KATHY KRESCH INGBER, ESQ.
K&L Gates LLP
1601 K Street, N.W.
Washington, DC 20006-1600
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Scout Core Bond Fund,
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Scout Core Plus Bond Fund,
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Scout International Fund,
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Scout Low Duration Bond Fund,
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Scout Mid Cap Fund,
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Scout Small Cap Fund, and
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Scout Unconstrained Bond Fund
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the Scout Core Bond Fund into the Carillon Reams Core Bond Fund;
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the Scout Core Plus Bond Fund into the Carillon Reams Core Plus Bond Fund;
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the Scout International Fund into the Carillon Scout International Fund;
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the Scout Low Duration Bond Fund into the Carillon Reams Low Duration Bond Fund;
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the Scout Mid Cap Fund into the Carillon Scout Mid Cap Fund;
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the Scout Small Cap Fund into the Carillon Scout Small Cap Fund; and
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the Scout Unconstrained Bond Fund into the Carillon Reams Unconstrained Bond Fund.
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Very truly yours,
Andrew J. Iseman
President
Scout Funds
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Proposed Reorganizations of the Acquired Funds into the Acquiring Funds
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Acquired Fund
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Acquiring Fund
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1.
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Scout Core Bond Fund
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Carillon Reams Core Bond Fund
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2.
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Scout Core Plus Bond Fund
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Carillon Reams Core Plus Bond Fund
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3.
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Scout International Fund
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Carillon Scout International Fund
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4.
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Scout Low Duration Bond Fund
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Carillon Reams Low Duration Bond Fund
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5.
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Scout Mid Cap Fund
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Carillon Scout Mid Cap Fund
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6.
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Scout Small Cap Fund
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Carillon Scout Small Cap Fund
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7.
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Scout Unconstrained Bond Fund
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Carillon Reams Unconstrained Bond Fund
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Scout Core Bond Fund,
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Scout Core Plus Bond Fund,
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Scout International Fund,
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Scout Low Duration Bond Fund,
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Scout Mid Cap Fund,
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Scout Small Cap Fund, and
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Scout Unconstrained Bond Fund (collectively, the “Acquired Funds”).
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1.
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To approve the Agreement and Plan of Reorganization and Termination adopted by the Board of Trustees of Scout Funds (the “Board”) (the “Reorganization Plan”), to reorganize the Scout Core Bond Fund, a series of Scout Funds, into the Carillon Reams Core Bond Fund, a newly created series of Carillon Series Trust (“Acquiring Trust”).
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2.
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To approve the Reorganization Plan, to reorganize the Scout Core Plus Bond Fund, a series of Scout Funds, into the Carillon Reams Core Plus Bond Fund, a newly created series of Acquiring Trust.
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3.
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To approve the Reorganization Plan, to reorganize the Scout International Fund, a series of Scout Funds, into the Carillon Scout International Fund, a newly created series of Acquiring Trust.
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4.
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To approve the Reorganization Plan, to reorganize the Scout Low Duration Bond Fund, a series of Scout Funds, into the Carillon Reams Low Duration Bond Fund, a newly created series of Acquiring Trust.
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5.
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To approve the Reorganization Plan, to reorganize the Scout Mid Cap Fund, a series of Scout Funds, into the Carillon Scout Mid Cap Fund, a newly created series of Acquiring Trust.
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6.
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To approve the Reorganization Plan, to reorganize the Scout Small Cap Fund, a series of Scout Funds, into the Carillon Scout Small Cap Fund, a newly created series of Acquiring Trust.
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7.
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To approve the Reorganization Plan, to reorganize the Scout Unconstrained Bond Fund, a series of Scout Funds, into the Carillon Reams Unconstrained Bond Fund, a newly created series of Acquiring Trust.
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By order of the Board,
Jessica A. Schubel
Secretary
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Scout Core Bond Fund,
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Scout Core Plus Bond Fund,
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Scout International Fund,
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Scout Low Duration Bond Fund,
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Scout Mid Cap Fund,
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Scout Small Cap Fund, and
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Scout Unconstrained Bond Fund.
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Proposal |
Shareholders Entitled to Vote on the Proposal
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1. |
To approve the Agreement and Plan of Reorganization and Termination between Scout Funds and Carillon Series Trust (“Acquiring Trust”) (the “Reorganization Plan”), to reorganize the Scout Core Bond Fund, a series of Scout Funds, into the Carillon Reams Core Bond Fund, a newly created series of Acquiring Trust.
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Shareholders of the Scout Core Bond Fund.
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2. |
To approve the Reorganization Plan, to reorganize the Scout Core Plus Bond Fund, a series of Scout Funds, into the Carillon Reams Core Plus Bond Fund, a newly created series of Acquiring Trust.
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Shareholders of the Scout Core Plus Bond Fund.
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3. |
To approve the Reorganization Plan, to reorganize the Scout International Fund, a series of Scout Funds, into the Carillon Scout International Fund, a newly created series of Acquiring Trust.
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Shareholders of the Scout International Fund.
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4. |
To approve the Reorganization Plan, to reorganize the Scout Low Duration Bond Fund, a series of Scout Funds, into the Carillon Reams Low Duration Bond Fund, a newly created series of Acquiring Trust.
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Shareholders of the Scout Low Duration Bond Fund.
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5. |
To approve the Reorganization Plan, to reorganize the Scout Mid Cap Fund, a series of Scout Funds, into the Carillon Scout Mid Cap Fund, a newly created series of Acquiring Trust.
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Shareholders of the Scout Mid Cap Fund.
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6. |
To approve the Reorganization Plan, to reorganize the Scout Small Cap Fund, a series of Scout Funds, into the Carillon Scout Small Cap Fund, a newly created series of Acquiring Trust.
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Shareholders of the Scout Small Cap Fund.
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7. |
To approve the Reorganization Plan, to reorganize the Scout Unconstrained Bond Fund, a series of Scout Funds, into the Carillon Reams Unconstrained Bond Fund, a newly created series of Acquiring Trust.
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Shareholders of the Scout Unconstrained Bond Fund.
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1.
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The Prospectus and Statement of Additional Information of Scout Funds, each dated October 28, 2016, as supplemented, with respect to the Acquired Funds (File Nos. 333-96461 and 811-09813); and
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2.
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The Statement of Additional Information dated [_________,] 2017, relating to the Reorganizations (File No. 333-_____).
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3.
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The Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of each Acquired Fund for the year ended June 30, 2016 and the unaudited financial statements included in the Semi-Annual Report to Shareholders of each Acquired Fund for the period ended December 31, 2016.
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THE SECURITIES AND EXCHANGE COMMISSION AND THE COMMODITY FUTURES TRADING COMMISSION HAVE NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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SUMMARY
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1
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Reasons for the Proposed Reorganizations
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1
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The Proposed Reorganizations
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1
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PROPOSAL 1: APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT CORE BOND FUND INTO THE CARILLON REAMS CORE BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST.
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3
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Comparative Fee and Expense Tables
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4
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Example of Fund Expenses
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6
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Fund Turnover
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6
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Comparison of Investment Objectives, Policies, Strategies, Advisers and Portfolio Managers
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6
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Comparison of Principal Risk Factors
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10
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Fundamental & Non-Fundamental Investment Limitations
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14
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Performance Information
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15
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Capitalization
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17 |
PROPOSAL 2: APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT CORE PLUS BOND FUND INTO THE CARILLON REAMS CORE PLUS BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST.
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17 |
Comparative Fee and Expense Tables
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19 |
Example of Fund Expenses
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21 |
Fund Turnover
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21 |
Comparison of Investment Objectives, Policies, Strategies, Advisers and Portfolio Managers
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21 |
Comparison of Principal Risk Factors
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25 |
Fundamental & Non-Fundamental Investment Limitations
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29 |
Performance Information
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31 |
Capitalization
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32 |
PROPOSAL 3: APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT INTERNATIONAL FUND INTO THE CARILLON SCOUT INTERNATIONAL FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST.
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33 |
Comparative Fee and Expense Tables
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34 |
Example of Fund Expenses
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35 |
Fund Turnover
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35 |
Comparison of Investment Objectives, Policies, Strategies, Advisers and Portfolio Managers
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36 |
Comparison of Principal Risk Factors
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38 |
Fundamental & Non-Fundamental Investment Limitations
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41 |
Performance Information
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43 |
Capitalization
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44 |
PROPOSAL 4: APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT LOW DURATION BOND FUND INTO THE CARILLON REAMS LOW DURATION BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST.
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44 |
Comparative Fee and Expense Tables
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46 |
Example of Fund Expenses
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47 |
Fund Turnover
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48 |
Comparison of Investment Objectives, Policies, Strategies, Advisers and Portfolio Managers
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48 |
Comparison of Principal Risk Factors
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52 |
Fundamental & Non-Fundamental Investment Limitations
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56 |
Performance Information
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57 |
Capitalization
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59 |
PROPOSAL 5: APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT MID CAP FUND INTO THE CARILLON SCOUT MID CAP FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST
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59 |
Comparative Fee and Expense Tables
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61 |
Example of Fund Expenses
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61 |
Fund Turnover
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62 |
Comparison of Investment Objectives, Policies, Strategies, Advisers and Portfolio Managers
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62 |
Comparison of Principal Risk Factors
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65 |
Fundamental & Non-Fundamental Investment Limitations
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68 |
Performance Information
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69 |
Capitalization
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70 |
PROPOSAL 6: APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT SMALL CAP FUND INTO THE CARILLON SCOUT SMALL CAP FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST.
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70 |
Comparative Fee and Expense Tables
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72 |
Example of Fund Expenses
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72 |
Fund Turnover
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73 |
Comparison of Investment Objectives, Policies, Strategies, Advisers and Portfolio Managers
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73 |
Comparison of Principal Risk Factors
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75 |
Fundamental & Non-Fundamental Investment Limitations
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79 |
Performance Information
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81 |
Capitalization
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82 |
PROPOSAL 7: APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT UNCONSTRAINED BOND FUND INTO THE CARILLON REAMS UNCONSTRAINED BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST
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82 |
Comparative Fee and Expense Tables
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84 |
Example of Fund Expenses
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85 |
Fund Turnover
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86 |
Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers
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86 |
Comparison of Principal Risk Factors
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90 |
Fundamental & Non-Fundamental Investment Limitations
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94 |
Performance Information
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95 |
Capitalization
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97 |
ADDITIONAL INFORMATION ABOUT THE REORGANIZATIONS | 97 |
Terms of the Reorganization Plan
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97 |
Description of the Securities to Be Issued
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98 |
Board Considerations
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99 |
Interim Advisory Agreement
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100 |
Comparison of Fundamental Investment Limitations
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100 |
Federal Income Tax Consequences of the Reorganizations
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103 |
Rights of Shareholders of the Funds
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104 |
Section 15(f) Safe Harbor
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105 |
ADDITIONAL INFORMATION ABOUT THE FUNDS | 106 |
Service Providers
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106 |
The Adviser
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106 |
Management and Administrative Fees
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106 |
The Subadviser
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107 |
Distributor, Transfer Agent, and Custodian
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107 |
Independent Registered Public Accounting Firm
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108 |
Portfolio Managers
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108 |
Buying and Selling Shares
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109 |
Buying Shares
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109 |
Exchanges
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109 |
Dividends and Other Distributions
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109 |
Redemption Procedures
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110 |
FINANCIAL HIGHLIGHTS | 110 |
VOTING INFORMATION | 110 |
Voting Rights
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110 |
Required Shareholder Vote
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111 |
Solicitation of Proxies and Voting Instructions
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111 |
Proxy Solicitation
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112 |
Adjournment or Postponement
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112 |
Other Matters
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112 |
Appendix A
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A-1 |
Appendix B
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B-1 |
Appendix C | 16 |
·
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the transfer of all the assets of the Acquired Fund to the corresponding Acquiring Fund in exchange solely for Acquiring Fund Shares having an aggregate net asset value equal to the Acquired Fund’s net assets and the Acquiring Fund’s assumption of all the liabilities of the Acquired Fund;
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the distribution to the Acquired Fund’s shareholders of those Acquiring Fund Shares; and
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the complete termination of the Acquired Fund.
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PROPOSAL 1:
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APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT CORE BOND FUND INTO THE CARILLON REAMS CORE BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST.
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The Carillon Reams Core Bond Fund is newly organized and has no assets, operating history or performance information of its own as of the date of this Proxy Statement/Prospectus. The Carillon Reams Core Bond Fund has been created as a shell series of Acquiring Trust solely for the purposes of acquiring the Scout Core Bond Fund’s assets and continuing its business investment operations, and will not conduct any investment operations until after the Closing Date of the Reorganization. If shareholders of the Scout Core Bond Fund approve the Fund’s Reorganization, the Carillon Reams Core Bond Fund will assume and publish the operating history and performance record of the Scout Core Bond Fund.
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The Carillon Reams Core Bond Fund and the Scout Core Bond Fund have substantially similar investment objectives, policies, and strategies. Each Fund’s investment objective is to seek a high level of total return consistent with the preservation of capital. Each Fund seeks to achieve its investment objective by investing at least 80% of its net assets in bonds of varying maturities, including mortgage- and asset-backed securities. The bonds in which each Fund may invest also include debt securities, to-be-announced securities and other similar instruments issued by various U.S. and non-U.S. public and private-sector entities. Each Fund invests primarily in investment grade securities and only invests in U.S. dollar denominated securities. For a detailed comparison of the Funds’ investment policies and strategies, see “Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers” below. |
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The Carillon Reams Core Bond Fund and the Scout Core Bond Fund have substantially similar risk profiles, although there are differences in how these are described. For a detailed comparison of each Fund’s risks, see “Comparison of Principal Risk Factors” below.
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Scout Investments currently serves as the investment adviser for the Scout Core Bond Fund. After the Reorganization, Carillon Tower will serve as the investment adviser for the Carillon Reams Core Bond Fund and Scout Investments will serve as the subadviser for the Fund. As described above, Carillon Tower has entered into an agreement with UMB to purchase Scout Investments and the Reorganization is being proposed in connection with that acquisition. For a detailed description of Carillon Tower and Scout Investments, please see “Additional Information about the Funds - Service Providers” below.
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Institutional Class shareholders of the Scout Core Bond Fund will receive Class I shares of the Carillon Reams Core Bond Fund and Class Y shareholders of the Scout Core Bond Fund will receive Class Y shares of the Carillon Reams Core Bond Fund pursuant to the Reorganization. Shareholders will not pay any sales charges in connection with the Reorganization. Please see “Comparative Fee and Expense Tables,” “Additional Information about the Reorganizations” and “Additional Information about the Funds” below for more information.
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The annual operating expense ratios for the Carillon Reams Core Bond Fund’s Class I and Class Y shares, for the fiscal year following the Reorganization, are not expected to exceed those of the Scout Core Bond Fund’s Institutional Class and Class Y shares, respectively, for the fiscal year ended June 30, 2016. Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.40% for Institutional Class shares of the Fund and 0.80% for Class Y shares of the Fund. Carillon Tower will enter into a similar agreement to limit the Carillon Reams Core Bond Fund’s total annual operating expenses to 0.40% for Class I shares and 0.80% for Class Y shares with a term lasting for at least two years from the Closing Date of the Reorganization. For a more detailed comparison of the fees and expenses of the Funds, please see “Comparative Fee and Expense Tables” and “Additional Information about the Funds” below. |
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The Scout Core Bond Fund pays Scout Investments an advisory fee at the annual rate of 0.40% on the Fund’s average daily net assets. The Carillon Reams Core Bond Fund will pay Carillon Tower an advisory fee at the same rate. Carillon Tower will pay Scout Investments a subadvisory fee at the annual rate of 0.40% on the Fund’s average daily net assets.
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Currently, the Acquired Funds pay Scout Investments and UMB Fund Services, Inc. (“UMBFS”) for administrative services and fund accounting services. Scout Investments receives the following fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing certain administrative services to the funds: 0.05% of the funds’ first $5 billion of aggregate average daily net assets; 0.04% of the funds’ next $1 billion of aggregate average daily net assets; 0.03% of the funds’ next $1 billion of aggregate average daily net assets; 0.02% of the funds’ next $1 billion of aggregate average daily net assets; and 0.01% of the funds’ aggregate average daily net assets in excess of $8 billion. UMBFS receives the following administration fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing administrative and fund accounting services to the funds: 0.04% of the funds’ aggregate average daily net assets up to $1.25 billion; 0.03% of the funds’ aggregate average daily net assets up to the next $1.25 billion; and 0.02% of the funds’ aggregate average daily net assets in excess of $2.5 billion. After the Reorganization, Carillon Tower will provide administrative services to the Acquiring Fund and will receive an administrative fee at the annual rate of 0.10% of average daily net assets of the Acquiring Fund’s Class I and Class Y shares. Carillon Tower has also entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC (“USBFS”) to provide the Acquiring Fund certain financial reporting and tax services. The fees for sub-administration services are paid by Carillon Tower to USBFS. See “Additional Information about the Funds” below for more information about other service providers. |
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UMB and Carillon Tower or their affiliates have agreed to bear the costs associated with the Reorganization equally. The Scout Core Bond Fund and the Carillon Reams Core Bond Fund will not bear any of the costs and expenses of the Reorganization.
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Scout Core Bond Fund
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Pro forma Carillon Reams Core Bond Fund
(assuming the Reorganization is approved)
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Institutional Class
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Class Y
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Class I
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Class Y
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Maximum Sales Charge (Load) Imposed on Purchases
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None
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None
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None
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None
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Maximum Deferred Sales Charge (Load)
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None
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None
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None
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None
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Maximum Sales Charge (Load) Imposed on Reinvested Dividends
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None
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None
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None
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None
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Redemption Fee
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None
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None
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None
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None
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Exchange Fee
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None
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None
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None
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None
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Scout Core Bond Fund
|
Pro forma Carillon Reams Core Bond Fund
(assuming the Reorganization is approved)
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|||
Institutional Class
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Class Y
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Class I
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Class Y
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Management Fee
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0.40%
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0.40%
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0.40%
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0.40%
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Distribution and/or Service Fees (12b-1 fees)
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None
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0.25%
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None
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0.25%
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Other Expenses
|
0.32%1
|
0.32%
|
0.32%
|
0.32%
|
Total Annual Fund Operating Expenses
|
0.72%1
|
0.97%
|
0.72% | 0.97% |
Adviser’s Fee Waiver and/or Expense Assumption2,3
|
(0.32)%
|
(0.17)%
|
(0.32)% | (0.17)% |
Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Assumption
|
0.40%
|
0.80%
|
0.40%
|
0.80%
|
1 |
“Total Annual Fund Operating Expenses” for Institutional Class shares do not correlate to the ratio of expenses to average net assets for the most recent fiscal year ended June 30, 2016 in the Financial Highlights table in the Fund’s most recent Annual Report. “Other Expenses” have been adjusted to accurately reflect the authorized fees and expenses of the Institutional Class shares.
|
2 |
Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.40% for Institutional Class shares of the Fund and 0.80% for Class Y shares of the Fund. If “Total Annual Fund Operating Expenses” would fall below the current expense limit, Scout Investments may cause the Fund’s expenses to remain at the current expense limit while it is reimbursed for fees that it waived or expenses that it assumed during the three years following the end of the fiscal year in which Scout Investments waived fees or assumed expenses for the Fund, provided that such reimbursement will not cause the Fund to exceed any applicable expense limit that was in place when the fees were waived or expenses assumed. This expense limitation agreement may not be terminated prior to October 30, 2018 unless the Scout Board consents to an earlier revision or termination as being in the best interests of the Fund.
|
3 |
Carillon Tower has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the Fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets for at least two years from the Closing Date of the Reorganization as follows: Class I - 0.40% and Class Y - 0.80%. This expense limitation excludes interest, taxes, brokerage commissions, short sale dividend and interest expenses, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the Fund’s Board of Trustees. Any reimbursement of Fund expenses or reduction in Carillon Tower’s investment advisory fees is subject to reimbursement by the Fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement. |
·
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You invest $10,000 in the Fund for the time periods indicated;
|
·
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Your investment has a 5% return each year;
|
·
|
The Fund’s operating expenses remain the same; and
|
·
|
The contractual agreement to limit overall fund expenses remains in place for the term of the agreement.
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1 Year
|
3 Years
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5 Years
|
10 Years
|
|
Scout Core Bond Fund
|
||||
Institutional Class
|
$41
|
$198
|
$369
|
$864
|
Class Y
|
$82
|
$292
|
$520
|
$1,174
|
Pro forma Carillon Reams Core Bond Fund (assuming the Reorganization is approved)
|
||||
Class I
|
$41 | $164 | $336 | $833 |
Class Y
|
$82 | $274 | $502 | $1,158 |
Acquired Fund
|
Acquiring Fund
|
Scout Core Bond Fund
|
Carillon Reams Core Bond Fund
|
Investment Objective
|
|
The investment objective of the Scout Core Bond Fund | The Carillon Reams Core Bond Fund will have the same |
is a high level of total return consistent with the preservation of capital.
The Scout Core Bond Fund’s investment objective is a non-fundamental policy that may be changed by its Board without shareholder approval.
|
investment objective.
The Carillon Reams Core Bond Fund’s investment objective also will be a non-fundamental policy that may be changed by its Board without shareholder approval.
|
Principal Investment Strategies
|
|
Under normal circumstances, the Fund invests at least 80% of its net assets in bonds of varying maturities, including mortgage- and asset-backed securities. Any change in this 80% policy approved by the Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. The bonds in which the Fund may invest also include other fixed income instruments such as debt securities, to-be-announced securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities.
The Fund invests primarily in investment grade securities. Investment grade securities include securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization, such as BBB- or higher by Standard & Poor’s Financial Services LLC (“S&P®”). In addition, the Fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis. All securities will be U.S. dollar denominated although they may be securities of foreign issuers.
The Fund may invest in derivative instruments, such as futures contracts (including interest rate, bond, U.S. Treasury and fixed income index futures contracts) and credit default swap agreements subject to applicable law and any other restrictions described in the Fund’s Prospectus or Statement of Additional Information (“SAI”). The Fund’s investment in credit default swap agreements may include both single-name credit default swap agreements and credit default swap index products, such as CDX index products. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select interest rates, countries, durations or credit risks. These derivatives may be used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain exposure to certain instruments or markets (i.e., the corporate bond market) in a more efficient or less expensive way. The credit default swap agreements that the Fund invests in may provide exposure to an index of securities representative of the entire investment grade and high yield fixed income markets, which can include underlying issuers rated as low as CCC by S&P®. Derivative instruments that provide exposure to bonds may be used to satisfy the Fund’s 80% investment policy. |
Same, except that references to “investment adviser” are changed to “portfolio management team.”
|
The investment adviser attempts to maximize total return over a long-term horizon through opportunistic investing in a broad array of eligible securities. The investment process combines top-down interest rate management with bottom-up fixed income security selection, focusing on undervalued issues in the fixed income market. The investment adviser first establishes the portfolio’s duration, or interest rate sensitivity. The investment adviser determines whether the fixed income market is under- or over-priced by comparing current real interest rates (the nominal rates on U.S. Treasury securities less the investment adviser’s estimate of inflation) to historical real interest rates. If the current real interest rate is higher than historical norms, the market is considered undervalued and the investment adviser will manage the portfolio with a duration greater than the benchmark. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. If the current real interest rate is less than historical norms, the market is considered overvalued and the investment adviser will run a defensive portfolio by managing the portfolio with a duration less than the benchmark. The investment adviser normally structures the Fund so that the overall portfolio has a duration of between two and seven years based on market conditions. For purposes of calculating the Fund’s portfolio duration, the Fund includes the effect of the derivative instruments held by the Fund.
The investment adviser then considers sector exposures. Sector exposure decisions are made on both a top-down and bottom-up basis. A bottom-up issue selection process is the major determinant of sector exposure, as the availability of attractive securities in each sector determines their underweighting or overweighting in the Fund subject to sector exposure constraints. However, for the more generic holdings in the Fund, such as agency notes and pass-through mortgage backed securities, top-down considerations will drive the sector allocation process on the basis of overall measurements of sector value such as yield spreads or price levels.
Once the investment adviser has determined an overall market strategy, the investment adviser selects the most attractive fixed income securities for the Fund. The portfolio managers screen hundreds of securities to determine how each will perform in various interest rate environments. The portfolio managers construct these scenarios by considering the outlook for interest rates, fundamental credit analysis and option-adjusted spread analysis. The portfolio managers compare these investment opportunities and assemble the Fund’s
|
portfolio from the best available values. The investment adviser constantly monitors the expected returns of the securities in the Fund versus those available in the market and of other securities the investment adviser is considering for purchase. The investment adviser’s strategy is to replace securities that it feels are approaching fair market value with those that, according to its analysis, are significantly undervalued. As a result of this strategy, the Fund’s portfolio turnover rate will vary from year to year depending on market conditions.
|
|
Investment Adviser
|
|
Scout Investments
|
Carillon Tower
|
Investment Subadviser
|
|
None.
|
Scout Investments
|
Portfolio Managers
|
|
No portfolio manager is solely responsible for making recommendations for portfolio purchases and sales. Instead, all portfolio managers work together to develop investment strategies with respect to the Fund’s portfolio structure and issue selection. Portfolio strategy is reviewed weekly by all the portfolio managers. A staff of research analysts, traders and other investment professionals supports the portfolio managers.
Mark M. Egan, CFA, is the lead portfolio manager of the Fixed Income Funds. Thomas M. Fink, CFA; Todd C. Thompson, CFA; Stephen T. Vincent, CFA; and Clark W. Holland, CFA, are co-portfolio managers of the Fixed Income Funds. Mr. Egan joined Scout Investments on November 30, 2010. He oversees the entire fixed income division of Scout Investments, Reams Asset Management, and retains oversight over all investment decisions. Mr. Egan was a portfolio manager of Reams Asset Management Company, LLC (“Reams”) from April 1994 until November 2010 and was a portfolio manager of Reams Asset Management Company, Inc. from June 1990 until March 1994. Mr. Egan was a portfolio manager of National Investment Services until May 1990. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Fink joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from December 2000 until November 2010. Mr. Fink was previously a portfolio manager at Brandes Fixed Income Partners from 1999 until 2000, Hilltop Capital Management from 1997 until 1999, Centre Investment Services from 1992 until 1997 and First Wisconsin Asset Management from 1986 until 1992. He is a CFA® charterholder and a member of the CFA Institute.
|
Mr. Thompson joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from July 2001 until November 2010. Mr. Thompson was a portfolio manager at Conseco Capital Management from 1999 until June 2001 and was a portfolio manager at the Ohio Public Employees Retirement System from 1994 until 1999. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Vincent joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from October 2005 until November 2010. Mr. Vincent was a senior fixed income analyst at Reams from September 1994 to October 2005. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Holland joined Scout Investments on November 30, 2010 and became a portfolio manager in October 2014. He was a portfolio analyst at Scout Investments from December 2010 until October 2014 and at Reams from February 2002 until November 2010. Prior to joining the firm, Mr. Holland was a portfolio manager and investment product specialist at Wells Fargo Investment Management Group. He is a CFA® charterholder and a member of the CFA Institute.
|
Same.
|
Credit Risks
|
The Fund could lose money if the issuer of a fixed income security is unable or unwilling, or is perceived as unable or unwilling (whether by market participants, ratings agencies, pricing services or otherwise) to meet its financial obligations or goes bankrupt. Securities are subject to varying degrees of credit risk, which are often reflected in their credit ratings. The downgrade of the credit rating of a security held by the Fund may decrease its value. Credit risk usually applies to most fixed income securities. U.S. government securities, especially those that are not backed by the full faith and credit of the U.S. Treasury, such as securities supported only by the credit of the issuing governmental agency or government-sponsored enterprise, carry at least some risk of nonpayment, and the maximum potential liability of the issuers of such securities may greatly exceed their current resources. There is no assurance that the U.S. government would provide financial support to the issuing entity if not obligated to do so by law. Further, any government guarantees on U.S. government securities that the Fund owns extend only to the timely payment of interest and the repayment of principal on the securities themselves and do not extend to the market value of the securities themselves or to shares of the Fund. |
Credit Ratings Risks
|
Ratings by nationally recognized rating agencies represent the agencies’ opinion of the credit quality of an issuer. However, these ratings are not absolute standards of quality and do not
|
guarantee the creditworthiness of an issuer. Ratings do not necessarily address market risk and may not be revised quickly enough to reflect changes in an issuer’s financial condition. | |
Derivatives Risks
|
Derivatives, such as options, futures contracts, currency forwards or swap agreements, may involve greater risks than if the Fund had invested in the reference obligation directly. Derivatives are subject to general market risks, liquidity risks, interest rate risk, credit risks and management risks. Derivatives also present the risk that the other party to the transaction will fail to perform. Derivatives also involve an increased risk of mispricing or improper valuation of the derivative instrument, and imperfect correlation between the value of the derivative and the underlying instrument so that the Fund may not realize the intended benefits. When used for hedging, changes in the value of the derivative may also not correlate perfectly with the underlying asset, rate or index. Derivatives risk may be more significant when derivatives are used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain exposure to certain instruments or markets, rather than solely to hedge the risk of a position held by the Fund. Derivatives can cause the Fund to participate in losses (as well as gains) in an amount that significantly exceeds the Fund’s initial investment. Also, suitable derivative transactions may not be available in all circumstances and there can be no assurance that the Fund will engage in these transactions to reduce exposure to other risks when that would be beneficial. The regulation of cleared and uncleared swap agreements, as well as other derivatives, is a rapidly changing area of law and is subject to modification by government and judicial action. It is not possible to predict fully the effects of current or future regulation. Changes in government regulation of various types of derivatives instruments may make derivatives more costly or limit the availability of derivatives, which may limit or prevent the Fund from using certain types of derivative instruments as part of its investment strategy; may affect the character, timing and amount of the Fund’s taxable income or gains; or may otherwise adversely affect the value or performance of derivatives. Compared to other types of investments, derivatives may also be less tax efficient. The Fund’s use of derivatives may be limited by the requirements for taxation of the Fund as a regulated investment company. |
Fixed Income Security Risks
|
Fixed income market risk is the risk that the prices of, and the income generated by, fixed income securities held by the Fund may decline significantly and/or rapidly in response to adverse issuer, political, regulatory, general economic and market conditions, or other developments, such as regional or global economic instability (including terrorism and related geopolitical risks), interest rate fluctuations, and those events directly involving the issuers that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment. These events may lead to periods of volatility, which may be exacerbated by changes in bond market size and structure. In addition, adverse market events may lead to increased redemptions, which could cause the Fund to experience a loss when selling securities to meet redemption requests by shareholders. The risk of loss increases if the redemption requests are unusually large or frequent. |
Income Risks
|
The Fund’s income could decline due to falling market interest rates. In a falling interest rate environment, the Fund may be required to invest its assets in lower-yielding securities. Because interest rates vary, it is impossible to predict the income or yield of the Fund for any particular period.
|
Interest Rate Risks |
Investments in investment grade and non-investment grade fixed income securities are subject to interest rate risk. The value of the Fund’s fixed income investments typically will fall when interest rates rise. The Fund may be particularly sensitive to changes in interest rates if it invests in debt securities with intermediate and long terms to maturity. Debt securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. For example, if a bond has a duration of five years, a 1% increase in interest rates could be expected to result in a 5% decrease in the value of the bond. The Federal Reserve raised the federal funds rate in December 2016, March 2017 and June 2017 and has signaled additional increases in 2017. Interest rates may rise significantly and/or rapidly, potentially resulting in substantial losses to the Fund. During periods of very low or negative interest rates, the Fund may be unable to maintain positive returns. Certain European countries and Japan have recently experienced negative interest rates on deposits and debt securities have traded at negative yields. Negative interest rates may become more prevalent among non-U.S. issuers, and potentially within the United States. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Fund is exposed to such interest rates. |
International Investing Risks
|
Investments in foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s return and NAV may be affected by fluctuations in currency exchange rates or political or economic conditions and regulatory requirements in a particular country. Foreign markets, as well as foreign economies and political systems, may be less stable than U.S. markets, and changes in the exchange rates of foreign currencies can affect the value of the Fund’s foreign assets. Foreign laws and accounting standards typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Custodial and/or settlement systems in foreign markets may not be fully
|
developed and the laws of certain countries may limit the ability to recover assets if a foreign bank or depository or their agents goes bankrupt. Over a given period of time, foreign securities may underperform U.S. securities—sometimes for years. The Fund could also underperform if it invests in countries or regions whose economic performance falls short. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change, which may lead to default or expropriation, and inadequate government oversight and accounting. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. The effect of recent, worldwide economic instability on specific foreign markets or issuers may be difficult to predict or evaluate. Some national economies continue to show profound instability, which may in turn affect their international trading and financial partners or other members of their currency bloc. Foreign security risk may also apply to ADRs, GDRs and EDRs. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than or in addition to investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return. | |
Issuer Risks
|
The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
|
Leverage Risks Associated with Financial Instruments
|
Certain transactions of the Fund may give rise to a form of leverage. Such transactions may include, among others, the use of buybacks, dollar rolls, and when-issued, delayed delivery or forward commitment transactions. Certain derivatives that the Fund may use may create leverage. Derivatives that involve leverage can result in losses to the Fund that exceed the amount originally invested in the derivatives. Certain types of leveraging transactions, such as short sales that are not “against the box,” could be subject to unlimited losses in cases where the Fund, for any reason, is unable to close out the transaction. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leveraging may cause the Fund to be more volatile than if the Fund had not been leveraged. This is because leveraging tends to exaggerate the effect of any increase or decrease in the value of the Fund’s portfolio securities. |
Liquidity Risks
|
Liquidity risk is the possibility that the Fund might be unable to sell a security promptly and at an acceptable price, which could have the effect of decreasing the overall level of the Fund’s liquidity. Market developments may cause the Fund’s investments to become less liquid and subject to erratic price movements. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund could lose money if it cannot sell a security at the time and price that would be most beneficial to the Fund. |
Management Risks
|
The Fund is subject to management risk as an actively managed investment portfolio. The investment adviser and the portfolio managers will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. If the investment adviser is not able to select better-performing equity and fixed income securities, the Fund may lose money.
|
Maturity Risks
|
The Fund will invest in fixed income securities of varying maturities. A fixed income security’s maturity is one indication of the interest rate exposure of a security. Generally, the longer a fixed income security’s maturity, the greater the risk. Conversely, the shorter a fixed income security’s maturity, the lower the risk.
|
Mortgage- and Asset-Backed Securities Risks
|
Mortgage- and asset-backed security risk, which is possible in an unstable or depressed housing market, arises from the potential for mortgage failure or premature repayment of principal, or a delay in the repayment of principal. The reduced value of the Fund’s securities and the potential loss of principal as a result of a mortgagee’s failure to repay would have a negative impact on the Fund. Premature repayment of principal would make it difficult for the Fund to reinvest the prepaid principal at a time when interest rates on new mortgages are declining, thereby reducing the Fund’s income. Conversely, a delay in the repayment of principal could lengthen the expected maturity of the securities, thereby increasing the potential for loss when prevailing interest rates rise, which could cause the values of the securities to fall sharply.
|
Portfolio Turnover Risks
|
The Fund may engage in more active and frequent trading of portfolio securities to a greater extent than certain other mutual funds with similar investment objectives. The Fund’s turnover rate may vary greatly from year to year or during periods within a year. A high rate of portfolio turnover may lead to greater transaction costs, result in adverse tax consequences to investors (from increased recognition of net capital gains, which are taxable to shareholders when distributed to them) and adversely affect performance.
|
Redemption Risks |
The Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Fund, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed income securities, may result in decreased liquidity and increased volatility in the fixed income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Fund’s performance. |
Valuation Risks
|
Securities held by the Fund may be priced by an independent pricing service and may also be priced using dealer quotes or fair valuation methodologies in accordance with valuation procedures adopted by the Fund’s Board. The prices provided by the independent pricing service or dealers or the fair valuations may be different from the prices used by other mutual funds or from the prices at which securities are actually bought and sold.
|
Non-Fundamental Investment Policies
|
||
Policy
|
Acquired Fund
|
Acquiring Fund
|
Scout Core Bond Fund
|
Carillon Reams Core Bond Fund
|
|
Investing in Illiquid Securities
|
The Fund will not invest in illiquid securities if, as a result of such investment, more than 15% of its net assets would be invested in illiquid securities, or such other amounts as may be permitted under the Investment Company Act of 1940, as amended (“1940 Act”).
|
The Fund may not invest more than 15% of its net assets in repurchase agreements maturing in more than seven days or in other illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions as to resale and including privately placed securities.
|
Investing in Other Investment Companies
|
The Fund will not purchase shares of other investment companies, except in compliance with the 1940 Act or pursuant to a plan of merger or consolidation.
|
The Fund may invest in securities issued by other investment companies as permitted by the 1940 Act, and the rules thereunder and any exemptive relief.
|
Borrowing Money
|
The Fund does not intend to borrow money in excess of 5% of its net assets, however, if borrowings do exceed 5%, the Fund will not purchase additional investment securities until outstanding borrowings represent less than 5% of the Fund’s assets.
|
None.
|
Investing for Control
|
The Fund will not invest in companies for the purpose of exercising control of management.
|
None.
|
Short Selling and Margin
|
The Fund will not purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin deposits in connection with futures contracts, options on futures contracts, or other derivative instruments shall not constitute purchasing securities on margin, or sell securities short, unless the Fund owns or has the right to obtain securities equivalent in kind and amount to the securities sold short or unless it covers such short sale as required by the current rules and positions of the SEC or its staff, and provided that transactions in options, futures contracts, options on futures contracts, or other derivative instruments are not deemed to constitute selling securities short.
|
None.
|
Investing in UMB
|
The Fund will not invest in securities issued by UMB Financial Corporation or affiliate banks of UMB Financial Corporation.
|
None.
|
Bank Borrowings
|
The Fund will not purchase securities when bank borrowings exceed 5% of its total assets.
|
None.
|
Futures and Options
|
The Fund will not engage in futures or options on futures transactions, except in accordance with Rule 4.5 under the CEA.
|
None.
|
Scout Core Bond Fund – Calendar Year Total Returns (Institutional Class)
|
|||||||||
[Bar chart to be inserted]
|
|||||||||
7.76%
|
-6.45%
|
28.36%
|
7.48%
|
7.64%
|
6.33%
|
-0.83%
|
2.27%
|
0.95%
|
[ ]%
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
Best Quarter (% and quarter end date)
|
Worst Quarter (% and quarter end date)
|
||||||||
[20.71% (June 30, 2009)]
|
[-3.90% (September 30, 2008)]
|
||||||||
The calendar year-to-date total return as of [June 30, 2017] was [ ]%.
|
Scout Core Bond Fund - Average Annual Total Returns (As of December 31, 2016)
|
|||
One Year
|
Five Years
|
Ten Years/Since Inception
|
|
Institutional Class
|
|||
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions and Sale of Fund Shares
|
[ ]%
|
[ ]%
|
[ ]%
|
Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Class Y (Inception Date: April 21, 2011)
|
|||
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Net Assets
(in millions)
|
Net Asset Value Per Share
|
Shares Outstanding
|
|
Scout Core Bond Fund – Institutional Class
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Reams Core Bond Fund – Class I (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
Scout Core Bond Fund – Class Y
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Reams Core Bond Fund – Class Y (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
PROPOSAL 2:
|
APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT CORE PLUS BOND FUND INTO THE CARILLON REAMS CORE PLUS BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST.
|
·
|
The Carillon Reams Core Plus Bond Fund is newly organized and has no assets, operating history or performance information of its own as of the date of this Proxy Statement/Prospectus. The Carillon Reams Core Plus Bond Fund has been created as a shell series of Acquiring Trust solely for the purposes of acquiring the Scout Core Plus Bond Fund’s assets and continuing its business investment operations, and will not conduct any investment operations until after the Closing Date of the Reorganization. If shareholders of the Scout Core Plus Bond Fund approve the Fund’s Reorganization, the Carillon Reams Core Plus Bond Fund will assume and publish the operating history and performance record of the Scout Core Plus Bond Fund.
|
·
|
The Carillon Reams Core Plus Bond Fund and the Scout Core Plus Bond Fund have substantially similar investment objectives, policies, and strategies. Each Fund’s investment objective is to seek a high level of total return consistent with the preservation of capital. Each Fund seeks to achieve its investment objective by investing at least 80% of its net assets in bonds of varying maturities, including mortgage- and asset-backed securities. The bonds in which each Fund may invest also include debt securities, to-be-announced securities and other similar instruments issued by various U.S. and non-U.S. public and private-sector entities. Each Fund invests primarily in investment grade securities but may invest 25% of its assets in non-investment grade securities (commonly known as “junk bonds”). Each Fund may invest foreign
|
|
securities, including investments in emerging markets. For a detailed comparison of the Funds’ investment policies and strategies, see “Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers” below.
|
·
|
The Carillon Reams Core Plus Bond Fund and the Scout Core Plus Bond Fund have substantially similar risk profiles, although there are differences in how these are described. For a detailed comparison of each Fund’s risks, see “Comparison of Principal Risk Factors” below.
|
·
|
Scout Investments currently serves as the investment adviser for the Scout Core Plus Bond Fund. After the Reorganization, Carillon Tower will serve as the investment adviser for the Carillon Reams Core Plus Bond Fund and Scout Investments will serve as the subadviser for the Fund. As described above, Carillon Tower has entered into an agreement with UMB to purchase Scout Investments and the Reorganization is being proposed in connection with that acquisition. For a detailed description of Carillon Tower and Scout Investments, please see “Additional Information about the Funds - Service Providers” below.
|
·
|
Institutional Class shareholders of the Scout Core Plus Bond Fund will receive Class I shares of the Carillon Reams Core Plus Bond Fund and Class Y shareholders of the Scout Core Plus Bond Fund will receive Class Y shares of the Carillon Reams Core Plus Bond Fund pursuant to the Reorganization. Shareholders will not pay any sales charges in connection with the Reorganization. Please see “Comparative Fee and Expense Tables,” “Additional Information about the Reorganizations” and “Additional Information about the Funds” below for more information.
|
·
|
The annual operating expense ratios for the Carillon Reams Core Plus Bond Fund’s Class I and Class Y shares, for the fiscal year following the Reorganization, are not expected to exceed those of the Scout Core Plus Bond Fund’s Institutional Class and Class Y shares, respectively, for the fiscal year ended June 30, 2016. Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.40% for Institutional Class shares of the Fund and 0.80% for Class Y shares of the Fund. Carillon Tower will enter into a similar agreement to limit the Carillon Reams Core Plus Bond Fund’s total annual operating expenses to 0.40% for Class I shares and 0.80% for Class Y shares with a term lasting for at least two years from the Closing Date of the Reorganization. For a more detailed comparison of the fees and expenses of the Funds, please see “Comparative Fee and Expense Tables” and “Additional Information about the Funds” below. |
·
|
The Scout Core Plus Bond Fund pays Scout Investments an advisory fee at the annual rate of 0.40% on the Fund’s average daily net assets. The Carillon Reams Core Plus Bond Fund will pay Carillon Tower an advisory fee at the same rate. Carillon Tower will pay Scout Investments a subadvisory fee at the annual rate of 0.40% on the Fund’s average daily net assets.
|
·
|
Currently, the Acquired Funds pay Scout Investments and UMB Fund Services, Inc. (“UMBFS”) for administrative services and fund accounting services. Scout Investments receives the following fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing certain administrative services to the funds: 0.05% of the funds’ first $5 billion of aggregate average daily net assets; 0.04% of the funds’ next $1 billion of aggregate average daily net assets; 0.03% of the funds’ next $1 billion of aggregate average daily net assets; 0.02% of the funds’ next $1 billion of aggregate average daily net assets; and 0.01% of the funds’ aggregate average daily net assets in excess of $8 billion. UMBFS receives the following administration fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated |
|
proportionately to each fund for providing administrative and fund accounting services to the funds: 0.04% of the funds’ aggregate average daily net assets up to $1.25 billion; 0.03% of the funds’ aggregate average daily net assets up to the next $1.25 billion; and 0.02% of the funds’ aggregate average daily net assets in excess of $2.5 billion. After the Reorganization, Carillon Tower will provide administrative services to the Acquiring Fund and will receive an administrative fee at the annual rate of 0.10% of average daily net assets of the Acquiring Fund’s Class I and Class Y shares. Carillon Tower has also entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC (“USBFS”) to provide the Acquiring Fund certain financial reporting and tax services. The fees for sub-administration services are paid by Carillon Tower to USBFS. See “Additional Information about the Funds” below for more information about other service providers. |
·
|
UMB and Carillon Tower or their affiliates have agreed to bear the costs associated with the Reorganization equally. The Scout Core Plus Bond Fund and the Carillon Reams Core Plus Bond Fund will not bear any of the costs and expenses of the Reorganization.
|
Scout Core Plus Bond Fund
|
Pro forma Carillon Reams Core Plus Bond
Fund (assuming the Reorganization is
approved)
|
|||
Institutional Class
|
Class Y
|
Class I
|
Class Y
|
|
Maximum Sales Charge (Load) Imposed on Purchases
|
None
|
None
|
None
|
None
|
Maximum Deferred Sales Charge (Load)
|
None
|
None
|
None
|
None
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
None
|
None
|
None
|
Redemption Fee
|
None
|
None
|
None
|
None
|
Exchange Fee
|
None
|
None
|
None
|
None
|
Scout Core Plus Bond Fund
|
Pro forma Carillon Reams Core Plus Bond
Fund (assuming the Reorganization is
approved)
|
|||
Institutional Class
|
Class Y
|
Class I
|
Class Y
|
|
Management Fee
|
0.40%
|
0.40%
|
0.40%
|
0.40%
|
Distribution and/or Service Fees (12b-1 fees)
|
None
|
0.25%
|
None
|
0.25%
|
Other Expenses
|
0.25%1
|
0.24%
|
0.25% | 0.24% |
Total Annual Fund Operating Expenses
|
0.65%1
|
0.89%
|
0.65% | 0.89% |
Adviser’s Fee Waiver and/or Expense Assumption2,3
|
(0.25)%
|
(0.09)%
|
(0.25)% | (0.09)% |
Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Assumption
|
0.40%
|
0.80%
|
0.40%
|
0.80%
|
1 |
“Total Annual Fund Operating Expenses” for Institutional Class shares do not correlate to the ratio of expenses to average net assets for the most recent fiscal year ended June 30, 2016 in the Financial Highlights table in the Fund’s most recent Annual Report. “Other Expenses” have been adjusted to accurately reflect the authorized fees and expenses of the Institutional Class shares.
|
2 |
Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.40% for Institutional Class shares of the Fund and 0.80% for Class Y shares of the Fund. If “Total Annual Fund Operating Expenses” would fall below the current expense limit, Scout Investments may cause the Fund’s expenses to remain at the current expense limit while it is reimbursed for fees that it waived or expenses that it assumed during the three years following the end of the fiscal year in which Scout Investments waived fees or assumed expenses for the Fund, provided that such reimbursement will not cause the Fund to exceed any applicable expense limit that was in place when the fees were waived or expenses assumed. This expense limitation agreement may not be terminated prior to October 30, 2018 unless the Scout Board consents to an earlier revision or termination as being in the best interests of the Fund. |
3 |
Carillon Tower has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the Fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets for at least two years from the Closing Date of the Reorganization as follows: Class I - 0.40% and Class Y - 0.80%. This expense limitation excludes interest, taxes, brokerage commissions, short sale dividend and interest expenses, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the Fund’s Board of Trustees. Any reimbursement of Fund expenses or reduction in Carillon Tower’s investment advisory fees is subject to reimbursement by the Fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement. |
·
|
You invest $10,000 in the Fund for the time periods indicated;
|
·
|
Your investment has a 5% return each year;
|
·
|
The Fund’s operating expenses remain the same; and
|
·
|
The contractual agreement to limit overall fund expenses remains in place for the term of the agreement.
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
Scout Core Plus Bond Fund
|
||||
Institutional Class
|
$41
|
$198
|
$369
|
$864
|
Class Y
|
$82
|
$292
|
$520
|
$1,174
|
Pro forma Carillon Reams Core Plus Bond Fund (assuming the Reorganization is approved)
|
||||
Class I
|
$41 | $156 | $311 | $762 |
Class Y
|
$82 | $265 | $475 | $1,079 |
Acquired Fund
|
Acquiring Fund
|
Scout Core Plus Bond Fund
|
Carillon Reams Core Plus Bond Fund
|
Investment Objective
|
|
The investment objective of the Scout Core Plus Bond Fund is a high level of total return consistent with the preservation of capital.
The Scout Core Plus Bond Fund’s investment objective is a non-fundamental policy that may be changed by its Board without shareholder approval.
|
The Carillon Reams Core Plus Bond Fund will have the same investment objective.
The Carillon Reams Core Plus Bond Fund’s investment objective also will be a non-fundamental policy that may be changed by its Board without shareholder approval.
|
Principal Investment Strategies
|
|
Under normal circumstances, the Fund invests at least 80% of its net assets in bonds of varying maturities, including mortgage- and asset-backed securities. Any change in this 80% policy approved by the Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. The bonds in which the Fund may invest also include other fixed income instruments such as debt securities, to-be-announced securities and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The Fund invests primarily in investment grade securities, but may also invest up to 25% of its assets in non-investment grade securities, also known as high yield securities or “junk” bonds. Investment grade securities include securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization, such as BBB- or higher by Standard & Poor’s Financial Services LLC (“S&P®”). In addition, the Fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis. Securities will generally be U.S. dollar denominated although they may be securities of foreign issuers. The Fund may also invest in securities denominated in foreign currencies. The Fund’s investments in the securities of foreign issuers may include investments in developing countries or emerging markets.
The Fund may invest in derivative instruments, such as options, futures contracts (including interest rate, bond, U.S. Treasury and fixed income index futures contracts), currency forwards and swap agreements (including credit default swaps) subject to applicable law and any other restrictions described in the Fund’s Prospectus or Statement of Additional Information (“SAI”). The Fund’s investment in credit default swap agreements may include both single-name credit default swap agreements and credit default swap index products, such as CDX index products. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select currencies, interest rates, countries, durations or credit risks. These derivatives may be used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain
|
Same, except that references to “investment adviser” are changed to “portfolio management team.”
|
exposure to certain instruments or markets (i.e., the corporate bond market) in a more efficient or less expensive way. The credit default swap agreements that the Fund invests in may provide exposure to an index of securities representative of the entire investment grade and high yield fixed income markets, which can include underlying issuers rated as low as CCC by S&P®. Derivative instruments that provide exposure to bonds may be used to satisfy the Fund’s 80% investment policy.
The investment adviser attempts to maximize total return over a long-term horizon through opportunistic investing in a broad array of eligible securities. The investment process combines top-down interest rate management with bottom-up fixed income security selection, focusing on undervalued issues in the fixed income market. The investment adviser first establishes the portfolio’s duration, or interest rate sensitivity. The investment adviser determines whether the fixed income market is under- or over-priced by comparing current real interest rates (the nominal rates on U.S. Treasury securities less the investment adviser’s estimate of inflation) to historical real interest rates. If the current real interest rate is higher than historical norms, the market is considered undervalued and the investment adviser will manage the portfolio with a duration greater than the benchmark. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. If the current real interest rate is less than historical norms, the market is considered overvalued and the investment adviser will run a defensive portfolio by managing the portfolio with a duration less than the benchmark. The investment adviser normally structures the Fund so that the overall portfolio has a duration of between two and seven years based on market conditions. For purposes of calculating the Fund’s portfolio duration, the Fund includes the effect of the derivative instruments held by the Fund.
The investment adviser then considers sector exposures. Sector exposure decisions are made on both a top-down and bottom-up basis. A bottom-up issue selection process is the major determinant of sector exposure, as the availability of attractive securities in each sector determines their underweighting or overweighting in the Fund subject to sector exposure constraints. However, for the more generic holdings in the Fund, such as agency notes and pass-through mortgage backed securities, top-down considerations will drive the sector allocation process on the basis of overall measurements of sector value such as yield spreads or price levels.
|
|
Once the investment adviser has determined an overall market strategy, the investment adviser selects the most attractive fixed income securities for the Fund. The portfolio managers screen hundreds of securities to determine how each will perform in various interest rate environments. The portfolio managers construct these scenarios by considering the outlook for interest rates, fundamental credit analysis and option-adjusted spread analysis. The portfolio managers compare these investment opportunities and assemble the Fund’s portfolio from the best available values. The investment adviser constantly monitors the expected returns of the securities in the Fund versus those available in the market and of other securities the investment adviser is considering for purchase. The investment adviser’s strategy is to replace securities that it feels are approaching fair market value with those that, according to its analysis, are significantly undervalued. As a result of this strategy, the Fund’s portfolio turnover rate will vary from year to year depending on market conditions. |
|
Investment Adviser
|
|
Scout Investments
|
Carillon Tower
|
Investment Subadviser
|
|
None.
|
Scout Investments
|
Portfolio Managers
|
|
No portfolio manager is solely responsible for making recommendations for portfolio purchases and sales. Instead, all portfolio managers work together to develop investment strategies with respect to the Fund’s portfolio structure and issue selection. Portfolio strategy is reviewed weekly by all the portfolio managers. A staff of research analysts, traders and other investment professionals supports the portfolio managers.
Mark M. Egan, CFA, is the lead portfolio manager of the Fixed Income Funds. Thomas M. Fink, CFA; Todd C. Thompson, CFA; Stephen T. Vincent, CFA; and Clark W. Holland, CFA, are co-portfolio managers of the Fixed Income Funds. Mr. Egan joined Scout Investments on November 30, 2010. He oversees the entire fixed income division of Scout Investments, Reams Asset Management, and retains oversight over all investment decisions. Mr. Egan was a portfolio manager of Reams Asset Management Company, LLC (“Reams”) from April 1994 until November 2010 and was a portfolio manager of Reams Asset Management Company, Inc. from June 1990 until March 1994. Mr. Egan was a portfolio manager of National Investment Services until May 1990. He is a CFA® charterholder and a member of the CFA Institute. |
Same.
|
Mr. Fink joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from December 2000 until November 2010. Mr. Fink was previously a portfolio manager at Brandes Fixed Income Partners from 1999 until 2000, Hilltop Capital Management from 1997 until 1999, Centre Investment Services from 1992 until 1997 and First Wisconsin Asset Management from 1986 until 1992. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Thompson joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from July 2001 until November 2010. Mr. Thompson was a portfolio manager at Conseco Capital Management from 1999 until June 2001 and was a portfolio manager at the Ohio Public Employees Retirement System from 1994 until 1999. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Vincent joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from October 2005 until November 2010. Mr. Vincent was a senior fixed income analyst at Reams from September 1994 to October 2005. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Holland joined Scout Investments on November 30, 2010 and became a portfolio manager in October 2014. He was a portfolio analyst at Scout Investments from December 2010 until October 2014 and at Reams from February 2002 until November 2010. Prior to joining the firm, Mr. Holland was a portfolio manager and investment product specialist at Wells Fargo Investment Management Group. He is a CFA® charterholder and a member of the CFA Institute.
|
Credit Risks
|
The Fund could lose money if the issuer of a fixed income security is unable or unwilling, or is perceived as unable or unwilling (whether by market participants, ratings agencies, pricing services or otherwise) to meet its financial obligations or goes bankrupt. Securities are subject to varying degrees of credit risk, which are often reflected in their credit ratings. The downgrade of the credit rating of a security held by the Fund may decrease its value. Credit risk usually applies to most fixed income securities. U.S. government securities, especially those that are not backed by the full faith and credit of the U.S. Treasury, such as securities supported only by the credit of the issuing governmental agency or government-sponsored enterprise, carry at least some risk of nonpayment, and the maximum potential liability of the
|
issuers of such securities may greatly exceed their current resources. There is no assurance that the U.S. government would provide financial support to the issuing entity if not obligated to do so by law. Further, any government guarantees on U.S. government securities that the Fund owns extend only to the timely payment of interest and the repayment of principal on the securities themselves and do not extend to the market value of the securities themselves or to shares of the Fund. | |
Credit Ratings Risks
|
Ratings by nationally recognized rating agencies represent the agencies’ opinion of the credit quality of an issuer. However, these ratings are not absolute standards of quality and do not guarantee the creditworthiness of an issuer. Ratings do not necessarily address market risk and may not be revised quickly enough to reflect changes in an issuer’s financial condition.
|
Derivatives Risks
|
Derivatives, such as options, futures contracts, currency forwards or swap agreements, may involve greater risks than if the Fund had invested in the reference obligation directly. Derivatives are subject to general market risks, liquidity risks, interest rate risk, credit risks and management risks. Derivatives also present the risk that the other party to the transaction will fail to perform. Derivatives also involve an increased risk of mispricing or improper valuation of the derivative instrument, and imperfect correlation between the value of the derivative and the underlying instrument so that the Fund may not realize the intended benefits. When used for hedging, changes in the value of the derivative may also not correlate perfectly with the underlying asset, rate or index. Derivatives risk may be more significant when derivatives are used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain exposure to certain instruments or markets, rather than solely to hedge the risk of a position held by the Fund. Derivatives can cause the Fund to participate in losses (as well as gains) in an amount that significantly exceeds the Fund’s initial investment. Also, suitable derivative transactions may not be available in all circumstances and there can be no assurance that the Fund will engage in these transactions to reduce exposure to other risks when that would be beneficial. The regulation of cleared and uncleared swap agreements, as well as other derivatives, is a rapidly changing area of law and is subject to modification by government and judicial action. It is not possible to predict fully the effects of current or future regulation. Changes in government regulation of various types of derivatives instruments may make derivatives more costly or limit the availability of derivatives, which may limit or prevent the Fund from using certain types of derivative instruments as part of its investment strategy; may affect the character, timing and amount of the Fund’s taxable income or gains; or may otherwise adversely affect the value or performance of derivatives. Compared to other types of investments, derivatives may also be less tax efficient. The Fund’s use of derivatives may be limited by the requirements for taxation of the Fund as a regulated investment company. |
Fixed Income Security Risks
|
Fixed income market risk is the risk that the prices of, and the income generated by, fixed income securities held by the Fund may decline significantly and/or rapidly in response to adverse issuer, political, regulatory, general economic and market conditions, or other developments, such as regional or global economic instability (including terrorism and related geopolitical risks), interest rate fluctuations, and those events directly involving the issuers that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment. These events may lead to periods of volatility, which may be exacerbated by changes in bond market size and structure. In addition, adverse market events may lead to increased redemptions, which could cause the Fund to experience a loss when selling securities to meet redemption requests by shareholders. The risk of loss increases if the redemption requests are unusually large or frequent. |
High Yield Security Risks
|
Investments in securities rated below investment grade, or “junk bonds,” generally involve significantly greater risks of loss of your money than an investment in investment grade bonds. Compared with issuers of investment grade bonds, junk bonds are more likely to encounter financial difficulties and to be materially affected by these difficulties. Rising
|
interest rates may compound these difficulties and reduce an issuer’s ability to repay principal and interest obligations. Issuers of lower-rated securities also have a greater risk of default or bankruptcy. Additionally, due to the greater number of considerations involved in the selection of the Fund’s securities, the achievement of the Fund’s objective depends more on the skills of the portfolio manager than investing only in higher-rated securities. Therefore, your investment may experience greater volatility in price and yield. High-yield securities may be less liquid than higher quality investments. A security whose credit rating has been lowered may be particularly difficult to sell. | |
Income Risks
|
The Fund’s income could decline due to falling market interest rates. In a falling interest rate environment, the Fund may be required to invest its assets in lower-yielding securities. Because interest rates vary, it is impossible to predict the income or yield of the Fund for any particular period.
|
Interest Rate Risks |
Investments in investment grade and non-investment grade fixed income securities are subject to interest rate risk. The value of the Fund’s fixed income investments typically will fall when interest rates rise. The Fund may be particularly sensitive to changes in interest rates if it invests in debt securities with intermediate and long terms to maturity. Debt securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. For example, if a bond has a duration of five years, a 1% increase in interest rates could be expected to result in a 5% decrease in the value of the bond. The Federal Reserve raised the federal funds rate in December 2016, March 2017 and June 2017 and has signaled additional increases in 2017. Interest rates may rise significantly and/or rapidly, potentially resulting in substantial losses to the Fund. During periods of very low or negative interest rates, the Fund may be unable to maintain positive returns. Certain European countries and Japan have recently experienced negative interest rates on deposits and debt securities have traded at negative yields. Negative interest rates may become more prevalent among non-U.S. issuers, and potentially within the United States. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Fund is exposed to such interest rates. |
International Investing Risks
|
Investments in foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s return and NAV may be affected by fluctuations in currency exchange rates or political or economic conditions and regulatory requirements in a particular country. Foreign markets, as well as foreign economies and political systems, may be less stable than U.S. markets, and changes in the exchange rates of foreign currencies can affect the value of the Fund’s foreign assets. Foreign laws and accounting standards typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Custodial and/or settlement systems in foreign markets may not be fully developed and the laws of certain countries may limit the ability to recover assets if a foreign bank or depository or their agents goes bankrupt. Over a given period of time, foreign securities may underperform U.S. securities—sometimes for years. The Fund could also underperform if it invests in countries or regions whose economic performance falls short. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change, which may lead to default or expropriation, and inadequate government oversight and accounting. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. The effect of recent, worldwide economic instability on specific foreign markets or issuers may be difficult to predict or evaluate. Some national economies continue to show profound instability, which may in turn affect their international trading and financial partners or other members of their currency bloc. Foreign security risk may also apply to ADRs, GDRs and EDRs. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than |
or in addition to investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return. | |
Issuer Risks
|
The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
|
Leverage Risks Associated with Financial
Instruments |
Certain transactions of the Fund may give rise to a form of leverage. Such transactions may include, among others, the use of buybacks, dollar rolls, and when-issued, delayed delivery or forward commitment transactions. Certain derivatives that the Fund may use may create leverage. Derivatives that involve leverage can result in losses to the Fund that exceed the amount originally invested in the derivatives. Certain types of leveraging transactions, such as short sales that are not “against the box,” could be subject to unlimited losses in cases where the Fund, for any reason, is unable to close out the transaction. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leveraging may cause the Fund to be more volatile than if the Fund had not been leveraged. This is because leveraging tends to exaggerate the effect of any increase or decrease in the value of the Fund’s portfolio securities. |
Liquidity Risks
|
Liquidity risk is the possibility that the Fund might be unable to sell a security promptly and at an acceptable price, which could have the effect of decreasing the overall level of the Fund’s liquidity. Market developments may cause the Fund’s investments to become less liquid and subject to erratic price movements. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund could lose money if it cannot sell a security at the time and price that would be most beneficial to the Fund. |
Management Risks
|
The Fund is subject to management risk as an actively managed investment portfolio. The investment adviser and the portfolio managers will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. If the investment adviser is not able to select better-performing equity and fixed income securities, the Fund may lose money.
|
Maturity Risks
|
The Fund will invest in fixed income securities of varying maturities. A fixed income security’s maturity is one indication of the interest rate exposure of a security. Generally, the longer a fixed income security’s maturity, the greater the risk. Conversely, the shorter a fixed income security’s maturity, the lower the risk.
|
Mortgage- and Asset-Backed Securities Risks
|
Mortgage- and asset-backed security risk, which is possible in an unstable or depressed housing market, arises from the potential for mortgage failure or premature repayment of principal, or a delay in the repayment of principal. The reduced value of the Fund’s securities and the potential loss of principal as a result of a mortgagee’s failure to repay would have a negative impact on the Fund. Premature repayment of principal would make it difficult for the Fund to reinvest the prepaid principal at a time when interest rates on new mortgages are declining, thereby reducing the Fund’s income. Conversely, a delay in the repayment of principal could lengthen the expected maturity of the securities, thereby increasing the potential for loss when prevailing interest rates rise, which could cause the values of the securities to fall sharply.
|
Portfolio Turnover Risks
|
The Fund may engage in more active and frequent trading of portfolio securities to a greater extent than certain other mutual funds with similar investment objectives. The Fund’s turnover rate may vary greatly from year to year or during periods within a year. A high rate of portfolio turnover may lead to greater transaction costs, result in adverse tax consequences to investors (from increased recognition of net capital gains, which are taxable to shareholders when distributed to them) and adversely affect performance.
|
Redemption Risks |
The Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Fund, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed income securities, may result in decreased liquidity and increased volatility in the fixed income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Fund’s performance. |
Valuation Risks
|
Securities held by the Fund may be priced by an independent pricing service and may also be priced using dealer quotes or fair valuation methodologies in accordance with valuation procedures adopted by the Fund’s Board. The prices provided by the independent pricing service or dealers or the fair valuations may be different from the prices used by other mutual funds or from the prices at which securities are actually bought and sold.
|
Non-Fundamental Investment Policies
|
||
Policy
|
Acquired Fund
|
Acquiring Fund
|
Scout Core Plus Bond Fund
|
Carillon Reams Core Plus Bond Fund
|
|
Investing in Illiquid Securities
|
The Fund will not invest in illiquid securities if, as a result of such investment, more than 15% of its net assets would be invested in illiquid securities, or such other amounts as may be permitted under the Investment Company Act of 1940, as amended (“1940 Act”).
|
The Fund may not invest more than 15% of its net assets in repurchase agreements maturing in more than seven days or in other illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions as to resale and including privately placed securities.
|
Investing in Other Investment Companies
|
The Fund will not purchase shares of other investment companies, except in compliance with the 1940 Act or pursuant to a plan of merger or consolidation.
|
The Fund may invest in securities issued by other investment companies as permitted by the 1940 Act, and the rules thereunder and any exemptive relief.
|
Borrowing Money
|
The Fund does not intend to borrow money in excess of 5% of its net assets, however, if borrowings do exceed 5%, the Fund will not purchase additional investment securities until outstanding borrowings represent less than 5% of the Fund’s assets.
|
None.
|
Investing for Control
|
The Fund will not invest in companies for the purpose of exercising control of management.
|
None.
|
Short Selling and Margin
|
The Fund will not purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin deposits in connection with futures contracts, options on futures contracts, or other derivative instruments shall not constitute purchasing securities on margin, or sell securities short, unless the Fund owns or has the right to obtain securities equivalent in kind and amount to the securities sold short or unless it covers such short sale as required by the current rules and positions of the SEC or its staff, and provided that transactions in options, futures contracts, options on futures contracts, or other derivative instruments are not deemed to constitute selling securities short.
|
None.
|
Investing in UMB
|
The Fund will not invest in securities issued by UMB Financial Corporation or affiliate banks of UMB Financial Corporation.
|
None.
|
Bank Borrowings
|
The Fund will not purchase securities when bank borrowings exceed 5% of its total assets.
|
None.
|
Futures and Options
|
The Fund will not engage in futures or options on futures transactions,
|
None.
|
except in accordance with Rule 4.5 under the CEA. |
Scout Core Plus Bond Fund – Calendar Year Total Returns (Institutional Class)
|
|||||||||
[Bar chart to be inserted]
|
|||||||||
7.86%
|
-9.15%
|
35.19%
|
10.06%
|
8.28%
|
9.85%
|
-0.36%
|
2.32%
|
0.10%
|
[ ]%
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
Best Quarter (% and quarter end date)
|
Worst Quarter (% and quarter end date)
|
||||||||
[25.80% (June 30, 2009)]
|
[-5.13% (September 30, 2008)]
|
||||||||
The calendar year-to-date total return as of [June 30, 2017] was [ ]%.
|
Scout Core Plus Bond Fund - Average Annual Total Returns (As of December 31, 2016)
|
|||
One Year
|
Five Years
|
Ten Years/Since Inception
|
|
Institutional Class
|
|||
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions and Sale of Fund Shares
|
[ ]%
|
[ ]%
|
[ ]%
|
Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Class Y (Inception Date: November 12, 2009)
|
|||
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Bloomberg Barclays U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Net Assets
(in millions)
|
Net Asset Value Per Share
|
Shares Outstanding
|
|
Scout Core Plus Bond Fund – Institutional Class
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Reams Core Plus Bond Fund – Class I (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
Scout Core Plus Bond Fund – Class Y
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Reams Core Plus Bond Fund – Class Y (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
PROPOSAL 3:
|
APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT INTERNATIONAL FUND INTO THE CARILLON SCOUT INTERNATIONAL FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST. |
·
|
The Carillon Scout International Fund is newly organized and has no assets, operating history or performance information of its own as of the date of this Proxy Statement/Prospectus. The Carillon Scout International Fund has been created as a shell series of Acquiring Trust solely for the purposes of acquiring the Scout International Fund’s assets and continuing its business investment operations, and will not conduct any investment operations until after the Closing Date of the Reorganization. If shareholders of the Scout International Fund approve the Fund’s Reorganization, the Carillon Scout International Fund will assume and publish the operating history and performance record of the Scout International Fund.
|
·
|
The Carillon Scout International Fund and the Scout International Fund have substantially similar investment objectives, policies, and strategies. Each Fund’s investment objective is to seek long-term growth of capital and income. Each Fund seeks to achieve its investment objective by investing in a diversified portfolio consisting primarily of equity securities of established companies either located outside the United States or whose primary business is carried on outside the United States. For a detailed comparison of the Funds’ investment policies and strategies, see “Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers” below.
|
·
|
The Carillon Scout International Fund and the Scout International Fund have substantially similar risk profiles, although there are differences in how these are described. For a detailed comparison of each Fund’s risks, see “Comparison of Principal Risk Factors” below.
|
·
|
Scout Investments currently serves as the investment adviser for the Scout International Fund. After the Reorganization, Carillon Tower will serve as the investment adviser for the Carillon Scout International Fund and Scout Investments will serve as the subadviser for the Fund. As described above, Carillon Tower has entered into an agreement with UMB to purchase Scout Investments and the Reorganization is being proposed in connection with that acquisition. For a detailed description of Carillon Tower and Scout Investments, please see “Additional Information about the Funds - Service Providers” below.
|
·
|
Shareholders of the Scout International Fund will receive Class I shares of the Carillon Scout International Fund pursuant to the Reorganization. Shareholders will not pay any sales charges in connection with the Reorganization. Please see “Comparative Fee and Expense Tables,” “Additional Information about the Reorganizations” and “Additional Information about the Funds” below for more information.
|
·
|
The annual operating expense ratios for the Carillon Scout International Fund’s Class I shares, for the fiscal year following the Reorganization, are not expected to exceed those of the Scout International Fund for the fiscal year ended June 30, 2016. For a more detailed comparison of the fees and expenses of the Funds,
|
|
please see “Comparative Fee and Expense Tables” and “Additional Information about the Funds” below.
|
·
|
The Scout International Fund pays Scout Investments an advisory fee at the annual rate of 0.80% on the first $1 billion of the Fund’s average daily net assets and 0.70% on the average daily net assets over $1 billion. The Carillon Scout International Fund will pay Carillon Tower an advisory fee at the same rates. Carillon Tower will pay Scout Investments a subadvisory fee at the annual rate of 0.80% on the first $1 billion of the Fund’s average daily net assets and 0.70% on the average daily net assets over $1 billion.
|
·
|
Currently, the Acquired Funds pay Scout Investments and UMB Fund Services, Inc. (“UMBFS”) for administrative services and fund accounting services. Scout Investments receives the following fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing certain administrative services to the funds: 0.05% of the funds’ first $5 billion of aggregate average daily net assets; 0.04% of the funds’ next $1 billion of aggregate average daily net assets; 0.03% of the funds’ next $1 billion of aggregate average daily net assets; 0.02% of the funds’ next $1 billion of aggregate average daily net assets; and 0.01% of the funds’ aggregate average daily net assets in excess of $8 billion. UMBFS receives the following administration fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing administrative and fund accounting services to the funds: 0.04% of the funds’ aggregate average daily net assets up to $1.25 billion; 0.03% of the funds’ aggregate average daily net assets up to the next $1.25 billion; and 0.02% of the funds’ aggregate average daily net assets in excess of $2.5 billion. After the Reorganization, Carillon Tower will provide administrative services to the Acquiring Fund and will receive an administrative fee at the annual rate of 0.10% of average daily net assets of the Acquiring Fund’s Class I shares. Carillon Tower has also entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC (“USBFS”) to provide the Acquiring Fund certain financial reporting and tax services. The fees for sub-administration services are paid by Carillon Tower to USBFS. See “Additional Information about the Funds” below for more information about other service providers. |
·
|
UMB and Carillon Tower or their affiliates have agreed to bear the costs associated with the Reorganization equally. The Scout International Fund and the Carillon Scout International Fund will not bear any of the costs and expenses of the Reorganization.
|
Scout International Fund
|
Pro forma Carillon Scout International Fund
(assuming the Reorganization is
approved)
|
|
Shares
|
Class I
|
|
Maximum Sales Charge (Load) Imposed on Purchases
|
None
|
None
|
Maximum Deferred Sales Charge (Load)
|
None
|
None
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
None
|
Redemption Fee
|
None
|
None
|
Exchange Fee
|
None
|
None
|
Scout International Fund
|
Pro forma Carillon Scout International Fund (assuming the Reorganization is approved)
|
|
Shares
|
Class I
|
|
Management Fee
|
0.74%
|
0.74%
|
Distribution and/or Service Fees (12b-1 fees)
|
None
|
None
|
Other Expenses
|
0.31%
|
0.31% |
Total Annual Fund Operating Expenses
|
1.05%
|
1.05% |
·
|
You invest $10,000 in the Fund for the time periods indicated;
|
·
|
Your investment has a 5% return each year; and
|
·
|
The Fund's operating expenses remain the same.
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
Scout International Fund – Shares
|
$107
|
$334
|
$579
|
$1,283
|
Pro forma Carillon Scout International Fund (assuming the Reorganization is approved) – Class I
|
$107 | $334 | $579 | $1,283 |
Acquired Fund
|
Acquiring Fund
|
Scout International Fund
|
Carillon Scout International Fund
|
Investment Objective
|
|
The investment objectives of the Scout International Fund are long-term growth of capital and income.
The Scout International Fund’s investment objective is a non-fundamental policy that may be changed by its Board without shareholder approval.
|
The Carillon Scout International Fund will have the same investment objectives.
The Carillon Scout International Fund’s investment objective also will be a non-fundamental policy that may be changed by its Board without shareholder approval.
|
Principal Investment Strategies
|
|
The Fund normally pursues its objectives by investing in a diversified portfolio consisting primarily of equity securities of established companies either located outside the United States or whose primary business is carried on outside the United States. The equity securities in which the Fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, and warrants and other rights. The Fund normally invests at least 80% of its net assets in equity securities as described above.
In selecting securities for the Fund, Scout Investments, primarily performs fundamental “bottom-up” analysis to uncover companies that best fit its investment criteria. This includes evaluation of a company’s cash flow, financial strength, profitability, and potential or actual catalysts that could positively impact share prices. The Fund primarily seeks to invest in securities of seasoned companies that are known for the quality and acceptance of their products or services.
The investment adviser also considers geopolitical and macroeconomic issues. In addition, the Fund may invest in a company domiciled in the United States if more than 50% of the company’s assets, personnel, sales or earnings are located outside the United States and therefore the company’s primary business is carried on
|
Same, except that references to “investment adviser” are changed to “portfolio management team.”
|
outside the United States.
The investment adviser believes that the intrinsic worth and consequent value of the stock of most well-managed and successful companies does not usually change rapidly, even though wide variations in the price may occur. Accordingly, long-term positions in stocks will normally be taken and maintained while the companies’ record and prospects continue to meet with the investment adviser’s approval.
The Fund intends to diversify investments among industries and among a number of countries throughout the world. In addition, the Fund may invest a substantial portion of its assets (more than 25%) in one or more countries if economic and business conditions warrant such investment. The Fund will invest no more than 20% of its net assets in investments in developing countries or emerging markets.
|
|
Cash Management Investments
|
|
The Fund may also invest a portion of its net assets (up to 20%) in high-grade fixed income securities or other investments that may provide income, including cash and money market securities. In such cases, the Fund will resume investing primarily in equity securities when conditions warrant.
|
|
Temporary Defensive Strategy
|
|
The Fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the Fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the Fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.
|
|
Investment Adviser
|
|
Scout Investments
|
Carillon Tower
|
Investment Subadviser
|
|
None.
|
Scout Investments
|
Portfolio Managers
|
|
Michael D. Stack, CFA, is the lead portfolio manager of the Scout International Fund. Mr. Stack has served as
|
Same.
|
the lead portfolio manager of the Fund since January 1, 2015. Mr. Stack previously was a co-lead portfolio manager of the Fund from March 31, 2014 through December 31, 2014, co-portfolio manager of the Fund from April 2012 through March 30, 2014 and an assistant portfolio manager of the Fund from February 2006 through December 2007. Mr. Stack has served as a portfolio manager at Scout Investments since February 2006. Prior to joining Scout Investments, he was employed at Overseas Asset Management (Cayman) LTD from 2002-2004, U.S. Trust Company of New York from 1998-2001 and J&T Securities, Inc. from 1996-1997. Mr. Stack earned his Bachelor of Commerce from University College Dublin and an MBA in Finance from Columbia Business School in New York. Mr. Stack is a CFA® charterholder and a member of the CFA Society Kansas City as well as the CFA Institute.
Angel M. Lupercio is a co-portfolio manager of the Scout International Fund. Mr. Lupercio has served as a co-portfolio manager of the Fund since January 1, 2015. Mr. Lupercio previously served as a senior investment analyst for the Scout Investments’ international investment team. He joined Scout Investments in 2007, following previous employment at A.G. Edwards & Sons, Inc. from 2005-2007 and Bear Stearns from 2002-2005. Mr. Lupercio earned his Bachelor of Science in Business Administration from Rockhurst University and his MBA with a concentration in finance from the Olin Business School at Washington University in St. Louis. Mr. Lupercio is a member of the CFA Society Kansas City.
|
Equity Securities
|
The Fund’s equity securities investments are subject to stock market risk. Such investments may also expose the Fund to additional risks:
Common Stocks. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are unrelated to the company, such as changes in interest rates, exchange rates or industry regulation. Companies that pay dividends on their common stock generally only do so after they invest in their own business and make required payments
|
to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock.
Preferred Stocks. Preferred securities are subject to issuer-specific and stock market risks; however, preferred securities may be less liquid than common stocks and offer more limited participation in the growth of an issuer. If interest rates rise, the dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred shareholders may have only certain limited rights if distributions are not paid for a stated period, but generally have no legal recourse against the issuer and may suffer a loss of value if distributions are not paid. Preferred stocks may have mandatory sinking fund provisions, as well as provisions for their call or redemption prior to maturity which can have a negative effect on their prices when interest rates decline. Because the rights of preferred stock on distribution of a corporation’s assets in the event of its liquidation are generally subordinated to the rights associated with a corporation’s debt securities, in the event of an issuer’s bankruptcy, there is substantial risk that there will be nothing left to pay preferred stockholders after payments, if any, to bondholders have been made. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt securities to actual or perceived changes in the company’s financial condition or prospects.
Convertible Securities. The investment value of a convertible security (“convertible”) is based on its yield and tends to decline as interest rates increase. The conversion value of a convertible is the market value that would be received if the convertible were converted to its underlying common stock. Since it derives a portion of its value from the common stock into which it may be converted, a convertible is also subject to the same types of market and issuer-specific risks that apply to the underlying common stock. A convertible may be subject to redemption at the option of the issuer at a price established in the convertible’s governing instrument, which may be less than the current market price of the security. Convertibles typically are “junior” securities, which means an issuer may pay interest on its non-convertible debt before it can make payments on its convertibles. In the event of a liquidation, holders of convertibles may be paid before a company’s common stockholders but after holders of a company’s senior debt obligations. Depositary Receipts. The Fund may invest in securities issued by foreign companies through ADRs, GDRs and EDRs. These securities are subject to many of the risks inherent in investing in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt. Rights and Warrants. Investments in rights and warrants may be more speculative than certain other types of investments because rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer. In addition, the value of a right or a warrant does not necessarily change with the value of the underlying securities and a right or a warrant ceases to have value if it is not exercised prior to its expiration date. |
|
Foreign and Emerging Market Securities Risks
|
Investments in foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s return and NAV may be affected by fluctuations in currency exchange rates or political or economic conditions and regulatory requirements in a particular country. Foreign markets, as well as foreign economies and political systems, may be less stable than U.S. markets, and changes in the exchange rates of foreign currencies can affect the value of the Fund’s foreign assets. Foreign laws and accounting standards typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Custodial and/or settlement systems in foreign markets may not be fully developed and the laws of certain countries
|
may limit the ability to recover assets if a foreign bank or depository or their agents goes bankrupt. Over a given period of time, foreign securities may underperform U.S. securities—sometimes for years. The Fund could also underperform if it invests in countries or regions whose economic performance falls short. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change, which may lead to default or expropriation, and inadequate government oversight and accounting. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. Some national economies continue to show profound instability, which may in turn affect their international trading and financial partners or other members of their currency bloc. Foreign security risk may also apply to ADRs, GDRs and EDRs. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than or in addition to investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return. | |
Growth Stocks
|
Growth companies are expected to increase their earnings at a certain rate. When these expectations are not met, investors may punish the prices of stocks excessively, even if earnings showed an absolute increase. Growth company stocks also typically lack the dividend yield that can cushion stock prices in market downturns.
|
Liquidity
|
Liquidity risk is the possibility that the Fund might be unable to sell a security promptly and at an acceptable price, which could have the effect of decreasing the overall level of the Fund’s liquidity. Market developments may cause the Fund’s investments to become less liquid and subject to erratic price movements. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund could lose money if it cannot sell a security at the time and price that would be most beneficial to the Fund. |
Management Risks
|
The Fund is subject to management risk as an actively managed investment portfolio. The investment adviser and the portfolio managers will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. If the investment adviser is not able to select better-performing equity and fixed income securities, the Fund may lose money.
|
Market Risks
|
Markets may at times be volatile and the value of the Fund’s stock holdings may decline in price, sometimes significantly and/or rapidly, because of changes in prices of its holdings or a broad stock market decline. The value of a security may decline due to adverse issuer-specific conditions or general market conditions which are not specifically related to a particular company, such as real or perceived adverse political, regulatory, market, economic or other developments that may cause broad changes in market value, changes in the general outlook for corporate earnings, changes in interest or currency rates, public perceptions concerning these developments or adverse investment sentiment
|
generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Terrorism and related geopolitical risks have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. In addition, markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in stock prices could be a sustained trend or a drastic movement. The stock markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations. The results of the recent U.S. presidential election may result in significant changes in certain policies. These changes may result in lower corporate taxes, higher levels of public debt, higher interest rates, more restrictions on international trade, and less stringent prudential regulation of certain players in the financial markets. | |
Market Timing
|
Because of specific securities the Fund may invest in, it could be subject to the risk of market timing activities by Fund shareholders. Some examples of these types of securities are high-yield, small-cap and foreign securities. Typically, foreign securities offer the most opportunity for these market timing activities. The Fund generally prices these foreign securities using their closing prices from the foreign markets in which they trade, typically prior to the Fund’s calculation of its NAV. These prices may be affected by events that occur after the close of a foreign market but before the Fund prices its shares. In such instances, the Fund may fair value foreign securities. However, some investors may engage in frequent short-term trading in the Fund to take advantage of any price differentials that may be reflected in the NAV of the Fund’s shares. There is no assurance that fair valuation of securities can reduce or eliminate market timing. There is no guarantee that the manager and transfer agent of the Funds can detect all market timing activities. |
Value Investing Risks
|
Investments in value stocks are subject to the risk that their true worth may not be fully realized by the market. This may result in the value stocks’ prices remaining undervalued for extended periods of time. The Fund’s performance also may be affected adversely if value stocks remain unpopular with or lose favor among investors.
|
Non-Fundamental Investment Policies
|
||
Policy
|
Acquired Fund
|
Acquiring Fund
|
Scout International Fund
|
Carillon Scout International Fund
|
|
Investing in Illiquid Securities
|
The Fund may invest up to 15% of its net assets in securities that are considered to be illiquid.
|
The Fund may not invest more than 15% of its net assets in repurchase agreements maturing in more than seven days or in other illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions as to resale and including privately placed securities.
|
Investing in Other Investment Companies
|
The Fund will not purchase shares of other investment companies except in the open market at ordinary broker’s commission or pursuant to a plan of merger or consolidation.
|
The Fund may invest in securities issued by other investment companies as permitted by the 1940 Act, and the rules thereunder and any exemptive relief.
|
Borrowing Money
|
The Fund does not intend to borrow money in excess of 5% of its net assets, however, if borrowings do exceed 5%, the Fund will not purchase additional investment securities until outstanding borrowings represent less than 5% of the Fund’s assets.
|
None.
|
Investing for Control
|
The Fund will not invest in companies for the purpose of exercising control of management;
|
None.
|
Short Selling and Margin
|
The Fund will not purchase securities on margin, or sell securities short.
|
None.
|
Investing in New Issuers
|
The Fund will not invest in the aggregate more than 5% of the value of its gross assets in the securities of issuers (other than federal, state, territorial, or local governments, or corporations, or authorities established thereby), which, including predecessors, have not had at least three years’ continuous operations.
|
None.
|
Dealings with Officers or Directors
|
The Fund will not enter into dealings with its officers or directors, its
|
None.
|
investment adviser or underwriter, or their officers or directors, or any organization in which such persons have a financial interest, except for transactions in a Fund’s own shares or other securities through brokerage practices which are considered normal and generally accepted under the circumstances existing at the time. | ||
Investing in Securities of Companies Owned by Officers or Directors
|
The Fund will not purchase or retain securities of any company in which any Fund officers or directors, or Fund investment adviser or any of its partners, officers, or directors beneficially own more than 1/2 of 1% of said company’s securities, if all such persons owning more than 1/2 of 1% of said company’s securities own in the aggregate more than 5% of the outstanding securities of such company.
|
None.
|
Indebtedness of Others
|
The Fund will not make itself or its assets liable for the indebtedness of others.
|
None.
|
Unlimited Liability
|
The Fund will not invest in securities which are assessable or involve unlimited liability.
|
None.
|
Investing in UMB
|
The Fund will not invest in securities issued by UMB Financial Corporation or affiliate banks of UMB Financial Corporation.
|
None.
|
Scout International Fund – Calendar Year Total Returns
|
|||||||||
[Bar chart to be inserted]
|
|||||||||
17.80%
|
-38.06%
|
35.54%
|
13.17%
|
-12.35%
|
21.28%
|
13.14%
|
-4.36%
|
-4.47%
|
[ ]%
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
Best Quarter (% and quarter end date)
|
Worst Quarter (% and quarter end date)
|
||||||||
[21.57% (September 30, 2009)]
|
[-20.84% (September 30, 2011)]
|
||||||||
The calendar year-to-date total return as of [June 30, 2017] was [ ]%.
|
Scout International Fund - Average Annual Total Returns (As of December 31, 2016)
|
|||
One Year
|
Five Years
|
Ten Years
|
|
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions and Sale of Fund Shares
|
[ ]%
|
[ ]%
|
[ ]%
|
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Net Assets
(in millions)
|
Net Asset Value Per Share
|
Shares Outstanding
|
|
Scout International Fund
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Scout International Fund – Class I (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
PROPOSAL 4:
|
APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT LOW DURATION BOND FUND INTO THE CARILLON REAMS LOW DURATION BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST. |
·
|
The Carillon Reams Low Duration Bond Fund is newly organized and has no assets, operating history or performance information of its own as of the date of this Proxy Statement/Prospectus. The Carillon Reams Low Duration Bond Fund has been created as a shell series of Acquiring Trust solely for the purposes of acquiring the Scout Low Duration Bond Fund’s assets and continuing its business investment operations, and will not conduct any investment operations until after the Closing Date of the Reorganization. If shareholders of the Scout Low Duration Bond Fund approve the Fund’s Reorganization, the Carillon Reams Low Duration Bond Fund will assume and publish the operating history and performance record of the Scout Low Duration Bond Fund.
|
·
|
The Carillon Reams Low Duration Bond Fund and the Scout Low Duration Bond Fund have substantially similar investment objectives, policies, and strategies. Each Fund’s investment objective is to seek a high level of total return consistent with the preservation of capital. Each Fund seeks to achieve its investment objective by investing at least 80% of its net assets in fixed income instruments, which can be of varying maturity and include bonds, debt securities, mortgage- and asset-backed securities and other similar instruments issued by various U.S. and non-U.S. public and private-sector entities. Each Fund targets an estimated average portfolio duration of one to four years. Each Fund invests primarily in investment grade securities but may invest up to 25% in non-investment grade securities (commonly known as “junk bonds”). For a detailed comparison of the Funds’ investment policies and strategies, see “Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers” below. |
·
|
The Carillon Reams Low Duration Bond Fund and the Scout Low Duration Bond Fund have substantially similar risk profiles, although there are differences in how these are described. For a detailed comparison of each Fund’s risks, see “Comparison of Principal Risk Factors” below.
|
·
|
Scout Investments currently serves as the investment adviser for the Scout Low Duration Bond Fund. After the Reorganization, Carillon Tower will serve as the investment adviser for the Carillon Reams Low Duration Bond Fund and Scout Investments will serve as the subadviser for the Fund. As described above, Carillon Tower has entered into an agreement with UMB to purchase Scout Investments and the Reorganization is being proposed in connection with that acquisition. For a detailed description of Carillon Tower and Scout Investments, please see “Additional Information about the Funds - Service Providers” below.
|
·
|
Shareholders of the Scout Low Duration Bond Fund will receive Class I shares of the Carillon Reams Low Duration Bond Fund pursuant to the Reorganization. Shareholders will not pay any sales charges in connection with the Reorganization. Please see “Comparative Fee and Expense Tables,” “Additional Information about the Reorganizations” and “Additional Information about the Funds” below for more information.
|
·
|
The annual operating expense ratios for the Carillon Reams Low Duration Bond Fund’s Class I shares, for the fiscal year following the Reorganization, are not expected to exceed those of the Scout Low Duration Bond Fund for the fiscal year ended June 30, 2016. Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.40%. Carillon Tower will enter into a similar agreement to limit the Carillon Reams Low Duration Bond
|
|
Fund’s total annual operating expenses to 0.40% for Class I shares with a term lasting for at least two years from the Closing Date of the Reorganization. For a more detailed comparison of the fees and expenses of the Funds, please see “Comparative Fee and Expense Tables” and “Additional Information about the Funds” below.
|
·
|
The Scout Low Duration Bond Fund pays Scout Investments an advisory fee at the annual rate of 0.30% on the Fund’s average daily net assets. The Carillon Reams Low Duration Bond Fund will pay Carillon Tower an advisory fee at the same rate. Carillon Tower will pay Scout Investments a subadvisory fee at the annual rate of 0.30% on the Fund’s average daily net assets.
|
·
|
Currently, the Acquired Funds pay Scout Investments and UMB Fund Services, Inc. (“UMBFS”) for administrative services and fund accounting services. Scout Investments receives the following fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing certain administrative services to the funds: 0.05% of the funds’ first $5 billion of aggregate average daily net assets; 0.04% of the funds’ next $1 billion of aggregate average daily net assets; 0.03% of the funds’ next $1 billion of aggregate average daily net assets; 0.02% of the funds’ next $1 billion of aggregate average daily net assets; and 0.01% of the funds’ aggregate average daily net assets in excess of $8 billion. UMBFS receives the following administration fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing administrative and fund accounting services to the funds: 0.04% of the funds’ aggregate average daily net assets up to $1.25 billion; 0.03% of the funds’ aggregate average daily net assets up to the next $1.25 billion; and 0.02% of the funds’ aggregate average daily net assets in excess of $2.5 billion. After the Reorganization, Carillon Tower will provide administrative services to the Acquiring Fund and will receive an administrative fee at the annual rate of 0.10% of average daily net assets of the Acquiring Fund’s Class I shares. Carillon Tower has also entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC (“USBFS”) to provide the Acquiring Fund certain financial reporting and tax services. The fees for sub-administration services are paid by Carillon Tower to USBFS. See “Additional Information about the Funds” below for more information about other service providers. |
·
|
UMB and Carillon Tower or their affiliates have agreed to bear the costs associated with the Reorganization equally. The Scout Low Duration Bond Fund and the Carillon Reams Low Duration Bond Fund will not bear any of the costs and expenses of the Reorganization.
|
Scout Low Duration Bond Fund
|
Pro forma Carillon Reams Low Duration
Bond Fund (assuming the Reorganization
is approved)
|
|
Shares
|
Class I
|
|
Maximum Sales Charge (Load) Imposed on Purchases
|
None
|
None
|
Maximum Deferred Sales Charge (Load)
|
None
|
None
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
None
|
Redemption Fee
|
None
|
None
|
Exchange Fee
|
None
|
None
|
Scout Low Duration Bond Fund
|
Pro forma Carillon Reams Low Duration Bond Fund (assuming the Reorganization is approved)
|
|
Shares
|
Class I
|
|
Management Fee
|
0.30%
|
0.30%
|
Distribution and/or Service Fees (12b-1 fees)
|
None
|
None
|
Other Expenses
|
0.62%
|
0.62% |
Total Annual Fund Operating Expenses
|
0.92%
|
0.92% |
Adviser’s Fee Waiver and/or Expense Assumption1,2
|
(0.52)%
|
(0.52)% |
Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Assumption
|
0.40%
|
0.40%
|
1 |
Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.40%. If “Total Annual Fund Operating Expenses” would fall below the current expense limit, Scout Investments may cause the Fund’s expenses to remain at the current expense limit while it is reimbursed for fees that it waived or expenses that it assumed during the three years following the end of the fiscal year in which Scout Investments waived fees or assumed expenses for the Fund, provided that such reimbursement will not cause the Fund to exceed any applicable expense limit that was in place when the fees were waived or expenses assumed. This expense limitation agreement may not be terminated prior to October 30, 2018 unless the Scout Board consents to an earlier revision or termination as being in the best interests of the Fund. |
2 |
Carillon Tower has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the Fund to the extent that: annual operating expenses of the class exceed a percentage of the class’ average daily net assets for at least two years from the Closing Date of the Reorganization as follows: Class I - 0.40%. This expense limitation excludes interest, taxes, brokerage commissions, short sale dividend and interest expenses, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the Fund’s Board of Trustees. Any reimbursement of Fund expenses or reduction in Carillon Tower’s investment advisory fees is subject to reimbursement by the Fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement. |
·
|
You invest $10,000 in the Fund for the time periods indicated;
|
·
|
Your investment has a 5% return each year;
|
·
|
The Fund’s operating expenses remain the same; and
|
·
|
The contractual agreement to limit overall fund expenses remains in place for the term of the agreement.
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
Scout Low Duration Bond Fund – Shares
|
$41
|
$241
|
$458
|
$1,084
|
Pro forma Carillon Reams Low Duration Bond Fund – Class I (assuming the Reorganization is approved)
|
$41 | $186 | $405 | $1,033 |
Acquired Fund
|
Acquiring Fund
|
Scout Low Duration Bond Fund
|
Carillon Reams Low Duration Bond Fund
|
Investment Objective
|
|
The investment objective of the Scout Low Duration Bond Fund is a high level of total return consistent with the preservation of capital.
The Scout Low Duration Bond Fund’s investment objective is a non-fundamental policy that may be changed by its Board without shareholder approval.
|
The Carillon Reams Low Duration Bond Fund will have the same investment objective.
The Carillon Reams Low Duration Bond Fund’s investment objective will also be a non-fundamental policy that may be changed by its Board
without shareholder approval.
|
Principal Investment Strategies
|
|
Under normal circumstances, the Fund invests at least |
Same, except that references to “investment adviser” are
|
80% of its net assets in fixed income instruments. Any change in this 80% policy approved by the Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. The fixed income instruments in which the Fund may invest can be of varying maturities and include bonds, debt securities, mortgage- and asset-backed securities (including to-be-announced securities) and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The investment adviser targets an estimated average portfolio duration of one to four years. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. For purposes of calculating the Fund’s portfolio duration, the Fund includes the effect of the derivative instruments held by the Fund. The Fund invests primarily in investment grade securities, but may also invest up to 25% of its assets in non-investment grade securities, also known as high yield securities or “junk” bonds. Investment grade securities include securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization, such as BBB- or higher by Standard & Poor’s Financial Services LLC (“S&P®”). In addition, the Fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis. Securities will generally be U.S. dollar denominated although they may be securities of foreign issuers.
The Fund may invest in derivative instruments, such as options, futures contracts (including interest rate, bond, U.S. Treasury and fixed income index futures contracts), currency forwards and swap agreements (including credit default swaps) subject to applicable law and any other restrictions described in the Fund’s Prospectus or Statement of Additional Information (“SAI”). The Fund’s investment in credit default swap agreements may include both single-name credit default swap agreements and credit default swap index products, such as CDX index products. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select currencies, interest rates, countries, durations or credit risks. These derivatives may be used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain exposure to certain instruments or markets (i.e., the corporate bond market) in a more efficient or less expensive way. The credit default swap agreements that the Fund invests in may provide exposure to an index of securities representative of the entire investment grade and high yield fixed income markets, which can include underlying issuers rated as low as CCC by S&P®. Derivative instruments that provide exposure to |
changed to “portfolio management team.”
|
fixed income instruments may be used to satisfy the Fund’s 80% investment policy.
The investment adviser attempts to maximize total return through opportunistic investing in a broad array of eligible securities while structuring the Fund so that the overall portfolio has an average portfolio duration of between one to four years based on market conditions. The investment process combines top-down interest rate management with bottom-up fixed income security selection, focusing on undervalued issues in the fixed income market. The investment adviser first establishes the portfolio’s duration, or interest rate sensitivity. The investment adviser determines whether the fixed income market is under- or over-priced by comparing current real interest rates (the nominal rates on U.S. Treasury securities less the investment adviser’s estimate of inflation) to historical real interest rates. If the current real interest rate is higher than historical norms, the market is considered undervalued and the investment adviser will manage the portfolio with a duration greater than the benchmark. In general, securities with longer maturities are more sensitive to interest rate changes. If the current real interest rate is less than historical norms, the market is considered overvalued and the investment adviser will run a defensive portfolio by managing the portfolio with a duration less than the benchmark. The investment adviser then considers sector exposures. Sector exposure decisions are made on both a top-down and bottom-up basis. A bottom-up issue selection process is the major determinant of sector exposure, as the availability of attractive securities in each sector determines their underweighting or overweighting in the Fund subject to sector exposure constraints. However, for the more generic holdings in the Fund, such as agency notes and pass-through mortgage backed securities, top-down considerations will drive the sector allocation process on the basis of overall measurements of sector value such as yield spreads or price levels.
Once the investment adviser has determined an overall market strategy, the investment adviser selects the most attractive fixed income securities for the Fund. The portfolio managers screen hundreds of securities to determine how each will perform in various interest rate environments. The portfolio managers construct these scenarios by considering the outlook for interest rates, fundamental credit analysis and option-adjusted spread analysis. The portfolio managers compare these investment opportunities and assemble the Fund’s portfolio from the best available values. The investment adviser constantly monitors the expected returns of the securities in the Fund versus those available in the market and of other securities the investment adviser is considering for purchase. The investment adviser’s strategy is to replace securities that it feels are
|
approaching fair market value with those that, according to its analysis, are significantly undervalued. As a result of this strategy, the Fund’s portfolio turnover rate will vary from year to year depending on market conditions. | |
Investment Adviser
|
|
Scout Investments
|
Carillon Tower
|
Investment Subadviser
|
|
None.
|
Scout Investments
|
Portfolio Managers
|
|
No portfolio manager is solely responsible for making recommendations for portfolio purchases and sales. Instead, all portfolio managers work together to develop investment strategies with respect to the Fund’s portfolio structure and issue selection. Portfolio strategy is reviewed weekly by all the portfolio managers. A staff of research analysts, traders and other investment professionals supports the portfolio managers.
Mark M. Egan, CFA, is the lead portfolio manager of the Fixed Income Funds. Thomas M. Fink, CFA; Todd C. Thompson, CFA; Stephen T. Vincent, CFA; and Clark W. Holland, CFA, are co-portfolio managers of the Fixed Income Funds. Mr. Egan joined Scout Investments on November 30, 2010. He oversees the entire fixed income division of Scout Investments, Reams Asset Management, and retains oversight over all investment decisions. Mr. Egan was a portfolio manager of Reams Asset Management Company, LLC (“Reams”) from April 1994 until November 2010 and was a portfolio manager of Reams Asset Management Company, Inc. from June 1990 until March 1994. Mr. Egan was a portfolio manager of National Investment Services until May 1990. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Fink joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from December 2000 until November 2010. Mr. Fink was previously a portfolio manager at Brandes Fixed Income Partners from 1999 until 2000, Hilltop Capital Management from 1997 until 1999, Centre Investment Services from 1992 until 1997 and First Wisconsin Asset Management from 1986 until 1992. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Thompson joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from July 2001 until November 2010. Mr. Thompson was a portfolio manager at Conseco Capital Management from 1999 until June 2001 and was a portfolio manager at the
|
Same.
|
Ohio Public Employees Retirement System from 1994 until 1999. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Vincent joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from October 2005 until November 2010. Mr. Vincent was a senior fixed income analyst at Reams from September 1994 to October 2005. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Holland joined Scout Investments on November 30, 2010 and became a portfolio manager in October 2014. He was a portfolio analyst at Scout Investments from December 2010 until October 2014 and at Reams from February 2002 until November 2010. Prior to joining the firm, Mr. Holland was a portfolio manager and investment product specialist at Wells Fargo Investment Management Group. He is a CFA® charterholder and a member of the CFA Institute.
|
Credit Risks
|
The Fund could lose money if the issuer of a fixed income security is unable or unwilling, or is perceived as unable or unwilling (whether by market participants, ratings agencies, pricing services or otherwise) to meet its financial obligations or goes bankrupt. Securities are subject to varying degrees of credit risk, which are often reflected in their credit ratings. The downgrade of the credit rating of a security held by the Fund may decrease its value. Credit risk usually applies to most fixed income securities. U.S. government securities, especially those that are not backed by the full faith and credit of the U.S. Treasury, such as securities supported only by the credit of the issuing governmental agency or government-sponsored enterprise, carry at least some risk of nonpayment, and the maximum potential liability of the issuers of such securities may greatly exceed their current resources. There is no assurance that the U.S. government would provide financial support to the issuing entity if not obligated to do so by law. Further, any government guarantees on U.S. government securities that the Fund owns extend only to the timely payment of interest and the repayment of principal on the securities themselves and do not extend to the market value of the securities themselves or to shares of the Fund. |
Credit Ratings Risks
|
Ratings by nationally recognized rating agencies represent the agencies’ opinion of the credit quality of an issuer. However, these ratings are not absolute standards of quality and do not guarantee the creditworthiness of an issuer. Ratings do not necessarily address market risk and may not be revised quickly enough to reflect changes in an issuer’s financial condition.
|
Derivatives Risks
|
Derivatives, such as options, futures contracts, currency forwards or swap agreements, may involve greater risks than if the Fund had invested in the reference obligation
|
directly. Derivatives are subject to general market risks, liquidity risks, interest rate risk, credit risks and management risks. Derivatives also present the risk that the other party to the transaction will fail to perform. Derivatives also involve an increased risk of mispricing or improper valuation of the derivative instrument, and imperfect correlation between the value of the derivative and the underlying instrument so that the Fund may not realize the intended benefits. When used for hedging, changes in the value of the derivative may also not correlate perfectly with the underlying asset, rate or index. Derivatives risk may be more significant when derivatives are used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain exposure to certain instruments or markets, rather than solely to hedge the risk of a position held by the Fund. Derivatives can cause the Fund to participate in losses (as well as gains) in an amount that significantly exceeds the Fund’s initial investment. Also, suitable derivative transactions may not be available in all circumstances and there can be no assurance that the Fund will engage in these transactions to reduce exposure to other risks when that would be beneficial. The regulation of cleared and uncleared swap agreements, as well as other derivatives, is a rapidly changing area of law and is subject to modification by government and judicial action. It is not possible to predict fully the effects of current or future regulation. Changes in government regulation of various types of derivatives instruments may make derivatives more costly or limit the availability of derivatives, which may limit or prevent the Fund from using certain types of derivative instruments as part of its investment strategy; may affect the character, timing and amount of the Fund’s taxable income or gains; or may otherwise adversely affect the value or performance of derivatives. Compared to other types of investments, derivatives may also be less tax efficient. The Fund’s use of derivatives may be limited by the requirements for taxation of the Fund as a regulated investment company. | |
Fixed Income Security Risks
|
Fixed income market risk is the risk that the prices of, and the income generated by, fixed income securities held by the Fund may decline significantly and/or rapidly in response to adverse issuer, political, regulatory, general economic and market conditions, or other developments, such as regional or global economic instability (including terrorism and related geopolitical risks), interest rate fluctuations, and those events directly involving the issuers that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment. These events may lead to periods of volatility, which may be exacerbated by changes in bond market size and structure. In addition, adverse market events may lead to increased redemptions, which could cause the Fund to experience a loss when selling securities to meet redemption requests by shareholders. The risk of loss increases if the redemption requests are unusually large or frequent. |
High Yield Security Risks
|
Investments in securities rated below investment grade, or “junk bonds,” generally involve significantly greater risks of loss of your money than an investment in investment grade bonds. Compared with issuers of investment grade bonds, junk bonds are more likely to encounter financial difficulties and to be materially affected by these difficulties. Rising interest rates may compound these difficulties and reduce an issuer’s ability to repay principal and interest obligations. Issuers of lower-rated securities also have a greater risk of default or bankruptcy. Additionally, due to the greater number of considerations involved in the selection of the Fund’s securities, the achievement of the Fund’s objective depends more on the skills of the portfolio manager than investing only in higher-rated securities. Therefore, your investment may experience greater volatility in price and yield. High-yield securities may be less liquid than higher quality investments. A security whose credit rating has been lowered may be particularly difficult to sell. |
Income Risks
|
The Fund’s income could decline due to falling market interest rates. In a falling interest rate environment, the Fund may be required to invest its assets in lower-yielding securities. Because interest rates vary, it is impossible to predict the income or yield of the Fund for any particular period.
|
Interest Rate Risks |
Investments in investment grade and non-investment grade fixed income securities are subject to interest rate risk. The value of the Fund’s fixed income investments typically will fall when interest rates rise. The Fund may be particularly sensitive to changes in interest rates if it invests in debt securities with intermediate and long terms to maturity. Debt securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. For example, if a bond has a duration of five years, a 1% increase in interest rates could be expected to result in a 5% decrease in the value of the bond. The Federal Reserve raised the federal funds rate in December 2016, March 2017 and June 2017 and has signaled additional increases in 2017. Interest rates may rise significantly and/or rapidly, potentially resulting in substantial losses to the Fund. During periods of very low or negative interest rates, the Fund may be unable to maintain positive returns. Certain European countries and Japan have recently experienced negative interest rates on deposits and debt securities have traded at negative yields. Negative interest rates may become more prevalent among non-U.S. issuers, and potentially within the United States. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Fund is exposed to such interest rates. |
International Investing Risks
|
Investments in foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s return and NAV may be affected by fluctuations in currency exchange rates or political or economic conditions and regulatory requirements in a particular country. Foreign markets, as well as foreign economies and political systems, may be less stable than U.S. markets, and changes in the exchange rates of foreign currencies can affect the value of the Fund’s foreign assets. Foreign laws and accounting standards typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Custodial and/or settlement systems in foreign markets may not be fully developed and the laws of certain countries may limit the ability to recover assets if a foreign bank or depository or their agents goes bankrupt. Over a given period of time, foreign securities may underperform U.S. securities—sometimes for years. The Fund could also underperform if it invests in countries or regions whose economic performance falls short. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change, which may lead to default or expropriation, and inadequate government oversight and accounting. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. The effect of recent, worldwide economic instability on specific foreign markets or issuers may be difficult to predict or evaluate. Some national economies continue to show profound instability, which may in turn affect their international trading and financial partners or other members of their currency bloc. Foreign security risk may also apply to ADRs, GDRs and EDRs. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than or in addition to investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return. |
Issuer Risks
|
The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
|
Leverage Risks Associated with Financial Instruments
|
Certain transactions of the Fund may give rise to a form of leverage. Such transactions may include, among others, the use of buybacks, dollar rolls, and when-issued, delayed delivery or forward commitment transactions. Certain derivatives that the Fund may use may create leverage. Derivatives that involve leverage can result in losses to the Fund that exceed the amount originally invested in the derivatives. Certain types of leveraging transactions, such as short sales that are not “against the box,” could be subject to unlimited losses in cases where the Fund, for any reason, is unable to close out the transaction. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leveraging may cause the Fund to be more volatile than if the Fund had not been leveraged. This is because leveraging tends to exaggerate the effect of any increase or decrease in the value of the Fund’s portfolio securities. |
Liquidity Risks
|
Liquidity risk is the possibility that the Fund might be unable to sell a security promptly and at an acceptable price, which could have the effect of decreasing the overall level of
|
the Fund’s liquidity. Market developments may cause the Fund’s investments to become less liquid and subject to erratic price movements. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund could lose money if it cannot sell a security at the time and price that would be most beneficial to the Fund. | |
Management Risks
|
The Fund is subject to management risk as an actively managed investment portfolio. The investment adviser and the portfolio managers will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. If the investment adviser is not able to select better-performing equity and fixed income securities, the Fund may lose money.
|
Maturity Risks
|
The Fund will invest in fixed income securities of varying maturities. A fixed income security’s maturity is one indication of the interest rate exposure of a security. Generally, the longer a fixed income security’s maturity, the greater the risk. Conversely, the shorter a fixed income security’s maturity, the lower the risk.
|
Mortgage- and Asset-Backed Securities Risks
|
Mortgage- and asset-backed security risk, which is possible in an unstable or depressed housing market, arises from the potential for mortgage failure or premature repayment of principal, or a delay in the repayment of principal. The reduced value of the Fund’s securities and the potential loss of principal as a result of a mortgagee’s failure to repay would have a negative impact on the Fund. Premature repayment of principal would make
|
it difficult for the Fund to reinvest the prepaid principal at a time when interest rates on new mortgages are declining, thereby reducing the Fund’s income. Conversely, a delay in the repayment of principal could lengthen the expected maturity of the securities, thereby increasing the potential for loss when prevailing interest rates rise, which could cause the values of the securities to fall sharply. | |
Portfolio Turnover Risks
|
The Fund may engage in more active and frequent trading of portfolio securities to a greater extent than certain other mutual funds with similar investment objectives. The Fund’s turnover rate may vary greatly from year to year or during periods within a year. A high rate of portfolio turnover may lead to greater transaction costs, result in adverse tax consequences to investors (from increased recognition of net capital gains, which are taxable to shareholders when distributed to them) and adversely affect performance.
|
Redemption Risks |
The Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Fund, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed income securities, may result in decreased liquidity and increased volatility in the fixed income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Fund’s performance. |
Valuation Risks
|
Securities held by the Fund may be priced by an independent pricing service and may also be priced using dealer quotes or fair valuation methodologies in accordance with valuation procedures adopted by the Fund’s Board. The prices provided by the independent pricing service or dealers or the fair valuations may be different from the prices used by other mutual funds or from the prices at which securities are actually bought and sold.
|
Non-Fundamental Investment Policies
|
||
Policy
|
Acquired Fund
|
Acquiring Fund
|
Scout Low Duration Bond Fund
|
Carillon Reams Low Duration Bond Fund
|
|
Investing in Illiquid Securities
|
The Fund will not invest in illiquid securities if, as a result of such investment, more than 15% of its net assets would be invested in illiquid securities, or such other amounts as may be permitted under the Investment Company Act of 1940, as amended (“1940 Act”).
|
The Fund may not invest more than 15% of its net assets in repurchase agreements maturing in more than seven days or in other illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions as to resale and including privately placed securities.
|
Investing in Other Investment Companies
|
The Fund will not purchase shares of other investment companies, except in compliance with the 1940 Act or pursuant to a plan of merger or consolidation.
|
The Fund may invest in securities issued by other investment companies as permitted by the 1940 Act, and the rules thereunder and any exemptive relief.
|
Borrowing Money
|
The Fund does not intend to borrow money in excess of 5% of its net assets, however, if borrowings do exceed 5%, the Fund will not purchase additional investment securities until outstanding borrowings represent less than 5% of the Fund’s assets.
|
None.
|
Investing for Control
|
The Fund will not invest in companies for the purpose of exercising control of management.
|
None.
|
Short Selling and Margin
|
The Fund will not purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin deposits in connection with futures contracts, options on futures contracts, or other derivative instruments shall not constitute purchasing securities on margin, or sell securities short, unless the Fund owns or has the right to obtain securities equivalent in kind and amount to the securities sold short or unless it covers such short sale as required by the current rules and positions of the SEC or its staff, and provided that transactions in options, futures contracts, options on futures contracts, or other derivative instruments are not deemed to constitute selling securities short.
|
None.
|
Investing in UMB
|
The Fund will not invest in securities issued by UMB Financial Corporation or affiliate banks of UMB Financial Corporation.
|
None.
|
Bank Borrowings
|
The Fund will not purchase securities when bank borrowings exceed 5% of its total assets.
|
None.
|
Futures and Options
|
The Fund will not engage in futures or options on futures transactions, except in accordance with Rule 4.5 under the CEA.
|
None.
|
Scout Low Duration Bond Fund – Calendar Year Total Returns
|
|||
[Bar chart to be inserted]
|
|||
1.43%
|
1.00%
|
0.56%
|
[ ]%
|
2013
|
2014
|
2015
|
2016
|
Best Quarter (% and quarter end date)
|
Worst Quarter (% and quarter end date)
|
||
[0.82% (September 30, 2013)]
|
[-0.67% (June 30, 2013)]
|
||
The calendar year-to-date total return as of [June 30, 2017] was [ ]%.
|
Scout Low Duration Bond Fund - Average Annual Total Returns (As of December 31, 2016)
|
||
One Year
|
Since Inception
|
|
Fund Inception Date: August 29, 2012
|
||
Return Before Taxes
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions and Sale of Fund Shares
|
[ ]%
|
[ ]%
|
Bloomberg Barclays 1-3 Year U.S. Government/Credit Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
Net Assets
(in millions)
|
Net Asset Value Per Share
|
Shares Outstanding
|
|
Scout Low Duration Bond Fund – Shares
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Reams Low Duration Bond Fund – Class I (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
PROPOSAL 5:
|
APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT MID CAP FUND INTO THE CARILLON SCOUT MID CAP FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST. |
·
|
The Carillon Scout Mid Cap Fund is newly organized and has no assets, operating history or performance information of its own as of the date of this Proxy Statement/Prospectus. The Carillon Scout Mid Cap Fund has been created as a shell series of Acquiring Trust solely for the purposes of acquiring the Scout Mid Cap Fund’s assets and continuing its business investment operations, and will not conduct any investment operations until after the Closing Date of the Reorganization. If shareholders of the Scout Mid Cap Fund approve the Fund’s Reorganization, the Carillon Scout Mid Cap Fund will assume and publish the operating history and performance record of the Scout Mid Cap Fund.
|
·
|
The Carillon Scout Mid Cap Fund and the Scout Mid Cap Fund have substantially similar investment objectives, policies, and strategies. Each Fund’s investment objective is to seek long-term growth of capital. Each Fund seeks to achieve its investment objective by investing primarily in common stocks of mid cap companies. Each Fund invests at least 80% of its net assets in mid cap equity securities. The equity securities in which each Fund may invest include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights and real estate investment trusts (“REITs”). For a detailed comparison of the Funds’ investment policies and strategies, see “Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers” below.
|
·
|
The Carillon Scout Mid Cap Fund and the Scout Mid Cap Fund have substantially similar risk profiles, although there are differences in how these are described. For a detailed comparison of each Fund’s risks, see “Comparison of Principal Risk Factors” below.
|
·
|
Scout Investments currently serves as the investment adviser for the Scout Mid Cap Fund. After the Reorganization, Carillon Tower will serve as the investment adviser for the Carillon Scout Mid Cap Fund and Scout Investments will serve as the subadviser for the Fund. As described above, Carillon Tower has entered into an agreement with UMB to purchase Scout Investments and the Reorganization is being proposed in connection with that acquisition. For a detailed description of Carillon Tower and Scout Investments, please see “Additional Information about the Funds - Service Providers” below.
|
·
|
Shareholders of the Scout Mid Cap Fund will receive Class I shares of the Carillon Scout Mid Cap Fund pursuant to the Reorganization. Shareholders will not pay any sales charges in connection with the Reorganization. Please see “Comparative Fee and Expense Tables,” “Additional Information about the Reorganizations” and “Additional Information about the Funds” below for more information.
|
·
|
The annual operating expense ratios for the Carillon Scout Mid Cap Fund’s Class I shares, for the fiscal year following the Reorganization, are not expected to exceed those of the Scout Mid Cap Fund for the fiscal year ended June 30, 2016. Scout Investments has entered into an agreement to waive all or a portion of its advisory fees and, if necessary, to assume certain other expenses through October 30, 2018 to the extent necessary so that “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees and non-routine expenses) do not exceed 1.40% of the Fund’s average daily net assets. Carillon Tower will enter into a similar agreement to limit the Carillon Scout Mid Cap Fund’s total annual operating expenses to 1.40% for Class I shares with a term lasting for at least two years from the Closing Date of the Reorganization. For a more detailed comparison of the fees and expenses of the Funds, please see “Comparative Fee and Expense Tables” and “Additional Information about the Funds” below. |
·
|
The Scout Mid Cap Fund pays Scout Investments an advisory fee at the annual rate of 0.80% on the first $1 billion of the Fund’s average daily net assets and 0.70% on the average daily net assets over $1 billion. The Carillon Scout Mid Cap Fund will pay Carillon Tower an advisory fee at the same rates. Carillon Tower will pay Scout Investments a subadvisory fee at the annual rate of 0.80% on the first $1 billion of the Fund’s average daily net assets and 0.70% on the average daily net assets over $1 billion.
|
·
|
Currently, the Acquired Funds pay Scout Investments and UMB Fund Services, Inc. (“UMBFS”) for administrative services and fund accounting services. Scout Investments receives the following fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing certain administrative services to the funds: 0.05% of the funds’ first $5 billion of aggregate average daily net assets; 0.04% of the funds’ next $1 billion of aggregate average daily net assets; 0.03% of the funds’ next $1 billion of aggregate average daily net assets; 0.02% of the funds’ next $1 billion of aggregate average daily net assets; and 0.01% of the funds’ aggregate average daily net assets in excess of $8 billion. UMBFS receives the following administration fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing administrative and fund accounting services to the funds: 0.04% of the funds’ aggregate average daily net assets up to $1.25 billion; 0.03% of the funds’ aggregate average daily net assets up to the next $1.25 billion; and 0.02% of the funds’ aggregate average daily net assets in excess of $2.5 billion. After the Reorganization, Carillon Tower will provide administrative services to the Acquiring Fund and will receive an administrative fee at the annual rate of 0.10% of average daily net assets of the Acquiring Fund’s Class I shares. Carillon Tower has also entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC (“USBFS”) to provide the Acquiring Fund certain financial reporting and tax services. The fees for sub-administration services are paid by Carillon Tower to USBFS. See “Additional Information about the Funds” below for more information about other service providers. |
·
|
UMB and Carillon Tower or their affiliates have agreed to bear the costs associated with the Reorganization equally. The Scout Mid Cap Fund and the Carillon Scout Mid Cap Fund will not bear any of the costs and expenses of the Reorganization.
|
Scout Mid Cap Fund
|
Pro forma Carillon Scout Mid Cap Fund
(assuming the Reorganization is
approved)
|
|
Shares
|
Class I
|
|
Maximum Sales Charge (Load) Imposed on Purchases
|
None
|
None
|
Maximum Deferred Sales Charge (Load)
|
None
|
None
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
None
|
Redemption Fee
|
None
|
None
|
Exchange Fee
|
None
|
None
|
Scout Mid Cap Fund
|
Pro forma Carillon Scout Mid Cap Fund
(assuming the Reorganization is approved)
|
|
Shares
|
Class I
|
|
Management Fee
|
0.77%
|
0.77%
|
Distribution and/or Service Fees (12b-1 fees)
|
None
|
None
|
Other Expenses
|
0.27%
|
0.27% |
Total Annual Fund Operating Expenses
|
1.04%
|
1.04% |
·
|
You invest $10,000 in the Fund for the time periods indicated;
|
·
|
Your investment has a 5% return each year; and
|
·
|
The Fund’s operating expenses remain the same.
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
Scout Mid Cap Fund – Shares
|
$106
|
$331
|
$574
|
$1,271
|
Pro forma Carillon Scout Mid Cap Fund – Class I (assuming the Reorganization is approved)
|
$106
|
$331
|
$574
|
$1,271
|
Acquired Fund
|
Acquiring Fund
|
Scout Mid Cap Fund
|
Carillon Scout Mid Cap Fund
|
Investment Objective
|
|
The investment objective of the Scout Mid Cap Fund is long-term growth of capital.
The Scout Mid Cap Fund’s investment objective is a non-fundamental policy that may be changed by its Board without shareholder approval.
|
The Carillon Scout Mid Cap Fund will have the same investment objective.
The Carillon Scout Mid Cap Fund’s investment objective also will be a non-fundamental policy that may be changed by its Board without shareholder approval.
|
Principal Investment Strategies
|
|
The Fund pursues its objective by investing primarily in common stocks of mid cap companies. Under normal circumstances, at least 80% of the Fund’s net assets will be invested in mid cap equity securities. Any change in this 80% policy approved by the fund’s Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. Mid cap equity securities are securities issued by companies that fall within the market capitalization range of the Russell Midcap® Index (the “Index”) at the time of purchase. As of September 30, 2016, the market capitalization range for the Index was approximately $679.40 million to $43.54 billion. The Fund maintains a
|
The Fund pursues its objective by investing primarily in common stocks of mid cap companies. Under normal circumstances, at least 80% of the Fund’s net assets will be invested in mid cap equity securities. Any change in this 80% policy approved by the fund’s Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. The Fund’s portfolio managers consider mid-capitalization companies to be those companies that, at the time of initial purchase, have market capitalizations greater than $1 billion and equal to or less than the largest company in the Russell Midcap® Growth Index during the most recent 12-month period (approximately $52.4 billion during the 12-month period ended December 31, 2016).
|
portfolio of investments diversified across companies and economic sectors.
The equity securities in which the Fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights, and real estate investment trusts (“REITs”).
Scout Investments, Inc. normally invests the Fund’s assets in a diversified portfolio of equity securities. The investment adviser seeks to invest in the securities of companies that are expected to benefit from macroeconomic or company-specific factors, and that are attractively priced relative to their fundamentals. In making investment decisions, the investment adviser may consider fundamental factors such as cash flow, financial strength, profitability, statistical valuation measures, potential or actual catalysts that could move the share price, accounting practices, management quality, risk factors such as litigation, the estimated fair value of the company, general economic and industry conditions, and additional information as appropriate.
The Fund will invest primarily in securities of U.S. companies, but may invest up to 20% of the portfolio in foreign companies, including those located in developing countries or emerging markets; American Depositary Receipts (“ADRs”) or Global Depositary Receipts (“GDRs”).
|
The Fund maintains a portfolio of investments diversified across companies and economic sectors.
The equity securities in which the Fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights, and real estate investment trusts (“REITs”).
The Fund normally invests in a diversified portfolio of equity securities. The portfolio management team seeks to invest in the securities of companies that are expected to benefit from macroeconomic or company-specific factors, and that are attractively priced relative to their fundamentals. In making investment decisions, the portfolio management team may consider fundamental factors such as cash flow, financial strength, profitability, statistical valuation measures, potential or actual catalysts that could move the share price, accounting practices, management quality, risk factors such as litigation, the estimated fair value of the company, general economic and industry conditions, and additional information as appropriate.
The Fund will invest primarily in securities of U.S. companies, but may invest up to 20% of the portfolio in foreign companies, including those located in developing countries or emerging markets; American Depositary Receipts (“ADRs”) or Global Depositary Receipts (“GDRs”).
|
Temporary Defensive Strategy
|
|
The Fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the Fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the Fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.
|
The Fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the Fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the Fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.
|
Investment Adviser
|
|
Scout Investments
|
Carillon Tower
|
Investment Subadviser
|
|
None.
|
Scout Investments
|
Portfolio Managers
|
|
G. Patrick Dunkerley, CFA, is the lead portfolio manager of the Scout Mid Cap Fund, and has served as the lead portfolio manager since the Fund’s inception on October 31, 2006. He joined Scout Investments in 2006, following previous employment at Victory Capital Management from 2001-2006, where he served as an assistant portfolio manager, and subsequently as chief investment officer of mid cap core equity and as the lead portfolio manager of a mid cap mutual fund and mid cap separate accounts. Mr. Dunkerley earned his Bachelor of Science in Business Administration from the University of Missouri and his MBA from Golden Gate University. Mr. Dunkerley is a CFA® charterholder a member of the CFA Society Kansas City as well as the CFA Institute.
Derek M. Smashey, CFA, has served as a co-portfolio manager since the Scout Mid Cap Fund’s inception on October 31, 2006. He joined Scout Investments in 2006, following previous employment at Nations Media Partners, Inc. from 2003-2006, where he served as an associate director, and Sprint Corporation from 2000-2003 where he served as Internal Consultant. Mr. Smashey earned his Bachelor of Science in Finance from Northwest Missouri State University and his MBA from the University of Kansas. Mr. Smashey is a CFA® charterholder and a member of the CFA Society Kansas City as well as the CFA Institute.
John A. Indellicate II, CFA, has served as a co-portfolio manager of the Scout Mid Cap Fund since June 2011. He joined Scout Investments in 2004 and has since served as a quantitative analyst and a securities analyst. He earned his Bachelor of Arts in Economics from Harvard University. Mr. Indellicate is a CFA® charterholder and a member of the CFA Society Kansas City as well as the CFA Institute.
Jason J. Votruba, CFA, is a co-portfolio manager of the Scout Mid Cap Fund. Mr. Votruba has served as a portfolio manager of the Fund since October 2013. Previously, Mr. Votruba served as a portfolio manager of the Scout Small Cap Fund since he joined Scout Investments in 2002. Prior to joining Scout Investments, Mr. Votruba provided investment advice at George K. Baum & Company from 2000-2002 and Commerce Bank from 1998-2000. Mr. Votruba earned his Bachelor of Science in Business Administration from Kansas State University. He is a CFA® charterholder and a member of the CFA Society Kansas City as well as the CFA Institute.
|
Same.
|
Equity Securities Risks
|
The Fund’s equity securities investments are subject to stock market risk. Such investments may also expose the Fund to additional risks:
Common Stocks. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are unrelated to the company, such as changes in interest rates, exchange rates or industry regulation. Companies that pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock.
Preferred Stocks. Preferred securities are subject to issuer-specific and stock market risks; however, preferred securities may be less liquid than common stocks and offer more limited participation in the growth of an issuer. If interest rates rise, the dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred shareholders may have only certain limited rights if distributions are not paid for a stated period, but generally have no legal recourse against the issuer and may suffer a loss of value if distributions are not paid. Preferred stocks may have mandatory sinking fund provisions, as well as provisions for their call or redemption prior to maturity which can have a negative effect on their prices when interest rates decline. Because the rights of preferred stock on distribution of a corporation’s assets in the event of its liquidation are generally subordinated to the rights associated with a corporation’s debt securities, in the event of an issuer’s bankruptcy, there is substantial risk that there will be nothing left to pay preferred stockholders after payments, if any, to bondholders have been made. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt securities to actual or perceived changes in the company’s financial condition or prospects.
Convertible Securities. The investment value of a convertible security (“convertible”) is based on its yield and tends to decline as interest rates increase. The conversion value of a convertible is the market value that would be received if the convertible were converted to its underlying common stock. Since it derives a portion of its value from the common stock into which it may be converted, a convertible is also subject to the same types of market and issuer-specific risks that apply to the underlying common stock. A convertible may be subject to redemption at the option of the issuer at a price established in the convertible’s governing instrument, which may be less than the current market price of the security. Convertibles typically are “junior” securities, which means an issuer may pay interest on its non-convertible debt before it can make payments on its convertibles. In the event of a liquidation, holders of convertibles may be paid before a company’s common stockholders but after holders of a company’s senior debt obligations. Depositary Receipts. The Fund may invest in securities issued by foreign companies through ADRs, GDRs and EDRs. These securities are subject to many of the risks inherent in investing in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt. |
Rights and Warrants. Investments in rights and warrants may be more speculative than certain other types of investments because rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer. In addition, the value of a right or a warrant does not necessarily change with the value of the underlying securities and a right or a warrant ceases to have value if it is not exercised prior to its expiration date. | |
Growth Investing Risks
|
Growth companies are expected to increase their earnings at a certain rate. When these expectations are not met, investors may punish the prices of stocks excessively, even if earnings showed an absolute increase. Growth company stocks also typically lack the dividend yield that can cushion stock prices in market downturns.
|
International Investing Risks
|
Investments in foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s return and NAV may be affected by fluctuations in currency exchange rates or political or economic conditions and regulatory requirements in a particular country. Foreign markets, as well as foreign economies and political systems, may be less stable than U.S. markets, and changes in the exchange rates of foreign currencies can affect the value of the Fund’s foreign assets. Foreign laws and accounting standards typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Custodial and/or settlement systems in foreign markets may not be fully developed and the laws of certain countries may limit the ability to recover assets if a foreign bank or depository or their agents goes bankrupt. Over a given period of time, foreign securities may underperform U.S. securities—sometimes for years. The Fund could also underperform if it invests in countries or regions whose economic performance falls short. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change, which may lead to default or expropriation, and inadequate government oversight and accounting. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. The effect of recent, worldwide economic instability on specific foreign markets or issuers may be difficult to predict or evaluate. Some national economies continue to show profound instability, which may in turn affect their international trading and financial partners or other members of their currency bloc. Foreign security risk may also apply to ADRs, GDRs and EDRs. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than or in addition to investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return. |
Management Risks
|
The Fund is subject to management risk as an actively managed investment portfolio. The investment adviser and the portfolio managers will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. If the investment adviser is not able to select better-performing equity and fixed income securities, the Fund may lose money.
|
Market Risks
|
Markets may at times be volatile and the value of the Fund’s stock holdings may decline in price, sometimes significantly and/or rapidly, because of changes in prices of its holdings or a broad stock market decline. The value of a security may decline due to adverse issuer-specific
|
conditions or general market conditions which are not specifically related to a particular company, such as real or perceived adverse political, regulatory, market, economic or other developments that may cause broad changes in market value, changes in the general outlook for corporate earnings, changes in interest or currency rates, public perceptions concerning these developments or adverse investment sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Terrorism and related geopolitical risks have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. In addition, markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in stock prices could be a sustained trend or a drastic movement. The stock markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations. The results of the recent U.S. presidential election may result in significant changes in certain policies. These changes may result in lower corporate taxes, higher levels of public debt, higher interest rates, more restrictions on international trade, and less stringent prudential regulation of certain players in the financial markets. | |
Mid Cap Company Risks
|
Investments in mid-cap companies generally involve greater risks than investing in large-capitalization companies. Mid-cap companies often have narrower markets and limited managerial and financial resources compared to larger, more established companies. The performance of mid-cap companies can be more volatile, and their stocks less liquid, compared to larger, more established companies, which could increase the volatility of the Fund’s portfolio and performance. Shareholders of the Fund that invests in mid-cap companies should expect that the value of the Fund’s shares will be more volatile than the Fund that invests exclusively in large-cap companies. Generally, the smaller the company size, the greater these risks.
|
Portfolio Turnover Risks
|
The Fund may engage in more active and frequent trading of portfolio securities to a greater extent than certain other mutual funds with similar investment objectives. The Fund’s turnover rate may vary greatly from year to year or during periods within a year. A high rate of portfolio turnover may lead to greater transaction costs, result in adverse tax consequences to investors (from increased recognition of net capital gains, which are taxable to shareholders when distributed to them) and adversely affect performance.
|
REIT Risks
|
The Fund may invest in REITs. The performance of equity REITs may be affected by any changes in the value of the underlying properties owned by the trusts. A decline in rental income may occur because of extended vacancies, the failure to collect rents, increased competition from other properties or poor management. A REIT’s performance also depends on the company’s ability to finance property purchases and renovations and manage its cash flows. A mortgage REIT specializes in lending money to developers and owners of properties and passes any interest income earned to its shareholders. REITs may be affected by the quality of any credit extended, and changes in interest rates, including spreads between long-term and short-term interest rates. By investing in REITs indirectly through the Fund, a shareholder will bear not only his or her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs. |
Small Cap
Company Risks |
Investments in small-cap companies generally involve greater risks than investing in large-capitalization companies. Companies with smaller market capitalizations generally have lower volume of shares traded daily, less liquid stock and more volatile stock prices. Companies with smaller market capitalizations also tend to have a limited product or service base and limited access to capital. Newer companies with unproven business strategies also tend to be smaller companies. The above factors increase risks and make these companies more likely to fail than companies with larger market capitalizations, and could increase the volatility of the Fund’s portfolio and performance. Shareholders of the Fund that invests in small-cap companies should expect that the value of the Fund’s shares will be more volatile than the Fund that invests exclusively in mid-cap or large-cap companies. Generally, the smaller the company size, the greater these risks. |
Value Investing Risks
|
Investments in value stocks are subject to the risk that their true worth may not be fully realized by the market. This may result in the value stocks’ prices remaining undervalued for extended periods of time. The Fund’s performance also may be affected adversely if value stocks remain unpopular with or lose favor among investors.
|
Non-Fundamental Investment Policies
|
||
Policy
|
Acquired Fund
|
Acquiring Fund
|
Scout Mid Cap Fund
|
Carillon Scout Mid Cap Fund
|
|
Investing in Illiquid Securities
|
The Fund may invest up to 15% of its net assets in securities that are considered to be illiquid.
|
The Fund may not invest more than 15% of its net assets in repurchase agreements maturing in more than seven days or in other illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions as to resale and including privately placed securities.
|
Investing in Other Investment Companies
|
The Fund is authorized to purchase shares of other investment companies, such as mutual funds (including money market funds) or ETFs, subject to certain percentage limits set forth in the 1940 Act.
|
The Fund may invest in securities issued by other investment companies as permitted by the 1940 Act, and the rules thereunder and any exemptive relief.
|
Borrowing Money
|
The Fund does not intend to borrow money in excess of 5% of its net assets, however, if borrowings do exceed 5%, the Fund will not
|
None.
|
purchase additional investment securities until outstanding borrowings represent less than 5% of the Fund’s assets. | ||
Investing for Control
|
The Fund will not invest in companies for the purpose of exercising control of management.
|
None.
|
Short Selling and Margin
|
The Fund will not purchase securities on margin, or sell securities short.
|
None.
|
Scout Mid Cap Fund – Calendar Year Total Returns
|
|||||||||
[Bar chart to be inserted]
|
|||||||||
21.94%
|
-35.10%
|
47.16%
|
27.89%
|
0.32%
|
9.89%
|
37.68%
|
4.09%
|
1.41%
|
[ ]%
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
Best Quarter (% and quarter end date)
|
Worst Quarter (% and quarter end date)
|
||||||||
[23.59% (June 30, 2009)]
|
[-22.07% (September 30, 2008)]
|
||||||||
The calendar year-to-date total return as of [June 30, 2017] was [ ]%.
|
Scout Mid Cap Fund - Average Annual Total Returns (As of December 31, 2016)
|
|||
One Year
|
Five Years
|
Ten Years
|
|
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions and Sale of Fund Shares
|
[ ]%
|
[ ]%
|
[ ]%
|
Russell Midcap® Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Net Assets
(in millions)
|
Net Asset Value Per Share
|
Shares Outstanding
|
|
Scout Mid Cap Fund
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Scout Mid Cap Fund – Class I (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
PROPOSAL 6:
|
APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT SMALL CAP FUND INTO THE CARILLON SCOUT SMALL CAP FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST. |
·
|
The Carillon Scout Small Cap Fund is newly organized and has no assets, operating history or performance information of its own as of the date of this Proxy Statement/Prospectus. The Carillon Scout Small Cap Fund has been created as a shell series of Acquiring Trust solely for the purposes of acquiring the Scout Small Cap Fund’s assets and continuing its business investment operations, and will not conduct any investment operations until after the Closing Date of the Reorganization. If shareholders of the Scout Small Cap Fund approve the Fund’s Reorganization, the Carillon Scout Small Cap Fund will assume and publish the operating history and performance record of the Scout Small Cap Fund.
|
·
|
The Carillon Scout Small Cap Fund and the Scout Small Cap Fund have substantially similar investment objectives, policies, and strategies. Each Fund’s investment objective is to seek long-term growth of capital. Each Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in equity securities (mostly common stocks) of small cap companies located anywhere in the United States. The equity securities in which each Fund may invest include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights and real estate investment trusts (“REITs”). For a detailed comparison of the Funds’ investment policies and strategies, see “Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers” below.
|
·
|
The Carillon Scout Small Cap Fund and the Scout Small Cap Fund have substantially similar risk profiles, although there are differences in how these are described. For a detailed comparison of each Fund’s risks, see “Comparison of Principal Risk Factors” below.
|
·
|
Scout Investments currently serves as the investment adviser for the Scout Small Cap Fund. After the Reorganization, Carillon Tower will serve as the investment adviser for the Carillon Scout Small Cap Fund and Scout Investments will serve as the subadviser for the Fund. As described above, Carillon Tower has entered into an agreement with UMB to purchase Scout Investments and the Reorganization is being proposed in connection with that acquisition. For a detailed description of Carillon Tower and Scout Investments, please see “Additional Information about the Funds - Service Providers” below.
|
·
|
Shareholders of the Scout Small Cap Fund will receive Class I shares of the Carillon Scout Small Cap Fund pursuant to the Reorganization. Shareholders will not pay any sales charges in connection with the Reorganization. Please see “Comparative Fee and Expense Tables,” “Additional Information about the Reorganizations” and “Additional Information about the Funds” below for more information.
|
·
|
The annual operating expense ratios for the Carillon Scout Small Cap Fund’s Class I shares, for the fiscal year following the Reorganization, are not expected to exceed those of the Scout Small Cap Fund for the fiscal year ended June 30, 2016. For a more detailed comparison of the fees and expenses of the Funds, please see “Comparative Fee and Expense Tables” and “Additional Information about the Funds” below.
|
·
|
The Scout Small Cap Fund pays Scout Investments an advisory fee at the annual rate of 0.75% on the first $1 billion of the Fund’s average daily net assets and 0.65% on the average daily net assets over $1 billion. The Carillon Scout Small Cap Fund will pay Carillon Tower an advisory fee at the same rates. Carillon Tower will pay Scout Investments a subadvisory fee at the annual rate of 0.75% on the first $1 billion of the Fund’s average daily net assets and 0.65% on the average daily net assets over $1 billion.
|
·
|
Currently, the Acquired Funds pay Scout Investments and UMB Fund Services, Inc. (“UMBFS”) for administrative services and fund accounting services. Scout Investments receives the following fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing certain administrative services to the funds: 0.05% of the funds’ first $5 billion of aggregate average daily net assets; 0.04% of the funds’ next $1 billion of aggregate average daily net assets; 0.03% of the funds’ next $1 billion of aggregate average daily net assets; 0.02% of the funds’ next $1 billion of aggregate average daily net assets; and 0.01% of the funds’ aggregate average daily net assets in excess of $8 billion. UMBFS receives the following administration fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing administrative and fund accounting services to the funds: 0.04% of the funds’ aggregate average daily net assets up to $1.25 billion; 0.03% of the funds’ aggregate average daily net assets up to the next $1.25 billion; and 0.02% of the funds’ aggregate average daily net assets in excess of $2.5 billion. After the Reorganization, Carillon Tower will provide administrative services to the Acquiring Fund and will receive an administrative fee at the annual rate of 0.10% of average daily net assets of the Acquiring Fund’s Class I shares. Carillon Tower has also entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC (“USBFS”) to provide the Acquiring Fund certain financial reporting and tax services. The fees for sub-administration services are paid by Carillon Tower to USBFS. See “Additional Information about the Funds” below for more information about other service providers. |
·
|
UMB and Carillon Tower or their affiliates have agreed to bear the costs associated with the Reorganization equally. The Scout Small Cap Fund and the Carillon Scout Small Cap Fund will not bear any of the costs and expenses of the Reorganization.
|
Scout Small Cap Fund
|
Pro forma Carillon Scout Small Cap Fund (assuming the Reorganization is approved)
|
|
Shares
|
Class I
|
|
Maximum Sales Charge (Load) Imposed on Purchases
|
None
|
None
|
Maximum Deferred Sales Charge (Load)
|
None
|
None
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
None
|
Redemption Fee
|
None
|
None
|
Exchange Fee
|
None
|
None
|
Scout Small Cap Fund
|
Pro forma Carillon Scout Small Cap Fund (assuming the Reorganization is approved)
|
|
Shares
|
Class I
|
|
Management Fee
|
0.75%
|
0.75%
|
Distribution and/or Service Fees (12b-1 fees)
|
None
|
None
|
Other Expenses
|
0.38%
|
0.38% |
Total Annual Fund Operating Expenses
|
1.13%
|
1.13% |
·
|
You invest $10,000 in the Fund for the time periods indicated;
|
·
|
Your investment has a 5% return each year; and
|
·
|
The Fund’s operating expenses remain the same.
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
Scout Small Cap Fund – Shares
|
$115
|
$359
|
$622
|
$1,375
|
Pro forma Carillon Scout Small Cap Fund – Class I (assuming the Reorganization is approved)
|
$115 | $359 | $622 |
$1,375
|
Acquired Fund
|
Acquiring Fund
|
Scout Small Cap Fund
|
Carillon Scout Small Cap Fund
|
Investment Objective
|
|
The investment objective of the Scout Small Cap Fund is long-term growth of capital.
The Scout Small Cap Fund’s investment objective is a non-fundamental policy that may be changed by its Board without shareholder approval.
|
The Carillon Scout Small Cap Fund will have the same investment objective.
The Carillon Scout Small Cap Fund’s investment objective also will be a non-fundamental policy that may be changed by its Board without shareholder approval.
|
Principal Investment Strategies
|
|
The Fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets in equity securities (mostly common stocks) of small cap companies located anywhere in the United States. Any change in this 80% policy approved by the fund’s Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. Small cap companies are those that fall within the market capitalization range of the Russell 2000® Growth Index (the “Index”) at the time of purchase. As of September 30, 2016, the market capitalization range for the Index was approximately
|
The Fund pursues its objective by investing, under normal circumstances, at least 80% of its net assets in equity securities (mostly common stocks) of small cap companies located anywhere in the United States. Any change in this 80% policy approved by the fund’s Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. The Fund’s portfolio managers consider small-capitalization companies to be those companies that, at the time of initial purchase, have a market capitalization equal to or less than the largest company in the Russell 2000® Growth Index during the most recent 12-month period
|
$34.63 million to $6.29 billion.
The equity securities in which the Fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights, and real estate investment trusts (“REITs”). Although the investment adviser will search for investments across a large number of sectors, from time to time, based on economic conditions, the Fund may have significant positions in particular sectors.
Scout Investments normally invests the Fund’s assets in a diversified portfolio of equity securities that are selected based upon the investment adviser’s perception of their above-average potential for long-term growth of capital. The management team searches for companies that it believes are well positioned to benefit from the emergence of long-term catalysts for growth. The identified growth catalysts are long-term and secular (i.e., exhibiting relatively consistent expansion over a long period). Following the identification of well-positioned companies, the management team estimates the fair value of each candidate by assessing: margin structure, growth rate, debt level and other measures which it believes influence relative stock valuations. The overall company analysis includes the assessment of the liquidity of each security, sustainability of profit margins, barriers to entry, company management and free cash flow.
The Fund will invest primarily in securities of U.S. companies, but may invest up to 10% of the portfolio in foreign companies, including those located in developing countries or emerging markets; American Depositary Receipts (“ADRs”) or Global Depositary Receipts (“GDRs”).
|
(approximately $8.11 billion during the 12-month period ended December 31, 2016).
The equity securities in which the Fund invests include common stocks, depositary receipts, preferred stocks, convertible securities, warrants and other rights, and real estate investment trusts (“REITs”). Although the portfolio management team will search for investments across a large number of sectors, from time to time, based on economic conditions, the Fund may have significant positions in particular sectors.
The Fund normally invests in a diversified portfolio of equity securities that are selected based upon the portfolio management team’s perception of their above-average potential for long-term growth of capital. The management team searches for companies that it believes are well positioned to benefit from the emergence of long-term catalysts for growth. The identified growth catalysts are long-term and secular (i.e., exhibiting relatively consistent expansion over a long period). Following the identification of well-positioned companies, the management team estimates the fair value of each candidate by assessing: margin structure, growth rate, debt level and other measures which it believes influence relative stock valuations. The overall company analysis includes the assessment of the liquidity of each security, sustainability of profit margins, barriers to entry, company management and free cash flow.
The Fund will invest primarily in securities of U.S. companies, but may invest up to 10% of the portfolio in foreign companies, including those located in developing countries or emerging markets; American Depositary Receipts (“ADRs”) or Global Depositary Receipts (“GDRs”).
|
Temporary Defensive Strategy
|
|
The Fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the Fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the Fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.
|
The Fund intends to hold some cash, short-term debt obligations, government securities or other high-quality investments for reserves to cover redemptions and unanticipated expenses. There may be times, however, when the Fund attempts to respond to adverse market, economic, political or other conditions by investing a higher percentage of its assets in cash or in those types of money market investments for temporary defensive purposes. During those times, the Fund may not be able to pursue its investment objective or follow its principal investment strategies and, instead, will focus on preserving your investment.
|
Investment Adviser
|
|
Scout Investments
|
Carillon Tower
|
Investment Subadviser
|
|
None.
|
Scout Investments
|
Portfolio Managers
|
|
James R. McBride, CFA, is the lead portfolio manager of the Scout Small Cap Fund. Mr. McBride has served as the lead portfolio manager of the Fund since October 23, 2015. Mr. McBride previously was a co-portfolio manager of the Fund from May 2010 through October 23, 2015. Mr. McBride joined Scout Investments in 2009. Prior to joining Scout Investments, Mr. McBride co-founded and served as Vice President/portfolio manager of TrendStar Advisors, LLC from 2003-2009. Mr. McBride was also previously employed by Kornitzer Capital Management, Inc. as a Vice President and research analyst from 2000 until he left to co-found TrendStar Advisors, LLC in August 2003. Prior to joining Kornitzer Capital, Mr. McBride served in a number of increasingly responsible positions with Hewlett-Packard and subsidiary companies of Hewlett-Packard from 1989-2000. Mr. McBride earned a Bachelor of Science, with honors, in Mechanical Engineering from Wichita State University and an MBA in Finance from Indiana University. Mr. McBride is also a graduate of the General Electric Manufacturing Management Program for Manufacturing Engineers. He is a CFA® charterholder and a member of the CFA Society Kansas City as well as the CFA Institute.
Timothy L. Miller, CFA, is the co-portfolio manager of the Scout Small Cap Fund. Mr. Miller has served as a co-portfolio manager of the Fund since October 2013. Previously, Mr. Miller served as a senior investment analyst for Scout’s domestic equity strategies since he joined Scout Investments in September 2012. Prior to joining Scout Investments, Mr. Miller served as a senior investment analyst for American Century Investments from 2007-2012. Mr. Miller’s investment experience also includes employment at Insight Capital Research & Management, C.E. Unterberg Towbin, and Banc of America Securities. Mr. Miller earned his MBA in Finance from Indiana University and his Bachelor of Arts in Economics from UCLA. He is a CFA® charterholder and a member of the CFA Society Kansas City as well as the CFA Institute.
|
Same.
|
Equity Securities Risks
|
The Fund’s equity securities investments are subject to stock market risk. Such investments may also expose the Fund to additional risks:
Common Stocks. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are unrelated to the company, such as changes in interest rates, exchange rates or industry regulation. Companies that pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock.
Preferred Stocks. Preferred securities are subject to issuer-specific and stock market risks; however, preferred securities may be less liquid than common stocks and offer more limited participation in the growth of an issuer. If interest rates rise, the dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred shareholders may have only certain limited rights if distributions are not paid for a stated period, but generally have no legal recourse against the issuer and may suffer a loss of value if distributions are not paid. Preferred stocks may have mandatory sinking fund provisions, as well as provisions for their call or redemption prior to maturity which can have a negative effect on their prices when interest rates decline. Because the rights of preferred stock on distribution of a corporation’s assets in the event of its liquidation are generally subordinated to the rights associated with a corporation’s debt securities, in the event of an issuer’s bankruptcy, there is substantial risk that there will be nothing left to pay preferred stockholders after payments, if any, to bondholders have been made. For this reason, the value of preferred securities will usually react more strongly than bonds and other debt securities to actual or perceived changes in the company’s financial condition or prospects.
Convertible Securities. The investment value of a convertible security (“convertible”) is based on its yield and tends to decline as interest rates increase. The conversion value of a convertible is the market value that would be received if the convertible were converted to its underlying common stock. Since it derives a portion of its value from the common stock into which it may be converted, a convertible is also subject to the same types of market and issuer-specific risks that apply to the underlying common stock. A convertible may be subject to redemption at the option of the issuer at a price established in the convertible’s governing instrument, which may be less than the current market price of the security. Convertibles typically are “junior” securities, which means an issuer may pay interest on its non-convertible debt before it can make payments on its convertibles. In the event of a liquidation, holders of convertibles may be paid before a company’s common stockholders but after holders of a company’s senior debt obligations. Depositary Receipts. The Fund may invest in securities issued by foreign companies through ADRs, GDRs and EDRs. These securities are subject to many of the risks inherent in investing in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt. |
Rights and Warrants. Investments in rights and warrants may be more speculative than certain other types of investments because rights and warrants do not carry dividend or voting rights with respect to the underlying securities or any rights in the assets of the issuer. In addition, the value of a right or a warrant does not necessarily change with the value of the underlying securities and a right or a warrant ceases to have value if it is not exercised prior to its expiration date. | |
Focus Risks
|
For a Fund that normally hold a core portfolio of securities of fewer companies than other more diversified funds, the increase or decrease of the value of a single security may have a greater impact on the Fund’s NAV and total return when compared to other diversified funds.
|
Growth Investing Risks
|
Growth companies are expected to increase their earnings at a certain rate. When these expectations are not met, investors may punish the prices of stocks excessively, even if earnings showed an absolute increase. Growth company stocks also typically lack the dividend yield that can cushion stock prices in market downturns.
|
International Investing Risks
|
Investments in foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s return and NAV may be affected by fluctuations in currency exchange rates or political or economic conditions and regulatory requirements in a particular country. Foreign markets, as well as foreign economies and political systems, may be less stable than U.S. markets, and changes in the exchange rates of foreign currencies can affect the value of the Fund’s foreign assets. Foreign laws and accounting standards typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Custodial and/or settlement systems in foreign markets may not be fully developed and the laws of certain countries may limit the ability to recover assets if a foreign bank or depository or their agents goes bankrupt. Over a given period of time, foreign securities may underperform U.S. securities—sometimes for years. The Fund could also underperform if it invests in countries or regions whose economic performance falls short. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change, which may lead to default or expropriation, and inadequate government oversight and accounting. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. The effect of recent, worldwide economic instability on specific foreign markets or issuers may be difficult to predict or evaluate. Some national economies continue to show profound instability, which may in turn affect their international trading and financial partners or other members of their currency bloc. Foreign security risk may also apply to ADRs, GDRs and EDRs. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than or in addition to investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return. |
Management Risks
|
The Fund is subject to management risk as an actively managed investment portfolio. The investment adviser and the portfolio managers will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. If the investment adviser is not able to select better-performing equity and fixed income securities, the Fund may lose money.
|
Market Risks
|
Markets may at times be volatile and the value of the Fund’s stock holdings may decline in price, sometimes significantly and/or rapidly, because of changes in prices of its holdings or a broad stock market decline. The value of a security may decline due to adverse issuer-specific conditions or general market conditions which are not specifically related to a particular company, such as real or perceived adverse political, regulatory, market, economic or other developments that may cause broad changes in market value, changes in the general outlook for corporate earnings, changes in interest or currency rates, public perceptions concerning these developments or adverse investment sentiment generally. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Terrorism and related geopolitical risks have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally. In addition, markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in stock prices could be a sustained trend or a drastic movement. The stock markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations. The results of the recent U.S. presidential election may result in significant changes in certain policies. These changes may result in lower corporate taxes, higher levels of public debt, higher interest rates, more restrictions on international trade, and less stringent prudential regulation of certain players in the financial markets. |
Market Timing Risks
|
Because of specific securities the Fund may invest in, it could be subject to the risk of market timing activities by Fund shareholders. Some examples of these types of securities are high-yield, small-cap and foreign securities. Typically, foreign securities offer the most opportunity for these market timing activities. The Fund generally prices these foreign securities using their closing prices from the foreign markets in which they trade, typically prior to the Fund’s calculation of its NAV. These prices may be affected by events that occur after the close of a foreign market but before the Fund prices its shares. In such instances, the Fund may fair value foreign securities. However, some investors may engage in frequent short-term trading in the Fund to take advantage of any price differentials that may be reflected in the NAV of the Fund’s shares. There is no assurance that fair valuation of securities can reduce or eliminate market timing. There is no guarantee that the manager and transfer agent of the Funds can detect all market timing activities. |
Mid Cap Company Risks
|
Investments in mid-cap companies generally involve greater risks than investing in large-capitalization companies. Mid-cap companies often have narrower markets and limited managerial and financial resources compared to larger, more established companies. The performance of mid-cap companies can be more volatile, and their stocks less liquid, compared to larger, more established companies, which could increase the volatility of the Fund’s portfolio and performance. Shareholders of the Fund that invests in mid-cap companies should expect that the value of the Fund’s shares will be more volatile than the Fund that invests exclusively in large-cap companies. Generally, the smaller the company size, the greater these risks.
|
REIT Risks
|
The Fund may invest in REITs. The performance of equity REITs may be affected by any changes in the value of the underlying properties owned by the trusts. A decline in rental income may occur because of extended vacancies, the failure to collect rents, increased competition from other properties or poor management. A REIT’s performance also depends on the company’s ability to finance property purchases and renovations and manage its cash flows. A mortgage REIT specializes in lending money to developers and owners of properties and passes any interest income earned to its shareholders. REITs may be affected by the quality of any credit extended, and changes in interest rates, including spreads between long-term and short-term interest rates. By investing in REITs indirectly through the Fund, a shareholder will bear not only his or her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs. |
Sector Risks
|
Companies that are in similar businesses may be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of securities of all companies in a particular sector of the market to change. To the extent the Fund has substantial holdings within a particular sector, the risks associated with that sector increase.
|
Small Cap Company Risks
|
Investments in small-cap companies generally involve greater risks than investing in large-capitalization companies. Companies with smaller market capitalizations generally have lower volume of shares traded daily, less liquid stock and more volatile stock prices. Companies with smaller market capitalizations also tend to have a limited product or service base and limited access to capital. Newer companies with unproven business strategies also tend to be smaller companies. The above factors increase risks and make these companies more likely to fail than companies with larger market capitalizations, and could increase the volatility of the Fund's portfolio and performance. Shareholders of a Fund that invests in small-cap companies should expect that the value of the Fund’s shares will be more volatile than a fund that invests exclusively in mid-cap or large-cap companies. Generally, the smaller the company size, the greater these risks. |
Value Investing Risks
|
Investments in value stocks are subject to the risk that their true worth may not be fully realized by the market. This may result in the value stocks’ prices remaining undervalued for extended periods of time. The Fund’s performance also may be affected adversely if value stocks remain unpopular with or lose favor among investors.
|
Non-Fundamental Investment Policies
|
||
Policy
|
Acquired Fund
|
Acquiring Fund
|
Scout Small Cap Fund
|
Carillon Scout Small Cap Fund
|
|
Investing in Illiquid Securities
|
The Fund may invest up to 15% of its net assets in securities that are considered to be illiquid.
|
The Fund may not invest more than 15% of its net assets in repurchase agreements maturing in more than seven days or in other illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions as to resale and including privately placed securities.
|
Investing in Other Investment Companies
|
The Fund will not purchase shares of other investment companies except in the open market at ordinary broker’s commission or pursuant to a plan of merger or consolidation.
|
The Fund may invest in securities issued by other investment companies as permitted by the 1940 Act, and the rules thereunder and any exemptive relief.
|
Borrowing Money
|
The Fund does not intend to borrow money in excess of 5% of its net assets, however, if borrowings do exceed 5%, the Fund will not purchase additional investment securities until outstanding borrowings represent less than 5% of the Fund’s assets.
|
None.
|
Investing for Control
|
The Fund will not invest in companies for the purpose of exercising control of management.
|
None.
|
Dealings with Officers or Directors
|
The Fund will not enter into dealings with its officers or directors, its investment adviser or underwriter, or their officers or directors, or any organization in which such persons have a financial interest, except for transactions in the Fund’s own shares or other securities through brokerage practices which are considered normal and generally accepted under the circumstances existing at the time.
|
None.
|
Investing in Securities of Companies Owned by Officers or Directors
|
The Fund will not purchase or retain securities of any company in which any Fund officers or directors, or Fund investment adviser or any of its partners, officers, or directors beneficially own more than 1/2 of 1% of said company’s securities, if all such persons owning more than 1/2 of 1% of said company’s securities own in the aggregate more than 5% of the outstanding securities of such company.
|
None.
|
Unlimited Liability
|
The Fund will not invest in securities which are assessable or involve unlimited liability.
|
None.
|
Investing in UMB
|
The Fund will not invest in securities issued by UMB Financial Corporation or affiliate banks of UMB Financial Corporation.
|
None.
|
Short Selling and Margin
|
The Fund will not purchase securities on margin, or sell securities short.
|
None.
|
Indebtedness of Others
|
The Fund will not make itself or its assets liable for the indebtedness of others.
|
None.
|
Scout Small Cap Fund – Calendar Year Total Returns
|
|||||||||
[Bar chart to be inserted]
|
|||||||||
13.32%
|
-40.19%
|
20.95%
|
20.85%
|
-4.02%
|
18.35%
|
37.02%
|
5.44%
|
0.63%
|
[ ]%
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
Best Quarter (% and quarter end date)
|
Worst Quarter (% and quarter end date)
|
||||||||
[17.53% (December 31, 2010)]
|
[-24.70% (December 31, 2008)]
|
||||||||
The calendar year-to-date total return as of [June 30, 2017] was [ ]%.
|
Scout Small Cap Fund - Average Annual Total Returns (As of December 31, 2016)
|
|||
One Year
|
Five Years
|
Ten Years
|
|
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions and Sale of Fund Shares
|
[ ]%
|
[ ]%
|
[ ]%
|
Russell 2000 Growth Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Net Assets
(in millions)
|
Net Asset Value Per Share
|
Shares Outstanding
|
|
Scout Small Cap Fund
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Scout Small Cap Fund – Class I (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
PROPOSAL 7:
|
APPROVAL OF THE REORGANIZATION PLAN WITH RESPECT TO THE REORGANIZATION OF THE SCOUT UNCONSTRAINED BOND FUND INTO THE CARILLON REAMS UNCONSTRAINED BOND FUND, A NEWLY CREATED SERIES OF ACQUIRING TRUST. |
·
|
The Carillon Reams Unconstrained Bond Fund is newly organized and has no assets, operating history or performance information of its own as of the date of this Proxy Statement/Prospectus. The Carillon Reams Unconstrained Bond Fund has been created as a shell series of Acquiring Trust solely for the purposes of acquiring the Scout Unconstrained Bond Fund’s assets and continuing its business investment operations, and will not conduct any investment operations until after the Closing Date of the Reorganization. If shareholders of the Scout Unconstrained Bond Fund approve the Fund’s Reorganization, the Carillon Reams Unconstrained Bond Fund will assume and publish the operating history and performance record of the Scout Unconstrained Bond Fund.
|
·
|
The Carillon Reams Unconstrained Bond Fund and the Scout Unconstrained Bond Fund have substantially similar investment objectives, policies, and strategies. Each Fund’s investment objective is to maximize total return consistent with the preservation of capital. Each Fund seeks to achieve its investment objective by investing at least 80% of its net assets in fixed income instruments, which can be of varying maturity and include bonds, debt securities, mortgage- and asset-backed securities and other similar instruments issued by various U.S. and non-U.S. public and private-sector entities. Each Fund may invest without limitation in investment grade securities, non-investment grade securities (commonly known as “junk bonds”), and foreign securities. For a detailed comparison of the Funds’ investment policies and strategies, see “Comparison of Investment Objectives, Policies, Strategies, Advisers, and Portfolio Managers” below. |
·
|
The Carillon Reams Unconstrained Bond Fund and the Scout Unconstrained Bond Fund have substantially similar risk profiles, although there are differences in how these are described. For a detailed comparison of each Fund’s risks, see “Comparison of Principal Risk Factors” below.
|
·
|
Scout Investments currently serves as the investment adviser for the Scout Unconstrained Bond Fund. After the Reorganization, Carillon Tower will serve as the investment adviser for the Carillon Reams Unconstrained Bond Fund and Scout Investments will serve as the subadviser for the Fund. As described above, Carillon Tower has entered into an agreement with UMB to purchase Scout Investments and the Reorganization is being proposed in connection with that acquisition. For a detailed description of Carillon Tower and Scout Investments, please see “Additional Information about the Funds - Service Providers” below.
|
·
|
Institutional Class shareholders of the Scout Unconstrained Bond Fund will receive Class I shares of the Carillon Reams Unconstrained Bond Fund and Class Y shareholders of the Scout Unconstrained Bond Fund will receive Class Y shares of the Carillon Reams Unconstrained Bond Fund pursuant to the Reorganization. Shareholders will not pay any sales charges in connection with the Reorganization. Please see “Comparative Fee and Expense Tables,” “Additional Information about the Reorganizations” and “Additional Information about the Funds” below for more information.
|
·
|
The annual operating expense ratios for the Carillon Reams Unconstrained Bond Fund’s Class I and Class Y shares, for the fiscal year following the Reorganization, are not expected to exceed those of the Scout Unconstrained Bond Fund’s Institutional Class and Class Y shares, respectively, for the fiscal year ended June 30, 2016. Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.50% for Institutional Class shares of the Fund and 0.80% for Class Y shares of the Fund. Carillon Tower will enter into a similar agreement to limit the Carillon Reams Unconstrained Bond Fund’s total annual operating expenses to 0.50% for Class I shares and 0.80% for Class Y shares with a term lasting for at least two years from the Closing Date of the Reorganization. For a more detailed comparison of the fees and expenses of the Funds, please see “Comparative Fee and Expense Tables” and “Additional Information about the Funds” below. |
·
|
The Scout Unconstrained Bond Fund pays Scout Investments an advisory fee at the annual rate of 0.60% on the first $3 billion of the Fund’s average daily net assets and 0.55% on the average daily net assets over $3 billion. The Carillon Reams Unconstrained Bond Fund will pay Carillon Tower an advisory fee at the same rates. Carillon Tower will pay Scout Investments a subadvisory fee at the annual rate of 0.60% on the first $3 billion of the Fund’s average daily net assets and 0.55% on the average daily net assets over $3 billion.
|
·
|
Currently, the Acquired Funds pay Scout Investments and UMB Fund Services, Inc. (“UMBFS”) for administrative services and fund accounting services. Scout Investments receives the following fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing certain administrative services to the funds: 0.05% of the funds’ first $5 billion of aggregate average daily net assets; 0.04% of the funds’ next $1 billion of aggregate average daily net assets; 0.03% of the funds’ next $1 billion of aggregate average daily net assets; 0.02% of the funds’ next $1 billion of aggregate average daily net assets; and 0.01% of the funds’ aggregate average daily net assets in excess of $8 billion. UMBFS receives the following administration fee based on the aggregate average daily net assets of the Acquired Funds and other series of Scout Funds, allocated proportionately to each fund for providing administrative and fund accounting services to the funds: 0.04% of the funds’ aggregate average daily net assets up to $1.25 billion; 0.03% of the funds’ aggregate average daily net assets up to the next $1.25 billion; and 0.02% of the funds’ aggregate average daily net assets in excess of $2.5 billion. After the Reorganization, Carillon Tower will provide administrative services to the Acquiring Fund and will receive an administrative fee at the annual rate of 0.10% of average daily net |
·
|
assets of the Acquiring Fund’s Class I and Class Y shares. Carillon Tower has also entered into a sub-administration agreement with U.S. Bancorp Fund Services, LLC (“USBFS”) to provide the Acquiring Fund certain financial reporting and tax services. The fees for sub-administration services are paid by Carillon Tower to USBFS. See “Additional Information about the Funds” below for more information about other service providers.
|
·
|
UMB and Carillon Tower or their affiliates have agreed to bear the costs associated with the Reorganization equally. The Scout Unconstrained Bond Fund and the Carillon Reams Unconstrained Bond Fund will not bear any of the costs and expenses of the Reorganization.
|
Scout Unconstrained Bond Fund
|
Pro forma Carillon Reams Unconstrained
Bond Fund (assuming the Reorganization
is approved)
|
|||
Institutional Class
|
Class Y
|
Class I
|
Class Y
|
|
Maximum Sales Charge (Load) Imposed on Purchases
|
None
|
None
|
None
|
None
|
Maximum Deferred Sales Charge (Load)
|
None
|
None
|
None
|
None
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
None
|
None
|
None
|
Redemption Fee
|
None
|
None
|
None
|
None
|
Exchange Fee
|
None
|
None
|
None
|
None
|
Scout Unconstrained Bond Fund
|
Pro forma Carillon Reams Unconstrained Bond
Fund (assuming the Reorganization is
approved)
|
|||
Institutional Class
|
Class Y
|
Class I
|
Class Y
|
|
Management Fee
|
0.60%
|
0.60%
|
0.60%
|
0.60%
|
Distribution and/or Service Fees (12b-1 fees)
|
None
|
0.25%
|
None
|
0.25%
|
Other Expenses
|
0.22%
|
0.26%
|
0.22% | 0.26% |
Total Annual Fund Operating Expenses
|
0.82%
|
1.11%
|
0.82% | 1.11% |
Adviser’s Fee Waiver and/or Expense Assumption1,2
|
(0.32)%
|
(0.31)%
|
(0.32)% | (0.31)% |
Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Assumption
|
0.50%
|
0.80%
|
0.50%
|
0.80%
|
1 |
Scout Investments has entered into an agreement to waive advisory fees and/or assume certain fund expenses through October 30, 2018 in order to limit the “Total Annual Fund Operating Expenses” (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, short sale dividend and interest expenses, and non-routine expenses) to no more than 0.50% for Institutional Class shares of the Fund and 0.80% for Class Y shares of the Fund. If “Total Annual Fund Operating Expenses” would fall below the current expense limit, Scout Investments may cause the Fund’s expenses to remain at the current expense limit while it is reimbursed for fees that it waived or expenses that it assumed during the three years following the end of the fiscal year in which Scout Investments waived fees or assumed expenses for the Fund, provided that such reimbursement will not cause the Fund to exceed any applicable expense limit that was in place when the fees were waived or expenses assumed. This expense limitation agreement may not be terminated prior to October 30, 2018 unless the Scout Board consents to an earlier revision or termination as being in the best interests of the Fund. |
2 |
Carillon Tower has contractually agreed to waive its investment advisory fee and/or reimburse certain expenses of the Fund to the extent that: annual operating expenses of each class exceed a percentage of that class’ average daily net assets for at least two years from the Closing Date of the Reorganization as follows: Class I - 0.50% and Class Y - 0.80%. This expense limitation excludes interest, taxes, brokerage commissions, short sale dividend and interest expenses, costs relating to investments in other investment companies (acquired fund fees and expenses), dividends, and extraordinary expenses. The contractual fee waiver can be changed only with the approval of a majority of the Fund’s Board of Trustees. Any reimbursement of Fund expenses or reduction in Carillon Tower’s investment advisory fees is subject to reimbursement by the Fund within the following two fiscal years, if overall expenses fall below the lesser of its then current expense cap or the expense cap in effect at the time of the fee reimbursement. |
·
|
You invest $10,000 in the Fund for the time periods indicated;
|
·
|
Your investment has a 5% return each year;
|
·
|
The Fund’s operating expenses remain the same; and
|
·
|
The contractual agreement to limit overall fund expenses remains in place for the term of the agreement.
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
Scout Unconstrained Bond Fund
|
||||
Institutional Class
|
$51
|
$230
|
$424
|
$984
|
Class Y
|
$82
|
$322
|
$582
|
$1,324
|
Pro forma Carillon Reams Unconstrained Bond Fund (assuming the Reorganization is approved)
|
||||
Class I
|
$51 |
$196
|
$390
|
$952
|
Class Y
|
$82
|
$290
|
$550
|
$1,294
|
Acquired Fund
|
Acquiring Fund
|
Scout Unconstrained Bond Fund
|
Carillon Reams Unconstrained Bond Fund
|
Investment Objective
|
The investment objective of the Scout Unconstrained Bond Fund is to maximize total return consistent with the preservation of capital.
The Scout Unconstrained Bond Fund’s investment objective is a non-fundamental policy that may be changed by its Board without shareholder approval.
|
The Carillon Reams Unconstrained Bond Fund will have the same investment objective.
The Carillon Reams Unconstrained Bond Fund’s investment objective also will be a non-fundamental policy that may be changed by its Board without shareholder approval.
|
Principal Investment Strategies
|
|
The Fund pursues its objective by investing at least 80% of its net assets in fixed income instruments. Any change in this 80% policy approved by the Board may not take effect until shareholders have received written notice of the change at least sixty days before it occurs. The fixed income instruments in which the Fund may invest can be of varying maturities and include bonds, debt securities, mortgage- and asset-backed securities (including to-be-announced securities) and other similar instruments issued by various U.S. and non-U.S. public- or private-sector entities. The portfolio duration of the Fund will normally not exceed 8 years but may be greater based on market conditions. The Fund may also have a negative duration. Duration is a measure used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates. A portfolio with negative duration generally incurs a loss when interest rates and yields fall. For purposes of calculating the Fund’s portfolio duration, the Fund includes the effect of the derivative instruments held by the Fund.
In certain market conditions, the Fund may pursue its investment objective by investing a significant portion of its assets in cash or short-term debt obligations. The Fund may invest in both investment grade securities and non-investment grade securities, also known as high yield securities or “junk” bonds. The Fund may invest without limitation in non-investment grade securities. Investment grade securities include securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization, such as BBB- or higher by Standard & Poor’s Financial Services LLC (“S&P®”). The Fund may purchase or sell securities on a when-issued, delayed delivery or forward commitment basis and may engage in short sales. The Fund may without limitation seek to obtain market exposure to the securities in which it primarily invests by entering into buybacks or dollar rolls. The Fund may also invest without limitation in securities denominated in foreign currencies and in U.S. dollar denominated securities of foreign issuers.
The Fund may invest in derivative instruments, such as options, futures contracts (including interest rate, bond, U.S. Treasury and fixed income index futures contracts), currency forwards and swap agreements (including
|
Same, except that references to “investment adviser” are changed to “portfolio management team.”
|
credit default swaps) subject to applicable law and any other restrictions described in the Fund’s Prospectus or Statement of Additional Information (“SAI”). The Fund’s investment in credit default swap agreements may include both single-name credit default swap agreements and credit default swap index products, such as CDX index products. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select currencies, interest rates, countries, durations or credit risks. These derivatives may be used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain exposure to certain instruments or markets (i.e., the corporate bond market) in a more efficient or less expensive way. The credit default swap agreements that the Fund invests in may provide exposure to an index of securities representative of the entire investment grade and high yield fixed income markets, which can include underlying issuers rated as low as CCC by S&P®. Derivative instruments that provide exposure to fixed income instruments may be used to satisfy the Fund’s 80% investment policy.
The investment adviser attempts to maximize total return by pursuing relative value opportunities throughout all sectors of the fixed income market. The portfolio managers screen hundreds of securities to determine how each will perform in various interest rate environments. The portfolio managers construct these scenarios by considering the outlook for interest rates, fundamental credit analysis and option-adjusted spread analysis. The portfolio managers compare these investment opportunities and assemble the Fund’s portfolio from the best available values. The investment adviser constantly monitors the expected returns of the securities in the Fund versus those available in the market and of other securities the investment adviser is considering for purchase. The investment adviser’s strategy is to replace securities that it feels are approaching fair market value with those that, according to its analysis, are significantly undervalued. As a result of this strategy, the Fund’s portfolio turnover rate will vary from year to year depending on market conditions.
The Fund may invest a substantial portion of its assets (more than 25%) in securities and instruments that are economically tied to one or more foreign countries if economic and business conditions warrant such investment. The Fund will invest no more than 50% of its net assets in investments in developing countries or emerging markets.
|
|
Investment Adviser
|
|
Scout Investments
|
Carillon Tower
|
Investment Subadviser
|
|
None.
|
Scout Investments
|
Portfolio Managers
|
|
No portfolio manager is solely responsible for making recommendations for portfolio purchases and sales. Instead, all portfolio managers work together to develop investment strategies with respect to the Fund’s portfolio structure and issue selection. Portfolio strategy is reviewed weekly by all the portfolio managers. A staff of research analysts, traders and other investment professionals supports the portfolio managers.
Mark M. Egan, CFA, is the lead portfolio manager of the Fixed Income Funds. Thomas M. Fink, CFA; Todd C. Thompson, CFA; Stephen T. Vincent, CFA; and Clark W. Holland, CFA, are co-portfolio managers of the Fixed Income Funds. Mr. Egan joined Scout Investments on November 30, 2010. He oversees the entire fixed income division of Scout Investments, Reams Asset Management, and retains oversight over all investment decisions. Mr. Egan was a portfolio manager of Reams Asset Management Company, LLC (“Reams”) from April 1994 until November 2010 and was a portfolio manager of Reams Asset Management Company, Inc. from June 1990 until March 1994. Mr. Egan was a portfolio manager of National Investment Services until May 1990. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Fink joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from December 2000 until November 2010. Mr. Fink was previously a portfolio manager at Brandes Fixed Income Partners from 1999 until 2000, Hilltop Capital Management from 1997 until 1999, Centre Investment Services from 1992 until 1997 and First Wisconsin Asset Management from 1986 until 1992. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Thompson joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from July 2001 until November 2010. Mr. Thompson was a portfolio manager at Conseco Capital Management from 1999 until June 2001 and was a portfolio manager at the Ohio Public Employees Retirement System from 1994 until 1999. He is a CFA® charterholder and a member of the CFA Institute.
Mr. Vincent joined Scout Investments on November 30, 2010. He was a portfolio manager at Reams from October 2005 until November 2010. Mr. Vincent was a senior fixed income analyst at Reams from September 1994 to October 2005. He is a CFA® charterholder and
|
Same.
|
a member of the CFA Institute.
Mr. Holland joined Scout Investments on November 30, 2010 and became a portfolio manager in October 2014. He was a portfolio analyst at Scout Investments from December 2010 until October 2014 and at Reams from February 2002 until November 2010. Prior to joining the firm, Mr. Holland was a portfolio manager and investment product specialist at Wells Fargo Investment Management Group. He is a CFA® charterholder and a member of the CFA Institute.
|
Credit Risks
|
The Fund could lose money if the issuer of a fixed income security is unable or unwilling, or is perceived as unable or unwilling (whether by market participants, ratings agencies, pricing services or otherwise) to meet its financial obligations or goes bankrupt. Securities are subject to varying degrees of credit risk, which are often reflected in their credit ratings. The downgrade of the credit rating of a security held by the Fund may decrease its value. Credit risk usually applies to most fixed income securities. U.S. government securities, especially those that are not backed by the full faith and credit of the U.S. Treasury, such as securities supported only by the credit of the issuing governmental agency or government-sponsored enterprise, carry at least some risk of nonpayment, and the maximum potential liability of the issuers of such securities may greatly exceed their current resources. There is no assurance that the U.S. government would provide financial support to the issuing entity if not obligated to do so by law. Further, any government guarantees on U.S. government securities that the Fund owns extend only to the timely payment of interest and the repayment of principal on the securities themselves and do not extend to the market value of the securities themselves or to shares of the Fund. |
Credit Ratings Risks
|
Ratings by nationally recognized rating agencies represent the agencies’ opinion of the credit quality of an issuer. However, these ratings are not absolute standards of quality and do not guarantee the creditworthiness of an issuer. Ratings do not necessarily address market risk and may not be revised quickly enough to reflect changes in an issuer’s financial condition.
|
Derivatives Risks
|
Derivatives, such as options, futures contracts, currency forwards or swap agreements, may involve greater risks than if the Fund had invested in the reference obligation directly. Derivatives are subject to general market risks, liquidity risks, interest rate risk, credit risks and management risks. Derivatives also present the risk that the other party to the transaction will fail to perform. Derivatives also involve an increased risk of mispricing or improper valuation of the derivative instrument, and imperfect correlation between the value of the derivative and the underlying instrument so that the Fund may not realize the intended benefits. When used for hedging, changes in the value of the derivative may also not correlate perfectly with the underlying asset, rate or index. Derivatives risk may be more significant when derivatives are used to enhance Fund returns, increase liquidity, manage the duration of the Fund’s portfolio and/or gain exposure to certain instruments or markets, rather than solely to hedge the risk of a |
position held by the Fund. Derivatives can cause the Fund to participate in losses (as well as gains) in an amount that significantly exceeds the Fund’s initial investment. Also, suitable derivative transactions may not be available in all circumstances and there can be no assurance that the Fund will engage in these transactions to reduce exposure to other risks when that would be beneficial. The regulation of cleared and uncleared swap agreements, as well as other derivatives, is a rapidly changing area of law and is subject to modification by government and judicial action. It is not possible to predict fully the effects of current or future regulation. Changes in government regulation of various types of derivatives instruments may make derivatives more costly or limit the availability of derivatives, which may limit or prevent the Fund from using certain types of derivative instruments as part of its investment strategy; may affect the character, timing and amount of the Fund’s taxable income or gains; or may otherwise adversely affect the value or performance of derivatives. Compared to other types of investments, derivatives may also be less tax efficient. The Fund’s use of derivatives may be limited by the requirements for taxation of the Fund as a regulated investment company. | |
Fixed Income Security Risks
|
Fixed income market risk is the risk that the prices of, and the income generated by, fixed income securities held by the Fund may decline significantly and/or rapidly in response to adverse issuer, political, regulatory, general economic and market conditions, or other developments, such as regional or global economic instability (including terrorism and related geopolitical risks), interest rate fluctuations, and those events directly involving the issuers that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment. These events may lead to periods of volatility, which may be exacerbated by changes in bond market size and structure. In addition, adverse market events may lead to increased redemptions, which could cause the Fund to experience a loss when selling securities to meet redemption requests by shareholders. The risk of loss increases if the redemption requests are unusually large or frequent. |
High Yield Security Risks
|
Investments in securities rated below investment grade, or “junk bonds,” generally involve significantly greater risks of loss of your money than an investment in investment grade bonds. Compared with issuers of investment grade bonds, junk bonds are more likely to encounter financial difficulties and to be materially affected by these difficulties. Rising interest rates may compound these difficulties and reduce an issuer’s ability to repay principal and interest obligations. Issuers of lower-rated securities also have a greater risk of default or bankruptcy. Additionally, due to the greater number of considerations involved in the selection of the Fund’s securities, the achievement of the Fund’s objective depends more on the skills of the portfolio manager than investing only in higher-rated securities. Therefore, your investment may experience greater volatility in price and yield. High-yield securities may be less liquid than higher quality investments. A security whose credit rating has been lowered may be particularly difficult to sell. |
Income Risks
|
The Fund’s income could decline due to falling market interest rates. In a falling interest rate environment, the Fund may be required to invest its assets in lower-yielding securities. Because interest rates vary, it is impossible to predict the income or yield of the Fund for any particular period.
|
Interest Rate Risks |
Investments in investment grade and non-investment grade fixed income securities are subject to interest rate risk. The value of the Fund’s fixed income investments typically will fall when interest rates rise. The Fund may be particularly sensitive to changes in interest rates if it invests in debt securities with intermediate and long terms to maturity. Debt securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. For example, if a bond has a duration of five years, a 1% increase in interest rates could be expected to result in a 5% decrease in the value of the bond. The Federal Reserve raised the federal funds rate in December 2016, March 2017 and June 2017 and has signaled additional increases in 2017. Interest rates may rise significantly and/or rapidly, potentially resulting in substantial losses to the Fund. During periods of very low or negative interest rates, the Fund may be unable to maintain positive returns. Certain European countries and Japan have recently experienced negative interest rates on deposits and debt securities have traded at negative yields. Negative interest rates may become more prevalent among non-U.S. issuers, and potentially within the United States. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Fund is exposed to such interest rates. |
International Investing Risks
|
Investments in foreign securities involve greater risks than investing in domestic securities. As a result, the Fund’s return and NAV may be affected by fluctuations in currency exchange rates or political or economic conditions and regulatory requirements in a particular country. Foreign markets, as well as foreign economies and political systems, may be less stable than U.S. markets, and changes in the exchange rates of foreign currencies can affect the value of the Fund’s foreign assets. Foreign laws and accounting standards typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies. Custodial and/or settlement
|
systems in foreign markets may not be fully developed and the laws of certain countries may limit the ability to recover assets if a foreign bank or depository or their agents goes bankrupt. Over a given period of time, foreign securities may underperform U.S. securities—sometimes for years. The Fund could also underperform if it invests in countries or regions whose economic performance falls short. The risks associated with investments in governmental or quasi-governmental entities of a foreign country are heightened by the potential for unexpected governmental change, which may lead to default or expropriation, and inadequate government oversight and accounting. Obligations of supranational entities are subject to the risk that the governments on whose support the entity depends for its financial backing or repayment may be unable or unwilling to provide that support. The effect of recent, worldwide economic instability on specific foreign markets or issuers may be difficult to predict or evaluate. Some national economies continue to show profound instability, which may in turn affect their international trading and financial partners or other members of their currency bloc. Foreign security risk may also apply to ADRs, GDRs and EDRs. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than or in addition to investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return. | |
Issuer Risks
|
The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
|
Leverage Risks Associated with Financial Instruments
|
Certain transactions of the Fund may give rise to a form of leverage. Such transactions may include, among others, the use of buybacks, dollar rolls, and when-issued, delayed delivery or forward commitment transactions. Certain derivatives that the Fund may use may create leverage. Derivatives that involve leverage can result in losses to the Fund that exceed the amount originally invested in the derivatives. Certain types of leveraging transactions, such as short sales that are not “against the box,” could be subject to unlimited losses in cases where the Fund, for any reason, is unable to close out the transaction. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leveraging may cause the Fund to be more volatile than if the Fund had not been leveraged. This is because leveraging tends to exaggerate the effect of any increase or decrease in the value of the Fund’s portfolio securities. |
Liquidity Risks
|
Liquidity risk is the possibility that the Fund might be unable to sell a security promptly and at an acceptable price, which could have the effect of decreasing the overall level of the Fund’s liquidity. Market developments may cause the Fund’s investments to become less liquid and subject to erratic price movements. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund could lose money if it cannot sell a security at the time and price that would be most beneficial to the Fund. |
Management Risks
|
The Fund is subject to management risk as an actively managed investment portfolio. The investment adviser and the portfolio managers will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. If the investment adviser is not able to select better-performing equity and fixed income securities, the Fund may lose money.
|
Maturity Risks
|
The Fund will invest in fixed income securities of varying maturities. A fixed income security’s maturity is one indication of the interest rate exposure of a security. Generally, the longer a fixed income security’s maturity, the greater the risk. Conversely, the shorter a fixed income security’s maturity, the lower the risk.
|
Mortgage- and Asset-Backed Securities Risks
|
Mortgage- and asset-backed security risk, which is possible in an unstable or depressed housing market, arises from the potential for mortgage failure or premature repayment of principal, or a delay in the repayment of principal. The reduced value of the Fund’s securities and the potential loss of principal as a result of a mortgagee’s failure to repay would have a negative impact on the Fund. Premature repayment of principal would make it difficult for the Fund to reinvest the prepaid principal at a time when interest rates on new mortgages are declining, thereby reducing the Fund’s income. Conversely, a delay in the repayment of principal could lengthen the expected maturity of the securities, thereby increasing the potential for loss when prevailing interest rates rise, which could cause the values of the securities to fall sharply.
|
Portfolio Turnover Risks
|
The Fund may engage in more active and frequent trading of portfolio securities to a greater extent than certain other mutual funds with similar investment objectives. The Fund’s turnover rate may vary greatly from year to year or during periods within a year. A high rate of portfolio turnover may lead to greater transaction costs, result in adverse tax consequences to investors (from increased recognition of net capital gains, which are taxable to shareholders when distributed to them) and adversely affect performance.
|
Redemption Risks |
The Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Fund, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed income securities, may result in decreased liquidity and increased volatility in the fixed income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Fund’s performance. |
Short Sale Risks
|
A short sale creates the risk of a loss if the price of the underlying security increases, thus increasing the cost to the Fund of buying those securities to cover the short position. The potential for greater losses may be incurred due to general market forces, such as a lack of securities available for short sellers to borrow for delivery, or increases in the price of a security sold short. The Fund may lose more money than the actual cost of a short sale investment. Also, there is the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.
|
Valuation Risks
|
Securities held by the Fund may be priced by an independent pricing service and may also be priced using dealer quotes or fair valuation methodologies in accordance with valuation procedures adopted by the Fund’s Board. The prices provided by the independent pricing service or dealers or the fair valuations may be different from the prices used by other mutual funds or from the prices at which securities are actually bought and sold.
|
Non-Fundamental Investment Policies
|
||
Policy
|
Acquired Fund
|
Acquiring Fund
|
Scout Unconstrained Bond Fund
|
Carillon Reams Unconstrained Bond Fund
|
|
Investing in Illiquid Securities
|
The Fund will not invest in illiquid securities if, as a result of such investment, more than 15% of its net assets would be invested in illiquid securities, or such other amounts as may be permitted under the Investment Company Act of 1940, as amended (“1940 Act”).
|
The Fund may not invest more than 15% of its net assets in repurchase agreements maturing in more than seven days or in other illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions as to resale and including privately placed securities.
|
Investing in Other Investment Companies
|
The Fund will not purchase shares of other investment companies, except in compliance with the 1940 Act or pursuant to a plan of merger or consolidation.
|
The Fund may invest in securities issued by other investment companies as permitted by the 1940 Act, and the rules thereunder and any exemptive relief.
|
Borrowing Money
|
The Fund does not intend to borrow money in excess of 5% of its net assets, however, if borrowings do exceed 5%, the Fund will not purchase additional investment securities until outstanding borrowings represent less than 5% of the Fund’s assets.
|
None.
|
Investing for Control
|
The Fund will not invest in companies for the purpose of exercising control of management.
|
None.
|
Short Selling and Margin
|
The Fund will not purchase securities on margin, except that the Fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin deposits in connection with futures contracts, options on futures contracts, or other derivative instruments shall not constitute purchasing securities on margin, or sell securities short, unless the Fund owns or has the right to obtain securities equivalent in kind and amount to the securities sold short or unless it covers such short sale as required by the current rules and positions of the SEC or its staff, and provided that transactions in options, futures contracts, options on futures contracts, or other derivative instruments are not deemed to constitute selling securities short.
|
None.
|
Investing in UMB
|
The Fund will not invest in securities issued by UMB Financial Corporation or affiliate banks of UMB Financial Corporation.
|
None.
|
Bank Borrowings
|
The Fund will not purchase securities when bank borrowings exceed 5% of its total assets.
|
None.
|
Futures and Options
|
The Fund will not engage in futures or options on futures transactions, except in accordance with Rule 4.5 under the CEA.
|
None.
|
Scout Unconstrained Bond Fund – Calendar Year Total Returns (Institutional Class)
|
||||
[Bar chart to be inserted]
|
||||
23.07%
|
3.69%
|
-4.07%
|
-0.11%
|
[ ]%
|
2012
|
2013
|
2014
|
2015
|
2016
|
Best Quarter (% and quarter end date)
|
Worst Quarter (% and quarter end date)
|
[10.17% (March 31, 2012)]
|
[-2.11% (December 31, 2014)]
|
The calendar year-to-date total return as of [June 30, 2017] was [ ]%.
|
Scout Unconstrained Bond Fund – Average Annual Total Returns (As of December 31, 2016)
|
|||
One Year
|
Five Years
|
Since Inception
|
|
Institutional Class (Inception Date: September 29, 2011)
|
|||
Return Before Taxes
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions
|
[ ]%
|
[ ]%
|
[ ]%
|
Return After Taxes on Distributions and Sale of Fund Shares
|
[ ]%
|
[ ]%
|
[ ]%
|
BofA Merrill Lynch 3-Month LIBOR Constant Maturity Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[ ]%
|
[ ]%
|
Class Y (Inception Date: December 31, 2012)
|
|||
Return Before Taxes
|
[ ]%
|
[N/A]
|
[ ]%
|
BofA Merrill Lynch 3-Month LIBOR Constant Maturity Index (reflects no deduction for fees, expenses or taxes)
|
[ ]%
|
[N/A]
|
[ ]%
|
Net Assets
(in millions)
|
Net Asset Value Per Share
|
Shares Outstanding
|
|
Scout Unconstrained Bond Fund – Institutional Class
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Reams Unconstrained Bond Fund – Class I (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
Scout Unconstrained Bond Fund – Class Y
|
$[ ]
|
$[ ]
|
[ ]
|
Adjustments*
|
—
|
—
|
|
Pro forma Carillon Reams Unconstrained Bond Fund – Class Y (assuming the Reorganization is approved)
|
$[ ]
|
$[ ]
|
[ ]
|
Fundamental Investment Policies
|
||
Policy
|
Acquired Funds
|
Acquiring Funds
|
Borrowing
|
Each Fund will not, as a matter of fundamental policy borrow money or issue senior securities, except as the Investment Company Act of 1940, as amended (“1940 Act”), any rule thereunder, or SEC staff interpretation thereof, may permit. (The following sentence is intended to describe the current regulatory limits relating to senior securities and borrowing activities that apply to mutual funds and the information in the sentence may be changed without shareholder approval to reflect legal or regulatory changes. A Fund may borrow up to 5% of its total assets for temporary purposes and may also borrow from banks, provided that if borrowings exceed 5%, a Fund must have assets totaling at least 300% of the borrowing when the amount of the borrowing is added to the Fund’s other assets. The effect of this provision is to allow a Fund to borrow from banks amounts up to one-third (33 1/3%) of its total assets (including those assets represented by the borrowing).)
|
The funds may not borrow money, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
|
Commodities
|
Each Fund will not, as a matter of fundamental policy purchase or sell commodities as defined in the CEA and the rules and regulations thereunder, unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent the Fund from engaging in transactions involving futures contracts and options thereon or investing in securities that are secured by physical commodities.
|
The funds may not purchase or sell commodities or commodity contracts unless acquired as a result of ownership of securities or other instruments issued by persons that purchase or sell commodities or commodities contracts; but this shall not prevent the fund from purchasing, selling and entering into financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts or other derivative instruments that are not related to physical commodities.
|
Concentration
|
Each Fund will not, as a matter of fundamental policy make investments that will result in the concentration (as that term may be defined in the 1940 Act, any rules or orders thereunder, or SEC staff interpretation thereof) of its total assets in securities of issuers in any one industry (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities or securities of other investment companies). (The following sentence is intended to describe the current definition of concentration and the information in the sentence may be changed without shareholder approval to reflect legal or regulatory changes. Currently, to avoid
|
Except for any fund that is ‘concentrated’ in an industry or group of industries within the meaning of the 1940 Act, the funds may not purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government, U.S. states, District of Columbia, U.S. territories and possessions, and any of the political subdivisions of the aforementioned entities) if, as a result, more than 25% of the fund’s total assets would be invested in the securities of companies whose principal business activities are in the same industry.
|
concentration of investments, a Fund may not invest 25% or more of its total assets in securities of issuers in any one industry (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities or securities of other investment companies).) | ||
Diversification
|
Each Fund will not, as a matter of fundamental policy change its classification under the 1940 Act from “diversified” to “non-diversified.” (The following sentence describes the current regulatory definition of “diversified” for purposes of the 1940 Act, and the information in the sentence may be changed without shareholder approval to reflect legal or regulatory changes. A diversified Fund is one that does not: (1) as to 75% of its total assets, purchase the securities of any one issuer (other than securities issued or guaranteed by the United States Government or any of its agencies or instrumentalities or securities of other investment companies), if immediately after and as a result of such purchase (a) the value of the holdings of the Fund in the securities of such issuer exceeds 5% of the value of the Fund’s total assets, or (b) the Fund owns more than 10% of the outstanding voting securities, or any other class of securities, of such issuer.)
|
Except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief, each fund may not with respect to 75% of the fund’s total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities, and securities of other investment companies) if, as a result, (a) more than 5% of a fund’s total assets would be invested in the securities of that issuer, or (b) a fund would hold more than 10% of the outstanding voting securities of that issuer.
|
Loans, Repurchase Agreements and Loans of Portfolio Securities
|
Each Fund will not, as a matter of fundamental policy make loans, provided that this restriction does not prevent a Fund from purchasing debt obligations, entering into repurchase agreements, and loaning its assets to broker/dealers or institutional investors and investing in loans, including assignments and participation interests.
|
The funds may make loans only as permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
|
Real Estate
|
Each Fund will not, as a matter of fundamental policy purchase or sell real estate, unless acquired as a result of ownership of securities or other instruments and provided that this restriction does not prevent a Fund from investing in issuers which invest, deal or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein.
|
The funds may not purchase or sell real estate, except that, to the extent permitted by applicable law, the funds may (1) invest in securities or other instruments directly or indirectly secured by real estate, and (2) invest in securities or other instruments issued by issuers that invest in real estate.
|
Senior Securities
|
Each Fund will not, as a matter of fundamental policy borrow money or issue senior securities, except as the 1940 Act, any rule thereunder, or SEC staff interpretation thereof, may permit. (The following sentence is intended to describe the current regulatory limits relating to senior securities and borrowing activities that
|
The funds may not issue senior securities, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
|
apply to mutual funds and the information in the sentence may be changed without shareholder approval to reflect legal or regulatory changes. A Fund may borrow up to 5% of its total assets for temporary purposes and may also borrow from banks, provided that if borrowings exceed 5%, a Fund must have assets totaling at least 300% of the borrowing when the amount of the borrowing is added to the Fund’s other assets. The effect of this provision is to allow a Fund to borrow from banks amounts up to one-third (33 1/3%) of its total assets (including those assets represented by the borrowing).) | ||
Underwriting
|
Each Fund will not, as a matter of fundamental policy underwrite the securities of other issuers, except that a Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the 1933 Act.
|
The funds may not underwrite securities issued by others, except to the extent that the fund may be considered an underwriter within the meaning of the 1933 Act in the disposition of restricted securities or in connection with investments in other investment companies.
|
(a)
|
Each Reorganization will qualify as a “reorganization” (as defined in section 368(a)(1)(F) of the Code), and each Fund will be “a party to a reorganization” within the meaning of section 368(b) of the Code;
|
(b)
|
Each Acquired Fund will recognize no gain or loss on the transfer of its assets to the corresponding Acquiring Fund in exchange solely for the Acquiring Fund’s shares and its assumption of the Acquired Fund’s liabilities or on the subsequent distribution of those shares to the Acquired Fund’s shareholders in exchange for their Acquired Fund shares;
|
(c)
|
Each Acquiring Fund will recognize no gain or loss on its receipt of the corresponding Acquired Fund’s assets in exchange solely for the Acquiring Fund’s shares and its assumption of the Acquired Fund’s liabilities;
|
(d)
|
Each Acquiring Fund’s basis in each asset it receives from the corresponding Acquired Fund will be the same as the latter’s basis therein immediately before the Reorganization, and the Acquiring Fund’s holding period for each such asset will include the Acquired Fund’s holding period therefor (except where the Acquiring Fund’s investment activities have the effect of reducing or eliminating an asset’s holding period);
|
(e)
|
An Acquired Fund shareholder will recognize no gain or loss on the exchange of all its Acquired Fund shares solely for the corresponding Acquiring Fund’s shares pursuant to the Reorganization;
|
|
(f)
|
An Acquired Fund shareholder’s aggregate basis in the corresponding Acquiring Fund’s shares it receives in the Reorganization will be the same as the aggregate basis in its Acquired Fund shares it actually or constructively surrenders in exchange for those Acquiring Fund shares, and its holding period for those Acquiring Fund shares will include, in each instance, its holding period for those Acquired Fund shares, provided the shareholder holds them as capital assets at the Effective Time; and
|
(g)
|
For purposes of section 381 of the Code, each Acquiring Fund will be treated just as the corresponding Acquired Fund would have been treated if there had been no reorganization. Accordingly, each Reorganization will not result in the termination of the participating Acquired Fund’s taxable year, the Acquired Fund’s tax attributes enumerated in section 381(c) of the Code will be taken into account by the corresponding Acquiring Fund as if there had been no reorganization, and the part of the Acquired Fund’s taxable year before the Reorganization will be included in Acquiring Fund’s taxable year after the Reorganization.
|
Category
|
Acquired Funds
|
Acquiring Funds (Delaware Statutory Trust)
|
Eagle Series Trust (Massachusetts Business Trust)
|
Par Value
|
Each share has no par value.
|
Each share has no par value.
|
Shares may be issued with or without par value.
|
Preemptive Rights
|
None.
|
None.
|
None.
|
Preference
|
None.
|
None.
|
None.
|
Appraisal Rights
|
None.
|
None.
|
None.
|
Conversion Rights
|
None.
|
None.
|
None.
|
Exchange Rights (not including the right to exchange among Funds)
|
None.
|
None.
|
None.
|
Shareholder Rights
|
No rights to title in trust property or to call for any partition, division or accounting.
|
No rights to title in trust property, to call for any partition, division or accounting, or under contracts entered into by the Trust.
|
None.
|
Personal Liability of Shareholders
|
None.
|
None.
|
None. However, Massachusetts law does not expressly limit the liability of beneficial owners of a Massachusetts business trust.
|
Annual Meetings
|
No annual meetings unless required by law.
|
No annual meetings unless required by law.
|
No annual meetings unless required by law.
|
Right to Call Meeting of Shareholders
|
None.
|
Shall be called upon request of shareholders owning at least 25% of shares entitled to vote.
|
A meeting for the purpose of removing a trustee shall be called upon request of shareholders owning at least 10% of shares entitled to vote.
|
Notice of Meetings
|
Provided personally, by mail or by other written or telegraphic communication at least 7 days prior to the meeting and not more than 75 days prior to the meeting.
|
Provided personally, by mail or by other written or electronic communication at least 15 days prior to the meeting and not more than 120 days prior to the meeting.
|
Provided personally or by mail at least 15 days prior to the meeting.
|
Record Date for Meetings
|
Trustees may fix in advance a date not more than one hundred and eighty days before the meeting or less than seven days before the meeting.
|
Trustees may fix in advance a date not more than one hundred and twenty days before the meeting.
|
Trustees may fix in advance a date not more than 90 days before the date of any shareholder meeting.
|
Election of Trustees
|
Requires plurality.
|
Requires plurality.
|
Requires plurality.
|
Adjournment of Meetings
|
A majority of shares represented at the meeting, either in person or by proxy.
|
The chairman of the meeting.
|
A majority of shares represented at the meeting, either in person or by proxy.
|
Removal of Trustees by Shareholders
|
Shareholders may remove a Trustee only to the extent provided by the 1940 Act.
|
May be removed at a shareholder meeting by a vote of shareholders owning at least two-thirds of the outstanding shares of the Trust.
|
May be removed at a shareholder meeting, called for that purpose, by a vote of shareholders owning at least two-thirds of the outstanding shares of the Trust.
|
Acquired Fund
|
Total Number
|
Number of Shares
|
Number of Class Y shares
|
Number of Institutional Class shares
|
Scout Core Bond Fund
|
[ ]
|
N/A
|
[ ]
|
[ ]
|
Scout Core Plus Bond Fund
|
[ ]
|
N/A
|
[ ]
|
[ ]
|
Scout International Fund
|
[ ]
|
[ ]
|
N/A
|
N/A
|
Scout Low Duration Bond Fund
|
[ ]
|
[ ]
|
N/A
|
N/A
|
Scout Mid Cap Fund
|
[ ]
|
[ ]
|
N/A
|
N/A
|
Scout Small Cap Fund
|
[ ]
|
[ ]
|
N/A
|
N/A
|
Scout Unconstrained Bond Fund
|
[ ]
|
N/A
|
[ ]
|
[ ]
|
(a) |
issue and deliver to Old Fund the number of full and fractional (all references herein to “fractional” shares meaning fractions rounded to the third decimal place)
|
(1)
|
in the case of a Reorganization involving a Multi-Class Old Fund, (i) New Fund Class I Shares equal to the number of full and fractional Old Fund Institutional Class Shares then outstanding and (ii) New Fund Class Y Shares equal to the number of full and fractional Old Fund Class Y Shares then outstanding, and
|
(2)
|
in the case of a Reorganization involving a Single-Class Old Fund, New Fund Class I Shares equal to the number of full and fractional Old Fund Undesignated Class Shares then outstanding, and
|
(b) |
assume all of Old Fund’s liabilities described in paragraph 1.3 (“Liabilities”).
|
(a) |
Old Trust (1) is a statutory trust that is duly organized, validly existing, and in good standing under Delaware law, and its Certificate of Trust has been duly filed in the office of the Secretary of State of Delaware (“State Secretary”), (2) has the power to own all its properties and assets and to carry on its business as described in documents filed with the Commission, (3) is duly registered as an open-end management investment company under the 1940 Act, which registration will be in full force and effect at the Effective Time, and no proceeding will have been instituted to suspend that registration, and (4) has never elected not to be classified as an association taxable as a corporation;
|
(b) |
Old Fund is a duly established and designated series of Old Trust;
|
(c) |
The execution, delivery, and performance hereof have been duly authorized at the date hereof by all necessary action on the part of Old Trust’s Board, which has made the determinations required by Rule 17a-8(a) under the 1940 Act; and this Agreement constitutes a valid and legally binding obligation of Old Trust, with respect to Old Fund, enforceable in accordance with its terms, subject to the effect of bankruptcy,
|
(d) |
At the Effective Time, Old Trust, on Old Fund’s behalf, will have good and marketable title to the Assets and full right, power, and authority to sell, assign, transfer, and deliver the Assets hereunder free of any liens or other encumbrances (except for encumbrances on securities that are subject to “securities loans” as referred to in section 851(b)(2) or securities that are restricted to resale by their terms); and on delivery and payment for the Assets, New Trust, on New Fund’s behalf, will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, excluding restrictions that might arise under the Securities Act of 1933, as amended (“1933 Act”); |
(e) |
Old Trust, with respect to Old Fund, is not currently engaged in, and its execution, delivery, and performance hereof and consummation of the Reorganization will not result in, (1) a material violation of any provision of its Agreement and Declaration of Trust (“Old Trust’s Declaration”) or By-Laws (each as last amended on July 1, 2009), Delaware law, or any agreement, indenture, instrument, contract, lease, or other undertaking (each, an “Undertaking”) to which Old Trust, on Old Fund’s behalf, is a party or by which it is bound or (2) the acceleration of any obligation, or the imposition of any penalty, under any Undertaking, judgment, or decree to which Old Trust, on Old Fund’s behalf, is a party or by which it is bound; |
(f) |
At or before the Effective Time, either (1) all material contracts and other commitments of Old Trust, with respect to Old Fund (other than this Agreement and certain investment contracts, including options, futures, and forward contracts), will terminate or (2) provision for discharge and/or assumption by New Fund of any liabilities of Old Fund thereunder will be made, without either Fund’s incurring any penalty with respect thereto and without diminishing or releasing any rights Old Fund may have had with respect to actions taken or omitted or to be taken by any other party thereto before the Closing;
|
(g) |
Except as set forth on Schedule B, no litigation, administrative proceeding, action, or investigation of or before any court, governmental body, or arbitrator is presently pending or, to Old Trust’s best knowledge, threatened against Old Trust, with respect to Old Fund, regarding any of its properties or assets that, if adversely determined, would materially and adversely affect its financial condition or the conduct of its business; and Old Trust, on Old Fund’s behalf, knows of no facts that might form the basis for the institution of any such litigation, proceeding, action, or investigation and is not a party to or subject to the provisions of any order, decree, judgment, or award of any court, governmental body, or arbitrator that materially and adversely affects its business or its ability to consummate the transactions contemplated hereby;
|
(h) |
Old Fund’s Schedule of Investments, Statement of Assets and Liabilities, Statement of Operations, and Statement of Changes in Net Assets (each, a “Statement”) at and for the fiscal year (in the case of the last Statement, for the two fiscal years) ended June 30, 2017, have been audited by Deloitte & Touche LLP, which issued an unqualified opinion thereon, and
|
(i) |
Since June 30, 2017, there has not been any material adverse change in Old Fund’s financial condition, assets, liabilities, or business, other than changes occurring in the ordinary course of business, or any incurrence by Old Fund of indebtedness maturing more than one year from the date that indebtedness was incurred; for these purposes, a decline in NAV per Old Fund Share due to declines in market values of investments Old Fund holds, the discharge of Old Fund’s liabilities, or the redemption of Old Fund Shares by its shareholders shall not constitute a material adverse change;
|
(j) |
All issued and outstanding Old Fund Shares are, and at the Effective Time will be, validly issued and outstanding, fully paid, and nonassessable by Old Trust and have been offered and sold in every state and territory and the District of Columbia in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws; all issued and outstanding Old Fund Shares will, at the Effective Time, be held by the persons and in the amounts set forth on Old Fund’s shareholder records, as provided in paragraph 2.4; and Old Fund does not have outstanding any options, warrants, or other rights to subscribe for or purchase any Old Fund Shares, nor are there outstanding any securities convertible into any Old Fund Shares;
|
(k) |
At the Effective Time, all material federal and other tax returns, dividend reporting forms, and other tax-related reports (“Returns”) of Old Fund required by law to have then been filed by that time (giving effect to any properly and timely filed extensions of time to file) shall have been filed and are or will be correct in all material respects; all federal and other taxes shown as due or required to be shown as due on those Returns shall have been paid or provision shall have been made for the payment thereof, except for amounts that alone or in the aggregate would not reasonably be expected to have a material adverse effect; to the best of Old Trust’s knowledge, no such Return is currently under audit and no assessment has been asserted with respect to those Returns; and Old Fund is in compliance in all material respects with applicable Regulations pertaining to the reporting of, and withholding in respect of, distributions on and redemptions of its shares and is not liable for any material penalties that could be imposed thereunder; |
(l) |
Old Fund is not classified as a partnership, and instead is classified as an association that is taxable as a corporation, for federal tax purposes and either has elected the latter classification by filing Form 8832 with the IRS or is a “publicly traded partnership” (as
|
(m) |
Old Fund incurred the Liabilities, which are associated with the Assets, in the ordinary course of its business;
|
(n) |
Old Fund is not under the jurisdiction of a court in a “title 11 or similar case” (as defined in section 368(a)(3)(A));
|
(o) |
Not more than 25% of the value of Old Fund’s total assets (excluding cash, cash items, and Government securities) is invested in the stock and securities of any one issuer, and not more than 50% of the value of those assets is invested in the stock and securities of five or fewer issuers; provided that a proportionate share of the assets of any RIC in which Old Fund invests (and not the securities issued by the RIC itself) will be taken into account for this purpose;
|
(p) |
To the best of Old Trust’s knowledge, at the time of its mailing, at the time of the Shareholders Meeting (as defined in paragraph 4.1), and at the Effective Time, the Proxy Statement/Prospectus (as defined in paragraph 3.3(a)), insofar as it relates to Old Trust or Old Fund, will comply in all material respects with applicable provisions of the 1933 Act, the Securities Exchange Act of 1934, as amended, and the 1940 Act and the rules and regulations thereunder (collectively, “Federal Securities Laws”) and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which those statements were made, not misleading; provided that the foregoing shall not apply to statements in or omissions from the Proxy Statement/Prospectus made in reliance on and in conformity with information furnished by New Trust for use therein; |
(q) |
Old Trust’s Declaration permits Old Trust to vary its shareholders’ investment; Old Trust does not have a fixed pool of assets -- each series thereof (including Old Fund) is a managed portfolio of securities and other investments; and Scout Adviser has the authority to buy and sell securities for it; and
|
(r) |
The New Fund Shares are not being acquired for the purpose of making any distribution thereof, other than in accordance with the terms hereof.
|
(a) |
New Trust (1) is a [statutory/business] trust that is duly organized, validly existing, and in good standing under [Delaware/Massachusetts] law, and its Certificate of Trust has been duly filed in the office of the State Secretary, (2) has the power to own all its properties and assets and carry on its business as described in documents filed with the Commission, and (3) is duly registered as an open-end management investment company under the 1940 Act, and no proceeding will have been instituted to suspend that registration;
|
(b) |
At the Effective Time, New Fund will be a duly established and designated series of New Trust; New Fund has not commenced operations and will not do so until after the Closing; and New Fund will be, at that time, a shell series, without assets or liabilities, created for the purpose of acquiring the Assets and assuming the Liabilities of Old Fund;
|
(c) |
The execution, delivery, and performance hereof have been duly authorized at the date hereof by all necessary action on the part of New Trust’s Board, which has made the determinations required by Rule 17a-8(a) under the 1940 Act; and this Agreement constitutes a valid and legally binding obligation of New Trust, with respect to New Fund, enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, fraudulent transfer, reorganization, receivership, moratorium, and other laws affecting the rights and remedies of creditors generally and general principles of equity;
|
(d) |
Before the Closing, there will be no (1) issued and outstanding New Fund Shares, (2) options, warrants, or other rights to subscribe for or purchase any New Fund Shares, (3) securities convertible into any New Fund Shares, or (4) any other securities issued by New Fund, except the Initial Shares;
|
(e) |
No consideration other than New Fund Shares (and New Fund’s assumption of the Liabilities) will be issued in exchange for the Assets in the Reorganization;
|
(f) |
New Trust, with respect to New Fund, is not currently engaged in, and its execution, delivery, and performance hereof and consummation of the Reorganization will not result in, (1) a material violation of any provision of its Agreement and Declaration of Trust (“New Trust’s Declaration”) or By-laws (each dated as of [May 5, 2017/November 1, 2008]), [Delaware/Massachusetts] law, or any Undertaking to which New Trust, on New Fund’s behalf, is a party or by which it is bound or (2) the acceleration of any obligation, or the imposition of any penalty, under any Undertaking, judgment, or decree to which New Trust, on New Fund’s behalf, is a party or by which it is bound; |
(g) |
No litigation, administrative proceeding, action, or investigation of or before any court, governmental body, or arbitrator is presently pending or, to New Trust’s best knowledge, threatened against New Trust, with respect to New Fund, regarding any of
|
(h) |
New Fund will not be classified as a partnership, and instead will be classified as an association that is taxable as a corporation, for federal tax purposes and either will elect the latter classification by filing Form 8832 with the IRS or will be a “publicly traded partnership” (as defined in section 7704(b)) that is treated as a corporation; New Fund will be an “investment company” (as defined in section 368(a)(2)(F)(iii)) and a “fund” (as defined in section 851(g)(2), eligible for treatment under section 851(g)(1)); for its taxable year in which the Reorganization occurs, New Fund will meet the requirements of Subchapter M for qualification and treatment as a RIC and will be eligible to and will compute its federal income tax under section 852; and New Fund intends to continue to meet all those requirements, and to be eligible to and to so compute its federal income tax, for the next taxable year; |
(i) |
There is no plan or intention for New Fund to be dissolved or merged into another statutory trust or a corporation or business trust or any “fund” thereof (as defined in section 851(g)(2)) following the Reorganization;
|
(j) |
Assuming the truthfulness and correctness of Old Trust’s representation and warranty in paragraph 3.1(o), immediately after the Reorganization (1) not more than 25% of the value of New Fund’s total assets (excluding cash, cash items, and Government securities) will be invested in the stock and securities of any one issuer and (2) not more than 50% of the value of those assets will be invested in the stock and securities of five or fewer issuers; provided that a proportionate share of the assets of any RIC in which New Fund invests (and not the securities issued by the RIC itself) will be taken into account for this purpose;
|
(k) |
The New Fund Shares to be issued and delivered to Old Fund, for the Shareholders’ accounts, pursuant to the terms hereof (1) will at the Effective Time have been duly authorized and duly registered under the Federal Securities Laws (and appropriate notices respecting them will have been duly filed under applicable state securities laws) and (2) when so issued and delivered, will be validly issued and outstanding New Fund Shares and will be fully paid and nonassessable by New Trust;
|
(l) |
To the best of New Trust’s knowledge, at the time of its mailing, at the time of the Shareholders Meeting, and at the Effective Time, the Proxy Statement/Prospectus, insofar as it relates to New Trust, New Fund or New Fund Shares, will comply in all material respects with applicable provisions of the Federal Securities Laws and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which those statements were made, not misleading; provided that
|
(m) |
New Trust’s Declaration permits New Trust to vary its shareholders’ investment; New Trust does not have a fixed pool of assets; each series thereof (including New Fund) is (or will be) a managed portfolio of securities and other investments; and Carillon Adviser will have the authority to buy and sell securities for it.
|
(a) |
No governmental consents, approvals, authorizations, or filings are required under the Federal Securities Laws or state securities laws, and no consents, approvals, authorizations, or orders of any court are required, for its execution or performance hereof, except for (1) Old Trust’s filing with the Commission of a supplement to its prospectus describing the Reorganization, (2) New Trust’s filing with the Commission of a registration statement on Form N-14 relating to the New Fund Shares issuable hereunder, and any supplement or amendment thereto, including therein a prospectus (“Proxy Statement/Prospectus”), and a registration statement on Form N-1A registering New Fund, (3) the Commission’s declaring the latter registration statement effective, and (4) consents, approvals, authorizations, and filings that have been made or received or may be required after the Effective Time; |
(b) |
The fair market value of the New Fund Shares each Shareholder receives will be equal to the fair market value of its Old Fund Shares it actually or constructively surrenders in exchange therefor;
|
(c) |
The Shareholders will pay their own expenses (such as fees of personal investment or tax advisers for advice regarding the Reorganization), if any, incurred in connection with the Reorganization;
|
(d) |
The fair market value on a going concern basis, and “adjusted basis” (within the meaning of section 1011), of the Assets will equal or exceed the Liabilities to be assumed by New Fund and those to which the Assets are subject;
|
(e) |
None of the compensation received by any Shareholder who or that is an employee of or service provider to Old Fund will be separate consideration for, or allocable to, any of the Old Fund Shares that Shareholder holds; none of the New Fund Shares any such Shareholder receives will be separate consideration for, or allocable to, any employment agreement, investment advisory agreement, or other service agreement; and the compensation paid to any such Shareholder will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s-length for similar services; |
(f) |
No expenses incurred by Old Fund or on its behalf in connection with the Reorganization will be paid or assumed by New Fund, Scout Adviser, Carillon Adviser, any affiliate thereof or any other third party unless those expenses are solely and
|
(g) |
There will be no dissenters to the Reorganization under the applicable provisions of Delaware law, and New Fund will not pay cash in lieu of fractional New Fund Shares in connection with the Reorganization;
|
(h) |
Immediately following consummation of the Reorganization, (1) the Shareholders will own all the New Fund Shares, and will own those shares solely by reason of their ownership of the Old Fund Shares immediately before the Reorganization, and (2) New Fund will hold the same assets – except for any assets used to pay the Funds’ expenses incurred in connection with the Reorganization – and be subject to the same liabilities that Old Fund held or was subject to immediately before the Reorganization, plus any liabilities for those expenses; and those excepted assets, together with the amount of all redemptions and distributions (other than regular, normal dividends) Old Fund makes immediately preceding the Reorganization, will, in the aggregate, constitute less than 1% of its net assets;
|
(i) |
The Reorganization is being undertaken for bona fide business purposes (and not a purpose to avoid federal income tax); and
|
(j) |
The principal purpose of New Fund’s assumption of the Liabilities is a bona fide business purpose and is not avoidance of federal income tax on the transaction.
|
(a) |
New Fund’s acquisition of the Assets in exchange solely for New Fund Shares and its assumption of the Liabilities, followed by Old Fund’s distribution of those shares pro rata to the Shareholders actually or constructively in exchange for their Old Fund Shares and in complete liquidation of Old Fund, will qualify as a “reorganization” (as defined in section 368(a)(1)(F)), and each Fund will be “a party to a reorganization” (within the meaning of section 368(b)); |
(b) |
Old Fund will recognize no gain or loss on the transfer of the Assets to New Fund in exchange solely for New Fund Shares and New Fund’s assumption of the Liabilities or on the subsequent distribution of those shares to the Shareholders in exchange for their Old Fund Shares;
|
(c) |
New Fund will recognize no gain or loss on its receipt of the Assets in exchange solely for New Fund Shares and its assumption of the Liabilities;
|
(d) |
New Fund’s basis in each Asset will be the same as Old Fund’s basis therein immediately before the Reorganization, and New Fund’s holding period for each Asset will include Old Fund’s holding period therefor (except where New Fund’s investment activities have the effect of reducing or eliminating an Asset’s holding period);
|
(e) |
A Shareholder will recognize no gain or loss on the exchange of all its Old Fund Shares solely for New Fund Shares pursuant to the Reorganization;
|
(f) |
A Shareholder’s aggregate basis in the New Fund Shares it receives in the Reorganization will be the same as the aggregate basis in its Old Fund Shares it actually or constructively surrenders in exchange for those New Fund Shares, and its holding period for those New Fund Shares will include, in each instance, its holding period for those Old Fund Shares, provided the Shareholder holds the latter as capital assets at the Effective Time; and
|
(g) |
For purposes of section 381, New Fund will be treated just as Old Fund would have been treated if there had been no Reorganization. Accordingly, the Reorganization will not result in the termination of Old Fund’s taxable year, Old Fund’s tax attributes enumerated in section 381(c) will be taken into account by New Fund as if there had been no Reorganization, and the part of Old Fund’s taxable year before the Reorganization will be included in New Fund’s taxable year after the Reorganization.
|
Old Funds
(each a series of Old Trust)
|
New Funds
(each a series of New Trust)
|
Scout Unconstrained Bond Fund
|
Carillon Reams Unconstrained Bond Fund
|
Scout Core Bond Fund
|
Carillon Reams Core Bond Fund
|
Scout Core Plus Bond Fund
|
Carillon Reams Core Plus Bond Fund
|
Scout International Fund
|
Carillon Scout International Fund
|
Scout Low Duration Bond Fund
|
Carillon Reams Low Duration Bond Fund
|
Scout Mid Cap Fund
|
Carillon Scout Mid Cap Fund
|
Scout Small Cap Fund
|
Carillon Scout Small Cap Fund
|
Type of account
|
Initial investment
|
Subsequent investment
|
Regular account
|
$1,000
|
No minimum
|
Periodic investment program
|
$50
|
$50 per month
|
Retirement account
|
$500
|
No minimum
|
Type of transactions
|
Federal income tax status
|
Income dividends
|
Ordinary income; all or part may be eligible for 15%/20% maximum rates for non-corporate shareholders
|
Net short-term capital gain* and foreign currency
gain distributions
|
Ordinary income
|
Net capital gain** distributions
|
Long-term capital gains; eligible for 15%/20% maximum rates for non-corporate shareholders
|
Redemptions or exchanges of
fund shares owned for more than
one year
|
Long-term capital gains or losses
(rates noted
above)
|
Redemptions or exchanges of
fund shares owned for one year
or less
|
Gains are taxed at the same rate
as ordinary income; losses are
subject to special rules
|
Fund and Class
|
Name and Address
|
Percent Owned
|
1. |
The Prospectus and Statement of Additional Information of Scout Funds, each dated October 31, 2016, as supplemented, with respect to the Acquired Funds (File Nos. 333-96461 and 811-09813); and
|
2. |
The Report of the Independent Registered Public Accounting Firm and the audited financial statements included in the Annual Report to Shareholders of each Acquired Fund for the year ended June 30, 2016 and the unaudited financial statements included in the Semi-Annual Report to Shareholders of each Acquired Fund for the period ended December 31, 2016.
|
I.
|
General Information
|
5
|
|
II.
|
Investment Information
|
5
|
|
A.
|
Investment Policies, Strategies and Risks
|
5
|
|
B.
|
Industry Classifications
|
35
|
|
III.
|
Investment Limitations
|
35
|
|
A.
|
Fundamental Investment Policies for All Funds
|
35
|
|
B.
|
Non-Fundamental Investment Policies
|
36
|
|
IV.
|
Net Asset Value
|
36
|
|
V.
|
Investing in the Funds
|
38
|
|
VI.
|
Investment Programs
|
38
|
|
A.
|
Retirement Plans
|
38
|
|
VII.
|
Redeeming Shares
|
39
|
|
A.
|
Receiving Payment
|
39
|
|
B.
|
Telephone Transactions
|
40
|
|
C.
|
Systematic Withdrawal Plan
|
40
|
|
D.
|
Redemptions-in-Kind
|
40
|
|
E.
|
Frequent Purchases and Redemptions of Fund Shares
|
40
|
|
VIII.
|
Exchange Privilege
|
41
|
|
IX.
|
Disclosure of Portfolio Holdings
|
41
|
|
X.
|
Taxes
|
42
|
|
XI.
|
Shareholder Information
|
47
|
|
XII.
|
Fund Information
|
47
|
|
A.
|
Management of the Acquiring Funds
|
47
|
|
B.
|
Control Persons and Principal Holders of Securities
|
55
|
|
|
|
|
|
|
|
C.
|
Proxy Voting Policies and Procedures
|
55
|
|
|
|
|
|
|
|
D.
|
Investment Adviser and Administrator; Subadviser
|
56
|
|
|
|
|
|
|
|
E.
|
Portfolio Managers
|
59
|
|
|
|
|
|
|
|
|
1.
|
Scout Investments
|
59
|
|
|
|
|
|
|
F.
|
Portfolio Turnover and Brokerage Practices
|
62
|
|
|
|
|
|
|
|
G.
|
Distribution of Shares
|
63
|
|
|
|
|
|
|
|
H.
|
Payments to Dealers
|
65
|
|
|
|
|
|
|
XIII.
|
Additional Services to the Funds
|
66
|
||
|
|
|
||
APPENDIX A
|
A-1
|
|||
|
|
|||
APPENDIX B
|
B-1
|
|||
|
|
|||
APPENDIX C
|
C-1
|
●
|
The shareholder’s name,
|
●
|
The name of the fund,
|
●
|
The account number,
|
●
|
The share or dollar amount to be redeemed, and
|
●
|
The signatures of all registered shareholders with signature guarantees, if applicable.
|
Trustees
|
||||||
Name, Birth Year and
Position, Term of Office (a) and Length of Time Served |
|
Principal Occupation(s) During
Past Five Years |
|
Number
of Funds Overseen in Fund Complex |
|
Other
Directorships held by Trustee for the Past Five Years |
Interested Trustee(b):
|
|
|
|
|
|
|
J. Cooper Abbott (1969)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2012 (Eagle Series Trust)
|
|
Executive Vice President, Investments and Co-Chief Operating Officer of Carillon Tower since 2017; Executive Vice President, Investments and Co-Chief Operating Officer of Eagle since 2009; Director of ClariVest Asset Management LLC since 2012; Director, Eagle Fund Services, Inc. since 2009; President, Eagle Boston Management, Inc. since 2009
|
|
9
|
|
N/A
|
Court James (1974)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2016 (Eagle Series Trust)
|
|
Executive Vice President, Carillon Tower Advisers since 2016, Vice President, New Business Development of Eagle 2010-2016
|
|
9
|
|
Raymond James Bank
|
Independent Trustees:
|
|
|
|
|
|
|
Keith B. Jarrett, PhD (1948)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2005 (Eagle Series Trust)
|
|
Managing Partner, PW1 LLC since 2013; Founder, Rockport Funding, LLC (private equity), and Ajax Partners (investment partnership) since 2003
|
|
9
|
|
Safeguard Scientific, Inc.
|
William J. Meurer (1943)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2003 (Eagle Series Trust)
|
|
Private investor and financial consultant since 2000
|
|
9
|
|
Sykes Enterprises, Inc. (c); Walter Investment Mgmt. Corp.; LifeLink Foundation (private)
|
Liana O’Drobinak (1963)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2014 (Eagle Series Trust)
|
|
Managing Member, Bay Consulting Partners, LLC since 2010; Board Member, Florida Prepaid College Board, 2012-2014; Board Member, Health Insurance Innovations, Inc., 2/2013-10/2013
|
|
9
|
|
N/A
|
James L. Pappas, PhD (1943)
Trustee and Chairman of the Board of Trustees since 2017 (Carillon Series Trust)
Trustee since 1989; Chairman of the Board of Trustees since 2012 (Eagle Series Trust)
|
|
Private investor
|
|
9
|
|
Walter Investment Mgmt. Corp. (ended 2017)
|
Deborah L. Talbot, PhD (1950)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2002 (Eagle Series Trust)
|
Independent Consultant; Principal, Lazure Enterprises, since 2013; Deans’ Advisory Board, College of Arts and Sciences, University of Memphis since 2002
|
9 |
N/A
|
John Carter (1961)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2016 (Eagle Series Trust)
|
|
Law Office of John K. Carter, P.A. since 2015, Founder, Global Recruiters of St. Petersburg since 2012; President and Chief Executive Officer, Transamerica Asset Management 2006 - 2012; Chairman, Board Member, Transamerica Partners Portfolios, Transamerica Partners Funds Group, Transamerica Partners Funds Group II and Transamerica Asset Allocation Variable Funds 2007 - 2012
|
|
9
|
|
N/A
|
Stephen Roussin (1963)
Trustee since 2017 (Carillon Series Trust)
Trustee since 2016 (Eagle Series Trust)
|
|
President, SR2X Consulting since 2013; Chief Executive Officer and President, Campbell & Company 2011 - 2012
|
|
9
|
|
Ramius IDF Master Fund (ended 2016)
|
|
Aggregate Compensation from:
|
Total Compensation
From the Trust and the Eagle Family of Funds(a) Paid to Trustees |
||
Trustee Name
|
Eagle Capital
Appreciation Fund |
Eagle Growth &
Income Fund |
Eagle Series Trust
|
|
Interested Trustees:
|
||||
J. Cooper Abbott
|
$0
|
$0
|
$0
|
$0
|
Court James
|
$0
|
$0
|
$0
|
$0
|
Independent Trustees:
|
John Carter
|
$2,777.78
|
$2,777.78
|
$19,444.44
|
$25,000.00
|
Keith Jarrett
|
$9,368.06
|
$9,368.06
|
$60,763.88
|
$79,500.00
|
William J. Meurer
|
$11,263.88
|
$11,263.88
|
$72,972.24
|
$95,500.00
|
Liana O’Drobinak
|
$9,493.06
|
$9,493.06
|
$61,513.88
|
$80,500.00
|
James L. Pappas
|
$12,444.44
|
$12,444.44
|
$80,611.12
|
$105,500.00
|
Steve Roussin
|
$2,777.78
|
$2,777.78
|
$19,444.44
|
$25,000.00
|
Deborah L. Talbot
|
$11,138.88
|
$11,138.88
|
$72,222.24
|
$94,500.00
|
(a)
|
The Eagle Family of Funds, as of October 31, 2016, consisted of three separate registered investment companies, which included Eagle Capital Appreciation Fund, Eagle Growth & Income Fund and Eagle Series Trust, and 9 portfolios of those companies.
|
|
Officers
|
|
Name, Birth Year and Position, Term of Office(a) and Length of Time Served
|
Principal Occupation(s) During Past Five Years
|
|
J. Cooper Abbott (1969)
President since June 2017 (Carillon Tower Advisers)
President since April 2016 (Eagle Asset Management)
|
Executive Vice President, Investments and Co-Chief Operating Officer of Carillon Tower since 2017; Executive Vice President, Investments and Co-Chief Operating Officer of Eagle since 2009; Director of ClariVest Asset Management LLC since 2012; Director, Eagle Fund Services, Inc. (“EFS”) (b) since 2009
|
|
Susan L. Walzer (1967)
Principal Executive Officer since June 2017 (Carillon Tower Advisers)
Principal Executive Officer since 2011 (Eagle Asset Management)
|
Vice President of Fund Administration, Carillon Tower, since 2017; Vice President of Fund Administration, Eagle, since 2011
|
|
Carolyn K. Gill (1978)
Principal Financial Officer and Treasurer since June 2017 (Carillon Tower Advisers)
Principal Financial Officer and Treasurer
since 2011 (Eagle Asset Management)
|
Manager of Fund Accounting and Fund Reporting for Carillon Tower since 2017; Manager of Fund Accounting and Fund Reporting for Eagle since 2005 and 2010, respectively
|
|
Daniel R. Dzibinski (1974)
Chief Compliance Officer and Secretary since June 2017 (Carillon Tower Advisers
Chief Compliance Officer and Secretary since 2011 (Eagle Asset Management)
|
Manager of Fund Compliance for Carillon Tower since 2017; Manager of Fund Compliance for Eagle since 2011
|
|
Fund
|
Fee Type
|
Average daily net assets
|
Rate charged
|
Carillon Reams Core Bond Fund
|
Investment Advisory
|
0.40%
|
|
Subadvisory
|
0.40%
|
||
Carillon Reams Core Plus Bond Fund
|
Investment Advisory
|
0.40%
|
|
|
Subadvisory
|
0.40%
|
|
Carillon Scout International Fund
|
Investment Advisory
|
First $1 billion
|
0.80%
|
|
|
Assets over $1 billion
|
0.70%
|
|
Subadvisory
|
First $1 billion
|
0.80%
|
Assets over $1 billion
|
0.70%
|
||
Carillon Reams Low Duration Bond Fund
|
Investment Advisory
|
0.30%
|
|
Subadvisory
|
0.30%
|
|
Carillon Scout Mid Cap Fund
|
Investment Advisory
|
First $1 billion
|
0.80%
|
Assets over $1 billion
|
0.70%
|
||
Subadvisory
|
First $1 billion
|
0.80%
|
|
Assets over $1 billion
|
0.70%
|
||
Carillon Scout Small Cap Fund
|
Investment Advisory
|
First $1 billion
|
0.75%
|
Assets over $1 billion
|
0.65%
|
||
Subadvisory
|
First $1 billion
|
0.75%
|
|
Assets over $1 billion
|
0.65%
|
||
Carillon Reams Unconstrained Bond Fund
|
Investment Advisory
|
First $3 billion
|
0.60%
|
Assets over $3 billion
|
0.55%
|
||
Subadvisory
|
First $3 billion
|
0.60%
|
|
Assets over $3 billion
|
0.55%
|
Fund
|
Shares
|
Class I
|
Class Y
|
Carillon Reams Core Bond Fund
|
N/A
|
0.40%
|
0.80%
|
Carillon Reams Core Plus Bond Fund
|
N/A
|
0.40%
|
0.80%
|
Carillon Reams Low Duration Bond Fund
|
0.40%
|
N/A
|
N/A
|
Carillon Scout Mid Cap Fund
|
1.40%
|
N/A
|
N/A
|
Carillon Reams Unconstrained Bond Fund
|
N/A
|
0.50%
|
0.80%
|
A. |
Michael D. Stack and Angel M. Lupercio (Carillon Scout International Fund)
|
|
Number of
accounts |
Total assets
|
Registered investment companies
|
[0]
|
[$0]
|
Other pooled investment vehicles
|
[1]
|
[$119.64 million]
|
Other accounts
|
[25]
|
[$322.81 million]
|
B. |
Mark M. Egan, Thomas M. Fink, Todd C. Thompson, Stephen T. Vincent and Clark W. Holland (Carillon Reams Unconstrained Bond Fund, Carillon Reams Low Duration Bond Fund, Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund)
|
|
Number of
accounts |
Total assets
|
Registered investment companies
|
[5]
|
[$2.66 billion]
|
Other pooled investment vehicles
|
[12]
|
[$4.17 billion]
|
Other accounts
|
[108]
|
[$13.66 billion]
|
C. |
G. Patrick Dunkerley, Derek M. Smashey, John R. Indellicate II and Jason J. Votruba (Carillon Reams Mid Cap Fund)
|
|
Number of accounts
|
Total assets
|
Registered investment companies
|
[2]
|
[$1.12 billion]
|
Other pooled investment vehicles
|
[2]
|
[$403.70 million]
|
Other accounts
|
[3]
|
[$25.42 million]
|
D. |
James R. McBride and Timothy L. Miller (Carillon Reams Small Cap Fund)
|
|
Number of accounts
|
Total assets
|
Registered investment companies
|
[0]
|
[$0]
|
Other pooled investment vehicles
|
[0]
|
[$0]
|
Other accounts
|
[3]
|
[$19.39 million]
|
· |
participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees,
|
· |
client entertainment, client and investor events, and other financial intermediary-sponsored events, and
|
· |
travel expenses, including lodging incurred by registered representatives and other employees in connection with client prospecting, retention and due diligence trips.
|
●
|
Likelihood of payment—capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation;
|
●
|
Nature of and provisions of the obligation;
|
●
|
Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights.
|
Investment Type
|
Carillon
Reams Core Bond Fund |
Carillon
Reams Core Plus Bond Fund |
Carillon
Scout International Fund |
Carillon
Reams Low Duration Bond Fund |
Carillon
Scout Mid Cap Fund |
Carillon
Scout Small Cap Fund |
Carillon
Reams Unconstrained Bond Fund |
Equity Securities
|
●
|
●
|
●
|
||||
Common Stocks
|
●
|
●
|
●
|
||||
Convertible Securities
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Preferred Stock
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
REITs
|
●
|
●
|
●
|
||||
Warrants
|
●
|
●
|
●
|
||||
Rights
|
●
|
●
|
●
|
||||
Debt Securities
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Corporate Debt
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Lower rated/High Yield
|
●
|
●
|
●
|
||||
Variable or Floating Rate Securities
|
●
|
●
|
●
|
●
|
|||
Bankers Acceptances
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Bank Time Deposits
|
●
|
●
|
●
|
●
|
|||
Certificate of Deposit in institution w/assets greater than $1 billion
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Commercial paper of P- 1 or P- 2 or A-1 and A-2
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Repurchase Agreements
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Reverse Repurchase Agreements
|
●
|
●
|
●
|
●
|
|||
Mortgage Dollar Rolls and Sale-Buybacks
|
●
|
●
|
●
|
●
|
Loan Interests
|
●
|
●
|
●
|
●
|
|||
Institutional Term Loans
|
●
|
●
|
●
|
●
|
|||
U.S. Gov’t Securities
|
●
|
●
|
●
|
●
|
●
|
●
|
●
|
Mortgage-Backed and Other Asset-Backed Securities
|
●
|
●
|
●
|
●
|
|||
To-Be-Announced Securities
|
●
|
●
|
●
|
●
|
|||
Municipal Obligations
|
●
|
●
|
●
|
●
|
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Zero Coupon, Step Coupon and Pay-in-Kind Securities
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Total Foreign Securities Exposure including ADRs
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ADRs
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EDRs
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GDRs
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IDRs
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Depositary receipts
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Emerging markets
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Investing through Stock Connect.
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Futures Contracts and Options on Futures Contracts
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Options Contracts
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Forward Contracts
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Foreign currencies
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Foreign currency hedging options
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Foreign currency hedging futures
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Forward Currency Contracts
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Combined transactions with options, futures and forwards
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Swaps, Caps, Floors, Collars, Options on swaps, Credit default swaps
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Forward Commitments
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Short Sales
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Illiquid Securities
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Investment Companies, including money market funds and ETFs
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Foreign Investment Companies
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Index Securities
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When-Issued & Delayed Delivery Transactions
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Loans of Portfolio Securities
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Temporary Defensive Measures
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Item 15. |
Indemnification
|
Item 16. |
Exhibits
|
(1)
|
(a)
|
Amended and Restated Declaration of Trust of Eagle Series Trust, is incorporated by reference to Post-Effective Amendment No. 46 to the Registration Statement on Form N-1A, File No. 033-57986, filed previously on December 23, 2008 (“PEA No. 46”)
|
(b)
|
Certificate of Trust of Carillon Series Trust, dated May 5, 2017, is incorporated by reference to Post-Effective Amendment No. 88 to the Registration Statement on Form N-1A, File No. 033-57986, filed previously on June 30, 2017 (“PEA No. 88”)
|
|
(c)
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Agreement and Declaration of Trust of Carillon Series Trust, dated May 5, 2017, incorporated by reference to PEA No. 88
|
|
(2)
|
(a)
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Amended and Restated By-laws of Eagle Series Trust are incorporated by reference to PEA No. 46
|
(b)
|
By-laws of Carillon Series Trust, dated May 5, 2017, are incorporated by reference to PEA No. 88
|
|
(3)
|
Voting trust agreements – not applicable
|
|
(4)
|
Form of Agreement and Plan of Reorganization and Termination, is incorporated by reference to Appendix A to Part A of the Registration Statement
|
|
(5)
|
(a)
|
Shareholders’ rights are contained in Articles III, VIII, X and XI of Eagle Series Trust’s Declaration of Trust and Articles III, V and VI of Eagle Series Trust’s By-laws
|
(b)
|
Shareholders’ rights are contained in Articles III, IV, VI, VII, IX, X and XI of the Agreement and Declaration of Trust of Carillon Series Trust and Articles III, VII and IX of the By-laws of Carillon Series Trust
|
|
(6)
|
(a)
|
Investment Advisory Agreement between Eagle Series Trust and Eagle Asset Management, Inc. (“Eagle”), is incorporated by reference to Post-Effective Amendment No. 84 to the Registration Statement on Form N-1A, File No. 033-57986, filed previously on February 29, 2016 (“PEA No. 84”)
|
(b)
|
The form of Investment Advisory Agreement between Eagle Series Trust and Carillon Tower Advisers, Inc. (“Carillon Tower”), or Carillon Series Trust and Carillon Tower, is substantially identical to the Investment Advisory Agreement between Eagle Series Trust and Eagle in Exhibit (6)(a), except for the parties thereto and the dates of execution. Incorporated by reference to PEA No. 84
|
|
(c)
|
Amended Schedule A to Investment Advisory Agreement between Eagle
|
Series Trust and Eagle, is incorporated by reference to PEA No. 84 | ||
(d)
|
The form of Schedule A to the Investment Advisory Agreement between Eagle Series Trust and Carillon Tower, or Carillon Series Trust and Carillon Tower, is substantially identical to Schedule A to the Investment Advisory Agreement between Eagle Series Trust and Eagle in Exhibit (6)(c), except for the changes to the names of the series listed therein, the dates of Schedule A, the addition of Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund, and the advisory fees as set forth in the Funds’ Statement of Additional Information. Incorporated by reference to PEA No. 84
|
|
(f)
|
The form of Subadvisory Agreement between Carillon Tower and Scout Investments, Inc. (“Scout Investments”) is substantially identical to the Subadvisory Agreement between Eagle Series Trust and Cougar in PEA No. 82 except for the titles of the agreements, the parties thereto, the dates of execution, the names of the subadvised series, which are Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund, and the subadvisory fees as set forth in the Statement of Additional Information. Incorporated by reference to PEA No. 82
|
|
(g)
|
Expense Limitation Agreement between Eagle Series Trust and Eagle, is incorporated by reference to PEA 84
|
|
(h)
|
The form of Expense Limitation Agreement between Eagle Series Trust and Carillon Tower, or Carillon Series Trust and Carillon Tower, with respect to Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund is substantially identical to the Expense Limitation Agreement between Eagle Series Trust and Eagle in Exhibit (6)(g), except that the expense limits are as set forth in the Statement of Additional Information. Incorporated by reference to PEA No. 84
|
|
(7)
|
(a)
|
Distribution Agreement between Eagle Series Trust and Eagle Fund Distributors, Inc., is incorporated by reference to Post-Effective Amendment No. 57 to the Registration Statement on Form N-1A, File No. 033-57986, filed previously on June 15, 2011 (“PEA No. 57”)
|
(b)
|
The form of Distribution Agreement between Eagle Series Trust and Carillon Fund Distributors, Inc., or Carillon Series Trust and Carillon Fund Distributors, Inc., is substantially identical to the Distribution Agreement
|
between Eagle Series Trust and Eagle Fund Distributors, Inc. in Exhibit (7)(a), except for the parties thereto, the dates of execution, changes to the names of the series subject to the agreement, and the addition of Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund. Incorporated by reference to PEA No. 57 | ||
(8)
|
Bonus, profit sharing or pension plans – none
|
|
(9)
|
(a)
|
Custody Agreement between Eagle Series Trust and U.S. Bank National Association, is incorporated by reference to PEA No. 84
|
(b)
|
First Amendment to the Custody Agreement between Eagle Series Trust and U.S. Bank National Association, is incorporated by reference to PEA No. 84
|
|
(c)
|
The form of Custody Agreement between Carillon Series Trust and U.S. Bank National Association is substantially identical to the Custody Agreement between Eagle Series Trust and U.S. Bank National Association in Exhibit (9)(a), except for the parties thereto, the dates of execution and changes to the names of the series subject to the agreement. Incorporated by reference to PEA No. 84
|
|
(10)
|
(a)
|
Class I Distribution and Service Plan for Eagle Series Trust, is incorporated by reference to PEA No. 46
|
(b)
|
The form of Class I Distribution and Service Plan for Carillon Series Trust is substantially identical to the Class I Distribution and Service Plan for Eagle Series Trust in Exhibit (10)(a), except for the name of the trust, the dates of execution, and changes to the names of the series listed therein. Incorporated by reference to PEA No. 46
|
|
(e)
|
The form of Class Y Distribution and Service Plan is substantially identical to Class A Distribution Plan for Eagle Series Trust in PEA No. 46, except for changes to the names of the series listed therein and the addition of Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund, and that the maximum annualized fee rate is as set forth in the Proxy Statement/Prospectus. Incorporated by reference to PEA No. 46
|
|
(f)
|
Amended and Restated Multiple Class Plan pursuant to Rule 18f-3 for Eagle Series Trust, is incorporated by reference to PEA No. 57
|
|
(h)
|
Amended Appendix A to Rule 18f-3 Plan for Eagle Series Trust, is incorporated by reference to PEA 84
|
(g)
|
The form of Amended and Restated Multiple Class Plan pursuant to Rule 18f-3 for Carillon Series Trust is substantially identical to the Amended and Restated Multiple Class Plan pursuant to Rule 18f-3 for Eagle Series Trustin Exhibit (10)(f), except for the name of the trust, the dates of execution, changes to the names of the series listed therein and the addition of Class Y shares. Incorporated by reference to PEA No. 57
|
|
(11)
|
(a) |
Opinion and consent of counsel with regard to Carillon Series Trust – filed herewith
|
(b) |
Opinion and consent of counsel with regard to Eagle Series Trust – filed herewith
|
|
(12)
|
Opinion of Counsel on Tax Matters – (to be filed by subsequent amendment)
|
|
(13)
|
(a)
|
Transfer Agent Servicing Agreement between Eagle Series Trustand U.S. Bancorp Fund Services, LLC (“USBFS”), is incorporated by reference to PEA No. 84
|
(b)
|
The form of Transfer Agent Servicing Agreement between Carillon Series Trust and USBFS is substantially identical to the Transfer Agent Servicing Agreement between Eagle Series Trustand USBFS in Exhibit (13)(a), except for the parties thereto, the dates of execution and changes to the names of the series subject to the agreement. Incorporated by reference to PEA No. 84
|
|
(c)
|
First Amendment to the Transfer Agent Servicing Agreement between Eagle Series Trustand USBFS, is incorporated by reference to PEA No. 84
|
|
(e)
|
Agency and Service Agreement between Eagle Series Trust and Eagle Fund Services, Inc. (“EFS”), is incorporated by reference to Post-Effective Amendment No. 60 to the Trust’s Registration Statement on Form N-1A, File No. 033-57986, filed previously on February 28, 2012 (“PEA No. 60”)
|
|
(f)
|
The form of Agency and Service Agreement between Eagle Series Trust and Carillon Fund Services, Inc. (“CFS”), or Carillon Series Trust and CFS, is substantially identical to the Agency and Service Agreement between Eagle Series Trust and EFS in Exhibit (13)(e), except for the parties thereto and the dates of execution. Incorporated by reference to PEA No. 60
|
|
(g)
|
Amended Schedule I to Agency and Service Agreement between Eagle Series Trust and EFS, is incorporated by reference to PEA 84
|
|
(h)
|
The form of Schedule I to Agency and Service Agreement between Eagle Series Trust and CFS, or Carillon Series Trust and CFS, is substantially identical to the Amended Scheduled I to Agency and Service Agreement between Eagle Series Trust and EFS in Exhibit (13)(g), except for changes to the names of the series listed therein and the addition of Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund. Incorporated by reference to PEA No. 84
|
(i)
|
Administration Agreement between Eagle Series Trust and Eagle, is incorporated by reference to PEA No. 57
|
|
(j)
|
The form of Administration Agreement between Eagle Series Trust and Carillon Tower, or Carillon Series Trust and Carillon Tower, is substantially identical to the Administration Agreement between Eagle Series Trust and Eagle in Exhibit (13)(i), except for the parties thereto and the dates of execution. Incorporated by reference to PEA No. 57
|
|
(k)
|
Amended Schedule A to Administration Agreement between Eagle Series Trust and Eagle, is incorporated by reference to PEA 84
|
|
(l)
|
The form of Schedule A to Administration Agreement between Eagle Series Trust and Carillon Tower, or Carillon Series Trust and Carillon Tower, is substantially identical to the Amended Schedule A to Administration Agreement between Eagle Series Trust and Eagle in Exhibit (13)(k), except for the dates of the schedules, changes to the names of the series listed therein and the addition of Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund. Incorporated by reference to PEA No. 84
|
|
(m)
|
Fund Sub-Administration Servicing Agreement between Eagle and U.S. Bancorp, is incorporated by reference to PEA 84
|
|
(n)
|
First Amendment to the Fund Sub-Administration Servicing Agreement between Eagle and USBFS, is incorporated by reference to PEA 84
|
|
(o)
|
The form of Fund Sub-Administration Servicing Agreement between Carillon Tower and USBFS is substantially identical to the Fund Sub-Administration Servicing Agreement between Eagle and USBFS in Exhibit (13)(m), and the First Amendment to the Fund Sub-Administration Servicing Agreement between Eagle and USBFS in Exhibit (13)(n), except for the parties thereto, the dates of execution, changes to the names of the series subject to the agreement and the addition of Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund. Incorporated by reference to PEA No. 84
|
|
(p)
|
Fund Accounting Servicing Agreement between Eagle Series Trust and USBFS, is incorporated by reference to PEA 84
|
|
(q)
|
The form of Fund Accounting Servicing Agreement between Carillon Series Trust and USBFS is substantially identical to the Fund Accounting Servicing Agreement between Eagle Series Trust and USBFS in Exhibit 13(p), except for the parties thereto, the dates of execution and changes to the names of the series
|
subject to the agreement. Incorporated by reference to PEA No. 84 | ||
(r)
|
First Amendment to the Fund Accounting Servicing Agreement between Eagle Series Trust and USBFS, is incorporated by reference to PEA 84
|
|
(s)
|
The form of First Amendment to the Fund Accounting Servicing Agreement between Carillon Series Trust and USBFS is substantially identical to the First Amendment to the Fund Accounting Servicing Agreement between Eagle Series Trust and USBFS in Exhibit (13)(r), except for the parties thereto, the dates of execution, changes to the names of the series subject to the agreement and the addition of Carillon Reams Core Bond Fund, Carillon Reams Core Plus Bond Fund, Carillon Scout International Fund, Carillon Reams Low Duration Bond Fund, Carillon Scout Mid Cap Fund, Carillon Scout Small Cap Fund and Carillon Reams Unconstrained Bond Fund. Incorporated by reference to PEA No. 84.
|
|
(14)
|
Consent of Independent Registered Certified Public Accounting Firm – filed herewith
|
|
(15)
|
Financial statements omitted from proxy statement/prospectus – none
|
|
(16)
|
(a) |
Powers of Attorney for Carillon Series Trust – filed herewith
|
(b) | Powers of Attorney for Eagle Series Trust – filed herewith | |
(17)
|
Other Exhibits
|
|
(a) | Form of Proxy Card |
|
EAGLE SERIES TRUST
|
|
|
|
|
|
|
|
By:
|
/s/ Susan L. Walzer
|
|
|
|
Susan L. Walzer
Principal Executive Officer
|
|
Signature
|
Title
|
Date
|
/s/ Susan L. Walzer
Susan L. Walzer
|
Principal Executive Officer
|
June 30, 2017
|
/s/ James L. Pappas*
James L. Pappas
|
Chairman of the Board
|
June 30, 2017
|
/s/ J. Cooper Abbott
J. Cooper Abbott
|
Trustee
|
June 30, 2017
|
/s/ John Carter*
John Carter
|
Trustee
|
June 30, 2017
|
/s/ Court James
Court James
|
Trustee
|
June 30, 2017
|
/s/ Keith B. Jarrett*
Keith B. Jarrett
|
Trustee
|
June 30, 2017
|
/s/ William J. Meurer*
William J. Meurer
|
Trustee
|
June 30, 2017
|
/s/ Liana O’Drobinak*
Liana O’Drobinak
|
Trustee
|
June 30, 2017
|
/s/ Stephen Roussin*
Stephen Roussin
|
Trustee
|
June 30, 2017
|
/s/ Deborah L. Talbot*
Deborah L. Talbot
|
Trustee
|
June 30, 2017
|
/s/ Carolyn K. Gill
Carolyn K. Gill
|
Principal Financial Officer
|
June 30, 2017
|
*By:
|
/s/ Susan L. Walzer | |
Susan L. Walzer
Attorney-In-Fact
|
|
CARILLON SERIES TRUST
|
|
|
|
|
|
|
|
By:
|
/s/ Susan L. Walzer
|
|
|
|
Susan L. Walzer
Principal Executive Officer
|
|
Signature
|
Title
|
Date
|
/s/ Susan L. Walzer
Susan L. Walzer
|
Principal Executive Officer
|
June 30, 2017
|
/s/ James L. Pappas*
James L. Pappas
|
Chairman of the Board
|
June 30, 2017
|
/s/ J. Cooper Abbott
J. Cooper Abbott
|
Trustee
|
June 30, 2017
|
/s/ John Carter*
John Carter
|
Trustee
|
June 30, 2017
|
/s/ Court James
Court James
|
Trustee
|
June 30, 2017
|
/s/ Keith B. Jarrett*
Keith B. Jarrett
|
Trustee
|
June 30, 2017
|
/s/ William J. Meurer*
William J. Meurer
|
Trustee
|
June 30, 2017
|
Liana O'Drobinak
|
Trustee |
June 30, 2017
|
/s/ Stephen Roussin*
Stephen Roussin
|
Trustee
|
June 30, 2017
|
/s/ Deborah L. Talbot*
Deborah L. Talbot
|
Trustee
|
June 30, 2017
|
/s/ Carolyn K. Gill
Carolyn K. Gill
|
Principal Financial Officer
|
June 30, 2017
|
*By:
|
/s/ Susan L. Walzer | |
Susan L. Walzer
Attorney-In-Fact
|
Exhibit
|
Description
|
EX-99. (11)(a)
|
Opinion and consent of counsel with regard to Carillon Series Trust
|
EX-99. (11)(b)
|
Opinion and consent of counsel with regard to Eagle Series Trust |
EX-99. (14)
|
Consent of independent registered public accounting firms
|
EX-99. (16)(a)
|
Powers of Attorney for Carillon Series Trust
|
EX-99. (16)(b)
|
Powers of Attorney for Eagle Series Trust
|
EX-99. (17)(a) | Form of Proxy Card |
![]() |
K&L GATES LLP
1601 K STREET, N.W.
WASHINGTON, DC 20006
T +1 202 778 9000 F +1 202 778 9100 klgates.com
|
![]() |
Page 2
June 30, 2017
|
(i) |
the combined proxy statement and prospectus, including the form of the Agreement attached as Appendix A thereto, and statement of additional information (collectively, the “Proxy Statement/Prospectus”) filed as part of the Registration Statement;
|
(ii) |
the Delaware Trust’s certificate of trust, governing instrument, and bylaws in effect on the date of this opinion letter; and
|
(iii) |
the resolutions adopted by the trustees of the Delaware Trust relating to the Registration Statement, the establishment and designation of its Acquiring Funds and their Shares of each class, and the authorization for issuance and delivery of these Shares pursuant to the Agreement.
|
![]() |
Page 3
June 30, 2017
|
|
Very truly yours,
/s/ K&L Gates LLP
|
![]() |
K&L GATES LLP
1601 K STREET, N.W.
WASHINGTON, DC 20006
T +1 202 778 9000 F +1 202 778 9100 klgates.com
|
![]() |
Page 2
June 30, 2017
|
(i) |
the combined proxy statement and prospectus, including the form of the Agreement attached as Appendix A thereto, and statement of additional information (collectively, the “Proxy Statement/Prospectus”) filed as part of the Registration Statement;
|
(ii) |
the Massachusetts Trust’s declaration of trust and bylaws in effect on the date of this opinion letter; and
|
(iii) |
the resolutions adopted by the trustees of the Massachusetts Trust relating to the Registration Statement, the establishment and designation of its Acquiring Funds and their Shares of each class, and the authorization for issuance and delivery of these Shares pursuant to the Agreement.
|
![]() |
Page 3
June 30, 2017
|
|
Very truly yours,
/s/ K&L Gates LLP
|
/s/ James L. Pappas
|
/s/ John Carter
|
James L. Pappas
|
John Carter
|
Trustee
|
Trustee
|
/s/ Stephen C. Roussin | /s/ Keith B. Jarrett |
Stephen C. Roussin | Keith B. Jarrett |
Trustee | Trustee |
/s/ William J. Meurer | |
Liana O‘Drobinak | William J. Meurer |
Trustee | Trustee |
/s/ Deborah L. Talbot | /s/ J. Cooper Abbott |
Deborah L. Talbot | J. Cooper Abbott |
Trustee | Trustee |
/s/ Courtland James | |
Courtland James | |
Trustee |
/s/ James L. Pappas
|
/s/ John Carter
|
James L. Pappas
|
John Carter
|
Trustee
|
Trustee
|
/s/ Stephen C. Roussin | /s/ Keith B. Jarrett |
Stephen C. Roussin | Keith B. Jarrett |
Trustee | Trustee |
/s/ Liana O’Drobinak | /s/ William J. Meurer |
Liana O‘Drobinak | William J. Meurer |
Trustee | Trustee |
/s/ Deborah L. Talbot | /s/ J. Cooper Abbott |
Deborah L. Talbot | J. Cooper Abbott |
Trustee | Trustee |
/s/ Courtland James | |
Courtland James | |
Trustee |
|
|
PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
|
|
|
Dated __________________, 20__
|
|
|
|
|
||
|
|
|
|
|
SIGNATURE(S) OF SHAREHOLDER(S) (Sign in the Box)
|
|
|
PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
|
|
Please fill in box(es) as shown using black or blue
ink or number 2 pencil. ☒
|
|
PLEASE DO NOT USE FINE POINT PENS.
|
FOR
|
AGAINST
|
ABSTAIN
|
|
PROPOSAL
|
|||
Approval of the Agreement and Plan of Reorganization and Termination, which provides for the reorganization of the Scout Core Bond Fund into the Carillon Reams Core Bond Fund.
|
☐
|
☐
|
☐
|
|
|
PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
|
|
|
Dated __________________, 20__
|
|
|
|
|
||
|
|
|
|
|
SIGNATURE(S) OF SHAREHOLDER(S) (Sign in the Box)
|
|
|
PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
|
|
Please fill in box(es) as shown using black or blue
ink or number 2 pencil. ☒
|
|
PLEASE DO NOT USE FINE POINT PENS.
|
FOR
|
AGAINST
|
ABSTAIN
|
|
PROPOSAL
|
|||
Approval of the Agreement and Plan of Reorganization and Termination, which provides for the reorganization of the Scout Core Plus Bond Fund into the Carillon Reams Core Plus Bond Fund.
|
☐
|
☐
|
☐
|
|
|
PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
|
|
|
Dated __________________, 20__
|
|
|
|
|
||
|
|
|
|
|
SIGNATURE(S) OF SHAREHOLDER(S) (Sign in the Box)
|
|
|
PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
|
|
Please fill in box(es) as shown using black or blue
ink or number 2 pencil. ☒
|
|
PLEASE DO NOT USE FINE POINT PENS.
|
FOR
|
AGAINST
|
ABSTAIN
|
|
PROPOSAL
|
|||
Approval of the Agreement and Plan of Reorganization and Termination, which provides for the reorganization of the Scout International Fund into the Carillon Scout International Fund.
|
☐
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☐
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☐
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PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
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Dated __________________, 20__
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SIGNATURE(S) OF SHAREHOLDER(S) (Sign in the Box)
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PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
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Please fill in box(es) as shown using black or blue
ink or number 2 pencil. ☒
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PLEASE DO NOT USE FINE POINT PENS.
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FOR
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AGAINST
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ABSTAIN
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PROPOSAL
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Approval of the Agreement and Plan of Reorganization and Termination, which provides for the reorganization of the Scout Low Duration Bond Fund into the Carillon Reams Low Duration Bond Fund.
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☐
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☐
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☐
|
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PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
|
|
|
Dated __________________, 20__
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||
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|
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SIGNATURE(S) OF SHAREHOLDER(S) (Sign in the Box)
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PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
|
|
Please fill in box(es) as shown using black or blue
ink or number 2 pencil. ☒
|
|
PLEASE DO NOT USE FINE POINT PENS.
|
FOR
|
AGAINST
|
ABSTAIN
|
|
PROPOSAL
|
|||
Approval of the Agreement and Plan of Reorganization and Termination, which provides for the reorganization of the Scout Mid Cap Fund into the Carillon Scout Mid Cap Fund.
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☐
|
☐
|
☐
|
|
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PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
|
|
|
Dated __________________, 20__
|
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|
||
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|
|
SIGNATURE(S) OF SHAREHOLDER(S) (Sign in the Box)
|
|
|
PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
|
|
Please fill in box(es) as shown using black or blue
ink or number 2 pencil. ☒
|
|
PLEASE DO NOT USE FINE POINT PENS.
|
FOR
|
AGAINST
|
ABSTAIN
|
|
PROPOSAL
|
|||
Approval of the Agreement and Plan of Reorganization and Termination, which provides for the reorganization of the Scout Small Cap Fund into the Carillon Scout Small Cap Fund.
|
☐
|
☐
|
☐
|
|
|
PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
|
|
|
Dated __________________, 20__
|
|
|
|
|
||
|
|
|
|
|
SIGNATURE(S) OF SHAREHOLDER(S) (Sign in the Box)
|
|
|
PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR. WHEN SIGNING AS AN ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL TITLE AS SUCH.
|
|
Please fill in box(es) as shown using black or blue
ink or number 2 pencil. ☒
|
|
PLEASE DO NOT USE FINE POINT PENS.
|
FOR
|
AGAINST
|
ABSTAIN
|
|
PROPOSAL
|
|||
Approval of the Agreement and Plan of Reorganization and Termination, which provides for the reorganization of the Scout Unconstrained Bond Fund into the Carillon Reams Unconstrained Bond Fund.
|
☐
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☐
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☐
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K&L GATES LLP
1601 K STREET, N.W.
WASHINGTON, DC 20006
T +1 202 778 9000 F +1 202 778 9100 klgates.com
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Re:
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Carillon Series Trust
Eagle Series Trust
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Registration Statement on Form N-14
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Very truly yours,
/s/ Kathy Kresch Ingber
Kathy Kresch Ingber
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cc:
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Susan L. Walzer
Daniel R. Dzibinski
Carillon Tower Advisers, Inc.
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