets, including by keeping interest rates at historically low levels. This and other government intervention may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. The Federal Reserve recently has reduced its market support activities. Further reduction or withdrawal of Federal Reserve or other U.S. or non-U.S. governmental or central bank support, including interest rate increases, could negatively affect the financial markets generally, increase market volatility and reduce the value and liquidity of certain securities held by the Fund.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:


10		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN GNMA FUND (continued)

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the five-year period, the Fund’s best quarter was 2ndQ 2010 (3.30%), and the worst quarter was 2ndQ 2013 (–3.02%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			Since Inception (11/2/09)
Payden GNMA Fund

Before Taxes		0.95	%		2.79	%		3.24	%

After Taxes on Distributions		–0.48	%		1.19	%		1.62	%

After Taxes on Distributions and Sale of Fund Shares		0.54	%		1.49	%		1.86	%
Bank of America Merrill Lynch GNMA Master Index		1.31	%		3.03	%		3.50	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PAYDEN CORE BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.28	%
Other Expenses	0.26	%
Acquired Fund Fees and Expenses	0.05	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses¹	0.84	%

The Total Annual Fund Operating Expenses in this fee table do not correlate to the ratio of expenses to average net assets given in the Financial Highlights in this Prospectus (and in the Fund’s financial statements), which reflects the Fund’s operating expenses but not Acquired Fund Fees and Expenses.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		11

PAYDEN CORE BOND FUND (continued)

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (inclusive of Acquired Fund Fees and Expenses). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$86	$	268	$	466	$	1,037

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in a wide variety of debt instruments and income-producing securities payable primarily in U.S. dollars. These include (1) debt securities issued or guaranteed by the U.S. Government, and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (2) debt securities, loans and commercial paper issued by U.S. and foreign companies; (3) U.S. and foreign mortgage-backed and asset-backed debt securities; (4) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; and (5) convertible bonds and preferred stock.

The Fund invests in debt securities of any maturity, and there is no limit on the Fund’s minimum or maximum average portfolio maturity.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


12		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN CORE BOND FUND (continued)

issuer’s ability or willingness to make such payments. A debt security’s credit rating reflects the credit risk associated with the debt obligation. Generally, higher-rated debt securities involve lower credit risk than lower-rated debt securities. Credit risk is often higher for corporate, mortgage-backed, asset-backed and foreign government debt securities than for U.S. Government debt securities.

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 fluctuate more than the market prices of investment grade debt securities and may decline more significantly in periods of general economic difficulty.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		13

PAYDEN CORE BOND FUND (continued)

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the six-year period, the Fund’s best quarter was 3rdQ 2012 (3.34%), and the worst quarter was 2ndQ 2013 (–3.09%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			Since Inception (11/2/09)
Payden Core Bond Fund

Before Taxes		0.58	%		3.55	%		3.75	%

After Taxes on Distributions		–0.52	%		2.22	%		2.44	%

After Taxes on Distributions and Sale of Fund Shares		0.34	%		2.20	%		2.38	%
Barclays Capital Aggregate Bond Index		0.55	%		3.25	%		3.63	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.


14		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN STRATEGIC INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return combined with income generation that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.55	%
Other Expenses	0.36	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	1.16	%
Fee Waiver or Expense Reimbursement¹	0.11	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	1.05	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding 12b-1 Distribution Fees, Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.80%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that operating expenses remain the same (taking into account the contractual fee waiver or expense reimbursement for the first year). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$107	$	358	$	628	$	1,399

PRINCIPAL INVESTMENT STRATEGIES:

The Fund will invest in both developed and emerging markets.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		15

PAYDEN STRATEGIC INCOME FUND (continued)

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 fluctuate more than the market prices of investment grade debt securities and may decline more significantly in periods of general economic difficulty.


16		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN STRATEGIC INCOME FUND (continued)

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		17

PAYDEN STRATEGIC INCOME FUND (continued)

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the one-year period, the Fund’s best quarter was 1stQ 2015 (2.14%), and the worst quarter was 3rdQ 2014 (–0.61%).


Average Annual Returns Through 12/31/15	1 Year			Since Inception (5/8/14)
Payden Strategic Income Fund

Before Taxes		1.53	%		1.15	%

After Taxes on Distributions		0.69	%		0.27	%

After Taxes on Distributions and Sale of Fund Shares		0.91	%		0.50	%
Barclays Capital Aggregate Bond Index		0.55	%		1.98	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PAYDEN ABSOLUTE RETURN BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return that is consistent with preservation of capital.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.50	%
Other Expenses	0.67	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	1.42	%
Fee Waiver or Expense Reimbursement¹	0.47	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	0.95	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding 12b-1 Distribution Fees, Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.70%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


18		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN ABSOLUTE RETURN BOND FUND (continued)

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that operating expenses remain the same (taking into account the contractual fee waiver or expense reimbursement for the first year). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$97	$	403	$	732	$	1,661

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. The Fund began operations on November 6, 2014. For the period from November 6, 2014 through October 31, 2015, the Fund’s portfolio turnover rate was 64% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

The Fund’s absolute return strategy seeks to have positive absolute returns over the long term, regardless of different market environments. To achieve this goal, the Fund seeks to provide total return, whether through price appreciation, or income, or a combination of both. It seeks opportunities by employing a flexible approach that evaluates security attractiveness globally, both inside and outside the U.S. Downside risk protection is a part of the strategy, but there is no guarantee or implication that negative returns will be avoided. The reference benchmark for the Fund’s absolute return strategy is the one-month London Inter-Bank Offered Rate (“LIBOR”).


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		19

PAYDEN ABSOLUTE RETURN BOND FUND (continued)

the Fund’s sensitivity to interest rate movements. The absolute return nature of the Fund, combined with its emphasis on tracking against the one-month LIBOR, will generally lead to durations that are between 5 years and negative 2 years.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Interest Rates. As with most funds that invest in debt securities, the income on and value of your shares in the Fund 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. The impact of interest rate changes on floating rate investments is typically mitigated by the periodic interest rate reset of the instruments. Generally, the market price of debt securities with longer maturities will fluctuate more in response to changes in interest rates than the market price of shorter-term securities. Interest rates have been historically low, so the Fund faces a heightened risk that interest rates may rise. The negative impact on fixed income securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

Below Investment Grade Credit. Below investment grade securities (commonly called “junk bonds”) 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 fluctuate more than the market prices of investment grade debt securities and may decline more significantly in periods of general economic difficulty.


20		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN ABSOLUTE RETURN BOND FUND (continued)

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

401(k) plans or individual retirement accounts. The returns “After Taxes on Distributions and Sale of Fund Shares” may be higher than the other return figures because they include the effect of a tax benefit an investor may receive from the capital losses that may have been incurred by an investor in connection with the sale of Fund shares.

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		21

PAYDEN ABSOLUTE RETURN BOND FUND (continued)

Year by Year Total Returns

LOGO

During the one-year period, the Fund’s best quarter was 1stQ 2015 (0.74%), and the worst quarter was 4thQ 2015 (–0.10%).


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/6/14)
Payden Absolute Return Fund

Before Taxes		0.61	%		0.42	%

After Taxes on Distributions		–0.23	%		–0.33	%

After Taxes on Distributions and Sale of Fund Shares		0.34	%		–0.01	%
Merrill Lynch 1-Month LIBOR		0.18	%		0.18	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PAYDEN HIGH INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks high current income while providing for capital appreciation by investing primarily in a diversified portfolio of below investment grade bonds.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.35	%
Other Expenses	0.32	%
Acquired Fund Fees and Expenses	0.02	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses¹	0.94	%


22		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN HIGH INCOME FUND (continued)

Example of Fund Expenses: This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same (inclusive of Acquired Fund Fees and Expenses). Although your actual expenses may be higher or lower, based on these assumptions your expenses would be:


1 Year	3 Years		5 Years		10 Years
$96	$	300	$	520	$	1,155

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in a wide variety of debt instruments and income-producing securities. These include (1) debt securities, loans and commercial paper issued by U.S. and foreign companies; (2) debt securities issued or guaranteed by the U.S. Government and foreign governments and their agencies and instrumentalities, political subdivisions of foreign governments (such as provinces and municipalities), and supranational organizations (such as the World Bank); (3) municipal securities, which are debt obligations issued by state and local governments, territories and possessions of the United States, regional governmental authorities, and their agencies and instrumentalities, the interest on which may, or may not, be exempt from Federal income tax; and (4) convertible bonds and preferred stock.

The Fund may invest up to 30% of its total assets in securities of issuers organized or headquartered in emerging market countries.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers.

The Fund primarily invests in debt securities payable in U.S. dollars and may invest in foreign currencies. The Fund may hedge this foreign currency exposure to the U.S. dollar.

PRINCIPAL INVESTMENT RISKS:


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		23

PAYDEN HIGH INCOME FUND (continued)


24		FUND SUMMARIES – U.S. BOND FUNDS		Payden Mutual Funds

PAYDEN HIGH INCOME FUND (continued)

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the six-year period, the Fund’s best quarter was 3rdQ 2010 (6.39%), and the worst quarter was 3rdQ 2011 (–5.85%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			Since Inception (11/2/09)
Payden High Income Fund

Before Taxes		–1.49	%		4.50	%		5.99	%

After Taxes on Distributions		–3.57	%		1.74	%		3.25	%

After Taxes on Distributions and Sale of Fund Shares		–0.81	%		2.52	%		3.69	%
Bank of America Merrill Lynch BB-B High Yield Cash Pay Constrained Index		–2.82	%		5.24	%		7.03	%

(The returns for the index are before any deduction for taxes, fees or expenses.)


Prospectus		FUND SUMMARIES – U.S. BOND FUNDS		25

PAYDEN HIGH INCOME FUND (continued)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

U.S. LOAN FUND

PAYDEN FLOATING RATE FUND

INVESTMENT OBJECTIVE:

The Fund’s investment objective is to seek a high level of current income through floating rate debt instruments, with a secondary objective of long-term capital appreciation.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.55	%
Other Expenses	0.29	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	1.09	%
Fee Waiver or Expense Reimbursement¹	0.09	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	1.00	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding 12b-1 Distribution Fees, Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.75%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


1 Year	3 Years		5 Years		10 Years
$102	$	338	$	592	$	1,321

PRINCIPAL INVESTMENT STRATEGIES:

Under normal market conditions, the Fund invests at least 80% of its total assets in income producing floating rate loans and other floating rate debt instruments. Floating rate loans are typically debt obligations with interest rates that adjust or “float” periodically, often on a daily, monthly, quarterly, or semiannual basis by reference to a base lending rate plus a premium.


26		FUND SUMMARIES – U.S. LOAN FUND		Payden Mutual Funds

PAYDEN FLOATING RATE FUND (continued)

priority of payment. Where an instrument ranks in priority of payment is referred to as seniority. Based on this ranking, a corporate issuer in the event of a default will direct payments such that the senior most creditors are paid first, while the most junior equity holders are paid last. In a typical structure, senior secured and unsecured creditors will be first in right of payment, followed by subordinate bond holders, junior bondholders, preferred shareholders and common shareholders. Loans are typically senior, secured debt instruments and rank highest in the capital structure of corporations. Thus, throughout this discussion, the floating rate loans in which the Fund invests are referred to as “Senior Loans.”

Under normal market conditions, the Fund invests a substantial portion of its total assets in Senior Loans and other debt instruments that are rated below investment grade (commonly called “junk bonds” ). Investment grade debt instruments are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB-), Moody’s (at least Baa3) or Fitch (at least BBB-), or are instruments that Payden determines to be of comparable quality.

The Fund’s investments in any floating rate and fixed income securities may be of any maturity.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


Prospectus		FUND SUMMARIES – U.S. LOAN FUND		27

PAYDEN FLOATING RATE FUND (continued)

Senior Loans Risk. There is less readily available, reliable information about most Senior Loans than is the case for many other types of securities. An economic downturn generally leads to a higher non-payment rate, and a Senior Loan may lose significant value before a default occurs. Moreover, any specific collateral used to secure a Senior Loan may decline in value or become illiquid, which would adversely affect the Senior Loan’s value. No active trading market may exist for certain Senior Loans, which may impair the ability of the Fund to realize full value in the event of the need to sell a Senior Loan and which may make it difficult to value Senior Loans. Also, because Payden relies mainly on its own evaluation of the creditworthiness of borrowers, the Fund is particularly dependent on portfolio management’s analytical abilities. Although Senior Loans in which the Fund will invest generally will be secured by specific collateral, there can be no assurance that liquidation of such collateral would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal or that such collateral could be readily liquidated. Transactions in Senior Loans and other loans may settle on a delayed basis (which in some cases may be several weeks or longer). As a result, the proceeds from the sale of a loan may not be immediately available to make additional investments or to meet the Fund’s redemption obligations. Senior Loans and other loans may not be considered “securities” for certain purposes, and purchasers (such as the Fund) therefore may not be entitled to rely on the anti-fraud protections and other safeguards provided by U.S. federal securities laws.


28		FUND SUMMARIES – U.S. LOAN FUND		Payden Mutual Funds

PAYDEN FLOATING RATE FUND (continued)

Mortgage-Backed/Asset-Backed Securities. Investing in mortgage-backed and asset-backed securities pose additional risks, principally with respect to increased prepayment risk. Many mortgage-backed securities and asset-backed securities may be prepaid prior to maturity. During periods of falling interest rates, prepayments may accelerate, which would require the Fund to reinvest the proceeds at a lower interest rate.

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment. As noted above in the Principal Investment Strategies discussion, the Fund expects in particular to use interest rate swaps. A principal risk of interest rate swaps is that the Fund’s investment adviser could incorrectly forecast interest rates.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the two-year period, the Fund’s best quarter was 1stQ 2015 (2.10%), and the worst quarter was 4thQ 2015 (–0.77%).


Prospectus		FUND SUMMARIES – U.S. LOAN FUND		29

PAYDEN FLOATING RATE FUND (continued)


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/11/13)
Payden Floating Rate Fund

Before Taxes		1.77	%		1.69	%

After Taxes on Distributions		0.51	%		0.43	%

After Taxes on Distributions and Sale of Fund Shares		1.01	%		0.71	%

Credit Suisse BB-B Loan Index		2.65	%		2.24	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

GLOBAL BOND FUNDS

PAYDEN EMERGING MARKETS BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.45	%
Other Expenses	0.31	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	1.01	%


1 Year	3 Years		5 Years		10 Years
$103	$	322	$	558	$	1,236

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 54% of the average value of its long-term holdings.


30		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS BOND FUND (continued)

PRINCIPAL INVESTMENT STRATEGIES:

Under normal market conditions, the Fund invests at least 80% of its total assets in debt securities and similar debt instruments issued by governments, agencies and instrumentalities of emerging market countries (or economically linked with such securities), and other issuers organized, headquartered or principally located in emerging market countries. Generally, an “emerging market country” is any country which the International Monetary Fund, the World Bank, the International Finance Corporation or the United Nations defines as having an emerging or developing economy.

The Fund may invest up to 20% of its total assets in other debt securities and similar debt instruments, including those of issuers located in countries with developed securities markets.

The Fund invests a majority of its assets in debt securities payable in U.S. dollars, but will also invest in debt securities payable in foreign currencies.

The Fund may invest up to 10% of its total assets in equity securities of U.S. or foreign issuers, and may use derivatives to gain exposure to such equity markets.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		31

PAYDEN EMERGING MARKETS BOND FUND (continued)

developed countries. In addition to all of the risks of investing in foreign developed markets, emerging markets are more susceptible to governmental interference, local taxes being imposed on foreign investments, restrictions on gaining access to sales proceeds, and less liquid and efficient trading markets.


32		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS BOND FUND (continued)

holdings in the Fund could adversely affect the Fund’s performance. If the Fund is forced to liquidate its assets under unfavorable conditions or at inopportune times, the value of the Fund’s shares may decline.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the six-year period, the Fund’s best quarter was 3rdQ 2010 (8.41%), and the worst quarter was 2ndQ 2013 (–7.40%).


Average Annual Returns Through 12/31/15	1 Year			5 Years			Inception (11/2/09)
Payden Emerging Markets Bond Fund
Before Taxes		–1.07	%		3.86	%		5.40	%
After Taxes on Distributions		–3.10	%		1.65	%		3.23	%
After Taxes on Distributions and Sale of Fund Shares		–0.58	%		2.23	%		3.45	%
J.P. Morgan EMBI Global Diversified Index		1.18	%		5.36	%		6.54	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		33

PAYDEN EMERGING MARKETS LOCAL BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.60	%
Other Expenses	0.38	%
Acquired Fund Fees and Expenses	0.02	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	1.25	%


1 Year	3 Years		5 Years		10 Years
$127	$	397	$	686	$	1,511

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 106% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

The Fund may invest up to 20% of its total assets in debt instruments and income-producing securities that are not Bonds, including for example loans made by U.S. and foreign companies.


34		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS LOCAL BOND FUND (continued)

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Local Currency. Because the Fund’s emphasis will be on investing in securities denominated in the currencies of emerging market countries, the Fund is subject to the significant risk that it could experience losses based solely on the weakness of foreign currencies versus the U.S. dollar and changes in the exchange rates between such currencies and the U.S. dollar.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		35

PAYDEN EMERGING MARKETS LOCAL BOND FUND (continued)

several weeks or longer. The Fund will not receive sales proceeds until settlement occurs, which may constrain the Fund’s ability to meet redemption requests or other obligations. Illiquid assets may also be difficult to value. If the Fund must sell illiquid assets to meet redemption requests or other cash needs, the Fund may be unable to sell such assets at an advantageous time or price or achieve its desired level of exposure to certain market segments. Liquidity risk may result from the lack of an active market, as well as the reduced number and capacity of traditional market participants to make a market in fixed income securities. Liquidity risk is likely to be magnified in a rising interest rate environment or other circumstances where investor redemptions from fixed income mutual funds are higher than normal.

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment. As noted above in the Principal Investment Strategies discussion, the Fund expects in particular to use interest rate swaps. A principal risk of interest rate swaps is that the Fund’s investment adviser could incorrectly forecast interest rates.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:


36		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS LOCAL BOND FUND (continued)

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the four-year period, the Fund’s best quarter was 1stQ 2012 (7.95%), and the worst quarter was 3rdQ 2015 (–10.03%).


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/2/11)
Payden Emerging Markets Local Bond Fund

Before Taxes		–14.99	%		–5.80	%

After Taxes on Distributions		–14.99	%		–6.48	%

After Taxes on Distributions and Sale of Fund Shares		–6.69	%		–3.68	%
J.P. Morgan GBI-EM Diversified Index		–14.92	%		–4.63	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

Portfolio Manager. Kristin Ceva, Chartered Financial Analyst (“CFA”), is a Managing Principal and portfolio manager. Ms. Ceva has been with Payden since 1998. Arthur Hovsepian, CFA, is a Principal and portfolio manager. Mr. Hovsepian has been with Payden since 2004. Darren Capeloto is a Senior Vice President and portfolio manager. Mr. Capeloto has been with Payden since 2001.

PAYDEN EMERGING MARKETS CORPORATE BOND FUND

INVESTMENT OBJECTIVE:

The Fund seeks a high level of total return.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of this Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.80	%
Other Expenses	0.53	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	1.58	%
Fee Waiver or Expense Reimbursement¹	0.38	%
Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement	1.20	%

Payden & Rygel (“Payden”) has contractually agreed to waive its investment advisory fee or reimburse Fund expenses to the extent that the Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding 12b-1 Distribution Fees, Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) exceed 0.95%. This agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Fund’s Board of Trustees.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		37

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)


1 Year	3 Years		5 Years		10 Years
$122	$	462	$	825	$	1,846

Portfolio Turnover. The Fund incurs transaction costs when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 93% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:

The Fund may invest up to 20% of its total assets in other debt securities and similar debt instruments, including those of issuers located in countries with developed securities markets.

The Fund may invest up to 20% of its total assets in equity securities of U.S. or foreign issuers, and may use derivatives to gain exposure to such equity markets.

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:


38		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)

securities resulting from such rate increases could be swift and significant. A general rise in interest rates may cause investors to move out of fixed income securities on a large scale, which could adversely affect the price and liquidity of fixed income securities and could also result in increased redemptions from the Fund.

Derivatives. The use of derivatives can lead to losses due to: (1) adverse movements in the price or value of the asset, index, rate or instrument underlying a derivative; (2) failure of a counterparty; or (3) tax or regulatory constraints. Derivatives may create economic leverage in the Fund, which magnifies the Fund’s sensitivity to market events and the underlying instrument. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. When derivatives are used to gain or limit exposure to a particular market or market segment, their performance may not correlate as expected to the performance of such market thereby causing the Fund to fail to achieve its original purpose for using such derivatives. A decision as to whether, when and how to use derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Derivative instruments may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment.


Prospectus		FUND SUMMARIES – GLOBAL BOND FUNDS		39

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)

owns. Moreover, purchasing stocks perceived to be undervalued brings additional risks. For example, the issuing company’s condition may worsen instead of improve, or the pace and extent of any improvement may be less than expected.

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the two-year period, the Fund’s best quarter was 2ndQ 2014 (3.74%), and the worst quarter was 3rdQ 2015 (–3.26%).


Average Annual Returns Through 12/31/15	1 Year			Since Inception (11/11/13)
Payden Emerging Markets Corporate Fund

Before Taxes		–1.30	%		2.05	%

After Taxes on Distributions		–3.03	%		–0.05	%

After Taxes on Distributions and Sale of Fund Shares		–0.71	%		0.61	%

JP Morgan CEMBI Diversified Index		1.30	%		3.30	%

(The returns for the index are before any deduction for taxes, fees or expenses.)


40		FUND SUMMARIES – GLOBAL BOND FUNDS		Payden Mutual Funds

PAYDEN EMERGING MARKETS CORPORATE BOND FUND (continued)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

U.S. EQUITY FUND

PAYDEN EQUITY INCOME FUND

INVESTMENT OBJECTIVE:

The Fund seeks growth of capital and some current income.

FEES AND EXPENSES:

The following table shows the fees and expenses you may pay if you buy and hold shares of the Fund.


Shareholder Fees (fees paid directly from your investment)	None
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fee	0.50	%
Other Expenses	0.30	%
Distribution (12b-1) Fees	0.25	%
Total Annual Fund Operating Expenses	1.05	%


1 Year	3 Years		5 Years		10 Years
$107	$	334	$	579	$	1,283

Portfolio Turnover. The Fund incurs transaction costs, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 48% of the average value of its long-term holdings.

PRINCIPAL INVESTMENT STRATEGIES:


Prospectus		FUND SUMMARIES – U.S. EQUITY FUND		41

PAYDEN EQUITY INCOME FUND (continued)

The Fund is “non-diversified,” which means that Payden may from time to time invest a larger percentage of the Fund’s assets in securities of a limited number of issuers.

PRINCIPAL INVESTMENT RISKS:

Management Risk. The investment techniques and analysis used by the Fund’s portfolio managers may not produce the desired results.

PAST FUND PERFORMANCE:

Updated performance information for the Fund may be found on the Fund’s Internet site at payden.com. Past performance (before and after taxes) is no guarantee of future results.

Year by Year Total Returns

LOGO

During the four-year period, the Fund’s best quarter was 1stQ 2013 (12.64%), and the worst quarter was 3rdQ 2015 (–4.28%)


42		FUND SUMMARIES – U.S. EQUITY FUND		Payden Mutual Funds

PAYDEN EQUITY INCOME FUND (continued)


Average Annual Returns Through 12/31/15	1 Year			Since Inception (12/1/11)
Payden Equity Income Fund

Before Taxes		1.49	%		12.41	%

After Taxes on Distributions		0.94	%		11.23	%

After Taxes on Distributions and Sale of Fund Shares		1.27	%		9.60	%
Russell 1000 Value Index		–3.82	%		14.40	%

(The returns for the index are before any deduction for taxes, fees or expenses.)

MANAGEMENT:

Investment Adviser. Payden & Rygel is the Fund’s investment adviser.

PURCHASE AND SALE OF FUND SHARES:

The minimum initial and subsequent additional investment amounts for the Adviser Class of each of the Funds for each type of account are as follows:


ACCOUNT TYPE	INITIAL INVESTMENT		ADDITIONAL INVESTMENT
Regular	$	5,000	$	250
Tax-Sheltered	$	2,000	$	250
Electronic Investment
Set schedule	$	2,000	$	250
No set schedule	$	5,000	$	250
Automatic Exchange		NA	$	250

You may redeem shares of any of the Funds by contacting the Funds in writing, at Payden Mutual Funds, P.O. Box 1611, Milwaukee, WI 53201-1611, by calling 1-800-572-9336, via the Funds’ Internet site at payden.com or through a financial intermediary. Purchases and redemptions by telephone are only permitted if you previously established these options on your account.

TAX INFORMATION:

The Funds’ distributions are taxable, and will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Tax-deferred amounts may be subject to tax later.

PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES:

If you purchase a Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend a Fund over another investment. Ask your salesperson or visit your financial intermediary’s Internet site for more information.


Prospectus		MORE ABOUT INVESTMENT STRATEGIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS		43

In addition, this section discusses the policies on the disclosure of each Fund’s portfolio holdings.

INFLATION-INDEXED SECURITIES

Each U.S. Bond Fund, the Payden Floating Rate Fund and each Global Bond Fund may invest in inflation-indexed securities. Unlike a conventional bond, on which the issuer makes regular fixed interest payments and repays the face value of the bond at maturity, an inflation-indexed security provides principal and interest payments that are adjusted over time to reflect inflation — a rise in the general price level. Inflation-indexed securities are designed to provide a “real rate of return” — a return after adjusting for the impact of inflation, which erodes the purchasing power of an investor’s portfolio. This adjustment is a key feature, although during a period of deflation principal and interest payments on inflation-indexed securities will be adjusted downward, and an investing Fund will be subject to deflation risk with respect to these investments. The price of inflation-indexed securities is affected by fluctuations in “real” interest rates (the component of interest rates not tied to investor expectations of future inflation). A rise in real interest rates will generally cause the price of an inflation-indexed security to fall, while a decline in real interest rates will generally increase the price of an inflation-indexed security.

MORTGAGE-BACKED SECURITIES

Each U.S. Bond Fund, the Payden Floating Rate Fund and each Global Bond Fund may invest in obligations issued to provide financing for U.S. residential housing and commercial mortgages. Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), the Payden Floating Rate Fund and each Global Bond Fund may also invest in foreign mortgage-related securities. On the credit side, the market’s perception of the creditworthiness of the Federal agency or private entity issuing the obligation, or of the credit quality of the underlying assets, for example the sub-prime segment of the mortgage-backed securities market, may have a negative impact on the value of the obligation. Further, certain commercial mortgage-backed securities are issued in several classes with different levels of yield and credit protection. An investment in the lower classes of a commercial mortgage-backed security with several classes will have greater risks than an investment in the higher classes, including greater interest rate, credit and prepayment risks. With respect to prepayment risk, payments made on the underlying mortgages and passed through to an investing Fund represent both regularly scheduled principal and interest payments, as well as prepayments of principal. Mortgage-backed securities may be prepaid prior to maturity, and hence the actual life of the security cannot be accurately predicted. During periods of falling interest rates, prepayments may accelerate, which would require an investing Fund to reinvest the proceeds at a lower interest rate. During periods of rising interest rates, prepayments may occur more slowly than anticipated, extending the effective duration of these assets at below market interest rates and causing their market prices to decline more than they would have declined due to the rise in interest rates alone. Although generally rated investment grade, the securities could become illiquid or experience losses if the mortgages default or if guarantors or insurers default.

ASSET-BACKED SECURITIES

Each U.S. Bond Fund, the Payden Floating Rate Fund and each Global Bond Fund may invest in U.S. asset-backed securities, which represent undivided fractional interests in trusts with assets consisting of a pool of loans such as motor vehicle retail installment sales contracts or credit card receivables. Each U.S. Bond Fund (except the Payden U.S. Government and Payden GNMA Funds), the Payden Floating Rate Fund and each Global Bond Fund may also invest in foreign asset-backed securities. The credit quality of most asset-backed securities depends primarily on the credit quality of the assets underlying such securities, how well the entity issuing the security is insulated from the credit risk of the originator of the debt obligations or any other affiliated entities and the amount and quality of any credit support provided to the securities. In addition, certain asset-backed securities are based on loans that are unsecured, which means that there is no collateral to seize if the underlying borrower defaults. With respect to prepayment risk, payments by these securities are typically made monthly, consisting of both principal and interest payments. Asset-backed securities may be prepaid prior to maturity, and hence the actual life of the security cannot be accurately predicted. During periods of falling interest rates, prepayments may accelerate, which would require an investing Fund to reinvest the proceeds at a lower interest rate. During periods of rising interest rates, prepayments may occur more slowly than anticipated, extending the effective duration of these assets at below market interest rates and causing their market prices to decline more than they would have declined due to the rise in interest rates alone. Although generally rated investment grade, the securities could become illiquid or experience losses if the loans default or if guarantors or insurers default.


44		MORE ABOUT INVESTMENT STRATEGIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS		Payden Mutual Funds

U.S. GOVERNMENT AND AGENCY SECURITIES

SENIOR LOANS


Prospectus		MORE ABOUT INVESTMENT STRATEGIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS		45

Although Senior Loans in which a Fund will invest generally will be secured by specific collateral, there can be no assurance that liquidation of such collateral would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal or that such collateral could be readily liquidated. In the event of the bankruptcy of a borrower, a Fund could experience delays or limitations with respect to its ability to realize the benefits of the collateral securing a Senior Loan. If the terms of a Senior Loan do not require the borrower to pledge additional collateral in the event of a decline in the value of the already pledged collateral, a Fund will be exposed to the risk that the value of the collateral will not at all times equal or exceed the amount of the borrower’s obligations under the Senior Loans. To the extent that a Senior Loan is collateralized by stock in the borrower or its subsidiaries, such stock may lose all of its value in the event of the bankruptcy of the borrower. Uncollateralized Senior Loans involve a greater risk of loss. Some Senior Loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate the Senior Loans to presently existing or future indebtedness of the borrower or take other action detrimental to lenders, including a Fund. Such court action could under certain circumstances include invalidation of Senior Loans. Transactions in Senior Loans and other loans in which a Fund may invest may settle on a delayed basis (which in some cases may be several weeks or longer). As a result, the proceeds from the sale of a loan may not be immediately available to make additional investments or to meet a Fund’s redemption obligations. Senior Loans and other loans may not be considered “securities” for certain purposes, and purchasers (such as the Fund) therefore may not be entitled to rely on the anti-fraud protections and other safeguards provided by U.S. federal securities laws.

LOAN PARTICIPATIONS AND ASSIGNMENTS

EXCHANGE-TRADED FUNDS

Each Fund may invest in exchange-traded funds (“ETFs”) and other broad market derivative instruments, subject to limitations in amount set forth in regulations under the Investment Company Act of 1940, as amended. These limitations are described under “Investments in Exchange-Traded Funds” in the section on “Investment Strategies/Techniques and Related Risks” in the Statement of Additional Information, a copy of which is available, free of charge, on the Funds’ Internet site at payden.com.

ETFs are shares of a portfolio designed to track closely the performance of any one or an array of market indexes. Examples include the S&P 500 Index and the MSCI Europe Index. ETFs trade on the American Stock Exchange, the Chicago Board Options Exchange and the New York Stock Exchange in the same way shares of publicly held companies trade on such exchanges. They may be traded any time during normal trading hours, using all of the portfolio management approaches associated with stocks, e.g., market orders, limit orders, or stop orders. They are also subject to the risks of trading halts due to market conditions or other reasons. In addition, investment in an ETF by a Fund will involve duplication of expenses, as it will require payment by the Fund of its pro rata share of advisory and administrative fees charged by the ETF.

BELOW INVESTMENT GRADE DEBT OBLIGATIONS

The Payden High Income Fund, the Payden Floating Rate Fund and each Global Bond Fund may invest in below investment grade debt obligations (commonly called “high yield bonds” or “junk bonds”). Investment grade debt securities are rated within the four highest grades by at least one of the major rating agencies, such as Standard & Poor’s (at least BBB–), Moody’s (at least Baa3) or Fitch (at least BBB–), or are securities determined by Payden to be of comparable quality. Further information regarding investment ratings is in Appendix A.


46		MORE ABOUT INVESTMENT STRATEGIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS		Payden Mutual Funds

FOREIGN INVESTMENTS

Each Fund (except the Payden U.S. Government and Payden GNMA Funds) may invest in securities of foreign issuers (“foreign securities”). Investing in foreign securities involves certain risks and considerations not typically associated with investing in U.S. securities, including less publicly available information and less governmental regulation and supervision of foreign stock exchanges, brokers and issuers. Foreign issuers are not usually subject to uniform accounting, auditing and financial reporting standards, practices and requirements. Foreign issuers are subject to the possibility of expropriation, nationalization, confiscatory taxation, adverse changes in investment or exchange control regulation, political instability and restrictions in the flow of international capital. Some foreign securities are less liquid and have more volatile prices than U.S. securities. In addition, settling transactions in foreign securities may take longer than U.S. securities. Obtaining and enforcing judgments against foreign entities may be more difficult than obtaining and enforcing judgments against domestic entities.

FOREIGN CURRENCY TRANSACTIONS

Each Fund (except the Payden U.S. Government and Payden GNMA Funds) normally conducts its foreign currency exchange transactions either on a spot (cash) basis at the spot rate prevailing in the foreign currencies, or on a forward basis (contracts to purchase or sell a specified currency at a specified future date and price). None of these Funds will generally enter into a forward contract with a term of greater than one year. Although forward contracts are used primarily to protect a Fund from adverse currency movements, they may also be used to increase exposure to a currency, and involve the risk that anticipated currency movements will not be accurately predicted and a Fund’s total return will be adversely affected as a result. Open positions in forward contracts are covered by the segregation with the Fund’s custodian of cash, U.S. Government securities or other debt obligations and are marked-to-market daily.

EMERGING MARKETS

Each Fund (except the Payden U.S. Government, Payden GNMA and Payden Floating Rate Funds) may invest in securities of issuers organized or headquartered in emerging market countries. Foreign investment risks (including those described above) are generally greater for securities of such companies. These countries may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities, making trades difficult. Brokerage commissions, custodial services and other similar investment costs are generally more expensive than in the United States. In addition, securities of issuers located in these countries tend to have volatile prices and may offer significant potential for loss as well as gain. Rising interest rates could negatively impact the value of emerging market debt and increase funding costs for foreign issuers. In such a scenario, foreign issuers might not be able to service their debt obligations and the market for emerging market debt could suffer from reduced liquidity.

DEPOSITARY RECEIPTS

dollar-denominated security issued by a U.S. bank or trust company, which represents, and may be converted into, the underlying security that is issued by a foreign company. Generally, EDRs and GDRs represent similar securities, but are issued by European banks and depositories, respectively. ADRs, EDRs and GDRs may be denominated in a currency different from that of the underlying securities into which they may be converted. Typically, ADRs, in registered form, are designed for issuance in U.S. securities markets, and EDRs, in bearer form, are designed for issuance in European securities markets. ADRs may be sponsored by the foreign issuer or may be unsponsored. Unsponsored ADRs are organized independently and without the cooperation of the foreign issuer of the underlying securities. As a result, available information regarding the issuer may not be as current as for sponsored ADRs, and the prices of unsponsored ADRs may be more volatile than if they were sponsored by the issuers of the underlying securities.

DELAYED DELIVERY TRANSACTIONS


Prospectus		MORE ABOUT INVESTMENT STRATEGIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS		47

loss. As a matter of operating policy, a Fund will not invest more than 50% of its total assets in when-issued and delayed delivery transactions.

DERIVATIVE INSTRUMENTS

Each Fund may use derivative instruments for risk management purposes or otherwise as part of its investment strategies. Generally, derivatives are financial contracts whose values depend on, or are derived from, the value of an underlying asset, reference rate or index, and may relate to stocks, bonds, interest rates, currencies or currency exchange rates, commodities, and related indexes. Examples of derivative instruments include options contracts, futures contracts, options on futures contracts and swap agreements (including, but not limited to, interest rate, total return and credit default swaps). Each such Fund may invest some or all of its assets in derivative instruments. Such Funds typically use derivatives as a substitute for taking a position in the underlying asset or as part of a strategy designed to reduce exposure to other risks, such as interest rate risk or currency risk. Such Funds may also use derivatives for leverage, in which case their use would involve leverage risk. A portfolio manager may decide not to employ any of these strategies and there is no assurance that any derivatives strategy used by such a Fund will succeed. A description of these and other derivative instruments that the Funds may use are described under “Derivative Instruments” in the section on “Investment Strategies/Techniques and Related Risks” in the Statement of Additional Information, a copy of which is available, free of charge, on the Funds’ Internet site at payden.com.

Leverage Risk. Because many derivatives have a leverage component, adverse changes in the value or level of the underlying asset, reference rate or index can result in a loss substantially greater than the amount invested in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When a Fund uses derivatives for leverage, investments in that Fund will tend to be more volatile, resulting in larger gains or losses in response to market changes. To limit leverage risk, each Fund will segregate assets determined to be liquid Payden in accordance with established procedures, or, as permitted by applicable regulation, enter into certain offsetting positions, to cover its obligations under derivative instruments.


48		MORE ABOUT INVESTMENT STRATEGIES, RELATED RISKS AND DISCLOSURE OF PORTFOLIO HOLDINGS		Payden Mutual Funds

Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indexes. Many derivatives, in particular privately negotiated derivatives, are complex and often valued subjectively. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to a Fund. Also, the value of derivatives may not correlate perfectly, or at all, with the value of the assets, reference rates or indexes they are designed to closely track. In addition, a Fund’s use of derivatives may cause the Fund to realize higher amounts of short-term capital gains (taxed at ordinary income tax rates) than if the Fund had not used such instruments.

TEMPORARY DEFENSIVE MEASURES

PORTFOLIO TURNOVER

DISCLOSURE OF FUND PORTFOLIO HOLDINGS

OTHER INVESTMENTS AND TECHNIQUES

MANAGEMENT OF THE FUNDS

INVESTMENT ADVISER

Payden, located at 333 South Grand Avenue, Los Angeles, California 90071, serves as investment adviser to each of the Funds pursuant to an Investment Advisory Agreement. Payden is an investment counseling firm founded in 1983, and has approximately $95 billion of assets under management as of February 29, 2016.

Kristin Ceva is a Managing Principal who joined Payden in 1998 and has 24 years experience in the investment management business. Nigel Jenkins is a Managing Principal. He joined Payden in 2006 and has 27 years experience in the investment management business. Asha Joshi is a Managing Principal. She joined Payden in 1994 and has 31 years experience in the investment management business. Brian Matthews is a Managing Principal who joined Payden in 1986 and has 34 years experience in the investment management business. Joan Payden is President, CEO and the founder of Payden. She has over 40 years experience in the investment management business. Michael Salvay is a Managing Principal who joined Payden in 1997 and has 31 years experience in the investment management business. James Sarni is a Managing Principal. He joined Payden in 1991 and has 33 years experience in the investment management business. Mary Beth Syal is a Managing Principal who joined Payden in 1991 and has 31 years experience in the investment management business. Scott Weiner is a Managing Principal. He joined Payden in 1993 and has 32 years experience in the investment management business. Mr. Wong is a Managing Principal who joined Payden in 1995 and has 24 years experience in the investment management business.


Prospectus		MANAGEMENT OF THE FUNDS		49

Fund Portfolio Managers. Payden typically follows a team approach in the management of the Funds, in which different teams of Payden personnel are responsible for the day-to-day management of the Funds within the broad investment parameters established by the Investment Policy Committee. Each team meets regularly to review portfolio holdings and discuss purchase and sales activity of all accounts in the strategy, including a particular Fund or group of Funds. The portfolio managers, who are generally team leaders or senior investment personnel on the team, are supported by other members of the team. These include research analysts and other investment professionals who provide research support, make securities recommendations and generally support the portfolio managers in all activities. Members of a team may change from time to time, and the team leaders and senior investment personnel who are identified as the portfolio manager or managers for a Fund may also change from time to time. The current portfolio managers for each of the Funds are as follows:

U.S. Government Fund and GNMA Fund. David Ballantine, Chartered Financial Analyst (“CFA”), a Principal and portfolio manager, and Gary Greenberg, CFA, a Senior Vice President and portfolio manager, have overall responsibility for the Funds’ investments, including portfolio construction, broad security selection and risk assessment. Mr. Ballantine has been with Payden since 1991 and in the investment management business for 27 years, and Mr. Greenberg has been with Payden and in the investment management business for 21 years.

Emerging Markets Bond Fund. Kristin Ceva, CFA, Managing Principal and portfolio manager, has overall responsibility over the broad aspects of the Fund’s investments, and she, together with Arthur Hovsepian, CFA, Principal and portfolio manager, and Vladimir Milev, CFA, Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Hovsepian has been with Payden since 2004 and in the investment management business for 21 years. Mr. Milev has been with Payden and in the investment management business since 2003.

Emerging Markets Local Bond Fund. Kristin Ceva has overall responsibility over the broad aspects of the Fund’s investments, and she, together with Arthur Hovsepian, CFA, Principal and portfolio manager, and Darren Capeloto, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Capeloto has been with Payden since 2001 and in the investment management business for 20 years.

Emerging Markets Corporate Bond Fund. Kristin Ceva has overall responsibility over the broad aspects of the Fund’s investments, and she, together with Natalie Trevithick, CFA, a Senior Vice President and portfolio manager, and Vladimir Milev, deal with portfolio construction, broad security selection and risk assessment. Ms. Trevithick has been with Payden since 2012 and in the investment management business for 15 years.

Equity Income Fund. James Wong, CFA, Managing Principal and portfolio manager, has overall responsibility over the broad aspects of the Fund’s investments, and he and Frank Lee, CFA, a Senior Vice President and portfolio manager, deal with portfolio construction, broad security selection and risk assessment. Mr. Lee has been with Payden since 2004 and in the investment management business for 17 years.

As indicated under the “Fees and Expenses” section of certain Fund Summarizes above, Payden has contractually agreed that, for so long as it acts as investment adviser to those particular Funds, the Total Annual Fund Operating Expenses (excluding Rule 12b-1 Distribution Fees, Acquired Fund Fees and Expenses, interest and taxes) of each of those Funds will not exceed the percentage indicated of the particular Fund’s average daily net assets on an annualized basis. In addition, Payden, where indicated under the “Fees and Expenses” section of certain Fund presentations above, has also contractually agreed to temporarily limit the Fund’s Total Annual Fund Operating Expenses After Fee Waiver or Expense Reimbursement (excluding 12b-1 Distribution Fees, Acquired Fund Fees and Expenses, interest, taxes and extraordinary expenses) of each of those Funds to the percentage indicated of the Fund’s average daily net assets on an annualized basis. This Agreement has a one-year term ending February 28, 2017; it may be renewed and may be amended by approval of a majority of the Board of Trustees of The Payden & Rygel Investment Group (the “P&R Trust”). Each Fund remains liable to Payden for expenses subsidized in any fiscal year up to a maximum of three years from the end of


50		MANAGEMENT OF THE FUNDS		Payden Mutual Funds

the period in which the expenses were subsidized. However, for any Fund in any given year, the level of reimbursement cannot cause the Fund’s annual expense ratio to exceed the contractual expense limits discussed above.

For the fiscal year ended October 31, 2015, Payden earned a fee as a percentage of each Fund’s average net assets, net of expense reimbursements or fee waivers, from each Fund as follows: Payden U.S. Government Fund, 0.14%; Payden GNMA Fund, 0.10%; Payden Core Bond Fund, 0.28%; Payden Strategic Income Fund, 0.44%; Payden Absolute Return Bond Fund, 0.03%; Payden High Income Fund, 0.35%; Payden Floating Rate Fund, 0.46%; Payden Emerging Markets Bond Fund, 0.45%; Payden Emerging Markets Local Bond Fund, 0.59%; Payden Emerging Markets Corporate Bond Fund, 0.42%; and Payden Equity Income Fund, 0.50%.

A discussion regarding the basis for the approval by the P&R Trust Board of Trustees of the Investment Advisory Agreement for each Fund is available in the Funds’ Annual Report for the fiscal year ended October 31, 2015, under the heading “Approval of Investment Advisory Agreement.” The Annual Report is available, free of charge, on the Funds’ Internet site at payden.com.

SHAREHOLDER INFORMATION

PRICING OF FUND SHARES: NET ASSET VALUE

The net asset value per share of each Fund is determined each day the New York Stock Exchange is open for trading as of the close of regular trading (normally 4:00 p.m. Eastern Time) by dividing the difference between the value of assets and liabilities of the Fund by the number of shares outstanding and rounding to the nearest penny.

Debt Securities. Domestic and foreign debt securities and other assets for which market quotations are readily available (other than obligations with original maturities of 60 days or less) are valued at market on the basis of quotes obtained from pricing services. If a Fund’s investment adviser determines that a pricing service does not provide accurate pricing for a fixed income security, the adviser may provide pricing information for that security. Such pricing information takes into account appropriate factors such as quotes obtained by brokers and dealers, institutional-sized trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Debt securities with original maturities of 60 days or less are valued at amortized cost, which approximates fair value.

Derivatives. Options, futures, swaps and other similar instruments are valued at the official closing price in the case of exchange traded derivatives or on the basis of information provided by the institution with which a Fund entered into the transaction in the case of other securities.


Prospectus		SHAREHOLDER INFORMATION		51

HOW TO PURCHASE SHARES

To open a tax-sheltered retirement plan, such as an individual retirement account (“IRA”), you must complete special application forms. Please be sure to ask for an IRA information kit.

By Check

1. Complete the New Account Application.

2. Make the check payable to the “Payden Funds” and mail the check, along with the application, to:

Payden Mutual Funds

P.O. Box 1611

Milwaukee, WI 53201-1611

By Federal Funds Wire

1. Complete the New Account Application and mail it to:

Payden Mutual Funds

P.O. Box 1611

Milwaukee, WI 53201-1611

2. Wire funds to the Transfer Agent as follows when the application has been processed:

UMB Bank, N.A.

1010 Grand Blvd.

Kansas City, MO 64106

ABA 101000695

DDA 9871063062

Credit to: Payden Funds

For further credit to: Investor Mutual Fund Account Number

Name or Account Registration

Identify which Fund or Funds to Purchase

3. Please call 1-800-572-9336, to advise of any purchases by wire.

Your purchase will be based on the net asset value per share next determined after the Fund receives your order. It will accept purchase orders only on days on which the Fund is open for business.


52		SHAREHOLDER INFORMATION		Payden Mutual Funds

Shareholder Servicing Plan. The P&R Trust has adopted a Shareholder Servicing Plan with respect to each Fund, which provides for a fee payable to broker-dealers and other financial intermediaries for shareholder services provided to Fund shareholders who invest in that particular Fund through the intermediary. The fee is payable at an annual rate not to exceed 0.25% of the Fund’s average daily net assets invested through the intermediary. Because these fees are paid out of the particular Fund’s assets, over time these fees will increase the cost of your investment in that Fund.

Rule 12b-1 Distribution Plan. The P&R Trust has adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, that allows the Adviser Class of each of the Funds to pay asset-based sales charges or distribution and services fees for the distribution, sale or servicing of its shares. These activities include advertising, compensation to the Funds’ distributor and others for sales and marketing activities and materials and related shareholder servicing. The fee is payable at an annual rate of 0.25% of the average daily net assets of the Adviser Class of each of the Funds. As indicated in the table in the “Fees and Expenses” discussion for each of the Funds, this fee is included in the Total Annual Fund Operating Expenses for each Fund. Because these fees are paid out of a Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.

Exchange Privilege. Shares of any Fund may be exchanged for shares of any other mutual fund of the P&R Trust, provided that the minimum initial investment amount for the specific share class of the mutual fund has been met. Otherwise, the minimum amount for any exchange is $250. Because an exchange is considered a redemption and purchase of shares, you may realize a gain or loss for Federal income tax purposes.

In general, a Fund must receive written exchange instructions signed by all account owners. If you complete the telephone privilege authorization portion of the applicable New Account Application or applicable Account Privileges Change Form, you may make exchanges by calling 1-800-572-9336. You may also make exchanges via the Funds’ Internet site at payden.com using the Account Access function (user registration required). Finally, you may participate in the Automatic Exchange Program, described below under “Automated Investment Programs,” to automatically redeem a fixed amount from any Fund for investment in another Fund on a regular basis. Each Fund may modify or discontinue this exchange privilege at any time on 60 days notice. Each Fund also reserves the right to limit the number of exchanges you may make in any year to avoid excessive Fund expense.


Prospectus		SHAREHOLDER INFORMATION		53

Automated Investment Programs. You may use two programs for automated investments in the Funds.

Under the second option, you may also elect to authorize transfers through the ACH by calling 1-800-572-9336, or via the Funds’ Internet site at payden.com using the Account Access function (user registration required). Money will be withdrawn from your account at your financial institution only when you authorize it. If the Fund receives your telephone request or internet request before the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time), the investment will be based on the net asset value per share determined that day. For telephonic requests or internet requests received after the close of regular trading on the New York Stock Exchange, the investment will be based on the net asset value per share determined on the next business day.

Please note the following guidelines:

Your financial institution must be a member of the ACH.

You must complete and return an Account Privileges Change Form along with a voided check or deposit slip, and it must be received by the Fund at least 15 days before the initial transaction.

You must establish an account with the Fund before the Electronic Investment Plan goes into effect.

The Electronic Investment Plan will automatically terminate if all your shares are redeemed, or if your financial institution rejects the transfer for any reason, e.g., insufficient funds.

Automatic Exchange Program. With respect to the Funds offered in this Prospectus, you may participate in the Automatic Exchange Plan to automatically redeem a fixed amount from one Fund for investment in another Fund on a regular basis. You can elect this option by completing the appropriate Automated Investment Programs form to determine the periodic schedule (monthly or quarterly) and exchange amount (minimum amount of $1,000, provided that the minimum initial investment amount has been met) and to identify the Funds. The automatic transfer is effected on your choice of either the 1st or 15th day of the month (or the next business day if the day you chose falls on a holiday or on a weekend).

Account Changes (You must use the Account Privileges Change Form).

To add bank information to an existing account.

To change your existing bank account of record.

To add telephone privileges.

To change account name due to marriage or divorce (you can also provide a copy of the certified legal documents).

To change registered account holders.

Account Redemptions.